Dear Friends and Neighbors,
Today the County reviewed its budget for this year and next. It's not great–a $5.4 million deficit that has emerged for this Fiscal Year 25-26 and a $23.2 million deficit on the horizon for next Fiscal Year 26-27.
In better news, poll results show that the community is largely united about an East Cliff Surfer Statue with over 75% in support. The project would be privately funded.
I'm working to make the county dollars we do have go further and hosted a volunteer beautification project on 17th Ave last weekend with County Park Friends.
I also held a couple of town hall meetings recently. You can see slides and find another virtual participation opportunity below.
If you'd like to connect my office hours are next Wednesday March 4, 1-3PM at the Sheriff's Center.
Best, |
Manu Koenig 1st District Supervisor, Santa Cruz County
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Highlights from Today's
Board of Supervisors Agenda
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Image: A rendering of the proposed townhome project at 5940 Soquel Ave
When the Kaiser Medical Office Building was proposed on the Soquel Ave frontage road, many people said they'd rather see housing there instead. Well, those folks may get their wish. Kaiser cancelled their plans for the new medical building after the pandemic led to higher office vacancy rates, which allowed them to expand leases at their existing clinics instead.
Now, KB Homes has submitted an application for 5940 Soquel that would finally build the 100 homes this parcel was zoned for as part of the County's 2000-2006 Housing Element. These would be three-bedroom townhomes in 17 buildings. Each townhome would have a two car garage and 20 guest parking spaces would be provided.
The Home Builder would construct significant new stormwater infrastructure as part of this project, solving a much larger drainage problem for the entire area. Other projects built in the future that utilize this infrastructure would ultimately reimburse the Builder for their share.
The Home Builder has offered to provide 15 of the units (15%) as deed-restricted affordable through the County's Measure J program. These affordable units would sell for approximately $500,000 - a deep discount compared to the market rate for three bedroom town homes, which is over $1,000,000.
The Board voted 5-0 to approve the staff recommendation for this item.
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Image: jumping off the fiscal cliff. Credit Vernon Wiley / Getty Images
It's not just you–the cost-of-living crisis is catching up with Santa Cruz County government as well. The County is projecting a $5.4 million deficit for this Fiscal Year 25-26, which ends June 30, while a $23.2 million deficit is on the horizon for next Fiscal Year 26-27. What's driving this is a structural imbalance between growing costs and sustainable revenue growth.
In other words, revenues are going up a little, but expenses are going up a lot. Growing labor costs are the primary driver, which are heavily influenced by local cost of living increases (i.e. housing, energy, and insurance).
The County recently renegotiated a number of labor contracts. In order to retain employees, it agreed to pay wages that keep up with inflation and compare with neighboring counties. (Even with the increases, neighboring counties typically pay more for some positions and employee flight is a real problem). But stagnant revenues mean that the County will now struggle to afford as many people. As the Mid-Year Budget Report says, the County cannot rely on "passive absorption strategies" alone to deal with the deficit.
The County is also seeing erosion of its sales tax revenue due to online sales. Today's recommended actions include decreasing projected sales tax revenues for this Fiscal Year by $1.295 million. While locally passed sales tax measures are applied to online sales the same way as brick-and-mortar sales, there are several components of the sales tax that are managed by the State. Roughly 2.5% of the 9.5% sales tax that you pay is collected by the State and returned to local jurisdictions using decades-old allocation models. These models consider the point-of-sale for online sales to be the warehouse, not the buyer's residence. We urgently need our State Legislators to correct this.
These budget shortfalls come before even dealing with the major impacts of state and federal cuts. The County will have to take swift action to avoid deficits rising to $67.5 million by 2028-29. The County implemented an immediate hiring and travel freeze effective yesterday, February 23rd.
Budget hearings for Fiscal Year 2026-27 begin May 5, 2026, with additional hearings on June 10, June 11, and June 24. |
Image: a rendering of the proposed statue "To Honor the Women of the Water" at the East Cliff Dirt Farm.
As I shared previously, a local group has applied to install a bronze female surfer statue along East Cliff Dr at the area known as the “Dirt Farm” in Pleasure Point. The statue would serve as a counterpart to the beloved male surfer statue on West Cliff, mirroring its pose, scale, and artistic intent, and created by the same sculptor.
I asked you to tell me what you think of this proposal with a poll in the last newsletter. 668 people answered the poll. Of those:
78.3% - Fully support the project 13.8% - Dislike the project 4.9% - Like the project but are concerned about the location 3.0% - Like the location but are concerned about the design
Using our email database, we were able to confirm physical addresses for 259 respondents. Among this pool, responses were roughly similar with 75.6% in support of the project and 15.4% opposed. We then created the following heat map to show where the addressed responses came from. They demonstrate that there was a strong response rate from the Pleasure Point Area, meaning that overall results are reflective of local sentiment. Note that red in the below map indicates a higher density of responses, not opposition or support.
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Image: heatmap indicating the number of poll responses by location
If you haven't had a chance to participate in the poll, feel free to share your opinion here. It will remain open until the night before the Zoning Administrator hearing in early April.
