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Victor Maccharoli- The city council approve the city budget yesterday evening.

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City budget is balanced, for now

By ERIC LINDBERG — June 24, 2009

In the same breath that they approved a balanced $260-million budget yesterday evening, Santa Barbara city leaders acknowledged that the fiscal document is already tilting back into the red.

Sales and bed taxes slumped far lower than expected in the last few months — down 17.6 percent and 15.5 percent, respectively, compared to last year — forcing city finance staffers to admit they’ll likely be crunching numbers with the city council again in a few short weeks.

“It’s a budget that probably already has a $1.4-million hole in it,” City Finance Director Robert Peirson said.

“We have structural problems with the budget as a whole, and we’re not going to solve those problems tonight,” Councilmember Dale Francisco added. “…It’s balanced, formally, but we know it’s already not going to work.”

City leaders and department heads had to pull the belt pretty tight during this budget cycle to begin with, finding roughly $10.5 million in cuts and revenue boosts.

Approximately $3.1 million of those cuts came by way of one-time solutions, such as deferring capital projects, meaning that the city may be facing down that gap again next year should the economy continue to falter.

City officials are also keeping an eye on state lawmakers, who are taking a look at borrowing local property taxes and using local gas tax revenues to address their own budget dilemma — a move that would impact city finances to the tune of $1.6 million and $1.5 million, respectively.

And the city won’t know until September if it secured competitive federal stimulus funding in the amount of $510,000 to cover four police officer positions.

“I’ve never seen it like this,” Mayor Marty Blum said. “This is my 14th year on the council and it’s never been like this. It’s very worrisome. We don’t see an end to the recession. I don’t think we’ve bottomed out yet.”

That being said, the budget approved yesterday is technically balanced, including the $105-million general fund account, which provides for basic city services and has been hardest hit by the economic downturn due its largely tax-based revenue stream.

“I’m quite relieved and I think we did a good job on it,” the mayor said. “People aren’t going to notice a huge gap in services.”

Through negotiations with various bargaining units, the city also avoided any involuntary layoffs. Some positions are going unfilled, some employees are leaving for other opportunities and some employees are being shuffled to other areas of the city, officials acknowledged, but nobody is losing their job, at least for the time being.

That was accomplished in part through a series of concessions by the city’s service workers union, which included a 5 percent unpaid furlough and suspension of vacation cashouts.

“I think they’re owed a debt of gratitude for agreeing to what is before you today,” said George Green, the union’s chief negotiator.

Other concessions came from the Police Officers Association, which agreed not to cash out any leave time, including accrued vacation and holiday hours, for a cost savings of $259,000.

Councilmember Iya Falcone went to bat for the association, which has already backed her in the mayor’s race, in advocating that two vacant positions in the police department be restored to the budget.

She called the two positions — for a firing range and equipment expert and a computer and network technician — very important to the department and noted that officers came up with nearly twice the amount of funding that would be needed to fill those jobs.

“I think it’s only fair … that we restore those two positions,” Falcone said.

But her colleagues seemed hesitant to add another $152,000 into the budget equation, particularly given the uncertainty of the economic climate and the budget deficit already expected next fiscal year.

“Tonight is not the time to be putting things back into the budget,” Councilmember Roger Horton said.

While acknowledging that he is concerned about losing civilian support in the police department, Francisco also said he couldn’t support restoring the two positions.

“Frankly, the things we put back two weeks ago are already in jeopardy,” he said.

He was referring to the $1.1 million in adjustments that city leaders made on June 9, which included $589,500 to avoid any layoffs as promised; an additional $300,000 in contingency funds to act as a budgetary cushion; and $130,000 in restored funding for the Convention and Visitor’s Bureau and the New Beginnings Counseling Center.

In order to support those items, the council reduced contributions to the city’s vehicle replacement fund by $372,000, delayed specified capital projects for a year to save $445,000, and cut other line items.

Ultimately, Falcone agreed to wait out the economic picture for a few more weeks to give finance officials time to bring forward a plan to plug the new budget hole.

Councilmember Das Williams threw out a few ideas for increasing revenue as the budget hearing started to draw to a close, suggesting a tax on medical marijuana dispensaries and a 10 to 15 cent tax on plastic bags.

And before city leaders unanimously approved the budget, they noted that the number of city employees has returned to levels experienced during the early years of this decade.

“The organization is shrinking,” Councilmember Grant House said. “It’s getting smaller and more efficient.”

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Another Un-Balanced Budget : 6/24/2009

When will our City Council actually be able to make the necessary cuts to have a real balanced budget, including savings into the rainy day and general funds? The work furloughs are not enough. Cut excessive salaries and unnecessary positions. This will never happen until we elect someone who has an outsider's perspective with principles. WWW.VOTETEVIS.COM

WHO IS JUSTIN TEVIS

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Do your jobs! : 6/24/2009

When is our city and county government going to do the job we hired them to do. Cut heads, cut salaries, cut pensions. Budget for infrastructure and emergencies. Create a model that balances the budget for this year and the years to come. You are running our city like the employees and unions are the ones you are working for. Wake-up!! and stop kicking the can down the street.

Fed-up tax payer

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Weak : 6/24/2009

Marty Blum has been on the council for 14 years, no wonder we are crashing and burning. Das, another original idea - raise taxes and fees - what a clown

urweak

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Unions : 6/24/2009

Unions are the ones who fund the majority of the campaigns of the elected members. So, yes "Do your jobs!", the city and county goverment do work for the unions....

Actually work for my pay!

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Unions...? : 6/24/2009

How about all the money the city spends on being "Green"? The City just hired a Green Public Education person...What about all the money going to the Housing/Redelvelopment-Homeless programs...? The union employees of the city make below what the private sector and other like jurisdictions pay and that is a fact... If someone spends 30 (THIRTY) years with the SAME employer and PAYS into his or her retirement account, they deseve the pay-out. If that bothers anyone, then maybe you should have put more thought into your career path at a younger age... Maybe you were one of the greedy mortgage or realtor business folks who have come to the realization that the bubble has burst... Sorry, but leave us "union pee-ons" out of your whine session.

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unions : 6/24/2009

It use to be that public jobs were lower paid than private jobs but got higher benefits and retirement. This is no longer the case. The public employees are paid more than comparable private workers, they have more vacation, more sick and over the top retirement plans. "Union pee-on" please stop with your worn out PR message. Those who pay for your wages and benefits are on to all of you ..

Fed-up tax payer

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Race to the bottom : 6/25/2009

Anti-union hostility and anger over the fact that government workers still maintain a salary that allows them to belong to the fabled "middle class" is amazing. The idea that we should all join in the race to the bottom of compensation and benefits or be outsourced by cheap domestic (usally illegal) labor or jobs exported overseas is unhealthy. The benefits enjoyed by working people pale in comparison to the billions/trillions of dollars corporate executives have cost the country. And the money that workers receive stays here and employs others instead of going overseas to avoid taxes.

RHS

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Race to the Bottom : 6/26/2009

Let me see if I understand this logic. The tax-paying private company workers who have taken pay cuts in order to keep their jobs, should be satisfied with higher taxes and higher cost of public services so the unionized pubic employees can maintain their income and life style. And it is not even April 1....

Fed-up tax payer

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