Santa Cruz Municipal Code Art. XIV Fiscal Administration.

1401 FISCAL YEAR.

The fiscal year of the City shall commence upon the first day of July of each year, or at such other time as may be fixed by ordinance.

1402 ANNUAL BUDGET.

On or before the second Monday in May of each year every officer, commission or board shall transmit to the City Manager detailed estimates of income and expenditures for the ensuing fiscal year. At or before the first regular meeting of the Council in June of each year, the City Manager shall transmit to the Council a detailed budget showing estimated revenues and expenditures of the City and all departments thereof for the ensuing fiscal year.

1403 ADOPTION OF BUDGET. ANNUAL TAX LEVY.

Not later than the first regular meeting in July, the Council shall adopt a budget and fix the rate of City taxes to be levied and collected upon all property contained in the assessment roll of the Assessor. Such tax levy, after allowing an adequate percentage of the assessed valuation for delinquencies, shall be such as will yield sufficient revenue, together with other sources of income, for the financial needs of the City for the current fiscal year.

1404 REPEALED. (11-6-90)

1406 BONDS.

In addition to other taxes herein authorized or authorized by State law, the Council shall have the power to levy and collect taxes sufficient to pay the interest and principal of the bonded indebtedness of the City. (Amended 11-6-90)

1407 REPEALED. (11-6-90)

1408 EMPLOYEES’ RETIREMENT SYSTEM TAX.

In addition to the tax rates hereinabove authorized, the Council shall have the power to levy and collect taxes at not to exceed thirty-five cents on each one hundred dollars of such assessed value of all property for the creation and maintenance of the retirement system for officers and employees of this City within such retirement system.

1409 DISBURSEMENT OF CITY MONEY.

Money shall be drawn from the Treasury only on warrants, as hereinafter prescribed, signed by such officer or officers as the Council may designate. The Director of Finance shall examine all payrolls, bills, invoices, demands or other charges against the City, and shall issue no warrant for payment unless the claim, demand or charge is in proper form, correctly computed, and approved, is legally due and payable, and appropriation has been made therefor which has not been exhausted, and unless there is sufficient money in the Treasury to make payment. Warrants drawn in payment of demands or charges conforming to budget appropriations shall be approved by the City Manager prior to payment; all other claims, demands or charges shall require the approval of the Council prior to payment.

1410 CHANGES IN BUDGET APPROPRIATIONS.

The City Manager and Director of Finance shall see that each department and officer of the City shall operate such department or office in accordance with the annual budget appropriations thereof, as nearly as may be. Any appropriation may be changed during the budget year by resolution of the Council upon application of the appropriate department head or the City Manager. If at any time the City Manager shall ascertain that available income for the year will probably be less than the total appropriations thereof, the City Manager shall recommend to the City Council curtailments of departments and offices necessary to avoid expenditures in excess of adjustments of appropriations of income and the Council shall, by resolution, make necessary changes in any appropriations. (Amended 11-3-81)

1411 TRANSFER OF APPROPRIATIONS.

Upon the recommendation of the City Manager, or with the City Manager’s consent, the Council may, by resolution at any time, transfer funds from the unbudgeted reserve to any department or office that the Council may approve. (Amended 3-6-79)

1412 LIMITATION ON EXPENDITURES.

No department or officer shall, during any budget year, expend or contract for, or incur any liability which involves the expenditure of money for any purpose in excess of the amounts appropriated therefor. Any contract, written or verbal, in violation of this Charter, shall be null and void. Any officer or employee who shall violate this Section shall be guilty of a misdemeanor and upon conviction thereof shall cease to hold such office or employment. Nothing in this Section, however, shall prevent the making of contracts of lease or for services for a period beyond the budget year in which such contract was made, when such contract is otherwise permitted by law.

1413 LAPSE OF APPROPRIATIONS.

All appropriations shall lapse at the end of the fiscal year to the extent that they shall not have been expended or lawfully committed, and unexpended funds shall then revert to or become part of the general fund of the City, except such appropriations as are required by law to be continuously so appropriated from year to year. (Amended 3-6-79)

1414 COMPETITIVE BIDDING.

Before making purchases of or contracts for, supplies, materials or equipment, ample opportunity shall be given for competitive bidding, under such rules and regulations and with such exceptions as the Council may prescribe in the ordinance setting up such rules and regulations.

1415 CONTRACTS FOR PUBLIC WORKS.

Any public works or improvements costing more than such amount as may be prescribed by ordinance shall be executed by contract, except where a specific work or improvement is authorized by the Council to be performed directly by a City department or officer in conformity with detailed plans, specifications and estimates.

Notwithstanding any provision to the contrary in the California Public Contracts Code, or any other law or regulation of the City of Santa Cruz, the use of best value alternative project delivery methods including, but not limited to, progressive design-build, construction manager at risk, fixed-price design-build, and design-build-operate contracts is authorized for all public works projects. The City Council shall establish, by ordinance, regulations for the award, use and evaluation of such contracts.

