Santa Barbara finance committee reviews draft FY2026 downtown parking and downtown services budget

The Santa Barbara City Finance Committee on April 15 reviewed a draft fiscal year 2026 downtown parking and downtown services budget and discussed a set of operational “tune ups” staff say will reduce a projected shortfall without raising rates.

Staff said the downtown parking enterprise fund has been underfunded for years and that the city will propose moving several non-parking costs into a new downtown services program supported by the general fund. Sarah Clark, downtown parking staff, told the committee “our system is underfunded and it has been for many years,” and described revenue, service and capital gaps that she said left the fund with multi-year deficits and drawn-down reserves.

The proposal is intended to be a two-phase approach. Phase 1, for FY2026, would pause most capital spending, complete an updated facilities assessment, and pilot operational changes. Phase 2 will address FY2027 and later after the facilities assessment is complete.

Clark said hourly customers supply roughly two-thirds of parking revenue and monthly permits the next largest share, while a business-value estimate used by staff values downtown parking services at about $24 million annually against roughly $10 million in revenue. She said subsidizing the courtesy period costs the city about $6 million a year and that downtown occupancy has fallen “about 20%” since the pandemic, factors that contributed to multi-year deficits.

To narrow an estimated FY2026 shortfall, staff proposed three main fiscal moves: (1) move non-parking expenses such as maintenance of the State Street Plaza into a new downtown services program funded from the general fund; (2) defer a tranche of planned capital projects for one year while completing an updated structures and facilities assessment; and (3) implement modest operational changes ("tune ups") intended to improve utilization and enforcement without raising rates.

Clark gave cost figures and program details: without changes, FY2026 faced about a $3.1 million deficit; the proposed tune ups plus capital deferral would shrink that to about $1.8 million; and moving non-parking expenses into the general fund yields an estimated FY2026 deficit of roughly $55,000. She said staff would retain about $640,000 of capital spending in FY2026 (including roughly $320,000 for the facilities assessment and about $100,000 for contracts to operate parking equipment) and would defer about $875,000 in other projects (elevator modernizations, Amtrak building roof repairs, Lot 11 trellis repairs and signage updates). FY2027 currently shows about $1,680,000 scheduled but staff said they would re-evaluate once the facilities assessment is finished.

On operational pilots, staff described several targeted changes meant to improve parking availability and reduce abuse of the free courtesy period: reduce Ortega Garage commuter permit pricing from $145 to $70 a month (estimated revenue loss about $65,000 annually but expected to attract new permit holders), lower 24/7 residential-style permit pricing in the Ortega Garage from $250 to $125 a month (estimated revenue loss about $15,000 at current subscription levels), and bring the Helena lot (a small 39-space lot near the Funk Zone) into a pilot pay-by-plate system with a kiosk and pay-by-phone option. Clark said the Helena pilot would mirror the waterfront lots’ self-service model and give staff a small site to test a different operational approach.

Staff also proposed technical changes to curb repeated use of the 75-minute courtesy period, which municipal code prohibits being gamed by repeatedly moving a vehicle to restart the free period. Clark said the city’s vendor and data system can implement options such as limiting the courtesy period to once per day per lot, a cumulative 75-minute allowance across lots, or making the courtesy period available only every four or six hours. Clark said staff discussed those options with the downtown parking committee and will continue to refine them.

Finally, staff proposed simplifying and standardizing on-street timed parking downtown (for example setting 15-minute, 75-minute and 90-minute zones by block) to make enforcement and compliance easier for parking officers and the police department.

Committee members praised the approach as customer-focused. Mayor Rouse said the presentation “is thinking outside the traditional parking box,” and Council Member Santa Maria and Mayor Rouse both welcomed reopening conversations about employee permits in the Funk Zone. Council Member Harmon asked whether permit sales would be halted once peak occupancy hit an 85% threshold; Clark replied that staff maintains that threshold and stops selling permits in lots that reach it.

City staff also told the committee that the city administrator’s recommended budget will be presented to the City Council the following Tuesday and posted online the next day; the staff speaker said the recommended budget would reorganize some functions out of the parking enterprise fund into the city administrator’s office and be funded by general fund taxes in the recommended budget.

There was no formal action or vote during the finance committee meeting; staff will incorporate feedback and the recommended reorganizations into the city administrator’s recommended budget for council consideration.

Additional context and figures discussed at the meeting: Clark said the parking fund previously paid roughly $1 million per year toward the old downtown shuttle and that Lot 11 and Lot 5 are frequently at or near capacity so permits are not sold in those lots. She also noted trellis repairs in Lot 11 and an identified need for Amtrak building roof work that were deferred under the proposed FY2026 capital deferral.

No public speakers provided substantive testimony during the item; the committee moved on without a vote and adjourned later in the meeting.