Agenda packet — Capitola City Council, June 27, 2024

REVISED 6/26/2024 2:00 PM
City of Capitola
City Council Meeting Agenda
Thursday, June 27, 2024 – 5:00 PM
City Council Chambers
420 Capitola Avenue, Capitola, CA 95010
Mayor: Kristen Brown
Vice Mayor: Yvette Brooks
Council Members: Joe Clarke, Margaux Morgan, Alexander Pedersen Closed Session – 4 PM
Closed Sessions are not open to the public and held only on specific topics allowed by State Law (noticed below). An announcement regarding the items to be discussed in Closed Session will be made in the City Hall Council Chambers prior to the Closed Session. Members of the public may, at this time, address the City Council on closed session items only. There will be a report of any final decisions in City Council Chambers during the Open Session Meeting.
i. CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code § 54957.6) Negotiator: Mark Wilson, Labor and Employment Practice, Burke, Williams, & Sorensen, LLP; Samantha Zutler, City Attorney
Employee Organizations: Mid-Management Employees, Police Captains, Management, and City Manager
ii. PUBLIC EMPLOYEE PERFORMANCE EVALUATION (Gov’t Code §54957(b)) City Council’s Performance Evaluation of the City Attorney Regular Meeting of the Capitola City Council – 5 PM
All correspondence received prior to 5:00 p.m. on the Wednesday preceding a Council Meeting will be distributed to Councilmembers to review prior to the meeting. Information submitted after 5 p.m. on that Wednesday may not have time to reach Councilmembers, nor be read by them prior to consideration of an item.

1. Roll Call and Pledge of Allegiance
Council Members Joe Clarke, Margaux Morgan, Alexander Pedersen, Yvette Brooks, and Mayor Kristen Brown.

2. Additions and Deletions to the Agenda

3. Presentations
Presentations are limited to eight minutes.

A. Mayor's Proclamation Honoring July 2024 as Park and Recreation Month

4. Report on Closed Session

5. Additional Materials
Additional information submitted to the City after distribution of the agenda packet.

A. Item 9A - Applications for the Finance Advisory Committee Received After Publication of the Agenda Packet & Correspondence Received
1 City Council Meeting Agenda – June 27, 2024
City of Capitola Page 2
B. Item 9B - Correspondence Received

6. Oral Communications by Members of the Public
Oral Communications allows time for members of the Public to address the City Council on any “Consent Item” on tonight’s agenda, or on any topic within the jurisdiction of the City that is not on the “General Government/Public Hearings” section of the Agenda. Members of the public may speak for up to three minutes, unless otherwise specified by the Mayor. Individuals may not speak more than once during Oral Communications. All speakers must address the entire legislative body and will not be permitted to engage in dialogue. A maximum of 30 minutes is set aside for Oral Communications.

7. Staff / City Council Comments
Comments are limited to three minutes.

8. Consent Items
All items listed as “Consent Items” will be enacted by one motion in the form listed below. There will be no separate discussion on these items prior to the time the Council votes on the action unless members of the City Council request specific items to be discussed for separate review. Items pulled for separate discussion will be considered following General Government. Note that all Ordinances which appear on the public agenda shall be determined to have been read by title and further reading waived.

A. City Council Meeting Minutes
Recommended Action: Approve minutes from the regular meeting on June 13, 2024.

B. City Check Registers
Recommended Action: Approve check registers dated May 31, 2024, and June 14, 2024.

C. Opal Cliffs School Lease Agreement
Recommended Action: Authorize the City Manager to enter a lease agreement with the Soquel Union Elementary School District for classroom space at Opal Cliffs School beginning on July 1, 2024.

D. Afterschool Scholarship & Equity Swim Donation
Recommended Action: Accept a donation of $20,000 for Afterschool Rec Club participant scholarships and $16,000 for the Equity Swim Program from the Soquel Union Elementary School District and authorize the City Manager, or his designee, to execute a Memorandum of Understanding between the City of Capitola and the Soquel Union Elementary School District.

E. Santa Cruz World Surfing Reserve
Recommended Action: Adopt a resolution to incorporate Capitola into the Santa Cruz World Surfing Reserve.

F. Wharf Grand Opening Special Event Permit
Recommended Action: Approve a new single-day Major Special Event Permit on September 25, 2024, for the Capitola Wharf Grand Opening and Ribbon Cutting.

9. General Government / Public Hearings
All items listed in “General Government / Public Hearings” are intended to provide an opportunity for public discussion of each item listed. The following procedure pertains to each General Government item: 1) Staff explanation; 2) Council questions; 3) Public comment; 4) Council deliberation; 5) Decision.

A. City Council Appointments to City Advisory Bodies
2 City Council Meeting Agenda – June 27, 2024
City of Capitola Page 3
Recommended Action: Appoint members of the public to the City of Capitola Finance Advisory Committee.

B. 2024 General Municipal Election
Recommended Action: 1) Adopt a resolution ordering the 2024 General Municipal Election, requesting the Santa Cruz County Department of Elections conduct the election, and requesting consolidation of the General Municipal Election in the City of Capitola on Tuesday, November 5, 2024; and
2) Adopt a resolution submitting a ballot measure to Capitola voters to increase the City’s transactions and use tax through December 31, 2034 at the General Municipal Election to be held on Tuesday, November 5, 2024, requesting consolidation by the Santa Cruz County Board of Supervisors of the election regarding said measure with the Statewide General Election to be held on the same date and that Santa Cruz County provide election services with full reimbursement by the City of Capitola, directing the City Attorney to prepare an impartial analysis, authorizing the City Council to appoint two City Council Members to an ad hoc subcommittee to submit an argument supporting the Measure, and releasing the rebuttal argument.

C. VDUBlicious Car Show
Recommended Action: Approve or deny a request for a new Major Special Event Permit from the VDUBlicious Car Club requesting to host a car show in the Capitola Village on August 10, 2024, from 7:00 am to 5:00 pm.

D. Cliff Drive Resiliency Project
Recommended Action: Receive a progress report on the Cliff Drive Resiliency Project and provide feedback on design alternatives.

E. Memorandum of Understanding with the Mid-Management Employee Group and Management and City Manager Compensation Plans
Recommended Action: Authorize the City Manager to: 1) Execute a successor agreement to the existing Memorandum of Understanding with negotiated changes for the Mid-Management Employee Group, subject to technical corrections and 2) Execute a successor agreement to the existing Management Compensation Plan; and Authorize the Mayor to execute the Eighth Amendment to the City Manager Employment Agreement.

F. Fiscal Year 2024-2025 Budget and Capital Improvement Program Recommended Action: 1) Adopt a resolution adopting the Fiscal Year 2024-25 City Budget and Capital Improvement Program; and 2) adopt a resolution adopting the associated Salary Schedule and new job descriptions.

10. Adjournment - The next regularly scheduled City Council meeting is on July 25, 2024 at 6:00 PM.
_____________________________________________________
How to View the Meeting
Meetings are open to the public for in-person attendance at the Capitola City Council Chambers located at 420 Capitola Avenue, Capitola, California, 95010.

Other ways to Watch:

Spectrum Cable Television channel 8
City of Capitola, California YouTube Channel
To Join Zoom Application or Call in to Zoom:
3 City Council Meeting Agenda – June 27, 2024
City of Capitola Page 4
Meeting
link: https://us02web.zoom.us/j/83328173113?pwd=aVRwcWN3RU03Zzc2dkNpQzRWVXAydz09 Or dial one of these phone numbers: 1 (669) 900 6833, 1 (408) 638 0968, 1 (346) 248 7799 Meeting ID: 833 2817 3113
Meeting Passcode: 678550
How to Provide Comments to the City Council
Members of the public may provide public comments to the City Council in-person during the meeting.

If you are unable to attend in-person, please email your comments to [email protected] and they will be included as a part of the record for the meeting. Please be aware that the City Council will not accept comments via Zoom.

Notice regarding City Council: The City Council meets on the 2nd and 4th Thursday of each month at 6:00 p.m. in the City Hall Council Chambers located at 420 Capitola Avenue, Capitola.

Agenda and Agenda Packet Materials: The City Council Agenda and the complete Agenda Packet are available for review on the City’s website and at Capitola City Hall prior to the meeting. Need more information? Contact the City Clerk’s office at 831-475-7300.

Agenda Materials Distributed after Distribution of the Agenda Packet: Pursuant to Government Code §54957.5, materials related to an agenda item submitted after distribution of the agenda packet are available for public inspection at the Reception Office at City Hall, 420 Capitola Avenue, Capitola, California, during normal business hours.

Americans with Disabilities Act: Disability-related aids or services are available to enable persons with a disability to participate in this meeting consistent with the Federal Americans with Disabilities Act of 1990. Assisted listening devices are available for individuals with hearing impairments at the meeting in the City Council Chambers. Should you require special accommodations to participate in the meeting due to a disability, please contact the City Clerk’s office at least 24 hours in advance of the meeting at 831-475-7300. In an effort to accommodate individuals with environmental sensitivities, attendees are requested to refrain from wearing perfumes and other scented products.

Si desea asistir a esta reunión pública y necesita ayuda - como un intérprete de lenguaje de señas americano, español u otro equipo especial - favor de llamar al Departamento de la Secretaría de la Ciudad al 831-475-7300 al menos tres días antes para que podamos coordinar dicha asistencia especial o envié un correo electrónico a [email protected].

Televised Meetings: City Council meetings are cablecast “Live” on Charter Communications Cable TV Channel 8 and are recorded to be rebroadcasted at 8:00 a.m. on the Wednesday following the meetings and at 1:00 p.m. on Saturday following the first rebroadcast on Community Television of Santa Cruz County (Charter Channel 71 and Comcast Channel 25). Meetings are streamed “Live” on the City’s website at by clicking on the Home Page link “Meeting Agendas/Videos.” Archived meetings can be viewed from the website at any time. 4 5
Item 3 A.
• June 29th Family Fun Day
• July 3rd Family Wharf Swim
• July 6th Parent’s Night Out
• July 11th JG Alumni Comp
• July 12th Food Truck Friday
• July 18th Jade St Field Games
6 Item 3 A.

We’re moving to Opal Cliff
School at Jade St Park!
7 Item 3 A.

Boards and Commissions Application
Thank you for your interest in serving on a City of Capitola Advisory Group. Please fill out the following form with your information. Appointments are made at a public City Council meeting.

Application For:

First Name *
Last Name *
Email*
Current Address *
Telephone (Home)
Telephone (Mobile)*
Application For:

Art and Cultural Commission - Artist
Art and Cultural Commission - Arts Professional
Art and Cultural Commission - At Large
Commission on the Environment
Finance Advisory Committee - At Large
Finance Advisory Committee - Business Representative
Historical Museum Board
Planning Commission
Other:

Applicant Information
Anthony
Guajardo
City
Capitola
State / Province / Region
Ca
Postal / Zip Code
95010
Country
USA
Street Address
Address Line 2
8 Item 5 A.

Are you a Capitola resident? *
Residential Neighborhood:

Are you applying as a Youth Member to an Advisory Group?* Qualifications
Additional Attachments
Acknowledgement Required *
Signature *
No
No
Youth Members are encouraged to participate with City Boards, Committees, and Commissions.

Occupation:

Please describe your qualifications and interest in serving on this Board/Commission/Committee:* Business owner
As a local business owner, I would like to better understand the budgets of the city and how budgets are allocated amongst city departments to best serve the community.

Please note that appointment to this position may require you to file a conflict of interest disclosure statement or complete additional trainings with the City Clerk. This information is a public record and these statements are available to the public on request.

Acknowledged
All information contained in this page is public data and will be made available for public review upon request. Qualifications and interests of applicants will be provided to the City Council in a public forum and will be reviewed before appointments are made. Questions regarding this application and appointment process should be directed to the Capitola City Clerk. 9 Item 5 A.

Application For:

First Name *
Last Name *
Email*
Current Address *
Telephone (Home)
Telephone (Mobile)*
Application For:

Applicant Information
Matt
Arthur
City
Capitola
State / Province / Region
CA
Postal / Zip Code
95010
Country
USA
Street Address
Address Line 2
10 Item 5 A.

Are you a Capitola resident? *
Residential Neighborhood:

Are you applying as a Youth Member to an Advisory Group?* Qualifications
Additional Attachments
Acknowledgement Required *
Signature *
Yes
Jewel Box
No
Youth Members are encouraged to participate with City Boards, Committees, and Commissions.

Occupation:

Please describe your qualifications and interest in serving on this Board/Commission/Committee:* Capitola Village Business Owner
BIA Board Member
Chief Advisory Committee
Capitola Village Business owner since 2004
Please note that appointment to this position may require you to file a conflict of interest disclosure statement or complete additional trainings with the City Clerk. This information is a public record and these statements are available to the public on request.

Application For:

First Name *
Last Name *
Email*
Current Address *
Telephone (Home)
Telephone (Mobile)*
Application For:

Applicant Information
Keith
Cahalen
City
Capitola
State / Province / Region
CA
Postal / Zip Code
95010
Country
USA
Street Address
Address Line 2
12 Item 5 A.

Are you a Capitola resident? *
Residential Neighborhood:

Are you applying as a Youth Member to an Advisory Group? * Qualifications
Additional Attachments
Acknowledgement Required *
Signature *
Yes
No
Youth Members are encouraged to participate with City Boards, Committees, and Commissions.

Occupation:

Please describe your qualifications and interest in serving on this Board/Commission/Committee:* Regional Sales Manager
Qualifications
* Been a citizen of Capitola for 37 years and participated actively in local community events & charities * Participation in City of Capitola Local Government Academy * President of < $1 million retail & software company
* Author of > 12 business plans as a consultant and author for $25 million electronic manufacturing company * Sold electronic security to city and county governments for 30 years Interest
* With the City of Capitola facing possible financial shortfalls in the near future, interest in helping find additional sources or revenue
* Help achieve concurrence with other committee members of financial plans and goals of the city * Assistance with passing any new revenue efforts - such as raised sales tax or bond Please note that appointment to this position may require you to file a conflict of interest disclosure statement or complete additional trainings with the City Clerk. This information is a public record and these statements are available to the public on request.

Application For:

First Name *
Last Name *
Email*
Current Address *
Telephone (Home)
Telephone (Mobile)*
Application For:

Applicant Information
Leslie
Nielsen
City
Capitola
State / Province / Region
CA
Postal / Zip Code
95010
Country
United States
Street Address
Address Line 2
14 Item 5 A.

Are you a Capitola resident? *
Residential Neighborhood:

Are you applying as a Youth Member to an Advisory Group?* Qualifications
Additional Attachments
Acknowledgement Required *
Signature *
Yes
Cliffwood Heights
No
Youth Members are encouraged to participate with City Boards, Committees, and Commissions.

Occupation:

Please describe your qualifications and interest in serving on this Board/Commission/Committee:* Retired Finance and Operations Leaders
I have a career span of over 30 years in finance & operations roles, including 3 years at the Chief Business Officer for the LGUSD, where government and fund accounting were used. I understand the Brown Act, doing business in a public landscape and the need for fiscal responsibility balancing the community needs with budgets. I was made aware of the need for qualified candidates and have the time and ability to serve. https://www.linkedin.com/in/leslie-nielsen-217b935/
Please note that appointment to this position may require you to file a conflict of interest disclosure statement or complete additional trainings with the City Clerk. This information is a public record and these statements are available to the public on request.

Application For:

First Name *
Last Name *
Email*
Current Address *
Telephone (Home)
Telephone (Mobile)*
Application For:

Applicant Information
Daniel
Castagnola
City

CAPITOLA
State / Province / Region
CA
Postal / Zip Code
95010
Country
United States
Street Address
Address Line 2
16 Item 5 A.

Are you a Capitola resident? *
Residential Neighborhood:

Are you applying as a Youth Member to an Advisory Group?* Qualifications
Additional Attachments
Acknowledgement Required *
Signature *
Yes
Village
No
Youth Members are encouraged to participate with City Boards, Committees, and Commissions.

Occupation:

Please describe your qualifications and interest in serving on this Board/Commission/Committee:* Business Owner in Village for 8 years
I live and work in the Village and have a vested interest in the vision and future financial well being.

Wednesday, June 26, 2024 at 1:50:58 PM Pacific Daylight Time

Page 1 of 1 ends

Subject: Agenda Item 9:A for 6/27/24 City Council Mee<ng Date: Tuesday, June 25, 2024 at 8:48:41 PM Pacific Daylight Time From: Anthony Guajardo
To: City Council
Council members,
Due to the addi<onal applica<ons for the vacant openings of the Finance Advisory CommiOee; consider an interview or ques<onnaire for applicants to answer ques<ons or provide further informa<on to yourselves or city staff. Thus allowing more informa<on and data about each applicant to make your decision.

Thank you for your considera<on
Anthony Guajardo
Mijo’s Taqueria
831.465.0228 | c: 408.824.4928
[email protected]
www.mijostaqueria.com
18 Item 5 A.
1 Gautho, Julia
From: [email protected]
Sent: Monday, June 24, 2024 6:39 PM
To: Brooks, Yvette; Brown, Kristen; Margaux Morgan; Clarke, Joe; [email protected]
Cc: Gautho, Julia; Albert Lee Strickland; Lynne Ann DeSpelder Subject: Thursday's City Council Meeting 6-27-24 Public Comment Follow Up Flag: Follow up
Flag Status: Flagged
Hello all,
Julia checked on the previous discussion about increasing and extending our City's sales tax. She sent the following information to us this morning: (Thanks, Julia for your helpful research emailed here to answer our question about introduction and discussions you all had about replacing Measure F with one that generated double the tax levy and initiates it before F expires.) She reports:

Hi Lynne,

I received your voicemail this morning with questions about the proposed sales tax ballot measure. After reviewing past meeting minutes and footage, I’d like to offer the following information.

The City Council reviewed the results of a polling survey and provided feedback to staff on the ballot measure language on April 11th. During this meeting, the City Council suggested that staff research other known ballot measures to ensure that Capitola remains competitive to voters, and directed staff to return in June for approval on the ballot question (including the ten-year timeline that was proposed in April). Final approval of the ballot question and the ten year timeline will take place Thursday.

Thanks for your interest,
Having seen and heard the Council's April 11th thoughts about the sales tax proposal, as it is currently written, it does not reflect your initial discussion when survey results initiated thoughts about doubling the sales tax and extending the number of years in place. This measure is on your agenda for the 6/27 meeting.

Please revive your discussion and reach a decision to shorten the time this new tax measure will be in effect.

Thank you, Lynne and Al
19 Item 5 B.

Wednesday, June 26, 2024 at 1:51:16 PM Pacific Daylight Time

Page 1 of 1 ends

Subject: Doubling the Measure F Sales Tax
Date: Tuesday, June 25, 2024 at 8:28:53 PM Pacific Daylight Time From: John
To: City Council, Gautho, Julia
Our conGnued inability to accept the present is already here, and that these long failed patches on bad budgeGng are no longer easily solved by mortgaging the future bc it’s already been mortgaged is a sadness.

The soluGon is addressing the budget problems. Not begging for more money from locals in a way that essenGally harasses the poor. Again Alex, is it really worth aligning with such people for an ED posiGon? Did repeatedly promise you you’d get one if you won. We live in a simple place. 20 Item 5 B.

Capitola City Council
Agenda Report
Meeting: June 27, 2024
From: City Manager Department
Subject: City Council Meeting Minutes
Recommended Action: Approve minutes from the regular meeting on June 13, 2024.

Background: Attached for City Council review and approval are the draft minutes from the regular meeting on June 13, 2024.

Attachments:

1. Regular Meeting Minutes 6/13
Report Prepared By: Julia Gautho, City Clerk
Approved By: Jamie Goldstein, City Manager
21 Item 8 A.

City of Capitola
City Council Meeting Minutes
Thursday, June 13, 2024 – 6:00 PM
City Council Chambers
420 Capitola Avenue, Capitola, CA 95010
Mayor: Kristen Brown
Vice Mayor: Yvette Brooks
Council Members: Joe Clarke, Margaux Morgan, Alexander Pedersen Closed Session – 5 PM
i. CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code § 54957.6) Negotiator: Mark Wilson, Labor and Employment Practice, Burke, Williams, & Sorensen, LLP (Association of Capitola Employees, Mid-Management Employees, Police Captains, and Management); Samantha Zutler, City Attorney (Confidential Employees and City Manager) Employee Organizations: Association of Capitola Employees, Mid-Management Employees, Confidential Employees, Police Captains, Management, and City Manager ii. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Gov’t. Code§54956.9(d)(2).

One Case
Regular Meeting of the Capitola City Council – 6 PM

1. Roll Call and Pledge of Allegiance – The meeting was called to order at 6:03 PM. In attendance: Council Members Clarke, Morgan, Pedersen, Vice Mayor Brooks, and Mayor Brown.

2. Additions and Deletions to the Agenda – None

3. Presentations
A. The Mayor presented a Proclamation Honoring Elder Abuse Month.

B. The Mayor presented a Proclamation Honoring the 150th Anniversary of "Camp Capitola's" Founding.

4. Report on Closed Session – The City Council met and discussed two items on the Closed Session agenda. No reportable action was taken.

5. Additional Materials
A. Item 8F - Staff Memorandum and Updated Attachments 1 and 3 B. Item 8H - Updated Staff Report and Attachments
C. Item 9A - Correspondence Received

6. Oral Communications by Members of the Public
 James Ewen Whitman
 Goran Klepic
 Marilyn Garrett
 Christine McBroom
22 Item 8 A.

City Council Meeting Minutes – June 13, 2024
City of Capitola Page 2

7. Staff / City Council Comments
 City Manager Goldstein introduced Matteo Tanado, an intern from the Cabrillo Public Service Fellowship Program.
 Recreation Division Manager Bryant LeBlond provided the City Council with updates about summer programming.
 Community Development Director Herlihy provided the City Council with an update about the City’s Housing Element submission.
 Council Member Clarke requested that staff place an agenda item on the June 27th agenda for the Save the Wave Coalition and commended the Police Department and Safety Foundation on the Capitola Car Show event.
 Council Member Morgan commended the Police Department on the Car Show event and requested that staff look into resident access to Junior Guard Registration.  Vice Mayor Brooks recognized the passing of Dexter Ray and requested that staff look into an ordinance allowing golf carts to drive within the community.  Mayor Brown shared comments in honor of the passing of former Council Member Jerry E.

Clarke.

8. Consent Items
A. City Council Meeting Minutes
Recommended Action: Approved minutes from the regular meeting on May 23, and the special meeting on May 30, 2024.

B. City Check Registers
Recommended Action: Approved check registers dated May 3, May 10, May 17, and May 24, 2024.

C. City Investment Policy
Recommended Action: Adopted Resolution No. 4376 approving the City's Administrative Policy Number III-1, Investment Policy as recommended by the Finance Advisory Committee.

D. Year 2024-25 Appropriation Limit
Recommended Action: Adopted Resolution No. 4377 establishing the Fiscal Year 2024-25 appropriation limit.

E. Criminal Justice Council of Santa Cruz County
Recommended Action: Authorized the City Manager to sign the third amendment to the Joint Exercise of Powers Agreement re-establishing the Criminal Justice County of Santa Cruz County to provide for a one-year extension through June 30, 2025.

F. Construction Contract for Wharf Improvements
Recommended Action: 1) By motion, authorized the City Manager to execute Amendment 1 to the Professional Services Agreement with Fuse Architects, Inc. in the amount of $37,000, for a total contract amount of $73,100, for the final design of the Wharf Enhancement Project; and 2) Adopted Resolution No. 4378 authorizing the City Manager to execute a sole source Professional Services Agreement with Fuse Architects, Inc. in the amount of $199,325 for fabrication and installation of Capitola Wharf enhancements.

G. 2024-25 Road Maintenance and Rehabilitation
Recommended Action: Adopted Resolution No. 4379 adopting a list of road maintenance and rehabilitation projects for Fiscal Year 2024-25 funded by Senate Bill 1: the Road Repair and Accountability Act of 2017.

H. Memoranda of Understanding with Employee Groups
23 Item 8 A.

City Council Meeting Minutes – June 13, 2024
City of Capitola Page 3
Recommended Action: 1) Authorized the City Manager to execute a successor agreement to the existing Memoranda of Understanding with negotiated changes for the Confidential Employee Group and the Association of Capitola Employees, subject to technical corrections; and 2) adopted Resolution No. 4380 approving the updated salary schedule, effective June 23, 2024.

Motion to approve the Consent Calendar: Council Member Clarke Second: Council Member Morgan
Voting Yea: Council Members Clarke, Morgan, Pedersen, Vice Mayor Brooks, Mayor Brown

9. General Government / Public Hearings
A. Short-Term Wharf Use Agreement and Temporary Structure Plan Recommended Action: 1) Authorized the City Manager to sign a short-term use agreement between the City of Capitola and JFS Incorporated (dba Boat and Bait) for temporary structures located on the Capitola Wharf in substantially similar form, as approved by the City Attorney, as the attached agreement; and 2) approved the outlined temporary structure plan.

Chloe Woodmansee, Assistant to the City Manager, and Public Works Director Kahn presented the staff report.

Public Comments:
 James Ewen Whitman
The City Council thanked staff for their efforts to bring the lease to fruition.

Motion to authorize the City Manager to execute the lease agreement and approve the temporary structure plan: Vice Mayor Brooks
Second: Council Member Morgan
Voting Yea: Council Members Clarke, Morgan, Pedersen, Vice Mayor Brooks, Mayor Brown
B. Capitola Village and Wharf Business Improvement Area Assessments for Fiscal Year 2024-25 Recommended Action: Conduct the noticed public hearing and adopted Resolution No. 4381 levying the Fiscal Year 2024-25 Capitola Village and Wharf Business Improvement Area (CVWBIA) Assessments and accepting the CVWBIA Annual Plan and budget.

Finance Director Malberg presented the staff report.

Public Comments:
 Carin Hanna and Anthony Guajardo
Motion to adopt Resolution No. 4380: Council Member Morgan Second: Council Member Clarke
Voting Yea: Council Members Clarke, Morgan, Pedersen, Vice Mayor Brooks, Mayor Brown
C. FY 2023-24 City Fee Schedule
Recommended Action: Adopted Resolution No. 4382 amending the fee schedule for Fiscal Year (FY) 2023-24.

Finance Director Malberg presented the staff report.

Motion to adopt Resolution No. 4380: Council Member Morgan Second: Vice Mayor Brooks
24 Item 8 A.

City Council Meeting Minutes – June 13, 2024
City of Capitola Page 4
Voting Yea: Council Members Clarke, Morgan, Pedersen, Vice Mayor Brooks, Mayor Brown

10. Adjournment - The meeting adjourned at 6:52 PM in honor of Council Member Jerry E.

Clarke. The next regularly scheduled City Council meeting is on June 27, 2024, at 6:00 PM. ____________________________
ATTEST: Kristen Brown, Mayor
____________________________
Julia Gautho, City Clerk
25 Item 8 A.

Capitola City Council
Agenda Report
Meeting: June 27, 2024
From: Finance Department
Subject: City Check Registers
Recommended Action: Approve check registers dated May 31, 2024, and June 14, 2024.

Account: City Main
Date Starting Check # Ending Check # Payment
Count Amount
05/31/2024 106331 106381 53 $ 2,161,502.51
06/14/2024 106382 106512 140 $ 709,723.93
The main account check register dated May 24, 2024, ended with check #106330.

Account: Payroll
Date Starting
Check/EFT #
Ending
Check/EFT #
Payment
Count Amount
05/31/2024 5860 5861 123 $ 277,915.04
06/14/2024 5862 5863 143 $ 224,938.75
The payroll account check register dated May 17, 2024, ended with EFT #25105.

Following is a list of payments issued for more than $10,000 and descriptions of the expenditures:

Check/
EFT Issued to Dept Description Amount
106335 Bear Electrical Solutions
Inc PW Capitola Road Project Services $ 71,063.10
106337 Ben Noble CDD Housing Element
Implementation Services $ 15,015.00
106338 Betz Works Inc PW Park at Rispin Mansion Project Services $ 110,000.00
106344 Cushman Contracting Corp
Escrow PW April Wharf Project Retainer $ 92,614.00
106345 Cushman Contracting
Corporation PW April Wharf Resiliency and Public Access Project Services $ 1,759,665.92 1723 Wells Fargo Bank Fin April Credit Card Charges $ 14,449.16 106413 CSW-Stuber-Stroeh
Engineering Group PW Cliff Drive Resiliency Project Services $ 22,991.96 106441 Lewis Tree Service Inc PW Tree Removals $ 10,722.22 106455 MP Rail Trail Associates
LP CDD
City of Capitola
Predevelopment Loan – Draw
Request
$ 71,853.32
26 Item 8 B.
106481 SC Swimming CAFL Rec Swim Lessons $ 15,000.00
106488 Soquel Creek Water
District PW Monthly Irrigation & Water Services $ 15,880.26 106497 Tyler Technologies Fin Annual ERP Application
Services $ 34,345.86
106502 Visit Santa Cruz County Fin Jan – Mar TMD $ 52,404.72 1720 CalPERS Health Insurance CM June Health Insurance $ 49,904.70 1724 CalPERS Member
Services Division CM PERS Contributions PPE 5/25/24 $ 64,615.79 1725 Employment Development
Department CM State Taxes PPE 5/25/24 $ 23,243.84
1726 Internal Revenue Service CM Federal Taxes & Medicare PPE 5/25/24 $ 71,933.02
Attachments:

1. 05-31-24 Check Register

2. 06-14-24 Check Register
Report Prepared By: Luis Ruiz, Accountant I
Reviewed By: Julia Gautho, City Clerk and Jim Malberg, Finance Director Approved By: Jamie Goldstein, City Manager
27 Item 8 B.
28 Item 8 B.
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Capitola City Council
Agenda Report
Meeting: June 27, 2024
From: City Manager Department
Subject: Opal Cliffs School Lease Agreement
Recommended Action: Authorize the City Manager to enter a lease agreement with the Soquel Union Elementary School District for classroom space at Opal Cliffs School beginning on July 1, 2024.

Background: The City has held a Long-Term Use Agreement with the Soquel Union Elementary School District (SUESD) for the Jade Street Park Property, which includes the Community Center since the 1980’s. In November 2022, the Use Agreement was extended; as part of that extension, the City agreed to complete certain renovations to the Community Center. In May 2024, the Community Center Renovation Project received funding from several sources, which will cover the entire project scope. Construction on the renovation project is expected to begin in October 2024.

Discussion: The Community Center provides space for numerous community programs as well as office space for five permanent City staff members. The planned Renovation Project is an extensive undertaking that will necessitate the Recreation Division temporarily relocating from the Community Center until construction is finished. In a spirit of partnership, SUESD has generously offered the use of two available classrooms at Opal Cliffs School, situated in Jade Street Park.

This temporary location is ideal for maintaining community services with minimal disruption during the renovation.

The lease agreement includes the use of two classrooms, two bathrooms, and the fenced front yard of the school facility for a term of eighteen months, starting on July 1, 2024. The City, as the tenant, will be responsible for utilities, internet, and improvements to the bathrooms. The District agreed to waive any rent payments.

Initially staff discussed making the waiver of rent an “in kind” donation to the fundraising campaign for the Treasure Cove Playground. However, due to potential constraints around School District donations, the proposed lease simply sets the rent at $1 per month.

Fiscal Impact: The estimated cost to upgrade the bathrooms is less than $4,000 in materials and staff time. Expenses related to the lease will be part of the Community Center Renovation project fund
Attachments:

1. Lease Agreement for Opal Cliff Classrooms
Report Prepared By: Nikki Bryant LeBlond, Recreation Division Manager 56 Item 8 C.

Reviewed By: Julia Gautho, City Clerk
Approved By: Jamie Goldstein, City Manager
57 Item 8 C.

LEASE AGREEMENT

BY AND BETWEEN

SOQUEL UNION ELEMENTARY SCHOOL DISTRICT,
a Local Educational Agency (LEA)

AS LANDLORD
and

THE CITY OF CAPITOLA,
a municipal corporation

AS TENANT
58 Item 8 C.

TABLE OF CONTENTS
PAGE
i

1. DEMISE ................................................................................................................................2

2. PREMISES.............................................................................................................................2

2.1 Premises...................................................................................................................2

2.2 Possession ................................................................................................................2

3. TERM ...................................................................................................................................2

4. BASE RENT...........................................................................................................................2

4.1 Abatement................................................................................................................2

4.2 In-Kind Donation by Landlord ................................................................................2

5. USE; COMPLIANCE WITH LAWS..........................................................................................3

5.1 Use ...........................................................................................................................3

5.2 Compliance with Laws ............................................................................................3

6. UTILITIES.............................................................................................................................3

7. PERSONAL PROPERTY AND POSSESSORY INTEREST TAXES ..............................................3

7.1 Personal Property Taxes ..........................................................................................3

7.2 Possessory Interest Taxes ........................................................................................3

7.3 Payment....................................................................................................................3

8. ALTERATIONS......................................................................................................................3

8.1 Landlord Consent.....................................................................................................3

8.2 Alterations................................................................................................................4

8.3 Liens.........................................................................................................................4

9. MAINTENANCE AND REPAIR OF PREMISES.........................................................................4

9.1 Maintenance and Repair by Tenant .........................................................................4

9.2 Maintenance and Repair by Landlord......................................................................4

10. ENVIRONMENTAL PROTECTION PROVISIONS ....................................................................4

10.1 Hazardous Materials ................................................................................................4

10.2 Reportable Uses Required Consent .........................................................................5

11. ASSIGNMENT AND SUBLETTING ..........................................................................................5

12. INDEMNIFICATION AND WAIVER OF CLAIMS .....................................................................5

12.1 Tenant Indemnification............................................................................................5

12.2 Waiver of Claims.....................................................................................................5 59 Item 8 C.

TABLE OF CONTENTS
(CONTINUED)
PAGE
ii

12.3 Survival/No Impairment ..........................................................................................6

13. INSURANCE ..........................................................................................................................6

13.1 Tenant’s Insurance ...................................................................................................6

13.2 Requirements For All Policies.................................................................................6

13.3 Certificates of Insurance ..........................................................................................6

13.4 Landlord’s Insurance ...............................................................................................6

14. DAMAGE OR DESTRUCTION ................................................................................................6

15. CONDEMNATION..................................................................................................................7

16. DEFAULT..............................................................................................................................7

16.1 Events of Default .....................................................................................................7

16.2 Remedies..................................................................................................................8

16.3 No Waiver................................................................................................................8

16.4 Waiver of Redemption, Reinstatement, or Restoration ...........................................8

16.5 Remedies Cumulative ..............................................................................................8

16.6 Landlord’s Right to Perform Tenant’s Obligations.................................................9

16.7 Severability ..............................................................................................................9

17. LIMITATION OF LIABILITY..................................................................................................9

18. SURRENDER OF PREMISES...................................................................................................9

19. HOLDING OVER...................................................................................................................9

20. NOTICE ................................................................................................................................9

21. MISCELLANEOUS .................................................................................................................9

21.1 Governing Law ......................................................................................................10

21.2 Severability ............................................................................................................10

21.3 Attorneys’ Fees......................................................................................................10

21.4 Force Majeure ........................................................................................................10

21.5 Signs.......................................................................................................................10

21.6 Brokers...................................................................................................................10

21.7 Access by Landlord................................................................................................10

21.8 Article and Section Titles.......................................................................................10

21.9 Authority................................................................................................................10 60 Item 8 C.

TABLE OF CONTENTS
(CONTINUED)
PAGE
iii

21.10 Quiet Possession ....................................................................................................11

21.11 Asbestos Notification for Commercial Property Constructed Before 1979 ..........11

21.12 Lead Warning Statement........................................................................................11

21.13 OFAC Certification................................................................................................11

21.14 Certified Access Specialist Disclosure/Inspection by Certified Access Specialist................................................................................................................11

21.15 Time of the Essence ...............................................................................................11

21.16 Entire Agreement...................................................................................................11

21.17 Counterparts...........................................................................................................11 61 Item 8 C.
v

INDEX OF EXHIBITS

A PREMISES
62 Item 8 C.
1 LEASE AGREEMENT

BASIC LEASE INFORMATION
Lease Date: Dated as of June __, 2024 for reference purposes only Landlord: Soquel Union Elementary School District
Landlord’s Address: Soquel Union Elementary School District 620 Monterey Avenue
Capitola, CA 95010
Attn: Superintendent
Tenant: City of Capitola
Tenant’s Address: Capitola City Hall
420 Capitola Avenue
Capitola, CA 95010
Attn: City Manager
Premises: Two (2) classrooms within the Building described below, including two (2) bathrooms, a fenced front yard and a fenced back yard, a janitorial/fire riser closet and an electrical panel, as outlined in red on Exhibit A attached hereto and incorporated herein by reference.

Building: Opal Cliffs School, 4510 Jade Street, Capitola, CA 95010 Length of Term: Eighteen (18) months
Commencement Date: July 1, 2024
Expiration Date: December 31, 2025
Base Rent: Months
1 - 18 $1/month (“Base Rent”)
Taxes and Utilities: Tenant shall pay all costs for Utilities (defined in Article 6) to the Premises. Tenant shall pay all Personal Property Taxes (defined in Article 7) and possessory interest taxes, if any, levied on or against the Premises or its personal property.

Permitted Use: Public recreation uses and uses ancillary to public recreation uses, including classes, offices, workshops, gatherings, community meetings, and other uses permitted by law.

Brokers: None
63 Item 8 C.
2 LEASE AGREEMENT
This Lease Agreement is made and entered into by and between the City of Capitola, a municipal corporation (“Tenant”), and Soquel Union Elementary School District, a California ________ (“Landlord”). The Basic Lease Information, the Exhibits and this Lease Agreement are and shall be construed as a single instrument and are referred to herein as the “Lease”.

1. DEMISE. In consideration for the Base Rent and Utilities payment payable by Tenant, and for the agreements, terms and conditions to be performed by Tenant in this Lease, Landlord does hereby lease to Tenant and Tenant does hereby hire and take from Landlord, the Premises described below, upon the agreements, terms and conditions of this Lease for the Term hereinafter stated.

2. PREMISES.

2.1 Premises. The Premises demised by this Lease are as specified in the Basic Lease Information. The Premises have the address and contain the classrooms and other spaces specified in the Basic Lease Information.

2.2 Possession. Tenant accepts the Premises in “AS IS” “WITH ALL FAULTS” condition and configuration without any representations or warranties by Landlord, and subject to all matters of record and all applicable laws, ordinances, rules and regulations, provided that Tenant shall be permitted by Landlord to make the Bathroom Alterations, as described in Section

8.1. 3. TERM. The term of this Lease (“Term”) shall be for the period specified in the Basic Lease Information commencing on the Commencement Date. This Lease shall terminate at midnight on December 31, 2025 (“Expiration Date”), unless sooner terminated or extended as hereinafter provided. Notwithstanding the foregoing, this Lease may be terminated by Landlord upon delivery to Tenant of written notice stating that the Lease shall terminate prior to the Expiration Date but in no event less then ninety (90) days from the date of the notice.

4. BASE RENT. During the Term, Tenant shall pay the Base Rent described in the Basic Lease Information.

4.1 Abatement. Notwithstanding the foregoing, all Base Rent for the entire Term of this Lease shall be abated by Landlord for a total abated sum during the Term of Forty-Five Thousand and 00/100 ($45,000.00) (“Total Abated Rent”).

4.2 In-Kind Donation by Landlord. In consideration of Landlord’s agreement to fully abate the Base Rent due from Tenant to Landlord under this Lease during the entire Term hereof, the Total Abated Rent shall be treated by Tenant as an in-kind donation by Landlord to Tenant’s fundraising campaign for the Treasure Cove Playground.
64 Item 8 C.
3 5. USE; COMPLIANCE WITH LAWS.

5.1 Use. The Premises shall be used for the Permitted Use (as specified in the Basic Lease Information). Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the Premises, Buildings or with respect to the suitability or fitness of either for the conduct Tenant’s business or for any other purpose.

5.2 Compliance with Laws. Tenant shall comply with all laws, ordinances, rules, regulations and codes, of all municipal, county, state and federal authorities, including the Americans With Disabilities Act, as amended, (42 U.S.C. Section 1201 et seq. [the “ADA”]) (collectively, “Laws”) pertaining to Tenant’s use and occupancy of the Premises and the conduct of its business. Tenant shall not commit, or suffer to be committed, any waste upon the Premises or any public or private nuisance, or other act or thing which disturbs the quiet enjoyment of any other tenant in the Building. Tenant shall not permit any objectionable odor to escape or be emitted from the Premises and shall ensure that the Premises remain free from infestation from rodents or insects.

6. UTILITIES. Tenant shall pay Landlord a fixed monthly amount of $ 500 for all charges for water, sewer, storm water, gas, electricity, heat, cooling, telephone, refuse collection, janitorial, pest control, security and monitoring services furnished to the Premises, together with all related installation or connection charges or deposits (collectively, “Utilities”). If during any month of the Term, Landlord reasonably determines that the cost of Tenant’s monthly consumption of Utilities materially exceeds the fixed charge described above, then Landlord shall invoice Tenant for an additional charge, the amount to of which shall be reasonably determined by Landlord, which charge shall be due from Tenant to Landlord within thirty (30) days of Tenant’s receipt of the applicable invoice.

7. PERSONAL PROPERTY AND POSSESSORY INTEREST TAXES.

7.1 Personal Property Taxes. Tenant shall pay all taxes levied or imposed against the Premises or Tenant’s personal property or trade fixtures placed by Tenant in or about the Premises during the Term (“Personal Property Taxes”).

7.2 Possessory Interest Taxes. The interest created by this Lease may at some time be subject to property taxation under the laws of the State of California. If property taxes are imposed, the party in whom the possessory interest is vested may be subject to the payment of the taxes levied on such interest. This notice is included in this Lease pursuant to the requirements of Section 107.6 (a) of the Revenue and Taxation Code of the State of California.

7.3 Payment. Tenant shall pay the Personal Property Taxes and possessory interest taxes, if any, accordance with the instructions of the taxing entity.

8. ALTERATIONS.

8.1 Landlord Consent. Except as otherwise described below, Tenant shall not make any alterations, improvements, or additions (“Alteration”) in or about the Premises or any part thereof without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Landlord hereby agrees that, 65 Item 8 C.
4 without further advance approval of Landlord, Tenant shall be permitted, at its sole cost, to install internet to the Premises and to undertake alterations to the two (2) bathrooms in order to cause the bathrooms to be suitable for use by adults (“Bathroom Alterations”). The Bathroom Alterations shall include installing new adult size toilets, raising the bathroom sinks, potentially modifying the grab bars within the bathroom and such other items as may be required by applicable Laws.

8.2 Alterations. Any Alterations, including the Bathroom Alterations, to the Premises shall be at Tenant’s sole cost and expense, and made in compliance with all applicable Laws.

8.3 Liens. Tenant shall pay when due all claims for labor or materials furnished Tenant for use in the Premises. Tenant shall not permit any mechanic liens, stop payment notices, or any other liens against the Premises, Building, Alterations, Bathroom Alterations or any of Tenant’s interests under this Lease for any labor or materials furnished to Tenant in connection with work performed on or about the Premises by or at the direction of Tenant.

9. MAINTENANCE AND REPAIR OF PREMISES.

9.1 Maintenance and Repair by Tenant.
(a) Tenant Maintenance. Tenant shall, at its sole cost and expense, maintain the interior of the Premises in good repair and in a neat and clean condition, including making all necessary repairs and replacements.
(b) Tenant Repair. Tenant shall further, at its own costs and expense, repair or restore any damage or injury to all or any part of the Building caused by Tenant or Tenant’s agents, employees, invitees, licensees, visitors or contractors.

9.2 Maintenance and Repair by Landlord. Landlord shall maintain in good repair the structural elements of the Building, including structural elements of exterior walls and foundations, provided such repairs are not necessitated by the actions of Tenant, Tenant’s invitees or anyone in the employ or control of Tenant. Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932, and Sections 1941 and 1942 of the California Civil Code or any similar or successor Laws now or hereby in effect. Tenant shall promptly give Landlord written notice of the need for repair of the items for which Landlord is responsible. If Tenant or Tenant’s invitees or anyone in the employed or control of Tenant caused any damages necessitating such repair, then Tenant shall pay to Landlord the reasonable cost thereof upon demand. Except as otherwise expressly set forth in this Lease, Tenant waives any right to terminate this Lease by reason of any failure of Landlord to make repairs to the Premises or Building.

10. ENVIRONMENTAL PROTECTION PROVISIONS.

10.1 Hazardous Materials. “Hazardous Materials” shall mean any material, substance or waste that is or has the characteristic of being hazardous, toxic, ignitable, reactive, flammable, explosive, radioactive or corrosive, including, without limitation, petroleum, solvents, lead, acids, pesticides, paints, printing ink, PCBs, asbestos, materials commonly known to cause cancer or reproductive harm and those materials, substances and/or wastes, including 66 Item 8 C.
5 wastes which are or later become regulated by any local governmental authority, the state in which the Premises are located or the United States Government, including, but not limited to, substances defined as “hazardous substances,” “hazardous materials,” “toxic substances” or “hazardous wastes” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §1801, et seq.; the Resource Conservation and Recovery Act; all environmental laws of the state where the Premises are located, and any other environmental law, regulation or ordinance now existing or hereinafter enacted. “Hazardous Materials Laws” shall mean all present and future federal, state and local laws, ordinances and regulations, prudent industry practices, requirements of governmental entities and manufacturer’s instructions relating to industrial hygiene, environmental protection or the use, analysis, generation, manufacture, storage, presence, disposal or transportation of any Hazardous Materials, including without limitation the laws, regulations and ordinances referred to in the preceding sentence.

10.2 Reportable Uses Required Consent. Except with respect to typical cleaning products or other usual household solvents, Tenant hereby agrees that Tenant and Tenant’s officers, employees, representatives, agents, contractors, subcontractors, successors, assigns, subtenants, concessionaires, invitees and any other occupants of the Premises (collectively, “Tenant Parties”) shall not cause or permit any Hazardous Materials to be used, generated, manufactured, refined, produced, processed, stored or disposed of, on, under or about the Premises or Building or transported to or from the Premises or Building without the express prior written consent of Landlord, which shall not be unreasonably withheld, conditioned or delayed.

11. ASSIGNMENT AND SUBLETTING. Tenant shall not voluntarily or by operation of law, (a) mortgage, pledge, hypothecate or encumber this Lease or any interest therein, or (b) assign or transfer this Lease or any interest herein, sublease the Premises or any part thereof or any right or privilege appurtenant thereto, or allow any other person (the employees and invitees of Tenant excepted) to occupy or use the Premises, or any portion thereof, without first obtaining the written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed.

12. INDEMNIFICATION AND WAIVER OF CLAIMS.

12.1 Tenant Indemnification. Tenant shall indemnify, defend and hold Landlord and Landlord Related Parties (defined in Section 12.2) harmless against and from all liabilities, obligations, damages, penalties, claims, actions, costs, charges, judgment and expenses (including reasonable attorneys’ fees, costs and disbursements) (collectively referred to as “Losses”), arising from (a) the use of, or any activity done or permitted in or about the Premises (b) any activity done or permitted by Tenant or Tenant’s agents, contractors, invitees or licensees in or about the Building, and (c) any act, neglect, fault, willful misconduct of Tenant or Tenant’s agents, except to the extent such claims arise out of or relate to the active negligence or willful misconduct of Landlord. If any action or proceeding is brought against Landlord by reason of any such claim, upon notice from Landlord, Tenant shall defend the same at Tenant’s expense by counsel reasonably satisfactory to Landlord.

12.2 Waiver of Claims. Except in the event of its own active negligence or willful misconduct, Landlord shall not be liable to Tenant and Tenant hereby waives all claims against Landlord and its agents, representatives, officers, consultants, employees, Board of Trustees, 67 Item 8 C.
6 members of the Board of Trustees (“Landlord Related Party”) for any injury or damage to any person or property occurring or incurred in connection with or in any way relating to the Premises or Building from any cause.

12.3 Survival/No Impairment. The obligations of Tenant under this Article 12 shall survive any termination of this Lease.

13. INSURANCE.

13.1 Tenant’s Insurance.
(a) Liability Insurance. Tenant shall maintain in full force throughout the Term, commercial general liability insurance providing coverage on an occurrence form basis with limits of not less than Two Million Dollars ($2,000,000.00) each occurrence for bodily injury and property damage combined, or such larger amount as Landlord may prudently require from time to time, covering bodily injury and property damage liability and product liability if a product is sold from the Premises. Each policy of liability insurance required by this Section shall: (i) provide that it is primary to and not contributing with, any policy of insurance carried by Landlord covering the same loss; (ii) name Landlord and such other parties in interest as Landlord may from time to time reasonably designate to Tenant in writing, as additional insureds in an Additional Insured Endorsement.
(b) Worker’s Compensation Insurance. Tenant shall, at Tenant’s expense, maintain in full force and effect during the Term of this Lease, worker’s compensation insurance with not less than the minimum limits required by law.

13.2 Requirements For All Policies. All insurance companies issuing such policies shall be admitted carriers licensed to do business in the state where the Property is located.

