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Santa Cruz water department details $48 million in capital work, warns of funding and revenue headwinds
Summary
Water Director Heidi Luckenbach told the City Council the water enterprise will deliver roughly $48 million in capital projects next year but faces rising construction costs, falling demand-driven revenue and loan limits that complicate financing for large projects.
Heidi Luckenbach, the city’s water director, told the Santa Cruz City Council during a budget overview that the water enterprise will pursue about $48 million in capital work in fiscal 2025–26 while running a roughly $56 million operating budget.
Luckenbach said the department serves about 100,000 people and collects about $46 million in water rate revenue annually. She described major funding secured to date — including State Revolving Fund (SRF) loans, WIFIA loans and other grants — and outlined projects planned for the coming year, including replacement concrete tanks at the Graham Hill Water Treatment Plant, two aquifer storage and recovery (ASR) wells in Live Oak and an intertie with Scotts Valley Water District.
The water director said the department expects to ask the council in June to approve two contracts tied to a 30‑year Habitat…
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