Scotts Valley City Council
June 15, 2022

121

EXHIBIT A
Reserve Policies

6. General Fund reserves should be maintained at a minimum of 17% (or two months) of annual operating expenditures, with a target reserve goal of 30% (three months) of annual operating expenditures, and in no event should be planned to fall below 10% in any year in the long-range forecast beyond the first year.

7. Funding assignments in the General Fund will be used to plan for current and future needs including pension contributions, facility planning, IT infrastructure, economic development activities, economic uncertainty, and general purpose.

These assignments reflect the Council’s goals and intent to plan for future investments but are not restricted to their assigned use and can be modified as needed to meet the City’s needs.

8. Recreation Enterprise Fund reserves have no established minimum reserve, but are expected to be fully supported by the General Fund through fund transfers where necessary to the extent that recreation program revenues and facility rental charges are insufficient to cover operating costs.

9. Wastewater Operations Enterprise Fund should maintain a minimum of 50% (or six months) of annual operating expenditures to meet cash flow needs, plus a $1 million emergency reserve for seismic/catastrophic events, both of which would be incorporated in the Wastewater rate model to plan for future wastewater service rates.

Ongoing Resources and Operations

10.Every effort will be made to restore the level of service provided pre-pandemic, understanding that this will require some departments and programs to reorganize, partner with contracted vendors, and/or invest in time-saving technology.

11.Ongoing expenditures should be supported by ongoing revenues.

12.The City will seek to avoid dependence on temporary or unstable revenues to fund mainstream municipal services where possible.

13.Charges for services should maximize recovery of the full cost of related services, including direct operating costs, and other indirect costs such as capital and overhead costs. Recreation services will seek to fully recover costs where possible.

Use of One-Time (Windfall) Resources

14.One-time revenues will not be used for ongoing expenditures on a continuous basis.

15.Unpredictable revenues, such as those derived from the sale of surplus land assets or inventory, will be treated as one-time revenue and will not be used to support ongoing expenses.

122

EXHIBIT A

16.One-time resources may only be used to support one-time expenses such as capital investments or to replenish reserves.

Capital Projects

17.When capital projects are considered, all associated costs - including annual operating expenses, debt services, and any additional future costs - will be identified in order to properly assess future financial impacts.

18.Investment in technology will be continued.

Fiscal Sustainability Planning

19.To the extent that the long-range financial forecast indicates a structural gap between projected annual revenues and expenditures, the City will update its existing fiscal sustainability plan or develop and implement a new fiscal sustainability plan to ensure General Fund reserves stay within the reserve policies established by the City Council.

20.Any structural gap in a long-term financial forecast will be addressed in such a way that it is eliminated no later than the final year of the long-range financial forecast (not to exceed 10 years).

21.Service level reductions will be implemented if other strategies are not possible or cannot be achieved in a timely fashion.

22.There will be a high level of fiscal discipline by the Department Heads, Budget Subcommittee, City Manager and City Council. Every effort will be made to maximize City assets, achieve a high level of funding for employee retirement promises, evaluate cost per service item and develop and maintain contracts with vendors within Scotts Valley.

Debt Management

23.Debt will not be used to support ongoing operations.

24.Capital leases may be used as a mid-term borrowing arrangement for fleet, equipment, and technology uses to the extent that the imputed interest rate in any such capital lease is competitive with existing long-term borrowing rates, considers potential maintenance cost savings for assets under the capital lease, and that such costs are incorporated into the long-range financial forecast.

25.Long-term borrowing (three years or more) for capital facilities will be considered as an appropriate method of financial facilities that benefit more than one generation of users and to the extent that existing reserves or other one-time resources are not available.

123

EXHIBIT A
Other Matters

26.The Wastewater Enterprise fund shall reflect the true cost of operation, including direct and indirect costs of services provided by the General Fund, and be selfreliant upon fees and/or use rates paid by ratepayers.

27.Private development of residential, commercial and/or industrial properties shall pay its fair share of capital improvements that are necessary to serve the development and should not be subsidized by public funds.

28.If the City contributes funds to Non-Profit or Community Partners for other than the purchase of services, it will give priority to one-time initiatives (as opposed to operational subsidies), and to those who demonstrate collaboration with other Community Partners. Funding will be adjusted based upon discretionary revenues available as with other City departments. Loans and advances will not be considered unless extraordinary events occur and must be secured.

124
RESOLUTION NO. 630.42

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY APPROVING THE CITY’S ANNUAL BUDGET FOR FISCAL YEAR 2022-23

AND MAKING APPROPRIATIONS FOR THE AMOUNTS BUDGETED
WHEREAS, the City Manager is responsible for preparing and submitting a City budget for the operation and improvements of the community for City Council approval; and WHEREAS, the City Council has reviewed and evaluated the proposed budget submitted by the City Manager; and
WHEREAS, the community has had an opportunity to review and make additional suggestions regarding the proposed annual budget to the City Council.

NOW, THEREFORE, BE IT RESOLVED AND ORDERED as follows:

1. The City of Scotts Valley’s FY 2022-23 Annual Budget for the fiscal year ending June 30, 2023 is hereby approved as set forth in the attached Exhibit A and incorporated herein.

2. The City Manager is hereby delegated responsibility for the administration of the budget and is authorized to transfer appropriations as necessary between departments, except that any transfers between funds must be approved by the City Council.

3. The City Manager is authorized to establish encumbrances from unexpended budget appropriations for operating and/or capital expenditures from the prior and current fiscal year, and shall not certify any encumbrance nor execute any payment in excess of approved department budget appropriations.

4. The City Manager or designee is hereby authorized to establish an operating reserve to accumulate receipts in excess of the estimated revenues as set forth in the budget document. Said reserve is established for the purpose of funding the budget of subsequent years and the receipts in this reserve are hereby appropriated for said purpose.
125
The above and foregoing resolution was duly and regularly adopted by the City Council of the City of Scotts Valley at a regular meeting held on the 15th day of June, 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved: ____________________________
Donna Lind, Mayor
Attest: ___________________________
Cathie Simonovich, City Clerk
126
RESOLUTION NO. 1501.29

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY APPROVING THE CONTINUED COLLECTION OF THE UTILITY USERS’ TAX FOR THE FISCAL YEAR 2022-23
WHEREAS, the City Council adopted Ordinance 109.3 in July 1992 imposing a utility users’ tax subject to voter approval (Measure R); and
WHEREAS, Measure R was approved by the voters on November 5, 2002; and WHEREAS, the utility users’ tax is solely for the purpose of providing revenue for the usual current expenditures of the City; and
WHEREAS, Ordinance 109.3 requires that the City Council review this tax on an annual basis at the same time as it reviews its proposed annual budget; and WHEREAS, the proposed FY 2022-23 Annual Budget requires the continuation of the collection of the utilities users’ tax.

NOW, THEREFORE, BE IT RESOLVED AND ORDERED that the City Council hereby approves the continued collection of the utility users’ tax through June 30, 2023.

The above and foregoing resolution was duly and regularly adopted by the City Council of the City of Scotts Valley at a regular meeting held on the 15th day of June, 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved: ____________________________
Donna Lind, Mayor
Attest: ___________________________
Cathie Simonovich, City Clerk
127
RESOLUTION NO. 1932.3

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY

APPROVING A MINIMUM RESERVE POLICY FOR THE GENERAL FUND,

GENERAL CAPITAL IMPROVEMENT FUND, RECREATION ENTERPRISE FUND AND WASTEWATER ENTERPRISE FUNDS FOR FY 2022-23
WHEREAS, the terms “fund balances” and “reserves” describe the net position of governmental and/or proprietary funds that measure the financial resources available within a fund; and
WHEREAS, maintaining adequate levels of reserves that help mitigate current and future financial risks due to revenue shortfalls and/or unanticipated capital or operating expenditures represent a best practice used by governmental agencies; and WHEREAS, the City Council desires to establish a formal policy on the level of unassigned fund balance/reserves that should be maintained in the City’s General Fund, General Capital Improvement Fund, Recreation Enterprise Fund and Wastewater Enterprise Funds; and
WHEREAS, the level of fund balances/reserves to be maintained represent a targeted minimum reserve level that will be used for fiscal planning purposes that would trigger action on the part of the City Council and staff to implement remedies to maintain the fiscal health of the City.

NOW, THEREFORE, BE IT RESOLVED AND ORDERED that a minimum reserve policy is hereby established for the General Fund, General Capital Improvement Fund, Recreation Enterprise Fund and Wastewater Enterprise Funds for FY 2022-23 and future years, unless amended, as follows:
• General Fund – a targeted minimum reserve equal to 17% (or, approximately two months) of annual operating expenditures plus net transfers out to other funds • General Capital Improvement Fund – a targeted minimum reserve equal to $500,000 for emergency capital infrastructure replacement needs not funded by other sources
• Recreation Enterprise Fund – a targeted minimum reserve equal to zero ($0), with the General Fund subsidizing any deficits through a transfer of unassigned available reserves
• Wastewater Enterprise Funds – a targeted minimum operating reserve equal to 50% (or, approximately six months) of annual operating expenses, plus $1,000,000 in capital reserves for emergency capital infrastructure replacement. 128
The above and foregoing resolution was duly and regularly adopted by the City Council of the City of Scotts Valley at a regular meeting held on the 15th day of June, 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved: ____________________________
Donna Lind, Mayor
Attest: ___________________________
Cathie Simonovich, City Clerk
129

CITY OF SCOTTS VALLEY COUNCIL POLICY MANUAL
TITLE: MINIMUM RESERVE POLICY POLICY NUMBER: 04-17
EFFECTIVE DATE: 6/30/2017 PAGES: 1
REVISED DATES: 6/20/2018; 6/16/2021
APPROVED BY: Derek Timm, Mayor
POLICY
This policy establishes a minimum reserve policy for the General Fund, General Capital Improvement Fund, Recreation Enterprise Fund and Wastewater Enterprise Funds for FY 2021-22 and future years unless amended.

SCOPE
 The terms “fund balances” and “reserves” describe the net position of governmental and/or proprietary funds that measure the financial resources available within a fund; and,  Maintaining adequate levels of reserves that help mitigate current and future financial risks due to revenue shortfalls and/or unanticipated capital or operating expenditures represent a best practice used by governmental agencies; and,
 The City Council desires to establish a formal policy on the level of unassigned fund balance/reserves that should be maintained in the City’s General Fund, General Capital Improvement Fund, Recreation Enterprise Fund and Wastewater Enterprise Funds; and,  Level of fund balances/reserves to be maintained represent a targeted minimum reserve level that will be used for fiscal planning purposes that would trigger action on the part of the City Council and staff to implement remedies to maintain the fiscal health of the City.

OBJECTIVES
A minimum reserve policy is hereby established for the General Fund, General Capital Improvement Fund, Recreation Enterprise Fund and Wastewater Enterprise Funds for FY 2021-22 and future years, unless amended as follows:
• General Fund – a targeted minimum reserve equal to 17% (or, approximately two months) of annual operating expenditures plus net transfers out to other funds; • General Capital Improvement Fund – a targeted minimum reserve equal to $500,000 for emergency capital infrastructure replacement needs not funded by other sources; • Recreation Enterprise Fund – a targeted minimum reserve equal to zero ($0), with the General Fund subsidizing any deficits through a transfer of unassigned available reserves; • Wastewater Enterprise Funds – a targeted minimum operating reserve equal to 50% (or, approximately six months) of annual operating expenses, plus $1,000,000 in capital reserves for emergency capital infrastructure replacement.

APPROVED AS TO FORM:
___________________________
Kirsten Powell, City Attorney
130

AGENDA ITEM G
DATE: 06-15-2022
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: June 15, 2022
TO: Honorable Mayor and City Council
FROM: Chris Lamm, Public Works Director/City Engineer
APPROVED: Mali LaGoe, City Manager
SUBJECT: SILTANEN POOL RESURFACING

SUMMARY OF ISSUE
A need to resurface the Pool at Siltanen Park was identified in advance of the FY2020/21 budget adoption. The project was defined to provide a substantial repair and replacement of the surface of the pool. Over the years preceding, surface cracks and pieces from the surface would break off causing rough spots at the bottom of the pool. Temporary repairs would be made to hold things over. The project was originally identified for the FY2020/21 budget, but was deferred by a year due to the uncertainty of the impacts of COVID-19 on City finances and the Recreation Division programs.

The City entered into an agreement with a contractor, Adams Pools, in September 2021 after struggling to find contractors to perform the work. The scope of services included:
stripping the existing plaster surface, tilework, and re-plastering the surface. The compensation for the work to be performed was $38,164. Despite the contract date, the work was not planned to commence until January 2022. Further delays ensued due to impacts from COVID and work began in April 2022.

Pool work is permitted though the County Environmental Health Department and an inspection in May revealed additional work that would need to be performed. Cracking was found to be present once the plaster was removed. Additionally, the steps and handrails entering the pool were not in compliance with current code, suction outlets were found to be undersized and required to be split, the pool light junction box required replacement, a pool ladder was required to be installed and it was recommended that the existing pool covering mechanism be removed. The current mechanical system and cover are damaged, with no handhold present and the housing was found to be harboring rodents, a common issue for these types of in ground units.

Adams Pools has prepared two change orders for the additional work. Change Order 1, addressing the cracking in the pool structure and County Health inspection items totals $9,967. Change Order 2, addresses the concerns with the pool cover mechanism and housing through its removal. The mechanism and cover would be removed and the housing backfilled. Existing tile and coping around the pool would be removed and 001

AGENDA ITEM G
DATE: 06-15-2022
replaced to ensure a matching look around the pool. The work for Change Order 2 totals to $21,434. The base bid and change order items total $69,565 which requires Council approval.

Separately, the City will purchase a standalone pool cover to stay in Title 24 compliance for energy conservation. Staff have also engaged a pool maintenance contractor to perform ongoing routine pool maintenance. Once the pool surfacing work is complete and the pool is filled, the pool mechanical equipment will need to be tested to ensure it is operational. At this time, it is not anticipated that the pool will reopen for summer programing.

FISCAL IMPACT
Additional appropriation to CIP Project No. 34, Siltanen Swim Center Pool Resurfacing, will be required to fund the extra work. Staff recommends an additional $6,000 of contingency be added to the project budget for a total project value of $75,000.

STAFF RECOMMENDATION
Staff recommends that Council consider and take the following actions:

1. Authorize an additional budget appropriation and expenditure for the Siltanen Family Swim Center Pool Resurfacing, Project No. 34, in an amount up to $75,000 from General Fund CIP.

2. Authorize the City Manager to execute the two change orders in a form acceptable to the City Attorney.

TABLE OF CONTENTS PAGE
Change Order No. 1........................................................................................................ 3 Change Order No. 2........................................................................................................ 4 002
003
004

AGENDA ITEM H
DATE: 06-15-2022

City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: June 16, 2022
TO: Honorable Mayor and City Council
FROM: Mali LaGoe, City Manager
SUBJECT: HOUSING AUTHORITY OF SANTA CRUZ COUNTY LANDLORD

INCENTIVE PROGRAM AGREEMENT

SUMMARY OF ISSUE
For the past five years, the City of Scotts Valley has partnered with the Housing Authority of Santa Cruz County in support of a countywide Landlord Incentive Program for landlords that rent to families with a Section 8 Housing Choice Voucher. The Landlord Incentive Program reassures property owners to protect their business needs. This risk–mitigation pool has provided up to $5,000 per unit reimbursement to property owners who incur costs upon vacancy, such as unpaid rent or damages that exceed the security deposit, giving landlords even more reassurance that renting to Housing Choice Voucher families is a smart business decision. The program is available to all landlords in Santa Cruz County and cities within the County, and could help hundreds of families and bring millions of additional federal dollars into the Santa Cruz area.

The current agreement expires on June 30, 2022. The Housing Authority of the County of Santa Cruz has secured funding to help expand the program benefits for landlords, with no additional costs for the jurisdictions. The Housing Authority is requesting that the City Council approve a new agreement with no change to the contract dollar amount of $4,040. The new agreement will expire on June 30, 2023.

FISCAL IMPACT
There is no new fiscal impact to the General Fund associated with the Landlord Incentive Program Agreement that will expire on June 30, 2023, as affordable housing funds in the amount of $4,040 are included in the FY 2022-23 budget.

STAFF RECOMMENDATION
It is recommended that the City Council approve the Landlord Incentive Program Agreement for the term of July 1, 2022 through June 30, 2023, and authorize the City Manager to sign the amendment and approve non-monetary and administrative amendments if approved by the City Attorney.

TABLE OF CONTENTS PAGE
Housing Authority of Santa Cruz County Landlord Incentive Program Agreement ................2 001

LANDLORD INCENTIVE PROGRAM
This Agreement ("AGREEMENT") .is entered into on the 1" of July, 2022, by and between the City of Scotts Valley, a Municipal Corporation, hereinafter called CITY and the Housing Authority of the County of Santa Cruz, hereinafter called the Housing Authority. The CITY and the Housing Authority will be referenced as parties to this agreement.

Recitals
WHEREAS, the HousingAuthority desires to continue to administer the Landlord IncentiveProgram in the City of Scotts Valley which provides reimbursement to participating Landlords for certain expenses as outlined in Appendix One (the "Program");and
WHEREAS, CITY desires to provide funding for the Program subject to the terms of this Agreement; NOW,THEREFORE, CITYand the HousingAuthority forthe consideration and upon the terms and conditions hereinafter specified hereby agree as follows:

Term of Agreement:

July 1, 2022 through June 30, 2023.

Grant Funds:

The CITY has allocated a sum of up to Four Thousand and Forty Dollars ($4,040) in grant funds to the Housing Authority for the Program to encourage landlords through risk mitigation, to rent to families with Housing Choice Voucher (HCV) known as Section 8.

Program Requirements:

The Housing Authority will ensure that the Program meets all program requirements and all local, state and federal laws. All work performed by the Housing Authority shall be sufficient to satisfy the CITY's objectives for entering into this AGREEMENT and shall be rendered in accordance with generally accepted practices, and to the standards of the Housing Authority's profession. These requirements are described in Appendix One.

Responsibilities of the Housing Authority:

The Housing Authority will be responsible for managing the Landlord Incentive Program, meeting all Program requirements and providing the activities described in Appendix One. The Housing Authority shall meet with City Manager, called DIRECTOR, or other CITY personnel, or third parties as necessary, on all matters connected with carrying out of the Housing Authority's services described in Appendix One of this AGREEMENT. Such meetings shall be held at the request of either party hereto. Review and CITY approval of completed work shall be obtained quarterly during the course of this work.

Responsibilities of the CITY:

The CITY serves as a source of financing to the Housing Authority for reimbursement of allowable disbursements under the Program up to a maximum amount of $4,040.00. Therefore the CITY shall have certain rights to observe and review the work and to administer the funds made available to the Housing Authority for said work.

The DIRECTOR may authorize a staff person to serve as his or her representative for conferring with the Housing Authority relative to the Housing Authority's services. The work in progress hereunder shall be reviewed from time to time by the CITY at the discretion of the CITY or upon request of the Housing Authority.

Insurance
The Housing Authority shall procure and maintain for the duration of the contract insurance against claims 002

for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Housing Authority, its agents, representatives, or employees.

Minimum Scope of Insurance
Coverage shall be at least as broad as:

I. Insurance Services Office Commercial Liability coverage (Occurrence Form CG 0001) II. Insurance Services Office Form Number CA0001covering Automobile Liability Code 1 (any auto) III. Workers' Compensation insurance as required by theState of California IV. Errors and Omissions Liability insurance appropriate to the Housing Authority's profession.

Minimum Limits of Insurance
The Housing Authority shall maintain limits no less than:

I. General Liability: $1,000, 000 per occurrence and $2,000,000 in aggregate (including operations, for bodily injury, personal and property damage).

II. Automobile Liability: $1,000,000 per accident for bodily injury and property damage.

III. Errors and Omissions Liability: $1,000,000 per claim and in the aggregate.

Other Insurance Provisions
The commercial general liability and automobile liability policies are to contain, or to be endorsed to contain, the following provisions:

I. The CITY, its officers, officials, employees and volunteers are to be covered as additional insured as respects: liability arising out of work or operations performed or on behalf of the Housing Authority or automobiles owned, leased, hired or borrowed by the Housing Authority.

II. For any claims related to this project, the Housing Authority's insurance coverage shall be primary insurance as respects the CITY, its officers, officials, employees and volunteers. Any insurance maintained by the CITY shall be excess of the Housing Authority's insurance and shall not contribute with it.

III. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled by either party, except after 30 days prior written notice by certified mail, return receipt, has been given to the CITY.

IV. Coverage shall not extend to any indemnity coverage for the active negligence of the additional insured in any case where an agreement to indemnify the additional insured would be invalid under Subdivision (b) of Section 2782 of the Civil Code.

Verification of Coverage
The Housing Authority shall furnish the CITY with original certificates and amendatory endorsements affecting coverage by this clause. The endorsements should be on forms provided by the CITY or on other than the CITY's forms provided those endorsements conform to CITY requirements. All certificates and endorsements are to be received and approved by the CITY before work commences. The CITY reserves the right to require complete, certified copies of all required insurance policies, including endorsements affecting coverage required by these specifications at any time. 003

SIGNATURE PAGE
Contract No. ________________________
IN WITNESS WHEREOF, the parties hereto have set their hands the day and year first above written.

CITY OF SCOTTS VALLEY
By: ____________________________________
Mali LaGoe, City Manager
Address: 1 Civic Center Drive, Scotts Valley, CA 95066
Telephone: 831-440-5600
Fax: 831-438-2793
Email: [email protected]
HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ:

By: ________________________________________
Jennifer Panetta, Executive Director
Address: 2160 41 St. Avenue
Telephone: 831-454-5955
Fax: 831-469-0136
Email: [email protected]
DISTRIBUTION:
• The Housing Authority Finance Department
• CITY
004

Landlord Incentive Program Agreement
Appendix One
Term: July 1, 2022 through June 30, 2023.

Program Requirements:

The Housing Authority will ensure that the Landlord Incentive Program meets all program requirements including, but not limited to, the following:
a. USDepartment of Housing and Urban Development (HUD) Section 8 requirements b. The Housing Authority policies and procedures
c. Tenantunitwaswithinthejurisdictionalboundaries
d. Landlord (or Rental Housing Manager, or Owner, referred to as Landlord) had a valid housing assistance contract with the Housing Authority
e. Landlord and Tenant had a valid lease
f. The unit met HUD High Quality Standards
g. The program claim was within the jurisdiction's allocation h. The program claim was submitted within 3 months of the AGREEMENT term i. The program claim was based on the program's allowable expenses Responsibilities of the Housing Authority:

The Housing Authority will be responsible for providing the following activities under this scope of work.

1. Program Utilization:
a. Promote the program to landlords and rental housing managers at Housing Authority briefings and via the website
b. Promote the program to Housing Choice Voucher applicants and participants at Housing Authority briefings and via the website
c. Update the website when jurisdictional funding has been fully utilized

2. Customer Service through the single point of contact:
a. Respond to landlord inquiries promptly
b. Assist the landlord understand how the program works and how to complete the claim form as necessary

3. Accounting Responsibility:
a. Process claims promptly dependent on availability of funds b. Track expenditures for the whole program and by jurisdiction c. Maintain financial records as required by 24 CFR 570.502 and 24 CFR 84.21-28 including:

I. Records of all account transactions, including deposits, disbursements, and balances with an indication of or categorized by finding source
II. Records of all Returned Grant Funds and the original source of those funds from the CITY III. Records indicating the source amounts and uses of administrative funds contributed to the program in accordance with this agreement
IV. Records of all audits and resolutions of audit findings 005

Landlord Incentive Program Agreement

4. Reimburse Landlords:
a. Reimburse claims that exceed the security deposit
b. Reimburse claims that have sufficient documentation
c. Reimburse claims up to the maximum claim of $5,000. (The City of Scotts Valley would fund the first $2,500 of each claim, and the Housing Authority would fund the remainder of the claim, up to the $5,000 maximum per unit/tenant
d. Reimburse claims dependent on availability of funds by jurisdiction e. Reimburse claims when submitted within 3 months of end of tenancy f. Reimburse claims only forthe following eligible expenses:
i. Damagescausedbytenant
ii. Unpaid rent balances aftertenant vacates theunit-upto four months'rent, latefees,and utilities
iii. Vacancy loss in the event of vacancy due to lease termination (not expiration). The maximum claim is 100% of the contract rent for the first 30 days following the vacancy, and 80% of the contract rent for the following 30 days, if the unit remains vacant iv. Legal feesassociated with termination forleaseviolations and leasecompliance

5. Report and Evaluate:
a. Requests forreimbursement to theCITYquarterly
i. Amount of grant funds being requested for each landlord ii. Address of the unit
iii. Typeofeligible expense claimed
iv. Status report on the grant funds to date, including fund balance b. Quarterly progress reports within 30 days following theend of each quarter i. Number of Landlord claims
ii. Total amount of funding provided forclaims
iii. Status of funding balance
iv. Number of Landlords who applied for but did not qualify for assistance from the program c. Annual Report to evaluate the effectiveness of the program within 45 days following the completion of the program year
i. Summary of the number of landlords assisted
ii. Summary of the number of times landlords were assisted (as a landlord may make claims on more than one unit
iii. Narrative description of the key accomplishments of the landlord incentive program during the year
006

AGENDA ITEM I
DATE: 6/15/2022
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE:

TO:

FROM:

APPROVED:

SUBJECT:

June 15, 2022
Honorable Mayor and City Council
Casey Estorga, Administrative Services Director
Mali LaGoe, City Manager
Professional Services Agreement between Hinderliter De
Llamas (HDL) and Associates and the City of Scotts Valley for Business License Processing and Related Services

SUMMARY OF ISSUE
The City of Scotts Valley’s Administrative Services Department provides strategic support in the areas of accounting, budget, asset management, human resources, information technology, and risk management. The City continues to introduce operational efficiencies, including by adopting technology when possible and necessary.

The pandemic created an increased need for either fully remote services and/or limited in-person services. The manual nature of the City’s historical business license application process magnified the significant administrative burden to the business community and staff. With limited technology department-wide, it became inefficient to route documents for wet signatures throughout various city departments. The pandemic exacerbated the need for a technology solution to this process, with the City quickly exploring alternatives to sustain service levels. The City’s research indicates the use of a consultant with the expertise and technological resources necessary to process online business license applications would be mutually beneficial to the entire business community and City as a whole.

Requirements
The City of Scotts Valley is required to issue business licenses pursuant to Municipal Code section 5.04.010, noting any person or company conducting business within Scotts Valley city limits shall obtain a business license. Additionally, California Senate Bill No. 1186 imposes a state fee of $4.00, which the City shall collect, on any applicant for a local business license for purposes of increasing disability access and compliance with construction-related accessibility requirements and developing educational resources for businesses to facilitate compliance with federal and state disability laws.

AGENDA ITEM I
DATE: 6/15/2022

There is a substantial administrative burden to accomplish these duties and comply with both local and state law. The City is challenged with balancing numerous priorities including staffing capacity, the safety of staff and the public during a pandemic, and the general desire and demand for online services.

Background
The City of Scotts Valley has an existing relationship with HDL to provide online business licensing and other services. This request before the City Council is to delegate authority to the City Manager to memorialize that relationship by negotiating a comprehensive professional services agreement. This agreement would allow the City to continue offering Scotts Valley businesses the convenience of an online business licensing service without the need for a customer to visit City Hall in-person, during regular business hours (which are currently limited). Additionally, the City’s ability to schedule a person for front counter hours to process business license applications is not feasible given the City’s current operational demands and the lingering pandemic.

