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The Half Moon Bay City Council passed its budget for the upcoming 2025-26 fiscal year at its meeting June 17, as it grapples with a structural budget deficit of $3 million.
City staff have brought that deficit down to $1.47 million for the current year through one-time cost-cutting measures — including a withdrawal from the sheriff savings account and not putting the typical yearly payment of $562,000 into its risk management fund.
The city plans to deal with that $1.47 million deficit in the upcoming year by pulling money from its unassigned fund balance, though councilmembers warned that the city’s fiscal woes were ongoing.
“The deficit is structural in nature, not sustainable and remains an ongoing significant fiscal challenge for the city,” Councilmember Paul Nagengast said. “It’s very important that the council recognizes that.”
The city — which is still struggling with a hotel occupancy tax that hasn’t fully rebounded from the pandemic — might have to make difficult choices to cut core services in the near future, City Manager Matthew Chidester said previously.
He also acknowledged at the meeting June 17, that staff had been working to cut down on nonessential services, creating around $750,000 in savings. In addition, a potential upcoming city government restructuring could work to save the city money.
While projected revenue, at $23.8 million, are still set to be outpaced by projected expenditures, at $25.3 million, Half Moon Bay will likely see a general revenue increase of nearly $3 million from the year before.
That includes a $356,000 projected increase in hotel taxes and funding from recently-passed sales tax Measure M.
Still, it would be prudent for the city to work on further increasing its revenue streams, Vice Mayor Debbie Ruddock said.
“I think a good strategy is to boost the funding sources that we have by various initiatives in pairing that with some smart cuts,” she said.
(650) 344-5200 ext. 105
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