Dear Friends and Neighbors,
The year is off to a busy start. The Board of Supervisors will review an updated Battery Energy Storage System (BESS) ordinance at tomorrow's meeting, as well as the leading causes of preventable death in the County.
I've summarized 2025 by highlighting some of the big projects that I worked on last year. This is also an opportunity to let me know what you'd like to see me work on in 2026!
The Governor's Budget was released this week. I discuss below why it doesn't work well for counties, particularly when it comes to addressing homelessness.
Finally, another Builder's Remedy project, 3500 Paul Sweet Rd, will be heard by the Planning Commission this Wednesday. Details below.
Best, |
Manu Koenig 1st District Supervisor, Santa Cruz County
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Highlights from Tomorrow's
Board of Supervisors Agenda
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Image: Graph showing leading causes of death in Santa Cruz County and Leading Causes of Premature Death.
Tomorrow the Board of Supervisors will review the Annual Report prepared by the Health Services Agency overviewing the leading causes of illness and death in Santa Cruz County. The report shows that chronic conditions such as Alzheimer’s disease, stroke, and ischemic heart disease remain the leading causes of death overall, primarily affecting older adults.
At the same time, the greatest impact of premature death falls on working-age residents. Drug overdose is identified as the leading cause of Years of Life Lost in the county, followed by alcohol-related deaths, suicide, and road injuries. These trends were already increasing before the COVID-19 pandemic, accelerated during the pandemic, and have continued to rise in the recovery period, particularly for substance-related, mental health, and cardiovascular conditions.
Drug overdose deaths increased by 119% in the decade preceding the pandemic, surged by an additional 83% during the acute pandemic phase, and continued to rise by 55% through 2023.
Parkinson’s Disease (47.0%) and Suicide (36.3%) show significant increases, highlighting rising or emergence of underlying chronic neurological and mental health challenges during this Post-Pandemic Recovery Phase (2021 to 2023).
Road injuries are not to be overlooked as the third leading cause of preventable death. Santa Cruz County is ranked worst in the state for victims killed and injured in bike crashes. This highlights a need to increase investment in safe bike and pedestrian infrastructure.
Overall, these findings underscore the importance of continued collaborative efforts across the prevention continuum, from primary prevention and early intervention to treatment and recovery support services, to address substance use disorder, mental health needs, and chronic disease management for working-age populations throughout the county.
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Image: The Minto Rd neighborhood, as seen from across College Lake. The apple orchard in the foreground has been proposed for a battery energy storage facility, because it is next to a transformer and high capacity power lines. (Photo Credit - Tarmo Hannula/The Pajaronian)
At the November 18, 2025, Board of Supervisors meeting, the Board reviewed the principal components of a proposed Energy Storage Combining District ordinance intended to allow and regulate utility-scale energy storage facilities in the unincorporated county. That discussion followed extensive public outreach, new state safety legislation, and information gathered after the Moss Landing battery fire. The Board provided direction to continue refining the ordinance, emphasize public safety and environmental protection, and prepare draft General Plan and County Code amendments to move the process forward.
During tomorrow's meeting, the Board will consider those refined draft amendments and whether to formally begin environmental review under the California Environmental Quality Act. The proposed framework would allow energy storage facilities only in limited locations near existing electrical substations and would require General Plan and County Code changes before any projects could move forward. The Board will also consider directing staff to seek recommendations from the Agricultural Advisory Commission and the Planning Commission, and to return with regular updates as the work continues through 2026.
This item reflects specific Board feedback from November and includes strengthened safety, environmental, and accountability requirements. These include expanded setbacks from homes and sensitive uses, protections for agricultural land, requirements for best available technology, emergency response planning, financial assurances, and long-term monitoring of air, water, and soil. No projects are being approved at this stage. The focus of the upcoming meeting is whether to use these draft documents as the basis for detailed environmental review and continued public process before the Board considers adoption in the fall of 2026.
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Image: 2025 rolls out, 2026 rolls in.
