Santa Cruz City Council
June 10, 2025

34.16 • Under proposed Resolution, the City expressly declares that it has no legal entitlement or right to collect the first fourteen thousand dollars ($14,000) in specified Planning and Building Plan Check and Permit Fees from each of the first twenty (20) qualifying businesses that are seeking tenant improvements
• Applies to building plan check and building permit issuance (inspection) fees for both the Planning Division and the Building and Safety Division, as well as the General Plan Maintenance Fee
• Qualifying Business = tenant improvements to occupy vacant ground-floor commercial or mixed-use storefronts citywide (not industrial)

EXPLORE NOT IMPOSING PLAN CHECK AND PERMIT FEES

34.17 Vibrancy Ordinance Requirements For Registered Properties Registry Requirements:
• All storefronts currently vacant for
two years or more must register when
ordinance takes effect
• All storefronts must register when they
reach two years vacancy
Annual Registry Fee: $1,621.90
Fee to be set by resolution and includes Planning &
Community Development Department and Economic
Development & Housing Department staff time to
operate the program, including:
• processing applications
• conducting inspections
• scheduling and attending annual meetings
• monitoring vacant storefronts for registry
requirements

34.18 Review Process for Proposed Changes
Use Permit Extension
July 2025:

Review by Planning
Commission
August 2025:

City Council 1st Reading
and Final Adoption
Fall/Winter 2025:

Coastal Commission
Approval of Amendment
to Local Coastal Program
Vibrancy Ordinance
June 2025:

ED and Code Enforcement
begin notifying existing
vacancies of Ordinance
taking effect, requirements
to register, and
enforcement of
maintenance standards.

June 2026:

Report on Vibrancy
Ordinance Pilot Program,
consider citywide
implementation.

Permit Streamlining
Summer 2025:

Staff begins review of
proposed changes
Approval Process:

Planning Commission
City Council
Coastal Commission
Fee Removal
Permit fees removed
immediately for first 20
qualified businesses that
apply

34.19 RECOMMENDATIONS:
1) Adopt a resolution to a) remove specified Planning and Building fees for the first twenty (20) qualifying new commercial businesses citywide, b) establish fees and charges associated with the Council’s May 13, 2025 Municipal Code Chapter 5.84 “Vibrancy Ordinance,” and c) direct staff to update the Master Fee Schedule and the Planning and Community Development Fee Schedule and take related implementing actions;
2) Direct staff to proceed with amendments to the Municipal Code Chapter 24.04.160 to extend the life of active commercial permits from calendar year 2019 through January 1, 2030; 3) Direct staff to proceed with amendments to the Downtown Plan and the Zoning Code to lower the permitting thresholds and remove use permit requirements for certain desired ground floor uses to streamline the permit process and reduce permit costs for new businesses citywide; 4) Adopt a resolution amending the FY 25 budget to appropriate funds in the amount of $50,000 from the Economic Development Trust Fund for implementation of Downtown activation events over the next 12 months; and
5) Approve the CEQA determination in this agenda report, including application of the following exemptions if the Council action is deemed a CEQA “project”: CEQA Guidelines Section 15301 (existing facility), 15306 (data collection), and Section 15061(b)(3) (common sense exemption).

34.20 Thank you

34.21 City Council

AGENDA REPORT
DATE: 05/22/2025
AGENDA OF: 06/10/2025
DEPARTMENT: Finance
SUBJECT: Fiscal Year 2026 Proposed Budget Adoption (FN) LOCATION: Citywide
RECOMMENDATION: Motion to:
1) Adopt a resolution adopting the Fiscal Year (FY) 2026 Budget, including the Capital Investment Program (CIP), effective July 1, 2025; authorize the City Manager to allocate within the applicable funds the FY 2026 Schedule of Budget Changes to the appropriate accounting classification; approve related and applicable transfers in/out between funds; and authorize the Finance Director to create additional appropriations to provide for commitments carried over from the prior fiscal year, including contract and purchase order encumbrances and unexpended project balances, so long as there is a sufficient fund balance to finance these commitments; 2) Approve the CIP project exclusions from the Public Art transfer calculation for FY 2026; 3) Accept the Water Commission’s recommendations regarding the Water Department’s FY 2026 Operating and Capital Investment Program (CIP); and 4) Approve the CEQA determination in this agenda report including the application of the following exemptions, in the event that this action is considered a CEQA “project”: CEQA Guidelines Section 15387(b)(2) and 15387(b)(5) [“general policy and procedure making” and “organizational and administrative activities”; and CEQA Guidelines Section 15061(b)(3) [common sense exemption].

BACKGROUND: The City Charter requires the City Manager to annually prepare the proposed budget for the start of the new fiscal year and transmit it to the City Council at or before its first Council Meeting of June. The FY 2026 Proposed Operating Budget and Capital Investment Program (hereafter referred to as the Proposed Budget) were posted to the City’s website on May 18, 2025. Both documents can be accessed online at www.cityofsantacruz.com, or at the City Clerk’s Office at 809 Center Street, Room 9, and at the Downtown Library. A Public Hearing was held on May 27, 2025 in Council Chambers to review the Proposed Budget.

A study session was held the following day, on May 28, 2025, wherein the operating and CIP budgets for the City’s Enterprise Funds were presented to City Council. A detailed overview of the City’s CIP budget was also given at that time.

35.1.1 The Arts Commission received the City Manager’s recommendation for CIP projects to exclude from the Public Art transfer calculation for FY 2026. One attachment to this agenda report is the City Manager’s recommendations as they were presented to the Art Commission on May 27, 2025.

The Parks and Recreation Commission annually reviews the budget for the Parks and Recreation Department. The Commission met on April 14, 2025 at a publicly noticed meeting and reviewed the Parks and Recreation Department’s budget. Attached is a letter from the Chairperson of the Commission regarding the Proposed Budget.

The Transportation and Public Works Commission (TPWC) annually reviews the operating and CIP budget for the Public Works Department. The Commission met on April 21, 2025 at a publicly noticed meeting and performed a review of the Public Works Department’s budget. The Chairperson of the TPWC has drafted a letter to the City Council regarding the Proposed Budget, which is attached to this item.

The Water Commission annually reviews the budget for the City of Santa Cruz Water Department and makes recommendations to the City Council. The Commission met on June 2, 2025 at a publicly noticed meeting and performed a detailed review of the Water Department’s budget. Attached are the Commission’s recommendations and details of the Proposed Budget.

The Final Adopted Budget and Capital Investment Program (CIP) (hereafter referred to as the Adopted Budget) will be published online on the City’s Budget webpage after all the approved changes have been made.

DISCUSSION: Following a collaborative Citywide process involving all City departments, a Proposed Budget was drafted in alignment with the City’s Long-Range Financial Plan to resource the core services of the City’s departments, to address capital needs of the City, and to advance the 2023-2028 Citywide Strategic Plan (hereafter referred to as the Strategic Plan). The Proposed Budget had a Citywide expenditure budget of $533,213,010 and a General Fund expenditure budget of $158,543,962. The total CIP budget Citywide was $107,493,866, with an additional $5,756,540 in vehicle and other capital equipment budgets across the City’s funds.

As discussed in the budget hearings on May 27 and 28, staff have incorporated the following City Council feedback and direction as part of budget adoption:
 Added an FY 2026 goal - “Aid City Council decision-making by providing a comprehensive list of fees across the City that includes information on the degree to which they fully recover costs”.
 Bring forward in the next six months the following:
o Citywide median beatification options with associated cost estimates, for council consideration and direction in the fall timeframe
o Update on the progress of the Ocean Street beautification project and associated timelines with various components of the project.

Related to the additional median improvement item above, it is important to note that the FY 2026 budget includes $150,000 from the General Fund to support the Parks & Recreation Department, in partnership with Public Works, to implement the Citywide Median Operations and Maintenance Enhancement Plan. This plan enhances the focus of operations and maintenance efforts on improving the overall condition of street medians across the City.

35.1.2 If approved, the Adopted Budget would include the Proposed Budget amounts above with the following changes by fund:

Fund Budget Type Proposed
Budget Amount
Adopted
Budget Amount
Difference
Between
Proposed and
Adopted
101 General Fund Revenues 156,868,359 156,881,359 13,000 101 General Fund Expenditures 158,543,962 158,929,842 385,880 122 Co-Op Retail
Management Revenues 410,586 454,896 44,310
122 Co-Op Retail
Management Expenditures 410,000 454,310 44,310
123 Kiosk
Maintenance Expenditures 10,000 26,500 16,500
133 Carbon
Reduction Revenues 33,110 67,401 34,291
221 Gas Tax Expenditures 161 - (161)
235 Clean River,
Beaches, and
Ocean Fund
Expenditures 344 - (344)
249 Parks &
Recreation Tax
Combined Fund
Expenditures - 80,000 80,000
253 HOME
Investment
Partnership
Revenues 2,160,117 592,358 (1,567,759)
253 HOME
Investment
Partnership
Expenditures 2,055,117 487,358 (1,567,759)
261 Community
Development
Block Grant
Revenues 542,314 552,892 10,578
261 Community
Development
Block Grant
Expenditures 542,314 552,892 10,578
311 General
Capital
Improvement
Projects
Revenues 56,602,666 56,984,080 291,414
311 General
Capital
Improvement
Projects
Expenditures 56,733,529 57,024,943 291,414
711 Water Revenues 70,016,640 71,377,400 1,360,760
711 Water Expenditures 75,119,803 75,124,092 4,290
721 Wastewater Expenditures 39,221,841 39,193,647 (28,194) 731 Refuse Expenditures 34,640,081 39,193,647 13,625

35.1.3 741 Parking Expenditures 31,007,287 31,007,950 664 811 Equipment
Operations Expenditures 5,759,660 5,761,397 1,737
951 Library Joint
Powers Authority Expenditures 22,042,387 23,548,582 1,506,195 The reasons for the changes from the Proposed Budget to the Adopted Budget are included as an attachment to this agenda report.

The Adopted Budget has a Citywide expenditure budget of $534,135,168 and a General Fund expenditure budget of $156,881,359. The total CIP budget Citywide was $108,374,275, with an additional $6,706,252 in vehicle and other capital equipment budgets across the City’s funds.

