1 SPECIAL CITY COUNCIL MEETING - JUNE 3, 2024
Responses to Councilmember Inquiries -
Preliminary FY 2024-26 Proposed Budget
MEASURE U
Question 1:
POSITIONS and CAPITAL PROJECTS FOR POLICE AND FIRE
POLICE - AMOUNT BEING FUNDED BY MEASURE U and FUNDED BY OTHER
SOURCE(S)
Example:
Funded by Measure U: 24 Positions $3,060,000/Capital Projects $2,049,000 Funded by General Fund: 15 Positions $2,045,000/Capital Projects $1,850,000
FIREFIGHTERS - SAME AS ABOVE
Response 1:
Police Funded in FY 2024-25 by:
o General Fund: $33.22M for 146.00 FTE / $8.41M for Operating/ Capital Projects $0 (no capital projects requested for 2024-26) o Measure U: $10.94M for 54.00 FTE / $1.86M for Operating / Capital Projects $0 (no capital projects requested for 2024-26)
Fire Funded in FY 2024-25 by:
o General Fund: $10.76M for 35.00 FTE, $2.69 Operating / Capital Projects $0 (no capital projects requested for 2024-26)
o Measure U: $10.25M for 51.00 FTE / $2.01 for Operating/ Capital Projects $0 (no capital projects requested for 2024-26)
Question 2:
HIRING - HOW LONG DOES IT TAKE FROM START TO FINISH (POLICE AND FIRE)? With and without Academy. From application opening to on-the-job (with breakdown)
Response 2:
Police: Trainees (defined as those who have not yet attended the Basic CA Law Enforcement Academy) will progress through several steps in the application process noted below.
Step Duration
Application Period 3-4 months
Written exam and Physical Agility testing 2 weeks
Interview and Selection Process 2 weeks
Background Investigation 12 weeks
Basic CA Law Enforcement Academy 20 weeks
Field Training Program 20 weeks
2 Fire: A typical Firefighter recruitment will progress through several steps in the application process as noted below. The internal 12-week academy is conducted on a 40-hour schedule converting existing staff to the new schedule. The overall cost for the academy, including the premium pay, overtime for backfill of positions, and materials and supplies is estimated at $180,000.
Step Duration
Application Period 6-8 weeks
Interview and Selection Process 2 weeks
Background Investigation 12 weeks
SMFD Firefighter Academy 12 weeks
Question 3:
DO WE PAY FOR ACADEMY FOR OUR POLICE OFFICERS? FOR OUR FIREFIGHTERS? COST?
Response 3:
Police: Yes, the City of Santa Maria covers the cost of a police trainee to attend a 20- week law enforcement academy with an estimated cost of $5,500 per person. This includes tuition, materials and supplies, equipment, and uniforms.
Fire: The Firefighter recruitment is for those already possessing the Firefighter 1 certificate issued by the State of California or equivalent. There is no external academy required, however SMFD hosts an internal 12-week academy for newly hired firefighters.
Question 4:
HOW MANY FIREFIGHTERS DO WE HAVE?
Response 4:
Current Employee count per classification:
Fire Inspector I – 3
Fire Fighter – 27
ARFF Specialist II – 1
Fire Captain – 19
Fire Engineer – 20
Question 5:
HOW MUCH FIREFIGHTERS MADE LAST YEAR? (Break down # over $100k, over $150k, over 200k)
Response 5:
Based on payroll data for the Fiscal Year 2022-23, 63 personnel in the Fire Department Salary Group made a total of $9,365,936. Of this, 17 made over $100,000; 20 made over $150,000; and 14 made over $200,000.
3 Question 6:
HOW MUCH ARE THE 9 NEW FIREFIGHTERS COSTING WITH BENEFITS? Total cost
Response 6:
The fully loaded cost to the City with benefits is $1,504,500 per year.
Question 7:
OTHER AGENCIES’ BENEFITS FOR POLICE AND FIRE COMPARED TO OURS?
Response 7: See Attached Spreadsheet
MRG Exhibit C - City of Santa Maria Fire Incentives \u0026 Benefit Pay Study - 2023.xlsx
Question 8:
BUDGET GAP IN MEASURE U. PLEASE EXPLAIN. WHAT SALARIES ARE FUNDED FROM GENERAL FUND? CAN YOU SHOW WHAT THE AVERAGE SALARY IS AND
ADD THE BENEFITS WITH THE TOTAL PACKAGE AND WHAT EACH POLICE OFFICER /FIRFIGHTER IN ALL POSITIONS MAKES.
Response 8:
The Budget Gap in Measure U is shown in the Preliminary Budget due to the fact that the same number of personnel and services provided by Measure U in FY 2023-24 is now costing more. Coupled with slower sales tax growth, Measure U will not be able to sustain the same level of service. The City could reduce the level of service or transfer some of the expenditures to the General Fund, which would increase the budget gap in the General Fund.
Average Salary of a Position Supported by Measure U: $90,800 Average Salary and Benefits of a Position Supported by Measure U: $153,300 Average Salary and Benefits of a Police Officer Supported by Measure U:
$167,900
Average Salary and Benefits of a Fire Fighter Supported by Measure U: $146,200
Question 9:
WHAT ARE THEIR WORK SCHEDULES?
Response 9:
Police: The Police Departments work schedule is a 4/10 utilizing a total of 4 shifts to adequately cover 24/7.
Traffic Bureau, Detective Bureau and our Community Service Unit work a 4/10, Monday through Friday, from 7am-5pm. Half of the unit is off on Monday’s and the other half is off on Friday’s.
