REVISED 3/6/2024 2:30 PM
City of Capitola
Special City Council Meeting Agenda
Wednesday, March 06, 2024 – 4:00 PM
City Council Chambers
420 Capitola Avenue, Capitola, CA 95010
Mayor: Kristen Brown
Vice Mayor: Yvette Brooks
Council Members: Joe Clarke, Margaux Morgan, Alexander Pedersen Special Meeting of the Capitola City Council – 4 PM
All correspondence received prior to 5:00 p.m. on the Tuesday preceding a Council Meeting will be distributed to Councilmembers to review prior to the meeting. Information submitted after 5 p.m. on that Tuesday may not have time to reach Councilmembers, nor be read by them prior to consideration of an item.
1. Roll Call
Council Members Joe Clarke, Margaux Morgan, Alexander Pedersen, Yvette Brooks, and Mayor Kristen Brown.
2. Additions and Deletions to the Agenda
3. Additional Materials
Additional information submitted to the City after distribution of the agenda packet.
A. Item 6A - Correspondence Received
4. Oral Communications by Members of the Public
Oral Communications allows time for members of the Public to address the City Council on any “Consent Item” on tonight’s agenda, or on any topic within the jurisdiction of the City that is not on the “General Government/Public Hearings” section of the Agenda. Members of the public may speak for up to three minutes, unless otherwise specified by the Mayor. Individuals may not speak more than once during Oral Communications. All speakers must address the entire legislative body and will not be permitted to engage in dialogue. A maximum of 30 minutes is set aside for Oral Communications.
5. Staff / City Council Comments
Comments are limited to three minutes.
6. General Government / Public Hearings
All items listed in “General Government / Public Hearings” are intended to provide an opportunity for public discussion of each item listed. The following procedure pertains to each General Government item: 1) Staff explanation; 2) Council questions; 3) Public comment; 4) Council deliberation; 5) Decision.
A. Fiscal Year 2024-25 Budget Principles & Goals
Recommended Action: 1) Review budget principals; 2) Review progress and status of Fiscal Year 2023-2024 budget goals; 3) Provide direction to staff regarding potential amendments to Fiscal Year 2023-24 Budget; 4) Prioritize goals related to key projects/programs for Fiscal Year 1 Special City Council Meeting Agenda – March 06, 2024
City of Capitola Page 2
2024-25.
7. Adjournment - Adjourn to the next regularly scheduled City Council meeting on March 14, 2024, at 6:00 PM.
_____________________________________________________
How to View the Meeting
Meetings are open to the public for in-person attendance at the Capitola City Council Chambers located at 420 Capitola Avenue, Capitola, California, 95010.
Other ways to Watch:
Spectrum Cable Television channel 8
City of Capitola, California YouTube Channel
To Join Zoom Application or Call in to Zoom:
Meeting
link: https://us02web.zoom.us/j/83328173113?pwd=aVRwcWN3RU03Zzc2dkNpQzRWVXAydz09 Or dial one of these phone numbers: 1 (669) 900 6833, 1 (408) 638 0968, 1 (346) 248 7799 Meeting ID: 833 2817 3113
Meeting Passcode: 678550
How to Provide Comments to the City Council
Members of the public may provide public comments to the City Council in-person during the meeting.
If you are unable to attend in-person, please email your comments to [email protected] and they will be included as a part of the record for the meeting. Please be aware that the City Council will not accept comments via Zoom.
Notice regarding City Council: The City Council meets on the 2nd and 4th Thursday of each month at 6:00 p.m. in the City Hall Council Chambers located at 420 Capitola Avenue, Capitola.
Agenda and Agenda Packet Materials: The City Council Agenda and the complete Agenda Packet are available for review on the City’s website: www.cityofcapitola.org and at Capitola City Hall prior to the meeting. Agendas are also available at the Capitola Post Office located at 826 Bay Avenue Capitola. Need more information? Contact the City Clerk’s office at 831-475-7300.
Agenda Materials Distributed after Distribution of the Agenda Packet: Pursuant to Government Code §54957.5, materials related to an agenda item submitted after distribution of the agenda packet are available for public inspection at the Reception Office at City Hall, 420 Capitola Avenue, Capitola, California, during normal business hours.
Americans with Disabilities Act: Disability-related aids or services are available to enable persons with a disability to participate in this meeting consistent with the Federal Americans with Disabilities Act of 1990. Assisted listening devices are available for individuals with hearing impairments at the meeting in the City Council Chambers. Should you require special accommodations to participate in the meeting due to a disability, please contact the City Clerk’s office at least 24 hours in advance of the meeting at 831-475-7300. In an effort to accommodate individuals with environmental sensitivities, attendees are requested to refrain from wearing perfumes and other scented products.
Si desea asistir a esta reunión pública y necesita ayuda - como un intérprete de lenguaje de señas americano, español u otro equipo especial - favor de llamar al Departamento de la Secretaría de la Ciudad al 831-475-7300 al menos tres días antes para que podamos coordinar dicha asistencia especial o envié un correo electrónico a [email protected].