The General Fund Outlook for the City in the Adopted Budget details the financial backdrop informing the City’s direction in FY 2026. The revenue assumptions built into the Adopted Budget include:
- 4% increase in property tax revenues
- 1.6% increase in sales tax above a 4.2% decline in FY 2025 - 3% increase in franchise taxes and 2% increase in utility taxes - 7% increase in Lodging Occupancy Taxes (TOT) due to the hotel, La Bahia, coming online in Fall 2025
- 13% increase in charges for services
- $1M decrease in Cannabis business tax
- 5% increase in fines and forfeits and on parking meter collections - 2% increase in rent revenues
- $1M in additional funds from the Measure Z, a $0.02 cent tax for every one fluid ounce of sugar sweetened beverages on distributors
The expenditure assumptions include:
- A 56% decrease in debt service costs due to the conclusion of payments on City-owned debt - A set aside of $250,000 for Police Department vehicles and $200,000 for Fire Department large apparatus/vehicle to stabilize the costs of those departments’ large, one-time investments - A $1,000,000 transfer to the CIP- Streets Fund, $1,000,000 to the Economic Development Trust Fund, and about $3,000,000 to the General Capital Investment Program Fund - A 2% increase in departments’ budgets for temporary personnel costs - 2.5% in discretionary budgets for departments’ services, supplies, and materials Budgetary decisions have service implications, so the City Manager’s Message in the Adopted Budget details the service level changes that are anticipated for FY 2026. The following are some of the service level increases for FY 2026:
- More affordable housing creation
- Commencement of Sugar-Sweetened Beverage tax collection - Negotiation of Memoranda of Understanding for the City’s bargaining groups - Improved data management with implementation of new Citywide Enterprise Resource Program (ERP)
- The Harvey West pool will be operational
- 24-hour online portal access to submit Planning Department applications, schedule inspections, and make secure online payments through the implementation of Land Management Software - Enhanced overnight enforcement of safety parking violations

35.1.4 - Enhanced enforcement of Oversized Vehicle ordinance - Enhanced enforcement of overnight residential parking districts - Enhanced Marine Safety Division response and services - Utility Customer Assistance Program will help income-qualifying customers by applying a $25 monthly bill credit
The following limitations will be placed on services in FY 2026:
- Increased development downtown requires wastewater and stormwater collection system evaluation and upgrade
- Limited ability to fulfill customer and developer requests by the Water Department due to lengthy and difficult recruitments
Any funding approved by the Council will not be implemented until the required meet and confer process is completed in accordance with City obligations under the MMBA and before any contract returns to City Council in open session. In addition, any expenditures from Councilapproved funding in this budget will be made in accordance with federal, state, and local law and all purchasing and administrative policies and procedures.

The Proposed Fiscal Year 2026 Budget can be found here:
https://www.cityofsantacruz.com/government/city-departments/finance/city-budget/fiscal-year2026-budget CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

Adopting the General Fund operating budget, the Capital Investment Program budget, and the budgets of the enterprise funds for fiscal year 2026 is not a “project” under CEQA because it does not meet all of the requirements set out in Pub. Resources Code 21065. In the alternative, if the Council action is considered a CEQA “project”, it is exempt under:
 CEQA Guidelines Section 15387(b)(2) and 15387(b)(5) [“general policy and procedure making” and “organizational and administrative activities” that do not result in changes to the environment.]
 CEQA Guidelines Section 15061(b)(3) [common sense exemption.] Additionally, the CIP projects are consistent with the City's General Plan and are covered broadly under the General Plan EIR. This was confirmed by the Planning Commission, which held a Public Hearing during its regularly scheduled meeting on May 1, 2025 and passed a motion to find that the 2026-2030 proposed CIP was consistent with the General Plan 2030.

Attached to this agenda report is the General Plan Policies in Support of New CIP Items table file, which was a part of the agenda packet provided to the Planning Commission to assist in making this determination.

HEALTH IN ALL POLICIES (HiAP): The FY 2026 Annual Budget furthers the City in its steps towards meeting its Health in All Policies (HiAP) goals. The ways in which the City’s departments work and endeavor to meet HiAP goals are displayed in the budget document, with accomplishments, goals, performance measures, and workload indicators that are connected to HiAP pillars marked with a respective icon for equity, public health, and sustainability. City staff incorporated HiAP goals into the CIP prioritization process. The CIP projects that had a moderate or substantial impact on furthering HiAP goals were given additional points in the scoring process, which made them more of a contender to receive funding from the General Fund than if the project had no or only a slight impact on these goals.

35.1.5 FISCAL IMPACT:

1. The recommendation in this report impacts the General Fund: Yes

2. This recommendation requires a budget adjustment: No

3. The recommendation creates an on-going expenditure commitment: No FISCAL IMPACT DESCRIPTION: The FY 2026 Adopted Budget includes $534,135,168 of total appropriations. Included in the operating budget is the City’s Primary General Fund of $158,929,842, which supports clean, safe, and resilient neighborhoods, emergency response, housing and homelessness services, and access to community resources and recreational programs. The total Capital Investment Program is $115,080,572, which supports the City’s natural and built infrastructure to be more resilient and supports the City’s livability and economic recovery.

Prepared By:

Emily Burton
Finance Manager
Submitted By:

Elizabeth Cabell
Director of Finance
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. FY 2026 BUDGET ADOPTION RESOLUTION.DOCX

2. NARRATIVE OF BUDGET CORRECTIONS FROM PROPOSED TO ADOPTED.DOCX

3. EXCLUDED FY 2026 CAPITAL PROJECTS.PDF

4. FY 2026 WATER COMMISSION RECOMMENDATION LETTER TO COUNCIL.PDF

5. FY 2026-2030 CIP SUMMARY - ATTACHMENT 2 IN WATER COMMISSION LETTER.PDF

6. FY 2026-2030 FINANCIAL PRO FORMA - ATTACHMENT 3 IN WATER COMMISSION LETTER.PDF

7. FY 2025 Q2 - QUARTERLY FINANCIAL REPORT - ATTACHMENT 4 IN WATER COMMISSION LETTER.PDF

8. LETTER-PR COMMISSION TO CITY COUNCIL - FY2026 BUDGET.PDF

9. TPWC FY26 BUDGET RECOMMENDATION LETTER TO CITY COUNCIL.PDF

10. GENERAL_PLAN_POLICIES_IN_SUPPORT_OF_NEW_CIP_ITEMS_TABLE.PDF

35.1.6 RESOLUTION NO. NS-XX,XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ ADOPTING A BUDGET FOR FISCAL YEAR 2026
WHEREAS, the City of Santa Cruz has a responsibility to its citizens to provide for their well-being through essential services, including public safety, infrastructure, and community resources;
WHEREAS, the proposed budget for Fiscal Year 2026 has been developed through a transparent and participatory process, including community forums and public hearings; WHEREAS, the adoption of this budget is essential for ensuring the continued operation of City services and the implementation of vital projects; WHEREAS, the City of Santa Cruz is committed to fiscal sustainability and transparency, including balancing revenues and expenditures;
WHEREAS, the City Council seeks to provide a budget that supports the long term financial health and stability of the City, and envisions a vibrant, healthy, and resilient community for all;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Cruz as follows:
that the budget of the City of Santa Cruz for Fiscal Year (FY) 2026, including the Capital Investment Program (CIP), as proposed in that certain document entitled “City of Santa Cruz Proposed Annual Budget Fiscal Year 2025,” on file with the City Clerk, is hereby adopted for FY 2026, effective July 1, 2026, with the addenda thereto as determined by the City Council and detailed in the attached Exhibits:

Exhibit A: Schedule of Budget Corrections
BE IT FURTHER RESOLVED that the Finance Director is authorized to create additional appropriations in order to provide for necessary commitments carried over from the prior fiscal year, including contract and purchase order encumbrances and unexpended project balances, so long as there is a sufficient fund balance to finance these commitments.

35.1.7 RESOLUTION NO. NS-XX,XXX
PASSED AND ADOPTED this 10th day of June, 2026 by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: ______________________________
Fred Keeley, Mayor
ATTEST: _________________________________
Bonnie Bush, City Clerk Administrator

35.1.8 Changes to the Proposed Budget – Narrative Fixes Citywide

1. Update personnel information to reflect changes to Library Department positions from proposed budget to adopted.

Page number in the
Proposed Budget Proposed Budget Text Adopted Budget Text 111 Add Librarian I/II 1.0 FTE
Position
Add Librarian I/II 2.0 FTE Position
Rationale added
111 N/A Delete Library Information
Specialist 1.0 FTE Position
Rationale added
117 Librarian I/II – 24.00 FTE Librarian I/II – 25.00 FTE 117 Library Information
Specialist – 4.00 FTE
Library Information Specialist –

3.00 FTE

2. Add an explanation of the tools available for tracking CIP projects throughout the year, made available by the Public Works department.

Page number in the
Proposed Budget
Proposed
Budget Text Adopted Budget Text
303 N/A Project Tracking Throughout the Year section
added, with links to Major Project Maps and
Public Works Projects websites provided

3. Update list of projects that support the Climate Action Plan and the 2025-2030 Local Hazard Mitigation Plan – Climate Adaptation Plan.

35.1.9 Page number in the
Proposed Budget
Proposed
Budget Text Adopted Budget Text
304 N/A c512402 IIG Paseos and Parks
308 N/A c512501 Wharf Resilience Improvements
Finance

4. Add an FY 2025 Accomplishment and an FY 2026 goal to Finance’s department summary.

Page number in the
Proposed Budget
Proposed
Budget Text Adopted Budget Text
167 N/A Add FY 2025 accomplishment: Created an
online, interactive version of the FY 2026
Annual Budget and educated staff, City
Council, and the public on its existence and
possible ways to utilize the tool
168 N/A Add FY 2026 goal: Aid City Council decisionmaking by providing a comprehensive list of fees across the City that includes information
on the degree to which they fully recover
costs
Public Works

5. Add a statement to the Public Works Capital Investment Program (CIP) project, c601403, SLR Mouth & Lagoon Management Plan Development, regarding the decision that a General Fund transfer will be made to bring the project more into balance. The project shows on page 393 (proposed) that the project cost has been $633,922 greater than the funded amount for the project. The General Fund will add

35.1.10 $166,353 to this project in FY 2026 to bring this project within $500,000 of its approved funding amount. This was already budgeted in the proposed budget for FY 2026.

Page number in the
Proposed Budget
Proposed
Budget Text Adopted Budget Text
393 Funding
Estimate- From
General Fund:
$0
Funding Estimate- From General Fund:
$166,353
Add note- In FY 2026, this project will receive
$166,353 from a General Fund transfer. The
additional funds will be used to cover the
project’s past spending and is not meant to
increase the project’s expenditure budget
further.

6. The Public Works CIP project c402404, Traffic Calming Pilot Program, showed a revenue and expenditure budget for FY 2026 of $250,000, but this amount should be $130,000. The correct amount was budgeted in the City’s financial system, but the project budget information shown was incorrect.

Page number in the
Proposed Budget Proposed Budget Text Adopted Budget Text 395 Project Cost Estimate-
$250,000
Funding Estimate from the
General Fund- $250,000
Project Cost Estimate-
$130,000
Funding Estimate from the
General Fund- $130,000

35.1.11 Changes to the Proposed Budget – Changes to the Budget
City Manager’s Office

1. Council Policy 5.19 Stipend for Advisory Body Members, adopted by Resolution No. NS-30,375 on August 27, 2024 established a stipend program with an annual cap of $25,000/$75 per meeting for all advisory body members across the City who optin. Recognizing this is a city-wide program, a first-come first-served program, with an annual cap of $25,000 means the management of this program works best in a project (p102504-100-2020-0) rather than the current set-up, which is combined with other line items in the current GL string (101-10-03-1217-54990) and could bring accounting complications when we near the top of the cap each year.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
101-10-03-1217-54990 Misc Supplies
and services
138 25,000 - (25,000)
101-10-03-1217-54990
p102504-100-2020-0
Advisory Body
Compensation
- 25,000 25,000

2. The City’s Administrative Procedure Order I-88 on the Carbon Reduction Fund specifies that the revenue sources to be approved for deposit into the Carbon Reduction Fund be recommended by the Climate Action Coordinator. The budgeted revenues for FY 2026 were not updated in the proposed budget, so they will be adjusted in the adopted budget.

