City Council - Special Meeting

Thank you.

Good morning. This is a special meeting in the Santa Barbara City Council, Tuesday, June 23rd, 2026. Please join me in the Pledge of Allegiance.

I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.

Mr. Clerk, would you call the roll, please?

Yes, Councilmember Friedman? Here. Councilmember Santa Maria?

Here.

Councilmember Gutierrez? Present. Mayor Putnam-Sneddon? Here. Councilmember Harmon?

Here.

Councilmember Jordan? Here. And Mayor Rouse?

Here. All right, very good. We have an item to read. If you'd go ahead and read that in the record, please.

Yes, item one, fiscal year FY2027, operating and capital budget deliberations continuation.

All right, very good. We have no staff presentation. All the evidentiary items have been presented before. We do allow some public comment on this item. It'll be limited. It'll be one minute per speaker. If you'd like to combine with other speakers, it would be two minutes max per person. And we will accept new submissions for both online and in person for public speech at 1010 will be the cutoff on that. All right, you got that, Mr. Clerk? Very good. Would you reset the time for one minute, please? And our first speaker will be Chelsea Lancaster.

Wasn't quite ready, but one minute. I'm sure we can do this. Uh, hello council community. Um, I'm just here to address the budget crisis that we are in and express my disappointment that it feels like messaging from city leadership continues to change. throughout this process and there seems to be a lack of transparency around what's actually happening with our taxpayer dollars. I'm also really concerned about the continued over investment in policing in Santa Barbara and I call on our council members who consider themselves allies on this council who may have more privilege than some of the other more marginalized council members who have been elected to represent the margins in this community, the people that many of y'all will never hear from. When a woman of color sits on this dais and talks about an overinvestment in policing and offers a very reasonable alternative in terms of agreeing to fund one additional position, When we look at the rhetoric that's been in the community around problematizing that position, I think it's really important for us to all really sit with our relative privileges and the ways in which we as a community focus on safety. Safety does not look like an overinvestment in policing. Safety looks like dignified housing. Safety looks like community services. Safety looks like youth programs. And I really implore, again, I don't count on the three of the white men on council, but I really implore the rest of you to be courageous. Thank you.

Stanley Zankoff.

Hello, good morning. I'm here to primarily just ask to why there's no money allocated for the start of a rent stabilization program. We know our estimate for the total units covered. And I guess I just wanted to share, you know, I worry because at so many turns with this process, there's been disconnects between the plans and the execution, council and staff, state law and the draft ordinance, and I struggle to keep giving this effort the benefit of the doubt when I talk to people and defending it to the hundreds of people we talk to. And, you know, I think quite honestly it would be really REASSURING TO BE ABLE TO GO BACK TO PEOPLE AND SAY, LOOK, THIS IS HAPPENING IN JANUARY. WE HAVE THE MONEY SET ASIDE FOR IT. THE FUNDS ARE THERE AND WE SIMPLY NEED LEADERSHIP TO COMMIT THEM TO A PROGRAM THAT HAS BEEN IN THE PROCESS FOR MONTHS. AND I DO WONDER WHY, YOU KNOW, DESPITE THE BUDGET PROCESS IS AN OPPORTUNITY FOR TRANSPARENCY AND I'D LIKE TO LOOK AT WHY WE'RE NOT HOLDING THE POLICE DEPARTMENT TO THE SAME STANDARDS AS OTHER DEPARTMENTS. THANKS.

Anna Arce?

Okay.

So over the last several weeks, the city council has been making decisions about the fiscal year budget that will shape the future of Santa Barbara. I am concerned that the city's budget priorities do not fully align with the urgency of our housing affordability crisis or with the policy commitments that council has made in previous meetings. At a time that the city is drawing from emergency reserves, implementing hiring freezes in multiple departments, and emphasizing fiscal restraints, it is fair to ask whether those standards are being applied consistently across all departments, policy priorities, measurable community needs, and long-term fiscal sustainability. If council intends to adopt a rent stabilization ordinance, it must also clearly and transparently identify the resources necessary for administration, compliance monitoring, and enforcement. Without adequate funding, the city risks creating a program that exists on paper but lacks capacity to provide meaningful tenant protection.

Thank you. Joanne Olenek?

Good morning, Mayor and Council members. My name is Joanne Olenek. I am speaking today on Agenda 1. We are looking at a budget that tells us our reserves are depleting, our contingency is gone, and our deficit is growing. But our problem isn't a shortage of taxpayer dollars. It is a shortage of fiscal discipline and a lack of financial transparency. Look at the facts of how we got here. When the voters approved Measure G in 2008, the city came to the voters with a clear promise. Give us this tax and we will split it down the middle, 50%, permanently sequestered to fix our broken roads, and 50% to the general fund. The public trusted that promise. But today, Kelly McAdoo and Finance Director Keith DeMartini are recommending an amendment. They call it modernization. They say it provides flexibility to transfer our much-needed road money right into the general fund. Can I finish?

Thank you.

Can I finish?

Just that sentence and that's it.

Let's call it exactly what it is, a shell game.

Thank you.

Thank you.

Rich Appelbaum? Mayor Rouse and members of City Council, always good to be here, most of the time. Anyhow, CLU Santa Barbara commends you for your decision last week to commit $2 million to the Local Housing Trust Fund, following staff's recommendation that a million of this come from Measure C. As you may know, the governor and state legislator has just approved a bond measure which will put $200 million into trust funds, and that requires local contribution. There are links to that in my letter to you. Related issues, the RSO, which you just heard of, which we understand it, lacks budgeting for its startup period where costs could reach a couple million dollars. While the RSO will eventually be supported by its registration fees, its initial costs must be supported if it is to be effective and should be budgeted also. I truly hope you can reach a 7-0 consensus on next year's budget. Thank you.

Thank you. Larry Severance.

Good morning, Council. I'm here on behalf of CLU Santa Barbara. My comments will be brief. It would be great if you can balance the budget. We have a housing crisis, and it's foremost in most people's minds in this community, so that should receive priority. Thank you for funding the Local Housing Trust Fund. You can also help by giving some teeth to the rent stabilization ordinance and putting in place the mechanics for working that. The suggestion is to combine the mediation function and the enforcement function because those two things can be combined. They're effectively done so all the time in the courts and it could save staff and money to help you balance your budget. Last, I'd like to mention I don't think anybody in this room would disagree public safety is a priority. But we have one of the lowest crime rates in this county that we've had in a decade. Public safety and crime, the crime rate is not the problem right now. Thank you.

Thank you. Larry Berent.

Council, I'm Larry Berent, indivisible Santa Barbara. What others have said here about funding the rent stabilization ordinance, I understand there are funds available to do that that will not push our budget further in the red. I want to talk about the Santa Barbara Police Department and want to suggest a compromise. The budget that was presented to you last Tuesday was slightly in the black. You chose to unfreeze certain positions with the police department. pushing that budget in the red, eating into reserves. What I'd like to propose is a compromise that you unfreeze only a portion of those positions, keeping the budget at least balanced. Continually eating into reserves is not only fiscally a bad idea, it's a bad idea for public safety. Because we are eventually gonna get to a position where to fix this position, we'll need an austerity budget and people are gonna need to be laid off. So we can move slowly towards the restoration of those positions. Thank you. Brian Whitworth.

Hi, Brian Whitworth with Telescope Peak Pension Consulting. I wanted to give a cautionary example. Yesterday I met with the finance director at the city of Fullerton, and Fullerton is going down a path that I hope Santa Barbara does not. They're doing a continuing budget resolution and taking until July 21st to try to fix their budget. And it's my personal perception that staff there probably has less urgency than staff here to try to fix their problems. But many other things are similar. They have problems with reserves. They started with a large shortfall, and they haven't eliminated it yet. So thank you. Thank you. Zach Smith.

Hello, I'm here today with some disappointment in how this budget cycle has gone. Something seems to be missing, accountability. We're all accountable to the public. Every day me and my colleagues in the general unit show up to serve with that in mind. Unfortunately, accountability in the budget only seems to roll downhill. While a new police station is built and full staffing is restored, our positions in the general unit are frozen for years and quietly removed. Um, work then shifts to an under classified general staff who have waited over four years for a classification study with timelines from multiple city administrators and multiple HR directors that have lapsed. As you finish up the budget, I hope you take accountability to your promise that we one day become a market leader in compensation and treat all of our staff with the same respect and fairness that I saw last week. Thanks.

Thank you. Uh, Susan Nicole Thompson.

Good morning council.

Thanks for listening to us today. Um, I'm Susan Nicole Thompson. I'm a Santa Barbara resident and someone who's been both a landlord and tenant and have a business in Santa Barbara. I wanted to make sure that these funds for the rent stabilization ordinance are important to us. I wanted to make sure that city council votes on them to make sure they're included in the budget. I'm worried that they are not, um, 2 million, it seems was estimated for it. So I'd like you to approve that amount. And, uh, these clarifications and the law and agreements between landlords and tenants are important. and needs to be funded as such as an important aspect to see lies proper enforcement typically ensures people aren't being retaliated against nor discriminated against. Um, the other aspect of this, I heard that, um, as people are saying, police enforcement, um, obviously is needed and it's been great in the city. It sounds like we're under a safe, safe city. And at any point we can add three more positions to the police force, but the time probably is not right now. Thank you.

Thank you. Mr. Cleric, are there speakers online?

Yes, Mr. Mayor, there are two speakers online. First speaker will be Ana Garcia, followed by Linda Honigman. Ana Garcia, go ahead and unmute yourself and speak, please.

Hello, I'm here today to speak on the fiscal year 2027 budget deliberations. Your decisions today will let we, the working class families, know what your commitment is to us. and whether, again, we will be left to fend for ourselves and our priorities because the ruling class wants to give our tax dollars to fund three unnecessary police officers to protect their property and coincidentally also failing to fund the rent stabilization order. So you can use this later to justify your fight against housing protections because it failed. We need a budget that reflects our values, true community safety, housing and other basic needs, security and financial accountability. prioritize tenant protections, the people who make this community run desperately demand that the budget clearly state and allocate startup funding costs for the rent stabilization ordinance. Do we want to prevent homelessness and keep Santa Barbara residents housed? If so, the rent stabilization ordinance must be formally funded. Finally, we need a balanced budget responsibly.

Thank you.

Don't fund the police.

Next speaker, please.

Next speaker will be Linda Honigman. Linda Honigman, go ahead and unmute yourself and speak, please.

Thank you. I join previous speakers who are concerned that there is no funding in the budget for rent stabilization startup costs. And there is a continued priority for public safety spending over support for important items that could make a significant difference to our housing crisis in the long term. Thank you.

Thank you. Further speakers?

No, Mr. Mayor.

All right, very good. And with that, we'll go to the Council of Liberations. Madam Administrator, do you have something to lead off with?

Thank you, Mayor and Council. Just maybe to help with some process structure, I think what we had intended, we have the PowerPoint from last week, and basically just to pick up where we left off, I think. And I think that was at the discussion of the rate increases for the solid waste fund and then go through the items in that are remaining in the agenda report from last week and then If there's other things that the council would like to discuss related to the budget We can also do that or if there's anything that we need to revisit from last week's meeting So that's what I would suggest from a process perspective. So we do have staff here regarding the solid waste funds if Next slide Yeah We'll go back to that yeah, so if there's any questions on on this site particular item All right questions from council for staff miss Ned.

Thank you mayor else I just have one question on this slide when it says utilize reserves is that reserves from? The solid waste enterprise fund or from the general fund honorable mayor council members done and that would be from the solid waste enterprise and I If we used those reserves from the solid waste fund, would that still stay at policy targets for the solid waste fund?

The solid waste fund would then need to recover those reserves from the general rate payers.

Okay.

Thank you. Are there questions from council? Ms. Harmon.

Thank you. I'll just make very brief comments on this. I mentioned Last week at Sustainability Committee, I voted to utilize reserves to smooth out the rate increase. But in thinking about this issue in particular, that the smoothing out would cost everyone in the city to subsidize 12% of folks, I've changed my perspective. And I think the situation is unfortunate generally. But as we are talking so much about good financial planning and practices and just, frankly, reasonability, it seems to me that it certainly is not just, it's just not good planning to utilize $600,000 of reserves that we would then have to replenish just for 12%. So though I am one of those 12%, so I feel the pain, certainly, I will support this recommendation. I'm happy to make the motion when the time comes.

Okay, very good.

Mr. Freeman. Thank you, Mr. Mayor. On this one, at the Sustainability Committee, I didn't support at the time for the very reasons that Member Harmon just articulated in that to backfill it, it would have charged all the rate payers for a service that they didn't use. So at the time, I felt it was more appropriate for those who had used the service to make up the difference. So that's why I won't. I'll be supporting the recommendation now just to not use reserves and go forward with that. And it is unfortunate. It wasn't any particular cause on it. It's just happened the way the contract was originally structured. It was something there was no malintent by anybody on it. And we are, our staff, I appreciate you working to recognize it and fix it. And I support the recommendation here not to use the reserves.

Ms. Sneddon.

Thank you, Mayor Ross. We had two robust discussions on this, the sustainability. I'm going to abstain from this vote because I don't believe we should be charged these rates either immediately or smoothed out. I think these were business decisions on the part of the hauler that were anticipated to keep the rates lower. And this is substantial increase per can. And I don't think rate payers, the city should be bearing the cost of that one way or the other. So I'm going to abstain from that.

All right, very good. Ms. Santa Maria.

Thank you, Mayor Rouse. I'll be supporting the staff recommendation and really want to thank Council Member Harmon. You've really thought about it from both sides, and I think we are definitely in the moment where wherever we can avoid using reserves from any fund, especially general fund. This isn't general fund, but still, in my opinion, we need to apply that same fiscal discipline all across the board. So if we are trying not to dip into reserves any longer, that's what we should commit to doing, again, across the board. So I'll be supporting this staff recommendation to not use reserves.

Very good. If there's no further comments or questions, Ms. Harmon, you offer to make a motion. Sure.

I'll move staff recommendation. Thank you. I'll second.

Second by Santa Maria. If there are no further comments, Mr. Clerk will take the vote.

I have a motion from Council Member Harmon, seconded by Council Member Santa Maria, to direct staff to not utilize reserves to smooth rate increases over three years, resulting in $602,270 of savings in the Solid Waste Enterprise Fund. Go ahead and vote, please.

Vote passes 6-1 with Council Member Sneddon abstaining. Thank you. Move on to the next item, please.

Thank you, Mayor Ross. This is on the homeless services funding. And I do believe we had an update on information regarding this. I wanted to bring up our housing and homeless services manager, Ms. Payne, to just talk a little bit about the updated information.

Hello. Carrie Payne, housing and homeless services manager. We would like to provide a little further detail on our plan to fund the Faro Center. While PLHA was mentioned and will be utilized for this, we don't have the full allocation for next year from the state yet. And so we have an option to leverage those funds, and we certainly will, and we're confident that we will have $100,000 from PLHA. to contribute to the permit, to contribute to FARO, but we also want to show that we have the total $350,000 that we could potentially need at the maximum to fund the lease and services for the whole fiscal year through a variety of different buckets here. So we have the PLHA, Worst case is the $100,000. We will leverage that to the best of our ability as we get that allocation. We also were able to negotiate with our plan for Measure I funds for homeless services. And so just in full transparency and showing you exactly what's happening, our CityNet contract will now leverage CalAIM funding to cover the case management services that we had previously been paying for, and so that's a savings of $83,544. That was also already allocated to services at the Faro Center. So rather than funding the case management contract, it can help fund the Faro Center services. We also have $20,000 from the homeless service coordination contract that we had over budgeted for. So we need $80,000 to cover the total in that contract. and that leaves 20,000 from the $100,000 allocation that we had initially budgeted for. We also anticipate savings for Measure C. Casa Cacique was an estimated budget in the beginning of the year, and due to a number of factors, primarily being that staffing, hiring practices, it takes time to staff up, and so there was some salary savings that we can roll over into helping fund either the Faro Center or leverage into other additional homeless services. And so this is a really complete plan for how we can comfortably cover any and all options that may come out in the negotiations that are currently happening with the Faro Center.

