Hermosa Beach council adopts balanced FY 2025-26 budget, removes deputy city manager from plan

Hermosa Beach City Council adopted its fiscal year 2025-26 budget on June 24 after a lengthy presentation from finance staff and council discussion. The council approved the preliminary budget, authorization of listed contracts included in the staff report, and a $90,000 transfer from the general fund to the CIP fund; the council also directed that the budget remove the city’s vacant deputy city manager position.

The budget presentation emphasized a structurally balanced plan for FY 2025-26, continued investment in capital projects and maintaining a 20% general fund reserve. “It is a balanced budget,” Finance staff said during their presentation, noting $33.9 million in proposed CIP programming and that the city’s reserves would remain at about 20% of the general fund.

The staff outline identified risks in the out years: potential cost increases in county service contracts (notably for public safety and other county-provided services), projected deficits in FY 2026-27 and later, $160 million in unfunded CIP needs, ongoing pension liabilities tied to CalPERS performance, and rising insurance costs. Staff recommended reconvening the finance subcommittee, completing a fee study, and examining options such as dynamic parking pricing, fee adjustments, and reduced general-fund subsidies for special districts.

Councilmembers debated several supplemental requests included in the draft budget—examples included $50,000 for customized street-name signs at signalized intersections, IT server and monitor replacements, and equipment purchases—during a line-by-line review. Staff said many supplemental allocations are estimates and would be procured through competitive processes as needed.

Council action: Councilmember Francois moved a substitute motion (second: not specified in the record) to approve staff recommendations with the $90,000 change and to remove the deputy city manager position from the adopted budget. The substitute motion carried 3–2. The vote recorded: Mayor Seaman — yes; Councilmember Michael Keegan — yes; Councilmember Dean Francois — yes; Mayor Pro Tem DeToy — no; Councilmember Jackson — no.

The council also approved items administratively connected to the budget: staff-authorized contracts listed in the staff report (no additional budget appropriation beyond what was shown) and the set-aside for citywide beautification funding (unprogrammed at adoption). Staff reiterated that the city will continue mid‑year monitoring and may return with further revenue/expenditure recommendations as out-year gaps are monitored.

Ending: The adopted FY 2025-26 budget preserves the city’s current reserves target and funds a multi‑million dollar CIP program while directing staff and subcommittees to pursue revenue and policy options to address projected out‑year gaps.