Increased policing costs may tip Saratoga into a budget deficit

Saratoga is battling financial concerns as a pricey public safety contract with the Santa Clara County Sheriff’s Office threatens to destabilize the budget they balanced last year.

At a city council retreat on Tuesday, Saratoga councilmembers received staff reports concerning a midyear financial update and new contract demands from the  sheriff’s office. The city is one of a few that contract their public safety needs to the county sheriff. Service levels have fluctuated over the years to accommodate community needs, like changes to patrol hours, traffic enforcement and the addition of a school resource officer.

From last July and December, the city saw revenues increase by $3.4 million and $800,000 in savings from reduced spending. Service charges, property taxes and interest revenue were the main sources of increased income in the last six months, and the city has been able to save money from lower contract and personnel costs and employment vacancies. By January, city staff forecast an operating expense budget of $31.7 million and revenues totaling $36 million.

However, the city’s public safety contract with the sheriff’s office is expected to increase by $2.9 million, 33% more than what Saratoga already pays. According to the county, the reason for the increase goes hand in hand with more complexity in policing. They cited expanded state-mandated training regarding the use of force, firearms and de-escalation tactics; greater reliance on technology like body-worn cameras and secure networks and computers; and significantly expanded reporting and accountability requirements, including public records obligations and independent review processes. The county also stated that recruitment and retention challenges are the most significant issue, leading to hiring, training and retention costs.

Saratoga is paying about $9 million for the city’s contract that ends on June 30. After 2027, public safety contract costs will continue to increase by 5% each year. If the city chooses to continue to contract with the sheriff’s department, police would make up 33.5% of Saratoga’s budget, making it its largest expense. It would also put Saratoga on par with other cities that spend similar amounts on their own police departments, like Campbell, Los Gatos and Morgan Hill.

City staff warned that expenses will soon outweigh revenues. Their preliminary forecast for the 2026-27 fiscal year shows a $900,000 deficit with the higher sheriff costs. City staff acknowledged that they cannot negotiate with the sheriff’s office to bring the cost down.

Councilmembers on Tuesday discussed the possibility of using cheaper law enforcement services, but given that Saratoga has contracted out its police services to the county since its incorporation in 1956, there are “no normal (public safety) alternatives,” said administrative services director Ryan Hinchman.

Staff suggested saving $1.1 million by reducing the traffic and school resource officers’ hours by half, making them part-time positions. They also considered asking for fewer services altogether, which could lead to the elimination of the school resource officer and less traffic enforcement.

Another option was to work with neighboring cities like Los Gatos to create a bigger West Valley police department. Staff suggested growing this police force to encapsulate the three cities that contract with the county — Cupertino, Los Altos Hills and Saratoga — and even nearby colleges, but they also said it is not an immediate solution and would require heavy investment.

No decision was reached by the council, and the matter will be reintroduced at a later date.