APPENDIX B
FORM OF BOND
No. ____ ***$__________**
CITY OF SANTA CRUZ
2025 PARKING REVENUE BOND
INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP:
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
The City of Santa Cruz, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the “City”) for value received, hereby promises to pay (but only out of the Pledged Revenues and other assets pledged therefor as hereinafter mentioned) to the Registered Owner stated above, or registered assigns, on the Maturity Date stated above (subject to any right of prior redemption hereinafter mentioned), the Principal Amount stated above, in lawful money of the United States of America; and to pay interest thereon in like lawful money from the Bond Payment Date next preceding the date of authentication of this Bond (unless this Bond is authenticated as of a day during the period commencing after the fifteenth day of the month preceding a Bond Payment Date and ending on or before such Bond Payment Date, in which event it shall bear interest from such Bond Payment Date, or unless this Bond is authenticated on or before September 15, 2025, in which event it shall bear interest from the Issue Date stated above) until payment of such principal sum shall be discharged as provided in the Indenture hereinafter mentioned, at the Interest Rate per annum stated above, payable semiannually on each April 1 and October 1, commencing October 1, 2025 (each, a “Bond Payment Date”).
The principal (or redemption price) hereof is payable by check at the Office (as defined in the Indenture referred to below) of U.S. Bank Trust Company, National Association (together with any successor trustee under the Indenture, the “Trustee”).
Interest hereon is payable by check of the Trustee mailed on each Bond Payment Date to the Registered Owner as of the 15th day of the month preceding each Bond Payment Date (except with respect to payment of defaulted interest as provided in the Indenture hereinafter referred to) at the address shown on the registration books maintained by the Trustee. Payment of interest shall be made by wire transfer in immediately available funds to an account in the United States of America to any Owner of Bonds in the aggregate
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principal amount of $1,000,000 or more who shall furnish written wire instructions to the Trustee before the 15th day of the month preceding the applicable Bond Payment Date.
This Bond is one of a duly authorized issue of bonds of the City designated as its “City of Santa Cruz 2025 Parking Revenue Bonds” (the “Bonds”), in the aggregate principal amount of $__________ authorized under Resolution No. _____ adopted by the City Council of the City on April __, 2025, and the provisions of the City of Santa Cruz Enterprise Revenue Bond Law, constituting Chapter 16.26 of the Santa Cruz Municipal Code (the “Bond Law”), and issued under an Indenture of Trust dated as of May 1, 2025 (the “Indenture”), between the City and the Trustee. The Bonds have been issued for the purpose of financing improvements to the City’s public parking enterprise (the “Parking Enterprise”).
Reference is hereby made to the Indenture (a copy of which is on file at said Office of the Trustee) and all indentures supplemental thereto and to the Bond Law for a description of the rights thereunder of the owners of the Bonds, of the nature and extent of the security, of the rights, duties and immunities of the Trustee and of the rights and obligations of the City thereunder. The Registered Owner of this Bond, by acceptance hereof, assents and agrees to all the provisions of the Indenture.
The Bonds and the interest thereon are payable from Pledged Revenues of the Parking Enterprise (as such terms are defined in the Indenture) and are secured by a pledge and assignment of said Pledged Revenues and of amounts held in the Bond Fund established under the Indenture, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture. The City has the right under the Indenture to issue additional obligations on a parity with the Bonds, subject to the specific conditions set forth in the Indenture. The Bonds are special obligations of the City and are not a lien or charge upon the funds or property of the City, except to the extent of the aforesaid pledge and assignment.
The Bonds maturing on or before April 1, 203_, are not subject to redemption prior to their respective stated maturities. The Bonds maturing on or after April 1, 203_, are subject to redemption in whole, or in part among maturities on such basis as determined by the City and in any event by lot within a maturity, at the option of the City, from any available source of funds, on any business day on or after April 1, 203_, at a redemption price equal to 100% of the principal amount thereof to be redeemed together with accrued interest to the redemption date, without premium.
The Bonds maturing on April 1, 20__, are subject to mandatory sinking fund redemption in whole, or in part by lot, at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on April 1 in the years as set forth in the following table.
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Sinking Fund Principal Amount
Redemption Date to be Redeemed
(April 1) or Purchased
The City has the right to rescind any notice of the optional redemption of Bonds by written notice to the Trustee on or prior to the dated fixed for redemption. Any notice of optional redemption shall be cancelled and annulled if for any reason funds shall not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default.
Whenever provision is made in the Indenture for the redemption of Bonds of more than one maturity, the Bonds to be redeemed shall be selected among maturities on such basis as shall be set forth in a written certificate of the City filed with the Trustee, and the Trustee shall select the Bonds to be redeemed within any maturity by lot in any manner which the Trustee in its sole discretion shall deem appropriate. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $5,000 portions and such portions shall be treated as separate Bonds which may be separately redeemed.
The Trustee on behalf and at the expense of the City shall mail (by first class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption, at least 20 but not more than 60 days prior to the redemption date, at their respective addresses appearing on the Registration Books. Neither the failure to receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon.
Interest on the Bonds called for redemption shall not accrue from and after the redemption date.
The Bonds are issuable as fully registered Bonds in denominations of $5,000 and any integral multiple thereof. Subject to the limitations provided in the Indenture, Bonds may be exchanged, at said Office of the Trustee, for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity.
This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at said Office of the Trustee, but only in the manner, subject to the limitations provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer, a new Bond or Bonds, of authorized denomination or denominations, of the same maturity and for the same aggregate principal amount, shall be issued to the transferee in exchange herefor. The City and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the City and the Trustee shall not be affected by any notice to the contrary.
The Indenture and the rights and obligations of the City and of the owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that
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no such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the City to pay the principal or interest at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or (c) without its written consent thereto, modify any of the rights or obligations of the Trustee, all as more fully set forth in the Indenture.
Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Trustee for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
It is hereby certified and recited that any and all things, conditions and acts required to exist, to have happened and to have been performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by the Bond Law, and by the laws of the State of California, and that the amount of this Bond, together with all other indebtedness of the City, does not exceed any limit prescribed by the Bond Law and is not in excess of the amount of Bonds permitted to be issued under the Indenture.
This Bond is not entitled to any benefit under the Indenture, or is not valid or obligatory for any purpose, until the certificate of authentication hereon endorsed has been signed by the Trustee.
IN WITNESS WHEREOF, the City of Santa Cruz has caused this Bond to be executed in its name and on its behalf by the facsimile signature of its Mayor and attested to by the facsimile signature of its City Clerk, all as of the Issue Date stated above.
CITY OF SANTA CRUZ
By
Mayor
Attest
City Clerk
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TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture.
Dated:
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as Trustee
By
Authorized Signatory
ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto __________________________________ whose address and social security or other tax identifying number is ____________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) _______________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.
Dated:
Signature Guaranteed
Note: Signature(s) must be guaranteed by an
eligible guarantor institution meeting the
requirements of membership or participation in the
Security Transfer Agent Medallion Program
(“STAMP”) or such other “signature guarantee
program” as may be determined in substitution for
STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
Note: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of the within Bond in every particular without alteration or
enlargement or any change whatsoever.
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APPENDIX C
PROVISIONS RELATING TO
THE BOND INSURANCE POLICY
The following terms and provisions are hereby incorporated into this Indenture by this reference. Such provisions shall control and supersede any conflicting or inconsistent provisions in this Indenture.
1. Notice and Other Information to be given to the Bond Insurer. The City will provide the Bond Insurer with all notices and other information it is obligated to provide (i) under the Continuing Disclosure Certificate and (ii) to the holders of Bonds or the Trustee under the Indenture. The notice address of the Bond Insurer is:
Build America Mutual Assurance Company
200 Liberty Street, 27th Floor
New York, New York 10281
Attention: Surveillance, Re: Policy No. _______
Telephone: (212) 235-2500
Telecopier: (212) 235-1542
Email: [email protected]
In each case in which notice or other communication refers to an event of default or a claim on the Bond Insurance Policy, then a copy of such notice or other communication shall also be sent to the attention of the General Counsel at the same address and at [email protected] or at Telecopier: (212) 235-5214 and shall be marked to indicate “URGENT MATERIAL ENCLOSED.”
2 Defeasance. The investments in any defeasance escrow for the Bonds shall be limited to non-callable, direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, or otherwise be approved by the Bond Insurer.
At least three Business Days prior to any defeasance, the City shall deliver to the Bond Insurer copies of an escrow agreement, opinions regarding the validity and enforceability of the escrow agreement, a verification report (a “Verification Report”) of a nationally recognized independent financial analyst or firm of certified public accountants regarding sufficiency of the escrow and a defeasance legal opinion. Such opinions and Verification Report shall be addressed to the Bond Insurer and shall be in form and substance satisfactory to the Bond Insurer. In addition, the escrow agreement shall provide that:
(a) Any substitution of securities shall require the delivery of a Verification Report, an opinion of bond counsel that such substitution will not adversely affect the exclusion (if interest on the Bonds is excludable) from gross income of the holders of the Bonds of the interest on the Bonds for federal income tax purposes and the prior written consent of the Bond Insurer.
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(b) The City will not exercise any prior optional redemption of Bonds secured by the escrow agreement or any other redemption other than mandatory sinking fund redemptions (if any) unless (i) the right to make any such redemption has been expressly reserved in the escrow agreement and such reservation has been disclosed in detail in the official statement for the refunding bonds, and (ii) as a condition to any such redemption there shall be provided to the Bond Insurer a Verification Report as to the sufficiency of escrow receipts without reinvestment to meet the escrow requirements remaining following any such redemption.
(c) The City shall not amend the escrow agreement or enter into a forward purchase agreement or other agreement with respect to rights in the escrow without the prior written consent of the Bond Insurer.
3. Trustee.
(a) The Bond Insurer shall receive prior written notice of any name change of the Trustee or the resignation or removal of the Trustee. Any Trustee must be (i) a national banking association that is supervised by the Office of the Comptroller of the Currency and has at least $250 million of assets, (ii) a state-chartered commercial bank that is a member of the Federal Reserve System and has at least $1 billion of assets, or (iii) otherwise approved by the Bond Insurer in writing.
(b) No removal, resignation or termination of the Trustee shall take effect until a successor, acceptable to the Bond Insurer, shall be appointed.
4. Amendments, Supplements and Consents. The Bond Insurer’s prior written consent is required for all amendments and supplements to the Indenture, with the exceptions noted below. The City shall send copies of any such amendments or supplements to the Bond Insurer and the rating agencies which have assigned a rating to the Bonds.
(a) Consent of the Bond Insurer. Any amendments or supplements to the Indenture shall require the prior written consent of the Bond Insurer with the exception of amendments or supplements:
(i) to cure any ambiguity or formal defect or omissions or to correct any inconsistent provisions in the Indenture or in any
supplement thereto, or
(ii) to grant or confer upon the Bond holders any additional rights, remedies, powers authority or security that may lawfully be granted to or conferred upon the Bond holders, or
(iii) to add to the conditions, limitations and restrictions on the delivery of Bonds under the provisions of the transaction documents other conditions, limitations and restrictions thereafter to be observed or
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(iv) to add to the covenants and agreements of the City in the Indenture other covenants and agreements thereafter to be observed by the City or to surrender any right or power therein reserved to or conferred upon the City.
(b) Consent of the Bond Insurer in Addition to Bond Holder Consent. Any amendment, supplement, modification to, or waiver of, any of the Indenture that requires the consent of holders of the Bonds or adversely affects the rights or interests of the Bond Insurer shall be subject to the prior written consent of the Bond Insurer. (c) Consent of the Bond Insurer in the Event of Insolvency. Any reorganization or liquidation plan with respect to the City must be acceptable to the Bond Insurer in writing. In the event of any reorganization or liquidation of the City, the Bond Insurer shall have the right to vote on behalf of all holders of the Bonds absent a continuing failure by the Bond Insurer to make a payment under the Bond Insurance Policy.
(d) Consent of the Bond Insurer Upon Default. Anything in the Indenture to the contrary notwithstanding, upon the occurrence and continuance of a default or an event of default, the Bond Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the holders of the Bonds or the Trustee for the benefit of the holders of the Bonds under the Indenture. The Trustee may not waive any default or event of default without the Bond Insurer’s written consent.
(e) Bond Insurer as Owner. Upon the occurrence and continuance of a default or an event of default, the Bond Insurer shall be deemed to be the sole owner of the Bonds for all purposes under the Indenture, including, without limitations, for purposes of exercising remedies and approving amendments.
(f) Consent of the Bond Insurer for Acceleration. The Bond Insurer’s prior written consent is required as a condition precedent to and in all instances of acceleration. No acceleration is permitted under the Lease Agreement.
(g) Grace Period for Payment Defaults. No grace period shall be permitted for payment defaults on the Bonds.
(h) Special Provisions for Insurer Default. If an Insurer Default shall occur and be continuing, then, notwithstanding anything in paragraphs 4(a)-(e) above to the contrary, (1) if at any time prior to or following an Insurer Default, the Bond Insurer has made payment under the Bond Insurance Policy, to the extent of such payment the Bond Insurer shall be treated like any other holder of the Bonds for all purposes, including giving of consents, and (2) if the Bond Insurer
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has not made any payment under the Bond Insurance Policy, the Bond Insurer shall have no further consent rights until the particular Insurer Default is no longer continuing or the Bond Insurer makes a payment under the Bond Insurance Policy, in which event, the foregoing clause (1) shall control. For purposes of this paragraph (h), “Insurer Default” means: (A) the Bond Insurer has failed to make any payment under the Bond Insurance Policy when due and owing in accordance with its terms; or (B) the Bond Insurer shall (i) voluntarily commence any proceeding or file any petition seeking relief under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or similar law, (ii) consent to the institution of or fail to controvert in a timely and appropriate manner, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for such party or for a substantial part of its property, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take action for the purpose of effecting any of the foregoing; or (C) any state or federal agency or instrumentality shall order the suspension of payments on the Bond Insurance Policy or shall obtain an order or grant approval for the rehabilitation, liquidation, conservation or dissolution of the Bond Insurer (including without limitation under the New York Insurance Law).
5. Bond Insurer As Third Party Beneficiary. The Bond Insurer is recognized as and shall be deemed to be a third party beneficiary of the Indenture and may enforce the provisions of the Indenture as if it were a party thereto.
6. Payment Procedure Under the Bond Insurance Policy. In the event that principal and/or interest due on the Bonds shall be paid by the Bond Insurer pursuant to the Bond Insurance Policy, the Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the City, the assignment and pledge of the trust estate and all covenants, agreements and other obligations of the City to the registered owners shall continue to exist and shall run to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of such registered owners including, without limitation, any rights that such owners may have in respect of securities law violations arising from the offer and sale of the Bonds.
In the event that on the second Business Day prior to any payment date on the Bonds, the Trustee has not received sufficient moneys to pay all principal of and interest on the Bonds due on such payment date, the Trustee shall immediately notify the Bond Insurer or its designee on the same business day by telephone or electronic mail, of the amount of the deficiency. If any deficiency is made up in whole or in part prior to or on the payment date, the Trustee shall so notify the Bond Insurer or its designee.
In addition, if the Trustee has received written notice that any holder of the Bonds has been required to disgorge payments of principal or interest on the Bonds pursuant to a final, non-appealable order by a court of competent jurisdiction that such payment constitutes an avoidable preference to such holder within the meaning of any applicable
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bankruptcy law, then the Trustee shall notify the Bond Insurer or its designee of such fact by telephone or electronic mail, or by overnight or other delivery service as to which a delivery receipt is signed by a person authorized to accept delivery on behalf of the Bond Insurer.
The Trustee shall irrevocably be designated, appointed, directed and authorized to act as attorney-in-fact for holders of the Bonds as follows:
(a) If there is a deficiency in amounts required to pay interest and/or principal on the Bonds, the Trustee shall (i) execute and deliver to the Bond Insurer, in form satisfactory to the Bond Insurer, an instrument appointing the Bond Insurer as agent and attorney-in-fact for such holders of the Bonds in any legal proceeding related to the payment and assignment to the Bond Insurer of the claims for interest on the Bonds, (ii) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment from the Bond Insurer with respect to the claims for interest so assigned, and (iii) disburse the same to such respective holders; and
(b) If there is a deficiency in amounts required to pay principal of the Bonds, the Trustee shall (i) execute and deliver to the Bond Insurer, in form satisfactory to the Bond Insurer, an instrument appointing the Bond Insurer as agent and attorney in- fact for such holder of the Bonds in any legal proceeding related to the payment of such principal and an assignment to the Bond Insurer of the Bonds surrendered to the Bond Insurer, (ii) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment therefore from the Bond Insurer, and (iii) disburse the same to such holders. The Trustee shall designate any portion of payment of principal on Bonds paid by the Bond Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Bonds registered to the then current holder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Bond Insurer, registered in the name directed by the Bond Insurer, in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Trustee's failure to so designate any payment or issue any replacement Bond shall have no effect on the amount of principal or interest payable by the City on any Bond or the subrogation or assignment rights of the Bond Insurer.
Payments with respect to claims for principal of and interest on the Bonds disbursed by the Trustee from proceeds of the Bond Insurance Policy shall not be considered to discharge the obligation of the City with respect to such Bonds, and the Bond Insurer shall become the owner of such unpaid Bonds and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of the preceding paragraphs or otherwise.
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Irrespective of whether any such assignment is executed and delivered, the City and the Trustee agree for the benefit of the Bond Insurer that:
(a) They recognize that to the extent the Bond Insurer makes payments directly or indirectly (e.g., by paying through the Trustee), on account of principal of or interest on the Bonds, the Bond Insurer will be subrogated to the rights of such holders to receive the amount of such principal and interest from the City, with interest thereon, as provided and solely from the sources stated in the transaction documents and the Bonds; and
(b) They will accordingly pay to the Bond Insurer the amount of such principal and interest, with interest thereon as provided in the transaction documents and the Bonds, but only from the sources and in the manner provided therein for the payment of principal of and interest on the Bonds to the Bond holders, and will otherwise treat the Bond Insurer as the owner of such rights to the amount of such principal and interest.
7 Additional Payments. The City agrees unconditionally that it will pay or reimburse the Bond Insurer on demand any and all reasonable charges, fees, costs, losses, liabilities and expenses that the Bond Insurer may pay or incur, including, but not limited to, fees and expenses of the Bond Insurer’s agents, attorneys, accountants, consultants, appraisers and auditors and reasonable costs of investigations, in connection with the administration (including waivers and consents, if any), enforcement, defense, exercise or preservation of any rights and remedies in respect of the Indenture (“Administrative Costs”). For purposes of the foregoing, costs and expenses shall include a reasonable allocation of compensation and overhead attributable to the time of employees of the Bond Insurer spent in connection with the actions described in the preceding sentence. The City agrees that failure to pay any Administrative Costs on a timely basis will result in the accrual of interest on the unpaid amount at the Late Payment Rate, compounded semi-annually, from the date that payment is first due to the Bond Insurer until the date the Bond Insurer is paid in full.
Notwithstanding anything herein to the contrary, the City agrees to pay to the Bond Insurer (i) a sum equal to the total of all amounts paid by the Bond Insurer under the Bond Insurance Policy (“the Bond Insurer Policy Payment”); and (ii) interest on such the Bond Insurer Policy Payments from the date paid by the Bond Insurer until payment thereof in full by the City, payable to the Bond Insurer at the Late Payment Rate per annum (collectively, “the Bond Insurer Reimbursement Amounts”) compounded semi-annually.
The City hereby covenants and agrees that the Bond Insurer Reimbursement Amounts are payable as a Lease Payment under the Lease Agreement.
8. Reserve Fund. The prior written consent of the Bond Insurer is a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the Reserve Fund, if any. Amounts on deposit in the Reserve Fund shall be applied solely to the payment of debt service due on the Bonds.
9. Exercise of Rights by the Bond Insurer. The rights granted to the Bond Insurer under the Indenture to request, consent to or direct any action are rights granted
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to the Bond Insurer in consideration of its issuance of the Bond Insurance Policy. Any exercise by the Bond Insurer of such rights is merely an exercise of the Bond Insurer’s contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the holders of the Bonds and such action does not evidence any position of the Bond Insurer, affirmative or negative, as to whether the consent of the holders of the Bonds or any other person is required in addition to the consent of the Bond Insurer.
10. Entitlement to Payment. The Bond Insurer shall be entitled to pay principal or interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the City (as such terms are defined in the Bond Insurance Policy) and any amounts due on the Bonds as a result of acceleration of the maturity thereof in accordance with the Indenture, whether or not the Bond Insurer has received a claim upon the Bond Insurance Policy.
19.93 B-1
APPENDIX D
PROVISIONS RELATING TO RESERVE POLICY
Notwithstanding anything to the contrary set forth in this Indenture, the City and the Trustee agree to comply with the following provisions:
(a) The City shall repay any draws under the Reserve Policy and pay all related reasonable expenses incurred by the Bond Insurer. Interest shall accrue and be payable on such draws and expenses from the date of payment by the Bond Insurer at the Late Payment Rate. “Late Payment Rate” means the lesser of (A) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in the City of New York, as its prime or base lending rate (“Prime Rate”) (any change in such Prime Rate to be effective on the date such changes are announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest rate of interest on the Bonds, and (B) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate publicly, Prime Rate shall be the publicly announced prime or base lending rate of such bank, banking association or trust company bank as the Bond Insurer in its sole and absolute discretion shall specify.
Repayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, the “Policy Costs”) shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate of Policy Costs related to such draw.
Amounts in respect of Policy Costs paid to the Bond Insurer shall be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to the Bond Insurer on account of principal due, the coverage under the Reserve Policy will be increased by a like amount, subject to the terms of the Reserve Policy.
All cash and investments in the Reserve Fund established for the Bonds shall be transferred to the Bond Fund for payment of the debt service on the Bonds before any drawing may be made on the Reserve Policy in lieu of cash.
Payment of any Policy Cost shall be made prior to replenishment of any cash amounts. Draws on the Reserve Policy on which there is available coverage shall be made on a pro-rata basis (calculated by reference to the coverage then available thereunder) after applying all available cash and investments in the Reserve Fund. For the avoidance of doubt, “available coverage” means the coverage then available for disbursement pursuant to the terms of the applicable alternative credit instrument without regard to the legal or financial ability or willingness of the provider of such instrument to honor a claim or draw thereon or the failure of such provider to honor any such claim or draw.
(b) Draws under the Reserve Policy may only be used to make payments on Bonds insured by the Bond Insurer.
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(c) If the City shall fail to pay any Policy Costs in accordance with the requirements of paragraph (a) above, the Bond Insurer shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under the Indenture other than (i) acceleration of the maturity of the Bonds, or (ii) remedies which would adversely affect owners of the Bonds.
(d) The Indenture shall not be discharged until all Policy Costs owing to the Bond Insurer shall have been paid in full. The City’s obligation to pay such amount shall expressly survive payment in full of the Bonds.
(e) The Trustee shall ascertain the necessity for a claim upon the Reserve Policy in accordance with the provisions of paragraph (a) hereof and provide notice to the Bond Insurer at least three business days prior to each date upon which interest or principal is due on the Bonds.
(f) The Reserve Policy shall expire on the earlier of the date the Bonds are no longer outstanding and the final maturity date of the Bonds.
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APPENDIX B
FORM OF PROJECT FUND REQUISITION
REQUISITION NO. __ OF THE CITY TO TRUSTEE FOR
DISBURSEMENT FROM THE PROJECT FUND
The undersigned hereby states and certifies that:
(i) I am the duly appointed, qualified and acting City Manager of the City of Santa Cruz, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (the “City”), and as such, I am familiar with the facts herein certified and am authorized to certify the same; (ii) pursuant to Section 3.04 of the Indenture of Trust dated as of May 1, 2025 (the “Indenture”), between the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), the Trustee is hereby requested to disburse this date from the Project Fund established under Indentureto the payees set forth on Exhibit A attached hereto and by this reference incorporated herein, the respective sum set forth opposite each such payee, for the purposes identified therein;
(iii) each item to be paid pursuant to this Requisition has been properly incurred, is a proper charge against the Project Fund and has not been the basis of any previous disbursement;
(iv) each amount to be disbursed herein is for payment of a Project Cost; and (v) all payments shall be made by check or wire transfer in accordance with payment instructions contained in Exhibit A or in any related invoice, and the Trustee has no duty or obligation to authenticate such payment instructions or the authorization thereof.
Capitalized terms used herein and not otherwise defined have the meanings given them in the Indenture.
Dated: CITY OF SANTA CRUZ
By:
Name
Title
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EXHIBIT A
PROJECT FUND DISBURSEMENTS
Payee Name and Address Purpose of Obligation Amount
19.97 Jones Hall Draft of Mar. 24, 2025
PRELIMINARY OFFICIAL STATEMENT DATED _____________, 2025 NEW ISSUE – FULL BOOK-ENTRY RATINGS: S&P (Insured): “AA” See “INSURED RATING” herein.
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes, and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the Bonds may be subject to the corporate alternative minimum tax. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See “TAX MATTERS.”
$_____________*
CITY OF SANTA CRUZ
2025 Parking Revenue Bonds
Dated: Date of Delivery Due: April 1, as shown on inside cover Authority for Issuance. The captioned bonds (the “Bonds”) are being issued by the City of Santa Cruz (the “City”) pursuant to the City Charter, the City of Santa Cruz Enterprise Revenue Bond Law, constituting Chapter 16.26 of the Santa Cruz Municipal Code (the “Bond Law”), a resolution adopted by the City Council of the City and pursuant to an Indenture of Trust dated as of May 1, 2025 (the “Indenture”) between the City and U.S. Bank Trust Company, National Association, San Francisco, California, as trustee (the “Trustee”). See “THE BONDS – Authority for Issuance.”
Purpose. The proceeds of the Bonds will be used to (i) finance a new parking garage for the City’s parking enterprise system (the “Parking Enterprise”), (ii) pay capitalized interest on the Bonds through _________1, 20__, and (iii) pay the costs of issuing the Bonds. See “THE FINANCING PLAN.”
Security for the Bonds. The Bonds are special limited obligations of the City, payable from, and secured by a pledge of and lien on, certain revenues of the Parking Enterprise and from amounts on deposit in certain funds and accounts established under the Indenture. Prior to the Net Revenue Conversion Date, the Bonds shall be secured by a first pledge of and lien on all of the Gross Revenues; from and after the Net Revenue Conversion Date, the Bonds shall be secured by a first pledge of and lien on all of the Net Revenues. See “SECURITY FOR THE BONDS.”
Future Parity Obligations. The City does not currently have any outstanding debt secured by the Gross Revenues or Net Revenues of the Parking Enterprise. In the future, however, the City may issue debt secured by the Gross Revenues or Net Revenues of the Parking Enterprise on a parity basis, subject to the conditions set forth in the Indenture. See “SECURITY FOR THE BONDS – Parity Obligations.” Bond Terms; Book-Entry Only. The Bonds will bear interest at the rates shown on the inside cover page, payable semiannually on April 1 and October 1 of each year, commencing on October 1, 2025, and will be issued in fully-registered form without coupons in the denomination of $5,000 or any integral multiple of $5,000. The Bonds will be issued in book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). Purchasers of the Bonds will not receive certificates representing their interests in the Bonds. Payments of the principal of, premium, if any, and interest on the Bonds will be made to DTC, which is obligated in turn to remit such principal, premium, if any, and interest to its DTC Participants for subsequent disbursement to the beneficial owners of the Bonds. See “THE BONDS - Description” and “APPENDIX F – DTC and the Book Entry Only System.” Redemption. The Bonds are subject to redemption prior to maturity as described herein. See “THE BONDS –Redemption.” Bond Insurance and Reserve Surety. Concurrently with the issuance of the Bonds, Build America Mutual Assurance Company (“BAM”) will issue its Municipal Bond Insurance Policy for the Bonds (the “Policy”). The Policy guarantees the scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement. See “BOND INSURANCE.” BAM is also issuing a reserve fund insurance policy in the amount of the Reserve Requirement for the Bonds. See “SECURITY FOR THE BONDS – Debt Service Reserve Fund.”
[BAM LOGO]
THE BONDS ARE SPECIAL OBLIGATIONS OF THE CITY AND ARE PAYABLE EXCLUSIVELY FROM THE GROSS REVENUES OR
NET REVENUES OF THE PARKING ENTERPRISE AND FROM AMOUNTS ON DEPOSIT IN CERTAIN FUNDS AND ACCOUNTS ESTABLISHED UNDER THE INDENTURE. THE BONDS ARE NOT A DEBT, LIABILITY OR OBLIGATION OF THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS OTHER THAN THE CITY TO THE LIMITED EXTENT SET FORTH HEREIN. SEE “SECURITY FOR THE BONDS.”
This cover page contains information for quick reference only. It is not intended to be a summary of all factors relating to an investment in the Bonds. Investors must read the entire Official Statement before making any investment decision.
MATURITY SCHEDULE
(See inside cover)
[UNDERWRITER LOGO]
The Bonds are offered when, as and if issued, and accepted by the Underwriter, subject to approval as to legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, and subject to certain other conditions. Jones Hall is also serving as Disclosure Counsel to the City. Certain matters will be passed upon for the City by the City Attorney. It is anticipated that the Bonds will be available for delivery in book-entry form on or about May ___, 2025.
This Official Statement is dated _________ __, 2025.
___________________
* Preliminary; subject to change.
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer solicitation or sale would be unlawful
19.98 $__________*
CITY OF SANTA CRUZ
2025 Parking Revenue Bonds
MATURITY SCHEDULE
Base CUSIP†: __________
Maturity
(April 1)
Principal
Amount
Interest
Rate Price
CUSIP†
Number
* Preliminary; subject to change.
† CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Global Ratings on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. CUSIP numbers have been assigned by an independent company not affiliated with the District and are included solely for the convenience of investors. Neither the City nor the Trustee is responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.
19.99 GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations with respect to the Bonds other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized.
No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.
Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the City or any other parties described in this Official Statement.
Use of this Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to in this Official Statement and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the Bonds.
Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
Document References and Summaries. All references to and summaries of the Indenture or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents.
Bonds are Exempt from Securities Laws Registration. The issuance and sale of the Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.
Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effect transactions which stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public offering prices set forth on the cover page hereof and said public offering prices may be changed from time to time by the Underwriter.
Estimates and Projections. Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words.
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING
STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE
ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.
THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR
WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.
Bond Insurance. Build America Mutual Assurance Company (“BAM”) makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, BAM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding BAM, supplied by BAM and presented under the heading “BOND INSURANCE” and “APPENDIX G – Specimen Municipal Bond Insurance Policy”.
Website. The City maintains a website. However, the information presented on the website is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds.
19.100
CITY OF SANTA CRUZ
CITY COUNCIL
Fred Keeley, Mayor
Shebreh Kalantari-Johnson, Vice Mayor (District 3)
Gabriela Trigueiro, Council Member (District 1)
Sonja Brunner, Council Member (District 2)
Scott Newsome, Council Member (District 4)
Susie O’Hara, Council Member (District 5)
Renee Golder, Council Member (District 6)
CITY OFFICIALS
Matt Huffaker, City Manager
Elizabeth Cabell, Finance Director
Anthony P. Condotti, City Attorney
Bonnie Bush, CMC, City Clerk
_________________________________________________________ BOND COUNSEL and DISCLOSURE COUNSEL
Jones Hall, A Professional Law Corporation
San Francisco, California
MUNICIPAL ADVISOR
NHA Advisors, LLC
San Rafael, California
TRUSTEE
U.S. Bank Trust Company, National Association
San Francisco, California
19.101
-iTABLE OF CONTENTS
Page Page
INTRODUCTION .......................................1
THE FINANCING PLAN.............................3
New Parking Garage ..............................3
Estimated Sources and Uses of Funds...4
Debt Service Schedule ...........................5
THE BONDS..............................................6 Authority for Issuance.............................6
Description .............................................6 Redemption*...........................................7 General Redemption Provisions .............8
SECURITY FOR THE BONDS...................9
Initial Pledge; Net Revenue
Conversion Date................................. 9
Receipt, Deposit and Application of
Gross Revenues ...............................11
Application of Bond Fund......................12
Debt Service Reserve Fund..................12
Parity Obligations ................................. 13 Superior and Subordinate Obligations ..13
Rate Covenant; Collection of Rates
and Charges .....................................13
Payment of Operation and
Maintenance Costs ...........................14
Insurance; Net Proceeds ......................14
BOND INSURANCE................................. 15
Bond Insurance Policy..........................15
Build America Mutual Assurance
Company ..........................................15
THE CITY ................................................17 General ................................................17 Financial Statements ............................17
Employee Retirement System and
OPEB ...............................................17
Investment Policies and Procedures.....18
Risk Management and Self-Insurance..18
THE PARKING ENTERPRISE.................19
Overview ..............................................19 Current Facilities of Parking Enterprise . 20
Ongoing Changes to Parking Facilities . 22
Parking Enterprise Revenue
Categories ........................................22
Rate Setting, Fines, Enforcement, and
Collection Procedures .......................24
Employees and Operations...................24
Parking Enterprise Indebtedness ..........25
Parking Enterprise Budgeting
Generally ..........................................25
Fiscal Year 2024-25 Budget..................25
Historical and Projected Debt Service
Coverage ..........................................26
CERTAIN RISK FACTORS ......................29
Parking Enterprise Demand..................29
Parking Enterprise Expenses................29
Future Parity Obligations ......................29
Articles XIllC and XIIID of the State
Constitution.......................................29
Natural Calamities ................................30
Climate Change/Sea Level Rise ...........33
Cyber Security ......................................33 Limited Recourse on Default.................34
Limitations on Remedies Available;
Bankruptcy........................................34
No Obligation to Tax .............................34
Change in Law......................................34
Loss of Tax Exemption .........................35
CONTINUING DISCLOSURE ..................35
INSURED RATING...................................35
TAX MATTERS........................................36
CERTAIN LEGAL MATTERS...................37
UNDERWRITING.....................................37
MUNICIPAL ADVISOR.............................38
NO MATERIAL LITIGATION ....................38
CONCLUDING INFORMATION ...............38
Professional Services; Contingent
Fees..................................................38 Additional Information ...........................38
Execution..............................................39 APPENDIX A AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR 2023-24
APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
APPENDIX C SANTA CRUZ AND SANTA CRUZ COUNTY GENERAL INFORMATION
APPENDIX D FORM OF BOND COUNSEL OPINION
APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE
APPENDIX F DTC AND THE BOOK ENTRY ONLY SYSTEM
APPENDIX G SPECIMEN MUNICIPAL BOND INSURANCE POLICY
19.102
Location Map
[To come]
19.103
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__________________________________
OFFICIAL STATEMENT
__________________________________
$________*
CITY OF SANTA CRUZ
2025 PARKING REVENUE BONDS
INTRODUCTION
This Official Statement, including the cover page and appendices, is provided to furnish information in connection with the sale by the City of Santa Cruz (the “City”) of its 2025 Parking Revenue Bonds (the “Bonds”). This Introduction contains a brief summary of certain information contained in this Official Statement. It is not intended to be complete and is qualified by the more detailed information contained elsewhere in this Official Statement. Definitions of certain terms used in this Official Statement are set forth in “APPENDIX B – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
The City and the Parking Enterprise. The City is located on Monterey Bay in Santa Cruz County (the “County”), in the State of California (the “State”), approximately 75 miles south of San Francisco and 30 miles south of San José. It is the county seat of the County, and has an estimated population of 62,776 as of January 1, 2024, according to the California Department of Finance. For selected information concerning the City and the surrounding area, see “APPENDIX C – SANTA CRUZ AND SANTA CRUZ COUNTY GENERAL INFORMATION.” The “Parking Enterprise” (as defined in the Indenture and described herein) means all public parking lots, off-street and on-street parking spaces, garages or other automotive or vehicular parking facilities owned, leased or otherwise controlled by the City within the area known as “Parking District No. 1,” including any and all incidental and related facilities and lands, easements, rights in lands, contract rights and franchises appurtenant thereto. The Parking Enterprise collects revenues from approximately 3,200 parking spaces, consisting of approximately 1,500 on-street metered parking spaces and 1,700 off-street parking spaces spread across various parking lots and garages in the City’s downtown area. Revenues primarily consist of permit revenues and metered parking revenues. Fines collected by the City for delinquent payments are not included in the revenues of the Parking Enterprise. For additional information on the Parking Enterprise, see “THE PARKING ENTERPRISE.” Authority for Issuance. The City is issuing the Bonds pursuant to the provisions of the City Charter, the City of Santa Cruz Enterprise Revenue Bond Law, constituting Chapter 16.26 of the Santa Cruz Municipal Code (the “Bond Law”), a resolution adopted by the City Council of the City on [April 22], 2025 (the “Bond Resolution”), and pursuant to an Indenture of Trust dated as of May 1, 2025 (the “Indenture”) between the City and U.S. Bank Trust Company, National Association, San Francisco, California, as trustee (the “Trustee”). See “THE BONDS – Authority for Issuance.”
* Preliminary; subject to change.
19.104
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Purpose of the Bonds. The proceeds of the Bonds will be used to (i) finance a new parking garage for the Parking Enterprise, (ii) pay capitalized interest on the Bonds through _________1, 20__, and (iii) pay the costs of issuing the Bonds. See “THE FINANCING PLAN.” Form of Bonds; Book-Entry Only. The Bonds will be issued in fully registered form, registered in the name of The Depository Trust Company (“DTC”), or its nominee, which will act as securities depository for the Bonds. Purchasers of the Bonds will not receive certificates representing the Bonds that are purchased. See “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Redemption. The Bonds are subject to redemption prior to maturity as described in “THE BONDS – Redemption” herein.
Security for the Bonds. The Bonds are special limited obligations of the City and are payable from and secured by a pledge of and lien on the Gross Revenues or Net Revenues (as such terms are defined herein) of the Parking Enterprise and from amounts on deposit in certain funds and accounts established under the Indenture. See “SECURITY FOR THE BONDS.” Bond Insurance and Reserve Surety. Concurrently with the issuance of the Bonds, Build America Mutual Assurance Company (“BAM”) will issue its Municipal Bond Insurance Policy for the Bonds (the “Policy”). The Policy guarantees the scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement. See “BOND INSURANCE.” BAM is also issuing a reserve fund insurance policy (the “Reserve Policy”) in the amount of the Reserve Requirement for the Bonds. See “SECURITY FOR THE BONDS – Debt Service Reserve Fund.”
Future Parity Obligations. The City does not currently have any outstanding debt secured by the Gross Revenues or Net Revenues of the Parking Enterprise. In the future, however, the City may issue debt secured by the Gross Revenues or Net Revenues of the Parking Enterprise on a parity basis, subject to the conditions set forth in the Indenture. See “CERTAIN RISK FACTORS” and “SECURITY FOR THE BONDS – Parity Obligations.” Rate Covenants. In the Indenture, the City covenants to fix, prescribe, revise and collect rates, fees and charges to generate sufficient Gross Revenues (defined in the Indenture and described herein) which are sufficient to pay certain amounts set forth in the Indenture and described herein, including, but not limited to, debt service on the Bonds and any other Parity Obligations. In addition, the City covenants to fix, prescribe, revise and collect rates, fees and charges sufficient to yield Net Revenues which are at least equal to 150% of debt service on the Bonds and any other Parity Obligations for such Fiscal Year.
Limited Obligation. Neither the Bonds nor the obligation to pay principal of or interest thereon constitutes a debt, obligation or liability of the City, the State of California or any of its political subdivisions within the meaning of any Constitutional limitation on indebtedness, or a pledge of the full faith and credit of the City. The Bonds are secured solely by the pledge of Net Revenues by the City and certain funds held under the Indenture. The Bonds are not secured by a pledge of the taxing power of the City.
Certain Risk Factors. The purchase of the Bonds involves certain risks. For a description of some of these risks, see “CERTAIN RISK FACTORS.”
19.105
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References to Documents. All descriptions and summaries of various documents in this Official Statement do not purport to be comprehensive or definitive, and reference is made to each document for complete details of all terms and conditions. All statements in this Official Statement are qualified in their entirety by reference to each document. Certain capitalized terms used in this Official Statement and not defined in this Official Statement have the meaning given them in “APPENDIX B – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
THE FINANCING PLAN
The proceeds of the Bonds will be used to (i) finance a new parking garage for the Parking Enterprise, (ii) pay capitalized interest on the Bonds through _________1, 20__, and (iii) pay the costs of issuing the Bonds.
New Parking Garage
The majority of the net proceeds of the Bonds will be used to finance capital improvement projects of the Parking Enterprise, expected to consist of a new downtown garage on the location of the City’s current parking lot no. 4 (610 Cedar Street).
The Cedar/Cathcart Parking Lot is located at the corner of Cedar and Cathcart streets, and is scheduled for redevelopment as part of the “Downtown Library & Affordable Housing Project.” Upon completion, the project is anticipated to include 124 affordable housing units, a 1,905 sq. ft. daycare and play area, a large new public library and a new parking garage with 243 spaces (anticipated to translate into approximately 250 permits, as spaces turn over throughout the day). The total cost of phase 1 of the project (which includes only the library façade, core and shell) is currently estimated at $153.9 million. Funding has been secured, with a combination of local housing trust fund, state and federal funds, developer financing, and financing from the Bonds for the garage.
The project is currently in the design phase, with construction planned to commence in 2025 and complete by the end of 2027.
19.106
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Estimated Sources and Uses of Funds
The anticipated sources and uses of funds relating to the Bonds are as follows:
Sources:
Principal Amount of Bonds $
Plus/Less [Net] Original Issue Premium/Discount
Total Sources: $
Uses:
Deposit to Project Fund $
Capitalized Interest
Costs of Issuance(2)
Total Uses: $
(1) Interest on the Bonds is being capitalized through __________ 1, 20___. (2) Costs of issuance includes Underwriter’s discount, premiums for the Policy and the Reserve Policy, Trustee fees, Municipal Advisor fees, Bond Counsel and Disclosure Counsel fees, printing costs, and other related costs.
19.107
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Debt Service Schedule
The scheduled aggregate annual principal and interest amounts payable with respect to the Bonds, without regard to any optional redemption, is set forth below.
CITY OF SANTA CRUZ
2025 Parking Revenue Bonds
Debt Service Schedule
Fiscal Year
Ending June 30, Principal Interest Total
Totals
____________
Source: Underwriter.
19.108
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THE BONDS
Authority for Issuance
The City is issuing the Bonds under the following legal authority: (i) the provisions of the City Charter, including Section 401 thereof, (ii) the Bond Law, (iii) the Bond Resolution, and (iv) the Indenture.
Description
The Bonds will be dated their date of issuance and delivery, will bear interest at the rates per annum set forth on the inside cover page hereof payable semiannually on April 1 and October 1 (each, an “Bond Payment Date”), commencing October 1, 2025, and will mature on the dates and in the amounts set forth on the inside cover page. The Bonds will be issued in denominations of $5,000 or any integral multiple thereof, so long as no Bond may have more than one maturity date. The Bonds will be issued only as one fully registered Bond for each maturity, in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), as registered owner of all Bonds. See “APPENDIX F – DTC and the Book-Entry Only System”. Ownership may be changed only upon the registration books maintained by the Trustee as provided in the Indenture.
See the discussion under “– General Redemption Provisions – Transfer and Exchange” below.
Interest on the Bonds is payable from the Bond Payment Date next preceding the date of authentication thereof unless: (i) a Bond is authenticated between an Bond Payment Date and the 15th calendar day of the month immediately preceding such Bond Payment Date (each, a “Record Date”), in which event it will bear interest from such Bond Payment Date; (ii) a Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the date of original delivery of the Bonds; or interest on any Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Bond Payment Date.
