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CalPERS is the State retirement system that the City and most all State agencies contract with. The courts have ruled that agencies have a contractual obligation to continue the retirement benefits promised employees who have retired. In earlier years, CalPERS was very strong with good investments that had kept the costs low for members. However, several years ago, rates increased after poor investments and the economic crisis of 2008. There is no other viable retirement system available to agencies in California although steps were taken with pension reform that addressed issues for all employees hired since reform. Agencies need to offer a competitive pension system to be competitive in hiring and retention of qualified employees. CalPERS is still the best option available.
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Local governments mostly get their revenue from local taxes, such as property tax, hotel (TOT) tax, sales tax and utility users tax. In addition, cities receive funding from federal and state grants for programs or equipment. Cities charge fees for certain services, such as recreation programs and building permits, that directly cover the costs of those services.
Scotts Valley is heavily reliant on sales tax and hotel tax, which makes up 50% of its revenues (sales tax 31% and hotel tax 19%). Just 13% of its revenues come from property tax and 6% from utilities users tax. The remaining sources are franchise and business license taxes and other grant, fee or state sources.
Scotts Valley has a $12.9 million General Fund budget, which pays for general city services. The police department and local dispatch make up 45% of the budget, nearly $6 million. The next largest department, 16% of the budget, is public works, which manages all of the streets, roads, parks, and public facilities. The remaining 39% of the budget is for planning, building, capital improvement projects and general city administrative services (finance, human resources, legal, risk management and administrative services).
The City’s budget is developed in public through a five-month process with staff and the City Council. The budget process starts in February with final budget adoption in June.
For more information about the City’s budget: https://www.scottsvalley.org/184/City-Budget
Scotts Valley has the smallest budget and staffing of any government in the county. The City supports a community of about 12,000 with a $12.9 million General Fund budget and staff of 60 positions, nearly half of which are in the police department.
Santa Cruz’s General Fund budget is $106 million with 770 positions for a community of 66,0000. Capitola’s General Fund budget is $17.5 million with 67 positions for a community of 10,000. For an over-the-hill comparison, Mountain View’s budget is $390 million with 690 positions for a community of 81,000.
About 15 years ago, Scotts Valley had 76 full-time positions. Since then, to cut the budget, the number of positions was reduced to 60, which is 20% fewer staff working at the city.
Police department – 28 positions (6 currently vacant)Public Works – 10 positions (2 currently vacant)Wastewater Treatment Plant – 6 positions (1 vacant)Recreation – 5 positionsCommunity Development – 5 positions (3 currently vacant)Administrative Services – 4 positionsCity Manager and City Clerk – 2 positions
Currently, there are 12 vacancies.
Our police are the lowest paid in the County. An entry level police officer earns $63,000 per year. In Santa Cruz, the salary is $75,500 for an entry-level officer, about 20% higher. Elsewhere in the County, an entry-level officer can early 30-40% more than Scotts Valley. In Mountain View, that same officer would earn $112,000.
The Police Chief earns $184,000. In the County, other Police Chiefs are paid: Santa Cruz ($217,000), Watsonville ($191,000), and Capitola ($167,000). In Mountain View, the Police Chief earns $298,000.
Even now, SVPD is having difficultly recruiting and retaining trained police officers as the Department is unable to pay a competitive wage. SVPD officers are paid below other agencies in the County.
Scotts Valley posts its salaries on its website: https://www.scottsvalley.org/339/Salary-Schedules. Generally, Scotts Valley employees are the lowest paid in the County, and much lower than over the hill.
Council Members in Scotts Valley receive a stipend of $489 per month, which is established by State law.
The Scotts Valley City Manager is paid $198,924. In the County, other cities managers are paid: Santa Cruz ($233,628), Watsonville ($214,200), Capitola ($202,161). In Mountain View, the City Manager is paid $310,076.
California cities have contractual obligations with CalPERS. The City of Scotts Valley would have to “buy out” its contractual obligation at a cost of tens of millions of dollars, which could feasibly bankrupt the City.