With Santa Maria facing a $25 million deficit, the City Council took steps Tuesday to ease the financial woes by keeping multiple positions vacant, halting key projects and starting to pursue possible tax hikes that would increase the costs to shop and rent in the city. 

The actions occurred during Tuesday night’s meeting amid heightened tension as Councilman Carlos Escobedo lashed out verbally at his colleagues who previously voted for employee wage hikes, declaring: “I told you so.”

Those increases add up to a small portion of the gap.

All five members of the City Council voted in favor of the budget amendments.

The “budget rebalancing” discussion led by Finance Director Rebecca Campbell offered up proposed cuts to help trim the gap, which has been hovering over the city for more than a year. 

“Today is a big first step in helping to resolve that, but we also need to keep in mind we are facing cost increases,” said Campbell, who began working for the city last year after the two-year budget’s adoption. 

Expenses continue to outpace revenues and most likely will continue to be unmanageable, Campbell said.

Those cost increases include $2 million in salary hikes previously approved after negotiations with unions, pension contribution hikes, a 10% increase in health premiums for 2026 or $1 million along with boosts for worker’s compensation insurance premiums and liability insurance premiums. 

Among the measures, the city will keep 38 full-time equivalent positions vacant, including 20 non-safety jobs.

The city also will save money by keeping eight full-time positions in the Fire Department and 10 vacant full-time positions in the Police Department empty for now. 

While some positions have been empty for a time, others, such as the public information officer slot, became vacant last year. Among slots remaining unfilled are two librarian positions, a library technician, a park services officer, a maintenance worker, two recreation services coordinators and more.

Those cuts will occur without any involuntary layoffs, the finance director said. 

The city previously implemented a hiring chill, but public safety vacancies continue to be filled. 

Additional savings will come from the cancellation of significant Fire Department projects adding up to $3.8 million. Those include Fire Station No. 1’s expansion, a parking lot maintenance project and the Training Center improvements. 

The city also will save $4 million by delaying or canceling a number of other city projects, such as rehabilitating Preisker Park.

In total, the various efforts will trim $12.5 million from the budget gap, but other measures will be necessary, city staff said.

At the end of the report, Escobedo accused his colleagues of acting irresponsibly to get union money and endorsements for campaigns, contending that he votes on matters on behalf of all residents.

Councilwoman Gloria Soto said her priority is to maintain service levels for city residents while looking at budget adjustments.

“We will continue to take the utmost care when it comes to continuing to close this budget gap while ensuring that it’s not on the backs of those who make the city run,” she said.

“The city doesn’t run without its employees, and if you have unhappy employees then it affects the level of service that the employees provide,” Councilwoman Maribel Aguilera-Hernandez added. 

She also called Escobedo’s comments disrespectful to the city’s employees who prepared the reports on the budget issues.

The discussion wasn’t only about expenses. The city’s building permits proceeds may come in $1 million more than initially estimated to help coffers.

The city also took a key step toward boosting revenues through possible tax hikes.

In a separate item on the consent calendar and approved without comment, the City Council approved the hiring of a consultant DHM Research for $36,500 to conduct a public opinion survey and ballot measure polling.

“To explore potential revenue resources to offset this deficit, the city is hiring a consultant to understand if there is public support for an additional one-half-cent transactions and use tax, and a tax on gross rental income for residential and commercial property,” City Manager David Rowlands said in his written report.

The Sacramento company’s questionnaire with both English and Spanish options will assess voters’ attitudes toward city services to assess whether the public would support a one-half-cent sales tax hike. The city’s current sales tax rate sits at 8.75%, and the proposal would see that rate rise to 9.25%.

In a second proposal to boost revenue, the survey would collect opinions on a tax for gross rental income for residential and commercial property.

Tuesday’s talks and action are expected to be the first as the city looks to further close the budget gap without harming service levels.

Rowlands said the analysis of various city services and programs will continue in the coming months ahead of the new fiscal year, which is set to start July 1.