Interest on the Bonds (including the final interest payment upon maturity or redemption) is payable when due by check or draft of the Trustee mailed to the Owner thereof at such Owner’s address as it appears on the Registration Books at the close of business on the preceding Record Date; provided that at the written request of the Owner of at least $1,000,000 aggregate principal amount of Bonds, which written request is on file with the Trustee as of any Record Date, interest on such Bonds will be paid on the succeeding Bond Payment Date to such account in the United States as specified in such written request. The principal of the Bonds and any premium upon redemption, are payable in lawful money of the United States of America upon presentation and surrender thereof at the Office of the Trustee.
While the Bonds are held in the book-entry only system of DTC, all such payments will be made to Cede & Co., as the registered Owner of the Bonds. See “APPENDIX F – DTC and the Book Entry Only System.”
19.109
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Redemption*
Optional Redemption. The Bonds maturing on or before April 1, 20___, are not subject to redemption prior to their respective stated maturities. The Bonds maturing on or after April 1, 20___, are subject to redemption in whole, or in part among maturities on such basis as set forth in a certificate of the City filed with the Trustee, and in any event by lot within a maturity, at the option of the City, from any available source of funds, on any date on or after April 1, 20___, at a redemption price equal to 100% of the principal amount thereof to be redeemed, together with accrued interest thereon to the redemption date, without premium.
Mandatory Sinking-Fund Redemption. The Bonds maturing on April 1, 20__ and April 1, 20__ (the “Term Bonds”) are subject to mandatory redemption in part by lot, at a redemption price equal to 100% of the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on April 1 in the respective years as set forth in the following tables; provided, however, that if some but not all of such Term Bonds have been redeemed pursuant to the optional redemption provisions described above, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of the Term Bonds so redeemed, to be allocated among such sinking fund payments on such basis as shall be determined by the City, in integral multiples of $5,000 (as set forth in a schedule provided by the City to the Trustee).
Mandatory Sinking Fund Redemption of
Term Bonds Maturing April 1, 20__
Sinking Fund
Redemption Date
(April 1)
Principal Amount
To Be Redeemed
Mandatory Sinking Fund Redemption of
Term Bonds Maturing April 1, 20__
Sinking Fund
Redemption Date
(April 1)
Principal Amount
To Be Redeemed
Redemption From Net Proceeds of Insurance, Sale and Condemnation. The Bonds are subject to mandatory redemption, on any date, in whole, or in part on a pro rata basis among maturities, from the net proceeds of insurance, sale or condemnation credited towards the redemption of the Bonds by the City pursuant to the Indenture. The Bonds are subject to * Preliminary; subject to change.
19.110
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redemption under this provision at a redemption price equal to the principal amount represented thereby to be redeemed, without premium, together with accrued interest represented thereby to the redemption date
General Redemption Provisions
Notice of Redemption. The Trustee on behalf and at the expense of the City shall mail (by first class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books, and to the Securities Depositories and to one or more Information Services, at least 20 but not more than 60 days prior to the date fixed for redemption; provided, however, that neither failure to receive any such notice so mailed nor any defect therein will affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon. Such notice must state the date of the notice, the redemption date, the redemption place and the redemption price and must designate the CUSIP numbers, the Bond numbers and the maturity or maturities (in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and must require that such Bonds be then surrendered at the Office of the Trustee identified in such notice for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date. In addition, the redemption notice must state that the City has the right to rescind the notice, if applicable.
Right to Rescind Notice of Optional Redemption. The City has the right to rescind any notice of the optional redemption of Bonds by written notice to the Trustee prior to the date fixed for redemption. Any notice of optional redemption will be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation will not constitute an Event of Default under the Indenture. The City and the Trustee have no liability to the Owners or any other party related to or arising from such rescission of redemption.
Selection of Bonds for Redemption. Whenever provision is made in in the Indenture for the redemption of fewer than all of the Bonds, the Trustee shall select the Bonds to be redeemed by lot in any manner which the Trustee in its sole discretion deems appropriate. For purposes of such selection, all Bonds will be deemed to be comprised of separate $5,000 denominations and such separate denominations will be treated as separate Bonds which may be separately redeemed. If only a portion of any Bond is called for redemption, then upon surrender of such Bond the City shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the City, a new Bond or Bonds of the same series and maturity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond to be redeemed.
Effect of Redemption. From and after the date fixed for redemption, if notice of redemption has been duly mailed and funds available for the payment of the principal of and interest (and premium, if any) on the Bonds so called for redemption have been duly provided, such Bonds so called shall cease to be entitled to any benefit under this Indenture other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice. Unless otherwise directed in writing by the City, the Trustee shall cancel and destroy all Bonds redeemed under the Indenture.
Purchase in Lieu of Redemption. In lieu of redemption of any Bonds as provided above, amounts held by the Trustee for such redemption may, with the consent of the Bond Insurer and at the Request of the City received by the Trustee at least 75 days prior to the selection of Bonds
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for redemption, be applied by the Trustee to the purchase of Bonds at public or private sale as and when and at such prices (including brokerage, accrued interest and other charges) as the City may in its discretion direct, in writing, but the City will not provide any directions which would exceed the redemption price which would be payable if such Bonds were redeemed.
Transfer and Exchange. So long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, transfers and exchanges of Bonds will be made in accordance with DTC procedures. See APPENDIX F – DTC and the Book Entry Only System.
Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form approved by the Trustee. Whenever any Bond or Bonds shall be surrendered for registration or transfer, the City shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds of like series, maturity, interest rate and aggregate principal amount. The City shall pay all costs of the Trustee incurred in connection with any such transfer, except that the Trustee may require the payment by the Bond Owner of any tax or other governmental charge required to be paid with respect to such transfer.
Bonds may be exchanged at the Office of the Trustee, for a like aggregate principal amount of Bonds representing other authorized denominations of the same series, interest rate and maturity. The City shall pay all costs of the Trustee incurred in connection with any such exchange, except that the Trustee may require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.
SECURITY FOR THE BONDS
Initial Pledge; Net Revenue Conversion Date
General. Prior to the Net Revenue Conversion Date, the Bonds shall be secured by a first pledge of and lien on all of the Gross Revenues of the Parking Enterprise. From and after the Net Revenue Conversion Date, the Bonds shall be secured by a first pledge of and lien on all of the Net Revenues of the Parking Enterprise. In addition, the Bonds are secured by a pledge of all of the moneys in the Sinking Fund and the Bond Fund, including all amounts derived from the investment of such moneys. The Bonds and all other Parity Obligations (if any) shall be equally secured by a pledge, charge and lien upon the Pledged Revenues and such other moneys without priority for series, issue, number or date and the payment of the interest on and principal of the Bonds shall be and are secured by an exclusive pledge, charge and lien upon the Pledged Revenues and such other moneys. So long as any of the Bonds are Outstanding, the Pledged Revenues and such other moneys may not be used for any other purpose; except as expressly permitted by the Indenture.
Determination of Net Revenue Conversion Date. In the event the City determines that the Coverage Test has been met for any Fiscal Year following the completion of the Public Parking Project, the City shall file with the Trustee a Certificate of the City which states such determination and identifies the calculations which demonstrate that the Coverage Test has been met. As provided in the Indenture, upon the filing of such Certificate of the City with the Trustee the pledge of Gross Revenues for the security of the Bonds shall be converted to a pledge of Net Revenues.
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In the event the amount of Gross Revenues in any Fiscal Year following the Net Revenue Conversion Date fails to meet the Coverage Test, the Bonds shall nevertheless remain secured by a pledge of the Net Revenues. The determination by the City that the Coverage Test has been met shall be binding and conclusive.
Key Definitions. Set forth below are the definitions of certain terms used in the Indenture and above:
“Coverage Test” means that the Net Revenues for any full Fiscal Year following the completion of the Public Parking Project, based on financial statements of the City for such Fiscal Year which have been audited in accordance with the Indenture, are at least equal to 150% of the amount of Maximum Annual Debt Service for such Fiscal Year. “Gross Revenues” means all gross income and revenue received by the City from the ownership and operation of the Parking Enterprise, including, without limiting the generality of the foregoing: (a) amounts received from on-street parking facilities, parking garages and other off-street parking facilities, including parking meter revenues, rental income and amounts received from the sale of parking permits; (b) parking deficiency fees. assessments and other in lieu parking charges; (c) income derived from the investment of amounts in the Parking Enterprise Fund; and (d) all other income and revenue which is accounted for by the City within the Parking Enterprise Fund. The term “Gross Revenues” does not include amounts received from fines, citations and other parking infractions. “Net Revenue Conversion Date” means the date on which the City files with the Trustee a Certificate of the City stating that the Coverage Test has been met. “Net Revenues” means, for any period, an amount equal to all of the Gross Revenues received during such period, minus the amount required to pay all Operation and Maintenance Costs becoming payable during such period. “Operation and Maintenance Costs” means the reasonable and necessary costs paid or incurred by the City for maintaining and operating the Parking Enterprise, determined in accordance with generally accepted accounting principles, including but not limited to (a) all reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Parking Enterprise in good repair and working order, and (b) all administrative costs of the City that are charged directly or apportioned to the operation of the Parking Enterprise, such as salaries and wages of employees, overhead, taxes (if any) and insurance. “Operation and Maintenance Costs” do not include (i) administrative costs of the Bonds which the City is required to pay under this Indenture, (ii) payments of debt service on bonds, notes or other obligations issued by the City with respect to the Parking Enterprise, (iii) depreciation, replacement and obsolescence charges or reserves therefor, and (iv) amortization of intangibles or other bookkeeping entries of a similar nature.
“Pledged Revenues” means (a) prior to the Net Revenue Conversion Date, the Gross Revenues of the Parking Enterprise, and (b) from and after the Net Revenue Conversion Date, the Net Revenues of the Parking Enterprise. “Public Parking Project” means the parking garage to be constructed by the City at the intersection of Cedar and Cathcart Streets in downtown Santa Cruz, which is being partially financed with the Bonds. As provided in Section 3.06, the City has the right to
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change or modify the description of the Public Parking Project or any component thereof in its sole discretion. See “THE FINANCING PLAN” for additional details.
Receipt, Deposit and Application of Gross Revenues
General. The City has previously established the Parking Enterprise Fund, which it will continue to hold and maintain for the purposes and uses set forth in the Indenture and the Parity Obligation Documents. The City shall withdraw amounts on deposit in the Parking Enterprise Fund and apply such amounts at the times and for the purposes, and in the priority, as follows:
(i) following the Net Revenue Conversion Date (but only following the Net Revenue Conversion Date), all Operation and Maintenance Costs; (ii) all payments of principal of and interest on the Bonds and any Parity Obligations;
(iii) prior to the Net Revenue Conversion Date, all Operation and Maintenance Costs;
(iv) to the Trustee the amount of any deficiency in the Reserve Fund or in any reserve fund established for Parity Obligations, the notice of which deficiency has been given to the City in accordance with the related Parity Obligation Documents;
(v) any other payments required to comply with the provisions of this Indenture and any Parity Debt Documents, including Operation and Maintenance Costs prior to the Net Revenue Conversion Date; and
(vi) any other lawful purposes as described below.
No Preference or Priority. Payment of the principal of and interest on the Bonds and any Parity Obligations shall be made without preference or priority. If the amount of Pledged Revenues on deposit in the Parking Enterprise Fund is at any time insufficient to enable the City to pay when due the principal of and interest on the Bonds and any Parity Obligations, such payments shall be made on a pro rata basis.
Other Uses of Parking Enterprise Fund. The City will manage, conserve and apply moneys in the Parking Enterprise Fund in such a manner that all deposits required to be made under the Indenture and any Parity Obligation Document, will be made at the times and in the amounts so required. So long as no event of default has occurred and is continuing under and as defined in the Indenture, the City may at any time use and apply moneys in the Parking Enterprise Fund for any one or more of the following purposes:
(i) the payment of any subordinate or unsecured obligations, (ii) the acquisition and construction of improvements to the Parking Enterprise; (iii) the prepayment of any other obligations of the City relating to the Parking Enterprise; or
(iv) any other lawful purpose of the City.
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Application of Bond Fund
At least three Business Days prior to each Bond Payment Date, the City shall withdraw from the Parking Enterprise Fund and transfer to the Trustee an amount of Pledged Revenues which, together with other available amounts then on deposit in the Bond Fund, is at least equal to the aggregate amount of principal and interest coming due on the Bonds on such Bond Payment Date.
The Trustee shall deposit such amounts upon receipt thereof in a special fund designated as the “Bond Fund” which the Trustee shall establish, maintain and hold in trust, to be held, disbursed, allocated and applied by the Trustee only as provided in this Indenture. The Trustee shall apply amounts in the Bond Fund solely for the purpose of (i) paying the interest on the Outstanding Bonds when due and payable (including accrued interest on any Bonds purchased or redeemed hereunder), (ii) paying the principal of the Bonds at the maturity thereof, and (iii) paying the principal of the Term Bonds upon the mandatory sinking fund redemption thereof.
Upon the payment of all Outstanding Bonds, the Trustee shall transfer any moneys remaining in the Bond Fund to the City for deposit into the Parking Enterprise Fund.
Debt Service Reserve Fund
A debt service reserve fund (the “Reserve Fund”) is being established in connection with the Bonds in the amount of the “Reserve Requirement,” which means $__________, being the amount of Maximum Annual Debt Service determined as of the Closing Date. The Reserve Requirement is not subject to increase or decrease for any reason. . At the closing of the Bonds, BAM will deliver its Reserve Policy in the amount of the Reserve Requirement.
The Reserve Policy deposited in the Reserve Fund shall be held in trust by the Trustee as a reserve for the payment when due of the principal of and interest on the Bonds. If on any Bond Payment Date the amounts available in the Bond Fund do not equal the amount of principal of and interest on the Bonds then coming due and payable, the Trustee shall apply the moneys available in the Reserve Fund to make such payments by transferring the amount necessary for this purpose to the Bond Fund. Upon receipt of any delinquent payment with respect to which moneys have been advanced from the Reserve Fund, such payment shall be deposited in the Reserve Fund to the extent of such advance.
As noted above, the Reserve Requirement will be maintained in the form of the issuance of the Reserve Policy. Under the terms and conditions of the Reserve Policy, the Trustee shall deliver to the Bond Insurer a demand for payment under the Reserve Policy in the required form at least two Business Days before the date on which funds are required for the purposes set forth in this Section. The Trustee shall comply with all of the terms and provisions of the Reserve Policy for the purpose of assuring that funds are available thereunder when required for the purposes of the Reserve Fund, within the limits of the coverage amount provided by the Reserve Policy. All amounts drawn by the Trustee under the Reserve Policy will be deposited into the Reserve Fund and applied for the purposes thereof.
If the Trustee has actual knowledge that the amount on deposit in the Reserve Fund at any time becomes less than the Reserve Requirement (including as a result of a draw under the Reserve Policy), the Trustee shall promptly notify the City and the Bond Insurer of such fact and the City shall replenish the amount on deposit in the Reserve Fund to the full amount of the Reserve Requirement.
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For additional details on the Reserve Policy, see APPENDIX B – Summary of Certain Provisions of the Indenture.
Parity Obligations
The City does not currently have any obligations payable from the Gross Revenues or Net Revenues of the Parking Enterprise on parity with the Bonds (“Parity Obligations”). In the future, however, the City may issue or incur Parity Obligations in such principal amount as the City determines, subject to the following conditions precedent:
(a) No Event of Default (or no event with respect to which notice has been given and which, once all notice of grace periods have passed, would constitute an Event of Default) has occurred and is continuing.
(b) The amount of Net Revenues as shown by the books of the City for the most recent Fiscal Year for which audited financial statements are available, plus at the option of the City any Additional Revenues, are at least equal to 150% of the amount of Maximum Annual Debt Service. The provisions of this subsection (b) shall not apply to the issuance of Parity Obligations, the proceeds of which are applied to refinance the Bonds or other outstanding Parity obligations, provided that the amount of Debt Service coming due on the Bonds and all outstanding Parity Obligations (including the Parity Obligations then being issued) is reduced in each Fiscal Year during the term thereof.
(c) The issuance of such Parity Obligations shall comply with all conditions to the issuance thereof as set forth in the applicable provisions of the Parity Obligation Documents.
(d) The City shall deliver to the Trustee a Certificate of the City certifying, and an opinion of Bond Counsel stating, that the conditions precedent to the issuance of such Parity Obligations set forth in the foregoing provisions of this Section have been satisfied.
Superior and Subordinate Obligations
The City shall not issue or incur any additional bonds or other obligations having any priority in payment of principal or interest out of the Pledged Revenues over the Bonds. Nothing in the Indenture limits or affects the ability of the City to issue or incur (a) Parity Obligations in accordance with the provisions described above under “– Parity Obligations,” or (b) obligations which are either unsecured or which are secured by an interest in the Pledged Revenues which is junior and subordinate to the pledge of and lien upon the Pledged Revenues established under the Indenture.
Rate Covenant; Collection of Rates and Charges
Gross Revenue Coverage. The City covenants in the Indenture that it will fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Parking Enterprise during each Fiscal Year which are at least sufficient, after making allowances for contingencies and error in the estimates, to pay 100% of the following amounts:
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(i) all Operation and Maintenance Costs estimated by the City to become due and payable in the Fiscal Year;
(ii) the principal of and interest on all outstanding Bonds and all other outstanding Parity Obligations (if any) as they become due and payable during the Fiscal Year, without preference or priority;
(iii) all amounts, if any, required to restore the balance in any reserve fund established for any Parity Obligations to the required level; and
(iv) all payments required to meet any other obligations of the City which are charges, liens, encumbrances upon, or which are otherwise payable from, the Gross Revenues or the Net Revenues during such Fiscal Year.
The foregoing provisions are not intended to indicate the order in which the Gross Revenues are to be applied. As provided elsewhere in the Indenture, prior to the Net Revenue Conversion Date, the Gross Revenues shall first be applied to make payments of the principal of and interest on all outstanding Bonds and Parity Obligations; and after the Net Revenue Conversion Date, the Gross Revenues shall first be applied to pay Operation and Maintenance Costs.
Net Revenue Coverage. In addition to the covenant set forth regarding Gross Revenues coverage, the City covenants in the Indenture that it will fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Parking Enterprise during each Fiscal Year which are sufficient to yield Net Revenues which are at least equal to 150% of the amount of principal of and interest on all outstanding Bonds and all other Parity Obligations (if any) as they come due and payable during the Fiscal Year; provided, however, that in the event that the actual collection of Net Revenues based on such rates, fees and charges is insufficient to yield Net Revenues which meet such requirement, such event shall not constitute an Event of Default unless it has continued uncured for a period of at least 12 months.
Payment of Operation and Maintenance Costs.
As provided in Indenture, prior to the Net Revenue Conversion Date, the Gross Revenues shall be applied to make payments of principal of and interest coming due on the Bonds and any Parity Obligations in any Fiscal Year prior to the payment of Operation and Maintenance Costs coming due in such Fiscal Year. In the event and to the extent the amount of Gross Revenues following the payment of principal of and interest on the Bonds and any Parity Obligations in any Fiscal Year is insufficient to pay the Operation and Maintenance Costs coming due and payable in such Fiscal Year in full, the City shall pay the remaining Operation and Maintenance Costs from any source of legally available funds, including the General Fund of the City.
Insurance; Net Proceeds
The City will at all times maintain with responsible insurers all such insurance on the Parking Enterprise as is customarily maintained with respect to works and properties of like character against accident to, loss of or damage to the Parking Enterprise. If any useful part of the Parking Enterprise is damaged or destroyed, such part must be restored to usable condition.
All amounts collected from insurance against accident to or destruction of any portion of the Parking Enterprise shall be used to repair or rebuild such damaged or destroyed portion of the
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Parking Enterprise, and to the extent not so applied, shall be applied to redeem the Bonds or any Parity Obligations in accordance with the Indenture and the Parity Obligation Documents, respectively. The City shall also maintain, with responsible insurers, worker’s compensation insurance and insurance against public liability and property damage to the extent reasonably necessary to protect the City, the Trustee and the Owners of the Bonds. The Trustee has no liability to determine whether the City is in compliance with the foregoing provisions.
BOND INSURANCE
Bond Insurance Policy
Concurrently with the issuance of the Bonds, Build America Mutual Assurance Company (“BAM”) will issue its Municipal Bond Insurance Policy for the Bonds (the “Policy”). The Policy guarantees the scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement.
The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law.
Build America Mutual Assurance Company
BAM is a New York domiciled mutual insurance corporation and is licensed to conduct financial guaranty insurance business in all fifty states of the United States and the District of Columbia. BAM provides credit enhancement products to issuers in the U.S. public finance markets. BAM will only insure municipal bonds, as defined in Section 6901 of the New York Insurance Law, which are most often issued by states, political subdivisions, integral parts of states or political subdivisions or entities otherwise eligible for the exclusion of income under section 115 of the U.S. Internal Revenue Code of 1986, as amended. No member of BAM is liable for the obligations of BAM.
The address of the principal executive offices of BAM is: 200 Liberty Street, 27th Floor, New York, New York 10281, its telephone number is: 212-235-2500, and its website is located at:
www.bambonds.com.
BAM is licensed and subject to regulation as a financial guaranty insurance corporation under the laws of the State of New York and in particular Articles 41 and 69 of the New York Insurance Law.
BAM’s financial strength is rated “AA/Stable” by S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC (“S&P”). An explanation of the significance of the rating and current reports may be obtained from S&P at https://www.spglobal.com/en/. The rating of BAM should be evaluated independently. The rating reflects S&P’s current assessment of the creditworthiness of BAM and its ability to pay claims on its policies of insurance. The above rating is not a recommendation to buy, sell or hold the Bonds, and such rating is subject to revision or withdrawal at any time by S&P, including withdrawal initiated at the request of BAM in its sole discretion. Any downward revision or withdrawal of the above rating may have an adverse effect on the market price of the Bonds. BAM only guarantees scheduled principal and scheduled interest payments payable by the issuer of the Bonds on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the
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Policy), and BAM does not guarantee the market price or liquidity of the Bonds, nor does it guarantee that the rating on the Bonds will not be revised or withdrawn.
Capitalization of BAM
BAM’s total admitted assets, total liabilities, and total capital and surplus, as of September 30, 2024 and as prepared in accordance with statutory accounting practices prescribed or permitted by the New York State Department of Financial Services were $502.6 million, $246.3 million and $256.3 million, respectively.
BAM is party to a first loss reinsurance treaty that provides first loss protection up to a maximum of 15% of the par amount outstanding for each policy issued by BAM, subject to certain limitations and restrictions.
BAM’s most recent Statutory Annual Statement, which has been filed with the New York State Insurance Department and posted on BAM’s website at www.bambonds.com, is incorporated herein by reference and may be obtained, without charge, upon request to BAM at its address provided above (Attention: Finance Department). Future financial statements will similarly be made available when published.
BAM makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, BAM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding BAM, supplied by BAM and presented under this heading “BOND INSURANCE”.
Additional Information Available from BAM
Credit Insights Videos. For certain BAM-insured issues, BAM produces and posts a brief Credit Insights video that provides a discussion of the obligor and some of the key factors BAM’s analysts and credit committee considered when approving the credit for insurance. The Credit Insights videos are easily accessible on BAM's website at https://bambonds.com/insights/#video. (The preceding website address is provided for convenience of reference only. Information available at such address is not incorporated herein by reference.) Credit Profiles. Prior to the pricing of bonds that BAM has been selected to insure, BAM may prepare a pre-sale Credit Profile for those bonds. These pre-sale Credit Profiles provide information about the sector designation (e.g. general obligation, sales tax); a preliminary summary of financial information and key ratios; and demographic and economic data relevant to the obligor, if available. Subsequent to closing, for any offering that includes bonds insured by BAM, any pre-sale Credit Profile will be updated and superseded by a final Credit Profile to include information about the gross par insured by CUSIP, maturity and coupon. BAM pre-sale and final Credit Profiles are easily accessible on BAM's website at https://bambonds.com/creditprofiles. BAM will produce a Credit Profile for all bonds insured by BAM, whether or not a presale Credit Profile has been prepared for such bonds. (The preceding website address is provided for convenience of reference only. Information available at such address is not incorporated herein by reference.)
Disclaimers. The Credit Profiles and the Credit Insights videos and the information contained therein are not recommendations to purchase, hold or sell securities or to make any
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investment decisions. Credit-related and other analyses and statements in the Credit Profiles and the Credit Insights videos are statements of opinion as of the date expressed, and BAM assumes no responsibility to update the content of such material. The Credit Profiles and Credit Insight videos are prepared by BAM; they have not been reviewed or approved by the issuer of or the underwriter for the Bonds, and the issuer and underwriter assume no responsibility for their content.
BAM receives compensation (an insurance premium) for the insurance that it is providing with respect to the Bonds. Neither BAM nor any affiliate of BAM has purchased, or committed to purchase, any of the Bonds, whether at the initial offering or otherwise.
THE CITY
General
The City of Santa Cruz was incorporated in 1866, and is located on the northern part of the Monterey Bay approximately 74 miles south of San Francisco and 30 miles south of San José.
The City is the county seat for the County, and is a charter city which operates under the provisions of a voter-approved charter. The City has an area of 12 square miles and is the home to the University of California, Santa Cruz, which first opened in 1965 and has a current enrollment of over 19,000 students. The City provides a broad range of services including police and fire protection, construction, operations, and maintenance of streets, parks, flood control and other infrastructure, a wharf facility, recreational and cultural activities including a performing arts center and human services programs. It also operates municipal utilities for water, wastewater, storm water, refuse collection, recycling and landfill disposal, parking facilities and a golf course. As of January 1, 2024, the population of the City was 62,776, according to the California Department of Finance. For additional information on the City and the surrounding area, see “APPENDIX C – SANTA CRUZ AND SANTA CRUZ COUNTY GENERAL INFORMATION.”
Financial Statements
The Pun Group, LLP, Santa Ana, California (the “Auditor”), audited the financial statements of the City for the Fiscal Year ended June 30, 2024. The Auditor’s examination was made in accordance with generally accepted auditing standards and Governmental Auditing Standards, issued by the Comptroller General of the United States. See “APPENDIX A – AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR 2023-24.” The City has not requested nor did the City obtain permission from the Auditor to include the audited financial statements as an appendix to this Official Statement. Accordingly, the Auditor has not performed any post-audit review of the financial condition or operations of the City.
Employee Retirement System and OPEB
The City provides health and retirement benefits to all full-time employees of the Parking Enterprise through a contract with the California Public Employees Retirement System (“CalPERS”), the costs of which are reflected in the operating budgets of the Parking Enterprise.
The Parking Enterprise’s employees are part of the City’s “Miscellaneous Plan.” Approximately [____]% of the City’s Miscellaneous Plan costs were allocated to the Parking Enterprise in Fiscal
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Year 2023-24, or approximately $[___________], which amount includes a one-time voluntary excess pay down of the Miscellaneous Plan’s unfunded liability in the amount of $[_________].
The City also provides post-employment retirement benefits to former employees of the Parking Enterprise, through a retiree medical plan administered by CalPERS. Approximately [___]% of the City’s OPEB costs were allocated to the Parking Enterprise in Fiscal Year 2023-24, or approximately $[_______].
See “APPENDIX A – AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR 2023-24,” Notes 11 and 12, for additional information on the City’s pension and other postemployment benefits (OPEB), respectively.
Investment Policies and Procedures
The City invests its funds in accordance with the City’s Investment and Portfolio Policy (the “Investment Policy”), which is subject to annual review and approval by the City Council.
The purpose of the Investment Policy is to establish the investment goals of safety, liquidity, and yield (in that order). The City’s Investment Policy complies with the provisions of the California government Code, Sections 53600 through 53659 (the authority governing investments for municipal governments in the State). The Investment Policy limits the City to investments authorized by State law. In addition, the Investment Policy establishes further guidelines.
See “APPENDIX A – AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR 2023-24” for additional information on the City’s investment policies and procedures.
Risk Management and Self-Insurance
The City self-insures certain risks and maintains excess coverage subject to applicable policy limits.
The City has established a Risk Management Fund (an internal service fund) to account for its self-insurance program. For the period ending June 30, 2024, the City was self-insured for workers’ compensation up to $500,000 per occurrence and for general liability up to $1,000,000 per occurrence. Claims in excess of these amounts are insured. The City is also completely selfinsured for unemployment insurance, vision, and dental insurance claims; Unemployment is accounted for in the General Fund and the self-insurance for vision and dental is accounted for in the Risk Management Internal Service Fund. The City contracts with outside administrators to administer these programs.
In January 1997, the City joined the Authority for California Cities Excess Liability (“ACCEL”). ACCEL is a joint powers authority organized under the provisions of Section 6500 et. seq. of the California Government Code for the purpose of establishing a risk management pool for certain California municipalities. ACCEL began operations in 1986 and provides certain limited coverage for catastrophic general liability, automobile liability and public official errors and omission losses. ACCEL operates a liability risk pooling program which is subject to an annual independent financial audit and biennial actuarial study. ACCEL is governed by a thirteen member Board of Directors. Each member agency, including the City, appoints a representative to the Board of Directors. ACCEL is funded by its member participants and, at the discretion of its Board of Directors, may assess the members for additional premiums (in an unlimited amount) in the event the assets at any time are insufficient to discharge its liabilities.
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See APPENDIX A – AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR 2023-24,” Note 10 for additional details, including coverages provided by self-insurance, purchased insurance and excess coverage.
THE PARKING ENTERPRISE
Overview
The Parking Enterprise refers to the facilities and operations of the Downtown Parking District (also sometimes referred to as Parking District No. 1), which was established by the City in 1956 (with operations beginning in 1957) to provide shared parking for downtown users:
customers, employees, owners, and residents. The Parking Enterprise operates on a shared parking concept. The shared model allows for a single parking space downtown to be used by multiple users.
There are currently approximately 3,200 public parking spaces within the Parking Enterprise. Of these, approximately 1,500 are on-street parking spaces and approximately 1,700 are off-street spaces in lots and garages. The City currently has 19 parking lots in the downtown area. Six of them are free, with time limits; the other 13 are paid parking. These numbers are subject to ongoing change, as parking facilities are redeveloped into higher-value uses and onstreet parking is taken offline due to changes in regulatory/legal requirements. See “– Ongoing Changes to Parking Facilities.”
The following map shows the locations of the parking lots currently within the Downtown Parking District / Parking Enterprise.
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Current Facilities of Parking Enterprise
The Parking Enterprise operates on-street and off-street parking spaces. The majority of the parking spaces operated by the Parking Enterprise are located within parking garages, as shown in the following table. Additional details regarding each of these lots/garages follows after the table.
Table 1
City of Santa Cruz Parking Enterprise
Parking Facilities
Lot No. Name Address No. Spaces(1)
N/A SOQUEL/FRONT GARAGE 601 FRONT ST. 395
N/A LOCUST GARAGE 124 LOCUST ST. 400
2 WALNUT TREE 1100 CEDAR ST. 19
3 CEDAR/CHURCH GARAGE 119 CHURCH ST./ 800 CEDAR ST. 250 4 CEDAR/CATHCART 610 CEDAR ST. 134
6 CIVIC AUDITORIUM 711 CENTER ST. 44
7 FRONT/CATHCART 505 FRONT ST. 85
8 PEARL ALLEY 710 CEDAR ST. 52
9 ELM/CEDAR 120 ELM ST. 45
10 RIVER/FRONT GARAGE 24 RIVER ST. 450
11 FRONT ST. SOUTH 328 FRONT ST. 24
13 CITY HALL 809 CENTER ST. 62
14 LIBRARY 224 CHURCH ST./ON LOCUST ST. 22
16 LIBRARY 204 CHURCH ST. 38
17 LAUREL ST. EXT. 200 LAUREL ST. EXT. 20
20 BIRCH LANE 114 BIRCH LANE 4
26 POLICE DEPT. 155 CENTER ST. 13
Total 2,057
_______________
(1) Lot No. 4 (CEDAR/CATHCART), with 134 parking spaces, is currently offline, as the site is being redeveloped into the Downtown Library and Affordable Housing Project. It is estimated that the new parking garage planned for the site will be open in 2028. See “THE FINANCING PLAN” for more details on the project.
Source: City of Santa Cruz.
Soquel/Front Garage. The Soquel/Front Parking Garage is located at the corner of Soquel Avenue and Front Street. The lot is paid hourly parking, $2/hour $16 Daily Max rate, seven days a week, except Thanksgiving Day, Christmas Day and New Year's Day. Permits cost $75 per month and are purchased at the Soquel/Front Garage cashier’s office.
Locust Garage. The Locust Garage is located at the corner of Cedar and Locust streets.
The lot is paid hourly parking, with a $2/hour $16 Daily Max rate, seven days a week, except Thanksgiving Day, Christmas Day and New Year's Day. Permits cost $75 per month and are purchased from the cashier's window located on Locust Street.
Lot No. 2: The Walnut Tree Parking Lot. The Walnut Tree Parking Lot is located on Cedar Street between Union and Center Streets. The lot is free and is open 24 hours a day. It has a 3-hour time limit, Monday-Saturday 8 a.m. to 6 p.m. The lot is unlimited all day on Sundays and holidays.
Lot No. 3: The Cedar/Church Garage. The Cedar/Church Parking Garage is located at the corner of Cedar and Church streets. The garage is pay-by-space hourly parking with a $2/hour $16 Daily Max rate. The fee is charged seven days a week, including holidays, 8 a.m. to 8 p.m.
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Lot No. 4: The Cedar/Cathcart Parking Lot. The Cedar/Cathcart Parking Lot is located at the corner of Cedar and Cathcart streets. The lot is pay-by-space hourly parking with a $2/hour $16 Daily Max rate. The fee is charged seven days a week, including holidays, 8 a.m. to 8 p.m.
This lot is closed each Wednesday from 11 a.m. to 7 p.m. for the Downtown Farmer's Market, and the second Sunday of each month for the Antique Fair.
Lot No. 6: The Civic Auditorium Parking Lot. The Civic Auditorium Parking Lot is located on Church Street (between Center and Chestnut streets), next to the Civic Auditorium. It is a metered parking lot. Parking meters operate from 8 a.m. to 8 p.m., Monday-Sunday.
Lot No. 7: The Front/Cathcart Parking Lot. The Front/Cathcart Parking Lot is located at the corner of Front and Cathcart streets. It is pay-by-space hourly parking with a $2/hour $16 Daily Max rate. The fee is charged 7 days per week, including holidays, 8 a.m. to 8 p.m.
Lot No. 8: The Pearl Alley Parking Lot. The Pearl Alley Parking Lot is located at the corner of Cedar and Lincoln Streets. The lot is pay-by-space hourly parking with $2/hour $16 Daily Max rate. The fee is charged seven days a week, including holidays, 8 a.m. to 8 p.m. This parking lot has electric vehicle charging stations.
Lot No. 9: The Elm Street Parking Lot. The Elm Street Parking Lot is located at the corner of Cedar and Elm streets. The lot is pay-by-space hourly parking with a $2/hour $16 Daily Max rate. The fee is charged seven days a week, including holidays, 8 a.m.-8 p.m.
Lot No. 10: River/Front Garage. The River Front Parking Garage is located between River and Front streets next to the Galleria Office Complex. The lot is paid hourly parking, $2/hour $16 Daily Max rate, seven days a week, except Thanksgiving Day, Christmas Day and New Year's Day. Permits cost $75 per month and are purchased at the River Front Garage cashier’s office.
This parking garage has electric vehicle charging stations.
Lot No. 11: The Front Street South Parking Lot. The Front Street South Parking Lot is located on Front Street, just north of Laurel Street and next to the San Lorenzo River levee. It is free and is open 24 hours a day. It has a 3-hour time limit, Monday-Saturday, 8 a.m. to 6 p.m.
The lot is unlimited all day on Sundays and holidays.
Lot No. 13: The City Hall Parking Lot. The City Hall Parking Lot is located next to the City Hall complex on the north side of Church Street, between Chestnut and Center streets. It provides 3-hour visitor parking and reserved employee parking. The 3-hour time limit is in effect Monday-Saturday, 8 a.m. to 6 p.m. The lot is unlimited all day on Sundays.
Lot No. 14: The Central Branch Library Parking Lot. The Central Branch Library lot is located on Locust Street (between Cedar and Center streets), next to the Central Branch. It provides 3-hour visitor and reserved employee parking. The 3-hour time limit is in effect MondaySaturday, 8 a.m. to 6 p.m. The lot is unlimited all day on Sundays and holidays.
Lot No. 16: The Sentinel Parking Lot. The Sentinel lot is located on Church Street between Cedar and Center Streets. The lot is pay-by-space hourly parking with a $2/hour $16 Daily Max rate. The fee is charged seven days a week, including holidays, 8 a.m. to 8 p.m. Permits cost $165 per quarter and may be purchased at the Parking Office in the Locust Garage (124 Locust Street). This lot is subject to closure to public parking for special events.
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Lot No. 17: The Laurel Street Extension Permit Parking Lot. The Laurel Street Extension lot is located at the intersection of Spruce and Laurel Streets Extension. It is a metered parking lot. Parking meters operate from 8 a.m. to 8 p.m., Monday-Sunday. The lot has persons with disabilities parking during events at the Kaiser Permanente Arena.
Lot No. 20: Birch Lane between Pacific and Cedar Streets. The Birch Lane permit parking is located on Birch Lane between Pacific and Cedar Streets. Parking by permit only.
Permits are available for $75 per month and may be purchased at the Parking Office in the Locust Garage (124 Locust Street).
Lot No. 26: The Police Department Parking Lot. The Police Department parking lot is located on Center Street at Laurel Street, next to the Police Department. It provides 3-hour visitor and reserved parking. The 3-hour time limit is in effect Monday-Saturday, 8 a.m. to 6 p.m.
Ongoing Changes to Parking Facilities
As noted above, there are currently approximately 3,200 public parking spaces within the Parking Enterprise. Of these, approximately 1,500 are on-street parking spaces and approximately 1,700 are off-street spaces in lots and garages. With this existing supply, the demand for existing uses downtown regularly exceeds the available supply. In the coming years, the City expects new development to occur downtown. Much of this new development will be adding much-needed new housing units to help address the City’s housing crisis, along with new and expanded businesses, retail, and restaurants. These new uses will further increase the demand for parking downtown.
At the same time, many existing surface lots will be eliminated as the land needed for this redevelopment to occur. With this projected development, the City stands to lose between 316- 450 off-street parking spaces from existing surface parking spaces over the next 5-10 years plus an additional 50-60 on-street parking spaces to the updated Parklet/Outdoor Dining Program. The Lot 4/Garage project will help maintain the existing number of units by replacing some of the units being lost to planned redevelopment activities downtown. See “THE FINANCING PLAN” for additional details on the Lot 4/Garage project.
Parking Enterprise Revenue Categories
Overview. In general, the revenues of the Parking Enterprise consist of the following:
• Monthly permit parking ($75/mo. flat rate; monthly certain lots and garages) • Off-street hourly ($2/hour – hourly lots and garages) • On-street (metered) hourly (meters operate 8am to 8pm every day, except City holidays – charges vary)
• Rental revenues (pop-up businesses and bookshops)
• Intergovernmental revenues (assessment levied on property tax bill) Monthly Permit Parking. Consists of all parking payments received in return for a monthly parking access card or permit, allowing in/out privileges to the applicable facility throughout the month, in accordance with the terms and conditions of the applicable permit
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program. Monthly reserved parking is available in certain lots only, and each permit is valid at a particular facility. Currently permits are restricted to employees and residents in the Downtown Parking District; the general public and visitors are subject only to hourly and daily rates. Because drivers circulate throughout the day, the City typically issues more than a single permit for each eligible parking space. The current permit cost is $75/month, having been increased for Fiscal Year 2023-24 from $65/month previously. There is currently a waitlist for monthly parking permits.
Off-Street Hourly Parking. Consists of all hourly parking in facilities, both garages and lots. The City does not currently offer discounted rates, rideshare or carpool parking.
On-Street (Metered) Hourly Parking. Consists of all hourly parking at metered parking streets in the City’s downtown area. Meters operate 8am to 8pm every day, except City holidays, and charges vary by location.
Rental Revenues. Consists of revenues charged by the City to certain vendors within the City’s downtown area that use parking facilities.
Intergovernmental Revenues. The County levies and collects, on behalf of Parking District No. 1, an assessment on the normal County property tax bill. This shows up in the financials of the Parking Enterprise as “intergovernmental revenues,” and averages approximately $350,000 annually.
EV Charging Stations (Revenue Neutral). Electric vehicle charging is provided at some City parking locations, as a “net neutral cost” meaning the cost of providing the power and charging equipment is re-captured, but there is no net profit to the Parking Enterprise.
The following table shows the categories of revenues of the Parking Enterprise for Fiscal Year 2023-24.
Table 2
City of Santa Cruz Parking Enterprise
Categories of Parking Revenues
Fiscal Year 2023-24
Category Revenues % of Total
Permits $1,226,186 17.3%
On-Street Hourly 2,838,919 40.0%
Off-Street Hourly 2,773,878 39.1%
Other Charges for Services 20,440 0.3%
Miscellaneous 234,009 3.3%
Total $7,093,432 100.0%
Source: City of Santa Cruz.
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Rate Setting, Fines, Enforcement and Collection Procedures Rate Setting Generally. The City Council establishes the maximum rates that can be charged for the facilities and operations managed by the Parking Enterprise. No other governmental authority, board, body or commission has jurisdiction over or is required to approve the parking rates established by the City Council. The types of parking available within the City are summarized above “– Parking Enterprise Revenue Categories”. 2023 Rate Study. Following impacts driven by the COVID-19 pandemic response, in spring 2023, City Council reviewed an updated parking rate strategy and adopted an ordinance for additional increases in parking rates to begin on July 1, 2023. Public Works staff along with an economic and financial consultant (Economic & Planning Systems) reviewed the parking rate model that informed the above-mentioned adopted rate strategies. Staff further analyzed impacts from past financial standings, upcoming operational and capital needs, as well as projected future debt obligations to assess the financial position and overall health of the Parking Enterprise Fund.
This led to certain increases in rates and charged, as described elsewhere in this Official Statement.
Parking Enforcement. The registered owner, driver or lessee of the cited vehicle must request an administrative review of the parking citation within 21 days of the date printed on the front of the citation. If a review is not requested within the specified time limits, there is no further right of review. City enforcement officers issue citations for parking violations and a City website processes the citations for payment. Payment of citations can be made online through the City’s website, in person at City, or are collected by the Department of Motor Vehicles through fines added to annual vehicle registration fees. If these methods to collect payment are insufficient, then collection is processed by the Franchise Tax Board through annual assessments. Fines and citations, even in the downtown area, go to the General Fund – not the Parking Enterprise.
Parking Permit Revenues. Generally, permit revenues make up approximately 17% of the total revenues of the Parking Enterprise. The following table shows additional details regard the permit revenues of the Parking Enterprise for Fiscal Year 2023-24.
Table 3
City of Santa Cruz Parking Enterprise
Detail Regarding Permits and Permit Revenues
Fiscal Year 2023-24
Location Permit Revenue
Soquel $450,766
Locust 335,252
River 314,716
Lots (16 & 20) 119,407
On-Street 6,045
Total $1,226,186
Source: City of Santa Cruz.
Employees and Operations
Structure. The Parking Operations Division of the Public Works Department of the City is primarily responsible for maintaining and operating the Parking Enterprise. Certain functions, such as finance, are provided by other City departments.
