FY 2026 FIRST QUARTER BUDGET UPDATE
November 18, 2025
FIRST QUARTER BUDGET UPDATE
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
Tonight’s Agenda:
FY 2026 First Quarter Update
Upgrade Fire Apparatus Replacement
Appropriation of $188,144 from the Fleet Fund Balance
Authorization for City Manager to Complete the Purchase Change Order One Proposed Staffing Adjustment
FIRST QUARTER BUDGET UPDATE
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
General Fund Comparison of Quarter 1 Results
Revenues* exclude one-time Bond Proceeds and Unrealized Investment Gain/Loss Expenditures** exclude one-time purchase of Public Safety Radios Overall, Revenues in Q1 increased at a faster pace 6.8% while expenditures increased a slower pace 2.1% FY 2026
Original Budget
FY 2026
Revised Budget
FY 2026
Quarter 1
FY 2025
Quarter 1
$
Change
%
Change
Revenues*
$112,198,628
$112,198,628
$12,866,840
$12,051,266
$815,574
6.8%
Expenditures**
$105,580,229
$107,622,926
$23,311,747
$22,834,761
$476,985
2.1%
FY 2026 ADOPTED BUDGET
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
General Fund Revenues = $125,419,628
GENERAL FUND REVENUES BY CATEGORY
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
*FY 2026 inlcudes one-time bond proceeds to reimburse the General Fund balance for the acquisition of 400 Manhattan Beach Boulevard and Public Safety Radios.
FY 2026
FY 2026
FY 2026
Percent
FY 2025
General Fund Revenues
Original Budget
Revised Budget
Quarter 1
Realized
Quarter 1
Variance
Key Revenues
Property Tax
$47,018,618
$47,018,618
$961,659
2.0%
$938,608
$23,051
Sales & Use Tax
11,440,000
11,440,000
839,999
7.3%
1,047,716
(207,716)
Local Transaction and Use Tax
5,943,000
5,943,000
347,280
5.8%
-
347,280
Hotel Transient Occupancy Tax (TOT)
7,682,000
7,682,000
1,487,613
19.4%
1,647,417
(159,804)
Short-Term Rental TOT
1,367,000
1,367,000
229,520
16.8%
256,456
(26,935)
Business License Tax
5,850,000
5,850,000
385,815
6.6%
323,500
62,315
Real Estate Transfer Tax
850,000
850,000
187,239
22.0%
91,364
95,875
Building Permits
2,557,433
2,557,433
636,087
24.9%
566,819
69,269
Parking Citations
2,741,865
2,741,865
503,467
18.4%
410,647
92,820
Interest Earnings
1,484,313
1,484,313
329,201
22.2%
560,894
(231,693)
Building Plan Check Fees
2,000,000
2,000,000
1,007,449
50.4%
575,996
431,453
Subtotal Key Revenues
$88,934,229
$88,934,229
$6,915,330
7.8%
$6,419,415
$495,915
Remaining Revenues by Category
Other Taxes & Assessments
$1,781,600
$1,781,600
($7,213)
(0.4%)
$40,561
($47,774)
Revenue from Permits
1,284,894
1,284,894
286,294
22.3%
287,792
(1,498)
Fines
195,078
195,078
61,953
31.8%
37,263
24,690
Interest & Rents
4,106,130
4,106,130
560,772
13.7%
469,338
91,435
From Other Governments
315,190
315,190
113,483
36.0%
5,064
108,419
Service Charges
9,106,871
9,106,871
3,492,758
38.4%
3,434,267
58,491
Operating Service Transfers
5,533,136
5,533,136
1,224,571
22.1%
1,046,156
178,415
Miscellaneous
941,500
941,500
218,892
23.2%
311,410
(92,518)
Subtotal Other Revenues
$23,264,399
$23,264,399
$5,951,510
25.6%
$5,631,851
$319,659
General Fund Revenues
$112,198,628
$112,198,628
$12,866,840
11.5%
$12,051,266
$815,574
Unrealized Investment Gain/(Loss)
-
-
($53,539)
-
$1,141,441
($1,194,979)
Bond Proceeds
$13,221,000
$16,846,807
$16,649,819
98.8%
-
$16,649,819
Total General Fund Revenues
$125,419,628
$129,045,435
$29,463,121
22.8%
$13,192,707
$16,270,414
FY 2026 ADOPTED BUDGET
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
General Fund Expenditures = $105,580,229 By Category
GENERAL FUND EXPENDITURES BY CATEGORY
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
FY 2026
FY 2026
FY 2026
Percent
FY 2025
General Fund Expenditure
Original Budget
Revised Budget
Quarter 1
Utilized
Quarter 1
Variance
Salary & Wages
$45,980,159
$45,980,159
$10,832,461
23.6%
$10,652,671
$179,789
Employee Benefits
17,083,678
17,083,678
4,053,755
23.7%
3,911,503
142,252
Contract & Professional Services
14,768,581
16,391,979
3,427,826
20.9%
3,720,430
(292,604)
Materials & Services
4,972,935
5,053,116
1,073,378
21.2%
1,062,330
11,048
Utilities
1,754,711
1,754,711
316,928
18.1%
330,249
(13,320)
Internal Service Charges
15,297,279
15,297,279
3,544,078
23.2%
2,963,800
580,278
Property & Equipment
74,400
371,768
1,704
0.5%
193,779
(192,075)
Bond Debt
5,635,352
5,677,102
61,617
1.1%
-
61,617
Transfers Out
13,134
13,134
-
-
-
-
General Fund Expenditures
$105,580,229
$107,622,926
$23,311,747
21.7%
$22,834,761
$476,985
Public Safety Radio Replacements
-
3,438,082
3,413,377
99.3%
-
3,413,377
Total General Fund Expenditures
$105,580,229
$111,061,008
$26,725,124
24.1%
$22,834,761
$3,890,362
FY 2025 ADOPTED BUDGET
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
General Fund Expenditures = $105,580,229
By Department
GENERAL FUND BY DEPARTMENT
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
FY 2026
FY 2026
FY 2026
Percent
FY 2025
General Fund Expenditures
Original Budget