Fire: Firefighters work a schedule that includes two (2) days working and two (2) days off, followed by two (2) days working and four (4) days off, followed by two (2) days working and two (2) days off, followed by two (2) days working and eight (8) days off. The pattern
4 is then repeated. Every day working is a 24-hour shift, responding to emergency calls from the fire station.
Firefighters work 56 hours a week, 112 hours/biweekly, and 2912 hours/year. This compares to 2080 hours worked in a year for a forty-hour/week equivalent worker.
Question 10:
HOW IS SO MUCH OVERTIME ACCUMULATED?
Response 10:
The following chart shows Overtime Budget vs. Actuals.
Police: Most of the overtime is triggered when either patrol or our Communication Center falls below minimum staffing requirements. Situations that may cause us to fall below minimum staffing levels typically consist of personnel calling out sick, vacation, comp leave, FMLA leaves, worker’s comp leave (Department averages between 7-10 employees out at any given time for varying time periods) and mandated training all of which often create a need for backfill.
Priority investigations outside the scope of patrol (homicide, in-home child molestations, fatal collisions to name just a few) all require immediate attention. These incidents are often reported in the evening or weekends. In those cases, detectives and/or traffic are called out on overtime to investigate.
The following vacancies exacerbate the need for overtime. 2 Dispatchers
14 sworn vacancies. On June 10, we will have 5 officers entering their 20-week Field Training Program with an anticipated completion date in early November 2024. We are not including these 5 officers as vacancies although they will not be solo officers for several months.
2 Records Technicians
2 Police Service Technicians
5 Fire: Fire department staffing is unlike other departments in the fact that staffing levels have been predetermined for a minimum service level to the community. Santa Maria Fire Department’s current minimum daily staffing level is set at 20. This means only 20 firefighters are on duty daily to provide emergency services for the city. The recent Master Plan identified Santa Maria ‘s operational staffing levels falling outside the national and regional ranges. Currently, Santa Maria has .64 firefighters per 1000 population, with the West Coast averaging .92 per 1000 population. This number is according to NFPA Survey of Fire Departments for US Fire Experience.
OT is accumulated when there is a vacancy in staffing. When vacancies are identified, replacements are assigned to maintain minimum daily staffing levels. These replacements are paid at 1.5 his/her salary. Historically, OT has occurred in the recent past due to unfilled positions. 2023 experienced 20,384 hours of OT due solely to these vacant or unfilled positions. This resulted in the field working an additional 849 shift due to the vacancies.
Another cause for OT is the participation in the Master Mutual Aid Agreement, where we commit to help, when available, neighboring agencies to cope with any type of disaster.
The OT that is accumulated during these deployments is reimbursed, however, to the City and paid at the OT rate (including additional apparatus and administrative fees).
Simply stated, OT is directly correlated with vacant positions.
Question 11:
CAN WE LIMIT OR PREVENT THE OVERTIME?
Response 11:
Due to constant staffing, response time, and emergency situations, overtime could not be fully avoided. The public safety departments manage overtime through scheduling and maintaining full staffing.
This would be something that the department would decide based on multiple factors (operational need, requirements both internally and externally with community service needs, and budget).
Police: In a department that runs 24/7 overtime will always be required to meet service demands and keep our community safe. The situations outlined in question #10 above are typically the catalyst for the bulk of overtime.
Fire: When looking at limiting or preventing overtime, I must first ask what problem is trying to be solved?
As stated in the previous question overtime is needed to maintain minimum daily staffing levels when vacancies occur. It is almost impossible to eliminate overtime in the fire service due to its unique staffing model. Overtime can be limited or minimized by addressing, first, the vacant positions. With the recent new-hires, we anticipate
6 Hiring a pool of extra firefighters, in the different ranks to fill positions when vacant, would also minimize OT accumulation. However, these extra firefighters would come with an associated cost. This would reduce OT but cost the City additional funds in the budget.
Any other option to limit or prevent OT would result in decreased service levels to the community. City voters in November 2018 elections voted to extend and enhance Measure U at a one cent rate to support essential city services. This local transactions and use tax within the city of Santa Maria was voted in support with a 74.18% approval rate.
Question 12:
WHAT IS THE RETIREMENT SALARY WE PAY FOR POLICE AND FIRE AFTER RETIREMENT?
Response 12:
Police: Per the current MOU Police 202224.pdf (cityofsantamaria.org), for sworn unit members in the employ of the City prior to July 1, 2011, the City provides the California Public Employees’ Retirement System (CalPERS) 3% @ 50 retirement benefit based on the single highest year retirement (one-year final compensation) retirement formula. The City provides the CalPERS 3% @ 55 retirement benefit for those classic sworn unit members hired on or after July 1, 2011, based on the last 36 months of employment (three-year average highest compensation) retirement formula. The City provides the CalPERS 2.7% @ 55 retirement benefit for all non-sworn unit members in the employ of the City prior to July 1, 2011. The City provides the CalPERS 2% @ 55 retirement benefit for those classic non-sworn unit members hired on or after July 1, 2011, based on the last 36 months of employment (three-year average highest compensation). As defined under the Public Employee Pension Reform Act (PEPRA), public safety “non-classic” employees (aka new members) hired after January 1, 2013, are covered under the CalPERS 2.7% @ 57 retirement benefit, based on the last 36 months of employment (three-year average highest compensation). As defined under PEPRA, miscellaneous “non-classic” employees (aka new members) hired after January 1, 2013, are covered under the CalPERS 2% @ 62 retirement benefit, based on the last 36 months of employment (three-year average highest compensation).
