The City of Carpinteria’s revenues are still not expected to keep up with expenditures, staff said at a midyear budget report on Monday.

The revised budget approved by the Carpinteria City Council on Monday includes an estimated $33.9 million in revenues and $35.8 million in expenditures.

The city originally had budgeted $32.6 million in revenues and $35 million in expenditures for the current fiscal year, which runs July 1, 2025, to June 30, 2026.

Because expenditures continue to outpace revenues, the city’s available fund balance for its discretionary funds — the General Fund and sales-tax-driven Measure X — is expected to continue decreasing over time.

Those funds are the city’s primary financial support for its day-to-day operations, including law enforcement and library services.

The city doesn’t have its own police force; like nearby Goleta, it contracts with the Santa Barbara County Sheriff’s Office. That cost has spiked.

During the past few years, the city has unsustainably relied on its discretionary funds to subsidize programs and services that the funds weren’t originally supposed to support because of rising expenditures, city staff said during budget discussions last year.

The General Fund and Measure X available fund balance has decreased since it hit $8.7 million in fiscal year 2022-23. Staff estimated the balance will dip to $3 million in fiscal year 2026-27.

Carpinteria Administrative Services Director Licette Maldonado and City Manager Michael Ramirez broke down the city’s midyear budget report for the council.

Each year, staff bring the updated budget back to the council halfway through a fiscal year for review and adjustments. Adjustments are required if costs come in higher than expected or additional services are needed.

Those proposed adjustments first come to Ramirez for review, then to the city’s financial committee — which reviewed these specific adjustments on March 2 — and then to the council.

Maldonado said the majority of the adjustments were related to one-time revenues or expenditures, accounting corrections, and alignments with current financial trends. 

Staff attributed increases in budgeted revenues to, among other things, additional grants and a higher-than-expected bump from the city’s transient occupancy tax.

Separate budget adjustments to the city’s capital fund projects are scheduled to come before the council on March 30.

Ramirez said the city staff is continuing to work on long-term strategies to address the gap between expenditures and revenues.

That includes introducing new assessments, such as the proposed Landscape Maintenance Assessment District and the Coastal Berm Assessment District. 

Staff said right-of-way landscaping and berm services — as well as park maintenance costs — are still “heavily subsidized” by the city. The assessments city residents pay each year to support those services do not cover the actual cost. 

However, property owners apparently rejected the new landscape and berm assessments, according to unofficial ballot counts. The results are set to be announced on March 23.

New assessments for park maintenance most likely will come before the public in the future, Ramirez said. 

Ramirez said the city is “doing everything we can to conserve costs,” but it is difficult with rising expenditures such as law enforcement services.

“I just want to assure people that we are definitely belt-tightening, but with those trajectories, the only way to get where we need to get is for the city to start having revenues that are keeping pace with those expenses,” he said.

He said he also wanted to dispel what he called a public misconception: The number of city staff is not drastically increasing. The city added three full-time staff members between 2020 and 2025, for a total of 43.

It can be more expensive in the short term to hire an outside consultant for a project, Ramirez explained, but it is cheaper than hiring a full-time staff member in the long term.