The financial plan Scotts Valley City Manager Mali LaGoe introduced to City Council on June 7 wasn’t very flashy and acknowledged the precarious situation the community finds itself in post-pandemic, as American banks have failed and major changes have unfolded in the local economic landscape.
The $43 million budget ($28 million in operating expenditures plus $14.8 million in capital expenditures) referenced major blows, such as Salesforce nixing its multimillion-dollar deal with wellness retreat center 1440 Multiversity, helmet company Giro/Bell announcing it would close its offices here in the fall and Zero Motorcycles slashing a quarter of its workforce in town; it also touched on positive news, like Ambient Photonics and Poly Inc. taking up shop in Scotts Valley.
“Tonight we are here presenting the proposed budget for your consideration and feedback,” LaGoe said, noting the City is now using the OpenGov program to manage its finances. “Part of the process of transitioning from one software system to another was an opportunity to take a deep dive.”
LaGoe described some of the steps she’s been taking to make the government a leaner machine—moving to Microsoft Teams telephones, sharing resources across departments and leasing vehicles instead of buying.
The City also had to make some difficult decisions about which capital items to put on hold, such as the heating and cooling system at City Hall and a Brook Knoll facility renovation.
Scotts Valley is beginning to keep a closer eye on telecommunications companies it believes may owe it money for cell tower site leases.
“Really, the road ahead is we’re facing an annual operating deficit,” LaGoe said. “It’s not huge. But it’s there.”
Focusing keeping City Hall employees happy will be important in the days ahead, she added.
“If we can’t retain staff to finish projects, we can’t move projects forward,” she said. “We’re going to need the community’s support to achieve these goals. And we’re really focused on the future.”
A lynchpin in Scotts Valley’s strategy is the Measure Z sales tax, which passed in March 2020 and now accounts for $4.6 million of City revenue.
For now at least, the City is assuming it will be able to renew the tax once it expires in 2032.
Stephanie Hill, Scotts Valley’s administrative services director, said property tax revenues were up by a little over $200,000 and salaries and benefits decreased by $2 million.
“We’re seeing that $5 million deficit in this current year that’s coming up,” she said. “Then, it kind of levels out.”