Tenant shall, at least thirty (30) days prior to expiration of each policy, furnish Landlord with certificates of renewal thereof and shall provide Landlord with at least thirty (30) days prior written notice of any cancellation or modification.

13.3 Certificates of Insurance. If requested by Landlord, Tenant shall furnish to Landlord a certificate of insurance reflecting that the insurance required by this Article 13 is in force, accompanied by an endorsement(s) showing the required additional insureds that are reasonably satisfactory to Landlord.

13.4 Landlord’s Insurance. During the Term, Landlord shall keep in effect property insurance covering the Building and Premises in amounts not less than the full insurance replacement value thereof with customary limits and deductibles, together with such other types of insurance coverage typically maintained by commercial Landlords in the Santa Cruz County area.

14. DAMAGE OR DESTRUCTION. If at any time during the Term there is damage to the Premises which will require longer than three (3) months to repair, Landlord may terminate this Lease effective sixty (60) days following the date of occurrence of such damage by giving a written termination notice to Tenant within thirty (30) days after the date of occurrence of such damage.
68 Item 8 C.
7 15. CONDEMNATION. If the whole or if any material part of the Premises or Building is taken or condemned for any public or quasi-public use under either state or federal law, by eminent domain or purchase in lieu thereof (“Taking”), and (a) such Taking renders the Premises or Building unsuitable, in Landlord’s reasonable opinion, for the purposes for which they were constructed; or (b) the Premises or Building cannot be repaired, restored or replaced at reasonable expense to an economically profitable unit, then Landlord may, at its option, terminate this Lease as of the date possession vests in the condemning party. If twenty-five percent (25%) or more of the Premises is taken and if the Premises remaining after such Taking and any repairs by Landlord would be untenantable (in Tenant’s reasonable opinion) for the conduct of Tenant’s business operations, Tenant shall have the right to terminate this Lease as of the date possession vests in the condemning party. The terminating party shall provide written notice of termination to the other party within thirty (30) days after it first receives notice of the Taking. The termination shall be effective as of the effective date of any order granting possession to, or vesting legal title in, the condemning authority. If only a part of the Premises is subject to a Taking and this Lease is not terminated, Landlord, with reasonable diligence, will restore the remaining portion of the Premises as nearly as practicable to the condition immediately prior to the Taking. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of the California Code of Civil Procedure, or any similar or successor Laws. Landlord shall be entitled to any and all compensation, damages, income, rent, awards or any interest thereon which may be paid or made in connection with any such Taking, and Tenant shall have no claim against Landlord for the value of any expired term of this Lease or otherwise; provided, however, that Tenant shall be entitled to receive any award separately allocated by the condemning authority to Tenant for Tenant’s relocation expenses, the value of Tenant’s fixture, equipment and personal property (specifically excluding components of the Premises which under this Lease or by law are or at the expiration of the Term will become the property of Landlord, including, without limitation, fixtures and Alterations), or Tenant’s loss of business goodwill, provide that such award does not reduce any award otherwise allocable or payable to Landlord.

16. DEFAULT.

16.1 Events of Default. The occurrence of any of the following shall constitute a “Default” by Tenant:
(a) Tenant fails to make a payment of any sum or Utilities costs when due under this Lease, if payment in full is not received by Landlord within fifteen (15) days after written notice that it is past due.
(b) Tenant abandons the Premises as defined in Section 1951.3 of the California Civil Code.
(c) Tenant violates the restrictions on Transfer set forth in Article 11. (d) Tenant ceases doing business as a going concern; makes an assignment for the benefit of creditors; is adjudicated an insolvent, files a petition (or files an answer admitting the material allegations of a petition) seeking relief under any state or federal bankruptcy or other statute, law or regulation affecting creditors’ rights; all or substantially all of Tenant’s assets are subject to judicial seizure or attachment and are not released within thirty (30) days, or Tenant 69 Item 8 C.
8 consents to or acquiesces in the appointment of a trustee, receiver or liquidator for Tenant or for all or any substantial part of Tenant’s assets.
(e) Tenant fails to perform or comply with any provision of this Lease other than those described in (a) through (d) above, and does not fully cure such failure within thirty (30) days after notice to Tenant or, if such failure cannot be cured within such thirty (30) day period, Tenant fails within such thirty (30)-day period to commence, and thereafter diligently proceed with, all actions necessary to cure such failure as soon as reasonably possible.

16.2 Remedies. Upon the occurrence of any Default under this Lease, Landlord shall have the right to terminate this Lease and Tenant’s right to possession of the Premises. Tenant hereby specifically waives notice and demand for payment of any obligation under the Lease, and waives any and all other notices or demand requirements imposed by applicable Law. Upon such termination, Landlord may recover from Tenant an award of damages equal to the sum of the following:
(a) The actual, out-of-pocket, third party damages reasonably incurred by Landlord proximately caused by Tenant’s failure to perform any of its obligations under this Lease, to the extent such damages are not recouped by Landlord from any proceeds of insurance or other recoveries;
(b) Any other amount necessary to compensate Landlord for all the detriment either proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, to the extent such damages are not recouped by Landlord from any proceeds of insurance or other recoveries; and (c) All such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time under applicable law.

16.3 No Waiver. The subsequent acceptance of any payment hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such sum. No waiver by Landlord of any breach hereof shall be effective unless such waiver is in writing and signed by Landlord.

16.4 Waiver of Redemption, Reinstatement, or Restoration. Tenant hereby waives any and all rights conferred by Section 3275 of the Civil Code of California and by Sections 1174(c) and 1179 of the Code of Civil Procedure of California and any and all other laws and rules of law from time to time in effect during the Lease Term or thereafter providing that Tenant shall have any right to redeem, reinstate or restore this Lease following its termination as a result of Tenant’s breach.

16.5 Remedies Cumulative. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder or now or hereafter existing by agreement, applicable Law or in equity. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event of Default shall not be deemed or construed to constitute a waiver of such Default. 70 Item 8 C.
9 16.6 Landlord’s Right to Perform Tenant’s Obligations. If Tenant is in Default of any of its non-monetary obligations under this Lease, in addition to the other rights and remedies of Landlord provided herein, then Landlord may at Landlord’s option, but without any obligation to do so and without further notice to Tenant, perform any such term, provision, covenant or condition or make any such payment and Landlord by reason of doing so shall not be liable or responsible for any loss or damage thereby sustained by Tenant. If Landlord performs any of Tenant’s obligations hereunder in accordance with this Section 16.6, the full amount of the costs and expense incurred or the payments so made or the amount of the loss so sustained shall be immediately be owed by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon demand, the full amount thereof.

16.7 Severability. This Article 16 shall be enforceable to the maximum extent such enforcement is not prohibited by applicable Law, and the unenforceability of any portion thereof shall not thereby render unenforceable any other portion.

17. LIMITATION OF LIABILITY. Notwithstanding anything to the contrary contained in this Lease, the liability of Landlord (and of any successor landlord) shall be governed by applicable state and federal laws. Neither Landlord nor any Landlord Related Party shall be personally liable for any judgment or deficiency, and in no event shall Landlord or any Landlord Related Party be liable to Tenant for any lost profit, damage to or loss of business or a form of special, indirect or consequential damage.

18. SURRENDER OF PREMISES. At the termination of this Lease or Tenant’s right of possession, Tenant shall remove Tenant’s property from the Premises, and quit and surrender the Premises to Landlord, broom clean, and in good order, condition and repair, ordinary wear and tear and damage which Landlord is obligated to repair hereunder excepted.

19. HOLDING OVER. If Tenant fails to surrender all or any part of the Premises at the termination of this Lease, occupancy of the Premises after termination shall be that of a tenancy at sufferance. Tenant’s occupancy shall be subject to all the terms and provisions of this Lease and Tenant shall pay an amount (on a per month basis with reduction for partial months during the holdover) equal to $5,000 per month for the period immediately preceding the holdover.

No holding over by Tenant shall operate to extend the Term. Any holding over by Tenant with the written consent of Landlord shall thereafter constitute a lease from month to month.

20. NOTICE. All notices shall be in writing and delivered by hand or sent by registered, express, or certified mail, with return receipt requested or with delivery confirmation requested from the U.S. postal service, or sent by overnight or same day courier service at the party’s respective Notice Address(es) set forth in the Basic Lease Information (“Notice Address”).

Each notice shall be deemed to have been received on the earlier to occur of actual delivery or the date on which delivery is refused, or, if Tenant has vacated the Premises or any other Notice Address of Tenant without providing a new Notice Address, three (3) days after notice is deposited in the U.S. mail or with a courier service in the manner described above. Either party may, at any time, change its Notice Address (other than to a post office box address) by giving the other party written notice of the new address.

21. MISCELLANEOUS.
71 Item 8 C.
10 21.1 Governing Law. This Lease shall be interpreted and enforced in accordance with the Laws of the State of California and Landlord and Tenant hereby irrevocably consent to the jurisdiction and proper venue of such state.

21.2 Severability. If any section, term or provision of this Lease is held invalid by a court of competent jurisdiction, all other sections, terms or severable provisions of this Lease shall not be affected thereby, but shall remain in full force and effect.

21.3 Attorneys’ Fees. In the event of an action, suit, arbitration or proceeding brought by Landlord or Tenant to enforce any of the other’s covenants and agreements in this Lease, the prevailing party shall be entitled to recover from the non-prevailing party any costs, expenses (including out of pocket costs and expenses) and reasonable attorneys’ fees incurred in connection with such action, suit or proceeding.

21.4 Force Majeure. Whenever a period of time is prescribed for the taking of an action by Landlord or Tenant, the period of time for the performance of such action shall be extended by the number of days that the performance is actually delayed due to strikes, acts of God, shortages of labor or materials, war, terrorist acts, pandemics, civil disturbances, extreme weather and other causes beyond the reasonable control of the performing party (“Force Majeure”).

21.5 Signs. Tenant may install signage on the Building or on, in or about the Premises to identify use of the Premises for the Permitted Use. Tenant shall maintain any such signs installed on the Premises.

21.6 Brokers. Landlord and Tenant each represents and warrants to the other that neither it nor its officers or agents nor anyone acting on its behalf has dealt with any real estate broker. Each party agrees to indemnify, defend and hold harmless the other from any claim or claims, and costs and expenses, including attorneys’ fees, incurred by the indemnified party in conjunction with any such claim or claims of any other broker or brokers to a commission in connection with this Lease as a result of the actions of the indemnifying party.

21.7 Access by Landlord. In addition to access provided by this Lease, Landlord shall be allowed access to the Premises at all reasonable times throughout the term of this Lease, for any reasonable purpose upon prior written notice to Tenant.

21.8 Article and Section Titles. The Article and Section titles use herein are not to be consider a substantive part of this Lease, but merely descriptive aids to identify the paragraph to which they referred. Use of the masculine gender includes the feminine and neuter, and vice versa.

21.9 Authority. If Tenant is a corporation, partnership, trust, association or other entity, Tenant and each person executing this Lease on behalf of Tenant does hereby covenant and warrant that (a) Tenant is duly incorporated or otherwise established or formed and validly existing under the laws of its state of incorporation, establishment or formation, (b) Tenant has and is duly qualified to do business in California, (c) Tenant has full corporate, partnership, trust, association or other power and authority to enter into this Lease and to perform all Tenant’s 72 Item 8 C.
11 obligations hereunder, and (d) each person (and all of the persons if more than one signs) signing this Lease on behalf of Tenant is duly and validly authorized to do so.

21.10 Quiet Possession. Landlord covenants and agrees with Tenant that, upon Tenant’s observing and performing all of the terms, covenants, conditions, provisions and agreements of this Lease on Tenant’s part to be observed or performed, Tenant shall have the quiet possession of the Premises throughout the Term.

21.11 Asbestos Notification for Commercial Property Constructed Before 1979. Tenant acknowledges that Landlord has advised Tenant that, because of its age, the Building may contain asbestos-containing materials (“ACMs”).

21.12 Lead Warning Statement. Tenant acknowledges that Landlord has advised Tenant that buildings built before 1978 may contain lead-based paints (“LBP”). Landlord has no specific knowledge of the presence of lead-based paint in the Premises.

21.13 OFAC Certification. Tenant represents, warrants and covenants that Tenant and its principals are not acting, and will not act, directly or indirectly, for or on behalf of any person, group, entity, or nation named by any Executive Order or the United States Treasury Department as a terrorist, “Specially Designated and Blocked Person” or other banned or blocked person, entity, nation, or transaction pursuant to any law, order, rule or regulation that is enforced or administered by the Office of Foreign Assets Control.

21.14 Certified Access Specialist Disclosure/Inspection by Certified Access Specialist.

Landlord discloses that Landlord has not caused the Premises to undergo inspection by a Certified Access Specialist as referenced in California Civil Code Section 1938 subsection (e) which provides: "A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”

21.15 Time of the Essence. Time is of the essence of this Lease and each and all of its provisions.

21.16 Entire Agreement. This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreements or understandings pertaining to any such matter shall be effective for any purpose. No provision of this Lease may be amended or added except by an agreement in writing signed by the parties hereto or their respective successors-in-interest.

21.17 Counterparts. This Lease may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.
73 Item 8 C.
12 Landlord and Tenant have executed this Lease as of the day and year first above written.

TENANT:

City of Capitola,
a municipal corporation
By: _____________________________
Jamie Goldstein
City Manager
Date: _____________________________
LANDLORD:

Soquel Union Elementary Schol District,
a California _______________________
By: _____________________________
Scott Turnbull
Superintendent
Date: ____________________________

APPROVED AS TO FORM
By: _____________________________
Samantha Zulter
City Attorney
Date: ____________________________
74 Item 8 C.

EXHIBIT A

PREMISES
75 Item 8 C.

Capitola City Council
Agenda Report
Meeting: June 27, 2024
From: City Manager Department; Recreation Division
Subject: Afterschool Scholarship & Equity Swim Donation Recommended Action: Accept a donation of $20,000 for Afterschool Rec Club participant scholarships and $16,000 for the Equity Swim Program from the Soquel Union Elementary School District and authorize the City Manager, or his designee, to execute a Memorandum of Understanding between the City of Capitola and the Soquel Union Elementary School District.

Background: In Fall 2020, the City’s Recreation Division expanded its pilot Afterschool Program to include elementary students in response to the COVID-19 Pandemic and Distance Learning.

As a result, the City developed the Out-of-School Time (OST) Program. The Soquel Union Elementary School District (SUESD) supported the Program by contributing $16,000 in funding.

As schools returned to in-person learning, the City and SUESD recognized a lack of after-school programming. As a result, the OST Program was modified to provide an after-school program in each of SEUSD’s elementary schools. SUESD provided a funding contribution in FY 2022-23 to ensure continued support for families that suffered hardships due to the Pandemic.

Discussion: The Afterschool Rec Club provides enrichment and homework support to elementary and middle school students at the New Brighton Middle School campus. As an affordable public program, the SUESD Board of Trustees is proud to support this collaboration with the City to jointly support Capitola residents and provide equitable access to families.

The City’s Equity Swim Program was designed to provide equity and community for students that live in a community dominated by beach culture. The Equity Swim Program provides high quality swimming lessons to SUESD students who would otherwise not have access to such resources.

The Program teaches students techniques and keeps them engaged with aquatics activities, allowing students to participate in beach community events.

SUESD will contribute $20,000 to support a scholarship fund for students meeting income criteria as evaluated by the Capitola Public Safety and Community Service Foundation and an additional $16,000 (approximately half of the City’s expense) to the Equity Swim Program for the 2024-25 school year.

Fiscal Impact: This donation of $20,000 will provide a restricted fund for Afterschool Rec Club scholarship applicants and $16,000 will offset budgeted contract expenses for the Equity Swim program. Both of these donations have been incorporated into the FY 2024-25 Budget.

Attachments:

1. MOU SUESD and the City of Capitola
Report Prepared By: Nikki Bryant LeBlond, Recreation Division Manager Reviewed By: Julia Gautho, City Clerk; Jim Malberg, Finance Director Approved By: Jamie Goldstein, City Manager
76 Item 8 D.
77 Item 8 D.

Capitola City Council
Agenda Report
Meeting: June 27, 2024
From: Public Works Department
Subject: Santa Cruz World Surfing Reserve
Recommended Action: Adopt a resolution to incorporate Capitola into the Santa Cruz World Surfing Reserve.

Background: The Save the Waves Coalition (STW) is an international nonprofit and community-led coalition that identifies, designates, and preserves surfing ecosystems around the world. Their World Surfing Reserve (WSR) designation program, akin to UNESCO World Heritage Sites for cultural and natural landmarks, identifies and safeguards exceptional surf breaks worldwide. These reserves aim to preserve surfing areas of significant environmental, cultural, and recreational value, ensuring their sustainable enjoyment for future generations by working collaboratively with local coalition partners and the WSR Local Stewardship Council (LSC).

The Santa Cruz World Surfing Reserve (Attachment 1), the fourth official WSR globally, was designated on April 28, 2012, and is located on the northern side of Monterey Bay. The Santa Cruz WSR currently includes 7 miles of coastline from Natural Bridges to the Opal Cliffs, just east of Pleasure Point. At least 23 consistent surf breaks are sited along this coastline and the breaks are used by surfers throughout the year.

The Capitola City Council has previously considered applying for World Surfing Reserve status (Attachment 2), however, to date, Capitola is not included in the Santa Cruz WSR. During the June 13, 2024, City Council meeting, Council Member Clarke requested this item be agendized for consideration.

Discussion: Staff has met with STW to explore the possibility of Capitola joining the Santa Cruz WSR, and the topic was included in the agenda at the June 19, 2024, regular meeting of the Commission on the Environment. The Commission voted (3-0-2) to recommend the City Council move forward with incorporating Capitola into the Santa Cruz WSR. Inclusion in the existing WSR requires a resolution from the City Council (Attachment 3).

Fiscal Impact: None. If incorporated into the Santa Cruz WSR, the City will designate a representative to participate in quarterly Santa Cruz LSC meetings. This representative could be a City Council Member, staff, or a member of the public.

Attachments:

1. Santa Cruz World Surfing Reserve

2. City Council Agenda Report (Meeting of June 12, 2014)

3. Draft Resolution
Report Prepared By: Erika Senyk, Environmental Projects Manager Reviewed By: Julia Gautho, City Clerk; Jessica Kahn, Public Works Director Approved By: Jamie Goldstein, City Manager
78 Item 8 E.

C:\Users\esenyk\Downloads\10.D. World Surfing Reserves staff report rev.doc

CITY COUNCIL

AGENDA REPORT
MEETING OF JUNE 12, 2014
FROM: DEPARTMENT OF CITY MANAGER
SUBJECT: CONSIDER APPLYING FOR THE WORLD SURFING RESERVES STATUS

FOR CAPITOLA, AND SUBMITTING A LETTER OF INQUIRY
_______________________________________________________________________________ RECOMMENDED ACTION: Council discretion to consider directing staff to send a letter of inquiry to the Save the Waves Coalition pertaining to the City applying to be included in the World Surfing Reserve for Santa Cruz County.

BACKGROUND: The World Surfing Reserves (WSR) was founded in 2009 by an international group of surfers, scientists and environmentalists and is operated by the Save the Waves Coalition that identifies, designates and preserves outstanding waves, surf zones and their surrounding environments around the world.

On April 28, 2012, approximately seven miles of the Santa Cruz City and County coastline became the official fourth World Surfing Reserve in the world. The WSR currently extends from Natural Bridges State Park to Opal Cliffs. In April of this year Mayor Storey was invited to attend the Annual Santa Cruz World Surfing Reserve Summit in Santa Cruz, after which time he directed staff to agendize the consideration of extending the WSR to include Capitola.

Surfing is a significant part of the Capitola’s local culture and the designation of a WSR will highlight Capitola’s surf breaks and increase the visibility of our community as an ecological tourist attraction.

DISCUSSION: If the City Council is interest in Capitola being designated a WSR, the first step would be to submit a letter of inquiry to Save the Waves Coalition.

FISCAL IMPACT: None
ATTACHMENTS: None
Report Prepared By: Susan Sneddon
City Clerk
Reviewed and Forwarded
By City Manager: _______
79 Item 8 E.

SANTA CRUZ

WORLD SURFING RESERVE
80 Item 8 E.

Th is book is dedicated to the Santa Cruz Surfi ng Museum and its many volunteers, who since 1986 have devoted themselves to honoring local surf history by collecting and displaying an engaging and educational array of videos, print media, surfb oards, wetsuits and other artifacts. Housed in the Mark Abbott Memorial Lighthouse, overlooking the legendary waves of Steamer Lane, the museum preserves Santa Cruz’s rich surfi ng heritage for future generations.

SANTA CRUZ SURFING MUSEUM. PHOTO: COURTESY OF RYAN CRAIG. 81 Item 8 E.

Growing up in Santa Cruz as a surfer was an incredibly
fortunate experience. I rode my first waves at the
Rivermouth on an inflatable mat, along with my
parents and three brothers. This was back before
Boogie Boards, and some days there’d be as many
as 40 mat riders out there mucking around, having a
ball. It was a magical time to be a kid, and the sense
of magic only intensified as I grew older and came
to discover that Santa Cruz was awash in great surf
spots—one liquid playground after another.

Eventually my brothers and I talked our parents
into buying a longboard from a guy named Otto, who
operated a surf shop near the base of the wharf. We
spent endless hours taking turns on that old log at
Cowell’s. I’ll never forget the feeling of gliding across the bay on that heavy missile, absolutely filled with
adrenaline while gazing up at the coastal range and
its redwood forests running to the sea. Once I caught
that fever, there was no looking back, and from there
it was onto a shortboard and into the bounty of surf
up and down the coast. In the years since, I’ve been
lucky enough to travel and surf around the world.

But regardless of where I go, I always look forward to
coming home.

It’s incredible to think of all the great surf spots
stretched between Natural Bridges and New Brighton.

No matter who you are, Santa Cruz has a wave that
will fit your ability. They may not break every day,
but almost all of them can produce world-class waves
when conditions come together.

The most consistent breaks are along the two
major points: Steamer Lane and Pleasure Point.

Many times I’ve searched for surf north and south
of town only to find that the best waves around were
right under my nose at the Lane. My friends and I
affectionately call it Hoover Point (as in the vacuum), because of the way it sucks up any swell—north, west,
south, or any combination thereof. The innermost
spot at the Lane, Cowell’s, is one of the world’s best
beginner breaks, where waist-high waves will taper
a quarter mile over a forgiving sand bottom. Up the
point a bit, Indicators offers long, carveable walls for up-and-coming rippers to draw whatever lines they
please on its wide-open canvas. And up at the top of
the point, you’ll find old-school chargers air-dropping into draining, 15-foot, second-reef lefts.

Across town, Pleasure Point also serves up a smorgasbord of options with an array of kelp-groomed coves from Sewer Peak to Capitola. The waves here don’t have as much power as the Lane, but they make up for it with the huge range of choices: the sling-shot rights at Sewer Peak, the snappy little bowl with a wall at First Peak, the long, Trestles-like walls from Second Peak, and the longboard-friendly rollers of 38th Avenue (which can transform into a rifling barrel on a big south swell). Beyond that you have Ranch-like setups from the Hook down to Capitola, especially on a pumping swell.

Between Steamer Lane and Pleasure Point is Midtown,
also known as the city’s banana belt. It doesn’t have the long point waves, but it does offer up the occasional gem, most notably the San Lorenzo Rivermouth.

It may not break every year, but when
it works—with a spinning peak that
churns out draining rights and lefts—
local surfers rejoice.

If all this variety isn’t enough to
stoke local surfers, throw in a national
marine sanctuary filled with wildlife.

An offshore upwelling produces
nutrient-rich water, so the coastal ecosystem thrives here.

I’ve had dolphins glide just below me in water so clear I could see them turn sideways to get a closer look, no doubt feeling pity for the terrestrial interloper who flaps about in the sea through which they glide so effortlessly.

One reason surfing has become indelibly etched
into the Santa Cruz identity is because the breaks
just look so tasty as you gaze down on them from the
cliffs. Both the Lane and Pleasure Point are natural
amphitheaters—all the action takes place directly
below bluff-top walkways. Anyone out for a seaside
stroll inevitably has his or her attention drawn to the fortunate souls cruising across those inviting green
walls. Even locals who’ve never surfed eventually give
in to its appeal, and as a result the whole community
has surf fever. When the swell is up and the sun is
out, stoke fills the air like sea mist. Everywhere you
look, you see smiling surfers—from frothing groms to
creaky seniors and everything between.

From a geographic perspective, it’s almost as if
nature designed the coast of Santa Cruz specifically for surfers to enjoy. While the prevailing wind blows from
the northwest, most of the town’s beaches face south.

This means that when spots north and south are blown
ragged by the breeze, the waves in Santa Cruz, with its chop-controlling kelp, are often glassy or groomed by
offshore winds.

As a surfer, father and devoted local, I’m
heartened to see that so many people appreciate how
special this coastline is, and grateful that some of my peers have put in the hard work to have it declared a
World Surfing Reserve. Now, when I watch my own sons
playing on these waves, it comforts me to no end to realize that their kids will someday be able to do the same.

RICHARD SCHMIDT (ABOVE) AND SON RICHIE JR. (BELOW). PHOTOS: COURTESY OF REUBEN RUIZ.

SANTA CRUZ WORLD SURFING RESERVE

A LIQUID PLAYGROUND

BY RICHARD SCHMIDT
I’ll never forget the feeling of gliding
across the bay on that heavy missile,
absolutely filled with adrenaline while
gazing up at the coastal range and its
redwood forests running to the sea.
82 Item 8 E.
83 Item 8 E.

SANTA CRUZ WORLD SURFING RESERVE BOUNDARY
CARTOGRAPHER: GREG BENOIT. 84
Item 8 E.

PETER MEL, STEAMER LANE. PHOTO: COURTESY OF PATRICK TREFZ. SANTA CRUZ SURFER STATUE. PHOTO: COURTESY OF CHRIS BURKARD.

KYLE THIERMANN, SEWER PEAK, PLEASURE POINT. PHOTO: COURTESY OF RYAN CRAIG.

Santa Cruz has earned the sheltered status of a World
Surfing Reserve because of its diverse mix of surf
breaks, its pervasive and deep-rooted surf culture, and its thriving but fragile coldwater habitat.

Most surfers who’ve spent any time in Santa Cruz
agree that the quality, consistency and aesthetic appeal of its waves make it the best all-around surf town in
the continental United States. The reserve’s seven miles of serrated coast features more than a dozen quality
spots—from one of the West Coast’s best beginner
breaks to a heaving deepwater peak where big-wave
legends train. The wide array of points, reefs and
beachbreaks suck in Pacific swells from all directions, and the prevailing winds blow favorably year-round.

Santa Cruz’s surf roots date back to 1885, when
three Hawaiian princes rode hand-hewn redwood
planks in waves breaking near the San Lorenzo
Rivermouth—the first documented surf session on
the American mainland. A small but devoted core of local surfers kept the sport alive through the first half of the 20th Century, but it wasn’t until surf fever swept from coast to coast in the 1960s that surfing became forever woven into the very fabric of the community. In the decades since, innovative Santa Cruz surfers and manufacturers—from
wetsuit designers to surfboard shapers—have influenced
wave riders worldwide.

Today, Santa Cruz is home to thousands of surfers,
many of whom are devoted to protecting the coast from the ongoing threats of coastal developers and inland polluters.

The success of these coastal stewards is evident to anyone who ventures near the coast here on a day when the sun is out, the wind is right, and a solid swell is running. From Natural Bridges to Capitola, the surf zone buzzes with
hundreds of shortboarders and longboarders, groms and
geezers, heroes and kooks—all vying for sets in the cool, green, kelp-rich sea.

SANTA CRUZ WORLD SURFING RESERVE
WHY SANTA CRUZ?
85 Item 8 E.
(LEFT) DON PATTERSON. PHOTO: COURTESY OF THE HARRY MAYO COLLECTION. (RIGHT) THE THREE PRINCES—JONAH KUHIO KALANIANA’OLE, DAVID KAWANANA KOA AND EDWARD KELIIAHONUI—WHILE STUDENTS AT ST. MATHEW’S HALL, CIRCA 1885. PHOTO: COURTESY OF THE GEOFFREY DUNN COLLECTION.

SURF CITY NORTH
By Ben Marcus
A long time ago, in a decade far, far away, during a
time called the Nineties, the City of Santa Cruz got
wrapped up in a silly-serious debate with the City
of Huntington Beach over which town deserved the
official title of Surf City. Huntington Beach had its
arguments. Santa Cruz had its arguments. In the end,
the SoCal town prevailed, but not due to a lack of
strength on Santa Cruz’s claim.

Anyone who knows anything understands that
Huntington Beach has history on its side—from
Jan and Dean to Chuck Dent to the Op Pro to Brett
Simpson. But anyone who knows anything also knows
that Santa Cruz has the surf on its side—and no small
amount of history: from 19th Century Hawaiian
princes to 21st Century vermin.

The surfing coast of Santa Cruz faces south, and
the boundaries of the World Surfing Reserve (from
Natural Bridges to Opal Cliffs) encompass about six
miles of that coast as the seagull flies, and maybe a
mile farther as the Prius drives. They are six or seven miraculous miles of fractal coastline, thoroughly
exposed to every burp and billow coming from the
south, southwest, west, northwest, and even north.

The northwest winds which rake the rest of
Central California much of the year hit south-facing
Santa Cruz at a benign angle. That means most Santa
Cruz spots are often offshore or glassy when the coast
north and south is chopped to pieces. Just add swell—
from any direction—and Santa Cruz will make good
sense of it.

Santa Cruz is California’s own Seven Mile
Miracle, with fat waves, sissy waves, scary reefs,
beckoning right points, wedges, bowls, sand bottoms, a
pier break, a rivermouth, a harbor break, dredge-spoil
breaks, more beachbreaks, coves, bommies, minislabs, high-performance slingshots, longboard-perfect peelers, kelp, otters and more right points. It sits with its feet in the cool of the Pacific Ocean and its face in the sun that arcs from Salinas to the green flash.

And almost exactly in the middle of the
Santa Cruz World Surfing Reserve, at the mouth of the
San Lorenzo River, is where a big piece of California
surf history went down. On July 19, 1885, in the waves
that broke at the east end of what is now called Main
Beach, three Hawaiian princes were the first people in
mainland America to be seen “surfboard swimming”
on planks of wood.

The three princes—Jonah, David, and Edward—
were the adopted sons of the Hawaiian monarchs,
King David Kalakaua and his wife, Queen Consort
Esther Julia Kapi’olani. They’d come to California to
study at Saint Matthews Hall, a military school in San
Mateo. Apparently homesick, they shaped redwood
planks from a local lumber mill into rideable boards,
and their groundbreaking session at the San Lorenzo
Rivermouth made print in local newspapers.

Fast forward from the 19th Century to the first
two decades of the 20th. Were people surfing in Santa
Cruz? Probably. Back then, people who surfed were the
lucky few who had been all the way to Hawaii: whalers,
merchant seamen, solo sailors, naval personnel and the
One Percenters who could afford passage to Polynesia.

Sam Reid—who was a fixture on the Santa Cruz cliffs
in the 1970s, calling out the sets—went to Waikiki in
1909 and was one of the top watermen there in the
1920s and 1930s. Reid was “one of only six people
surfing on the West Coast when he started at age 17 in
1926,” according to local historian Tom Hickenbottom,
and the old-timer once described the area from
Cowell’s to Steamer Lane as “the perfect surfing spot.” The Santa Cruz Surfing Club began in 1936
when David Steward invited the growing group of
local surfers to store their boards in the basement of
his parents’ house at Gharkey Street and Lighthouse
Avenue. That location changed to a house on Bay
Street, where members stashed their boards in a barn
and sometimes slept in a loft. The club evolved from
loose to official when the Santa Cruz Jaycees built a
board shack at Cowell’s Beach. Six years later, they
transformed an abandoned hamburger stand into its
official clubhouse. It stood until 1952.

World War II tore a lot of young men and women
away from their idyllic lives on the beach in Santa
Cruz, but it also introduced many of them to the South
Pacific and its many allures. Those who survived the
war in the Pacific came home with a lust for life and
new ideas on how to live—and that included aloha
shirts, playing ukulele, beach parties and surfing.

Down in Southern California, the ’50s were, as
Miki Dora called them, “The Golden Years”—the
best time to be a surfer. Jobs were plentiful and the
living was easy. All the classic breaks that are elbow-toelbow on solid swells today—Rincon, Malibu, Trestles, Swami’s—were just as good then, but without the crowds. 86 Item 8 E.

HARRY MAYO. PHOTO: COURTESY OF THE HARRY MAYO COLLECTION.

In Santa Cruz, the ’50s were a colder shade of
golden. The big, heavy hardwoods that went so well
at Cowell’s were phased out by the balsa chips coming
up from Southern California, and then by foam.

Boards were down to 9 feet and 30 pounds—enough
to support a man but light enough to allow women
and kids to pick up the sport. The shorter, more
maneuverable boards opened up new spots and new
possibilities, from Mitchell’s Cove to the Wild Hook:
long, peeling, high-performance waves that were
perfect for the surfing and surfboards of the time.

Santa Cruz surfing is all about variety, and during
the 1950s, local surfers like the Van Dyke brothers,
Mike Winterburn, George Olson, Rich Novak and
a happy few others were joined by southerners like
Ricky Grigg and Peter Cole—who were in school at
Stanford—and Pat Curren, Buzzy Trent and other
future big-wave legends from down south who loved
the muscular walls of Santa Cruz. Big days at Steamer
Lane were considered a master’s degree before going to
Hawaii for a PhD in the “heavies.”
In 1959, Jack O’Neill laid one of the cornerstones
of the surf industrial complex when he moved his
family and his small but growing wetsuit business
from San Francisco to Santa Cruz, where the weather
was better and the surf friendlier. O’Neill’s original
product was neoprene-lined bathing trunks he made
to keep from freezing his balls off while bodysurfing
Ocean Beach. Now in Santa Cruz, O’Neill moved into
long johns, short johns and jackets. “I was just trying to support my family,” he would later say. O’Neill had
good timing, because 1959 was the year Columbia
Pictures’ Gidget looked back on the Golden Years
around Malibu and effectively ended them, lighting the
fuse of surf culture that would explode in the 1960s.

While most of the surf culture boom of the ’60s
was focused on Southern California—the Beach Boys,
Jan and Dean, Malibu and even Huntington Beach—
the surfing population also grew in Santa Cruz, and
with it came shops, manufacturers, clubs and contests.

Santa Cruz and competitive surfing had a shaky
relationship out of the ’60s and into the ’70s. In 1969, vandals pushed the scaffolding for an amateur contest
over a cliff and then refused to clear the water when
competitors for the first heat paddled out, calling
them “goose-stepping pigs.” During the ’70s John
Scott was a constant presence at Steamer Lane surf
contests, with his car and placards decorated with
anti-contest messages.

But not everyone in Santa Cruz was adverse to
competition or media coverage. In 1969, Roger Adams
became the first Santa Cruz surfer to make the cover
of Surfer magazine and a leading competitor on the
Western Surfing Association AAAA circuit. In 1971 he
finished second to Dru Harrison at the Santa Cruz 4A
Invitational—now known as the “Cold Water Classic.”
It is said that those who really experienced the
’70s in Santa Cruz shouldn’t be able to remember
them. That may or may not be true, but of all the
surfers, surfboards, ideas and trends coming out of
Santa Cruz from 1970 to 1979, the one with the most
lasting impact was the surf leash. Beginning in the
late ’60s, a loose affiliation of Santa Cruz surfers that included Steve Russ, Pat O’Neill, Roger Adams and
Michel Junod began experimenting with a variety
of techniques to keep their boards from getting
slaughtered by the rocks. “I broke three boards in a day surfing the Santa Cruz harbor,” Pat O’Neill would later say. “Back then the ding repair factories were busier
than the surfboard factories.”
The first surf leashes were made of surgical tubing
attached to suction cups on the nose of the board
SANTA CRUZ SURFING CLUB, ESTABLISHED 1936. PHOTO: COURTESY OF THE HARRY MAYO COLLECTION. 87 Item 8 E.
(ABOVE LEFT AND RIGHT, AND BELOW LEFT) TEAM O’NEILL THROUGH THE ‘60S, ‘70S AND ‘80S. PHOTOS: COURTESY OF O’NEILL. (BELOW RIGHT) JESEE COLOMBO. PHOTO: COURTESY OF RYAN CRAIG. then the wrist. Then leashes went through fins and
around the ankle, and finally they were attached to the deck of the board under a bridge made of fiberglass
rope. Once the right combination was figured out, surf
leashes gained gradual acceptance and a major sea
change happened in Santa Cruz and throughout the
surfing world: Surf spots were no longer segregated by
ability. Anyone could surf anywhere, and before long,
an ugly localism reared its head as some old-timers
began to resent the growing hordes of surfers and
the newfound courage that came with being tethered
to their boards. But the leash benefited experienced
surfers as well, allowing them to charge harder on
bigger days and get more creative on smaller days.

Through the ’70s, for the first time, Santa Cruz
surfers began to make names for themselves outside
of town. The most innovative among them was Kevin
Reed. Thin, fast and creative, Reed rode paper-thin
boards and was doing things that were many years and
even a few decades ahead of his time – including early
versions of the modern aerial. Surfers like Richard
and Dave Schmidt, Vince Collier, Greg Bonner, the
Van Dyke brothers and Karl Gallagher blazed paths
in small and large surf that were followed by the
next crew of surfers: Peter Mel, Darryl Virostko, Ken
Collins, Anthony Ruffo, Shawn Barron, Jason Collins,
Chris Gallagher and Adam Replogle.

These guys all received a solid kindergarten-tocollege education in small- and big-wave surfing, from Cowell’s to the Lane and up and down the coast. They
also had funny nicknames: Condor, Flea, Skindog,
Ruff, Barney, Ratboy, Gally and Rodent.

Collectively, the Santa Cruz crew was known
as “the Vermin,” but if they were rascals on land, in
school, in the parking lot and at parties, in the water they emerged as arguably the best all-around crew of
surfers in California—using the natural skatepark of
the town’s many points to work on their aerial surfing
and eventually conquering the heavies at Steamer Lane
and, later, at Maverick’s, the now-legendary big-wave
spot an hour north in Half Moon Bay.

Maverick’s pioneer Jeff Clark invited Dave
Schmidt and Tom Powers to have a go at Clark’s home
break. Schmidt and Powers paddled out cautiously and
got their minds blown by the giant, evil perfection.

Into the 1990s, the Vermin led the charge at Mavericks, pushing the limits deeper and bigger. They were joined
by a smiling young waterman who couldn’t have been
more uncool: Jay Moriarity was a longboarder, an
Eastsider, and he didn’t even have a funny nickname.

On a giant day at Maverick’s in 1994, Jay paddled
straight into the bowl, took off on the first wave that came his way, and launched himself into history,
enduring a horrendous wipeout that landed him on
the cover of Surfer.

Sarah Gerhardt also made history by being the
first female surfer to ride Maverick’s and is now part of a hard-charging crew of local women—including Jamilah
Star, Jenny Useldinger and Savannah Shaughnessy—who
are now riding a path blazed by the likes of Brenda Scott Rogers, Jane McKenzie and Karen Gallagher.

Going all the way back to those Hawaiian princes
handcrafting boards from local redwood, Santa Cruz
also has a long tradition of innovation and quality in
surfboard design and construction. The Mower’s Row
of Santa Cruz surfboard shapers includes: The Mitchell
brothers, Bill Grace, Johnny Rice, George Olson,
Gary and Jerry Benson, Jack O’Neill, Rich Novak,
Doug Haut, Joey Thomas, Mark Angell, Rick Noe,
Mike Croteau, Bob Pearson, Steve Colletta, John Mel,
William “Stretch” Riedel, Ward Coffey, Geoff Rashe, Mark Goin, Doug Schroedel, Ashley Lloyd, David Vernor, Nick
Palandrini, Marc Andreini, Buck Noe and many others.

If you had to pick the town’s most influential surfboard maker, however, it would probably have to be longtime shaper Randy French, who in 1992 began applying to surfboards the same construction techniques (such as injection molding and vacuum-bag glassing) used to make sailboards. Today, his Surftech label has revolutionized the surfboard market and established a new surf-industry powerhouse based in Santa Cruz.

Almost exactly 100 years after those three Hawaiian
princes first rode hand-carved redwood planks in front
of well-dressed beachgoers, the Santa Cruz Surf Museum
opened—the first of its kind on the U.S. Mainland. That opening is symbolic, because today Santa Cruz stands as a world leader in several crucial facets of surf culture: bigwave bravery, small-wave trickery, surfboard innovation, and cold-water protection.

Unlike Huntington Beach, which has officially
trademarked the term “Surf City,” Santa Cruz has never
tried that hard to sell itself as a surf mecca. But if you’re a visiting surfer and aren’t yet sold on the place, here’s what you should do: On a solid west swell day with offshore
winds and clear skies all the way to the Salinas Valley, ride your bicycle from one side of town to the other—from
Natural Bridges to Privates—by way of the Rivermouth and Harbor. You will leave with no doubt as to the true, natural greatness of Santa Cruz.

It’s a greatness that Santa Cruz surfers have been
upholding for more than a century now, and one that
they—and the world—have now dedicated themselves
to forever preserving by declaring its shores a World
Surfing Reserve.
88 Item 8 E.

NATURAL BRIDGES
Natural Bridges, or “NB’s” as it’s sometimes called, is as picturesque as a surf spot gets. Long fingers of flat, rocky reef bend northwest swells into well-shaped walls that range from playful to intimidating. On shore, birdwatchers compete with UC Santa Cruz Banana Slugs for towel space on the pristine white-sand beach. At higher tides, the inside section of the wave can produce a slurpy barrel that breaks over a shallow section of reef called the Tabletop, where faltering surfers often end up on dry rock faster than you can say “Westside pride.” Type of wave: Righthand reef-point.

Bottom type: Rock reef with sand mixed in on the inside.

Best tide: Medium to full.

Wave conditions: From W to NW swells.

Wind conditions: Prefers little to no wind, stronger NW winds blow it out.

Wave height: 3 to 15 feet.

Surf type: Semi-challenging to reef grinder.

Surfing ability: Advanced.

SAVE THESE WAVES The Santa Cruz World Surfing Reserve encompasses more than 20 surf spots, from soft user-friendly rollers to heaving black-diamond peaks. Here’s a look at five of the most legendary.

SANTA CRUZ WORLD SURFING RESERVE

SAVE THESE WAVES
JOSH LOYA. PHOTO: COURTESY OF WILLIAM HENRY. 89
Item 8 E.

STEAMER LANE. PHOTO: COURTESY OF BOOTS MCGHEE.

STEAMER LANE
Steamer Lane was named for the steamships that would thread their way through its offshore reefs during the 1930s.

It has been Santa Cruz’s central surf spot for more than 70 years now, and is one of California’s most consistent spots, comprised of four different breaks. The Point is directly under the Lighthouse and is best on a summer south or southwest swell. Lost boards almost invariably bash into the rocks at the Lane, which is why the surf leash was invented here. The Slot is a right section on the inside of the Point, and is an excellent performance wave. Middle Peak is a twoway peak that breaks farther out on big swells, with a meaty left and softer right. It’s a shifty, powerful, challenging wave that many have used as a preparation for Hawaii and Maverick’s. All of the big, disorganized energy washing in from Middle Peak rolls forward and re-forms into a long performance wall at Indicators. A perfect wave for modern, highperformance surfing, Indicators will also throw out a round barrel when it’s in the mood.

Type of wave: Right reef and point, with a left at Middle Peak.

Bottom type: Kelpy rock reef, with occasional sandbars as the seasons and tides ebb and flow.

Best tide: In general, a lower tide coming up is best, although usually surfable on most tides.

Wave conditions: From S to SW to W/NW/N swells; extremely consistent.

Wind conditions: Prevailing northwest wind blows offshore; east and south winds blow onshore.

Wave height: 1 to 15 feet plus.

Surf type: Gentle to thunderous.

Surfing ability: Intermediate to advanced.

SANTA CRUZ WORLD SURFING RESERVE

SAVE THESE WAVES
90 Item 8 E.

COWELL’S
On the inside of Lighthouse Point sits Cowell’s—one of the best beginner breaks in the world, possibly second only to Waikiki. It’s not uncommon to find as many as 200 people in the water on a nice day: locals, visitors, Banana Slugs, Vermin, Vals, surf schools, rippers, trippers, SUPers, grommets and surfagenarians. Cowell’s has been the incubator for Santa Cruz surfing since the 1920s. Its long, easy rollers were perfect for the unwieldy hardwood boards of the early 20th Century, and in the intervening decades many generations of Santa Cruz surfers have taken their first steps here before branching out to Steamer Lane, Pleasure Point, the Hook and beyond.

Type of wave: Soft, user-friendly rights.

Bottom type: Sand with some rock reef.

Best tide: In general, the lower the tide the better.

Wave conditions: From SW to W/NW/N swells; normally needs larger swells to break.

Wind conditions: Mostly protected from prevailing northwest wind; east and south winds blow onshore.

Wave height: 1 to 6 feet.

Surf type: Gentle.

Surfing ability: Beginner heaven.

SANTA CRUZ WORLD SURFING RESERVE

SAVE THESE WAVES
MATT MAKUDA. PHOTO: COURTESY OF PATRICK TREFZ. 91
Item 8 E.

PLEASURE POINT. PHOTO: COURTESY OF PATRICK TREFZ.

PLEASURE POINT
Pleasure Point concentrates a variety of breaks over a third of a mile of kelpy rock reef. A consistent wave that is open to swell from just about any direction, the point offers something for everyone. At the top, Rockview/Suicides is a right breaking off rocks into a sandy cove. Sewer Peak is the Black Diamond spot—a fast bowly right and a gnarly left off the main, powerful peak. Sewer Peak isn’t the longest wave along Pleasure Point, but it’s the most challenging and also the most competitive. First Peak is a longer, high-performance wave with a tight takeoff area and a mix of aggressive shortboarders and performance longboarders. Second Peak is a longboarder’s paradise and also a good place for intermediate surfers to work on their skills without getting in everyone’s way. On big days there is a Third Peak, and on the biggest days it is possible to ride a wave from outside First Peak all the way through to the wave known as Insides or 38th Avenue. On small days, 38th Avenue is a gentle beginner wave, but on bigger days, it transforms into a highperformance shortboard haven.

Type of wave: Right point and reef breaks.

Bottom type: Kelpy rock reef, with sandbars that come and go.

Best tide: Medium tides are generally best, although usually surfable at most tides.

Wave conditions: From SW to W/NW/N swells; consistent.

Wind conditions:The northwest winds blow side-offshore, although strong NW winds can blow out the top of the point. Thick kelp outside the breaks provide significant wind protection.

Wave height: 1 to 15 feet.

Surf Type: Easy to semi-gnarly and everything between.

Surfing ability: Beginners to superstars.

SANTA CRUZ WORLD SURFING RESERVE

SAVE THESE WAVES
92 Item 8 E.

THE HOOK
Back in the ’50s, or maybe it was the ’60s, this spot at the end of 41st Avenue became known as the Wild Hook. Some say that name came from the fast, curling waves that were a challenge to the longboards of the day. Others say the name came from the thick kelp that would “hook” the deep skegs of the time. Regardless, what modern surfers now know as the Hook is the top of a point that runs all the way down to Capitola. That entire point is divided into the Hook, Shark’s Cove, Privates and Trees. The Hook itself has three breaks: First Peak, Second Peak and Third Peak. What was a beloved longboard wave in the 1960s is now a beloved performance wave for 21st Century shortboarders, but longboarders like it, too. Alaiaflyers crave the place, because without fins, they don’t have to worry about all the kelp.

Type of wave: Right reef and point.

Bottom type: Kelpy rock reef, with sandbars that come and go.

Best tide: In general medium tides are best; low tides cause skegs to catch kelp, and high tides swamp it out.

Wave conditions: From SW to W/NW/N swells.

Wind conditions: The Hook is more protected from the wind than Pleasure Point. The northeast winds coming out of the Santa Cruz Mountains blow offshore. South winds wreck the place.

Wave height: 0.5 to 12 feet.

Surf Type: Playful to challenging.

Surfing ability: Intermediate to advanced.

SANTA CRUZ WORLD SURFING RESERVE

SAVE THESE WAVES
THE HOOK. PHOTO: COURTESY OF PATRICK TREFZ. 93
Item 8 E.
(BELOW) PELICAN, (ABOVE LEFT) CALIFORNIA SEA OTTER. PHOTOS: COURTESY OF RICK PUCKETT.

STARFISH. PHOTO: COURTESY OF KELLY VANDER KAAY.

Situated along the northern edge of Monterey Bay, a
little more than an hour’s drive south of San Francisco, the Santa Cruz World Surfing Reserve lies within the
coastal waters of the Monterey Bay National Marine
Sanctuary. Covering 276 miles of shoreline and
6,094 square miles of ocean (larger than Yellowstone
National Park), this federally protected area extends,
on average, 30 miles from shore. At its deepest point,
the sanctuary reaches down 12,713 feet, or more than
two miles. It is our nation’s biggest marine sanctuary.

