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CC - CONSENT ITEM: (1) Approval of a Donation Agreement with Culver City Unified School District (CCUSD) for a One-Time Donation of $2.5 Million with Established Conditions; and (2) FOUR-FIFTHS VOTE REQUIREMENT: Approval of a Related Budget Amendment to (A) Defund 17 Capital Improvements Projects (CIPs) Totaling $2,508,256 in General Fund Dollars; (B) Appropriate $1,082,902 from the Mobility Improvement Fund (Fund 437) to Fund Four Eligible CIPs Identified for Defunding; and (C) Appropriate $2.5 Million from the General Fund for Donation to CCUSD after the Donation Agreement is Executed.
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Meeting Date: September 8, 2025
Contact Person/Dept.: Lisa Soghor, Chief Financial Officer
Elizabeth Shavelson, Assistant Chief Financial Officer
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 (09/04/2025)
Department Approval: John Nachbar, City Manager (09/02/2025) _____________________________________________________________________
RECOMMENDATION
Staff recommends the City Council (1) approval of a donation agreement with Culver City Unified School District (CCUSD) for a one-time donation of $2.5 million with established conditions; and (2) approve a related budget amendment to (a) defund 17 Capital Improvements Projects (CIPs) totaling $2,508,256 in General Fund dollars; (b) appropriate $1,082,902 from the Mobility Improvement Fund (Fund 437) to fund four eligible CIPs identified for defunding; and (c) appropriate $2.5 million from the General Fund for donation to CCUSD after the donation agreement is executed (four-fifths vote requirement).
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 and state mandated reserve. The Subcommittee subsequently voted to put consideration of the issue on the City Council agenda.
At the July 14, 2025 City Council Meeting, the City Council considered the request from CCUSD and directed staff to return with: 1) a list of capital improvements projects that could be defunded in order to fund a potential one-time $2.5 million donation to CCUSD; and 2) a report on the impact of a potential one-time $2.5 million donation to CCUSD from the City's Contingency Reserve. A copy of the August 11, 2025 staff report including attachments is provided as Attachment 1.
On August 11, 2025, Council reviewed a list of capital improvements projects to consider defunding and/or reallocating funding in order to fund a potential one-time $2.5 million donation to CCUSD and received a report on the potential impact to the City's contingency reserve from a potential one-time $2.5 million contribution to CCUSD.
The Council voted unanimously to authorize the following capital improvements project funding adjustments in order to appropriate $2.5 million for a donation to CCUSD:
Defunding the following capital projects totaling $1,425,354 in General Fund (Fund 420) reductions:
Reallocating a total of $1,082,902 in capital project funding from General Fund (Fund 420) to the Mobility Improvement Fund (Fund 437) for the following projects:
In addition, the Council unanimously voted to require a donation agreement be executed between the City and CCUSD to include the following conditions for CCUSD:
* Place a parcel tax on the June 2026 ballot to raise ongoing funding needed to bridge CCUSD's budget gap.
* Explore potential market-rate housing developments on district property to meet Regional Housing Needs Allocation goals.
* Appoint a Culver City Finance Advisory Committee Member to be a member of CCUSD's Community Budget Advisory Committee.
* Allow City staff to attend CCUSD's meetings with Los Angeles County Office of Education.
* Regularly report on CCUSD finances to the CCUSD - City Council Liaison Subcommittee.
* Create a written plan to be presented to the City Council detailing an active process to retain students and market schools to residents.
DISCUSSION
If Council approves staff recommendations including the budget amendment explained above and detailed in Attachment 2, staff will work with CCUSD representatives on the donation agreement to include the conditions established by the City Council on August 11, 2025. Once the donation agreement is fully executed, the City Manager will authorize the donation of $2.5 million from the City's General Fund to CCUSD.
After the donation is complete, staff will continue to work with CCUSD representatives on the implementation of the donation agreement conditions.
If CCUSD places a parcel tax on the June 2026 ballot and Culver City voters approve it, the District could place the parcel tax on the tax roll for 2026-2027. CCUSD would need to submit the tax roll by August 10. While this is a relatively short turnaround, it could be accomplished with proper advanced planning. Submitting the tax roll by August 10 would allow CCUSD to receive tax revenue beginning with the December 2026 property tax distribution. In this scenario, CCUSD would receive full funding of the parcel tax in 2026-2027. The District would have opportunities to amend its 2026-2027 Budget to include the additional anticipated parcel tax revenue and present its Amended Budget to the County Office of Education.
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 21.5% of the General Fund Operating Budget, which is below the City's target goal of 30%. Per Policy Statement 5002, staff is planning to return to City Council by December 2025 with a plan to replenish the Contingency Reserve within five years. 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.
To fund the $2.5 million donation to CCUSD, the City will defund a total of $2,508,246 in General Fund (Fund 420) CIP projects. To minimize the impacts of the donation to the City's Capital Improvements Plan, the City will appropriate $1,082,902 from the new Mobility Improvement Fund (Fund 437) to fund eligible bicycle and pedestrian improvement projects approved in previous fiscal years with General Fund dollars. As of September 8, 2025, the estimated fund balance for Fund 437 is approximately $2 million. The budget amendment defunding the General Fund (Fund 420) CIPs, reallocating four CIPs to Fund 437, and appropriating $2.5 million from the General Fund for a donation to CCUSD requires a four-fifths vote.
ATTACHMENTS
1. 2025-09-08 ATT 1 August 11, 2025 Staff Report with attachments
2. 2025-09-08 ATT 2 Summary of One-Time CIP Funding Adjustments
MOTION(S)
That the City Council:
Staff recommends the City Council:
1. Approval of a donation agreement with Culver City Unified School District (CCUSD) for a one-time donation of $2.5 million with established conditions; and
2. Approve a related budget amendment to (a) defund 17 Capital Improvements Projects (CIPs) totaling $2,508,256 in General Fund dollars; (b) appropriate $1,082,902 from the Mobility Improvement Fund (Fund 437) to fund four eligible CIPs identified for defunding; and (c) appropriate $2.5 million from the General Fund for donation to CCUSD after the donation agreement is executed (four-fifths vote requirement); and
3. Authorize the City Attorney to review/prepare the necessary documents; and
4. Authorize the City Manager to execute such documents on behalf of the City.