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La Verne staff warn of $3.6–$3.7 million gap as council reviews preliminary FY 2025–26 budget
Summary
City finance and public works staff presented a preliminary FY 2025–26 general fund budget and a $4.3 million CIP request, telling council the operating gap is roughly $3.6–$3.7 million and asking for direction on reserve use, service cuts, or revenue options.
La Verne finance staff on Monday presented a preliminary FY 2025–26 operating budget that projects roughly $48 million in general fund revenues and about $52 million in preliminary expenditures, leaving a structural gap staff described in the mid‑to‑high‑millions.
“58% of that is coming from taxes,” Finance Director Chris Christie Lopez said, summarizing the revenue mix for the general fund and noting that sales tax and property tax trends are both weighing on the outlook. Staff told the council taxes account for the majority of general‑fund receipts and that sales tax growth has slowed, reducing expected revenue compared with recent years.
The presentation highlighted personnel as the largest recurring cost — roughly $34.6 million in the current preliminary numbers — and public safety as the single largest departmental share. Staff said operations and utility costs are also rising: utility expense alone was estimated to increase about 26% year‑over‑year.
Public works staff presented the capital improvement program (CIP) and said the FY 2025–26 CIP request sums to about $4.3 million, of which staff estimated $200,000 would come from the general fund and the remainder from restricted measures and enterprise funds. Notable requests included a $125,000 chiller replacement for the public safety building and a facilities conditions assessment proposal.
Council members pressed staff for more detail on program cost‑benefit analyses and asked whether hiring new positions could reduce overtime and other operating costs. “I am not super keen on utilizing reserves because I do get concerned about falling into a pattern of using reserves,” said Council member Wendy Laauo, reflecting a common theme in the discussion: preserve long‑term reserve health while balancing immediate service expectations.
Staff outlined potential approaches to close the gap: (1) use one‑time reserves or interest earnings from the city’s OPEB/115 trust, (2) defer capital projects or cut noncritical service levels, or (3) seek revenue enhancements through economic development, fees, or grants. City Manager Ken Domer and finance staff said they would return with prioritized options and more granular cost/benefit data at upcoming meetings, including the second study session and the June 2 budget meeting.
No formal budget vote was taken Monday; staff asked the council for direction and confirmed they will return with a refined proposed budget ahead of the June adoption schedule.