The Surfing Reserve encompasses about seven of
the sanctuary’s 276 miles of coastline, including worldrenowned right-hand point breaks Steamer Lane and Pleasure Point. In all, some two dozen surf spots—
point, reef, and beachbreaks, both famous and lesser
known—fall within the reserve’s boundaries. Southfacing, Santa Cruz is well-protected from Central California’s prevailing northwest winds while also open to any swell direction except extreme north. Most of its beaches are overseen by California State Parks, the City of Santa Cruz, and Santa Cruz County.

At Steamer Lane, surfers run past barking sea
lions as they hustle toward the gladiator-like proving
grounds where wave energy converges with abruptly
sloping bedrock reefs. Here, world-class peaks are
born. Often compared to those of the North Shore,
these waves owe their existence to a fortuitous
confluence of geology and oceanographic processes.

The inner continental shelf near the reserve
consists of flat sandy areas, faults, boulder fields, and complex bedrock ridges, the amalgamation of which
provides the foundation for prolific marine ecosystems.

Each spring when the northwest winds blow, cold,
nutrient-rich waters rise up out of submarine canyons,
nourishing lush growths of marine algae and surface
plankton blooms. These provide sustenance for
many invertebrates and fish, a key food source for
cetaceans (whales, dolphins, porpoises), pinnipeds (seals and sea lions), and sea otters. Numerous species of sharks also inhabit the region, including blue, mako, and whites reaching more than 20 feet in length.

Santa Cruz is also home to the nation’s largest kelp
forest, 33 marine mammal species, 94 seabird species, 345 species of fishes, 4 species of turtles,
31 phyla of invertebrates, and more
than 450 algae species. An estimated
20,000 gray whales pass by Santa Cruz
each December during their annual
migration from Arctic feeding grounds
to their calving grounds off the Baja
peninsula. Blue, humpback, and killer whales are also
frequently spotted off the coast. A total of seven species of whales are found in local coastal waters, including the less frequently seen minke, beaked, and fin whales.

Within the city limits, 39 miles of watercourses,
creeks, and wetlands support diverse natural habitats,
transport storm water, and protect water quality. Local flora and wildlife depend on no less than twelve habitat types for their subsistence. These range from aquatic to salt

SANTA CRUZ WORLD SURFING RESERVE

ENVIRONMENTAL CHARACTERISTICS

OF SANTA CRUZ

BY KELLY VANDER KAAY
At its deepest point, the sanctuary
reaches down 12,713 feet, or more
than two miles. It is our nation’s
biggest marine sanctuary.
94 Item 8 E.

IMAGE: COURTESY OF NADINE GOLDEN AND CURT STORLAZZI OF U.S. GEOLOGICAL SURVEY PACIFIC COASTAL AND MARINE SCIENCE CENTER.

Oblique view to the northwest toward Point Santa Cruz. The southwest-trending bedrock ridge is composed of sandstone of the Purisima Formation, which crops out in Point Santa Cruz. The ridge runs more than 4 km (2.4 mi) offshore and forms reefs that focus the waves that break southeast of Point Santa Cruz at Steamer Lane. The irregular pattern of the shallow sea floor to the west of the bedrock ridge is a field of boulders hypothesized to be resistant bedrock concretions eroded from the Santa Cruz Mudstone that crops out west of Mitchell Cove. The sinuous channel that cuts across the bedrock ridge appears to have formed by erosion, possibly during a period of lower sea level; the abrupt change in water depth over this channel causes the gaps between Steamer Lane’s second and third peaks. The vertical exaggeration is 5x.

Approximate distance across the bottom of the image is 1.0 km [0.6 mi].

WHITE HERON. PHOTO: COURTESY OF RICK PUCKETT.
sediment, fecal bacteria, pesticides, industrial discharge, oil, grease, plastics, metals, and detergents. Fragile
habitats and species are under constant assault from
beachfront development, recreational activity, and
seaborne commerce. The Santa Cruz chapter of
the Surfrider Foundation has led the fight against
several proposed coastal construction projects, such
as seawalls and large-scale housing development.

Surfrider activists have also been involved in local
bans on Styrofoam takeout containers and plastic bags
and helped push regulations for monitoring of toxic
emissions from the harbor’s ongoing dredge disposal.

Despite these successes, local marine wildlife
remains under threat from urban encroachment. For
instance, the Monterey Bay sea otter population has
decreased annually for the past three years, based on
a running average. Nearly driven to extinction by fur
trading in the early 1900s, they were designated as
threatened by the United States Fish and Wildlife
Service in 1977. They now number approximately 2,700.

The smallest marine mammal in North America,
the sea otters are considered an indicator of the
health of nearshore marine ecosystems, because
they are relatively sedentary and thus susceptible
to contaminants. Kelp canopies serve as a primary
foraging area for many sea otters, which consume kelp
grazers like the sea urchin. This, in turn, enhances kelp production. If otter populations decline, urchins and
marsh to freshwater wetland, and from grassland to
woodland to forest. Santa Cruz’s mild Mediterranean
climate and geography support such diverse vegetation
as pickleweed, willow, eucalyptus, pine, black
cottonwood, coastal oak, big leaf maple, redwood, and
Douglas fir. Maintaining this vegetation not only has a significant positive effect on reducing the potential for landslides and floods, but also is crucial to the survival of local wildlife. Examples include gray foxes, mallard ducks, snowy egrets, coho salmon, steelhead, and
monarch butterflies in the lower watershed, and brush
rabbits, salamanders, squirrels, hawks, and deer in the upper watershed.

Spanish for “Holy Cross,” Santa Cruz is flanked
by mountains bearing its name. Well known for the
raw beauty of its windswept beaches, sandstone cliffs,
and chaparral-covered slopes, Santa Cruz is just
as breathtaking above water as it is below. But that
beauty is in a perpetual state of flux—the coastline’s
spectacular arches, bridges and rock formations are
under eternal siege from winter storms and strong surf.

Natural Bridges State Beach, along the western end
of the reserve, was named for three bridges that once
stood along the promontory at the beach’s southern
edge. Today, only a single bridge remains.

Resource-protection issues within the reserve
stem from the ocean’s vulnerability to pollution via
the urbanized watersheds that drain into it, delivering other invertebrates can destroy kelp forests. This results in both increased potential for erosion on shore (kelp absorbs some of the energy of waves and storm surges) and loss of habitat for gray whales, sea lions, harbor seals, birds, and numerous invertebrates and fishes.

The greatest threat to sea otters continues to be urban runoff, which contains pathogens considered “unnatural” to the species, along with other contaminants such as
PCB, DDT, and tributyltin (an antifouling agent found in boat paint). Addressing the flow of harmful substances
into the ocean remains central to sea otter recovery. If left unregulated, urban development and industrial activity
present serious threats to the very natural resources that sustain humans and wildlife.

Now that Santa Cruz has been named the fourth World
Surfing Reserve, the reserve’s Local Stewardship Council will monitor water quality and other potential risks to this region of incredible beauty and biological diversity.

SANTA CRUZ WORLD SURFING RESERVE Well known for the raw beauty of its windswept beaches, sandstone cliffs, and chaparral-covered
slopes, Santa Cruz is just as breathtaking above
water as it is below.
95 Item 8 E.
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PHOTO: COURTESY OF NIKKI BROOKS 96
Item 8 E.
97 Item 8 E.
98 Item 8 E.

RESOLUTION NO. XXXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPITOLA

SUPPORTING THE INCORPORATION OF CAPITOLA INTO THE SANTA CRUZ WORLD

SURFING RESERVE
WHEREAS, the City of Capitola is known to many for its outstanding surf breaks, and surfing is not only a key industry in our community but a part of the community’s cultural identification; and WHEREAS, the Santa Cruz World Surfing Reserve is the official fourth World Surfing Reserve in the world and was designated on April 28, 2012; and WHEREAS, the Santa Cruz World Surfing Reserve is located on the northern side of Monterey Bay along California’s Central Coast within the protected coastal waters of the Monterey Bay National Marine Sanctuary; and
WHEREAS, by endorsing the incorporation of the City of Capitola into the Santa Cruz World Surfing Reserve our community will formally recognize the long and close relationship between surfers and the ocean, and by this action promote the long-term preservation of these irreplaceable sites for recreation and competitive surfing; and
WHEREAS, the sport of surfing and its irreplaceable recreational sites are of undeniable ongoing value to our community’s economy; and
WHEREAS, a World Surfing Reserve is purely ceremonial and memorial in nature and its provisions should not be used to limit how specified surfing areas are used; and WHEREAS, the incorporation of Capitola into the Santa Cruz World Surfing Reserve will further increase our city’s growing reputation as an environmentally aware and forward-looking community.

NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Capitola that it herby supports the incorporation of the City of Capitola into the Santa Cruz World Surfing Reserve.

I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the City Council of the City of Capitola on the 27
th day of June, 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
_____________________
Kristen Brown, Mayor
ATTEST:
99 Item 8 E.
____________________ ___
Julia Gautho, City Clerk
100
Item 8 E.

Capitola City Council
Agenda Report
Meeting: June 27, 2024
From: Police Department
Subject: Wharf Grand Opening Special Event Permit
Recommended Action: Approve a new single-day Major Special Event Permit on September 25, 2024, for the Capitola Wharf Grand Opening and Ribbon Cutting.

Background: Ordinance No. 1065, enacted by the City Council in March 2024, introduces updated processes and a revised fee schedule for special event permits within the City. This ordinance is designed to streamline the approval process and ensure proper regulation of various types of events held within City limits. The ordinance categorizes special events into three primary types: Major Special Events, Minor Special Events, and Neighborhood Street Closure Events. The primary differences between a Major Special Event and a Minor Special Event vary due to the proposed event’s crowd size and roadway impacts. Minor Special Events can be approved administratively by the Chief of Police, however any new Major Special Event must be presented to the City Council for review and consideration.

In 2023, the City of Capitola experienced a series of winter storms that caused historic wave events causing significant damage to the Capitola Wharf. Following completion of the Wharf Resiliency Project, the City plans to host a ribbon cutting and grand opening event for the renovated Wharf. Consitent with City Council direction, staff has applied for a one-day Major Special Event for Wednesday, September 25, , 2024, from 10:00 AM to 8:00 PM, with the event held from 2:00 PM – 6:00 PM on Capitola Wharf.

The event will include three food trucks, a live band, and public acknowledgment of dignitaries and City officials. This event will be similar to other City-sponsored events like the Food Truck Friday events and Twilight Concerts, to include a small beer garden and three food trucks. This City-hosted event will be free and open to the public.

Discussion: The anticipated attendance for this four-hour event is between 200 to 300 persons. The Police Department will assist with limited road closures at the base of the Wharf and will provide foot patrol during the event. This event will be free and open to the public. Patrons are encouraged to find alternative modes of transportation and a bicycle parking lot will be set up. Attendees will be encouraged to visit the Wharf and to support all merchants and local restaurants in the Village. A one-day alcohol license (issued by CA Alcoholic Beverage Control) will be required for the beer garden following State law and our policy.

Fiscal Impact: This is a City-hosted event and all costs will be managed by the City Manager’s Office and absorbed by respective Departments.

Attachments:

1. Major Special Event Permit – Capitola Wharf Grand Opening

2. Wharf Map with layout
Report Prepared By: Andrew Dally, Chief of Police
Reviewed By: Julia Gautho, City Clerk; Chloé Woodmansee, Assistant to the City Manager Approved By: Jamie Goldstein, City Manager
101
Item 8 F.

Page 1 ends

422 CAPITOLA AVENUE
CAPITOLA, CALIFORNIA 95010
TELEPHONE (831) 475-4242
FAX (831) 479-8881
Applicant Information:

Name of Applicant: ____________________________________________________________________ Address: ________________________________ City________________ State ______ Zip_________ Phone #: ___________________________________Email: ____________________________________ Organization Information:

Company Name:_______________________________________________________________________ Address: ________________________________ City________________ State ______ Zip_________ Phone #: ___________________________________Nonprofit ID:_______________________________ Website: _____________________________________________________________________________ Event Information:
❑ Athletic Competition ❑ Parade ❑ Festival ❑ Water/Surf ❑ Other:______________________ Event Name:

Event Date: Event Date:

Start Time End Time Start Time End Time
Setup Setup
Open to Public Open to Public
Breakdown Breakdown
Event Location:_______________________________________ Anticipated Attendance: ___________ Event Description:
____________________________________________________________________________________ ____________________________________________________________________________________ Name of Onsite Event Coordinator During Event: ___________________________________________ Phone #: ___________________________________Email: ____________________________________

MAJOR SPECIAL EVENT PERMIT APPLICATION
*Application fee of $68 must be submitted with this completed application* 420 Capitola Ave. Capitola CA 95010
831-475-7300
Same as above
cityofcapitola.org
✔
Music/Food Trucks/Beer
Wharf Grand Opening & Ribbon Cutting
10am 2pm
2pm 6pm
8pm
Capitola Wharf
Food Trucks & Beer Garden (2pm-6pm)
Grand Opening ceromony: Leaders Speak/Public Address (2:30-3:30) Music following (4:00-6:00) Kelly Barreto
[email protected]
[email protected]
200-500
831-818-3026 cell
City of Capitola
September 18, 2024
6pm
102
Item 8 F.

Page 2 ends

1. ❑ Yes ❑ No Has this event been held before? Number of years?

2. ❑ Yes ❑ No Is this a charitable fundraiser? For what cause?

3. ❑ Yes ❑ No Will participant registration fees be charged? Registration fee amount?

4. ❑ Yes ❑ No Will you be selling merchandise? Type of merchandise?

5. ❑ Yes ❑ No Will alcohol be sold or served? ❑ Beer ❑ Wine ❑ Alcohol Note: ABC Permit will be required. Applicant will coordinate with Capitola Police Department.

6. ❑ Yes ❑ No Will food be sold or served? ❑ Pre-packaged ❑ Food Trucks ❑ Other Note: Food service may need to be approved by the County Health Department.

7. ❑ Yes ❑ No Will you be cooking onsite? ❑ Wood/Charcoal BBQ ❑ Liquid Fuel Device

8. ❑ Yes ❑ No Will any generators be used? Location:

9. ❑ Yes ❑ No Will banners/signs be used?
Note: Applicant must complete an Over-the-Street Banner Application.

10. ❑ Yes ❑ No Will canopies be used? Quantity? Type?

11. ❑ Yes ❑ No Will you be setting up a stage? Details (W x L x H):

12. ❑ Yes ❑ No Will you be using the Capitola Bandstand? Note: Describe use information on page # 4. Separate fees to be paid by applicant.

13. ❑ Yes ❑ No Will reserved parking be requested? Number of Spaces? Note:
• Document parking locations on page # 4. Separate parking fees to be paid by applicant. • “No Parking” signs must be posted seventy-two (72) hours prior to your event start time. • See Guidelines for “No Parking” Signage and Towing During Special Events document for specific public notification and posting requirements.

14. ❑ Yes ❑ No Will a street closure be requested?
Note:
• Specify street names and closure times on page # 4.
• “No Parking” signs must be posted seventy-two (72) hours prior to your event start time. • See Guidelines for “No Parking” Signage and Towing During Special Events document for specific public notification and posting requirements.

15. ❑ Yes ❑ No Do you anticipate any police needs?
Note:
• Describe police needs on page # 4.
• Some events will be required to have Capitola Police Department Officers assigned and paid for at appropriates rates by applicant.

16. ❑ Yes ❑ No Do you anticipate any lifeguard/first aid needs? Note:
• Describe lifeguard/first aid needs on page # 5.
• Some events will be required to have City of Capitola Lifeguards assigned and paid for at appropriates rates by applicant.

17. ❑ Yes ❑ No Will you be using private security?
Security Company Name:

18. ❑ Yes ❑ No Will you have portable toilet facilities? Note:
• Describe toilet facilities plan on page # 5.
• One (1) portable restroom per every 100 people with 10% being ADA Compliant is required.

19. ❑ Yes ❑ No Do you have a garbage/recycling plan? Describe garbage/recycling plan on page # 5. ✔
✔
Beer Garden-Jr Guard Parents
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
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✔ ✔
✔
✔
Food Trucks may use
pop up 10'x10'
12' x 16'
Wharf Rd
5 103
Item 8 F.

Page 3 ends

Amplified Sound Information:

1. ❑ Yes ❑ No Will sound amplification be used?
Note: Applicant must complete an Amplified Sound Permit Application. Separate fee to be paid by applicant.

2. ❑ Yes ❑ No Have you read, considered, and agree to abide by the rules and regulations for sound amplification?
Type of Amplified
Sound
❑ PA Speaker System for Announcements Only
❑ PA Speaker System for Announcements and Music
❑ Professional Sound System for Music
❑ Professional Sound System for Live Music/Band
Live Music/Band Info Name of Band:

Type of Music:

Will sound checks be conducted prior to the event? ❑ Yes ❑ No If yes, date(s) and time(s):

3. ❑ Yes ❑ No Will fireworks, rockets or other pyrotechnics be used? Pyrotechnics Company Name:

Pyrotechnics Company Address:

AGREEMENT AND SUBMITTAL INFORMATION
There are no refunds for cancelled events. A completed application package, with associated forms, are required for permit consideration. Completed applications include:
❑ Application Form(s)
❑ Detailed Plans with Timelines
❑ Diagram of Event Layout and Set-Up Location(s) (including location markers) ❑ Security and Public Safety Plan
❑ Certificate of Insurance
❑ Non-Refundable Application Fee(s)
By signing below, I declare, under penalty of perjury, that I am the authorized representative of the organization listed on this application and that the information contained in the foregoing application is true and correct to the best of my knowledge and understanding.

Name of Applicant: ____________________________________________________________________ Signature of Applicant:______________________________________ Date: _____________________ Completed application, supporting documents and fee(s) should be submitted to the Special Event Coordinator. Checks should be made payable to the City of Capitola. Visa and MasterCard payments are accepted in person only.

Capitola Police Department
Attn: Esmeralda Gonzalez
422 Capitola Avenue
Capitola, CA 95010
(831) 475-4242
✔
✔
✔
✔
✔
City of Capitola
Kelly Barreto
6/05/2024
Digitally signed by Kelly Barreto
DN: cn=Kelly Barreto, o=City of Capitola,
ou=City, [email protected], c=US
Date: 2024.05.21 08:30:47 -07'00'
TBA
TBA
1:30 pm
104
Item 8 F.

Page 4 ends

Bandstand Use Information:

Reserved Parking Information:

Street Closure Information:

Police Needs:

Request reserved parking for all public parking spots on Wharf Rd. (Spaces #405- #413) N/A
Assist with:
1) Staffing Wharf/Wharf Rd for public safety
2) Anticipating attendance from politicians (requesting extra assistance with safety and coordination) N/A
105
Item 8 F.

Page 5 ends

Lifeguard/First Aid Needs:

Toilet Facilities Plan:

Garbage/Recycling Plan:

Other Pertinent Information Not Listed on Application:

Requesting Medical Tent
Anticipating public can use public restrooms on wharf
Requesting assistance from Public Works to place extra cans in food/beer areas as well as on Wharf. Also requesting extra help monitoring cans and emptying when needed.

This is the first public social on the Wharf. We anticipate a lot of interest from the public to attend this land mark event. Anticipating extra assistance and support from PD and Public Works. 106
Item 8 F.

Food Truck
#1
Stage
Hoist
Utility Hook Up
97 feet
26 feet
Boat storage
2-12’x8’
storage
Fuel
Storage
2-20’x10’ temporary
bu ild ings
Food Truck
#2
Food Truck
#3
medic
Beer Garden
no alcohol beyond this point
107
Item 8 F.

Capitola City Council
Agenda Report
Meeting: June 27, 2024
From: City Manager Department
Subject: City Council Appointments to City Advisory Bodies Recommended Action: Appoint members of the public to the City of Capitola Finance Advisory Committee.

Background: The Finance Advisory Committee (FAC) advises the City Council on financial matters pertaining to the governing of the City, as well as on the use of fiscal resources. The FAC is comprised of seven members, appointed by individual Council Members on the basis of their knowledge, experience, and qualifications in financial management and related areas. The FAC was created in 2000 through the adoption of Resolution No. 3063.

Discussion: In accordance with Government Code Section 54974, recruitment was conducted to fill two unscheduled vacancies on the FAC. The notice of vacancy was posted at City Hall, in a local newspaper, on the City website, and advertised through social media. Staff also reached out to the Capitola Village and Wharf Business Improvement Area (CVWBIA) and the Capitola Soquel Chamber of Commerce.

Applications for appointment on any City advisory body are accepted year-round and remain valid for a one-year period.

Attached are the applications for appointment received on or before the printing of this agenda packet.

The FAC Bylaws were amended on May 9, 2024, to change the composition of membership to allow a resident to be appointed if no business applicants are on file. Currently, the FAC has one resident application (Melinda Orbach) and one youth resident application (James Joyce).

Fiscal Impact: None.

Attachments:

1. Applications
Report Prepared By: Julia Gautho, City Clerk
Reviewed By: Samantha Zutler, City Attorney
Approved By: Jamie Goldstein, City Manager
108
Item 9 A.

Application For:

First Name *
Last Name *
Email*
Current Address *
Telephone (Home)
Telephone (Mobile)*
Application For:

Applicant Information
Melinda
Orbach
City State / Province / Region
CA
Postal / Zip Code Country
USA
Street Address
Address Line 2
109
Item 9 A.

Are you a Capitola resident?*
Residential Neighborhood:

Are you applying as a Youth Member to an Advisory Group?* Qualifications
Additional Attachments
Acknowledgement Required*
Signature *
Yes
No
Youth Members are encouraged to participate with City Boards, Committees, and Commissions.

Occupation:

Please describe your qualifications and interest in serving on this Board/Commission/Committee:* Family Nurse Practitioner
I am a curious and interested resident of Capitola who wants to learn more about the financial health of the city.

I want to get a better understanding of how revenue is divided into each department, including pension obligations, and how we are planning for economic growth and sustainability.

Application For:

First Name *
Last Name *
Email*
Current Address *
Telephone (Home)
Telephone (Mobile)*
Application For:

Applicant Information
James
Joyce
City State / Province / Region
CA
Postal / Zip Code Country
United States
Street Address
Address Line 2
111
Item 9 A.

Are you a Capitola resident?*
Residential Neighborhood:

Are you applying as a Youth Member to an Advisory Group?* Qualifications
Additional Attachments
Acknowledgement Required*
Signature *
No
Live oak
Yes
Youth Members are encouraged to participate with City Boards, Committees, and Commissions.

Occupation:

Please describe your qualifications and interest in serving on this Board/Commission/Committee:* Student/Intern
As a former member of the City of Capitola recreation team, junior guard, and a new intern with the City of Capitola finance department, I am interested in serving on this board because I can help support the committee with a youth voice and make sure a portion of the funds is directed towards teens and kids in the City of Capitola.

CITY COUNCIL APPOINTMENTS

TO ADVISORY BODIES
June 27, 2024 113
Item 9 A.

Background
 FAC is composed of 7 members
 Mayor & Vice Mayor
 3 Capitola Residents
 2 Capitola Businesspeople
 5/9/24: Bylaws amended to allow for appointment
of non-business rep if no applications on file
 Vacancy for two business rep terms ending December
31, 2024
114
Item 9 A.

Applicants
 Melinda Orbach – Resident
 Anthony Guajardo – Business
 Matt Arthur – Business
 Keith Cahalen – Resident
 Leslie Nielsen – Business
 Daniel Castagnola – Business
115
Item 9 A.

Recommended Action
 Staff recommends Council appoint members
of the public to City’s Finance Advisory
Committee for terms expiring on
12/31/2024
116
Item 9 A.
4876-8188-2057 v1
Capitola City Council
Agenda Report
Meeting: June 27, 2024
From: City Manager Department
Subject: 2024 General Municipal Election
Recommended Action: 1) Adopt a resolution ordering the 2024 General Municipal Election, requesting the Santa Cruz County Department of Elections conduct the election, and requesting consolidation of the General Municipal Election in the City of Capitola on Tuesday, November 5, 2024; and 2) Adopt a resolution submitting a ballot measure to Capitola voters to increase the City’s transactions and use tax through December 31, 2034 at the General Municipal Election to be held on Tuesday, November 5, 2024, requesting consolidation by the Santa Cruz County Board of Supervisors of the election regarding said measure with the Statewide General Election to be held on the same date and that Santa Cruz County provide election services with full reimbursement by the City of Capitola, directing the City Attorney to prepare an impartial analysis, authorizing the City Council to appoint two City Council Members to an ad hoc subcommittee to submit an argument supporting the Measure, and releasing the rebuttal argument.

Background: Pursuant to Chapter 1.30 of the Capitola Municipal Code, General Municipal Elections are to be held on the same day as statewide General Elections. The 2024 General Municipal Election will be held in Capitola on November 5, 2024. At the 2024 General Election, voters will elect two members of the City Council, each for a term of four years, and vote on a City-sponsored ballot measure to repeal an existing 0.25% transactions and use (“Sales Tax”) and replace it with a 0.5% Sales Tax through December 2034. An information sheet regarding the offices to be filled and the nomination procedure is included as Attachment 1.

The City of Capitola’s elections have traditionally been consolidated with other Santa Cruz County local elections, and conducted by the Santa Cruz County Elections Department, at the City’s request. Pursuant to Elections Code section 10403, the City Council must adopt a resolution ordering an election, requesting consolidation, and requesting the County conduct the election.

California Elections Code requires the City to publish a Notice of Election between July 1 and July 15, 2024.

History of Sales Tax Measure:

Capitola voters first approved a Temporary 5-year 0.25% (1/4 cent) Sales Tax in 2004 (Measure P) and then extended the tax through December 31, 2017, with the passage of Measure D in 2008.

In 2012, assuming the Temporary Sales Tax authorized by Measure P would expire in 2017, the City adopted a Permanent Sales Tax of 0.25%, codified in Capitola Municipal Code Chapter 3.11. This 0.25% Sales Tax is unaffected by the Proposed Sales Tax Measure.

In 2016, Capitola voters passed Measure F, extending the Temporary Sales Tax through December 31, 2027. Measure F provides funding for essential City services, including Wharf storm repair projects, and public safety operations during the pandemic. Since the passage of Measure F, the City has used Measure F funds to purchase a new Beach Loader to grade and rake beach sand to prepare it for summer usage and lagoon management, rehabilitated the flume and jetty, and is in the final stages of completing the Wharf Resiliency and Public Access Project.
117
Item 9 B.
4876-8188-2057 v1
As of July 1, 2024, the average sales tax rate in California is currently 8.75%. Cities in Santa Cruz County have the following sales tax rates:

Capitola 9.0%
Santa Cruz 9.75%
Watsonville 9.75%
Scotts Valley 9.75%
Unincorporated Santa Cruz County 9.50%
Capitola’s current 9.0% Sales Tax rate includes the statewide rate of 7.25% plus 0.5% of Capitola-specific district taxes and 1.25% of regional district taxes (Metro, RTC, Library) . Of the total 9.0% collected, Capitola receives 1.50%.

Over the past decade, Capitola’s revenues have not kept pace with the growing costs of providing and maintaining essential municipal services and facilities. It is becoming increasingly challenging to maintain the quality of City services, such as crime prevention, pothole repair, and street maintenance. Demand for services continues to increase and, despite cost-reducing measures, the City will face a structural deficit beginning in FY 2027-28 when Measure F expires. To maintain service levels for residents and visitors, additional revenue sources are needed.

Polling Results:

On November 21, 2023, the City Council authorized an Agreement with EMC Research to conduct polling with Capitola voters on potential revenue measures to be placed on the November 2024 ballot. EMC Research returned to the City Council on March 14, 2024, to present the results of the polling.

EMC Research conducted a multi-modal survey by using email, telephone, and text-to-web options from January 10-28, 2024. They conducted 206 interviews in English and Spanish by trained, professional interviewers. Overall, polling showed that a majority of voters recognize the City’s need for additional funding and are willing to maintain services through taxes. The survey results show that support for a renewal of the expiring one-quarter cent sales tax is well above the threshold. The survey also identified voter priorities, such as maintaining public safety response, maintenance of roads, sidewalks, and bike lanes, continuing recreation programs for youth, and protection of the beach and the Wharf.

On April 11, City Council received an update regarding the overall projected ballot landscape for the November 2024 election and directed staff to pursue a measure to replace Measure F with a new 0.5% Sales Tax.

In order to continue to obtain community input on priorities as well as to educate the community on the City’s current and projected financial condition and services, staff met with residents and community groups. In addition, staff held a joint City advisory body meeting to provide information to appointed board, committee, and commission members and City volunteers.

Working with EMC Research and the City Attorney’s Office, staff prepared the following language for presentation to the voters:
118
Item 9 B.
4876-8188-2057 v1
Discussion: Revenue and Tax Code section 7285.9 authorizes the City Council to levy, increase, or extend a general Sales Tax if the ordinance proposing the tax is approved by two-thirds of all members of the Council (four affirmative votes), and the tax is then approved by a majority of voters in the City voting on the measure. The deadline to place a measure on the November 2024 ballot is August 9, 2024.

The proposed Ordinance amends Capitola Municipal Code sections 3.10.050 and 3.10.070, to increase the temporary sales tax rate from 0.25% to 0.50%. The Ordinance would also amend the sunset date to extend the Sales Tax through December 31, 2034.

The proposed increased general Sales Tax of one-half of one percent (0.50%) for a 10-year period is projected to generate an estimated $22 million in additional revenues over the ten-year life of the proposed measure (assuming an average sales tax revenue increase of 1% per year); with the actual revenues determined by economic conditions.1
The revenue from the proposed Sales Tax Measure would be paid in addition to the existing Sales Tax and would be collected at the same time and in the same manner as the existing Sales Tax. 2 All revenue
generated would be dedicated to Capitola and would not be diverted to the state or other agencies.

Because the proposed Sales Tax Measure is a general tax, the revenues would go into the City’s General Fund and could be used for any general municipal purpose.

Under Revenue and Tax Code section 7265, if adopted by the voters, the increased Sales Tax would go into effect on the first day of the first calendar quarter commencing more than 110 days after adoption of the Ordinance. The Ordinance is considered “adopted” when the vote is declared by the City Council. (Elec. Code § 9217.)
Revenue from the proposed Sales Tax Measure would be reviewed in the following ways:
 In an annual audit, conducted by independent auditors;  In an annual review of revenues by the City’s Finance Advisory Committee; and  In an annual review of the City’s operating budget and revenues by the City Council.

Ballot Arguments: Elections Code Section 9282 allows the legislative body, any member or members of the legislative body authorized by the body, any individual voter who is eligible to vote on the measure, bona fide association of citizens, or any combination of voters and associations, to submit an argument for or against a measure placed on the ballot by the legislative body. Arguments may not exceed 300 words in length and must be submitted to the Capitola City Clerk by a deadline to be established by the Santa Cruz County Elections Department. The draft resolution authorizes the City Council to submit arguments in favor of the measure on behalf of the City Council.

1 Pursuant to the California Revenue and Taxation Code, food items (groceries), prescriptions, certain medical devices, and other “Necessities of Life” are exempt from sales tax. 2 District taxes on vehicle sales are treated differently and depend on where the vehicle will be registered, rather than where the vehicle is sold.

To protect essential city services including public safety and emergency services; repair potholes, maintain streets,
sidewalks, bike lanes, beaches, the new wharf, and recreation programs for youth; improve traffic safety; and support local businesses, shall City-of-Capitola replace its quarter-percent sales tax, approved by voters in 2016, with a one-half percent sales tax, generating an estimated $2.2 million annually for general government use, for ten years, with independent audits, and all funds staying local?
119
Item 9 B.
4876-8188-2057 v1
Pursuant to Elections Code 9285 (a)(2) the author or the majority of the authors of an argument relating to a City Measure may prepare and submit a rebuttal argument or may authorize in writing another person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument shall not exceed 250 words. The draft resolution authorizes the release of the City Council’s rebuttal argument, to allow other individuals to draft and submit a rebuttal argument.

Fiscal Impact: The Santa Cruz County Elections Department has provided the following cost estimate:
$4.50 to $6.50 per voter per contest. The contest refers to the question being posed to the voters. The City Council seats up for election count as one contest. Capitola has approximately 6,900 registered voters. The estimate for two contests is $62,100. The FY 2024-25 Budget has funds allocated for the election.

Staff estimates that the proposed half-cent Sales Tax would generate $2.2 million annually. This increase is projected to generate an estimated $24 million in additional revenues over the ten-year life of the measure (assuming an average increase in sales tax revenues of 2.5% per year); with actual revenues determined by economic conditions.

Attachments:

1. General Municipal Election Information Sheet

2. Resolution Calling the Election

3. Resolution, with proposed Ordinance Amending Municipal Code Sections 3.10.050 and

3.10.070 and Sec. 16 of Ordinance No. 880 as Exhibit A – Ballot Measure Report Prepared By: Julia Gautho, City Clerk
Reviewed By: Samantha Zutler, City Attorney
Approved By: Jamie Goldstein, City Manager
120
Item 9 B.

Capitola
City Council
Election 2024
Run for
Office!
2 SEATS UP FOR ELECTION
Call For Details ON NOVEMBER 5
831-475-7300
CITY HALL:
420 CAPITOLA AVENUE
CAPITOLA, CA, 95010
CONTACT:

JULIA GAUTHO, CAPITOLA CITY CLERK
[email protected]
1) MEET WITH CITY CLERK:

Schedule an appointment to learn
more info and collect forms and
nomination papers.
2) GET SIGNATURES:

Collect 20 to 30 signatures of
registered Capitola voters
(verified by the County Clerk).
3) FILE ON TIME:

Turn in all required forms and
paperwork by August 9.

HOW TO RUN:

JULY 15 - AUGUST 9
121
Item 9 B.

The purpose of the City Council is
to establish local laws, establish
programs, allocate funds, and
provide direction through the City
Manager to City staff.

Capitola City Council is composed
of five council members, all of
whom are directly elected by the
voters in the City of Capitola to
serve four-year terms. The Council
appoints a mayor and vice mayor
annually.

Capitola City Council generally
meets twice a month. In addition,
Council members may serve on
other City & Countywide Boards.

City Council members receive a
monthly stipend.

WHAT DOES
CITY COUNCIL DO?

ELIGIBILITY FOR OFFICE
You must be:

Capitola resident
Registered voter
18+ years old
www.cityofcapitola.org
Capitola Municipal Elections are
conducted by the Santa Cruz
County Clerk / Elections Office
and often consolidated with State
and Federal regular elections.

Capitola City Council candidates
work and file papers with the
Capitola City Clerk to have their
name on the November 5 general
election ballot.

WHO CONDUCTS
THE ELECTION?
You should be:

Passionate
Collaborative
Dedicated to Capitola's future
122
Item 9 B.
4889-3698-8096 v1
RESOLUTION NO. XXXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPITOLA ORDERING AN

ELECTION, REQUESTING THE SANTA CRUZ COUNTY DEPARTMENT OF ELECTIONS TO

CONDUCT THE ELECTION, AND REQUESTING CONSOLIDATION OF THE GENERAL MUNICIPAL ELECTION IN THE CITY OF CAPITOLA ON TUESDAY, NOVEMBER 5, 2024 WHEREAS, pursuant to Elections Code Section 10002, the governing body of any City may by Resolution request the Board of Supervisors of the County to permit the County Elections Official to render specified services to the City relating to the conduct of an election; and
WHEREAS, the Resolution of the governing body of the City shall specify the services requested; and
WHEREAS, pursuant to Elections Code Section 10002, the City shall reimburse the County in full for the services performed upon presentation of a bill to the City; and WHEREAS, pursuant to Elections Code Section 10400, whenever two or more elections, including bond elections, of any legislative or congressional District, Public District, City, County, or other political subdivision are called to be held on the same day, in the same territory, or in territory that is in part the same, they may be consolidated upon the order of the governing body or bodies or officer or officers calling the elections; and WHEREAS, pursuant to Elections Code Section 10400, such election for cities may be either completely or partially consolidated; and
WHEREAS, pursuant to Elections Code Section 10403, whenever an election called by a district, city or other political subdivision for the submission of any question, proposition, or office to be filled is to be consolidated with a statewide election, and the question, proposition, or office to be filled is to appear upon the same ballot as that provided for that statewide election, the district, city or other political subdivision shall, at least 88 days prior to the date of the election, file with the board of supervisors, and a copy with the elections official, a resolution of its governing board requesting the consolidation, and setting forth the exact form of any question, proposition, or office to be voted upon at the election, as it is to appear on the ballot, acknowledging that the consolidation election will be held and conducted in the manner prescribed in Section 10418. Upon such request, the Board of Supervisors may order the consolidation; and WHEREAS, pursuant to Elections Code Section 10418, if consolidated, the consolidated election shall be held and conducted, election boards appointed, voting precincts designated, candidates nominated, ballots printed, polls opened and closed, voter challenges determined, ballots counted and returned, returns canvassed, results declared, certificates of election issued, recounts conducted, election contests presented, and all other proceedings incidental to and connected with the election shall be regulated and done in accordance with the provisions of law regulating the statewide or special election, or the election held pursuant to Section 1302 or 1303, as applicable.

WHEREAS, the Resolution requesting the consolidation shall be adopted and filed at the same time as the adoption of the Ordinance, Resolution, or order calling the election; and WHEREAS, various District, County, State and other political subdivision elections may be or have been called to be held on November 5, 2024; and WHEREAS, the City Clerk is directed to forward without delay to the Board of Supervisors and to the County Election Department, each a certified copy of this Resolution; and
WHEREAS, the City Clerk shall certify the passage and adoption of this Resolution.

NOW, THEREFORE, BE IT RESOLVED AND ORDERED that the City Council of the City of Capitola hereby orders an election be called and consolidated with any and all elections also 123
Item 9 B.
called to be held on November 5, 2024, insofar as said elections are to be held in the same territory or in territory that is in part the same as the territory of the City of Capitola and requests the Board of Supervisors of the County of Santa Cruz to order such consolidation under Elections Code Sections 10401, 10403 and 10418.

NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED that the City Council of the City of Capitola acknowledges that the consolidated election will be held and conducted in the manner prescribed in Elections Code section 10418.

NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED that the City Council of the City of Capitola hereby requests the Board of Supervisors to permit the Santa Cruz County Elections Department to provide any and all services necessary for conducting the election and agrees to pay for said services; and
NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED that the City Clerk shall (i) publish a notice of elections, including all information required by Elections Code Section 12101; (ii) take necessary actions to ensure the placement of both of the below mentioned vacant City Council seats on the November 5, 2024 ballot; and (iii) coordinate with the County of Santa Cruz and take all necessary actions to oversee and certify the November 5, 2024 election process as required by the Elections Code; and NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED the notice of the time and place of holding the election is given and the City Clerk is authorized, instructed, and directed to give further or additional notice of the election, in time, form and manner as required by law; and
NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED that the City Clerk is hereby directed to file a certified copy of this resolution with the Board of Supervisors and the Registrar of Voters of the County of Santa Cruz. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used; and NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED in all particulars not recited in this resolution, the election shall be held and conducted as provided by State law for holding municipal elections; and
NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED that the Santa Cruz County Elections Department conduct the election for the following offices to be voted on at the November 5, 2024, election:

Seats Open Office Term
Two (2) Member of the City Council Four (4) Years
I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the City Council of the City of Capitola on the 27
th day of June, 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
____________________
Kristen Brown, Mayor
ATTEST:
_______________________
Julia Gautho, City Clerk
124
Item 9 B.

SF #4814-3098-1230 v1
07183-0005
4875-0076-1028 v2
RESOLUTION NO. ___

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPITOLA ORDERING THE

SUBMISSION TO THE QUALIFIED ELECTORS OF THE CITY OF CAPITOLA A MEASURE TO INCREASE THE CITY’S TRANSACTIONS AND USE TAX TO 0.5% AND EXTEND THE SUNSET DATE FOR THE CITY’S TRANSACTIONS AND USE TAX THROUGH DECEMBER 31, 2034 AT THE GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 5, 2024; REQUESTING CONSOLIDATION BY THE SANTA CRUZ COUNTY

BOARD OF SUPERVISORS OF THE ELECTION REGARDING SAID MEASURE WITH THE

STATEWIDE GENERAL ELECTION TO BE HELD ON THE SAME DATE AND THAT

SANTA CRUZ COUNTY PROVIDE ELECTION SERVICES WITH FULL REIMBURSEMENT BY THE CITY OF CAPITOLA; DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS; AND AUTHORIZING THE CITY COUNCIL TO SUBMIT

ARGUMENT SUPPORTING THE MEASURE AND RELEASING THE REBUTTAL ARGUMENT.

WHEREAS, on November 2, 2004, City of Capitola voters adopted Ordinance No. 880, imposing a one-quarter cent (0.25%) on the dollar transactions and use tax (“Sales Tax”) for general purposes, which would expire, or sunset, on June 30, 2010; and WHEREAS, on November 4, 2008, Capitola voters adopted Ordinance 935, which extended the sunset date of the Sales Tax to December 31, 2017; and
WHEREAS, on November 8, 2016, the Capitola voters adopted Ordinance no. 1008, which again extended the sunset date of the Sales Tax to December 31, 2027; and WHEREAS, proceeds generated by the Sales Tax are deposited into the City’s General Fund and support important City services such as police, fire, and paramedic services; 911 emergency response; emergency street repairs and maintenance; neighborhood park and recreation services; and WHEREAS, the City’s budget forecast indicates a fiscal shortfall due to the impending expiration of the Sales Tax, increased pension liabilities, and the steady erosion of retail sales tax when adjusted for inflation; and
WHEREAS, on April 11, 2024, the City Council directed staff to prepare a ballot measure replacing the existing one-quarter of one cent (0.25%) Sales Tax with a one-half of one cent (0.50%) Sales Tax and further extending authority to collect the Sales Tax for another 10 years; and WHEREAS, the City Council also desires, on its own motion, to submit to the voters at the November 5, 2024 Statewide Election a question relating to the imposition of a one-half of one cent (0.5%) Sales Tax for general purposes (“Sales Tax Measure”); and WHEREAS, the proposed, locally enacted Sales Tax Measure is projected to generate approximately $2.2 million in new General Fund revenue annually; and WHEREAS, the City will incorporate review of the uses of revenue generated by the Sales Tax Measure into the annual financial audit, conducted by independent certified public accountants, as well as a review by the Finance Advisory Committee and City Council; and WHEREAS, Revenue and Taxation Code Section 7285.9 authorizes the City Council for the City of Capitola to levy, increase or extend a general Sales Tax if the ordinance proposing the tax is 125
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approved by a two-thirds vote of all members of the City Council, and the tax is approved by a simple majority (50%+1) vote of the qualified voters of the City voting in an election on the issue; and WHEREAS, a general municipal election consolidated with the statewide primary election to be held on Tuesday, November 5, 2024, has been called and, pursuant to Elections Code Section 9222, the City Council desires to submit the proposed Sales Tax Measure to the qualified electors of the City of Capitola at the consolidated election.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Capitola as follows:

Section 1. Compliance with CEQA. The City Council finds and determines that this activity is not a “Project” as defined under Section 15378(b)(4) of the California Environmental Quality Act (CEQA) Guidelines because it is a financing decision without commitment to a specific project that may result in a potentially significant physical impact on the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the actions proposed are not subject to CEQA.

Section 2. Call for Election and Ballot Language. Pursuant to California Elections Code Section 9222, the City Council hereby calls an election at which it shall submit to the qualified voters of the City of Capitola a ballot measure designated by the letter of the Santa Cruz County Registrar of Voters proposing to amend the City of Capitola’s Municipal Code, to appear on the ballot in substantially the following form:

To protect essential city services including public safety and emergency services; repair potholes, maintain streets, sidewalks, bike lanes, beaches, the new wharf, and recreation programs for youth; improve traffic safety; and support local businesses, shall City-of-Capitola replace its quarter-percent sales tax, approved by voters in 2016, with a one-half percent sales tax, generating an estimated $ 2.2 million annually for general government use, for ten years, with independent audits, and all funds staying local? YES
NO
This question requires the approval of a majority vote of the City of Capitola voters voting on the Sales Tax Measure at the election to become effective. If the ordinance referenced in Section 3 is so approved by the City of Capitola voters, then the ordinance shall become effective ten (10) days following the date the vote is declared by the City Council.

Section 3. Text of Measure. The proposed Sales Tax Measure submitted to the voters is as attached in Exhibit A to this Resolution, which is incorporated herein by reference. The City Council hereby approves the proposed ordinance, in the form thereof, and its submission to the voters of the City at the November 5, 2024 election. The text of the measure shall be printed in the ballot materials and be available for public inspection in the City Clerk’s office and on the City’s website at www.cityofcapitola.org.

Section 4. Publication of Measure. The City Clerk is hereby directed to cause notice of the measure to be published in accordance with Section 12111 of the California Elections Code. 126
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Section 5. Request to Consolidate and Conduct Election and Canvass Returns. (a) Pursuant to California Elections Code Section 10400 et seq., the election for this measure shall be consolidated with the established election to be conducted on November 5, 2024. The City Council hereby requests that the Santa Cruz County Board of Supervisors consolidate the election called by this Resolution with the statewide election to be conducted on November 5, 2024 and order the election to be conducted by the Registrar of Voters. The City Council of the City of Capitola acknowledges that the consolidated election will be held and conducted in the manner prescribed in Elections Code section 10418. The City Council recognizes that additional cost will be incurred by the County of Santa Cruz by reason of the consolidation of the election with the Statewide election and agrees to reimburse the County of Santa Cruz for any costs that are not reimbursed by the State, and the City Council hereby authorizes the City Manager to pay the County of Santa Cruz for said services in full.

The City Clerk is directed to file a certified copy of this Resolution with the Board of Supervisors of Santa Cruz and the Registrar of Voters of Santa Cruz County on or before August 9, 2024. (b) The election on the Sales Tax Measure set forth in Section 3 shall be held and conducted, the voters canvassed and the returns made, and the results ascertained and determined as provided herein.

The election shall be held in accordance with the Elections Code of the State of California. (c) The election on the Sales Tax Measure set forth in Section 3 shall be held in Santa Cruz County in the City of Capitola on November 5, 2024, as required by law, and the Board of Supervisors of Santa Cruz County is authorized to canvass the returns of the election with respect to the votes cast in the City of Capitola and certify the results to the City Council of the City of Capitola. (d) At the next regular meeting of the City Council of the City of Capitola occurring after the returns of the election for the Sales Tax Measure set forth in Section 3 have been canvassed and the results have been certified to the City Council, or at a special meeting called for such purpose if required by law, the City Council shall cause to be entered in its minutes a statement of the results of the election.

Section 6. Submission of Ballot Arguments.
(a) In accordance with California Elections Code §9282, the City Council orders that the City Council is authorized to file a written argument in favor of the Ordinance, accompanied by the printed name(s) and signature(s) of the author(s) submitting it, and to make any revisions to the argument up to the deadline by which it must be filed with the City Clerk. (b) Arguments in favor and against the measure shall be filed with the City Clerk no later than 5:00 p.m. on August 16, 2024, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. (c) Arguments shall not exceed three hundred (300) words and shall be signed by not more than five (5) persons.
(d) The City Council hereby appoints a subcommittee of the City Council, comprised of Councilmembers and , and authorizes said subcommittee to prepare and file the written argument in favor of the proposed measure, on behalf of the City Council, no later than August 16, 2024. Once the argument is lodged with the City Clerk, the City Clerk shall notify other members of the City Council, who may then sign the argument on file, but may not make any revisions thereto.
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(d) Pursuant to California Elections Code Section 9285(b), the City Council is hereby adopting provisions for the filing of rebuttal arguments for this measure. Accordingly, when the City Clerk has selected the arguments for and against the measure, which will be printed and distributed to the voters, the City Clerk shall send copies of the argument in favor of the measure to the authors of the argument against it, and copies of the argument against it to the authors of the argument in favor. Rebuttal arguments shall not exceed 250 words and shall be filed no later than 5:00 p.m. on August 23, 2024, accompanied by the printed names and signatures of the persons submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers. Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument that it seeks to rebut. (e) As authorized by California Elections Code §9285, the City Council wishes to authorize the release of the City Council’s rebuttal argument to individual voters and thus hereby authorizes each individual member of the City Council to release rebuttal argument in writing to any other person or persons to prepare, submit, or sign the rebuttal argument.

Section 7. Impartial Analysis. In accordance with California Elections Code Section 9280, the City Council directs the City Clerk to transmit a copy of this Measure to the City Attorney, who shall prepare an impartial analysis showing the effect of the measure on the existing law and the operation of the measure. The City Attorney’s impartial analysis may not exceed 500 words and shall be filed with the City Clerk no later than 5:00 p.m. on August 16, 2024.

Section 8. Services of City Clerk. The City Clerk is hereby authorized and directed to take all steps necessary to place the measure on the ballot and to cause the ordinance or measure to be printed.

A copy of the measure shall be made available to any voter upon request.

