City Council – May 27, 2025
FY 2025-27 Proposed Biennial Budget Study Session
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
May 27, 2025
Proposed FY 2025-27 Biennial
Operating Budget and second
year of the Biennial CIP Budget
Fall 2025
Staff reports on FY 2024-25
year-end budget performance
May 2026
Proposed FY 2026-27
Operating Budget and FY
2026-28 Biennial CIP Budget
presented to City Council
January-February 2025
Community Engagement for the
FY 2025-27 Biennial Operating
Budget and priorities
March 8, 2025
Council Priority setting for the
FY 2025-27 Biennial
Operating Budget and staff
reports on FY 2024-25
midyear budget
performance and updated
forecast
June 24, 2025
Public Hearing and adoption
of the firstyear of the Biennial
Operating Budget and
second year of the Biennial
CIP Budget
Winter 2026
Staff reports on midyear
budget performance,
updated forecast, proposes
adjustments
June 2026
Public Hearing and
Adoption of the 2nd
year of the Biennial
Operating Budget
and 1st year of the
Biennial CIP Budget
Fiscal Year 2025-27 Budget Process
2 Now
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
1. Financial Status Update & Budget Overview
2. Department Workplans & Performance Metrics
3. Implementing Council Priorities
4. Measure K Investments
5. Other Business
6. Council Questions
3 Agenda – Budget Study Session
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
FINANCIAL STATUS UPDATE:
Challenges
4 Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
FINANCIAL STATUS UPDATE:
Reliance on visitor, retail, tourism, and hospitality sectors 5 46% of General Fund
revenues come from:
• TOT
• sales tax, and
• parking-related
revenues
(including parking
facility taxes)
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
FINANCIAL STATUS UPDATE:
Key General Fund Revenues Continue to Trend Low at Q3
6 FY 2024-25 Revised Budget $75.3 million FY 2024-25 Revised Budget $70.0 million Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
FINANCIAL STATUS UPDATE:
Sales Tax – Comparison by Major Industry Groups
7 Calendar Year 2024 to 2023
(Sales Tax only, not including TUT)
• All major business
sectors down – driving
uncertainty
• City’s focus on
economic development
will help
• In FY 2025-26 Sales
Taxes & Transaction
and Use Taxes make up
approximately 16% of
total General Fund
revenues
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
March 2025
Use of $60.8 million in onetime funds from assigned
fund balance ($33.2
million) and working
capital reserves ($27.6
million) required to
balance General Fund.
*This does not account for
full impact of labor
agreements now under
negotiation.
8 FINANCIAL STATUS UPDATE:
General Fund
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
FINANCIAL STATUS UPDATE: General Fund
Strategies to Cap Growth
9 ACTIONS INCORPORATED IN THE FORECAST
Cap budget growth by $2.6 million in FY 2025-26 and $3.8 million in FY 2026-27 • $1.2 million by keeping supplies and expense budgets flat for 2025-26 • An additional $1.2 million is saved in the second year, bringing the total savings to $2.4 million by FY 2026–27
• $1.4 million annually from vacancy savings rate increase from 1% to 1.5% for all departments
ADDITIONAL ACTIONS TO FUND MEASURE K INITIATIVES
• $2.6 million in new revenue generation opportunities
• $2.0 million in additional cost saving opportunities
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
10 • Events - Beach & Pier activation
• City venue rentals & short-term leases
Community Programs
• Compliance audits for self-reported taxes
• New parking meters on Ocean Park
• Greater community garden cost recovery
Operations
• Ambulance Operator
Program pilot
• Fire education partnership
with East LA College
• Greater State mutual aid
deployment cost recovery
• License plate recognition
technologies in city parking
structures
Public Safety
FINANCIAL STATUS UPDATE: General Fund
Enhancing Revenues - $2.6 million in 25-26
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
11 • Misc. savings – i.e.:
telephone, food, printing,
office supplies, training,
