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Council adopts fiscal year 2025–26 operating and CIP budget; officials flag structural gap in 2027–28
Summary
The council adopted the FY 2025–26 operating and capital improvement budget, approving a balanced budget for the upcoming year while staff warned of a potential structural deficit beginning in fiscal year 2027–28 and highlighted a $2.9 million required CalPERS unfunded liability payment.
The El Segundo City Council adopted the fiscal year 2025–26 operating and capital improvement program budget and the GANN appropriations limit by resolution at its June 3 public hearing.
Chief Financial Officer Paul Chung presented a condensed budget overview and noted staff incorporated council direction from a May 5 budget workshop. The adopted budget projects general fund revenues of approximately $104.6 million and general fund appropriations of roughly $104.7 million (including $5.2 million in general‑fund CIP). Council approved adjustments made after the workshop—most notably a reduction in proposed police staffing from 69 to 67 sworn officers and the addition of a staffed after‑school program (Club Kawabonga) that is net revenue positive.
Chung and other staff flagged a required one‑time payment of about $2.9 million for unfunded pension liability (CalPERS UAL) in FY 2025–26 and warned the city faces a potential structural gap in FY 2027–28 if no new revenue sources are identified. The staff presentation included options for new revenues for council consideration — a sales tax increase (a 0.75 percentage‑point increase could yield about $9 million annually), a 1 percentage‑point increase in transient occupancy tax (roughly $1 million), or increasing the utility users tax by 1 percentage point (estimated $0.5–1.0 million).
Council members discussed reserves, pension trust usage, and the merits of preserving the city’s investment returns. The resolution adopting the budget passed 5-0.
