REVISED 6/11/2026 AT 4:00 PM
City of Capitola
City Council Meeting Agenda
Thursday, June 11, 2026 – 6:00 PM
City Council Chambers
420 Capitola Avenue, Capitola, CA 95010
Mayor: Margaux Morgan
Vice Mayor: Gerry Jensen
Council Members: Joe Clarke, Melinda Orbach, Susan Westman Regular Meeting of the Capitola City Council – 6 PM
1. Roll Call and Pledge of Allegiance
Council Members Joe Clarke, Melinda Orbach, Susan Westman, Vice Mayor Gerry Jensen, and Mayor Margaux Morgan
2. Additions and Deletions to the Agenda
3. Presentations
Presentations are limited to eight minutes.
A. Proclamation Declaring June 2026 as Older Americans Month
4. Additional Materials
Additional information related to an agenda item on this agenda and submitted to the City after distribution of the agenda packet pursuant to Government Code §54957.5. All correspondence received prior to 5:00 p.m. on the Wednesday preceding a Council Meeting will be distributed to Councilmembers to review prior to the meeting. Information submitted after 5 p.m. on that Wednesday may not have time to reach Councilmembers, nor be read by them prior to consideration of an item.
A. Item 7C - Staff Memorandum with Updated Attachment
B. Item 8A - Correspondence Received
5. 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.
6. Staff / City Council Comments
Comments are limited to three minutes.
7. Consent Items
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All items listed as “Consent Items” will be enacted by one motion in the form listed below. There will be no separate discussion on these items prior to the time the Council votes on the action unless members of the City Council request specific items to be discussed for separate review. Items pulled for separate discussion will be considered following General Government. Note that all Ordinances which appear on the public agenda shall be determined to have been read by title and further reading waived.
A. City Council Meeting Minutes
Recommended Action: Approve minutes from the regular meeting on May 28, 2026.
B. City Of Capitola Military Equipment Use
Recommended Action: Adopt a resolution renewing Chapter 2.60 of the Capitola Municipal Code entitled Military Equipment Use Ordinance, Capitola Military Equipment Use Policy 706 with no changes from the prior year, and finding that the annual Military Equipment Report complies with the standards of approval outlined in Government Code Section 7071(d).
C. Business Improvement Assessments for Fiscal Year 2026-27 Recommended Action: Adopt a resolution providing notice of the City’s intent to levy business improvement assessments for Fiscal Year 2026-27, receiving the annual report and proposed budget of the Capitola Village and Wharf Business Improvement Area, setting the date for a public hearing to be held on Thursday, June 25, 2026; and outlining noticing requirements.
D. City Investment Policy Amendment
Recommended Action: Adopt a resolution affirming the City's Administrative Policy Number III1, Investment Policy, as recommended by the Finance Advisory Committee.
8. 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. Transition to Districts – Second Public Hearing
Recommended Action: 1) Conduct a duly noticed time-certain public hearing at 6:15 PM and receive public input regarding the composition of the potential Council election districts; 2) provide direction on Council’s preference for five Council districts with a rotating Mayor, or for four Council districts with a Citywide-elected Mayor; and 3) if a Citywide-elected Mayor is preferred, provide guidance on whether the Mayoral term should be two years or four years.
B. Fiscal Year 2026-27 Operating Budget and Five-Year Capital Improvement Program Recommended Action: Adopt a resolution adopting the Fiscal Year 2026-27 City Budget and Five -Year Capital Improvement Program.
C. 2026 General Municipal Election
Recommended Action: Adopt a resolution ordering the 2026 General Municipal Election, requesting the Santa Cruz County Department of Elections conduct the election, and requesting consolidation of the General Municipal Election in the City of Capitola on Tuesday, November 3, 2026.
9. Adjournment
The next regularly scheduled City Council meeting is on June 25, 2026, at 6:00 PM. _____________________________________________________
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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
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.
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 and at Capitola City Hall prior to the meeting. 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 Comcast Channel 25). Meetings are streamed “Live” on the City’s website by clicking on the Home Page link “Meeting Agendas/Videos.” Archived meetings can be viewed from the website at any time. 3 Memo
To: Julia Gautho, City Clerk
From: Jim Malberg, Administrative Services Director
Date: June 8, 2026
Re: Business Improvement Assessments for Fiscal Year 2026-27 – Additional Materials
Good afternoon,
Please see the attached amended Capitola Village & Wharf Business Improvement Area budget page. The amended page includes an updated header with correct fiscal years, however the proposed budget remains unchanged.
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Capitola Village & Wharf Business Improvement Area Estimated Actual for FY 2024-25, Adopted FY 2025-26 and Proposed Budget for FY 2026-27 5 Item 4 A.
1 Gautho, Julia
From: Heidy <[email protected]>
Sent: Sunday, June 7, 2026 4:57 PM
To: City Council
Subject: Item 8A June 11, 2026
Dear Capitola City Council,
I am writing regarding Item 8A, districting, on your June 11, 2026 agenda.
While I am disappointed Capitola must move to district-based elections, I do not believe the City should risk the substantial legal costs that have burdened other jurisdictions when challenging the California Voting Rights Act. Regardless of one's views on the merits of the law, Capitola cannot afford the potentially millions of dollars in legal fees that could result from prolonged litigation.
As the Council considers whether to adopt four districts with an at-large mayor or five districts with a rotating mayor, I encourage you to consider which approach provides residents the greatest opportunity to participate in choosing their representatives.
District elections reduce the number of elected officials for whom a voter can cast a ballot. Under a fivedistrict system, residents would vote for only one councilmember representing their district. An at-large mayoral election would provide all voters with an additional opportunity to directly elect a citywide representative and maintain a broader connection between residents and their local government.
My perspective is informed by experience in a community that transitioned from at-large elections to districts. During that process, I helped recruit candidates, particularly women and individuals from historically underrepresented groups, to seek elected office. In practice, candidate recruitment proved challenging. In one district, we identified three highly qualified prospective candidates: a white man, a white woman, and a person of color. The latter two ultimately chose not to run because they believed the male candidate's name recognition and standing in the community made him the likely winner.
Meanwhile, another district struggled to identify even a single interested candidate.
That experience demonstrated that district elections do not automatically produce greater participation or diversity among candidates. In some cases, they can limit opportunities for strong candidates who might otherwise be competitive in a citywide election. For that reason (and for many others I’ve shared previously), I believe there is value in preserving at least one citywide elected office through an at-large mayor.
Thank you for your consideration.
Best Regards,
Heidy Kellison
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From: Mick <[email protected]>
Sent: Monday, June 8, 2026 7:28 PM
To: City Council
Subject: Item 8A
Please have the city attorney explain how basing districts on communities of interest is in compliance with the U.S. Constitution in light of Louisiana vs Callais.
Mick Routh
From the 6/11 agenda packet
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2 Sent from my iPhone
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From: Lindsey Roscoe <[email protected]>
Sent: Tuesday, June 9, 2026 3:45 PM
To: City Council
Subject: Item 8a
I strongly support the four-district model with an elected mayor.
Lindsey Roscoe
Capitola resident
Sent from my iPad
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1 Gautho, Julia
From: John Mulry <[email protected]>
Sent: Tuesday, June 9, 2026 5:01 PM
To: City Council; City Clerk
Subject: Council Meeting Agenda Districting
My long Ɵme dream of districƟng is upon us. This brings me joy. I recommend 4 districts and a real mayor who serves a two year term. Might even lead to an increase in councillor quality. It’s fun right. Somehow everything I advocate for comes to pass. One might think long range strategic planning is a super power.
Also fire Jamie. JM
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From: Joan Lambert <[email protected]>
Sent: Tuesday, June 9, 2026 5:41 PM
To: City Council
Subject: Item 8A
Dear Council Members:
I support a district model with 4 districts and an elected mayor. I have personal experience with serving on an elected public school board that had 5 members and a board president that rotated each year.
I have seen that in the rotating model, there is a steep learning curve after someone assumes the role of the board president (or mayor in this case). It takes a number of months for someone to understand and get comfortable with their new role and duties. So if the mayor is appointed every year, much of each mayor's term will be spent on getting "up to speed." This would not be in the best interests of the residents of Capitola.
It makes more sense to have a person who is elected as a mayor so that that person has more time in the role once they are comfortable with the position, and also so that there is better continuity of leadership for the residents of Capitola.
Best regards,
Joan Lambert
(Capitola resident)
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From: Jennifer Cosgrove <[email protected]> Sent: Tuesday, June 9, 2026 7:04 PM
To: City Council
Subject: Regarding agenda 8A for June 11 meeting
I am a Capitola resident and support four districts and an elected mayor.
Thank you.
JENNIFER COSGROVE | Realtor
Intero, a Berkshire Hathaway affiliate
Presidents Circle Top 5% | Intero Value Award Winner
CFO Intero Foundation
408.930.8425 DRE# 01334273
my website | facebook | twitter | YouTube | blog
intero luxury international | intero foundation
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From: Misha Burich <[email protected]>
Sent: Tuesday, June 9, 2026 7:59 PM
To: City Council
Subject: Agenda item 8A in the June 11, 2026, City Council meeting Dear Council members,
We will not be able to attend the June 11, 2026, City Council meeting.
Regarding the agenda item 8A in the meeting, we support the option with four districts with each district electing one council member and the entire city electing a mayor.
Sincerely,
Misha and Lisa Burich
101 Hollister Ave
Capitola, CA 95010
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1 Gautho, Julia
From: Meghan D Morrissey <[email protected]>
Sent: Wednesday, June 10, 2026 9:02 AM
To: City Council
Subject: Agenda Item 8A - Transition to Districts
Dear City Council members,
We are emailing regarding Agenda Item 8A, the transition to districts.
We strongly support the four-district model with an elected mayor and urge you to select this model for the future of our city.
There are several reasons why we believe a four-district system with an elected mayor deserves consideration:
1. More opportunities for residents to vote.
Under this model, residents would vote for both a district representative and a citywide mayor. Because the mayoral election would occur more frequently than district elections (assuming a 2 year term), voters would have a meaningful voice in city leadership every two years rather than only once every four years. (Under the current system we all vote every two years for 2 or 3 council members.) This promotes civic engagement, and in addition, each citizen will have a voice in the election of two city officials whom they feel represent their interests.
2. A citywide perspective and stronger leadership.
A mayor elected by all Capitola residents would be accountable to the entire community, not to just one district. This helps ensure that citywide issues remain a priority and that all neighborhoods have a voice in major decisions. Many of Capitola's most important challenges—including transportation, economic development, infrastructure, public safety, and housing—cross district boundaries and affect residents throughout the city. The mayor also works with the City Manager to help shape Council agendas and priorities. A mayor elected by the entire city may be better positioned to focus on the issues that matter most to Capitola as a whole rather than the concerns of a single district.
3. Greater continuity and experience.
An elected mayor serving a multi-year term has time to develop expertise, build relationships, and provide leadership on complex issues facing the city. There will be better consistency working with the City Manager, who is hired by and works directly for the City Council.
4. Stronger regional representation.
A citywide-elected mayor can serve as a visible representative for Capitola when working with regional agencies, neighboring jurisdictions, and state officials. An elected mayor has the backing of the entire Capitola electorate behind him/her and has more credibility with influences outside Capitola. 14 Item 4 B.
2 5. Larger districts and broader representation.
With five districts, each district would contain roughly 1,400 voters. With four districts, that number increases to approximately 1,750 voters, allowing each council member to represent a broader crosssection of the community.
Thank you for your time and for your service.
Meghan and Mike Morrissey
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1 Gautho, Julia
From: Matt Wegner <[email protected]>
Sent: Wednesday, June 10, 2026 2:12 PM
To: City Council
Subject: Districts & Mayor Election Change
I’d like the City Counsel to support four districts, with each district elecƟng one council member and the enƟre city elecƟng a mayor at large. Thank you.
MaƩ Wegner
100 Hollister Ave
Capitola, CA 95010
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1 Gautho, Julia
From: Shauna Silva <[email protected]>
Sent: Wednesday, June 10, 2026 5:25 PM
To: City Council
Subject: Letter regarding Item 8A of 6/11/26 Agenda Packet Dear Mayor and City Council Members,
I support the four-district model with an elected mayor and encourage the Council to give this option serious consideration as Capitola transitions to district-based elections.
I believe a four-district system with an elected mayor would offer several important benefits:
• A mayor elected by all Capitola voters would ensure accountability to the entire community, not simply one district.
• A multi-year mayoral term would provide greater continuity, experience, and consistency in city leadership while addressing long-term challenges. • With four districts rather than five, each council member would represent a broader cross-section of residents, encouraging balanced representation and collaboration. • Residents would have more frequent opportunities to vote and participate in selecting city leadership.
I believe this structure would provide both strong neighborhood representation and effective citywide leadership, and I respectfully urge the Council to adopt the four-district model with an elected mayor.
Thank you for your consideration.
Sincerely,
Shauna Silva
Capitola Resident
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1 Gautho, Julia
From: Mara Palandrani <[email protected]>
Sent: Thursday, June 11, 2026 1:16 PM
To: City Council
Cc: Joe Palandrani
Subject: Re districting of Capitola
City Council:
Joe and I are not sure if we will make the meeƟng tonight – but wanted our “vote” be known for the redistricƟng of Capitola.
Four districts, with each district elecƟng one council member and the enƟre city elecƟng a mayor at large.
Mara & Joa Palandrani
105 Hollister Ave.
Capitola, CA 95010
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1 Gautho, Julia
From: Em N. <[email protected]>
Sent: Thursday, June 11, 2026 5:24 PM
To: City Council
Subject: ATTN: Public Comment - Council Agenda Item 8A
Dear Mayor and Councilmembers,
As Council considers the choice between five districts with a rotating Mayor and four districts with a Citywide-elected Mayor, the question is not simply which structure is better. The more important question is which structure best positions Capitola for the future.
The challenges facing Capitola over the next decade - aging infrastructure, coastal resilience, housing requirements, economic vitality, and long-term fiscal sustainability - will affect the entire community regardless of district boundaries. Any governance structure adopted today should be evaluated based on its ability to address those challenges while maintaining public trust, accountability, and representation.
A Citywide-elected Mayor offers a single citywide voice and greater continuity in leadership. The tradeoff is that it creates a separate citywide elected office, concentrating visibility and influence in one position and requiring candidates to run a citywide campaign.
A five-district model with a rotating Mayor emphasizes shared leadership and district representation.
Each Councilmember is directly accountable to a district, while the Mayor remains a member of the Council rather than a separately elected position. The tradeoff is less continuity in the Mayor’s role from year to year.
Neither option guarantees better outcomes. Good governance will always depend on thoughtful decision-making, collaboration, and public engagement. However, governance structures can influence how decisions are made and whose voices are heard.
Many of the issues facing Capitola require citywide thinking, but they also require public confidence that every neighborhood has a seat at the table. For a city of Capitola’s size, a five-district model with a rotating Mayor appears to provide a stronger balance between representation and governance. It preserves district accountability while maintaining a collaborative council structure that has been used successfully in many smaller California communities.
There is also a practical consideration. The City is in the middle of a legally required districting process. While the two options before Council are the appropriate focus for this phase of the process, alternative governance models may be worth exploring in the future. For example, a structure that preserves district-based representation while providing additional continuity in leadership may ultimately offer the best balance of both objectives.
The decision before Council tonight is more focused: which of the two options best supports the City’s transition to district-based elections. For that reason, five districts with a rotating Mayor appears to be the more straightforward path forward while preserving the opportunity to revisit governance structure in the future, should circumstances warrant.
Thank you,
Em
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Capitola City Council
Agenda Report
Meeting: June 11, 2026
From: City Manager Department
Subject: City Council Meeting Minutes
Recommended Action: Approve minutes from the regular meeting on May 28, 2026.
Background: Attached for City Council review and approval are the draft minutes from the regular meeting on May 28, 2026.
Alignment with 2025-2029 Strategic Plan Priority: Accountable Government Attachments:
1. Regular Meeting 5/28/2026
Report Prepared By: Julia Gautho, City Clerk
Approved By: Jamie Goldstein, City Manager
45 Item 7 A.
City of Capitola
City Council Meeting Minutes
Thursday, May 28, 2026 – 6:00 PM
City Council Chambers
420 Capitola Avenue, Capitola, CA 95010
Mayor: Margaux Morgan
Vice Mayor: Gerry Jensen
Council Members: Joe Clarke, Melinda Orbach, Susan Westman Regular Meeting of the Capitola City Council – 6 PM
1. Roll Call and Pledge of Allegiance – The meeting was called to order at 6:00 PM. In attendance: Council Members Clarke, Orbach, Westman, Vice Mayor Jensen, and Mayor Morgan.
2. Additions and Deletions to the Agenda – None
3. Additional Materials
A. Item 6A – Two emails received after publication of the agenda packet.
B. Item 7A – Seven emails received after publication of the agenda packet.
C. Item 7B – Three emails received after publication of the agenda packet.
4. Oral Communications by Members of the Public
Keith Cahalen
Rick Lorraine
Tiffany
Megan Reid, PG&E
Donna Hooper Danza
Kris Moran
Paula Bradley
The City Council discussed Item 7A, as it was a time certain public hearing beginning at 6:15 PM. Following Item 7A, the Council took a recess at 7:41 PM and reconvened at 7:45 PM before returning to Item 5.
5. Staff / City Council Comments
Community and Recreation Services Director Bryant advised the Council that the City has been approached about a public art donation in recognition of the Women on Waves. Council Member Clarke thanked Public Works staff for keeping the lagoon intact despite rainy weather and for cleaning up graffiti at the Park at Rispin Mansion. Council Member Westman inquired if the City will be issuing a Request for Proposals for the lifeguard organizational assessment. The City Manager responded that the City has already selected a consultant to conduct the assessment. Council Member Westman also requested that an item return to the Council about the onboarding process for new Council Members. Vice Mayor Jensen shared concerns about the transition of the new City website and availability of search results for members of the public; inquired about the seasonal shuttle service; and thanked City staff for working with donors on the Women on Waves statue. 46 Item 7 A.
City Council Meeting Minutes – May 28, 2026
City of Capitola Page 2
Mayor Morgan thanked the Police Department for including her with the annual Torch Run and thanked staff for the meeting with Kings Plaza business owners. City Manager Goldstein confirmed that staff is working with public speakers about the plaque honoring Harry Hooper.
6. Consent Items
A. City Council Meeting Minutes
Recommended Action: Approve minutes from the regular meeting on May 14, 2026, and the special meeting on May 21, 2026.
B. City Check Registers
Recommended Action: Approve check registers dated March 27, 2026, April 10, 2026, April 28, 2026, and May 8, 2026.
C. License and Right of Entry Agreement for Monterey Avenue Park Pathway Improvements Recommended Action: Authorize the City Manager to execute the License and Right of Entry Agreement between the City of Capitola and the Soquel Union Elementary School District for pathway improvements connecting Monterey Avenue Park and New Brighton Middle School.
D. Mobile Home Park Rent Stabilization Anniversary Date Recommended Action: Rescind Resolution No. 4362 establishing an anniversary date of July 1, pursuant to Capitola Municipal Code Chapter 2.18 Mobile Home Park Rent Stabilization, and adopt a resolution which specifies an anniversary date for rent increases at Cabrillo Mobile Home Estates to occur on October 1 of each year, and provides that other parks remain subject to the anniversary date of July 1. (Resolution No. 4487) E. GreenWaste Annual Rate Adjustment
Recommended Action: Adopt a resolution approving the contractual rate increase for collection and disposal of residential and commercial garbage, recycling, organics, food waste, yard waste, and construction and demolition debris, effective July 1, 2026, according to the Service Rate Schedule formula of the Franchise Agreement with GreenWaste Recovery, Inc. (Resolution No. 4488)
F. Monterey Bay Area Regional Climate Project Working Group Recommended Action: Authorize the City Manager to execute a Memorandum of Understanding (MOU) to join the Monterey Bay Area Regional Climate Project Working Group (RCPWG).
Council Member Jensen inquired about Item 6C, City Manager Goldstein provided clarification about resident concerns about privacy.
Motion to approve the Consent Calendar: Council Member Orbach Second: Council Member Westman
Voting Yea: Council Members Clarke, Orbach, Westman, Vice Mayor Jensen, and Mayor Morgan
7. General Government / Public Hearings
A. Transition to Districts – First Public Hearing
Recommended Action: 1) Adopt a resolution updating the timeline for the City’s transition to bydistrict elections pursuant to California Elections Code Section 10010 and rescinding Resolution No. 4482; 2) Conduct a duly noticed time-certain public hearing at 6:15 PM and receive public input regarding the composition of the potential Council election districts; 3) provide direction on Council’s preference for five Council districts with a rotating Mayor, or for four Council districts 47 Item 7 A.
City Council Meeting Minutes – May 28, 2026
City of Capitola Page 3
with a Citywide-elected Mayor; and 4) if a Citywide-elected Mayor is preferred, provide guidance on whether the Mayoral term should be two years or four years.
City Clerk Gautho and Doug Johnson, the City’s demographer, provided the staff report.
Public Comment:
Heidy Kellison
Mark Warshaw
Linda Smith
Kevin Maguire
TJ Welch
The City Council discussed opportunities for members of the public to participate and provide input on the districting process.
Motion to adopt Resolution No. 4489, with the addition of a community outreach event held from 4:30 to 5:30 on June 11th: Council Member Westman Second: Council Member Orbach
Voting Yea: Council Members Clarke, Orbach, Westman, Vice Mayor Jensen, and Mayor Morgan
B. 41st Avenue, Clares Street, and Capitola Road Corridor Plan Recommended Action: Adopt a resolution adopting the 41st Avenue, Clares Street, and Capitola Road Corridor Plan and direct staff to publish a Request for Proposals (RFP) for an AB 1600 Nexus Study to establish a corridor impact fee.
Community and Economic Development Director Herlihy provided the staff report.
Public Comment:
Linda Smith
Paula Bradley
Cami Corvin
The City Council discussed the proposed plan, its impact on associated businesses, and provided feedback to staff. Council reiterated the importance of contacting all businesses involved, not just property owners.
Motion to direct staff to conduct additional outreach to businesses and publish an RFP for an AB 1600 Nexus Study, then return to City Council with updates: Council Member Orbach
Second: Vice Mayor Jensen
Amendment proposed to request that staff return with additional information about impact fees: Council Member Westman
Amendment accepted, with additional request for information on outreach efforts and proposed changes to the plan: Council Member Orbach
Amendments Accepted: Vice Mayor Jensen
Voting Yea: Council Members Clarke, Orbach, Westman, Vice Mayor Jensen, and Mayor Morgan
C. Underground Utility District No. 6 and Rule 20A Program Update Recommended Action: Receive information regarding Underground Utility District No. 6 and the Rule 20A utility undergrounding program, including district history, implementation considerations, and utility coordination issues, and provide direction as desired. 48 Item 7 A.
City Council Meeting Minutes – May 28, 2026
City of Capitola Page 4
Public Works Director Kahn provided the staff report.
Public Comment: None
The City Council discussed applying Rule 20A credits to a project on Capitola Avenue, or pursue advancing projects in District 6A-1.
The Council originally directed staff to advance District 6A-1 using Rule 20A credits, begin easement coordination, and return to Council with further information once obtained from coordination with PG&E; then reopened discussions to discuss the possibility to include work on Capitola Avenue.
The City Council took a recess at 9:37 PM and reconvened at 9:38 PM.
The Mayor recommended that the Council continue the item to a future meeting to allow staff to clarify items discussed. Vice Mayor Jensen requested Council refrain from morbid comments.
D. FY 2026-27 SB 1 Project List and Measure D Five-Year Plan Update Recommended Action: (1) Conduct a public hearing and adopt the FY 2026-27 Measure D FiveYear Program of Projects; and (2) Adopt the resolution approving the FY 2026-27 SB 1 Project List for the Road Maintenance and Rehabilitation Account (RMRA).
Public Works Director Kahn provided the staff report.
Public Comment: None
Motion to adopt Resolution No. 4490 and No. 4491: Council Member Westman Second: Vice Mayor Jensen
Voting Yea: Council Members Clarke, Orbach, Westman, Vice Mayor Jensen, and Mayor Morgan
E. MOU with the Capitola Police Officers Association
Recommended Action: Authorize the City Manager to sign a side letter agreement with the Capitola Police Officers Association with a term of June 1, 2026, through June 30, 2027.
Chloe Woodmansee, Assistant to the City Manager, provided the staff report.
Public Comment: None
Motion to authorize the City Manager to sign a side letter agreement with the Capitola Police Officers Association with a term of June 1, 2026, through June 30, 2027: Council Member Clarke
Second: Council Member Westman
Voting Yea: Council Members Clarke, Orbach, Westman, Vice Mayor Jensen, and Mayor Morgan
8. Adjournment – The meeting adjourned at 9:48 PM. The next regularly scheduled City Council meeting is on June 11, 2026, at 6:00 PM.
________________________
Margaux Morgan, Mayor
ATTEST:
_____________________
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City Council Meeting Minutes – May 28, 2026
City of Capitola Page 5
Julia Gautho, City Clerk
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Capitola City Council
Agenda Report
Meeting: June 11, 2026
From: Police Department
Subject: City Of Capitola Military Equipment Use
Recommended Action: Adopt a resolution renewing Chapter 2.60 of the Capitola Municipal Code entitled Military Equipment Use Ordinance, Capitola Military Equipment Use Policy 707, and finding that the annual Military Equipment Report complies with the standards of approval outlined in Government Code Section 7071(d).
Background: Effective January 1, 2022, Assembly Bill 481 (codified in Government Code §§7070, et seq.) requires legislative bodies to adopt ordinances approving military equipment use policies. Adopting such policies was required before law enforcement agencies could continue to engage in activities related to the use of “military equipment” as defined in the Government Code. The Capitola Police Department has “military equipment” in its inventory and engages in critical public safety activities in coordination with other local jurisdictions.
Pursuant to AB 481, on April 28, 2022, the City Council adopted Ordinance No. 1051, adding Chapter 2.60 to the Capitola Municipal Code (CMC), which approved a military equipment use policy for Police services and included an inventory (report) of the City’s military equipment. The Government Code and CMC require the City Council to conduct an annual review of the Military Equipment Use Ordinance and Policy and vote on whether to renew the Ordinance and Policy. As explained in more detail below, the Government Code also requires an annual review of the military equipment report.
Discussion: Staff is proposing no changes to the City’s Military Equipment Use Policy this year. The proposed resolution (Attachment 1) would confirm that the City Council has reviewed the Capitola Military Equipment Use Ordinance (Attachment 2), the Capitola Police Military Equipment Use Policy 707 (Attachment 3) and the annual military equipment report (Attachment 4). As required by Government Code §7071(e)(1) and HMC 2.60.030(F):
The City Council shall review any ordinance that it has adopted pursuant to this section approving the funding, acquisition, or use of military equipment at least annually and vote on whether to renew the ordinance at a regular meeting held pursuant to the Brown Act.
On April 28, 2022, the City Council adopted Ordinance No. 1051 implementing CMC Chapter 2.60 as well as the Capitola Police Military Equipment Use Policy 707 which are attached hereto as Attachments 2 and 3, respectively.
The Police Department is responsible for ensuring that all provisions of Government Code §§7071 and 7072 and CMC Chapter 2.60 are met. The City Council will continue to be required by law to review the ordinance and policy at least once per year and will have the opportunity to renew it or make any necessary changes.
Policy 707 approves the continued use of equipment currently in the Police Department’s inventory by authorized and trained personnel when the use is necessary to maintain safety. 51 Item 7 B.
Policy 707 also allows continued collaboration with other law enforcement agencies in the deployment or other use of military equipment within the City when exigent circumstances require a swift response. The Department works closely with other local, county, state, and federal law enforcement agencies on policerelated matters, including safeguarding the public’s welfare and safety, working on regional task forces, conducting training exercises, providing mutual aid, and responding to emergencies. In exigent circumstances, there is sometimes the need to deploy military equipment from or lend military equipment to outside entities to promote the safety and security of the community. When military equipment is used under exigent circumstances, the proposed ordinance requires prompt reporting on the use to the City Council.
In addition, pursuant to Government Code § 7071(e)(2) and CMC 2.60.050, the City Council shall determine, based on the annual military equipment report (Attachment 4), whether each type of military equipment identified in that report has complied with the standards of approval outlined in §7071(d) and HMC 2.60.030(D).
The standards for approval are set forth below.
1. Authorizing the use of military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety. The acquisition and use of this equipment is part of the Capitola Police Department’s overall approach to Critical Incident Management, Use of Force, DeEscalation, and public safety. The equipment will enable department members to properly respond to both planned and unplanned events efficiently and effectively.
2. The Military Equipment Use Policy safeguards the public’s welfare, safety, civil rights, and civil liberties by ensuring required reporting, providing opportunities for community engagement and feedback, and ensuring transparency and oversight regarding the acquisition and use of the specified military equipment in the City of Capitola.
3. If purchasing the equipment, it is required that the equipment is reasonably cost-effective compared to available alternatives that can achieve the same objective of officer and civilian safety.
4. Prior military equipment use complied with the Military Equipment Use Policy that was in effect at the time of the use.
Fiscal Impact: There would not be any new, unplanned direct fiscal impacts to continuing the use of equipment already in the Department’s inventory or continuing to collaborate with other law enforcement agencies, including in mutual aid circumstances. The maintenance costs of existing equipment are within the Department’s budget. No additional Military Equipment is being sought at this time.
There will be staff time associated with compliance, annual review, reporting, and community engagement meetings, all of which are required pursuant to applicable provisions of the Government Code.
Environmental Analysis: Pursuant to California Public Resources Code § 21065 and the California Environmental Quality Act (“CEQA”) Guidelines § 15378, there is no possibility that this ordinance will have a significant impact on the physical environment and is not a project as defined under CEQA.
Attachments:
1. Resolution
2. Chapter 2.60 Military Equipment Use Ordinance
3. Military Use Policy (707)
4. 2025 Annual Military Equipment Report
52 Item 7 B.
Report Prepared By: Sarah Ryan, Chief of Police
Reviewed By:
Approved By:
53 Item 7 B.
Attachment 1
CITY OF CAPITOLA
RESOLUTION NO. ______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CAPITOLA PURSUANT TO GOVERNMENT CODE
SECTION 7071 RENEWING CHAPTER 2.60 OF THE
CAPITOLA MUNICIPAL CODE ENTITLED MILITARY
EQUIPMENT USE ORDINANCE, CAPITOLA MILITARY
EQUIPMENT USE POLICY 707, AND FINDING THAT THE
ANNUAL MILITARY EQUIPMENT REPORT COMPLIES
WITH THE STANDARDS OF APPROVAL SET FORTH IN
GOVERNMENT CODE SECTION 7071(d)
WHEREAS, effective January 1, 2022, Assembly Bill 481 (AB 481) (Government Code sections 7071 et. seq.) requires legislative bodies to adopt ordinances approving military equipment use policies, which are required before law enforcement agencies can continue to engage in activities related to the use of military equipment; and
WHEREAS, the Capitola Police Department has “military equipment” in its inventory and engages in critical public safety activities in coordination with other jurisdictions on police related matters, including safeguarding the public’s welfare and safety, working on regional task forces, conducting training exercises, providing mutual aid and responding to emergencies; and
WHEREAS, in exigent circumstances, there is sometimes the need to deploy military equipment from or lend military equipment to other local jurisdictions to promote the safety and security of community members; and
WHEREAS, on April 14, 2022, the City Council adopted Ordinance No. 1051, adding Chapter 2.60 to the Capitola Municipal Code, which approved Military Equipment Use Policy 707 for police services, and included a report (inventory) of the City’s military equipment; and WHEREAS, Capitola Military Equipment Use Policy 707 sets forth a military equipment use policy that is consistent with the Police Department’s current practices, complies with all the requirements of the Government Code and the Capitola Municipal Code, will continue to ensure ongoing regulation and compliance with the law going forward and will continue to provide a means of community engagement and transparency regarding use of military equipment by the Department; and WHEREAS, the Government Code and the Capitola Municipal Code require the City Council to conduct an annual review of the Military Equipment Use Ordinance and Policy and vote on whether to the renew the Ordinance and Policy; and
WHEREAS, the City Council has conducted its annual review of the Military Equipment Use Ordinance contained in Chapter 2.60 of the Capitola Municipal Code as well as its annual review of Capitola Military Equipment Use Policy 707; and
54 Item 7 B.
Attachment 1
WHEREAS, the City Council has also conducted its annual review of the military equipment report prepared and submitted pursuant to section 7072 of the Government Code and has considered the requirements contained in section 7071(d) of the Government Code; WHEREAS, public notice has been provided in accordance with applicable law; and WHEREAS, the City Council has reviewed and desires to renew Chapter 2.60 of the Capitola Municipal Code and the Capitola Military Equipment Use Policy 707.
NOW, THEREFORE, the City Council of the City of Capitola, California, DOES HEREBY FIND as follows:
Section 1. All of the statements and facts set forth above in the recitals are true and correct and incorporated herein by this reference. The recitals constitute findings in this matter and, together with the staff report, other written reports, public testimony and other information contained in the record, are an adequate and appropriate evidentiary basis for the actions taken herein.
Section 2. The City Council finds that Chapter 2.60 of the Capitola Municipal Code and Capitola Military Equipment Use Policy 707 are exempt from the provisions of the California Environmental Quality Act (“CEQA”) because they will not result in a direct or reasonably foreseeable indirect physical change in the environment and are not a “project,” as defined in Section 15378 of the CEQA Guidelines.
Section 3. The City Council has reviewed Chapter 2.60 of the Capitola Municipal Code and hereby renews that Chapter without change.
Section 4. The City Council has reviewed Capitola Military Equipment Use Policy 707 and hereby renews the Policy with any changes duly noted in the Policy.
Section 5. The City Council has reviewed the annual military equipment report and finds that it complies with the standards of approval set forth in subdivision (d) of Government Code section 7071 because of the following:
1. Authorizing the use of military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety. The acquisition and use of this equipment is part of the Capitola Police Department’s overall approach to Critical Incident Management, Use of Force, De-Escalation and public safety. The equipment will enable department members to properly respond to both planned and unplanned events efficiently and effectively.
2. The Military Equipment Use Policy will safeguard the public’s welfare, safety, civil rights, and civil liberties by ensuring required reporting out, the opportunity for community engagement and feedback, and transparency and oversight regarding the acquisition and use of the specified military equipment in the City of Capitola.
55 Item 7 B.
Attachment 1
3. If purchasing the equipment, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety.
4. Prior military equipment use complied with the military equipment use policy that was in effect at the time of the use.
Section 4. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance, or its application to any person or circumstance, is for any reason held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases of this ordinance, or its application to any other person or circumstance. The City Council declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause or phrase hereof, irrespective of the fact that any one or more other sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases hereof be declared invalid or unenforceable.
PASSED and ADOPTED by the City Council of the City of Capitola at a regular meeting thereof this 11th day of June, 2026, by the following vote:
AYES:
NAYS:
ABSTAIN:
ABSENT:
____________________________________
Margaux Morgan
Mayor of the City of Capitola, California
ATTEST:
____________________________
Julia Gautho, City Clerk
City of Capitola, California
56 Item 7 B.
Chapter 2.60
MILITARY EQUIPMENT USE
Sections:
2.60.010 Name of chapter.
2.60.020 Definitions.
2.60.030 Military equipment use policy requirement.
2.60.040 Use in exigent circumstances.
2.60.050 Reports on the use of military equipment.
2.60.060 Severability.
2.60.010 Name of chapter.
A. This chapter shall be known as the military equipment use ordinance. (Ord. 1051 § 3 (Exh. A), 2022)
2.60.020 Definitions.
A. “Military equipment” includes all of the following (per Cal. Gov. Code § 7070):
1. Unmanned, remotely piloted, powered aerial or ground vehicles.
2. Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. However, police versions of standard consumer vehicles are specifically excluded from this definition.
