Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
Council hears $1.67M deficit in preliminary FY 2026–27 budget and removes a $250K discretionary pension payment
Summary
Staff presented a preliminary general‑fund budget projecting a $1,670,000 deficit and relying on roughly $5.1 million in Measure E proceeds; after extended discussion council voted 3–2 to remove a proposed $250,000 discretionary CalPERS payment and asked staff to prioritize risk management items such as tree work, fire weed abatement, and IT needs.
Palos Verdes Estates — Council members and staff devoted the longest portion of the April 14 meeting to a line‑by‑line look at the preliminary FY 2026–27 general fund operating budget and a list of needs staff left out of the baseline.
Staff presented a preliminary deficit of about $1,670,000 for FY 2026–27 and said roughly 75% of the city’s general fund revenue comes from property taxes and measure transfers. Finance staff said the budget assumes $5.1 million in Measure E special‑tax revenue in 2026–27 and walked council through the timing for placing any replacement levy on the county roll in August.
Noah (finance staff) summarized the forecast: the city’s adjusted revenues and expenses leave a structural shortfall that staff recommends covering with identified reserves, spending cuts or new revenue options. The budget presentation called out tightened transfers to capital, estimated increases to pension UAL payments, and an insurance allocation increase driven by recent large liability claims.
Council members questioned several optimistic line items. Staff modeled a $237,000 decline in the city’s fire contract cost based on lower benefit estimates; multiple council members urged caution and said labor negotiations could reverse those numbers. Staff also flagged a significant insurance program allocation increase driven by a recent rise in tree‑related claims and a change in the pool’s look‑back methodology.
On discretionary items not included in the baseline, staff listed options ranging from additional fire/weed abatement ($367,000 for expanded acreage options discussed previously and an $185,000 estimate given by a contractor to eliminate herbicide use) to plans/specs for Malaga Cove water intrusion ($1,000,000 estimated for engineering) and $250,000 as an on‑ramp for enterprise resource planning software.
After extended debate where members weighed adding a $250,000 discretionary payment toward the city’s CalPERS unfunded actuarial liability (UAL) versus preserving general‑fund flexibility for higher‑priority risk items, the council recorded a 3–2 result opposing adding that $250,000 to this year’s budget; staff said the $250,000 would be removed from the proposal.
Council members asked staff to return with refined options for tree management, fire‑safety weed abatement and a clearer presentation of midyear contingencies; staff said they would present CIP details at a special April 20 workshop and bring back a revised proposed budget in late May. No final budget adoption occurred at the April 14 meeting.
Quotes: Council discussion included a staff characterization of the deficit: "it's 1,670,000" (Noah). On the pension funding motion, the mayor summarized the outcome: "3 to 2 against on the CalPERS payment. So that comes out in this year's budget."
