CITY OF SANTA MARIA
Proposed Amended
FY 2025-26 Budget
JUNE 3, 2025
RECOMMENDATION
Adopt a Resolution approving amendments to the Fiscal
Year 2025-26 Mid-Cycle City Budget, and delegating the
City Manager to implement the same
Financial Planning Process – Two Year Financial Plan
February 2023,
Council Goal Setting
Session
June 2024, Two-
Year Financial Plan
Adoption
June 2025, Mid-
Cycle
FY 2025-26
Budget
Amendment
Budget Process
Council 2024-26 Priorities
New
approach to
economic
development
Provide youth
opportunities
Provide
Public Safety
Resources
Establish a
Staffing Plan
Budget Process
Citywide Proposed Budget
•June 18, 2024:
–FY 2024-25 and FY 2025 -26 Budgets Adopted
•FY 2024-25 adopted as balanced using short -term strategies –Use of one-time reserves from General Fund, Measure U, and Local Economic Augmentation Fund (LEAF)
•FY 2025-26 adopted as unbalanced due to budgeted depletion of General Fund and Measure U reserves in FY 2024 -25
•City Council directed staff to return with long -term budget strategy recommendations to close ongoing budget deficit and avoid relying on use of one -time reserves
FY 2024-26 Adopted Biennial Budget
•General Fund and Measure U Fund Adopted Budgets
FY 2024-26 Adopted Biennial Budget
FUND ANALYSIS – GENERAL FUND & MEASURE U
GENERAL FUND MEASURE U FUND
(in thousands)
FY 2024-25
Adopted
FY 2025-26
Adopted
FY 2024-25
Adopted
FY 2025-26
Adopted
Beginning Fund Balances $ 8,570 $ -$ 4,414 $ -
Revenues 91,813 93,420 26,716 26,886
Cancelled Reserves 8,336 ---
Total Financing Sources $ 108,719 $ 93,420 $ 31,130 $ 26,886 Expenditures (108,719)(109,102)(31,130)(31,443)
Ending Fund Balances $ -$ (15,682)$ -$ (4,557)
Budget Balancing Analysis
•July – August 2024: Budget balancing exercise
–City departments analyzed service level impacts of reductions taken across-the-board;
–Explored revenue options
–Identified $16.7 million, or 14 percent, of operational General Fund appropriations
•Summary of findings presented to City Council on October 1, 2024:
–Tier 1 Reductions: Moderate Impact to Operations
–Tier 2 Reductions: Significant Impacts to Non-Public Safety Services •Tiers 1 and 2 amounted to $4.3 million in ongoing reductions –Tier 3 Reductions: Significant Impacts to Services, Including Public Safety
•Tier 3 amounted to $10.5 million in ongoing reductions •City Manager placed into effect a “hiring chill” policy for the General Fund, except public safety departments
•Previously adopted FY 2025-26 appropriations for all funds totaled $346.9 million
•Proposed Amended Mid-Cycle appropriations total $407.8 million –FY 2024-25 year-end estimates calls for less reserves (use of General Fund reserves for unfunded liability pension payments and draw from Local Economic Augmentation Fund) from $8.3 million to $3.6 million FY 2025-26 Proposed Budget – All Funds
FUND ANALYSIS – ALL FUNDS
(in thousands)
FY 2024-25
Adopted
FY 2025-26
Adopted
FY 2024-25
Estimates
FY 2025-26
Proposed
Beginning Fund Balances $ 261,656 $ 221,488 $ 417,621 $ 288,701 Cancelled Reserves 8,336 -3,607 -
Revenues 315,472 324,672 345,309 337,716
Total Financing Sources $ 585,464 $ 546,160 $ 765,537 $ 626,417 Expenditures (363,976)(346,865)(477,836)(407,797)
Ending Fund Balances $ 221,488 $ 199,295 $ 288,701 $ 218,620
Proposed Budget by Department – All Funds