Televised Meetings: City Council meetings are cablecast “Live” on Charter Communications Cable TV Channel 8 and are recorded to be rebroadcasted at 8:00 a.m. on the Wednesday following the meetings and at 1:00 p.m. on Saturday following the first rebroadcast on Community Television of Santa Cruz County (Charter Channel 71 and 2 Special City Council Meeting Agenda – March 06, 2024
City of Capitola Page 3
Comcast Channel 25). Meetings are streamed “Live” on the City’s website at www.cityofcapitola.org by clicking on the Home Page link “Meeting Agendas/Videos.” Archived meetings can be viewed from the website at any time. 3 1
Gautho, Julia
From: Santa Cruz YIMBY <[email protected]>
Sent: Tuesday, March 5, 2024 7:06 AM
To: City Council
Cc: [email protected]; Herlihy, Katie ([email protected]) Subject: [PDF] Input for March 6th meeting
Attachments: Santa Cruz YIMBY for March 6 - item 6a .pdf Follow Up Flag: Follow up
Flag Status: Flagged
Mayor, Vice Mayor and Council members,
Attached please find our input on Item 6A on your March 6, 2024 agenda.
Have a great day,
Elizabeth Madrigal
Ryan Meckel
Janine Roeth
Rafa Sonnenfeld
Santa Cruz YIMBY Leads
Santa Cruz YIMBY Mission: We envision a community where our neighbors of all ages, cultures, abilities, and incomes, can make Santa Cruz County their home. In response to the ever-increasing cost of living, we advocate for more affordable housing to meet the needs of our growing population.
Santa Cruz YIMBY is a chapter of YIMBY Action, a 501(c)(4) nonprofit organization. 4 Item 3 A.
5 Item 3 A.
1 Gautho, Julia
From: John <[email protected]>
Sent: Tuesday, March 5, 2024 6:36 PM
To: City Council; Gautho, Julia; Goldstein, Jamie ([email protected]) Subject: Regarding the Additional CWEP materials
Follow Up Flag: Follow up
Flag Status: Completed
Just some quick math
The council gave CWEP 250K and 75K of that was for the waverunner storage on the wharf.
In the most recent leƩer it appears CWEP has misunderstood that funding as they indicate they will be keeping 75K back for one year since the storage isn’t being built yet, but sƟll appear to think the city will be giving the 250K for the installaƟons they didn’t factor into their campaign and then another 75K at the later date.
But according to the council record and moƟon, the storage unit being postponed means the city is only giving CWEP 175K and will also be holding onto the 75K the city commiƩed to, the same as CWEP is.
With the increase in costs beyond our means on the WRP and the likelihood there will be more increases, I, who I’ll add donated $1013 to CWEP, suggest the city and CWEP consider a project scope within their and the city’s means.
If I misunderstood the CWEP leƩer and they do understand they only will be receiving 175K in city taxes at this Ɵme, please ignore this email (as you do my other advice).
Warmly JM
6 Item 3 A.
Capitola City Council
Agenda Report
Meeting: March 6, 2024
From: City Manager Department
Subject: Fiscal Year 2024-25 Budget Principles & Goals
Recommended Action: 1) Review budget principals; 2) Review progress and status of Fiscal Year 2023-2024 budget goals; 3) Provide direction to staff regarding potential amendments to Fiscal Year 2023-24 Budget; 4) Prioritize goals related to key projects/programs for Fiscal Year 2024-
25. Background:
General Budget Principles
As outlined in Administrative Policy III-3: Financial Management (Attachment 1), the City of Capitola prioritizes the following budget principal categories:
Fiscal Policy Principles
Maintain a balanced budget that ensures ongoing expenditures can be met with ongoing revenues
Use one-time revenues for one-time expenditures
Ensure the budget plans for future cost increases and attainable revenue projections Public Service Principles
Maintain, and improve upon, the transparency of City operations and accessibility of government
Recognize the high priority the community places on the public’s safety Analyze future service level increases with their long-term financial impacts to ensure financial stability
Public Improvement Principles
Maintain the City’s infrastructure by providing maximum funding for the pavement management system
Maintain and improve Capitola’s natural resources and sustainable green programs Ensure maintenance and cleanliness of City facilities, sidewalks, and streets Annual Budget
Each year the City prepares and adopts an annual budget. The annual budget drives the City’s operations and gives City Council direction to the City Manager regarding day-to-day functions.
The budget not only outlines the City’s financial plan but also establishes the framework in which the City will provide services to the community. Principles and goals identified in the budget establish metrics against which actual performance can be measured.
Attachment 2 outlines the status of the Fiscal Year (FY) 2023-24 budget goals.
Discussion: To ensure the prepared draft budget is consistent with the City Council’s direction, the City adopts budget principles and goals for each upcoming fiscal year. One important reason to adopt budget principles and identify key projects is to increase focus on the City Council’s 7 Item 6 A.
overall priorities and help to clearly articulate those priorities to Capitola residents and other stakeholders.
As staff begins preparation for upcoming budget years, both ongoing and one-time revenue along with employee bandwidth is considered. Attachment 3 is a financial projection model to provide information on ongoing revenues and expenditures. An estimated June 30, 2024 General Fund balance summary is provided in the table below.
FY 2022-23 City Council Goals $400,000
Employee Down Payment Assistance Program $100,000
Future Capital Improvement Projects
(allocated $369,000 to wharf Feb. 26, 2024)
$585,000
Operating Contingency Balance
(allocated $430,000 at mid-year Feb. 22, 2024)
$116,000
Total Fund Balance $1,201,000
Historic Fund Balance Target Level $500,000
Total Available Fund Balance $701,000
In past years, staff has provided a detailed list of formerly identified projects and goals, their status, and an additional list of potential projects to be added at City Council discretion. In the past, staff has recommended the City Council identify five or six key projects to include as priorities in the coming fiscal year. However, the City has several ongoing high-priority, high-effort, and high-cost projects underway that limit staff’s ability to start and complete new projects not previously identified. In addition to the projects underway, the City is in the process of labor negotiations with all employee groups, which will have an impact on both short- and long-term funding.
