February 9, 2022 2:49 PM
At last night’s meeting, the Santa Monica City Council made mid-year adjustments to the City’s budget based on updated revenues and expenditures and received a five-year financial forecast. Although future economic uncertainty remains a factor, Santa Monica is entering a phase of recovery and restoration. The City’s ability to begin to restore services is in large part due to the restructuring that cut 421.1 positions in 2020, necessitated by a $188 million revenue loss through June 2022. To date, 16.6% of positions have been added back to the City.
“Our nascent economic recovery is reflected in our updated financial forecast,” said Mayor Sue Himmelrich. “This is welcome news as we begin our service restorations. Our careful response to the pandemic is paying off as we build back reserves and beloved community programs, including in our libraries and parks. I want to thank City staff for all their hard work over the past several difficult years. This dedication is the essence of our organization.”
FY 2021 – 2022 General Fund revenues are projected to be $30.7 million higher than budgeted. Sales tax, parking revenue, hotel bed taxes, and documentary transfer taxes (approved in the last election) are projected to perform better than anticipated. However, even as revenues reach pre-pandemic levels in about two years, they will still be about $40 million below where they would need to be to support the level of services before COVID.
$11 million of projected unassigned revenue was allocated to General Fund Reserves. Modest service restorations were approved by Council, adding back 24.8 full-time equivalent positions to the General Fund. Midyear adjustments focus on strengthening administrative capacity to deliver citywide services, Council direction or actions taken since the FY 2021-22 Budget adoption, and adjustments for revenue sharing payments.
Approved service investments include:
- Restoring adult programming and literacy services, and re-opening the Fairview Branch Library as a self-service facility
- Expanding in-person community recreation services and maintenance needs at public parks and Annenberg Community Beach House
- Homeless services delivery audit
- A lead for the City’s equity and inclusion policies, programs, and services to advance equity and inclusion citywide
- 311 staff for onsite services to assist customers and respond to community service requests
Outside of the General Fund, most City funds are projected to be self-sustaining in the five-year forecast. The Resource Recovery and Recycling Fund will remain self-sustaining through FY 2023-24. Staff will initiate a rate study and consider presenting a rate adjustment to Council with new rates anticipated to be effective in 2023. The Beach and Pier Funds may need subsidies due to critical capital expenditures.
Given the positive trend on revenue returns, it is anticipated that the General Fund will have some ability to restore additional services next year (FY 2022 – 2023). As part of the exception year budget process, staff will bring back for Council consideration targeted services and program restorations including:
- Addressing homelessness and the impacts of homelessness
- Addressing crime and cleanliness
- Addressing impacts of COVID and supporting an equitable economic recovery
Council also adopted an updated Master Fine Resolution that eliminates overdue fines for adult library cardholders and establish a tiered fine structure for the City’s Shared Mobility program. To continue to build back service levels, Council directed staff to research potential revenue ballot measures for the November 2022 General Election.
NOTE: For more information on library fees,click here.
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