HERMOSA BEACH, CA — Hermosa Beach City Council voted to adopt the City’s balanced Fiscal Year (FY) 2026-27 Budget at its regular meeting on June 23, 2026. The City fixed a $3.2 million structural deficit by reducing spending by approximately $4.5 million, including workforce reductions and targeted departmental cuts, to balance the FY 2026-27 Budget while minimizing impacts to services and staff.
While the FY 2026-27 Budget is balanced, the City continues to face significant and ongoing fiscal pressures. These include projected cost increases of approximately $3.1 million from pending Los Angeles County renegotiations for fire services, lifeguard services and beach maintenance – with an estimated $1.6 million in annual cost increases moving forward – and substantial unfunded CIP needs, including street and sidewalk repairs and major projects like the City Yard and Pier.
To balance the FY 2026-27 Budget while meeting resident needs, staff worked with City Council and Commissions across seven public meetings to identify $4.5 million in savings. The City preserved $2.1 million by deferring all vehicle purchases and paused $1.1 million in annual contributions to its rainy-day reserves, while maintaining reserves at 18 percent (above the Government Finance Officers Association-recommended minimum of 16 percent). Departments also reduced their individual budgets by up to 10 percent, cutting an additional $1.3 million by eliminating two full-time and several part-time positions, downgrading one full-time role, terminating consultant contracts and implementing operational efficiencies.
The City’s initial FY 2026-27 budget outlook, presented in April 2026, originally identified an estimated structural deficit of approximately $3.2 million in its General Fund. Over the past several years, the City has relied on one-time funding solutions and operational adjustments to maintain balanced budgets. However, contracts with the Los Angeles County Fire Department for fire protection, beach operations and lifeguard services, Capital Improvement Program (CIP) needs and rising personnel and contract service costs have resulted in structural cost increases the City can no longer address through one-time measures alone.
In acknowledging this year’s balanced budget, City officials noted future challenges as the City’s near-term costs continue to rise faster than its revenue.
“We worked closely with staff to analyze each department budget and save every dollar while protecting the community services our residents value,” said Mayor Mike Detoy. “We’ve reduced spending, deferred purchases and streamlined operations to achieve this balanced budget. But our work is far from over – County negotiations and major projects are on the horizon, and we need to plan accordingly to protect our community’s quality of life.”
During the same June 23 meeting, the Council directed staff to prepare ballot language for a local half-cent sales tax ballot measure on the November 3, 2026 General Municipal Election with the stated goal of developing a dedicated local revenue source to protect service levels and address the City's long-term infrastructure needs.
As actual revenues and expenditures are monitored throughout the fiscal year, staff will evaluate the realization of these projected savings and report back to City Council as part of a future FY 2026-27 Mid-Year Budget Review. The adopted budget and all supporting documents are available to the public online, and the FY 2026-27 Budget can be read here.
