Layoffs, union wrath and an executive resignation kick off Santa Cruz County budget talks
The chaos pouring down from the Trump administration, which has been keen on leveraging federal dollars to impose its priorities on local governments, made it obvious to just about anyone that Santa Cruz County was in for yet another frictious budget negotiation, since about half of the money it spends on services comes through the federal government.
Expectation doesn’t necessarily ease reaction, and the news last week that the county’s largest department, the Health Services Agency, proposed laying off 12 employees, cutting services and slashing more than 74 full-time-equivalent positions from its staff elicited an intense response.
“The cuts will devastate our community and union members,” chapter president Max Olkowski-Laetz wrote in an email to members of SEIU 521, the local labor union representing nearly 2,000 county workers. “… Eliminating frontline staff should not be the solution! Workers are already crunched between high workloads and additional staffing issues.”
On social media, commenters called the move “short-sighted,” and shocking; the union started a petition to gather support for what it’s calling “the Santa Cruz 12” in reference to the 12 employees proposed to be laid off.
The day after news about the layoffs broke, HSA Director Mónica Morales announced her resignation. Despite the timing, it’s unclear whether her abrupt departure is related to the agency’s dire straits.
That’s a lot of turmoil. And yet, none of it is tied to the federal government, the Trump administration’s cuts or the effort by Congress’ conservative majority to restructure national spending. Rather, it’s largely about changes to California’s Medicaid program, known as Medi-Cal, and the formula it uses to reimburse counties for coverable health care costs.
The Trump stuff? The county isn’t likely to have any sense of federal spending cuts or their impacts until midsummer, likely July, when Congress votes on the national budget. Yet, local lawmakers are due to vote on the county budget in June. That means the county’s elected supervisors and department heads will have to negotiate a budget while largely in the dark about federal spending and an increased likelihood that the budget requires major revisions before it goes into effect in October.
Consider what’s happening at the county’s HSA as a largely unrelated preamble to the budgetary challenges ahead, and take whatever declarations officials make about the budget with a boulder of salt. No one can be sure of what’s ahead this summer.
OF NOTE
UC Santa Cruz chancellor joins Trump opposition: More than 530 leaders in higher education have signed a letter opposing “the unprecedented government overreach and political interference now endangering American higher education.” Among the names on the list? UC Santa Cruz Chancellor Cynthia Larive. “We are open to constructive reform and do not oppose legitimate government oversight,” the letter reads. “However, we must oppose undue government intrusion in the lives of those who learn, live, and work on our campuses. We will always seek effective and fair financial practices, but we must reject the coercive use of public research funding.”
What might a countywide fire department consolidation look like? Last week, the Santa Cruz City Council approved an agreement with Scotts Valley Fire District and Central Fire District to study the impacts of a possible regional fire service consolidation. The study comes as Scotts Valley and Central Fire face further financial struggles, highlighted by failed bond measures in 2024 aimed at improving services and facilities. The study will begin later this year.
POINTS FOR PARTICIPATION
City of Santa Cruz Planning Commission to vote on a new Boardwalk ride and a 225-unit Ocean Street development: The ride, according to city documents, is called Vertigo 360, and will stand at a little over 40 feet. You can see the specs here. The Ocean Street residential development, designed by Workbench and to be developed by Oakland-based Riaz Capital, is planned to reach six stories and would replace older office buildings north of Soquel Avenue along one of the city’s main north-to-south thoroughfares. See the project’s plans here. The planning commission will meet Thursday at 7 p.m.
Capitola Planning Commission to choose a wharf build-out plan: City staff is bringing forward seven options for the next phase of the Capitola Wharf construction. The options range from focusing on public space, to creating a permanent structure, fishing areas, vendors and a marketplace. The commission meets Thursday at 6 p.m.
Measure Q Citizens Oversight Advisory Board gets moving: The citizens responsible for recommending how the county spends the estimated $7.3 million raised per year from the Measure Q parcel tax voters approved last fall will meet for the second time on Wednesday, at 5:30 p.m. The board includes people such as City of Santa Cruz planning commissioner Rachel Dann and former city councilmember Sandy Brown.
ONE GREAT READ
Getting to the bottom of perception vs. reality in downtown Santa Cruz – a series by the Lookout Santa Cruz staff
It’s often said that what you see depends on where you sit.
That was apparent during last week’s Santa Cruz City Council meeting, when Councilmembers Scott Newsome and Shebreh Kalantari-Johnson told the public that downtown Santa Cruz was “all momentum” and that the national trend of “dying and fizzling” city centers wasn’t happening here. The city council went on to unanimously approve a downtown stimulus measure that, in part, threatens noncompliant owners of long-vacant storefronts with fines and jail time. The elected officials also learned of a plan for a new downtown police substation to increase officer presence in the neighborhood.
At the same meeting, economic development staff said downtown Santa Cruz had only 19 vacant storefronts, despite the reality for residents and visitors being close to double that number. The city didn’t include sites where there was a prospective tenant, which meant vacancies such as the Logos building, Joe’s Pizza & Subs and the former Alderwood on Walnut Avenue were left off the list.
In this piece from Sunday, my colleague Wallace Baine sets the table for a series of stories Lookout is preparing to publish about downtown Santa Cruz, and all the hopes, realities and perceptions wrapped into this oft-debated neighborhood.
Max Chun also has a piece that digs into perhaps that most hotly debated issue around reality vs. perception: public safety in the downtown core.
If you have any tips, suggestions or story ideas about downtown Santa Cruz, please reach out. I’d love to hear from you.