The city of Santa Barbara has not fully recovered from the 2008 recession, and is facing a new challenge — unprecedented increases to pension costs.
“We are now in the middle of the longest recovery period in history,” said Bob Samario, city finance director. “We are in year 10 of a recovery session, and that is the longest we have ever seen.”
The council held a workshop last week to kick off budget discussions ahead of the release of the proposed 2020-21 spending plan in early April.
The meeting brought no answers — but plenty of information — to prepare the council for the upcoming budget deliberations.
The city still has not caught up from the cuts of the recession. Today it has 624 full time equivalent positions; in 2008 it had 662 positions.
Samario said he expects “unprecedented” pension costs between 2019 and 2025, and an “uncertain economy.”
Although Santa Barbara will survive, he said, some cities will file bankruptcy because of the looming pension costs.
“This is the real deal for some cities that aren’t financially strong,” he said. “It will hit them hard.”
Although the city is in strong financial shape, it will need to think proactively to cover pension costs, including making some service cuts in the next several years.
The city’s current unfunded pension liability is $330.7 million.
Police officers are responsible for 42 percent of that amount, followed by fire personnel at 33 percent and miscellaneous employees at 25 percent.
The city’s general fund budget for 2019 is $156.1 million.
“We have to think about what options we have to enhance our revenues,” Samario said.
One new growth area is with cannabis. The city expects about $800,000 in revenue in 2020 from cannabis taxes.
However, City Administrator Paul Casey cautioned the council against thinking that cannabis revenue will be the cure-all for the city’s financial problems. The city has only permitted three retail dispensaries, and it is unclear how much tax revenue they will generate once all are open.
Councilman Jason Dominguez raised the question of what the city was planning to do to decrease homelessness.
“What is the cost to the city in terms of the homeless problem,” Dominguez asked. “It seems like it has increasingly been getting more and more. There have been increasingly more complaints about people camping out in the field.”
Police Chief Lori Luhnow responded that the homeless problem affects everyone and across all city departments. Her department receives about 19 calls a day for service related to homeless issues — a jump from 6 percent to 12 percent over the past year, she noted.
“Directly for us, there’s been some workload increases that have culminated in more radio calls, meaning less time that we are available for other things,” Luhnow said.
City Attorney Ariel Calonne said the city has focused on the behavior of homeless people for months and years, but is now turning its focus to ways to limit the amount of possessions or “garbage” that homeless people accumulate.
“We have spent a lot of time as staff thinking about homelessness,” Calonne said. “The complaints I see are about all the accumulated stuff.”
— Noozhawk staff writer Joshua Molina can be reached at jmolina@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.