Below are some of the major things that I worked on last year. I've focused on areas where I had a direct role, rather than listing everything that anyone at the county did last year.
As always, if there is something that you'd like to see me address this year, please let me know. You can use this online form to suggest a new policy or program. If you prefer to use a PDF, one is available here. You can email completed worksheets to first.district@santacruzcountyca.gov
Budgeted $3.5 Million in County General Fund Money for Road Maintenance - I once again advocated for more money to maintain county roads. This year's allocation of $3.5 million was the highest ever for general maintenance, though it is still not enough. During budget hearings I moved that all other departments take a 0.5% - 1% haircut in order to free up money for an emergency culvert repair program (there are over 100 failed culverts in the county and another 300 close to failing). I couldn't get a second on my motion. I remain undeterred.
East Cliff Parkway Design Changes - I addressed the issue of e-bike and pedestrian conflicts by looking at one of our most heavily utilized areas: East Cliff Dr. After two rounds of surveying and thousands of responses, the community selected an option that would fully separate bike and pedestrians by 59% (after ranked-choice voting reallocations). The design would accomplish this by moving all bike traffic off of the walkway and into the street while slowing down car traffic at least 5 mph. Public Works is finalizing the details of the design, and we will implement it on a trial basis later this year.
Neighborhood Speed Bumps on Maciel Ave, Dover Dr, and Rodriguez St - Most people want cars to go at a safe speed through their neighborhood. That's why I've been working to process speed bump applications faster than ever with three projects approved just this past year. I will continue to help close funding gaps and get these safety devices installed as fast as possible.
Received $128 Million in Funding for Highway 1 Phase III and Soquel Dr - Our community got a huge win last year with a state funding award to complete the Highway 1 auxiliary lane project all the way to Freedom Blvd. We will also be extending the improvements on Soquel Dr for bikes and buses to Freedom. While I can't take credit for the years of planning that went into this, I did author a memo with former Supervisor Friend to keep the Soquel Dr part of the project (which is led by the County) included. This made the application multi-modal and therefore much more competitive. I'm working to make sure we use a different kind of bike lane bollard when the rest of Soquel Dr is done. I'm hopeful we can also use that as an opportunity to update the bollards on the current project to something more robust!
Streamline Santa Cruz County - I helped lead improvements in our Planning Department through increased transparency and accountability. When the CEO's office presented a study on our Planning Department last March, I utilized the opportunity to request specific changes including a "one bite at the apple" approach to plan review comments, user feedback surveys and a permit dashboard. The result is that on-time Building Permit Plan Check has increased by 21% from 67% of applications reviewed on time in December 2024 to 88% reviewed on time in September 2025.
Vacation Rental Updates - The Board of Supervisors approved a package of vacation rental reforms authored by me and Supervisor Cummings. This package stops unlimited growth of vacation rentals countywide, requires stricter block caps, and implements a 24/7 reporting hotline. The changes are still pending a vote at the Coastal Commission, but I'm hopeful they'll approve it soon and we'll start reducing the impacts of vacation rentals on neighborhood quality of life and housing costs this year.
Live Oak Art and History Program - With the help of local advocates and our art program coordinator, I created a policy for rotating exhibits at the Simpkins Family Swim Center. These exhibits will celebrate the history and culture of Live Oak.
On-Site Cannabis Consumption Ordinance - The Board approved on-site consumption of cannabis at dispensaries and farms (with an extra permit). I helped push for this law because it will make the legal, regulated cannabis market more competitive with the black market. If we are going to limit exposure to youth and eliminate the use of harmful pesticides on cannabis, we need the legal market to work.
North Rodeo Gulch Clean Up - After an encampment fire last year along North Rodeo Gulch, my office helped a team of volunteers clean up the area (particular thanks to the North Rodeo Gulch Firewise Community). We provided dumpsters and permitting support in addition to removing a bunch of fire debris ourselves.
