Capitola Begins FY26–27 Budget Process; Council Lists Infrastructure, Resilience and Facilities Among Top Priorities

City staff presented the kickoff for the FY26–27 budget, asking the council to identify goals and key projects to guide the draft budget. The presentation tied proposed items to the city’s strategic plan and highlighted major projects staff expect to carry forward into next year, including a community center complex and continued capital‑project work.

Finance Director Jim reviewed fiscal metrics and near‑term risks. He said the estimated ending general fund balance was a little over $200,000, which is roughly $300,000 below the $500,000 target. He reported a contingency balance of about $2,500,000 and an emergency reserve near $1,600,000—both below targets. Jim noted potential one‑time revenues under FEMA and Cal OES reviews that could total in the range of $950,000 to $960,000 if approved, and that storm‑damage insurance claims might amount to about $800,000 if validated.

Staff outlined program and department priorities: a lifeguard services study, improved financial transparency tools, police technology (regional radio network, body‑worn cameras, drone program), housing and economic development tools (down‑payment assistance, inclusionary fee updates), and operations tied to the new community center (rental packages and a commercial kitchen). The staff recommendation also suggested splitting any unallocated general‑fund dollars evenly between reserves and projects, but council members deferred that formal allocation until more detailed figures were presented later in the budget process.

Council members then offered prioritized lists of goals including trestle evaluation, Bay Avenue corridor work, Cliff Drive resiliency, Stockton Avenue Bridge follow‑up, sidewalk infill, and potential studies for TOT and impact fees. Staff said the draft budget will be published April 17, with an initial budget review on May 5, a follow‑up hearing the evening of May 21, and adoption targeted for June 25.