Lompoc council reviews 10-year general fund forecast, hears warning about Measure I sunset and pension costs

LOMPOC, Calif. — City leaders and staff on April 29 reviewed a status‑quo draft of the proposed 2026–27 biennial budget and a 10‑year general fund forecast that flagged rising insurance and pension costs, uncertain revenue trends and a significant revenue timing risk tied to the scheduled expiration of Measure I.

Management Services Director Christy Donlin opened the workshop by telling the council that "this is a status quo" budget, meaning staff built the draft mostly by carrying current service levels forward while adjusting for known nondiscretionary increases. Donlin said finance and departments have worked through thousands of line items; staff expect to deliver a draft budget and CIP book in mid‑May and to present the package to council on June 3, with final adoption possible June 17.

The city’s consultant, Jim Morris of Urban Futures, walked the council through a baseline forecast and a recession scenario. "It is a projection based upon the best information we have today of what your finances look like over 10 years," Morris said, describing the model’s assumptions: salary growth at 2.85% (the CalPERS assumption), a roughly 10% historical vacancy factor, and Moody’s Analytics economic inputs tailored to the Santa Barbara region.

Nut graf: The forecast shows modest annual operating surpluses under the baseline, but it calls attention to two timing issues that could sharply change the city’s outlook: (1) CalPERS unfunded actuarial liability (UAL) payments that peak in the next few years before dropping in FY 2036 because of a prior “fresh start” payoff, and (2) the scheduled expiration of Measure I (the local sales tax) in the third quarter of FY 2036. Morris said the two events together could create a near‑term fiscal bridge the council will need to plan for.

Key findings and numbers - Insurance and other nondiscretionary costs are rising: Morris and…