WATSONVILLE — As the City of Watsonville’s financial situation continues to improve, disappointing cannabis revenue and increasing retirement costs have city officials concerned for the future.
Administrative Services Director Cynthia Czerwin will present the city’s mid-year budget report to the Watsonville City Council on Tuesday.
The city’s general fund has been on an upward trend for the last three years, and at $9 million, it is the highest it has been in at least 12 years, according to the report.
The report attributes this to “ongoing efforts by the city and its employees to control expenditures and the stabilization of major revenue sources such as sales and property taxes.”
Because of the higher than project general fund revenue, the report recommends funding a number of capital projects, such as improvements at the Ramsay Park Family Center and City Hall, among others.
But the positive trend could be affected by a number of factors, the report warned.
The city’s tax on cannabis businesses was budgeted to net more than $825,000 in revenue during the fiscal year, yet is only projected to come close to $80,000.
According to the report, only one of the seven cultivation facilities are fully operational, and two others are partially operating. The other four are awaiting electrical upgrades from PG&E before they go online.
California’s Public Employee Pension System costs are expected to increase by $1.3 million per year, and the council will receive an update in the coming months on the issue, the report stated.
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The Watsonville City Council will meet Tuesday at 4 p.m. in the City Council Chambers, 275 Main St., fourth floor. The budget item is scheduled for the 6:30 p.m. session. To view the agenda, visit tinyurl.com/yc3zj3xx.
