Several hundred people met bright and early Tuesday morning to hear Santa Barbara leaders share the State of the City address, sponsored by the Santa Barbara Region Chamber of Commerce.

The biggest topic of the event, at Fess Parker’s DoubleTree Resort, was the city’s budget, presented by City Administrator Jim Armstrong.

Major revenues have dropped dramatically while demand for services continues to grow, he said.

The city’s budget hovers around $250 million, and $104 million of that comes from the city’s general fund, which is funded through taxes and goes to pay the salaries of workers such as police and fire.

Armstrong said that of the 1,079 city employees, 679 of them are funded by general fund monies.

Since Santa Barbara has seen dramatic declines in sales taxes, $4.1 million in losses since 2008, Armstrong said those losses have set the city back 11 years in revenue growth.

Bed taxes from the city’s lodging industry are also down dramatically, as well as property taxes. Armstrong said the county is reporting its first property tax declines since Proposition 13 was enacted 32 years ago.

Three-quarters of the city’s general fund go toward the salaries and benefits of employees, a ratio Armstrong said was “pretty typical” when compared with other municipalities.

In response to the city’s budget pinch, which could see a $9 million shortfall next year, Armstrong said the city has eliminated 37 positions and held 51 vacant.

But those steps aren’t enough, according to Armstrong, and the city must start negotiating with its seven labor unions that represent city employees.

If the unions were willing to give 10 percent in concessions, Armstrong said the city could save nearly $7 million. If they’re unwilling to negotiate, cuts would be unavoidable.

“I’m strongly encouraging our labor unions to work with us,” he said.

Mayor Helene Schneider also was a key speaker Tuesday morning.

A new council has taken the helm this year, which Schneider said has “rolled up its sleeves” to deal with issues such as the spay/neuter ordinance and medical marijuana dispensaries, and now will begin working on updating Santa Barbara’s General Plan.

“These are tough times,” Schneider said. “Yet we know Santa Barbara is a resilient community.”

Schneider talked about many of the city’s projects that are under way, including the airport improvement project and the seismic update of the Carrillo Recreation Center, which is slated to be completed in December.

Schneider said slim resources at the city have encouraged more partnership with the philanthropic and business communities, which will be key this fiscal year. Homelessness and gang issues are two areas that have benefited from these partnerships, according to Schneider.

With after-school recreation programs seeing more children than ever, Schneider encouraged the audience to support the PARC Foundation to keep these programs operating and free to the public.

“We’ve truly reached a point where we have to leverage the resources we have,” she said.

Click here to view the State of the City address online.

Noozhawk staff writer Lara Cooper can be reached at

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