Santa Monica’s 2019-2021 budget is 7% or about $108 million smaller than its last biennial budget, marking the beginning of a decade where the city will have to pay down a $448 million pension liability while adjusting to tepid revenue growth.
Although the city is tightening its belt, the almost $1.6 billion biennial budget City Council adopted Tuesday boosts funding for homeless services, rental assistance for low-income seniors and a new website officials call a “digital City Hall.” It also maintains funding for a $77 million annex at City Hall, a $115 million reboot of City Yards and new water infrastructure to wean Santa Monica off imported water by 2023, protecting the city from future droughts and higher water rates.
A $9.3 million payment to CalPERS, the state pension fund, kicks off the city’s 13-year plan to pay off the pension liability ahead of time. CalPERS fell into crisis following the 2008 recession and jurisdictions across California now have to make up a massive shortfall between the pensions the state promised to workers and the balance of the fund.
Santa Monica’s accelerated repayment plan will save more than $100 million in interest, said finance director Gigi Decavelles-Hughes. Even so, the pension liability and eroding revenues from sales tax as consumers shop online instead of in Santa Monica’s brick-and-mortar stores could put the city $50 million in the red over the next 10 years if it doesn’t cut costs. A looming recession would only make matters worse.
The 2019-2021 budget takes the first steps toward those long-term savings, eliminating 29 vacant jobs, trimming administrative costs and diverting local students from some poorly attended childcare programs. It also includes metrics to measure the effects of funding levels on city services.
“With this budget, we continue to invest in the exceptional services, programs and public facilities for which Santa Monica is known while also preparing for harder economic times,” said Mayor Gleam Davis. “Budgeting based on performance and continually measuring how we’re doing will maintain our strong financial standing and allow us to continue to innovate to meet regional and global challenges like homelessness and climate change.”
The budget city manager Rick Cole proposed last month included other cuts, including extending the winter closure of the Santa Monica Swim Center, ending a contract with KCRW to broadcast City Council meetings and halting enforcement of the city’s leaf blower ban, but the council rejected those cost-cutting measures.
The council also asked that the budget incorporate $100,000 for hospitality ambassadors in Reed Park.
Since last fall, the city’s Recreation and Parks Commission has called on the council to prevent people experiencing homelessness from relieving themselves, using drugs or committing crimes in the park. The council decided to launch a six-month pilot program in which Downtown Santa Monica, Inc. ambassadors, who are already present in other downtown parks, will work with the homeless population in Reed Park.
The budget also renews funding for outreach teams that work with homeless individuals on the streets and expands the Preserving Our Diversity (POD) program to provide rental assistance to 200 to 400 low-income seniors with the goal of preventing homelessness.
To bring in more revenue, the budget raises parking rates across the city, including a parking meter rate increase of $0.50 per hour downtown and near the beach, $0.25 per hour in all other areas and Main Street parking lots and a $15 increase in the monthly permit price for the Main Street lots. Hourly and daily parking rates will also increase at the Santa Monica Pier deck and the central beach lots.
madeleine@smdp.com
