$35,000 set aside for switch from at-large to district elections

In plain English

Capitola would move $35,000 out of its General Fund Contingency Reserve to pay a reimbursement demand from the law firm Shenkman & Hughes PC. The firm sent the City a letter on March 13, 2026 claiming Capitola's at-large city council elections violated the California Voting Rights Act of 2001; the City then went through the state process and, on August 27, 2026, adopted district-based elections with a district map and election sequence. State law (California Elections Code Section 10010(f)) allows the party that sent such a notice to be reimbursed for certain costs, and the firm submitted documentation totaling $39,526.45 while offering to accept $35,000. A yes vote authorizes the budget change so the payment can be made.

Capitola taxpayers cover this payment out of the City's contingency reserve, the money set aside for unplanned expenses, and the staff report puts the full cost of switching to district elections at $128,864 — a change that also means council members will be elected by district rather than citywide.

Key facts

$35,000 would be transferred from the General Fund Contingency Reserve and appropriated for legal/professional services tied to the election system change.
The firm's documentation identifies total costs of $39,526.45; Shenkman & Hughes PC offered to accept $35,000, which the report says is below the statutory reimbursement limit cited in the request.
The City received the written California Voting Rights Act notice on March 13, 2026, and the Council adopted a district-based election system, map, and election sequence on August 27, 2026.
The reimbursement request includes an invoice from Compass Demographics, Inc. for demographic services plus a time and task chart for attorney work by Shenkman & Hughes PC.
Other districting costs listed: $35,000 for the Demographer, $10,000 for public outreach, and approximately $48,464 in legal fees, for a total cost of $128,864.
The FY 2026-27 budget was adopted June 11, 2026; this expense was not included in it, which staff says is why the contingency reserve is the appropriate source.

Reasons to support

California Elections Code Section 10010(f) provides for reimbursement of costs incurred in connection with a successful challenge to an at-large election system, and the City completed that transition on August 27, 2026.
The $35,000 offer is less than the $39,526.45 in documented costs and below the statutory reimbursement cap cited in the request, so paying it settles the demand for less than what was claimed.
The contingency reserve exists for costs not anticipated in the adopted budget, and the amendment does not increase total General Fund spending — it reallocates money the City already has.

Reasons to oppose or change it

The $35,000 comes out of the contingency reserve, leaving less set aside for other unplanned needs during the fiscal year that runs through June 30, 2027.
This payment is on top of roughly $93,464 in other districting costs listed by staff ($35,000 demographer, $10,000 outreach, about $48,464 in City legal fees), bringing the total to $128,864 of General Fund money for the election change.
The documented amount is $39,526.45 and the offer is $35,000; a council member could ask whether the underlying demographic invoice and attorney time chart justify the full amount before approving payment.

Official wording

Budget Amendment – California Voting Rights Act Recommended Action: Adopt a resolution amending the Fiscal Year 2026-27 General Fund budget to appropriate $35,000 from the General Fund Contingency Reserve to fund reimbursement costs associated with the City's transition from an at-large election system to a district-based election system pursuant to the California Voting Rights Act of 2001 (CVRA).

Official agenda

Summary written by claude-opus-5 from the agenda and the Staff report (agenda packet, pages 111-113). It can contain mistakes. The official documents govern.