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Employees. The City operates the Parking Enterprise with approximately _____ full-time equivalent employees (FTEs). Previously, the City hired some third-party outside vendors; currently, all operations and maintenance activities related to the Parking Enterprise are handled by City employees. These employees are eligible for all City benefits, including CalPERS retirement and OPEB benefits. See “THE CITY – Employee Retirement System and OPEB.” Dedicated personnel for the Parking Enterprise consist of parking attendants, parking enforcement officers, parking facility maintenance personnel and parking office personnel. For City employees that contribute to the Parking Enterprise as well as other functions/funds of the City, the City allocated a share of FTE costs among the various functions/funds, as applicable.
Services and Supplies. Services and supplies of the Parking Enterprise consist of maintenance of equipment and cleaning supplies for parking lots and garages. It also consists of electricity, and other costs of operating and maintaining the Parking Enterprise.
Parking Enterprise Indebtedness
Currently, there is no debt payable with a pledge of the Gross Revenues or Net Revenues of the Parking Enterprise. The Parking Enterprise is responsible for repayment of an advance from the City’s general fund, in the amount of $2.3 million, and an allocable share of certain longterm lease obligations payable from the City’s general fund, in the amount of approximately $1.5 million; both of these are unsecured, subordinate obligations of the Parking Enterprise.
The City does not currently anticipate issuing or incurring long-term indebtedness payable from the Gross Revenues or Net Revenues of the Parking Enterprise, although the Indenture allows it to do so. See “SECURITY FOR THE BONDS – Parity Obligations.” Parking Enterprise Budgeting Generally
City staff responsible for managing the Parking Enterprise follow a “zero based budgeting” approach, considering each line item and its future needs anew each fiscal year. Asset conditions, infrastructure age, and future parking capacity needs are driving factors in determining capital improvement projects (CIP) and debt financing scenarios. The necessary revenues to support future operations and projects are then evaluated/developed based on current rates and fee structures, analysis of current parking asset usage, and future revenue potential based on projects in the development process that will have an impact on the assets. In addition to the known development projects under construction or approved for construction, the City is finalizing environmental review and draft expansion of the Downtown Plan that would provide a path for a permanent Santa Cruz Warriors Arena and denser development adjacent to the Downtown Parking District, with minimal parking requirements due to state laws removing barriers to housing production.
Fiscal Year 2024-25 Budget
As noted above, the City’s goal for the Parking Enterprise is for the Parking Enterprise to be self-sustaining. The Downtown Parking District is situated to backfill parking demand and provide essential parking services to downtown Santa Cruz’s intensification and higher density development.
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Operating revenue for the Parking Fund was negative for Fiscal Years 2020-21 through Fiscal Year 2022-23 as the City recovered from the pandemic. The pandemic recovery policies allowed for the Parking Fund’s reserves to be leveraged to reduce costs to businesses while also putting constraints on parking supply in the form of temporary outdoor dining occupying on street parking spaces. The outdoor dining or parklet program was transitioned to a permanent permit program with an annual fee. Increased traffic downtown and a rate increase in 2024 resulted in better performance in Fiscal Year 2023-24.
In Fiscal Year 2023-24, the Parking Enterprise ran at a slight deficit, with operating revenues of $7,093,432 and operating expenses of $7,687,073. As of June 30, 2024, the Parking Enterprise had total assets of $13,618,941, much of which related to the value of its buildings.
The City’s 2025 Annual Budget, covering July 1, 2024 to June 30, 2025, was adopted in June 2024. It governs the City’s expenditure of funds during that period, including with respect to the Parking Enterprise. As part of the 2025 Annual Budget, the City anticipates revenues of approximately $________ and expenditures of approximately $7,695,900.
Historical and Projected Debt Service Coverage
The table on the following page provides a summary of the historical revenues and expenses of the Parking Enterprise for Fiscal Years 2019-2020 through 2023-24, based on the City’s audited financial statements for those years, as well as a summary of the projected revenues, expenses and debt service coverage of the Parking Enterprise for Fiscal Years 2024- 25 through 2028-29. The summary of historical results is qualified in its entirety by reference to the City’s audited financial statements, including the notes thereto, for the fiscal years shown.
The summary of projected results is qualified in its entirety by references to the footnotes referenced therein and is based on anticipated results which may not occur and may be impacted by various risks that could occur in the future. See “CERTAIN RISK FACTORS” for some of these potential risks.
In addition, the following projections are based on a number of assumptions, which may or not may not come to fruition and many of which are outside the City’s control, including:
Charges for Services. Charges for Services category is comprised primarily of Permit revenue, On-Street revenue and Off-Street revenue, each of which are subject to specific assumptions and uncertainties. Most importantly, the assumptions assume that Lot 4 will be replaced with the new Structure 4 parking garage such that Lot 4 revenues cease in Fiscal Year 2024-25 (during construction of the new structure) and revenues associated with the new Structure 4 parking garage commence in Fiscal Year 2027-28.
Off-Street Revenues: Projected Off-Street Parking is based on Fiscal Year 2023- 24 utilization. Fiscal Year 2024-25 revenues assume 5% growth rate over the Fiscal Year 2023-24 utilization. Fiscal Year 2025-26 revenues assume 12% utilization growth, Fiscal Year 2026-27 revenues assume 15% utilization growth, and Fiscal Years 2027-28 and 2028-29 revenues assume 14% utilization growth. The projections assume the new Structure 4 has 243 spaces collecting Off-Street Revenues beginning in Fiscal Year 2027-
28. Permit Revenues: In Fiscal Year 2023-24, Permit Revenues were approximately 85% of full capacity. Projected permit revenues assume 95% of full capacity over time, with the charge per permit remaining at $75/month. It is also assumed the new Structure
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4 parking garage has 250 permitted space available in Fiscal Year 2027-28, with permits at 50% capacity during the first fiscal year of operation. In Fiscal Year 2028-29 and thereafter, it is assumed that the new Structure 4 is at 100% permit capacity.
On-Street Revenues: In Fiscal Year 2023-24, On-Street Revenues (meters) utilization was estimated at 47%. The projections assume utilization grows at 0% in Fiscal Year 2024-25, 12% in Fiscal Year 2025-26, 14% in Fiscal Year 2026-27 and 10% in Fiscal Year 2028-29. In all years, it is assumed that 20 minute meters are used 7 hours per day, and other meter types are used 11 hours per day, in each case for 7 days per week, 51 weeks per year.
Operating Expenditures. Personnel services are assumed to have an 4.69% annual increase in each of the projection years, while services and supplies are assumed to have 2.25% annual increases in each of the projection years.
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Table 4
City of Santa Cruz Parking Enterprise
Historical Revenues and Expenses for Fiscal Years 2019-20 to 2023-24 and Projected Revenues, Expenses and Debt Service Coverage for Fiscal Years 2024-25 to 2028-29 For Fiscal Year Ending (FYE) June 30 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Operating Revenue
Total charges for services(1) $5,910,903 $5,054,850 $3,855,031 $4,211,631 $4,480,080 $6,859,423 $6,367,007 $7,479,362 $8,320,133 $9,526,577 $10,507,279 Rental revenue 197,758 164,472 50,326 87,086 123,989 220,217 - - - - Other revenue (Taxes, Grants, Rents, Misc, InLieu) 107,214 158,748 246,140 347,788 45,553 13,792 350,000 350,000 350,000 350,000 350,000 Intergovernmental 68,312 71,387 8,864 219 288,972 326,722 250,000 100,000 100,000 100,000 100,000 Investment income 69,768 84,880 23,614 8,231 7,230 (11,705) 7,670 7,900 8,137 8,382 8,633 Total Operating Revenue $6,353,955 $5,534,337 $4,183,975 $4,654,955 $4,945,824 $7,408,449 $6,974,678 $7,937,262 $8,778,270 $9,984,959 $10,965,912 Operating Expenses (1)
Personnel services (net of non-cash expenses) $2,740,353 $2,953,700 $2,834,261 $3,198,561 $3,500,180 $3,715,040 $4,086,817 $4,278,489 $4,479,150 $4,689,222 $4,909,146 Services, Supplies, and other charges (net of
non-cash expenses) 1,865,177 2,094,250 1,922,107 2,237,342 2,113,997 2,984,959 3,452,312 3,360,945 3,282,066 3,354,787 3,429,146 Total Operating Expenses $4,605,530 $5,047,950 $4,756,368 $5,435,903 $5,614,177 $6,699,999 $7,539,129 $7,639,434 $7,761,216 $8,044,009 $8,338,292 Net Revenues $1,748,425 $486,387 $(572,393) $(780,948) $(668,353) $708,450 $(564,451) $297,829 $1,017,054 $1,940,950 $2,627,620 Debt Service
2025 Bonds(3) $0 $0 $1,320,000 $1,620,000
NET Revenue Debt Service Coverage 1.47x 1.62x
GROSS Revenue Debt Service Coverage 7.56x 6.77x
________________________
* Preliminary; subject to change.
(1) Charges for services comprised primarily of Permit revenue, On-Street revenue and Off-Street revenue. See additional details regarding projections on each of these categories above. (2) Operating Expenses excludes capital expenditures and non-cash items such as depreciation and accounting entries. (3) Capitalized interest is being funded on the Bonds through_____ 1, 20___.
Source: Annual Comprehensive Financial Report for Fiscal Years ending June 30, 2019 through 2024; City of Santa Cruz.
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CERTAIN RISK FACTORS
The following factors, along with other information in this Official Statement, should be considered by potential investors in evaluating the risks in the purchase of the Bonds. However, the following is not an exhaustive listing of risk factors and other considerations which may be relevant to an investment in the Bonds. There can be no assurance that other risk factors will not become evident at any future time.
Parking Enterprise Demand
There can be no assurance that the local demand for parking service provided by the Parking Enterprise will be maintained at levels described in this Official Statement under the heading “THE PARKING ENTERPRISE.” Reduction in the level of demand could require an increase in rates or charges in order to produce Net Revenues sufficient to comply with the City’s rate covenant in the Indenture. Such rate increases could increase the likelihood of nonpayment, and could also further decrease demand. Furthermore, there can be no assurance that any other entity with regulatory authority over the Parking Enterprise will not adopt further restrictions on operation of the Parking Enterprise. In fact, in recent years, the demand for parking from the Parking Enterprise was significantly reduced due to drought conditions in the State. See “– Drought Conditions Affecting Parking Enterprise”.
Parking Enterprise Expenses
There can be no assurance that Operation and Maintenance Costs of the Parking Enterprise will be consistent with the levels described in this Official Statement. Changes in technology, increases in the cost of energy or other expenses would reduce Net Revenues, and could require substantial increases in rates or charges in order to comply with the rate covenant.
Such rate increases could increase the likelihood of nonpayment, and could also decrease demand. In addition, the Parking Enterprise is subject to significant regulatory provisions, and costs associated with complying with federal and State requirements may materially increase Operation and Maintenance Costs in the future. Finally, cyber-security incidents that may befall the City generally, or the Parking Enterprise specifically, resulting from hacking, viruses, malware, ransomware or other attacks on the City’s or Parking Enterprise’s computer systems, could have a material adverse impact on Operation and Maintenance Costs.
Future Parity Obligations
Although the City has covenanted not to issue additional obligations payable from Net Revenues senior to the Bonds, the Indenture permits the issuance by the City of certain indebtedness which may have a lien upon the Net Revenues which is on a parity basis to the lien which secures the Bonds, if certain coverage tests are met (see “SECURITY FOR THE BONDS – Parity Obligations” herein). These coverage tests involve, to some extent, projections of Net Revenues. If such indebtedness is issued, the debt service coverage for the Bonds will be diluted below what it otherwise would be subject to under the coverage tests. Moreover, there is no assurance that the assumptions which form the basis of such projections, if any, will be actually realized subsequent to the date of such projections. If such assumptions are not realized, the amount of future Net Revenues may be less than projected, and the actual amount of Net Revenues may be insufficient to provide for the payment of the Bonds and such additional Parity Obligations.
Articles XIllC and XIIID of the State Constitution
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General. On November 5, 1996, California voters approved Proposition 218, the socalled “Right to Vote on Taxes Act.” Proposition 218 added Articles XIIIC and XIIID to the State Constitution, which affect the ability of local governments to levy and collect both existing and future taxes, assessments, and property-related fees and charges. Proposition 218, which generally became effective on November 6, 1996, changed, among other things, the procedure for the imposition of any new or increased property-related “fee” or “charge,” which is defined as “any levy other than an ad valorem tax, a special tax or an assessment, imposed by a [local government] upon a parcel or upon a person as an incident of property ownership, including user fees or charges for a property related service” (and referred to in this section as a “propertyrelated fee or charge”).
On November 2, 2010, California voters approved Proposition 26, the so-called “Supermajority Vote to Pass New Taxes and Fees Act.” Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as defined in Proposition 26) without a two-thirds vote of the Legislature.
With respect to local government “taxes,” Proposition 26 expressly excludes a variety of levies, charges and exactions from the definition of “tax,” including a “charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.” Although the City believes that the Parking Enterprise rates and charges are not taxes for purposes of Proposition 26, a court could conclude that, to the extent the City transfers surplus funds to the General Fund, the Parking Enterprise rates and charges constitute “taxes” for purposes of Proposition 26.
Proposition 26 amended Article XIIIC to provide that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity.
Current Practice Regarding Rates and Charges of Parking Enterprise. The City believes the requirements of Articles XIIIC and XIIID of the California Constitution do not apply to the parking rates and charges that the City sets, inasmuch as the parking rates and charges are excluded from the definition of a “tax” pursuant to Section 1(3)(4) of Article XIIIC, and do not constitute “fees” or “charges” which are defined as a levy “imposed by an agency upon a parcel or upon a person as an incident of property ownership” under Section 2(e) of Article XIIID.
Natural Calamities
General. From time to time, the City is subject to natural calamities, including, but not limited to, earthquakes, floods, tsunamis and wildfires, that may adversely affect economic activity in the City, and which could have a negative impact on the Net Revenues of the Parking Enterprise. The Parking Enterprise is also susceptible to risks relating to drought and climate change/sea level rise. For information concerning the potential impact of these risks, see “–
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Drought Conditions Affecting Parking Enterprise” above and “–Climate Change/Sea Level Rise” below.
Seismic. The City is located in an area classified as Seismic Zone 4 by the Uniform Building Code. The area includes all of the greater San Francisco Bay Area and all of coastal California. Seismic Zone 4 is the highest risk zone classification under the Uniform Building Code.
Within the County, there are several active and potentially active faults. These include the San Andreas, San Gregorio, Zayante, Ben Lomond and Butano Faults, the Monterey Bay Fault Zone, as well as numerous fault complexes and branches of these major faults.
The City lies within 15 miles of at least six major seismic faults and fault systems, placing it in an area of high seismic risk; however, there is only one fault, the Ben Lomond Fault that actually passes through the City. The Ben Lomond Fault is not considered to have moved in historic time and may be inactive. Recent history indicates that Santa Cruz has a high vulnerability to earthquakes due to proximity to faults, density of population and downtown development in the San Lorenzo River floodplain, which is subject to liquefaction, although a number of the most vulnerable buildings in the downtown were rebuilt or seismically retrofitted after the 1989 Loma Prieta Earthquake.
Additionally, the City of Santa Cruz adopted the most recent California Buildings Standards Code (the “Building Code”), including structural design standards for seismic requirements. The Building Code also references other applicable standards, such as ASCE7 (American Society of Civil Engineers). Current codes in use are the 2016 California Building Standards Code adopted through Santa Cruz Municipal Code, Title 18 (18.04.030 Adoption of Codes), although the City is in the process of updating the Municipal Code to adopt the 2019 version.
There is a risk to the Parking Enterprise’s financial stability from the potential negative impacts to the local economy and customer demand for parking due to a significant seismic event.
In addition, the Parking Enterprise may incur additional costs to make emergency repairs to parking facilities damaged as a result of seismic events.
Flood. There are several areas subject to flooding in the City. The San Lorenzo River runs through the downtown corridor and the majority of the downtown area is in the San Lorenzo River floodplain; as a result, 18 floods, eight of which have been considered severe, have occurred over the last 100 years. In 2002, FEMA re-designated much of the downtown and beach area from A-11 to the A-99 Flood Zone designation in recognition of the significant flood improvements resulting from the San Lorenzo River Flood Control and Environmental Restoration Project. Despite recent flood control projects and improved flood rating in much of the downtown and beach area, the risk of flooding is still a concern to the City.
Flooding along the coast of the City may occur with the simultaneous occurrence of large waves and storm swells during the winter. Storm centers from the southwest produce the type of storm pattern most commonly responsible for the majority of serious coastline flooding. The strong winds combined with high tides that create storm surges are also accompanied by heavy rains.
When storms occur simultaneously with high tides, flood conditions including flooding at the mouth of the San Lorenzo River are exacerbated.
There are several smaller creeks in the City that are subject to periodic flooding. Flooding is a hazard on the lower reaches of Moore Creek where only shallow stream channels are present, the lower portion of Arana Gulch, north of Santa Cruz Yacht Harbor, and along portions of
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Branciforte and Carbonera creeks. In these areas there is minimal impact on public structures and facilities and only a few residential structures are within these flood zones. As is the case with seismic events, flood risks to Parking Enterprise financial stability can result from both impacts to the local economy and resulting changes in parking demand as well as in increased costs associated with repairs to facilities damaged during flooding events.
Wildfire. Santa Cruz is a compact city surrounded by greenbelt. While the majority of the City is urban, wildfires remain a threat in several canyons and in the wildland/urban interface.
There are five wildland/urban interface areas within the City, including three areas designated as mutual threat zones. Mutual threat zones are defined as areas where a wildfire would threaten property within the Santa Cruz fire protection district as well as property covered by another fire protection service.
Vulnerability is increased in several of these areas due to limited access and transient use. This vulnerability can be further identified with hundreds of homes located in and around these areas, in addition to neighborhood schools, a major state university, commercial facilities, and City facilities. In 2011, the City commissioned a Climate Adaptation Plan, and in 2018 a Climate Adaptation Plan Update (together, the “Climate Adaptation Plan”). It identifies locations of socially vulnerable populations with respect to wildfire hazard zones. This important and unique social vulnerability analysis enhances response strategies and actions.
The impacts of wildfire on the community could be the loss of life, environmental damage, and property damage. During the rainy season, burned-over areas are subject to mudslides and debris torrents which can impact the infrastructure of the city. This downward flow can destroy fish habitats, compromise the services provided to City customers, and affect the surrounding environment.
For major emergencies that require more resources than can be provided by a single agency, the City, the County, the University of California at Santa Cruz and the State have an extensive mutual aid and emergency coordination system. Developed and managed in cooperation with the State Office of Emergency Services, this system allows departments and districts to share personnel and equipment as needed to address and control emergencies.
Tsunami. The City is located on the Monterey Bay. As noted above, several active and potentially active earthquake faults are located within or near the City. Even a moderate earthquake occurring in or near any of the nearby faults could result in local source tsunamis from submarine landsliding in Monterey Bay. Additionally, distinct source tsunamis from the Cascadia Subduction Zone to the north, or Teletsunamis (distant-source) from elsewhere in the Pacific Ocean are also capable of causing significant destruction in the City. See also “–Climate Change/Sea Level Rise” below.
Much of the downtown and the beach areas including the core commercial centers are in the mapped tsunami inundation zone. Most of the city and county government buildings and the Lifeguard and Marine Safety Headquarters on the Municipal Wharf are located in the inundation threat zone. Mitigation strategy includes continuation of an up-to-date Emergency Operations Plan, an effective public information program and continuing collaborative efforts with the County, other cities, agencies and community organizations to facilitate joint efforts in providing up-to-date tsunami mapping, preparation, information, warning dissemination and education.
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Climate Change/Sea Level Rise
The City is located along and inland from the Pacific Ocean coast of California. In recent years, concern has arisen regarding the impact of climate change on coastal communities like the City, including as a result of sea level rise. The City’s 2018 – 2023 Climate Adaptation Plan identifies risk of potential damage to property in the City in the event of various climate change scenarios resulting from sea level rise as well as the actions current and future decision makers will need to take to protect the City’s natural and built environments, residents, visitors, and the economic base and quality of life.
In recent years, the City has been actively involved in assessing the potential impacts of climate change on City facilities using a variety of analytical tools and scenario analyses. Key impacts identified in this work include more frequent and potentially longer droughts and an increase in extreme wet weather events, including more intense storm events with greater risks of flooding, erosion, and associated damage to City facilities. The Climate Adaptation Plan also concludes that if the sea level were to rise to certain levels, the resulting flooding would damage infrastructure and property in the City to varying degrees based on varying levels of flooding.
The City currently is a plaintiff in a lawsuit filed on December 20, 2017 in the Superior Court of the State of California in and for the County of Santa Cruz entitled, The City of Santa Cruz v. Chevron Corp et al., Case No. 17CV03243. The lawsuit alleges various causes of action directly or indirectly against Exxon Corporation and other oil companies related to climate changes associated with fossil fuel production. Other local agencies in California and around the United States have filed similar lawsuits. Shortly after the City and the other California municipalities filed their lawsuits, the defendants removed the cases to federal court, arguing that federal law controls. The municipalities opposed this removal and sought to bring the lawsuits back to California state court. After a series of lawsuits on the issue of the proper venue, which included a petition for a writ of certiorari to the U.S. Supreme Court, the United States Court of Appeals for the Ninth Circuit ruled that the case should be venued in state court. The case was remanded back to state court on May 30, 2023, and consolidated to the Superior Court of the County of San Francisco, where it is currently pending, with a number of defendants having recently been dismissed by motions to quash based on lack of personal jurisdiction in the State of California. Several defendants remain and the case is proceeding against them. No assurance can be given as to the outcome of this lawsuit or its impact on the Parking Enterprise.
In summary, the impact of climate change, including sea level rise, on coastal communities like the City is currently being considered by various parties, including the City, and the general understanding of climate change is likely to continue to evolve over time. Bond owners are advised that the revenues of the Parking Enterprise available to pay debt service on the Bonds may be materially adversely affected by climate change impacting the City and the Parking Enterprise.
Cyber Security
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City or the Parking Enterprise, or the administration and payment on the Bonds. The City
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is also reliant on other entities and service providers in connection with the operation of the Parking Enterprise and the administration of the Bonds, including without limitation the Trustee.
No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the owners of the Bonds.
Limited Recourse on Default
If the City defaults on its obligation to pay the bonds, the Trustee has the right to accelerate the total unpaid principal amounts of the Bonds. However, in the event of a default and such acceleration there can be no assurance that the City will have sufficient Net Revenues to pay the accelerated Bonds.
Limitations on Remedies Available; Bankruptcy
The enforceability of the rights and remedies of the Owners and the obligations of the City may become subject to the following: the federal bankruptcy code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect; equitable principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State and its governmental bodies in the interest of servicing a significant and legitimate public purpose. Bankruptcy proceedings, or the exercising of powers by the federal or State government, if initiated, could subject the Owners to judicial discretion and interpretation of their rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or modification of their rights.
No Obligation to Tax
The obligation of the City to pay the Bonds does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The obligation of the City to pay Bonds does not constitute a debt or indebtedness of any City, the State of California or any of its political subdivisions, within the meaning of any constitutional or statutory debt limitation or restriction.
Change in Law
In addition to the other limitations described herein, the California electorate or Legislature could adopt a constitutional or legislative property tax decrease or an initiative with the effect of reducing revenues payable to or collected by the City. There is no assurance that the California electorate or Legislature will not at some future time approve additional limitations that could have the effect of reducing the Net Revenues and adversely affecting the security of the Bonds.
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Loss of Tax Exemption
As discussed in this Official Statement under the caption “TAX MATTERS,” interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the Bonds were issued, as a result of future acts or omissions of the City in violation of its covenants in the Indenture. Should such an event of taxability occur, the Bonds are not subject to a special redemption and will remain outstanding until maturity or until redeemed under one of the other redemption provisions contained in the Indenture.
CONTINUING DISCLOSURE
The City will covenant in a continuing disclosure certificate, the form of which is set forth in “Appendix E – FORM OF CONTINUING DISCLOSURE CERTIFICATE,” for the benefit of holders and beneficial owners of the Bonds, to provide certain financial information and operating data by not later than nine months after the end of the City’s fiscal year, resulting in a deadline of March 31 of each year, beginning with an initial deadline of March 31, 2026. The Continuing Disclosure Certificate also requires the City to provide notices of the occurrence of certain enumerated events.
The covenants of the City in the Continuing Disclosure Certificate will be made in order to assist the Underwriter in complying with Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934, as amended (the “Rule”).
A default under the Continuing Disclosure Certificate will not, by itself, constitute an Event of Default under the Indenture, and the sole remedy under the Continuing Disclosure Certificate in the event of any failure of the City to comply will be an action to compel specific performance.
The City and its related governmental entities, including its former redevelopment agency, have made other undertakings pursuant to the Rule in connection with prior debt issuances. A review of compliance by the City over the past five years indicates that __________________. [Underwriter to review]
INSURED RATING
S&P Global Ratings Inc. (“S&P”) is expected to assign its municipal bond rating of “AA” to the Bonds, based on the fact that BAM will issue its bond insurance reserve policy on the Bonds.
S&P has not assigned an underlying rating on the Bonds. Such rating reflects only the view of the rating agency, and an explanation of the significance of this rating, and any outlook assigned to or associated with this rating, should be obtained from S&P.
Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. The City has provided certain additional information and materials to the rating agency (some of which does not appear in this Official Statement). To the extent that such information has been omitted from this Official Statement, it has been deemed immaterial to investors in the Bonds.
There is no assurance that this rating will continue for any given period of time or that this rating will not be revised downward or withdrawn entirely by the rating agency, if in the judgment
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of the rating agency, circumstances so warrant. Any such downward revision or withdrawal of any rating on the Bonds may have an adverse effect on the market price or marketability of the Bonds.
TAX MATTERS
Federal Tax Status. In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the Bonds may be subject to the corporate alternative minimum tax.
The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Tax Code”) relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. The City has made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the Bonds.
Tax Treatment of Original Issue Discount and Premium. If the initial offering price to the public at which a Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount” for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public at which a Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “original issue premium” for purposes of federal income taxes and State of California personal income taxes. De minimis original issue discount and original issue premium are disregarded.
Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Bonds who purchase the Bonds after the initial offering of a substantial amount of such maturity. Owners of such Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Bonds under federal individual alternative minimum taxes.
Under the Tax Code, original issue premium is amortized on an annual basis over the term of the Bond (said term being the shorter of the Bond’s maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a Bond is amortized each year over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). Amortized Bond premium is not
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deductible for federal income tax purposes. Owners of premium Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Bonds.
California Tax Status. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income taxes.
Other Tax Considerations. Current and future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code or court decisions may also affect the market price for, or marketability of, the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, such legislation would apply to bonds issued prior to enactment.
The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the Bonds, or as to the consequences of owning or receiving interest on the Bonds, as of any future date. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may have federal or state tax consequences other than as described above. Other than as expressly described above, Bond Counsel expresses no opinion regarding other federal or state tax consequences arising with respect to the Bonds, the ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on the Bonds.
CERTAIN LEGAL MATTERS
The legal opinion of Bond Counsel, approving the validity of the Bonds, in substantially the form attached hereto as APPENDIX D, will be made available to purchasers at the time of original delivery of the Bonds, and a copy thereof will be printed on each Bond. Jones Hall is also serving as Disclosure Counsel the City.
Certain matters will be passed upon for the City by the City Attorney, and for the Underwriter by _________, as Underwriter’s counsel.
UNDERWRITING
The Bonds were purchased through negotiation with ___________, as underwriter (the “Underwriter”). The Underwriter has agreed to purchase the Bonds at a price of $_________ (which represents the total aggregate principal amount with respect to the Bonds, plus [net] original issue premium of $________, less an Underwriter’s discount of $_______).
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The Underwriter intends to offer the Bonds to the public at the offering prices set forth on the inside cover page of this Official Statement. The Underwriter may offer and sell to certain dealers and others at a price lower than the offering prices stated on the inside cover page hereof.
The offering price may be changed from time to time by the Underwriter.
MUNICIPAL ADVISOR
The City has retained NHA Advisors, LLC, San Rafael, California, as its municipal advisor (the “Municipal Advisor”) in connection with the structuring, and delivery and sale of the Bonds.
The payment of the Municipal Advisor’s fees for services rendered with respect to the sale of the Bonds is contingent upon the closing of the Bonds. The Municipal Advisor assumes no responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies.
NO MATERIAL LITIGATION
In connection with issuance of the Bonds, the City will certify that there is no litigation pending or, to the City’s knowledge, threatened in any way to restrain or enjoin the issuance, execution or delivery of the Bonds, to contest the validity of the Bonds, the Indenture or any proceedings of the City with respect thereto.
Although the City is subject to claims and lawsuits from time to time, the City does not believe there are any claims or lawsuits pending against the City that could materially adversely affect the finances of the City or the Parking Enterprise so as to impair the ability of the City to pay principal of, and interest on, the Bonds when due.
CONCLUDING INFORMATION
Professional Services; Contingent Fees
In connection with the issuance of the Bonds, all or a portion of the fees payable to Bond Counsel and Disclosure Counsel, the Underwriter, Underwriter’s counsel, the Municipal Advisor and U.S. Bank Trust Company, National Association, San Francisco, California, as trustee for the Bonds, are contingent upon the issuance and delivery of the Bonds.
Additional Information
References are made herein to certain documents and reports which are brief summaries and do not purport to be complete or definitive. Prospective purchasers of the Bonds are advised to refer to such documents and reports for full and complete statements of their contents. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or Owners of any of the Bonds.
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Execution
The execution of this Official Statement and its use in connection with the offering of the Bonds for sale have been authorized by the City.
CITY OF SANTA CRUZ
By:
City Manager
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APPENDIX A
AUDITED FINANCIAL STATEMENTS OF THE CITY
FOR FISCAL YEAR 2023-24
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APPENDIX B
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
The following is a brief summary of the provisions of the Indenture not otherwise summarized in the text of this Official Statement. Such summary is not intended to be definitive, and reference is made to the complete Indenture for the actual terms thereof.
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APPENDIX C
CITY OF SANTA CRUZ GENERAL DEMOGRAPHIC AND FINANCIAL INFORMATION General
The County. Santa Cruz County is the second smallest county by area in California, containing a total of 440 square miles. Two-thirds of the County is considered to be forest land by the U.S. Department of Agriculture. It is located on the Pacific Ocean between the San Francisco Bay Area and the Monterey Peninsula. San Mateo County, which was originally part of Santa Cruz County, borders the county on the north. It is bordered by Santa Clara County on the east and by San Benito and Monterey counties on the south. The County’s diverse topography has shaped the County’s economy in terms of agricultural uses and tourism. In recent years the County has experienced growth in service industries and light manufacturing.
The County was incorporated in 1850 as one of the original 27 counties of the State with the City of Santa Cruz as the County seat. It has a general law form of government. A five-member Board of Supervisors elected to four-year terms serves as the legislative body. Also elected are the Assessor, Auditor-Controller, County Clerk-Recorder, District Attorney-Public Administrator, Sheriff-Coroner, and Treasurer-Tax Collector. The County Administrative Officer and County Counsel are appointed by the Board of Supervisors.
The City. The City, incorporated in 1866, is located on the northern part of the Monterey Bay approximately 74 miles south of San Francisco and 30 miles from San Jose. The City was first founded in 1769 by the Spanish explorer Don Gaspar de Portola, who, along with Father Junipero Serra, began land based settlement in the area. The City is the county seat for the County of Santa Cruz, and is a charter city which operates under the provisions of a voterapproved charter. The City has an area of 12 square miles and is the home to the University of California, Santa Cruz, which first opened in 1965 and has a current enrollment of over 19,000 students. UCSC has received worldwide recognition in the past few years for its high-quality academic programs and sponsored research programs such as the California Institute for Quantitative Biomedical Research (QB3), the Center for Information Technology Research in the Interest of Society (CITRIS), and the Laboratory for Adaptive Optics.
City Services and Government
The City provides a broad range of services including police and fire protection, construction and maintenance of streets, parks, flood control and other infrastructure, a wharf facility, recreational and cultural activities including a performing arts center and human services programs. It also operates municipal utilities for water, wastewater, storm water, refuse collection, recycling and landfill disposal, parking facilities and a golf course.
The City has operated under the council-manager form of government since its incorporation in 1866. Policy-making and legislative authority are vested in a seven-member governing council consisting of the Mayor and six Council Members. The City Council is responsible, among other things, for passing ordinances, adopting the budget, approving nominees to commissions, and hiring the City Manager, City Clerk and City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City and for appointing the heads of the various departments. The council is elected on a non-partisan basis. Council Members serve four-year staggered terms, with either three or four Council Members elected every two years. The Mayor
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is selected by a majority of the City Council and serves a one-year term. The Mayor and Council Members are elected at large and all are subject to two term limits.
Population
The City’s population at January 1, 2024, the most recent estimate, was 62,776 according to the State Department of Finance. The table below shows population estimates for the City, the County of Santa Cruz and the State of California for the last five years.
CITY OF SANTA CRUZ, COUNTY OF SANTA CRUZ
AND STATE OF CALIFORNIA
Population Estimates
Calendar Years 2020 through 2024 as of January 1
Calendar
Year
City of
Santa Cruz
County of
Santa Cruz
State of
California
2020 64,547 270,861 39,648,938
2021 57,112 265,533 39,466,855
2022 62,809 264,495 39,114,785
2023 62,929 263,338 39,061,058
2024 62,776 262,572 39,128,162
Source: State Department of Finance estimates (as of January 1).
Employment and Industry
The City, as well as the County, is closely tied to the regional economy of the nine-county San Francisco Bay Area and to Silicon Valley in particular. Local private employers include a diverse array of manufacturing, business services, retail, hotel and food services, and biotechnology companies. In addition to the local private employers, the local economy also benefits from the University of California Santa Cruz. The University is a major employer, and has potential spin-off benefits from federal and state funded scientific research ventures including biomedical research, technology research, and adaptive optics.
Visitors are attracted to the County by the area’s diverse natural beauty and its numerousrecreation facilities. California’s first State Park, Big Basin Redwoods, was established in Santa Cruz County in 1902. More than 10% of the County’s land area is now devoted to State beaches and parks. State beaches provide facilities for swimming, surfing, diving, clamming, sport fishing, picnicking, boating, sunbathing and whale-watching. State parks offer fresh water fishing, overnight camping facilities, hiking trails and nature programs.
Other visitor attractions include the Santa Cruz Boardwalk amusement park and Roaring Camp Narrow-Gauge Railroad. Visitor accommodations are extensive and varied, ranging from modern motel/hotel rooms to rental cottages on private beaches. Convention activities are an important contributor to the County’s economy.
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The City is included in the Santa Cruz-Watsonville Metropolitan Statistical Area (“MSA”), which includes all of the County. The unemployment rate in Santa Cruz County was 6.3 percent in December 2024, up from a revised 5.8 percent in November 2024, and below the year-ago estimate of 6.7 percent. This compares with an unadjusted unemployment rate of 5.2 percent for California and 3.8 percent for the nation during the same period.
Set forth below is data from 2019 to 2023 reflecting the County's civilian labor force, employment and unemployment.
SANTA CRUZ-WATSONVILLE METROPOLITAN STATISTICAL AREA
Civilian Labor Force, Employment and Unemployment
(Annual Averages)
March 2023 Benchmark
2019 2020 2021 2022 2023
Civilian Labor Force(1) 141,200 134,800 132,800 132,700 133,200 Employment 134,200 121,800 123,600 126,200 125,600
Unemployment 7,000 13,100 9,200 6,400 7,600
Unemployment Rate 4.9% 9.7% 6.9% 4.9% 5.7%
Wage and Salary Employment: (2)
Agriculture 8,200 8,000 7,200 7,100 6,700
Mining, Logging, Construction 4,500 4,400 4,800 5,000 5,100 Manufacturing 7,100 6,800 7,500 7,900 7,800
Wholesale Trade 3,400 3,300 3,300 3,500 3,300
Retail Trade 11,700 10,800 11,000 11,000 10,800
Transportation Warehousing and Utilities 1,700 1,700 2,000 2,200 2,100 Information 600 600 600 600 600
Finance and Insurance 3,400 3,200 3,200 3,300 3,300
Real Estate and Rental and Leasing 1,500 1,300 1,300 1,400 1,400 Professional and Business Services 10,900 10,400 10,600 10,700 9,900 Educational and Health Services 18,000 17,100 17,200 17,700 18,500 Leisure and Hospitality 14,800 10,300 11,800 14,000 14,500 Other Services 5,300 4,400 4,300 4,700 4,700
Federal Government 500 500 500 500 500
State Government 8,400 7,800 7,100 5,600 5,800
Local Government 12,800 12,000 11,900 12,000 12,300
Total, All Industries (3) 111,900 101,800 103,700 106,400 106,500 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.
Source: State of California Employment Development Department.
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Major Employers
Shown below are the principal employers in the City as of June 30, 2024.
CITY OF SANTA CRUZ
Major Employers
As of June 30, 2024
Employer Name No. of Employees
Percentage of Total
Employment
University of California at Santa Cruz 9,394 31.106%
County of Santa Cruz 2,851 9.440
City of Santa Cruz 934 3.093
Joby Aero Corp 364 1.205
Santa Cruz Beach-Boardwalk 347 1.049
Costco Wholesale Corporation 314 1.040
New Leaf Community Market 261 0.864
Safeway 246 0.815
Threshold Enterprises, Ltd 213 0.705
New Teacher Center 211 0.699
Source: City of Santa Cruz Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2024.
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The following table lists the largest employers within the County as of February 2025, in alphabetical order.
COUNTY OF SANTA CRUZ
Major Employers
As of February 2025
Employer Name Location Industry
Ameri-Kleen Watsonville Services NEC
Audiology Associates Soquel Clinics
Cabrillo Sesnon House 1 Aptos Caterers
Cocoanut Grove Santa Cruz Caterers
Costco Wholesale Santa Cruz Wholesale Clubs
Creekside Farms Inc Watsonville Farms
Dominican Hospital Santa Cruz Hospitals
First Alarm Aptos Burglar Alarm Systems (whls)
Granite Construction Co Watsonville General Contractors Granite Construction Inc Watsonville Construction-Building Contractors Graniterock Watsonville Asphalt & Asphalt Products
Larse Farms Inc Watsonville Fruits & Vegetables-Growers & Shippers Monterey Mushrooms LLC Watsonville Mushrooms
North County Mental Health Santa Cruz Government Offices-County Operations Department Santa Cruz Transit Lines
Plantronics Inc Santa Cruz Telephone & Telegraph Apparatus (mfrs) Safeway Soquel Grocers-Retail
Salud Para La Gente Watsonville Clinics
Santa Cruz County Sheriff Santa Cruz Government Offices-County Santa Cruz Governmental Ctr Santa Cruz Government Offices-County Santa Cruz Health Ctr Santa Cruz Clinics
Santa Cruz Metro Santa Cruz Bus Lines
Source Naturals Scotts Valley Vitamin Products-Manufacturers University of CA Santa Cruz Santa Cruz Schools-Universities & Colleges Academic Watsonville City Sewer Dept Watsonville City Government-Regulation & Administration-C Source: State of California Employment Development Department, America’s Labor Market Information System (ALMIS) Employer Database, 2025 1st Edition.
Budget Process
In accordance with applicable sections of the California Government Code and the City’s Charter, an annual budget is adopted by the City Council no later than the first regular meeting in July for the fiscal year beginning July first. As part of the budget process, all City departments submit budget requests for the next fiscal year. These requests are reviewed, and a final City Manager recommended budget showing estimated revenues and expenditures of the City is prepared. This proposed budget is transmitted to the City Council and made available to the public for review. Study sessions and a public hearing are conducted before final adoption of the budget by the City Council.
The City Manager is authorized to approve appropriation transfers within any department up to a specified amount; however, any new appropriation or appropriation transfer between departments requires approval by the City Council. Several supplemental appropriations were
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necessary during the year and are reflected in the budget amounts in the financial statements.
Expenditures may not legally exceed appropriations at the department level.
Under the City Charter, all unexpended appropriations lapse at the end of the fiscal year unless they are lawfully committed, or are required by law to be continuously appropriated from year to year.
Lawfully committed amounts include amounts legally encumbered at year end.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the governmental fund types. Encumbrances outstanding at year-end are reported as reservation of fund balances since they do not constitute expenditures or liabilities, and re-appropriations in the subsequent year provide authority to complete these transactions as expenditures.
The Council reviews budget results at the mid-year review and at budget adoption. The ongoing review and long-range planning focus for financial management provides numerous opportunities to identify and respond to changes in revenues and expenditures and in community priorities.
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Commercial Activity
A summary of historic taxable sales within the City and County during the past five years in which data is available is shown in the following tables.
Total taxable sales during the first, three quarters of calendar year 2024 in the City were reported to be $793,557,338, a 2.22% decrease in total taxable sales of $811,610,957 reported during the comparable three quarters of calendar year 2023.
CITY OF SANTA CRUZ
Number of Permits and Valuation of
Taxable Transactions (shown in thousands of dollars)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2019 1,559 $824,441 2,695 $1,031,629
2020 1,607 676,142 2,824 846,475
2021 1,411 851,153 2,530 1,057,293
2022 1,422 898,524 2,573 1,122,268
2023 1,354 868,854 2,455 1,082,253
Source: State Department of Tax and Fee Administration.
Total taxable sales during the first, three quarters of calendar year 2024 in the County were reported to be $3,618,213,452, a 0.74% increase over the total taxable sales of $3,591,790,210 reported during the comparable three quarters of calendar year 2023.
SANTA CRUZ COUNTY
Number of Permits and Valuation of
Taxable Transactions (shown in thousands of dollars)
Year
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2019 6,159 $2,987,680 10,542 $3,980,843
2020 6,397 2,988,564 11,095 3,965,760
2021 5,566 3,433,759 9,801 4,575,986
2022 5,587 3,592,319 10,007 4,846,272
2023 5,264 3,602,839 9,524 4,834,787
Source: State Department of Tax and Fee Administration.
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Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the total effective buying income for the City, the County of Santa Cruz, the State and the United States for the past five years for which data is available.
SANTA CRUZ COUNTY, MONTEREY COUNTY, STATE AND UNITED STATES Effective Buying Income
As of January 1, 2021 through 2025
Year Area
Total Effective
Buying Income
(000’s Omitted)
Median
Household
Effective
Buying Income
2021 Santa Cruz County $10,995,444 $77,281
City of Santa Cruz 2,334,897 69,011
California 1,290,894,604 67,956
United States 9,809,944,764 56,790
2022 Santa Cruz County $11,965,100 $86,647
City of Santa Cruz 2,601,734 79,858
California 1,452,426,153 77,058
United States 11,208,582,541 64,448
2023 Santa Cruz County $11,567,941 $85,962
City of Santa Cruz 2,489,617 80,399
California 1,461,799,662 77,175
United States 11,454,846,397 65,326
2024 Santa Cruz County $12,571,183 $91,915
City of Santa Cruz 2,811,484 88,353
California 1,510,708,521 80,973
United States 11,987,185,826 67,876
2025 Santa Cruz County $11,634,897 $87,816
City of Santa Cruz 2,631,089 85,037
California 1,557,429,767 82,725
United States 12,525,577,707 69,687
Source: Claritas, LLC.
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Construction Activity
The following tables show a five-year summary of the valuation of building permits issued in the City and County. Figures are not yet available for calendar year 2024.
