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CC - ACTION ITEM: (1) Consideration of a Request from Culver City Unified School District for $2.5 Million to $7.5 Million Per Year from the City of Culver City from Fiscal Year 2025-2026 through Fiscal Year 2027-2028; and (2) Provide Direction to the City Manager as Deemed Appropriate.
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Meeting Date: July 14, 2025
Contact Person/Dept.: Jesse Mays, Assistant City Manager
Phone Number: City Manager’s Office - (310) 253-6000
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Attachments: Yes [X] No []
Public Notification: (E-Mail) Meetings and Agendas - City Council (07/10/2025)
Department Approval: John Nachbar, City Manager (07/08/2025) _____________________________________________________________________
RECOMMENDATION
Staff recommends the City Council (1) consider a request from Culver City Unified School District for $2.5 Million to $7.5 million per year from the City of Culver City from Fiscal Year 2025-2026 through Fiscal Year 2027-2028; and (2) provide direction to the City Manager as deemed appropriate.
BACKGROUND
At the June 16, 2025 meeting of the Culver City Unified School District - City Council Liaison Subcommittee meeting, representatives from Culver City United School District (CCUSD) requested City funding to help fill its budget shortfall. CCUSD’s presentation from the meeting is attached (Attachment 1). The Subcommittee subsequently voted to put consideration of this issue on an upcoming City Council agenda.
CCUSD has presented two potential City funding scenarios:
• $7.5 million for 3 years, beginning in Fiscal Year 2025-2026
• $2.5 million for 3 years, beginning in Fiscal Year 2025-2026
Under both scenarios, CCUSD offered the City expanded public use of CCUSD facilities, including the maintenance and staffing necessary to open school campuses to the public during non-school hours, and additional flexibility for CCUSD to host City Parks, Recreation and Community Services programming. These would be documented in the City’s Memorandum of Understanding with CCUSD, which is currently in the process of being negotiated.
CCUSD described the impact of the City’s funding as giving it time to implement creative revenue generating solutions while maintaining a positive budget certification from the State, continuing benefits for employees, and retaining priority interventions. According to CCUSD, funding at the higher, $7.5 million level would allow CCUSD to avoid major budget cuts, maintain some essential educators for priority interventions, and avoid drawdown of redevelopment funding.
CCUSD cites the following as factors negatively influencing its budget: reduced state discretionary block grants, loss of Federal funding based on changes at the US Department of Education: Title IIA and Title III, increased operational costs, and lower revenue. In response, CCUSD has implemented austerity measures including staff layoffs in 2024 and 2025. They state that the continuation of benefits for employees is at risk. They are unable to meet their state mandated reserves level of at least 3%, which may result in County Office of Education (COE) intervention.
DISCUSSION
Current City Funding to CCUSD
The City’s Adopted Budget for Fiscal Year 2025-2026 includes the following funding for CCUSD:
• Refuse Services $337,500
• Sewer Charges $60,000
• CCUSD Crossing Guards $550,000
• Walk ‘n Rollers Contract $40,000
• Timing System for Plunge $45,000
TOTAL $1,032,500
The City has also allocated General Fund dollars to fund CIP Project PZ941 (Safe Routes to School). As part of the July 14 Agenda, Council will consider approving a professional services agreement to prepare a Tri-School Traffic Study in the amount of $285,200.
In addition, in Fiscal Year 2024-2025, the City’s Transportation Department subsidized travel for CCUSD students including providing student transportation to and from school and school field trips for a total estimated cost of $1,429,345,. However, most of this funding is not from the City’s General Fund, but rather, from Federal or other funding sources. This program is anticipated to continue in Fiscal Year 2025-2026.
City Funding for School Districts
School districts are funded by a variety of revenues sources:
• Property Taxes
o On average, school districts receive 35% of the property tax revenues collected within the district boundaries.
• State Aid
o Revenue provided by the state (the source of which is mainly state income taxes and some sales taxes) to make-up the difference between the amount per student resulting from the school district’s property tax income and the minimum amount per student as established by the state.
• Federal Revenue
o Funding restricted to special education, which is based on the number of special education students, and per-student funding for Title 1-5 students, in which case funding is restricted to those students.
• Other State Revenue
• Other Local Revenue
o Parcel taxes, leases and rentals, interest earnings on the school district’s general fund, foundation donations, and pass through of sales tax measures.
In April 2025, the City engaged Cathy Dominico from Ryland Strategic Business Consulting to provide an overview of school district funding and COE oversight for California school districts including mechanisms available to schools to augment funding when budgetary shortfalls are identified (Attachment 2).
According to Dominico, “It is uncommon for cities to provide substantial unrestricted operating funds to their local school districts.” The funding that City of Santa Monica provides to the Santa Monica-Malibu Unified School District (SMMUSD) has been held-up as an example for Culver City increasing its financial support. Approximately 20-25% of the SMMUSD’s unrestricted funding comes from the City of Santa Monica. However, Dominico states that “this contribution from a city is quite unique” and even though she works in over 150 school districts in the state, “I am not aware of another district in California that receives significant unrestricted funding from their local city.” Culver City’s current funding level is “more in line with other cities in California”.
Attachment 3 is General Fund Income Data from 2023-2024 for Unified School Districts within Los Angeles County, taken from the 2023-2024 LA County Public School Financial Report published by the COE. The data shows that overall, Unified School Districts in LA County received 6.70% of their annual revenue from “Other Local Revenue” (not 32-36%, as shown on page 4 of Attachment 1). CCUSD received 8.51% of its annual revenue from “Other Local Revenue,” which is greater than the overall total for Unified School Districts in LA County. Santa Monica-Malibu and San Marino Unified School Districts, at 35.78% and 30.77% respectively, are outliers.