•Previously adopted FY 2025-26 appropriations for the General Fund totaled $140.6 million; recommended Mid-Cycle appropriations total $147.6 million FY 2025-26 Proposed Budget – General Fund (Including Measure U) FUND ANALYSIS – GENERAL FUND & MEASURE U
(in thousands)
FY 2024-25
Adopted
FY 2025-26
Adopted
FY 2024-25
Estimates
FY 2025-26
Proposed
Beginning Fund Balances $ 12,984 $ -$ 22,236 $ 1,319
Cancelled Reserves --3,607 -
Revenues 126,865 120,307 117,369 121,102
Total Financing Sources $ 139,849 $ 120,307 $ 143,212 $ 122,421 Expenditures (139,849)(140,545)(141,893)(147,556)
Ending Fund Balances $ -$ (20,238)$ 1,319 $ (25,135)
FY 2025-26 Proposed Budget – General Fund (Including Measure U) •Fund balance estimates were updated
•FY 2024-25 year-end estimates result in the full use of General Fund Fund Balance and leaves a balance for Measure U of $1.3 million FUND ANALYSIS – GENERAL FUND & MEASURE U
GENERAL FUND MEASURE U FUND
(in thousands)
FY 2024-25
Adopted
FY 2024-25
Estimates
FY 2024-25
Adopted
FY 2024-25
Estimates
Beginning Fund Balances $ 8,570 $ 10,072 $ 4,414 $ 12,164 Revenues 91,813 91,664 26,716 25,705
Cancelled Reserves 8,336 3,607 --
Total Financing Sources $ 108,719 $ 105,343 $ 31,130 $ 37,869 Expenditures (108,719)(105,343)(31,130)(36,550)
Ending Fund Balances $ -$ -$ -$ 1,319
•Revenue estimates were prepared in February 2025
–Objective, analytical process based on year-to-date trends, prior years’ data, and anticipated one-time adjustments
–Refer to Attachment B for a summary of previously adopted and proposed amended revenues
FY 2025-26 Proposed Budget – General Fund (including Measure U)
GENERAL FUND & MEASURE U REVENUES
(in thousands)
FY 2025-26
Adopted
FY 2025-26
Proposed Variance
Percent
Change
Revenues & Transfers In
Taxes $ 96,989 $ 97,673 $ 684 0.7%
Licenses, Permits & Fines 3,323 3,804 481 14.5%
Revenues from Use of Money & Property 3,131 3,148 17 0.5% Revenues from Other Agencies 574 607 33 5.8%
Charges for Service 7,517 7,059 (457)-6.1%
Other Revenue and Transfers 8,773 8,811 38 0.4%
Total Revenues & Transfers In $ 120,307 $ 121,102 $ 796 0.7%
•Expenditure estimates were prepared in February 2025
–FY 2025-26 appropriations (expenses) reflect known factors such as employee Memoranda of Understanding (MOUs), insurance premiums, and contractual obligations
FY 2025-26 Proposed Budget – General Fund (including Measure U)
GENERAL FUND & MEASURE U APPROPRIATIONS
(in thousands)
FY 2025-26
Adopted
FY 2025-26
Proposed Variance
Percent
Change
Expenses & Transfers Out
Salaries & Benefits $ 103,084 $ 109,943 $ 6,859 6.7%
Services & Supplies 28,956 30,145 1,189 4.1%
Capital & Outside Agencies 1,820 2,451 631 34.7%
Debt Service 267 267 0 0.0%
Transfers 6,418 4,750 (1,668)-26.0%
Total Expenses & Transfers Out $ 140,545 $ 147,556 $ 7,011 5.0%
SUMMARY OF PROPOSED APPROPRIATIONS
PREVOUSLY MID-CYCLE
ADOPTED ESTIMATED ADOPTED PROPOSED INCREASE/
2024-25 2024-25 2025-26 2025-26 (DECREASE)
GENERAL FUND:
Mayor & Council $ 210,716 $ 210,716 $ 227,015 $ 299,358 $ 72,343 City Attorney 1,816,866 1,821,674 1,878,493 1,975,752 97,259 City Manager 11,626,021 11,316,381 11,917,704 12,991,048 1,073,344 Finance 15,203,664 14,193,729 12,229,624 11,451,833 (777,791) Community Development 6,090,768 7,251,939 6,354,137 6,880,630 526,493 Recreation & Parks 12,988,690 12,835,634 13,228,980 13,518,353 289,373 Fire 13,762,535 13,300,896 14,195,037 15,281,873 1,086,836 Police 41,626,826 38,964,623 43,405,481 46,328,230 2,922,749 Public Works 5,392,822 5,447,233 5,665,389 6,213,438 548,049 Sub-Total General Fund $ 108,718,908 $ 105,342,825 $ 109,101,860 $ 114,940,515 $ 5,838,655 MEASURE U FUND:
