A $21 million budget deficit may force Santa Maria to make ‘drastic’ cuts to services

SANTA MARIA, Calif. - A $21 million budget deficit may result in significant reductions to services in the City of Santa Maria.

During a City Council meeting this week, a staff report indicated cuts may have to take place in order to help the city navigate through the difficult financial times.

"We don't have sufficient revenues to pay for the services that we provide, and so we're certainly in a budget reduction mode," said Santa Maria Assistant City Manager Chuen Wu. "It's a combination to bridge that gap, the gap between revenues and expenditures, and that may include keeping vacancies open and/or reductions to programs."

Wu, who will become Acting City Manager on Monday, and will serve in the roll until recently hired David Rowlands takes over the position at the end of November, added reductions may be required throughout all city departments.

"We're asking every department to look at their operations and see how we can provide services with reduced costs," said Wu. "We identified three tiers, three tiers of budget reductions. In Tier One and Tier Two are reductions that are not public safety related, so all the departments other than police and fire, they were asked to look at their department budgets, and each department did did come up with a proposal largely reflecting, I think, keeping positions vacant and also some reductions to their programs, the Tier Three cuts, which I think the cuts that really begin to impact the city could include personnel reductions."

According to the staff report, the reduction target for all of the departments combined is $16.7 million.

A table below provided in the staff report indicated the dollar amount in cuts needed by department in order to achieve the reduction goal.

Most notably, police and fire have the biggest targeted reductions, with the police department at $7,649,896 and fire department at $3,347,740. The public safety reductions are listed in Tier Three, and are not being recommended by the city staff in their report.

"Police and fire, we know those are issues that communities really care about," said Wu. "We're sensitive to that, and so and we keep that as a Tier Three reduction, but even with police and fire, we're asking them, what what can we do now to achieve some savings? Many of the costs is personnel related, and this is for other departments, it's really, keeping those positions open or when somebody leaves, the organization or retires and keeping that open."

Over the last several months, the Santa Maria firefighters union has sought a new contract, but have not been able to come to a deal with the city.

According to the city, the firefighters union rejected a the two-year contract proposal that other city employee groups accepted.

The proposal from earlier this year included a five percent pay hike in the first year, another five percent pay hike in the second year, plus fire union paid medical insurance for the employee.

After hearing budget cuts could potentially be coming isn't sitting well with the union, which says it is already having to deal with low pay and inadequate staffing.

"That proposed cut is is very concerning to us," said Firefighters Union Local 2020 President Matt Chircop. "That proposed cut is reduction in service levels to the community. We don't have, about to trim off of our budget."

Chircop added a $3 million-plus cut would have direct and adverse impact to the community.

"$3 million cut to the fire department, that means you're taking firefighters off the streets," said Chricop. "You're you're going to be operating less fire engines in the city. That means longer response times. That means fires will burn longer and create more property damage. A fire doubles in size every 30 seconds and an independent analysis that we had conducted of the city's fire response indicated that we can only respond to 50% of the city within four minutes of drive time. That's unacceptable. To reduce staffing and reduce the number of firefighters and fire engines out there every day, is is a reduction in service that has drastic effects."

To also help bridge the financial gap, the city is also looking at ways to increase revenues, which may potentially include a number of what city staff described as, "revenue enhanced options".

Some of the ideas floated by staff included an increase in the local sales tax or the transient occupancy tax (hotel tax), cannabis tax, expanding Landscape Districts, parking fees, fire medical response fee, and several other options.

"I do think this time around the budget deficit is severe and it's it's not a situation in which somehow through salary savings we even out," said Wu. "I think that the gap is significant, and this will take some drastic measures, but also note that the city will always try to provide the best service to the community and that's first and foremost."

Even if the city were to create new ways to generate revenue, which could help offset budget cuts, Chircop said it's too early to throw support behind any of the potential sources.

"One side of me is happy that they're looking at additional revenue streams and proposals," said Chicop. "As a firefighter and representing the firefighters, we can't get behind any of these additional taxes if they just can't manage the existing budget. Without some type of reassurance about how that funding is spent, we can't support that. Measure U was passed overwhelmingly by the voters, and to now try to tax our way out of this problem when we can't manage the existing budgets, we can't get behind that until we understand exactly what those taxes are intended to do and where that money is going to be spent. Measure U was supposed to be spent on 90% police and fire, and what that has allowed the city to do is reallocate general fund monies to other projects that are not considered essential city services." 

In a release sent out on Friday, the city manager's office pointed out funding for the fire department increased from $20.1 million in 2020-21 to $25.7 in 2024-25.

The City also said it hired nine new fire positions in February 2024 through funding from the General Fund and Measure U, as well as said that rebuilding the Prevention Bureau has been one of the highest priorities of the Fire Department and is currently fully staffed.

As city leaders grapple with the budget deficit, they point out no reductions or decisions have been made as of now.

City staff will continue to analyze ways to approach the deficit and is scheduled to present City Council with more specific recommendations in February 2025.

"Back in June, the council adopted the two year budget, and that budget relied heavily on the use of reserves," said Wu. "What we're trying to do is prevent the exhaustion of our reserves. We don't want to use it all up, and so our approach is to identify new revenues, and the timing in about 3 or 4 months in early 2025, we'll come back with more specifics, but we really want to do this sooner than later. This is a budget deficit that we have for this fiscal year and in the next fiscal year, and we really want to get a handle on it today. We recognize that there's a sentiment of an organization needing to live within their means, and we are certainly trying to do that. That's the approach we are trying to take, and so I think we're going to do the best we can as far as being efficient, and still provide good services to the community, given the resources that we have."