City Council
Housing Authority
Parking Authority
Report
City Council Meeting: June 24, 2025
Agenda Item: 12.B
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To: Housing Authority, Parking Authority, Mayor and City Council From: Oscar Santiago, Director, Finance Department
Subject: Adoption FY 2025-27 Biennial Budget and FY 2025-26 CIP Budget 2 of 22
Recommended Action
Staff recommends that the Housing Authority Board:
1. Adopt a Resolution of the Housing Authority of the City of Santa Monica adopting the first year and approving the second year of the FY 2025-27 Biennial Budget and adopting the second year of the FY 2024-26 Biennial Capital Improvement Program Budget at Attachment B, as amended by Attachment D.
Staff also recommends that the City Council and Parking Authority:
2. Adopt a Resolution of the City Council of the City of Santa Monica adopting the first year and approving the second year of the FY 2025-27 Biennial Budget and adopting the second year of the FY 2024-26 Biennial Capital Improvement Program Budget at Attachment A, as amended by Attachment D; and
3. Adopt a Resolution of the Parking Authority of the City of Santa Monica adopting the first year and approving the second year of the FY 2025-27 Biennial Budget and adopting the second year of the FY 2024-26 Biennial Capital Improvement Program Budget at Attachment C, as amended by Attachment D.
Staff also recommends that the City Council:
4. Adopt a Resolution of the City of Santa Monica establishing new classifications and adopting salary rates for various listed positions (Attachment E) and approve the position and classification changes (Attachment F);
5. Adopt a Resolution of the City Council of the City of Santa Monica revising the City’s master fee schedule to establish and revise certain permit and user fees and charges (Attachment G);
6. Adopt a Resolution of the City Council of the City of Santa Monica revising the City’s master fine schedule to establish and revise the administrative citation schedule of fines for certain violations of the Santa Monica Municipal Code (Attachment H);
7. Adopt a Resolution of the City Council of the City of Santa Monica establishing parking rates and permit fees for all City parking facilities and resources (Attachment I);
8. Adopt a Resolution of the City Council of the City of Santa Monica revising the credit card convenience fees (Attachment J);
9. Adopt a Resolution of the City of Santa Monica establishing the Gann appropriations limit for FY 2025-26 (Attachment K);
10.Adopt a Resolution incorporating a project funded by SB1: The Road Repair and Accountability Act (Attachment L);
11.Adopt a Resolution of the City Council of the City of Santa Monica confirming Council’s travel budget allocation (Attachment M);
12.Authorize the City Manager to accept FY 2025-26 Measure A Local Solutions Funds in the amount of $1,221,616 from the County of Los Angeles Homeless Initiative and execute all necessary documents to accept the funds and any future funding renewals;
13.Provide direction to staff on allocation of discretionary funds (Attachment N);
14.Authorize staff to amend the City’s Fiscal Policies to revise the plan to replenish Housing Trust Fund funds borrowed by the General Fund, as described in Attachment O; and
15.Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality 3 of 22
Act (CEQA) Guidelines and findings of categorical exemptions pursuant to Section 15273 and Section 15324 of the CEQA Guidelines.
Summary
This report presents information and requests actions necessary to adopt the first year of the FY 2025-27 Operating Biennial Budget and the second year of the FY 2024-26 Biennial Capital Improvement Program Budget for the City of Santa Monica, the Santa Monica Housing Authority, and the Santa Monica Parking Authority. This includes actions necessary to revise certain fees and fines; establish parking rates; set the annual Gann appropriations limit; and approve the allocation of SB-1 Gas Tax funding to eligible projects. Staff also requests that Council approve the operating budget plan for the second year of the Biennial Budget (FY 2026-27). Since the City Charter requires Council to adopt a budget annually, staff will submit the FY 2026-27 budget plan to Council for formal adoption, with any necessary revisions in May 2026.
Following Council’s May 27, 2025 budget study session and subsequent Council direction, staff present the updated proposed biennial budget for fiscal years 2025-2027 for Council adoption. This updated budget incorporated modifications to the budget, including:
• Measure K investments in public safety and safe streets • Cost saving and revenue generating proposals from departments • Implementation of a hiring freeze for non-sworn positions in the General, Beach and Pier funds
• Other budget adjustments and clean-up items
The adjustments to the Proposed Budget, known as Final Changes, increase the citywide operating expenditure budget (inclusive of all funds) by approximately $2.6 million in FY 2025-26 and $1.9 million in FY 2026-27, as well as increases the Proposed CIP Budget by $0.7 million in FY 2025-26 and by $2.3 million in FY 2026-27.
