title
CC - ACTION ITEM: (1) Discussion of a Declaration of Fiscal Emergency and a Proposed 0.25% Sales Tax Ballot Measure; (2) Discussion of a Potential Election Date; (3) Direction to the City Manager as Deemed Appropriate; (4) (If Desired) Direction to the City Clerk to Return to City Council with a Resolution Calling the Election and Related Actions for Consideration at a Future Meeting; and (5) (If Desired) Introduction of an Ordinance Authorizing the Conduct of an All-Mail Ballot Election.
body
Meeting Date: March 17, 2025
Contact Person/Dept.: Michael Bruckner/City Manager’s Office
Jeremy Bocchino/City Clerk’s Office
Lisa Soghor/Finance Department
Phone Number: (310) 253-6023
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Attachments: Yes [] No [X]
Public Notification: (E-Mail) Meetings and Agendas - City Council (03/12/2025)
Department Approval: John Nachbar, City Manager (03/12/2025) _____________________________________________________________________
RECOMMENDATION
Staff recommends that the City Council (1) discuss a declaration of fiscal emergency and the submission of a 0.25% sales tax ballot measure to Culver City voters at an upcoming election; (2) discuss a potential election date; (3) provide direction to the City Manager as deemed appropriate; (4) (if desired), direction to the City Clerk to return to City Council with a Resolution calling the election and other related actions for consideration at a future meeting; and (5) (if desired), introduction of an ordinance authorizing the conduct of an all-mail ballot election.
BACKGROUND
At the March 4, 2025, City Council Meeting, the City Council unanimously requested that staff agendize a discussion item regarding the placement of a 0.25% sales tax ballot measure at an upcoming election.
City Fiscal Status
On February 24, 2025, the City Council received the Fiscal Year 2024/2025 mid-year budget update. During the presentation the City Council was informed that based on current General Fund revenues and expenditures, the City’s 10-year forecast shows that the structural deficit first identified in the Fiscal Year 2023/2024 budget has widened. If prudent measures are not taken, General Fund reserves are projected to be reduced from $151.4 million in the current year to $10.4 million in Fiscal Year 2034/2035. To add further context to the current state of fiscal stress, the Fiscal Year 2024/2025 General Fund projected deficit is $35.5 million.
The structural imbalance in the City’s General Fund is on an unsustainable trajectory and without action the City will exhaust nearly all reserves within the 10-year forecast window.
Sales Tax
Under state law, the combined local sales tax (including all local agency sales taxes) in any given location is capped at 2.0%. In October 2023, the state legislature passed
AB1679, which provided for a special maximum rate in Los Angeles County of up to 2.50% if the additional 0.50% were adopted by the County to fund specific housing and homelessness measures.
On November 5, 2024, Los Angeles County voters approved Measure A, repealing the prior homelessness Measure H 0.25% sales tax, and replacing it with a new 0.50% sales tax in accordance with AB 1679. Measure A revenue is allocated to affordable housing, mental health and addiction treatment, and services to children, families, veterans, domestic violence survivors, seniors, and disabled people experiencing homelessness. The measure passed by a margin of 57.8% to 42.2% countywide.
Because Measure A no longer contributes to the local 2.0% cap, the 0.25% allocation previously captured by Measure H has been vacated and local agencies within Los Angeles County, including Culver City, have the option to present a 0.25% sales tax to the voters and redirect this portion of the total tax allowance for local purposes.
The current sales tax rate in Culver City is 10.50% (which includes state and local sales taxes). The proposed 0.25% sales tax measure would increase the rate to the new, post-AB 1679 statutory maximum of 10.75%. No additional sales tax increases would be allowed without further action from the state legislature.
Other Considerations
On March 6, 2025, the Los Angeles Times reported that Los Angeles County’s budget is “under enormous pressure” due to the loss of economic activity from recent wildfires as well as potential liabilities related to sexual abuse lawsuits filed against the County. Among other items, the article reported that the County’s employment vacancy rate is above 10.0%, and they are having difficulty attracting and retaining public safety employees, specifically citing the Los Angeles County Sheriff’s Department.
It should also be noted that there has been reporting that the Los Angeles County Metropolitan Transit Authority (“Metro”) is behind on several transportation projects planned for the 2028 Olympics, which has been attributed to funding gaps of hundreds of millions of dollars.