Attachment 4 shows current and upcoming potential projects organized by department, the required staff effort, and funding estimates and sources. The attachment also includes previously identified projects, shown in gray, which staff is not recommending for next Fiscal Year due to staffing and budgetary constraints.
If the City Council identifies additional priorities, projects or goals items included on the list may need to be paused or pushed to the next fiscal year or beyond. At the meeting, City Council may re-prioritize financial resources and staff time to accomplish new or different goals.
Fiscal Impact: The annual review of Budget Principles and key projects is the first step in the budget process. The Budget Principles clearly articulate the City’s financial management strategies. Staff will incorporate the City Council budget goals into the first draft of the proposed FY 2024-25 budget, at which time the City Council can prioritize the goals based on available resources.
Attachments:
1. Administrative Policy III-3
2. Status Report on FY 2022-23 & FY 2023-24 City Council Goals
3. Financial Projections
4. Current and Upcoming Projects
8 Item 6 A.
Report Prepared By: Chloé Woodmansee, Assistant to the City Manager Reviewed By: Jim Malberg, Finance Director; Julia Gautho, City Clerk Approved By: Jamie Goldstein, City Manager
9 Item 6 A.
ADMINISTRATIVE POLICY
Number: III-3
Issued: June 8,2000
Revised: March 14,2013
June 13, 2013
October 27,2016
Jurisdiction: City Council
FINANCIAL MANAGEMENT POLICIES
POLICY
The following financial policies (herein, the "Policies") assist the City with the management of its operating and capital budgeting processes and to standardize and rationalize the issuance of debt by the City. Updated policies insure the prudent use of the City's resources to meet its commitments, to provide needed services to the citizens of Capitola, and to maintain sound financial management practices. These Policies are guidelines for general use, and allow for exceptions in extraordinary conditions. The Policies serve their intended purpose if they stimulate an open debate about the City's operating and capital budget processes, existing and/ or proposed debt position, and they lead to informed decision-making by the City Council. In order to use the Policies properly, they should be applied in the context of the community's overall objectives and goals.
The Policies are divided into three sections: Capital Budgeting and Reserves, Operating Budgeting and Reserves, and Other Policies. j
A. CAPITAL BUDGETING AND RESERVES: ISSUANCE OF DEBT
1. CAPITAL PLANNING -IN GENERAL:
To enhance creditworthiness and prudent financial management, the City of Capitola is committed to systematic capital planning, intergovernmental cooperation and coordination, and long-term financial planning, and implementation over a two-year period. Evidence of this commitment to systematic capital planning will be demonstrated through adoption of an annual review of the City's five-year capital improvement budget.
2. USE OF LONG-TERM FINANCING METHODS:
Major capital improvements or acquisitions valued over $250,000 may be made using long-term financing, methods, rather than out of operating revenue. The prioritization of capital projects eligible for debt financing is accomplished through a "needs assessments" undertaken in the formulation and development of the City's five-year capital improvement budget.
3. FISCAL ANALYSIS:
The City will require each capital appropriation request to include a fiscal analysis that identifies the amount of funds requested, the source of funds requested and the impact of the request on existing revenues and operations.
4. ASSET LIFE:
The City will consider long-term financing for the acquisition, maintenance, replacement, or expansion of physical assets (including land) only if they have a useful life of at least five years. City debt will not be issued for periods exceeding the useful life or average useful lives of the project or projects to be financed. 10 Item 6 A.
Administrative Procedure III-3
Financial Management
5. CAPITAL FINANCING -IN GENERAL:
The City will rely first on internally generated funds and/or grants and contributions from other government sources to finance its capital improvement needs. Capital improvements will be financed through user fees, service charges, assessments, special taxes or developer exactions so long as the benefits the City will derive from such improvements can be attributed to the users of the improvements. Moreover, the City will specifically consider the costs associated with any borrowing in order to determine that the above funding sources are adequate to service the proposed debt. Accordingly, the Policies assume that development fees will be set at a level that is sufficient at all times to insure that new development pays its fair share of the cost of constructing new facilities in the community.
Debt will be issued for a capital improvement project only in the case of emergency or when it is an appropriate means to achieve an equitable allocation of costs between current and future beneficiaries as determined by the City Council. Debt shall not, in general, be used for projects solely because insufficient funds are budgeted at the time of acquisition or construction. Debt will only be undertaken when the City believes that project revenues or specific resources will be available and sufficient to service the debt over its life. Debt financing will not be considered appropriate for any recurring purpose such as operating or maintenance costs.
The City will evaluate the use of debt in-Lieu of "pay-as-you-go" financing based on the following criteria:
Factors Favoring "Pay-as-you-Go " Financing:
1. current fund balances or project revenues
are Reliable adequate to fund the project;
2. existing or proposed debt levels would
have a deleterious effect on the City's
credit rating;
3. credit market conditions are unstable or
present extraordinary difficulty in
marketing the proposed debt.
Factors Favoring Use of Debt:
1. revenues are deemed to be stable &
enough to support the proposed debt at
investment grade ratings;
2. the nature of the financed project will
support investment grade ratings;
3. credit market conditions present
favorable interest rates and demand for
financing such as the City's
4. the project being financed is mandated
by the state or federal government and
resources are insufficient or unavailable;
5. the project being financed is
immediately required to meet or relieve
capacity needs and current resources are
insufficient or unavailable;
6. the estimated useful life of the asset to
be financed is greater than 5 years.