Police $ 12,835,790 $ 12,869,674 $ 13,568,555 $ 14,161,740 $ 593,185 Fire 11,945,878 17,163,767 12,561,827 13,014,868 453,041 Recreation & Parks 3,071,312 3,254,463 3,152,287 3,216,641 64,354 Library 1,014,709 1,014,709 1,025,970 1,015,154 (10,816) Community Development 824,287 824,287 884,148 953,525 69,377 City Attorney - - - - -
City Manager 1,435,220 1,420,220 247,700 251,401 3,701
Finance 2,757 2,757 2,757 2,757 -
Sub-total Measure U Fund $ 31,129,953 $ 36,549,877 $ 31,443,244 $ 32,616,086 $ 1,172,842 Total General Funds $ 139,848,861 $ 141,892,702 $ 140,545,104 $ 147,556,601 $ 7,011,497 FY 2025-26 Proposed Budget by Department – General Fund •Refer to Attachment C for a summary of previously adopted and proposed amended appropriations by department
•The Full-Time Equivalent (FTE) count reflects those changes in positions implemented by the City Manager and through other City Council actions •Full-time and part-time positions by department are summarized in Attachment F
FY 2025-26 Proposed Budget – Citywide Personnel Overview POSITION ALLOCATION BY FUND – ALL FUNDS
FY 2025-26
Adopted
FY 2025-26
Amended
Fund FTE FTE
General Fund 361.52 361.27
Measure U Fund 137.60 137.60
Enterprise and other funds 233.28 242.73
Total 732.40 741.60
POSITION ALLOCATION BY DEPARTMENT
DEPARTMENT
ADOPTED
2025-26
MID -CYCLE PROPOSED INCREASE,f(DECREASE)
2025-26 2028-26
STATUS POSITIONS FTE POSITIONS FTE POSITIONS FTE
POLICE
FT 200 2C , _ 200 2"30.00 0 0.00
PT 0
.50,
0.00 O 0.00
Total Police 200 200.00 w 200 • 2110.00 0 w 0.00
FIRE
FT
86 86.00 86 56. 0 t ,ut
PT
1 0.80 1 0.80 0
Total Fire 87 86.80 87 r 86.80 r 0 w 0.00
UTILITIES FT 130 130, 0
13.4 134.00
4 4,....
PT
1 0.50
0.00 (1p
Total Utilities I
131 130.80 w 134 • 184.00 3 F 8.20
PUBLIC WORKS FT
•
Total Public Works
74 74.00 69 A9. 0 (5.00;
PT
0.80 1 0.50 0 0.00
75 74.80 70 69.84
(5)r (8.00)
TRANSIT FT
0 •0.00
5 5,.00
PT 0.00
0.00 0.00
Total Transit
O 0.00 8 5.
3 r 8.00
RECREATION & PARKS Ff
66 66.00
72 72.00
6 6.00
PT
35 28.00
28.00 0.00
Total Recreation & Parks I
LIBRARY FT
101 94.00 107 • 100.00 r
• 6.00
17 17.CO 17 17.00
0.00 PT
13 10.40 13 10.40
O 0.00
Total Library 30 27.40 30 27.40 r 0 r 0.0.0
COMMUNITY DEVELOPMENT FT
33 33.00 33 33.00
0.00 PT
O 0.00 u 0.00
O 0.00
Total Community Development
33 33.00 33 r" 33.00 0 • 0.00
CITY ATTORNEY
FT
10 1.0.00 1 u 10.00
O 0.00
PT
O 0.00
0.00 O 0.00
Total City Attorney
10 10.00 10 10.00 0 • 0.00
CITY MANAGER
FT
43,CO
t 43'.00
0.`{f0
PT 1
0,8x0
1. 0.80 0 0.00
Total City Manager
44 43.80 44 43.80 0 • 0.00
FINANCE
FT
31 31.00
31 31.00
PT
1 0.30
1 0.50
Total Finance
32 31.80
32 31.80
0 0.00
TOTAL FULL-TIME (FT)
TOTAL PART-TIME (PT)
GRAND TOTAL
FT 690 690.00 700 700.00 10 10.00
PT 53 42.40 52 41.60 (1) (0.90)
743 732.40 752 741.60 9 9.20
•LEAF is a reserve fund made up of one-time General Fund operating surplus (revenues that exceed expenditures) set-aside at year-end •Amount reserved in LEAF will be limited to 5 percent of General Fund and Measure U operating appropriations
•Intent is to be used as a “gap financing” mechanism during downturns in the local economy.
