Santa Cruz Council hears proposed $170 million FY2027 budget, directs follow-ups on wellbeing, sidewalks and safety

The Santa Cruz City Council on May 26 heard a detailed presentation of the proposed fiscal year 2027 budget and instructed staff to return with multiple follow-up plans ahead of final adoption.

Finance Director Elizabeth Cabbell said the proposed general fund is balanced at about $170 million and that personnel costs make up roughly 59% of the operating budget. “We are presenting and proposing a balanced budget for fiscal year 27 of 170 million,” she told the council during the presentation.

The proposal emphasizes three priorities: investing in city employees, advancing major community projects and modernizing systems. Council and staff highlighted roughly $70 million in new capital investments proposed for 2027, including water department projects, public-works improvements and Wharf resilience work funded largely by grants.

Council members praised the clarity of the packet and the outreach behind the transportation and emergency planning work. But multiple members and public speakers urged the council to use additional one-time resources and the reinstated general‑fund paving transfer to accelerate neighborhood sidewalk repairs and quick-build traffic‑safety projects.

In a package of directions adopted unanimously, the council asked staff to:
- Return in September 2026 with a staffing plan and funding options to stand up an Office of Well‑Being and to include any recommended FY27 adjustments.
- Ensure departmental performance measures align with the council’s strategic plan and an emerging community indicators dashboard starting in FY28.
- Return in August 2026 with options to address specific safety concerns (for example, crosswalk beacons and intersection treatments) and to explore prioritizing the reinstated $500,000 general‑fund transfer to paving for transport‑safety projects.
- Report back on fee reductions or waivers that could support the Homeless Garden project without creating direct budgetary expenses.

On revenue assumptions, Cabbell noted that taxes (property and sales) and charges for services make up the largest shares of general‑fund revenue; staff said they used conservative forecasts and will revisit assumptions at mid‑year. Several council members asked staff to present updated revenue and expense projections if market or geopolitical events shift costs such as fuel or sales tax receipts.

The council did not adopt the budget on May 26; staff will return with the requested analyses and the council plans final action in June. The meeting packet and complete budget documents are posted on the city website.