Santa Monica City Manager P. Lamont Ewell told the City Council that the $437.2 million budget he and the City staff have proposed for fiscal year 2007-08 is “designed to achieve maximum results on the community goals that you [the Council] have set and the public has clearly articulated that they would like to see more of.”
According to Ewell, the national economic outlook in the short-term is slowing; however, Santa Monica’s economy continues “to improve modestly.” With Santa Monica’s varied tax base, the City should be able to withstand economic fluctuations. These mixed economic pictures have caused the City to propose a $16.7 million decrease in expenditures, which is 3.7 percent less than the current year’s revised budget.
In his budget overview, Ewell estimated General Fund revenues at $245.8 million-68.5 percent, or $168.4 million, will come from the City’s six major local tax revenue sources: Utility User Tax (UUT), Transient Occupancy Tax (TOT), property tax, sales tax, business license tax and other taxes. The TOT is projected to increase by $2 million (6.4 percent) next year. This is due to a “change in the mix of visitors” to the City, which used to be dominated by foreigners but is now mostly Americans. Property transfer taxes are being projected to decrease by 21 percent due to the increase in foreclosures, and the telecommunications portion of the UUT may be reduced or eliminated because of legal challenges.
Another source of General Fund revenue are Charges for Services, $3.4 million, which is primarily from one-time charges for building and construction fees.
Major proposed expenditures are $220.1 million for operating expenses, $6.6 million for capital maintenance expenditures and $18.7 million for capital projects. Specific expenses include the Big Blue Bus ($48.5 million), the Redevelopment Agency ($59.7 million), Housing Authority ($17.7 million), Solid Waste ($17.3 million) and Wastewater ($17.5 million).
Next year the City will also continue to subsidize, through its General Fund, three enterprise funds which are supposed to be self-supporting but currently are not: $112,266 to the Cemetery Fund, $833,961 to the Pier Fund and $134,456 to the Civic Auditorium Fund. The proposed budget also maintains a 10 percent reserve of $22.1 million.
In his City budget website posting, Ewell noted that the City’s proposed budget includes the resources to support the improved City services as a result of the restructuring of the City service delivery that was adopted by the Council in January of this year. This will continue next year, with the addition of “a total of 13.7 permanent full-time positions, an increase of 0.7 percent.” Six of these positions will be in the new Community Maintenance Department, and the rest will help add “greater accountability, provide enhanced customer service and operational effectiveness.”
Also included in the budget is funding for the six community priorities identified by the Council earlier this year – Culture, Sustainability, Customer Service, Education, Capital Needs and Infrastructure and Active Living – with an emphasis on homelessness, the Land Use and Circulation Element Update and youth.
On May 22 and May 23, Councilmembers also heard presentations from the heads of all City departments, each of whom discussed department budget and priorities for the coming fiscal year. On Thursday, May 24, after lengthy discussion, they approved an increase of $750,000 to the City’s base annual payment to the Santa Monica-Malibu Unified School District, which will result in a total payment of $7.2 million for next year. However, they put conditions on the base funding by requiring that it be held in reserve until certain issues are resolved.
The community raised some issues. Tricia Crane, a member of the School District’s Special Education Advisory Committee, summarized several issues when she called for the Council to ensure that the District operates with “transparency and accountability.” She asked that the gag order that was imposed on the District’s last Chief Financial Officer be removed and that gag orders no longer be used by the District’s Special Education Department. According to Crane, parents of special education students sign gag orders routinely “in order to secure services for their children. These gag orders preclude them from revealing or discussing the particulars or the costs of services provided. As a result, parents not only live in fear of losing services for their children through an inadvertent slip of the tongue, but we as a community have no access to the financial records and no idea of the amount of dollars being spent as the result of these agreements.”
The Council will consider the adoption of the budget on June 12.