3. High mobility multipurpose wheeled vehicles (HMMWV), commonly referred to as Humvees, two and one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached.
However, unarmored all-terrain vehicles (ATVs) and motorized dirt bikes are specifically excluded from this definition.
4. Tracked armored vehicles that provide ballistic protection to their occupants and utilize a tracked system instead of wheels for forward motion.
5. Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units.
6. Weaponized aircraft, vessels, or vehicles of any kind.
7. Battering rams, slugs, and breaching apparatuses that are explosive in nature. However, items designed to remove a lock, such as bolt cutters, or a handheld ram designed to be operated by one person, are The Capitola Municipal Code is current through Ord. 1074, passed January 22, 2026.
Capitola Municipal Code Chapter 2.60 MILITARY EQUIPMENT USE Page 1 of 6 57 Item 7 B.
specifically excluded from this definition.
8. Firearms of .50 caliber or greater. However, standard issue shotguns are specifically excluded from this definition.
9. Ammunition of .50 caliber or greater. However, standard issue shotgun ammunition is specifically excluded from this definition.
10. Specialized firearms and ammunition of less than .50 caliber, including assault weapons as defined in Sections 30510 and 30515 of the Penal Code, with the exception of standard issue service weapons and ammunition of less than .50 caliber that are issued to officers, agents, or employees of a law enforcement agency or a state agency.
11. Any firearm or firearm accessory that is designed to launch explosive projectiles.
12. “Flashbang” grenades and explosive breaching tools, “tear gas,” and “pepper balls,” excluding standard, service-issued handheld pepper spray.
13. Taser Shockwave, microwave weapons, water cannons, and the long range acoustic device (LRAD).
14. The following projectile launch platforms and their associated munitions: 40mm projectile launchers, “bean bag,” rubber bullet, and specialty impact munition (SIM) weapons.
15. Any other equipment as determined by a governing body or a state agency to require additional oversight.
16. Notwithstanding subsections (A)(1) through (15), “military equipment” does not include general equipment not designated as prohibited or controlled by the federal Defense Logistics Agency.
B. “City” means any department, agency, bureau, and/or subordinate division of the city of Capitola.
C. “Police department” means any division, section, bureau, employee, volunteer and/or contractor of the Capitola police department.
D. “City council” means the governing body that is the Capitola city council.
E. “Military equipment use policy” means a publicly released, written document that includes, at a minimum, all of the following:
1. A description of each type of military equipment, the quantity sought, its capabilities, expected lifespan, and product descriptions from the manufacturer of the military equipment.
The Capitola Municipal Code is current through Ord. 1074, passed January 22, 2026.
Capitola Municipal Code Chapter 2.60 MILITARY EQUIPMENT USE Page 2 of 6 58 Item 7 B.
2. The purposes and authorized uses for which the law enforcement agency or the state agency proposes to use each type of military equipment.
3. The fiscal impact of each type of military equipment, including the initial costs of obtaining the equipment and estimated annual costs of maintaining the equipment.
4. The legal and procedural rules that govern each authorized use.
5. The training, including any course required by the Commission on Peace Officer Standards and Training, that must be completed before any officer, agent, or employee of the law enforcement agency or the state agency is allowed to use each specific type of military equipment to ensure the full protection of the public’s welfare, safety, civil rights, and civil liberties and full adherence to the military equipment use policy.
6. The mechanisms to ensure compliance with the military equipment use policy, including which independent persons or entities have oversight authority, and, if applicable, what legally enforceable sanctions are put in place for violations of the policy.
7. For a law enforcement agency, the procedures by which members of the public may register complaints or concerns or submit questions about the use of each specific type of military equipment, and how the law enforcement agency will ensure that each complaint, concern, or question receives a response in a timely manner.
F. “Exigent circumstances” means a law enforcement agency’s good faith belief that an emergency involving the danger of, or imminent threat of death or serious physical injury to any person is occurring, has occurred, or is about to occur.
G. “State agency” means the law enforcement division of every state office, officer, department, division, bureau, board, and commission or other state body or agency, except those agencies provided for in Article IV (except Section 20 thereof) or Article VI of the California Constitution.
H. “Type” means each item that shares the same manufacturer model number. (Ord. 1051 § 3 (Exh. A), 2022)
2.60.030 Military equipment use policy requirement.
A. The Capitola police department shall obtain approval of the city council, by a resolution adopting a military equipment use policy (MEUP) at a regular meeting of the city council held pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code) prior to engaging in any of the following:
1. Requesting military equipment made available pursuant to 10 U.S.C. Section 2576a.
2. Seeking funds for military equipment, including, but not limited to, applying for a grant, soliciting or The Capitola Municipal Code is current through Ord. 1074, passed January 22, 2026.
Capitola Municipal Code Chapter 2.60 MILITARY EQUIPMENT USE Page 3 of 6 59 Item 7 B.
accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers.
3. Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.
4. Collaborating with another law enforcement agency in the deployment or other use of military equipment within the territorial jurisdiction of the city of Capitola.
5. Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body pursuant to this chapter.
6. Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of, military equipment.
7. Acquiring military equipment through any means not provided by this section.
B. No later than May 1, 2022, if seeking to continue the use of any military equipment that was acquired prior to January 1, 2022, the Capitola police department shall commence a city council approval process in accordance with this section. If the city council does not approve the continuing use of military equipment, including by adoption pursuant to a military equipment use policy submitted pursuant to this code, within 180 days of submission of the proposed military equipment use policy to city council, the Capitola police department shall cease its use of the military equipment until it receives the approval of city council in accordance with this code.
C. In seeking the approval of city council, the Capitola police department shall submit a proposed military equipment use policy to the city council and make those documents available on the police department’s internet website at least 30 days prior to any public hearing concerning the military equipment at issue.
D. The city council shall only approve a military equipment use policy pursuant to this chapter if it determines all of the following:
1. The military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.
2. The proposed military equipment use policy will safeguard the public’s welfare, safety, civil rights, and civil liberties.
3. If purchasing the equipment, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety.
4. Prior military equipment use complied with the military equipment use policy that was in effect at the time, or if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance.
The Capitola Municipal Code is current through Ord. 1074, passed January 22, 2026.
Capitola Municipal Code Chapter 2.60 MILITARY EQUIPMENT USE Page 4 of 6 60 Item 7 B.
E. In order to facilitate public participation, any proposed or final military equipment use policy shall be made publicly available on the internet website of the police department for as long as the military equipment is available for use.
F. The city council shall review this chapter at least annually and vote on whether to renew it at a regular meeting held pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code). (Ord. 1051 § 3 (Exh. A), 2022)
2.60.040 Use in exigent circumstances.
A. Notwithstanding the provisions of this chapter, the police department may acquire, borrow and/or use military equipment in exigent circumstances without following the requirements of this code.
B. If the police department acquires, borrows, and/or uses military equipment in exigent circumstances, in accordance with this section, it must take all of the following actions:
1. Provide written notice of that acquisition or use to the city council within 30 days following the commencement of such exigent circumstance, unless such information is confidential or privileged under local, state or federal law.
2. If it is anticipated that the use will continue beyond the exigent circumstance, submit a proposed amended military equipment use policy to the city council within 90 days following the borrowing, acquisition and/or use, and receive approval, as applicable, from the city council.
3. Include the military equipment in the police department’s next annual military equipment report. (Ord. 1051 § 3 (Exh. A), 2022)
2.60.050 Reports on the use of military equipment.
A. The police department shall submit to city council an annual military equipment report for each type of military equipment approved by the city council within one year of approval, and annually thereafter for as long as the military equipment is available for use.
B. The police department shall also make each annual military equipment report required by this section publicly available on its internet website for as long as the military equipment is available for use.
C. The annual military equipment report shall, at a minimum, include the following information for the immediately preceding calendar year for each type of military equipment:
1. A summary of how the military equipment was used and the purpose of its use.
2. A summary of any complaints or concerns received concerning the military equipment.
The Capitola Municipal Code is current through Ord. 1074, passed January 22, 2026.
Capitola Municipal Code Chapter 2.60 MILITARY EQUIPMENT USE Page 5 of 6 61 Item 7 B.
3. The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
4. The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
5. The quantity possessed for each type of military equipment.
6. If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
D. Within 30 days of submitting and publicly releasing an annual military equipment report pursuant to this section, the police department shall hold at least one well publicized and conveniently located community engagement meeting, at which the general public may discuss and ask questions regarding the annual military equipment report and the law enforcement agency’s funding, acquisition, or use of military equipment.
E. The city council shall determine, based on the annual military equipment report submitted pursuant to this section, whether each type of military equipment identified in that report has complied with the standards for approval set forth in this code and the military equipment use policy. If the city council determines that a type of military equipment identified in that annual military equipment report has not complied with the standards for approval, the city council shall either disapprove a renewal of the authorization for that type of military equipment or require modifications to the military equipment use policy in a manner that will resolve the lack of compliance. (Ord. 1051 § 3 (Exh. A), 2022)
2.60.060 Severability.
A. If any section, subsection, sentence, clause, phrase, or word of this chapter, or any application thereof to any person or circumstance, is held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions or applications of this chapter.
B. The city council hereby declares that it would have passed this chapter and each and every section, subsection, sentence, clause, phrase, and word not declared invalid or unconstitutional without regard to whether any other portion of this chapter or application thereof would be subsequently declared invalid or unconstitutional. (Ord. 1051 § 3 (Exh. A), 2022)
The Capitola Municipal Code is current through Ord. 1074, passed January 22, 2026.
Capitola Municipal Code Chapter 2.60 MILITARY EQUIPMENT USE Page 6 of 6 62 Item 7 B.
Policy
707
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Military Equipment
707.1 PURPOSE AND SCOPE
The purpose of this policy is to provide guidelines for the approval, acquisition, and reporting requirements of military equipment (Government Code § 7070; Government Code § 7071; Government Code § 7072).
The Capitola Department (CPD) does not possess any tactical equipment that it has obtained from the military, nor does it possess any equipment that was designed for military use.Notwithstanding, California Government Code § 7071(b) requires that law enforcement agencies submit a proposed Military Equipment Use Policy to their governing board for approval.
California Government Code § 7070 provides a list of equipment types that are considered to be "military equipment" for purposes of this policy requirement, and this Military Equipment Use Policy includes information for any such equipment types that are possessed by the Capitola Police Department, or reasonably likely to be deployed in Capitola by other law enforcement partners. 707.1.1 DEFINITIONS
Definitions related to this policy include (Government Code § 7070):
Governing body – The elected or appointed body that oversees the Department.
Military equipment – Includes but is not limited to the following:
• Unmanned, remotely piloted, powered aerial or ground vehicles. • Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. • High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. • Tracked armored vehicles that provide ballistic protection to their occupants. • Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units. • Weaponized aircraft, vessels, or vehicles of any kind. • Battering rams, slugs, and breaching apparatuses that are explosive in nature. This does not include a handheld, one-person ram.
• Firearms and ammunition of_.50 caliber or greater, excluding standard-issue shotguns and standard-issue shotgun ammunition.
• Specialized firearms and ammunition of less than_.50 caliber, including firearms and accessories identified as assault weapons in Penal Code § 30510 and Penal Code § 30515, with the exception of standard-issue firearms.
• Any firearm or firearm accessory that is designed to launch explosive projectiles. • Noise-flash diversionary devices and explosive breaching tools. 63 Item 7 B.
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• Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray.
• Area denial electroshock devices, microwave weapons, water cannons, long-range acoustic devices (LRADs), acoustic hailing devices, and sound cannons. • Kinetic energy weapons and munitions.
• Any other equipment as determined by a governing body or a state agency to require additional oversight.
707.2 POLICY
It is the policy of the Capitola Police Department that members of this department comply with the provisions of Government Code § 7071 with respect to military equipment. 707.3 MILITARY EQUIPMENT COORDINATOR
The Chief of Police designates the Police Captain to act as the military equipment coordinator.
The responsibilities of the military equipment coordinator include but are not limited to:
(a) Acting as liaison to the governing body for matters related to the requirements of this policy.
(b) Identifying department equipment that qualifies as military equipment in the current possession of the Department, or the equipment the Department intends to acquire that requires approval by the governing body.
(c) Conducting an inventory of all military equipment at least annually. (d) Collaborating with any allied agency that may use military equipment within the jurisdiction of Capitola Police Department (Government Code § 7071). (e) Preparing for, scheduling, and coordinating the annual community engagement meeting to include:
1. Publicizing the details of the meeting.
2. Preparing for public questions regarding the department's funding, acquisition, and use of equipment.
(f) Preparing the annual military equipment report for submission to the Chief of Police and ensuring that the report is made available on the department website (Government Code § 7072).
(g) Establishing the procedure for a person to register a complaint or concern, or how that person may submit a question about the use of a type of military equipment, and how the Department will respond in a timely manner.
1. A complaint, concern, or question related to Military Equipment utilization by the Capitola Police Department can be made:
(a) Via email to:[email protected]
(b) Via phone call to: 831.475.4242 and request to speak to the Military Equipment Coordinator.
64 Item 7 B.
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(c) Via mail sent to Capitola Police Department; Attn: Military Equipment Coordinator; 422 Capitola Avenue, Capitola, CA 95010
707.4 APPROVAL
The Chief of Police or the authorized designee shall obtain approval from the governing body by way of an ordinance adopting the military equipment policy. As part of the approval process, the Chief of Police or the authorized designee shall ensure the proposed military equipment policy is submitted to the governing body and is available on the department website at least 30 days prior to any public hearing concerning the military equipment at issue (Government Code § 7071). The military equipment policy must be approved by the governing body by May 1, 2022, for approval by the governing body within 180 days of the presentation (Government Code § 7071(2)) for continuing use of military equipment currently being utilized by the Department. Thereafter, the following must be approved by the governing body, prior to engaging in (Government Code § 7071):
(a) Requesting military equipment made available pursuant to 10 USC § 2576a. (b) Seeking funds for military equipment, including but not limited to applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers.
(c) Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.
(d) Collaborating with another law enforcement agency in the deployment or other use of military equipment within the jurisdiction of this department. (e) Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body.
(f) Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of military equipment.
(g) Acquiring military equipment through any means not provided above. 707.5 COORDINATION WITH OTHER JURISDICTIONS
Military equipment used by any member of this Department shall be approved for use and in accordance with this Departmental policy.Military equipment used by other jurisdictions that are providing mutual aid to this Department, or otherwise engaged in a law enforcement operation in this jurisdiction, shall comply with their respective military equipment use policies in rendering mutual aid as defined by Government Code § 7070; Government Code § 7071; and Government Code § 7072.
707.6 ANNUAL REPORT
Upon approval of a military equipment policy, the Chief of Police or the authorized designee should submit a military equipment report to the governing body for each type of military equipment 65 Item 7 B.
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approved within one year of approval, and annually thereafter for as long as the military equipment is available for use (Government Code § 7072).
The Chief of Police or the authorized designee should also make each annual military equipment report publicly available on the department website for as long as the military equipment is available for use. The report shall include all information required by Government Code § 7072 for the preceding calendar year for each type of military equipment in department inventory. 707.7 COMMUNITY ENGAGEMENT
Within 30 days of submitting and publicly releasing the annual report, the Department shall hold at least one well-publicized and conveniently located community engagement meeting, at which the Department should discuss the report and respond to public questions regarding the funding, acquisition, or use of military equipment.
707.8 MILITARY EQUIPMENT INVENTORY
The attached list is divided into three sections.
• Section One - lists qualifying equipment that is owned and/or utilized by the Capitola Police Department.
• Section Two - lists qualifying equipment that is not owned or regularly utilized by the Capitola Police Department, but which is known to be owned and/or utilized by law enforcement agencies which the Capitola Police Department collaborates and/ or participates for law enforcement purposes.
• Section Three - lists qualifying equipment that the Capitola Police Department will be procuring, with anticipated dates of procurement.
66 Item 7 B.
1 Military Equipment Use AB 481 – Annual Report
January 1, 2025 – December 31, 2025
Sarah A. Ryan, Chief of Police
67 Item 7 B.
2 1. Annual Reporting Requirements
AB 481 requires, on an annual basis, that the Police Department seek and obtain City Council approval for future acquisition and funding of military equipment and provide a report outlining how such equipment was used to ensure compliance with Department policy and City ordinance.
Capitola Municipal Code 2.60.050 requires the Police Department to submit an annual military equipment report to the City Council within one year of approval, and annually thereafter, for as long as the equipment is available for use. The report shall also be made publicly available on the Department’s website.
This report includes the following information for the preceding calendar year:
Summary of use and purpose
Complaints or concerns
Internal audits and policy compliance
Annual costs and funding sources
Quantity of equipment possessed
Planned acquisitions
Within 30 days of publication, the Department will hold at least one community engagement meeting.
68 Item 7 B.
3 2. Summary of Uses
Lethal Firearms and Ammunition
Firearms and ammunition were deployed during daily operations and POST-approved training. No uses occurred outside of training or authorized operational readiness.
Less-Lethal Shotgun and Ammunition
Less-lethal weapons were deployed during daily operations, POST-approved training and maintained for operational readiness.
Unmanned Aircraft Systems (UAS)
UAS were utilized during calls for service including suspect searches and support to fire personnel during emergency incidents. Use improved operational efficiency and safety.
3. Complaints or Concerns
No complaints or concerns were received.
4. Internal Audits
Routine supervisory review was conducted. No policy violations were identified.
5. Annual Costs
All equipment is funded through the Department’s operating budget. 69 Item 7 B.
4 6. Section One : Inventory of Equipment
Lethal Firearms (Department Issued)
Equipment Type: Colt LE6945 Patrol Rifle These rifles are standard issue service weapons for our officers and therefore exempted from this Military Equipment Use Policy per CA Gov’t Code §7070 (c)(10). They have been included in this document in an abundance of caution and in the interest of transparency.
Quantity: 6
Lifespan: 10 years
Capabilities: Intermediate cartridge rifle (.223/5.56) providing increased accuracy and range over a handgun.
Purpose: Address short- to long-distance threats while minimizing risk through precision.
Fiscal Impact: Approximately $200 Annually in maintenance.
Training: POST-certified 16 hour patrol rifle course and annual qualification.
Lethal Firearms (Personally Owned – Registered) These rifles are standard issue service weapons for our officers and therefore exempted from this Military Equipment Use Policy per CA Gov’t Code §7070 (c)(10). They have been included in this document in an abundance of caution and in the interest of transparency.
Smith & Wesson M&P 15 (.223/5.56)
Quantity: 5
Sig Sauer M400 (.223/5.56)
Quantity: 1
Rainier Arms RUC Mod 2 (.223/5.56)
Quantity: 1
Black Rain Ordnance Spec-15 (.223/5.56)
Quantity: 1
All personally owned rifles are registered per Department policy and used under the same training and policy requirements as Department-issued rifles. No fiscal impact to the Department.
Training: POST-certified 16-hour patrol rifle course and annual qualification.
Lethal Firearms (Department issued) These rifles are standard issue service weapons for our officers and therefore exempted from this Military Equipment Use Policy per CA Gov’t Code §7070 (c)(10). They have been included in this document in an abundance of caution and in the interest of transparency.
Primary Weapons Systems AR-15 with Suppressor
Quantity: 8
Lifespan: 10 years
Fiscal Impact: Approximately $600 annually in maintenance. 70 Item 7 B.
5 Training: POST-certified 16-hour patrol rifle course and annual qualification. .
Daniel Defense Delta 5 Pro (6.5 Creedmoor Precision Rifle) Quantity: 1
Lifespan: 15 years
Fiscal Impact: Approximately $150 annually in maintenance.
Purpose of both systems is to provide precision engagement capability at extended distances when necessary.
Training: POST-certified sniper course and annual qualification.
Lethal Ammunition
Winchester Ranger Duty Rifle Ammunition (.223)
Quantity: 5,000 rounds
Fiscal Impact: Approximately $560 per 1,000 rounds.
Hornady 6.5 Creedmoor TAP Precision
Quantity: 200 rounds
Fiscal Impact: Approximately $35.80 per 20 rounds.
Training Ammunition
Winchester 5.56 Target Ammunition
Quantity: 7,000 rounds
Fiscal Impact: Approximately $380 per 1,000 rounds.
Less-Lethal Weapons
Remington 870 Less-Lethal Shotgun
Quantity: 4
Lifespan: 15 years
71 Item 7 B.
6 Capabilities: Deploys less-lethal munitions to de-escalate incidents.
Fiscal Impact: Approximately $250 annually in maintenance.
Less-Lethal Ammunition
CTS Super-Sock Bean Bag Rounds
Quantity: 100
Lifespan: 5 years
Effective Range: 5–20 yards
Fiscal Impact: Approximately $814 per 100 rounds.
Unmanned Aircraft Systems (UAS)
DJI Mavic 3T, Mini 3, and Avata Platforms
Quantity: 5 total systems
Lifespan: Approximately 5 years
Capabilities: Live and recorded video, thermal imaging, search and rescue support.
Fiscal Impact: None.
Authorized Uses: Search and rescue, suspect apprehension, emergency response, documentation, and hazard monitoring.
Training: FAA part 107 license certification before being allowed to operate UAS.
7. Section Two: Equipment Use with Other
Jurisdictions
Military equipment used during mutual aid or joint operations complies with Government Code §§7070–7072 and respective agency policies.
8. Section Three: Planned Acquisitions
No new military equipment is planned for acquisition.
72 Item 7 B.
7 73
Item 7 B.
Capitola City Council
Agenda Report
Meeting: June 11, 2026
From: Administrative Services Department
Subject: Business Improvement Assessments for Fiscal Year 2026-27 Recommended Action: Adopt a resolution providing notice of the City’s intent to levy business improvement assessments for Fiscal Year 2026-27, receiving the annual report and proposed budget of the Capitola Village and Wharf Business Improvement Area, setting the date for a public hearing to be held on Thursday, June 25, 2026; and outlining noticing requirements.
Background: In June 2005, the City of Capitola adopted Ordinance No. 889, now codified as Capitola Municipal Code Chapter 5.10, which established the Capitola Village and Wharf Business Improvement Area (CVWBIA) to generate revenue for the exclusive purpose of promoting business in the CVWBIA. State law requires certain annual actions and a public hearing to continue this assessment district.
Discussion: In accordance with state law, the CVWBIA is required to submit an annual plan each year in order to levy assessments. The annual report (Attachment 2) was prepared by the CVWBIA and submitted to the City on May 14th. It fulfills the requirement for Fiscal Year (FY) 2026-27 and is submitted for Council review and approval. In addition, to continue levying the assessment, the City Council must, on an annual basis, adopt a resolution of intention notifying the business owners of the pending assessment, hold a public hearing, and adopt a resolution levying the assessment.
In November 2018, voters approved Measure J, which increased the local transient occupancy tax (TOT) from 10% to 12%. 20% of the TOT increase is designated for local business groups for marketing and community improvements. The proposed FY 2026-27 CVWBIA budget includes $37,000 of restricted TOT revenues.
Assessments for FY 2026-27 continue to be reduced by 25% while hotel/lodging dues are reduced by 50%. Gift certificates have been eliminated from all categories, and no late fee will be assessed. The CVWBIA Advisory Committee has recommended the assessment rates return to 100% over the next couple of fiscal years.
The annual report also outlines the CVWBIA’s FY 2026-27 planned activities, goals, and proposed budget. These include:
Improve access to information regarding the businesses and services provided by the CVWBIA to likely visitors to the area via newsletters, the internet, print, and television advertising;
Provide fun, family-oriented events throughout the year, emphasizing the attributes of the Village and Wharf;
Improve and enhance the appearance of the Village and Wharf in partnership with the City of Capitola;
Enhance the ability of the CVWBIA to serve as a liaison between the business community and local governments.
74 Item 7 C.
Pursuant to state law, staff recommends the City Council adopt the proposed resolution of intention providing notification of the City’s intent to levy business improvement assessments for FY 2026-27; the resolution officially receives the annual report and proposed budget of the CVWBIA; sets the date for a public hearing to be held on Thursday, June 25, 2026; and outlines noticing requirements.
A representative of the CVWBIA will attend the meeting; however, the CVWBIA’s presentation will be made at the public hearing on June 25th.
Fiscal Impact: There is no fiscal impact to the City. CVWBIA billing and accounts payable costs incurred by the City are offset by assessment revenues. The City and CVWBIA have reviewed the amounts charged by the City for these services and agree that they are reasonable.
Attachments:
1. Proposed Resolution
2. CVWBIA Annual Report
Report Prepared By: Jim Malberg, Administrative Services Director Reviewed By: Julia Gautho, City Clerk; Marc Tran, City Attorney Approved By: Jamie Goldstein, City Manager
75 Item 7 C.
RESOLUTION NO. _____
RESOLUTION OF INTENTION OF THE CITY COUNCIL
OF THE CITY OF CAPITOLA
TO LEVY BUSINESS IMPROVEMENT ASSESSMENTS
FOR FISCAL YEAR 2026-27 FOR THE CAPITOLA VILLAGE AND WHARF BUSINESS
IMPROVEMENT AREA (CVWBIA)
WHEREAS, the Capitola Village and Wharf Business Improvement Area (“CVWBIA”) has prepared a report to the City of Capitola for Fiscal Year 2026-27 pertaining to the Business Improvement Area assessments for the CVWBIA under California Streets and Highways Code §36533; and
WHEREAS, Capitola Municipal Code §5.10.050 requires annual assessments to be imposed within the CVWBIA pursuant to a formula set forth in City Council Resolution.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CAPITOLA AS FOLLOWS:
1. The Annual Report and Proposed Fiscal Year FY 2026-27 Budget of the CVWBIA pertaining to business improvement assessments, as presented in Exhibit A attached hereto, is received.
2. The City Council intends to levy and collect assessments within the CVWBIA for FY 2026-27.
3. The proposed activities authorized by Capitola Municipal Code Chapter 5.10 are described in the CVWBIA Annual Report. The activities financed from these funds include promotional information, media announcements, and advertising in regional magazines, broadcast services, and websites.
4. The CVWBIA is bounded per the map referenced in Municipal Code §5.10.020 and included in Ordinance 1003. The CVWBIA boundaries are not being altered this year.
5. The Annual Report of the CVWBIA and proposed assessments for FY 2026-27 attached as Exhibit A and on file with the City Clerk provide a full and detailed description of the improvements and activities to be provided during FY 2026-27 and the proposed assessments to be levied upon the businesses within the area.
6. The Capitola City Council will hold a public hearing at 6 p.m. on Thursday, June 25, 2026, to receive any oral or written protests or endorsements to the regularity or sufficiency of the proposed business improvement assessments. If written protests complying with Streets and Highways Code §36524 and §36525 are received from the owners of businesses which will pay fifty percent or more of the assessments, assessments will not be levied, the procedure will be terminated and will not be reconsidered until one full year has elapsed.
7. The City Clerk is directed to give notice of the public hearing to consider the levy of business improvement assessments for FY 2026-27 by publishing this Resolution of Intention in a newspaper of general circulation in the City once, at least seven days prior to the public hearing.
8. The CVWBIA Advisory Committee is directed to give notice of the public hearing to each business owner in the area by mailing a copy of the Council’s Resolution of Intention to each business within its boundaries.
I HEREBY CERTIFY that the above and foregoing resolution was passed and adopted by 76 Item 7 C.
the City Council of the City of Capitola at its regular meeting held on the 11th day of June 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
____________________________
Margaux Morgan, Mayor
ATTEST:
________________________________
Julia Gautho, City Clerk
77 Item 7 C.
EXHIBIT A
to
Resolution No. _______
Annual Report & Proposed Fiscal Year 2026-27 Budget
CVWBIA Assessment Basis
CVWBIA Business Listing and Assessment Method
Mission Statement
The objective of the CVWBIA is to provide a unified organization to promote, stimulate and improve the business conditions in the designated area, primarily during the shoulder season, September – May. The belief is that if the lodging properties and short-term rentals are full, the rest of the businesses in the area will benefit.
This can be achieved by the CVWBIA continuing to fund activities and projects that will:
Improve access to information regarding the businesses and services provided by the CVWBIA to likely visitors to the area via newsletters, the internet, print and television advertising.
Provide fun, family-oriented events throughout the year emphasizing the attributes of the Village and Wharf.
Improve and enhance the appearance of the Village and Wharf in partnership with the City of Capitola.
Enhance the ability of the CVWBIA to serve as a liaison between the business community and local governments.
In FY 2019-20 CVWBIA began to receive a portion of the Transient Occupancy Tax (TOT) collected by the City and made commitments based on projected TOT revenues. After the Covid closures, CVWBIA dues were reduced by 25%. In January 2023 storm related flooding caused major damage to the wharf and some village businesses. Recovery has moved swiftly and businesses are seeing a return to pre-Covid levels. Assessments will remain at the reduced level for this fiscal year.
As the CVWBIA begins its twenty-first year we will continue to expand successful programs from prior years, which include the following:
1. Website – In 2021-22 the CVWBIA marketing team created a new, up to date, mobile compatible, website (www.capitolavillage.com) for ease of use and connectivity to BIA member’s businesses, lodging and short-term rentals. Each member has a unique page with links to their individual websites. There is a schedule of events and other helpful features. Visitors can sign up on the site to receive newsletters. This process will continue in 2025-26 as technology changes quickly. We will also take advantage of opportunities to direct visitors to our website through QR Codes for special events, parking, and other visitor information.
Visitors can now access members’ website or business phone directly from the CVWBIA website. Monthly summaries of traffic to the site have shown the businesses the value of the website. The website is managed by Craig Nunes, Board Member and Volunteer Web Administrator.
2. Social Media – Our Communication Team is Opposite of East, Santa Cruz. They create a monthly newsletter, manage all our social media channels and plan new avenues to promote the village. Their blogs and itineraries are shared on social media channels and are available 78 Item 7 C.
on the website. Our email newsletters are sent to over 24,000 subscribers each month. Our Facebook page has over 29,786 followers with our top 5 cities being: San Jose, Santa Cruz, Modesto, Sacramento, and Capitola. This is a 35% increase over last year. Our Instagram has 30,730 active followers, a 24% increase over last year. The purpose of the Communication Team is to collectively promote the Capitola Village businesses and to be a resource for ongoing growth. Our Village Ambassador continues to develop relationships with our members to facilitate sharing their promotions and announcements. She also creates spotlight features of business owners for the website.
3. Advertising – While placing an emphasis on our social media development, there is still a need for carefully placed advertising in quality visitor publications. In addition to our ongoing Hulu campaign, this holiday we launched a campaign on KSBW to capture the local and near local customer. In 2026-27 the BIA will be producing a high-quality video which can be used on social media and modified for TV commercials.
4. Village Brochures – We print 25,000 brochures and distribute them throughout Santa Cruz County. A new addition to the brochure is a QR Code taking the visitor directly to our website.
Many visitors depend on their phones to access information while traveling.
We contract with Certified Display Service. This company has exclusive rights to lobby racks in hotels, resorts, and visitor centers in the county. These brochures are also available in various places of business throughout the Village and Wharf. We feel it is important to make visitors to other areas in the county aware of Capitola Village and Wharf through these brochures. Additionally, there are distribution locations at the Gilroy Visitors Center on Hwy 101, San Jose Airport, and the Monterey Airport.
5. Branding and Logo Development – In 2025-26 a new logo and color palate was created by our marketing team, Opposite of East. These are being integrated into all marking materials, our website and brochure.
6. Sip and Stroll & Cookie Walk – These events benefit all the businesses in the village. We hold Sip and Stroll events in November, February and May. The Cookie Walk is familyoriented and takes place the weekend after Thanksgiving.
7. Winter Festivities – Window decorating contest, lighted wreaths and palm trees are components of the winter festivities, In 2025-26 we held our first Holiday Extravaganza with palm tree lighting accompanied by cookies and hot chocolate from Shadowbrook and Gayles, community caroling throughout the village, the annual VW Christmas parade and late-night shopping.
79 Item 7 C.
8. Public Works and Village Enhancement – The CVWBIA contributes annually to the City of Capitola Public Works Department. Our contribution is used to help maintain the Village and Wharf. This year we are concentrating on landscaping and cleanliness of the village both in public spaces and private planting areas. The BIA has been instrumental in providing and maintaining parking signage for Long Term Parking in Lots 1 & 2. For 2026-27 we are developing a directory to be placed in the village featuring mosaic art by the artists who created the mosaics for the CVWBIA.
Assessment Basis
The method of assessment classifies businesses within the CVWBIA boundaries into nine categories:
1. Retail / Service businesses
2. Restaurant - Full Bar
3. Restaurant - Beer and Wine
4. Restaurant - No Alcohol
5. Wine/Beer Service
6. Seasonal Food Service
7. Office and Professional businesses / Specialty
8. Short-term Rental businesses
9. Hotel / Motel / Inn businesses
Assessment fees are assigned to these nine business categories by the number of full-time equivalent employees, a flat rate, and a per unit amount. Registered non-profits are exempt from assessment fees.
The following table shows the assessment fees for the proposed CVWBIA for FY 2026-27 at same level as last fiscal year.
Number of Full-Time Equivalent
Employees*
Business Category 0 – 5
employees
6 – 10
employees
More than
10 employees
Retail / Service $315 $630 N/A
Restaurant Full Bar N/A $720 $1,080
Restaurant Beer and Wine $367.50 $682.50 $1,042.50
Restaurant No Alcohol $315 $630 N/A
Flat Fee
Wine/Beer Service $315
Office / Professional / Specialty $90
Short-term Rental** $135
Seasonal Food Service $210
Per Unit Fee
Hotel / Motel / Inn $180 per unit
80 Item 7 C.
Footnote* “Full-time employee” is an employee who works 2,000 hours per year or more.
Multiple part-time employees are combined into a single full-time employee for the basis of this assessment calculation. (i.e. “fulltime equivalents”)
Footnote** “Short-term rental” businesses are defined as those dwellings which, at least once per fiscal year, are rented to a tenant for a tenancy of less than thirty days.
Associate Membership. CVWBIA is authorized to accept “associate membership” financial contributions from businesses outside the CVWBIA with approval of the board. The category and assessment will be the same as if the business is within the CVWBIA area.
New Business Assessment. Assessments will be prorated by the quarter in which a business opens.
Business Closing. A business notifying the CVWBIA before the end of the first quarter of the fiscal year (September 30th) that it will close before December 31st will be exempt from paying the assessment for that fiscal year. If the business does not close before December 31st, it must pay the year's assessment in full.
Late Charge. No late charge will be assessed with the FY 20256-26 dues.
Delinquencies. CVWBIA has a clear policy relative to delinquent assessments. Businesses that have not paid their assessment by October 31, 2025, will be removed from the CVWBIA website and brochure. They will be ineligible to participate in any CVWBIA activity. Assessments that have not been paid by January 31, 2026, may be sent to collections. 81 Item 7 C.
Capitola Village & Wharf Business Improvement Area Estimated Actual for FY 2023-24, Adopted FY 2024-25 and Proposed Budget for FY 2025-26 82 Item 7 C.
Capitola Village & Wharf Business Improvement Area
Budget Discussion
The CVWBIA will begin the Fiscal Year 2026-27 with an estimated fund balance of $5,000.
Revenues: The proposed revenue is derived from the CVWBIA business roster and corresponding assessment rates.
Expenditures:
Summary. The proposed expenditures are divided into these categories: Administration $16,800 City Services $7,200, Marketing & Village Enhancement $89,100, and Special Events $32,000.