Further, the online, 24/7 business license services from HDL are an example of the City’s contemporary approach to service delivery and a model that directly benefits the customer and City.

HDL has been identified as the preferred vendor due to their prior satisfactory performance in delivering like services, significant efficiencies to the City’s operation during the trial period, and special expertise of HDL & Associates for similar tax auditing services (sales tax and utility users tax),

FISCAL IMPACT
The fee to HDL & Associates is $14.99 for each processed account, which includes applications for new licenses and annual renewals. Discovery and audit service fees are 35% of the revenue received. The collection service fee is 25% of the revenue received.

Based on historical activity, the City estimates HDL will process approximately 1,200 new licenses and/or annual renewals in a 12-month period. At this level of activity, the costs of business license issuance services are approximately $18,000 per year. The costs of any discovery, audit, and collection services would be additional following schedule discussed in the paragraph above.

STAFF RECOMMENDATION
Authorize the City Manager to negotiate and execute agreement, in a form approved by the City Attorney, with Hinderliter De Llamas (HDL) & Associates, LLC to provide business license and related services for the City of Scotts Valley.

AGENDA ITEM J
DATE: 06-15-2022

City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: June 15, 2022
TO: Honorable Mayor and City Council
PREPARED BY: Casey Estorga, Administrative Services Director FROM: Mali LaGoe, City Manager
SUBJECT: CYBER ASCEND TECHNOLOGIES CONTRACT AMENDMENT

SUMMARY OF ISSUE
In November 2021 the City of Scotts Valley entered into an Agreement for Professional Services with Cyber Ascend Technologies for Information Technology (IT) services.

Cyber Ascend, a company based in Scotts Valley, was able to quickly respond to an urgent need for IT support at a time when the City’s technology demands, customer support challenges, and overall use of technology products had exponentially grown.

The needs were exacerbated when the City’s former IT service provider became unable to provide this new level of service required by the City’s modern operation.

At that time, the City entered into an agreement with Cyber Ascend Technologies with a term expiring June 30, 2022 with a not-to-exceed amount of $45,900. Based on the City’s purchasing rules, that agreement was signed by the City Manager. The scope of work, and not-to-exceed amount, included within the original agreement was based on an expectation that the City would have negotiated a new Master Services Agreement by completing a Request For Proposal (RFP) process and competitive bids. However, that timeline has not been met, primarily due to reasons outside of the City’s control.

The proposed amendment will allow the City to meet it’s short-term IT service needs by continuing a partnership with the existing service provider, Cyber Ascend Technologies.

The City’s long-term service provider has not yet been identified and will be subject to a competitive RFP process. The City is scheduled to issue a RFP to secure a robust level of long-term IT services using the following timeline:
• June 2022: City releases RFP
• July 2022: RFP responses due to City
• August/September 2022: City reviews and interviews responsive proposals • October 2022: City awards contract
• November/December 2022: City transitions to long-term service provider 001

AGENDA ITEM J
DATE: 06-15-2022

Notably, the services the City has been receiving from Cyber Ascend Technologies since November 2021 have consistently met the City’s needs. Cyber Ascend staff are highly skilled and incredibly professional. As a result, City staff and the broader Scotts Valley community have greatly benefited from the existing partnership.

Amendments to the scope of work section of the agreement will be negotiated by the City Manager and Cyber Ascend Technologies, and are proposed to include the following:
• Act as a technical liaison between CITY and other IT contractors; and • Make recommendations to CITY related to IT project prioritization, IT project scope definition, and general IT project management services based on findings in the IT Assessment prepared by Management Partners, dated January 25, 2019; and
• Provide technical support for large-scale in-process and future IT projects as directed by CITY; and
• Provide user desktop support as needed, especially as it relates to issues impacting multiple users; and
• Make recommendations to CITY about IT best practices, including training and safety protocols as well as the use of contemporary hardware, software, and/or IT services with an emphasis on risk management and continuity of operations; and
• Provide other IT services as mutually agreed upon by CONTRACTOR and CITY.
• Provide after-hours support for critical issues reported by CITY. Critical issues are defined as High Impact and High Urgency. (Service Level agreement or SLAs for critical issues will have scheduled response times.) Amendments to the compensation section of the agreement will be negotiated by the City Manager and Cyber Ascend Technologies, and are proposed to include the following:
• A standard rate of one hundred thirty-five dollars ($135.00) per hour for all time spent providing direct services to CITY. CONTRACTOR will invoice CITY for actual hours worked, with service needs estimated 40 hours per week. Hourly work provided by CONTRACTOR not to exceed one thousand two hundred (1,200) total hours and shall be billed at no less than 15-minute increments. Total amount billed for standard hourly services shall not exceed one hundred sixtytwo thousand dollars ($162,000). • A rate of two hundred and twenty-five dollars ($225.00) per hour for remote, after-hours triage work and two hundred and eighty dollars ($280.00) per hour for on-site, after-hours triage work. Total amount billed for after-hours hourly services shall not exceed eighteen thousand dollars ($18,000).

The total value of the contract amendment will include a not-to-exceed amount of one 002

AGENDA ITEM J
DATE: 06-15-2022

hundred eighty thousand dollars ($180,000). Notably, this proposed amendment includes costs and services that are in-line with market costs for similar services while aligning with IT service level demands of City staff and Scotts Valley residents.

FISCAL IMPACT
The proposed amendment to the agreement with Cyber Ascend Technologies will extend the term through December 31, 2022 add will increase compensation in the amount of one hundred eighty thousand dollars ($180,000). This would be in addition to the original agreement singed in November 2021 that had a total value of forty-five thousand nine hundred dollars ($45,900). Total costs of IT services with Cyber Ascend Technologies would not exceed two hundred twenty-five thousand nine hundred dollars ($225,900).

Funding for the original agreement and the proposed amendment have been included in the FY 2021-22 Amended Budget and the FY 2022-23 Final Proposed Budget.

STAFF RECOMMENDATION
Staff recommends the City Council authorizes the City Manager to negotiate and sign an amendment to the Professional Services Agreement, in a form approved by the City Attorney, between the City and Cyber Ascend Technologies.

TABLE OF CONTENTS PAGE
Existing Agreement for Professional Services ................................................................ 4 003
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1 AGREEMENT FOR PROFESSIONAL SERVICES
This Agreement for Professional Services (“Agreement”) is made and entered into as of November 29, 2021, by and between the City of Scotts Valley, a municipal corporation, hereinafter referred to as "CITY", and Cyber Ascend Technologies, hereinafter referred to as “CONSULTANT”.

RECITALS
A. CITY desires to retain Consultant for certain professional services as set forth in this Agreement.

B. CONSULTANT is specially trained, experienced and competent to perform the special services which will be required by this Agreement.

C. CONSULTANT possesses the skill, ability, background, certification and knowledge to provide the services described in this Agreement on the terms and conditions described herein.

NOW, THEREFORE, in consideration of the recitals and the mutual promises contained herein, CITY and CONSULTANT agree as follows:

AGREEMENT

1. Employment of CONSULTANT: CITY agrees to, and hereby does, retain and employ CONSULTANT to perform the professional services as outlined in the Scope of Work attached hereto and incorporated herein as Exhibit “A”. CONSULTANT’S work product shall be performed pursuant to generally accepted standards of practice in effect at the time of performance.

2. Responsible Personnel: CITY has relied upon the professional training and ability of CONSULTANT to perform the services hereunder as a material inducement to enter into this Agreement. Primary personnel responsible for the completion of the work described in this Agreement shall be: Phil Neuman, Founder/CEO, Cyber Ascend Technologies, whose address is 4615 Scotts Valley Drive, Suite A, Scotts Valley, CA 95066. Telephone: (831) 621-2440; Email: [email protected]

3. Scope of Work: CONSULTANT shall perform the services as specified in Exhibit A in a professional manner.

DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 004
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2 4. Time of Performance: The services of CONSULTANT are to commence upon execution of this Agreement and shall continue until all authorized work is approved by the CITY. All such work shall be completed no later than June 30, 2022. Time is of the essence in the performance of this Agreement. No waiver by either party hereto of the nonperformance or any breach of any term, provision, or condition of this Agreement, or any default hereunder shall be considered to be or operate as a waiver of any subsequent nonperformance, breach or default.

5. Compensation: CONSULTANT shall accept compensation for services performed as set forth in Section 3 in an amount not to exceed $45,900.00. Periodic payments to CONSULTANT shall be made upon submittal of invoices by CONSULTANT to CITY for review and approval by the City Manager. Invoices will be paid by CITY within a reasonable time after the invoices are received and approved.

6. Insurance: CONSULTANT agrees to have and maintain, for the duration of the contract, the following:
i. General Liability insurance policies insuring him/her and his/her firm to an amount not less than One Million Dollars ($1,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage. ii. Automobile Liability insurance policy ensuring him/her and his/her staff to an amount not less than One Million Dollars ($1,000,000) combined single limit per accident for bodily injury and property damage.
iii. CONSULTANT agrees to have and maintain, for the duration of the contract, professional liability insurance in amounts not less than $1,000,000 which is sufficient to insure CONSULTANT for professional errors or omissions in the performance of the particular scope of work under this agreement.
iv. CONSULTANT shall provide to the CITY all certificates of insurance, with original endorsements effecting coverage. CONSULTANT agrees that all certificates and endorsements are to be received and approved by the CITY before work commences. v. The CONSULTANT'S insurance coverage shall be primary insurance as respects the CITY, its officers, officials, employees and volunteers. Any insurance or self -insurances maintained by the CITY, its officers, officials, employees or volunteers shall be excess of the CONSULTANT'S insurance and shall not contribute with it.

7. Indemnity: CONSULTANT shall hold harmless, indemnify and defend CITY, its elective and appointive boards, commissions, officers, agents, servants, volunteers, and employees from and against any and all claims, costs, damages, liability, losses, or suits (including court costs and attorney fees) for personal injury (including death), property damage and any other damages of any sort whatsoever, arising out of, or alleged to have arisen out of, the willful or negligent acts, errors, or omissions of CONSULTANT or CONSULTANT'S contractors, subcontractors, agents, or employees in the performance of this Agreement. This indemnity shall not apply to any claims brought by CONSULTANT for default of this Agreement, or for claims brought by CITY or any third party where the DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 005
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3 underlying injury or damage is finally determined by a court of competent jurisdiction to arise solely from the negligent or willful misconduct of CITY.

8. Termination: This Agreement may be terminated by the CITY immediately for cause or by either party without cause upon fifteen days’ written notice of termination.

Upon termination, CONSULTANT shall be entitled to compensation for services performed up to the effective date of termination.

CONSULTANT shall accept, for itself, as full payment for services rendered and all work to be done and performed hereunder and in complete satisfaction of all claims against CITY by reason of voluntary abandonment or suspension of work or termination of the Agreement, the sum determined on an hourly basis in accordance with the provisions of this Agreement, or any modification of amendment thereto, plus all direct expenses incurred, including those expenses incurred which are directly attributable to the incomplete portion of the work which could not be canceled.

In the event of termination, CONSULTANT shall deliver as a condition to the payment of the compensation provided for above, or otherwise make available to CITY, all research data, reports, estimates, summaries, and other such information and materials as may have been accumulated by CONSULTANT in performing this Agreement, whether completed or in process in accordance with Section 9 of this Agreement.

9. Documents: Notes, studies, chain, computations, electronic files, and other data and information obtained by CONSULTANT for this project shall, upon receipt of payment for services rendered, be made available to CITY by CONSULTANT at CITY'S request and shall become the property of CITY. In the event CITY alters the document, CITY agrees CONSULTANT shall have no responsibility whatsoever for any claim arising out of, or alleged to have risen out of, use of the altered document.

All plans, studies, documents, charts, computations, and electronic files prepared by and for CONSULTANT, its officers, employees and agents and subcontractors in the course of implementing this Agreement, except working notes and internal documents, shall become the property of the CITY upon payment to CONSULTANT for such work, and the CITY shall have the sole right to use such materials in its discretion without further compensation to CONSULTANT or to any other party. CONSULTANT shall, at CONSULTANT’S expense, provide such reports, plans, studies, documents and other writings to CITY upon written request.

10. Independent Contractor: CONTRACTOR is an independent contractor retained by CITY to perform the work described herein. ALL personnel employed by CONSULTANT are not and shall not be deemed to be employees of CITY.

CONSULTANT shall obtain no rights to retirement benefits or other benefits that accrue DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 006
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4 to CITY’S employees, and CONSULTANT hereby expressly waives any claim it may have to such rights. CONSULTANT shall comply with all state and federal laws pertaining to employment and compensation of its employees and its agents, including the provision of Workers' Compensation.

11. Licenses: CONSULTANT represents and warrants to CITY that it has all licenses, permits, qualifications, insurance and approvals of whatsoever nature which are legally required of CONSULTANT to practice its profession. CONSULTANT represents and warrants to CITY that CONSULTANT shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement, any licenses, permits, insurance and approvals which are legally required of CONSULTANT to practice its profession.

Consultant shall maintain a City of Scotts Valley business license.

12. Assignment: The parties recognize that a substantial inducement to CITY for entering into this Agreement is the professional reputation, experience and competence of CONSULTANT. Assignments of any or all rights, duties or obligations of the CONSULTANT under this Agreement will be permitted only with the express consent of the CITY. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the written authorization of the CITY. If the CITY consents to such subcontract, CONSULTANT shall be fully responsible to CITY for all acts or omissions of the subcontractor. Nothing in this Agreement shall create any contractual relationship between CITY and subcontractor nor shall it create any obligation on the part of the CITY to pay or to see to the payment of any monies due to any such contractor other than as otherwise required by law.

13. Binding on Successors: This Agreement is binding on the heirs, successors and assigns of the parties hereto.

14. Amendment: This Agreement may be amended, modified or changed by the parties, provided that said Agreement, modification or change is in writing and approved by the authorized representative of the parties.

15. Applicable Law and Attorney's Fees: This Agreement shall be construed and enforced in accordance with the laws of the State of California, and any action brought relating to this Agreement shall be held exclusively in a state court in the County of Santa Cruz. Should any legal action be brought by a party for breach of this Agreement or to enforce any provision of the Agreement, the prevailing party of such action shall be entitled to recover its reasonable litigation expenses, including attorney fees.

16. Entire Agreement: This Agreement contains the entire understanding between the parties with respect to the subject matter herein. There are no representations, agreements or understandings. Whether oral or written, between or among the parties relating to the subject matter of this Agreement which are not fully expressed herein. The DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 007
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5 drafting and negotiation of this Agreement have been participated in by each of the parties and/or their counsel, and for all purposes this Agreement shall be deemed to have been drafted jointly by all parties.

17. Waiver: Waiver of a breach or default under this Agreement shall not constitute a continuing waiver of a subsequent breach of the same or any other provision under this agreement.

18. Severability: If any term or portion of this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or otherwise unenforceable, the remaining provisions of this Agreement shall continue in full force and effect.

WITNESS WHEREOF this Agreement is executed by CITY and by CONSULTANT on this 29 day of November, 2021, at Scotts Valley, California.

CONSULTANT: CITY:

CITY OF SCOTTS VALLEY
_____________________________ _____________________________ By: Phil Neuman, Founder/CEO Casey Estorga, Acting City Manager APPROVED AS TO FORM: ATTEST:
______________________________ _____________________________ Kirsten M. Powell, City Attorney Tracy A. Ferrara, City Clerk DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 008
Attorney/2017/ProfServicesForm3.22.17
6 EXHIBIT “A”

SCOPE OF WORK

1. CONTRACTOR shall support CITY’s day-to-day information technology (IT) needs by performing the following primary functions:
a. Act as a technical liaison between CITY and other IT contractors; and b. Make recommendations to CITY related to IT project prioritization, IT project scope definition, and general IT project management services based on findings in the IT Assessment prepared by Management Partners, dated January 25, 2019 (attached); and
c. Provide technical support for large-scale IT projects, including technical support for an upgrade to the City’s telephone system and technical support for IT improvements related to the introduction hybrid City Council meetings; and
d. Provided user desktop support as needed, especially as it relates to issues impacting multiple users; and
e. Make recommendations to CITY about IT best practices, including training and safety protocols as well as the use of contemporary hardware, software, and/or IT services with an emphasis on risk management and continuity of operations; and
f. Other IT services as mutually agreed upon by CONTRACTOR and CITY.

2. CONTRACTOR shall be paid at the following rate:
a. A lump sum of five thousand four hundred dollars ($5,400.00) for 40.00 hours of work at a rate of $135.00 per hour for the start-up work necessary to familiarize themselves with CITY’s technology infrastructure, to review and analyze the IT Assessment plan prepared by Management Partners, and to attend necessary start-up meetings between CITY and other IT contractors, and other general activities necessary to best serve the CITY in this agreement.
b. A rate of one hundred thirty-five dollars ($135.00) per hour for all other time spent providing direct services to CITY. CONTRACTOR will invoice CITY for actual hours worked, with service needs at approximately 10-20 DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 009
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7 hours per week. Hourly work provided by CONTRACTOR not to exceed three hundred (300.00) total hours and shall be billed at no less than 15- minute increments. Total amount billed for hourly services shall not exceed forty thousand five hundred dollars ($40,500.00). c. Total value of this agreement shall not exceed forty-five thousand nine hundred dollars ($45,900.00).

DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 010
1730 MADISON ROAD • CINCINNATI, OH 45206 • 513 861 5400 • FAX 513 861 3480 MANAGEMENTPARTNERS.COM 2107 NORTH FIRST STREET, SUITE 470 • SAN JOSE, CALIFORNIA 95131 • 408 437 5400 • FAX 408 453 6191 3152 RED HILL AVENUE, SUITE 210 • COSTA MESA, CALIFORNIA 92626 • 949 222 1082 • FAX 408 453 6191 To: Jenny Haruyama, City Manager
Tony McFarlane, Administrative Services Director
From: Nancy Hettrick, Management Partners
Joan Schoening, Management Partners
Subject: Observations and Preliminary Recommendations on the Assessment of Information Technology for the City of Scotts Valley
Date: January 25, 2019
____________________________________________________________________________________ Management Partners was retained to conduct an assessment of information technology (IT) at the City of Scotts Valley and identify service gaps and recommendations to strengthen the services provided to customer departments. The assessment of information technology functions included interviews with each City department, staff responsible for IT projects and the outsourced IT services vendor.

Background
The City of Scotts Valley has established technology solutions in some City departments (i.e., RIMS, GFS Municipal Software, Active Net, Wonderware, and Civic Plus) to support the business needs and requirements of the organization and community. Several departments use access databases developed by a former employee (i.e., FERD). This provides staff the ability to collect data; however, the databases are no longer supported, some reports do not work properly and staff does not have confidence in the accuracy of data. There is still a high reliance on paper and the use of tools such as excel to track information. Some solutions are meeting the expectations of the City, others do not.

Observation on Staffing
In June of 2011 the City contracted with Stepford to provide information technology services.

The scope of services includes:
• Discovery, gap analysis and needs assessment (one time) • Propose a list of non-recurring initial projects to bring facilities, technology and processes up to a maintainable condition; the projects would include a business case and justification for each item
• Provide technical support (based on a defined list of services) to be completed for a fixed monthly fee accomplished via onsite, or remote support via phone, e-mail and remote desktop support
DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 011
Draft Information Technology Gap Analysis Page 2
• Special projects to be defined as needs arise and the vendor would provide a proposal, quote for labor and materials and a work plan. Ad-hoc service requests that require onsite technician out of the scope of regular visits are billed as additional hours • Emergency services that require on-site support out of the scope of regularly scheduled visits are billed separately at established rates (i.e., billed as overtime rates).

The oversight of technology is currently managed by the Police Department (PD) Services Supervisor. She was identified as the City’s IT Project Manager and supports the technology needs of all City departments, including linking staff to Stepford for basic support. She provides day-to-day end user desktop support (including all PD software and patrol vehicles technology), network, server and application support; manages and directs outsourced IT vendor, manages the technology budget and projects, and purchases technology.

Managing the City’s technology requires prioritization of available resources to support core and critical technology operations for the City. It is a challenge to do all this with the capacity limitations of the PD Services Supervisor and available time through the outsourced IT vendor contract.

Observations on CORE IT Service Delivery
There were several common themes that emerged during interviews. • There is confusion about the responsibilities of the outsourced IT vendor and the vendor’s responsiveness (lack of)
• Staff rely on paper and standalone applications (i.e., Excel) and there is a general lack of automation and software systems to process City business • Understanding the best tools / options available to use for the varying level of consumers in the City is needed; there is a lack of training • Ensuring the availability of technology
• Some software systems are outdated;
• The lack of a long-term plan to fund technology or manage the investment in technology is worrisome to all (staff understands the City’s financial limitations) • There is minimal oversight and analysis by a technology expert Overall, staff reported that while there are some areas where the City has advanced technology in place, in most cases the systems are outdated or nonexistent. Staff is frustrated by the lack of modern software systems; only a few who rely on paper are comfortable with existing processes. All City staff believe fiscal constraints have impacted the City’s ability to put the right resources in place to help.

Recently IT has focused technology resources on updating and stabilizing the network servers and infrastructures. In order to manage the outsourced vendor within available hours, the DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 012
Draft Information Technology Gap Analysis Page 3
priority has been to ensure the network is reliable, to upgrade critical equipment and provide day to day support. In essence, the priority has been to keep existing systems running. The PD Services Supervisor recognizes that the City needs to enhance technology and understands the impact it would have on the organization but limited by personnel and funding resources and the realities of old equipment.

The Table below provides examples of issues observed in eight IT core service areas.

Core Service Area
Level of Service
Reasonable Gaps Critical Example of Service or System Failure I. Strategic Planning
and Governance
 
• IT is fit into the schedule of existing staff
• Lack of City IT policies (IT Use Policy, Cell
Phone, Electronic Communication Policy,
Critical Infrastructure Procedures, Change
Management, File Retention Schedule)
• No policy/procedures on how technology is
brought into the organization
• Existing IT Contract contains no service level
agreement (SLA) metrics such as availability,
reliability and services
• Staff unable to dedicate time to long term
project planning and management
II. Information Security
Management
 
• No independent security review by an expert
has been completed; of critical concern there is
no in-house security expert and the City’s
contract with outsourced service does not
provide the City adequate oversight
• PD has a Password Policy, but City Hall network
does not.
• Non-PD employees are not required to change
passwords, ever.
• List of PD employee passwords are kept in
locked cabinet
• Potential Payment Card Industry (PCI)
compliance concerns related to credit card use
III. Third Party
Application
Support/
Maintenance
 
• Some departments have no software
applications to manage department
requirements (planning, permitting)
• Use of access database applications that are
no longer supported; some functions no
longer work (i.e., FERD)
• Do not fully utilize existing software
modules to allow for automation
(Recreation)
DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 013
Draft Information Technology Gap Analysis Page 4
Core Service Area
Level of Service
Reasonable Gaps Critical Example of Service or System Failure IV. Budget and Financial
Management 
• Lack of resources to maintain inventories
• Limited IT funding
• Pay as you go practice
V. Desktop Hardware/
Software
Maintenance
Support
  
• Malware identified as issue, but virus scans in
some cases are manual rather than automated
scans
• No backup to PD Services Supervisor role
• Staff confusion on difference between need to
use Terminal Server versus desktop
applications; results in staff believing they
cannot do what they need via Terminal
• Java plugin issues impact staff’s ability to use
software
• Use of local administrative rights for certain
users is a security risk
• No user satisfaction surveys are done to know
level of satisfaction with IT Services
• Lack of technology training leads to more
support calls
VI. Server Support/
Administration 
• No citywide Disaster Recovery/Continuity Plan
• Not utilizing group policy to push updates;
resulting in manual work
VII. Telecommunication
 
• City has three different phone systems, no
ability to manage centrally
• Wiring and network improvements are needed
prior to implementation of a new phone
system (VoIP)
VIII. Network
Management   • Limited funding delays equipment replacement • Building generator needs to be replaced
Within these core service areas, some gaps and risks have been identified that can be used to guide the City in a work plan.

I. Strategic Planning and Governance
Technology Resources, Strategic Planning and Project Management The primary City staff person responsible for IT is responsible for project management, day-today administration of servers, networks and desktops along with managing a critical area in the Police Department as the Services Supervisor for dispatch and records. The Services Supervisor responsibilities include regular interaction with other County agencies. Organizations with DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 014
Draft Information Technology Gap Analysis Page 5
limited resources assigned to technology will find managing the normal day to day technology along with short-term IT projects lead to a reactive technology effort. Technology is naturally disruptive, every day something is likely to occur that will require attention or focus. It is difficult to work on the plan and management of citywide technology projects to the degree that is needed when combined with the other duties.

The assigned IT staff person understands that the City has many technology challenges and focuses the resources on ensuring things that must get done are completed and works to renew technology as funds are available. The current technology plans have focused in key areas including network, infrastructure (i.e., wiring), servers, and desktops.

The City’s current outsourced contract was signed in 2011. The contact has been renewed annually with no changes to the original contract. The contract services (noted in the background section above) are limited. Today, many agencies are evaluating how managed services providers (MSP) can provide outsourced IT support. A technology services provider will manage and assumes responsibility based on a defined set of services. It would be beneficial for the City to reassess their IT needs and consider a request for proposals (RFP) for Managed Service providers. A full needs assessment would be needed to determine the type and quantity of services the City may need.

Recommendation 1. Conduct an IT needs assessment of all technology support requirements related to the current environment and identify key strategic objectives and initiatives (i.e., software systems) to identify scope of services for an outsourced contractor.

Recommendation 2. Contract with a consultant experienced in managed services providers to create an RFP for outsourced IT services that may include sections such as: definition of services, roles, responsibilities, service level metrics, service reporting, pricing, and service level agreements (SLA).

Recommendation 3. Identify an IT champion within the City who will ensure IT projects and systems are discussed regularly with City Management.

Recommendation 4. Initiate a short-term engagement for an IT Manager to assist the City with key recommendations. (#1, #2, #5, #9, #11, #12, #13). The temporary IT Manager could help expedite the City’s ability to implement key recommendations and assist the City with a long-term strategic plan.

Policies and Procedures
The lack of formal policies and procedures have made it difficult for staff to implement standards and procedures which has resulted in inadequate internal controls. Standard IT policies and forms for citywide and IT staff do not exist or were not found. Typically, policies would include an IT Use Policy, Internet Policy, Security Policy, Electronic Communication Policy, Remote Access Policy, New Project Request, New/Replacement System Request, DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 015
Draft Information Technology Gap Analysis Page 6
Citywide technology standards, disposal of old equipment, and a document/file retention schedule. The Police Department has IT policies incorporated into to their general orders.

Procedures necessary to ensure systems are well-managed and documented are either not in place or not maintained regularly. Typically, IT would have daily operational polices and backup procedures documented to identify who is responsible to do the work, define the tasks to be completed and document the work completed. Change management logs are extremely useful to ensure changes are documented (i.e., software patches applied) so they can easily be rolled back if needed.

Other documented procedures typically include: management of software licenses; backup/restore testing programs; patch management; identification, creation and maintenance of critical information technology systems; maintenance of software, documentation of major application systems; disaster recovery plan; emergency replacement of equipment; and reviews of security across network and applications (user account reviews, risk assessments, protection from unauthorized use, PCI compliance, encryption strategies). In Scotts Valley’s case, this would be included as part of the IT outsourced contract.

Recommendation 5. Develop and adopt comprehensive IT policies and procedures and train staff citywide as part of the implementation.

II. Information Security Management
Cyber Security and Resilience
Cyber-security is an ongoing issue that every city faces and it requires a skilled expert to provide this oversight. Many agencies are finding it is not practical to develop this expertise in house and are relying on contract services to provide it. A security audit is needed to ensure the City and the public safety networks are secure and meet all City requirements. The audit should be completed to identify any potential issues in the City’s current network. Most agencies conduct such an assessment. Staff noted the City had just completed a Department of Justice (DOJ) audit related to CLET’s but a formal security audit is needed above and beyond a DOJ audit.

