Facing revenue challenges due to an uncertain national outlook and a local economy slowly recovering from the COVID pandemic, the city council approved a two-year budget plan on Tuesday evening that included tough decisions focused on resilience.
The budget in numbers.
The city’s adjusted General Fund is expected to total $478,551,127, with revenues falling short at $473,511,147. The shortfall was anticipated to be more than $10 million, but a hiring freeze will be implemented for non-sworn personnel to help cut that amount by $5.4 million.
When departmental operating funds, capital improvement expenditures, and various reimbursements and transfers are included with the General Fund, the total 2025-2027 Biennial Budget amounts to $793.3 million for FY 2025-26 and $829.7 million for FY 2026-27.
The city council also adopted the 2025-2027 Housing Authority Biennial Budget, left largely unchanged from what was presented to the council in May, at $31,378,075 for FY 2025-2026 and $31,416,882 for FY 2026-2027.
According to the staff report, “The Budget is balanced in FY 2025-26 but relies on working capital and other reserve funds to prevent further reduction of service levels during the biennial period. Non-general fund enhancements incorporated in the budget are supported by available fund balances.”
Questions about hiring.
The report also states that, “Council directed the City Manager to implement a quarterly reporting of Police and Fire Departments’ overtime expenditures, including details of special deployments and factors requiring the use of overtime, if the department is on track to exceed the salaries and wages budget.”
But the hiring freeze does have its share of exemptions, which include positions needed for:
- Health and safety
- The implementation of Measure K proposals
- Implementation of net-zero proposals included in the budget
- Compliance with legal requirements
- Sustain core city services – what we have to do
- Revenue-generating initiatives
Progressive Revenue Generation
The city is looking at a variety of ways to increase revenue through parking. Two programs approved are to install additional parking meters at opportune sites around the city and on Neilson Way, and significantly raise the cost of preferential parking permits.
Another effort would raise funds by implementing convenience fees for credit and debit card payments for parking-related transactions. This would include payments made in person, online, and at all city-owned parking lots and structures. This would align with practices already in place for non-parking-related services.
Further, license plate recognition technology will be added to downtown parking structures, which will help the city track down drivers who owe the city money.
The city will also charge a larger penalty to those who violate or remain out of compliance with specific sections of the Municipal Code. Initial fines of $75 have not proven an effective deterrent, the city says, so initial infractions will now be fined at $150. If the same violation is repeated within 36 months of the first citation, another equal to 125% of the first violation will be administered; and if again within 36 months of the second, another equal to 150% of the first violation will be charged.
One particularly controversial revenue generator is a proposal to increase the fees on community garden plots by 200%, which even drew the attention of the Los Angeles Times last week.
Funding police and neighborhood associations
However, the budget isn’t without new allocations. Voters recently passed Measure K to address public safety, safer streets, and economic recovery. The council has proposed using Measure K funds for a variety of items on this front, including:
- Four full-time Community Service Officers to enhance downtown and park safety*
- Funding the Advanced Provider Unit (APU) pilot program to assist the unhoused and vulnerable populations
- Security upgrades at the library, Miles Playhouse, and Camera Obscura
- An Ambulance Operator Program requiring three temporary full-time employees
- Additional equipment for the drone security program
- Streetlight maintenance and repairs, as well as copper wire replacement
- Two full-time positions – a Traffic Painter/Signage and Markings Technician and a customer service-related position to support the safe neighborhood streets program
- “No right on red” signage for scramble crosswalks downtown
- Preserving $1.5 million to support Police Special Deployments overtime pay
(*The Police Department has requested that the council consider an alternative staffing recommendation to add 1.0 Police Sergeant and 1.0 Community Services Officer in place of the 4.0 Community Services Officers. They cite the addition of 11 new sworn officers in need of a sergeant in charge.)
The budget also moves to begin repaying funds borrowed from the Housing Trust Fund and an annual allocation of $25,000 to the Early Childhood Task Force to ensure learning readiness.