11 Item 6 A.
Administrative Procedure III-3
Financial Management
6. GENERAL OBLIGATION DEBT:
General obligation bonds provide the lowest borrowing costs for major public assets.
The source of repayment of a general obligation bond is from proceeds of specific taxes, the City's operating funds and its operating position are not impacted by the issuance of general obligation bonds. Though the use of the term "general obligation bond" implies that the City's "full faith and credit" would be pledged to the repayment of the bond, the bond is actually repaid from an ad valorem tax on real property.
Because of the absence of a limitation on the rate and amount of the tax that might be levied to pay a general obligation bond, state law requires the proposed debt to be approved by the electorate, by a two-thirds vote.
Cities in California may issue general obligation bonds only for the purpose of acquiring, improving or constructing real property.
7. USE OF OTHER DEBT, INCLUDING REVENUE BONDS, CERTIFICATES OF PARTICIPATION OR FINANCING LEASES:
Before issuing revenue debt or financing leases, the City will determine that the proposed facility is both necessary and desirable, and that no other financing method is practical to finance it. The City shall only use revenue debt or financing leases: if the project to be financed will generate positive net revenues after debt service; or, if the project will significantly reduce City operating costs; or, if an equal or greater amount of non-City matching funds will be lost if City's revenue or financing lease funds are not applied in a timely maimer; or, in the case of a financing lease, if the project to be financed is less than $250,000; or, if the project to be financed provides essential City services or would so advance core City policy objectives that its value overrides the value of obtaining voter approval.
B. OPERATING BUDGETING AND RESERVES
1. TWO YEAR OPERATING BUDGET:
The City will maintain a long-range fiscal perspective through the use of a two-year operating budget and a five-year capital improvement budget.
2. BALANCED OPERATING BUDGET:
The City will maintain a balanced operating budget for all governmental funds with on-going revenues equal to or greater than on-going expenditures and debt service.
This policy requires that in any given fiscal year we do not budget proposed expenditures in excess of the revenue we expect to receive in the same time frame.
3. "ONE-TIME" REVENUE:
The City will use "one-time" revenues, including fund balance carry-forwards, to fund nonrecurring expenditures. "One time" revenues carmot be relied on in future budget periods and should be used to stabilize existing revenues, retire early debt or for capital purchases.
12 Item 6 A.
Administrative Procedure III-3
Financial Management
4. NORMAL REVENUE INFLATION WILL GO TO PAY NORMAL INFLATION EXPENSES:
The City will assume that normal revenue inflation will go to pay normal inflation expenses. Any new or expanded programs will be required to identify funding sources.
If normal revenue inflation does not keep up with expense inflation, expenses will be decreased or a new revenue source will be found. If revenues grow at a rate faster than expense inflation, expanded service levels may be considered.
5. CONTINGENCY RESERVE APPROPRIATION:
For each fiscal year, the final adopted General Fund budget shall contain a funded Contingency Appropriation equal to 15% of normal General Fund Expenditures. The Contingency Appropriation "will provide a prudent level of financial resources to protect against temporary revenue shortfalls or unanticipated operating costs, and/or to meet short-term cash flow requirements."
6. EMERGENCY RESERVES:
To protect against significant one-time costs, which might arise from major unpredictable emergency events, in addition to the Contingency Appropriation, the City shall maintain a funded emergency reseive equal to 10% of normal General Fund budgeted expenditures.
7. PERS CONTINGENCY FUND:
The City will maintain a PERS Contingency Fund to stabilize future pension contribution increases. The City will invest the funds in an irrevocable trust fund. The target funding level for this fund is one full year of PERS Contributions with additional money allocated to the fund when the City has available surplus funds.
8. REVENUE DIVERSIFICATION:
The City will endeavor to maintain a diversified and stable revenue base to minimize the effects of economic fluctuations on revenue generation and to protect it from shortterm fluctuations in any revenue source.
9. REVENUE PROJECTIONS:
The City will prepare multi-year projections of revenues and other resources in order to understand the level of funding available for services and capital acquisition. The revenue projections will assist the City in understanding of revenue sensitivity to changes in assumptions and to controllable factors such as changes to tax rates or fees.
The revenue projection will be for a period of at least two years into the future to evaluate how revenues may change over time, to isolate non-reoccurring revenues and to imderstand the impact of revenue growth. The major assumptions used in the revenue projection will be documented and identified and different scenarios may be developed to enable City Council to choose a preferred scenario.
10. EXPENDITURE PROJECTIONS:
The City will prepare multi-year projections of expenditures for each fund and for existing and proposed new programs. The expenditure projections will assist the City in determining whether projected expenditure levels can be sustained, whether new programs are affordable, and whether a program's current and future costs are 13 Item 6 A.
Administrative Procedure III-3
Financial Management
acceptable compared to program benefits and projected revenue availability. The expenditure projections will be for a period of at least two years into the future to evaluate how expenditures may change over time. All expenditure projections should identify service level assumptions and key issues that may affect actual expenditures.
11. COMMUNITY DEVELOPMENT FEES:
The City's development process costs and related administrative expenses should be offset by fees to the greatest extent possible. Fees will be reviewed and updated on a yearly basis to ensure that they keep pace with changes in the actual costs of service delivery as well as changes in the methods or levels of service delivery.
C. OTHER POLICIES
1. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES:
The City will comply with all the requirements of Generally Accepted Accounting Principles. The City will always conduct its financial affairs and maintain its records in accordance with GAAP as established by the Government Accounting Standards Board, so as to maintain accuracy and public confidence in its financial reporting systems.