The General Fund expenditure adjustments of $2.5 million FY 2025-26 and $3.6 million in FY 2026-27 are offset by revenues from proposed new revenue generating initiatives 4 of 22
of approximately $3.1 million and $3.9 million, respectively. Below is a summary of the revisions made to the FY 2025-26 General Fund budget that was presented to Council at the May 27th budget study session.
General Fund Summary of Changes
Expenditures
(Operating &
Capital) Revenues
Revenues
over
Expenditures
May 27th Proposed Budget 480,870,179 470,416,570 (10,453,609) Cost Savings Measures (1,664,022)
Revenue-Generating Initiatives 2,061,052
Reduction of GF subsidy to Beach &
Pier (206,976)
Measure K Allocations 3,411,421
New Council Direction 964,242 1,033,525
Corrections & Technical Adjustments 7,631
Subtotal Final Changes 2,512,296 3,094,577 582,281
Total Proposed Budget 483,382,475 473,511,147 (9,871,328 Estimated savings from hiring freeze (4,831,348) 4,831,348 Adjusted Total Budget 478,551,127 473,511,147 (5,039,980) As previously mentioned, the FY 2025-27 proposed budget prioritizes resiliency, recognizing the ongoing operational deficit driven by key sectors of our local economy combined with extreme uncertainty in the general economic outlook. Staff implemented cost saving measures to reduce the City’s dependency on reserves and Council directed staff to incorporate additional measures at the May 27, 2025 budget study session. Those combined measures have reduced the impact to the General Fund by an estimated $5.4 million in FY 2025-26.
While the next two years will be challenging, this budget takes pragmatic measures to ensure Santa Monica’s long-term financial resiliency. Santa Monica’s long-term outlook remains strong, with major investments in hotels, housing, the Pier, beach, and the reimagining of the Santa Monica Airport. Guided by City Council, Santa Monica remains committed to a strong, vibrant, and resilient future.
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FY 2025-27 Proposed Biennial Housing Authority Budget
The FY 2025-27 Proposed Biennial Housing Authority Budget presented for adoption has not materially been revised from the budget first released to the public on May 12, 2025 and presented to Council at the May 27, 2025 Budget Study Session. The Housing Authority revenue and expenditure budgets are summarized in the following table:
Original
Proposed
FY 2025-26
Budget
Final
Changes
Final
Proposed
FY 2025-26
Budget
Original
FY 2026-27
Budget
Plan
Final
Changes
Final
FY 2026-27
Budget
Plan
Total Revenues 30,736,186 30,736,186 30,929,312 30,929,312 Expenditures
Operating 31,333,698 (712) 31,332,986 31,362,226 (712) 31,361,514 Capital 45,089 45,089 55,368 55,368
Total
Expenditures 31,378,787 (712) 31,378,075 31,417,594 (712) 31,416,882 The minor change in operating expenditures adjusts the transfer from the Miscellaneous Grants fund. This results from a HOME program revenue adjustment, which reflects actual FY 2025-26 HUD allocations and proposed activities.
FY 2025-27 Proposed Biennial City Budget
The budget presented for adoption has been revised from the budget first released to the public on May 12, 2025 and presented to Council at the May 27, 2025 Budget Study Session, to reflect Final Changes (budget adjustments) based on Council motions adopted at the Budget Study Session, technical adjustments and corrections that had not been included in the initial budget. The overall FY 2025-27 Proposed Biennial Budget for all funds as revised is approximately $793.3 million in FY 2025-26 and $829.7 million in FY 2026-27, net of reimbursements and transfers1, as summarized in the following table.