The Capital Improvements Budget, which allocates funds for major, long-term investments in physical assets such as buildings, infrastructure, or equipment, breaks down thusly:
- Projects funded through General Fund dollars come out to $16,080,829 for 2025-2026, and $21,426,552 for 2026-2027
- Projects funded through several other specific funds will equal 93,093,417 for 2025-2026 and rise to 115,520,055 in 2026-2027.
Resident Jill Hawkins said during public comment that the increase in preferential parking permit fees is “a direct attack on residents,” and suggested there must be other ways to generate revenue. She suggested the increased fees are regressive, as wealthy single-family homeowners have garages while the low-income and middle-class residents of Santa Monica are left to park on the street.
Recreation & Parks Commissioner John C. Smith made a passionate plea for the council not to cut funding supporting the city’s neighborhood associations. He cited the significant work the Wil-Mot Neighborhood Association has made in improving the appearance and safety of Reed Park. The funds they receive also go to supporting communication efforts among members.
Several speakers showed up to oppose an increase in fees for the use of Santa Monica’s Community Garden plots, some of whom have been cultivating them for decades. They asked the council to support an alternative proposal that wouldn’t price out many gardeners from enjoying their plots.
Both Councilmember Natalya Zernitskaya and Mayor Lana Negrete asked about the options for public safety, specifically comparing the hiring of four community service officers to hiring one police sergeant and one community service officer. This gave Chief Ramon Batista, who was present, the chance to emphasize his preference for the latter.
Things got interesting from there.
Zernitskaya moved to pass the staff-recommended budget but with three amendments: 1) The community garden alternative preferred by the gardeners; 2) The one sergeant/one community service officer plan favored by Chief Batista; and 3) Use $49,000 of the more than $73,000 in savings derived from that approach (vs. the hiring of four community service officers) to offset the cuts to the neighborhood associations. However, she failed to receive a second for her motion.
Councilmember Dan Hall then moved for the staff recommendation with some amendments of his own: 1) To swap the Sustainability Office operating budget for the community garden fee increase; 2) The one sergeant/one community service officer plan favored by Chief Batista; and 3) to fund the upcoming 4th of July parade with $15,000 in discretionary funds while also continuing the council discretionary spending identified by staff for 2025-2027. Hall’s motion was seconded by Mayor Pro Tem Caroline Torosis.
This led to Councilmember Ellis Raskin proposing an alternative motion that essentially included everything Hall proposed while adding back in Zernitskaya’s idea to use the savings derived from the public safety spending to shore up the neighborhood associations. Zernitskaya seconded the motion.
However, Hall quickly reminded his colleagues that the savings are still in Measure K dollars that should stay within the police department, and that Chief Batista has stated he wants to use those dollars to bolster training.
But when Chief Batista again came to the podium, he said he sees sense in helping the neighborhood associations communicate with members, as they are often the mouthpiece for safety messages and public announcements coming from the police department. City staff also reminded the council that the neighborhood association cuts were $49,000, not $73,000, and Raskin and Zernitskaya agreed that the remaining $24,000 should stay with the police department for training purposes as part of their substitute motion.
Hall then shared that he found it “disgusting” that the council would use public tax dollars to fund organizations “that make political endorsements,” which some neighborhood associations do.
Prompted by a question from Zernitskaya, staff stated that the neighborhood associations can’t use city grant money for political purposes. They would have to find money elsewhere to do that. Hall then received an awkward chuckle when he asked, “Have we ever audited that?”
Councilmember Jesse Zwick, participating over Zoom, offered an amendment that only neighborhood associations that are 501c3 non-profits, and therefore can’t make political endorsements, should be eligible for city grant funds.
Negrete, who has formed four non-profits herself, said the process of obtaining 501c3 status is very long and arduous. It was ultimately agreed to and added to the motion that a thorough review of neighborhood association receipts will be conducted each year.
Raskin’s substitute motion with the accounting provision was passed, 4-3. Raskin was joined by Zernitskaya, Negrete, and Councilmember Barry Snell in voting yes. Hall, Torosis, and Zwick voted no.
