FOR THE COUNCIL MEETING OF JUNE 20, 2023
COUNCIL AGENDA REPORT
TO: City Council
FROM: City Manager
SUBJECT: Amendments to the Previously Adopted 2023-24 City Budget (Second Year of the Approved Two-Year Budget)
Description:
The City Council will consider making amendments to the 2023-24 mid-cycle City Budget and receive two presentations on two Citywide initiatives: Smart City, Safe City and Neighborhood Connect.
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
RECOMMENDATIONS:
1. Adopt a Resolution approving amendments to the 2023-24 mid-cycle City Budget.
2. Provide policy direction to staff on the launching of two Citywide initiative programs: Smart City, Safe City, and Neighborhood Connect.
BACKGROUND:
Last year (June 21, 2022), the City Council adopted two one -year budgets covering the period from July 1, 2022, to June 30, 2024.
Per past budget practice, staff indicated it would be necessary to revisit the adopted 2023- 24 Budget plan (year two) during the mid -cycle review and to make any appropriate amendments to the Budget based on unforeseen events, changes in the economy, operational impacts from the pandemic, and unanticipated operational needs. Because this is the second-year report, it contains much less detail as compared to the first-year Budget document. This report contains, for the City Council’s consideration, amendments to the City Council Adopted 2023 -24 Budget. The related agenda report addresses personnel requests in more detail.
2 SUMMARY:
The previously adopted 2023 -24 appropriations for All Operating Funds totaled $264.9 million; and the recommended Mid -Cycle 2023 -24 appropriations total is a proposed $276.7 million. Highlights are:
Service levels are largely maintained, there are 34 new full-time positions and one part-time position. Positions that were previously authorized for 2023-24 that have funding restored through the 2023 -24 Mid-Cycle Update are two Police Services Technicians. Also, there is the conversion of the part -time PEG Production Manager to full-time (a 0.20 FTE increase);
General Fund appropriations, excluding Measure U, are $2.0 million more than estimated revenues excluding transfers from the Local Economic Augmentation Fund (LEAF);
The structural deficit is balanced by using $8.95 million from Measure U reserves and the General Fund will receive a $2.02 million transfer from LEAF. The General Fund structural deficit (now in its 14th year) grows marginally from the previously projected $10.83 million to $10.97 million;
Total City appropriations (all funds) are $357.4 million, or $20.5 million more than the previously adopted $336.9 million;
The City is not financially able to approve further requested enhancements other than necessities due to rising ongoing costs;
On a positive note, at the end of 2022-23 the City expects to deposit approximately $7.0 million cumulatively (about one-third each) into its LEAF, its Capital Projects Fund, and its Pension Reserves;
This Budget delivers on the Council’s strategic priorities and fulfills its request for significant additional investment for enhanced road maintenance and other infrastructure. The Fire Station No. 1 expansion is funded with $6 million through the Budget Resolution. In 2023 -24, the City invests $7.55 million, maintaining its two-year commitment to double its funding for local roads by a cumulative $15 million;
The Public Library’s main hours will reopen for Sundays, effective July 9 th, as previously approved.
This mid-cycle Budget acknowledges that the City received approximately $37.2 million in Federal funding from the American Rescue Plan Act (ARPA ) and must spend or obligate these grant funds relatively quickly, within roughly three and one -half years, by December 31, 2024. Pursuant to prior City Council direction , below are the three strategies for ARPA funds: 1. Reimburse costs incurred and revenue lost as a result of COVID-19. 2. Invest this one -time funding in projects that can be completed in the required timeline and increase ongoing revenues or reduce ongoing costs. 3. Strengthen the City’s financial position to prepare for future fiscal emergencies. City staff conducted a robust process to identify and develop projects. This process ensured that City Council strategic guidance set priority for project select ion and that each project meets the U.S.
Treasury rules for eligibility. Subsequently, these projects were brought before the City Council for approval and status updates. The projects that were approved by the City Council are at various stages of planning and execution. 3 Every responsible City budget discussion must address ongoing CalPERS obligations.