Police department staff change their passwords regular to meet Department of Justice guidelines related to CLETS use. For Police department employees, the PD Services Supervisor keeps a list of staff passwords in a locked cabinet to troubleshoot issues when the staff member is away from their desk. This is of serious concern and not needed to troubleshoot issues. At no time should IT know the passwords of staff. At no time should IT maintain a list of passwords.

Staff should reset their own passwords.

DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 016
Draft Information Technology Gap Analysis Page 7
City Hall staff do not have to change their password. Anytime a password needs to be changed, the PD Services Supervisor does it for the employee (asks what they want to password to be, then sets it).

Recommendation 6. Eliminate use of a list of user passwords.

Recommendation 7. Implement the ability for all city staff to reset their passwords. Typically, IT provides a temporary password and then the system force the user to change at next login.

Recommendation 8. Implement the same Police department password policy Citywide.

Recommendation 9. Hire a professional security firm to conduct a comprehensive IT security audit of the City’s network.
a. Ensure compliance with requirements such as those required by the Department of Justice and PCI.
b. Implement an annual review to ensure the security requirements are maintained.

Recommendation 10. Implement a security awareness plan and training for all employees. Consider outside resources to provide the service.

III. Third Party Application Support / Maintenance
Software Systems
The City has some software applications in place to support the needs of departments, but the lack of software in key areas has led the City to rely on paper and manual processes. This reliance on paper rather than an automated system means that staff will take longer to process a simple request from the public in a timely manner. City staff are used to using manual processes and some do not necessarily see the value that software applications and automation would provide because of their comfort with existing procedures and processes. Community Development and Public Works are especially impacted by the lack of software systems.

Software
System
Responsible
Department Observations
GFS Finance Finance Department uses GFS to process general ledger, accounts payable, payroll, accounts receivable, fixed assets, and purchasing.

The system is only available to Finance staff. Departments use paper transactions (e.g., purchase orders), which are then entered into the GFS system by Finance staff. Timecards are paper-based.

Departments use Excel to create time cards, charging projects or seeking reimbursements is not accurately processed (measured as impact to general fund).

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Software
System
Responsible
Department Observations
City staff have no ability to run reports; must rely on Finance to produce.

Business
Licenses
Finance Business Licenses are manual. A pdf form is available on the City’s website. A database contain information but there is no way to research or monitor new businesses. The City only accepts checks and cash (no credit cards at City Hall). Staff indicated that processing existing renewals in accounts receivable is not time consuming; processing new accounts is time consuming for Finance staff. The assigned staff is not available to the public.

Human
Resources
City Clerk The City utilizes software for basic personnel data and payroll but there is not a full human resources information system (HRIS).

Employee reviews are manual. Recruitment process is all manual (paper applications only).

GIS Public Works GIS needs are supported by a consultant. Described as simplistic, there are some layers and shape files but not in a specific system.

Standalone use of AutoCAD
Maintenance
Systems
(CMMS)
Public Works No software system in place. Paper processes. Staff would like a computer maintenance system and a system to help manage projects (i.e., CIP)
Building
Permits
Community
Development
No software system in place. Paper processes. City uses contract inspectors but no software. Staff would like a permitting system with integration to Land Management, Code Enforcement and Planning Permits (potentially business licenses).

Land
Management
Community
Development
No software system in place. Paper processes. To look up APN information must go to three different sources.

Staff would like a permitting system with integration to Building Permits, Code Enforcement and Planning Permits (potentially business licenses).

Plan Review
and Permits
Community
Development
No software system in place. Paper processes, log kept in excel.

Access database exists for some records, some reports do not work, no staff know Access. Lack of confidence of data due to lack of quality assurance over the years.

City uses consultants, without a system to track is problematic. No ability to submit plans electronically.

Staff would like a permitting system with integration to Land Management, Code Enforcement and Building Permits (potentially business licenses), electronic submittal and some public access for status of permits.

Fee calculate completed in Excel. Tracking of permit deposits in excel, have to ask Finance for reports to see status.

Code
Enforcement
Community
Development
No central tracking; cannot see code enforcement issues as it relates to permits.

Agenda /
Records
Management
City Clerk The Clerk’s office is heavily reliant on paper. No software system in place. Paper processes. Agendas are pdf files. Typically, software systems include: document management systems, agenda
management systems, on-demand web streaming of council
meetings. None are available in Scotts Valley
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Software
System
Responsible
Department Observations
ActiveNet Recreation Staff uses the system well but noted there are features and components they haven’t implemented that they could probably benefit from (senior center classes, leagues, events, membership).

SunRidge

CAD/RMS
Mobile
Police Department SunRidge software is used throughout the SF Bay Area. It is a reliable system, well supported and has a strong user base.

Recommendation 11. Create a citywide technology steering committee to prioritize technology projects.

Recommendation 12. Develop a citywide technology plan for implementation of new or replacement technology systems to automate city services that benefit both City staff and the public.

Recommendation 13. Utilize consultants to conduct a needs assessment related to each department’s operational requirements. Based on the needs assessment develop functional and specification requirements and assist the City in a Request for Pricing (RFP) process to purchase the necessary software systems for the City.

Recommendation 14. Conduct a GIS needs assessment and develop a GIS strategic plan to support citywide needs.

IV. Budget and Financial Management
Like many cities, Scotts Valley has delayed replacing equipment due to limited budget resources. As funding became available staff prioritized replacement of dated equipment over implementing new technology. A recent organizational scan identified some of the same issues identified in the report.

Recommendation 15. Ensure long term planning for desktop hardware is included in the technology project plan. (Recommendation 12) V. Desktop Hardware/Software Support
Support of desktop hardware and software is provided by the outsourced IT vendor, IT Project Manager and City staff. City staff indicated that the outsourced vendor used to be more proactive, come onsite and ask about things; but now typically provides most of the support over the phone with limited onsite work. Issues that require onsite assistance delay staff from completing work.

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Typically, a network login account runs with minimum permissions (least-privilege) to secure and protect the network. On certain desktops, the City’s outsourced vendor granted additional permissions to the local workstation (i.e., local administrative rights). In one documented instance a computer in Finance (running with evaluate privileges) became infected with malware. The vendor stated they were able to isolate the computer. The risk of allowing users to run with local administrative rights increases the chance that malicious software (malware) could be installed as well as enables staff to install unapproved software. The lack of automated virus scanning throughout the organization is also problematic (vendor stated they find two to three computers a month infected with malware).

IT training is limited; usually only new employees receive training. There was frustration by both City staff and the IT project manager on this issue. This is a resource issue. There are no dedicated resources available to ensure staff is trained on a regular basis.

Recommendation 16. Implement solutions to ensure staff do not require “local admin rights.”
Recommendation 17. Evaluate opportunities to provide on-going technology training for City staff.

VI. Server Support / Administration
Disaster recovery and system backup
The City’s servers are backed up daily and include replication at an off-site co-location center in Sacramento. However, the City’s current disaster recovery and business continuity plan is deficient and does not include sufficient contingency plans. Business continuity includes disaster recovery planning and business resumption planning. A disaster recovery plan addresses how each City business unit will continue to do business in the event of a disruption or disaster. Activities in a plan include: (1) identifying the possible issues that might disrupt critical or important operations, (2) anticipating the impacts and effects from the operational disruptions, and (3) developing and documenting contingent responses to recovery as quickly as possible. Restoring the technical infrastructure and systems is only one part of the plan. A department cannot assume that because the City is backing up systems and using redundant and reliable systems, they will be able to continue to work.

As recent as March 22, 2018, the City of Atlanta was just the latest City to suffer a cyber-attack which impacted Atlanta’s ability to do business with the public. Atlanta staff were directed to not use their computer systems till March 26. The incident involved ransomware encrypted files and demanded payment to release them. In most cases, agencies can recover when they have an up-to-date backup and an incident response plan to restore the City’s systems. Scotts Valley had an incident in one department where ransomware was found. In this case the computer was protected but there are older computers where active scans are not able to run and could impact the City.

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Recommendation 18. Implement a plan to ensure every computer is scanned weekly and software updates are managed weekly.

Recommendation 19. Implement solutions to push updates to City computers rather than require manual installs by vendor or City staff.

Recommendation 20. Create a citywide disaster recovery and business continuity task force to ensure each operational unit has the ability to function effectively in the event of an interruption due to the loss of information, loss of personnel or loss of access to information and facilities. Seek expert advice from outside consultants to assist in the development of a business continuity plan tailored for each department. Assign appropriate operating department resources to create the plan.

VII. Telecommunication
Phone System and Internet Service Provider (ISP)
The City has multiple phone systems with no integration. There is no ability to transfer phones between the buildings. Voice mail is hosted at City Hall and is no longer under contract. The PD Services Supervisor has a plan. The first step is to replace wiring infrastructure throughout City facilities. In addition to the wiring, there are other infrastructure improvements needed such as improving connectivity between the City facilities before a new citywide phone system can be implemented. Staff is also working to improve Internet Service Provider (ISP) as part of the improvements necessary for a new phone system.

Recommendation 21. Continue the Voice over IP (VoIP) readiness program and utilize a professional telecommunications firm to ensure the City is prepared for VoIP. Develop a project plan to present to City Manager a detailed the scope and tasks; identify tentative timeline and include costs estimates.

Recommendation 22. Contract with a professional firm with VoIP/RFP experience to assist the City via an RFP process to replace the phone and voice mail system.

Recommendation 23. Continue to improve ISP services to include redundancy.

VIII. Network Management
Daily Management and Administration
Network management is performed by the outsourced IT vendor. The IT Project Manager meets regularly with the staff assigned to City of Scotts Valley. The vendor contract calls for contract staff to be onsite once a week for eight hours. The onsite work is typically related to network DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 021
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and server management. The vendor will adjust the one day a week to complete the tasks identified by the IT Project Manager, such as work two half days or consecutive days and skip a week to adhere to the limit of 32 hours a month written in to the contract. The vendor has set-up monitoring and notifications go to the company’s group email. The IT Project Manager and Stepford are responsible for the administration of the servers, firewalls and related network equipment.

Due to limited funding options staff is creative and willing to purchase refurbished equipment (includes warranty) but waiting for availability of these items can delay projects. The IT Project Manager noted that the building generator and transfer switch need to be replaced and are designated high priorities. Wastewater treatment plan technology is also in need of upgrades.

Recommendation 24. Ensure projects such as the building generator and Wastewater Treatment Plant upgrades are included in the City’s technology project plans. (Recommendation 12)
Recommendation 25. Ensure existing hardware and technology equipment is part of the City’s technology project plan. (Recommendation 12) DocuSign Envelope ID: 9CA67D44-5E69-4D3B-9596-09401B0E612C 022

AGENDA ITEM K
DATE: 06-15-2022

City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: June 15, 2022
TO: Honorable Mayor and City Council
FROM: Steve Walpole, Chief
APPROVED: Mali LaGoe, City Manager
SUBJECT: SECOND READING AND ADOPTION OF THE SCOTTS VALLEY

MUNICIPAL CODE REGULATIONS REGARDING SMOKING AND

TOBACCO PRODUCTS

SUMMARY OF ISSUE
On May 18, 2022, the City Council approved the first reading and introduction of Ordinance No. 188.1 of the City Council of the City of Scotts Valley amending Title 5, Chapter 5.22 of the Scotts Valley Municipal Code (SVMC) requiring tobacco retailer licenses and amending Chapters 8.20 and 8.25 of the SVMC to regulate the sale of tobacco products including prohibiting the sale of flavored tobacco and prohibiting smoking in outdoor dining areas.

This item fulfills the requirement of a second reading of the proposed ordinance and SVMC amendments. If adopted, Ordinance No. 188.1 will take effect in 30 days, on July 15, 2022.

FISCAL IMPACT
There is no fiscal impact associated with the adoption of this ordinance.

STAFF RECOMMENDATION
It is recommended that City Council approve the second reading and adoption of Ordinance No. 188.1 of the City Council of the City of Scotts Valley amending Chapter

5.22 of Title 5 of the Scotts Valley Municipal Code requiring tobacco retailer licenses and amending Chapters 8.20 and 8.25 of the Scotts Valley Municipal Code to regulate the sale of tobacco products and waive the reading thereof.

TABLE OF CONTENTS PAGE
Ordinance No. 188.1 2
001
1 ORDINANCE NO. 188.1

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY AMENDING CHAPTER 5.22 OF TITLE 5 OF THE SCOTTS VALLEY MUNICIPAL

CODE REQUIRING TOBACCO RETAILER LICENSES AND AMENDING CHAPTERS

8.20 AND 8.25 OF THE SCOTTS VALLEY MUNICIPAL CODE TO REGULATE THE

SALE OF TOBACCO PRODUCTS
WHEREAS, the City of Scotts Valley desires to amend certain chapters of the Scotts Valley Municipal Code relating to the regulation of smoking and flavored tobacco products to protect the public health, safety, and welfare by discouraging the sale and distribution of flavored tobacco products and prohibiting smoking in certain areas within the City; and
WHEREAS, in 2009, the federal Food and Drug Administration (FDA) banned all flavored cigarette products (with the exception of menthol); and WHEREAS, following the FDA ban, tobacco use by youth decreased by 6% and decreased the likelihood of becoming a cigarette smoker by 17%; and WHEREAS, federal law does not restrict the sale of menthol cigarettes or flavored noncigarette tobacco products, such as cigarillos or electronic smoking devices, and the solutions used in these devices; and
WHEREAS, mentholated and flavored non-cigarette products have been shown to be “starter” products for youth who begin using tobacco, helping to establish tobacco habits that can lead to long-term addiction; and
WHEREAS, tobacco use remains the number one most preventable cause of death and disease in the United States; and
WHEREAS, evidence and studies show that youth believe flavored tobacco products are safer and less addictive than non-flavored varieties; and WHEREAS, in the last 2 years, vaping has increased 218% by middle schoolers and 135% by high schoolers; and
WHEREAS, 96% of kids who vape use flavors; and
WHEREAS, in 2016, an estimated 82% of tobacco retailers in California sold flavored non-cigarette tobacco products, over 90% of tobacco retailers sold menthol cigarettes, and 8 of 10 tobacco retailers near schools sold flavored, non-cigarette tobacco products.
002
2 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY AS FOLLOWS:

SECTION 1. Section 5.22.010 of Chapter 5.22 of Title 5 of the Scotts Valley Municipal Code, Tobacco Retailer Licenses, is hereby amended to read as follows:
“5.22.010 DEFINITIONS.

The following words and phrases, whenever used in this chapter, shall have the meanings defined in this section unless the context clearly requires otherwise:
(a) “Arm’s Length Transaction” means a sale in good faith and for valuable consideration that reflects the fair market value between two informed and willing parties, neither of which is under any compulsion to participate in the transaction. A sale between relatives, related companies or partners, or a sale for which a significant purpose is avoiding the effect of the violations of this chapter is not an arm’s length transaction.
(b) “Chief of Police” shall refer to the City of Scotts Valley Chief of Police or the person designated by the Chief of Police.
(c) “Drug paraphernalia” shall have the definitions set forth in California Health and Safety Code Section 11014.5, as that section may be amended from time to time. (d) “Electronic Smoking Device” means any device that may be used to deliver any aerosolized or vaporized substance to the person inhaling from the device, including, but not limited to, an e-cigarette, e-cigar, e-pipe, vape pen, or e-hookah. “Electronic Smoking Device” includes any component, part, or accessory of the device, and also includes any substance that may be aerosolized or vaporized by such device, whether or not the substance contains nicotine.
(e) “Flavored Tobacco Product” means any Tobacco Product that contains a taste or smell, other than the taste or smell of tobacco, that is distinguishable by an ordinary consumer either prior to, or during the consumption of, a tobacco product, including, but not limited to, any taste or smell relating to fruit, menthol, mint, wintergreen, chocolate, cocoa, vanilla, honey, or any candy, dessert, alcoholic beverage, herb, or spice. (f) “Moveable place of business” means any form of business that is operated out of a kiosk, truck, van, automobile or other type of vehicle or transportable shelter and not a fixed address store front or other permanent type of structure authorized for sales transactions.
(g) “Person” shall mean any natural person, partnership, cooperative association, corporation, personal representative, receiver, trustee, assignee, or any other legal 003
3 entity.
(h) “Pharmacy” shall mean any retail establishment in which the profession of pharmacy is practiced by a pharmacist licensed by the State of California in accordance with the Business and Professions Code and where prescription pharmaceuticals are offered for sale, regardless of whether the retail establishment sells other retail goods in addition to prescription pharmaceuticals.
(i) “Proprietor” shall mean a person with an ownership or managerial interest in a business. An ownership interest shall be deemed to exist when a person has a ten percent or greater interest in the stock, assets, or income of a business other than the sole interest of security for debt. A managerial interest shall be deemed to exist when a person can or does have or share ultimate control over the day-to-day operations of a business.
(j) “Self-Service Display” means the open display or storage of Tobacco Products in a manner that is physically accessible in any way to the general public without the assistance of the retailer or employee of the retailer and a direct person-to-person transfer between the purchaser and the retailer or employee of the retailer. (k) “Tobacco Product” means:
(1) any product containing, made of, or derived from tobacco or nicotine that is intended for human consumption or is likely to be consumed, whether inhaled, absorbed, or ingested by any other means, including but not limited to, a cigarette, a cigar, pipe tobacco, chewing tobacco, snuff, or snus; (2) any electronic smoking device as defined in this section and any substances that may be aerosolized or vaporized by such device, whether or not the substance contains nicotine; or
(3) any component, part, or accessory of (1) or (2), whether or not any of these contains tobacco or nicotine, including, but not limited to filters, rolling papers, blunt or hemp wraps, hookahs, and pipes.
“Tobacco Product” does not mean drugs, devices, or combination products authorized for sale by the U.S. Food and Drug Administration, as those terms are defined in the Federal Food, Drug, and Cosmetic Act.
(l) “Tobacco Retailer” means any person who sells, offers for sale, or does or offers to exchange for any form of consideration tobacco or Tobacco Products. “Tobacco Retailing” shall mean the doing of any of these things. This definition is without regard to the quantity of Tobacco Products sold, offered for sale, exchanged, or offered for exchange.
004
4 (m) “Significant Tobacco Retailer” means any Tobacco Retailer for which the principal or core business is selling Tobacco Products as evidenced by the fact that (1) twenty percent (20%) or more of floor or display area is devoted to Tobacco Products, Tobacco Paraphernalia, or both; (2) sixty-seven percent (67%) or more of gross sales receipts are derived from Tobacco Products; or (3) fifty percent (50%) or more of completed sales transactions include Tobacco Products.
(n) “Youth-sensitive area” means a parcel in the City that is occupied by:
a. A private or public kindergarten, elementary, middle, junior high, or high school;
b. A library open to the public;
c. A playground open to the public;
d. A youth center, defined as a facility where persons under the age of 18 come together for programs and activities;
e. A recreational facility open to the public, defined as an area, place, structure, or other facility that is used either permanently or temporarily for community recreation, even though it may be used for other purposes. “recreational facility” includes but is not limited to, a gymnasium, playing court, playing field, and swimming pool;
f. A park open to the public or to all residents of a private community; g. A licensed child-care facility or preschool, other than a small family day care facility as defined in California Health and Safety Code § 1596.78.” SECTION 2. Section 5.22.020 of Chapter 5.22 of Title 5 of the Scotts Valley Municipal Code, Tobacco Retailer Licenses, is hereby amended to read as follows:
“5.22.020 TOBACCO RETAILER LICENSE – REQUIREMENTS AND VIOLATIONS. (a) It shall be unlawful for any person to act as a Tobacco Retailer, without complying with Chapter 8.20 and obtaining and maintaining a valid Tobacco Retailer’s license pursuant to this chapter for each location at which that activity is to occur. (b) It shall be unlawful for any Tobacco Retailer or any of the Tobacco Retailer’s agents or employees to sell or offer for sale, or to possess with intent to sell or offer for sale, any Flavored Tobacco Product. A public statement or claim made or disseminated by the manufacturer of a tobacco product, or by any person authorized or permitted by the manufacturer to make or disseminate public statements concerning such tobacco product, that such tobacco product has or produces a taste or smell other than tobacco shall constitute presumptive evidence that the tobacco product is a Flavored Tobacco Product.
(c) Tobacco Retailing by persons from a movable place of business is prohibited. Only fixed-location businesses are eligible to be licensed for Tobacco Retailing. (d) Each Tobacco Retailer license shall be prominently displayed in a publicly visible location at the licensed location.
005
5 (e) Positive Identification Required. No person engaged in Tobacco Retailing shall sell or transfer a Tobacco Product to another person without first verifying by means of government-issued photographic identification that the recipient is at least 21 years of age. Verification is not required for a person over the age of 30. That the person appeared to be 30 years of age or older does not constitute a defense to a violation of this subsection.
(f) Minimum Age for Persons Selling Tobacco. No person who is younger than 21 years of age shall engage in Tobacco Retailing.
(g) Self-Service Displays Prohibited. Tobacco Retailing by means of a self-service display is prohibited.
(h) In the course of Tobacco Retailing or in the operation of a business or maintenance of a location for which a Tobacco Retailer’s license has been issued, it shall be a violation of this chapter for a licensee, or any of the licensee’s agents or employees, to violate any local, state or federal law applicable to Tobacco Products or Tobacco Retailing.
(i) All sales of Tobacco Products to consumers shall be conducted in-person at the licensed location. It shall be a violation of this chapter for any Tobacco Retailer or any of the Tobacco Retailer’s agents or employees to deliver Tobacco Products or to knowingly or recklessly sell Tobacco Products to any person that intends to deliver the Tobacco Product to a consumer in the City. For purposes of this subsection, “Deliver” means the commercial transfer of Tobacco Products to a consumer at a location not licensed pursuant to this chapter.”
SECTION 3. Section 5.22.040 of Chapter 5.22 of Title 5 of the Scotts Valley Municipal Code, Tobacco Retailer Licenses, is hereby amended to read as follows:
“5.22.040 APPLICATION PROCEDURE.
(a) Application for a Tobacco Retailer’s license shall be submitted in the name of each proprietor proposing to conduct retail tobacco sales and shall be signed by each proprietor or an authorized agent thereof. The application shall include a statement signed by each proprietor that no drug paraphernalia is or will be sold at the location for which the license is sought.
(b) It shall be the responsibility of each proprietor to be informed regarding all laws applicable to Tobacco Retailing, including those laws affecting the issuance of a Tobacco Retailer’s license.
(c) No proprietor may rely on the issuance of a Tobacco Retailer’s license as a 006
6 determination by the city that the proprietor has complied with all laws applicable to Tobacco Retailing.
(d) A license issued contrary to this chapter, contrary to any other law, or on the basis of false or misleading information supplied by a proprietor shall be revoked pursuant to Section 5.22.090.
(e) Nothing in this chapter shall be construed to vest in any person obtaining and maintaining a Tobacco Retailer’s license any status or privilege to act as a Tobacco Retailer in contravention of any provision of law.
(f) All applications shall be submitted on a form supplied by the City Police Department and shall contain the following information:
(1) The name, address, and telephone number of each proprietor of the business that is seeking a license.
(2) The business name, address, and telephone number of the single fixed location for which a license is sought.
(3) A single name and mailing address authorized by each proprietor to receive all communications and notices (the “authorized address”) required by, authorized by, or convenient to the enforcement of this chapter. If an authorized address is not supplied, each proprietor shall be understood to consent to the provision of notice at the business address specified in subsection (f)(2).
(4) Proof that the location for which a Tobacco Retailer’s license is sought has been issued a valid state Tobacco Retailer’s license by the California State Board of Equalization, if the Tobacco Retailer sells products that require such license.
(5) Whether a proprietor has previously been issued a Tobacco Retailer’s license pursuant to this chapter that is or was at any time suspended or revoked, and, if so, the dates and locations of all such suspensions or revocations.
(6) Whether or not any proprietor or agent of the proprietor has admitted to violating, or has been found to have violated, this chapter, and if so, the dates and locations of all such violations within the previous five years. (6) Such other information as the Chief of Police deems reasonably necessary for the administration or enforcement of this chapter. 007
7 (7) All information required to be submitted in order to apply for a Tobacco Retailer’s license shall be updated with the City Police Department whenever the information changes. A Tobacco Retailer shall provide the City Police Department with any updates within ten business days of a change.” SECTION 4. Section 5.22.050 of Chapter 5.22 of Title 5 of the Scotts Valley Municipal Code, Tobacco Retailer Licenses, is hereby amended to read as follows:
“5.22.050 ISSUANCE OF TOBACCO RETAIL LICENSE.

Upon the receipt of a complete application for a Tobacco Retailer’s license and the license fee required by this chapter, the city planning department shall forward the application to the Chief of Police. The Chief of Police may approve or deny the application for a license, or it may delay action for a reasonable period of time to complete any investigation of the application or the applicant deemed necessary. The Chief of Police may deny an application for a Tobacco Retail license based on any of the following:
(a) The application seeks authorization for Tobacco Retailing at a location for which a current proprietor’s suspension is in effect pursuant to this chapter, for which a current proprietor’s license has been revoked pursuant to this chapter, or for which this chapter otherwise prohibits issuance of Tobacco Retailer licenses; (b) The application seeks authorization for Tobacco Retailing for a proprietor to whom a suspension is in effect pursuant to this chapter for the subject location or another location, whose license has been revoked pursuant to this chapter for the subject location or another location, or to whom this chapter otherwise prohibits a tobacco retailer license to be issued;
(c) The city has information that the proprietor or his or her agent or employee has violated any local, state or federal tobacco control law, including this chapter, within the preceding twelve months;
(d) The information presented in the application is inaccurate or false. Intentionally supplying inaccurate or false information shall be a violation of this chapter; or (e) The application seeks authorization for Tobacco Retailing that is prohibited pursuant to this chapter or Chapter 8.20, that is otherwise unlawful pursuant to this code, or that is unlawful pursuant to any other local, state, or federal law.

