Millions in cuts on Santa Cruz City Council agenda
SANTA CRUZ >> City leaders will vote Thursday on nearly $5.3 million in proposed spending cutbacks during a special meeting designed to update a copy-and-paste budget approved as a fiscal placeholder in July.
The Santa Cruz City Council’s budget update is designed to stem the city from emptying out its cash reserves by mid-2022, as Santa Cruz braces for an estimated four years of recession born in the coronavirus pandemic. Hits this year to the city’s sales tax, transient occupancy tax, property transfer tax, admission taxes, parking taxes, permits, fees and other fines are primarily driving the latest city actions. Not all of the city’s financial struggles, however, can be linked to CO
VID-19.
“It is important to note that even without a recession, the City was already facing a structural budget challenges due to rising personnel and retirement costs,” a city Finance Department report to the council reads. “The COVID19 recession has exacerbated what the City was facing.”
Proposed Thursday are a series of department spending cuts, more than a quarter of which are one-time actions. On the table is the elimination of 25 full-time general fund staff positions, offset with the addition of six new employees back to the Police Department. Elsewhere, departments expected to take the biggest funding cuts are Police and Parks and Recreation, losing $1.7 million and $1.1 million respectively. Other reductions include:
• Public Work s by $600,000,
• Planning and Community Development by $514,000
• City Manager/City Att or ney/ Cit y C lerk / Cit y Council and community programs by $360,000,
• Economic Development by $347,000,
• Fire Department by $295,000.
A council budget subcommittee has voiced hesitations about two proposals — the police plan to eliminate 12 rangers and replace them with six community service officers — and big cuts to the community services funding, according to city administrators. Some of the planned spending reduction in grants the city distributes to community nonprofits will be backfilled with federal CARES Act funding, City Manager Martín Bernal said during a budget preview session with the media Tuesday. Bernal added that the planned elimination of the city’s 12- member ranger force, currently overseen by the Police Department, would offer more operational flexibility when the department replaced the division with additional community service officers.
Unarmed, non- sworn community service officers “have more capabilities and flexibility to be deployed for a multitude of community response situations,” according to the city’s budget report. The rangers were moved from the city Parks and Recreation Department over two years in 2018 and 2019 to provide enhanced law enforcement coordination, oversight and training, officials said at the time.
“A lot of folks who are rangers, they want to be in that profession to be what most people think about as rangers,” Bernal said. “A public safety function is just a small component or not the biggest component. But, unfortunately, the case here in our city, it just tends to be the biggest need. So, I think it would just be a better match for what we’re having to respond to in terms of what they do.”
To begin replenishing the city’s general fund reserves, the city is planning to halt an annual payment of transient occupancy taxes — worth about $1.1 million this year — into its Economic Development Trust Fund, and reduce its workers’ compensation fund reserves, amounting to about $1.9 million returned to the general fund for one year. For as many as the next five years, the scheduled payment into the Economic Development Trust Fund, which assists the city with such needs as affordable housing development projects, would be reduced by half, to about $500,000 a year.
In other cost- sav ing measures, city officials already have implemented a hiring freeze and negotiated furloughs with most employee bargaining units and executive employees, equivalent to a 10% reduction to city personnel costs worth an estimated $ 5.7 million. Another 26 employees — 11 from the Public Works Department alone — pursued an early retirement incentive program, resulting in a nearly $1.8 million savings.
Bernal said Tuesday that the public budget meeting was delayed more than two weeks in order for new city Finance Director Kim Krause to review final spending years for the fiscal year ending June 30, rather than rely on projections.