The following is a roster of open businesses in the assessment area as of June 1, 2026 Capitola Village & Wharf Business Improvement Area
Business Listing and Assessment Method
Business Type Assessment Method Estimate Assessment
AM = Associate Member Associate Member AM $450
F1 = Restaurant Full Bar Per employee category: 6-10 EEs, >10 EEs F1 $7,200 F2 = Restaurant Beer & Wine Per employee category: 0-5 EEs, 6-10 EEs, >10 EEs F2 $2,888 F3 = Restaurant No Alcohol Per employee category: 0-5 EEs, 6-10 EEs F3 $3,465 F4 = Wine & Beer Service Flat fee F4 $1,575
F5 = Seasonal Food Flat fee F5 $210
H = Hotel/Motel/Inn Flat fee per unit or room H $9,360
O = Office/Professional Flat fee O $1,620
R = Retail/Service Per employee category: 0-5 EEs, 6-10 EEs R $12,915 SR = Short Term Rental Flat fee per unit SR $14,175
Total $53,857
Active Members
Business Name Type Est Size FY26-27 Dues
Paradise Beach Grille F1 11+ $1,080.00
Shadowbrook Restaurant F1 11+ $1,080.00
Zelda's F1 11+ $1,080.00
Britannia Arms Pub & Rest. F1 0 - 10 $720.00
Bay Bar and Grill F1 0-10 $720.00
The Sand Bar F1 0 - 10 $720.00
Margaritaville F1 11+ $1,080.00
Pete's Capitola F1 0-10 $720.00
El Toro Bravo F2 0 - 5 $367.50
Thai Basil F2 0 - 5 $367.50
My Thai Beach / Sea Side Siam F2 0 - 5 $367.50
Caruso's Tuscan Cuisine F2 0 - 5 $367.50
Avenue Café F2 0 - 5 $367.50
Tacos Moreno 3 F2 0 - 5 $367.50
Trestles Restaurant F2 6 - 10 $682.50
Mr. Toots Coffee & Tea F3 0 - 5 $315.00
Pizza My Heart F3 6 - 10 $630.00
83 Item 7 C.
Castagnola Deli & Café F3 0 - 5 $315.00
Polar Bear Ice Cream F3 6 - 10 $630.00
Mijos Taqueria F3 0 - 5 $315.00
Sandcastle Café F3 0 - 5 $315.00
Schneider Consulting LLC dba Boba Bay F3 0 - 5 $315.00
La Marea Café F3 0-5 $315.00
Sandy Scoops F3 0-5 $315.00
Armida Winery F4 $315.00
Capitola Tap House F4 $315.00
Brewtopia 831 F4 $315.00
Vin Vivant F4 $315.00
Cocoa Vino F4 $315.00
Left Coast Sausage Worx F5 $210.00
Venetian Hotel H 19 $3,420.00
Capitola Beach Suites H 10 $1,800.00
Inn at Depot Hill H 13 $2,340.00
Capitola Hotel H 10 $1,800.00
David Lyng & Associates O $90.00
Katz & Lapides O $90.00
Michael Lavigne Real Estate O $90.00
Newman & Marcus,LLP O $90.00
Suess Insurance Agency O $90.00
Latta O 0 - 5 $90.00
Ted Mendoza and Lisa Salinero Real Estate O $90.00
Law Offices of Sam Storey O $90.00
John H. McSpadden O $90.00
Miles J. Dolinger, Attorney at Law O $90.00
Art of Energy (Visions by Sheena) O $90.00
Capitola Village Massage O $90.00
Yellow Bus O $90.00
Monet Salon O $90.00
Community CPA O $90.00
Bare Skin & Body O $90.00
Andren Homes Property Management O $90.00
Wisemen Construction O $90.00
JFS Inc. dba Capitola Boat & Bait R 0 - 5
Big Kahuna Hawaiian Shirts R 0 - 5 $315.00
Craft Gallery R 0 - 5 $315.00
Craft Gallery Annex R 0 - 5 $315.00
Euphoria Rio Mix R 0 - 5 $315.00
Hot Feet R 0 - 5 $315.00
Kickback R 0 - 5 $315.00
Nubia Swimwear R 0 - 5 $315.00
Oceania R 0 - 5 $315.00
84 Item 7 C.
Phoebe's R 0 - 5 $315.00
Rainbow City Limit R 0 - 5 $315.00
Slap Happy R 0 - 5 $315.00
Super Silver R 0 - 5 $315.00
Sweet Asylum R 0 - 5 $315.00
Yvonne R 0 - 5 $315.00
Parking at the Mercantile R 0 - 5 $315.00
Parking at the Theater R 0 - 5 $315.00
Lumen Gallery R 0 - 5 $315.00
Capitola Reef R 0 - 5 $315.00
Art Inspired R 0 - 5 $315.00
Sea Level T's R 0 - 5 $315.00
Vanity by the Sea R 0 - 5 $315.00
Xandra Swimwear R 0 - 5 $315.00
Quality Market R 0 - 5 $315.00
Capitola Seashells R 0 - 5 $315.00
Pueblo Viejo Imports R 0 - 5 $315.00
Ethos Santa Cruz R 0 - 5 $315.00
Tony Pagliaro Photography R 0 - 5 $315.00
Mercantile Arcade R 0 - 5 $315.00
Carousel Taffy & Treats R 0 - 5 $315.00
Capitola Candy Company R 0 - 5 $315.00
Santa Cruz Apparel R 0 - 5 $315.00
Capitola Paws R 0 - 5 $315.00
Katalinas Boutique LLC R 0 - 5 $315.00
Clementine & Co. R 0 - 5 $315.00
Sun Drop R 0 - 5 $315.00
Brilliant Stones Jewelery R 0 - 5 $315.00
Surf Haus R 0-5 $315.00
The Chocolate Market Place R 0-5 $315.00
Jules Street Boutique R 0-5 $315.00
Mona Liza Art R 0-5 $315.00
Cove Lifestyle Boutique R 0-5 $315.00
Capitola Pelican House SR 1 $135.00
Capitola Venetian #5 SR 1 $135.00
Capitola Venetian #14 SR 1 $135.00
Capitola Venetian #8 SR 1 $135.00
Capitola Beach Bungalow SR 1 $135.00
Capitola Beach Cottage SR 1 $135.00
Capitola Cliffs Unit 3 SR 1 $135.00
Beach Bliss SR 1 $135.00
Relaxing Family Condo by the River SR 1 $135.00
Bridgepoint Bungalow SR 1 $135.00
Capitola Cliffs Unit 4 / Begonia Beach Cottage SR 2 $270.00 85 Item 7 C.
Capitola Venetian Unit 3 SR 1 $135.00
Capitola Venetian #1 SR 1 $135.00
Capitola Venetian #20 SR 1 $135.00
Capitola Cliffs #4960-2 SR 1 $135.00
Capitola Venetian #11 SR 1 $135.00
Beach Charmer SR 1 $135.00
Capitola Venetian #2 SR 1 $135.00
Castillo Properties SR 2 $270.00
Capitola Cliffs Unit #1 SR 1 $135.00
Deborah Cohen SR 1 $135.00
Bayside Capitola Beach Condo SR 1 $135.00
Capitola Vista #1 SR 1 $135.00
Capitola Vista #2 SR 1 $135.00
Capitola Vista #3 SR 1 $135.00
Capitola Vista #4 SR 1 $135.00
Capitola Sea Spray SR 1 $135.00
Creekside Cottage SR 1 $135.00
Capitola Cherry Ave. SR 1 $135.00
Luxurious Historic Windmill Silo House SR 2 $270.00
Grandma's Nest Capitola Venetian #9 SR 1 $135.00
CV Retreat with Garage SR 1 $135.00
Capitola Seashell Sanctuary Units A and B SR 2 $270.00
Vista Cortile Condo SR 1 $135.00
Capitola Village Deco Beach House SR 1 $135.00
Capitola Venetian #16 SR 1 $135.00
Capitola Breeze Condo & Seaview Condo SR 2 $270.00
Capitola Riverview #421 SR 2 $270.00
Capitola Riverview #323 SR 1 $135.00
An Iconic Oceanfront Pink Venetian SR 1 $135.00
114 - 116 Lawn Way LLC SR 2 $270.00
Capitola Village Retreat Units A & B SR 2 $270.00
Capitola Cliff House SR 1 $135.00
208 Monterey Ave. #A SR 1 $135.00
James Lin SR 1 $135.00
Urban Chic Living / Life is Better at Capitola Beach SR 2 $270.00 Capitola Oceanside SR 1 $135.00
Capitola Dreamin' SR 1 $135.00
Capitola Riverview #402 SR 1 $135.00
Capitola Riverview #310 SR 1 $135.00
Capitola Riverview #312 SR 1 $135.00
Oceanside Dream Beach House SR 1 $135.00
Capitola Trestles #5 SR 1 $135.00
Paradise Properties Capitola Village #321-B SR 1 $135.00 Bombora LLC Capitola Village #419 SR 2 $270.00
86 Item 7 C.
Colorful Capitola Village Cottage Unit A & Unit B SR 2 $270.00 Capitola Riverfront Home with Parking SR 1 $135.00
Surf Loft SR 1 $135.00
425 Capitola Ave. SR 1 $135.00
Beach Getaway in the Heart of CV / Brand New Luxury
CV Home
SR 2 $270.00
CV Condo, Dog Friendly, Free Parking SR 1 $135.00
CV Home with Parking Spot SR 1 $135.00
Riverview Retreat (A) / Oceanview Oasis (B) SR 2 $270.00 Capitola Hideaway SR 1 $135.00
Capitola Sands SR 1 $135.00
Kohala Properties 831 SR 1 $135.00
109 Monterey Avenue #9 SR 1 $135.00
Capitola Village Bungalow SR 1 $135.00
Capitola Village Hideaway SR 1 $135.00
321 Riverview Ave. SR 1 $135.00
Capitola Seaglass Cottage SR 1 $135.00
222 San Jose Ave. SR 1 $135.00
201 Monterey Avenue Suite 2 SR 1 $135.00
Lawn Way SR 1 $135.00
206 1/2 California Ave. SR 1 $135.00
108 Park Place Unit B SR 1 $135.00
1532 Wharf Rd SR 1 $135.00
210 Stockton Ave. Unit B SR 1 $135.00
318 Capitola Ave. #3 SR 1 $135.00
321 Capitola Ave. SR 1 $135.00
327 Riverview Ave. Unit B SR 1 $135.00
4960 Cliff Dr. #1 SR 1 $135.00
502 Beulah Dr. SR 1 $135.00
206 Stockton Ave. SR 1 $135.00
306 Riverview Ave. SR 1 $135.00
304 Riverview Ave. SR 1 $135.00
109 Monterey Avenue#2 SR 1 $135.00
Capitola Monterey 109-3 SR 1 $135.00
109 Monterey Ave. #6 SR 1 $135.00
Capitola Monterey 109-10 SR 1 $135.00
212 Stockton Ave. SR 1 $135.00
The Capitola Cottage SR 1 $135.00
427 Riverview Ave. Unit C SR 1 $135.00
Capitola Dreaming SR 1 $135.00
Associate Members
Fuse Architects O $90.00
Surf City Properties O $90.00
O'Neal Properties O $90.00
87 Item 7 C.
Beach Nest Vacation Rentals O $90.00
Kendall and Potter Property Management O $90.00
88 Item 7 C.
Capitola City Council
Agenda Report
Meeting: June 11, 2026
From: Administrative Services Department
Subject: City Investment Policy Amendment
Recommended Action: Adopt a resolution affirming the City's Administrative Policy Number III1, Investment Policy, as recommended by the Finance Advisory Committee.
Background: California Government Code §53630 et seq. contains State requirements for the deposit of City funds. Government Code §53635 requires that all money belonging to, or in the custody of, a local agency be deposited in certain allowable instruments. The current Investment Policy was approved by the City Council on August 9, 2001, by adoption of Resolution No. 3149, affirming the City’s Investment Policy. This resolution was then incorporated into the City’s Administrative Policies. California Government Code requires a city to annually review its investment policy.
Discussion: The California Debt and Investment Advisory Committee annually updates the Local Agency Investment Guidelines, which lists the allowable investment options for local public agencies. The City’s Investment Policy states that the investment policy, or any modification thereof, shall be formulated by the City Treasurer and approved by the City Council.
Understanding the order of importance, the investment policy shall:
1. Provide for the safety of the funds
2. Assure the liquidity of the funds
3. Acquire earnings of the funds
At the May 26, 2026, Finance Advisory Committee (FAC) special meeting, the committee reviewed the investment policy and recommended confirming it without any changes at this time.
However, the FAC did request that the policy be reviewed for updates during FY 2026-27. The City’s current Investment Policy and Investment Portfolio comply with all state laws and regulations.
Fiscal Impact: None.
Attachments:
1. Resolution
2. Administrative Policy Number III-1, Investment Policy Report Prepared By: Jim Malberg, Administrative Services Director Reviewed By: Julia Gautho, City Clerk; Marc Tran, City Attorney Approved By: Jamie Goldstein, City Manager
89 Item 7 D.
RESOLUTION NO. _____
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPITOLA
AMENDING ADMINISTRATIVE POLICY III-I – INVESTMENT POLICY WHEREAS, on May 9, 1996, the City Council adopted Resolution No. 2788 governing the investment of cash held in the City Treasury; and
WHEREAS, on June 12, 2025, adopted Resolution No. 4430 affirming the City’s Investment Policy; and
WHEREAS, the City Council is required to annually affirm the City’s investment policy as part of the annual budget adoption process; and
NOW, THEREFORE, BE IT HEREBY RESOLVED that the City Council of the City of Capitola hereby approved Administrative Policy III-I – Investment Policy as shown on Exhibit A to this resolution; and
BE IT FURTHER RESOLVED that the City Treasurer is directed to invest cash held in the City Treasury in accordance with the City’s Investment Policy.
I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the City Council of the City of Capitola on the 11
th day of June, 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
_____________________
Margaux Morgan, Mayor
ATTEST:
____________________
Julia Gautho, City Clerk
90 Item 7 D.
91 Item 7 D.
Capitola City Council
Agenda Report
Meeting: June 11, 2026
From: City Manager Department
Subject: Transition to Districts – Second Public Hearing Recommended Action: 1) Conduct a duly noticed time-certain public hearing at 6:15 PM and receive public input regarding the composition of the potential Council election districts; 2) provide direction on Council’s preference for five Council districts with a rotating Mayor, or for four Council districts with a Citywide-elected Mayor; and 3) if a Citywide-elected Mayor is preferred, provide guidance on whether the Mayoral term should be two years or four years.
Background: The City Council was elected under an at-large election system, whereby Council Members are elected by voters of the entire City. On May 28, 2026, the City Council adopted Resolution No. 4489, updating the timeline for the transition to districts.
Timeline for District Development: The California Voting Rights Act (CVRA) requires the City to hold at least two public hearings over the next thirty (30) days, at which the public is invited to provide input regarding the composition of the districts. Those dates were established as May 28th and June 11th, and the public hearings both begin at 6:15 PM. No official maps can be drawn before the completion of these two (2) public meetings. Once the initial two meetings are complete, a demographer and the public can begin to draw maps that will be considered in the districting process.
The City will hold at least two additional public hearings over the following forty-five (45) days to receive input on the draft maps and the proposed election sequencing. Those dates are established as June 25 and July 23, both with a fixed 6:15 PM hearing start time. If a map is selected and is unchanged from what is presented at the 4th public hearing, then a first reading/introduction of an ordinance transitioning to districts and adopting that same map may be conducted at the 4th public hearing.
Thereafter, if the selected map continues to be unchanged, then a second reading/adoption of the ordinance may be conducted at a 5th public hearing. That date is established as August 28th. Anytime a map is changed, a seven (7) day notice must be published and made available, as applicable, and a subsequent public hearing would have to be held before the map can be considered for adoption. As such, depending on the number and timing of the changes, the tentative timeline (e.g., the number of public hearings) may change.
The City will also need to comply with the Fair and Inclusive Redistricting for Municipalities and Political Subdivisions Act (Fair Maps Act), which provides criteria the City must use when establishing election district boundaries or when undertaking the redistricting process (which must occur every ten years after each population census). These criteria include compliance with the United States Constitution, the California Constitution, CVRA, and the federal Voting Rights Act. The Fair Maps Act also prohibits the adoption of district boundaries for the purpose of favoring or discriminating against an incumbent councilmember, political candidate, or political party.
June 11, 2026, Meeting Format: On May 28, 2026, the City Council provided direction to staff to host additional opportunities for public outreach before the June 11th public hearing. Staff intends to invite the public to provide input through multiple opportunities:
Pre-Submit Questions: Members of the public may submit questions about the Districting process via email at [email protected], or via the City’s website. Questions received between June 1 and June 11 will be addressed during the public hearing. 92 Item 8 A.
Community Outreach Opportunity at 4:30 PM: Held in-person in the Community Room, the public can engage in a direct question-and-answer session with the demographer and staff. Staff will be present to record questions, provide printed materials, and offer additional input. Public Hearing at 6:15 PM: Held as a part of the regularly scheduled June 11th Council meeting, members of the public can attend the Council meeting to receive a presentation from the demographer and ask questions or provide comments to the Council. The following is an outline of the item order:
o Staff/Demographer Presentation
Will include an outline of how the public may participate during the public hearing o Overview of available FAQs and recently submitted questions and answers o Council Questions
o Questions from the Public – Members of the public may write questions down and submit them to staff until the conclusion of Council questions. o Demographer and staff respond to questions
o Public Comment – 3 minutes per person
o Council Deliberation/Direction
Discussion: The June 11th hearing partially fulfills the requirement of California Elections Code Section 10010 that states:
“(1) Before drawing a draft map or maps of the proposed boundaries of the districts, the political subdivision shall hold at least two public hearings over a period of no more than thirty days, at which the public is invited to provide input regarding the composition of the districts.” The intention of this hearing is to identify the neighborhoods, other “communities of interest,” and other local factors that should be considered or used as ‘building blocks’ when the drawing of draft maps begins. The public is welcome to propose complete districting maps, but it is not required.
Four vs. Five Districts: California Government Code Section 34886 enables cities to change to by-district elections by ordinance:
“Notwithstanding Section 34871 or any other law, the legislative body of a city may adopt an ordinance that requires the members of the legislative body to be elected by district or by district with an elective mayor, as described in subdivisions (a) and (c) of Section 34871, without being required to submit the ordinance to the voters for approval. An ordinance adopted pursuant to this section shall comply with the requirements and criteria of Section 21130 of the Elections Code and include a declaration that the change in the method of electing members of the legislative body is being made in furtherance of the purposes of the California Voting Rights Act of 2001 (Chapter 1.5 (commencing with Section 14025) of Division 14 of the Elections Code).” As noted, part of this process is the decision to change to four districts with an elective mayor, or to five districts with a Council-selected rotating mayor. In NDC’s experience, the process goes smoother the earlier this decision is made, as residents then focus on how to draw and select the best four- or fivedistrict map, rather than on whether to have four or five districts.
The resulting recommendation is for the Council to give (non-binding) direction on whether to develop four-district or five-district scenarios at the end of this public hearing.
The Council can reverse this decision at any time prior to second reading or the districting ordinance; however, changing this decision may require scheduling additional hearings prior to final adoption, which may affect the City’s ability to complete the process in a timely manner.
Public Outreach: The transition to districts requires significant public outreach, and staff have already initiated efforts to make sure that the public is informed throughout the process. Staff created a dedicated webpage for district elections. The website is updated with all information, documents (like staff reports/presentations from Council meetings), and a section 93 Item 8 A.
with meeting video footage and a brief summary of action taken:
https://www.cityofcapitola.gov/1001/District-Based-Elections o A subpage is available for access to the public mapping tool provided by NDC, including access to the printable PDF map for public use.
o A subpage is available for access to map submissions received from the public. o The City’s entire website is translatable into multiple languages, ensuring accessibility for non-English speaking residents.
o Based on feedback at the May 14 meeting, staff updated the webpage to better clarify meeting dates and start times.
Staff developed two frequently asked questions (FAQ) documents: one for general district questions, and one specifically tailored to the discussion about number of districts and the differences between an at-large mayor and rotating mayor. o Staff created a dedicated email address where members of the public can submit questions, comments, or send maps: [email protected] o Staff created a web form where members of the public can submit questions about the transition to districts. A link to the web form is available on the City’s webpage, linked above.
o The questions will be regularly summarized and answered in an updated FAQ document, uploaded to the webpage periodically.
Staff sent out the first of two mailers to all residences in Capitola. The mailers will include information about upcoming meeting dates and how to participate in both English and Spanish.
The second mailer will be sent out to align with the publication of the first round of maps and will include meeting dates and opportunities for public input regarding the maps.
Fiscal Impact: The City has already amended the FY 2025-26 Budget to allocate funds for the transition to districts. There is no fiscal impact associated with the recommended action. Additional costs will be incurred for legal fees and plaintiff costs. Those will be presented to Council at a future meeting, once determined.
Attachments:
1. Public Comments Received
Alignment with 2025-2029 Strategic Plan Priority: Accountable Government Report Prepared By: Julia Gautho, City Clerk
Reviewed By: Marc Tran, City Attorney
Approved By: Jamie Goldstein, City Manager
94 Item 8 A.
1 Gautho, Julia
From: Ann Sullivan <[email protected]>
Sent: Saturday, May 30, 2026 4:51 PM
To: City Council
Subject: Capitola districting vote
Dear Council,
My Husband and I will be out of town for the city meeƟng .You have asked for community input . We would like to state our preference for Capitola . We would prefer 4 districts and 1 elected mayor .
Thank you for your conƟnuous service and dedicaƟon to our community! Thank you for your Ɵme
Best regards,
Ann Sullivan and Eric Anderson
Full Ɵme residents 10 years
1575 Prospect Ave
Capitola , Ca
. from my iPhone
95 Item 8 A.
1 Gautho, Julia
From: michael routh <[email protected]>
Sent: Monday, June 1, 2026 7:41 AM
To: City Council
Cc: Goldstein, Jamie
Subject: Race based District elections and the CVRA
Council members,
This is an AI generated response from the quesƟon asked. It should generate pause in your reacƟon to the extorƟonate demand to form city elecƟon districts based on CommuniƟes of Interest. It is a more comprehensive response than any received from the city aƩorney thus far. It appears that creaƟng any voƟng districts based on race can be subject to legal challenge and likely will have to be redrawn. If the city bases districts on geographical/community Ɵes they will more likely withstand a legal test. It seems foolish to spend city funds on a demographic study to form voƟng districts based on race when they are likely to be subject to legal challenge. It would make more sense at this point in Ɵme, if it is determined to form voƟng districts, to base them on geographical/community Ɵes QuesƟon: Will Louisiana vs Callais render secƟons of the CVRA requiring ciƟes to form districts of communiƟes of interest unconsƟtuƟonal?
This is a Ɵmely and important quesƟon, especially since Callais was only decided April 29, 2026. Here’s what we know:
The short answer: Possibly yes — the CVRA is now legally vulnerable.
The Callais decision significantly limits race-based remedies for minority vote diluƟon, including race-conscious maps, making them more difficult to defend in court without clear evidence of discriminaƟon.
Why the CVRA is at risk:
The CVRA permits, and effecƟvely encourages, consideraƟon of race in map drawing, seƫng up a potenƟal conflict with federal law. Local governments should take a close look at how their current maps were drawn, as jurisdicƟons that relied heavily on race under the CVRA could face new legal challenges.
It’s currently unclear how the Supreme Court’s decision in Callais may affect state laws based on the VRA, such as the California VoƟng Rights Act (CVRA). However, the Supreme Court may have opened the door to new lawsuits challenging districts created under the CVRA.
The scale of potenƟal disrupƟon:
Maps across California — from congressional to city council seats — have been drawn along racial lines for decades.
Since the CVRA was passed in 2001, hundreds of local governments have abandoned their at-large elecƟon systems for district-based voƟng, oŌen resulƟng in race-conscious maps. All of that could now be in quesƟon.
California’s response:
California enacted the CVRA of 2001 as the naƟon’s first state voƟng rights act, and since its passage more than 600 local governments have abandoned at-large elecƟons, many in response to claims they were weakening the voƟng power of communiƟes of color. Now, advocates are pushing to pass the CVRA of 2026 urgently to modernize the state’s voƟng rights act and protect vulnerable populaƟons from federal aƩacks.
The key legal disƟncƟon to watch is whether California’s “communiƟes of interest” framework is grounded primarily in race or in geographic/poliƟcal community Ɵes. Districts jusƟfied on race-neutral community-of-interest grounds have a stronger legal fooƟng post-Callais than those where race was the predominant factor in drawing lines. LiƟgaƟon will likely sort this out over the next few years. Sent from my iPad 96 Item 8 A.
1 Gautho, Julia
From: michael routh <[email protected]>
Sent: Monday, June 1, 2026 8:20 AM
To: City Council
Cc: Goldstein, Jamie
Subject: Recommended actions re: Shenkman threat
This is a follow up to the previous email. It is particularly important to look at Option #3 and ask why this option has not been recommended by our city attorney.
QUESTION: If a city is currently under threat of a lawsuit to form city council voting districts based on Communities of Interest (race), what should the city's response be? This is exactly the kind of situation where the city needs legal counsel — I’m not a lawyer and can’t give legal advice. But I can outline the general strategic considerations cities are weighing right now postCallais.
The core tension the city faces:
The old playbook was: settle quickly, form districts, avoid liability under the CVRA. That calculus has shifted. Forming race-conscious districts now could expose the city to a racial gerrymandering lawsuit under the 14th Amendment — the very theory that won in Callais. The city is potentially caught between two legal risks.
General options being discussed:
1. Do nothing / contest the lawsuit — argue that Callais changed the legal landscape and the threatened claim is now weaker or unviable. Higher litigation risk but may be defensible.
2. Form districts on race-neutral grounds — draw districts based on genuine communities of interest defined by geography, shared interests, neighborhood boundaries, language, etc. — not race as the predominant factor. This is probably the most defensible path under current law.
3. Seek a declaratory judgment — proactively ask a court to clarify what the city is legally required to do given the conflicting legal landscape post-Callais.
4. Wait for California legislative clarity — the CVRA of 2026 is moving through the state legislature right now and may redefine the legal framework.
The practical advice most election law attorneys are giving cities right now is to document that any district formation was driven by race-neutral criteria — compactness, neighborhoods, political subdivisions — even if those districts happen to provide minority representation. The why behind how lines are drawn matters enormously under Callais.
The city should get specialized election law counsel immediately, ideally someone tracking the postCallais litigation landscape in California specifically.
Sent from my iPad
97 Item 8 A.
TRANSITION TO DISTRICTS
PUBLIC HEARING #2
June 11, 2026, 6:15 PM 98
Item 8 A.
June 11: City Council PH # 2
Staff/Consultant Presentation
Council Questions
Questions from Public
Cards Available
Answers from Staff/Demographer
Public Comment
Council Deliberation
99 Item 8 A.
Recommended Action
1) Conduct a public hearing to discuss the
transition to districts;
2) Receive community input;
3) Provide direction on composition/number of
voting districts
100
Item 8 A.
Districting Background To Date
1. City receives letter alleging violation (3/19)
2. Adopted resolution of intent (4/30)
3. Hired NDC as demographer (4/30)
4. Launched website (4/27)
1. Q&A
2. Mapping tool
5. Mailer (5/22)
6. Informational meeting (5/14)
7. First Public Hearing (5/28)
8. In Person Community Q & A (6/11)
101
Item 8 A.
Public Outreach
Website updates
General Districting Info
Public Mapping Tool
Submit Questions/Comments
Map Submissions
FAQ documents – will continue to create more based on public input
Dedicated email address: [email protected] Direct mailers to residences of Capitola – 1 of 2 sent 102
Item 8 A.
Updated Timeline Moving Forward
1. Two public hearings to receive input on district
composition (5/28 & 6/11)
1. No official maps drawn/discussed till after this stage
2. 2
nd Mailer sent to residents
3. Publish first draft maps for feedback (6/17)
4. Weekend Community Outreach Meeting (6/20) to
obtain public input
5. Hold two more public hearings to receive
feedback/refine maps (6/25 & 7/23)
6. Final maps adopted 8/27, before extended deadline
(8/28)
103
Item 8 A.
Total Meeting Timeline
104
Item 8 A.
Community Q&A Session 6/11
Held in Community Room from 4:30-5:30 PM
Approx. 24 attendees
20 questions received/answered
Topics:
Population balancing
Census data
Map submissions
Term limits
105
Item 8 A.
Public Input To Date
Input at Council Meetings:
4/23: 2 emails, 4 speakers
4/30: 8 emails, 8 speakers
5/14: 1 email, 3 speakers
5/28: 7 emails, 5 speakers
6/11: 12 emails
Public Map Submissions
10 as of 6/5/2026
Questions/Comments Submitted Via Form
7 total as of 6/10/2026
106
Item 8 A.
Previously Submitted Questions
FAQ Documents (3)
General
Mayor Specific
Questions Received in May
Question Form
Social Media/Website
Pre-Submitted Questions to Answer Tonight
submitted since June 1: Three
107
Item 8 A.
Pre-Submitted Question 1
“Please post this question in its entirety. The information prior to the specific question gives context and credence for the purpose of the question. In 2025, Council Member Alexander Pedersen was forced to resign when it became known his primary residence was not within Capitola City limits, a requirement by California State law and a state felony when violated.
Capitola City Attorney, Samantha Zutler stated in several meetings (May 22, 2025, June 12, 2025, and July 24 that the City lacked an established policy for it (residency). She also stated that she would need to check the legal limitations and see if the city even had the authority to force candidates to hand over those specific documents. The City Clerk also stated that she has never heard of city with a requirement to prove residency. This issue is problematic and will become more so with the proposal of districts. To this date the City has not addressed the issue. So, will the City establish AND enforce a policy requiring candidates to show proof of residency in the city and the district they run for? If so, what steps will be required.”
108
Item 8 A.
Pre-Submitted Question 2/3
“Please have the city attorney explain how basing
districts on communities of interest is in compliance
with the U.S. Constitution in light of Louisiana vs
Callais.”
“Are there any examples of cities Capitola’s size
that have transitioned to districts?”
109
Item 8 A.
Share Your Thoughts
Website
CityOfCapitola.gov/1001/District-Based-Elections
Phone
(831) 475-7300
Email
[email protected]
110
Item 8 A.
Recommended Action
1) Conduct a public hearing to discuss the
transition to districts;
2) Receive community input;
3) Provide direction on composition/number of
voting districts
111
Item 8 A.
City of Capitola
Introduction to Districting
June 11, 2026 112
Item 8 A.
5 Equal Population
Federal Voting Rights Act
No Racial Gerrymandering
“Shall not adopt election district
boundaries for the purpose of
favoring or discriminating against
an incumbent, political candidate,
or political party.”
1. Federal Laws 2. California Criteria
In prioritized order:
1. Geographically contiguous
2. Avoid division of
neighborhoods and
“communities of interest”
(Socio-economic geographic areas
that should be kept together)
3. Easily identifiable
boundaries
4. Compact
(Do not bypass one group of
people to get to a more distant
group of people)
2. California Prohibition
Districting Rules and Goals
Future population growth
3. Other Traditional
Redistricting Principles
June 11, 2026 113
Item 8 A.
6 Public Mapping and Map Review Tools
Different tools for different levels of technical skill and interest
1. Simple “review draft maps” tool
2. Easy-to-use “Draw your neighborhood” tool
3. Paper-based simple “Draw a draft map” tool
4. Powerful, data-rich online “Draw a draft map” tool
June 11, 2026 114
Item 8 A.
7 Share Your Thoughts
Website
CityOfCapitola.gov/1001/District-Based-Elections
Phone
(831) 475-7300
Email
[email protected]
June 11, 2026 115
Item 8 A.
9 Your Turn: Hearing #2
1. Do you prefer 5 districts or 4 districts with a Citywideelected Mayor?
2. What area do you consider your neighborhood?
3. What are your “communities of interest”?
June 11, 2026 116
Item 8 A.
Capitola City Council
Agenda Report
Meeting: June 11, 2026
From: Administrative Services Department
Subject: Fiscal Year 2026-27 Operating Budget and Five-Year Capital Improvement Program
Recommended Action: Adopt a resolution adopting the Fiscal Year 2026-27 City Budget and Five -Year Capital Improvement Program.
Background: The Proposed Fiscal Year (FY) 2026-27 Budget and Planned FY 2027-28 Budget was first presented to the City Council at a special meeting on May 5, 2026. At that meeting, the Council received input from the Finance Advisory Committee (FAC) and requested additional information, which was presented at the second special meeting on May 21, 2026. During that meeting, the Council reviewed updates to the proposed budget and heard public comments.
At the May 21
st special meeting, the Council discussed including a general fund summary page showing a line item for Measure Y projects to improve transparency. Additionally, Council requested that staff return early during FY 2026-27 to follow up on one-time revenues and reserve fund balances, paid parking rates, holiday parking in the Village, and Junior Guard Parking Permits. Ultimately, the Council directed staff to provide any additional FAC recommendations following their May 26th meeting, cancel remaining special meetings, and prepare a resolution to adopt the budget.
Discussion: The Proposed FY 2026-27 Budget estimates the General Fund ending balance on June 30, 2027, to be $94,957, well below the City’s traditional target fund balance of $500,000.
In addition, the Contingency and Emergency Reserve levels are cumulatively approximately $900,000 below policy targets due to impacts from the 2023 storms and delays in reimbursements from CalOES/FEMA and insurance. Since the last budget hearing, the City has received confirmation of a $1,000,000 insurance reimbursement from the 2023 storms, which when received will bring Reserve levels back to policy targets. Staff will return to Council in September to report on FY 2025-26 final sale tax revenue and actual ending General Fund balance, as well as FY 2026-27 pending one-time revenues.
Pursuant to City Council direction and the recommendation of the FAC, staff has included additional information regarding Measure Y district sales tax revenues.
The CIP budget document is organized to present a Citywide overview of capital investment by fiscal year and funding source. The financial summary tables provide a Citywide overview of projects, while the detailed project sheets present individual project descriptions, estimated costs, funding sources, and schedules. Project detail sheets include active projects, planning efforts, concept projects, completed projects, and emerging capital needs identified through ongoing infrastructure and facility planning.
The Finance Advisory Committee (FAC) met on May 5th and again on May 26th to review the proposed budget. The FAC unanimously recommended that the City Council adopt the FY 2026- 117
Item 8 B.
27 Proposed Budget with the same request that staff return early during FY 2026-27 with followup on the same items identified by the City Council during their May 21st special meeting.
The resolution necessary to adopt the Fiscal Year 2026-27 Budget and Capital Improvement Program includes a General Fund overview and an estimation of FY 2026-27 fund balances. In addition, the FY 2026-27 Proposed Budget and the FY 2026-27 to FY 2030-31 Proposed Capital Improvement Plan Budget are available on the City’s website.
Fiscal Impact: The fiscal impact is shown in the attached General Fund overview and fund balance summary.
Attachments:
1. Resolution
a. FY 2026-27 Proposed Budget
b. Five-Year Capital Improvement Program
2. General Fund Summary
3. Fund Balance Summary
Report Prepared By: Jim Malberg, Administrative Services Director Reviewed By: Julia Gautho, City Clerk; Marc Tran, City Attorney Approved By: Jamie Goldstein, City Manager
118
Item 8 B.
RESOLUTION NO. _____
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPITOLA APPROVING AND ADOPTING THE FISCAL YEAR 2026-27 CITY BUDGET AND THE FISCAL YEAR 2026-27 TO FISCAL YEAR 2030-31 CAPITAL IMPROVEMENT PROGRAM BUDGET
WHEREAS, City staff has prepared a proposed a proposed Fiscal Year 2026-27 City budget; WHEREAS, the City annually adopts and updates a long-range program of proposed capital improvement projects with single and multiple-year capital expenditures to guide the planning, scheduling, and budgeting of capital improvement projects during the next five-year period; and WHEREAS, City staff has prepared a proposed Capital Improvement Plan for Fiscal Years 2026-27 to 2030-31 which includes appropriations for each capital improvement project presented in the annual budget, with some projects spanning multiple fiscal years; and WHEREAS, it is necessary to adopt the Fiscal Year 2026-27 City Budget for all City funds and the Fiscal Year 2026-27 to Fiscal Year 2030-31 Capital Improvement Program Budget; and WHEREAS, the City Council has conducted budget study sessions, has heard and considered public comments, has modified the proposed Fiscal Year 2026-27 Budget and the Fiscal Year 2026-27 to Fiscal Year 2030-31 Capital Improvement Program Budget, and wishes to adopt such budgets for the Fiscal Year July 1, 2026, through June 30, 2027.
NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Capitola that the 2026-27 Fiscal Year Budget attached hereto as Exhibit A is hereby approved and adopted; BE IT FURTHER RESOLVED that the Capital Improvement Program Budget attached hereto as Exhibit B is hereby approved and adopted; and BE IT FURTHER RESOLVED that the Finance Director is directed to enter the adopted budget into the City's accounting records in accordance with appropriate accounting practices, and the City Manager, with the Finance Director's assistance, shall assure compliance therewith.
I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the City Council of the City of Capitola on the 11th day of June, 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
_____________________
Margaux Morgan, Mayor
ATTEST:
____________________
Julia Gautho, City Clerk
119
Item 8 B.
PROPOSED BUDGET
FISCAL YEAR 2026-27
CITY OF CAPITOLA
Capitola, California
120
Item 8 B.
CITY COUNCIL
Margaux Morgan, Mayor
Gerry Jensen, Vice Mayor
Joe Clarke
Melinda Orbach
Susan Westman
Jamie Goldstein, City Manager
Sarah Ryan, Chief of Police
Jessica Kahn, Public Works Director
Jim Malberg, Administrative Services Director / Treasurer Katie Herlihy, Community & Economic Development Director Nikki Bryant, Community Services & Recreation Director
Chloe Woodmansee, Assistant to the City Manager
Julia Gautho, City Clerk
121
Item 8 B.
THIS PAGE LEFT INTENTIONALLY BLANK
122
Item 8 B.
California Society of Municipal
Finance Officers
Certificate of Award
Operating Budget Excellence Award
Fiscal Year 2025-2026
Presented to the
City of Capitola
For meeting the criteria established to achieve a CSMFO Award in Budgeting.
February 5, 2026
Jennifer Wakeman James Russell-Field, Chair 2025 CSMFO President Recognition Committee Dedicated to Excellence in Municipal Financial Reporting 123
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Mission and Values
Mission - Why we’re here
We are a vibrant coastal community committed to delivering dependable, accessible services that foster connection and belonging through participatory governance.
Vision - Where we’re going
The City of Capitola is a thriving, family-friendly community that prioritizes resident needs while fostering a healthy balance between sustainable tourism, economic growth, and coastal environment and lifestyle.
Values – The Capitola Way
Collaborative Engagement
Dynamic Innovation
Fiscal Sustainability
Resilient Community
Respectful Service
Responsible Growth
Strategic Priorities:
1. Accountable Government
2. Attainable Housing
3. Community Safety
4. Economic Opportunity
5. Healthy Families, Community, and Environment
6. Sustainable Infrastructure
Approved March 2025
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TO: City Council
FROM: City Manager
SUBJECT: FY 2026-27 Proposed and FY 2027-28 Planned Budget.
CITY MANAGER’S MESSAGE - STATE OF THE CITY
On behalf of City staff, I am pleased to submit the proposed budget for Fiscal Year (FY) 2026-27.
Staff was tasked with developing a budget that continues to deliver the high-quality services the community is accustomed to while also allocating available resources to City Council goals and strategic priorities. The result is a balanced budget, however the projected ending General Fund balance of $94,957 is well below the typical minimum target general fund balance of $500,000.
The fund balance in the General Fund is projected to remain positive for the next fiscal year, however, based on known increases related to CalPERS pension costs and current assumptions regarding inflation, the General Fund will become structurally imbalanced in FY 2028-29. With overwhelming voter approval, Measure Y became a new revenue stream in early 2025. That revenue is critical in the proposed FY 2026-27 budget to avoid deep service level cuts. Without the Measure Y revenue, the City would have likely had to reduce staffing by approximately 6% this fiscal year, eliminate all discretionary contracts and eliminate funding for nonprofit service providers. More significant cuts would likely have been necessary in 2027, which was the expiration of Measure F.
The budget provides resources to maintain a high level of service for Capitola residents this coming fiscal year. Nevertheless, the City must also remain focused on the long-term budget picture, which not only includes a great deal of uncertainty around general fund revenues but must continue to address increasing pension costs. The erratic revenue data, uncertain economic stability at the national level, and projected rising pension costs will likely result in very challenging budgetary decisions for several years. In the coming fiscal year, staff will continue to closely monitor general fund revenues, paying extra attention to sales and transient occupancy tax performance, and continue to report to the City Council on a regular basis. Additionally, staff will develop options for Council consideration to balance the near- and longer-term budgets as well as focus on the long-term structural budget issues.
Storm damages from 2023 and 2024 were categorized into fifteen projects of which FEMA and Cal OES have approved fourteen for reimbursement totaling $291,918 with the City responsible for matching funds of $8,360. To date, we have received $291,918 with $962,069 still outstanding for wharf repairs.
Staff recommends the City hold off on allocating any additional FEMA/Cal OES reimbursement until those funds are received. One potential use for these funds is to replenish reserve funding used to respond to the recent series of emergency events.
The Capitola Mall remains a major funding source for the City; however, long-term national and local trends have put significant pressure on existing brick-and-mortar retailers to remain 3 126
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competitive with internet options. The Mall was purchased in 2016 by Merlone Geier Partners, which also acquired the old Sears building in 2018. In FY 2019-20 the new owners initiated a public process, including a public meeting and regional survey of residents to begin evaluating options to redevelop the Mall.
City staff remains actively engaged with Mall ownership to help them navigate the development review processes; however, the pandemic put the project on pause. Obviously, the long-term fiscal health of the City is closely related to a successful Mall that meets the community’s needs.
As the outcome of any potential Mall redevelopment is unknown at this time, the site remains a major opportunity, and challenge, as the City evaluates its long-term fiscal position.
In 2016 voters passed Measure F to extend a temporary quarter percent local sales tax for an additional 10 years. The primary purpose of Measure F was to utilize the funding to protect City infrastructure from storms and rising sea levels. The City completed Measure projects , including rebuilding the wharf, flume and jetty earlier than anticipated. In response to early project completion, the City put Measure Y on the ballot in 2024 to repeal Measure F and replace it with a new half percent local sales tax for 10 years. Voters passed Measure Y with 67% approval. The City implemented salary adjustments for most of city staff in January 2025 as a result of this tax measure passing to maintain competitive salary ranges.
BUDGETARY GOALS AND PRINCIPLES
The FY 2026-27 General Fund budget was developed with an emphasis on financial stability and maintaining core programs and services for Capitola residents and visitors. As a first step in developing the Budget, the City Council adopted the 2025-2029 Strategic Plan in the previous year. Budget highlights and proposed changes are presented in consideration of the six priorities included in the plan:
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OTHER BUGETARY HIGHLIGHTS AND PROPOSED CHANGES
While the budget was largely prepared to maintain core services and keep expenditures at the lowest level possible, there are several changes identified. 41st Avenue Pavement Rehabilitation and Multimodal Improvements This project rehabilitates pavement and implements multimodal safety improvements along 41st Avenue, a key regional corridor serving residential neighborhoods, commercial areas, and access to State Route 1. The project includes pavement rehabilitation along 41st Avenue, bicycle and pedestrian safety improvements, curb ramp upgrades, and updated pavement striping and signage
Stockton Avenue Bridge
The Stockton Avenue Bridge is a critical connection within Capitola and serves as a primary access route to Capitola Village and the surrounding coastal areas. On August 24, 2023, the City Council accepted $500,000 in grant funding from the California Department of Water Resources for the Stockton Bridge Debris Mitigation Project. The adopted FY 2022–23 budget also allocated $350,000 for the initial phase of the project, bringing total available funding to approximately $850,000.
Cliff Drive Resiliency Project
In January 2023, major storm events caused significant erosion along the bluff southwest of Hooper Beach, undermining a retaining wall originally installed in the mid-1990s. Following this damage, the City received approval from Caltrans and the Federal Highway Administration (FHWA) to pursue permanent improvements through the Emergency Relief (ER) program. The Cliff Drive Resiliency Project aims to stabilize the roadway and protect the critical infrastructure it contains, while also improving public access and pedestrian safety along this important coastal segment in Capitola. The project area extends along cliff drive from the parking area where Portola Drive becomes Cliff Drive to the staircase leading to the beach near the base of the Capitola Wharf—an arterial roadway serving residents, utility infrastructure, and coastal visitors.
Esplanade Park
The project, currently in the design phase following an award of $275,000 from the State Coastal Conservancy, will evaluate sea level rise, coastal flooding, and storm impacts at Esplanade Park and develop conceptual design alternatives to improve long-term resilience and maintain public coastal access. This project also includes $50,000 from the general fund for total available funding of $325,000.
Monterey Park
The FY 2025-26 provided initial $10,000 of seed money from the general fund to begin conceptual planning for a small play structure at Monterey Park. Staff plans to begin initial neighbor outreach in Spring.
Countywide Radio Project
FY 2026-27 Budget proposes using general fund and restricted SLEF funding to fund the City’s portion of the major countywide public safety radio upgrade project known as RING. The project 5 128
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will facilitate high-quality radio frequency across Santa Cruz County and increase interagency law enforcement collaboration. The project includes significant new radio infrastructure in the City, compliant with new DOJ standards. The County, which is leading this effort, plans to enter into a contract with all the public safety organizations in the County and a vendor this fall. While final costs to the City have not yet been established, staff anticipates the cost will be roughly $45,000 a year for the next 10-years.
Measure S
Measure S is a special tax on all developed property within the Santa Cruz Public Libraries District boundary (all of Santa Cruz County except the City of Watsonville); it was approved by voters in 2016 for a 30-year period. Tax funds are restricted to repair, upgrade, and modernize the local library facilities. The Santa Cruz Libraries Financing Authority Community Facilities District was formed for the purpose of levying the special tax to each of the four members: Cities of Capitola, Santa Cruz, and Scotts Valley and the County of Santa Cruz.
The City of Capitola completed the $16.5 million Capitola Branch library in 2022 using $10,476,529 in Measure S funding, funds from the County Library Fund, former Redevelopment Agency Funds, and $856,000 in City general fund.
Recent projections indicate that Measure S will generate more revenue than initially anticipated, with the City expected to receive approximately $165,000 annually for eligible library expenditures. The FY 2026–27 Budget proposes allocating this amount to the General Fund to continue repaying the $856,000 previously advanced for the construction of the Capitola Library.
General Fund Balance
The general fund balance is estimated to end FY 2025-26 below the minimum target of $500,000.
Additionally, both the Contingency and Emergency reserves are currently below their target balance amounts pending reimbursements from FEMA and Cal OES. The FY 2026-27 Proposed Budget currently does not return the general fund to the $500,000 target balance; staff will be updating year end estimates once the Jan. – Mar. sales tax is received at the end of May.
Current revenue and expenditure projections show revenues not keeping pace with expenditures, requiring usage of Measure Y revenues to structurally balance the budget in the 5-year forecast.
Staff will continue to closely monitor revenues, expenditures, and fund balance throughout FY 2026-27 and will report to the Council during the mid-year budget report.
PRIOR YEAR ACCOMPLISHMENTS
In FY 2025-26 the City completed several significant projects, which provided residents and visitors with increased recreational and public art opportunities, while continuing to strengthen public safety and community development activities. Some of the City’s accomplishments include:
Redesigned the City’s website to enhance user experience, improve accessibility, and modernize digital engagement.
Completed the Community Center Renovation project.
Completed the Treasure Cove Playground project.
Completed Jade Street Park restroom renovation
Completed the Rispin Park project.
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Completed the FY25/26 Pavement Management Program
Updated and amended zoning code and general plan to facilitate housing production on the Capitola Mall Site.
Completed Housing Element-required rezones of multi residential sites in the City Worked with Kings Plaza property owners to bring Tesla dealership to Capitola Implemented a system that allows the public to pay for business licenses and other city services such as permits online.
Received more than $1,200,000 in grant funding for key projects such as Esplanade Park redesign, traffic and sidewalk improvements and key public safety efforts. Bid and awarded the 41st Avenue Pavement Rehabilitation and Multimodal Improvements project contract, construction begins summer 2026.
Goal Setting
On March 26, City Council received a presentation regarding ongoing projects and future potential projects, programs and goals, and identified potential new goals. At that meeting, the following ongoing CIP projects were identified by staff.
Project Current Phase Status / Key Milestone
Stockton Bridge
Rehabilitation
Assessment / Design Structural evaluation underway; results expected Spring 2026.
Community Center
Complex
Construction Construction underway; opening
scheduled for Summer 2026.
Cliff Drive Planning / Engineering Technical studies underway; advancing toward environmental clearance and
funding for construction phases.
Park at Rispin
Mansion: Landscaping
and Additional
Elements
Implementation Park open; funding needed for additional landscaping; community fundraiser
identified for additional elements (MOU in
April). Measure Q grant for restoration and
interpretive signs submitted.
41st Avenue Pavement
Rehabilitation and
Multimodal
Improvements
Construction Bids
Received
Council contract approved
Pavement
Management
Ongoing Program Annual street resurfacing and pavement
preservation program (FY 2025-26: 41st
Avenue Rehab & Multimodal; FY 2026-27:
residential street project)
Esplanade Park
Design
Concept Planning /
Design
$275,000 Coastal Conservancy grant
award and $50,000 from general fund.
RFP for design team issued.
Grand Avenue
Pathway (Depot Hill)
Feasibility / Alignment
Study
4/9: Council action: funding could be
considered during Budget process
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Bay Avenue Corridor
Improvements
Design Development Corridor study and design underway with RTC funding. Council review of draft
design scheduled in April.
Five-Year Capital
Improvement Program
Program Development Draft FY 2026-31 CIP anticipated for Council review in Spring 2026.
Capitola Wharf Master
Plan
Project Planning Design presentation scheduled for Council review in April.
Climate Action Plan
Update
Project Planning Update underway; completion anticipated within ~6 months.
Active Transportation
Plan (ATP)
Project Planning Planning and community outreach to begin May 2026.
The following projects and programs were proposed by staff at the City Council Goal setting meeting.
Department Draft Goals
City Manager Election: three Council seats
Employee contract negotiations
Beach Lifeguard Service Organizational Study
Police Anti Human Trafficking Ordinance
Countywide records management system rollout
Continued funding for: Drone Program, RING, Body
Worn Cameras
Community & Economic Development Continue working with Mall, Village hotel owners and other economic development opportunities.
Ordinance updates: Community Benefits, ADUs,
Bicycle Parking, Hotel Incentives
Review Outdoor Dining Program
Development impact fees - 41st Avenue
Housing Element Implementation: Down payment
assistance program, update nexus study for rental
housing.
Community Services & Recreation Update Community Center rental package Explore and develop new opportunities related to
renovated facilities
Administrative Services Improve fiscal transparency
Transition to paperless HR Division
Return TOT administration to internal staff
Also, during the goal setting session City Council identified the following potential new goals for next fiscal year. The table below notes if a majority of the members mentioned the item at the meeting as a goal, and if the item would require funding or just staff time. 8 131
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Funding
Required
Goal Majority of
Council
Notes
Yes Evaluation opportunity to use
Trestle
✔
Yes Seek funding for sidewalk infill
Projects
$125k funding from RTC
obtained in FY 25/26
Yes Examine if bike-detection
technology can help with bike
safety
No Look at rent control costs/risks
No Report back on Economic
Development opportunities
No Options to manage PERS costs
No Review options for revenue-neutral
programs in
No Ensure CS&R balance of programs
for youth and seniors
No Community engagement (fun facts)
Yes Ebike safety plan Program initiated 2026
No Parking rate evaluation Rates last updated in 2024
Yes Village cleanup & new trashcans
No Work with community groups to
help fund projects
No Tree maintenance near streetlights
Yes Funds to match private donation at
Rispin Park
Yes Improved bike facilities on
38th Avenue
No Present info about GF spend by
geographic area
No Study Citywide vacation rental zone
revenue
Yes Additional sidewalk cleaning when
weather is nice, off season
CONCLUSION
The development of the annual budget takes a great amount of staff time and effort and must be completed in a compressed timeline. I sincerely appreciate all the department directors and departmental budget liaisons for their contributions. Special recognition is extended to the Finance Department for its efforts in coordinating the budget process and preparing the annual budget document.
As the new fiscal year approaches, I wish to express my thanks and appreciation to the Mayor, and members of the City Council for their leadership and support in planning and conducting the financial operations of the City in a responsible and progressive manner. I know that with continued citizen participation, City Council leadership, and ongoing efforts of dedicated employees, Capitola will continue to be a great place to live, work, and enjoy. 9 132
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SUMMARY INFORMATION
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Budget Process Overview
Each year the City of Capitola prepares an Operating Budget, a Successor Agency Budget, and a fiveyear Capital Improvement Program (CIP) budget. The Operating Budget contains the summary and detail information for revenue and expenditure appropriations for the fiscal year (beginning July 1st and ending June 30th) for several funds as well as a projection for the second fiscal year. The information from the CIP is incorporated, in summary form, in the City’s annual budget. The Successor Agency budget is included in its entirety in the City’s annual budget.
Capitola municipal code (3.200.010 E.) defines a balanced budget as one in which “financing uses including expenditures, inter-fund transfers out, reserves and contingencies should equal financing sources including beginning available fund balance, revenues and inter-fund transfers in.” A key concept in the developmental process for the General Fund Budget revolves around City fiscal policy that current year expenditures are balanced with current year revenue.
The City’s budget process continues throughout the year, with quarterly financial updates published on the Finance Department website and at weekly department head meetings with the City Manager. An outline of the on-going budget process is listed below:
Month Responsibility Budget Function
December Finance Budget Cycle Begins
Finance Finance prepares mid-year calculations
January City Manager / Departments Review accomplishments related to prior year Budget Principles Finance / Departments Provides year-end estimates
Finance Publishes quarterly reports for October - December Finance / City Manager Presents mid-year report to Council and FAC February City Council Establishes Budget Principles
Finance Projects non-departmental revenues and position costs Departments Prepares budget and CIP
March Finance / Departments Continue budget projections Finance Advisory Committee FAC discusses elements of the budget City Manager Reviews departments budget requests
April Finance Adjusts proposed budget based on City Manager review Planning Commission Reviews CIP
Finance Publishes quarterly reports for January - March Finance Advisory Committee Distributes proposed budget
May Finance / City Manager Presents proposed budget and CIP to City Council Finance Advisory Committee Provides recommendations to Council Community Organizations Provides funding request information to Council June City Council Deliberates
City Council Adopts Budget
July Finance Publishes quarterly reports for April - June October Finance Publishes quarterly reports for July - September 11 134
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Financial Policies
Basis of Accounting
The City’s operating budget consists of governmental funds that include the General Fund, Special Revenue Funds, Internal Service Funds, Debt Service Funds and Capital Project Funds for both the City and the Successor Agency. Governmental fund types and agency fund budgets are developed using the modified accrual basis of accounting. This method is consistent with the presentation of the City’s Annual Financial Statements. Under this basis, revenues are estimated for the fiscal year under the condition that they are identifiable and will be collected within sixty (60) days, and sales tax within ninety (90) days, of the close of the fiscal year. Principal and interest on general long-term debt are budgeted as expenditures when due, whereas other expenditures are budgeted for liabilities expected to be incurred during the current period or shortly thereafter.
Level of Budget Control
Both the City and the Successor Agency appropriate (control) the budget at the Budget Unit level. The Budget Unit level is defined as “department, fund, or other organizational unit whose financial activities are accounted for separately.”
Expenditures for the General Fund are considered a Budget Unit at the Department level, with Community Grants controlled at the grantee level. The Successor Agency are considered Budget Units to be at the category level as defined in the budget document.
Budget Adjustments
After the budget is adopted, any supplemental appropriations of fund balance, or budget transfers over $25,000 within a Budget Unit will require Council approval. Budget adjustments that are less than $25,000 and within the same Budget Unit may be approved by the City Manager.
All requests for budget adjustments will include an explanation for the change along with a discussion of fiscal impact. This information will also be documented on a Budget Adjustment Form, which will be reviewed by the Finance Department for fiscal impact, correct account coding, and policy consistency prior to receiving City Council or City Manager approval.
Financial Committees and Boards
The following committees and boards assist the City in the budget review and development process:
Finance Advisory Committee
The Finance Advisory Committee (FAC) works closely with the Finance Director/Treasurer to make recommendations on financial projections or policies identified by the City Council or City Manager. The Committee consists of four Council-appointed members, the Mayor, and a Council Member. The FAC meets several times throughout the year and operates in an advisory capacity with the overall fiscal well-being of the City serving as its guiding principle. 12 135
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Financial Forecast
The City maintains a ten-year fiscal forecast model for the long-term budget picture, which includes unpredictable CalPERS costs, and a challenging economy in coming years. The first five years include conservative revenue and expenditure projections as well as the estimated amount of the City’s CalPERS Unfunded Actuarial Liability (UAL) provided by CalPERS Annual Actuarial reports. Years six through ten are estimates that follow the trends of the first 5 years of the model and subject to bigger swings each year when the new actuarial reports are released. Below is a summary of the 5-year financial forecast including revenue and expenditure assumptions. 13 136
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Measure Y
In November 2024 Capitola voters approved Measure Y, a one-half percent district sales tax replacing Measure F, a one-quarter percent district sales tax. The Measure Y ballot language stated: “To protect essential city services including public safety and emergency services; repair potholes, maintain streets, sidewalks, bike lanes, beaches, the new wharf, and recreation programs for youth; improve traffic safety; and support local businesses, shall City-of-Capitola replace its quarter-percent sales tax, approved by voters in 2016, with a one-half percent sales tax, generating an estimated $2.2 million annually for general government use, for ten years, with independent audits, and all funds staying local?” The table below shows $250,000 of Measure Y revenue programmed towards eligible projects. The intent of this table is to allow the City Council to see the impact on the general fund balance of the of Measure Y revenue programmed for projects.
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General Fund Summary
The General Fund balance remained steady during FY 2025-26. The projected General Fund FY 2025- 26 ending budgetary fund balance totals $38,300. The FY 2026-27 Proposed Budget is estimating the general fund to have an ending balance of $94,957.
The chart below summarizes projected and historical General Fund revenues, expenditures, and fund balances. The table illustrates the effects the improving local economy has had on general fund revenue.
Revenue variances primarily include an increase in sales and property tax revenues.
An overview of district taxes (Measure O and Y), reserves, and internal service funds are provided within this summary section.
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Revenue Summary
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Expenditure Summary
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Emergency, PERS Contingency and Contingency Reserves
In 2000 the City adopted Financial Management policies, establishing a fifteen percent Contingency and a ten percent Emergency Reserve Fund. The Contingency Reserve provides 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. The Emergency Reserve protects against significant one-time costs, which might arise from major unpredictable emergency events.
As the 2011 pipe failure demonstrated, a sufficient Emergency Reserve Fund is needed to respond quickly to local disasters, as well as sustain low debt ratios. Due to the City’s location in an active geologic region, adjacency to the ocean, and proximity to a major creek and highway, the City chose to also increase the Emergency Reserve funding level to ten percent of operating expenditures. In FY 15/16 the City implemented a PERS Contingency Reserve Fund to ensure future funding availability for potential CalPERS contribution increases.
The City was able to navigate the fiscal impacts associated with the COVID-19 Pandemic without utilizing reserve funds, however, the atmospheric river storms on Jan. 5, 2023, caused the City to utilize funds from the Emergency Reserve to make emergency repairs. Additionally, as the City made storm damage repairs the general fund balance has been drawn down and therefore the FY 2026-27 Proposed Budget does not include any general fund transfers into the reserves. As storm damage repair costs are reimbursed through FEMA and Cal OES the City anticipates returning reserves to minimum target balances.
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OPEB and PERS Trust Funds
The City has been proactive in planning for future liabilities. The City has established two trust funds for future retirement costs. The two trust funds are the OPEB (Other Post-Employment Benefits) Trust Fund, which is used for retiree health premiums, and the PERS Trust Fund, which is used for future PERS retirement costs.
OPEB Trust Fund:
Balance 6/30/2025 $1,104,842
FY 2025/26 Contributions 67,050
Estimated Interest Earned 5,000
Estimated Balance 6/30/2026 $1,042,792
FY 2026/27 Contributions 0
FY 2026/27 Expenditures 50,000
Estimated Interest Earned 40,000
Estimated Balance 6/30/2027 $1,032,792
PERS Trust Fund:
Balance 6/30/2025 $1,561,142
Estimated Interest Earned 30,000
FY 2025/26 Contributions 0
Estimated Balance 6/30/2026 $1,591,142
Estimated Interest Earned 30,000
Estimated Balance 6/30/2027 $1,621,142
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General Fund Resources
General Fund resources include reserve funds (Emergency, Contingency, PERS Contingency, Facilities) and Internal Service Funds designated for funding equipment purchases, risk management, workers’ compensation, and compensated absences. The reserve funds have specific purposes and require a vote of the Council to expend.
The following table shows the estimated General Fund available resources:
The corresponding chart and graph illustrate internal service fund expenditures and the impact of transfers on the affected funds.
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Fund Balance Summary
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Fund Balance Summary
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GENERAL FUND REVENUES
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General Fund Revenues
Revenues for the FY 2026-27 General Fund operating budget total $22.4 million, an increase of approximately $1.2 million or 5.7 percent above FY 2025-26 estimated revenue. Property tax revenues remain strong as assessed values (basis for property tax levies) continue to increase with changes in ownership and an additional 2% CPI increase per Prop 13 provisions. Staff anticipates sales tax revenue to increase around 2% over FY 2025-26 as the economy shows signs of slowing. Transient occupancy tax is expected to increase approximately 3.5%.
A summary of major revenue changes between the FY 2025-26 proposed and FY 2026-27 proposed budgets is listed below:
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General Revenue Information
The City does not receive General Fund revenues in equal monthly increments. While the City receives some revenue regularly throughout the fiscal year, some is received quarterly or annually.
The variable nature of these revenues results in an uneven cash flow. For example, the City of Capitola’s lowest cash balances occur in April and again in mid-December prior to property tax revenue being received. The City developed a cash flow model to assist with on-going cash flow variability and to identify reserve requirements. While monitoring the City’s cash flow has always been a priority, the need to identify patterns became more critical during the disaster recovery period when reserves were nearly depleted. In FY 2012-13 the City approved increasing the Contingency Reserve balance from 10 percent to 15 percent to assist in covering potential cash flow deficits.
Projections for each source of revenue include a review of historical trends, the local economy, new business development, and pending legislation. Due to significant changes, the City is closely monitoring the following five core revenues, which represent over 80 percent of the General Fund:
Sales Tax $10,010,195
Transient Occupancy Tax 2,300,000
Parking Meters 1,166,000
Parking Fines 850,000
Property Taxes 3,613,050
$17,939,245
Additional information related to the five core revenues is detailed within this section. In addition, fiveyear trends for each revenue source are provided in the Revenue Summary.
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Sales Tax
The City of Capitola sales tax consists of one percent Bradley Burns, a half percent Capitola District Tax (Measure Y), and a permanent quarter percent Capitola District Tax (Measure O). In FY 2026-27 annual sales tax revenue is estimated to be $10 million, with approximately $3.4 million in revenues contributed by Measure O, and Measure Y.
The Finance Department works closely with HdL, the City’s sales tax consultant, on tax recovery, statistics, and projections. Sales tax projections are based on a combination of “most likely” estimates provided by HdL, internal quarter over quarter analyses, and the impact of one-time events. In FY 2026-27, Bradley Burns sales tax revenue is anticipated to increase by approximately 2 percent, or $294,318 above the FY 2025-26 estimated sales tax receipts. The City’s sales tax collections are heavily dependent on the top five generators.
The chart below illustrates sales tax performance including the sunset of Measure D and end of Measure F and start of Measure Y.
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Transient Occupancy Taxes (TOT)
Hotel tax, also known as the Transient Occupancy Tax (TOT), charges rental accommodation of less than 30 days a 12 percent tax of which 0.75 percent is restricted for local business groups and early childhood and youth programs. In FY 2025-26 TOT tax generally accounts for approximately 13 percent of General Fund operating revenues. The City’s TOT revenues come from the following sources:
Hotels, Motels and Inns
Other Rentals
o Bed and Breakfasts
o Vacation Rentals
TOT revenues are anticipated to increase during FY 2026-27. For the last several years, hotels have experienced high occupancy rates leaving little room for increased TOT revenues. As the industry slows down little revenues are expected to continue to grow slightly as has been the case for the last couple of years.
The following chart illustrates TOT revenues within the City. Due to Capitola’s seaside location, proximity to regional attractions, and continued signs of economic recovery, the City is continuing efforts to attract another hotel to the area.
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Parking Meters and Parking Fines
In FY 2026-27 parking meter and parking fine revenues are estimated to contribute approximately $2.0 million to the General Fund. Revenue sources include fees collected from the meters and fines resulting from expired meters and improper parking. Factors affecting these revenues include tourism and seasonal trends. During the summer, the City offers shuttle bus service from the parking lots to the Village, beach, and Capitola Wharf. Projected revenues for each location are estimated below:
The following chart illustrates parking meter revenue and parking citation revenue trends within the City. Overall, the revenue trend reflects the previously mentioned parking meter rate increase while showing citation revenue remaining flat. In FY 2015/16 the City implemented 3-hour parking in the Village. The change has had a positive impact on meter revenue while decreasing citations. 28 151
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Property Taxes
Property Taxes, an Ad Valorem Tax imposed on real property and tangible personal property, are levied at one percent of the assessed value of the property. The City receives 7.47 percent of each one percent, or 75 cents per $1,000 of assessed property value.
In FY 2026-27 property tax revenue is estimated to be $3.6 million, representing a five percent increase over the estimated collection amount from FY 2025-26. The City’s collections are slightly higher than the information from the County Auditor-Controller’s Office due to the increased cost of housing and a robust housing market.
In the FY 2026-27 proposed budget, base property tax revenues are projected to increase approximately five percent. The City based the projection on information from the Auditor-Controller’s Office, historical trends, and a review of the current housing market.
Property taxes are received based on the following distribution schedule:
December: 50%
April: 45%
June: 5%
Property Taxes in-lieu-of Vehicle License Fees
Property Tax in-lieu-of Vehicle License Fee revenue has increased an average of six percent per year over the last several years. This increase continues to be consistent with the rising property values outlined by the Auditor-Controller’s Office. Due to the relatively flat history associated with these revenues, conservative estimates of four percent have been applied to the upcoming fiscal years. 29 152
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Revenue Summary
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GENERAL FUND EXPENDITURES
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General Fund Expenditures
The total FY 2026-27 General Fund expenditure budget proposes an increase of approximately $1 million from the FY 2025-26 Amended Budget as existing resources are programmed towards City Council Goals.
Increases have been programed in most major categories as inflation continues to impact City expenditures. Key differences between the two fiscal years include:
Total personnel costs (salary and benefits) are estimated to increase $527,000 from the FY 2025- 26 Amended Budget due to significant increases in the annual CalPERS Unfunded Actuarial Liability payment, cost of living adjustments, increased employee health care contributions, scheduled step increases in 2026.
Salary costs are estimated to decrease $42,000 due to the elimination of a part-time position and several long-time employees leaving.
Salary – Seasonal/Temp increased $53,000 as summer recreations programs remain at full capacity.
Overtime is anticipated to increase $57,000 primarily in the Police, however the increased cost is offset by additional grant revenue.
Specialty Pay – decreased $13,400.
Benefits – increased $472,000 as a result of CalPERS rates increasing. Contract services are slightly above the prior year.
The following chart provides an overview of expenditures for FY 2023-24 to FY 2027-28. A complete description of major changes will follow in the related expenditure detail pages. 33 156
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The following chart provides an overview of expenditure trends, excluding transfers. Expenditures are trending down as we complete several City Council goals utilizing one-time funding.
A chart displaying the percentage of expenditures by category is also provided for reference. Personnel costs are estimated to increase $724 thousand from the prior fiscal year causing the ratio of personnel services to total expenditures to increase from 67.5 percent to 68.7 percent. Other notable changes were in contract services, which decreased from 18.6 percent to 18.3 percent. 34 157
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General Fund Department Expenditures
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General Fund Expenditures
SALARIES & BENEFITS
All positions listed in the General Fund are fully funded with full benefit costing. Fully benefited positions are budgeted at their current step plus an assumption that they will move to the next step unless they are already at the top step of their classification. Specialty pays are budgeted as a separate line item.
Positions budgeted for in FY 2025-26 include the addition of two maintenance workers in the public works department and the reorganization of the City Manager and Finance Departments.
The table below summarizes the total FTE count by department, and the following page provides a detailed summary of the staffing budget changes.
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General Fund Expenditures
SALARIES & BENEFITS
City services are primarily staff delivered; therefore, staffing is the most significant expenditure. The FY 2026-27 proposed budget estimated staffing costs total $15 million. This represents a 3.63% increase from the prior year’s amended budget. This is primarily due to significant increases in the CalPERS Unfunded Actuarial Liability annual payment, estimated cost of living adjustments, and scheduled step increases.
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General Fund Expenditures
Salaries & Benefits - Salary Assumptions
There are five bargaining groups in the City. Management employees are hired by the City Manager pursuant to a City Council approved compensation plan. Seasonal and temporary hourly employees are not included in any of these groups and are not represented by a union. The following table lists the different groups and the start and end dates of their current agreements.
Group Current Agreement Expiration Date
Assoc. of Capitola Employees/Gen. Govt. 6/23/2024 6/30/2027 Confidential 6/23/2024 6/30/2027
Mid-Management 7/7/2024 6/30/2027
Police Captains 7/7/2024 6/30/2027
Police Officers Association (POA) 6/7/2021 6/30/2027
Overtime
The following table provides the details for the overtime budget. The overtime budget for the Police Department increases this year in anticipation of additional special events.
Specialty Pay
The FY 2026-27 proposed budget includes the following specialty pays in the calculation of staffing costs, which are also included in overtime calculations: education, longevity, bilingual, motorcycle, detective pay, senior officer, canine, and shift differential pay.
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General Fund Expenditures
Salaries & Benefits – Retirement Assumptions
Benefits – Post Retirement Medical Benefit
The City of Capitola contributes the minimum amount toward retired employees’ health insurance premiums in accordance with Government Code Section 22892 of the Public Employees’ Medical and Hospital Care Act (PEMHCA). This expenditure is accounted for in the City Manager’s personnel department budget. Below is a table showing the PEMHCA minimum over the last 10 years. January 1, 2017 $128
January 1, 2018 $133
January 1, 2019 $136
January 1, 2020 $139
January 1, 2021 $143
January 1, 2022 $149
January 1, 2023 $151
January 1, 2024 $157
January 1, 2025 $158
January 1, 2026 $162
Benefits – Public Employee Retirement System (PERS)
The City offers various defined benefit retirement plans to safety and miscellaneous employees. These retirement plans are administered by the California Public Employee Retirement System (“CalPERS” or “PERS”). The safety plan benefit formula is 3% @ 50, and the miscellaneous plan is 2.5% @ 55 for “classic” PERS members. For employees hired after January 1, 2013, who are subject to the Public Employees’ Pension Reform Act (PEPRA), the safety benefit formula is 2.7% @ 57, and the miscellaneous plan is 2% @ 62. A CalPERS member becomes eligible for retirement benefits upon reaching the age of 50 with at least 5 years of service credit (total service across all CalPERS employers).
The City’s retirement costs are defined as a percentage of payroll, along with a fixed dollar amount to address the City’s Unfunded Actuarial Liability (UAL), which is actuarially determined annually by CalPERS. The UAL in FY 2025-26 was $2,895,386 and is increasing to $3,271,340 (12.98%) in FY 2026-27. The most recent CalPERS actuarial reports estimate the UAL through FY 2030-31 at an amount of $3,789,000 which equates to an increase of approximately 176% over ten years from FY 2020-21.