If I can ask, what would that mean to the status of the lease on the Faro Center with the landlord? Who would be the tenant?

So it is still our preference that when our city lease ends at the end of February that SB Act would create a new lease term directly with the landlord. That is in current negotiations. SB Act is talking to the landlord, we are talking to the landlord. We need to come up with an agreement that's comfortable for all parties and the landlord has some you know, concerns that they're working through about funding being one of them and having, you know, the agreement here showing the funding that the lease is covered regardless of who is the leaseholder is going to help in that conversation.

So part of the issue that caused this desktop last time was about operations. Now, is the status of the center planned to be, once again, by referral, or is it planned to be a drop-in?

And do you know? Those are still all points that are under negotiations.

How do we decide on funding if we do that?

We are basically just setting aside dollars right now, and we will come back. We're planning to come back at the end of July with the actual agreements and the proposal. So we are still in negotiations on all of these points right now. And so it's hard to give you an exact answer because they're all interrelated.

Is it the position of the city that we will not be continuing to be the leaseholder after February?

That is our desire, but again, we're still negotiating that with the parties. Okay, thank you. And basically, this is just a set aside of funding to ensure that we have, and basically, we're just saying we do have the money available. I don't think we need necessarily, I mean, we could have the council authorize the funding through the full fiscal year. But also we could wait until July to take that action as well. Very good. Mr. Jordan.

Thank you, Mr. Mayor. That's the disconnect on this with me too. So maybe if when the budget comes back next year, you'd play with that language. It's a more set-aside kind of language rather than an obligation language. to fund because obviously if the lease discussions do not end up with the landlord offering a lease to one of the parties, whoever that may be, we would not have this obligation anymore, right?

Correct.

Yes, I think that in my preference that needs to be clear. in here that it's just we're not committing to funding it because it could just go away, right? At that location.

It depends on how the negotiations proceed, correct? Okay, thanks.

Okay. Further questions for staff? Ms. Santamaria.

Thank you, Mayor Rouse. Ms. McAdoo, roughly when would we know or when do we anticipate knowing the status of that?

We're anticipating coming back to council on July 28th for both the lease agreement and service agreement with SB Act right now.

Okay. And so is there any involvement or responsibility the city would have once we are no longer involved in the lease? Are we still...

Yes, because we would have a service agreement with SB Act. And again, operational requirements can be incorporated into the service agreement, which would address the mayor's concerns about what is happening, you know, how SB Act is providing services, what those are, what that looks like, what that model looks like.

Okay. If they don't get the lease with that landlord, is that an automatic, just they're out and we're shutting down the Faro Center in that location?

No, we would come back to council and say, does the council want to continue for the city to be the lessee and have...

I see. Okay.

So we will still have that option. Absolutely.

But that option, or we don't need to decide that now, we can do that July 28th?

Correct. So we'll have a better, clearer picture of what we are recommending at that point and how we've proceeded with negotiations.

Okay. And the funding you're asking for today then is just to hold us over until then?

We already have money through February of 2027, and so this would be if we just wanted to set aside money in the budget for the full fiscal year just in case.

I see.

Okay.

Thank you so much.

Madam Administrator, would it be premature to condition the approval of the whole of our funds for if we wanted to extend it? In other words, saying we will agree to fund if. And once again, the operational conditions we put on the Faro Center to get us to where we are today.

I mean, the council could do that. I don't think it's necessary because I want to be careful about what we're conditioning it on and let us come back. And if the council does not like the operational conditions that come back at the end of July, then the council could choose to not move forward at that point. And then we would just return these funds to the fund balance in the various funds that were mentioned.

Thank you. Further questions or comments? Okay, I'll entertain a motion on the item.

I'll move staff recommendation.

Moved by Harmon, seconded by Jordan. May we have the vote, please?

I have a motion from Council Member Harmon, seconded by Council Member Jordan, to move the staff recommendation. Go ahead and vote, please.

Vote passed unanimously. Thank you. Next item, please.

Mayor Rouse, members of the city council, there were multiple comments that were made throughout the budget hearing process in regards to reserves. And so there were three items that were discussed from multiple council members. First item here listed is to direct staff to schedule a future finance committee meeting to consider revisions to the general fund reserve policy to be more in line with the actual reserve levels and or clarify the reserve use and terminology. There was another direction that was given to schedule a finance committee meeting to clarify and further define the prioritization of reserve use during an emergency or disaster. So the idea here is that maybe the reserve policy could go into some level of detail about which city functions or services are prioritized first over other functions if we're in this situation where we're have depleted contingency reserves and we're using disaster reserves and there's a natural disaster or some sort of an event. And then there was another comment that was provided. I believe this was from council member Harmon in regards to directing staff to retain a million dollar, the million dollar transfer to the local housing trust fund. And the idea here is that during fiscal year end, if there was a surplus in either transient occupancy tax or sales tax revenues, that that surplus could be split among the general fund reserves, the pension section, the pension section one 15 trust, and also the local housing trust fund. So your reserve policy currently States that if there is a year end surplus in the general fund, that a portion of that surplus needs to stay in general fund reserves. And then a portion goes into the pension section 115 trust. So this item here would amend, would give direction to come back to finance committee to amend that specific section to include a portion of the surplus going to the local housing trust fund. I would like to just state though that staff would not recommend calling out specific revenue sources because we really need to look at the overall result of the general fund at the year end. We may have a surplus or we may have, TOT revenue that would come in in excess of the budget, but sales tax might come lower or property tax might come lower. And so it's really the best interest of the general fund to look at the totality of the surplus. That would be staff's recommendation if council wanted to move forward with this item.

Okay, very good. Back to council for comments and questions. Mr. Friedman.

Thank you. Mr. DeMartini, I appreciate you calling out To look at the totality, that's something I noticed right away because you might have an increase in one of the taxes, but you might have an increase in expenditures as well that would offset that. So could item three possibly be part of the item one discussion since it is revisions to the general fund reserve policy? So we would just incorporate that as part of the direction in there if we approved item one?

Councilmember Freeman absolutely if there could be one motion on on these items were basically the direction would be to ask staff to schedule a Finance Committee meeting to Consider revisions to the policy about being more in line with the actual reserve levels also consider language about the prioritization of services and also consider an amendment to that one section of about how surpluses could be proportioned going forward. That could be one piece of direction to schedule a finance committee so the finance committee could review all of those items.

In general, I am supportive of the policy that we have for the 15% emergency disaster and the 10% contingency, but I know there does need to be some clarification. And it's always good to re-look at things from time to time to make sure that we are meeting the needs. So I would be supportive of moving all these to the finance committee to discuss all these including just clarifying the reserve use and terminology, looking if there want to be changes, but also how if there was a surplus, including the local housing trust fund, pension 115, so they don't have to compete with each other, but we would be responsibly allocating any surplus to both those plus the reserve. So I would be supportive of moving all these for a larger discussion. Ms. Harmon.

Thank you, Mr. Mayor. I also am supportive of moving all of these to discussion, and obviously it You know, I have long believed a revision to our reserve policy is in order, and I understand I am still alone in that, but I'm grateful that we will yet again be having that conversation, and I'll get another bite at the apple to try to bring somebody along with me. At the very least, though, clarification around terminology and usage, that certainly needs to happen, so I really support that. On point three, interestingly, maybe just for the sake of clarification, my original point around this was not to permanently shift our reserve policy, but rather to make that shift to make up the delta between the $1 million that we would be allocating and the $2 million that we had promised. I think that's quite a meaningful difference. I actually really like what I see here, which seems to be a permanent. change to the surplus policy and I'm glad that we're going to be having that conversation and so I recognize there are lots of reasons to not tie our hands around surplus many of which having to do with things that come up over the course of the year that are imperatives for our community and the need for flexibility but I do think it's a conversation certainly worth having I would just say for my part I think it's probably important to separate it from this $1 million transfer conversation because I guess we'll wait to hear more about the Measure C outcome, but I think the $2 million this year is already sorted. Ms. McAdoo, maybe.

Yeah, and we were going to talk about the Measure C later, but we can do it now in the context of this discussion just in terms of because it's related to Local Housing Trust Fund. We're happy to just do that update right now if the council would would want to do that. So currently for fiscal year 2027, we had put in $2 million for Casa Cacique to cover operating costs based on what we believe the reimbursements will look like and what the city's annual cost to operate the shelter will be. We only need a million dollars for Casa Cacique for fiscal year 2027. So that was an easy reduction that could be made in measure C We had it in there as a contingency, just in case those reimbursements didn't come in, we feel more confident. The city's total cost for the contract for services at Casa Cacique will be about 1.25 million. We've got 250,000 in Measure I, and then a million would be remaining in Measure C, and so we could pull that out of the Casa Cacique proposal for fiscal year 2027.

Awesome. That's great. Thank you very much. So I really appreciate that update. So I'll just reiterate, Mr. Mayor, and close by saying that I too support all three of these items coming back to finance committee with the distinction that item three is now not related to this year's local housing trust fund allocation, but a broader conversation around an ongoing transfer from surplus into Local housing trust fund is one of the buckets that those surpluses automatically get transferred into.

Thank you miss Ned Thank You mayor Ross so on the recommendation one I'm not personally in favor of changing the policy but I'm always in favor of the discussion being had so happy for that to go to finance and maybe looking at a range over the years of the target but I'm so deeply concerned that we're so far from meeting our current reserve policy that lowering that number if we were then operating under that we would be maybe with one month of operating expenses and I'm very concerned about that. The second part of number one where it says clarify reserve use and terminology, I just really want to make the point that my issue has always been just in the terminology and how the tables are presented TO COUNCIL AND HOW THOSE COMPARE TO THE ACFER, THE ONLINE BUDGET BOOK, THE PRINTED BUDGET BOOK. AND I THINK MY REQUEST FOR THIS, JUST IN TERMS OF THE PRESENTATION AND HAVING THOSE, I JUST DON'T WANT TO BE HERE AGAIN WITH THIS SAME, HALF OF THIS COUNCIL AT LEAST IS NOT GOING TO BE HERE THIS TIME NEXT YEAR. AND MY HOPE IS THAT THE INCOMING COUNCIL WILL HAVE THIS this consistency across there. And so I would request for that, that we have an ad hoc committee look at this. I think it's clear that the way it's presented at finance may not be, the way that has that through line when it comes to the budget presentations for the public and so it would just be my request that we have maybe a combination of people who aren't just the finance committee but include other members of council to just clarify the terminology and the specific terminology of operating budget operating deficit, net deficit, and having that consistent with the online budget tool, the ACFER, and the presentations. So just a request on that, if colleagues would be supportive of that. And then for number two, I think an additional part of that, I think it is really important to prioritize if we're getting down to one month operating budget, which lights do we keep on and which ones go off and in what order. And not that I ever want to get there, but I think an important part of that too is in each enterprise fund, looking at what their reserve is and how that reserve would be used in disaster for that particular fund. So looking at all the reserves together and how they would be used to address disaster i mean if we really are getting to where we're below our policy reserves i think that's an important part of the conversation and then on um number three um i think because we're in such a situation with our reserves um i i think it should all automatically go to any surplus, should all automatically go to replenishing the reserves and then come to council for any deviation from that. I'm very hesitant to have extra reserves going to extra payments of the pension trust, even though it's performing well and even though it's really important to address that. We do have our sort of mandated levels that we're contributing to that. I would be in favor of automatically all going to the reserves and then council deciding where we are on that and where the additional parts go, if there are additional. And I think what's really important with number three is that we still need a dedicated local funding for the local housing trust fund. I don't want to keep being in this situation where It's what's left over of a surplus or where does it come from? We still need to, and this is to be in compliance with our housing element update, to have a identified recurring local housing trust fund funding source. So I think for number three, I think it should all go into reserves and then come to council for decision for changes from that.

Ms. Santa Maria.

Thank you, Mayor Rouse. I'm really happy to hear from my colleagues on the Finance Committee because I'm very much in favor of all three of these points with the caveat that Ms. Harmon raised about, you know, the local housing trust fund. Staff has already identified where from Measure C this could be transferred from the million dollars. I WOULD BE IN SUPPORT OF ALL THREE JUST MINUS THAT FIRST LINE. AND I REALLY DO, I SHARE IN THE EXCITEMENT OF IT BEING A POTENTIALLY PERMANENT CHANGE. I THINK THE DISCUSSION AT LEAST NEEDS TO BE HAD. BUT ALSO SHARING COUNCIL MEMBER SNEDDON'S CONCERNS ABOUT OUR RESERVES AND THAT SHOULD BE THE PRIORITY. even if we identify surpluses and even if we as a council and as finance we recommend that we split it up between our pension trust and the local housing trust fund and our general fund reserves, this is not what we would consider a permanent funding source for the local housing trust fund and so if this if we are able to find a surplus great but we know that's not going to happen every year and so we will still have to continue looking for a dedicated funding source so I would be happy to move all three staff recommendations minus the first sentence in staff recommendation three

All right, very good. There's a motion on the floor. Anybody wants to make a second, or we can just continue?

I'll second it.

Okay, second. Okay, so you're Mike's light, and we're coming to you, Mike. And then, yeah, you have something else to motion?

Thank you. Move them all to a discussion of finance. I agree with that. Since we're wordsmithing, I can't imagine that you had nodding heads up here with the sentence that says, revision to the general fund reserve policy to be more in line with actual reserve levels. That's unacceptable to me. The actual reserve levels we have now in deficit should not be a baseline for future consideration of a policy. There might be another number, but it shouldn't be what our actual reserve levels are. And then I'd add to that section some type of language that's a little more comprehensive than having a plan for reimbursement. What's the plan look like? Let's just solve those details so we don't have that problem in the future where we had a plan, nobody did anything about the plan, I don't know what the plan was, but what are the requirements? If the discussion comes back and agrees that we still are to have a plan to reimburse, what does that plan, what are the the components of that plan to reimburse. Does it happen in that fiscal year? Is it money that comes in? Is it as crazy as, well, we'll just go look and see if we can find it? That was, you know, that's not really a plan. So I just, if we could add that to number one, that would be great.

Mr. Nandana, a comment to the motion?

Yeah, thank you. I'm in complete support of Council Member Jordan's comments on that, having that really delineated. Is there any support for an ad hoc of council? I'm just wondering that, because the way it's worded here, it's all directly just a finance committee, so I was curious. Ms. Harmon, you had to that?