Like hundreds of other public agencies across California, the biggest challenge facing the General Fund is soaring pension costs, partly created by investment losses sustained by CalPERS during the Great Recession of 15 years ago, and more recent CalPERS policy changes being phased in over several years. In 2021, CalPERS reduced its assumed rate of return from 7.0 percent to 6.8 percent, effectively increasi ng the employer contribution amount paid by cities to help make up the difference. The City’s CalPERS payment in 2023 -24 is forecast at $23.9 million. For perspective, the City’s CalPERS payment for 2006-07 was $5.4 million. In fact, if CalPERS obligations were a department, it would be the second-largest General Fund department, behind the Police Department’s appropriations. Every dollar paid to CalPERS is a dollar less available for wages and compensation, and operations.
Concerning General Fund revenue s, excluding Measure U, the previously adopted revenues were $87.0 million; the recommended Mid -Cycle 2023 -24 revenue total is proposed to be $90.8 million. Including Measure U, the previously adopted revenues were $113.4 million; the recommended Mid -Cycle 2023-24 revenue total is proposed to be $117.7 million, an increase of approximately $4.3 million.
In the General Fund, excluding Measure U , the previously adopted appropriations were $89.0 million; the recommended Mid -Cycle 2023-24 appropriations total is proposed to be $90.8 million, an increase of $1.8 million. Including Measure U, the previously adopted appropriations were $120.9 million; the recommended Mid-Cycle 2023-24 appropriations total is proposed to be $126.7 million, an increase of $5.8 million.
The City has been drawing from its LEAF since 2008-09. At its peak, the fund is projected to contain $18.9 million in
2022-23. The City
estimates it will deposit
about $2.3 million into the
LEAF in 2022 -23, under a
City Council policy to
maintain and rebuild
reserves. The LEAF
reserve is at a comfortable
level above $10 million,
primarily as a result of
salary savings due to
vacancies as well as
revenues exceeding
projections. As
departments begin to fill
vacant positions, however,
there is conc ern about
whether the LEAF can be maintained at this level. Staff initially projected using $6.1
4 million from the LEAF for 2023 -24 and is now recommending the use of $8.9 million to help balance the 2023-24 Budget which will leave the LEAF balance at $10.1 million as shown in the chart above.
For 2023-24, proposed personnel recommendations bring Citywide authorized staffing totals to 650 full-time and 76 part-time positions, for a total of 726 authorized positions.
In all, 34 new full-time positions and one part-time position are being recommended over previously authorized levels Citywide. The Police and Fire departments comprise 287 full- time positions or 44 percent of the total authorized full-time positions Citywide.
Full-time and part-time positions by department are summarized in Attachment B of this staff report. Attachment B also shows the previously authorized 2023-24 allocations and the personnel changes being proposed in 2023-24.
The City has many more operational needs than it can afford at this time. Staff reviewed 112 supplemental budget requests, of which 63 are recommended for approval totaling $8.7 million . Additionally, 64 project proposals were requested, of which 26 are recommended for approval totaling $9.9 million, in the proposed Budget. Staff may return to the City Council in the first quarter, when revenues are reassessed, to determine whether other budget requests for 2023-24 can be considered.
2023-24 General Fund Revenues
The recommended adjustments for all General Fund revenues, by category, are shown below, followed by a discussion of significant variances:
The increases in the Taxes category include about $1 million in Transient Occupancy Tax (TOT) as travel demand rebounds, $881,000 in sales tax, and $275,000 in property tax.
The City’s top three revenue sources are, in order, sales tax, property tax, and TOT.
Estimated Previously
Actuals Adopted Recommended Proposed
Description 2022-23 2023-24 Adjustments 2023-24
Taxes 67,742,388$ 65,780,291$ 2,485,168$ 68,265,459$ Licenses, Permits & Fines 3,622,754 3,197,050 44,584 3,241,634 Revenue from Use of Money & Property 2,005,139 1,563,513 1,396,000 2,959,513 Revenues from Other Agencies 1,488,408 732,025 (245,539) 486,486 Charges for Service 5,690,216 4,854,298 791,981 5,646,279 Other Revenue and Transfers 7,906,992 10,837,479 (600,762) 10,236,717 Total 88,455,897$ 86,964,656$ 3,871,432$ 90,836,088$ General Fund Revenues
5 2023-24 General Fund Appropriations
As previously mentioned, proposed General Fund appropriations, excluding Measure U, for 2023 -24 are about $90.8 million. The following table presents, by department, the originally proposed 2023-24 General Fund Budget contained in the two-year financial plan (adopted in June 2022), and the Mid -Cycle recommended adjustments to the 2023-24 General Fund Budget.
