South Gate council adopts short‑term budget plan, delays deeper cuts while seeking revenue options

South Gate city leaders on Tuesday approved a budget package that trims roughly $2.2 million in internal spending and relies on one‑time reserves and transfers to balance the fiscal year 2025–26 budget, while postponing far deeper cuts that officials warned would sharply reduce services.

The council adopted the package after a presentation from City Manager Rob Houston and Administrative Services Director Louis Frost, who said the city faces a structural budget gap driven by rising pension, health‑insurance and contract costs. "We are projecting at least an $8,000,000 structural gap in fiscal year 26–27 if no action is taken," Frost said during the hearing.

The adopted plan freezes 17 vacant positions across departments, including five sworn police positions that otherwise would have been filled, reduces training and discretionary spending and scales back some public‑facing programs. It also uses budget stabilization reserves (about $2.2 million for this year) and transfers from other funds to produce an estimated year‑end general fund balance of roughly $3.1 million, staff said.

Why it matters

Officials said the city has sustained services in recent years by relying on one‑time federal funds — primarily American Rescue Plan Act (ARPA) dollars — and reserves, but that those sources have dried up. "We used one‑time reserves and budget stabilization funds to maintain current service levels. This approach, while necessary, is not sustainable in the long term," Frost told the council.

The staff presentation laid out two broad choices: a deep set of cuts that would…