Manhattan Beach's unrestricted net deficit grew from roughly $10.4 million to $32 million in a single year, dropping the city 10 places in a countywide financial ranking to 63rd out of 88 Los Angeles County cities, according to an analysis published by MB Weekly commentator Paul Wafer on Thursday, July 30.

The decline tied with La Verne for the steepest single-year drop in the county. It followed an even larger 33-place fall the previous year, meaning Manhattan Beach has slid a combined 43 places in two consecutive years.

Only seven of the county's 88 cities moved six or more places in the rankings, which are based on 2024 audited financial statements and measure unrestricted financial resources available for general operations on a per-resident basis. The underlying data was compiled by the Epoch Times and published the week of Wednesday, July 15.

What drove the numbers

Four factors combined to widen the deficit, Wafer wrote: a correction to the value of certain capital assets; a $9.2 million operating deficit where expenditures exceeded revenues; a $1.4 million transfer into restricted funds unavailable for general operations; and $11.8 million invested in capital assets such as infrastructure and equipment.

"The ranking itself is not the whole story, but it is another warning sign that the city's financial position has weakened," Wafer wrote. "Combined with projected operating deficits and the use of reserves in recent budgets, it raises an important question: What steps will the City Council take to restore Manhattan Beach's long-term financial stability before the problem becomes more difficult to solve?"

The financial picture compounds a projected $10.9 million budget deficit for fiscal year 2027, a figure cited by former Mayor Mark Burton in a separate MB Weekly commentary published Wednesday, July 22.

Housing pressure adds to fiscal strain

While the city's balance sheet deteriorates, a grassroots campaign against high-density housing is gaining momentum. Stop the Rise MB reports more than 11,500 website visitors, over 3,000 supporters, and approximately 380 lawn signs displayed across the city, according to MB Weekly.

The group opposes several proposed developments moving forward under California state housing laws that limit the city's authority to reject projects. The most prominent: a 40-unit, seven-story apartment building at 2301 N. Sepulveda Boulevard that won approval and was moving toward construction as of early July. Residents have also raised concerns about a separate 18-story proposal at 2705 N. Sepulveda.

Stop the Rise MB has held three public protests, partnered with the statewide advocacy organization Our Neighborhood Voices, and is now organizing a sign-up effort for additional demonstrations. Our Neighborhood Voices is working toward a proposed 2028 ballot initiative that would give cities and counties greater authority over local land-use decisions.

Budget growth under scrutiny

The city's Community Development Department budget grew from $7.85 million to $10.0 million between fiscal year 2023-24 and the proposed 2026-27 budget, a 27.4% increase, even as building inspections rose only about 5% and commercial, electrical, and mechanical permits declined, Wafer reported in a separate analysis published Thursday, July 9.

Retired Manhattan Beach Police Department Captain Tim Hageman, a Manhattan Beach resident, wrote in MB Weekly on Thursday, July 9 that fiscal responsibility requires spending taxpayer dollars on priorities that protect the character of the city. He argued future development must account for neighborhood impacts, traffic, parking, and infrastructure.

No City Council vote on financial remediation measures has been publicly scheduled. Residents can track upcoming agenda items on the city's website.