Variances to General Fund appropriations and noteworthy personnel changes, by department, are explained as follows:
Police Department
Increase appropriations by about $487,000. Funding for two Police Services Technician positions is restored, with one to be hired in July 2023 and one in January 2024. Other Budget changes include recalculation of personnel costs for previously budgeted positions and internal service rates; the creation of an Investigative Specialist I/II series and addition of one position (unfunded) to meet the demand for investigative services, in particular, felony property crimes and allow a path for future growth and succession planning; a software solution for the Concealed Carry Permit Program with an annual cost of $20,000; increased utility budgets of $49,000; and, annual maintenance of $69,000 at the Los Flores Shooting Range.
Fire Department
Reduction in funding by about $ 563,000 is primarily due to changes in personnel and recalculation of personnel costs. Funding for nine Fire Fighter positions was allocated per Staffing for Adequate Fire and Emergency Response (S AFER) Grant requirements in 2022-23 to the General Fund (13 percent) and Measure U (87 percent). In 2023-24 100 percent of the cost is allocated to Measure U.
General Fund Appropriations
Department
Estimated
Actuals
2022-23
As Originally
Adopted
2023-24
Recommended
Adjustments
Proposed
2023-24
Police 32,455,680$ 36,315,649$ 486,695$ 36,802,344$ Fire 11,423,831 11,600,426 (563,414) 11,037,012 Public Works 4,345,207 4,635,807 237,769 4,873,576 Recreation & Parks 10,733,080 11,190,445 1,216,451 12,406,896 Community Development 5,359,269 7,425,921 (804,738) 6,621,183 City Attorney 1,340,437 1,210,074 155,585 1,365,659 City Manager 8,618,400 8,801,576 401,376 9,202,952 Finance 11,647,604 7,571,847 747,712 8,319,559 Mayor & Council 208,431 212,911 (6,004) 206,907 Total 86,131,939$ 88,964,656$ 1,871,432$ 90,836,088$ 6 Department of Public Works
Increase appropriations by about $238,000. The addition of a Business Program Leader for Public Works Operations with funding split between the General Fund, Fleet Services, and Measure A will support the department’s workload. The addition of an Electrician should decrease outsourced electrical contractor costs and provide for routing maintenance as existing infrast ructure and components meet the end of useful life.
Funding of $100,000 for unforeseen facility repairs will avoid adverse impacts on plans for the existing maintenance budget.
Recreation and Parks Department
Increase appropriations by about $ 1.2 million . Majority of the increase, $611,000 is needed to fund higher general liability insurance rates. The addition of a Maintenance Worker I and a $275,000 operating bud get will allow the City to meet the requirement under Senate Bill 1383 to procure annually a quantity of recovered organic waste compost products intended to strengthen California’s green, self -sustaining economy. Funding of $45,000 will allow the Mayor’s Task Force on Youth Safety to purchase necessary equipment, and cover expenses associated with organizing events and outreach efforts.
Funding of $18,000 will allow for repair and/or replacement of electrical assets in the City- owned Town Center East (the mall) parking lot.
Community Development
Decrease appropriations by about $805,000. Most of the decrease is a combination of reductions to general liability insurance of $320,000 and workers’ compensation of $68,000, and $245,000 in Code Enforcement personnel costs which were moved from Measure U to the General Fund last year – this latter action is not needed this fiscal year.
The addition of a Business Program Leader will create the capacity to address workload surrounding the budget, accounting, human resources, and other department operational responsibilities. Funding of $100,000 for plan check reimbursements will allow the Building Division to send development proposals that require structural engineering review to a third-party consultant for review.
City Attorney’s Office
Increase appropriations by about $156,000 to account for the realignment of funding for the City Attorney and Assistant City Attorney positions previously allocated directly to other funds.