2. COUNCIL ACTION TO BE A SCHEDULED BUSINESS ITEM, NOT CONSENT CALENDAR:
For all debt sales, the City will require that the action taken by the City Council to incur the debt will be taken as a scheduled business item, and at a regular or special City Council meeting, consistent with state law.
3. INTERNAL BORROWINGS:
Provided sufficient resources are available, liquidity will not be impaired, and a defined source of repayment is available, the City will favor internal over external borrowings to achieve short-term liquidity. In accordance with the City Council Resolution #2683, the Finance Director will initiate and the City Manager will approve inter-fund borrowings, except for year-end accounting entries that create temporary inter-fund loans for the financial statement presentation purposes, and the City Manager will report such borrowings to the Council at its next regular meeting. Interest on inter-fund loans will be recorded only when necessitated by state or federal program requirements, or other contractual or legal obligations.
4. EMPLOYEE COMPENSATION:
The City will continue to pay competitive market level compensation to our employees to ensure that the City has the ability to attract and retain well-qualified personnel while ensuring that the City's compensation practices are competitive and consistent with those of comparable employers.
This policy is^pproved and authorized by:
Goldstein, City Manager
14 Item 6 A.
City Council Goal Funding Amount Dept Assigned Status
Community Center Improvements $ 150,000 PW Ongoing - incorpated into Com Ctr Renovation Project Bluff / Cliff Drive study $ 50,000 PW Ongoing - Incorporated into FHWA Grant Project Noble Gulch engineering feasibility analysis $ 50,000 PW Ongoing - assessment complete, improvements to follow - funding adequate
Fire risk reduction (eucalyptus groves) $ 50,000 PW
Ongoing - WIP, Addtl. $50K added to project @ Mid Year
23-24
Peery Park Bridge maintenance $ 50,000 PW Ongoing - Will need addtl. funds to address study results Funding to study City Hall options $ 50,000 CDD Ongoing - Phase 1 presentation sched. for April CA Green Business Certification $ - PW
Completed - COE evaluated & recommended alt. program
for water
Bring climate goals to Council, from Climate Action Plan $ - PW Ongoing - COE has provided recommendation, will go to
Council in Spring 2024
Work w/ staff to develop a Mall Redevelopment Committee $ 25,000 CDD Ongoing - Pending Housing Element Cert.
Survey for possible revenue measure $ 25,000 CM Ongoing - Sched. for Council presentation 3/14 Employee downpayment assistance $ 100,000 CM $100K designated Increase Council training to $3k $ 5,000 CM Completed
Adopt Children's Bill of Rights $ - CM Completed
Complete LAFCO sphere study $ 30,000 CM Ongoing - Match funding requested from LAFCO Reach out to SUESD on possible turf project $ - CM Ongoing - Now Land Swap Project Establish long term strategic goals (5/10/15 yr) $ 50,000 CM Ongoing Debt payoff - 5.5% SCCB loan ($40k/yr savings) $ 725,000 Fin Completed Emergency reserve repleshment - 6.25% of storm damage $ 250,000 Fin Completed Hold for major infrastucture $ 800,000 Fin Ongoing - $585K remaining Allocate funding from $1mil to UA Playground $ 200,000 Fin Completed Begin to replace City vehicles with EV $ 200,000 Fin
Ongoing - 2 EV, 1 Electric Sweeper, 3 Hybrid, installed chargers
PD Tech (Body cameras, radar traffic enforcment, vests, matched w SLEF) $ 235,000 PD Completed Gun buy back $ 5,000 PD Completed
Community Center Renovation Project $ 1,650,000 PW Ongoing Pavement management (plus $550k in Measure D/SB1) $ 500,000 PW Completed - Capitola Road Project (completed) Hill/Bay pilot project $ 50,000 PW Ongoing - Going out to Bid Add more public water fountains/bottle filling stations - options for Council $ 50,000 PW Completed Allocate funding Esplanade Park $ 50,000 PW Completed - $50K designated for future CIP Project Bring ECYP ideas and scholarships to budget hearings $ - Rec Completed - Incorporated into FY 23-24 Budget Explore grants for Maker Space in Community Center Project $ - Rec Completed - Determined service offered regionally Intergenerational program to connect youth and elders - with ECYP funding $ - Rec Completed - Post-pandemic challenges, could be re-evaluated FY 2022-23
FY 2023-24
15 Item 6 A.
CalPERS UAL Amount $ 2,827,000 2,595,922 $ 3,011,000 $ 3,162,000 $ 3,433,000 $ 3,505,000 $ 0.00% -2.00% -2.00% -2.00% REVENUE FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Property Tax (%) 6.00% 6.00% 6.00% 5.00% 5.00% 5.00% 4.00% 4.00% 4.00% 4.00% Sales Tax (%) 2.30% 2.90% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% TOT (%) 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Business License (%) 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Building Permits (%) 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Cannabis Business Tax 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Parking (%) 25.00% 0.00% 0.00% 0.00% 0.00% 0.00% 12.50% 0.00% 0.00% 0.00% Mall Redevop Impact - - -
New Revenue / Hotel ($) - - 306,000 300,000 312,120 318,362 324,730 331,224 337,849 344,606 FY 2025
Planned
FY 2026
Forecast
FY 2027
Forecast
FY 2028
Forecast
FY 2029
Forecast
FY 2030
Forecast
FY 2031
Forecast
FY 2032
Forecast
FY 2033
Forecast
FY 2034
Forecast
Revenue 19,616,702 19,110,891 20,107,313 19,965,426 19,808,740 20,282,773 20,875,816 21,337,111 21,812,098 22,301,219 Expenditures 18,528,790 18,423,229 18,789,894 19,083,151 19,500,495 19,759,945 19,905,881 19,986,111 19,595,247 19,646,692Net Impact Fund Balance 1,087,912 687,661 1,317,419 882,275 308,246 522,828 969,935 1,351,000 2,216,852 2,654,527F Extention Revenue 1/4% 1,260,582 614,918 1,292,097 1,324,399 1,357,509 1,391,447 1,426,233Net Impact Fund Balance 1,568,828 1,497,193 1,814,925 2,294,334 2,708,509 3,608,298 4,080,760 16 Item 6 A.
