Capitola City Council
March 13, 2025

REVISED 3/13/2025 4:50 PM
City of Capitola
City Council Meeting Agenda
Thursday, March 13, 2025 – 6:00 PM
City Council Chambers
420 Capitola Avenue, Capitola, CA 95010
Mayor: Joe Clarke
Vice Mayor: Alexander Pedersen
Council Members: Gerry Jensen, Margaux Morgan, Melinda Orbach Regular Meeting of the Capitola City Council – 6 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 Gerry Jensen, Margaux Morgan, Melinda Orbach, Alexander Pedersen, and Mayor Joe Clarke

2. Additions and Deletions to the Agenda

3. Presentations
Presentations are limited to eight minutes.

A. Proclamation Honoring March 2025 as American Red Cross Month

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

A. Item 8A - Correspondence Received
B. Item 8B - Correspondence Received
C. Item 8C - Correspondence Received
D. Item 8D - Correspondence Received

5. 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.

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

7. Consent Items
1 City Council Meeting Agenda – March 13, 2025
City of Capitola Page 2
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 special meeting on February 26, 2025 and the regular meeting on February 27, 2025.

B. Fiscal Year 2025-26 Budget Calendar
Recommended Action: Approve the Budget Meeting Calendar for Fiscal Year (FY) 2025-26.

C. Lease with MRA Sales, Inc.

Recommended Action: Authorize the City Manager to sign a three-year lease agreement between the City of Capitola and MRA Sales, Inc. for concessionary beach services at Esplanade Park, for a total revenue of $6,399.

D. FY 2023-24 Audit Report
Recommended Action: Receive a report on the FY 2023-24 annual audit.

8. 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. Rail Trail Project Town Hall Plan
Recommended Action: Approve the proposed town hall meeting plan and outreach strategy.

B. Public Outreach Long Term Plan for Capitola Wharf
Recommended Action: Receive report regarding the draft long term concepts for the Capitola Wharf and direct staff to proceed with public outreach in April and May 2025 utilizing the concepts.

C. Annexation Request for 1610 Bulb Avenue
Recommended Action: Authorize the Mayor to sign a letter to the Local Agency Formation Commission in support of or opposition to the annexation of 1610 Bulb Avenue into Capitola city limits.

D. Appointment of Capitola Representative to Measure Q Oversight Advisory Board Recommended Action: Appoint a member of the public to serve as Capitola’s representative on the Measure Q Citizens Oversight Advisory Board.

9. Adjournment - The next regularly scheduled City Council meeting is on March 27, 2025, 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
2 City Council Meeting Agenda – March 13, 2025
City of Capitola Page 3
City of Capitola, California YouTube Channel
To Join Zoom Application or Call in to Zoom:

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 by clicking on the Home Page link “Meeting Agendas/Videos.” Archived meetings can be viewed from the website at any time. 3 1
Gautho, Julia
From: MK St.Clair <[email protected]>
Sent: Friday, March 7, 2025 5:34 PM
To: City Council
Subject: Please accept the Capitola staff recommendation: Option A as the best solution, with a safe and wide buffered bike route. Vote yes!
Dear Capitola City Council, Mayor and Vice-Mayor,
OpƟon A for Park Avenue is a beƩer choice for Capitola. OpƟon A will see a beƩer trail that will be built sooner, at a lower cost, and is a good choice for the environment.

Every delay is more expensive, and hinders construcƟon of the Coastal Rail Trail. ResidenƟal property owners and commercial developers along the Coastal Rail Trail are well aware that delays, and cost overruns confuse and cause frustraƟon with the general public.

Every single infrastructure project takes years of detailed planning and implementaƟon. Support our RTC professionals.

Our RTC professionals serve the greater community.

I am a long term resident and homeowner.

Sincerely,
M. Kate St.Clair
Aptos, CA 95003
Sent from my iPhone
4 Item 4 A.
1 Gautho, Julia
From: michael routh <[email protected]>
Sent: Saturday, March 8, 2025 11:45 AM
To: City Council
Subject: Item 8A
Mayor and Council members,
The scope of the proposed town hall and Ɵme allowed for public input feels like trying to cram 50 people into a VW bug.

The town hall agenda should focus on the Park Ave trail realignment and nothing else. That is the primary issue the city is dealing with currently. All the other 7 rail trail topics can be addressed as they become relevant.

Limit the presentaƟon and discussion to the current issue affecƟng the community - Park Ave trail realignment - so there is adequate Ɵme for public input. Otherwise, this will not be a true "town hall", but simply an overview of the enƟre rail trail project. This proposal does not accurately represent the council or the communiƟes request for a town hall.

Mick Routh
Sent from my iPad
5 Item 4 A.
1 Gautho, Julia
From: James Weller <[email protected]>
Sent: Saturday, March 8, 2025 5:23 PM
To: Clarke, Joe; City Council; Pedersen, Alexander; Gerry Jensen; Margaux Morgan; Melinda Orbach
Cc: Goldstein, Jamie ([email protected]); Kahn, Jessica; [email protected]; [email protected]; Regional Transportation Commission
Subject: [PDF] Commentary re: Park Avenue coastal rail trail alignment Attachments: PARK AVENUE RAIL TRAIL LETTER 030825.docx; 059m35.pdf Councilmembers, City Manager, and Public Works Director:

Please read and consider my comments attached, as you prepare to deal with this issue.

Best regards,
Jim Weller
1970 46th Avenue, Capitola
510-325-1361 (cell phone)
6 Item 4 A.

TO: Capitola City Councilmembers, City Manager, Public Works Director FROM: Jim Weller, 1970 46th Avenue, Capitola
Re: SCCRTC plan for the coastal rail trail alongside Park Avenue.

It consternates me that there is such entrenched opposition to this proposed public works project. The proposal promises a major public active transportation improvement, to be completed soon and at no cost to the City. Really now, what’s not to like about this? It’s a WIN-WIN-WIN proposition.

I prefer Option A, but either Option A or Option B as proposed would (1) increase public traƯic safety; would (2) improve public accessibility for pedestrians and cyclists; and would (3) cost the City of Capitola nothing, ever.

The proposal would accomplish traƯic calming and safety improvements already planned and funded by the City, but would be instead paid for with RTC funds, thereby saving Capitola some $80,000 allocated for work on Park Avenue. All the work would be funded by the RTC and designed and directed by the County Department of Community Development and Infrastructure. The City would have no maintenance responsibility for the coastal rail trail, not ever. This project would, in eƯect, be a realignment of the planned RTC rail trail from the southern side of the railroad corridor to the northern side.

Despite the hollow threat of a lawsuit, the project would not run afoul of Measure L for several reasons.

The purpose of Measure L was to “improve safety and reduce traƯic . . . while protecting the Capitola Trestle.” The findings spelled out in the measure were all about “the historic Capitola Trestle . . . [and a] detour from the Trestle through Capitola Village . . . onto bike lanes and sidewalks in the local Capitola street network and across the Stockton Avenue Bridge.” Clearly, the concern had to do with Capitola Village streets and sidewalks, not Park Avenue or anywhere else in Capitola outside the Village.

The only definite provision in Measure L constraining action by the City was: “No city . . . department, agency or employee shall expend any funds or resources related to the construction, reconstruction, operation, maintenance, financing, marketing, or signage for a detour of the Trail onto Capitola streets or sidewalks.” The Park Avenue coastal rail trail alignment project would not involve any City funding or expenditures. Some may complain that the time City staƯ has devoted to coordinating with the County and the RTC concerning this project counts as “resources,” but staƯ time is paid for in salaries, not per task, so there will be no expenditures of time and eƯort that 7 Item 4 A.
wouldn’t have been devoted to something else otherwise. Moreover, this project is not a “detour,” and it’s not “onto” any streets or sidewalks.

Even if one were to stretch the ambit of Measure L to encompass the whole Capitola incorporated area, including areas west of Soquel Creek and east of Monterey Avenue/Bay Avenue, the present RTC coastal rail trail plan won’t involve any kind of “construction, reconstruction, operation, maintenance, financing, marketing, or signage” done or paid for by the City under any possible scenario. All of it will be RTC work.

Furthermore, the proposed 12-foot wide coastal rail trail alignment alongside Park Avenue will not be on or in Park Avenue. It would be aligned along the presently existing bike lane on the southerly side of Park Avenue, mostly within the RTC-owned railroad corridor and only partly within the 40-foot wide original Park Avenue street right of way. The presently existing unpaved shoulder area and the eucalyptus trees on the south side of the street are within the boundary of the railroad corridor land owned by the RTC.

Park Avenue is apparently a city street. Interestingly though, it appears that the Park Avenue land title – the street corridor – is vested in the State of California. It was originally granted in 1933 by the former land owners, Fred D. Hihn, JeƯfie Hihn, and Minnie Hihn, to the California State Park Commission, for state park purposes, along with the land comprising New Brighton Beach State Park.

According to that 1933 deed, Park Avenue was “to be used as a public road.” It was dedicated to public use as the state park access road. In 1945, the state park road was realigned and accordingly, Southern Pacific Railroad Company granted to the State of California 1.29 acres of its adjoining land, comprising the present 40-foot width of Park Avenue, from Cabrillo Street to Coronado Street. I found no indication that the Sate of California ever relinquished its Park Avenue title to the City of Capitola, which was incorporated in 1949.

In 1962, a 10.73-foot widening strip of land on the northern side of Park Avenue, between Cabrillo Street and Coronado Street, was granted to the City of Capitola.

I can provide all the documentation supporting those findings. A copy of the 1973 survey map of Park Avenue is attached for reference.

JW
8 Item 4 A.
9 Item 4 A.
1 Gautho, Julia
From: Clark Cochran <[email protected]>
Sent: Saturday, March 8, 2025 9:42 PM
To: City Council
Subject: Capitola Council Letter About RTC Plans
Dear Capitola Mayor and City Council,
The RTC presentation at New Brighton School was a disappointment. I would have preferred they first make a presentation about their plans and the route options they are proposing rather than only having tables covered with detailed drawings for review and discussion with RTC representatives. I believe many attendees came away confused.

It became clear to me at this meeting that the RTC is in this for the (very) long haul as they are planning that it will take at least a new federal administration and then a decade or more to have a viable rail and trail. Potentially and probably much longer for rail. Further, it was also made clear to me the funding will come for the rail, so there will be no trail without rail. The RTC has both short term and long term aka “ultimate” plans. The City of Capitola must differentiate between these two and decide how best to achieve both.

The RTC continues to push their agenda. The citizens and council of Capitola must remain vigilent to track their changing options and plans that otherwise might go unnoticed like including two rail lines along Cliff Drive to allow trains to pass one another.

So as a summary before going into detail, for Section 11B spanning Soquel Creek, the trestle can be reinforced and used as a trail until the ultimate solution is determined and approved.

This should be considered a short term solution using available funds. Next, the part of Section 10 starting at Opal can be run on the existing rail corridor. Below are details for both statements.

Spanning Soquel Creek has never been planned or funded by the RTC. This section is a future ultimate goal. Hence their short term detour through the village was proposed. Now at the March 4th RTC meeting they proposed a new trail only bridge to be constructed directly adjacent to the trestle on the ocean side. This should be considered as a potential long term solution but since no real architectural design has been presented to see if it would be acceptable to Capitola, no cost has been mentioned, and the trestle itself is a huge TBD, a decision approving this option should wait for further details. Instead, I suggest a short term solution using a portion of the currently allotted $67.6M funding for Sections 10 and 11 to stabilize the trestle for trail use. This work was stated as costing $7.5M in 2021 dollars (per SCCRTC FAQ dated October 2023) and an RTC member told me at the meeting this would likely cost $10+M now. A new deck trail walkway would keep the rails so no railbanking issues would be affected. If necessary, have riders walk their bikes across. Ultimately the trestle 10 Item 4 A.
2 may need to be torn down and replaced for the rail but, until such time in the distant future this decision is made, let’s at least have a trail.

The part of Section 10 from Opal to Live Oak has two bad but doable long term proposal options. The first is detouring onto Jade and Brommer Streets and then through Jade Street Park next to Opal Cliffs School and then onto 47th. Traffic and all on street parking would be greatly impacted, not to mention this would violate the Capitola Municipal Code thus opening a potential citizens lawsuit. The second option uses Nova Drive on the other side of the tracks and zigzags on other quiet streets located in unincorporated Santa Cruz County except for a one block detour along very busy 41st in Capitola. This detour option just kicks the can into Santa Cruz County’s court. It’s not an ultimate solution. The ultimate solution is to use the existing rail corridor. Now the RTC states there is insufficient right of way width to use it. Mobile homes are too close. If needed, they should think about an easement from the back yards of houses fronting Nova in the County. BUT, and this is a big but, there is sufficient width available without these measures.

Specifically, the RTC shows a 36’ wide rail trail width is needed. 22’ for rail (11’ each side of the rail centerline), plus 12’ for the trail, and an additional 2’ for fencing and walls.

HOWEVER, the California PUC General Order 26-D “Regulation Governing Clearances on Railroads and Street Railroads with Reference to Side and Overhead Structures, Parallel Tracks, Crossings of Public Roads, Highways and Streets” (docs.cpuc.ca.gov) Section 3.2 states that minimum side clearances from the centerline of standard gage industrial railroads for all structures above the top of the rail shall be 8’-6”. Further, in Section 9.2 of the same document it states that for railroad tracks that are not for freight (I would say that includes future RTC light rail passenger trains) the minimum side clearance is 30” from the widest point on the equipment being operated. This means a 29’ wide easement is needed plus the width for walls and/or fences as needed.

BUT again, there is a big but. The above rail clearance is also stated in the RTC Rail Transit Feasibility Study Final Report (sccrtc.org) on page 18 and in note 16, in Section 1.5.1.2 “Right of Way Width”. BUT it further states, “The absolute minimum width required for both a trail and single track rail in tangent (straight) sections of the right-of-way is 25 feet”. Note 16 further states, “Transportation design standards require multi-use bi-directional trails to be a minimum of 8 feet wide and require a minimum of 17 feet for train operations (8’-6” from the centerline of the tracks).” This means at constricted areas, such as the section along the mobile home park in question and potentially other locations along the rail line, the minimum width needed would be 27’ (17’ + 8’ + 2’ maximum added for walls and fences – less if the fences are chain link or similar narrow width). I recently walked the trail and measured the width at the mobile home section. The minimum width was 29’-6” with 12’ or a bit more on each side of the rails themselves.

Unless there are other government documents superseding these and the RTC is disregarding its own Final Report, why is the RTC now requiring a 36’ width? If narrower is good enough for the State of California, why not the RTC? 11 Item 4 A.
3 Sincerely,
Clark Cochran
Jewel Box resident
12 Item 4 A.
1 Gautho, Julia
From: Barry Scott <[email protected]>
Sent: Sunday, March 9, 2025 3:01 PM
To: City Council
Subject: Please approve the Town Hall AND agendize a vote to approve the Park Avenue trail plans
Dear Council,
The RTC and City Planners have provided a remarkable fully funded safe trail plan; Option A or Option B need to be approved.

Please vote to hold the Town Hall as your staff has recommended and bring the Park Avenue plan back to the council for approval at a future meeting.

Thank you,
Barry Scott,
Santa Cruz County taxpayer and homeowner.
13 Item 4 A.
1 Gautho, Julia
From: Molly Ording <[email protected]>
Sent: Sunday, March 9, 2025 6:15 PM
To: City Council
Subject: Your approval of trail plan A/B
Dear City Council members:

Please do not spend any more Ɵme studying and holding more town halls in considering approval of the Park Avenue trail plan A or B! Any further delays only adds to the miss informaƟon campaign and the expenses that the the involved parƟes have had to expend! You have an opportunity to be decisive and forward thinking! This is what you are elected to do! Do not defer or delay further!! Thank you!!
Molly I Ording
218 Monterey Avenue
capitola, Ca. 95010
Sent from my iPhone
14 Item 4 A.
1 Gautho, Julia
From: James Weller <[email protected]>
Sent: Monday, March 10, 2025 3:01 PM
To: Clarke, Joe; City Council; Pedersen, Alexander; Gerry Jensen; Margaux Morgan; Melinda Orbach
Cc: Goldstein, Jamie ([email protected]); Kahn, Jessica; [email protected]; [email protected]; Regional Transportation Commission
Subject: Re: Commentary re: Park Avenue coastal rail trail alignment Councilmembers, City Manager, and Public Works Director:

In my letter to you of March 8, 2025 concerning this subject, I stated that "I found no indication that the Sate of California ever relinquished its Park Avenue title to the City of Capitola.” I enquired with the State Parks land management office, and they informed me that State Parks quitclaimed its title to Park Avenue to the City of Capitola in 1996. That answers that question.

The fact that the 12-foot wide section of the MBSST proposed alongside Park Avenue is largely situated within the RTC’s railroad corridor remains - for what it's worth as a part of the situation under consideration.

Best regards,
Jim Weller
On Mar 8, 2025, at 5:23 PM, James Weller <[email protected]> wrote:

Councilmembers, City Manager, and Public Works Director:

Please read and consider my comments attached, as you prepare to deal with this issue.

Best regards,
Jim Weller
1970 46th Avenue, Capitola
510-325-1361 (cell phone)
<PARK AVENUE RAIL TRAIL LETTER 030825.docx>
<059m35.pdf>
15 Item 4 A.
1 Gautho, Julia
From: Comcast <[email protected]>
Sent: Monday, March 10, 2025 7:12 PM
To: City Council
Subject: Rail trail
If we direct the trail through the city it does nothing for bikers. I don’t have an e-bike and the hills through town pretty much prevent me from riding south. With the trail across the trestle I could ride to Aptos.

Through town pretty much changes nothing, commits us to paying for a money losing train that doesn’t relieve traffic. What are people thinking? There seems only downside. You represent Capitola. Locals don’t want a rail only solution which is what this is.

Best regards,
Peter Shamshoian
16 Item 4 A.
1 Gautho, Julia
From: Christine Miguel <[email protected]>
Sent: Monday, March 10, 2025 7:27 PM
To: City Council
Subject: RTC meeting March 4
My name is Christine Miguel and I live in Capitola at the Castle Mobile Estates. I went to RTC meeting last week and have to say the only thing I learn was RTC was planning on putting a platform station on 38th Ave. I’m not sure where they expect people to park their cars since they think there is going be a high number of riders, 38th Ave is busy enough now. Other than that I learned absolutely nothing, it was the same meeting they had last year at the Grange, a total waste of my time which also got my anxiety going again. There still is no answers how often the train will run, what design they plan to use, how are they going to build this train to NO WHERE, or the bike path since they don’t have the money or land to do it. I support the City Council on pausing on this measure until they can answer ALL questions. I fully support Measure L where the trail CAN NOT divert traffic on the city streets. That is what the voter’s wanted and we need to support there vote.

Sent from Yahoo Mail for iPad
17 Item 4 A.
1 Gautho, Julia
From: Kim <[email protected]>
Sent: Tuesday, March 11, 2025 7:43 AM
To: City Council
Subject: Please hold a town hall and build the Park Avenue trail without delay Dear Council,
The RTC and City Planners have provided a remarkable fully funded safe trail plan, OpƟon A or OpƟon B need to be approved.

Please vote to hold the Town Hall as your staff has recommended.

And bring the Park Avenue plan back to the council for approval at a future meeƟng.

Thank you,
Kim Salisbury
Local Resident for 50 years
18 Item 4 A.
1 Gautho, Julia
From: Aaron Johnson <[email protected]>
Sent: Friday, March 7, 2025 5:18 PM
To: City Council
Subject: Possible Spam Please Support Both Trail and Rail Dear Capitola Mayor and Council,
I am wriƟng in support of the Park Ave Rail Trail as proposed by the RTC and County staff. Living in Live Oak I do most of my shopping by bicycle in Capitola. Because of car traffic I keep most of my stops west of 41st, usually at Trader Joes, Palace Art, OSH, and New Leaf. But I also bicycle from Pleasure Point down to the Village. Even though the funding available now is for bike paths on the other side of town, I strongly support it. Anything that Capitola can do to be more bicycle and pedestrian friendly will be great!
I also hope that the rail corridor will be preserved for passenger rail use, I think that it is a golden opportunity for Capitola Village. For visitors it is one of the most scenic spots on the line, and for locals the area is oŌen congested with cars and limited in parking and public transit opƟons. On summer weekends, when heading somewhere by car I’ve oŌen been stuck in traffic on the freeway with visitors driving between Aptos and the Boardwalk. They miss Capitola, but I bet they would love to hop off the train aŌer seeing it from the trestle, and they could ease parking throughout their day.

I’m 63 now and I hope to bike for a long Ɵme, but when that’s no longer possible I’m sƟll hoping that I’ll ride the train someday. Please keep both rail and trail opƟons alive, and move along as quickly as you can! Thank you,
Aaron Johnson
19 Item 4 A.
1 Gautho, Julia
From: John <[email protected]>
Sent: Monday, March 10, 2025 4:17 PM
To: Gautho, Julia
Subject: Fwd: 8A, B, C. Re: [City Council Meeting Agendas] City Council Meeting Follow Up Flag: Follow up
Flag Status: Flagged
Warmly JM
Begin forwarded message:

From: John <[email protected]>
Date: March 8, 2025 at 9:47:41 AM PST
To: Capitola Clerk's Office <[email protected]>, [email protected] Subject: 8A, B, C. Re: [City Council Meeting Agendas] City Council Meeting Hello Neighbors,
I am ever but a reflection, a shadow on the wall/ still, the topsy turvy of someone acting on my advice as to my kryptonite was unexpected. That a good old man was the first person I had to drop the veil for is quite amusing on the upside. 8A - YOU direct the meeting requirements. Make RTC put on the event you want. 8B - we need someone crazy enough to invest there and to do that we need the group to OWN whatever structures they build, Oscar Jewell Griswold would get my point. 8C - the more the merrier
Harder than I guessed to put the ship back on course too. I’m growing on some of y’all ~ hard as I try to repel. Showing up after all is my weakness. The road goes on forever and the party never ends.

Warmly JM
The World is a great mirror. It reflects back to you what you are. If you are loving, if you are friendly, if you are helpful, the World will prove loving and friendly and helpful to you. The World is what you are.
20 Item 4 A.
2 On Mar 7, 2025, at 3:50 PM, City of Capitola California <capitola[email protected]> wrote:

City Council Meeting
Calendar Date:

Thursday, March 13, 2025 - 6:00pm
Body:

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:

Meeting
link: https://us02web.zoom.us/j/83328173113?pwd=aVRwcWN3RU03Zzc2d kNpQzRWVXAydz09
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 inperson 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.

Meeting Information
Agenda Link:
21 Item 4 A.
3 Agenda
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22 Item 4 A.
1 Gautho, Julia
From: kameron tessier <[email protected]>
Sent: Monday, March 10, 2025 4:48 PM
To: City Council
Subject: Please hold a town hall and build the Park Avenue trail without delay Follow Up Flag: Follow up
Flag Status: Flagged
Dear Council,
The RTC and City Planners have provided a remarkable fully funded safe trail plan, Option A or Option B need to be approved.

Please vote to hold the Town Hall as your staff has recommended and bring the Park Avenue plan back to the council for approval at a future meeting.

Thank you,
Kameron Tessier, President
College Democrats at UCSC
23 Item 4 A.
1 Gautho, Julia
From: Fabian Leonor <[email protected]>
Sent: Tuesday, March 11, 2025 9:40 AM
To: City Council
Subject: Town Hall Meeting/ Build Build The Park Avenue Trail Dear City Council,
the RTC and the city planners have provided a remarkable fully funded safe trail plan, option A or option B needed to be approved.

Please vote to hold the town hall as your staff has recommended. And bring the Park Ave plant back to the council for approval at the future meeting.

Thank you.

Fabian C Leonor
Board President
Pajaro Valley Loaves and Fishes
831.254.4316

24 Item 4 A.
1 Gautho, Julia
From: Steven Plumb <[email protected]>
Sent: Tuesday, March 11, 2025 10:29 AM
To: City Council
Subject: Diversion of Trail from the railroad bed
Dear City Council,
Please don’t allow the RTC to move the future SC County bicycle trail from the Rail right of way to Capitola city streets.

Thank you,
Steven Plumb
25 Item 4 A.
1 Gautho, Julia
From: michael routh <[email protected]>
Sent: Tuesday, March 11, 2025 10:39 AM
To: City Council
Subject: Item 8A staff recommendation
Sent from my iPad
26 Item 4 A.
1 Gautho, Julia
From: chris amsden <[email protected]>
Sent: Tuesday, March 11, 2025 10:47 AM
To: City Council
Subject: Park Ave. Detour and Town Hall
Hello Capitola City Council,
I'm writing regarding the proposed upcoming Town Hall on Apr. 2nd to discuss the proposed Park Ave. detour of the "rail trail" onto Capitola city streets. Following the 3/13 City Council meeting Council requested from the RTC additional options to "Options A and B" presented by the RTC. City Manager Goldstein then specifically requested from the RTC:
1). A plan for the Coastal Trail to be located on the Capitola trestle 2). A plan to implement it within a defined timeline
To date, I have not heard that the RTC has provided this information. While Capitola residents appreciate the opportunity to discuss this with our elected leaders in a Town Hall meeting, any decision to approve or deny this Park Ave. detour seem premature without the additional information requested from the RTC. I would request that the City Council postpone any future agenda items to vote on this matter until the RTC has provided the additional information requested by both City Council and Capitola City staff.

Sincerely,
Chris Amsden
Phone: (408) 386-7484
27 Item 4 A.
1 Gautho, Julia
From: Kevin Maguire <[email protected]>
Sent: Tuesday, March 11, 2025 12:27 PM
To: City Council; Goldstein, Jamie ([email protected]); Gautho, Julia Subject: 3.13.2025 City Council Meeting Agenda Iteam 8 A. Rail Trail Project Town Hall Plan - Request to Postpone April 2nd Town Hall Meeting Due to Lack of Requested Information
Dear Mayor Clark and Members of the Capitola City Council, We, the Concerned Cititzens of Capitola, formally request that the April 2nd Town Hall Meeting be postponed until the full set of requested information is available for the public and city officials to make an informed decision regarding the Coastal Rail Trail Segments 10 & 11.

At the February 13th City Council Meeting, multiple council members, including Councilmember Morgan, Councilmember Jensen, and Mayor Clark, expressed concerns about the rushed timeline, lack of critical project details, and need for a comprehensive public engagement process. Following this, the Council voted to postpone any decision until a properly informed Town Hall meeting could be held.

The community is already confused, with the RTC meeting less than a month before this meeting. The Public will think this is a duplicate event, attendance and comprehension will be limited.

RTC acted against City Manager Jamie Goldstien concerns and hosted an unsupported,, rushed "Town Hall" / workshop, in an attempt to influence the public, without producing all the requested information.

As this "Town Hall" was protested by many residents. A majority of the people I spoke with at the event were unaware the City had nothing to do with this event. They were shocked, and confused. I would estimate 150-200 people attended. If you count the "Blue Circles" stickers that were handed out to Capitola Citizens, you can see it was about 70-80% residents in attendants. A far greater attendance from any gartherting to date, due in part to flyers and communications sent out from the Concerned Citizens of Capitola. The Public is not well informed on this issue.

However, with only a few weeks until the April 2nd Town Hall, the information requested remains incomplete. Proceeding without all the data contradicts the intent of the Council’s February 13th motion and denies the community the thorough discussion they deserve.

RTC Director Sarah Christense told Lookout Santa Cruz after the Capitola Town Hall that the decision to push back the report until the fall was her decision. "I don't want to rush this, becasue this is a big project that's transformative for our community"
Based on those statements, how critical this projet is to Capitola, so we are not pigeonholed, and lack of requested information for the public and council to make an informed decision, you have no choice but to postpone this April 2nd Town hall.
굓굔굕굖 Key Missing Information That Justifies Postponement 28 Item 4 A.
2 1. Capitola General Plan Supports Multi-Purpose Transportation, Not Just Rail  The Capitola General Plan emphasizes a multi-purpose trail system that integrates various transportation modes, including biking and pedestrian paths.  The current project proposal diverts sections of the trail onto city streets, which is inconsistent with the General Plan’s goal of safe, separated active transportation routes.  The community deserves clarity on whether the proposed changes align with the City’s longterm mobility goals before making any irreversible commitments.

2. No Clear Plan for the Capitola Trestle & Rail Corridor Use  The Council explicitly requested a structural assessment of the Capitola Trestle to determine whether it can support a continuous Rail Trail within the corridor.  The ATP Grant application submitted by Santa Cruz County presents the trail as being in the rail corridor, yet the current design proposes detours onto city streets, raising concerns about the project's integrity and transparency.
 Additionally, the City needs to evaluate the feasibility of railbanking the Capitola Trestle to preserve future rail options while allowing a trail to move forward now. (I will send in the 47 pages ATP application from Rob Tidmore)

3. Legal Review of Measure L Compliance & Rail Corridor Rights  Measure L, passed by Capitola voters, legally requires the Rail Trail to remain within the rail corridor and prohibits using city resources for projects that divert it onto city streets.  Proceeding with a design that conflicts with Measure L could expose the City to legal challenges, yet a full legal analysis has not been provided.  The City should also examine the process of adverse abandonment and railbanking as viable options to legally secure the corridor for trail use while maintaining the potential for future transit.

4. Capitola Was NOT Included in 2022’s Measure D—Decisions Here Must Be Capitola-Specific  Measure D (2022) applied only to unincorporated areas of Santa Cruz County, NOT Capitola.  The results of that vote should not be used to override the legally binding Measure L, which applies specifically to Capitola and was passed by Capitola voters.  The City must ensure that any decisions regarding the Rail Trail respect Capitola’s unique planning process and legal framework.

5. No Long-Term Cost Analysis for Capitola’s Financial Commitment  Councilmember Morgan specifically called for a long-term cost analysis, including the financial burden of using city-owned property for the project.  The RTC has admitted that project costs have increased by $27 million, yet no clear funding plan has been provided.
 If new taxes or reallocations of local funds will be required, residents deserve to know before any decisions are made.

6. Public Engagement Has Been Rushed & Lacks Transparency 29 Item 4 A.
3  Councilmember Jensen, Mayor Clark, and RTC Director Sarah Christensen all acknowledged that more time is needed to gather and present a complete set of data.  The March 4th RTC Town Hall failed to provide substantive answers to community concerns, and residents do not want a repeat of that flawed process.  Given the complexity of this decision, rushing an April 2nd Town Hall contradicts the City’s promise of open and transparent public engagement.
뢂뢃뢄뢅뢆뢇 What We Are Asking
We respectfully request that the April 2nd Town Hall Meeting be postponed until all the following conditions are met:
1⃣ A full engineering and feasibility report on the Capitola Trestle is presented, determining whether the trail can safely remain in the corridor.
2⃣ A complete Segment 10 & 11 project overview is released, covering Brommer, Jade Street, Park Avenue, and the Capitola Trestle in a single, unified presentation. 3⃣ A legal review on Measure L compliance and potential litigation risks is completed and shared with the public.
4⃣ A detailed financial report is published, outlining total project costs, city financial commitments, and any expected tax increases or funding reallocations. 5⃣ A real Town Hall format is adopted, allowing for meaningful public input and direct Q&A, instead of a rushed, pre-scripted presentation. (2 hours is not enough) The Council originally voted to ensure that ALL of this information would be made available before a decision was made. This has not yet happened.

Moving forward with the April 2nd date undermines the transparency and accountability that the community expects. We urge you to respect the concerns voiced by City Council members and residents by postponing the meeting until a fully informed public discussion can take place.

We appreciate your consideration and look forward to a more thorough and community-driven process.

Summary of Febuary 13th City Council Meeting:

Council member Morgan said to the RTC they are putting us in a real tough position with this change up, she said we owe it to our community to push further into exploring what else the RTC has to offer to us, we want an update on the budget, what options beside A or B, what does a larger buffer look like? What does the buffer between the bike lanes and cars look like, City needs to look at a long term cost analysis if we are going to use our city property, a less rush decision making process. Make sure the outreach is proper and the information is there. Council member Jensen said he hears a lot of conflicting information an a town hall is absolutely imperative, this is a Huge decision for Capitola, refering to March 20th meeting that we have all the information, Budget information, at one time as a community together. We need a whole overview, Brommer, Jade St, Park, the Trestle, need the whole story at one time. Concerns about leagal review and Measure L. Jensen stated "communty counts" and its important we all have the information together and make this decision together. I think its key to wait till after the end of March, lets have A town hall meeting, one meeting. Mayor Clark wants to hear from the people in the mobile homes, more info on Measure L, pause and have a town hall, so we can make a better decision. 2.13.25 City Council Motion (3 to 1) to postpone a decision on this item and host a Town Hall Meeting where staff from the City and County will provide updates on the use of the Trestle, review long30 Item 4 A.
4 term impacts of the project, review impacts of potential litigation from Measure L, and an overview of Rail Trail Project impacts in Capitola RTC Director Sarah Christen stated after the Motion vote to postpone, that they bought the Rail line with the vision being passenger Rail and Trail, and the Trail aspect obviously has a lot more public support... The Transit aspect, that project is a long-term project and we have a lot of time from now until IF and When it comes to fruition... I am a little bit concerned about what council member Jensen requested. Its a significant amount of information and I'm worried that we're not going to be able to pull the information together on time. For us to detail everything in Capitola its going to take time... The Concept report summer to Fall (Coastal rail trail project and the Rail Project is larger and more complex) Council member Jensen mention if you need 8 weeks or more, we are patient we want to do this ONCE, and do it right, it is complex. There is more info coming out March 20th, and whatever it takes to do it right, is what we're all about here in Capitola Sincerely,
Kevin Maguire
Cliffwood Heights
Capitola, CA
31 Item 4 A.
1 Gautho, Julia
From: michael routh <[email protected]>
Sent: Tuesday, March 11, 2025 1:02 PM
To: City Council
Subject: Item 8A staff recommendation concerns
ALSO UNDER ITEM 8A ON THE AGENDA -
"Following the Town Hall staff is recommending a special city council meeƟng on April 17 to make a final decision on the Park Ave alignment of the rail trail". In other words, the staff is sƟll giving the council the opƟon to violate Measure L.

The staff recommendaƟon should be - "Following the town hall staff is recommending the city council uphold Measure L and reject the Park Ave alignment.

In all my decades on the Council and Planning Commission I have NEVER seen city staff give a recommendaƟon that offers an opƟon to violate a city ordinance.

Mick Routh
Sent from my iPad
32 Item 4 A.
1 Gautho, Julia
From: Stephanie Tetter <[email protected]>
Sent: Tuesday, March 11, 2025 2:36 PM
To: City Council
Subject: Trail.

As a long-time Capitola resident, I want the trail to stay on the rail corridor.

I do NOT want the trail on city streets. It will take away parking and create unsafe conditions through our already congested streets. We will likely see an increase in accidents and injuries.

Ballot measures have been confusing! But you need to enforce Measure L.

The bottom line : EVERYONE would like to have a trail! Keep the bike trail where it belongs — in the rail corridor. PLEASE listen to the people of Capitola.

Thank you
Stephanie Tetter
33 Item 4 A.
1 Gautho, Julia
From: John <[email protected]>
Sent: Tuesday, March 11, 2025 5:55 PM
To: Gautho, Julia; City Council
Subject: Follow up Re: 8A, B, C. Re: [City Council Meeting Agendas] City Council Meeting Follow Up Flag: Follow up
Flag Status: Flagged
Item 8A follow up
Keep in mind. Patience is a virtue is a culturally ubiquitous saying. We can wait for the ZEPRT report. It’s super bleak. Once the federal funding falls through in September and that report is released we are going to deeply regret routing a ‘trail’ through the lower village and park. Monterey is Railbanking coastal line for BRT/Surf Bus. San Diego is desperate to move track away from the cliff.

Budgets are where our radical solutions within our control lie. Take a breath. Listen to the waves. Don’t make silly choices.

Plus if you want you can just say we’ll wait until the ZEPRT release and no need to rile things up with a meeting now. Just going to be a bunch of locals advocating for what we voted for again and again. Rail and Trail on the corridor. Class I not Class IV / 3ft buffer lulz. And a bunch of outsider non residents agitating for whatever FORT tells them too these days. It used to be Rail and Trail on the corridor as recently as 2022. But those folks are shills for freight. Don’t even care about Pajaro Station.

Warmly JM
On Mar 10, 2025, at 4:17 PM, John <[email protected]> wrote:

Warmly JM
Begin forwarded message:

From: John <[email protected]>
Date: March 8, 2025 at 9:47:41 AM PST
To: Capitola Clerk's Office <[email protected]>, [email protected]
Subject: 8A, B, C. Re: [City Council Meeting Agendas] City Council Meeting
Hello Neighbors,
34 Item 4 A.
2 I am ever but a reflection, a shadow on the wall/ still, the topsy turvy of someone acting on my advice as to my kryptonite was unexpected. That a good old man was the first person I had to drop the veil for is quite amusing on the upside.
8A - YOU direct the meeting requirements. Make RTC put on the event you want.
8B - we need someone crazy enough to invest there and to do that we need the group to OWN whatever structures they build, Oscar Jewell Griswold would get my point.
8C - the more the merrier
Harder than I guessed to put the ship back on course too. I’m growing on some of y’all ~ hard as I try to repel. Showing up after all is my weakness. The road goes on forever and the party never ends.

Warmly JM
The World is a great mirror. It reflects back to you
what you are. If you are loving, if you are friendly, if you are helpful, the World will prove loving and
friendly and helpful to you. The World is what you
are.

On Mar 7, 2025, at 3:50 PM, City of Capitola California <[email protected]> wrote:

City Council Meeting
Calendar Date:

Thursday, March 13, 2025 - 6:00pm
Body:

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.
35 Item 4 A.
3 Other ways to Watch:
 Spectrum Cable Television channel 8
 City of Capitola, California YouTube Channel
To Join Zoom Application or Call in to Zoom:

Meeting
link: https://us02web.zoom.us/j/83328173113?pwd=aVRwcW
N3RU03Zzc2dkNpQzRWVXAydz09
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.

Meeting Information
Agenda Link:

Agenda
More Information
View full details on our website
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36 Item 4 A.
1 Gautho, Julia
From: Martha Macambridge <[email protected]>
Sent: Tuesday, March 11, 2025 6:01 PM
To: City Council
Subject: Park Avenue Rail Trail_Please approve Option A or B Follow Up Flag: Follow up
Flag Status: Flagged
Dear City Council members,
First off, I would like to thank the RTC for all of their work on the Coastal Rail Trail project. It is a complicated project, made more difficult by the obstructionist group, called Trail Now.

I do have to wonder if Trail Now should change their name to Trail Never, as they seem to never support any part of the Rail Trail project. Trail Now works very hard at spreading misinformation, including standing outside of Council Chambers at the last meeting and handing out their propaganda.

Every delay escalates costs, potentially causing more delays for building the trail. There is also the possibility of losing funding from the State. This project is too important to the residents of Santa Cruz County. The Coastal Rail Trail is a benefit for everyone living in our county from Davenport to Watsonville.

I am an avid cyclist and cycle from Santa Cruz to Aptos on a regular basis. I see lots of cyclists using Park Avenue and McGregor. There are some tricky spots to navigate for cyclists on both Park and McGregor. Our safety is at stake here. Please do not let a group of NIMBY's bully the council into more delays. Delays only jeopardize our safety out there on the roads, as well as our health and wellbeing.

I think that the truth is cyclists and walkers will continue to use Park Avenue in either scenario, meaning if there is a trail or not. The question is, if the trail is not built, does the City of Capitola want the liability that could arise if someone is involved in a person to car accident? With the rest of the trail being built right now, people are going to come to use the trail, and like myself, they will wind up on the streets (Park Ave) to complete their cycling or walking adventure.

Please do not allow a trail gap in the Rail Trail project, instead, approve Option A or Option B.

Thank you,
Martha Macambridge
40 year resident of Santa Cruz County
RIP Democracy 11.5.2024

37 Item 4 A.
2 38
Item 4 A.
1 Gautho, Julia
From: Carl A. Seibert <[email protected]>
Sent: Tuesday, March 11, 2025 8:32 PM
To: City Council
Subject: Hold A Town Hall For The Park Ave. Rail Trail ASAP Please Follow Up Flag: Follow up
Flag Status: Flagged
Dear Capitola City Council:

I respectfully ask that you approve one of the funded "Rail/Trail" Options, either Option A, or Option B.
(I believe Option A seems more practical and realistic.) There's been a lot of controversy over our county's "Rail Trail" issue over the years and I'm surprised
more folks haven't been able to visualize this as an "Investment". An investment in our county's future, one that can
be expanded and improved upon by future generations of Santa Cruz county residents.

I'm certain those future residents will appreciate you being visionary and forward-thinking for implementing this.

I understand your staff has recommended that you hold a Town Hall Meeting on this matter, I strongly endorse that.

And please bring the Park Avenue Plan back for approval, the sooner the better, thank you.

Sincerely,
Carl Seibert
Soquel
[email protected]
39 Item 4 A.
1 Gautho, Julia
From: Leslie Nielsen <[email protected]>
Sent: Wednesday, March 12, 2025 6:52 AM
To: City Council; Goldstein, Jamie ([email protected]); Gautho, Julia Subject: Item 8A comment 3/13/25 city council
Follow Up Flag: Follow up
Flag Status: Flagged
Mayor Clark and City Council,
In the motion made on 2/13, council member Morgan commented on the tough position the RTC has put you in. It appears that your staff is adding to that tough position for you.

The staff recommendation in Item 8A to add a final decision on the park avenue alignment to the 4/17 city council meeting and links to the 2/13 staff report really surprised me.

If you don't like the answer, just try again?
Why is City Staff putting the city council in a position to violate their oath of office? The City needs to follow the law or change it.

The town hall could be helpfull, but any notion that it is a precursor to an agenda item to take action in violation of the law should be removed.

Leslie Nielsen
40 Item 4 A.
1 Gautho, Julia
From: Teresa Maguire <[email protected]>
Sent: Wednesday, March 12, 2025 10:51 AM
To: Clarke, Joe; Pedersen, Alexander; Gerry Jensen; Margaux Morgan; Melinda Orbach Cc: City Council
Subject: Capitola City Town Hall too soon since RTC just held one - ** Protect the Monarch Butterfly ** - NEPA and ESA are pending!!
Attachments: Capitola_Escalona_Gulch_Monarch_Site.jpg
I am concerned residents in Capitola, CA, regarding the $84 million budget allocated for Segments 10 & 11 of the Coastal Rail Trail Project and the lack of transparency regarding the cost breakdown, environmental impact, and tree removal analysis. (Current estimates are 117 million or more now?)
There is pending Federal Protection to designate the Monarch Butterfly's as Endangered species and protect their habitat. We need to Pause Park Avenue plans! While we support expanding active transportation options in Santa Cruz County, we believe it is critical to ensure that taxpayer dollars are spent wisely and that the environmental impact is fully understood before proceeding with irreversible decisions.The public is prioritizing walking and biking over Rail.

RTC just held a town hall, with this so close, this is rushed if they havent provided ALL the information requested by the council on Febuary 13th.Its rushed to then turn around after April 2nd town have the council vote on these alternatives in a short period of time.. 2 Hour scripted Town hall is not enough time.

This needs to be pushed back until we have all the information. After August perhaps?  Will the City of Capitola be compensated for the loss of our Land? A small 1100 sq foot house on Pine St is listed for over 2 million dollars. Our land is limited and valuable!  If we are trying to prioritize Housing, removing over 26 parking spaces on Park Avenue is not wise.

The rezoning of 600 Park Avenue will negative impact our neighborhood.  Safety concerns about diverting trail traffic into the village and Park Avenue, SCCRTC stated in the Grant application process that Brommer, Park, Monterey and other streets as stressful, and unsfae and that is why the grant was needed to build a separated trail away from the roadway walking and biking trail on the Rail Line. How much of the Trail is in the Rail line corridor in Capitola?
 Grant also had funds for the Capitola Trestle. What was that for? Why did they ask for 67 million and have another 17 million. For 4.15 miles of trail, that is about $20 Million a mile, that seems an awful lot.
 Where would Train Stations be? And would they provide Parking?  It appears the 67 million dollar grant is not going to the trail with the rails as proposed.  Capitola citizens' voices and concerns need to be prioritize, the impact, cost, saftey, impact to business, summer congestions and ultimately how this will shape Capitola for decades. Do we want a 12 foot sidewalk? Or the proposed trail on the rail right-of-way that was sold to us. . 41 Item 4 A.
2 Keep the Trail on the Rail.

Specific Requests for Transparency
We formally request SCCRTC to provide a detailed breakdown of the following:
1⃣Full Cost Breakdown for the $84 Million Allocation
 How is the $84 million being allocated?
 What portion is for trail construction vs. rail preservation costs?  How much is allocated for tree removal, habitat mitigation, bridges, drainage, and safety barriers?
 What contingency funds are included in the budget, and how are cost overruns accounted for? 2⃣Cost Estimate for an Interim Trail in Phase 1 (Without Rail Removal)  What would be the estimated cost to build a trail using the existing railbed while leaving the tracks in place (railbanking)?
 How does the cost of the interim trail compare to the ultimate rail-with-trail project?  Would an interim trail qualify for ATP and Recreational Trails Program (RTP) funding at a lower cost?
3⃣Tree Removal: Interim Trail vs. Ultimate Plan
 How many trees will be removed under the ultimate plan (rail and trail)?  How many trees would be removed under an interim trail plan?  What specific mitigation strategies are in place for tree replanting and habitat restoration?  How will the removal of trees impact sensitive habitats, including monarch butterfly overwintering sites near Escalona Gulch?
4⃣Environmental Impact of Rail & Trail vs. Interim Trail  What are the stormwater, grading, and erosion impacts of the ultimate plan?  Does an interim trail reduce environmental harm by avoiding major excavation and tree removal?
 How does the ultimate plan comply with California Environmental Quality Act (CEQA) requirements related to habitat destruction and mitigation? Why This Information Is Urgent
The SCCRTC is making long-term financial and environmental commitments that will impact Capitola and surrounding areas for decades. Residents, businesses, and environmental advocates deserve full transparency before the project advances further.

Without a detailed cost breakdown and impact analysis, it is impossible for the public to fully evaluate the financial and environmental tradeoffs of the current plan versus an interim trail solution that preserves trees, reduces cost, and still provides safe biking and walking access. 42 Item 4 A.
3 Future Tax implications, funding and budget items from Capitola for the trail, and Rail and future rail service, maintenance. Will revenue be shared with our city to help pay for those expenses? Request for Public Disclosure
We formally request that SCCRTC:
脥 Provide a detailed cost breakdown of the $84 million budget, including trail, rail, environmental mitigation, and project management costs.
脥 Release a full comparison of tree removal and environmental impact for an interim trail versus the ultimate proj ec .vs. Alternate Option A or B
脥 Schedule a public information session to discuss these issues and allow for community input.

Thank you for your attention to this matter. We appreciate City Council commitment to improving active transportation, and we hope that our concerns will be addressed with full transparency and accountability.

We look forward to your response.

God Bless,
Teresa L. Maguire
CAPITOLA Resident
43 Item 4 A.
44 Item 4 A.
1 Gautho, Julia
From: Jacqui Rice <[email protected]>
Sent: Wednesday, March 12, 2025 3:18 PM
To: City Council
Subject: Rail Trail Project Town Hall Plan
Dear Capitola City Council Members,
As a property owner in the Venetian Court, I strongly urge you to proceed with the proposed rail trail. Not only will this trail provide additional areas to take in seas views, walk dogs, and stretch our legs, but it will provide a valuable pedestrian link to other communities and resources. This trail will be used by locals and provide a wonderful extension of our walkable Capitola Village. In light of the scarcity of parking spaces in the summer and the traffic congestion, having more accessible footpaths is also a boon to our local tourism as our visitors will have more options to explore our beloved area on foot. The rail trail also opens up many safe opportunities for recreation for children and adults alike. Please enforce the will of Santa Cruz County voters and allow the forward progress of the rail trail to continue.

Jacqui Rice

45 Item 4 A.
1 Gautho, Julia
From: Paula Bradley <[email protected]>
Sent: Wednesday, March 12, 2025 3:47 PM
To: City Council
Subject: [PDF] City Council Meeting 3/13/25, Item 8A - Public Comment Attachments: CC comment 03-13-25 Park Ave & Rail Trail workshop.pdf Follow Up Flag: Follow up
Flag Status: Flagged
see attached, thanks
Paula Bradley (she/her)
P. O. Box 1146 Capitola CA 95010
mobile (831) 345-5482
46 Item 4 A.

Thank you for scheduling a Town Hall for the Coastal Rail Trail project. The agenda is ambitious, and I hope with the materials, it will provide the information to lay some of the issues to rest particularly with the Park Ave trail realignment and Measure L. The Park Ave trail is not a trail in the village nor is part of the trestle project, it is simple 0.7 trail separate from other issues. The path is primarily on the SCRTC right of way and will be funded by the SCRTC. Sadly, for Capitola some misinformed people do not see the opportunity for improved safety and are muddling it to make is look like something it is not.

The Park Ave realignment is an opportunity to have a SAFE multi-use path that we can all use long before the rail trail project is built. I ride Park Ave frequently and this project is an opportunity for a less expensive, easier & faster to build, less disruptive to the monarch habitat and more scenic than a path on the rail right of way gully. It will have better neighborhood access and lighting also making it safer at night.

We could have a 0.7-mile Class IV separated, multi-use trail in a couple of years.

