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Guadalupe council adopts budget with $3.6 million deficit; layoffs and Bridal Theater costs fuel debate
Summary
The Guadalupe City Council on July 14 adopted a fiscal year 2026–27 budget projecting a $3.6 million general‑fund deficit driven largely by $2.1 million in Bridal (Royal) Theater soft costs; the council approved proposed staff reductions after extended public and union comment.
The Guadalupe City Council on July 14 adopted Resolution No. 2026‑42 approving the city’s fiscal year 2026–27 budget, which staff said includes an unaudited $3,600,000 general‑fund deficit driven in part by increased soft costs for the Bridal (Royal) Theater.
Finance Director Eli Martinez told the council the budget reflects revenue of about $6.1 million and a structural shortfall that requires immediate action. "As you know, you've had a couple cuts ... today you're gonna be looking at the final budget," Martinez said, summarizing tables showing a $3.6 million deficit and a recent $2.1 million increase tied to Royal Theater soft costs.
Council members and staff described a multiyear plan that includes seven proposed layoffs and service reductions to stabilize cash. City Administrator David Trujillo and other staff warned that without cuts the city risks running out of cash and being unable to deliver core services. "If we run out of cash, then nobody gets paid," Trujillo said during the discussion.
The Bridal Theater project dominated much of the debate. Staff said the theater has incurred roughly $2.3 million to date and that an additional $2.1 million in soft costs had been identified, increasing the city's fiscal exposure. Staff described soft costs as nonconstruction expenses such as design changes and utility work. "Those costs are not as cheap as you would think," a staff member said, noting delays and vendor lead times that could push costs higher.
Labor representatives and employees urged alternatives to layoffs. Leo De Casaus, a union representative for SEIU Local 620, asked the council to exhaust other options before cutting permanent positions and warned of service impacts. Finance clerk Andrea Maldonado described the personal consequences of potential job loss.
After lengthy discussion and public comment, Council member Costa Junior voted No on the budget; the remaining council members voted Aye, and the resolution passed. City staff said they will track event‑related and staff costs, continue seeking reimbursements and grants, and report back on options to preserve services where possible.
The council recorded the vote and directed staff to proceed with implementation steps consistent with the adopted budget. Any layoffs or personnel actions will follow applicable labor rules and notification requirements.