Fire: Per the current MOU LOCAL 2020 .pdf (cityofsantamaria.org), for those unit members in the employ of the City prior to July 1, 2011, the City provides the 3% @ 50 CalPERS retirement benefit based on the single highest year (one-year final compensation) retirement formula. The City provides the 3% @ 55 CalPERS retirement benefit for those classic unit members hired on or after July 1, 2011, based on 36 consecutive months of employment (three-year average highest compensation) retirement formula. As defined by PEPRA, public safety “non-classic” employees (aka new members) hired on or after January 1, 2013, are covered under the CalPERS 2.7% @ 57 retirement benefit, based on 36 consecutive months of employment (three-year average highest compensation).
Question 13:
7 HOW MANY RETIRED POLICE & FIREFIGHTERS DO WE HAVE?
Response 13:
As of the most current CalPERS valuation dated June 30, 2022, the City had the following number of retired employees in the public safety retirement plans.
Fire PEPRA ,1
Fire Tier 1, 57
Fire Tier 2, 0
Police PEPRA, 4
Police Tier 1, 155
Police Tier 2, 1
Question 14:
ARE WE ACTUALLY PAYING FOR 2 DEPARTMENTS? THE ONES ACTIVE/THE ONES RETIRED?
Response 14:
No, while the City pays into retirement system, the City only pays for one operating department for both Police and Fire.
The City is enrolled in the CalPERS pension system. CalPERS requires members to pay into the retirement system throughout the employees’ active employment years. The CalPERS pension system is defined benefit where benefits are guaranteed to employees based on the applicable plans. Any losses in the plans’ assets due to market conditions are absorbed by the member agency, the City. The City’s pension system continues to be underfunded as of the latest valuation dated June 30, 2022. The total outstanding unfunded pension liability is $189 million. The City is required to pay down the unfunded pension liability. CalPERS requires minimum payments to be made toward the unfunded liability per year. The required payments will continue to rise through approximately Fiscal Year 2031-32 based on the current actuarial valuations.
Question 15:
EXPLAIN PENSIONS AND UNFUNDED LIABILITIES
Response 15:
As most cities in the State of California, the City of Santa Maria is a member of the CalPERS pension system. CalPERS offers a defined benefit plan where retirement benefits are based on a formula, rather than contributions and earnings to a savings plan.
Retirement benefits are calculated based on a member's years of service credit, age at retirement, and final compensation (average salary for a defined period of employment).
The funded status of the pension plans is based on the market value of assets relative to the funding target produced by the entry age actuarial cost method and actuarial assumptions adopted by the CalPERS board. During employment with the City, the employees earn or accrue pension compensation. The accrued value of the
8 compensation (Accrued Liability) is measured against the assets in the fund. The difference between the funding target for that year (Accrued Liability) and the value of assets is known as Unfunded Liability if the value of assets is lower than the funding target. As of June 30, 2022, the unfunded liability for the City of Santa Maria was $189 million citywide.
The CalPERS Board has been taking measures over the past decade to stabilize the fund and increase funding levels. CalPERS requires the City to make payments to pay down unfunded liabilities per the CalPERS board adopted policies.
Question 16:
EXPLAIN ENTERPRISE FUNDS & LIST THE FUNDS. EXPLAIN HOW THEY ARE USED.
Response 16:
Enterprise funds are business activities funds where all operating and infrastructure expenditures are paid for by fees charged by the fund. The largest Enterprise Funds at the City are Water and Wastewater and Solid Waste.
ENTERPRISE FUNDS
Enterprise are business activity funds that are funded by fees for services provided by the fund. The fees can only be assessed for the specific service. The City’s major Enterprise Funds account for water, wastewater, solid waste collections and disposal, and transit services. On an ongoing basis, City staff determines the adequacy of the rate structures for each of these enterprises taking into account expected operations, maintenance, and capital costs. The following is a brief overview of the Enterprise Fund revenues and the issues affecting rates. Transit fund is primarily funded by Federal and State sources.
Water Fund
The City is the water service provider within the City’s boundaries, except for a few subdivisions located south of McCoy Lane that receive water from Golden State Water Company. The City’s water supply comes from imported State Water and local groundwater that is blended and distributed throughout the City’s water system. All customers are charged a flat rate based on the size of the water meter serving the property and are also charged a variable rate based on the amount of water used (consumption) each month. This billing system reflects the fixed or flat costs incurred to serve a customer through a meter, as well as the variable cost to supply increasing amounts of water. A rate study that concluded in 2019 helped establish cost-based and equitable water rates for four years (2020-2023). City customers’ combined monthly water and sewer bills remain substantially lower in comparison to other surrounding water and sewer agencies. The water rates allow the City to continue developing the financial resources required to manage operational, maintenance, repair, and replacement costs of the water treatment and distribution systems. In FY 2023-24, the City worked with a third-party consultant to conduct an independent rate study and analysis of the Water Enterprise Fund. The findings of the study helped establish cost-based and equitable rates for City customers in compliance with the Proposition 218 rate setting process.
9 Rates were approved by the City Council on October 17, 2023, and the first of four approved water rate increases were implemented on January 1, 2024.