CITY OF SANTA CRUZ
Total Building Permit Valuations
(Valuations in Thousands)
2019 2020 2021 2022 2023
Permit Valuation
New Single-family $22,195.9 $8,310.8 $9,658.2 $16,697.8 $18,074.3 New Multi-family 26,951.9 0.0 0.0 775.6 7,566.4
Res. Alterations/Additions 16,337.5 11,697.8 6,831.3 9,528.8 13,487.0 Total Residential 65,485.3 20,008.6 16,489.5 27,002.2 39,127.70 New Commercial 11,496.6 3,917.4 5.0 30,501.0 0.0
New Industrial 619.8 0.0 0.0 0.0 0.0
New Other 965.9 436.9 852.1 766.0 1,085.3
Com. Alterations/Additions 11,913.1 4,754.5 1,904.7 4,216.9 5,879.9 Total Nonresidential $24,995.4 $9,108.8 $2,761.8 $35,483.9 $6,965.2 New Dwelling Units
Single Family 87 53 48 92 90
Multiple Family 63 0 0 2 76
TOTAL 150 53 48 94 166
Source: Construction Industry Research Board, Building Permit Summary.
SANTA CRUZ COUNTY
Total Building Permit Valuations
(Valuations in Thousands)
2019 2020 2021 2022 2023
Permit Valuation
New Single-family $47,986.3 $26,997.0 $54,239.7 $80,812.9 $54,170.6 New Multi-family 27,676.7 813.7 823.8 30,723.4 8,066.4
Res. Alterations/Additions 31,453.2 23,111.0 21,728.8 31,612.9 29,942.5 Total Residential 107,116.2 50,921.7 76,792.3 143,149.2 92,179.5 New Commercial 16,978.8 4,680.6 3,552.4 32,566.3 1,004.4 New Industrial 619.8 0.0 0.0 0.0 0.0
New Other 6,793.4 2,070.0 3,475.9 4,766.5 37,448.6
Com. Alterations/Additions 41,089.3 7,209.5 17,733.0 23,687.5 48,241.0 Total Nonresidential $65,481.3 $13,960.1 $24,761.3 $61,020.3 $86,694.0 New Dwelling Units
Single Family 215 151 230 362 245
Multiple Family 76 8 15 150 83
TOTAL 291 159 235 512 328
Sources: Construction Industry Research Board, Building Permit Summary.
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Transportation
Five major State highways connect Santa Cruz with adjacent counties. Highway 1 leads along the coast from San Francisco south to the City of Santa Cruz and on to Monterey. Highways 9 and 17 traverse the County from the City of Santa Cruz across the Santa Cruz mountains into Santa Clara County. Watsonville is joined with Santa Clara County by Highway 152 and with San Benito County by Highway 129. Highways 17, 152 and 129 connect with U.S. 101, a major northsouth route.
Air cargo and passenger flight services are provided at the San Jose Metropolitan Airport, 32 miles east; Monterey Airport, 43 miles south; San Francisco International Airport, 60 miles northeast; and Watsonville Municipal Airport. Watsonville Municipal Airport provides private and executive air transportation facilities.
Bus transportation is provided through the Santa Cruz Metropolitan Transit District for inter-urban and local inter-community service. Greyhound and Peerless Bus Lines provide service to other local areas and additional transcontinental service.
Commercial and passenger rail services are provided by the Southern Pacific and Amtrak lines. Southern Pacific Transportation Company provides freight service for the coastal part of the County and the Watsonville area. Freight transportation is also provided through numerous common and contract carriers.
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APPENDIX D
FORM OF BOND COUNSEL OPINION
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APPENDIX E
FORM OF CONTINUING DISCLOSURE CERTIFICATE
$__________
CITY OF SANTA CRUZ
2025 PARKING REVENUE BONDS
This CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) is executed and delivered by the CITY OF SANTA CRUZ (the “City”) in connection with the issuance of the 2025 Parking Revenue Bonds captioned above (the “Bonds”). The Bonds are being executed and delivered pursuant to an Indenture of Trust dated as of May 1, 2025 (the “Indenture”), between the City and U.S. Bank Trust Company, National Association, San Francisco, California, as trustee (the “Trustee”).
The City covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule (defined herein).
Section 2. Definitions. In addition to the definitions set forth above and in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4.
“Annual Report Date” means the date that is nine months after the end of the City’s Fiscal Year (currently March 31 based on the City’s Fiscal Year end of June 30). “Dissemination Agent” means any dissemination agent designated in writing by the City to act as such. As of the date of this Disclosure Certificate, the City is acting as its own Dissemination Agent.
“Fiscal Year” means any twelve-month period beginning on July 1 in any year and extending to the next succeeding June 30, both dates inclusive, or any other twelve-month period selected and designated by the City as its official Fiscal Year period under a certificate of the City filed with the Trustee.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement executed by the City in connection with the issuance of the Bonds.
“Participating Underwriter” means the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.
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“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time. “Listed Events” means any of the events listed in Section 5(a).
Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 31, 2026, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4.
Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to provide) to the MSRB, in an electronic format as prescribed by the MSRB, a notice to such effect. (c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the thenapplicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) The City’s audited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
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Unless otherwise provided in the audited financial statements filed on or before the Annual Report Date, financial information and operating data with respect to the City for the preceding Fiscal Year: [Review/Confirm]
(i) list of parking facilities of the Parking Enterprise, substantially in the form of Table 1;
(ii) categories of parking revenues of the Parking Enterprise, substantially in the form of Table 2; and
(iii) revenues, expenditures and debt service coverage ratio of the Parking Enterprise, substantially in the form of Table 4 (preceding Fiscal Year only); (c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.
Section 5. Reporting of Listed Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or
determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. (7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
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(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the City. (13) The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material (for the definition of “financial obligation,” see clause (e)). (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties (for the definition of “financial obligation,” see clause (e)).
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(viii) and (a)(ix) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Indenture.
(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) and (a)(15) of this Section 5 contain the qualifier “if material.” The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that the City determines the event’s occurrence is material for purposes of U.S. federal securities law. (d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. (e) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The
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term financial obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under the Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.
Section 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. The initial Dissemination Agent shall be the City. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).
Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign by providing 30 days’ written notice to the City.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to
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enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.
A notice of any amendment made pursuant to this Section shall be filed in the same manner as for a Listed Event under Section 5(c).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 11. Default. If the City fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct.
The Dissemination Agent shall have no duty or obligation to review any information provided to it by the City hereunder, and shall not be deemed to be acting in any fiduciary capacity for the City, the Note holders or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. (b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity.
Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.
Date: ________, 2025
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CITY OF SANTA CRUZ
By
Director of Finance
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APPENDIX F
DTC AND THE BOOK ENTRY ONLY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.
Neither the issuer of the Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the Bonds (the “Agent”) take any responsibility for the information contained in this Appendix.
No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.
2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates.
Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust
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companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. The information contained on this Internet site is not incorporated herein by reference.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI
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Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.
10. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.
11. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
19.165
G-1
APPENDIX G
SPECIMEN MUNICIPAL BOND INSURANCE POLICY
19.166
Brittany Inclan
From: [email protected]
Sent: Saturday, April 19, 2025 1:20 PM
To: City Council
Cc: Bonnie Bush
Subject: City Council Meeting; RE Downtown Library and Affordable Housing Project Dear City Council Members,
My comments are in regard to the April 22, 2025 meeting agenda items:
14. State Permanent Local Housing Allocation (PLHA) Commitment to the Downtown Library Affordable Housing Project (EDH)
16. Resolution to Accept and Appropriate the Award from the State Affordable Housing Sustainable Communities (AHSC) Program for the Downtown Library and Affordable Housing Project (ED
19. 2025 Parking Revenue Bonds for Public Parking Project as part of the Downtown Library Mixed Use Project (FN/PW/EDH)
32. Tax Equity and Fiscal Responsibility (TEFRA) Hearing and Resolution regarding Conduit Financing for the Downtown Library Affordable Housing Project (EDH)
I am writing to express enthusiastic support for the Downtown Library and Affordable Housing Development Project. This initiative represents a significant and positive step for our community, and we appreciate the diligent efforts of the city staff and partners who have contributed to its progress.
We encourage swift adoption of these items.
Thank you for your ongoing commitment to this essential development.
Sincerely,
Lynn Marcus-Wyner, Esq.
Secretary and Board Member
Friends of the Santa Cruz Public Libraries
19.167
Brittany Inclan
From: Deborah Peronto <[email protected]>
Sent: Sunday, April 20, 2025 5:11 PM
To: City Council; Bonnie Bush
Subject: Re: 4/22/2025 Meeting Agenda
Dear City Council Members,
My comments are in regard to the April 22, 2025 meeting agenda items:
14. State Permanent Local Housing Allocation (PLHA) Commitment to the Downtown Library Affordable Housing Project (EDH)
16. Resolution to Accept and Appropriate the Award from the State Affordable Housing Sustainable Communities (AHSC) Program for the Downtown Library and Affordable Housing Project (ED
19. 2025 Parking Revenue Bonds for Public Parking Project as part of the Downtown Library Mixed Use Project (FN/PW/EDH)
32. Tax Equity and Fiscal Responsibility (TEFRA) Hearing and Resolution regarding Conduit Financing for the Downtown Library Affordable Housing Project (EDH)
I am writing to express enthusiastic support for the Downtown Library and Affordable Housing Development Project. This initiative represents a significant and positive step for our community, and we appreciate the diligent efforts of the city staff and partners who have contributed to its progress.
We encourage swift adoption of these items.
Thank you for your ongoing commitment to this essential development.
Best Regards,
Deborah Peronto
Board Member, Friends of the Santa Cruz Public Libraries
19.168
Brittany Inclan
From: Robin Holland <[email protected]>
Sent: Monday, April 21, 2025 9:14 AM
To: City Council; Bonnie Bush
Subject: Support for the Downtown Library and Affordable Housing Development Project Dear City Council Members,
This email is in regard to these April 22, 2025 meeting agenda items:
14. State Permanent Local Housing Allocation (PLHA) Commitment to the Downtown Library Affordable Housing Project (EDH)
16. Resolution to Accept and Appropriate the Award from the State Affordable Housing Sustainable Communities (AHSC) Program for the Downtown Library and Affordable Housing Project (ED
19. 2025 Parking Revenue Bonds for Public Parking Project as part of the Downtown Library Mixed Use Project (FN/PW/EDH)
32. Tax Equity and Fiscal Responsibility (TEFRA) Hearing and Resolution regarding Conduit Financing for the Downtown Library Affordable Housing Project (EDH) I am writing to express enthusiastic support for the Downtown Library and Affordable Housing Development Project. This initiative represents a significant and positive step for our community, and we appreciate the diligent efforts of the city staff and partners who have contributed to its progress.
We encourage swift adoption of these items.
Thank you for your ongoing commitment to this essential development.
Sincerely,
Robin Holland
Board Member, Friends of the Santa Cruz Public Libraries
19.169
City Council
AGENDA REPORT
DATE: 04/03/2025
AGENDA OF: 04/22/2025
DEPARTMENT: Human Resources
SUBJECT: Award Third-Party Administrator Contract for Workers’ Compensation Administration Services (HR)
LOCATION: Citywide
RECOMMENDATION: Motion to:
1) Award a contract to Sedgwick Claims Management Services, Inc as the Third-Party Administrator of the City’s Workers’ Compensation program in the amount of $875,687.00:
2) Authorize the City Manager to execute an agreement in a form approved by the City Attorney:
and
3) Authorize the Human Resources Director to execute amendments within the approved project budget.
BACKGROUND: As a California local government entity and employer, the City is legally required to administer a workers’ compensation program in compliance with California Labor Code, Division 4, Workers’ Compensation and Insurance. The spirit and intent of the law is to guarantee prompt, fair compensation to workers injured or made ill in the course of their employment regardless of fault. The City is self-insured for our workers’ compensation insurance coverage to employees, including part-time workers, and seasonal workers. Employers in California that have self-insurance are subject to annual reporting requirements to the Office of Self-Insurance Plans, which is essential for monitoring and ensuring that employers are adequately fulfilling their obligations under the state’s workers’ compensation laws.
In accordance with the City’s established procurement standards and purchasing policies, staff initiated a competitive solicitation to secure a new contract to replace the existing agreement.
DISCUSSION: On October 19, 2023, staff issued a Request for Proposal (RFP) HR2024 seeking qualified vendors as Third-Party Administrator (TPA) for Workers’ Compensation claims management. The RFP Scope of Services included employee safety and wellness, cost containment, risk management and legal compliance. The RFP was posted on the City’s website and OpenGov Procurement. Proposals were due by 4:00 PM on November 30, 2023. An
20.1 evaluation committee made up of subject matter experts for adherence to RFP requirements, vendor background, qualifications, team qualifications expertise and experience.
The City secured a contract with Sedgwick, Inc and recommends the award of this project to Sedgwick, Inc. Based on existing projects within the Human Resources department continuity is a key element of success. Sedgwick and HR are working together to reassess the program and provide improvements where needed to ensure the best services for the City and employees. The proposed contract would have an initial contract period of three years, with the option of two-one (1) year term extensions if the City elects so.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION: N/A HEALTH IN ALL POLICIES (HiAP): Award of this contract supports the health, well-being, and recovery of employees who are injured or become ill in the course of their employment. In alignment with the spirit and intent of California Workers’ Compensation law, this contract ensures timely access to medical care, promotes recovery, and facilitates a safe and supportive return to work whenever possible. By doing so, it not only protects employees’ physical health but also supports their mental wellness, sense of purpose, and long-term engagement in the workforce.
FISCAL IMPACT:
1. The recommendation in this report impacts the General Fund: No
2. This recommendation requires a budget adjustment: No
3. The recommendation creates an on-going expenditure commitment: No FISCAL IMPACT DESCRIPTION: Funds for this contract are already budgeted for FY 2025 and will be incorporated into the proposed budget for FY 2026. The budget for these contract costs exists in the internal service workers’ compensation insurance fund, Fund 831. Each year, the costs for workers’ compensation expenses are collected from the general fund and the enterprise funds The three-year contract price is as follows:
Calendar Year Administrator Costs
2025 $284,696
2026 $291,838
2027 $299,153
Prepared By:
Debbie Levy
Principal HR Analyst
Submitted By:
Sara De Leon
Human Resources Director
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. SIGNED CONTRACT 2025 - 2027.PDF
2. THREE - YEAR CONTRACT PRICING.PDF
20.2 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 1
Professional Services Agreement With
Sedgwick Claims Management Services, Inc
For Administration of Claims Program
THIS AGREEMENT for professional services is made by and between the City of Santa Cruz (“City”) and Sedgwick Claims Management Services, Inc. (“Consultant”) (each is referred to individually as a “Party” and collectively, as the “Parties”) as of January 1, 2025 (the “Effective Date”).
NOW, THEREFORE, in consideration of each other’s mutual promises, the Parties hereto agree as follows:
SECTION 1: SCOPE OF WORK
Consultant will furnish services as defined and described in the attached Exhibit A and incorporated herein.
SECTION 2: RESPONSIBILITIES OF CONSULTANT
All work performed by Consultant, or under Consultant’s direction, shall be rendered in accordance with the generally accepted practices, and to the standards of, Consultant's profession. Consultant represents and agrees that Consultant: (i) is fully experienced and properly qualified to perform the work and services provided for herein, (ii) has the financial capability required for the performance of the work and services, and (iii) is properly equipped and organized to perform the work and services in a competent, timely, and workmanlike/professional manner, in accordance with the requirements of this Agreement.
Consultant shall not undertake any work beyond the Scope of Work set forth in Exhibit A unless such additional work is approved in advance and in writing by City. The cost of such additional work shall be reimbursed to Consultant by City on the same basis as provided for in Section 4.
If, in performing the work, it is necessary to conduct field operations, security and safety of the job site will be the Consultant's responsibility excluding, the security and safety of any facility of City within the job site which is not under the Consultant's control.
Consultant shall meet with Sara De Leon, Director of the Human Resources Department, hereinafter called "Director", or other designated and authorized City personnel, or third parties as necessary, on all matters connected with carrying out of Consultant’s services described in Exhibit A. Such meetings shall be held at the request of either Party. Review and City approval of completed work shall be obtained monthly, or at other intervals as may be mutually agreed upon during the course of this Agreement. Review, approval, or acceptance of Consultant’s work by City or others shall not relieve Consultant from responsibility for errors and omissions in Consultant’s work.
SECTION 3: RESPONSIBILITIES OF THE CITY
City shall make available to Consultant all necessary data and information in the City's possession and shall actively assist Consultant in obtaining such information from other agencies and individuals as needed. Consultant is entitled to reasonably rely upon the accuracy and completeness of such data and information, and Consultant shall provide City prompt written notice of any known defects in such data and information.
The Director may authorize a staff person to serve as his or her representative. The work in progress shall be reviewed at such intervals as may be mutually agreed upon between the Parties. The City will be the sole judge of acceptable work, provided that such approval will not be unreasonably withheld or delayed. If the work is not acceptable, City will inform Consultant of the changes or revisions necessary to secure approval.
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20.3 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 2
SECTION 4: FEES AND PAYMENT
For services actually performed, the City will compensate Consultant at the rates set forth in the Fee Schedule in Exhibit B and in accordance with the terms set forth therein. Payment for Consultant's services in carrying out the entire Scope of Work shall be made within the budget limit, or limits shown, upon Exhibit B. Markups shall not be charged for any approved sub-consultants or subcontractors.
Consultant agrees that the payments to Consultant specified in this Section 4 will constitute full and complete compensation for all obligations assumed by Consultant under this Agreement. Such payments shall be considered the full compensation for all personnel, materials, supplies, and equipment used by Consultant in the Scope of Work Where conflicts regarding compensation may occur, the provisions of this section apply.
Variations from the budget for each task which are justified by statements indicating personnel time expended and submittal of a revised budget are only allowed with prior City approval; however, in no event shall the total fee charged for the flat fee Scope of Work set forth in Exhibit A exceed the budget of $834,800.00 without advance written City authorization in the form of an amendment or change order. This does not include the separate cost of the claims themselves.
All recurring fees such as claims service, program management and information technology fees are billed on actuals on a monthly basis in arrears. All recurring fees, including the flat administration fee, are billed on a quarterly basis in advance based on annual estimates. Takeover Claims (if applicable) are billed annually based on the number of takeover claims open at the beginning of each contract year or reopened during the year.
Unless otherwise specified in the fee schedule, payments shall be made monthly by the City within 30 days based on itemized invoices from the Consultant which list the actual costs and expenses.
All invoices shall contain the following affidavit signed by Consultant (if individual) or by an authorized representative of Consultant (if Consultant is an entity):
"I hereby certify [or as an authorized representative of Consultant] that the charge of (Insert invoice amount) as summarized above and shown in detail on the attachments is in accordance with the terms of Agreement dated (Insert Agreement Date), and has not been previously paid." This Agreement is contingent upon the appropriation of sufficient funding by the City for the services covered by this Agreement. If funding is reduced or deleted by the City for the services covered by this Agreement, the City has the option without penalty or liability to either terminate this Agreement or to offer an amendment to this Agreement indicating the reduced amount.
SECTION 5: TRAVEL REIMBURSEMENT POLICY
The City shall not be responsible for any travel, meal, or lodging reimbursements to Consultant and/or Consultant’s employees.
SECTION 6: CHANGES IN WORK
City may negotiate changes in the Scope of Work. No changes in the Scope of Work shall be made without the written approval of City and Consultant. Any change requiring compensation in excess of the sum specified in Exhibit B shall be approved in advance in writing by the City. Only City’s authorized representative(s) is authorized to approve changes to this Agreement on behalf of City.
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20.4 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 3
SECTION 7: TERM AND SCHEDULE
The term of this Agreement shall be for 3 years beginning on the effective date of this Agreement and terminating on December 31, 2027. At the option of the City, this Agreement may be renewed annually under the same contractual terms and conditions by letter agreement.
Consultant shall begin work as specified in a written authorization (e.g., Notice to Proceed) to perform services. The written authorization to perform work shall not be issued until after this Agreement has been approved and authorized by the City.
The Work Schedule for completion of the work shall be as shown upon Exhibit C. In the event that major changes are ordered, the schedule for completion as stated in Exhibit C may be adjusted by City so as to allow Consultant a reasonable period of time within which to complete any additional work which may be required as a result of the ordered changes.
Neither party will be held responsible for delay or default caused by declared emergencies, natural disasters, or any Force Majeure event which is beyond the party's reasonable control. Consultant will, however, make all reasonable efforts to remove or eliminate such a cause of delay or default and will, upon the cessation of the cause, diligently pursue performance of its obligations in this Agreement.
The City reserves the right to obtain the item(s) and/or services covered by this Agreement from another source during any on-going suspension of service due to the circumstances outlined above.
Consultant acknowledges that it is necessary for Consultant to complete its work on or before the completion date set forth in Exhibit C in order to allow the City to achieve its objectives for entering into this Agreement. The Parties therefore agree that time is of the essence in the performance of this Agreement.
SECTION 8: TERMINATION
The City may terminate the Agreement for any reason by providing written notice to Consultant not less than 30 calendar days prior to an effective termination date. The Consultant may terminate the Agreement for any reason by providing written notice to the City not less than 90 calendar days prior to an effective termination date The City may, at its option, allow Consultant to cure its failure to perform within 10 business days (or longer period authorized in writing by the City) from the date of the City’s termination notice. The termination shall be become effective if Consultant has not cured within the specified time period to the City’s satisfaction.
Consultant may terminate this Agreement for cause if the City fails to cure a material default in performance within a period of 30 calendar days (or such longer period agreed to by the Consultant), from the date of the Consultant’s written termination notice specifying the default in performance. Consultant must provide a written notice of termination to the City not less than 30 calendar days of the effective termination date.
Upon notice of termination by either the City or Consultant, the Consultant will immediately act to not incur any additional obligations, costs or expenses, except as may be reasonably necessary to terminate its activities. The City’s only obligation to the Consultant will be just and equitable payment for services authorized by, and received to the satisfaction of, the City up to and including the effective date of termination less any amounts withheld. In the event of termination by the City, City will pay consultant prorated flat fee through the effective date of termination. All finished or unfinished work or documents procured or produced under the Agreement will become property of the City upon the termination date. In the event of Consultant’s failure to perform pursuant to the Agreement, the City reserves the right to obtain services elsewhere and Consultant will be liable for the Docusign Envelope ID: A6BB9A85-2F97-4FDA-9B57-0B6B33146D89
20.5 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 4
difference between the prices set forth in the terminated Agreement and the actual cost to the City. Termination of the Agreement pursuant to this paragraph shall not relieve the Consultant of any liability to City for additional costs, expenses, or damages sustained by City due to failure of the Consultant to perform pursuant to the Agreement. City may withhold any payments to Consultant for the purpose of set-off until such time as the exact amount of damages due City from Consultant is determined. After the effective date of termination, Consultant will have no further claims against the City under the Agreement. No other compensation will be payable for anticipated profit on unperformed services.
Consultant is providing services to City on a life of contract basis. If requested by City, Consultant will continue to process City’s Qualified Claims remaining open at the expiration or termination of this Agreement, if any, provided that City shall continue to make adequate funds available for the payment of such Qualified Claims, including any allocated loss adjustment expenses and pay information technology fees, fees for encrypted data files, program management fees, and any other applicable fees. This provision shall not apply unless the additional fee for this service shall have been negotiated and agreed to in writing prior to the effective date of termination.
If Consultant is required by Insurer to adjust City’s insured Qualified Claims after expiration or termination of this Agreement, City shall continue to fund claims payments and allocated loss adjustment expenses as otherwise provided herein, and City shall pay Consultant a mutually agreed upon fee, plus the prevailing fee for any information technology or encrypted data files required by Insurer.
SECTION 9: INSURANCE
Prior to the beginning of and throughout the duration of the Agreement, Consultant will maintain and comply with the Insurance Requirements as set forth in Exhibit D. Consultant will insure the City against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder. The insurance coverages required shall not in any way limit the liability of the Consultant.
SECTION 10: INDEMNIFICATION
Consultant agrees, to the fullest extent permitted by law, indemnify, defend, and hold harmless the City, its officials, officers, employees, agents, and volunteers (collectively, “City Indemnitees”) from and against any and all liability, claim, action, loss, injury, damage, judgment, or expense, including attorneys’ fees and costs (“Losses”) caused by or resulting arising directly from the negligence, recklessness, or willful misconduct of Consultant, Consultant’s officers, employees, agents, or subcontractors in any way related to this Agreement.
Consultant’s duty to indemnify and hold harmless Indemnitees shall not apply to the extent such Losses are caused by the sole or active negligence or willful misconduct of City Indemnitees. Consultant’s obligation to defend shall arise regardless of any claim or assertion that Indemnitees caused or contributed to the Losses. City agrees, to the fullest extent permitted by law, to indemnify, defend, and hold harmless the Consultant, its officials, officers, employees, agents, and volunteers (collectively, “Consultant Indemnitees”) from and against any and all Losses caused by or resulting the sole or active negligence or willful misconduct of City Indemnitees. Each party agrees to keep the other fully informed of any matter for which it is defending, holding harmless or indemnifying the other party.
In the event this Agreement involves the performance of design professional services by Consultant, Consultant’s officers, employees, agents, or subcontractors, Consultant’s costs to defend Indemnitees shall not exceed the Consultant’s proportionate percentage of fault per Civil Code §2782.8. This section shall survive the termination or expiration of this Agreement.
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20.6 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 5
SECTION 11: EQUAL EMPLOYMENT OPPORTUNITY/NON-DISCRIMINATION POLICIES City’s policies promote a working environment free from abusive conduct, discrimination, harassment, and retaliation; and require equal opportunity in employment for all regardless of race, religious creed (including religious dress and grooming practices), color, national origin (including language use restrictions), ancestry, religion, disability (mental and physical), medical condition, sex, gender (including gender identity and gender expression), physical characteristics, marital status, age, sexual orientation, genetic information (including family health history and genetic test results), organizational affiliation, and military or veteran status, or any other consideration made unlawful by local, State or Federal law. City requires Consultant to comply with all applicable Federal and State and local equal employment opportunity laws and regulations, and Consultant is responsible for ensuring that effective policies and procedures concerning the prevention of abusive conduct, discrimination, harassment, and retaliation exist in Consultant’s business organization. The City’s current Equal Employment Opportunity and Non-Discrimination policies to which this Section applies may be viewed at http://www.codepublishing.com/CA/SantaCruz/?SantaCruz09/SantaCruz0983.html and http://www.cityofsantacruz.com/home/showdocument?id=59192.
SECTION 12: LEGAL ACTION/ATTORNEYS’ FEES
If any action at law or in equity is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief. The laws of the State of California, with jurisdiction in the Santa Cruz County Superior Court, shall govern all matters relating to the validity, interpretation, and effect of this Agreement and any authorized or alleged changes, the performance of any of its terms, as well as the rights and obligations of Consultant and the City.
SECTION 13: AMENDMENTS
This Agreement may not be amended in any respect except by way of a written instrument which expressly references and identifies this particular Agreement, which expressly states that its purpose is to amend this particular Agreement, and which is duly executed by the City and Consultant. Consultant acknowledges that no such amendment shall be effective until approved and authorized by the City’s authorized representative. No representative of the City is authorized to obligate the City to pay the cost or value of services beyond the scope of services set forth in Exhibit A.
Such authority is retained solely by the City Manager, Director, or their designee. Unless expressly authorized by the City Manager or Director, Consultant’s compensation shall be limited to that set forth in Exhibit B, Fee Schedule.
SECTION 14: MISCELLANEOUS PROVISIONS
1. Project Manager/Key Staff. Director reserves the right to evaluate and confer with Consultant regarding the project manager or other key staff assigned by Consultant to perform the work under this Agreement. Consultant shall replace the project manager or key staff upon Director’s request due to Director’s concern about their performance. Otherwise, no change in assignment by the Consultant may occur without prior written approval of the City.
2. Consultant Services Only. Consultant is employed to render professional services only and any payments made to Consultant are compensation solely for such professional services.
3. Independent Contractor. In the performance of this Agreement, it is expressly understood that Consultant, including each of Consultant’s employees, agents, subcontractors or others under Consultant’s supervision or control, is an independent contractor solely responsible for its own acts and omissions, and shall not be considered an employee of the City for any purpose. Consultant agrees to indemnify, defend and hold harmless the City, its officials, officers, employees, and agents against any claim or liability, including attorneys’ fees and costs, arising in any manner related to this Agreement that an employee, agent or others under Consultant’s supervision or control was misclassified.
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20.7 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 6
In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services under this Agreement is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City.
4. Consultant Not an Agent. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever.
5. Subcontractors. Consultant shall obtain prior approval of the City prior to subcontracting of any work pursuant to this Agreement. If at any time, the City determines any subcontractor is incompetent or unqualified, Consultant will be notified and will be expected to immediately cancel the subcontract. Consultant shall require and verify that all subcontractors maintain insurance meeting all of the requirements stated herein, including naming the City of Santa Cruz, its officers, officials, employees, agents, and volunteers as additional insureds. Any modification to the insurance requirements for subcontractors must be agreed to by the City in writing.
Consultant shall be as fully responsible to the City for the negligent acts and omissions of its contractors and subcontractors or subconsultants, and of persons either directly or indirectly employed by them, or acting on Consultant’s behalf pursuant to this Agreement, as it is for the acts and omissions of persons directly employed by Consultant. Consultant’s obligation to pay its subconsultants is an independent obligation from the City’s obligation to make payments to the Consultant.
6. Assignment. This Agreement shall not be assigned without first obtaining the express written consent of the Director or after approval of the City Council. Neither party may assign this Agreement unless this Agreement is amended in accordance with its terms.
7. Conflicts of Interest. Consultant agrees to comply with conflict of interest laws in performing the work and services under this Agreement. Consultant covenants (on behalf of Consultant and Consultant’s employees, agents, representatives, and subcontractors) that there is no direct or indirect interest, financial or otherwise, which would conflict in any manner or degree with the performance of services required under this Agreement.
Consultant acknowledges and agrees to comply with applicable provisions of conflict of interest law and regulations, including the CA Political Reform Act, Sections 1090 and 87100 of the Government Code, and the City’s conflict of interest code. Consultant will immediately advise City if Consultant learns of a conflicting financial interest of Consultant during the term of this Agreement.
8. City Property. The work, or any portion, of Consultant in performing this Agreement shall become the property of City. The Consultant may be permitted to retain copies of such work for information and reference in connection only with the provision of services for the City. All materials and work product, whether finished or unfinished, shall be delivered to City upon completion of contract services or termination of this Agreement for any reason. Consultant acknowledges and agrees that the work product shall be considered a work made for hire within the meaning of the patent and copyright laws of the United States; and Consultant agrees that all copyrights which arise from creation of project-related documents and materials pursuant to this Agreement shall be vested in the City and Consultant waives and relinquishes all claims to copyright or other intellectual property rights in favor of City. Any work product related to this Agreement shall be confidential, not to be used by the Consultant on other projects or disclosed to any third party, except by agreement in writing by the City, or except as otherwise provided herein. Consultant’s final deliverables shall comply with Section 508 (29 U.S.C. Section 794d) accessibility requirements, as applicable.
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20.8 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 7
9. Intellectual Property and Indemnity. Consultant represents to City that, to the best of Consultant’s knowledge, any Intellectual Property (including but not limited to: patent, patent application, trade secret, copyright and any applications or right to apply for registration, computer software programs or applications, tangible or intangible proprietary information, or any other intellectual property right) in connection with any services and/or products related to this Agreement does not violate or infringe upon any Intellectual Property rights of any other person or entity.
To the fullest extent permitted by law, Consultant agrees to indemnify, defend, and hold harmless City, its officials, officers, employees, and agents, from any and all claims, demands, actions, liabilities, damages, or expenses (including reasonable attorneys’ fees and costs) arising out of a claim of infringement, actual or alleged, direct or contributory, of any Intellectual Property rights in any way related to Consultant’s performance under this Agreement or to the City’s authorized intended or actual use of Consultant’s product or service under this Agreement. This provision shall survive termination or expiration of this Agreement.
If any product or service becomes, or in the Consultant’s opinion is likely to become, the subject of a claim of infringement, the Consultant shall, at its sole expense: (i) provide the City the right to continue using the product or service; or (ii) replace or modify the product or service so that it becomes non-infringing; or (iii) if none of the foregoing alternatives are possible even after Consultant’s commercially reasonable efforts, in addition to other available legal remedies, City will have the right to return the product or service and receive a full or partial refund of an amount equal to the value of the returned product or service, less the unpaid portion of the purchase price and any other amounts, which may be due to the Consultant. City shall have the right to retrieve its data and proprietary information at no charge prior to any return of the product or termination of service.
10. Confidentiality.
a. Consultant shall not acquire any ownership interest in data and information (“City Data”) received by Consultant from City, which shall remain the property of the City. Certain information may be considered confidential (“Confidential Information”). Confidential Information shall mean all information or proprietary materials (in every form and media) not generally known to the public and which has been or is hereafter disclosed or made available directly or indirectly to Consultant through any means of communication, either verbally or in writing even if it has not been designated in writing as “Confidential” to Consultant in connection with this Agreement. Unless otherwise required by law, Consultant shall not, without City’s written permission, use or disclose City Data and/or Confidential Information other than in the performance of the obligations under this Agreement. As between Consultant and City, all City Confidential Information shall remain the property of the City. Consultant shall not acquire ownership interest in the City’s Confidential Information. b. Consultant shall be responsible for ensuring and maintaining the security and confidentiality of City Data and Confidential Information, protect against any anticipated threats or hazards to the security or integrity of City Data and Confidential Information, protect against unauthorized access to or use of City Data and Confidential Information that could result in substantial harm or inconvenience to City or any end users; and ensure the proper return and/or disposal of City Data and Confidential Information upon termination of this Agreement with notice to the City.
c. Consultant shall take appropriate action to address any incident of unauthorized access to City Data and Confidential Information, including addressing and/or remedying the issue that resulted in such unauthorized access, notifying City as soon as possible of any incident of unauthorized access to City Data and Confidential Information, or any other breach in Consultant’s security that materially affects Docusign Envelope ID: A6BB9A85-2F97-4FDA-9B57-0B6B33146D89
20.9 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 8
City or end users; and be responsible for ensuring compliance by its officers, employees, agents, and subcontractors with the confidentiality provisions hereof. Should confidential and/or legally protected City Data be divulged to unauthorized third parties, Consultant shall comply with all applicable federal and state laws and regulations, including but not limited to California Civil Code sections 1798.29 and 1798.82 at Consultant’s sole expense. Consultant shall not charge City for any expenses associated with Consultant’s compliance with these obligations.
d. Consultant shall defend, indemnify and hold harmless City, its officials, officers, employees and agents against any claim, liability, loss, injury or damage (including attorneys’ fee and costs) arising out of, or in connection with, the unauthorized use, access, and/or disclosure of City Data and/or Confidential Information by Consultant and/or its agents, employees or subcontractors, excepting only loss, injury or damage caused by the sole negligence or willful misconduct of the City. This provision shall survive the termination or expiration of this Agreement.
11. Consultant's Records/Audits. Consultant shall maintain accurate accounting records and other written documentation pertaining to the costs incurred relating to this Agreement for examination and audit by the City, State, or federal government, as applicable, in compliance with Gov. Code §8546.7 for a contract in excess of $10,000, or in compliance with other applicable federal laws (e.g. 48 CFR 31) or regulations for a period of three (3) years from: the date of the final City payment for Consultant's services, or from the date of final disposition of real property or equipment acquired with federal funds, or date of the termination of this Agreement, whichever is later. If Consultant engages a subcontractor to perform work related to this Agreement with a cost of $10,000 or more over a 12-month period, such subcontract shall contain these same requirements. This provision shall survive the termination of this Agreement.
12. California Public Records Act. City is a public agency subject to the disclosure requirements of the California Public Records Act (“CPRA”). If Consultant’s proprietary information is contained in documents or information submitted to City, and Consultant claims that such information falls within one or more CPRA exemptions, Consultant must clearly mark such information “Confidential and Proprietary,” and identify the specific lines containing the information. In the event of a request for such information, City will make best efforts to provide notice to Consultant prior to such disclosure. If Consultant contends that any documents are exempt from the CPRA and wishes to prevent disclosure, it is required to obtain a protective order, injunctive relief, or other appropriate remedy from a court of law in Santa Cruz County before the City is required to respond to the CPRA request. If Consultant fails to obtain such remedy within the time the City is required to respond to the CPRA request, City may disclose the requested information without any liability. Consultant further agrees that it shall defend, indemnify and hold City harmless against any claim, action or litigation (including but not limited to all judgments, costs, and attorney’s fees) that may result from denial by City of a CPRA request for information arising from any representation, or any action (or inaction), by the Consultant.
13. Compliance with Laws. All activities of Consultant, its employees, subcontractors and/or agents will be carried out in compliance with all applicable federal, state, and local laws and regulations. Consultant further agrees to comply with the covenant of good faith and fair dealing and other provisions of Santa Cruz Municipal Ordinance chapter 3.09, or otherwise Consultant may be subject to penalties including being declared an irresponsible contractor.
14. Licensure. Consultant agrees that Consultant, its subcontractors and/or agents (if any) has/have complied with all applicable federal, state, and local licensing requirements and agrees to provide proof of a current City of Santa Cruz Business Tax Certificate if:
Consultant, its subcontractor(s) and agent(s) or its business is/are located in the City of Santa Cruz; Will perform actual work in the City of Santa Cruz for 6 or more days annually; or Will use company vehicles to deliver within the City of Santa Cruz for 6 or more days annually.
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20.10 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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For additional information and licensing requirements, view the City’s Business Licenses and Permits webpage or call the Revenue and Taxation division at 831/420-5070.
15. Living Wage. Every contract for services to the City for $10,000 or more, is subject to City of Santa Cruz Living Wage Ordinance number 2000-25. If applicable, Consultant agrees to comply with the requirements of the Living Wage ordinance as provided in Santa Cruz Municipal Code Chapter 5.10.
16. Prevailing Wages for Public Work. To the extent that the work or services to be performed under this Agreement may be considered a “public work” (construction, alteration, demolition, or repair work) pursuant and subject to Labor Code section 1720 et seq., Consultant (and any subconsultant performing the work or services) shall conform to any and all prevailing wage requirements applicable to such work/and or services under this Agreement. Consultant (and any subconsultant) shall adhere to the prevailing wage determinations made by the Director of Industrial Relations (DIR) pursuant to California Labor Code Part 7, Chapter 1, Article 2, applicable to the work, if any. All workers employed in the execution of a public works contract (as such term is defined California Labor Code section 1720 et seq. and section 1782(d)(1)) must be paid not less than the specified prevailing wage rates for the type of work performed. (CA Labor Code sections 1720, 1774 and 1782.)
To the extent applicable to the scope of work and services under this Agreement, Consultant agrees to be bound by the state prevailing wage requirements, including, but not limited to, the following:
a. If a worker is paid less than the applicable prevailing wage rate owed for a calendar day (or any portion thereof), Consultant shall pay the worker the difference between the prevailing wage rate and the amount actually paid for each calendar day (or portion thereof) for which the worker(s) was paid less than the prevailing wage rate, as specified in Labor Code section 1775; b. Consultant shall maintain and make available payroll and worker records in accordance with Labor Code sections 1776 and 1812;
c. If Consultant employs (and/or is legally required to employ) apprentices in performing the work and/or services under this Agreement, Consultant shall ensure compliance with Labor Code section 1777.5; d. Consultant is aware of the limitations imposed on overtime work by Labor Code sections 1810 et seq. and shall be responsible for any penalties levied in accordance with Labor Code section 1813 for failing to pay required overtime wages;
e. Consultant shall post a copy of the applicable wage rates at each jobsite at a location readily available to its workers.
f. Any failure of Consultant and/or its subconsultant to comply with the above requirements relating to a public work project shall constitute a breach of this Agreement that excuses the City’s performance of this Agreement at the City’s sole and absolute option and shall be at the sole risk of Consultant. Consultant on behalf of itself and any subconsultant, agree to indemnify, defend and hold harmless the City and its officials, officers, employees, and agents from and against any and all claims, liabilities, losses, costs, expenses, attorney’s fees, damages, expenses, fines, financial consequences, interest, and penalties, of any kind or nature, arising from or relating to any failure (or alleged failure) of the Consultant and any subconsultant to pay prevailing wages or to otherwise comply with the requirements of prevailing wage law relating to a public work.
g. Consultant acknowledges that it and/or any subconsultant may not engage in the performance of any contract for public work unless currently registered with the DIR and qualified to perform public work Docusign Envelope ID: A6BB9A85-2F97-4FDA-9B57-0B6B33146D89
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pursuant to Labor Code section 1725.5 [with limited exceptions from this requirement for bid purposes only under Labor Code section 1771.1(a)].
17. Storm Water Requirements. To the extent applicable to the Scope of Work under this Agreement, Consultant, Consultant’s employees, subcontractors, and agents are required to abide by the applicable City of Santa Cruz Storm Water Best Management Practices (BMPs) for the duration of the work. The City’s mandatory Storm Water BMPs, which are listed according to the type of work, operations, or business, are located on the City website at: https://www.cityofsantacruz.com/government/city-departments/public-works/stormwater/bestmanagement-practices
18. Dispute Resolution. The Parties agree to attempt in good faith to resolve through negotiation any dispute, claim or controversy arising out of or relating to this Agreement. Either party may initiate negotiations by providing written notice in letter form to the other party, setting forth the subject of the dispute and the relief requested. Promptly upon such notification, the Parties shall meet at a mutually agreeable time and place in order to exchange relevant information and perspective, and to attempt to resolve the dispute. In the event that no resolution is achieved, and if, but only if, the parties mutually agree, then prior to pursuing formal legal action, the parties shall make a good faith effort to resolve the dispute by non-binding mediation or negotiations between representatives with decision-making power, who, to the extent possible, shall not have had substantive involvement in the matters of the dispute. To the extent that the dispute involves or relates to a public works project, the Parties agree to attempt to resolve the dispute by complying with the claims process as set forth in Public Contract Code sections 9204(e), 20104-20104.6, but without waiving the requirements of the California Tort Claims Act, Gov’t Code section 800 et seq. unless otherwise agreed to by the Parties.
19. Force Majeure. Neither party hereto shall be considered in default in the performance of its obligation hereunder to the extent that the performance of any such obligation is prevented or delayed by an act of God, natural disaster, pandemic, acts of terrorism, war, a strike, lockout or other labor difficulty, or other peril, which is beyond the reasonable control of the affected party and without the negligence of the respective Parties. Each party hereto shall give notice promptly to the other of the nature and extent of any Force Majeure claimed to delay, hinder or prevent performance of the services under this Agreement. Each Party will, however, make all reasonable efforts to remove or eliminate such a cause of delay or default and will, upon the cessation of the cause, diligently pursue performance of its obligations in this Agreement. In the event either party is prevented or delayed in the performance of its respective obligation by reason of such Force Majeure, the only remedy is that there may be an equitable adjustment of the schedule based on City’s sole discretion.
20. Complete Agreement. This Agreement, along with any attachments, is the full and complete integration of the Parties’ agreement with respect to the matters addressed herein, and that this Agreement supersedes any previous written or oral agreements between the Parties with respect to the matters addressed herein. Unless otherwise stated, to the extent there is any conflict between this Agreement and any other agreement (written or oral), the terms of this Agreement shall control.
21. Severability. The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render the other provisions unenforceable, invalid or illegal.
22. Waiver. Waiver by any party of any portion of this Agreement shall not constitute a waiver of the same or any other portion hereof.
23. Governing Law. This Agreement shall be governed by and interpreted in accordance with California law.
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20.12 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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24. Contract Interpretation. Each party acknowledges that it has reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
25. MacBride Principles/Peace Charter. City of Santa Cruz Resolution NS-19,378 (7/24/90) encourages all companies doing business in Northern Ireland to abide by the MacBride Principles and Peace Charter.