FY 2025-26 Proposed Budget – Local Economic Augmentation Fund •The City transferred $8.9 million
out of LEAF in FY 2023-24 for
General Fund operations and
capital projects
•Upon reviewing year-end results, it
is anticipated $3.6 million will be
deposited back into LEAF
•Supplemental Budget Requests (SBRs)
–SBRs Requested: 61
–SBRs Recommended: 46
•Recommended SBRs by fund and department are
summarized in Attachment G
•Most General Fund and Measure U requests remain on
hold
•Some Reclassification Requests are recommended to
move forward upon further review by the City Manager
FY 2025-26 Proposed Budget – Supplemental Budget Requests
FY 2025-26 Proposed Budget – Supplemental Budget Requests
SUPPLEMENTAL BUDGET REQUESTS
(in thousands)Ongoing One-Time
General Fund $ 129 $ -
Water Fund 877 8
Wastewater Fund 700 5
Solid Waste Collection Fund 517 1
Solid Waste Disposal Fund 893 5
Library Fund 35 -
Equipment Fund -3,397
Fleet Services Fund 206 -
Assessment Districts --
Public Transit 1,358 -
Insurance Funds – General Liability 1,990 -
Insurance Funds – Workers’ Comp.4,085 -
Total $ 10,790 $ 3,416
•Public Utilities
–Water
•Purchase of Backflow Assemblies for Construction Water Meters •Sewer Upgrades and/or Replacement on West Morrison Street –Wastewater
•Replacement of 9 Digester Gas Sensors @ Wastewater Treatment Plant (WWTP)
•Replacement of Diesel Fuel Tank @ WWTP
–Solid Waste
•Modular Building @ Santa Maria Regional Landfill (SMRL) •Design for Surveillance System to Provide Site Security @ SMRL FY 2025-26 Proposed Amended Budget – Capital, Maintenance, and Equipment Projects
•Public Ways & Facilities
–Re-roof Old Police Department / Enterprise Resource Planning (ERP) Building –Roof Repairs: Recreation & Parks
•Location: Abel Maldonado Youth Center
–Heating, Ventilation, Air Conditioning Replacement for Police Department Computer Center
–Police Department Fleet Opticom
–Citywide Annual Pavement Condition Index (PCI)
–Space Needs Assessment Phase II
–Highway Safety Improvement Project (HSIP) Intersection Improvements •Transit
–Transit Administration Building
–Autonomous Shuttle Station on Jones St.