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Original
Proposed
FY 2025-26
Budget
Final
Changes
Final
Proposed
FY 2025-26
Budget
Original
FY 2026-27
Budget Plan
Final
Changes
Final
FY 2026-27
Budget Plan
General Fund
Operating (Ops) 465,709,350 1,592,296 467,301,646 476,268,925 1,716,035 477,984,960 General Fund
CIP 15,160,829 920,000 16,080,829 19,500,552 1,926,000 21,426,552 Other Funds Ops 331,097,591 1,052,143 332,149,734 333,916,396 213,328 334,129,724 Other Funds CIP 93,335,471 (242,054) 93,093,417 115,128,001 392,054 115,520,055 Reimbursements
& Transfers1
(115,372,270) (115,372,270)
(119,357,376) (119,357,376)
Total 789,930,971 3,322,385 793,253,356 825,456,498 4,247,417 829,703,915 1Reimbursements and transfers are technical adjustments for accounting purposes, which include payment of services between funds that are backed out to avoid double counting. Among the large payments that are backed out are contributions to Workers’ Compensation and Liability self-insurance funds, and transfers to the Vehicle Management and Information Technology Replacement & Services funds.
Revisions to Proposed Budget
All adjustments, including adjustments associated with Council direction at the Budget Study Session are detailed in Attachment D. As discussed at the Council budget study session, the proposed biennial budget puts forth a series of cost saving measures to help contain budget growth while also focusing resources to advance the Council’s priorities of:
• Affordable, Livable, and Secure Housing for All
• Clean Streets and Safe Neighborhoods
• Economic Opportunity and Growth
The Budget is balanced in FY 2025-26 but relies on working capital and other reserve funds to prevent further reduction of service levels during the biennial period. Nongeneral fund enhancements incorporated in the budget are supported by available fund balances.
Incorporating Council Direction
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At the Budget Study Session on May 27, 2025 (Attachment R), Council asked staff detailed questions related to the proposed budget and Council adopted a motion supporting the proposed budget with amendments for the use of Measure K funds for public safety and safe streets, implementation of a hiring freeze of non-sworn personnel in the General, Beach and Pier funds, expansion of parking meters and increase of residential preferential parking permit fees, new revenue generating initiatives, initiation of repayment to the Housing Trust Fund, and added funding to the Early Childhood Task Force (as outlined in Attachment S).
These amendments have all been included in the updated proposed budget. In specific instances, staff have had to implement Council direction with slight modifications due to legal or regulatory reasons as well as present alternatives to specific directives for Council consideration.
Cost Saving and Revenue Generating Measures
Implementation of a Hiring Freeze for Non-Sworn Positions in the General, Beach and Pier Funds
In response to the City’s reliance on limited reserves to balance the budget and growing uncertainty about the economic outlook, Council directed staff to implement a hiring freeze for non-sworn personnel in the General Fund as well as the Beach and Pier Funds, which rely on General Fund subsidies. Council carved out several exemptions to this hiring freeze, including positions required for:
• Health and safety
• The implementation of Measure K proposals
• Implementation of net-zero proposals included in the budget • Compliance with legal requirements
• Sustain core city services – what we have to do
• Revenue generating initiatives
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Staff have worked to implement this hiring freeze along with a managed hiring process for all current and future recruitments. A list of positions frozen as of May 17, 2025 is in Attachment P. These positions and future vacancies will be required to receive authorization from the City Manager before filling any position. This process will require each department head to sign off on the recruitment request, which will initiate a review by the Finance and Human Resource departments that will look at the cost of the position, the department’s overall budget performance, impacts to City revenues, length of vacancy, and overall department vacancy rate. Following this review, the City Manager will evaluate each hiring approval request by determining whether the position meets the above criteria and determine whether to approve or deny the request.
Finance will track the ongoing financial impact of the hiring freeze and report back to Council quarterly and make any budgetary changes at the mid-year and exception year budget sessions.
In addition to the managed hiring process, Council directed the City Manager to implement a quarterly reporting of Police and Fire Departments overtime expenditures, including details of special deployments and factors requiring the use of overtime, if the department is on track to exceed the salaries and wages budget. If additional budget is required for overtime, staff will return to Council for authorization to increase the department budget.
Increase Residential & Visitor Parking Permit fees, Install New Parking Meters, and Expand Use of the License Plate Recognition in City Parking Facilities In addition to the hiring freeze, Council also directed staff to look at a number of ways of increasing parking revenues across the City to support the General Fund. This included:
• Increasing residential parking permit fees while also evaluating making financial hardship waivers available,
• Exploring the potential addition of off-peak parking on Neilson Way for safety & revenue, and
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• Expanding use of license plate recognition (LPR) technologies to all downtown parking structures.
