Budget and Finance Advisory Committee

MINUTES – BUDGET AND FINANCE ADVISORY COMMITTEE Friday, February 27, 2026 ROOM 401, CITY HALL - 1:00 PM 200 NORTH SPRING STREET, LOS ANGELES, CA 90012 MEMBERS: RON S. GALPERIN, CHAIR GILDA HAAS DERRIC J. JOHNSON JOSEPH M. LUMARDA TOM DE SIMONE Armando Bencomo - Legislative Assistant - (213) 978-1080 (or Clerk.BudgetandFinanceCommittee@lacity.org) Submit written comment at LACouncilComment.com The audio for this meeting is broadcast live on the internet at https://clerk.lacity.gov/calendar. Additional information regarding Committee procedures provided at the end of this agenda. ITEM(S) (1) Call to Order and Roll Call Members Present: Ron S. Galperin, Gilda Haas, Derric J. Johnson, Joseph M. Lumarda, Tom De Simone (5); Absent: (0) Chairperson Ron S. Galperin called the meeting to order at 1:04 p.m. (2) Public Comment • Multiple Agenda Item Comment • General Public Comment The Committee provided an opportunity for Multiple Agenda Item and General Public Comments. (3) Approval of Minutes • The Committee will review and approve the Minutes of the February 6, 2026, Budget and Finance Advisory Committee meeting. Member Derric J. Johnson moved to approve the Minutes of the February 6, 2026 Committee Meeting, which was seconded by Member Gilda Haas – Ayes: Galperin, Haas, Johnson, Lumarda, De Simone (5); Nays: (0); Absent: (0) (4) Vice Chair Nomination • The Committee will nominate and vote to elect a Vice-Chair for the BFAC. Chairperson Ron S. Galperin nominated Member Derric J. Johnson to serve as the Vice Chair of the Committee, which was seconded by Member Joseph M. Lumarda. Member Derric J. Johnson was elected as the Vice Chair of the Committee by the following vote: Ayes: Galperin, Haas, Johnson, Lumarda, De Simone (5); Nays: (0) (5) Chair’s Office Update • Rebecca Rasmussen, Budget and Legislative Director, Council District 5, will introduce the final Committee appointee, establish the core responsibilities and expectations for all members on behalf of Councilwoman Katy Yaroslavsky, and deliver an update on the City’s budget calendar and primary financial objectives for the coming budget cycle. Rebecca Rasmussen, Budget and Legislative Director of Councilmember Katy Yaroslavsky’s Office, Council District 5, provided an overview of the roles and responsibilities of the Budget and Finance Advisory Committee (BFAC), roles and responsibilities of the Committee Chair and Vice Chair, key dates of the City’s annual budget calendar, primary financial objectives of the Budget and Finance Committee (BFC), and matters that fall within the purview of the BFC’s jurisdiction established by the City Council Standing Committees Resolution dated December 13, 2024, in Council file No. 24-2000. The BFAC’s roles over the next two budget cycles are to examine the City’s current budget models, identify steps that strengthen the City’s financial future, and provide recommendations that are data-driven and consider both fiscal responsibility and social equity. Each ad hoc subcommittee will cover the separate focus areas of financial management, economic development and asset management, and revenue efficiency and evaluation. The BFAC will develop recommendations to inform the BFC in considering improvements to City policies and processes, and in the review and deliberation of the Mayor’s Proposed Budget. These recommendations will be transitioned into a Motion that will be referred to the BFC for consideration, which may include directions and requests to City departments. The BFAC’s recommendations that pertain to social equity will be considered in the context of budgetary impacts or financial issues that fall within the purview of the BFC. Any complete and concise recommendations on performance-based budgeting, debt management, or liability reductions can be shared by the BFAC for consideration during the upcoming Fiscal Year 206-27 Budget deliberations. Other recommendations that may require changes by ordinance can be taken up throughout the year. The key dates of the annual budget cycle include July 1st as the start of each Fiscal Year. Every November, City departments are instructed to submit budget requests to the Mayor and City Administrative Officer (CAO) for the following Fiscal Year. From December through February, the CAO reviews all budget proposals to develop funding recommendations. The revenue projections for the next Fiscal Year are provided by City Controller and CAO in March, and the Mayor’s Office refines the budget proposals throughout March based on those revenue projections. The Mayor must release the Proposed Budget by April 20th of each year by City Charter mandate. After the Mayor releases the Proposed Budget, Budget Hearings are scheduled in late April and early May for the BFC’s consideration of the Mayor’s Proposed Budget, with input from the City departments regarding their respective budget proposals. The BFC’s recommendations are finalized and presented in a BFC