Thanks to a healthy tourism industry, the City of Solvang remains in good shape financially, according to a presentation provided Wednesday.

The Solvang Chamber of Commerce hosted the State of the City luncheon at the Craft House at Corque with approximately 140 people in attendance.

“The state of the city is going very well,” City Manager Randy Murphy said.

In addition to the Solvang city leaders, Assemblyman Gregg Hart, D-Santa Barbara, spoke about the housing crisis and other issues facing the state.

It marked the first State of the City presentation for Murphy, who arrived in the spring.

He included his first-grade school picture in a slideshow before quipping, “This is a photo of my first day on the job. Obviously, I’ve aged a little bit.”

Since his arrival, Solvang has a new marketing team after securing contracts with three firms, he added. 

“We’re looking forward to increased tourism,” he said. 

Tourism dollars account for 50% of the city’s general fund revenues. 

“Those tourist dollars help keep taxes down for residents and are the main reason Solvang is debt free at this time,” Murphy said. 

He also noted the performance of city crews who dealt with flooding and other issues that arose after the heavy rains earlier this year.

“I could not be more impressed with what the city staff did and how they did and what they did to keep the city safe and supported during these critical rain events,” Murphy said. 

He quickly ticked off various development projects — a senior center, hotels, eateries and condominiums — proposed in the city along with the hiring of a new planning manager, who should start in mid-September.

Solvang continues working to upgrade its wastewater treatment plant with hopes of getting federal funding to help with the $17 million project, Murphy said, noting that he would be meeting with Congressman Salud Carbajal later Wednesday regarding the request.

Negotiations remain ongoing to reach a new agreement with the Santa Barbara County Sheriff’s Office and a new labor pact with city workers, Murphy said.

Sheriff’s deputies serve as Solvang’s police department, one of four cities that contract with the agency for law enforcement services.

In his speech, Hart shared about a recent grocery store trip where he learned the employee lived in the San Fernandez Valley but had been asked to cover shifts in Santa Barbara. The company paid for her to stay in a hotel and provided overtime to keep the business open.

“That, I think, is a scary omen and a really important message to all of us that the way we have been doing things for the past 20, 30 years aren’t working now,” he said. “And it’s really kind of a simple matter of math.”

About 30 years ago, the average income in California was $60,000 while the average home price hovered at $200,000. Now, the average income in the state is $85,000, but home prices have skyrocketed to an average of $800,000. 

“That’s why we have a housing crisis — that price disparity is just dramatic,” he said.

Housing costs remain a key driver of homelessness, he added.

At the end of the luncheon, Rene Martinez, the Solvang Chamber of Commerce board president, also announced the launch of a new award named for John Martino and honoring a business that has undertaken the best beautification project.

The John Martino Beautification Award will be given out for the first time this fall.

Martino, a longtime leader in Solvang’s hospitality industry, has been involved in the Solvang community in various ways through the years. 

Beautification projects have been Martino’s passion through the years, Martinez said. 

“John has spent years making sure our community thrives, making sure our community and our business look good, maintain a beautiful presence,” Martinez said.