What Hermosa is actually deciding about its budget, in plain English

June 2026 · Published: June 12, 2026

Hermosa Beach has a budget for next year that balances on paper. The argument — aired at the June 9 City Council meeting and headed for a final vote set for June 23 — is over how it balances, and what happens in the years after. (June 9 posted agenda; Easy Reader, May 7, 2026) Here is what's actually on the table, translated.

How big is the hole?

City Manager Steve Napolitano told the council this spring that Hermosa faces a $3.2 million shortfall in the 2026-27 budget year, opening the first of seven budget sessions with "doing nothing is no longer an option," per Easy Reader. The deeper problem is the trend line: Administrative Services Director Brandon Walker said costs are growing 4 to 6 percent a year while revenue grows 2 to 4 percent — a projected $19.3 million shortfall over five years, nearly double the city's $10.6 million general fund reserves.

And bigger bills are coming: the LA County fire contract is rising 26 percent (roughly $1.8 million over three years), and the county has signaled it wants Hermosa to pay the full $4.9 million annual cost of lifeguards and beach maintenance when the current $400,000-a-year arrangement expires — on top of a pier decision measured in the tens of millions (our pier explainer) and a City Yard replacement pegged at $20 million. We mapped where each Hermosa dollar already goes in our budget breakdown.

What did staff actually put on the table June 9?

Item 17.b, "FY 2026-2027 Budget Discussion," came with three attachments worth knowing about: a list of proposed General Fund budget reductions, a list of supplemental requests (things departments want added), and a Future Revenue Options memo — the document where new fees and potential tax measures get floated. The staff recommendation was to "receive and file" the presentation — council jargon for this is a check-in, not a vote. The posted agenda does not record what the council did; minutes are pending. All three attachments are public on the meeting page.

What does "visitor revenue" mean?

Plain English: money paid by people who don't live here. The big lever is the 14 percent Transient Occupancy Tax — the hotel tax, which now also applies to short-term vacation rentals after a March court ruling forced the city to allow them in the coastal zone. The city estimates roughly $5 million in back taxes owed by 180 to 250 previously unlicensed rental operators, and at the June 9 meeting Councilmember Michael Keegan put the go-forward number at "almost $1.5 to $2 million" a year in new hotel-tax revenue — arguing the city should "digest those before we do anything," per Easy Reader's June 11 report. Parking is the other visitor lever: staff estimated rate increases and demand-based pricing could bring in $1.5 to $2 million. A quarter-cent sales tax — which would need voter approval — pencils at about $1 million a year, per Easy Reader.

The Chamber of Commerce's written comment on the budget item urged exactly this sequencing: evaluate "visitor-generated revenue opportunities and enforcement of existing regulations before placing additional burdens on local businesses," and prioritize the services businesses feel daily — permits, inspections, plan review.

What's the one-time-fixes criticism?

The budget presentation says the FY27 process "reflects a broader strategic shift away from reliance on one-time funding solutions." A resident commenter on the posted agenda, Ira Ellman, called that inaccurate — arguing most of the $3.2 million gap was closed, again, with one-time moves: pausing contributions to the equipment-replacement fund, deferring vehicle purchases, and trimming reserve allocations, with only about $270,000 in ongoing personnel reductions proposed. Another commenter pointed to five-year deficits of $20 million or more and $50 million in approved-but-unfunded capital projects. The city's own materials acknowledge the structural gap; the disagreement is over whether this budget starts fixing it or postpones it one more year. Both the plan and the criticism are on the public record — read them and decide.

What happens June 23 — and how do you weigh in?

Two things land that night: budget adoption, per Easy Reader, and the resumption of the citywide fee hearing (continued from May 12 and June 9 — our fee-study explainer). The agenda posts about 72 hours ahead on the June 23 meeting page. To comment without attending: open the HTML agenda, click the item, then click the blue "Leave comment" button (a speech bubble on your phone) — eComments are accepted until 3 hours before the 6 PM start, and it takes about two minutes. Or show up at 1315 Valley Drive and say it in person.

We track this story, and everything else that hits your money in MB and Hermosa, in the twice-weekly Pier to Pier newsletter.

General information, not advice.

Sources

  • City of Hermosa Beach, City Council Post-Meeting Agenda, June 9, 2026 (Item 17.b, 26-AS-065; Item 16.a fee study; public comments) — https://pub-hermosabeach.escribemeetings.com/Meeting.aspx?Id=38e41032-d451-4a4c-8edd-99625a66426d&Agenda=PostAgenda&lang=English
  • Easy Reader, "City confronts deficit as one-time budget fixes are exhausted," May 7, 2026 — https://easyreadernews.com/city-confronts-deficit-as-one-time-budget-fixes-are-exhausted/
  • Easy Reader, "City plans retroactive $5 million TOT pay from STVR owners," June 11, 2026 — https://easyreadernews.com/city-plans-retroactive-5-million-tot-pay-from-stvr-owners/
  • City of Hermosa Beach, June 23, 2026 City Council meeting page (eSCRIBE calendar) — https://pub-hermosabeach.escribemeetings.com/MeetingsCalendarView.aspx/Meeting?Id=bfc776af-50e8-496d-ad9c-77187cae2fa3

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