35.1.12 Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
97 101-00-00-0000-59138 12,345 25,520 13,175
98 221-00-00-0000-59138 161 - (161)
98 235-00-00-0000-59138 344 - (344)
711-00-00-0000-59138 4,019 8,308 4,290
721-00-00-0000-59138 1,224 2,530 1,306
731-00-00-0000-59138 12,767 26,392 13,625
100
741-00-00-0000-59138 622 1,286 664
101 811-00-00-0000-59138
To Carbon
Reduction Fund
1,628 3,365 1,737
133-00-00-0000-49101 From General
Fund
12,345 25,520 13,175
133-00-00-0000-49103 From Equipment
Fund
1,628 3,365 1,737
133-00-00-0000-49110 From Water
Fund
4,019 8,308 4,290
133-00-00-0000-49111 From
Wastewater
Fund
1,224 2,530 1,306
133-00-00-0000-49112 From Refuse
Fund
12,767 26,392 13,625
133-00-00-0000-49113 From Parking
Fund
622 1,286 664
133-00-00-0000-49130 From Gas Tax
Fund
161 - (161)
102
133-00-00-0000-49149 From Clean
River, Beaches,
& Ocean Fund
344 - (344)

35.1.13 Economic Development and Housing

3. Increase the FY 2026 expenditure and revenue budgets for Fund 122 from $410,000 to $454,310.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
161 122-51-80-1506-41932 CRM
assessment
410,000 454,310 44,310
160 122-51-80-1506-54990 Miscellaneous
supplies and
services
410,000 454,310 44,310

4. Increase Fund 123 expenditure budget from 10,000 to 26,500. The increase in expenditures will be offset by the revenue collected.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
160 123-51-80-1504-54990 Miscellaneous
supplies and
services
10,000 26,500 16,500

5. Correct the FY 2026 budget for the Downtown Library & Affordable Housing Project:
the amount budgeted in FY 2025, which will be carried forward, was budgeted within the GL account for FY 2026 in error.

35.1.14 Page
number
in the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
161 253-51-81-0000-43110 Loans and
grants
1,901,659 - (1,901,659)
160 253-51-81-5201-56960 Federal
operating
grants &
contributions
1,901,659 - (1,901,659)

6. Adjust the CDBG Admin & Planning project’s budget, h512115, as a higher HUD award was received than expected.

Page
number
in the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
161 261-51-81-0000-43110
h512115-105-1015-0
Federal
operating
grants &
contributions
100,000 110,578 10,578
160 261-51-81-5204-54990
h512115-100-2020-0
Miscellaneous
supplies and
services
15,000 16,587 1,587
160 261-51-81-5204-52121
h512115-100-2010-0
Interfund labor
- charge
85,000 93,991 8,991

7. Adjust HOME Admin & Planning project, h512001 as a higher HUD award was received than expected.

35.1.15 Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
161 253-51-81-0000-43110
h512001-105-1050-0
Federal
operating grants
& contributions
34,846 35,598 752
160 253-51-81-5207-52121
h512001-100-2020-0
Interfund labor -
charge
34,846 35,598 752

8. Budget funds for a future affordable housing project, h512601, as a higher HUD award was received than originally anticipated.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
161 253-51-81-0000-43110
h512601-1020-3015
Federal
operating grant
& operations
- 456,760 456,760
160 253-51-81-5201-56960
h512601-100-2020-0
Loans and
grants
- 456,760 456,760

35.1.16 Library

9. Update Library budget to reflect changes in dues, vendor costs, and facility costs, to bring the budget in the City’s financial system into alignment with the Santa Cruz Public Library’s budget adopted by its Joint Powers Authority.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
951-36-51-3601-52131 Claims
management
services- outside
6,000 8,950 2,950
951-36-51-3601-52135 Financial
services- outside
658,367 1,217,948 859,581
951-36-51-3601-52248 Software
maintenance
services
53,642 600,531 546,889
951-36-51-3601-52961 Dues and
memberships
41,775 42,050 275
951-36-51-3606-52145 Security patrols 120,000 156,400 36,400 951-36-51-3613-52201 Water, sewer,
and refuse
- 2,000 2,000
951-36-51-3613-53311 Electricity
- 38,000 38,000
951-36-51-3611-52201 Water, sewer,
and refuse
3,600 13,250 9,650
951-36-51-3611-52247 Landscaping
maintenance
services
2,500 13,250 10,750
951-36-51-3611-53311 Electricity 42,000 46,200 4,200
200
951-36-51-3611-53312 Natural gas 15,000 10,500 (4,500)

35.1.17 Non-Departmental/Multi-Departmental/Citywide

10. The General Fund annually transfers 20% of the revenues received from the Cannabis Tax to Fund 134, the Cannabis Children’s Fund. The revenues, or transfer in, of these funds was budgeted in the proposed budget, but the related transfer out from the General Fund was incorrectly left out.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
97 101-00-00-0000-59191 Intra-entity
fund transfer
out
- 372,705 372,705

11. Remove transfers incorrectly budgeted in the FY 2026 budget.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
102 101-00-00-0000-49111 From
Wastewater
Fund
29,500 - (29,500)
100 721-00-00-0000-59101 To General
Fund
29,500 - (29,500)
102 101-00-00-0000-49112 From Refuse
Fund
2,500 - (2,500)
100 731-00-00-0000-59101 To General
Fund
2,500 - (2,500)

35.1.18 Parks and Recreation

12. Add CDBG funding for Senior Center Rehab project, c302101 and make corresponding change to the budget for h512103, Senior Center Renovation-Parks and Rec CIP.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change from
Proposed
Budget
311-00-00-0000-49126
c302101-516-0-0
From CDBG
Fund
355 - 118,600 118,600
311-30-41-9120-57203
c302101-100-2020-0
Building
Remodeling
- 118,600 118,600

13. Add CDBG funding for project c302305, Depot Freight Building Facility Improvements. Make corresponding change to the project budget for h512301, Parks & Rec CDBG Depot Park Reno.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change from
Proposed
Budget
311-00-00-0000-49126
c302305-516-0-0
From CDBG
Fund
353 - 92,814 92,814
311-30-41-9120-57203
c302305-100-2020-0
Building
Remodeling
- 92,814 92,814
161 261-51-81-0000-43110
h512301-105-1015-0
Federal
operating
grants &
contributions
50,502 92,814 42,612

35.1.19 Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change from
Proposed
Budget
160 261-00-00-0000-59103
h512301-100-2020-0
To General
Capital
Improvement
Fund
50,502 92,814 42,612

14. Add CDBG funding for Teen Center CDBG Project, g301201 to match its expenditure budget and corresponding budget in h511209, Teen Center Operating.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change from
Proposed
Budget
217 101-00-00-0000-49126
g301201-916-0-7013
From CDBG
Fund
- 45,000 45,000

15. Add an FY 2026 budget of $80,000 for project c302237, Depot Bike Park- Phase II of Bike Park Renovation, with the Park and Recreation Tax as its funding source.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change from
Proposed
Budget
311-00-00-0000-49109
c302237-908-0-0
From Park and
Recreation Tax
353 - 80,000 80,000
311-30-41-9110-57312
c302237-100-2020-0
Park
improvements
- 80,000 80,000

35.1.20 99 249-00-00-0000-59103 To General
Capital
Improvement
Fund
- 80,000 80,000

16. Move $100,000 from the CIP project, c402605, City Hall Space Renovation to project c402606, City Hall Campus (Lot 13) EV Charging Infrastructure. A project Fact Sheet will be added to the Public Works CIP section of the budget document that provides the rationale for the project.

Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change from
Proposed
Budget
311-00-00-0000-49101
c402605-912-0-0
From General
Fund
383 100,000 - (100,000)
311-40-00-9410-57290
c402605-100-2020-0
Other building
costs
100,000 - (100,000)
311-00-00-0000-49101
c402606-912-0-0
From General
Fund
N/A - 100,000 100,000
311-40-00-9410-57390
c402606-100-2020-0
Other
infrastructure
- 100,000 100,000
Water

17. Add $1,360,760 to the Water Department’s revenues to reflect the Public Works Department’s financial contribution for Santa Cruz Municipal Utility services.

35.1.21 Page
number in
the
Proposed
Budget GL String
Account
Description
Proposed
Budget
Amount
Adopted
Budget
Amount
Change
from
Proposed
Budget
275 711-70-00-7103-44833 Work Order
Charges
- 1,360,760 1,360,760

35.1.22 City Arts FY2026 Budget Hearing | May 27, 2025
FY 2026 Public Art Calculation, Capital Investment Project Exemption List Muni Code Chapter 12.8 Percent for Art Program on City Capital Improvement Projects

12.80.030 FUNDING.
(a) Annual appropriations for public art shall be calculated by fund as one percent of an average of the most recent three-year total eligible capital spending. (b) Once appropriated by the city council, public art moneys shall be transferred by the city manager or his or her designee into a designated public art fund. In addition to receiving moneys for city public art, this fund shall also be authorized to accept gifts, grants and donations made to the city for works of art. The fund balance shall be automatically carried over from year to year unless specifically terminated by the city council. Expenditures from this fund shall be made in accordance with the annual public art plan through appropriations approved by council for public art projects.
(c) The city manager may recommend that city council exclude a specific capital improvement project, or a portion thereof, from the provisions of this chapter when the total cost of the project exceeds five million dollars and financing and/or construction complexities of the project do not meet the general intent of this chapter. The arts commission will be notified of any such recommendation prior to its presentation to city council.

Background:

The City Arts FY26 Budget was previewed at the March 12, 2025 Arts Commission Meeting. Since that time, two Departments submitted requests to exempt some specific projects. The City Manager approved those requests from Water and Public Works. The exemption list was shared with Arts Commission on May 14, 2025 prior to going to the Council Budget Hearing set for May 27th City Council Meeting.

Difference in General CIP Art Fund for FY 2026 a reduction of $71,494 Public Works Department Difference in % for Art Fund for FY 2026 a total reduction of $37,060 Water Department Difference in % for Art Fund for FY 2026 a total reduction of $146,708 Water Department
Capital Projects in the Water Department are excluded from the FY2026 calculations based on the following four categories:
• Projects with existing funding agreements with reimbursement restrictions

35.1.23 City Arts FY2026 Budget Hearing | May 27, 2025
• Projects planned for future funding agreements that will likely include reimbursement restrictions (in advance of understanding the full funding portfolio the Water Department is recommending exempting these projects)
• Projects over $5,000,000
• Projects funded from System Development Charges Fund 715, which are restricted funds per SCMC 16.14.040 and must be used exclusively for water system expansion/improvements and water conservation.

