Santa Paula: Council Balances 2017/2018 Budget using 30% of Measure T Funds

By Sheryl Hamlin

Balanced General Fund

At $16.1 million, the expenditures in the interim FY 17/18 Santa Paula General Fund Budget are projected to exceed the budgeted FY 16/17 expenditures by $1.5 million, but the projected revenues for FY 17/18 are almost identical to the FY 16/17 budgeted revenues of $14.5 million, as shown in the chart below.

FY 2016/2017 versus FY 2017/2018

The structural factors contributing to the differences were not elaborated, as suggested by Sheryl Hamlin in Public Comments. Structural factors include total revenue, salaries, benefits, and pensions, along with other expenses and extraordinary expenses summarized across the entire General Fund presented chronologically so that the council can understand the structural changes to the organization over time.

The exercise of the evening was to balance the budget. Using “Expenditure Adjustments” of $826,436 primarily from the potential annexation with the Ventura County Fire Protection District supplemented with Fund 104 monies (Measure T) in the amount of $676,866, the FY 2017/2018 budget was “balanced”.

In explaining the budget, Mike Sedell, former Simi Valley General Manager, said this was the most difficult budget he had seen, but it presented “great opportunities for the city and will change the direction of the city in the future”. He did not elaborate on this statement further. He stressed that this was an interim budget and that he would be available to help Mr. Rock with subsequent versions of the budget. Monies from Mesaure T were used to balance the budget based on what they “heard” at the Measure T meeting. This meeting was reported here.

Potential Law Suit?

The budget included an expense of $200,000 for a potential suit; however, neither the council nor the city attorney provided details of this potential suit.

Transfers to Other Funds

There was no mention of either the water or the sewer funds and how much revenue the General Fund would derive from transfers from two enterprise funds. There was mention of a $100,039 transfer in full-time staff costs to be charged to the CIP (Capital Improvement Program). The CIP is funded through bonds from the water and sewer projects and, in the case of streets, funded through various taxes such as the recently passed SB 1 gas tax increase.

There was mention of the city’s “allocation schedule” at a previous meeting, which consultant Castania is developing, but this schedule was not provided. Such a schedule explains the monies to be transferred from the enterprise funds to the General Fund based on a pro rata share of the incurred expenses.

Statement from Measure T Chairman

In addition to four students from CAUSE, who supported a larger allocation to youth services, Kristin Majda, chair of the Measure T Commission made a statement. To read the full statement, click here.

Below is a highlight from the statement:

Though Mr. Sidel (sic) stated that the recommended budget he presented is based on interpretation of what he heard and city staff heard at the Measure T Committee meetings, I want to emphasize that their interpretation of our meetings is not our formal recommendation, nor does their budget recommendation necessarily reflect the actual recommendations of the Measure T Committee, which are presented here within. That said, we understand their need to present a recommended balanced budget to you today and understand how difficult it has been for them to develop this budget recommendation. I just want to make it clear that the Measure T Committee has not had an opportunity to review this budget proposal and does not necessarily endorse the allocations listed in the Fund 104 Measure T column.

Vice Mayor Gherardi suggested a separate meeting to hear more from the Measure T Commission.

Public Comments from Measure T Chair

During Public Comments, Kristin Majda, as a citizen, stated that although she understood the economies of scale the annexation into the VCFPD will bring, she questioned the lack of detailed calculations of future pension liabilities to the city. She said that unfunded liabilities are happening all over California to the detriment of many cities. Her recommendation was to “dig deeper” into the calculations.

New City Manager

Michael Rock, Santa Paula City Manager

Michael Rock sat at the dais during this meeting in his capacity as City Manager. It was noted by Council Member Garman that Mr. Rock had been seen on Main Street meeting the citizens and Council Member Hernandez mentioned that Mr. Rock had found lodging in Santa Paula.

Mr. Rock reiterated that only 30% of the Measure T monies had been allocated. Review of the remaining $1.5 million could be discussed in the future. They would be monitoring the sales tax receipts from the county to determine how the spending patterns materialize. He also mentioned the State gas tax SB 1 as a potential source of revenue.

Note that Sheryl Hamlin suggest in Public Comments that a tranche of the Measure T funds be saved for a rainy day fund.

Motion to Approve

The interim budget was approved unanimously with Mayor Crosswhite saying she approved only because it was an interim budget, but did not clarify her concerns with this budget.

Future Meetings

The council agreed to a special meeting on July 31, 2017 to discuss the budget and to compensate for the July 3, 2017 canceled meeting.

To watch the meeting, click here.

For more information about the author visit Sheryl Hamlin dot com.

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