Any denial of an application shall be in writing and shall set forth the reasons for denial of the permit. Such denial shall be subject to appeal in accordance with Section

5.22.130 of this code.”
008
8 SECTION 5. Section 5.22.060 of Chapter 5.22 of Title 5 of the Scotts Valley Municipal Code, Tobacco Retailer Licenses, is hereby amended to read as follows:
“5.22.060 LICENSE RENEWAL AND EXPIRATION.
(a) A Tobacco Retailer license is invalid unless the appropriate fee has been paid in full and the term of the license has not expired. The term of a Tobacco Retailer license is one year beginning each fiscal year on July 1st and ending on June 30th of the same year. Each Tobacco Retailer shall apply for the renewal of his or her Tobacco Retailer’s license and submit the license fee no later than thirty (30) days prior to expiration of the term.
(b) A Tobacco Retailer’s license that is not timely renewed shall expire at the end of its term. To reinstate a license that has expired, or to renew a license not timely renewed pursuant to subsection (a), the proprietor must:
(1) Submit the license fee, if required.
(2) Submit a signed affidavit affirming that the proprietor:
(i) Has not sold and will not sell any Tobacco Product after the license expiration date and before the license is renewed; or
(ii) Has waited the appropriate ineligibility period established for Tobacco Retailing without a license, as set forth in Section 5.22.090(b) before seeking renewal of the license.”
SECTION 6. Section 5.22.070 of Chapter 5.22 of Title 5 of the Scotts Valley Municipal Code, Tobacco Retailer Licenses, is hereby amended to read as follows:
“5.22.070 LICENSE NONTRANSFERABLE.
(a) A Tobacco Retailer’s license may not be transferred from one person to another or from one location to another. Whenever a Tobacco Retailing location has a change in proprietor a new Tobacco Retailer’s license is required. (b) Notwithstanding any other provision of this chapter, prior violations at a location shall continue to be counted against a location and license ineligibility periods shall continue to apply to a location unless:
(1) The location has been fully transferred to a new proprietor or fully transferred to entirely new proprietors in an arms length transaction; and (2) The new proprietor(s) provides the city with clear and convincing evidence that the new proprietor(s) has acquired or is acquiring the location 009
9 in an arm’s length transaction. “
SECTION 7. Section 5.22.130 of Chapter 5.22 of Title 5 of the Scotts Valley Municipal Code, Tobacco Retailer Licenses, is hereby amended to read as follows:
“5.22.130 TOBACCO RETAILING WITHOUT A LICENSE – SEIZURE. (a) Tobacco Products or Flavored Tobacco Products offered for sale or exchange in violation of this chapter are subject to seizure by the Chief of Police, or any peace officer, and shall be forfeited after the licensee and any other owner of the Tobacco Products or Flavored Tobacco Products seized is given reasonable notice and an opportunity to demonstrate that the Tobacco Products or Flavored Tobacco Products were not offered for sale or exchange in violation of this chapter. (b) Forfeited Tobacco Products or Flavored Tobacco Products shall be maintained and destroyed pursuant to the Police Department’s policy for seized evidence. Tobacco Products or Flavored Tobacco Products that are hazardous waste shall be properly disposed of according to applicable hazardous waste regulations.” SECTION 8. Section 5.22.140 of Chapter 5.22 of Title 5 of the Scotts Valley Municipal Code, Tobacco Retailer Licenses, is hereby amended to read as follows:
“5.22.10 ENFORCEMENT.
(a) The remedies provided by this chapter are cumulative and in addition to any other remedies available at law or in equity.
(b) Whenever evidence of a violation of this chapter is obtained in any part through the participation of a person under the age of eighteen years old, such a person shall not be required to appear or give testimony in any civil or administrative process brought to enforce this chapter, and the alleged violation shall be adjudicated based upon the sufficiency and persuasiveness of the evidence presented. (c) Violations of this chapter are hereby declared to be public nuisances. (d) In addition to other remedies provided by this chapter or by other law, any violation of this chapter may be remedied or prosecuted pursuant to Title 4 of this code. (e) (1) A first violation of this chapter shall constitute an infraction punishable by a fine of three hundred dollars.
(2) A second violation of this chapter committed within one year of a first violation shall constitute an infraction punishable by a fine of one thousand dollars.
(3) A third violation of this chapter committed within one year of a second 010
10 violation shall constitute an infraction punishable by a fine of three thousand dollars.
(4) A fourth or subsequent violation of this chapter committed within one year of a prior violation shall constitute a misdemeanor punishable by a fine of five thousand dollars.

Each day a violation of this chapter exists is a separate offense.” SECTION 9. Section 8.20.040C of Chapter 8.20 of Title 8 of the Scotts Valley Municipal Code, Smoking and Tobacco Regulations, is hereby amended to read as follows:
“SECTION 8.04.020C. Smoking shall be prohibited in the following non-enclosed public places within the city:

1. Service lines for retail, service or entertainment venues;

2. City parks, except where posted "smoking permitted";

3. Community pools or play areas (such as in multifamily developments), except where posted "smoking permitted";

4. Within twenty-five feet of the main entrance used by employees or customers of any business, except for those places specifically exempted by Section 8.20.060;

5. Ticket, boarding and waiting areas for public transit, except for areas posted "smoking permitted”;

6. Designated outdoor dining areas of restaurants or eating establishments.” SECTION 10. Section 8.25.020H of Chapter 8.25 of Title 8 of the Scotts Valley Municipal Code, Regulation of Tobacco and Electronic Cigarettes Advertising and Sales, is hereby amended to read as follows:
“8.25.020H “Retail tobacco store” means a retail store that sells, offers for sale, or does or offers to exchange for any form of consideration Tobacco Products.

SECTION 11. Section 8.25.020J of Chapter 8.25 of Title 8 of the Scotts Valley Municipal Code is hereby amended to read as follows:
“8.25.020J “Tobacco Product” means:
(1) any product containing, made of, or derived from tobacco or nicotine that is intended for human consumption or is likely to be consumed, whether inhaled, absorbed, or ingested by any other means, including but not limited to, a cigarette, a cigar, pipe tobacco, chewing tobacco, snuff, or snus;
(2) any electronic smoking device as defined in this section and any substances that may be aerosolized or vaporized by such device, whether or not the substance contains nicotine.
011
11 (3) any component, part, or accessory of (1) or (2), whether or not any of these contains tobacco or nicotine, including but not limited to filters, rolling papers, blunt or hemp wraps, hookahs, and pipes.
“Tobacco Product” does not mean drugs, devices, or combination products authorized for sale by the U.S. Food and Drug Administration, as those terms are defined in the Federal Food, Drug, and Cosmetic Act.”
SECTION 12. Section 8.25.020L of Chapter 8.25 of Title 8 of the Scotts Valley Municipal Code is hereby amended to read as follows:
“8.25.020L “Electronic Smoking Device” means any device that may be used to deliver any aerosolized or vaporized substance to the person inhaling from the device, including, but not limited to, an e-cigarette, e-cigar, e-pipe, vape pen, or e-hookah. “Electronic Smoking Device” includes any component, part, or accessory of the device, and also includes any substance that may be aerosolized or vaporized by such device, whether or not the substance contains nicotine.

SECTION 13. Section 8.25.020M of Chapter 8.25 of Title 8 of the Scotts Valley Municipal Code is hereby amended to read as follows:
“8.25.020M “Flavored Tobacco Product” means any Tobacco Product that contains a taste or smell, other than the taste or smell of tobacco, that is distinguishable by an ordinary consumer either prior to, or during the consumption of, a tobacco product, including, but not limited to, any taste or smell relating to fruit, menthol, mint, wintergreen, chocolate, cocoa, vanilla, honey, or any candy, dessert, alcoholic beverage, herb, or spice.

SECTION 14. Section 8.25.020N of Chapter 8.25 of Title 8 of the Scotts Valley Municipal Code is hereby amended to read as follows:
“8.25.020N “Tobacco Retailer” shall mean any Person who sells, offers for sale, or does or offers to exchange for any form of consideration, Tobacco Products. “Tobacco Retailing” shall mean the doing of any of these things. This definition is without regard to the quantity of Tobacco Products sold, offered for sale, exchanged, or offered for exchange.”
SECTION 15. Section 8.25.030D of Chapter 8.25 of Title 8 of the Scotts Valley Municipal Code is hereby amended to read as follows:
“8.25.030D Positive Identification Required. Positive Identification Required. No person engaged in Tobacco Retailing shall sell or transfer a Tobacco Product to another person without first verifying by means of government-issued photographic identification that 012
12 the recipient is at least 21 years of age. Verification is not required for a person over the age of 30. That the person appeared to be 30 years of age or older does not constitute a defense to a violation of this subsection.”
SECTION 16. Section 8.25.030E of Chapter 8.25 of Title 8 of the Scotts Valley Municipal Code is hereby amended to read as follows:
“8.25.030E Minimum Age for Persons Selling Tobacco. No Person who is younger than the minimum age established by State law for the purchase of Tobacco Products shall engage in Tobacco Retailing.” SECTION 17. Section 8.25.030F of Chapter 8.25 of Title 8 of the Scotts Valley Municipal Code is hereby amended to read as follows:
“8.25.030(f) Self-Service Displays Prohibited. Tobacco Retailing by means of a self-service display is prohibited.”
SECTION 18. Section 8.25.030 of Chapter 8.25 of Title 8 of the Scotts Valley Municipal Code is hereby amended by adding subsection 8.25.030G to read as follows:
“8.25.030G Flavored Tobacco Sales Prohibited. The sale of Flavored Tobacco Products is prohibited.”
SECTION 19. SEVERABILITY. If any section, subsection, sentence, clause, phrase or portion of this Ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction such portion shall be deemed a separate, distinct and independent provision of such Ordinance and shall not affect the validity of the remaining portions thereof.

SECTION 20. REPEALS CONFLICTING ORDINANCES. All other ordinances of the City of Scotts Valley or provisions of the Scotts Valley Municipal Code which are in conflict with this Ordinance are hereby repealed to the extent of such conflict.

SECTION 21. CEQA. The City Council finds and determines that the enactment of this Ordinance is statutorily exempt from environmental review pursuant to the State CEQA Guideline Section 15061(b)(3) because the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 22. EFFECTIVE DATE. This Ordinance shall take effect thirty (30) days after the date of its adoption. Prior to the expiration of fifteen (15) days from the date of 013
13 adoption, this Ordinance shall be published in at least three (3) public places.

This Ordinance was introduced on the 18th day of May, 2022, and passed and adopted by the City Council of the City of Scotts Valley on the 15th day of June, 2022, by the following votes:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
_______________________
Donna Lind, Mayor
ATTEST:
_________________________________
Cathie Simonovich, City Clerk
APPROVED AS TO FORM:
_________________________________
Kirsten Powell, City Attorney
014
AGENDA ITEM PH 1
DATE: 06-15-2022

City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: June 15, 2022
TO: Honorable Mayor and City Council
FROM: Chris Lamm, Public Works Director/City Engineer
APPROVED: Mali LaGoe, City Manager
SUBJECT: PUBLIC HEARING: SKYPARK OPEN SPACE MAINTENANCE ASSESSMENT DISTRICT NO. 1; RESOLUTION NO. 1555-SP-34,
ANNUAL ENGINEER’S REPORT

SUMMARY OF ISSUE
In 1995, the City Council formed the Skypark Open Space Maintenance Assessment District No. 1 and subsequently authorized the levy and collection of an assessment to maintain the open space district. The revenue collected to maintain the district includes linear park, two greenbelt areas, and a self-insurance fund in the event of a slope failure.

The assessment district is formed pursuant to the Landscaping and Lighting Act of 1972 and must be renewed annually.

Each year, an Annual Engineer’s Report is filed, which includes an estimate of expenses to be paid by the district, a description of the work to be performed or improvements to be made, and benefit assessment, outlining the proposed budget for the cost of maintaining, repairing, and operating any public improvements. The FY 2022/23 assessment is $219.74 per unit, which is the same as the FY 2021/22 assessment. The total assessment revenue is estimated to be $41,750.60. At the time the assessment was established, an annual inflator was not included; therefore, the per unit assessment has remained the same since 1995.

Revenue generated by the assessment covers expenses related landscape services such as cultivation, trimming, spraying, fertilizing or treating of disease, and removal of trimmings, debris, and other solid waste; repair, reconstruction, removal, and/or replacement of items related to the maintenance of vegetation and open space, including but not limited to: irrigation systems, lighting, infrastructure (curbs, gutters, sidewalks); and utilities (water and electricity). The assessment also requires that funds be set aside in the event of a slope failure within the assessment area. A slope evaluation was updated in July 2021. The study showed the drainage culvert outfall on the south side is showing signs of being compromised causing inadequately controlled erosion at the toe of slope.

This will require continued annual inspection, and repair. 001
AGENDA ITEM PH 1
DATE: 06-15-2022

During the past year staff has met with concerned community members about the expectations of the maintenance and condition of the Skypark assessment district. Staff has work on identifying contracted services that could support the improvement of the area. A neighborhood meeting was held via zoom on May 25, 2022 to hear concerns from residents and explain the plan of action moving forward.

In February of 2022, Council awarded a multi-year contract to Brightview Landscaping for the maintenance of the Skypark soccer fields and greenbelts. The cost of the greenbelt maintenance to be allocated to the assessment district is $7,058.

In April, Public Works issued a request for proposals (RFP) for landscaping services throughout the City. Council action on June 1, 2022 would approve a multi-year contract with K&D Landscaping for landscape services on the Skypark Linear Trail including; annual fence replacement (200ft), annual mulching, monthly trimming, pruning, and general maintenance services, and a one-time refresh of the decomposed granite pathway. The cost of services for FY 2022/23 (excluding SB1383 mandated mulching) is $37,656
The table below reflects the proposed FY 2022/23 budget, estimated year-end for FY 2021/22 and FY 2020/21 actuals:

Proposed
FY 23/23
Estimated
FY 21/22
Actual
FY20/21
Assessments
Transfer from Insurance Fund
Total Revenue
$41,751
$0
$41,751
$41,751
$12,000
$53,751
$41,751
$12,000
$53,751
Expenses
Utilities
Landscape Maintenance/Repairs*
$15,000
$45,314
$15,000
26,614
$16,045.84
$52,397
Expense Subtotal $56,314 $40,614 $68,443
Self Insurance Fund – Slope Stability $0 $13,137 $0
Total Expenses $60,314 $53,751 $68,443
*includes estimated city staff time and contracted services The actual cost associated with the maintenance of the Skypark Open Space Linear trail and greenbelts exceed the assessment district revenue in the amount of $18,563 to be funded through the Public Works – Park Maintenance operating budget.

As required, all 190 owners were notified of the June 1, 2022 public meeting and the June 15, 2022 public hearing via mail. The purpose of the public meeting is to receive public testimony regarding the assessment. No other action is required.

This public hearing is being held to receive additional testimony from property owners, 002
AGENDA ITEM PH 1
DATE: 06-15-2022

overrule any protests received if appropriate, approve the FY 2022-2023 Annual Engineer’s Report, and adopt Resolution No. 1555-SP-34.

FISCAL IMPACT
Costs associated with maintaining, repairing, and operating the assessment district are funded through an annual assessment levy, which generates an estimated $41,751.

Supplemental expenses of $18,563 will be funded through the Public Works – Parks Maintenance operating budget.

STAFF RECOMMENDATION
It is recommended that the City Council hold a public hearing, overrule any protests received, approve the FY 2022/2023 Annual Engineer’s Report, and approve Resolution No. 1555-SP-34 ordering and authorizing the levy and collection of assessments therein pursuant to the Landscaping and Lighting Act of 1972 for the Skypark Open Space Maintenance Assessment District.

TABLE OF CONTENTS PAGE
Resolution No. 1555-SP-34………………………………………………………………..… 4
Annual Engineer's Report …………………………………………………………………… 7
003
RESOLUTION NO. 1555-SP-034

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY

ORDERING AND AUTHORIZING THE LEVY AND COLLECTION OF ASSESSMENTS THEREIN PURSUANT TO THE LANDSCAPING AND LIGHTING ACT OF 1972

SKYPARK OPEN SPACE MAINTENANCE DISTRICT
RESOLVED, by the City Council of the City of Scotts Valley, California, that, WHEREAS, pursuant to Resolution No. 1555-SP-07, ordering formation of territory into an Open Space Maintenance Assessment District and authorizing the levy and collection of assessments, adopted on the 6th day of December 1995 by the City Council pursuant to the Landscaping and Lighting Act of 1972, as amended, the Engineer of Work of said City has filed with the City Clerk the written report called for under said Act and by said Resolution No. 1555-SP-07, which report has been presented by said Engineer of Work to this Council and this Council has preliminarily approved and confirmed said report by its Resolution No. 1555-SP-03, adopted October 18, 1995, and ordered that the same stand as the report for the purpose of all subsequent proceedings pursuant to said Resolution No. 1555-SP-03; and
WHEREAS, June 1, 2022 at the hour of 6:00 p.m. and June 15, 2022 at the hour of 6:30 p.m., via zoom was appointed and fixed as the time and place of a public meeting and a public hearing to act upon the Engineer's Report and Resolution No. 1555-SP-034; and
WHEREAS, the City Clerk gave notice of said hearings by publication once a week for two weeks in the local newspaper published and circulated in said City, and by mailing or causing to be mailed notice of the adoption of said Resolution and of the filing of said report, postage prepaid, at least ten days before the date set for hearings of said protests, to all persons owning real property to be assessed, whose names and addresses appear on the last equalized assessment roll for County taxes prior thereto or as known to the City Clerk, which notice contained a statement of the time, place and purpose of the hearings and a statement of the total estimated cost of said proposed maintenance and improvements, the amount as shown by said report to be assessed against the particular parcel covered by the notice, together with a statement that any person interested may file a protest in writing as provided in said Act; and
WHEREAS, all written protests and other written communications were read by the Council and are on file with the Clerk and all persons desiring to be heard were fully heard.

NOW, THEREFORE, IT IS ORDERED, as follows:
004

1. That protests against said maintenance of improvements and levy of assessments were not signed by the owners of a majority or more of the area of the lands within the assessment district assessed for the costs and expenses of said work.

2. That said protests be, and each of them are, hereby overruled.

3. That the owners of one-half (1/2) or more of the area to be assessed for the cost of the project did not, at or prior to the time fixed for said hearings, file written protests against the said proposed maintenance and improvements as a whole, or against said district or the extent thereof to be assessed for the costs and expenses of said maintenance and improvements as a whole, or as to the Engineer's estimate of said costs and expenses, or against the maps and descriptions, or against the diagram or assessment to pay for the costs and expenses thereof.

4. That the district benefitted by said maintenance and improvements are to be assessed to pay the costs and expenses thereof, and the exterior boundaries thereof are more particularly described in said Resolution No. 1555-SP-07 and made a part hereof by reference thereto. That all public streets and highways within said assessment district in use in the performance of a public function as such shall be omitted from said district and from the levy and collection of the special taxes to be hereafter levied and collected to cover the costs and expenses of said maintenance and improvements.

5. That the Engineer's estimate of the itemized and total costs and expenses in connection therewith, contained in said Report, be, and it is hereby, finally adopted and approved as the Engineer's total and detailed estimate of the costs and expenses of said maintenance of improvements.

6. That the public interest and convenience require and said Council does hereby order the maintenance of improvements to be made as described in and in accordance with said Resolution No. 1555-SP-07 on file in the office of the Clerk, reference to which is hereby made for a more particular description of said maintenance of improvements, and also for further particular pursuant to the provisions of said Landscaping and Lighting Act of 1972.

7. That the diagram showing the assessment district referred to and described in said Resolution No. 1555-SP-07, and also the boundaries and dimensions of the respective subdivisions having been given a separate number upon said diagram, as contained in said report, be, and it is hereby, finally approved and confirmed as the diagram of the properties to be assessed to pay the costs and expenses of said maintenance of improvements.

8. That the assessment of the total amount of the costs and expenses of the proposed maintenance of improvements upon the several subdivisions of land in said district in proportion to the estimated benefits to be received by said subdivisions, respectively from said maintenance of improvements, and of the expenses incidental thereto, 005
contained in said report, be, and the same is hereby, finally approved and confirmed as the assessment to pay the costs and expenses of said maintenance of improvements.

9. That said Engineer's Report be, and the same is hereby, finally adopted and approved as a whole.

10. That the Clerk shall forthwith deliver to the Superintendent of Streets said assessment as confirmed by this Council with his/her certificate of such confirmation thereto attached and of the date thereof; and that said Superintendent of Streets shall record said diagram and assessment in his/her office in a suitable book to be kept for that purpose, and append thereto his/her certificate for the date of such recording, and such recordation shall be and constitute the assessment roll herein.

11. Proceedings shall be taken by this Council pursuant to said Act for any fiscal year during which an assessment is to be levied and collected within said district.

12. The Clerk of this City be, and is hereby, authorized and directed to file a certified copy of this resolution with the County Auditor of Santa Cruz County.

I hereby certify that the foregoing resolution was duly and regularly adopted and passed by the City Council of the City of Scotts Valley, California, at a regular meeting thereof held on the 15
th day of June, 2022, by the following vote of the members thereof:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved: ____________________________
Donna Lind, Mayor
Attest: ___________________________
Cathie Simonovich, City Clerk
006

ENGINEER'S REPORT
Fiscal Year 2022-2023

SKYPARK OPEN SPACE
MAINTENANCE ASSESSMENT DISTRICT NO. 1
Tract No. 1380

CITY OF SCOTTS VALLEY
Santa Cruz County, California
Donna Lind
Mayor
Jim Reed Derek Timm
Vice Mayor Council Member
Randy Johnson Jack Dilles
Council Member Council Member
Mali LaGoe
City Manager
Christopher Lamm RCE 82461
Public Works Director / City Engineer
007
Skypark Open Space Maintenance Assessment District No. 1

ASSESSMENT
Fiscal Year 2022-2023
WHEREAS, on October 18, 1995, the City Council of the City of Scotts Valley, California, pursuant to the provisions of the Landscaping and Lighting Act of 1972, adopted its Resolution No. 1555-SP-01, determining to initiate proceedings for the establishment of an assessment district to be known as the "Skypark Open Space Maintenance Assessment District No. 1", more particularly therein described; and WHEREAS, Resolution No. 1555-SP-25 appointed the City Engineer as Engineer of Work and directed the preparation and filing of an Engineer's Report presenting plans of the improvements to be maintained, a diagram for the assessment district, an estimate of cost for maintenance and servicing thereof, and an assessment of the estimated costs upon all assessable lots or parcels within the assessment district, to which resolutions reference is hereby made for further particulars.

NOW, THEREFORE, I, Christopher Lamm, RCE 82461, Public Works Director/City Engineer of said City of Scotts Valley, hereby make the following assessment to cover the portion of the estimated cost of the maintenance and servicing of the proposed improvements, including the costs and expenses incidental thereto, to be paid by the assessment district.

The amount to be paid for said maintenance and servicing of the proposed improvements, including the costs and expenses incidental thereto; to be paid by the assessment district for the fiscal year 2022-2023 is as follows:

Engineer's Estimate: $41,750.60
And I do hereby assess and apportion said portion of said total amount of the costs and expenses of said maintenance and servicing of the proposed improvements, including the costs and expenses incidental thereto, upon the several lots, pieces, or parcels or portions of lots of land liable therefore and benefitted thereby, and hereinafter numbered to correspond with the numbers upon the diagram, upon each, severally and respectively, in proportion to the benefits to be received by such lands respectively, from the maintenance hereto attached and by reference made a part hereof.

As required by said Act, a diagram is recorded in official records of the County of Santa Cruz showing the assessment district and also boundaries and dimensions of the respective lots or parcels of land within said assessment district generally described as the same existed at passage of said Resolution No. 1555-SP-01. 008
Said assessment is made upon the several lots or parcels of land within said assessment district in proportion to the estimated benefits to be received by said lots or parcels respectively, from the maintenance and servicing of the improvements. The diagram and assessment numbers appearing herein are the diagram numbers appearing on said diagram, to which reference is hereby made for a more particular description of said property.

I hereby place opposite the number of each lot or parcel of land assessed, the amount assessed thereon and the number of the assessment. Each lot or parcel of land is described in the assessment list by reference to its parcel number as shown on the Assessor's Maps of the County of Santa Cruz for the fiscal year 2022-2023 to the right of the parcel numbers and includes all of such parcels.
_______________________ ________________________________________ Date Christopher Lamm, RCE 82461
Public Works Director / City Engineer
009

DESCRIPTION OF WORK
Skypark Open Space Maintenance Assessment District No. 1

1. Maintaining and servicing of landscaping, vegetation and open space, including the cost of repair, removal or replacement of all or any part thereof, providing for the life, growth, health and beauty thereof, including cultivation, trimming, spraying, fertilizing or treating for disease or injury, the removal of trimmings, rubbish, debris and other solid waste, and water for the irrigation thereof.

2. Maintaining and servicing of decorative fencing, exercise par course and signage thereon, electronically controlled gates, and other ornamental structures and facilities, including the cost of repair, reconstruction, removal, or replacement of all or any part thereof.

3. Repair or replacement, including the installation and construction thereof, of hardscaping, including damaged curbs, gutters, walls, sidewalks, paving, water, irrigation systems, drainage, lighting, or electric facilities appurtenant to any of the improvements referenced in paragraphs 1 and 2 above, or which are necessary or convenient for the maintenance or servicing of said improvements.

4. The improvements referenced above are all within the boundaries of parcels 14, 15, 16, 17, as shown on Final Map, Tract No. 1355, Skypark, recorded in the official records of Santa Cruz County in the Book of Maps, Volume 89, Page 14, and within the boundaries of parcels A and B as shown on Final Map, Tract No. 1380, California Skypark, recorded in the official records of Santa Cruz County in the Book of Maps, Volume 89, Page 15 (hereinafter referred to as Final Maps).

5. The cost of slope subsidence/stability insurance or a self-insurance fund for any and all slope failures within the boundaries of parcels 14, 15, 16, 17, A and B as shown on the aforesaid Final Maps.

6. The maintenance, repair or replacement of such other facilities as may be appurtenant to the foregoing or which are necessary or convenient for the maintenance or servicing thereof.
010

SKYPARK OPEN SPACE
MAINTENANCE ASSESSMENT DISTRICT NO. 1
Engineer's Estimate
Fiscal Year 2022-2023

BENEFIT ASSESSMENT
The budget for the costs and expenses of maintaining and operating any and all of said public improvements for fiscal year 2022-2023 is as follows:

MAINTENANCE

1. Maintenance contract
a. Linear Trail Open Space (K&D Landscaping) $ 37,656.00 b. Greenbelt Maintenance (Brightview Landscaping) $ 7,058.00 b. Water Cost - Greenbelts $ 14,500.00
c. Utilities (PG&E) $ 500.00
Subtotal $ 59,714.00
Total maintenance cost (12-month period)

INSURANCE

1. Self-Insurance Fund for Park Slope/Bluff Area $ 0.00

INCIDENTALS

1. Printing and advertising (notices) $ 600.00
Subtotal $ 600.00
Total Costs $ 60,314.00
General Fund Contribution ($ 18,563.40)
BALANCE TO ASSESSMENT $ 41,750.60
011

RULES OF SPREADING ASSESSMENTS

1. District is to be assessed for all costs associated with the maintenance and servicing of the landscaping, hardscaping and appurtenant improvements within parcels 14, 15, 16, 17, as shown on Final Map, Tract No. 1355, Skypark, recorded in the official records of Santa Cruz County in the Book of Maps, Volume 89, Page 14, and within the boundaries of parcels A and B as shown on Final Map, Tract No., 1380, California Skypark, recorded in the official records of Santa Cruz County in the Book of Maps, Volume 89, Page 15.

2. Total costs shall be apportioned to all parcels within the district boundaries in accordance with the benefit derived from the landscaping improvements.

3. The benefit derived has been determined to be equal for all parcels. 012
Certificates
I, Cathie Simonovich, City Clerk of the City of Scotts Valley, hereby certify that the foregoing assessment roll, in the amount set forth, was filed with me on ___________________.
_______________________________
Cathie Simonovich, City Clerk
I, Christopher Lamm, Public Works Director / City Engineer of the City of Scotts Valley, do hereby certify that the amounts set forth under the Engineer's Estimate on Page 1 of the Assessment, and the individual amounts on the foregoing pages of the Assessment have been computed in accordance with the order of the City Council of said City of Scotts Valley, as expressed by Resolution No. 1555-SP-034, duly adopted by said City Council on June 15, 2022.
________________________________
Christopher Lamm, RCE 82461
Public Works Director / City Engineer
I, Cathie Simonovich, City Clerk of the City of Scotts Valley, hereby certify that the foregoing assessment, in the amount set forth in the Engineer's Estimate on Page 1 of the Assessment, was approved and confirmed by the City Council of the City of Scotts Valley on __________________.
_________________________________
Cathie Simonovich, City Clerk
The Assessment was filed in the office of the County Auditor of the County of Santa Cruz, California, on __________________.
__________________________________
Cathie Simonovich, City Clerk
I HEREBY CERTIFY that the enclosed Engineer's Report and Assessment was recorded in my office on ___________________.