Excluded FY 2026 Capital Projects
Projects over $5,000,000 with existing funding agreements Fund Project # Project Title
711 c700025 GHWTP Facilities Improvement Project
711 c701501 GHWTP CC Tanks Replacement
711 c701505 University Tank 4 Rehab/Replacement
711 c701606 NCD I/O Replacement Project
711 c701609 ASR Planning
711 c701705 Water Supply Augmentation
711 c702002 Brackney Landslide Area Pipeline Risk Reduction 711 c702101 Beltz 8&12 Design with Beltz 12 Upgrades
711 c702105 Newell Crk. Pipeline Felton/Graham Hill
711 c702205 Intertie 1 - Santa Cruz-Scotts Valley
Projects over $5,000,000 planned for future funding agreements Fund Project # Project Title
711 c701903 Tait Diversion Rehab/Replacement Project
711 c702303 North Coast System Phase 4
711 c702305 Beltz WTP Upgrades
711 c702503 Beltz 8 Upgrades for ASR
711 c702601 Beltz 9 Upgrades for ASR
Projects over $5,000,000
Fund Project # Project Title
711 c701603 Meter Replacement
711 c701901 Water Program Administration
Projects funded by System Development Charges
Fund Project # Project Title
715 All All

35.1.24 City Arts FY2026 Budget Hearing | May 27, 2025
Public Works Department
Capital projects in the Public Works Department are excluded from the FY 2026 calculations based on the following four categories:
• Projects with existing funding agreements with reimbursement restrictions • Projects planned for future funding agreements that will likely include reimbursement restrictions (in advance of understanding the full funding portfolio the Public Works Department is recommending exempting these projects) • Projects over $5,000,000
• Projects funded by Gas Tax (Fund 221)
Excluded FY 2026 Capital Projects
Projects over $5,000,000
Fund Project # Project Title
311 c401413 MB Sanctuary Scenic Trail (Rail Trail Segment 7) 311 c401413 MB Sanctuary Scenic Trail (Rail Trail Segment 7) 311 c401804 MB Sanctuary Scenic Trail (Rail Trail Segment 8 & 9) 311 c401208 Riverside Avenue Improvements Phase II
311 c401501 West Cliff Drive Stabilization
311 c402407 West Cliff Drive Bethany Curve Culvert
311 c601403 SLR Mouth & Lagoon Mgmt Plan
721 c401405 WWTF-Electrical System
721 c401511 Sewer System Improvements
721 c401606 Front-Spruce-Pacific Sewer Main Rehabilitation 721 c402204 City WWTF Headworks Replacement
721 c401706 WWTF Infrastructure and Major Equipment Study 721 m409659 WWTF Equipment Replacement
721 m409668 Neary Lagoon Park Rehab-Maintenance
731 c401909 Landfill Master Plan Development
752 c402112 FEMA Levee Certification
752 c401707 Downtown SLR Drainage System Assessment
Projects funded by Gas Tax:

Fund Project # Project Title
221 all all
311 c401507 Bay Drive Storm Damage Repair
311 c401610 Catch Basin Replacement Program
311 c401709 CMP Storm Drain Pipe Replacement

35.1.25 City Arts FY2026 Budget Hearing | May 27, 2025
311 c401004 Mission Street Hill Utility Underground
Other considerations: projects in over-burdened funds:

Fund Project # Special Exemption Justification
741 All The Parking Fund is currently over-extended due to the building acquisition of 123 Locust St (FY24 mid-year)
and supporting the Downtown Library and Affordable
Housing project. In addition, revenues from the
Parking-In-Lieu fee are no longer anticipated due to
new state laws eliminating parking requirements. Due
to these factors, the Parking fund has largely defunded their 5-year CIP in an effort to meet daily operation
needs and meet debt finance payments. There is
currently $38,512 in the 742 fund balance for Parkingrelated art projects. Staff are working to increase parking rates, where appropriate and reasonable to
support operational activities.
751/752 All The current revenues for Fund 752 cannot support daily operations. Staff are working with a consultant for
long-range financial planning and an assessment for
new/updated Stormwater fees. Until that is completed,
Public Works is requesting all 751 and 752 projects be
exempt until the funds can support this annual cost.

There is currently $14,832 in the 753 fund balance for
Stormwater-related art projects

35.1.26 CIP Project Summary By Category
Water Supply
Augmentation
Strategy
Raw Water
Storage
Raw Water
Diversion and
Groundwater
System
Raw Water
Transmission
Surface Water
Treatment
Distribution
System Storage,
Water Main, &
Metering
Site Safety &
Security
Facility Upgrades
for Emergencies
& System Repair
Other Projects Staff
Augmentation -
Water Program
Administration
Contingency -
Water Program
Management
Reserve
Total
FY26 Budget Request 1,054,000 - 462,000 9,669,000 1,175,000 5,321,000 55,000 - - 441,000 - 18,177,000 Prior Year Appropriations 1 6,644,122 1,839,343 1,132,285 9,445,593 3,828,966 3,810,609 380,193 35,936 663,249 1,124,833 1,711,816 30,616,945 FY26 Estimated Spend 7,698,122 1,839,343 1,594,285 19,114,593 5,003,966 9,131,609 435,193 35,936 663,249 1,565,833 1,711,816 48,793,945 FY27 Budget Request 5,924,000 - 1,737,000 7,474,000 8,232,000 2,331,000 - - - 2,233,000 5,052,000 32,983,000 Prior Year Appropriations 1 1,984,155 474,082 410,920 4,926,698 1,289,749 2,353,630 112,169 9,262 170,949 403,586 441,213 12,576,413 FY27 Estimated Spend 7,908,155 474,082 2,147,920 12,400,698 9,521,749 4,684,630 112,169 9,262 170,949 2,636,586 5,493,213 45,559,413 FY28 Budget Request 9,374,000 192,000 3,306,000 151,000 27,873,000 878,000 - - - 2,215,000 4,855,000 48,844,000 Prior Year Appropriations 1 107,820 - - - - - - - - - - 107,820 FY28 Estimated Spend 9,481,820 192,000 3,306,000 151,000 27,873,000 878,000 - - - 2,215,000 4,855,000 48,951,820 FY29 Budget Request 28,548,000 150,000 16,962,000 47,000 15,315,000 909,000 - - - 1,595,000 - 63,526,000 Prior Year Appropriations 1 322,126 - - - - - - - - - - 322,126 FY29 Estimated Spend 28,870,126 150,000 16,962,000 47,000 15,315,000 909,000 - - - 1,595,000 - 63,848,126 FY30 Budget Request 21,958,000 - 25,860,000 48,000 16,380,000 941,000 - - - 1,437,000 - 66,624,000 Prior Year Appropriations 1 115,357 - - - - - - - - - - 115,357 FY30 Estimated Spend 22,073,357 - 25,860,000 48,000 16,380,000 941,000 - - - 1,437,000 - 66,739,357 FY26-30 Budget Request 66,858,000 342,000 48,327,000 17,389,000 68,975,000 10,380,000 55,000 - - 7,921,000 9,907,000 230,154,000 Prior Year Appropriations 1 9,173,580 2,313,425 1,543,205 14,372,290 5,118,715 6,164,239 492,363 45,198 834,198 1,528,420 2,153,029 43,738,661 FY26-30 Estimated Spend 76,031,580 2,655,425 49,870,205 31,761,290 74,093,715 16,544,239 547,363 45,198 834,198 9,449,420 12,060,029 273,892,661 Projects in each category
Facility Upgrades for Emergencies & System Repair: Union/Locust Admin Building Back Up Power Generator Other Projects: Branciforte Steambank Restoration, Maintenance Workshop at BSR, and Trailers at BSR 1 Estimate of existing purchase orders and project available balances to be spent in the fiscal year.

Water Supply Augmentation Strategy: ASR Planning, ASR New Wells, Beltz 8 & 12 Design and 12 Construction, Beltz 8 Construction, Beltz 9 Upgrades, Santa Margarita Groundwater Planning, Water Supply Augmentation, and Recycled Water Feasibility Study Raw Water Storage: Newell Creek Dam Inlet/Outlet Replacement Project and Aerators at Loch Lomond Raw Water Diversion and Groundwater System: Laguna Creek Diversion Retrofit, Coast Pump Station Rehab, Tait Diversion Retrofit, Felton Diversion Pump Station Improvements, Beltz 12 Ammonia Removal, Beltz WTP Filter Replacement, and Beltz WTP Upgrades Raw Water Transmission: Newell Creek Pipeline Rehab/Replacement (Felton/GHWTP & Felton/Loch Lomond), Brackney Landslide Area Pipeline Risk Reduction, Felton Diversion Pipeline Emergency Repair, and North Coast Pipeline Repair/Replacement (Phase 4) Surface Water Treatment: GHWTP Concrete Tanks Replacement, GHWTP Facilities Improvement Project, GHWTP SCADA Radio System Replacement, GHWTP SCADA IO Hardware & Wiring Upgrades, and River Bank Filtration Study Distribution System Storage, Water Main, & Metering: University Tank No. 4, Engineering & Distribution Main Replacements, Meter Replacement Project, Intertie 1: SVWD, Facility & Infrastruture Improvements, and Distribution System Water Quality Improvements Site Safety & Security: Graham Hill WTP Entrance Improvements, Security Camera & Building Access Upgrades, and CMMS Software Replacement (Water share)

35.1.27 FY 2026-30 Financial Pro Forma
Fiscal Year 2026 2027 2028 2029 2030
Revenues
Fixed Fee Revenue 5,562,349 5,947,543 6,512,560 7,131,253 7,808,722 Volumetric Revenue 51,152,748 56,136,044 61,468,969 67,308,521 71,703,913 Elevation Surcharges 100,000 100,000 100,000 100,000 100,000 Rate Stabilization Revenue 3,301,080 3,301,080 3,301,080 3,301,080 3,301,080 Total Rate Revenue 60,116,177 65,484,668 71,382,608 77,840,854 82,913,715 Non-Rate Revenue
Other Income 2,230,660 4,000,000 4,000,000 4,000,000 4,000,000 Investment Income 1,240,000 1,240,000 1,240,000 1,240,000 1,240,000 Total Non-Rate Revenue 3,470,660 5,240,000 5,240,000 5,240,000 5,240,000 Total Revenues 63,586,837 70,724,668 76,622,608 83,080,854 88,153,715 Operating Expenses
Personnel 20,429,760 21,859,843 23,390,032 25,027,334 26,779,248 Services, Supplies & Other 19,744,038 20,731,240 21,767,802 22,856,192 23,999,001 Capital Outlay 1,485,371 468,191 491,601 516,181 541,990 Other Operating Expenses 1,681,100 1,739,938 1,800,836 1,863,866 1,929,101 Total Operating Expenses 43,340,268 44,799,212 47,450,270 50,263,572 53,249,339 Net Operating Revenues 20,246,569 25,925,456 29,172,338 32,817,282 34,904,376 Capital Expenditures 48,793,945 45,559,413 48,951,820 63,848,126 66,739,357 Grant Funded 5,300,135 39,842 - - -
SRF Funded 16,447,810 3,433,760 - - -
WIFIA Funded 12,010,801 11,725,189 31,840,753 15,366,193 727,089 Pay-Go Funded 8,474,872 9,675,393 10,082,248 7,077,209 8,997,718 Debt Funded (Tax-Exempt Bonds) 6,560,327 20,685,229 7,028,819 41,404,724 57,014,550 Debt Service 12,340,263 12,970,957 14,934,333 17,082,525 21,127,256 Net Income (568,567) 3,279,106 4,155,757 8,657,548 4,779,401 Ending Cash Balances by Fund
Fund 717 (Emergency Reserve) 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 Fund 713 (Rate Stabilization) 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 Fund 716 (90 Day Operating Reserve) 10,686,642 11,046,381 11,700,067 12,393,757 13,129,974 Fund 711 (Water Operations) 12,453,121 15,616,743 19,372,955 27,590,952 31,888,277 Coverage and Targets
Debt Service Coverage (W/Out Reserves) 1.92 2.04 1.99 1.95 1.67 Debt Service Coverage Target 1.50 1.50 1.50 1.50 1.50
Debt Service Coverage (W/Reserves) 4.85 5.15 4.99 5.10 4.45 Days' Cash (Includes only Funds 711 & 716) 195 217 239 290 309 Days' Cash Target 180 180 180 180 180