PERS Rates. The FY 2026-27 PERS total rate for classic safety members is 39.7%, with employees paying 15% and the city 24.7%. Safety PEPRA members are responsible for 13.75% and the city pays
13.99%. For classic miscellaneous members, the total contribution rate is 24%, with employees paying
13.4% and the city 10.6%. Miscellaneous PEPRA employees pay 7.75% and the city pays 7.96%.
The FY 2025-26 PERS total rate for classic safety members was 39.6%, with employees paying 15% and the city 24.6%. Safety PEPRA members are responsible for 13.75% and the city pays 13.76%. For classic miscellaneous members, the total contribution rate was 23.9%, with employees paying 13.4% and the city 10.5%. Miscellaneous PEPRA employees pay 7.75% and the city pays 7.87%.
Public Employees’ Pension Reform Act (PEPRA). On September 12, 2012, Governor Brown signed the California Public Employees' Pension Reform Act of 2013 (PEPRA) into law. PEPRA became effective on January 1, 2013, and requires all employees who are not previously members of the PERS reciprocal system to be placed in an alternate retirement plan. The City’s PEPRA plan for Safety employees is 2.7% at 57 and 2% at 62 for Miscellaneous employees. This new plan requires that the City and plan members contribute an equivalent share of retirement costs. The rates for public safety and miscellaneous employees are 13.75% and 7.75%, respectively. 39 162
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Retirement Costs Summary
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General Fund Expenditures - Contract Services (4 pages) 41 164
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Community Based Social Service Providers
Community Based Social Service Providers are funded by the General Fund and restricted Transient Occupancy Tax (TOT) revenue. Each year a determination is made regarding funds available and allocation. Due to COVID-19 the Community Grant program continues to be funded in FY 2026-27 with a combination of general fund, restricted TOT, and federal grants. The table below shows the general fund and restricted TOT funding while the federal grant funding is highlighted in the Community Development Block Grant Special Revenue funds.
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GENERAL FUND EXPENDITURES
SUPPLIES
The following table provides a history of the supply budgets by department. Additional information is available in the General Fund Department section.
TRAINING AND MEMBERSHIPS
The following table provides a history of the training and memberships budgets by department. Refer to the General Fund Department section for additional information. 47 170
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INTERNAL SERVICES
Internal Service Funds finance special activities and services performed by one City department for another on a cost and reimbursement basis. These funds share costs, designate targeted reserves levels, and allocate costs to all departments benefiting from the activities and services. The methodology for cost allocation for each Internal Service Fund is described in the Internal Service Fund section.
The FY 2026-27 proposed budget provides funding for increased insurance premiums as well as equipment purchases for equipment funded in prior years.
GENERAL FUND TRANSFERS
General Fund Transfers move funds from the General Fund to a specific fund for a designated purpose.
The CIP is detailed in a separate section and debt issuances are detailed in the Multi-Year Assets and Obligations section. Below is a summary of the transfers from the General Fund to other funds/reserves. 48 171
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DEPARTMENTAL BUDGETS
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CITY COUNCIL
GENERAL GOVERNMENT
DEPARTMENT PURPOSE
The City Council is composed of five generally elected Council Members, serving four-year staggered terms. Council members select a Mayor and Vice Mayor annually. In 2002, the voters approved a consecutive term limit of two terms for Council Members. The City's Municipal elections are held the first Tuesday of November in even-numbered years. The Council meets regularly twice monthly, on the second and fourth Thursday.
The City Council establishes local law, sets policy, approves programs, allocates funds, and provides direction to the City Manager and staff to implement its policy. Council also appoints members to local and regional committees, commissions, and boards. Capitola is a General Law City, organized under the general laws of the state. Local laws are established by ordinance, compiled in the Municipal Code, and enforceable by the City. Other directives and policies of the City Council are implemented through Council Resolutions and recorded in Council Minutes.
ESTABLISHED PRINCIPLES OF THE CITY
Fiscal Policy – practice sound financial management
Public Service – uphold the public trust.
Public Improvement – maintain a safe and healthy environment.
FISCAL YEAR ACCOMPLISHMENTS: FY 2025-26
Provide services, staff, and equipment to ensure public safety and trust Develop projects and programs to maintain and enhance the quality of life in Capitola Collect public input and determine path forward for Capitola Wharf Master Plan Review and update, if necessary, the City Council Code of Conduct Adopted 47 resolutions and 8 ordinances
FISCAL YEAR GOALS: FY 2026-27
Balanced budget while using resources for public improvements Provided services, staff, and equipment to ensure public safety and trust Approved projects and programs to maintain and enhance the quality of life in Capitola 1000-10-10-000
FY23/24
Actual
FY24/25
Actual
FY 25/26
Amended
FY25/26
Estimated
FY26/27
Proposed
FY27/28
Planned
Revenues
General Fund $ 99,496 $ 137,761 $ 127,259 $ 127,259 $ 104,580 $ 114,156 Revenue Total $ 99,496 $ 137,761 $ 127,259 $ 127,259 $ 104,580 $ 114,156 Expenditures
Personnel $ 40,752 $ 41,200 $ 40,689 $ 40,689 $ 40,689 $ 40,689 Contract services 19,150 56,602 29,711 29,711 10,711 10,711 Training & Memberships 20,531 19,380 31,380 31,380 23,380 32,380 Supplies 2,082 2,411 5,500 5,500 6,800 6,800
Internal service fund charges 16,981 18,168 19,979 19,979 23,000 23,576 Expenditure Totals $ 99,496 $ 137,761 $ 127,259 $ 127,259 $ 104,580 $ 114,156 Authorized Positions
FY23/24
Actual
FY24/25
Actual
FY 25/26
Amended
FY25/26
Estimated
FY26/27
Proposed
FY27/28
Planned
Mayor 1.00 1.00 1.00 1.00 1.00 1.00
Vice Mayor 1.00 1.00 1.00 1.00 1.00 1.00
Council Members 3.00 3.00 3.00 3.00 3.00 3.00
FTE Total 5.00 5.00 5.00 5.00 5.00 5.00
CITY COUNCIL
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CITY ATTORNEY
GENERAL GOVERNMENT
DEPARTMENT PURPOSE
The City Attorney represents the City as primary Counsel in all legal matters. The City Attorney is appointed by the City Council. The City Attorney provides legal analysis and advice on interpretation and application of municipal code, State law, and Federal law, drafting legal documents, and laborrelated issues. The City Attorney is currently a contract position with the firm Burke, Williams & Sorensen
KEY CHANGES
Marc Tran of Burke, Williams & Sorensen is Capitola’s City Attorney FISCAL YEAR ACCOMPLISHMENTS: FY 2025-26
Advised City on matters associated with pending legal actions. Advised City on legal matters related to City policies and procedures. Represented the City in litigation.
FISCAL YEAR GOALS: FY 2026-27
Advise Council on potential and pending litigation.
Assist and advise staff on contracts, labor relations, and other legal assessments. Resolve existing litigation.
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CITY MANAGER
GENERAL GOVERNMENT
MISSION STATEMENT
The mission of the City Manager’s Office is to ensure that all City programs and services are provided effectively and efficiently.
DEPARTMENT PURPOSE
The City of Capitola is a Council-Manager form of government, under which the City Council appoints a City Manager who serves as the City's chief administrative officer and is responsible for implementing Council policies. The purpose of this department is to implement the policies of the City Council and provide leadership and direction to the city departments. Core services of the City Manager’s Office are administrative direction and leadership for City departments, programs, and services to ensure the community receives a high level of service.
KEY CHANGES
The City Manager Department internally promoted the former Office Coordinator to the Deputy City Clerk position and hired a new Office Coordinator.
The FY2025/26 Budget includes a proposed organizational change, shifting Human Resources and Information Systems from the City Manager Department into the newly titled Administrative Services Department, along with Finance services (formerly the Finance Department). With this new structure, the City Manager remains the Personnel Officer, with the ability to designate these duties to other staff as needed. The City Manager Department will keep the Assistant to the City Manager position, now allocated to the department 100% rather than 50% with 50% Personnel, to support expanding public outreach and community engagement efforts, managing special projects and contracts, such as the Annexation Feasibility Study, and providing support to the City Manager and all City departments.
FISCAL YEAR 2025-26 ACCOMPLISHMENTS
Successfully facilitated a 30+ attendee, updated, civic-engagement program, Discover Capitola.
Completed annexation feasibility study and partnered with LAFCO to modify the City’s Sphere of Influence.
Expanded following of City social media platforms and subscriptions to the City digital newsletter.
Prepared content for and facilitated a positively received Town Hall meeting. Planned and executed Library solar panel opening, Treasure Cove groundbreaking, and Jade Street Reimagined grand opening events; hosted elected representatives. Partnered with County Park Friends on the Treasure Cove Playground project. Clerked 33 City Council meeting agendas and 244 staff reports. Produced 300 PRA requests.
Began an update to the City’s Municipal Code to revise information relating to the governance of City advisory bodies, along with associated policies. Began the transition to by-district elections – estimated to be completed within FY 2026-27. Debut of the updated City website, updated City website URL, and updated City email domains, consistent with AB 1637.
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FISCAL YEAR GOALS: FY 2026-27
FISCAL POLICY
Evaluate potential revenue ballot measures.
Continue city-wide Economic Development efforts including working with the Capitola Mall to improve the mall facility.
Continue to work to create a safer work environment and reduce employee injuries. Review and prioritize City services.
Support economic development.
Increase branding efforts to highlight funding sources for City projects/ Seek opportunities to partner with other agencies for greater outcome or savings.
PUBLIC SERVICE
Facilitate 2026 City Council Election – 3 seats
Complete the City’s transition to by-district elections and continue to promote outreach following the 2026 Election and leading into the 2028 Election Complete recruitment for and appointments to the City’s advisory bodies
PUBLIC IMPROVEMENT
Work with community partners to enhance public serving spaces, like the fundraising partnership with Capitola Cares
Continue increased street and facility maintenance through use of Measure D resources. 53 176
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ADMINISTRATIVE SERVICES - PERSONNEL
GENERAL GOVERNMENT
MISSION STATEMENT
To provide excellent internal and external customer service and assist departments in recruiting and retaining exceptional employees.
DEPARTMENT PURPOSE
Personnel functions are the responsibility of the City Manager. Functions include employee recruitment and selection, benefits coordination, insurance and retirement programs, labor negotiations, compensation plan maintenance, regulatory training, and risk management. 1000-10-12-000
FY23/24
Actual
FY24/25
Actual
FY 25/26
Amended
FY25/26
Estimated
FY26/27
Proposed
FY27/28
Planned
Revenues
General Fund $397,852 $465,845 $3,343,009 $3,344,359 $3,652,665 $3,768,013 Revenue Totals $397,852 $465,845 $3,343,009 $3,344,359 $3,652,665 $3,768,013 Expenditures
Personnel $287,608 $385,395 $3,268,866 $3,268,866 $3,533,499 $3,656,848 Contract services 74,211 55,576 47,000 47,000 90,600 82,100 Training & Memberships 4,620 (607) 3,000 4,050 1,000 1,000 Supplies 14,809 6,355 6,000 6,300 6,500 6,500
Internal service fund charges 16,604 19,126 18,143 18,143 21,066 21,565 Expenditure Totals $397,852 $465,845 $3,343,009 $3,344,359 $3,652,665 $3,768,013 Authorized Positions
FY23/24
Actual
FY24/25
Actual
FY 25/26
Amended
FY25/26
Estimated
FY26/27
Proposed
FY27/28
Planned
City Manager 0.20 0.20 0.20 0.20 0.20 0.20
Finance Director - - - - 0.25 0.25
Human Resources Analyst 1.00 1.00 1.00 1.00 1.00 1.00
Assistant to the City Manager 0.50 0.50 0.50 0.50 - 0.00 FTE Total 1.70 1.70 1.70 1.70 1.45 1.45
PERSONNEL
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ADMINISTRATIVE SERVICES – FINANCE AND INFORMATION TECHNOLOGY
GENERAL GOVERNMENT
MISSION STATEMENT
The Finance Department’s mission is to present timely, accurate and transparent financial information to the public while providing City Management with financial data to facilitate informed decision-making on the allocation of City resources. The department strives to provide excellent customer service to the public, elected officials, and all departments within the City.
DEPARTMENT PURPOSE
The Finance Department oversees all financial transactions of the City to ensure legal and accounting policies are adhered to. The Department maintains all City funds and oversees budget development, the Annual Comprehensive Financial Report, accounts payable, payroll, accounts receivable, cash receipts, banking, business licenses, and transient occupancy tax. The Department provides quarterly and annual financial reports to the City Council and the public.
The FY2025/26 Budget included an organizational change, shifting Human Resources and Information Systems from the City Manager Department into the newly titled Administrative Services Department, along with Finance services (formerly the Finance Department). With this new structure, the City Manager remains the Personnel Officer, with the ability to designate these duties to other staff as needed. The new structure allows for the personnel, finance, and information technology divisions to improve communications and efficiencies as the City continues to implement more and more technology solutions, personnel and finance.
FISCAL YEAR ACCOMPLISHMENTS: FY 2025-26
Continued TOT vacation rental audit and enforcement program. Implemented new bail schedule
Implemented transition of IT to a contracted service
Provided analytical support to operations departments.
FISCAL YEAR GOALS: FY 2026-27
Prepare and maintain a balanced budget.
Plan for and meet future PERS increases.
Work with the Finance Advisory Committee to identify future revenue opportunities and address increasing costs.
Meet regulatory financial reporting requirements and provide reports on the City website. Develop long term financial plan for Measure Y
Continue partnerships with departments to maintain financial accountability and transparency. Continue to improve City financial transparency to the public. 55 178
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POLICE SUMMARY
POLICE
MISSION STATEMENT
The Capitola Police Department prides itself in providing the highest level of safety and service to enhance the quality of life of our community through professional, engaged, and empowered employees.
DEPARTMENT PURPOSE
The Capitola Police Department is dedicated to protecting life and property, preserving the peace, and enhancing the quality of life for residents, businesses, and visitors through professional policing services, community partnerships, and proactive problem-solving strategies. The Department is committed to delivering fair, compassionate, and unbiased public safety services while maintaining the highest standards of integrity, accountability, and ethical conduct.
To provide these services, the Department is organized into several operational divisions.
Patrol Division
The Patrol Division is responsible for the day-to-day delivery of police services throughout the community. Officers respond to emergency and non-emergency calls for service, enforce traffic and criminal laws, conduct preliminary investigations, and engage in proactive patrol efforts to maintain public safety and order. The division also emphasizes community-oriented policing and relationship building with residents, businesses, and visitors.
Investigations Division
The Investigations Division conducts follow-up investigations related to criminal incidents occurring within the City. Detectives gather evidence, interview victims and witnesses, prepare cases for prosecution, and collaborate with allied agencies and the District Attorney’s Office. The division also oversees specialized investigations and crime analysis functions.
Professional Standards and Administrative Services Division The Professional Standards and Administrative Services Division provides administrative, personnel, training, records management, budgeting, and policy support functions for the Department. The division is responsible for maintaining compliance with state and federal regulations, overseeing professional standards and accreditation efforts, coordinating employee development and training programs, and supporting transparency and accountability initiatives.
Community Services and Special Programs
The Department works closely with community members, schools, businesses, and partner agencies to provide crime prevention programs, public education, emergency preparedness, and community engagement initiatives. These efforts support collaborative problem-solving, strengthen public trust, and enhance the overall safety and wellbeing of the Capitola community.
FISCAL YEAR ACCOMPLISHMENTS: FY 2025-26
Converting CSO to MSO
Filling PEO positions
Successful PO recruitment ongoing
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Axon interview room
EOP- almost complete
Grants- Cannabis, ABC, Body Armor
Pay station replacement plan completed
Ecite technology rolled out for use
FISCAL YEAR GOALS: FY 2026-27
Incorporate the increased use of technology subscriptions and equipment into the city budget o Axon
o Drones
o RMS
o RING
o ALPR
MSO onboarded and embedded in NBMS, community outreach, Ebike safety Recruit new Chief Advisory Committee Members
Utilize grants for traffic safety operations
o Cannabis Grant
o OTS- traffic safety
Ongoing training for all Patrol Officers in the use of radar and LIDAR equipment to support effective traffic enforcement
Community engagement townhall with Chief of Police and administrative staff to improve communication and goal setting, incorporating the public’s input Establish a collaborative working group focused on developing innovative recruitment and retention strategies that address the evolving expectations and long-term career needs of PEPRA employees while ensuring the organization remains competitive in attracting and retaining qualified personnel.
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LAW ENFORCEMENT
POLICE
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PARKING ENFORCEMENT
POLICE
DEPARTMENT PURPOSE
The Parking Enforcement Unit is responsible for enforcing California Vehicle Code regulations and Municipal Parking Ordinances to promote safe, accessible, and efficient use of public parking throughout the City. The Unit works to minimize parking violations, reduce traffic congestion, and maximize parking availability for residents, businesses, and visitors while supporting overall community mobility and public safety.
FISCAL YEAR ACCOMPLISHMENTS: FY 2025-26
Maintain existing pay stations.
Begin upgrading pay stations with a new payment interface. Begin incorporating the “park mobile” pay option
Explore hybrid vehicle options for parking enforcement vehicles.
FISCAL YEAR GOALS: FY 2026-27
Continue pay station maintenance and continuously evaluate their locations for best accessibility
Evaluate the cost of hourly parking and the bail schedule for parking violations Evaluate the amount of parking passes provided for events and programs 61 184
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ANIMAL SERVICES
POLICE
DEPARTMENT PURPOSE
The Animal Services Unit (ASU) promotes and protects public safety and animal care through sheltering, pet placement programs, education, and animal law enforcement. Our purpose is to provide responsive, efficient, and quality animal control services that preserve and protect the public and promote animal safety.
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PUBLIC WORKS SUMMARY
PUBLIC WORKS
MISSION STATEMENT
The Capitola Department of Public Works, through our valued employees, develops, maintains, and operates the City’s infrastructure and natural resources and provides environmental stewardship for the benefit of our residents, businesses, and visitors.
DEPARTMENT PURPOSE
Public Works stewards Capitola’s public infrastructure. We are dedicated to providing safe, functional and sustainable systems improving the quality of life for the residents, businesses and visitors of the City of Capitola in a responsive and cost-effective manner and in accordance with local, state and federal regulations.
To provide this stewardship, the department has three divisions.
The Maintenance Division is responsible for the day-to-day operations, maintenance, and repair of the public infrastructure and facilities including streets and medians, streetlights and traffic signals, street trees, sidewalks and pathways, parks, public buildings, and maintains the City's fleet of vehicles and equipment.
The Engineering Division designs and oversees the construction of all capital improvement projects for the City’s public infrastructure systems and public buildings/facilities; prepares technical studies/reports; regulates construction activities within the public right-of-way by private entities and utility companies; and maintains infrastructure records. The Engineering Division also works closely with the Community Development Department and Building Division to perform plan review and inspection services of tract/parcel maps for subdivisions and grading and drainage improvements on private property; provides technical support to the Public Works Maintenance Division.
The Environmental Division provides environmental support services to Public Works and other City Departments to ensure compliance with federal, state, and local environmental laws, regulations, and policies. The Environmental Division also manages the City's Storm Water Management Program and Solid Waste Franchise Agreement which includes industrial, construction, and municipal activities and operations within the City; staffs the Commission on the Environment.
FISCAL YEAR ACCOMPLISHMENTS: FY 2025-26
Completed Community Center Renovation
Completed Treasure Cove Playground
Completed Jade Street Restroom Renovation
Completed 41st Avenue Multimodal Improvements
Advanced Bay Avenue Corridor Project through planning and concept development Advanced Cliff Drive Resiliency Project through preliminary design Secured grant funding for Esplanade Park Improvement development 63 186
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FISCAL YEAR GOALS: FY 2026-27
Complete Citywide Active Transportation Plan (ATP)
Complete update of the Climate Action Plan
Advance Esplanade Park Improvements into design and implementation phases Advance Cliff Drive Resiliency Project into final design Advance additional capital improvement projects
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STREETS
PUBLIC WORKS
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PUBLIC WORKS
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PUBLIC WORKS
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COMMUNITY AND ECONOMIC DEVELOPMENT
MISSION STATEMENT
The Building, Planning, and Economic Development Department (BPED) promotes development which supports attainable housing, economic opportunities, community wellbeing, and the environment. The Department provides responsive, high-quality services and programs which enhance the quality of life for the City’s residents, businesses, and visitors within the built and natural environment.
DEPARTMENT PURPOSE
The BPED administers the City's land use policies and standards adopted by the City Council including Zoning Code (Title 17), Housing and Development Administration (Title 18), General Plan, Housing Element, Local Coastal Program, and other regulations. The Department’s key functions include review of development applications, application of CEQA, maintenance of regulatory and long-range planning documents, implement economic development strategy, building plan check and inspection services, code compliance, administration of the affordable housing programs, and grant administration related to planning, housing, economic development, public facilities, and public services. The Department provides staff support to the Planning Commission and City Council.
KEY CHANGES
During the past fiscal year, the department focused implementation of the Housing Element related to the Capitola Mall redevelopment, the 41st Avenue Corridor Plan, the Wharf Master Plan, and recruitments for the Building Official and Senior Planner. Priorities for FY2026-27, include ongoing collaboration toward redevelopment of the Capitola Mall, implementation of the Wharf Master Plan, implementation of the 41st Avenue Corridor Plan, and ongoing housing element implementation.
FISCAL YEAR ACCOMPLISHMENTS: FY 2025-26
Rebrand the department as the Community and Economic Development Department and realign priorities toward housing and economic development initiatives. Promoted economic growth through place making and branding initiatives of commercial corridors and adopted zoning incentives to catalyze redevelopment of the Capitola Mall. Implementation of the 6th Cycle Housing Element including objective standards for Mall Redevelopment and amendments to the Multifamily Residential zoning. Adopted the Capitola Wharf Master Plan and solicited proposals for development. Adopted the 41st Avenue corridor study incorporating Clares Street and Capitola Road. Issued occupancy for a 36-unit 100% affordable development at 4401 Capitola Road. Administered CDBG Grant of $300,000 to nonprofit for low-income food and transit services. Administered CDBG Grant of $3.3 million for renovation of the Jade Street Community Center and $3.3 million for Treasure Cove Park.
Initiated rehabilitation program with Habitat for Humanity. 7 applications received, 2 completed 80 planning and 407 building permit application submitted July 1, 2025, through April 15, 2026.
FISCAL YEAR GOALS: FY 2026-27
Engage property owners of economic development opportunity sites including Capitola Mall, Redtree’s 1 Bay Avenue, and Swenson’s 120 Monterey.
Issue building permits for new 52-unit affordable housing development at 1098 38th Ave. Issue occupancy of Tesla Dealership at 1601 41st Avenue Provide training opportunities for building staff to bring building plan review in as an internal staff function to encourage growth and job satisfaction while providing savings to the City. Apply for 2026 CDBG grant for Community Facilities or Public Infrastructure for up to $5 million
Issue building permits for new hotel at 720 Hill Street and affordable housing at 1098 38th Ave. Issue occupancy of 36-unit, 100% affordable housing at 4401 Capitola Road. Complete Capitola Wharf Master Plan and research funding opportunities for implementation. 68 191
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Complete 41st Avenue corridor study.
Administer grants to support Capitola residents with food services and housing production. Provide training opportunities for all staff to encourage growth, job satisfaction, and longevity. 69 192
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COMMUNITY AND ECONOMIC DEVELOPMENT
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COMMUNITY AND ECONOMIC DEVELOPMENT
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COMMUNITY SERVICES AND RECREATION
CULTURE & LEISURE
MISSION
The City of Capitola Community Services and Recreation Department is dedicated to providing safe, affordable, and enjoyable recreational opportunities that enrich the quality of life for residents and visitors of all backgrounds and abilities. Committed to excellence and public safety, the Department continuously strives to enhance its programs, services, and operations to best serve the evolving needs and interests of the community.
DEPARTMENT PURPOSE
The Community Services and Recreation Department enhances the quality of life for Capitola residents and the broader community by offering a wide range of recreation and leisure services. These include Cityrun programs such as Junior Lifeguards, Camp Capitola, and community events, as well as over 500 classes provided by contracted instructors. Youth programs serve more than 2,000 children annually. The Department also manages key community assets, including the Capitola Community Center, Jade Street Park, and Monterey Park. From Memorial Day weekend through the end of October, the Department operates a USLA-certified Lifeguard Division to ensure the safety of beachgoers at Capitola Beach. The Department represents the City through its staff, instructors, seasonal hires, and the condition of its facilities. It also fosters youth development through job training programs like the Junior Lifeguard Captains Corps and Camp Capitola Junior Leader Program and promotes access through scholarships for underresourced youth.
KEY CHANGES
With the Community Center remodel project complete, the Community Services and Recreation Department will return offices and programs.
FISCAL YEAR ACCOMPLISHMENTS: FY 2025-26
Provided Lifeguard services to event organizers and maintained tower services at Capitola Beach through the end of October.
Sustained a robust schedule of Classes for Adults and Youth with minimal disruption during Community Center remodel.
Provided Wharf programming with fun, family friendly activities by hosting a new “Boogie on the Wharf” dance event series.
Modified Camp Capitola in response to the Community Center remodel while maintaining the program’s high quality at the temporary location
Celebrated the 10th annual Plein Air event with new artist engagement opportunities for the public and record exhibition attendance.
Introduced two new music events: “New Music Sundays” featuring local youth bands, and “Dueling Pianos” offering a fresh and interactive community opportunity. Enhanced Junior Guard youth development by redistributing age division throughout the session providing smaller group sizes for effective instruction.
FISCAL YEAR GOALS: FY 2026-27
Strengthen partnerships with county recreation agencies to expand regional initiatives such as Park Rx, Family Fun Day, and other collaborative programs. Develop a new Community Center Rental package incorporating new use opportunities provided by the Community Center Remodel.
Enhance structure of the Beach Lifeguard Service and Junior Guard program. Provide Camp Capitola with an increased capacity and utilize the new Jade St Park features and Treasure Cove Playground.
Utilize lessons learned for new music events “Dueling Pianos” and New Music Sunday’s” and provide an improver series for residents.
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MUSEUM
CULTURE & LEISURE
MISSION
The Capitola Historical Museum preserves and promotes the history of Capitola through creating exhibitions, maintaining a collection of historic photographs and artifacts, conducting oral histories, and participating in special events.
DEPARTMENT PURPOSE
To promote, through the establishment and maintenance of a museum and allied projects, a program that will bring a better understanding and appreciation by the Capitola community of its history, architecture, culture, technology, and its creative and natural environments.
FISCAL YEAR ACCOMPLISHMENTS: FY 2025-26
Installed “Multiple Personalities: the stories behind Capitola’s historic buildings” exhibition Installed rotating exhibits at the Capitola Library.
Increased visitation to museum
Increased volunteer count for continuous museum open hours Installed Whard model in City Council Chambers for public viewing Increased donations with advent of online payments and QR Code deployment FISCAL YEAR GOALS: FY 2026-27
Continue exhibition “Multiple Personalities: the stories behind Capitola’s historic buildings” Recognize the Museum’s 60th anniversary
Continue to scan images to digitize collections
Review collections to reduce storage need
Continue to develop Museum Membership
Shift museum newsletters to digital platform
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INTERNAL SERVICE FUNDS
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INTERNAL SERVICE FUNDS
Stores (City Manager): The Stores Fund accounts for general supplies, postage, and rental of office equipment.
Information Technology (City Manager): The Information Technology Fund provides funding for the replacement and upgrade of the existing computer network. The number of personal computers, laptops, printers, and servers each department uses forms the basis for department allocations.
Equipment Replacement (Public Works): The Equipment Replacement Fund provides funding for the replacement of city vehicles, including passenger cars, parks maintenance vehicles, police vehicles and other specialty vehicles. Departments contribute to this replacement fund based on the depreciation expense of existing vehicles. This fund also receives the revenue received from the sale, or trade-in, of surplus vehicles.
Self-Insurance Liability (City Manager): The Self-Insurance Liability Fund collects funding from departments to pay for self-insured liability and property protection insurance premiums provided through the Monterey Bay Area Self Insurance Authority (MBASIA) joint powers authority.
Workers’ Compensation (City Manager): The Workers’ Compensation Fund collects funding from departments to pay for Workers’ Compensation coverage through the MBASIA.
Compensated Absences (Finance): The Compensated Absences Fund accumulates money to pay future employee benefit costs, such as vacation and sick leave payouts, at termination or retirement.
The City Council sets the policy to ensure the City can fulfill future obligations. 76 199
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STORES FUND
The Stores Fund accounts for general supplies and postage. This also includes the rental of the postage machine and the repair and maintenance of shared office equipment. 77 200
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INFORMATION TECHNOLOGY FUND
The Information Technology Fund collects and designates funds for the future replacement of citywide hardware and software. Annual on-going information technology costs are allocated based on the distribution of resources.
Contract services: on-going technology licenses
Supplies: replacement technology equipment
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EQUIPMENT REPLACEMENT FUND
The Equipment Replacement Fund is designed to provide funding for replacement of City vehicles, including passenger cars, maintenance vehicles, police vehicles and other specialty vehicles.
Departments contribute to this replacement fund based on the depreciation costs of existing vehicles.
This fund receives revenue from trade-ins and surplus equipment sales. The General Fund charges for services based on the prior year fleet depreciation costs adjusted by the CPI index.
During the annual budget process, the Public Works and the Police Department review the current vehicle inventory listing and make recommendations for vehicle acquisitions and replacements, considering on-going maintenance costs.
FY 2025-26 CAPITAL OUTLAY
PD Patrol vehicles $ 75,000
Gem Car 25,000
FY 2027-28 CAPITAL OUTLAY
Depreciation $ 200,000
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SELF-INSURANCE LIABILITY FUND
The Self-Insurance Liability Fund accumulates funds for deductible expenditures and excess incidents above the City’s liability coverage. The fund pays for the following expenses:
Excess Insurance Premiums - The City belongs to the Monterey Bay Area Self Insurance Authority (MBASIA) joint powers authority. MBASIA covers all liability expenses, fire, property protection, and general liability claims up to $10,000 per occurrence. Property Insurance – The City receives property insurance through the Public Entity Property Insurance Program and is insured by Lexington. The City’s premium is $100,000. Vehicle and Equipment Insurance Coverage - Coverage for vehicles and equipment with a purchase value of $25,000 or more. The annual premium is $7,500 with a $2,000 deductible. Unemployment Insurance - The California Employment Development Department (EDD) defines the City as a “State Unemployment Insurance Reimbursement Client.” The City does not pay unemployment insurance premiums to the State. When an employee files for and receives unemployment benefits from the State, the City is responsible for that benefit.
Charges for services are allocated to each General Fund department based on their percentage of the total operating budget from the prior fiscal year less the budget for unanticipated events. 80 203
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WORKERS’ COMPENSATION FUND
The Workers’ Compensation Fund satisfies the requirements of Capitola municipal code section
3.24.030, which states, “The City Manager and City Treasurer shall establish a reserve fund for purposes of paying future workers’ compensation claims and shall, hereafter, make such annual deposits into that fund as the city is advised are actually necessary to provide a suitable reserve.” This program also covers City volunteers.
The City belongs to a Joint Powers Authority (JPA), Monterey Bay Area Self Insurance Authority, composed of several local agencies: Del Rey Oaks, Gonzales, Greenfield, Hollister, King City, Marina, Sand City, Scotts Valley, and Soledad. The City retains exposure to temporary disability payments as long as the injured worker remains an employee of the City. MBASIA purchases excess coverage beyond $500,000 per occurrence up to statutory requirements.
The annual premium that is assessed to each of the participating cities in the JPA is based on three primary factors: the number of employees in each of the two major categories (Safety & Miscellaneous), the experience rate (cost incurred) of each participating agency, and debt service allocation.
When an employee files a claim, the City pays the employee’s salary portion directly from the general fund based upon the standard workers’ compensation formula, for the “temporary” claim. The formulas for employees receiving workers’ compensation are as follows:
1. Public Safety: Compensation is 100% of salary, non-taxable.
2. Miscellaneous: Compensation is 2/3 of salary with a cap of $840 per week, non-taxable.
For non-safety staff, City policy allows that accruals (i.e., sick, vacation, etc.) may be used to supplement workers’ compensation payments. If the person becomes “permanently disabled” then the JPA picks up the salary portion. The JPA pays all other costs including legal and medical. While on workers’ compensation status, the safety and non-safety staff continue to accrue sick and vacation leave balances.
Distribution to General Fund Departments:
The allocation methodology for workers’ compensation charges to the General Fund Departments corresponds closely to the cost allocation method used by the JPA. The City divides employees into three classifications: Sworn, Non-Sworn and Volunteers, with cost per FTE calculated. A fund balance accommodates future premium fluctuations, deductibles, and excess liability. 81 204
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COMPENSATED ABSENCES LIABILITY FUND
The Compensated Absences Liability Fund accumulates reserves to pay for employee cash-outs, such as accumulated sick leave and vacation, due to employees upon termination or retirement. The following is an itemized description of the various liabilities of this fund.
Vacation > 360 hours: An employee who has accumulated more than 360 hours (504 hours for POA) as of the last pay period in April of any year shall be paid in cash at a rate equal to 100% of his/her current hourly rate for hours exceeding 360 (504 for POA). The hourly rate includes specialty pays.
Vacation - Voluntary Cash Out: In accordance with various memoranda of understanding between the employee bargaining groups and the City of Capitola, employees may elect voluntary cash outs up to 80 hours of vacation.
Police Captain Cashable Sick Leave: Refer to contract.
Final Pay: Upon resignation, employees are eligible for vacation cash outs.
Severance Pay: The City provides the following severance payout packages:
City Manager 12 months
Police Chief 6 months
Public Works Director 4 months
Community Development Director 4 months
Finance Director 4 months
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SPECIAL REVENUE FUNDS
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SPECIAL REVENUE FUNDS
Supplemental Law Enforcement Services (Police): Funds provided by a State of California COPS grant to provide funding for Community Oriented Policing & Problem Solving (COPPS) programs.
Restricted Transient Occupancy Tax (TOT) (City Council): Capitola voters passed Measure J in 2018, increasing the TOT from 10% to 12% and restricting 0.4% for local business groups and 0.35% for early childhood and youth programming.
Road Maintenance and Rehabilitation Act (SB1) (Public Works): Funds received from the state and used for road maintenance, rehabilitation, and critical safety projects on local streets and roads.
Regional Transportation Commission (RTC) Streets (Public Works): Santa Cruz County voters passed a 0.5 percent user sales tax to fund local roads. The RTC Streets fund will be utilized to increase the City’s Street program.
Gas Tax (Public Works): Funds received from gasoline tax revenue from the state and used for new construction, maintenance, and the reconstruction of City streets.
Wharf (Public Works): Accounts for rental income generated from wharf operations and expended on operations and major repairs and improvements.
General Plan Update and Maintenance (Community Development): Funds received as General Plan Maintenance Fee to support future updates to the City’s General Plan, implementing ordinances and plans.
Green Building (Community Development): Green Building funds are solely for program management, training, publications, public educational purposes, incentive programs, materials, and supplies to promote sustainable development, water conservation, storm water pollution prevention, and climate action planning.
Public Art (City Manager): This fund accumulates money received as public art fees to acquire works of art to be displayed in or about public places within the city.
Parking Reserve (Public Works): In 2009 the Council authorized a special reserve fund from the Village parking meters for parking-related projects.
Technology Fee (Community Development): 5% of building permit fee funds permit processing technology.
Public Education & Government Cable TV Access (City Manager): This special revenue fund accounts for PEG cable television fees. The expenditures are restricted to PEG access-related activities.
