Candidate Conversations: Manhattan Beach City Budget
Oct 05, 2026 02:31PM ● By Jeanne Fratello
Manhattan Beach City Hall. Image via city of Manhattan Beach.
On Mondays during this year's campaign season, Manhattan Beach News will publish candidates' statements on topics provided by MB News.
All four candidates for City Council were given the same prompt, and a chance to reply in up to 500 words. Their replies are published below. Each week, the order for candidates will be adjusted.
For this week, the candidates were asked about the city's budget, which has come under scrutiny lately for claims - which the city denies - that the city is facing a $10+ million deficit.
This week's questions:
1. Do you see the budget as having a 'deficit'?
2. How do you gauge the current council's actions to reduce spending, and to spend from reserves?
3. What are your budget priorities for the future?
4. How are those priorities challenged by trends in revenue and spending?
5. Would you seek new revenue sources, or suggest specific cuts?
AMY HOWORTH
1. No — and here's the distinction worth drawing clearly: the General Fund's ongoing revenues exceed ongoing operating expenditures by roughly $2.7 million. That's the operational surplus. The fund balance reduction comes from responsible one-time investments — most notably a $6 million transfer to the Insurance Reserve Fund to manage rising litigation costs and insurance premiums, alongside a presentation change recommended by auditors to increase accounting transparency.
A deficit means spending more on recurring operations than you bring in. Drawing down reserves for a deliberate, one-time need — while keeping the operating budget structurally balanced — is a sound fiscal decision. Our city maintains a General Fund reserve above 20% of operating expenditures, exceeding recommended standards, and holds top-tier AAA credit ratings.
2. The current Council has taken a disciplined approach, adding only 3 positions over the past two budget cycles while carefully balancing community service needs. Using reserves for the $6 million insurance transfer was a targeted solution to real cost pressures, not a habit of relying on reserves to cover basic operating costs.
3. I will continue to advocate for common-sense, disciplined fiscal policy. Our ongoing revenues must always cover ongoing operational costs, and our reserves must remain strong. Fiscal responsibility isn't about cutting corners; it's about protecting the essential municipal services, neighborhood safety, and community programs our residents rely on daily.
The vast majority of our municipal budget goes directly into the people who serve our community — our police officers, firefighters, public works crews, and parks and recreation staff. Every municipal job exists for one purpose: to serve our residents. We hold our staff to the highest standards of responsiveness and efficiency, ensuring that taxpayer dollars deliver high-quality, dependable service across every department.
4. Property tax remains our primary revenue driver, growing by 6.7% over last year. Additionally, Measure MMB has proven essential in securing crucial infrastructure funding for our city. Originally projected to generate $5 million annually, Measure MMB will deliver $6.6 million this fiscal year. These dedicated resources directly support our Capital Improvement Program (CIP), allowing us to responsibly plan and execute vital long-term infrastructure projects — including the Senior Community Scout House, downtown parking improvements, and other essential community facilities.
5. We must keep our fees and charges current. It is important that our fee schedules periodically adjust so they accurately reflect the rising cost of providing services and doing business. At the same time, we must ensure our fees remain competitive with neighboring cities so we do not discourage local business. A practical example of this balanced approach is our recent implementation of the city's first-ever residential developer impact fees, ensuring that developers pay their fair share to mitigate the impacts of multi-story developments on our critical municipal infrastructure, such as streets, sewers, and water systems.
MARK BURTON
2. What actions to reduce spending? I have yet to see any actions to reduce spending. Our Council apparently has an acute spending” problem Reduce spending? I just haven’t seen it. Our current Council, and several preceding Councils, have a spending culture. Not once have these Councils talked about “savings”. Spending from reserves will only make it worse, No, we are not going bankrupt. But the Council is not being “fiscally responsible” with our taxpayer dollars and our future. What I find particularly troubling is the solution from this Council is to increase taxes, fees or other revenue generating gimmick. No more taxes or fees.
3. Simple. First, the Council’s top priority is to keep our residents safe, so we need to fully fund our MBPD and MBFD. Second, we need to have budget surpluses to fund basic infrastructure improvements. Third, it’s time to start savings by setting aside 5% of revenue each and every year to fund infrastructure improvement in the future.
4. When elected to a second term, we can turn that “spending” culture around to a savings culture. In fact, we can’t afford not to. We start by imposing a hiring freeze to reduce our full time employee count from 357 to 290.
5. Would you seek any new sources of revenue, or suggest specific cuts to improve fiscal health?
No more new taxes or fees! We don’t need more revenue. We need to reduce spending by imposing hiring freeze to reduce our personnel costs. We have more employees than ever, making more compensation than ever resulting in our expenditures exceeding our revenues by millions of dollars.
