A parking meter paybox in Capitola Village.
(Kevin Painchaud/Lookout Santa Cruz)

Capitola City Council approves free Village parking through Christmas Day, restores employees’ pay

The city government’s financial outlook — while worse than last year at this time — has improved to the point that council members restored some spending cuts related to the pandemic.

Holiday shoppers in Capitola Village will be able to park for free in the weeks leading up to Christmas Day to help businesses battered by the COVID-19 economy.

In recent meetings, Capitola City Council members talked through concerns about the dollars the city wouldn’t get on by waiving parking fees. Parking spaces in the village are limited to three-hour stays at a rate of $1.50 an hour. The free parking program will cost the city between $5,000 and $10,000 in lost revenue, according to a staff budget report.

The city also considered a program that would use pre-paid cards that merchants would validate for their shoppers.

But a recommendation from the city’s finance advisory committee helped solidify the decision on Thursday night to open up the parking without any strings attached in order to help bolster struggling small businesses.

And with the possibility of another coronavirus stay-at-home order looking likely, businesses will need all the help they can get, as outdoor dining would be banned and retail stores would be limited to 20% indoor capacity.

In another development, the city government’s financial outlook is improving to the point that council members restored some spending cuts related to the pandemic.

Capitola is projecting a balance of $1.5 million in its general fund — the pot of taxpayer money it taps to fund public safety, public works and other basic city services — at the end of its fiscal year, in June 2021.

Since July, the city has taken in $2.96 million in revenue through sales tax, Transient Occupancy (hotel) tax, parking revenue, recreation and other fees. That’s still less than the $3.28 million taken in around the same time last year, but not as bad as city leaders had forecasted. An extra $124,805 in CARES Act funding also has helped offset coronavirus-related costs.

Those better-than-expected revenues enabled the city to update its budget to include $767,000 of additional expenditures.

Included in that spending plan is filling two vacant police department jobs, securing a $95,000 lifeguard contract for summer 2021, increasing janitorial services, ending 6% coronavirus-related pay cuts and giving 2.25% cost-of-living pay increases for union-represented city employees, among other things. The council also voted to raise members’ own salaries from $500 to $600 per month and allocate $2,500 for council member trainings.

Council members also instructed staff to set aside $400,000 to $600,000 as a COVID-19 “contingency” cushion, should things take a turn for the worse in coming months.