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CC - ACTION ITEM: (1) FOUR-FIFTHS VOTE REQUIREMENT: Approval of a Budget Amendment Related to the Addition of Net 17.0 FTE Positions for the Finance, Human Resources, and Public Works Departments in the Amount of $405,805 for FY26-27; (2) Adoption of a Resolution Adopting a Classification and Salary Plan for City Employees Regarding the Addition of the New Positions for Finance, Human Resources and Public Works Effective November 16, 2026; and (3) Adoption of a Resolution Approving the Salary Schedule for Non-Benefited Employees (NBNE) in Accordance with the State of California Minimum Wage Increase Effective December 28, 2026.
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Meeting Date: November 16, 2026
Contact Person/Dept: Chandini Gaur, Finance Department
Phone Number: (310) 253-5894
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [X] Attachments: Yes [X] No []
Commission Action Required: Yes [] No [X] Date:
Public Notification: (E-Mail) Meetings and Agendas - City Council (11/12/2026);
Department Approval: Erin Spragan, Chief Financial Officer (11/11/2026)
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RECOMMENDATION
Staff recommends the City Council (1) amend the FY26-27 adopted budget by approving a budget amendment increasing the number of positions or Full-Time Equivalents (FTE) by a total of 17.0: 14.0 for the Finance Department, 1.0 for the Human Resources Department and 2.0 for the Public Works Departments and increasing the expenditure budget by a total of $405,805 (requires a four-fifths vote); (2) adopt a Resolution adopting a Classification and Salary Plan for City Employees relating to the foregoing new positions, effective November 16, 2026; and (3) adopt a resolution approving the salary schedule for Non-Benefited Employees (NBNE) in accordance with the State of California Minimum Wage increase effective retroactive to December 28, 2026.
BACKGROUND
On April 13, 2026, the City’s Independent Auditor Lance, Soll, and Lunghard LLP (LSL) presented to Council the Audited FY23-24 and FY24-25 Annual Comprehensive Financial Report (ACFR) and LSL’s Communication Letters and Reports on Internal Control Over Financial Reporting.
Additionally, on April 13, 2026, City Council approved a Professional Services Agreement with LSL Consulting & Advisory Department in an Amount Not-To-Exceed $50,000 to assist with establishing best practices to begin to address some of the recommendations provided for in the Communications Letters and Report.
Staff also presented the Los Angeles Metropolitan Transportation Authority (Metro) report regarding the City’s use of its regional transportation funding including Proposition A Local Return, Proposition C Local Return, Measure R Local Return, Los Angeles County Measure M Local Return and Transportation Development Act Article 3 which also included findings.
The LSL’s Independent Auditor’s Report on Internal Control Over Financial Reporting and On Compliance and Other Matters Based on An Audit of Finance Statements Performed in Accordance with Government Auditing Standards included a Significant Deficiency related to the City’s Financial Close and Reporting and recommended increasing the number of staff in the Finance Department as part of the solution. City staff concur with the assessment and further recommend that the department should be reorganized to become more effective. The reorganization of the department with the additional staff is outlined below.
DISCUSSION
New Positions
This staff report is a follow up to the April 13, 2026 Council item to update the City Council on the progress of the City’s Finance Departmental activities related to the audit findings.
The 2025 Independent Audit identified a Significant Deficiency in the City’s Financial Close and Reporting process. The cause of the condition was identified as key staff shortages in the Accounting Division which has resulted in internal controls that are either lacking or not designed properly, and mitigating controls that are not sufficient non effective to identify misstatements due to error, prior to the closing of the books and records. In 2024, LSL also found a Significant Deficiency and Material Noncompliance in the City’s Timeliness of Financial Reporting. It also noted issues with the accuracy of the financial statements. A recommendation from LSL included not only developing processes and procedures but also increasing the number of staff in the Finance Department. Please see Attachment 1.