Capitola Village & Wharf Business Improvement Area (Finance): Established to generate revenue for the exclusive purpose of promoting business in the Capitola Village and Wharf Business Improvement Area.
Community Development Block Grants (Community Development): This fund accounts for active CDBG reimbursement grants that are awarded to the City on a project-by-project basis.
Community Development Block Grant Program Income (Community Development): This fund accounts for income from housing loans that are funded with Community Development Block Grant funds. Loans and interest repaid to the fund are restricted to CDBG approved uses.
Library (City Manager): The new Capitola Branch Library opened in June 2021. The Friends off the Capitola Branch Library raised over $600,000 of donations for project enhancements with approximately $50,000 remining in the Library fund.
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HOME Program Reuse (Community Development): This fund accounts for housing loans due to the City from the recipients of previous HOME Program grants. Receipts in the Home Program Reuse Fund are restricted to affordable housing activities in accordance with the federal HOME program re-use guidelines.
Housing Trust (Community Development): The City Council adopted an Inclusionary Housing Ordinance in November 2004, which created an Affordable Housing Trust Fund. It is funded from in-lieu fees, which can be used for new affordable housing and rehabilitation of existing affordable housing.
Permanent Local Housing Allocation (PLHA): In 2017, Senate Bill 2 (SB 2) established a $75 recording fee on real estate documents and created the Permanent Local Housing Allocation Fund (PLHA). PLHA funds are allocated to local governments for eligible housing and homelessness activities and provide a permanent, on-going source of funding for housing-related projects and programs that address the unmet housing needs of communities.
Capitola Housing Successor (Community Development): When the Capitola Redevelopment Agency dissolved, the City elected to become the Housing Successor to the former Low- and Moderate-Income Housing Fund of the RDA.
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SUPPLEMENTAL LAW ENFORCEMENT SERVICES
POLICE
In 1996, California's state legislature (AB 3229) established the Citizens Options for Public Safety (COPS) program, allocating $100,000,000 annually to local governments for front-line law enforcement. These funds are administered through the Supplemental Law Enforcement Services Fund (SLESF) program. The COPS program received its initial funding in the 1996-1997 California state budget and has been consistently funded since then. Section 30061 (c) (1) of the Government Code outlines the future funding details for the COPS program through SLESF.
SLESF funds are grants, and the legislation requires that each municipality receive annual funds to be used for "front-line law enforcement services." These funds cannot be used to replace existing resources but must be used to enhance them. Eligible expenses include salaries, services, supplies, equipment, and administrative costs.
Furthermore, SLESF funds cannot be redirected to a municipality's general fund but must be exclusively used for front-line law enforcement services. The total award to each recipient entity is based on population size, with a minimum annual award of $100,000 for all entities. For example, the Capitola Police Department receives an annual award of $100,000. Fund distributions are made regularly throughout the year.
Contract Services: Utility services – Gas & Electric
Supplies: Front line law enforcement
Capital Outlay: Online report writing, electronic ticket writing 86 209
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RESTRICTED TRANSIENT OCCUPANCY TAX (TOT)
CITY COUNCIL
This fund accounts for the 0.75% of restricted Transient Occupancy Tax (TOT) as approved by Capitola voters in 2018. The Restricted TOT Fund is used to receive and distribute half of the 0.40% of restricted TOT revenues for local business groups with the other half going directly to the Capitola Village & Wharf Business Improvement Area fund and the 0.35% of restricted TOT revenue dedicated to early childhood and youth programming.
ECYP Enrichment
Field Trips and similar activities
Community Grants – Early Childhood & Youth Community Grants - $60,000 Other financing uses – payment to Capitola-Soquel Chamber of Commerce - $37,000 Equal amount distributed directly to Capitola BIA fund. 87 210
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ROAD MAINTENANCE & REHABILITATION ACT (SB1)
PUBLIC WORKS
This fund accounts for receipt and expenditure of revenue as provided by state law. The Road Maintenance & Rehabilitation Act Fund is primarily used to cover the expenses related to street maintenance and rehabilitation projects on City roads and streets.
Capital Outlay – Annual pavement management plan.
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REGIONAL TRANSPORTATION COMMISSION (RTC) STREETS
PUBLIC WORKS
This fund accounts for receipts and expenditures of money received from the Santa Cruz County Regional Transportation Commission. A description of proposed projects is listed in the summary section of this budget.
Capital Outlay – Annual pavement management plan.
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GAS TAX
PUBLIC WORKS
This fund accounts for receipt and expenditure of gasoline tax revenue as provided by state law. The Gas Tax Fund is primarily used to cover the expenses related to maintenance and operation of the City’s traffic signals and streetlights. Other Gas Tax Fund programs include street maintenance patching and striping projects, street sweeper lease payments, and engineering.
The Gas Tax funds must be spent within 5 years of receipt. Future Gas Tax funds cannot be pledged for current projects with future repayment; therefore, the funds can only be spent once they have been received.
Contract Services:
Admin & Engineering - $50,000
Streetlights & traffic signals - $140,000
Street & sidewalks - $35,000
Street painting - $30,000
Street sweeper maintenance - $30,000
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WHARF
PUBLIC WORKS
The Wharf Fund accounts for rental income generated from Capitola Wharf operations and is used to cover ongoing maintenance, operating costs, and periodic repairs. Revenues accumulate in the fund to help meet expenditure needs; however, major repairs—typically required on a 3–5-year cycle—have occasionally required General Fund support to keep the facility safe and accessible.
Following the passage of Measure F, the City reconstructed and reopened the Wharf in September 2024.
Measure F revenues are managed through the Capital Improvement Fund (CIP) and supported the design and construction of the improved Wharf. The Wharf Fund continues to be used for maintenance and repair of the now-rebuilt facility.
Contract Services:
Utilities - $36,500
Janitorial services - $7,000
Property & Equipment repairs & maintenance - $4,500
Rentals (portable toilets) - $10,000
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GENERAL PLAN UPDATE & MAINTENANCE
COMMUNITY DEVELOPMENT
In 2002, the State Legislature passed AB 2936 to enable cities to collect fees “reasonably necessary to prepare and revise the plans and policies that a local agency is required to adopt before it can make any necessary findings and determinations”. The General Plan Maintenance Fee is currently 0.5 percent of the total building valuation to cover the cost of a comprehensive future update of the City’s General Plan.
The City adopted a comprehensive update to the General Plan in 2013. To implement the General Plan, the City updated the Zoning Code in 2018 which was certified by the California Coastal Commission in 2021. In 2024, the 6th Cycle Housing Element Update was certified by the state. The adopted budget provides adequate resources to implement the General Plan and the 6th Cycle Housing Element in FY 2026-27. The City plans for the next comprehensive update of the General Plan around 2033.
The City adopted a comprehensive update to the Zoning Code which was certified by the California Coastal Commission in 2021. The 6th Cycle Housing Element Update was certified by the state in 2024. The adopted budget provides adequate resources to fund consultant contracts and staff time to finalize the Housing Element implementation efforts in FY 2026-27.
Contract services:
RRM - $10,000 – Housing Element
Update Housing Impact Fee – Rental - $30000
City Staff time – Housing Element - $30,000
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GREEN BUILDING
COMMUNITY DEVELOPMENT
The Green Building Ordinance (Chapter 17.10 to the Capitola Municipal Code) was adopted in May 2008 and later amended in November 2014. The Green Building Ordinance establishes the Green Building Fund, which provides funding for the administration and implementation of the Green Building program and related sustainability initiatives. The intent of the Green Building fund is to provide resources for programs and initiatives which promote environmental sustainability, resource conservation, greenhouse gas emission reductions, and solid waste reduction. The fund is utilized for the City’s participation in regional climate action planning as a member of the Resilient Central Coast, fund a consultant contract to update the Climate Action Plan, and implement the Green Halo construction waste tracking system.
Application and Use of Funds (per City municipal code): The Capitola Green Building Regulation applies to non-residential additions and/or exterior remodels totaling 1,000 or more square feet and residential additions and/or remodels totaling 350 square feet or more. Building permits which are required to comply with the Green Building Regulations shall be assessed a fee of 0.0025 times the overall valuation of the project.
Revenues collected shall be maintained by the Finance Department as a revolving Green Building Fund and shall be used only for program management, training, publications, public educational purposes, incentive programs, materials and supplies necessary to promote sustainable development, water conservation, storm water pollution prevention, and climate action planning activities.
Contract services:
Resilient Coast California Working Group - $5,000
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PUBLIC ART
CITY MANAGER
The City established a Public Arts fee in 2004. The purpose is to ensure that 2% of the cost of eligible municipal capital improvement, renovation, or restoration projects funded in whole or in part by the City of Capitola or any private, non-residential development project with a total building permit valuation of $250,000 or more is set aside for the acquisition of works of art to be displayed in or about public places within the City.
For private development, there is an in-lieu option to contribute 1% of the total budget to the Public Art Program. As part of the program expenses, up to 20% of the art allocations may be expended on program administration, project management and community outreach activities.
Projects completed in FY 2025-26
Monterey Ave Railing Public Art Project-June 2026
Projects for FY 2026-27
Bandstand Weathervane Public Art Project
Rispin Reflecting Pool Public Art Project
Contract services: Contracts with artists on various projects - $85,000 94 217
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PARKING RESERVE
PUBLIC WORKS
In 2009, as part of a parking meter rate increase, the City Council established the Parking Reserve Fund.
Revenues deposited into this fund represent 16% of parking meter revenues from the Village area (Parking Meter Zone A1). The fund was established to fund parking improvement projects throughout the Village. As part of the FY 2023-24 City Council Goals this debt was paid off. 95 218
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TECHNOLOGY FEE
COMMUNITY DEVELOPMENT
On November 12, 2009, the City of Capitola adopted a resolution establishing the Technology Fee. The fee is 5% of the Community Development and Public Works permit fees. The City has updated building, planning, and public works permitting software. The system better coordinates plan review activities among departments and will allow the public to inquire and search records and monitor progress of applications through the internet. The City will continue to make changes to the system in order to provide better service to the public and to improve internal processes. The zoning update process and its implementation will also benefit from the system’s data resources and enhanced reporting capabilities.
Contract Services:
iWorQ annual fee – Public Works - $3,500
iWorQ annual fee – Community Development - $12,500
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PUBLIC EDUCATION/GOVERNMENT CABLE TV ACCESS (PEG)
CITY MANAGER
This Special Revenue Fund accounts for Public, Education & Government (PEG) cable television fees. The PEG Access fee from all cable service providers is 64 cents per subscriber and is due to the City concurrent with the Franchise Fee Payments. The City is required to segregate PEG access fees and related purchases.
The funds received through PEG fees are retained by the City and utilized for capital equipment purchases in support of PEG access only. PEG channels are set aside for the following purposes:
- Public - available for use by the public
- Education - available for use by educational institutions for educational programming - Government – available for programming by local governments Contract Services – Community Television
Capitola Outlay – Technology upgrades – City Council Chambers Fund - 1320
Public Education & Gov't.
FY23/24
Actual
FY24/25
Actual
FY25/26
Amended
FY25/26
Estimated
FY26/27
Proposed
FY27/28
Planned
Beginning Fund Balance $ 45,080 $ 57,530 $ 68,094 $ 68,094 $ 63,594 $ 44,594 Revenue
Licenses and permits $ 10,453 $ 9,215 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Use of money & property 1,997 2,757 1,500 1,500 1,500 1,500 Revenue Totals $ 12,450 $ 11,972 $ 11,500 $ 11,500 $ 11,500 $ 11,500 Expenditures
Contract services $ - $ 1,408 $ 6,000 $ 6,000 $ 24,000 $ 24,000 Supplies - - - - - -
Capital Outlay - - 10,000 10,000 6,500 6,500
Expenditure Totals $ - $ 1,408 $ 16,000 $ 16,000 $ 30,500 $ 30,500 Fund Balance at 06/30 $ 57,530 $ 68,094 $ 63,594 $ 63,594 $ 44,594 $ 25,594
SOURCES AND USES
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CAPITOLA VILLAGE/WHARF BUSINESS IMPROVEMENT AREA (BIA)
FINANCE
In June 2005, the City of Capitola adopted Ordinance No. 889, which added Chapter 5.10 to the Capitola Municipal Code establishing the Capitola Village and Wharf Business Improvement Area (BIA). It was established to generate revenue for the sole purpose of promoting business in Capitola village and on the wharf. State law requires certain annual actions and public hearing to continue this assessment district. The program is run with the assistance of a BIA Board of Directors, which provides city council with an annual budget proposal.
Contract services and supplies: Capitola Village & Wharf Business Improvement Area annual report to be submitted to the Capitola City Council in late May or early June. 98 221
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COMMUNITY DEVELOPMENT BLOCK GRANTS (CDBG)
COMMUNITY DEVELOPMENT
The Community Development Block Grant (CDBG) program is a flexible program that provides communities with resources to address a wide range of unique community development needs. The program is funded though the Federal Department of Housing and Urban Development (HUD) and Capitola participate in the competitive Small Cities Grant Program administered by the California Department of Housing and Community Development.
In recent years, the City has been awarded CDBG grants to fund the City’s Local Hazard Mitigation Plan (LHMP), Safety Element of the General Plan Update, CARES Act funding in response to the pandemic and food assistance and transit in cooperation with local nonprofits. In FY 2025-26, the City was awarded two CDBG Grants including $3.3 million for the Jade Street Community Center, $3.3 million for Treasure Cove Park, and $300,000 for food services. In 2026-27 the City plans to apply for another $5 million CDBG grant.
Fund - 1350
CDBG Grants
FY23/24
Actual
FY24/25
Actual
FY25/26
Amended
FY25/26
Estimated
FY26/27
Proposed
FY27/28
Planned
Beginning Fund Balance $ (70,889) $(149,941) $ 106,739 $ 106,739 $ 667,539 $ 667,539 Revenue
Intergovernmental revenues $ 160,560 $ 495,515 $4,010,392 $4,010,392 $ - $ - Revenue Totals $ 160,560 $ 495,515 $4,010,392 $4,010,392 $ - $ - Expenditures
Contract services $ 83,548 $ 65,590 $ 169,080 $ 169,080 $ - $ - Grants and subsidies 156,064 173,246 80,512 80,512 - -
Other financing uses - - 3,200,000 3,200,000 - -
Expenditure Totals $ 239,612 $ 238,836 $3,449,592 $3,449,592 $ - $ - Fund Balance at 06/30 $(149,941) $ 106,739 $ 667,539 $ 667,539 $ 667,539 $ 667,539
SOURCES AND USES
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COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM INCOME
COMMUNITY DEVELOPMENT
This special revenue fund accounts for issuance and repayment of CDBG-funded housing loans made by the City to income-qualifying households. These funds are referred to as CDBG Program Income. CDBG Program Income must be used for CDBG-approved purposes. The three primary sources of CDBG Program Income are the payoff of Loma Vista Mobile Home Park resident loans, CDBG-funded First Time Homebuyer Program loans, and CDBG-funded Rehabilitation Program loans.
If the total amount of Program Income received in any fiscal year is less than $25,000, the funds received are not subject to Federal CDBG regulations. If the amount exceeds $25,000, all Program Income received during that fiscal year is restricted to CDBG-approved Federal spending guidelines.
During FY2025-26, one CDBG loan was paid off in the amount of $8,894.32. 100
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LIBRARY
CITY MANAGER
This special revenue fund accounts for revenue and expenses related to the design and construction of the new Capitola Branch Library. The former Redevelopment Agency contributed $2.6 million to the County of Santa Cruz which was held in a trust fund for the future construction of a new branch library.
The Voters of Santa Cruz County authorized the Santa Cruz Libraries Facilities Financing Authority to issue general obligation bonds in an aggregate principal amount not exceeding $67 million. The City of Capitola will receive $10.0 million from the bonds to be used towards the construction of the new branch library, bringing the City’s total available funds to $12.6 million.
The City started utilizing the County Trust Fund money in FY 2016-17 to hire a project manager to oversee the development of plans and ultimately the construction of the Library. Under the trust fund agreement, the City can utilize 15 percent of the funds for pre-construction activities.
In addition to the funding sources mentioned above, the Friends of the Capitola Branch Library (Friends) conducted a fundraising campaign raising over $600,000. The funds donated to the Friends were utilized for enhancement projects throughout the Library. The City completed construction of the new Library in June 2021, however, there remains approximately $50,000 of donated funds that the Friends are evaluating for the best use of those remaining funds.
Additionally, Capitola is scheduled to receive approximately $165,000 annually for the next 20 years as a result of additional Measure S revenues. The first $855,000 will be used to repay the general fund for contributions to the Library project.
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Item 8 B.
HOME PROGRAM REUSE
COMMUNITY DEVELOPMENT
This special revenue fund accounts for revenue from the repayment of Federal Home Investments Partnership Program (HOME) loans. Expenditures in this fund must be used for affordable housing activities in accordance with the Federal HOME Program Reuse Guidelines, including first-time homebuyer loans, owner-occupied rehabilitation projects, and affordable housing assistance projects. As loans are paid off, those funds are returned to the Home Program Reuse Fund and become available for affordable housing activities.
Annual revenue represents principal and interest payments on the 30-year $238,000 Wharf Road Manor Mobile Homeowners Association Acquisition and Rehabilitation Project loan from 2004 as well as other HOME loan payoffs.
In January 2009, the City of Capitola entered a Standard Agreement with the California Department of Housing and Community Development for a HOME grant in the amount of $2,000,000 for rehabilitation expenses related to the 109-unit Bay Avenue Senior Apartments Project. Construction of the project was completed in May 2011. The grant was provided to First Community Housing, the Bay Avenue Senior Apartments project developer, as a residual receipts loan at 3% interest. In May 2011, the HOME program increased the grant award by $1.2 million dollars to cover additional costs related to required rent level revisions, which are lower than estimated in the original pro-forma. The grant funds have been received and dispersed. In recent years, multiple loans have been paid off creating a healthy fund balance for future HOME projects.
The adopted budget provides adequate resources to assist an existing affordable housing development through a rehabilitation project and provide resources to an affordable housing developer to acquire land or develop a project. The budget also covers long-term monitoring of the Bay Avenue Senior Apartments Fund - 1370
HOME Reuse
FY23/24
Actual
FY24/25
Actual
FY25/26
Amended
FY25/26
Estimated
FY26/27
Proposed
FY27/28
Planned
Beginning Fund Balance $ 808,386 $ 881,691 $1,005,956 $1,005,956 $1,015,956 $ 35,956 Revenue
Use of money & property $ 77,005 $ 128,715 $ 20,000 $ 20,000 $ 20,000 $ 20,000 Revenue Totals $ 77,005 $ 128,715 $ 20,000 $ 20,000 $ 20,000 $ 20,000 Expenditures
Contract services $ 3,700 $ 4,450 $ 979,000 $ 10,000 $1,000,000 $ - Other financing uses - - - - - -
Expenditure Totals $ 3,700 $ 4,450 $ 979,000 $ 10,000 $1,000,000 $ - Available Fund Balance
at 06/30 $ 881,691 $1,005,956 $ 46,956 $1,015,956 $ 35,956 $ 55,956
SOURCES AND USES
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Item 8 B.
HOUSING TRUST
COMMUNITY DEVELOPMENT
In November 2004, the City Council adopted an inclusionary housing ordinance as part of the City’s ongoing efforts to provide affordable housing. This ordinance created the Affordable Housing Trust Fund to use as a flexible local source of funding for the creation of new affordable housing, rehabilitation of existing affordable housing, funding of local programs to assist lower and moderate-income buyers purchase affordable housing, or as leverage of local funds for larger State and Federal grants. This housing activity is funded through inlieu fees collected from development projects and does not impact on the General Fund.
The Affordable Inclusionary Housing Ordinance refers to a City Municipal Code Section that requires that fifteen percent (15%) of the units in a new for-sale residential construction project be made available to low or moderate-income buyers. Condominium conversion projects are also covered under this ordinance. As outlined in the ordinance, project developers provide affordable set-aside units or under certain conditions can pay an in-lieu fee.
The City’s Housing Trust Fund allows for up to $75,000 per year to be spent on affordable housing program administration. This includes working with developers on fee collection, administration of the Housing Trust Fund, and implementation of the Inclusionary Ordinance.
A housing rehabilitation program was initiated on FY2025-26. The housing rehabilitation program had seven applications of which two were completed. The City has funding to assist up to 16 deed restricted households through the rehab program.
A homebuyer assistance program was initiated in FY 2025-26. This program is being set up to provide up to $20,000 of down payment assistance to prospective buyers of affordable deed restricted units within the City of Capitola.
Contract Services: Down Payment Assistance
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PERMANENT LOCAL HOUSING ALLOCATION
COMMUNITY DEVELOPMENT
In 2017, Senate Bill 2 (SB 2) established a $75 recording fee on real estate documents and created the Permanent Local Housing Allocation Fund (PLHA). PLHA funds are allocated to local governments for eligible housing and homelessness activities and provide a permanent, on-going source of funding for housing-related projects and programs that address the unmet housing needs of communities.
On May 10, 2023, the City of Capitola was awarded $481,732 in PLHA funds for the first three years of the allocation (2019-2021) and a total five-year estimate of $630,557. The City anticipates additional funding on an annual basis. The first PLHA activity approved is for predevelopment costs related to affordable housing developments. The second activity is to fund the very low income homeless through an annual contribution of $35,000 to the Housing for Health Partnership to support year-round emergency shelter operations in Santa Cruz County. A portion of the funding will cover administrative expenses.
The Adopted budget proved adequate resources to support the development of the 52-unit 100% affordable housing development project at 1098 38th Avenue.
Contract services: Affordable housing and homelessness program development and activities. 104
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CAPITOLA HOUSING SUCCESSOR
COMMUNITY DEVELOPMENT
In 2011, the California State Legislature passed ABX1 26 to dissolve redevelopment agencies. The legislation was contested and upheld by the California Supreme Court. It requires a number of actions to be taken by the city in the winding down of the RDA. Among other things, it allows cities to elect to retain the former RDA Low- and Moderate-Income Housing Fund. The Capitola City Council elected to retain the former RDA Housing with the following new city special revenue fund, the Capitola Housing Successor.
A further requirement of the legislation is the establishment of a program income fund to segregate loan payoffs received by the Housing Successor after the dissolution of the Redevelopment Agency. These funds were initially restricted in their use, repayment, and reuse and the Housing Successor continues this restriction. As payments are received on loans associated with the original RDA Low- and Moderate-Income Housing Fund or the Capitola Housing Successor will be applied to the Capitola Housing Successor.
Newly implemented SB341 requires annual reporting on the Housing Successor Assets to be included with the Annual Financial Statements and the Housing and Community Development (HCD) Annual Progress Report on the Housing Element of the General Plan.
The Adopted budget provides adequate resources to continue supporting security deposit assistance, emergency rental assistance, administration of the City’s affordable housing program, and the MidPen loan to help fund the preconstruction and construction for the 52-unit 100% affordable development at 1098 38th Avenue.
Contract Services: Homeless Action Plan
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RESERVES
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RESERVES
Emergency Reserves (Finance Department): The City Council established the Emergency Reserve Fund to accumulate funds to meet future unanticipated needs. The City of Capitola Administrative Policy III-3, Financial Management Policy, amended on February 28, 2013, to increase the required level of emergency reserves from five to ten percent of operating expenditures.
Contingency Reserve (Finance Department): The City Council established the Contingency Reserve Fund to accumulate a prudent level of financial resources to protect the City against temporary revenue shortfalls or unanticipated operating costs, and/or to meet short-term cash flow requirements. The City of Capitola Administrative Policy III-3, Financial Management Policy, amended on February 28, 2013, to increase the level of contingency reserves from 10 to 15 percent of operating expenditures.
PERS Contingency Reserve (Finance Department): The City Council established the PERS Contingency Reserve Fund in FY 2015/16. The Council discussed possible uses of a General Fund positive ending balance and wanted to set aside funds for future PERS increases. In FY 2022-13 an additional $500,000 was deposited into the Trust to add to the previously deposited $800,000.
Facilities Reserve (Finance Department): The City Council established the Facilities Reserve Fund to serve as a resource to fund capital improvements and major repairs on City facilities. Based on the National Research Council Stewardship of Federal Facility guidelines, the City’s goal is to provide annual contributions equal to two percent of the facility replacement values. This annual contribution will be determined each budget year.
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EMERGENCY RESERVES
The City of Capitola adopted an Emergency Reserve Policy as part of the City’s Financial Management Policies. This reserve protects against significant one-time costs that arise from major unpredictable emergency events. In FY 2012/13, the City amended the Financial Management Policies to increase the funding level of Emergency Reserves from five to ten percent of the General Fund budgeted expenditures, or approximately $1.6 million in FY 2024-25.
The Emergency Reserve fund was nearly depleted in March of 2011 due to an underground storm drain failure that flooded Capitola Village and the surrounding area. The City was required to recognize a $1.4 million extraordinary loss on the FY 2010/11 and FY 2011/12 financial statements. An additional $200,000 was needed to fund a related retaining wall project. In FY 2012/13, a settlement was reached with the City’s insurance carrier to pay $1.35 million in damages to the City.
The March 2011 pipe failure repairs were paid from the City’s Emergency Reserve Fund. As funding in the Emergency Reserve Fund fell short of the flood-related costs, additional funding to respond to the flood event was provided through interfund loans from the Contingency Reserve Fund and Capital Improvement Fund. In FY 2011/12, the Emergency Reserve Fund balance was $410,000 lower than the targeted balance. In FY 2012/13, funds were transferred from the internal service funds, Measure O revenue receipts, and the General Fund operating balance to assist in replenishing the reserves.
In FY 2014/15 and FY 2015/16, $465,100 and $213,000, respectively, were budgeted for transfer to the fund to prepare for any unforeseeable emergencies and to meet the new Emergency Reserve targeted levels. As the chart below shows, the reserve balance is currently below the target level for FY 2024-25 in part due to the transfer of $80,000 for damages from the Jan. 2023 storms. The City anticipates receiving reimbursements from FEMA and Cal OES and plans to fund reserves to target balances once received.
Fund - 1020
FY23/24
Actual
FY24/25
Actual
FY25/26
Amended
FY25/26
Estimated
FY26/27
Proposed
FY27/28
Planned
Beginning Fund Balance $ 1,461,506 $ 1,631,506 $ 1,631,506 $ 1,631,506 $ 1,631,506 $ 1,631,506 Revenue
Other Financing Sources 250,000 $ $ 250,000 -$ -$
Revenue Totals $ 250,000 $ 250,000 -$ -$ -$ -$
Expenditures
Other Financing Uses $ 80,000 $ 250,000 -$ -$ -$
Expenditure Totals $ 80,000 $ 250,000 -$ -$ -$ -$
Fund Balance at 06/30 1,631,506 $ $ 1,631,506 $ 1,631,506 $ 1,631,506 $ 1,631,506 $ 1,631,506 Personnel $12,099,946 $12,692,358 $14,260,987 $14,260,987 $14,984,535 $15,417,536 Contract Services 3,704,267 3,799,530 3,851,191 3,820,000 3,991,445 3,905,719 Training & Memberships 143,324 114,877 169,480 150,000 115,380 146,230 Supplies 958,158 854,877 801,700 850,000 879,350 856,350 Grants 125,000 125,000 133,425 133,425 133,425 133,425
Total GF Expenditures $17,030,695 $17,586,641 $19,216,783 $19,214,412 $20,104,136 $20,459,260 Target Balance (10%) $ 1,758,664 1,703,070 $ 1,921,678 $ 1,921,441 $ 2,010,414 $ 2,045,926 $ Over / (Short) of Target $ (127,159) (71,564) $ (290,173) $ (289,936) $ (378,908) $ (414,420) $
SOURCES AND USES
Reserve Target equals 10% of General Fund expenditures excluding transfers and internal service charges 108
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CONTINGENCY RESERVES
The City of Capitola adopted a Contingency Reserve Policy as part of the City’s Financial Management Policies. This reserve was established to provide a prudent level of financial resources to protect against temporary revenue shortfalls, unanticipated operating costs, and/or to meet short-term cash flow requirements. In FY 2012/13, the City amended the Financial Management Policies to increase the Contingency Reserve target from 10 to 15 percent of General Fund budgeted expenditures, or approximately $2.6 million in FY 2024-25.
Due to the expenses associated with the March 2011 pipe failure, a loan was made from the Contingency Reserves Fund to the Emergency Reserves Fund. As a result, Contingency Reserves were $727,000 below their Financial Management Policy funding goal in FY 2011/12. In FY 2012/13, funds were transferred from the Internal Service Funds, Measure O revenue receipts, and the General Fund operating balance to assist in replenishing and building the reserves.
In FY 2014/15 and FY 2015/16, a total of $182,600 and $89,400 were transferred to the fund to meet the new Contingency Reserve targeted levels. As the chart below shows, the reserve balance is currently estimated to be below the target level for FY 2024-25. The City anticipates receiving reimbursements from FEMA and Cal OES and plans to fund reserves to target balances once received. 109
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PERS CONTINGENCY RESERVES
The City of Capitola established a PERS Contingency Reserve as part of the FY 2015/16 Budget process. The fund was set up to help stabilize the City’s finances and help manage future increases in PERS contributions.
The PERS Contingency Fund was initially funded with a $300,000 transfer from the General Fund. The $300,000 allows for two years of PERS projected increases and time to evaluate options to address the larger unfunded liability and yearly obligations.
In December 2016, $300,000 was invested in a moderately conservative trust fund with Public Agency Retirement Services (PARS). The FY 17/18 budget transferred an additional $500,000 into the PERS trust fund to offset rising pension costs. During the FY 2022-23 goal setting session the City Council allocated $500,000 of existing fund balance to the PERS Trust reserve.
Fund - 1015
FY23/24
Actual
FY24/25
Actual
FY25/26
Amended
FY25/26
Estimated
FY26/27
Proposed
FY27/28
Planned
Beginning Fund Balance $ 904,275 $ 1,187,772 $ 1,531,142 $ 1,531,142 $ 1,601,142 $ 1,651,142 Revenue
Use of money & property 33,497 93,370 10,000 70,000 50,000 50,000 Other Financing Sources 250,000 $ 250,000 - - - -
Revenue Totals 283,497$ 343,370$ $ 10,000 70,000$ $ 50,000 $ 50,000 Expenditures
Other Financing Uses $ - -$ -$ -$ -$ -$
Expenditure Totals $ - -$ -$ -$ -$ -$
Fund Balance at 06/30 1,187,772 $ 1,531,142$ 1,541,142$ 1,601,142$ 1,651,142$ 1,701,142$
SOURCES AND USES
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FACILITIES RESERVES
The Facilities Reserve Fund was established in FY 2014-15 to serve as a resource to fund capital improvements and major repairs on City facilities. The National Research Council Stewardship of Federal Facilities recommends setting aside two to four percent of building replacement costs to preserve or extend the life of facilities. The estimated replacement value of the City’s facilities is $17.5 million.
The Facilities Reserve is used to fund future facility needs of the City. The Proposed FY 2026-27 Budget does not include nay funding for the Facilities Reserve. 111
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MULTI-YEAR ASSETS & OBLIGATIONS
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MULTI-YEAR ASSETS & OBLIGATIONS
City & Joint Powers Authority (JPA) Multi-Year Obligations: The City of Capitola has six multiyear obligations, two of which are part of a Joint Powers Authority. The obligations are paid from various funding sources.
Pacific Cove Lease Financing: In March 2011, a pipe failure flooded the City-owned Pacific Cove Mobile Home Park. The City of Capitola entered into a $2,390,000 lease/sublease agreement to finance the relocation of mobile home residents and close the park.
Beach and Village Parking Lot II: The City of Capitola initiated a $1,372,500 California Infrastructure and Economic Development Bank (I-Bank) loan to fund the development of a parking lot and related improvements at the site of the former Pacific Cove Mobile Home Park. 114
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CITY/JOINT POWERS AUTHORITY MULTI-YEAR ASSETS & OBLIGATIONS
GENERAL GOVERNMENT
The City of Capitola has seven multi-year obligations, three of which are part of a Joint Powers Authority. The obligations are paid from various funding sources. All obligations are shown in the budgets of the applicable funds and all payments are current.
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Item 8 B.
PACIFIC COVE LEASE FINANCING
DEBT SERVICE
The City of Capitola owns 426 Capitola Avenue, which formerly housed the 41 mobile home Pacific Cove Mobile Home Park. On March 24, 2011, a 72” storm drain that carries Noble Gulch Creek water from Bay Avenue to Soquel Creek catastrophically failed following a heavy rain storm. This resulted in flooding of the Pacific Cove Mobile Home Park, City Hall and village residences and businesses.
The initial estimate to bring the park up to code was $1.33 million. Due to the high cost and potential for future liability, Capitola City Council approved a Relocation Impact Report (RIR) for the closure of Pacific Cove Mobile Home Park in January 2012. The RIR provided a cost estimate for relocating residents and professional relocation consultants to help displaced residents find suitable replacement housing. The City executed a $2.39 million lease/sublease agreement using the existing City Hall site and adjacent upper parking lot as the pledged property. The City verified income status as part of the relocation process and determined that a percentage of Housing Trust Fund monies could be used to repay the debt service at a proportion no greater than the number of low income mobile home occupants that were relocated. The funding sources for debt service payments will be determined annually. Any General Fund monies for the share of allowable costs from other funding sources may be reimbursed in subsequent years as funds become available.
At the time the loan was issued, there was some uncertainty as to whether the property would be developed for public or private use. This resulted in the City entering into a 20–year taxable lease/sublease agreement at an interest rate of 5.14%. In FY 12/13, the City determined that the site would be converted to a public parking lot, now named Beach & Village Parking Lot II (BVPL II). This public use allows the City to refinance the existing debt at a 3.25% tax-exempt interest rate with a 10- year Treasury Bill reset + 1.5% in year 10. As a result of the refinancing, annual loan payments were reduced by approximately $28,000, with an estimated nine-year interest savings of approximately $350,000. In FY 12/13 the City reached a $1.35 million insurance settlement related to the pipe failure. This resulted in a principal reduction of $476,200, with a prepayment penalty of $23,800.
During the FY 2023-24 City Council Goal setting the Council allocated $725,000 to pay off the outstanding balance saving approximately $150,000 of interest costs over the next several years. 116
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Payment
Date Principal
Interest
/Prepmt
penalty Total Fiscal Year
9/1/2012 30,815 $ 53,893$ 84,708$
3/1/2013 35,871 60,632 96,503
6/28/2013 476,200 23,810 500,010 $ 681,221
9/1/2013 42,440 22,843 65,283
3/1/2014 53,207 29,326 82,533 147,816
9/1/2014 46,196 36,337 82,533
3/1/2015 46,947 35,586 82,533 165,066
9/1/2015 47,710 34,823 82,533
3/1/2016 48,485 34,048 82,533 165,066
9/1/2016 49,273 33,260 82,533
3/1/2017 50,074 32,459 82,533 165,066
9/1/2017 50,887 31,645 82,533
3/1/2018 51,714 30,819 82,533 165,066
9/1/2018 52,555 29,978 82,533
3/1/2019 53,409 29,124 82,533 165,066
9/1/2019 54,277 28,256 82,533
3/1/2020 55,159 27,374 82,533 165,066
9/1/2020 56,055 26,478 82,533
3/1/2021 56,966 25,567 82,533 165,066
9/1/2021 57,891 24,641 82,533
3/1/2022 58,832 23,701 82,533 165,066
9/1/2022 59,788 22,745 82,533
3/1/2023 60,760 21,773 82,533 165,066
9/1/2023 61,747 20,786 82,533
3/1/2024 62,751 19,782 82,533 165,066
9/1/2024 63,770 18,763 82,533
3/1/2025 64,807 17,726 82,533 165,066
9/1/2025 65,860 16,673 82,533
3/1/2026 66,930 15,603 82,533 165,066
9/1/2026 68,017 14,515 82,533
3/1/2027 69,123 13,410 82,533 165,066
9/1/2027 70,246 12,287 82,533
3/1/2028 71,387 11,145 82,533 165,066
9/1/2028 72,548 9,985 82,533
3/1/2029 57,304 7,887 65,191 147,724
9/1/2029 - - -
3/1/2030 - - - -
9/1/2030 - - -
3/1/2031 - - - -
9/1/2031 - - -
3/1/2032 - - - -
TOTAL 2,390,000 $ 897,681$ 3,287,681$ $ 3,287,681
Pacific Cove Financing Lease Debt Service
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BEACH & VILLAGE PARKING II – LEASE FINANCING
DEBT SERVICE
In April 2013, the City of Capitola received $1,372,000 in funding from the California Infrastructure and Economic Development Bank (I-Bank) for development of a parking lot on the former Pacific Cove Mobile Home Park site. The funding was used to create the 226 space Beach & Village Parking Lot II. The project included grading, pay station installation, shuttle bus stops, landscaping, pedestrian walkways, and pay stations for the upper parking lot. The I-Bank loan is 2.26% tax exempt reimbursement financing.
