Irvine City Council Rejects Forensic Audit As Budget Deficit Looms

  • April 19, 2026, 5:26 pm America/Los_Angeles

In a tense Tuesday evening session on April 14, 2026, the Irvine City Council grappled with a looming fiscal crisis, the first of this magnitude in the city’s 54-year history. Tuesday’s meeting took place against a sobering backdrop, as recent city staff briefings revealed:

  • $6 million overspend in the past fiscal year.
  • $9 million shortfall in the coming year.
  • $37 million shortfall in the 2027-2028 cycle, with deficits expected to worsen in subsequent years.

Expenditures Outpacing Revenues

Councilmember James Mai began the discussion by stating, “The problem is straightforward. Expenditures have been growing faster than revenues. The briefing showed also full-time staffing has grown from 856 to 1,103 over the past five years, alongside increases in labor, contract, equipment, supplies, and healthcare costs, which result in an approximately 50% increase.”

Expenditures Contributing to the Deficit

While a thorough review of the budget and deficit-driving expenditures is underway, here are several key items highlighted in a staff presentation. City staff did not provide details or costs associated with each of the bulleted expenditures listed.

Council Offices

In May of 2021, the City Council voted to double their discretionary budgets from $80,000 a year to pay for part-time staff members to assist each Councilmember’s workload. The council also received an additional roughly $100,000 for their personal part time salaries, office supplies, city travel and trainings.

According to the Voice of OC, in 2021 the “funds were managed by the city manager’s office, and any request to spend the money on something besides its allocation required a vote of the full council. The council also managed a collective pot of council funds that went directly to utilities and funding for city staff. Under the new system, the entirety of the council’s funding [was] put into individual budgets, totalling almost $275,000 apiece. Roughly $82,000 of that money is the money already allocated. But the remaining $193,000 can be spent largely at each council member’s discretion.”

The total amount allocated to each Councilmember is now approximately $375,000 a year per Councilmember.

To fund the increase in the council’s budget in 2021, the city needed $475,000 a year from sponsorships. It is unclear if any sponsorships were approved outside of public meetings or were ever obtained. Now with seven City Councilmembers, this expense is now over $2.5 million a year in expenses asking residents wondering what benefit constituents have received as a result.

Read: Irvine City Council Doubles Personal Budgets Opening Questions on Funding and Accountability – Voice of OC

Library Communication & Engagement

Irvine continues to grapple with the fallout of withdrawing from the Orange County Public Library system in July of 2025. With the viability of the new Irvine Public Library (IPL) still in question, overhead, such as the $40,000 monthly lease for the University Park branch alone –represents a substantial drain on the General Fund that may be impossible to maintain long-term.

Read: Library System Update and Feasibility Report Offer Early Insights Into Possible Future of Irvine Public Library System – Irvine Watchdog 
Read: University Park Library: Why The Fuss? [Opinion]

Great Park Delivery

While the 2022 Great Park Framework Plan promises a visionary expansion including a world-class outdoor permanent amphitheater and 300 acres of new amenities, its completion now faces significant fiscal headwinds. Recent 2026 projections reveal a deficit in the park’s Operating Fund, estimated at $7.5 million for the current fiscal year and growing. Because City Resolution 06-71 prohibits using General Fund revenue for the park, the feasibility of these next-phase projects hinges entirely on the city’s ability to generate new revenue through sponsorships and user fees.

See: Great Park Framework Plan Website
Read: Great Park Faces $7.5 Million Budget Deficit – Irvine Watchdog

Health & Wellness

Mayor Larry Agran made “Health and Wellness” a central pillar of his 2024–2026 mayoral platform. However, the programs which fall under this category and the associated costs have not been made public. 

Oliver Chi Era Resulted in Staffing Surges

City staffing levels climbed significantly between 2021 and 2022 under former City Manager Oliver Chi. However, prior to this hiring surge, the city experienced a notable ‘mass exodus’ of over 60 employees who departed with six-month severance packages. The total fiscal impact of these payouts has never been formally disclosed to the public.

According to City Hall sources, six-month severance offers were allegedly intended to facilitate a strategic turnover of specific personnel. However, the incentives inadvertently triggered a larger wave of departures than anticipated. This allowed for the rapid appointment of several of Chi’s former colleagues from Huntington Beach, to key executive roles, often bypassing internal candidates with deep institutional knowledge of Irvine.

Notable appointments made by Chi in 2023 — all former colleagues of Chi’s in Huntington Beach — include:

  • Sean Crumby: Current Irvine City Manager. Formerly the Public Works Director in Huntington Beach, Crumby was initially brought on in 2023 to lead Irvine’s newly formed Project Delivery and Sustainability Department.

  • Chris Slama: Appointed in March 2023 as Director of Community Services. Slama previously served as the Director of Community and Library Services in Huntington Beach.

  • Dahle Bulosan: Hired in January 2023 as Director of Administrative Services. Bulosan previously served as the Chief Financial Officer for the City of Huntington Beach.

Read: Surf City Bleeds Executive Staff Under New City Council Leadership – Voice of OC

Surge in Personnel & Staffing

Based on the city’s personnel & staffing table below, the growth in full-time staffing during Oliver Chi’s tenure was unprecedented in both scale and velocity. While previous City Managers Sean Joyce and John Russo maintained relatively steady growth—averaging an increase of approximately 13 positions per year between 2015 and 2021, the trend shifted dramatically following Chi’s arrival in late 2021.