In the Management Response to the Independent Auditors Letter, The City committed to a Corrective Action Plan comprised of three components:
1. Resource Allocation and Capacity Building
a. Recruitment: The city will prioritize filling vacancies in key Accounting Division positions and consider adding additional staffing to eliminate the current bottleneck.
b. Cross-training: The City will implement a cross-training program for existing staff to ensure that critical closing tasks are not dependent on a single individual, providing redundancy and internal review capacity.
c. Interim Support: Management is securing qualified external consultants to provide surge capacity in the current fiscal year and through the next fiscal year-end close while permanent positions are filled and staff receives additional training.
2. Standardized Closing Schedule & Checklist
a. Formalized Calendar: The City will develop a comprehensive “Year-End Closing Manual” that outlines specific deadlines which will ensure timely reconciliations throughout the year and identify necessary steps to be taken beginning 30 days prior to fiscal year-end.
b. Process Improvement: The City will update its internal standard operating procedures to ensure the fiscal year-end close is completed within 60 days of fiscal year-end.
c. Management Certification: The Accounting Supervisor and/or Accounting Manager will review and sign off on deliverables, in accordance with the established calendar, which will then be reviewed by the Chief Financial Officer before the trial balance is released to auditors.
3. Monitoring and Accountability
a. Audit Readiness Milestone: The City will establish a deadline for all general ledger activities to ensure a stable trial balance is achieved before audit fieldwork begins.
b. Pre-Audit Preparation: The City will begin early preparation of document deliverables included on the PBC list at least a month before audit fieldwork begins.
c. Pre-Audit Review: A secondary review layer will be implemented to verify documentation status before year-end closing
The Finance Department is vigorously implementing the corrective actions. We have been actively recruiting for accounting vacancies, and have advertised for Accounting Supervisor, Accountant II, and Assistant CFO/Controller positions. We have added two temporary accountants to augment current staffing. The Finance Department has engaged LSL Consulting and Advisory services to develop Month-End Close procedures, and LSL has initiated work to supplement the Accounting staff’s work by becoming more “hands-on” in the year-end close process.
To continue the momentum of these efforts with the Corrective Action Plan, the Finance Department is recommending permanent staff augmentation and a reorganization of the Department to segregate duties and strengthen internal controls. The request is comprised of 14 new positions or Full-Time Equivalents (FTEs) in the Finance Department, 1 new FTE in Human Resources and 2 new FTE in Public Works.
Finance Department
The Finance Department would reorganize functions, create two new divisions, and add 14.0 net new FTE. The current and proposed organizational charts for the Finance Department are attached for illustration (Attachments 2 and 3). The new reorganization segregates the Budget and Treasury functions currently embedded in other duties of staff across the Department and creates a separate Budget Division, a separate Treasury Division, combines the Accounts Payable (AP) function under the Accounting Division, and enhances the current divisions of Accounting, Revenue, Payroll, and Purchasing for clear segregation of job functions.
The reorganization proposes the addition of the following positions:
a. Budget Manager (1)
b. Budget Management Analyst (Capital Analyst) (1)
c. Accounting Supervisor specializing in grants (1)
d. Accountant II- General Accounting and Grants Accounting (4)
e. Treasury and Debt Manager (1)
f. Treasury Analyst (2)
g. Purchasing Agent (2)
h. Buyer (1)
i. Payroll Accountant (1)
Budget Division
The Budget Manager will oversee budget preparation, budget to actual monitoring and budget reporting. The budget manager position is offset with a reclassification of the existing Finance Manager position. The Budget Management Analyst (Capital) will focus on the budget development and unique budget needs for capital projects.
Accounting Division
The addition of an Accounting Supervisor is specifically for grants accounting, compliance, and management. There will also be two Accountant IIs to focus only on grants accounting. These dedicated grants accountants and supervisor will ensure that the City will meet its grant compliance requirements and address the concerns from the US Department of Housing and Urban Development (HUD) based on the lack of timelines in reporting on federal grants.
Treasury
This is a new division comprised of a Treasury and Debt Manager and two Treasury Analysts to focus on cash flow, investments, debt management and banking functions. These functions are currently split amongst five positions within the Finance Department. Separating these duties institutes segregation of duties and enhances internal controls.