Rail Trail Peace Deal - Mayor Fred Keeley and I were able to put together a deal to build the interim trail down the middle of the rail corridor without rail-banking. This proposal was approved by the Regional Transportation Commission in December. It will allow the Regional Transportation Commission to build all of the trail the community has been promised within the budget available. The trail we build will be transformational for the County.
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A County Perspective on the Governor's Proposed 2026-27 California State Budget
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Image: The California State Capitol in Sacramento. Photo cred: AP
Governor Newsom has released the proposed 2026–27 California state budget, which demonstrates the flaws in his "blame the counties" approach to homelessness and mental health.
His budget projections are rosier than those of the Legislative Analyst's Office. He projects only a $2.9 billion shortfall as opposed to the $18 billion shortfall warned of by the Legislative Analyst's Office at the end of last year. (Hopefully the Governor is right.) I suppose we should be grateful that he allocated $500 million for addressing homelessness to cities and counties. However, that's after a $0 allocation in last year's budget and additional cuts to county mental health budgets due to Prop 1, the Mental Health Services Act of 2024, which he championed.
Prop 1, which narrowly passed, reduces ongoing mental health dollars for counties in order to bond against the money and build housing. In theory this would be a good idea if you could actually house more people upstream than you cut service for downstream. It could also be a good idea if the State were stepping in to take a leadership role in building all that housing. Right now, neither of these things are happening.
Newsom blaming counties for homelessness is wrong and it won't produce results. Counties cannot write laws related to mental health, drugs or the penal code. The State can.
Counties are funded (mostly underfunded) at radically different amounts. For example, San Francisco receives close to 70% of its property taxes to provide local municipal and health services whereas Santa Cruz County receives just 13%.
At last count, 30 of California's 58 counties had less than 100,000 people. Small counties do not have the money or expertise to manage sophisticated homelessness and mental health response programs. Especially not given the wild fluctuations in funding from the state.
Finally, counties face vastly different housing and labor costs depending on geography. It's pretty hard to build your way out of homelessness when the price per permanent housing unit is $700,000 – $800,000 the way it is here in Santa Cruz.
All of this points to why the State needs to take responsibility for mental health and addiction treatment (two large contributors to homelessness) rather than blame counties.
The State historically took responsibility for mental health and that's the way it should be again. Everyone bemoans the closure of the state mental health institutions. Isn't it time to undo that move and bring them back? The state has the ability to place facilities in lower cost regions so that our tax dollars go farther. The state can make the laws to ensure people get the treatment they need. The state controls the dependable funding sources.
I'm not the only one who feels the Governor's approach is not working. The California State Association of Counties (CSAC) notes that while the budget maintains existing programs, it does not include new funding to address rising costs and growing demand for county-administered services such as homelessness response, behavioral health, and public health. CSAC also points to continued concerns about cost pressures and potential cost shifts to counties, where local governments are responsible for delivering state and federally required services without corresponding increases in funding. CSAC’s full statement on the Governor’s proposed budget can be found at: https://www.counties.org/news-and-media-article/csac-statement-on-governors-budget-proposal
At the end of the day, Newsom probably won't be able to win the presidency because homelessness in California will hang like an albatross around his neck. Sure he did a lot of things on the issue, but that mostly amounted to pushing a lot of money out the door into an extremely expensive treatment system.
To be sure, at the County level, we've actually managed to use that funding to deliver results. We've reduced homelessness by more than 20% annually TWICE in the last three years. We have 60 new temporary housing beds coming online now and another 100+ permanent beds soon. But we'll run out of operating funds for many of these programs after a couple of years.
It's time for the State, which controls both the purse strings and the laws, to take responsibility for mental health again. Let's hope the next Governor of California understands that.
A full summary of the Governor’s proposal is available on the Department of Finance website at https://ebudget.ca.gov/budget/p/2026-27/BudgetSummary. |
Image: Above, a rendering of the proposed development at 3500 Paul Sweet Road. Below, Supervisor Koenig addresses residents of Dominican Oaks who neighbor the project site.