Updated preferential parking fees are included in this biennial budget along with updated revenue projections. These are discussed below in the Fees/Fines/Rates section of the report. Staff have also initiated the analysis required to assess the feasibility of adding parking along Neilson Way to increase roadway safety and generate revenue while maintaining ADA access. Staff are scheduled to bring a comprehensive parking rate proposal to Council in August to address parking rates at meters and in city lots and structures.
• New Appropriation - Originally recommended for funding through Measure K, the updated proposed budget includes $1.2 million over two years from the General Fund balance (one-time capital improvement project) to expand use of the City’s License Plate Recognition (LPR) system to downtown parking facilities.
Initiate Reimbursement of the Housing Trust Fund – New Appropriation Council directed staff to update the City’s financial policies and initiate repayment of funds to the Housing Trust Fund. The current amount borrowed from the Housing Trust Fund by the General Fund totals $47.2 million through fiscal year 2024-25. Staff have included updated financial policies for Council adoption and allocated $0.3 million annually for the next 4 years in repayment to the Housing Trust Fund. Staff also include the updated Financial Policies to reflect the updated policy for repayment to the Housing Trust Fund (attachment O). The City’s financial policies also call for half of one-time proceeds from the sale of City lands to go towards repayment to the Housing Trust Fund.
Provide $25,000 annually in FY 2025-26 and 2026-27 to the Early Childhood Task Force (ECTF) – New Appropriation
The ECTF’s vision is that every child in Santa Monica is healthy, enjoys learning, and enters school ready and eager to succeed. To support their vision, Council directed staff 10 of 22
to include $25,000 for each year of the biennial budget to the ECTF. These funds are included in Non-departmental. The City will need to enter into an agreement with the task force and additional fiscal regulations must be met before payment can be made.
Measure K Funding Allocations
At the direction of Council, staff have included the following new FY 2025-26 allocations and maintained key existing allocations that support safety, safe streets, and economic recovery, using Measure K revenues and in conformance with Advisory Measure PSK.
A complete list of Measure K investments and changes from the May proposal are included in Attachment D.
• 4.0 FTE Community Services Officers to enhance downtown and park safety – $0.49 million (Note: The original Council direction was for Public Safety Officers.
However, after discussion with Police about the expanded scope of duties for community services officers, including investigating and taking reports for routine field incidents and traffic collisions, and the marginal cost differential, the budget includes 4.0 Community Services Officers.)
*Alternative: The Police Department requests Council consider an alternative staffing recommendation to add 1.0 Police Sergeant and 1.0 Community Services Officer in lieu of the 4.0 Community Services Officers. Over the past year, the department has added 11 new patrol officer positions but no additional police supervision. This imbalance now strains the department’s existing span of control, creating a significant risk to both operational effectiveness and liability exposure. The addition of 1.0 Sergeant will provide additional on scene leadership and better ensure department protocols are followed. The cost of these additional positions would fall within the $500,000 allocation as directed by Council.
• Annual funding for the pilot advanced provider unit (APU) for homeless and vulnerable populations - $0.63 million, including 1.0 FTE • Security upgrades at Library, Miles Playhouse, and Camera Obscura - $0.1 million
• Ambulance operator program - $0.15 million, including 3.0 temporary FTE • Additional drone program equipment - $51,750
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• Streetlight maintenance and repairs - $0.75 million, including 1.0 FTE • Safe neighborhood streets program which also funds 2.0 FTE positions - Traffic Painter/Signs and Markings Technician and customer service-related position - $0.46 million
• No right on red signage for pedestrian safety in the downtown - $10,000 • Local grant match funding for ongoing and future projects and funding to support a new Traffic Engineer position as well as fund the City’s Civil Engineer and City Traffic Engineer positions, previously funded with transportation impact fee (TIF) revenues. - $0.57 million, including 1.0 FTE
• Automated bike lane enforcement (replacing Z Gates project). - $0.2 million • Preserve funding $1.5 million for Police Special Deployments overtime. • Preserve essential staffing, including custodian position impacting restroom maintenance at the Beach, Pier and City Parks; and, vacant assistant planner, code enforcement officer, and combination building inspector positions, as recommended in the proposed budget. - $1.0 million
Additional Adjustments
In addition to incorporating Council direction, additional budget adjustments are reflected in the updated budget:
Expenditures
• CDBG Fund - Adjustments in two capital projects to better align with project timelines. (Reduction to the VAP Playground project in FY 2025-26 to shift funding to future years and fund the delayed 19th Street: Phase II project). $0.24 million decrease.
