After Santa Barbara staff tackled the Herculean task of balancing the city’s 2010 budget, the City Council passed the budget unanimously Tuesday — with a caveat.
“Here we are today before you for adoption of the fiscal year 2010 budget … it’s a budget that, in staff’s opinion, already has a $1.4 million hole in it,” Bob Peirson, the city’s finance director, told councilmembers as he walked them through what had transpired.
Recent developments have surfaced since June that make the budget’s future uncertain. City sales tax numbers for the first quarter came in recently and were down 17.6 percent, which represents an unprecedented decline, according to Peirson. “In my 20-plus years here, I’ve never seen a quarter like that,” he said.
When city officials factor in that decline, they will be forced to revise their sale tax estimates for the coming fiscal year, most likely lower by $1.1 million. That number is determined by the latest projections sent from the California Department of Finance.
May’s transient occupancy tax was down 15.7 percent, putting next year’s projections at $300,000 less than expected.
Nine budget review sessions and public review hearings have been held since the budget was released April 21. The council then went through and made additional adjustments to the budget at its June 9 meeting.
No city department went unscathed, and a combination of cost savings, revenue increases, and ongoing and one-time measures, such as reducing money to set aside for a vehicle replacement fund, were all part of the city’s approach to balance the budget.
Adding to the uncertainty, the city’s gas tax and property taxes are not off the table either, and could be subject to seizure from Sacramento.
Much of Tuesday’s discussion centered on several positions in the police department that remain unfilled. Four police officer positions are waiting to be funded by stimulus money, and the city will not know until September if those grants will be filled. A grant application also is pending for a fire education outreach coordinator.
Two nonsworn positions also remain unfilled, for a rangemaster and a network technician, which will equal $152,000 in savings. Peirson said the staff is not recommending the restoration of those positions at this point because they may have to return in the coming weeks for more budget changes.
He also said the Police Officers Association had submitted an offer of labor concessions totaling $260,000, the bulk of which would come from vacation, compensatory and holiday cash-outs. The association also offered to extend the offer to next June. It was set to expire in December.
Councilmember Roger Horton said the positions shouldn’t be filled right now. “Tonight is not the time to start putting things back in the budget when we don’t even know what the deficit is,” he said. “Maybe in six weeks we can talk about restoring something.”
Although she was hesitant to make cuts to public safety, Councilmember Iya Falcone said she would support the budget as long as the whole group was willing to come back for discussions.
Councilmember Grant House suggested the members approve the budget but that they revisit it in the coming months. “All the departments have made their best recommendations as to what services to keep to the public as a whole, and I think we should honor that,” he said.
Expressing his concern over the loss of civilian support staff at the police department, Councilmember Dale Francisco said the current budget had structural problems. “As much as I would like to see those positions restored … the things that we put back two weeks ago are already in jeopardy,” he said.
“We’re passing it, it’s formally balanced, but we already know it’s not going to work,” he said.
“I believe that we should make the adjustments for reality right now,” Councilmember Das Williams said, and budget for the shortfall. He said he wanted to make sure the grants for the sworn officers came through before the city chose to fill the information technician position was filled. Revenues would need to be increased as well, and Williams suggested a tax on marijuana dispensaries and ask the voters to approve a 10- to 15-cent charge on single-use bags.
“I think what we’re all saying is that as hard as this year was, we’re nowhere near over trying to figure out the full structural deficit of the city’s budget,” Councilmember Helene Schneider said. The city has become smaller and more efficient in the process, she said, and she advocated approving the budget and coming back to evaluate in the coming months after more information comes forward.
“I like the idea that the staff is going to look at the bigger picture and bring it back to us,” Mayor Marty Blum said. “It’s going to be interesting to see what the next three months of sales tax is. We need to be very prudent and cautious.”
— Noozhawk staff writer Lara Cooper can be reached at lcooper@noozhawk.com.