Section 9. Severance. Should any section, subsection, clause or provision of this resolution for any reason be held to be invalid, then the remainder of the resolution shall be deemed valid, it being expressly declared that this resolution, and each and every section, subsection, clause and phrase hereof would have been prepared, proposed, approved, adopted and/or ratified even if any other section, subsection, sentence, clause or phrase of this resolution were declared invalid.

I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the City Council of the City of Capitola on the 27th day of June, 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
____________________
Kristen Brown, Mayor
ATTEST:
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_______________________
Julia Gautho, City Clerk

EXHIBIT A
ORDINANCE NO. __
AN ORDINANCE OF THE CITY OF CAPITOLA AMENDING SECTIONS 3.10.050 AND 3.10.070 OF THE CAPITOLA MUNICIPAL CODE AND AMENDING SECTION 16 OF ORDINANCE 880 TO INCREASE THE TRANSACTION AND USE TAX TO 0.5% OF ONE CENT AND

EXTENDING THE TERMINATION DATE OF THE TRANSACTIONS AND USE TAX THROUGH DECEMBER 31, 2034.

WHEREAS, on November 2, 2004, City of Capitola voters adopted Ordinance No. 880, imposing a one-quarter cent (0.25%) on the dollar transactions and use tax (“Sales Tax”) for general purposes, which would expire, or sunset, on June 30, 2010; and WHEREAS, on November 4, 2008, Capitola voters adopted Ordinance No. 935, which extended the sunset date of the Sales Tax to December 31, 2017; and WHEREAS, on November 8, 2016, the Capitola voters adopted Ordinance No. 1008, which again extended the sunset date of the Sales Tax to December 31, 2027; and WHEREAS, proceeds generated by the Sales Tax are deposited into the City’s General Fund and support important City services such as police, fire, and paramedic services; 911 emergency response; emergency street repairs and maintenance; neighborhood park and recreation services; and WHEREAS, the City’s budget forecast indicates a fiscal shortfall due to the impending expiration of the Sales Tax, increased pension liabilities, and the steady erosion of retail sales tax when adjusted for inflation; and
WHEREAS, as a result of this budget forecast, on April 11, 2024, the City Council directed staff to prepare a ballot measure replacing the existing one-quarter of one cent (0.25%) Sales Tax with a onehalf of one cent (0.50%) Sales Tax, and further extending authority to collect the Sales Tax for another 10 years; and
WHEREAS, the City’s budget forecast anticipates budget shortfalls, which would impact the City’s ability to perform its functions and maintain the quality of life in the City of Capitola; and WHEREAS, additional funding will help maintain the City of Capitola’s financial viability in coming years and improve the city’s local infrastructure, including repairing, paving and maintaining city streets, and maintaining city beaches, including the new Wharf infrastructure and services related thereto; and
WHEREAS, Revenue and Taxation Code Section 7285.9 authorizes the City Council for the City of Capitola to levy, increase or extend a general transactions and use tax if the ordinance proposing the tax is approved by a two-thirds vote of all members of the City Council, and the tax is approved by a simple majority (50%+1) vote of the qualified voters of the City voting in an election on the issue; and 129
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WHEREAS, the City desires to levy an additional one-quarter of one percent (0.25%) Sales Tax for general purposes for a total Sales Tax rate of one-half of one percent (0.50%) for an additional 10 years through December 31, 2034; and
WHEREAS, the amendments proposed by this Measure do not purport to amend the provisions of Capitola Municipal Code Chapter 3.11; and
WHEREAS, if the voters do not adopt the additional 0.25% tax rate, for a total of 0.50%, the City wishes to retain the current 0.25% tax rate, until its sunset date of December 31, 2027.

NOW, THEREFORE, THE PEOPLE OF THE CITY OF CAPITOLA DO ORDAIN AS FOLLOWS:

Section 1. Findings
The People of the City of Capitola find that the above referenced recitals are true, correct, and material to the adoption of this Ordinance.

Section 2. Amend Section 3.10.050 – “Transactions tax rate” of the Capitola Municipal Code. Section 3.10.050 of the Capitola Municipal Code is amended as indicated below, with amended text shown in underlined text, and deleted text shown in strikeout text.

Section 3.10.050 Transactions tax rate.

For the privilege of selling tangible personal property at retail, a tax is imposed upon all retailers in the incorporated territory of the city at the rate of one quarter one-half of one percent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the territory on and after the operative date of the ordinance codified in this chapter.

Section 3. Amend Section 3.10.070 – “Use tax rate” of the Capitola Municipal Code.

Section 3.10.070 of the Capitola Municipal Code is amended as indicated below, with amended text shown in underlined text, and deleted text shown in strikeout text.

Section 3.10.070 Use tax rate.

An excise tax is imposed on the storage, use or other consumption in the city of tangible personal property purchased from any retailer on and after the operative date of the ordinance codified in this chapter for storage, use or other consumption in the territory at the rate of one quarter onehalf of one percent of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.

Section 4. Amendment of Ordinance 880 (uncodified). Section 16 of Ordinance 880, as amended by Ordinance Nos. 935 and 1008, is hereby amended to read as follows:
“Section 16. Termination Date. The authority to levy the tax imposed by this ordinance shall expire December 31, 2034.”
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Section 5. Operative Date.
"Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance.

Section 6. Voter Approval.

This ordinance shall be submitted to the voters at an election to be held on November 5, 2024.

Upon approval by a majority of the voters of the City voting on this ordinance, a Transactions and Use Tax shall be authorized.

Section 7. Severability.

If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.

Section 8. Effective Date.

This Ordinance shall take effect ten (10) days after the certification by the City Council of the election returns indicating passage of the Ordinance by a majority of voters casting votes in the election.

Section 9. Codification. Sections 2 and 3 of this ordinance shall be codified in the Capitola Municipal Code.

Section 10. CEQA. For purposes of the California Environmental Quality Act (Public Resources Code Section 21000, et seq.), a “project” is defined in State CEQA Guidelines Section 15378 (a) as “the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment”. The people of the Capitola hereby find that the proposed Ordinance will not result in any change in the environment and thus is not a project subject to the requirements of CEQA. Additionally, the proposed Ordinance involves the creation of a government funding mechanism which does not involve any commitment to any specific project which may result in a potentially significant impact on the environment and thus the proposed Ordinance is not a project subject to the requirements of CEQA pursuant to CEQA Guidelines Section 15378 (b)(4). Further, even if the adoption of this Ordinance was deemed to be a project subject to CEQA, the people of the City of Watsonville find the proposed Ordinance is exempt from CEQA under the common sense exemption set forth in Section 15061(b)(3), which provides that CEQA only applies to projects which have the potential for causing a significant effect on the environment, and thus where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

APPROVED (or DENIED) by the following vote of the People of the City of Capitola on November ___, 2024:
_______ YES ______NO ______ TOTAL VOTES
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RESULTS DECLARED by the City Council of the City of Capitola on ______________, 2024.

SO ORDERED ATTEST
_______________________________ ________________________________ Kristen Brown, Mayor Julia Gautho, City Clerk
Dated:___________________________
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1 NOV. 2024

GENERAL

ELECTION
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2 OUTLINE

1. General Election
Resolution

2. Proposed Ballot
Measure Resolution
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3 ELECTION

REQUIREMENTS
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4 November 5, 2024
• Chapter 1.30 of Capitola
Municipal Code
• Two City Council seats
• Four-year terms
Resolution
• Officially calls election
• Consolidates with County
• Requesting the County to
conduct the election
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5 HOW TO RUN
• City Clerk works with City Council
candidates
• Information provided online, in
pamphlet, at Candidate Info Night
• Nomination Period: July 15 –
August 9*
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6 RECOMMENDED
ACTION

1. Adopt a resolution ordering the 2024 General
Municipal Election, requesting Santa Cruz County
Department of Elections conduct the election,
and requesting consolidation of the General
Municipal Election in Capitola on Tuesday,
November 5, 2024.
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7 PROPOSED

LOCAL SALES

TAX MEASURE
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8 BACKGROUND
• Nov. 2023: City Council authorized agreement
with EMC Research to conduct polling
• March 2024: Presented polling results, identified
voter priorities: • Public safety response
• Maintenance of roads, sidewalks, bike lanes
• Maintaining beach and new Wharf • Recreation programming for youth and supporting local businesses
• Voter support for renewal of existing Measure F
tax above threshold
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9 OTHER BALLOT MEASURES
• Regional Clean Water & Wildfire Protection
• $87/year per parcel. Until ended by voters
• Central Fire General Obligation Bond
• Bond Measure: ~$31 per $100,0000. 30 years. • Soquel Unified Elementary School District Bond • Bond Measure: $30 per $100,000. 30 years.
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10 WHY CONSIDER A SALES TAX?
Projected fiscal
challenges
Measure F will
expire in 2027
Previous support
for tax measures
high
Less than 1/3 of
all sales tax paid
by City residents
Sales tax is a way
to balance tax
between visitors
and residents
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11 FISCAL PROJECTION
18,000,000
20,000,000
22,000,000
24,000,000
26,000,000
Ten Year Projection
Revenue Expenditures
$2 Million
Gap
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12 S U B T I T L E H E R E
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13 HOW YOUR TAXES ARE SHARED
• 7.5% of property taxes paid by Capitola
residents go to the City’s budget. Rest
goes to State, County, and outside
agencies
• 16.5% of sales tax paid in Capitola goes
to City
• 0% of income tax
Total Taxes
• Estimated $180.1 million of total taxes
generated within the City
• Capitola only receives approximately

7.4%
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14 PROPERTY TAX BREAKDOWN:
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15 As of July 1, sales tax rates in County will be:
• Santa Cruz: 9.75
• Watsonville: 9.75
• Scotts Valley: 9.75
• Unincorporated SC County: 9.50
• Capitola: 9.00

LOCAL SALES TAX
RATES
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16 MEASURE F – STATUS REPORT
As promised, Measure F paid for:
• Wharf
• Flume
• Jetty
• Public Safety
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17 Because Measure F
projects were completed
early, replace Measure F
with half-cent tax
measure
• Estimated $2.2 million
in revenue
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18 POTENTIAL

KEY PROJECTS

1. Up to $1,000,000 to leverage
$10+ million in Federal Funding
to stabilize Cliff Drive and
maintain the roadway in the face
of continued coastal erosion

2. Funds to implement elements of
Bay Avenue corridor study

3. Pavement management
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19 REVENUE OVERSIGHT
0 2
4 6
8 10 Jan Feb Mar Apr May JunJul Aug Sep Oct Nov Dec
Revenue and expenditures will be
reviewed by:
• Annual Audit (conducted by
independent auditors)
• Annually reviewed by FAC
• Annually reviewed by City Council
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20 PROPOSED BALLOT LANGUAGE
To protect essential city services including public safety and emergency services; repair potholes, maintain streets, sidewalks, bike lanes, beaches, the new wharf, and recreation programs for youth; improve traffic safety; and support local businesses, shall City-of-Capitola replace its quarter-percent sales tax, approved by voters in 2016, with a one-half percent sales tax, generating an estimated $2.2 million annually for general government use, for ten years, with independent audits, and all funds staying local? 152
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21 RECOMMENDED ACTION
Adopt a resolution submitting a ballot measure to Capitola voters to increase the City’s transactions and use tax through December 31, 2034 at the General Municipal Election to be held on Tuesday, November 5, 2024, requesting consolidation by the Santa Cruz County Board of Supervisors of the election
regarding said measure with the Statewide General Election to be held on the same date and that Santa Cruz County provide election services with full reimbursement by the City of Capitola, directing the City Attorney to prepare an impartial analysis, authorizing the City Council to appoint two City Council Members to a subcommittee to submit an argument supporting the Measure, and releasing the rebuttal argument.
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Item 9 B.
22 COMPONENTS OF

RECOMMENDATION

1. Submit ballot measure to Capitola voters to increase City’s sales tax through 2034 on November 2024
election

2. Consolidate measure with General Election

3. Pay County for our share of election

4. Direct City Attorney to prepare an impartial analysis

5. Appoint two City Council Members to a subcommittee to submit argument supporting Measure

6. Allow community members opportunity to file
potential rebuttal argument
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Capitola City Council
Agenda Report
Meeting: June 23, 2024
From: Police Department
Subject: VDUBlicious Car Show
Recommended Action: Approve or deny a request for a new Major Special Event Permit from the VDUBlicious Car Club requesting to host a car show in the Capitola Village on August 10, 2024, from 7:00 am to 5:00 pm.

Background: In March 2024, the Capitola Police Department was approached by the VDUBlicious Car Club to host a one-day car show in the Capitola Village to display 200 vintage Volkswagens, as well as host three local non-profits (Second Harvest Food Bank of Santa Cruz County, Tim Brauch Foundation, and the Veterans Surf Alliance). This group held their first annual car show on Santa Cruz Wharf. The proposed event will be open to the public.

Special events are divided into two categories: major special events and minor special events. Major special events are those with more than 200 attendees or notable impacts on City services or a neighborhood. Minor special events are activities with fewer than 200 people and limited impacts. Minor special events can be approved by the City Manager, while all applications for new general special events must be presented to the City Council for review and consideration.

The City Council has the discretion to request a review of any special event if there is an identifiable concern related to past events.

This report and presentation aim to review the request made by the event organizer, Chris Kremer, identify any issues, and determine if any additional review should be required. The City Council may direct staff to issue a new special event permit to the event organizers if no concerns are identified.

Discussion: This event would require the posting of “no parking” signs on August 7, 2024, at 7:00 am for the entire Esplanade and 200 Capitola Avenue to 200 San Jose Avenue. The Swenson parking lot, located at 120 Monterey Avenue, will not be accessible from 7:00 am to 5:00 pm on August 10, 2024.

The event coordinator has made contact with the Swenson management group and gained their approval to limit public access to their lot. The event organizers also coordinated with the Capitola Mercantile to close their lot to the public for the duration of the event.

The following roads will be closed to vehicular traffic on August 10, 2024, from 6:00 am to 5:00 pm.  Stockton Avenue/Esplanade
 Monterey Avenue/Capitola Avenue
 San Jose Avenue/Capitola Avenue
The event organizer would manage the parking and access for the Vintage Volkswagen club members and the Capitola Police Department would assist with the placement of the bollards for pedestrian safety.

The event benefit organizer has requested to erect four 10x10 canopies within the event and the use of the bandstand for live music and announcements. The City currently has nine Major Special Events and 26 Minor Events planned for this calendar year. Summer weekends tend to be heavily congested time periods in the Capitola Village. The Police Department and Public Works staffing are impacted by all major events to support public safety.

Fiscal Impact: Estimated parking revenue loss for the Capitola Esplanade, including San Jose Avenue on August 7, 2024, from 0700 am to 5:00 pm. is approximately $4,000. 155
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Attachments:

1. Major Special Event Permit Application

2. Amplified Sound Permit Application

3. Map of Proposed Vehicle Staging and Road Closures
Report Prepared By: Sarah Ryan, Administrative Captain
Reviewed By: Julia Gautho, City Clerk, Andy Dally, Chief, Jim Malberg, Finance Director Approved By: Jamie Goldstein, City Manager
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422 CAPITOLA AVENUE
CAPITOLA, CALIFORNIA 95010
TELEPHONE (831) 475-4242
FAX (831) 479-8881
Applicant Information:

Event Date: Event Date:

MAJOR SPECIAL EVENT PERMIT APPLICATION
*Application fee of $68 must be submitted with this completed application* Chris kremer
1166 Hacienda Dr Gilroy Ca 95020
4088438227 [email protected]
VDUBlicious
1166 Hacienda Dt Gilroy ca 95020
4088438227 88-4085369
VDUBlicious.com
✔ car meet
VDUBs inthe Village
Aug 10th
7am 9:30am
9:30am 3pm
3pm 4pm
capitola village 200
Vintage Volkswagen car meet. 200 Volkswagens on display along with 3 local non profits in attendance Second Harvest food bank of Santa Cruz County, Tim Brauch Foundation, the Veterans Surf Alliance Chris kremer
4088438227 [email protected]
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1. ❑ Yes ❑ No Has this event been held before? Number of years?

2. ❑ Yes ❑ No Is this a charitable fundraiser? For what cause?

3. ❑ Yes ❑ No Will participant registration fees be charged? Registration fee amount?

4. ❑ Yes ❑ No Will you be selling merchandise? Type of merchandise?

5. ❑ Yes ❑ No Will alcohol be sold or served? ❑ Beer ❑ Wine ❑ Alcohol Note: ABC Permit will be required. Applicant will coordinate with Capitola Police Department.

6. ❑ Yes ❑ No Will food be sold or served? ❑ Pre-packaged ❑ Food Trucks ❑ Other Note: Food service may need to be approved by the County Health Department.

7. ❑ Yes ❑ No Will you be cooking onsite? ❑ Wood/Charcoal BBQ ❑ Liquid Fuel Device

8. ❑ Yes ❑ No Will any generators be used? Location:

9. ❑ Yes ❑ No Will banners/signs be used?
Note: Applicant must complete an Over-the-Street Banner Application.

10. ❑ Yes ❑ No Will canopies be used? Quantity? Type?

11. ❑ Yes ❑ No Will you be setting up a stage? Details (W x L x H):

12. ❑ Yes ❑ No Will you be using the Capitola Bandstand? Note: Describe use information on page # 4. Separate fees to be paid by applicant.

17. ❑ Yes ❑ No Will you be using private security?
Security Company Name:

19. ❑ Yes ❑ No Do you have a garbage/recycling plan? Describe garbage/recycling plan on page # 5. ✔ yes but not in capitola
✔ we work with 3 non profits
✔
✔
✔
✔
✔
✔
✔
✔ 4 10x10 tents booth
✔
✔
✔ 200
✔
✔
✔
✔
✔
✔
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Amplified Sound Information:

1. ❑ Yes ❑ No Will sound amplification be used?
Note: Applicant must complete an Amplified Sound Permit Application. Separate fee to be paid by applicant.

Type of Music:

Will sound checks be conducted prior to the event? ❑ Yes ❑ No If yes, date(s) and time(s):

3. ❑ Yes ❑ No Will fireworks, rockets or other pyrotechnics be used? Pyrotechnics Company Name:

Pyrotechnics Company Address:

Capitola Police Department
Attn: Esmeralda Gonzalez
422 Capitola Avenue
Capitola, CA 95010
(831) 475-4242
✔
✔
✔
possibly Santa Cruda and Dub Souljah
reggae/ other
✔
✔
Chris kremer
04/29/2024
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Bandstand Use Information:

Reserved Parking Information:

Street Closure Information:

Police Needs:

We are working to have local bands play music during the event. So far we have reached out to Santa Cruda and Dub Souljah. Both bands are very excited to have an opportunity to play at the event We would like to reserve the 200 or so spots available in the village area The esplanade at the corner of esplanade and Stockton ave up Monterey ave to the intersection at capitola ave
none needed
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Lifeguard/First Aid Needs:

Toilet Facilities Plan:

Garbage/Recycling Plan:

Other Pertinent Information Not Listed on Application:
none needed
none needed
none needed
We are a Northern California non-profit organization and we are Volkswagen car enthusiasts.

Last year on October 7th we held our first annual car show on the Santa Cruz Wharf. This car show was a great success and we are hoping to bring the same enthusiasm to Capitola Village. The show would be open to the public to enjoy vintage Volkswagen, also we encourage everyone to support local businesses.

We plan to host our three non-profits, The Veterans Surf Alliance, Santa Cruz Second Harvest Food Bank and The Tim Brauch Foundation. All donations collected will support their efforts throughout Santa Cruz County.

Our Mission Statement is -
Building friendships and memories through past, present and future generations by bringing communities together through the love of the Volkswagen culture.

We would like to continue to make this an annual event. 161
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422 CAPITOLA AVENUE
CAPITOLA, CALIFORNIA 95010
TELEPHONE (831) 475-4242
FAX (831) 479-8881
Applicant Information:

Company Name:_______________________________________________________________________ Address: ________________________________ City________________ State ______ Zip_________ Phone #: ___________________________________Nonprofit ID:_______________________________ Website: _____________________________________________________________________________ Name of Onsite Event Coordinator During Event: ____________________________________________ Phone #: ___________________________________Email: ____________________________________ Event Information:

Event Name:_____________________________________ Type of Event: ________________________ Date(s) of Event:__________________________________ Hours of Event: _______________________ Event Location:_______________________________________ Anticipated Attendance: ___________ Type of Amplified Sound:
❑ PA Speaker for Announcement Only ❑ PA Speaker for Announcements and Music ❑ Professional Sound System for Music ❑ Professional Sound System for Live Music/Band Live Music/Band Name: _________________________________________________________________ Type of Music: ________________________________________________________________________ Signature of Applicant:______________________________________ Date: _____________________ Approved By: ______________________________ , Chief of Police Date: _____________________ Approved By: ______________________________ , CCD Director Date: _____________________

AMPLIFIED SOUND PERMIT APPLICATION
*Application fee of $32 must be submitted with this completed application* Chris Kremer
1166 Hacienda Dr Gilroy Ca 95020
4088438227 [email protected]
VDUBlicious
1166 Hacienda Dr Gilroy Ca 95020
4088438227 88-4085369
http://www.vdublicious.com
Chris Kremer
4088438227 [email protected]
Vdubs in the Village Vintage Volkswagen car meet
August 10th 2024 7am - 4pm
capitola village area 200
✔
possibly Santa Cruda and Dub Souljah
reggae
4/29/2024
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MAJOR SPECIAL EVENT
APPLICATIONVDUBLICIOUS
Sarah Ryan, Police
Administrative Captain
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Background
• In March 2024, council adopted an ordinance amending Special Event application and approval process.
• Police department received an application in March from Vdubilicious Car Club for a special event in Village on August 10, 2024. • Event qualifies as a “major event” per our updated Special Event threshold.

Major SE > 200 attendees and impacts on city services
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Event Application
• August 10, 2024, from 6:00 AM to 5:00 PM
• Following roads proposed to be closed
 Stockton Avenue/Esplanade
 Monterey Avenue/Capitola Avenue
 San Jose Avenue/Capitola Avenue
 Use of Bandstand for amplified music and event announcements 166
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Impacts to the City
• Police Department staffing impacts
• Public Works staffing impacts
• Loss of parking revenue for the village
• Parking impacts to village residents and employees
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“No Parking” Sign Postage
Signs must be posted by 0500 hours on Wednesday, August 7th at 6:00 AM “No Parking” Sign Hours Hourly Rate Total
Posting
Parking Enforcement 4 $59.00 $236.00
Officer
Parking Enforcement 4 $59.00 $236.00
Officer
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Patrol Staffing 5:00 AM to
5:00 PM
Event Staff Hours Hourly Rate Total
Sergeant 12 $129.00 $1,548.00
Police Officer 1 12 $106.00 $1,272.00
Police Officer 2 12 $106.00 $1272.00
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9 Major Special Events
• February Surfer’s Path 10k/5k
• Capitola Art & Wine Festival
• May Surfer’s Path Half Marathon
• Capitola Beach Festival
• Capitola Custom Classic Car Show
• Women on Waves
• Wharf to Wharf
• October Surfer’s Path Wahine 10k/6k
• Oktoberfest
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26 Minor Special Events
• Village Sip and Stroll (3 total)
• California Coast Classic Ride
• Operation Surf
• Veteran Surf Alliance Paddle Out
• Fill the Boot for Muscular
Dystrophy
• Halloween Parade
• Skate-Tola
• Surfing Santa
• Walk for Angelman’s Syndrome
• Food Truck Fridays Event at
Monterey Park
• First Responder’s Surf Contest
• AIDS/Lifecycle Bicycle Ride
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Recommended Action
• Approve or deny a request for a new Major Special Event permit from the VDublicious Car Club requesting to host a car show in the Capitola Village on August 10, 2024 from 7:00 am to 5:00 pm.
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Capitola City Council
Agenda Report
Meeting: June 27, 2024
From: Public Works Department
Subject: Cliff Drive Resiliency Project
Recommended Action: Receive a progress report on the Cliff Drive Resiliency Project and provide feedback on design alternatives.

Background: Cliff Drive serves as a crucial transportation link between Capitola Village and Santa Cruz County. The road runs along steep bluffs that overlook the Pacific Ocean, making it exceptionally vulnerable to erosion. The scenic nature of Cliff Drive not only supports local transportation but also enhances tourism and community access to the coast.

Cliff Drive’s history is rooted in the development of the Santa Cruz Railroad in 1876 and subsequent infrastructure improvements, such as the construction of the Stockton Bridge in 1934. Erosion concerns have been noted since the 1960s, leading to initial protective measures like rock slope protection. Despite these efforts, erosion remains a persistent challenge, with significant events occurring in the 1990s and most recently during the winter of 2022-2023, which severely undermined existing protections like the soil nail wall installed in 1997.

City staff secured Federal Emergency Relief Funding to repair Cliff Drive's damaged bluff within the City's right of way. The project must be ready for a construction funding request by September 2025.

Additionally, the City received $450,000 from the California Coastal Commission for an alternatives analysis. On October 12, 2023, the City contracted CSW/ST2 for design services for the Cliff Drive Resiliency Project. Since then, staff has worked closely with CSW/ST2 to develop the project, guided by the following principles.

Mission Statement: Cliff Drive improvements will serve the mobility needs of all users equitably, maintain access for future generations despite the impact of sea level rise and increasing storm intensities, seek to reduce traffic impacts to the Jewel Box neighborhood, and safeguard environmental resources.

Goals:

1. Provide safe access for all users to and from the coastline.

2. Conform to regional transportation goals.

3. Protect the roadway from erosion under various sea level rise scenarios.

4. Ensure construction feasibility with minimal temporary impact.

5. Protect environmental and cultural resources.

6. Optimize life-cycle cost.

7. Simplify permitting complexity
Staff is in the process of finalizing a feasibility report. The purpose of this staff report is to provide the City Council with a detailed overview of the Cliff Drive Resiliency Project, confirm the approach to various project options, and seek input to move forward with the next steps in the evaluation process to determine the preferred option.

Discussion: The feasibility analysis reviews existing conditions and the basis of design to develop project strategies and identify alternatives.

Existing and Environmental Conditions:
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 Geological Composition: Erosion rates vary from 0.3 to 1.3 feet per year.  Traffic and Infrastructure: Cliff Drive is a two-lane street with asphalt paving, including Class 2 bicycle lanes.
 Hydrological Factors: The area is classified as being within a Tsunami Hazard Area. Projected sea level rise estimates indicate potential elevations of 3.1 to 6.6 feet by 2100, impacting bluff erosion rates and infrastructure vulnerability.
 Sand Supply: Sand supply dynamics are influenced by wave action, local erosion rates, and sediment contributions from rivers and dredging activities.  Cultural and Biological Resources: Environmental assessments are ongoing to identify and mitigate impacts on local flora, fauna, and cultural heritage, ensuring compliance with CEQA and the National Historic Preservation Act.

Basis of Design:
 Roadway Standards: Enhancing Cliff Drive to align with “Complete Streets” principles involves developing Class IV protected bicycle lanes, which require a width of 38 feet. Additionally, there is consideration for a multi-use walkway on the bluff side of the roadway that serves both pedestrians and bicyclists, accommodating diverse transportation needs.  Expected Life of Facility: Given Cliff Drive's vulnerability to bluff erosion exacerbated by sea level rise, ensuring a service life of 100 years is crucial for maintaining continuous transportation access. Phased adaptation strategies based on triggers such as time, sea level rise, or bluff recession are recommended.

Project Strategies and Alternatives Considered:
 Strategy 1: Managed Retreat
o Alternative 1: Do Nothing: No action to mitigate erosion and bluff instability. Continued bluff erosion will lead to episodic failures and potential closure of Cliff Drive, requiring traffic to be redirected to inland routes.
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 Strategy 2: Adapting to Sea Level Rise
o Alternative 2: Adapt: Short-term adaptive measures with provisions for future structural changes. Additional rock slope protection, repair of sea caves with concrete facing, and potential future installation of a secant pile structure to create a barrier. A long-term alternative could involve reconfiguration of Cliff Drive to a one-way westbound street.  Strategy 3: Protecting the Bluff
o Alternative 3: Protect: Maintaining Cliff Drive in its current location, enhancing it as a complete street. Installation of a full-faced soil nail wall, rock slope protection, development of a Class 1 multi-use trail, and conversion of existing parking to parallel parking with accessible stalls. Creation of new overlooks and improved access points. 175
Item 9 D.

A decision matrix has been used to objectively evaluate each alternative based on criteria such as safety, regional transportation goals, erosion protection, construction feasibility, environmental impact, cost, and permitting complexity.

Although the analysis suggests Alternative 3 (Protect) as a strong candidate, the final decision will be made after completing further analysis and stakeholder consultation.

Community and Stakeholder Outreach:
 On Tuesday, February 27, 2024, the City held a community meeting at the Capitola Community Center to review the Cliff Drive Resiliency project based on the above preliminary information.

Roughly 20 residents attended, discussing potential solutions such as protecting the bluff, closing Cliff Drive, and hybrid solutions converting it to a one-way street.  Feedback Summary:
o Strong preference for retaining two-way automobile travel. o Emphasis on quickly advancing the process.
o Concerns about shifting traffic into adjacent neighborhoods. 176
Item 9 D.
o Interest in improving bicycle and pedestrian infrastructure due to expected increases in trips.

Next Steps:

The immediate next steps consist of finalizing the evaluation of each alternative using the decision matrix analysis and stakeholder feedback. This comprehensive analysis will help us determine the preferred option for the Cliff Drive Resiliency Project. Staff will continue with public outreach efforts to solicit input from residents, businesses, and other stakeholders, ensuring that the final decision reflects the community's needs. During the development of the preferred option, staff will further develop other design elements such as long-term resilience plans for Hoopers stairs and informal evacuation paths.

Future Tasks – September 2024 to September 2025:
 LCP Amendment Related to Coastal Access: Update the Local Coastal Program (LCP) to align with proposed changes to coastal access and infrastructure, ensuring compliance with local regulations.
 Finalize Preliminary Engineering for the Preferred Option.  CEQA IS/MND.
 Permitting.
 Final Design: To be completed within the required timeframe to request FHWA construction funding.

Fiscal Impact: The City was awarded federal ER funding amounting to $839,408 for professional engineering and environmental services, of which 88.53% ($743,127) will be reimbursed by FHWA/Caltrans LA, and 11.47% ($96,281) will be supported by a City match. The City match must be non-federal funding, which can be covered by the $450,000 grant from the Coastal Commission, resulting in a total project budget of $1.2 million.

The current available funding for the capital construction of this project is approximately $8.4 million, which will also be reimbursed at a rate of 88.53% with federal funding, requiring a City match of approximately $96,000.

Staff continues to seek additional funding for the project in the form of grants and other sources.

Report Prepared By: Jessica Kahn, Public Works Director Reviewed By: Julia Gautho, City Clerk; Samantha Zutler, City Attorney Approved By: Jamie Goldstein, City Manager
177
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Cliff Drive Resiliency Planning
June 27, 2024
178
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Presentation Overview
Background
Summary of Existing Conditions
Summary of Outreach
Options Under Consideration
Next Steps
1 2
3 4
5 179
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Background
180
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181
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Background
• Design
• FHWA/Caltrans LA reimbursement: $743,000
• Coastal Commission grant: $450,000
• Construction Funding
• FHWA/Caltrans LA reimbursement: $8M
• Required Match $960,000
• Seeking Additional Funding
Federal ER funding awarded
• Professional Services Agreement with CSW/ST2
October 2023
• Existing conditions, opportunities, and
constraints
• Community and stakeholder outreach
• Project alternatives
Phase 1 - Alternatives
182
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Cliff Drive Study Area
183
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Summary of Existing Conditions
184
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Existing Conditions
185
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Existing Conditions
186
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Existing Conditions
187
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Existing Conditions
188
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Existing Conditions
Bluff stabilization efforts
• Early 1960s RSP installed
• 1997 soil nail wall installed
1 9 0 5
1 9 9 7
1 9 7 2
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Existing Conditions
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Existing Conditions
Bluff erosion rate is about 6
inches per year.
191
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Existing Conditions
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Existing Conditions
193
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Summary of Outreach
194
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February 2024 Outreach
195
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February 2024 Outreach
196
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February 2024 Outreach
197
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On Going Outreach
QR Code
Information: www.cliffdriveresiliency.org
Contact: [email protected]
198
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Options Under Consideration
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Purpose & Need
Mission Statement
Cliff Drive improvements will serve the mobility needs of all users equitably, maintain access for future generations despite the impact of sea level rise and increasing storm intensities, seek to reduce traffic impacts to the Jewel Box neighborhood, and safeguard environmental resources.

Project Goals

1. Provide safe access for all users to and from coastline.

2. Conforms to regional transportation goals for vehicles, bicyclists, pedestrians, and emergency services.

3. Protects roadway from erosion in existing, 2080, and 2130 sea level rise scenarios.

4. Construction feasibility as well as temporary impact to the community to construct improvement.

5. Protects both environmental and cultural resources.

6. Life-cycle cost.

7. Complexity associated permitting.
200
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Complete Streets Assessment
Class IV Class I
201
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Options
202
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Option 1 – Do Nothing
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Option 1 – Do Nothing
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Option 2 – Adapt
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Option 2 – Adapt
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Option 2 - Adapt
Cliff Drive operates in
one-way direction.
1 2
1 2
3 3
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Option 2 – Adapt
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Option 3 – Protect

1. Provide vehicle travel lanes in the east
and westbound directions.

2. Develop a Class 1 pathway eastbound
towards the Village.

3. Maintain westbound Class 2 bike lanes.

4. Provide parallel parking.

5. Enhance the overlook.
209
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Option 3 - Protect
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Option 3 - Protect
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Additional Design
Considerations
• Vertical Access
• Surfer Safety
212
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Cliff Drive Comparison of Options
Service Life
Capital Cost
Life Cycle Cost
Coastal Access
Traffic Impact
Option 1 Do Nothing Option 2 Adapt Option 3 Protect Option Marginal/ Negligible
$0
No change or loss
No change
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Next Steps
214
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Planning Schedule
Immediate Next Steps – July and
August 2024
• Complete analysis of options, including
detailing a preferred option.
• Community and Stakeholder Outreach
including pop up event and online survey.

Future Tasks - September 2024 to
September 2025
• LCP Amendment related to coastal access.
• Finalize preliminary engineering for the
preferred option.
• CEQA IS/ MND
• Permitting
• Final Design
215
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Service Life
Capital Cost
Life Cycle Cost
Coastal Access
Traffic Impact
Option 1 Do Nothing Option 2 Adapt Option 3 Protect Option Marginal/ Negligible
$0
No change or loss
No change
Cliff Drive Comparison of Options
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Capitola City Council
Agenda Report
Meeting: June 27, 2024
From: City Manager Department
Subject: Memorandum of Understanding with the Mid-Management Employee Group and Management and City Manager Compensation Plans Recommended Action: Authorize the City Manager to: 1) Execute a successor agreement to the existing Memorandum of Understanding with negotiated changes for the Mid-Management Employee Group, subject to technical corrections and 2) Execute a successor agreement to the existing Management Compensation Plan; and Authorize the Mayor to execute the Eighth Amendment to the City Manager Employment Agreement.

Background: The City of Capitola’s employees are divided into five bargaining groups, with associated agreements. The City’s Employee Memoranda of Understandings (MOUs) expire at the end of June 2024. As required by state law, the City has participated in good faith negotiations with the bargaining groups on working conditions, salary, and benefit changes.

Discussion: The City of Capitola and all employee bargaining groups began negotiation meetings in March 2024. The City Council gave the City’s negotiator fiscal authority based on the City’s ten-year budget forecast, the results of a compensation study, and known concerns regarding healthcare plan costs. Each bargaining group has negotiated for items they prioritize.

On June 14, 2024, the Mid-Management Employee Group signed a tentative agreement. A red-lined MOU with negotiated changes is included as an attachment to this report.

In addition to City bargaining groups, the City Council directed staff to modify the Department Head Compensation and Benefits Plan and the City Manager Employment Agreement within the same financial authority as given for the other groups. The proposed Department Head Compensation and Benefits Plan is attached, as is 2021 Compensation Plan for comparison.

The City Council generously approved $2,000 wellness bonuses for the Confidential Bargaining Unit, of which the Assistant to the City Manager is a member, and proposed the same wellness bonus for the City Manager. The Assistant to the City Manager and the City Manager have elected to allocate this $4,000 in funding to Citywide employee engagement.

Fiscal Impact: Fiscal impacts resulting from the Mid-Management Employees MOU, the Management Compensation Plan, and the City Manager Employment Agreement have been incorporated into the FY 2024-25 Budget. In 2024-25, the estimated fiscal impact of the negotiated changes to the MidManagement MOU is $61,000. This includes $25,500 in Cost of Living Adjustments (COLAs), $21,500 in City health care contributions and $14,000 in one-time wellness bonuses.

In 2024-25, the estimated fiscal impact of the changes to the Management Compensation Plan and Eighth Amendment to the City Manager Agreement is $54,200. This includes $33,600 in COLAs and $20,600 in City health care contributions.

Attachments:

1. Red-lined Mid-Management Employee MOU
217
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2. 2021 Management Compensation Plan

3. Proposed 2024 Compensation and Benefits Plan

4. Eighth Amendment to the City Manager Employment Agreement Report Prepared By: Chloé Woodmansee, Assistant to the City Manager Reviewed By: Julia Gautho, City Clerk; Jim Malberg, Finance Director Approved By: Jamie Goldstein, City Manager
218
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D

MEMORANDUM OF UNDERSTANDING

BETWEEN

MID-MANAGEMENT EMPLOYEES AND CITY OF CAPITOLA
6/27/2021 – 6/30/20236/27/2024 – 6/30/2027
Table of Contents
SECTION I. WAGE SCHEDULES/HOURLY RATES/EMPLOYEE STATUS.....................................................3

1. Merit Pay ......................................................................................................................................................3

2. Service..........................................................................................................................................................4

3. Overtime.......................................................................................................................................................4

4. Effective Date of Pay Increase......................................................................................................................5

5. One-Time Wellness Bonus...........................................................................................................................5

6. Contingent Equity Adjustments....................................................................................................................5 SECTION II: LEAVE PROVISIONS........................................................................................................................5

1. Vacation .......................................................................................................................................................6

2. Personal Holidays.........................................................................................................................................7

3. Bereavement Leave ......................................................................................................................................7

4. Holiday Schedule..........................................................................................................................................7

5. Jury Duty ......................................................................................................................................................8

6. Leave of Absence Without Pay.....................................................................................................................8

7. Accruals after Date of Separation .................................................................................................................8 SECTION III: BENEFITS .........................................................................................................................................8

1. Flexible Spending Arrangement Contributions.............................................................................................8

2. Opt-Out.........................................................................................................................................................9

3. Retirement Benefits CalPERS ......................................................................................................................9

4. Shoes, and Apparel Reimbursements............................................................................................................9

4.5. Deferred Compensation…………………………………………………………………………………………10

5.6. Physical Examinations................................................................................................................................10

6.7. Insurance ....................................................................................................................................................10

7.8. Mileage Reimbursement.............................................................................................................................10 SECTION IV: INCENTIVE PROGRAMS..............................................................................................................10

1. Longevity Pay Incentive .............................................................................................................................10

2. Education Reimbursement Program ...........................................................................................................10

3. Bilingual Pay ..............................................................................................................................................10 SECTION V: EMERGENCY MEALS................................................................................................................10 SECTION VI: GRIEVANCE PROCEDURE ..........................................................................................................11

1. Definition of a Grievance ...........................................................................................................................11

2. Right to Representation ..............................................................................................................................11

3. Limitations on Money Damages:................................................................................................................11 219
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 2 4. Procedure:...................................................................................................................................................11 SECTION VII: LAYOFFS.......................................................................................................................................12 SECTION VIII: MISCELLANEOUS ......................................................................................................................13

1. Legal Defense.............................................................................................................................................13

2. Use of Employer Facilities .........................................................................................................................13

3. Bargaining Time.........................................................................................................................................13

4. Required Meetings......................................................................................................................................13

5. Emergency Call-Back Compensation .........................................................................................................13

8.9. Severability.................................................................................................................................................14 220
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 3 MIDDLE- MANAGEMENT EMPLOYEES

MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (MOU) is made and entered into between the City of Capitola (hereinafter referred to as “City”) and the Mid-Management employees. Classifications covered by this MOU are: Associate Planner, Public Works Project Manager, Senior Planner, Maintenance SuperintendentOperations Maintenance Supervisor, Field Supervisor, Building Official, Public Works Environmental Projects Manager, Senior Mechanic, and Senior Accountant. This MOU shall be in effect for the period beginning on June 27, 20241, and ending on June 30, 20273 and shall be effective upon ratification by the bargaining unit and approval by the Capitola City Council.

SECTION I. WAGE SCHEDULES/HOURLY RATES/EMPLOYEE STATUS
The wage schedule attached to this Memorandum of Understanding sets forth the base pay, subject to such adjustments (such as longevity pay) as are specifically set forth in this MOU.

Letters “A” to “E” have been used to designate the respective pay steps for each position. The rates contained in the wage schedule are base salary rates and do not include overtime or benefits.

Effective the first pay period after association ratification and Council approval of the successor MOU in accordance with the Brown Act, the salary range for each classification shall be readjusted by 2.53%.

Effective the first full pay period of July 20252, the salary range for each classification shall be readjusted by 3.0%.

Effective the first full pay period of July 2026, the salary range for each classification shall be readjusted by 3%.

1. Merit Pay
A merit pay advancement for an employee shall become effective on the first day of the pay period in which the minimum length of service has been satisfactorily completed.

When an employee has not been approved for advancement to the next higher wage step, the employee shall be reconsidered for such advancement after the completion of either three months of additional service, or after a period of three to six months of additional service if the supervisor concludes that three months will be insufficient time to evaluate whether the performance deficiencies that led to the denial of the step increase have been adequately addressed. At the time a step increase is denied, the supervisor shall identify in writing the timing of reconsideration of the step increase. An employee whose step increase is denied shall also be advised in writing (typically in a performance evaluation) of the reason(s) why the step increase was denied. Grants and denials of step increases shall be on a merit basis only.

Regardless of whether subsequent reconsideration of a denial of a step increase does or does not result in a step increase, the employee’s annual review date shall be as originally 221
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 4 designated.

2. Service
The word "service" as used in this Memorandum of Understanding means continuous full-time service in the position in which the employee is being considered for salary advancement, service in a higher position, or service in a position allocated to the same salary schedule and having generally similar duties and requirements. A lapse of service of any employee for a period of time longer than thirty days by reason of resignation or discharge shall serve to eliminate the accumulated length of service time of such employee, and any such employee reentering the service of the City shall be considered as a new employee, unless another standard is established by the personnel rules, in which case that standard shall apply.

1. Types of Appointment: For all types of appointments refer to the personnel rules except for Acting Appointments and Equipment Operator
a. Acting appointment may be either full-time or part-time, as established by the City Manager. An acting appointment occurs when an employee is temporarily assigned to, and performs all duties of a position other than the position he/she normally occupies or when an employee is assigned an acting appointment pending evaluation of the employee’s ability to perform the duties of the position. While serving under an acting appointment, an employee will receive additional compensation as determined by the City Manager. Such pay will be no less than 5% above the employee’s regular compensation. It may be up to, but ordinarily will not be more than the first step of the position occupied.
b. If an employee is designated by the Department Head or the Department Head’s designee to perform the duties of an Equipment Operator on the following equipment;
• Ten-yard Truck and Trailer (license required)
• Sweeper
• Bull Dozer
• Front Loader
that employee shall receive a 5% increase to salary for all such hours worked.

3. Overtime
All employees within the Mid-Management unit except for the position of Building Official, Public Works Project Manager, Environmental Projects Manager, Senior Planner and Senior Accountant which are exempt from FLSA, are hourly employees and can accrue overtime subject to the laws, rules, regulations and any other MOU provisions of the City, state and federal government.

The normal regular work week commences on Sunday and consist of forty (40) hours except that the regular work week of public works department personnel engaged in maintenance activities shall be as approved by the City Manager. Except for employees exempt under the FLSA, overtime will be compensated at the rate of one and one-half times 222
Item 9 E.

DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 5 the base rate of pay for all hours worked over 40 hours per week in a workweek. Such additional compensation shall, at the employee’s election, be either in cash or compensatory time off, in accordance with Labor Code section 204.3.

With regard to this section “hours worked” shall not include sick leave. Nor shall such a definition include vacation or compensated leave time off not scheduled in advance by at least ten working days. “Hours Worked” shall also not include workers compensation time off unless immediate treatment is required on the date of injury for the injury incurred, in which case overtime is allowed providing the overtime accrued is an extension of the workday and the hours worked for the week exceed 40 hours.

The position of Building Official, Public Works Project Manager, Environmental Projects Manager, Senior Planner, and Senior Accountant are professional positions exempt under FLSA, and therefore not entitled to overtime compensation. An Employee filling exempt positions are entitled to ten days per year of administrative time off. Administrative leave is non-cumulative. It may not be converted to cash. One year’s worth of Administrative Leave becomes available on the first day of the calendar year. The exception is persons hired mid-year, in which case administrative leave is prorated for the applicable period. (Reso. #3486)

4. Effective Date of Pay Increase
A merit pay advancement for an employee shall become effective on the first day of the pay period in which the minimum length of service has been satisfactorily completed.

5. Signing Bonus
Contingent upon a tentative agreement by June 24, 2021, which is ratified by the membership. All employees at the time of ratification in the Mid-Management bargaining unit shall receive a one-time $1500 signing bonus, minus applicable taxes. The one-time signing bonus shall be paid the first full pay period after ratification by the Capitola City Council.

5. One-Time Wellness Bonus
All employees in the Mid-Management bargaining unit shall receive a one-time $2,000 wellness bonus, minus applicable withholdings. The one-time wellness bonus shall be paid during the first full pay period after ratification of this MOU by the Capitola City Council.

6. Market Study SalaryContingent Equity Adjustments
If the City tax measure on the November 2024 ballot passes, the below classifications shall receive a one-time base wage increase, as indicated below. Increases shall be effective the first pay period after City Council certification of 2024 election results. • PW Project Manager, PW Environmental Project Manager – 6.37% • Senior Mechanic – 7.11%
• Operations Maintenance Supervisor – 4.71%
• Associate Planner, Senior Planner – 3.4%
• Building Official – 3.81%
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 6 SECTION II: LEAVE PROVISIONS

1. Vacation
a. Vacation Accrual
Vacation accrues on a prorated basis, based upon a 30-day month. The rates of accrual are as follows:

Years of Employment Vacation Days
1 and 2 12
3 and 4 14
5 through 9 17
10 through 19 22
20 and higher 27
b. Accumulation
An employee may not accumulate more than, but instead each year must cash out pursuant to Section 12.d, below, all accumulated vacation in excess of 360 hours. c. Vacation Cash Out Upon Termination
Upon termination, an employee shall be paid for all accumulated vacation to the separation date, at a rate equal to 100% of his/her current hourly pay rate. Alternatively, an employee may individually contractually establish, in writing, with the City Manager, mutually agreeable provisions regarding the timing and terms of the cash payout. d. Vacation- Mandatory Cash Out Before Termination
An employee who has accumulated more than 360 hours as of the last pay period in April of any year shall be paid in cash at a rate equal to 100% of his/her current hourly pay rate for all hours in excess of 360 such payment shall not exceed the employee's annual vacation accrual amount. These cash out payments will be included with the paycheck for the first full pay period in May.
e. Optional Vacation Cash Out
In any calendar year an employee may cash out up to 80 hours of accumulated vacation.

2. Sick Leave
a. Sick Leave Accrual
Sick leave accrues on a pro-rated basis, based upon a 30-day month. Twelve days accrue each calendar year.
b. Sick Leave-Family Care
Sick leave may be used to care for members of the immediate family in accordance with the FMLA and CFRA, or as approved by the City Manager.
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 7 c. Sick Leave While on Vacation
An employee who becomes ill or is hospitalized while on vacation and provides a written statement from a licensed physician or medical doctor that the illness would have resulted in the employee not being able to come to work, shall have the period of illness charged against sick leave and not vacation leave.
d. Sick Leave Cash Out
Employees may not cash out sick leave.

2. Personal Holidays
All regular positions are entitled to three (3) personal holidays per calendar year. Unused Personal Holidays shall be used by the employee no later than December 31st of each year and are not cumulative.

3. Bereavement Leave
All employees are permitted five (5) days of Unpaid Bereavement Leave upon the death of any family member listed in Section 12945.2 of Government Code. In case of death in the immediate family (as defined below) an employee shall be granted three (3) days of paid bereavement leave per occurrence within California. In cases involving out-of-state funerals or distances of more than 200 miles, an additional two (2) days of paid bereavement leave shall be granted. The Paid Bereavement leave runs concurrent with the five (5) Day Unpaid Bereavement Leave. However, the leave days need not be consecutive. Additional time off for this purpose must be Vacation, Sick Time, or unpaid leave. Bereavement leave must be approved by the Department Head.

For purposes of this section, “Immediate family” means mother, stepmother, father, stepfather, husband, wife, domestic partner as defined by the State of California, child, stepchild, sibling, stepsibling, foster parent, foster child, brother-in-law, sister-in-law, mother-in-law, father-inlaw and grandparents,, and any individual to whom an employee is serving in Loco Parentis.