• Miscellaneous Grants Fund - Adjustment to program Measure A Local Solutions Funds allocated by the County of Los Angeles Homeless Initiative to replace Measure H funds beginning in FY 2025-26. $0.85 million increase.
Revenues
• General Fund - Updated estimated revenues associated with the existing and expanded LPR system to reflect updated projections. $0.43 million increase. 12 of 22
• General Fund - Increased recovery of credit card processing costs for parking transactions so that the City no longer absorbs the cost and instead passes the charge-through to the user. $0.2 million increase.
• General Fund – Increased recovery of community garden program costs. $30,000
*Alternative: Public Works proposes to cut $30,000 from the advertising budget in FY 2025-26. During FY 2025-26 staff will pilot a farm to table dinner fundraiser, pursue sponsorship and donation opportunities, and work with the community garden advisory committee to explore a nominal fee increase. Staff will then return to Council during the FY 2026-27 exception-based budget process with an update on the revenue generating potential of these scenarios and any recommended budget actions.
• CDBG and Miscellaneous Grants Funds - CDBG/HOME revenue adjustments to reflect actual FY 2025-26 HUD allocations and proposed activities. $7,115 increase in the Miscellaneous Grants Fund and $36,893 decrease in the CDBG Fund.
• Miscellaneous Grants Fund - Measure A Local Solutions Funds allocated by the County of Los Angeles Homeless Initiative to replace Measure H funds beginning in FY 2025-26. $0.85 million increase.
Personnel Changes
Personnel costs represent approximately 76% of the City’s departmental budget, with a citywide FTE count of 2,149.3 for FY 2025-26, including permanent and as needed staff. The updated proposed budget includes personnel changes addressing:
• Measure K funded initiatives and approved revenue generating initiatives. The changes result in the addition of 11 permanent FTEs (10 in the General Fund and 1 in the Beach Fund) and 3 temporary FTEs in the General Fund. • Clean-up items that do not result in a net increase in positions, including job title updates to better align job titles with current labor market nomenclature and ensure position titles accurately reflect the work being performed.
These changes are reflected in attachment F.
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The Salary Resolution (Attachment E) is also included. These adjustments are the result of salary studies conducted by Human Resources staff as required under the terms of their labor agreements or when requested by departments seeking to address operational or recruitment/retention issues. The adjustments also reflect increases to the City’s living and minimum wages, as defined in SMMC Chapters 4.62 and 4.65.
Although these ordinances do not apply to government agencies, including the City itself, the City has historically chosen to align salaries for City classifications with these wage levels, as appropriate. Staff will continue to monitor the impact of the new living and minimum wage rates and return to Council if additional appropriations are needed.
Fees/Fines/Rates
Fees
Attached for Council approval is the annual update to the City’s Master Fee Resolution (Attachment G). As included in the original proposed budget, most fees are being increased administratively by the City’s estimated annual increase (4.1%) in total compensation costs. Additionally, a number of new fees and adjustments to certain other fees are proposed. Staff is now proposing a few changes in addition to the ones presented at the study session. These are described below.
Parking
There are no proposed rate changes to transient and permit parking at lots/structures at this time; however, residential and visitor preferential parking permit fees are increased reflecting direction given by Council at its May 27, 2025 meeting and to enhance cost recovery. A comprehensive parking rates resolution (Attachment I) states all the parking fees and rates provided for Council to affirmatively approve them. The resolution provides for the following changes: 1) Extend the downtown discount validation program and the bulk parking fee agreement for the State of California Judicial Council through June 30, 2026; 2) Adjust the overnight parking fees for oversized vehicles and certain preferential parking fees by the City's annual administrative adjustment and increase all other preferential parking fees to enhance cost recovery as directed by City Council at the May 27, 2025 meeting; 3) Continue the Pilot Electric Vehicle Parking Permit for 14 of 22
certain parking lots for both electric and plug-in hybrid vehicles; and 4) Add clarifying language regarding vehicle length for the free parking of vehicles displaying current and valid disabled placards.