35.1.28 Financial Summary
FY 2025 Adjusted
Budget YTD Budget Actual Variance $+/(-)
Variance %
+/(-)
Operating Revenues
Water Sales 56,227,698 28,113,849 27,335,969 (777,880) (3%) Other Charges for Services 1,715,614 857,807 1,711,570 853,763 100% Other Revenues 694,029 347,015 276,895 (70,120) (20%)
Investment Earnings 378,928 189,464 458,210 268,746 142% Total Operating Revenues 59,016,269 29,508,135 29,782,644 274,510 1% Operating Expenses
Salaries & Wages 14,412,060 7,206,030 6,166,264 (1,039,765) (14%) Employee Benefits 6,152,174 3,076,087 2,178,776 (897,311) (29%) Services, Supplies & Other 20,309,893 10,154,947 12,288,278 2,133,331 21% Capital Outlay 679,526 339,763 57,253 (282,510) (83%)
Debt Service - Principal & Interest 7,146,362 3,573,181 1,552,135 (2,021,046) (57%) Total Operating Expenses 48,700,015 24,350,007 22,242,707 (2,107,300) (9%) Net Operating Revenue (Loss) 10,316,255 5,158,127 7,539,937 2,381,810 46% Debt Service Coverage (Target >= 1.50x) 2.44x 2.44x 5.86x Fund Balances YTD Balance FY 25 Year End
Target Balance
711 - Enterprise Operations 17,359,951 10,676,954
713 - Rate Stabilization 9,625,627 10,000,000
715 - System Development Charges 8,746,652 N/A
716 - 90 Day Operating Reserve 9,432,794 9,549,973
717 - Emergency Reserve 3,227,983 3,000,000
718 - Mount Hermon June Beetle Endowment 151,584 144,000 719 - Equipment Replacement 629,702 700,000
Days' Cash (Includes only Funds 711 & 716) 235
Days' Cash Target 180 180

SANTA CRUZ WATER DEPARTMENT FINANCIAL REPORT
Fiscal Year 2024-25 through December 31, 2024
(Unaudited)
Actual vs. YTD Budget
Cash
Expenses
Revenues
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Water Sales Revenue (in thousands)
FY 22 FY 23 FY 24 FY 25
M
200 M
400 M
600 M
800 M
1000 M
1200 M
1400 M
FY 22 FY 23 FY 24 FY 25
Water Consumption (in gallons)
Single Family Residential Commercial
Multifamily Residential IRR/N Coast
UCSC
FY 25, 2nd Quarter $20.6 million
Salaries & Wages Employee Benefits Services, Supplies & Other FY 24, 2nd Quarter $15.5 million
Salaries & Wages Employee Benefits Services, Supplies & Other

35.1.29 Project Titles
Prior Year
Actuals
FY25 Actuals thru
12/31/24
Total Project Cost
Estimate (1)
(escalated dollars)
Project
Schedule

WATER SUPPLY RESILIENCY & CLIMATE ADAPTATION PROJECTS
Water Supply Augmentation Strategy
Beltz Wellfield Aquifer Storage and Recovery
ASR Planning 4,280,292 33,602 6,081,668 2019-2028
Beltz 8 & 12 Design with Beltz 12 Upgrades (2) 1,788,042 162,015 21,383,384 2020-2026 ASR Mid County New Wells - - 3,319,517 2025-2030
Santa Margarita Aquifer Storage and Recovery and In Lieu Water Transfers and Exchanges ASR Santa Margarita Groundwater 32,552 12,425 1,306,195 2021-2028 Studies, Recycled Water, Climate Change, Aquifer Storage and Recovery Water Supply Augmentation 4,635,157 645,384 202,301,504 2019-2035 Recycled Water Feasibility Study 1,565,005 - 2,867,947 2018-2026 Subtotal Water Supply Augmentation Strategy 12,301,048 853,425 237,260,215 Subtotal Water Supply Resiliency and Climate Adaptation Projects 12,301,048 853,425 237,260,215

INFRASTRUCTURE RESILIENCY AND CLIMATE ADAPTATION
Raw Water Storage Projects
NCD I/O Replacement Project 98,243,954 387,538 100,947,850 Completed Aerators at Loch Lomond 731,553 - 738,612 Completed
Subtotal Raw Water Storage Projects 98,975,507 387,538 101,686,462 Raw Water Diversion and Groundwater System Projects
Laguna Creek Diversion Retrofit 2,993,397 13,306 3,067,792 Completed Tait Diversion Retrofit 603,427 85 10,135,360 2018-2030 Coast Pump Station Rehab/Replacement - - 11,105,032 2029-2033 Felton Diversion Pump Station Improvements 353,539 - 4,129,925 2020-2030 Beltz 12 Ammonia Removal 1,687,523 31,925 2,767,377 2021-2026 Beltz WTP Upgrades 634,230 25,825 36,782,440 2022-2034
Beltz WTP Filter Replacement - 116,032 1,722,433 2024-2027 Tait Wells Rehabilitation - 546,707 570,000 Completed
Subtotal Raw Water Diversion and Groundwater System Projects 6,272,115 733,879 70,280,359 Raw Water Transmission
Newell Creek Pipeline Felton/GHWTP 4,377,870 139,873 39,385,219 2019-2027 Newell Creek Pipeline Felton/Loch Lomond - - 43,457,323 2027-2033 Brackney Landslide Area Pipeline Risk Reduction (3) 2,847,137 376,278 16,692,972 2020-2027 North Coast Pipeline Repair/Replacement - Ph 4 - - 94,308,636 2030-2035 Felton Diversion Pipeline Emergency Repair (3) 2,938,711 9,727 3,296,951 Completed Subtotal Raw Water Transmission 10,163,719 525,878 197,141,101 Surface Water Treatment
GHWTP Concrete Tanks Replacement 33,705,954 2,173,265 48,148,720 2018-2026 GHWTP Facilities Improvement Project 22,798,894 671,754 175,459,482 2018-2030 River Bank Filtration Study 1,003,775 - 7,176,547 2018-2028 GHWTP SCADA Radio System Replacement 156,010 59,154 355,265 2024-2025 GHWTP SCADA IO Hardware & Wiring Upgrade - - 230,000 2022-TBD Subtotal Surface Water Treatment 57,664,633 2,904,174 231,370,014 Distribution System Storage, Water Main and Pressure Regulation, and Metering Projects University Tank No. 4 Rehab/Replacement 1,114,129 84,001 7,452,315 2018-2027 Meter Replacement Project 13,300,879 93,830 13,583,320 Completed Engineering and Distribution Main Replacement Projects (4) 9,531,219 290,401 26,598,703 On-going Distribution System Water Quality Improvements 41,760 - 128,019 2021-TBD Facility & Infrastructure Improvements 246,598 167,207 8,399,666 On-going Intertie 1: Santa Cruz - Scotts Valley (3) 1,487,496 415,667 13,545,058 2022-2026 Subtotal Distribution Storage, Wmain Pressure Reg, and Metering 25,722,081 1,051,105 69,707,081 Subtotal Infrastructure Resiliency and Climate Adaptation 198,798,055 5,602,575 670,185,017

OTHER RISK MANAGEMENT AND RISK REDUCTION PROJECTS
Site Safety and Security
Security Camera & Building Access Upgrades 393,447 8,601 595,447 On-going GHWTP Gate Entrance Upgrades 903,107 - 1,104,958 2020-2025 CMMS Software Replacement - Water Share 508,746 44,302 1,068,377 2022-2027 Subtotal Site Safety and Security 1,805,300 52,904 2,768,782 Staff Augmentation
Water Program Administration (5) 2 849,152 14,532,587 On-going Subtotal Staff Augmentation 2 849,152 14,532,587
Contingency
Management Reserve (6) - - 11,369,962 On-going
Subtotal Contingency - - 11,369,962
Storage for Emergency Facility and System Repair Tools and Equipment Union/Locust Admin Building Back Up Power Generator 61,867 10,409 316,867 2024-2025 Subtotal Storage for Emergency and System Repair 61,867 10,409 316,867 Other Projects
Branciforte Streambank Restoration 234,964 29,952 985,477 2024-TBD Maintenance Workshop at BSR 41,457 79,830 150,000 2025
Trailers at BSR - - 75,000 2025
Subtotal Other Projects 276,421 109,782 985,477
Subtotal Other Risk Management and Risk Reduction Projects 2,143,590 1,022,247 30,198,675 GRAND TOTAL 213,242,693 7,478,247 937,643,907
(6) Management Reserve budget appropriations are transferred to specific projects upon Change Management approval.

Capital Investment Program (CIP) Detail
(1) Project Cost Estimates are Prior Year Actuals plus FY25 adopted budget plus FY25 adjustments/carry-forwards plus FY26-38 projections from Sept 2024. (2) Renamed from ASR - Existing Infrastructure. Future Existing Inflastructure ASR projects will be added as new projects. (3) Expenses are not adjusted for grant funding.
(4) Prior year actuals for Main Replacements start in FY19. (5) Prior Year Actuals should be zero; however, rounding from each prior year now totals $2.00. Staff augmentation budget appropriations and actual expenses are transferred to specific projects during fiscal year-end process.

35.1.30 City of Santa Cruz
Parks and Recreation Commission
323 Church Street
Santa Cruz, CA 95060
May 6, 2025
TO: Mayor Fred Keeley, Vice Mayor Shebreh Kalantari-Johnson (District 3), Councilmember Gabriela Trigueiro (District 1), Councilmember Sonja Brunner (District 2), Councilmember Scott Newsome (District 4), Councilmember Susie O'Hara (District 5), and Councilmember Renee Golder (District 6)
FROM: Brad Angell, Chair, City of Santa Cruz Parks and Recreation Commission SUBJECT: Parks and Recreation Commission Recommendation on the City of Santa Cruz Parks and Recreation Department’s FY 2026 Operating Budget and FY 2026-2030 Capital Investment Program
The City of Santa Cruz Parks and Recreation Commission is pleased to express its strong support for the Parks and Recreation Department’s Fiscal Year 2026 Operating Budget and Capital Investment Program (CIP). This budget reflects the Department's unwavering commitment to its mission: to "provide quality public spaces and experiences that build a healthy community, foster equity, and better the environment." We believe that by working collaboratively, we can continue to ensure these invaluable assets thrive for all Santa Cruz residents and visitors.