Hold the meeting, provide the information and DO NOT further delay or we miss the opportunity for the SCRTC funding and all we will have is painted lines and sharrows for years instead.
47 Item 4 A.
1 Gautho, Julia
From: Della Davis <[email protected]>
Sent: Wednesday, March 12, 2025 4:10 PM
To: City Council
Subject: Capitola section of trail
Follow Up Flag: Follow up
Flag Status: Flagged
Dear Council People,
The trail on or next to the tracks was what Capitola wanted. Do not let the incompetent RTC bully you into accepting this unsafe alternative. We voted on Measure L to protect the trestle and the town from redevelopment of the trestle to meet Federal
standards. Maybe the RTC should consider another option, such as using the trainline from Capitola to Watsonville as trail only. They can run the tourist train from 41st to the boardwalk. The train stops at Capitola!!
Trail only through Capitola.

D. Davis
204 Hollister Ave
Capitola
48 Item 4 A.
1 Gautho, Julia
From: Kevin Maguire <[email protected]>
Sent: Wednesday, March 12, 2025 9:19 PM
To: City Council
Subject: Capitola Town Hall - Park Ave detour / Capitola Trestle - RTC Railroad Bridge Replacement & Rehab cost ONE BILLION DOLLARS!!
Capitola Town Hall - Park Ave detour / Capitola Trestle - RTC Railroad Bridge Replacement & Rehab cost ONE BILLION DOLLARS!!
With new information out about the infeasible costs of this project.

We urge the Council to hold a meeting, hear from the citizens of Capitola. Keep our City land. And with a Billion Dollars in cost just for bridges (*Tracks not included) Vote to reject Option A or B. Please look into railbanking and building the trail on the Trestle and on the Railroad right of way.No need to hold a town hall and waste our time or $5,000 dollars of city funds.

Trail can be built and put into use in the next 3 - 8 years.

Train is 30-100 years out, and we already have an affordability issue, this will continue to compound that problem with Sales Tax, Property Taxes, etc.

The writing is on the wall, the Rail Dream is Dead. It wont reduce GHG, it would block our intersections every 10 minutes, and cause more pollution from idling vehicles.

Interim trail will save 600+ trees, and be the least impactful on the environment and our wallets. Will connect our communities as was the Vision of the MBSST. 49 Item 4 A.
2 50
Item 4 A.
1 Gautho, Julia
From: Cherylban <[email protected]>
Sent: Thursday, March 13, 2025 10:24 AM
To: City Council
Subject: Too rushed
Hello Capitola City Council Members,
It is appreciated to have town hall meeƟngs.

Yet, The meeƟng planned for April 2, 2025 in regards to the rail trail park ave is now in my opinion rushed.

Two reasons,
The meeƟng on March 12, about the cost of bridges to be rebuilt and new bridges is very important informaƟon for decision making.

The cost almost a billion dollars is beyond comprehension.

If this informaƟon had been provided at the very onset of rail - trail ConversaƟons, measure D might have been understood more accurately and measure D defeated.

We are just last night receiving this esƟmate of extensive massive cost for only an aspect of the rail trail project.

The cost of these bridges seems to take the train out of the realm of realisƟc possibiliƟes.

Next consideraƟon is that the Project Report that was due the end of March 2025, has been delayed unƟl an unknown date fall 2025.

If the report was completed as was believed this March, the informaƟon would be available before a town hall meeƟng.

We do not have a complete detailed picture to move in any clear decision making direcƟon by the ciƟzens of this county or the ciƟzens of Capitola and especially each of you, our City Council.

There are only piece meal decisions being made at tremendous cost in terms of dollars and expenditure of valuable Time and energy. It is becoming apparent that the idea of rail and trail at this Ɵme is premature.

It may be the Ɵme to plan for trail only and plan for trains in the future.

I want to Trust you are represenƟng our City with All the appropriate InformaƟon.

A CiƟzen of Capitola,
Thank-you,
Cheryl Ban
Sent from my iPhone
51 Item 4 A.
1 Gautho, Julia
From: Leslie <[email protected]>
Sent: Wednesday, March 12, 2025 7:27 PM
To: City Council
Subject: Possible Spam Support the Rail Trail on Park Ave! Dear Mayor and Council of Capitola,I am wriƟng to ask you to please put your full support towards approving and building the Park Ave Rail Trail as proposed by the RTC and County staff. Any delay risks losing the project completely. I want to be able to use this trail now, in my lifeƟme! Throwing it away would be a terrible waste. The trail is welldesigned. Unlike previous ideas for this stretch, this design offers ocean views and great neighborhood access, as well as being less expensive and protecƟng buƩerfly habitat. It is raised and buffered from the street. It is wide and safe. Please don't let this opportunity for Capitola slip away. Please rise to the occasion, show leadership, and get this trail built.

Leslie Cannon
916-335-1056
52 Item 4 A.
1 Gautho, Julia
From: Tim Matthews <[email protected]>
Sent: Thursday, March 13, 2025 10:34 AM
To: City Council
Cc: heather Matthews; Welch, Troy (TJ) ([email protected]) Subject: Possible Spam April 4 Town Hall
To whom it may concern,
I am a Santa Cruz county naƟve and have lived in Capitola for over thirty years. It has come o my aƩenƟon that the April 4 town hall may be premature as apparently all the informaƟon that the council has requested has not been received. In regards to the RTC rouƟng the trail through the village of Capitola and the use of city streets for the trail, I STRONGLY oppose this acƟon. The trail should remain on the RTC right of way! Thank you
Tim MaƩhews
300 Plum St. SPC 15
Capitola, CA
831 234 5389
53 Item 4 A.
1 Gautho, Julia
From: John <[email protected]>
Sent: Thursday, March 13, 2025 11:23 AM
To: City Council; Gautho, Julia
Cc: Gerry Jensen; Joe Clarke
Subject: Capitola City Council applying for Railbanking with city limits Hello Neighbors
We more than qualify for Railbanking within city limits. This only requires a council vote to start the process.

Here’s the RTC FAQ on railbanking. See Q16 - “Another approach would be for a third party, such as the RTC, to petition the STB for an adverse abandonment.” … or the City of Capitola. “Adverse abandonment is more complicated and comes with a heavier burden to demonstrate that the public convenience and necessity require that the operator’s common carrier obligations be extinguished. “
Capitola has reached that threshold - public convenience necessitates the use of the rail corridor for a trail, including the trestle. Forcing thousands of cyclists onto already congested surface streets like Cliff Dr and through the village is not safe.

Railbanking-Fact-Sheet-andFAQ_final
PDF Document · 194 KB
I prefer Railbanking because it only affects freight rail, it does not in any way limit passenger rail options.

Building the corridor to passenger not freight standards also helps solve the budget impossibilities.

There is no chance we will ever be able to produce the billions we will need to pony up to build a Freight line. San Jose is spending 12.5B for a 6 mile BART extension and even after fed and state grants they had 54 Item 4 A.
2 to find their 20% minimum. We don’t have the ability to bleed billions of dollars from our county budgets for urban renewal like this.

I get people don’t like me. But I haven’t been wrong yet. And this is math folks. We all know building to Freight is well beyond our county’s means. Sara from RTC knows it. The ZEPRT report straight up says it in governmentese.

Please don’t brick Capitola because your career is better served representing state over local interests.

FORT hides its donor list because it has names like Chevron and ConocoPhilips on it.

Tonight I request you ask speakers who wish to, to identify if they RESIDE in Capitola. Representative democracy means you represents YOUR voting constituency not the county. It’s pretty clear what residents want.

Measure D then Measure L then a new Measure D in 2022, all three votes have been clear majorities for a trail on the rail corridor. In Capitola both our supervisor districts voted for folks who believe the trail should remain on the corridor. I have no illusions about what sort of residents show up to the city council meetings,
I believe the argument we should respect the voters is the correct one. The voters want the trail on the corridor. They voted against the DCC endorsement machine en masse this cycle. Gerry crushed Melinda.

Take our politicians I think Melinda had less than 10 local donors. Manu and Kim were chosen over Lani and Kristen and Kim even had more local donors from Capitola than Kristen.

If you are going to appeal to the argument the voters have spoken, at minimum actually vote for what the voters have voted for.

And again, whatever else, your job is listen to your constituents and not a fossil fuel industry backed organization’s identity driven members. These folks don’t even care about passenger trains or south county. If they did they would be focused on Pajaro station like real local rail advocates such as RailNow.

They will turn around and ago again that the trail should never be diverted from the corridor as they have before when it becomes convenient. They say whatever is needed to keep Freight moving forward for their fossil fuel funders.

Please ask Jamie and Sara if it is realistic to believe our budgets can fund such projects even in the rosiest grant scenarios. Then ask what the grants’ environment looks like for the next few years.

The ATP grant is good through 2027. Monterey has an outstanding grant from 2018 they have extended twice. This grant too can be extended easily.

Let’s wait for the ZEPRT report. Park Ave will still be there in September. That’s a nothing amount of time by government standards and most of our federal funding is likely to be pulled in September too so we’ll have the data needed to make a responsible decision.

Warmly JM
55 Item 4 A.
1 Gautho, Julia
From: John <[email protected]>
Sent: Thursday, March 13, 2025 12:24 PM
To: City Council
Subject: Rail is Cooked Folks and we are never seeing the RAISE money Blindly throwing more money at a losing equity is a classic rookie mistake. Sell now. Or hold. The only stupidity is throwing more cash at it.
https://usa.streetsblog.org/2025/03/12/breaking-u-s-dot-orders-review-of-all-grants-related-to-greeninfrastructure-bikes Warmly JM
56 Item 4 A.
1 Gautho, Julia
From: reynie lave <[email protected]>
Sent: Thursday, March 13, 2025 12:29 PM
To: City Council
Subject: Rail trail town hall
I am wriƟng to express my feelings in regards to the Town Hall meeƟng on April 2nd.

Will all the informaƟon the City and residence asked for be available in a Ɵmely manner? If not then there is no use holding the meeƟng.

There is no rush on the City's part to get this done.

The RTC has got to be answerable to us.

Neither of the presented opƟons for the Trail on Park Avenue meet the expressed desires of the residences of Capitola.

We explicitly voted on Measure L to keep this from being an issue.

As your consƟtuency we expect you to listen to the majority of Capitol Residence and uphold their wishes.

It is evident that some on the council have forgoƩen the role of elected officials.

Measure L was voted on, passed and codified. Now it is your responsibility to uphold that vote. If your are unable to do this maybe DemocraƟc representaƟon is not your calling.

Thank you for your Ɵme and service
Reynie Lave
57 Item 4 A.
1 Gautho, Julia
From: Marie Martorella <[email protected]>
Sent: Thursday, March 13, 2025 2:16 PM
To: City Council
Subject: Meeting on March 13, 2025
Attachments: Marie Martorella Letter 031325.docx
Please add my letter to your agenda packet for the meeting being held tonight. Thank you Marie Martorella
58 Item 4 A.

Dear City Council
I, like so many others you’ve likely heard from in recent weeks, am strongly opposed to diverting any individuals through the City thus continuing to allow Measure L to be ignored.

It is my understanding that given this was voted on and codified, the Council cannot unilaterally decide to ‘ignore’ it. It feels very much ignored currently, and this has definitely touched a nerve in our small town.

The meeting the RTC held at New Brighton was not an actual public meeting; they were unable to answer hard questions regarding fixing the Trestle; in fact, they indicated that no one has asked them to do so since Measure L was passed. I find that hard to believe – I would hope that the necessary steps towards getting that trestle inspected, updated and safe for pedestrian use would be well underway at this point. If not, then who needs to request this? No one at the meeting could respond intelligently to this question.

As someone who lives near and views the Trestle on a daily basis since 1990, I can tell you that it is in dire need of upkeep and repair (something the RTC folks were NOT receptive to hearing at their get together). Kicking the can between the City and the RTC as to who is responsible for this is not productive. We need the Trestle to be safe for pedestrian passage; we voted for the trail to go over the Trestle SAFELY and we are years into this Measure being passed with zero movement towards making it a reality
We cannot support a rail in this county; it’s a nice thought but we do not have any infrastructure to support this. Our town would not be akin to a CalTrain or a BART for usage; this would be a small-town quasi-commuter train, but we are not set up to house loading/unloading stations nor do we have a robust transit system to take those using it, to where they need once the disembark.

However, we have a strong need and desire to use the current rail corridor for pedestrian travel. Our roads are getting busier (and will continue to do so with the influx of High Density Housing we are also looking to add) and we need safer passage for those not in a vehicle. Folks using the streets now on foot, bike/ebike/other methods like scooter/skateboard etc., are a hazard to those on the road in vehicles and to themselves as they navigate poorly designed roadways, more cars than ever and distractions from all sides. It’s hazardous for both the driver and the pedestrians.

Making the trail a reality sooner than later will alleviate a host of other issues but mainly keeping those not in vehicles, safe. It will also alleviate a lot of behind-the-wheel stress and anger for those trying to watch out for non-vehicle travelers.

Further, I would strongly encourage you to punt any decision making this evening, until the RTC provides their report due out now in August regarding any ‘improvements’ being requested of the City. The trail is one that should be happening regardless because we have a codified measure which was implemented but not yet being recognized; Park Avenue is another huge issue which has been brought to this Council to consider; This is absolutely not something the Council should be considering at all at this time, but certainly not until all the facts are available. If the City were to implement the trail as voted on, Park avenue would remain off the table for the RTC to try and strong arm the City into considering their half-baked ‘idea’.

Finally, having been at or watched the last few meetings, I would strongly encourage this Council to step back and remember that the citizens of this town voted you into a position to help make decisions for Capitola that have long- term benefits. One aspect of being in your position is to listen to feedback and suggestions from the citizens, regardless of any outside pressures that are being shared, and to do what is best for the community. When members of Council come to a meeting with already written responses which are read during their decision-making statements, your citizens are not uninformed, and they are not dumb. A pre-written statement indicates you have made up your mind before setting foot into that Chamber and gives the impression that you are clearly not interested in what your citizens have to say. This is not the way of public service.
59 Item 4 A.
1 Gautho, Julia
From: Bill Gray <[email protected]>
Sent: Sunday, March 9, 2025 5:50 PM
To: City Council
Subject: Wharf
I must admit to being underwhelmed by the consultant recommendation. The alternatives seem really shallow. Of those presented, a restaurant is the only one of particular interest -- provided it is funky like the old wharf house and multi-use: breakfast, lunch, dinner, music on weekends, upstairs deck, and bar.

Please bring back what we lost; don't try to invent something that is not Capitola. Thank you, Bill Gray
1440 Prospect Ave
Capitola
60 Item 4 B.
1 Gautho, Julia
From: Teresa Locke <[email protected]>
Sent: Monday, March 10, 2025 6:39 PM
To: City Council
Subject: Capitola Wharf and Bait Shop
Attachments: Capitola Wharf and Bait Shop.docx
To help protect your privacy,
Micro so ft Office prevented
auto matic downlo ad o f this
picture from the Internet. Virus-free.www.avg.com
61 Item 4 B.

March 10, 2025
Dear Capitola City Council:

We have been part Ɵme residents of Capitola since 2005. We are very interested in seeing the Capitola Wharf maintained and supported by the City. The Wharf and Bait shop serve as vital components of the community, offering both recreaƟonal and economic benefits.

The Wharf provides residents and visitors with direct access to various fishing acƟviƟes. Anglers can catch a variety of species from the Wharf or while fishing from boats rented from the Bait Shop. Capritola Boat & Bait, enhances this experience by offering bait, tackle, and equipment rentals, making fishing accessible to both novices and seasoned anglers. Over the years, we have taken advantage of the Wharf to teach many young family members the art and fun of fishing. The employees of the Bait Shop have always treated them with kindness and provided their experƟse.

The Wharf and Bait Shop aƩract tourists, contribuƟng to the local economy. Living near the Wharf, we see a constant flow of people walking out to the Wharf especially on weekends and throughout the summer.

Visitors oŌen engage in fishing, boat rentals, and patronize nearby businesses, including restaurants and shops. This influx supports local employment and generates revenue for Capitola.

Beyond fishing, the pier serves as a communal space for events, gatherings, and leisure acƟviƟes, fostering a sense of community and enhancing the quality of life for all.

Maintaining the Wharf and Bait Shop is essenƟal for preserving Capitola’s cultural heritage and ensuring the conƟnuaƟon of these recreaƟonal and economic benefits.

Sincerely,
Mike and Teresa Locke
“bait.cast.wait”
62 Item 4 B.
1 Gautho, Julia
From: John <[email protected]>
Sent: Monday, March 10, 2025 4:17 PM
To: Gautho, Julia
Subject: Fwd: 8A, B, C. Re: [City Council Meeting Agendas] City Council Meeting Follow Up Flag: Follow up
Flag Status: Flagged
Warmly JM
Begin forwarded message:

From: John <[email protected]>
Date: March 8, 2025 at 9:47:41 AM PST
To: Capitola Clerk's Office <[email protected]>, [email protected] Subject: 8A, B, C. Re: [City Council Meeting Agendas] City Council Meeting Hello Neighbors,
I am ever but a reflection, a shadow on the wall/ still, the topsy turvy of someone acting on my advice as to my kryptonite was unexpected. That a good old man was the first person I had to drop the veil for is quite amusing on the upside. 8A - YOU direct the meeting requirements. Make RTC put on the event you want. 8B - we need someone crazy enough to invest there and to do that we need the group to OWN whatever structures they build, Oscar Jewell Griswold would get my point. 8C - the more the merrier
Harder than I guessed to put the ship back on course too. I’m growing on some of y’all ~ hard as I try to repel. Showing up after all is my weakness. The road goes on forever and the party never ends.

Warmly JM
The World is a great mirror. It reflects back to you what you are. If you are loving, if you are friendly, if you are helpful, the World will prove loving and friendly and helpful to you. The World is what you are.
63 Item 4 B.
2 On Mar 7, 2025, at 3:50 PM, City of Capitola California <capitola[email protected]> wrote:

City Council Meeting
Calendar Date:

Thursday, March 13, 2025 - 6:00pm
Body:

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:

Meeting
link: https://us02web.zoom.us/j/83328173113?pwd=aVRwcWN3RU03Zzc2d kNpQzRWVXAydz09
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 inperson 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.

Meeting Information
Agenda Link:
64 Item 4 B.
3 Agenda
More Information
View full details on our website
Unsubscribe
65 Item 4 B.
1 Gautho, Julia
From: Alex Girard <[email protected]>
Sent: Wednesday, March 12, 2025 1:55 PM
To: City Council
Cc: Mozumder, Kailash
Subject: City Council Meeting - Thursday, March 13, 2025 - Inclusion of AccessMat for ADA Accessibility in the Wharf Planning Project
Dear Honorable Members of the Capitola City Council,
As the City of Capitola embarks on the long-term planning and outreach for the wharf, I would like to take this opportunity to propose the inclusion of AccessMat® as a key design element to enhance accessibility.

AccessMat® is a proven and effective solution that ensures individuals of all mobility levels can fully enjoy coastal and waterfront environments. Given its success in similar applications, I believe it would be a valuable addition to your planning efforts.

AccessMat has been successfully deployed for ADA accessibility on several high-profile waterfront locations, including the Santa Monica Pier. (photos below)
Furthermore, it has been widely utilized as an ADA beach access solution at numerous beaches throughout California, including nearby Monterey.

By incorporating AccessMat® into the Capitola Wharf project, the City would be taking a proactive step in ensuring compliance with ADA requirements while fostering a more inclusive and welcoming environment for all.

The matting system is durable, easy to install, and provides a safe, non-slip surface that accommodates individuals using wheelchairs, walkers, and other mobility aids.

Additionally, it offers a protective surface for the wooden planks, preventing further damage from various types of traffic, such as pallet jacks used for delivering supplies to businesses operating on the wharf.

Lastly, it seamlessly integrates into the existing infrastructure without disrupting the natural aesthetics of the wharf, preserving its charm while enhancing accessibility.

I would be happy to provide further details about AccessMat and its successful installations, as well as explore how it can be tailored to meet the specific needs of the Capitola Wharf project.

Please let me know if there is an opportunity to present this proposal in more detail or if additional information is needed.

Thank you for your time and consideration. I appreciate the City Council’s commitment to enhancing accessibility and ensuring that Capitola’s treasured waterfront remains inclusive for all members of the community.

Alex
Alex Girard
M: +1 310-625-3926
E: [email protected]
www.AccessRec.com
67 Sand Park Rd. Suite A| Cedar Grove, NJ 07009 - USA
P: +1 973-955-0514 | F: +1 201-624-7007
66 Item 4 B.
2 67
Item 4 B.
1 Gautho, Julia
From: Rob Chang <[email protected]>
Sent: Thursday, March 13, 2025 12:19 PM
To: City Council
Subject: r.e. 13 March 2025 City Council Meeting - Wharf Concepts Dear Council Members,
Thank you for your efforts to rebuild the wharf and solicit public input. I want to voice my support for OpƟon 6, which places emphasis on permanent structures for fishing, dining, and entertainment. Our wharf is a precious component of Capitola’s character. The wharf and its structures must define and disƟnguish Capitola's precious beachfront for years to come.

That said, I urge the concepts team to dive deeper into the economics of this plan, covering the income streams (lease, concession fees), as well as costs borne by the city versus restaurant/merchants.

Best regards,
Rob Chang & Shelley Edwards
15 year residents.
68 Item 4 B.
1 Gautho, Julia
From: Cheryl Wightman <[email protected]>
Sent: Thursday, March 13, 2025 3:59 PM
To: City Council
Subject: Meeting ID 83328173113 passcode: 678550
My suggestion to the council regarding the wharf: We all miss the restaurant at the end of the wharf, but since that is not practical due to storms; I suggest that we hire a band once a month or every other week, or even weekly to play at the end of the wharf, install picnic tables at the end of the wharf, and encourage some food vendors to provide available food for purchase.Perhaps we could also also allow a vintner to provide wine tasting as well. Thanks for hearing my suggestion, Cheryl 69 Item 4 B.
1 Gautho, Julia
From: John <[email protected]>
Sent: Monday, March 10, 2025 4:17 PM
To: Gautho, Julia
Subject: Fwd: 8A, B, C. Re: [City Council Meeting Agendas] City Council Meeting Follow Up Flag: Follow up
Flag Status: Flagged
Warmly JM
Begin forwarded message:

From: John <[email protected]>
Date: March 8, 2025 at 9:47:41 AM PST
To: Capitola Clerk's Office <[email protected]>, [email protected] Subject: 8A, B, C. Re: [City Council Meeting Agendas] City Council Meeting Hello Neighbors,
I am ever but a reflection, a shadow on the wall/ still, the topsy turvy of someone acting on my advice as to my kryptonite was unexpected. That a good old man was the first person I had to drop the veil for is quite amusing on the upside. 8A - YOU direct the meeting requirements. Make RTC put on the event you want. 8B - we need someone crazy enough to invest there and to do that we need the group to OWN whatever structures they build, Oscar Jewell Griswold would get my point. 8C - the more the merrier
Harder than I guessed to put the ship back on course too. I’m growing on some of y’all ~ hard as I try to repel. Showing up after all is my weakness. The road goes on forever and the party never ends.

Warmly JM
The World is a great mirror. It reflects back to you what you are. If you are loving, if you are friendly, if you are helpful, the World will prove loving and friendly and helpful to you. The World is what you are.
70 Item 4 C.
2 On Mar 7, 2025, at 3:50 PM, City of Capitola California <capitola[email protected]> wrote:

City Council Meeting
Calendar Date:

Thursday, March 13, 2025 - 6:00pm
Body:

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:

Meeting
link: https://us02web.zoom.us/j/83328173113?pwd=aVRwcWN3RU03Zzc2d kNpQzRWVXAydz09
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 inperson 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.

Meeting Information
Agenda Link:
71 Item 4 C.
3 Agenda
More Information
View full details on our website
Unsubscribe
72 Item 4 C.
1 Gautho, Julia
From: Susan Steely <[email protected]>
Sent: Wednesday, March 12, 2025 2:16 PM
To: City Council
Subject: 1610 Bulb Ave Annexation on March 13, 2025 Agenda Attachments: Letter to Capitola City Council.docx
Dear Council Members and Mayor Clarke,
Please review and incorporate the comments in the attached letter explaining Bulb Ave. residents past and current opposition to this annexation. Thank you for your time.

Best regards,
Susan Steely, resident
1475 Bulb Avenue
To help protect your privacy, Microsoft Office prevented automatic download of this picture from the Internet.

Picture
Susan Steely
Steely Real Estate
Broker BRE#01002379
831-713-8818
E-mail [email protected]
73 Item 4 C.

March 9, 2025
Attention: Capitola City Council Members and Mayor Clarke Reference: March 13th Meeting Agenda item for Annexation of 1610 Bulb Ave, Santa Cruz to Capitola Dear Council Members and Mayor Clarke,
We, as residents adjacent to and nearby property owners to 1610 Bulb Ave., would like to restate our opposition and concerns to the annexation of 1610 Bulb Ave., specifically without a development proposal of 3720 Capitola Rd., Capitola.

The Council has previously rejected two development proposals at both the October 2022 & January 2023 Council meetings where we submitted many letters and presented oral objections.

Since some of the Council members are new, I think it is very important that both meeting minutes and all the correspondence be included in this new application proposal discussion.

It appears that the developers are putting the “cart before the horse” by trying to annex 1610 Bulb without a clear understanding of what they are proposing to do with the property and the adjacent Capitola Rd property. What is the point of the annexation prior to any land use plans being submitted and reviewed? The previous two plans were rejected by the neighborhood and the Council because they did not benefit the community, address aƯordability requirements or have a minimum impact on neighboring properties. It is quite clear that once the property has been annexed by Capitola, then we as Live Oak residents living on Bulb Avenue, would no longer have a say or vote in the new development design for 3720 Capitola Rd with 1610 Bulb.

Thank you for reviewing our past comments at the two previous meetings as well as our individual written responses and acknowledge my neighbors and my opposition to the annexation.

Sincerely,
Susan Steely
1475 Bulb Avenue
74 Item 4 C.
1 Gautho, Julia
From: Tom Ginsburg <[email protected]>
Sent: Wednesday, March 12, 2025 2:27 PM
To: City Council; Clarke, Joe
Subject: Possible Spam [PDF] 1610 Bulb Ave Annexation Proposal - Neighborhood Opposition Attachments: 1610 Bulb Annexation Neighbor Poll (Responses.pdf Dear Mayor Clarke and Capitola City Council,
We understand from a yard sign posted last week that you have a proposal on the 3/13 agenda for annexation of 1610 Bulb Avenue from the County to the City of Capitola. As a neighbor living off of Bulb Avenue, I want to express my opposition to this proposal.

A couple of the newer council members may not be aware that the owner previously submitted two development proposals for the property encompassing 3720 Capitola Rd (the old Capitola Kennels property) including annexing 1610 Bulb Ave as part of those proposals. In both instances, the Council rejected them due to a lack of community benefit while taking into consideration the many issues brought up by Bulb Neighbors at the time. Please refer to those earlier proposals for details.

Now he's at it again but trying to see if he can get the annexation itself approved first instead of submitting a development proposal along with it. My sense is he feels he has a better chance by getting the annexation done first.

Attached are the results of a Google Form neighborhood poll done in the past two days. As you can see, those who had the chance to respond are firmly opposed to the annexation proposal. I hope the Council will once again see the light and reject this annexation request without a reasonable development proposal attached to it.

Thank you for your consideration to your adjacent neighbors who, while not in the City limits, shop in Capitola and contribute sales tax dollars for the City's benefit.

Thanks,
Tom Ginsburg
102 Rey Ct.

Santa Cruz, CA 95062
75 Item 4 C.

Neighborhood Poll (Google Forms) for 1610 Bulb Avenue Annexation Proposal Timestamp NAME MAILING ADDRESS Your Opinion Email Address 3/10/2025 18:02:29 Thomas Ginsburg 102 Rey Ct, Santa Cruz, CA 95062 Opposed [email protected] 3/10/2025 18:38:28 Susan Steely 1475 Bulb Ave, Santa Cruz 95062 Opposed [email protected] 3/10/2025 20:04:22 Jim furlong 3320 Julie Lane, Santa Cruz, 95062 Opposed [email protected] 3/10/2025 20:27:48 Caroline Kuspa 1507 Bulb Avenue, Santa Cruz, CA 95062 Opposed [email protected] 3/10/2025 20:32:31 Ron Goad 1560 bulb ave Santa Cruz ,Ca.96062 Opposed [email protected] 3/10/2025 20:34:36 Tony Ainsworth 1535 Bulb Ave Santa Cruz, CA 95062 Opposed [email protected] 3/10/2025 20:36:38 Michael Price 1479 Bulb Ave, Santa Cruz, CA 95062 Opposed [email protected] 3/10/2025 20:37:29 Jane Price 1479 Bulb Ave, Santa Cruz, CA 95062 Opposed [email protected] 3/10/2025 20:42:17 Donna Jensen Lewis 1472 Bulb Ave, Santa Cruz, CA 95062 Opposed [email protected] 3/10/2025 20:42:49 Tammy Tremaine 1369 Bulb Ave Santa Cruz, Ca 95062 Opposed [email protected] 3/10/2025 20:43:26 Brian Lewis 1472 Bulb Ave, Santa Cruz, CA. 95062 Opposed [email protected] 3/10/2025 22:17:21 Vic Clowser 1360 Bulb Ave Santa Cruz Ca 95062 Opposed [email protected] 3/11/2025 10:37:40 Lisa lindeman 1525 bulb Ave Santa Cruz CA95062 Opposed [email protected] 3/11/2025 13:50:54 Allison Knox 1575 Bulb Ave Santa Cruz, Ca Opposed [email protected] 3/11/2025 13:57:05 Tim Knox 1575 Bulb Ave . Santa Cruz, California, 95062 Opposed [email protected] 3/11/2025 16:42:01 Robert Jarvis 1481 Bulb Ave Santa Cruz CA 95062 Opposed [email protected] 3/11/2025 18:02:00 Angela Steely 1475 Bulb Ave Ca 95062 Opposed [email protected] 3/11/2025 20:47:27 Janessa Ainsworth 1535 Bulb Avenue, Santa Cruz, CA, 95062 Opposed [email protected] 3/12/2025 9:53:54 Joel Guzman Hernandez 1351 Bulb Ave Santa Cruz, Ca 95062 Opposed [email protected] 3/12/2025 9:55:04 Daniel Guzman 1351 Bulb Ave Santa Cruz, Ca 95062 Opposed [email protected] 76 Item 4 C.
1 Gautho, Julia
From: Enrique Dolmo Jr <[email protected]>
Sent: Tuesday, March 11, 2025 5:37 PM
To: City Council
Subject: Interest in Serving on Measure Q Citizens Oversight Advisory Board Follow Up Flag: Follow up
Flag Status: Flagged
Dear Capitola City Council Members,
I hope all is well. I am writing to formally express my interest in serving on the Measure Q Citizens Oversight Advisory Board (COAB). I am deeply invested in the well-being of our community and believe that Measure Q plays a vital role in maintaining and improving essential services, infrastructure, and public spaces, including parks and recreation.

With my experience in community engagement and my passion for ensuring transparency and accountability in public funding, I believe I can contribute meaningfully to the COAB’s mission. The board’s role in engaging with the community, developing Vision Plans to guide funding awards, and providing annual reports to the Board of Supervisors aligns with my commitment to responsible civic service.

I would welcome the opportunity to bring my perspective and experience to this advisory body and work collaboratively to uphold the values of transparency, fiscal responsibility, and community-driven decision-making. I appreciate your time and consideration, and I would love to discuss how I can best serve Capitola in this role.

Thank you for your time and for your ongoing commitment to our community.

Enrique Dolmo Jr
77 Item 4 D.
1 Gautho, Julia
From: Jed Wilson <[email protected]>
Sent: Thursday, March 13, 2025 5:17 PM
To: Gautho, Julia
Subject: Re: Capitola Representative on Measure Q Oversight Advisory Board Julia,
I am not sure you’ll receive this before this evening‘s board meeting. However, I would like to withdraw my application for Measure Q commission. And would like to support Scott Harway who is the alternate application for Q commission.

Jed Wilson
On Mar 4, 2025, at 4:02 PM, Gautho, Julia <[email protected]> wrote:

Good Afternoon,

Thank you for submitting an application to serve as Capitola’s representative on the Citizen’s Oversight Advisory Board for Measure Q. The Capitola City Council will be making a decision on this appointment next week, on March 13th. The meeting will begin at 6 PM.

While attendance is not required, you are welcome to join the meeting and provide comments during the public comment portion of the agenda for the item. The agenda and report for this item will be posted on Friday by COB.

Thank you for your interest in representing Capitola!

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Apply to Join a City Board, Committee, or Commission.

Click here to find out information about the 2024 Election.

78 Item 4 D.

Capitola City Council
Agenda Report
Meeting: March 13, 2025
From: City Manager Department
Subject: City Council Meeting Minutes
Recommended Action: Approve minutes from the special meeting on February 26, 2025 and the regular meeting on February 27, 2025.

Background: Attached for City Council review and approval are the draft minutes from the special meeting on February 26th and the regular meeting on February 27th.

Attachments:

1. Special Meeting Minutes 2/26/2025

2. Regular Meeting Minutes 2/27/2025
Report Prepared By: Julia Gautho, City Clerk
Approved By: Jamie Goldstein, City Manager
79 Item 7 A.

City of Capitola
Special Joint City Council and Planning
Commission Meeting Minutes
Wednesday, February 26, 2025 – 5:30 PM
City Council Chambers
420 Capitola Avenue, Capitola, CA 95010
Mayor: Joe Clarke
Vice Mayor: Alexander Pedersen
Council Members: Gerry Jensen, Margaux Morgan, Melinda Orbach Special Joint Meeting of the Capitola City Council and Planning Commission – 5:30 PM

1. Roll Call and Pledge of Allegiance – The meeting was called to order at 5:31 PM. In attendance: City Council Members Jensen, Morgan Orbach, Vice Mayor Pedersen, Mayor Clarke, Planning Commissioners Christiansen, Howard, Kieu, and Chair Westman. Absent: Planning Commissioner Estey.

2. Additions and Deletions to the Agenda – None

3. Additional Materials – None

4. Oral Communications by Members of the Public – None

5. General Government / Public Hearings
A. City Council Member and Planning Commissioner Orientation Recommended Action: Receive orientation presentation and provide feedback regarding potential Administrative Policy updates.

City Attorney Zutler, City Manager Goldstein, Assistant to the City Manager Woodmansee, and City Clerk Gautho provided presentations to the City Council and Planning Commission.

The City Council and Planning Commission took a recess from 6:25 PM to 6:29 PM.

Public Comments – None

6. Adjournment - The meeting adjourned at 7:14 PM. The next regularly scheduled City Council meeting is on February 27, 2025, at 6:00 PM.
____________________________
ATTEST: Joe Clarke, Mayor
____________________________
Julia Gautho, City Clerk
80 Item 7 A.

City of Capitola
City Council Meeting Minutes
Thursday, February 27, 2025 – 6:00 PM
City Council Chambers
420 Capitola Avenue, Capitola, CA 95010
Mayor: Joe Clarke
Vice Mayor: Alexander Pedersen
Council Members: Gerry Jensen, Margaux Morgan, Melinda Orbach Regular Meeting of the Capitola City Council – 6 PM

1. Roll Call and Pledge of Allegiance – The meeting was called to order at 6:00 PM. In attendance: Council Members Jensen, Morgan, Orbach, Vice Mayor Pedersen, and Mayor Clarke.

2. Additions and Deletions to the Agenda – City Manager Goldstein requested to continue Item 7A to the March 13th City Council meeting.

3. Additional Materials
A. Item 6B – One email received after publication of the agenda packet.

B. Item 6C - One email received after publication of the agenda packet.

C. Item 6D - Staff Memorandum and Updated Attachment
D. Item 7B - Six emails received after publication of the agenda packet.

E. Item 7C - Five emails received after publication of the agenda packet.

4. Oral Communications by Members of the Public
 Mary Beth Cahalen
 Charlie Thomas
 Elizabeth Bertrand
 Paula Bradley
 Matt Farrel
 Jim Weller
 Lani Faulkner
 Speaker
 Speaker
 TJ Welch
 Marilyn Garrett
 Speaker
 Goran Klepic
 Keith Cahalen

5. Staff / City Council Comments
 Public Works Department Director Kahn provided an update on the closure of the walkway on Depot Hill due to the loss of a portion of the bluff between Oakland and Saxon Avenues.

Following a final geologist assessment, staff will return to Council with further updates on the bluff and walkway. Public Works Director Kahn also provided clarification on Consent Item 81 Item 7 A.

City Council Meeting Minutes – February 27, 2025
City of Capitola Page 2
6B, adding that it will return to the City Council for a budget amendment if needed after the project is bid.
 Police Chief Ryan introduced Parking Enforcement Officer, Austin Wilson, and provided an update on a pilot program meant to address unsafe electric bicycle usage.  Council Member Orbach provided comments on the RTC’s March 4th meeting and requested that emails between the City Manager and the RTC’s Director be released publicly and requested an agenda item at the March 27th meeting to further discuss the RTC’s Park Avenue realignment request.
 Council Member Jensen attended a tour of the Santa Cruz Sanitation Facility and shared about resident grant opportunities through the Monterey Bay Air Resource Board.  City Manager Goldstein advised the public that the Bay Avenue onramp will be open on March 10th.
 Council Member Pedersen requested that staff investigate omni-directional microphones for the Council Chambers.
 Mayor Clarke advised the public that the RTC is hosting a meeting on March 4th independently of the City; and provided comments on the dedication of the Begonia Festival Commemorative Public Art Project.
 City Attorney Zutler, City Manager Goldstein, and Council Member Orbach clarified that the emails between the RTC Director and the City Manager would be included in the record of February 27th City Council meeting minutes. Following the meeting, staff uploaded the emails to the City’s website for public viewing.

6. Consent Items
A. City Council Meeting Minutes
Recommended Action: Approve minutes from the regular meeting on February 13, 2025, and the special meeting on February 19, 2025.

B. FY 2024-25 Pavement Maintenance Project
Recommended Action: Approve the plans, specifications, and construction budget of $589,000 for the FY 2024-25 Pavement Management Project; and authorize the Department of Public Works to advertise for construction bids.

C. Public Art Fund Allocation
Recommended Action: Adopt a resolution allocating $25,000 from the Public Art Fund as a matching contribution for an application for the National Endowment for the Arts Grant FY 2026 to support the creation of public art project at the Park at Rispin Mansion and amending the Fiscal Year 2024-25 Budget, as recommended by the Capitola Art and Cultural Commission. Council Member Jensen pulled Item 6C for discussion.

D. MOU with the Capitola Police Officers Association
Recommended Action: Authorize the City Manager to sign a side letter agreement with the Capitola Police Officers Association from March 1, 2025, through June 30, 2027.

C. Public Art Fund Allocation
Recommended Action: Adopt a resolution allocating $25,000 from the Public Art Fund as a matching contribution for an application for the National Endowment for the Arts Grant FY 2026 to support the creation of public art project at the Park at Rispin Mansion and amending the Fiscal Year 2024-25 Budget, as recommended by the Capitola Art and Cultural Commission.

Community Services and Recreation Department Director Bryant presented the staff report.

Public Comment:
 Gayle Ortiz
82 Item 7 A.

City Council Meeting Minutes – February 27, 2025
City of Capitola Page 3
The City Council discussed the funding of public art projects and requested staff review the existing ordinance and bring an update back to the Council.

Motion to adopt Resolution No. 4418 and direction provided to staff to review the City’s public art ordinance: Council Member Orbach
Second: Council Member Pedersen
Voting Yea: Council Members Jensen, Morgan, Orbach, Vice Mayor Pedersen, Mayor Clarke
Motion to approve Consent Calendar Items 6A, 6B, 6D: Council Member Morgan Second: Council Member Orbach
Voting Yea: Council Members Jensen, Morgan, Orbach, Vice Mayor Pedersen, Mayor Clarke

7. General Government / Public Hearings
Mayor Clarke reorganized the agenda items to hear Items 7D and 7E first.

D. FY 2024-25 Mid-Year Budget Report
Recommended Action: Receive the Fiscal Year 2024-25 Mid-Year Budget Report and adopt a resolution amending the Fiscal Year 2024-25 Budget.

Finance Department Director Malberg presented the staff report.

Public Comments: None
The Council reminded the audience that the Finance Advisory Committee meetings are open to the public.

Motion to adopt Resolution No. 4419 amending the FY 2024-25 Budget: Council Member Morgan
Second: Council Member Jensen
Voting Yea: Council Members Jensen, Morgan, Orbach, Vice Mayor Pedersen, Mayor Clarke
E. CDBG Program Income Funds
Recommended Action: 1) Conduct a public hearing and receive public comment regarding Program Income and its eligible uses; 2) adopt a resolution rescinding Resolution No. 4414 and allocating $170,000 of Program Income for the Community Center Rehabilitation Project; and 3) adopt a resolution amending the FY 2024-25 budget.

Finance Department Director Malberg presented the staff report.

Public Comments: None
Motion to adopt Resolution No. 4420 rescinding Resolution No. 4414 and allocating $170,000 of Program Income for the Community Center Rehabilitation Project and adopt Resolution No. 4421 amending the FY 2024-25 Budget: Council Member Morgan Second: Council Member Orbach
Voting Yea: Council Members Jensen, Morgan, Orbach, Vice Mayor Pedersen, Mayor Clarke
A. Appointment of Capitola Representative to Measure Q Oversight Advisory Board Recommended Action: Appoint a member of the public to serve as Capitola’s representative on the Measure Q Citizens Oversight Advisory Board. (Continued to the March 13, 2025, City Council Meeting)
B. Bay Avenue Corridor Study
83 Item 7 A.

City Council Meeting Minutes – February 27, 2025
City of Capitola Page 4
Recommended Action: Staff recommends the City Council 1) identify Alternative 2 as the preferred long-term improvement alternative for the Bay Avenue corridor; 2) authorize staff to proceed with public engagement and conceptual design refinement; and 3) direct staff to pursue grant funding opportunities for final design and construction.

Council Member Jensen recused himself from the item due to the proximity of his personal residence. The City Council took a recess at 7:14 PM and resumed the meeting at 7:17 PM.

Public Works Department Director Kahn and project consultants Derek Wu and Frederik Venter from Kimley Horn presented the staff report.

Public Comments:
 Keith Cahalen
 David Quantas
 Gayle Ortiz
 Speaker
 Adrienne West
 Stephen Svete
 Lani Faulkner
 Speaker
 Nancy Jones
 Sandy Farreto
 Doug Lagan
 Speaker
 Paula Bradley
 Liz
 Dorothy Anton
 Speaker
The City Council discussed some of the questions brought up by members of the public during the public comment period, addressed questions with the Kimley Horn consultants, and discussed the benefits of traffic safety improvements for pedestrians and cyclists.

Motion to identify Alternative 2 as the preferred long-term improvement for the Bay Avenue corridor; authorize staff to proceed; and direct staff to pursue grant funding opportunities: Council Member Orbach
Second: Council Member Morgan
Voting Yea: Council Members Morgan, Orbach, Vice Mayor Pedersen, Mayor Clarke Abstain: Council Member Jensen
C. Bay Avenue and Hill Street Traffic Safety Update
Recommended Action: Provide direction on short-term modifications to the Bay Avenue and Hill Street intersection.

Council Member Jensen recused himself from the item due to the proximity of his personal residence.

Public Works Department Director Kahn presented the staff report.

Public Comments:
 Keith Cahalen
84 Item 7 A.

City Council Meeting Minutes – February 27, 2025
City of Capitola Page 5
 Speaker
 Speaker
 Mick Routh
 Sandy Farreto
 Speaker
 Carin Hanna
 Doug Lagan
The City Council discussed the possibility of collaborating with PG&E to install additional lighting options in the intersection.

Motion to continue the quick-build project as-is until a long-term solution is identified:

Council Member Orbach
Second: Vice Mayor Pedersen
Voting Yea: Council Members Morgan, Orbach, Vice Mayor Pedersen, Mayor Clarke Abstain: Council Member Jensen

8. Adjournment – The meeting adjourned at 9:00 PM. The next regularly scheduled City Council meeting is on March 13, 2025, at 6:00 PM.
_________________________
ATTEST: Joe Clarke, Mayor
____________________________
Julia Gautho, City Clerk
85 Item 7 A.

Capitola City Council
Agenda Report
Meeting: March 13, 2025
From: Finance Department
Subject: Fiscal Year 2025-26 Budget Calendar
Recommended Action: Approve the Budget Meeting Calendar for Fiscal Year (FY) 2025-26.

Background: The Capitola Municipal Code requires the City to prepare and disseminate a budget calendar annually each fiscal year. The attached draft calendar provides dates for budget study sessions, hearings, meetings, and other significant budget events.

Discussion: Staff has prepared the attached draft Budget Calendar for FY 2025-26. This year’s budget cycle will be concurrent with the adoption of the City’s Strategic Plan. The Strategic Plan identifies six strategic priorities that will serve to guide staff’s preparation of the proposed Budget.

Pursuant to this calendar, the proposed Budget will be distributed on Friday, May 2, 2025, and the presentation of the draft Budget is scheduled for a Special Meeting on Thursday, May 15 th
.

This is a tentative schedule that may be changed as necessary by the City Council and/or City Manager. Some meetings may be cancelled if they become unnecessary based on prior sessions.

Fiscal Impact: None
Attachments:

1. FY 2025-26 Draft Budget Calendar
Report Prepared By: Jim Malberg, Finance Director
Reviewed By: Julia Gautho, City Clerk
Approved By: Jamie Goldstein, City Manager
86 Item 7 B.

CITY OF CAPITOLA
BUDGET CALENDAR – 2025-26 FISCAL YEAR
The City Manager and/or the City Council may change this tentative schedule.

NOTE: Some meetings may be cancelled if they become unnecessary based on prior sessions.

Meeting
Date
2025
Week/Day Nature of Meeting Description
April 15 3rd Tuesday Finance Advisory Committee Finance Advisory Committee to discuss proposed Budget
May 2 1st Friday N/A Proposed budget distribution
May 8 2nd Thursday *Regular City Council
May 13 2nd Tuesday Special Finance Advisory
Committee
Finance Advisory Committee to discuss
proposed Budget and draft
recommendations to Council
May 15 3rd Thursday *Special City Council Presentation of City Operating & CIP Budgets
May 20 3rd Tuesday Special Finance Advisory
Committee Committee Deliberations (if necessary)
May 22 4th Thursday *Regular City Council
May 29 5th Thursday *Special City Council Council Deliberations (If necessary) June 5 1st Thursday *Special City Council Council Deliberations (If necessary) June 12 2nd Thursday *Regular City Council Reports from Finance: Appropriations Limit Resolution and Investment Policy
June 17 3rd Tuesday Finance Advisory Committee Finance Advisory Committee to discuss proposed Budget and draft presentation
June 18 3rd Wednesday *Special City Council Final City Council Budget deliberations (If necessary)
June 26 4th Thursday *Regular City Council Final Adoption of the City Budget and Pertinent Resolutions
NOTE: Special meetings will begin at 6:00 p.m., all Regular meetings begin at 6:00 p.m. Meetings with an asterisk (*) are held in the City Hall Council Chambers and will be televised “Live” on Charter Communications Cable Channel 8. The Finance Advisory Committee Meetings begins at 6:00 pm and are scheduled to be held in the Community Room.
87 Item 7 B.

Capitola City Council
Agenda Report
Meeting: March 13, 2025
From: City Manager Department
Subject: Lease with MRA Sales, Inc.

Recommended Action: Authorize the City Manager to sign a three-year lease agreement between the City of Capitola and MRA Sales, Inc. for concessionary beach services at Esplanade Park, for a total revenue of $6,399.

Background: Since 2004, the City has had a lease agreement with MRA Sales, Inc. to operate a business on City-owned property (Esplanade Park). The business, known as Capitola Beach Company, rents beach equipment, provides surf lessons, and sells beach accessories on a seasonal basis. The original lease expired in 2009 and was extended to 2014; the parties entered a second lease agreement in 2014 which was extended by five additional years.

Typically, Capitola Beach Company has leased 256 square feet in Esplanade Park, where the business sets up a movable trailer and tables when operational. When the business is not operational, the space is left clear, and the Park is unimpacted.

The most recent lease expired on September 30, 2024; because Capitola Beach Company operates through November, the City granted an extension through November 30, 2024.

Discussion: The City and Capitola Beach Company have negotiated a new lease, with the following terms:
 Term: Three years
 Space: 256 square feet in Esplanade Park
 Rent: $2,133 annually (paid based on operations seven or eight months of the year)  Business Schedule: Weekend-only operations are Easter through Memorial Day and September, October, and November; daily operations are in June, July, and August.  Business Allowances: Beach equipment rentals, surf lessons (two teachers, four clients per teacher), sale of sunscreen, logo t-shirts, and surf accessories (leashes and surf-ware) Fiscal Impact: The annual rent is $2,133; this may increase by $199 depending on when Easter falls.

Attachments:

1. Proposed Lease
Report Prepared By: Chloé Woodmansee, Assistant to the City Manager Reviewed By: Julia Gautho, City Clerk; Samantha Zutler, City Attorney Approved By: Jamie Goldstein, City Manager
88 Item 7 C.
4895-8854-8342 v3 1

CITY OF CAPITOLA

LEASE AGREEMENT
THIS LEASE AGREEMENT (“Lease”) is entered into on _________________, 2025, by and between the City of Capitola, a municipal corporation ("Lessor"), and MRA Sales, Inc., dba Capitola Beach Company ("Lessee"). As used herein, the term “Parties” shall refer to both Lessee and Lessor and the term “Party” shall sometimes refer to either Lessee or Lessor.

