Amid Concerns, Goleta Budget on the Table Tonight

Santa Barbara Newsroom
By Tom Schultz
June 25, 2007

Balanced city budgets for each of the next two fiscal years are on the table in Goleta, but officials have expressed discomfort with razor thin margins that leave little wiggle room for increased spending.

The City Council today will consider final approval of $15.42 million in expenditures in fiscal year 2007-08 and another $15.74 mllion in spending in 2008-09. Revenues would outpace disbursements by just $10,000 in the first year and $16,000 during the next.

Riled by the lack of a substantive financial cushion, council members head into tonight's meeting at City Hall on the heels of disagreement over how or whether the city might create more flexibility around its bottom line.

Last week, the debate boiled down to questions of philosophy and tack: Should the Goleta forgo pay raises for City Hall staff members, for example, or perhaps promise less help by way of funding grants to outside organizations? Should the city make reigning in ongoing costs a priority, or perhaps cut one-time expenditures?

While the city is solvent for now, it faces deficits around the end of this decade if projections hold true, Councilman Eric Onnen noted.

"We've got a zero-sum budget," Onnen said recently. "And we're not going to save resources to prepare for that? I think it's imprudent.

"When your budget gets tight, you reduce your spending. Not after you run out of money, but before," Onnen said.

Onnen backed what he acknowledged was a difficult position for a new council member — reconsidering cost of living adjustments for the City Hall staff. Other council members balked at the suggestion, and wondered whether the $203,000 in savings resulting from such a strategy would be worth it.

As it stands, the budget to be considered today retains a 3 percent cost of living adjustment for staff in each of the next two fiscal years. And the council will consider altering city retirement benefits expenditures sometime this fall.

"If I was staff, I would build in some rate increass into my budget proposal as well," Onnen said. "But we have flat revenues... I'm not suggesting there be no cost of living increases over the next two-year period. I'm saying we don't commit to that in this (budget). If we say we are going to wait and see, then that's what their expectation will be. We can't change it after we give it to them. That's the point."

Other council members appeared flabbergasted.

"I totally disagree with you on employee compensation," Councilman Roger Aceves told Onnen during a recent budget workshop, noting the city is poised to grant $200,000 to Girsh Park in the next two years and, among other donations, $40,000 to the Goleta Valley Chamber of Commerce. "What you are asking staff to do is basically work two years without a pay raise. That's totally inappropriate."

Without the raises, Aceves said, "We're going to have a retention issue. We're better than that."

Councilwoman Jonny Wallis was equally protective of the raises. "The idea of not giving staff what I think of as their just reward is unconscionable placed in the context of some of the other spending in this budget. If we don't pay our staff well, we're not going to make progress as a city. We're going to see attrition, which is costly. It is incredibly costly when a staff member walks away from the city. We're not going to be able to recruit in a competitive sense."

Today will be the fourth time the council takes up the budget, following recent hearings on May 21, June 4 and June 18. In addition to its primary budget, the council today considers a separate Redevelopment Agency budget focused on cleaning up blight across Old Town that would provide nearly $11 million in spending in 2007-08 and more than $3.8 million in spending in 2008-09.

While overall city revenues would barely outpace spending in the next two business cycles, City Manager Dan Singer expressed confidence that projections gauging how much tax and fee money will hit the coffers are solid.

"We feel very comfortable and confident in the revenue numbers," Singer said. Last week, he promised the council he an analysts would keep looking for additional ways to cut costs or otherwise improve the city's financial comfort level.

This comes as several council members push for new negotiations over a contract that sends half Goleta's tax revenue to Santa Barbara County, under terms of a deal the two governments worked out upon Goleta's successful 2002 incorporation. Councilmen Onnen, Aceves and Michael Bennett promised to renegotiate the agreement to make it more favorable to the city during last fall's bruising council election campaign.

As it stands today, Goleta's new budget would provide for a variety of programs and services.

The largest expense — nearly 40 percent of all spending — would go to public safety. The city would pay the Santa Barbara Sheriff's Department more than $11 million over the next two business cycles to patrol neighborhoods.

Planning, another key function in Goleta, would account for about 13 percent of costs.

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