4. Holiday Schedule
There shall be twelve thirteen (1213) holidays granted annually for the term of the MOU. The holidays to be observed during calendar year are set forth below.

New Year’s Day 1/01/
Martin Luther King Day *
Lincoln’s Birthday *
Washington’s Birthday *
Memorial Day *
Juneteenth 6/19/
Independence Day 7/4/
Labor Day *
Indigenous Peoples Day *
Veterans’ Day 11/11/
Thanksgiving Day *
Friday Following Thanksgiving *
Christmas Day 12/25/
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 8 * These holidays shall be taken at the same time as the federal holidays are taken. Holidays listed above occurring on a Saturday shall be observed on Friday. Holidays occurring on a Sunday shall be observed on Monday.

Holiday time will be for the regularly scheduled shift time. For example, if the regularly scheduled shift is 8.5 hours, employee will receive 8.5 hours of holiday time. If the regularly scheduled shift is 6 hours, employee will receive 6 hours of holiday time.

In addition, offices located at the Community Center or at City Hall will be closed for one week during the Christmas holidays during which employees affected by the closure will be permitted to use vacation, personal holidays or sick leave in order not to lose compensation. All other City offices and programs shall remain open during this period.

Public Works employees may be required to work holidays. Employees who work on any holidays will use holiday time on the holiday and it will count as hours worked. Actual hours worked will be added to holiday time hours and will be considered overtime if total hours worked meet the weekly overtime threshold.

5. Jury Duty
Leave of absence with pay shall be granted to an employee while serving on jury duty. Time spent commuting from home to and from jury duty is not compensable; time spent traveling from court to place of work is compensable. Any jury fee awarded shall be deposited with the City Treasurer.

6. Leave of Absence Without Pay
A leave of absence without pay may be granted by the City Manager upon the request of the employee seeking such leave, but such leave shall not be for longer than one year.

7. Accruals after Date of Separation
An employee’s separation date is the last date actually worked, except that an employee who, as of the last day worked, has not used all of his/her yearly allotment of vacation may extend the separation date by the number of days necessary to reach the full yearly allotment. “Yearly allotment” means the amount of vacation that the employee was entitled to accrue in his/her last year of employment. Unless otherwise provided by state law, none of the following accrue after the date of separation: sick leave, vacation, personal holidays, holiday pay, administrative leave, Flex Plan contributions, or payment of the insurance premiums described in Section III.1 below.

SECTION III: BENEFITS
(Regarding benefits available to part-time employees, see Section I.2, above.)

1. Flexible Spending Arrangement Contributions
The City makes a flexible spending arrangement (“Flex Plan”) contribution on behalf of each qualified employee for medical, dental & vision coverage. For those employees who have selected health coverage through PERS, from the monthly contribution set forth herein, effective January 1, 20241 a $143157.00 per month contribution will be paid to PERS for what is sometimes referred to as “employer contribution”. This amount is the minimum amount required by PERS, recognizing that state law may increase this minimum from time to time requiring compliance by City. The City’s maximum contribution below is inclusive of the required PEMCHA minimum.

The City reserves the option of adding additional health care plans as they may become available. 226
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 9 Effective Dates Employee Only Employee +1 Employee +2 First full pay after
ratification
$824.00 $1339.00 $ 1751.00
Effective Dates Employee Only Employee +1 Employee +2
First full pay period
after ratification
$1,000 $1,850 $2,250
First full pay period in
July 2025
$1,050* $1,925* $2,350*
First Full pay period in
July 2026
$1,100* $2,000* $2,450*
*contingent on the City tax measure passing in NovebmerNovember, 2024.

2. Opt-Out
Employees who can verify to the City’s satisfaction that: they have equivalent group health coverage for medical (including dental & vision), which will remain in effect until the next enrollment date will be eligible for a cash payment of $250.00 per month. The City reserves the option of adding additional programs to the cafeteria plan, as they may become available.

3. Retirement Benefits CalPERS
a. Classic Employees:

The City participates in the California Public Employees’ Retirement System (CalPERS) operated by the State of California. Benefits provided are detailed in separate publications, depending upon the plan. The City provides 2.5% at 55 Retirement Plan for non-sworn employees, with the single-highest year option. Contributions will be reported in accordance with the current CalPERS contract, i.e.: the employee portion (8%) plus any amount above the cap is reported to CalPERS as paid by the employee.

In 2007, the City implemented a cost-sharing benefit that consists of the City paying 8% of the normal member’s contributions as Employer Paid Member Contributions (EPMC), with additional cost sharing contributions not to exceed a total of 16.259% through June 30, 2019. The City agrees to report the value of the Employer Paid Member Contributions as salary for retirement benefit plan purposes.

Beginning July 1, 2018, all classic employees shall contribute 13.392% of their reportable salary to PERS. This contribution shall not be reduced unless negotiated by the parties in future negotiations.
b. PEPRA Employees:

Public Employees’ Pension Reform Act (PEPRA) for Miscellaneous Employees hired by the City on or after January 1, 2013 and who do not qualify as Classic members as determined by CalPERS, are considered PEPRA Employees. CalPERS has by statute implemented a 2.0% @ 62 pension formula, based on a three-year average compensation. Employees in this category shall pay 50% of the normal cost rate as determined by CalPERS. 227
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 10 4. Shoes, and Apparel Reimbursements:

Each calendar year the Field Supervisor shall receive: one pair of approved safety shoes, up to 5 city-logoed shirts, and up to 5 pairs of denims. Each calendar year the Maintenance Superintendent shall receive one pair of steel-toed boots, and a maximum of two pairs of pants. The Public Works Director shall determine replacement frequency and kind.

5. Deferred Compensation
All employees covered by this Agreement shall be eligible to participate in a deferred compensation program, upon request. the City will contribute $25 per pay period.

5.6.Physical Examinations
The City, for any employee receiving flex credit contributions, will provide an annual physical examination for employee. The City will pay the amount not covered by the health care program.

6.7.Insurance.

The City will continue to provide term life insurance in the amount of $50,000 and longterm disability insurance.

7.8.Mileage Reimbursement
Employees required to use their personal vehicles while on City business will be reimbursed at the rate set by the Internal Revenue Service.

SECTION IV: INCENTIVE PROGRAMS

1. Longevity Pay Incentive
Upon completing continuous years of service with the City, an employee's base pay shall be increased as follows:
a. 15 years' continuous service - 5%
b. 20 years' continuous service - an additional 5%, which shall be compounded with the 15- year recognition.

If the City tax measure on the November 2024 ballot passes, the following longevity schedule will replace the longevity schedule noted above:
a. 10 years’ continuous service – 5%
b. 15 years’ continuous service – additional 3%, which shall be compounded with the 10 year recognition.
c. 20 years’ continuous service – additional 2%, which shall be compounded with the 15 year recognition.
b.

2. Education Reimbursement Program
The City will reimburse employees for tuition upon the completion of courses approved in advance by the City Manager up to a maximum of $500 per calendar year for classes completed in that same calendar year. Textbook reimbursement for courses approved in advance by the City Manager shall be at 100%.

3. Bilingual Pay
Employees proficient in the Spanish language shall receive premium pay equal to five (5%) percent of base salary in addition to their regular wage, if:
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 11 a) Employee passes the City's bilingual competency test as administered by the Personnel Department on an annual basis to maintain the bonus pay. The City Manager may waive the annual testing requirement for individuals upon recommendation of the department head. Annual basis refers to the fiscal year; and
b) The employee is required to serve as a translator on a regular and ongoing basis, as certified by the Department Head.

SECTION V: EMERGENCY MEALS
The City shall arrange for meals for employees assigned to work four (4) or more hours contiguous to the employee’s shift when the employee is not provided notice of the need to work the overtime at least 12 hours prior to either commencing the overtime work or shift.

SECTION VI: GRIEVANCE PROCEDURE

1. Definition of a Grievance:

A grievance is defined as an allegation presented in writing by an employee or group of employees that the City has failed to provide a condition of employment, which is established by law, Memorandum of Understanding, by written City or departmental rules, provided that the enjoyment of both such right is not made subject to the discretion of the Department Head or the City by the terms of law, Memorandum of Understanding, or by written City or departmental rules and, provided further, that the conditions of employment which are the subject matter within the scope of representation as defined in California Government Code Section 3504. Notwithstanding the above, excluded from this grievance procedure are employee evaluations, and any other matter that is assigned its own appeal procedure such as discipline and an alleged violation of the harassment policy.

2. Right to Representation:

An employee having a grievance shall have the right to consult with and be assisted by a representative of his/her own choice throughout the grievance process. In those cases in which an employee elects to represent him/herself or arranges for other representation, the Union shall have the right to participate in the grievance procedure to the extent necessary to protect the interest of its members in negotiated conditions of employment.

3. Limitations on Money Damages:

In no event shall any grievance include a claim for money relief for more than the twenty-one day period plus such reasonable discovery period, unless otherwise provided by law.

4. Procedure:

Failure of the employee to timely file a grievance and/or comply with the time limits at any step of this grievance procedure shall constitute an abandonment of the grievance.

Failure of the employer to respond within the time limits at any step of this grievance procedure shall result in an automatic advancement of the grievance to the next step. The parties may mutually agree to extend the time permitted under any of the steps Step 1
A grievance must be presented to the grievant’ s supervisor within twenty-one (21) calendar days 229
Item 9 E.

DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 12 from the day upon which the City allegedly failed to provide a condition of employment, or within twenty-one (21) calendar days from the time in which an employee might reasonably have been expected to have learned of such alleged failure to provide. The written grievance shall include the following:
a) Date of submission;
b) Signature of employee or employees;
c) The MOU provision, Personnel Rule, Administrative Policy or other rule or policy allegedly violated;
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 13 d) A description of the relevant facts, including specifically how, when and by whom the grieved condition of employment was violated; e) The requested resolution or remedy; and
f) The name of any representative chosen by the grievant.

The supervisor shall provide the grievant with a written response within seven (7) actual working days.

Step 2
If the grievance is not resolved at Step 1, the employee shall have seven (7) actual working days after receipt of the supervisor’s Step 1 response to file an appeal with the Department Head. The Department Head may, but is not required to, meet with the grievant to discuss the grievance.

The Department Head shall have seven (7) actual working days from either receipt of the appeal, or the meeting with the grievant, whichever is later, to provide the grievant with a written response.

Step 3
If the grievance is not resolved at Step 2, the employee shall have seven (7) actual working days after receipt of the Department Head’s Step 2 response to file an appeal with the City Manager.

The City Manager shall meet with the grievant and other persons the City Manger believes would be useful to the City Manager’s consideration of the grievance within seven (7) actual working days after receipt of the grievant’s appeal. The City Manager shall have seven (7) actual working days from the date of the meeting with the grievant to provide the grievant with a written decision.

The Mid-Management Group may, in its own name, file a grievance with the City Manager alleging that the City has failed to provide it some organizational right which is established by law, provided that such right is not made subject to the discretion of the City. Such Union grievance shall be filed with the City Manager and heard and determined pursuant to the provisions of this step of the grievance procedure. The City Manager shall meet with the MidManagement Group representative and other persons the City Manager believes would be useful to the City Manager’s consideration of the grievance within (7) actual working days after receipt of the Union’s grievance. The City Manager shall have seven (7) actual working days from the date of the meeting with the Mid-Management Group representative to provide the MidManagement Group with a written decision.

Step 4
An employee dissatisfied with the City Manager’s decision on the employee’s Step 3 grievance may appeal the grievance to the City Council within (7) seven actual working days of receipt of the City Manager’s decision. The City Council will schedule a hearing within a reasonable time period after receipt of the appeal. The decision of the City Council following the hearing shall be final.

SECTION VII: LAYOFFS
Layoffs shall be governed by Personnel Rule 12. The City will make its best efforts to provide an additional 30 days of EAP benefits to employees who are laid off to assist them in their transition. 231
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DocuSign Envelope ID: 2066A4A5-CB9D-48F3-B76B-3BD8DA548C8D 14 If continued EAP benefits are not available, the City will meet with the Union to discuss the possibility of the City providing laid off workers with guidance on resume writing, conducting a job search, job interviewing, coping with stress and/or unemployment insurance benefits.

SECTION VIII: MISCELLANEOUS
Nothing in this plan will preclude the incumbents of any position from negotiating individual contractual provisions, provided that: such individual negotiations arise out of situations in which the employee has, or is negotiating towards, voluntarily terminating his/her employment or temporarily working in a higher paid position; and any resulting provision does not purport to affect the rights of any other member of the unit.

1. Legal Defense
Except as provided in Government Code Section 995.2, City shall provide a defense including but not limited to legal counsel in: a) any civil action or proceeding described in Government Code Section 995; b) any administrative action or proceeding described in Section 995.6; or any criminal action or proceeding described in Government Code Section 995.8. "Proceeding" as used in this section is applicable to situations where a claim or action is threatened, but not filed, if a reasonable, prudent person would consult or retain counsel in response to the possibility of actual civil, administrative, or criminal action. If City paysfor a defense, but a court or tribunal issues a final ruling that would, under Section 995.2, preclude City payments for defense, employee shall immediately reimburse City, and if he/she fails to do so, City may offset any such amounts against compensation otherwise due employee under this contract.

2. Use of Employer Facilities.

Employer facilities, such as the City Hall Community Room, may be made available, upon timely application, for use by employees and the recognized entity representing the employees. Such use shall not occur during regular duty hours, other than the lunch period.

Application for such use shall be made to the management person under whose control the facility is placed.

3. Bargaining Time.

A reasonable number of Employee members of the entity representing the bargaining unit shall be allowed time to absent themselves from duties for a reasonable period without loss of pay, for the purpose of participating in contract negotiations. They shall be extended the same privilege to participate in any meetings mutually called by the parties during the term of this agreement for review of grievances and contract compliance questions.

4. Required Meetings
Administrative staff members covered under this MOU who are required to attend meetings outside their regular work schedules will be paid at the overtime rate (1.5) for two hours, or for the hours actually worked, whichever is greater.

5. Emergency Call-Back Compensation
a. “Call-back” refers to a situation where an employee has completed his/her regular work day without knowing that he/she would be called back to work, by his/her supervisor or as 232
Item 9 E.
15 a result of emergency circumstances, during hours of the day not occurring during the employee’s regular workday. An employee who is required to come to work not more than one hour early, but is not thereafter released from work before the start of the regular work day is not on “call-back.”
b. Employees called back to work shall be treated as having worked at least three hours, even if actual time is less.
c. Public Works: The rate of pay for Public Works Dept. employees in the Mid-Management Group during call-back hours is as follows:
(1) Two and one-half times the employee’s hourly base rate for hours served between the hours of 10 p.m. and 6 a.m.; or
(2) Two times the hourly base rate for hours served during other times of the day. d. For all employees not covered by subsection c, call-back hours will be paid the same as overtime.
e. Time spent traveling to and from the place of call-back work is not counted in applying the provisions of this section, or Section 8 above.
f. Units of time that are both call-back and overtime will receive the most favorable of the two treatments, but no single unit of time will be treated as both call-back and overtime.

8. Severability.

If any of the provision herein contained be rendered or declared invalid by reason of any State or Federal legislation, or by ruling of any court of competent jurisdiction, such invalidation of such part or portion of this Memorandum of Agreement shall not invalidate the remaining portions hereof, and they shall remain in full force and effect, insofar as such remaining portions are severable.

SIGNATURES:

CITY OF CAPITOLA: MIDDLE-MANAGER EMPLOYEES:
___________________ ____________________________
Jamie Goldstein Brian Froelich
____________________________
Gabe Cuzick
____________________________
Eric Martin
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Effective June 27, 2024

CITY OF CAPITOLA
Department Heads Compensation and Benefits Plan

PURPOSE AND INTENT
This Compensation and Benefits Plan (Plan) is intended to establish compensation, benefits and terms and conditions of employment for Department Heads and the Chief of Police.

The City Manager has the authority to hire Department Heads and the Chief of Police, and to adjust their compensation consistent with this Plan. Department Heads are exempt from the Fair Labor Standards Act (FLSA), at will employees, serve at the pleasure of the City Manager and can be terminated with or without notice or cause and with no rights of appeal. 1) POSITIONS COVERED BY PLAN
a. Chief of Police
b. Community Development Director
c. Community Services & Recreation Director
d. Finance Director
e. Public Works Director
2) SALARY SCHEDULE
a. Cost of Living Adjustments shall be as follows:
i. Effective first full pay period after June 27, 2024, the salary range for each classification shall be increased by 3%
ii. Effective the first full pay period of July 2025, the salary range for each classification shall be increased by 3%
iii. Effective the first full pay period of July 2026, the salary range for each classification shall be increased by 3%
b. Equity Salary Adjustments – contingent on the City tax measure passing in November 2024: If the City tax measure on the November 2024 ballot passes, the salary range for the following classifications shall be increased by the following amounts. Increases shall be effective the first pay period after City Council certification of the 2024 election results.
i. Community Development, Community Services & Recreation, Finance, and Public Works Directors: 8.75%
ii. Chief of Police: 4.3%
3) LONGEVITY PAY – contingent on the City tax measure passing in November 2024 a. If the City tax measure on the November 2024 ballot passes, the following longevity schedule will apply to the Community Development, Community Services & Recreation, Finance, and Public Works Directors:
i. 10 years’ continuous service – 5%
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City of Capitola Department Heads Compensation & Benefits Plan Effective June 27, 2024
ii. 15 years’ continuous service – additional 3%, which shall be compounded with the 10-year recognition
iii. 20 years’ continuous service – additional 2%, which shall be compounded with the 15-year recognition
b. If the City tax measure on the November 2024 ballot does not pass, the following longevity schedule for the Community Development, Community Services & Recreation, Finance, and Public Works Directors will remain in place:
12 years’ continuous service – 5%
4) POLICE CHIEF CALIFORNIA LAW ENFORCEMENT EXPERIENCE PAY – contingent on the City tax measure passing in November 2024
The Chief of Police shall receive a 5% salary adjustment upon completion of 10-years of service as a POST-certified Peace Officer in California, and a 2.5% salary adjustment upon completion of 15-years of service as a POST-certified Peace Officer in California. This provision shall apply to applicants for the Chief of Police position. 5) CITY ENGINEER SPECIALTY PAY – contingent on the City tax measure passing in November 2024
The Public Works Director shall receive a 5% salary adjustment if they have the appropriate qualifications for and do serve as City Engineer. This provision shall apply to applicants for the Public Works Director position.
6) BILINGUAL PAY
Department Heads proficient in a second language will qualify for a 5% salary adjustment, dependent upon City Manager approval.
7) SEVERANCE PAY
If a Department Head is terminated by the City Manager, the City will pay the Department Head an amount equal to four months salary and four months Flexible Spending Arrangement Contribution benefits. Additionally, the Department Head will receive payment for all vacation leave accrued to the date of separation. The same terms apply to the Chief of Police, except that severance shall be six months' salary and Flexible Spending Arrangement Contribution. However, if an employee is terminated because of conviction of any criminal offense or “for cause”, the City shall have no obligation to continue the employment of the Department Head or pay severance pay. Any severance payment shall be contingent on the employee receiving the payment executing a release of all claims against the City, as permitted by State law.
8) ADMINISTRATIVE LEAVE ACCRUAL
80 hours per calendar year, prorated depending upon date of hire. No accumulation and may not be converted to cash.
9) PERSONAL HOLIDAYS
Three personal holidays per calendar year, prorated depending upon date of hire. No accumulation and may not be converted to cash.
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City of Capitola Department Heads Compensation & Benefits Plan Effective June 27, 2024
10)VACATION ACCRUAL
Years of Employment Vacation Days
1 and 2 12
3 and 4 14
5 through 9 17
10 through 19 22
20+ 27
a. The City Manager may place a new Department Head or Chief of Police at a specific accrual rate.
b. Upon termination, payment will be made for all accumulated vacation to the separation date, at a rate equal to 100% of the current hourly pay rate. c. Vacation Cap: All hours in excess of 360 hours on the last pay period of April of any year will be cashed out. Exception will be for any employee under a previous agreement who has accumulated more than 360 hours as of January 1, 2011; employee may maintain that level of 504 hours provided however if that if accumulated vacation falls below 504 at anytime during the year, then that will be the new allowable level until employee reaches 360 hours. d. Optional Vacation Cash Out: In any calendar year, Department Head or Chief of Police may cash out up to 80 hours of accumulated vacation. 11)SICK LEAVE
Sick leave will accrue at a rate of 12 days per year. Unlimited accumulation and may not be converted to cash.
12)FLEXIBLE SPENDING ARRANGEMENT CONTRIBUTIONS
a. Employees are eligible to enroll in a CalPERS medical plan, Dental and Vision Plan. The City reserves the option of adding additional health care plans as they may become available. The City makes a contribution on behalf of each qualified employee, listed below:

Effective Dates Employee Only Employee +1 Employee +2
First full pay period
after ratification
$1,000 $1,850 $2,250
First full pay period
in July 2025
$1,050* $1,925* $2,350*
First Full pay period
in July 2026
$1,100* $2,000* $2,450*
*Contingent on the City tax measure passing in November 2024 b. Cash Out: Employees who can verify to the City’s satisfaction that they have group health coverage for medical (including dental and vision), which will remain in effect until the next enrollment date, will be eligible for a cash payment of $250.00 per month. Employees who purchase a CalPERS Health Plan and dental and vision coverage, but do not use their entire monthly contribution, may use the remaining funds to purchase benefits other than medical (including 236
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City of Capitola Department Heads Compensation & Benefits Plan Effective June 27, 2024
dental and vision) coverage. (If a cash payment is taken, it is not included in the employee’s compensation for the CalPERS retirement plan). 13)FLEXIBLE SPENDING ACCOUNTS
The City offers a Healthcare Spending Account with an annual election limit of $2,500 and a Dependent Care Spending Account with annual election limit of $5,000. 14)RETIREMENT
a. CalPERS Retirement Benefits for Classic Members:
i. Miscellaneous Classic Employees: The City participates in the California Public Employees’ Retirement System (PERS). Benefits provided are detailed in separate publications. The City agrees to provide 2.5% at 55 Retirement Plan for eligible classic miscellaneous employees in the Unit and the single-highest-year option. Miscellaneous classic employees will contribute 13.392% of their reportable salary to PERS.
ii. Safety Classic Employees: The City participates in the California Public Employees Retirement System (PERS). Benefits provided are detailed in separate publications. The City agrees to provide 3.0% at 50 Retirement Plan for eligible classic Safety employees in the Unit and the singlehighest-year option. Sworn classic employees will contribute 14.974% of their reportable salary to PERS.
b. CalPERS PEPRA Employees:
i. Individuals that have never been a member of any public retirement system prior to January 1, 2013, or
ii. Individuals who moved between retirement systems with more than a six month break in service; and
iii. In compliance with the California Public Employees’ Pension Reform Act of 2013, (PEPRA), new members will receive a Local Miscellaneous benefit formula of 2% @ 62, Sworn will receive a benefit of 2.7% @ 55.

Employees will contribute 50% of the normal cost as determined by CalPERS. The employee contribution from pay is on a pre-tax basis pursuant to 414(h)(2). Final compensation, for purposes of calculating the retirement benefit, is calculated on the highest average pensionable compensation earned by a member during a period of 36-consecutive months. This is also referred to as the 3-year average. 10) HOLIDAYS
Thirteen (13) Holidays per calendar year, as follows: New Year’s Day, Martin Luther King, Lincoln’s Birthday, Washington’s Birthday, Memorial Day, Juneteenth, Independence Day, Labor Day, Indigenous Peoples Day, Veteran’s Day, Thanksgiving Day, Friday following Thanksgiving, Christmas Day.

In addition, City Hall will be closed for one week during the Christmas holidays during which employees are permitted to use vacation, personal holiday or sick leave in order not to lose compensation.
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City of Capitola Department Heads Compensation & Benefits Plan Effective June 27, 2024
11) INSURANCE
The City provides short-term disability for non-sworn and long-term disability insurance for both as well as term life insurance in the amount of $50,000 12) VEHICLE USE
The Chief of Police will be provided with a vehicle for commuting to and from work within Santa Cruz County and for business purposes.
15)UNIFORM
Chief of Police: City will purchase the initial uniform at a cost not to exceed $2,500. City will pay for reasonable cleaning of the uniform at a cost not to exceed $250/yr. 16)CHIEF OF POLICE RECRUITMENT
The City Council shall approve the recruitment process for the Chief of Police at a City Council meeting as recommended by the City Manager.
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Item 9 E.

Effective June 27, 2021
City of Capitola
Department Head’s and Chief of Police
Compensation and Benefits Plan
Purpose and Intent
This Compensation and Benefits Plan (Plan) is intended to establish compensation, benefits and terms and conditions of employment for Department Heads and the Chief of Police.

The City Manager has the authority to hire Department Heads and the Chief of Police, and to adjust their compensation consistent with this Plan. Department Heads and Chief of Police are exempt from the Fair Labor Standards Act (FLSA), are at will employees, serve at the pleasure of the City Manager and can be terminated with or without notice or cause and with no rights of appeal.
1) SALARY SCHEDULE
a) This Plan covers positions in the job classes and salary schedule set forth in Attachment A, incorporated in and made a part of this document.
b) Longevity: 5% base pay increase following 12 full years of employment. (Does not apply to Chief of Police)
2) SEVERANCE PAY
If a Department Head is terminated by the City Manager, the City will pay the Department Head an amount equal to four months salary and four months Flexible Spending Arrangement Contribution benefits. Additionally, the Department Head will receive payment for all vacation leave accrued to the date of separation. The same terms apply to the Chief of Police with the exception of six months' salary and Flexible Spending Arrangement Contribution. However, if an employee is terminated because of conviction of any criminal offense or “for cause”, the City shall have no obligation to continue the employment of the Department Head or pay severance pay. 3) ADMINISTRATIVE LEAVE ACCRUAL
80 hours per calendar year, prorated depending upon date of hire. No accumulation and may not be converted to cash.
4) PERSONAL HOLIDAYS
Three personal holidays per calendar year, prorated depending upon date of hire. No accumulation and may not be converted to cash.
5) VACATION
a) Vacation Accrual:

Years of Employment Vacation Days
1 and 2 12
3 and 4 14
5 through 9 17
10 through 19 22
20 and higher 27
b) The City Manager has the authority to place a new Department Head or Chief of Police at a specific accrual rate.
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Item 9 E.

Department Head’s and Chief of Police Compensation and Benefits Plan 2 c) Upon termination, payment will be made for all accumulated vacation to the separation date, at a rate equal to 100% of the current hourly pay rate. d) Vacation Cap: All hours in excess of 360 hours on the last pay period of April of any year will be cashed out. Exception will be for any employee under a previous agreement who has accumulated more than 360 hours as of January 1, 2011; employee may maintain that level of 504 hours provided however if that if accumulated vacation falls below 504 at anytime during the year, then that will be the new allowable level until employee reaches 360 hours.
e) Optional Vacation Cash Out: In any calendar year, Department Head or Chief of Police may cash out up to 80 hours of accumulated vacation.
6) SICK LEAVE
Sick leave will accrue at a rate of 12 days per year. Unlimited accumulation and may not be converted to cash.
7) FLEXIBLE SPENDING ARRANGEMENT CONTRIBUTIONS
a) Employees are eligible to enroll in a CalPERS medical plan, Dental and Vision Plan. The City makes a contribution on behalf of each qualified employee (Attachment A). b) Cash Out: Employees who can verify to the City’s satisfaction that: they have group health coverage for medical (including dental and vision), which will remain in effect until the next enrollment date will be eligible for a cash payment of $250.00 per month. Employees who purchase a CalPERS Health Plan and dental and vision coverage, but do not use their entire monthly contribution, may use the remaining funds to purchase benefits other than medical (including dental and vision) coverage. (If a cash payment is taken, it is not included in the employee’s compensation for the CalPERS retirement plan). 8) FLEXIBLE SPENDING ACCOUNTS
The City offers a Healthcare Spending Account with an annual election limit of $2,500 and a Dependent Care Spending Account with annual election limit of $5,000. 9) RETIREMENT
a) CalPERS Retirement Benefits for Classic Members:
i) Miscellaneous Classic Employees: The City participates in the California Public Employees’ Retirement System (PERS). Benefits provided are detailed in separate publications. The City agrees to provide 2.5% at 55 Retirement Plan for eligible classic miscellaneous employees in the Unit and the single-highest-year option.

Miscellaneous classic employees will contribute 13.392% of their reportable salary to PERS.
ii) Safety Classic Employees: The City participates in the California Public Employees Retirement System (PERS). Benefits provided are detailed in separate publications.

The City agrees to provide 3.0% at 50 Retirement Plan for eligible classic Safety employees in the Unit and the single-highest-year option.

Sworn classic employees will contribute 14.974% of their reportable salary to PERS. b) CalPERS PEPRA Employees:
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Item 9 E.

Department Head’s and Chief of Police Compensation and Benefits Plan 3 i) Individuals that have never been a member of any public retirement system prior to January 1, 2013, or
ii) Individuals who moved between retirement systems with more than a six month break in service; and
iii) In compliance with the California Public Employees’ Pension Reform Act of 2013, (PEPRA), new members will receive a Local Miscellaneous benefit formula of 2% @ 62, Sworn will receive a benefit of 2.7% @ 55. Employees will contribute 50% of the normal cost as determined by CalPERS. The employee contribution from pay is on a pre-tax basis pursuant to 414(h)(2). Final compensation, for purposes of calculating the retirement benefit, is calculated on the highest average pensionable compensation earned by a member during a period of 36-consecutive months. This is also referred to as the 3-year average.
10) HOLIDAYS
12 Holidays per calendar year, as follows: New Year’s Day, Martin Luther King, Lincoln’s Birthday, Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Indigenous Peoples Day, Veteran’s Day, Thanksgiving Day, Friday following Thanksgiving, Christmas Day. In addition, City Hall will be closed for one week during the Christmas holidays during which employees are permitted to use vacation, personal holiday or sick leave in order not to lose compensation. 11) INSURANCE
The City provides short-term disability for non-sworn and long-term disability insurance for both as well as term life insurance in the amount of $50,000 12) VEHICLE USE
The Chief of Police will be provided with a vehicle for commuting to and from work within Santa Cruz County and for business purposes.
13) UNIFORM
Chief of Police: City will purchase the initial uniform at a cost not to exceed $2,500. City will pay for reasonable cleaning of the uniform at a cost not to exceed $250/yr. 14) CHIEF OF POLICE RECRUITMENT
The City Council shall approve the recruitment process for the Chief of Police at a City Council meeting as recommended by the City Manager.
16) ONE-TIME BONUS
City Manager is authorized to issue to full-time employees covered by this agreement on June 24, 2021, a one-time of $1500.00 bonus, minus applicable taxes. The one-time bonus shall be paid the first full pay period after approval by the Capitola City Council. 241
Item 9 E.

Department Head’s and Chief of Police Compensation and Benefits Plan 4 Attachment: Exhibit A – Job Classes and Salary Schedule

DEPARTMENT HEADS AND CHIEF OF POLICE

JOB CLASSES AND SALARY SCHEDULE
EFFECTIVE June 27, 2021
Positions covered by Plan
Chief of Police
Director of Public Works
Director of Finance
Community Development Director
a) COLA: Cost of Living Adjustment shall be as follows
Effective June 27,2021, the salary range for each classification shall be increased by

2.6%.

Effective the first full pay period of July 2022, the salary range for each classification shall be increased by 2.75%.

Effective the first full pay period of July 2023, the salary range for each classification shall be increased by 2.75%.
b) Market Salary Adjustment
Effective June 27,2021, the salary range for the following classifications shall be increased by 1.7%
Director of Public Works
Director of Finance
Community Development Director
c) Removal of the Chief of Police Deferred Compensation Effective June 27,2021, the salary range for the Chief of Police classification shall be increased by 8.267% to offset the removal of the 457 Deferred Compensation contribution by the City of Capitola.

Salary Range Effective June 27, 2021, following implementation of the items listed above POSITION Minimum Maximum
Chief of Police $ 12,396 $ 15,808
Department Heads $ 11,177 $ 13,630
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Item 9 E.

Department Head’s and Chief of Police Compensation and Benefits Plan 5 Flexible Spending Arrangement Contribution:

The City contribution for full-time regular employees is:

Effective 6/27/2021 Increase of $50
Effective 7/1/2022 Increase of $25
Employee Only $899.00
Employee + 1 $1,414.00
Employee +2 or more $1,826.00
Effective 7/1/2023 Increase of $25
Employee Only $924.00
Employee + 1 $1,439.00
Employee +2 or more $1,851.00
Employee Only $874.00
Employee + 1 $1,389.00
Employee +2 or more $1,801.00
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Item 9 E.
1 EIGHTH AMENDMENT TO

CITY MANAGER EMPLOYMENT AGREEMENT
This EIGHTH Amendment to City Manager Employment Agreement (“Eighth Amendment”) is entered into on June 27, 2024 with an effective date of June 27, 2024 (the “Effective Date”) by and between the City of Capitola, a municipal corporation (hereinafter referred to as “City”), and Jamie Goldstein, an individual (hereinafter referred to as “Employee”), and is intended to amend that particular City Manager Employment Agreement (the “Original Agreement”) dated July 12, 2010, as previously amended by that certain First Amendment to City Manager Employment Agreement (“First Amendment”) entered into on July 1, 2012, and that certain Second Amendment to City Manager Employment Agreement (“Second Amendment”) entered into on May 14, 2015, and that certain Third Amendment to City Manager Employment Agreement (“Third Amendment”) entered into on December 8, 2016, and that certain Fourth Amendment to City Manager Employment Agreement (“Fourth Amendment”) entered into on June 28, 2018, and that certain Fifth Amendment to City Manager Employment Agreement (“Fifth Amendment”) entered into on June 28, 2020, and that certain Sixth Amendment to City Manager Employment Agreement (“Sixth Amendment”) entered into on December 10, 2020, and that certain Seventh Amendment to City Manager Employment Agreement (“Seventh Amendment” entered into on June 24, 2021 (the Original Agreement, First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment, Sixth Amendment, and Seventh Amendment are hereinafter referred to collectively as the “Agreement”).

Now, therefore City and Employee agree as follows:

1. Section 6—Salary of the Original Agreement is hereby amended to read as follows:

Section 6. Salary

A. Effective June 27, 2024, Employee’s base salary shall be adjusted by

2.63%. Employee’s base monthly salary shall be increased to $20,179.

B. Effective first full pay period in July 2025, Employee’s base salary shall be adjusted by 2.753%. Employee’s base monthly salary shall be increased to $18,159$20,785..

C. Effective first full pay period in July 2026, Employee’s base salary shall be adjusted by 2.753%. Employee’s base monthly salary shall be increased to $18,659$21,408.

D. If the City tax measure passes in November 2024, the Employee’s base salary shall be adjusted by 3.61%. Such increase shall be effective the first pay period after City Council certification of 2024 election results. 244
Item 9 E.
2 E. E. Upon completion 15 continuous years of service with the City, employee's base pay shall be increased by 5%.If the City tax measure on the November 2024 ballot passes, the following longevity schedule will be implemented:
a. 10 years’ continuous service – 5%
b. 15 years’ continuous service – additional 3%, which shall be compounded with the 10 year recognition.
c. 20 years’ continuous service – additional 2%, which shall be compounded with the 15 year recognition.

2. Section 9.C shall hereby be amended to read as follows:

Flexible Spending Arrangement Contributions
The City makes a flexible spending arrangement (“Flex Plan”) contribution on behalf of each qualified employee for medical, dental & vision coverage. For those employees who have selected health coverage through CalPERS, from the monthly contribution set forth herein, effective January 1, 20241, a $15743.00 per month contribution will be paid to PERS for what is sometimes referred to as “employer contribution”. This amount is the minimum amount required by CalPERS, recognizing that state law may increase this minimum from time to time requiring compliance by City. The City’s maximum contribution below is inclusive of the required PEMCHA minimum.

Effective Dates Employee
Only
Employee +1 Employee +2
June 27, 2021, the
monthly maximum
contribution (inclusive
of PEMCHA minimum)
$874 $1,389 $1,801
First full pay period in
July 2022
$899 $1,414 $1,826
First full pay period in
July 2023
$924 $1,439 $1,851
Effective Dates Employee
Only
Employee +1 Employee +2
First full pay period
after ratification
$1,000 $1,850 $2,250
First full pay period in
July 2025
$1,050* $1,925* $2,350*
First Full pay period
in July 2026
$1,100* $2,000* $2,450*
*Contingent on the City tax measure passing in November, 2024.

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Item 9 E.
3 3. Employees who can verify to the City’s satisfaction that: they have group health coverage for medical (including dental and vision), which will remain in effect until the next enrollment date will be eligible for a cash payment of $250.00 per month.

Employees who purchase a CalPERS Health Plan and dental and vision coverage, but do not use their entire monthly contribution, may use the remaining funds to purchase benefits other than medical (including dental and vision) coverage. (If a cash payment is taken, it is not included in the employee’s compensation for the CalPERS retirement plan).

4. The City reserves the option of adding additional health care plans programsas they may become available. to the cafeteria plan, as they may become available.

Except as hereinabove stated, all other terms and conditions of the Agreement remain in full force and effect, are hereby re-stated and are hereby incorporated herein by reference as if fully set forth.

IN WITNESS WHEREOF, the parties have executed this Eighth Amendment to the City Manager Employment Agreement the day and year written above.

Dated: CITY OF CAPITOLA

By: __________________________

Kristen Brown
City of Capitola Mayor
Dated: EMPLOYEE
By: __________________________
Jamie Goldstein
246
Item 9 E.

Capitola City Council
Agenda Report
Meeting: June 27, 2024
From: Finance Department
Subject: Fiscal Year 2024-2025 Budget and Capital Improvement Program
Recommended Action: 1) Adopt a resolution adopting the Fiscal Year 2024-25 City Budget and Capital Improvement Program; and 2) adopt a resolution adopting the associated Salary Schedule and new job descriptions.

Background: The Proposed Fiscal Year (FY) 2024-25 Budget and Planned FY 2025-26 Budget was presented to the City Council at a special meeting on May 16, 2024, at which time the City Council received input from the Finance Advisory Committee (FAC). At the meeting, the City Council requested additional information which was presented at a second special meeting on May 30, 2024, at which time the City Council reviewed updates to the proposed budget and additional recommendations from the FAC and heard public comments.

At the May 30th special meeting, the City Council discussed allocating $30,000 to the McGregor Pump Track while continuing to seek additional donations, as well as designating $5,000 for the Eviction Defense Collaborative, and ultimately directed staff to prepare a resolution to adopt the budget.

Discussion: The Proposed FY 2024-25 Budget estimates the General Fund ending balance on June 30, 2025, of $642,000 which includes a target fund balance of $500,000, $100,000 designated for the Employee Down Payment Assistance Program, and approximately $42,000 undesignated. Pursuant to City Council direction and the recommendation of the FAC, staff has allocated $239,000 of existing general fund resources towards FY 2024-25 City Council Goals and Priorities.

Following City Council direction, the budget includes $60,000 of Restricted TOT revenue programmed to Early Childhood and Youth Programs (ECYP) within the Community Grant Program and $22,000 of Restricted TOT funds to the Recreation Division for ECYP enrichment programs and scholarships:

Additional revisions made to the FY 2024-25 Proposed Budget since the May 30th City Council meeting include:

General Fund
 Increased personnel costs $146,000
o Concluded labor negotiations
o Creation of Community Services & Recreation Department (associated job descriptions attached)
 Increased insurance premiums - $70,000
o Liability increased $78,000 from original estimate, due to overall liability insurance market cost increases
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Item 9 F.
o Workers Comp decreased $8,000 from original estimate
 Proposed Community Services and Recreation Department Formation o Increased Grant / Scholarship Revenue - $36,000 – Soquel Union Elementary School District funding
 Afterschool program- $20,000 and Jr. Guard program - $16,000 – Equity Swim (equal reduction to afterschool registration fees) o Increased Jr. Guard contract services expense - $6,000 – Equity Swim Wharf Special Revenue Fund
 Increased capital outlay - $15,000 – temporary structures & fuel storage The net General Fund impact of the proposed budget revisions is a negative $206,000. The FY 2024-25 Proposed and FY 2025-26 Planned Budgets remain structurally balanced while maintaining essential city services. However, the five-year budget forecast becomes structurally imbalanced upon the sunset of the Measure F Sales Tax in December 2027.

The resolution necessary to adopt the Fiscal Year 2024-25 Budget includes the above appropriations and adjustments (Exhibit A), a General Fund overview (Exhibit B), and an estimate of FY 2024-25 fund balances (Exhibit C). In addition, the FY 2024-25 Proposed Budget is available on the City’s website.

Fiscal Impact: The fiscal impact is shown in the attached General Fund overview and fund balance summary.

Attachments:

1. FY 2024-25 Proposed Budget

2. Proposed resolution adopting FY 2024-25 salary schedule

3. Recreation and Community Services Director & Coordinator Job Descriptions Report Prepared By: Report Prepared By: Jim Malberg, Finance Director Reviewed By: Julia Gautho, City Clerk; Samantha Zutler, City Attorney Approved By: Jamie Goldstein, City Manager
248
Item 9 F.

RESOLUTION NO. _____

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPITOLA
ADOPTING THE 2024-2025 FISCAL YEAR CITY BUDGET AND CAPITAL IMPROVEMENT

PROGRAM BUDGET
WHEREAS, it is necessary to adopt the 2024-2025 Fiscal Year Budget for all City funds and Capital Improvement Program; and
WHEREAS, the City Council has conducted budget study sessions, has heard and considered public comments, and has modified the proposed budget accordingly, and wishes to adopt such budget for the Fiscal Year July 1, 2024, through June 30, 2025; and NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Capitola that the 2024-2025 Fiscal Year Budget and Capital Improvement Program is hereby adopted; and BE IT FURTHER RESOLVED that the Finance Director is directed to enter the budget into the City's accounting records in accordance with appropriate accounting practices, and the City Manager, with the Finance Director's assistance, shall assure compliance therewith.

I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the City Council of the City of Capitola on the 27
th day of June 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
_____________________
Kristen Brown, Mayor
ATTEST:
____________________
Julia Gautho, City Clerk
249
Item 9 F.

FY 2024-25 General Fund Revenues Amount
Afterschool scholarships 20,000 $
Afterschool registration fees (20,000) $
Equity Swim grant 16,000
Total 16,000 $
FY 2024-25 General Fund Expenditures Amount
Personnel costs - citywide 146,000 $
Liability Insurance 78,000 $
Workers Compensation Insurance (8,000)
Contract Services - Jr. Guards 6,000
Total 222,000 $
FY 2024-25 General Fund Net Impact (206,000)
FY 2024-25 Wharf Special Revenue Fund Amount
Capital outlay - structures 15,000 $
Total 15,000 $
Exhibit A
Changes to FY 2024-25 Proposed Budget
250
Item 9 F.

Major Categories FY 21/22 Actual FY 22/23 Actual
FY 23/24
Amended
FY 23/24
Estimated
FY 24/25
Proposed
FY 25/26
Planned
RevenuesTaxes $ 14,514,218 $ 14,709,173 $ 14,643,970 $ 14,521,871 $ 15,106,270 $ 15,632,013 Licenses and permits 718,935 650,188 664,159 695,854 740,409 743,597 Intergovernmental revenues 1,350,001 351,671 89,700 105,700 136,360 108,353 Charges for services 1,894,868 1,817,637 2,187,937 1,912,013 2,322,127 2,352,127 Fines and forfeitures 588,832 566,907 607,500 648,000 607,500 607,500 Use of money & property 31,722 70,527 198,495 183,200 199,195 199,195 Other revenues 891,204 240,413 115,403 135,953 117,206 119,053 Revenues Totals $19,989,781 $18,406,515 $18,507,164 $18,202,591 $19,229,066 $19,761,838 ExpendituresPersonnel $10,273,249 $11,793,722 $11,793,722 $11,766,171 $12,771,739 $13,245,288 Contract services 3,018,482 3,336,801 3,483,368 3,483,368 3,493,981 3,387,956 Training & Memberships 101,501 113,320 178,936 144,018 166,650 166,900 Supplies 671,950 768,110 631,975 779,626 817,050 780,000 Grants and Subsidies 43,650 101,650 125,000 125,000 125,000 125,000 Internal service fund charges 1,196,204 1,444,499 1,617,841 1,617,841 1,523,578 1,715,947 Other financing uses 3,608,343 3,271,324 2,288,788 2,288,788 287,568 287,344 Expenditures Totals $18,913,379 $20,829,427 $20,119,630 $20,204,812 $19,185,566 $19,708,434 Im pact on Fund Balanc
e $ 1,076,402 $ (2,422,912) $ (1,612,466) $ (2,002,221) $43,500 $53,403 Bud
getary Fund Balanc
e $ 5,224,050 $ 2,801,138 $ 988,672 $ 598,917 $ 642,418 $ 695,821 DesignationsEmployee Downpayment $ (100,000) $ (100,000)Infrastructure $ - $ - $ - $ - Revised Budgetary Fund Balance $ 2,601,138 5,224,050 $ 988,672 $ 598,917 $ 542,418 $ 595,821 $ General Fund
Summary
251
Item 9 F.

Estimated
Balance
7/1/2024 Revenues Transfers In Expenditures Transfers Out Estimated
Balance
6/30/2025
General Fund $ $19,229,066 - 598,917 $ 18,897,998 $ 287,568 $ 642,418 $ Designated Reserves
Contingency Reserve $2,364,346 - $ - $ 2,364,346 $
PERS Contingency Reserve 10,000 1,414,275 - - - 1,424,275 Emergency Reserve - 1,631,506 - - 1,631,506
Donations - - - - - -
Facility Reserve - 532,714 - - - 532,714
Total Designated Reserves $ 10,000 5,942,840 $ - $ - $ - $ 5,952,840 $ Debt Service
Pac Cove Lease Financing - 75,204 - - 75,204
Pac Cove Park - 12 87,568 87,568 - 12
Total Debt Service $ - 75,216 $ 87,568 $ 87,568 $ - $ 75,216 $ Capital Improvement Fund $ 1,420,700 1,351,312 $ - $ 2,600,000 $ - $ 172,012 $ Internal Service Funds
Stores $ 27,000 62,676 $ 27,000 $ - $ 62,676 $
Information Techology 275,000 - 177,041 272,000 - 180,041 Equipment Replacement 65,000 - 577,318 140,000 - 502,318 Self-Insurance Liability 760,036 760,036 179,917 - 179,917 Workers' Compensation 403,542 403,542 118,749 - 118,749 Compensated Absences - 330,886 200,000 200,000 - 330,886 Total Internal Service Funds $ 1,530,578 1,446,587 $ 200,000 $ 1,802,578 $ - $ 1,374,587 $ Special Revenue Funds
SLESF-Suppl Law Enforcmnt Svc $ 33,427 $ 104,000 $ 101,500 $ 35,927 TOT Restricted Revenue 21,296 102,842 119,133 5,004
SB1 RMRA 300,518 252,161 252,161 300,518
RTC Streets 60,325 374,000 369,000 65,325
Gas Tax 273,397 274,160 272,000 275,557
Wharf 124,018 20,500 141,250 3,268
General Plan Update and Maint 280,571 114,375 209,375 185,571 Green Building Education 260,555 15,000 57,000 218,555
Public Art 155,236 - 66,500 88,736
Parking Reserve 737 - - - 737
Technology Fee 94,371 14,500 13,250 95,621
PEG-Public Education and Govt. 51,341 16,000 12,000 55,341 Capitola Village/Wharf BIA 33,426 148,600 - 155,900 26,126 CDBG Grants (1,080) 232,335 235,530 (4,275)
CDBG Program Income 39,199 - 10,000 29,199
Library 51,569 1,000 - 52,569
HOME Reuse 780,264 - 4,100 776,164
Housing Trust 241,690 14,000 150,000 105,690
PLHA 5,255 171,825 171,825 5,255
Cap Hsg Succ- Program Income 1,925,511 27,400 1,324,025 628,886 Total Special Revenue Funds $ 1,882,698 4,731,626 $ - $ 3,664,549 $ - $ 2,949,774 $ Prelim. Fund Balance - All Funds $ 24,073,042 14,146,498 $ 287,568 $ 27,052,693 $ 287,568 $ 11,166,846 $ GF Fund Balance Designation (100,000) (100,000)
Total Fund Balance - All Funds 14,046,498 11,066,846
252
Item 9 F.

PROPOSED BUDGET
FISCAL YEAR 2024-25

CITY OF CAPITOLA
Capitola, California
253
Item 9 F.

CITY COUNCIL
Kristen Brown, Mayor
Yvette Brooks, Vice Mayor
Joe Clarke
Margaux Morgan
Alexander Pedersen
Jamie Goldstein, City Manager
Andy Dally, Chief of Police
Jessica Kahn, Public Works Director
Jim Malberg, Finance Director / Treasurer
Katie Herlihy, Community Development Director
Nikki Bryant, Community Services & Recreation Director (Proposed) Chloe Woodmansee, Assistant to the City Manager
Julia Gautho, City Clerk
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Item 9 F.