Staff Requirements:
• Very High: Involves all dept. staff, staff from other departments, multiple agencies, numerous stakeholders, extensive permit requirements, and coordination of several consultants/contractors. • High: Engages all department staff, external agencies, various stakeholders, entails permitting processes, and requires management of consultants. • Medium: Involves several department staff members, includes scoping, consultant/contractor management, and moderate stakeholder engagement. 17 Item 6 A.
18 Item 6 A.
19 Item 6 A.
Fiscal Year 2024-25
Budget Principles, Goals,
& Key Projects
March 6, 2024
20 Item 6 A.
High Level
Budget
Principles
Fiscal Policy Principles
Public Improvement
Principles
Public Service Principles
21 Item 6 A.
Confirm Budget Principles
Public Service
• Maintain, and improve upon,
the transparency of City
operations and accessibility of
government
• Recognize the high priority the
community places on the
public’s safety
• Analyze future service level
increases with their long-term
financial impacts to ensure
financial stability
Fiscal Policy
• Maintain a balanced
budget that ensures
ongoing expenditures
can be met with
ongoing revenues
• Use one-time
revenues for one-time
expenditures
• Ensure the budget
plans for future cost
increases and
attainable revenue
estimates
Public Improvement
• Maintain the City’s
infrastructure by
providing maximum
funding for the
pavement
management system
• Maintain and improve
Capitola’s natural
resources and
sustainable green
programs
• Ensure maintenance
and cleanliness of City
facilities, sidewalks,
and streets
22 Item 6 A.
Background
City prepares and adopts budget
annually
• Adopted budget provides City Council
direction regarding day-to-day functions
• Establishes framework for delivery of
services to community
Adopting budget principles, goals,
& key projects establishes metrics
to measure performance
• Assist in clearly articulating Council
priorities to residents
23 Item 6 A.
• Principles: Overarching guide to budget
Principles: Overarching
guide to budget
Goals: High-level
programs/initiatives
Projects: lineitem specifics
24 Item 6 A.
On-Going FY 2022-23 Goals
Goal / Item Prioritized at ($) Status / Progress Details Incorporated into Community
Center Renovation Project $150,000 Community Center (near term needs) Bluff / Cliff Drive study $50,000 Incorporated into FHWA Grant Assessment complete,
improvements to follow, funding
adequate
$50,000 Noble Gulch engineering feasibility
analysis
In progress, added $50,000
during FY 2023-24 mid-year Fire risk reduction (eucalyptus) $50,000 Ongoing-will need additional
funds to address study results Peery Park Bridge maintenance $50,000 Phase 1 presentation scheduled
for April Funding to study City Hall options $50,000
25 Item 6 A.
FY 2023-24 Goals Update
Goal / Item Prioritized at ($) Status / Progress Details Completed – COE evaluated &
recommended alt program CA Green Business certification N/A Ongoing - COE has provided
recommendation, will go to Council
in Spring 2024
N/A Bring climate goals to Council, from
Climate Action Plan
Ongoing – pending Housing
Element Certification $25,000 Work w/staff to develop Mall Redevelopment Committee Survey for possible revenue measures $25,000 Ongoing – Sched. For Council 3/14 Employee Downpayment Assistance $100,000 Completed - $100k designated Increase Council training to $3k each $5,000 Completed
Adopt Children’s Bill of Rights N/A Completed
Ongoing – $15k match funding from
LAFCO Complete LAFCO Sphere Study $30,000
N/A Ongoing – Now land swap project Reach out to SUESD on possible turf project
26 Item 6 A.
FY 2023-24 Goals Update
Goal / Item Prioritized at ($) Status / Progress Details $50,000 Ongoing Establish long-term strategic goals
(5/10/15 yr.)
$725,000 Completed Debt Payoff – 5.5% SCCB loan
($40k/yr. savings)
Emergency Reserve Replenishment $250,000 Completed
Hold for Infrastructure $800,000 Ongoing - $585,000 remaining $200,000 Completed Allocate funding from $1 mil to UA
Playground
Ongoing – 2 EV, Electric Sweeper, 3
Hybrid, installed chargers Begin to replace City vehicles with EV $200,000 $235,000 Completed
PD Tech (Body cameras, radar traffic
enforcement, vests, matched with
SLESF)
Gun buy back $5,000 Completed
Community Center Renovation $1,650,000 Ongoing
27 Item 6 A.
FY 2023-24 Goals Update
Goal / Item Prioritized at ($) Status / Progress Details $500,000 Completed – Capitola Road project Pavement management (plus $550k in Measure D/SB1)
Hill/Bay pilot project $50,000 Ongoing – out to bid
$50,000 Completed Add more public water fountains/bottle filling stations – options for Council
Completed - $50k designated for
future project Allocate funding Esplanade Park $50,000
Completed – incorporated into FY
23-24 Budget N/A Bring ECSP ideas and scholarships to budget hearings Completed – determined services
offered regionally N/A Explore grants for Maker Space in Community Center Project Completed – post pandemic
challenges, could be reevaluated N/A Intergenerational program to connect youth and elders – with ECYP funding 28 Item 6 A.
