May 26, 2022 9:49 AM
This week, the Santa Monica City Council held a study session to review the proposed FY 2022-23 Budget. The Council’s feedback aligned with its adopted priorities of a clean and safe community, addressing homelessness, and an equitable and inclusive economic recovery. This feedback will be incorporated into the final budget, which will return to Council for adoption at its June 28, 2022 meeting.
The proposed FY 2022-23 Budget comes as the City gradually recovers after a General Fund revenue loss of over $180 million over three years due to the impacts of the COVID-19 pandemic. The City, like the entire country, is experiencing significant cost increases resulting from high inflation, market disruptions from the war in Ukraine, and supply chain issues due to the COVID-19 pandemic. Given the current level of economic uncertainty, the FY 2022-23 Budget is focused on no-cost operational adjustments to improve service delivery for the community, required budget corrections, as well as incorporating previous Council direction to fund the Pier Vending Task Force for another year.
“Restoring services to the levels that our community expects will take time, as the public sector is facing many of the same challenges that our partners in the private sector face, including budget cuts, staffing shortages, and service disruptions, which are exacerbated by inflation and the high cost of living here on the westside,” said Santa Monica Director of Finance Gigi Decavalles-Hughes. “We are deliberately and strategically restoring services as funding becomes available, in line with Council and community priorities, with the goal to provide the highest level of service to our community.”
To expedite economic recovery, enhance public safety presence and address homelessness, the City must seek a combination of new ongoing and one-time revenues. Council supported staff’s recommendation to place a Transient Occupancy Tax (TOT) measure on the November 8, 2022 General Election ballot. If successful, the City would have the capacity to direct anticipated new funds to priority areas during Council’s Midyear Budget Review this winter. In addition, the City Council directed staff to further study and develop a real estate transfer tax measure, titled the “Comprehensive Real Property Tax Measure,” for possible placement on the November 2022 ballot to provide additional revenue to help fund community priorities.
Council comments expressed support for the proposed FY 2022-24 Biennial CIP Projects including:
- Park and street improvements include replacing existing lighting infrastructure on the Third Street Promenade to enhance security, improve visitor experience, and add additional functionality to activate and enhance public spaces.
- Public safety investments, include funding for the drone as a first responder program, scheduled replacement of Santa Monica Fire Department (SMFD) vehicles and apparatus, and upgrading and purchasing of SMFD portable radios.
- Planning efforts to prepare the Santa Monica Airport for local control in 2029.
- Upgrades to the Santa Monica Pier, including replacement of the Pier bridge, below deck fire suppression sprinkler system, Pier railing and light pole replacements, and implementation of deck upgrades.
- Ongoing maintenance for parking structures and lots, upgrades and repairs to streets, curbs, sidewalks, gutters, bus pads, and other related surface features in the public right of way.
- Upgrades to community facilities like the Virginia Avenue Park fitness room and planned maintenance for the swim facilities at the Swim Center and Annenberg Community Beach House.
- Bike system improvements, including a protected bikeway on Colorado and Broadway and improvements to the connector ramp from the Beach Bike Path to the Santa Monica Pier.
- Planning efforts to prepare the Santa Monica State Beach for LA28 to position the City to take advantage of major events like the 2028 Olympics.
As staff continues to assess the pace of economic recovery and has a firmer understanding of available one-time savings from FY 2021-22, staff will bring forward additional service restorations and enhancements that align with City Council’s priorities.
The total proposed budget for the City for FY 2022-23 is $664.7 million. This includes $88 million in capital projects and $576 million in operating budget expenditures. The general fund budget continues to be lower than the pre-pandemic budget. The proposed budget continues to restore and enhance city services that address priority areas as quickly as possible.
The proposed budget is available at finance.smgov.net/budgets-reports/annual.
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