July 15, 2025 Breaking News, Latest News, and Videos

Santa Monica City Council Weighs In On Biennial Budget At Two-Day Study Session:

Reviewing a $1 billion budget is not easy. Yet such was the task at hand for the Santa Monica City Council, which spent 12 hours between Tuesday and Wednesday poring over budget proposals from every department at City Hall.

By the end of the two-day study session, both the council and City staff were faced with the prospects of a tough reality: Santa Monica could be operating in the red by the time the next Biennial Budget is up for review, thanks to healthcare and pension costs.

A few things may change between now and May 2015, when the next Biennial Budget is scheduled for review.

However, the current council hopes to make a decision in the next few weeks on how to provide some cover from the impending dark cloud on the horizon.

The proposed budget, which is worth $1.048 billion for the next two fiscal years, attempts to strike an interesting balance of managing the loss of revenues against increased expenses without adversely impacting services offered to residents between now and the summer of 2015.

Specifically, this is the first Biennial Budget since Sacramento ceased providing redevelopment funds to local municipal governments.

Accordingly, Santa Monica now has $20 million less to work with, according to City Hall.

The loss of redevelopment funds not only negatively impacted a handful of ambitious capital improvement projects Ð such as renovation of the Santa Monica Civic Auditorium, which just went dark after the Santa Monica Symphony performed its final show last weekend Ð but also made it rather difficult for City Hall to fund affordable housing programs.

Complicating the budget even more: Obamacare.

City Hall estimates it will have to dole out $1 million in taxes as payment to the federal government in light of the Patient Care and Affordable Act (colloquially known as “Obamacare”), which is expected to be fully operational as the law of the land by Jan. 1, 2014, or seven months from now.

With such a grim outlook of what might be come 2015, Council members brainstormed what they could do now to help bring some new revenue in while slashing unnecessary spending elsewhere. Along the way, the council and City staff discussed how to maintain core services.

For two days, each department made presentations to the council and specifically discussed potentially new revenue streams and where cuts could and would be made.

When all was said and done, City Hall’s budget for the 2013-14 Fiscal Year was pegged at $520.9 million. The following Fiscal Year, City Hall’s estimated budget is $527.7 million.

According to City staff, “operating expenditures are anticipated to increase at an average rate of 3.7 percent over the five years É while revenues are anticipated to increase at an average rate of 2.4 percent.”

Also, total staff compensation is expected to increase by an average of four percent annually, City staff added.

Salaries and benefits, which make up total compensation, is 72 percent of the General Fund operating budget, City staff pointed out in its report to council members.

City staff presented Council members with three possible scenarios in looking ahead to both the current and future budgets.

Under a worst case scenario, Santa Monica would continue to feel the negative repercussions of losing redevelopment money, which could impact additional revenues coming into City Hall and possibly force more cuts.

In this worst-case scenario, City Hall may be in the red even sooner as expected, perhaps as early as the 2014-15 Fiscal Year. Under the City’s most dire estimates, Santa Monica could be functioning at a deficit of $2.2 million as early as next summer. That deficit could balloon to $13.2 million by the 2017-18 Fiscal Year “depending upon the outcome of disputes between the City and the State regarding former redevelopment assets.”

On the other end the spectrum, City Hall might actually have been frugal in preparing the current budget and Santa Monica may experience “slightly higher revenues than are projected.”

Yet even in the best-case scenario, City Hall projects a $700,000 deficit in the 2015-16 Fiscal Year and growing to $5.8 million by the 2017-18 Fiscal Year.

What is likely to happen, City staff estimates, is the assumptions made in the currently proposed budget are correct and Santa Monica will have to deal with rising healthcare and retirement costs while also dealing with the “known impacts from the dissolution of redevelopment.” Specifically, City Hall estimates the potential budget shortfall to be about $3.9 million for the 2015-16 Fiscal Year “due to the increased retirement costs.” The shortfall would increase to $6.4 million for the 2016-17 Fiscal Year and $9.2 million by the 2017-18 Fiscal Year.