Council also asked staff to evaluate the implementation of a hardship waiver program in conjunction with the increase in preferential parking fees. The Department of Transportation Parking Division does not currently have a hardship waiver program for residential parking permits (RPPs) or any other permit it administers. The Parking Division does provide a form for a Low-Income Payment Plan for Citations as required by California Vehicle Code 40220.
While the City offers financial hardship programs in different areas, no analogous hardship waivers exist. City utility discount programs mirror the PUC program so if someone qualifies for a Southern California Edison or Gas Company program, they will also qualify for a reduction of fees for City utility services. The Recreation and Arts Department (RAD) and Housing and Human Services (HHS) Department make available a “financial assistance” program for youth programs to provide access to those who would otherwise be unable to afford participation. Assistance coverage ranges from 25% to 100%, based on HUD income limits. Applicants must submit income verification for all adults in the same household, along with proof of residency or proof of school permit in Santa Monica. The application process typically takes up to three weeks for RAD and HHS staff to review and process.
While the preferential parking permit fees will double in most cases, they remain relatively affordable as these permits are renewed annually. In addition, the revised fees remain below the City’s reasonable costs in operating its preferential parking program. The new permit fees would range between $40 ($3.33 per month) for a single car up to $144 ($12 per month) for a fourth vehicle permit. In response to Council direction, staff looked at neighboring jurisdictions and could not find a hardship waiver program in place that staff could readily model in Santa Monica. In assessing the relative financial impact, the potential complexity for customers, and the current 15 of 22
resources of the Parking Division to create and administer such a program, staff is unable to develop a hardship waiver program at this time.
Convenience Fees for Parking Transactions
Consistent with direction received from the Council at its March 8, 2025 workshop, the Department of Transportation is proposing to implement convenience fees for credit and debit card payments for parking-related transactions – including those made in person, online, and at all City-owned parking lots and structures. The intent is to shift payment processing costs currently paid by the City to individual users who choose to pay with a credit or debit card.
In FY 2020-21, City Council adopted a resolution that established convenience fees for non-parking related payments. Due to higher costs and system limitations at the time, City staff recommended that the City continue to absorb fees for parking-related transactions, with the understanding that these costs could be recovered through future rate adjustments.
Following consultations with the City’s parking system vendors, staff has determined that a phased rollout of convenience fees for parking payments is now feasible. This approach would allow the City to gradually transition the cost burden to users who choose to pay with a credit or debit card, aligning with practices already in place for non-parking-related services.
Staff recommends the following initial steps:
• Expand the existing 2.95% convenience fees to payment transactions for parking citations and preferential parking permits.
• Increase the convenience fee for phone and online payments for parking citations and preferential parking permits from $1.00 to $2.50.
The phased rollout of these convenience fees is planned to begin in FY 2025-26, subject to vendor timelines, system readiness, and implementation capacity. 16 of 22
Implementation of convenience fees for all other parking transactions – including onstreet parking, off-street parking, monthly keycards, and special event activations – will follow, but is contingent on receiving approval from the California Coastal Commission.
Due to the unpredictable length of time required for Coastal Commission review, necessary system upgrades, and upcoming service and system RFPs, broader implementation with respect to these transactions is currently targeted for FY 2026-27 and any additional anticipated cost savings or new revenue will be incorporated in the budget at that time.
Fines
In an effort to deter violations and noncompliance with six specific sections of the Santa Monica Municipal Code, staff is proposing new fines in addition to the ones presented at the May 27, 2025 Budget Study Session (Attachment H). The proposed six fines are listed in the table below:
Code Section Proposed Violation Description(s) Fine
SMMC 3.12.600
Pedicab Operations on the Beach Bike Path and/or
Beach Promenade
$250
SMMC 3.36.240
Fences and walls which are created or maintained in a
manner which creates a hazard
$250
SMMC 6.50.040 Business License Required (Pedicabs) $250 SMMC 6.50.060 Pedicab Identification Decal $250
SMMC 8.08.090 Standard Inspection Violation $500
SMMC 8.92.010 Violation of Housing Code $250
In addition to the six proposed fines, staff is proposing to increase the rates for standard and repeat violations listed in the footnotes of the Administrative Citation Fine Schedule.
