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Half Moon Bay adopts FY 2026–27 operating and capital budget, sets appropriation limit
Summary
Council unanimously adopted the FY 2026–27 budget, establishing the GANN appropriation limit and confirming the investment policy. The adopted operating budget totals about $25 million with reserves fully funded at $12 million and an expected $1.5 million structural deficit to be offset with prior‑year savings.
The Half Moon Bay City Council unanimously adopted the FY 2026–27 operating and capital budget on June 16, approving associated annual actions including the GANN appropriation limit and the city's investment policy.
Finance staff summarized key figures: projected revenues of about $24 million (approximately 5% lower than the prior year, largely because of reduced golf facility fees and one‑time revenues), operating expenditures near $25 million (a modest increase of roughly 1.5%), and fully funded reserves of about $12 million. Staff reported an expected structural annual operating deficit of approximately $1.5 million; the city plans to mitigate that shortfall with prior‑year salary savings and other one‑time funds while pursuing longer‑term structural adjustments.
Staff highlighted the capital improvement program (CIP) of roughly $25 million for the coming year, funded substantially by grants and special revenue funds, limiting the general fund’s direct capital contribution. City staff and the council also discussed vehicle license fee (VLF) disputes with the state and a potential periodic payment of roughly $500,000 that could strengthen one‑time unassigned fund balances if recovered.
The council approved the budget by roll call (Council members Brownstone, Johnson, Nagingast, Vice Mayor Penrose and the mayor each voted yes). Staff noted that midyear budget adjustments will consider any additional or recovered revenues and that long‑term structural solutions will remain a focus for future work plans.
What this means: Day‑to‑day city operations will continue under the adopted budget; staff will continue to monitor revenues and pursue strategies to reduce the ongoing structural deficit.
Next steps: The city will implement the adopted budget, monitor revenue recovery (including potential VLF receipts), and return to council with midyear adjustments as appropriate.
