CITY OF SANTA MARIA
Proposed 2024-26 Budget
Budget Public Hearing and
Adoption
June 18, 2024
RECOMMENDATION
1) That the City Council receive a presentation on the
proposed Fiscal Year 2024-26 Budget; and
2) Hear Public Testimony on the proposed budget; and
3) Adopt a Resolution adopting the budget for fiscal years 2024-26, adopting policy actions, and delegating the City Manager to implement the same.
Budget Adoption Process
February 19,
Council Goal
Setting
Session
May 21,
Preliminary
Budget
Hearing
June 3,
Special
Session
Budget
Review
June 18,
Budget
Public
Hearing and
Adoption
Budget Process
Council 2024-25 Priorities
New
approach to
economic
development
Provide youth
opportunities
Provide
Public Safety
Resources
Establish a
Staffing Plan
Budget Process
Citywide Proposed Budget
Budget Overview (Uses)
General Fund and Measure U
Fiscal Year 2024-25 General Fund budget
requires draw on reserves in the amount of
$21.3 million.
FY 24-25 Proposed Budget - Draw on Reserves
General Fund Measure U LEAF
Estimated Beginning
Balance $ 8,570,357 $ 4,413,648 $ 10,611,648 Use of Reserves $ 8,570,357 $ 4,413,648 $ 8,336,268 Ending Undesignated Fund
Balance $ - $ - $ 2,275,380 Proposed Budget Balancing for FY 24-25
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
Proposed Policy Recommendations
Proposed Budget Balancing Policy Recommendations
1. Determine sustainable ongoing expenditures level for the General Fund and Measure U Fund and engage departments to propose recommended modifications to the services and programs to restructure and close the budget gap by the end of 2024-2025.
2. Initiate revenue measure feasibility analysis. Staff recommends approval of $100,000 in addition to the proposed budget for this effort to engage a consultant.
3. Study the current economic development program to ensure the economic development efforts are closely aligned with the City Council’s policies and goals.
4. Initiate regular evaluations and updates to Citywide fees to ensure full cost recovery.
5. Study alternative funding sources to fund the City’s future growth (i.e. improve the current Landscape District model), and community facilities districts to meet the needs.
6. Fund a 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. Update of the General Fund Prudent Reserve will occur annually based on 25 percent of operating appropriations. Should the prudent reserve commitment be used, and its’ level falls below the minimum amount, the goal is to replenish the fund within two fiscal years.
4. Set reserves for internal insurance funds to appropriately fund rising insurance premiums, fund at levels established by actual analysis for claims and liabilities and set aside self- insurance reserves for uninsurable assets.
5. Memorializes the purpose of the LEAF as a reserve fund established in 2000-2001 to be used as the primary financing mechanism to address any potential revenue shortfalls during times of economic downturns or severe State action, so as not to significantly impact the operating budget and service levels of the General Fund.
RECOMMENDATION
Adopt a Resolution adopting the budget for fiscal years 2024-26, adopting policy actions, and delegating the City Manager to implement the same.
Reserve
Levels
Current Level of Reserves:
General Fund FY 2023-24 FY 2024-25 FY 2025-26
Economic Stabilization $ 19,800,000 $ 19,800,000 $ 19,800,000 OPEB $ 6,248,027 $ 6,428,027 $ 6,428,027
Pensions $ 13,188,076 $ 13,188,076 $ 13,188,076
Measure U $ 4,413,648 $ - $ - LEAF $ 10,611,648 $ 2,275,380 $ 2,275,380
Reserves Required by Policy:
General Fund 2023-24E 2024-25 2025-26
Economic Stabilization $ 19,800,000 $ 24,647,725 $ 25,532,202 OPEB $ 6,248,027 $ 6,428,027 $ 6,428,027
Pensions $ 13,188,076 $ 13,188,076 $ 13,188,076
Measure U $ 4,413,648 $ 5,976,960 $ 6,039,618
LEAF $ 10,611,648 $ 6,423,785 $ 6,616,345
Difference:
General Fund 2023-24E 2024-25 2025-26
Economic Stabilization $ - $ 4,847,725 $ 5,732,202 OPEB $ - $ - $ - Pensions $ - $ - $ - Measure U $ - $ 5,976,960 $ 6,039,618 LEAF $ - $ 4,148,405 $ 4,340,965