26. Notices. If either party shall desire or is required to give notice to the other such notice shall be given in writing, via email, and concurrently delivered by: (a) personal delivery, in which case notice is effective upon delivery; (b) overnight courier (i.e., Federal Express) with charges prepaid or charged to the sender’s account, in which case notice is effective when delivered; (c) priority U.S. Mail, in which case notice shall be deemed delivered on the second business day after the deposit thereof with the U.S. Postal Service. Notices shall be addressed to recipient as follows:
To CITY:
City of Santa Cruz
Human Resources Director
Sara De Leon
809 Center Street, #7
Santa Cruz, CA 95060
831-420-5042
[email protected]
To CONSULTANT:
General Counsel – Americas
Sedgwick Claims Management Services, Inc.,
8125 Consultant Way
Memphis, TN 38125 Address
[email protected]
657-242-8703
Changes to the above information shall be given to the other party in writing ten (10) business days before the change is effective.
27. Counterparts. The Parties may execute this Agreement in two or more counterparts, which shall, in the aggregate, be deemed an original but all of which, together, shall constitute one and the same instrument. A scanned, electronic, facsimile or other copy of a party’s signature shall be accepted and valid as an original.
28. Warranty of Authority. The signatories to this Agreement warrant and represent that each is authorized to execute this Agreement and that their respective signatures serve to legally obligate their respective representatives, agents, successors and assigns to comply with the provisions of this Agreement. [SIGNATURES ON FOLLOWING PAGE]
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20.13 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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Signature Requirements for Corporation – 2 officer signatures required (one from each group, unless person signing holds officer positions in both Group 1 and 2):
Group 1: Chief Executive Officer, Chairman of the Board, President, or Vice President Group 2: Secretary, Assistant Secretary, Chief Financial Officer, Treasurer, Assistant Treasurer Approved As To Form:
By: _____________________________ Date: __________________ Office of the City Attorney, Ashley Wheelock
CITY OF SANTA CRUZ
By: _____________________________ Date: __________________ Matt Huffaker
City Manager
CONSULTANT
By: _____________________________ Date: __________________ Printed: ___________________________ Title: __________________ By: _____________________________ Date: __________________ Printed: ___________________________ Title: __________________ Docusign Envelope ID: A6BB9A85-2F97-4FDA-9B57-0B6B33146D89 1/6/2025
1/6/2025
1/3/2025
20.14 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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EXHIBIT A: SCOPE OF WORK
1. Services to Be Performed by Consultant: Consultant agrees to perform the following services:
Consultant is administering the self-insured workers’ compensation claims for the City of Santa Cruz as follows.
State(s) Serviced: CA
Consultant Servicing Office: Concord CA
On behalf of City, this service program will be coordinated by:
City Representative: Sara De Leon
City Name: City of Santa Cruz
City Address: 809 Center St., #7, Santa Cruz, CA 95060
Telephone #: (831) 420-5042
On behalf of Consultant, this service program will be coordinated by:
Consultant Representative: Glenn Betts
Consultant Claims Management Services, Inc.
Consultant Office Address: Concord CA
Telephone #: (657)242-8703
Each party reserves the right to change its designated representative during the term of the Agreement.
A. With regard to Claims Administration, Consultant shall:
(1) During the term of this Agreement, review all claim and loss reports received from City that are required to be reviewed under the Program (a “Qualified Claim”), and process each such claim or loss report in accordance with applicable statutory and administrative regulations;
(2) Conduct an investigation of each Qualified Claim to the extent deemed necessary by Consultant in the performance of its obligations hereunder; Docusign Envelope ID: A6BB9A85-2F97-4FDA-9B57-0B6B33146D89
20.15 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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(3) Arrange for independent investigators, appraisers, or medical or other experts to the extent deemed necessary by Consultant in connection with processing any Qualified Claim;
(4) Pay benefits, expenses, and adjust or settle each Qualified Claim, but only if in the sole judgment of Consultant such payment would be prudent for City and the anticipated amount thereof does not exceed the limit specified in accordance with paragraphs 2F and 2G below, or as City specifically approves or directs such action in writing;
(5) Maintain a file for each Qualified Claim which shall be the property of City (for self-insured claims) or Insurer (for insured claims) and which shall be available for review by City or Insurer during normal business hours upon three (3) days’ prior written notice;
(6) Notify City’s first layer of insurance coverage for each Qualified Claim where the values may exceed City’s retention, providing such insurer with necessary information on the current status of those claims, unless relieved of this obligation by City pursuant to paragraph 2A;
(7) Assist City’s counsel, if requested, in preparing the defense of litigated cases arising out of Qualified Claims, negotiating settlements and pursuing subrogation or contribution actions;
(8) Maintain a current estimate of the expected total cost of each Qualified Claim which is based on facts known at the estimation date, but is not trended or actuarially developed;
(9) Use a proprietary data management system to furnish to City agreed upon loss and information reports. These reports shall contain information such as each Qualified Claim date, condensed claim description, payments made, estimated future costs and total expected costs of all Qualified Claims, as well as summary and other data deemed relevant by Consultant, but not IBNR (incurred but not reported) claims or actuarially developed loss values; and (10) Annually report federal, state and local 1099 information under Consultant’s tax identification number(s) for vendor payments issued by Consultant on bank accounts established and managed by Consultant on behalf of City, but not for payment authorizations when Consultant does not issue the checks. City recognizes and agrees that any earnings credits realized on the account(s) will be Docusign Envelope ID: A6BB9A85-2F97-4FDA-9B57-0B6B33146D89
20.16 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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utilized to offset banking analysis fees related to any Consultant managed claim fund account. To the extent that earnings credits do not off-set all bank account fees, City shall pay the additional bank account fees due.
B. Consultant will provide managed care services as set forth in the attached Managed Care Service Schedule.
C. Consultant will provide the call center services as set forth in the attached Call Center Service Schedule.
D. Consultant shall provide the special investigative unit (SIU) services set forth in the attached SIU Service Schedule.
E. Consultant shall provide City with the capability to perform searches in a database which contains information regarding City’s Qualified Claims as set forth in the attached OSHA Database Service Schedule.
F. Consultant will provide the MMSEA/SCHIP Reporting services as set forth in the Medicare Reporting Services Schedule attached hereto.
2. Obligations of City:
A. City shall provide Consultant in a timely manner with its first layer of insurance coverage for the policy years necessary for proper notification of applicable Qualified Claims to such first layer insurers by Consultant. Should City fail to provide this information, after Consultant has notified City of the failure and City has failed to respond, Consultant shall be relieved of any such reporting obligations.
B. City shall pay to Consultant a service fee which, in the initial term of this Agreement, shall be computed and payable as shown on the attached Exhibit B, plus applicable taxes, if any. City shall reimburse Consultant for the reasonable and customary out-of-pocket expenses incurred by Consultant pursuant to Exhibit B. If City, in its sole discretion, requests Consultant to perform services outside of the scope of work listed herein, then City shall compensate Consultant for such services at Consultant’s then applicable standard rates for such service.
C. City shall at all times provide funds adequate for the payment of Qualified Claims, including allocated loss adjustment expenses. For purposes of this Agreement, allocated Docusign Envelope ID: A6BB9A85-2F97-4FDA-9B57-0B6B33146D89
20.17 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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loss adjustment expenses shall mean all costs, charges or expenses incurred by Consultant, its agents or its employees which are properly chargeable to a Qualified Claim including, without limitation, court costs; fees and expenses of attorneys; appeal bonds; independent adjusters; investigators; appraisers; vocational services, training or evaluation; medical expenses and medical cost containment service providers (including those provided by Consultant, if applicable); durable medical equipment; rehabilitation services; experts and witnesses; fees for obtaining statements, diagrams, reports, records, documents, transcripts, depositions, Medicare reporting and compliance services fees and costs, index bureau filings and re-filings, and photographs; cost of file retrieval; cost associated with the pursuit of subrogation and/or Special Injury Fund claims; hearing representation services; and travel fees and expenses incurred at City’s request and with pre-authorization from the City. Consultant may, but need not, elect to utilize its own staff or affiliated entities to perform these services. Associated fees and costs will be charged as allocated loss adjustment expenses.
D. City shall deposit funds for payment of Qualified Claims, including allocated loss adjustment expenses, in a bank account or accounts (the “Claim Account”). City shall be responsible for providing sufficient funds to enable Consultant to write checks on the Claim Account for use in the payment of City’s Qualified Claims. Such funds shall be provided by electronic funds transfer at the inception of the Program and replenished by electronic funds transfer promptly from time to time thereafter. The amount of the escrow required for the Claim Account may be modified in the following instances:
(1) There is a substantial increase or decrease in claims payment activity; (2) City fails to fund the Claim Account within the agreed upon time period; (3) There is a change in funding cycle;
(4) The escrow is recalculated at City’s request; or
(5) The escrow amount is automatically recalculated on an annual basis.
E. It is expressly understood that Consultant shall not be required to advance its own funds to pay losses or allocated loss adjustment expenses for any Qualified Claim hereunder. It is further understood that if City fails to promptly provide funds sufficient to allow required payments to be made timely, or if funds previously provided by or on behalf of City are seized, frozen or otherwise unavailable to Consultant to allow required payments to be made timely on account of the bankruptcy, receivership, or other insolvency proceeding of City [or Insurer, in cases where Insurer funds claim account], Consultant will have no obligation to perform any claims payments services during any period of underfunding. Consultant shall notify City immediately if it believes there are insufficient funds or if it believes there will soon be insufficient funds.
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F. Consultant shall have full discretion to make an individual payment of an allocated loss adjustment expense in an amount up to $25,000 on any Qualified Claim and shall not need the approval of City to make such payments. This amount may be changed at any time by City upon ten (10) days’ prior written notice to Consultant. It is agreed that Consultant shall have full authority and control in all matters pertaining to the payment, processing, investigation and administration of Qualified Claims within the limit established by this paragraph.
G. Consultant shall have full discretion to redeem, compromise or settle any Qualified Claim for an amount not to exceed $25,000 and shall not need the approval of City to consummate such redemption, compromise or settlement. This amount may be changed at any time by City upon ten (10) days’ prior written notice to Consultant. Failure of Consultant to settle a Qualified Claim within such limit, however, shall not subject Consultant to any liability whatsoever in the event of an adverse judgment entered by any court or the settlement of such Qualified Claim for an amount in excess of such limit.
H. Should City fail to make timely payments of any service fees due Consultant or should City in any other way breach a material term of this Agreement, Consultant shall then have the right to terminate this agreement pursuant to Section 8: Termination.
I. Upon receipt of any form of notice advising of facts which are or may be a Qualified Claim, City shall promptly assign the Qualified Claim to Consultant for management.
City shall promptly provide Consultant with such information as Consultant may require, including, but not limited to, any copy of documents describing its Program, including but not limited to documents submitted to any legal, administrative or regulatory authority for approval of the Program, as well as incident reports and related information in City’s possession and otherwise cooperate with Consultant in carrying out Consultant’s tasks hereunder.
Professional Advice:
Nothing in this Agreement is intended to require Consultant to engage in the practice of law, and services provided shall not be considered legal, tax or accounting advice, and Consultant shall in no event give, or be required to give, any legal opinion or provide any legal, tax or accounting representation to City. City acknowledges that Consultant has been engaged to provide certain services and that it is not the intent of the Parties that Consultant assume any insurance risk. Consultant shall not act as an insurer for City, and this Agreement shall not be construed as an insurance policy; it being understood that Consultant is in no event financially responsible for payment or satisfaction of City’s claims, lawsuits, or any form of cause of action against City from Consultant funds.
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20.19 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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MANAGED CARE SERVICE SCHEDULE
City has chosen the following managed care services, as defined herein:
(1) Provider Fee Management - The bill review process reviews bills against up-to-date and accurate mandated state fee schedules or the usual and customary (“UCR”) data base, whichever is appropriate, to reveal excessive, duplicate, or inappropriate charges. (2) Preferred Provider Organization (“PPO”) Networks - Consultant will arrange for access and channeling to national and regional PPO networks including specialty networks (Diagnostics, Physical Therapy, etc.) under the managed care program in conjunction with the Provider Fee Management service.
(3) Hospital Bill Review - Hospital or outpatient non-PPO bills will be reviewed by a nurse for possible errors or excessive charges relative to the patient’s medical diagnosis at Consultant’s or City’s request.
(4) Out of Network Bill Review – Bills from out of network health care providers will be reviewed, and if appropriate a negotiation with the billing provider will be pursued. Additionally, inpatient and outpatient procedures that are not addressed by an individual state’s fee schedule or UCR will be repriced to a geographically driven and cost to charge repricing database to determine appropriate reimbursement.
(5) Specialty Usual and Customary Review – Consultant’s vendors will apply geographic charges (fee for same procedure charged by other providers in same area) and cost to charge ratios (actual cost to provider for procedure or hospital stay v. amount charged) to determine reimbursement of medical services billed that are not addressed within the jurisdictional fee schedule or usual and customary reimbursement.
(6) Field Case Management and Crisis Care - Consultant will assign appropriate cases for field medical, crisis care, and vocational management services.
(7) Utilization Review, which includes the following components:
(a) Prospective Review - a review prior to treatment or admission conducted by an experienced registered nurse to validate or negotiate the necessity, setting, frequency, intensity and duration of care delivery.
(b) Concurrent Review - during the course of treatment, a review of treatment and planned procedures and establishment of target completion dates.
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(c) Retrospective Utilization Review- a review post treatment conducted by an experienced registered nurse to identify inappropriate treatment utilization.
(d) Peer Review - physician-to-physician contact to resolve treatment and diagnosis questions.
(8) Prescription Services – Pharmacy program made available to City’s employees whereby a network of pharmacies, local to Employer sites/employee residences will provide prescription medications related to the work related injury with no out of pocket expenses to the employee. (9) Pharmacy review services include a review of all current medications prescribed to the claimant as well as a review of over the counter medication being taken by the claimant. The purpose of the review is to evaluate whether the medications prescribed to and/or taken by the claimant are appropriate for treatment of the injury or ailment which is the subject of the underlying claim being administered by Consultant.
(10) Telephonic Case Management - Consultant will assign appropriate cases for telephonic medical, vocational/return to work, or behavioral health management services. (11) Complex file review (nurse review) - Hospital or outpatient non-PPO bills that meet specific, preestablished criteria may be reviewed by a nurse for possible errors or excessive charges relative to the patient’s medical diagnosis.
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20.21 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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CALL CENTER SERVICE SCHEDULE
1. Consultant will perform the following call center services:
A. Provide to the City a toll free number owned by Consultant to be used by City and its employees to access the Consultant telephonic claims intake center during the term of the Agreement between City and Consultant regarding a claims administration program for City’s Program as defined in Exhibit A.
B. Shall fill out the appropriate form as required by an applicable program or statute.
C. Provide a copy of the form to City via fax, mail, or electronically as agreed with City.
D. Provide a copy of the form via fax, or electronically to the Consultant office responsible for managing the loss, as necessary.
2. City agrees that:
A. City shall provide Consultant in a timely manner information to facilitate distribution of report copies by Consultant.
B. City shall pay to Consultant a service fee which, in the initial term of this Agreement, shall be computed and payable as shown in Exhibit B, attached hereto and made a part hereof, plus applicable taxes, if any.
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20.22 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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SIU SERVICE SCHEDULE
Consultant Special Investigations Unit (“Consultant SIU”) will provide centralized management of investigative service vendors and will maintain a national vendor list of approved service providers based upon City or local Consultant office preference. Consultant SIU will establish quality benchmarking and ensure its vendors are properly licensed and maintain insurance coverage as mandated in vendor agreements with these firms.
Consultant SIU will serve as a central referral and coordination unit providing the following SIU services for the fees itemized in Exhibit B:
1. Assessment services including case review, consultation, action plan development, state fraud filing, claim file demand and fraud packaging.
2. Field services including surveillance, activity checks, alive and well checks, and on-site investigations including recorded statements, AOE/COE, and scene investigations.
3. Research services including comprehensive background checks, internet searches, facility canvasses public records, skip tracing, criminal, civil and asset checks.
4. SIU compliance services including carrier and state annual reporting and fraud awareness training.
5. And, other services as outlined in Exhibit B.
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20.23 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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OSHA DATABASE SERVICE SCHEDULE
Basic case demographic data (name, address, etc.) will be loaded when the claim is initially set up in JURIS®.
Any changes or updates in JURIS® are updated in viaOne® OSHA. The City cannot modify any of the demographic data in viaOne® OSHA.
Special OSHA fields are updated from the JURIS® Workers’ Compensation Detail screen OSHA tab. This data is completed by Consultant colleagues or obtained from the intake feed. The City cannot modify data in viaOne® OSHA.
The OSHA recordability determination is made by the system based on OSHA recordkeeping rules and an evaluation of data provided by the Consultant colleagues regarding OSHA recordkeeping criteria.
Work status records identifying days away from work and days of restricted work activity are loaded from the JURIS® Time Tracking screens. The City cannot modify this data.
Manual Adds: This feature allows the user to manually add a case that does not exist as a workers’ compensation JURIS® claim.
OSHA 300 logs, the OSHA 300A and the OSHA 301 forms as well as BLS Surveys and DART/Incident Reports can be produced at any time.
The SIC/NAICS code, industry description, federal employer identification number, number of employees, and hours worked data for the OSHA 300A are provided by the City and can be uploaded by the City directly into viaOne® OSHA.
If City has workers’ compensation claims in ND or WY, City acknowledges that unless alternate arrangements are made with Consultant, City will manually add recordable cases for the applicable state(s) in the viaOne OSHA application and maintain responsibility for recordkeeping on those cases. Consultant will provide training to City users on how to accomplish these tasks in viaOne OSHA.
If City is insured in OH or WA, Consultant can review data for all cases reported to the BWC (Bureau of Workers Compensation, Ohio) and L&I (Washington State Department of Labor & Industries) to make OSHA recordability determinations and will enter cases in viaOne OSHA with complete data to provide OSHA 300 logs, the OSHA 300A and the OSHA 301 forms, as well as electronic reporting files.
The fees for these services are itemized in the attached Exhibit B. The charges for this service are the current fees for the services listed and may change from time to time upon sixty days’ prior written notice to City.
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20.24 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 23
MEDICARE REPORTING SERVICES SCHEDULE
To assist the City in fulfilling City’s Medicare beneficiary reporting obligations under Medicare, Medicaid and State Children’s Health Insurance Program Extension Act of 2007 (“MMSEA”) Section 111 as set forth in 42 U.S.C. §1395y(b)(7)&(8) and the CMS User Guide (“User Guide”) published on March 16, 2009 (and as amended and revised), Consultant will perform the following reporting services:
1. Consultant will electronically interface with the Centers for Medicare and Medicaid Services (“CMS”) to capture and report data in the format prescribed by the CMS Specifications.
2. Consultant will report directly to CMS on behalf of City as an Account Designee (reporting agent), as such term is defined in the CMS User Guide as amended from time to time by CMS.
3. City will be considered a Responsible Reporting Entity (“RRE”) as that term is defined in the User Guide. a. City will be responsible for maintaining a valid RRE Identification Number as described in the User Guide and is a condition precedent to Consultant preforming the duties under this section.
Failure to maintain the RRE Identification Number will result in Consultant’s inability to properly report claims on behalf of the City. Consultant assumes no responsibility for maintaining a valid RRE Identification Number on behalf of the City.
4. Consultant will assist City as follows:
a. Consultant will electronically interface with the Centers for Medicare and Medicaid Services (“CMS”) to capture and report data in the format prescribed by the User Guide. b. Consultant will report directly to CMS on behalf of the City as an Account Designee (reporting agent), and/or Account Manager as such term is defined in the User Guide. c. Consultant will prepare the required data files and submit them to CMS on a periodic basis in order to properly query and report the appropriate files as defined in the User Guide.
5. Consultant will be responsible for payment of any and all fines assessed to City regarding compliance with the Medicare beneficiary reporting requirements of Medicare, Medicaid and SCHIP Extension Act of 2007 that relate to the negligent acts or omissions of Consultant except to the extent that:
a. Such fines or penalties are the direct result of specific direction given by City and/or its agent or the actions or omissions of City and/or its agent; or
b. Consultant did not receive information or received erroneous information from City (or City’s designated agent or prior subcontractor, third party administrator, or vendor) that is essential to the performance of the duties set forth herein in a timely manner so as to be able to comply with the terms of this Agreement.
c. Furthermore, Consultant will not be responsible for any fines where Consultant properly reported a claim to CMS but it should’ve been or could’ve been reported by an entity that handled the claim before Consultant.
6. Notwithstanding anything to the contrary in the Agreement, Consultant may from time to time utilize vendors to assist in obtaining information that is necessary to comply with its responsibilities under this section.
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20.25 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 24
EXHIBIT B: Fee Schedule
SERVICE FEES
City shall pay the following fees on a life of contract basis for services provided during the term of this Agreement:
1. Annual Flat Fee Pricing:
A. City shall pay the following fees for claims received by Consultant during the period beginning January 1, 2025, and ending December 31, 2027:
Annual flat fee pricing in the amount of $278,300 based on the estimated claim volumes outlined above and the estimated required staffing to service those claims. Consultant reserves the right to modify the annual flat fee, with prior approval of the City, if acquisitions, divestitures, changes in program requirements or an increase in claim volume of greater than 10% impacts the staffing requirements of the unit.
Claims open at contract termination will either be transferred to the new administrator or handled by Consultant for an additional annual fee.
First year claim fee estimateserage line Life of contract Workers’ compensation $278,300
RMIS (annual) (4 Users Included) Included
Total estimated first year fees $278,300
B. For purposes of this Agreement, an “Indemnity Claim” shall mean any workers’ compensation Qualified Claim:
For which a payment is made or reserve is posted under the indemnity portion (i.e. not medical and not expense) of the Qualified Claim or there is time lost from work; For which an application for adjudication of a claim or hearing notice is received or otherwise involves litigation or communication from or to a petitioner’s attorney; Where incurred medical costs exceed $3,000;
That is denied;
For which the City requests to be investigated or classified as an Indemnity Claim; That Consultant determines additional investigation is necessary to determine compensability, to comply with applicable laws, or both; For which subrogation is investigated or pursued; or
That is open longer than twelve months.
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20.26 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 25
C. For purposes of this Agreement, a “Medical Only Claim” shall mean any workers’ compensation Qualified Claim which is not an Indemnity Claim or an Incident Only.
D. For purposes of this Agreement, an “Incident Only” shall mean claims reported by City that require no payment or activity other than generating a record in the data management system.
These claims carry no reserves and no contacts are made by Consultant. If contacts are required on incident only cases, additional fees will apply.
E. City acknowledges that if an Incident Only Claim is converted to another claim type, then City shall pay the difference in the per claim fee between the per claim fee already paid and the applicable per claim fee after the claim’s conversion.
F. City acknowledges that any liability claimant which files both a property damage claim and a bodily injury claim, or any combination thereof, will incur the above stated fee for administration of each claim filed by that claimant. Further, any event which creates liability claims filed by multiple claimants or multiple claims filed by the same claimant will incur the above stated fee for administration of each claim filed by each individual claimant.
G. City acknowledges that the per claim fees set forth in this section 1 are based on the assumption that City will forward to Consultant all claims arising under the Program within the applicable time period in a covered jurisdiction. In the event that City does not forward to Consultant all such claims, Consultant may in its discretion adjust the per claim fees accordingly.
2. Miscellaneous Charges:
City shall pay the following fees for services provided during the period beginning on January 1, 2025, and ending December 31, 2027:
A. via One access for 4 users is included under this contract for no additional fee. Additional RMIS/viaOne access is available for a fee of $870 per user per year. Consultant will make available, through Consultant’s proprietary claims system, claim-related data with “web-enabled” access. City will have “view only” access to the system for the term specified or as contemplated in Section 5(C) of this Agreement. City will bear responsibility for its own hardware, software, connection and similar costs for accessing the electronic claims management system.
B. $26,525 per data source converted for up to 100,000 records in the source.
C. Standard encrypted data files are available for a fee of $232 per month (or $665 per week) for each data file provided.
D. Consultant’s pricing includes the use of telephonic reporting with a Consultant standard script through Consultant’s Call Center and/or web reporting technology. Any other method of intake Docusign Envelope ID: A6BB9A85-2F97-4FDA-9B57-0B6B33146D89
20.27 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 26
(i.e. fax, e-mail, land mail, customized telephonic script, or additional services outside of standard intake scope) will incur a fee of $24 per reported incident.
E. City shall pay for storage of claim files which were closed at the time that Consultant obtained the Program. Consultant’s liability for such files shall be subject to the same limitations as contained in its written agreements with storage service providers, if any.
3. Additional bundled services and fees:
Subrogation and other recovery services (second injury funds and other special funds) will be charged 25% of recoveries
Special investigation unit (SIU) services will be charged at prevailing rates RMIS data feeds: Additional interface files are $225 per month for monthly file, $645 per month for weekly file or $1,945 per month for daily file
RMIS: System interfaces or custom programming charged at $185 per hour Loss control and ergonomic services will be charged at prevailing rates MMSEA/SCHIP Medicare reporting fee: One-time $9 charge per claim for claims involving bodily injuries (workers’ compensation, liability, no fault)
o Consultant will make reasonable efforts to obtain the relevant Medicare reporting data from the prior claim system during the implementation process. However, it is possible that closed claims will contain Medicare reporting errors that are not in compliance with Medicare rules and regulations and require additional Consultant resources to correct. There will be a charge of $15 per claim to correct these errors and the fee will be invoiced in lump sum once all errors are identified.
Escheatment services charged at $15,850 per year for claim-related payments issued from an escrow account in Consultant’s tax ID. Under this process, Consultant reports uncashed claim-related payments to the appropriate state according to each state’s unclaimed property law. Consultant offers an alternative escheatment service for free; however, City is responsible for filing unclaimed property to the states OSHA services: The foundation of our approach to OSHA-compliant record-keeping services starts with our proprietary risk management information system, JURIS®. Consultant’s OSHA Recordkeeping service allows the customer to outsource the OSHA recordkeeping process to the maximum extent possible relying on Consultant professionals whose sole responsibility is OSHA recordkeeping. The system is able to generate standard reports, such as the OSHA 300, 300A, 301 and Sharps logs, as well as other reports, such as DART and BLS surveys. Fees are $490 per user per year, $33 per incident set up in viaOne OSHA. Other optional OSHA Services available upon request include: Sharps, Case uploads, OSHA Liaison, BLS/Electronic reporting, OSHA Record Keeping Audit and other ad hoc requests.
4. Invoicing:
All one-time implementation and data conversion fees are billed upon notification of award.
All recurring fees such as claims service, program management and information technology fees are billed on actuals on a monthly basis in arrears. If a budget-based or flat fee pricing option is selected, all recurring fees are billed on a quarterly basis in advance based on annual estimates. The estimates are subject to audit thirty (30) days after the conclusion of each contract year.
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20.28 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 27
Takeover Claims (if applicable) are billed annually based on the number of takeover claims open at the beginning of each contract year or reopened during the year.
5. Care Management Fee Schedule:
All claims administration fees and services contemplate the deployment of Consultant’s managed care services for all bill review, case management services, and ancillary network services (i.e. DME, home health, diagnostics, etc.). The rates shall increase each year over the expiring rates by the greater of 3.0% or the percentage increase as reported by the U.S. Department of Labor – Bureau of Labor Statistics (http://www.bls.gov/cpi/home.htm) for the Consumer Price Index for All Urban Consumers (CPI-U) for the U.S. City Average, All Items, unadjusted, covering the prior 12 month period, published as of the month ending three months prior to the start of the each contract year.
Service Rate
Medical bill review
State fee scheduling/usual, customary and reasonable;
state reporting $8.75 per bill
Provider networks
PPO networks/out-of-network services/Enhanced
Savings 26% of savings
California statewide medical provider network (MPN)
(all California bills) $18.95 flat rate per bill
Telephonic clinical services
Telephonic case management (TCM):
Telephonic nurse case manager
Surgery nurse case manager
Evaluation and recommendation: $155
1 – 30 days: $395
Every 30 days thereafter: $315
Behavioral health specialist $110 per hour (1)
Customized nurse services (eg. assessment nurse) $110 per hour (1) Utilization review (UR) and physician advisor
UR and Pharmacy UR $130 per review
Physician advisor/peer review $285 per review
Physician review of records $285 per hour
Physician advisor appeal $360 per review
Complex pharmacy management
Pharmacy nurse management/pain coaching: $120 per
hour
Physician and PharmD management (as needed): $285
per hour
Field case management (FCM)
Medical FCM: Full field $110 per hour, plus direct expenses (1)(2) Urgent/catastrophic case management: $175 per hour (1)
Catastrophic/Crisis care management $175 per hour (1)
International medical FCM
Countries near US and US Territory (Canada, Mexico,
Puerto Rico, Bahamas, USVI): $175 per hour
All other countries: $200 per hour
FCM tasks:
- One visit clinical assessment $740 flat fee
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20.29 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 28
Service Rate
- Limited assignment task $110 per hour (1)
- Specialty task services: life care plan, expert
testimony, customized services
$175 per hour
Vocational and work placement solutions
Transitional work placement (at not-for-profit) $900 for placement or no-show Return to work (RTW) specialist $110 per hour (1)
Telephonic RTW
Workplace consultation — program/policy design and
planning $210 per hour, plus direct expenses
Vocational — full FCM $110 per hour, plus direct expenses (1)(2) Vocational field tasks:
- Vocational assessment/testing $980 flat fee
- Labor market survey $660 flat fee
- Automated transferable skills analysis $370 flat fee
- Job analysis or ergonomic evaluation $815 flat fee
Clinical consultation services
Clinical consultation
Standard (24x7x365 access to nurse): $95 per call
Premium (standard plus option of blended intake or
limited customization): $110 per call
Advanced (premium plus option to customize
workflows): $120 per call*
*Level of customization may warrant additional fees
Consultant administrative services
Lien resolution
28% of the below fee schedule savings subject to
minimum fee of $130 and cap of $7,500 per lien
Expert witness testimony or hearing representation
charged at $130 per hour plus direct expenses
Mandatory state panel postings
Electronic versions of panel cards will be provided at no additional cost. Physical panel cards will incur pass-thru costs at current printing and mailing rates to be paid by the City.
Consultant standard medical card No charge; customization starts at $3,500.
MMSEA/SCHIP Medicare reporting fee One time charge per claim at prevailing rate for claims involving bodily injuries (WC, Liability, no fault)
(1) Alaska, California, Hawaii, New York at $140 per hour; CAT at $195 per hour (2) Minnesota QRC Med/Voc at prevailing schedule rates
6. SIU Service Fees:
The charges set forth below are the current fees for the services listed, and these fees may change from time to time upon sixty days’ prior written notice to City:
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20.30 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 29
Service name Price
Research services
Social media investigation $325
Smart plus investigation $550
Comprehensive background $625
Canvassing services $250
Skip tracing/individual locate $315
Asset check $225
Criminal and civil check $135 plus cost of records
Additional counties or names: $75 (per county or name)
Records request $100 plus cost of records
Social media monitoring $25 per week of monitoring
Other research services Quote upon request
Surveillance services
Surveillance
$ 100 per hour (portal to portal): All states
Mileage charged at IRS standard mileage rate
Additional expenses to hourly rate:
Report writing (up to 1/2 hour per day at standard surveillance rates) Pre-surveillance investigation: $85 License plate searches: $20 (per search post pre-surveillance)
Vehicle Sightings Report (license plate recognition) - $75 Unmanned surveillance
$850 per day (three-day minimum)
Deployment and extraction of stationary device:
$100 per hour: All states
Mileage charged at IRS standard mileage rate
Video copies $100 per additional copy plus shipping
Field services
Alive and well check - in person $450: All states
Alive and well check - virtual interview $125
Activity check $475: All states
AOE/COE
Recorded statement
Scene investigation
Trial/deposition
$100 per hour (portal to portal): All states
Mileage charged at IRS standard mileage rate
International investigations Quote upon request
Other field services Quote upon request
Assessment services
Suspect file review $125 per hour
Fraud investigation (includes state
reporting) $125 per hour
Red flag analytics review $125 per hour
Other assessment services Quote upon request
7. Subrogation and Other Recoveries:
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20.31 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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A. Consultant shall pursue recoveries for subrogation, second injury funds, and other applicable special funds such as supplemental state funds, COLA reimbursements, retro funds, and other similar funds.
City shall pay Consultant twenty-five percent (25%) of the recovery received. All fees and expenses, including attorneys’ fees or investigations, for pursuit of any recovery shall be charged to the appropriate Qualified Claim file as an allocated loss adjustment expense.
B. As determined by the Parties, Consultant shall either:
a. Deposit the recovery funds and issue payment from Consultant’s accounts payable system to City for the net recovery (less Consultant’s fee). Consultant will deposit the net recovery check into the City’s loss-funding account or forward it directly to the City; or b. Deposit the recovery funds into the City’s loss-funding account and Consultant shall receive payment from the claim file or directly from City.
8. MMSEA/SCHIP Medicare Reporting Fee:
The charges set forth below are the current fees for the services listed, and these fees may change from time to time upon sixty days’ prior written notice to City:
One time $9 charge per claim for claims involving bodily injuries (WC, liability, no fault).
Consultant will make reasonable efforts to obtain the relevant Medicare reporting data from the City’s prior claim system during the implementation process, however, closed claims may contain Medicare reporting errors that are not in compliance with Medicare rules and regulations and may require additional Consultant resources to correct. Consultant will charge $15 per claim to correct these errors.
9. OSHA Service Fees:
Fees are $490 per user per year, $33 per incident set up in viaOne OSHA. Other optional OSHA Services available upon request include Sharps, case uploads, OSHA Liaison, BLS/electronic reporting, OSHA record keeping audit and other ad hoc requests.
The charges set forth below are the current fees for the services listed, and these fees may change from time to time upon sixty days’ prior written notice to City:
Service Rate
OSHA Recordkeeping Service:
Annual Maintenance Fee $7,350.00 per year
Case Fee $35.00 per case
Case Fee - Non-self-insured Monopolistic States (OH & WA only) $55.00 per case
User Fee (User access to viaOne OSHA - in excess of 5 users) $515.00 per user (after five) Captives/Multiple Accounts Inquire for Fee
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20.32 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 31
BLS/Electronic Reporting Per Report (after 5 reports) $100.00 per report
10. Subsequent Year Fees:
All fees shall increase 2.50% per contract year.
11. Payment Terms:
City acknowledges that all fees set forth in the Agreement are due and payable within thirty (30) days of the invoice. Any and all past due fees will incur interest at the rate of 1.5% per month, unless otherwise prohibited by law. City acknowledges that in the event Consultant undertakes collection proceedings for any outstanding fees, then City will reimburse Consultant for all costs associated with such collection action, including a reasonable attorney fee and court cost.
All recurring fees such as claims service are billed on actuals on a monthly basis in arrears.
All service fees contemplate program service commencing 01.01.2025. In the event the effective date of services is delayed at the request of City of Santa Cruz, Consultant reserves the right to bill City of Santa Cruz for program deployment expenses incurred outside of the scope of the agreed implementation period, up to and including full fees for service on the originally scheduled implementation date, with invoices payable upon receipt.
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20.33 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 32
EXHIBIT C: WORK SCHEDULE
Contract to be performed for three years ongoing and as needed based on claims.
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20.34 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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EXHIBIT D: INSURANCE REQUIREMENTS
Consultant shall procure and maintain insurance against claims for injuries to persons or damages to property and otherwise which may arise from or in connection with the performance of the work under this Agreement and the results of that work by Consultant, its agents, representatives, employees, or subcontractors.
A. CERTIFICATE REQUIREMENTS
The City will be issued a Certificate of Insurance (a Memorandum of Understanding will not be accepted) with the following minimum requirements:
Certificate(s) will show current policy number(s) and effective dates, Coverage and policy limits will meet, or exceed, requirements below, The Certificate Holder will be City of Santa Cruz, Risk Management, 1200 Pacific Ave., Suite 290, Santa Cruz, CA 95060,
Certificate will be signed by an authorized representative, An endorsement, if required below, will be provided to show the City, its officers, officials, employees, and volunteers as additional insureds, and
Coverages must be maintained during the term of the Agreement with the City, unless a longer duration is required as specified below.
B. MINIMUM SCOPE AND LIMITS OF INSURANCE
Consultant acknowledges that the insurance coverage and policy limits set forth in this section constitute the minimum amount of coverage required. If Consultant maintains broader insurance coverage than the minimums shown below, the City of Santa Cruz requires and shall be entitled to the broader insurance coverage maintained by Consultant.
Coverage will be at least as broad as:
COMMERCIAL GENERAL LIABILITY (CGL): $1,000,000 PER OCCURRENCE; $2,000,000 AGGREGATE Proof of coverage for $1 Million per occurrence and $2 Million in the aggregate including products and completed operations, property damage, bodily injury, personal and advertising injury will be provided on Insurance Services Office (ISO) Form CG 00 01 covering CGL. PROFESSIONAL LIABILITY (ERRORS AND OMISSIONS): $2,000,000 PER OCCURRENCE OR CLAIM, $2,000,000 AGGREGATE.
Consultant will maintain insurance appropriate to Consultant’s profession; with limit no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate. Insurance must be maintained, and evidence of insurance must be provided for at least five (5) years after date of completion of the services under this Agreement. If coverage is canceled or non-renewed and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date or start of work date, Consultant must purchase “extended reporting” coverage for a minimum of five(5) years after completion of the contract of work.
AUTOMOBILE LIABILITY:
Proof of coverage for $1,000,000 provided on ISO Form Number CA 00 01 covering any auto (Code 1), or if Consultant has no owned autos, hired, (Code 8) and non-owned autos (Code 9), per accident for bodily injury and property damage.
WORKERS’ COMPENSATION AS REQUIRED BY THE STATE OF CALIFORNIA, WITH STATUTORY LIMITS, AND EMPLOYER’S LIABILITY INSURANCE: $1,000,000 per accident for bodily injury or disease.
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20.35 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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The Worker’s Compensation policy must be endorsed with a waiver of subrogation in favor of the City for all work performed by the Consultant and its employees. (Not required if Consultant provides written verification it has no employees) - If Consultant has no employees, Consultant shall complete and sign a Workers’ Compensation Exemption Declaration and Release of Liability.
For Data Security and Privacy Liability
1. Consultant shall maintain one or more insurance policies - Privacy, Technology and Data Security Liability, Cyber Liability, and/or Technology Professional Liability Insurance coverage in the amount of $5,000,000 per occurrence and/or claim, $5,000,000 aggregate. Coverage shall be sufficiently broad to respond to the duties and obligations undertaken by Consultant in this contract.
2. The policy(ies) shall include coverage for claims involving security breach, system failure, data recovery, business interruption, cyber extortion, social engineering, infringement of intellectual property, including but not limited to infringement of copyright, trademark, trade dress, invasion of privacy violations, information theft, damage to or destruction of electronic information, release of private information, and alteration of electronic information.
3. The policy(ies) shall provide coverage for breach response costs as well as non-punitive regulatory fines and penalties as well as credit monitoring expenses with limits sufficient to respond to these obligations.
4. The policy(ies) shall include, or be endorsed to include, property damage liability coverage for damage to, alteration of, loss of, or destruction of electronic data and/or information “property” of the City in the care, custody, or control of the Consultant.
C. OTHER INSURANCE PROVISIONS
The insurance policies are to comply with the following provisions:
.
ADDITIONAL INSURED STATUS
The City, its officers, officials, employees, agents, 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 Consultant including materials, parts, or equipment furnished in connection with such work or operations, products and completed operations. General liability coverage will be provided in the form of an endorsement to Consultant’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).
o PRIMARY COVERAGE
For any claims related to this Agreement, Consultant’s and all subcontractor’s insurance coverage will be primary and non contributory as respects the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents, or volunteers will be excess of Consultant’s and all subcontractor’s insurance and will not contribute with it.
NOTICE OF CANCELLATION
Each insurance policy required above shall state that the coverage shall not be canceled, except with notice to the Consultant. Consultant will notify City.
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20.36 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
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WAIVER OF SUBROGATION
Consultant hereby grants to the City a waiver of any right to subrogation, except as otherwise not applicable, which any insurer of said Consultant may acquire against the City by virtue of the payment of any loss, including attorney’s fees under such insurance. Consultant agrees to obtain any endorsement that may be necessary to effectuate this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer. EXCESS LIABILITY/UMBRELLA INSURANCE POLICIES
Consultant may use excess liability/umbrella policies to meet the required liability limits on the condition that they provide all of the insurance coverages required herein, including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The excess liability/umbrella insurance policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying CGL 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 Consultant’s primary and excess liability policies are exhausted. DURATION OF COVERAGE
CGL & Excess Liability/Umbrella policies for any construction related work, including, but not limited to, maintenance, service, or repair work, shall continue coverage for a minimum of 3 years for Completed Operations liability coverage. Such Insurance must be maintained, and evidence of insurance must be provided, for at least five (5) years after completion of the contract of work. SELF-INSURED RETENTIONS (SIR)
Self-insured retentions must be declared to and approved by the City. City may require Consultant to purchase coverage with a lower retention or provide proof of ability to pay losses and related expenses.
The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City.
ACCEPTABILITY OF INSURERS
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A-: VII, unless otherwise acceptable to the City.
CLAIMS MADE POLICIES
If any of the required policies provide coverage on a claims-made basis:
1. The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work.
2. Insurance must be maintained, and evidence of insurance must be provided, for at least five (5) years after completion of the contract of work.
3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of contract work. VERIFICATION OF COVERAGE
Consultant will furnish the City with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy (and CPL, automobile and any Excess Liability/Umbrella policies, as applicable) listing all policy endorsements to be approved by the City before work commences. However, failure to obtain the required documents prior to the work beginning will not waive the Consultant’s obligation to provide them. The City reserves the right to Docusign Envelope ID: A6BB9A85-2F97-4FDA-9B57-0B6B33146D89
20.37 City of Santa Cruz Professional Services Agreement for Administration of Claims Program 35634
December 2024 (Form Rev.01/24 ) Page 36
require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.
D. SUBCONTRACTORS
Consultant shall include their subcontractor(s) as additional insured(s) under the policies or shall furnish separate certificates and endorsements for each contractor and subcontractor. Consultant shall require and verify that all contractors and subcontractors maintain insurance meeting all the requirements stated herein , and Consultant shall ensure that City, its officers, officials, employees, agents, and volunteers are named as additional insureds on insurance required from its contractor(s) and subcontractor(s).
E. SPECIAL RISKS/CIRCUMSTANCES
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances and provide notice to Consultant.
Docusign Envelope ID: A6BB9A85-2F97-4FDA-9B57-0B6B33146D89
20.38 Three – Year Contract Pricing
20.39 City Council
AGENDA REPORT
DATE: 04/03/2025
AGENDA OF: 04/22/2025
DEPARTMENT: Police/Public Works
SUBJECT: Authorize the Purchase of Three Replacement Ford Explorer Police Interceptor Vehicles with Police Public Safety Impact Fee Funds (PD/PW) LOCATION: Citywide
RECOMMENDATION: Motion to:
1) Adopt a resolution amending the FY 2025 General Fund budget to purchase three Police patrol vehicles from the Public Safety Impact Fee Fund in the amount of $183,428.58; and 2) Direct staff to proceed with the purchase through a cooperative purchasing agreement with the National Auto Fleet Group (Watsonville Ford, Watsonville, CA).