Public Works Director / City Engineer
Scotts Valley, Santa Cruz County, California
By ________________________________
Christopher Lamm
013
SKYPARK OPEN SPACE MAINTENANCE ASSESSMENT DISTRICT NO. 1

ASSESSMENT ROLL
Ass. Assessor's Assessment
No. Parcel No. Property Owner Amount
______________________________________________________________________ 1001 22-691-01 Mario Guerrero Magno & Marife Arcinas $ 219.74 1002 22-691-02 Jyri Virkki $ 219.74
1003 22-691-03 Christopher & Dianne Wong $ 219.74
1006 22-691-06 Anna Kesler-Diaz $ 219.74
1007 22-691-07 Upendra Choudhary $ 219.74
1008 22-691-08 Brian D. & Teresa M. Hallin Trustees $ 219.74 1009 22-691-09 Soon K. & Young H. Yuh $ 219.74
1010 22-691-10 Michael Mark Goodwin $ 219.74
1011 22-691-11 Jaime & Emily Rakow $ 219.74
1012 22-691-12 Jeremy & Lori Gentile $ 219.74
1013 22-691-13 Clarence W. Jr. & Maureen A. Mezzell $ 219.74 1014 22-691-14 Robert L Hambelton $ 219.74
1015 22-691-15 Gillian McGlaze $ 219.74
1016 22-691-16 Matthew D & Spring V Babb $ 219.74
1017 22-691-17 Dan Joe Aspromonte Trustee $ 219.74
1018 22-691-18 Willie D. & Lisa J. Lu Trustees $ 219.74 1004 22-691-20 Jose F. & Heather T. Lomba $ 219.74
1005 22-691-21 Christian Life Center First Assembly of $ 219.74 1144 22-692-01 Deandre & Karen James $ 219.74
1145 22-692-02 Jeanette E. Anderson $ 219.74
1146 22-692-03 Jann L. Smart $ 219.74
1147 22-692-04 Carl Gyllenhammer $ 219.74
1148 22-692-05 Mark McWhinney $ 219.74
1149 22-692-06 Hin F. Boen et al $ 219.74
1150 22-692-07 Peter K. Thompson $ 219.74
1151 22-692-08 Edward J. & Karen E. McNamara $ 219.74
1152 22-692-09 Guadalupe & Sarah De Leon $ 219.74
1153 22-692-10 Jeffrey Allen Ott $ 219.74
1154 22-692-11 Owen Ward $ 219.74
1177 22-692-12 Alexandra Michelle-Conway & Michael Lomas $ 219.74 1178 22-692-13 Johnny Mon et al $ 219.74
1179 22-692-14 Yuriko Yamasaki $ 219.74
1180 22-692-15 David R & Melissa Zieper $ 219.74
1181 22-692-16 John C. & Kassi L. Van Lanen $ 219.74
1182 22-692-17 Sarah E. Christensen $ 219.74
1183 22-692-18 Robert Kurt Molholm $ 219.74
1184 22-692-19 Henry J. Kondrat et al $ 219.74
1185 22-692-20 Tuo Chen $ 219.74
014
1186 22
-692-21 David J. Albano $ 219.74
1187 22-692-22 Anjna & Kamaljit Mann $ 219.74
1188 22-692-23 Charles D Berg $ 219.74
1189 22-692-24 Peter Svensson $ 219.74
1190 22-692-25 Eric P. & Julie A. Miller $ 219.74
1107 22-693-01 Vincent & Samantha Auvray $ 219.74
1108 22-693-02 Catherine Hope & Gregory L. Horvath $ 219.74 1109 22-693-03 Mary Patricia & David Dorsey $ 219.74
1110 22-693-04 Brandon Charles & Nicole Sarah Finstad $ 219.74 1137 22-693-05 Shelley Noh $ 219.74
1138 22-693-06 Scott & Lisa M. MacGowan $ 219.74
1139 22-693-07 Ping Fai Ben Li et al $ 219.74
1140 22-693-08 Hubert Hudson Burroughs $ 219.74
1141 22-693-09 Sylvia P. Morrison $ 219.74
1142 22-693-10 David and Josie Texidor $ 219.74
1143 22-693-11 Jeffrey Kennedy & Jennifer Leigh Wade $ 219.74 1019 22-701-01 Sheryl Ann McEwan $ 219.74
1020 22-701-02 Clark P. & Sarah N. Winn $ 219.74
1021 22-701-03 David R. & Cheryl R. Schneider $ 219.74
1022 22-701-04 Andrew Seppy Bloom et al $ 219.74
1023 22-701-05 Mary Simpson $ 219.74
1024 22-701-06 Christopher S. Thomas $ 219.74
1025 22-701-07 James V. & Lea K. Reed $ 219.74
1026 22-701-08 Andrew Jacob Ringer $ 219.74
1027 22-701-09 Kevin & Julie L. Burnett $ 219.74
1028 22-701-10 Linda Lloyd Fisher Trustee et al $ 219.74 1029 22-701-11 Carolyn A. Nicholson $ 219.74
1030 22-701-12 Jason & Sandra Malone $ 219.74
1031 22-701-13 Roderick A. & Cheryle M. Brownfield $ 219.74 1032 22-701-14 Jessica I. Puccinelli $ 219.74
1033 22-701-15 Kendall Q. & Marisela Maria Sullivan $ 219.74 1176 22-702-01 Sergey Kataev $ 219.74
1175 22-702-02 Francis J. III & Bridget E. Gramkowski $ 219.74 1174 22-702-03 Karl R. & Marsha J. Landgraf $ 219.74
1173 22-702-04 James S. Szabo et al $ 219.74
1172 22-702-05 Roman Efimov $ 219.74
1171 22-702-06 Terrence A. & Megan A. O'Toole $ 219.74
1170 22-702-07 William Scholtz $ 219.74
1169 22-702-08 Janet Elizabeth Barber $ 219.74
1168 22-702-09 Justin J. & Sara R. Kiesby $ 219.74
1167 22-702-10 Debbie P. Dizon $ 219.74
1166 22-702-11 Charles E. Schmuck Trustee $ 219.74
1165 22-702-12 Steven & Kathleen F. Gullickson $ 219.74 1164 22-702-13 Dale R. Henry et al $ 219.74
1163 22-702-14 Brian & Michiyo Johnston $ 219.74
1162 22-702-15 Eric & Beth Seib $ 219.74
015
1161 22
-702-16 Kimberly M. Clark $ 219.74
1160 22-702-17 Amanda Danner $ 219.74
1159 22-702-18 Brian P. & Stacey G. Costello Trustees $ 219.74 1158 22-702-19 Gayathri Balaji $ 219.74
1157 22-702-20 Barry Young $ 219.74
1156 22-702-21 James Ray Jr. & Heather Lewis Sebring $ 219.74 1155 22-702-22 Nathan & Jodie Fillhardt $ 219.74
1134 22-702-26 Robert D. & Jayne E. Scott $ 219.74
1133 22-702-27 Mark T. & Helen L. Youmans $ 219.74
1132 22-702-28 Maria C. Torchio-Gauthier et al $ 219.74 1131 22-702-29 Sadra Emami $ 219.74
1115 22-702-30 Stephen R. Morairty $ 219.74
1114 22-702-31 The Salvation Army $ 219.74
1113 22-702-32 Stephen P. & Kristina N. Dinwiddie $ 219.74 1112 22-702-33 Jason P. & Amy M. Ivey $ 219.74
1111 22-702-34 Gavin J. & Jane F. Melford Trustees $ 219.74 1135 22-702-36 Cesar & Jacqueline DeSantos $ 219.74
1136 22-702-37 Douglas G. & Susan Diane Morey $ 219.74
1105 22-703-01 Araceli Henley $ 219.74
1106 22-703-02 Fazlul & Rokhsana B. Quader $ 219.74
1073 22-703-03 John Lau et al $ 219.74
1072 22-703-04 James E. & Deborah L. Nieters $ 219.74
1129 22-711-01 Craig W. & Kathleen M Adams Trustees $ 219.74 1128 22-711-02 Jordan & Jessica Boschen $ 219.74
1127 22-711-03 Lisa M Newton $ 219.74
1126 22-711-04 Gregory Allen Rexelle $ 219.74
1125 22-711-05 Peter C. Lombrozo et al $ 219.74
1124 22-711-06 William & Joanne Thompson $ 219.74
1123 22-711-07 Philip W. Crowley $ 219.74
1122 22-711-08 Tavin B & Kristina M. Lanpheir $ 219.74
1121 22-711-09 Thomas M. Carli & Margaret Walsh $ 219.74 1120 22-711-10 Jakko M. Kleijnen et al $ 219.74
1119 22-711-11 John B. & Susan A. Ledingham $ 219.74
1118 22-711-12 Brian J. & Valerie E. Kindell $ 219.74
1117 22-711-13 Kaylon M. & John A. Northington $ 219.74 1100 22-711-14 Kim & John M. Lariviere $ 219.74
1099 22-711-15 Henry R. & Stephanie A. Knight $ 219.74
1098 22-711-16 Donald G. II & Tamera L. Melrose $ 219.74 1097 22-711-17 Sandra Holland et al $ 219.74
1096 22-711-18 Deant A. & Marina P. Earl $ 219.74
1095 22-711-19 Craig Moorhead $ 219.74
1094 22-711-20 Omeed M. & Traci L. Ghaffarian $ 219.74
1093 22-711-21 April N. & Stephen A. Clarke $ 219.74
1092 22-711-22 Steven & Kierstin L. Trefethen $ 219.74
1091 22-711-23 Gareth & Karen S. Egerton $ 219.74
1090 22-711-24 Srinivasan & Hemamalini Sathish $ 219.74 016
1089 22
-711-25 Clark & Debra Patteson Trustees $ 219.74
1088 22-711-26 Tom Evenson Survivors Trust $ 219.74
1087 22-711-27 Mark R. & Marna S. Scarr Trustees $ 219.74 1086 22-711-28 Ursula T. Christiansen $ 219.74
1085 22-711-29 John D. Gullory & Suzanne Herrera $ 219.74 1084 22-711-30 Kim & Michael Cushing $ 219.74
1083 22-711-31 James D. Neef et al $ 219.74
1082 22-711-32 Alan & Laurie Okamura $ 219.74
1081 22-711-33 Sudesh Shetty Kodialbail et al $ 219.74
1080 22-711-34 Gerald E. Beyke $ 219.74
1079 22-711-35 Matthew & Marina M. Ward $ 219.74
1078 22-711-36 Keith & Jennifer Chomentowski $ 219.74
1130 22-711-38 Kevin Tien $ 219.74
1116 22-711-39 Barry W. Prentiss $ 219.74
1101 22-711-40 Richard P. Des Jardin Trustee et al $ 219.74 1102 22-711-41 Daniel Marhenke Peterson $ 219.74
1103 22-711-42 Kevin J. & Valerie W. Lenahan $ 219.74
1104 22-711-43 Susan Hanlock Chapman $ 219.74
1074 22-711-44 Larry D. & Rebecca C. Mosley $ 219.74
1075 22-711-45 Valerie Trunecek $ 219.74
1076 22-711-46 Todd & Michelle Riddle $ 219.74
1077 22-711-47 Jenny & Jefferson Delacruz $ 219.74
1034 22-712-01 Matthew A. & Gretchen K. Clark$ 219.74
1035 22-712-02 Claude H. & Cynthia M. Lopez $ 219.74
1036 22-712-03 Christopher W. Bensen & Tara Dalton $ 219.74 1037 22-712-04 Jeffrey L. Gee et al $ 219.74
1038 22-712-05 Emir & Denise Gurer $ 219.74
1039 22-712-06 Goran & Susan Domitrovic $ 219.74
1040 22-712-07 Milind Mohan Hirlekar $ 219.74
1041 22-712-08 Shaun Shahram & Habibeh Deyhim $ 219.74
1042 22-712-09 Robert J. Romero et al $ 219.74
1043 22-712-10 Kimberly A Brosseau $ 219.74
1044 22-712-11 Rodney W. & Christine E. Stanton $ 219.74 1045 22-712-12 Clifford & Lily Dong Trustees $ 219.74
1046 22-712-13 Tomas & Tereza Knappek $ 219.74
1047 22-712-14 Donald L. & Paula K. Cardoza Trustees $ 219.74 1048 22-712-15 Lee & Diane D. Basilotta $ 219.74
1049 22-712-16 Alan Van Wambeck Trustee et al $ 219.74
1050 22-712-17 Carlos S & Roberta N Camilo Denilson $ 219.74 1051 22-712-18 The Salvation Army $ 219.74
1052 22-712-19 Andrea Banzi & Amelia Louis e Jensen $ 219.74 1053 22-712-20 Mark Alan Newton et al $ 219.74
1054 22-712-21 Donald J. Hutchison Trustee $ 219.74
1071 22-713-01 Gary D. Thomsen $ 219.74
1070 22-713-02 Sheldon N. Rosell $ 219.74
1069 22-713-03 Jeffrey S. & Susan Leigh Rosell $ 219.74 017
1068 22-713-04 Daryl & Claire Spitzer $ 219.74
1067 22-713-05 Scott M. & Lailah Mueting $ 219.74
1066 22-713-06 Elsa Marmolejo $ 219.74
1065 22-713-07 Manish N. & Alpa M. Patel $ 219.74
1064 22-713-08 Justin R. Rishoff $ 219.74
1063 22-713-09 John Roman Mueller $ 219.74
1062 22-713-10 Christine & Nicholos Hutton $ 219.74
1061 22-713-11 Thomas M. & Barbara R. Evenson $ 219.74
1060 22-713-12 Mark & Vicki C. Teixeira $ 219.74
1059 22-713-13 William J. Simons $ 219.74
1058 22-713-14 Casey G. & Betty Nicole Peterson $ 219.74 1057 22-713-15 Wilma M. Caldwell $ 219.74
1056 22-713-16 Mallory & Lance Walkup $ 219.74
1055 22-713-17 Matthew R. Hakimi Trustee $ 219.74
TOTAL ASSESSMENTS $ 41,750.60
018
AGENDA ITEM PH 2
DATE: 06-15-2022

City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: June 15, 2022
TO: Honorable Mayor and City Council
FROM: Chris Lamm, Public Works Director/City
APPROVED: Mali LaGoe, City Manager
SUBJECT: PUBLIC HEARING: PINEWOOD ESTATES LANDSCAPE
MAINTENANCE ASSESSMENT DISTRICT; RESOLUTION
1213.36; ANNUAL ENGINEER'S REPORT

SUMMARY OF ISSUE
On July 15, 1987, Resolution 1213 was adopted by City Council to form the referenced assessment district pursuant to the Landscape and Lighting Act of 1972. The District improvements, which generally consist of ornamental landscaping, irrigation equipment, signs, fences, and storm detention ponds, were dedicated to the City by the developer of Pinewood Estates subdivision. These improvements were planted/constructed in the right-of-way of Lockewood Lane and in landscaping easements from the subdivision. The district participants are the twenty-five Pinewood Estates homeowners, who are being assessed for the cost of maintaining the improvements.

The District special fund is annually depleted and the owners reassessed each year.

Attached is the Engineer’s Report establishing the assessments this year at $240 per unit, the same as last year’s, for total revenue of $6,000.

As required, all 25 owners were notified of the June 1, 2022 public meeting and the June 15, 2022 public hearing via mail. The assessor’s role is used to obtain the current name and address of each property owner to be notified of the proceedings. The purpose of the public meeting is to receive public testimony from the affected property owners regarding the assessment. No other action is necessary.

This public hearing is being held to receive additional testimony from property owners, overrule any protests received, if appropriate, approve the FY 2022-23 Annual Engineer’s Report, and adopt Resolution No. 1213.36.

FISCAL IMPACT
Costs associated with the maintenance and repair of the assessed area are funded through an assessment district. The established assessment amount is $240 per unit/parcel, generating approximately $6,000 annually.
001
AGENDA ITEM PH 2
DATE: 06-15-2022

STAFF RECOMMENDATION
It is recommended that the City Council hold a public hearing, overrule any protests received, approve the FY 2022-23 Annual Engineer’s Report, and approve Resolution No. 1213.36 ordering and authorizing the levy and collection of assessments therein pursuant to the Landscaping and Lighting Act of 1972 for the Pinewood Estates Landscaping Maintenance District

TABLE OF CONTENTS PAGE
Resolution 1213.36 …………………………………………………………………………… 3
Annual Engineer's Report ………………………………………………………………….… 6
002
RESOLUTION NO. 1213.36

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY

ORDERING AND AUTHORIZING THE LEVY AND COLLECTION OF ASSESSMENTS THEREIN PURSUANT TO THE LANDSCAPING AND LIGHTING ACT OF 1972

PINEWOOD ESTATES LANDSCAPE MAINTENANCE DISTRICT
RESOLVED, by the City Council of the City of Scotts Valley, California, that:

WHEREAS, pursuant to Resolution No. 1192, a Resolution of Public Interest and Convenience to Form a Landscaping Maintenance District and Ordering Preparation of an Engineer's Report adopted on the 4th day of February, 1987, by the City Council pursuant to the Landscaping and Lighting Act of 1972, as amended, the Engineer of Work of said City has filed with the City Clerk the written report called for under said Act and by said Resolution No. 1192, which report has been presented by said Engineer of Work to this Council and this Council has preliminarily approved and confirmed said report by its Resolution No. 1213, adopted July 15, 1987, and ordered that the same stand as the report for the purpose of all subsequent proceedings pursuant to said Resolution No. 1213.

WHEREAS, June 1, 2022 at the hour of 6:00 p.m. and June 15, 2022 at the hour of 6:30 p.m., via zoom was appointed and fixed as the time and place of a public meeting and a public hearing to act upon the Engineer's Report and Resolution No. 1213.36.

WHEREAS, the City Clerk gave notice of said meetings/hearings by publication once a week for two weeks in the local newspaper published and circulated in said City, and by mailing or causing to be mailed notice of the adoption of said Resolution and of the filing of said report, postage prepaid, at least ten days before the date set for hearings of said protests, to all persons owning real property to be assessed, whose names and addresses appear on the last equalized assessment roll for County taxes prior thereto or as known to the City Clerk, which notice contained a statement of the time, place and purpose of the hearings and a statement of the total estimated cost of said proposed maintenance and improvements, the amount as shown by said report to be assessed against the particular parcel covered by the notice, together with a statement that any person interested may file a protest in writing as provided in said Act.

WHEREAS, all written protests and other written communications were read by the Council and are on file with the Clerk and all persons desiring to be heard were fully heard.
003
NOW, THEREFORE, IT IS ORDERED, as follows:

1. That protests against said maintenance of improvements and levy of assessments were not signed by the owners of a majority or more of the area of the lands within the assessment district assessed for the costs and expenses of said work.

2. That said protests be, and each of them are, hereby overruled.

3. That the owners of one-half (1/2) or more of the area to be assessed for the cost of the project did not, at or prior to the time fixed for said hearings, file written protests against the said proposed maintenance and improvements as a whole, or against said district or the extent thereof to be assessed for the costs and expenses of said maintenance and improvements as a whole, or as to the Engineer's estimate of said costs and expenses, or against the maps and descriptions, or against the diagram or assessment to pay for the costs and expenses thereof.

4. That the district benefitted by said maintenance and improvements are to be assessed to pay the costs and expenses thereof, and the exterior boundaries thereof are more particularly described in said Resolution Nos. 1192 and 1213 and made a part hereof by reference thereto. That all public streets and highways within said assessment district in use in the performance of a public function as such shall be omitted from said district and from the levy and collection of the special taxes to be hereafter levied and collected to cover the costs and expenses of said maintenance and improvements.

5. That the Engineer's estimate of the itemized and total costs and expenses in connection therewith, contained in said Report, be, and it is hereby, finally adopted and approved as the Engineer's total and detailed estimate of the costs and expenses of said maintenance of improvements.

6. That the public interest and convenience require and said Council does hereby order the maintenance of improvements to be made as described in and in accordance with said Resolution Nos. 1192 and 1213 on file in the office of the Clerk, reference to which is hereby made for a more particular description of said maintenance of improvements, and also for further particular pursuant to the provisions of said Landscaping and Lighting Act of 1972.

7. That the diagram showing the assessment district referred to and described in said Resolution No. 1192 and 1213, and also the boundaries and dimensions of the respective subdivisions having been given a separate number upon said diagram, as contained in said report, be, and it is hereby, finally approved and confirmed as the diagram of the properties to be assessed to pay the costs and expenses of said maintenance of improvements.

8. That the assessment of the total amount of the costs and expenses of the proposed maintenance of improvements upon the several subdivisions of land in said 004
district in proportion to the estimated benefits to be received by said subdivisions, respectively from said maintenance of improvements, and of the expenses incidental thereto, contained in said report, be, and the same is hereby, finally approved and confirmed as the assessment to pay the costs and expenses of said maintenance of improvements.

9. That said Engineer's Report be, and the same is hereby, finally adopted and approved as a whole.

10. That the Clerk shall forthwith deliver to the Superintendent of Streets said assessment as confirmed by this Council with his/her certificate of such confirmation thereto attached and of the date thereof; and that said Superintendent of Streets shall record said diagram and assessment in his/her office in a suitable book to be kept for that purpose, and append thereto his/her certificate for the date of such recording, and such recordation shall be and constitute the assessment roll herein.

11. Proceedings shall be taken by this Council pursuant to said Act for any fiscal year during which an assessment is to be levied and collected within said district.

12. The Clerk of this City be, and is hereby, authorized and directed to file a certified copy of this resolution with the County Auditor of Santa Cruz County.

I hereby certify that the foregoing resolution was duly and regularly adopted and passed by the City Council of the City of Scotts Valley, California, at a regular meeting thereof held on the 15
th day of June 2022, by the following vote of the members thereof:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved: ____________________________
Donna Lind, Mayor
Attest: ___________________________
Cathie Simonovich, City Clerk
005

ANNUAL ENGINEER'S REPORT
Fiscal Year 2022-2023

PINEWOOD ESTATES

LANDSCAPING MAINTENANCE DISTRICT
Tract No. 1121
City of Scotts Valley
Santa Cruz County, California
Donna Lind
Mayor
Jim Reed Derek Timm
Vice Mayor Council Member
Randy Johnson Jack Dilles
Council Member Council Member
Mali LaGoe
City Manager
Christopher Lamm, RCE 82461
Public Works Director / City Engineer
006

ASSESSMENT
Fiscal Year 2022-2023
WHEREAS, on February 4, 1987, the City Council of the City of Scotts Valley, California, pursuant to the provisions of the Landscaping and Lighting Act of 1972, adopted its Resolution No. 1192, determining to undertake proceedings for the establishment of an assessment district to be known as the "Pinewood Estates Landscaping Maintenance District", more particularly therein described; and WHEREAS, on July 15, 1987, the City Council of the City of Scotts Valley, California adopted Resolution No. 1213 primarily approving and confirming the written report by the Engineers of Work called for under said Act, and ordered that the same stand as the report for the purpose of all subsequent proceedings had pursuant to said Resolution No. 1213; and
WHEREAS, on August 17, 1988, the City Council of said City of Scotts Valley adopted Resolution No. 1213.1 setting a time and place of hearing protest on levy of assessments pursuant to said Act; and
WHEREAS, on September 7, 1988, the City Council of said City of Scotts Valley adopted Resolution No. 1213.2 ordering and authorizing the levy and collection of assessments therein pursuant to the said Act; and
WHEREAS, the proceedings under said Act require an annual engineers report to be prepared and filed in the same way as the report for the formation of the district for each year in which an assessment is to be levied.

NOW, THEREFORE, I, Christopher Lamm, RCE 82461, Public Works Director/City Engineer of said City of Scotts Valley, hereby make the following assessment to cover the portion of the estimated cost of the maintenance and servicing of the proposed improvements, including the costs and expenses incidental thereto, to be paid by the assessment district.

The amount to be paid for said maintenance and servicing of the proposed improvements, including the costs and expenses incidental thereto, to be paid by the assessment district for the fiscal year 2022-2023 is as follows:

Engineer's Estimate: $6,000
And I do hereby assess and apportion said portion of said total amount of the costs and expenses of said maintenance and servicing of the proposed improvements, including the costs and expenses incidental thereto, upon the several lots, pieces, or parcels or portions of lots of land liable therefore and benefitted thereby, and hereinafter numbered to correspond with the numbers upon the diagram, upon each, severally and respectively, 007
in proportion to the benefits to be received by such lands respectively, from the maintenance hereto attached and by reference made a part hereof.

As required by said Act, a diagram is recorded in official records of the County of Santa Cruz showing the assessment district and also the boundaries and dimensions of the respective lots or parcels of land within said assessment district as the same existed at the passage of said Resolution No. 1192.

Said assessment is made upon the several lots or parcels of land within said assessment district in proportion to the estimated benefits to be received by said lots or parcels respectively, from the maintenance and servicing of the improvements. The diagram and assessment numbers appearing herein are the diagram numbers appearing on said diagram, to which reference is hereby made for a more particular description of said property.

I hereby place opposite the number of each lot or parcel of land assessed, the amount assessed thereon and the number of the assessment. Each lot or parcel of land is described in the assessment list by reference to its parcel number as shown on the Assessor's Maps of the County of Santa Cruz for the fiscal year 2022-2023 to the right of the parcel numbers and includes all of such parcels.

Dated: _____________________
_________________________________
Christopher Lamm, RCE 82461
Public Works Director / City Engineer
008

DESCRIPTION OF WORK

1. Maintaining and servicing of landscaping and ornamental vegetation, including the cost of repair, removal or replacement of all or any part thereof, providing for the life, growth, health and beauty thereof, including cultivation, trimming, spraying, fertilizing or treating for disease or injury, the removal of trimmings, rubbish, debris and other solid waste, and water for the irrigation thereof.

2. Maintaining and servicing of decorative fencing, signage and other ornamental structures and facilities, including the cost of repair, reconstruction, removal, or replacement of all or any part thereof.

3. Repair or replacement, including the installation and construction thereof, of hardscaping, including damaged curbs, gutters, walls, sidewalks, paving, water, irrigation systems, drainage, lighting, or electric facilities within the landscape maintenance easement.

4. The maintenance, repair or replacement of such other facilities as may be appurtenant to the foregoing or which are necessary or convenient for the maintenance or servicing thereof.
009

ESTIMATE OF COSTS

ANNUAL MAINTENANCE COSTS
Fiscal Year 2022-2023
Engineer's Estimate (City Engineer)
Maintenance Expenses
Maintenance and servicing $ 3,920.00
Irrigation and power $ 1,500.00
Subtotal $ 5,420.00
Incidental Expenses
City administration $ 600.00
Subtotal $ 600.00
Total Estimated Cost $ 6,020.00
Net Amount to be Assessed $ 6,000.00
010

RULES OF SPREADING ASSESSMENTS

1. District is to be assessed for all costs associated with the maintenance and servicing of the landscaping, hardscaping and appurtenant improvements within the boundaries of the district.

2. Total costs shall be apportioned to all parcels within the district boundaries in accordance with the benefit derived from the landscaping improvements.

3. Because the landscaping enhances an area serving as a drainage detention system for all parcels within the boundaries of the district, the benefit derived has been determined to be equal for all parcels.
011
Certificates
I, Cathie Simonovich, City Clerk of the City of Scotts Valley, hereby certify that the foregoing assessment, in the amount set forth, was filed with me on ____________________.
_____________________
Cathie Simonovich, City Clerk
I, Christopher Lamm, Public Works Director / City Engineer for the City of Scotts Valley, do hereby certify that the amounts set forth have been re-computed in accordance with the order of the City Council of said City of Scotts Valley, as expressed by Resolution No. 1213.36, duly adopted by said City Council on June 15, 2022. ________________________
Christopher Lamm, RCE 82461
Public Works Director / City Engineer
I, Cathie Simonovich, City Clerk of the City of Scotts Valley, hereby certify that the foregoing assessment, in the amount set forth was approved and confirmed by the City Council of the City of Scotts Valley on ____________________. ________________________
Cathie Simonovich, City Clerk
The Assessment was filed in the office of the County Auditor of the County of Santa Cruz, California, on ___________________.
________________________
Cathie Simonovich, City Clerk

I HEREBY CERTIFY that the enclosed Engineer’s Report and Assessment was recorded in my office on _________________.