Purchasing
The Purchasing division adds three new positions and one new classification of Purchasing Agent to facilitate the efficient flow of federally compliant Request for Proposals (RFPs) and Bids for the City. Currently, the staff within departments are tasked with ensuring fair and competitive purchases are occurring based on their understanding of the local, state, and federal procurement regulations. These new positions would centralize the RFP function, utilize specific expertise in government procurement, and ensure the city is in compliance with recently updated federal guidance.
Payroll
The Payroll division would add one new position and classification of a Payroll Accountant to specifically reconcile internal payroll accounts, manage payroll tax filings, reconcile corrections from CalPERS, and respond to detailed requests from CalPERs in their minor and major audits. CalPERS has recently increased their scrutiny of reported pensionable pays, requiring detailed historical reports and research going back as far as ten years. Additionally, the implementation of GASB 101, Compensated Absences, has required the City to calculate and account for compensated absences in a manner that has not been done so before. This position would assist in the maintenance of correct reporting.
Revenue
The revenue division adds a dedicated Revenue Manager to focus on policy implementation, process creation, tax policy analysis, and enhanced tax collection methods.
Summarizing all of the divisions for a comprehensive costing, the below analysis shows the net impact of the staff requests by job function to the General Fund reserve.
The department is requesting a phased approach to hiring, with the most urgent accounting, budget, and treasury roles prioritized. Phase 1 positions would be onboarded by January 2027, while Phase 2 positions would be onboarded by the end of April 2027.
It should be noted that the vacant Finance Manager position is being reclassified for net cost savings. Finally, the Finance Department would request an additional one-time $50,000 in Operating and Maintenance (O&M) for costs related to computers, furniture, etc. for the additional positions.
Human Resources
There is an additional need for staff in the Human Resources Department related to the cost analysis of employee benefits, and risk management and liabilities.
In conjunction with the proposed Finance Department restructuring to strengthen auditing activities, financial reporting, fiscal accountability, and internal controls, staff recommends enhancing the Human Resources Department’s organizational structure through the addition of 1.0 FTE Senior Human Resources Management Analyst.
Human Resources and Finance share significant responsibilities involving Citywide personnel expenditures, position control, employee compensation and benefits, workers’ compensation, and risk management reserves. These functions require coordinated financial oversight, accurate reconciliations, consistent reporting, and clearly defined responsibilities to ensure accountability and compliance with established fiscal policies. In the many journal entries that were late, contributing to the lack of timeliness finding, was the calculation and analysis of compensated absences, payroll accruals, benefit payables, and OPEB liabilities journal entries. These journal entries are voluminous and take a join effort between Finance and Human Resources in consolidating and analyzing data. As such, the Human Resources Department needs staff augmentation to support the financial close activities of the Finance Department. The Human Resources Department recommends a position of Senior Human Resources Management Analyst as the appropriate classification.
Currently, the Risk Management division in the department contains an associate level employee. The Senior Human Resources Management Analyst classification differs in that it utilizes independent judgement in decision making and can supervise staff. This position is expected to be hired in Phase 1. The below shows the total cost of the position to the General Fund reserve.
Public Works
In the LA Metro Audit of Local Return dollars, the requisite audit finding was centered around lack of preapproval and of supervisory oversight of capital projects using Local return dollars. While the Transportation Department is the recipient of the monies, the Public Works Department administers a large part of the monies. Oversight of project cost and budget changes originate from Public Works management. Augmenting Public Works’ oversight of capital projects by adding a new managerial position will add the necessary layer for compliance with the LA Metro findings. Staff recommends adding a new Capital Improvement Project (CIP) Manager position to the Public Works department to strengthen the City's ability to effectively plan, coordinate, and deliver its Capital Improvement Program across the City. Establishing a dedicated CIP Manager position to the Public Works Department will strengthen the City’s ability to effectively plan, coordinate, and deliver its Capital Improvement Plan across the City. Establishing a dedicated CIP Manager position will address the growing complexity and demands associated with the City’s capital improvement projects while improving grant funding compliance and coordination among City departments, consultants, contractors, and other stakeholders.
