Setting The Record Straight: Manhattan Beach Budget Remains Structurally Balanced While Strengthening Long-term Financial Stability

PRESS RELEASE: Setting The Record Straight: Manhattan Beach Budget Remains Structurally Balanced While Strengthening Long-term Financial Stability (PDF)

OFFICE OF COMMUNICATIONS
Alexandria Latragna, Communications and Civic Engagement Manager
[email protected] • (310) 802-5063

FOR IMMEDIATE RELEASE

SETTING THE RECORD STRAIGHT: MANHATTAN BEACH BUDGET REMAINS STRUCTURALLY BALANCED WHILE STRENGTHENING LONG-TERM FINANCIAL STABILITY

Updated Financial Transparency Page Gives Residents Direct Access to Budget Data, FAQs, and Financial Reports

Manhattan Beach, CA (July 27, 2026) - Recent statements circulating online have suggested that the City of Manhattan Beach is facing a "$10+ million deficit." That claim is incorrect. The City continues to maintain a structurally balanced budget and the highest possible AAA bond rating from both Standard & Poor's and Moody's-an independent recognition of Manhattan Beach's strong financial management, healthy reserves, and long-term fiscal stability.

The City Council adopted the Fiscal Year 2026-2027 budget on June 2, 2026. The budget includes one-time investments and capital projects that temporarily reduce the City's fund balance through the use of reserves. Those planned expenditures do not represent an operating deficit. The City's General Fund remains structurally balanced, with ongoing revenues exceeding ongoing operating expenditures by approximately $2.7 million. The General Fund reserve is greater than 20% of operating expenditures, exceeding Government Finance Officers Association recommendations.

The projected reduction in fund balance is primarily driven by responsible and necessary one-time financial and reporting decisions, not ongoing overspending, including:

• A one-time $6 million transfer to the City's Insurance Reserve Fund to strengthen reserves in response to increasing insurance premiums and unprecedented litigation costs.
• The City adopted a new financial reporting approach recommended by its independent auditors that provides a clearer picture of how taxpayer dollars move between City funds. The updated presentation reports certain transactions differently than in previous years, making this year's budget appear different from prior budgets. That is solely a change in presentation-not a change in the City's financial condition. The revised approach improves transparency and aligns Manhattan Beach with the financial reporting practices of many comparable California cities.

"In 35 years serving this City, I've seen budgets that felt tighter than this one, and Manhattan Beach has always come through with its finances intact," said City Treasurer Tim Lilligren. "This year's numbers reflect smart, deliberate choices, not distress. We've weathered storms before, and our AAA rating and strong reserves tell you we're prepared for whatever comes next."

The FY 2026-2027 budget includes:

• A structurally balanced General Fund with ongoing revenues exceeding ongoing expenditures.
• A General Fund reserve greater than 20% of operating expenditures, exceeding Government Finance Officers Association recommendations.
• Continued investment in police, fire, infrastructure, parks, streets, and other essential City services.
• Approximately $6.6 million in Measure MMB revenue dedicated to infrastructure, maintenance, and capital improvement projects.
• Nearly $2 million in savings and budget adjustments identified through a comprehensive review of City spending, allowing resources to be redirected to higher community priorities while maintaining the high level of services residents expect.

To help residents better understand the City's finances, Manhattan Beach has launched an expanded Financial Transparency webpage that provides direct access to:

• The City's interactive financial dashboard
• Annual budgets and financial reports
• Information on staffing levels
• Pension liability information
• Frequently asked questions about City finances
• Revenue sources and expenditures by department and fund

"Financial reporting should help people better understand their government. Updating how we present financial information and clearly identifying one-time investments gives residents a more accurate picture of the City's strong long-term financial position," said Mayor Joe Franklin.

"We understand that residents have questions, and they deserve accurate information," said Finance Director Libby Bretthauer. "Our goal is to make the City's finances easy to understand by providing the data, the context, and the facts in one place."

Residents are encouraged to review the City's financial information directly by visiting the Financial Transparency webpage at www.manhattanbeach.gov/FinancialTransparency. Questions are welcome at [email protected].

Public discussion is an important part of local government, and the City welcomes questions about its finances. To help residents make informed decisions, the City encourages everyone to review the budget, financial reports, and interactive transparency tools available on the Financial Transparency webpage and to evaluate claims using verified public information.

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