CITY OF SANTA MARIA
Proposed 2024-26 Budget
Preliminary Budget Presentation
May 21, 2024
Introduction
Budget Process
Economic Indicators
Proposed Budget Overview
General Fund and Measure U
Enterprise Funds
Supplemental Budget Requests
Capital and Maintenance Program
Policy Recommendations
Department Presentations
Council Questions and Deliberation
Budget Process
November: prepare
financial forecasts
November: Department
Directors Forum
December – February:
Departments Prepare
Budgets
February – Council Goal
Setting Session
February – May:
Preliminary Budget
Preparation
June – Council Budget
Adoption
Budget Process
Budget Process
Council 2024-25 Priorities
New
approach to
economic
development
Provide youth
opportunities
Provide
Public Safety
Resources
Establish a
Staffing Plan
Budget Process
Economic Indicators
Economic Indicators - US
Source: UCSB Econ
Forecast
Economic Indicators –US
Source: UCSB Econ
Forecast
Economic Indicators - US
Source: UCSB Econ
Forecast
General Fund Tax Revenue Performance
General Fund Tax Revenue Performance
General Fund Tax Revenue Performance
Citywide Financials
Charges for
Service
$106.2 M
41.0%
Taxes
$95.4 M
36.8%
Revenues from
Other Agencies
$31.2 M
12.1%
Other Revenue
and Transfers
$16.8 M
6.5%
Rev. from Use
of Money &
Property
$5.7 M
2.2%
Licenses, Permits &
Fines
$3.7 M
1.4%
FY 2024-25
Charges for
Service
$112.2 M
42.1%
Taxes
$97.0 M
36.4%
Revenues from
Other Agencies
$30.6 M
11.5% Other Revenue
and Transfers
$17.1 M
6.4%
Rev. from Use
of Money &
Property
$5.7 M
2.2%
Licenses, Permits &
Fines
$3.7 M
1.4%
FY 2025-26
Proposed Budget - Citywide Sources
Salaries &
Benefits
$129.9 M
36.6%
Services &
Supplies
$107.2 M
30.2% Capital &
Outside
Agencies
$93.2 M
26.3%
Transfers
$20.8 M
5.8%
Debt Service
$3.9 M
1.1%
FY 2024-25
Salaries &
Benefits
$136.9 M
39.5%
Services &
Supplies
$103.9 M
30.0% Capital &
Outside
Agencies
$84.2 M
24.3%
Transfers
$17.6 M
5.1%
Debt Service
$3.9 M
1.1%
FY 2025-26
Proposed Budget - Citywide Uses
Proposed Budget
CITYWIDE BUDGET SUMMARY - OPERATING
PROPOSED FY 2024-26 BIENNIAL BUDGET
FY 2024-25 FY 2025-26
Revenues & Transfers In
Taxes $95,426,552 $96,988,610
Licenses, Permits & Fines 3,695,334 3,693,334
Revenue from Use of Money & Property 5,737,810 5,737,810 Revenues from Other Agencies 31,224,790 30,610,922
Charges for Service 106,195,604 112,198,334
Other Revenue and Transfers 16,810,095 17,086,644
Total Revenues & Transfers In $259,090,185 $266,315,654 Expenditures & Transfers Out
Operating Programs $203,687,594 $209,806,806
Capital & Outside Agencies 65,479,856 61,650,602
Debt Service 3,889,012 3,892,511
Transfers 17,774,375 14,613,913
Total Expenditures & Transfers Out $290,830,837 $289,963,832 Net Operating Budget $(31,740,652) $(23,648,178)
2024-25 Budget by Function – Operating Funds
$290.8 Million
Utilities
$118.3 M
41.9%
Public Safety
$79.9 M
28.3%
General
Government
$36.5 M
12.9%
Public Ways &
Facilities
$24.2 M
8.6%
Leisure & Cultural
Services
$23.4 M
8.3%
Police
27.2%
Utility
17.8%
Recreation & Parks
12.8%
Fire
11.8%
Public Works
10.2%
City Manager
6.2% Community
Development
4.5%
Finance
4.3%
Library
3.7%
City Attorney
1.4%
2024-25 Proposed Staffing
734.60 Full-Time Equivalent (FTE)
Personnel Costs
$0
$50,000
$100,000
$150,000
$200,000
$250,000
2023-24 2024-25 2025-26
Average Cost of a Position
Misc. Fire Police
CalPERS Pay Down Unfunded Liabilities
General Fund and Measure U
2024-25 General Fund Revenues & Transfers In
$91.8 Million
Taxes
$68.9 M
75.0%
Other Revenue
and Transfers
$8.8 M
9.6%
Charges for
Service
$7.3 M
7.9%
Licenses,
Permits & Fines
$3.3 M
3.6%
Rev. from Use
of Money &
Property
$3.0 M
