TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Libby Bretthauer, Acting Finance Director
Julie Bondarchuk, Financial Controller
Emy-Rose Hanna, Budget & Financial Analyst
Marcelo Serrano, Grants & Financial Analyst
SUBJECT:Title
Presentation of the Fiscal Year 2026 Proposed Operating Budget (Acting Finance Director Bretthauer).
(Estimated Time: 1 Hr.)
DISCUSS AND PROVIDE DIRECTION
Body
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RECOMMENDATION:
Staff recommends that the City Council receive this report on the Proposed Operating Budget for Fiscal Year (FY) 2026, including updated Financial Policies, and provide direction.
FISCAL IMPLICATIONS:
The Proposed Budget for FY 2026 includes revenues and expenditures for all City Funds. The document includes sufficient funding for ongoing operations as well as scheduled projects in the Capital Improvements Plan (CIP).
The FY 2026 General Fund Proposed Budget has a projected surplus of $19,834,684, which includes anticipated bond proceeds of $13,221,000 to reimburse the General Fund balance for the acquisition of 400 Manhattan Beach Boulevard. Excluding these one-time funds, the revised surplus is estimated to be $6,613,684.
Revenue
$125,398,738
Expenditures
$105,564,054
FY 2026 Proposed Budget Surplus
$ 19,834,684
Includes:
Bond Proceeds
$ 13,221,000
Measure MMB Local Transactions and Use Tax
$ 5,943,000
Operating Surplus
$ 670,684
At the end of FY 2026, the City's Financial Policy reserve of 20% of operating expenditures is estimated to be $21.1 million, which is greater than the Government Finance Officers Association (GFOA) recommendation of "no less than two months (17%) of regular general fund operating revenues or regular general fund operating expenditures." In addition, the City Council has set aside $4.0 million as an "Economic Uncertainty" reserve to use at its discretion.
After taking into account the project...
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