1. Property. Lessor hereby leases to Lessee and Lessee hereby leases from Lessor certain real property comprised of a 16 foot x 16 foot, 256 square foot portion of the Esplanade Park, as specifically designated by the City of Capitola (“City”), located in the City (“Property”), more particularly described in Exhibit A, attached hereto and incorporated herein by reference, on the terms and conditions hereinafter set forth.

2. Term of Lease. The term of this Lease shall be three (3) years commencing on the day next following the date on which the approval of this Lease by City Council becomes final and terminating on November 30, 2027 (“Term”). During the Term, Lessee may only use the Property during the following periods of time (“Permitted Operating Hours”):
• April and May: Weekends only from the first weekend in April or Easter weekend (whichever comes first) through Memorial Day weekend.
• June, July, and August: 7 days a week.
• September, October, and November: Weekends only, but not including the Art and Wine Festival weekend (as such weekend is determined by the City in its sole discretion).

3. Termination of Lease. Lessee may terminate this Lease upon written notice to Lessor on or before March 1 of each calendar year of the Term. If such notice is not received by Lessor in a timely manner, then the Lease shall continue for the Term.

4. Surrender. Upon termination of this Lease, Lessee shall surrender the Property to Lessor free and clear of all encumbrances, personal property and improvements, if elected by City. Lessee shall offer in writing any improvements to City, and City may, in its sole discretion, accept in writing the improvements. Should the City require the surrender of the Property in the original condition at the time the Lease commenced, Lessee shall surrender the Property in such condition to Lessor, and shall defend (with counsel acceptable to Lessor), hold harmless and indemnify Lessor from all liability and expense resulting from any delay or failure to so surrender in such conditon, including without limitation, claims made by any succeeding lessee.

5. Rent.
a. During the Term and subject to Section 5b, rent for the Property shall be in the amounts described below:
• Easter – Memorial Day; weekends only; $2 per square foot; $199.68 per month. • June, July, August;– 7 days per week; $2 per square foot; $512 per month. • September, October, November; weekends only; $2 per square foot; $199.68 per month. b. All rent shall be due and payable on the first day of each month, and is deemed late if not received by Lessor by the 15th day of each month. Rent not paid when due shall bear interest from the date due until paid at the rate of 8/10ths of one percent per month. 89 Item 7 C.
4895-8854-8342 v3 2

6. Rent – Annual Consumer Price Index Adjustment. Commencing January 1, 2026 and each subsequent calendar year thereafter, rent shall be adjusted to reflect costs of living increases that have occurred over the preceding twelve (12) month period. However, no downward rent adjustments shall be made. That cost of living adjustment shall be determined in accordance with the U.S. Department of Labor, Bureau of Labor Statistics, figures in accordance with the United States Consumers All Items Price Index in the San Francisco-Oakland-San Jose Area, All Urban Consumers Index. The percent change figure for the one-year period ending in December 2025 shall be used. If the described index shall no longer be published, another generally recognized as authoritative shall be substituted by agreement of Parties or as selected by Lessor, if the Parties are unable to agree within thirty (30) days.

7. Taxes, Assessments and Public Utility Charges.
a. As additional rent, Lessee shall pay when due all water (excluding water for irrigation purposes), light, power, gas, heat, Wi-Fi, phone and other utility and service charges and Lessor shall have no responsibility therefore. Lessee shall also pay directly before delinquency the amount of all property taxes, possessory interest taxes, and assessments, licenses, fees, or other charges applicable or allocable to the Property and personal property on the Property allocable to all periods the Term of this Lease. b. Lessee shall furnish to Lessor evidence of timely payment of all such taxes, assessments and charges as and when they come due. c. If at any time during the Term of this Lease the laws concerning the methods of real property taxation prevailing at the commencement of the Term are changed so that a tax or excise on rents or any other such tax, however described, is levied or assessed against Lessor relative to the leased premises, Lessee shall pay before delinquency such tax or excise on rent. Nothing herein shall be construed to limit Lessee's legitimate rights to timely protest or litigate the imposition of any such tax or charge.

8. Use of Property.
a. The Property shall be used for the following: operation of beach equipment rentals; surf lessons with no more than two (2) instructors teaching at any one time and class sizes limited to no more than four (4) clients per instructor; and sale of sunscreen, logo t-shirts and/or hats, surf accessories consisting of only surf wear and surf leashes. Lessee agrees that no other use of the Property will be made, except upon prior written consent of the City Council of the City.
b. Lessee’s trailer may be delivered to the Property no earlier than 7:00 a.m. during Permitted Operating Hours, and shall be removed no later than thirty (30) minutes following the close of business during Permitted Operating Hours. All portions of the business shall be located and operated within the 16’ x 16’ area comprising the Property. c. During Permitted Operating Hours, all property shall be stored within the enclosed trailer, except for sample products and merchandise available for display. d. No permanent signage shall be permitted. All signs shall be attached to or incorporated as part of the portable trailer.
90 Item 7 C.
4895-8854-8342 v3 3
e. Lessee agrees to coordinate operations so as not interfere with scheduled park uses, including, without limitation, other uses by or for the City, Capitola Chamber of Commerce, Capitola Foundation, Wharf- to-Wharf running event, and Capitola Beach Festival. Specifically, Lessee agrees to remove the trailer or delay its delivery to avoid conflicts with the following community activities:

1. Wednesday night twilight concerts sponsored by the City;

2. Capitola Foundation Car Show;

3. Art and Wine Festival sponsored by the Capitola Chamber of Commerce;

4. The activities of the Capitola Beach Festival; and

5. The Wharf-to-Wharf running event.

Lessor reserves the right to notify Lessee of any other event for which Lessee will be required to modify its hours of operation and Permitted Operating Hours. Such notice shall be provided by the event operator to Lessee in writing fourteen (14) days prior to the additional event.

9. Licenses and Permits. Lessee acknowledges that nothing contained herein shall be deemed as a waiver by the City of its permit authority over the proposed use contemplated by this Lease. It shall be Lessee's responsibility, at Lessee's sole cost and expense, to obtain all necessary licenses and permits to construct any improvements and operate a business on the Property including, but not limited to a business license, conditional use permit and coastal development permit from the City. However, if Lessee applies during the five (5) year Lease period for a permit from the City authorizing use of the Property as an outdoor eating area and such permit is denied by the City, either Party may, upon thirty (30) days notice to the other, terminate this Lease.

10. Representations and Condition of Premises.
a. Lessor agrees that, in the event Lessee's leasehold interest in the Property is condemned by the City before expiration of entire five (5) year Term, this Lease shall terminate and Lessor agrees to reimburse Lessee for the reasonable costs expended by Lessee in improving the Property up to a maximum of $5,000. b. Lessee warrants and represents that Lessor has made no representation or warranties to Lessee of any kind whatsoever concerning the Property, this Lease or any related matter. Lessee hereby waives any claim of any kind against Lessor for any matter arising out of or related to the misrepresentation, if any, of any fact or failure to disclose any fact concerning the Property, this Lease or any related matter. Lessee covenants and agrees that it has examined the Property and accepts it in its present, as-is condition.

11. Alterations, Improvements and Additions. Lessee shall not make any alterations, improvements or additions to the Property without the prior written consent of the Public Works Director of the City.

12. Landscaping. No landscaping is permitted to be made by Lessee at or about the Property.

13. Maintenance. Lessee shall be fully responsible for the operation and maintenance of the Property at its sole expense throughout the Term of this Lease. Lessee agrees to perform all repairs and replacements and construct any improvements necessary to maintain and preserve the Property in a decent, safe, healthy and sanitary condition in a 91 Item 7 C.
4895-8854-8342 v3 4
manner satisfactory to Lessor and in compliance with all applicable laws, regulations and requirements of any governmental entity and insurance company insuring all or any part of the Property. Lessee agrees that Lessor shall not be required to perform any maintenance, repairs or services or to assume any expense not specifically assumed herein in connection with the Property and Lessee hereby waives all rights to make repairs or to cause any work to be performed at the expense of Lessor as provided for in Section 1941 et seq. of the California Civil Code.

14. Right to Sell, Assign, Sublet, Refinance or Otherwise Transfer the Lease. a. Lessee may not sell, assign, or otherwise transfer this Lease or sublet any part of its interest hereunder in the Property without the prior written consent of Lessor, which shall not be unreasonably withheld. Consent to any sale, assignment, refinance or sublease shall not constitute consent to any other sale, assignment, refinance or sublease.

No sale, subletting or assignment even with the consent of Lessor shall relieve Lessee of its obligation to pay the rent and perform all other obligations described in this Lease. Any of the foregoing acts without such consent of Lessor shall be void, and, at the option of Lessor, shall terminate this Lease.
b. Approval of any sale, assignment or sublease shall be conditioned upon the purchaser, assignee or sublessee agreeing in writing that they will assume the rights and obligations thereby sold, assigned or subleased and that they will keep and perform all covenants, conditions and provisions of this Lease which are applicable to the rights acquired.

15. Lessee Indemnification.
a. Lessee shall indemnify, defend and hold Lessor and its officials, directors, employees, contractors and agents (“Lessor Related Parties”) harmless against and from all liabilities, obligations, damages, penalties, claims, actions, costs, charges, judgment and expenses (including reasonable attorneys’ fees, costs and disbursements) (collectively, “Losses”), arising from (a) the use of, or any activity done, permitted or suffered in or about the Property, (b) any activity done, permitted or suffered by Lessee or Lessee’s agents, contractors, invitees or licensees in or about the Property, (c) any act, neglect, fault, willful misconduct of Lessee or Lessee’s agents, or (d) from any breach or default in the terms of this Lease by Lessee or Lessee’s agents, except to the extent such claims arise out of or relate to the gross negligence or willful misconduct of Lessor. If any action or proceeding is brought against Lessor by reason of any such claim, upon notice from Lessor, Lessee shall defend the same at Lesse’s expense by counsel reasonably satisfactory to Lessor. As a material part of the consideration to Lessor, Lessee hereby releases Lessor and the Lessor Related Parties from responsibility for, waives its entire claim of recovery for and assumes all risks of (i) damage to property or injury to person in or about the Property from any cause whatsoever except to the extent caused by the gross negligence or willful misconduct of Lessor or any Lessor Related Parties, or (ii) loss resulting from business interruption or loss of income at the Property. b. The obligations of Lessee under this Section 15 shall survive any termination of this Lease. The foregoing indemnity obligations shall not relieve any insurance carrier of its obligations under any policies required to be carried by either Party pursuant to this Lease, to the extent that such policies cover the peril or currents that results in the claims that is subject to the foregoing indemnity.
92 Item 7 C.
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16. Insurance. Throughout the Term, Lessee shall provide the coverages described and comply in all respects with the insurance requirements set forth on Exhibit B.

17. Entry and Inspection. Lessor reserves the right to enter the Property for the purpose of ascertaining its condition, or to protect Lessor's interests or to inspect the operations conducted on the Property. In the event that such entry or inspection by Lessor discloses that the Property is not in a decent, safe, healthy and sanitary condition, Lessor shall have the right, after ten (10) days written notice to Lessee, to have any necessary maintenance work done at Lessee's expense and Lessee hereby agrees to pay promptly any and all costs incurred by Lessor in having such maintenance work done.

18. Lessee's Default. The occurrence of any of the following shall constitute a default by Lessee:
(a) Failure to pay rent (including additional rent) when due and upon Lessor's written demand;
(b) Failure to operate and manage the Property in a manner consistent with the general public interest and use of Lessor's adjoining property; (c) Failure to perform any other provision of this Lease if the failure to perform is not cured within fifteen (15) days, or such additional time as maybe authorized by Lessor, after notice has been given to Lessee;
(d) Voluntary filing or having involuntarily filed against Lessee any petition under any bankruptcy or insolvency act or law; (e) Adjudication as a bankrupt;
(f) General assignment for the benefit of creditors;
(g) Allowing any of its rights or interests to be subjected to attachment, execution, or other levy, or to seizure under legal process, if not released within thirty (30) days.
(h) Failure to comply with any condition of any use permit, coastal development permit, or any other land use approval given by the City in connection with the use contemplated by this Lease.

19. Remedies for Lessee's Default.
a. Lessor shall have the following remedies for Lessee's default. These remedies are not exclusive; they are cumulative and in addition to any remedies now or later allowed by law, or otherwise provided by this Lease. No delay or omission of Lessor to exercise any right or remedy shall be construed as a waiver of any such right or remedy or of any default by Lessor hereunder.
b. Lessor may terminate the Lease and recover from Lessee:
(1) The worth, at the time of the award, of the unpaid rent which had been earned at the time of the termination;
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(a) The worth, at the time of the award, of the amount by which the unpaid rent which would have been earned after the date of termination until the time of award exceeds the amount of such rental loss that Lessee proves could have been reasonably avoided;
(b) The worth, at the time of the award, of the amount by which the unpaid rent for the balance of the Term after the time of the award exceeds the amount of such rental loss for such period that Lessee proves could have been reasonably avoided; and (c) Any other amount, including court costs, necessary to compensate Lessor for all the detriment proximately caused by Lessee's failure to perform its obligations under this Lease, or which in the ordinary course of things would be likely to result therefrom.
"The worth at the time of the award," as referred to above, is to be computed by allowing interest or discounting present value employing the maximum interest rate the Lessor is permitted by law to charge."
c. Lessee hereby waives any right of redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 or 1179, or under any other present or future law, in the event Lessee is evicted or Lessor takes possession of the Property because of Lessee's default.
d. Lessor may relet the Property prior to the time of any award for breach of this Lease and such reletting does not waive Lessor's right to recover damages.

20. Limitations. Lessee agrees that any claim or defense based upon or arising out of this Lease shall be barred unless Lessee commences an action or alleges such a defense within three (3) months of the occurrence of the conduct or condition giving rise to the claim or defense. Lessee agrees that Lessor shall not in any event be liable to Lessee for lost profits or special, consequential, or exemplary damages under any circumstances arising from this Lease.

21. Attorney’s Fees. Should either Party to this Lease institute any action or proceeding in court to enforce any provision hereof or for damages by reason of any alleged breach of this Lease or for a declaration of such Party's rights or obligations hereunder, or for any other judicial remedy, the prevailing Party shall be entitled to receive from the losing Party such amount as the court may adjudge to be reasonable attorney's fees for the services rendered to the Party finally prevailing in such action or proceeding.

22. Notices.

All notices given under this Lease shall be given by registered letter deposited in the United States mail, postage prepaid to the following addresses:

To Lessor: City of Capitola City Manager Department
420 Capitola Avenue
Capitola, California 95010
Fax: 831-479-8879
Attn: City Manager
and
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To Lessee: MRA Sales, Inc.
1360 49th Ave
Capitola, CA 95010
Fax: 831-479-1576
Attn: Matt Arthur
Either Party may change the above address by notifying the other Party, as provided above. Notices shall be deemed delivered either when delivered in person or by facsimile transmission or five (5) days from the deposit in the U.S. mail as provided above.

23. Holding Over. Occupancy of the Property after the expiration of the Term of this Lease shall be construed to be a tenancy from month to month, and all other terms and conditions of this Lease shall continue in full force and effect. During any such holdover period, rent shall be fair rental value as determined by Lessor.

24. Waiver of Breach. Any waiver of or consent to any breach or breaches of any of the terms of this Lease which may be given to Lessee shall not extinguish any covenant or condition of this Lease nor constitute a waiver of any subsequent breach or breaches thereof.

25. Successor. All of the terms, covenants and conditions hereof shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the Parties hereto.

26. Interpretation.
a. Whenever the singular number is used in this Lease, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders, and the word "person" shall include corporation, firm or association, when required by the context. b. The headings or titles to the paragraphs of this Lease are for convenience and do not in any way define, limit or construe the contents of such paragraphs. c. This Lease contains all agreements of the Parties with respect to any matter mentioned herein. No prior agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified in writing only, signed by the Parties in interest at the time of the modification. Except as otherwise stated in this Lease, Lessee hereby acknowledges that neither Lessor nor any of its representatives, employees or agents has made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of the Property. Lessee assumes all responsibility for operating and maintaining the Property in compliance with all applicable laws and regulations during the Term of this Lease, except as otherwise specifically stated in this Lease.
d. The laws of the State of California shall govern the validity, performance and enforcement of this Lease.
e. If any provision of this Lease is determined to be void by any court of competent jurisdiction, such determination shall not affect any other provision of this Lease which shall remain in full force and effect. If any provision of this Lease is capable of two constructions, one which would render the provision void and one which would render the provision valid, the provision shall be interpreted in the manner which would render it valid. 95 Item 7 C.
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27. Time is of the Essence. Time is of the essence in the performance of all terms and conditions of this Lease.

IN WITNESS WHEREOF this Lease is executed by Lessor, acting by and through its lawfully authorized officers, and by Lessee, acting by and through its lawfully authorized officers.

DATED: “LESSOR”
CITY OF CAPITOLA, a municipal corporation
By:________________________________
Jame Goldstein, City Manager
“LESSEE”
By:________________________________
Matt Arthur
Its: ________________________________

Approved as to form:
_________________________
Samantha Zutler, City Attorney
Exhibit A: Property
Exhibit B: Insurance Requirements

96 Item 7 C.

Exhibit A
4895-8854-8342 v3
Exhibit A
Property
97 Item 7 C.
4895-8854-8342 v3 2
Exhibit B
Insurance Requirements
Lessee shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with Lessee’s operation and use of the leased premises. The cost of such insurance shall be borne by Lessee.

MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:

1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.

2. Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease. (This applies to lessees with employees).

3. Property insurance against all risks of loss to any tenant improvements or betterments, at full replacement cost with no coinsurance penalty provision.

If Lessee maintains broader coverage and/or higher limits than the minimums shown above, Lessor requires and shall be entitled to the broader coverage and/or the higher limits maintained by Lessee. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to Lessor.

Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:

Additional Insured Status
Lessor, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of any contractor including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the contractor’s insurance (at least as broad as ISO Form CG 20 10 11 85 or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 if a later edition is used).

Primary Coverage
For any claims related to this contract, Lessee’s insurance coverage shall be primary and non-contributory and at least as broad as ISO CG 20 01 04 13 as respects Lessor, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by Lessor, its officers, officials, employees, or volunteers shall be excess of the Lessee’s insurance and shall not contribute with it. This requirement shall also apply to any Excess or Umbrella liability policies.

Umbrella or Excess Policy
Lessee may use Umbrella or Excess Policies to provide the liability limits as required in this agreement. This form of insurance will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required, 98 Item 7 C.
4895-8854-8342 v3 3
including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the Contractor’s primary and excess liability policies are exhausted.

Legal Liability Coverage
The property insurance is to be endorsed to include Legal Liability Coverage (ISO Form CP 00 40 04 02 or equivalent) with a limit equal to the replacement cost of the leased property.

Liquor Liability
If Lessee will be supplying alcoholic beverages, the general liability insurance shall include host liquor liability coverage. If Lessee is using a caterer or other vendor to supply alcohol that vendor must have liquor liability coverage. If Lessee intends to sell alcohol either Lessee or vendor providing the alcohol for sale must have a valid liquor sales license and liquor liability insurance covering the sale of alcohol.

Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to Lessor.

Waiver of Subrogation
Lessee hereby grants to Lessor a waiver of any right to subrogation which any insurer of said Lessee may acquire against Lessor by virtue of the payment of any loss under such insurance.

Lessee agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not Lessor has received a waiver of subrogation endorsement from the insurer.

Self-Insured Retentions
Self-insured retentions must be declared to and approved by Lessor. Lessor may require Lessee to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or Lessor. The CGL and any policies, including Excess liability policies, may not be subject to a self-insured retention (SIR) or deductible that exceeds $25,000 unless approved in writing by Lessor. Any and all deductibles and SIRs shall be the sole responsibility of Lessee who procured such insurance and shall not apply to the Indemnified Additional Insured Parties. Lessor may deduct from any amounts otherwise due Lessee to fund the SIR/deductible. Policies shall NOT contain any self-insured retention (SIR) provision that limits the satisfaction of the SIR to the Named. The policy must also provide that Defense costs, including the Allocated Loss Adjustment Expenses, will satisfy the SIR or deductible. Lessor reserves the right to obtain a copy of any policies and endorsements for verification.

Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to Lessor.

Verification of Coverage
Lessee shall furnish Lessor with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause and a copy of the Declarations and Endorsements Pages of the CGL and any Excess policies listing all 99 Item 7 C.
4895-8854-8342 v3 4
policy endorsements. All certificates and endorsements and copies of the Declarations & Endorsements pages are to be received and approved by Lessor before work commences.

However, failure to obtain the required documents prior to the work beginning shall not waive Lessee’s obligation to provide them. Lessor reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. Lessor reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

Special Risks or Circumstances
Lessor reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. 100
Item 7 C.

Capitola City Council
Agenda Report
Meeting: March 13, 2025
From: Finance Department
Subject: FY 2023-24 Audit Report
Recommended Action: Receive a report on the FY 2023-24 annual audit.

Background: The City of Capitola is required by state statute to publish a complete set of financial statements presented in conformity with generally accepted accounting principles and audited in accordance with generally accepted auditing standards. The audit must be conducted by a firm of licensed certified public accountants.

The City’s Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2024, has again received an “unmodified” opinion, which indicates the auditor believes the financial statements are presented fairly in all material respects. The City’s annual audit and ACFR meet all state and federal requirements and will be available to the public at City Hall, as well as on the City’s website.

Discussion: The financial report presents the financial condition, results of operations, and current economic condition for the City and component units’ Fiscal Year, ended June 30, 2024. Financial information for the Successor Agency is presented as a separate Private Purpose Trust Fund within the ACFR.

The independent audit firm Chavan and Associates, LLP issued the following opinion on the City’s financial records, found on page two of the ACFR: “In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Capitola, California, as of June 30, 2024, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.”
The Fiscal Year (FY) 2023-24 ACFR has been submitted to the Government Finance Officers’ Association for the Excellence in Financial Reporting Award. The City’s ACFR has received this prestigious award for the last nine fiscal years. Previously, the City had received the California Society of Municipal Finance Officers Award for the Outstanding Financial Reporting every year since FY 2000.

In addition to the ACFR, the auditor also issues a Management Letter and the Letter of Required Disclosures to the Governing Body and Statement of Auditing Standards (SAS) 114. The Management Letter discusses the City’s internal control over financial reporting and makes recommendations, if necessary, of controls that need to be strengthened. The SAS 114 Letter is a document that discusses, among other matters, any significant audit findings. Neither document identified any areas of concern.

Fiscal Impact: The following are key financial highlights of the FY 2023-24 ACFR:
101
Item 7 D.
 Net Position
o Current and other assets $ 21,318,624
o Capital assets 50,878,594
o Total Assets $ 72,197,218
o Total Deferred Outflows of Resources $ 13,186,912
o Other Liabilities $ 3,582,688
o Long-term liabilities
 Due in one year 68,823
 Due in more than one year 34,869,952
o Total Liabilities $ 38,521,463
o Total Deferred Inflows of Resources $ 2,564,026
o Net Position:
o Net investment in capital assets $ 50,115,979
o Restricted 12,131,607
o Unrestricted (17,948,945)
o Total Net Position $ 44,298,641
 Revenues
o General Revenues:
o Taxes:
 Sales and use taxes $ 8,221,640
 Property taxes 3,200,895
 Transient occupancy taxes 2,219,951
 Franchise taxes 729,485
 Business license taxes 323,755
o Motor vehicle in-lieu 12,171
o Investment income 770,404
o Miscellaneous revenue 360,771
o Program Revenues:
 Charges for services 3,355,793
 Operating grants and contributions 858,915
 Capital contributions and grants 5,952,237
o Total Revenues $ 26,267,781
 Expenses
o General Government $ 5,580,935
o Public Safety 8,450,102
o Community Development 1,371,360
o Culture and Recreation 2,983,749
o Public Works 4,329,241
o Interest and other charges 13,272
o Total Expenses $ 22,728,659
o Change in Net Position 3,539,122
o Beginning Net Position 40,759,519
o Ending Net Position $ 44,298,641
102
Item 7 D.
 General Fund
o Fund balance:
o Restricted:
 PERS Retirement Trust $ 1,531,142
o Assigned:
 Emergency Reserve 1,631,506
 Contingency Reserve 2,364,346
o Unassigned 1,490,325
o Total Fund Balance $ 7,017,319
 Capital Assets:
o Land $ 4,883,789
o Building & Improvements 17,748,240
o Equipment 5,334,562
o Infrastructure 37,721,731
o Construction in Progress 15,393,620
o Total Capital Assets $ 81,081,942
o Less Depreciation 30,203,348
o Capital Assets Net of Depreciation $ 50,878,594
 Long-Term Debt / Liability
o Pacific Cove Capital Lease 0
o Beach & Village Parking Lease 762,615
o Compensated Absences 1,026,750
o Net OPEB Obligation 1,549,998
o Net Pension Liability 32,157,510
o Total Long-Term Debt $ 35,496,873
The next opportunity to review the City’s financial picture, including updated revenue and expenditure forecasts, will be during the FY 2025-26 budget hearings.

Attachments:

1. City of Capitola FY 2023-24 ACFR

2. Governance Communication Letter

3. Management Letter - Internal Control Compliance Report Report Prepared By: Jim Malberg, Finance Director
Reviewed By: Julia Gautho, City Clerk
Approved By: Jamie Goldstein, City Manager
103
Item 7 D.

Annual Comprehensive
Financial Report
City of Capitola, California
Fiscal Year Ended June 30, 2024
104
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105
Item 7 D.

CITY OF CAPITOLA

CALIFORNIA

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED
JUNE 30, 2024
106
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107
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INTRODUCTORY SECTION
108
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109
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CITY OF CAPITOLA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2024

TABLE OF CONTENTS

INTRODUCTORY SECTION
Transmittal Letter .......................................................................................................................... 1 List of Principal Officials ............................................................................................................... 12 Organizational Chart .................................................................................................................... 13 GFOA Certificate ......................................................................................................................... 14

FINANCIAL SECTION
Independent Auditor’s Report ....................................................................................................... 18 Management’s Discussion and Analysis (Required Supplementary Information) ............................ 23 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position .................................................................................................. 38 Statement of Activities ...................................................................................................... 39 Fund Financial Statements
Governmental Funds:

Balance Sheet .............................................................................................................. 41 Reconciliation of the Government Funds Balance Sheet
to the Government-Wide Financial Statement of Net Position .................................. 42 Statement of Revenues, Expenditures and Changes in Fund Balances ............................ 43 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities ........................................................................................... 44 Index to the Notes to Basic Financial Statements ..................................................................... 48 Notes to the Basic Financial Statements .................................................................................. 49

REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (GAAP Basis):

General Fund .................................................................................................................... 80 Federal Home Loan Reuse Fund ........................................................................................ 81 Capitola Housing Successor Fund ...................................................................................... 82 RTC Streets Fund .............................................................................................................. 83 Schedule of Pension Contributions (CalPERS Miscellaneous) ....................................................... 84 Schedule of Pension Contributions (CalPERS Safety) ................................................................... 85 Schedule of Proportionate Share of Net Pension Liability .............................................................. 86 Schedule of OPEB Contributions .................................................................................................. 87 Schedule of Changes in Net OPEB Liability and Related Ratios .................................................... 88

SUPPLEMENTARY INFORMATION
Budgeted Major Funds:

Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (GAAP Basis):

Capital Projects Fund ....................................................................................................................................... 91 110
Item 7 D.

CITY OF CAPITOLA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2024

TABLE OF CONTENTS
Nonmajor Governmental Funds:

Combining Balance Sheet ............................................................................................................... 95 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................. 99 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (GAAP Basis):

Supplemental Law Enforcement Fund ....................................................................................................... 103 Restricted Transient Occupancy Tax Fund ................................................................................................. 104 Senate Bill 1 Road Rehabilitation and Maintenance Fund ......................................................................... 105 Gas Tax Fund ............................................................................................................................................. 106 Wharf Fund ................................................................................................................................................. 107 Public Art Fee Fund .................................................................................................................................... 108 Parking Reserve Fund ................................................................................................................................. 109 Technology Fees Fund ................................................................................................................................ 110 PEG Cable TV Access Fee Fund ................................................................................................................ 111 Capitola Village and Wharf BIA Fund ....................................................................................................... 112 CDBG Fund ................................................................................................................................................ 113 CDBG Program Income Fund .................................................................................................................... 114 Library Fund ............................................................................................................................................... 115 Affordable Housing Fund ........................................................................................................................... 116 Permanent Local Housing Allocation Fund ................................................................................................ 117 Pacific Cove Debt Financing Fund .............................................................................................................. 118 Beach and Village Lot II Debt Financing Fund .......................................................................................... 119

STATISTICAL SECTION
ACFR Statistical Section - Table of Contents ..................................................................................... 123 Financial Trends Information:

Net Position by Component .......................................................................................................... 125 Changes in Net Position ............................................................................................................... 126 Fund Balances of Governmental Funds ......................................................................................... 128 Changes in Fund Balances of Governmental Funds ....................................................................... 130 General Revenues by Source ........................................................................................................ 132 Revenue Capacity Information:

Net Taxable Assessed Value History ..................................................................................................................... 133 Assessed Value of Taxable Property ..................................................................................................................... 134 Direct and Overlapping Property Tax Rates .......................................................................................................... 135 Top Ten Property Taxpayers ................................................................................................................................. 136 Property Tax Levies and Collections ..................................................................................................................... 137 Top 25 Sales Tax Taxpayers .................................................................................................................................. 138 Debt Capacity Information:

Ratios of Outstanding Debt by Type ..................................................................................................................... 139 Ratios of General Bonded Debt Outstanding ......................................................................................................... 140 Direct and Overlapping Debt ................................................................................................................................. 141 Legal Debt Margin Information ............................................................................................................................. 142 Demographic and Economic Information:

Demographic and Economic Statistics .................................................................................................................. 143 Principal Employers - Top Ten .............................................................................................................................. 144 Operating Information:

Full-Time and Part-Time City Employees by Function ......................................................................................... 145 Operating Indicators by Function .......................................................................................................................... 146 Capital Asset Statistics by Function ...................................................................................................................... 147 111
Item 7 D.

TRANSMITTAL LETTER
112
Item 7 D.

February 12, 2025
Honorable Mayor,
Members of the City Council, and
Citizens of the City of Capitola
SUBJECT: Annual Comprehensive Financial Report - June 30, 2024 The Annual Comprehensive Financial Report (ACFR) for the City of Capitola for the fiscal year ended June 30, 2024, is hereby submitted.

REPORT PURPOSE AND ORGANIZATION
State law requires the accounts and fiscal affairs of all municipal entities to be audited annually by an independent certified public accountant. The City's independent auditor Chavan & Associates, LLP has audited the City's financial statements and issued an unmodified opinion that the financial statements for the fiscal year ended June 30, 2024, are fairly presented in conformity with generally accepted accounting principles (GAAP). This opinion, along with the basic financial statements of the City, are hereby submitted as the Annual Comprehensive Financial Report (ACFR) for the City of Capitola for the fiscal year ended June 30, 2024, and included in the financial section of this report in fulfillment of the above requirement.

The independent audit of the financial statements is also typically conducted in conjunction with the federally mandated Single Audit. The standards governing the Single Audit require the independent auditor to report on items beyond fair presentation of the financial statements, including internal controls and compliance with legal requirements involving the administration of federal awards. During fiscal year 2024 the City received over $3.3 million in Federal Awards which will require the completion of a Single Audit Report due by March 31, 2025. The City’s was last required to complete a Single Audit Report for the fiscal year ended June 30, 2012.

This report consists of City management's representations concerning the finances of the City of Capitola. Consequently, management assumes full responsibility for completeness, accuracy of data, and fairness of presentation, including all footnotes and disclosures. Management believes the data presented are accurate in all material respects and that they are presented in a manner designed to fairly set forth the financial position and results of operations of the City. To provide a reasonable basis for making these representations, City management has established a comprehensive framework of internal controls designed both to protect the City's assets from loss, theft, or misuse and to compile sufficiently reliable information for the preparation of the City's financial statements in conformity with GAAP. Because the cost of internal controls should not exceed their benefits, the City's internal controls have been designed to provide reasonable rather than absolute assurance that the financial statements are free of material misstatements. The audit provides users with reasonable assurance that the information presented is free from material misstatements. As management, we assert that to the best of our knowledge, this financial report is complete and reliable in all material respects. 113
Item 7 D.

GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found in the Financial Section of this document, immediately following the report of the independent auditor.

CITY OF CAPITOLA PROFILE
The City of Capitola is a small coastal community located in Santa Cruz County that occupies approximately two square miles and serves a population of about 9,800. Located on the northern edge of Monterey Bay, approximately 35 miles north of Monterey and 75 miles south of San Francisco, Capitola enjoys a rich history and offers residents diverse recreational opportunities.

Capitola Village is located along a sandy beach with expansive views of Monterey Bay and is home to numerous craft galleries, boutiques, and restaurants. The City is host to numerous events, including the Capitola Beach Festival, Capitola Art and Wine Festival, and the annual Wharf to Wharf race.

Named the Most Walkable Beach Town in the United States by Elle Décor Magazine, voted one of the best beach locations on the California Coast by Sunset Magazine, and recently named one of the “9 Most Unspoiled Vacation Spots” by the Fishing Booker website, Capitola offers fishing and boating, along with beachfront restaurants, shops, and entertainment. Other visitor attractions include the Capitola Historical Museum, Capitola Wharf, and the Capitola Mall.

Although Capitola is considered a central coast beach destination, it is also one of two major retail centers in Santa Cruz County. The Capitola Mall, combined with Brown Ranch and 41st Avenue businesses, is the retail hub of the central county. With major retailers such as Target, Macy’s, Kohl’s, CVS, Ross, New Leaf Community Market and Whole Foods Market, Capitola is a “net regional retail provider” with retails sales several times higher than the retail demand of Capitola city residents. The City also has two major car dealerships.

Capitola is also fortunate to have outstanding educational opportunities. In addition to having New Brighton Middle School within its City limits, both Cabrillo Community College and the University of California, Santa Cruz, are within eight miles of the City. According to the U.S. Census Bureau’s 2020 data, approximately 93% of Capitola residents are high school graduates and 40% possess a Bachelors’ Degree or higher-level degree.

Form of Government
Capitola is a General Law City, which was incorporated on January 11, 1949. The City is subject to the framework and procedures established by State Law and operates under the Council – City Manager form of government. The Council is comprised of four Council Members and a Mayor, all of whom are directly elected by the citizens. The Council Members serve four-year staggered terms; and the Mayor and Vice-Mayor are elected annually by the Council. The Council has the authority to establish all laws and regulations with respect to municipal affairs, subject only to the limitations of the City Municipal Code and the State legislation.

The City Council appoints a City Manager to serve as the City’s chief administrative officer. The City Manager provides direction and leadership to all City departments and ensures that all City Council policies are implemented.
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City Services
The City provides police protection, street, park and facilities maintenance, recreation, building, planning, zoning, administrative, and financial services for Capitola. Independent special districts provide fire protection, water, sewer, and limited drainage services.

Financial data for all funds through which services are provided by the City have been included in this report based on the criteria adopted by the Government Accounting Standards Board (GASB), which is the authoritative body in establishing United States GAAP for local governments.

Budgetary Policy and Control
The City’s budgetary records are maintained on a modified accrual basis. Revenues are recorded when measurable and available and expenditures are recorded when goods or services are received, and the liability incurred. The City produces a two-year annual budget, which serves as the foundation for the City of Capitola’s financial planning and control. Based on the City’s Financial Management Policies, the City is required to maintain a balanced operating budget; along with using one-time revenues to fund non-recurring expenditures. In the budget development process, the City references the following Budgeting Principles to identify key projects and goals: Fiscal Policy, Public Service, and Public Improvements.

In accordance with the City’s Municipal Code, the budget is adopted by resolution on or before June 30th for the ensuing fiscal year. Expenditures authorized in the final budget resolution are appropriated at the budget unit level. Capital projects are budgeted at the individual project level.

The City Council may appropriate, amend, or transfer funds by an affirmative vote of three or more Council members at any regular or special Council meeting.

Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the environment in which the City operates.

Local Economy
The City of Capitola experienced a strong economy during Fiscal Year (FY) 2023-24 despite the impacts of storms in both January & December 2023 which caused significant damage to local businesses and local infrastructure. General fund revenues were approximately $19 million exceeding the budget by $276,000 while general fund expenditures were $19.7 million which was approximately 89,000 below budget. Tax revenue received was on budget, license and permit revenue as well as other revenues exceeded budget. However, charges for services and fines and forfeiture revenues were below budget. The net position of the General Fund decreased by approximately $3.9 million, which was anticipated with the completion of the wharf rehabilitation project. The fund balance decrease was by design of the FY 2023-2024 budget and general fund transfers out to the Capital Improvement Project (CIP) fund of $3.4 million. 115
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The three major sources of General Fund revenue include Sales Tax, Property Tax, and Transient Occupancy Tax (TOT). These three revenues account for approximately 90% of all General Fund Revenues.

Sales tax is the City’s largest source of revenue, accounting for approximately 46% of the General Fund Revenues. The City sales tax consists of 1% Bradley Burns, 0.25% Capitola District Tax (Measure O), and a 0.25% Capitola District Tax (Measure F) that is effective from January 1, 2018, through December 31, 2027. In FY 2024-25, the combined sales tax receipts of $8.22 million were $395,710 (4.6%) lower than budgetary estimates and $320,779 (3.8%) lower than the prior year.

Sales tax receipts are volatile and reflect the current local, state, and national economic condition.

Sales Tax collections for the City of Capitola decreased year over year after leveling off last year post-pandemic, however sales tax revenues have been relatively flat since FY 2015-16. The following chart shows sales tax trends over the past ten years as well as demonstrating the proportional share of District and Bradley Burns Sales taxes.

Capitola’s second major source of revenue is property tax. In FY 2023/24 the General Fund received $3.0 million in property tax receipts, prior to inclusion of Documentary Transfer Tax and Residual RDA distributions. This base amount was approximately $149,000 more than the prior year and $14,000 below the final budgeted amount. Over the last five fiscal years the City has averaged approximately 5% growth in annual property tax collections. Although the FY 2023/24 increase was lower compared to that of the prior year, it was on trend at 4.95%. $-
$1
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FY14/15 FY15/16 FY16/17 FY17/18 FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24 Millions
Sales Tax Trends
Bradley Burnes Measure D Measure O Measure F
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The City’s property tax revenues do not respond to economic conditions as quickly as sales tax revenues. This delayed response, along with less volatility, assists the City in adjusting to economic downturns by lessening the immediacy of revenue loss. The following chart includes Property Tax Revenue, as well as Property Tax In-Lieu of Vehicle License Fees. Based on historical data, property tax revenues have remained relatively consistent due to appreciating property values. Staff anticipate this trend, while showing signs of slowing, will continue into the next fiscal year.

Transient occupancy tax (TOT) represents approximately 12% of General Fund revenues. While tourism and economic growth have remained stable, TOT revenue remained flat from FY 2015- 16 through FY 2017-18 due to limitations on hotel and vacation rental room inventory. In November 2018 Capitola voters approved an increase in the TOT rate from 10% to 12% with

0.40% dedicated to local business groups and 0.35% dedicated to Early Childhood and Youth programs. The new TOT rate became effective on January 1, 2019, boosting TOT revenues in FY 2018-19. TOT revenues were one of the most impacted revenues due to COVID-19 and saw a significant reduction during the fourth quarter of FY 2019-20, however they rebounded quickly and continue to exceed pre-pandemic amounts. The chart below provides a 10-year history of TOT revenues.
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$3.5
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Property Tax Trends
Property Taxes - Regular Residual Distribution
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Long-term Financial Planning
In the past, the City has made strategic decisions to help maintain resiliency in difficult economic times. As a continuation of this practice, the City is focusing on the following planning measures:

Planning for Sales Tax Revenues
The City of Capitola sales tax revenue consists of 1% Bradley Burns Sales tax and two 0.25% District taxes. The first District sales tax, Measure O, is a permanent 0.25% sales tax that was approved by voters in November 2012 and went into effect April 1, 2013. Measure O was implemented with the goal of replenishing reserves, funding CIP projects, and providing support for public safety initiatives. The City developed a five-year plan to ensure that Measure O funds were applied to their stated priorities. Each of the district taxes collect approximately $1.0 million in General Fund revenues annually.

The second District tax, Measure F, was passed by voters in 2016 to extend Measure D, a temporary quarter of one percent sales tax, for an additional ten 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. The adopted FY 2023- 2024 budget continued implementing these commitments as Measure F went into effect on January 1, 2018.
$0.0
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FY 14/15FY 15/16FY 16/17FY 17/18FY 18/19FY 19/20FY 20/21FY 21/22FY 22/23FY 23/24 Millions
Transient Occupancy Tax Trends
TOT - Restricted TOT - General Fund
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Replenishing and Increasing Reserves
The City has been proactive in establishing a stable reserve level. A portion of Measure O revenues were set aside to replenish the Contingency and Emergency Reserve Funds. The City’s reserves were depleted in March of 2011 when an underground storm drain failed, which resulted in damage to the Pacific Cove Mobile Home Park, City Hall, and portions of Capitola Village. As a result, the City paid $1.4 million in flood related costs over a two-year period and assumed a $2.39 million debt to relocate residents of the City-owned Pacific Cove mobile home park. This incident reduced the City’s reserves from $1.87 million in FY 2009-10 to $561,000 in FY 2011-12.

This incident, along with the economic downturn, emphasized the need to review reserve policy levels to ensure the City was maintaining a sufficient balance to effectively manage unforeseen events.

In FY 2012-13 the City increased the Emergency Reserve funding level from 5% to 10% of operating expenditures and the Contingency Reserve funding level from 10% to 15% to ensure sufficient reserves are available to offset the effects of the next economic downturn and unforeseen emergencies.

In FY 2015-16 the City implemented a PERS Contingency Reserve Fund to ensure future funding availability for potential CalPERS contribution increases. The initial funding came from a $300,000 transfer from the General Fund. The City invested the funds with Public Agency Retirement Services (PARS) in a moderately conservative trust fund that allows for a higher rate of return.

During FY 2017-18, the City put an additional $500,000 in the PERS trust fund and budgeted an additional $500,000 in FY 2022-23. In each FY 2022-23 and FY 2023-24 $250,000 was put into the PERS trust fund bringing total contributions to $1.3 million. 119
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Maintain the Facilities Reserve Fund
The City created a Facilities Reserve Fund in FY 2014-15. The purpose of the Facilities Reserve Fund is to create a mechanism to fund future facility maintenance projects. Examples of projects that could be financed through the fund include replacing roofs, painting exteriors, replacing mechanical/electrical equipment, and maintenance of adjoining parking spaces. The Facilities Reserve Fund ended FY 2023-24 with a cash balance of $282,714. The FY 2024-25 budget does not include any funding into the Facilities Reserve Fund or expenditures in the Facilities Reserve Fund. Staff anticipate continuing annual contributions to the Facilities Reserve in FY 2024-25.

Funding Other Post-Employment Benefits Obligation (OPEB) The City created an OPEB trust fund in FY 2013-14 in order to reduce and eventually eliminate the liability. Before prefunding the OPEB Liability, the City historically contributed the Minimum Employer Contribution required under the Public Employees’ Medical and Hospital Care Act (PEMHCA). The transition from “pay as you go” financing to full funding, reduced the City’s longterm liability from $1,011,800 to $657,500. In May 2014 the Actuarial Standards Board adopted standard number 6 (ASOP 6) requiring the calculation of the “Implicit Rate Subsidy”. The implicit rate is an inherent subsidy of retiree healthcare costs by active employee healthcare costs when healthcare premiums paid by retirees and actives are the same.

Following the advice of the City’s auditors as well as the new Actuarial Consultant, the current OPEB Actuarial Valuation now includes the Implicit Rate Subsidy calculation. This one change caused the Unfunded Actuarial Accrued Liability to increase $1,201,442, increasing the balance from $584,737 on June 30, 2019, to $1,572,208 on June 30, 2020. The balance on June 30, 2023, the latest actuarial measurement date, was $1,214,482. The FY 2024-25 Adopted Budget includes funding of $67,050 for the OPEB trust fund.

Controlling Personnel Costs
Being a service-oriented organization, personnel costs make up the largest General Fund expenditure. The personnel budget comprises approximately 68% of the General Fund.

In 2021 all bargaining units agreed to multi-year contracts continuing with the cost sharing of CalPERS contributions originally negotiated in FY 2013-14, cost of living adjustments (COLA) based on the Consumer Price Index, and Flex Health Care spending increases. All bargaining units, with the exception of the Mid-Management Employees, agreed to new three-year contracts through June 30, 2024, while the Mid-Management Employees agreed to a new one-year contract through June 30, 2024, following the expiration of their two-year contract June 30, 2023.

Recent changes in CalPERS’ risk pools have had a significant negative impact on the City. These changes will result in an annual increase in CalPERS costs of 19.3% in FY 2024-25. Due to investment losses of 6.1% in 2022 the annual CalPERS cost is projected to increase 10.8% in FY 2025-26. However, CalPERS 2024 rate of return was 9.3% which is above the anticipated rate of return of 6.8% and will likely hopefully lead to decreased costs in FY 2026-27.

Understanding that existing employees were already contributing more than the CalPERSdesignated “employee share,” the City’s current labor contracts set future employee CalPERS contribution rates at a fixed percentage of compensation to reduce the impact on employees. 120
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The number of full-time equivalent (FTE) positions city-wide increased 1.5 during FY 2023-24 as the City filled the final vacant position that was frozen in order to mitigate the fiscal impacts from COVID-19 and enhanced services in multiple departments. The total city-wide authorized FTEs in FY 2023-24 was 73 with 73.5 positions budgeted.

Major Initiatives
Capitola Mall Redevelopment
The City has continued to seek redevelopment opportunities to update and upgrade the City’s major retail corridor and mall area. Upgrades to the Capitola Mall are now anticipated with the April 2016 purchase of the Mall by Merlone Geier Partners, a private real estate investment company focused on the acquisition, development, and redevelopment of retail and retail-driven mixed-use properties on the West Coast. The City received a development application from Merlone Geier Aug. 27, 2019, however, due to COVID-19 the project has been put on hold by the developer.

Funding Measure F Commitments
In November 2016 voters of Capitola approved extending an existing quarter of one percent sales tax for an additional ten years. The city has committed this sales tax revenue to protecting the beach and wharf from rising sea levels and storms, supporting bike and pedestrian safety projects, and maintaining police staffing levels.

In FY 2022-23 Measure F funding was programed towards the Wharf Rehabilitation Project. The FY 2023-24 adopted budget included $1.1 million of Measure F funding towards the Wharf Rehabilitation Project. Previously the flume and jetty reconstruction projects were fully funded and completed in FY 2020-21. Work began on these projects in FY 2017-18 along with the use of Measure F funds to replace the 20-year-old front end loader for beach maintenance.

Capitola Wharf Resiliency and Public Access Improvements The Capitola Wharf, known as Soquel Landing at the time, was built more than 150 years ago for F.A. Hihn in order to ship goods produced in the region such as timber, leather, paper, and products from local farms. The Wharf has been damaged and rebuilt numerous times during its history and in 1979 the City of Capitola accepted the grant deed to the Wharf from the County.

Following a complete renovation project, the City opened the wharf to the public in 1981. Since that time, the City has used revenue generated from the lease agreements with the restaurant and boat & bait shop to maintain the wharf. A recent report commissioned by the City recommended a number of larger scale projects to better protect the wharf from the impacts of storms and rising sea levels.

The current budget for the Capitola Wharf Resiliency and Public Access Improvements project is $8.2 million which includes repairing damage from the January 2023 storms. Prior year appropriations of $9.4 million include $2.2 million of Measure F funding, State grant funds of $1.9 million, Federal grant funds of $3.5 million, State funding of $500,000 and $1.3 million of general funds while prior year expenditures and encumbrances total $1.2 million. The FY 2023-24 Adopted Budget included additional funding of $1.1 million from Measure F to complete the funding for the project. The Capitola Wharf Resiliency and Public Access Improvements project began construction in Sept. 2023 and was completed August 2024. 121
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Relevant Financial Policies
Financial Management Policies
The City has developed comprehensive Financial Management Policies to assist with the management of the operating and capital budgeting process and to standardize and rationalize the issuance of debt. This document focuses on Capital Budgeting and Reserves – Issuance of Debt, Operating Budgeting and Reserves and Other Polices, which addresses conformance with Generally Accepted Accounting Principles (GAAP), and Internal Borrowings. This policy requires the City to maintain a balanced operating budget; along with the use of one-time revenues to fund non-recurring expenditures.

A key component of this policy focuses on reserve requirements. Each fiscal year, the final adopted General Fund budget is required to have a Contingency Reserve appropriation equal to 15% of the General Fund operating expenditures and an Emergency Reserve appropriation equal to 10% of the General Fund operating expenditures. The purpose of the Contingency Reserve is 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. The purpose of the Emergency Reserve Fund is to protect against one-time significant costs that may arise from major unpredictable emergency events.

Investment Policy
The City’s Investment Policy governs the investment of temporary cash excesses. Investments are prioritized based on the following order of importance: Safety of principal, liquidity, and yield.

