Measure U spending and CalPERS debt are focus of Santa Maria city budget meeting | Government & Politics

The questions were asked following the presentation of the department's budget at the May 21 meeting and were collected by the mayor's office and compiled into a public document along with answers, responses and supporting documentation.

Questions also focused on specific budget amounts, capital projects accounted for in the proposed budget, definitions of budget terms, more detailed explanations of budget structural elements such as the operating fund, or best practices for creating and maintaining reserves.

Of the 50 questions submitted, 20 were related to the financing of public safety activities, including training requirements/duration, reimbursement policies, and a comparison of salary and benefits packages between the Santa Maria Fire and Police Departments.

Another question from council members focused on overtime costs for police and fire. Police said the majority of the overtime is due to staffing issues such as absenteeism, paid family leave and workers' compensation, while fire said absenteeism is due to an overall staffing shortage.

Interim City Manager Alex Posada said a fire department survey found the Santa Maria Fire Department is understaffed compared to national and local standards: A survey of fire departments on the West Coast found the average staffing level is 0.92 firefighters per 1,000 residents, while Santa Maria has only 0.64 firefighters per 1,000 residents.

During the approximately two-and-a-half hour meeting, Posada reviewed the questions and answers submitted and provided additional information and background on certain items. Department heads were present to answer specific questions from council members and provide further clarification on budget items at Posada's request.

CalPERS is a state-run retirement system that funds public employee pensions with money from local governments and investments through the stock market. The retirement system is requiring local governments to increase payments into the system to make up for past shortfalls and the recent impact of market-driven changes on the pension system. Those increases are expected to continue through 2031-2032, Posada said.

Interim Finance Director Zenia Bradford told council that CalPERS revenue assessments for 2022 showed a market valuation of -0.61%, and Posada noted that if CalPERS doesn’t meet market expectations, cities and local governments will have to make up the difference.

Councilman Carlos Escobedo, Bradford agreed, noted that if the stock market or other CalPERS investments fail, the city, not CalPERS or the state of California, would have to pay out the full amount of retirement benefits. Bradford noted that CalPERS participants' retirement benefits, unlike individual 401(k) and other private retirement accounts, are not subject to market changes.

Council members will consider adopting a budget that projects a $17.5 million budget deficit. At the June 18 City Council meeting, it was announced that the funding would increase to $19 million in 2024-25 and $19 million in 2025-26.

The city's Finance Department is proposing the use of reserve funds to balance the budget, which must be approved by June 30. The proposed balanced budget includes the use of $8.5 million in general fund reserve funds, $4.4 million in Measure U reserve funds and $8.7 million in LEAF reserve funds.

The proposal would use up all of the general fund and Measure U reserves, leaving only $1.9 million in LEAF reserves. City staff also are proposing to restore fees and service rates to 100%, and Posada said he has directed department heads to develop cuts plans for their departments to address budget shortfalls.

The City Council is scheduled to hold its regular meeting on Tuesday, June 4, at 5:30 p.m. in the City Council Room. The Santa Maria City Council Room is located inside City Hall (501 East Cook St.).