West Covina acting city manager presents structurally balanced FY 2025–26 budget; pension, overtime and street‑sweeping costs draw public scrutiny

Acting City Manager Milan Marakovich presented the City of West Covina’s proposed fiscal year 2025–26 budget at a public budget workshop, saying the plan is “structurally balanced” citywide while flagging growing pension and liability costs that are pressuring future budgets.

"My name is Milan Marakovich. I'm the acting city manager for the city of West Covina, and I took over just over 12 days ago," Marakovich said at the start of the workshop, noting staff scheduled three community budget workshops to respond to resident questions.

The presentation, delivered by budget staff, shows combined revenues for all funds of about $144.2 million and total expenditures excluding transfers of roughly $156.0 million. The general fund is identified as the largest fund at about $82.0 million (about 67% of the city’s budget). Staff described the proposed budget as structurally balanced for recurring revenue and recurring expenditures while using accumulated special‑revenue fund balances to fund certain capital needs.

Budget presenter Maria Luisa said the one‑year proposed budget differs from a five‑year long‑range financial forecast presented earlier and that a revised presentation would be posted on the city website. "I'm gonna go over the proposed budget for 2526, which is different from the financial forecast that was presented last month," she said, adding the packet includes a more detailed view of revenues and expenditures than the forecast.

Staff highlighted several items driving higher costs: pension costs tied to CalPERS unfunded accrued liabilities (UAL), increased workers’ compensation and liability funding in the internal service fund, and rising salary and benefit costs driven by memorandums of understanding with bargaining groups. City figures shown at the workshop reported the city’s UAL as roughly $12.7 million in 2022, $20.5 million in 2023 and about $24.5 million in the most recent audited report.

Marakovich and budget staff identified specific budget details and proposals: a proposed exchange of Proposition A transportation funds (staff described exchanging about $3.5 million in Proposition A funds in return for about $2.6 million in general‑fund monies), about $12.7 million in proposed capital projects funded from a mix of local returns, Measure W, SB 1, and other local pots, and an additional proposed $12.0 million in capital spending next year. Staff also estimated overtime (excluding embedded FLSA overtime in bargaining agreements) has been consistent around $6.6 million.

Public commenters used the workshop to press several issues. Multiple residents criticized ongoing spending tied to a local health department effort, with one resident recommending dropping the health department budget item. Questions also focused on the street‑sweeping and permit‑parking implementation and related enforcement, which prompted extended staff response about a phased rollout, sign installation, a planned warning period before citations, and coordination with the contractor. Marakovich told residents the city would accept and address street‑sweeping complaints through the city’s reporting app and provided his email (mmarakovich@westcovina.org) for follow‑up.

On parking enforcement and projected fine revenue, staff said the city is not currently writing street‑sweeping tickets while the program rolls out; staff indicated a prior year projection for parking‑related revenues around $200,000 and noted a partial staffing plan funded from Measure M and the general fund for enforcement positions.

Public safety staffing and overtime were also a focus. Staff described ongoing recruitment efforts for police and fire — including outreach to academies and military bases — and said retirements and lateral transfers mean hiring pipelines take time. "As fast as we hire people or get them through the process of onboarding them, we do have retirements," Marakovich said, noting the typical police onboarding timeline of about a year. Resident and public commenters urged that collective bargaining remain the avenue to reduce overtime; commenter Jim Burmich observed that prior bargaining produced only modest overtime reductions, saying, "When negotiations were over with, the reduction was a tiny amount less than a hundred thousand dollars."

Other items in the budget packet: a general fund ending fund balance shown near $20.7 million with an 18% reserve policy (the city said the reserve requirement was raised from 17% to 18% following a state audit); presentation slides listing special events non‑salary expenditures (proposed at $466,000 for the current year versus an original budget of $210,000); and a debt‑service summary noting the 2020 pension obligation bond payment (principal and interest) is about $11.0 million annually.

Staff identified next steps and program directions rather than council decisions at the workshop. The city intends to present a shorter version of the same numbers to the council, file documents needed for a GFOA award where applicable, and seek formal budget adoption at a June 17 council meeting so expenditures and payroll can proceed by the July 1 fiscal year start. Staff also said it will capture questions from each workshop and provide answers in later meetings and on the website.

No formal council votes or ordinance actions were taken at the workshop; the session functioned as informational presentation and public comment on the proposed FY 2025–26 budget.

A full copy of the presentation and the staff responses to resident questions are expected to be posted on the city website following the workshop.