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West Hollywood presents balanced two‑year budget, flags $187.5M in unfunded capital needs
Summary
City staff presented a balanced proposed two‑year budget (FY27–28) and a five‑year capital plan that shows $99.7M active capital projects with roughly $187.5M unfunded over five years; staff warned that unassigned reserves are low and bond market conditions make new debt expensive.
City Manager Jackie Ro and interim finance director Onyx Jones opened a study session on the proposed two‑year budget and five‑year capital plan, telling the council the proposed general fund operating budgets are $170.6 million for FY27 and $177.7 million for FY28 while preserving key services. "We are presenting a proposed balanced budget for the next two years, fiscal 27 and fiscal year 28," Jackie Ro told the council.
Staff told council that revenue growth is slowing from post‑pandemic highs (staff cited roughly 1% year‑to‑date revenue growth for FY26) while operating costs — including wages, benefits and insurance — are increasing. Onyx Jones summarized the city99s starting general fund balance at roughly $206 million, noting much of that is committed or assigned: emergency contingency, insurance, capital carryovers and other reserves. "At the end of the year we tentatively show a potential deficit of about $5 million," Onyx Jones said, adding staff will have firmer figures after year‑end closing.
The proposed capital plan lists about $99.7 million in active capital projects and a five‑year project list that still leaves about $187.5 million unfunded. Staff emphasized prioritization criteria for FY27 projects: alignment with the strategic plan, availability of funding, and projects where design work advances construction readiness. Major projects noted in presentations include the City Playhouse design, Log Cabin renovation, Hart Park improvements, Melrose streetscape phases, and other park and facility investments.
Staff recommended a set of department budget requests be included and identified others that were scaled back or deferred (examples: certain program expansions in Community Services and Arts moved to FY28 or held pending grants). City staff also warned that in the current high interest‑rate environment issuing new debt is expensive; historically the city has used bond financing but refinancing is not currently advantageous and new bond issuance costs are higher.
Next steps: staff will return with adoption materials and more detailed project funding options on June 15, ahead of the July 1 start of the new fiscal year. Several council members asked staff to continue prioritizing capital maintenance and to pursue grants, public‑private partnership opportunities, and sponsorships for major events to relieve general fund pressures.
