Supervisors Send CORE Nonprofit Funding Overhaul Back for December Rewrite

Board of Supervisors • Santa Cruz CountySeptember 29, 2026

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Santa Cruz County's nonprofit safety net got a reprieve Sept. 29, 2026. After hours of testimony from food banks, senior programs, clinics and parks advocates, the Board of Supervisors voted 5-0 to shelve a proposed CORE grant overhaul. The subcommittee must return with amended recommendations by the first December meeting, while staff warn that the county's structural budget gap could more than double by 2031-32.

CORE funding overhaul sent back 5-0; existing three-year nonprofit contracts continue for now
Structural gap projected to grow from about $30M to over $70M by 2031-32
Scotts Valley EIFD approved 5-0: 25% of future county tax growth, capped at $50M
Mountain residents demand road repairs and safe evacuation routes before winter
Budget adopted on consent 5-0, with Supervisor Manu Koenig registering a personal no

CORE Overhaul Hits Pause

Why it matters: CORE grants fund nonprofit food, housing, health and prevention programs. The proposed rewrite would decide which programs survive and whether current three-year contracts end a year early.

Where things stand: The subcommittee proposed narrowing CORE to a safety-net focus: food, housing and homelessness, and health. The package included a $1.5M food set-aside for three providers, $1.5M for Housing for Health, three funding tiers, a review role for the Community Foundation of Santa Cruz County on requests up to $80,000, an ad hoc board subcommittee, and an end to year three of existing contracts.

"We really wanted a simpler, more transparent, data-driven funding program focused on the critical needs in our community at this time," said Kimberly De Serpa, Supervisor, District 2. She said Gray Bears, Meals on Wheels and Second Harvest would receive the food money. Justin Cummings, Supervisor, District 3, said that under the old process, staff cited public procurement rules to deny supervisors access to applications, comments and scoring.

Seniors and food providers lined up in support. Dana Wagner, Director, Meals on Wheels for Santa Cruz County, said stable multi-year funding would help cut the program's waitlist. Jennifer Merchant, Executive Director, Gray Bears, said seniors on fixed incomes are going hungry. Ray Cancino, CEO, Community Bridges, and Clay Kemp, Executive Director, Seniors Council, also backed the direction.

The other side: Mariah Roberts of County Park Friends said the plan would end Park Rx contracts early and urged delay until after the November elections. Maria Cadenas, Executive Director, Ventures, called CORE a tiny share of the budget and asked the Board to wait for Measure E results. Stephen Matsey, Program Director, Elder Day, Community Bridges, requested $500,000 and warned the adult day health program could close without CORE funding. Kristen Glenn of Dientes Community Dental Care asked the Board to rebalance set-asides so health care competes on equal footing. Reverend Beth Love of Eat for the Earth noted the framework does not mention nutrition or health prevention.

The dais split along several lines. "I think where my sticking point, where I'm having a hard time, is just to cut the 3-year cycle," said Felipe Hernandez, Supervisor, District 4. Monica Martinez, Board Chair, questioned why organizations that could "kind of lobby to get their carve-out done in advance" should skip the process required of everyone else. Koenig objected on fiscal grounds: "I just don't think we should be making any commitments for next year when we've got a $30 million hole to solve for."

Staff raised feasibility concerns as well. "We are concerned about the timeline, to be honest, in terms of the length of time to terminate contracts," said Kimberly Peterson, Deputy CEO. Staff said contracts can take up to six months to process.

Decisions and stakeholder impacts: Cummings withdrew his motion to adopt all nine recommendations. His substitute motion, seconded by De Serpa, accepts and files the report and directs the subcommittee to return with amended recommendations. It passed (For: 5, Against: 0, Absent: 0). Food and senior providers keep their momentum. Parks, prevention and workforce groups gain time to argue their case.

What's next: Amended recommendations are due on or before the first December 2026 meeting.

Deficit Warning Shadows New Budget

Why it matters: Supervisors formally adopted the fiscal year 2026-27 budget the same day staff warned that operating costs are outpacing revenue. Federal cuts under HR 1, which affect Medi-Cal and CalFresh, add pressure on top of that gap.

Where things stand: The adopted budget totals $1.4 billion, including an $861.5M general fund. It uses $46.3M in one-time resources, including $30.5M from reserves. Reserves fall to 12.4%, between the county's 10% minimum and 15% target.

"The first challenge is structural. It relates to the cost of maintaining current operations, which is growing faster than our ongoing revenue," said Nicole Coburn, County Executive Officer. Costs are growing 6.1% a year against 5% revenue growth. The gap is "projected to be about $30 million in the next fiscal year growing to more than $70 million by 2031-32," said Sven Stafford, Deputy CEO.