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Item 9 F.

TABLE OF CONTENTS
Mission Statement ............................................................................................................. 1 City Manager’s Budget Message ..................................................................................... .3 Summary Information ……………………………………………… ............................ …….12 General Fund Revenues ................................................................................................. 23 General Fund Expenditures…………… .......................................................................... 32 Department Overview ................................................................................................... 50 City Council ......................................................................................................... 51 City Attorney ........................................................................................................ 52 City Manager ....................................................................................................... 53 Finance………………………………………………………………………………….57
Police……………………………………………………………………………………59
Public Works…………………………………………………………………………...64
Community Development……………………………………………………………. 71
Proposed Community Services and Recreation………….………………………...73 Capitola Museum ................................................................................................. 75 Capitola Art & Cultural Commission .................................................................... 77 Internal Service Funds .................................................................................................. 78 Stores Fund ......................................................................................................... 80 Information Technology Fund .............................................................................. 81 Equipment Replacement Fund ........................................................................... 82 Self-Insurance Liability Fund ............................................................................... 83 Workers’ Compensation Fund ............................................................................. 84 Compensated Absences Fund ............................................................................ 85 Special Revenue Funds ................................................................................................ 86 Supplemental Law Enforcement Services ........................................................... 89 Restricted Transient Occupancy Tax (TOT) ........................................................ 90 Road Maintenance & Rehabilitation Act (SB1). ................................................... 91 RTC Streets………………………………………………………………………….…92
Gas Tax……………………………………….………………………… ............... .…93
Wharf ………. ...................................................................................................... 94 General Plan Update and Maintenance .............................................................. 95 Green Building Education ................................................................................... 96 Public Art ............................................................................................................. 97 Parking Reserve … ............................................................................................ .98 Technology Fee .................................................................................................. 99 Public Education & Government Cable TV Access ........................................... 100 Capitola Village & Wharf BIA ............................................................................ 101 Community Development Block Grants (CDBG) .............................................. 102 CDBG Program Income. .................................................................................... 103 Library………….………………………………………………………………...…….104
HOME Program Reuse .................................................................................... 105 Housing Trust ................................................................................................... 106 Permanent Local Housing Allocation (PLHA)……………………………………..107 Capitola Housing Successor… .......................................................................... 108

256
Item 9 F.

Reserves……. .............................................................................................................. 109 Emergency Reserves ........................................................................................ 111 Contingency Reserves ...................................................................................... 112 PERS Contingency Reserves ............................................................................ 113 Facility Reserves ............................................................................................... 114 Multi-Year Assets & Obligations ................................................................................ 115 City and Joint Powers Authority ......................................................................... 118 Pacific Cove Lease Financing ........................................................................... 119 Beach and Village Lot II Lease Financing ......................................................... 121 Capital Improvement Program ................................................................................... 123 257
Item 9 F.

MISSION STATEMENT

MISSION
Our mission, as the employees of the City of Capitola, is to provide high quality service for our residents, visitors, businesses & employees.

VISION
Our vision is to be recognized as a model organization that provides excellent and responsive public service that values the people it employs and the community we serve and to always perpetuate a strong work ethic that fosters pride in the work that we do. We will maintain the highest trust and confidence of our City Council and our Community.

VALUES
 We believe in being open, honest and ethical.
 We believe in treating everyone with respect, courtesy and dignity.  We believe in being responsive to all the people we work with and serve, and to act in a timely and sensitive manner.
 We believe in participatory management and teamwork. We are united in our belief to support, respect and encourage individual talents and contributions.  We value innovation and creativity and believe in taking reasonable risks.  We believe in a philosophy of constantly improving the services we provide.  We believe in working with our residents & businesses to prepare for and resolve community issues.
 We believe in the vital nature of planning as a continuing process, to achieve the matching of expectations and resources.

In performing our mission, attaining our vision and adhering to our values, we will first look to our core values: Upholding the Public Trust, Practicing Sound Financial Management and Maintaining a Safe & Healthy Environment.
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Item 9 F.

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Item 9 F.

TO: City Council
FROM: City Manager
SUBJECT: FY 2024-25 Proposed and FY 2025-26 Planned Budget.

CITY MANAGER’S MESSAGE - STATE OF THE CITY
On behalf of City staff, I am pleased to submit the proposed budget for Fiscal Year (FY) 2024-25.

Staff was tasked with developing a budget that continues to deliver the high quality of services the community is accustomed to while also allocating available resources to City Council goals.

The result is a balanced budget that maintains the minimum target general fund balance of more than $500,000 as well as the $100,000 designated for employee downpayment assistance. The proposed budget projects to end the year with a general fund balance of approximately $727,400, contingent on the outcome of ongoing labor negotiations, as designated above.

The fund balance in the General Fund is projected to remain positive for the next fiscal year, however, based on known increases related to CalPERS pension costs and current assumptions regarding inflation, the General Fund will become structurally imbalanced in FY 2027-28 upon the sunset of Measure F. The budget provides ample resources to maintain a high level of services for Capitola residents this coming fiscal year. Nevertheless, the City must also remain focused on the long-term budget picture, which not only includes a great deal of uncertainty around general fund revenues but must continue to address increasing pension costs. The erratic revenue data, expiration of Measure F, and increasing pension costs will likely result in very challenging budgetary decisions for several years. In the coming fiscal year staff will continue to closely monitor general fund revenues, paying extra attention to sales and transient occupancy tax performance, and continue to report to the City Council on a regular basis. Additionally, staff will develop options for Council consideration to balance the near- and longer-term budgets as well as focus on the long-term structural budget issues.

During 2023 the City was heavily impacted by major storm events. Those events resulted in approximately $3.5 million in damage to public infrastructure and significant impacts to private development adjacent to the ocean. In response, the City, State and Federal government declared a state of emergency, which enables the City to utilize Federal Emergency Management Agency (FEMA) and State disaster funding (Cal OES).

Strom damages were categorized into fourteen projects of which FEMA and Cal OES have approved ten for reimbursement totaling $262,000 with the City responsible for matching funds of $7,400. To date, we have received $208,000 with $54,000 still outstanding. 3 260
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The remaining four projects and estimated damage amounts include:
 The Wharf - $1 million – currently under review by FEMA  Noble Gulch/Soquel Park - $89,000
 Hoopers Ramp - $15,000 – seeking mitigation to make ramp more resilient, under review by Cal OES
 Grand Ave. fence - $7,500 – once all projects are approved, a credit for donated resources will be calculated and applied as City matching funds.

The Capitola Mall remains a major funding source for the City, however long-term national and local trends have put significant pressure on existing brick-and-mortar retailers to remain competitive with internet options. The Mall was purchased in 2016 by Merlone Geier Partners, which also acquired the old Sears building in 2018. In FY 2019-20 the new owners initiated a public process, including a public meeting and regional survey of residents to begin evaluating options to redevelop the Mall.

City staff remains actively engaged with Mall ownership to help them navigate the development review processes, however, the pandemic put the project on pause for the near term. Obviously, the long-term fiscal health of the City is closely related to a successful Mall that meets the community’s needs. As the outcome of any potential Mall redevelopment is unknown at this time, the site remains a major opportunity, and challenge, as the City evaluates its long-term fiscal position.

In 2016 voters passed Measure F to extend a temporary quarter percent local sales tax for an additional 10 years. The City is committed to using this funding source to protect the wharf and beach from storms and rising sea levels, maintain police services, and improve sidewalks, parks, and bike safety. Staff anticipates Measure F revenues in FY 2024-25 to slightly increase and the proposed budget continues to implement these commitments.

The first major Measure F projects completed were renovations to the City’s jetty and flume in 2020. Improvements to the jetty and rebuilding the flume that conveys water from the seasonal lagoon to the ocean, allows the City to maintain a world-class beach during the summer. The jetty sustained damages during the Jan. 5, 2023, storm which has been repaired and FEMA has approved reimbursement for those repairs.

The Wharf renovation project is the second important focus for the Measure F funding. Capitola’s Wharf is a historic icon for the City, allowing countless residents and visitors to experience the Monterey Bay Marine Sanctuary in a unique way. The Wharf renovation project will focus on improving the Wharf’s long-term resilience in the face of rising sea levels and powerful winter storms. The City completed environmental review in 2020 and began construction last summer with completion currently targeted for late summer / early fall 2024.

The $10.5 million wharf project is funded with a $3.5 million federal grant, $2.4 million in state grants, $3.0 million of Measure F funding, $400,000 of local fund raising, and $250,000 general fund. In addition, the wharf suffered approximately $1 million in damages during the Jan. 5, 2023, storm. It is anticipated that those costs will be funded with a combination of insurance and FEMA reimbursements.
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BUDGETARY GOALS AND PRINCIPLES
The FY 2024-25 General Fund budget was developed with an emphasis on financial stability and maintaining core programs and services for Capitola residents and visitors. As a first step in developing the Budget, the City Council identified its budget principles as well as key projects and programs for FY 2024-25. Those key projects and programs provide a tool for the City to clearly articulate its priorities to the community and to evaluate performance on an annual basis.

The following tables include the Council’s identified budget principles and a workplan for key projects and programs.

Budget Principles
Fiscal Policy Public Service Public Improvements
Maintain a balanced budget
that ensures ongoing
expenditures can be met with
ongoing revenues
Maintain, and improve upon, the
transparency of City operations and
accessibility of government
Maintain the City's infrastructure
by providing maximum funding for
the pavement management
system

Use one-time revenues for
one-time expenditures
Recognize the high priority the
community places on the public's
safety
Maintain and improve Capitola's
natural resources and sustainable
green programs

Ensure the budget plans for
future cost increases and
attainable revenue estimates
Analyze future service level
increases with their long-term
financial impacts to ensure financial
stability
Ensure maintenance and
cleanliness of City facilities,
sidewalks, and streets
Key Projects/Programs - Workplan
The City Council also proposed General fund allocations to the following projects:

Project Funding
Employee Downpayment Assistance Program $ 100,000
Lifeguard Equipment Storage 25,000
PD Facility Improvements 65,000
Crosswalk Daylighting Citywide 10,000
Citywide digital applications 5,000
Employee engagement 6,000
Elections Outreach 4,000
Translation services 5,000
Website updates 7,000
Portable stage for events 7,000
Art & Cultural 13,000
Total $ 247,000
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Additional FY 2024-25 and ongoing City Council Goals are listed below. Items shaded in gray are not funded or planned for in the FY 2024-25 Proposed Budget.

Department
Assigned   Project Staff Requirement
Potential
FY24/25
General
Fund
Potential
FY24/25
Non‐Gen
Fund
Current
Status
PW Wharf Resiliency Project Very High Funded    In Progress PW Jade Street UA Playground Project Very High       In Design PW Community Center Renovation Project Very High       In Design PW Update Climate Action Plan High    $50,000 Not Started PW Stockton Bridge Debris Mitigation Project High Funded    In Progress PW Cliff Drive Resiliency Project High Funded    In Progress PW 41st Ave Median imprvmts. (Esplanade Park) Medium $50,000    Not Started PW Complete/Additional Peery Bridge Repairs Medium Funded    In Progress PW 2023 FEMA Projects (Stockton Bridge, Noble
Gulch, Hooper's Stairs) Medium Funded    In Progress PW Upper lot eastern access pedestrian path   Medium Funded    Not Started PW Bay Avenue Corridor Traffic Study Medium Funded    In Progress PW Finish the Park at Rispin Mansion Project Medium Funded    Finalizing Contract
PW 41st Ave pavement rehabilitation &
multimodal improvements Medium    1,000,000 Multi‐Year Project PW Complete Streets Safety Assessments Medium Funded    Not Started PW Peery Park Bridge Maintenance Project Medium TBD
PW Storage solutions for Rec ‐ lifeguard
equipment Medium $25,000      Not Started
PW PD facility improvements (lockers, restrooms,
meeting area) Medium $65,000      Not Started
PW Daylighting ‐ Village and elsewhere
(parking/pedestrian requirement) Medium $10,000      In Progress PW Noble Gulch Pipeline Repairs Low Funded    In Progress PW Park Ave. traffic calming Low Funded    In Progress PW 2025 Pavement Maintenance Project Low    $500,000 In Design PW Pump Track Renovation Project Low Funded    Not Started PW Esplanade Park improvements (moved to
41st) Medium Unfunded
($50,000)    Not Started
PW Depot Hill encroachments Very High None    Not Started PW Storage solutions for Rec – softball shed Low $10,000      Not Started PW PD motor shed Low $20,000      Not Started
PW Village Resiliency Study (circulation and sea
level rise ) Very High $500,000      Not Started
Total Potential FY 24/25 Dept Budget
Allocation    $100,000   $1,550,000

Department
Assigned Project Staff Requirement
Potential
FY24/25
General
Fund
Potential
FY24/25
Non‐Gen
Fund
Current
Status
CD Wharf Re‐Envisioning Plan & public outreach
process & temporary structure CDPs Very High $75,000 Not Started CD Complete Housing Element Very High Funded In Progress 6 263
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CD Update 41st Ave. Visioning Plan Very High    $100,000 Not Started CD Create a Housing Rehab Grant/Loan Program Very High    $225,000 Not Started CD Code Update ‐ Housing Element action item High    $65,000 Ongoing CD Create Homebuyer Assistance Program High    $150,000 Not Started CD City Hall Phase 2 ‐ goal setting and
alternatives analysis Very High $67,000    Not Started CD Update tree ordinance High    $30,000 Not Started CD Historical guidelines High $75,000    Not Started Total Potential FY 24/25 Dept Budget
Allocation    $75,000   $540,000

Department
Assigned   Project Staff Requirement
Potential
FY24/25
General
Fund
Potential
FY24/25
Non‐Gen
Fund
Current
Status
CM 5‐Year Strategic Plan Project management Very High Funded    Paused until Fall 2024
CM Employee contract negotiations Very High       In Progress CM Citywide digital applications High $5,000      Not Started CM UA Playground fundraising coordination Medium       In Progress CM Risk Management & HR Policy updates Medium    $2,000 In Progress CM Revenue Tax Measure ‐ Polling Research
Project management and public information   Medium Funded    In Progress CM Update Employee Downpayment Assistance
Program Low Funded    Completed
CM Employee engagement Low $6,000      Ongoing
CM Elections outreach Low $4,000      Not Started
CM Translation services Low $5,000      Not Started
CM Website updates Low $7,000      Not Started
CM Technology updates to improve hybrid
meetings Medium    $25,000 Not Started
CM Increase public outreach and information
services Medium Funded      Budgeted annually
CM Annexation/City Sphere Study Medium Funded    In Progress CM Memorial plaque program update High Unfunded    Not Started Total Potential FY 24/25 Dept Budget
Allocation    $27,000   $2,000

Department
Assigned   Project Staff Requirement
Potential
FY24/25
General
Fund
Potential
FY24/25
Non‐Gen
Fund
Current
Status
Rec Pilot "rapid wedding" event High       Not Started Rec Equity Swim & Public Safety Outreach
Program Medium    $20,000 Ongoing
Rec Implementation of Park Use Permit Program Medium $0      Not Started A&C Public Art Maintenance: 41st Ave. median art
& utility box murals Medium $10,000
Rec Purchase of portable stage for events Low $7,000      Not Started A&C Banners for streetlights Low $3,000      Not Started 7 264
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Rec Lifeguard Equipment (PWC) Low $10,000 Not started Total Potential FY 24/25 Dept Budget
Allocation $20,000 $20,000

Department
Assigned   Project Staff Requirement
Potential
FY24/25
General
Fund
Potential
FY24/25
Non‐Gen
Fund
Current
Status
PD FLOCK Cameras High    $35,000 Not Started
PD   High Surf Thresholds/Response Checklist Medium
PD Electronic/online Police reporting Medium    $25,000 Not Started PD E‐Citations Medium    $10,000 Not Started
Total Potential FY 24/25 Dept Budget
Allocation    $0   $70,000

Department
Assigned   Project Staff Requirement
Potential
FY24/25
General
Fund
Potential
FY24/25
Non‐Gen
Fund
Current
Status
Finance Updates to TOT Ordinance & outreach to
operators High $0      In Progress
Finance City banking RFP Medium $0      In Progress
Finance Implementation of fee study
recommendations Medium $0      Not Started
Total Potential FY 24/25 Dept Budget
Allocation    $0   $0

Total Potential FY 24/25 Budget
Allocations $222,000 $2,112,000
Remaining FY 2023-24 Council Goals
The table below shows the funding allocated to the remaining FY 2023-24 City Council goals:

Project Funding
LAFCO Sphere Study ($15,000 match from LAFCO) $ 30,000
Long-term strategic plan 50,000
Community Center Renovation 1,650,000
41st Ave. Medians (transferred from Esplanade Park midyear) 50,000 Total $ 1,780,000
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OTHER BUGETARY HIGHLIGHTS AND PROPOSED CHANGES
While the budget was largely prepared to maintain core services and keep expenditures at the lowest level possible, several changes are identified in this budget.

New Community Services and Recreation Department
Following extensive community engagement, in 2019 the City adopted a comprehensive five-year strategic plan for the Capitola Recreation Division. Scheduled to conclude next Fiscal Year, this strategic roadmap has undergone refinement and adaptation, particularly in response to the challenges posed by the COVID-19 pandemic.

Prior to the implementation of this strategic plan, the Recreation Division's offerings included:

Adult Classes, the Junior Guard Program, Camp Capitola, a softball league, and facility rentals.

Today, the Division manages these same programs but has significantly expanded its portfolio to include:
• Serving more than 2,000 youth through the Junior Guard, Camp, After School, Parents Night Out and School Break Camps and Equity Swim programs. • Offering over 135 classes to 1,400 youth and adults three times a year • Coordinating all public art projects throughout the City and serving as staff to the Art and Cultural Commission.
• Protecting the public with the City’s USLA-Certified Lifeguard Service through nearly 7,000 public interactions, including 84 rescues in their first season. • Providing over $35,000 in youth scholarship partially funded by Early Childhood and Youth Program funds.
• Maintaining two National Certifications for high quality professional standards in programs.
• Producing over 25 high quality community events annually including the Twilight Concert series, Food Truck Fridays, and single productions such as the Beyond the Flood Benefit Concert.

With these changes, the Division has grown from 3.75 FTE to 5.5 FTE and now supervises over 50 temporary seasonal staff each year. The program revenue remains strong and covers the direct cost of programs. Further the Division now supports numerous equity and accessibility initiatives for the community.

Given the scope and growth of the Division, I am recommending the establishment of the Capitola Community Services and Recreation Department. This proposed change will ensure the sustainability of the current programing by establishing a Director of Community Services and Recreation, developing the proposed organizational chart which delineates a clear chain of command, with program staff reporting to coordinators, who in turn report to the Director.

Furthermore, the integration of the Art & Cultural program Administrative Assistant into the new departmental structure as a Recreation Specialist II aims to centralize operational responsibilities for Art & Cultural events. These structural adjustments are intended to yield long-term benefits by fostering sustainability and efficiency across the Department's program areas. The change will solidify the City’s long-term commitment to providing these services to our residents, maintaining public safety on our beaches, and continuing to build community through affordable, intergenerational and fun activities that support safety and personal well-being.

Youth Funding and Business Group Funding
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With the passage of Measure J in 2018, Capitola became one of the first cities in the state to establish a children’s fund that is supported by a dedicated tax measure. Transient Occupancy Tax (TOT) revenues perform well, and the proposed budget includes an allocation of $65,000 from the children’s fund to support early childhood and youth programming. The budget also includes approximately $74,000 of funding for the Chamber of Commerce and the Village Business Improvement District, also using the restricted Measure J funding.

General Fund Balance
The general fund balance is estimated to end FY 2023-24 to be slightly below the minimum target of $500,000. Additionally, both the Contingency and Emergency reserves are projected to be below their target balance amounts. This is primarily due to increased wharf project costs associated with the storm damage sustained in 2023. The FY 2024-24 Proposed Budget returns the general fund to the $500,000 target balance while maintaining $100,000 for the employee downpayment assistance program. Staff is still awaiting FEMA’s determination of the damage cost reimbursement amount and once those funds are received it is proposed they are used to fund the reserves to their target balance amounts.

Current revenue and expenditure projections show revenues not keeping pace with expenditures, requiring usage of Measure F revenues to structurally balance the budget in the 5-year forecast.

Staff will continue to closely monitor revenues, expenditures, and fund balance throughout FY 2024-25 and will report to Council during the mid-year budget report.

PRIOR YEAR ACCOMPLISHMENTS
In FY 2023-24 the City completed several significant projects, which provided residents and visitors with increased recreational and public art opportunities, while continuing to strengthen public safety and community development activities. Some of the City’s accomplishments include:
 Implemented a new Council Chambers meeting video and audio system .  Began city-wide comprehensive fee study.
 Upgraded Radio System to include a second radio channel for emergency operations and for seasonal lifeguard services.
 Upgraded Axon equipment to include Body Cameras, Tasers, and storage infrastructure.  Conducted multiple bicycle safety and informational presentations at New Brighton Middle School and other locations.
 Introduced an Unmanned Aircraft Systems (UAS) drone program.  Introduced the Flock Safety Program
 Upgraded Village pay stations with a new payment interface.  Establish a computerized maintenance management system  Completed Capitola Road Pavement Rehabilitation Project  Completed Kennedy Drive Sidewalk Project
 Completed Bay/Hill Intersection Pedestrian Safety Quick Build  Substantially completed the Wharf Resiliency and Public Access Project  Substantially completed repairs from the January 2023 storms  Adopt Housing Element update with a focus on public outreach, public hearings, adoptions, and working toward State of California Department of Housing and Community Development certification.
 Administered CDBG Grant of $500,000 to provide food and transit services to lowincome families through local nonprofits. 10 267
Item 9 F.
 Applied for CDBG Grant of $3.3 million for renovation of the Jade Street Community Center.
 Implemented a 5-year Contract for a Regional Bikeshare Program with BCycle.  City operated Lifeguard Service achieved United States Lifesaving Association (USLA) Certification as an Open Water Lifesaving Agency and hosted the California Surf Lifesaving Association (CSLSA) Spring Board of Directors Meeting.  Recertified Camp Capitola as an American Camp Association (ACA) Accredited program and promoted from a 3-year cycle to a 5-year cycle.
 Expanded the learn to swim program for under resourced youth by doubling attendance for Spring 2024 and successfully enrolled Spring 2023 group in the Junior Guard Summer 2023 program.
 Provided, for the first time, School Break Camps and other Family Support programs.  Installed 2024 annual exhibition “Little City Under Canvas” – The 150th Anniversary of Camp Capitola - March 2024.
 Installed three rotating exhibits at the Capitola Library.

CONCLUSION
The development of the annual budget takes a great amount of staff time and effort and must be completed in a compressed timeline. I sincerely appreciate all the department directors and departmental budget liaisons for their contributions. Special recognition is extended to the Finance Department for its efforts in coordinating the budget process and preparing the annual budget document.

As the new fiscal year approaches, I wish to express my thanks and appreciation to the Mayor, and members of the City Council for their leadership and support in planning and conducting the financial operations of the City in a responsible and progressive manner. I know that with continued citizen participation, City Council leadership, and ongoing efforts of dedicated employees, Capitola will continue to be a great place to live, work, and enjoy. 11 268
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SUMMARY INFORMATION
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Budget Process Overview
Each year the City of Capitola prepares an Operating Budget, a Successor Agency Budget, and a fiveyear Capital Improvement Program (CIP) budget. The Operating Budget contains the summary and detail information for revenue and expenditure appropriations for the fiscal year (beginning July 1st and ending June 30th) for several funds as well as a projection for the second fiscal year. The information from the CIP is incorporated, in summary form, in the City’s annual budget. The Successor Agency budget is included in its entirety in the City’s annual budget.

Capitola municipal code (3.200.010 E.) defines a balanced budget as one in which “financing uses including expenditures, inter-fund transfers out, reserves and contingencies should equal financing sources including beginning available fund balance, revenues and inter-fund transfers in.” A key concept in the developmental process for the General Fund Budget revolves around City fiscal policy that current year expenditures are balanced with current year revenue.

The City’s budget process continues throughout the year, with quarterly financial updates published on the Finance Department website and at weekly department head meetings with the City Manager. An outline of the on-going budget process is listed below:

Month Responsibility Budget Function
December Finance Budget Cycle Begins
Finance Finance prepares mid-year calculations
January City Manager / Departments Review accomplishments related to prior year Budget Principles Finance / Departments Provides year-end estimates
Finance Publishes quarterly reports for October - December Finance / City Manager Presents mid-year report to Council and FAC February City Council Establishes Budget Principles
Finance Projects non-departmental revenues and position costs Departments Prepares budget and CIP
March Finance / Departments Continue budget projections Finance Advisory Committee FAC discusses elements of the budget City Manager Reviews departments budget requests
April Finance Adjusts proposed budget based on City Manager review Planning Commission Reviews CIP
Finance Publishes quarterly reports for January - March Finance Advisory Committee Distributes proposed budget
May Finance / City Manager Presents proposed budget and CIP to City Council Finance Advisory Committee Provides recommendations to Council Community Organizations Provides funding request information to Council June City Council Deliberates
City Council Adopts Budget
July Finance Publishes quarterly reports for April - June October Finance Publishes quarterly reports for July - September 13 270
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Financial Policies
Basis of Accounting
The City’s operating budget consists of governmental funds that include the General Fund, Special Revenue Funds, Internal Service Funds, Debt Service Funds and Capital Project Funds for both the City and the Successor Agency. Governmental fund types and agency fund budgets are developed using the modified accrual basis of accounting. This method is consistent with the presentation of the City’s Annual Financial Statements. Under this basis, revenues are estimated for the fiscal year under the condition that they are identifiable and will be collected within sixty (60) days, and sales tax within ninety (90) days, of the close of the fiscal year. Principal and interest on general long-term debt are budgeted as expenditures when due, whereas other expenditures are budgeted for liabilities expected to be incurred during the current period or shortly thereafter.

Level of Budget Control
Both the City and the Successor Agency appropriate (control) the budget at the Budget Unit level. The Budget Unit level is defined as “department, fund, or other organizational unit whose financial activities are accounted for separately.”
Expenditures for the General Fund are considered a Budget Unit at the Department level, with Community Grants controlled at the grantee level. The Successor Agency are considered Budget Units to be at the category level as defined in the budget document.

Budget Adjustments
After the budget is adopted, any supplemental appropriations of fund balance, or budget transfers over $25,000 within a Budget Unit will require Council approval. Budget adjustments that are less than $25,000 and within the same Budget Unit may be approved by the City Manager.

All requests for budget adjustments will include an explanation for the change along with a discussion of fiscal impact. This information will also be documented on a Budget Adjustment Form, which will be reviewed by the Finance Department for fiscal impact, correct account coding, and policy consistency prior to receiving City Council or City Manager approval.

Financial Committees and Boards
The following committees and boards assist the City in the budget review and development process:

Finance Advisory Committee
The Finance Advisory Committee (FAC) works closely with the Finance Director/Treasurer to make recommendations on financial projections or policies identified by the City Council or City Manager. The Committee consists of four Council-appointed members, the Mayor, and a Council Member. The FAC meets several times throughout the year and operates in an advisory capacity with the overall fiscal wellbeing of the City serving as its guiding principle. 14 271
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General Fund Summary
The General Fund balance decreased as planned in FY 2023-24 due to implementation of City Council goals. The projected General Fund FY 2023-24 ending budgetary fund balance totals $600,000. The FY 2024-25 Proposed Budget maintains the General Fund balance at the minimum target of $500,000 while maintaining $100,000 for the employee downpayment assistance program.

The chart below summarizes projected and historical General Fund revenues, expenditures, and fund balances. The table illustrates the effects the improving local economy has had on general fund revenue.

Revenue variances primarily include an increase in sales and property tax revenues.

An overview of district taxes (Measure O and F), reserves, and internal service funds are provided within this summary section.
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Revenue Summary
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Expenditure Summary
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Emergency, PERS Contingency and Contingency Reserves
In 2000 the City adopted Financial Management policies, establishing a fifteen percent Contingency and a ten percent Emergency Reserve Fund. The Contingency Reserve provides a prudent level of financial resources to protect against temporary revenue shortfalls or unanticipated operating costs, and/or to meet short-term cash flow requirements. The Emergency Reserve protects against significant one-time costs, which might arise from major unpredictable emergency events.

As the 2011 pipe failure demonstrated, a sufficient Emergency Reserve Fund is needed to respond quickly to local disasters, as well as sustain low debt ratios. Due to the City’s location in an active geologic region, adjacency to the ocean, and proximity to a major creek and highway, the City chose to also increase the Emergency Reserve funding level to ten percent of operating expenditures. In FY 15/16 the City implemented a PERS Contingency Reserve Fund to ensure future funding availability for potential CalPERS contribution increases.

The City was able to navigate the fiscal impacts associated the COVID-19 Pandemic without utilizing reserve funds, however, the atmospheric river storms on Jan. 5, 2023, has caused the City to utilize funds from the Emergency Reserve to make emergency repairs. Additionally, as the City continues to make storm damage repairs the general fund balance has been drawn down and therefore the FY 2024- 25 Proposed Budget does not include any general fund transfers into the reserves. As storm damage repair costs are reimbursed through FEMA and Cal OES the City anticipates returning reserves to minimum target balances.
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OPEB and PERS Trust Funds
The City has been proactive in planning for future liabilities. The City has established two trust funds for future retirement costs. The two trust funds are the OPEB (Other Post-Employment Benefits) Trust Fund, which is used for retiree health premiums, and the PERS Trust Fund, which is used for future PERS retirement costs.

OPEB Trust Fund:

Balance 6/30/2023 $645,733
FY 2022/23 Contributions 67,050
Estimated Interest Earned 5,000
Estimated Balance 6/30/2024 $717,783
FY 2023/24 Contributions 67,050
Estimated Interest Earned 5,000
Estimated Balance 6/30/2025 $789,833
PERS Trust Fund:

Balance 6/30/2023 $1,187,772
Estimated Interest Earned 10,000
FY 2022/23 Contributions 250,000
Estimated Balance 6/30/2023 $1,447,772
Estimated Interest Earned 10,000
Estimated Balance 6/30/2024 $1,457,772
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General Fund Resources
General Fund resources include reserve funds (Emergency, Contingency, PERS Contingency, Facilities) and Internal Service Funds designated for funding equipment purchases, risk management, workers’ compensation, and compensated absences. The reserve funds have specific purposes and require a vote of the Council to expend.

The following table shows the estimated General Fund available resources:

The corresponding chart and graph illustrate internal service fund expenditures and the impact of transfers on the affected funds.
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Fund Balance Summary
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Fund Balance Summary
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GENERAL FUND REVENUES
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General Fund Revenues
Revenues for the FY 2024-25 General Fund operating budget total $19.2 million, an increase of approximately $661,000 or 3.6 percent above FY 2023-24 estimated revenue. Property tax revenues remain strong as assessed values (basis for property tax levies) continue to increase with changes in ownership and an additional 2% CPI increase per Prop 13 provisions. Staff anticipates sales tax revenue to increase around 2.3% over FY 2023-24 and transient occupancy tax to increase about 1% compared to prior year as hotels, motels, and short-term rentals continue strong operations.

A summary of major revenue changes between the FY 2023-24 adopted and FY 2024-25 proposed budgets is listed below:
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General Revenue Information
The City does not receive General Fund revenues in equal monthly increments. While the City receives some revenue regularly throughout the fiscal year, some is received quarterly or annually.

The variable nature of these revenues results in an uneven cash flow. For example, the City of Capitola’s lowest cash balances occur in April and again in mid-December prior to property tax revenue being received. The City developed a cash flow model to assist with on-going cash flow variability and to identify reserve requirements. While monitoring the City’s cash flow has always been a priority, the need to identify patterns became more critical during the disaster recovery period when reserves were nearly depleted. In FY 2012-13 the City approved increasing the Contingency Reserve balance from 10 percent to 15 percent to assist in covering potential cash flow deficits.

Projections for each source of revenue include a review of historical trends, the local economy, new business development, and pending legislation. Due to significant changes, the City is closely monitoring the following five core revenues, which represent over 80 percent of the General Fund:
 Sales Tax $8,508,650
 Transient Occupancy Tax 2,222,000
 Parking Meters 1,165,940
 Parking Fines 497,500
 Property Taxes 3,277,120
$15,671,210
Additional information related to the five core revenues is detailed within this section. In addition, fiveyear trends for each revenue source are provided in the Revenue Summary.

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Sales Tax
The City of Capitola sales tax consists of one percent Bradley Burns, a quarter percent Capitola District Tax (Measure F), and a permanent quarter percent Capitola District Tax (Measure O). In FY 2023-24 annual sales tax revenue is estimated to be $8.2 million, with approximately $2.1 million in revenues contributed by Measure O, and Measure F.

The Finance Department works closely with HdL, the City’s sales tax consultant, on tax recovery, statistics, and projections. Sales tax projections are based on a combination of “most likely” estimates provided by HdL, internal quarter over quarter analyses, and the impact of one-time events. In FY 2024-25, Bradley Burns sales tax revenue is anticipated to increase by approximately 2.3 percent, or $141,000, above the FY 2023-24 estimated sales tax receipts. The City’s sales tax collections are heavily dependent on the top five generators.

The chart below illustrates sales tax performance including the sunset of Measure D and start of Measure F.
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Transient Occupancy Taxes (TOT)
Hotel tax, also known as the Transient Occupancy Tax (TOT), charges rental accommodation of less than 30 days a 12 percent tax of which 0.75% is restricted for local business groups and early childhood and youth programs. In FY 2023-24 TOT tax generally accounts for approximately 11% of General Fund operating revenues. The City’s TOT revenues come from the following sources:
 Hotels, Motels and Inns
 Other Rentals
o Bed and Breakfasts
o Vacation Rentals
TOT revenues are anticipated to increase 1% during FY 2024-25. For the last several years, hotels have experienced high occupancy rates leaving little room for increased TOT revenues. As the industry slows down little revenues are expected to continue to grow slightly as has been the case for the last couple of years.

The following chart illustrates TOT revenues within the City. Due to Capitola’s seaside location, proximity to regional attractions, and continued signs of economic recovery, the City is continuing efforts to attract another hotel to the area.
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Parking Meters and Parking Fines
In FY 2024-25 parking meter and parking fine revenues are estimated to contribute approximately $1.7 million to the General Fund. Revenue sources include fees collected from the meters and fines resulting from expired meters and improper parking. Factors affecting these revenues include tourism and seasonal trends. The FY 2024-25 proposed budget reflects a $233,000 in parking meter revenue as a result of the parking meter rate increase effective Jan. 1, 2023. During the summer, the City offers shuttle bus service from the parking lots to the Village, beach, and Capitola Wharf. Projected revenues for each location are estimated below:

The following chart illustrates parking meter revenue and parking citation revenue trends within the City. Overall, the revenue trend reflects the previously mentioned parking meter rate increase while showing citation revenue remaining flat. In FY 2015/16 the City implemented 3-hour parking in the Village. The change has had a positive impact on meter revenue while decreasing citations. 28 285
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Property Taxes
Property Taxes, an Ad Valorem Tax imposed on real property and tangible personal property, are levied at one percent of the assessed value of the property. The City receives 7.47 percent of each one percent, or 75 cents per $1,000 of assessed property value.

In FY 2024-25 property tax revenue is estimated to be $3.3 million, representing a six percent increase over the estimated collection amount from FY 2023-24. The City’s collections are slightly higher than the information from the County Auditor-Controller’s Office due to the increased cost of housing and a robust housing market.

In the FY 2024-25 proposed budget, base property tax revenues are projected to increase approximately six percent. The City based the projection on information from the Auditor-Controller’s Office, historical trends, and a review of the current housing market. A growth factor of six percent of the assessed property valuation was used to estimate FY 2024-25 property tax revenue.

Property taxes are received based on the following distribution schedule:
 December: 50%
 April: 45%
 June: 5%
Property Taxes in-lieu-of Vehicle License Fees
Property Tax in-lieu-of Vehicle License Fee revenue has increased an average of six percent per year over the last several years. This increase continues to be consistent with the rising property values outlined by the Auditor-Controller’s Office. Due to the relatively flat history associated with these revenues, conservative estimates of four percent have been applied to the upcoming fiscal years. 29 286
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Revenue Summary
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GENERAL FUND EXPENDITURES
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General Fund Expenditures
The total FY 2024-25 General Fund expenditure budget proposes a decrease of approximately $1.2 million from the FY 2023-24 Amended Budget as existing resources are programmed towards City Council Goals. Increases have been programed in most major categories as inflation continues to impact City expenditures. Key differences between the two fiscal years include:
o Total personnel costs (salary and benefits) are estimated to increase $978,000 from the FY 2023-24 Amended Budget due to significant increases in the annual Cal PERS Unfunded Actuarial Liability payment, cost of living adjustments, increased employee health care contributions, scheduled step increases, and a proposed reorganization of the Recreation Division. o Salary costs are estimated to be $407,000 higher, however labor negotiations between the City and bargaining units are still on going.
o Salary – Seasonal/Temp increased $41,000 as summer recreations programs remain at full capacity.
o Overtime is anticipated to decrease $92,000 primarily in the Police. This past year was higher than normal due to several felony crime investigations and winter storms. o Specialty Pay – increased $88,000 in part due to more bilingual employees serving the public.
o Benefits – increased $533,000, as a result of labor negotiations between the City and labor bargaining units.
 Contract services remained the same as the prior year.

The following chart provides an overview of expenditures for FY 2021-22 to FY 2025-26. A complete description of major changes will follow in the related expenditure detail pages. 33 290
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The following chart provides an overview of expenditure trends, excluding transfers. Expenditures are trending down as we complete several City Council goals utilizing one-time funding.

A chart displaying the percentage of expenditures by category is also provided for reference. Personnel costs are estimated to increase $853,000 from the prior fiscal year causing the ratio of personnel services to total expenditures to increase from 66 percent to 68 percent. Other notable changes were in contract services, which decreased from 21.5 percent to 18.5 percent, and internal service charges, which decreased from 9.4 percent to 7.8 percent.
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General Fund Department Expenditures
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General Fund Expenditures

SALARIES & BENEFITS
All positions listed in the General Fund are fully funded with full benefit costing. Fully benefited positions are budgeted at their current step plus an assumption that they will move to the next step unless they are already at the top step of their classification. Specialty pays are budgeted as a separate line item.

Positions budgeted for in FY 2024-25 include the reorganization of the Recreation Division into the Proposed Community Services and Recreation Department while maintaining 68.5 full-time employees.

The table below summarizes the total FTE count by department, and the following page provides a detailed summary of the staffing budget changes.
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General Fund Expenditures

SALARIES & BENEFITS
City services are primarily staff delivered; therefore, staffing is the most significant expenditure. The FY 2024-25 proposed budget estimated staffing costs total $12.6 million. This represents a 7% increase from the prior year’s amended budget. This is primarily due to significant increases in the Cal PERS Unfunded Actuarial Liability annual payment, estimated cost of living adjustments, scheduled step increases, and a reorganization of the recreation division.
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General Fund Expenditures
Salaries & Benefits - Salary Assumptions
There are five bargaining groups in the City. Management employees are hired by the City Manager pursuant to a City Council approved compensation plan. Hourly employees are not included in any of these groups and are not represented by a union. The following table lists the different groups and the start and end dates of their current agreements.

Group Current Agreement Expiration Date
Assoc. of Capitola Employees/Gen. Govt. 6/23/2024 6/30/2027 Confidential 6/23/2024 6/30/2027
Mid-Management 7/7/2024 6/30/2027
Police Captains 7/7/2024 6/30/2027
Police Officers Association (POA) 6/7/2021 6/30/2027
Overtime
The following table provides the details for the overtime budget. The overtime budget for the Police Department increases this year in anticipation of additional special events.

Specialty Pay
The FY 2024-25 proposed budget includes the following specialty pays in the calculation of staffing costs, which are also included in overtime calculations: education, longevity, bilingual, motorcycle, detective pay, senior officer, canine, and shift differential pay.

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General Fund Expenditures
Salaries & Benefits – Retirement Assumptions
Benefits – Post Retirement Medical Benefit
The City of Capitola contributes the minimum amount toward retired employees’ health insurance premiums in accordance with Government Code Section 22892 of the Public Employees’ Medical and Hospital Care Act (PEMHCA). This expenditure is accounted for in the City Manager’s personnel department budget. Below is a table showing the PEMHCA minimum over the last 10 years.  January 1, 2015 $122
 January 1, 2016 $125
 January 1, 2017 $128
 January 1, 2018 $133
 January 1, 2019 $136
 January 1, 2020 $139
 January 1, 2021 $143
 January 1, 2022 $149
 January 1, 2023 $151
 January 1, 2024 $157
Benefits – Public Employee Retirement System (PERS)
The City offers various defined benefit retirement plans to safety and miscellaneous employees. These retirement plans are administered by the California Public Employee Retirement System (“CalPERS” or “PERS”). The safety plan benefit formula is 3% @ 50, and the miscellaneous plan is 2.5% @ 55 for “classic” PERS members. For employees hired after January 1, 2013, who are subject to the Public Employees’ Pension Reform Act (PEPRA), the safety benefit formula is 2.7% @ 57, and the miscellaneous plan is 2% @ 62. A CalPERS member becomes eligible for retirement benefits upon reaching the age of 50 with at least 5 years of service credit (total service across all CalPERS employers).

The City’s retirement costs are defined as a percentage of payroll, along with a fixed dollar amount to address the City’s Unfunded Actuarial Liability (UAL), which is actuarially determined annually by CalPERS. The UAL in FY 2023-24 was $2,139,191 and is increasing to $2,552,124 (19.3%) in FY 2024-25. The most recent CalPERS actuarial reports estimate the UAL through FY 2029-30 at an amount of $3,505,000 which equates to an increase of approximately 137% over ten years from FY 2019-20.

PERS Rates. The FY 2024-25 PERS total rate for classic safety members is 36.3%, with employees paying 15% and the city 21.3%. Safety PEPRA members are responsible for 13.75% and the city pays

13.76%. For classic miscellaneous members, the total contribution rate is 22.1%, with employees paying 13.4% and the city 8.7%. Miscellaneous PEPRA employees pay 7.75% and the city pays 7.87%.

The FY 2023-24 PERS total rate for classic safety members was 36.1%, with employees paying 15% and the city 21.1%. Safety PEPRA members are responsible for 13.0% and the city pays 14.25%. For classic miscellaneous members, the total contribution rate was 20.0%, with employees paying 13.4% and the city 8.6%. Miscellaneous PEPRA employees pay 6.75% and the city pays 8.7%.

Public Employees’ Pension Reform Act (PEPRA). On September 12, 2012, Governor Brown signed the California Public Employees' Pension Reform Act of 2013 (PEPRA) into law. PEPRA became effective on January 1, 2013, and requires all employees who are not previously members of the PERS reciprocal system to be placed in an alternate retirement plan. The City’s PEPRA plan for Safety employees is 2.7% at 57 and 2% at 62 for Miscellaneous employees. This new plan requires that the City and plan members contribute an equivalent share of retirement costs. The rates for public safety and miscellaneous employees are 13.75% and 7.75%, respectively. 39 296
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Retirement Costs Summary
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General Fund Expenditures - Contract Services (5 pages) 41 298
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Community Based Social Service Providers
Community Based Social Service Providers are funded by the General Fund and restricted Transient Occupancy Tax (TOT) revenue. Each year a determination is made regarding funds available and allocation. Due to COVID-19 the Community Grant program continues to be funded in FY 2024-25 with a combination of general fund, restricted TOT, and federal grants. The table below shows the general fund and restricted TOT funding while the federal grant funding is highlighted in the Community Development Block Grant Special Revenue funds.
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GENERAL FUND EXPENDITURES

SUPPLIES
The following table provides a history of the supply budgets by department. Additional information is available in the General Fund Department section.

TRAINING AND MEMBERSHIPS
The following table provides a history of the training and memberships budgets by department. Refer to the General Fund Department section for additional information. 48 305
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INTERNAL SERVICES
Internal Service Funds finance special activities and services performed by one City department for another on a cost and reimbursement basis. These funds share costs, designate targeted reserves levels, and allocate costs to all departments benefiting from the activities and services. The methodology for cost allocation for each Internal Service Fund is described in the Internal Service Fund section.

The FY 2024-25 proposed budget provides funding for increased insurance premiums as well as equipment purchases for equipment funded in prior years.

GENERAL FUND TRANSFERS
General Fund Transfers move funds from the General Fund to a specific fund for a designated purpose.

The CIP is detailed in a separate section and debt issuances are detailed in the Multi-Year Assets and Obligations section. Below is a summary of the transfers from the General Fund to other funds/reserves. 49 306
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DEPARTMENTAL BUDGETS

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CITY COUNCIL

GENERAL GOVERNMENT

DEPARTMENT PURPOSE
The City Council is composed of five generally elected Council Members, serving four-year staggered terms. Council members select a Mayor and Vice Mayor annually. In 2002, the voters approved a consecutive term limit of two terms for Council Members. The City's Municipal elections are held the first Tuesday of November in even-numbered years. The Council meets regularly twice monthly, on the second and fourth Thursday.

The City Council establishes local law, sets policy, approves programs, allocates funds, and provides direction to the City Manager and staff to implement its policy. Council also appoints members to local and regional committees, commissions, and boards. Capitola is a General Law City, organized under the general laws of the state. Local laws are established by ordinance, compiled in the Municipal Code, and enforceable by the City. Other directives and policies of the City Council are implemented through Council Resolutions and recorded in Council Minutes.

ESTABLISHED PRINCIPLES OF THE CITY
 Fiscal Policy – practice sound financial management
 Public Service – uphold the public trust.
 Public Improvement – maintain a safe and healthy environment.

FISCAL YEAR ACCOMPLISHMENTS – 2023-24
 Balanced budget while using resources for public improvements.  Provided services, staff, and equipment to ensure public safety and trust.  Approved projects and programs to maintain and enhance the quality of life in Capitola.

FISCAL YEAR GOALS – 2024-25 and 2025-26
 Provide services, staff, and equipment to ensure public safety and trust.  Develop projects and programs to maintain and enhance the quality of life in Capitola.  Finalize plans and begin construction for the Capitola Wharf Resiliency and Public Access Project (using Measure F funds)
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CITY ATTORNEY

GENERAL GOVERNMENT

DEPARTMENT PURPOSE
The City Attorney represents the City as primary Counsel in all legal matters. The City Attorney is appointed by the City Council. The City Attorney provides legal analysis and advice on interpretation and application of municipal code, State law, and Federal law, drafting legal documents, and laborrelated issues. The City Attorney is currently a contract position with the firm of Burke, Williams & Sorensen

KEY CHANGES
Samantha Zutler of Burke, Williams & Sorensen is Capitola City Attorney FISCAL YEAR ACCOMPLISHMENTS – 2023-24
 Advised City on matters associated with pending legal actions.  Advised City on legal matters related to City policies and procedures.  Represented the City in litigation.
 Assisted City in labor negotiations.

FISCAL YEAR GOALS – 2024-25 and 2025-26

FISCAL POLICY
 Advise Council on potential and pending litigation.
 Assist and advise staff on contracts, labor relations, and other legal assessments.  Resolve existing litigation.
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CITY MANAGER SUMMARY

GENERAL GOVERNMENT

MISSION STATEMENT
The City Manager serves the Council and the Community by bringing together resources to meet City needs, provide excellent customer service, and prioritize available resources.

DEPARTMENT PURPOSE
The City of Capitola is a Council-Manager form of government, under which the City Council appoints a City Manager who serves as the City's chief administrative officer and is responsible for implementing Council policies.

The City Manager Department is responsible for the overall administration of City objectives. The City Manager is the lead position within the City administrative structure and is appointed by the Council.

The City Manager provides administrative direction and leadership to all City departments, and directly oversees Human Resources, City Clerk, Information Systems, and the Assistant to the City Manager.

KEY CHANGES
Recruited and hired new a new City Clerk, Deputy City Clerk, increased HR Analyst to full-time and promoted previous City Clerk to Assistant to the City Manager.

FISCAL YEAR 2023-24 ACCOMPLISHMENTS
 Implemented a new Council Chambers meeting video and audio system .  Advised and informed the City Council on policy and action matters.  Worked to improve risk management and reduce potential liability.

FISCAL YEAR GOALS – 2023-24 and 2024-25

FISCAL POLICY
 Evaluate potential revenue ballot measures.
 Work with Capitola Mall to improve the mall facility.  Continue to work to create a safer work environment and reduce employee injuries.  Review and prioritize City services.
 Support economic development.
 Seek opportunities to partner with other agencies for greater outcome or savings.

PUBLIC SERVICE
 Encourage and improve citizen participation and communication by increasing the availability of Spanish language city resources; update and improve the City website.  Ensure programs in place to respond to public and private development projects.  Continue to improve public meeting access.
 Continue efforts to increase transparency, with the website, public records, and outreach.

Continue digitization efforts to improve transparency.
 Use dedicated children's fund for youth programming.

