Adopted 2025-26 Budget

Adopted Budget Summary

The Adopted Budget increased staffing to 6.0 full-time equivalent (FTE) positions, including negotiated salary and benefit increases. Appropriations totaled $14,000,930, funded by revenues of $10,758,107, a General Fund Contribution of $2,467,500, a District Sales Tax Contribution of $600,000, and use of Other Fund Contributions of $175,323.

Budget Summary

The budget added 1.0 FTE Senior Administrative Analyst to provide Measure Q support to coordinate the Citizen Oversight Advisory Board, Measure Q grant program, tax collection and distribution support services, and fiscal and reporting requirements as outlined in the measure ordinance.

The budget increased expenses by $3,292,698 from the addition of $3,845,778 in matching year-end rebudget of grant related expenses, $192,615 to fund the 1.0 FTE Measure Q position, and $449,622 for professional and special services, which partially will support the County’s disaster cost recovery team and Long-Term Recovery Group’s disaster rebuild program and case management. The increases were offset by decreases of $871,913 for a credit against expenses in an intrafund transfer from the Emergency Watershed Protection Grant. The budget increased revenues by $2,937,454 primarily due to a inclusion of $192,615 in Measure Q revenues to support administrative activities, $3,670,455 in year-end rebudget of prior year revenues largely from $3,340,971 from Emergency Watershed Protection (EWP) Federal grant, $1,031,793 from Phase I BRIC grant for public and private wildfire resilience and risk‐reduction and with $1,225,467 in other federal and state revenues, offset by a $2,000,000 decrease in EPA federal grant revenues due to change in federal policies, $500,000 decrease from expected FEMA reimbursements, $296,522 decrease in Homeland Security grants, and $154,166 decrease from closing out State grants in 2024-25. The District Sales Tax Contribution of $600,000 helped to fund a countywide alert and warning platform called CruzAware, which included Santa Cruz Regional 911 services. It also helped fund 2.0 FTE Emergency Services Analysts that support emergency and disaster preparedness. OR3 leveraged the District Sales Tax Contribution through staff to access grant funding for resilience efforts. To date, OR3 has secured over $20 million in resilience resources for our County. This contribution was part of the existing General Fund Contribution to OR3 but is shown separately.

Last Day Budget Summary

The Last Day Budget added $192,615 in expenses and matching revenues from Measure Q to add 1.0 FTE Senior Administrative Analyst for Measure Q administrative support and activities.

Final Budget Summary

The Final Budget added $3,845,778 in expenses and $3,670,455 in revenue for the rebudget of federal and state funds including for Emergency Watershed Protection (EWP) Federal grant offset by a reduction in grant revenue from the Environmental Protection Agency (EPA). The budget also included the carryover of contracts and services into 2025-26, with the net increase of expenses over revenue funded by the carryover of prior year fund balance.

Hazard Mitigation and Climate Action & Adaptation Plan Implementation: OR3 addresses the impacts of climate change through implementation of the Climate Action and Adaptation Plan (CAAP) and hazard mitigation activities that support efforts at the individual, local, and landscape scales. These activities require external grant funding and staff to administer and manage grant programs. Over the past two fiscal years, OR3 has secured several federal grants, which may be at risk due to potential changes in federal policy. Shifts in federal priorities could delay or cancel grant execution.

Disaster Response and Recovery: Catastrophic natural disasters can occur at any time, posing significant risks to the community and County finances. Preparing for effective response and ensuring collaborative, coordinated recovery is critical. OR3 is working with the Community Development and Infrastructure (CDI) Department and other departments to improve FEMA Public Assistance cost recovery with consultant support.

Measure Q Implementation Collaboration: OR3 will collaborate with the Parks Department to implement the recently passed Measure Q, the Water, Wildfire and Wildlife Protection Act. This effort will provide an opportunity to develop systems for grant application, review, management, and fund disbursement, building internal capacity that may support future resilience and hazard mitigation grant efforts. The scope of implementation will be defined during the supplemental budget process and following adoption of the Vision Plan.

Federal Grant Programs for Resilience, Recovery and Hazard Mitigation: OR3 has secured initial awards for two hazard mitigation grants: one for roadside evacuation route wildfire fuel reduction, to be implemented by CDI Department, and another through the Building Resilient Infrastructure and Communities (BRIC) program for fuel reduction and home hardening. These grants, along with annual emergency management grants, may be affected by future executive orders or changes in federal policy.