Various low risk investments, such as U.S. Treasury bills are permitted. During the year, all excess cash balances, which were not held by a fiscal agent, were invested in the California Local Agency Investment Fund (LAIF) and U.S. Treasury. At no time during the year was the City's cash invested in a manner that violates this policy.
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AWARD FOR EXCELLENCE IN FINANCIAL REPORTING
The Government Finance Officers Association of the United States and Canada (GFOA) also awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Capitola’s ACFR for the fiscal years ended June 30, 2012, through June 30, 2023. This Certificate of Achievement is a prominent national award recognizing conformance with the highest standards for preparation of State and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized Annual Comprehensive Financial Report whose contents conform to program standards. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A GFOA Certificate of Achievement is valid for a period of only one year. The City of Capitola believes the FY 2024 ACFR conforms to the Certificate of Achievement program requirements and will be submitting it to GFOA for review.

Prior to receiving the GFOA Award, the City received the Certificate for Outstanding Financial Reporting for its Annual Comprehensive Financial Report (ACFR) from the California Society of Municipal Finance Officers (CSMFO). This award was received consistently from FY 1999-00.

Once a GFOA Award is received, CSMFO prohibits cities from applying and receiving both awards.

ACKNOWLEDGEMENTS
Preparation of this report would not have been possible without the efficient and dedicated services of the entire Finance Department staff. I would also like to express our appreciation to the partners and staff of our auditors for their assistance and support.

I wish to express my thanks and appreciation to the Mayor and members of the City Council for their unfailing leadership and support in planning and conducting the financial operations of the City in a responsible and progressive manner.

Respectfully submitted,
Jamie Goldstein
City Manager
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CITY OF CAPITOLA

LIST OF PRINCIPAL OFFICIALS
FOR
FISCAL YEAR ENDED JUNE 30, 2024

ELECTED OFFICIALS
Mayor – Kristen Brown
Vice Mayor – Yvette Brooks
Council Member – Joe Clarke
Council Member – Margaux Morgan
Council Member – Alexander Pedersen

APPOINTED OFFICIALS
City Manager – Jamie Goldstein
City Attorney – Burke, Williams, & Sorensen, LLP

DEPARTMENT HEADS/ADMINISTRATORS
Assistant to the City Manager – Chloe Woodmansee
Chief of Police – Andy Dally
City Clerk – Julia Gautho
Community Development Director – Katie Herlihy
Community Services & Recreation Director – Nikki Bryant Finance Director – Jim Malberg
Public Works Director – Jessica Kahn
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Human Resources
Analyst
City Clerk
Com. Services &
Recreation Dir.

Parking
Enforcement (3)
Council
Finance Director &
Treasurer
Community Development
Director Police Chief Public Works
Director
Police Officers
(15)
Community
Service Officers (2)
Sergeants (4)
Captain (2)
Records Manager
Records Technician
(2)
Senior Accountant
Accountant I (2) Account Tech
Associate Planner
Building Official
Building Inspector
Senior Planner Environmental
Projects Manager Project Manager
Operations Field
Supervisor
Mechanic
Maint. Worker 1, 2,
& 3 (13)
Senior
Mechanic
Museum Curator (.5)
Event Specialist II
Information Systems
Specialist (.5)
Hourly Temps
Customer Service/
Office Coordinator
Dept. City Clerk
Assistant to the
City Manager
Contract employee (s)
City staff
Admin. Records
Analyst
City Manager
Attorney
Vacant & or Frozen
Development Tech
Rec. Coordinator
(3)
Development Tech
Customer Service/
Office Coordinator
Assistant Planner
Temporary Employee (s)
Hourly/Temps
Voters
City of Capitola Organization Chart June 2024
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Capitola
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
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FINANCIAL SECTION
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16450 Monterey Road, Suite #5, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Capitola
Capitola, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Capitola (the “City"), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise City’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Capitola, as of June 30, 2024, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements City management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher 130
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16450 Monterey Road, Suite #5, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and GAGAS, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and other required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund financial statements, schedules, and other information listed in the supplementary information section of the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements.

Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain 131
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16450 Monterey Road, Suite #5, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual comprehensive financial report.

The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 11, 2025 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.

The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Chavan & Associates, LLP
Certified Public Accountants
February 11, 2025
Morgan Hill, California
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MANAGEMENT’S DISCUSSION

AND ANALYSIS
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City of Capitola Management’s Discussion and Analysis

INTRODUCTION
As management of the City of Capitola (the City), we offer readers of the City’s financial statements this narrative overview and analysis of financial activities of the City for the fiscal year that ended on June 30, 2024. We encourage readers to consider the information presented here, in conjunction with additional information that we have furnished in our letter of transmittal. The required components of the report are listed below.

Required Components of the Annual Financial Report
FISCAL YEAR 2023/24 FINANCIAL HIGHLIGHTS
Government-Wide Highlights
 The assets and deferred outflows of resources for the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $44.30 million (net position). Of the net position, $50.12 million was classified as net investment in capital assets; $12.13 million recorded as restricted funds; and $17.95 million categorized as a deficit unrestricted net position (negative net position). The negative unrestricted net position is largely due to GASB 68 – Accounting and Financial Reporting for Pensions. This pronouncement requires local governments to record pension liabilities and related deferrals in the government-wide financial statements.  The City’s net position increased by $3.84 million which was all from Governmental Activities.  City revenues increased by $4.96 million, or 23%, when compared to the prior year. The Fiscal Year 23/24 increase was mostly from an increase of $4.31 million in capital grants and contributions.  Deferred outflows of resources decreased by $479,224, while deferred inflows of resources decreased by $946,242. This was primarily related to pension liability adjustments identified in the City’s actuarial report, which include differences between expected and actual earnings; expected and Management’s
Discussion & Analysis
Government-Wide
Financial Statements
Fund
Financial Statements
Notes to the
Financial Statements
Basic
Financial Statements
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actual experiences; and changes in proportional allocations. The City’s pension liability in accordance with GASB 68 as of June 30, 2024, was $32.16 million as compared to $30.06 million in the prior year.  The City’s long-term debt decreased by $709,965 as a result of debt service payments made during the year.
 The City’s net capital assets increased by $13.94 million, primarily from a $11.84 million increase to construction in progress.

Fund Highlights
 At the close of Fiscal Year 23/24 the City’s Governmental Funds had a combined fund balance of $18.30 million, which is a decrease of $9.36 from prior year. Approximately 12%, or $2.12, million was classified as unassigned fund balance and was available for spending at the government’s discretion.  At the end of the current fiscal year, the General Fund’s unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) was $5.49 million, or 28% of total general fund expenditures, prior to transfers.
 The fund balance in the General Fund decreased by $3.59 million at the close of the fiscal year. This included an deficit of operating revenues over expenditures of $676,983, minus $3.93 million in net transfers and other financing sources and an adjustment to beginning fund balance of $344,346.

OVERVIEW OF THE FINANCIAL STATEMENTS
The discussion and analysis are intended to serve as an introduction to the City’s financial statements. The City’s basic financial statements are comprised of (1) Government-Wide Financial Statements (2) Fund Financial Statements, and (3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-Wide Financial Statements
The Government-Wide Financial Statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. Government-Wide financial statements are prepared on the accrual basis, which means they measure the flow of all economic resources of the City as a whole. Government-Wide Financial Statements consist of the Statement of Net Position and the Statement of Activities.

The Statement of Net Position presents financial information on all of the City’s assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or declining.

The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. This is consistent with a full accrual concept, which may result in the reporting of revenues and expenses in the current fiscal year, with cash flows occurring in future fiscal periods (e.g. uncollected revenues; and earned but not used vacation leave). 136
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City of Capitola Management’s Discussion and Analysis
Both of the Government-Wide Financial Statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities). An overview of the City’s functions associated with each classification is listed below.

Governmental Activities – All of the City's basic services are considered to be governmental activities. This includes general government, public works, recreation, community development, and public safety. These services are supported by general City revenues such as taxes, and by specific program revenues such as development and recreation program fees.

The Government-Wide Financial Statements can be found in the financial section of this report.

Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Fund financial statements provide detailed information about each of the City's most significant funds, called major funds. Major funds are presented individually, with all non-major funds summarized and presented only in a single column. Subordinate schedules present the detail of these non-major funds. Major funds present the major activities of the City for the fiscal year and may change from year to year as a result of changes in the pattern of the City's activities.

Governmental Funds
Governmental funds are used to account for essentially the same function reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental funds focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. This represents a modified accrual basis of accounting, with capital assets, long-lived assets, and long-term liabilities excluded from the financial statements. Such information may be useful in evaluating the City's near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for the governmental funds with similar information presented for governmental activitiesin the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities.

Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund and other major funds. Data from the other governmental funds are combined into a single aggregated presentation.

Individual fund data for each of these non-major governmental funds is provided in the form of combining statements in the combining and individual fund statements and schedules section of this report.

The City adopts an annual budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found in the financial section of this report. 137
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City of Capitola Management’s Discussion and Analysis

NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the Government-Wide and Fund Financial Statements. The notes can be found immediately following the Fund Financial Statements.

OTHER INFORMATION
In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information concerning the City’s funding progress for its employee pension obligations.

The required supplementary information can be found after the notes to the financial statements of this report.

The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the required supplementary information.

A statistical section provides historical and current data on financial trends, revenue and debt capacity, demographic and economic information, and operating information. This information can be found on immediately after the supplementary information section.

GOVERNMENT-WIDE FINANCIAL ANALYSIS
Over time, net position may serve as an indicator of a government’sfinancial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $44.30 million at the close of Fiscal Year 23/24. This was an increase of $3.85 million over the prior year.

The following table summarizes the City’s ending net position:

A significant portion, or $50.12 million, of the City's net position reflects its investment in capital assets, (e.g., land, buildings, general government infrastructure, equipment, etc.), less accumulated depreciation and any 2024 2023
Assets
Current and other assets $ 21,318,624 $ 29,163,340
Capital assets 50,878,594 36,940,232
Total Assets $ 72,197,218 $ 66,103,572
Deferred Outflows of Resources $ 13,186,912 $ 13,666,136 Liabilities
Current and other liabilities $ 3,651,511 $ 2,559,005
Noncurrent liabilities 34,869,952 33,247,574
Total Liabilities $ 38,521,463 $ 35,806,579
Deferred Inflows of Resources $ 2,564,026 $ 3,510,268
Net Position
Net investment in capital assets $ 50,115,979 $ 35,467,652 Restricted 12,131,607 11,222,924
Unrestricted (17,948,945) (6,237,715)
Total Net Position $ 44,298,641 $ 40,452,861
Governmental Activities
Table 1 - Net Position
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City of Capitola Management’s Discussion and Analysis
outstanding debt that was used to acquire or construct those assets. Capital assets represent infrastructure which provide services to citizens and are not available for future spending. Although the City‘s investment in capital assets is reported net of related debt, it should be noted that the resources to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate the liabilities.

The $12.13 million amount classified as Restricted Net Position represents resources that are subject to external restrictions on how they may be used. These funds are restricted for governmental activities.

The remaining deficit balance of $17.95million is classified as unrestricted. This negative unrestricted balance is largely due to GASB 68 – Accounting and Financial Reporting for Pensions. The City participates in the CalPERS Miscellaneous and Safety pension plans. This pronouncement requires that local governments report a proportional share of their pension plan’s net pension liabilities on financial statements. In Fiscal Year 23/24, the City’s proportionate share of the CalPERS pension liability was $32.16 million.

Governmental Activities
As shown in the Statement of Changes in Net Position schedule, the net position for Governmental Activities increased by $3.85 million in the prior year, mostly because of increases to capital grants and contributions pf $4.31 million. During the year, the City’s expenses in the statement of activities were increased by pension adjustments of $1.21 million related to changes in assumptions and deferrals of differences between estimated and actual plan earnings. This is in addition to increases in annual required contributions. An analysis of the changes in revenues and expenses by type of significant events follows:

Increase
Functions/Programs 2024 2023 (Decrease)
Program Revenues
Charges for services $ 3,355,793 $ 3,027,626 $ 328,167
Operating grants and contributions 858,915 865,684 (6,769) Capital grants and contributions 5,952,237 1,645,554 4,306,683 Total Program Revenues 10,166,945 5,538,864 4,628,081
General Revenues
Property taxes 3,200,895 3,058,146 142,749
Franchise taxes 729,485 708,277 21,208
Sales and use tax 8,221,640 8,542,419 (320,779)
Transient Occupancy tax 2,219,951 2,093,243 126,708
Business License tax 323,755 313,993 9,762
Cannabis taxes 261,764 307,089 (45,325)
Investment earnings 770,404 549,243 221,161
Other revenues 372,942 200,579 172,363
Total General Revenues 16,100,836 15,772,989 327,847
Expenses
General government 5,580,935 3,443,270 2,137,665
Public safety 8,450,102 5,703,129 2,746,973
Community development 1,371,360 635,090 736,270
Culture and recreation 2,983,749 2,181,074 802,675
Transportation 4,329,241 2,408,783 1,920,458
Interest on long-term debt 13,272 20,261 (6,989)
Total Expenses 22,728,659 14,391,607 8,337,052
Transfers - - -
Increase / (Decrease) in Net Position 3,539,122 6,920,246 (3,381,124) Prior Period Adjustments 306,658 - 306,658
Net Position, Beginning of Year 40,452,861 33,532,615 6,920,246 Net Position, End of Year $ 44,298,641 $ 40,452,861 $ 3,845,780 Governmental Activities
Table 2 - Statement of Changes in Net Position
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Governmental Activities
Governmental Revenues
The following chart summarizes the changes in revenues by category during Fiscal Year 23/24:

Significant changes in governmental revenues consisted of the following:
 Taxes decreased by $65,677, with substantial net changes in the following categories:
o Sales and use taxes decreased by $320,779 or 3.8%, reflecting a statewide trend of decreased consumer spending.
o Transient occupancy tax increased by $126,708 or 6.1%. o Property taxes increased by $142,749 or 4.7%, which reflects the continuing strength in property values.
o Franchise taxes increased by $21,208 or 3.0%, primarily due to rate increases across the industries.
o Business license taxes increased 9,762, or 3.1%
o Cannabis taxes decreased $45,325, or 14.8%
 Other revenues increased by $393,524, from local reimbursements and local donations that did not meet the definition of a charges for services, operating grants or capital grants as well as investment earnings.
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City of Capitola Management’s Discussion and Analysis
 Charges for services increased by $328,167 mostly from increased program activities for recreation, community development and public safety as services continue to increase to pre-pandemic levels.  Capital grants and contributions increased by $4.30 million due to contributions for the Wharf Resiliency and Public Access Improvement project.

Governmental Expenses
The Fiscal Year 23/24 expenses for Governmental Activities increased by $8.34 million as illustrated in the chart below:

Significant changes in governmental expenses consisted of the following:
 The largest contributed factor to the increase in governmental activities expenses is an adjustment to pension expense as required by GASB 68 of $1.21 million. The prior year adjustment was a reduction of $5.1 million which has resulted in a $6.3 million increase in governmental expenses.  General government expenses increase by $2.14 million primarily from the above mentioned GASB 68 pension adjustment as well as increased personnel costs and depreciation expense including a prior period adjustment.
 Public safety expenses increased by $2.75 million primarily from the above-mentioned GASB 68 pension adjustment as well as increased personnel costs and depreciation expense including a prior period adjustment.
 Community development expenses increased by $736,270 primarily from the above-mentioned GASB 68 pension adjustment as well as increased personnel costs and depreciation expense including a prior period adjustment.
 Culture and recreation expenses increased by $802,675 primarily from the above-mentioned GASB 68 pension adjustment as well as increased personnel costs and depreciation expense including a prior period adjustment.
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City of Capitola Management’s Discussion and Analysis
 Transportation expenses increased by $1.92 million primarily from the above-mentioned GASB 68 pension adjustment as well as increased personnel costs and depreciation expense including a prior period adjustment.

FINANCIAL ANALYSIS OF THE CITY’S GOVERNMENTAL FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements.

The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements.

In particular, the unassigned fund balance may serve as a useful measure of a government’s net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to use for a particular purpose by either an external party, the City itself, or a group or individual that has been delegated authority to assign resources for particular purposes by the City’s City Council.

A summary of the changes in fund balance of the Major Funds and Other Governmental Funds is presented below:

The fund balance in the General Fund decreased by $3.59 million. This included operating revenues short of operating expenses by $676,983. The operating difference, which was anticipated in the FY 2023-24 Adopted Budget, can be attributed to transfers to the Capital Improvement Fund for the Wharf Rehabilitation and Resiliency project.

Fund balance in the Federal Home Loan Reuse Fund increased by $83,285 mostly due to loan payoffs received.

Fund balance in the Capitola Housing Successor Fund decreased by $170,727 mostly due to loans for affordable housing projects.

Fund balance in the RTC Streets Fund increased by $346,253 mostly due to receiving grant funds for projects that were previously programmed to utilize these restricted funds.

Fund balance in the Capital Projects Fund decreased by $8.87 million mostly due to the construction of the Wharf Rehabilitation and Resiliency project.

Federal Capitola
Home Housing Capital Nonamajor
General Loan Reuse Successor RTC Streets Projects Governmental Fund Fund Fund Fund Fund Funds Total
Total Revenues $19,014,509 $ 86,985 $ 153,801 $ 379,314 $ 5,338,284 $ 1,294,889 $26,267,782 Total Expenditures (19,691,492) (3,700) (324,528) (33,061) (14,212,655) (1,664,761) (35,930,197) Revenues Over (Under) Expenditures (676,983) 83,285 (170,727) 346,253 (8,874,371) (369,872) (9,662,415) Other financing sources - - - - - - -
Transfers in 100,000 - - - 2,700,000 757,788 3,557,788
Transfers out (3,356,788) - - - - (201,000) (3,557,788) Net change in fund balances (3,933,771) 83,285 (170,727) 346,253 (6,174,371) 186,916 (9,662,415) Beginning of year 10,606,744 4,780,025 4,329,058 185,892 5,842,965 1,912,288 27,656,972 Prior Period Adjustment 344,346 154,340 20,076 - (441,653) 229,549 306,658 End of year $ 7,017,319 $ 5,017,650 $ 4,178,407 $ 532,145 $ (773,059) $ 2,328,753 $18,301,215 Major Funds
Table 3 - Summary of Changes in Fund Balance - Governmental Funds 142
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City of Capitola Management’s Discussion and Analysis
The fund balance in Nonmajor Funds increased by $186,916 mostly due an increase in Intergovernmental revenue received.

General Fund – Components of Fund Balance
In Fiscal Year 23/24, the General Fund’s total fund balance represented approximately 36% of total general fund expenditures. The following chart summarizes the ending fund balance in the General Fund over the last two fiscal years:

Other Governmental Fund - Components of Fund Balance
The following chart summarizes the ending fund balance of all other funds other than the General Fund over the last two fiscal years:
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CAPITAL ASSETS
The City’s investment in capital assets as of June 30, 2024 was $50.88 million (net of accumulated depreciation). The total increase in the City’s capital assets, net of depreciation, was $13.94 million or 38%.

The following table summarizes the City’s capital assets at the end of the year:

Additional information on capital assets can be found in Note 5 in the notes to financial statements.

DEBT ADMINISTRATION
During the year, long-term debt from governmental activities decreased by $709,965 because of debt service payments.

The following table summarizes the City’s debt at the end of the year:

Additional information on debt can be found in Note 6 in the notes to financial statements. 2024 2023 % Change
Land $ 4,883,789 $ 4,883,789 0.00%
Construction in progress 15,393,620 3,549,718 333.66%
Buildings and improvement 17,748,240 18,017,712 -1.50%
Infrastructure 37,721,731 35,907,669 5.05%
Machinery and equipment 5,334,562 4,520,133 18.02%
Accumulated deprec./amort. (30,203,348) (29,938,789) 100.00% Total Capital Assets, Net $ 50,878,594 $ 36,940,232 37.73% Table 4 - Capital Assets at Year End - Net
Governmental Activities
2024 2023 % Change
Cove Financing $ - $ 642,663 -100.00%
Beach and Village Lot II Financing 762,615 829,917 -8.11% Total outstanding long-term debt $ 762,615 $ 1,472,580 -48.21% Table 5 - Outstanding Long-Term Debt at Year End
Governmental Activities
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City of Capitola Management’s Discussion and Analysis

GENERAL FUND BUDGETARY HIGHLIGHTS
Changes from the City's General Fund original budget to the final budget are detailed in the Required Supplementary Information section along with a comparison to actual activity for the year ended.

Over the course of the year, the City may revise the expenditure budgets to reflect the changes in the various programs and unanticipated activities, but usually do not change budget assumptions in revenues other than for one-time events. For example, when the City is awarded a grant, it appropriates the revenues and expenditures necessary to spend those funds but does not necessarily adjust upward the property tax estimates when the amounts come in higher than expected or reduce other balances that report declines unless the changes are material. Tax estimates are based on trend information where the base amount rolls forward for cumulative increases in long term planning and the trends are reevaluated each year during the budget period.

At the time of the FY 23/24 budget adoption, City revenues were projected to be $18.94 million and expenditures were projected to be $18.31 million. The final budgeted revenues were $18.84 million and expenditures were $18.40 million. Actual revenues exceed the final budget by $176,254 and actual expenditures exceeded the final budget by $1.30 million.

After transfers, the original adopted budget projected a deficit change in fund balance of $727,449 and the final budget projected a deficit of $914,433. The actual change in fund balance for the year was a deficit $3.93 million, which was $3.02 million more than the final budgeted deficit and mostly attributable to transfers out to the Capital Projects fund of $2.70 million. The following table summarizes the City’s budget vs. actual amounts for FY 23/24:

Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Taxes $ 14,943,970 $ 14,643,970 $ 14,495,882 $ (148,088) Licenses and permits 645,500 645,500 757,312 111,812
Fines and forfeitures 607,500 607,500 425,043 (182,457) Intergovernmental 108,000 274,752 223,792 (50,960)
Charges for Services 2,212,637 2,212,637 2,298,937 86,300 Use of money and property 209,495 209,495 478,610 269,115 Other revenue 214,401 244,401 334,933 90,532
Total Revenues 18,941,503 18,838,255 19,014,509 176,254

EXPENDITURES
Current:

General government 3,668,814 3,735,085 3,604,714 130,371 Public safety 7,201,461 7,371,463 7,740,343 (368,880)
Community development 1,006,504 1,006,504 947,297 59,207 Culture and recreation 2,408,921 2,366,515 2,677,956 (311,441) Transportation 3,377,464 3,435,590 3,682,149 (246,559)
Capital outlay 649,000 480,743 1,039,033 (558,290)
Total Expenditures 18,312,164 18,395,900 19,691,492 (1,295,592) Excess (Deficiency) of Revenues over Expenditures 629,339 442,355 (676,983) (1,119,338)

OTHER FINANCING SOURCES (USES)
Transfers in 100,000 100,000 100,000 -
Transfers out (1,456,788) (1,456,788) (3,356,788) (1,900,000) Total Other Financing Sources (Uses) (1,356,788) (1,356,788) (3,256,788) (1,900,000) Net Change in Fund Balance (727,449) (914,433) (3,933,771) (3,019,338) 145
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City of Capitola Management’s Discussion and Analysis
ECONOMIC FACTORS, NEXT YEAR’S BUDGET, AND RATES
FY 2024-25 Budget Overview
On June 27, 2024, the Council approved the FY 2024-25 Budget, with a total appropriation of $37.4 million, including $19.2 million allocated to the General Fund. The budget reflects a conservative growth approach, projecting adequate resources to cover expenditures.

Key General Fund revenue growth estimates include:
 Sales Tax: 2.3% increase.
 Transient Occupancy Tax (TOT): 1.0% increase.
 Property Tax: 6.0% increase.

General Fund revenues are expected to exceed expenditures by approximately $30,000, with a projected year-end fund balance of $529,000.

Employee Agreements and Pension Costs
The City has negotiated agreements with all bargaining units through FY 2026-27, which include fixed Cost of Living Adjustments (COLAs) and Market Study Salary Adjustments for certain classifications. Pension cost caps, initially implemented before FY 2015-16 to prevent significant pay reductions due to increased contribution rates, remain in place under these agreements.

FUTURE PROSPECTS
Measures O, F, and Y
 Measure O: Approved in 2012, this permanent quarter-percent sales tax replenished reserves, maintained police staffing, and funded major street improvements.  Measure F: Extended in 2016 for 10 years, this temporary sales tax funded projects such as protecting the wharf and beach, police services, and infrastructure improvements.  Measure Y: Passed in November 2024 to replace Measure F, it increased the sales tax to half a percent for 10 years to continue these initiatives.

Development Opportunities
The City is prioritizing several major projects:
 Jade Street Community Center Renovation:
o Estimated Cost: $6.16 million.
o Funding Sources: $1.8 million in General Funds, $4.36 million in grants. o Timeline: Construction to begin in early 2025, with completion expected in 2026.  Treasure Cove Playground, Cliff Drive Resiliency, and Stockton Bridge:
o Projects are in various stages of design and funding but remain unfunded as of June 30, 2024.
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City of Capitola Management’s Discussion and Analysis

ECONOMIC OUTLOOK
Local, State, and National Trends
The 2008 financial crisis significantly impacted local, state, and national economies, but by FY 2011-12, Capitola began to recover with increases in sales tax, TOT, and demand for planning services. These trends continued until FY 2017-18 when TOT and sales tax leveled off.

In 2018, voters increased the TOT rate from 10% to 12%, dedicating a portion to local businesses and Early Childhood and Youth programs.

Storm Recovery Efforts
Intense storms in January 2023 temporarily damaged the Wharf and several Capitola Village businesses.

Despite the setbacks, businesses recovered quickly. The Wharf Rehabilitation project, fully funded with an additional $1 million in insurance proceeds, began in September 2023 and was completed in August 2024.

PENSION OBLIGATIONS
In FY 2022, CalPERS experienced a 6.1% investment loss, leading to increased Unfunded Actuarial Liability (UAL) contributions:
 FY 2024-25 UAL Payment: $2.6 million (19.3% increase).  Projected UAL Payments:
o FY 2025-26: $2.8 million.
o FY 2029-30: $3.5 million.

The City continues to prioritize long-term financial stability and investments in community infrastructure.

REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the City's finances and to demonstrate the City's accountability for its fiscal activities to citizens, taxpayers, investors, creditors, and any other interested parties. If you have questions about this report or need additional information please contact the Finance Director at 420 Capitola Avenue, Capitola, California 95010. 147
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BASIC FINANCIAL STATEMENTS
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City of Capitola
Statement of Net Position
June 30, 2024
Governmental
ASSETS Activities
Current Assets:

Cash and investments 10,591,482 $
Restricted cash and investments 1,531,142
Accounts receivable 39,693
Taxes receivable 2,047,916
Interest receivable 144,719
Due from other governments 158,944
Total Current Assets 14,513,896
Noncurrent Assets:

Loans receivable 6,804,728
Capital Assets:

Nondepreciable 20,277,409
Depreciable, net of accumulated depreciation 30,601,185 Total Capital Assets, Net 50,878,594
Total Noncurrent Assets 57,683,322
Total Assets $ 72,197,218

DEFERRED OUTFLOWS OF RESOURCES
Pension Adjustments 12,168,314 $
OPEB Adjustments 1,018,598
Total Deferred Outflows of Resources $ 13,186,912

LIABILITIES
Current Liabilities:

Accounts payable 2,085,742 $
Accrued liabilities 231,390
Interest payable 7,181
Unearned revenue 291,534
Deposits payable 408,743
Compensated absences, due within one year 558,098
Long-term debt, due within one year 68,823
Total Current Liabilities 3,651,511
Noncurrent Liabilities:

Compensated absences, due in more than one year 468,652 Net pension liability 32,157,510
Net OPEB liability 1,549,998
Long-term debt - due in more than one year 693,792
Total Noncurrent Liabilities 34,869,952
Total Liabilities $ 38,521,463

DEFERRED INFLOWS OF RESOURCES
Pension Adjustments 1,880,944 $
OPEB Adjustments 683,082
Total Deferred Inflows of Resources $ 2,564,026

NET POSITION
Net investment in capital assets 50,115,979 $
Restricted for:

Public safety 174,778
Transportation 1,327,582
Community development 10,288,422
Culture and recreation 340,825
Total Restricted 12,131,607
Unrestricted (17,948,945)
Total Net Position $ 44,298,641
The accompanying notes are an integral part of these financial statements. 150 Item 7 D.

City of Capitola
Statement of Activities
For the Year Ended June 30, 2024
Operating Capital
Charges for Grants and Grants and Governmental
Functions/Programs Expenses Services Contributions Contributions Total Activities Primary Government:

Governmental Activities:

General government $ 5,580,935 $ 982,884 $ 372,379 -$ 1,355,263 $ $ (4,225,672) Public safety 8,450,102 497,126 184,194 - 681,320 (7,768,782) Community development 1,371,360 972,472 266,717 - 1,239,189 (132,171) Culture and recreation 2,983,749 862,418 - 5,112,589 5,975,007 2,991,258 Transportation 4,329,241 40,893 35,625 839,648 916,166 (3,413,075) Interest and fiscal charges 13,272 - - - - (13,272)
Total Governmental Activities $ 22,728,659 $ 3,355,793 $ 858,915 $ 5,952,237 $ 10,166,945 (12,561,714) General Revenues:

Taxes:

Property taxes 3,200,895
Franchise taxes 729,485
Sales and use tax 8,221,640
Transient Occupancy tax 2,219,951
Business License tax 323,755
Cannabis taxes 261,764
Total taxes 14,957,490
Motor vehicle in-lieu 12,171
Investment income 770,404
Other revenues 360,771
Total General Revenues 16,100,836
Change in Net Position 3,539,122
Net Position - Beginning of Year 40,452,861
Prior Period Adjustments 306,658
Net Position - Beginning of Year, As Adjusted 40,759,519 Net Position - End of Year $ 44,298,641
Program Revenues
151
Item 7 D.

GOVERNMENTAL FUND FINANCIAL STATEMENTS
General Fund
Accounts for all financial resources except those to be accounted for in another fund. It is the general operating fund for the City.

Federal Home Loan Reuse Fund
The Federal Home Loan Reuse 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..

Capitola Housing Successor Fund
This fund is used to account for the assets of the former RDA Low and Moderate-Income Fund, and related housing activities. The funds are restricted in their use, reuse, and repayment pursuant to the original program requirements. It is anticipated that as loan payments are received, the revenue generated will fund new housing activities.

Regional Transportation Commission (RTC) Streets Fund
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.

Capital Projects Fund
Accounts for financial resources segregated for the acquisition of major capital facilities and equipment by the City.

Non-Major Governmental Funds
These funds constitute all other governmental funds that do not meet the major fund criteria per governmental accounting standards. These funds consist of other Special Revenue Funds and Debt Service Funds.
152
Item 7 D.

City of Capitola
Balance Sheet
Governmental Funds
June 30, 2024

Federal Capitola
Home Housing Capital Nonmajor Total
General Loan Reuse Successor RTC Streets Projects Governmental Governmental Fund Fund Fund Fund Fund Funds Funds
ASSETS
Cash and investments $ 881,691 4,696,736 $ 1,892,662 $ 499,928 $ 594,662 $ 2,025,803 $ 10,591,482 $ Restricted cash and investments 1,531,142 - - - - 1,531,142 - Accounts receivable 36,059 - - - - 3,634 39,693
Taxes receivable 2,021,123 - - 26,793 - 2,047,916 -
Interest receivable 68,098 9,980 21,988 5,424 - 39,229 144,719 Due from other governments 120,015 11,782 - - - 27,147 158,944 Due from other funds 79,229 - - - - - 79,229
Loans receivable 4,125,979 2,271,492 - - 407,257 - 6,804,728 Total assets $ 8,552,402 $ 5,017,650 $ 4,197,924 $ 532,145 $ 594,662 $ 2,503,070 $ 21,397,853

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable $ 610,694 -$ 19,517 $ $ 1,360,521 - $ $ 95,010 $ 2,085,742 Accrued liabilities 231,390 - - - - 231,390 -
Unearned revenue 291,534 - - - - 291,534 -
Deposits payable 401,465 - - - 7,200 408,743 78
Due to other funds - - - - - 79,229 79,229
Total liabilities 1,535,083 19,517 - 1,367,721 - 174,317 3,096,638 Fund Balances:

Restricted:

Public safety - - - - 174,778 - 174,778
Transportation - - 532,145 - 795,437 - 1,327,582
Community development 5,017,650 - 4,178,407 - 1,092,365 - 10,288,422 Culture and recreation - - - - 340,825 - 340,825
Retiree benefits 1,531,142 - - - - 1,531,142 -
Assigned:

Debt service - - - - - 75,289 75,289
Facilities 282,714 282,714
General plan 266,685 266,685
Green building education 263,405 263,405
Emergency reserve 1,631,506 - - - - 1,631,506 -
Unassigned:

Contingencies 2,364,346 - - - - 2,364,346 -
Remaining unassigned 677,521 - - (773,059) - (149,941) (245,479) Total fund balances 7,017,319 5,017,650 4,178,407 532,145 (773,059) 2,328,753 18,301,215 Total liabilities and fund balances $ 8,552,402 $ 5,017,650 $ 4,197,924 $ 532,145 $ 594,662 $ 2,503,070 $ 21,397,853 The accompanying notes are an integral part of these financial statements.

Major Funds
153
Item 7 D.

City of Capitola
Reconciliation of the Government Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2024
Total Fund Balances - Total Governmental Funds $ 18,301,215 Amounts reported for governmental activities in the statement of net position were different because:

Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. The capital assets were adjusted as follows:

Capital assets 81,081,942
Less: accumulated depreciation (30,203,348)
Total Capital Assets 50,878,594
Interest payable on long-term debt did not require current financial resources. Therefore, interest payable was not reported as a liability in Governmental Funds Balance Sheet. (7,181) The differences from benefit plan assumptions and estimates versus actuals are not included in the plan's actuarial study until the next fiscal year and are reported as deferred inflows or deferred outflows of resources in the statement of net position. 10,622,886 Long-term obligations were not due and payable in the current period. Therefore, they were not reported in the Governmental Funds Balance Sheet. The long-term liabilities were adjusted as follows:

Long-term debt (762,615)
Compensated absences (1,026,750)
Net pension liability (32,157,510)
Net OPEB liability (1,549,998)
Total Long-Term Obligations (35,496,873)
Net Position of Governmental Activities $ 44,298,641
The accompanying notes are an integral part of these financial statements. 154
Item 7 D.

City of Capitola
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2024

Federal Capitola
Home Housing Capital Nonmajor Total
General Loan Reuse Successor RTC Streets Projects Governmental Governmental Fund Fund Fund Fund Fund Funds Funds

REVENUES
Taxes 14,495,882 $ - $ -$ -$ $ 137,853 - $ $ 14,633,735 Licenses and permits 757,312 - - - - 10,453 767,765
Fines and forfeitures 425,043 - - - - 425,043 -
Intergovernmental 223,792 - 359,670 - 5,112,589 885,145 6,581,196 Charges for Services 2,298,937 - - - 150,768 - 2,449,705 Use of money and property 478,610 86,985 153,801 19,644 - 68,399 807,439 Other revenue 334,933 - - 225,695 - 42,271 602,899
Total Revenues 19,014,509 86,985 153,801 379,314 5,338,284 1,294,889 26,267,782

EXPENDITURES
Current:

General government 3,604,714 3,700 - - 22,058 816,111 4,446,583 Public safety 7,740,343 - - - - 7,740,343 -
Community development 947,297 324,528 - - - 1,271,825 - Culture and recreation 2,677,956 - - - - 46,778 2,724,734 Transportation 3,682,149 - - - - 3,682,149 -
Capital outlay 1,039,033 - - 14,190,597 33,061 15,326,835 64,144 Debt service
Principal - - - - 709,965 - 709,965
Interest and fiscal charges - - - - - 27,763 27,763
Total Expenditures 19,691,492 3,700 324,528 14,212,655 33,061 1,664,761 35,930,197 Excess (Deficiency) of
Revenues over Expenditures (676,983) 83,285 (170,727) 346,253 (8,874,371) (369,872) (9,662,415)

OTHER FINANCING SOURCES (USES)
Transfers in 100,000 - - 2,700,000 - 757,788 3,557,788
Transfers out (3,356,788) - - - (201,000) - (3,557,788) Total Other Financing Sources (Uses) - (3,256,788) - 2,700,000 - 556,788 - Net Change in Fund Balances (3,933,771) 83,285 (170,727) 346,253 (6,174,371) 186,916 (9,662,415) Fund Balances Beginning 10,606,744 4,780,025 4,329,058 185,892 5,842,965 1,912,288 27,656,972 Prior Period Adjustments 344,346 154,340 20,076 (441,653) - 229,549 306,658 Fund Balances Beginning, as Adjusted 10,951,090 4,934,365 4,349,134 185,892 5,401,312 2,141,837 27,963,630 Fund Balances Ending $ 7,017,319 $ 5,017,650 $ 4,178,407 $ 532,145 $ (773,059) $ 2,328,753 $ 18,301,215 The accompanying notes are an integral part of these financial statements.

Major Funds
155
Item 7 D.

City of Capitola
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities
For the Year Ended June 30, 2024
Net Change in Fund Balances - Total Governmental Funds $ (9,662,415) Amounts reported for governmental activities in the Statement of Activities and Changes in net position were different because:

Governmental Funds report capital outlay as expenditures. However, in the Government-Wide Statement of Activities and Changes in net position, the cost of those assets was allocated over their estimated useful lives as depreciation expense.

Capital additions 15,313,899
Depreciation expense (1,375,536)
Compensated absences not required to be paid with current financial resources are not reported in the governmental funds, but are accrued as noncurrent liabilities in the Government Wide Statement Net Position. The change from prior year accrued compensated absences is reported in the applicable program expense. (111,206)
In governmental funds, actual contributions to benefit plans are reported as expenditures in the year incurred. However, in the government-wide statement of activities, only the current year benefit expense as noted in the plans' valuation reports is reported as an expense, as adjusted for deferred inflows and outflows of resources. (1,350,075)
Repayment of long-term debt was an expenditure in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position. 709,965 Interest expense on long-term debt was reported in the Government-Wide Statement of Activities and Changes in net position, but it did not require the use of current financial resources. Therefore, interest expense was not reported as expenditures in governmental funds. The following amount represented the net change in accrued interest from from prior year. 14,490
Change in Net Position of Governmental Activities $ 3,539,122 The accompanying notes are an integral part of these financial statements. 156
Item 7 D.

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157
Item 7 D.

NOTES TO THE BASIC

FINANCIAL STATEMENTS
158
Item 7 D.

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159
Item 7 D.

City of Capitola
Index to the Notes to Basic Financial Statements
June 30, 2024
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ......................................................... 49 NOTE 2 - CASH AND INVESTMENTS ...................................................................................................... 60 NOTE 3 - LOANS RECEIVABLES ............................................................................................................. 63 NOTE 4 - INTERFUND TRANSACTIONS .................................................................................................. 63 NOTE 5 - CAPITAL ASSETS ..................................................................................................................... 64 NOTE 6 - NONCURRENT LIABILITIES .................................................................................................... 64 NOTE 7 - DEFICIT FUND BALANCES ...................................................................................................... 65 NOTE 8 - DEFINED BENEFIT PENSION PLANS (CALPERS) ................................................................... 66 NOTE 9 - OTHER POSTEMPLOYMENT BENEFITS PLAN (OPEB) ........................................................... 71 NOTE 10 - RISK MANAGEMENT…………………………… ....................................................................... 75 NOTE 11 - JOINT VENTURES ................................................................................................................... 76 NOTE 12 - COMMITMENTS AND CONTINGENCIES ............................................................................... 77 NOTE 13 - PRIOR PERIOD ADJUSTMETNS – ACCOUNTING CHANGES AND CORRECTIONS ............. 77 160
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Financial Reporting Entity
The City of Capitola (the City) was incorporated in 1949 under the laws of the State of California.

Capitola is a General Law City and is subject to the framework and procedures established by State law.

The City operates under the Council-City Manager form of government. The City provides police protection, street, park and facilities maintenance, recreation, building, planning, zoning, administrative, and financial services for Capitola. Independent special districts provide fire protection, water, sewer, and limited drainage services.

B. Basis of Presentation
The basic financial statements of the City have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Boards (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below.

The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues, and expenditures or expenses, as appropriate. These funds are established for the purpose of carrying out specific activities or certain objectives in accordance with specific regulations, restrictions, or limitations. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Government-Wide Financial Statements
The City's government-wide financial statements include a Statement of Net Position and a Statement of Activities and Changes in Net Position. These statements present summaries of governmental activities for the City. Governmental activities are generally supported by taxes and intergovernmental revenues.

These statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets, deferred outflows of resources, liabilities, deferred inflows of resources, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those clearly identifiable with a specific function or segment. Certain types of transactions are reported as program revenues for the City in three categories:
 Charges for services
 Operating grants and contributions
 Capital grants and contributions
Separate financial statements are provided for governmental funds. Major individual governmental funds 161
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
are reported as separate columns in the fund financial statements.

Certain eliminations have been made as prescribed by GASB Statement No. 34 in-regards-to interfund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated. In the Statement of Activities, internal fund transactions have been eliminated. The following interfund activities have been eliminated:
 Transfers in/Transfers out
 Interfund receivable and payables
 Indirect costs between funds
The City applies all applicable GASB pronouncements including all interpretations currently in effect.

Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The City has presented all major funds that met the applicable criteria.

All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets, deferred outflows of resources, current liabilities, and deferred inflows of resources are included on the balance sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.

Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

Accordingly, revenues are recorded when received in cash, except that revenues subject to accrual (up to 60 days after year-end) are recognized when due. The City’s only exception to this timeline is Sales Tax receipts which are recorded as revenues if received within 90 days. Property taxes, sales taxes, transient occupancy taxes, franchise taxes, and interest associated with the current fiscal period are all considered to be susceptible to accrual and are therefore recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. Expenditures are recorded in the accounting period in which the related fund liability is incurred. However, debt service expenditures, as well as expenditures related to compensated absences, pension and other postemployment benefits and claims and judgments, are recorded only when payment is due.

Unearned revenues arise when potential revenues do not meet both the "measurable" and "available" criteria for recognition in the current period. In subsequent periods when both revenue recognition criteria are met or when the government has a legal claim to the resources, the unearned revenue is removed from the combined balance sheet and revenue is recognized.
162
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
The City reports the following funds as major funds:

General Fund
The General Fund accounts for all financial resources except those to be accounted for in another fund. It is the general operating fund for the City.

Federal Home Loan Reuse Special Revenue Fund
The Federal Home Loan Reuse 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.

Capitola Housing Successor Special Revenue Fund
This fund is used to account for the assets of the former RDA Low and Moderate-Income Fund, and related housing activities. The funds are restricted in their use, reuse, and repayment pursuant to the original program requirements. It is anticipated that as loan payments are received, the revenue generated will fund new housing activities.

Regional Transportation Commission (RTC) Streets Special Revenue Fund 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.

Capital Projects Fund
Accounts for financial resources segregated for the acquisition of major capital facilities and equipment by the City.

Additionally, the City reports the following nonmajor fund types of governmental funds:

Special Revenue Funds
Special revenue funds account for and report the proceeds of specific revenue sources that are restricted, committed or assigned to specific purposes other than debt service or capital projects.

Debt Service Funds
Debt service funds are used to accumulate resources for repayment of debt and financing arrangements.

Capital Project Funds
Capital project funds account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets in governmental funds. There were not nonmajor capital projects funds reported for this fiscal year.

C. Cash and Investments
The City pools cash resources from all funds in order to facilitate the management of cash. The balance in the pooled cash account is available to meet current operating requirements. Cash in excess of current requirements is invested in various interest-bearing accounts and other investments for varying terms.

The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and displayed as Cash and Investments. The City also 163
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
considers all non-pooled cash and investments (consisting of cash with fiscal agent and restricted cash and investments held by fiscal agent) as cash and cash equivalents because investments meet the criteria for cash equivalents defined above.

Deposit and Investment Risk Disclosures - In accordance with GASB Statement No. 40, Deposit and Investment Disclosures (Amendment of GASB Statement No. 3), certain disclosure requirements, if applicable, for Deposits and Investment Risks in the following areas: Interest Rate Risk, Overall Credit Risk, Custodial Credit Risk, Concentrations of Credit Risk, and Foreign Currency Risk.

Other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end and other disclosures. The City participates in an investment pool managed by the State of California titled Local Agency Investment Fund (LAIF), which has invested a portion of the pool funds in Structured Notes and Asset Backed Securities. LAIF's investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as to change in interest rates.

Investments are recorded at fair value in accordance with GASB Statement No. 72, Fair Value Measurement and Application. Accordingly, the change in fair value of investments is recognized as an increase or decrease to investment assets and investment income. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction. In determining this amount, three valuation techniques are available:
 Market approach - This approach uses prices generated for identical or similar assets or liabilities.

The most common example is an investment in a public security traded in an active exchange such as the NYSE.
 Cost approach - This technique determines the amount required to replace the current asset. This approach may be ideal for valuing donations of capital assets or historical treasures.  Income approach - This approach converts future amounts (such as cash flows) into a current discounted amount.

Each of these valuation techniques requires inputs to calculate a fair value. Observable inputs have been maximized in fair value measures, and unobservable inputs have been minimized.

D. Restricted Cash and Investments
Certain restricted cash and investments are held by PARS, a fiscal agent, for pension obligations with CalPERS.

E. Receivables
Billed, but unpaid, services provided to individuals or non-governmental entities are recorded as accounts receivable. Revenues earned but not collected by year-end are accrued. No allowance for uncollectible accounts receivable has been provided as management has determined that uncollectible accounts have been immaterial historically and the direct write-off method does not result in a material difference from the allowance method.
164
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
F. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. In governmental funds, prepaid items are accounted for using the consumption method and a portion of fund balance equal to the prepaid items has been offset by nonspendable fund balance to indicate that is not available for appropriation.

G. Interfund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable government funds to indicate that they are not available for appropriation and are not expendable available financial resources. There were no advances between funds reported as of June 30, 2024.

H. Loans Receivable
The City uses Federal Home Loan Reuse, Affordable Housing and CDBG Program Income funds to provide housing loans to eligible applicants. Such loans are made to low and moderate-income households to improve or rehabilitate residences. Repayments of the outstanding loans are classified as a revenue source in the applicable funds.

I. Capital Assets
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at acquisition value as of the date received. City policy is to capitalize all tangible property with a useful life of five or more years and a cost or assigned valued exceeding $5,000, with the exception of infrastructure valued at $50,000 or more. The City recorded all its public domain (infrastructure) capital assets placed in service after June 30, 1980, which include roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and lighting systems, in accordance with generally accepted accounting principles.

The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each fiscal year represents that fiscal year’s pro rata share of the cost of capital assets. Generally accepted accounting principles requires that all capital assets with limited useful lives be depreciated over the estimated useful lives. Depreciation is provided using the straight-line method which means the cost of the assets is divided by its expected useful life in years and the result is charged to expense each fiscal year until the assets are fully depreciated. The City has assigned the useful lives listed below to capital assets subscription term or the useful life of the underlying asset. Depreciation is recorded on a straight-line basis over the useful lives of the assets as follows:

Structures and improvements 50 Years
Equipment 5-20 Years
Infrastructure 15-50 Years
165
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
J. Deferred Outflows/Deferred Inflows of Resources
In addition to assets, the statement of financial position or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

In addition to liabilities, the statement of financial position or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

K. Interest Payable
In the government-wide financial statements, interest payable of long-term debt is recognized as an incurred liability. The City has not allocated the interest on long-term debt to departments. In the fund financial statements, governmental fund types do not recognize the interest payable when the liability is incurred. Interest for long-term debt is recorded in the fund statements when the payment is made.

L. Compensated Absences
Based on prior MOU language, a sick leave liability is also accrued for one remaining employee. For governmental fund types, the current liability appears in the respective funds, if due and payable, and the long-term liability appears in the government-wide financial statements as compensated absences. This liability is set up for the current employees at the current rates of pay. If vacation and the sick leave balances are not used by employees during the term of employment, compensation is payable to the employee at the time of retirement. Such compensation is calculated at the employee’s prevailing rate at the time of retirement or termination. Each fiscal year, an adjustment to the liability is made based on pay rate changes and adjustments for the current portion. The General Fund is primarily responsible for the repayment of the governmental portion of compensated absences.

M. Long-Term Liabilities
In the government-wide financial statements long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities. When applicable, bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method, bonds payable are reported net of the applicable bond premium or discount, and debt issuance costs are expensed in year incurred. In the fund financial statements, governmental fund types recognize debt issuances, premiums, discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financial sources. Premiums received on debt issuance are reported as other financing sources while discounts on debt issuance reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

N. Benefit Plans
Pension Expense
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans (the Plans) and additions to/deductions from the 166
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS.

For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Other Postemployment Benefit (OPEB) Expense
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense information about the fiduciary net position of the City’s Retiree Benefits Plan (the OPEB Plan) and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis as they are reported by the OPEB Plan. For this purpose, the OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms.

O. Fund Balances
In accordance with Government Accounting Standards Board 54, Fund Balance Reporting and Governmental Fund Type Definitions, the City classifies governmental fund balances as follows:

Nonspendable
Nonspendable fund balance represents balances set aside to indicate items that do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, leases receivable in excess of deferred inflows of resources and land held for redevelopment are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed, or assigned, then Nonspendable amounts are required to be presented as a component of the applicable category.