All contracts entered into by the City shall be signed by the City Manager or other officer or officers as the Council may by ordinance or resolution prescribe. (Amended 11-4-86; 11-6-90; 3-3-20)

1416 ACCOUNTING CONTROL OF CONTRACTS AND PURCHASES.

All contracts or purchase orders for public works not governed by Section 1415, and for purchases of supplies, materials, or equipment shall be executed by the City Manager or the City Manager’s designee and shall be pursuant to a written requisition from the department head or officer whose appropriation will be charged therefor, and no contract or purchase order shall be issued to any vendor or supplier unless and until the Director of Finance certifies that there is to the credit of such department or office a sufficient unencumbered appropriation balance to pay for the supplies, materials, equipment, or contractual services, for which the contract or purchase order is to be issued. (Amended 11-6-90)

1417 CONTRACTS BASED ON BOND ISSUES.

No contract shall be executed for the acquisition of any property or the construction of any improvement or betterment to be financed by the issuance of bonds, until the ordinance authorizing the issuance thereof shall have been adopted, and any contract executed prior thereto shall be unenforceable.

1418 BONDED DEBT LIMIT.

The City shall not incur an indebtedness evidenced by general obligation bonds which shall in the aggregate exceed the sum of fifteen percent (15%) of the total assessed valuation for purposes of City taxation, of all the real and personal property within the City, exclusive of any indebtedness that has been or may hereafter be incurred for the purposes of acquiring, constructing, extending or maintaining municipal utilities for which purpose a further indebtedness may be incurred by the issuance of bonds, subject only to the provisions of the State Constitution and of this Charter.

1420 TAX ANTICIPATION NOTES.

During any fiscal year, in anticipation of collection of property taxes for such year, whether levied or to be levied therein, the Council may, by resolution, authorize the borrowing of money upon negotiable promissory notes of the City, each of which shall be designated, “Tax anticipation note for the year ___” (stating the fiscal year). Such notes may be issued for periods not exceeding one year, and may be renewed from time to time within such year, and all such notes shall mature and be paid not later than the end of the fiscal year in which they were originally issued. The total amount of such tax anticipation notes in any fiscal year shall not exceed thirty percent of the amount of property tax levied in that year for City purposes.

1421 SALE OF NOTES.

All promissory notes issued pursuant to this article may be sold at not less than par and accrued interest at private sale without previous advertisement.

1422 PAYMENT OF NOTES.

Any note may be made payable prior to maturity at the option of the City. The power and obligation of the City to pay any and all notes hereby authorized shall be unlimited, and the City shall levy ad valorem taxes on all taxable property within the City for payment of the principal and interest of such notes without limitation of rate or amount. The faith and credit of the City is hereby pledged for the payment of the principal and interest of all notes of the City hereafter issued pursuant to this article, whether or not so stated in any such note.

1423 GENERAL RESERVE ACCOUNT.

As soon as practical the Council shall establish and thereafter maintain a permanent revolving account to be known as the General Reserve Account, for the purpose of keeping the payment of the current expenses of the City on a cash basis. When established said account shall be maintained in an amount sufficient to meet all legal demands against the treasury for the first five months or other necessary period of each fiscal year prior to the receipt of taxes. The Council shall have power to transfer from the General Reserve Account to any other account or fund such sum or sums as may be required to place such account or fund, as nearly as possible, on a cash basis. It shall be the duty of the Council to provide that all moneys so transferred from the General Reserve Account be returned thereto at or before the end of the fiscal year in which such transfers are made; provided, that in any fiscal year in which the total balance in said General Reserve Account exceeds forty percent of the total amount of the general budget for that year, the Council may appropriate such excess for any City purpose without returning same.

1424 PUBLIC SERVICE DEPARTMENTS’ DEPRECIATION FUNDS.

The Council shall annually set aside from the net income of each of its revenue producing public utilities (after providing for the payment of principal, interest, reserve fund, and sinking fund requirements of any revenue bonds and for maintenance and operation of such public utility), as a separate depreciation fund for each of them, a sum which, according to the estimate of the City Manager, and approved by the Council, shall be sufficient to meet the normal depreciation of such public utility. Such depreciation funds shall be used only for the replacement, betterment and extension of the plants, facilities and equipment of said public utilities respectively, and for the payment of principal of and interest on, or retirement prior to maturity of, any bonds of the City to the extent that proceeds thereof have been applied to such replacement, betterment or extension. None of the surplus earnings of any such public utility, including the sewer and sewage disposal system, shall be transferred from any such public utility without a majority vote of the qualified electors of the City at an election at which such a proposition shall be submitted to them; provided, however, that while Ordinance No. 1497, or any amendment thereof is in effect, revenue of the City water system may be used as therein prescribed; provided, further, that surplus funds of the water department may be borrowed for temporary replenishment of the general fund of the City during the first five months of any fiscal year by a vote of five members of the Council, but all sums so borrowed must be repaid during the same fiscal year in which such borrowing occurs.

