City officials told the South Gate Parks and Recreation Commission on Dec. 11 that the city faces a structural budget shortfall in the coming fiscal year and outlined a range of options that include deep cuts or a voter-approved utility users tax.

"We are on borrowed time," City Manager Rob Houston said during a budget briefing that staff has also presented to council and the planning commission. Administrative Services Director Louis Frosto said the city's general fund budget is about $80 million and staff currently projects a revenue shortfall in the range of roughly $8 million to $9.4 million for the coming fiscal year.

Frosto noted general-fund spending is concentrated in a few areas: "The police department makes up about 56% of those expenditures," he said, with parks about 16.5% of discretionary spending. The brief emphasized that one-time federal ARPA funds that had helped close gaps previously are exhausted and the city must identify durable solutions.

Staff presented two broad options: reduce services to match revenues or generate new revenue. Among revenue ideas, staff highlighted a utility users tax (UUT). Rob Houston said a 7% UUT structured to apply to utilities such as water, sewer, electricity, cable and similar services could generate a little over $9 million in South Gate based on staff modeling.

Placing a UUT on a June ballot would require the council to declare a fiscal emergency (a unanimous vote) and then a four-fifths council vote to refer the measure to voters; a Jan. 13 council workshop will present a detailed cut plan and the ballot-timing decision. If the council does not move ahead, staff said aggressive cuts would be required beginning July 1.

During public comment, residents raised questions about outreach, the costs to run a ballot measure, and trust. Jimmy Ozeda, a Southgate resident, urged transparency and said many neighbors oppose a tax increase after noting a prior consultant survey effort and its reported $150,000 cost. "A lot of my neighbors said they don't support the utility users tax," Ozeda said, calling for the city to publish efficiency gains and the results of prior community research before seeking a new revenue measure.

No final council action occurred at the Parks Commission meeting; staff will brief the council in January on next steps and whether to pursue the UUT referendum timeline.