For more than a decade the City of Lompoc operated with scant reserves. It dipped into its operating reserve in 2012, discussed filing for bankruptcy in 2017, and reached the brink with the 2020 pandemic.
On Tuesday last week, council members discussed how to stash or spend an unprecedented reserve.
“I’m very excited to hear that we have cash to decide how to best save for the future and potentially build stuff,” Mayor Jenelle Osborne said.
According to Lompoc Management Services Director Christie Donnelly, the fiscal year 2021-22 audited Annual Comprehensive Financial Report showed an ending unassigned fund balance of $17.8 million. This balance is partly attributable to one-time revenues and adjustments, including $8.8 million related to the American Rescue Plan Act (ARPA) second and final drawdown.
“I am thrilled to be able to have this discussion as well, just the fact that there is money to consider, and my desire is that we would be wise in that consideration,” she said.
The council unanimously passed two resolutions to address long-term city infrastructure needs and to build general fund reserves.
The first resolution shuffled $4.8 million into the Economic Uncertainty Restricted Cash fund. That move brought the fund balance to $6.8 million, the 20% operating cost reserve called for in city policy.
Donnelly said the city has been below that reserve since about 2012.
She added that governmental accounting best practices called for reserves to reach a balance of three months, or 25% of annual operating expenditures. Staff will return to council for consideration of a city policy change in that direction in the near future.
The second resolution transferred $8 million to the Capital Development Special Revenue Fund, and assigned 50% of that specifically for a building replacement reserve.
Lompoc City Manager Dean Albro calls for a transition from emergency sheltering to transitional shelters and services to help the homeless find permanent solutions.
“We haven’t had a building replacement reserve until now, but I do think this is the time for us to consider that. We have aging buildings, specifically the fire station and the police station. …The city has talked about replacing these in the future. If we don’t start saving for that, the future is just going to keep getting kicked down the line,” Donnelly said.
She added the city does not have enough in reserves to finance any such buildings at this time, but the resolution would be a start toward building such a reserve to leverage.
“When there is no money, the ability to build something is a dream. When there is some money, we can start working toward those dreams,” Donnelly said.
The city will take public input on spending and savings plans at its upcoming public budget workshops before council members consider the next budget.
“Really, we’re asking for a strategic plan for the future,” City Manager Dean Albro said.
Council members and staff also offered words of caution.
“I think it’s very important for us to understand that Lompoc is still very much in a very critical state. Economic development still needs to be a priority because, you’re right, we’re not going to get to do this every year if we’re not working our community. We’re still seeing a lot of businesses that have shut down,” Council Member Gilda Cordova said.
In other action, the council unanimously adopted zoning code amendments to align with state law related to accessory dwelling units and junior accessory dwelling units.
In 2016, state legislation passed forcing local jurisdictions to allow accessory dwelling units. At the time, the city was going through a comprehensive update of its zoning code. Since 2020, another dozen or more bills have been passed updating state regulations.
Lompoc Planning Manager Brian Halvorson said the city update includes:
- removing parking requirements for ADUs for any project within half mile of a transit stop;
- allowing ADUs to be sold separately from the primary residence in specific situations such as ownership by nonprofit organizations;
- allowing junior ADUs up to 500 square feet;
- increasing from one to two the number of ADUs allowed per parcel;
- reducing rear and side property line setbacks from five feet to four feet;
- increasing the allowable height of the ADU to match existing zone restrictions;
- allowing processing of ADU projects even if the applicant’s property is out of conformity with code enforcement;
- eliminating development impact fees for ADUs of 750 or fewer square feet; and
- reducing from 120 to 60 days the allowable processing period once city staff deems a project application complete.
In addition, he said the state requires local jurisdictions allow development of ADUs of at least 800 square feet regardless of some local standards.
“Let’s say it’s a lot where there’s no room on the property to meet the development standards, like the front yard setback, there’s no room in the back. They can actually put the ADU in the front, and they need to be allowed to have at least 800 square feet even if it doesn’t meet the front yard setback,” Halvorson said.
The council also voted unanimously to take no action on a proposed amendment to the city’s general plan and zoning code which could have allowed cannabis distribution in the Planned Commercial Development Zone. Council members sited a lack of city resources to invest in making the change, particularly in light of a lack of any business expressing interest in such use of those zones or any apparent public interest in making the change.