Other than Culver City, Los Angeles County and Metro are two agencies that could place a sales tax measure on the ballot and divert funding for their own services and uses. If two competing measures are placed on the same ballot-like a County measure and City measure for the same tax increment-the measure with highest total number of affirmative votes will prevail. Under this scenario, because a County sales tax measure will generate more than a million votes, even if Culver City residents approve a local measure by a higher margin, the County’s measure would take precedence, and the City will not be able to implement its approved tax measure.
Due to a very strong likelihood that another jurisdiction may seek a sales tax measure to solve their own fiscal crisis, without urgent action to keep local funds local, Culver City may not have the resources to sustain its current levels of service to the community.
DISCUSSION
California Constitution Article XIII C, section 2 (b) requires that any proposed general tax be approved by a majority of the voters at a regularly scheduled general municipal election for the City Council, “except in cases of emergency declared by a unanimous vote of the governing body.”
California state Elections Code and the California Constitution detail the requirements for cities considering placing a revenue measure on the ballot at an upcoming election. To place a tax measure on a ballot other than a regularly scheduled general municipal election, the California Constitution requires that a fiscal emergency be declared by a unanimous vote of the City Council. The last time the City Council declared a fiscal emergency was in 2018 which resulted in the passage of Measure CC.
In addition, City Charter Section 1505 states “The City Council may, by ordinance, authorize the conduct of elections wholly by mail, under which all votes shall be cast in the manner of absentee ballots.” A proposed ordinance authorizing the conduct of an all-mail ballot election is attached to this staff report for the City Council’s consideration.
Below is a summary of options available for the City Council to consider based on the elections calendar.
Option #1 - August 26, 2025, All-Mail Ballot (Fiscal Emergency Requirement: Yes)
California Elections Code § 1500 establishes the dates for an all-mail ballot as follows:
(a) The first Tuesday after the first Monday in May of each year.
(b) The last Tuesday in August of each year.
Based on this requirement, the first available election date is August 26, 2025, for an all-mail ballot election. California Elections Code requires cities to call for an election 88 days prior the election date which is May 28, 2025.
Under this scenario, every registered Culver City voter would receive a mail-in ballot prior to the election. The ballots can be dropped off at an official Los Angeles County ballot drop box, at Culver City Hall, the United States Post Office, or other designated locations. Ballots returned by mail must be postmarked by election day.
The City Clerk’s Office would be responsible for administering this election with the support of an elections consultant. The estimated cost of this option is $500,000.
Option #2 - November 4, 2025, Local Election (Fiscal Emergency Requirement: Yes)
Los Angeles County can conduct special elections for local agencies and municipalities. Because this is considered an off-cycle election, if the City contracts with the County to administer a ballot measure election, the City would be responsible for the full-cost on a fee for services basis.
The estimated cost of this option is $1,300,000.
Option #3 - June 2, 2026, Statewide Primary (Fiscal Emergency Requirement: Yes)
The next standard election is the June 2, 2026, statewide primary election and can be administered by Los Angeles County. Under this scenario, every registered Culver City voter would be able to submit their vote at a County vote center or by mail-in ballot, depending on their registered voting method.
The estimated cost of this option is $200,000.
Option #4 - November 3, 2026, General Election (Fiscal Emergency Requirement: No)
The next general municipal election in Culver City is scheduled for November 3, 2026. Like the June primary, Los Angeles County will administer this election, and voters will be able to cast their ballot at based on their preferred voting method.
The estimated cost of this is option is $200,000.
Considering the City’s current fiscal climate, the election calendar, costs, and the potential for a competing measure, staff recommends that the City Council declare a fiscal emergency and select Option #1.
FISCAL ANALYSIS
There is no fiscal impact associated with the discussion of a placing a 0.25% cent sales tax measure on the ballot. Future impacts will be based on City Council direction related to election costs, which range from $200,000 to $1,300,000. Should the voters approve the proposed measure, an additional $5,600,000 in sales tax revenue is estimated annually.
ATTACHMENTS
Ordinance Authorizing the Conduct of an All Mail Ballot Election.
MOTIONS
That the City Council:
1. Provide direction on the declaration of a fiscal emergency pursuant to Article XIII C of the California Constitution (a unanimous vote is required for the declaration of fiscal emergency); and
2. Provide direction on the proposed 0.25% Sales Tax Ballot Measure; and
3. Provide direction on a preferred election date; and
4. (If desired), provide direction to the City Clerk to return to City Council with a Resolution calling the election and other related actions for consideration at a future meeting; and
5. (If desired), introduce an ordinance authorizing the conduct of an all-mail ballot election.