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South Gate lays out $9.3 million in budget cuts and pushes decision to voters on a utility‑users tax
Summary
City staff presented a proposed FY 2026–27 budget that includes $9.3 million in cuts, service reductions and hiring freezes; council discussed placing a utility‑users tax (7%–9%) on the ballot to restore services but did not adopt a rate. Staff warned that, even with revenue, restoration of cut services could take months.
Mayor Joshua Barone and city staff presented the City of South Gate’s proposed fiscal‑year 2026–27 operating and capital budgets after several months of workshops and public briefings. City Manager Rob Houston told the council the city faces a multi‑year structural deficit and “we have a significant deviation from that process” of prior years, meaning staff must recommend deep cuts unless the city secures new revenue.
Administrative Services Director Louis (Luis) Frosto said the recommended package includes roughly $9.3 million in cumulative reductions over two years, but the city would still face a roughly $4.0 million structural gap without additional one‑time reserves or new revenue. “The budget is technically balanced using onetime funding, but it’s not structurally balanced,” Frosto said, describing reserve draws and a remaining shortfall that must be fixed over time.
The proposed cuts are broad and affect core services: public‑works maintenance and tree trimming, several parks and recreation programs (including shortening pool operations and darkening parks November–March), and municipal staffing reductions across departments. The police department would reduce patrol staffing and some community programs; Captain (police) warned response times likely will lengthen: “We averaged 4:35 this past year” but with cuts estimate emergency response times could rise to “somewhere over 6 minutes.”
Staff outlined three revenue scenarios if council elects a ballot measure: a 7% utility‑users tax (UUT) was the earlier staff proposal but updated forecasts show that 7% would only barely stabilize finances for a short period. Frosto and finance staff modeled 8% and 9% options that would provide progressively larger multi‑year relief; City Treasurer recommended the 9% scenario as the most realistic path to close the gap. Councilmembers debated the political viability of each rate and asked staff to return with a separate agenda item laying out the UUT options in more detail.
Residents at the public hearing pressed council about timelines and impacts. Staff said if a UUT measure were placed on the November ballot and adopted, new collections would begin months later and the city could begin phased restorations in January, but full rehiring and program restoration could take approximately six months or longer because seasonal and part‑time staff (lifeguards, crossing guards, concessions) may take other jobs.
Next steps: staff will refine the FY 2026–27 budget and return at the council’s next meetings for adoption; council also directed staff to bring back a standalone discussion on UUT rate options and public outreach before any final decision.
