Tarmo Hannula/The Pajaronian DISASTER The CZU Lightning Complex Fires that raged through 86,509 acres in the Santa Cruz Mountains, killed one man, burned close to 1,500 buildings, including 900 homes, and left the county with more than $140 million in unreimbursed recovery costs.

In the coming years, as the Santa Cruz County Board of Supervisors oversees more than 30 departments under their jurisdiction, they will have to grapple with increasing numbers of natural disasters spurred by climate change, as well as homelessness and the housing crisis, and ever-evolving mandates from state and federal governments to address those problems.

That was the message Tuesday from County Administrative Officer Carlos Palacios, who outlined the proposed budget in advance of hearings next month. 

Palacios said those problems will continue to burden county leaders as they face an ever-shrinking budget.

“We are facing major issues with climate change and the impact it is having on our community and our county budget,” Palacios said. “The response to the natural disasters we have faced since 2017 has become the major issue this county now faces, and how we will address that in the future is very critical for this board.”

The county must also deal with some of the lowest property tax revenue in the state—11% as opposed to a state average of 19%—which they must use to provide services for more than half the county’s residents, Palacios said.

The supervisors were taking a preliminary look at this year’s $1.126 billion budget, in advance of budget hearings coming up next week.

The proposed budget, which will be finalized in June and certified later in the summer includes a balanced $754.2 million general fund.

One of the most onerous issues facing the current administration is funding seven natural disasters that occurred over the past six years, including last year’s floods and the CZU fires. The county is still waiting for $144 million in reimbursement from the Federal Emergency Management Agency, after spending $250 million on recovery efforts for those disasters.

To help the county recuperate those costs as it waits for that reimbursement, it will issue $85 million in debt, which will cost about $8 million for the debt service, County Finance Director Marc Pimentel said.

“The picture is bleak,” Supervisor Zach Friend said, adding that things are likely to get worse.

“I think that future boards are going to be faced with some very challenging decisions in a way that they really haven’t in the last 15 years,” he said.

FEMA is also holding out on reimbursement from Project Room Key, a state program that placed homeless people in hotels during the 2020 Covid pandemic.

After promising full reimbursement, the federal agency is now only offering 20 days, leaving the county with an $11 million hit, Pimentel said. 

In addition, FEMA has denied $8.7 million in reimbursement for debris removal after the CZU fires, which the county is appealing.

The county’s Health and Human Services department is looking at funding changes after Proposition 1 passed in March. The new law requires jurisdictions to redirect 30% of their funding to housing intervention programs, meaning that $6 million that formerly funded drug abuse prevention and counseling will be shifted.

 “That is going to be very challenging for our county as well,” Palacios said.

The news was not all bad.

Palacios touted the new South County government building nearing completion on 500 Westridge Drive, which will consolidate several departments in one location, and shave off rental costs for many of them.

This includes a Health and Human Services office, The County Agriculture Commissioner, the Agricultural Extension, the County Clerk and the Auditor-Controller.

The new center is expected to open in June.

“In the long term, this is going to save the county money,” he said. “We are going to go from renters to owners, and we’re going to pay less, long-term.”

A new county campus at 1430 Freedom Blvd. in Watsonville is also taking shape, which when completed will include a new health clinic and new office space, as well as affordable and workforce housing.

The budget hearings are scheduled for May 21 and 22, and June 4.

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General assignment reporter, covering nearly every beat. I specialize in feature stories, but equally skilled in hard and spot news. Pajaronian/Good Times/Press Banner reporter honored by CSBA. https://pajaronian.com/r-p-reporter-honored-by-csba/


  1. “County supervisors get first glimpse at ‘bleak’ budget.”
    I’m 75 years old now and I first came to Santa Cruz in 1975. It was such a WONDERFUL town back then. No one thought they were better than anyone else – everyone was friendly and HAPPY. Sadly, now there are a bunch of MISERABLE people around and most of them are working for the County of Santa Cruz! HOW DARE THEY BE MISERABLE!! Have you looked at the salaries of Santa Cruz employees? MOST OF THEM are making AT LEAST $200 THOUSAND plus add all the benefits. NO ONE NEEDS that kind of money and it’s ripping Santa Cruz apart!! Did you read about & have you seen the huge buildings being built in downtown Santa Cruz? They were supposed to be built to house the homeless. HOWEVER – there are only a VERY FEW apartments in those building that house the lower income!! Businesses are going to be in those buildings and only a small portion will be used to house the homeless! THEY LIED TO US. They told us the building would be for the homeless – but only a TINY portion will be. SO – they all make OVER $200K a year and they LIE to us! They are WASTING taxpayer money, and NO ONE is doing anything about it. I am SO sad and disappointed that so many people who really do NOT care about Santa Cruz are taking their huge salary and going on their merry way! It is NOT the Santa Cruz it was back in the 1960s & 70s and that’s VERY SAD. I know things change – but the LIES we’re being told and the HUGE salaries they take – HAS TO STOP!! That’s my humble opinion.

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  2. It’s sooooooo nice to watch from free Florida! I to raise rents on my tenants in Watsonville again to cover my expenses. Sad but true

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  3. Santa Cruz and the County are going in the wrong direction.
    What is needed – keep the charm of the beach town. What is the issue in rehabbing original buildings? Only developers are interested in “paving over paradise” with hi-rises.

    Wake up everyone who doesn’t pay attention to “politics”. Conflict of interests (planning commission), shady back room deals (numerous) must be EXPOSED.

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