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Date: December 11, 2025
To: Chair and Members of the Finance and Governmental Operations Committee From: Ian Dailey, Finance Director | [email protected] Subject: Finance – Provide Direction Regarding Fiscal Year 2026-27 Operating Budget & Capital Improvement Plan Priorities. Expenditure: None.
RECOMMENDATION
Recommendation of the Finance Director that the Finance and Governmental Operations Committee provide direction regarding the Fiscal Year 2026-27 Operating Budget & Capital Improvement Plan Priorities.
FUNDING
None required.
DISCUSSION
The City of Torrance (City) has kicked off the budget development process for the Fiscal Year 2026-27 Operating Budget and Capital Improvement Plan with the first Budget Review Team Meeting taking place on November 12, 2025. The Budget Review Team is a cross-departmental group including department heads, managers, and supervisors from every department. This group supports the overall development of the City’s budget with periodic checkpoints throughout the process. During this meeting, Finance staff presented recent financial trends, proposed first- quarter program modifications, and the upcoming budget process and timeline. Below is the general timeline to be followed in the development of this year's budget:
November 2025:
o November 12, 2025 Budget Review Team #1
December 2025:
o Departments begin developing submissions for Capital Improvement Plan January 2026:
o Meet with Departments and continue Capital Improvement Plan development February 2026:
o Meet with Departments to review staffing and non-wage budget needs including zero-based budget exercise
o Continue Capital Improvement Plan development
o Draft Expenditure budget costing
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December 11, 2025
March 2026:
o Meet with Departments to review revenue projections and estimates for upcoming budget cycle and 10-year projection
o Finalize Revenue Budget, Expenditure Budget, and Capital Improvement Plan o Draft Budget Document
April 2026
o Budget Review Team #2
o Finalize Budget Document
o Distribute Budget Document
May 2026
o May 5, 2026 Budget Hearing #1
o May 19, 2026 Budget Hearing #2
June 2025
o June 9, 2026: Budget Hearing #3 & Budget Adoption
o June 23, 2026: Budget Adoption (back-up, if needed)
Beginning in Fiscal Year 2024-25, staff started seeking feedback and approval from the Finance and Governmental Operations Committee and City Council on a set of budget priorities. The goal of establishing these budget priorities at this point in the budget development process is to incorporate City Council priorities into the City-wide budget. These budget priorities are intended to set broad parameters that shall be a primary focus of the budget development process for a given fiscal year.
Staff’s recommended budget priorities are as follows:
1. Develop a balanced budget including 10-year projection compliant with City’s financial policies.
2. Identify strategies and new revenue sources to resolve identified Areas of Focus.
3. Attract and retain a highly skilled workforce to deliver critical city services.
4. Prioritize investments in parks, buildings, and public right of way.
5. Expand business attraction and overall economic development efforts.
6. Explore alternative methods that improve cost effectiveness and service delivery of city operations.
7. Expand investment in technology to proactively address cybersecurity resiliency and improve customer experience.
8. Plan for expanded use of alternative fuel vehicles compliant with recent California Air Resources Board (CARB) guidance.
9. Implement Park Maintenance improvement strategies and measures identified in the Park Services Operational Assessment.
10. Complete Library Needs Assessment to inform future programming and service delivery.
11. Identify resources to continue implementation of collaborative reform effort with the California Department of Justice.
Upon approval, the identified priorities will provide staff with a roadmap to develop the coming year’s budget plan. Staff will connect items included in the budget to these priorities to ensure limited resources are allocated most efficiently.
Staff recommend that the Finance and Governmental Operations Committee provide directions to staff on the recommended budget priorities so that they can be presented to City Council on December 16, 2025 for approval.
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