La Habra council adopts balanced $173 million municipal budget, approves higher police lateral bonus

The La Habra City Council on June 2 approved the city's Fiscal Year 2025'026 municipal budget, receiving and filing a proposed $173.4 million spending plan that includes a $70.3 million general fund. The council also unanimously approved increasing the police lateral signing bonus from $10,000 to $20,000 and directed staff to return with an assessment on adding one police position once current vacancies are filled.

City Manager Jim Sadro and Assistant City Manager Gabriella "Gabby" Yap led the council through the budget presentation, with detailed revenue and expenditure analysis provided by Finance Director Mel Shannon and Deputy Finance Director Jack Ponbanet. The administration described the general fund as balanced for FY2025'026, with projected general fund revenues of roughly $70.3 million and proposed general fund expenditures of about $70.3 million.

The budget matters because it funds core services and capital work the city has prioritized. Measure V, the local transaction and use tax voters approved in November 2024, appears as the single largest recent revenue change: staff presented projections of roughly $15 million in Measure V receipts for the coming year, though presenters noted earlier internal projections ranged (Gabby Yap earlier referenced a projection near $15.6 million while city management later described it as "just under $15 million").

City staff identified several major expense drivers in the general fund. The budget includes a $1.4 million transfer to the general capital projects fund; new costs related to PERS unfunded liabilities (about $978,000); the first-year cost of a four-year police labor agreement (about $943,000); increased ambulance and LA County Fire costs (composite increases described as about $556,000, with roughly $289,000 identified as an increase tied to the LA County Fire contract); and an estimated LA County Fire contract cost of about $14.58 million and an ambulance contract (FALK) estimate near $1.89 million. Combined fire-and-ambulance costs were shown at about $18.5 million.

Council discussion focused on revenue conservatism, contingency approaches and public-safety staffing. Finance staff said revenue assumptions lean conservative and that HDL (a sales tax consultant) data were used for sales and use tax forecasts. Council asked about contingencies if revenue falls short; staff said options include deferring parts of the capital program, negotiating contract terms where possible and avoiding use of reserves except for true emergencies.

Police staffing and recruitment were central in council action on the budget. Police Chief Adam Foster explained the department had been short-staffed in the prior year but reported recent hires and active recruitments. Councilmember Lampkin (seconded on the motion) moved to increase the police lateral signing bonus from $10,000 to $20,000; that change was added to the budget and approved unanimously. Council also asked the chief and city manager to return with an analysis on adding one additional police officer once current vacancies are filled; staff agreed to return with that assessment and potential budget implications.

Other department budgets were presented in detail during the same meeting: community services (including the Children's Museum and child development programs), community and economic development (planning and building activity), public works (65 CIP projects proposed over several years, with about $51 million in CIP work noted in current and proposed activity), administration and IT, human resources, and LA County Fire and ambulance contract reports. Presenters highlighted the large share of general fund spending on public safety (police, fire, ambulance) at roughly 68% of general fund expenditures.

The council's votes were unanimous on the consent calendar and on the budget-related motions. Staff and council emphasized monitoring grant-funded programs (which could be at risk if federal or state grants are reduced), and the city manager noted about $12 million in reserves earmarked for potential pension-related liabilities.

Looking ahead, staff said they will return with fee studies and any recommended midyear adjustments if external conditions (grants, CalPERS returns, contract true-ups) change. The council set direction on recruitment incentives and requested a follow-up staffing assessment once vacancies are reduced.

Votes at a glance: the council unanimously (voice vote) approved receiving and filing the FY2025'026 proposed municipal budget; unanimously approved increasing the police lateral signing bonus from $10,000 to $20,000 and directed staff to return with analysis on an additional officer once vacancies are filled; and carried the consent calendar and other budget items unanimously.

The council will adopt the final budget by subsequent action consistent with the council's budget calendar and any fee adjustments effective July 1 where permitted by law.