Public Works Director/City Engineer
Scotts Valley, Santa Cruz County, California
By:_______________________________
Christopher Lamm
012
City of Scotts Valley

PINEWOOD ESTATES LANDSCAPING MAINTENANCE DISTRICT

ASSESSMENT ROLL
2022-2023
Assessment Assessor's Assessment
Number Parcel No. Property Owner Amount
____________________________________________________________________________ 1 021-172-01 BIAN ZHIXI $240
2 021-172-02 MARINO RUSSELL J TRUSTEE $240
3 021-172-03 MARTIN GEOFFREY & SUSAN H/W JT $240
4 021-172-04 KELLER TERRY A & JULIE TRUSTEES $240
5 021-172-05 EDWARDS ANDREA U/W $240
6 021-172-06

WOLF MARSHALL E & KRISTIA BURGESS
TRUSTEES $240
7 021-172-07 HALL EUGENE J & JENNIFER M $240
8 021-172-08

O CONNOR MICHAEL CHARLES & SARAH WRIGHT
H/W CP R $240
9 021-172-09 ROBINSON CARLOS E H/W JT ETAL $240
10 021-172-10 ROBERTS TRACY LEE $240
11 021-172-11 DUNN JOHN & JANINE H/W CP RS $240
12 021-172-12 GONG QI H/W CP RS ETAL $240
13 021-172-13 MC CONNELL MELVIN M & MIRIAM C H/W JT $240 14 021-172-14 MCMULLEN AMY DEANNE & ROBERT WILLIAM $240 15 021-301-01 LINN JOEL M & KARINA H/W CP RS $240
16 021-301-02 SION VINICIO & KRISTY CO-TRUSTEES $240
17 021-301-03 DAVIDSON MARK S & EVE M $240
18 021-301-04 KEITH SETH $240
19 021-301-05 LEMMON CYNTHIA M TRUSTEE $240
20 021-301-07 SUGGS JOHN B & LINDA L TRUSTEES $240
21 021-301-08 NORDSTROM MARK JOHN TRUSTEE ETAL $240
22 021-301-09 SPIEGEL JAMES D TRUSTEES ETAL $240
23 021-301-10 MCELREA SIMON J S & KRISTIN L $240
24 021-301-11 COX CLINT R $240
25 021-301-12 ROSS BRANDON J & KATHY C $240
___________
TOTAL ASSESSMENTS: $ 6,000
013
AGENDA ITEM 1
DATE: 06-15-2022

City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: June 15, 2022
TO: Honorable Mayor and City Council
FROM: Mali LaGoe, City Manager
SUBJECT: APPROVE LEASE AGREEMENT FOR 251B KINGS VILLAGE ROAD

WITH THE SCOTTS VALLEY COMMUNITY THEATER GUILD AND
APPROVE THE RELEASE OF $95,000 LENNAR FUNDS TO

REIMBURSE EXPENSES RELATED TO FACILITY IMPROVEMENTS

SUMMARY OF ISSUE
In June 2019, the City of Scotts Valley (City) issued a Request for Proposals to Lease the 9,080 square foot space adjacent to the Scotts Valley Branch Library at 251B Kings Village Road. Two proposals were received and on October 2, 2019, the City Council directed staff to enter into lease negotiations with the selected tenant, the Scotts Valley Community Theater Guild (Guild). On March 4, 2020 the City Council approved a lease agreement between the City and the Guild anticipating final construction and the opening of the theater to occur months later.

Just weeks later, the COVID-19 pandemic began and impacted the Guild’s ability to complete construction as well as halted all in person events for most of the last two years. Because of these impacts, the performance terms of that lease were unattainable and the lease terms are no longer relevant. The City Manager has met with the Guild representative, Larry Smith, several times over the last two months to negotiate a new lease. The current situation reflects that the theater construction is almost complete, and the Guild anticipates a summer 2022 occupancy permit and opening of the new theater space.

The City and the Guild have negotiated terms and the lease is presented for Council approval.

The major terms of the lease include:

TERM: The initial term commences on July 1, 2022, for two years ending June 30, 2024, plus an option to extend for two additional years, or through June 30, 2026.

USE: The Guild will use the space for a multi-use and community, cultural and performing arts center, which shall offer a robust and varied assortment of educational, entertainment, vocational, informative, cultural arts and other suitable programming and events.

RENT: $1/year subject to conditions of use and programming minimum requirements. If conditions are not met, monthly rent will be charged at $1000/month. In addition, the Theater will reimburse the City for 41% pro-rata share of the City’s costs to maintain the shared parking lot and landscaping around the shared parking lot.

PERFORMANCE: In Year 1, at a minimum, Tenant shall hold 5 major performing arts productions open to the public and shall rent the Premises at least 2 times per month for other uses. During Year 2 of the Lease, Tenant shall hold a minimum of 7 major performing arts productions and shall rent the Premises at least weekly for other uses. If the Lease is extended for two additional years, the programming shall continue with a 001
AGENDA ITEM 1
DATE: 06-15-2022

minimum of the Year 2 performance measures.

COMMUNITY BENEFIT: The Guild will provide use of the facility at no charge for a designated number of days of Scotts Valley Branch Library programming, Scotts Valley Recreation Department programming and Scotts Valley Unified School District programming. In addition, Scotts Valley users will have preference for reservations and the theater will bring in hundreds of people who will take advantage of the City’s restaurants, retail establishments and hotels which will generate sales/TOT tax. The theater will offer a unique venue for community groups to rent and will offer discounted rental rates to nonprofit organizations for fundraisers and other events.

PROFESSIONAL MANAGEMENT: The Guild will be required to hire and retain professional staff to manage the facility, coordinate rental and use scheduling and oversee day to day operations of the theater.

On August 20, 2014, the City Council pledged $25,000 to the Scotts Valley Theater Guild “to be used for specific items to stay within the theater.” In addition, in the 2016-17 CIP budget, $70K was included for the Performing Arts Center for “Fire Code, ADA, Title 24 and other requirements/improvements.” Therefore, the City has had budgeted a total $95,000 to support the permanent improvements to the facility. Over the past eight years, the Guild has made numerous permanent improvements to the building including: Fire alarms and sprinkler system, plumbing, electrical and HVAC upgrades, new exterior doors, extensive concrete work to level the floor and new bathroom facilities. At this time, the Guild has expended over $150,000 in these improvements therefore it would be appropriate after the execution of this new lease, to release these obligated funds to the Guild to reimburse for permanent improvements to the building.

FISCAL IMPACT
There is no fiscal impact of this lease agreement as the rent is negligible and the Guild will reimburse the City for its share of maintenance of the parking lot and landscaping. The guild will cover utility and operational costs of the facility.

The $95,000 facility improvement reimbursement is budgeted utilizing Lennar Funds. Approving the release of these funds would reduce the Lennar Fund balance by $95,000.

STAFF RECOMMENDATION
It is recommended that the City Council approve the lease agreement with the Scotts Valley Community Theater Guild for 251B Kings Village Road and authorize the City manager to execute the lease agreement.

Further, it is recommended that the City Council approve the payment of $95,000 to the Scotts Valley Community Theater Guild for costs related to permanent building improvements associated with the theater renovation.

TABLE OF CONTENTS PAGE
Lease Agreement with the Scotts Valley Community Theater Guild......................................3 002
1 LEASE AGREEMENT
THIS LEASE AGREEMENT (THE “AGREEMENT”) IS MADE THIS 16TH DAY OF JUNE 2022, BY AND BETWEEN THE CITY OF SCOTTS VALLEY (“LANDLORD”) AND THE SCOTTS VALLEY COMMUNITY THEATER GUILD (“TENANT”)

RECITALS
A. In 2008, the Landlord acquired property located at 251 Kings Village Road, Scotts Valley, California, 95066 (the “Property”). A portion of the property was developed as a Tier II Library of 13,150 square feet.

B. The remainder of the Property was reserved for a civic use to benefit the residents of the City of Scotts Valley (the “Premises”).

C. Tenant is a non-profit organization formed to operate and manage a cultural and performing arts center in the City of Scotts Valley.

D. Landlord and Tenant previously entered into those certain lease agreements dated March 1, 2020.

E. Landlord and Tenant desire to enter into a new lease for the Premises which will replace the prior agreements.

NOW, THEREFORE, Landlord and Tenant agree to all the terms and conditions of this Agreement as follows:

ARTICLE 1 - BASIC LEASE PROVISIONS
The following are basic terms applicable to this Agreement. The Sections and Exhibits referenced below in parenthesis explain and define the basic terms specified below and are to be read in conjunction with basic terms herein:

1.01 Commencement of Term. July 1, 2022 (Section 3.01).

1.02 Term. Two (2) year term which expires June 30, 2024, and one option from July 1, 2024 through June 30, 2026, subject to the conditions of Article 3.

1.03 Building. The building located at 251 Kings Village Road, Scotts Valley.

1.04. Premises. A portion of the Building consisting of 9,080 square foot portion of the Building, associated outdoor space at the rear of the Building, sidewalk adjacent to the Premises and common parking shared with the adjacent library.

1.05 Floor Area. 9,080 square feet.

1.06 Rent. $1/year subject to the conditions of Articles 4 and 6.

1.07 Use of Premises. Premises shall be utilized as a multi-use, community, cultural and performing arts center, which shall offer a robust and varied assortment of 003
2 educational, entertainment, vocational, informative, cultural arts and other suitable programming and events. See Article 6 for full description.

ARTICLE 2 - LEASE OF PREMISES

2.01 City of Scotts Valley as Landlord. Tenant acknowledges and understands that Landlord is a public agency consisting of numerous offices, departments, agencies and districts. Whenever a provision contained in this Agreement, or any extension, modification or amendment, requires the written consent of Landlord, such consent must be obtained from the then acting City Manager of the City of Scotts Valley. Tenant may not rely on any statement or representation by any other employee, agent or representative of Landlord in obtaining such consent and any such statement or representation other than the express written consent of the City Manager shall be null and void and have no effect. Nothing contained in this Section shall limit in any way the authority of any office, department, or agent of the Landlord from approving or withholding consent to any event or activity regulated by local law.

2.02 Premises. Landlord leases to Tenant and Tenant leases from Landlord the Premises. The Premises shall not include, and the Tenant shall have no rights in, the library which is located in the Building. A diagram of the location of the Premises is attached to this Agreement as Exhibit A. A floor plan of the Premises is attached to this Agreement as Exhibit B.

2.03 Reservations. Landlord reserves the right at any time with 24 hours notice to Tenant to make alterations or additions to the exterior of the Premises, the remainder of the building, the parking lot and the landscaping on the property. Landlord also reserves the right to construct other buildings or improvements on the property and to make alterations or additions thereto. Easements for light and air are not granted in this Agreement. Landlord further reserves the right to enter and access the roof of the Premises or to repair and maintain the roof and to use any space within walls or above the ceiling finish and beneath the floor surface for utility lines and conduits.

2.04 Condition of Premises. Tenant acknowledges that it recognizes the uniqueness of the Premises and accepts them in their current and disclosed condition existing on the effective date of this Agreement, subject to all applicable zoning, municipal, county or state laws, ordinances and regulations affecting the use of the Premises. Tenant acknowledges that it has satisfied itself, by its own independent investigation that the Premises are suitable for its intended use and neither Landlord nor its agents or representatives have made any representation or warranty as to the present or future suitability of the Premises for the conduct of Tenant's business.

2.05 Public Agency Use of the Premises. The parties recognize that the Premises provide a unique opportunity for the community through the cultural and performing arts events held on the Premises as well as the use of the Premises to offer other programs to the residents of Scotts Valley. The parties hereby recognize that the City, the Scotts Valley Library and Scotts Valley Unified School District shall be entitled 004
3 to use the Premises as outlined in Exhibit C attached hereto and incorporated herein to offer classes and other programs for the residents of Scotts Valley and the County of Santa Cruz.

2.06 Professional Management. Tenant will be required to hire and retain professional staff to manage the facility, coordinate rental and use scheduling and oversee day to day operations of the Premises. At a minimum, Tenant will be required to hire a “Theater Manager” who will serve as the point of contact for: Public Agencies for scheduling; the City as Landlord as related to this Agreement; and for obtaining approval from the City’s Building Official and Fire Department for all event configurations per Section 6.03. Tenant shall notify the City Manager within 3 business days of any time the Theater Manager role becomes vacant. If the vacancy persists beyond 60 days or causes unreasonable delays or prevents the Public Agencies use as described in Exhibit C from occurring, Landlord may consider Tenant in Default Subject to Article 11 of this Agreement and pursue corrective action or termination.

ARTICLE 3 - TERM

3.01 Commencement of Term. The term (the “Term”) of this Agreement shall commence on the date specified in Section 1.01 (the “Commencement Date”) and shall continue until the date of termination specified in Section 1.02, unless terminated sooner in accordance with the terms and provisions of this Agreement.

3.02 Option to Extend Term. Tenant shall, provided the Lease is in full force and effect, Tenant is not in default under any of the terms and conditions of the Lease and Tenant has met the programming metrics of Years 1 and 2 as outlined in Section

6.07 below, Tenant shall have one (1) option to extend this Lease for a term of 2 years (July 1, 2024 - June 30, 2026), on the same terms and conditions set forth in the Lease, or upon such terms mutually agreeable to Landlord and Tenant.

3.03 Termination. The Landlord may terminate this Lease, if Tenant has not met the established criteria agreed to by the Parties at the end of the 2 year term ending June 30, 2024. If Landlord so terminates the Lease, Tenant shall vacate the Premises and Tenant shall not have any remaining obligations, including rent, from the date of Termination except for its obligations on leaving the Premises in the condition described in this Lease and any indemnification obligations accruing during the time of occupancy.

In addition, the Landlord may terminate the Lease in the event of a Default as defined in Article 11 below.

ARTICLE 4 - RENT
The Rent for the Premises shall be paid as follows:

4.01 Rent. In exchange for the Public Agency’s use of the theater as defined in Section 2.05, the potential sales tax generation and Tenant’s agreement to hire a professional manager as required in Section 2.06, Tenant shall pay Rent in the amount 005
4 of $1.00 for the first year of the Term. The Annual Rent will remain $1.00 for Year 2 as long as the Use Criteria defined in Section 6.07 is met for the previous year and Tenant maintains a professional manager as required in Section 2.06. If the Use Criteria are not met in the first year or the Tenant fails to maintain a professional manager, Monthly Rent will be charged at $1,000/month during the second year of the Lease ($12,000 annually) and in the case of the failure to maintain the professional manager, until such time as a professional manager is reemployed. If Use Criteria is not met in Year 2 and/or Tenant does not maintain a professional manager in Year 2, the Landlord may, at its sole discretion, not extend the Lease for the additional 2 year optional term.

4.02. Annual rent shall be payable on July 1st of each year. If monthly rent is required in Year 2 as described above, rent shall be payable to Landlord on the 1st of each month.

ARTICLE 5 - TAXES AND ASSESSMENTS

5.01 Personal Property Taxes. Tenant shall pay before delinquency all federal, state or local taxes, assessments, license fees, and other charges that are levied and assessed against Tenant’s personal property installed or located in or on the building, and that become payable during the term. On demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments.

5.02 Possessory Interest Taxes. Tenant shall pay before delinquency all possessory interest taxes, assessments, license fees, and other charges that are levied and assessed against the leasehold interest. “Possessory Interest Tax” means that tax imposed pursuant to laws of the State of California on leaseholds of tax exempt property and does not include taxes on Tenant’s inventory, personal, or any other tax or assessment that is presently or may, in the future be levied. On demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments.

ARTICLE 6 - USE

6.01 Use of Premises. Tenant shall use the Premises solely for the use specified in Section 1.07 herein. No other uses shall be permitted.

6.02 Hours of Operation. All uses on the Premises shall take place between the hours of 7:00am and 12:00am (midnight). Tenant shall not operate nor allow someone to operate the Premises in such a way as to cause a nuisance or violate any provisions of local, state or federal law.

6.03 Required Safety Inspections. Tenant intends to utilize various configurations of stage placement and chairs for events in the Premises. Each proposed configuration need to be approved and inspected by the City’s Building Department prior to use. Prior to the first 2 uses of each configuration, Tenant shall supply a to-scale drawn plan depicting each configuration and arrange for the City’s Building Inspector and the 006
5 Scotts Valley Fire District to review the configurations to ensure there are no safety issues created by the configurations.

6.04 Parking. When the Library is closed, Tenant shall have the right to use any parking on the Property. When the Library is open, Tenant shall have the right to use its pro rata share (41%) of the parking on the Property.

6.05 Restrooms. Tenant shall maintain adequate ADA accessible restroom facilities.

6.06 Signs and Advertising Matter.
(a) Tenant has the right to install signs at its sole expense on the outside of the Premises and (if constructed) on a portion of the monument sign located in the parking lot as permitted by the City’s Zoning Code and the Town Center Specific Plan.

All signage is subject to the prior written consent of Landlord which shall not be unreasonably withheld and is subject to Tenant obtaining and all permits required for any signs. Except as provided above, Tenant will not place, install, maintain or construct or allow any third party to place, install, maintain or construct any sign, banner, flag, awning or canopy, covering, or advertising matter on the roof, or on any exterior door, exterior wall or outside surface of the windows of the Premises without Landlord’s prior written consent, which shall not be unreasonably withheld. Tenant further agrees to maintain such sign, awning, canopy, decoration, lettering, advertising matter or window coverings in good condition and repair at all times.
(b) No advertising medium shall be used or allowed to be used by Tenant which can be heard or experienced outside the Premises, including without limitation, flashing lights, searchlights, loudspeakers, phonographs, radios or television.

Except with Landlord’s prior written consent, which shall not be unreasonably withheld, Tenant shall not display, paint or place, or cause to be displayed, painted or placed, any handbills, bumper stickers or other advertising devices on any vehicle parked in the parking area of the Property, including those belonging to Tenant, or to Tenant’s agent or any other person; nor shall Tenant distribute or cause to be distributed on the Property any handbills or other advertising devices.

6.07 Programming.
(a) Tenant is responsible for scheduling and leasing the Premise to maximize the value of the venue for the Scotts Valley community. When a scheduling conflict occurs, Tenant shall give preference to the Scotts Valley User, when it is reasonable to do so. Appropriate consideration includes but is not limited to the size of the event, economic impact of the event, order of request, broad variety of use, user availability to reschedule at a different time. For the purposes of this subsection, a Scotts Valley User means a Scotts Valley resident, Scotts Valley business, or community group or non-profit organization benefiting the Scotts Valley community. 007
6 (b) In Year 1, at a minimum, Tenant shall hold 5 major performing arts productions open to the public and shall rent the Premises at least 2 times per month for other uses consistent with Section 1.07.
(c) During Year 2 of the Lease, Tenant shall hold a minimum of 7 major performing arts productions, and shall rent the Premises at least weekly for other uses consistent with Section 1.07.
(d) If the Lease is extended for two additional years, the programming shall continue with a minimum of the Year 2 performance measures. (e) For the purpose of Paragraphs (b) and (c) above, a major performing arts production shall be defined as a minimum of 100 patrons at each individual event and can include a single day event or multi-day event. In the case of a multi-day event, the total event held on multiple days shall be counted as one event and the attendance at a multi-day event shall be at least 100 patrons. (f) Public Agencies have the right to use the facility as outlined in Exhibit C.

6.08 Town Center Project. Tenant acknowledges the plans of the Landlord to develop the Town Center on property adjacent to the Premises. In addition, Tenant acknowledges that the Property is part of the Town Center Specific Plan and as such, it is intended to be incorporated into the development of the Town Center. Tenant will cooperate with Landlord to integrate the theater into the Town Center Project which may include changes to the building including, but not limited to, the installation of an additional entrance to the Building which may reduce the size of the Premises. In the event the Landlord intends to reduce the size of the Premises, Landlord shall meet with Tenant to determine if such change will negatively impact the operations of Tenant. Tenant shall work in good faith with Landlord to effectuate the changes. Tenant shall not be financially responsible for any of the changes required to incorporate the Building into the Town Center Project.

ARTICLE 7 - MAINTENANCE AND REPAIRS

7.01 Landlord’s Maintenance Obligations.
(a) Landlord, on behalf of Tenant and any other occupants of the Building, shall maintain in good condition and repair the foundations, roofs and skylights, structural components and exterior surfaces of exterior walls of the Building (exclusive of doors, door frame, door checks, windows, window frames and store fronts); provided, however, if any repairs or replacements are necessitated by the negligence, gross negligence or willful acts of Tenant, its officers, employees, representatives, agents, customers, invitees or trespassers or by reason of Tenant’s failure to observe or perform any provisions contained in this Agreement or caused by alterations, additions or improvements made by Tenant or its officers, employees, representatives, agents, contractors, 008
7 subcontractors, laborers or materialmen, the cost of such repairs and replacements shall be the sole obligation of Tenant.
(b) Tenant shall be solely responsible for all repairs to and maintenance of the Premises which are not expressly allocated to the Landlord under this Agreement or by separate written agreement between the Landlord and Tenant, including but not limited to the HVAC system. This provision does not apply to any new installation of an HVAC system by the Landlord, which shall be installed by Landlord and of good quality and in good working order. If a new HVAC is installed and in good working order, Tenant shall be solely responsible for all repairs to and maintenance of the new HVAC system. (c) Unless Tenant notifies Landlord in writing of the need for repairs under subsection a, Landlord shall not be liable for its failure to make such repairs. Once Tenant notifies Landlord of the need of such repairs under subjection (a), Landlord shall be entitled to a reasonable period of time to affect such repairs upon receipt of said written notice from Tenant. Tenant waives any right of offset against any rent due hereunder and agrees not to assert as an affirmative defense in any judicial proceeding or arbitration brought by Landlord against Tenant on claims made under this Agreement the provisions of Sections 1941 and 1942 of the California Civil Code, or any superseding statute, and of any other law permitting Tenant to make repairs at Landlord’s expense.

7.02 Landlord’s Right of Entry. Landlord, its agents, contractors, employees and assigns may enter the Premises at all reasonable times to: (a) examine the Premises; (b) perform any obligation of, or exercise any right or remedy of, Landlord under this Agreement (c) make repairs, alterations, improvements or additions to the Premises, the Building or to other portions of the Property as Landlord deems necessary; (d) perform work necessary to comply with laws, ordinances, rules or regulations of any public authority or of any insurance underwriter; (e) show prospective tenants the Premises during the last six (6) months of the Term; and (f) perform work that Landlord deems necessary to prevent waste or deterioration in connection with the Premises should Tenant fail to commence to make, and diligently pursue to completion, in a reasonable time as defined by Landlord, Tenant’s required repairs after written demand therefore by Landlord. Landlord will give a minimum of twenty-four (24) hours advance notice of such entry when practicable.

7.03 Tenant’s Maintenance Obligations.
(a) Except as provided elsewhere in this Agreement, Tenant, at its sole cost and expense, shall keep the interior of the Premises in good order, condition and repair and shall make all replacements necessary to keep the Premises in such condition, including maintenance and repair of the HVAC system servicing the Premises, and maintenance and inspection of fire sprinkler systems.
(b) All replacement equipment shall be of a quality equal to or exceeding that of the original equipment or improvements. Should Tenant fail to make these repairs and replacements or otherwise maintain the Premises for a period of fifteen (15) days 009
8 after delivery of a written demand by Landlord, or should Tenant commence, but fail to complete, any repairs or replacements within a reasonable time after written demand by Landlord, Landlord shall have the right to make such repairs or replacements without liability to Tenant for any loss or damage that may occur to Tenant’s stock or business, and Tenant shall pay for all costs incurred by Landlord in making such repairs or replacements, together with interest thereon at the maximum rate permitted by law from the date of commencement of the work through the date of payment. Tenant shall, at its expense, repair promptly any damage to the Premises, Building or the Property caused by Tenant, its agents, employees, customers, invitees, subtenants, assignees or concessionaires, or caused by the installation or removal of Tenant’s personal property. (c) Tenant shall, at its own expense, comply with all requirements of the Landlord’s insurance underwriters and any other governmental authority having jurisdiction thereof, regarding the installation and periodic maintenance of fire suppression systems or apparatus.
(d) Tenant is responsible for maintaining the entry area and sidewalk in front of the Premise including removing any trash or debris. Tenant may not install or place, permanently or temporarily, any outside fixtures, signage or other objects that interfere with the ADA path of travel on the sidewalk or parking lot adjacent to the Premise.

7.04 Tenant Improvements. Tenant intends to install improvements to the Premises necessary for the theater. Tenant is responsible for the cost of all improvements to the interior of the Premises. Prior to obtaining any permits for the improvements or beginning construction on improvements to the Premises, Tenant shall obtain the prior written approval of the proposed plans from the City Manager. Tenant shall obtain any and all permits required for such improvements and shall comply with all Federal, State and local laws including, but limited to, the Americans with Disabilities Act and Prevailing Wage laws. Tenant shall defend and indemnify the Landlord from any and all claims associated with the improvements and shall ensure that no liens are recorded against the Building. Tenant is not entitled to make any improvements to the exterior of the Premises without the prior written consent of the Landlord. Any portable restrooms or storage containers brought onto the Premises shall be located behind the Building and not in the parking lot.

7.05 Trade Fixtures. Tenant may install trade fixtures, display items, machinery or other trade equipment in conformance with the all laws, ordinances, directives, rules or regulations of all applicable public and governmental agencies. Tenant shall not remove any trade fixtures, display items, machinery or other trade equipment from the Premises, without Landlord’s written consent, if the removal of any such item would cause damage to the Premises which Tenant cannot repair. In the absence of Landlord’s written consent to removal and Tenant’s inability or unwillingness to repair any damage caused by the removal, any such item shall be deemed a part of the realty and belong to the Landlord at termination of the Agreement.
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9 7.06 Restoration. Except as otherwise provided herein and specifically as required in Section 3.03, Tenant shall return the Premises to the same condition as existed as of the Commencement Date of the Agreement, reasonable wear and tear excepted. Landlord, through Landlord’s sole discretion and authority, and upon receipt of written request from Tenant, may consider allowing any Tenant Improvements approved by Landlord under this Agreement to remain. Landlord, at its election, may also require Tenant to remove, at Tenant’s sole cost, any improvements, alterations or additions approved by Landlord in accordance with this Agreement. Tenant shall repair, at its sole cost, any damage resulting from the removal of any alterations, improvements, additions, equipment, machinery or trade fixtures.

ARTICLE 8- UTILITIES

8.01 Separate Charges. Tenant shall pay for all water, gas, heat, light, power, telephone service and any other utilities metered or otherwise separately charged to the Premises.

8.02 Jointly Metered Utilities. Tenant shall pay its pro rata share (41%) of the utility charges which are jointly metered or charged. Those utility charges that are jointly metered are water and lighting in the parking lots and landscaped areas of the Property.

8.03 Interruption. Unless due to Landlord’s gross negligence or misconduct, Landlord shall not be liable for any failure or interruption of any utility service being furnished to the Premises, and no such failure or interruption shall entitle Tenant to terminate this Agreement.

