Finance Committee to Review Human Resources, City Manager’s Office Fiscal Year 2026 Budgets

The Finance Department will conduct budget workshops on the City Manager’s office and the city’s Human Resources Department on Thursday.

The presentation will highlight initiatives in labor negotiations, employee engagement, recruitment, and wellness.

Among the department’s achievements were the successful negotiation of a new multi-year labor agreement with the newly formed Pasadena Police Lieutenants Association. In addition, the department implemented several classification and compensation adjustments to improve employee retention citywide.

On the employee wellness front, HR launched onsite mental health and trauma resilience services. The department also played a vital role in supporting staff affected by the Eaton Fire, offering assistance to displaced employees.

The city’s efforts to hire locally were notable, with 56% of entry-level positions in FY 2025 filled by Pasadena-area applicants, according to Key Performance Indicator (KPI) data. HR also rolled out its first citywide employee engagement survey, which yielded a participation rate of 73% and an overall satisfaction score of 3.87 out of 5 — placing Pasadena in the 80th percentile among government agencies.

Looking ahead to FY 2026, the Human Resources Department plans to refine its strategic operations by reviewing KPIs, assessing its time-to-hire lifecycle, and re-evaluating resource allocation. The department will also conduct its second employee engagement survey, continue classification and compensation reviews, and expand its social media presence to promote Pasadena as an employer of choice.

Labor negotiations are expected to continue as four major multi-year Memorandums of Understanding (MOUs) — with American Federation of State, County and Municipal Employees, International Brotherhood of Electrical Workers, Laborers’ International Union of North America, and the Pasadena Police Officers Association — are set to expire on June 30, 2026.

The department’s recommended FY 2026 budget totals approximately $8.14 million, an 8% increase over the FY 2025 adopted budget. The largest cost driver is a $389,000 increase in personnel expenses, fueled by cost-of-living adjustments, filled vacancies, and higher pension costs.

An additional $226,000 is allocated to services and supplies, largely due to growing pre-employment service demands and contractual adjustments. Internal service charges are also expected to rise by nearly $200,000, driven by cost allocation plan increases and technology support charges.

The department will maintain 30 full-time equivalent positions in FY 2026, following a reduction from 36 positions in FY 2024 due to the reorganization of Risk Management into the City Manager’s Office.

The City Manager’s Office has proposed a $19.4 million budget for Fiscal Year 2026, maintaining operational stability while emphasizing risk management, economic development, and long-term planning, according to a presentation delivered at the May 12 Finance Committee meeting.

Although the proposed budget reflects a slight 0.2% decrease from FY 2025 levels, key initiatives are slated to continue, including support for the Reconnecting Communities 710 Master Plan, preparations for the 2028 Olympics, and centralized early childhood education efforts through the Office of the Young Child.

The FY 2026 spending plan includes a personnel budget of $11 million, a 5.8% increase from the prior year. This includes reassignments and reductions that result in a net loss of three full-time equivalent (FTE) positions, largely due to the drawdown of Career Services funding. The budget also anticipates a $1.3 million increase in internal service charges — up 26.6% — attributed to citywide inflationary adjustments and technology support.

By division, the Economic Development and Risk Management teams remain top priorities, with allocations of $6.2 million and $5.8 million, respectively. The Office of Internal Audit and Public Affairs will receive modest increases, while funds for Career Services and certain consultant contracts related to the 710 project have been reduced to match projected activity.

The department also highlighted major accomplishments from the past year, including securing voter approval for six City Charter amendments (Measures PA, PB, PC, PF, PR, and PL), hiring a sustainability coordinator, and expanding support for 18 departments in public affairs and media outreach.

Risk Management played a key role in reducing employee injuries, launching a workers’ compensation carve-out program, and resolving multiple pre-litigation claims.

For FY 2026, the division is requesting $227,857 in budget enhancements, including leasing office space, adding software for tracking insurance certificates and compensation claims, and expanding staff with a Mobile Alternative Services for Health trainee.

Approximately 53% of the department’s total funding comes from the General Fund, with 21% drawn from the Workers’ Compensation Fund, 19% from the Workforce Innovation and Opportunity Act (WIOA), and 7% from the General Liability Fund.

Looking ahead, the City Manager’s Office has set priorities that include continued oversight of the 710 corridor transformation, enhanced citywide engagement through Public Affairs, fraud monitoring via Internal Audit, and ongoing efforts to prepare for the 2028 Olympic and Paralympic Games.

The full FY 2026 recommended budget is available for review on the City of Pasadena’s website.

Public hearings and department presentations will continue in the coming weeks, leading up to expected adoption of the final budget by the City Council on June 9.