The city of Santa Barbara finished the fiscal year that ended June 30, 2021, with a nearly $6.6 million General Fund surplus.
Its net position grew $31 million compared to a year prior, the City Council’s Finance Committee learned in its Tuesday meeting.
The favorable position may prove necessary as the city looks at its pension-plan liabilities and hopes to create housing options for the homeless.
Accounting manager Doug Smith credited the “modest surplus” to American Rescue Plan Act funds and strict budgeting. The city cut back on $60 million in expenditures entering the fiscal year.
Sales tax and transient-occupancy tax revenue increased toward the end of the fiscal year, bringing up fourth-quarter revenues.
Fiscal Year 2020 ended in a $2.8 million deficit, and the city dug into its reserves.
The General Fund reserve balance was $8.5 million below target, but it is now less than $500,000 below policy level.
“Reserves have been used heavily since COVID, tight fiscal controls and ARPA funds allowed the city to end the year closer to the policy-target level,” Mr. Smith said. “However, reserves are currently being projected to be used in Fiscal Year 2022 as challenges still remain in the General Fund.”
The enterprise funds (such as water, downtown parking, airport and golf) are in “good health,” he said. Downtown parking took a revenue loss during Fiscal Year 2021, but water was profitable. All have reserves at or above policy level.
“We have a significant amount of capital investment, investing in our community, and it’s been a particular interest and focus to continue looking at our reserve management practices. In this time of post-COVID and economic volatility and uncertainty, it really is important that we maintain an adequate level of reserves not only in the general fund but also in our enterprise funds,” Keith DeMartini, the city’s finance director, told the committee.
Finance Committee Chair Eric Friedman acknowledged the discussions ahead, focusing particularly on the pension liabilities.
“There’s a lot more work to be done,” he said. “But as we take this piece by piece, we will continue to be in a strong position and appreciate all that we’ve done.”
email: ahanshaw@newspress.com
