Santa Maria council adopts mid‑cycle budget changes, directs staff to pursue longer‑term rebalancing

The Santa Maria City Council on June 3 approved mid‑cycle amendments to the city’s 2025–26 budget and directed staff to build a short‑ and long‑term plan to close a roughly $25.1 million gap between forecasted revenues and expenditures.

Council action and staff direction followed a detailed presentation from Rebecca Campbell, the city’s director of finance, who laid out revised year‑end estimates and a set of supplemental budget requests. Campbell said revenues were “pretty flat” and that general fund spending and Measure U expenditures together would exceed revenues for the coming year, requiring use of reserves and other one‑time funds to balance the books.

Campbell told the council the city would draw down reserves including the Local Economic Augmentation Fund (LEAF) and a planned pension payment to cover the shortfall while staff prepares a rebalancing plan. “We are energized and ready to embark on a rebalancing initiative,” she said, outlining steps that will include revisiting year‑end estimates, evaluating long‑term vacancy savings, reviewing capital projects and revenue opportunities, and forming a council ad‑hoc committee to work with staff this summer.

Why it matters: The city faces a structural gap driven by rising costs — notably salaries and benefits, insurance and workers’ compensation — while revenue growth has slowed. Council members pressed for transparency, urgency and community engagement as staff develops options that could include program reductions, service changes, or revenue actions.

What the council approved: The resolution the council adopted (motion and roll call) authorized the mid‑cycle amendments described by staff and delegated implementation authority to the city manager. The package includes: 1) funding technical adjustments for capital and enterprise projects, 2) limited supplemental operating requests (for example, maintenance for a fingerprint machine and utility cost increases supporting public safety services), and 3) filling a previously authorized utilities customer‑service position. The package also reflects staff’s plan to use $22.7 million in LEAF reserves and other one‑time funds to balance next year while the rebalancing process proceeds.

Council discussion: Several council members expressed concern and urged a faster, more transparent process. Council member So to asked for clearer data on CalPERS and liability cost drivers; Council member Flores emphasized protecting youth and senior services while exploring fee or program changes; Mayor Pro Tem Escobedo and others urged decisive action. Rebecca Campbell and City Manager (unnamed in the meeting record) said staff will return in the fall with proposed actions after the ad‑hoc committee and departmental reviews.

Next steps: Staff will (a) recheck year‑end estimates and vacancy savings, (b) re‑evaluate capital and equipment projects for timing, (c) investigate revenue generation opportunities, and (d) convene an ad‑hoc council–staff committee this summer to develop specific reductions and revenue options for the council to consider in the fall.

Quotes: “We want to work with all city departments, the city manager, everybody in this room. We want to work together and with your council, to do that,” Campbell told the council. City Manager (title used in meeting) said staff will return with a “brand new budget” and a game plan over the next three months.

Ending: The council adopted the mid‑cycle amendments and asked staff to accelerate the rebalancing work. Council members repeatedly urged staff to include clear metrics and community engagement in the next phase so any future reductions or fee changes are understandable to residents.