Capitola City Council finalizes budget proposal, heads to final adoption consideration at June 12 meeting

CAPITOLA, Calif. (KION-TV) - Capitola's City Council is one step closer to finalizing their budget for the next fiscal year. While city officials say they're expecting balanced budgets for the next two years, they’re also warning of potential budget issues down the line.

The city’s budget is now heading to a final budget adoption at their June 12 City Council meeting.

Thursday’s final budget meeting revealed the city is expecting an ending fund balance of roughly $650,000 by June 2026. Still, the city highlights some costs they’re watching closely.

“The major threat to our budget continues to be PERS and increasing costs. Our UAL has gone up from $21 million to $35 million in the last two years," Capitola Finance Director Jim Malberg said.

Malberg also highlighted the city’s heavy reliance on sales tax and the transient occupancy tax. The city’s economic development strategy highlighting redevelopment including the Capitola Mall.

The city also mentioned the Capitola Mall as a major driver of sales tax. Capitola’s finance director also brought up funding and grant suggestions for some projects.

City Council later allocated funds for projects such as Esplanade Park, a Monterey Park playground, and economic development.