1425 DEPARTMENTAL TRUST FUND.

The City Council may prescribe by ordinance for the setting up of a Finance Departmental Trust Fund into which the collections of the Police Department, License Collector, Building Officer, or other departments or officers, may be deposited by the respective officers at frequent intervals during each month, with the advice of each deposit being furnished to the Director of Finance. Withdrawals from such fund may be made by the Director of Finance only on order signed by the proper department head and only for the following purposes:

(a) The making of refund of bail which has been exonerated, or of other refundable deposits, revolving fund advances authorized by the City Council, or for the correction of clerical or ministerial errors in the receipt of payments to the City; and

(b) The making of settlements with City funds at the end of each calendar month for collections accumulated during such month. (Amended 3-6-79)

1427 PROFESSIONAL AUDIT.

At the beginning of each fiscal year the City Council shall employ a qualified public accountant who shall, from time to time during such year, examine the books, records, inventories, and reports of all officers and employees who receive, handle or disburse public funds, and of such other officers, employees, or departments as the City Council may direct. At the end of the year a final audit and report shall be submitted to the City Manager, the City Clerk, the City Attorney, and three additional copies to be placed on file in the office of the City Clerk, where they shall be available for inspection by the public.

1428 CITY PROPERTY.

The rights of the City in and to the waterfront and tidelands vested in it in fee or in trust, are inalienable, unless authorized by the affirmative vote of the majority of the qualified electors of the City of Santa Cruz. Other City property in use for a public purpose shall be inalienable, except for the same or another public purpose, unless authorized by the affirmative vote of a majority of the qualified electors of the City voting on the proposition, except such other property as may be determined by the affirmative vote of five (5) members of the Council to be no longer necessary for public purposes.

1429 WATER SYSTEM INALIENABILITY.

The Council shall never sell, lease, assign, convey, mortgage, or hypothecate the water system, or any part thereof, unless authorized so to do by majority vote of the qualified electors of the City of Santa Cruz; provided, however, that property determined by the affirmative vote of five (5) members of the Council to be surplus, and not necessary as a part of the operating water system, may be disposed of. Nothing in this Section shall be construed to limit the authority of the City to issue notes, bonds or other obligations pursuant to its municipal affairs powers as a charter city to finance improvements to the water system, which are secured by a pledge of the revenues derived from the water system.

(Amended 11-8-16 [Measure H])

1430 REPEALED.

(Added 11/7/2006; repealed by judicial decision, April 20, 2007)

1431 VOTER APPROVAL FOR DESALINATION PROJECTS.

Purpose. The purpose of this Charter Amendment is to enact a comprehensive policy ensuring that the City of Santa Cruz does not approve, permit, or fund a desalination project without voter approval. Accordingly, this Charter Amendment would require an affirmative vote by a simple majority of Santa Cruz voters at a statewide general, statewide primary, or regularly scheduled municipal election before any such desalination project could be implemented.
Findings. The citizens of the City of Santa Cruz find:

(a) that the proposal to construct and operate a desalination facility raises serious economic, environmental, and community concerns of such importance that a decision to approve such a project should not be made unless approved by a majority of voters at a statewide general, statewide primary, or regularly scheduled municipal election.

(b) that the City has already spent millions of dollars in pursuit of desalination without a public vote or rate payer approval. According to the City Urban Water Management Plan, “The current estimated cost for design, permitting, property acquisition and construction of a regional desalination plant between 2010 and 2018 is approximately $116 million.” Ratepayers will pay many millions more in debt service, operation, and maintenance.

(c) that there are less costly and less environmentally damaging alternatives to desalination. These include, but are not limited to, effective water-neutral development policies, increased incentives for conservation, operational improvements to the reservoir system, infrastructure upgrades, leak detection, increased water storage capacity, water recycling, plumbing fixture and appliance retrofits, drought-tolerant landscaping, gray water irrigation, rainwater harvesting, water transfers between districts, and watershed restoration.

(d) that implementation of a comprehensive program of alternatives to desalination would provide significant public benefits by supplying water at less cost to rate payers, with less damage to the environment, using far less energy, and would also help to create local jobs and business opportunities.

Voter Approval for Desalination Projects.

(a) Voter Approval. Notwithstanding any other provision of this Charter, no legislative action by the City that would authorize or permit the construction, operation, and/or acquisition of a desalination project, or that would incur any bonded or other indebtedness for that purpose, shall be valid or effective unless such action is authorized by an affirmative vote of a majority of qualified electors in the City of Santa Cruz voting on the question at a statewide general, statewide primary, or regularly scheduled municipal election. Provided that it has first fully complied with the California Environmental Quality Act, Public Resources Code section 21000, et seq., the City Council may put the question of approval of such action before the voters at a statewide general, statewide primary, or regularly scheduled municipal election according to any procedure authorized by this Charter.

