Santa Barbara Grapples with How to Cut Multimillion-Dollar Baby in Half

Finance Committee Looks for Best Way to Spend $14.6 Million Surplus in City’s Budget

From left to right: Eric Friedman, Meagan Harmon, and Randy Rowse | Credit: Courtesy; Erick Madrid (file)

A friendly but pointed game of tug-of-war played out this Tuesday at the city’s Finance Committee, with members Eric Friedman, Meagan Harmon, and Randy Rowse grappling with how to spend a $14.6 million surplus in Santa Barbara’s budget. “It’s a good problem to have,” said Friedman.

The lion’s share, Friedman explained, came from vacant staff positions, both planned and unplanned. The city has struggled mightily with recruiting and retaining critical employees, Friedman said, and thus current staff has had to shoulder more work with fewer people. Therefore, he argued, a significant portion of the surplus should go toward raising salaries and making Santa Barbara a more competitive employer among other public agencies in the region. The rest of it ought to be divided between paying down the city’s unfunded pension liability and beefing up a newly created affordable housing trust.

Harmon countered with a proposal to allocate half of the $14.6 million to pensions — “It’s the wet blanket that hangs over every council meeting,” she said — and the other half to the housing trust. She liked the idea of raising salaries, she explained, but worried about allocating one-time money to what amounts to an ongoing cost. “I’m worried we’ll find ourselves in the same position a year from now,” she said. “I’m not sure it makes prudent sense.”

Speaking of prudence, Rowse weighed in, the city should make sure “its house is in order” before it starts spending money it may soon miss as the economy steers toward the “potential precipice of a recession.” He agreed with finance staff’s recommendation that half of the surplus should go toward paying down pension liabilities with the other half squirreled away in the general fund reserve. 

By the end, after City Administrator Rebecca Bjork made her own pitch for the reserve option, the committee voted 2-1 (with Rowse against) to recommend half be saved in the general fund with the other half divvied up between the housing fund, pensions, and raises. How the pie is cut will be up to the full council at a later meeting.

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