CITY OF SANTA MARIA
General Fund Fiscal Forecast
Update and FY 2024-26 Budget
Balancing Analysis
Oct 1, 2024
RECOMMENDATION
1. Receive General Fund long-term fiscal sustainability forecast update; and
2. Receive staff analysis and recommendations for closing the structural budget gap; and
3. Provide general policy direction to staff
General Fund and Measure U Fiscal Forecast Update
Forecast Update
Revenue trends were updated based on
the Fiscal Year 2023-24 year-and results
and consultants forecast analysis for
sales tax.
3% Salaries & Benefits savings applied
on annual basis.
NOT Conservative approach.
The forecast is not a budget but rather a
planning tool to assess long-term fiscal
sustainability.
Fiscal Year 2023-24 Year-End Unaudited Results
Fiscal Year 2024-25 Fiscal Forecast Fund Balance Use Estimate
Fiscal Year 2024-25 Budget Balancing Analysis
` FY 2024-25
(21,320,273)$
Insurance Fund Transfer 3,330,000$
Measure U CIP 1,285,000$
(16,705,273)$ Ongoing Structural Budget Deficit
FY 2024-25 Structural Budget Deficit
Budgeted Draw on Fund Balances
One-Time Expenditures
General Fund Ongoing Budget Reduction Target
Budget Balancing Analysis: $16.7 million identified as ongoing structural budget deficit. The following reductions would be required by department if all departments took proportionate reduction.
Reductions Analyzed by Departments
Tier 1: Moderate Service Level Impact
Tier 2: Significant Service Level Impact (lower service level and/or deficiencies in operations) Tier 3: Significant Service Level Impact
Revenue Enhancement Options
Revenue Enhancement Options
Revenue Enhancement Option Estimated Revenue Increase Voter Approval Sales Tax 0.5% $13,500,000 Yes, at large
Landscaping District requires further study Yes (impacted parcels) Downtown Improvement District $750,000 Yes (impacted parcels) Transient Occupancy Tax 4% $1,600,000 Yes, at large
Cannabis Tax $300,000-$2,000,000Yes, at large
Parking Fees requires further study No (C ouncil approval) Parcel Tax (specific benefit) requires further study Yes (impacted parcels) Update Recreation & Parks Fees requires further study No (C ouncil approval) Utility User Tax $1,000,000 +Yes, at large
Fire Medical Response Fee $1,000,000 +No (C ouncil approval) Business License Tax Restructure (by volume of sales) requires further study $3M + Yes, at large Recommendations
Staff recommendations
• Staff recommends further analyzing Tier 1 and Tier 2
reductions plan ($4.3 million).
• Staff will return with the Second Quarter Financial Report in February with specific budget amendments in alignment with the Tier 1 and Tier 2 proposed plan.
Staff Recommendations
• Staff recommends moving forward with studying revenue enhancement options.
• Without revenue enhancements, the ongoing structural
budget gap is estimated at $11.5 million after the Tier 1 and Tier 2 budget reductions. This estimate is based on the forecast including projections of salary savings.
Questions?