The City of Goleta expects a $1.14 million shortfall for the next fiscal year, Finance Director Tina Rivera said at Tuesday’s City Council meeting.

Tax revenues are expected to increase at modest rates next year and even more the next with the 10-year anniversary of the city. For the 2012-13 year and beyond, he said Goleta will get a larger portion of its sales and bed taxes under its revenue neutrality agreement with Santa Barbara County.

Rivera explained that the base budget — costs from staff, services and the contract with the Sheriff’s Department — is expected to level out between revenues and expenditures at about $14.3 million, but once increased costs in the safety contract and utilities are considered, the city is expected to be $1.14 million in the hole.

The public safety contract with the Sheriff’s Department accounts for $6.4 million of the city’s budget, and it’s scheduled to increase by $700,000 for the same number of officers, Rivera said. Other personnel costs come out to a little less than $5 million, with at least 75 percent of employees at the top of the salary scale, and supplies and services costs come out to about $3 million.

The City Council will discuss in later budget meetings the options for making up the difference, including increasing revenues, cutting expenses or using reserves.

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