Restricted
Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for specific purpose.

Encumbrances and nonspendable amounts subject to restrictions are included along with spendable resources.

Committed
The City Council, as the City’s highest level of decision-making authority, may commit fund balance for specific purposes pursuant to the constraints imposed by formal actions taken, such as an ordinance or resolution. These committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use through the same type of formal action taken to establish the commitment. City Council action to commit fund balance needs to occur within the fiscal reporting period; however the specific amounts can be determined subsequently. Encumbrances and nonspendable amounts subject to Council commitments are included along with spendable resources.

Assigned
Assigned fund balances are amounts constrained by the City’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Council or its designee, the Finance Director or City Manager, and may be changed at the discretion of the City Council or its designee. This category includes encumbrances; nonspendable amounts, when it is the City’s intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, Capital Projects, and Debt Service Funds, which have not been restricted or committed. 167
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
Unassigned
Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual general fund balance and residual fund deficits, if any, of other governmental funds.

Flow Assumption / Spending Order Policy
When expenditures are incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted funds to be spent first. When expenditures are incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to be spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the City Council has directed otherwise.

P. Net Position
In the government-wide financial statements, net position is classified in the following categories:

Net Investment in Capital Assets
This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that are attributed to the acquisition, construction, or improvement of the assets. In addition, deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt also are included in the net investment in capital assets component of net position.

Restricted Net Position
This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments. These include developer fees received for use on capital projects, debt service requirements, and community development projects.

Unrestricted Net Position
This amount is all net position that does not meet the definition of "net investment in capital assets" or "restricted net position." The detail of amounts reported for each of the above defined net position categories is reported in the government-wide Statement of Net Position.

Use of Restricted/Unrestricted Net Position
When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the City's policy is to apply restricted net position first.

Q. Interfund Transactions
Interfund services provided and used are accounted for as revenue, expenditures or expenses, as appropriate. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursed fund. All other interfund transactions, except for interfund services provided and used and reimbursements, are reported as transfers. All other interfund transfers are reported as transfers.

R. Property Taxes and Special Assessments
California Constitution Article XIII A limits the combined property tax rate to one percent of a property’s assessed valuation. Additional taxes may be imposed with voter approval. Assessed value is 168
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City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
calculated at one hundred percent of a property’s fair value, as defined by Article XIII A, and may be increased no more than two percent per year unless a change in ownership occurs. The state legislature has determined the method of distributing the one percent tax levy among the various taxing jurisdictions.

County of Santa Cruz (the County) levies, bills and collects property taxes and special assessments for the City; under the County's "Teeter Plan" the County remits the entire amount levied and handles all delinquencies, retaining interest and penalties. Secured and unsecured property taxes are levied on January 1. Secured property tax is due in two installments, on November 1 and February 1, becomes a lien on those dates and becomes delinquent on December 10 and April 10, respectively. Unsecured property tax is due on August 1 and becomes delinquent on August 31. The term "unsecured" refers to taxes on personal property other than real estate, land and buildings. These taxes are secured by liens on the property being taxed.

The City adopted an alternative method of property tax distribution (the “Teeter Plan”). Under this method, the City receives 100% of its secured property tax levied in exchange for foregoing any interest and penalties collected on delinquent taxes. The City receives payments as a series of advances made by the County throughout the fiscal year. The secured property tax levy is recognized as revenue upon receipt including the final payment, which generally is received within 60 days after the fiscal year.

S. Budgetary Information
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for governmental funds. The City’s budget ordinance requires that in April of each fiscal year, the City Manager must submit a preliminary budget that includes projected expenditures and the means of financing them, to the City Council for the fiscal year commencing the following July 1.

As modified during public study sessions, the preliminary budget becomes the proposed budget.

Following public hearings on the proposed budget, the final annual budget is adopted by the City Council in June of the following fiscal year. After adoption of the final budget, transfers of appropriations within a general fund department, or within each fund can be made by the City Manager. Budget modifications between funds, increases, or decreases to a fund’s overall budget, transfers between general fund departments or transfers that affect capital projects must be approved by the City Council or Agency Board. Numerous properly authorized amendments are made during the fiscal year. Appropriations lapse at fiscal year-end.

Budgetary control is enhanced by integrating the budget into the general ledger. Encumbrance accounting is employed (e.g., purchase orders) to avoid over-expenditure. Encumbrances outstanding at fiscal yearend are automatically budgeted in the following fiscal year, unless specifically cancelled by Council action. Per Capitola Municipal Code 3.20.060.C: “The appropriation for the uncompleted balance of executory contracts should not lapse at year-end but is automatically appropriated for the succeeding fiscal year unless specifically cancelled by council action.” 169
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City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
The following summarizes the City’s actual expenditures over the final budget by department during the year:

Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)

EXPENDITURES
Current:

General government $ 3,668,814 $ 3,735,085 $ 3,604,714 $ 130,371 Public safety 7,201,461 7,371,463 7,740,343 (368,880)
Community development 1,006,504 1,006,504 947,297 59,207 Culture and recreation 2,408,921 2,366,515 2,677,956 (311,441) Transportation 3,377,464 3,435,590 3,682,149 (246,559)
Capital outlay 649,000 480,743 1,039,033 (558,290)
Total Expenditures $ 18,312,164 $ 18,395,900 $ 19,691,492 $ (1,295,592) During the year, public safety expenditures were over budget to personnel costs associated with two major criminal investigation cases and storm response, cultural and recreation expenditures were over budget primarily due to seasonal program personnel costs which was offset by additional revenues, transportation and capital outlay expenditures was due to the timing of projects and related encumbrances.

Overages by department were funded by beginning fund balance and revenues in excess of budget.

T. Unearned Revenue
Unearned revenue arises when assets are received before revenue recognition criteria have been satisfied.

Grants and entitlements received before eligibility requirements are met are recorded as deferred inflows of resources from unavailable revenue.

U. Use of Estimates
The preparation of basic financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

V. Implementation of New Accounting Pronouncements
GASB Statement No. 100, Accounting Changes and Error Corrections—an amendment of GASB Statement No. 62
This Statement defines accounting changes as changes in accounting principles, changes in accounting estimates, and changes to or within the financial reporting entity and describes the transactions or other events that constitute those changes. This Statement also prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections in previously issued financial statements.

This Statement did not have a material impact on the financial statements.

W. Upcoming New Accounting Pronouncements
The City is currently analyzing its accounting practices to identify the potential impact on the financial statements of the following GASB Statements:
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City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
GASB Statement No. 101, Compensated Absences
This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. Leave is attributable to services already rendered when an employee has performed the services required to earn the leave. Leave that accumulates is carried forward from the reporting period in which it is earned to a future reporting period during which it may be used for time off or otherwise paid or settled. In estimating the leave that is more likely than not to be used or otherwise paid or settled, a government should consider relevant factors such as employment policies related to compensated absences and historical information about the use or payment of compensated absences. However, leave that is more likely than not to be settled through conversion to defined benefit postemployment benefits should not be included in a liability for compensated absences.

This Statement requires that a liability for certain types of compensated absences - including parental leave, military leave, and jury duty leave—not be recognized until the leave commences. This Statement also requires that a liability for specific types of compensated absences not be recognized until the leave is used. A liability for leave that has been used but not yet paid or settled should be measured at the amount of the cash payment or noncash settlement to be made. Certain salary-related payments that are directly and incrementally associated with payments for leave also should be included in the measurement of the liabilities. The requirements of this Statement are effective for fiscal years beginning after December 15, 2023, and all reporting periods thereafter.

GASB Statement No. 102, Certain Risk Disclosures
This Statement requires a government to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. Additionally, this Statement requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued.

If a government determines that those criteria for disclosure have been met for a concentration or constraint, it should disclose information in notes to financial statements in sufficient detail to enable users of financial statements to understand the nature of the circumstances disclosed and the government’s vulnerability to the risk of a substantial impact. The disclosure should include descriptions for (1) the concentration or constraint (2) each event associated with the concentration or constraint that could cause a substantial impact if the event had occurred or had begun to occur prior to the issuance of the financial statements (3) actions taken by the government prior to the issuance of the financial statements to mitigate the risk. The requirements of this Statement are effective for fiscal years beginning after June 15, 2024, and all reporting periods thereafter.

GASB Statement No. 103, Financial Reporting Model Improvements This Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability.
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City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
This Statement establishes new accounting and financial reporting requirements or modifies existing requirements related to (a) Management’s discussion and analysis (MD&A) (b) Unusual or infrequent items (c) Presentation of the proprietary fund statement of revenues, expenses, and changes in fund net position (d) Information about major component units in basic financial statements (5) Budgetary comparison information (6) Financial trend information in the statistical section. The requirements of this Statement are effective for fiscal years beginning after June 15, 2025, and all reporting periods thereafter.

NOTE 2 - CASH AND INVESTMENTS
As of June 30, 2024, cash and investments were reported in the financial statements as follows:

Governmental
Activities
Cash and investments $ 10,591,482
Restricted cash and investments 1,531,142
Total cash and investments $ 12,122,624
Cash and investments consisted of the following as of June 30, 2024:

Deposits:

Cash on hand $ 1,400
Deposits with financial institutions 3,004,165
Total Deposits 3,005,565
Investments:

Local Agency Investment Fund 3,689,511
Certificates of deposit 3,896,406
PARS restricted cash with fiscal agent 1,531,142
Total investments 9,117,059
Total cash and investments $ 12,122,624
A. Cash Deposits
The California Government Code requires California banks and savings and loan associations to secure the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest, and places the City ahead of general creditors of the institution. The fair value of pledged securities must equal at least 110 percent of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes that have a value of 150 percent of the City's total cash deposits. Cash deposits insured up to $250,000 per entity, per bank by the Federal Deposit Insurance Corporation (FDIC).

The bank balances before reconciling items totaled $3,462,237 at June 30, 2024 and were different from carrying amounts due to deposits in transit and outstanding checks. The amount uninsured was $2,197,237, which was collateralized by securities held by pledging financial institutions. The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents. Interest income earned on pooled cash and investments is allocated to the various funds based on the period-end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund. 172
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City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
B. Fair Value Measurements
GASB 72 established a hierarchy of inputs to the valuation techniques with three levels:
 Level 1 inputs are quoted prices in active markets for identical assets or liabilities.  Level 2 inputs are quoted market prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other than quoted prices that are not observable
 Level 3 inputs are unobservable inputs, such as a property valuation or an appraisal.

C. Investment Policy
Allowable investment instruments are defined in the California Government Code Section 53600, et. seq., as amended. If the Code is further revised to allow additional investments or is changed regarding the limits on certain categories of investments, the City is authorized to conform to these changes, excluding those changes that may be prohibited by this policy. Where the Government Code specifies a percentage limitation for a particular category of investments, that percentage is applicable only at the date of purchase.

The table below identifies the investment types that are authorized by the City’s investment policy and the California Government Code (or the City's investment policy, if more restrictive). Under the provisions of the City's investment policy, and in accordance with California Government Code, the following investments are authorized:

Maximum
Maturity
Maximum
Percentage of
Portfolio
Maximum
Investment in
One Issuer
U.S. Treasury Bills 5 Years 60% n/a
Negotiable Certificates of Deposit 5 Years 30% n/a
Local Agency Investment Fund (LAIF) n/a n/a $75M
Authorized Investment Type
D. External Investment Pool
The City's investments with LAIF at June 30, 2024, includes a portion of the pooled funds invested in Structured Notes and Asset-Backed Securities. These investments include the following:

Structured Notes
These are debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options.

Asset-Backed Securities
The bulk of asset-backed securities are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as CMO's) or credit card receivables.

LAIF is not registered with the Securities and Exchange Commission and is not rated. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The approved investments policy is listed on the LAIF website, located at http://www.treasurer.ca.gov/pmia-laif/.
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City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
E. Risk Disclosures
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the term of an investment’s maturity, the greater the sensitivity to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of an investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. As of June 30, 2024, the City’s investments were in compliance with the ratings required by the City’s investment policy and Government Code.

Concentrations of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There are no investments in any one issuer that represent 5% or more of total City investments required to be disclosed.

Custodial Credit Risk
For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments.

With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government's indirect investment in securities through the use of mutual funds or government investment pools (such as LAIF).

As of June 30, 2024, the City’s investments had the following maturities:
12 Months or
Less 1-5 years Fair Value
Fair Value
Input Levels
Local Agency Investment Funds $ 3,689,511 $ - $ 3,689,511 n/a Certificates of deposit - 3,896,406 3,896,406 Level 1
PARS restricted cash with fiscal agent 1,531,142 - 1,531,142 Level 2 Total Investments $ 5,220,653 $ 3,896,406 $ 9,117,059
Investment Type
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City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
NOTE 3 - LOANS RECEIVABLE
Housing and Community Development Loan Program
The City uses Federal Home Loan Reuse, Affordable Housing and CDBG Program Income funds to provide housing loans to eligible applicants. Such loans are made to low and moderate-income households to improve or rehabilitate residences. These loans have been reflected in the financial statements as loans receivable.

Loans receivable consisted of the following as of June 30, 2024:

CDBG Federal Capitola
Program Home Loan Housing
Loans Receivable Income Reuse Successor Total
Individual Loans $ 407,257 $ 211,953 $ 391,392 $ 1,010,602 Bay Avenue Senior Apartments - 3,785,969 1,880,100 5,666,069 Wharf Road Manor - 128,057 - 128,057
Total Loans Receivable $ 407,257 $ 4,125,979 $ 2,271,492 $ 6,804,728 NOTE 4 - INTERFUND TRANSACTIONS
Inter-fund Receivables and Payables
Amounts due to or due from other funds reflect inter-fund balances for services rendered or short-term loans expected to be repaid in the next fiscal year. As of June 30, 2024, the City had the following interfund balances:

Due from Due to
Fund Other Funds Other Funds
General Fund $ 79,229 $ -
Nonmajor Funds - 79,229
Total Due From/To $ 79,229 $ 79,229
Transfers In/Out
Transfers from the General Fund to the debt service funds were to fund regular debt service activity of the City. Transfers from the General Fund to the Capital Projects fund were to pay for building and infrastructure improvements. The following summarizes transfers between funds during the fiscal year ended June 30, 2024:

Fund Transfer in Transfer out
General Fund $ 100,000 $ 3,356,788
Capital Projects Fund 2,700,000 -
Nonmajor Funds 757,788 201,000
Total Transfers $ 3,557,788 $ 3,557,788
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City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
NOTE 5 - CAPITAL ASSETS
Capital assets for governmental activities consisted of the following as of June 30, 2024:

Balance Deletions/ Balance
Governmental activities: July 01, 2023 Additions Transfers June 30, 2024 Non-depreciable:

Land $ 4,883,789 $ - $ - $ 4,883,789
Construction in Progress 3,549,718 12,273,834 (429,932) 15,393,620 Total Non-Depreciable 8,433,507 12,273,834 (429,932) 20,277,409 Depreciable:

Buildings and Improvements 18,017,712 20,650 (290,122) 17,748,240 Infrastructure 35,907,669 1,814,062 - 37,721,731
Machinery and Equipment 4,520,133 1,635,284 (820,855) 5,334,562 Total Depreciable 58,445,514 3,469,996 (1,110,977) 60,804,533 Less Accumulated Depreciation for:

Buildings and Improvements (2,159,672) (368,426) 215,440 (2,312,658) Infrastructure (23,811,144) (568,051) - (24,379,195)
Machinery and Equipment (3,967,973) (358,565) 815,043 (3,511,495) Total Accumulated Depreciation (29,938,789) (1,295,042) 1,030,483 (30,203,348) Total Depreciable Capital Assets - Net 28,506,725 2,174,954 (80,494) 30,601,185 Total Capital Assets - Net $ 36,940,232 $ 14,448,788 $ (510,426) $ 50,878,594 Depreciation and amortization expense for governmental activities:

General Government $ 786,356
Public Safety 103,992
Culture and Recreation 45,774
Transportation 358,922
Total depreciation expense $ 1,295,042
NOTE 6 - NONCURRENT LIABILITIES
The City's noncurrent liabilities consisted of the following as of June 30, 2024:

Balance Balance Due Within
Governmental Activities July 01, 2023 Additions Retirements June 30, 2024 One Year Cove Financing $ 642,663 $ - $ 642,663 $ - $ -
Beach and Village Lot II Financing 829,917 - 67,302 762,615 68,823 Compensated Absences 915,544 608,857 497,651 1,026,750 558,098 Net OPEB liability 1,833,813 1,573,174 1,856,989 1,549,998 - Net Pension Liability 30,056,602 10,765,807 8,664,899 32,157,510 - Total Governmental Activities Debt $ 34,278,539 $ 12,947,838 $ 11,729,504 $ 35,496,873 $ 626,921 Loan Agreement Payable - Pacific Cove Debt Financing
On March 23, 2012, the City executed a $2.39 million loan agreement to facilitate relocating the residents of the Pacific Cove Mobile Home Park. The City-owned mobile home park was permanently closed for safety reasons after a pipe failure flooded the park. This financing agreement used the existing City Hall site and the adjacent Upper Pacific Cove Parking lot as the subject property. The original agreement was 176
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City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
for 20 years at 5.14% fixed interest rate for the first 10 years, with a reset to 10-year T-Bill plus 3%. The agreement was renegotiated during fiscal year 2012/13 to a tax-exempt lease with a 3.25% interest rate, with a reset in year 10 to a 10-year T-Bill plus 1.5%. As a result of the refinancing, annual loan payments were reduced by approximately $28,000. Savings on interest over the first nine years was estimated to be $350,000.

In FY 2012/13, the City made a decision to apply $500,000 from the disaster recovery insurance settlement to the Pacific Cove Lease. This resulted in a principal reduction of $476,190, with a prepayment penalty of $23,810.

This loan was completely repaid during the fiscal year ended June 30, 2024.

Loan Agreement Payable - Beach and Village Lot II Financing On March 14, 2014, the City of Capitola executed a $1,372,500 low-interest loan with the California Infrastructure and Economic Development Bank (IBank). This loan is considered an obligation with the General Fund as the source of repayment; and the City Public Works Corporation Yard serving as the leased asset. The loan term is 20 years at a fixed 2.26% interest rate.

The following summarizes the City’s debt service requirements under this agreement:

Fiscal Year Principal Interest Total
2025 $ 68,823 $ 16,457 $ 85,280
2026 70,379 14,884 85,263
2027 71,969 13,276 85,245
2028 73,596 11,631 85,227
2029 75,259 9,949 85,208
2030-2034 402,589 23,153 425,742
Total $ 762,615 $ 89,350 $ 851,965
Compensated Absences
Generally Accepted Accounting Principles identifies certain items that should be accrued as a liability as the benefits are earned by the employees but only to the extent it is probable that the employer will compensate the employees for the benefits through cash payments conditioned on the employee’s termination or retirement.

City employees accumulate earned but unused benefits that can be converted to cash at termination of employment. The non-current portion of these vested benefits, payable in accordance with various collective bargaining agreements, totaled $468,652 as of June 30, 2024.

NOTE 7 - DEFICIT FUND BALANCES
As of June 30, 2024, the city reported a deficit fund balance of $773,059 in the Capital Projects Fund and $149,941 in its nonmajor funds. These deficits are expected to be reduced by future revenues and transfers from other funds.
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Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
NOTE 8 - DEFINED BENEFIT PENSION PLANS
General Information about the Pension Plans
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency CostSharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS). The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other.) Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous risk pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68.

Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors three miscellaneous rate plans. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 55 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employee’s Retirement Law the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration. The general fund typically is used to liquidate pension liabilities for governmental funds.

The Plans’ provisions and benefits in effect at June 30, 2024, are summarized as follows:

Classic PEPRA Classic PEPRA
Benefit formula 2.5% @ 55 2% @ 62 3.0% @ 50 2.7% @ 57
Benefit vesting schedule 5 Years 5 Years 5 Years 5 Years Benefit payments Monthly for Life Monthly for Life Monthly for Life Monthly for Life Retirement age 50 52 50 50-57
Monthly benefits as a
% of eligible compensation 2-2.5% 2% 3.00% 2.70%
Required employee contribution rates 7.96% 7.75% 8.99% 13.75% Required employer contribution rates 14.06% 7.68% 27.11% 13.54% Miscellaneous Safety
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City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
Employees Covered
At June 30, 2024, the following employees were covered by the benefit terms for the Plans:

Miscellaneous Safety Total
Active 51 21 72
Transferred 36 13 49
Separated 28 7 35
Retired 112 56 168
Total 227 97 324
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rates are the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2024, the City’s contributions were as follows:

Employer
Contributions
Miscellaneous $ 1,377,687
Safety 1,637,024
Total Employer Contributions $ 3,014,711
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2024, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan as follows:

Miscellaneous
Safety
Total
Proportionate Share of
Net Pension
Liability/(Asset)
$ 15,170,447
16,987,063
$ 32,157,510
The City’s net pension liability for the Plans is measured as the proportionate share of the net pension liability. The net pension liability of the Plans are measured as of June 30, 2023, and the total pension liability for the Plans used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.
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Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
The City’s proportionate share of the net pension liability for the Plans as of June 30, 2023 and 2024 was as follows:

Miscellaneous Safety Combined Plans
Proportion - June 30, 2023 0.30483% 0.22983% 0.26021%
Proportion - June 30, 2024 0.30338% 0.22725% 0.25777%
Change - Increase/(Decrease) -0.00145% -0.00257% -0.00244% For the year ended June 30, 2024, the City recognized pension expense of $4,226,459.

At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Changes of Assumptions $ 915,908 $ - $ 991,388 $ -
Differences between Expected and Actual Experience 774,988 120,219 1,247,164 106,770 Differences between Projected and Actual Investment Earnings 2,456,232 - 2,324,675 - Differences between Employer's Contributions and
Proportionate Share of Contributions - 401,481 118,690 524,075 Change in Employer's Proportion 2,942 719,940 321,615 8,459 Pension Contributions Made Subsequent to Measurement Date 1,377,687 - 1,637,024 - Total $ 5,527,758 $ 1,241,640 $ 6,640,556 $ 639,304
Miscellaneous Safety
The City reported $3,014,711 as deferred outflows of resources related to contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ended June 30, 2025.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Miscellaneous Safety Total
$ 569,125 $ 1,391,764 $ 1,960,889
441,051 1,005,467 1,446,517
1,827,776 1,902,111 3,729,887
70,479 64,886 135,365
- - -
- - -
$ 2,908,431 $ 4,364,228 $ 7,272,658
2025
Total
2026
2027
2028
Thereafter
2029
Deferred Outflows/(Inflows) of
Resources
Fiscal Year
Ending June
30:
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Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
Actuarial Assumptions
The total pension liabilities in the June 30, 2022 actuarial valuations were determined using the following actuarial assumptions:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost
Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Payroll Growth 2.75%
Projected Salary Increase (1)
Investment Rate of Return 6.90% (2)
Mortality (3)
(1) Varies by age and service
(2) Net of pension plan investment expenses, including inflation (3) Derived using CalPERS' membership data for all funds Discount Rate
The discount rate used to measure the total pension liability was 6.9 percent for the Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for the Plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets.

Therefore, the current 6.9 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 6.9 percent will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website. The long-term expected rate of return on pension plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and longterm returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The table below reflects the longterm expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. 181
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
These rates of return are net of administrative expenses as follows:

New
Strategic Real Return
Asset Class Allocation Years 1 - 10 (a)
Global equity - cap-weighted 30.00% 4.45%
Global equity non-cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
(a) In the System's ACFR, Fixed Income is included in Global Debt Securities; Liquidity Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.
(b) An expected inflation of 2.30% used for this period.

Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability for the Plans, calculated using the discount rate for the Plans, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1- percentage point higher than the current rate:

Miscellaneous Safety
1% Decrease 5.90% 5.90%
Net Pension Liability$ 21,849,354 24,354,064
Current 6.90% 6.90%
Net Pension Liability$ 15,170,447 16,987,063
1% Increase 7.90% 7.90%
Net Pension Liability$ 9,673,133 10,964,016
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. See https://www.calpers.ca.gov/page/investments/about-investmentoffice/investment-financial-reports?stream=top. 182
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
NOTE 9 - OTHER POSTEMPLOYMENT BENEFITS PLAN (OPEB)
Plan Description
The City’s defined benefit postemployment healthcare plan, (City of Capitola Retiree Healthcare Plan, CRHP), provides medical benefits to eligible retired City employees and spouses. CRHP is an agent multiple-employer plan administered by California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for participating public employers within the State of California. A menu of benefit provisions, as well as other requirements, is established by State statute within the Public Employees’ Retirement Law. The CRHP’s plan provisions are established and may be amended through negotiation and Memoranda of Understanding between the City Council and the various bargaining units. All contracts with CalPERS are approved through City resolution.

CalPERS issues publicly available reports that can be found on the CalPERS’ website at www.calpers.ca.gov.

Benefits Provided
The City offers the same medical plans to its retirees as to its active employees, with the exception that once a retiree becomes eligible for Medicare (that is, reaches age 65), he or she must join a Medicare HMO or a Medicare Supplement plan under PEMHCA.

Employees are eligible to receive City-paid healthcare benefits upon meeting retirement eligibility requirements under applicable CalPERS provisions (Miscellaneous Classic or PEPRA and Safety Classic or PEPRA), or by qualifying disability retirement status. Benefits are paid for the lifetime of the retiree and, if applicable, the surviving spouse of the retiree.

The City has participated over twenty years in PEMHCA, therefore, the statutory contributions for retirees are equal to the active employees. The City also pays an administrative statutory percentage-ofpremium fee for all retirees.

Employees Covered by Benefit Terms
At June 30, 2023, the most recent valuation date, the benefit terms covered the following employees:

Active employees 57
Inactive employees 26
Total employees 83
Contributions
The obligation of the City to contribute to the plan is based on an actuarially determined rate. The City makes contributions and participates in the California Employers’ Retiree Benefit Trust (CERBT) Fund for the purpose of prefunding obligations for past services. Through this plan, the California Public Employees’ Retirement System (CalPERS) Board of Administration has the sole and exclusive control and power over the administration and investment of the prefunding plan. Total contributions during the fiscal year ended June 30, 2024 were $158,573, which was 2% of covered payroll. 183
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
Actuarial Assumptions
The following summarized the actuarial assumptions for the OPEB plan included in this fiscal year:

Valuation Date:

Measurement Date:

Actuarial Cost Method:

Amortization Period:

Actuarial Assumptions:

Discount Rate
Inflation
Payroll Increases
Trend Rate
Mortality
Notes:

The discount rate decreased from 7% to 6.25%.

6.25%

5.50%
Entry-Age, Level Percent of Pay
2000-2019 CalPERS
Experience Study
June 30, 2023
June 30, 2023
20 years

2.50%

2.75%
Discount Rate
GASB 75 requires a discount rate that reflects the following:
 The long-term expected rate of return on OPEB plan investments – to the extent that the OPEB plan’s fiduciary net position (if any) is projected to be enough to make projected benefit payments and assets are expected to be invested using a strategy to achieve that return.  A yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher – to the extent that the conditions in (a) are not met.

To determine a resulting single (blended) rate, the amount of the plan’s projected fiduciary net position (if any) and the amount of projected benefit payments is compared in each period of projected benefit payments. The discount rate used to measure the City’s Total OPEB liability is based on these requirements and long-term expected returns of plan investments of 6.25% as compared to a 20 year municipal index of 3.86%.

Rate of Return
The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. The calculated investment rate of return was set equal to the expected ten-year compound (geometric) real return plus inflation (rounded to the nearest 25 basis points, where appropriate).
184
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
The following table provides the long-term expected real rates of return by asset class (based on published capital market assumptions):

Asset Class
Percentage of
Portfolio
Long-Term
Expected Rate of
Return
Global Equity 49.0% 4.8%
Domestic Fixed Income 23.0% 1.8%
Treasury Inflation-Protected Securities (TIPS) 5.0% 1.6% Real Estate Investment Trusts (REITs) 20.0% 3.7%
All Commodities 3.0% 1.9%
Total 100.0%
Changes in the Net OPEB Liability
The following summarizes the changes in the net OPEB liability during the year ended June 30, 2024:

Fiscal Year Ended June 30, 2024
Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability
(Asset)
Balance at June 30, 2023 $ 2,376,682 $ 542,869 $ 1,833,813 Service cost 97,501 - 97,501
Interest in Total OPEB Liability 169,676 - 169,676
Employer contributions - 169,270 (169,270)
Balance of diff between actual/exp experience (510,333) - (510,333) Balance of changes in assumptions 164,493 - 164,493
Actual investment income - 36,040 (36,040)
Administrative expenses - (158) 158
Benefit payments (102,222) (102,222) -
Net changes (180,885) 102,930 (283,815)
Balance at June 30, 2024 $ 2,195,797 $ 645,799 $ 1,549,998 Covered Employee Payroll $ 7,943,922
TOL as a % of Covered Employee Payroll 27.64%
Service Cost as a % of Covered Emp Payroll 1.23%
NOL as a % of Covered Employee Payroll 19.51%
The City’s OPEB Plan is a funded plan and assets have been set aside in an irrevocable trust. 185
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
Deferred Inflows and Outflows of Resources
As of June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Difference between actual and expected experience $ - $ 683,082 Difference between actual and expected earnings 37,241 - Change in assumptions 822,784 -
OPEB contribution subsequent to measurement date 158,573 - Totals $ 1,018,598 $ 683,082
Contributions of $158,573 were made subsequent to the measurement date and will be recognized as OPEB expense fiscal year 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year Ended June 30,
2025 $ 67,163
2026 64,577
2027 82,158
2028 59,435
2029 59,023
Thereafter (155,413)
Total $ 176,943
OPEB Expense
The following summarizes the OPEB expense by source during the year ended June 30, 2024:

Service cost $ 97,501
Interest in TOL 169,676
Expected investment income (38,096)
Difference between actual and expected experience (84,927) Difference between actual and expected earnings 8,638
Change in assumptions 143,950
Administrative expenses 158
OPEB Expense $ 296,900
186
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
The following summarizes changes in the net OPEB liability as reconciled to OPEB expense during the year ended June 30, 2024:
$ 1,549,998
(1,833,813)
(283,815)
Changes in deferred outflows (3,264)
Changes in deferred inflows 425,406
Employer contributions 158,573
OPEB Expense $ 296,900
Net OPEB liability ending
Net OPEB liability beginning
Change in net OPEB liability
Sensitivity to Changes in the Municipal Bond Rate
The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using a municipal bond rate (used to determine the discount rate) that is one percentage point lower or one percentage point higher, is as follows:
(1% Decrease ) 1.92% (1% Increase )
Net OPEB Liability (Asset) $ 1,818,672 $ 1,549,998 $ 1,322,369 Discount Rate
Sensitivity to Changes in the Healthcare Cost Trend Rates The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than current healthcare cost trend rates, is as follows:
(1% Decrease ) 5.00% (1% Increase )
Net OPEB Liability (Asset) $ 1,279,941 $ 1,549,998 $ 1,881,828 Trend Rate
NOTE 10 - RISK MANAGEMENT
Municipal Pooling Authority (MPA)
The City participates in the Monterey Bay Area Self-Insurance Agency (the Authority), a joint powers agency comprising the City and nine other local jurisdictions, created pursuant to California law for liability and workers compensation insurance services. The Authority’s Board of Directors is elected from representatives of the member governments, and controls operations of the fund, including selection of management and approval of operating budgets. It is independent of the individual member influence, except for their representation on the board, and is therefore not a component unit of the City for reporting purposes.

The City is exposed to various risks including worker injuries, tort liability, theft, damage or destruction of assets, errors and omissions, and natural disasters. With respect to risks other than workers’ compensation, the City and other pool participants pay an annual premium estimated by the pool administrator to be sufficient to cover all liability claims for which the pool is obligated. If a covered entity’s losses exceed its premiums, there is no individual supplemental assessment, and if a covered entity’s losses are lower than its assessment, it does not receive a refund. However, annual budget appropriations are experience-based. The pool views its activities in the aggregate and makes overall 187
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
adjustments to the premiums charged and is therefore intended to be self-sustaining through member contributions (premiums). Risk of loss is retained by the City for general liability claims up to $10,000 per occurrence. The fund carries excess loss coverage for general liability claims between $990,000 and $20,000,000 per insured event and is uninsured for losses in excess of $20,000,000 per event. Unpaid claims at fiscal year-end, as reported by the fund, were not material. There was no reduction in the City’s insurance coverage as compared to the previous fiscal year, nor have there been any losses exceeding coverage during any of the five previous years.

Premium payment amounts are determined by the fund's Board and are charged to the City’s general fund as expenditures when paid.

In the proper course of operation, the Authority issued debt in the aggregate principal amount of $5,150,000 on October 1, 2004. The Authority is required to collect and disburse the loan premiums in accordance with the loan agreement, Article VI, Section 6.03. The Member agencies are required by the Amended and Restated Joint Powers Agreement Relating to the Authority, article 20 to pay to the Authority their individual debt service amount and associated expenses, as determined by the Authority.

Furthermore, the Member Agency’s contribution will be payable from any source of available funds of the Member, including amounts on deposit in the general fund of the Member. Audited financial statements of the Authority can be obtained at 1 Civic Center Drive, Scotts Valley, California 90566.

There were no material unpaid and uninsured claims outstanding at the beginning or end of the last two fiscal years. Settlements have not exceeded insurance in the past three fiscal years.

NOTE 11 - JOINT VENTURES
Santa Cruz Consolidated Emergency Communications Center The City is a member of the Santa Cruz Consolidated Emergency Communications Center, a Joint Powers Authority created to establish and operate a consolidated communications center which provides emergency call receiving and dispatching services. Other members of the Authority include the Cities of Santa Cruz and Watsonville, and the County of Santa Cruz. The members, including the City of Capitola, are responsible for funding the operations of the Authority through annual assessments. The annual assessments are based on percentages calculated for each member. Audited financial statements of the Authority can be obtained at 495 Upper Park Road, Santa Cruz, California 95065.

In addition, the Authority and member agencies have entered into a Use Agreement relating to the issuance of the Authority’s Santa Cruz County Public Financing Authority 2002 Lease Revenue Refunding Bonds, Series A, in the aggregate principal amount of $5,760,000. These bonds were refunded in May as 2012 Lease Revenue Bonds, Series A with a principal of $3,965,000. The proceeds were used to refinance the existing debt that was used for building costs; purchase additional equipment and make a lease termination payment to the County to acquire space that is currently being used for the Emergency Operations Center (EOC). The term bonds are due on June 15, 2034.

Other Activities
The City participates in other joint activities for the provisions of law enforcement activities, including the Santa Cruz County Narcotics Enforcement Team (SCCNET) and the Criminal Justice Council. None of these activities are conducted as a separate legal entity; therefore, they are not joint ventures, but are cost-sharing arrangements only. No separate financial statements are prepared for these activities, nor is the City exposed to risk of additional costs beyond reimbursement of its share of on-going operating costs.
188
Item 7 D.

City of Capitola
Notes to the Basic Financial Statements
June 30, 2024
NOTE 12 - COMMITMENTS AND CONTINGENCIES
Litigation
The City is subject to certain matters of litigation that may arise in the normal course of conducting City business. City management believes, based upon consultation with legal counsel, that these cases, in the aggregate, are not expected to result in a material adverse financial impact on the City. Additionally, City management believes that the City's insurance programs are sufficient to cover any potential losses should an unfavorable outcome materialize.

Federal and State Grant Programs
The City participates in Federal and State grant programs. These programs are audited by the City's independent accountants if required by and in accordance with the provisions of the Uniform Guidance and applicable State requirements. Expenditures which may be disallowed, if any, by the granting agencies, cannot be determined at this time. The City expects such amounts, if any, to be immaterial.

City/Successor Agency Obligations
Deductions (expenses) incurred by the Successor Agency for the year ended June 30, 2024 (and subsequent years in which the Successor Agency is in operation) are subject to review by various State agencies and the County in which the Successor Agency resides. If any expenses incurred by the Successor Agency are disallowed by the State agencies or County, the City, acting as the Successor Agency could be liable for the repayment of the disallowed costs from either its own funds or by the State withholding remittances normally paid to the City. Over the last fiscal year, the Successor Agency has been successful in receiving funding for all approved obligations, with the exception of City/RDA loans.

The amount, if any, of expenses that may be disallowed by the State agencies or County cannot be determined at this time as to be immaterial or not.

Encumbrances
The City uses an encumbrance system as an extension of normal budgetary accounting for governmental funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations.

Encumbrances outstanding at year-end are recorded as restricted, committed or assigned fund balance, depending on the classification of the resources to be used to liquidate the encumbrance, since they do not constitute expenditures or liabilities. Outstanding encumbrances at year-end are reappropriated for the following year. Unencumbered and unexpended appropriations lapse at year end.

Encumbrances outstanding as of June 30, 2024 totaled $2.77 million.

NOTE 13 - PRIOR PERIOD ADJUSTMENTS – ACCOUNTING CHANGES AND

CORRECTIONS
As of June 30, 2024, the City increased beginning net position in its governmental activities by $306,658 to reflect a change in the application of accounting policies and related estimates as of June 30, 2024. This adjustment is reflected by fund and opinion unit in the governmental fund statement of revenues, expenditures and changes in fund balance. 189
Item 7 D.

REQUIRED SUPPLEMENTARY

INFORMATION
190
Item 7 D.

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191
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual (GAAP Basis)
General Fund
For the Year Ended June 30, 2024
Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Taxes $ 14,943,970 $ 14,643,970 $ 14,495,882 $ (148,088) Licenses and permits 645,500 645,500 757,312 111,812
Fines and forfeitures 607,500 607,500 425,043 (182,457) Intergovernmental 108,000 274,752 223,792 (50,960)
Charges for Services 2,212,637 2,212,637 2,298,937 86,300 Use of money and property 209,495 209,495 478,610 269,115 Other revenue 214,401 244,401 334,933 90,532
Total Revenues 18,941,503 18,838,255 19,014,509 176,254

EXPENDITURES
Current:

General government 3,668,814 3,735,085 3,604,714 130,371 Public safety 7,201,461 7,371,463 7,740,343 (368,880)
Community development 1,006,504 1,006,504 947,297 59,207 Culture and recreation 2,408,921 2,366,515 2,677,956 (311,441) Transportation 3,377,464 3,435,590 3,682,149 (246,559)
Capital outlay 649,000 480,743 1,039,033 (558,290)
Total Expenditures 18,312,164 18,395,900 19,691,492 (1,295,592) Excess (Deficiency) of Revenues over Expenditures 629,339 442,355 (676,983) (1,119,338)

OTHER FINANCING SOURCES (USES)
Transfers in 100,000 100,000 100,000 -
Transfers out (1,456,788) (1,456,788) (3,356,788) (1,900,000) Total Other Financing Sources (Uses) (1,356,788) (1,356,788) (3,256,788) (1,900,000) Net Change in Fund Balance (727,449) (914,433) (3,933,771) (3,019,338) Fund Balance Beginning 10,606,744 10,606,744 10,606,744 - Prior Period Adjustments 344,346 344,346 344,346 -
Fund Balance Beginning, as Adjusted 10,951,090 10,951,090 10,951,090 - Fund Balance Ending $ 10,223,641 $ 10,036,657 $ 7,017,319 $ (3,019,338) Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for governmental funds. The City’s budget ordinance requires that in April of each fiscal year, the City Manager must submit a preliminary budget that includes projected expenditures and the means of financing them, to the City Council for the fiscal year commencing the following July 1. As modified during public study sessions, the preliminary budget becomes the proposed budget. Following public hearings on the proposed budget, the final annual budget is adopted by the City Council in June of the following fiscal year. After adoption of the final budget, transfers of appropriations within a general fund department, or within each fund can be made by the City Manager. Budget modifications between funds, increases, or decreases to a fund’s overall budget, transfers between general fund departments or transfers that affect capital projects must be approved by the City Council or Agency Board. Numerous properly authorized amendments are made during the fiscal year. Appropriations lapse at fiscal year-end. Budgetary control is enhanced by integrating the budget into the general ledger. Encumbrance accounting is employed (e.g., purchase orders) to avoid over-expenditure. Encumbrances outstanding at fiscal year-end are automatically rebudgeted in the following fiscal year, unless specifically cancelled by Council action. Per Capitola Municipal Code 3.20.060.C: “The appropriation for the uncompleted balance of executory contracts should not lapse at year-end but is automatically appropriated for the succeeding fiscal year unless specifically cancelled by council action”. Expenditures in excess of appropriations were covered by budgets in other objects/functions or beginning fund balance. 192
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual (GAAP Basis)
Federal Home Loan Reuse Fund
For the Year Ended June 30, 2024
Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Use of money and property $ - - $ 86,985 $ 86,985 $
Total Revenues - - 86,985 86,985

EXPENDITURES
Current:

General government 4,100 64,100 3,700 60,400
Total Expenditures 4,100 64,100 3,700 60,400
Net Change in Fund Balance (64,100) (4,100) 83,285 147,385 Fund Balance Beginning 4,780,025 4,780,025 4,780,025 -
Prior Period Adjustments 154,340 154,340 154,340 -
Fund Balance Beginning, as Adjusted 4,934,365 4,934,365 4,934,365 - Fund Balance Ending $ 4,930,265 $ 4,870,265 $ 5,017,650 $ 147,385 193
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual (GAAP Basis)
Capitola Housing Successor Fund
For the Year Ended June 30, 2024
Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Use of money and property $ 40,000 40,000 $ 153,801 $ 113,801 $ Total Revenues 40,000 40,000 153,801 113,801

EXPENDITURES
Current:

Community development 155,807 405,807 324,528 81,279
Total Expenditures 155,807 405,807 324,528 81,279
Net Change in Fund Balance (365,807) (115,807) (170,727) 195,080 Fund Balance Beginning 4,329,058 4,329,058 4,329,058 -
Prior Period Adjustments 20,076 20,076 20,076 -
Fund Balance Beginning, as Adjusted 4,349,134 4,349,134 4,349,134 - Fund Balance Ending $ 4,233,327 $ 3,983,327 $ 4,178,407 $ 195,080 194
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual (GAAP Basis)
RTC Streets Fund
For the Year Ended June 30, 2024
Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Intergovernmental $ 371,000 371,000 $ 359,670 $ (11,330) $ Use of money and property - - 19,644 19,644
Total Revenues 371,000 371,000 379,314 8,314

EXPENDITURES
Capital outlay 386,345 366,000 33,061 353,284
Total Expenditures 366,000 386,345 33,061 353,284
Net Change in Fund Balance (15,345) 5,000 346,253 361,598 Fund Balance Beginning 185,892 185,892 185,892 -
Fund Balance Ending $ 190,892 $ 170,547 $ 532,145 $ 361,598 195
Item 7 D.

City of City of Capitola
Schedule of Pension Contributions (CalPERS Miscellaneous) June 30, 2024
(Last Ten Years)
Miscellaneous Plan
Plan Measurement Date 2014 2015 2016 2017 2018
Fiscal Year Ended 2015 2016 2017 2018 2019
Contractually Required Contributions $ 261,550 $ 448,910 $ 516,728 $ 832,631 $ 838,617 Contributions in Relation to
Contractually Required Contributions 261,550 448,910 516,728 832,631 838,617 Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 3,147,103 $ 3,245,529 $ 3,370,438 $ 3,434,216 $ 3,504,309 Contributions as a % of Covered Payroll 8.31% 13.83% 15.33% 24.25% 23.93% Miscellaneous Plan
Plan Measurement Date 2019 2020 2021 2022 2023
Fiscal Year Ended 2020 2021 2022 2023 2024
Contractually Required Contributions $ 913,110 $ 1,024,725 $ 1,173,195 $ 1,290,739 $ 1,377,687 Contributions in Relation to
Contractually Required Contributions 913,110 1,024,725 1,173,195 1,290,739 1,377,687 Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 3,799,393 $ 3,432,738 $ 3,656,822 $ 3,818,143 $ 3,908,367 Contributions as a % of Covered Payroll 24.03% 29.85% 32.08% 33.81% 35.25% Notes to Schedule:

Valuation Date: June 30, 2022
Assumptions Used: Entry Age Method used for Actuarial Cost Method Level Percentage of Payroll and Direct Rate Smoothing
Remaining Amortization Period no more than 29 years
Inflation Assumed at 2.30%
Investment Rate of Returns set at 6.8%
The CalPERS discount rate was increased from 7.50% to 7.65% in FY2016, to 7.15% in FY2018, and then decreased to 6.90% in FY2023.

The CalPERS mortality assumptions was adjusted in fiscal year 2023.

The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing morality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report that can be found on the CalPERS website.
196
Item 7 D.

City of City of Capitola
Schedule of Pension Contributions (CalPERS Safety)
June 30, 2024
(Last Ten Years)
Safety Plan
Plan Measurement Date 2014 2015 2016 2017 2018
Fiscal Year Ended 2015 2016 2017 2018 2019
Contractually Required Contributions $ 640,785 $ 741,692 $ 536,507 $ 937,396 $ 954,292 Contributions in Relation to
Contractually Required Contributions 640,785 741,692 536,507 937,396 954,292 Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 2,283,732 $ 2,308,245 $ 2,402,133 $ 2,487,719 $ 2,381,492 Contributions as a % of Covered Payroll 28.06% 32.13% 22.33% 37.68% 40.07% Safety Plan
Plan Measurement Date 2019 2020 2021 2022 2023
Fiscal Year Ended 2020 2021 2022 2023 2024
Contractually Required Contributions $ 1,199,415 $ 1,307,218 $ 1,512,085 $ 1,624,178 $ 1,637,024 Contributions in Relation to
Contractually Required Contributions 1,199,415 1,307,218 1,512,085 1,624,178 1,637,024 Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 2,371,092 $ 2,300,530 $ 2,632,190 $ 2,734,960 $ 2,716,661 Contributions as a % of Covered Payroll 50.58% 56.82% 57.45% 59.39% 60.26% Notes to Schedule:

Valuation Date: June 30, 2022
Assumptions Used: Entry Age Method used for Actuarial Cost Method Level Percentage of Payroll and Direct Rate Smoothing
Remaining Amortization Period no more than 29 years
Inflation Assumed at 2.30%
Investment Rate of Returns set at 6.8%
The CalPERS discount rate was increased from 7.50% to 7.65% in FY2016, to 7.15% in FY2018, and then decreased to 6.90% in FY2023.

The CalPERS mortality assumptions was adjusted in fiscal year 2023.

The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing morality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report that can be found on the CalPERS website.
197
Item 7 D.

City of City of Capitola
Schedule of Proportionate Share of Net Pension Liability June 30, 2024
(Last Ten Years)
Miscellaneous and Safety Plan
Plan Measurement Date 2014 2015 2016 2017 2018
Fiscal Year Ended 2015 2016 2017 2018 2019
Proportion of Net Pension
Liability (Safety and Misc) 0.19640% 0.22276% 0.22460% 0.22542% 0.23208% Proportion of Net Pension
Liability (Misc Plan Only) 0.23223% 0.27813% 0.27444% 0.27777% 0.28641% Proportionate Share of
Net Pension Liability $ 12,221,177 $ 15,290,341 $ 19,435,188 $ 22,355,266 $ 22,363,591 Covered Payroll $ 5,267,910 $ 5,430,835 $ 5,553,774 $ 5,772,571 $ 5,921,935 Proportionate Share of NPL
as a % of Covered Payroll 231.99% 281.55% 349.95% 387.27% 377.64% Plan's Fiduciary Net Position
as a % of the TPL 79.99% 74.72% 72.55% 71.66% 72.50%
Miscellaneous and Safety Plan
Plan Measurement Date 2019 2020 2021 2022 2023
Fiscal Year Ended 2020 2021 2022 2023 2024
Proportion of Net Pension
Liability (Safety and Misc) 0.23566% 0.23999% 0.31633% 0.26021% 0.25777% Proportion of Net Pension
Liability (Misc Plan Only) 0.29038% 0.29469% 0.42981% 0.30483% 0.30338% Proportionate Share of
Net Pension Liability $ 24,148,410 $ 26,111,558 $ 17,108,187 $ 30,056,602 $ 32,157,510 Covered Payroll $ 5,885,801 $ 6,170,485 $ 5,733,268 $ 6,289,012 $ 6,553,103 Proportionate Share of NPL
as a % of Covered Payroll 410.28% 423.17% 298.40% 477.92% 490.72% Plan's Fiduciary Net Position
as a % of the TPL 71.85% 70.61% 81.35% 69.15% 68.81%
The CalPERS discount rate was increased from 7.50% to 7.65% in FY2016, to 7.15% in FY2018, and then decreased to 6.90% in FY2023.

The CalPERS mortality assumptions was adjusted in fiscal year 2023. 198
Item 7 D.

City of City of Capitola
Schedule of OPEB Contributions
June 30, 2024
(Last Ten Years)
Fiscal Year Ended 2018 2019 2020 2021 2022 2023 2024
Actuarially determined contribution (ADC) $ 87,697 $ 88,801 $ 82,353 $ 155,509 $ 99,732 $ 169,270 $ 158,573 Less: actual contribution in relation to ADC (86,090) (88,801) (82,353) (155,509) (99,732) (169,270) (158,573) Contribution deficiency (excess) $ 1,607 $ - $ - $ - $ - $ - $ - Covered employee payroll $ 5,361,855 $ 5,567,350 $ 5,757,120 $ 6,145,766 $ 6,286,092 $ 7,344,221 $ 7,943,922 Contrib. as a % of covered employee payroll 1.61% 1.60% 1.43% 2.53% 1.59% 2.30% 2.00% Notes to Schedule:

Assumptions and Methods
Valuation Date:

Measurement Date:

Actuarial Cost Method: Entry-Age, Level Percent of Pay
Amortization Period:

Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Healthcare Trend Rate
Investment Rate of Return
Mortality
Other Notes
Discount rates decreased from 7% to 6.25% in FY24.

