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La Verne council adopts FY 2025–26 budget as leaders warn of mounting pension costs
Summary
The La Verne City Council approved a proposed FY 2025–26 operating budget that relies on one‑time resources and fund re‑allocations to close a remaining shortfall, while staff and council members warned the city faces rising CalPERS pension liabilities that will add roughly $1.75 million next year if markets don’t improve.
La Verne’s City Council approved the FY 2025–26 operating budget Monday after a lengthy presentation from Finance Director Christie Lopez and extensive council discussion about long‑term fiscal risks.
Lopez said the proposed general fund budget lists revenues and expenditures at $49.9 million and relies on targeted reductions, fund realignments and one‑time interest surplus to balance a remaining gap. "This proposed budget is operationally balanced," Lopez said, adding that staff had closed the original projected shortfall through one‑time measures and reallocations.
The presentation laid out citywide figures as well: roughly $96.2 million in revenues across all funds and $99.2 million in expenditures, reflecting planned use of reserves in some special funds and restricted money for capital projects. Lopez told council the city is emphasizing service reviews to determine what is "core versus nice to have" and noted that public safety (police and fire) makes up the largest share of general fund spending.
Council members expressed support for staff work while repeatedly raising the same concern: the city’s unfunded actuarial liability with CalPERS. City Manager Cody Howling and finance staff described recent swings in the city’s UAL. "Two years ago the UAL was reduced by the pension obligation bond," Howling said, "but CalPERS returns and retroactive benefit changes have driven it back up." Lopez and staff reported the UAL increased significantly in recent years and projected an additional roughly $1.75 million cost next year under current actuarial assumptions.
Council Member Crosby urged near‑term accountability and quarterly updates: "Using one‑time money is not going to pay for it every year. We'll be bankrupt in a few years if this continues," he said. Council members also urged continued use of restricted funds where eligible and a citywide effort to identify efficiency and revenue options.
Lopez outlined several balancing actions embedded in the budget package, including reallocation of eligible restricted funds to eligible projects, delaying some personnel actions, and recommended use of interest surplus and a limited reserves contribution. The budget also includes the capital improvement appropriation request of about $4.7 million presented by Public Works earlier in the meeting.
After questions, public comment and follow‑up discussion, the council moved to approve the budget. The motion carried unanimously.
The council directed staff to continue quarterly reporting on budget performance, return with outreach plans tied to major revenue or assessment proposals, and prioritize a multi‑year plan to address the pension exposure.
Votes at a glance: The council approved the FY 2025–26 operating budget (motion by Lau, seconded by Cashel Figueta; approved 5–0).