A Vital Return on Investment for Our Community
The Parks and Recreation Department is a cornerstone of Santa Cruz's quality of life and a significant economic engine. Its services and programs deliver a profound return on investment across multiple facets of our community:
• Building a Healthy Community and Fostering Equity: Our parks and recreation opportunities are fundamental to public well-being. In FY 2024, the department engaged over 110,000 participants in recreational activities. We are proud that 96% of Santa Cruz residents live within a 10-minute walk to a park, significantly exceeding the national average. Initiatives like "Open Skate" and the PRIDE picnic foster inclusivity, while critical accessibility updates at Cowell Beach ensure our spaces are welcoming to all. • Stewarding Our Environment: The department actively manages and maintains 9,742 street trees and over 1,700 acres of diverse natural resources, including urban forests, beaches, and open spaces. This stewardship is vital to the city's ecological balance and climate action goals.
• Powering a Strong Local Economy: Beyond community well-being, Parks and Recreation is a vital economic driver. Our diligent stewardship of iconic destinations like the Municipal Wharf and beaches attracted over 2.7 million visits last year, directly fueling our local tourism industry and supporting countless local businesses. The Department's proactive work, including remedying damages sustained by the Wharf, directly safeguards this critical landmark and its economic contributions.

35.1.31 City of Santa Cruz
Parks and Recreation Commission
323 Church Street
Santa Cruz, CA 95060
Page |2
FY 2026 Operating Budget and Capital Improvement Program Overview For FY 2026, the Parks and Recreation Department is proposing an Operating Budget of $23.3 million, primarily allocated to personnel services ($12.7 million) and essential services, supplies, and other charges ($10.5 million), with smaller allocations for capital outlay and debt service. The proposed revenue budget is $5.74 million, translating to a cost recovery of 28 percent for FY 2026. This budget reflects a largely status quo approach given the city's financial outlook, with a

2.5% increase to discretionary budgets totaling just over $110,000, which has been allocated to critical areas such as park safety and security patrols, vehicle leases, and administrative capacity to manage increased permit and reservation processing. Personnel adjustments include adding Recreation Specialist classifications to improve career ladders and offsetting a new Open Space Field Supervisor with a deleted Field Crew Leader position, resulting in a net reduction of 1.00 FTE for the department.

In addition to the operating budget, the department has submitted a robust Capital Improvement Program (CIP) totaling $15.7 million over the next five years. For FY 2026, $1,055,000 in new appropriations is requested to support vital projects such as the renovation of Poet's Park playground, outdoor safety improvements at the DeLaveaga Driving Range, and the continuation of crucial planning work for San Lorenzo and Harvey West Parks.

Despite these efforts and the proposed budget, the department faces significant pressures, including an estimated $100 million in deferred maintenance across our aging park system, rising operational costs (especially for temporary staff and utilities) not fully covered by the "status quo" budget definition, and volatility in grant funding, highlighted by the recent cancellation of a $1 million urban forestry grant.

A Collaborative Path Forward: Securing Our Shared Vision The Department has proactively addressed these challenges by leveraging strategic partners and pursuing fiscal sustainability. We have successfully established partnerships with organizations like Community Bridges, the Museum of Natural History, and Santa Cruz Mountains Trail Stewardship, which enhance capacity and contribute significantly to city assets. Our commitment to cost recovery is evident in efforts like the Civic Business Plan and Golf Course Operations Plan.

The Parks and Recreation Commission's ad hoc sub-committee for fiscal sustainability has also developed key recommendations, including exploring opportunities for a dedicated funding portfolio, supporting strong philanthropic partnerships (like the "Friends of Parks and Recreation" group), and developing a clear fiscal strategy with performance indicators.

Councilmembers, your unwavering support for our parks and recreation system is deeply appreciated, and we recognize your commitment to ensuring Santa Cruz remains a vibrant community. To secure the long-term viability and continued excellence of our parks, beaches, and facilities, the Commission will continue to engage department staff and the City Council to advance these and other recommendations for:
• Developing a comprehensive financial plan to address the critical backlog of deferred maintenance and rising operational costs.

35.1.32 City of Santa Cruz
Parks and Recreation Commission
323 Church Street
Santa Cruz, CA 95060
Page |3
• Identifying sustainable funding mechanisms that align with the true value and economic impact of our parks and recreation system.
• Strengthening strategic partnerships and philanthropic opportunities to enhance our capacity.

By working together, we can ensure the Parks and Recreation Department continues to deliver exceptional quality of life, economic vitality, and environmental stewardship for generations to come.

Thank you for your consideration, time, and support.

Cc: Matt Huffaker, City Manager
Tony Elliot, Parks and Recreation Director
Members of the Parks and Recreation Commission:

Leonardo Cruz (Vice Chair)
Dan Ackerstein
Barbara J. Lawrence
Jane Mio
Jacob Pollock
Nikolas Strong-Cvetich

35.1.33 City of Santa Cruz
Transportation and Public Works
Commission
Public Works | Administration
809 Center Street, Room 201
Santa Cruz, CA 95060
Page | 1
May 6, 2025
TO: Mayor Fred Keeley, Vice Mayor Shebreh Kalantari-Johnson (District 3), Councilmember Gabriela Trigueiro (District 1), Councilmember Sonja Brunner (District 2), Councilmember Scott Newsome (District 4), Councilmember Susie O'Hara (District 5), and Councilmember Renee Golder (District 6)
FROM: Ryan Meckel, Transportation and Public Works Commission Chair SUBJECT: Transportation and Public Works Commission Recommendation on the City of Santa Cruz Public Works Department’s FY 2026 Operating Budget and FY 2026-2030 Capital Investment Program
The City of Santa Cruz Transportation and Public Works Commission is pleased to express its strong support for the recommendations related to the Public Works Department’s Fiscal Year 2026 Operating Budget and Capital Investment Program (CIP).

These recommendations are the result of the Commission’s continued engagement with and oversight of the department’s operations, and reflect our shared commitment to effective capital planning, public safety, staff well-being, and the delivery of essential services to the community.

Through consistent collaboration, the Public Works Department has demonstrated its responsiveness to input from both the community and this Commission. That feedback has meaningfully informed the department’s priorities while ensuring uninterrupted, highquality service to Santa Cruz residents and visitors alike. Public Works staff play a critical role in maintaining the City’s infrastructure, managing a wide array of projects, over 100 public facilities, and more than 600 individual assets—work that requires dedication, technical expertise, and strategic foresight.

Public Works Budget At-a-Glance:
• Operating budget includes 36 operating activities (divisions) across 15 unique funds, including but not limited to General Fund, Enterprise, special districts, central service, and internal service.
• In FY 2026, the department was allowed a General Fund discretionary increase of $80,425. Additional funds were spread amongst the 11 General Fund activities for personnel services, Citywide contract-related services, operating supplies, funds for community events and vegetation maintenance in the right-of-way, and some capital outlay funds.

35.1.34 Page | 2
• The proposed new positions will significantly enhance support for regulatory compliance in stormwater and refuse management, assist in developing the Resource Recovery Facility Master Plan, ensure adherence to California Air Resources Board reporting requirements for the City’s 600+ assets, and support key initiatives such as the Santa Cruz Wharf refuse service and the mandatory street sweeping pilot program.
• The FY 2026-2030 CIP includes 93 active projects with 22 project managers. • 66% of Public Works CIP projects have a level of grant funding.

Exceptional Successes:
• Completed the Wastewater Fund rate analysis and structure for FY 2026-2030. • Initiated construction on the Murray Street Bridge seismic upgrade project. • Completed construction of the Coastal Rail Trail Segment 7, Phase 2 project. • Completed the Harvey West Park solar canopy and Soquel/Front Parking Garage solar array.
• Secured the $30 million IBank loan for several critical Wastewater projects. • Installed temporary methane flare at the Resource Recovery Facility to back up the gas recovery system while a permanent flare is designed and constructed. • Start up and operation of the new Source Water Pump Station to provide secondary wastewater effluent to Pure Water Soquel Advanced Water Treatment Facility.
• Secured financing and began construction of the Lot 4/Library Parking Facility. • Assisted with the Citywide fee study to gain cost recovery on Public Works related permits and other fees.
• Secured a $171,000 CalRecycle grant with an emphasis on edible food recovery. • Began update to the Active Transportation Plan with a Vision Zero focus. • Certified 15 new businesses in the Green Business Program.

Goals and Challenges (Opportunities) Ahead:
• Complete the Stormwater Fund long-range financial planning and revenue analysis/program realignment to increase revenue for required stormwater O&M and CIP needs.
• Complete landfill cost of service study and implement new rates, as needed. • Begin construction on the 800 West Cliff Drive road relocation project. • Install new permanent landfill methane flare to further capture methane when the production plant is offline.
• Begin the Wastewater Treatment Facility Headworks project. • Operate the new Title 22 tertiary treatment facility at the Wastewater Treatment Facility to provide onsite and offsite recycled water.
• Support both pilot programs for the Citywide OVO and mandatory no-parking Street Sweeping; consider reconfigurations of current operations to continue Public Works support for these City Council approved, and California Coastal Commission permitted programs.
• Issuance and sale of up to $22 million in grant anticipation notes to provide financing for the West Cliff emergency repairs.
• Begin the pilot parking program for multi-space parking on Pacific Avenue.

35.1.35 Page | 3
• Finalize funding for and install additional EV infrastructure at seven critical City facilities.
• Complete design of Rail Trail Segment 9.
• Update Engineering Standard Specifications and Details. • Transition to online residential parking permit sales. • Continue to maintain
At its April 21, 2025 meeting, the Transportation and Public Works Commission received the presentation of the proposed Fiscal Year 2026 budget and voted unanimously in support of recommending City Council (Council) approval. The Commission commends the Public Works Department for its responsible financial planning and thoughtful prioritization in preparing for the year ahead. We appreciate the opportunity to offer our recommendation to the Council and welcome any questions or requests for further information. Thank you for your continued support of the Public Works Department. The Commission remains dedicated to working alongside the Council and Public Works to promote resilience, innovation, and excellence in public service for the Santa Cruz community.

Cc: Matt Huffaker, City Manager
Nathan Nguyen, Public Works Director
Members of the Transportation and Public Works Commission:

Susan Gilchrist, Vice Chair
Ron Goodman
Scott Harriman
Kyle Kelley
Elizabeth Madrigal
Lola Quiroga

35.1.36 1
General Plan Policies in Support of New FY 2026 CIP Projects # PROJECT DEPT
CIP
PG
#
RELATED GP 2030 GOALS, POLICIES, &

ACTIONS
Y/
N
1 Fire Station 2 Exercise & Storage Facility: Fire
station addition to include exercise facility,
storage, dormitory, and captain’s office.