The proposed project at 3500 Paul Sweet Road is scheduled to be heard by the County Planning Commission on Wednesday morning. As I shared with you late last year, there are two proposed developments that were submitted to the County of Santa Cruz under what is known as Builder’s Remedy.
In early 2024, Santa Cruz County briefly fell out of compliance while awaiting final certification of our Housing Element from the State Department of Housing and Community Development. During that window, developers were permitted to submit Builder’s Remedy applications. This state law allows housing developers to bypass most local zoning standards when a city or county does not have a state certified Housing Element. If an application is submitted during that lapse, local governments have very limited authority to deny it or require meaningful changes.
In December, the County Planning Commission considered the Builder’s Remedy project at 841 Capitola Road, a five-story, 57-unit development proposed in a predominantly single family neighborhood. In that case, commissioners expressed clear frustration but concluded that state law left them little discretion to deny or significantly modify the project. The Paul Sweet Road proposal now follows that same path.
The proposed development at 3500 Paul Sweet Road would construct a six-story residential building with 105 housing units on a half-acre site immediately adjacent to Dominican Hospital and the Dominican Oaks retirement community. Of those 105 units, the project proposes six units designated as extremely low-income housing, with the remaining units offered at market rates. The project would provide 74 on-site parking spaces, resulting in substantially less than one parking space per unit.
Under normal circumstances, a project of this size, height, and density would be evaluated for consistency with the County’s General Plan, zoning regulations, parking requirements, and compatibility with surrounding uses. Under Builder’s Remedy, however, the Planning Commission’s discretion is sharply limited, even when a project clearly conflicts with long-standing local standards.
County staff have prepared a report for the Planning Commission outlining the narrow findings that can be made under state law. While the report documents extensive public comment and acknowledges numerous concerns raised by nearby residents and institutions, it also explains that many of those issues cannot legally be used to deny the project because of Builder’s Remedy protections.
Last week I met with residents of the Dominican Oaks retirement community as well as representatives of Dominican Hospital (see photo above). They raised serious public safety concerns. These include emergency vehicle access along Paul Sweet Road, congestion near hospital entrances, evacuation challenges for seniors with limited mobility, building collapse zone concerns, and spillover parking impacts that could interfere with ambulance access and hospital operations. Dominican Hospital serves as the county’s primary acute care facility, and Dominican Oaks is home to hundreds of seniors who depend on safe, reliable emergency access.
Health and safety issues are one of the few grounds that the Planning Commission could use to deny a Builder's Remedy project. I am working with County Counsel and Planning staff to evaluate closely all of the concerns raised.
To be balanced, caregivers are among those most in need of more local housing options. Santa Cruz has topped the national chart for least affordable rent three years running. High housing prices directly influence high medical costs. One hundred and five new units directly adjacent to the hospital could house nurses and doctors who are permanently employed as well as visiting nurses and doctors.
If you’d like to submit comments or ask questions about the project, please direct them to the County planner assigned to the project, Jonathan DiSalvo, at jonathan.disalvo@santacruzcountyca.gov.
If you go:
Wednesday, January 14, 9:30 AM County Government Building – Basement 701 Ocean Street in Santa Cruz
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Tuesday, January 13 - Board of Supervisors Meeting starting at 9:00 AM. The meeting will be held via Zoom and in person at the Scotts Valley Council Chambers, located at 1 Civic Center Drive, CA 95066.
Wednesday, January 14 - Planning Commission at 9:30 AM. The meeting will be held at the County Government Center Community Room, located in the basement at 701 Ocean Street, Santa Cruz, CA 95060 and via Zoom.
Tuesday, January 27 - Board of Supervisors Meeting starting at 9:00 AM. The meeting will be held via Zoom and in person at the County Government Center Community Room, located in the basement at 701 Ocean Street, Santa Cruz, CA 95060.
The County Board Chambers are currently under renovation through February 2026. Board meetings will be held at various locations throughout the County of Santa Cruz during this time. The Fall 2025/Winter 2026 meeting schedule with updated locations can be found here.
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