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City manager: tourism tax recovery remains soft; hiring restraint and fund balance likely used to balance budget
Summary
City Manager Mike Wasanski told the Budget & Finance Commission the city projects only a modest rebound in transient occupancy (tourism) tax and is planning to rely on vacancies and fund‑balance savings — rather than reserves if possible — to balance the 2026–27 budget, while noting capital and service pressures.
Mike Wasanski, Redondo Beach city manager, told the Budget & Finance Commission during a May listening session that the city expects a “soft” year for transient occupancy tax revenue and may need to rely on hiring restraints and creative savings to present a balanced 2026–27 budget.
Wasanski said transient occupancy tax (TOT) receipts should be higher than the current fiscal year but will likely fall short of pre‑pandemic peaks. “It’ll be better than last year,” he said, “but it’s not that two and a half, three million dollar snapback structurally that we were hoping to see.” He described lingering international visitor‑market uncertainty and said a regional event in June (World Cup activities) will likely lift some receipts but mainly for the 2025–26 reporting period.
Wasanski told commissioners staff is working to assemble final revenue inputs and department decision packages and expects to deliver the proposed budget to City Council in mid‑May. He said the administration is aiming to avoid tapping the city’s reserve account but is preparing “tough decisions,” including a potential flexible hiring freeze that would take advantage of vacancies to reduce costs.
On expenditures, Wasanski said the city sees some relief in pension payment projections if investment returns hold, and he noted strengths in property tax, parking and new emergency response fee revenues that help offset shortfalls in tourism receipts. He also warned that one‑time or external funding often changes during the fiscal year and that capital projects with outside dollars can increase in scope once funding becomes available.
The presentation included project updates: the Galleria site is “fully entitled” for up to 650 units, but private financing and ownership choices remain the primary barriers to redevelopment. Wasanski also reported progress in selecting design–build teams for police and fire facilities and said feedback from bidders so far indicates those projects are likely deliverable on budget.
Looking ahead, the commission scheduled in‑depth review meetings after staff delivers the proposed budget to City Council so commissioners can provide formal recommendations before final adoption.
The commission did not take final budget action at the meeting; next procedural steps include the city’s formal delivery of the proposed budget to council and commission review meetings in late May and early June.
