Finance Committee reviews city administrator's recommended two‑year financial plan, Measure I spending priorities

The Santa Barbara Finance Committee on April 29 heard an overview of the city administrator’s recommended two‑year financial plan for fiscal years 2026–27 and the proposed operating and capital budget for fiscal year 2026.

Staff told the committee that Measure I — the local sales tax measure enacted by voters — is projected to bring in just over $15,000,000 in fiscal year 2026 and about $15,400,000 in fiscal year 2027, and that the city administrator’s recommendation is to appropriate those revenues in both years, mostly to restore existing, essential services and to fund a small number of new or previously frozen positions.

Why it matters: The recommended spending would reverse several prior reductions and create ongoing funding for services that staff says were previously covered by one‑time sources. The proposal also sets aside annual transfers to housing accounts that advocates say are too small to address the city’s affordable‑housing shortfall.

Staff presentation and major Measure I priorities

Keith Demartini, the city’s finance director, and budget staff presented department‑by‑department highlights and several structural changes included in the recommended plan. Staff proposed reorganizing some functions so that Housing and Human Services and Community Vitality Initiatives (plus most downtown parking services) would report to a new deputy city administrator; that new deputy position is the only personnel addition created by the reorganization, staff said.

On Measure I specifically, staff proposed appropriating the full estimated receipts in both years and directing most of the funds to existing services. Staff listed the following Measure I uses in fiscal year 2026: - Police: funding for 34 positions (staff characterized these as restorations or previously frozen positions) - Fire: funding for 19 firefighter positions (restoring positions funded previously with one‑time dollars) - Parks and Recreation: funding for 8 positions, including restoration of after‑school program support - Library: funding for 5 librarians plus security services and digital collections previously paid with American Rescue Plan Act funds - Homeless services: continued funding for existing contracts where gaps were identified - Transfers: $1,500,000 per year to a housing and homeless services fund and $1,500,000 per year to the local housing trust fund (a combined $3,000,000 per year into dedicated housing/homelessness accounts, according to staff)

Staff framed Measure I as primarily supporting “existing essential services” rather than creating a large new programmatic expansion.

Department highlights and budget drivers

Staff reviewed major departmental changes and capital priorities across city operations. Selected details from the presentation: - Airport: ranked No. 5 on Newsweek’s list of small airports (staff credited growth), adding several permanent positions including two airport police officers and an assistant airport director; anticipated savings from Southfield Phase 2 remote‑lot changes (staff estimated roughly $1,000,000 in net savings and revenue). - Police: Measure I funding of about $6.3 million in FY26 was presented to fund the 34 officer positions; staff noted a vehicle collision repair line (~$75,000) and one crime analyst added through internal adjustments. City staff said a fully staffed department would have about 42 sworn officers, and Council members were told current vacancies are “roughly around” 20 positions (vacancy figure not finalized in the meeting). - Fire: the department has 105 authorized positions; staff said there are 86 personnel “working the floor” (the number Councilmember Santa Maria requested). Fire capital items cited included SCBA and portable radio replacement and regional dispatch contributions. - Water Resources: staff presented a large capital program (roughly $127 million operating and $34 million capital budget noted for water/wastewater) including a $17 million annual water‑main replacement allocation and six miles of main replacement planned. - Parks and Recreation: staff said the FY26 budget adds nearly $1 million to fund eight positions and restore an after‑school program; capital work includes Dwight Murphy Field and other projects.

Fees and policy clarifications

Council members asked about several fee items. City Attorney staff and department leads explained that fees must be set based on cost of providing the service, not to incentivize or disincentivize particular businesses. As an example, staff described how the proposed fortune‑teller permit fee was substantially higher than some other business permits because it requires relatively more staff time for processing and background checks; the city’s calculation was based on staff time and salary costs.

Questions, public comment and next steps

Councilmember discussions focused on Measure I allocation choices and program priorities. Councilmember Santa Maria asked how the proposed restorations compared with current staffing: staff answered that the fire department has 86 active firefighters (including three duty chiefs) and that police staffing at full strength would be 42 sworn officers, with an estimated ~20 vacancies at the time of the meeting.

Two members of the public urged larger housing investments. At the in‑person mic, a speaker identifying himself as a representative of Clergy and Laity United for Economic and Social Justice said, “1,500,000.0 is not a serious amount,” and told the committee he thought the city should allocate a larger share of Measure I to affordable housing. A second caller from the same organization repeated the request for substantially larger, ongoing housing commitments and suggested the local housing trust fund be capitalized at a higher level.

Staff and several council members noted the transfers to housing accounts are intended to be flexible: the $1.5 million set aside for housing and homeless services was described by staff as unallocated at the time of the presentation and available for council appropriation as opportunities arise. Staff also noted smaller one‑time contract restorations (about $352,000) for existing homeless service contracts previously funded with one‑time dollars.

The budget calendar provided by staff calls for the Finance Committee presentation (April 29), review by the full City Council next week, public deliberations in June, and budget adoption expected in mid‑June (staff referenced June 10 and June 17 dates for hearings and adoption milestones).

No committee votes or final appropriations occurred at the April 29 meeting; staff presented the recommended plan and answered questions.

Ending

Finance Committee members thanked staff for the presentation and public speakers for their comments. Staff said department‑specific staff were available to answer detailed questions and that certain capital projects and debt‑issuance options (for projects such as Dwight Murphy Field and the police station) remain under consideration as the council and staff work to close funding gaps.