Pedestrians cross Main Street near the Watsonville Civic Plaza in downtown Watsonville. (Dan Coyro — Santa Cruz Sentinel file)
WATSONVILLE — Airport fees, housing fund expenditures and street maintenance are among the items being proposed for the city of Watsonville’s biennial budget for the next two fiscal years, which will go before the City Council for discussion at its Tuesday meeting.
The overview will act as a prelude before the annual budget goes to the council for adoption at its June 27 meeting.
The recommendations cover the fiscal years 2023-24 and 2024-25. According to a staff report by City Manager Rene Mendez, budget appropriations for the 2023-24 fiscal year are more than $248 million, an increase of more than $37 million from the 2022-23 fiscal year.
“This is a balanced budget that maintains Council approved reserves and leverages funding from the American Rescue Plan Act to support improvements in streets, economic development, Ramsay Park, Nature Center and opportunities for our citizens to obtain valuable work experience, just to name a few,” he wrote. “We continue transitioning with incremental and measured strategies to maximize City resources and optimize services to the community. Furthermore, with the passage of Measure R last year, this will allow us to increase investments in our parks, streets, libraries and new or enhanced programs to further support our community.”
Mendez wrote that the city has avoided structural budget issues and is expecting the General Fund to grow in both its operating expenditures and revenues. Departments are largely maintaining current funding levels, except for areas such as salaries and benefits, although two new utility worker positions have been added.
“This increase in staff will enhance our capacity to address the City Council’s priority of street maintenance and ensure efficient operations,” he wrote.
According to the report, sales taxes make up 33% of the General Fund, property taxes make up 25%, fines and fees make up 15%, other taxes make up 12%, transfers make up 9%, use of money and property make up 6% and other revenues make up 2%.
Mendez also wrote that the city has budgeted to use the remainder of its American Rescue Plan Act funds. The federal bill was passed in 2021 to help municipalities struggling in the wake of the COVID-19 pandemic, and Watsonville received approximately $18.8 million. The funds are required to be spent by Dec. 31, 2026, but Mendez wrote that the city is seeking to have them fully expended two years earlier, and the remaining funds would primarily be used to finance street improvements, economic development to increase revenues, work experience and the renovation of Ramsay Park and the Nature Center.
Two large recommended projects to be funded through the Wastewater Fund are the replacement of the main switchgear and energy recovery electrical system at the Wastewater Treatment Facility, valued at $4 million and $10 million respectively for the 2024-25 fiscal year.
“The main electrical switchgear and backup generation system that provides power and emergency backup power to all equipment in the wastewater treatment plant is nearing the end of its useful life,” Mendez wrote. “This critical equipment was identified in the Wastewater Treatment Facility (WWTF) Hazard Assessment as vulnerable to flood and seismic hazards. This project will replace this critical equipment and mitigate future flood or seismic hazards so the WWTF will continue to provide safe and effective wastewater treatment for the communities it serves.”
Mendez wrote that several improvements would also need to be made to the sewer pump stations, sewer lines, reinforcement of the river levee next to the plant and other upgrades within the plant.
As part of the budget adoption, the council will be required to approve a resolution adopting various fees and rates at the Watsonville Municipal Airport, which are periodically updated based on inflation, comparison with other airports, limits set by the Federal Aviation Administration, operational revenue requirements and other factors. The last time the airport’s fees were adjusted was two years ago, Mendez wrote.
In other business, the council will vote on the 2023-25 Strategic Plan, consider a list of transportation projects to be funded by Measure D and Senate Bill 1 and consider the annual military equipment report for the Police Department.
The council will meet at 4:30 p.m. Tuesday in the Council Chambers on the top floor of the Watsonville Civic Plaza, 275 Main St., Watsonville.
