Hermosa Beach council reviews balanced FY26 budget, flags rising costs for county fire, lifeguard and deferred capital projects

Hermosa Beach City Council members and staff reviewed the proposed fiscal year 2026 spending plan at a June 10 study session, with staff calling the draft “balanced” but warning of rising costs ahead and asking the council to reactivate a finance subcommittee to study long-term options.

Interim City Manager Steve said the document is “the city's spending plan for the next year” and described it as “a living document.” He told council, “I'll be asking that council reactivate its finance subcommittee to do a deep dive with the city treasurer and our staff into our financial trends and explore ways to both cut costs and increase revenues.”

Administrative Services Director Brandon Walker reviewed the budget’s major assumptions and highlights. He said property taxes make up nearly 40% of general fund revenue, transient-occupancy tax (hotel bed tax) about 9% and vehicle-in-lieu roughly 7%. Walker said the city is presenting “a balanced FY26 budget” and that staff plans $34 million in capital improvement program (CIP) spending including roughly $15 million in carryover projects and about $15 million in new projects.

Why it matters: staff told council the city has healthy reserves today — a 20% general-fund reserve that exceeds the Government Finance Officers…