(b) Definitions.

(1) As used in this section, “legislative action” means adoption of or amendments to the City’s General Plan, Zoning Map, Zoning Code, Municipal Code, or approval of a development agreement, or any other act by the City Council that is legislative in nature.

(2) As used in this section, “desalination project” means any project intended to provide potable domestic, commercial, and/or industrial water supply through the removal of salts and other minerals from ocean water, regardless of the physical or chemical process used.

Interpretation and Severability. This Charter Amendment shall be interpreted so as to be consistent with all federal and state laws, rules, and regulations. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, part, or portion of this Charter Amendment is held to be invalid or unconstitutional by a final judgment of a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Charter Amendment. The voters hereby declare that this Charter Amendment, and each section, subsection, paragraph, subparagraph, sentence, clause, phrase, part, or portion thereof would have been adopted or passed even if one or more sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, parts, or portions are declared invalid or unconstitutional. If any provision of this Charter Amendment is held invalid as applied to any person or circumstance, such invalidity shall not affect any application of this Charter Amendment that can be given effect without the invalid application. This Charter Amendment shall be broadly construed in order to achieve the purposes stated in this Charter Amendment. It is the intent of the voters that the provisions of this Charter Amendment shall be interpreted by the City in a manner that facilitates the purposes set forth in Section 1 of this Charter Amendment.
Effect of Alternative Measure on Same Ballot. This Charter Amendment adopts a comprehensive policy for protection the City of Santa Cruz’s neutral environment, coastal resources, public infrastructure, and municipal finances from being utilized for a desalination project without prior approval by City voters. By voting for this Charter Amendment, the voters expressly declare that any other measure that appears in the same ballot as this Charter Amendment and conflicts with, or purports to amend, any provision of this Charter Amendment, shall be deemed to conflict with the entire set of policies adopted by this Charter Amendment. Because of this conflict, if this Charter Amendment and any such other measure receive a majority of votes by the voters voting thereon at the same election, then the measure receiving the most votes in favor shall prevail in its entirety and no provision of the other measure shall take effect.
Retroactive Application. In the event this Charter Amendment is adopted by the voters, its provisions shall apply retroactively as of the date the measure was found to have qualified for placement on the ballot. (Added 12/11/2012)

1432 CITY OF SANTA CRUZ CHILDREN’S FUND.

Children’s Fund Established. The “Santa Cruz Children’s Fund” is hereby established within the City’s General Fund.
The goals of the Santa Cruz Children’s Fund are to support enhancement and expansion of evidenced-based programs to prioritize access to early childhood development, prevention, and vulnerable youth programs, without supplanting existing City of Santa Cruz services or investments.
Notwithstanding any other provision of law, effective July 1, 2022, the Santa Cruz Children’s Fund shall receive funds from the City’s General Fund equivalent to twenty percent (20%) of the City of Santa Cruz’s audited total actual annual unrestricted revenues derived from the City’s Cannabis Business tax. The annual amount of revenue for the next fiscal year shall be estimated by the City Manager no later than January 15 of each year, beginning January 15, 2022. Twenty percent (20%) of the estimated amount of the City’s unrestricted Cannabis Business Tax revenue for the next fiscal year shall be deposited in the Fund no later than July 1 of each year. The Director of Finance shall publish the audited actual amount of Cannabis Business Tax revenues for the prior fiscal year not later than January 15 of each subsequent year, beginning January 15, 2022. Differences between the amount of estimated revenues deposited in the Fund and the audited actual amount of revenues for a fiscal year shall be reconciled by an adjustment in the amount deposited in the Fund for the following fiscal year.
Monies in the Santa Cruz Children’s Fund shall be appropriated by the City Council to support enhancement and expansion of evidenced-based programs to prioritize access to early childhood development, youth prevention, and vulnerable youth programs. The City Council shall designate a community oversight panel to make recommendations on the use of future revenues in a manner consistent with this Section which may include, but shall not be limited to, representatives of the following:

A. The City’s Parks and Recreation Commission;

B. The Santa Cruz City School District;

C. First Five Santa Cruz;

D. Youth Organizations;

E. The City Council.

Monies in the Santa Cruz Children’s Fund shall not be appropriated or expended for:

A. any service which merely benefits children and youth incidentally;

B. acquisition, lease, or maintenance of any capital item or real property not for primary and direct use by children and youth; or

C. any service for which a fixed or minimum level of expenditure is mandated by state or federal law, to the extent of the fixed or minimum level of expenditure. (Added 11/2/2021 [Ord. 2021-22 § 4])