City Council Agrees to Proposed Budget
Published on May 23, 2025
Facing Budget Deficit, City Council Listens to Proposed Budget
Over two days, the City Council listened to budget presentations from 13 departments in the City. The City of Culver City is facing a structural deficit in the General Fund. Lisa Soghor, Chief Financial Officer for the City, provided a budget and economic outlook. It in, she described a period of economic cool down with revenues remaining strong but growth slowing. The proposed budget maintains current service levels, including the homeless services that have been implemented over the past two years. Because General Fund expenditures exceed revenues, the City will need to rely on its reserves. Current expenditures levels, Soghor explained, are not sustainable and there is no capacity for new commitments. You can view the Fiscal Year 2025-2026 Proposed Budget on the City's website.
The General Fund proposed expenditures are $199.3 million with an estimated $177.6 million in General Fund revenue. The proposed budget will draw down the General Fund Reserves by an estimated $21.7 million, leaving an estimated total of $108.8 million at the end of the fiscal year. Soghor pointed out the City is fortunate to have strong General Fund Reserves. The 10-year forecast shows the City would nearly deplete all of its reserves by Fiscal Year 2034-2035, leaving only $4.5 million. If voters approve Measure CL, the .25% sales tax in August, that revenue would buoy reserves to an estimated $65.8 million at the end of 10 years, Soghor said.
With the deficit in mind, City Manager John Nachbar tasked departments with finding expenditure reductions and potential revenue enhancements. Departments identified $1.5 million in cost reductions and $4.1 million in revenue enhancements. These reductions and enhancements are not enough to offset base budget increases of $11.9 million, not including price escalators in existing contract service agreements. Those increases include salaries per MOUs and the Salary Initiative Ordinance, CalPERS Unfunded Liability Payment, Self-Insurance Fund Contributions, utility cost increases, and shifting HHS costs from Housing Authority to the General Fund. The City’s CalPERS Unfunded Accrued Liability (UAL) payment will increase to $28.7 million; an additional $2.6 million to the General Fund.
Departments requested a total of 38 new positions. City Manager John Nachbar only recommended 11 new positions to support Housing and Human Services and the Fire Department. Those positions are almost entirely off-set by reductions in contract services, grants, and salary savings.
In Fiscal Year 2025-2026, the proposed budget includes $16.2 million for frontline staff and contracts to support homelessness programs including Wellness Village, Project Homekey operations, Mobile Crisis intervention and Motel Master Leasing.
The budget includes $1 million in funding for Culver City Unified School District that covers refuse services, sewer charges, CCUSD crossing guards, and timing system for swim meets at The Plunge.
Funding for the Jubilo Village affordable housing project is also included in the proposed budget. There is a $4 million loan from the Housing Authority Fund approved in Fiscal Year 2022-2023, plus the $16 million contribution as directed by City Council on March 10, 2025. The first installment of funds will be $4 million in next fiscal year. The remaining $12 million will be moved from the General Fund Contingency Reserve to a Restricted General Fund Reserve to be distributed to the project in Fiscal Year 2026-2027. Moving these funds would leave the Contingency Reserve, which has a target balance of 30% of the General Fund Operating Budget, with an estimated $36.8 million or 19%.
Following roughly 13 hours of presentations, the City Council moved forward with the proposed budget with several inclusions. Vice Mayor Freddy Puza and Council Members Yasmine-Imani McMorrin and Bubba Fish provided direction to staff to include a $250,000 funding enhancement to create a potential community-driven budget process. The City Council unanimously agreed to add a $100,000 funding enhancement for the additional environmental studies for the Hayden Tract Specific Plan.
The City Council will officially vote on the budget during its June 9th meeting. The next Regular Meeting of the City Council is scheduled for Monday, May 27th. Childcare is available.