8.04 Landscape and Parking Lot Maintenance. Tenant shall pay its pro rata share (41%) of the Landlord’s cost to maintain the parking lot and landscaping around the parking lot.

ARTICLE 9- INDEMNIFICATION AND INSURANCE

9.01 Indemnification. Landlord shall not be liable to Tenant for any damage to Tenant or Tenant’s property from any cause which is not the result of Landlord’s gross negligence. Tenant, as a material part of the consideration for this Agreement, hereby expressly waives and releases all claims against Landlord, its officers, employees, representatives and agents, for any injury or damage to any person or property on or about the Premises arising for any reason other than Landlord’s gross negligence.

Tenant agrees to indemnify, release, defend and hold harmless Landlord, its officers, employee, representatives and agents from any loss, claim, cost, expense or liability for any injury or damage to person or property, occurring in, on or about the Premises, arising for any reason, including without limitation the condition or use of the Premises or the improvements or personal property located therein and against any loss, claim, cost, expense or liability for injury to the person or property of Tenant, its agents, officers, employees, invitees or trespassers and except as to any such damage is caused by the 011
10 gross negligence of Landlord. Notwithstanding the foregoing, Tenant’s obligations under this Section 11.01 shall not extend to claims, costs, expenses, losses or liability resulting from Landlord’s failure to comply with its maintenance and repair obligations under Sections 9.01(a) and 9.01(e) of this Agreement.

9.02 Insurance Requirements. Tenant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Tenant’s operation, use and improvement of the Premises. The cost of such insurance shall be borne by the Tenant.

Coverage shall be at least as broad as:
(a) Commercial General Liability. (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. (b) Workers’ Compensation. insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease. (c) Property insurance. against all risks of loss to any tenant improvements or betterments, at full replacement cost with no coinsurance penalty provision.
(d) If the Tenant maintains broader coverage and/or higher limits than the minimums shown above, the Landlord requires and shall be entitled to the broader coverage and/or the higher limits maintained by the Tenant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Landlord.

9.03 Other Insurance Provisions. The insurance policies are to contain, or be endorsed to contain, the following provisions:
(a) Additional Insured Status. The City of Scotts Valley, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Tenant including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Tenant’s insurance (at least as broad as ISO Form CG 20 10). (b) Primary Coverage. For any claims related to this contract, the Tenant’s insurance coverage shall be primary insurance coverage at least as broad as ISO CG 20 01 04 13 as respects the City of Scotts Valley, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the Tenant’s insurance and shall not contribute with it.
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11 (c) Legal Liability Coverage. The property insurance is to be endorsed to include Legal Liability Coverage (ISO Form CP 00 40 04 02 or equivalent) with a limit equal to the replacement cost of the leased property. (d) Notice of Cancellation. Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the Landlord. (e) Waiver of Subrogation. Tenant and Landlord each waive its right of recovery against the other, and each party’s successors, assigns, directors, agents and representatives in connection with any loss or damage caused to property belonging to the Tenant or Landlord which is covered by any insurance policy of either the Tenant or Landlord in force at the time of any such loss or damage. Tenant and Landlord hereby waive, on behalf of each party’s insurance carriers, any right of subrogation it may have against the other party and each shall notify its carriers of the waiver contained herein.
(f) Acceptability of Insurers. Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A: VII,
(g) Verification of Coverage. Tenant shall furnish the Landlord 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 listing all policy endorsements to Landlord before occupying the premises. However, failure to obtain the required documents prior to the work beginning shall not waive the Tenant’s obligation to provide them. The Landlord reserves the right to require complete, certified copies of all required insurance policies, including endorsements, required by these specifications, at any time.
(h) Increase in Coverage. Landlord may increase or decrease the amount of commercial general liability insurance required herein, based upon a general review by Landlord of the standard insurance requirements effective July 1st of any year, provided notice of the increase is given to Tenant no later than February 1st of that same year. Such changes in coverage shall be commercially reasonable at the determination of Landlord. Changes in insurance amounts shall occur not more frequently than every two years. Landlord will notify Tenant of any changes under this provision of this Agreement.
(i) No use shall be made or permitted to be made of the Premises, nor acts done, which will increase the existing rate of insurance upon the Premises, or cause a cancellation of any insurance policy covering the Premises or any part thereof. Tenant shall, at its sole cost, comply with any and all requirements regarding the use of the Premises by any company that issues a policy of fire, casualty or public liability insurance to the Landlord. If Tenant’s use of the Premises results in a rate increase for the Premises, Tenant shall pay as additional rent within ten (10) days written notice, a sum equal to the additional premium caused by such rate increase.

9.03 Tenant’s Failure To Maintain Insurance. Tenant agrees that if Tenant does not maintain any insurance policy required under this Agreement or fails to pay any premiums when due, Landlord may, require that the Premises be immediately closed for business pending reinstatement of insurance by Tenant, or obtain the necessary 013
12 insurance and pay the premium, and the repayment thereof shall be deemed to be additional rent due by the Tenant and payable on the next date upon which a payment of rent is due.

9.04 Waiver of Loss and Damage. Landlord shall not be liable for any damage to inventory or other property of Tenant, or others, located in, on or about the Premises, nor for the loss of or damage to any property of Tenant or of others by theft or otherwise, which is not the direct result of Landlord’s negligence, and Tenant waives any claim against Landlord with respect to such property. Landlord shall not be liable to Tenant, Tenant’s employees or representatives for any injury or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water, rain or leaks from any part of the Premises or from the pipes, appliance or plumbing works or from the roof, street or subsurface or from any other places or by any other cause of whatsoever nature, which is not the direct result of Landlord’s gross negligence. Landlord shall not be liable to Tenant, Tenant’s employees or representatives for any such damage caused by other tenants or persons in the Premises, occupants of the Building, or the public, or caused by operations in construction of any private, public or quasi-public work. All property of Tenant kept or stored on the Premises shall be so kept or stored at the sole risk of Tenant, and Tenant shall hold Landlord harmless from any claims arising out of damage to the same, including subrogation claims by Tenant’s insurance carriers, unless such damage shall be caused by the willful act or gross neglect of Landlord.

9.06 Notice by Tenant. Tenant shall give immediate notice to Landlord in case of fire or accidents in or around the Premises or of any damage or defects in the Premises, or any fixtures or equipment therein.

ARTICLE 10 - ASSIGNMENT AND SUBLETTING
The parties acknowledge that this Agreement is a unique relationship between these individual parties. Landlord charges a reduced rent to Tenant due to the services Tenant provides to the citizens of the City of Scotts Valley. Therefore, Tenant cannot assign its rights under this Agreement or its rights to the Premises without the prior written consent of Landlord which may be withheld for any reason or no reason.

ARTICLE 11 - DEFAULT

11.01 Events of Default. In addition to the provisions of Section 3.03, the occurrence of any one of the following events shall constitute an event of default on the part of Tenant ("Default"):
(a) The complete abandonment of the Premises by Tenant; and (b) Failure in the performance of any of Tenant's covenants, agreements or obligations hereunder which failure continues for ten (10) days after written notice thereof from Landlord to Tenant, provided that, if Tenant has exercised reasonable diligence to cure such failure and such failure cannot be cured within such ten (10) day 014
13 period despite reasonable diligence, Tenant shall not be in default under this subsection unless Tenant fails thereafter diligently and continuously to cure such failures; and (c) The failure of Tenant to maintain all insurance coverage as required in Section 9.02; and
(d) Failure to retain professional management as required by Section

2.06. Tenant agrees that any notice given by Landlord pursuant to the above shall satisfy the requirements for notice under California Code of Civil Procedure Section 1161, and Landlord shall not be required to give any additional notice in order to be entitled to commence an unlawful detainer proceeding.

In the event of any Default by Tenant, then in addition to any other remedies available to Landlord at law or in equity and under this Agreement, Landlord shall have the immediate option to terminate this Agreement and all rights of Tenant hereunder by giving written notice of such intention to terminate.

11.02 Notice of Default and Opportunity to Cure. Landlord shall give written notice to Tenant of any Event of Default on the part of Tenant. Said notice shall specify the nature of the act, omission, or deficiency giving rise to the Event of Default. In addition, if the Event of Default is curable, and does not give rise to an imminent danger to health or safety, the notice shall also specify the action required to cure the default, and a reasonable date, which shall not be less than thirty (30) calendar days from the mailing of the notice, by which Tenant must take or commence such action to cure. If the notice specifies only a commencement date for the cure, Tenant must commence such cure within the specified time and shall diligently pursue the cure to completion within a reasonable time thereafter.

11.03 Remedies. In the event of any breach by Tenant, Landlord shall be entitled to any rights or remedies available at law.
(a) Efforts Landlord may make to mitigate the damages caused by Tenant’s breach of this Agreement shall not constitute a waiver of Landlord’s right to recover damages against Tenant, nor shall anything contained in this Agreement affect Landlord’s right to indemnification against Tenant for any liability arising prior to the termination of this Agreement for personal injuries or property damage, and Tenant agrees to indemnify and hold Landlord harmless from any injuries and damages, including all reasonable attorney fees and costs incurred by Landlord in defending any action brought against Landlord for any recovery, and in enforcing the terms and provisions of this indemnification against Tenant.
(b) However, the breach of this Agreement by Tenant, or an abandonment of the Premises by Tenant, shall not constitute a termination of this Agreement, nor of Tenant’s right of possession under this Agreement, unless and until Landlord elects to do 015
14 so, and until that time Landlord shall have the right to recover rent and all other payments to be made by Tenant under this Agreement as they become due; provided, that until Landlord elects to terminate this Agreement and Tenant’s right of possession under this Agreement, Tenant shall have the right to sublet the Premises or to assign interests in this Agreement, or both, subject only to the written consent of Landlord, which consent shall not be unreasonably withheld.
(c) In the event that Landlord should take any act to maintain or preserve the Premises on Tenant’s behalf, or seek the appointment of a receiver to protect Landlord’s interests under this Agreement, such acts shall not constitute a termination of Tenant’s right of possession unless Tenant receives written notice from Landlord to regarding Landlord’s election to terminate.

ARTICLE 12 - DAMAGE OR DESTRUCTION

12.01 Landlord’s Duty To Repair.
(a) If the Premises are destroyed or materially damaged from a cause not insured against, or if the amount of available insurance proceeds, including deductible costs, is not sufficient to completely repair or restore any such damage or destruction, Landlord shall have the right to terminate this Lease by giving written notice of termination to Tenant within thirty (30) days after the date of the damage or destruction. If the Lease is not terminated, then Landlord shall diligently proceed to repair and restore the Premises to the extent that insurance proceeds, including deductible costs, are sufficient to completely repair or restore any such damage or destruction. (b) If the Premises are materially damaged or destroyed from a cause covered by insurance, and it can be repaired or restored within ninety (90) days after commencement of repair or restoration, then Landlord shall diligently proceed to repair and restore the Premises. If Landlord determines that the Premises cannot be repaired or restored within this period, then Landlord and Tenant shall work out a reasonable time frame for the completion of the repairs or restoration. (c) Except as otherwise provided in this Agreement, damage to or destruction of the Premises shall not terminate this Agreement or result in the abatement of any rent or other charges payable under this Agreement. Tenant expressly waives any right it may have, in law or equity, to offset any cost incurred by Tenant for repairs or restoration to the Premises against Tenant’s obligations to pay rent in connection with Landlord’s duties of repair and restoration under this Lease. (d) Landlord’s duties of repair and restoration under the provisions of this Lease shall extend only to those portions of the Premises insured under a policy of insurance, and Landlord shall not be responsible for any loss, damage, or destruction to Tenant’s personal property, trade fixtures, merchandise, inventory or equipment. 016
15 12.02 Tenant’s Duty to Repair or Replace. Except as otherwise provided herein, Landlord’s obligation to restore shall not include the restoration or replacement of Tenant’s personal property, inventory, trade fixtures, merchandise, or equipment. Tenant shall restore and replace said items in the event that Landlord is obligated or elects to repair any damage or destruction of the Premises.

ARTICLE 13 - ESTOPPEL CERTIFICATES; ATTORNMENT

13.01 Tenant to Furnish Certificate. Tenant shall, within ten (10) business days of written notice from Landlord, execute and deliver to Landlord a written statement certifying that this Agreement is unmodified and in full force and effect or, if modified, stating the nature of such modification. Tenant’s statement shall include other details requested by Landlord, such as the date to which rent and other charges are paid and Tenant’s knowledge concerning any uncured defaults in Landlord’s obligations under this Agreement and the nature of such defaults if they are claimed. Any such statement may be relied upon conclusively by any prospective purchaser or encumbrancer of the Premises. Tenant’s failure to deliver such statements within such time shall be conclusive upon the Tenant that this Agreement is in full force and effect, except as and to the extent any modification has been represented by Landlord, and that there are no uncured defaults in Landlord’s performance.

13.02 Additional Documents. Tenant, upon request of any party in interest, shall execute promptly such instruments and certificates necessary to carry out the intent of the foregoing Sections as shall be requested by Landlord.

ARTICLE 14 - MISCELLANEOUS

14.01 Hazardous or Toxic Materials.
(a) Tenant shall comply, at its expense, with all federal, state and local statutes or regulations concerning environmental conditions, emissions, pollutants and controls concerning Hazardous Materials that Tenant or its contractors, employees, invitees and guests bring, or allow on, the Premises and on the Property on which the Premises are located during the Term. Tenant shall not cause, store, use or permit any Hazardous Material, including without limitation asbestos or polychlorinated biphenyls, to be brought upon, kept or used in or about the Premises by Tenant, its agents, employees, contractors or invitees, without the prior written consent of Landlord, which Landlord shall not unreasonably withhold as long as Tenant demonstrates to Landlord’s reasonable satisfaction that such Hazardous Material is necessary or useful to Tenant’s business, does not violate any requirements of the Landlord’s policies of fire, causality or public liability insurance and will be used, kept and stored in a manner that complies with all laws regulating any such Hazardous Material so brought upon or used or kept in or about the Premises.
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16 (b) If Tenant breaches any of its obligation stated herein, or if the presence of Hazardous Material on the Premises caused or permitted by Tenant during the Term results in contamination of the Premises, then Tenant shall indemnify, defend and hold Landlord harmless from any and all claims, judgment, damages, penalties, fines, costs, liabilities or losses, including, without limitation, diminution in value of the Premises, damages for the loss or restriction on use of rentable or usable space or of any amenity of the Premises, damages arising from any adverse impact on marketing of space on the Property, and sums paid in settlement of claims, attorneys’ fees, consultant fees and expert fees which arise during or after the lease term as a result of such contamination.

Without limiting the foregoing, if the presence of any Hazardous Material on the Premises caused or permitted by Tenant results in any contamination of the Premises, Tenant shall promptly take all actions at its sole expense as are necessary to return the Premises to the condition existing prior to the introduction of any such Hazardous Material to the Premises; provided that Landlord’s approval of such actions shall first be obtained, which approval shall not be unreasonably withheld so long as such actions would not potentially have any material adverse long-term or short-term effect on the Premises. (c) As used herein, the term “Hazardous Material” means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority, the State of California or the United States Government. The term “Hazardous Material” shall include without limitation, any material or substance which is (i) defined as a “hazardous waste,” “extremely hazardous waste” or “restricted hazardous waste” under Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law); (ii) defined as a “hazardous substance” under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act); (iii) defined as a “hazardous material,” “hazardous substance,” or “hazardous waste” under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory); (iv) defined as a “hazardous substance” under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); (v) petroleum; (vi) asbestos; (vii) listed under Article 9 or defined as hazardous or extremely hazardous pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20; (viii) designated as a “hazardous substance” pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. § 1317); (ix) defined as a “hazardous waste” pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903); or (x) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601), and any amendments or successor statutes thereto. (d) Notwithstanding anything herein to the contrary, Tenant shall have no responsibility or liability related to any Hazardous Material which existed prior to the Term of Tenant’s occupancy hereunder, unless brought on or allowed to be brought on by Tenant during one of Tenant’s previous lease tenancies in the Premises. 018
17 14.02. Compliance with Governmental Regulations. Tenant shall, at its sole cost and expense, comply with all of the requirements of all local, state and federal authorities now in force, or which may hereafter be in force, pertaining to the Premises.

With regard to the use of the Premises, Tenant shall faithfully observe all local ordinances and state and federal statutes now in force or which may hereafter be in force.

14.03 Americans With Disabilities Act. If Tenant makes any improvements to the Premises or installs any fixtures or equipment in the Premises, Tenant acknowledges and expressly accepts full responsibility and shall incur all costs and expenses for compliance with the requirements of the Americans with Disabilities Act (ADA) and any other local, state or federal law or regulation regarding the accessibility of the Premises by disabled individuals for those improvements, fixtures, equipment and use of the Premises. Tenant agrees to release, indemnify, defend and hold Landlord harmless for any claim, loss, expense or liability arising from Tenant’s failure to fully comply with all such laws or regulations.

14.04 Attorneys’ Fees. In the event of any legal action, arbitration or proceeding between the parties, the prevailing party shall be entitled to reasonable attorneys’ fees and expenses as a part of the judgment or award resulting therefrom.

14.05 Transfer, Sale or Lease of the Premises by Landlord. Notwithstanding any provisions of this Agreement, Landlord may assign in whole or in part Landlord’s interest in this Agreement and may sell or transfer all or part of Landlord’s leasehold interest in the real estate of which the Premises are a part, however, subject to the terms of this Lease. In the event of any transfer, sale or exchange of the Premises by Landlord and assignment by Landlord of this Agreement, Landlord shall be entirely freed and relieved of all liability under all covenants and obligations contained in or derived from this Agreement or arising out of any act, occurrence or omission relating to the Premises which occurs after the consummation of such sale, exchange or assignment except as provided in the Pass Through Agreement and all amendments thereto.

14.06 Liability to Successors. The covenants and conditions herein contained shall, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of the parties hereto who shall be jointly and severally liable for the covenants contained herein.

14.07 Interpretation. Whenever the singular number is used in this Agreement, the same shall include the plural. Reference to any gender shall include the masculine, feminine and neuter genders, and the word “person” shall include corporation, firm or association, when required by the content.

The headings or titles to the paragraphs of this Agreement are for convenience only and do not in any way define, limit or construe the contents of such paragraphs. This instrument contains all of the agreements and conditions made between the parties with respect to the hiring of the Premises and may not be modified orally or in any manner except by a written instrument signed by all the parties to this Agreement. 019
18 The laws of the State of California shall govern the validity, performance and enforcement of this Agreement. If any provision of this Agreement is determined to be void by any court of competent jurisdiction, such determination shall not affect any other provision of this Agreement and such other provisions shall remain in full force and effect.

If any provision of this Agreement is capable of two constructions, one which would render the provision void and one which would render the provision valid, the provision shall be interpreted in the manner which would render it valid.

Except as may otherwise be expressly stated, each payment required to be made by the Tenant shall be in addition to and not in substitution for other payments to be made by Tenant.

14.08 Time. Time is of the essence in this Agreement.

14.09 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain labor or materials or reasonable substitutes therefor, governmental restrictions, regulations or controls, enemy or hostile government action, civil commotion, fire or other casualty, and other causes beyond the reasonable control of the party obligated to perform, shall excuse the performance by such party for a period equal to that resulting from such prevention, delay or stoppage.

14.10 Notices. All notices to be given by one party to the other or options to be exercised under this Agreement shall be in writing, mailed or delivered to Landlord and Tenant at the following addresses:

Landlord
City of Scotts Valley
Attn: City Manager
1 Civic Center Drive
Scotts Valley, CA 95066
Tenant
Scotts Valley Community Theater Guild
P.O. Box 66438
Scotts Valley, CA 95067-6438
Attn: President
Mailed notices shall be sent by United States Postal Service, certified or registered mail, postage prepaid, and shall be deemed to have been given on the date of posting in the United States Postal Service.

The parties listed above may, by proper notice, at any time designate a different address to which notices shall be sent.
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19 14.11 Waiver. The waiver by either of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any other term, covenant or condition or any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Agreement, other than the failure of Tenant to pay the particular rental so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such rent. No covenant, term or condition of this Agreement shall be deemed to have been waived by either, unless such waiver is in writing by such party.

14.12 Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the rent herein stipulated shall be deemed to be other than on account of the earliest stipulated rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such rent or pursue any other remedy in this Agreement provided.

14.13 Authority. If Tenant is a corporation or partnership, each individual executing this Agreement on behalf of such entity represents or warrants that he or she is duly authorized to execute and deliver this Agreement on behalf of such entity and that such entity shall be bound by all the terms and provisions hereof.

14.14 Broker’s Commission. Each party represents and warrants that there are no claims for brokerage commissions or finder’s fees arising from that party’s activities in connection with this Agreement, and each party agrees to indemnify and hold the other party harmless from all liability arising from any such claim.

14.15 Assessment District Establishment. Tenant agrees not to unreasonably protest the establishment of an assessment district for purposes of public improvements, including, but not limited to, sidewalks, streets, lighting, utilities. Notwithstanding the foregoing, Tenant may protest the establishment of an assessment district if Tenant believes it adversely affects Tenant’s business.

The parties have executed this Agreement as of the date first written above.

LANDLORD: TENANT:

City of Scotts Valley Scotts Valley Community Theater Guild By: _____________________________ By: _____________________________ Mali LaGoe Larry Smith
Its: City Manager Its: President
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20 Exhibit A
Location of Premises
251 Kings Village Road, Scotts Valley, CA 95066
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21 Exhibit B
Floor Plan of Premises
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22 Exhibit C
Public Agency Use of the Premises
Public agency use of the Premises at no charge will be provided in consideration for the Tenant’s reduced rent and to enhance the community benefit from the facility and increase its use. To facilitate the use of the Premises by the Scotts Valley Library, the City of Scotts Valley Recreation Department and the Scotts Valley Unified School District (“Scotts Valley Public Agencies”), shall be entitled to priority booking Monday through Thursday as follows:

Each calendar year prior to February 15, Theater shall share the schedule for the upcoming calendar year with the Scotts Valley Public Agencies. The Agencies may the reserve their dates of use subject to the purposes and times outlined below and subject to any previously scheduled events identified on the provided calendar for the upcoming year. The Tenant and the Public Agonies will coordinate to ensure annual public agency events are reserved in advance. After February 15, the Scotts Valley Public Agencies can reserve the Premises for the permitted times but will no longer have preference.

However, Tenant has the right to reserve the Premises for the first 3 weekends in December for major theater performances.

The Tenant will maintain a booking calendar that is shared with the Scotts Valley Library and City Recreation Department at least semi-annually and more frequently as requested to plan for public agency use of the facility. The Tenant-owned equipment and furnishings may be used with prior approval from Tenant and specific equipment may only be operated by individuals approved by the Tenant to operate such equipment. A Use Policy will be developed by Tenant and Landlord to define expectations and responsibility for use of the space, to encompass set-up, break-down, cleaning and damages.

Scotts Valley Library Use:
• Library Protected Uses include author talks, book clubs, performances, events, library programming and Friends of the Library events and programming.

Additional uses outside of these Library Protected Uses may be requested by the Library and considered by the Tenant.
• Use of facility for up to 12 full days for per year (pro rata for partial years) for Library Protected Uses. Events would be bookable one year in advance and subject to the scheduling terms outlined above.

City Use:
• Tenant recognizes the City’s interest in hosting events and recreation activities at the Premise that align with Article 1, 1.07 of this agreement and agrees to meet with the City’s Recreation Division Manager to discuss a use agreement for such events to be hosted by the City’s Parks and Recreation Division and/or a City contracted vendor for City programming.
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23 • The City shall be entitled to the equivalent of up to 12 days (or 96 hours) of such use. Additional uses may be requested by the City and considered by the Tenant.

Scotts Valley Unified School District Use:
• School District Protected Uses include theatrical performances, musical performances, celebratory ceremonies, all-school events, fairs, or similar events that enrich the education of students and connect students with the Scotts Valley community.
• Use of facility for up to 6 performance days per year (pro rata for partial years) and up to 8 rehearsal days per year. Events would be bookable one year in advance and subject to the scheduling terms outlined above. 025
AGENDA ITEM 2
DATE: 06-15-2022

City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: June 15, 2022
TO: Honorable Mayor and City Council
FROM: Mali LaGoe, City Manager
SUBJECT: APPROVE FEE DEFERRAL AGREEMENT BETWEEN CRDSV,
LLC dba RESIDENCE INN SCOTTS VALLEY AND THE CITY OF

SCOTTS VALLEY

SUMMARY OF ISSUE
On March 16, 2016, the City Council approved a General Plan Amendment, a Land Division, a Zoning Change, a Planned Development Permit, Use Permits and Design Review for the development of 50 townhouse-style condominiums, a 120-room hotel, and related property improvements on a vacant parcel located at the end of Santa’s Village Road. The property was previously designated as commercial property and had been planned as Phase II of the Borland Campus. An integral part of this project, and a significant basis for the decision to amend the General Plan of the City was to convert this property to residential, was the hotel component of the project. The hotel would generate significant transit occupancy tax, which would assist the City in proving services to the residents of Scotts Valley.

The townhome portion of the project was built by City Ventures and the land for the hotel was subsequently sold to Coast Redwood Group who was working with Marriott Hotels to build a Residence Inn at the site. The project was stalled for several years due to economic and pandemic related challenges; however, the developer is now ready to begin construction of the previously approved hotel. The permits for the project were approved in 2017 and are being updated to current building codes. Construction financing has been secured, however supply chain issues and inflationary concerns has led to a request by the developer to defer payment of associated permit and development impact fees totaling $580,827.55, until after the construction is complete, the hotel opens and the developer has the opportunity to refinance to a lower interest rate, long-term loan. The developer has agreed that the payment of the fees will be secured by a promissory note which will require the full payment to the City no later than July 1, 2025.

Current projections indicate that a new 120-room Residence Inn will generate $775,698 annually in TOT for the City. In addition, guests at the hotel will increase sales tax revenues in the City. This money can be used to provide services and amenities to the residence of the City. The Hotel is projected to open in 2024. 001
AGENDA ITEM 2
DATE: 06-15-2022

FISCAL IMPACT
The fiscal impact will be in the delayed collection of permit and development impact fees totaling $580,827.55 from FY21/22 to no later than July 1, 2025 or the first day of FY25/26.

STAFF RECOMMENDATION
It is recommended that Council approve the attached Fee Deferral Agreement with CRDSV, LLC dba Residence Inn Scotts Valley and authorize the City Manager to sign the agreement.

TABLE OF CONTENTS PAGE
Fee Deferral Agreement and Promissory Note …………………………………...... 3 002

DEFERRAL AGREEMENT
This DEFERRAL AGREEMENT is entered into this 15 day of June, 2022, by and between the City of Scotts Valley (“City”) and CRDSV, LLC dba Residence Inn Scotts Valley, a California LLC (“Hotel”).

RECITALS
A. Hotel is the developer of a proposed 120 room hotel located at APN 024- 031-19 in Scotts Valley, CA (the “Project”).

B. It is estimated that upon completion of the Project, the Project will generate approximately $775,698 annually in transient occupancy tax (“TOT”) for the City.

C. The Hotel owes approximately $580,827.55 in development impact fees and permit fees (collectively referred to as “Fees”) associated with the Project which are typically due when building permits are pulled. .

D. Due to rising costs of construction and construction lending, Hotel has requested that the Fees be deferred until after a certificate of occupancy permit for the Project is issued by the City.

E. The Hotel has agreed that the payment of the Fees will be secured by a promissory note which will require the payment of Fees no later than July 1, 2025.