If approved, the project will proceed with private fundraising. At least $25,000 has already been committed.
In addition to the project organizer, Kari Lochhead, and the artists themselves, Brian W. Curtis and Thomas Marsh, the project's advisory team now includes:
- Ashley Lloyd (Renowned surfer & founder of Ashley Lloyd Surfboards)
- Tyler Fox (Ocean athlete, entrepreneur, environmental activist)
- Jane McKenzie (Santa Cruz surf legend, Santa Cruz World Surfing Reserve Stewardship Council & Former President of the Santa Cruz Longboard Union)
- Hillary Bryant (Donor Services Director at Community Foundation Santa Cruz County & former Mayor)
- Frosty (Legendary big wave surfer, coach & mentor)
- Peter Mel (Professional Big wave Surfer & owner of Freeline Surf Shop)
- Nicole Fisher (Photographer & owner of Rootstock Collective)
- Kaila Pearson (surfer, ocean lifeguard, marine biologist & biology professor)
- Alison Hobbs (Landscape architect and project's lead designer)
- Shelby White (High school & youth girls water polo coach, teacher & mentor)
- Alyana Zanville (Founder of Ola Chica & Women of the Water surf contest organizer)
- Marisol Godinez (Communications Designer & Women of the Water surf contest organizer)
- Shaun Burns (Professional surfer, Save the Waves & Santa Cruz World Surfing Reserve)
If you have additional questions or would like to share comments, you can contact the project team at tohonorsc@gmail.com or reach out to the county planner reviewing the application, Rebecca Rockom, at rebecca.rockom@santacruzcountyca.gov.
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Image: County Park Friends Young Outdoor Leaders, Board leadership and staff.
Ever wonder where that $0.25 tax you pay for a disposable coffee cup goes? Currently, each Supervisor's Office receives a share of the funds (approximately $50,000 per year total or $10,000 per office). My Office is using the money to put in pollinator-friendly, drought-tolerant plants throughout District 1. To make the money stretch further, we're engaging community volunteers.
Last weekend County Park Friends mobilized their Young Outdoor Leaders, along with Board Chair Lesley Harris and Vice Chair Lilia Chagolla, to help us plant outside 870 17th Ave. The team spent a few hours weeding, cutting back old brush, digging holes, and planting native and drought-tolerant plants. I was impressed with how quickly and efficiently the Young Outdoor Leaders transformed the space!
This County-owned building was the former Live Oak Sheriff's Office, before the construction of the modern Sheriff's Center at 5200 Soquel Ave. Then it served as the Santa Cruz Animal Shelter Benefit Shop, which relocated to the East Cliff Shopping Center. Today the building is owned by County Parks and Rec. and is used as the District 1 Maintenance Shop. It's also the home of County Park Friends' office. Thank you County Park Friends!
If you have ideas for other beautification projects, contact my office at: first.district@santacruzcountyca.gov
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Save the Date: All-County Cleanup Day May 9th
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Image: Pitch In Santa Cruz County logo
Pitch In Santa Cruz County will hold their third annual All-County Cleanup Day on Saturday, May 9th. Please save the date, and sign up to help! I will share more details in future newsletters.
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Image: Supervisor Koenig and residents at last week's town hall with Asm. Pellerin
Last week, 28th District Assemblymember Gail Pellerin and I collaborated on a town hall meeting at DeLaveaga Elementary School where we focused on the state budget as well as the ways the County and the state have been able to partner on a variety of initiatatives. We also heard from some of you regarding your questions and concerns about district-specific issues. Asm. Pellerin and I received some great feedback and input that will help further inform policy directives moving forward. If you weren't able to attend the town hall, you may view the recording and presentation from the meeting on the First District webpage.
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Our County Strategic Plan helps guide priorities, investments, and services for the years ahead, and it should reflect the values and needs of our community.
Earlier this month, I hosted an in-person town hall where I met with residents to gather feedback and suggestions to help inform the County of Santa Cruz 2026 to 2032 Strategic Plan. We had a good turnout and were able to discuss how we address key issues like housing, public safety, climate resilience, infrastructure, and quality of life in our county.
If you weren't able to attend but would still like to provide feedback, you can still attend the upcoming virtual town hall:
You may also provide feedback via the online survey, which will be active through February 27:
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Image: The Santa Cruz County Sheriff's Center where I'll host Office Hours next Wednesday, March 4.
Wednesday, March 4 - Monthly Office Hours from 1:00-3:00 PM at our First District Office located in the Sheriff's Administration Building at 5200 Soquel Ave. Join us for drop-in office hours and discuss what's on your mind. First come, first served.
Tuesday, March 10 - 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.
Tuesday, March 24 - Board of Supervisors Meeting starting at 9:00 AM. The meeting will be held via Zoom and in person at the South County Center Community Room located at 500 Westridge Drive, Watsonville, CA 95076
The County Board Chambers are currently under renovation through March 2026. Board meetings will be held at various locations throughout the County of Santa Cruz during this time. The Winter 2026 meeting schedule with updated locations can be found here.
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