So on that note, yeah, respectfully, I don't support an ad hoc on this. Finance is itself important. an ad hoc committee, and I think the solution actually is to have better rotation amongst the committees. I don't think the solution is to add yet another committee, but I know I'LL JUST TAKE MY OWN EXPERIENCE. I'VE BEEN ON COUNCIL FOR ALMOST EIGHT YEARS. I'VE BEEN ON FINANCE COMMITTEE THE ENTIRE TIME. AND I LOVE IT, BUT IT ALSO IS PROBABLY A REASON WHY I'M NOT CONFUSED BY ANY OF THE TERMS THAT YOU SAID, BECAUSE I'VE BEEN SEEING IT FOR EIGHT YEARS, EVERY OTHER WEEK APPROXIMATELY. AND SO I THINK MAYBE THE ONGOING SOLUTION FOR THE FUTURE COUNCIL, IT DOESN'T REALLY HELP US RIGHT IN THIS MOMENT, IS TO MAYBE REQUIRE EVERY TWO YEARS SWITCHING COMMITTEES. AND I THINK THAT COULD GO A VERY LONG WAY WITHOUT ADDING WORKLOAD TO OUR STAFF. SO THAT WOULD JUST BE MY FEEDBACK. I MAY BE OUTVOTED, BUT THAT'S KIND OF WHAT I'M THINKING.

THANK YOU, MAYOR ROSS. AND I APPRECIATE THAT. SO I JUST WANT TO CLARIFY. IT'S NOT CONFUSION ABOUT THE TERMINOLOGY AS MUCH AS IN DIFFERENT TABLES, DIFFERENT ACTUAL TERMS ARE USED, WHICH mean the same thing at different times. I'll continue to work individually then and I guess I agree that there should be more rotation. I've said it for years that on ordinance committee we rotate who the chair is every year just as a matter of course and I agree wholeheartedly that there should be rotation not just between the committees but within the committee. It's really important because of how we are communicating with the public that it may be in one way in one way. But I guess I'll continue to then do it through public comment and working individually. And that's fine. That works too. Yeah.

All right, very good. I won't be supporting the motion for the following reasons. First of all, we've had a reserve policy in place for a long, long time, and after the Great Recession, we had to work with, particularly our bargaining units did the heavy lifts with furloughs and freezes and all the things that we had to do back down on council to bring back up our contingency reserves. We hadn't broken any emergency reserves at the time, but contingencies. We have had a number of disasters that have been dependent on our reserves being there for immediate relief. And those are the fires and the slides and debris flows when the 101 gets shut down. So it's important to maintain reserves. I think that's self-evident. Trying to match whatever our reserve levels are just doesn't make any sense to me whatsoever to change the policy that way. In terms of local housing trust fund was a Great mechanism formed by council members Harmon and Friedman brought forward on finance committee, which is a great thing to do to deal with. We came up with a surplus because in the past, the surplus became a bit of a free for all for council to try to choose and pick what they were going to spend things on. So we have a mechanism. We have the 115 trusts and local housing trust fund. In the meantime, we've also created the flex fund. Do we always have the monies to put into that? No. And we proved that last year by putting $2 million firm reserves into it. This year, I say that the first thing we need to do, and I think Ms. Ned mentioned, not necessarily from this, but replenish the reserves. And I think that's really important. So the Local Housing Trust Fund is a great idea. It's there to attract not only philanthropy, but the kind of largesse it's about to get from the projects on the docket right now. So I cannot support item three for this point in time. I think we need to take whatever we can. and put it back in the reserve and start building back where we have the fiscal stability. Because without a stable general fund, all the rest of our ancillary programs will start going away. The way we can really support local housing, the way we can support philanthropic things and homeless issues is by having a stable and healthy general fund. But it's gotta start with some sacrifices. It's gotta start now, not some other time in the future. So I will not be supporting the motion. Any further discussion on the motion?

Mayor Rouse, if I may, before the vote occurs, I'd like to respond to Council Member Jordan's comments just about the plan for replenishment. I know this has come up a number of times. And Section 4 of the reserve policy does talk about what the plan is. It talks about that the city council needs to review an assessment of the fiscal condition and the outlook. needs to discuss a balancing strategy and then also confirm a plan for replenishment. And so staff's opinion and recommendation on this is that we need to follow that section of the reserve policy. And in your packet today, staff has prepared a draft resolution in regarding being out of compliance with that existing reserve policy. And so staff would be happy to help update that draft resolution today with you If there are specific items in regarding increasing revenue or reducing expenditures, another thing that council can do is direct staff to come back at a future city council meeting when and if council decides to appropriate reserves for something on a specific council date, direct staff to come back with a list of revenue generating and or expenditure reduction options for a vote of council at that meeting. So my position, our position, is that we just need to follow that section of the existing policy. But again, happy to have that conversation in the Finance Committee.

Thank you for that, Mr. Demartini. Mr. Friedman.

Thank you for that, Mr. Demartini, as well. Just to clarify on Item 1, Warden and Council Member Jordan raised a good point. It's not to be more in line with actual reserve levels. So that's not what we're asking for. It's to have the discussion on the reserves in general. to bring it to finance, but I want to make sure that the motion is reflective of that, that it's not with the actual reserve levels today of what they are.

Yeah, I would support that amendment to the motion.

Okay. So, Ms. Harmon, to the motion.

I, too, will support that amendment. But to be clear, I will still take the opportunity to speak on not why I want to bring it in line with actual reserve policies, but why I think it's more intellectually honest to have a policy that reflects how we actually budget rather than something aspirational that we don't live up to. But I think even with that said, with my own caveat having been made here, that I'll continue to do that. I support the motion. Thank you.

All righty, then.

The motion is on the floor. May we have the vote? And is there further comments to the motion? May we have the vote, please, Mr. Clerk?

Okay. There's a couple things I want to clarify before we vote for what we do and don't want in the motion. So inclusion of forming the ad hoc committee is out? Correct? Okay. Councilmembers then made a suggestion to have a discussion around enterprise funds as well during the Finance Committee meeting for prioritization of reserve use. Is that in or out?

I would support it.

Support. That wasn't a motion, yeah. Okay. So with those two amendments, we have a motion from Councilmember San Maria and seconded by Councilmember Jordan to approve the recommendation as made by staff. And go ahead and vote, please.

I'm sorry, one more clarification. The first sentence of number three should not be in there either. Just wanted to make sure we caught that.

Okay. So removing the first sentence, directing staff to retain the $1 million transfer to the local housing trust fund as well. And go ahead and vote, please.

Thank you. Motion passes 6-2. 6-2, 5-2, with Rouse and Sneddon opposing. Very good. Thank you.

May we have the next item, please? Yes, Mayor Rouse. The next item is in regards to two items that were discussed by council members in regards to holiday parades. The first item here is... to direct staff to collaborate with the downtown Santa Barbara Improvement Association to reinstate the downtown holiday parade and identify $50,000 to contribute to the event, potentially from private sources outside of the city. And then another item in regards to the Milpus Holiday Parade and identify funding to contribute to that event as well and collaborate with organizers to reduce staff and other costs associated with the event.

Very good.

We'll start with Ms. Sneddon.

THANK YOU. AS A SUGGESTION OF THE FUNDING, WE HAD IN OUR APRIL 9th MEETING IN ATTACHMENT 6, THERE WAS GENERAL FUND REQUESTS OVER $100,000. AND FOR OLD SPANISH DAY SUPPORT, ONE OF THOSE ITEMS IS $55,000 THAT GOES TO THE SHERIFF'S OFFICE FOR MUTUAL AID CONTRACT. AND MY UNDERSTANDING IS THAT WE'RE SPENDING A LOT IN funding with our local police and overtime and other support costs, so my suggestion would be to just take that $55,000, and there'd still be over $200,000 going to Old Spanish Days, but if we took the $55,000 from Sheriff's Office mutual aid support, then that $55,000 could go directly to supporting Holiday Parade. Ms. McAdoo?

I don't think the chief is here. I want to be careful because I think we may need that money for the sheriff's office support of old Spanish days, but so we can look at that as an option. Um, uh, Maryland, uh, assistant chief is here, so maybe she can respond to that particular item. Thank you.

Chief Royal.

Uh, council members, Nedden and council, uh, every year we actually have to staff Fiesta. with our brothers and sisters from the Sheriff's Department. It's a 24-hour affair, as you know, from Wednesday to Sunday. We would not be able to provide the public safety that we deem adequate and necessary if we weren't able to use the Sheriff's Department, particularly for traffic control. Their motor officers come out. We only have a certain number of motor officers And those that are patrol officers that we put on motorcycles. So bicycle officers and things that can get around in a crowd, we need those services.

Okay. Thank you. Why I might suggest still that, um, old Spanish days has the highest amount of support at 289,000 to 66. And, um, that, that seemed like an easy way since it was the sheriff's office, but, uh, If that isn't the way, then I think maybe from that particular fund, since we're talking about festivals and parades, that that might be an appropriate movement of $50,000.

We can look at that and just sort of see what we do have a contractual obligation with Old Spanish Days that the council has funded in prior years. So we can look through that as an option, see if there's funds that we can take from that as well as other places. Okay.

Thank you.

Okay. Ms. Santa Maria.

Thank you, Mayor Rouse. For, so, okay, so just a quick comment on, number one, I'm in support, I think, for all of our festivals and parades, especially in the wintertime, that we can support. They are a great economic revenue generating source. And so it's important to me that we support both of these parades. I would say that there needs to be a slight amendment in number two. I would say not necessarily identify funding, but identify additional funding. There's $15,000 in the budget already for the Milpas Holiday Parade, but we know that's not enough. We know that The majority of our contributions comes in the form of our police officers who provide the public service needs, traffic control and all that sort of thing. But I have heard multiple times from the event organizers for the parade that sometimes it's more officers than are needed and these officers could better be utilized in different areas of the city even that same night or just save those resources and afford the department some savings. So I want to suggest that, I mean, as we are discussing with the organizers to really work with them and identify what are the real needs. And of course, our police department has the expertise when it comes to traffic control and all that stuff, so our police department will guide the organizers. But I think it's important, as a city, we're working together with those organizers and be realistic about what's really needed. Because if we can ease the burden and the demand on our police department, we should. by saving from that end, we should still continue to identify support in other ways. Because I think, from what I've heard from the organizers in the past for the Milpas Holiday Parade, they could use more actual funding to get this thing up and running and ensure that it goes through smoothly. We know that the lights along Milpas, it's not a one night affair. The parade is a one night affair. But those lights, it's one of the longest stretches of the city where you can drive all the way down and there's lights all up and down Milpas. And so it brings a lot of business and revenue to, that milpus corridor, which is so sorely needed. So I think that there's a way that we could balance that out, right? Perhaps we reduce the demand on the police department, but we increase the actual monetary contribution that we provide for the parade. So I want to just clarify that I recognize that there is $15,000 in there for the parade. But as we have seen in recent years, you know, the organizers are, you know, it's businesses coming together and the businesses are going through some difficult times as the city and everybody else is. So whatever we can do to ensure that it stays running and that we don't have what happened last year where it had to be canceled, you know, ideally if we can help make it work and treat it, you know, with that same regard that we treat, you know, old Spanish days and others. I think that's, it's the economically sound thing to do if we want to continue to bring revenues to our city beyond just the summer events. So I would just, you know, I would support both of these, just with the amendment of, it should probably say identify additional funding, not identify funding, because there already is a little bit of funding there.

Mr. Friedman.

So I'll be supporting both of these coming forward. I appreciate, Ms. Elander is in the room now, raising the issue of the downtown holiday parade to me, and we had a robust discussion on it, and it is important to have the holiday parade back this year for what it will do for downtown, just bringing the energy back downtown. The last one was 2019, so it's time we have it, and I'm comfortable with the recommendation going forward to have staff work with the DSBIA to identify sources, whether they're within the city or additional sources from outside the city to make the parade happen. In terms of number two, happy to add the word additional. The second sentence is key. It says direct staff to collaborate with organizers to reduce staff and other costs associated with the event. I think having staff work on that, that is where those discussions that you're asking for Santa Maria would take place, but the council is not in a position, in my opinion, to make that decision today, but we would have that with the staff to see because we want to make sure that there is an opportunity to reduce costs, but we also want to make sure that all events are safe and there has been plans in place put in there. So I'll be supporting both of those and happy to put in the additional word of additional in item two. And I'll be glad to make the motion when it comes up. Ms. Nedden.

Thank you, Mayor Ross. I just want to ask a clarifying question. So For Old Spanish Days, or Fiesta, I like to call it Fiesta, it's $289,266 from general fund. And then from the mayor and council budget, it's an additional $98,895. And so for the whole event altogether, that's $388,000. And I'm just looking at any of our other festivals or parades are less than a third of that.

Ms. McAdoo?

If the council would like to revisit the funding for Old Spanish Days, I don't think that it would be appropriate today since they are not here to respond to those questions. We could bring that back for a future discussion. But at this point, you know, that funding is for this August event. We could then revisit, you know, that. And I think, you know, historically because of the length of Fiesta and the week and the sort of

Economic impact of that entire week I think that has why his at least that has what has been explained to me as why the Funding for that has been higher than other events and festivals just because the events go throughout the week Okay, so I would be supportive of these two items With the requests that we just sort of it look at ways within that Contract and then I'd like to add to this that and maybe it's not a funding decision, but maybe it is, I can't really see any reason why we don't have the solstice parade on State Street. And I would like to add that as a, I know this topic says holiday parades, but as a number three, really looking at if it would be any additional cost, and if we could find that cost to support next summer having solstice on State Street as part of the motion.

To this, Ms. Anne-Marie?

Yeah, to the motion, I'd be happy to have that conversation. I think it's sort of like number two where we would be directing staff to talk to

solstice and talk to probably dsbia and see if there is something that we could work out and yeah i would i would love to have that discussion so yeah i'd be supportive of that all right very good well this goes back to the discussion we talked about these events having an expense but there are also revenue generators like miss mackin who brought up the the fact that fiesta is a multi-day event does generate an incredible amount of revenue not only sales tax but tot if hotels are full it's a big time of year for us so These funds, once again, have already been negotiated, but I think they're very well spent. It's an investment and a return. Regarding, I will not accept the we have too many cops anywhere at any time during these events. That I just don't see being the truth. The fact of the matter is our cops and the help they bring in do an exemplary job of keeping the peace while we're in the heaviness. You've got a lot of folks, especially on Fiesta. There's a lot of alcohol involved. There's no such thing as too many cops, whether it's on Milpa Street, whether it's during Solstice, or whether it's during the Fiesta Parade. And that's where a lot of the expense has to go to, and that is well justified. I wouldn't want to compromise on that and on public safety for a moment. So I'll be supporting this. I do agree that we should be investing in these things. It's got to be out of these different budget POTS, AND IT'S NOT A TON OF MONEY, BUT THEY ARE COMMUNITY EVENTS. THEY ARE COMMUNITY TRADITIONS. I AGREE WITH BRINGING SOLSTICE BACK ON TO STATE STREET, BUT THERE'S A LOT OF THINGS I AGREE WITH BRINGING BACK ON TO STATE STREET. SO ANYWAY, I'LL BE SUPPORTING THAT. IF SOMEBODY WOULD LIKE TO MAKE A MOTION, AND THAT WOULD BE YOU, MR. STAFF.

MOVE 1, 2, AND SOLSTICE. DID WHAT? DID YOU MOVE IT ALREADY?

YEAH, I MOVED IT EARLIER. OH, YOU DID. OKAY.

SO WAS THERE A SECOND? THERE'S EDITIONS. DID YOU ADD THE EDITIONS?

Yeah, I'm adding the Solstice back on State Street. Mr. Clerk, are you following all this?

And the consideration of Fiesta funds?

Yeah, the one and the two, and looking at coming back at a later time after this year's, but to look at overall, yes. Okay, second.

