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Council reviews preliminary FY26–27 budget and adopts 10‑year financial model
Summary
City staff presented the FY25–26 year‑end estimates and the preliminary FY26–27 budget (general‑fund operating revenues $42.5M; operating expenditures about $37.5M), and the council voted to receive the budget and to adopt a 10‑year financial model, directing staff to return June 16 for budget adoption.
Rancho Palos Verdes staff presented the city’s preliminary FY26–27 budget and a 10‑year financial model at the June 2 council meeting, summarizing year‑end estimates, revenue forecasts and capital plan priorities.
Finance officials reported proposed general‑fund operating revenues of $42.5 million and proposed operating expenditures of roughly $37.5 million for FY26–27, reflecting approximately $1.9 million in budget reductions incorporated this year. Staff said the reserve policy target remains 50% of operating expenditures (about $18.6 million) and that the unallocated general‑fund balance was projected at about $10.2 million under the preliminary assumptions.
On the capital side, the preliminary capital improvement program listed 19 projects totaling about $31 million, with major categories including roadway maintenance and landslide response. Staff highlighted an estimated $4.5 million of unfunded CIP for FY26–27 and a larger five‑year unfunded project list of approximately $86 million under current assumptions.
Finance staff described revenue drivers: property tax (about 44% of general fund), transient occupancy tax (TOT) projected at roughly $6.8 million, sales tax at about $3.0 million, and a utility users tax forecast near $2.9 million. Staff recommended receiving and filing the year‑end estimates and reviewing and approving the preliminary budget framework, with a public hearing and final budget adoption set for June 16.
Councilmembers asked detailed questions about non‑personnel contract costs, reporting granularity and long‑term risks such as landslide remediation and storm‑drain liabilities. Staff emphasized the city’s continued pay‑as‑you‑go approach, the importance of reserve levels and sensitivity tests included in the 10‑year model. The council approved the staff recommendations to receive the preliminary budget materials and directed staff to return on June 16 for adoption; council also approved the 10‑year financial model following discussion.
The presentations included sensitivity analysis showing a hypothetical emergency in 2030 and the effects on available emergency funding; staff said stress testing indicated the city would still meet its reserve policy under the model’s assumptions but that long‑term pressures warrant continued monitoring and possible revenue options in future years.