3.2%Revenues from
Other Agencies
$0.6 M
0.6%
2024-25 General Fund Appropriations
$107.6 Million
Salaries &
Benefits
$72.3 M
67.2%
Services &
Supplies
$24.2 M
22.4%
Transfers Out
$10.0 M
9.3%
Capital & Outside
Agencies
$0.9 M
0.8%
Debt Service
$0.3 M
0.2%
Proposed Budget General Fund and Measure U Fund Analysis GENERAL FUND PRELIMINARY BUDGET FY 2024-26
($ IN MILLIONS)
FY 2021-22
Actual
FY 2022-23
Actual
FY 2023-24
Projected
FY 2024-25
Preliminary
FY 2025-26
Preliminary
Revenues $88,988,466 $87,607,269 $90,311,058 $91,812,283 $93,420,360 Expenditures 72,085,139 80,356,453 91,812,621 107,648,989 108,196,992 Surplus/(Deficit) $16,903,327 $7,250,816 $(1,501,563) $(15,836,706) $(14,776,632) MEASURE U PRELIMINARY BUDGET FY 2024-26
($ IN MILLIONS)
FY 2021-22
Actual
FY 2022-23
Actual
FY 2023-24
Projected
FY 2024-25
Preliminary
FY 2025-26
Preliminary
Revenues $25,502,203 $27,104,495 $25,881,016 $26,716,305 $26,886,354 Expenditures 19,859,496 27,465,273 38,572,436 31,707,856 32,034,083 Surplus/(Deficit) $5,642,706 $(360,778) $(12,691,420) $(4,991,551) $(5,147,729) Beginning Fund Reserves $11,823,140 $17,465,846 $17,105,068 $4,413,648 $(577,903) Net Change in Fund Balance 5,642,706 (360,778) (12,691,420) (4,991,551) (5,147,729) Ending Unallocated Reserves $17,465,846 $17,105,068 $4,413,648 $(577,903) $(5,725,632) Proposed Governmental Activity Fee Increases
SERVICE
TOTAL
FEE
REVENUE
TOTAL
SERVICE
COST
TOTAL
PROFIT /
(SUBSIDY)
PCT .
RECOVERY
FROM FEES
POSSIBLE
NEW
REVENUE
ACTUAL SUGGEST
COMMUNITY DEVELOPMENT $5,793,777 $6,876,147 $(1,082,370) 84.3% VAR $1,357,500 PUBLIC SAFETY 1,570,121 1,857,278 (287,157) 84.5% VAR 205,100 UTILITY SERVICES 360,068 283,060 77,008 127.2% VAR 1,600 ADMINISTRATIVE SVCS 1,150,846 1,580,909 (430,063) 72.8% VAR 125,500 $8,874,812 $10,597,394 $(1,722,582) 83.7% $1,689,700
FY 24-25 Proposed Budget - Draw on Reserves
General Fund Measure U LEAF
Estimated Beginning
Balance $ 8,570,317 $ 4,413,648 $ 10,611,648 Use of Reserves $ 8,570,317 $ 4,413,648 $ 7,844,252 Ending Undesignated Fund
Balance $ - $ - $ 2,767,396 Proposed Budget Balancing for FY 24-25
Measure U
Measure U
Net of Carryovers
Enterprise Funds
ENTERPRISE FUNDS BUDGET SUMMARY - OPERATING
PROPOSED FY 2024-26 BIENNIAL BUDGET
Revenue Expense Surplus / (Deficit)
FY 2024-25
Water Resources $61,409,997 64,104,984 $(2,694,987)
Solid Waste $37,522,241 54,158,337 $(16,636,096)
Transit $23,596,160 15,637,858 $7,958,302
Radio $1,729,459 839,097 $890,362
FY 2025-26
Water Resources $65,734,148 77,216,235 $(11,482,087)
Solid Waste $39,041,143 37,852,164 $1,188,979
Transit $23,645,508 16,231,834 $7,413,674
Radio $1,729,459 872,572 $856,887
Supplemental Budget Requests
2024-25 2025-26
Fund Name Ongoing One-Time Ongoing One-Time
General $2,779,450 $2,080,000 $3,054,450 -
Water $773,050 $406,240 $499,800 $400,000
Wastewater $749,100 - $709,350 -
Solid Waste Collection $413,500 $127,300 $408,000 -
Solid Waste Disposal $162,700 $5,250 $185,700 -
Library $20,000 - $35,000 -
Measure U - $25,000 - $25,000
Radio Enterprise $58,600 - $58,600 -
Northwest Landscape
District - - - -
Public Transit - $1,131,500 - $708,000
Measure A $540,100 - $540,100 -
Insurance – General
Liability $488,800 $3,530,000 $881,100 $400,000
Insurance – Workers’
Compensation -$1,234,100 $200,000 -$1,067,500 -
Total $4,751,200 $7,505,290 $5,304,600 $1,533,000
Proposed Supplemental Budget Requests Summary
Supplemental Budget Requests Staffing
Fund # Full-Time-Equivalents (FTE)
General Fund 8.74
Water Fund 1.23
Wastewater Fund 1.24
Solid Waste Collection Fund 1.49
Solid Waste Disposal 0.25
Library 0.2
Northwest Landscaping District 1
Measure A 3