Wastewater Fund
The City’s wastewater system consists of a sewer collection system and a Wastewater Treatment Plant on Black Road. The City provides all sewage collection and treatment within the City limits, except for limited areas near the Santa Maria Public Airport that have exchange agreements with Laguna County Sanitation District. Residential customers are charged a flat rate for sewer and commercial customers are charged a variable rate. The variable rate depends on the type of business due to the actual discharge into the Wastewater Treatment Plant. Every 100 cubic feet of wastewater is charged an incremental amount based on the business type. The City also operates a septage receiving station that receives and treats septage at the Wastewater Treatment Plant.
Septage sources include local farmers and pumping from septic systems. This program includes a grease recycling program for use by local restaurants. City customers’ combined monthly water and sewer bills remain substantially lower in comparison to other surrounding water and sewer agencies. The sewer rates allow the City to continue developing the financial resources required to manage operational, maintenance, repair, and replacement costs of the sewer treatment and collections system. In FY 2023-24, the City worked with a third-party consultant to conduct an independent rate study and analysis of the Wastewater Enterprise Fund. The findings of the study helped establish cost-based and equitable rates for City customers in compliance with the Proposition 218 rate setting process. Rates were approved by the City Council on October 17, 2023, and the first of four approved water rate increases was implemented on January 1, 2024.
Solid Waste Collection
The City provides mandatory solid waste (trash) collection services for all City residential and commercial customers. Residential customers receive a once-a-week solid waste collection service for 60- or 90-gallon containers and commercial customers receive collection services for Dumpsters from once per week up to six times per week. The City is also required to provide recycling collection, along with green waste/organics collection for all customers. Associated requirements for recycling diversion continue to expand based on mandates implemented and enforced by the State. The Solid Waste Collections Enterprise Fund is a restricted fund that is self-supported by funding all operating and capital expenses through charges (rates) collected for the service. Approved rates reflect costs incurred by the City to provide refuse, recyclable, and organic waste collection services to Santa Maria residents and businesses. The City monitors the health of the Solid Waste Collections Enterprise Fund with a comprehensive rate model. The rate model considers revenue requirements as well as the cost of service to ensure adequate funding for operating and capital infrastructure costs necessary to provide Solid Waste Collections service. In FY 2021-22, the City worked with a third-party consultant to conduct an independent rate study and analysis of the Solid Waste Collections Enterprise Fund. The findings of the study helped establish cost-based and equitable rates for City customers in compliance with the Proposition 218 rate setting process. Rates were approved by the City Council on October 19, 2021, authorizing rate increases through July 1, 2025.
10 Solid Waste Disposal
The Santa Maria Regional Landfill, located at 2065 East Main Street, is operated by the City seven days a week. The Landfill has two sources of revenue: 1) revenue generated from individuals and businesses transporting solid waste disposal loads to the landfill, and 2) revenue generated from disposal charges incurred by the City’s Solid Waste Collection Fund for disposal of loads. The City has begun the design of the future Integrated Waste Management Facility at Los Flores. The future landfill is anticipated to have approximately 90 years of capacity. The Solid Waste Disposal Enterprise Fund is a restricted fund that is self-supported by funding operating and capital expenses through revenues generated at the Santa Maria Regional Landfill (SMRL), which are also referred to as tipping fees. The SMRL is a Class III disposal facility with a current permitted disposal footprint of approximately 247 acres, and a remaining disposal capacity of ten years as of December 31, 2023. In FY 2023-24, the City worked with a third-party consultant to conduct an independent rate study and analysis of the Solid Waste Disposal Enterprise Fund. The findings of the study helped establish a multi-year financial model and tipping fee recommendations to continue to operate the SMRL in a financially responsible manner to: cover operating, maintenance, and capital costs; reflect transfers to restricted reserves to meet regulatory requirements; and maintain a prudent operating reserve balance to ensure adequate cash is available for day-to-day operations and unexpected operating and capital cost increases. Rates were approved by the City Council on December 5, 2023, authorizing rate increases effective January 1, 2024, and January 1, 2025.
Public Transit Fund
Santa Maria Regional Transit (SMRT) is the local fixed-route public transit system for the City of Santa Maria, operating directly out of the City’s Public Works Department. SMRT operates 10 fixed-routes, ADA paratransit service within the City and adjacent unincorporated community of Orcutt to the south and Tanglewood to the east (cumulatively serving 34 square miles); as well as intercity bus service (Breeze) to Lompoc and Solvang/Buellton. Operations and maintenance of the City’s transit vehicles are outsourced to a third party.
SMRT ridership demographics reflect a broad cross-section of the public. These include seniors, persons with disabilities, socially or economically transit-dependent, K-12 students, college students, working professionals, visitors, and other choice riders. Trips are often taken for employment, medical, educational, commercial and social engagements, making the City’s public transit system a vital lifeline service for many in the community.
Like other public transit systems, SMRT is State and Federally subsidized. The Department of Transportation (DOT) Federal Transit Administration (FTA) and the State of California’s Transit Development Act (TDA) contribute significant funding to the City’s transit program. Remaining revenues are generated from transit fares. SMRT is therefore
11 subject to the rules, regulations, and policies of these stakeholders as an Enterprise Fund.
The Transit Fund must therefore reconcile local, regional, State, and Federal rules when implementing its program.
Although the impacts of the COVID-19 pandemic and subsequent challenges have been detrimental to ridership, ridership has already begun and is projected to continue to grow as things begin to “normalize.” The Transit Funds' healthy Unreserved Fund Balance paired with a significant influx of both State and Federal stimulus means that the Transit Fund remains in a strong financial position to weather volatility and market uncertainties.