City Manager’s Office
Increase appropriations by about $401,000 This is attributed to i ncreased business equipment rental rates in the Information Technology (I.T.) division due to several large value assets added in 2021-22 (the most significant being the CAD/RMS Locution system for the Fire Department). This ongoing expense will allow for the maintenance and replacement of the equipment in the future. Those rental rates more than offset reductions of $505,000 for recalculation of position costs, one-time reductions of $95,000 for liability insurance, and $80 ,000 workers’ compensation cost . Creation of the GIS Analyst classification to focus on easily accessible sophisticated web-based mapping applications to meet the Citywide GIS -related needs, with no fiscal impact. The addition of a Corporate/Executive Leader position (unfunded) will provi de an authorized position for 7 rapidly responding to unanticipated needs that may arise during the year as a result of City Council priorities, an emergency, or required intervention requiring staff augmentation. Funding of $100,000 will provide for a staff development program led by Human Resources that will make employee training active and continuing.
Finance
Increase appropriations by $748,000. Funding of $250,000 will provide resources for limited-term professional services as Finance staff focus on i mplementing a new Enterprise Resource Planning (ERP) system. This increase also reflects an additional $429,000 transfer to the Library Fund to support its operations. This is anticipated to be a one-time occurrence.
2023-24 Measure U:
Measure U is predicted to generate $26.7 million in its fifth year as a one-cent sales tax, which began on April 1, 2019. The City is in a very fortunate position to maintain and enhance public services thanks to this revenue source. Measure U, transactions and use tax, received more than 74 percent voter approval, providing a needed increase above the previous quarter -cent rate. Without Measure U, the City would have faced deeply reduced staffing and programs across departments that the General Fund otherwise could not support.
Measure U advances the City Council’s commitment to all those voters who passed Measure U2018 to improve the community. The goals are to first maintain services and introduce service enhancements. The objectives are to make Santa Maria safer, w ith more youth services, and to improve quality of life. The City Council’s direction is to spend 90 percent on public safety services, five percent on youth services, and five percent on quality-of-life services.
Due to the nature of sales tax, Measure U revenues will remain volatile, expenditures will be revisited annually, and there may be reductions resulting from an economic downturn.
With this recognition, the City Council adopted a reserve policy for Measure U which this proposed budget adheres to.
In total, Measure U revenues directly support 183 of the total authorized full-time and part- time positions Citywide. That is 25 percent of the workforce or about one in every four employees.
The Measure U Fund analysis is depicted in the following table.
8 Variances to Measure U appropriations and noteworthy personnel changes, by department, are explained as follows:
Police Department
Nine Police Officer positions have been restored; however, funding is only restored for two positions at this tim e. Changes in personnel and recalculation of personnel costs resulted in an increase. Funding of $13,500 will provide for employee support services for all sworn and professional staff in the Department ; $25,000 will provide for access control security imp rovements to the Police Department facility; and, $30,500 will allow for the procurement of Crime Lab vehicle moving equipment for evidentiary vehicle processing.
Fire Department
Funding for nine Fire Fighter positions was allocated per Staffing for Adequate Fire and Emergency Response (SAFER) Grant requirements in FY 2022-23 to the General Fund (13 percent) and Measure U (87 percent). In FY 2023 -24 100 percent of the cost is allocated to Measure U. One Business Program Leader position was added in FY 2022- 23 as the Department’s Safety Officer is transferred from the City Manager’s Office to the Fire Department in FY 2023-24. Add one Training Captain. This position will work closely with the Civilian Training Specialist (approved in FY 2022 -23) and under the direction of the Deputy Fire Chief , the Training Captain will be the front-line operational coordinator
MEASURE U FUND ANALYSIS
Estimated
Actuals
2022-23
As Originally
Adopted
2023-24
Recommended
Adjustments
Proposed
2023-24
Beginning Fund Balance 17,407,947$ 15,931,355$ 10,392,527$ 15,931,355$ Projected Revenue 27,079,000$ 26,385,354$ 501,000$ 26,886,354$ Police 12,085,840$ 11,408,242$ 859,491$ 12,267,733$ Fire 11,224,345 15,375,612 2,513,051 17,888,663 Recreation & Parks 3,661,781 3,308,066 32,155 3,340,221 Library 1,065,960 1,089,891 97,936 1,187,827 Community Development 492,566 717,271 245,979 963,250 City Attorney - - - - City Manager 22,500 22,500 166,835 189,335 Finance 2,600 2,600 - 2,600 Total 28,555,592$ 31,924,182$ 3,915,447$ 35,839,629$ Ending Fund Balance 15,931,355$ 10,392,527$ 6,978,080$ 6,978,080$ Toward Reserve Policy 5,377,271
Unrestricted Fund Balance 1,600,809
6,978,080$
9 for all training within the Department. No additional costs beyond salary would be required. The workstation, phone, radio, vehicle, etc. already exist. Six Fire Suppression Personnel (two Fire Captains, two Fire Engineers, and two Fire Fighters) are authorized but unfunded pending the need to fill the positions.