General Fund Balance
FY 2022-23 City Council Goals $ 400,000
Contracts for FY 2022-23 Goals $ (400,000)
Employee Down Payment Assistance Program $ 100,000
Future Capital Improvement Projects
(allocated $369,000 to wharf Feb. 26, 2024)
Operating Contingency Balance
(allocated $430,000 at mid-year Feb. 22, 2024)
Total Balance $ 801,000
Historic Fund Balance Target Level 500,000 $
Keeping Employee Down Payment Assistance 100,000 $
Total Available Fund Balance 201,000 $
$ 585,000
$ 116,000
29 Item 6 A.
Long-Term Forecast
30 Item 6 A.
10-Year Forecast
• Does not include any increase in staffing costs (CPI, etc.) • Amount is all General Fund available for: roads, parks, programing, grants, staffing costs.
31 Item 6 A.
New Format for Budget Goals
32 Item 6 A.
New Format for Budget Goals
33 Item 6 A.
New Format for Budget Goals
• Very High: public input & multiple department work
• High: multiple department work
• Medium: Single department work, multiple staff members involved • Low: Single staff member, limited work 34
Item 6 A.
New Format for Budget Goals
35 Item 6 A.
New Format for Budget Goals
36 Item 6 A.
New Format for Budget Goals
37 Item 6 A.
Public Works
Department
Stewarding Capitola’s
public infrastructure to
ensure safety,
functionality, and
sustainability
38 Item 6 A.
Public Works
Ongoing and Upcoming Potential Projects
Notes FY 24-25 General
Fund
Staff
Requirement Project
Multiple sub-projects: CWEP,
interpretive panels Wharf Resiliency Project Very High
Fundraising through 2024,
potentially short ~$300k Very High Jade Street UA Playground Project Other projects to be deferred
if granted. $2.65m secured
$3.2m pending CDBG
Very High Community Center
Renovation Project
High $50,000 Heavy public process Update Climate Action Plan
Prior Council goal $350k
$500k from State High Funded Stockton Bridge Debris Mitigation Project High Funded On a tight timeline by FHWA Cliff Drive Resiliency Project
39 Item 6 A.
Public Works
Ongoing and Upcoming Projects
Notes FY 24-25
General Fund
Staff
Requirement Project
Medium Unfunded Scope dependent on funding 41st Ave Median Improvements
Medium Funded Currently evaluating Complete/Additional
Peery Bridge Repairs
Construction dependent on
site conditions and final
approvals
Medium Funded
2023 FEMA Projects
(Stockton Bridge, Soquel
Creek, Hooper's Stairs)
Medium Funded RTC Funding Upper lot eastern access
pedestrian path
Medium Funded Will identify future major CIP Bay Avenue Corridor Traffic Study
Phase I funded
Construction Spring 2024 Medium Funded Finish the Park at RispinMansion Project 40 Item 6 A.
Public Works
Ongoing and Upcoming Projects
Notes FY 24-25
General Fund
Staff
Requirement Project
Design FY24/25
Construction in FY 25/26.
External funding $1M
Medium 41st Ave Improvements
(Clares to N City Limits)
Medium Grant resources secured Complete Streets Safety
Assessments
Funding needs to be identified
by current study Medium Peery Park Bridge Maintenance Project Significant need; current
infrastructure failure. Medium Lifeguard Equipment Storage Improvements to locker
room/restrooms PD facility improvements Medium $65,000
State law requires removing
parking within 20' of
intersections/crosswalks
Daylighting Citywide Medium $10,000 41
Item 6 A.
Public Works
Ongoing and Upcoming Projects
Notes FY 24-25
General Fund
Staff
Requirement Project
Repairs identified in
assessment Low Funded Noble Gulch Pipeline Repairs
Council approval FY23/24
Construction FY24/25 Low Funded Park Avenue Traffic Calming Streets as identified in PMP.
Low External funding $500,000 2025 Pavement
Maintenance Project
Low Funded $30k Monte donation Pump Track Renovation
Project
42 Item 6 A.
Public Works
Excluded Projects
Notes FY 24-25 General
Fund
Staff
Requirement Project
CIP once encroachments are
removed Very High Unfunded Depot Hill Pathway Encroachments Very High $500,000 Potential grant funding Village Resiliency Study circulation and sea level rise
Medium Unfunded $50k allocated FY23/24 Esplanade Park
Improvements
Low $10,000 Current structure failed Softball Storage at Jade Street Park
PD Motor Shed Low $20,000
43 Item 6 A.
Building &
Planning
Providing
economic
vitality while
preserving
Capitola’s
unique history,
culture, and
natural setting.
Community
Development
Department
44 Item 6 A.
Community Development
Ongoing and Upcoming Projects
Notes FY 24-25 General
Fund
Staff
Requirement Project
May identify future CIP
projects Very High $75,000
Wharf Re-Envisioning Plan &
Public Outreach process &
temporary structure CDPs
Complete Housing Element Very High Funded In progress
Special revenue
(General Plan fund) Update 41 Very High $100,000 st Avenue Visioning Plan Special revenue
(RDA Successor Agency) Very High $225,000 Create Housing Rehab Grant/Loan Program Special revenue
(REAP 2.0) High $65,000 Code Update – Housing Element action item Special revenue
(RDA Successor Agency) High $150,000 Create Homebuyer Assistance Program 45 Item 6 A.