RICHARD MONTGOMERY
Fiscal Responsibility and Headcount Control
The key issues in this election are fiscal responsibility and responsible control of City staffing.
Our City spends too much and has been too quick to add new, expensive positions. For example, the Council approved an Assistant City Manager position on a 3–2 vote with compensation exceeding $300,000 annually. Before adding positions like this, we should be asking a basic question: Is this a true necessity, and can our residents afford it?
I have a proven record of strong financial management from my previous service on the City Council. As Mayor, I led our City through two of the most difficult and economically challenging periods in our history—the Great Recession and the COVID-19 pandemic. Those experiences provided firsthand experience managing City finances during periods of significant uncertainty, and I believe that experience is important as we prepare for future financial challenges.
I am concerned that the current Council majority has continued to increase spending without sufficient consideration of changing economic conditions or the potential consequences for taxpayers and future budgets. At the same time, I have not seen enough meaningful efforts to reduce spending, particularly when additional staff positions continue to be proposed.
Protecting Our Reserves
Residents have also heard about the Council’s decision to use City reserves to pay expenses. That raises important questions.
Why are we using reserves that are intended to protect the City against genuine emergencies—such as an earthquake, a major refinery incident, or a plane crash?
And equally important: Why is this spending suddenly urgent? What changed to make these expenses require immediate payment from our reserves? Before using emergency reserves, the City should identify and thoroughly evaluate other available alternatives.
Residents deserve clear, timely and transparent explanations about these decisions. Open communication and accountability should be fundamental to how our City manages taxpayer dollars.
We Have a Spending Problem, Not a Revenue Problem
I believe the City should focus first on controlling spending rather than looking for additional revenue from residents. The recent increase in citywide parking-meter rates is an example of why this issue matters.
If additional revenue is generated, my priority would be to restore the $9 million taken from City reserves, including restoring funding to the Pension Stabilization Trust Fund and the Capital Improvement Plan.
Control Headcount Without Sacrificing Services
There are responsible ways to reduce costs without reducing essential services.
One approach would be to leave vacant most non-public-safety positions when employees retire, rather than automatically filling every vacancy. This can provide financial relief through attrition while protecting the services our residents and businesses depend upon.
We should also consider voluntary, strategically targeted retirement incentives—sometimes referred to as “golden handshakes”—when they produce long-term savings for the City.
Most importantly, we need to distinguish between needs and wants.
City government should focus taxpayer dollars on essential services, responsible staffing and long-term financial stability—not unnecessary expansion.
My commitment is straightforward and based on actual experience: control spending, control headcount, protect our reserves, restore our financial safeguards, and make every taxpayer dollar work harder for our community.
JOSEPH UNGOCO
I would not characterize Manhattan Beach's adopted budget as having an operating deficit. The numbers do not support that conclusion. The FY 2026-27 General Fund projects approximately $119 million in ongoing revenue and $116.25 million in operating expenditures, leaving an operating surplus of roughly $2.7 million.
But that does not mean we should ignore the bigger financial picture.
After one-time expenditures and transfers are included, the City projects using approximately $8.8 million of its General Fund balance this year. Much of that has legitimate purposes, including a $6 million one-time transfer to replenish the City's Insurance Reserve Fund and $5 million for capital improvements, deferred maintenance and other obligations.
Reserves exist to be used strategically. Capital projects, infrastructure and extraordinary one-time costs can be appropriate uses. My concern would be if drawing down reserves becomes routine or is used to avoid confronting growth in recurring expenses. One-time money should not be used to create permanent obligations.
I give the current Council credit for addressing spending. Staff identified approximately $1.1 million in reductions and reprioritizations, and the Council directed nearly $774,000 in additional reductions while attempting to minimize impacts on services. That is a responsible start.
But the City's own financial forecasts tell us we cannot become complacent. Pension obligations, insurance and litigation costs, infrastructure needs and other expenses will continue putting pressure on future budgets.
My priorities would begin with public safety, infrastructure and the core services residents expect. I also believe we need greater discipline in capital planning and should finish what City Hall starts before continually adding new projects and obligations.
Before asking residents for new taxes or fees, I would examine City operations, contracts, consulting expenses, staffing, capital projects and programs to determine what is essential, what can operate more efficiently and what can wait. We should also strengthen existing revenues by supporting local businesses and ensuring the City properly collects revenues already owed.
During my seven years on the Planning Commission, I learned the importance of asking difficult questions before decisions are made. I would bring that same approach to the City budget.
Manhattan Beach is fortunate to be in a strong financial position today. The challenge for the next Council is making the disciplined decisions necessary to keep it that way. Reserves provide security and flexibility, but they should not become a substitute for long-term fiscal planning.