Okay, very good then. Mr. Matt Sandry, do you have a comment to the motion?

Very briefly, yes. I think for the item that is added, and I'll be supporting just to take a look at next year's budget for Fiesta. I think the same language that we're putting for the Milpas Holiday Parade should be put in Fiesta is direct staff to collaborate with the organizers to reduce staff and other costs associated with the event. And wherever possible that we can achieve savings across the board, we should be trying to. And so we may not find savings, but it is absolutely worth having that discussion and just important to treat all of the events equally. So I just wanted to add that to the motion.

Mr. Clerk, we have the first and the second. And when you're ready to give us back the motion as you understand it.

Yes, I have a motion from Council Member Friedman and seconded by Council Member Stedden. to approve the staff recommendations with the addition of the word additional before funding in recommendation number two, directing staff to explore returning the Solstice Parade to State Street and examining Fiesta's operating budget for next year. Go ahead and vote, please.

Pass unanimously. Thank you very much.

Next item, please. Thank you, Chief. Okay. So the next item includes a number of items related to generating additional revenue, fees, and or taxes. Staff recommends that each of these be voted on separately because they're definitely separate and discrete items. So the first one before you is to direct staff to analyze an increase of in lieu fees as a dedicated funding source for the Local Housing Trust Fund.

All right. Very good. Mr. Gutierrez.

Thank you, Mr. Mayor. Um, so item three and four, I have had conversations with our city attorney who has notified me that these are two things that would not be possible without the state law changing. Um, Mr. Doymas, would you like to elaborate a little more on that?

Sure. I'd be happy to honorable mayor council members. Um, I'll go to three and four, and then I guess we can turn back to one and two, Mr. DeMartini. As far as psilocybin being decriminalized, we can't. It's a Schedule I drug, both under state and federal law. So there's no basis or way we can decriminalize it, so we can't. Taxes are making it a revenue source for our purposes today Then there should not be a vote on it some communities across the country in the state have made it a lowest level enforcement priority, but that's different from decriminalization as far as the legalization of a card room it is a good revenue source, you know doing research in the city of Ventura and For example, pre-COVID and looking at 2025 staff reports made 2 million in local taxes from it. They had to relocate to a different location where they've been made about 1.4. They're looking to move to a better location. That 1.4 million was purposely dedicated for in lieu fees. But Ventura was able to do it because they got in at a time where they were able to in a moratorium got in place. So you had to be grandfathered in to do it. That state law that established that moratorium expired in 2023, so there was about a year window opportunity. But state law can place one in. So the next potential time, this expires in 2043. So maybe Mr. DeMartini can mark that down in his calendar. So that would be so. So for either three and four, we aren't able to take motions on it because we aren't able to, as you said, get revenue from it.

So should we make a motion to just remove those two from...

It doesn't still require a motion, I think, Mr. Gutierrez. You brought them up, so I believe it's okay with you. We can just take them off the docket. That would work. I don't think we need a formal motion.

All right. Sounds good. Thank you. Thank you.

And thanks for staff for humoring me. Clarification. Ms. Sneddon.

Thank you, Mayor Rouse. Are we discussing this one at a time, or can I make the motion for one and two?

Council members done if I may I just because they're well, it's up to council But I'm taking them separately because they're totally separate and discrete items that might be helpful.

Okay, I'll move one and very specifically referring to the Nexus study between in lieu fees and The the need for affordable housing and so I'll move item one. Okay Mr. Friedman

I think I have a question for the city attorney. On the in lieu fee, since we already had a hearing on in lieu fees and it's coming back through a public process coming back to us, would that be the, and rather than directing staff to increase it, would it be possible, because we've already given some direction, and to have this come back as part of when it, there, so we have different options. One is what we already voted on, but have this as an alternative because when we say increase it, Is it on top of what we directed before or what it is now? It's a little confusing.

Sure. Honorable Mayor, Council Member Friedman, it would kind of today we're treating everything kind of like a straw poll on these votes, right? We're not appropriating anything. We're giving direction. As to that issue, we've already had that. I think May 5th, we brought that issue forward. And so we have previously set that via council. So if we want to revisit it, it should be later on a different date, a separate item. AGENDIES AS SUCH AND A DISCUSSION FROM COUNCIL ON GETTING DIRECTION WHETHER WE WANT TO CHANGE WHAT WAS PREVIOUSLY PROVIDED ON MAY 5TH FROM THAT. SO THAT WOULD BE THE PROCESS TO FOLLOW.

SO WE'RE NOT ABLE TO VOTE ON IT BECAUSE WE ALREADY VOTED ON IT OR WE COULD JUST TAKE THIS AND SAY BRING IT BACK AS ADDITIONAL INFORMATION?

WE CAN TAKE IT AS ADDITIONAL INFORMATION. AS PART OF WHEN WE BRING THE ITEM BECAUSE THE FEE STUDY AND THEN THE ORDINANCE TO MAKE THOSE CHANGES WILL BE COMING BACK THROUGH PLANNING COMMISSION AND ORDINANCE COMMITTEE. so we could have that as an alternate analysis and recommendation to bring forward.

I'd prefer that route rather than having a separate item come back to us at a later time to reopen what we already did.

And you can absolutely do that as well, too, because of all the steps, you're right, because it is going back to Planning Commission, et cetera, so correct.

Mr. Buss, could you have a comment or a clarification?

Through the Mayor, just wanted to note that our schedule has us returning to Ordinance Committee and City Council this fall with that ordinance.

Thank you for that. Okay. Yeah, okay. I'll come back to you. Ms. Harmon.

Thank you, Mr. Mayor. Yeah, I guess this will just come back naturally through the process. My position on where we've set the fees hasn't changed from the hearing we had on May 5th, though I guess... as the conversation evolves naturally as it would anyway. We'll have continued conversation but I haven't changed my position on that. But where I do think this is an important discussion is I definitely would like to see those fees dedicated to the local housing trust fund specifically. So sort of separately from the conversation about where the fees are being set which again I've already opined on that and not changing my position today on the funding source piece, I strongly support. So maybe the motion could be separated.

I would actually, you know, I think that we would recommend not like it's a separate motion about the in lieu fees and where they're appropriated. So I don't know that we need to do that today. I mean, we could have, yes, we could bring that back as part of the ordinance. I would be, I'd want to caution again, I don't want to include in ordinances like where council is appropriating funds because it really creates administrative burden if the council wants to make a different choice in the future. And so I think just continuing to, as part of the budget process, create those policy directions.

And so I think right now those those fees are being used partially for administrative costs for the local housing trust fund and then partially for projects Mr.. Gomez I would just miss McAdoo just finished my thought I would echo that and especially with it coming back as mr. Busk said that would be the most efficient process to go through that Okay With that we'll go to mr.. Jordan I just

Don't see the big picture on this item because I don't know what a dollar amount is for a dedicated funding source. And I think that should be part of the discussion too. So we're just not. Does it have to have six zeros after it. Does it have to have seven zeros after it. But I think if you're going to start to piece together a menu of sources. and you don't want to obligate them by ordinance, which I agree with, then I think it would be the best idea would be to have a dollar figure in mind as a permanent funding source annually and then use your pieces to get there that are flexible because one year you could take so much, one year you could take less there and somewhere for somewhere else. But I'm not confident that I've seen anything yet that we're actually chasing what that number would be like for the annual contribution.

I would also, yeah, so I mean, I think there's two separate distinctions. One is, what is the council's goal in terms of the total contribution to local housing trust fund? I think that could be set as a policy statement once we, and I think there's a lot of moving parts right now in terms of where that funding can come from. Second, I would be hesitant to use in lieu fees because they're so variable. They are based on what development activity is happening. And so every year it could be vast. Like one year we could get 10 million, the next year we could get zero. So it really doesn't work as a consistent ongoing source. You know, we could each year, the council could say we want to appropriate those fees into the local housing trust fund, but it would not be a consistent dollar amount because it is so dependent on what development comes in.

Totally agree with that. But we're even worse than that now. It's like we're just casting about dramatically in every conversation we have for what the source should be. So I think we need a target on the wall to aim at, and then we can go decide where those sources are on an annual basis.

I would recommend, and Finance Director DeMartini and I have been talking, we have been doing some projections around Measure C and what it will look like after the police building is completed and cash flow. We've also, in our prior conversations with Council, we took the Enhanced Infrastructure Financing District off of the plate. The Council said not to pursue that at this point, but to look at potential additional bond funding against Measure C revenues that could be used for housing. So I think a work session with council probably later in the fall. I would actually recommend maybe even after the new council is seated because there will be such a change in the council makeup, sorry for those that are sitting here right now. But just so we don't have to change direction again and do the conversation twice, I think it would be helpful to specifically that conversation What is the measure C projection? What are we looking at? What is the council's goal for the local housing trust fund and getting that policy direction? And so that would likely happen probably after the first of the year and it would sort of set the stage for fiscal year 28 budget conversations.

All right, very good. So Ms. Nebb, we don't have a second yet, but are you clarifying further? Okay, very good.

Yes, so to the motion, how would it be to direct staff to analyze a dedicated, sustainable funding source for the local housing trust fund.

That would be fine. We'd be happy to do that. Second. Second by Harmon.

So you're revising item one to that and then first and then second by Harmon. All right. Further discussion on the way that...

I just want to make sure that... folks are comfortable with the timeline that I had proposed for kind of after the first of the year, just given the change in the council.

That was not the intended comment.

Couldn't help myself. Yes, but do it with the new council as part of next year's budget. Very good.

Okay, we have a first and a second on the floor. If there's no further discussion, Mr. Clerk, would you read it back as you've got it?

Yes, I have a motion from Council Member Sneddon, seconded by Council Member Harmon, to direct staff to analyze a sustainable ongoing source of funding for the local housing trust fund. Go ahead and vote, please.

Thanks, Allison.

Very good. Pass you, Nancy. Thank you. The next item is number two.

Yes, Mayor Rouse, members of the council. Next item is number two, which is to direct staff to analyze a vacancy tax for an upcoming election. So I just want to describe this a little bit more. In parentheses, you see it says for behavior change, not revenue. I just want to be very clear that a tax is a tax. It would generate revenue. But the sole intent of really... of a tax like this is to change behavior. I also acknowledge that any change of any of our taxes will likely change behavior, but really the intent of a tax like this is to do that. There are major policy considerations around this. Do you apply it to residential or commercial or both? What would the potential tax rate be? This is a administratively burdensome type of tax to administer. It would be a local tax. The city would have to administer this tax. Property tax is administered by the county. Sales tax is administered by the state of California. So this would be a local tax. There are only a handful of cities in California that have implemented this, and we have information from them about what their programs look like. It doesn't the net effect of a tax like this doesn't necessarily generate revenue, right? So it generates revenue, but then there's the cost to implement and administer the program, so it's not necessarily a revenue generator. It's been talked about this way. You can only have a tax that gets put on the ballot along with a council member or mayor that run for election. So the next soonest election this could go on would be the November 2028 election for your consideration. So with that, we'll take any questions or conversation.

And I would just also to add on to it, Mr. Demartini said, I would recommend that if the council directs us to explore this, that we bring it back in the context of the city's strategic plan so that you can see kind of what other priorities would have to be weighed against this work effort, because there are similar staff members who would work on this as they would work on other things. And so I just want to make sure that the council has that full context of our adopted work plan with the strategic plan. So happy to take that direction, and then we could bring that conversation back when we bring back an update on the strategic plan.

Thank you. Ms. Santa Maria.

Thank you Mayor Rouse. Thank you to our staff for clarifying that. I am very well aware that this is a behavioral change and that's a good thing. That's exactly what we are looking for. Revenue is just the cherry on top. I will say that because of the administrative burden that this can cause and we're trying to look at this in a holistic way when we, I'll say something that is not really, we're not really talking about it right now in this item, but our rent civilization program that is coming up and is in the works is going to have a rental registry that is going to support in the administration of a residential vacancy tax, or could. support in that. So I do think that I'm happy to hear this in the context of other programs because I do think that there is a way that we could support staff so that we don't have to be doing the same work twice and so that we can minimize staff impact, because I know that everybody is at capacity. But I do want to highlight that, in my opinion, it's really important that it's not just residential, but it's also commercial. We see the vacant storefronts on State Street and other business corridors, and quite honestly, it's so much better for a property owner to just just get a tax write-off because it's vacant, and it's much more profitable to do that than rent it out at a slightly lower rent that a local business could actually afford. And that's what we're trying to change, is that we are hoping that these commercial property owners respond to the market that they so preach about, and if they are saying, well, it's about supply and demand, the demand is for lower commercial rents, and they need to adjust if they're going to be rented out. That's how the market works. It's supply and demand. So it really is for behavioral change. I would very much encourage us analyzing what this would look like. And because we won't put it on the ballot until November 2028 at the soonest, we have time to analyze this and figure out a way that we won't be putting too much additional impact on our staff. And see, especially if by November 2028, the rental registry of the rent stabilization program would already be up and running. Could be one tool that we use, not the only one. But yes, I don't know if I heard a motion. I think maybe Council Member Sneddon made one. I'm not sure. Or maybe I just saw you raise your hand. But I'll be supportive of this. But making sure that we add residential and commercial.

Ms. Sneddon.

Thank you, Mayor Ross. I didn't mean to distract you there, Council Member Saneria. So I'll make the motion to direct staff to analyze a vacancy tax for behavior change, not revenue, for an upcoming election for consideration with the strategic plan timing. And then I think that covers all those bases, and I think it will take time to analyze it, and that aligns with the strategic plan, and I'll emphasize again that, and not part of the motion, but just as a comment, I'll emphasize again that, you know, when we're trying to address housing, we talk about increasing supply, and, you know, there is a supply that isn't being utilized, and that is my goal with that, with residential housing. incentives really I'm seeing it as incentives to live in it live in that second home or to rent it out or have somebody else live there and I think You know anecdotally up on the Riviera. It's it's um, maybe close to a third of homes our second or third homes that are vacant and it it really is impacts the fabric of a neighborhood and your sense of community and safety and any number of things and does affect, I think, our local tax base also of people who aren't volunteering or shopping or visiting downtown. So I think there would be a net positive to the budget with people actually inhabiting those spaces year-round. But the motion doesn't include all that. It's just a direct staff to analyze a vacancy tax for behavior change, not revenue, for an upcoming election for consideration with the strategic plan timing.

Very good. Mr. Jordan. Thank you, Mr. Mayor.

Mr. Dwayne Mills, this type of tax that you put in our ballot, is there any limit to the amount that you can charge? Is that totally at our discretion?

I think we'd have to look at it, but I think it has to be... There's a proportionality aspect to it, correct?

And then... Does anybody know the answer to the question yet? If other places we've started to look at are tourist destinations and you don't really fall into the paradigm that if I'm a dairy farmer in Wisconsin and I just come out here in the summer and I leave my house empty the rest of the year because I can afford it, would I just pay $10,000 or $20,000 a year to still keep it empty? And it doesn't really solve the goal.

Councilmember Jordan, I believe San Francisco, I'm just pulling up a presentation where I have this from. San Francisco, Berkeley, Oakland, and Vancouver.

So no real 100,000 high tourist destination coastal cities in that list. I mean, those are all much more working class cities than Santa Barbara. We are uber focused on tourism.

Correct. So staff, as part of this process of this direction, is given to staff. Part of the analysis would be to look at all the cities. This list that I just read off is a bit dated. So we would make sure that we have the entire list of California jurisdictions where this tax is applicable. Also to note, Santa Cruz attempted to have this be implemented. It was a voter initiative and it failed. So that was an attempt in the Santa Cruz community.