Breeze Fund
The Breeze Fund accounts for all resources, including State and Federal funds, used to provide Breeze public transit service between Santa Maria and Lompoc, and Santa Maria, Buellton, and Solvang. All activities necessary to provide Breeze services are accounted for in this fund, including, but not limited to, administration, operations, fixed-route, facilities, maintenance, and capital acquisition and construction.
Radio/Technology Fund
The Radio/Technology Fund accounts, and houses in one location, the cost and anticipated revenues associated with the City’s 700 MHz trunked radio communication system, and other technology-related equipment that can be utilized by partnering with other municipalities and school districts.
Landfill Closure/Post-Closure Fund
The Landfill Closure/Post-Closure Fund accounts for the money necessary to close the City’s 247-acre landfill. The City is required by State and Federal laws and regulations to assure that the City will complete the closure and post-closure requirements of its landfill site. The City is required to report a portion of closure and post[1]closure costs as an operating expense. The operation of the landfill requires that the rolling closure of the landfill (closure in phases) continue on an annual basis.
Landfill Closure/Corrective Action Fund
The Landfill Closure/Corrective Action Fund is used for the closure/post-closure corrective action for the Santa Maria Integrated Waste Management Facility (SMIWMF) at Los Flores Ranch, and fund operational and reporting requirements per CalRecycle.
Question 17:
HOW ARE GRANTS WRITTEN FOR ALL DEPARTMENTS?
Response 17:
Each department monitors available grant sources. If a department determines that a project or program need meets the qualifications of a grant, the department develops and submits an application. The City also works with Federal legislative consultant as well as an on-demand grant writing consultant.
Question 18:
12 WHAT ARE THE BIG ITEM ISSUES THAT WE NEED TO PLAN FOR AND COSTS?
SUCH AS WASTEWATER TREATMENT PLANT, GENERAL PLAN
UPDATE, PERCOLATION PONDS PLANS
Response 18:
The following significant projects are proposed to be funded in the four-year Capital Improvement Program developed as part of the FY 2024-26 budget development. Parking Structure Evaluation and Retrofit.
Enhanced Roadway Maintenance – additional General Fund contributions in 2026-
28. Depot Street and Railroad Avenue – Bikeway Project (construction in 2026-28). College Drive – Bikeway Project (construction in 2027-28). East Main Street Rehabilitation (construction in 2027-28). EV Infrastructure Expansion Phase 2 (2026-28).
Transit Administration Building (2025-27).
Remote Transit Facility (2025-26).
BRT Implementation (2026-28).
Pocket Parks (2026-28).
ADA Barrier Removal at Simas Field (2026-27).
Waste Discharge Requirements and Plant Upgrade (2024-28). Design, Permitting, Construction Quality Assurance and Construction of the Integrated Waste Management Facility at Los Flores (2026-28). Construction/Relocation of Fire Station 2 (2026-27).
Fire Department Training Facility (2025-26).
The General Plan Update is fully funded and budget will be carried over until the project is completed.
The list of proposed significant projects over the next four years is not all inclusive of the overall capital improvement needs throughout the City including buildings rehabilitation, roads, and facilities to accommodate future growth.
Question 19:
Another point I would like to hear from others on is paying ongoing costs (wages & benefits) with one-time money, perhaps a definition of one-time money would be good for all of us to understand.
Response 19:
The Financial and Budget Policies contained in the Appendices of the Adopted Budget for Fiscal Years 2022-24 (Proposed Budget for Fiscal.pdf (cityofsantamaria.org)) discuss the current Balanced Budget policy on p. G-3, which states:
“Unless otherwise authorized by the City Council, the City strives to adopt a balanced budget whereas operating revenues are equal to, or exceed, operating expenditures during each year of the two-year budget period. Any increase in expenses, a decrease in revenues, or a combination of the two that results in budget imbalances requires a budget
13 revision, rather than spending unappropriated surpluses or designated reserves to support ongoing operations. Any year-end operating surplus will revert to either unappropriated fund balances for use in maintaining reserve levels set by policy or to the capital projects fund for “one-time-only” General Fund expenditures.
Under this policy, it is allowable for total expenditures to exceed revenues in a given year; however, in this situation, beginning fund balance should only be used to fund capital improvement projects, or other “one-time,” non-recurring expenditures.”
The Government Finance Officers Association (GFOA) best practice on achieving a structurally balanced budget focuses on the financial sustainability of operating funds, like the City’s General Fund and Measure U Fund. Recurring revenues are those that the City can reasonably expect to receive year-after-year, with some degree of predictability.
Examples include property tax and sales tax. It is important to note that some revenues, like sales tax, may have a recurring and non-recurring component to them. For instance, there may be times when a large amount of sales tax is generated by some specific economic activity occurring within the City that is not part of the ongoing economy. That may result in revenues being higher than anticipated, thereby contributing to growth of the City’s “one-time” reserves. Recurring expenditures appear in the budget each year.
Salaries, benefits, materials and services, and asset maintenance costs are common examples. Some expenditures, like salaries and benefits, may also have a non-recurring component to them. For instance, the City has experienced periods where a lot of positions were vacant, thereby generating “one-time” expenditure savings that also contributed to growth of the City’s “one-time” reserves.
There are times when the budget includes expenditures that are non-recurring, or “one- time”, that should be paid for with “one-time” resources, such as reserves. The use of non-recurring, or “one-time” resources, to fund ongoing expenditures, does not support a structural balance. A true structurally balanced budget is one that supports financial sustainability for multiple years into the future with recurring expenditures at a level that the City expects to fund every year with recurring revenues in order to maintain current/status quo service levels.
