Costa Mesa projects slim surplus but council demands line‑by‑line answers on $8.4M personnel variance

Costa Mesa city staff told the City Council on April 28 that the city is on track to end fiscal year 2025–26 with a small operating surplus and reserves above the council’s $55 million policy, while councilmembers pushed staff for detailed explanations after an $8.4 million difference in salaries and benefits compared with the adopted budget.

City Manager Cecilia Gallardo Daley said the city “remains on steady financial footing and is projected to end the fiscal year in a positive operating position,” and she introduced a finance team that reviewed revenue and spending drivers. Mark Ku, the city’s budget manager, told the council the adopted all‑funds budget was $224.9 million, with about $186.9 million planned for the general fund.

Why it matters: Costa Mesa’s fiscal health depends heavily on sales tax — roughly 40% of general fund revenue — so swings in consumer spending or large, unanticipated expenditure growth can quickly affect the city’s ability to fund services. Council members flagged a roughly $8.4 million variance in salaries and benefits versus the adopted budget and sought itemized explanations and policy fixes for future transparency.

Staff overview and headline numbers Mark…