Calabasas holds lengthy budget study session as council splits on grants and reserve transfers

The Calabasas City Council devoted a significant portion of its June 10 meeting to a detailed study session on the fiscal year 2026-27 recommended budget, with staff describing a lean proposal that excludes incoming Measure K revenues and reallocates funds to reserves and deferred maintenance.

City Manager Kendon said the recommended budget was prepared on a status-quo-minus footing. "We will not start receiving Measure K revenues until Jan. 1, 2027," he told the council, and staff recommended a reduced-budget baseline with staffing reductions and other savings to balance operations.

Finance staff and the city's budget committee presented the new landscape-format budget book and the transition to Tyler Technologies' budget module. "This document gives more transparency," said Ron, illustrating per-department contract listings and travel/training line items.

Key items in the proposed general fund budget include:

- A $750,000 transfer into a deferred-maintenance reserve. - A $500,000 initial contribution to a Section 115 trust to prefund pension and retiree medical liabilities. - A $1.2 million transfer to support the community center fund (staff later noted that emerging revenue projections may reduce the transfer to about $1.12M). - A proposed $125,000 community grant line intended to replace ad-hoc annual gifts to civic groups.

Staff stressed that these reserve transfers, combined with a retirement-incentive program, are deliberate choices to increase financial resilience. "If we didn't begin this, we would be caught again with large deferred capital needs," Councilmember Peter, a budget committee member, said.

But the council debate highlighted differences over how to allocate community-support dollars. Several council members praised the idea of a competitive grant program, citing improved accountability. Others warned that making grants council-directed could politicize allocations and called for long-standing partners to remain outside a purely competitive pot. "The Rotary Club's Neighbors in Need program preserves a reserve and operates in a way that fills emergencies; I would not want to require them to apply for a grant every year," Councilmember Winrob said.

The community center transfer drew detailed questions. Councilmembers sought more granular revenue and usage data (rentals, program margins, and operating costs) before the June 24 budget adoption. Staff said they will return with additional detail and noted the community center currently recovers about 50% of operating costs — above the national benchmark the consultants cited.

Other technical drivers discussed included a projected insurance increase, an estimated 3.54% COLA for full-time employees, and rising sheriff-contract costs. Staff projected a citywide budget gap next year of about $1.2 million across all funds largely reflecting continued capital investments, but reminded council there exist about $3.8 million in excess reserves above the adopted 50% general-fund target.

Next steps: staff will return on June 24 for formal budget adoption, a salary/COLA resolution and fee updates. Council directed staff to bring back more detailed community center financials, a draft community grant guideline for fall review, and to develop the Measure K oversight committee and expenditure plan after the July recess.