Question 20:
In simple terms. Provide a chart of what we pay in as part of their benefits package.
Response 20:
Below is a chart showing salary and benefits payments to each of the bargaining groups and non-represented groups in total annual dollars based on proposed FY 2024-25 budget.
14 Question 21:
General Fund budget schedule shows a $15.8M deficit. How much of that amount was previously appropriated for future projects?
Response 21:
The $15.8 M dollars budget deficit is due to the General Fund expenditures for operating programs exceeding the General Fund revenues. None of this dollar amounts were previously appropriated for future projects or is recommended to be appropriated for projects.
Question 22:
Why are there two different total budget amounts? $354.8 (24-25) and $346.4 (25-26) on that same document the amounts are $353.6 (24-25) and $343.2 (25-26).
Response 22:
The correct total aggregated budget amounts are FY 24-25 $354.8m and FY 25-26 $346.4m. The budget document is prepared manually and staff inadvertently did not update the amounts listed on the first page of attachment B.
15 Question 23:
Of the 44.60 FTE increased positions for 24-25 are ARPA positions? Are the ARPA positions that weren’t approved in this budget?
Response 23:
There are no ARPA funds applied to positions in the proposed Fiscal Years 2024-26 budget.
Question 24:
How did staff come up with the 25% from GF for reserves?
Response 24:
The Financial and Budget Policies contained in the Appendices of the Adopted Budget for Fiscal Years 2022-24 (Proposed Budget for Fiscal.pdf (cityofsantamaria.org)) discuss the Fund Balance Reserves on pp. G-5 and G-6. The current adopted policy states:
“The City’s General Fund will endeavor to maintain a minimum unassigned fund balance of at least 25 percent of operating appropriations. These reserves are needed to insulate the General Fund programs and current service levels from large and unanticipated one-time expenditure requirements, a revenue reduction due to a change in State or Federal legislation, and other unforeseen circumstances.
In 2010-11, the City adopted a General Fund Prudent Reserve under Governmental Accounting Standards Board (GASB) Statement Number 54. The prudent reserve amount is $19.8 million…”
The Government Finance Officers Association’s (GFOA) Best Practice on general fund reserves recommends, at a minimum, that general-purpose governments maintain unrestricted fund balance in the general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures (i.e., reserves equal to about 16 percent). However, this 16 percent is only intended to be a baseline. GFOA also recognizes that sizing a reserve requires estimating highly uncertain events, like natural disasters and economic downturns. Reserves will allow the City to address revenue volatility more often than the replacement of an asset that fails unexpectedly, or a response to an extreme event that poses significant threat to life and property, or expenditures for unfavorable lawsuit judgements. Combining these components guides the City to maintain a target of approximately 25 percent of general fund operating appropriations.
It is important to note the prudent reserve calculation has not been updated to reflect 25 percent of operating appropriations as stated in the first sentence since its inception in 2010-11. Staff proposes refreshing the calculation to reflect the appropriate level of reserves based on the current level of appropriations.
16 Question 25:
How much are we saving from adding the Economic Development position?
Response 25: The Economic Development Manager position recommendation is currently being delayed until a comprehensive evaluation of the current Economic Development program is completed by an independent consultant and the results evaluated. This recommendation comes in coordination, and after discussion, with the Economic Development Commission.
Question 26:
List of All Capital Projects with Costs
Response 26:
Proposed CMEP Schedules FY 2024-28.xlsx
Question 27:
PERS Liability – Past and Future Projection Costing Chart (See next page)
17 Response 27:
Data based on latest Actuarial Valuations dated June 20, 2022.
18 Data based on analysis from 2022.
Question 28:
Employee Benefits Listing/Chart by Labor Group
Response 28:
Citywide MOU Benefits - CC Copy.xlsx
Question 29:
The number of citations/fines related to fireworks in the last 2 or 3 days? What are some of the measures we have been putting in place to address illegal fireworks?
Response 29:
The fire department has not written any citations in the last days. We do not have a program in place to send or monitor illegal fireworks. I believe that would be a police or code enforcement matter. We have plans for an aerial craft (same as last year) monitoring the City on the 4th of July to identify illegal firework use. Citations will be sent to addresses identified with the aircraft. A public service announcement (PSA) has been created for publication in English and Spanish.
Question 30:
Please provide the amount spent by each department in the last two years (last budget).
19 Response 30:
Refer to the attached 2021-2026 Expenditure by Department-Fund.pdf
Question 31:
Please provide the amount allocated for each department in the proposed budget. (Please provide a spreadsheet that shows each department's spending in the last 2 years and each department's proposed budget amounts)
Response 31:
Refer to the attached 2021-2026 Expenditure by Department-Fund.pdf
Question 32:
What are the increases or decreases in the budget for each department?
Response 32:
Refer to the attached 2021-2026 Expenditure by Department-Fund.pdf
Question 33:
What are the primary sources of revenue for the city in the 2024-2026 proposed budget?
Response 33:
The chart and table below summarize the primary sources of funding for the operating funds.
20 Question 34:
What measures are included in the proposed budget to support local businesses and economic development?
Response 34:
A coordinated study will be performed for evaluation and proposed recommendations brought back to City Council for consideration.
Question 35:
How much is allocated for education and community services in the proposed budget?
Response 35:
A coordinated study will be performed for evaluation and proposed recommendations brought back to City Council for consideration.
Question 36:
How does the proposed budget address the homelessness issues?
