Santa Barbara City finance committee hears FY2025 fourth-quarter review; forwards budget adjustments to council

SANTA BARBARA, Calif. — On Sept. 16, the Santa Barbara City Finance Committee received staff's fourth-quarter financial review for fiscal year 2025 and voted to forward staff recommendations on budget adjustments to the City Council. Finance Director Keith DeMartini presented the report with Natalie Locoli, the city's controller, and described the city's fiscal position and proposed adjustments.

DeMartini told the committee the city is working with a structural gap in the general fund as expenditures have grown faster than revenues. "we continue to to have some challenges in the general fund with our expenditures increasing at a greater rate than our revenues are increasing," he said. The adopted fiscal-year 2026 budget previously assumed an $8,000,000 deficit target tied to a required contribution to reserves; staff reported a pre-audit fourth-quarter deficit of about $6,800,000 and said the final audited deficit is likely to be lower once Measure I receipts are posted.

The presentation said Measure I, the newly approved sales tax that took effect April 1, generated receipts after the fiscal year closed; staff said accruals for those receipts should reduce the year's deficit to an estimated $3,000,000 to $4,000,000. DeMartini…