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Council receives FY26 second‑quarter budget review, approves staff recommendations and two resolutions
Summary
City finance staff outlined projected structural deficits, reserve depletion risks (reserves projected to exhaust by FY2028), and potential revenue options including a property transfer tax and a transient occupancy tax increase; Councilmember Jordan moved to adopt staff recommendations and two resolutions and the motion passed unanimously of those present (Councilmember Harmon absent).
City finance staff presented the Santa Barbara City Council with a second‑quarter fiscal 2026 financial review that showed a structural budget shortfall across the multi‑year forecast and warned that, without changes, general reserves could be depleted by fiscal year 2028.
Finance Director Martín told the council the city projects a structural deficit beyond FY2026 and emphasized the council’s adopted reserve policy that targets 25% of annual operating expenses. Staff said the contingency reserve (10% policy level) is projected to be exhausted by the end of FY2026 under current assumptions and that, barring corrective actions,…
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