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CC - ACTION ITEM: (1) Presentation on the Fiscal Year 2025-2026 Mid-Year Budget Monitoring Report; (2) Receipt and Filing of the Fiscal Year 2025-2026 Mid-Year Budget Monitoring Report; (3) Notification to Public Inviting Comment and Input for the Upcoming Proposed Budget for Fiscal Year 2026-2027; (4) Approval of Proposed Blanket Purchase Order Amendments; (5) Approval of Personnel Position Allocation Amendments; (6) Adoption of a Resolution Adopting the Updated Classification and Salary Plan for City Employees, Effective February 9, 2026; (7) Adoption of a Resolution Adopting the Updated Executive Compensation Plan Effective February 9, 2026; and (8) FOUR-FIFTHS VOTE REQUIREMENT: Approval of Proposed Budget Amendments.
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Meeting Date: February 9, 2026
Contact Person/Dept: Lisa Soghor/Finance Department
Phone Number: (310) 253-5865
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Attachments: Yes [X] No []
Public Notification: (Email) Meetings and Agendas - City Council (02/05/2026); (Email) Ongoing Topics - Fiscal and Budget Issues (02/05/2026)
Department Approval: Lisa Soghor, Assistant City Manager (02/05/2026)
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RECOMMENDATION
Staff recommends the City Council (1) receive a presentation from staff on the Fiscal Year 2025-2026 Mid-Year Budget Monitoring Report; (2) receive and file the Fiscal Year 2025-2026 Mid-Year Budget Monitoring Report; (3) provide notification to the public inviting comment and input for the upcoming Proposed Budget for Fiscal Year 2026-2027; (4) approve proposed blanket purchase order amendments; (5) approve the personnel position allocation amendments; (6) adopt a Resolution adopting the updated employee salary schedules, effective February 9, 2026 and (7) approve a Resolution adopting the updated Executive Compensation Plan, effective February 9, 2026; and (8) approve related budget amendments (budget amendment requires a four-fifths vote).
BACKGROUND/DISCUSSION
Mid-Year Budget Monitoring Report for Fiscal Year 2025-2026
The attached Mid-Year Budget Monitoring Report (Attachment 1) presents the City Council with a snapshot of General Fund, Enterprise Funds and Internal Service Funds expenditures and revenues through the first half of Fiscal Year 2025-2026, which began on July 1, 2025. Special Revenue Funds are performing within expectations and are not a part of this report.
Notification Inviting Public Comment and Input for the Fiscal Year 2026-2027 Budget
In keeping with the City Council’s strategic goals to promote public engagement and ensure long-term financial sustainability, the City is committed to being open and transparent in all matters, especially those involving the collection and expenditure of public funds.
This year, under the City Manager’s leadership, the City will begin to incorporate priority-driven budget practices into the development of the Fiscal Year 2026-2027 budget. The public is being provided this first of several opportunities to comment and offer input on the City’s priorities and upcoming Fiscal Year 2026-2027 proposed budget. The City Manager’s Proposed Budget for Fiscal Year 2026-2027 is scheduled to be presented to the City Council on Monday, May 11, 2026.
Leading up to the presentation of the proposed budget in early May, there will be multiple opportunities for the public to provide input on City budget priorities. The City will hold several public meetings dedicated to budget-related topics starting in February. This year, the City Council will hold a Strategic Planning Retreat and Financial Summit on February 14, 2026, to discuss the City’s priorities, current financial position and revenue generating opportunities. Following the Council Retreat and Summit, the City Manager will hold a series of workshops to present the Council’s budget priorities and receive feedback from the community.
Additionally, this year, for the first-time, the City will hold a question and answer session for the community on the Proposed Budget tentatively scheduled for May 16. 2026 to provide an opportunity for members of the public to learn more about the proposed budget and ask questions in advance of the City Council’s review of the proposed budget on May 18-19, 2026. There will also be multiple opportunities for public comment when the City Council discusses the proposed budget in May and June.
The public is also invited to submit comments and suggestions regarding the budget and budget priorities to the City at the following e-mail address: Budget.Priorities@culvercity.org <mailto:Budget.Priorities@culvercity.org>.
Proposed Mid-Year 2025-2026 General Fund Budget Amendments
At the midpoint of the fiscal year, departments review their expenditures and staffing levels and make requests to amend them as necessary. Finance staff evaluates those requests and presents them to the City Manager.