Wharf Re-Envisioning Plan
Public Outreach & Temporary Use/Structures
Spring Summer Fall Winter
Publish Request for Proposal
Community Survey on Temporary
Use of Wharf
Community Meeting
Public Outreach Results
Temporary Permits
Activate temp use
Recommendation on long-term use
of Capitola Wharf 46
Item 6 A.
Community Development
Excluded Projects
Notes FY 24-25 General
Fund
Staff
Requirement Project
Very High $67,000
City Hall Phase 2 – goal
setting & alternatives
analysis
$30,000 Special revenue
(Tree fund) Update tree ordinance High
Historical guidelines High $75,000
47 Item 6 A.
City Manager
Department
Serving the City
Council and the
community by
bringing together
resources to meet
needs while
prioritizing customer
service.
48 Item 6 A.
City Manager Department
Ongoing and Upcoming Projects
Notes FY 24-25 General
Fund
Staff
Requirement Project
Project kicked off, public
process expected to
begin April
Very High Funded 5-Year Strategic Plan Project
Management
Cost will be incurred FY
23-24 Employee Contract Negotiations Very High unknown
Citywide digital applications Hight $5,000
Medium UA Playground fundraising
coordination
Medium $2,000 External funding (ERMA) Risk Management & HR Policy Updates
Medium Funded In progress Revenue Tax Measure – polling research & public information 49
Item 6 A.
City Manager Department
Ongoing and Upcoming Projects
Notes FY 24-25 General
Fund
Staff
Requirement Project
Interest from employees –
modernize program Low $100,000 from last FY
Update Employee
Downpayment Assistance
Program
Employee Engagement Low $6,000
Elections Outreach Low $4,000
Translation services Low $5,000
Website Updates Low $7,000
50 Item 6 A.
City Manager Department
Excluded Projects
Notes FY 24-25 General
Fund
Staff
Requirement Project
Potential PEG funding for
some of $25k Medium $25,000 Technology updates to improve hybrid meetings Medium $5,000 Increase public outreach &
information services
$15,000 additional from
LAFCO High Funded Annexation/City Sphere Study
High Unknown Memorial Plaque Program
Update
51 Item 6 A.
52 Item 6 A.
Recreation Division
Ongoing and Upcoming Projects
Notes FY 24-25
General Fund
Staff
Requirement Project
Pilot Rapid Wedding Event High
Medium $20,000 Special revenue fund (EYCP) Equity Swim and Public Safety Outreach Program
Medium Implementation of Park Use
Permit program
Low $7,000 Purchase portable stage for
events
Lifeguard Equipment (PWC) Low $10,000
Public Works co-project.
Community engagement
necessary. Range of options.
Pickleball Courts Very High $1,000-$500,000
53 Item 6 A.
Recreation Division – Art & Cultural
Ongoing and Upcoming Projects
Notes FY 24-25
General Fund
Staff
Requirement Project
Medium $10,000 A&C Goals, in PW Budget
Public Art Maintenance:
41st Avenue median art &
utility box murals
Consider the Commission in
review process for art in
public places
Low $3,000 Banners for Village
Streetlights
Will be completed in the FY
23/24 Budget Low
SUESD Park Ave &
Washburn Student Art
Project
12 Concerts, 2 Movies, 4 Art
Fairs, Plein Air Low No change is programs provided
Begonia Commemorative
Art Project
Monterey Railing Art Project
Low No change in Public Art
projects
54 Item 6 A.
Police Department
Providing the highest
level of safety and
service to enhance our
community’s quality of
life.
55 Item 6 A.
Police Department
Ongoing and Upcoming Projects
Notes FY 24-25
General Fund
Staff
Requirement Project
Special Revenue Fund
(SLESF) FLOCK Cameras High $35,000
Coordination with NOAA,
Potential grant funding Medium
High Surf
Thresholds/Response
Checklist
Special Revenue Fund
Medium $25,00 (SLESF) Electronic/online Police
reporting
Special Revenue Fund
E-Citations Medium $10,000 (SLESF)
56 Item 6 A.
Finance Department
Presenting timely, accurate, and
transparent financial information
to the public.
57 Item 6 A.
Finance Department
Ongoing and Upcoming Projects
Notes FY 24-25
General Fund
Staff
Requirement Project
Medium
Continue to coordinate
with external businesses
to issue licenses,
coordination of employee
payroll, conducting annual
audits with new auditor,
supporting the CVWBIA,
regular issuance of billing
and accounting for internal
and external parties
High Legal review required
Updates to TOT
Ordinance & outreach to
operators
RFP to be issued in Spring
Medium 2024 City banking RFP
Medium Fee study funded in FY 23-24
Implementation of fee
study recommendations
58 Item 6 A.
Potential Fund Totals
Potential FY 24/25
Non General Fund
Potential FY 24/25
Department / Division General Fund
Public Works $100,000 $1,550,000
Community Development $75,000 $325,000
City Manager $27,000 $2,000
Recreation Division $20,000 $20,000
Police $70,000
Finance
Total: $222,000 $1,967,000
59 Item 6 A.
Recommended
Action
• Review:
• Budget Principles
• Status of FY2023-24 Goals
• Provide Direction:
• Potential amendments to
FY 2023-24 Budget
• Prioritize goals/projects for
FY 2024-25
• Next Steps
• Draft Budget published
May 3
• First budget hearing May 8
60 Item 6 A.