The Goleta City Council discussed the general fund budget at a Wednesday workshop and reiterated its commitment to funding the rest of the San Jose Creek project, which could be $1 million underfunded.
The council voted to put $1 million of unassigned reserves into a special account just for this project, on which it will take final action later this year along with the rest of the budget.
Finance Director Tina Rivera said the city’s revenues are assumed to grow 2.5 percent every year, and expenses are growing 4.5 percent every year. At that rate, the city will stop having its 5 percent “cushion” of reserves in the 2015-16 year if it spends all of the discretionary money as planned.
The city could get more money if the revenue neutrality agreement with Santa Barbara County is renegotiated, but that’s unlikely, according to Councilman Ed Easton.
“I expect that will happen sometime shortly after pigs fly,” he said.
Voters did increase the transient occupancy tax rates in November — from 10 to 12 percent — and more of the city’s revenues come from those bed taxes now, which is a more vulnerable source of income than other taxes.
While going through the list of discretionary budget items, City Manager Dan Singer reminded council members to consider whether items are one-time expenses versus ongoing costs, such as employee salaries.
The threat of losing former Redevelopment Agency money to the state Department of Finance isn’t really being considered in the next two budgets, since the city plans to fight the issue.
“They want $18 million, we’re going to fight them tooth and nail, and we think that $500,000 may be vulnerable,” Singer said.
There was consensus on adding a new Capital Improvement Program manager, with a cost of $131,490 annually, adding another $500,000 to the future City Hall reserve fund and another $500,000 to the streets maintenance fund.
“Our single largest need is street maintenance,” Public Works Director Steve Wagner said.
There was some debate over giving $150,000 to the Goleta Valley Chamber of Commerce, but the item received preliminary approval over the misgivings of Councilman Jim Farr and Councilwoman Paula Perotte.
Perotte said she struggled with the item not because she didn’t see the need, but because of the large dollar amount in such an uncertain economic time.
“I’m not so sure the timing is right,” she said.
Singer also talked about employee salaries and the city’s goal of having salaries around the 75th percentile of peer agencies — in Santa Barbara, San Luis Obispo and Ventura counties — because of the high cost of living on the Central Coast. That level hasn’t been an “explicit” policy in the past, but has been the practice for the last decade, he said.
A recent salary survey showed that many of the city’s employees are paid above or below that level, and administrators want to level that out. Mayor Roger Aceves asked for more detailed information on this item since the survey looks only at salaries, not the “fully loaded” position with benefits.