After analyzing revenue trends, historical data and economic conditions, Finance staff recommends a net increase in General Fund Revenue totaling $6.63 million. This projected revenue increase is largely driven by Real Property Transfer Tax revenue, which is projected to increase by $3 million, the implementation of Measure CL, a quarter cent transaction and use tax approved by voters in August 2025, and an increase in revenue from Licenses and Permits. After the passage of Measure CL, staff was able to work with the California Department of Tax and Fee Administration to submit all the required agreements and other documentation in time for the tax to be implemented January 1, 2026. This new tax is anticipated to yield $2.39 million in Fiscal Year 2025-2026. These revenue increases combined with stronger revenues from Sales Tax, Utility Users’ Taxes and charges for services, will more than off-set other projected revenue declines and delays in other revenue sources. As part of the City’s efforts to enhance revenue in Fiscal Year 2025-2026, the City increased the number of Management Analysts reviewing and issuing red light camera citations from 2 to 3 in order to issue more citations and capture more fine revenue. Citations have increased as expected. However, due to the time associated with County court proceedings for traffic violations, the City will not receive the resulting increase in vehicle code fine revenue until Fiscal Year 2026-2027. Revenue from Fines and Forfeitures is reduced by $1 million in the current year to reflect this delay.
After review of Department requests, staff is proposing additional General Fund Expenditure adjustments totaling $2,343,761 of which $1,743,761 is estimated to be off-set with cost saving in the current year. The complete list of recommended Mid-Year adjustments are presented in Attachment 4. The adjustments include $95,000 for the previously approved Small Business Micro Grant Pilot Program, pro-rated salary adjustments to support the reorganization of the City Manager’s Office previously approved on January 26, 2026, $475,000 for the purchase of a new ambulance, moving the Nurse Practitioner from Housing and Human Services to Fire and adding a Firefighter/Paramedic in place of a Case Manager, $144,000 for two new pro-rated positions in Finance to support the new priority-driven budget process, $75,000 in part-time salaries for Parks, Recreation and Community Services, $125,000 to support labor negotiations and internal investigations including a limited-term Human Resources Associate, $75,000 for the Fire Tower generator, $51,500 for equipment maintenance, and $35,000 for costs associated with the City Council Strategic Planning Retreat and Financial Summit While most of the proposed General Fund expenditure adjustments are anticipated to be off-set with cost savings in the current fiscal year, the General Fund projections for Fiscal Year 2025-2026 show total estimated expenditures to be $208,921,954, an $600,000 increase from the Adopted Budget. This includes the proposed one-time $475,000 for the ambulance for the new Advanced Practitioner Unit, the $75,000 for the CCFD Fire Tower generator, and the on-going $50,000 for the parking meter battery replacement. The cost of the battery replacements will be off-set by a transfer from the Parking Authority Fund. The generator will be funded from the General Fund Facilities Planning Reserve. The purchase of the ambulance will require additional use of the General Fund.
Proposed General Fund Position Adjustments
The mid-year budget amendments include several general fund position adjustments to align staffing levels with the City’s strategic priorities and address critical needs. These adjustments are detailed in Attachment 3. They include reclassifications of existing positions, full-time, part-time, and limited-term, as well as the organizational changes approved on January 26, 2026.
The proposed position adjustments include three new full-time positions, one in the Fire Department and two in the Finance Department. As part of the Fiscal Year 2025-2026 Budget, the City approved three new positions in Housing and Human Services (HHS) to expand the Mobile Crisis Team. After further review, it is recommended that the Nurse Practitioner position be transferred from HHS to Fire to consolidate medical-related services and oversight. In order to expand treatment capacity as intended, an additional Firefighter position is recommended to partner with the Nurse Practitioner and provide paramedic support services. To off-set the ongoing cost of the new Firefighter position, it is recommended to replace the vacant Case Manager previously linked to the Nurse Practitioner and assigned to HHS. These position adjustments, along with the proposed ambulance, will optimize the intended service expansion. As the City seeks to embark on a new priority driven-budget process, address its structural deficit, develop and implement a more robust 5-year Capital Improvement Program and explore financing opportunities, additional capacity is needed in the Finance - Budget & Financial Operations Division. To meet the City’s current needs and ensure long-term financial stability, it is recommended to add one Senior Management Analyst - Budget and one Management Analyst - Budget. Due to the time associated with the City’s recruitment process, the impacts of these positions as well as the new positions in the City Manager’s Office and the other related salary and position adjustments approved on January 26, 2026, have been prorated in Fiscal Year 2025-2026.
In order to better align work responsibilities and further support the organizational structure and performance plan outlined in the January 26, 2026, staff report, two additional reclassifications of existing positions are recommended. The existing Communications & Public Information Manager is recommended to be reclassified as the Chief Communications Officer to be included in the Executive Compensation Group with an updated salary range to align with the City’s executive salaries. The remaining existing Assistant to the City Manager position is recommended to be reclassified as the Government and Legislative Affairs Coordinator in the City Clerk’s Division. The City’s Salary Schedule and Executive Compensation Plan have been updated to reflect the proposed changes for the Chief Communications Officer, Workforce Development Manager and the Government and Legislative Affairs Coordinator.
