Budget commission flags $4.3M CalPERS bill as biggest pressure on Redondo Beachbudget; urges council to limit reserve draw

The Redondo Beach Budget and Finance Commission reviewed the City Managerproposed fiscal 2025-26 budget and five-year capital improvement program at a June 12 meeting and voted to recommend the City Council limit transfers from the citypension reserve to cover an expected $4.3 million CalPERS unfunded accrued liability payment.

City Manager Mike presented the proposal and told the commission the city faces a major pressure point in 2025-26: “we have a $4,300,000 unfunded accrued liability payment that's hitting the 25-26 budget,” he said. The manager said staff proposes drawing about $3.5 million from an $8 million pension set-aside to smooth the current year while seeking structural fixes in subsequent budgets.

The commissionrecommended that council minimize the use of the pension reserve and requested additional information on homelessness spending and capital project performance before further reserve draws. The motion passed on a roll call vote with six commissioners voting yes and one commissioner absent.

Why this matters

Commissioners and staff said the CalPERS payment is the largest single cost pressure in the proposed budget and that drawing heavily from reserves will leave less flexibility if revenues weaken. The city manager described the proposal as a smoothing strategy that buys time while the city seeks ways to close the structural gap in future years.

Key numbers and program choices

- CalPERS unfunded accrued liability (UAL) payment for 2025-26: $4,300,000 (as stated by the City Manager). - Proposed transfer from pension reserve to cover part of UAL: $3,500,000 from an approximately $8,000,000 pension…