South Gate council hears $9.4M budget gap and debate over a 7% utility users tax; item continued to Jan. 27

City of South Gate officials told the council on Jan. 13 that the city faces a structural general-fund shortfall of roughly $9.4 million that must be resolved before the new fiscal year begins July 1.

City Manager Robert Houston said staff had developed two paths: find new revenue or cut services to balance the budget. "We are in a structural budget deficit...there is a projected gap between $8 and $9,400,000 this coming fiscal year," Administrative Services Director Louis Frosto told council. The city proposed a draft utility users tax (UUT) that would apply to utilities including electricity, natural gas, water, and telecom/video/internet. Staff presented a 7% draft rate and estimated that, at that level, the UUT could generate approximately $9 million annually.

Staff stressed that placing a UUT on the ballot would not itself levy a tax; council would ask voters whether to approve it. The city explained that the June 3, 2026 special election would…