The City of Santa Monica’s highly unusually annual contribution to the School District is largely a result of voter approved initiatives. The City of Santa Monica’s approximately $10 million annual contribution (which contributes to the high percentage of Other Local Revenue) is due to Santa Monica’s Measure YY, approved by voters in 2010. Measure YY was an advisory measure asking voters to approve earmarking to the school district one-half of a proposed half-cent sales tax increase (which appeared on the same 2010 ballot as Measure Y, a measure to impose a half-cent sales tax in the City of Santa Monica). In 2022, Santa Monica voters approved Measure GS, a “mansion tax,” increasing the documentary transfer tax rate on the transfers of real property valued at $8 million or more. The language of Measure GS specifically earmarks the first $10 million raised by the tax to the school district. In contrast, Culver City voters have not approved earmarking a portion of any City sales tax or documentary transfer tax to the school district. However, voters in both Santa Monica and Culver City have passed parcel tax measures to provide additional funding to local schools.
CCUSD’s Options for its Budget Shortfall
“School districts typically obtain augmented funding independently from their own taxpayers,” wrote Dominico. CCUSD could seek voter approval for a parcel tax, which is a tax charged per unit of property. In California, parcel taxes are considered special taxes and require a two-thirds (66.67%) vote for approval.
CCUSD voters have previously shown strong support for parcel tax measures benefiting CCUSD. In 2018, CCUSD voters approved Measure K by a vote of 75.38% to 24.62%, which levied a parcel tax for seven years at a rate of $189 per parcel per year. In 2024, CCUSD voters approved Measure O by a vote of 83.44% to 16.56%, which extended the $189 annual parcel tax for an additional eight years.
The Measure O parcel tax of $189 per parcel per year raises approximately $2.4 million annually for the school district. An additional parcel tax of $197 per parcel per year might generate an additional $2.5 million annually. A parcel tax of $591 per parcel per year might generate an additional $7.5 million annually.
There is recent precedent for California school district parcel taxes with similar or higher rates. In 2024 alone, voters approved the following parcel taxes in California:
School District $/Year for Parcel w/1,500 SF Structure
Alameda Unified School District $878
Berkeley Unified School District $810
Davis Joint Unified School District $768
Piedmont Unified School District $750
Nicasio School District $748
Lakeside Joint School District $647
Culver City - $7.5 Million (Hypothetical) $591
Culver City - $2.5 Million (Hypothetical) $197
Another option for revenue generation would be expanded leasing of CCUSD property. The 2024-2025 CCUSD Budget projects revenues from leases and rentals of $1.525 million.
Analysis of CCUSD’s Budget Shortfall
Dominico’s analysis of CCUSD’s budget situation in April 2025 was that “although CCUSD is facing some financial challenges, their financial picture is projected to improve.” She believes that COE intervention, which includes assignment of a fiscal advisor and development of a fiscal recovery plan, can help a district balance its budget and avoid a larger financial problem. In the event of COE involvement:
“It is likely that the COE will recommend a fiscal recovery plan that identifies sufficient budget cuts to bring the ending fund balance back up to the minimum 3% reserve requirement. If the fiscal recovery plan is not sufficient, the COE will likely assign a fiscal advisor to assist the District in identifying the improvements to the budget to achieve a 3% minimum reserve. Although the County Superintendent does have “stay” and “rescind” power for districts in financial distress, this power is typically used when a county superintendent believes the board’s action might jeopardize the school district’s financial stability. They do not typically intervene unless it is an extreme situation. It is not until a school district takes an emergency state loan that the school board would lose control of district operations.”
FISCAL ANALYSIS
In the Adopted Budget for Fiscal Year 2025-2026, General Fund expenditures exceed General Fund revenues by $22.1 million and require the use of the City’s General Fund reserve balances to make up the deficit. The City’s General Fund has no remaining unassigned balance for Fiscal Year 2025-2026. The City’s Contingency Reserve (meant for emergencies) is projected to be approximately $41.4 million at the end of Fiscal Year 2025-2026. This balance is only 21.6% of the General Fund Operating Budget, which is below the City’s target goal of 30%. Regardless of the outcome of the August 26, 2025 election for the 0.25% sales tax measure, the City will need to consider further budget reductions to address its structural deficit and allow full funding of the City’s Contingency Reserve.
Both CCUSD and the City are facing budget challenges, where tough choices will need to be made by both organizations. The funding commitment CCUSD is requesting would require the City to reduce the level of City services Should the City Council decide to provide ongoing funding to CCUSD, Council should direct staff which City programs and/or services should be reduced to fund this new, ongoing obligation. If the City Council desires to provide funding for CCUSD in Fiscal Year 2025-2026, a budget amendment requiring a four-fifths vote would be necessary.
ATTACHMENTS
1. 2025-07-14 ATT Liaison Meeting 6.16 CCUSD Presentation
2. 2025-07-14 ATT School District Funding Memo
3. 2025-07-14 ATT LA County Public Schools Financial Report Excerpt
MOTION(S)
That the City Council:
1. Consider the request from Culver City Unified School District for $2.5 Million to $7.5 million per year from the City of Culver City from Fiscal Year 2025-2026 through Fiscal Year 2027-2028; and
2. If approved, direct the City Manager to return to City Council with a budget amendment, including providing direction on the source of the funding and potential expenditure offsets.