report to the City Council around mid-May. In late May, the City Council will consider the BFC report and adopt the Annual Budget. A final Budget Resolution is subsequently adopted for the new Fiscal Year. The Committee and Ms. Rasmussen also discussed the oversight of departmental processes, revenue-generating ballot initiatives that were adopted by the City Council for placement on the June 2026 Primary Election ballot as well as for future ballots, recent efforts to refine and revise commercial signage policies, short-term rentals, consolidation of various City departments, refinement of development services, alternatives to traffic enforcement, potential franchise fees, intellectual property licensing, and parking enforcement reform. (6) Report Backs on Focus Area Progress • Committee members will report back on the status and progress of the potential focus areas discussed during the previous meeting. • Discussion will include updates on initial research and goals regarding economic development, financial management, and revenue sources. The Committee discussed the status and progress for the identified focus areas explored by the ad hoc subcommittees. One subcommittee is exploring opportunities in the focus area of new revenues, expenditures, efficiencies, and innovations. Potential opportunities to address escalating liability costs and settlement expenses include the privatization of liabilities, new insurance models, performance-based mechanisms that link funding allocations to performance reviews of all City departments, and establishing a baseline for setting standards of practice for revenue distribution in City departments. Technological tools and predictive analytics can also be explored to identify early-stage high litigation risk for the City before such liability risks become prevalent issues, as well as the potential implementation of central methods of collection such as a singular unified accounts receivable system for all liabilities and accounts to consistently monitor the movement of funds. This subcommittee will also evaluate external tools in other jurisdictions on a national scale, and determine whether there are any evidence-based approaches that can be implemented by the City of Los Angeles. Another ad hoc subcommittee is exploring issues in four major categories and policy areas, which include special fund reform, opportunities for optimization of the City’s treasury through higher risk investment management strategies, evaluating the adequacy and financial stability of the Reserve Fund and Budget Stabilization Fund, and maximizing the use of underutilized parcels of City-owned land due to fragmented authority, limited real estate finance expertise, and deferred maintenance. Regarding special fund reform, this subcommittee will explore the potential public benefits of special funds managed by the proprietary departments, the methods in which special funds reimburse the City’s General Fund for general overhead costs, potential consolidation of housing and homelessness special funds, and self-imposed requirements on utilization. This subcommittee will also evaluate the success and best practices of other cities for the implementation of efficiency measures and guardrails pertinent to the management and replenishment of reserve funds. (7) Discussion • Committee members will refine the BFAC work plan, goals, and focus areas for the year, as needed. The Committee discussed other potential focus areas that can be explored, such as how the City determines adequate staffing levels, evaluating the current business climate and impediments that impact revenue generation from a regulatory perspective, and evaluating short-term costs that can potentially achieve long-term efficiencies. Past proposals that have not been acted on over the years can be evaluated to determine how to overcome progress impediments. The Committee can also evaluate the limitations imposed by the Surplus Land Act that prioritizes real estate assets for specific uses as opposed to general uses, underutilized City-owned parcels, the designation of surplus property by City departments within their respective jurisdiction, and potential establishment of a municipal development authority as a professionalized asset management approach. The Committee may also evaluate the City’s cost of borrowing with regard to the rates for Tax and Revenue Anticipation Notes (TRAN) and the timing for repayment of certain debt obligations. (8) Next Steps and Future Agenda Items The Committee discussed several next steps, which include inviting subject matter experts to present on their respective areas of expertise, finalizing subcommittee reports and research material pertinent to the identified focus areas with the assistance of the Fellows of the University of California Los Angeles (UCLA) Luskin School of Public Affairs (UCLA Fellows), and exploring opportunities for immediate savings and/or revenues. The CAO's Office may be invited to