Funding of $200,000 will provide for security cameras for Fire facilities, $245,000 for the design and preliminary engineering of a new Fire Administration Building, and $45,000 to acquire a vehicle for a Fire Prevention Inspector.
Recreation and Parks
Funding of $168,000 will allow fo r the purchase of Axon OSP packages for the City Rangers, which contain a body camera and Taser to assist with safety, recording of contacts with the public, and all other actions conducted by the Rangers.
Library
The addition of two part -time Library Security Officer positions will provide adequate safety for Public Library users and staff.
Community Development/Code Enforcement
The addition of one Code Enforcement Officer will support the continued heavy volume of service requests from community residents including, but not limited to, neighborhood blight, unpermitted construction, graffiti, shopping cart violations, and weed abatement.
City Manager’s Office
The Public, Education, and Government (PEG) Production Manager position is restored to full-time with full funding in Measure U. Funding of $35,000 is also provided to cover operational expenses for the PEG division.
Enterprise Funds:
Aside from the anticipated salary and pension -related increases, the following are some of the other more noteworthy changes from the previously adopted 2023-24 Budget. Total appropriations in the Enterprise Funds are $134.2 million, up $ 6.1 million from the previously adopted 2023-24 Budget.
Water Resources
One Lead Customer Service Technician classification will be created and one position added (unfunded). One Water Supervisor position will be added. Funding of $116,877 will cover increased gas and electric utility costs, $30,000 to lease a modular building for Water Resources staff at the Wastewater Treatment Plant, $220,000 for ongoing costs associated with Groundwater Management Plan litigation, $600,000 for ongoing costs associated with Steelhead litigation, $22,500 for a project-specific sewer study, $212,000 for ongoing rehabilitation of aging infrastructure at the Wastewater Treatment Plant, $294,500 for sludge hauling and disposal, $40,000 for technical support services for SCADA upgrades, $50,000 for an organizational assessment, $75,000 for a water supply capacity analysis, and $40,000 for specialized onsite training.
10 Solid Waste
A net of seven full-time positions are being added: one Lead Utilities Clerk classification will be created (unfunded), one Regulator y Compliance Supervisor, four Solid Was te Equipment Operators, one Solid Waste Equipment Crew Leader, and one Solid Waste Manager. One Solid Waste Collections Supervisor is removed. One Business Program Leader position added in 2022-23 as the Department’s Safety Officer is transferred from the City Manager’s Office to the Utilities Department’s Solid Waste Division in 2023 -24.
Funding of $50,000 will provide for an organizational assessment, $35,000 for maintenance and support fees for existing refuse collections software, $20,000 to meet a regulatory requirement for tarps to provide proper cover at the landfill, $75,000 for onsite training for landfill staff, $25,000 to meet groundwater monitoring requirements, $40,000 for operation and management of the Household Hazardous Waste Facility, and $100,000 for rental of equipment at the Santa Maria Regional Landfill.
Transit
The first and second quarter financial reports authorized shifting the purchase of six replacement Paratransit vehicles ($750,000), two expansion ADA Accessible Supervisory vans ($150,000), and five electric Expansion Buses ($4.9 million) from 2023-24 to 2022-
23. Funding of $3.25 million for the purchase of electric bus fleet replacements reflects the impacts of inflation on prices, $650,000 for two mobile electric vehicle charging units, $580,000 for bus stop improvements, $429,000 for Transit Center Improvements, $300,000 for College St. autonomous shuttle crossing improvements, $250,000 for Transit traffic signal prioritization system support, $175,000 for Transit operations an d safety facility improvements, $75,000 for a remote Transit yard study, and $75,000 for a Bus Rapid Transit study. The City’s Transit operations contract expires on June 30, 2023.
A previously negotiated three -year extension is in the fully executed contr act. The extension reflects the labor -negotiated cost increases passed on to the City, as well as expanded service with up to three additional fixed routes totaling $543,000. Other Budget changes include recalculation of personnel costs for previously budg eted positions and higher general liability insurance rates.