Physical fitness is a requirement for firefighters
and providing an exercise facility at the Fire
Station is an industry standard. Currently staff
uses the apparatus bay for exercise which is
not recommended due to carcinogens emitted
from fire apparatus. An extra dorm for staff will
also be added to enable alternate deployment
models for surges, large scale emergencies,
etc. Small expenditure fiscal year 2024 on this
project, but it has not yet been evaluated for
General Plan consistency.

Fire 5 • HZ1.1 Ensure emergency preparedness.
• HZ1.1.2 Train City staff in emergency preparedness.
• HZ1.1.4 Ensure the completeness and availability of
emergency supplies and equipment in cooperation
with other agencies.
• HZ1.1.7 Maintain the physical and structural
integrity of all existing emergency use facilities.
• HZ1.4 Continue to meet fire safety and firefighting
needs.
• HZ1.4.1 Ensure department readiness through
ongoing equipment maintenance and personnel
training.
• HZ2.2 Address localized air quality issues, including indoor air quality.

Y
2 Fire Station 3 Butler Building: Pre-fabricated
butler building to protect and store fire
apparatus and equipment. This building will
protect and prolong the lifespan of critical
reserve apparatus and store equipment. This
also addresses health concerns about
carcinogenic turnouts being stored in the same
room as the compressor that fills Self
Contained Breathing Apparatus (SCBA). Small
expenditure in fiscal years 2024 and 2025 on
this project, but it has not yet been evaluated
for General Plan consistency.

Fire 6 • HZ1.1 Ensure emergency preparedness.
• HZ1.1.4 Ensure the completeness and availability of
emergency supplies and equipment in cooperation
with other agencies.
• HZ1.4 Continue to meet fire safety and firefighting
needs.
• HZ1.4.1 Ensure department readiness through
ongoing equipment maintenance and personnel
training.
• HZ2.2 Address localized air quality issues, including indoor air quality.

Y
3 Demolish Pogonip Clubhouse: Perform any
necessary studies and demolish the Pogonip
Parks &
Rec
13 • LU2.3.1 Protect, maintain, and enhance publicly
accessible coastal and open space areas.

Y

35.1.37 2
General Plan Policies in Support of New FY 2026 CIP Projects # PROJECT DEPT
CIP
PG
#
RELATED GP 2030 GOALS, POLICIES, &

ACTIONS
Y/
N
Clubhouse and related infrastructure. The
building is presently red-tagged and is a safety
hazard.
• Goal PR1 Ample, accessible, safe, and wellmaintained parks, open space, and active recreational facilities.
• Goal CC 7 A safe and secure community.
• Goal PR1 Ample, accessible, safe, and wellmaintained parks, open space, and active recreational facilities.
• PR1.5 Provide a safe and secure environment in City
parks, open space areas, and facilities. Cf. CC7.1,
CC7.4.
4 Improve and Restore Jessie St Marsh and SLP:

For the San Lorenzo Park, the project involves
the planning, design, environmental review,
and permitting to improve flood management,
expand and enhance habitat, and provide
recreational opportunities on approximately 6
acres of lower Riverlands area adjacent to San
Lorenzo River. For Jessie St. Marsh, remove
contaminated fill, increase wetland, and add
trail from East Cliff Ave. to Lemos St.

Parks &
Rec
15 • HZ6.4 Avoid or reduce the potential for life loss, injury, and property and economic damage from
flooding.
• HZ6.4.5 Continue to reduce flooding hazards in
areas with flood potential.
• HZ4.2 Ensure proper handling and disposal of
hazardous waste.
• CD1.1.4 Identify and emphasize distinguishing
natural features that strengthen Santa Cruz’s visual
image (i.e., open space, Monterey Bay).
• CD1.4 Ensure that development adjacent to open
space lands maintains visual and physical
connections to that open space. Cf. LU3.11, PR3.3.
• CD4.3.3 Protect existing significant vegetation and
landscaping that provides scenic value along with
wildlife habitat and forage. Cf. CC3.3.6, and NRC2.1,

2.2, 2.4, and 6.3.

Y

35.1.38 3
General Plan Policies in Support of New FY 2026 CIP Projects # PROJECT DEPT
CIP
PG
#
RELATED GP 2030 GOALS, POLICIES, &

ACTIONS
Y/
N
• CD5.1 Create a well connected street and pedestrian
network. Cf. M4.1, M4.2, CC8.4, PR4.1.2.
• LU3.11 Protect open spaces that provide scenic,
recreational, educational, and environmental
benefits. Cf. CD1.4, PR3.3.
• Goal M4 A citywide interconnected system of safe,
inviting, and accessible pedestrian ways and
bikeways
• M4.1 Enable and encourage walking in Santa Cruz.

Cf. CD5.1, CC8.4, PR4.1.2.
• Goal PR1 Ample, accessible, safe, and wellmaintained parks, open space, and active recreational facilities
• PR1.1 Provide and manage a system of parks and
recreation related facilities that serve the needs of
residents and visitors.
• PR1.4 Encourage recreational activities in
appropriate public spaces.
• PR1.6.1 Maintain and enhance access for vehicles,
transit, bicycles, and pedestrians.
• PR1.11 Improve the scenic and recreational value of
the Riverfront.
• PR3.3 Protect, maintain, and enhance publicly
accessible coastal and open space areas. Cf. CD1.4,
LU3.11.
• PR4.1.1 Provide trails for a range of uses
• PR4.2 Provide and maintain trails within parks and
appropriate open space areas. Cf. NRC1.1.2.

35.1.39 4
General Plan Policies in Support of New FY 2026 CIP Projects # PROJECT DEPT
CIP
PG
#
RELATED GP 2030 GOALS, POLICIES, &

ACTIONS
Y/
N
• PR4.2.1 Use public or quasi-publicly-owned lands for
trails.
• NRC1.1 Protect the city’s river and wetland areas
while increasing and enhancing public access where
appropriate.
• NRC1.1.2 Where consistent with riparian and
wetland protection, provide actual or visual access
of a low-impact nature. Cf. PR4.2. Examples include
unpaved narrow trails, boardwalks, and vista points.
• NRC1.3 Encourage the restoration and
enhancement of existing riparian corridors,
wetlands, and water resources.
5 Poets Park Playground Renovation: Demolish
and rebuild playground with new features.

Parks &
Rec
17 • Goal PR1 Ample, accessible, safe, and wellmaintained parks, open space, and active recreational facilities.
• PR1.1 Provide and manage a system of parks and
recreation related facilities that serve the needs of
residents and visitors.
• PR1.1.4 Plan parks and recreation facilities adequate for the city’s recreational needs, activities, and
programs. Cf. HA2.1, 2.2 and 3.3; ED1.1.4 and 6.9.2;
CC8.3.8; PR 2.1 and 2.2.4.
• PR1.6 Ensure that parks and recreation facilities are accessible to all.

Y
6 Bay-West Cliff Intersection Improvements: The
Beach/SOLA Plan, and subsequently the
General Plan identified traffic circulation
improvements at Bay/West Cliff to reduce
Public
Works
27 • M1.2.2 Maintain street access to neighborhoods
through the Capital Improvements Program.
• Goal M3 A safe, efficient, and adaptive road system
Y

35.1.40 5
General Plan Policies in Support of New FY 2026 CIP Projects # PROJECT DEPT
CIP
PG
#
RELATED GP 2030 GOALS, POLICIES, &

ACTIONS
Y/
N
congestion and improve safety. This is a Traffic
Impact Fee intersection and mitigation for the
General Plan buildout where a miniroundabout is contemplated if right-of-way can be acquired from adjacent land.
• M3.2.4 Improve traffic safety and flow. Ways to do
this include installing and maintaining traffic signs,
pavement markings, and median improvements.
• M3.3.2 Improve access along the Visitor/Beach Area
travel corridors through coordinated signs and
street naming, protected turn lanes, remote
parking/shuttle programs, and other strategies. Cf.

PR1.6.3.
7 Laurel Street Sidewalk: Construct sidewalks on
Laurel Street between King and Escalona
where no sidewalk currently exists. Funded
from the 2023 AHSC Grant. Soft costs are
programmed forFY26, construction in FY27.

Public
Works
46 • M1.2 Create livable streets. “Livable streets”
support the intent of Section 65302(b) of the
California Government Code to create “complete
streets” planned, designed, operated, and
maintained to provide safe mobility for all users,
including “bicyclists, children, persons with
disabilities, motorists, movers of commercial goods,
pedestrians, users of public transportation, and
seniors.”
• M1.4 Ensure that sidewalks, transit centers, and
major transit stops are conveniently located, usable,
and accessible to all. Cf. PR1.6.3.
• Goal M4 A citywide interconnected system of safe,
inviting, and accessible pedestrian ways and
bikeways
• M4.1 Enable and encourage walking in Santa Cruz.

Cf. CD5.1, CC8.4, PR4.1.2.
• M4.1.1 Update and implement the Pedestrian
Master Plan for development of a complete,
continuous, and structurally adequate system of
Y

35.1.41 6
General Plan Policies in Support of New FY 2026 CIP Projects # PROJECT DEPT
CIP
PG
#
RELATED GP 2030 GOALS, POLICIES, &

ACTIONS
Y/
N
pedestrian paths and walkways. M4.1.2 Include and
address sidewalk improvements in the Capital
Improvements Program.
• M4.1.8 Remove or reduce obstructions and sidewalk
tripping hazards, ensure accessibility to the
physically disabled and elderly, and improve
amenities along existing and potential pedestrian
paths and walkways.
8 Main Beach Shorelines Final Design and
Implementation: Through this project, the City
of Santa Cruz will develop living shoreline
designs to 100%, complete environmental
review and permitting, implement the living
shoreline project, and develop monitoring,
operational and maintenance plans, and
agreements for the Main Beach/San Lorenzo
Rivermouth.

Public
Works
47 • Goal NRC4 Effective leadership and action in
reducing and responding to global warming
• NRC4.4 Take early action on significant and probable
global warming land use and development issues,
including those that might arise after 2030.
• NRC4.5 Minimize impacts of future sea level rise.
• NRC6.1 Manage and enhance open space and the
coastline. Cf. CD1.1.1.

Y
9 Riverwalk Rehab Bike/Ped Scale Lighting:

Rehabilitate 2000LF of Riverwalk and install
additional bike/pedestrian scale lighting to
match other areas of Riverwalk. Funded from
the 2023 AHSC Grant. Soft costs are
programmed for FY26, construction in FY27
Public
Works
52 • Goal CC 7 A safe and secure community.
• Goal PR1 Ample, accessible, safe, and wellmaintained parks, open space, and active recreational facilities.
• PR1.5 Provide a safe and secure environment in City
parks, open space areas, and facilities. Cf. CC7.1,
CC7.4.
• PR1.6 Ensure that parks and recreation facilities are accessible to all.
• PR1.6.1 Maintain and enhance access for vehicles,
transit, bicycles, and pedestrians.

