CITY OF SANTA MARIA
Fiscal Year
2026-28 Biennial Budget
Adoption
JUNE 16, 2026
RECOMMENDATION
Receive a presentation on the Fiscal Year (FY) 2026-28
Biennial Budget, and adopt a Resolution adopting the
budget for fiscal years 2026-28, adopting policy actions, and delegating the City Manager to implement the same.
(Introduction of the hearing was held on June 2, 2026)
Citywide Proposed Final Budget
Proposed Operating Budget
Refer to Proposed Budget Book pp. 81 & 85
CITYWIDE BUDGET SUMMARY - OPERATING
PROPOSED FY 2026-28 BIENNIAL BUDGET
FY 2026-27 FY 2027-28
Revenues & Transfers In
Taxes $96,748,160 $98,247,335
Licenses, Permits & Fines 5,615,362 5,615,362
Revenue from Use of Money & Property 3,668,927 3,678,927 Revenues from Other Agencies 11,358,234 11,609,663
Charges for Service 11,813,522 11.873.522
Other Revenue and Transfers 21,443,145 14,243,022
Enterprise Fund Revenues 133,721,322 133,849,144
Total Revenues & Transfers In $284,368,672 $279,116,975 Expenditures & Transfers Out
Public Safety $83,548,707 $85,230,007
Utilities 127,350,165 164,326,758
Public Ways & Facilities 32,237,987 29,791,685
Leisure & Cultural Services 20,590,295 20,840,668
Community & Economic Development 8,900,951 9,029,972
General Government 31,003,905 31,274,738
Total Expenditures & Transfers Out $303,632,010 $340,463,828 Net Operating Budget $(19,263,338) $(61,346,853)
Enterprise Fund
Revenues
47.6%
Taxes
34.5%
Other Revenue
and Transfers
7.6%
Charges for
Service
4.2%
Revenues
from Other
Agencies
4.0%
Licenses, Permits
& Fines
2.0%
FY 2026-27 Sources
Utilities
43.2%
Public
Safety
28.3%
Public Ways
& Facilities
10.9%
General
Government
10.5%
Leisure &
Cultural
Services
7.0%
FY 2026-27 Uses
Proposed Budget Citywide Uses
Refer to Proposed Budget Book pp. 105-108
CITYWIDE BUDGET SUMMARY - OPERATING
PROPOSED FY 2026-28 BIENNIAL BUDGET
FY 2026-27 FY 2027-28
Expenditures & Transfers Out
Salaries & Benefits $134,492,270 $137,381,318
Services & Supplies 169,699,565 194,031,613
Capital & Outside Agencies 36,469,601 74,606,035
Debt Service 3,890,262 3,625,350
Transfers 23,490,266 15,676,643
Total Expenditures & Transfers Out $368,041,964 $425,320,959 Services &
Supplies
46.2%
Salaries &
Benefits
36.6%
Capital & Outside
Agencies
9.9%
Transfers
6.2%
Debt Service
1.1%
FY 2026-27 Uses
Services &
Supplies
45.6%
Salaries &
Benefits
32.3%
Capital &
Outside
Agencies
17.5%
Debt
Service
3.7%
Transfers
0.9%
FY 2027-28 Uses
Police
28.1%
Utility
19.2%
Recreation &
Parks
12.9%
Fire
12.3%
Public Works
9.9%
City
Manager
4.9%
Community
Development
4.4%
Finance
3.6%
Library
3.4%
City
Attorney
1.3%
CITYWIDE BUDGET SUMMARY - PERSONNEL
PROPOSED FY 2026-27 BUDGET
FY 2025-26 FY 2026-27 Change
Department
City Attorney’s Office 10.00 9.00 (1.00)
City Manager’s Office 43.80 34.80 (9.00)
Finance 31.80 25.00 (6.80)
Community Development 33.00 31.00 (2.00)
Library 27.40 23.60 (3.80)
Recreation & Parks 100.00 90.60 (9.40)
Fire 86.80 86.80 -
Police 200.00 198.00 (2.00)
Public Works 74.80 70.00 (4.80)
Utilities 134.00 135.00 1.00
Total Budgeted FTE 741.60 703.80 (37.80)
Proposed Personnel
Refer to Proposed Budget Book pp. 161-163
Proposed General Fund Budget
Refer to Proposed Budget Book pp. 62-65, 80 & 82
Taxes
65.1%