In the midst of what might be, council members pored over the numbers with City staff to figure out how some of worst nightmares could be averted.

In an attempt to create additional revenues, the council reviewed hundreds of possible fees potentially resulting in an additional $2 million.

For example, Council members considered adding more parking meters and charging non-residents to use the Santa Monica Public Library.

The Biennial Budget will return to the council for an official vote June 25. Until then, members of the public may provide comments on the proposed budget between now and then by sending an email to council@smgov.net.

In the weeks leading up to the June 25 vote, The Mirror will provide additional coverage of the two-day study session and provide insight of what Council members and City staff discussed during 12 hours of public talks.

in News
<>Related Posts

California Hits Two-Thirds Clean Energy Milestone

July 15, 2025

July 15, 2025

This year, clean energy has powered the state for an average of seven hours daily, with over 90% of days...

Venice Beach to Host First Medal at 2028 Olympics

July 15, 2025

July 15, 2025

Venice Beach, known for its vibrant boardwalk, will kick off the 844 ticketed events, hosting the triathlon along its coastline...

Santa Monica Man Arrested for Allegedly Exporting Electronics to Iran

July 14, 2025

July 14, 2025

Ostovari, identified as the CEO of a Tehran-based engineering firm, allegedly orchestrated the scheme since 2018  A 66-year-old Santa Monica...

Federal Judge Sides with Santa Monica, Other Local Governments Against Immigration Raids

July 14, 2025

July 14, 2025

Santa Monica Mayor Lana Negrete praised the ruling, saying it reaffirmed the city’s commitment to protecting residents from unjust detention...

Veterans Tech Group to Launch Los Angeles Chapter with Networking Event

July 14, 2025

July 14, 2025

Founded in San Francisco, VetsInTech operates 20 chapters nationwide and claims more than 60,000 veterans VetsInTech, a national nonprofit that...

Film Review: Jurassic World: Rebirth

July 13, 2025

July 13, 2025

“The story is simplistic and predictive, and that’s all it needs to be, because the age-old battle to survive the...

Santa Monica Assault Suspect Faces Multiple Charges, Authorities Seek Additional Victims

July 13, 2025

July 13, 2025

Marbra allegedly assaulted a 52-year-old woman on the Strand in Santa Monica, facing a felony count of assault with intent...

SM.a.r.t.Column: Does the Rand Corporation have a future in Santa Monica?

July 13, 2025

July 13, 2025

“Although no one said it outright, it is clear to all that RAND is feeling—and will continue to feel—the impact...

County Health Leaders Decry Federal Policy Barring Undocumented from Programs

July 12, 2025

July 12, 2025

The officials argued the policy jeopardizes care for all residents, noting it could deter people—regardless of status—from seeking treatment  Leaders...

County Supervisors Move to Preserve Measure J Amid Charter Error

July 12, 2025

July 12, 2025

Measure J mandates that at least 10% of the county’s locally generated, unrestricted funds be allocated to community investments like...

LA Medical Center Seeks Help Identifying Unconscious Patient

July 12, 2025

July 12, 2025

He has been unconscious since admission, and staff have been unable to determine his identity Los Angeles General Medical Center,...

Mayor Bass Issues Directive to Protect Immigrant Communities

July 12, 2025

July 12, 2025

The order expands access to city resources for affected families and requests records from ICE, including details on arrests Mayor...

Downtown Santa Monica CEO Andrew Thomas to Step Down

July 11, 2025

July 11, 2025

Thomas, who rejoined DTSM, Inc. in 2022, oversaw the introduction of a private security program, expanded homeless outreach, and boosted...

Conservancy to Tour Historic Miles Playhouse at State of the City Event

July 11, 2025

July 11, 2025

Built in 1929, the Miles Playhouse serves as the centerpiece of Lincoln Park The Santa Monica Conservancy will offer 15-minute...

Sen. Ben Allen Highlights Challenges, Economic Gains for LA28 Olympics

July 11, 2025

July 11, 2025

The remarks came during the first informational hearing of the Senate’s Special Committee on International Sporting Events State Sen. Ben...