Proposed 2025-26 Budget

Overall Budget Summary

The Proposed Budget recommends status quo funding pending the negotiation of new MOE contributions. Appropriations total $9,848,894, funded by revenues of $9,404,346 and fund balance of $444,548. The Budget includes an increase in total revenues of $488,820 primarily due to a $456,544 increase from property tax growth. County staff are working with the cities to establish new MOE contributions, which will be included in a fifth amendment to the joint powers agreement. Staff anticipate an increase in the MOE contribution from the County Library Fund and City of Santa Cruz to the LFA.

Total expenditures increased by $1,697,276 from a $1,560,611 increase in professional services to cover an increased MOE contribution, $78,256 increase in cost plan charges, and $58,409 increase in property insurance due to new and improved library branches. In addition, the County Library Fund will transfer $500,000 less to the Library Capital Fund in 2025-26.

MOE Contributions: The fourth amendment to the joint powers agreement between the County and four incorporated cities that form the LFA expires June 30, 2024. The agreement includes MOE contributions from the County Library Fund, which includes Capitola and Scotts Valley, and the Cities of Santa Cruz and Watsonville. The County’s MOE contribution is expected to increase once members agree on new contributions and the Board of Supervisors and City Councils approve a fifth amendment this spring. The 2025-26 budget includes $1,560,611 more for the County’s MOE contribution and $500,000 less for capital improvements. Actual contributions for 2025-26 and future years will be determined by the result of negotiations.

Capital Improvements: The County established a Library Capital Fund, a sub-fund of the County Library Fund, and has been transferring excess revenues since 2021-22. The purpose of the Library Capital Fund is to save for major maintenance and capital needs at the County Library Fund branches in Aptos, Capitola, Boulder Creek, Felton, La Selva Beach, Live Oak, and Scotts Valley. Capital Projects staff are completing capital asset reserve studies at these branches, excluding La Selva Beach due to the lease agreement with the La Selva Beach Recreation District. The Library Capital Fund has a balance of $6,805,644 as of March 31, 2025. In addition, the Santa Cruz Libraries Facilities Financing Authority, a separate joint powers authority, recently increased the maximum allocation and distribution of Measure S funding, resulting in an additional $12.58 million that will be distributed to the County for use on its branches.