Budget commission receives proposed 2026–27 budget emphasizing hiring freeze, fee increases and ballot measures to close gap

The Redondo Beach Budget & Finance Commission on Tuesday received staff’s proposed 2026–27 budget, in which City Manager Mike Wazensky said the city will avoid using CalPERS reserve funds to balance the year and instead rely on a mix of cost controls and new revenues.

Wazensky described a conservative spending plan that uses a “flexible hiring freeze” — roughly a 5% vacancy factor — to produce about $2.9 million in salary savings and a set of 32 decision packages (21 affecting the general fund) that net about $2.1 million in ongoing revenue or savings. “We were determined not to use reserve funds to balance this year’s budget,” Wazensky said, and added that staff will be “very judicious about the positions that I allow staff to recruit for and fill.”

Why it matters: the document shows roughly $125 million in proposed revenues against about $128 million in proposed expenditures. Staff said they will not draw on the city’s CalPERS reserve this year and instead are proposing fee increases, one-time adjustments and administrative changes to close the gap while preserving contingency reserves.

Key measures highlighted by staff include a ballot measure to allow the city’s transient-occupancy tax (TOT) rate to rise from the current 12% to a cap of as much as 15%. Wazensky estimated each 1-percentage-point increase is “at current levels, about $750,000 of net increment” and could be closer to $1,000,000 if hotel occupancy improves. Staff also flagged a potential modernization of the city’s utility-user tax to allow collection on streaming services if voters approve a ballot measure.

Staff and the commission discussed revenue drivers in greater detail. Stephanie, the finance presenter, said TOT is projected conservatively and is down about 4% from the revised midyear number because some hotel rooms have been offline for refurbishment and overall regional occupancy remains weak. The proposed budget assumes the EDI hotel will contribute about six months of revenue if it opens midyear.

Other balancing steps in the plan include insurance changes (eliminating earthquake coverage for certain assets and increasing the city’s self‑insured retention to $1,000,000) that staff estimate will save roughly $700,000 to $1,000,000 in premium costs going forward; fee updates in community development that staff said generate about $1.1 million in ongoing revenue; and a 25¢ per hour parking meter increase that staff estimate will add about $350,000 a year.

Commissioners pressed staff for clearer breakout slides showing how the $2.162 million ongoing decision‑package figure was calculated and emphasized a desire to replenish reserves. One commissioner said the commission should encourage replenishment of previously borrowed reserve funds and consider longer-term forecasting; Wazensky replied that recommendations to council can be drafted at the commission’s next meeting and that the commission will have another opportunity to formalize guidance on June 11.

Procedural outcome: a committee member moved to receive and file the proposed budget documents; the motion was seconded and adopted by voice vote.

What’s next: City Council will hold three public budget hearings (June 2 operating budget, June 9 capital improvement program and June 16 final budget adoption). The commission is scheduled to reconvene June 11 to finalize recommendations to council.