F. The City is willing to defer the payment of the Fees subject to the terms of this agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the City and Hotel agree as follows:

AGREEMENT

1. Justification for Payments. The parties agree that the addition of the hotel to the City business community would be benefit to the City and its residents. Without some financial assistance, Hotel is unable to complete the construction of the Project. Based on conservative projections, it is anticipated that the hotel will generate $775,698 annually in TOT for the City. In addition, guests at the hotel will increase sales tax revenues in the City. This money can be usedto provide services and amenities to the residents of the City.
003

2. Development Impact and Permit Fee Deferral. Hotel owes the City $580,827.55 in Fees for the 120 room hotel. The payment of the Fees is hereby deferred and shall be paid to the City in full no later than July 1, 2025. The payment of the Fees shall be secured bythe Promissory Note (Exhibit A1) and Deed of Trust (Exhibit A2) attached hereto.

3. Termination of Agreement. This Agreement shall terminate at such time as Hotel has paid the City the Fees and any accrued interest.

4. Cessation of Hotel Operations in Scotts Valley. During the term of this Agreement, if the hotel ceases to operate or Hotel sells the property to another entity, the total amount of the Fees and accrued interest shall be immediately due and payable.

5. General Provisions.

A. Notices. All written notices and demands of any kind which either party may be required or may desire to serve upon the other party in connection with this Agreement may be served (as an alternative to personal service) by registered or certified mail, overnight courier service or facsimile (followed promptly by hard copy) at the addresses set forth below:

As to City: City of Scotts Valley
One Civic Center Drive
Scotts Valley, CA 95066
Attn: City Manager
Telephone: (831) 440-5600
Facsimile: (831) 438-2793
As to Hotel: CRDSV, LLC dba
Residence Inn Scotts
Valley
P.O. Box 35
Ben Lomond, CA 95005
Attn: Bijal Patel, CEO
Telephone: (831) 818-5279
Facsimile: (831) 532-7653
Any such notice or demand so served by registered or certified mail or overnight courier shall be sent with postage or charges thereon fully prepaid and addressed to the party to be served at the addresses set forth above.

B. Validity. If any of the provisions of this Agreement or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement by the application of such provision or provisions to persons or circumstances other than those as to whom 004
or which it is held invalid or unenforceable shall not be affected thereby, and every provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

C. Compliance with Laws. Hotel warrants to City that it shall comply with all local, state and federal laws applicable to the construction and operation of the hotel and compliance with the terms of this agreement.

D. Attorneys’ Fees. In the event of any litigation between the parties hereto to enforce any of the provisions of this Agreement or any right of either party hereto, the unsuccessful party to such litigation agrees to pay to the successful party all costs and expenses, including reasonable attorneys’ fees, whether or not incurred in trial or on appeal, incurred therein by the successful party, all of which may be included in and as a part of the judgment rendered in such litigation. Any indemnity provisions herein shall include indemnification for reasonable attorneys’ fees and costs, whether or not suit be brought and including fees and costs on appeal.

E. Time of Essence. Time shall be of the essence hereof.

F. Governing Law. This Agreement shall be governed by the laws of California and the parties hereto agree that any litigation between the parties hereto relating to this Agreement shall take place (unless otherwise required by law) in a court located in Santa Cruz County, State of California. Each party waives its right to jurisdiction or venue in any other location.

G. Successors and Assigns. This Agreement shall be binding on and shall inure to the benefit of the City and Hotel, their respective heirs, successors (by merger, consolidation or otherwise), assigns, devisees, administrators and representatives, except as provided in Section 4 above.

H. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which will be deemed one instrument.

I. Amendment. This Agreement may be amended, modified or changed by the parties, provided that said Agreement, modification or change is in writing and approved by the authorized representative of the parties.

J. Entire Agreement. This Agreement contains the entire understanding between the parties with respect to the subject matter herein. There are no representations, agreements or understandings, whether oral or written, between or among the parties relating to the subject matter of this Agreement which are not fully expressed herein. The drafting and negotiation of this Agreement have been participated in by each of the parties and/or their counsel, and for all purposes this Agreement shall be deemed to have been drafted jointly by all parties.

K. Waiver. Waiver of a breach or default under this Agreement shall not constitute a continuing waiver of a subsequent breach of the same or any other provision under this agreement.
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L. Severability. If any term or portion of this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or otherwise unenforceable, the remaining provisions of this Agreement shall continue in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

HOTEL:

CRDSV LLC, dba Residence Inn Scotts Valley, a
California LLC
By:

Name: Bijal Patel
Title: Chief Executive Officer
CITY:

THE CITY OF SCOTTS VALLEY, a California
municipal corporation
By:

Name: Mali LaGoe
Its: City Manager
006
RECORDED AT THE REQUEST OF:

City of Scotts Valley
WHEN RECORDED MAIL TO:

City of Scotts Valley - CITY CLERK
One Civic Center Drive
Scotts Valley, CA 95066
Exempt from Recording Fees per GC 27383
(Space above this line for recorder’s use only)

PROMISSORY NOTE
$580,827.55 Scotts Valley, California
FOR VALUE RECEIVED, the undersigned ("Debtor") promises to pay in lawful money of the United States of America, to the City of Scotts Valley (“Holder”), the principal sum of $580,827.55 on or before July 1, 2025.

Said principal sum shall be repaid by July 1, 2025, or upon the sale or transfer of the property located in Scotts Valley, CA, APN 024-031-19, whichever shall occur first.

This Note can be prepaid. Debtor reserves the right at any time to prepay all or a portion of the principal balance remaining due on the Note with no penalty.

Failure to make any payment within ten (10) days of due date shall, at Holder’s option and without notice to Debtors, be deemed an event of default and shall entitle Holder at its option to declare the entire balance of the indebtedness represented by this Note immediately due and payable. Should any event of default occur under the terms of this Note, the Debtors shall pay all reasonable costs and expenses of collection, including attorneys' fees incurred by the Holder in the collection hereunder.

This Note shall be governed by the laws of the State of California. In the event that any provision of this Note shall be held invalid or unenforceable, the remaining provisions shall continue to be valid and enforceable in accordance with their terms.

This Note is the personal obligation of the Debtor.

DEBTOR:

CRDSV, LLC dba Residence Inn Scotts Valley
(Notarized Signature)
By: Bijal Patel
Its: Chief Executive Officer
REC 05 - Rev 10/07
007
REC 05 - Rev 10/07
RECORDED AT THE REQUEST OF:

City of Scotts Valley
WHEN RECORDED MAIL TO:

City of Scotts Valley - CITY CLERK
1 Civic Center Drive
Scotts Valley, CA 95066
Exempt from Recording Fees per GC 27383
(Space above this line for recorder’s use only)
EXHIBIT A2

DEED OF TRUST
THIS DEED OF TRUST (herein "Deed of Trust") is made this 15th day of June, 2022 among CRDSV, LLC dba Residence Inn Scotts Valley, (herein "Borrower"), the City of Scotts Valley (herein "Trustee"), and theBeneficiary, the City of Scotts Valley, whose address is 1 Civic Center Drive, Scotts Valley, California (herein" Lender"). Borrower owes Lender the principal sum of $580,827.55. This debt is evidenced by Borrower's Note dated the same date as this Deed of Trust ("Note"). The Note provides that the full debt, together with other amounts owing shall be due andpayable on or before July 1, 2025, or upon sale or transfer of the Property located in the Cityof Scotts Valley, County of Santa Cruz, California, Assessor’s Parcel No. 024-031-19 as more particularly described in Exhibit A, whichever shall occur first.

The loan evidenced by the Note and secured by this Deed of Trust (the "Loan") is being made for the purpose of enabling Borrower to construct a hotel within the City of Scotts Valley.

BORROWER, in consideration of the indebtedness herein recited and the trust herein created, irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in the City of Scotts Valley, County of Santa Cruz, State of California:

Assessor’s Parcel No. 024-031-19, which has the address of TBD, ScottsValley, CA, (herein "Property Address");
TOGETHER with all the improvements now or hereafter erected on the property, and all easements, rights, appurtenances and rents (subject however to the rights and authorities given herein to Lender to collect and apply such rents), all of which shall be deemed to be and remain a part of the property covered by this Deed of Trust; and all of the foregoing, together with said property (or the leasehold estate if this Deed of Trust is on a leasehold) are hereinafter referred to as the "Property".
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This Deed of Trust secures to Lender: a) The repayment of the indebtedness evidenced by the Note with interest as provided in the Note and all renewals, extensions and modifications of the Note; b) The payment of all other sums, with interest as provided by the Note, advanced in accordance herewith to protect the security of this Deed of Trust; c) The performance of the covenants and agreements of Borrower herein contained; and d) To further secure to Lender.

Borrower covenants that Borrower is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Property, and that the Property is unencumbered except for encumbrances of record. Borrower covenants that Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to encumbrances of record.

UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:

1. Payment of Principal and Interest. Borrower shall promptly pay when due the principal and interest indebtedness evidenced by the Note and late charges as provided in the Note.

2. Prior Mortgages and Deeds of Trust; Charges; Liens. Borrower shall perform all of Borrower's obligations under any mortgage, deed of trust or other security agreement with a lien which has priority over this Deed of Trust, including Borrower's covenants to make payments when due. Borrower shall pay or cause to be paid all taxes, assessments and other charges, fines and impositions attributable to the Property which may attain a priority over this Deed of Trust, and leasehold payments or ground rents, if any.

3. Hazard Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage", and such other hazards as Lender may require and in such amounts and for such periods as Lender may require.

The insurance carrier providing the insurance shall be chosen by Borrower subject to approval by Lender; provided that such approval shall not be unreasonably withheld. All insurance policies and renewal thereof shall be in a form acceptable to Lender and shall include a standard mortgage clause in favor of and in a form acceptable to Lender. Lender shall have the right to hold the polices and renewals thereof, subject to the terms of any mortgage, deed of trust or other security agreement with a lien which has priority over this Deed of Trust. All requirements hereof pertaining to insurance shall be deemed satisfied if the Borrower complies with the insurance requirements under the First Deeds of Trust, provided Lender is named on such policies as loss payee as its interest may appear and is named as an additional insured. If lender requires, Borrower shall promptly give to Lender copies of all receipts of paid premiums renewal notices and policies.

In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.

If the Property is abandoned by Borrower, or if Borrower fails to respond to Lender within 30 days from the date notice is mailed by Lender to Borrower that the insurance carrier offers to settle a claim for insurance benefits, Lender is authorized to collect and apply the insurance proceeds at Lender's option either to restoration or repair of the Property or to the sums secured by this Deed of Trust, 009
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subject to the rights of the holders of any mortgage deed of trust, security instrument or other lien superior in priority to this Deed of Trust.

5. Preservation and Maintenance of Property. Borrower shall keep the Property in good repair and shall not commit waste or permit impairment or deterioration of the Property. Borrower shall perform all of Borrower's obligations under any recorded documents.

The portion of the Property that is subject to public view (including all improvements from time to time erected thereon, including paving, walkway, landscaping and ornamentation) shall be maintained in good repair and in a neat, clean and orderly conditions. In the event that there should arise at any time a condition in violation of the above maintenance standard, upon written notification from the Lender, the Borrower shall have thirty (30) days from the receipt of such notice to cure said condition. In the event Borrower fails to cure the condition within the time allowed, the Lender shall have the right to perform all acts necessary to cure such a condition, or to take other recourse at law or equity to Lender may then have and to receive from the Borrower the Lender's cost in taking such action pursuant to Paragraph 6 below.

6. Protection of Lender's Security. If Borrower fails to perform the covenants and agreements contained in this Deed of Trust, or if any action or proceeding is commenced which materially affects Lender's interest in the Property, the Lender, at Lender's option, upon notice to Borrower, may make such appearance, disburse such sums, including reasonable attorney's fees, and take such action as is necessary to protect Lender's interest. If Lender required mortgage insurance asa condition of making the loan secured by this Deed of Trust, Borrower shall pay the premiums required to maintain such insurance in effect until such time as the requirement for such insurance terminates in accordance with borrower's and Lender's written agreement or applicable law.

Any amounts disbursed by Lender pursuant to paragraph 5 or paragraph 6, of this agreement shall accrue interest, at the lesser of 10% or the maximum amount permitted by law, shall become additional indebtedness of Borrower secured by this Deed of Trust. Unless Borrower and Lender agree to other terms of payment, such amounts shall be payable upon notice from Lender to Borrower requesting payment thereof. Nothing contained in paragraph 5 or 6 shall require lender to incur any expense or take any action hereunder.

Borrower shall provide Lender with proof of payment of property taxes and payments under any superior liens on the Property upon request of Borrower.

7. Inspection. Lender may make or cause to be made reasonable entries upon and inspection of the Property, provided that Lender shall give Borrower notice prior to any such inspection specifying reasonable cause therefore related to Lender's interest in the Property.

8. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender, subject and subordinate to the rights 010
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of the holder of any mortgage, deed of trust or other security agreement with a lien which has priority over this Deed of Trust.

9. Borrower Not Released; Forbearance By Lender Not a Waiver. Any forbearance by Lender in exercising any right or remedy hereunder, or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any such right or remedy.

10. Successors and Assigns Bound; Joint and Several Liability; Co-signers. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of Lender and Borrower. All covenants and agreements of Borrower shall be joint and several. Any Borrower who co-signs this Deed of Trust, but does not execute the Note, (a)is co-signing this Deed of Trust only to grant and convey said Borrower's interest in the Property of Trustee under the terms of this Deed of Trust, (b) is not personally liable on the Note or under this Deed of Trust, and (c) agrees that Lender and any other Borrower hereunder may agree to extend, modify, forbear, or make any other accommodations with regard to the terms of this Deed of Trustor the Note, without that Borrower's consent and without releasing that Borrower or modifying this Deed of Trust as to that Borrower's interest in the Property.

11. Notice. Except for any notice required under applicable law to be given in another manner, (a) any notice to Borrower provided for in this Deed of Trust shall be given by delivering it or by mailing such notice by certified mail addressed as Borrower may designate by notice to Lender as provided herein, and (b) any notice to Lender shall be given by certified mail to Lender's address stated herein or to such other address as Lender may designate by notice to Borrower as provided herein.

Any notice provided for this Deed of Trust shall be deemed to have been given to Borrower or Lender when given in the manner designated herein.

12. Governing Law; Severability. The state and local laws applicable to this Deed of Trust shall be the laws of the jurisdiction in which the Property is located. The foregoing sentence shall not limit the applicability of Federal law to this Deed of Trust. In the event that any provision or clause of this Deed of Trust or the Note conflicts with applicable law, such conflict shall not affect other provisions of this Deed of Trust or the Note which can be given effect without the conflicting provision, and to this end the provisions of the Deed of Trust and the Note are declared to be severable. As used herein, "costs", "expenses" and "attorneys' fees" include all sums to the extent not prohibited by applicable law or limited herein.

13. Borrower's Copy. Borrower shall be furnished a conformed copy of the Note and of this Deed of Trust at the time of execution or after recordation hereof.

14. Loan Charges. If a law which applies to this loan and which sets maximum loan charges is finally interpreted so that the interest to other loan charges collected or to be collected in connection with this loan exceed the permitted limits, then: 1) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and 2) any sums already collected which exceed permitted will be refunded to Borrower. Lender may choose to make this refund 011
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by reducing the principal owing under the Note or by making a direct refund to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment.

NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows:

15. Acceleration; Remedies. Upon Borrower's breach of any covenant or agreement of Borrower in this Deed of Trust, including the covenants to pay when due any sums secured by this Deed of Trust, Lender prior to acceleration shall give notice to Borrower as provided in paragraph 11 hereof and all senior lienholder specifying: (1) the breach; (2) the action required to cure such breach; (3) a date, not less than 10 days from the date of notice is mailed to Borrower, by which such breach must be cured; and (4) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the nonexistence of a default or other defense of Borrower to acceleration and sale. Lender shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph 15, including, but not limited to reasonable attorney's fees.

Except for a conveyance to the trustee under the First Deeds of Trust, or transfer exceptions as described on Page 1, Paragraph 1, Subsection a, if all or any part of the Property or any interest therein is sold or transferred in any manner or way, whether voluntarily or involuntarily, without the written consent of the Lender being first had and obtained. Lender shall have the right, at its option, except as prohibited by law, to declare any indebtedness or obligations secured hereby, immediately due and payable.

If lender exercises this option, Lender shall give Borrower and all senior lien holders prior written notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is mailed within which Borrower must pay all sums secured by this Deed of Trust. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Deed of Trust without further notice or demand on Borrower. Notwithstanding Lender's right to invoke any such remedies, Lender agrees that it will not commence foreclosure proceedings or accept a deed in lieu of foreclosure, or exercise any other rights or remedies hereunder until it has given the holders of the First Deed of Trust at least 60 days prior to written notice.

The Borrower and the Lender agree that whenever the Note or this Deed of Trust gives the Lender the right of approval or with respect to any matter affecting the Property (or the construction of any improvements thereon) or otherwise, and a right of approval or consent with regard to the same matter is also granted to the holder of the First Deed of Trust, such senior lienholder's approval or consent or failure to approve or consent, as the case may be, shall be binding on the Borrower and the Lender.

If Lender invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the occurrence of an event of default and of Lender's election to cause the Property to be sold and shall cause such notice to be 012
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recorded in each county in which the Property or some part thereof is located.

Lender or Trustee shall mail copies of such notice in the manner prescribed by applicable law. After the lapse of such time as may be required by applicable law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale in one or more parcels and in such order as Trustee may determine.

Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. Lender or Lender's designee may purchase the Property at any sale.

Trustee shall deliver to the purchaser Trustee's deed conveying the Property so sold without any covenant or warranty, expressed or implied. The recital in the Trustee's deed shall be prima facie evidence of the truth of the statement made therein. Trustee shall apply the proceeds of the sale in the following order: (a) to all reasonable costs and expenses of the sale, including, but not limited to, reasonable Trustee's and attorney' fees and costs of title evidence; (b) to all sums secured by this Deed of Trust; and (c) the excess, if any, to the person or persons legally entitled thereto.

16. Borrower's Right to Reinstate. Notwithstanding Lender's acceleration of the sums secured by this Deed of Trust due to Borrower's breach, Borrower shall have the right to have any proceeding begun by Lender to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of judgement enforcing this Deed of Trust if: (a) Borrower pays Lender all sums which would be then due under this Deed of Trust and the Note had no acceleration occurred; (b) Borrower cures all breaches of any other covenants or agreements of Borrower contained in this Deed of Trust; (c) Borrower pays all reasonable expenses incurred by Lender and Trustee in enforcing the covenants and agreement of Borrower contained in this Deed of Trust, and in enforcing Lender's and Trustee's remedies as provided in paragraph 15 hereof, including, but not limited to, reasonable attorney's fees; and (d) Borrower takes such action as Lender may reasonably require to assure that the lien of this Deed of Trust, Lender's interest in the Property and Borrower's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Borrower, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred.

17. Assignment of Rents; Appointment of Receiver; Lender in Possession. As additional security hereunder, Borrower hereby assigns to Lender the rents of the Property, provided that Borrower shall, prior to acceleration under paragraph 16 hereof or abandonment of the Property, have the right to collect and retain such rents as they become due and payable. Borrower shall not rent the Property without the prior written consent of Lender, which consent can be withheld for any reason or no reason. If Borrower rents the Property without the prior written consent of Lender, Lender may exercise its right of acceleration in accordance with paragraph 16 of this Agreement.

Upon acceleration under paragraph 16 hereof or abandonment of the Property, Lender, in person, by agent or by judicially appointed receiver shall be entitled to enter upon, take possession of and manage the Property and to collect the rents 013
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of the Property including those past due. All rents collected by Lender or the receiver shall be applied first to premiums on receiver's bonds and reasonable attorneys' fees, add them to the sums secured by this Deed of Trust. Lender and the receiver shall be liable to account only for those rents actually received.

18. Reconveyance. Upon payment of all sums secured by this Deed of Trust to Trustee, Trustee shall reconvey the Property without warranty and without charge to the person or persons legally entitles thereto. Such person or persons shall pay all costs of recordation, if any.

19. Substitute Trustee. Lender, at Lender's option, may from time to time appoint a successor trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the Recorder of Santa Clara County. The instrument shall contain the name of the original Lender, Trustee and Borrower, the book and page where this Instrument is recorded and the name and address of the successor trustee. The successors trustee shall, without conveyance of the Property, succeed to all the title, powers and duties conferred upon the Trustee herein and by applicable law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution.

20. Request for Notices. A request for notice of default and any notice of sale under any deed of trust or mortgage with power of sale encumbering the Property shall be recorded by Lender in the Office of the Recorder of Santa Clara County for the benefit of Lender under the procedure specified in Civil Code Section 2924b.

Lender may declare a default under this Deed of Trust upon receipt of any notice given to Lender pursuant to Civil Code Section 2924b, and may exercise any rights available to it under this Deed of Trust.

21. Statement of Obligation. Lender may collect a fee not to exceed $50 for furnishing the statement of obligation as provided by Section 2943 of the Civil Code California.

IN WITNESS WHEREOF, Borrower has executed this Deed of Trust.

BORROWER:

CRDSV, LLC dba Residence Inn Scotts Valley
(Notarized Signature)
By: Bijal Patel
Its: Chief Executive Officer
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LEGAL DESCRIPTION
To be attached.
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AGENDA ITEM 3
DATE: 06-15-22
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: June 15, 2022
TO: Honorable Mayor and City Council
FROM: Mali LaGoe, City Manager
SUBJECT: STRATEGIC PLAN FOLLOW UP AND WORKPLAN

SUMMARY OF ISSUE
On March 22 and April 7th, the City Council held two Strategic Planning Study Sessions to review the City’s strategic goals and discuss the City’s strategic priorities, as we rebuild and recover from the COVID-19 pandemic. The study sessions focused on clarifying what success would look like for each of the City’s four strategic goals.

These discussions helped to inform budget priorities for the FY22-23 budget and focus areas for City services moving forward.

Of the City’s four goals, two focus on high performance city operations while the other two focus on what makes the City of Scotts Valley the “right place” for people to live, work and visit.

City Operations Community Value
 Ensure long-term financial stability
 Implement operational initiatives to
enhance city services
 Encourage business development &
expand the City’s economic base
 Maintain quality of life for residents
The Council identified a few priorities related to these goals, and the Executive Team has further built out a workplan to address these and related priorities. Specifically, the Council prioritized developing a plan to address the City’s long-term pension and OPEB obligations and focusing resources on improving our parks and facilities. In addition, the Council expressed support for investments in technology and continued efforts to develop the Town Center.

Strategic Workplan Development
The Executive Team took this information and assessed the City’s current situation through questions such as: Where are we now? What opportunities or resources do we have (or need) to support where we want to go? And, what challenges or obstacles will inhibit our progress? The resulting information was used to define strategies that can be 001
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DATE: 06-15-22
deployed over the next 2-4 years and tactics to implement in the next 1-2 years as presented in the attached Strategic Workplan.

Flexibility and readiness are key to capturing emerging opportunities such as funding or partnerships while always keeping our sights on the end goal. Therefore, staff will remain ready to continuously adjust and adapt through the tactics in this plan to changing circumstances, while the goals set by Council remain our “north star”. Further, this Workplan is intended to be specific, but must also be agile and iterative to allow for continuous improvement in a volatile, uncertain, changing, and ambiguous environment.

It is intentionally not rigid with deadlines and metrics that could stifle creativity, ambition, and openness to reprioritization when it makes sense to do so. As this plan is implemented, the City Manager will provide timely updates to Council and future agenda items will be brought to the Council that execute the tactics included in this plan. New tactics will be added as information and opportunities emerge and current tactics will be removed once completed.

The City’s FY22-23 Budget includes funding related to this plan, specifically for:
 Consultants to conduct a Fee Schedule Study, advise the City on pension/OPEB debt strategy, assist the City with the Town Center project, advise on information technology needs, and conduct various park/facility assessments.  Contracts with the economic development partners, DEI trainers, and design and construction contractors for CIP projects.
 Technology such as software upgrades for Finance, HR, Public Works and Community Development; and hardware upgrades at City Hall, Wastewater Treatment Plant and Council Chambers.
 Staffing to fill key positions to manage and oversee these projects.

All City staff have a responsibility to know the City’s goals (as identified by Council) and Strategic Workplan (as developed by the Executive Team) and use those as their daily guide to prioritize tasks, decisions, and teamwork. A summary of this Workplan was presented at an All Staff Meeting on June 7th by the City Manager to convey the importance of this strategic alignment and invite staff to contribute their ideas. Staff were also asked to share their individual values which will be used to further develop a set of mission, vision, and values statements for the City of Scotts Valley over the next year.

FUNDING IMPACT
There is no fiscal impact resulting from this presentation.

STAFF RECOMENDATION
Receive a presentation from the City Manager regarding the City’s Strategic Workplan. 002
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DATE: 06-15-22

TABLE OF CONTENTS PAGE
City of Scotts Valley Strategic Workplan…………………………….………………….4 003
City of Scotts Valley
Strategic Workplan - June 2022
Goals, Strategies and Tactics
Strategies (2-4 years) Tactics (1-2 years)
Goal I: Ensure long-term financial stability
Goal II: Encourage business development and expand the City’s economic base • Conduct Fee Schedule Study and prepare updated fees for FY23/24 meeting cost recovery goals
• Monitor and support tax revenue growth opportunities under existing tax structure
• Research potential new revenue sources
Stabilize revenue
sources
• Hire a financial advisor to assess all pension/OPEB cost containment tools and develop strategy to manage/minimize liability
• Once a strategy is developed, implement initial steps Address pension &
OPEB liability
• Implement financial/budgetting software solution (ERP) to improve financial data and reporting
• Enhance 5 and 10 year forecasting tool for mulitple scenarios • Develop tool to track economic performance indicators Strengthen
financial
forcasting tools
• Implement OpenGov software for permit processing
• Implement OpenGov Business License software
• Address staffing shortages through recruitment and contracts Implement
electronic
systems &
increase capacity
for permit
processing
• Complete surface level environmental clean up
• Secure site control for Santa Cruz parcels
• Develop master site plan with stakeholder input
Prepare Town
Center site for
development
• Partner with the Chamber, SBDC and Workforce Santa Cruz County to offer resources to all Scotts Valley businesses • Partner with the Santa Cruz Arts Council to support Scotts Valley professional artists
• Continue to seek resources to assist recovering businesses Support postpandemic
economic
recovery
004
City of Scotts Valley
Strategic Workplan - June 2022
Goals, Strategies and Tactics
Strategies (2-4 years) Tactics (1-2 years)
Goal III: Implement operational initiatives to enhance city services Goal IV: Maintain quality of life for residents

• Contract with a new IT service provider for tech support, cyber security and IT management
• Implement hardware upgrades at City Hall and Wastewater • Implement software solutions in Finance, Human Resources, Public Works and Community Development
Implement
Technology
Solutions
• Develop a city mission, vision, values statements as guiding documents with input from staff
• Increase bidirectional communication about priorities, workload, problems and solutions
• Provide Diversity Equity & Inclusion training to all staff Enhance
organizational
culture
• Implement a simple survey tool to ask for resident feedback about city amenities and services
• Implement service request tool for public works services Seek community
feedback on
priorities and
service
satisfaction
• Invest in training, mentoring, resources for Officers • Upgrade facilities and technology where needed
• Focus on succession planing for leadership positions in the PD Maintain Police
Service levels
• Implement contracted landscape services for select areas • Prioritize CIP projects related to park infrastructure • Complete Parks Master Plan
Prioritize catch-up
maintenance at City
parks
• Implement recreation assessment recomendations
• Support local non-profit community events
• Support the Theater Guild in opening the Performing Arts Center • Provide grants to local non-profits serving SV residents • Promote diversity, equity and inclusion in the SV Community Support a sense of
community
through
gatherings,
activities,
inclusivity, and arts
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