conferences costs
• Credit card processing
expenses
• Enterprise fund offset
staffing costs for internal
services
• Police overtime
Operational Savings
• Neighborhood Grant Program
• Consulting services in HR
• Data platform infrastructure
• Custodial services at PSF (one-year)
• Weekend trash service at two parks
• Parks sports field fertilization
• Passport Services
Programmatic Reductions
FINANCIAL STATUS UPDATE: General Fund
Reducing Costs - $2.0 million in 25-26
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
12 Net of reimbursements and transfers between funds
BUDGET OVERVIEW:
FY 2025-27 Proposed Budget
FY 2025-26 Proposed Budget
• Relatively level with FY 2024-25
General Fund - $480.9 million,
including reimbursements and
transfers
FY 2026-27 Budget Plan
• 4.5% increase over FY 2025-26,
primarily in Capital expenses
General Fund - $495.8 million ,
including reimbursements and
transfers
Total $789.9 Total $825.5
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
13 FY 2025-26 FTE change as
compared to FY 2024-25
• +10.5 Permanent
• +0.2 As-needed
• Total citywide positions
are still 162.6 FTEs short of
pre-pandemic levels -
mostly in General Fund
BUDGET OVERVIEW:
FY 2025-27 Proposed Budget
2,297.9
1,877.2
2,121.6
2,135.3
- 500.0 1,000.0 1,500.0 2,000.0 2,500.0
Citywide Staffing Over Time
FY 2025-26 Proposed Budget
FY 2020-21 Adopted Budget
FY 2019-20 Adopted Budget
FY 2024-25 Adopted Budget
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
FY 2025-27 PROPOSED BUDGET:
Targeted Enhancements(before Measure K recommendations) 14 • Promote economic
development through events
and activations
• Advance road safety
• Net zero staffing changes for
operational efficiencies and
service enhancement
• Salary adjustments based on
compensation studies
General Fund
Total $116,081 *
• Airport operations & real estate
management
• Expand Beach House events &
cultural offerings
• Improve transportation services
& operations
• Support for housing participants
• Funds for increasing operating
costs
Other Funds
Total $3,514,322
* Funded by new revenues or by reallocating funds within department budgets.
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
BUDGET OVERVIEW:
FY 2025-27 – General Fund
Where does the money come from? Where does the money go? Capital
Improvements
3.2%
Community
Development
4.2%
Housing &
Community
Services
7.3%
Internal Services
13.9%
Library
2.4%
Mobility &
Parking
5.7%
Non-Departmental
12.0%
Public Safety
(Fire/Police)
38.8%
Public
Works
12.5%
15 Local Taxes
73.1%
Fines / Licenses
/ Permits
10.7%
Investments /
Rents
2.8%
Charges for
Services
12.3%
All Other
1.1%
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
TOTAL REVISED BUDGET: $108.5 MILLION (including internal transfers) Non-General Funds
CAPITAL IMPROVEMENT PROGRAM:
FY 2025-26 Proposed CIP Budget
16 Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
300 Projects on Department Workplans
• Involve significant department
collaboration
• Require Council approval and/or
direction
• Come out of a Council 16 Item
• Advance a budget priority
• Involve a significant public impact
• Affect most or all staff
• Do NOT include full list of CIP projects
and smaller scale projects
95 Performance Metrics
• Track the services provided every day
• Measure year over year trends on
operational performance
• Provide foundation for dashboards and
reporting
17 Workplans and Metrics
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
Update on 16 Items
• Preserving Our Diversity (POD) Expansion
• Renter’s Protections:
• Right to Counsel Expansion
• Flexible Financial Assistance Program
• Rent Registry for non-rent-controlled units
COUNCIL PRIORITIES:
Affordable, Livable, and Secure Housing for All
18 Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
2025-2027 Workplan Items
• Implement Homelessness Strategic Plan
• Establish New Renters Protections
• Expand Right to Counsel
• Launch Flexible Financial Assistance Program
