[Updated Friday, Oct. 19. 2025, 12:20 p.m.]
After dipping into city reserves for local wildfires, COVID impacts, and other emergency initiatives, the Santa Barbara city council is considering adjusting its reserve policy to give the city more room to operate with the budgets over the next few years.
This week, city council members shared major concerns over a plan to reduce the general fund reserve target policy with the expectation that revenue increases will be able to make up for the shortfalls in the city’s reserves.
City staff presented a report about the current reserve policy levels, including a recommendation made by the Finance Committee in 2023 regarding adjusting the city’s disaster reserve policy target level to 10 percent — down five percent from the current target level of 15 percent. In addition, the committee recommended that council consider changing the overall revised reserve target level 22 percent for fiscal years 2025-26, with the intention to replenish the city’s reserve to the usual 25 percent over the next five years
Councilmembers heard the report but did not give specific direction on the reserve policies.