BACKGROUND: On April 27, 2021, the City Council adopted the Public Safety Impact Fee (PSIF) Ordinance No. 2021-11 Public Safety Impact Fees as defined in the Santa Cruz Municipal Code, Chapter 18.49. The ordinance permits fees to be collected on building permits for new development to maintain acceptable levels of police and fire services by paying its fair share for the cost of public safety facilities with a life of five years or longer (i.e., buildings, vehicles, equipment, etc.) necessitated by the burdens of new development within the City of Santa Cruz (City).
The Santa Cruz Police Department (SCPD) requires specialized patrol vehicles to respond to calls for service, conduct traffic enforcement, transport individuals, and act as mobile workstations for officers. The SCPD’s Ford Explorer patrol vehicles are customized with reinforced safety equipment, lighting, advanced communication systems and technology, and interior storage and seating to support officers in daily patrol operations.
City Administrative Procedure Order (APO) section I, #52 – Use of City Vehicles – outlines the minimum fleet replacement criteria. When threshold criteria are met, a vehicle can be reviewed as a possible candidate for replacement. For police patrol vehicles, the minimum threshold criteria are five (5) years (industry standard lifecycle) and/or 100,000 miles.
SCPD currently operates 25 Ford Explorer Police Interceptor patrol-use vehicles. Of the 25 vehicles used in daily patrol operations, nine of the vehicles range between 9-11 years old with mileage exceeding 100,000 miles.
21.1 DISCUSSION: Three Police Ford Explorer Interceptors have been identified for replacement in Fiscal Year (FY) 2025 (Vehicle #119-2015, #156-2016, #163-2015) and were selected based on age, mileage, and high maintenance costs. So far, in FY 2025, the three identified vehicles have incurred nearly $15,000 in repair and maintenance costs and required 43 hours of City Fleet staff labor. Each vehicle has surpassed 100,000 miles, increasing the likelihood of significant mechanical issues such as water pump malfunctions, timing chain wear, phaser issues, and transmission failures. The continued use of these aging vehicles poses a risk of service disruptions to essential police patrol operations.
The purchase of new replacement vehicles will enhance reliability and reduce maintenance costs.
Additionally, the new replacement patrol vehicles incorporate advanced safety features, including an eco-boost V6 engine and ballistic door panels. Upon receiving the replacement vehicles, the three identified vehicles will be retired from the City fleet and auctioned per City APO I-52. All auction revenue will be returned to the City’s General Fund.
Section 3.08.170 of the Municipal Ordinance allows the City to buy from cooperative purchasing agreements when it is in the City’s best interest to do so. Cooperative purchasing is a form of purchasing that leverages the buying power of multiple government agencies to get the best pricing and favorable contract terms and conditions. Hundreds of contracts are available to use that offer competitively priced contracts for almost every good or service the City buys.
A cooperative purchase agreement through Sourcewell (contract # 091521-NAF) will be utilized to secure competitive pricing on three new 2025 Ford Explorer Interceptors through the National Fleet Auto Group in Watsonville. The contracted amount for each vehicle is $61,142.86. The total cost to purchase all three vehicles will total $183,428.58.
As of February 25, 2025, Fund 215 Police Public Safety Impact Fee has a balance of $257,258.64 and will cover 100 percent of the purchase of three replacement police patrol vehicles.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION: The proposed replacement of patrol vehicles for the SCPD is not a “Project” under CEQA. CEQA applies to activities that may result in direct or reasonably foreseeable indirect physical changes to the environment. Under CEQA Guidelines §15061(b)(3) (Common-Sense Exemption), if an activity has no potential for environmental impact, it is not subject to CEQA review.
Additionally, CEQA Guidelines §15301 applies to the operation, maintenance, and minor alteration of existing public facilities and equipment with no expansion of use, making routine vehicle replacements exempt. Furthermore, CEQA Guidelines §15302 covers the replacement or reconstruction of existing facilities where the new equipment serves the same purpose and capacity.
HEALTH IN ALL POLICIES (HiAP): The purchase of patrol vehicles for the SCPD using public safety impact fee funds supports the City’s HiAP pillar of public health through dedicated City funding towards sustaining essential police vehicles to adequately serve existing and new residents, City employees, and visitors.
21.2 FISCAL IMPACT:
1. The recommendation in this report impacts the General Fund: No
2. This recommendation requires a budget adjustment: Yes
3. The recommendation creates an on-going expenditure commitment: No FISCAL IMPACT DESCRIPTION: The three police patrol vehicles will be purchased out of the General Fund with funding of $183,428.58 transferred in from the Police Public Safety Impact Fee 215 Fund. The net fiscal impact to the General Fund is zero.
Prepared By:
Catherine Brothers
Principal Management
Analyst
Submitted By:
Bernie Escalante
Chief of Police
Nathan Nguyen
Director of Public Works
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. BUDGET ADJUSTMENT.PDF
2. NATIONAL AUTO FLEET GROUP VEHICLE QUOTE.PDF
21.3 City of Santa Cruz
BUDGET ADJUSTMENT REQUEST
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02/24/2025
Transfer $183,429 from Fund 215 Police Public Safety Impact Fees to the Police Department's General Fund for the purchase of three (3) 2025 Ford Explorer Interceptor patrol vehicles.
101-00-00-000-49181 P202402-964-0-0 Police Public Safety Impact Fee 183,429 183,429
215-00-00-0000-59101 To General Fund 183,429
101-20-22-2103-57402 p202402-100-2020-0 Vehicle Equipment 183,429 366,857
-183,429
Catherine
Brothers
Digitally signed by
Catherine Brothers
Date: 2025.03.26
16:52:10 -07'00'
Bernie
Escalante
Digitally signed by
Bernie Escalante
Date: 2025.03.27
10:02:11 -07'00'
Emily
Burton
Digitally signed
by Emily Burton
Date: 2025.04.04
09:45:44 -07'00'
Elizabet
h Cabell
Digitally signed by
Elizabeth Cabell
Date: 2025.04.04
10:24:18 -07'00' 21.4
21.5 21.6
City Council
AGENDA REPORT
DATE: 04/03/2025
AGENDA OF: 04/22/2025
DEPARTMENT: Parks and Recreation
SUBJECT: Santa Cruz Wharf Interim Repairs and Recovery (PR) LOCATION: District 4
RECOMMENDATION: Motion to:
1) Approve Council ad-hoc subcommittee’s recommended alternative #5 to perform near-term Wharf restoration, and award a contract to Moffat and Nichol Engineering in an amount not to exceed $100,000 Moffat and Nichol to develop plans and specifications; 2) Direct staff to move forward with solicitation of bids to implement near term Wharf restoration consistent with alternative #5 which would restore the damaged end of the Wharf to bent 171;
3) If sufficient funding from CalOES continues to be confirmed, authorize the City Manager to award bid to lowest responsive and responsible bidder and execute contract for Wharf restoration construction in a form approved by the City Attorney;
4) Authorize the Parks and Recreation Director to execute change orders within the approved project budget; and
5) Approve of the CEQA determination contained in this agenda report, including the application of the following statutory and categorical exemptions: Public Resources Code Section 21080, subd. (b)(2) relating to emergency repairs to public service facilities necessary to maintain service; CEQA Guidelines Section 15301 (Existing Facilities); Section 15302 (Replacement or Reconstruction); and Section 15303 (New Construction or Conversion of New Structures).
BACKGROUND: On December 23, 2024, approximately 180 ft. at the southernmost end of the Santa Cruz Municipal Wharf collapsed into the ocean following a historic wave event. The collapsed section was previously the site of the Dolphin Restaurant and one of three public restroom facilities on the Wharf, which had been damaged in the Winter 2023-24 storms and was under construction for repairs at the time of the collapse. Following the collapse, the City responded swiftly to assess the structural integrity of the Wharf, coordinated with federal, state, and local partners, cleared debris from the collapse, and initiated recovery planning for the future. Unfortunately, forced closure of the Wharf through the holidays also heavily impacted
22.1 wharf businesses and employees, as well as restricted public access for visitors. The City reopened the Wharf to the public on January 4.
In February 2025, the City Council formed an ad hoc sub-committee to work with staff on a near-term proposal to address the damaged end of the Wharf. The mission of the sub-committee is to review data and options and make recommendations to the full City Council on Wharf recovery and resiliency. The sub-committee membership includes Vice Mayor KalantariJohnson, Councilmember Newsome, and Councilmember Golder. The scope of the subcommittee includes making recommendations to the full City Council for near-term repairs for the damaged end of the Wharf. The sub-committee met twice in March 2025 with City staff from Parks and Recreation, Economic Development and Housing, Fire Department, Public Works, and the City Manager’s Office.
The Wharf is over 110 years old and requires regular maintenance and repair to ensure its safety.
This work is performed by a dedicated team of 15 full-time staff as well as multiple temporary and seasonal staff who maintain the structure and perform maintenance at Main and Cowell Beaches, including beach area public restrooms and the San Lorenzo River mouth lagoon. The Wharf is one of the longest pile-supported timber structures in the western hemisphere and, due to the on-going maintenance by Wharf staff, it continues to be in serviceable and sound condition.
Future planning for the Wharf structure is guided by the adopted Wharf Master Plan (Plan). The Plan, which was approved by City Council in January 2024, includes design concepts, structural reinforcement, public access and recreation enhancements, and enhanced opportunities for economic resilience. The Plan also considers the future effects of climate change, including stronger storms, coastal erosion, and up to 68 inches of sea level rise; to which the Plan responds with strategies for the long-term sustainability of the structure. More detailed information on the Wharf, sea level rise, and future planning considerations are outlined in Sea-Level Rise Assessment – Santa Cruz Municipal Wharf (attached). The full Wharf Master Plan and Engineering Report (bit.ly/4iU6Raz) is available on the City’s website.
In response to the immediate need for restoration of the damaged section of the Wharf, the City Council ad hoc sub-committee reviewed several alternatives and considered how each fit into implementation of the Wharf Master Plan and, specifically, how the near-term repairs may influence or restrict long-term options and opportunities for the end of the Wharf.
DISCUSSION: The ad hoc sub-committee reviewed five (5) alternatives to address the damaged end of the Wharf in the near-term (see Wharf End Repair Alternates). The sub-committee considered several factors including near-term costs and financial viability, structural integrity and resiliency, consistency with the Wharf Master Plan, and options that would allow for future visioning and potential reconstruction of the collapsed end of the Wharf.
After thorough review and discussion, the ad hoc sub-committee recommends alternative #5, which would restore the damaged end of the Wharf to bent 171 (see Wharf End Repair Alternates, p. 5) as a near-term measure needed to repair the Wharf. This alternative also allows for future visioning toward Wharf Master Plan implementation or opportunities to rebuild the end of the Wharf to its pre-collapse condition, if desired by the community and City Council.
Alternative #5 would also allow for one sea lion viewing hole to be reconstructed in the nearterm. Community outreach and decision making related to the long-term vision and strategy for
22.2 the Wharf will be discussed in more detail in the coming months with additional input from the Council ad hoc sub-committee. Ultimately, the choice of whether to or how to rebuild forward from Alternative #5 will be driven by community desire and the availability of future funding.
The estimated cost to implement Alternative #5 is approximately $870,000 plus project support costs, including permitting, plans, specifications, and engineering support, bringing the total estimated project cost to around $1,000,000. On February 14, 2025, and in accordance with the California Disaster Assistance Act (CDAA), a Governor's Proclamation was issued to secure funding to help Santa Cruz County respond to and recover from the December 2024 Coastal Storm (CDAA-2025-03). Staff applied for CDAA assistance in March and are awaiting further direction and follow-up from California Office of Emergency Services (CalOES).
The primary goal of staff and the ad hoc sub-committee is to design and implement the repair project ahead of the 2025-26 winter season to avoid any further deterioration of the damaged section of the Wharf. To that end, efficiency in the City’s internal processes will be critical. The Parks and Recreation Department currently has most of the necessary building materials on hand, including decking, ledgers, stringers, and pilings, which will be used for structural repairs.
Engineering design will determine whether additional materials or timber pilings are needed, and this will influence the timing of project. City staff will also work with the California Coastal Commission to ensure that construction can take place under the City’s Wharf Maintenance Plan or emergency coastal development permit and other regulatory permits; all in a manner that balances environmental considerations with project implementation.
If Alternative #5 is approved by the City Council, the estimated timeline for completion is as follows (note: this timeline is speculative and may vary depending on a range of factors including supply chain, design and bidding process, permitting requirements, and/or weather conditions):
• Engineering plans and specs for bidding: Complete by July 1, 2025 • Bids Received: September 16, 2025 (30-day bid period). • Notice of Intent to Award Bid: September 24, 2025.
• Contract Award: October 1, 2025.
• Notice to Proceed: October 20, 2025.
• Contractor mobilization complete, ready to start construction: November 15, 2025. • Substantial Completion: March 15, 2026
In the event the City and its contractors are unable to initiate construction ahead of the 2025/26 winter season and end up in construction during less-than-favorable conditions, staff may need to delay commencing construction until spring 2026 to avoid the risks and hazards associated with winter construction. The goal is to facilitate an efficient process in 2025 to allow for construction to begin and end prior to spring of 2026.
The recommendation of the City Council ad hoc sub-committee and City staff is to approve Alternative #5. The ad hoc sub-committee will return to the City Council to provide more information and recommendations in the coming months related to broader implementation of the Wharf Master Plan, community outreach efforts for longer-term planning and implementation, and Wharf operational and policy items.
22.3 CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:
CEQA provides several statutory and “categorical exemptions” which are applicable to categories of projects and activities that the Lead Agency has determined generally do not pose a risk of significant impacts on the environment. The project consists of repairs of the damaged end of the Santa Cruz Municipal Wharf. The project is exempt from CEQA under Public Resources Code Section 21080, subd. (b)(2) relating to emergency repairs to public service facilities necessary to maintain service. CEQA Guidelines Section 15301, Existing Facilities (Class 1 Exemption); Section 15302, Replacement or Reconstruction (Class 2 Exemption); and Section 15303, New Construction or Conversion of New Structures (Class 3 Exemption). The project involves the repair, maintenance, and minor alteration of an existing facility and consists of replacement and reconstruction of existing structures where the new ones will be located on the same site with the same purpose and no expansion of use. None of the exceptions to exemptions listed in CEQA Guidelines Section 15300.2 apply.
HEALTH IN ALL POLICIES (HiAP): The Santa Cruz Wharf is the longest timber Wharf in the western hemisphere and is a historic asset in the City of Santa Cruz. The Wharf is overseen and managed by the Parks and Recreation Department in close coordination with Public Works, Fire, and Economic Development and Housing. Together, the City not only maintains the Wharf but also activates it through numerous annual events and activities ranging from Woodies on the Wharf to the Tuesday Night Live summer concert series and much more. Beyond these events, the Wharf provides unique recreation opportunities and public access to experience the Monterey Bay National Marine Sanctuary and is home to roughly 20 local businesses. The Parks and Recreation Department’s mission is to “provide quality public spaces and experiences that build a healthy community, foster equity, and better the environment.” Through the implementation of this mission, the Parks and Recreation Department seeks to advance the core pillars of HiAP – health, equity, and sustainability.
FISCAL IMPACT:
1. The recommendation in this report impacts the General Fund: No
2. This recommendation requires a budget adjustment: No
3. The recommendation creates an on-going expenditure commitment: No FISCAL IMPACT DESCRIPTION: The emergency project, e302501- Wharf Repair Project 2025, was created in the Disaster Cost Recovery Fund, Fund 170, and is being used to track expenses and secure disaster reimbursement.
This project has been budgeted to date as follows:
RevenuesInsurance Proceeds: $1,000,000.00
ExpendituresMiscellaneous supplies and services- $1,019,812 An application to receive California Disaster Assistance Act (CDAA) funds has been submitted to receive reimbursement for the losses incurred by the City for the Wharf damage. After receiving the alternative approved by City Council, staff will return in a future meeting with a recommendation for amending the FY 2025 budget that presents and funds the remaining project costs.
22.4 Prepared and Submitted By:
Tony Elliot
Director of Parks and
Recreation
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. SEA-LEVEL RISE ASSESSMENT - SANTA CRUZ MUNICIPAL WHARF.PDF
2. SANTA CRUZ WHARF CONCEPT END ALTS WITH ROM COSTS.PDF
3. WHARF RECOVERY ALTERNATIVES.PDF
22.5 AB 691 Sea-Level Rise Assessment
City of Santa Cruz Tide and Submerged Lands 1969 Grant
Santa Cruz Municipal Wharf
(Revised & Resubmitted July 17, 2018; ADA Compliant Submitted July 8, 2019)
22.6 1
TABLE OF CONTENTS
STATE GRANT TIDE AND SUBMERGED LANDS
DESCRIPTION ....................................................................2
1. ASSESSMENT OF IMPACTS OF SEA LEVEL RISE (SLR)..3
A. INVENTORY OF VULNERABLE NATURAL AND BUILT “MANMADE” RESOURCES AND FACILITIES6 B. CONSIDER IMPACTS OF STORMS AND EXTREME EVENTS ............................................................6 C. CONSIDER CHANGING SHORELINES ............................................................................................10 D. CONSIDER TRENDS IN RELATIVE LOCAL SEA LEVEL...................................................................12 E. CONSIDER IMPACTS TO THE PUBLIC TRUST RESOURCES AND VALUES, INCLUDING BUT NOT LIMITED TO PUBLIC ACCESS, COMMERCE, RECREATION, COASTAL HABITATS AND NAVIGABILITY .. ........................................................................................................................................................16 F. PRIORITIZE VULNERABILITIES TO BE ADDRESSED.....................................................................23 G. CONSIDER IMPACTS AND RECOMMENDATIONS DESCRIBED IN THE CURRENT VERSION OF THE OCEAN PROTECTION COUNCIL’S (OPC) SEA-LEVEL RISE GUIDANCE DOCUMENT ..............28
2. MAPS OF 2030, 2060 AND 2100 IMPACTS .................32
3. ESTIMATE OF FINANCIAL COSTS OF SEA-LEVEL RISE33
A. REPLACEMENT OR REPAIR COSTS OF RESOURCES AND FACILITIES THAT COULD BE IMPACTED BY SEA-LEVEL RISE AND CLIMATE CHANGE PROCESSES .................................................33 B. NON-MARKET VALUES INCLUDING RECREATION AND ECOSYSTEM SERVICES OF PUBLIC
TRUST RESOURCES THAT COULD BE IMPACTED BY CLIMATE CHANGE AND SEA-LEVEL RISE PROCESSES............................................................................................................................................34 C. CONSIDER COSTS OF 2030, 2060 & 2100 SEA LEVEL RISE PROJECTIONS WITH 100 YEAR STORM....................................................................................................................................................36 D. INCLUDE ANTICIPATED COSTS OF ADAPTION/MITIGATION MEASURES AND POTENTIAL BENEFITS OF SUCH STRATEGIES AND STRUCTURE............................................................................39
4. DESCRIPTION OF HOW TRUSTEE PROPOSES TO
PROJECT AND PRESERVE RESOURCES AND STRUCTURES
THAT WOULD BE IMPACTED BY THE SEA-LEVEL RISE ......41
A. DESCRIBE PROPOSED MITIGATION/ADAPTION MEASURES, AND HOW VULNERABILITIES WILL BE ADDRESSED ......................................................................................................................................43 B. DESCRIBE THE TIMEFRAME FOR IMPLEMENTATION OF SUCH MEASURES ................................44 C. DESCRIBE PLANS TO MONITOR IMPACTS OF SEA-LEVEL RISE AND CLIMATE CHANGES, AS WELL AS EFFECTIVENESS OF MITIGATION AND ADAPTION MEASURES ............................................46 D. DESCRIBE ANY REGIONAL PARTNERSHIPS THE TRUSTEE IS PART TO OR INTENDING TO FORM
THAT WOULD ADDRESS SEA-LEVEL AND CLIMATE CHANGE VULNERABILITY OR INCREASE RESILIENCY.............................................................................................................................................47
22.7 2
AB 691 Sea-Level Rise Assessment
City of Santa Cruz Tide and Submerged Lands 1969 Grant
Santa Cruz Municipal Wharf
(Revised & Resubmitted July 17, 2018; ADA Compliant Submitted July 8, 2019) State Grant Tide and Submerged Lands Description
In 1969 the State of California granted the City of Santa Cruz the Submerged and Tide lands on the landward side of a line connecting Lighthouse Point on the west to the tip of the Santa Cruz Harbor Jetty on the east. The only physical structure in the grant submerged and tide lands area (State Grant Area) is the Santa Cruz Municipal Wharf; there are no other structures or improvements within this area. The total area of the State Grant Area is approximately 411 acres of which 26 acres are beaches (tide lands) and 385 acres are seabed (submerged) areas. Figure 1 depicts the boundaries of this area.
Figure 1: California State Lands Comission Boundary
22.8 3
1. Assessment of Impacts of Sea Level Rise (SLR)
The scientific community has reached a strong consensus that the climate is changing, and new scientific evidence has highlighted the potential for extreme sea-level rise (SLR) as a result of a changing climate. Climate change impacts include threats not only to our infrastructure but to our health, safety and to the economic vitality of our community. Climate scientists agree that there are only three approaches to addressing the impacts of climate change: retreat, resist or ignore. There are different costs associated with each of these paths. Thus, incorporating climate resilience planning into all that we do as a city allows us to address some of these difficult decisions in advance and take advantage of potential opportunities to protect our residents, infrastructure and economic well-being. This document is intended to identify and characterize the impacts of SLR in the State Grant Area, and to provide resources, information, and strategies for adaptation.
Surrounded by a greenbelt of open space areas and the Pacific Ocean, Santa Cruz is a compact, vibrant beach community that preserves the diversity and quality of its natural and built environments, creates a satisfying quality of life for its residents and attracts visitors from around the world. Its unique geography, from exposed Pacific Ocean cliffs to sheltered Monterey Bay beaches and a coastal river running through its downtown and touristserving areas, is a part of its appeal, yet these features also increase its vulnerability to the impacts of SLR. Every aspect of the city — its economic prosperity, social and cultural diversity, scenic beauty and historical character — is threatened by potential impacts of SLR.
In 2011, FEMA grant funding was used to contract Dr. Gary Griggs, Director of the Institute of Marine Sciences, and Dr. Brent Haddad, Professor of Environmental Studies and Director of the UCSC Center for Integrated Water Research, to co-author the first Climate Adaptation Vulnerability Study. That study, City of Santa Cruz Climate Change Vulnerability Assessment1, identified SLR as a significant climate change impact for which the community should prepare. According to the document:
“Sea level rise is probably the process that has generated some of the most obvious and visible effects in Santa Cruz historically and that will continue to produce some of the most significant impacts on the city in the decades ahead. A continuing rise in sea level will produce a range of hazards or impacts including inundation of low-lying areas, erosion of coastal cliffs, and intrusion into the lower San Lorenzo River 1 Griggs, Gary and Haddad, Brent. City of Santa Cruz Climate Change Vulnerability Assessment. 11 January 2011.
22.9 4
accompanied by lateral infiltration of water beneath the downtown area.2”
The 2011 study was referenced and included as an appendix in the City’s first Climate Adaptation Plan, adopted in 2012. In 2017, during the City’s update to the Climate Adaptation Plan (currently in draft format), the Central Coast Wetlands Group (CCWG) was contracted to conduct the City’s first SLR Vulnerability Analysis. CCWG’s three key objectives were intended to further City planning for the likely impacts associated with SLR by:
1. Identifying critical coastal infrastructure (municipal, residential and commercial) vulnerable to SLR and estimating when those risks may occur;
2. Identifying specific hazards (coastal flooding, SLR, erosion) that pose risks to various infrastructure and the value of potential infrastructure and property loss; and
3. Defining appropriate strategies for these risks.
The SLR Vulnerability Analysis is integrated into and included in the City of Santa Cruz Draft Climate Adaptation Plan Update 2017-2022 (CAP Update)3 that is currently being prepared for finalization and adoption in September, 2018. Minimizing the impacts of future SLR is part of the City’s Climate Adaptation Goals as well as the General Plan Goals related to climate adaptation. Although the projected magnitude of total damage has not been quantified for any of the planning horizons (current, 2030, 2060 and 2100), this document does identify and put a value to the current (2018) property and infrastructure exposed to climate hazards. A summary of the overall projected impacts is included below for reference and is not specific to the State Grant Area boundary.
2030 Planning Horizon (or 4 inches of SLR). For the 2030 planning horizon, according to the CAP Update, cumulative risks of coastal climate change on City of Santa Cruz public and private infrastructure are projected to be significant. In sum, the City projects that:
• Most of West Cliff and East Cliff are protected by sea walls and rip rap, mitigating much of predicted erosion hazards.
• New sea walls may need to be constructed for portions of West Cliff and East Cliff where no structures currently exist, if maintaining the same level of service (auto, bike and pedestrian) along the coast is a priority.
2 Griggs, Gary and Haddad, Brent. City of Santa Cruz Climate Change Vulnerability Assessment. 11 January 2011.
3 City of Santa Cruz. Draft Climate Adaptation Plan Update. 2017-2022.
22.10 5
• Storm flooding is predicted in the socially vulnerable Beach Flats area due to waves overtopping the coastal infrastructure on Beach Road, but impacts are assumed to be managed by current storm water pumps along the San Lorenzo River levee.
• Acreage and tidal duration of availability of City beaches is projected to decrease.
2060 Planning Horizon (or 28 inches of SLR). For the 2060 Planning Horizon it was assumed that coastal armoring and water control structures will no longer function as designed without upgrades or replacement. Under this assumption, many buildings are projected to be vulnerable to climate hazards and erosion if maintenance and management of existing protective structures is not maintained. More buildings would be vulnerable if existing levees and storm pump infrastructure also failed to function. Furthermore, roadways as well as water, wastewater and storm drain pipes are projected to become vulnerable as well. Finally, several coastal access locations are projected to be at risk.
2100 Planning Horizon (or 68-inches of SLR). While 2100 is a distant time horizon, as noted in Rising Seas in California, an update on sea-level rise science4 it is increasingly important to plan for long range sea level rise (SLR); “consideration of high and even extreme sea levels in decisions with implications past 2050 is needed to safeguard the people and resources of coastal California”(Griggs et al., 2017). For the 2100 Planning Horizon (or 68-inches of sea-level rise), there will be an even greater impact on buildings, roadways, water, wastewater and storm drain pipes, and larger portions of all other land uses. Furthermore, more coastal access locations are projected to be lost, and sensitive habitat will be at greater risk.
The SLR vulnerability assessment confirms that coastal erosion along West Cliff and East Cliff will be a continuing challenge for the City of Santa Cruz.
Much of the most vulnerable coastal infrastructure is owned and operated by the City. Establishing sound coastal adaptation and protection policies early will likely best enable the long-term implementation of these policies and ensure long term sustainability for the community. The economic exposure of current residential, commercial and municipal buildings and infrastructure are contained in Section 3a (replacement or repair costs of resources and facilities that could be impacted by SLR) below.
While sea levels are modeled to reach specific levels in the following three time horizons evaluated (2030, 2060 and 2100), these time horizons serve to create an envelope of impacts and will be used as general guidelines for 4 Griggs et al. Rising Seas in California, an update on sea-level rise science.
California Ocean Science Trust, April 2017.
22.11 6
planning purposes. As SLR rates continue to increase and models become more robust, SLR will be periodically monitored, and observed and projected changes will be incorporated into future updates to the City of Santa Cruz Climate Adaptation Plan.
a. Inventory of vulnerable natural and built “manmade” resources and facilities
The only manmade facility in the State Grant Area is the Santa Cruz Municipal Wharf. The Santa Cruz Wharf was constructed in 1914, and is 2,750 ft. long (its original length). The Wharf structure is of timber construction, with 183 bents (rows) of vertical timber piles, supported by 4,450 piles. There is one coastal access point and 19 businesses currently operating in the Wharf’s various buildings. A complete description of this facility is contained the Santa Cruz Wharf Engineering Report, 2014.5 In terms of natural resources, aside from the submerged seabed, there are two natural features that are partially included in the State Grant Area:
beaches and bluff/cliff topography. The State Lands Commission boundary follows the mean tide line along the beach and thus the majority of the unsubmerged Seabright, Main and Cowell Beaches are excluded from the State Grant Area. Similarly, the State Lands Commission boundary extends to and follows a portion of West Cliff Drive’s adjacent cliffline, including some seawalls. These features are exposed and vulnerable to the combined impacts of sea level rise, including: rising tide, coastal storm flooding, and erosion. Further information on these resources and facilities is detailed in the following sections of this report.
b. Consider impacts of storms and extreme events
Flooding and extreme storms are predicted to occur more frequently and with greater intensity as a result of climate change and can combine synergistically with SLR, which in turn will exacerbate coastal storm events, cliff erosion and flooding. According to the City of Santa Cruz Local Hazard Mitigation Plan Five Year Update 2017-2022 (LHMP)6, flooding along the coast of Santa Cruz may occur with the simultaneous occurrence of large waves and storm swells during the winter. Storm centers from the southwest produce the type of storm pattern most commonly responsible for the majority of serious coastline flooding. The strong winds combined with high tides that create storm surges are also accompanied by heavy rains. When storms occur simultaneously with high tides, and rising sea levels, flood conditions are exacerbated. This combination has the potential for structural 5 Moffatt & Nichol. Santa Cruz Wharf Engineering Report. Prepared for the City of Santa Cruz. 8 October 2014.
6 City of Santa Cruz. Local Hazard Mitigation PlanFive Year Update 2017- 2022. 2017.
22.12 7
and financial losses in the State Grant Area, particularly with respect to the Municipal Wharf. Additionally, according to the CAP Update:
“An increase in the intensity and amount of rainfall over short time periods can concentrate runoff and lead to more frequent or larger flood flows. Extreme coastal storms can create storm surge that increases tidal elevations and coastal flooding. Intense storms are also associated with high winds, and lead to soil saturation that exacerbates flooding, erosion, and tree fall.”
Figure 2 depicts the coastal storm flood hazard zones (i.e., 100 year storm) for the 2010 baseline year as well as for the 2030, 2060 and 2100 planning horizons. It is important to note that the impact of river storm flows was not analyzed in the City’s SLR assessment, thus impacts are likely underestimated; however, analyzing, integrating, and mapping climateinfluenced hydrology is currently underway.
Figure 2: Coastal Storm Flood Hazard Zones (hazard zones include areas that are currently managed by pumps or protected by levees) For the baseline year of 2010, along the entire coast (i.e., not exclusive to the State Grant Area), it is estimated that several existing buildings as well as existing roadways, power, sanitary sewer, storm pipes and water mains are vulnerable to the combined hazards of SLR, storms and extreme events.
22.13 8
Additionally, existing wetlands, habitat, coastal trails, access points and beaches are vulnerable to the combined effects of SLR. Projected impacts over the three future time horizons include the following:
2030 Planning Horizon (or 4 inches of SLR). For the 2030 Planning Horizon, storm flooding is predicted in the socially vulnerable Beach Flats area—adjacent to the Grant Area—due to waves overtopping the coastal infrastructure on Beach Street, thereby causing water to flow down Beach Street into low lying areas. This will cause a short term flood condition.
However, impacts are assumed to be managed by current storm water pumps along the San Lorenzo River levee (see Figure 2). 2060 Planning Horizon (or 28 inches of SLR). For the 2060 Planning Horizon, the CAP Update assumed that coastal armoring and water control structures will no longer function as designed without upgrades or replacement. Additionally, unprotected portions of West Cliff (located adjacent to the State Grant Area) are projected to be vulnerable to increased coastal erosion due to rising tides and coastal storms, threatening the road and subterranean utilities. Coastal erosion includes both cliff/bluff erosion and beach erosion, and is a result of both winter wave attack as well as a slowly rising sea level. In the past, the impacts of coastal erosion have been significant. Any increase in coastal storm frequency or severity will increase coastal cliff retreat rates. This will in turn endanger coastal properties and infrastructure. The impacts that storms, extreme events, climate change and erosion may have on our cliffs/bluffs and our local beach frontage range from issues at the Santa Cruz Harbor, loss of beach and cliff frontage at the mouth of the San Lorenzo River, as well as the loss of roadway and bicycle paths along West Cliff Drive. Figure 3 depicts the projected erosion hazard zones in the State Grant Area.
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Figure 3: Erosion Hazard Zones
Furthermore, for the 2060 planning horizon, all of Cowell/Main Beach is projected to be vulnerable to the combined effects of storms, extreme events and SLR (see Figure 2). Projected vulnerabilities from rising tides (exacerbated by coastal storms) to areas of Lower Ocean, parking lots in Beach Flats, and greenspace of Neary Lagoon are assumed to be managed by current storm water pump infrastructure. As illustrated in Figure 3, houses along West Cliff between Woodrow and Lighthouse Field are vulnerable to coastal erosion, and the first block inland of Beach Street is vulnerable to erosion and storm flooding.
2100 Planning Horizon (or 68-inches of SLR). For the 2100 planning horizon, coastal erosion along West Cliff and East Cliff (as depicted in Figure 3 and not constrained to the State Grant Area) is projected to be an ongoing challenge for the City of Santa Cruz. According to the CAP Update, much of the most vulnerable coastal infrastructure is owned and operated by the City. It is important to note that while the study projects impacts to assets over the 2030, 2060 and 2100 time horizons, the City acknowledges that the current composition and distribution of assets is not necessarily representative of future conditions.
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When considering the impacts of storms and extreme events on the Santa Cruz Municipal Wharf, the 2014 Santa Cruz Wharf Engineering Report contains a complete analysis of the potential impacts on the structure. It also includes a section on Monterey Bay tidal action, discussing how more extreme storm events will increase the impact of the normal tidal actions.
Specific reference to these events is discussed in sections 10-3 & 4 of the Wharf Engineering Report. Sections 3and 4of this assessment contain recommendations from the Wharf Engineering Report to prepare the Wharf for extreme storm events. As for the coastal bluffs adjacent to the State Grant Area, the Engineering Report finds:
“Near the Wharf, just south of the Cowell’s Beach, the West Cliff Drive consists primarily of sea cliffs that front a flat marine terrace. Because most of this portion has been armored with riprap (visible from Google Earth©), it is not considered to be threatened immediately. However, a continuous rising sea level with severe storms might potentially cause cliff erosion and consequently retreat, especially where the riprap is not functionally intact during the events.”
c. Consider changing shorelines
Shoreline changes as a result of SLR will significantly impact the beaches at the foot of the Santa Cruz Municipal Wharf where it meets Cowell and Main Beaches, which are flat and wide, and where the portion below mean sea level is within the State Grants Area. The beaches are essentially continuous from Cowell/Main Beach to the Harbor jetty and are highly vulnerable to rising tide in addition to coastal storms and erosion (as noted in the previous section). The beaches are also backed in many locations by seawalls, preventing the migration of beaches with shorelines.
Shorelines are expected to recede due coastal erosion, and will be further impacted by SLR, which may effect assets in the State Grant Area. All of Main Beach is projected to be vulnerable to the combined effects of SLR, with over half of Main Beach projected to be reduced by rising tides alone by 2060. Figure 4 depicts rising tide hazard zones (previously called tidal inundation zones), and Figure 5 depicts projected shorelines for the 2010 baseline year as well as for the 2030, 2060 and 2100 planning horizons.
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Figure 4: Rising Tides Hazard Zones
Figure 5: Projected Future Shorelines
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d. Consider trends in relative local sea level
According to the CAP Update, SLR projections are typically presented in ranges due to several sources of uncertainty such as the magnitude of future emissions and loss of sea ice among other sources. The California Coastal Commission Guidance Document7 recommends evaluation of SLR impacts using a “scenario-based analysis.” This method seeks to understand how SLR and other drivers interact to threaten health, safety, and resources of coastal communities. Briefly, “the best available science (the 2012 NRC report) is used to identify a range of sea level rise scenarios including high, low, and intermediate projections.” Regional factors such as El Niño and extreme storm events that affect ocean levels, precipitation, and storm surge are then added to the model (see Figure 6). For clarity, the SLR analysis focuses the hazard analysis on a subset of those scenarios, recommended by local and state experts (see Table 1). Resulting sea levels are overlaid on geographic data including coastal elevation, infrastructure, and population information to produce hazard zones8.
The coastal climate vulnerability maps used for the CAP Update identify hazard zones for each climate scenario for the three planning horizons (2030, 2060, and 2100) under three different regional emissions scenarios (High, Medium and Low).
7 California Coastal Commission. California Coastal Commission Sea Level Rise Policy Guidance: Interpretative Guidelines for Addressing Sea Level Rise in Local Coastal Programs and Coastal Development Permits. 12 August 2015.
2015.
8 SLR hazard zones were originally prepared by ESA through funding by the California Coastal Conservancy.
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Figure 6: Sea Level Rise Scenarios For Each Time Horizon (Figure Source:
CAP Update)
The Coastal Commission recommends all communities evaluate the impacts of the highest water level conditions that are projected to occur in the planning area. Local governments may also consider including higher scenarios (such as a 6.6 ft. [2m] scenario) where severe impacts to Coastal Act resources and development could occur from SLR. In addition to evaluating the worst-case scenario, planners need to understand the minimum amount of SLR that may cause impacts for their community, and how these impacts may change over time.
The City’s SLR hazard evaluation is intended to provide a predictive chronology of future risks to benefit local coastal planning and foster discussions with state regulatory and funding agencies. Estimates of the extent of assets at risk of various climate hazards were made using best available regional data. This approach allows planners to understand the full range of possible impacts that can be reasonably expected based on the best available science, and build an understanding of the overall risk posed by potential future SLR.
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Table 1: Sea Level Rise Scenarios Selected for Analysis Time
Horizon
SLR
Scenario Notes
2030
med
(10 cm or 4
in)
Erosion projection: Includes long-term erosion and
the potential erosion of a large storm event (e.g.
100-year storm)
2060
high
(72 cm or
28 in)
Erosion projection: Includes long-term erosion and
the potential erosion of a large storm event (e.g.
100-year storm)
Future erosion scenario: Increased storminess
(doubling of El Niño storm impacts in a decade)
2100
high
(159 cm or
63 in)
Erosion projection: Includes long-term erosion and
the potential erosion of a large storm event (e.g.
100-year storm) Future erosion scenario:
Increased storminess (doubling of El Niño storm
impacts in a decade)
The OPC’s State of California Sea-Level Rise Guidance Document (Guidance Document)9, initially released in 2010 and first updated in 2013, also provides guidance to state agencies for incorporating SLR projections into planning, permitting, investment, and other decisions. The 2013 Guidance Document was referenced in the City’s Sea Level Rise Vulnerability Assessment. The 2018 Update10 to the Guidance Document was released after the completion of the City’s Sea Level Rise Vulnerability Assessment and thus was not integrated into the CAP Update. The 2018 Update reflects advances in SLR science and addresses the needs of state agencies and local governments as they incorporate SLR into their planning, permitting, and investment decisions. One of the major changes made to the 2018 Update is providing probabilistic SLR projections versus the scenario-based SLR projections of the 2013 OPC Guidance Document. According to the 2018 Update:
“the 2013 OPC Guidance was based on scenario-based sea-level rise projections from the 2012 National Research Council report, which produced a set of three scenarios (low, central, and high), with greater weight given to the central scenario; these scenario-based projections were partially but not fully tied to specific emissions scenarios presented in the Intergovernmental Panel on Climate Change’s Fourth 9 State of California Ocean Protection Council. State of California Sea-Level Rise Guidance Document. March 2013 Update.
10 State of California Ocean Protection Council. State of California Sea-Level Rise Guidance Document. 2018 Update.
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Assessment Report and do not include a likelihood of occurrence.
Subsequently, in 2013, the IPCC Fifth Assessment Report adopted a probabilistic approach and produced estimates of the likely range of global sea-level rise under different emission scenarios, where ‘likely’ covers the central 66% of the probability distribution (i.e., the sea levels that fall within the range created by the value that is 17% likely to occur and the value that is 83% likely to occur). The IPCC Fifth Assessment Report did not estimate sea-level rise outside these central 66% probability ranges or produce local projections for California. This updated Guidance [2018 Update] thus incorporates probabilistic sea-level rise projections, which associate a likelihood of occurrence (or probability) with sea-level rise heights and rates, and are directly tied to a range of emissions scenarios… [However] the probabilistic projections may underestimate the likelihood of extreme sea-level rise (resulting from loss of the West Antarctic ice sheet), particularly under high emissions scenarios. Therefore, the 2018 update to the Guidance also includes an extreme scenario called the H++ scenario11. The probability of this scenario is currently unknown, but its consideration is important, particularly for highstakes, longterm decisions.” Table 2 compares SLR projections (used for the CAP Update and this assessment) from the original OPC Guidance Document (as noted above), and the 2018 Guidance Document Update. Moreover, Table 2 distinguishes the differences between the scenario-based SLR projections of the California Coastal Commission guidance document and the probabilistic SLR projections of the 2018 Guidance Document Update.
11 The H++ extreme high SLR projections recommended for scenario analysis by the California 4th Climate Assessment were not evaluated in the coastal climate change analysis as CCWG’s modeling and data sets utilized predate the H++ scenario development. The extreme H++ scenario has an unknown probability but could lead to SLR exceeding 10 feet in California by the end of the century
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Table 2: Comparison of OPC 2013 Guidance Document and 2018 Update’s Projected SLR projections (in inches)12
OPC 2013 2018 Update Probabilistic SLR Projections
Time
Horizon
SLR
Scenariobased
projections
Emissions
Scenario
Likely
Range*
(66%
probability
SLR is
between…)
1-In-200
Chance**
(0.5%
Probability
SLR meets
or
exceeds…)
H++
Scenario***
2030 Med (4 in) high 3.6 – 6in 9.6in 12in
2060 High (28 in) low 6 – 14.4in 27.6in 45.6in
2060 High (28 in) high 8.4 –
16.8in 31.2in 45.6in
2100 High (63 in) low 10.8 –
27.6in 66in 121.2in
2100 High (63 in) high 18 –
39.6in 82.8in 121.2in
Notes:*Low risk aversion projection**Medium-high risk aversion projection***Extreme risk aversion projection
e. Consider impacts to the public trust resources and values, including but not limited to public access, commerce, recreation, coastal habitats and navigability
The two main public trust resources to be impacted by SLR in the State Grant Area are the beaches (Seabright, Cowells and Main Beaches) and the Santa Cruz Municipal Wharf. With regard to the Santa Cruz Municipal Wharf, the Wharf Engineering Report states the following:
12 According to the 2018 Update of the OPC SLR Guidance Document, probabilistic projections for SLR are shown in Table 2, along with the H++ scenario (depicted in the far right column), as first presented in the Rising Seas Report (Griggs et al. 2017). The H++ projection is a single scenario and does not have an associated likelihood of occurrence as do the probabilistic projections. Probabilistic projections are with respect to a baseline of the year 2000, or more specifically the average relative sea level over 1991 - 2009. High emissions represents Representative Concentration Pathways (RCPs) of 8.5; low emissions represents RCP 2.6.
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“Because of its location and deck elevation (+23 ft., MLLW) Santa Cruz Wharf should continue to function well into the future, as it has for the past 100 years with continued maintenance and strengthening. With a sea level rise of 3.5 ft.”
The Wharf Engineering Report also includes recommendations for strengthening the Wharf to withstand the impacts of projected increased storm action. These recommendations are discussed in Section 3 of this assessment.
The impacts on Cowell and Main Beach will be most noticeable when the SLR reaches one foot; the following excerpt from the Wharf Engineering Report discusses this impact:
”….a foot of sea level rise would cover much of the Main Beach and consequently lead to beach erosion.”