• Advance Behavioral Health Strategy for youth and crisis services for adults • Develop City-owned sites in compliance with Housing Element • Rent Registry for non-rent-controlled units
COUNCIL PRIORITIES:
Affordable, Livable, and Secure Housing for All
19 Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
Update on 16 Items
• Self Certification Pilot Program - Framework developed, Commercial TI roll out August 2025 coupled with process improvements for plan reviews • SM Place Digital Signage Pilot Program: awaiting go ahead from current Santa Monica Place owners
• Banner Program: staff developing recommendations, anticipated Council return date of Q3 2025
• Events Policy: updates to Site Guidelines, Events AI & Muni Code (July 2023 – present) • Events Venues: staff have expanded community access to city parks, fields, open spaces and open streets for major community events
• Develop a plan to bring large music festivals and multi-day events to Santa Monica Pier – Work initiated to develop a comprehensive plan for hosting events on the beach and pier, including larger music events and activations
COUNCIL PRIORITIES:
Economic Opportunity and Growth
20 Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
2025-2027 Workplan Items
• Film Permit Process and Policies
• Digital Signage Development Agreements for Third Street Promenade • Monitor and report on Entertainment Zones
• Economic Growth Campaign
• Naming rights, sponsorships, and licensing opportunities • Make Zoning Ordinance Changes permanent: Cannabis, Downtown • Creation of new Beach Event Zone on southside of Santa Monica Pier • Implementation of new centralized land use management system • Outreach to host elements associated with LA28
COUNCIL PRIORITIES:
Economic Opportunity and Growth
21 Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
Update on 16 Items - Police
• Women in Policing Initiative
• 25% of officers hired in past 5 years and 15% of current sworn staff are women. Targeted outreach includes female-led story telling, dedicated website and social media content, and recruitment events
• Traffic Enforcement and Dangerous Driving
• Launched traffic safety effort in Feb 2025 with a dedicated traffic car on daily patrol (1,819 stops and 358 citations issued). No fatal collisions occurred in Q1. • Traffic Enforcement unit held 14 operations and issued over 500 citations, with weekly reports to City Manager
• SkillBridge
• SMPD is in contact with DoD and plans to apply during the next federal enrollment window (Oct. 1-Dec. 1).
COUNCIL PRIORITIES:
Clean Streets & Safe Neighborhoods
22 Clean Streets & Safe Neighborhoods - Safety
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
2025-2027 Workplan Items – Police
• Homeless Liaison Program
• Calls/Encampments/Mental Health Evaluations
• Downtown Patrol and Engagement
• Reduce crimes against Property/Persons specifically in the Downtown • Police Patrol
• Maintain low average response times to priority 1 & priority 2 calls • Recruitment and Background Investigations
• Decrease the amount of time taken to complete background investigations COUNCIL PRIORITIES:
Clean Streets & Safe Neighborhoods
23 Clean Streets & Safe Neighborhoods - Safety
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
Update on 16 Items - Fire/CDD:
• Align City’s high-rise definition with State - work underway, next update adoption of California Building Code (Nov. 2025)
• Single stairwell multifamily unit residential buildings – Participating in state’s Single Stair Task Group, plan is to align with forthcoming State code updates COUNCIL PRIORITIES:
Clean Streets & Safe Neighborhoods - Safety
24 Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
Fire Department FY 2025-27 Key Workplan Items
• Ambulance Operator Pilot Program
• Advanced Provider Unit
• Care Management Program (Wise & Healthy Aging)
• Apparatus Replacement Plan and Fire Facilities Master Plan • Mental Health and Wellness Program
COUNCIL PRIORITIES:
Clean Streets & Safe Neighborhoods - Safety
25 Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
COUNCIL PRIORITIES:
Clean Streets and Safe Neighborhoods - DOT
