Whittier Approved The 2026-27 Budget. Here Is What Changed And What To Watch
The General Fund is projecting a $3.9 million shortfall. The city is using reserves to cover it, and those reserves are shrinking.
The Whittier City Council voted Tuesday to approve the city's budget for the year that begins July 1. The total price tag across all city funds is $174.2 million. The city expects to bring in about $170 million.
Including the Whittier Utility Authority and the Whittier Housing Authority, which are budgeted separately, citywide revenues total $204.4 million against $216 million in expenditures.
The city is using savings to pay operating bills
The city's main checkbook is called the General Fund. It covers the things residents interact with most: police, parks, the library, street maintenance, code enforcement. This year, the General Fund is expected to bring in $114.5 million and spend $118.4 million.
To close that $3.9 million gap, the city is pulling from reserve accounts that were set aside for specific purposes:
- $2.4 million from a fund set aside to cover rising pension costs
- $2.1 million from a fund for homeless shelter and outreach services
- $166,000 from money tied to the city taking over Whittier Boulevard from the state
After those draws, the General Fund balance lands at zero. The city presented this as a balanced budget.
Where the money goes
More than half of every General Fund dollar goes to public safety. According to the city's presentation to the council Tuesday, police services account for 53 percent of General Fund spending: $44.8 million for the Whittier Police Department and $17.6 million for the Santa Fe Springs policing contract, for a combined $62.4 million.
The rest breaks down as follows: parks, recreation and community services at 15 percent; public works at 11 percent; general government at 12 percent; library at 5 percent; and community development at 4 percent.
Why the bills keep going up
Salaries and pensions are the biggest factor. The city's wage bill for the General Fund goes from $42.5 million to $46.3 million this year, an increase of about $3.8 million. That increase reflects new labor agreements and inflation, according to city budget documents, including a package of executive compensation increases approved by the outgoing council on March 24, 2026, three weeks before the April election.
Those raises include a 9 percent increase for all department directors effective this July, followed by 8 percent in 2027 and 8 percent in 2028, a roughly 27 percent increase over three years. The City Manager's salary is tied to those same raises and is projected to reach approximately $468,000 by July 2028.
On top of that, the city's payments into the state pension system (CalPERS) jump from $6.7 million to $8.1 million.
Pension costs have become one of the most stubborn line items in the budget. The city has been drawing from a special pension reserve to soften the impact. That reserve currently holds $9.3 million. Based on the city's own five-year projections, it is expected to hold about $945,000 by 2030.
Insurance costs have nearly doubled in four years. General liability costs, which cover the city against lawsuits and claims, have risen from $3 million in 2022-23 to $5.8 million this year. The city's five-year plan projects those costs rising again after 2026-27.
The city also carries $7.9 million in annual debt payments. Years ago, Whittier took out pension obligation bonds to manage its retirement costs. Paying off those bonds costs nearly $8 million a year, every year, regardless of what else is happening in the budget.
What the new council added
At budget sessions in May, the council directed staff to include an extra $260,000 in one-time spending:
- $200,000 for community investments, sponsorships and cultural programming. No recipients have been chosen. That will be decided at future council meetings.
- $30,000 for the Whittier Shakes Theatre Co.
- $20,000 for the Whittier Historical Society and Museum.
- $10,000 for the Whittier Area Chamber of Commerce.
A known gap in the city's financial forecast
Whittier has been providing police services to the City of Santa Fe Springs for more than 30 years. That contract ends in February 2028.
According to the city's presentation Tuesday, the Santa Fe Springs policing contract brings in $17.6 million annually, representing 15 percent of the General Fund's total revenue. It supports 39 police officer positions.
City staff acknowledged in the budget documents that the five-year financial forecast does not include the impact of losing that contract, because the financial analysis is still ongoing.
The contract also carries its own pension costs, budgeted at $2.9 million this year. What happens to those long-term obligations when the contract ends is part of the analysis the city says is still underway.
Even with that revenue still included in the numbers, the city's own projections show deficits growing each year, reaching roughly $5.5 million annually by the end of the decade.
Even with the Santa Fe Springs revenue still included, the city's own projections show the gap between what the General Fund spends and what it brings in growing every year, reaching roughly $9.4 million annually by 2028-29.
Those projections assume the city continues drawing about $4 million a year from its reserves to soften the shortfall. Even after those draws, the budget still does not balance, with deficits of roughly $5.5 million a year projected by the end of the decade.
Police staffing: a numbers shift worth watching
Whittier's police force shrank from 146 positions to 137 last year. This budget brings it back up to 144. What happens to the 39 positions currently dedicated to Santa Fe Springs when that contract ends in 2028 has not been addressed in the budget documents.
What else the council approved Tuesday
Historic preservation fees waived. Through June 2027, the city will not charge application fees for homeowners who want to voluntarily designate their property as a historic landmark. The waived fees range from $767 to nearly $4,850 per application. The goal is to make it easier for Whittier property owners to pursue historic protections. Consultant and environmental review costs are not covered by the waiver.
Out-of-state travel approved. The budget includes $54,001 for out-of-state conferences for city staff and council members. Three council members are scheduled to travel to Toronto, Providence (Rhode Island), and Las Vegas. The Toronto trip, budgeted at $9,000 for three council members, is partially offset by up to $4,500 in Prop A funds, which are county transit sales tax dollars.
The "we have $101 million" question
The city's General Fund balance and reserves are projected at $101 million as of July 1, 2027. Residents sometimes ask: if the city has that much, why is there a shortfall?
Most of that money is designated or restricted for specific purposes. According to the city's presentation, the breakdown is as follows: $58.6 million is the general fund balance representing roughly six months of operating expenses; $15.8 million is tied to the Caltrans relinquishment of Whittier Boulevard; $9.3 million is the PERS pension reserve; $7.8 million is the homeless shelter and outreach reserve; $5.9 million is an emergency contingency fund; and the remaining $3.6 million covers other earmarked reserves.
Interim Finance Director Tram Pham noted Tuesday that maintaining six months of operating reserves exceeds the two-month minimum recommended by the Government Finance Officers Association, the national organization that sets best practice standards for city budgets.
The accounts being drawn on to balance this year's budget, the PERS reserve and the homeless shelter reserve, are among the smaller designated pools. Both are projected to shrink significantly over the next four years under current spending trends.
Measure W: what your sales tax is paying for
Whittier residents approved Measure W, a local three-quarter cent sales tax, to fund specific community priorities. This year it generates $14 million. According to the city's presentation, that money is being spent as follows: $4 million on police services, $3.4 million on park maintenance, $2.4 million on community services, $1.3 million on patrol, $1.3 million on public works, $1.4 million on general city services, and $206,000 on additional homeless services.
What to watch
The budget takes effect July 1. Three things are worth tracking:
- How the $200,000 community investment fund is awarded, and what process the council uses to pick recipients.
- Whether city staff return with a formal analysis of the Santa Fe Springs contract loss before next year's budget cycle.
- Whether the pension and homeless shelter reserves are drawn down again next year. The city has described these as one-time draws. A repeat next year would raise questions about whether they have become a recurring part of how the city balances its budget.
The full budget will be available on the city's website and at the City Clerk's office at 13230 Penn Street.
Sources: City of Whittier FY 2026-27 Budget Adoption Presentation, June 9, 2026; City of Whittier Agenda Report, June 9, 2026; Resolution No. 2026-27; Resolution No. 2026-28; Resolution No. 2026-29; FY 2026-27 Unappropriated Fund Balance Summary; General Fund 5-Year Financial Plan; Gann Appropriations Limitation; Total Budgeted Positions FY 2022-23 through 2026-27.
