Amid financial hardships while coping with unprecedented land movement and its fallout, Rancho Palos Verdes approved its fiscal 2026 budget, as well as a five-year Capital Improvement Program, this week.

The city’s general fund budget is $41.8 million for fiscal 2026, up from around $40 million last fiscal year. The new fiscal year will begin July 1.

The largest expenditures are salaries at more than $15 million, followed by operation and maintenance at $11 million and public safety at $9.6 million, according to Finance Director Vina Ramos.

The city’s largest revenue source — 44% — continues to be property taxes, with an estimated increase of $17.6 million to $18.2 million.

That is followed by transient occupancy tax at $7 million, permits and fees at $4.4 million, and various other taxes and fees, including sales, franchise and utility users taxes.

About 98% of TOTs are from the Terranea Resort, according to a city staff report.

“Recent landslide activity in the Portuguese Bend area has primarily affected residential properties and infrastructure but has had no direct impact on Terranea Resort or other hospitality businesses,” according to the staff report. “Despite concerns regarding the landslide near Terranea, at this time, there continues to be no material impact on occupancy rates or revenue collections. The resort continues to project to perform well, maintaining strong room rates and steady visitor traffic.”

The land movement, though, has heavily impacted a large area of the city and has put a strain on the city’s finances, partly because of costs associated with maintaining Palos Verdes Drive South and other damaged infrastructure.

Of the nearly $29 million in the city’s Capital Improvement Program, in fact, about $14.8 million, or 52%, is earmarked for landslide improvement projects and Portuguese Bend landslide remediation.

Other funding will go to right-of-way improvement projects at $7 million, sewer and storm drain improvements at nearly $3 million and Abalone Cove sanitary sewer rehabilitation at $3 million, as well as other projects, such as building and park playground improvements.

A proposed plan to track and evaluate landslide spending with progress reports was also approved at the Tuesday council meeting.

Public safety is a concern across the entire city — and is a substantial component of the budget.

The council on Tuesday approved a contract with the Los Angeles Sheriff’s Department at nearly $8.6 million for fiscal 2026, an increase of nearly $411,000 from the previous fiscal year.

Jennifer Schmid, public safety manager, said Rancho Palos Verdes partners with the Los Angeles Sheriff’s Department in a cost-sharing contract with Rolling Hills and Rolling Hills Estates. Palos Verdes Estates, the other city on the Peninsula, has its own police department.

The Rancho Palos Verdes City Council approved a contract with a 5% increase from last year, or nearly $411,000, in part because of a 13% increase in the Liability Trust Fund and a 6.63% increase in the bonus one deputy classification.

“Due to departmentwide staffing shortage of over 1,000 deputies, LASD has instituted a service growth moratorium onto our contract,” Schmid said. “Therefore, we are currently only permitted to maintain or reduce service levels (and) not increase anything on our contract for approximately the next few years.”

Because of the rising costs of the LASD contract, the City Council created the Public Safety Division pilot program more than two years ago, according to the city staff report.

“The ongoing goal of the Public Safety Division pilot program,” the report said, “has been to identify additional city programs and tools that can economically enhance public safety services, independent of the LASD contract, yet in close coordination with Lomita Sheriff’s Station.”

To staff the pilot program, the city hired Schmid in December and a field training officer in May, and the city is recruiting a senior administrative analyst who could begin work in July.

The Public Safety Division has also worked to increase public safety technology by installing mobile automated license plate readers and geographic information systems.

At Tuesday’s meeting, Ramos said that city staffers are working on a “financial sustainability goal.”

“The goal for this project is to do some research on our revenue sources,” Ramos said, “and also some capital review.

“We are working on grants (from) both the local and federal level,” Ramos added. “We’re also going to review suspended taxes and fees. We’re also doing some research on TOT, golf and UUT, franchise fees, storm drain fees, and then finally, from the last direction that received from City Council, we will start reviewing the capital program every 60 days as part of the landslide report for potentially lower the spending in capital.”