26 Update on Council 16 Items
• Bike Lane Safety
• Concrete-protected bike lane network in progress across the City • Automated enforcement solution piloted; aiming to implement in FY25-26 • Neilson Way Speed Mitigation
• Speed limit reduced to 25mph, viable speed reducing treatments implemented • Grant-funded improvements forthcoming (construction 2027) • Vision Zero/Road Safety Improvements
• All 8 components complete with exception of stop sign warrant criteria (3-6 months) • Curbside Management
• Developing smart curb solutions procurement (releasing summer 2025) • Short-term parking/loading spaces being added in Downtown SM (summer 2025) Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
Key FY2025-27 Workplan Items
• Safer Multi-modal Streets Projects
• Brighter Blue - BBB Service Expansion and Improvements • Automated Bus Lane Enforcement (ABLE) Program
• Parking Structure License Plate Recognition Expansion COUNCIL PRIORITIES:
Clean Streets and Safe Neighborhoods - DOT
27 • Bergamot Area Projects • Santa Monica Blvd. Safety Study • East Pico Blvd. Safety Study • Six Schools Pedestrian Improvements • Broadway & Colorado Protected Bike Lanes • Wilshire Safety Implementation – Phase 2 Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
MEASURE K:
Public Safety
28 • Expand Homeless Liaison
Program (HLP)
• Expand Drone as a First
Responder Program (DFR)
• Proactive Security Monitoring
solution at Library, Miles
Playhouse and Camera Obscura
• Expand Traffic Enforcement
• Ambulance Operator Program
Pilot
Police & Fire Resources
• Ongoing funding for the
Therapeutic Transport Team
(TTT) in FY 2027-28
Behavioral Health
• Ongoing funding for copper wire
replacement & streetlight
maintenance
Infrastructure
Improvements
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
MEASURE K:
Safety For All Modes Of Movement
29 • Neighborhood traffic
calming & transformational
projects along major
corridors
• Reconfigure Z-gates on the
Expo Bike Path
• Traffic and mobility staff to
advance these projects
Infrastructure
Improvements
• Resume ”Safe Routes to School” and
“Safe Routes for Seniors” programming
Community Outreach
• License plate reading technologies in
city parking structures
• “No right on red” restrictions at scramble
crosswalks in the Downtown district
Promote Public Safety
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
• Piloted in 2018, fully implemented in 2020, last updated in 2023 • 40% staff eligible; 30% participate
• Average is 2 telework days per week
Hybrid Work
30 City Telework? Policy
Beverly Hills Yes Hybrid (up to 3 days/week)
Culver City Yes Hybrid
El Segundo No N/A
Glendale Yes Hybrid (up to 1 day/week)
Manhattan Beach Yes Hybrid
Pasadena Yes Hybrid (up to 2 days/week)
Santa Monica Yes Hybrid (up to 3 days/week)
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
Opportunities to reallocate existing Council travel budget to address increasing costs and commitments
• Alternative 1 – redistribute funds with greater allowance for Mayor • Alternative 2 – redistribute funds with greater allowance for Mayor and set aside funds for required travel for councilmember representatives
Council Travel Funds
31 Current Alt 1 Alt 2
Mayor $8,688 $13,939 $13,939
Councilmember (6) $8,688 $7,789 $7,123
Assigned Travel – ICA Winter $0 $0 $1,500
Assigned Travel – ICA Summer $1,500
Assigned Travel – Cal Cities $1,000
Total $60,676 $60,676 $60,676
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
32 Council Questions, Discussion & Direction
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025
Recommended Actions – Tonight
1. Receive Update to the Five Year Forecast
2. Provide Direction on FY 2025-27 Proposed Biennial Budget
3. Provide Direction on Proposed changes to Fees and Fines
4. Provide Direction on Council Travel Funds policy
5. Direct Staff to Set Budget Adoption Hearing for June 24, 2025 Public Hearing – June 24th
• Adoption of the FY 2025-27 Biennial Budget, including Measure K • Allocation of Council discretionary funds
33 Next Steps
Item 7-A
May 27, 2025
Item 7-A
May 27, 2025