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Santa Monica Council Reviews FY 2020-21 Operating Budget and FY 2020-22 Capital Improvement Program Budget

Proposed Budget Includes Crossing Guards, Modified Landmarks Commission

June 10, 2020 11:53 AM

 Santa Monica Council Reviews FY 2020-21 Operating Budget and FY 2020-22 Capital Improvement Program Budget

SANTA MONICA, Calif. – At its meeting last night, June 9, 2020, the Santa Monica City Council provided direction on the City’s proposed FY 2020-21 budget and biennial FY 2020-22 capital improvement program budget. The budget reflects an organizational restructuring in response to the impacts of the novel coronavirus (COVID-19), including measures to close a projected $224 million budget deficit.

With the restructuring measures, including the elimination of 304.7 positions and reductions to capital spending, the budget forecast is positive with the City able to weather the slow climb to pre-COVID revenue levels. FY 2020-21 budget overview:

  • FY 2020-21 Proposed Budget is $614 million, a 23.8% decrease from the FY 2019-20 Revised Budget.  This includes the Capital Improvement Program budget. Capital Improvement Program Proposed Biennial Budget: $94.4 million in FY 2020-21) and $71.4 million in FY 2021-22.
  • General Fund Capital projects: $6.8 million in FY 2020-21 and $8.9 million in FY 2021-22 (down from $21 million per year in the FY 2019-20 budget)
  • Suspended CalPERS paydown (reflects the move to a 15-year paydown and skips payments in 2020 and 2021).
  • Two-year suspension of payments to the City’s Other Post Employment Benefit Trust (OPEB).
  • Eliminates expenditure control budgeting through FY 2022-23 so that all budget surplus across departments is put back into the general fund.

“The proposed budget gets us to a healthy financial picture while also creatively leveraging all funds to retain important community programming,” said Santa Monica Mayor Kevin McKeown.

Council directed staff to return in two weeks with a proposal that shifts some Santa Monica Police Department resources to prevention-based models, including increased staffing for youth-focused initiatives.  As part of the budget restructuring process, the City had previously cut one sworn police officer position from the Police Department budget but also moved the Office of Emergency Management, including dispatch services in Public Safety Communications, from the City Manager’s Office to the Police and Fire Departments.

As part of the budget, the City will continue to provide Santa Monica-Malibu Unified School District (SMMUSD) with $12.5 million in revenue generated from the half cent transaction and use tax approved by Santa Monica voters in November 2010 as well as unrestricted revenue in the amount of $9.7 million annually in return for use of SMMUSD facilities.

The budget presented last night includes changes since the May 26 meeting, including the following areas funded through remaining unprogrammed funds.

  1. The Crossing Guard Program will be restored through 6.5 full-time as-needed crossing guard positions given that Santa Monica-Malibu Unified School District is not in a position to take ownership of the program.
  2. The Landmarks Commission will meet as-needed or every other month to review new designations and Certificates of Appropriateness for alterations to designated historic resources. The budget restores $15,000 for professional services to support staff review. The demolition permit review process will focus on public notification of demolition applications and retention of the 75-day waiting period to provide opportunity for the community to file designation applications.  Staff was directed to explore having demolition permit applicants pay the costs of review of designation applications arising from the demolition permit review process.

Council approved changes to fees for service as follows:

  • Electric vehicle charging for networked chargers - $0.30/kWh and $1/minute overstay charge (after a 10-minute grace period).
  • Fee waivers removed for the following – sustainability building measures required under the green building reach code (solar panels, energy storage, EV chargers), historic preservation (designations, preservation consultation subsidies)
  • Shared mobility per-device fee reduced from $135.46 per device per year to $105 per device per year, and public-right-of-way fee changed from $1 per device per day to a $0.20 per trip fee.
  • Community Services Pricing Policy - Increase fees for CREST Club to $350/month (an increase of $50/month) and fees at Annenberg Community Beach House. These cost recovery measures would generate an additional $237,155 in revenues in FY 2020-21.
  • Another recommendation was to look into cost recovery for programs for older youth and the trades intern program to enable the restoration of those programs.

During FY 2020-21, staff will conduct a comprehensive City-wide cost of services/fee study to ensure that the City is recovering the appropriate share of costs for all fee-based services. An updated fee schedule will be included with the proposed FY 2021-23 Biennial Budget.

Given City budget deficits and the uncertainty that exists about school openings in the fall and the social distancing and public health limitations and requirements that may be in place, the City and SMMUSD will work with the community to seek new solutions and models for the CREST Sports and Playground Access programs.

Council also approved moving forward with a ballot measure, pending some additional research on alternatives, for the November 2020 election that would authorize an increased transfer tax on high-end real estate sales. The measure as proposed would increase the transfer tax paid on real estate selling for over $5 million by $3 per $1,000 of sales price. If approved by voters, the measure would generate approximately $3 million annually. The revenue would fund foundational community services.

Budget adoption is set for the June 23, 2020, Council meeting.

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