discuss fiscal matters, including the Reserve Fund and Budget Stabilization Fund, the elements of performance-based budgeting for certain functions or certain City departments, and how evaluation and funding align with particular point of view in determining allocations. The Controller's Office may be invited to discuss financial management matters, including potential consolidation of special funds, sunsetting of obsolete funds, and General Fund reimbursements. The Office of Finance and its investment advisors may be invited to discuss the City's treasury policies and current investment policies, how the core portfolio, reserve portfolio, extended reserve portfolio, and general pool with different weighted maturities are being invested; the investment rates of return with consideration to current interest rates and value of bonds, and the breakdown of liquidity needs for the portfolio. The investment managers of the City's pension funds, which include the Los Angeles City Employees' Retirement System, Los Angeles Fire and Police Pensions, and Water and Power Employees'  Retirement System, may be invited to discuss their investment strategies as they pertain to risk and reward. The General Services Department may be invited to discuss real estate policies and asset management. The Committee also requested to invite representatives of the Neighborhood Council Budget Advocates to present highlights of their annual White Paper relative to the City’s budget. The UCLA Fellows will present their preliminary research on performance-based budgeting used in other cities at a future Committee Meeting. The Committee requested research from the UCLA Fellows on Reserve Fund benchmarks used by other large cities, to determine whether the City of Los Angeles should use an alternative calculation as a benchmark for the Reserve Fund. A Closed Session may be scheduled for a future Committee meeting so that the City Attorney can provide guidance on the parameters of Ralph M. Brown Act compliance relevant to communications among the Committee Members and ad hoc subcommittees. (9) Calendar Review • Committee members will discuss and set the calendar for the next few months. The Committee confirmed that the BFAC Meeting of March 6, 2026 will be cancelled. The next BFAC Meeting is scheduled on Friday, April 3, 2026 at 1:00 p.m. in City Hall. (10) Adjournment The Committee Meeting was adjourned at 2:59 p.m. with the following Members present: Ron S. Galperin, Derric J. Johnson, Joseph M. Lumarda, Tom De Simone (4); Absent: Gilda Haas (1) If you challenge this Committee's action(s) in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Clerk at or prior to, the public hearing. Any written correspondence delivered to the City Clerk before the City Council's final action on a matter will become a part of the administrative record. Materials relative to items on this agenda can be obtained from the Office of the City Clerk's Council File Management System, at lacouncilfile.com by entering the Council File number listed immediately following the item number (e.g., 00-0000). Telecommunication Relay Services Telephone communication is one of the most important forms of communication in society today. Due to advancements in technology, telephone devices have evolved with new services and capabilities. Individuals who are deaf and hard of hearing, and individuals with a speech disability are following these trends and are rapidly migrating to more advanced telecommunications methods, both for peer-to-peer and third-party telecommunications relay service (TRS) communications. Telecommunications Relay Service is a telephone service that allows persons with hearing or speech disabilities to place and receive telephone calls. TRS is available in all 50 states, the District of Columbia, Puerto Rico and the U.S. territories for local and/or long distance calls. TRS providers - generally telephone companies - are compensated for the costs of providing TRS from either a state or a federal fund. There is no cost to the TRS user. What forms of TRS are available?There are several forms of TRS, depending on the particular needs of the user and the equipment available: TRS includes: Text to Voice TIY-Based TRS; Speech-to-Speech Relay Service; Shared Non-English Language Relay Service; Captioned Telephone Relay Service; Internet Protocol Relay Service; and Video Relay Service. Please visit this site for detail descriptions, https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. Don't hang up! Some people hang up on TRS calls because they think the CA is a telemarketer. If you hear, "Hello. This is the relay service .. . " when you pick up the phone, please don't hang up! You are about to talk, through a TRS provider, to a person who is deaf, hard-of-hearing, or has a speech disability. For more information about FCC programs to promote access to telecommunications services for people with disabilities, visit theFCC's Disability Rights Office website.