Council will meet Tuesday to concluded its annual budget cycle with a revised proposal that predicts the city’s financial footing is secure in the short term.
Santa Monica’s budget is relatively stable over the next five years with estimates showing a slight revenue surplus over the next three years and small shortfalls in years four and five. Staff said those losses represent about 0.1 and 0.3 percent of the total budget and are manageable over the three years of surpluses.
Revenues have seen explosive growth in recent years, spiking by 30 percent immediately following the pandemic and that rate of growth is expected to slow significantly to about 3 percent a year. Steady growth will allow the city to rebuild its reserve fund to 15 percent of expenses by 2026/27 but it will take until 2027/28 to recover to prepandemic levels. Officials estimate the city will have lost about $250 million by that time in lost revenue growth.
The revised FY 2023-25 Citywide Budget amounts to approximately $745 million and $750.6 million for FY 2023-24 and FY 2024-25, respectively. The operating budget for the city is $641 million and $664.7 million for the respective fiscal years. The budget includes a total of 2,006 permanent full-time equivalent jobs (FTEs) and 93.9 as-needed FTEs. The Capital Improvement Program (CIP) Budget for FY 2023-24 is proposed to be around $104.1 million, while the FY 2024-25 budget plan is approximately $85.9 million. The projected revenues for the city amount to $750.9 million and $782.5 million in FY 2023-24 and FY 2024-25, respectively.
Staff said the budget is designed to align with community-driven priorities and focuses on rebuilding, restoring, and revitalizing the community. It begins with a baseline budget that maintains current services and addresses council priorities, which is then supplemented with enhancements identified during workshops. These enhancements are funded through various sources such as voter-approved measures, partnerships, rate adjustments, reallocated funding, and successful grant applications. The budget is balanced for FY 2023-24 and utilizes working capital reserve funds in FY 2024-25 to maintain service levels as general fund revenues continue to recover.
Council has already held workshops and meetings on the proposed budget with the June 27 document incorporating feedback.
Some of the notable changes and initiatives included in the revised budget are:
Monthly meetings for the Landmarks Commission and waiving application fees for non-profits and Landmarks Commissioners for certain applications.
Restoring the City Traffic Engineer position to improve mobility projects and traffic safety.
Investing in technology to enhance community safety.
Supporting funding for the CREST program to expand its operations in elementary schools.
Adjustments to the unfunded project list, including adding projects like the Reed Park Dog Park and Promenade Kiosk Improvement while removing others like the Bergamot Station Connectivity Phase 2.
Additionally, city staff have made adjustments to the proposed budget based on council direction, grant receipts, funding for the Human Services Grant Program, and technical corrections. The revised budget represents a difference of approximately $4.2 million in FY 2023-24 and $4.1 million in FY 2024-25 compared to the initial proposed budget. These adjustments primarily affect non-General Funds, with only a minimal impact on the General Fund.
Council has previously debated ways to fund more police and/or security officers throughout the city. Citizens also came to a past meeting arguing that more needs to be done to address crime and homelessness throughout the city.
Council can ultimately modify the current budget proposal in any way and staff have been asked to provide cost estimates on some proposals.
The budget already includes $200,000 to develop a Homelessness Strategic Plan. Staff said the estimated cost of adding four Public Service Officers would be $2.2 million over five years. The cost to increase the number of private security guards operating in city-owned garages from four to six is estimated at $876,440.
Council will meet on Tuesday, June 27 in City Hall, 1685 Main Street. Closed session begins at 5:30 p.m. and other business will not be heard before 7 p.m.