This project improved parking capacity for Capitola Village, Capitola Beach, and Capitola Wharf, and is especially helpful during peak seasons. The additional parking spaces are also anticipated to facilitate the development of a hotel. The parking lot contributes about $62,500 annual revenue to the General Fund and the I-Bank annual debt service of $87,116 is paid with funds transferred from the General Fund.
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Payment
Dates Principal Interest Total
Fiscal
Year
8/1/2014 55,040 $ 15,922 70,962
2/1/2015 14,887 14,887 $ 85,849
8/1/2015 56,284 18,840 75,124
2/1/2016 14,251 14,251 89,375
8/1/2016 57,556 18,035 75,591
2/1/2017 13,601 13,601 89,192
8/1/2017 58,857 17,212 76,069
2/1/2018 12,936 12,936 89,004
8/1/2018 60,187 16,370 76,557
2/1/2019 12,256 12,256 88,812
8/1/2019 61,547 15,509 77,056
2/1/2020 11,560 11,560 88,616
8/1/2020 62,938 14,629 77,567
2/1/2021 10,849 10,849 88,416
8/1/2021 64,360 13,729 78,089
2/1/2022 10,122 10,122 88,211
8/1/2022 65,815 12,809 78,624
2/1/2023 9,378 9,378 88,002
8/1/2023 67,302 11,868 79,170
2/1/2024 8,618 8,618 87,788
8/1/2024 68,823 10,905 79,728
2/1/2025 7,840 7,840 87,568
8/1/2025 70,379 9,921 80,300
2/1/2026 7,045 7,045 87,344
8/1/2026 71,969 8,915 80,884
2/1/2027 6,231 6,231 87,116
8/1/2027 73,596 7,886 81,482
2/1/2028 5,400 5,400 86,881
8/1/2028 75,259 6,833 82,092
2/1/2029 4,549 4,549 86,641
8/1/2029 76,960 5,757 82,717
2/1/2030 3,680 3,680 86,396
8/1/2030 78,699 4,657 83,356
2/1/2031 2,790 2,790 86,146
8/1/2031 80,478 3,531 84,009
2/1/2032 1,881 1,881 85,890
8/1/2032 82,297 2,380 84,677
2/1/2033 951 951 85,627
8/1/2033 84,156 1,204 85,360 85,360
Total $ 375,736 1,372,500 $ 1,748,236 $ 1,748,236 $
Beach & Village Parking Lot II Lease Financing
Debt Service
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TABLE OF CONTENTS
Mission Statement ............................................................................................................. 1 City Manager’s Budget Message ..................................................................................... .3 Summary Information ……………………………………………… ............................ …….10 General Fund Revenues ................................................................................................. 23 General Fund Expenditures…………… .......................................................................... 32 Department Overview ................................................................................................... 49 City Council ......................................................................................................... 50 City Attorney ........................................................................................................ 51 City Manager ....................................................................................................... 52 Administrative Services……………………………………………………………….54
Police……………………………………………………………………………………57
Public Works…………………………………………………………………………...63
Community & Economic Development .................. ………………………………...68 Community Services and Recreation ............................... ………………………...72 Capitola Museum ................................................................................................. 74 Internal Service Funds .................................................................................................. 75 Stores Fund ......................................................................................................... 77 Information Technology Fund .............................................................................. 78 Equipment Replacement Fund ........................................................................... 79 Self-Insurance Liability Fund ............................................................................... 80 Workers’ Compensation Fund ............................................................................. 81 Compensated Absences Fund ............................................................................ 82 Special Revenue Funds ................................................................................................ 83 Supplemental Law Enforcement Services ........................................................... 86 Restricted Transient Occupancy Tax (TOT) ........................................................ 87 Road Maintenance & Rehabilitation Act (SB1). ................................................... 88 RTC Streets.………………………………………………………………… .............. 89 Gas Tax……………………………………….………………………… ............. . ….90
Wharf ………. ...................................................................................................... 91 General Plan Update and Maintenance .............................................................. 92 Green Building Education ................................................................................... 93 Public Art ............................................................................................................. 94 Parking Reserve … ............................................................................................ .95 Technology Fee .................................................................................................. 96 Public Education & Government Cable TV Access ............................................. 97 Capitola Village & Wharf BIA .............................................................................. 98 Community Development Block Grants (CDBG) ................................................ 99 CDBG Program Income. .................................................................................... 100 Library………….……………………………………………… ............................... 101 HOME Program Reuse .................................................................................... 102 Housing Trust ................................................................................................... 103 Permanent Local Housing Allocation (PLHA) .................................................... 104 Capitola Housing Successor ............................................................................. 105
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Reserves……. .............................................................................................................. 106 Emergency Reserves ........................................................................................ 108 Contingency Reserves ...................................................................................... 109 PERS Contingency Reserves ............................................................................ 110 Facility Reserves ............................................................................................... 111 Multi-Year Assets & Obligations ................................................................................ 112 City and Joint Powers Authority ......................................................................... 115 Pacific Cove Lease Financing ........................................................................... 116 Beach and Village Lot II Lease Financing ......................................................... 118 244
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CITY OF
CAPITOLA
Capital Improvement Program
Fiscal Years 2026/27 – 2030/31
Adopted: June x, 2026
Resolution Number: 2026-xx
CITY COUNCIL PREPARED BY
Margaux Morgan, Mayor Jessica Kahn, Public Works Director Gerry Jensen, Vice Mayor Jim Malberg, Administrative Services Director Joe Clarke
Melinda Orbach
Susan Westman
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City of Capitola | Capital Improvement Program FY26-31 Page 2 Capital Improvement Program (CIP)
Overview and How to Use This Document
What This Document Is
The Capital Improvement Program (CIP) is the City’s five-year planning document for major capital investments, including transportation infrastructure, parks and recreation facilities, municipal buildings, stormwater systems, and coastal resilience improvements.
The CIP identifies projects the City expects to plan, design, fund, or construct over the next five fiscal years. While the CIP presents a five-year outlook, only the first fiscal year is formally appropriated through the annual budget process. Projects identified in future years may change based on funding availability, project readiness, regulatory requirements, and City Council direction.
What Is Included in the CIP
Projects are generally included in the CIP if they:
• Have a total estimated cost of $50,000 or greater
• Involve the construction, rehabilitation, replacement, or significant improvement of a public asset
• Represent planning, feasibility, or design work necessary to advance a future capital project
Routine maintenance and operational activities funded through annual operating budgets are generally not included in the CIP.
How Capital Projects Are Developed
Most capital projects advance through multiple phases over several years:
Planning / Feasibility
Studies, alternatives analysis, environmental review, and conceptual development Design & Permitting
Engineering, cost refinement, regulatory coordination, and permit approvals 246
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City of Capitola | Capital Improvement Program FY26-31 Page 3 Construction
Implementation of physical improvements and project closeout Not all projects move through these phases at the same pace. Some projects included in the CIP are planning-only efforts, while others are actively under construction or substantially complete. Inclusion in the CIP allows the City to track infrastructure needs over time, coordinate funding and project delivery, position projects for grant opportunities, and support long-term asset management and replacement planning.
How Projects Are Funded
Capital projects are funded through a combination of City, regional, state, federal, and partnership sources. Project sheets identify currently assigned funding sources, as well as future funding needs where additional resources will be required.
Common funding sources used in the CIP include:
General Fund and Capital Reserves
Used selectively for facilities, parks, accessibility improvements, required grant match, and high-priority capital needs
Transportation Funds
Including SB 1, Measure D, Gas Tax, Regional Transportation Commission (RTC) funding, and transportation grant programs
State and Federal Grants
Competitive and formula-based funding programs that often require project readiness, local match, or defined eligibility
Community Development Block Grant (CDBG) Funds
Used for eligible accessibility, community facility, and neighborhood improvement projects
Donations and Partnerships
Primarily supporting park, recreation, and community projects Future Funding Needs
Used to identify projects or future phases where costs are known or anticipated but funding has not yet been secured
Capital funding sources are subject to important constraints. Restricted funds must be used for eligible purposes, grant funding often depends on project readiness, and larger capital projects may require local match or additional leveraging sources. Construction 247
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City of Capitola | Capital Improvement Program FY26-31 Page 4 cost escalation, permitting requirements, and coastal construction complexity may also increase funding needs as projects advance.
To address these constraints, the City prioritizes restricted and external funding wherever possible and uses local capital funding strategically for grant match, urgent asset repair needs, and projects with clear community benefit that lack dedicated funding sources. The City will continue to evaluate grant, partnership, financing, and other revenue opportunities as capital needs evolve.
How Projects Are Prioritized
Projects included in the CIP reflect a combination of factors, including:
• Public safety and risk reduction
• Asset condition and lifecycle needs
• Regulatory or legal requirements
• Consistency with adopted plans and City Council priorities • Funding availability and project readiness
• Long-term maintenance and operational considerations
Projects that address multiple factors or demonstrate higher readiness for implementation typically advance earlier within the five-year program.
Project Funding Status
Projects in the CIP may be identified as:
Funded
Sufficient funding has been identified to proceed
Partially Funded
Some funding has been identified; additional funding sources are needed Unfunded
An identified capital need with no secured funding currently available Emerging Capital Need
A potential future capital project or infrastructure need identified for long-term planning that is not yet fully scoped or funded
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City of Capitola | Capital Improvement Program FY26-31 Page 5 Unfunded, conceptual, and emerging capital need projects are included to support longterm planning, funding strategy development, and future project readiness as opportunities arise.
How to Read the CIP
This document is organized as follows:
Financial Summary Tables
Provide a citywide overview of capital investment by fiscal year and funding source.
Project Detail Sheets
Present individual project descriptions, estimated costs, funding sources, schedules, and project status information.
Projects are also grouped into general infrastructure categories, such as transportation, parks and recreation, municipal facilities, and stormwater/coastal resilience, to help identify the primary infrastructure focus of each project.
Project detail sheets include active projects, planning efforts, concept projects, completed projects, and emerging capital needs identified through ongoing infrastructure and facility planning.
Annual Review
The CIP is reviewed and updated annually to reflect project progress, updated cost estimates, new funding opportunities, and City Council direction.
Staff will continue to monitor funding conditions, asset performance, regulatory requirements, and project readiness and will return to City Council with recommendations 249
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CIP Financial Summary – Funding Sources
Project Funding Source Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Park at Rispin Mansion
General Fund/RDA $ 1,218,844 - - - - - $1,218,844
Measure Q $ 50,000 - - - - - $50,000
State Parks Grant $ 178,000 - - - - - $178,000
Project Total $1,446,844
Treasure Cove Playground & Restroom Improvements
General Fund (Design) $351,000 - - - - - $351,000
Fundraising $965,000 - - - - - $965,000
CDBG (2025) $2,207,500 - - - - - $2,207,500
Project Total $3,523,500
Community Center Renovation
General Fund $1,867,000 - - - - - $1,867,000
CNRA Grant $1,000,000 - - - - - $1,000,000
CDBG 2024 $3,365,000 - - - - - $3,365,000
CDBG 2025 $1,055,000 - - - - - $1,055,000
Project Total $7,287,000
41st Avenue Multimodal Improvements
RTC Measure D $695,000 - - - - - $695,000
RMRA SB1 $587,000 - - - - - $587,000
Gas Tax $60,000 $60,000
Transportation Grant $1,000,000 - - - - - $1,000,000
Project Total $2,342,000
Project Funding Source Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Stockton Bridge – Bridge Alternatives Evaluation
General Fund $350,000 - - - - - $350,000
WRCB Grant $500,000 - - - - - $500,000
Future Funding Needs - - - - - - TBD
Project Total $850,000
Esplanade Park Improvements
Coastal Conservancy Grant $275,000 - - - - - $275,000
Future Funding Needs - - - - - - TBD
Project Total $275,000
Pavement Management Program (FY26–31)
RTC Measure D - $ 398,000 $ 409,000 $ 422,000 $ 435,000 $ 448,000 $2,112,000 RMRA SB1 - $ 277,000 $ 285,000 $ 294,000 $ 302,000 $ 311,000 $1,469,000 Program Total $3,581,000
Project Funding Source Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Cliff Drive Resiliency Project - Phase 1
FHWA Emergency Relief $ 743,000 - $ 9,658,000 - - - $10,401,000 Coastal Commission Grant $ 450,000 - - - - - $450,000
Non-Federal Match (TBD) - - $ 1,108,000 - - - $1,108,000 Project Total $11,959,000
Sidewalk Infill Program
RTC Grant - $100,000 - - - - $100,000
Future Funding Needs (Estimate) - - - - - - $1,300,000
Program Total $1,400,000
Bay Avenue Corridor
General Fund 271,096 - - - - - 271,096
Gas Tax 50,285 - - - - - 50,285
RTC Grant - 500,000 - - - - 500,000
Federal Grant - 250,000 - - - - 250,000
Unfunded Needs (To Be Determined) - - - - - - TBD
Project Total $1,071,381
Monterey Park Play Area
General Fund $10,000 - - - - - $10,000
Future Funding Needs - - - - - - TBD
Project Total TBD
Grand Avenue Bluff Overlook Improvements
General Fund $31,090 - - - - - $31,090
Future Funding Needs - - - - - - TBD
Project Total TBD
Project Funding Source Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Cliff Drive Resiliency Project - Future Phases
Future Funding Needs (Estimate) - - - - - - $33,000,000 Project Total $33,000,000
Noble Gulch Dog Park
Future Funding Needs (Estimate) - - - - - - $75,000
Project Total $75,000
Corporation Yard EV Charging Infrastructure
Future Funding Needs (Estimate) - - - - - - $300,000
Project Total $300,000
Project Funding Source Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Perry Park Bridge Rehabilitation
Future Funding Needs - - - - - - TBD
Project Total TBD
Noble Gulch Culvert and Drainage System
Future Funding Needs - - - - - - TBD
Project Total TBD
Corporation Yard Facility Modernization
Future Funding Needs - - - - - - TBD
Project Total TBD
City Hall / Police Station Facility Improvements
Future Funding Needs - - - - - - TBD
Project Total TBD
Completed or Substantially Completed
Partially Funded Projects
Conceptual / Unfunded Projects
Active Programs and Funded Projects
Emerging Capital Needs
250
Item 8 B.
CIP Financial Summary – Projected Expenditures
Project Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Park at Rispin Mansion
Construction/Improvements $ 1,446,844 - - - - - $1,446,844 Project Total $1,446,844
Treasure Cove Playground & Restroom Improvements
Design $351,000 - - - - - $351,000
Construction/Improvements $2,930,500 - - - - - $2,930,500 Construction Management $242,000 - - - - - $242,000
Project Total $3,523,500
Community Center Renovation
Design $650,000 - - - - - $650,000
Construction/Improvements $6,337,000 - - - - - $6,337,000 Construction Management $300,000 - - - - - $300,000
Project Total $7,287,000
41st Avenue Multimodal Improvements
Design/Permitting $357,377 - - - - - $357,377
Construction/Improvements - $1,980,623 - - - - $1,980,623 Project Total $2,338,000
Project Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Stockton Bridge – Bridge Alternatives Evaluation
Planning/Alternatives Analysis $134,602 $ 715,398 - - - - $850,000 Construction/Improvements - - - - - - TBD
Project Total $850,000
Esplanade Park Improvements
Design Development - $ 275,000 - - - - $275,000
Construction/Improvements - - - - - - TBD
Project Total $275,000
Pavement Management Program (FY26–31)
Construction/Improvements - $ 675,000 $ 694,000 $ 716,000 $ 737,000 $ 759,000 $3,581,000 Program Total $3,581,000
Project Funding Source Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Cliff Drive Resiliency Project - Phase 1
Design/Permitting $ 512,668 $ 680,332 - - - - $1,193,000 Construction/Improvements - - $ 10,766,000 - - - $10,766,000 Project Total $11,959,000
Sidewalk Infill Program
Construction/Improvements - $100,000 - - - - $100,000
Future Improvements - - - - - - TBD
Project Total $100,000
Bay Avenue Corridor
Pilot – Alternatives Analysis/Design 161,741 0 0 0 0 0 161,741 Pilot – Construction/Improvements 83,998 0 0 0 0 0 83,998 Corridor Planning/Development $75,642 0 0 0 0 0 75,642
Future Improvements (TBD) 0 0 0 0 0 0 TBD
Project Total $321,381
Monterey Park Play Area
Planning - - - - - - TBD
Construction/Improvements - - - - - - TBD
Project Total TBD
Grand Avenue Bluff Overlook Improvements
Planning/Alternatives Analysis $12,308 - - - - $12,308
Construction/Improvements - - - - - - TBD
Project Total $12,308
Completed or Substantially Completed
Active Programs and Funded Projects
Partially Funded Projects
251
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Park at Rispin Mansion
Park Development and Public Access Improvements
Project Description
The Park at Rispin Mansion project transformed the grounds surrounding the historic Rispin Mansion into a publicly accessible neighborhood park with pathways, seating areas, and landscaping. The project preserves the historic setting while providing a high-quality passive recreation space. Development occurred over multiple years with community engagement and planning. Funding shown reflects construction-related costs associated with park improvements dating back to the Rispin ADA pathway project in FY17-18.
Project Justification
Prior to construction, the site was overgrown, fenced, and inaccessible to the public. Development of the park fulfilled a long-standing community goal to open the Rispin property, provide new neighborhood green space, enhance habitat, and stabilize the landscape surrounding the historic structure.
Projected Schedule/5-year Plan Information
Completed. The park is open and actively used by the community. Future enhancements or amenities may be evaluated as opportunities and funding become available.
Funding Information
Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Construction/Improvements 1,466,844 0 0 0 0 0 1,446,844 Total 1,466,844 0 0 0 0 0 1,446,844
Funding Sources Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total General Fund/RDA 1,218,844 0 0 0 0 0 1,218,844
Measure Q 50,000 0 0 0 0 0 50,000
State Parks Grant 178,000 0 0 0 0 0 178,000
Total 1,466,844 0 0 0 0 0 1,446,844
Operating Budget Impacts
The addition of this park increases ongoing maintenance needs. Two additional maintenance staƯ positions were added in FY 2025–26 to support this park and other citywide responsibilities. Ongoing costs are incorporated into the Public Works maintenance budget.
Project Category Parks & Recreation
Project Status Complete
Project Initiated FY15-16
Total Funding $1,446,844
City Funding FY26-27 $0
External Funding $228,000
Funding Sources General Fund, Parks Grants
Strategic Plan Alignment Healthy Families,
Community, and Environment
Location Rispin Mansion Property,
Wharf Road
252
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Treasure Cove Playground & Restroom Improvements
Universal Play Area, Restroom Renovation, and Park Accessibility Upgrades Project Category Parks & Recreation
Project Status Substantially Completed
Project Initiated FY22-23
Total Funding $3,523,500
City Funding FY26-27 $0
External Funding $3,172,500
Funding Sources CDBG, Fundraising
Strategic Plan Alignment Healthy Families,
Community, and Environment
Location Jade Street Park
Project Description
This project upgrades Jade Street Park through construction of the Treasure Cove Playground and renovation of existing restrooms. Improvements include a fully inclusive play area with new equipment, poured-in-place surfacing, seating, and site improvements, along with restroom upgrades addressing accessibility, reliability, and code compliance.
Project Justification
The existing playground has exceeded its useful life and does not meet accessibility standards. The new inclusive playground expands equitable play opportunities and reflects strong community support through fundraising and CDBG investment. Restroom improvements address aging infrastructure, reduce maintenance needs, and support increased park use associated with the playground and Community Center.
Projected Schedule/5-year Plan Information
Construction is underway and expected to be completed by the end of FY 2025–26.
Funding Information
Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Design 351,000 0 0 0 0 0 351,000
Construction/Improvements 2,930,500 0 0 0 0 0 2,930,500 Construction Management 242,000 0 0 0 0 0 242,000
Total 3,523,500 0 0 0 0 0 3,523,500
Funding Sources Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total General Fund 351,000 0 0 0 0 0 351,000
Fundraising 965,000 0 0 0 0 0 965,000
CDBG 2025 2,207,500 0 0 0 0 0 2,207,500
Total 3,523,500 0 0 0 0 0 3,523,500
Operating Budget Impacts
The new playground equipment and poured-in-place surfacing are expected to reduce near-term maintenance needs. Restroom upgrades will improve reliability and reduce repair frequency. No significant increase in operating costs is anticipated.
253
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Community Center Renovation
Facility Upgrades and Accessibility Improvements
Project Category Municipal Facilities
Project Status Completed / Substantially Completed
Project Initiated FY22-23
Total Funding $7,287,000
City Funding FY26-27 $0
External Funding $5,420,000
Funding Sources CNRA, CDBG
Strategic Plan Alignment Healthy Families, Community, and Environment; Sustainable Infrastructure
Location Jade Street Park
Project Description
The Community Center Renovation Project upgrades the facility to improve safety, accessibility, and overall functionality. Improvements include restroom renovations, new outdoor patios, interior and exterior repairs, accessibility upgrades, replacement of aging building systems, and installation of EV charging equipment.
Project Justification
Many building components are outdated, do not meet current codes, and require renovation to maintain safe and accessible community use. Under the Long-Term Use Agreement (LTUA) with the school district, the City is responsible for maintaining and improving major building systems. The project leverages CNRA and CDBG funding to complete improvements that would otherwise exceed local resources, while reducing long-term maintenance needs and supporting sustainability goals.
Projected Schedule/5-year Plan Information
Construction is underway and expected to be completed within FY 2025–26.
Funding Information
Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Design 650,000 0 0 0 0 0 650,000
Construction/Improvements 6,337,000 0 0 0 0 0 6,337,000 Construction Management 300,000 0 0 0 0 0 300,000
Total 7,287,000 0 0 0 0 0 7,287,000
Funding Sources Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total General Fund 1,867,000 0 0 0 0 0 1,867,000
CNRA Grant 1,000,000 0 0 0 0 0 1,000,000
CDBG 2024 3,365,000 0 0 0 0 0 3,365,000
CDBG 2025 1,055,000 0 0 0 0 0 1,055,000
Total 7,287,000 0 0 0 0 0 7,287,000
Operating Budget Impacts
The project is expected to reduce long-term maintenance needs and improve operational eƯiciency. No significant increase in operating costs is anticipated. 254
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
41st Avenue Multimodal Improvements
Corridor Safety and Multimodal Upgrades
Project Category Transportation & Mobility
Project Status Construction
Project Initiated FY24-25
Total Funding $2,342,000
City Funding FY26-27 $0
External Funding $1,000,000
Funding Sources RTC, SB1, Transportation
Grant
Strategic Plan Alignment Community Safety;
Sustainable Infrastructure
Location 41st Avenue, Clares Street to
northern City Limits
Project Description
The 41st Avenue Multimodal Improvements Project will reconstruct pavement and upgrade bicycle, pedestrian, and wayfinding features along Capitola’s busiest corridor. Improvements include pavement rehabilitation, resurfacing, enhanced bike lanes, high-visibility crossings, new curb ramps, and improved SR-1 wayfinding.
Project Justification
41st Avenue has significant pavement distress, outdated striping, and inconsistent multimodal facilities identified through the Pavement Management Plan and corridor evaluations. The project addresses longstanding safety and access issues while improving overall roadway condition. Design and construction are funded through RTC and related transportation funding sources, reducing local cost impacts.
Projected Schedule/5-year Plan Information
Design and Caltrans coordination were completed in late 2025. Construction will begin in spring 2026.
Funding Information
Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Design/Permitting 357,377 0 0 0 0 0 357,377
Construction/Improvements 0 1,980,623 0 0 0 0 1,980,623 Total 357,377 1,980,623 0 0 0 0 2,338,000
Funding Sources Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total 1309 RTC Measure D 695,000 0 0 0 0 0 695,000
1308 RMRA SB 1 587,000 0 0 0 0 0 587,000
Gas Tax 60,000 0 0 0 0 0 60,000
Transportation Grant 1,000,000 0 0 0 0 0 1,000,000
Total 2,342,000 0 0 0 0 0 2,342,000
Operating Budget Impacts
Ongoing maintenance will be incorporated into routine street and sign maintenance activities. No significant increase in operating costs is anticipated.
255
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Stockton Bridge
Bridge Alternatives Evaluation and Future Improvement Planning Project Category Transportation & Mobility
Project Status Planning / Evaluation
Project Initiated FY23-24
Total Funding $850,000
City Funding FY26-27 $0
External Funding $500,000
Funding Sources General Fund, WRCB Grant
Strategic Plan Alignment Community Safety;
Sustainable Infrastructure
Location Stockton Bridge
Project Description
This project expands ongoing work to evaluate options for the future of the Stockton Avenue Bridge, including replacement, retrofit, and deck rehabilitation alternatives. Work is expected to include preliminary concepts, cost estimates, environmental and permitting considerations, anticipated timelines, expected service life evaluations, and potential funding strategies.
Project Justification
The Stockton Avenue Bridge is an aging structure with known flood and debris risks and limited remaining service life. On April 9, 2026, Council directed staƯ to return with a proposed scope of work to evaluate a full range of alternatives and support selection of a preferred long-term approach.
Projected Schedule/5-year Plan Information
StaƯ is preparing an additional scope of work under the existing consultant contract and will return to Council for consideration. Alternatives analysis will follow, with a future decision point to select a preferred approach.
Final design, permitting, and construction will proceed based on Council direction and funding availability.
Funding Information
Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Planning/Alternatives Analysis 134,602 715,398 0 0 0 0 850,000 Construction/Improvements - - - - - - TBD
Total 134,602 715,398 0 0 0 0 850,000
Funding Sources Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total General Fund 350,000 0 0 0 0 0 350,000
WRCB Grant 500,000 0 0 0 0 0 500,000
Future Funding Needs - - - - - - TBD
Total 850,000 0 0 0 0 0 850,000
Operating Budget Impacts
No significant impacts during the evaluation phase. Future operating and maintenance costs will depend on the selected alternative. Some options may reduce long-term maintenance needs, while others may require continued maintenance.
256
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Esplanade Park
Shoreline Adaptation and Park Enhancements
Project Category Parks & Recreation; Stormwater &
Coastal Resilience
Project Status Planning / Evaluation
Project Initiated FY25-26
Total Funding $325,000
City Funding FY26-27 $0
External Funding $275,000
Funding Sources Coastal Conservancy Grant
Strategic Plan Alignment Healthy Families, Community, and Environment; Sustainable
Infrastructure
Project Description
The Esplanade Park Improvements Project focuses on planning and design to enhance the park’s appearance, amenities, and accessibility while addressing long-term coastal conditions. The project will develop conceptual improvements and adaptation strategies to create a more functional and resilient waterfront space.
Project Justification
Esplanade Park is a highly visited coastal space, but aging features, storm impacts, and shoreline exposure aƯect comfort, safety, and usability. Upgrades are needed to refresh the park experience and improve resilience to coastal conditions. In FY 2025–26, City Council allocated $50,000 to initiate planning. Early planning and design are funded through a Coastal Conservancy grant, allowing the City to advance improvement concepts and position the project for future construction funding.
Projected Schedule/5-year Plan Information
Consultant work will begin in FY 2025–26, including concept development and community engagement.
Preliminary design, environmental review, and coastal permitting will follow. Construction will advance as additional funding becomes available.
Funding Information
Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Design Development 0 275,000 0 0 0 0 275,000
Construction/Improvements - - - - - - TBD
Total 0 275,000 0 0 0 0 275,000
Funding Sources Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total General Fund 50,000 0 0 0 0 0 50,000
Coastal Conservancy Grant 275,000 0 0 0 0 0 275,000
Future Funding Needs - - - - - - TBD
Total 325,000 0 0 0 0 0 325,000
Operating Budget Impacts
No significant operating impacts are anticipated during planning. Long-term improvements may reduce emergency maintenance needs associated with storm events. 257
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
2026-2027 Pavement Management Program
Annual Street Maintenance and Rehabilitation Program
Total Funding (5-Year Cycle) $3,581,000
City Funding FY26-27 $0
External Funding $3,581,000
Funding Sources RTC, SB1
Project Category Pavement & Streets
Project Status Active
Location Various
Origin of Request Public Works
Initiated FY21-22
Project Description
The Pavement Management Program provides annual funding to resurface and repair City streets. Typical work includes slurry seals, thin overlays, pavement patching, striping refresh, and minor curb and gutter repairs.
Street selections are based on pavement condition data, available funding, and coordination with other capital projects. In some years, larger roadway segments are delivered as standalone capital projects and tracked separately in the CIP (e.g., 41st Avenue improvements in FY 2025–26).
Project Justification
Routine pavement maintenance prevents streets from deteriorating into costly reconstruction and helps preserve the City’s roadway network. The 2022 Pavement Management Plan reported a citywide PCI of 54, indicating many streets are in “fair” condition and require ongoing maintenance. Annual funding allows staƯ to apply cost-eƯective treatments at the appropriate time and coordinate work with utilities and other capital projects.
Projected Schedule/5-year Plan Information
This is an ongoing annual program. Specific streets and treatment types are determined each fiscal year based on updated pavement condition data, available funding, and coordination needs. The next Pavement Management Plan update is anticipated in FY 2027–28.
Funding Information
Expenditures FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Construction/Improvements 675,000 694,000 716,000 737,000 759,000 3,581,000 Total 675,000 694,000 716,000 737,000 759,000 3,581,000 Funding Sources FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total 1309 RTC Measure D 398,000 409,000 422,000 435,000 448,000 2,112,000 1308 RMRA SB 1 277,000 285,000 294,000 302,000 311,000 1,469,000 Total 675,000 694,000 716,000 737,000 759,000 3,581,000 Operating Budget Impacts
Ongoing maintenance is incorporated into routine operations. No significant increase in operating costs is anticipated.
258
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
CliƯ Drive Resiliency Project – Phase 1
Critical BluƯ Stabilization and Resiliency Improvements Project Category Stormwater & Coastal Resilience
Project Status Planning / Design
Project Initiated FY23-24
Total Funding $11,959,000
City Funding FY26-27 $0
External Funding $10,851,000
Funding Sources FHWA ER, Coastal Commission
Grant
Strategic Plan Alignment Community Safety; Sustainable
Infrastructure
Location CliƯ Drive
Project Description
The CliƯ Drive Resiliency Project – Phase 1 focuses on the most critical bluƯ failure area along CliƯ Drive. The project includes geotechnical evaluation, coastal hazard modeling, drainage assessment, environmental review, permitting, and preparation of engineering plans for bluƯ stabilization and roadway protection improvements.
Project Justification
Ongoing bluƯ retreat and storm damage along CliƯ Drive present risks to roadway stability, underground utilities, emergency access, and adjacent coastal resources. Phase 1 addresses the most vulnerable section of the corridor and is intended to stabilize critical infrastructure while advancing long-term coastal resiliency planning. The broader CliƯ Drive corridor includes additional bluƯ stabilization and resiliency needs that are expected to require future phased improvements beyond the scope of this initial project. Initial planning, engineering, and future construction funding for Phase 1 are supported through FHWA Emergency Relief and Coastal Commission grant funding.
Projected Schedule/5-year Plan Information
Technical studies, engineering design, environmental review, and permitting for Phase 1 are underway. Construction is anticipated following completion of permitting and final funding coordination.
Funding Information
Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Design/Permitting 859,000 334,000 0 0 0 0 1,193,000
Construction/Improvements 0 0 10,766,000 0 0 0 10,766,000 Total 859,000 334,000 10,766,000 0 0 0 11,959,000
Funding Sources Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total FHWA ER 743,000 0 9,658,000 0 0 0 10,401,000
Coastal Commission Grant 450,000 0 0 0 0 0 450,000
Non-Federal Match (TBD) 0 0 1,108,000 0 0 0 1,108,000
Total 1,193,000 0 10,766,000 0 0 0 11,959,000
Operating Budget Impacts
No significant operating impacts are expected during planning and design. Future improvements may reduce emergency maintenance needs along the corridor.
259
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Sidewalk Infill Program
Ongoing Sidewalk Infill and Gap Closure Program
Project Category Transportation & Mobility
Project Status Partially Funded
Project Initiated FY25-26
Total Funding $100,000
City Funding FY26-27 $0
External Funding $100,000
Funding Sources RTC Grant
Strategic Plan Alignment Community Safety;
Sustainable Infrastructure
Location Various
Project Description
The Sidewalk Infill Program addresses missing sidewalk segments throughout the City to improve pedestrian safety, accessibility, and neighborhood connectivity. The program focuses on closing short but critical gaps where pedestrians currently walk in the roadway or along narrow shoulders. Funding identified for FY 2026–27 will support construction of a priority segment, with additional locations to be advanced as future funding becomes available.
Project Justification
StaƯ has identified approximately $1.4 million in citywide sidewalk infill needs. These gaps create safety concerns and limit access to schools, parks, and neighborhood destinations. The City was awarded approximately $100,000 in Regional Transportation Commission (RTC) funding, which may support construction of one priority segment in FY 2026–27. Additional funding will be required to address remaining identified gaps over time. Future sidewalk infill projects may also be competitive for Community Development Block Grant (CDBG) funding where projects support accessibility, neighborhood connectivity, or low/moderate-income areas Projected Schedule/5-year Plan Information
This is an ongoing program. A priority segment will be constructed in FY 2026–27 based on available funding.
Additional segments will be implemented as funding becomes available.
Funding Information
Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Construction/Improvements 0 100,000 0 0 0 0 100,000
Total 0 100,000 0 0 0 0 100,000
Funding Sources Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total RTC Grant 0 100,000 0 0 0 0 100,000
Future Funding Needs (Estimate) 0 0 0 0 0 0 1,300,000
Total 0 100,000 0 0 0 0 1,400,000
Operating Budget Impacts
Ongoing maintenance will be incorporated into routine sidewalk maintenance activities. No significant increase in operating costs is anticipated.
260
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Bay Avenue Corridor
TraƯic, Pedestrian, and Bicycle Improvements
Project Category Transportation & Mobility
Project Status Planning / Evaluation
Project Initiated FY22-23
Total Funding $1,071,381
City Funding FY26-27 $0
External Funding $750,000
Funding Sources General Fund, RTC Grant, Federal Grant
Strategic Plan Alignment Community Safety; Sustainable Infrastructure Location Bay Avenue, Monterey Avenue to Highway 1
Project Description
The Bay Avenue Corridor Improvements Project evaluates transportation safety, pedestrian, bicycle, and circulation improvements along Bay Avenue from Monterey Avenue to the Highway 1 ramps. Work has included corridor analysis, safety review, community outreach, operational evaluation, and temporary pilot improvements used to evaluate corridor safety and circulation.
Project Justification
Bay Avenue serves schools, neighborhoods, commercial areas, and regional traƯic and experiences congestion, turning conflicts, pedestrian safety concerns, and bicycle access challenges. The Bay Avenue / Hill Street Pilot Project evaluated near-term safety improvements and provided operational data and community feedback that informed the broader corridor planning eƯort and future evaluation of potential improvements within the corridor.
