By Lookout Staff

June 18, 2010 -- The City Council on Tuesday approved a $553.6 million budget for the 2010-11 fiscal year. This includes $255.1 million in General Fund spending. Although the City is facing a structural deficit due to spending costs outpacing revenues, Santa Monica officials were able to make adjustments by what City Manager Rod Gould last month referred to as “using a scalpel and not a meat axe.”

Employee layoffs and major program cuts were not part of the budget. They have been involved in the financial decisions for many other Cities in California.

The City is facing a $13.2 million deficit for the upcoming fiscal year. It is bridging that gap through the use of reserve funds and money remaining from a budget surplus for this year as well as increased fees for certain municipal services .( See articles Budget, May 28, 2010 and City Council to Vote on Budget Continue LUCE Hearing, June 15, 2010.)

Although the City was able to cover its deficit this year without any major adjustments, it will likely not be able to do this in future years. The structural deficit is expected to continue for several years. Gould warned the council that the City will have to continue looking at other ways to tackle this situation. One of those methods could be City employees sharing the burden of rising pension and health care costs. Cost sharing is currently being negotiated between labor groups and city management.