CivicCause budget overview

Half Moon Bay Budget Overview

FY2025-26 Adopted Budget

Half Moon Bay adopted a balanced FY2025-26 budget, but General Fund costs exceed ongoing revenues by about $1.47M. The city is using prior-year savings while it works toward a more sustainable structure.

Budget status

Balanced using prior-year savings

Resident-facing classification for the FY2025-26 adopted budget.

General Fund revenue

$23.86M

FY2025-26 adopted General Fund revenues.

General Fund spending

$25.33M

FY2025-26 adopted General Fund expenditures.

Operating gap

-$1.47M

General Fund costs exceed revenues before prior-year savings.

Ending reserves

$8.83M

Ending General Fund balance / total reserves in the adopted budget.

Capital plan

$24.11M

FY2025-26 Capital Improvement Program expenditures.

Budget status: Balanced using prior-year savings. FY2025-26 General Fund revenues are $23.86M and expenditures are $25.33M, leaving a $1.47M gap covered with prior-year savings.

Reserve health: adequate near term, but not fully comfortable. The operating reserve remains funded, while the Economic Uncertainty Reserve is below its 20% target and repeated use of savings would reduce future flexibility.

Resident Budget Story

Half Moon Bay's FY2025-26 budget is balanced, but not structurally solved. General Fund revenues are about $23.86M and General Fund expenditures are about $25.33M, leaving a $1.47M gap covered with prior-year savings.

The city is more dependent on hotel tax and sales tax than many local governments, so tourism and local business activity matter directly to service capacity. The new half-cent sales tax improves the outlook, but the budget still warns that one-time resources are not a long-term fix.

Public Safety and Public Works are the largest operating areas, while the capital plan focuses on streets, trails, parks, facilities, stormwater, sewer, and coastal resilience.

FY2024-25 revised budget vs FY2025-26 adopted

Measure

FY2024-25 revised

FY2025-26 adopted

Change

General Fund revenues

$20.90M

$23.86M

+$2.96M

General Fund expenditures

$25.72M

$25.33M

-$386K

General Fund operating result

-$4.82M

-$1.47M

+$3.35M improvement

Total city revenues, all funds

$59.35M

$59.99M

+$638K

Total city expenditures, all funds

$74.69M

$71.15M

-$3.53M

Capital Improvement Program

$26.73M

$24.11M

-$2.62M

Major spending changes

Measure

FY2024-25 revised

FY2025-26 adopted

Change

Public Works spending

$3.99M

$4.53M

+$535K

Contract services

$12.66M

$13.14M

+$472K

Public Safety spending

$7.24M

$7.63M

+$394K

Salaries and benefits

$7.26M

$7.65M

+$394K

Capital transfers from General Fund

$2.11M

$985K

-$1.13M

City Manager's Office

$3.67M

$3.10M

-$573K

Revenue Snapshot

Hotel tax

$8.70M

Largest General Fund revenue source; tied to visitor activity and lodging demand.

Sales tax

$4.97M

Rises sharply because of the new local half-cent sales tax.

Property tax

$3.71M

Important but lower than visitor and sales-tax sources in this budget.

Charges and fees

$1.17M

City service fees, planning/building activity, parking, recreation, and related charges.

Other revenue

$3.94M

Reimbursements, golf facilities fees, transfers, interest, grants, permits, and miscellaneous revenue.

Spending Snapshot

Public Safety

$7.63M

Largest General Fund service cost; includes law enforcement and emergency dispatch contract pressure.

Public Works

$4.53M

Roads, facilities, infrastructure maintenance, sustainability, engineering, and service delivery.

City operations and transfers

$3.59M

Pension, debt, capital-transfer, and other non-departmental obligations.

City Manager and emergency services

$3.10M

Executive management, recreation/community vitality, economic/community work, and emergency services.

Community Development

$2.36M

Planning, building, development review, and land-use capacity.

Major Investments and Cause Signals

Transportation / Infrastructure

Street Improvements

$13.57M

Largest CIP category, including Highway 1, pavement, bridge, bike, and corridor work.

Transportation / Parks & Recreation / Coastal Access

Trail Improvements

$3.93M

Trail and coastal-access investments, including Eastside Parallel Trail work.

Parks & Recreation

Parks Improvements

$2.51M

Park maintenance, accessibility, and improvement projects.

Government Operations / Infrastructure

Facility Improvements

$1.65M

Public facility repair and modernization, including HVAC and accessibility-related work.

Environment / Coastal Resilience / Infrastructure

Storm Water Improvements

$1.61M

Drainage, erosion, outfall, and stormwater planning projects.

Infrastructure / Environment

Sewer Improvements

$486K

Sewer repair, master planning, and system reliability projects.

CivicCause Cause Mapping

Public Safety

$7.63M

Largest General Fund operating area and a major structural cost pressure.

Transportation

$17.50M

Street and trail CIP categories together dominate the capital plan.

Infrastructure

$24.11M

CIP includes streets, trails, parks, facilities, stormwater, sewer, and public assets.

Environment / Coastal Resilience

$1.61M+

Stormwater, sewer, climate adaptation, erosion, and coastal-trail work connect budget to resilience.

Parks & Recreation

$2.51M CIP

Parks investments plus Recreation and Community Vitality operating work affect quality of life.

Economic Development

$8.70M hotel tax

Tourism and visitor activity directly shape the city's operating capacity.

Housing

$1.31M fund spending

Affordable Housing Fund expenditures and Housing Element implementation are targeted signals, not the dominant budget driver.

Government Operations

$8.83M reserves

The main governance issue is fiscal sustainability, reserve use, staffing capacity, and service delivery.

Key Risks

Ongoing General Fund service costs exceed ongoing revenues, creating a structural gap.
The balanced FY2025-26 budget depends on prior-year savings and one-time resources.
Hotel tax and sales tax concentration make the budget sensitive to tourism and local economic activity.
Public safety contract costs remain the largest General Fund spending pressure.
The Economic Uncertainty Reserve is below target, and forecasts warn reserves could decline sharply without corrective action.
Capital needs remain large, especially for streets, trails, stormwater, sewer, parks, facilities, and coastal infrastructure.

What Residents Should Watch

Whether the new half-cent sales tax reduces pressure on reserves.
Whether hotel tax and tourism revenue meet budget expectations.
Whether public safety contract costs keep growing faster than revenues.
Whether the city can preserve services while reducing its structural deficit.
Which capital projects move forward with grants or restricted funding.
Whether the Economic Uncertainty Reserve moves back toward its 20% target.

Reserve Position

Half Moon Bay's ending General Fund balance is committed to reserve categories. The core General Fund Reserve remains funded, but the Economic Uncertainty Reserve is below its 20% policy target.

Ending General Fund balance

$8.83M

Also shown as total reserves in the FY2025-26 budget.

General Fund Reserve

$7.30M

30% operating reserve target in the adopted budget.

Economic Uncertainty Reserve

$1.53M

Below the 20% policy target according to the budget narrative.

Unassigned fund balance

The budget shows no unassigned General Fund balance after reserve designations.

Comparison values use the FY2024-25 revised budget column from the adopted FY2025-26 budget book. They should not be described as audited actuals.