Budget reflects economy beginning to recover
By Sam Catanzaro
Santa Monica City Council this week, meeting in person for the first time since the pandemic, approved an over $1 billion dollar biennial budget, including one-time funds to enhance “clean and safe services” on the Pier and beach, return of weekly street sweeping and a homelessness response pilot program for the Santa Monica Fire Department.
On Tuesday, Santa Monica City Council unanimously adopted a balanced biennial budget for FY 2021–2023.
“We are beginning to see the results of our hard work of responding to pandemic-related revenue impacts and stabilizing the government at lower revenue and spending levels,” said Mayor Sue Himmelrich. “This Biennial Budget remains impacted by the pandemic and we appreciate the patience of the community in understanding that City spending and activities cannot yet return to 2019 levels, but Santa Monica is well on its way to its bright future and on the rise from here.”
The overall FY 2021-22 Budget is $707.8 million and FY 2022-23 Budget is $598.9 million, net of reimbursements and transfers. This is more than $2.3 million and $1.1 million, respectively, over what was presented in the initial proposed budget. According to the City, the difference is due to an increase in revenue as and savings from the current fiscal year.
Programs and services included in the budget include one-time funds to enhance clean and safe services on the Santa Monica Pier, Colorado Esplanade and beach area during busy summer weekends. The budget also contains funds to support formation of a possible business improvement district (BID) on the Pier and also an additional Code Enforcement Officers on the Pier.
In addition, the budget includes efforts to address homelessness in the city. These include continuation of multidisciplinary homeless engagement street teams, creating two new Community Services Department positions to engage with regional partners to address homelessness and a two-year Community Response Unit program pilot focused on homelessness response for the Santa Monica Fire Department.
The budget also includes initiatives aimed at economic recovery, including a rent abatement program to support small Santa Monica businesses and emergency economic assistance for vulnerable residents.
Many city services that were cut or reduced in last year’s budget–which was significantly smaller due to falling revenues–will get funding in the recently passed biennial budget. These include funds to support ICE at Santa Monica, the return of weekly street sweeping in September and dollars to support Swim Center Sunday and Monday operations. The budget will also bring crossing guards at additional locations throughout the City and expand library services.
The budget also includes changes to some permit and user fees, fines and civil penalties and parking rates, according to the city.
In May 2020, facing a $224 million budget deficit, Santa Monica City Council laid off over 400 employees and implemented sweeping service reductions. While the biennial budget reflects a local economy in better shape than it was at the beginning of the pandemic, the City noted it also is not reflective of an economy in full swing.
“The FY 2021-23 Biennial Budget is not the budget of prior abundant years. The FY 2021-22 General Fund budget is $349.5 million; by way of comparison, the pre-pandemic FY 2018-19 General Fund adopted budget was $440.2 million. This decrease reflects not the strength of our local economy but the very nature of it. During the pandemic, we have seen changes to the way we live and work. As people have engaged in less retail shopping, less business travel, and less office work in key entertainment and technology sectors, City revenue streams across transient occupancy tax, sales tax, and parking have been diminished,” wrote Interim City Manager Lane Dilg in a message attached to the budget proposal. “Our revenue streams will replenish. Santa Monica remains a highly-coveted location renowned for its quality of life, beloved local businesses, and vibrant public spaces.”
It should be noted that with over $400 million in unfunded pension liability and flattening revenues, Santa Monica was already projected to be $72 million in the red by 2030.
The Adopted Biennial Budget will be posted to https://finance.smgov.net/budgets-reports/annual.