PUBLIC IMPROVEMENT
 Work to develop projects to protect and enhance valuable City resources.; including partnerships with outside agencies, such as the Friends of County Parks and the Capitola Wharf Enhancement Team, to facilitate the development of public spaces like Jade Street Park and the Wharf.
 Open Rispin Park to the public.
 Continue increased street and facility maintenance through use of Measure D resources. 53 310
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CITY MANAGER ADMINISTRATION

GENERAL GOVERNMENT

MISSION STATEMENT
The mission of the City Manager’s Office is to ensure that all City programs and services are provided effectively and efficiently.

DEPARTMENT PURPOSE
The purpose of this division is to implement the policies of the City Council and provide leadership and direction to the city departments. Core services of the City Manager’s Office are administrative direction and leadership for City departments, programs, and services to ensure the community receives a high level of service.

In addition, the City Manager’s administrative arm oversees the Council agenda process, oversees public records, provides staff support to the Art and Cultural Commission and Library Advisory Commission, manages sustainability programs, manages the Community Grant process, and oversees Personnel, Information Systems, and the Historical Museum. The department maintains solid waste and recycling programs, management of franchise agreements, and human resources programs including risk management, employee training, safety programs, and benefits administration. 55 312
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CITY MANAGER PERSONNEL

GENERAL GOVERNMENT

MISSION STATEMENT
To provide excellent internal and external customer service and assist departments in recruiting and retaining exceptional employees.

DEPARTMENT PURPOSE
Personnel functions are the responsibility of the City Manager. Functions include employee recruitment and selection, benefits coordination, insurance and retirement programs, labor negotiations, compensation plan maintenance, regulatory training, and risk management. 56 313
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FINANCE

GENERAL GOVERNMENT

MISSION STATEMENT
The Finance Department’s mission is to present timely, accurate and transparent financial information to the public while providing City Management with financial data to facilitate informed decision-making on the allocation of City resources. The department strives to provide excellent customer service to the public, elected officials, and all departments within the City.

DEPARTMENT PURPOSE
The Finance Department oversees all financial transactions of the City to ensure legal and accounting policies are adhered to. The Department maintains all City funds and oversees budget development, the Comprehensive Annual Financial Report, accounts payable, payroll, accounts receivable, cash receipts, banking, business licenses, and transient occupancy tax. The Department provides quarterly and annual financial reports to the City Council and the public.

FISCAL YEAR ACCOMPLISHMENTS – 2023-24
 Continued TOT vacation rental audit and enforcement program.  Entered 5-year agreement with new CPA firm for annual audits.  Began city-wide comprehensive fee study.
 Issued RFP for Banking Services.
 Provided analytical support to operations departments.

FISCAL YEAR GOALS – 2024-25 and 2025-26
 Prepare and maintain a balanced budget.
 Plan for and meet future PERS increases.
 Implement new Fee Schedule.
 Work with the Finance Advisory Committee to identify future revenue opportunities and address increasing costs.
 Meet regulatory financial reporting requirements and provide reports on the City website.  Develop long term financial plan for Measure F
 Continue partnerships with departments to maintain financial accountability and transparency.  Continue to improve City financial transparency to the public. 57 314
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POLICE SUMMARY
POLICE

MISSION STATEMENT
The Capitola Police Department prides itself in providing the highest level of safety and service to enhance the quality of life of our community through professional, engaged, and empowered employees.

VISION STATEMENT
The Capitola Police Department is comprised of professional and dedicated members who strive to demonstrate high character, fairness, compassion, and the non-biased delivery of policing services.

CORE VALUES
We pride ourselves on representing the City of Capitola and providing policing services based upon these values:
 Human Life - Nothing is more valuable than the preservation of life.  Loyalty - Simple loyalty to our best convictions
 Honesty - The essence of moral character
 Respect - Our success is measured by how we treat others.  Integrity - Values, and morals that represent our sincerity and commitment.  Diversity - We value differences.
 Ethics - Our commitment to principles that govern behavior.

FISCAL YEAR ACCOMPLISHMENTS – 2023-24
 Upgraded Radio System to include a second radio channel for emergency operations and for seasonal lifeguard services.
 Upgraded Axon equipment to include Body Cameras, Tasers, and storage infrastructure.  Conducted multiple bicycle safety and informational presentations at New Brighton Middle School and other locations.
 Replaced Lidar/Radar units for traffic enforcement efforts.  Replaced administration vehicle with EV vehicle and explored other hybrid models for fleet replacement.
 Introduced an Unmanned Aircraft Systems (UAS) drone program.  Introduced ABLE Program
 Introduced the Flock Safety Program
FISCAL YEAR GOALS – 2024-25 and 2025-26
 Purchase two patrol vehicles.
 PD locker room bathroom update/upgrade. ($75,000 provided by Council)  Electronic Citations for patrol personnel.
 Develop a program to enable a citizen to file police reports online.  Examine alternative site for PD backup yellow channel.  Research upgrades options for infrastructure, to include possible new antenna site and develop short-term plan pending larger County-wide radio project.  Bicycle and pedestrian safety will remain our traffic goals for 2024/25. Seek grant opportunities to support our traffic goals, including speed and DUI grant opportunities. 59 316
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LAW ENFORCEMENT
POLICE
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PARKING ENFORCEMENT
POLICE

DEPARTMENT PURPOSE
The Parking Enforcement Unit enforces California Vehicle Code regulations and Municipal Parking Ordinances to minimize parking problems, reduce traffic congestion, and maximize access to parking by visitors and residents alike.

FISCAL YEAR ACCOMPLISHMENTS – 2023-24
 Replaced nine pay stations.
 Upgraded Village pay stations with a new payment interface.  Purchased hybrid truck for parking enforcement vehicle.

FISCAL YEAR GOALS – 2024-25 and 2025-26
 Maintain existing pay stations.
 Begin upgrading pay stations with a new payment interface.  Explore hybrid vehicle options for parking enforcement vehicles. 62 319
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ANIMAL SERVICES
POLICE

DEPARTMENT PURPOSE
The Animal Services Unit (ASU) promotes and protects public safety and animal care through sheltering, pet placement programs, education, and animal law enforcement. Our purpose is to provide responsive, efficient, and quality animal control services that preserve and protect the public and promote animal safety.
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PUBLIC WORKS SUMMARY

PUBLIC WORKS

MISSION STATEMENT
The Capitola Department of Public Works, through our valued employees, develops, maintains, and operates the City’s infrastructure and natural resources and provides environmental stewardship for the benefit of our residents, businesses, and visitors.

DEPARTMENT PURPOSE
Public Works stewards Capitola’s public infrastructure. We are dedicated to providing safe, functional and sustainable systems improving the quality of life for the residents, businesses and visitors of the City of Capitola in a responsive and cost-effective manner and in accordance with local, state and federal regulations.

To provide this stewardship, the department has three divisions.

The Maintenance Division is responsible for the day-to-day operations, maintenance, and repair of the public infrastructure and facilities including streets and medians, streetlights and traffic signals, street trees, sidewalks and pathways, parks, public buildings, and maintains the City's fleet of vehicles and equipment.

The Engineering Division designs and oversees the construction of all capital improvement projects for the City’s public infrastructure systems and public buildings/facilities; prepares technical studies/reports; regulates construction activities within the public right-of-way by private entities and utility companies; and maintains infrastructure records. The Engineering Division also works closely with the Community Development Department and Building Division to perform plan review and inspection services of tract/parcel maps for subdivisions and grading and drainage improvements on private property; provides technical support to the Public Works Maintenance Division.

The Environmental Division provides environmental support services to Public Works and other City Departments to ensure compliance with federal, state, and local environmental laws, regulations, and policies. The Environmental Division also manages the City's Storm Water Management Program and Solid Waste Franchise Agreement which includes industrial, construction, and municipal activities and operations within the City; staffs the Commission on the Environment.

FISCAL YEAR ACCOMPLISHMENTS – 2023-24
 Establish a computerized maintenance management system  Completed Capitola Road Pavement Rehabilitation Project  Completed Kennedy Drive Sidewalk Project
 Completed Bay/Hill Intersection Pedestrian Safety Quick Build  Substantially completed the Wharf Resiliency and Public Access Project  Substantially completed repairs from the January 2023 storms 64 321
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FISCAL YEAR GOALS – 2024-25 and 2025-26
 Compete Park at Rispin Mansion Project
 Complete construction of Community Center Renovation Project  Complete design and construction of Treasure Cove Playground  Complete design of Cliff Drive Resiliency Project
 Update City Climate Action Plan
 Continue to move 15 additional funded CIP projects toward completion 65 322
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STREETS

PUBLIC WORKS
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STORMWATER

PUBLIC WORKS
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FACILITIES

PUBLIC WORKS
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FLEET

PUBLIC WORKS
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PARKS

PUBLIC WORKS

MISSION STATEMENT
The Public Works Parks Department is committed to developing and maintaining the City parks and other landscaped areas in such a manner as to allow all members of our community to enjoy these jewels. Using professional staff and technologies to maintain top rated playing surfaces, beautiful landscaping and safe facilities are top priorities for this department.

DEPARTMENT PURPOSE
To maintain City parks and landscaped areas throughout the City in a safe manner while conserving water and other resources.

KEY CHANGES
Maintaining the status quo.
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COMMUNITY DEVELOPMENT

MISSION STATEMENT
The Community Development Department (CDD) promotes safe and orderly development which provides economic vitality while preserving Capitola’s unique cultural and historic character. The Department is dedicated to providing responsive, high-quality services and programs which enhance the quality of life for the City’s residents, businesses, and visitors.

DEPARTMENT PURPOSE
The CDD administers the City's land use policies and standards adopted by the City Council including Zoning Code (Title 17), Housing and Development Administration (Title 18), General Plan, Housing Element, Local Coastal Program, and other regulations. The Department’s key functions include review of development applications, application of CEQA, maintenance of aforementioned regulatory and longrange planning documents, building plan check and inspection services, building and zoning code compliance, and administration of the affordable housing programs. The Department manages grants related to community planning, housing, economic development, and public services through regional, state, and federal opportunities. The Department provides staff support to the City Council, Planning Commission, and the Design and Development Review Committee.

KEY CHANGES
During the past fiscal year, the Department ended the shared Building Official contract with Scotts Valley. Training is a focus in the FY2024-25 within the Building Department.

FISCAL YEAR ACCOMPLISHMENTS – FY 2023-24
 Adopt Housing Element update with a focus on public outreach, public hearings, adoptions, and working toward State of California Department of Housing and Community Development certification. .
 Administered CDBG Grant of $500,000 for to provide food and transit services to low-income families through local nonprofits.
 Applied for CDBG Grant of $3.3 million for renovation of the Jade Street Community Center.  Implemented a 5-year Contract for a Regional Bikeshare Program with BCycle.  Awarded Permanent Local Housing Allocation Grant ($630,557) and utilized first year of funding toward region homeless efforts.
 Planning approval of a 52 unit 100% affordable housing development at 1098 38th Avenue.  Building permit for a 36-unit 100% affordable housing development at 4401 Capitola Road.  120 planning permit applications submitted July 1, 2023, through May 1, 2024.  286 building permit applications submitted July 1, 2023, through May 1, 2024.

FISCAL YEAR GOALS – 2024-25 and 2025-26
 Certification of the 6th Cycle Housing Element by State of California Department of Housing and Community Development.
 Issue building permits and begin construction of new hotel at 720 Hill Street and 52-unit affordable housing development at 1098 38th Avenue.
 Oversee construction and occupancy of 36-unit 100% affordable housing development at 4401 Capitola Road.
 Plan for long-term use of the Capitola Wharf with a focus on public engagement, environment, and climate resiliency.
 Initiate economic development strategy study for the 41st Avenue corridor.  Explore public/private partnership opportunities toward redevelopment of the Capitola Mall.  Administer grants to support Capitola residents with food services (CDBG) and housing production (PLHA).
 Provide training opportunities for all staff to encourage growth, job satisfaction, and longevity. 71 328
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PROPOSED COMMUNITY SERVICES AND RECREATION

CULTURE & LEISURE

MISSION
The City of Capitola Proposed Community Serviced and Recreation Departments mission is to enhance recreation, healthy lifestyles, and quality of life for Capitola and the surrounding neighbors through affordable and fun activities and opportunities. The Department has a commitment to excellence, safety and continually strives to improve its programs, procedures, and services, to best meet the needs and interests of the community.

DEPARTMENT PURPOSE
The Proposed Community Services and Recreation Department manages recreation and leisure services offered to residents of Capitola and the broader community as well as the USLA Certified Lifeguard Division which protects beach goers in the Capitola Beach area during from Memorial Day Weekend to the end of October. These services include City-staffed programs such as Junior Lifeguards, Camp Capitola, and community events, as well as over 500 classes offered by contracted instructors. Youth Programs have enrollment of over 2,000 children annually. The Department also manages the Capitola Community Center, Jade Street Park, and Monterey Park.

The Proposed Community Services and Recreation Department represents the City through Lifeguards at the beach, programs offered, class instructors selected, seasonal youth hired and trained, and condition of facilities. The department programs provide job training for young people through the Junior Lifeguard Captains Corps and Camp Capitola Junior Leader Program and provide scholarships for under resourced youth.

KEY CHANGES
Following extensive community engagement, in 2019 the City adopted a comprehensive five-year strategic plan for the Capitola Recreation Division. The division has grown from 3.75 FTE to 5.5 FTE and now supervises over 50 temporary seasonal staff each year. The program revenue remains strong and covers the direct cost of programs. Further the Division now supports numerous equity and accessibility initiatives for the community. Given the scope and growth of the Division and final key initiative of the strategic plan, the establishment of the Capitola Community Services and Recreation Department is proposed for the upcoming budget.

FISCAL YEAR ACCOMPLISHMENTS – 2023-24
 City operated Lifeguard Service achieved United States Lifesaving Association (USLA) Certification as an Open Water Lifesaving Agency and hosted the California Surf Lifesaving Association (CSLSA) Spring Board of Directors Meeting.
 Recertified Camp Capitola as an American Camp Association (ACA) Accredited program and promoted from a 3-year cycle to a 5-year cycle.
 Expanded the learn to swim program for under resourced youth by doubling attendance for Spring 2024 and successfully enrolled Spring 2023 group in the Junior Guard Summer 2023 program.
 Hosted a community event for JoJo’s 80th Birthday in collaboration with other City Departments and community members.
 Provided, for the first time, School Break Camps and other Family Support programs.  Integrated Art & Cultural and Recreation program staff for efficiency in implementing events.  Coordinated a County wide public advertising for July IS Park & Rec Month Campaign FISCAL YEAR GOALS – 2024-25 and 2025-26
 Continue to provide quality recreation services with minimal program interruption during displacement due to the Community Center and Treasure Cove at Jade St Playground remodel
 Implement a Park Space Reservation Permit for small groups to host gatherings such as birthday parties in City Parks.
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 Provide programming on the Wharf during the temporary use phase of the project.  Engage Middle School age youth in ocean safety program during the school year.  Further develop county recreation agency partnerships to provide regional programs, Park Rx, Family Fun Day and other programs.
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Item 9 F.

MUSEUM

CULTURE & LEISURE

MISSION
The Capitola Historical Museum preserves and promotes the history of Capitola through creating exhibitions, maintaining a collection of historic photographs and artifacts, conducting oral histories, and participating in special events.

DEPARTMENT PURPOSE
To promote, through the establishment and maintenance of a museum and allied projects, a program that will bring a better understanding and appreciation by the Capitola community of its history, architecture, culture, technology, and its creative and natural environments.

FISCAL YEAR ACCOMPLISHMENTS – 2023-24
 Continued 2023 exhibition “Capitola – Signs of the Times” – July to December 2023.  Installed 2024 annual exhibition “Little City Under Canvas” – The 150th Anniversary of Camp Capitola - March 2024.
 Installed three rotating exhibits at the Capitola Library.  Community Involvement:
o Coordinated museum participation in 2023 Car Show, 2023 Art & Wine Festival (9& 10), 2023 Beach Festival, Plein Air Finale (11/5), and Laura Hecox Day at the Santa Cruz Natural History Museum (1/27). Historic Landmark Committee Blue Plaque Awards (5/11) and Santa Cruz County History Fair (5/18), and the Capitola Car Show (6/8).
o Co-sponsored the 2024 Santa Cruz County History Fair. o Coordinated building of float for the 2023 Beach Festival Lighted Nautical Parade, awarded 3rd place with trophy and check for $500.
o Funded video of JoJo Urbancic Birthday Party.
 New Landscape Project; Coordinated with:
o Eagle Scout candidate Owen Lawson on museum landscape project (January through April);
o Amah Mutsun Land Trust;
o Public Works: new ADA walkway to the Bathhouse; fumigation of historic Beach Cottage, painting, and redevising opening of Bathhouse doors; reorienting the museum sign; installing a concrete pad behind the photo-op.
 Public Outreach:
o Wrote more than 4 articles for various publications including the Capitola-Soquel Times o 55 posts on the museum Facebook page; gained 300 new followers from September 2023 to May 2024
FISCAL YEAR GOALS – 2024-25 and 2025-26
 Continue 2024 exhibition “Little City Under Canvas” The 150th Anniversary of Camp Capitola through December 2024
 Continue to recognize the 75th Anniversary of city incorporation and the 100th anniversary of the Venetian Court.
 Develop and install 2025 annual exhibition (theme – fashion – proposed title “The Naughty Surf – 19th-20th Century Resort Fashions in Capitola” by mid-March 2025.  Continue to participate in annual festivals and history events.  Write a historical essay on Capitola history – article on Olaf Palm for the MAH History Journal No. 10 in the summer of 2024.
 Initiate proposal for new book, Capitola – Then & Now with Arcadia Publishing. 75 332
Item 9 F.
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Item 9 F.

ART & CULTURE

CULTURE & LEISURE

MISSION
The mission of the Art & Cultural Commission is to foster, assist, and plan events for the City of Capitola and its residents to enhance the community’s cultural fabric, support local artists, create an interesting environment for art and cultural growth, and allow residents and visitors to experience local flavor.

DEPARTMENT PURPOSE
The first Arts Commission was created in 1984. The commission was reorganized by Ordinance #851 effective May 10, 2003, under the new title of Art & Cultural Commission. With the adopted Arts & Cultural Master Plan, the Commission develops and reviews Public Art projects and creates opportunities for a variety of art and cultural experiences for City Council approval. The Commission continues to offset nearly 50% of its budget by obtaining sponsors for the events.

FISCAL YEAR ACCOMPLISHMENTS – 2023-24
 Summer Twilight Concerts at Esplanade Park.
 Capitola Plein Air Event largest ever.
 Recommended public art project to the City Council.

FISCAL YEAR GOALS – 2024-25 and 2025-26
 Evaluate Art in the Park Event.
 Explore new Cultural events for the City.
 Continue to look at public art opportunities.
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Item 9 F.

INTERNAL SERVICE FUNDS

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Item 9 F.

INTERNAL SERVICE FUNDS
Stores (City Manager): The Stores Fund accounts for general supplies, postage, and rental of office equipment.

Information Technology (City Manager): The Information Technology Fund provides funding for the replacement and upgrade of the existing computer network. The number of personal computers, laptops, printers, and servers each department uses forms the basis for department allocations.

Equipment Replacement (Public Works): The Equipment Replacement Fund provides funding for the replacement of city vehicles, including passenger cars, parks maintenance vehicles, police vehicles and other specialty vehicles. Departments contribute to this replacement fund based on the depreciation expense of existing vehicles. This fund also receives the revenue received from the sale, or trade-in, of surplus vehicles.

Self-Insurance Liability (City Manager): The Self-Insurance Liability Fund collects funding from departments to pay for self-insured liability and property protection insurance premiums provided through the Monterey Bay Area Self Insurance Authority (MBASIA) joint powers authority.

Workers’ Compensation (City Manager): The Workers’ Compensation Fund collects funding from departments to pay for Workers’ Compensation coverage through the MBASIA.

Compensated Absences (Finance): The Compensated Absences Fund accumulates money to pay future employee benefit costs, such as vacation and sick leave payouts, at termination or retirement.

The City Council sets the policy to ensure the City can fulfill future obligations. 79 336
Item 9 F.

STORES FUND
The Stores Fund accounts for general supplies and postage. This also includes the rental of the postage machine and the repair and maintenance of shared office equipment. 80 337
Item 9 F.

INFORMATION TECHNOLOGY FUND
The Information Technology Fund collects and designates funds for the future replacement of citywide hardware and software. Annual on-going information technology costs are allocated based on the distribution of resources.

Contract services: on-going technology licenses
Supplies: replacement technology equipment

81 338
Item 9 F.

EQUIPMENT REPLACEMENT FUND
The Equipment Replacement Fund is designed to provide funding for replacement of City vehicles, including passenger cars, maintenance vehicles, police vehicles and other specialty vehicles.

Departments contribute to this replacement fund based on the depreciation costs of existing vehicles.

This fund receives revenue from trade-ins and surplus equipment sales. The General Fund charges for services based on the prior year fleet depreciation costs adjusted by the CPI index. The FY 2021-22 depreciation totaled approximately $210,000 however that is anticipated to approach $300,000 as we complete previously approved purchases and add the electric street sweeper to the fleet.

During the annual budget process, the Public Works and the Police Department review the current vehicle inventory listing and make recommendations for vehicle acquisitions and replacements, considering on-going maintenance costs. In FY 2021-22, $300,000 was transferred from the General Fund to assist in restoring the Equipment Fund’s balance and to purchase an electric street sweeper.

Typically, new street sweepers are financed with gas tax revenues. However, to take advantage of a grant of $250,000, the General Fund assisted with the purchase of the equipment.

FY 2024-25 CAPITAL OUTLAY
2 PD Patrol vehicles $ 140,000
FY 2025-26 CAPITAL OUTLAY
Electric / Hybrid Fleet $ 200,000
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Item 9 F.

SELF-INSURANCE LIABILITY FUND
The Self-Insurance Liability Fund accumulates funds for deductible expenditures and excess incidents above the City’s liability coverage. The fund pays for the following expenses:
 Excess Insurance Premiums - The City belongs to the Monterey Bay Area Self Insurance Authority (MBASIA) joint powers authority. MBASIA covers all liability expenses, fire, property protection, and general liability claims up to $10,000 per occurrence.  Property Insurance – The City receives property insurance through the Public Entity Property Insurance Program and is insured by Lexington. The City’s premium is $100,000.  Vehicle and Equipment Insurance Coverage - Coverage for vehicles and equipment with a purchase value of $25,000 or more. The annual premium is $7,500 with a $2,000 deductible.  Unemployment Insurance - The California Employment Development Department (EDD) defines the City as a “State Unemployment Insurance Reimbursement Client.” The City does not pay unemployment insurance premiums to the State. When an employee files for and receives unemployment benefits from the State, the City is responsible for that benefit.

Charges for services are allocated to each General Fund department based on their percentage of the total operating budget from the prior fiscal year less the budget for unanticipated events. 83 340
Item 9 F.

WORKERS’ COMPENSATION FUND
The Workers’ Compensation Fund satisfies the requirements of Capitola municipal code section

3.24.030, which states, “The City Manager and City Treasurer shall establish a reserve fund for purposes of paying future workers’ compensation claims and shall, hereafter, make such annual deposits into that fund as the city is advised are actually necessary to provide a suitable reserve.” This program also covers City volunteers.

The City belongs to a Joint Powers Authority (JPA), Monterey Bay Area Self Insurance Authority, composed of several local agencies: Del Rey Oaks, Gonzales, Greenfield, Hollister, King City, Marina, Sand City, Scotts Valley, and Soledad. The City retains exposure to temporary disability payments as long as the injured worker remains an employee of the City. MBASIA purchases excess coverage beyond $500,000 per occurrence up to statutory requirements.

The annual premium that is assessed to each of the participating cities in the JPA is based on three primary factors: the number of employees in each of the two major categories (Safety & Miscellaneous), the experience rate (cost incurred) of each participating agency, and debt service allocation.

When an employee files a claim, the City pays the employee’s salary portion directly from the general fund based upon the standard workers’ compensation formula, for the “temporary” claim. The formulas for employees receiving workers’ compensation are as follows:

1. Public Safety: Compensation is 100% of salary, non-taxable.

2. Miscellaneous: Compensation is 2/3 of salary with a cap of $840 per week, non-taxable.

For non-safety staff, City policy allows that accruals (i.e., sick, vacation, etc.) may be used to supplement workers’ compensation payments. If the person becomes “permanently disabled” then the JPA picks up the salary portion. The JPA pays all other costs including legal and medical. While on workers’ compensation status, the safety and non-safety staff continue to accrue sick and vacation leave balances.

Distribution to General Fund Departments:

The allocation methodology for workers’ compensation charges to the General Fund Departments corresponds closely to the cost allocation method used by the JPA. The City divides employees into three classifications: Sworn, Non-Sworn and Volunteers, with cost per FTE calculated. A fund balance accommodates future premium fluctuations, deductibles, and excess liability. 84 341
Item 9 F.

COMPENSATED ABSENCES LIABILITY FUND
The Compensated Absences Liability Fund accumulates reserves to pay for employee cash-outs, such as accumulated sick leave and vacation, due to employees upon termination or retirement. The following is an itemized description of the various liabilities of this fund.

Vacation > 360 hours: An employee who has accumulated more than 360 hours (504 hours for POA) as of the last pay period in April of any year shall be paid in cash at a rate equal to 100% of his/her current hourly rate for hours exceeding 360 (504 for POA). The hourly rate includes specialty pays.

Vacation - Voluntary Cash Out: In accordance with various memoranda of understanding between the employee bargaining groups and the City of Capitola, employees may elect voluntary cash outs up to 80 hours of vacation.

Police Captain Cashable Sick Leave: Refer to contract.

Final Pay: Upon resignation, employees are eligible for vacation cash outs.

Severance Pay: The City provides the following severance payout packages:

City Manager 12 months
Police Chief 6 months
Public Works Director 4 months
Community Development Director 4 months
Finance Director 4 months

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SPECIAL REVENUE FUNDS

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Item 9 F.

SPECIAL REVENUE FUNDS
Supplemental Law Enforcement Services (Police): Funds provided by a State of California COPS grant to provide funding for Community Oriented Policing & Problem Solving (COPPS) programs.

Restricted Transient Occupancy Tax (TOT) (City Council): Capitola voters passed Measure J in 2018 increasing the TOT from 10% to 12% and restricting 0.4% for local business groups and 0.35% for early childhood and youth programming.

Road Maintenance and Rehabilitation Act (SB1) (Public Works): Funds received from the state and used for road maintenance, rehabilitation, and critical safety projects on local streets and roads.

Regional Transportation Commission (RTC) Streets (Public Works): Santa Cruz County voters passed a 0.5 percent user sales tax to fund local roads. The RTC Streets fund will be utilized to increase the City’s Street program.

Gas Tax (Public Works): Funds received from gasoline tax revenue from the state and used for new construction, maintenance, and the reconstruction of City streets.

Wharf (Public Works): Accounts for rental income generated from wharf operations and expended on operations and major repairs and improvements.

General Plan Update and Maintenance (Community Development): Funds received as General Plan Maintenance Fee to support future updates to the City’s General Plan, implementing ordinances and plans.

Green Building (Community Development): Green Building funds are solely for program management, training, publications, public educational purposes, incentive programs, materials, and supplies to promote sustainable development, water conservation, storm water pollution prevention, and climate action planning.

Public Art (City Manager): This fund accumulates money received as public art fees to acquire works of art to be displayed in or about public places within the city.

Parking Reserve (Public Works): In 2009 the Council authorized a special reserve fund from the Village parking meters for parking-related projects.

Technology Fee (Community Development): 5% of building permit fee funds permit processing technology.

Public Education & Government Cable TV Access (City Manager): This special revenue fund accounts for PEG cable television fees. The expenditures are restricted to PEG access-related activities.

Capitola Village & Wharf Business Improvement Area (Finance): Established to generate revenue for the exclusive purpose of promoting business in the Capitola Village and Wharf Business Improvement Area.

Community Development Block Grants (Community Development): This fund accounts for active CDBG reimbursement grants that are awarded to the City on a project-by-project basis.

Community Development Block Grant Program Income (Community Development): This fund accounts for income from housing loans that are funded with Community Development Block Grant funds. Loans and interest repaid to the fund are restricted to CDBG approved uses.

Library (City Manager): The new Capitola Branch Library opened in June 2021. The Friends off the Capitola Branch Library raised over $600,000 of donations for project enhancements with approximately $50,000 remining in the Library fund.
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Item 9 F.

HOME Program Reuse (Community Development): This fund accounts for housing loans due to the City from the recipients of previous HOME Program grants. Receipts in the Home Program Reuse Fund are restricted to affordable housing activities in accordance with the federal HOME program re-use guidelines.

Housing Trust (Community Development): The City Council adopted an Inclusionary Housing Ordinance in November 2004, which created an Affordable Housing Trust Fund. It is funded from in-lieu fees, which can be used for new affordable housing and rehabilitation of existing affordable housing.

Permanent Local Housing Allocation (PLHA): In 2017, Senate Bill 2 (SB 2) established a $75 recording fee on real estate documents and created the Permanent Local Housing Allocation Fund (PLHA). PLHA funds are allocated to local governments for eligible housing and homelessness activities and provide a permanent, on-going source of funding for housing-related projects and programs that address the unmet housing needs of communities.

Capitola Housing Successor (Community Development): When the Capitola Redevelopment Agency dissolved, the City elected to become the Housing Successor to the former Low- and Moderate-Income Housing Fund of the RDA.
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Item 9 F.

SUPPLEMENTAL LAW ENFORCEMENT SERVICES
POLICE
In 1996, California's state legislature (AB 3229) established the Citizens Options for Public Safety (COPS) program, allocating $100,000,000 annually to local governments for front-line law enforcement. These funds are administered through the Supplemental Law Enforcement Services Fund (SLESF) program. The COPS program received its initial funding in the 1996-1997 California state budget and has been consistently funded since then. Section 30061 (c) (1) of the Government Code outlines the future funding details for the COPS program through SLESF.

SLESF funds are grants, and the legislation requires that each municipality receive annual funds to be used for "front-line law enforcement services." These funds cannot be used to replace existing resources but must be used to enhance them. Eligible expenses include salaries, services, supplies, equipment, and administrative costs.

Furthermore, SLESF funds cannot be redirected to a municipality's general fund but must be exclusively used for front-line law enforcement services. The total award to each recipient entity is based on population size, with a minimum annual award of $100,000 for all entities. For example, the Capitola Police Department receives an annual award of $100,000. Fund distributions are made regularly throughout the year.

Contract Services – Utility services – Gas & Electric
Supplies – Front line law enforcement – includes $5,000 for wellness grant.

Capital Outlay – Flock cameras, online report writing, electronic ticket writing. 89 346
Item 9 F.

RESTRICTED TRANSIENT OCCUPANCY TAX (TOT)

CITY COUNCIL
This fund accounts for the 0.75% of restricted Transient Occupancy Tax (TOT) as approved by Capitola voters in 2018. The Restricted TOT Fund is used to receive and distribute half of the 0.40% of restricted TOT revenues for local business groups with the other half going directly to the Capitola Village & Wharf Business Improvement Area fund and the 0.35% of restricted TOT revenue dedicated to early childhood and youth programming.

ECYP Enrichment
 Field Trips and similar activities
ECYP Scholarships
 Camp & Jr. Guard - $13,500 (year 2 of two-year $27,000 program) Community Grants – Early Childhood & Youth Community Grants - $60,000 Other financing uses – payment to Capitola-Soquel Chamber of Commerce - $37,033  Equal amount distributed directly to Capitola BIA fund. 90 347
Item 9 F.

ROAD MAINTENANCE & REHABILITATION ACT (SB1)

PUBLIC WORKS
This fund accounts for receipt and expenditure of revenue as provided by state law. The Road Maintenance & Rehabilitation Act Fund is primarily used to cover the expenses related to street maintenance and rehabilitation projects on City roads and streets.

Capital Outlay – Annual pavement management plan.
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Item 9 F.

REGIONAL TRANSPORTATION COMMISSION (RTC) STREETS

PUBLIC WORKS
This fund accounts for receipts and expenditures of money received from the Santa Cruz County Regional Transportation Commission. A description of proposed projects is listed in the summary section of this budget.

Capital Outlay – Annual pavement management plan.
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Item 9 F.

GAS TAX

PUBLIC WORKS
This fund accounts for receipt and expenditure of gasoline tax revenue as provided by state law. The Gas Tax Fund is primarily used to cover the expenses related to maintenance and operation of the City’s traffic signals and streetlights. Other Gas Tax Fund programs include street maintenance patching and striping project, street sweeper lease payments, and engineering.

The Gas Tax funds must be spent within 5 years of receipt. Future Gas Tax funds cannot be pledged for current projects with future repayment; therefore, the funds can only be spent once they have been received.

Contract Services:
 Admin & Engineering - $50,000
 Streetlights & traffic signals - $127,000
 Street & sidewalks - $35,000
 Street painting - $30,000
 Street sweeper maintenance - $30,000
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Item 9 F.

WHARF

PUBLIC WORKS
The Wharf Fund accounts for rental income generated from wharf operations and expended on operating costs as well as major repairs and improvements. The Wharf Fund accumulates these revenues in order to help meet the majority of its expenditure demands. Major repairs that tend to occur in a 3–5-year cycle require occasional general fund support in order to keep this key public facility open.

With the passage of Measure F, the City will begin to design and construct an improved wharf. The Measure F funds are accounted for in the Capital Improvement Fund (CIP). The Wharf Funds are for maintenance and repair of the current Wharf.

Contract Services:
 Wharf Revisioning Plan - $75,000
 Utilities - $6,750
 Janitorial services - $7,000
 Property & Equipment repairs & maintenance - $4,500
 Rentals (portable toilets) - $8,000
Capital – Buildings & Improvements
 Temporary structures / fuel storage - $40,000

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Item 9 F.

GENERAL PLAN UPDATE & MAINTENANCE

COMMUNITY DEVELOPMENT
In 2002, the State Legislature passed AB 2936 to enable cities to collect fees “reasonably necessary to prepare and revise the plans and policies that a local agency is required to adopt before it can make any necessary findings and determinations”. The General Plan Maintenance Fee is currently 0.5% of the total building valuation with a cap of $100,000 to cover the cost of a future comprehensive update of the City’s General Plan.

Valuation is calculated on a cost per square foot basis. The City of Capitola uses $200/square foot valuation for the average house, and $300/square foot for houses with increased values.

The City adopted a comprehensive update to the Zoning Code which was certified by the California Coastal Commission in 2021. The City is currently working on the final stage of 6th Cycle Housing Element Update pending certification by the state. The adopted budget provides adequate resources to fund consultant contracts and staff time to finalize the Housing Element efforts and initiate implementation efforts in FY 24/25.

Contract services:
 Ben Noble - $64,375 – Housing Element
 RRM design – Housing Element - Rollover prior year encumbrance - $120,000  City Staff time – Housing Element - $25,000

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Item 9 F.

GREEN BUILDING

COMMUNITY DEVELOPMENT

The Community Development Block Grant (CDBG) program is a flexible program that provides communities with resources to address a wide range of unique community development needs. The program is funded though the Federal Department of Housing and Urban Development (HUD) and Capitola participates in the competitive Small Cities Grant Program administered by the California Department of Housing and Community Development.

In recent years, the City has been awarded CDBG grants to fund the City’s Local Hazard Mitigation Plan (LHMP), Safety Element of the General Plan Update, and CARES Act funding in response to the pandemic.

In 2021, the City was awarded with a $497,000 CDBG grant for public food assistance and transit including funds for Second Harvest Food Bank ($119,840), Meals on Wheels/Lift Line ($299,720), Grey Bears ($52,950), and administration of the grant. The City has an active application submitted to HCD for $3.3 million to assist in the rehabilitation of the Jade Street Community Center.

Contract services: Update Green Building Code
.
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Item 9 F.

PUBLIC ART

CITY MANAGER
The City established a Public Arts fee in 2004. The purpose is to ensure that 2% of the cost of eligible municipal capital improvement, renovation, or restoration projects funded in whole or in part by the City of Capitola or any private, non-residential development project with a total building permit valuation of $250,000 or more is set aside for the acquisition of works of art to be displayed in or about public places within the City.

For a private development, there is an in-lieu option to contribute 1% of the total budget to the Public Art Program. As part of the program expenses, up to 20% of the art allocations may be expended on program administration, project management and community outreach activities.

Works in progress
- Cypress Tree Stump Project
- Monterey Ave Railing Project
- Begonia Commemorative Art Project
Contract services: Contracts with artists on various projects - $65,500 97 354
Item 9 F.

PARKING RESERVE

PUBLIC WORKS
In 2009, as part of a parking meter rate increase, the City Council established the Parking Reserve Fund.

Revenues deposited into this fund represent 16% of parking meter revenues from the Village area (Parking Meter Zone A1). The fund was established to fund parking improvement projects throughout the Village. As part of the FY 2023-24 City Council Goals this debt was paid off. 98 355
Item 9 F.

TECHNOLOGY FEE

COMMUNITY DEVELOPMENT
On November 12, 2009, the City of Capitola adopted a resolution establishing the Technology Fee. The fee is 5% of the Community Development and Public Works permit fees. The City has updated building, planning, and public works permitting software. The system better coordinates plan review activities among departments and will allow the public to inquire and search records and monitor progress of applications through the internet. The City will continue to make changes to the system in order to provide better service to the public and to improve internal processes. The zoning update process and its implementation will also benefit from the system’s data resources and enhanced reporting capabilities.

Contract Services:
 iWorQ annual fee – Public Works - $3,500
 iWorQ annual fee – Community Development - $9,750
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Item 9 F.

PUBLIC EDUCATION/GOVERNMENT CABLE TV ACCESS (PEG)

CITY MANAGER
This Special Revenue Fund accounts for Public, Education & Government (PEG) cable television fees. The PEG Access fee from all cable service providers is 64 cents per subscriber and is due to the City concurrent with the Franchise Fee Payments. The City is required to segregate PEG access fees and related purchases.

The funds received through PEG fees are retained by the City and utilized for capital equipment purchases in support of PEG access only. PEG channels are set aside for the following purposes:
- Public - available for use by the public
- Education - available for use by educational institutions for educational programming - Government – available for programming by local governments Capitola Outlay – Technology upgrades – City Council Chambers 100
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Item 9 F.

CAPITOLA VILLAGE/WHARF BUSINESS IMPROVEMENT AREA (BIA)

FINANCE
In June 2005, the City of Capitola adopted Ordinance No. 889, which added Chapter 5.10 to the Capitola Municipal Code establishing the Capitola Village and Wharf Business Improvement Area (BIA). It was established to generate revenue for the sole purpose of promoting business in Capitola village and on the wharf. State law requires certain annual actions and public hearing to continue this assessment district. The program is run with the assistance of a BIA Board of Directors, which provides city council with an annual budget proposal.

Contract services and supplies: Capitola Village & Wharf Business Improvement Area annual report to be submitted to the Capitola City Council in late May or early June.

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Item 9 F.

COMMUNITY DEVELOPMENT BLOCK GRANTS (CDBG)

COMMUNITY DEVELOPMENT
The Community Development Block Grant (CDBG) program is a flexible program that provides communities with resources to address a wide range of unique community development needs. The program is funded though the Federal Department of Housing and Urban Development (HUD) and Capitola participates in the competitive Small Cities Grant Program administered by the California Department of Housing and Community Development.

Contract Services – CDBG Preliminary Award
102
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Item 9 F.

COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM INCOME

COMMUNITY DEVELOPMENT
This special revenue fund accounts for issuance and repayment of CDBG-funded housing loans made by the City to income-qualifying households. These funds are referred to as CDBG Program Income. CDBG Program Income must be used for CDBG-approved purposes. The three primary sources of CDBG Program Income are the payoff of Loma Vista Mobile Home Park resident loans, CDBG-funded First Time Homebuyer Program loans, and CDBG-funded Rehabilitation Program loans.

If the total amount of Program Income received in any fiscal year is less than $25,000, the funds received are not subject to Federal CDBG regulations. If the amount exceeds $25,000, all Program Income received during that fiscal year is restricted to CDBG-approved Federal spending guidelines. Since the FY 2022-23 Program Income had no loan payoffs, there are no funds to reallocate in the current budget cycle. The adopted budget provides adequate resources to fund consultant services to apply for future CDBG grants.

Contract Services – Future applications
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Item 9 F.

LIBRARY

CITY MANAGER
This special revenue fund accounts for revenue and expenses related to the design and construction of the new Capitola Branch Library. The former Redevelopment Agency contributed $2.6 million to the County of Santa Cruz which was held in a trust fund for the future construction of a new branch library.

The Voters of Santa Cruz County authorized the Santa Cruz Libraries Facilities Financing Authority to issue general obligation bonds in an aggregate principal amount not exceeding $67 million. The City of Capitola will receive $10.0 million from the bonds to be used towards the construction of the new branch library, bringing the City’s total available funds to $12.6 million.

The City started utilizing the County Trust Fund money in FY 2016/17 to hire a project manager to oversee the development of plans and ultimately the construction of the Library. Under the trust fund agreement, the City can utilize 15 percent of the funds for pre-construction activities.

In addition to the funding sources mentioned above, the Friends of the Capitola Branch Library (Friends) conducted a fundraising campaign raising over $600,000. The funds donated to the Friends were utilized for enhancement projects throughout the Library. The City completed construction of the new Library in June 2021, however, there remains approximately $50,000 of donated funds that the Friends are evaluating for the best use of those remaining funds.
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Item 9 F.

HOME PROGRAM REUSE

COMMUNITY DEVELOPMENT
This special revenue fund accounts for revenue from the repayment of Federal Home Investments Partnership Program (HOME) loans. Expenditures in this fund must be used for affordable housing activities in accordance with the Federal HOME Program Reuse Guidelines, including first-time homebuyer loans, owner-occupied rehabilitation projects, and affordable housing assistance projects. As loans are paid off, those funds are returned to the Home Program Reuse Fund and become available for affordable housing activities.

Annual revenue represents principal and interest payments on the 30-year $238,000 Wharf Road Manor Mobile Homeowners Association Acquisition and Rehabilitation Project loan from 2004 as well as other HOME loan payoffs.

In January 2009, the City of Capitola entered a Standard Agreement with the California Department of Housing and Community Development for a HOME grant in the amount of $2,000,000 for rehabilitation expenses related to the 109-unit Bay Avenue Senior Apartments Project. Construction of the project was completed in May 2011. The grant was provided to First Community Housing, the Bay Avenue Senior Apartments project developer, as a residual receipts loan at 3% interest. In May 2011, the HOME program increased the grant award by $1.2 million dollars to cover additional costs related to required rent level revisions, which are lower than estimated in the original pro-forma. The grant funds have been received and dispersed. In recent years, multiple loans have been paid off creating a healthy fund balance for future HOME projects.

The adopted budget provides adequate resources to apply for a larger rehabilitation project for the Dakota Apartments in FY24/25. The 25-unit, 100% affordable housing development is approaching 30 years in age and in need of upgrades for the roof, heating system, and main lobby area. The budget also covers longterm monitoring of the Bay Avenue Senior Apartments.

Contract Services: HOME Program long-term monitoring – Bay Avenue Senior Apartments 105
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Item 9 F.

HOUSING TRUST

COMMUNITY DEVELOPMENT
In November 2004, the City Council adopted an inclusionary housing ordinance as part of the City’s ongoing efforts to provide affordable housing. This ordinance created the Affordable Housing Trust Fund to use as a flexible local source of funding for the creation of new affordable housing, rehabilitation of existing affordable housing, funding of local programs to assist lower and moderate-income buyers purchase affordable housing, or as leverage of local funds for larger State and Federal grants. This housing activity is funded through inlieu fees collected from development projects and does not impact the General Fund.

The Affordable Inclusionary Housing Ordinance refers to a City Municipal Code Section that requires that fifteen percent (15%) of the units in a new for-sale residential construction project be made available to low or moderate-income buyers. Condominium conversion projects are also covered under this ordinance. As outlined in the ordinance, project developers provide affordable set-aside units or under certain conditions can pay an in-lieu fee.

The City’s Housing Trust Fund allows for up to $75,000 per year to be spent on affordable housing program administration. This includes working with developers on fee collection, administration of the Housing Trust Fund, and implementation of the Inclusionary Ordinance.

The adopted budget provides adequate resources to initiate a new down payment assistance program.

Contract Services:
 $25,000 to create program and $25,000 per household. 5 household’s total. $150,000 in 8-year period - Down Payment Assistance
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PERMANENT LOCAL HOUSING ALLOCATION

COMMUNITY DEVELOPMENT
In 2017, Senate Bill 2 (SB 2) established a $75 recording fee on real estate documents and created the Permanent Local Housing Allocation Fund (PLHA). PLHA funds are allocated to local governments for eligible housing and homelessness activities and provide a permanent, on-going source of funding for housing-related projects and programs that address the unmet housing needs of communities.

On May 10, 2023, the City of Capitola was awarded $481,732 in PLHA funds for the first three years of the allocation (2019-2021) and a total five-year estimate of $630,557. The City anticipates additional funding on an annual basis. The first PLHA activity approved is for predevelopment cost related to affordable housing developments. The second activity is to fund the very low income homeless through an annual contribution of $35,000 to the Housing for Health Partnership to support year-round emergency shelter operations in Santa Cruz County. A portion of the funding will cover administrative expenses.

The Adopted budget proved adequate resources to support the development of the 52-unit 100% affordable housing development project at 1098 38th Avenue.

Contract services: Affordable housing and homelessness program development and activities. 107
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CAPITOLA HOUSING SUCCESSOR

COMMUNITY DEVELOPMENT
In 2011, the California State Legislature passed ABX1 26 to dissolve redevelopment agencies. The legislation was contested and upheld by the California Supreme Court. It requires a number of actions to be taken by the city in the winding down of the RDA. Among other things, it allows cities to elect to retain the former RDA Low- and Moderate-Income Housing Fund. The Capitola City Council elected to retain the former RDA Housing with the following new city special revenue fund, the Capitola Housing Successor.

A further requirement of the legislation is the establishment of a program income fund to segregate loan payoffs received by the Housing Successor after the dissolution of the Redevelopment Agency. These funds were initially restricted in their use, repayment, and reuse and the Housing Successor continues this restriction. As payments are received on loans associated with the original RDA Low- and Moderate-Income Housing Fund or the Capitola Housing Successor it will be applied to the Capitola Housing Successor.

Newly implemented SB341 requires annual reporting on the Housing Successor Assets to be included with the Annual Financial Statements and the Housing and Community Development (HCD) Annual Progress Report on the Housing Element of the General Plan.

The Adopted budget provides adequate resources to continue supporting security deposit assistance, emergency rental assistance, administration of the City’s affordable housing program, and the MidPen loan to help fund the preconstruction for the 52-unit 100% affordable development at 1098 38th Avenue. New to the FY 24/25 will be the creation of a Housing Rehab program for city residents . Staff also anticipates a construction loan to further assist the development at 1098 38th Avenue in FY24/25 following future discussions with the developer and City Council.

Contract Services:
 $25,000 to create program and $25,000 per household. 5 household’s total. $150,000 in 8-year period - Down Payment Assistance
 MidPen funding – preconstruction - $1,000,000
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Item 9 F.

RESERVES
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RESERVES
Emergency Reserves (Finance Department): The City Council established the Emergency Reserve Fund to accumulate funds to meet future unanticipated needs. The City of Capitola Administrative Policy III-3, Financial Management Policy, amended on February 28, 2013, to increase the required level of emergency reserves from five to ten percent of operating expenditures.

Contingency Reserve (Finance Department): The City Council established the Contingency Reserve Fund to accumulate a prudent level of financial resources to protect the City against temporary revenue shortfalls or unanticipated operating costs, and/or to meet short-term cash flow requirements. The City of Capitola Administrative Policy III-3, Financial Management Policy, amended on February 28, 2013, to increase the level of contingency reserves from 10 to 15 percent of operating expenditures.

PERS Contingency Reserve (Finance Department): The City Council established the PERS Contingency Reserve Fund in FY 2015/16. The Council discussed possible uses of a General Fund positive ending balance and wanted to set aside funds for future PERS increases. In FY 2022-13 an additional $500,000 was deposited into the Trust to add to the previously deposited $800,000.

Facilities Reserve (Finance Department): The City Council established the Facilities Reserve Fund to serve as a resource to fund capital improvements and major repairs on City facilities. Based on the National Research Council Stewardship of Federal Facility guidelines, the City’s goal is to provide annual contributions equal to two percent of the facility replacement values. This annual contribution will be determined each budget year.

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EMERGENCY RESERVES
The City of Capitola adopted an Emergency Reserve Policy as part of the City’s Financial Management Policies. This reserve protects against significant one-time costs that arise from major unpredictable emergency events. In FY 2012/13, the City amended the Financial Management Policies to increase the funding level of Emergency Reserves from five to ten percent of the General Fund budgeted expenditures, or approximately $1.6 million in FY 2024-25.