There are no position changes proposed for other funds.
Capital Improvement Project Closeouts & Adjustments
As part of the Mid-Year Budget process, staff is also proposing to close-out a number of Capital Improvement Program (CIP) projects that were completed under budget. Savings in the General Fund from these completed projects total $362,565. Staff recommends allocating this funding to the Lenawee Storm Drain Improvement Project. The net effect of all the proposed mid-year budget adjustments to Other Funds is detailed in Attachment 4.
FISCAL ANALYSIS
The Mid-Year Budget Monitoring Report provides detail on the General Fund revenues received and expenditures disbursed through December 31, 2026, as well as the City’s adjusted budget projections through the end of the Fiscal Year (to June 30, 2026). General Fund expenditures through December 31, 2026, are $109.78, or 53% of the current Revised Budget amount of $208.99 million.
The proposed General Fund mid-year budget adjustments result in an additional $600,000 in General Fund. If approved, the projected General Fund expenditures for Fiscal Year 2025-2026 will be $209.0 million.
General Fund operating revenues through December 31, 2026, are $55.18 million, or 31% of current Revised Budget projections. Based on actual receipts and market trends, the City is now projected to receive a total of $186.93 million in General Fund operating revenues, $6.63 million more than the current Revised Budget. Analysis of the current fiscal year indicates that Real Property Transfer Tax and the City’s new Transaction and Use Tax will yield an additional $5.39 million while the City’s other recurring General Fund revenues, specifically License and Permits, Sales Tax, and Utility User’s Tax, are expected to exceed the current Revised Budget. While some General Funds revenues particularly Fines & Forfeitures are expected to fall short in the current year, the result is a projected net General Fund increase of $6.63 million.
As projected in the Adopted Budget, General Fund operating expenditures continue to exceed anticipated operating revenues. As part of the Adopted Budget for Fiscal Year 2025-2026 the City intended to draw down approximately $22.1 million from the General Fund Balance to address its $15.03 million operating budget shortfall and fund one-time capital projects. General Fund reserves were also needed to fund expenditures approved in the Revised Budget for Fiscal Year 2024-2025, that due to project timing and implementation, did not get completed. These Council-approved expenditures were carried-forward to Fiscal Year 2025-2026 in the amount of $6.27 million. As of a result of this reliance on the General Fund Reserve, the City is projected to end Fiscal Year 2025-2026 having depleted its Unassigned Fund Balance and with a Contingency Reserve at approximately 21% of the General Fund Operating Budget below the City’s 30% goal.
If Council approves the budget amendments as recommended (requires a four-fifths vote), the City is projected to end Fiscal Year 2025-2026 with the General Fund Balance as shown in the table below.
All proposed Mid-Year Adjustments are provided in detail in the attached Fiscal Year 2025-2026 Mid-Year Budget Monitoring Report (Attachment 1) and Proposed Budget Amendments (Attachment 4).
ATTACHMENTS
1. 2026-02-09_ATT_1 - Fiscal Year 2025-2026 Mid-Year Budget Monitoring Report
2. 2026-02-09_ATT_2 - Proposed Blanket Purchase Order Amendments
3. 2026-02-09_ATT_3 - Proposed Personnel Position Allocation Amendments
4. 2026-02-09_ATT_4 - Proposed Budget Amendments
5. 2026-02-09_ATT_5 - Proposed Resolution Adopting Classification and Salary Plan for City Employees, effective February 9, 2026
6. 2026-02-09_ATT_6 - Proposed Resolution Adopting the updated Executive Compensation Plan, effective February 9, 2026
recommended action
MOTIONS
That the City Council:
1. Receive a Presentation on the Fiscal Year 2025-2026 Mid-Year Budget Monitoring Report; and
2. Receive and file the Fiscal Year 2025-2026 Mid-Year Report as provided in Attachment 1; and
3. Provide notification to public inviting comment and input for the upcoming Proposed Budget for Fiscal Year 2026-2027; and
4. Approve the Proposed Blanket Purchase Order Amendments as provided in Attachment 2; and.
5. Approve the Proposed Personnel Position Allocation Amendments as provided in Attachment 3;
6. Adopt Resolution adopting the Classification and Salary Plan for City Employees, effective February 9, 2026 in Attachment 5;
7. Adopt Resolution adopting the Executive Compensation Plan, effective February 6, 2026 in Attachment 6; and
8. Approve the Budget Amendments as proposed in Attachment 4 (budget amendment requires a four-fifths vote).