Special Revenue Funds:
The net change in Special Revenue Funds reflects an overall net decrease of about $125,000. The addition of a Streets Maintenance Supervisor (Asphalt) funded through County Measure A will result in dividing the Concrete and Asphalt oversite by assigning one Supervisor to each program. CDBG –Block Grant reflects a slightly lower allocation than previously anticipated. The reduction in Public Access TV reflects a shifting of funding for the PEG Production Manager to Measure U.
Landscape Services, Mitigation and Grant Funds:
There is a net increase of about $90,000 in the Landscape Services, Mitigation, and Grant Funds. The $105,000 increase in Growth Mitigation is attribu table to funding for the design and preliminary engineering of a new Fire Administration Building. The $15,000 11 decrease in Landscape Maintenance Service is largely attributable to the rightsizing of the budget for electric utility costs.
Capital Projects Funds:
Appropriations in the Capital Projects Funds reflect projects deemed necessary to keep operations going or for required maintenance and/or replacement. The $700,000 increase is largely attributable to the implementation of a new Enterprise Resource Planning (ERP) system. This is a multi -year project to replace and upgrade the City’s core suite of software.
Internal Service Funds:
Fleet:
Fleet Services are to increase by about $4.0 million. The primary sources of the increase are due to the procurement of a new ladder truck in the amount of $2.25 million ($1.0 million is currently appropriated in 2022 -23 and an additional $1.25 million is requested for 2023 -24). Funding of $250, 000 will provide for phase I of developing the Electric Vehicle Charging infrastructure needed to meet State requirements for zero emissions fleet purchases starting in 2024. The increase also reflects the impacts of inflation on vehicle prices and the desire to order equipment with sufficient lead time to avoid delays.
Insurance & Workers’ Compensation:
The Insurance & Worker’s Compensation funds primarily consist of insurance and liability coverage. The City is required to maintain certain types of insur ance coverage for different types of liabilities and at specific levels to remain in compliance with various laws. The City must also budget for these insurance coverages based on experience and trends. The major types of coverage that are included here are State Self-Insurance Plan, 4850 Safety Workers’ Compensation, ERMAC Liability Insurance, Property/Earthquake Insurance, Pool Administration Insurance, and Cyber Insurance. Business Program Leader positions added in 2022-23 as Safety Officers for the Fire Department and Utilities Department’s Solid Waste Division are transferred from the City Manager’s Office to those departments in 2023 -24. As such, the City anticipates a decrease in the amount of $118,000 based on the recalculation of personnel costs for previously budgeted positions.
ECONOMIC OUTLOOK:
The economy is slowing, and recession concerns remain, as the tight labor market is cooling in the face of higher interest rates on loans. First quarter gross domestic product decelerated to a weak 1.3 percent as the housing market was impacted and businesses reduced inventories, following the 2.6 percent rate from October through December, and
3.2 percent clip from July through September.
Through early June, the Federal Reserve raised its key rates 10 times in 14 months, aimed at defeating high inflation. Inflation slowed to 4 percent, well below the 9.1 percent rate of June 2022, which was close to a 40-year high. The surge in borrowing costs may 12 send the economy into a recession sometime this year. The housing market is especially vulnerable to higher loan rates.
Nationally, the unemployment rate recently was at a ve ry low 3.4 percent. On an annual basis, 2021 and 2022 were the two best years for job creation on record – following historic job losses triggered by the pandemic. Job openings, however, fell in March to the lowest level in nearly two years.
California’s tax revenues are falling short of expectations, partly because of the State’s highly progressive income tax that relies heavily on high-income taxpayers. Last year, the State budget had close to a $100 billion surplus – more than the budgets of most states.
Now, the State faces a projected deficit of about $31 billion, perhaps higher. The State has a projected $22.4 billion reserve fund, but the Governor has said he may choose to prioritize budget cuts instead of tapping reserves until tax collections are tallied.
The Santa Maria housing market remains strong and recently the sale-to-list price ratio was 99 percent, meaning sellers typically get the asking price. The median selling price was $600,000, compared to $625,000 a year earlier. Inventory remains constrained.
Santa Barbara County’s proposed 2023 -24 operating expenditure budget is a record $1.48 billion, an increase of 6.2 percent over the adopted 2022 -23 plan. The preliminary operating budget includes $1.52 billion in revenues, up $100 million f rom the prior year.
