If not for the back-to-back major disasters in December and January, Santa Barbara County may have had a status quo budget for the next fiscal year, according to County Executive Officer Mona Miyasato.
As it is, the December Thomas Fire and the Jan. 9 Montecito flash flooding and debris flows not only brought death and destruction to South Coast communities, but long-lasting financial impacts to the county from response and recovery efforts.
The Board of Supervisors already approved using $6.25 million of reserve funds for the county’s share of the estimated $55 million response costs, and the county expects to pay another $6 million next year, county budget director Jeff Frapwell said.
The Montecito area makes up approximately 17 percent of the countywide property tax base, and contributes about 62 percent of transient-occupancy tax revenues to the general fund.
There will be an extensive rebuilding process for the hundreds of homes that were destroyed or damaged in the fire, flooding and debris flows, and property losses and business closures have caused multimillion-dollar revenue hits to the county: losses of about $2.9 million this year and $3.6 million in the next fiscal year, which starts July 1.
Two high-end TOT-paying hotels in the area — the Four Seasons The Biltmore and San Ysidro Ranch — have been closed to guests since the January storm damage.
The threat of another debris flow will linger for another three to five years, until vegetation regrows on the fire-scarred mountainsides, and financial impacts will probably also last that long, Frapwell said.
Right now, the county is working with the Federal Emergency Management Agency on a list of disaster-related recovery and mitigation projects, he added.
Miyasato’s office is focusing on the themes of renewal and resiliency for next year’s budget: improving the way the county does things as an organization, and better preparing for uncertainty, financial or otherwise.
One of the most significant challenges, she said, will be “addressing that physical threat, because we have no control over it,” while staying effective and efficient as an organization.
Budget Overview
Santa Barbara County has a roughly $1 billion budget, and less than 30 percent of that is discretionary funding that can be allocated for Board of Supervisors priorities, according to budget documents.
The cost of employee salaries and benefits, and the deferred maintenance backlog, continues to rise, and “expenditure growth continues to outpace revenue growth, particularly next year, with the loss of property tax and transient-occupancy taxes due to the 1/9 Debris Flow,” a staff report states.
The preliminary proposed budget has no layoffs and $5.2 million in service level reductions.
“I’m cautious, but actually feeling better about it than even six months ago,” Miyasato said.
There are big operational changes coming, in the form of the North County Jail near Santa Maria, which is expected to open next summer, and opening up the county to cannabis-related businesses.
The Sheriff’s Department is pre-hiring during jail construction, and the estimated operating cost for the first year is $18.2 million.
No cannabis-related policies or funding will be presented during the April budget workshops, but it will be included in the June budget adoption process.
In June, the county will know whether voters approved a cannabis-related tax measure, and when regulatory ordinances go into effect.
The Board of Supervisors already has adopted a cannabis land-use ordinance and is expected to give final approval to a business license ordinance in May.
County staff have already said they expect to need additional employees to handle the licensing and permitting process, tax collection and law enforcement.
Budget workshops will be held Monday, Wednesday and Friday, starting at 9 a.m. in the Board Hearing Room on the fourth floor of the County Administration Building at 105 E. Anapamu St. in Santa Barbara.
County supervisors will give feedback, and then make final decisions and adopt a 2018-2019 budget in June.
Click here to read Santa Barbara County budget workshop documents.
— Noozhawk managing editor Giana Magnoli can be reached at gmagnoli@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.
Santa Barbara County 2018-19 Budget Workshops Board of Supervisors Agenda Letter