Santa Maria council receives second‑quarter financial report and adopts budget amendments including limited pension‑reserve draw

The Santa Maria City Council received and filed the fiscal 2024–25 second‑quarter financial report and adopted a resolution approving several budget amendments on Feb. 18.

Why it matters: The report showed revenues and expenditures near the half‑year mark, ongoing expenditure pressures, and staff proposals that aim to narrow the budget gap without increasing the general fund deficit. Among the amendments approved was a one‑time $3.1 million draw from a pension reserve that currently holds $13.2 million.

What the council voted on The council voted to receive and file the second‑quarter financial report and to adopt a resolution approving specified budget amendments. The roll call on the resolution was: Councilmember Aguilera Hernandez, Aye; Councilmember Sotto, Aye; Councilmember Flores, Aye; Mayor Pro Tem Escobedo, No; Mayor Alice Patino, Aye (4–1). The consent calendar was approved earlier in the meeting by unanimous vote (5–0).

Key figures presented - General fund: Revenues were approximately 40% of the annual budget at mid‑year; the presentation showed general‑fund revenues at about $37.5 million compared with $34.5 million in the prior year, and expenditures at about $45 million (roughly 40% of budget).

- Measure U: Measure U revenues were reported at 51% of budget for the half‑year; expenditures were at about 38% primarily due to timing of capital spending.

- Enterprise funds: Water and wastewater net revenues were reported as approximately $5.57 million higher than last year; operational savings and timing variations were noted across enterprise funds.

Budget amendments adopted (summary) According to the interim director of finance, the council-approved amendments did not increase the general‑fund budget gap because they used funds already identified in other reserves or enterprise accounts. The amendments included: - A proposed draw of $3,100,000 from a reserve set aside for unfunded pension liabilities (reserve balance: $13,200,000). - Reallocation of two Recreation and Parks full‑time positions from the general fund to a landscape district fund (estimated general‑fund benefit: about $200,000). - An increase of $30,000 for a backflow module to support an ERP integration in utilities. - An increase of $150,000 for the city's AB 1600 (growth mitigation) program update. - A $125,000 budget true‑up for the previously approved purchase of Lot 20. - An increase of $1,900,000 for a planned drainage improvement project funded from mitigation and developer funds. - An increase of $2,400,000 from a REAP grant for a sewer project. - Adjustments in transit funding to support new micro‑transit service operations and procurement of additional buses (specific procurement amounts tied to transit purchases were discussed by staff; some line‑item amounts were recorded as part of the staff presentation).

Operational context and staff recommendations Interim Director of Finance Miss Bradford told the council that staffing vacancies, a hiring freeze for non‑public‑safety positions and contract timing had reduced expenditures in some areas; the city manager had implemented measures projected to generate approximately $6.5 million in savings through the fiscal year. Bradford recommended that the city continue to pursue both expenditure controls and revenue options, including the possibility of a local sales‑tax measure (up to one‑half cent of capacity remains) or property‑tax‑based options such as a community facilities district.

Council questions and clarifications Councilmembers asked for additional detail on specific line items, the timing of awarded construction contracts (a downtown sewer project was reported as awarded and expected to begin construction within weeks), and the transit fare‑box ratio (reported at 9.9% and noted as a decline compared with prior reporting; staff agreed to follow up with clarification via email).

Vote and outcome The resolution adopting the second‑quarter budget amendments passed 4–1. The consent calendar earlier in the meeting was approved unanimously. Staff said the amendments were supported by existing funds or grants and therefore did not expand the general‑fund gap.

Ending note: City staff asked council to consider both expenditure and revenue strategies going into the next budget cycle and suggested conducting voter‑sentiment surveys before pursuing ballot measures.