Scotts Valley avoids layoffs

The city of Scotts Valley has escaped layoffs — for now — despite lower revenues to the general fund after the half-cent Measure C sales tax dropped to a quarter-cent last year.
As of June 1, the city has about $2.7 million saved from the Measure C sales tax that voters approved in 2005 as a stopgap to declining city revenues.
“It remains to be seen how long we’ll be able to stave off some more drastic measures that could be coming down the pike in the next two to three years,” Mayor Randy Johnson said at the May 6 council meeting.
The city of Santa Cruz has a permanent half-cent sales tax, Watsonville has a permanent quarter-cent tax and Capitola voters extended their quarter-cent sales tax through 2017.
Scotts Valley’s Measure C is set to expire March 31, 2011, but the city won a lawsuit with Santa Cruz County over property taxes that will help make up the deficit.
The city’s general fund revenue in 2007 was $8.42 million and increased to $8.64 million in 2008. However, with the quarter-cent sales tax decrease, revenue is projected to drop to $8.11 million in 2009. The city is budgeting $7.58 million in 2010, a half-million-dollar drop.
The biggest projected decrease in the 2008-09 revenue comes from a $140,626 drop in tax revenue and $143,698 drop in revenue from charges for services.
“It’s not a heartening report, but it’s not as dire as some people have had to endure in some other entities,” Johnson said May 6.
For now, the city’s fiscally conservative approach has kept layoffs off the table.
With expected revenues down, the city has also budgeted to lower its expenses by $163,853 in 2009.
The city has budgeted to spend less from the general fund, lowering services and supply costs to help offset the costs of increasing salary and benefits packages.
Steve Ando is also serving as the city manager and finance director, saving the city from hiring a full-time finance director.
The City Council discussed the senior center, community center, wastewater plant and recycling budgets at its May 20 meeting.
The council will look to approve the budget at its June 17 meeting before the fiscal year ends June 30.