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Letter to the Editor: Santa Barbara’s 2009 Budget Is Balanced, Without Use of Reserves

An April 25 editorial in another publication contained several points that require clarification.

• The proposed General Fund budget recently submitted to the Santa Barbara City Council is balanced. There is no deficit. With recent declines in the growth rates of some of our key revenues, we lowered our revenue estimates for next year by $3.3 million. In order to maintain a balanced budget, we have proposed adjustments, to both revenues and expenditures, totaling $4.1 million. These adjustments are sufficient to re-balance the budget and create an $800,000 contingency reserve in case of additional bad fiscal news.

• The proposed Police Department budget for next year is not being cut. In fact, it is $500,000 more than the department’s adopted budget for the current fiscal year. While this increase is not as large as originally planned, the city’s lowered revenue limits our ability to fund the original increase. The proposed adjustments do not reduce any patrol positions or gang enforcement activities. Regarding the other half of public safety, the recommended Fire Department budget represents an increase of almost $1.6 million over the current year’s adopted budget.

• The city’s General Fund reserves total $21.6 million, more than 20 percent of annual expenditures. Additionally, the city’s other funds, including water, airport, parking and waterfront, maintain their own, separate reserves. Taken together, the city’s liquid reserves total approximately $100 million. In addition, city assets such as the Granada Garage are covered by insurance, including earthquake coverage.

In summary, the proposed Fiscal Year 2009 General Fund budget is balanced without the use of reserves and contains more than $800,000 of unallocated funds to provide a hedge against additional revenue weakness or possible state budget impacts.

James L. Armstrong
Santa Barbara city administrator

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