Additionally, while not in the State Grant Area, SLR over this century will directly impact the Santa Cruz Beach Boardwalk which is adjacent to the State Grant Area. These impacts will not be included in this assessment since they are on private property, but are noted for information purposes.
The City participates in ongoing discussions with the Boardwalk on sea level rise resilience.
Public Access. The projected rise in sea level will have a major impact on public access and recreation since at least a million visitors use these beaches annually, most in the summer months and to a lesser extent in the winter months. Several options are being discussed to mitigate this impact on an interim basis. A rise of two feet in sea level will start to have impacts on the sea wall to the rear of these two beaches. Figure 7 depicts the impact of SLR on acess points at Cowell/Main and Seabright beaches. Four access points within or adjacent to the State Grant Area are exposed and vulnerable to sea level rise.
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Figure 7: Coastal Access Points and Combined Coastal Climate Change Hazard Zones (hazard zones include areas that are currently managed by pumps or protected by levees)
Commerce. Climate change impacts from SLR will have a major impact on tourism in particular. Specifically, near shore lodging and transient occupancy taxes, as well as economic revenue from recreational and retail activities will be reduced. Although commerce was not assessed in the CAP Update, it is a high priority (called out as a strategy) to complete a more robust cost/benefit analysis evaluating business as usual development with various adaptation strategy pathways. The economic value of the loss of future tourism at the Wharf and Beaches is assessed in Section 3.
Recreation. Beaches within the State Grant Area are used for a variety of recreational activities such as beach volleyball, sunbathing, picnicking, running/walking, swimming and surfing. Surfing is embedded in Santa Cruz culture, and two promenint surf spots—Steamer Lane and Cowells Beach— are located within the State Grant Area as depicted on Figure 8. Steamer Lane is one of Santa Cruz’s most famous surf breaks, and hosts several surf contests throughout the year which attract surfers and tourists from all over
22.24 19
the world. According the article Using local knowledge to project sea level rise impacts on wave resources in California13 by Dr. Dan Reineman:
“Sea level rise will have significant impacts on many coastal resources.
Waves are an important resource in California, where they support the recreation of 1.1 million surfers who inject millions of dollars into local economies. The impacts of sea level rise on wave resource quality, however, are unknown… Breaking waves are a key element of California's intertidal ecosystems, are central to the viewshed and experiences of many tens of millions of people who live on and visit the California coastline each year, and enable surfing—one of the most iconic, as well as culturally and recreationally significant, activities in coastal California… more than one-third [of California surf spots] are vulnerable to impacts from sea level rise… [however] surf-spot vulnerability is clearly not distributed evenly along the coast. San Francisco, Santa Cruz, Ventura, and San Diego counties in particular each have very high proportions of vulnerable surf-spots.” Furthmore, according to another report by the same author titled Projected Sea Level Rise Impacts for Santa Cruz, CA14, Steamer Lane and Cowells will be drowned at 0.4 and 0.66 meters of SLR, respectively, which are projected to occur between the 2030 and 2060 time horizons. These two breaks currently experience their best conditions at the lower end of the present day tide range. SLR will increase the water depth over these breaks such that as the lower levels of present day tide range are sequentially drowned; the best conditions will only occur during future lower and lower tides. This will continue until such time as the tide is never low enough (i.e., the water is no longer ever shallow enough) during any part of the tide range and the surf break effectively “drowns.” To reach this conclusion, the report assembled and analyzed data from interviews and secondary sources, then presented results on projected impacts of SLR on wave resources in the City of Santa Cruz.
13 Reineman, Dan et al. Using local knowledge to project sea level rise impacts on wave resources in California. Ocean & Coastal Management Journal. January 2017.
14 Report Prepared by Dr. Dan Reineman, Environmental Science & Resource Management, California State University Channel Islands..
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Figure 8: Coastal Access/Beach and Surf Breaks
It is possible that the location of Cowells Beach surf break will migrate shoreward at a rate commensurate with rising sea levels since it overlies a sandy bottom; however, this likelihood decreases as rates of SLR increase. It further decreases as human interventions detrimentally impact natural coastal processes (e.g., shoreline stabilization prevents upland migration of beach environment and reduces sediment replenishment in the nearshore).
In the case of Steamer Lane—which overlies hard rock reef—the potential for break migration is very low. As such, Steamer Lane faces a high risk of extinction due to SLR.
Coastal Habitat. Habitat that exist within or near the State Grant Area includes shorebird habitat at the Wharf, aquatic habitat within the State Grant Area, as well as monarch butterflies, nesting birds, and seals who find habitat on the coastal bluffs adjacent to the State Grant Area.
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Figure 9: Sensitive Habitat/Species and Combined Coastal Climate Change Hazard Zones (hazard zones include areas that are currently managed by pumps or protected by levees)
According to the CAP Update, flooding and erosion from SLR could cause coastal habitats to be converted from one type of habitat to another, and generally reduces the amount of nearshore habitat, such as sandy beaches and rocky intertidal areas. As depicted in Figure 9, sensitive habitat/species (mainly avian species) are located on the Wharf and within the State Grant Area. Between 2011 and 2014 a study was conducted to document the abundance and behaviors of birds located near the Wharf relative to a wind turbine15. According to the report, Monitoring the Impacts of a Vertical Axis Wind Turbine on Avifauna at the Santa Cruz Wharf: Final Report16, the most 15 Notably, this wind turbine is the only offshore wind turbine permitted by the Coastal Commission off the coast of California. A three year monitoring study and resulting report were a condition of the Coastal Commission development permit. The findings of the report supported the Coastal Commission’s discontinuation of the monitoring condition going forward. 16 Wise-West, Tiffany and Rinkert, Alex. Monitoring the Impacts of a Vertical Axis Wind Turbine on Avifauna at the Santa Cruz Wharf: Final Report. UC …
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parsimonious set of primary factors that theoretically could impact bird ecology in the Wharf’s unique marine setting include: season, water depth, and weather. When considering water depth, as it relates to this assessment, the study found that “the presence of bird species at the Wharf could be explained by their prey distribution which may vary with water depth. With increased water depth, we expect increased availability of food sources… It is expected that as water depth increases so does food availability” (Wise-West et al., 2014). According to the study:
“From February 2012 to February 2014, a total of 61 bird species were detected on 60 on-site avian surveys. Only 24 of those species were detected with any regularity (> 5% of the time) at any plot in their appropriate season of occupancy at the Wharf… This demonstrates the small composition of species that are regularly present at this site, and how diversity at the Wharf is significantly influenced by passage migrants and other local transient species.”
Furthermore, the study found “over the course of the on-site surveys, four species were confirmed to be breeding on the Wharf. Because of these species’ regular presence and interaction with the Wharf during an important stage in their life cycle, they are assessed to be species potentially at risk from anthropogenic effects of Wharf operations.” These four species include the following: Pelagic Cormorant (Phalacrocorax pelagicus), Western Gull, Pigeon Guillemot (Cepphus columba), and Rock Pigeon (a non-native, introduced species that is present year-round in high abundance).
Cormorants were observed roosting underneath the Wharf, Pigeons were perching underneath the Wharf near nest sites, and Rock Pigeons preferred to nest underneath the Wharf. With the advent of SLR, it is likely that this area of the Wharf will be impacted, potentially displacing the birds that roost, perch, and nest under the Wharf. However, no California state or federally listed endangered or threatened bird species were detected during on-site surveys. Although three species listed as California Bird Species of Special Concern were detected once each: Brant (Branta bernicla), Black Swift (Cypseloides niger), and Vaux’s Swift (Chaetura vauxi).
A complete review of these impacts is beyond the scope of the CAP Update as well as this assessment and will be addressed in the upcoming West Cliff Drive Shoreline Adaptation and Management Plan development. However, sensitive habitat is projected to be minimally impacted within or adjacent to the State Grant Area. Since the bluffs are in some places 35 feet in elevation above the sea level, it is assumed the birds and seals will adapt and find new habitat at a slightly higher elevation along these coastal bluffs. Moreover, as … Santa Cruz. The Center for Sustainable Energy and Power Systems (CENSEPS). July 2014.
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discussed in subsequent sections of this assessment, green or natural infrastructure solutions are being considered that have the benefit of providing protection from SLR and increasing habitat space and connectivity.
Navigability. Minimal impact to coastal navigability is anticipated within the State Grant Area since there are no docking or harbor facilities in the area boundary (with limited docking activity for small craft at the Wharf) and thus boating activities are limited to occasional recreational boats (e.g., stand up paddle boards, kayaks, non commercial fishing). With respect to the Wharf, as sea level rises toward the Wharf deck, boats operating in the area may have diminished capability to fully ascertain the location of the Wharf.
However, SLR does not negatively impact the Wharf since the deck of the Wharf is well above the projected 100 year SLR. Navigability was not assessed in the CAP Update.
f. Prioritize vulnerabilities to be addressed
A number of adaptation strategies contained in the CAP Update were prioritized for consideration. Each strategy was evaluated across the FEMA STAPLEE evaluation criteria and ranked by internal and external stakeholder teams and City leadership. The strategies listed in Table 3 pertains to the two primary assets in the State Grant Area—the Wharf and Beaches—that are exposed and vulnerable to SLR as well as assets directly adjacent to the State Grant Area. Until the City develops and implements a monitoring, triggers and threshold program, these priority strategies are addressed as funding and resources allow. All strategies are aimed at bolstering preparedness and resiliency of municipal, private, and public stakeholders.
Table 3: Adaptation Strategies for the Wharf and Cowell/Main/Seabright Beach
Title Timeline Est.
Cost
Status Priority
A-1: Increase public
awareness, education,
and public outreach in
areas with social
vulnerabilities that
coincide with hazard
zones
2017-
2030 Unknown
Ongoing but
targeted
outreach
campaign
planned for
FY18; State
technical
assistance
requested in
FY18
Very
High
A-2: Evaluate related
decisions through a
climate change impact
lens
Ongoing Unknown
CIP adaptation
list, staff report,
annual progress
review proposed
Very
High
22.29 24
Title Timeline Est.
Cost
Status Priority
for approval in
FY17
A-3: Prepare for potential
SLR throughout the City Ongoing Unknown Unknown Very High A-4: Identify priority
areas for managed
retreat to retain public
access and sufficient
beach area for
recreational use; plan to
relocate roadways
2030-
2060,
2060-
2100
Unknown
Local Coastal
Plan update in
progress; Cost
benefit analysis
of business as
usual vs.
adaptation
strategies
pending funding
Very
High
A-5:Adopt policies to
evaluate limiting
municipal capital
improvements that would
be at risk
2017–
2030;
Ongoing
Unknown
CIP adaptation
list, staff report
adaptation
statement
template
proposed for
approval in
FY17
Very
High
A-6: Prioritize coastal
protection structures for
upgrade and replacement
2017–
2060;
Ongoing
Unknown
West Cliff
Management
Plan begins in
April 2019; Cost
benefit analysis
of business as
usual vs.
adaptation
strategies
pending funding
Very
High
A-11: Monitor all
pumping station sites
2010–
2020
Up to
$50k/ye
ar
Pending Very
High
A-14: Protect downtown,
beach area, and
surrounding
neighborhoods from San
Lorenzo River flooding
Ongoing
project Unknown Ongoing Very High
A-15: Protect adjacent
neighborhoods and
commercial areas from
Ongoing Unknown
Habitat
restoration plan
in progress with
Very
High
22.30 25
Title Timeline Est.
Cost
Status Priority
Branciforte Creek and
other stream flooding
PW, consultant
and agencies.
A-19: Protect coastline
related water
infrastructure
Ongoing Unknown Unknown Very
High
A-20: Improve resiliency
to flooding along the
Coast
2030–
2060;
ongoing
Unknown Ongoing Very
High
A-21: Reduce impacts of
creek and/or river
flooding to water system
infrastructure
Ongoing Unknown
Unknown;
fluvial analysis
of San Lorenzo
river flooding
pending funding
Very
High
A-25: Protect visitor
serving venues and
natural resources
Ongoing
with
annual
status
reviews
Unknown Unknown Very
High
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Title Timeline Est.
Cost
Status Priority
B-2: Investigate beach
nourishment
2017–
2060;
ongoing
Unknown
Beach
nourishment
from San
Lorenzo River
designed and
pending suitable
funding.
High
B-5: Promote and
preserve economic base
and tourism industry in
the face of a changing
climate
Ongoing Unknown
Outreach to
Downtown
Association via
the Downtown
Commission
High
B-6: Require setbacks
adjacent to cliffs
2017-
2030 Unknown
Planning
Department is
working with
the Coastal
Commission on
the Local
Coastal Plan
Update, which
will provide
guidance on
how to
implement this
strategy.
High
B-7: Protect natural
shoreline
2017-
2030 Unknown
Will be a
consideration of
West Cliff
Management
Plan pending
identification of
suitable funding
High
B-8: Mitigate
development in flood
plains
2017–
2030 Unknown
City maintains
flood plan and
floodway
regulations in
developed flood
areas. There are
few
undeveloped
flood areas to
develop.
High
22.32 27
Title Timeline Est.
Cost
Status Priority
B-9: Disseminate flood
hazard information and
encourage participation
in Federal Flood
Insurance Program
2017–
2030 Unknown Unknown High
C-6: Protect and
preserve tree canopy and
other native coastal
vegetation
Ongoing
with
status
reviews
Unknown
FY17 CAL FIRE
grant provides
for development
of a GIS-based
urban tree
inventory and
planting of 500
trees in addition
to the 300 trees
planted annually
in the City.
Importa
nt
Santa Cruz Municipal Wharf. The Wharf Engineering Report recommends methods for increasing the resiliency of the wharf structure to reduce potential damage and to enhance public safety in extreme weather conditions related to climate change and rising sea levels. Specifically, to quote the Wharf Engineering Report: “The elevation of Wharf deck (23 ft.
MLLW) is sufficient to keep the Wharf deck above all but the infrequent, highest waves which can be up to 20 feet in height. As sea level rises, waves will be closer to the Wharf deck more frequently. Additional piles to widen the Wharf will increase the Wharf's ability to withstand these waves and other lateral forces.” The Wharf Engineering Report contains the following recommendations:
“Because of its location and deck elevation (+23 ft., MLLW) Santa Cruz Wharf should continue to function well into the future, as it has for the past 100 years with continued maintenance and strengthening. With a sea level rise of 3.5 feet, the deck of the Santa Cruz Wharf would be approximately at the same present elevation of the Capitola Wharf.” The Wharf Engineering Report also identifies the immediate maintenance and structural improvements needed to prepare the Wharf for the projected SLR and climate change. Some of the recommendations for the needed structural improvements and strengthening of the Wharf include the following:
• Add piles in Master Plan features to increase Wharf lateral stability • Install side plate connections at unsupported cap splice
22.33 28
• Replace deteriorated stringers, decking, and caps
• Install bolts at stringers laps to provide longitudinal continuity • Test existing Wharf timbers to obtain actual allowable stress values if higher load capacity is sought
• Perform design level seismic analysis for additions to the Wharf Cowell and Main Beach. Given the relatively flat topography, the most immediate impacts of SLR will be experienced along the City’s beaches resulting in narrower beaches with less recreation potential and reduced habitat. While the options are limited on how to address and mitigate sea level rise impacts on Cowell/Main Beach, the City is currently developing a plan to utilize sediment removed from the San Lorenzo River Flood Control Project to more frequently replenish the sand at these beaches. The preliminary engineering plans and CEQA Initial Study are now being prepared for the initial beach sand replacement project. If this effort is successful, it can be used in future years as a short term method to mitigate the beach erosion caused by sea level rise.
g. Consider impacts and recommendations described in the current version of the Ocean Protection Council’s (OPC) Sea-Level Rise Guidance Document
Section 1d discusses SLR probabilistic based scenarios as compared to previous OPC guidance. Other recommendations from the Guidance Document suggest that adaptation strategies should prioritize use of natural or green infrastructure solutions. Because of the bluff topography along West Cliff and the presence and orientation of current seawalls, there is limited opportunity for natural solutions along West Cliff Drive. CalTrans recently funded a West Cliff Drive Shoreline Adaptation and Management Plan, slated to commence in the spring 2019, where the City will evaluate other natural infrastructure solutions (e.g., living sea walls for the bluffs adjacent to West Cliff Drive, which in some places is adjacent to the State Grant Area).
There is greater opportunity for natural solutions at the low lying beach locations and, in fact, dune revegetation is already in progress at Seabright State Beach (Seabright). In the CAP Update, the City identified consideration of natural infrastructure solutions in order to protect low-lying areas that are fronted by these beaches. The City is currently exploring the concepts of vegetated dunes constructed from San Lorenzo River sedimentation and transient wetland systems to provide improved habitat and water quality at the San Lorenzo Rivermouth.
In addition to the solutions described above, the following recommendations are provided in the CAP Update for the Cowell/Main Beach area:
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“Small to medium scale beach nourishment has been found to be a cost effective, although temporary, adaptation measure when material is available. Strategic placement of river sediment at a site north of Santa Cruz could artificially increase local littoral sand abundance, which would be passively distributed down coast, benefitting subtidal areas along West Cliff as well as Cowell and Main beaches.” As for Seabright, there is the possibility of further beach stabilization and dune building as adaptation strategies. There is an existing dune at Seabright that is in the process of being restored by Groundswell Coastal Ecology, known as the Seabright Beach Coastal Enhancement Project, which began in 2013. The project started at the entrance cove to Seabright and now extends from the San Lorenzo River Mouth to the West Harbor Jetty, making it the largest coastal restoration project in the City of Santa Cruz.
The project increases coastal resiliency by using green infrastructure to build coastal dunes that protect the shorelines, and provides important wildlife habitat. As of now, over one-half mile of coastal dune, sand, and bluff habitat have been restored at Seabright.
According to the Ocean Protection Council’s SLR Guidance Document, adaptation planning and strategies should also prioritize social equity, environmental justice and the needs of vulnerable communities. As such, in addition to its focus on climate-induced hazards, the CAP Update also takes environmental justice and social equity into account by identifying those who may be most impacted by these hazards through an innovative social vulnerability scoring feature. Although no socially vulnerable census block groups that coincide with the coastal climate hazard zones are contained within the State Grant Area, we include the following description of the process to determine social vulnerability in order to demonstrate the City’s focus on environmental justice and social equity.
According to the CAP Update:
“The objective of the Social Vulnerability to Climate Change Hazards Assessment was to evaluate the geographic scale and drivers of social vulnerability. Taking place at the city block group level, several local indicators were compiled to form a social vulnerability score for each block group. The indicators of social vulnerability include (1) an income below the median income (based on HUD home income limits), (2) elderly (>65 years of age), (3) language limitations, (4) disability, and (5) crime incidence (violent and property crimes). The
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methodology used to determine social vulnerability scores for each city block group is contained in Appendix E of the CAP Update.17” Figure 10 displays the results of the social vulnerability scoring. As depicted in the Figure 10, several of the communities adjacent to the State Grant Area (Beach Hill, Downtown/South of Laurel and Lower Ocean) have medium-high to high social vulnerability scores relative to other census block groups.
17 Appendix E of the CAP Update also contains maps of the individual social vulnerability indicator scores.
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Figure 10: Social Vulnerability to Climate Hazards by Census Block Group This method of hazard characterization improves policy and investment decision-making, allowing the City of Santa Cruz to ensure equitable resilience building across all sectors of the community. The social vulnerability scoring feature of the CAP Update assists in engaging vulnerable populations with education and assistance in climate awareness and adaptation planning.
In addition to the targeting of socially vulnerable populations through the social vulnerability scoring feature, public outreach was, and will continue to be, conducted in order to address environmental justice and social equity.
Public input during the development of the CAP Update included public information events, a community survey on the 2011 CAP, and activities documenting residents’ experience with and preparedness for climate change related impacts. In Appendix I of the CAP Update, there is a detailed description of the full project outreach along with the results of a public survey where nearly 400 residents responded. This input assisted in shaping the CAP Update’s strategies.
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2. Maps of 2030, 2060 and 2100 Impacts
Figure 11 depicts the combined impacts of coastal climate change hazards (rising tide, 100-year coastal storm flooding and erosion) projected in the years 2010 (baseline year), 2030, 2060 and 2100 on the beaches and coastal bluffs in or adjacent to the State Grant Area. While building footprints, roadways, greenspace, and river area is shown, above and below ground utilities and associated infrastructure are not included for clarity.
Figure 11: Combined Coastal Climate Change Hazards in the State Grant Area (hazard zones include areas that are currently managed by pumps or protected by levees)
Section 1 contains a detailed description and maps of the separate SLR related climate hazards (e.g., rising tides, coastal storm flooding, and erosion) as well as the cumulative risks and impacts of SLR and coastal climate change projected for the current, 2030, 2060 and 2100 planning horizons. Table 4 describes the specific assets within and adjacent to the State Grant Area that are projected to be vulnerable to the cumulative risks of coastal climate change and SLR.
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Table 4: Specific Assets Projected to be Vulnerable to SLR in or adjacent to the State Grant Area
Asset/Area Type Coastal Hazard
Impact
Impact
Threshold
West Cliff Drive Road – Isolated
Sections Erosion 2030
West Cliff Drive Pocket Beaches Rising Tides 2060
West Cliff Drive Homes – Areas
without armor Erosion 2060
Lighthouse Field
State Park
Bike and walking
path Erosion 2030
Lighthouse Field
State Park Lighthouse Erosion 2060
Wharf Entrance Road Erosion 2030
Cowell/Main
Beach Beach ErosionRising Tides
2030
2060
Beach Street Road and Visitor
Serving Erosion 2060
Beach Street Visitor Serving Coastal Storm
Flooding 2030
East Cliff Drive Road Erosion 2030
East Cliff Drive Homes – Area
without armor Erosion 2060
3. Estimate of financial costs of sea-level rise
a. Replacement or repair costs of resources and facilities that could be impacted by sea-level rise and climate change processes Santa Cruz Municipal Wharf. The Wharf Engineering Report contains a detailed cost estimate for the various recommended improvements. The estimated cost of the improvements needed for strengthening the Wharf in preparation for SLR is $1,750,000 to $2,600,000. The recommendation for the addition of new Wharf lateral mass is estimated in the Wharf Master Plan at $14.3 to $17.3 million. The lateral mass addition would involve the addition of an Eastern Promenade and Western Public Access Extensions, which would also improve pedestrian access to the Wharf.
Cowell and Main Beach. The need for beach nourishment during sea level rise is one of the alternatives available to slow the inevitable beach erosion and inundation. This adaption strategy is now in engineering design and involves the transportation of San Lorenzo River sediment to a beach nourishment site through a slurry pipe. The current estimated cost for this project is approximately 5 million. However, the permitting and other
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regulatory constraints on this approach make the timing hard to predict unless there is some regulatory priority given by the State for beach nourishment projects. In addition, the State Water Quality Board needs to adjust its fee schedule for beach nourishment projects related to sea-level rise.
Depending on the outcome of public outreach, adaptation alternative feasibility analyses and Local Coastal Program policies adopted, a second improvement at Cowell and Main Beach could be the eventual increase in height of the sea wall which runs along the back of these beaches. Presently, the wall is two feet in height, and a potential four foot height increase (for a total of 6 feet in height) would cost approximately $500,000 to $1,000,000 depending on the amount of foundation work needed to support the new wall height.
No assessment of operational or permitting costs for protecting these two assets has been evaluated.
Seabright Beach. As noted in Section 1, there is an existing sand dune at Seabright that is in the process of being restored by Groundswell Coastal Ecology, known as the Seabright Beach Coastal Enhancement Project,which began in 2013. The project includes dune building and coastal resiliency enhancements, and spans from Santa Cruz Harbor West Jetty northwest to the San Lorenzo Rivermouth. Since 2013, approximately $377k has been invested in the project; however, the cost for maintenance, restoration, and vegetation for the dune is currently unknown. As such, a cost-benefit analysis must be undertaken by the City to evaluate dune building and other feasible green infrastructure, maintenance, restoration, and vegetation at Seabright.
b. Non-market values including recreation and ecosystem services of public trust resources that could be impacted by climate change and sea-level rise processes.
Three approaches were evaluated in order to ascertain the non-market value of recreation in the beach areas within the State Grants Area, creating a potential range of impact associated with SLR.
First Approach. The Ocean Economics Website, references a study entitled:
Valuing Recreation and Amenities at San Diego County Beaches18. Based on the report, the average visitor to a San Diego County beach spent $37/day visiting the beach. It is estimated that the City of Santa Cruz has between three to four million visitors each year who visit the Wharf, Downtown and 18 DANIEL K. LEW & DOUGLAS M. LARSON (2005) Valuing Recreation and Amenities at San Diego County Beaches, Coastal Management, 33:1, 71- 86, DOI: 10.1080/08920750590883079
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the Boardwalk and approximately one million of these visitors spend time at the City’s beaches. Using the San Diego County statistics this would mean the loss of the City’s beaches would be in the area of $37 million dollars annually (one million visitors’ at $37 per person a day).
Second Approach. Another approach to measure the economic impact of the loss of the City’s beaches it to utilize local statistics. The Santa Cruz Visitor’s Council website states that the average visitor to Santa Cruz County spends $151 per day. It is assumed that a day at the beach is free then this expenditure should be reduced by at least half to $75 per person a day.
Utilizing this higher local figure, the “day at the beach” economic valuation ranges from $37 to $75 per person per day. Thus, a reasonable valuation would be the mid-point between these two figures which would establish a “day at the beach value” of $56 per day or $56 million annually spent by the one million Santa Cruz beach visitors.
Third Approach. This approach is based on a March 2016 study by the Nature Conservancy for the California State Coastal Concervancy, titled:
Economic Impacts of Climate Adaptation Strategies for Southern Monterey Bay19 (Economic Impacts Report). Through strategies including coastal user counts and intercept surveys, the study found that beaches provide substantial non-market goods and services such as recreational value as well as significant ecological functions. According to the study, economists measure the non-market value of beach recreation by beach-goers’ willingness to pay to recreate at a beach. The key findings of the study were that “40% of visitors were from Monterey County, and roughly half (51%) were on overnight trips. The typical party size was 3.5 and close to 80% of visitors arrived by car. Overnight visitors typically spent just under $50 per person per day while day-trippers spent $12 per person per day.” When extrapolated over a year-long period, the study estimated that yearly attendance for four different beaches in Southern Monterey Bay (Del Monte, Sand City, Marina and Moss Landing) ranged between 50,000 and 197,000 people; and the annual spending for beach-goers was between $1,540,000 and $6,060,000. This equates to roughly $30.8 per person a day over the year-long period. Using the local beach goer estimate of 1,000,000 people annually as well as the Southern Monterey Bay statistics, we project that a loss of the City’s beaches would result in a $30.8 million dollar annual loss.
Based on these three approaches, it is projected that between 2060 and 19 The Nature Conservancy. SCC Climate Ready Grant #13-107 Economic Impacts of Climate Adaptation Strategies for Southern Monterey Bay. March 2016.
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2100, approximately $30.8 to $56 million is lost anually in the local economy due to SLR’s impact on beaches.
This approach excludes other climate change impacts (e.g., ocean acidification on fishing resources and aquatic ecosystems). Those other non market values will be evaluated in a future cost benefit analysis. However, evaluating the ecological conditions of these beaches is a challenging task.
Collecting and evaluating the necessary data to determine the ecological condition of beaches can be very time consuming and expensive.
Furthermore, placing a dollar value on the ecological functions that beaches provide can be a challenge. However, a possible strategy to calculate a dollar value associated with the ecological condition of these beaches would be to implement a two-step approach similar to that of the Economic Impacts Report. First, a replacement cost analysis could be applied based on reported costs of nearby coastal resoration; and second, an ecological assessment could be conducted in order to determine an ecological score for each beach in the State Grant Area. The score would be based on present conditions, and then calculated for resulting future ecological conditions arising from any adaptation strategies.
Section 1 also contains a detailed description of the impacts of climate change and SLR on recreation and ecosystem services within the State Grant Area. Since it is unlikely the projected sea level rises would cause major closure of the Santa Cruz Wharf, it has not been included in this analysis. c. Consider costs of 2030, 2060 & 2100 sea level rise
projections with 100 year storm.
The financial cost associated with the loss of the two primary assets—Wharf and Beaches—within the State Grant Area boundary were summarized in Sections 3a and 3b. Current and future (2010, 2030, 2060 and 2100) costs associated with sea level rise (rising tide, erosion, 100-year coastal storm flooding and their combined impacts) are described for the City’s entire coastal zone and are not constrained to the State Grant Area (as no other assets are within that area). It is important to emphasize that the economic impacts of sea level rise represents only the present day valuation of current (2016) property and infrastructure assets that are vulnerable. The valuation does not include inflated costs, changes in land use, or the value of power system infrastructure, ecosystem services, recreation and tourism, etc.
Currently $136 million in property and infrastructure are vulnerable to the combined hazards of coastal climate change within the City of Santa Cruz (Table 5). A significant number of properties are currently being protected from flooding and storm damage by a substantial set of structures including levees, storm drains, pump stations, and sea walls.
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By 2030, the total value of vulnerable properties and infrastructure (not protected behind current structures) increases to $148 million. By 2030, $22 million (17% of the total value of vulnerable properties) in residential properties will be at risk. About $44 million in commercial properties alone (34% of the total value of vulnerable properties) will be vulnerable to 2030 hazards. More than half of the total property value at risk in 2030 is public property and infrastructure totaling over $64 million. This estimate does not include the Wastewater Treatment Plant.
The value of vulnerable property and infrastructure within the 2060 coastal climate hazard zone increases to over $622 million assuming that existing coastal armoring is replaced and new structures are constructed to protect against the hazards of sea level rise. In a comparative scenario, the value of vulnerable property and infrastructure within the 2060 coastal climate hazard zone is just over $1 billion if it assumed that existing coastal armoring is not replaced and new structures are not constructed to protect against the hazards of sea level rise. To note, in 2060, vulnerable property and infrastructure at risk is valued at over $33 million and consists of public buildings, roads and utilities.
Table 5: Cumulative Exposed and Vulnerable Asset Valuation for Various Time Horizons (entire City coastline)
ASSET
VALUE
PER
UNIT
2010
WITH
ARMOR
2030
WITH
ARMOR
2060
WITH
ARMOR
2060
NO
ARMOR
Buildings and Structures
Residential $960,00
0 $22,080,0
00 $26,880,0
00 $204,480,
000
$437,760,00
0 Commercial $2,600,
000
$44,200,0
00 $49,400,0
00 $140,400,
000
$218,400,00
0 Public $4,000,
000
$40,000,0
00 $40,000,0
00 $88,000,0
00 $108,000,00
0 Specific
Municipal
structures
$0 $24,288,0
00 $24,288,0
00 $140,653,
100
$140,653,10
0 Valuation of
vulnerable properties
$130,568,
000
$140,568,
000
$573,533,
100
$904,813,10
0 Parks20
20 The value of vulnerable parks will be determined between the draft and final CAP Update adoption during the summer of 2018.
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ASSET
VALUE
PER
UNIT
2010
WITH
ARMOR
2030
WITH
ARMOR
2060
WITH
ARMOR
2060
NO
ARMOR
Parklands $ $ $ $ $
Transportation
Roads $500 $1,193,50
0 $1,548,00
0 $13,790,0
00 $33,969,500
Highway $4,000 $0 $0 $28,000
Rail $237 $255,200 $293,900 $857,900 $1,854,300
Transportation
infrastructure value
$1,448,70
0 $1,841,90
0 $14,647,9
00 $35,851,800
Water and Utility Infrastructure21
Storm Drain
pipeline $600 $1,619,400
$1,893,60
0 $8,469,60
0 $19,870,200
Wastewater
pipeline $400 $1,250,800
$1,500,00
0 $7,482,00
0 $17,705,200
Drinking
Water
pipeline
$610 $1,724,50
0 $2,376,00
0 $17,497,2
00 $43,070,000
Utility Infrastructure
value
$4,595,00
0 $5,770,00
0 $33,449,0
00 $80,645,700
Total Combined
Infrastructure
Asset Value
$136,611,
000
$148,179,
000
$615,542,
700
$1,021,311
,000
A cost-benefit analysis must be undertaken by the City to evaluate adaptation options, which may include a managed retreat strategy for some public and private infrastructure, as well as evaluating coastal armoring and additional flood protection measures. As an example, very preliminary 2017 cost estimates for a new 2.8 mile West Cliff Drive could cost as much as $145 million to construct, based on high estimates, and the cost for new revetment or armoring that would protect private homes within the hazard zone could cost $36 million. Using the compiled hazard and vulnerability data generated by this project, coastal armor construction costs and the 21 Infrastructure costs are: $600/ft for storm drains/pipes, $400/ft for sewer, $610/ft for water, $280/linear ft for roads. Impacts of road and utility infrastructure were only tallied for erosion impacts (temporary flooding was assumed to pose little in replacement costs).
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secondary environmental and economic impacts resulting from constructed structures, one can compare relocation costs and losses associated with abandoning vulnerable structures. These data can inform temporal cost/benefit/consequence scenarios for each section of coastline and time horizon. All of these alternatives would need to include a thorough environmental analysis for potential impacts.
This preliminary economic evaluation highlights the need for constructive discussions between city decision makers, residents, and private property owners to establish protection and adaptation policies that fairly allocate costs and weigh public and private property concerns equitably. d. Include anticipated costs of adaption/mitigation measures and potential benefits of such strategies and structure.
Table 3 contained in Section 1f includes the adaptation measures from the CAP Update where only one measure’s cost has been estimated and the remainder are unknown. As noted in the previous section (Section 3c), it is a high priority for the City to conduct a cost benefit analysis to understand the cost of each adaptation measure as compared to a business as usual development scenario. The City is pursuing funds to complete this analysis. e. In terms of the two primary assests within the State Grant Lands, the Municipal Wharf and Beaches, there are partial cost estimates of recommendations to bolster resiliency. For the Wharf, actions to implement to improve the Wharf’s ability to withstand
environmental forces and improve safety include:
1. Widen the Wharf with vertical timber piles to increase its resistance to lateral wave and tsunami forces.
2. Evacuate the Wharf during periods of predicted extreme waves, as occurred in 1985 and 1998
3. Apply for a correction to the US Coast Guard to correct Chart 18685 (Monterey Bay) to indicate obstruction lights at the end of the Wharf
4. Limit anchorage on the west side of the Wharf to outside 200 feet (see recommendation 4, Section 6 of the Wharf Master Plan). Notify the US Coast Guard of such to update the Nautical Chart and US Coast Pilot (companion text book to the Chart)
5. Implement the West Walkway as called for in the Master Plan to protect the west side of the Wharf and buildings.
The costs of these improvements are delineated over 2030, 2060, and 210 time horizons, but are taken as a whole, as described in Table 6:
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Table 6: Costs of Recommended Wharf Improvements to Bolster Resilience to SLR
The complete discussion of resiliency efforts for the Wharf is found in the Implementation Section of the Wharf Master Plan and Section 10.2 of the Wharf Engineering Plan.
With regard to Cowell/Main beaches and Seabright beach, small to medium scale beach nourishment has been found to be a cost effective, although temporary, adaptation measure when material is available. According to the CAP Update:
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“Strategic placement of river sediment at a site north of Santa Cruz could artificially increase local littoral sand abundance, which would be passively distributed down coast, benefitting subtidal areas along West Cliff as well as Cowell and Main beaches.”
Beach nourishment also helps to preserve the aesthetic and recreational value of beaches which is extremely important since these beaches attract up to one-million visitors annually. As stated in Section 3b, the loss of the City’s beaches could cause the City to lose millions of dollars annually due to a loss in annual beach-goers.
4. Description of how trustee proposes to project
and preserve resources and structures that
would be impacted by the sea-level rise
The City is in the process of developing a landscape scale plan for protection, preservation and retreat as previously noted. Section 3 discusses the adaptation strategies proposed and in progress to protect and preserve resources and structures impacted by SLR. Table 7 (from Appendix H of the CAP Update) also contains a list of successful past and ongoing adaptation programs and projects (including projects related to storms and flooding) that relate to activities and assets within and directly adjacent to the State Grant Area.
Table 7: Recently Completed and Ongoing Activities to Protect and Preserve Assets from SLR
Program/Proj
ect Description Hazard Department/Org
Updated
Emergency
Operations Plan
Emergency Operations Plan is
reviewed and updated annually
Multihazard
Fire:
Emergency
operations
management
Ongoing
Warning System
The City of Santa Cruz
Fire/OES Analyst works with
the SC Office of Emergency
Services to manage the early
warning system for evacuation
of areas susceptible to
flooding, tsunami inundation,
seiches or dam failure
Flood
Tsunami
Dam
failure
Fire:
Emergency
operations
management
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Program/Proj
ect Description Hazard Department/Org
Ongoing design
review
Working together, the Fire and
Planning and Building
Departments review new
development design,
circulation and access to
ensure that development
provides for minimum
emergency response times and
that emergency vehicles have
safe and expedient passage at
all times
Multihazard
Fire
Planning and
Building
Ongoing coastal
protection
permit review
The Planning and Building
Department continues to
protect and preserve the
coastline and City
infrastructure through the
permit review process
Sea level
rise
hazards
Planning and
Building
Revision to the
Local Coastal
Plan+
The Planning Department is in
the process of updating its LCP
Multihazard Planning
Ongoing historic
preservation
The Planning and Building
Department encourage and
support the protection of
cultural, historic and
architecturally significant
structures to preserve
neighborhood and community
character as defined in the
General Plan
Planning and
Building
Ongoing
floodplain
management—
Limit alteration
Public Works continues with a
program to minimize the
alteration of floodplains,
stream channels and natural
protective barriers that
accommodate overflow
Flood Public Works
NFIP
compliance
monitoring
The State of California
Department of Water
Resources monitors compliance
for FEMA for cities to confirm
compliance with National Flood
Insurance Program
Flood
Public Works
Economic
Development
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Program/Proj
ect Description Hazard Department/Org
CRS compliance
The City of Santa Cruz
annually certifies compliance
with the CRS program as a
part of that certification NFIP
compliance components are
included
Flood
Public Works
Economic
Development
Public
awareness
Public Works (in conjunction
with Planning and Building)
continues to regulate
development in floodplains and
strives to increase public
awareness of flood hazards
Flood
Public Works
Planning and
Building
Economic
Development
Increasing
biodiversity
Increasing native biodiversity
and maintaining terrestrial
littoral transport processes
along coastal bluffs of West
Cliff and Natural Bridges
Biodiversi
ty
Groundswell
Coastal
Ecology,
CADPR, CA
Native Plant
Society
Increasing
Coastal
Resiliency using
Green Coastal
Infrastructure
Dune stabilization projects at
Twin Lakes State Beach
Flooding,
Storm,
SLR
Groundswell
Coastal
Ecology,
CADPR, CA
Native Plant
Society and
P&R
a. Describe proposed mitigation/adaption measures, and how vulnerabilities will be addressed
The description of the proposed mitigation/adaption measures for the two primary vulnerable assets in and those adjacent to the State Grant Area is outlined in Section 3. An excerpt from theWharf Mater Plan also adds more detail on operational measures aimed at bolstering resilience:
“2. Strengthen the Wharf and increase its resiliency to extreme weather conditions, seismic events and sea level rise.
• Continue the regular maintenance and on-going replacement of piles, bents, stringers, and decking to enhance the condition and longevity of the Wharf provide for the continuity of stringers and caps and additional bolts or side plates at unsupported cap splice locations.
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• Increase the number of vertical piles in the transverse direction (width of the Wharf) in conjunction with public improvements that benefit public access, recreational activities and boating to increase the Wharf's strength to resist forces imposed by storm waves and earthquakes.
• Provide outriggers in the deeper water area between Bents 170 and 179 connected to the existing horizontal ledgers to most effectively enhance the rigidity and reduce the sway of the Wharf in extreme weather conditions or during a seismic event.
• Limit truck traffic to the greatest extent possible to minimize damage to the paving and substrate of the Wharf.”
According to the CAP Update, prioritizing coastal protection structures for upgrade and replacement was identified as a “very high priority,” and investigating beach nourishment was identified as a “high” priority. With regard to upgrading and replacing coastal protection structures, proposed activities include:
“developing coastal bluff and beach management policies [LCP update] and plans [West Cliff Drive Shoreline Adaptation and Management Plan] that outline short and long term coastal bluff management strategies that can help establish protection and adaptation priorities.
Future allocation of public funds to protect current infrastructure is to be prioritized and weighed against the longevity and feasibility of the proposed structures. Consider coastal armoring, beach nourishment, groin construction and retreat. Prioritize protecting public beaches, public coastal access/use, and integration of ecological functionality.” When considering beach nourishment strategies, the CAP Update proposes the following:
“small to medium scale beach nourishment has been found to be a cost effective, although temporary, adaptation measure when material is available. Strategic placement of river sediment at a site north of Santa Cruz could artificially increase local littoral sand abundance, which would be passively distributed down coast, benefitting subtidal areas along West Cliff as well as Cowell and Main beaches [State Grant Area].”
Based on the CAP Update, a plan to allow for beach nourishment from the San Lorenzo River has been designed, and is currently pending suitable funding.
b. Describe the timeframe for implementation of such measures Table 3, Adaptation Strategies for the Wharf and Cowell/Main/Seabright Beach from Section 1 includes the timeframe for implementation of each
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measure. Prior to the completion of the draft CAP Update in August 2017, the approach to adaptation implementation was on a project by project basis as planning documents set forth a long-term vision for adaptation but due to scientific uncertainty did not contain details. This approach was also not integrated across the City, creating fractured coastal resource management.
With the CAP Update and its inclusionary and ongoing internal and external stakeholder engagement there is a more integrated, connected, and longterm approach outlined for adaptation with well defined next steps and active work on them.
As part of this approach, the City is working to develop a landscape scale plan and a monitoring/triggers/threshold program that will direct implementation in a strategic and cost effective manner. However, until these items are complete (pending funding) and a sustainable funding source for implementation is identified (in addition to City General Fund budget in capital improvement funds allocated), measure implementation will proceed on a project by project basis. The City continues to pursue external funding from the many sources available to fund this foundational work in addition to projects that implement adaptation measures. The City acknowledges that there is substantial funding for climate change adaptation and resilient infrastructure, and has been actively pursuing it. In addition, the City has been involved in a number of grant opportunities seeking to fund elements of this connected approach, which include the following:
Ocean Protection Council: Sustained Bar Built Estuary Project on the San Lorenzo River (Proposal pending evaluation and award announcement)
Strategic Growth Council: Evaluating the Implications of Alternate Sea Level Rise Adaptation Strategies to inform Monterey Bay Coastline Resiliency (Partnership with EcoAdapt; proposal pending evaluation and award announcement)
Strategic Growth Council: Establishing a Santa Cruz Climate and Equity Center (Partnership with University of California, Santa Cruz; proposal pending evaluation and award announcement)
PG&E’s Better Together Resilient Communities grant: Toward a climate resilient urban canopy in the City of Santa Cruz and City of Watsonville (Parternship with Central Coast Wetlands Group; proposal pending evaluation and award announcement)
PG&E’s Better Together Resilient Communities grant: Integrating Extreme Heat into Climate Resilience Planning for California's Central Coast” (Parternship with the Central Coast Climate Collaborative and
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RAND Corporation; proposal pending evaluation and award announcement)
National Federal Wildlife Foundation’s National Coastal Resilience Fund grant: Natural Infrastructure Solutions to Protect Santa Cruz’s Beaches (Partnership with Groundswell Coastal Ecology; proposal in preparation and due August 7, 2018)
With respect to the Wharf, The Wharf Master Plan and Engineering Report were accepted by the Santa Cruz City Council on October 28, 2014. At present, the City is in the process of preparing a CEQA Environmental Impact Report (EIR) which has been delayed. The initial improvements are being funded from previously issued former Redevelopment Agency bond proceeds which were released by the State Legislature in 2014.