FY 2025-26 Proposed Amended Budget – Capital, Maintenance, and Equipment Projects
•Leisure & Cultural Services
–Fletcher Park Irrigation Upgrades
–Minor Renewals @ Recreation & Park Facilities / Buildings –Pool House Rehabilitation
–Replace Aging Shares & Sun Screens @ City Parks
–Park Renovations
–RV Hookup for Park Hosts
–Sign / Façade Restoration Program
–Elks Field Lighting
–Parking Lot Rehabilitation @ Elwin Mussell Senior Center FY 2025-26 Proposed Amended Budget – Capital, Maintenance, and Equipment Projects
Proposed Policy Recommendations
Proposed Budget Balancing Policy Recommendations
•Proposed FY 2025-26 General Fund appropriations (including Measure U) are $147.6 million (Increase of $7.0 million)
–Revenues are forecast to fall short of operational and capital expenses by $26.4 million
–The draw of $1.3 million of Measure U reserves leaves a gap of $25.1 million to be closed
•Staff Recommended Actions:
1.Cancel additional General Fund reserves for unfunded liability pension payments: $5.9 million + $25K for Homeless Encampment Cleanup
2.Cancel the balance of LEAF reserves: $22.7 million
o $14.4 million to balance General Fund
o $4.8 million to balance Measure U Fund
o $3.5 million to balance General Fund Capital Projects Fund
ENDING FUND BALANCE – GENERAL FUND
(in thousands)
FY 2024-25
Beginning
FY 2024-25
Ending Variance
Percent
Change
Assigned to:
Unassigned $ 7,650 $ -$ (7,650)-100.0%
Assigned for Carryovers 2,422 -(2,422)-100.0%
Economic Stabilization 19,800 19,800 -0.0%
Post Employment Benefits 6,248 6,248 -0.0%
Unfunded Pension Benefits 13,147 9,959 (3,188)-24.2%
Total $ 49,267 $ 36,007 $ (13,260)-26.9%
Fund Balance – General Fund
ENDING FUND BALANCE – GENERAL FUND
(in thousands)
FY 2025-26
Beginning
FY 2025-26
Ending Variance
Percent
Change
Assigned to:
Unassigned $ -$ -$ -0.0%
Assigned for Carryovers ---0.0%
Economic Stabilization 19,800 19,800 -0.0%
Post Employment Benefits 6,248 6,248 -0.0%
Unfunded Pension Benefits 9,959 4,037 (5,922)-59.5%
Total $ 36,007 $ 30,085 $ (5,922)-16.4%
ENDING FUND BALANCE – MEASURE U FUND
(in thousands)
FY 2024-25
Beginning
FY 2024-25
Ending Variance
Percent
Change
Assigned to:
Unassigned $ 5,824 $ 1,319 $ (4,505)-77.4%
Assigned for Carryovers 6,340 -(6,340)-100.0%
Total $ 12,164 $ 1,319 $ (10,845)-89.2%
Fund Balance – Measure U Fund
ENDING FUND BALANCE – MEASURE U FUND
(in thousands)
FY 2025-26
Beginning
FY 2025-26
Ending Variance
Percent
Change
Assigned to:
Unassigned $ 1,319 $ -$ (1,319)-100.0%
Assigned for Carryovers ---0.0%
Total $ 1,319 $ -$ (1,319)-100.0%
ENDING FUND BALANCE – LEAF
(in thousands)
FY 2024-25
Beginning
FY 2024-25
Ending Variance
Percent
Change
Assigned to:
Unassigned $ 23,076 $ 22,656 $ (420)-1.8%
Total $ 23,076 $ 22,656 $ (420)-1.8%
Fund Balance – Local Economic Augmentation Fund (LEAF)
ENDING FUND BALANCE – LEAF
(in thousands)
FY 2025-26
Beginning
FY 2025-26
Ending Variance
Percent
Change
Assigned to:
Unassigned $ 22,656 $ -$ (22,656)-100.0%
Total $ 22,656 $ -$ (22,656)-100.0%
Next Steps
•Finance Department and all City Departments will engage in a rebalancing initiative that develops a plan to address the structural deficit, entailing:
–Revisiting FY 2024-25 Year-End Estimates
–Vacant Position evaluation: review of persistent vacancies and chilled positions –Departmental budget re-evaluation: review of all revenues and expenses –Financial/Budget Policy Review
–Review Capital Outlay Project expenses that may be held –Revenue generation opportunity evaluation: look into potential revenue - generation initiatives
–Development of short- and long-term rebalancing initiatives that resolve the structural deficit and assist with strategic planning for the future –Establish a City Council ad-hoc committee for the rebalancing initiative. Staff will bring back a request to establish this ad-hoc committee at a future City Council meeting
•Staff plans to return in the fall with an update to the City Council on the plan to move forward
RECOMMENDATION
Adopt a Resolution approving amendments to the Fiscal
Year 2025-26 Mid-Cycle City Budget, and delegating the
City Manager to implement the same