The Carpinteria City Council on Monday directed staff 4-1 to look into putting a sales tax increase on the November ballot and begin public outreach after hearing from a consultant and staff about ways to increase revenues.

Mayor Natalia Alarcon voted no, stating she would like to have a more comprehensive strategy to vote on.

Staff will come back in May with ballot language and a more detailed outreach strategy for the council to review. If the council approves that language in May, they’ll vote in June on whether to put a tax on the November ballot.

The city currently has a total sales tax rate of 9%. The current statutory cap is 9.25%.

An additional 0.25% transactions and use tax, known as a TUT, could bring in an extra $694,500 annually into the city’s discretionary funds, staff said.

Carpinteria revenues are not keeping up with expenditures. Rising day-to-day costs continue to eat at the city’s dwindling discretionary funds, which cover general costs such as police and library services, staff have said during budget discussions.

The city doesn’t have its own police force; it contracts services through the Santa Barbara County Sheriff’s Office.

That contract has significantly increased in cost since 2021, when it jumped up 37% to $5 million. It will be $6.9 million for the fiscal year starting July 1. (Santa Barbara County is separately dealing with the rising cost of law enforcement services. The Board of Supervisors said in February they would audit the Sheriff’s Office overtime costs.) 

The city is also facing “substantial” infrastructure and deferred maintenance needs, as well as a “growing backlog” of capital improvement projects that remain unfunded, staff said. 

That breaks down to $14.8 million in deferred maintenance and $133.6 million in unfunded project costs, which are increasing as the cost of construction continues to jump, staff said. 

The city took a hit when property owners voted against separate assessments that would have funded the $1.15 million cost of right-of-way landscaping services and the $80,000 cost of putting up the city’s seasonal berm.

The beach berm, a sandy structure that protects properties along the coast during storms, goes up each winter. 

Staff attributed the assessments’ failure in part because many of Carpinteria’s property owners don’t actually live in town and instead rent their properties out. 

“You’re asking people who don’t live locally to spend more money that’s going to go to our community,” city legal counsel Jena Shoaf Acos said. 

Councilmembers on Monday also looked at a utility users tax, a parcel tax, and business license tax reform. 

They ultimately agreed that a sales tax increase is more feasible because it has a lower voter threshold and would be partially paid for by tourists who spend money when they visit. 

Surfliner Inn developer Whitt Hollis said during public comment that the inn is now estimated to bring in $1.8 million yearly for the city between taxes and the lease.

“You have a project that will give you significant amount of money,” he said.  

That project has, in one form or another, been in city discussions for a decade.

Under the proposal, the city would lease the 499 Linden Ave. land, currently a city parking lot, to the developer — a point of contention among residents who believe public land shouldn’t be rented out for private profit.

The inn is set to go before the Carpinteria Planning Commission this year. The design received Architectural Review Board preliminary approval in December.

During public comment, Alan Koch said from the community’s perspective, the city is “not managing expenses” and putting the problem “on the shoulders of the residents.” 

Patrick O’Connor suggested the city focus on a way to tax non-resident or vacant property owners, “people who are taking advantage of the value of their properties but not contributing through presence.” 

Shoaf Acos, the city legal counsel, said other cities’ so-called vacancy taxes are currently being challenged in court, so she would not recommend the council pursue that at this time.

At one point during council discussions, an audience member muttered, “cut expenses.” 

“Okay, cut expenses, but what, do we cut the sheriff? How do we do that? That’s not even an option,” Councilmember Julia Mayer said.

Councilmember Wade Nomura said previous Carpinteria governments were “extremely conservative” and “put a lot of money aside to the point of being a detriment.”

“Now we’re looking at deferred maintenance for things that weren’t paid for, now we’re looking at a deficit, because we did not keep up with the cost of living in this community,” he said.

The city last put a 1.25% sales tax rate increase on the ballot in 2018. 

Putting a 0.25% increase on the November ballot would cost the city roughly $100,000, accounting for staff time, outreach and county fees.