Erasing COVID’s ravages: 3 takeaways from Scotts Valley’s budget for 2021-22
Getting Scotts Valley back on track is the theme of the city’s draft budget, with a pre-COVID sales tax providing wind in the city’s sails as it aims to boost staffing and invest in infrastructure.
Recovering from the pandemic recession and disastrous 2020 wildfires is top of mind as the Scotts Valley City Council prepares to vote on a draft of its budget for the next fiscal year, which runs through June 2022.
A new local sales tax passed pre-COVID kept the city from having to make much deeper cuts than otherwise would have been necessary, and now the council is able to focus more on restoring staffing and services and investing in infrastructure.
This year’s budget provides a crucial roadmap as the city exits the pandemic recession and looks to get back on stable footing over the next several years.
Here are three key takeaways from the draft budget, which will be put to a final vote on June 16:
1. Measure Z sales tax, a ‘lifeboat’ during COVID-19, will help recovery
Scotts Valley, like other municipalities in the region, was deeply affected by the COVID-19 pandemic and the CZU Lightning Complex fires of 2020. City leaders laid off parks and recreation staff, froze already-vacant positions and cut programs and services residents rely upon.
“The last 15 months were so hard, adjusting to the pandemic, the fires, evacuations,” Mayor Derek Timm said. “We had to freeze so many positions. We were in a mode of retrenching and preparing for some really hard financial times. And a lot of that proved very true.”
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But Scotts Valley is set up to rebound more quickly than many other Santa Cruz County cities in part because Scotts Valley residents agreed to a new local sales tax, Measure Z, before the pandemic — meaning more money coming in to help get the city back on solid ground.
“That turned into a lifeboat for us to survive the pandemic without having to make extreme cuts,” Timm said of Measure Z, noting that city council cut about 10% of the budget last year instead of confronting “a much deeper, deeper cut.”
Still, with sales and hotel tax revenues not projected to fully recover until 2024, the city aims draw $977,000 from its reserves in the next fiscal year to offset pandemic impacts — and expects the trend of leaning on those reserves to continue for several more years beyond that.
Not included in the draft budget, however, was $2.2 million in federal stimulus funds Scotts Valley is expecting between this summer and next, which the city council must also decide how to spend and is subject to federal guidelines.
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2. Beefing up staff and services a top priority
With Scotts Valley’s day-to-day city operations in the hands of what Timm called a “skeleton staff” after the COVID-19 crisis piled layoffs on top of years of belt-tightening, this year’s draft budget aims to restore some of the positions and services the city has lost through the years. Eight frozen or vacant positions would be filled and four new positions would be added — in public works, administration and police.
“From a face-to-face standpoint, people are going to be able to have their issues resolved in a timely manner,” Timm said.
Recreation services halted during the pandemic would also be partly resumed with the hiring of two recreation leader/site directors under the proposed budget. To help boost program offerings in the nearer term, Council Member Jack Dilles said via email that city leaders are looking at partnerships with nonprofit groups or outside operators.
“As an example, this summer the city has teamed with the Boys and Girls Clubs of Santa Cruz County to expand summer camp programs in Scotts Valley,” Dilles wrote.
However, the recreation department will need an infusion of cash from the general fund — $541,000 next year and $150,000 every year after — to rebuild the rainy day fund that has been drained by the pandemic recession, according to the draft budget.
Scotts Valley Police Department is being similarly restaffed, with an emergency dispatch clerk position being unfrozen and a new, grant-funded police officer position being added to prevent youth tobacco use at the city’s high school.
At city hall, the now-empty front desk will be staffed by a new receptionist, and City Manager Tina Friend will gain an assistant city manager to provide “additional capacity for research, analysis and special projects management.”
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3. Infrastructure investments crucial to long-term stability
The draft budget also builds in infrastructure upgrades this year and over the next five to 10 years.
Scotts Valley’s wastewater collection and treatment plant in particular “has major improvements that are needed,” Council Member Donna Lind said, “so we’re also budgeting and looking at updating those rates.”
In the next year, wastewater rates will rise by 9% and wastewater spending would increase by 51.5% — approximately $1.7 million — to account for capital projects, service and supply improvements. Some $7.2 million in major improvements are planned for the city’s wastewater between this year and 2026 — and there’s a new sewer master plan to tackle down the road, too.
The city will need to borrow $4.5 million in the future to fund those projects, according to budget documents.