Standard Fine and Repeat Violations
The City issues administrative citations for violations of the Santa Monica Municipal Code. The current standard base fine amount for an initial violation of the Santa Monica Municipal Code is $75.00. This standard $75.00 base fine amount applies unless the 17 of 22
Master Fine Schedule identifies a higher non-standard fine. The $75.00 standard base fine amount has not changed for several years and is not sufficient to deter code violations. To encourage compliance with the Santa Monica Municipal Code staff is proposing to increase the standard administrative citation fine (for first violations of any Santa Monica Municipal Code) from $75.00 to $150.00. For repeat violations of the same code section within 36 months from the date of an administrative citation, the City currently imposes a fine for second violations that is equal to 125% of the first violation fine amount. If the same code section is violated again within 36 months from the date of an administrative citation, then the City currently imposes a fine for third violations (and subsequent violations) that is equal to 150% of the first violation fine amount. To address the continued challenges posed by repeat offenders and deter repeat code violations, staff is proposing to increase the fines for second and third violations to 200% and 300% of the first violation fine amount, respectively.
Gann Appropriations Limit
State law places limits on the amount of Santa Monica’s General Fund appropriations that can be made without voter approval based on a growth factor calculated on changes in Los Angeles County’s population and either State per capita personal income growth or the growth in non-residential assessed valuation. This restriction was placed in effect in November 1979 with the approval of Proposition 4, commonly known as the (Paul) Gann Initiative. The City’s Gann Appropriations Limit, based on the State of California per capita personal income multiplied by the annual percentage population change for the County of Los Angeles in FY 2025-26 is $3,271,593,616.
A comparison of the City’s FY 2025-26 Gann Appropriations Limit as set forth in the City’s Proposed FY 2025-26 Biennial Budget follows:
Proposed Gann Limit-related Spending for FY 2025-26
Gann Limit $3,271,593,616
Appropriations Subject to Limitation 350,990,707
Net (Over) Under $2,920,602,909
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FY 2025-26 appropriations subject to limitation are $2,920,602,909 less than the City’s Gann Appropriations Limit. A resolution to establish the City’s FY 2025-26 Gann Appropriations Limit is included in Attachment K.
Adoption of Resolution related to the Road Repair and Accountability Act Enacted in 2017, the Road Repair and Accountability Act (RMRA) of 2017 establishes the Road Maintenance and Rehabilitation Program (RMRP) to address deferred maintenance on the State highway and local street and road systems. The City is required to adopt a resolution delineating those projects proposed to receive fiscal year funding from the RMRA. Estimates provided by the League of California Cities indicate that Santa Monica will be eligible to receive approximately $2.4 million in FY 2025-26, in addition to the City’s existing annual gas tax revenues of approximately $2.6 million.
Consistent with past practice, staff recommends using the FY 2025-26 estimated allocation of $2.4 million for the Annual Paving and Sidewalk Repair Program capital improvement project, per the attached resolution (Attachment L). No budget adjustment is required for this project, as the project has already been included in the FY 2024-26 Biennial Capital Improvement Program Budget.
Council Members Travel Funds
Resolution No. 11314, adopted on January 26, 2021, establishes, among other things, the methodology for allocating travel budget to the mayor and councilmembers. Per direction received on May 27, 2025, staff have attached an updated resolution that modifies the allocation to support the Mayor’s unique travel obligations, particularly with respect to national and regional policy bodies, as well as assigned councilmembers’ attendance at key regional and state events (Attachment M).
Council Discretionary Funds
Each year, Council allocates discretionary funds to assist the community in special projects or support important but otherwise unfunded priorities. Traditionally, Council has supported community partners like the Business Improvement Districts, Santa Monica traditions like the Fourth of July Parade, one-time programs, and local students through science or music grants that allow Santa Monica youth to participate in special 19 of 22
events. Projects and programs supported by Council discretionary funds for the past five years are detailed in Attachment N. Allocation of the funds may occur along with budget adoption or throughout the year. Including unprogrammed FY 2024-25 discretionary funds ($9,745) and FY 2025-26 discretionary funds ($127,653), the Council has access to $137,398 in discretionary funds in FY 2025-26.
Environmental Review
The FY 2025-27 Proposed Budget is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines (common sense exemption), which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” This report provides a programmatic overview of the City’s budget. The implementation of capital projects or programs would be subject to future CEQA review as applicable.
