Quick Take
The Watsonville City Council is set to vote Tuesday on a two-year plan to cut 14 vacant city jobs and hike fees at some public facilities to narrowly avoid a deficit in its $309 million budget.
The Watsonville City Council is set to vote Tuesday on a two-year plan to permanently cut 14 vacant city jobs and hike fees at public facilities in order to narrowly avoid a budget deficit.
To balance the city’s $309 million budget for the 2025-26 fiscal year, which begins July 1, City Manager Tamara Vides ordered a 1% cut to all city departments funded by taxpayer dollars — known as the city’s general revenue.
To avoid a deficit this year, Marissa Duran, administrative services director for the city, proposes cutting 14 vacant staff positions across eight departments, including 11 funded by general revenues and three funded by one-time grants that have expired, Duran told a June 10 city council meeting. Some of those positions include assistant city manager, assistant finance director and fire inspector. The police department would lose four positions, which included a vacant police officer job.
All 14 positions would be removed permanently under this budget plan, said Duran, noting that the city has paused hiring temporarily. Duran did not specify when the hiring freeze began.
The city is also proposing to bring in more money by increasing hourly rental fees for city-owned facilities, such as the Veterans Memorial Building, Ramsay Park Family Center and the Watsonville Youth Center, by at least $5 to $10 per hour depending on the facility. The Watsonville Municipal Airport is also expected to increase some of its hangar rental and storage fees to bring more revenue to the city.
Like other cities in Santa Cruz County, Watsonville is not facing a financial crisis for the coming fiscal year, but is forecasting budget troubles in future years, Duran said. Watsonville’s biennial proposed budget plan, published last month, projected a deficit in its budget starting at $320,000 in fiscal year 2027-28 and possibly growing to more than $1.1 million by 2029-30.
“Our expenditures are projected to grow a little faster, and it may result in a structural deficit without us doing proper, continuing monitoring,” Duran said. She noted there might be a slowdown in the top source of general fund revenue — sales tax — because people will be buying less as costs increase. Revenue from voter-passed tax incentives is expected to be a steady source of income for the city.
The city is also keeping an eye on the impact of potential federal funding cuts, said Duran. While it’s not directly affecting the city’s finances, she said the cuts to county government could hurt Watsonville residents.
Despite the proposed cuts, the city is expected to collect $5.4 million in Measure R funding — a half-cent sales tax increase approved by Watsonville voters in 2022 — that will go to city libraries, parks and street projects, said Duran. One of those anticipated projects is a rooftop renovation for the city library on Main Street. Last month, the council also unanimously approved raising $12 million in bond money to help fund renovation projects for Ramsay Park and the downtown city plaza.
Councilmember Jimmy Dutra credits community members for voting on sales tax increases like Measure R to help fund city renovation projects. “I know there’s a lot of doom and gloom around other jurisdictions,” he said. “We do not have to have the stress that other jurisdictions are facing,” he said.
Duran also noted housing projects in the city that are finishing up and will bring in additional property tax revenue, including two projects, on Airport Road and Evan Circle, that were approved last fall. Earlier this year, the city council began to explore the possibility of having a hotel incentive policy, aimed at attracting three- and four-star hotels to the area.
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