CITY OF HAWAIIAN GARDENS
CITY COUNCIL
STAFF REPORT
Agenda Item #B4
DATE: October 14, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Ernesto Marquez, City Manager
BY: Linda Hollinsworth, Finance Director
RECOMMENDATION:
RECOMENDATION TO ADOPT RESOLUTION 032-2026 OF THE CITY COUNCIL OF
THE CITY OF HAWAIIAN GARDENS, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA APPROVING THE EXCHANGE OF FY 2026-2027 PROPOSITION A
FUNDS BETWEEN THE CITY OF HAWAIIAN GARDENS AND THE CITY OF LA HABRA
HEIGHTS, CALIFORNIA AND AUTHORIZING THE CITY MANAGER TO ENTER INTO
AN ASSIGNMENT AGREEMENT AND EXECUTE ALL OTHER NECESSARY
DOCUMENTS
SUMMARY
The City of Hawaiian Gardens receives Proposition A funds each fiscal year from the Los Angeles County Metropolitan Transportation Authority (Metro). Prop A funds are restricted for eligible public transit purposes. Restricted funding available to the City is insufficient to meet the City’s public transit costs. The City has agreed to exchange general funds with the City of La Habra Heights for Prop A funds at a negotiated rate of $0.75 of general funds per $1.00 of Prop A funds. Prop A funds will be used to operate the City’s municipal transit system.
DISCUSSION
The City has determined that the cost to support the City’s transportation needs currently exceeds the revenues received from the available restricted funding. Transfers from the General Fund are required to subsidize transportation-related expenses. A viable option to reduce the impact on the General Fund is to purchase Proposition A Transportation Funds at a discount from other cities in return for unrestricted General Fund dollars.
The City will receive approximately $355,000 in Prop A Local Return Transit Funds in FY 26-27 that can only be used for public transportation purposes. The budgeted Agenda Item #B4
October 14, 2026
expenditures FY 26-27 for the Prop A Fund will exceed the budgeted revenues.
The City of La Habra Heights has $80,000 of Prop A Funds for the FY 26-27 allotment. The City and La Habra Heights have agreed to exchange these Prop A funds for General Fund dollars at an agreed upon rate of $0.75 of General Fund dollars per $1.00 of Proposition A funds. This additional revenue for Prop A is included in the Citywide FY 26-27 Budget.
The City will enter into a fund exchange assignment agreement with La Habra Heights to effectuate the exchange. A total of $80,000 of Prop A funds from La Habra Heights allotment will be transferred to Hawaiian Gardens and the City will pay La Habra Heights $60,000 in general fund monies.
FISCAL IMPACT
The Exchange of Prop A Funds is budgeted for FY 2026-2027 with an expense of $60,000 from the General Fund and an increase of $80,000 Prop A Fund revenue.
SUGGESTED ACTION
Approve Recommendation.
ATTACHMENTS
A. Resolution 032-2026
B. Assignment Agreement with La Habra Heights