Response 36:
No specific funding is proposed for addressing homelessness at this time. Departments will continue to focus on working with Santa Barbara County, non-profit organizations, and enforcement measures to address issues.
Measure U
Question 37:
How much of the budget (%) is allocated to public safety in the 2024-2026 budget?
Response 37:
Approximately 85% of the FY 2024-25 budget is allocated to the Public Safety category.
Measure U ongoing revenues are lower than the current level of services funded by Measure U due to increases in the cost of doing business. Staff will prepare an analysis
21 to shift a proportion of Measure U funded programs to General Fund to bring the Measure U in compliance with the Council policies and will provide the updated financial information to Council with Quarter 1 Financial Report.
a. What is the percentage of the total budget allocated to the Police Department?
Response: 39.9%
b. What is the percentage of the total budget allocated to the Fire department? Response: 38.1%
What is the total amount of Measure U reserves?
Response: Measure U is projected to have $4,413,648 in unrestricted reserves at the end of FY 2023-24. This fund balance will be fully depleted in FY 2024-26 to balance the proposed budget.
Why do we have reserves in measure U?
Response: Page A-15 of the 2022-24 budget book (Proposed Budget for Fiscal.pdf (cityofsantamaria.org)) notes, “Because Measure U only has one revenue source that is impacted by the health of the economy, and is allocated primarily to fund ongoing staffing, it is imperative to maintain a healthy reserve in the event of an economic downturn.”
City Council has also set a fund balance goal for Measure U at 20% of total appropriations.
Question 38:
Measure U pays for 147 full-time equivalent (FTE) positions. Please list the departments where the 147 FTE are located.
Response 38:
Some corrections were made after the schedules were prepared for the May 21 preliminary budget report. At this time, 146.80 FTE are supported by Measure U, as follows: City Manager’s Office (PEG): 1.00 FTE; Community Development: 7.00 FTE; Library: 8.60 FTE; Recreation & Parks: 24.40 FTE; Fire: 51.80 FTE; Police: 54.00 FTE
Question 39:
Do the 147 FTE positions equate to 20% of the total workforce?
Response 39:
Yes – 147.00 FTE is 20.0% of 733.40 FTE; however, as was noted above, some corrections were made after the schedules were prepared for the May 21 preliminary budget report. At this time, 146.80 FTE is 20.0% of 732.40 FTE.
Question 40:
Why are the expenditures in the General Fund and Measure U combined?
22 Response 40:
Page F-11 of the 2022-24 budget book (Proposed Budget for Fiscal.pdf (cityofsantamaria.org)) notes the General Fund is, “the primary operating fund of the City.
All revenues that are not allocated by law or contractual agreement to a specific fund are accounted for in the General Fund, including Measure U.” The March 2024 Measure U Citizens’ Oversight Committee 2022-23 Annual Report(Attachment A - Annual Report City of Santa Maria Measure U (unaudited) for the Period Ending June 30, 2023.pdf (escribemeetings.com)) notes, “To account for this funding (both revenues and expenses), staff established a separate fund to track Measure U tax proceeds and account for all Measure U-related expenditures with any unspent tax proceeds remaining in the Measure U Fund. However, it should be noted that the Measure U Fund is a part of the General Fund and a subset thereof.” Further, page G-18 of the 2022-24 budget book notes, “The Measure U fund accounts for local transactions and use tax within the City of Santa Maria…This general-purpose tax is used primarily to fund services such as police and fire, recreation and parks, library, and code enforcement. The Measure U Fund is combined with the General Fund for financial reporting purposes.”
Question 41:
Shouldn't measure U be used as a supplemental fund not a combined fund?
Response 41:
Page A-3 of the 2022-24 budget book ( Proposed Budget for Fiscal.pdf (cityofsantamaria.org)) notes, “The City Council’s goal is to maintain services and keep the workforce intact as much as possible. The City is incredibly fortunate to receive $25 million in annual revenue from the enhanced one-cent local Measure U sales tax approved by voters in November 2018. This source maintains many services (and supports 115 positions or 17 percent of the workforce) that the General Fund otherwise could not support.
One Time Savings
Question 42:
The proposed 24-26 biennial budget includes a recommendation to fund one-time items with a projected one-time savings
a. what are those one-time items?
Response 42:
The one-time items in the General Fund are, as follows: $130,000 transferred to the General Liability Fund for an appropriated reserve for contractual and professional services, $1.75 million transferred to the General Liability Fund for an appropriated reserve for liability claims, and $200,000 transferred to the Workers’ Compensation Fund for workers’ compensation facility equipment mitigation. In the Measure U Fund, $25,000 is budgeted to repair and/or replace equipment, fixtures, etc. at the Youth Center.
Additional explanation is included with the list provided in Attachment D – Proposed
23 Supplemental Budget Requests (Attachment D - Proposed Supplemental Budget Requests.pdf (escribemeetings.com)) attached to the May 21 preliminary budget report.
There are other one-time expenditures allocated to projects in the Capital Improvement Program Funds.
b. what are the one-time savings?
Some revenues, like sales tax, may have a one-time component to them. For instance, there may be times when a large amount of sales tax is generated by some specific economic activity occurring within the City that is not part of the ongoing economy. That may result in revenues being higher than anticipated, thereby contributing to growth of the City’s “one-time” reserves. Some expenditures, like salaries and benefits, may also have a one-time component to them. For instance, the City has experienced periods where a lot of positions were vacant, thereby generating “one-time” expenditure savings that also contributed to growth of the City’s “one-time” reserves.
Public Works
Question 43:
What percentage of the budget is dedicated to infrastructure improvements?