Adjacently related, as part of the recent recruitment of the City’s new Public Works Director, the City elected to separate the duties and responsibilities of the City Engineer from those of the Public Works Director. This organizational restructuring is intended to establish clearly defined roles and responsibilities, distinguishing the technical engineering expertise and oversight provided by the City Engineer from the broader policy implementation, strategic planning, operational leadership, and program management responsibilities of the Public Works Director. As this delineation relates to the City’s audit findings, the separate City Engineer role allows for additional project approval and budgeting oversight when related to grant funding compliance and approvals.
These positions will be funded with department salary savings for FY26-27. These positions are expected to be hired in Phase 1. The request does not have any impact on the General Fund Contingency Reserve. The below shows the total cost for the department and to the General Fund.
Summary Position Request
To implement these new positions, staff is also recommending the City Council adopt a Resolution adopting the Classification and Salary Plan for City employees effective November 16, 2026 (Attachment 4).
State Minimum Wage Increase
California's minimum wage increased to $17.40 per hour effective January 1, 2027, and Culver City’s salary schedule has been updated to reflect this change effective December 28, 2026 to align with the City’s pay periods. Staff recommends the adoption of the Resolution to implement this change (Attachment 5).
FISCAL ANALYSIS
The total fully burdened cost of the positions for all Departments for a full fiscal year is $2,800,943. The fully burdened costs have the potential to offset through cost allocations to Grants, Capital Projects, and Enterprise Funds, based on the specific related work of the positions.
The FY2026-2027 total cost of 17.0 FTE positions for the remainder of the fiscal year, based on phasing, recruitment, and hiring timing is the remaining 2026-2027 Fiscal Year is $405,805. There is an additional one-time $50,000 for O&M costs to support the office set-up for the new positions. This cost captures current year salary savings from vacancies ($533,240), and the reclassification of Finance Manager position in the amount of ($199,035) and offsets to the Accountant II (Grants) position and the Treasury Analyst position in the amount of ($101,141) from contract savings.
A budget amendment in the amount of $405,805 is requested to fund the above position changes. If approved, funding will be appropriated from the General Fund Contingency Reserve. A budget amendment requires a four-fifths vote.
The fiscal impact of the State minimum wage increase to $17.40 per hour, is 2.95% which will be effective December 28, 2026, and equates to approximately $$44,350 for Fiscal Year 2026-2027. The new hourly rates apply to part-time positions, so the amount has been estimated on historic part-time hours. The Adopted Budget for Fiscal Year 2026-2027 includes sufficient funding to cover the increase.
ATTACHMENTS
1. 2026_11_16_ATT1_LSL's Independent Auditor's Report on Internal Control Over Financial Reporting
2. 2026_11_16_ATT2_Current Finance Org Chart
3. 2026_11_16_ATT3_Proposed Finance Org Chart
4. 2026_11_16_ATT4_Proposed Resolution Adopting Classification and Salary Plan for City Employees effective November 16, 2026
5. 2026_11_16_ATT 5 Proposed Resolution Adopting Classification and Salary Plan for NBNE Employees Effective December 28, 2026
MOTIONS
That the City Council:
recommended action
1. Approve the budget amendment appropriating $405,805 from the Geneal Fund Contingency reserve and appropriating the amount of $ 317,905 in the Finance Department and the amount of $ 87,900 in the Human Resources Department budgets to increase the number of positions or Full-Time Equivalents (FTE) by a total of 17.0: 14.0 for the Finance Department, 1.0 for the Human Resources Department and 2.0 for the Public Works Departments (requires a four-fifths vote); and
2. Adopt a Resolution approving the classification and salary plan for miscellaneous employees effective November 16, 2026 relating to the new positions in Finance, Human Resources, and Public Works; and
3. Adopt a resolution approving the salary schedule for non-benefited employees (NBNE) in accordance with the State of California Minimum Wage Increase effective December 28, 2026.