That would be my only concern is I'm interested in the behavior change too. don't want to fall into a trap that there's people that even if we set an obscenely high number there in proportionality, that there'd be actually people willing to pay that. And I would say, well, we're not setting it high enough. And if that limit just constrains us and all it does is become revenue, I don't think that's the goal. And I wouldn't want to just sit back and have to live with that outcome. So I'd appreciate whatever you could look at that, trying to find more communities like Santa Barbara and what were the results.

doing this I do I do thank you honorable mayor I do want to follow up to the point of Councilmember Jordan's point in terms of the cap to you know it also in terms of the analysis also depends on how we structure this if this is we're seeking behavioral change right that is not a regulatory fee that is not revenue generating that may be we're looking at if we look at this carefully we may not be a tax that would go to the voters right it would be code enforcement and we would then the cap would be the cost for running a The program if you're looking at it from not changing behavior if you're looking at it from a revenue fee Then you're looking at a tax that would go and it all depends on if you counted a special tax or general General revenue tax and then within the threshold is obviously different from terms of the voting requirements All right, very good Miss Harmon Thank You mr. Mayor.

Well, I know we're not getting into substance today, so I won't I just wanted to go on record and to join with my colleagues and say I strongly support moving this forward and have for a very long time. I think it's critical and I also wanna just acknowledge and appreciate that we actually can't have this on the ballot until 2028. I didn't know that so that is new and very important information for me and despite the fact that it feels too far away, clearly there's a lot of complexity that we need to contend with and so I would just urge us to dig in as soon as possible because 2028 is going to come really, really quickly. And I'm very excited to vote in favor of it when it does come on the ballot in four years.

Thanks. And I'll second the motion. Okay. Second by Harmon. Mr. Gutierrez.

Yeah, I just wanted to voice my support of it. There's a business that's been vacant in my block of State Street, the 400 block. It used to be the ESOS building. I believe it's been abandoned for about 20 years now or maybe even longer than that. And it's just not right. Whoever owns that property now should be held accountable. So thank you. Mr. Friedman.

Thank you. All good comments, but I won't be supporting this today. Based on the last presentation that we had from Mr. DeMartini quite some time ago, and then follow up conversations, it is extremely administratively burdensome and can potentially lead to the revenue actually being less than what the costs are and the revenue decreases over time. And then the other impact of it is that for some of the businesses downtown, they've already reduced their rents to 1990 levels. And so we need to really be focusing on what we can do to generate State Street activity down there and the last thing I'll say is we have a lot even today that we put on our staff that is going to really Require a lot of time and effort plus all the other items that are out there whether it's the vacation rental ordinance and other things the rent stabilization ordinance and all of these and we're running out of staff capacity and in this case I I have strong concerns that the revenue that would come out of it would actually be less than the cost of the program. So respectfully, we'll be not supporting this today. And a future council would be more than willing to bring it back, and they would have some time to do that. Thank you.

Thank you. And I agree with Mr. Friedman. I looked at this a number of years ago. We were talking about it mostly in terms of commercial vacancies on State Street. but there's also the question of residential vacancies as well. And the cities I looked at back in the time, like you said, there's very few in California, but I think in Florida and Iowa, some other place I looked at, I can't remember now, but the administrative burden and the legal burden of enforcement and execution was way beyond the utility of the thing itself. And to bring up Mr. George's point, if you don't get the sweet spot high enough, then somebody may just bear that burden otherwise, but it is legally challengeable as well in all those areas. So it's a disincentive, and I think it's not how you approach housing production and or commercial vacancy resolution. So I will not be supporting it. And with that, we have a first on the floor by Ms. Sneddon, a second by Ms. Harmon. Do you understand, do you have the motion for us, Mr. Clerk?

Yes, I have a motion from Council Member Sneddon and seconded by Council Member Harmon to direct staff to analyze a vacancy tax for behavior change, not revenue, for an upcoming election for consideration with the strategic plan timing. Go ahead and vote, please.

I have a quick question to the motion. Is this including residential and commercial? We're including both, right? Okay.

Okay, thank you. All right, passes 5-2 with Friedman and Rouse dissenting. Very good. Next item, please.

No worries. Okay, the next slide is in regards to a number of items that council members commented on regarding the downtown parking enterprise fund. There was direction to staff to analyze the programmatic, economic, and budgetary impacts of free parking for locals at certain times. There was another one to direct staff to analyze the programmatic, economic, and budgetary impacts of citywide free parking. And then also to direct staff to recommend a list of capital and infrastructure upgrades in downtown parking that we could either reduce or delay that could provide some budgetary savings.

Mayor and council, I just wanted to highlight our downtown services manager, Sarah Clark, is here to answer questions. I will just state over the past two years, the staff has worked really hard and there's no longer a general fund subsidy to the downtown parking fund that had existed when I got here, so that has been eliminated. I think if this would be more appropriate to come back again as a work session or a study session with the council in terms of what are we doing with downtown parking, how are we moving forward, what does it look like in the context of the State Street Master Plan, things like that. So happy to, my recommendation would be to consolidate all three of those kind of into a single motion where we would bring this back for further discussion with council. Again, no offense to the seated council here, but maybe post-January once we know who is seated on the council at that point.

so we don't have to change directions three months later. You don't want to hear my lecture on public parking anymore? Jeez Louise. Ms. Sneddon, I don't know if Ms. McAdoo's suggestion is...

Yes, and I appreciate that because it is over at least half of us who won't be here. I really want to voice such appreciation that the issue of the downtown parking fund being subsidized by the general fund and the transfer of those funds every year, that that's been handled and is now not happening anymore. That was a huge change. So now we consider this as part of the general fund. It's its own fund. It's still downtown parking, but okay.

Correct. It still operates as an enterprise fund, but is no longer being subsidized by the general fund.

Which is amazing. So I'd be happy to move these Three as as a future workshop discussion item and not tied to this year's budget and particularly really looking at for locals what we can do to Just get our locals downtown and and not worrying about the time that they're spending there but to really spend time downtown and

So with with that in mind, but I'm happy to as you suggested combining all three For a work session in the future Okay, so that's the first spice none to combine all three all second second by Santa Maria And a further discussion I won't be supporting the motion because we used to say in the parking committee that There's no such thing as free parking. Somebody pays for it somewhere. So, isn't that right, Ms. Clark? Okay, we have the motion and second on the floor. Do you have it, Mr. Clark?

Yes, I have a motion from Council Member Steddon, seconded by Council Member Santa Maria, to combine the three recommendations and approve them as made by staff. Go ahead and vote, please.

Motion passes six ones. Ross is sending. Thank you. Next item, please.

The next item includes other programmatic items that were discussed during prior budget hearings. This is sort of everything that's left after all the other conversations that we've had. The first item on the list is to direct staff to reduce funding in the sign program. I think, again, we might want to take these individually. If I may just talk about item two and four right now, because I don't think either of those will require a motion of council. There was a comment to direct staff to reduce or delay any future pension fund contributions to the section 115 trust fund. I wanted to confirm with council that the city administrator's recommended budget for fiscal year 2027 does not include any additional contribution other than the required minimum that CalPERS requires of us. So there is no contribution into the trust. And so there really is no action on this item from our perspective. And then also there was a comment on item number four to not appropriate funds for fencing and gating in public parks. We confirmed with the Parks and Recreation Department staff that there is no funding for that in the 2027 budget. So that item also we believe does not require a motion. So we can go back up to number one for conversation. Thank you.

Okay, and I'd agree with both of those assessments. I don't think saying any future is a wise thing to do for a council. So very good. So we'll go back to item one, please. What, just a curiosity, when you say reduce funding in the sign program.

Oh, Mr. Busk.

Thank you. Through the Mayor, I actually was a bit confused as well about what that meant. We do have a signed committee and that is part of the general fund budget that planning and community development staff support. We do get fees for signed applications that are submitted and so it is offset and Eliminating the sign committee is something that we are studying as part of overall budget reduction measures so that those duties would be absorbed by other existing committees. We think there'd be some savings and efficiencies there.

Mr. Best, if I can ask, didn't we in fact do that at one time? Didn't we wrap the sign committee within, was that HLC or ABR or some of those?

Yes, that's correct. We didn't have any board members and so ABR handled the signs within their purview and HLC handled the signs within their purview. And we think that we could move back to that as well as expanding maybe some administrative approvals that staff could do.

But in terms of code enforcement or whatnot, that has nothing to do with that, right? That's just in general?

Correct. Sign enforcement and code enforcement separate.

Very good. Thank you. Ms. Sneddon.

Thank you, Mayor Ross. I appreciate that it caused some confusion. I appreciate that you looked at it. Really my intention here is to look at programs like this and like you're discussing with efficiencies and combining and which ways that there could be budgetary savings So I'm content with not having to make a formal motion but just the general direction to continue to look at that and especially in terms of how the process could be moving faster to save residents and money in how long that takes and then also in which ways these can be consolidated to save the city budget too. But I don't think I need to make a formal motion.

So we're drawing that direction. Yeah, and I appreciate that clarification. I think, you know, we are, that was kind of the whole concept behind the 200 idea list was to identify those areas. And I think there's a number of other boards and commissions that over the course of the next year we will likely be coming back to council to either recommend consolidation or it's no longer necessary for a variety of reasons. And so we will absolutely continue to look at ways to streamline it. It does, I will say, every Brown Act body that exists requires a level of administrative staffing in terms of noticing. It requires attorney office review of agendas. So there's a whole host of just work that goes along with it. It's hard to quantify that, but then that frees up staff to do other things.

And to clarify, too, this is not for charter boards and commissions. Correct. HLC is firmly intact and will stay. Absolutely. Before we put that forward. But I'm happy with that, and thank you for considering it.

Thank you. Okay, so then currently we're removing one, two, and four from this list and moving on to item three. Is that correct?

That's correct, Mayor Rouse.

Okay, very good.

So item three is about identifying a drop-in center to address homelessness.

Mayor, if I could... I wanted to ask Ms. Payne to come up, because I do, as I understand it, there have been, since the Farris Center was opened in downtown, I believe there are a couple other service providers who have, in fact, opened centers that operate more like drop-in centers in and around. And so the sort of space around homelessness and response has continued to evolve since we originally went forward with the Farrer Center, but I don't know if Ms. Payne can talk to some of those new programs that are in operation. Ms. Please. Ms.

Absolutely. So as part of our strategy, and we will be presenting this when we come back and talk about homelessness and all of the programs on July 28th, is to have a diversity in options for folks so that there's not just one spot that is the spot that everybody is being directed towards. So in that, we're looking at opportunities both in different locations, so is there an opportunity for even Casa Cacique to have some component of that in their courtyard? What does that look like? What is the feasibility? In the downtown area, there is a current center that serves the parole population that I used to be associated with, and so I know the folks and we've been in conversation, and as they expand their services to take CalAIM, which does have a lot of homelessness focus, there's an opportunity to have a justice-involved drop-in center in the downtown region to really focus on the expertise of the folks at that center to provide services to those who are justice-involved. So in and out of jail, and there's a lot of overlap in the homeless community. And so that would be a partner organization to the FARO and provide different options for people based on their needs. We also have Father Virgil's drop-in center that is very successful, and we have talked about opportunities even to provide some transportation to folks. So we're looking at a lot of different options, and the focus and our intention is to really have that diversity and have centers that really are focused on this specific needs of individuals, because that is a really important part of being responsive to homelessness.

Okay, so thanks. That's the perspective on existing centers we have today, and of course, a new one would have to identify a new source of funding as well, so.

Absolutely.

Yeah, very good. Ms. Sneddon.

Thank you, Mayor Ralston. That was one of the suggestions I had, and I'm hearing that that will be part of each conversation when it comes back. And just want to clarify, so the drop-in center that you were talking about, is it by appointment or not by appointment? Like true, you can walk in?

True, you can walk in. Also having appointments as well for certain sorts of services are appointment driven, such as case management. We're also looking at having more courses and opportunities for learning for folks and including financial literacy and at that center there's substance abuse counseling and employment services. So really looking to diversify the services and the opportunities for folks.

Great. And so I guess my question is just about budget related because I think we can programmatically talk about it when the items come. Are there any expectations that there will be additional budgetary needs If we were determined that we want there to be a robust drop-in center, maybe not city provided, but that support or coordination with, are there additional funds that we need to set aside or identify now to make sure that that's supported?

Yes, because that is, if we want to expand the services being provided, there would be have to be a cost and a service provider along with that. At this point, I think that was not part of the conversation and has not been with SB Act, but we will continue to look at that with them and just sort of explore that as part of their service contract. it would be hard to sort of set aside a dollar amount right now because it's so, we just don't know what that program would look like or where we would even start to consider having something that is just truly a drop-in center. I think the July 28th conversation will give a broad picture for council of kind of what the city is funding with respect to homelessness, where we see opportunities for additional service provision. and then get council direction at that point. So at this point, I don't know that there's necessarily additional funding that is needed or that we would even have a sense of what it would be.

Okay. I'll make this comment here and then we can figure it out as we go. But for myself and maybe for some of my colleagues, when we initially approved the Faro Center, it was with the intention that it would be a drop-in center. And the terminology of daytime navigation center has maybe changed that understanding perception over time. And then because of issues with the property or different agreements then it changed to by appointment and From my perspective we've had a real loss in what that initial funding Setup intention was was to have a true drop-in center, and so we've talked about the funding of FARO, we're talking about the funding, and this is just a budget question, we're talking about the funding of Casa Cacique and different supports and services, and I just think there's this kind of hole of all of that initial intent and a lot of considerable funding toward the intention of a true drop-in center, and I don't want to lose that thread as we're talking about FARO, and Casa Cacique and Father Virgil and the different ones. So that particular need, I'm not considering as being fully met at this point without knowing more about the parole center. And maybe that can meet the entire need. And we just need to know where to refer people and direct people. But it doesn't need to be a motion. But I just want to be really, really clear that that drop-in center intention, need, and considerable funding resources that went toward what I think many of us believed was the intention, that has not been met. And I'll leave it at that.

Okay, Mr. Gutierrez. Thank you, Mr. Mayor. In regards to item four, so I understand that this fiscal year they're not planning on building any fencing or walls and such. But my wonder is, are there any fences or walls that have been already budgeted for in previous years that haven't been built yet that we can still cancel to save the money on those projects?

And I think council member Gutierrez, you know, I had, we had met with director Zachary and assistant director LeBlanc and had gone through our capital projects. And I think there's a number of reasons why fencing is necessary on certain projects in terms of safety for children, you know, and also just, so we've gone through those. I mean, we're happy to meet with you again and walk through those projects at this point. Um, I think most of those, as those designs come forward and as we award construction contracts, we can highlight that as we're going through the plans and specifications process. Those usually come to council for approval before we go out to bid. And also, we usually bring those forward in conceptual design, so there should be an opportunity there for additional council input. But we're happy to meet with you again and walk through those again.

I mean, I've met with Parks and Rec staff about it, and I just have a fundamental disagreeance with them, considering that these parks have been in existence for well over 100 years without walls or fencing, and I understand the notion of keeping people safe, but again, they've been in existence forever, for over a hundred years with almost no walls or fencing. So when we're talking about saving money and allocating money to build something that nobody was asking for, that's one of the first thing that come to mind as to why we're doing that. So yeah, I just wanna.