Y

35.1.42 7
General Plan Policies in Support of New FY 2026 CIP Projects # PROJECT DEPT
CIP
PG
#
RELATED GP 2030 GOALS, POLICIES, &

ACTIONS
Y/
N
• Goal M4 A citywide interconnected system of safe,
inviting, and accessible pedestrian ways and
bikeways
• M4.5 Support pedestrian and bicycle safety
improvements.
• ED1.2 Ensure that Santa Cruz remains an attractive,
safe, and welcoming city for visitors.
10 Trevethan Storm Drain – Phase 2: Storm Drain
project to alleviate flooding on Trevethan Ave
with the installation of approximately 1,200
linear feet of new storm drain on Trevethan
between Melrose Ave and Fairmont Ave.

Public
Works
56 • Goal CC 5 A sustainable and efficient stormwater
system
• HZ6.4 Avoid or reduce the potential for life loss,
injury, and property and economic damage from
flooding.
• HZ6.4.5 Continue to reduce flooding hazards in
areas with flood potential.

Y
11 Acquisition of 877 Cedar St Suites 100-101:

Acquisition and related costs of 877 Cedar
Street Suites 100-101 (APNs 005-072-47 and -
50). Provides City office space and reduces
leasing costs. Funded by the City Public Trust
with an advance from the Economic
Development Trust Fund, to be repaid from
future rent and other revenues within five
years. This project was started and completed
in 2025 but was not in the FY2025 CIP and is
being analyzed now.

Economic
Develop
ment and
Housing
117 • Goal CC2 Comprehensive community facilities and
services
• CC2.1 Provide community services and facilities in
keeping with the needs of a growing and diverse
population. Cf. CD5.3, LU4.3.

Y

35.1.43 35.1.44

35.1.45 35.1.46

35.1.47 35.1.48

35.1.49 FY 2026 Budget
Adoption
Agenda:
- Feedback on the Proposed Budget Incorporated into the Adopted Budget
- Adopted Budget Recommendations
FY 2026 BUDGET ADOPTION | CITY COUNCIL PRESENTATION

35.1.50 Incorporating Feedback
From Budget Hearings
FY 2026 BUDGET ADOPTION | CITY COUNCIL PRESENTATION
June 10, 2025
Citywide fees and the degree to which
they recover costs
Citywide median beautification
Ocean St. Beautification
A Vibrant, Healthy, and Resilient Community for All

35.1.51 Proposed Budget
FY 2026 BUDGET ADOPTION | CITY COUNCIL PRESENTATION
May 27, 2025
$533M $266 M
$533 M
$159 M
All Funds:
includes
Capital and
Operating
Budgets
Enterprise
Funds:
includes Capital
and Operating
Budgets
General Fund
Operating
Budget

35.1.52 Adopted Budget
FY 2026 BUDGET ADOPTION | CITY COUNCIL PRESENTATION
May 27, 2025
$534M $266 M
$534 M
$159 M
All Funds:
includes
Capital and
Operating
Budgets
Enterprise
Funds:
includes Capital
and Operating
Budgets
General Fund
Operating
Budget

35.1.53 Recommendation
Item 35.1
Adopt the Fiscal Year (FY) 2026 Budget, including the Capital Investment Program (CIP), effective July 1, 2025; authorize the City Manager to allocate within the applicable funds the FY 2026 Schedule of Administrative Budget Changes to the appropriate accounting classification; and approve related and applicable transfers in/out between funds; and authorize the Finance Director to create additional appropriations to provide for commitments carried over from the prior fiscal year, including contract and purchase order encumbrances and unexpended project balances, so long as there is a sufficient fund balance to finance these commitments; Approve the CIP project exclusions from the Public Art transfer calculation for FY 2026; and Accept the Water Commission’s recommendations regarding the Water Department’s FY 2026 Operating and Capital Investment Program (CIP)
Item 35.2
Adopt the proposed amendments to the City of Santa Cruz Personnel Complement and Classification and Compensation Plans.

FY 2026 BUDGET ADOPTION | CITY COUNCIL PRESENTATION
June 10, 2025

35.1.54 City Council

AGENDA REPORT
DATE: 05/22/2025
AGENDA OF: 06/10/2025
DEPARTMENT: Human Resources
SUBJECT: Resolution Amending the City of Santa Cruz Personnel Complement and Classification and Compensation Plans for Various Departments (HR) LOCATION: Citywide
RECOMMENDATION: Motion to adopt a resolution amending the City of Santa Cruz Personnel Complement and Classification and Compensation Plans for - City Manager’s Office, Economic Development and Housing, Finance, Fire, Human Resources, Information Technology, Library, Parks and Recreation, Police, Public Works, and Water.

Any funding approved by the Council will not be implemented until the required meet and confer process is completed in accordance with City obligations under the MMBA and before any contract returns to City Council in open session.

BACKGROUND: Amendments related to City classifications are a standard part of the City’s annual budget process. City departments with staffing and position recommendations that change the number of authorized full-time equivalent (FTE) positions in the City’s position listing must be approved by City Council.

DISCUSSION: Departments have determined, through careful analysis and with the assistance of the Human Resources Department that the recommendations listed on the attached “Personnel Profile” will improve their operational functioning. Each deletion and addition include varying personnel cost allocations to the General Fund, Enterprise, and other funds which are identified in the attached HR Resolution. A description of these position changes is reflected in the attached document “Personnel Profile.” Other changes include corrections related to compaction as defined by the existing Memorandum of Understanding between the City and the Operating Engineers Local #3.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION: Not applicable. Does not constitute a project under CEQA.

HEALTH IN ALL POLICIES (HiAP): The proposed classification and staffing amendments support the City’s commitment to Health in All Policies by enhancing public health and equity.

Operational improvements enabled by these changes ensure departments are adequately staffed

35.2.1 to deliver safe and effective services, promoting healthier work environments and community outcomes. The realignment of positions and funding supports long-term organizational sustainability and responsible fiscal stewardship. Additionally, updates related to job compaction and classification corrections advance internal equity and uphold fair labor practices, reinforcing the City’s goal of an inclusive and thriving workforce.

FISCAL IMPACT:

1. The recommendation in this report impacts the General Fund: Yes

2. This recommendation requires a budget adjustment: No

3. The recommendation creates an on-going expenditure commitment: Yes FISCAL IMPACT DESCRIPTION: The fiscal impact of this report has been incorporated into the FY 2026 budget presentation and includes adjustments to both the General Fund and various Enterprise Funds. Many of the proposed additions are offset by the deletion of vacant positions that, after thorough operational review, were determined to no longer meet current service demands.

Prepared and Submitted By:

Sara De Leon
HR Director
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. RESOLUTION.DOC

35.2.2 RESOLUTION NO. NS-XX,XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ

AMENDING THE PERSONNEL COMPLEMENT AND CLASSIFICATION AND COMPENSATION PLANS AND THE FY 2026 BUDGET – CITY MANAGER’S OFFICE,

ECONOMIC DEVELOPMENT AND HOUSING, FINANCE, FIRE, HUMAN RESOURCES,

INFORMATION TECHNOLOGY, LIBRARY, PARKS AND RECREATION, POLICE,

PUBLIC WORKS, AND WATER DEPARTMENT
WHEREAS, staff has recommended certain modifications to the Classification and Compensation Plans.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Cruz as follows:

Effective the pay period of June 10, 2024 the city of Santa Cruz Classification and Compensation Plan be modified to:

Activity Classification No. and Title Salary (New
Classifications and
Changes)
CITY MANAGER’S
OFFICE
Position Appointment
Modification
From: Special
Appointment
1217 852 - Project Manager II (1.0 FTE)
To: Regular
Appointment
1217 852 - Project Manager II (1.0 FTE)

FINANCE
Delete Position:
701-003
1241 Accountant II (1.0 FTE)
Delete Position:
107-020
7821 Administrative Assistant III (1.0 FTE)
FIRE
Add Position: 2204 Marine Safety Officer (1.0 FTE)
Add Position: 2204 Marine Safety Officer (1.0 FTE)
HUMAN

RESOURCES
Delete Position:
106-067
1230 Administrative Assistant II (1.0 FTE)

35.2.3 RESOLUTION NO. NS-XX,XXX
Activity Classification No. and Title Salary (New
Classifications and
Changes)

INFORMATION

TECHNOLOGY
New Position and
Classification
7102 TBD - GIS Analyst (1.0 FTE) $8,689—$11,200/mo.

Title Change Only
From: 705/706 - Programmer Analyst I/II
To: 705/706 - IT Programmer Analyst I/II

LIBRARY
Add Position:

New
3601 350 – Facilities Maintenance
Supervisor (1.0 FTE)
Delete Position:
330-011
3601 330 - Field Services Crew Leader (1.0
FTE)
Add Position:

New
3601 750 - Librarian I/II, Teen Center (1.0
FTE)
Delete Position:
831-002
3601 831 – Librarian III (1.0 FTE)
Add Position: 3601 750 – Librarian I/II, Youth Services (1.0 FTE)
Delete Position:
285-006
3601 286 - Library Information Specialist
(1.0 FTE)
Delete Position:
283-068
3601 283 – Library Assistant II (0.5 FTE)
Change Position:

From: 283-084 3601 283 – Library Assistant II (0.5 FTE) To: 283-084 3601 283 - Library Assistant II (1.0 FTE)

PARKS &

RECREATION
Add Classification
Only:

New
3101 TBD – Recreation Specialist $4201—$5911/mo.

POLICE
Delete Position:
107-009
2101 Administrative Assistant III (1.0)

35.2.4 RESOLUTION NO. NS-XX,XXX
Activity Classification No. and Title Salary (New
Classifications and
Changes)

PUBLIC WORKS
Add Position:

New
7303 Senior Professional Engineer (1.0
FTE)
Add Position:

New
7831 139 - Equipment Service Worker (1.0
FTE)
Add Position:

New
7302 191 - Solid Waste Worker (1.0 FTE)
Administrative
Correction
From: 206 – Wastewater Plant Operator I $4,555—$6,410/mo.

To: 206 – Wastewater Plan Operator I $5,010—$7,051/mo.

WATER
Add Position: 7102 716 - Engineering Associate (1.0 FTE) Delete Position:
340-001
7106 340 - Water Facilities Field Supervisor
(1.0 FTE)
Delete Position and
Classification:
7103 212 - Water Meter Technician (1.0
FTE)
Delete Position and
Classification:
839-001
7101 839 - Water Chief Financial Officer
(1.0 FTE)
Add Position:

New
7101 704 - Assistant Finance Director (1.0
FTE)
Effective the pay period of December 7, 2024 the city of Santa Cruz Compensation Plan be modified to:

Activity Classification No. and Title Salary (New
Classifications and
Changes)

ECONOMIC

DEVELOPMENT
& HOUSING
Compaction
Correction
From: 5401 836 - Housing and Community
Development Manager (1.0 FTE)
$11,747—$15,142/mo.

To: 3.7%
Compaction
Increase
5401 836 - Housing and Community
Development Manager (1.0 FTE)
$12,182—$15,703/mo.

35.2.5 RESOLUTION NO. NS-XX,XXX
PASSED AND ADOPTED this 10th day of June, 2025 by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: ______________________________
Fred Keeley, Mayor
ATTEST: _________________________________
Bonnie Bush, City Clerk Administrator

35.2.6