The Emergency Reserve fund was nearly depleted in March of 2011 due to an underground storm drain failure that flooded Capitola Village and the surrounding area. The City was required to recognize a $1.4 million extraordinary loss on the FY 2010/11 and FY 2011/12 financial statements. An additional $200,000 was needed to fund a related retaining wall project. In FY 2012/13, a settlement was reached with the City’s insurance carrier to pay $1.35 million in damages to the City.

The March 2011 pipe failure repairs were paid from the City’s Emergency Reserve Fund. As funding in the Emergency Reserve Fund fell short of the flood-related costs, additional funding to respond to the flood event was provided through interfund loans from the Contingency Reserve Fund and Capital Improvement Fund. In FY 2011/12, the Emergency Reserve Fund balance was $410,000 lower than the targeted balance. In FY 2012/13, funds were transferred from the internal service funds, Measure O revenue receipts, and the General Fund operating balance to assist in replenishing the reserves.

In FY 2014/15 and FY 2015/16, $465,100 and $213,000, respectively, were budgeted for transfer to the fund to prepare for any unforeseeable emergencies and to meet the new Emergency Reserve targeted levels. As the chart below shows, the reserve balance is currently below the target level for FY 2024-25 in part due to the transfer of $80,000 for damages from the Jan. 2023 storms. The City anticipates receiving reimbursements from FEMA and Cal OES and plans to fund reserves to target balances once received.
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CONTINGENCY RESERVES
The City of Capitola adopted a Contingency Reserve Policy as part of the City’s Financial Management Policies. This reserve was established to provide a prudent level of financial resources to protect against temporary revenue shortfalls, unanticipated operating costs, and/or to meet short-term cash flow requirements. In FY 2012/13, the City amended the Financial Management Policies to increase the Contingency Reserve target from 10 to 15 percent of General Fund budgeted expenditures, or approximately $2.6 million in FY 2024-25.

Due to the expenses associated with the March 2011 pipe failure, a loan was made from the Contingency Reserves Fund to the Emergency Reserves Fund. As a result, Contingency Reserves were $727,000 below their Financial Management Policy funding goal in FY 2011/12. In FY 2012/13, funds were transferred from the Internal Service Funds, Measure O revenue receipts, and the General Fund operating balance to assist in replenishing and building the reserves.

In FY 2014/15 and FY 2015/16, a total of $182,600 and $89,400 were transferred to the fund to meet the new Contingency Reserve targeted levels. As the chart below shows, the reserve balance is currently estimated to be below the target level for FY 2024-25. The City anticipates receiving reimbursements from FEMA and Cal OES and plans to fund reserves to target balances once received. 112
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Item 9 F.

PERS CONTINGENCY RESERVES
The City of Capitola established a PERS Contingency Reserve as part of the FY 2015/16 Budget process. The fund was set up to help stabilize the City’s finances and help manage future increases in PERS contributions.

The PERS Contingency Fund was initially funded with a $300,000 transfer from the General Fund. The $300,000 allows for two years of PERS projected increases and time to evaluate options to address the larger unfunded liability and yearly obligations.

In December 2016, $300,000 was invested in a moderately conservative trust fund with Public Agency Retirement Services (PARS). The FY 17/18 budget transferred an additional $500,000 into the PERS trust fund to offset rising pension costs. During the FY 2022-23 goal setting session the City Council allocated $500,000 of existing fund balance to the PERS Trust reserve. 113
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FACILITIES RESERVES
The Facilities Reserve Fund was established in FY 2014-15 to serve as a resource to fund capital improvements and major repairs on City facilities. The National Research Council Stewardship of Federal Facilities recommends setting aside two to four percent of building replacement costs to preserve or extend the life of facilities. The estimated replacement value of the City’s facilities is $17.5 million.

The Facilities Reserve is used to fund future facility needs of the City. The Proposed FY 2024-25 Budget does not include nay funding for the Facilities Reserve. 114
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Item 9 F.

MULTI-YEAR ASSETS & OBLIGATIONS

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MULTI-YEAR ASSETS & OBLIGATIONS
City & Joint Powers Authority (JPA) Multi-Year Obligations: The City of Capitola has six multiyear obligations, two of which are part of a Joint Powers Authority. The obligations are paid from various funding sources.

Pacific Cove Lease Financing: In March 2011, a pipe failure flooded the City-owned Pacific Cove Mobile Home Park. The City of Capitola entered into a $2,390,000 lease/sublease agreement to finance the relocation of mobile home residents and close the park.

Beach and Village Parking Lot II: The City of Capitola initiated a $1,372,500 California Infrastructure and Economic Development Bank (I-Bank) loan to fund the development of a parking lot and related improvements at the site of the former Pacific Cove Mobile Home Park. 117
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CITY/JOINT POWERS AUTHORITY MULTI-YEAR ASSETS & OBLIGATIONS

GENERAL GOVERNMENT
The City of Capitola has seven multi-year obligations, three of which are part of a Joint Powers Authority. The obligations are paid from various funding sources. All obligations are shown in the budgets of the applicable funds and all payments are current.

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Item 9 F.

PACIFIC COVE LEASE FINANCING

DEBT SERVICE
The City of Capitola owns 426 Capitola Avenue, which formerly housed the 41 mobile home Pacific Cove Mobile Home Park. On March 24, 2011, a 72” storm drain that carries Noble Gulch Creek water from Bay Avenue to Soquel Creek catastrophically failed following a heavy rain storm. This resulted in flooding of the Pacific Cove Mobile Home Park, City Hall and village residences and businesses.

The initial estimate to bring the park up to code was $1.33 million. Due to the high cost and potential for future liability, Capitola City Council approved a Relocation Impact Report (RIR) for the closure of Pacific Cove Mobile Home Park in January 2012. The RIR provided a cost estimate for relocating residents and professional relocation consultants to help displaced residents find suitable replacement housing. The City executed a $2.39 million lease/sublease agreement using the existing City Hall site and adjacent upper parking lot as the pledged property. The City verified income status as part of the relocation process and determined that a percentage of Housing Trust Fund monies could be used to repay the debt service at a proportion no greater than the number of low income mobile home occupants that were relocated. The funding sources for debt service payments will be determined annually. Any General Fund monies for the share of allowable costs from other funding sources may be reimbursed in subsequent years as funds become available.

At the time the loan was issued, there was some uncertainty as to whether the property would be developed for public or private use. This resulted in the City entering into a 20–year taxable lease/sublease agreement at an interest rate of 5.14%. In FY 12/13, the City determined that the site would be converted to a public parking lot, now named Beach & Village Parking Lot II (BVPL II). This public use allows the City to refinance the existing debt at a 3.25% tax-exempt interest rate with a 10- year Treasury Bill reset + 1.5% in year 10. As a result of the refinancing, annual loan payments were reduced by approximately $28,000, with an estimated nine-year interest savings of approximately $350,000. In FY 12/13 the City reached a $1.35 million insurance settlement related to the pipe failure. This resulted in a principal reduction of $476,200, with a prepayment penalty of $23,800.

During the FY 2023-24 City Council Goal setting the Council allocated $725,000 to pay off the outstanding balance saving approximately $150,000 of interest costs over the next several years. 119
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Item 9 F.

Payment
Date Principal
Interest
/Prepmt
penalty Total Fiscal Year
9/1/2012 30,815 $ 53,893$ 84,708$
3/1/2013 35,871 60,632 96,503
6/28/2013 476,200 23,810 500,010 $ 681,221
9/1/2013 42,440 22,843 65,283
3/1/2014 53,207 29,326 82,533 147,816
9/1/2014 46,196 36,337 82,533
3/1/2015 46,947 35,586 82,533 165,066
9/1/2015 47,710 34,823 82,533
3/1/2016 48,485 34,048 82,533 165,066
9/1/2016 49,273 33,260 82,533
3/1/2017 50,074 32,459 82,533 165,066
9/1/2017 50,887 31,645 82,533
3/1/2018 51,714 30,819 82,533 165,066
9/1/2018 52,555 29,978 82,533
3/1/2019 53,409 29,124 82,533 165,066
9/1/2019 54,277 28,256 82,533
3/1/2020 55,159 27,374 82,533 165,066
9/1/2020 56,055 26,478 82,533
3/1/2021 56,966 25,567 82,533 165,066
9/1/2021 57,891 24,641 82,533
3/1/2022 58,832 23,701 82,533 165,066
9/1/2022 59,788 22,745 82,533
3/1/2023 60,760 21,773 82,533 165,066
9/1/2023 61,747 20,786 82,533
3/1/2024 62,751 19,782 82,533 165,066
9/1/2024 63,770 18,763 82,533
3/1/2025 64,807 17,726 82,533 165,066
9/1/2025 65,860 16,673 82,533
3/1/2026 66,930 15,603 82,533 165,066
9/1/2026 68,017 14,515 82,533
3/1/2027 69,123 13,410 82,533 165,066
9/1/2027 70,246 12,287 82,533
3/1/2028 71,387 11,145 82,533 165,066
9/1/2028 72,548 9,985 82,533
3/1/2029 57,304 7,887 65,191 147,724
9/1/2029 - - -
3/1/2030 - - - -
9/1/2030 - - -
3/1/2031 - - - -
9/1/2031 - - -
3/1/2032 - - - -
TOTAL 2,390,000 $ 897,681$ 3,287,681$ $ 3,287,681
Pacific Cove Financing Lease Debt Service
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Item 9 F.

BEACH & VILLAGE PARKING II – LEASE FINANCING

DEBT SERVICE
In April 2013, the City of Capitola received $1,372,000 in funding from the California Infrastructure and Economic Development Bank (I-Bank) for development of a parking lot on the former Pacific Cove Mobile Home Park site. The funding was used to create the 226 space Beach & Village Parking Lot II. The project included grading, pay station installation, shuttle bus stops, landscaping, pedestrian walkways, and pay stations for the upper parking lot. The I-Bank loan is 2.26% tax exempt reimbursement financing.

This project improved parking capacity for Capitola Village, Capitola Beach, and Capitola Wharf, and is especially helpful during peak seasons. The additional parking spaces are also anticipated to facilitate the development of a hotel. The parking lot contributes about $44,000 annual revenue to the General Fund and the I-Bank annual debt service of $87,568 is paid with funds transferred from the General Fund.
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Payment
Dates Principal Interest Total
Fiscal
Year
8/1/2014 55,040 $ 15,922 70,962
2/1/2015 14,887 14,887 $ 85,849
8/1/2015 56,284 18,840 75,124
2/1/2016 14,251 14,251 89,375
8/1/2016 57,556 18,035 75,591
2/1/2017 13,601 13,601 89,192
8/1/2017 58,857 17,212 76,069
2/1/2018 12,936 12,936 89,004
8/1/2018 60,187 16,370 76,557
2/1/2019 12,256 12,256 88,812
8/1/2019 61,547 15,509 77,056
2/1/2020 11,560 11,560 88,616
8/1/2020 62,938 14,629 77,567
2/1/2021 10,849 10,849 88,416
8/1/2021 64,360 13,729 78,089
2/1/2022 10,122 10,122 88,211
8/1/2022 65,815 12,809 78,624
2/1/2023 9,378 9,378 88,002
8/1/2023 67,302 11,868 79,170
2/1/2024 8,618 8,618 87,788
8/1/2024 68,823 10,905 79,728
2/1/2025 7,840 7,840 87,568
8/1/2025 70,379 9,921 80,300
2/1/2026 7,045 7,045 87,344
8/1/2026 71,969 8,915 80,884
2/1/2027 6,231 6,231 87,116
8/1/2027 73,596 7,886 81,482
2/1/2028 5,400 5,400 86,881
8/1/2028 75,259 6,833 82,092
2/1/2029 4,549 4,549 86,641
8/1/2029 76,960 5,757 82,717
2/1/2030 3,680 3,680 86,396
8/1/2030 78,699 4,657 83,356
2/1/2031 2,790 2,790 86,146
8/1/2031 80,478 3,531 84,009
2/1/2032 1,881 1,881 85,890
8/1/2032 82,297 2,380 84,677
2/1/2033 951 951 85,627
8/1/2033 84,156 1,204 85,360 85,360
Total $ 375,736 1,372,500 $ 1,748,236 $ 1,748,236 $
Beach & Village Parking Lot II Lease Financing
Debt Service
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CAPITAL IMPROVEMENT PROGRAM
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CAPITAL IMPROVEMENT PROGRAM

PUBLIC WORKS
The City of Capitola’s Capital Improvement Program oversees planning, design, and construction of the City’s improvement projects. The CIP program is broken into facilities, parks, streets, creek enhancement, and neighborhood traffic projects. The projects are prioritized through the collaborative effort of City staff, City Council, and the community. Maintaining the City infrastructure requires long range planning and prioritizing to plan for necessary improvements, funding needs, and funding availability.

The City’s facilities include City Hall, Police Station, Corporation Yard, Jade Street Park Community Center, Upper and Lower Pacific Cove Park Parking Lots, Capitola Municipal Wharf, and the Library. Parks include McGregor Park complex (dog, skate, pump track), Monterey Park, Rispin/Peery Park, Cortez Park, Esplanade Park, Nobel Gulch Park, Soquel Creek Park, Library Tot-lot, Hihn Park, and multiple City medians, streetscapes, and public art displays.

The Street system includes 9.3 miles of arterial roads, 3.4 miles of collector roads, and 13.5 miles of local roads. The City utilizes a Pavement Management Program to track pavement conditions and plan maintenance efforts on 112 individual roads.

The City currently has the Wharf Rehabilitation project as well as several other projects including the Community Center and Universal Design playground that will be rolled forward into FY 2024-25. 125
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Item 9 F.

RESOLUTION NO. --

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPITOLA AUTHORIZING AND APPROVING THE FISCAL YEAR 2024/2025

PAY RATES AND RANGES (SALARY SCHEDULE) FOR THE CITY EMPLOYEES WHEREAS, the City Council establishes the legal current salary range from the salary schedule for each class of position; and
WHEREAS, the California Public Employee’s Retirement Law, at Section 570.5 of the California Code of Regulations Title 2, requires the City to publish pay rates and ranges on the City’s internet site and the City Council to approve the pay rates and range in its entirety each time a modification is made; and
WHEREAS, the City and the Mid-Management Employees bargaining unit have negotiated in good faith Memoranda of Understanding (MOUs) within the financial authority authorized by the City Council which includes a Cost of Living Adjustment (COLA) beginning the first full pay period after ratification; and
WHEREAS, the attached salary schedule does not go into effect until the MOU is ratified by both the City Council and the employee groups; and
WHEREAS, the City Council has conducted budget study sessions, has heard and considered public comments, and has modified the proposed budget accordingly, and wishes to adopt such budget for the Fiscal Year July 1, 2024, through June 30, 2025; and WHEREAS, the City Council of the City of Capitola adopted the 2024-2025 Fiscal Year Budget which included the creation of the Recreation and Community Services Department and salary adjustments based upon good faith negotiations with various bargaining units; WHEREAS, a salary resolution is adopted annually by the City Council upon review and recommendation of the City Manager; and
THEREFORE, LET IT BE FURTHER RESOLVED that the City Council of the City of Capitola does hereby:

Authorize and approve City of Capitola pay rates and ranges (Salary Schedule, Exhibit A) for permanent employees from July 7, 2024, through June 30, 2025.

I HEREBY CERTIFY that the above and foregoing resolution was passed and adopted by the City Council of the City of Capitola on the 13th day of June, 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
_______________________
Kristen Brown, Mayor
ATTEST:
______________________
Julia Gautho, City Clerk
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Item 9 F.

Position Bargaining Unit Step A Step B Step C Step D Step E Step F Step A Step B Step C Step D Step E Step F Step A Step B Step C Step D Step E Step F ACCOUNT TECHNICIAN ACE 30.46 $ 31.97 $ 33.57 $ 35.25 $ 37.03 $ N/A 5,279.73 $ 5,541.47 $ 5,818.80 $ 6,110.00 $ 6,418.53 $ N/A 63,356.80 $ 66,497.60 $ 69,825.60 $ 73,320.00 $ 77,022.40 $ N/A ACCOUNTANT I ACE 36.79 $ 38.65 $ 40.57 $ 42.59 $ 44.72 $ N/A 6,376.93 $ 6,699.33 $ 7,032.13 $ 7,382.27 $ 7,751.47 $ N/A 76,523.20 $ 80,392.00 $ 84,385.60 $ 88,587.20 $ 93,017.60 $ N/A ACCOUNTANT II ACE 40.58 $ 42.60 $ 44.75 $ 46.98 $ 49.31 $ N/A 7,033.87 $ 7,384.00 $ 7,756.67 $ 8,143.20 $ 8,547.07 $ N/A 84,406.40 $ 88,608.00 $ 93,080.00 $ 97,718.40 $ 102,564.80 $ N/A ACCOUNTS CLERK ACE 27.62 $ 29.03 $ 30.46 $ 31.98 $ 33.58 $ N/A 4,787.47 $ 5,031.87 $ 5,279.73 $ 5,543.20 $ 5,820.53 $ N/A 57,449.60 $ 60,382.40 $ 63,356.80 $ 66,518.40 $ 69,846.40 $ N/A ADMINISTRATIVE RECORDS ANALYST ACE 32.51 $ 34.13 $ 35.83 $ 37.62 $ 39.51 $ N/A 5,635.07 $ 5,915.87 $ 6,210.53 $ 6,520.80 $ 6,848.40 $ N/A 67,620.80 $ 70,990.40 $ 74,526.40 $ 78,249.60 $ 82,180.80 $ N/A ASSIST TO CITY MGR CONFIDENTIAL 49.96 $ 52.46 $ 55.08 $ 57.84 $ 60.73 $ N/A 8,659.96 $ 9,092.56 $ 9,546.71 $ 10,025.13 $ 10,526.45 $ N/A 103,919.52 $ 109,110.67 $ 114,560.52 $ 120,301.50 $ 126,317.40 $ N/A ASSISTANT PLANNER ACE 35.55 $ 37.29 $ 39.18 $ 41.13 $ 43.18 $ N/A 6,162.00 $ 6,463.60 $ 6,791.20 $ 7,129.20 $ 7,484.53 $ N/A 73,944.00 $ 77,563.20 $ 81,494.40 $ 85,550.40 $ 89,814.40 $ N/A ASSOCIATE PLANNER MID-MANAGEMENT 40.82 $ 42.86 $ 45.00 $ 47.26 $ 49.62 $ N/A 7,075.29 $ 7,429.45 $ 7,800.53 $ 8,191.14 $ 8,601.28 $ N/A 84,903.50 $ 89,153.35 $ 93,606.33 $ 98,293.70 $ 103,215.38 $ N/A BUILDING INSPECTOR I ACE 31.82 $ 33.43 $ 35.08 $ 36.83 $ 38.69 $ N/A 5,515.47 $ 5,794.53 $ 6,080.53 $ 6,383.87 $ 6,706.27 $ N/A 66,185.60 $ 69,534.40 $ 72,966.40 $ 76,606.40 $ 80,475.20 $ N/A BUILDING INSPECTOR II ACE 37.13 $ 38.98 $ 40.93 $ 42.98 $ 45.13 $ N/A 6,435.87 $ 6,756.53 $ 7,094.53 $ 7,449.87 $ 7,822.53 $ N/A 77,230.40 $ 81,078.40 $ 85,134.40 $ 89,398.40 $ 93,870.40 $ N/A BUILDING OFFICIAL (CAPITOLA) MID-MANAGEMENT 56.13 $ 58.94 $ 61.89 $ 64.98 $ 68.23 $ N/A 9,729.64 $ 10,217.06 $ 10,727.84 $ 11,263.52 $ 11,827.25 $ N/A 116,755.65 $ 122,604.67 $ 128,734.04 $ 135,162.25 $ 141,926.98 $ N/A CITY CLERK CONFIDENTIAL 46.14 $ 48.45 $ 50.86 $ 53.41 $ 56.08 $ N/A 7,996.92 $ 8,397.17 $ 8,816.29 $ 9,256.97 $ 9,720.56 $ N/A 95,963.04 $ 100,766.05 $ 105,795.45 $ 111,083.62 $ 116,646.69 $ N/A CIVIL ENGINEER/PROJECT MANAGER MID-MANAGEMENT 46.93 $ 49.28 $ 51.75 $ 54.33 $ 57.05 $ N/A 8,135.15 $ 8,542.69 $ 8,969.76 $ 9,417.66 $ 9,889.00 $ N/A 97,621.83 $ 102,512.30 $ 107,637.12 $ 113,011.94 $ 118,668.02 $ N/A COMMUNITY SERVICE OFFICER POA 31.61 $ 33.20 $ 34.85 $ 36.59 $ 38.43 $ 40.37 $ 5,479.07 $ 5,754.67 $ 6,040.67 $ 6,342.27 $ 6,661.20 $ 6,997.47 $ 65,748.80 $ 69,056.00 $ 72,488.00 $ 76,107.20 $ 79,934.40 $ 83,969.60 $ CUSTOMER SERVICE - OFFICE COORDINATOR ACE 24.15 $ 25.37 $ 26.64 $ 27.96 $ 29.39 $ N/A 4,186.00 $ 4,397.47 $ 4,617.60 $ 4,846.40 $ 5,094.27 $ N/A 50,232.00 $ 52,769.60 $ 55,411.20 $ 58,156.80 $ 61,131.20 $ N/A DEPUTY CITY CLERK ACE 29.93 $ 31.44 $ 33.00 $ 34.65 $ 36.39 $ N/A 5,187.87 $ 5,449.60 $ 5,720.00 $ 6,006.00 $ 6,307.60 $ N/A 62,254.40 $ 65,395.20 $ 68,640.00 $ 72,072.00 $ 75,691.20 $ N/A DEVELOPMENT SERVICES TECHNICIAN ACE 29.93 $ 31.44 $ 33.00 $ 34.65 $ 36.39 $ N/A 5,187.87 $ 5,449.60 $ 5,720.00 $ 6,006.00 $ 6,307.60 $ N/A 62,254.40 $ 65,395.20 $ 68,640.00 $ 72,072.00 $ 75,691.20 $ N/A ENVIRONMENTAL PROJECTS MANAGER MID-MANAGEMENT 43.27 $ 45.43 $ 47.70 $ 50.09 $ 52.60 $ N/A 7,499.81 $ 7,875.21 $ 8,268.56 $ 8,682.61 $ 9,117.36 $ N/A 89,997.70 $ 94,502.55 $ 99,222.72 $ 104,191.32 $ 109,408.30 $ N/A EQUIPMENT OPERATOR ACE 28.80 $ 30.25 $ 31.75 $ 33.36 $ 35.02 $ N/A 4,992.00 $ 5,243.33 $ 5,503.33 $ 5,782.40 $ 6,070.13 $ N/A 59,904.00 $ 62,920.00 $ 66,040.00 $ 69,388.80 $ 72,841.60 $ N/A HUMAN RESOURCES ANALYST CONFIDENTIAL 36.11 $ 37.90 $ 39.81 $ 41.81 $ 43.91 $ N/A 6,259.07 $ 6,569.33 $ 6,900.40 $ 7,247.07 $ 7,611.07 $ N/A 75,108.80 $ 78,832.00 $ 82,804.80 $ 86,964.80 $ 91,332.80 $ N/A INFORMATION SYSTEMS SPECIALIST CONFIDENTIAL 35.64 $ 37.42 $ 39.29 $ 41.25 $ 43.31 $ N/A 6,177.60 $ 6,486.21 $ 6,809.65 $ 7,150.60 $ 7,507.73 $ N/A 74,131.19 $ 77,834.54 $ 81,715.74 $ 85,807.22 $ 90,092.71 $ N/A MAINTENANCE WORKER I ACE 20.99 $ 22.06 $ 23.15 $ 24.31 $ 25.53 $ N/A 3,638.27 $ 3,823.73 $ 4,012.67 $ 4,213.73 $ 4,425.20 $ N/A 43,659.20 $ 45,884.80 $ 48,152.00 $ 50,564.80 $ 53,102.40 $ N/A MAINTENANCE WORKER II ACE 28.13 $ 29.51 $ 31.00 $ 32.57 $ 34.21 $ N/A 4,875.87 $ 5,115.07 $ 5,373.33 $ 5,645.47 $ 5,929.73 $ N/A 58,510.40 $ 61,380.80 $ 64,480.00 $ 67,745.60 $ 71,156.80 $ N/A MAINTENANCE WORKER III ACE 31.00 $ 32.57 $ 34.21 $ 35.93 $ 37.72 $ N/A 5,373.33 $ 5,645.47 $ 5,929.73 $ 6,227.87 $ 6,538.13 $ N/A 64,480.00 $ 67,745.60 $ 71,156.80 $ 74,734.40 $ 78,457.60 $ N/A MECHANIC ACE 30.11 $ 31.61 $ 33.20 $ 34.84 $ 36.61 $ N/A 5,219.07 $ 5,479.07 $ 5,754.67 $ 6,038.93 $ 6,345.73 $ N/A 62,628.80 $ 65,748.80 $ 69,056.00 $ 72,467.20 $ 76,148.80 $ N/A MUSEUM CURATOR ACE 27.28 $ 28.66 $ 30.11 $ 31.60 $ 33.18 $ N/A 4,728.53 $ 4,967.73 $ 5,219.07 $ 5,477.33 $ 5,751.20 $ N/A 56,742.40 $ 59,612.80 $ 62,628.80 $ 65,728.00 $ 69,014.40 $ N/A OPERATIONS MAINTENANCE SUPERVISOR MID-MANAGEMENT 40.16 $ 42.18 $ 44.28 $ 46.48 $ 48.82 $ N/A 6,961.07 $ 7,311.20 $ 7,675.20 $ 8,056.53 $ 8,462.13 $ N/A 83,532.80 $ 87,734.40 $ 92,102.40 $ 96,678.40 $ 101,545.60 $ N/A PARKING ENFORCEMENT OFFICER ACE 25.74 $ 26.98 $ 28.35 $ 29.78 $ 31.26 $ N/A 4,461.60 $ 4,676.53 $ 4,914.00 $ 5,161.87 $ 5,418.40 $ N/A 53,539.20 $ 56,118.40 $ 58,968.00 $ 61,942.40 $ 65,020.80 $ N/A POLICE CAPTAIN POLICE CAPTAINS 60.50 $ 63.52 $ 66.70 $ 70.04 $ 73.55 $ 77.23 $ 10,486.26 $ 11,010.96 $ 11,561.24 $ 12,140.78 $ 12,748.48 $ 13,386.80 $ 125,835.10 $ 132,131.49 $ 138,734.82 $ 145,689.38 $ 152,981.78 $ 160,641.58 $ POLICE OFFICER TRAINEE POA 41.64 $ - $ - $ - $ - $ - $ 7,217.60 $ - $ - $ - $ - $ - $ 86,611.20 $ - $ - $ - $ - $ - $ POLICE OFFICER POA 43.73 $ 45.92 $ 48.17 $ 50.60 $ 53.14 $ 55.81 $ 7,579.87 $ 7,959.47 $ 8,349.47 $ 8,770.67 $ 9,210.93 $ 9,673.73 $ 90,958.40 $ 95,513.60 $ 100,193.60 $ 105,248.00 $ 110,531.20 $ 116,084.80 $ POLICE RECORDS TECHNICIAN ACE 26.87 $ 28.20 $ 29.62 $ 31.11 $ 32.66 $ N/A 4,657.47 $ 4,888.00 $ 5,134.13 $ 5,392.40 $ 5,661.07 $ N/A 55,889.60 $ 58,656.00 $ 61,609.60 $ 64,708.80 $ 67,932.80 $ N/A RECORDS MANAGEMENT CLERK ACE 26.91 $ 28.27 $ 29.71 $ 31.18 $ 32.74 $ N/A 4,664.40 $ 4,900.13 $ 5,149.73 $ 5,404.53 $ 5,674.93 $ N/A 55,972.80 $ 58,801.60 $ 61,796.80 $ 64,854.40 $ 68,099.20 $ N/A RECORDS MANAGER POA 38.43 $ 40.37 $ 42.38 $ 44.49 $ 46.75 $ 49.07 $ 6,661.20 $ 6,997.47 $ 7,345.87 $ 7,711.60 $ 8,103.33 $ 8,505.47 $ 79,934.40 $ 83,969.60 $ 88,150.40 $ 92,539.20 $ 97,240.00 $ 102,065.60 $ RECREATION & COMMUNITY SERVICES ASSISTANT ACE 20.87 $ 21.91 $ 23.03 $ 24.15 $ 25.37 $ N/A 3,617.47 $ 3,797.73 $ 3,991.87 $ 4,186.00 $ 4,397.47 $ N/A 43,409.60 $ 45,572.80 $ 47,902.40 $ 50,232.00 $ 52,769.60 $ N/A ECREATION & COMMUNITY SERVICES COORDINATOR ACE 31.02 $ 32.59 $ 34.23 $ 35.95 $ 37.71 $ N/A 5,376.80 $ 5,648.93 $ 5,933.20 $ 6,231.33 $ 6,536.40 $ N/A 64,521.60 $ 67,787.20 $ 71,198.40 $ 74,776.00 $ 78,436.80 $ N/A RECREATION DIVISION MANAGER CONFIDENTIAL 46.14 $ 48.45 $ 50.86 $ 53.41 $ 56.08 $ N/A 7,996.92 $ 8,397.17 $ 8,816.29 $ 9,256.97 $ 9,720.56 $ N/A 95,963.04 $ 100,766.05 $ 105,795.45 $ 111,083.62 $ 116,646.69 $ N/A RECREATION FACILITY CUSTODIAN ACE 20.16 $ 21.17 $ 22.23 $ 23.35 $ 24.50 $ N/A 3,494.40 $ 3,669.47 $ 3,853.20 $ 4,047.33 $ 4,246.67 $ N/A 41,932.80 $ 44,033.60 $ 46,238.40 $ 48,568.00 $ 50,960.00 $ N/A SENIOR ACCOUNTANT MID-MANAGEMENT 46.93 $ 49.28 $ 51.75 $ 54.33 $ 57.05 $ N/A 8,135.15 $ 8,542.69 $ 8,969.76 $ 9,417.66 $ 9,889.00 $ N/A 97,621.83 $ 102,512.30 $ 107,637.12 $ 113,011.94 $ 118,668.02 $ N/A SENIOR MECHANIC MID-MANAGEMENT 35.45 $ 37.23 $ 39.10 $ 41.05 $ 43.10 $ N/A 6,144.67 $ 6,453.20 $ 6,777.33 $ 7,115.33 $ 7,470.67 $ N/A 73,736.00 $ 77,438.40 $ 81,328.00 $ 85,384.00 $ 89,648.00 $ N/A SENIOR PLANNER MID-MANAGEMENT 46.93 $ 49.28 $ 51.75 $ 54.33 $ 57.05 $ N/A 8,135.15 $ 8,542.69 $ 8,969.76 $ 9,417.66 $ 9,889.00 $ N/A 97,621.82 $ 102,512.30 $ 107,637.12 $ 113,011.94 $ 118,668.02 $ N/A POLICE SERGEANT POA 53.54 $ 56.24 $ 59.05 $ 61.99 $ 65.11 $ 68.35 $ 9,280.27 $ 9,748.27 $ 10,235.33 $ 10,744.93 $ 11,285.73 $ 11,847.33 $ 111,363.20 $ 116,979.20 $ 122,824.00 $ 128,939.20 $ 135,428.80 $ 142,168.00 $ CITY MANAGER MANAGEMENT RANGE: 116.42 $ TO 116.42 $ RANGE: 20,179.82 $ TO 20,179.82 $ RANGE: 242,157.87 $ TO 242,157.87 $ CHIEF OF POLICE MANAGEMENT RANGE: 77.77 $ TO 99.17 $ RANGE: 13,479.77 $ TO 17,190.08 $ RANGE: 161,757.23 $ TO 206,280.92 $ DEPARTMENT HEADS MANAGEMENT RANGE: 70.12 $ TO 85.51 $ RANGE: 12,154.19 $ TO 14,821.66 $ RANGE: 145,850.32 $ TO 177,859.87 $ CITY OF CAPITOLA - PROPOSED SALARY SCHEDULE FOR APPROVAL 6-27-2024 Hourly Monthly Annual
384
Item 9 F.

RECREATION COORDINATOR Non-Exempt
Association of Capitola Employees
City of Capitola

RECREATION AND COMMUNITY SERVICES COORDINATOR
Capitola Recreation Community Services Coordinators provides services for the public in the following program areas:
 Recreation Classes, Facility Permits, Promotions & Events  Afterschool Rec Club, Summer Day Camp, Scholarships & Sports  Beach Lifeguard Service, Junior Lifeguard Program & Public Safety Outreach
Under direction of the Director of Recreation and Community Services the Community Services & Culture Coordinator plans, organizes, promotes and supervises recreational programs and events within assigned programmatic areas; performs related work as assigned.

Typical Duties
(May include but are not limited to the following based on area of assignment):
 Support the overall Department production of programs and events, when necessary, regardless of specific program area.
 Dependent on specific program area responsibilities supervise Community Services & Cultural Specialist, Facilities Custodian, Recreation Assistants, and/or other hourly employees.
 Develops new programs and events for residents and public. Organize community events within program area.
 Works within individual program budgets; helps to forecast revenues and program costs; monitors expenditures and revenues throughout fiscal year.  Recruits and hires or contracts with program staff; trains, schedules, directs, evaluates and processes payroll/payments for staff and independent contractors.
 Locates and schedules facilities for programs and events; coordinates logistics with participants, schools, outside agencies/organizations and other City departments as needed.
 Purchases and maintains supplies and equipment for programs and events.  Receives and responds to questions, suggestions, complaints and problems from the public; resolves problems as appropriate.
 Compiles regular reports on program performance; evaluates program effectiveness in terms of both qualitative and quantitative criteria; prepares written evaluations of program results as required; makes written and verbal recommendations on significant program changes.
 Writes various letters, memos, reports, and proposals as required.  Develops and implements procedures and policies for programs assigned. 385
Item 9 F.

RECREATION COORDINATOR Non-Exempt
Association of Capitola Employees
 Conducts informal assessments and surveys to determine recreational needs and interests of the community.
 Supports registration and all front office tasks as needed.  Manage and support evacuation site/sheltering operations during local or regional emergencies.

In addition to the above, the following duties may also be performed in specific program areas as assigned.

Recreation Classes
 Recruit and vet Class Instructors, to offer the community assorted activities, for youth, adults and seniors.
 Evaluates program proposals submitted by independent contractors, plans and schedules program, facility timing and logistics.
 Monitors class enrolment and success, boost promotion for under enrolled classes; cancel classes; processes credits or refunds.

Facility Permits: Community Center
 Maintain Community Center schedule for public rentals and recreation activities.  Process applications by rental groups for use of City facilities and issue permits and guidelines.
 Communicates with City Departments regarding general maintenance needs of the facility.

Facility Permits: Parks
 Process applications submitted for Park Use permit for use of City recreation facilities and park spaces and issue permits and guidelines.  Facilitate necessary insurance for Park Use permit.
 Maintain park schedule for public rentals and recreation activities.

Promotions
 Develop Department’s promotional activity for all programs and identify new promotional opportunities.
 Designs promotional and social media campaigns for programs and events; writes and distributes promotional material; works with front office staff to design flyers and other special promotional materials such as t-shirts, posters, buttons, etc.
 Works with other staff to produce seasonal recreation department activity guides.

Events
 Coordinate with City and Recreation Staff to host Capitola’s community and Art & Cultural events;
 Supervise the submission of necessary permits and/or additional insurance.  Recruit and schedule contractors, vendors and volunteers; collect vendor payment and annual paperwork for operation within the City. Submit for contractor payment.
386
Item 9 F.

RECREATION COORDINATOR Non-Exempt
Association of Capitola Employees
Afterschool Rec Club
 Collaborate with SUESD staff for use of facility to operate afterschool program for elementary and middle school located at New Brighton Middle School.  Develop and provide family and youth engagement programs to support residents during non-school hours.
 Develop and schedule program enrichment opportunities; evaluate professional operation and contracts with vendors.

Camp Capitola
 Serve as Camp Director for Camp Capitola, a summer day camp program that offers summer recreation activities and field trips to youth.  Maintain ACA accreditation, participate in educational opportunities related to ACA standards and assure best practices for camp operation are met.  Develop and schedule program enrichment opportunities; evaluate professional operation and contracts with vendors.

Scholarship
 Collaborate with outside entities for scholarship application review and award analysis.
 Distribute scholarship allocations to participants. Communicate regarding awards. Track fund balance and provide annual reports.

Sports Programs
 Creates schedules for league; communicate expectations with team captains, schedule staff and contractors, purchases equipment and supplies.  Monitors field conditions; coordinates work and repairs with Public Works; schedules, and if needed, performs field maintenance and preparation.

Beach Lifeguard Services
 Serve as City of Capitola Lifeguard Captain and execute duties as position requires.
 Maintain high professional standards as a USLA Open Water Lifeguard; active involvement in CSLSA as a professional lifeguard and represent Capitola Chapter.
 Maintain USLA Open Water Lifeguard Agency Certification as the City’s Lead Instructor. Work with agency partners for annual Academy and EMS response.

Junior Guards
 Organize local competitions, maintain partnerships with local Junior Guard agencies.
 Attend Junior Guards Parents Club meeting and collaborate regarding local and regional competitions and other activities.

Public Safety Outreach
 Coordinate ocean safety program. Secure funding to promote programs.  Provide training programs to the public, city and other agencies in CPR & First Aid.
387
Item 9 F.

RECREATION COORDINATOR Non-Exempt
Association of Capitola Employees

WORKING CONDITIONS
Position requires prolonged sitting, standing, walking, reaching, twisting and turning, kneeling, bending, squatting and stooping in the performance of daily activities. The position also requires grasping, repetitive hand movement and fine coordination in using a computer keyboard. Additionally, the position requires far and near vision when reading and using a computer. Acute hearing is required when providing phone and personal service. Also required: the need to lift, drag and push files, boxes, containers, supplies and field equipment weighing up to 50 pounds; setting up tables and chairs, re-folding and re-stacking tables and chairs, and moving sliding room dividers. For Lifeguard Captain: prolonged sun exposure, running on sand while carrying 20 lbs and swimming in adverse weather and ocean conditions for an extend period of time.

MINIMUM QUALIFICATIONS
Knowledge:
 Principles and practices of planning, promoting and coordinating recreation and cultural programs.
 Basic techniques of needs assessment and program evaluation.  Budget development and control.

Skills:
 Strong organizational skills to effectively coordinate program and events.  Excellent customer service skills.
 Good oral communication and interpersonal skills.
 Ability to handle registration transactions made by check, cash or credit card.  Good written communications skills to prepare clear and concise reports, proposals, contracts, correspondence, advertising copy and press releases.  Ability to supervise others in a fair and kind manner, which enables and empowers them to be the best representatives of the department and its goals possible.

Abilities:
 Develop creative and effective promotional materials.  Effectively utilize computers and relevant software and technology, including online applications, website design and social media.
 Understand, interpret and apply regulations, policies and procedures.  Research relevant information and data.
 Develop and maintain administrative procedures, records and budgets.  Effectively hire, train, supervise and evaluate staff.  Establish and maintain cooperative working relationships with a wide variety of individuals and organizations.
 For Lifeguard Captain:
o Ability and stamina to perform lifeguard duties
o Annually complete 500-meter ocean swim in under 10 minutes o Adopt effective course of action in emergency situations 388
Item 9 F.

RECREATION COORDINATOR Non-Exempt
Association of Capitola Employees
o Maintain constant observation of an assigned area for hazardous conditions and take appropriate action to protect the public from those hazards.
o Vision corrected to 20-40.

OTHER REQUIREMENTS
 Willingness to work evenings, weekends, and holidays as needed.  Operate a vehicle to run errands. Must possess a valid California driver’s license and safe driving record.

EDUCATION AND EXPERIENCE
Any combination of education and experience that provides the above knowledge, skills and abilities combined with any required licenses is qualifying. A typical way to obtain the required qualifications is to possess the equivalent of the following: a Bachelor’s degree from an accredited college or university in recreation, sociology, public administration, or a related field; and one year of responsible administration experience in coordinating community programs or events, including some supervisory responsibility. USLA Certification or other USLA Standard training and minimum cumulative total of 1,000 hours of employment in no fewer than three seasons as a seasonal open water lifeguard or full-time open water lifeguard.

REASONABLE ACCOMMODATION FOR THE DISABLED
If special accommodations are necessary at any stage of the examination process, please provide City of Capitola with advance notice and every attempt will be made to consider your request.

WORK ELEGIBILITY
Under federal law, the City of Capitola may employ only individuals who are legally able to work in the United States as established by providing documents specified in the Immigration Reform and Control Act of 1986.
 All recreation department potential staff must be fingerprinted.

Effective Date:
389
Item 9 F.

COMMUNITY SERVICES AND RECREATION DIRECTOR
Class specifications are intended to present a descriptive list of the range of duties performed by employees in the class. Specifications are not intended to reflect all duties performed within the job.

Definition
This is a department head classification, responsible for the overall function and success of the Community Services and Recreation Department. Under general direction of the City Manager, plans, organizes, manages, and provides direction and oversight for the City's recreation programs, special events, and City sponsored cultural and leisure programs. Coordinates assigned activities with other City departments, officials, outside agencies, and the public. Fosters cooperative working relationships among City departments and with intergovernmental and regulatory agencies and various public and private groups. Provides highly responsible and complex professional assistance to the City Manager in areas of expertise. Performs other work as required.

This is an at-will classification.

Supervision Received and Exercised
Works under the general guidance and direction of the City Manager. Exercises supervision over all department staff, including but not limited to Community Service and Recreation Coordinators, Community Service and Recreation Assistants, Facility Custodian, part-time staff, temporary/seasonal staff, and volunteers.

Essential Duties and Responsibilities
Essential and other important responsibilities and duties may include, but are not limited to, the following:
 Administrators and manages the Community Services and Recreation Department by setting priorities, distributing workload to staff, and making policy decisions on department functions.  Determines goals and objectives of Department and motivates staff to meet established goals.
 Plans, organizes, manages, controls, and evaluates with staff, the City's recreational programs including youth programs, adult and youth sports, adult and youth classes, cultural arts, and special events; oversees the Public Art Program; and oversees the City’s Lifeguard service.
 Plans, directs and coordinates budgeting functions for the department and implements the department budget for payroll, materials and supplies, Public Art, and Capital Improvement Projects.
 Trains, motivates, and directs department personnel. Evaluates and reviews work for acceptability and conformance with department standards, including program and project priorities and performance evaluations. Works with employees on performance issues; implements City personnel policies and procedures. Works with staff to resolve questions and concerns.
 Manages and participates in the development and administration of the department's annual budget; forecast funds needed for staffing, equipment, materials, and supplies; directs the monitoring of and approves expenditures; directs and implements adjustments, as necessary.  Provides leadership and direction in the development of short and long-range plans; gathers, interprets, and prepares data for studies, reports and recommendations changes; coordinates department activities with other departments and agencies as needed. 390
Item 9 F.
 Represents the department to other City departments, elected officials, and outside agencies.

Explains and interprets programs, policies, and activities. Identifies and resolves significant issues within the department.
 Responds to difficult and sensitive public inquiries and complaints. Identifies resolutions and alternative recommendations.
 Determines work procedures, prepares work schedules, and expedites workflow; studies and standardizes procedures to improve efficiency and effectiveness of operations.  Issues written and oral instructions; assigns duties and examines work for exactness, neatness, and conformance to policies and procedures.
 Represents the Department at Art and Cultural Commission meetings  Participates in and makes presentations to the City Council and a variety of boards/commissions; attends and participates in professional group meetings; stays abreast of new trends and innovations in the field of Community Services and Recreation  Assesses community recreation interests and makes recommendations to ensure productive implementation of City recreation programs.
 Monitors changes in laws, regulations, and technology that may affect City or department operation. Implements policy and procedural changes as required.  Direct the development of grants, corporate sponsorships, donations, and other fundraising programs to support services and programs.
 Prepares, reviews, and presents staff reports, various management and information updates, and reports on special projects as assigned by the City Manager.  Perform other duties as assigned.

Desired Minimum Qualifications
Education and Experience:
(A) Graduation from a four-year college or university with a degree in recreation or a closely related field.
(B) Six (6) years of progressively responsible experience in the recreation field with at least two years’ experience at the management level of progressively responsible recreation supervisory and administration experience including community center programming; or (C) An equivalent combination of education and experience.

Necessary Knowledge, Skills and Abilities:

Administrative principles and practices, including goal setting, program development, implementation, and evaluation, and supervision of staff, either directly or through subordinate levels of supervision.

Public agency budgetary, contract administration, City-wide administrative practices, and general principles of risk management related to the functions of the assigned area.

Organizational and management practices as applied to the analysis and evaluation of projects, programs, policies, procedures, and operational needs, principles, and practices of municipal government administration.

Principles, procedures, and practices for planning, implementing, and maintaining a variety of recreation and leisure activities and programs through community participation.

Applicable Federal, State, and local laws, rules, regulations, ordinances, and organizational policies and procedures relevant to assigned area of responsibility. 391
Item 9 F.

Methods and techniques for the development of presentations, contract negotiations, business correspondence, and information distribution; research and reporting methods, techniques, and procedures.

Techniques for providing a high level of customer service by effectively dealing with the public, vendors, contractors, and City staff.

Develop and implement goals, objectives, policies, procedures, work standards, and internal controls for the department and assigned program areas.

Special Requirements
Valid state driver's license or ability to obtain one.

Tools and Equipment Used
Personal computer, including office productivity software and program scheduling software, calculator; copy and fax machine; phone; cash register, automobile.

Physical Demands
The physical demands described here are representative of those that must be met by an employee to successfully perform the essential functions of this job. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions.

While performing the duties of this job, the employee is frequently required to walk, sit, and talk or hear. The employee is occasionally required to use hands to finger, handle, feel or operate objects, tools, or controls; and reach with hands and arms. The employee is occasionally required to climb or balance; stoop, kneel, crouch, or crawl.

The employee must occasionally lift and/or move up to 50 pounds. Specific vision abilities required by this job include close vision, color vision, and the ability to adjust focus.

Work Environment
The work environment characteristics described here are representative of those an employee encounters while performing the essential functions of this job. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions.

While performing the duties of this job, the employee occasionally works in outside weather conditions. The employee is occasionally exposed to wet and/or humid conditions, toxic or caustic chemicals.

The noise level in the work environment varies from quiet to moderately loud both in the office and in the field.

Created 6/2024
City Council Approved: 6/27/2024
392
Item 9 F.

PROPOSED BUDGET
FISCAL YEAR 2024-25

CITY OF CAPITOLA
Capitola, California
393
Item 9 F.

Budget
Process
Proposed Budget distributed:

May 3rd
FAC Meetings:

May 14th and May 21st
City Council Meetings:

May 16th and May 30th
City Council provided direction
for budget adoption tonight
394
Item 9 F.

General Fund & City Council Goals
• Updated ending funding balance
• Proposed & Planned Budget balanced
• Maintaining estimated balance of $642,000
• $500,000 target fund balance
• $100,000 employee downpayment assistance
• $42,000 undesignated
• Utilizing $239,000 of general fund resources for City Council Goals
• Employee downpayment assistance - $100,000
• PD facility improvements - $65,000
• Lifeguard equipment storage- $25,000
• Crosswalk daylighting - $10,000
395
Item 9 F.

General Fund & City Council Goals
• Utilizing $239,000 of general fund resources for City Council Goals (cont.)
• Citywide digital applications - $5,000
• Elections outreach - $4,000
• Translation services - $5,000
• Website updates - $7,000
• Portable stage for events - $7,000
• Art & Cultural - $5,000
396
Item 9 F.
• 10 Projects
• $16.6M
Prior Year Appropriations
• 1 project
• $621k – special revenue (pavement)
• Council Goals
• 3 Projects FY24-25 $100k
Recommended Appropriations
• Storm Damage Repairs
• 2 Individual Projects $400k
Not Inclusive of
Proposed FY
2024-25
Capital
Improvement
Program
397
Item 9 F.

Mid-Year Budget Review
• Revenues:
• Potential sales tax increase related to ballot measure • Review performance of other key revenue sources
• TOT, Cannabis tax, building permits, etc.
• Expenditures:
• Potential amendments related to ballot measure
• Review expenditures
• Tracking on budget
• Possible cost savings
398
Item 9 F.

Summary
• FY 2024-25 and FY 2025-26: general fund structurally balanced utilizing Measure F funding
• FY 2027-28: sunset of Measure F Dec. 2027, causes general fund to become imbalanced
• Reserves remain at target levels
General Fund structurally balanced
• Sales Tax & TOT revenue growth slowing
• Staff will continue to closely monitor sales tax, TOT, parking, and cannabis business tax revenues
General Fund Revenues
• Maintaining high service levels
• Continued funding for Community Grant program
• Combination of general fund and CDBG-CV grant funding General Fund Expenditures
399
Item 9 F.

Recommended Action

1. Approve the Resolution
adopting Fiscal Year 2024-2025
Operating Budget and Capital
Improvement Program

2. Approve the Resolution
adopting the associated salary
schedule and new job
descriptions.
400
Item 9 F.

Capitola City CouncilJune 27, 2024

Capitola City Council
June 27, 2024