Response 43:
Capital, Maintenance & Equipment Projects (CMEPs) account for 16.5% of the two-year budget for 2024-26.
Question 44:
What are the major capital projects included in the budget?
Response 44:
Major CMEPs considered during the 2024-26 budget development include:
Parking Structure Evaluation and Retrofit.
Enhanced Roadway Maintenance – additional General Fund contributions in 2026-
28. Depot Street and Railroad Avenue – Bikeway Project (construction in 2026-28). College Drive – Bikeway Project (construction in 2027-28). East Main Street Rehabilitation (construction in 2027-28). EV Infrastructure Expansion Phase 2 (2026-28).
Transit Administration Building (2025-27).
Remote Transit Facility (2025-26).
BRT Implementation (2026-28).
Pocket Parks (2026-28).
ADA Barrier Removal at Simas Field (2026-27).
Waste Discharge Requirements and Plant Upgrade (2024-28).
24 Design, Permitting, Construction Quality Assurance and Construction of the Integrated Waste Management Facility at Los Flores (2026-28). Construction/Relocation of Fire Station 2 (2026-27).
Fire Department Training Facility (2025-26).
Recreation and Parks
Question 45:
Why do we have such a big maintenance issue in parks?
Response 45:
Park maintenance programs have been under-funded for several years. We are now dealing with the aftermath of underfunding park maintenance.
Question 46:
Did we ask or take on too much of the parks? Did the city create a park system that it cannot afford to maintain?
Response 46:
The park system size is driven by development. The standard in the SMMC is 5 acres of park land per 1,000 residents. The City is currently well under the level required.
Question 47:
How do we prevent the deficit in park maintenance from occurring getting to this situation again?
Response 47:
The City Council will be presented with alternate funding options in the 2025-26 Fiscal Year.
Question 48:
Are other departments in the same situation?
Response 48:
Yes, most City Departments with facilities and equipment to replace/maintenance do not have sufficient funds to maintain these items.
LEAF fund
Question 49:
What is the total amount of reserves in LEAF?
Response 49: The Local Economic Augmentation Fund (LEAF) is projected to have $10,611,648 in unrestricted reserves at the end of FY 2023-24. The proposed budget includes a draw on the reserve in the amount of $8.7 million to close the structural budget gap for the year.
25 Question 50:
What is the total amount of undesignated General Fund reserves?
Response 50:
General Fund is projected to have $8,570,357 in unrestricted reserves at the end of FY 2023-24. This reserve will be fully depleted by the end of FY 2024-25.
a. why is there an undesignated category?
Response: Under the Governmental Accounting Standards Board, Unrestricted fund balance is the amount of fund balance left after determining both non- spendable and restricted resources. The Unrestricted fund balance is the amount of fund balance that a local government, itself, has placed constraints on its use, commonly reported as committed or assigned for a specific purpose, and fund balance that does not have any specific purpose identified for its use, commonly reported as unassigned. While the Unrestricted fund balance includes the committed, assigned, and unassigned classifications, the Unassigned fund balance is that portion that is not committed or assigned by the City Council for a specific purpose.
b. what has happened to the funds in the undesignated category in the past 2 budgets? How was that money spent over the last 4 years? or was it saved? Response: Per Resolutions 2020-63 and 2021-76, a calculation to determine the amount of revenues exceeding expenditures in the General Fund is calculated annually with equal shares being reserved in the General Fund for pensions, transferred to the Local Economic Augmentation Fund, and to the Capital Projects- General Fund.
The unassigned fund balance remained at approximately $10 M since the resolution was adopted. Any amount above $10M has been distributed to fund balance committed for pensions, the Capital Improvement Program Fund, and the Local Economic Augmentation Fund.
Questions from the Podium:
Budget question from podium 5/21/24:
o Question: It doesn’t seem prudent, you’re adding 5 positions to City Attorney’s Office and 8 in the City Manager’s Office – How are we doing this with no money?
26 City Manager’s Office: 6 positions:
Previously Added 23/24 (+4):
2 Administrative Leader for HR division (ERP, fixed term) added in Q2 of 23/24 1 Confidential Technician I/II for HR division (ERP, fixed term) added in Q2 of 23/24 1 Senior Project Manager for IT division (ERP , fixed term) added in Q2 of 23/24
New Requests 24/25 (+3):
1 Confidential Technician I for IT Division
1 Program Leader for HR Division
1 Confidential Technician I/II for HR Division
Clerical Correction (+1):
Fund Admin Leader (CMO Clerk’s Office)
Transfers out (-2) to Risk Budget:
1 Business Leader (Risk Manager)
1 Confidential Techn I/II (Risk)
City Attorney’s Office: 5 positions:
Previously Added 23/24 (+2):
1 Org Leader (Deputy City Attorney)—added in Q2 of 23/24 1 Confidential Technician I/II –added in Q2 of 23/24
New Requests 24/25 (+1):
1 Program Leader (Assistant Risk Manager)
Transfers in (+2) from HR budget:
1 Business Leader (Risk Manager)
1 Confidential Techn I/II (Risk Tech)
Summary Answer: The chart shown in the draft budget shows positions that were added in FY 2023/24 as well as those positions requested for the new budget year to show the total change in positions. The proposed addition for CMO positions for the NEW budget year is 3 positions, and the proposed addition for CAO is 1. These requests were limited to positions considered essential to maintain a strong infrastructure of staffing to support operations for an increased number of staff citywide already on board, and thus were included in the overall budget request.