I mean, I think if, I mean, we could, bring back a conversation of current capital projects, if the council would want to make that direction to staff to say to walk through those projects. I mean, you could make the motion, see if your colleagues would support bringing back a work session to walk through existing funded projects that include construction of gates or fences. We'd be happy if the council wanted to give us direction to do that. We'd be happy to do that.

Okay. Sounds good.

Ms. Santa Maria.

Thank you, Mayor Rouse. Oh, Ms. Payne, sorry, I thought you left. I just had a couple quick questions. I just wanted to make sure we don't lose that train of thought from item three. I know we're jumping around a little bit, but I want to make sure I have this clearly. The drop-in centers that you identified, Ms. Payne, so you're talking about the parole center and Father Virgil. Remind me, what are the other ones you mentioned?

I also mentioned a possibility at Casa Cacique.

Okay, so I have heard a lot from community members and people who are directly trying to access these services that those two drop-in centers are not adequate. They're not meeting the need from the community. And I'm happy to talk more offline about just the programmatic needs, but I think, to Mayor Pro Temp's point, I don't think that the need for a drop-in homeless shelter has truly been met because the existing shelters are not ideal for undocumented folks or even families, femme and queer folks in the community. They have expressed feeling unsafe and that these are not the places that they feel comfortable going to for services. And so I think it's really important that we analyze what is the real need from the community because it doesn't seem to be being met by this. And along the same lines, Casa Cacique is a brand new project we're taking on and it's going well so far, but I do want to caution against us making that the drop-in center because it's not centrally located. And the call from the community has been to have something located downtown so that we don't have to be providing services to the unhoused community at Alameda Park again. And so I don't know if we need a motion for this. I would be happy to make a motion amending number three, because I do think it's a little bit vague. I'm happy to take suggestions, but it could be something like direct staff to evaluate existing drop-in centers and identify the need. I don't know the wording for this.

I don't know if you could, if you understand what I'm saying. Absolutely, and I think there was never an intention that all drop-in would move to Casa Cacique. That was never the intention, but I think what we're trying to do is create sort of services throughout the community and not focused in just one geographic location. Because I think that's where you get an over concentration of individuals and neighborhood concerns arise. And so absolutely hearing that and the need to balance that throughout the community. So I think looking at a number of options, I think hopefully as we continue to have conversations, the whole goal of Casa Cacique was to kind of have that as almost like a sort of a hub for our service providers, but then also looking at how could we have satellite service provision elsewhere in the community. So I hear what you're saying, and I think we can definitely continue to explore locations throughout the community, because there is a need in multiple locations, and we definitely don't want to over-concentrate it in one neighborhood versus another.

Thank you, Ms. McAdoo. I also hear that these locations like the Pearl Center or Father Virgil, for example, I mean they're located right next to the jail and located next to places that undocumented folks don't feel comfortable going to or that even our unhoused queer community doesn't feel comfortable going to or they've had experiences there before and they're saying that that is not, like I tried going there already and my needs were not met. Transition housing, we know, is always full. And so, Ms. McAdoo, what would be the best, what would you recommend for this? Because I do think you probably need staff or direction for staff to continue this?

Well, we're going to come back on July 28th with a comprehensive update. I think we can just take general direction to provide sort of what our current service providers are, you know, the different options for individuals in the community and what we're contemplating in terms of future plans. And then if there's additional, I mean, that staff report obviously will come out publicly. And so then if there's additional direction the council or the community wants to give us in terms of areas where we are missing service that we can look at and explore further, that would be a great time to do it as part of that agenda item.

Yeah, I think in, so I'm in agreement bringing that back July 20th sounds good. Would it be possible when it comes back if staff has done any research on, I'm sure staff is aware of some of the services that we're not able to provide quite yet, but for us to sort of have an idea of what staff is already aware of, of what needs they're aware of. And then that way we don't have to repeat ourselves or ask you to look into things you're already looking into. No.

And I think we've taken note of the comments that you all have made over the past couple of meetings and make sure that we include those in the report.

And I have to say, Ms. Payne, you're doing an incredible job. You really are. I hear a lot of comments from the community that you're really out there and doing your best in connecting folks to these services. So I just want to thank you for all your work. I really appreciate that. Thank you.

Ms. Harmon.

Thank you, Mr. Mayor. Yes, I'll just second much of what Council Member Santamaria said. particularly around really assessing where the gaps are and thinking about ways to fill those. So I wholeheartedly agree and also appreciate the approach of diffuse geographic representation across the city. I think that could be a very effective approach, so I'm looking forward to learning more. I just wanted to briefly say that I too am interested, as Councilmember Gutierrez is, in at least learning more about fencing and how we fence and gating and walls. And in some ways, it feels like a little point in the context of these big discussions that we're having. But I do think the impact on quality of life and access to third spaces is so important. And I can't help but think back to one of my earliest council meetings where we voted to close our public parks at sunset. And I still think about that. And I'm still really bummed about it. And that's the technical term for it. And I just think that it's worth having the conversation. Now, safety is safety. And there are things that... we have legal obligations to not allow access to because it's a known and inviting hazard. And that I get. And there are certain things we can't do. But I think there's this other bucket where there may be some room to really think about what we are communicating when we put up a fence or a wall. And so I just wanted to echo my support for having that conversation when the time is right.

Thank you. All right, so we don't need further direction on those items, correct?

I think we don't need direction on number three, but I'll leave it to Council Member Gutierrez if he would like to make a motion to have staff return with a work session on gates and fencing and public parks, and we can prepare something. So that, I think, would be helpful to get direction for staff.

Yeah, I just hate to make an action item like that without the director Zachary being here today Well, no, it's not it would to be bring it back for further. I just once again staff burden in terms of like home Let's do a work session. So Okay. Well miss Nedden Thank You mayor Ross.

I Agree with the assessment of that and I think would it be appropriate during the park master plan? process to be talking about fencing and

Absolutely. I think there's, there's two elements of it. You know, obviously during the park master plan, we're in the midst of that and community engagement process right now. So crucial to provide feedback and input will be touching base with council at various points. We, if you would like us to revisit projects that are in the works right now, that would be separate from the parks and rec master plan, which is sort of future planning. So that's where I'm asking is if you'd like that conversation to come back where you'd like to revisit and just look at the projects that are under construction or in design right now, that conversation I think would be, we would want direction on that to come back and do that. Versus we can absolutely incorporate the conversation when we bring the Parks and Rec master plan projects back to the council as a go forward.

Well, I support Council Member Gutierrez and Council Member Harmon on this. I think as individual projects have come forward, we've talked about it each time, the fencing, but I think it wouldn't hurt to have a look through and see, because it's considerably expensive to do the fencing and I think it's a really good point that if things have already been approved but haven't yet been implemented that maybe there's a cost savings there so I'm in favor of whatever mechanism that that is looked at going forward mr. Gutierrez thank you yes so what's your recommendation

City administrator, I would recommend that you make a motion to if I'm understanding what you'd like to have happen make a motion to direct staff to return with a work session on current capital projects in Parks and Recreation That include fencing or gates and we can review that with the council and just share the various requirements around that Okay, I'll like to make that motion Just want to further emphasize that

This is coming from somebody who was born and raised here, and it was such a privilege to grow up in a city where at any point during the day or night, I felt like I could go to any of these public spaces. And as I've grown older and I've seen the fortification of some of the public spaces, like for example, our public schools, It just breaks my heart that when I go by those places every day, growing up, they used to be teeming with kids and families playing, and now they're ghost towns. And that's not the Santa Barbara I grew up in, and that's not the Santa Barbara I want to leave for future generations. So this is why it's such an important issue for me. Absolutely.

Okay, that's a motion by Mr. Gutierrez. I'll second. Second by Harmon? Or San Marino? Somebody? And very good. I won't be supporting the motion because I know that when schools fenced off and when oftentimes parks are fencing off to have foliage recover or for construction or for safety and schools have done it for the same reasons because of vandalism and safety. And it may be unfortunate, but I'm certainly not going to direct them not to do that. So with that, we have the motion on the floor. May we have the vote, please?

Yes, I have a motion from Councilmember Gutierrez, seconded by Councilmember Santa Maria, to direct staff to bring back to Council a work session on existing capital projects, specifically in regards to fencing and gating in public spaces. Go ahead and vote, please.

Pass 6-1, Rouse ascending. Very good.

Mr. DiMartini. Thank you, Mayor Rouse. The last item on this slide is item number five. There was a comment made at the last budget deliberation meeting to direct staff to not add any new positions.

Ms. Sneddon.

Thank you, Mayor Rouse. And that was a comment from me. I think we are... so much needing to address our class and comp adjustments and I think within who we have and and the staff that we have and I want to clarify that doesn't mean not filling positions that are kept vacant but it means not adding new positions but if that's a complication where it comes with our class and comp and renaming positions I think it's more here the intention that we not increase certain offices. I think we've maybe overextended in some ways, but to just pay attention to that, but I realize that that might be a more complicated statement to not add new positions, so I wanted to hear from colleagues, but I just wanted to clarify that our class and comp really needs to happen, and that needs to be the priority, and adding other positions during that I THINK MIGHT COMPLICATE IT. MS. HARMON.

THANK YOU, MR. MAYOR. I AGREE SO STRONGLY ABOUT CLASS AND COMP. IN PARTICULAR, WE'VE ALL SAID THIS SO MANY TIMES, BUT I WANT TO GO ON RECORD AGAIN. GETTING REAL CLARITY AND A DECISION MADE ABOUT OUR COMPENSATION PHILOSOPHY IS SO IMPORTANT TO ME. So often now, I feel like we're reaching this point, at least in my tenure, where I'm thinking that's somebody else's opportunity. I won't say problem. It's someone else's opportunity who sits up here. But I am so invested in this, as I know we all are. And I really feel strongly that this council needs the opportunity to weigh in. And so I just can't stress enough how much this matters to me personally, that the class and comp and our compensation philosophy and how we think about our team members and how we pay them, how we treat them, is the conversation that we have. And I don't think that you can separate that from the budget conversation. As to the specifics of not adding new positions, I think the instinct there, I share in a lot of ways, but then I also think when I'm considering specifically the general unit, you know, those folks are often already doing two or three people's jobs. And so it would be further compounding the experience of already having to do four jobs and not being paid enough for the four jobs that you're doing. And so I just think this is REALLY COMPLICATED AND THE LYNCH PIN IS NOT SO MUCH WHETHER A NEW POSITION IN THE GENERAL UNIT IS ADDED OR NOT, IT'S ACTUALLY CLASS AND COMP AND OUR COMPENSATION PHILOSOPHY. AND TO ME, I THINK THAT GETS AT WHAT YOU'RE TALKING ABOUT, COUNCILMEMBER SNEDDON, IS TREATING PEOPLE FAIRLY AND BEING A MARKET LEADER. THAT'S WHAT I'M HEARING FROM YOU. SO THAT'S KIND OF A NON-ANSWER OTHER THAN TO SAY that I really agree and I would urge us to continue pushing that and to bring the comp philosophy back. I don't know if that needs a motion, but I would move to bring that back as expeditiously as possible if that's necessary.

Mr. Friedman.

Thank you. I appreciate the conversation on this because it is extremely important that we hold the salaries as much as we can to address the deficit. And at the same time, with my colleagues, I'm in full agreement with my two colleagues on the class and comp, why it's so important, why we need to have the excellent staff that we do to continue to deliver the services that the public expects from all the different departments. And that does get into the being with the employer of choice. But as we're going through it, there might be positions, and this gets to Council Member Harmon's point, that could come up. that would need to be created to alleviate some of the bottlenecks that we have to create more efficiencies. So it's a larger discussion than we're able to have tonight to get into the details. But the default position as a start should be not to create a new position. And if it is, then you'd have to go through a series of checks to justify it. So I would support as a default not, but not a straight ban because of the class and comp. And because the opportunities that are going to be there within the departments to make sure that there's opportunities for growth when you're moving up within a department, we want to make sure that we can retain the individuals that have been working here for five or ten years and there's opportunities to promote up, to retain that institutional knowledge. And at the same time, watch every dollar. So I support where my colleagues are going on this in terms of Let's have a larger discussion. Let's tie it into the class and comp. And again, the default being not to add any new positions. And if there are, we would really need to justify and identify where that funding is going to come from. Thank you.

Ms. Shannon Maria.

Thank you, Mayor Rouse. I'm generally in agreement with what my colleagues have been mentioning, particularly about the impacts that the general unit has had. quite honestly, suffered over the years. I mean, we heard from one of our members from the general unit that, I mean, there is definitely a, it's not equal the way that we treat every department, even if we really want to. I mean, we see it with the general unit, I mean, all of their duties keep getting compacted more and more and more. And we very rarely allocate additional funding to bring back those positions to alleviate their workload. And so as we are going through the class and comp conversation, it is very important that if there are positions needed to alleviate that bottleneck, especially within our general unit, that has continuously had vacant positions just straight up eliminated. I think it's something that because we're gonna have to figure out where the funding comes from, it is something that should come to finance, come to council so that we can ensure that we can identify the funding for it. But also I think part of... Part of why I was originally supportive of number five in general is because what I've heard also from the public is that we need to be careful in adding executive positions if it's not absolutely necessary, because just quite honestly, they're the most expensive ones. If we really need it, I think there needs to be a justification. And if there isn't, then let's take it as an opportunity to achieve more cost savings. We saw that last week. We did not approve, for example, our government fellow that we were going to have in the city administrator's office because it's nice to have, but we're just not in the position to approve six-digit positions going into the executive level. The resources do need to be, in my opinion, concentrated on addressing the fact that we are not market leaders, that class and comp still needs to be applied to our general unit. So I would say that we do need some flexibility on the not adding new positions, perhaps we could say no added new positions without the review of finance committee and mayor and council, just so that we can identify the funding for it. But I will say, I think it's important that we apply this philosophy across the board. And it is exactly why I brought up the three frozen police officer positions last week. Because if we want to take care of our existing public safety employees and the rest of our employees, we shouldn't be adding more staff to the role other than the folks that are already in process and in the academy and they're about to join. That's fine. But additional ones is only creating a bigger gap. a bigger bill for us. Every time that we negotiate and these contracts go up, and I'm all for paying our workers more, but it's just common sense. If you have more employees, you're gonna have to be spending more in salaries and more in pensions. And again, I urge us all to be equitable in how we are treating the different units and the different departments because I hear too much from other departments that they don't feel that same equal treatment. They don't feel that they have that priority to retain their staff and to make sure that they are able to provide those frontline services that our community relies on. So I would say yes, let's let's keep this as a broader conversation Executive positions should absolutely be limited to only when necessary and honestly same with all other new positions and Personnel is definitely something that is within our city minister's purview. So I don't want to encroach on that at all But the budget part it is something that we will have to We will have to discuss in order to make sure that we are not dipping into reserves.