Other Revenue and
Transfers
16.1%
Charges for
Service
10.2%
Licenses,
Permits & Fines
4.9%
Rev. from Use
of Money &
Property
3.1%
Revenues from
Other Agencies
0.6%
FY 2026-27 Sources
Salaries &
Benefits
69.0%
Services &
Supplies
25.7%
Transfers
Out
4.3%
Capital &
Outside
Agencies
0.8%
Debt
Service
0.2%
FY 2026-27 Uses
CITYWIDE BUDGET SUMMARY – GENERAL FUND
PROPOSED FY 2026-28 BIENNIAL BUDGET
FY 2026-27 FY 2027-28
Revenues & Transfers In
Taxes $70,110,840 $71,077,269
Licenses, Permits & Fines 5,245,362 5,245,362
Revenue from Use of Money & Property 3,380,615 3,390,615 Revenues from Other Agencies 603,013 603,013
Charges for Service 10,944,356 11,004,356
Other Revenue and Transfers 10,056,591 10,054,591
Total Revenues & Transfers In $100,340,777 $101,375,206 Expenditures & Transfers Out
Salaries & Benefits $74,225,304 $75,731,007
Services & Supplies 27,633,109 27,926,353
Capital & Outside Agencies 849,794 849,794
Debt Service 266,912 -
Transfers Out 4,641,696 4,719,611
Total Expenditures & Transfers Out $107,616,815 $109,226,765 Surplus/(Gap) $(7,276,038) $(7,851,559)
Transfer from LEAF 7,276,038 -
Net Operating Budget $- $(7,851,559)
Proposed Measure U Fund Budget
Refer to Proposed Budget Book pp. 67-68, 99, 107& 180-183 Taxes
99.4%
Rev. from Use of
Money & Property
0.6%
FY 2026-27 Sources
Salaries &
Benefits
86.9%
Services &
Supplies
13.1%
Transfers
Out
0.0%
FY 2026-27 Uses
CITYWIDE BUDGET SUMMARY – MEASURE U FUND
PROPOSED FY 2026-28 BIENNIAL BUDGET
FY 2026-27 FY 2027-28
Revenues & Transfers In
Taxes $26,637,320 $27,170,066
Revenue from Use of Money & Property 171,354 171,354
Total Revenues & Transfers In $26,808,674 $27,341,420
Expenditures & Transfers Out
Salaries & Benefits $24,568,898 $25,211,138
Services & Supplies 3,701,145 3,701,145
Transfers Out 9,947 9,947
Total Expenditures & Transfers Out $28,279,990 $28,922,230 Net Operating Budget $(1,471,316) $(1,580,810)
ENTERPRISE FUNDS BUDGET SUMMARY - OPERATING
PROPOSED FY 2026-28 BIENNIAL BUDGET
Revenue Expense
Provision / (Use)
of Fund Balance
FY 2026-27
Water Resources $72,815,585 $84,947,013 $(12,131,428)
Solid Waste $40,025,372 $42,403,152 $(2,377,780)
Transit $19,195,926 $21,049,277 $(1,853,351)
Radio $1,684,439 $885,567 $798,872
FY 2027-28
Water Resources $72,869,729 121,415,541 $(48,545,812)
Solid Waste $40,099,050 42,911,217 $(2,812,167)
Transit $19,195,926 18,936,184 $259,742
Radio $1,684,439 886,055 $798,384
Refer to Proposed Budget Book pp. 69-76, 112-113 & 142-146
FUNDING SOURCES AND USES
Proposed
FY 2026-27
Proposed
FY 2027-28
Funding Sources
Capital Projects – General Fund $1,465,294 $ 849,794
Gas Tax & Transportation Development Act Fund 5.897.407 6,165,748 Growth Mitigation Fund 4,250,000 18,857,000
Residential Development Tax Fund 90,000 90,000
Measure A Fund 3,516,483 3,094,510
Public Transit Fund 8,255,000 5,500,000
Water Fund 7,758,000 24,547,000
Wastewater Fund 12,775,220 35,742,430
Developer / Grant Street Projects Fund 3,001,029 10,693,281 Fleet Services Fund 976,121 922,517
Solid Waste Disposal Fund 995,000 900,000
Quimby-Park Acquisition & Development Fund 675,000 675,000 Landscape District Fund 300,000 300,000
Total Funding Sources $49,954,554 $108,337,280
FUNDING USES
