It did not take long this week for the Santa Barbara City Council to finalize the vast majority of its fiscal year 2017-18 budget, and it compromised on the final piece of the puzzle: increasing the administrative fee the city levies on the other libraries in the county that it manages.
The council spent the last month and a half reviewing the $351 million recommended budget, which consists of $318 million in operating expenses and $33 million in capital work.
The city’s biggest fund is its General Fund, which covers 37 percent of the budget and is fed mostly by taxes, the largest of which is property tax.
Just over half the General Fund goes to police and fire services.
According to city finance staff, the fund is facing a projected $1.9 million gap next fiscal year and $2.8 million the year after, necessitating close to $1 million in reductions in city departments’ budgets.
Perhaps no other fiscal consideration has drawn more public energy than how Santa Barbara charges other cities’ libraries for its administration of them.
Library staff proposed doubling the administrative fee on the Goleta, Carpinteria, Solvang, Buellton and Montecito libraries to 18 percent from 9 percent to recover more of the costs of administering them. Full cost recovery is estimated to require a 21-percent fee.
Library patrons, county officials and other city representatives balked, arguing that the jump would be devastating.
On Monday evening, the council voted 6-1 to raise to fee to 13.5 percent for the upcoming fiscal year.
Councilman Gregg Hart called it “too much too soon.”
Some library staff and civic leaders from other cities alleged they didn’t know until recently that Santa Barbara was subsidizing part of their operations, and that crucial services and programs could end up on the chopping block with the increased library costs.
Each of the five libraries’ reserve balances will drain notably under the new fee, according to figures presented by the Santa Barbara Finance Department. Any increase in the fee would put Solvang and Carpinteria’s reserve balances in the red.
“Goleta’s library, like the others, will have very little time to raise more funds to adjust if a big fee increase takes effect in just a few weeks,” said Goleta Mayor Paula Perotte. “Every library may have to cut hours, staffing and programs.”
Santa Barbara library officials said a higher fee would mean the other libraries would be paying more of their fair share.
“I would like to again remind you that Santa Barbara has subsidized the branch libraries in Zone 1 for millions of dollars over the past 10 years,” said Milt Hess, who chairs the city’s Library Board, during Monday’s council meeting.
Councilmen Bendy White and Randy Rowse said the debate raised the possibility for them that it might not actually be in Santa Barbara’s best interest to administer five other libraries on top of its own two — and proposed that the arrangement be reviewed in the coming years.
“For the pleasure of losing money every year, we’re getting kind of the regional finger wag here,” Rowse said.
What everyone in the council chambers could agree on was the need for greater transparency.
“I think the lesson learned is that we need to cooperate more regionally on issues like this,” Councilman Jason Dominguez said.
Just as controversial — especially for Goleta — was Santa Barbara’s proposed new funding formula for county dollars that would send more money to Carpinteria, Solvang, Buellton and Montecito libraries at the expense of Goleta.
That funding is distributed based on the number of unincorporated residents served by each library. Santa Barbara posited that too many of those residents were in the Goleta column, and that re-allocating some of them to the other libraries would mean more equitable funding.
That did not sit well at all for Goleta library users and their elected officials, who had insisted that the Goleta Valley Branch Public Library really does serve vastly more unincorporated residents than its counterparts.
The council ultimately decided not to change the formula.
According to city staff, Santa Barbara’s “biggest financial challenge facing the community” is unfunded infrastructure maintenance and projects.
Earlier this year, the city put the next 20 years’ unfunded infrastructure needs at $546 million, including a new police headquarters, which is estimated to cost $80 million, plus $50 million in interest.
The Public Works Department has said $12 million annually is needed to keep up with road maintenance, though only a sixth of that gets put toward those needs each year.
The City Council has had to squeeze other parts of the city budget in order to perform triage on these unfunded needs.
The full extent of repair and upgrade work needed for storm drains, city facilities and other cornerstones of municipal infrastructure also carry seven-, eight- and nine-digit price tags. City officials hope a sales tax increase on the November ballot will make a big dent if it passes.
On Monday, the council also agreed to grant funding requests from three outside organizations.
The city’s contributions to the Central Coast Collaborative on Homelessness will grow 10 percent to just over $100,000. PATH Santa Barbara’s will continue on at $125,000, and the Housing Trust Fund of Santa Barbara County will receive $25,000 to support its South Coast Workforce Homebuyer Program.
The council was also expected to allocate $2.5 million in settlement funds the city received from claims in filed against Plains All American Pipeline, whose May 2015 pipeline rupture was behind the Refugio oil spill.
After attorney fees, $1.14 million is slated for the Cabrillo Arts Pavilion restoration project and $760,000 for Thousand Steps Beach renovation.
The budget will be formally adopted at the council’s regular 2 p.m. June 27 meeting, at City Hall at 735 Anacapa St.
— Noozhawk staff writer Sam Goldman can be reached at sgoldman@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.