Thank you

Thank you, Mayor Ross. So there is a motion on the table in a second. And to the motion, I'll say it doesn't include the not adding new position. It is just to bring back the compensation philosophy and the class and comp. And I just want to clarify, when I did make the suggestion to look at not adding new positions, it was in the conversation with the city administrator's office. So I just want to clarify it wasn't in terms of the general unit or any other unit it was we were having the conversation between city council office and city administrators office and that was my my intention was to not add new positions to the city administrators office and that was also in that same conversation in context with the fellow position, so that is the the office I was referring to I just want to make it really clear which I apparent which I wasn't clear that I'm not at all talking about the general unit and as it stands right now with the motion in the second that sentence just isn't even in there the the motion is to bring back the compensation philosophy and class and comp at a future time and so it's not even part of the motion so

Okay, so I'm clear that we're not moving to direct staff to not add new positions. Is that correct? All right, very good. Well, just in terms of what we're doing in general with our compensation pick, this is what we're all about today. If we can't balance a general fund or have a healthy general fund going forward, and this is something we brought up last year and we dipped into reserves, the staff has done the heavy lifting. The administrator has done the heavy lifting. The department has done the heavy lifting. It's time for us to make these tough decisions. So if we talked about things that are extraordinary to the normal general fund, we end up hurting our positions with our bargaining units and our ability to pay them. So that's why I'm glad you made that clarification on number five because I don't want to get into the granularity of trying to manage staff. That's not our job. So if you understand or have the motion, Mr. Clerk, I think we'd all be interested to find out what we're talking about here.

Yes, was it moved by Council Member Harmon and seconded by Sneddon to bring back to council the compensation philosophy and the class and compensation study as expeditiously as possible. Go ahead and vote, please.

Passed unanimously. Thank you.

Mr. Demartini. Yes, Mayor Rouse. So we're almost done. I'd like to direct council to the recommendations that are before you today, if I may. The first recommendation was to approve certain adjustments to the fiscal year 2027 recommended budget identified by staff as detailed in the schedule of recommended adjustments. This is attachment one to your council agenda report. We do not have a slide on this since it's in your packet. We presented this a couple of weeks ago. Staff is requesting that a council member make a motion second and vote on this item so that we can formally include these staff recommended adjustments into what comes before you next week. Again, these are technical adjustment items that routinely come up during the budget development process. after the city administrator's recommended budget is released in late April. These were presented to you in detail at a prior meeting as well.

All right, very good. And at this point in time, Mr. Duimas, we talked a little bit about the ability, because what we like to do is not... have another split vote on the total budget. But we have certain items we could take out and make resolutions going forward on. Am I getting that correct?

Yes, Honorable Mayor. So for today's... SPECIAL MEETING SESSION WAS ABOUT GIVING DIRECTION FOR REALLY WHAT NEXT WEEK IS BECAUSE WE CAN'T APPROPRIATE MONEY IN TERMS OF DURING A SPECIAL MEETING OR DO RESOLUTIONS OR ORDINANCES. SO THAT'S NEXT WEEK. SO THE GOAL TODAY IS TO TRY TO MAKE IT NEXT WEEK'S MEETING AS SEAMLESS AS POSSIBLE ON ALL THAT. SO GIVING AS MUCH DIRECTION AS POSSIBLE. To staff about either you know ideas of proposed or alternate resolutions is perfectly acceptable We're not approving that today just to be very clear for council It's just giving the direction of what will occur next week just like we've been doing the last two hours has been Kind of a direction filled meeting All right very good miss Harmon Thank You mr. Mayor I'm happy to make the motions, but I did I just wasn't sure I have one I

follow-up question, and I just wasn't sure when to ask it. On the RSO, we had a bunch of public comments. I believe that we do have a sense of where the funding's coming from for that program, but I just wanted to confirm.

Yeah, so we have not, you know, we don't have a final number for what that budget, the startup budget will look like. We've had estimates, our original estimate from our consultant, RSG, was $2 million, and that was startup costs, I think, where we are now is around 500, but we are in the process of doing a fee analysis and study now of those startup costs. When we bring the ordinance to council for introduction in July, that would be the point at which we would ask for council appropriation of those dollars. It would come likely from Measure I funds, and what we hope we will be able to do is then basically recoup those startup costs from future program fees. So that we would structure it almost like a loan against future revenues. So there's not, I recognize there's some concern about not having that money in the budget, but it's why we've been very transparent about the dollar figure. We are aware of it, we've planned for it, and there is a plan to reimburse those costs from future program fees once we get those fees implemented.

Thank you. And if I remember correctly, we had a somewhat similar, Ms. Parenteau, with community choice energy, didn't we sort of have a similar, there was like reimbursement or there was a loan? And the reason I'm even asking is I just want to assure folks that this is not like super unusual and it means that the money's never going to be there. If I remember correctly, there was some analogous approach, right?

Yes, Council Member Harmon. The City Council did dedicate $2 million of the SCE settlement from the Thomas fire to the startup costs of the CCA that was then paid back last year through rate payer dollars.

So thank you very much. That's extremely helpful. And I just, again, my point is to just clarify that this is not only not unusual, but it's not an attempt to circumvent The will or whatever the will of counsel might be or to say we don't have money. This is an approach that we have Taken before analogously that's been successful. And so with that, thank you.

I appreciate it All right, mr. Ned Thank You Mary Rose.

Okay. Could we look at slides 19 and 20? I just have a question about where this leaves us. So on 19, so with the fiscal year 2027 adjusted surplus deficit, there's a little bit of a surplus there, and that's in the operating budget. So then on slide 20, the actual reserve level goes down. It's 27.9 and then goes down to 26.8. So maybe you could help me with that. Like if we have the operating budget surplus, why would the actual reserve level, not the target, not the percent, but the actual level go down?

Absolutely council person. Thank you for asking that question. We did we did chat about this a little bit last week and so it there are other categories of our general fund reserves other than The disaster and the contingency reserves the most common one is our carry forward appropriation This is the example on an email that I kind of described a little bit earlier today. And the best example here is that if we have a project and that project has appropriation in fiscal year 2026 of let's say $10 million, but we've only spent $6 million of it in fiscal year 2026, well, we need to carry forward the appropriation of the remaining amount of $4 million into the next fiscal year. And so that sits in cash to be able to pay for that $4 million. the direction from the city administrator, uh, going forward, which is I fully support is that we are going to be asking for money when we plan to spend it, right? We don't want to just appropriate money and have it sit there unnecessarily, uh, for a year or some other duration. So the, the amount of the reserve specific for that carry forward appropriation, we anticipate declining over the next couple of years. That's why the overall reserve level is declining. There isn't, I just want to confirm, on the prior slide, we will, in this budget, that's before you, we'll likely have a very small surplus of approximately $400,000. That will increase the amount of reserves related to that committed in the contingency of reserves.

Thank you. If we wanted to commit to that reserve level, not going any lower, what would we have to do today in recommendations? If we wanted that to not show from 27.9 to 26.8, but to show that today we stop having the reserves go down, what would we need to do?

Council Member Stanton, in order to have the reserve level not go down from the current projection of this fiscal year of 27.9, The difference between the ending reserve level that we anticipate this year versus what would be projected in the recommended budget is a difference of $1.1 million. So we would need to find additional revenue and or additional expenditure reductions totaling $1.1 million.

OK, thank you. And I think this gets to the definition of a balanced budget. Do we call it balanced if just our expenditures meet our revenues, or do we call it balanced if we're not Is it depleting reserves any further? Is it operationally balanced but not reserve balanced? And I think these are really important just vocabulary distinctions. So personally, we've done all this adjusting and staff has done amazing work in finding the list of 200 and the ideas. But if the end result of all of that is that this reserve level Goes down I mean I think when we say stop the bleeding to me that means That that reserve level doesn't go down another dollar, so I'm just gonna put that out there that If we don't if we don't project or anticipate or plan for how to make up that I $1 million like today and or when it comes back, you know for our approval. I I'm having a hard time considering it a balanced budget I just can't see us having that number go down any further To my colleagues, I don't know how to address that All right miss an area Thank you.

My rose. I have a few questions I guess I'll just I WANT TO FOLLOW UP WITH WHAT MAYOR POTEMPS MENTIONED. LAST WEEK WE SAW A TINY SURPLUS OF .2. NOW WE'RE SEEING .4. WHAT CHANGED? HOW DID WE INCREASE THE SURPLUS? I KNOW IT'S A LITTLE BIT, BUT I'M CURIOUS AS TO WHAT EXACTLY HAS CHANGED BECAUSE MY UNDERSTANDING WAS THAT THE .2 SURPLUS WAS IF WE HAD FOLLOWED ALL STAFF RECOMMENDATIONS, BUT I DON'T THINK WE FOLLOWED ALL OF THEM. SO HOW DID WE GET THERE?

VERY GOOD QUESTION, COUNCILMEMBER SANTA MARIA. After last week's meeting, we adjusted the council recommendations. Council did recommend to hold off on one position, which was about $160,000, so almost .2 rounding up. The staff recommended adjustments was the .1 that you see there right in the midline. That's what we are asking you guys to vote on today, and again, those are the technical adjustments. So that brought us up to the .2, and then When council directed us to hold off on that one position, it gave us an additional essentially $200,000. So that's where that information came from.

Okay. Thank you so much. And question about, I want to follow up with what council member Harmon and so many members of the public mentioned about the startup cost for the rent civilization program. So I know we have the measure. I, that the flex, the housing flex fund, how much money is in there right now? I looked online and it said roughly 2.2 million, but I just wanted to double check with you all and check that that number is correct. And I know that there's some already. Yeah.

I believe that that is the current balance in there. We have, you know, plans for spending those dollars. I don't know if Ms. Payne wants to come forward and talk about that. Some of that will go towards Casa Cacique operational costs. Some is, you know, anticipated to be set aside for the rent stabilization startup costs, but not appropriated yet. I'll let you share.

So I actually don't have the balance as of today based on past appropriations. We have just been, which my understanding is that most of that has been spoken for. We have a plan for future appropriations, which is what we're discussing today, which is what Ms. McAdoo was mentioning.

Okay, thank you so much. If I'm hearing you correctly, Ms. Payne, if most of the money in the Flex Fund is already spoken for, I think this does require us to to go back and identify where we're going to find the additional funding that we're going to need for the startup costs. I'm seeing a really big discrepancy in what is currently in our budget, which is about $500,000 for startup costs, but our consultant estimated $2 million. And it might not be $2 million. Things are going to change. There's aspects of the program that are going to change and will change how much it's going to cost. But I want to also be very cautious about underfunding the startup of the program and setting it up for failure. And I do think that if we were to appropriate the two million that was recommended by our consultant, I mean, it obviously doesn't all have to be used and anything that isn't used could be returned to the flex fund. So I'm just curious about if by July 28th, we will have a sense of where exactly we will be able to find the costs or the cost, excuse me, the funding for that program if it ends up being the estimate that our consultant identified.

Yes, we will make sure because what we're doing right now is analyzing those startup costs. So we'll actually have a much more precise estimate. So we'll know what the rental registry will cost, kind of the number of staff that we anticipate hiring, and again, Those will be eventually recouped annually through program fees. So we don't need an ongoing appropriation yet. And we will, my recommendation is that we actually keep it set aside in a separate fund that we monitor so we can monitor expenses and revenues separately. So that will all be coming back on July 28th with the ordinance and we'll have that much more specific cost estimate.

So on July 28th, will we will you be asking us to give direction or to vote on creating a separate fund to keep those dollars there so that we can monitor the startup costs?

Yeah, so it'll be basically setting up sort of the programmatic elements in addition to introducing the ordinance.

Okay. What you just mentioned reminded me of something. How are we structuring the repayment of a quote-unquote loan if the registration fees are structured to just achieve, what's the word? Cost recovery. Thank you. That was the word.

Because loan payments and for startup costs are considered cost recovery items. So we basically would amortize it over the projected number of units and over some period of time. And so it wouldn't overly burden the fees in the first year. The loan costs would be spread out over time.

Okay, so as of today's budget that we are looking at, there is $500,000 set aside already from Measure I, from the Flex Fund, but on July 28th, will we be able to consider additional funding if the fee study and everything is... to tap into because I'm hearing that most of it is spoken for. So do we know where?

We will look at that and we'll make recommended adjustments as needed. So we just don't know how much is needed yet. So I can't tell you how we're going to make adjustments until we have that analysis done. Sure.

Okay. That makes sense. Let me see.

There was another question.

Oh, yes. The surplus that we have... I'm curious about whether on July 28th, if we can discuss if that surplus could either be used to cover the additional cost for the restabilization program, or if it's not needed and you're identifying that funding elsewhere, if we could just put that point four into the reserves.

That would be, we would absolutely first and foremost recommend that that go back to repaying and replenishing reserves. Yeah.

I would agree too. I think the, I trust in you all as our staff to identify the funding for the rent stabilization ordinance. It's definitely not blindsiding us. We all knew it was coming. So I would honestly be more supportive of it going to the reserves, but I also want to make sure that we are not approving an ordinance and scheduling a program launch without the required funding.

We would not do that. We would make sure, you know, obviously we've gotten strong council direction to implement this, so we will We'll make sure that we have the costs necessary to do it properly.

Okay So for the public that has questions or concerns about this or want to give input July 28th would be the time to also talk about the costs and the structure of the program all that Okay.

Thank you so much.

Mr. Friedman Thank you, mr. Mayor just a few questions following up on slide 20 So we talked about the projection for fiscal year 26 is twenty seven point nine million and and the actual reserve level is 26.8, but it's the number below that in red that we also have to keep an eye out, correct, Mr. Demartini?

Yes.

Okay, and so that difference is the difference of us not, as our budget grows, not funding the additional growth in the reserve. That's where that grows from 25.2 to 29.9.

Yes, Council Member Friedman, that's correct. And this table here really represents like a snapshot in time on the status of our general fund reserves. And as I've shown on the prior couple of slides, we have had general fund operating deficits the last three years. Those deficits have a compounding effect on the actual cash we have in reserve. That's why the difference, the numbers in red there, are growing each year because we've had operating deficits each year. And all the while, our general fund reserve policy target is growing because our expenditure budget is growing. So those are the two effects as to why we're at approximately $30 million below the reserve policy target by the end of fiscal year 2027. Thank you.

And this is for either Ms. Maggiore or Mr. DeMartini. In terms of expenditures that are projected will stay out in the 28 forecast because that red line continues to grow significantly. Are there additional labor negotiations that are just coming up in the regular cycle that are counted in here or if there was any in this coming fiscal year, are there any labor negotiations?

We are finalizing the last of our groups. So we have the general unit hourly and the supervisors group and We have accounted for that as well as, as we've mentioned, additional increases as a result of implementing the classification and compensation study. And so there are no additional negotiations next year. It will be the following budget year. This is sort of where we think we need to be focused and we'll be continuing to work on the list of 200 ideas as well as others to help work on those budget balancing measures.

Thank you for that clarification because it's extremely important to understand that those potential changes through the labor negotiations are already accounted for in the expenditures. Whereas in previous years it's been difficult because We haven't been able to account for those because there wasn't the council appropriations at the time and you can't really release those when you're in negotiations because then everybody would see what they are. And then the other question is, in terms of the 200 recommendations, those came to finance and then came to the full council and then That is the basis on how staff was able to close the operational gap? Is that a majority of it or is that?

the primary driving force behind it? It was a start. I mean, we have not even, I don't think, scratched the surface of implementing the 200 ideas. There was some really easy low-hanging, not, I wouldn't say easy, there was low-hanging fruit that we were able to do to be able to get to the $10 million. But again, as you've heard, like the, you know, using, you know, transferring the UET and reducing the paving budget, you know, that is not a long-term fix. And so we definitely need to go back and make sure that we are looking at ways to reduce other expenses so that we can restore those, and make sure we have a balanced operations budget, but also a balanced capital budget so that we have enough money to do sort of the minimum things we need to do.

