The Numbers Don’t Match

The numbers simply don’t match.

I have made this case for years. In 2023, during budget deliberations, I pointed out that the numbers in the City of Santa Barbara budget presentations and the numbers in our printed budget books and the numbers in our “online transparency tool” did not match. We were told there was an internal budget that neither the council nor the public had access to.

That’s not transparency. That is no way to make informed decisions.

Unfortunately, I needed to raise the issue again in 2024, 2025, and now again in 2026. This time, there are even more inconsistencies, and the stakes are higher because the focus has turned to reserves. Reserves are the city’s financial firewall: the funds that allow Santa Barbara to respond to wildfires, floods, earthquakes, and other emergencies without having to cut essential services or take on debt in the middle of a crisis.

The council’s reserve policy target is set at 25 percent of the operating budget. As overall revenues grow, so does the dollar amount required to meet this 25 percent reserve policy. We have not been adding to these reserves as fast as our revenues have been growing, so there is a gap. This is not the same thing as “spending down” reserves. The actual dollar amount in the reserve fund target has grown. In FY2023 the reserve fund target was $42,057,737; in FY2024 the reserve fund target was $45,430,890; and in FY2025 the reserve fund target was over $50 million. The last time our reserves appear to have been fully funded to policy targets was 2023. This is a fixable issue. 

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Last year we passed a two-year budget (with a 4-3 vote) on the specific condition that the Finance Committee would take a year to identify an ongoing funding source for the Local Housing Trust Fund, and a plan to increase the reserve. They had a year and they neither identified a source nor made a plan to increase reserves. This proposed FY27 budget came out of the Finance Committee without a plan, despite new revenue sources, despite a year to address this. I have made suggestions, and they have not been considered.

To close this gap, we need to plan based on accurate and consistent numbers. Imagine trying to keep your savings account at 25 percent of your checking account balance, but you can’t figure out what your checking account has in it because your bank statement says something different than your checkbook register, and different from your ATM receipt, and different from what the bank teller told you. How could you figure out how much is available or required to save if these numbers don’t match?

There are different sets of numbers depending on if we are looking at the PowerPoint presentations during budget hearings (different numbers on different days), or the online budget “transparency tool”, or the audited Annual Comprehensive Financial Report (ACFR), or the City Administrator’s overall budget message. Every year, I study these sources closely, and they do not match. Every year, I bring this up and send it to the Finance Committee to make these numbers consistent, which hasn’t been accomplished.

This year, the presented budget inconsistencies are more glaring than ever. There are differences of tens of millions of dollars. These are not rounding errors. These are differences in what is being called “actual” and how it is presented. These numbers determine how much the city council can fund fire safety, critical infrastructure, services that residents rely on for health and safety, parks and libraries, programs that support our community, local affordable housing, safe streets. So what is the actual “actual”?

The city’s annual budget describes the council’s priorities. Numbers reflect how we serve our constituents: what gets funded, and what gets cut. Santa Barbara residents deserve to have a clear and understandable picture on how we make those decisions.

To be specific, I created a table to show how differently these numbers have been presented. All the numbers in the table are publicly available and came from presentations to council or are available online in the online budget “transparency tool,” the audited Annual Comprehensive Financial Report (ACFR), or the City Administrator’s budget message. I am sure there are explanations, and I want to discuss them in public during a council meeting.

Pick any column (FY2025 is a good one) and see how the “actual” revenues or the “actual” expenditures vary depending on the source. In the FY2025 example, the amount that is supposed to reflect the “actual” expenditures range from $187.3M-$226.8M in various documents. You could look at any of these columns and see similar discrepancies. Which set of numbers should we have used to make decisions on what to fund and what to cut and how much to save? Which set of numbers are the reserve targets based on? Which set of numbers should the public use to evaluate our decisions?

If there are multiple “actual” amounts that are different from each other, which one is the actual “actual”? My money is on the audited Annual Comprehensive Financial Report, but it isn’t my money, it’s the public’s money, and the public deserves consistency and transparency from their elected leaders.

Correction: Information about the reserve fund targets has been corrected in this version.