The longer term implementation of the Wharf Master Plan is dependent on development of project financing and available grant funding. A number of options are under consideration including a local bond to fund the strengthening components of the Wharf Master and Engineering Plans. This would require a 2/3 vote of approval by City residents. Another option is a revenue bond; however in the case of the Santa Cruz Wharf, its annual rental income has historically not been sufficient to cover its operation and maintenance costs. Therefore, the Wharf expenses are currently paid from the City General Fund.
c. Describe plans to monitor impacts of sea-level rise and climate changes, as well as effectiveness of mitigation and adaption measures
A specific action prioritized in the CAP Update is establishing a monitoring, thresholds and trigger program to guide the implementation of adaptation measures. There is an emerging monitoring program being established in an ad hoc fashion (rivermouth sea-level sensor and other river/sea-level surface sensors) that will become part of a broader monitoring threshholds and triggers program. For example, according to the CAP Update, to prepare for SLR, the City proposed to install permanent tide gauges to monitor sea level or work conjunctively with agencies that intend to install gauges, and to install ground water monitoring wells to track water table rise. The City will partner with the County on installing a tidal gauge in Santa Cruz since the nearest are in Moss Landing and San Francisco, preventing localized condition monitoring.
This monitoring program will be formally designed and implemented to cover a large portion of the City’s coastline through the West Cliff Drive Shoreline Adaptation and Management Plan project that is currently funded and
22.52 47
partially within—and adjacent to—the State Grant Area, and will be expanded to the entire city as funding and resources allow. d. Describe any regional partnerships the trustee is part to or intending to form that would address sea-level and climate change vulnerability or increase resiliency
The City actively participates in the Monterey Bay Regional Climate Action Compact (Compact), an action network of government agencies, educational institutions, private businesses, non-profit, and non-governmental organizations who are committed to working collaboratively to address the causes and effects of global climate change through local initiatives that focus on economic vitality and reduce environmental impacts for the region.
The City’s Sustainability and Climate Action Manager facilitates the Compact’s Intergovernmental Committee and is also a Steering Committee member of the newly formed Central Coast Climate Collaborative (4C). 4C is a membership organization fostering a network of local and regional community leaders throughout six central coast counties to address climate change mitigation and adaptation. 4C engages with other collaboratives throughout the state formed for the same purpose and recently hosted a well attended Climate Resilience Workshop (April, 2018). The City’s Sustainability and Climate Action Manager is also a member of the Local Stewardship Council for the Santa Cruz World Surfing Reserve where one of three foci is on sea level rise and its impact on surfing resources.
The City also relies on a vast network of residents, non-profit partners, technical consultants, advocacy groups, and academics who are interested in advancing mutually beneficially climate resilience goals. These groups meet though the City’s Climate Action Task Force Adaptation Subcommittee and the San Lorenzo River 2025 working group as well as other ad hoc collaborations.
22.53 2185 N. California Blvd., Suite 500
Walnut Creek, CA 94596
SANTA CRUZ WHARF - END
JOB NO. 7416/11 27 FEBRUARY 2025
20' 0' 20' 40'
1"=20'
160
165
167
170
ALT 1 - REBUILD EXISTING
REBUILD END TO ORIGINAL
APPROXIMATELY 15,200 SF
80' 190'
183
BENT NO., TYP
Alt. 1
Rough Order of Magnitude Cost
High: $11,000,000
Low: $ 8,500,000
Notes:
1. ROM costs are early estimates,
without much detail, occurring
early in the project life cycle.
Actual costs can vary +/- 50%.
2. Costs shown are based upon
the 2023 Capitola Wharf
Widening project bid results,
escalated to 2025 including
recent import tariffs.
22.54 2185 N. California Blvd., Suite 500
Walnut Creek, CA 94596
SANTA CRUZ WHARF - END
JOB NO. 7416/11 27 FEBRUARY 2025
20' 0' 20' 40'
1"=20'
160
165
167
170
ALT 2 - CUTOFF AT BENT 169
CUTOFF BEYOND
BENT 169
OPTION: REMOVE
DECKING AND LEAVE
PILES AND CAPS AS
INTERPRETIVE
ELEMENT
PEDESTRIAN AREA
END OF
WHARF
BENT NO., TYP
Alt. 2
Rough Order of Magnitude Cost
High: $310,000
Low: $240,000
Notes:
1. ROM costs are early estimates,
without much detail, occurring
early in the project life cycle.
Actual costs can vary +/- 50%.
2. Costs shown are based upon
the 2023 Capitola Wharf
Widening project bid results,
escalated to 2025 including
recent import tariffs.
22.55 2185 N. California Blvd., Suite 500
Walnut Creek, CA 94596
SANTA CRUZ WHARF - END
JOB NO. 7416/11 27 FEBRUARY 2025
20' 0' 20' 40'
1"=20'
160
165
167
170
ALT 3 - CUTOFF AT BENT 167 DEMO 60'
END OF
WHARF
BENT NO., TYP
Alt. 3
Rough Order of Magnitude Cost
High: $840,000
Low: $650,000
Notes:
1. ROM costs are early estimates,
without much detail, occurring
early in the project life cycle.
Actual costs can vary +/- 50%.
2. Costs shown are based upon
the 2023 Capitola Wharf
Widening project bid results,
escalated to 2025 including
recent import tariffs.
22.56 2185 N. California Blvd., Suite 500
Walnut Creek, CA 94596
SANTA CRUZ WHARF - END
JOB NO. 7416/11 27 FEBRUARY 2025
20' 0' 20' 40'
1"=20'
160
165
167
170
ALT 4 - TEE END
55' 80' 60' 45'
BUILD TEE END
5,200 SF
END OF
WHARF
BENT NO., TYP
Alt. 4
Rough Order of Magnitude Cost
High: $4,000,000
Low: $3,100,000
Notes:
1. ROM costs are early estimates,
without much detail, occurring
early in the project life cycle.
Actual costs can vary +/- 50%.
2. Costs shown are based upon
the 2023 Capitola Wharf
Widening project bid results,
escalated to 2025 including
recent import tariffs.
22.57 2185 N. California Blvd., Suite 500
Walnut Creek, CA 94596
SANTA CRUZ WHARF - END
JOB NO. 7416/11 27 FEBRUARY 2025
20' 0' 20' 40'
1"=20'
160
165
167
170
ALT 5 - RESTORE TO BENT 171
REBUILD END TO BENT 171
APPROXIMATELY 1,100 SF
171
END OF
WHARF
BENT NO., TYP
Alt. 5
Rough Order of Magnitude Cost
High: $870,000
Low: $670,000
Notes:
1. ROM costs are early estimates,
without much detail, occurring
early in the project life cycle.
Actual costs can vary +/- 50%.
2. Costs shown are based upon
the 2023 Capitola Wharf
Widening project bid results,
escalated to 2025 including
recent import tariffs.
22.58 WHARF END REPAIR
ALTERNATE RENDERINGS
CHOOSESANTACRUZ.COM
APRIL 22, 2025
22.59 ALT 1 – FULL REBUILD
EXISTING WHARF 22.60 MASTER PLAN ALIGNMENT
ALT 1 – FULL REBUILD
22.61 ALT 1 – FULL REBUILD
22.62 ALT 1 – FULL REBUILD
22.63 ALT 1 – FULL REBUILD
22.64 ALT 1 – FULL REBUILD
22.65 ALT 1 – FULL REBUILD
22.66 ALT 1 – FULL REBUILD
22.67 ALT 1 – FULL REBUILD
22.68 ALT 2 – CUT TO BENT 169
EXISTING WHARF 22.69 MASTER PLAN ALIGNMENT
ALT 2 – CUTOFF BEYOND BENT 169
22.70 ALT 2 – CUTOFF BEYOND BENT 169
22.71 ALT 2 – CUTOFF BEYOND BENT 169
22.72 ALT 2 – CUTOFF BEYOND BENT 169
22.73 ALT 2 – CUTOFF BEYOND BENT 169
22.74 ALT 2 – CUTOFF BEYOND BENT 169
22.75 ALT 2 – CUTOFF BEYOND BENT 169
22.76 ALT 2 – CUTOFF BEYOND BENT 169
22.77 ALT 3 – CUT TO BENT 167
EXISTING WHARF 22.78 MASTER PLAN ALIGNMENT
ALT 3 – CUTOFF BEYOND BENT 167
22.79 ALT 3 – CUTOFF BEYOND BENT 167
22.80 ALT 3 – CUTOFF BEYOND BENT 167
22.81 ALT 3 – CUTOFF BEYOND BENT 167
22.82 ALT 3 – CUTOFF BEYOND BENT 167
22.83 ALT 3 – CUTOFF BEYOND BENT 167
22.84 ALT 3 – CUTOFF BEYOND BENT 167
22.85 ALT 3 – CUTOFF BEYOND BENT 167
22.86 ALT 4 – TEE END
EXISTING WHARF 22.87 MASTER PLAN ALIGNMENT
ALT 4 – TEE END
22.88 ALT 4 – TEE END
22.89 ALT 4 – TEE END
22.90 ALT 4 – TEE END
22.91 ALT 4 – TEE END
22.92 ALT 4 – TEE END
22.93 ALT 4 – TEE END
22.94 ALT 4 – TEE END
22.95 ALT 5 – RESTORE TO 171
EXISTING WHARF MASTER PLAN ALIGNMENT
SEALION
VIEWING HOLE
22.96 ALT 5 – RESTORE TO BENT 171
22.97 ALT 5 – RESTORE TO BENT 171
22.98 ALT 5 – RESTORE TO BENT 171
22.99 ALT 5 – RESTORE TO BENT 171
22.100
ALT 5 – RESTORE TO BENT 171
22.101
ALT 5 – RESTORE TO BENT 171
22.102
ALT 5 – RESTORE TO BENT 171
22.103
ALT 5 – RESTORE TO BENT 171
22.104
RECOMMENDATION 22.105
City Council
AGENDA REPORT
DATE: 04/03/2025
AGENDA OF: 04/22/2025
DEPARTMENT: Parks and Recreation
SUBJECT: Sister Cities Regular Meetings Time Changes to Committee Bylaws (PR) LOCATION: Citywide
RECOMMENDATION: Motion to approve an amendment of the Sister Cities Committee bylaws that will change the regular meeting start time for 7:00 pm to 6:00 pm.
BACKGROUND: At their March 10, 2025, meeting, the Sister Cities Committee (Committee) voted (7-0) to amend their bylaws to change their regular meeting time from 7:00 pm to 6:00 pm to better accommodate public participation and member schedules. The Committee considered several alternative start times, as described below:
Alternatives:
a. 5:00 pm – This would allow for an earlier departure and meeting end time but would not be as convenient for greater public participation.
b. 6:00 pm – This would allow for those members of the public that work or attend school during regular business hours to attend future meetings at a more convenient time, which also includes regular members of the Committee.
DISCUSSION: After careful deliberation, the Committee underscored the need for a balanced approach to both an accessible public meeting time, as well as with their personal schedules. It was decided, and moved, that the Committee bylaws should be updated to reflect a regular meeting time of 6:00 pm.
As part of the process for updating bylaws, which can be amended by the Committee, Council would be required to approval any final revisions or updates under consideration.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION: N/A.
HEALTH IN ALL POLICIES (HiAP): Staff recommends that Council consider the amended start time as members of the public that wish to access the Committee may do so in accordance with HIAP inclusive decision-making standards, as well as equitable approach to improve
23.1 accessible meeting public meetings, as the new start time would allow for after business hours access and before mealtime.
FISCAL IMPACT:
1. The recommendation in this report impacts the General Fund: No
2. This recommendation requires a budget adjustment: No
3. The recommendation creates an on-going expenditure commitment: No FISCAL IMPACT DESCRIPTION: None.
Prepared By:
Tremain Hedden-Jones
Superintendent of Recreation
Submitted By:
Tony Elliot
Director of Parks &
Recreation
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. BYLAWS – TRACK CHANGES.DOC
23.2 BYLAWS
of the
Sister Cities Committee
City of Santa Cruz, California
Under authority of applicable statutes of the State of California, and the City Charter of the City of Santa Cruz, California, for the purpose of establishing rules and regulations governing the organization and procedures of the Sister Cities Committee of the City of Santa Cruz, CA
Adopted February 28, 2011
Approved by City Council March 22, 2011
Amended March 28, 2011
Amended by Commission, Approved by Council December 14, 2021 Amended by Commission, Approved by Council January 9, 2024 Amended by Commission, Approved by Council April 22, 2025
23.3 Bylaws of the City of Santa Cruz Sister Cities Committee Page 2 Sister Cities Committee Bylaws
Table of Contents
ARTICLE I – NAME AND/OR AUTHORITY...........................................................................4 ARTICLE II – PURPOSE.............................................................................................................4 ARTICLE III – DUTIES AND RESPONSIBILITIES ...............................................................4 ARTICLE IV – MEMBERSHIP...................................................................................................4 Section 1. Membership.....................................................................................................................4 Section 2. Qualifications...................................................................................................................4 Section 3. Application for Membership............................................................................................4 Section 4. Method of Appointment ..................................................................................................5 Section 5. Good Standing and Reporting of Absences.....................................................................5 Section 6. Termination .....................................................................................................................5 Section 7. Ex-Officio Membership “Optional” ................................................................................5 ARTICLE V – TERM OF OFFICE .............................................................................................5 Section 1. Term ................................................................................................................................5 Section 2. Membership Year ............................................................................................................6 Section 3. Length of Term................................................................................................................6 Section 4. Dual Service ....................................................................................................................6 ARTICLE VI – OFFICERS AND ELECTIONS ........................................................................6 Section 1. Officers............................................................................................................................6 Section 2. Election of Officers .........................................................................................................6 Section 3. Term of Office.................................................................................................................6 Section 4. Nominations ....................................................................................................................6 Section 5. Voting..............................................................................................................................7 Section 6. Vacancy of an Officer .....................................................................................................7 Section 7. Removal of Elected Officers ...........................................................................................7 Section 8. Duties of the Chair ..........................................................................................................7 Section 9. Duties of the Vice Chair ..................................................................................................7 Section 10. Duties of the Acting Chair.............................................................................................7 ARTICLE VII – STAFF SUPPORT.............................................................................................8 Section 1. Staff .................................................................................................................................8 Section 2. Staff Relationship to the Advisory Body.........................................................................8 ARTICLE VIII – MEETINGS......................................................................................................9 Section 1. Time and Location of Meetings.......................................................................................9 Section 2. Cancellation.....................................................................................................................9 Section 3. Special Meetings .............................................................................................................9
23.4 Bylaws of the City of Santa Cruz Sister Cities Committee Page 3 ARTICLE IX – CONDUCT OF MEETINGS .............................................................................9 Section 1. Compliance with the Brown Act and Council Policies ...................................................9 Section 2. General Conduct of Meetings..........................................................................................9 Section 3. How Items Are Placed on the Agenda.............................................................................9 Section 4. Quorum .........................................................................................................................10 Section 5. Absence of a Quorum....................................................................................................10 Section 6. Agenda ..........................................................................................................................10 Section 7. Order of Business ..........................................................................................................10 ARTICLE X – MOTIONS ..........................................................................................................10 Section 1. Call for Motion..............................................................................................................10 Section 2. Seconding a Motion ......................................................................................................10 Section 3. Lack of a Second ...........................................................................................................10 Section 4. Discussion/Debate .........................................................................................................10 Section 5. Time Limits on Discussion/Debate ...............................................................................10 Section 6. Amending a Motion ......................................................................................................11 Section 7. Withdrawing a Motion ..................................................................................................11 Section 8. Motion to Table.............................................................................................................11 Section 9. Results of Voting...........................................................................................................11 ARTICLE XI – VOTING............................................................................................................11 Section 1. Statements of Disqualification.......................................................................................11 Section 2. Voice Vote.....................................................................................................................12 Section 3. Roll Call Vote................................................................................................................12 Section 4. Sealed Ballot Votes .......................................................................................................12 Section 5. Adoption of ...................................................................................................................12 Section 6. Tie Votes .......................................................................................................................12 ARTICLE XII – REPORTS........................................................................................................12 Section 1. Agenda Reports to Advisory Body ...............................................................................12 Section 2. Committee Reports........................................................................................................13 Section 3. Preparation of Advisory Body-Generated City Council Agenda Reports.....................13 ARTICLE XIII – RECORD KEEPING.....................................................................................13 Section 1. Maintenance of Records................................................................................................13 Section 2. Action Agenda...............................................................................................................13 Section 3. Minutes..........................................................................................................................13 Section 4. Electronic Recording of Meetings.................................................................................13 ARTICLE XIV – COMMITTEES .............................................................................................14 Section 1. Ad Hoc Committees ......................................................................................................14 Section 2. Standing Committees ....................................................................................................14 Section 3. Staff Support to Committees .........................................................................................14 Section 4. Appointments ................................................................................................................14 Section 5. Committee Meetings .....................................................................................................14 ARTICLE XV – AMENDMENTS..............................................................................................15 ARTICLE XVI – ADOPTION OF BYLAWS ...........................................................................15
23.5 Bylaws of the City of Santa Cruz Sister Cities Committee Page 4 Sister Cities Committee Bylaws
ARTICLE I – NAME AND/OR AUTHORITY
The Name of this organization shall be the Sister Cities Committee of the City of Santa Cruz, California; hereinafter referred to as the Committee or the Advisory Body.
ARTICLE II – PURPOSE
The Sister Cities Committee was first established to coordinate activities with the Sister Cities of Santa Cruz per Resolution NS-13,962, adopted on August 5, 1980. The Sister Cities Committee was re-established to coordinate activities with the Sister Cities of Santa Cruz per Resolution NS-15,537A, adopted on October 25, 1983. The objects and purposes of the Committee shall be:
1. To encourage the people of the City of Santa Cruz and the people of its Sister Cities to understand one another as individuals, as members of their community, as citizens of their country, and as part of the family of nations.
2. To foster continuing relationships of mutual concern between the people of the City of Santa Cruz and the people of its Sister Cities.
ARTICLE III – DUTIES AND RESPONSIBILITIES
The Sister Cities Committee shall have the ability, as vested by the City Council, and be required to:
Make recommendations concerning proposed Sister Cities; Undertake studies in the area of international relations; Act in an advisory capacity to the City Council in all matters pertaining to Sister Cities; Receive complaints pertaining to Sister Cities;
Review and make recommendations to the City Council pertaining to Sister Cities; Review, monitor, and make long-range recommendations concerning Sister Cities; Hear and decide matters relating to Sister Cities; and Perform other duties as may from time to time be prescribed by the City Council.
ARTICLE IV – MEMBERSHIP
Section 1. Membership
The Sister Cities Committee shall consist of seven (7) Sister Cities Committee members, hereinafter referred to as members.
Membership, term of office, and procedures for removal of members and the filling of vacancies shall be as established by City Ordinance or by the City Council.
Section 2. Qualifications
Committee members shall be residents of the City of Santa Cruz with the exception of a maximum of three (3) members who may be non-residents of the City provided that the non23.6 Bylaws of the City of Santa Cruz Sister Cities Committee Page 5 resident committee members have experience in international affairs, business, education or cultural pursuits.
Section 3. Application for Membership
Prospective members shall file an application in the office of the City Clerk.
Section 4. Method of Appointment
Committee members shall be appointed at-large by the City Council.
Section 5. Good Standing and Reporting of Absences
Councilmembers shall receive annual attendance reports prepared in the City Clerk's Department. Absences will be identified as "with notification" or "without notification." An absence is considered as "with notification" if the member notifies the chairperson or the staff prior to the meeting. If there has been no prior notification, the absence is considered "without notification." It is important to notify staff of any absences for the purposes of determining a quorum. Advisory body members are expected to attend meetings regularly.
Each member of the Committee is allowed one absence per calendar year, with the exception of meetings missed while conducting Sister Cities business.
It is the responsibility of staff of an advisory body to bring serious attendance issues to the attention of the Mayor or City Clerk prior to reaching the limit, if possible. If either through study of the annual attendance report or through other channels, the Mayor learns that a member has more than the allowable number of absences, the Mayor may notify the member or chairperson, that action may be initiated by Council to remove the member from the advisory body. The Mayor may choose to postpone or withhold notification to Council in unusual circumstances: for example, if the member is actively performing work for the advisory body outside of the regular meetings or is involved in subcommittee work.
Section 6. Termination
After three meetings following appointment to the Advisory Body, each member shall be subject to removal by motion of any Councilmember, adopted by at least four affirmative votes.
Section 7. Ex-Officio Membership “Optional”
The Sister Cities Committee may find that, because of the complexity of its work, it is desirable to add member(s) at-large to the Advisory Body to serve as non-voting ex-officio members to lend other opinions or expertise to the work of the Advisory Body. The City Council will authorize the Chair of the Advisory Body to nominate member(s)-at-large for Council approval to be non-voting ex-officio members for a determined period of time.
ARTICLE V – TERM OF OFFICE
Section 1. Term
Term of office for each member shall be four years. A member may be appointed to complete an unexpired term. A Member may continue to serve until their successor has been appointed.
23.7 Bylaws of the City of Santa Cruz Sister Cities Committee Page 6 Section 2. Membership Year
A membership year shall be from February 1st to January 31st of each year.
Section 3. Length of Term
A member shall not serve more than two consecutive full four-year terms. Upon completion of a member's eighth consecutive year of service, that member will be ineligible for reappointment for a period of two years. Members who have six years or less at the time their term expires are eligible for reappointment.
Section 4. Dual Service
No member shall be eligible to serve on two Advisory Bodies unless one is established for less than 13 months.
ARTICLE VI – OFFICERS AND ELECTIONS
Section 1. Officers
Officers of the Advisory Body shall consist of a Chair and Vice Chair.
Section 2. Election of Officers
As soon as is practicable following the first day of February of every year, there shall be elected from among the membership of the Advisory Body a Chair and Vice Chair.
Section 3. Term of Office
The term of office for the Chair and Vice Chair is one calendar year. Officers may not serve in the same position for more than two consecutive years.
Section 4. Nominations
The Chair will open the floor to nominations. Any member may nominate a candidate from the membership for the position of Chair or Vice Chair; nominations need not be seconded.
A member may withdraw their name if placed in nomination, announcing that, if elected, s/he would not be able to serve; but s/he shall not withdraw in favor of another member.
Once the nominations are complete, the Chair will ask for a motion to close the nominations; a second of, and vote on, the motion is required.
The Chair then declares that it has been moved and seconded that the nominations be closed, and the members proceed to the election.
23.8 Bylaws of the City of Santa Cruz Sister Cities Committee Page 7 Section 5. Voting
Voting may be by voice vote or by roll call vote.
The candidate who receives a majority of the votes is then declared to be legally elected to fill the office of Chair, and will immediately chair the remainder of the meeting.
The same procedure is followed for the election of Vice Chair.
Section 6. Vacancy of an Officer
Should a vacancy occur, for any reason, in the office of Chair or Vice Chair prior to the next annual election, a special election shall be held to fill the vacant office from among the membership. That member shall serve until a new appointment has been made.
Section 7. Removal of Elected Officers
The Chair or Vice Chair may be removed by a majority vote of the full Advisory Body at a regularly scheduled meeting of the Advisory Body, when all appointed members are present, or at a special meeting convened for that purpose at which a quorum is present. Any officer removed ceases to hold the office once the vote has been tallied and announced. If the Chair is removed, the Vice Chair shall become the new Chair. An election for the Vice Chair shall then be agendized for the next meeting.
Section 8. Duties of the Chair
The Chair shall preside at all regular meetings and may call special meetings. The Chair shall decide upon all points of order and procedure during the meeting; their decision shall be final unless overruled by a vote of the Advisory Body, in compliance with Article IX, Section 2, “General Conduct of Meetings.” The Chair may not make motions, but may second motions on the floor. The Chair acts as primary contact for staff and shall represent the Advisory Body before City Council whenever the Advisory Body or Council considers it necessary. The Chair and staff shall jointly set the meeting agenda.
Section 9. Duties of the Vice Chair
The Vice Chair shall assume all duties of the Chair in the absence or disability of the Chair.
Section 10. Duties of the Acting Chair
In case of absence of both the Chair and the Vice Chair from any meeting, an Acting Chair shall be elected from among the members present, to serve only during the absence of the Chair and Vice Chair.
23.9 Bylaws of the City of Santa Cruz Sister Cities Committee Page 8 ARTICLE VII – STAFF SUPPORT
Section 1. Staff
Staff support and assistance is provided, but advisory bodies do not have supervisory authority over City employees. While they may work closely with advisory bodies, staff members remain responsible to their immediate supervisors and ultimately to the City Manager and Council.
The Director of Parks and Recreation, or their designee, shall act as Liaison on behalf of the City and shall designate a secretary to the commission (Secretary) to assist and support the Advisory Body. Staff shall attend all regular and special Advisory Body meetings.
The Liaison shall:
work closely with the Chair between meetings to identify and schedule agenda topics; be responsible for coordination of reports, studies, and recommendations as are necessary to assist the Advisory Body in the conduct of its business; enlist the assistance of other departments as required; make recommendations, prepare reports and proposals to the Advisory Body; represent the Advisory Body at meetings, presentations, and other public functions as requested; and
oversee administrative tasks.
The Secretary shall:
ensure compliance with all Brown Act postings and noticing requirements; record minutes of the meetings in accordance with the guidelines established in the “Preparation of Minutes” section of the City Councilmembers' Handbook; maintain proper records and files pertaining to Advisory Body business; receive and record all exhibits, petitions, documents, or other materials presented to the Advisory Body in support of, or in opposition to, any question before the Advisory Body; sign all notices prepared in connection with Advisory Body business; attest to all records of actions, transmittals, and referrals as may be necessary or required by law.
Section 2. Staff Relationship to the Advisory Body
Given limited staff resources, the Chair or individual members shall not make separate requests of staff without approval of the Advisory Body. If a member has a research or report request, it shall be brought to the Advisory Body for discussion, consideration, and recommendation prior to making the request of staff. If not approved by the Advisory Body, the individual member shall be responsible for their own research or report.
The Liaison and the Chair shall jointly set the meeting agenda. The Secretary shall schedule appeals and public hearings according to legal requirements.
23.10 Bylaws of the City of Santa Cruz Sister Cities Committee Page 9 ARTICLE VIII – MEETINGS
Section 1. Time and Location of Meetings
The Advisory Body will hold its regular meeting on the 2nd Monday of January, March, May, July, September and November, which shall begin at 7:006:00 p.m. in the Council Chambers and will adjourn no later than 9:00 p.m., unless the Chair, with concurrence of the Advisory Body, extends the time of adjournment.
If the scheduled date for a regular meeting falls on a holiday, such meeting shall be rescheduled in accordance with Council policy.
Section 2. Cancellation
If a majority of the membership deems it necessary or desirable, a scheduled regular meeting may be cancelled or rescheduled upon giving notice, unless a public hearing has previously been noticed.
Section 3. Special Meetings
The Chair of the Advisory Body, staff, or a majority of the membership of the Advisory Body may call a special meeting. Notice of such meeting shall state the purpose or the business to be transacted during such special meeting. No other business may be transacted at such special meeting other than as stated in the notice. Oral Communications are not required at special meetings as long as a statement appears on the agenda identifying that there will be no Oral Communications, but that members of the public will have the opportunity to address the Advisory Body on item(s) on the agenda.
ARTICLE IX – CONDUCT OF MEETINGS
Section 1. Compliance with the Brown Act and Council Policies All regular, special, and adjourned meetings of the Advisory Body shall be open meetings to which the public and the press shall be admitted in compliance with the Brown Act. Meetings will be held at City facilities which are accessible to persons with disabilities.
Section 2. General Conduct of Meetings
Points of order and conduct, including those not addressed by these Bylaws, shall be settled by the Chair, unless overruled by a majority vote of the Advisory Body. Points of order and conduct shall comply with the Brown Act, these Bylaws, and the City Councilmembers’ Handbook. The Chair will consult with staff as necessary. Unresolved issues shall be referred to the City Attorney and continued to a future meeting.
Section 3. How Items Are Placed on the Agenda
A request to have an item placed for consideration on a future agenda may be made by staff, any Advisory Body member or a member of the public. The Chair and staff will consider the validity (within the approved scope of work) and urgency of the request and determine when and if that item should be placed on an Advisory Body agenda. Issues can be referred to an advisory body by the City Council and may have time sensitive deadlines. The items must comply with the procedures in Article XII, Section 1, “Agenda Reports to Advisory Body.”
23.11 Bylaws of the City of Santa Cruz Sister Cities Committee Page 10 Section 4. Quorum
A quorum of the Sister Cities Committee shall consist of four (4) whether or not there are vacancies on the Advisory Body.
Section 5. Absence of a Quorum
In the absence of a quorum at any meeting, such meeting shall be adjourned to the next regular meeting date by the Chair, Vice Chair, or staff.
A meeting may be declared adjourned for lack of a quorum after a 15-minute period has elapsed from the scheduled time of the start of the meeting. A meeting may also be declared adjourned in advance, if absence notifications received by staff provided for lack of a quorum. Adjournment may be declared by any member or staff.
Section 6. Agenda
The Chair and staff shall jointly set the meeting agenda and its format shall conform to the template set by Council Policy.
Section 7. Order of Business
The Chair or a majority vote of the Advisory Body may change the order of business.
ARTICLE X – MOTIONS
Section 1. Call for Motion
Upon conclusion of preliminary discussion, any member other than the Chair may place a motion on the floor. The motion shall contain the proposed action.
Section 2. Seconding a Motion
The Chair shall receive all motions and shall call for a second to each motion. The Chair may second a motion.
Section 3. Lack of a Second
If, after a reasonable time, no second has been made, the motion shall be declared dead for lack of a second, and the Chair shall state this. This shall not be considered an action of the Advisory Body and shall not be included in the minutes.
Section 4. Discussion/Debate
After a motion has been made and seconded, the Chair shall call for a discussion of the question.
All discussion shall be limited to the motion on the floor. At the close of the discussion, the Chair shall put the matter to a vote.
Section 5. Time Limits on Discussion/Debate
The Chair may, at their discretion, limit debate of any motion; except that each member shall have the opportunity to speak.
23.12 Bylaws of the City of Santa Cruz Sister Cities Committee Page 11 Section 6. Amending a Motion
A motion to amend may be made by any member to revise a motion on the floor; but it cannot be a freestanding motion on its own, nor can it substitute for a main motion. The motion to amend must be voted upon, unless the maker and the second accept it as a friendly amendment, and, if it passes, it then becomes part of the main motion.
Section 7. Withdrawing a Motion
Any motion may be withdrawn by the maker and the second and shall not be included in the meeting minutes.
Section 8. Motion to Table
A motion to table may be made to suspend consideration of an item that appears on a meeting agenda for reasons of urgency or to end an unproductive discussion. A motion to table is not in order when another member has the floor. A motion to table requires a second, is not debatable, is not amendable, requires a majority vote for passage, and, if adopted, cannot be reconsidered at the meeting at which it is adopted. Members will refrain from using a motion to table as a means of capriciously limiting debate among members, to suppress a minority of the Advisory Body, or to avoid public input on an agenda item under consideration by the Advisory Body.
Section 9. Results of Voting
The Chair shall state the results of each vote, e.g., “The motion passes by a vote of five to two.” ARTICLE XI – VOTING
Section 1. Statements of Disqualification
Section 607 of the City Charter states that “...All members present at any meeting must vote unless disqualified, in which case the disqualification shall be publicly declared and a record thereof made.” No member may abstain from voting on any item, except on the approval of the minutes, when that member was absent.
The City of Santa Cruz has adopted a Conflict of Interest Code, and Section 8 of that Code states that “no person shall make or participate in a governmental decision which s/he knows or has reason to know will have a reasonably foreseeable material financial effect distinguishable from its effect on the public generally.”
Any member who has a disqualifying interest on a particular matter shall do all of the following:
1) Publicly identify the financial interest that gives rise to the conflict of interest or potential conflict of interest in detail sufficient to be understood by the public, except that disclosure of the exact street address of a residence is not required; 2) Recuse themselves from discussing and voting on the mater, or otherwise acting in violation of government code Section 87100;
3) Leave the room until after the discussion, vote, and any other disposition of the matter is concluded unless the matter has been placed on the portion of the agenda reserved for uncontested matters;
23.13 Bylaws of the City of Santa Cruz Sister Cities Committee Page 12 4) Notwithstanding paragraph 3, a public official may speak on the issue during the time that the general public speaks on the issue.
Any question regarding conflicts of interest shall be referred to the City Attorney.
Section 2. Voice Vote
All questions shall be resolved by voice vote. Each member shall vote “Aye” or “No” and the vote shall be so entered into the minutes, noting the vote of each member. A member may state the reasons for their vote, which reasons shall also be entered into the minutes of the meeting.
All members including the Chair shall vote on all matters, except where they have a disqualifying interest.
Section 3. Roll Call Vote
Any member may request a roll call vote, either before or immediately after a voice vote. A roll call vote shall be taken without further discussion. The Advisory Body staff shall call the roll and each member shall state their vote for the record.
Section 4. Sealed Ballot Votes
No Advisory Body shall take a sealed ballot vote in open session.
Section 5. Adoption of
Adoption of a motion shall be made by a simple majority of the members present, except as otherwise provided. The Chair shall restate the vote for the record, e.g., “The motion is approved by a vote of five to two.”
Section 6. Tie Votes
Tie votes will be resolved as follows:
Statement of Disqualification: A tie vote resulting from a Statement of Disqualification of one or more members, with no members absent and no vacancies on the Advisory Body, shall constitute a defeat of the motion.
Absence: A tie vote during the absence of one or more members, or when there is a vacancy on the Advisory Body, shall cause the item to be automatically continued to the next meeting; except that, as to matters on which action must be taken on a date prior to the next meeting, a tie vote shall constitute a denial of the requested action.
Successive Tie Vote: A tie vote at the next meeting on a matter that has been continued as a result of a tie vote shall constitute a denial of the appeal or defeat of the motion.
ARTICLE XII – REPORTS
Section 1. Agenda Reports to Advisory Body
All agenda items require a written report. Written reports serve as the analysis, detail, history, and justification for each agenda item. Reports shall include recommendation(s) and background.
If a report is initiated by an Advisory Body member, a draft of that report shall be provided to staff for formatting at least 10 business days prior to the meeting. Staff shall then format reports
23.14 Bylaws of the City of Santa Cruz Sister Cities Committee Page 13 to be consistent with content, style, and formatting of City Council agenda reports. Items initiated by a committee shall be processed in the same manner. Draft reports not submitted in a timely manner shall be placed on a future agenda.
Section 2. Committee Reports
Committee reports may be verbal or written and may be accompanied by written documentation.
Section 3. Preparation of Advisory Body-Generated City Council Agenda Reports All resolutions and recommendations adopted by the Advisory Body and addressed to the City Council shall be delivered to the Mayor as soon as possible. If the action requests City Council action, the item shall be placed on a future City Council agenda. Agenda reports to the City Council from the Advisory Body shall be written reports consistent with content, style, and formatting of City Council agenda reports.
Additionally, the agenda report shall include a section called analysis, which includes the pros, cons, and foreseeable consequences of the recommendation(s). In the event that staff and the Advisory Body disagree, an analysis of both recommendations shall be included.
ARTICLE XIII – RECORD KEEPING
Section 1. Maintenance of Records
All records shall be maintained according to the City of Santa Cruz Records Retention Schedule.
Section 2. Action Agenda
Action agendas are required for standing Advisory Bodies. An action agenda is an unofficial record of the meeting and shall consist of attendance; meeting start and adjourn times, and a brief description of actions taken. The action agenda shall be made available online within four working days of the meeting.
Section 3. Minutes
Action-only minutes will be produced for all Advisory Body meetings in the same format as that used for City Council meetings as referenced in Council Policy 5.14. Minutes, when approved by the advisory body, are the official record of the meeting and shall consist of attendance, meeting start and adjourn times, a brief description of actions taken, the motion maker and seconder of the motion; and an actual tally of the votes for all actions taken. Advisory Body members who want a particular comment included in the minutes must state “for the record” before making such comment. Minutes shall be reviewed, corrected as appropriate, and or amended and approved by the Advisory Body at a subsequent meeting. Approved minutes are a permanent document and shall be maintained in hard copy in perpetuity in addition to in electronic version.
Subcommittee reports presented orally in a meeting shall be summarized in the minutes.
Section 4. Electronic Recording of Meetings
Proceedings for all standing Brown-Act Advisory Body meetings shall be recorded on CDs or DVRs. The electronic media shall be retained for one year pursuant to the City of Santa Cruz Records Retention Schedule.
23.15 Bylaws of the City of Santa Cruz Sister Cities Committee Page 14 As appropriate and/or when requested by the Advisory Body or City Council, a meeting of the Advisory Body may be video recorded or televised.
Members of the public have the right to make recordings of a meeting without disrupting the proceedings under any circumstances.
ARTICLE XIV – COMMITTEES
Section 1. Ad Hoc Committees
Ad hoc committees are established by an Advisory Body to gather information or deliberate on issues deemed necessary to carrying out the functions and purpose of the Advisory Body. Ad hoc committees generally serve only a limited or single purpose, are not perpetual, and are dissolved once their specific task is completed. An ad hoc committee shall be less than six months in term and shall have fewer members than a simple majority of the membership of the appointing Advisory Body. Ad hoc committees shall bring back information to the Advisory Body in either oral or written form.
Following ad hoc committee input, the Advisory Body shall then discuss, deliberate, and make recommendations on the designated issue, thereby providing the public with the opportunity to participate in the decision-making process. This shall take place in the presence of a quorum of the Advisory Body at a properly noticed public meeting.
Ad hoc committees shall not be subject to the Brown Act. City staff shall not be required to be present at ad hoc committee meetings. All ad hoc committees shall provide a final report to the Advisory Body in lieu of minutes.
Section 2. Standing Committees
Standing committees are bodies established to gather information or deliberate on issues deemed necessary to carrying out the functions and purpose of the Advisory Body. Standing committees are ongoing in nature and are created to deal with issues and make decisions on behalf of the Advisory Body. The public has a right to participate in this process. Standing committees are subject to the Brown Act and staff will provide only such support as to ensure such compliance.
Section 3. Staff Support to Committees
City staff shall normally not be required to attend or provide support for standing or ad hoc committee meetings, unless directed by the department head. All ad hoc committees shall provide a final report to the Advisory Body in lieu of minutes. All standing committees shall provide reports, no less than quarterly, to the Advisory Body.
Section 4. Appointments
The Chair of the Advisory Body may designate or solicit participation for standing and ad hoc committees, unless overruled by a majority vote of the Advisory Body.
Section 5. Committee Meetings
All standing or ad hoc committee meetings shall be held upon call of the Committee Chair.
23.16 Bylaws of the City of Santa Cruz Sister Cities Committee Page 15 ARTICLE XV – AMENDMENTS
A majority of the full membership of the Advisory Body may amend these bylaws, subject to the approval of the City Council.
ARTICLE XVI – ADOPTION OF BYLAWS
Immediately upon favorable vote of not less than four (4) of the full membership of the Sister Cities Committee of the City of Santa Cruz and approval of the City Council, these Bylaws shall be in full force and effect. Any and all previously adopted bylaws are hereby superseded.
These Bylaws shall not be considered or construed as superseding any ordinance or directive of the City Council of the City of Santa Cruz, nor shall they preclude the preparation and adoption of further procedural manuals and policies by which the Advisory Body may direct its activities.
Attest:
Jackie Trumbull, Secretary to the Committee Date
23.17 City Council
AGENDA REPORT
DATE: 04/02/2025
AGENDA OF: 04/22/2025
DEPARTMENT: Parks and Recreation
SUBJECT: Award Contract for Grant Park Playground (PR)
LOCATION: District 1
RECOMMENDATION: Motion to
1) Award the Grant Park Playground equipment contract to Landscape Structures, Inc. (Delano, MN) in the amount of $288,991.47;
2) Authorize the City Manager to execute the contract in a form approved by the City Attorney. 3) Authorize the Parks and Recreation Director to execute change orders with the approved project budget; and
4) Approve of the CEQA analysis contained in this agenda report, including the application of CEQA Guidelines Section 15061 (Common Sense Exemption) and the following categorical exemptions: CEQA Guidelines Section 15301, (Existing Facilities); Section 15302 (Replacement or Reconstruction); Section 15303 (New Construction or Conversion of New Structures); and Section 15304 (Minor Alterations of Land).
BACKGROUND: Council authorized the Grant Park renovation project in the FY2025 CIP budget. The existing Grant Park playground was installed in 2001. Structurally, the playground is approaching the end of its lifespan. Staff have identified several concerns related to the longevity of the existing playground. To meet current requirements under the Americans with Disabilities Act (ADA) along with the American Society for Testing Materials (ASTM) and the Consumer Product Safety Commission (CPSC) parks staff performed extensive public outreach to design play structures that incorporate community feedback and meet or exceed current code compliance standards.
DISCUSSION: Section 3.08.170 of the Municipal Ordinance allows the City to buy from cooperative purchasing agreements when it is in the best interest of the City to do so.
The City of Santa Cruz is a member of Cooperative NPP.Gov and will utilize a cooperative contract to purchase from Landscape Structures Incorporated. NPP Contract No. PS21070 is effective through March 22, 2027. The cooperative contract has been awarded by virtue of a
24.1 public and formal competitive procurement process compliant with state statutes and formal procurement methods. Cooperative agreements result from a procurement process completed by a consortium or single agency that is authorized for use by other municipalities and government agencies.
Landscape Structures Incorporated has successfully completed other projects for the City in the past and staff recommend utilizing this vendor for this improvement to the Grant Park Playground.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:
CEQA provides several “categorical exemptions” which are applicable to categories of projects and activities that the Lead Agency has determined generally do not pose a risk of significant impacts on the environment. The project is exempt from CEQA under CEQA Guidelines Section 15061 (Common Sense Exemption); Section 15301, Existing Facilities (Class 1 Exemption); Section 15302, Replacement or Reconstruction (Class 2 Exemption); Section 15303, New Construction or Conversion of New Structures (Class 3 Exemption); and Section 15304, Minor Alterations of Land (Class 4 Exemption). It can be seen with certainty that there is no possibility that the project may have a significant effect on the environment. The project involves the repair and maintenance of an existing facility and consists of replacement and reconstruction of existing structures where the new ones will be located on the same site with the same purpose and would involve a negligible expansion of use beyond what currently exists. None of the exceptions to exemptions listed in CEQA Guidelines 15300.2 apply.
HEALTH IN ALL POLICIES (HiAP): The project implements Health in All Policies by supporting health and wellness, community connectedness, and equity, while also addressing deferred maintenance and safety. The project also aligns with Parks Master Plan 2030 goals and polices related to creating unique and interesting play structures, distributing them equally throughout the City, and ensuring they are safe and accessible.
FISCAL IMPACT:
1. The recommendation in this report impacts the General Fund: No
2. This recommendation requires a budget adjustment: No
3. The recommendation creates an on-going expenditure commitment: No FISCAL IMPACT DESCRIPTION: This project (c302503) is funded by Parks & Recreation facilities tax in the amount of $288,991.47. This project has no impact on the general fund.
Prepared By:
Mike Godsy
Superintendent of Parks
Submitted By:
Tony Elliot
Director of Parks and
Recreation
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. DRAFT COOPERATIVE PURCHASE AGREEMENT.PDF
24.2 City of Santa Cruz Cooperative Purchase Agreement