Asked by Cummings about revenue options, Coburn pointed to a transient occupancy tax, the levy on hotel stays, noting that the City of Scotts Valley has a TOT increase on its November ballot. Cummings also asked about labor engagement. Koenig questioned limited-term funding, disaster bond payments and litter abatement.

The other side: Koenig cast a personal no on the budget (item 18) within the consent vote. "It overspends $30 million of our general fund, $30 million more than our revenues, and draws down our reserves to a dangerous level," he said, adding that the budget neglects roads.

Decisions and stakeholder impacts: The Board accepted the supplemental report, appropriated $3.5M in new state Medi-Cal and CalFresh administrative funding, and returned $1.5M to human services reserves (For: 5, Against: 0, Absent: 0). Dr. Carroll, Deputy Director, Human Services Department, explained that the department chose overtime over permanent hires to meet funding mandates. Iris Bojorquez of the Community Action Board of Santa Cruz County said its Medi-Cal outreach has reached 10,000 residents. Erica of Second Harvest Food Bank thanked the Board for prioritizing community needs.

What's next: Staff return by Dec. 15 with FY2027-28 priorities.

Scotts Valley Bets on Future Growth

The basics: An Enhanced Infrastructure Financing District (EIFD) redirects a share of future property-tax growth within a set boundary to pay for infrastructure. Existing revenue is not affected.

Why it matters: The county is pledging part of its future tax growth in exchange for projected long-term gains. "This is not a new tax, and property tax rates don't change," Coburn said.

Where things stand: The district covers about 236 acres and would raise about $40M in present value. "The county contributes 25% of its future increment for no more than 30 years," said Peter Detlefs, Principal Administrative Analyst, with the county's share capped at $50M. He said the plan "is projected to produce $18.4 million in present value net benefit to the general fund over 50 years." Joe Diegas, a consultant with Cosmont, said bonds can only be issued against actual revenue, not projections, and would be around $5M. Councilmember Chems of Scotts Valley said the effort dates to 2019.

The other side: Marilyn Garrett, a public commenter, called the plan risky, citing overdevelopment and battery-storage fire threats. Becky Steinbrunner supported the plan but asked whether affordable housing units pay no property tax, and how that would affect county income.

Decisions and stakeholder impacts: Cummings moved approval, seconded by Hernandez (For: 5, Against: 0, Absent: 0). He urged "project labor agreements" with local labor groups, along with wage-theft protections, on funded projects.

What's next: The Public Financing Authority holds a second hearing Oct. 19.

Mountain Roads Crowd Public Comment

Why it matters: Residents of Mount Charlie Road and North Rodeo Gulch tied deferred road maintenance to wildfire evacuation, emergency access and home values ahead of a forecast El Niño winter.

Where things stand: Speakers described a 50-foot mudslope at Mount Charlie, hanging driveways, and one-lane sections of Rodeo Gulch. A Mount Charlie resident identified as Kathy described a failed culvert and asked supervisors for votes to fund repairs. Lee Smith, a North Rodeo Gulch resident, said fire trucks fill the one-lane sections. Susan Tatsui-Darcy, a leader with NRG Firewise, urged the county to resolve liability concerns so the sheriff could observe Oct. 3 evacuation drills. A Rodeo Gulch Road caller, Jim, proposed a countywide policy of fully opening all roads before improving any.

Decisions and stakeholder impacts: The Board took no action. "The Board of Supervisors is required to agendize items that they discuss," Martinez explained. Hernandez separately raised the idea of county emergency declarations to prompt the governor toward CEQA exemptions.

What's next: Coburn offered to bring a roads item back to the Board.

Minor Items

CEDAW ordinance approved in concept 5-0. It adopts the principles of the Convention on the Elimination of All Forms of Discrimination Against Women, requires CEO reports at least every three years, and adds no new appropriations.
BKF Engineers received a $199,955 Phase 1 contract for Streamline Santa Cruz County code amendments, approved 4-0 with Hernandez recorded absent. Cummings added direction for at least one community meeting.
Proposition 44 opposition adopted on consent. Koenig said it "sets a rigid 90% spending formula," and Anita Aguirre, CEO, Santa Cruz Community Health, said it would take $1.7 billion from health centers statewide.
Small Business Development Center reported 32 new businesses and about 60 training events, and said regional restructuring risk is easing. No action was taken.
Moss Landing battery fire: Callers urged a county action plan after the Sept. 18 fire. Steinbrunner said Environmental Health called it a Monterey County matter.

Looking Ahead

Ballots mail Oct. 2, with in-person voting starting Oct. 5, according to Tricia Weber, County Clerk Registrar of Voters. The North Rodeo Gulch evacuation drill is set for Oct. 3. The EIFD authority meets Oct. 19, and the CEDAW ordinance second reading is Oct. 20. Budget priorities come back by Dec. 15, and CORE returns by the first December meeting.

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