GASB 75 requires a schedule of contributions for the last ten fiscal years, or for as many years as are available if less than ten years are available. GASB 75 was adopted as of June 30, 2018.
2000-2019 CalPERS Experience Study

5.50%

6.25%

2.50%

2.75%
June 30, 2023
June 30, 2023
20 years

6.25%
199
Item 7 D.

City of City of Capitola
Schedule of Changes in Net OPEB Liability and Related Ratios June 30, 2024
(Last Ten Years)
Measurement Date 2017 2018 2019 2020 2021 2022 2023
Fiscal Year Ended 2018 2019 2020 2021 2022 2023 2024
Total OPEB liability
Service cost $ 26,537 $ 27,267 $ 32,631 $ 113,292 $ 104,614 $ 109,131 $ 97,501 Interest 51,739 57,232 62,516 140,891 151,868 158,499 169,676 Diff. between expected/actual experience - - (203,258) - (168,232) - (510,333) Changes of assumptions - - 1,202,217 - 94,950 - 164,493 Benefit payments (26,632) (27,697) (28,801) (82,353) (95,259) (90,636) (102,222) Net change in Total OPEB Liability 51,644 56,802 1,065,305 171,830 87,941 176,994 (180,885) Total OPEB Liability - beginning 766,166 817,810 874,612 1,939,917 2,111,747 2,199,688 2,376,682 Total OPEB Liability - ending 817,810 874,612 1,939,917 2,111,747 2,199,688 2,376,682 2,195,797 Plan fiduciary net position
Net investment income 15,205 16,868 17,834 12,995 116,763 (74,613) 36,040 Employer contributions 81,540 87,697 88,801 82,353 155,509 150,886 169,270 Benefit payments (26,632) (27,697) (28,801) (82,353) (95,259) (90,636) (102,222) Administrative expense (127) (397) - (180) (164) (141) (158) Other - 31 - - - - -
Net change in plan fiduciary net position 69,986 76,502 77,834 12,815 176,849 (14,504) 102,930 Plan fiduciary net position - beginning 143,387 213,373 289,875 367,709 380,524 557,373 542,869 Plan fiduciary net position - ending 213,373 289,875 367,709 380,524 557,373 542,869 645,799 Net OPEB liability (asset) $ 604,437 584,737 1,572,208 1,731,223 1,642,315 1,833,813 1,549,998 Plan fiduciary net position as a %
of the total OPEB liability 26.09% 33.14% 18.95% 18.02% 25.34% 22.84% 29.41% Covered Employee Payroll $ 5,787,564 $ 5,361,855 $ 5,567,350 $ 5,757,120 $ 6,145,766 $ 6,286,092 $ 7,344,221 NOL as a % of covered employee payroll 10.44% 10.91% 28.24% 30.07% 26.72% 29.17% 21.11% TOL as a % of covered employee payroll 14.13% 16.31% 34.84% 36.68% 35.79% 37.81% 29.90% Other Notes
GASB 75 requires a schedule of contributions for the last ten fiscal years, or for as many years as are available if less than ten years are available. GASB 75 was adopted as of June 30, 2018. 200
Item 7 D.

SUPPLEMENTARY INFORMATION
201
Item 7 D.

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202
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual (GAAP Basis)
Capital Projects Fund
For the Year Ended June 30, 2024
Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Intergovernmental $ 6,693,700 3,500,000 $ 5,112,589 $ (1,581,111) $ Other revenue 1,227,000 1,227,000 225,695 (1,001,305)
Total Revenues 4,727,000 7,920,700 5,338,284 (2,582,416)

EXPENDITURES
Current:

General government - (6,774) 22,058 (28,832)
Capital outlay 12,686,300 11,596,468 14,190,597 (2,594,129) Total Expenditures 12,686,300 11,589,694 14,212,655 (2,622,961) Excess (Deficiency) of Revenues over Expenditures (7,959,300) (3,668,994) (8,874,371) (5,205,377)

OTHER FINANCING SOURCES (USES)
Transfers in 2,450,000 2,450,000 2,700,000 250,000
Transfers out - - - -
Total Other Financing Sources (Uses) 2,450,000 2,450,000 2,700,000 250,000 Net Change in Fund Balance (1,218,994) (5,509,300) (6,174,371) (4,955,377) Fund Balance Beginning 5,842,965 5,842,965 5,842,965 -
Prior Period Adjustments (441,653) (441,653) (441,653) - Fund Balance Beginning, as Adjusted 5,401,312 5,401,312 5,401,312 - Fund Balance Ending $ (107,988) $ 4,182,318 $ (773,059) $ (4,955,377) 203
Item 7 D.

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204
Item 7 D.

NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects.

Supplemental Law Enforcement Fund
This fund accounts for the receipt and expenditure of Supplemental Law Enforcement revenues provided by the State of California, including the COPS grant to provide funding for Community Oriented Policing & Problem Solving (COPPS) programs.

Restricted Transient Occupancy Tax (TOT) Fund
This fund accounts for the Measure J 12% transient occupancy tax which is restricted to 0.4% for local business groups and 0.35% for early childhood and youth programming.

Senate Bill 1 (SB1) Road Rehabilitation and Maintenance Fund This fund accounts for receipts and expenditures received from the passage of Senate Bill 1 - Road Repair and Accountability Act of 2017.

Gas Tax Fund
This fund accounts for receipts and expenditures of gasoline tax revenues as provided by State law.

Wharf Fund
In accordance with the State law and contractual commitments, this fund accounts for wharf operating revenues and expenditures.

Public Art Fee Fund
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 Fund
This fund accounts for 16% of parking meter revenue from the village area (Parking Meter Zone A1). The fund was established to fund parking improvement projects throughout the village.

Technology Fees Fund
This fund accounts for revenues received from technology fees to be used for new permit processing program.

PEG Cable TV Access Fee Fund
This fund accounts for Public Education and Government (PEG) Cable TV access fees.

Capitola Village and Wharf BIA Fund
This fund accounts for the receipt and expenditure of assessments for the Business Improvement Area (BIA).

Community Development Block Grants (CDBG) Fund
This fund accounts for grant revenue applied for and received from the Federal Department of Housing and Urban Development (HUD) through the California Small Cities Grant Program administered by California Department of Housing and Community Development (HCD) to address local community development needs.

CDBG Program Income Fund
This fund accounts for housing loan principal and interest repayments for the Community Development Block Grant (CDBG) Program.
205
Item 7 D.

NONMAJOR GOVERNMENTAL FUNDS
Library Fund
This fund accounts for revenues received for project enhancements related to the new Capitola Branch Library opened in June 2021.

Affordable Housing Fund
This fund accounts for a flexible local source of funding for the creation of new affordable housing, rehabilitation of existing affording 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.

Permanent Local Housing Allocation Fund
This fund accounts for Senate Bill 2 (SB 2) recording fees on real estate documents that 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 the community.

Debt Service Fund
Beach and Village Lot II Debt Financing Fund
This fund accounts for the debt proceeds and the corresponding expenditures for the Beach and Village Lot II project. This fund is also used for the accumulation of resources for, and the payment of, long-term debt principal, interest, and related costs of the long-term debt issued by the City.

Pacific Cove Debt Financing Fund
This fund accounts for the debt proceeds and the corresponding expenditures for the Pacific Cove Mobile Home Park Relocation Plan. This fund is also used for the accumulation of resources for, and the payment of, long-term debt principal, interest, and related costs of the long-term debt issued by the City. 206
Item 7 D.

City of Capitola
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
Restricted SB1
Supplemental Transient Road
Law Occupancy Rehabilitation Gas
Enforcement Tax and Maintenance Tax Wharf
Fund Fund Fund Fund Fund
ASSETS
Cash and investments $ 175,016 $ 72,160 $ 507,023 $ 247,595 $ 123,459 Accounts receivable - - - - -
Interest receivable 2,266 811 5,594 23,267 -
Due from other governments - - 20,510 2,750 1,408
Loans receivable - - - - -
Total assets $ 177,282 $ 72,971 $ 533,127 $ 273,612 $ 124,867

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable $ 2,504 $ 9,755 $ - $ 12,039 $ -
Deposits payable - - - - 78
Due to other funds - - - - -
Total liabilities 2,504 9,755 - 12,039 78
Fund Balances:

Restricted:

Public safety 174,778 - - - -
Transportation - - 533,127 261,573 -
Community development - 63,216 - - -
Culture and recreation - - - - 124,789
Assigned:

Debt service - - - - -
Unassigned - - - - -
Total fund balances 174,778 63,216 533,127 261,573 124,789 Total liabilities and fund balances $ 177,282 $ 72,971 $ 533,127 $ 273,612 $ 124,867 Cont'd
Special Revenue Funds
207
Item 7 D.

City of Capitola
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
ASSETS
Cash and investments
Accounts receivable
Interest receivable
Due from other governments
Loans receivable
Total assets

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable
Deposits payable
Due to other funds
Total liabilities
Fund Balances:

Restricted:

Public safety
Transportation
Community development
Culture and recreation
Assigned:

Debt service
Unassigned
Total fund balances
Total liabilities and fund balances
Public PEG
Art Parking Technology Cable TV
Fee Reserve Fees Access Fee
Fund Fund Fund Fund
$ 158,505 $ 737 $ 112,038 $ 54,450
- - - -
- - - 602
- - - 2,479
- - - -
$ 158,505 $ 737 $ 112,038 $ 57,531
$ - $ - $ - $ -
- - - -
- - - -
- - - -
- - - -
- 737 - -
- - 112,038 -
158,505 - - 57,531
- - - -
- - - -
158,505 737 112,038 57,531
$ 158,505 $ 737 $ 112,038 $ 57,531
Cont'd
Special Revenue Funds
208
Item 7 D.

City of Capitola
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
ASSETS
Cash and investments
Accounts receivable
Interest receivable
Due from other governments
Loans receivable
Total assets

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable
Deposits payable
Due to other funds
Total liabilities
Fund Balances:

Restricted:

Public safety
Transportation
Community development
Culture and recreation
Assigned:

Debt service
Unassigned
Total fund balances
Total liabilities and fund balances
Capitola CDBG
Village and Program Affordable
Wharf BIA CDBG Income Library Housing
Fund Fund Fund Fund Fund
$ - 28,504 $ $ 47,165 $ 52,121 $ 271,905
3,634 - - - -
347 - 534 590 5,218
- - - - -
- - 407,257 - -
$ 32,485 $ - $ 454,956 $ 52,711 $ 277,123
$ - $ 70,712 $ - $ - $ -
- - - - -
- 79,229 - - -
- 149,941 - - -
- - - - -
- - - - -
32,485 - 454,956 52,711 277,123
- - - - -
- - - - -
- (149,941) - - -
32,485 (149,941) 454,956 52,711 277,123
$ 32,485 $ - $ 454,956 $ 52,711 $ 277,123
Cont'd
Special Revenue Funds
209
Item 7 D.

City of Capitola
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
ASSETS
Cash and investments
Accounts receivable
Interest receivable
Due from other governments
Loans receivable
Total assets

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable
Deposits payable
Due to other funds
Total liabilities
Fund Balances:

Restricted:

Public safety
Transportation
Community development
Culture and recreation
Assigned:

Debt service
Unassigned
Total fund balances
Total liabilities and fund balances
Special Revenue
Funds
Permanent Pacific Beach &
Local Cove Village Lot II Total
Housing Debt Debt Nonmajor
Allocation Financing Financing Governmental
Fund Fund Fund Funds
$ 99,836 $ 75,277 $ 12 $ 2,025,803
- - - 3,634
- - - 39,229
- - - 27,147
- - - 407,257
$ 99,836 $ 75,277 $ 12 $ 2,503,070
$ - $ - $ - $ 95,010
- - - 78
- - - 79,229
- - - 174,317
- - - 174,778
- - - 795,437
99,836 - - 1,092,365
- - - 340,825
- 75,277 12 75,289
- - - (149,941)
99,836 75,277 12 2,328,753
$ 99,836 $ 75,277 $ 12 $ 2,503,070
Concluded
Debt Service Funds
210
Item 7 D.

City of Capitola
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2024
Restricted SB1
Supplemental Transient Road
Law Occupancy Rehabilitation Gas
Enforcement Tax and Maintenance Tax Wharf
Fund Fund Fund Fund Fund

REVENUES
Taxes $ - $ 101,092 $ - $ - $ -
Licenses and permits - - - - -
Intergovernmental 100,000 - 249,261 270,231 -
Charges for services - - - - -
Use of money and property 3,392 7,526 16,517 10,618 5,373 Other revenue - - - - -
Total Revenues 107,526 104,484 265,778 280,849 5,373

EXPENDITURES
Current:

General government 42,018 99,741 - 275,742 -
Culture and recreation - - - - 46,778
Capital outlay - 42,343 21,801 - -
Debt service:

Principal - - - - -
Interest and fiscal charges - - - - -
Total Expenditures 99,741 84,361 21,801 275,742 46,778
Excess (Deficiency) of Revenues over Expenditures 4,743 23,165 243,977 5,107 (41,405)

OTHER FINANCING SOURCES (USES)
Transfers in - - - - -
Transfers out - - - - -
Total Other Financing Sources (Uses) - - - - -
Net Change in Fund Balances 23,165 4,743 243,977 5,107 (41,405) Fund Balances Beginning 151,613 58,473 289,150 256,466 166,194 Prior Period Adjustments - - - - -
Fund Balances Beginning, as Adjusted 151,613 58,473 289,150 256,466 166,194 Fund Balances Ending $ 174,778 $ 63,216 $ 533,127 $ 261,573 $ 124,789 Cont'd
Special Revenue Funds
211
Item 7 D.

City of Capitola
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Taxes
Licenses and permits
Intergovernmental
Charges for services
Use of money and property
Other revenue
Total Revenues

EXPENDITURES
Current:

General government
Culture and recreation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances Beginning
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Public PEG
Art Parking Technology Cable TV
Fee Reserve Fees Access Fee
Fund Fund Fund Fund
$ - - $ - $ - $
- - - 10,453
- - - -
- - 18,726 -
- - - 1,998
- - - -
- - 18,726 12,451
- 7,731 - -
- - - -
- - - -
- - - -
- - - -
- 7,731 - -
- (7,731) 18,726 12,451
- - - -
- - - -
- - - -
- (7,731) 18,726 12,451
737 - 93,312 45,080
- 166,236 - -
166,236 737 93,312 45,080
$ 158,505 $ 737 $ 112,038 $ 57,531
Cont'd
Special Revenue Funds
212
Item 7 D.

City of Capitola
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Taxes
Licenses and permits
Intergovernmental
Charges for services
Use of money and property
Other revenue
Total Revenues

EXPENDITURES
Current:

General government
Culture and recreation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances Beginning
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Capitola CDBG
Village and Program Affordable
Wharf BIA CDBG Income Library Housing
Fund Fund Fund Fund Fund
$ 36,761 $ - $ - $ - $ -
- - - - -
- 160,561 - - -
53,854 - - - 78,188
1,934 - 1,906 2,103 17,032
41,704 - - - 567
134,253 160,561 1,906 2,103 95,787
146,011 239,612 - - -
- - - - -
- - - - -
- - - - -
- - - - -
146,011 239,612 - - -
(11,758) (79,051) 1,906 2,103 95,787
- - - - -
- - - - (201,000)
- - - - (201,000)
(11,758) (79,051) 1,906 2,103 (105,213)
44,243 (70,890) 443,439 - 379,242
- - 9,611 50,608 3,094
44,243 (70,890) 453,050 50,608 382,336
$ 32,485 $ (149,941) $ 454,956 $ 52,711 $ 277,123
Cont'd
Special Revenue Funds
213
Item 7 D.

City of Capitola
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Taxes
Licenses and permits
Intergovernmental
Charges for services
Use of money and property
Other revenue
Total Revenues

EXPENDITURES
Current:

General government
Culture and recreation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances Beginning
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Special Revenue
Funds
Permanent Pacific Beach &
Local Cove Village Lot II Total
Housing Debt Debt Nonmajor
Allocation Financing Financing Governmental
Fund Fund Fund Funds
$ - - $ - $ $ 137,853
- - - 10,453
- 105,092 - 885,145
- - - 150,768
- - - 68,399
- - - 42,271
- 105,092 - 1,294,889
5,256 - - 816,111
- - - 46,778
- - - 64,144
- 642,663 67,302 709,965
- 7,277 20,486 27,763
5,256 649,940 87,788 1,664,761
99,836 (649,940) (87,788) (369,872)
- 670,000 87,788 757,788
- - - (201,000)
- 670,000 87,788 556,788
99,836 20,060 - 186,916
- 55,217 12 1,912,288
- - - 229,549
- 55,217 12 2,141,837
$ 99,836 $ 75,277 $ 12 $ 2,328,753
Concluded
Debt Service Funds
214
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Property taxes $ -$ - -$ -$
Licenses and permits - - - -
Intergovernmental 100,000 100,000 100,000 -
Charges for Services - - - -
Use of money and property 500 500 7,526 7,026
Other Revenue - - - -
Total Revenues 100,500 100,500 107,526 7,026

EXPENDITURES
Current:

General government 36,000 36,000 42,018 (6,018)
Community development - - - -
Culture and recreation - - - -
Transportation - - - -
Capital outlay 65,000 33,000 42,343 (9,343)
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Total Expenditures 101,000 69,000 84,361 (15,361)
Excess (Deficiency) of Revenues over Expenditures (500) 31,500 23,165 (8,335)

OTHER FINANCING SOURCES (USES)
Transfers in - - - -
Transfers out (120,000) (120,000) 120,000 -
Total Other Financing Sources (Uses) (120,000) (120,000) 120,000 - Net Change in Fund Balances (120,500) (88,500) 23,165 111,665 Prior Period Adjustments - - - -
Fund Balances Beginning, as Adjusted 151,613 151,613 151,613 - Fund Balances Ending $ 31,113 $ 63,113 $ 174,778 $ 111,665 Cont'd
Supplemental Law Enforcement Fund
Budgeted Amounts
215
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ - - $ 101,092 $ 101,092 $
- - - -
- - - -
- - - -
- - 3,392 3,392
- - - -
- 104,484 - 104,484
151,667 151,667 99,741 51,926
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
151,667 151,667 99,741 51,926
(151,667) (151,667) 4,743 156,410
101,333 101,333 (101,333) -
- - - -
101,333 101,333 (101,333) -
(50,334) (50,334) 4,743 55,077
- - - -
58,473 58,473 58,473 -
$ 8,139 $ 8,139 $ 63,216 $ 55,077
Cont'd
Budgeted Amounts
Restricted Transient Occupancy Tax Fund
216
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ - -$ $ - -$
- - - -
248,500 248,500 249,261 761
- - - -
- 16,517 - 16,517
- - - -
248,500 248,500 265,778 17,278
- - - -
- - - -
- - - -
- - - -
243,500 243,500 21,801 221,699

- - - -
- - - -
243,500 243,500 21,801 221,699
5,000 5,000 243,977 238,977
- - - -
- - - -
- - - -
5,000 5,000 243,977 238,977
- - - -
289,150 289,150 289,150 -
$ 294,150 294,150$ $ 533,127 $ 238,977
Cont'd
Budgeted Amounts
Road Rehabilitation and Maintenance Fund
217
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ - - $ - $ -$
- - - -
283,381 283,381 270,231 (13,150)
- - - -
1,500 1,500 10,618 9,118
- - - -
284,881 284,881 280,849 (4,032)
283,000 258,609 275,742 (17,133)
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
283,000 258,609 275,742 (17,133)
1,881 26,272 5,107 (21,165)
- - - -
- - - -
- - - -
1,881 26,272 5,107 (21,165)
- - - -
256,466 256,466 256,466 -
$ 258,347 $ 282,738 $ 261,573 $ (21,165)
Cont'd
Budgeted Amounts
Gas Tax Fund
218
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
- - - -
- - - -
- - - -
- - 5,373 5,373
- - - -
- - 5,373 5,373
- - - -
- - - -
- 46,778 - (46,778)
- - - -
- - - -

- - - -
- - - -
- 46,778 - (46,778)
- (41,405) - (41,405)
- - - -
- - - -
- - - -
- - (41,405) (41,405)
- - - -
166,194 166,194 166,194 -
$ 166,194 $ 166,194 $ 124,789 $ (41,405)
Cont'd
Budgeted Amounts
Wharf Fund
219
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
- - - -
- - - -
5,000 5,000 - (5,000)
- - - -
- - - -
5,000 5,000 - (5,000)
75,500 75,500 7,731 67,769
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
75,500 75,500 7,731 67,769
(70,500) (70,500) (7,731) 62,769
- - - -
- - - -
- - - -
(70,500) (70,500) (7,731) 62,769
- 166,236 - -
- - - -
$ (70,500) $ (70,500) $ 158,505 $ 229,005
Cont'd
Budgeted Amounts
Public Art Fee Fund
220
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
737 737 737 -
$ 737 $ 737 $ 737 -$
Cont'd
Budgeted Amounts
Parking Reserve Fund
221
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
- - - -
- - - -
11,500 11,500 18,726 7,226
- - - -
- - - -
11,500 11,500 18,726 7,226
- - - -
9,750 9,750 - 9,750
- - - -
3,500 3,500 - 3,500
- - - -

- - - -
- - - -
13,250 13,250 13,250 -
(1,750) (1,750) 18,726 20,476
- - - -
- - - -
- - - -
(1,750) (1,750) 18,726 20,476
- - - -
93,312 93,312 93,312 -
$ 91,562 $ 91,562 $ 112,038 $ 20,476
Cont'd
Budgeted Amounts
Technology Fees Fund
222
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
16,000 16,000 10,453 (5,547)
- - - -
- - - -
- - 1,998 1,998
- - - -
16,000 16,000 12,451 (3,549)
- - - -
- - - -
- - - -
- - - -
15,000 15,000 15,000 -

- - - -
- - - -
15,000 15,000 15,000 -
1,000 1,000 12,451 11,451
- - - -
- - - -
- - - -
1,000 1,000 12,451 11,451
- - - -
45,080 45,080 45,080 -
$ 46,080 $ 46,080 $ 57,531 $ 11,451
Cont'd
Budgeted Amounts
PEG Cable TV Access Fee Fund
223
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ - - $ 36,761 $ 36,761 $
- - - -
- - - -
53,584 53,584 53,854 270
100 100 1,934 1,834
56,500 56,500 41,704 (14,796)
110,184 110,184 134,253 24,069
157,500 157,500 146,011 11,489
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
157,500 157,500 146,011 11,489
(47,316) (47,316) (11,758) 35,558
36,500 36,500 (36,500) -
- - - -
36,500 36,500 (36,500) -
(10,816) (10,816) (11,758) (942)
- - - -
44,243 44,243 44,243 -
$ 33,427 $ 33,427 $ 32,485 $ (942)
Cont'd
Budgeted Amounts
Capitola Village and Wharf BIA Fund
224
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
- - - -
253,335 253,335 160,561 (92,774)
- - - -
- - - -
- - - -
253,335 253,335 160,561 (92,774)
273,335 273,335 239,612 33,723
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
273,335 273,335 239,612 33,723
(20,000) (20,000) (79,051) (59,051)
- - - -
- - - -
- - - -
(20,000) (20,000) (79,051) (59,051)
- - - -
(70,890) (70,890) (70,890) -
$ (90,890) $ (90,890) $ (149,941) $ (59,051)
Cont'd
Budgeted Amounts
CDBG Fund
225
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
- - - -
- - - -
- - - -
250 250 1,906 1,656
- - - -
250 250 1,906 1,656
- 7,500 - 7,500
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- 7,500 - 7,500
250 (7,250) 1,906 9,156
- - - -
- - - -
- - - -
250 (7,250) 1,906 9,156
- - 9,611 -
443,439 443,439 443,439 -
$ 443,689 $ 436,189 $ 454,956 $ 18,767
Cont'd
Budgeted Amounts
CDBG Program Income Fund
226
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
- - - -
- - - -
- - - -
1,500 1,500 2,103 603
- - - -
1,500 1,500 2,103 603
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
1,500 1,500 2,103 603
- - - -
- - - -
- - - -
1,500 1,500 2,103 603
- - 50,608 -
- - - -
$ 1,500 $ 1,500 $ 52,711 $ 51,211
Cont'd
Library Fund
Budgeted Amounts
227
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
- - - -
- - - -
10,000 10,000 78,188 68,188
- 17,032 - 17,032
- - 567 567
10,000 10,000 95,787 85,787
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
10,000 10,000 95,787 85,787
- - - -
(201,000) (201,000) (201,000) -
(201,000) (201,000) (201,000) -
(191,000) (191,000) (105,213) 85,787
- - 3,094 -
379,242 379,242 379,242 -
$ 188,242 $ 188,242 $ 277,123 $ 88,881
Cont'd
Affordable Housing Fund
Budgeted Amounts
228
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
- - - -
481,732 481,732 105,092 (376,640)
- - - -
- - - -
- - - -
481,732 481,732 105,092 (376,640)
256,800 256,800 5,256 251,544
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
256,800 256,800 5,256 251,544
224,932 224,932 99,836 (125,096)
- - - -
- - - -
- - - -
224,932 224,932 99,836 (125,096)
- - - -
- - - -
$ 224,932 $ 224,932 $ 99,836 $ (125,096)
Cont'd
Permanent Local Housing Allocation Fund
229
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

725,000 725,000 642,663 82,337
- - 7,277 (7,277)
725,000 725,000 649,940 75,060
(725,000) (725,000) (649,940) 75,060
670,000 670,000 670,000 -
- - - -
670,000 670,000 670,000 -
(55,000) (55,000) 20,060 75,060
- - - -
55,217 55,217 55,217 -
$ 217 $ 217 $ 75,277 $ 75,060
Cont'd
Pacific Cove Debt Financing Fund
230
Item 7 D.

City of Capitola
Schedule of Revenues, Expenditures, and
Changes in Fund Balances
Budget and Actual (GAAP Basis)
Nonmajor Governmental Funds
For the Year Ended June 30, 2024

REVENUES
Property taxes
Licenses and permits
Intergovernmental
Charges for Services
Use of money and property
Other Revenue
Total Revenues

EXPENDITURES
Current:

General government
Community development
Culture and recreation
Transportation
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Prior Period Adjustments
Fund Balances Beginning, as Adjusted
Fund Balances Ending
Variance with
Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)
$ -$ - -$ -$
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

67,302 67,302 67,302 -
20,486 20,486 20,486 -
87,788 87,788 87,788 -
(87,788) (87,788) (87,788) -
87,788 87,788 87,788 -
- - - -
87,788 87,788 87,788 -
- - - -
- - - -
12 12 12 -
$ 12 $ 12 $ 12 -$
Concluded
Beach & Village Lot II Debt Financing Fund
231
Item 7 D.

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232
Item 7 D.

STATISTICAL SECTION
233
Item 7 D.

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234
Item 7 D.

STATISTICAL SECTION
This part of the City’s Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. In contrast to the financial section, the statistical section information is not subject to independent audit.

Financial Trends
These schedules contain trend information to help the reader understand how the City’s financial performance and well being have changed over time:

1. Net Position by Component

2. Changes in Net Position

3. Fund Balances of Governmental Funds

4. Changes in Fund Balance of Governmental Funds

5. General Revenues by Source
Revenue Capacity
These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax:

5. Net Taxable Assessed Value History

6. Assessed Value of Taxable Property

7. Direct and Overlapping Property Tax Rates

8. Top Ten Property Taxpayers

9. Property Tax Levies and Collections

10. Top 25 Sales Tax Taxpayers
Debt Capacity
These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future:

11. Ratios of Outstanding Debt by Type

12. Ratios of General Bonded Debt Outstanding

13. Direct and Overlapping Debt

14. Legal Debt Margin Information
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place:

15. Demographic and Economic Statistics

16. Principal Employers
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs:

17. Full-Time Equivalent Employees by Function

18. Operating Indicators by Function

19. Capital Asset Statistics by Function
Sources
Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports for the relevant year.
235
Item 7 D.

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236
Item 7 D.

City of Capitola Table 1
Net Position by Component
Last Ten Fiscal Years
(amounts expressed in thousands)
2015* 2016 2017 2018 2019 2020 2021 2022 2023 2024
Primary Government Activities:

Net Investment in
Capital Assets $ 11,604 $ 13,154 $ 14,457 $ 15,773 $ 18,563 $ 27,367 $ 32,053 $ 33,336 $ 35,468 $ 50,116 Restricted for
Public Safety 101 98 8 10 17 72 99 154 152 175
Transportation 393 113 119 420 630 26 917 1,400 732 1,328 Community Development 6,357 6,599 8,811 11,191 14,105 14,221 10,821 9,995 10,159 10,288 Culture and Recreation 141 143 159 121 146 175 218 219 211 341 Total Restricted 6,992 6,953 9,097 11,742 14,898 14,494 12,055 11,768 11,254 12,132 Unrestricted (9,381) (8,884) (9,883) (11,536) (10,563) (12,887) (10,987) (11,571) (6,156) (17,949) Total Primary Government
Net Position $ 9,215 $ 11,223 $ 13,671 $ 15,979 $ 22,898 $ 28,974 $ 33,121 $ 33,533 $ 40,566 $ 44,299 NOTES: The City of Capitola has no business-type activities; governmental and primary government figures are the same. *FY 2014/15 reflects the first year of the implementation of GASB Statement Nos. 68 and 71, which resulted in a prior period restatement of ($15,436,035) to the Governmental Activities.

Source: City of Capitola Finance Department.
237
Item 7 D.

City of Capitola Table 2
Change in Net Position
Last Ten Fiscal Years
(amounts expressed in thousands)
2015* 2016 2017 2018 2019
EXPENSES:

Primary government activities
General government $ 3,582 $ 3,557 $ 3,975 $ 3,594 $ 3,595 Public safety 6,181 6,211 7,462 6,822 7,037
Community development 809 1,076 1,090 1,057 956
Culture and recreation 974 1,150 1,302 1,228 1,192
Transportation 2,866 3,218 3,212 3,382 3,384
Interest and other charges 217 158 119 77 76
Total primary government expenses 14,629 15,370 17,160 16,160 16,240 PROGRAM REVENUES:

Primary government activities
Charges for services:

General government 1,012 970 911 1,057 1,132
Public safety 806 701 597 601 579
Community development 633 727 637 695 528
Culture and recreation 765 751 640 636 614
Transportation 120 112 116 34 44
Operating grants and contributions 657 400 3,329 1,832 650 Capital grants and contributions 12 511 146 413 5,678
Total primary govt program revenues 4,005 4,172 6,376 5,268 9,225 NET PRIMARY GOVT REV/(EXP) (10,624) (11,198) (10,784) (10,892) (7,015)

GENERAL REVENUES AND OTHER
CHANGES IN NET POSITION:

Primary government activities
Taxes:

Property taxes 2,041 2,194 2,288 2,498 2,630
Franchise taxes 508 524 535 555 545
Sales and use tax 7,330 7,860 7,959 7,688 8,077
Transient occupancy taxes 1,276 1,452 1,458 1,457 1,582 Business license tax 284 298 302 308 308
Cannabis taxes - - - - -
Intergovernmental, unrestricted 265 226 201 223 224
Investment income, unrestricted 119 227 264 237 450
Other general revenues 242 424 225 406 119
Total primary government activities 12,065 13,205 13,232 13,372 13,935 CHANGES IN NET POSITION:

Total primary government activities $ 1,441 $ 2,007 $ 2,448 $ 2,480 $ 6,920 Continued
Source: City of Capitola Finance Department
* Fiscal year 2014-15 reflects the first year of the implementation of GASB Statement Nos. 68 and 71, which resulted in a prior restatment of ($15,436,035) to the Governmental Activities. GASB 75 restatement was refelcted in 2018 for $172,688.

Fiscal Year
238
Item 7 D.

City of Capitola
Change in Net Position
Last Ten Fiscal Years
(amounts expressed in thousands)
EXPENSES:

Primary government activities
General government
Public safety
Community development
Culture and recreation
Transportation
Interest and other charges
Total primary government expenses
PROGRAM REVENUES:

Primary government activities
Charges for services:

General government
Public safety
Community development
Culture and recreation
Transportation
Operating grants and contributions
Capital grants and contributions
Total primary govt program revenues

NET PRIMARY GOVT REV/(EXP)

GENERAL REVENUES AND OTHER
CHANGES IN NET POSITION:

Primary government activities
Taxes:

Property taxes
Franchise taxes
Sales and use tax
Transient occupancy taxes
Business license tax
Cannabis taxes
Intergovernmental, unrestricted
Investment income, unrestricted
Other general revenues
Total primary government activities
CHANGES IN NET POSITION:

Total primary government activities
Source: City of Capitola Finance Department
Table 2
2020 2021 2022 2023 2024
$ 3,876 $ 3,736 $ 6,117 $ 3,443 $ 5,581
7,810 7,237 7,554 5,703 8,450
1,097 979 1,998 635 1,371
1,793 1,107 1,421 2,181 2,984
3,263 3,092 4,222 2,409 4,329
68 67 56 20 13
17,907 16,218 21,368 14,391 22,729
1,022 1,057 1,678 744 983
554 509 509 624 497
619 539 539 901 972
633 274 274 710 862
47 39 39 48 41
501 3,125 2,970 866 859
7,357 1,167 865 1,646 5,952
10,733 6,710 6,874 5,539 10,167
(7,174) (9,508) (14,494) (8,852) (12,562)
2,712 2,794 2,883 3,058 3,201
557 562 635 708 729
7,441 7,705 8,485 8,542 8,222
1,263 1,529 2,171 2,131 2,220
330 292 316 314 324
- - - - 262
233 232 341 307 12
699 335 (129) 549 770
16 204 204 162 361
13,251 13,653 14,906 15,773 16,101
$ 6,077 $ 4,145 $ 412 $ 6,921 $ 3,539
Concluded
Fiscal Year
239
Item 7 D.

City of Capitola Table 3
Fund Balances of Governmental Funds
Last ten years
(amounts expressed in thousands)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

GENERAL FUND
Fund Balance:

Nonspendable $ 618 $ 524 $ 426 $ 58 $ 21 $ - $ - $ - $ - $ - Restricted - 300 300 816 867 917 1,016 904 1,196 1,531
Assigned 1,049 1,262 1,277 1,277 1,344 1,344 1,374 1,374 1,314 2,444 Unassigned 4,338 4,599 5,345 4,603 5,627 5,044 8,923 9,588 8,097 3,042 Total General Fund 6,005 6,685 7,348 6,754 7,859 7,305 11,313 11,866 10,607 7,017

ALL OTHER GOVERNMENT FUNDS
Fund Balance:

Restricted 985 736 834 11,742 14,896 14,493 12,110 11,768 11,223 12,132 Assigned 2,457 2,745 1,927 1,633 2,110 2,603 1,842 4,200 5,898 75 Unassigned (41) (215) (39) (39) (39) (365) (39) (39) (71) (923) Total All Other Govt Funds 3,401 3,266 2,722 13,336 16,967 16,731 13,913 15,929 17,050 11,284 TOTAL $ 9,406 $ 9,951 $ 10,070 $ 20,090 $ 24,826 $ 24,036 $ 25,226 $ 27,795 $ 27,657 $ 18,301 Source: City of Capitola Finance Department.
240
Item 7 D.

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241
Item 7 D.

City of Capitola Table 4
Changes in Fund Balances of Governemtal Funds
Last ten years
(amounts expressed in thousands)
2015 2016 2017 2018 2019
REVENUES:

Taxes $ 11,416 $ 12,250 $ 12,436 $ 12,416 $ 13,097
Licenses & permits 629 671 626 766 663
Fines and forfeitures 671 787 1,475 2,250 6,030
Intergovernmental 757 656 560 558 522
Charges for services 2,078 2,165 1,970 2,007 2,020
Use of money and property 228 324 376 237 450
Other 132 328 114 406 378
Total revenues 15,911 17,181 17,557 18,640 23,160
EXPENSES:

Current:

General government 2,443 2,712 3,153 2,824 2,819
Public safety 5,917 6,134 6,495 6,333 6,552
Community development 823 1,005 976 967 913
Culture and recreation 978 1,039 1,137 1,154 1,130
Transportation 2,577 2,744 2,637 2,852 2,981
Capital outlay 535 2,074 2,113 1,924 3,770
Subtotal 13,273 15,708 16,511 16,054 18,165
Debt service:

Principal retirement 699 764 788 829 182
Interest and agent fees 229 163 139 95 78
Subtotal 928 927 927 924 260
Total expenditures 14,201 16,635 17,438 16,978 18,425
Excess/(deficiency) of revenues over/(under) expenditures 1,710 546 119 1,662 4,735 OTHER FINANCING SOURCES/(USES):

Transfers in 2,091 2,784 1,815 2,865 1,676
Transfers out (2,091) (2,784) (1,815) (2,865) (1,676)
Total other financing sources/(uses) - - - - -
Net change in fund balances 1,710 546 119 1,662 4,735
Prior Period Adjustments - - - - -
Beginning fund balance 7,695 9,405 9,951 10,070 20,091
Ending fund balance $ 9,405 $ 9,951 $ 10,070 $ 11,732 $ 24,826 Debt Service as a percentage of non-capital expenditures Total Expenditures $ 14,201 $ 16,635 $ 17,438 $ 16,978 $ 18,425 Capitalized Portion of Capital Outlay (153) 2,079 2,231 2,063 3,681 Total Non-Capitalized Expenditures 14,354 14,556 15,207 14,915 14,744 Debt service: Principal and Interest 928 927 927 924 260 Debt service as a percentage of noncapital expenditures 6.47% 6.37% 6.10% 6.20% 1.76% Continued
NOTES:

Source: City of Capitola Finance Department
Debt service as a percentage of noncapital expenditures reflects total governmental fund expenditures less the capital outlay shown separately in the Changes in Fund Balances schedule and any expenditures for capitalized assets contained within the functional expenditure categories. The sum of these items is reported in this calculation, as well as appearing as a reconciling item in the reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of the
Governmental Funds to the Statement of Activities.
242
Item 7 D.

City of Capitola
Changes in Fund Balances of Governemtal Funds
Last ten years
(amounts expressed in thousands)
REVENUES:

Taxes
Licenses & permits
Fines and forfeitures
Intergovernmental
Charges for services
Use of money and property
Other
Total revenues
EXPENSES:

Current:

General government
Public safety
Community development
Culture and recreation
Transportation
Capital outlay
Subtotal
Debt service:

Principal retirement
Interest and agent fees
Subtotal
Total expenditures
Excess/(deficiency) of revenues over/(under) expenditures OTHER FINANCING SOURCES/(USES):

Transfers in
Transfers out
Total other financing sources/(uses)
Net change in fund balances
Prior Period Adjustments
Beginning fund balance
Ending fund balance
Debt Service as a percentage of non-capital expenditures Total Expenditures
Capitalized Portion of Capital Outlay
Total Non-Capitalized Expenditures
Debt service: Principal and Interest
Debt service as a percentage of noncapital expenditures Source: City of Capitola Finance Department
Table 4
2020 2021 2022 2023 2024
$ 12,307 $ 13,064 $ 14,757 $ 14,853 $ 14,634
726 679 746 662 768
7,521 3,832 3,093 2,417 425
520 496 589 567 6,581
1,959 1,536 2,020 2,010 2,450
699 335 (129) 548 807
252 422 704 1,700 603
23,984 20,364 21,780 22,757 26,268
2,965 3,021 4,198 4,444 4,447
6,467 6,075 6,995 8,137 7,740
963 859 1,464 1,101 1,272
1,710 1,026 1,202 2,525 2,725
2,714 2,529 2,921 3,470 3,682
9,698 5,410 2,178 2,965 15,327
24,517 18,920 18,958 22,642 35,192
186 187 191 231 710
71 67 62 22 28
257 254 253 253 738
24,774 19,174 19,211 22,895 35,930
(790) 1,190 2,569 (138) (9,662)
1,734 324 4,023 2,622 3,558
(1,734) (324) (4,023) (2,622) (3,558)
- - - - -
(790) 1,190 2,569 (138) (9,662)
- - - - 307
24,826 24,036 25,226 27,795 27,657
$ 24,036 $ 25,226 $ 27,795 $ 27,657 $ 18,301
$ 24,774 $ 19,174 $ 19,211 $ 22,895 $ 35,930
9,535 5,410 2,178 2,965 15,314
15,239 13,764 17,033 19,930 20,616
257 254 253 253 738

1.69% 1.85% 1.49% 1.27% 3.58%
Concluded
NOTES:

Debt service as a percentage of noncapital expenditures reflects total governmental fund expenditures less the capital outlay shown separately in the Changes in Fund Balances schedule and any expenditures for capitalized assets contained within the functional expenditure categories. The sum of these items is reported in this calculation, as well as appearing as a reconciling item in the reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of the
Governmental Funds to the Statement of Activities.
243
Item 7 D.

City of Capitola Table 5
General Revenues By Source
Last Ten Fiscal Years
Fiscal Year
Sales Tax
Revenue (1)
Property
Taxes (2)
Transient
Occupancy
Tax
Franchise
Taxes
Business
Licenses
Investment
Income
Other
Revenue
Total General
Revenues
2015 $ 7,330,443 $ 2,041,248 $ 1,275,716 $ 507,517 $ 284,474 $ 118,770 $ 506,803 $ 12,064,971 2016 7,859,511 2,193,588 1,451,512 524,214 298,020 227,142 650,656 13,204,643 2017 7,959,086 2,288,341 1,457,704 534,513 301,545 264,040 426,525 13,231,754 2018 7,687,959 2,721,299 1,456,899 555,475 308,236 237,383 406,456 13,373,707 2019 8,076,583 2,854,103 1,581,864 545,424 307,930 450,099 119,011 13,935,014 2020 7,440,745 2,945,342 1,262,816 556,708 329,711 699,199 16,383 13,250,904 2021 7,705,348 3,026,024 1,529,015 561,969 291,590 335,472 203,806 13,653,224 2022 8,484,799 3,224,366 2,170,541 634,511 315,604 (128,502) 205,129 14,906,448 2023 8,542,419 3,365,235 2,131,470 708,277 313,993 662,048 162,352 15,885,794 2024 8,221,640 3,200,895 2,219,951 729,485 323,755 770,404 634,706 16,100,836 NOTES:
(1) A 0.25% District Transactions and Use Tax took effect April 1, 2005 and in 2008 was extended through December 2017. An additional 0.25% Permanent Retail Transactions and Use Tax took effect April 1, 2013, bringing the local tax rate to 0.50%. (2) As of 2006, Property Taxes In Lieu of Vehicle License Fees were included as part of Property Tax distributions by the State of California. Dissolution of California Redevelopment Agencies in February 2012 lowered agency property tax receipts by the size of the previous redevelopment tax increment.

Source: City of Capitola Finance Department.

General Revenue By Source
244
Item 7 D.

City of Capitola Table 6
Net Taxable Assessed Value History
Last Ten Fiscal Years
(amounts expressed in thousands)
Fiscal
Year Secured Unsecured
SBE
Nonunitary
Total
Assessed
Value % Change
2015 $ 1,906,637 $ 81,887 $ 84 $ 1,988,608 3.50%
2016 2,026,035 76,862 83 2,102,980 5.75%
2017 2,156,464 77,622 84 2,234,170 6.24%
2018 2,294,174 84,389 84 2,378,647 6.47%
2019 2,412,636 87,922 111 2,500,669 5.13%
2020 2,530,955 81,815 111 2,612,881 4.49%
2021 2,657,657 77,632 111 2,735,400 4.69%
2022 2,785,901 79,332 111 2,865,344 4.75%
2023 2,923,890 72,799 157 2,996,846 4.59%
2024 3,078,003 79,583 157 3,157,743 5.37%
NOTES: California Constitution Article 13A establishes a county assessor "full cash value" property valuation formulated on varying base years and not at current fair market value. As a result, there is not a reasonable basis available for estimating actual value of taxable property for the City of Capitola for comparative purposes.

Source: HdL Companies, Santa Cruz County Assessor 2023-24 Combined Tax Rolls. 245
Item 7 D.

City of Capitola Table 7
Assessed Value of Taxable Property
Last Ten Fiscal Years
(amounts expressed in thousands)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Residential $ 1,413,964 $ 1,515,227 $ 1,590,959 $ 1,681,534 $ 1,782,996 $ 1,878,890 $ 1,981,312 $ 2,093,954 $ 2,225,831 $ 2,356,130 Commercial 379,721 392,427 439,224 476,377 487,098 501,612 523,379 524,820 535,445 555,355 Industrial 14,130 14,437 14,612 19,124 19,557 21,914 22,319 22,545 23,320 22,345 Institutional 14,716 15,134 15,966 15,054 9,927 10,943 9,290 19,436 7,407 7,555 Miscellaneous 6 6 6 267 272 277 283 293 292 297
Recreational 8,844 9,705 9,791 9,996 10,311 10,525 10,592 8,849 9,878 11,766 Vacant 14,934 15,263 16,274 15,393 21,333 19,848 19,308 21,278 22,137 17,490 SBE Nonunitary 84 83 84 84 110 110 111 111 157 157
Cross Reference 60,322 63,836 69,632 76,429 81,138 86,943 91,174 94,726 99,581 107,065 Unsecured 81,887 76,862 77,622 84,389 87,922 81,815 77,632 79,332 72,799 79,583 TOTALS $ 1,988,608 $ 2,102,980 $ 2,234,170 $ 2,378,648 $ 2,500,664 $ 2,612,877 $ 2,735,400 $ 2,865,344 $ 2,996,847 $ 3,157,743 Total Direct
Property Tax Rate 0.0551 0.0546 0.0546 0.0545 0.0545 0.0544 0.0544 0.0537 0.0537 0.0537 NOTES: Exempt values are not included in Total.

In 1978, the voters of the State of California passed Proposition 13, which limited taxes to a total maximum rate of 1%, based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

Source: HdL Companies, Santa Cruz County Assessor 2013-14 and 2022-23 Combined Tax Rolls.

Category
246
Item 7 D.

City of Capitola Table 8
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(Rate per $100 of taxable value)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Basic Levy
(1) 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 Total Direct Property Tax Rate (2) 0.05461 0.05456 0.05452 0.05452 0.05438 0.05441 0.05372 0.05372 0.05372 0.05372 Overlapping Property Tax Rates (3)
Santa Cruz High School 0.02087 0.01961 0.01848 0.04461 0.04272 0.03889 0.03800 0.03706 0.03767 0.03155 Soquel Elementary School 0.02045 0.01846 0.01811 0.04539 0.04251 0.03948 0.04140 0.04123 0.04113 0.03307 Live Oak Sd 2022 Ref 0.05279 0.04600 0.03574 0.01988 0.02117 0.02072 0.02106 0.02116 0.02003 0.02610 Cabrillo College 0.03694 0.03669 0.03260 0.02425 0.02102 0.02117 0.02475 0.02370 0.02405 0.02434 Total Overlapping Property Tax Rate (2) 0.13105 0.12076 0.10493 0.13413 0.12742 0.12026 0.12521 0.12315 0.12288 0.11506 (4) 0.05372 0.05372 0.05372 0.05372 0.05372 0.05372 0.05372 0.05372 0.05372 0.05372 Total Direct Rate (3) 0.05461 0.05456 0.05452 0.05452 0.05438 0.05441 0.05438 0.05434 0.05431 0.05428 Total Direct & Overlapping Rate 1.13105 1.12076 1.10493 1.13413 1.12742 1.12026 1.12521 1.12315 1.12288 1.11506 NOTES:
(1) In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds. (2) Because basic and debt rates vary by tax rate area individual rates cannot be summed. The Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical section information. (3) Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.
(4) City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in tax ration figures.

SOURCE: HdL Companies, Santa Cruz County Assessors Office.

City Direct Property Tax Rates
247
Item 7 D.

City of Capitola Table 9
Top Ten Property Taxpayers
Current Year and Nine Years Ago
(amounts expressed in dollars unless otherwise noted)
Taxpayer
Net Assessed
Valuation Rank
Percent of Total
City Net
Assessed
Valuation
Net Assessed
Valuation Rank
Percent of
Total City Net
Assessed
Valuation
MGP XI Capitola LLC $ 119,575,067 1 3.79% - 0.00%
Drew Auto Property LLC 34,706,070 2 1.10% - 0.00%
Aspromonte Hotels LLC 22,433,239 3 0.71% 17,426,716 4 0.88% Target Corporation 19,572,930 4 0.62% 18,203,941 3 0.92% Loma Vista Estates Owners Assoc. Inc. 17,672,960 5 0.56% - 0.00% George Ow Jr. Trustees 11,583,992 6 0.37% 13,951,688 5 0.70% Brown Ranch Properties 13,145,664 7 0.42% 11,286,826 6 0.57% Blai LP 12,386,557 8 0.39% 10,524,216 7 0.53%
Grandview Capitola 11,220,000 9 0.36% - 0.00%
Melanie Kett Wirtanen Trustee 9,796,360 10 0.31% 8,315,230 8 0.42% Macerich Partnership LP - 45,978,178 1 2.31%
Macerich Capitola Adjacent LP - 22,470,153 2 1.13%
850 Rosedale LLC - 8,106,207 9 0.41%
Macy's West Inc - 7,224,821 10 0.36%
$ 272,092,839 8.62% $ 163,487,976 8.22%
Memo: Gross Assessed Value $ 3,157,742,571 100.00% $ 1,988,607,727 100.00% Source: HdL Companies, Santa Cruz County Assessor 2014-15 and 2023-24 Combined Tax Rolls and the SBE Non Unitary Tax Roll. 2023-24 2014-15
248
Item 7 D.