Under Chi’s his leadership, the city transitioned from 856 Full-Time Equivalents (FTE) to a peak of 1,103, representing a 28% increase in just four years. This surge, which added nearly 250 new positions to the city payroll, stands in stark contrast to the historical baseline, marking the most rapid expansion of the municipal workforce in Irvine’s recent history.

Irvine City Manager History

  • William “Bill” Woollett Jr. (1972–1989): The first city manager and first full-time employee, instrumental in establishing the city’s infrastructure and police department. The William Woollett Jr. Aquatic Center is named in his honor.
  • Paul Brady (1990–1999): Led the city through a period of growth and development.
  • Allison Hart (1999–2005): Served as the first female City Manager for Irvine.
  • Sean Joyce (2005–2018): Managed the city for over a decade.
  • John Russo (2018–2020): Served during the beginning of the pandemic, announcing his retirement in 2020.
  • Oliver Chi (2021–2025): Currently serving as City Manager for Santa Monica.

Agran’s Proposed Solutions

Amid a widening budget gap, Mayor Larry Agran explored new tax measures, including a plan to poll Irvine residents about these taxes at a cost of $50,000. These efforts began without initial City Council consultation, drawing sharp criticism from Councilmember Kathleen Treseder and James Mai, who questioned the appropriateness of using taxpayer funds for tax-increase research. Among the revenue-generating options Agran was considering:

  • Business License fees – Changing it from a flat rate to charging per employee
  • Transfer tax
  • Transparent Occupancy Tax (TOT) – a local tax imposed on travelers staying 30 consecutive days or less in hotels, motels, or short-term rentals
  • California Utility Users Tax (UUT) is a local tax imposed by over 160 cities and some counties on the consumption of utilities like electricity, gas, water, sewer, and telecommunications.
  • Sales tax – Increasing Irvine’s sales tax

Mai’s Proposed Solutions

Councilmember Mai took a firm stance against tax increases — “I will never sign off on a citywide tax increase.” Mai also stated, “This is a moment that requires clear leadership and full transparency. We cannot ask the taxpayers for more until we have proven we are responsible stewards of what we already have.” 

Mai’s proposal focused on three areas:

  1. Immediate Hiring Freeze: Stopping the expansion of a city workforce whose salary costs have ballooned over 50% since 2021.
  2. Public Financial Disclosure: Mandating a comprehensive public presentation on the city’s long-term fiscal projections.
  3. Halt to Tax Surveys: Specifically, Mai moved to block any taxpayer-funded polling regarding a potential sales tax increase, calling such expenditures “inappropriate” without prior council consensus.

The Failed Amendment: Treseder’s Call for a Forensic Audit

The most contentious moment of the night arrived when Councilmember Kathleen Treseder introduced an amended motion. Arguing that the $6 million deficit was a symptom of deeper systemic issues rather than just inflationary pressure, Treseder called for a forensic audit.

“For some time now, I have been advocating for reduced spending,” Treseder said. “Now we don’t have a choice. We need to know exactly where every dollar is going and why our projections were so far off. A standard audit looks for errors; a forensic audit looks for answers.”

The motion for the forensic audit failed to gain the necessary support. Opponents of the amendment, including Mayor Larry Agran, characterized the move as premature and potentially alarmist. Agran maintained that the current budget gap is “very manageable,” representing only about 2% of the city’s annual budget, and argued that the city’s reserves remain robust enough to absorb the impact.

The amended motion failed on a 3-3 tie. Voting in favor were Councilmembers Treseder, Mai, and Go. Opposed were Mayor Agran and Councilmembers Martinez Franco and Liu, with Councilmember Carroll absent.

The “Great Park” Question

A question that did not get covered during the meeting was the status of the Great Park Fund. Long considered the crown jewel of Irvine’s future, the revelation that the fund is nearing a “cash-low” critical point has left the community wondering if any of the Great Park Framework plan will actually come to fruition.

Initiated during City Manager John Russo’s tenure, from 2019-2025, the city transferred approximately $27 million dollars from the Great Park Funds to the city’s General Fund. Questions regarding who approved the transfer of Great Park Funds into the General Fund is one the City Manager’s office has yet to be made clear.

Read: Great Park Faces $7.5 Million Budget Deficit – Irvine Watchdog
Read: Great Park Revenue Concerns – Voice of OC

A Shifting Fiscal Landscape

The Council’s debate highlighted a stark divide in how the city views its current trajectory. For years, Irvine was recognized as one of the most fiscally responsible cities in America. However, the rapid expansion of city employees and raises, City Council initiated projects, and the financial strain of completing the Great Park have created a financial challenge never seen before in Irvine.

While the forensic audit was rejected, the passage of the core elements of Mai’s proposal signals a shift toward austerity. The City Manager’s office is now expected to return to the Council with a detailed plan for the hiring freeze and a public report on the long-term viability of the Great Park fund, which staff warned is also nearing a “cash-low” critical point.

The Council adjourned with a promise to revisit the sales tax discussion, though the “no-survey” rule remains in effect for now, and a Special Meeting on this item is scheduled for May 5, 2026.