Irvine City Council to Consider Strategy to Eliminate Projected Deficit with “Target ’28 Plan” at Tuesday Special Meeting
The City of Irvine has presented a comprehensive report outlining strategies to resolve a growing structural deficit in its General Fund. Under the proposed “Target ’28” plan, city staff aims to bring the General Fund into full structural balance by June 30, 2028. The Irvine City Council will hold a special meeting on Tuesday, September 22, at 1:30 p.m. to evaluate staff recommendations.
The meeting comes in response to a May 5, 2026 directive from the City Council asking staff to analyze the General Fund structural deficit and present options to balance the budget. City staff evaluated expenditure reductions, staffing and vacancy management, non-core spending, user fees, fund balances, revenue options, and alternative balancing scenarios. Read staff report.
Projections: Baseline vs. Target ’28 Plan
Without corrective action, Irvine’s General Fund deficit is projected to widen significantly over the next five fiscal years due to expenditure growth outpacing revenue increases:
Key Elements of the Recommended Plan
As detailed in the staff report (Attachment 9, p.88), the plan outlines $37.4 million in balancing measures beginning in fiscal year 2027–28. The Target ’28 plan avoids new or increased taxes. Instead, it balances the budget by combining $27 million in ongoing expenditure savings with $10 million in ongoing revenue recovery.
- Strategically Managed Vacancies & Organizational Efficiencies ($17M Savings): Achieved through natural attrition, organizational streamlining, and holding select vacant positions. The city is currently holding 62 non-essential positions vacant and projects maintaining around 123 vacant positions across non-public safety departments if fully implemented.
- Departmental Expenditure Adjustments ($10M Savings): Ongoing cost adjustments framed to minimize direct impacts on public services.
- User Fee Cost Recovery Realignment ($10M Revenue): Irvine currently recovers approximately 62% of costs through user fees. Target ’28 aims to increase average cost recovery closer to 80% to align with market rates and lower General Fund subsidies. Subsidies and scholarship assistance will be preserved for low-income residents, seniors, and children.
Alternative Options for Council Consideration
The City Council may adopt staff’s recommended approach or direct alternative balancing measures. Potential areas identified by staff for additional Council evaluation to reduce reliance on vacancy assessments include:
- Plan A (No New Taxes / No Broad Fee Increases): Relies solely on $37M in annual expenditure reductions by FY 2027–28. Requires cutting $10M from discretionary items, such as special events, direct school support ($4.1M), and nonprofit contributions ($5.8M). Not recommended due to severe public service impacts.
- Plan B (Expenditure Reductions with Limited Revenue Growth): Combines $32M in spending cuts, $5M in reduced agency/nonprofit contributions, and $5M in limited fee adjustments. Not recommended as long-term expenditure growth would still outpace revenue.
- Plan C (“Target ’28” Staff Recommendation): Blends $27M in expenditure cuts (vacancies and operations) with $10M in cost recovery without raising taxes. This was recommended by staff for long-term fiscal stability.
Tomorrow, the City Council will consider adopting Target ’28 or directing modifications. If adopted, staff will incorporate these measures into the upcoming FY 2027–29 two-year budget cycle and bring individual fee and operational updates back for approval.
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Irvine City Hall, 1 Civic Center Plaza
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Meeting ID: 160-043-4844
Passcode: 272906
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