The County proposes to increase its workforce to 4,628, up 162 from last fiscal year. This marks the fifth year in a row that service level reductions are not proposed.
FUTURE ISSUES:
Looking beyond 2023 -24, the City Council needs to brace for added expenses that will outpace added revenues such as workers’ compensation rates and increasing pension costs. Capital project funding will need to be examined as costs of projects are outpacing sources of funding. Previous strategies for maintaining an ongoing balanced budget include holding more vacancies, unfunding vacancies, across -the-board reductions, drawing strategically from reserves, and/or taking other actions. These strategies will need to be considered in the upcoming 2024 -26 two-year budget. Preparation for that plan will begin later this calendar year.
POLICY ISSUES REGARDING COUNCIL ACTION:
Smart City, Safe City (Ciudad Lista Ciudad Segura):
The community has consistently expected the City to take action to enable people to live smarter and safer lives in Santa Maria. The City has done so with many initiatives that align with that vision. Our Smart City, Safe City (SCSC) vision is the culmination of the various technologies and programs prioritized by the City Council. These efforts together help the people in Santa Maria have a smarter and safer quality of life. Tonight, staff is unveiling the proposed messaging including its branding logo and an overview video. A new website is ready to publish.
13 The policy issue before the City Council is whether to launch the SCSC campaign to explain to Santa Marians how all the work of the City enables a smarter and safer today and tomorrow. This includes the website, videos, and directions to staff to proceed with the rollout of the SCSC logo on City documents. The campaign is designed to help meet the needs of our growing community and to become part of the City’s marketing for the recruitment of talent and businesses.
Some of our Smart City, Safe City programs we have been providing for many years, as a result of City Council budget pri orities, while others are new. Smart programs range from apps, public Wi -Fi, high -speed fiber -optic links, computer kiosks, smart meters, electric buses, and more. Safe programs include faster emergency responses, Police text alerts, proactive traffic plans to prevent accidents, increased access to vital services, and ensuring we are better prepared to serve everyone who lives in Santa Maria.
The basis for the Smart City, Safe City logo is an icon that represents the parts of the initiative – technology, and safety – coming together to create a connected community.
Blue and Gold are our City’s colors, and green represents our strong ties to agriculture and the environment. Blue signifies trust, responsibility, and loyalty; Gold connotes happiness, optimism, creativity, and intellect. Green represents harmony, growth, freshness, and energy.
Neighborhood Connect:
Neighborhood Connect is a new, user-friendly web-based tool designed for use by Santa Maria residents and is accessible in both English and Spanish . Successfully tested and ready for launch, this website uses GIS technology and allows residents to report non - emergency issues directly to City staff, the City to better respond and track issues and trends. This Council has expressed interest in its deve lopment to improve customer service and communication. Staff will make a presentation tonight.
The policy issue before the City Council is whether to support a launch Citywide and to fund up to $100,000 in outreach and ramp up resources to support capacity to address a growing number of service requests.
Neighborhood Connect has undergone thorough and successful testing. Staff members have actively participated in the testing process and are fully prepared to manage the reports. Residents who tested the s ystem have expressed their satisfaction, finding it user-friendly, and eagerly anticipate using it for real issue reporting. All communication and comments regarding the issue are handled within the Neighborhood Connect system, providing a centralized database for future reference.
Alternative(s)
The City Council could proceed without these recommended mid -cycle Budget adjustments and continue with the adopted 2023-24 Budget.
14 Environmental Review
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Fiscal Considerations
Looking beyond 2023-24, the City Council needs to again exhibit strong fiscal discipline and prepare for increased expenses and inflationary pressures that will outpace revenues, such as insurance premiums and increasing pension costs. Successful past strategies in clude leveraging reserves to minimize the service delivery impacts to the public and realizing additional expenditures savings from vacant positions. Santa Maria’s growing population will demand additional services. These strategies will need to be part of the upcoming 2024-26 Budget.
Impact to the Community:
Adoption of the above-recommended amendments to the 2023-24 City Budget will enable the maintenance and enhancement of municipal services as directed by voters.
Accordingly, staff intends to continue to provide City residents and businesses with the most efficient and cost -effective municipal services possible and continue to adhere to high standards of exceptional service to the community.