South Gate faces $8–$9.4M shortfall; council weighs utility users tax to avoid deep cuts

South Gate — City staff told the South Gate City Council on Nov. 11 that the city faces a structural budget shortfall projected at roughly $8 million to $9.4 million for fiscal year 2026–27 unless it finds new revenue or makes steep cuts.

The report, given by Finance Director Louis and framed by City Manager Rob, described how one-time sources such as American Rescue Plan Act (ARPA) funds and reserve draws have masked a recurring gap. Louis said the city’s operating costs are rising faster than revenues and that the current adopted general fund is roughly $80 million; staff estimate revenues of about $70.9 million against $78 million in budgeted expenditures for FY25/26.

Why it matters: the general fund pays for core services — notably policing and parks — and staff warned that approximately 55.6% of the general fund goes to the police department and about 16.5% to parks and recreation. Without action, the council would need to consider cuts that could affect minimum staffing for patrols, dispatch coverage and dozens of community programs.

Staff laid out options for closing the gap: recalibrating the existing Street Lighting & Landscaping Maintenance District (currently subsidized by the general fund to the…