Projected Schedule/5-year Plan Information
Corridor analysis, conceptual planning, community outreach, and pilot project evaluation have been completed. Future eƯorts may include lower-cost operational, pedestrian, bicycle, or traƯic safety improvements as funding opportunities are identified. The project has secured RTC funding for future project development and $250,000 in federal funding for eligible construction activities.
Funding Information
Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Pilot – Alternatives Analysis/Design 161,741 0 0 0 0 0 161,741 Pilot –
Construction/Improvements 83,998 0 0 0 0 0 83,998
Corridor Planning/Development 75,642 0 0 0 0 0 75,642
Future Improvements (TBD) 0 0 0 0 0 0 TBD
Total 321,381 0 0 0 0 0 321,381
Funding Sources Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total General Fund 271,096 0 0 0 0 0 271,096
Gas Tax 50,285 0 0 0 0 0 50,285
RTC Grant 0 500,000 0 0 0 0 500,000
Federal Grant 0 250,000 0 0 0 0 250,000
Unfunded Needs (TBD) 0 0 0 0 0 0 TBD
Total 321,381 750,000 0 0 0 0 1,071,381
Operating Budget Impacts
No significant operating impacts are anticipated during planning and project development. Future improvements may add minor maintenance needs that can be incorporated into routine Public Works operations. 261
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Monterey Park Play Area
Play Area Evaluation and Neighborhood Outreach
Project Category Parks & Recreation
Project Status Planning / Outreach
Project Initiated FY25-26
Total Funding $10,000
City Funding FY26-27 $0
External Funding $0
Funding Sources General Fund
Strategic Plan Alignment Healthy Families,
Community, and Environment
Project Description
The Monterey Park Play Area Project will explore options to add or improve recreational amenities at Monterey Park. The project is in the early planning stage and will begin with community outreach and concept development to identify desired improvements for this neighborhood park, which currently includes a walking loop and sports field.
Project Justification
In FY 2025–26, City Council allocated $10,000 to initiate planning for potential upgrades at Monterey Park. The park serves a residential neighborhood and currently lacks defined play features. Outreach and concept development are needed to identify community priorities and determine the scale, cost, and feasibility of future improvements. A defined concept will position the City to pursue design and construction funding.
Projected Schedule/5-year Plan Information
Initial community outreach is underway in FY 2025–26. Based on outreach results, concept development may continue into FY 2026–27. Future design and construction will depend on identified priorities and funding availability.
Funding Information
Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Planning 0 0 0 0 0 0 0
Construction/Improvements - - - - - - TBD
Total 0 0 0 0 0 0 0
Funding Sources Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total General Fund 10,000 0 0 0 0 0 10,000
Construction/Improvements - - - - - - TBD
Total 10,000 0 0 0 0 0 10,000
Operating Budget Impacts
Minimal impacts are expected during planning. Future operating needs will depend on the type of improvements selected.
262
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Grand Avenue BluƯ Overlook Improvements
BluƯ-Top Overlook and Safety Improvements
Project Category Parks & Recreation
Project Status Planning/Concept
Development
Project Initiated FY25-26
Total Funding $31,090
City Funding FY26-27 $0
External Funding $0
Funding Sources General Fund
Strategic Plan Alignment Community Safety; Healthy
Families, Community, and
Environment
Location Grand Avenue street ends
Project Description
This project will evaluate and develop concepts for public safety and coastal access improvements at the Grand Avenue street termini along the Depot Hill bluƯ. The project focuses on small-scale overlook improvements rather than a continuous pathway, including evaluation of bluƯ stability, drainage, and basic features such as viewing areas, fencing, seating, and signage.
Project Justification
This area has a long history of bluƯ erosion, storm damage, and drainage issues that have aƯected prior pathway concepts and limit long-term feasibility. On April 9, 2026, City Council directed staƯ to shift focus from a continuous pathway to smaller, safer improvements at bluƯ-top street ends. This approach maintains public access and coastal views while responding to ongoing erosion and site constraints.
Projected Schedule/5-year Plan Information
Concept development may occur in FY 2026–27. Future design, permitting, and construction will depend on feasibility, Coastal permitting, and funding availability.
Funding Information
Expenditures Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total Planning/Alternatives Analysis 12,308 - - - - - 12,308
Construction/Improvements - - - - - - TBD
Total 12,308 0 0 0 0 0 12,308
Funding Sources Prior FYs FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 Total General Fund 31,090 - - - - - 31,090
Construction/Improvements - - - - - - TBD
Total 31,090 0 0 0 0 0 31,090
Operating Budget Impacts
Minimal impacts are expected during planning. Future operating needs will depend on the type of improvements selected.
263
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Noble Gulch Park – Dog Park Improvements
Concept Development and Future Implementation
Project Category Parks & Recreation
Project Status Concept Phase / Unfunded
Project Initiated FY22-23
Total Funding Need (Estimate) $75,000
City Funding FY26-27 $0
External Funding $0
Funding Sources Future Funding Needs
Strategic Plan Alignment Healthy Families,
Community, and Environment
Location Noble Gulch Park
Project Description
The Noble Gulch Dog Park Project would create a small dog park area within Noble Gulch Park, improving accessibility and providing new recreational space within a constrained site. Concept improvements include fencing, an accessible entry, ADA-compliant pathways, waste receptacles, and signage. Final design, drainage solutions, and amenities will be shaped by site constraints and community input.
Project Justification
Noble Gulch Park has known ADA access deficiencies and seasonal drainage issues, and the proposed dog park area currently lacks accessible routes. City Council supported the concept and approved a Coastal Development Permit in 2024 but deferred funding, noting the need for additional design refinement and potential community fundraising.
A dog park would expand recreational opportunities in an underutilized portion of the park; however, additional work is needed to define scope, cost, and feasibility before the project can advance. A prior conceptual estimate for the project was approximately $75,000; however, costs will be refined through future design.
Projected Schedule/5-year Plan Information
No work is currently scheduled. Future steps such as community outreach, concept refinement, and design will proceed only if funding is identified in a future budget cycle or through donations.
Funding Information
No funding is currently identified. Project costs will be determined through future concept development and design. Potential funding sources may include City funds, grants, or community fundraising.
Operating Budget Impacts
No operating impacts are anticipated until the project advances. If constructed, the dog park would add minor annual maintenance needs related to fencing, waste management, and seasonal closures.
264
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Corporation Yard EV Charging Infrastructure
Fleet Electrification Support Improvements
Project Category Municipal Facilities
Project Status Grant Dependent
Project Initiated FY26-27
Total Funding Need (Estimate) $300,000
City Funding FY26-27 $0
External Funding $0
Funding Sources Future Funding Needs
Strategic Plan Alignment Sustainable Infrastructure;
Accountable Government
Location Corporation Yard
Project Description
The Corporation Yard EV Charging Infrastructure Project would install the on-site (“behind-the-meter”) electrical infrastructure needed to support electric vehicle (EV) charging. Improvements include electrical service upgrades, trenching, conduit, wiring, and infrastructure to support Level 2 and Level 3 chargers.
Utility-side upgrades up to the meter are being provided separately through Pacific Gas and Electric Company and are not part of this project.
Project Justification
State regulations adopted by the California Air Resources Board require public agencies to transition to zeroemission vehicles over time, including requirements for new light-duty vehicle purchases to be zero-emission beginning in 2027. The Corporation Yard currently lacks the electrical capacity needed to support future fleet electrification.
Utility upgrades to the meter are being provided at no cost through Pacific Gas and Electric Company, though program availability is limited. The City is responsible for on-site charging infrastructure improvements. Grant funding and rebates are expected to oƯset project costs.
Projected Schedule/5-year Plan Information
No construction is currently scheduled. The project is dependent on securing grant funding and utility coordination. If funding is not secured, the project will be deferred.
Funding Information
The total estimated project cost is approximately $300,000. Potential funding sources may include future grants through the Monterey Bay Air Resources District, along with incentives from Central Coast Community Energy and Pacific Gas and Electric Company. No City funding is currently identified, and the project will not proceed without securing suƯicient external funding.
Operating Budget Impacts
No significant operating impacts are anticipated. The project supports transition to electric vehicles, which may reduce long-term fuel and maintenance costs.
265
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Perry Park Bridge Rehabilitation
Potential Future Rehabilitation Need
Project Category Parks & Recreation
Project Status Emerging Capital Need
Project Initiated FY25-26
Total Funding Need (Estimate) TBD
City Funding FY26-27 $0
External Funding $0
Funding Sources Future Funding Needs
Strategic Plan Alignment Community Safety; Healthy
Families, Community, and
Environment
Location Perry Park / Rispin Property
Crossing
Project Description
The Perry Park Bridge rehabilitation eƯort would address aging structural components, corrosion, and long-term maintenance needs associated with the pedestrian and bicycle bridge connecting Perry Park and the Rispin property. Potential future work may include steel repairs, repainting, deck improvements, drainage modifications, and rehabilitation of structural connections and bearings.
Project Justification
The bridge was constructed in 1996 and consists of parallel pedestrian and bicycle bridge spans crossing Soquel Creek. A 2021 structural evaluation identified moderate to severe corrosion in several bridge components, including end vertical members, floor beams, chord splices, welded joints, and bearing areas. The evaluation also identified localized areas of through-thickness corrosion and recommended ongoing repair and maintenance work to extend the bridge’s service life.
Since that time, the City has completed targeted repair work and additional investigation of concealed structural elements, including repairs to corroded floor beams and end vertical members. StaƯ continues to monitor bridge condition and remaining service life as part of ongoing infrastructure maintenance planning.
Funding Information
Currently unfunded. Future scope, schedule, and project costs will be determined following completion of ongoing evaluation and maintenance work.
266
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Noble Gulch Culvert and Drainage System
Potential Future Drainage and Culvert Rehabilitation Need Project Category Stormwater & Coastal
Resilience
Project Status Emerging Capital Need
Project Initiated FY25-26
Total Funding Need (Estimate) TBD
City Funding FY26-27 $0
External Funding $0
Funding Sources Future Funding Needs
Strategic Plan Alignment Community Safety;
Sustainable Infrastructure
Location Lower Noble Gulch Drainage
System
Project Description
This project would address long-term rehabilitation and replacement needs within the lower Noble Gulch culvert and drainage system. Potential future work may include culvert rehabilitation or replacement, storm drain improvements, drainage capacity upgrades, bank stabilization, and related infrastructure improvements needed to improve long-term system reliability and flood resilience.
Project Justification
The lower Noble Gulch drainage system includes aging stormwater infrastructure with a history of flooding and ongoing maintenance needs. A 2024 condition assessment of the Noble Gulch Culvert identified areas of deterioration, prior repairs, and infrastructure components that may require future rehabilitation or replacement as part of long-term system planning.
The drainage system also functions as part of the broader Zone 5 regional stormwater network evaluated through the 2023 Zone 5 Storm Drain Master Plan Update. Future capital improvements may be necessary to improve long-term condition, drainage performance, maintenance access, and resilience to future storm events and climate impacts. Future evaluation, maintenance coordination, and funding eƯorts may also occur pursuant to the existing cooperative agreement between the City, Zone 5, and the County regarding portions of the Noble Gulch drainage system.
Funding Information
Currently unfunded. Future scope, schedule, and project costs will be determined through additional evaluation, coordination with Zone 5 regional planning eƯorts, and future condition assessment work. 267
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Corporation Yard Facility Modernization
Long-Term Facility and Operational Needs
Project Category Municipal Facilities
Project Status Emerging Capital Need
Project Initiated FY25-26
Total Funding Need (Estimate) TBD
City Funding FY26-27 $0
External Funding $0
Funding Sources Future Funding Needs
Strategic Plan Alignment Sustainable Infrastructure;
Accountable Government
Location Corporation Yard
Project Description
This project would evaluate long-term modernization and operational improvements at the Corporation Yard.
Potential future work may include rehabilitation or phased improvements to aging buildings and site infrastructure; improved circulation and storage areas; utility and drainage upgrades; fleet and equipment accommodations; employee support facilities; and operational eƯiciency improvements.
Project Justification
The Corporation Yard serves as the primary operations, maintenance, fleet, and equipment facility for the Public Works Department. Existing buildings and site infrastructure were developed incrementally over time and may no longer fully support current operational, storage, maintenance, fleet, safety, accessibility, sustainability, and employee facility needs.
Original facility plans indicate the site was developed for a smaller-scale municipal operation and includes aging building systems, utility infrastructure, fuel system components, and operational layouts that predate many current building, accessibility, energy, and operational standards. The site may require substantial long-term investment to support continued Public Works operations, emergency response readiness, and long-term continuity of City maintenance and field operations.
Funding Information
Currently unfunded. Future scope, schedule, and project costs will be determined through additional facility planning, operational evaluation, condition assessment, and identification of future funding opportunities. 268
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
City Hall / Police Station Facility Improvements
Long-Term Facility and Operational Needs
Project Category Municipal Facilities
Project Status Emerging Capital Need
Project Initiated FY25-26
Total Funding Need (Estimate) TBD
City Funding FY26-27 $0
External Funding $0
Funding Sources Future Funding Needs
Strategic Plan Alignment Community Safety;
Accountable Government;
Sustainable Infrastructure
Location City Hall / Police Station
Campus
Project Description
This project would address long-term facility and operational needs associated with City Hall and the Police Station. Potential future improvements may include accessibility upgrades, replacement of aging building systems, space reconfiguration, flood resilience measures, modernization of public service areas, and evaluation of long-term facility options needed to support continued City operations and public services.
Project Justification
The City Hall and Police Station facilities were expanded into their current configuration in 1976 and are reaching a stage where significant investment may be required to maintain long-term functionality and operational reliability. A 2024 Facility Needs Assessment identified deficiencies related to building systems, accessibility, space limitations, operational functionality, and floodplain constraints.
The assessment identified aging roofing, HVAC, drainage, lighting, accessibility, and exterior circulation systems, along with space limitations that no longer meet accepted operational standards for City Hall and Police Department functions. Future capital planning will be needed to evaluate long-term facility needs, operational requirements, and potential improvement strategies to support continued public service operations.
Funding Information
Currently unfunded. Future scope, schedule, and project costs will be determined through additional facility planning, operational evaluation, and future City Council direction.
269
Item 8 B.
CIP FY26-27 • 5-YEAR PLAN PROJECT NARRATIVES
Wharf Lifeguard, Marine Safety, and Public Facilities
Long-Term Wharf Public Safety and Visitor Services Improvements Project Category Municipal Facilities
Project Status Emerging Capital Need
Project Initiated FY25-26
Total Funding Need (Estimate) TBD
City Funding FY26-27 $0
External Funding $0
Funding Sources Future Funding Needs
Strategic Plan Alignment Community Safety; Healthy
Families, Community, and
Environment; Sustainable
Infrastructure
Location Capitola Wharf
Project Description
This project would implement public safety and visitor-serving facility improvements identified in the Wharf Master Plan. Potential future work may include construction of a lifeguard and marine rescue facility, public restroom facilities, public access amenities, storage areas for marine rescue equipment, and related utility, accessibility, and site improvements necessary to support year-round Wharf operations and public use.
Project Justification
The adopted Wharf Master Plan identifies additional public facilities needed to support public safety, visitor services, and long-term operation of the Wharf. Proposed improvements include a dedicated lifeguard station with marine rescue watercraft storage and lookout area, as well as additional public restroom facilities to serve Wharf visitors. These facilities would enhance emergency response capabilities, support increasing visitor use, and improve the overall public experience while maintaining the Wharf as a key recreational, coastal access, and visitor-serving destination.
Funding Information
Currently unfunded. Future scope, schedule, and project costs will be determined through additional facility planning, operational evaluation, and future City Council direction. 270
Item 8 B.
Major Categories FY 23/24 Actual FY 24/25 Actual
FY 25/26
Amended
FY 25/26
Estimated
FY 26/27
Proposed
FY 27/28
Planned
RevenuesTaxes $ 14,495,884 $ 15,087,639 $ 16,883,877 $ 16,883,877 $ 17,477,145 $ 18,039,441 Licenses and permits 767,635 745,316 734,500 734,500 805,300 778,918 Intergovernmental revenues 230,640 142,486 106,700 106,700 213,678 217,818 Charges for services 2,126,976 2,236,200 2,550,679 2,470,679 2,673,128 2,673,128 Fines and forfeitures 425,043 503,122 690,000 690,000 920,000 920,000 Use of money & property 355,181 59,779 139,000 139,000 167,000 167,000 Other revenues 365,348 104,481 97,000 97,000 102,875 104,797 Revenues Totals $18,766,706 $18,879,022 $21,201,756 $21,121,756 $22,359,126 $22,901,102 ExpendituresPersonnel $12,099,946 $12,692,358 $14,457,933 $14,260,987 $14,984,534 $15,417,535 Contract services 3,704,267 3,799,530 3,851,191 3,820,000 3,991,445 3,905,719 Training & Memberships 143,324 114,877 169,480 150,000 115,380 146,230 Supplies 958,158 854,877 801,700 850,000 879,350 856,350 Grants and Subsidies 125,000 125,000 133,425 133,425 133,425 133,425 Internal service fund charges 1,617,841 1,523,579 1,663,200 1,663,200 1,711,218 1,651,644 Other financing uses 3,271,324 2,288,788 407,344 407,344 487,116 486,881 Expenditures Totals $21,919,860 $21,399,008 $21,484,273 $21,284,956 $22,302,469 $22,597,784 Impact on Fund Balance $ (3,153,154) $ (2,519,986) $ (282,517) $ (163,200) $56,657 $303,318 Bud
getary Fund Balance $ 2,721,486 $ 201,500 $ (81,017) $ 38,300 $ 94,957 $ 398,275 General Fun
d
Summary
271
Item 8 B.
Estimated
Balance
7/1/2026 Revenues Transfers In Expenditures Transfers Out Estimated
Balance
6/30/2027
General Fund $ $22,359,126 - 38,300 $ 21,815,353 $ 487,116 $ 94,957 $ Designated Reserves
Contingency Reserve $2,495,346 - $ - $ 2,495,346 $
PERS Contingency Reserve 50,000 1,601,142 - - - 1,651,142 Emergency Reserve - 1,631,506 - - 1,631,506
Donations - - - - - -
Facility Reserve - 282,714 - - - 282,714
Total Designated Reserves $ 50,000 6,010,707 $ - $ - $ - $ 6,060,707 $ Debt Service
Pac Cove Lease Financing - 75,204 - - 75,204
Pac Cove Park - 12 87,568 87,568 - 12
Total Debt Service $ - 75,216 $ 87,568 $ 87,568 $ - $ 75,216 $ Internal Service Funds
Stores $ 27,000 55,219 $ 27,000 $ - $ 55,219 $
Information Techology 401,000 602,932 $ - 401,000 - 602,932 Equipment Replacement 200,000 - 205,914 100,000 - 305,914 Self-Insurance Liability 832,311 832,311 65,376 - 65,376 Workers' Compensation 350,907 350,907 118,767 - 118,767 Compensated Absences - (87,724) 300,000 200,000 - 12,276 Total Internal Service Funds $ 1,811,218 960,484 $ 300,000 $ 1,911,218 $ - $ 1,160,48 $ 4 Special Revenue Funds
SLESF-Suppl Law Enforcmnt Svc $ 146,251 $ 104,000 $ 104,000 $ 146,251 TOT Restricted Revenue 132,333 98,000 98,000 132,333
SB1 RMRA 52,593 276,629 276,629 52,593
RTC Streets 67,096 389,000 389,000 67,096
Gas Tax 261,173 289,747 285,000 265,920
Wharf 863 26,500 60,800 (33,437)
General Plan Update and Maint 152,709 85,000 70,500 167,209 Green Building Education 241,494 30,000 7,500 263,994
Public Art 64,700 25,000 85,000 4,700
Parking Reserve 737 - - - 737
Technology Fee 118,059 17,000 16,000 119,059
PEG-Public Education and Govt. 63,594 11,500 30,500 44,594 Capitola Village/Wharf BIA 5,031 146,300 - 145,100 6,231 CDBG Grants 667,539 - - 667,539
CDBG Program Income 949 - - 949
Library 17,105 165,000 165,000 17,105
HOME Reuse 1,015,956 20,000 1,000,000 35,956
Housing Trust 364,479 75,000 10,000 429,479
PLHA 126,008 - 31,525 94,483
Cap Hsg Succ- Program Income 1,053,609 20,000 41,500 1,032,109 Total Special Revenue Funds $ 1,778,676 4,552,277 $ - $ 2,816,054 $ - $ 3,514,899 $ Total Fund Balance - All Funds 12,988,295 10,906,262
272
Item 8 B.
PROPOSED BUDGET
FISCAL YEAR 2026-27
CITY OF CAPITOLA
Capitola, California
273
Item 8 B.
Budget
Process
Proposed Budget distributed:
April 17th
FAC Meetings:
May 5th and May 26th
City Council Meetings:
May 6th and May 21st
City Council provided direction
for budget adoption tonight
274
Item 8 B.
General Fund
• Overall Budget balanced
• Estimated ending General Fund balance: $94,957
• Below $500,000 traditional target fund balance
• Reserve funds $899,000 below policy targets:
• Contingency Reserve: $520,000
• Emergency Reserve: $379,000
275
Item 8 B.
Other Budget Highlights
• PERS costs continue to rise faster than revenue growth • Increased parking citation revenue
• Return to full staffing
• Reductions made to discretionary training
• City Council: $9,000
• City-wide departments: $46,000
• Measure Y Projects
• Measure Y line item added
• Utilizing $250,000 in FY 2026-27 results in imbalanced budget • Measure Y project funding potentially available in FY 2027-28 • Potential for significant one-time revenue
276
Item 8 B.
One-Time Revenues
• Received $1 million insurance proceeds
• Staff recommends returning reserves to policy target amounts • Still awaiting FEMA/Cal OES 2023 Storm Reimbursements • FEMA: $769,655
• Cal OES: $192,414
• Building Permits
• $300,000 possibly in fall 2026
• Back payment TOT
• $300,000 – monthly payments began in May 2026
• Surplus land sale
• $90,000 – possibly during FY 2026-27
277
Item 8 B.
• Four Projects
• $14.2M
Completed or
Substantially Completed
• Three Projects
• $4.7M
Active / Funded
• Five Projects
• Current estimate $14.3M
Partially Funded /
Active Planning
• Two Projects
Unfunded / Concept
Proposed
Five Year
Capital
Improvement
Program
Project Summary
278
Item 8 B.
Summary
• Current projections show budget structurally balanced utilizing Measure Y funding through FY 2028-29
• FY 2029-30 and beyond: current forecasts show general fund to become imbalanced
• General Fund below target level awaiting FEMA/Cal OES reimbursements. Reserves will be fully funded if insurance payment allocated to reserves
General Fund
• Potential for several additional one-time revenues in FY 2026-27 • Staff will continue to closely monitor revenues, including sales tax, TOT, parking
General Fund Revenues
• Maintaining high service levels
• Continued evaluation of contract service costs
General Fund Expenditures
279
Item 8 B.
Future Council Budget Reports
• September 2026
• Report on final FY 2025-26 sales tax revenue
• Update FY 2025-26 ending General Fund balance
• Update status FY 2026-27 one-time revenues
• December 2026
• FY 2026-27 1st quarter budget review, including key
revenue (sales tax, TOT, parking)
• Update status FY 2026-27 one-time revenues
• February 2027
• FY 2026-27 mid-year budget review
280
Item 8 B.
Recommended Action
• Approve the Resolution adopting Fiscal
Year 2026-27 Operating Budget and
Five-Year Capital Improvement Program
281
Item 8 B.
Capitola City Council
Agenda Report
Meeting: June 11, 2026
From: City Manager Department
Subject: 2026 General Municipal Election
Recommended Action: Adopt a resolution ordering the 2026 General Municipal Election, requesting the Santa Cruz County Department of Elections conduct the election, and requesting consolidation of the General Municipal Election in the City of Capitola on Tuesday, November 3, 2026.
Background: Pursuant to Chapter 1.30 of the Capitola Municipal Code, General Municipal Elections are to be held on the same day as statewide General Elections. The 2026 General Municipal Election will be held in Capitola on November 3, 2026. At the 2026 General Election, voters will elect three at-large members of the City Council, each for a term of four years. An information sheet regarding the offices to be filled and the nomination procedure is included as Attachment 1.
The City of Capitola’s elections have traditionally been consolidated with other Santa Cruz County local elections, and conducted by the Santa Cruz County Elections Department, at the City’s request. Pursuant to Elections Code section 10403, the City Council must adopt a resolution ordering an election, requesting consolidation, and requesting the County conduct the election.
California Elections Code requires the City to publish a Notice of Election (Attachment 2) between June 29 and July 13, 2026.
Candidate Information: The City hosted a Candidate Information Night with assistance from the Santa Cruz County Elections Department on June 10, 2026. In addition, the City has two webpages where the public and candidates can seek information about the election and requirements:
For those thinking about running for City Council: https://www.cityofcapitola.gov/899/Thinkingabout-running-for-a-position-on For information about the November 2026 Election:
https://www.cityofcapitola.gov/982/November-3-2026-Election-Information The second webpage listed will be updated with candidate information during the nomination period.
Fiscal Impact: The Santa Cruz County Elections Department has provided the following cost estimate:
$5 to $7 per voter per contest. The contest refers to the question being posed to the voters. The City Council seats up for election count as one contest. Capitola has approximately 6,900 registered voters.
The estimate for one contest is $34,500. The FY 2026-27 Budget has funds allocated for the election.
Attachments:
1. General Municipal Election Information Sheet
2. Notice of Election
3. Resolution Calling Election
Alignment with 2025-2029 Strategic Plan Priority: Accountable Government Report Prepared By: Julia Gautho, City Clerk
Reviewed By: Marc Tran, City Attorney
Approved By: Jamie Goldstein, City Manager
282
Item 8 C.
Capitola
City Council
Election 2026
Run for
Office!
3 SEATS UP FOR ELECTION
Ca ON NOVEMBER 3 ll For Details
831-475-7300
CITY HALL:
420 CAPITOLA AVENUE
CAPITOLA, CA, 95010
CONTACT:
JULIA GAUTHO, CAPITOLA CITY CLERK
[email protected]
1) MEET WITH CITY CLERK:
Schedule an appointment to learn
more info and collect forms and
nomination papers.
2) GET SIGNATURES:
Collect 20 to 30 signatures of
registered Capitola voters
(verified by the County Clerk).
3) FILE ON TIME:
Turn in all required forms and
paperwork by August 7.
HOW TO RUN:
JULY 13 - AUGUST 7
283
Item 8 C.
The purpose of the City Council is
to establish local laws, establish
programs, allocate funds, and
provide direction through the City
Manager to City staff.
Capitola City Council is composed
of five council members, all of
whom are directly elected by the
voters in the City of Capitola to
serve four-year terms. The Council
appoints a mayor and vice mayor
annually.
Capitola City Council generally
meets twice a month. In addition,
Council members may serve on
other City & Countywide Boards.
City Council members receive a
monthly stipend.
WHAT DOES
CITY COUNCIL DO?
ELIGIBILITY FOR OFFICE
You must be:
Capitola resident
Registered voter
18+ years old
www.cityofcapitola.gov
Capitola Municipal Elections are
conducted by the Santa Cruz
County Clerk / Elections Office
and often consolidated with State
and Federal regular elections.
Capitola City Council candidates
work and file papers with the
Capitola City Clerk to have their
name on the November 3 general
election ballot.
WHO CONDUCTS
THE ELECTION?
You should be:
Passionate
Collaborative
Dedicated to Capitola's future
284
Item 8 C.
CITY OF CAPITOLA
NOTICE OF ELECTION FOR PUBLIC OFFICE
NOTICE IS HEREBY GIVEN that a General Municipal Election will be held in the City of Capitola, California on Tuesday, November 3, 2026, for the following offices:
THREE (3) MEMBERS OF THE CITY COUNCIL
Terms are four (4) years. Candidate nomination papers will be available beginning July 13, 2026. To pull and submit nomination papers, individuals should inquire with the Capitola City Clerk ([email protected]). Nomination papers are issued and filed with the Capitola City Clerk.
The Candidate nomination period is July 13 to August 7*. (*August 12 will be the extended deadline should an eligible incumbent Council Member fail to file for re-election) If no one or only one person is nominated for an elective office, appointment to the elective office may be made as prescribed in California Elections Code §10229.
The Vote Centers will be open between the hours of 7:00 AM and 8:00 PM on Election Day. Additionally, every registered voter will be mailed a Vote-by-Mail ballot starting 29 days before Election Day. This ballot can be returned by mail, in person at a voting location, or at an official ballot drop box. More information on the voting locations can be found at the Santa Cruz County Elections Department on the Votes Count website at www.votescount.us
For further information, contact the City Clerk’s office at 831-475-7300, extension 228, or email [email protected].
CIUDAD DE CAPITOLA
AVISO DE ELECCIÓN PARA PUESTO PÚBLICO
POR LA PRESENTE SE DA AVISO que se llevará a cabo una Elección Municipal General en la Ciudad de Capitola, California el martes, 3 de noviembre de 2026, para los siguientes puestos:
TRES (3) MIEMBROS DEL CONCEJO MUNICIPAL
Los términos son cuatro (4) años. Las personas interesadas en convertirse en candidatos deben presentar documentos de nominación ante el Secretario de la Ciudad ([email protected]). El período de nominación se extiende desde el lunes, 13 de julio de 2026, hasta el viernes, 7 de agosto de 2026.
Si los documentos de nominación para un funcionario titular de la Ciudad no se presentan antes de las 5:00 p.m. el X de agosto de 2026, el período de nominación se extenderá hasta el miércoles, 12 de agosto de 2026, a las 5:30 p.m. para nominar sólo a candidatos no titulares. Esta extensión no es aplicable cuando no hay un titular elegible para ser elegido.
Si no se nomina a nadie o sólo se nomina a una persona para un puesto electivo, la designación al puesto electivo se puede hacer según lo prescrito por EC §10229.
El Día de la Elección, las urnas de votación estarán abiertas entre las 7:00 a.m. y 8:00 p.m.
Para obtener más información, comuníquese con Julia Gautho, Secretario de la Ciudad at 831-475-7300, ext. 228, [email protected].
285
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Special Districts and Cities MUST file by .................................................................July 1, 2026 Attachment “D”
Notice to County Clerk of Elective Offices to be Filled And Transmittal of Map and Boundaries
____________________________________________________________________________________________ Name of District/City as it will appear on the ballot
To the County Clerk of Santa Cruz County:
(1) Notice is hereby given that the elective offices of the district/city to be elected Check one: at large or
by division
at the General Election scheduled for November 3, 2026, are as follows:
Office Incumbent’s name Term District/Division
(if app)
Special Districts: No election will be held if there is an insufficient number of nominees.
Cities: If there is an insufficient number of nominees, city council will decide to fill the office by appointment by E-75 (August 20) or proceed with the election. If any city measure is on the ballot, the election is held regardless.
(2) The qualifications of a nominee of an elective officer of the district/city are as follows (i.e. a registered voter in the district/city, homeowner in district):
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RESOLUTION NO. XXXX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPITOLA ORDERING AN
ELECTION, REQUESTING THE SANTA CRUZ COUNTY DEPARTMENT OF ELECTIONS TO
CONDUCT THE ELECTION, AND REQUESTING CONSOLIDATION OF THE GENERAL MUNICIPAL ELECTION IN THE CITY OF CAPITOLA ON TUESDAY, NOVEMBER 3, 2026 WHEREAS, pursuant to Elections Code Section 10002, the governing body of any City may, by Resolution, request the Board of Supervisors of the County to permit the County Elections Official to render specified services to the City relating to the conduct of an election; and
WHEREAS, the Resolution of the governing body of the City shall specify the services requested; and
WHEREAS, pursuant to Elections Code Section 10002, the City shall reimburse the County in full for the services performed upon presentation of a bill to the City; and WHEREAS, pursuant to Elections Code Section 10400, whenever two or more elections, including bond elections, of any legislative or congressional District, Public District, City, County, or other political subdivision are called to be held on the same day, in the same territory, or in territory that is in part the same, they may be consolidated upon the order of the governing body or bodies or officer or officers calling the elections; and WHEREAS, pursuant to Elections Code Section 10400, such election for cities may be either completely or partially consolidated; and
WHEREAS, pursuant to Elections Code Section 10403, whenever an election called by a district, city or other political subdivision for the submission of any question, proposition, or office to be filled is to be consolidated with a statewide election, and the question, proposition, or office to be filled is to appear upon the same ballot as that provided for that statewide election, the district, city or other political subdivision shall, at least 88 days prior to the date of the election, file with the board of supervisors, and a copy with the elections official, a resolution of its governing board requesting the consolidation, and setting forth the exact form of any question, proposition, or office to be voted upon at the election, as it is to appear on the ballot, acknowledging that the consolidation election will be held and conducted in the manner prescribed in Section 10418. Upon such request, the Board of Supervisors may order the consolidation; and WHEREAS, pursuant to Elections Code Section 10418, if consolidated, the consolidated election shall be held and conducted, election boards appointed, voting precincts designated, candidates nominated, ballots printed, polls opened and closed, voter challenges determined, ballots counted and returned, returns canvassed, results declared, certificates of election issued, recounts conducted, election contests presented, and all other proceedings incidental to and connected with the election shall be regulated and done in accordance with the provisions of law regulating the statewide or special election, or the election held pursuant to Section 1302 or 1303, as applicable.
WHEREAS, the Resolution requesting the consolidation shall be adopted and filed at the same time as the adoption of the Ordinance, Resolution, or order calling the election; and WHEREAS, various District, County, State and other political subdivision elections may be or have been called to be held on November 3, 2026; and WHEREAS, the City Clerk is directed to forward without delay to the Board of Supervisors and to the County Election Department, each a certified copy of this Resolution; and
WHEREAS, the City Clerk shall certify the passage and adoption of this Resolution.
NOW, THEREFORE, BE IT RESOLVED AND ORDERED that the City Council of the City of Capitola hereby orders an election be called and consolidated with any and all elections also called to be held on November 3, 2026, insofar as said elections are to be held in the same territory or in territory that is in part the same as the territory of the City of Capitola and requests the Board of 288
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Supervisors of the County of Santa Cruz to order such consolidation under Elections Code Sections 10401, 10403 and 10418.
NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED that the City Council of the City of Capitola acknowledges that the consolidated election will be held and conducted in the manner prescribed in Elections Code section 10418.
NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED that the City Council of the City of Capitola hereby requests the Board of Supervisors to permit the Santa Cruz County Elections Department to provide any and all services necessary for conducting the election and agrees to pay for said services; and
NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED that the City Clerk shall (i) publish a notice of elections, including all information required by Elections Code Section 12101; (ii) take necessary actions to ensure the placement of all three of the below mentioned vacant City Council seats on the November 3, 2026 ballot; and (iii) coordinate with the County of Santa Cruz and take all necessary actions to oversee and certify the November 3, 2026 election process as required by the Elections Code; and NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED the notice of the time and place of holding the election is given and the City Clerk is authorized, instructed, and directed to give further or additional notice of the election, in time, form and manner as required by law; and
NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED that the City Clerk is hereby directed to file a certified copy of this resolution with the Board of Supervisors and the Registrar of Voters of the County of Santa Cruz. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used; and NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED in all particulars not recited in this resolution, the election shall be held and conducted as provided by State law for holding municipal elections; and
NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED that the Santa Cruz County Elections Department conduct the election for the following offices to be voted on at the November 5, 2024, election:
Seats Open Office Term
Three (3) Member of the City Council Four (4) Years
I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the City Council of the City of Capitola on the 11th day of June, 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
____________________
Margaux Morgan, Mayor
ATTEST:
_______________________
Julia Gautho, City Clerk
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