As Santa Barbara continues its upward climb out of the Great Recession, civic leaders are working hard to make sure the city remains a hub for startup businesses and tourism.

City Administrator Jim Armstrong told a crowd of business leaders gathered at the Fess Parker Doubletree Resort on March 21 that despite the economic downturn, the city has posted budget surpluses for the past four years. “The city continues to be in good shape,” Armstrong said at the 13^th annual State of the City breakfast.

Armstrong reported that the city has $22.4 million in the city’s general fund reserve, along with “healthy” reserves in other areas, such as funds for the airport and downtown parking structures. He said the city has coped with the recession by reducing the size of its workforce, instituting wage and benefit concessions, and privatizing some public facilities. While some services have been impaired as a result of those changes, Armstrong said the city’s income from sales and bed taxes is starting to rise. “I’m confident I’ll be able to present a balanced budget next year,” Armstrong said.

Santa Barbara Mayor Helene Schneider told the group that while the city is not an exception to the effects of the nation-wide recession, she’s “cautiously optimistic” about the South Coast’s business environment. “We have a common passion — exceptional quality of life,” Schneider said.

The city is doing its part to support economic vitality, Schneider said, by instituting programs to attract — and retain — companies and employees to the area. She said the city’s small-town ambience and high quality of life make it attractive to startup companies, especially high-tech entrepreneurs, but those same factors make it expensive for professionals to live in the area. The city can’t solve those problems by itself, Schneider said, “but we’re committed.”

A few significant efforts to develop and retain businesses have hit their stride in the last year. The Synergy Business & Technology Center near the city’s Funk Zone neighborhood is thriving, and Workzones, a drop-in workspace in Paseo Nuevo, recently opened its doors. Additionally, Startup Weekend Santa Barbara is returning to the city in November.

On the tourism front, there’s been an influx of new and remodeled hotels in the last year. El Encanto has re-opened in the city’s Riviera neighborhood and the La Entrada project on lower State Street is making headway, among other hotel projects.

“We’re making sure Santa Barbara doesn’t lose its luster,” Schneider said.