Revised Budget
Quarter 1
Utilized
Quarter 1
Variance
Management Services
$5,484,086
$5,529,284
$1,052,578
19.0%
$1,165,455
($112,876)
Finance
5,014,140
5,087,531
1,118,796
22.0%
1,024,093
94,703
Human Resources
2,438,873
2,465,332
514,981
20.9%
991,321
(476,340)
Parks & Recreation
12,157,179
12,284,097
3,136,907
25.5%
2,645,628
491,279
Police*
40,371,162
43,667,858
11,630,518
26.6%
8,226,320
3,404,197
Fire*
18,591,849
19,353,685
4,981,119
25.7%
4,382,065
599,054
Community Development
8,801,990
8,967,766
1,811,559
20.2%
1,798,819
12,740
Public Works
12,720,950
13,705,456
2,478,667
18.1%
2,601,061
(122,394)
Information Technology
-
-
-
-
-
-
Total General Fund Expenditures
$105,580,229
$111,061,008
$26,725,124
24.1%
$22,834,761
$3,890,362
* FY 2026 expenditures include Public Safety Radio Communications Equipment in Police and Fire Departments
GENERAL FUND SUMMARY
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
General Fund Revenue &Expenditure Summary**
FY 2026
FY 2026
FY 2026
FY 2025
Original Budget
Revised Budget
Quarter 1
Quarter 1
Variance
Total Revenues
$112,198,628
$112,198,628
$12,866,840
$12,051,266
$815,574
Total Expenditures
105,580,229
107,622,926
23,311,747
22,834,761
476,985
$6,618,399
$4,575,702
($10,444,907)
($10,783,496)
$338,589
* * Excludes Revenues for Unrealized Investment Gain/(Loss) and One-time Bond Proceeds and Expenditures for Purchase of Public Safety Radios FY 2026 Budget adopted with surplus of $6.6 million
The FY 2026 Revised Budget includes new appropriations plus contract encumbrance carryforwards Additionally, net General Fund transfers budgeted total $8.6 million:
$5.0 million to CIP Fund
$3.2 million to Section 115 Trust Fund
$500,00 to Storm Drain Fund
$284,462 to Street Lighting & Landscape Fund
$400,149 from the County Parking Lots Fund
NOTEWORTHY REVENUE TRENDS
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
Water Fund and Sewer Fund Revenues
Water Fund revenues are up by $211,075 (3.8%) from previous year's quarter due to pass-through volumetric adjustments approved in May 2025 Sewer Fund Revenues are down $255,128 (15.5%)
Water consumption increased slightly in Q1 of FY 2026 compared to Q1 of FY 2025 due to warmer and drier conditions Water and Sewer Funds are currently not meeting City’s Reserve Policy of 4 months (33%) of operating expenditures Water and Sewer Rate Study will be underway early 2026 to address the reserve shortfalls and funding needs for future infrastructure projects
NOTEWORTHY REVENUE TRENDS
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
Parking Fund
Revenues are up by $392,048 (27.1%) compared to the prior year quarter primarily due to new parking meter rates and parking permit fees that went into effect on May 1, 2025 Citywide Parking Strategies and Toolkit Report was recently approved on November 3, 2025. The Study identifies parking strategies that will return in early 2026
PROPOSED BUDGET ADJUSTMENT
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
Fire Apparatus Replacement
On May 6, 2025, City Council authorized the purchase of a Pierce Enforcer 75’ Aerial Ladder Truck for $1,593,170 75’ Aerial Ladder will be unable to perform effective water/rescue operations for structures above 5 stories 107” Aerial Ladder Truck needed to accommodate potential developments 6 – 9 stories tall To facilitate upgrade, an appropriation of $188,144 is needed in FY 2026 from the Fleet Fund Balance
Upgrade HR Assistant to HR Technician
Annual cost differential is $26,224
No impact to FY 2026 Budget due to savings in part-time salaries and proration for 7 months remaining in the fiscal year Upgrade allows for more complex and higher-level duties to be assigned to existing full-time staff Shifts role from administrative/clerical to paraprofessional/technical Reclassification is responsive to career progression and retention considerations
PROPOSED STAFFING ADJUSTMENT
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
Position
Total Salaries & Benefits
Human Resources Technician
$160,767
Human Resources Assistant
-134,543
Annual Difference
$26,224
Staff recommends that the City Council:
Receive the report on Quarter 1 of FY 2026
Appropriate $188,144 from Fleet Fund balance to Upgrade the Replacement Fire Apparatus Approved on May 6, 2025 Authorize the City Manager to execute the Purchase Change Order Approve the proposed staffing adjustment
RECOMMENDATION
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
RESOURCES & FUTURE UPDATES
November 18, 2025
FY 2026 QUARTER 1 BUDGET UPDATE
Budget documents on City website:www.manhattanbeach.gov/budget OpenFinance Transparency page
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Next Steps
City Council Meeting Dates
FY 2025 Year-end Update & ACFR
January 20, 2026
FY 2026 Mid-Year Budget Update
February 17, 2026
FY 2027 Proposed Budget Presentation
May 5, 2026
Budget Study Sessions
May 2026