Santa Barbara is a ghost town these days and the city is struggling to find ways to make up for lost revenue.
Santa Barbara is a ghost town these days and the city is struggling to find ways to make up for lost revenue.  (Joshua Molina / Noozhawk photo)

The news is grim and the tension is thick. 

The COVID-19 pandemic has devastated City Hall, fueling frustration on multiple fronts. 

City Administrator Paul Casey projected an estimated $30 million revenue loss the remainder of this year, and next. In just the general fund, the city is projecting a revenue plunge of $12.3 million this fiscal year, and another $9.7 million next year. 

“The impact will be substantial this fiscal year and next year,” Casey said.

The budget projections came during an unwieldy, five-hour marathon meeting, with more plot twists than an episode of “The Tiger King.”

Two council members, Oscar Gutierrez and Alejandra Gutierrez, challenged Mayor Cathy Murillo on the makeup of a new economic revitalization task force that she formed. They urged more economic and Latino diversity, and expressed disappointment that Murillo had formed the group without checking in with them.

Gutierrez publicly called Murillo out on the secretive formation of the task force.

“Are you not going to read the names out so they are in the minutes and in the public record?” Oscar Gutierrez said. “How is the public going to know who is on this team?”

Murillo started to the read the names from her list, before city staff projected a slide on the big screen. 

“The idea is completely necessary, I just think that the public should have more of a say because a lot of people were not made aware of this,” Gutierrez said. “We’re part of this really diverse community, especially when it comes to business, and I think we should be tapping into the different demographics and businesses.”

Alejandra Gutierrez was also upset with the mayor’s choices for the team, and her process. Only one Latino was on the list. 

“I am really going to speak very openly,” Alejandra Gutierrez said. “For me, it was very surprising to have to hear about this over (Noozhawk), and I feel there’s a lot of key business people that should be on this task force, and I understand you are trying to do things rapidly, and get something started, but especially from the Latino business.

“I understand that you have Miguel Avila there, but we need to have somebody else,” Alejandra Gutierrez said.

She referenced business people such as The Berry Man, and said others from the Milpas area, and people that own construction companies should be on the task force.

“I feel that this list is very much one-sided and we need to have a broader perspective of opinions,” Alejandra Gutierrez said.

Murillo said she would be willing to take the task force up from 16 to 20 people, and urged both council members to “submit one or two names.”

Jim Knell, chairman of the SIMA group, said during the public comment portion of the meeting that he was outraged by the mayor’s task force. 

“I can’t believe how you could put something like that together without some of the largest stakeholders in downtown Santa Barbara,” Knell said. “I am thoroughly frustrated and angered that this was done without even a discussion. You excluded and alienated a group of people that up until now have tried to support your efforts.”

Murillo said the task form was formed with a sense of urgency to act quickly. “It’s short term,” she said. “There will be a robust public participation function.”

Some other council members expressed disappointment with the city staff and the pace of its efforts to implement changes approved in 2019 to the city’s controversial housing average unit-sized density incentive program, which would encourage developers to build housing in the downtown core.

City Planner Renee Brooke said some of the changes could be moved to September, but council members said in light of the pandemic, the changes need to happen much sooner. 

“I am just so frustrated,” Councilman Mike Jordan said. “I have heard today from some people, staff members who I respect immensely. Our lack of action or our inability to move forward on some of the things that we were talking about today don’t match the tenor of the concerns that we have spent the past couple of hours hearing about.”

The meeting, he said, reminded him of previous joint council and Planning Commission meetings where “concerns are voiced, heads are nodded and everybody leaves the room with nothing being done.”

“We need to find ways to do things, not find ways to talk about why we can’t do things,” Jordan said.

Jordan said city staff should find a way to act quicker and prioritize the housing amendments. 

He said the staff’s inability to move swiftly because of its large workload “just is a level of bureaucracy reply that I am unable to fathom why it exists.”

Jordan was also upset that a consultant’s study to examine efficiencies in the city’s building and planning departments won’t be available this month, or even in May, as originally promised.

“It is extremely frustrating that that is not coming in on time and that it is also lagging behind the budget process,” Jordan said.

Jordan was successful in his plea to at least get the planning department to return next week with “an expedited housing plan in connection with the AUD amendments.”

Councilwoman Meagan Harmon agreed that now is the time to act because the city needs to give incentives to developers to build housing. Since the city’s revenues are expected to drop dramatically, the city is not in a place to hand out stimulus dollars.

What it can do, however, is create a regulatory framework that allows property owners to move forward fast. This could mean more work for the planning department, or a reorganization of priorities, or sacrifices of other projects for now, she said.

“We can’t let the perfect be the enemy of the good right now,” Harmon said. “That’s not the world that we live in. And that’s not what I am hearing from people in my district, as well as business owners and our neighbors across the city. They really want to see us set the stage, from a regulatory perspective, to get a new recovery in place. That’s what people are looking for.” 

The overall revenue drops equate to about 9 percent of the city’s budget this year and 7 percent next year.

Hotel bed taxes are expected to fall by $5.4 million this year, with sales taxes, including Measure C funds, likely down by $8 million. 

Hotel bed taxes in March were down 60 percent, and officials expect that number to increase to at least 80 percent in May and June.

Not only are occupancy rates down, but so are average daily room rates. Two third’s of the city’s hotels have opted to defer their hotel bed tax payments to July. 

Jennifer Tomaszewski, interim finance director, said a recession is expected, and “we have even heard talk of a depression.”

Check back with Noozhawk for an expanded version of this story.

Noozhawk staff writer Joshua Molina can be reached at Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.