So to follow up two questions, out of the 200 recommendations that are out there, are there any that we could prioritize? And I know there would only be a week to do that, that we could identify that could close the gap, either the black line on the actuals or the difference that could come up with, say, a million or two that we could front load that are out there that you might be considering doing in the fall that we might be able to consider next week as additional cost savings revenue?

I would not. There's nothing we could do by next week. I mean, I think we've tried to move forward and expedite the ones that we can. I think that's what we're... like why I've said precariously balanced, because I think we just need some time to be able to, there's policy decisions we need the council to make. These are not going to be easy conversations, and so it's a discussion that we need to have with the council.

If I may just add to that too, the city administrator's recommended budget includes the plan to implement many of those tier one items, and I believe it's projected savings of around $3 million. So the budget before you includes staff continuing to work on many of those Tier 1 items over the course of the fiscal year, achieving that level of savings. So what staff believes we can work on, it's already baked into the budget.

So the $3 million is part of that?

Yes, it's part of the recommended budget that we released in April.

Okay, perfect. So we would continue to do that over the course of the next year? And that's why it's important, it's a multi-year trying to reduce how far we're going into reserves to get us stable, which we're getting there, but we're not quite there yet. But then the out years in 28 and 29, especially when measure C comes, the additional expenditure on measure C comes out, that gives us more flexibility on that with the police station. And so that's what we're really looking at is that opportunity in fiscal year 28. Is that correct? Correct. All right. Thank you. That's all I have for today. Thank you.

Ms. Schneiden.

Thank you, Mayor Ross. I would add to that on this slide that it goes down the 1 million, but then the 2028 forecast has it go down additional, you know, 10 million or more. And so if this measure C, if this is a long-range plan, which I believe it is, the 200 and the tiered approach, and we're looking years out for the plan, then I would expect the 2028 forecast to show level reserve level. So like measure C, we've talked a lot about it. Like it's used in cash now, it's used this way now, but two years out. it's going to be available for this or for that. But I don't see it reflected in the table. So it would help, I think, us accept that we may be a million off on the reserve level voting next Tuesday or when we come back. But I just struggle to see how these tiers implement when that number goes from 26.8 down to 18.9.

And that's because expenses are continuing to rise. And so we will need to come back. And I mean, that's what we're hoping to accomplish with implementing more of the list of 200 is to address the 2028 forecast. We have not started work on that because we've been focused on 2027. you know, basically after the budget gets adopted, we will start working on the 2028 deficit.

I just want to thank you for that, but emphasize that the list of 200 isn't going to get us there.

It may not. I mean, and that is where we may have to come back and the council may have to have additional hard conversations that... will be challenging. So I think that I'm just being very honest with the council. Appreciate it. So we are going to try to, and part of, you know, and I think we have to be, one of the things that we have talked about is, you know, eliminating positions through attrition and not laying people off, but that takes time and it takes bridging. And so, you know, we could go ask all employees to take a reduction in pay and benefits. or we can strategically eliminate positions, but we can't not do, we can't choose, like, we can't not do something. Like, and I recognize, you know, the added workload. We're all facing added workloads, you know, as positions are not filled or held vacant. But there's a balance to be struck. You know, we can't, you know, we can't, you know, not take reductions and then attempt to balance a budget. So I think I just want to be very honest with the council about that. I am working to look at ways that are minimizing impacts to employees who are currently employed in terms of their paycheck, the amount that they are taking home, their ability to maintain a life here in our community. But that may mean, sorry, we all have to maybe take on a little more work as positions are being held vacant to generate savings. Okay.

I appreciate the discussion and I think all of us feel like being honest and straightforward and meeting it head on is the only way to address this. So I appreciate that. And of course this is the slide that is so troubling. to show that and then you know that we get down to on other ones from April 9th you know it shows us going down to 0% reserves in 2028 forecast so obviously we all think it's unacceptable that we go there so our goal we will not let it get there that we cannot so we will have to continue that conversation obviously thank you

All right, very good.

Mr. DeMartini, to refresh my memory, where our final dispensation was on the local housing trust fund, how much is it and what is it comprised of?

Okay, so the – thank you for staying here with me for this one. The action that council took last week was to give staff direction to find a million dollars out of measure C to transfer into the local housing trust fund. Staff is recommending if that is to continue to allocate the $1 million from the Casa Cacique project. Right now in Measure C, there's a $2 million item for Casa Cacique in fiscal year 2027. We are now recommending to bring that down to $1 million. So that's the project that we've identified to reduce funding for so that we can transfer that into the local housing trust fund. Does any of that go back into reserves from the appropriation for the previous year? Is that the same dollars or is that different dollars? No, that is fiscal year 2027 measure C appropriation.

Okay, but it's a general fund appropriation, right?

Yes, measure C is a general fund source, correct, yes.

All right, very good. And we're also taking $2 million out of measure C to replace the UUT that's going into general fund, is that correct?

Yes, that's correct.

So we're now $3 million down on measure C for? Non-capital? Yep. All right, very good.

I would say that the Measure C that's going to UT is going for capital. It's going for streets. It's just paying for our internal crews that do street paving versus contract crews. No, I understand. It's still a capital expense. It's just in the operating budget.

One of our selling points is Measure C, and the faith of the public was we'd had these UUT dollars all these years, and we never broke into them for streets. And so we are, and I realize that you put a temporary on that, which hopefully that's the case, but all right, very good.

So moving forward. Yes, Mayor Rouse, if we can go back to the items before you today. We are still asking council to make a motion and second staff's recommended adjustments, which again, these are the very small technical adjustments to the budget, so that we can include that in the presentation for you next week.

So moved.

Move by Sneddon, second by Harmon. And if there are parts, for example, the ones I just brought up about how we could create a local housing trust fund, is there a way to break that out for a separate vote?

Yes, Mayor Rouse, that is possible. So that would be a separate motion that you or a member of council could make today. That would be separate from what council is doing with item A here. So if the mayor or the council wanted to do that today, you could direct staff to create a separate resolution that we would bring to you next week for budget adoption. So there would be multiple resolutions. The first resolution would be to adopt the budget, excluding a specific item, such as what you were referring to, Mayor Rouse, the Measure C allocation into the Local Housing Trust Fund. There could be a separate resolution that would effectuate the transfer from Measure C into the Local Housing Trust Fund. And then both resolutions could be voted on separately. And in totality, that would effectively create the adopted budget for fiscal year 2027.

Correct. So that we could have, as opposed to a split vote.

So you could have different, you could have multiple resolutions to vote on separately.

You could do that. And Mr. Dormas, to do that, would I create now then a substitute motion or... addendum. There's a motion on the floor.

That one is just for the staff recommendations. So that's the minor technical adjustments. I would do that one separately if you wanted to have a separate resolution on the local housing trust fund item.

Very good. Motion and a second. Further discussion on the motion?

Mr. Jordan.

Well, the lecture I heard earlier was a that we start paying attention to that reserve policy paragraph. So to me, you actually have those A, B, and C out of order because you're asking for an approval of the recommended budget before you're asking for that reserve policy action that would allow you to make that recommended budget approval.

So we're not actually recommending the budget approval. This is just simply the staff adjustments. Okay. So that we're all splitting hairs on that then. OK. This is not the overall budget. Fair enough. OK. Yeah. In the in attachment one attachment one. Yes. Which is the technical minor adjustments. So it's not the overall budget. Sorry. Sorry to interrupt.

OK. Further discussions on the motion.

All right.

Mr. Clerk.

All right, I have a motion from Council Member Sneddon and seconded by Council Member Harmon to approve the recommendations as made by staff. Go ahead and vote, please.

Pass unanimously, thank you.

Now, a separate motion. I'd like to move the resolution per the discussion we just had with Mr. DeMartini Revisit those issues about the local housing trust fund the transfer of general fund revenues into the local housing trust fund second second by Friedman Mayor mayor else may I please get clarity on the motion in the city administrators recommended budget it includes a

a $1 million transfer of general fund reserves into the local housing trust fund. Right. Okay. What was decided last week was a transfer of $1 million from measure C into the local housing trust fund is your most motion referring to both of those transfers or just, yes, both of those transfers.

Now is, is that was the question I asked before about the composition. the exact composition of the local housing trust fund as it stands today. That's why there's the confusion.

So what I'm understanding is that you would like to basically have a separate, when we bring back the budget next week, a separate resolution that would separate out the transfers to the local housing trust fund so that the council could vote separately on that so that there'd be, a resolution on the overall budget, and then a second resolution that would simply be the appropriations to local housing trust fund.

Correct. So it's not revisited?

No, it's not revisited.

It's a separate motion altogether. It's a procedural motion to have two separate resolutions for next week.

Right, to discuss the construction of the local housing trust fund and the preliminary funds were, and or not, take funds from certain funds. Yes.

Yeah, I would add it's basically giving council options next week of resolutions. That's the way to look at it.

We just want clarity so we can craft that resolution accordingly. And so if you refer to this slide, this is the makeup of the money going into the local housing trust fund. And so we just want clarity as to what specific transfers we need to include in that separate resolution.

Correct.

So is it the $1 million from the reserves and also the additional measure C money going in? Okay, so it's a total of $2 million.

That's what the council had given us direction on.

We're not re-voting.

No, we're not re-voting on that. We're not re-voting on local housing trust fund. This is simply to have a separate resolution next week. So we separate out the main budget resolution. I think that is the mayor's ask is the main budget resolution and then a separate resolution. on the $1 million from reserves and the $1 million from Measure C to local trust fund.

All right. So, motion or second on the floor? Did you have the motion, Mr. Clerk?

I do. I have a motion from Mayor Rouse, seconded by Councilmember Friedman, to have a separate resolution brought to council regarding the transfer of funds to the local housing trust fund. And vote, please. Yes, it was to have a separate resolution brought to council regarding the transfer of funds to the local housing trust fund.

It would be separate from the main budget resolution.

Oh, I guess we're all voting.

We are voting, yeah. Do you have something else?

On the motion, yeah.

Well, we're voting, so a little late.

I'm not locked in yet.

I'm not locked in either.

All right, everybody take your votes down. Ms. Sneddon.

Thank you, Mayor Ross. I appreciate the effort here, but the budget is a holistic item, and then there would have been different ones that I voted no on within the holistic budget that I could pull out separate and say this is why or this is why. So I just wanted to explain why I think when it's a holistic budget, we're all different. giving and taking all throughout the whole conversation. And so pulling one thing out, I'm just not in favor of it because there are other things.

You're welcome to do another resolution like we did. The idea was that we would like to not go like we did last year and have a split vote on the entire budget. We'd like to be able to be part of our administrator's budget. And there are certain items that just aren't going to be tolerable. So if you want to do so, you may, but this is what the solution is. Mr. Jordan.

All right. So walk with me here. I had a bite at this apple once already, right? We voted on this last week or the week before, right?

Correct. As a council. We actually took a vote.

Correct. Right. Okay. So I have the same concern. I mean, I'm not going to vote, again, no on the entire budget on something I'm in the minority on any component of the budget. But you're asking, the motion's asking me to redo that vote again that I already took.

No, it's not asking you to.

Not an approval on, it's to cast my displeasure on that being part of the budget.

Correct. It's basically to, well, it's to remove it from the overall budget adoption. A Jordan lizard brain kind of wording. So you can vote separately on that. Okay. All right.

Clearly understand that now. Thank you.

Okay. Ms. Harmon.

THANK YOU. I COMPLETELY AGREE WITH MY COLLEAGUES IN THE SENSE THAT IF YOU VOTE YES ON THE BUDGET AND THEN NO ON THIS RESOLUTION, IT'S A BIT HARD TO SQUARE THAT CIRCLE BUT BY THE SAME TOKEN, WITH SOME some great regularity, one of us will request to separate out a piece, some element of an ordinance or some element of a decision because they don't wanna vote no on the whole thing, but a specific piece doesn't sit well with them. And so while I agree, there's no practical implication to separating this out and voting yes on the budget from a perspective of collegiality. Personally, I will support giving my colleague the opportunity to voice his displeasure.

Thank you. Ms. San Maria.

Thank you, Mayor Rouse. I'm a little torn on this, to be honest, because I really am trying to have us all consider the budget, as one of my colleagues mentioned, just holistically. However, if we if it's okay with folks to pull these items out so that we can really vote our conscience, I guess you could say, I think that could be appropriate. And if that's what we're going to do, then on that same token, I heard recommendations from the public that as a way for us to achieve additional savings that we I would want to then ask that we separate out from the final budget vote the unfreezing of two police officer positions. One makes sense to fund because There are already people in the academy in line in the queue. But the other two could help us if we just keep them frozen one other year. It could help us achieve cost savings. We can put it in the reserves. And, I mean, we didn't even cast a vote on it last time. So I would much rather have this as a separate thing than having to... approve everything. So I think in the spirit of collegiality, sure, let's pull both of those items out.

So what I would recommend is there is a motion on the floor voting on that, and then Council Member Santamaria, if you'd like to make a motion to have a separate resolution on that item, we can consider that as a second motion and have direction to bring it back as a separate resolution as well. I think there is a motion on the floor regarding pulling out the local housing trust fund items into a separate resolution, and then we can come back for Ms. Santamaria's recommendations.

It is, because I think it will make a difference for me. Is everyone going to have something they want to pull? If there's going to be like 300 separate resolutions, that changes my willingness to be collegial, Mr. Mayor.

I haven't heard it so far.

Well, I'm seeing nodding heads that everyone has something they want to pull.

Okay. Thank you. Cause this is the work that was normally done during the budget season before. And unfortunately we've pushed it all at the last moment here. Can't really say why, but, um, usually the day, the day of the adoption is just a walk over. So hopefully we can get there. Well, let's go to the motion. We saw on the floor now, Mr. Clerk, would you please repeat the motion so that we know exactly what we're voting on?

Yes. I have a motion from mayor Rouse seconded by council member Friedman to have a separate resolution. brought to council regarding the transfer of funds to the local housing trust fund.

All right, the motion fails with three three and one abstention. That's always fun. All right, motion fails. Anything else?

Yes, Mr. Mayor. I'm bringing just to Ms. McAdoo mentioned I could make a motion for the item that I wanted to pull out. So I would like to make a motion to separately consider keeping two frozen police officer positions frozen and unfreezing one of them to slowly start to build up to full staff capacity.

There's a motion on the floor. Ms. Nedden?

Just to the motion, my reason for not supporting the previous one is because we already discussed each and every one of these decisions, and each one had a majority and a minority, and so to not have all of the individual ones pulled out with the give and take, that's why I didn't support the previous one.

All right. Is there a second? Okay. Motion dies for want of a second. So with that,

I think there are two more items on the recommendation we just need direction on. I think, B, we've gotten final direction. I think the last is that we do need to have a resolution just for next week that we will bring back saying we are out of compliance with our reserve policy, and we can craft that motion and resolution. Ms. Sneddon?

Thank you, Mayor Rouse. Can part of that be the actual timeline for when the discussion will go to finance?

We can include a timeline for the Finance Committee discussion in that resolution.

I think that would be really important. Thank you.

All right. So, motions? So moved. Moved by Harmon. Second. Second by Jordan. And the motion reads, Mr. Clerk.

Okay, I have a motion from Council Member Harmon, seconded by Council Member Jordan, to provide direction to staff regarding the draft resolution of the Council of the City of Santa Barbara regarding the FY2027 budget being out of compliance with Resolution No. 23-124, the Policies for Reserves, and including a timeline for finance committee discussion.

Go ahead and vote, please.

I think that's all we need direction on today, and we will bring back budget adoption next week, and thank you all for it.

All right, thank you.