Carpinteria adopts first two‑year budget, flags shrinking reserves and long‑term funding gaps

The Carpinteria City Council on June 23 adopted a two‑year operating and capital budget for fiscal years 2025–26 and 2026–27, approving multiple implementing resolutions and companion personnel changes after a two‑hour presentation and public discussion.

City Manager Michael Ramirez opened the council hearing by framing the document as the city’s first two‑year budget, aimed at longer‑term planning and fiscal transparency. “This year marks a milestone,” Ramirez said, “the city is transitioning for the first time ever to a two‑year budget covering fiscal years '25–'26 and '26–'27.”

The package the council adopted includes a set of resolutions (identified in the hearing as Nos. 6,405 through 6,410) that together establish the budget appropriations, year‑end adjustments, and policy updates for the two‑year period. The council voted to approve the resolutions by roll call. The council also adopted a separate conditions‑of‑employment resolution (No. 6,411) updating employee pay and benefits for the 2025–26 fiscal year and approved other consent items including minutes and financial reports.

Budget highlights presented to the council: - General Fund and Measure X discretionary revenues were projected to rise modestly to about $17.7 million–$18.0 million across the two years, while operating expenditures increase from roughly $15.2 million (current year actuals) to about $16.7 million by FY 2026–27. - Staff showed a declining available fund balance: estimated carryover fell from about $2.7 million to $800,000 over the planning window unless new revenues or cuts are implemented. - The budget assumes a 3.3% cost‑of‑living adjustment in FY 2025–26 and retains a 5% cap on merit‑pay increases. - The capital improvement program (CIP) totals roughly $8.2 million in FY 2025–26 and $7.5 million in FY 2026–27, with major projects including a federally supported Carpinteria Avenue replacement (the staff slide cited nearly $6 million in federal funding) and trail, crosswalk and Linden Avenue improvements.

Administrative services director Lisette Maldonado presented revenue and expenditure detail, noting that sales, property and transient‑occupancy taxes account for the majority of discretionary revenues and are economically sensitive. “Tax revenues make up 90.3% of total discretionary revenues,” she said. Maldonado also described a planned GFOA‑style refinement to the budget document for transparency.

Council and public discussion focused on long‑term sustainability, fees for park and recreation services, the city’s contributions to community events (including the Avocado Festival), and the use of Measure X sales‑tax funds. Several council members asked staff to pursue a clearer accounting for city support of major events and to explore partnerships with the school district on e‑bicycle and e‑scooter enforcement and education. Staff agreed to return with details. The council also authorized cancellation of the August 11, 2025 regular meeting.

Why it matters: By shifting to a two‑year budget the council and staff aimed to improve long‑range planning. Staff repeatedly warned, however, that without new revenue sources or reduced subsidies to special programs the city’s reserves and ability to fund capital work will decline, potentially forcing program or staffing reductions after FY 2026–27.

Formal actions: The council approved consent calendar items, canceled the regular August 11 meeting, adopted the two‑year budget and associated resolutions, and adopted the conditions‑of‑employment resolution 6,411. All motions passed by roll call with affirmative votes recorded.