Therefore, it can be seen with certainty that actions would not result in adverse physical impacts on the environment, and as such, is exempt from CEQA. Additionally, changes to fees and parking rates is exempt pursuant to Section 15273 of the CEQA Guidelines, which states that CEQA does not apply to the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, and other charges by public agencies.
Furthermore, changes to employee salary rates is exempt pursuant to Section 15324, which exempts actions by regulatory agencies to regulate working conditions, including employee wages.
Financial Impacts and Budget Actions
The FY 2025-27 Citywide Budget as revised by Final Changes, including operating and capital budgets, is approximately $793.3 million and $829.7 million, net of reimbursements and transfers, in FY 2025-26 and FY 2026-27, respectively, as described below:
Revenues FY 2025-26 FY 2026-27
General Fund $ 473,511,147 $ 492,252,328
Other Funds 456,463,817 485,390,400
less Reimbursements & Transfers (R&T) A(115,372,270) (119,357,376) 20 of 22
Total Citywide Revenues $ 814,602,694 $ 858,285,352
Expenditures FY 2025-26 FY 2026-27
General Fund $ 483,382,475 $ 499,411,512
Other Funds 425,243,151 449,649,779
less Reimbursements & Transfers (R&T) A(115,372,270) (119,357,376) Total Citywide Expenditures $ 793,253,356 $ 829,703,915 The following table details the FY 2025-26 permanent and as-needed FTE:
FY 2025-26 Staffing Permanent As-Needed Total
General Fund 1,296.0 79.7 1,375.7
Other Funds 765.0 8.6 773.6
Total Citywide FTE 2,061.0 88.3 2,149.3
The following tables detail the operating and capital expenditures presented above:
Operating Expenditures FY 2025-26 FY 2026-27
General Fund $ 467,301,646 $ 477,984,960
Other Funds 332,149,734 334,129,724
less Reimbursements & Transfers (R&T) A(100,005,680) (103,332,984) Total Citywide Operating Expenditures $ 699,445,700 $ 708,781,700 Capital Expenditures FY 2025-26 FY 2026-27
General Fund $ 16,080,829 $ 21,426,552
Other Funds 93,093,417 115,520,055
less Reimbursements & Transfers (R&T) A(15,366,590) (16,024,392) Total Citywide Capital Expenditures $ 93,807,656 $ 120,922,215 A These are technical adjustments to eliminate double counting of certain revenues and expenditures appearing in two funds.
Adoption of the Proposed Budget, as amended by Final Changes described in the Revisions to Proposed Budget section of this report, would formally adopt the first year and approve the second year of the City’s FY 2025-27 Biennial Operating Budget, 21 of 22
including adoption of the second year of the FY 2024-26 Capital Improvement Program Budget. In addition, adopting the resolutions in Attachments A, B, and C would:
• Authorize staff to roll over appropriations for multi-year operating grants not completed at the end of the fiscal year, unspent donations dedicated to programs, and the encumbrances for goods and services contracted for by FY 2024-25 year-end but not delivered or provided until FY 2025-26; and • Authorize staff to roll over appropriations for the General Fund and all other NonGeneral Fund unencumbered balances and unexpended encumbrances for the FY 2024-25 capital improvement program budget.
Prepared By: Jennifer Young, Budget Manager
Approved Forwarded to Council
Attachments:
A. Attachment A - Budget Resolution (City Council)
B. Attachment B - Budget Resolution (Housing Authority) C. Attachment C - Budget Resolution (Parking Authority) D. Attachment D - Changes to Measure K Enhancements
E. Attachment E - General Salary Resolution
F. Attachment F - Position and Classification Changes
G. Attachment G - Master Fees Resolution
H. Attachment H - Master Fines Resolution
I. Attachment I - Parking Rates Resolution
J. Attachment J - Convenience Fees Resolution
K. Attachment K - Gann Appropriations Limit Resolution
L. Attachment L - Resolution for RMRA
M. Attachment M - Council Travel Resolution
N. Attachment N - Council Discretionary Funds
O. Attachment O - Revisions to Fiscal Policies
P. Attachment P - Hiring Freeze Positions Status
Q. Attachment Q - FY 2025-27 Proposed Biennial Budget (Web Link) R. Attachment R - May 27, 2025 Staff Report (Web Link)
S. Attachment S - Council Budget Motion
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T. Amended Exhibit B – added 6/23/25
U. Written Comments
V. PowerPoint Presentation
W. Presentation Item