Proposed
FY 2026-27
Proposed
FY 2027-28
Category
Public Safety $ 408,621 $ 922,517
Public Utilities 23,023,220 64,456,430
Public Ways & Facilities 16,880,478 36,393,333
Public Transit 8,327,500 5,500,000
Leisure & Cultural Services 1,065,000 1,065,000
General Government 249,735 -
Total Funding Uses $49,954,554 $108,337,280
Refer to Proposed Budget Book pp. 139-153
History of Reserves
Proposed Amendments and
Recommendation
Staff Proposed Amendment 1
• Public Works has requested an amendment of $627,047 to the proposed budget for the Measure A Fund to:
– Purchase asphalt equipment (asphalt paver trailer, asphalt paver, roller, broom, and traffic safety items
– Vehicles (Ford F350 truck and EV truck)
• This proposed amendment will not have a fiscal impact on the structural deficit of the General Fund or Measure U Fund.
Potential Council-Proposed Amendment 2
• City Manager recommends an amendment of $344,000 to the proposed budget thereby restoring the budget removed for the proposed pool closure, as follows:
– General Capital Fund:
• Cancel FY 2025-26 RV Hookup for Park Hosts Project: $100,000 • Cancel FY 2025-26 Elks Field Lighting Project: $200,000 • Transfer out $300,000 of General Capital Fund reserves to the General Fund in FY 2026-27 *
– General Fund:
• Increase Revenue from Aquatics fees paid by YMCA members: $44,000 ** • Transfer in $300,000 of General Capital Fund reserves to the General Fund in FY 2026-27
• Increase Appropriations for PNAC: $344,000
* The transfer from the General Capital Fund to the General Fund is a one-time solution. ** The additional revenue from YMCA members is only anticipated to be received during the YMCA closure in FY 2026-27.
Final Proposed Budget Citywide Uses
Refer to Proposed Budget Book pp. 105-108
CITYWIDE BUDGET SUMMARY – FINAL PROPOSED OPERATING
PROPOSED FY 2026-28 BIENNIAL BUDGET
FY 2026-27 FY 2027-28
Expenditures & Transfers Out
Salaries & Benefits $134,492,270 $137,381,318
Services & Supplies 169,699,565 194,031,613
Capital & Outside Agencies 36,469,601 74,606,035
Debt Service 3,890,262 3,625,350
Transfers 23,490,266 15,676,643
Subtotal Expenditures & Transfers Out $368,041,964 $425,320,959 Amendment 1 – PW Asphalt Equipment & Vehicles 627,047 0 Amendment 2 – PN Aquatic Center Operating Funds 344,000 0 Amendment 2 – 1X Transfer Out from General Capital to
General Fund
300,000
Total Expenditures & Transfers Out $369,313,011 $425,320,959 What Lies Ahead…
• Finance Department and all City Departments will continue to work together to address the structural deficit, entailing:
– Keeping the hiring chill in place
– Continue to evaluate financial and budget policies and financial forecasts – Review Capital Outlay Project expenses and work on a funding plan for maintenance and projects
– Continue to review revenue generation opportunities
– Continue working on short- and long-term rebalancing initiatives that resolve the structural deficit and assist with strategic planning for the future – Evaluate the Measure U Fund so that expenses align with policy and funding
RECOMMENDATION
Adopt a Resolution adopting the budget for fiscal years 2026-28, adopting policy actions, and delegating the City Manager to implement the same.