City of Capitola Table 10
Property Tax Levies and Collections
Last Ten Fiscal Years
(amounts expressed in dollars unless otherwise noted)
Amount
Percent of
Levy
Collections in
Subsequent
Years Amount
Percent of
Levy
2015 $ 1,060,919 $ 1,060,919 100% $ - $ 1,060,919 100%
2016 1,104,034 1,104,034 100% - 1,104,034 100%
2017 1,203,689 1,203,689 100% - 1,203,689 100%
2018 1,331,609 1,331,609 100% - 1,331,609 100%
2019 1,406,900 1,406,900 100% - 1,406,900 100%
2020 1,452,553 1,452,553 100% - 1,452,553 100%
2021 1,420,380 1,420,380 100% - 1,420,380 100%
2022 1,503,589 1,503,589 100% - 1,503,589 100%
2023 1,601,360 1,601,360 100% - 1,601,360 100%
2024 1,674,964 1,674,964 100% - 1,674,964 100%
NOTES: Figures presented include City property taxes and Redevelopment Agency tax increment, as well as amounts collected by the City and Redevelopment Agency that are pass throughs for other agencies, and real and personal property. The figures do not include Property Taxes In Lieu of Vehicle License Fees. In FY 1993-94, Santa Cruz County adopted the Teeter Plan under which the City of Capitola receives its entire tax levy, regardless of delinquencies as long as it qualifies for the Teeter Plan.

Reduction in property taxes levied from 2011 through 2020 reflects the 2/1/2012 State of California dissolution of Redevelopment Agencies and the associated elimination of tax increment received by the City of Capitola.

Fiscal Year Ended
June 30,
Property Taxes
Levied for the
Fiscal Year
Collected within the Fiscal
Year of Levy Total Collections to Date
Source: Santa Cruz County Auditor-Controller, City of Capitola Finance Department. 249
Item 7 D.

City of Capitola Table 11
Top 25 Sales Tax Taxpayers
Listed alphabetically
Business Name Business Category
Ajs Fuel Market Of Capitola Service Stations
BevMo Convenience Stores/Liquor
Capitola Coast Service Stations
Capitola Shell Service Stations
Chevron Service Stations
CVS Pharmacy Drug Stores
Gayles Bakery & Rosticceria Food Stores Non-Grocery
Greentech Renewables Energy/Utilities
Kohls Department Stores
Macy's Department Stores
Nob Hill General Store Grocery Stores
O Neill Surf Shop Sporting Goods/Bike Stores
Outdoor Supply Hardware Building Materials
Pizza My Heart Quick-Service Restaurants
Ross Family Apparel
Santa Cruz Subaru New Motor Vehicle Dealers
Santa Cruz Toyota New Motor Vehicle Dealers
Shadowbrook Fine Dining
Sierra Utility Sales Electrical Equipment
Target Discount Dept Stores
Toyota Lease Trust Auto Lease
Trader Joe's Grocery Stores
Ulta Beauty Specialty Stores
Whole Foods Market Grocery Stores
Zelda's on the Beach Casual Dining
NOTES:

The list is in alphabetical order and is not indicative of relative nor total sales volume.

Source: HdL
June 30, 2024
250
Item 7 D.

City of Capitola Table 11
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(amounts expressed in dollars unless otherwise noted)
Fiscal Year
Ended June 30
General
Obligation
Bonds
Lease
Revenue
Bonds Other debt
Tot. Gov't./
Primary Gov't.

Activities
2015 $ 1,830,000 $ - $ 3,000,243 $ 4,830,243 0.24% 1.27% 476 2016 1,255,000 - 2,811,059 4,066,059 0.19% 1.04% 400
2017 645,000 - 2,632,952 3,277,952 0.15% 0.78% 310
2018 - - 2,449,251 2,449,251 0.10% 0.63% 239
2019 - - 2,267,652 2,267,652 0.09% 0.51% 224
2020 - - 2,081,485 2,081,485 0.08% 0.50% 206
2021 - - 1,894,649 1,894,649 0.07% 0.39% 193
2022 - - 1,703,461 1,703,461 0.06% 0.31% 177
2023 - - 1,472,580 1,472,580 0.05% 0.24% 155
2024 - - 762,615 762,615 0.02% 0.13% 81
Source: City of Capitola Financial Statements.

Government/Total Primary Government Activities
NOTES: The City of Capitola has no business-type activities; governmental and total primary government figures are the same.

Details regarding the City's outstanding debt can be found in the notes to the financial statements.

In July 2007, the City of Capitola issued a $5,040,000 Pension Obligation Bond (POB), which was used to pay off the City's CalPERS unfunded pension liability as of that point in time. Other debt includes tax anticipation notes, county library long term debt, financed purchase, notes payable, and RDA deferred pass throughs. Compensated absences, OPEB liability and net pension liability amounts are no longer included per GASB implementation guidelines.

Debt as a %
of Total
Personal
Income
Debt per
Capita
Debt as a %
of Taxable
Assessed
Property
Value
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City of Capitola Table 12
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
(amounts expressed in dollars unless otherwise noted)
Debt as a %
of Taxable Debt as a %
General Assessed of Total
Fiscal Year Obligation Property Personal Debt per
Ended June 30, Bonds Value Income Capita
2015 1,255,000 0.06% 0.33% 124
2016 645,000 0.03% 0.17% 63
2017 - 0.00% 0.00% -
2018 - 0.00% 0.00% -
2019 - 0.00% 0.00% -
2020 - 0.00% 0.00% -
2021 - 0.00% 0.00% -
2022 - 0.00% 0.00% -
2023 - 0.00% 0.00% -
2024 - 0.00% 0.00% -
NOTES: The City of Capitola has no business-type activities; governmental and total primary government figures are the same. Details regarding the City's outstanding debt can be found in the notes to the financial statements.

In July 2007, the City of Capitola issued a $5,040,000 Pension Obligation Bond (POB), which was used to pay off the City's CaIPERS unfunded pension liability as of that point in time.

Government/Total Primary Government Activities
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City of Capitola Table 13
Direct & Overlapping Debt
Fiscal Year ended June 30, 2024
2023-24 Assessed Valuation $ 3,157,742,571
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable (1) Total Debt Cabrillo Joint Community College District 5.360% $ 91,586,964 $ 4,909,061 Santa Cruz City High School District 11.559% 134,354,446 15,530,030 Live Oak School District 5.836% 7,534,000 439,684
Soquel Union School District 39.161% 44,554,768 17,448,093 Santa Cruz Libraries Facilities Community Facilities District 5.979% 35,785,000 2,139,585 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $ 313,815,178 $ 40,466,454 DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Overlapping General Fund Debt:

Santa Cruz County General Fund Obligations 5.405% $ 167,498,341 $ 9,053,285 Santa Cruz County Office of Education Certificates of Participation 5.405% 6,612,042 357,381 Santa Cruz City High School District Certificates of Participation 11.559% 664,349 76,792 Live Oak School District Certificates of Participation 5.836% 13,558,483 791,273 Soquel Union School District Certificates of Participation 39.161% 4,556,794 1,784,486 Santa Cruz City Schools Certificates of Participation 11.559% 440,000 50,860 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $ 193,330,009 $ 12,114,077 TOTAL CITY'S DIRECT DEBT $ 762,615
TOTAL OVERLAPPING DEBT $ 51,817,916
COMBINED TOTAL DEBT $ 52,580,531 (2)
RATIOS TO 2021-22 ASSESSED VALUATION:

Total Direct and Overlapping Tax and Assessment Debt 1.28% Total Direct Debt 0.02%
Combined Total Debt 1.67%
Source: MuniServices, LLC, City of Capitola Finance Department (1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value. (2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and non-bonded financing obligations. Qualified Zone Academy Bonds are included based on principal due at maturity.

City's Share of
Debt
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Item 7 D.

City of Capitola Table 14
Legal Debt Margin
Last Ten Fiscal Years
(amounts expressed in thousands)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Assessed Valuation $ 1,988,608 $ 2,102,980 $ 2,234,170 $ 2,378,648 $ 2,500,669 $ 2,612,882 $ 2,735,400 $ 2,821,643 $ 2,996,846 $ 3,157,743 RDA Base Valuation 256,500 264,195 272,121 280,284 288,693 297,354 306,274 315,462 324,926 334,674 Adj. assessed valuation 1,732,108 1,838,785 1,962,049 2,098,364 2,211,976 2,315,528 2,429,126 2,506,181 2,671,920 2,823,069 Debt limit percentage 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% Debt limit 259,816 275,818 294,307 314,755 331,796 347,329 364,369 375,927 400,788 423,460 Total net applicable debt
Gen. obligation bonds 1,830 1,255 645 - - - - - - -
Legal debt margin $ 257,986 $ 274,563 $ 293,662 $ 314,755 $ 331,796 $ 347,329 $ 364,369 $ 375,927 $ 400,788 $ 423,460 Ratio of Total Net Applicable
Debt to Debt Limit 0.71% 0.46% 0.22% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Source: Santa Cruz County Auditor-Controller, Santa Cruz County Assessor, City of Capitola Finance Department.

NOTES: The bonded indebtedness of the City may not in the aggregate exceed the sum of fifteen (15%) of the total assessed valuation of property within the City, exclusive of any indebtedness that has been or may hereafter be incurred for the purposes of acquiring, constructing, extending, or maintaining municipally owned assets for which purposes a further indebtedness may be incurred by the issuance of bonds, subject only to the provisions of the City of Capitola bylaws and the State Constitution. 254
Item 7 D.

City of Capitola Table 15
Demographic and Economic Statistics
Last Ten Fiscal Years
Calendar Year Population
Total Personal
Income (In
Thousands)
Per Capita
Personal
Income Median Age
Unemployment
Rate
2015 10,150 $ 381,027 $ 37,540 43.3 6.0%
2016 10,162 390,369 38,415 42.8 5.5%
2017 10,563 421,494 39,903 42.6 3.3%
2018 10,240 388,326 37,922 42.0 2.2%
2019 10,108 440,760 43,605 42.7 1.4%
2020 10,091 419,398 41,562 42.2 2.1%
2021 9,794 484,927 49,513 45.3 1.8%
2022 9,625 548,976 57,036 47.3 2.3%
2023 9,497 622,725 65,571 48.9 2.8%
2024 9,456 593,534 62,768 46.3 2.5%
Sources: HdL Companies, California State Department of Finance, California Employment Development Department, ESRI, U. S. Census Bureau, American Community Survey.
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Item 7 D.

City of Capitola Table 16
Principal Employers - Top Ten
Current year and nine years ago
Employer Ranking
Number of
Employees
% of Total
Employment Ranking
Number of
Employees
% of Total
Employment
Subaru, Toyota of Santa Cruz 1 200 3.92% 2 182 3.25%
Soquel Union Elementary School District 2 182 3.57% 1 200 3.57% Culinary Enterprises Inc DBA Shadowbrook Restaurant 3 168 3.29% 7 130 2.32% Target Store* 4 165 3.24% 5 157 2.80%
Gayle's Bakery & Rosticceria 5 153 3.00% 4 176 3.14%
Trader Joe's* 6 140 2.75% 10 93 1.66%
City of Capitola* 7 133 2.61%
Pacific Coast Manor* 8 128 2.51% 107 1.91%
Whole Foods Market 9 110 2.16% 8 140 2.50%
New Leaf Community Markets* 10 95 1.86%
Macy's 3 180 3.21%
Kohl's 9 95 1.70%
Total Top Ten Employers 1,474 28.90% 1,460 26.07%
Total Labor Force 5,100 100.00% 5,600 100.00%
*Includes full-time and part-time employees.

Source: MuniServices, LLC / Avenu Insights & Analytics
Source: City of Capitola Publication, FY2015 Annual Comprehensive Financial Statement Report 2024 2015
256
Item 7 D.

City of Capitola Table 17
Full-time and Part-time City Employees by Function
Last Ten Fiscal Years
Function 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 General government
City Manager 7.65 7.65 6.50 6.50 6.00 7.50 5.50 5.50 7.00 7.00 Finance 4.50 4.50 4.50 3.75 3.75 3.75 2.75 3.00 3.00 4.00 City Attorney 1.00 1.00 1.00 1.00 1.00 - - - - -

13.15 13.15 12.00 11.25 10.75 11.25 8.25 8.50 10.00 11.00 Police
Chief, Captain, Sgts. 6.00 6.00 6.00 6.00 7.00 7.00 7.00 7.00 7.00 7.00 Officers 15.00 16.00 16.00 16.00 15.00 15.00 14.00 15.00 15.00 15.00 CSOs 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00
Parking Enforcement 3.00 3.00 3.00 3.00 2.00 2.00 2.00 2.00 3.00 3.00 Administrative 4.65 4.65 4.50 4.50 4.50 4.50 4.50 4.00 4.00 4.00

30.65 31.65 31.50 31.50 30.50 30.50 29.50 30.00 31.00 31.00 Public Works
Streets 9.00 9.00 11.00 12.00 11.50 10.00 10.00 10.00 11.00 12.00 Parks 4.00 4.00 4.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Fleet Maintenance 1.50 1.25 1.00 1.00 1.50 2.00 1.00 1.00 1.00 1.00

14.50 14.25 16.00 16.00 16.00 15.00 14.00 14.00 15.00 16.00 Recreation
Supervisor 2.00 2.00 2.50 2.50 2.50 1.00 1.00 1.00 1.00 1.00 Other - full year 2.25 2.75 1.25 1.25 1.25 4.00 4.00 3.50 3.50 4.50

4.25 4.75 3.75 3.75 3.75 5.00 5.00 4.50 4.50 5.50
Community Development 3.00 3.50 3.50 3.50 3.00 3.00 3.00 3.00 3.00 3.00 Building 2.00 2.00 2.00 2.00 3.00 3.00 3.00 2.75 3.00 2.00 Total City Employees 67.55 69.30 68.75 68.00 67.00 67.75 62.75 62.75 66.50 68.50 NOTES: Full time equivalents (FTE); does not include temporary or seasonal employees.

SOURCE: City of Capitola Finance Department.
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Item 7 D.

City of Capitola Table 18
Operating Indicators by Function
Last Ten Fiscal Years (except as noted)
INDICATOR 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Police department
Adult arrests 956 904 939 692 587 503 317 345 424 560
Calls for service (thousands) 18 17 20 19 15 19 15 14 6 13 Public works
Miles paved 26 26 26 26 26 26 26 26 26 26
New construction
Commercial units - 1 2 1 1 - - - - -
Valuation (millions) $ - $ 4 $ 5 $ 2 $ 2 $ - $ - $ - $ - $ - Residential units (1)
3 3 9 6 8 9 9 9 8 8
Valuation (millions) $ 1 $ 1 $ 3 $ 4 $ 3 $ 4 $ 4 $ 4 $ 3 $ 3 Recreation Revenue (thousands)
Classes $ 282 $ 275 $ 260 $ 240 $ 231 $ 214 $ 79 $ 199 $ 225 $ 265 Sports fees 32 19 21 24 23 19 8 26 22 16
Junior Guard 312 328 258 238 244 160 85 268 264 295
Camp Capitola 139 129 100 96 111 100 105 175 150 193
Afterschool - - - - - 24 48 52 68 105
Events - - - - - - - 1 3 1
Net Class Revenue $ 765 $ 751 $ 639 $ 598 $ 609 $ 517 $ 325 $ 721 $ 732 $ 875 Jade St. Rental 7 7 6 8 5 5 - 7 7 11
Net Recreation Rev $ 772 $ 758 $ 645 $ 606 $ 614 $ 522 $ 325 $ 728 $ 739 $ 886 (1) Residential units and associated valuations are total additional, new or substantially new (by code definition) units.

Source: City of Capitola Building, Finance, Police, and Public Works Departments. 258
Item 7 D.

City of Capitola Table 19
Capital Asset Statistics by Function
Last Ten Fiscal Years
Indicator 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Police
Stations 1 1 1 1 1 1 1 1 1 1
Public works
Streets (miles) 26 26 26 26 26 26 26 26 26 26
Streetlights 71 71 71 71 71 71 71 71 71 71
Traffic signals 8 8 8 8 8 8 8 8 8 8
Parks and recreation
Parks 8 8 8 8 8 8 8 8 8 8
Community centers 1 1 1 1 1 1 1 1 1 1
General
Commercial buildings 2 2 2 2 2 2 2 2 2 2
Source: City of Capitola Public Works Department.
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Item 7 D.

Page | 1 16450 Monterey Road, Ste 5, Morgan Hill, CA 95037 Tel: 408-217-8749 • E-Fax: 408-872-4159
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To the City Council of the
City of Capitola
We have audited the basic financial statements of the City of Capitola as of and for the year ended June 30, 2024, and have issued our report thereon dated February 11, 2025. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility under Generally Accepted Auditing Standards and Government Auditing Standards
As communicated in our engagement letter, our responsibility, as described by professional standards, is to form and express an opinion(s) about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America.

Our audit of the financial statements does not relieve you or management of your respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City of Capitola solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

Other Information in Documents Containing Audited Financial Statements Pursuant to professional standards, our responsibility as auditors for other information in documents containing City of Capitola’s audited financial statements does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements. 260
Item 7 D.

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Planned Scope and Timing of the Audit
The interim and year-end phases of the audit were conducted consistent with the planned scope and timing we previously communicated with management. The reporting phase of the audit was delayed by two months because the engagement partner assigned to the City was on leave for family bereavement.

Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence.

Significant Risks Identified
We did not identify any significant risks that required special audit consideration.

Qualitative Aspects of the City’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City of Capitola is included in Note 1 to the financial statements. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during June 30, 2024 except for the implmentation of GASB Statement No. 100, Accounting Changes and Error Corrections—an amendment of GASB Statement No. 62. However, this standard did not have a significant impact on the financial statements. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events.

Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.

The most sensitive accounting estimates affecting the financial statements include accumulated depreciation, depreciation expense, market value adjustments related to investments, and actuarial assumptions included in employee retirement plans that impact pension and other 261
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postemployment balances reported in the financial statements.

We evaluated the key factors and assumptions used to develop the identified estimates and determined that it is reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units.

Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting City of Capitola’s financial statements relate to cash and investments, capital assets, pensions and other postemployment benefits.

Significant Unusual Transactions
For purposes of this communication, professional standards require us to communicate to you significant unusual transactions identified during our audit. No significant unusual transactions were identified as a result of our audit procedures that required the attention of management.

Identified or Suspected Fraud
We did not identify nor obtain information that indicates that fraud may have occurred.

Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. There were no uncorrected financial statement misstatements identified.

In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. There were was one material adjustment that we identified as a result of our audit procedures that was brought to the attention of, and corrected by, management. See adjusting journal entry number 7 in the following page. The remaining entries summarized in the following list were either provided by management, immaterial, or related to conversions from the modified 262
Item 7 D.

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accrual to full accrual basis of accounting as required for the presentation of the governmentwide financial statements.

Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City of Capitola’s financial statements or Account Description W/P Ref Debit Credit
1300.10
1000.3150.115.10 Business license Disability access & education 5,392.00 1000.2800.150.00 Fund Balance Reserved Disability access & education 4,845.00 1000.4335.703.10 CS-Fin Svcs State Architect fee - SB1186 547.00 Total 5,392.00 5,392.00
2212.3700.001.00 Other revenue other grants, donations, contrib 250,000.00 2212.3910.100.00 Interfund transfer in General Fund 250,000.00 Total 250,000.00 250,000.00
1000.1700.000.00 Due from other funds 79,229.00
1350.1000.000.00 Cash Operating 79,229.00
1000.1000.000.00 Cash Operating 79,229.00
1350.2700.000.00 Due to other funds 79,229.00
Total 158,458.00 158,458.00
4015.10
1910.2060.000.00 Accrued payable Interest 25,159.00
1910.1600.010.00 Other assets Amount to be provided - LT Debt 25,159.00 Total 25,159.00 25,159.00
4011.50
1910.1720.000.00 Deferred Outflows OPEB 1,018,598.00
1910.1600.010.00 Other assets Amount to be provided - LT Debt 335,516.00 1910.2500.000.00 Deferred Inflows OPEB 683,082.00
Total 1,018,598.00 1,018,598.00
4011.60
1920.1720.900.00 Deferred Outflows of Resources Diff projected & actual earnings 1,552,606.00 1920.1720.900.00 Deferred Outflows of Resources Diff projected & actual earnings 8,578,463.00 1920.2500.500.00 Deferred Inflows of Resources Changes of assumptions 405,659.00 1920.2500.600.00 Deferred Inflows of Resources Diff btw expected & actual expnc 61,916.00 1920.2850.200.00 Fund balance - undesignated GASB 68 4,511,823.00 1920.1720.400.00 Deferred Outflows of Resources Contributions after measmnt date 1,053,235.00 1920.1720.600.00 Deferred Outflows of Resources Diff btw expected & actual expnc 16,037.00 1920.1720.800.00 Deferred Outflows of Resources Change in proportion 483,334.00 1920.2400.000.00 Net Pension Liability GASB 68 12,721,709.00 1920.2500.700.00 Deferred Inflows of Resources Diff actual vs projected contrbn 467,575.00 1920.2500.700.00 Deferred Inflows of Resources Diff actual vs projected contrbn 368,577.00 Total 15,110,467.00 15,110,467.00
4002.02
1000.4910.105.99 Interfund transfer out PERS Contingency 250,000.00 1015.1020.010.00 Cash with fiscal agent 250,000.00
1015.1020.010.00 Cash with fiscal agent 126,867.00
1000.2000.000.00 Accounts payable Operating 250,000.00
1015.3610.000.00 Investment earnings Investment earnings 126,867.00 1015.3910.100.00 Interfund transfer in General Fund 250,000.00 Total 626,867.00 626,867.00
Total Adjusting Journal Entries 17,194,941.00 17,194,941.00 To record DOR and DIR for OPEB
Adjusting Journal Entries JE # 6
Pension conversion entries and adjustments
Adjusting Journal Entries JE # 7
To record transfers to PARS and investment earnings per statement. Please be sure your JE matches ours.

Adjusting Journal Entries JE # 3
Report only - reclassificaiton of negative cash to interfund payable Adjusting Journal Entries JE # 4
To update interest payable as year end.

Adjusting Journal Entries JE # 5
Adjusting Journal Entries
Adjusting Journal Entries JE # 1
CAJE #1 - Provided by client to correct disability access fee Adjusting Journal Entries JE # 2
Reclassification of transfers in from other revenue
263
Item 7 D.

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the auditor’s report. No such disagreements arose during the course of the audit.

Circumstances that Affect the Form and Content of the Auditor’s Report For purposes of this letter, professional standards require that we communicate any circumstances that affect the form and content of our auditor’s report. There were no circumstances that affect the form and content of our auditor’s report.

Representations Requested from Management
We have requested certain written representations from management, which are included in the attached letter dated February 11, 2025.

Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City of Capitola, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the City, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City of Capitola’s auditors.

This report is intended solely for the information and use of the Board and management of the City of Capitola and is not intended to be and should not be used by anyone other than these specified parties.

February 11, 2025
Morgan Hill, California
264
Item 7 D.

Page | 1 16450 Monterey Road, Ste 5, Morgan Hill, CA 95037 Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
City of Capitola
City Council and Management
Capitola, California
In planning and performing our audit of the financial statements of City of Capitola as of and for the year ended June 30, 2024, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, we considered City of Capitola’s internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City of Capitola’s internal control.

Accordingly, we do not express an opinion on the effectiveness of City of Capitola’s internal control over financial reporting.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A reasonable possibility exists when the likelihood of an event occurring is either reasonably possible or probable as defined as follows:
 Reasonably possible: The chance of the future event or events occurring is more than remote but less than likely.
 Probable: The future event or events are likely to occur.

Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses.

Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The following is a summary of new accounting pronouncements from the Governmental Accounting Standards Board:

GASB Statement No. 101, Compensated Absences, effective fiscal 2025.

Updates the recognition and measurement guidance for compensated absences by:

1. Aligning the recognition and measurement guidance under a unified model

2. Amending certain previously required disclosures

3. Amends the existing requirement to disclose the gross increases and decreases in a liability for compensated absences to allow governments to disclose only the net change in the liability

4. Supersedes GASB 16
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Item 7 D.

Page | 2 16450 Monterey Road, Ste 5, Morgan Hill, CA 95037 Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
The purpose of this communication, which is an integral part of our audit, is to describe, for management and those charged with governance, the scope of our testing of internal control and the results of that testing. Accordingly, this communication is not intended to be and should not be used for any other purpose.

Respectfully,
February 11, 2025
Morgan Hill, California
266
Item 7 D.

Capitola City Council
Agenda Report
Meeting: March 13, 2025
From: City Manager Department
Subject: Rail Trail Project Town Hall Plan
Recommended Action: Approve the proposed town hall meeting plan and outreach strategy.

Background: On February 13, 2025, the City Council heard an item regarding Park Avenue Traffic Calming Improvements with Coastal Rail Trail Options. The staff report for that item can be reviewed by clicking the link listed as Attachment 1. At the conclusion of that hearing City Council directed staff to host a town hall meeting in collaboration with the Santa Cruz County Regional Transportation Commission (RTC) to review long-term impacts of the Rail Trail, provide updates on the use of the Capitola Trestle, review impacts of potential litigation from Measure L, and provide a general overview of the Rail Trail project’s impacts in Capitola.

The RTC independently hosted a public meeting at New Brighton Middle School on March 4 to provide context regarding the Rail Trail.

Discussion: To provide time for community outreach and collaboration between the City, Santa Cruz County, and RTC staff, staff proposes the following meeting plan and outreach strategy.

Project Town Hall
Date: Wednesday, April 2, 2025
Time: 5:30 P.M. to 7:30 P.M.

Location: New Brighton Middle School Performing Arts Center The meeting will be a noticed City Council meeting; Council Members will be in attendance as audience members. There will be no Council decision.

To foster inclusive community engagement and provide multiple avenues for residents to participate, staff suggests the town hall meeting is structured in the following manner:
 Mayor Welcome
 Meeting Overview: Staff is looking into hiring a meeting facilitator.  Formal Presentation: RTC staff, in collaboration with SC County and City staff, will present an overview of project background and key topics.
 Informational materials: Materials will be available 12 days in advance on the City website on March 21.
 Pre-Submitted Questions: The City will accept questions through an online submission portal for two weeks before the town hall meeting.
 Synthesis and Preparation: Staff will review pre-submitted questions, identify repeated themes and summarize those questions, and provide answers to the summarized questions following the presentation.
 Public Comment and Question: After addressing pre-submitted questions, there will be a 45 minute public comment session. After the conclusion of public comment, questions raised by the public during that time will be addressed by staff. Members of the public will submit speaker cards and have up to 2 minutes to speak.
 Set End Time: The meeting will have a clearly communicated end time.  Meeting Summary: Following the meeting, staff will prepare a meeting summary, that includes informational materials, all pre-submitted questions, the summarized pre-submitted questions and their responses, as well as a summary of the public comment and questions and their responses. 267
Item 8 A.

Topics will include:
 Current Project: Rail Trail Segment 10 and 11
 Use of Capitola Trestle
 Park Avenue Trail Realignment
 Funding
 Ongoing Maintenance Costs
 Mobile Home Encroachments
 Measure L
 Timeline: Park Ave, EIR, Permits, Construction
 Future Zero Emissions Passenger Rail and Trail (ZEPRT) In addition, Council discussed the possibility of a topic around potential litigation. Staff recommends not discussing potential litigation in open session.

The meeting will be recorded by Community Television of Santa Cruz County (CTV) at an added cost, ensuring it is available for the public to view if they are unable to attend in-person. The public can participate by pre-submitting questions, attending in person, and/or watching the meeting video on the City’s YouTube Channel live.

To promote the meeting and encourage public participation, staff will issue a press release, social media content, updates to the City website, and postcard mailed to residents and project stakeholders.

Since February 13th, the City has received a number of emails from the public concerning this topic. All emails received have been saved to a public DropBox Folder, linked as Attachment 2.

Following the Town Hall, staff is recommending a special City Council meeting on April 17 to make a final decision on the Park Ave alignment of the rail trail.

Fiscal Impact: Staff estimates that outreach efforts and meeting costs will be approximately $5,000. This estimate includes printing, mailing, postage, location use fees, and CTV broadcasting costs.

Attachments:

1. Link to February 13th Staff Report:
https://mccmeetingspublic.blob.core.usgovcloudapi.net/capitolaca-meet22dcaa307be5437dbb1328e7ace00934/ITEM-Attachment-007- c0473858d01a4529a85b7dc9ae72d794.pdf

2. Link to DropBox Folder (Emails Received 2/13 – 3/6):
https://www.dropbox.com/scl/fo/4hn7q7g5ph4lh8dfpt9xf/ADOhg2XzWE9dex2XpDFN5_c?rlkey= ynxkqpqf123jgd6iqyf7xcd8v&st=ko7ddavl&dl=0
Reviewed By: Julia Gautho, City Clerk
Prepared and Approved By: Jamie Goldstein, City Manager 268
Item 8 A.

CAPITOLA TOWN HALL

RAIL TRAIL
Purpose: Introduce Plan for Rail Trail Project Town Hall Recommended Action: Approve the proposed town hall meeting plan and outreach strategy.
269
Item 8 A.

CAPITOLA TOWN HALL

RAIL TRAIL
Background:

February 13: City Council reviewed options for Coastal Rail Trail improvements in the Park Avenue right-of-way
Council postponed decision and directed staff to host Town Hall Meeting to cover:
• Updates on the use of the Trestle
• Long-term impacts of the project
• Impacts of potential litigation from Measure L
• Overview of Rail Trail Project impacts in Capitola
March 4: RTC hosted Independent Town Hall
Late April: County expected to consider authorizing engineering contract for Park Avenue design.
270
Item 8 A.

PROPOSED CAPITOLA
TOWN HALL: RAIL TRAIL
Date: Wednesday, April 2, 2025
Time: 5:30 P.M. to 7:30 P.M.

Location: New Brighton Middle School Performing Arts Center 271
Item 8 A.

Noticed City Council meeting: Allows for Council Member attendance (no formal action/decision).

Informational Materials: Available on City website on March 21.

Notice/Promotions: Press release, social media, City website, digital newsletter, and mailed postcard to residents and project stakeholders.

Pre-Submitted Questions: Public can submit questions from March 19 – March 31 on City website
Accessibility: Town Hall recording available on City website & YouTube Channel after the meeting.

CAPITOLA TOWN HALL
272
Item 8 A.

1. Mayor Welcome

2. Facilitator Introduction

3. Presentation: Capitola, RTC, and County staff to present project overview and key topics. (35 minutes)

4. Pre-Submitted Questions: Staff to answer summarized questions (15 minutes)

5. Public Comment and Question: Audience can submit speaker cards to speak up to 2 minutes (45 minutes)

6. Staff Response: Staff to address questions/themes raised by the public (20 minutes)

7. End Time: For accessibility, Town Hall will have a noticed end time.

CAPITOLA TOWN HALL
AGENDA:
273
Item 8 A.
• Current Project: Rail Trail Segment 10 and 11
• Use of Capitola Trestle
• Park Avenue Trail Realignment
• Funding
• Ongoing Maintenance Costs
• Mobile Home Encroachments
• Measure L
• Timeline: EIR, Permits, Construction
• Future Zero Emissions Passenger Rail and Trail (ZEPRT)

CAPITOLA TOWN HALL
TOPICS:

In addition, Council discussed the possibility of a topic around potential litigation. Staff recommends not discussing potential litigation in open session. 274
Item 8 A.

Special City Council meeting on April 17 for final
decision on Park Avenue alignment of the rail trail.

CAPITOLA TOWN HALL
NEXT STEPS:
275
Item 8 A.

Recommended Action: Approve the proposed
town hall meeting plan and outreach strategy

CAPITOLA TOWN HALL

RAIL TRAIL
276
Item 8 A.

Capitola City Council
Agenda Report
Meeting: March 13, 2025
From: Community Development
Subject: Public Outreach Long Term Plan for Capitola Wharf Recommended Action: Receive report regarding the draft long term concepts for the Capitola Wharf and direct staff to proceed with public outreach in April and May 2025 utilizing the concepts.

Background: In 2024, the Wharf Resiliency and Public Access Project (Project) was completed. The Project focused on critical elements, including widening the Wharf, addressing failing pilings, replacing the deck, and adding new restroom facilities. Storms in December 2023 caused additional damage to both the Wharf and its structures, necessitating the removal of the buildings. In February 2024, the Council approved the demolition of the buildings and instructed staff to initiate the Capitola Wharf longterm planning process (Long-Term Wharf Plan).

On September 12, 2024, the City Council approved a contract with Fuse Architecture for outreach, planning, and design services for the Long-Term Wharf Plan.

Discussion: At the March 13, 2025, City Council meeting, Fuse Architecture will introduce six draft concepts for the Long-Term Wharf Plan. Staff, working with Fuse Architecture, will provide an update to the City Council on the project’s progress, will introduce each concept, and will provide an overview of next steps.

These six concepts are designed to provide concrete starting points for public discussion and feedback.

Following the presentation to Council, staff will initiate public outreach, actively seeking and ensuring opportunities for the public to contribute entirely new ideas.

Public Outreach: Staff proposes the following outreach plan.

1. Hosting Two Community Meetings
a. In-person interactive community meeting at New Brighton Middle School date TBD b. Virtual meeting on April date TBD

2. Public Survey: A public survey will be open online April 1 – April 30. Paper surveys will be available at City Hall and the Library.

3. Meetings with Capitola Stakeholder Groups: During April and May, staff will meet with the Art and Cultural Commission, Commission on the Environment, Finance Advisory Committee, Historical Museum Board, Planning Commission, representatives from the CWEP Board, and representatives from the CVWBIA during their regularly scheduled meetings. Each board, commission, and community group will be provided with an overview of the Wharf concepts and asked to provide input and ideas. Members of these stakeholder groups are also encouraged to participate in the community meetings and the survey.

Draft Concepts/Alternatives: On March 13th, Fuse Architecture will present the following draft alternatives, including a summary of each concept, conceptual site plans and images, square feet estimates for structures, and preliminary cost estimates.
277
Item 8 B.

The alternatives include:

Option 1: Public Open Space with Enhanced Public Realm:

A. Wharf with all areas open to the public. No leased space.

B. Public gathering infrastructure, including benches, stage, and shade structures.

C. Additional public restroom(s).

D. Remove hoist
Option 2: Enhanced Public Realm and Mobile Vendors
A. Open space with up to 4 mobile kiosks for a variety of uses.

B. Public gathering infrastructure, including benches, stage, and shade structures.

C. Additional public restroom(s).

D. Remove hoist.
(Examples for mobile kiosks include: Food/Drink/Mobile Fishing Shop/Non-Power Water Craft Rental - Kayaks, Paddle Boards)
Option 3: Enhanced Public Realm and Fixed Fishing Concession A. Fixed low-cost structure for fishing concession with boat rental, repair, fixed boat storage, mooring buoys, dingy service, and hoist.

B. Public gathering infrastructure including benches, stage, and shade structures.

C. Fixed lifeguard station with personal rescue watercraft (PRWC).

D. Additional public restroom(s) at the end of the Wharf.

Option 4: Enhanced Public Realm, Fixed Low-Cost Fishing Concession, and Mobile Vendor(s):

A. Fixed low-cost structure for fishing concession with boat rental, repair, fixed boat storage, mooring buoys, dingy service, and hoist.

B. Mobile kiosks for food/beverage operations.

C. Public gathering infrastructure, including benches, stage, and shade structures.

D. Fixed lifeguard station with personal rescue watercraft (PRWC).

E. Additional public restroom(s) at the end of the Wharf.

Option 5: Enhanced Public Realm, Fixed Fishing Concession, and Flexible Market Space:

A. Fixed all-weather building for a fishing concession with boat rental, repair, fixed boat storage, mooring buoys, dingy service, and hoist.

B. Fixed flexible open market space for food & beverage concessions and open space for public.

C. Fixed lifeguard station with personal rescue watercraft (PRWC).

D. Public gathering infrastructure, including benches, stage, and shade structures.

E. Additional public restroom(s) at the end of the Wharf.

Option 6: Enhanced Public Realm and Permanent Structures for Fishing Concession and Restaurant:

A. Fixed all-weather building for a fishing concession with boat rental, repair, fixed boat storage, mooring buoys, dingy service, and hoist.

B. Fixed all-weather building for a full restaurant.

C. Fixed lifeguard station with personal rescue watercraft (PRWC).

D. Public gathering infrastructure, including benches, stage, and shade structures.

E. Additional public restroom(s) at the end of the Wharf.

During the March 13th presentation, the City Council will have the opportunity to identify any additional considerations to be included in the alternatives. Once direction is provided, the project consultant will incorporate requested changes and initiate the public outreach process. 278
Item 8 B.

Next Steps:

Step 1: Public Outreach on Alternatives: Public outreach will be conducted through community meetings, a survey, and meetings with Capitola boards, commissions, and stakeholder groups, as previously outlined.

Step 2: City Council Presentation with Recommendation: The findings of the public outreach will be presented to the City Council, along with Fuse Architecture’s recommended alternative for the Plan. The City Council will provide feedback on the recommendation prior to final development and design.

Step 3: Final Development of Wharf Plan: The final development design plans for the Wharf Plan will include a site plan, a description of uses and programmed area, 360-degree conceptual elevations and renderings, updated cost estimate, and overview of applicable permits and CEQA. The Wharf Plan will be presented to the City Council for adoption.

Fiscal Impact: The FY 2024-25 Budget included $75,000 for the Wharf Plan. On September 12, 2024, the City Council approved the agreement with Fuse Architecture in the amount of $75,000.

Attachments:

1. Draft Alternatives Analysis Report
Report Prepared By: Katie Herlihy, Community Development Director Reviewed By: Julia Gautho, City Clerk
Approved By: Jamie Goldstein, City Manager
279
Item 8 B.

GSPublisherVersion 539.67.90.5

ED NS ECI L

ARCHI TECT

F C O E T A T S

A L I FO R N I A
No. C-29000

RENEWAL
DATE

DANIEL GOMEZ

04.30.19 fuse Tel 831.479.9295
Fax 831.479.9325
411 Capitola Ave.

Capitola CA 95010
fuse architects inc.

Project Number
Project Name
Seal/Signature
5041 FERN FLAT RD.

APTOS, CA. 95003

GLADSTONE
ADU
APN #: 10540115

GLADSTONE ADU

OPTIONAL PAGE, PLACE APPROVED CONCEPT SKETCHES HERE (NOT A REQUIRED SHEET FOR PERMIT) # Issue Date
Issue
Description
1 1 dd/mm/y
y

BUILDING

SUBMITTAL

03.30.25 No. C-29550
n
pacific ocean
monterey bay

04.30.25 DIRECTIONS FROM SANTA CRUZ
FOLLOW CA-1 NORTH | 7.5 MILES / EXIT BAY AVE

TOWARDS CAPITOLA VILLAGE

CAPITOLA WHARF

INITIAL CONCEPTS FOR

PUBLIC OUTREACH
CITY OF CAPITOLA + CAPITOLA + CALIFORNIA + 95010
512 Capitola Ave + Capitola + CA + 95010

CONCEPTS FOR PUBLIC OUTREACH
1mile 5 miles
santa cruz capitola
approx. location

03.05.2025
a r c h i t e c t s + b u i l d e r s
17 1
280
Item 8 B.

FUSE ARCHITECTS + BUILDERS 512 CAPITOL A AVE. | CAPITOLA, CA. 831.479.9295

DR AF T / INITIAL CONCEPTS FOR

PUBLIC OUTREACH

CAPITOLA WHARF LONG-TERM PLAN
DATE | 03.06.2025

ALTERNATIVE ANALYSIS / INITIAL CONCEPTS FOR PUBLIC OUTREACH

P RO J E C T / TA B L E O F C O N T E N T S / C A P I TO L A i . TABLE OF CONTENTS / PROJECT SUMMARY
i.
ii. CONCEPTUAL LAYOUT / USE PLANS

01. OPTION 01 | PUBLIC OPEN SPACE WITH ENHANCED PUBLIC REALM

02. OPTION 02 | ENHANCED PUBLIC REALM AND MOBILE VENDORS

03. OPTION 03 | ENHANCED PUBLIC REALM AND FIXED FISHING CONCESSION

04. OPTION 04 | ENHANCED PUBLIC REALM, FIXED FISHING CONCESSION & MOBILE VENDORS

05. OPTION 05 | ENHANCED PUBLIC REALM WITH FIXED FISHING CONCESSION & FLEXIBLE INDOOR MARKET SPACE

06. OPTION 06 | PERMANENT STRUCTURES & PUBLIC SPACE
iii. COST APPROXIMATION SUMMARY

E N D O F D O C U M E N T
281
Item 8 B.

FUSE ARCHITECTS + BUILDERS 512 CAPITOL A AVE. | CAPITOLA, CA. 831.479.9295

DR AF T / INITIAL CONCEPTS FOR

PUBLIC OUTREACH

CAPITOLA WHARF LONG-TERM PLAN
DATE | 03.06.2025
OPTION 01 | PUBLIC OPEN SPACE WITH ENHANCED PUBLIC REALM A. Wharf with all areas open to the public. No leased Space B. Public gathering infrastructure including: Benches / Stage / Shade Structure C. Additional Public Bathroom(s) at the Wharf Head
D. Remove (E) Hoist
OPTION 02 | ENHANCED PUBLIC REALM AND MOBILE VENDORS
A. Majority Open Space with up to 4 Mobile Kiosks for Variety of Uses (examples: Food/Drink/Mobile Fishing Shop/Non-Power Water Craft Rental - Kayaks, Paddle Boards, etc.) B. Public gathering infrastructure including: Benches / Stage / Shade structures C. Additional public restroom(s) at the Wharf Head
D. Remove (E) Hoist
OPTION 03 | ENHANCED PUBLIC REALM AND FIXED FISHING CONCESSION A. Fixed Low-Cost Structure for Fishing Concession with boat rental / repair & fixed boat storage / mooring buoys, dingy service and hoist B. Public gathering infrastructure including: Benches / Stage / Shade Structure(s) C. Fixed Lifeguard station with Personal Rescue Water Craft (PRWC).

D. Additional public restroom(s) at the end of the wharf OPTION 04 | ENHANCED PUBLIC REALM, FIXED FISHING CONCESSION, & MOBILE VENDORS A. Fixed Low-Cost Structure for Fishing Concession with boat rental / repair & fixed boat storage / mooring buoys, dingy service and hoist B. Mobile Kiosks for food/beverage operations
C. Public gathering infrastructure including: Benches / Stage / Shade Structure(s) D. Fixed Lifeguard station with Personal Rescue Water Craft (PRWC).

E. Additional public restroom(s) at the end of the wharf OPTION 05 | ENHANCED PUBLIC REALM WITH FIXED FISHING CONCESSION & FLEXIBLE MARKET SPACE A. Fixed all weather building Fishing Concession with boat rental / repair & fixed boat storage / mooring buoys, dingy service and hoist B. Fixed Flexible Market Space for food & beverage concessions w/ open space for public (ie: fish market) C. Lifeguard station with Personal Rescue Water Craft (PRWC).

D. Public gathering infrastructure including: Benches / Stage / Shade Structure(s) E. Additional public restroom(s) at the end of the wharf OPTION 06 | PERMANENT STRUCTURES & PUBLIC SPACE
A. Fixed all weather building Fishing Concession with boat rental / repair & fixed boat storage / mooring buoys, dingy service and hoist B. Fixed all weather building for a full restaurant
C. Lifeguard station with Personal Rescue Water Craft (PRWC).

D. Public gathering infrastructure including: Benches / Stage / Shade Structure(s) E. Additional public restroom(s) at the end of the wharf PROJECT SUMMARY / CAPITOLA WHARF :

ALTERNATIVE ANALYSIS / INITIAL CONCEPTS FOR PUBLIC OUTREACH 282
Item 8 B.

FUSE ARCHITECTS + BUILDERS 512 CAPITOL A AVE. | CAPITOLA, CA. 831.479.9295

DR AF T / INITIAL CONCEPTS FOR

PUBLIC OUTREACH

CAPITOLA WHARF LONG-TERM PLAN
DATE | 03.06.2025

01. CONCEPTUAL LAYOUT / USE PLAN - OPTION 01

01. PUBLIC OPEN SPACE WITH ENHANCED PUBLIC REALM:

A. Wharf with all areas open to the public. No leased Space B. Public gathering infrastructure including Benches / Stage / Shade Structure C. Additional Public Bathroom(s) at the Wharf Head
D. Remove (E) zHoist
OPTION 01 / BUDGET APPROXIMATION: (+/-) $900K to $1.1M
WHARF HEAD - SITE MAP & CONCEPTUAL IMAGES / SCALE: 1’ = 1/16” **PLEASE NOTE: IMAGES SHOWN ARE TO HELP SHOW INTENT - NOT ACTUAL DESIGN**

PUBLIC BATHROOMS
(N) WIDE BENCHES &

PLANTERS
(E) PLATFORM & RAMP

DANCE FLOOR /

OPEN SPACE
+/- 4000sf

STAGE & CANOPY
(N) PUBLIC BATHROOMS
(E) PARK BENCHES &

LIGHT POLES TO REMAIN

PARK / PICNIC AREA
(E) PICNIC BENCHES
(N) WIDE BENCHES & TO REMAIN

PLANTERS

VIEWING BRONZE FISH

STATION
BTH.RM
350sf
+/- 4000sf

WIDE BENCHES & PLANTERS WOOD & STEEL BENCHES STAGE
(E)FISH STATION
4 8 16 32 48 64
283
Item 8 B.

FUSE ARCHITECTS + BUILDERS 512 CAPITOL A AVE. | CAPITOLA, CA. 831.479.9295

DR AF T / INITIAL CONCEPTS FOR

PUBLIC OUTREACH

CAPITOLA WHARF LONG-TERM PLAN
DATE | 03.06.2025

02. CONCEPTUAL LAYOUT / USE PLAN - OPTION 02

02. WIDE BENCHES & PLANTERS STAGE
ENHANCED PUBLIC REALM AND MOBILE VENDORS:

A. Majority Open Space with up to four (4) Mobile Kiosks for Variety of Uses (Examples: Food/Drink/Mobile Fishing Shop/Non-Power Water Craft Rental - Kayaks, Paddle Boards, etc.) B. Public gathering infrastructure including Benches / Stage / Shade structures C. Additional public restroom(s) at the Wharf Head
D. Remove (E) Hoist
OPTION 02 / BUDGET APPROXIMATION: (+/-) $1.3M to $1.6M
(N) WIDE BENCHES &

PLANTERS
(E) PLATFORM & RAMP PICNIC / OPEN SPACE +/-6000sf

STAGE &
CANOPY
(N) PUBLIC BATHROOMS
(E) PARK BENCHES &

LIGHT POLES TO REMAIN
BATH
ROOM
350sf PARK/PICNIC AREA
5000sf
(E) PICNIC BENCHES

BRONZE FISH TO REMAIN VIEWING

STATION

01. 10X12 03.

04. KIOSK #4
KIOSK #2 KIOSK #3
KIOSK #1

MOBILE SURF / KAYAKS RENTALS KIOSKS / MOBILE VENDOR

02. /10X12
/10X12 /10X12
(E)FISH STATION
WHARF HEAD - SITE MAP & CONCEPTUAL IMAGES / 4 8 16 32 48 64 SCALE: 1’ = 1/16” **PLEASE NOTE: IMAGES SHOWN ARE TO HELP SHOW INTENT - NOT ACTUAL DESIGN**

PUBLIC BATHROOM
284
Item 8 B.

FUSE ARCHITECTS + BUILDERS 512 CAPITOL A AVE. | CAPITOLA, CA. 831.479.9295

DR AF T / INITIAL CONCEPTS FOR

PUBLIC OUTREACH

CAPITOLA WHARF LONG-TERM PLAN
DATE | 03.06.2025

03. CONCEPTUAL LAYOUT / USE PLAN - OPTION 03

03. (N) PUBLIC BATHROOMS
(E) PARK BENCHES &

LIGHT POLES TO REMAIN
BTH.RM
350sf
(E) PICNIC BENCHES

BRONZE FISH TO REMAIN
LIFE
GUARD

STATION
676sf
(E)HOIST

FISHING

CONCESSION
864sf

FIXED BOAT STORAGE
+ REPAIR AREA
OPEN
1200sf

PICNIC /
OPEN SPACE / 4,000sf

STAGE &
CANOPY
(E) PLATFORM & RAMP
(E)FISH

STATION

VIEWING

STATION
ENHANCED PUBLIC REALM AND FIXED FISHING CONCESSION:

A. Fixed Low-Cost Structure for Fishing Concession with boat rental / repair & fixed boat storage / mooring buoys, dingy service and hoist B. Public gathering infrastructure including: Benches / Stage / Shade Structure(s) C. Fixed Lifeguard station with Personal Rescue Water Craft (PRWC).

