Proposed 2025-26 Budget

Overall Budget Summary

The Proposed Budget recommends status quo staffing of 5.0 full-time equivalent (FTE) positions, including negotiated salary and benefit increases. Appropriations total $9,962,536, funded by revenues of $6,895,036, a General Fund contribution of $2,467,500, and a District Sales Tax contribution of $600,000.

The Budget includes a decrease in total revenues of $925,617 primarily due to a $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. Total expenditures decreased by $745,696 largely from a credit against expenditures of $871,913 in an intrafund transfer from the Emergency Watershed Protection Grant, and a decrease of $122,024 in salary and benefit costs. These decreases are offset by an increase of $449,622 in 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 District Sales Tax contribution of $600,000 helps to fund a countywide alert and warning platform called CruzAware, which includes Santa Cruz Regional 911 services. It also helps fund 2.0 FTE Emergency Services Analysts that support emergency and disaster preparedness. OR3 leverages 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 is part of the existing General Fund contribution to OR3 but is shown separately.

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.