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061819-council-meeting

Santa Maria City Councilmen Dr. Michael Moats, left, and Mike Cordero listen to City Manager Jason Stilwell during Tuesday's meeting.

The Santa Maria City Council voted Tuesday to adopt budget amendments that would expand the city’s staffing with dozens of new employees and establish Sunday hours at the library.

The 2019-20 budget amendments, which were approved unanimously, call for 57 new positions, 36 of which will be funded through the use of Measure U sales tax revenue.

In November 2018, voters approved raising the Measure U sales tax from a quarter-cent to one-cent, leading to an additional $13 million in annual funds. The new rate went into effect on April 1.

Aside from the 36 new positions, Measure U will provide funding for 89 existing positions for the city.

The new positions account for the largest one-year staffing increase in Santa Maria’s history, said City Manager Jason Stilwell. Over the past five years, the city has added an average of six new positions each year.

Of the Measure U-funded positions, 15 will be in the Police Department, 13 in the Fire Department, four in the Recreation and Parks Department and four for the Santa Maria Public Library.

The additional staffing will enable the library to offer Sunday hours for the first time, said Mark van de Kamp, public information officer for Santa Maria.

Stilwell said the city is looking to fill the positions immediately.

When filled, the new positions will bring the city’s staffing to 649 employees — 570 full-time and 79 part-time.

Due to the growing number of positions maintained through Measure U revenues, general fund appropriations will decrease by $4,481,959 — or 5.86% — over what was approved by the City Council last summer.

While the Measure U rate increase has brought millions more in annual revenue to fund services, Stilwell said the city’s pension costs with CalPERS continue to skyrocket. CalPERS manages the pensions for most California public employees.

“The elephant in the room really is CalPERS,” Stilwell said.

For 2019-20, the city’s estimated CalPERS obligations amount to $17.6 million, up from the $13.2 million paid for in 2018-19

“To put that into perspective, back in 2006-07, the city contributed $5.4 million to CalPERS,” Stilwell said, adding that the CalPERS obligations will continue to increase through 2024.

The primary drivers of increased costs have been CalPERS not earning the rate of return it needs to hit its investment targets and a change in amortization from 30 years to 20 years, Stilwell said.

The change in amortization is analogous to moving from a 30-year mortgage to a 20-year mortgage, Stilwell said.

When cities aren’t able to pay their CalPERS obligations, they are placed into the “terminated agency pool” or TAP fund, which would likely mean steep reductions in benefits paid out to retirees.

Councilwoman Etta Waterfield said the city will have to budget carefully to ensure the city’s not caught off-guard by a change in CalPERS policy that could result in large unexpected financial obligations.

“The pendulum is always going to move — we can not rely on Sacramento, CalPERS to give us true figures because that’s always a moving target,” she said. “I know a lot of people don’t like the word ‘frugal’ but we’re going to have to stay that way. It would be devastating not to be able to give our employees the retirements that they worked so hard for.”

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Razi Syed covers Santa Maria City Government for Lee Central Coast Newspapers.  Follow him on Twitter @razisyed

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City Government

Razi Syed covers city government for the Santa Maria Times. He is a graduate of Fresno State University and New York University.