Insurance Funds -0.34
See Attachment D for details
Council Salaries Discussion
• On June 20, 2023, the City Council gave direction to staff to revisit City Council salaries during the 2024-2026 City Budget hearing at the June 20th, 2024, meeting
• Council may consider Council salary adjustments
Capital Improvement Program
FUNDING SOURCES AND USES
Proposed
FY 2024-25
Proposed
FY 2025-26
Funding Sources
Capital Projects – General Fund $3,507,850 $2,849,658
Measure U Fund 1,285,000 20,000
Gas Tax & Transportation Development Act Fund 5,366,458 5,066,458 Growth Mitigation Fund 8,167,000 4,952,720
Residential Development Tax Fund 500,000 500,000
Measure A Fund 2,496,908 2,501,474
Public Transit Fund 5,120,000 6,080,000
Water Fund 5,306,060 8,363,160
Wastewater Fund 4,242,140 14,028,480
Developer / Grant Street Projects Fund 1,977,000 6,818,000 Fleet Services Fund 5,902,133 1,105,247
Solid Waste Disposal Fund 16,739,680 -
Solid Waste Collection Fund 1,251,400 1,198,820
Quimby-Park Acquisition & Development Fund 150,000 150,000 Northwest Landscape District Fund 200,000 -
Total Funding Sources $62,211,629 $53,634,017
FUNDING USES
Proposed
FY 2024-25
Proposed
FY 2025-26
Category
Public Safety $3,046,000 $ 265,000
Public Utilities 36,760,413 27,308,427
Public Ways & Facilities 14,705,216 18,635,590
Public Transit 5,120,000 6,080,000
Leisure & Cultural Services 1,130,000 1,345,000
General Government 1,450,000 -
Total Funding Uses $62,211,629 $53,634,017
Proposed Policy Recommendations
Proposed Budget Balancing Policy Recommendations
1. Allocate $100,000 for consulting services to initiate feasibility study for revenue measures.
2. Establish Economic Development Program.
3. Continue to update Citywide Fees including Governmental Activity Fees and Growth Mitigation Fees.
4. Determine sustainable ongoing expenditure levels for the General Fund and Measure U, engage departments to propose recommended modifications to the services and programs to restructure and close the budget gap by the end of FY 2024-25.
5. Fund Citywide Salaries and Benefits Compensation Study in the amount of $125,000.
Proposed Financial Policies Modiifcations Recommendations
1. Set a target level of reserve in the Local Economic Augmentation Fund (LEAF) at 5 percent of the General Fund and Measure U annual ongoing (excluding Capital Expenditure Program) operating appropriations. The draw from fund balance beyond the 5 percent threshold would require Council approval in alignment with Council set policy for the use of the LEAF.
2. Add cost recovery policy identifying principals for 100 percent user fee recovery unless approved otherwise based on Council policy determination for the public benefit.
3. Set reserves for internal insurance funds to appropriately fund rising insurance premiums, fund at levels established by actuarial analysis for claims and liabilities, and set-aside self-insurance reserves for uninsurable assets.
Department Presentations
Other Issues/Questions
• Council Questions
• Public Comment
• Council Deliberation
• Direction to Staff
• Measure U is a local transactions and use tax within the City of Santa Maria. City voters in the November 2018 election (74.18 percent majority in favor) extended and enhanced Measure U at the one-cent rate, to support essential City services. Previously, 64.95 percent of City voters initially approved Measure U in the June 2012 election, enacting a one-quarter-cent general transactions and use tax. The City’s overall sales tax rate increased from 8.00 percent to 8.75 percent.The tax changed from 0.25 percent to 1.00 percent effective April 1, 2019(City Attorney's Analysis).