Some 57 positions primarily for public safety, expanded library hours and restoration of fluoride in the city’s drinking water make up additions to Santa Maria’s budget, even as Cicty Council members heard dire news about the California Public Employees Retirement System.
On Tuesday night, the City Council reviewed and approved mid-cycle changes for the two-year budget spanning 2018-2020, with additions possible after voters approved the 1-cent Measure U sales tax in November 2018.
“Measure U is a big help,” City Manager Jason Stilwell said. “The community wanted improved public safety, improved quality of life and improved services for youth, and Measure U is allowing us to do that.”
The new revenue will allow the addition of 57 full-time and part-time positions, Stilwell said.
“That’s unprecedented, so we will see a significant impact and increase in the service that we’re able to provide to the community, primarily in public safety,” Stilwell said.
The Santa Maria Public Library will add staff to allow the facility to be open a few hours on Sundays.
And $48,000 will allow the city to resume adding fluoride to the city’s drinking water, fulfilling a request from dentists and public health workers, who said it had helped reduce oral-health problems in children.
The city quietly stopped adding fluoride late last year, leading to concerns aired at a recent meeting.
The city’s financial state is not all rosy. A financial gap in the budget for the fiscal year starting July 1 will include funding from a rainy day fund, salary savings from keeping jobs vacant, and other steps to balance the spending blueprint, Stilwell said.
The budget also lacks funding for additional deferred maintenance or future pension cost increases.
Some items couldn’t be funded but will be brought back the council in the fall, Stilwell said, explaining that the city was hoping to get some grant funding.
And Santa Maria, like its counterparts across California, received more bad news regarding CalPERS retirement costs.
“The big issue really driving our future financial condition will be CalPERS cost increases,” he said.
However, those estimates do not include changes by CalPERS or the addition of Measure U funded positions.
Several CalPERS policy changes could hit local agencies hard.
“From their point of view, it’s to solidify CalPERS and make it more stable,” Stilwell said. “The impact on cities, or all the agencies in CalPERS, is a significant cost increase.”
One decision — to change the amortization period from 30 years to 20 years — will mean the city must make higher-than-expected payments to the retirement system, Stilwell said.
Councilwoman Etta Waterfield likened the change to a homeowner’s mortgage being switched from 30 years to 15 years, increasing the payments.
“And there isn’t a darn thing you can do about it. That’s the rotten thing about it,” she said.
The city’s CalPERS payment of $13.2 million for 2018-19 is expected to climb to $17.6 million for 2019-20 and continue growing.
The full impact of the CalPERS changes likely will be felt by 2024, he said, noting that earlier forecasts predicted increases would have leveled off by then.
“It’s going to be very impactful for Santa Maria and all the agencies that are in CalPERS,” Stilwell said, adding it will be devastating to cities with already weaker financial conditions.
To help position Santa Maria for the CalPERS hikes, beyond working with other agencies, he said the city must maintain a balanced budget, keep services that match the available funding, and keep a close eye on other unfunded liabilities such as deferred maintenance for the aging buildings.
Waterfield said the city can’t rely on CalPERS to provide reliable estimates for future planning purposes.
“I know some people don’t like the term frugal, but we have to stay that way,” Waterfield said.
“It’s not us being mean. It’s us being realistic,” she added.
— Noozhawk North County editor Janene Scully can be reached at jscully@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.