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Saturday, December 15 , 2018, 3:04 pm | Fair 64º

 
 
 
 

Increasing Salary, Benefit Costs Central to Santa Barbara’s Projected Budget Deficit

City leaders hold a workshop to discuss strategies for shoring up sagging funds

Though city revenues are showing some recovery and there have been cuts in every department, Santa Barbara faces a structural deficit from its salary and benefit costs, finance director Bob Samario said at Thursday’s budget workshop.

Labor concessions are one-time solutions to deal with ongoing increases in retirement and health costs, he said. In 2014, Public Employees’ Retirement System costs will be 20.5 percent more than what the city pays now and all concessions will be expired, so the city will have to renegotiate, according to City Administrator Jim Armstrong.

Just to make up for lost investments in 2009, PERS rates will increase by large margins over a three-year period. In the general fund, which hosts tax-funded departments such as safety and public works, costs other than salaries and benefits are expected to be flat through 2014.

The city currently has $18.2 million of the policy-mandated $25.8 million in reserves, not only because of the drop in tax revenues. Even before the economy took a dive in 2008, the city negotiated salaries and benefits that it couldn’t afford and started consuming reserves, Armstrong said.

A handful of residents attended Thursday’s meeting but only two spoke.

“In 2004-07 when the years were good, you overspent, and when years turned bad, you had nothing left,” Jim Westby said.

For fiscal year 2011, the city expects a shortfall of about $3 million, a third of previous years’ challenges in balancing the budget. Bed taxes lost five years of growth and sales tax revenues have lost 10 years of growth, so many one-time measures have been used to balance the budget so far, Samario said.

The smallest departments have taken the biggest cuts so far, and citywide full-time staffing is at a 1999 level. Looking forward, city staff and and the City Council will work together to develop priorities and options to keep costs under control, and to try to avoid layoffs and effects on service.

Staff outlined such priorities as avoiding the use of more reserves, looking for efficiencies, extending labor concessions, maintaining or enhancing police presence, and dealing with infrastructure issues such as facility maintenance.

Assistant Police Chief Frank Mannix explained that even though the department is authorized to have 140 sworn positions, the functional strength — people who can actually show up to work — is much less, around 118. The gap is partly because 10 people are out on injury or leave, and partly because of the struggle to get officers through the academy and training and out on the street, he said. Of those training, about six of them will be out in their own black-and-whites within six months, and perhaps five more before the year’s end.

Last year, the City Council authorized the department to over-hire so more people would go through academy and field training, which takes six months and four months, respectively.

Police Chief Cam Sanchez assured the council that the department always keeps a full patrol staffed and prioritizes the most violent crimes. He also noted that major crime rates have been decreasing for years.

“In terms of the gang issue, we’re on it,” he said.

Council members threw out ideas and priorities, and Councilman Dale Francisco urged staff to take a close look at what the city provides and determine whether it’s vital.

“It’s hard to believe that a state with this many natural resources and human resources could be bankrupt,” he said, adding that 50 years of financial mismanagement will — and did — do it. “Salaries and benefits are up 4.4 percent in good years and bad because we — City Council, the Board of Supervisors and the state Legislature — have not controlled those costs.”

Francisco, like many others, prioritized a steady or increased police presence but said the city can’t continue to reduce services to citizens in order to maintain unsustainable benefits. He said police, fire, water, sewer and streets should be the priorities to be taken care of first.

Councilwoman Michael Self asked about a two-tier benefit system, in which newer hires wouldn’t get the benefits other employees do.

Ideas for increased efficiency — such as privatizing certain services or using hourly workers instead of salaried staff — and pursuing additional revenue sources were among other ideas thrown around.

Items such as park maintenance, which has been drastically cut in past years, should be re-examined while looking at the big picture, since the city’s parks and overall beauty contribute to driving the tourism economy, Councilman Randy Rowse said.

Since so many public safety resources are allocated to the “fun zone,” as Councilman Bendy White called it, perhaps bars and clubs and other businesses in the entertainment district could be tapped to help with the costs, he said.

Armstrong said the Redevelopment Agency could be axed by Gov. Jerry Brown, but staff want to pursue using funds for site and program-specific policing, though it’s probably a stretch.

Thursday’s meeting was the first of a months-long attempt toward a “results-based budget,” as Mayor Helene Schneider called it, and staff soon will return with each department’s suggestions for cutting costs to close the $3 million gap.

Noozhawk staff writer Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk or @NoozhawkNews.

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