D. Additional public restroom(s) at the end of the wharf OPTION 03 / BUDGET APPROXIMATION: (+/-) $1.7M to $2.2M

WIDE BENCHES & PLANTERS PUBLIC BATHROOM LIFEGUARD STATION & STAGE

ROOFTOP LOOKOUT

FIXED LOW COST STRUCTURE / FISHING CONCESSION / REPAIR / STORAGE WHARF HEAD - SITE MAP & CONCEPTUAL IMAGES / SCALE: 1’ = 1/16” 4 8 16 32 48 64 **PLEASE NOTE: IMAGES SHOWN ARE TO HELP SHOW INTENT - NOT ACTUAL DESIGN** 285
Item 8 B.

FUSE ARCHITECTS + BUILDERS 512 CAPITOL A AVE. | CAPITOLA, CA. 831.479.9295

DR AF T / INITIAL CONCEPTS FOR

PUBLIC OUTREACH

CAPITOLA WHARF LONG-TERM PLAN
DATE | 03.06.2025 04.

CONCEPTUAL LAYOUT / USE PLAN - OPTION 04

04. WIDE BENCHES & PLANTERS BATHROOM LIFEGUARD STATION & STAGE

ROOFTOP LOOKOUT

FIXED STRUCTURE /

FISHING CONCESSION /

REPAIR / STORAGE
ENHANCED PUBLIC REALM, FIXED FISHING CONCESSION & MOBILE VENDORS:

A. Fixed Low-Cost Structure for Fishing Concession with boat rental / repair & fixed boat storage / mooring buoys, dingy service and hoist B. Mobile Kiosks for food/beverage operations
C. Public gathering infrastructure including: Benches / Stage / Shade Structure(s) D. Fixed Lifeguard station with Personal Rescue Water Craft (PRWC).

E. Additional public restroom(s) at the end of the wharf OPTION 04 / BUDGET APPROXIMATION: (+/-) $2.2M to $2.5M
(N) PUBLIC BATHROOMS
(E) PARK BENCHES &

LIGHT POLES TO REMAIN
BATH
ROOM
350sf
(E) PICNIC BENCHES

BRONZE TO REMAIN
FISH

VIEWING

STATION

01. 02.

03. 04. KIOSK #4
10x12
KIOSK #3
10x12
KIOSK #1 KIOSK #2
LIFE
GUARD

STATION
676sf
(E)HOIST

FISHING

CONCESSION
1,056sf

FIXED BOAT

STORAGE
1,344sf

PICNIC /

OPEN SPACE
4,000sf

STAGE &
CANOPY
(E) PLATFORM & RAMP
(E)FISH STATION
KIOSK #1
10x12
KIOSK #2
10x12

KIOSKS / MOBILE VENDORS
WHARF HEAD - SITE MAP & CONCEPTUAL IMAGES / 4 8 16 32 48 64 SCALE: 1’ = 1/16” **PLEASE NOTE: IMAGES SHOWN ARE TO HELP SHOW INTENT - NOT ACTUAL DESIGN** 286
Item 8 B.

FUSE ARCHITECTS + BUILDERS 512 CAPITOL A AVE. | CAPITOLA, CA. 831.479.9295

DR AF T / INITIAL CONCEPTS FOR

PUBLIC OUTREACH

CAPITOLA WHARF LONG-TERM PLAN
DATE | 03.06.2025 05.

05. ENHANCED PUBLIC REALM WITH FIXED FISHING CONCESSION & FLEXIBLE MARKET SPACE:

A. Fixed all weather building Fishing Concession with boat rental / repair & fixed boat storage / mooring buoys, dingy service and hoist B. Fixed Flexible Market Space for food & beverage concessions w/ open space for public (IE: fish market) C. Lifeguard station with Personal Rescue Water Craft (PRWC).

D. Public gathering infrastructure including: Benches/ Stage / Shade Structure(s) E. Additional public restroom(s) at the end of the wharf OPTION 05 / BUDGET APPROXIMATION: (+/-) $2.2M to $3.2M
CONCEPTUAL LAYOUT / USE PLAN - OPTION 05
(E) PARK BENCHES &

LIGHTPOLES TO REMAIN
(E) PICNIC BENCHES
(N) WIDE BENCHES & TO REMAIN

PLANTERS

VIEWING

STATION
BATH
ROOM
350sf
LIFE
GUARD

STATION
676sf

FISHING

CONCESSIONS

BOAT STORAGE
(STACKED)
1430sf
OPEN
MARKET
2862sf
W. MEZZANINE

PICNIC /

OPEN SPACE
4,000sf

STAGE &
CANOPY
(N) PUBLIC BATHROOMS BRONZE
FISH
(E)HOIST
(E) PLATFORM & RAMP
(E)FISH STATION

LIFEGUARD STATION & STAGE

ROOFTOP LOOKOUT

PLANTERS / PUBLIC BATHROOM FLEXIBLE MARKET SPACE / OUTDOOR SEATING / FULL FISHING CONCESSIONS / REPAIR / OPEN AIR BUILDING

BENCHES
WHARF HEAD - SITE MAP & CONCEPTUAL IMAGES / 4 8 16 32 48 64 SCALE: 1’ = 1/16” **PLEASE NOTE: IMAGES SHOWN ARE TO HELP SHOW INTENT - NOT ACTUAL DESIGN** 287
Item 8 B.

FUSE ARCHITECTS + BUILDERS 512 CAPITOL A AVE. | CAPITOLA, CA. 831.479.9295

DR AF T / INITIAL CONCEPTS FOR

PUBLIC OUTREACH

CAPITOLA WHARF LONG-TERM PLAN
DATE | 03.06.2025 06.

06. PERMANENT STRUCTURES / REPLACING BUILDINGS & PUBLIC SPACE:

A. Fixed all weather building Fishing Concession with boat rental / repair & fixed boat storage / mooring buoys, dingy service and hoist B. Fixed all weather building for a full restaurant
C. Lifeguard station with Personal Rescue Water Craft (PRWC).

D. Public gathering infrastructure including Benches / Stage / Shade Structure(s) E. Additional public restroom(s) at the end of the wharf OPTION 06 / BUDGET APPROXIMATION: (+/-) $5.5M to $6.2M
CONCEPTUAL LAYOUT / USE PLAN - OPTION 06
FULL

RESTAURANT
1400sf

FISHING CONCESSIONS
& BOAT STORAGE
1600sf
BATH
ROOM
350sf
LIFE
GUARD

STATION
676sf
(N) PUBLIC BATHROOMS (E) PICNIC BENCHES
(N) WIDE BENCHES & TO REMAIN

PLANTERS

BRASS FISH
(E) VIEWING

STATION
(E)HOIST

PICNIC /

OPEN SPACE
5,000sf

STAGE &
CANOPY
(E) PLATFORM & RAMP
(E)FISH STATION OPEN / TURN AROUND
(E) PARK BENCHES &

LIGHTPOLES TO REMAIN

WIDE BENCHES & PLANTERS PUBLIC BATHROOM LIFEGUARD STATION & LOW LIGHTING

ROOFTOP LOOKOUT

FISHING CONCESSIONS /

REPAIR / STORAGE
FULL RESTRAURANT & BAR W. OUTDOOR SEATING & ROOF TOP SEATING WHARF HEAD - SITE MAP & CONCEPTUAL IMAGES / 4 8 16 32 48 64 SCALE: 1’ = 1/16” **PLEASE NOTE: IMAGES SHOWN ARE TO HELP SHOW INTENT - NOT ACTUAL DESIGN** 288
Item 8 B.

FUSE ARCHITECTS + BUILDERS 512 CAPITOL A AVE. | CAPITOLA, CA. 831.479.9295

DR AF T / INITIAL CONCEPTS FOR

PUBLIC OUTREACH

CAPITOLA WHARF LONG-TERM PLAN
DATE | 03.06.2025 iii.
iii.

OPTION 01 | PUBLIC OPEN SPACE WITH ENHANCED PUBLIC REALM TOTAL ESTIMATE: 900K - 1.1M
DEMOLISH HOIST: (+/-) $60K
ENHANCED PUBLIC SPACE / PARK: (+/-) $450K
PUBLIC RESTROOM (2 STALL): (+/-) $600K
ANY NECESSARY ENGINEERING: T.B.D.

OPTION 02 | ENHANCED PUBLIC REALM AND MOBILE VENDORS
TOTAL ESTIMATE: 1.3M - 1.6M
DEMOLISH HOIST: (+/-) $60K
ENHANCED PUBLIC SPACE / PARK: (+/-) $450K
PUBLIC RESTROOM (2 STALL): (+/-) $600K
MOBILE KIOSKS: (+/-) $120K / EACH
ANY NECESSARY ENGINEERING: T.B.D.

OPTION 03 | ENHANCED PUBLIC REALM & FIXED FISHING CONCESSION TOTAL ESTIMATE: 1.7M - 2.2M
ENHANCED PUBLIC SPACE / PARK: (+/-) $250K
PUBLIC RESTROOM (2 STALL): (+/-) $600K
LIFEGUARD STATION / LOOKOUT: (+/-) $200K
FIXED BOAT STORAGE & FISHING CONCESSION: (+/-) $650K
ANY NECESSARY ENGINEERING: T.B.D.

CONCEPTUAL LAYOUT - PRELIMINARY COST BREAKDOWN:

OPTION 04 | ENHANCED PUBLIC REALM, FIXED FISHING CONCESSION & MOBILE VENDORS | TOTAL ESTIMATE: 2.2M - 2.5M
MOBILE KIOSKS: (+/-) $120K / EACH
ENHANCED PUBLIC SPACE / PARK: (+/-) $250K
PUBLIC RESTROOM (2 STALL): (+/-) $600K
LIFEGUARD STATION / LOOKOUT: (+/-) $200K
FIXED BOAT STORAGE & FISHING CONCESSION: (+/-) $650K
ANY NECESSARY ENGINEERING: T.B.D.

OPTION 05 | ENHANCED PUBLIC REALM WITH FIXED FISHING CONCESSION & FLEXIBLE MARKET SPACE | TOTAL ESTIMATE: 2.2M - 3.2M
ENHANCED PUBLIC SPACE / PARK: (+/-) $250K
PUBLIC RESTROOM (2 STALL): (+/-) $600K
LIFEGUARD STATION / LOOKOUT: (+/-) $200K
INDOOR MARKET SPACE / FOOD + FISH CONSESSION: (+/-) 1.2M ANY NECESSARY ENGINEERING: T.B.D.

OPTION 06 | PERMANENT STRUCTURES & PUBLIC SPACE
TOTAL ESTIMATE: 5.5M - 6.2M
ENHANCED PUBLIC SPACE / PARK: (+/-) $250K
PUBLIC RESTROOM (2 STALL): (+/-) $600K
LIFEGUARD STATION / LOOKOUT: (+/-) $200K
PERMANENT BOAT STORAGE & FISHING CONCESSION: (+/-) $1.2K PERMANENT RESTAURANT: (+/-) $3.3M
ANY NECESSARY ENGINEERING: T.B.D.

COST APPROXIMATION SUMMARY:
289
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.thank you
290
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CAPITOLA WHARF

INITIAL CONCEPTS FOR PUBLIC OUTREACH
Recommendation: Receive report and direct staff to
proceed with public outreach for long term wharf plan in April and May 2025, using presented concepts.
291
Item 8 B.

Purpose:

1. Introduce 6 draft concepts for Long-Term Wharf Plan

2. Direct staff to initiate robust public outreach

CAPITOLA WHARF

INITIAL CONCEPTS FOR PUBLIC OUTREACH INITIAL PUBLIC OUTREACH PLAN 292
Item 8 B.

CAPITOLA WHARF

INITIAL CONCEPTS FOR PUBLIC OUTREACH
Background:

September 12, 2024:

Contract with Fuse
Architecture for outreach,
planning, and design services
for the Long-Term Wharf
Plan.

CAPITOLA WHARF

INITIAL CONCEPTS FOR PUBLIC

OUTREACH
293
Item 8 B.

1. Host Two Community Meetings in April
• In-person interactive community meeting
• Virtual meeting: date TBD

2. Public Survey:
• Available April 1 – April 30
• Hardcopy surveys at City Hall and Library

3. Meet with Stakeholder Groups:
• All City Advisory Bodies, CWEP, and representatives
from the CVWBIA, and current lease holders

CAPITOLA WHARF

INITIAL CONCEPTS FOR PUBLIC OUT INITIAL PUBLIC OUTREACH PLAN 294
Item 8 B.

CAPITOLA WHARF

INITIAL USE CONCEPTS
295
Item 8 B.
350
sf
Picnic Area w
Benches & Tables
Stage
Public
Restroom
Open
Space
Fish Cleaning
Station (E)
~$900,000- $1.1 million
296
Item 8 B.

Wood Benches
Public Bathrooms STAGE 297
Item 8 B.

CAPITOLA WHARF

INITIAL USE CONCEPTS
298
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Picnic Area w
Benches & Tables
Public
Restroom
STAGE
Mobile
Kiosk 2
Mobile
Kiosk 3
Mobile
Kiosk 4
Mobile
Kiosk 1 Fish Cleaning
Station (E)
~$1.3 - $1.6 million
299
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Examples of Mobile Kiosks : Food/ Drink/ Mobile Fishing/ Non-Powered Watercraft 300
Item 8 B.

CAPITOLA WHARF

INITIAL USE CONCEPTS
301
Item 8 B.
350
sf
Public
Restroom Stage Lifeguard
Station
Enclosed Boat
Rental & Repair
Fishing
Concession
Hoist (E) Fish Cleaning
Station (E)
1200 sf 864 sf
676
sf
~$1.7 - $2.2 million
302
Item 8 B.

Lifeguard
Station
Fixed Low-Cost Structure for Fishing Concession
with Boat Rental & Repair
303
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CAPITOLA WHARF

INITIAL USE CONCEPTS
304
Item 8 B.
350
sf 1200 sf 864 sf 676
sf
Public
Restroom
Stage
Lifeguard
Station
Enclosed Boat
Storage & Repair
Fishing
Concession
Fish Cleaning
Station (E) Hoist (E)
Mobile
Kiosk
Mobile
Kiosk
Mobile
Mobile Kiosk
Kiosk
~$2.2 - $2.5 million 305
Item 8 B.

Mobile Kiosks for Food and
Drink Vendors
Fixed Low-Cost Structure
for Fishing Concession
Lifeguard
Station
306
Item 8 B.

CAPITOLA WHARF

INITIAL USE CONCEPTS
307
Item 8 B.
350
sf 2862 sf 676
sf
Lifeguard
Station
Open Market
W. Mezzanine
Fishing Concession/
Rental Boats (Stacked)
Fish Cleaning
Station (E)
Public
Restroom
1430 sf
Stage
Hoist (E)
~$2.2 - $3.2 million 308
Item 8 B.

Fixed All Weather Building for Fishing Concession & Flexible Market Space 309
Item 8 B.

CAPITOLA WHARF

INITIAL USE CONCEPTS
310
Item 8 B.

Joist (E)
350
sf
1600 sf 676
sf
Lifeguard
Station
Fishing Concession/ Restaurant
Rental Boats (Stacked)
Fish Cleaning
Station (E)
Public
Restroom
1430 sf
Stage
~$5.5 - $6.2 million 311
Item 8 B.

Fixed Structure
for Fishing Concession
All Weather Building For Full Restaurant
312
Item 8 B.

CAPITOLA WHARF

PUBLIC OUTREACH & WHARF USE CONCEPT
Recommendation: Direct Staff to proceed
with public outreach in April and May
2025 using the presented concepts.
313
Item 8 B.
314
Item 8 B.
315
Item 8 B.

Capitola City Council
Agenda Report
Meeting: March 13, 2025
From: Community Development Department
Subject: Annexation Request for 1610 Bulb Avenue
Recommended Action: Authorize the Mayor to sign a letter to the Local Agency Formation Commission in support of or opposition to the annexation of 1610 Bulb Avenue into Capitola city limits.

Background: On October 20, 2022, the Planning Commission reviewed a conceptual review application for an assisted-living facility with integrated memory care at 3720 Capitola Road and 1610 Bulb Avenue.

The property at 3720 Capitola Road is located within the Community Commercial (C-C) zoning district.

The property at 1610 Bulb Avenue is located within the County of Santa Cruz and is currently zoned as residential.

The original 2022 application was for an assisted living facility that included 80 rooms within a four-story building. The building was situated toward the front of the property, along the frontage of Capitola Road, with an outdoor patio and trellised entryway adjacent to the sidewalk. Parking was proposed behind the building, with vehicle access from Bulb Avenue, a residential street.

The applicant sought an increase to the maximum floor area ratio (FAR) and height standards in accordance with Capitola Municipal Code Chapter 17.88: Incentives for Community Benefits. With a qualified community benefit, the C-C zone maximum height can increase from 35 feet to 50 feet and the maximum floor area ratio can increase from 1.0 to 2.0. Such increases require the City Council to find the project provides community benefits that advance the goals of the General Plan, can be accommodated by existing public services and infrastructure, and minimizes adverse impacts to neighboring properties. The applicant was seeking an increase in the FAR to approximately 1.65 and the height to 50 feet.

There was significant public comment in opposition to the project, which included concerns about vehicle noise (ambulances), traffic, privacy, tree removal, and general incompatibility with a single-family neighborhood along Bulb Avenue. After receiving public comment and discussion, the Planning Commission provided feedback that the project did not appear to include an eligible community benefit.

Following the Planning Commission meeting, the applicant reversed the building orientation by moving the surface parking and primary entrance toward Capitola Road (away from the neighborhood). The room count increased from 80 rooms to 93 rooms and could accommodate 97 residents.

On January 25, 2024, the City Council reviewed the updated application and informed the applicant it would not qualify for the community benefit designation.

On January 27, 2025, the owner of 1610 Bulb Avenue submitted a request for the property to be annexed into the Capitola city limits without a development proposal for the property.

Discussion: The City received a request to annex 1610 Bulb Avenue into the Capitola city limits. The owner is requesting the property be zoned Community Commercial (CC) to match the zoning of the adjacent property at 3720 Capitola Road. The application does not include a development proposal for the property.

The parcel at 1610 Bulb Avenue has a frontage 85 feet wide along Bulb Avenue and is 160 feet deep. 3720 Capitola Road is a rectangle with 177 feet of frontage along Bulb Avenue and 160 feet along Capitola Road. The adjacent property at 3744 Capitola Road (Pono Hawaiian Kitchen & Tap) extends the full depth of both 1610 Bulb Avenue and 3720 Capitola Road. If the City were to annex 1610 Bulb Avenue, the City limit would align with the adjacent property at 3744 Capitola Road. 316
Item 8 C.

The applicant has already submitted an annexation application to the Local Agency Formation Commission (LAFCO). LAFCO will not move forward with the application unless the City provides a “willserve” letter to the applicant or LAFCO, in which the City states it is willing to provide services to the subject area. The site is serviced by the City of Santa Cruz Water Department and County of Santa Cruz Sanitation Department. Both entities provided letters noting that adequate public services and infrastructure are available.

Staff has prepared following list of considerations to assist the City Council in determining whether to support the request for annexation.

Pros of Annexation:

1. Zoning Consistency and Boundary. Annexation would allow the property to be rezoned as Community Commercial (C-C) and align with the adjacent 3744 Capitola Road (Pono Grill).

2. City Control Over Development. Annexation would give the City authority over land use decisions, ensuring that any future development aligns with Capitola’s General Plan, zoning regulations, and CEQA. The City would be able to condition the approvals on the project and enforce the conditions.

3. Potential Economic Benefit. If developed commercially, the larger lot would provide more opportunity for redevelopment and flexibility around design. The property has the potential to generate increased tax revenue, depending on the type of use.

Cons of Annexation:

1. Unknown Impacts. Without a development proposal tied to the annexation, future impacts of build out are unknown. Also, the fiscal impact is unclear as the property tax exchange agreement with Santa Cruz County must be negotiated. The City would be responsible for providing municipal services (police, public works, etc.) to the site, which could increase costs without offsetting revenue, depending on the type of use.

2. Neighborhood Concerns. During the prior annexation request for an assisted living senior facility, public comment included traffic, circulation, noise, and compatibility concerns.

3. Complex Approval Process. The annexation requires approval from the Local Agency Formation Commission (LAFCO), a General Plan amendment, Zoning Map amendment, and CEQA review, making it a time-intensive process. The City would bill all costs for processing the project, including staff, consultant, and legal fees, to the applicant.

Next Steps: If in favor of the annexation, the City Council should authorize the Mayor to send a will-serve letter to the applicant and LAFCO. The applicant would then submit an application for a General Plan update to the City, as State law requires the City to update its general plan and land use designation to reflect the proposed annexation of the subject parcel. State law requires a California Environmental Quality Act (CEQA) analysis (evaluating potential impacts on factors like air quality, water resources, traffic, land use, and wildlife) reflecting the proposed annexation to be recorded. While the current review of the parcel with no development may warrant a Notice of Exemption, the City may require additional environmental analysis of future development before adopting a CEQA determination and authorizing annexation.

Fiscal Impact: In accordance with State law, any application requesting an annexation must include an adopted property tax exchange agreement between the affected parties. The County and City must adopt similar resolutions indicating the amount of property tax funds currently being collected by the County within the subject territory that will be transferred to the City. This can be divided multiple ways, including a 50-50 split, 80-20, or a 0 percent transfer. The property tax determination is based on the existing property tax at the time of the annexation. The project development details are not needed for the ratification of the property tax exchange agreement.
317
Item 8 C.

Attachments:

1. Proposed Annexation Boundary

2. Applicant’s Project Narrative
Report Prepared By: Katie Herlihy, Community Development Director Reviewed By: Julia Gautho, City Clerk; Samantha Zutler, City Attorney Approved By: Jamie Goldstein, City Manager
318
Item 8 C.
319
Item 8 C.
320
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321
Item 8 C.
420 Capitola Avenue
Capitola, California 95010
Telephone: (831) 475-7300
FAX: (831) 479-8879
Website: http://www.cityofcapitola.org
Fran DeBernardo
Recipient Address
City, State, ZIP
Subject: Will Serve Letter for 1610 Bulb Avenue Annexation Dear Frank DeBernardo,
On behalf of the City of Capitola, this letter serves as confirmation that the City of Capitola is prepared to provide municipal services to the property located at 1610 Bulb Avenue upon annexation into the Capitola city limits.

The Capitola City Council has reviewed the annexation request and determined that annexation would provide zoning consistency and enhance land use planning within Capitola’s Community Commercial zoning district. The annexation will also align the zoning of 1610 Bulb Avenue with the adjacent property at 3744 Capitola Road, eliminating an irregular boundary.

As part of the annexation, the City of Capitola is committed to providing municipal services in accordance with applicable laws and regulations.

Please do not hesitate to contact city staff if you require further information or have any questions regarding this matter.

Sincerely,
Joe Clarke
Mayor, City of Capitola
322
Item 8 C.
420 Capitola Avenue
Capitola, California 95010
Telephone: (831) 475-7300
FAX: (831) 479-8879
Website: http://www.cityofcapitola.org
Fran DeBernardo
Recipient Address
City, State, ZIP
Subject: Will Serve Letter for 1610 Bulb Avenue Annexation Dear Frank DeBernardo,
On behalf of the City of Capitola, this letter serves as a denial of your request for the City of Capitola to provide municipal services to the property located at 1610 Bulb Avenue for annexation into the Capitola city limits.

After reviewing the request, the City Council has determined that annexation is premature due to the lack of a development proposal and the uncertainties surrounding the fiscal and community impacts.

Without a defined project, the City cannot fully assess the potential benefits or costs associated with annexation. Given these uncertainties, the City Council has decided that it is not in Capitola’s best interest to proceed with this annexation.

Please do not hesitate to contact city staff if you require further information or have any questions regarding this matter.

Sincerely,
Joe Clarke
Mayor, City of Capitola
323
Item 8 C.
1610 BULB AVENUE

ANNEXATION REQUEST
Recommendation: Authorize the Mayor to sign a
letter to the Local Agency Formation Commission in
support of or opposition to the annexation of 1610 Bulb Avenue into Capitola city limits.
324
Item 8 C.
1610 BULB AVENUE

ANNEXATION REQUEST
Background: 2022 Application for Assisted Living
Facility.
• Application asks for Incentives, which require defined Community Benefits:
• 80 room 4-story facility 93 room 4-story facility
• Not supported by Planning Commission or City
Council:
• Could not identify defined Community Benefits
• Concern with impacts on neighboring residents
325
Item 8 C.
326
Item 8 C.
3720
Capitola Rd
3744
Capitola Rd
1610
Bulb Ave
Capitola Road Bulb Avenue
327
Item 8 C.
3720
Capitola Rd
3744
Capitola Rd
1610
Bulb Ave
Capitola Road Bulb Avenue
160 ft 262 ft
9,920 sq ft
FAR: 1.0
Height: 40 ft
328
Item 8 C.
1610 BULB AVENUE

ANNEXATION REQUEST

PROS CONS
Zoning Consistency and Unknown Impacts
Boundary
City Control of Development Neighborhood Concerns
Potential Economic Benefit Complex Approval Process
329
Item 8 C.
1610 BULB AVENUE

ANNEXATION REQUEST
Recommendation: Authorize the Mayor to sign a
letter to the Local Agency Formation Commission in
support of or opposition to the annexation of 1610
Bulb Avenue into Capitola city limits.
330
Item 8 C.

Capitola City Council
Agenda Report
Meeting: March 13, 2025
From: City Manager Department
Subject: Appointment of Capitola Representative to Measure Q Oversight Advisory Board
Recommended Action: Appoint a member of the public to serve as Capitola’s representative on the Measure Q Citizens Oversight Advisory Board.

Background: Approved by Santa Cruz County voters in November 2024, the Santa Cruz County Safe Drinking Water, Clean Beaches, Wildfire Risk Reduction, and Wildlife Protection Initiative (Measure Q) is a transformative local effort aimed at protecting and enhancing the county’s precious natural resources.

This initiative prioritizes water quality, wildfire prevention, habitat restoration, and the creation of resilient ecosystems to ensure the health and well-being of Santa Cruz County’s environment and its residents for generations to come.

Measure Q is funded through a modest annual parcel tax of $87 and is expected to generate more than $7 million annually.

Discussion: Measure Q establishes a nine-member Citizens Oversight Advisory Board (COAB) to ensure transparency and alignment with community goals. The COAB also engages with the community, helps develop Vision Plans to guide awards and provides annual reporting to the Board of Supervisors. All meetings are open to the public.

The composition of the COAB is as follows:
 Nine subject-matter experts – five appointed by the County’s Board of Supervisors and four appointed by the cities with one selection per city
 Members are required to have expertise in water quality or flood protection, wildfire reduction or forest management, parks or natural resources management, working lands, environmental justice or park equity, or knowledge of evaluating financial transactions  Members are not required to live in any specific area  Members cannot hold an elected office
The COAB’s responsibilities include the following:
 Choose land stewardship implementation partner
 May provide recommendations to the Office of Response, Recovery & Resilience (OR3) and County Parks on the development of the Vision Plan.
 Approve the 5-Year Vision Plan prepared by OR3 and County Parks, synthesizing local climate, recreation, and resource management strategies to support grant criteria and awards  Receive reports on projects funded and provide annual reports to the County’s Board of Supervisors on project outcomes and leveraging of Measure Q funds The City received two applications from members of the public to serve as a representative of Capitola on the COAB (Attachment 1 & 2).

Fiscal Impact: None.

Attachments:

1. Application – Jed Wilson
331
Item 8 D.

2. Application – Scott Harway
Report Prepared By: Julia Gautho, City Clerk
Approved By: Jamie Goldstein, City Manager
332
Item 8 D.
1 Gautho, Julia
From: bdscc <[email protected]>
Sent: Thursday, January 30, 2025 12:00 PM
To: Gautho, Julia
Subject: [PDF] FW: Commissions Appointment Application - from Jed Wilson Attachments: Wilson - Resume.docx.pdf
Follow Up Flag: Follow up
Flag Status: Flagged
Hi Julia,
I don’t know if your aware of the County’s new WWWPA Citizen’s Oversight Board (aka Measure Q). Our office has received the attached application. Jed Wilson is interested in being the Capitola City Representative on this Board.

If you’d like to move forward in appointing Mr. Wilson, he will need to be nominated at your next City Council meeting. Once I receive confirmation of his nomination, the Board will approve nomination at our March 11th, Board meeting.

If our office receives more application for the Capitola City rep position, I will send them your way for review.

Thank you,
Jesseka
Jesseka Rodriguez
Office Assistant III
Santa Cruz County Board of Supervisors
701 Ocean Street, Room 500, Santa Cruz, CA 95060
Office: 831-454-2200
From: [email protected] <[email protected]> Sent: Monday, January 27, 2025 9:38 AM
To: bdscc <[email protected]>
Subject: Commissions Appointment Application - from Jed Wilson Appointment to a County Advisory Body
Commission, Committee, or Board:

WWWPA Citizen’s Oversight Advisory Board (aka Measure Q) If applicable, please indicate the seat or category of representation for which you are seeking appointment:

Capitola City
333
Item 8 D.
2 APPLICANT INFORMATION
Name:

Jed Wilson
Street:

City:

Capitola
State:

CA
Zip Code:
95010
Email Address:
[email protected]
Phone:

Preferred Correspondence:

Email
Supervisorial District:
5 Do you currently hold elected office?
No

CURRENT/PREVIOUS COMMISSION OR COMMITTEE SERVICE
List your current or previous service on any advisory bodies and state where you served. Previous service is not required.

Advisory Body Region/County Term
Statewide Training Group (CALFIRE) State 2006-2017
CA

EDUCATION AND/OR TRAINING
Include any education and/or training related to the advisory body for which you are applying for. This is optional information but beneficial.
334
Item 8 D.
3 Institution/Program Major/Field Degree/Certificate Year College of the Siskyious Fire Science AS 2002
Please select all fields in which you have relevant, demonstrable expertise:

Wildfire or forest management,Wildlife, parks or natural resources stewardship,Working lands or agriculture,Financial and/or program analysis

WORK/VOLUNTEER EXPERIENCE
Include your current or most recent employer as well as any previous employment, volunteer, and community activities you’ve participated in which are related to the advisory body for which you are applying for.

Organization Address Position Years
CALFIRE 6059 Highway 9, Felton
CA 95018 Unit Chief 18
FEEJAYS Swift St, Santa Cruz, CA CEO 4

STATEMENT OF INTEREST/QUALIFICATIONS
Complete a brief statement indicating why you are interested in serving on the advisory body in question and why you are qualified through personal, lived, and/or professional experience(s) for the appointment. What do you hope to contribute or gain from your participation in the commission? I am writing to express my interest in being considered for the upcoming appointment to the Measure Q Board. With my extensive experience in both operational and administrative roles within the fire service, I believe I would bring a unique perspective to the board. In particular, I offer a strong understanding of fuel management practices, forest regulations, and prescribed fire—areas in which I work daily as part of my professional responsibilities.

I am deeply committed to collaboration and would aim to work cohesively with fellow board members to maximize the effectiveness of Measure Q funds, ensuring that they are used in line with the intentions outlined to the public.

This measure specifically addresses fire safety and watershed protection—two critical issues for our community. I am passionate about making sure the funds are directed toward maintaining public safety, protecting our natural resources, and ensuring clean water for future generations.

Please upload your CV or resume:

Wilson - Resume.docx.pdf

REASONABLE ACCOMODATIONS
Please identify any reasonable accommodations needed for equal participation. This information is not a consideration nor a factor in any possible appointment and is used only for planning and technology purposes.

None

COMMISSIONS POLICY ORDINANCE OF SANTA CRUZ COUNTY
335
Item 8 D.
4 Please review Santa Cruz County Code (SCCC) Chapter 2.38, also known as the “Commissions Policy Ordinance of Santa Cruz County” available at https://www.codepublishing.com/CA/SantaCruzCounty/ which applies to any advisory board, commission, committee or department advisory group over which the County has appointing authority or jurisdiction.

In accordance with SCCC Chapter 2.38 and Santa Cruz County Conflict of Interest Code, I agree to:

Initials: jw Attend meetings regularly and devote the time necessary to fulfill my duties as a member Initials: jw Comply with the Ralph M. Brown Act and California Public Records Act Initials: jw If required under state and local conflict of interest laws, file a public statement (Form 700) disclosing certain types of economic information

CERTIFICATION
By checking this box and entering the date and my initials, I certify that the above information is true and correct and authorize the verification of the information in the application in the event I am a finalist for the appointment.

Certified Date: 2025-01-27 Initials:jw
336
Item 8 D.

Jedidiah A. Wilson
• • [email protected] •
EDUCATION:
2001-2016
Cabrillo College • Aptos, CA • Part Time Student
2000-2003
College of the Siskiyous • Weed, CA • AS Fire Science
1999-2000
Columbia College • Sonora, CA • Part Time Student
1996-2000
Mariposa County High School • Mariposa, CA • Full Time Student WORK EXPERIENCE:
8/2024-Current
CAL-FIRE • San Mateo - Santa Cruz • TAU Unit Chief
As a Unit Chief of CZU, I am responsible for overseeing the operations and management of a specific geographic unit within California. My role involves ensuring that fire protection services, emergency response efforts, and prevention programs are effectively carried out in our area. I lead a team of dedicated fire personnel, coordinate resources during large incidents, and work closely with local governments, agencies, and communities to reduce wildfire risks. Additionally, I play a key role in strategic planning, budgeting, and implementing CAL FIRE's policies and objectives to ensure public safety while supporting environmental stewardship and resource management.

Assistant Region Chief, Jeff Veik, wk. (707)217-9001
6/2022-8/2024
CAL-FIRE • San Mateo - Santa Cruz • Deputy Chief
Unit operations, I assure that emergency resources, personnel, and equipment are trained, available, and ready to respond to fires and other emergencies; establish incident objectives and ensure the effective management and mitigation of emergencies; coordinate, develop, and implement the unit's Emergency Resource Directory, County Emergency Response Plan, Local Government Mutual Aid Plans, Local Government Automatic Aid Plans, and Interagency Operational Plans. I oversee both Santa Cruz County Fire Department and Pajaro Valley Fire District contracts with CAL FIRE. This includes budgeting, staffing, LG-1 creation and approval.

Unit Chief, Nate Armstrong, wk. (831)254-1700
2/2022-6/2022
CAL-FIRE • San Mateo - Santa Cruz • Battalion Chief (Santa Cruz County Fire) As a Battalion Chief my job entails providing program management and managing all personnel assigned to Santa Cruz County Fire. I am involved in resolving many different type incidents that fall under the department’s ALL RISK mission and providing field battalion coverage. As the Santa Cruz County Fire Battalion Chief, I work in close cooperation with Unit Management, Santa Cruz County and Local Departments .

Unit Chief, Nate Armstrong, wk. (831)254-1700
2016-2022
Feejays • CEO
As CEO I was responsible for managing the companies’ overall operations. This includes delegating and directing agendas, driving the company’s profitability, managing the company’s organizational structure, strategies and communicating directly with the owners.

Owner, TJ Moran, (831)425-1292
2013-2016
CAL-FIRE • San Mateo - Santa Cruz • Battalion Chief (Training) 337
Item 8 D.

As a Battalion Chief my job entailed providing program management and managing all personnel assigned to the Training Department. I was involved in resolving many different type incidents that fall under the department’s ALL RISK mission and providing field battalion coverage. As the Unit’s Training Officer, I worked in close cooperation with Management, Region Training and Local Departments to provide the mandated and career enhancement courses. I was the Santa Cruz County Training Officers Secretary/Treasurer and the Unit Instructor of Record for the JAC program.

Assignments: CZU Training Battalion – (July 2013 – May 2016) Retired Unit Chief, Ian Larkin, wk. (831)254-1700
2012-2013
CAL-FIRE • San Mateo - Santa Cruz • Fire Captain (Training) As the Santa Cruz County Training Officer, I conducted weekly/monthly/annual training for all paid staff along with conducting the volunteer academy. I oversaw the Training Battalion operations during this period of a vacant position of Battalion Chief. I was the Units Instructor of Record for the JAC Program. I was the Santa Cruz County Training Officers Secretary/Treasurer for the 2012/2013 calendar year.

Assignments: CZU Training Battalion – Fire Captain (Feb 2012 –July 2013) Retired Unit Chief, Ian Larkin, wk. (831)254-1700
2011-2012
CAL-FIRE • San Mateo - Santa Cruz • TAU Battalion Chief (Training) As a Battalion Chief my job entailed providing program management and managing all personnel assigned to the Training Department. I was involved in resolving many different type incidents that fall under the department’s ALL RISK mission and providing field battalion coverage. As the Unit’s Training Officer, I worked in close cooperation Management, Region Training and Local Departments to provide the mandated and career enhancement courses. I was also assigned the Unit Safety Officer Position.

Assignments: CZU Training Battalion – (July 2011-Feb 2012) Retired Unit Chief, Scott Jalbert, wk. (831)254-1700
2008-2011
CAL-FIRE • San Mateo - Santa Cruz • Fire Captain
As a Fire Captain my job entailed providing station management and managing all personnel assigned to the station. I was involved in resolving many different type incidents that fall under the department’s ALL RISK mission. I also took part in letting the local community know of the fire danger by conducting LE-100 inspections and putting on fire prevention programs. As the Santa Cruz County Training Officer, I conduct weekly/monthly/annual training for all paid staff. I was the JAC Coordinator and Units Instructor of Record for the JAC Program. Implemented a County wide Volunteer Academy for Multi-Agency participation.

Assignments: Battalion 4 Relief Captain (June 2008 – May 2009) CZU Training Battalion – Fire Captain (May 2009 – July 2011) Retired Assistant Region Chief, Jake Hess, wk. (707)217-9001 2003-2008
CAL-FIRE • San Mateo - Santa Cruz • Fire Apparatus Engineer As a Fire Apparatus Engineer my job entailed current upkeep of the department’s apparatus and to provide station management. I was involved in resolving many different type incidents that fall under the department’s ALL RISK mission. I also took part in letting the local community know of the fire danger by conducting LE-100 inspections and putting on fire prevention programs.

Assignments: Pajaro Valley FS Sch. “A”, Saratoga Summit FS Sch. “B”, Belmont FS Sch. “A”, Ben Lomond Camp CYA “In-Camp Crew/VMP Projects” Corralitos FS Sch. “B”.

Retired Captain Scott Agnelli, wk. (831)722-6122
2001-2002 Fire Seasons
CAL-FIRE • San Mateo - Santa Cruz • Firefighter I
As an Amador Firefighter One my job entailed assisting in the upkeep of department apparatus and station maintenance. I was involved in carrying out tasks that were delegated to me from my supervisor. These ranged from fire suppression tactics to duties around the station.

Assignments: Big Creek FS Sch. “B”/Amador
Retired Captain Michael Brunson, wk. (831)722-7179
2000-2001
Hammond Ranch Fire Company • Weed, CA • Firefighter/EMT As a firefighter/EMT (Sleeper), my job entailed current upkeep of the station maintenance and department equipment. I was involved in resolving incidents including medical aids, structure fires, vehicle accidents, wildland fires, and public assist. I was also part of many committees such as:
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Grant Committee, Fund-raising Committee, Sleeper Program, and Rescue Team (Snowmobile Captain).

Ed Littizzette, wk.
(530)938-4200
CERTIFICATES AND LICENSES:

STATE FIRE TRAINING
● Firefighter One
● Firefighter Two
● Fire Officer
● Fire Investigator One
● Fire Instructor One
● Fire Command 1A
● Fire Command 1B
● Fire Command 1C
● Fire Prevention 1A
● Fire Prevention 1B
● Fire Management 1
● Fire Investigation 1A
● Fire Investigation 1B
● Fire Instructor 1A
● Fire Instructor 1B
● Auto Extrication
● Basic Pump Operations
● Emergency Vehicle Operations
● Rapid Intervention Crew Tactics (RIC)
● Firefighter Survival
● Ethical Leadership in the Classroom
● Region Instructor Orientation (RIO)
● ICS-200
● Mandated Instructor Update (2012)
FEMA
● I-700
● I-800
CSTI
● HAZMAT 1A
● HAZMAT 1B
● HAZMAT 1C
● HAZMAT 1D

CALFIRE/NWCG
● Supervision 2
● Supervision 3
● Incident Management 2
● Incident Management 3
● C-234 & S-234 Firing Operations
● Confined Space Awareness
● Confined Space Entry & Rescue
● S-290
● Basic 67 Hour Academy
● ICS-100
● Basic Firing Operations
● Commanding the Initial Response
● CALCARD – Certified Purchasing
● Defensive Driver Train-the-Trainer
● Chipper Orientation & Safety
● GPS/Basic Land Navigation
● Helicopter Rescue Awareness
● Module 2A
● Module 2B
● CALFIRE FFA
● S-212 “Level B”
● I-300
● I-400
● Certified Purchaser
● FI-110
● FI-210
● S-130
● SA-130
● S-190
● S-203 Introduction to Information Officer
● S-244 Field Observer
● S-245 Display Processor
● S-330 Task Force/Strike Team Leader
● S-339 Division/Group Supervisor
● S-404 Safety Officer
● AREP/LOFR
● SITL
OTHER
● Member of 4300 TAWG 2006-2016
● Member of BFC TAWG 2009-2016
● Swift Water Awareness
● Swift Water Technician 1
● PC 832 Reserve Officer Training w/ Firearms
● Commanding the Mayday and RIC Operation
● California Vocational Teaching Credential
● Santa Cruz County Training Officers S/T
● Unit Instructor of Record (JAC Program)
● Registered State Fire Marshall Instructor
IROC)
● DIVS (Q)
● STEN (Q)
● LOFR(T)
● FOBS (T)
● SOF2 (T)
● PIOF (T)
Member of the following:
2005-2016 Training Advisory Working Group (TAWG)
2023-Current 7700 Working Group

OTHER CERTIFICATES AND LICENSES AVAILABLE UPON REQUEST
REFERENCES:
• Retired Unit Chief Ian Larkin, wk. (831)254-1700
• Retired Assistant Region Chief Jake Hess, wk. (707)217-9001 • Retired Battalion Chief Greg Estrada, wk. (831)601-1007 339
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From: [email protected] To: bdscc
Subject: Commissions Appointment Application - from Scott Harway Date: Wednesday, February 26, 2025 2:06:55 PM
Attachments: Measure Q resume-1052741044.pdf
Appointment to a County Advisory Body
Commission, Committee, or Board:

WWWPA Citizen’s Oversight Advisory Board (aka Measure Q) If applicable, please indicate the seat or category of representation for which you are seeking appointment:

APPLICANT INFORMATION
Name:

Scott Harway
Street:

City:

Capitola
State:

CA
Zip Code:
95010
Email Address:
[email protected]
Phone:

Preferred Correspondence:

Email
Supervisorial District:
1 Do you currently hold elected office?
No

CURRENT/PREVIOUS COMMISSION OR COMMITTEE SERVICE
List your current or previous service on any advisory bodies and state where you served. Previous service is not required.
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Advisory Body Region/County Term
California

EDUCATION AND/OR TRAINING
Include any education and/or training related to the advisory body for which you are applying for.

This is optional information but beneficial.

Institution/Program Major/Field Degree/Certificate Year CSU Monterey Bay Global Studies/Spanish 1997-1999
Cabrillo College Fire Science AS 1995-1997
Please select all fields in which you have relevant, demonstrable expertise:

Wildfire or forest management,Environmental justice, park equity, or public health,Financial and/or program analysis

WORK/VOLUNTEER EXPERIENCE
Include your current or most recent employer as well as any previous employment, volunteer, and community activities you’ve participated in which are related to the advisory body for which you are applying for.

Organization Address Position Years
Central Fire District
of Santa Cruz
County
930 17th Ave, Santa
Cruz, Ca 95062 Fire Captain 25
Soquel High School
401 Old San Jose
Rd, Soquel Ca
95073
Ass Coach boys BB 2
County Office of
Education
400 Encinal St,
Santa Cruz,Ca
95060
Substitute Instructor 1

STATEMENT OF INTEREST/QUALIFICATIONS
Complete a brief statement indicating why you are interested in serving on the advisory body in question and why you are qualified through personal, lived, and/or professional experience(s) for the appointment. What do you hope to contribute or gain from your participation in the commission? I, Scott Harway, am applying for the opportunity to represent the city of Capitola on the Santa Cruz County Measure Q Citizens Oversight Advisory Board. I have lived, worked, and raised a family in Capitola over the past 25 years. I have recently retired and am excited to serve my city and community in a different capacity. I retired last year from the Central Fire District of Santa Cruz where I served and protected the city of Capitola as a Firefighter/Paramedic and Fire Captain since 1999. Before that, I graduated from Cabrillo College with an AS in fire science and then attended CSU Monterey Bay majoring in global studies and minoring in spanish. My wife and I have owned 341
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our home in the Cliffwood Heights neighborhood since 2002 and have raised our family here. Over the past 25 years, I have had the opportunity to work with multiple city departments and officials both professionally and personally. I have worked with Parks and Recreation as a parent by enrolling my kids in camps, sports, and Jr Guard programs since they were young. I worked with the Planning and Building Departments during our extensive remodel in 2020. Professionally I worked collaboratively with the Public Safety Division, Public Works, City Manager, and the Parks and Recreation Department over my career. I enjoyed working with all the different aspects and folks that help maintain our great city. I was able to learn a tremendous amount about the interworking of Capitola and maintained positive professional relationships with those I had the privilege to work with. I now look forward to the opportunity to assist and serve the city in a different capacity as the Capitola representative for the Measure Q Citizen Oversight Advisory Board.

I appreciate your consideration,
Scott Harway
Please upload your CV or resume:

Measure Q resume-1052741044.pdf

REASONABLE ACCOMODATIONS
Please identify any reasonable accommodations needed for equal participation. This information is not a consideration nor a factor in any possible appointment and is used only for planning and technology purposes.

COMMISSIONS POLICY ORDINANCE OF SANTA CRUZ COUNTY
Please review Santa Cruz County Code (SCCC) Chapter 2.38, also known as the “Commissions Policy Ordinance of Santa Cruz County” available at
https://www.codepublishing.com/CA/SantaCruzCounty/ which applies to any advisory board, commission, committee or department advisory group over which the County has appointing authority or jurisdiction.

In accordance with SCCC Chapter 2.38 and Santa Cruz County Conflict of Interest Code, I agree to:

Initials: shAttend meetings regularly and devote the time necessary to fulfill my duties as a member
Initials: shComply with the Ralph M. Brown Act and California Public Records Act Initials: shIf required under state and local conflict of interest laws, file a public statement (Form 700) disclosing certain types of economic information

CERTIFICATION
By checking this box and entering the date and my initials, I certify that the above information is true and correct and authorize the verification of the information in the application in the event I am a finalist for the appointment.

Certified Date: 2025-02-25 Initials:sh
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Scott Harway
Capitola, California 95010
[email protected]
Objective: To represent Capitola on the Santa Cruz County Measure Q Advisory Board Summary
• EMS Shift Trainer 2001-2010 at Central Fire
• Peer Support Cofounder and Team Member 2002-2006 at Central Fire • Technical Rescue Team Member 2021-2024 at Central Fire • Wellness & Fitness Committee Coordinator 2004-2024 at Central Fire • Confined Space Rescue Program Coordinator 2005-2013 at Central Fire • Shift Paramedic Captain 2010-2024 at Central Fire
• Cofounder and Member of Central Fire Protection District's Aquatic Rescue Program at Central Fire
• Over six years experience in commercial and residential construction • Santa Cruz County Health & Wellness Committee Member 2017-2024 • Program manager and lead Instructor for Capitola Junior Guard Instructor training 2017-2022 Licenses & Certificates
• Firefighter I & II
• Paramedic License No. P16116 (2000-present)
• Strike Team Leader, ICS S-334
• Fire Control 4A
• ICS 100, 190, 200, 300 & 400
• Swift Water Rescue Technician
• USLA Open Water Rescuer
• Rescue Water Craft Operator
• OSFM Certified Instructor
Education
WestMed Training California State University, Monterey Bay San Jose, CA Seaside, CA
1998-1999 1996-1998
EMT-P License Major: Global Studies, Minor Concentration: Spanish Cabrillo College
Aptos, CA
1993-1996
A.S. in Fire Science
Volunteer Experience
• Cabrillo Summer League 1994-1996
• Jacob’s Heart 2000-2002
• Ride a Wave Foundation 2001-2003
• Boy’s & Girl’s Club 2003-2005
• Relay for Life 2001-2019
Work History
Fire Captain 2009-2024 Confined Space Rescue Standby
Firefighter/Paramedic 2000-20009 Lee and Associates
Central Fire Protection District Boulder Creek, CA
Santa Cruz, California 2003-2005
(Paid On-Call 1996-1999)
Fire Academy Instructor/ EMT Proctor Paramedic Proctor
Cabrillo College Fire Academy Emergency Training Services Aptos, California Santa Cruz, California
2002-2004 2000-2010
References Available Upon Request
• Certified OSFM Fire Officer
• Certified OSFM Chief Officer
• Rescue Systems I,II,&III
• HazMat First Responder
• Confined Space Rescue Technician
• River & Flood Water Rescue
• Trench Rescue Technician
• Mid County Youth Soccer 2009-2018
• Soquel Unified School District 2011-2024
• Capitola/Soquel Little League 2012- 2018
• Aptos Youth Basketball Assoc. 2014-2019
• Santa Cruz City High Schools. 2023-present
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