For the city of Santa Maria, sustainability and growth are tied together.

Last month during the UCSB’s North Santa Barbara County Economic Summit, Santa Maria City Manager Rick Haydon said just that. During his presentation, Haydon said because of rising costs and unfunded state mandates, like California’s Fair Wage Act of 2016 that will raise the state’s minimum wage to $15 per hour by 2021, Santa Maria needs to grow its property and sales tax base.

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The city of Santa Maria only gets a small portion of property tax funds, according to Rick Haydon, city manager. 

What might the city look like in the future?

“To provide additional services you really need to find additional tax base,” said Larry Appel, Santa Maria Community Development Department director.

Appel’s department encompasses the city’s planning and building divisions.

The city of Santa Maria’s main funding sources are property and sales tax revenue. The city gets about 10 percent of the 1 percent of assessed value residents pay in property taxes, with the rest going to the county and the state. The city gets about 15 percent of money collected by sales tax.

Because of the city’s dependency on those revenues, residents may see the city grow into many mixed-use communities that include both residential and commercial grouped together.

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A breakdown of the Santa Maria's general fund revenue sources, provided by City Manager Rick Haydon.

The upcoming Enos Ranchos development, planned for Betteravia Road near Highway 101, will be a source of future property and sales tax revenue. It will include residential spaces, a school, a park and a new home for Costco and other businesses, including a Chick-fil-A.

“The city has to provide services for everyone," Appel said. "By far, the most used services are for residential uses. Police, fire all of the emergency services get a lot more calls to residential properties than they do to commercial or industrial. It wouldn’t make sense just building houses. It wouldn’t make any sense based on the amount of money we would get back.”

As to what direction the city could grow in, Appel thinks Santa Maria will move to the east.

“We think it is most logical to move east from the city right now," he said. "We have the 101 running at the side of our city. Most cities have a freeway in the middle so they can take advantage of the transportation corridor from both sides. If and when we do expand, it is most likely we will be going to the east.”

Santa Maria is landlocked.

“We can’t grow north because of the river. We can’t grow south because Orcutt is already developed,” Appel said.

The Local Agency Formation Commission, a state-created entity which exists in every county in California, was formed to work with citizens, counties, cities and special districts on annexation and jurisdictional issues.

LAFCO officials told city leaders some time ago that it doesn’t want Santa Maria to grow east or west to preserve agricultural land.

“To move to the east of the freeway, there is really no set pattern for how quickly that would happen,” Appel said.

It could be a long time before Santa Maria has to expand its borders, but when it does it will have to work with LAFCO and the county. Appel said future city expansion and potential agricultural land loss would balance out.

“Growth is all based on the economy,” Appel said.

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This chart depicts how much the city of Santa Maria earns from sales tax, according to City Manager Rick Haydon. 

The city has a lot of space in its current boundaries it can fill if the economy moves in that direction. Santa Maria also has vacant buildings that need to find new life.

When the Enos Ranchos property is complete, the current Costco building will be empty.

Appel said he and his department will be available to help the building’s owner find a new tenant or tenants.

“I think what might happen, if he can’t find someone that will take the entire building, he’d work with us to do a tenant improvement that would allow a separation of the building to two or more spaces,” Appel said.

When it comes to new housing, Appel said the city is open to a lot of plans.

“We have a full range of zoning options,” he said.

The city is pro-growth and is ready to welcome the development the city needs to increase its tax base, he added.

Though the city may be ready, it can't force developers to come to Santa Maria. 

Logan B. Anderson covers city government in Santa Maria for Lee Central Coast Newspapers. Follow him on Twitter: @LoganBAnderson.

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