Scotts Valley City Council
June 4, 2025

AGENDA
Meeting of the
Scotts Valley City Council
In-Person and Remote Access
Date: June 4, 2025
Time: 6:00 PM

CONTACT

INFORMATION

MEETING LOCATION POSTING
City of Scotts Valley
1 Civic Center Drive
Scotts Valley, CA 95066
(831) 440-5600
City Council Chambers
1 Civic Center Drive
Scotts Valley, CA 95066
OR
Zoom Video Conference
https://us02web.zoom.us/j/83295730901
Agenda posted on 5-30-
2025 at City Hall, SV
Senior Center, SV Public
Works Building, and on the
Internet
at: www.scottsvalley.gov

ELECTED OFFICIALS CITY STAFF MEMBERS
Derek Timm, Mayor
Allan Timms, Vice Mayor
Steve Clark, Council Member
Krista Jett, Council Member
Donna Lind, Council Member
Mali LaGoe, City Manager
Kirsten Powell, City Attorney
Cathie Simonovich, City Clerk

MEETING NOTICE AND AGENDA PACKET MATERIALS
Notice regarding City Council Meetings:

The City Council meets regularly on the 1st and 3rd Wednesday of each month at 6:00 PM in the City Hall Council Chambers located at 1 Civic Center Drive, Scotts Valley, CA 95066, and via Zoom Webinar remote access.

Agenda and Agenda Packet Materials:

The City Council agenda and the complete agenda packet are available for review by 5:00 PM the Friday before the Wednesday meeting on the Internet at the City’s website:
www.scottsvalley.gov and in the lobby of City Hall at 1 Civic Center Drive, Scotts Valley, CA.

Pursuant to Government Code §54957.5, materials related to an agenda item, submitted after distribution of the agenda packet, are available for public inspection in the lobby of City Hall during normal business hours, Monday-Friday, 8am-12 pm and 1-5 pm. In accordance with AB 1344, such documents will be posted on the City’s website at www.scottsvalley.gov.

Public Participation:

The meeting will be available on Zoom and livestreamed to the City of Scotts Valley’s YouTube channel: https://www.youtube.com/@cityofscottsvalley
For those wishing to participate via Zoom you can join the following ways:

Zoom Webinar meeting link: https://us02web.zoom.us/j/83295730901 Or dial one of these numbers: (669) 900-9128 or (669) 444-9171 Webinar ID: 832 9573 0901

City Council Meeting Agenda Page 2
Date: June 4, 2025
Whether attendance is in-person or remote, you will be given opportunities to provide public comment at the appropriate times throughout the meeting. The time limit is up to 3 minutes for an individual, or 5 minutes for someone who is representing a group of three or more, at the discretion of the Mayor. Please note that this is not a question-and-answer time, but simply a time to provide comments to the Council. At the appropriate times during the meeting for public comment, on items not on the agenda, and on specific agenda items, the Mayor will announce that public comment will be accepted.

How to comment via in-person attendance:

Please proceed to the public comment podium when the Mayor opens the item for public comment.

How to comment via Zoom Webinar:

Use the webinar attendee option to “raise hand” when the Mayor opens the item for public comment. The Clerk will unmute you when it is your turn. If you have joined via Zoom phone call, dial *9 or your phone to “raise your hand”, and the Clerk will unmute you when it is your turn.

CALL TO ORDER 6:00 PM
PLEDGE OF ALLEGIANCE and MOMENT OF SILENCE

ROLL CALL

SPECIAL SET MATTER

1. Mayor's Proclamation - July as "Parks Make Life Better!" Month

COMMITTEE REPORTS
Council members are appointed to committees which are either City committees or committees dealing with other jurisdictions. This portion of the agenda allows the committee member to present oral or written reports to the Council regarding their committee assignments. It also allows the Council to make comments and give the committee member direction, as required.

CITY MANAGER REPORT

PUBLIC COMMENT TIME
This is the opportunity for individuals attending in person to make oral comments to the Council on any items within the purview of the Council, which are NOT part of the Agenda. No action on the item may be taken, but the Council may request the matter be placed on a future agenda. Written public comment may be emailed to the City Clerk by 5:00 PM on the day of the meeting at [email protected].

City Council Meeting Agenda Page 3
Date: June 4, 2025

ALTERATIONS TO CONSENT AGENDA
Council can remove or add items to the Consent Agenda.

CONSENT AGENDA
The Consent Agenda is comprised of items which are intended to be non-controversial and are approved without discussion. Persons wishing to speak on any item may request the item be moved to the Regular Agenda by raising their hand to be recognized by the Mayor. An item will only be moved from the Consent Agenda to the Regular Agenda if a City Council Member requests it to be moved and a majority of the Council agrees.

1. Approve City Council minutes of 05-21-2025

2. Approve check register dated 05-17-2025 through 05-30-2025

3. Adopt resolution establishing the FY 2025-26 Appropriations Limit

4. Annual review of the Investment Policy

5. Adopt and approve annual budget items, including the Fiscal Year 2025-26 Budget

6. Pinewood Estates Maintenance Assessment District Request for Engineering Report

7. Skypark Open Space Maintenance Assessment District Request for Engineering Report

8. Award Contract to Rapid Grading Services for the Street Resurfacing and Pavement Repair Project and Authorize the City Manager to Enter into a Contract with Rapid Grading Services in an Amount Not to Exceed $1,854,000.

PUBLIC HEARINGS

1. Fiscal Year 2025 - 2026 SB 1 Projects

2. Measure D Five-Year Plan (2025-2030)

3. A public hearing to consider the Planning Commission's recommendation to 1) amend the Scotts Valley Municipal Code Title 16 (Subdivisions), Title 17 (Zoning), General Plan Land Use and Mobility Elements, and SB 9 Standards to implement the 2023-2031 Housing Element of the General Plan; and 2) adopt an Addendum to the General Plan EIR for the proposed amendments in compliance with the California Enviornmental Quality Act (CEQA)

City Council Meeting Agenda Page 4
Date: June 4, 2025

ALTERATIONS TO REGULAR AGENDA
Council can remove or add items to the Regular Agenda.

REGULAR AGENDA
Persons wishing to speak on any item may do so by raising their hand to be recognized by the Mayor.

1. Future Council Agenda Items

ADJOURNMENT

ADA NOTICE
The City of Scotts Valley does not discriminate against persons with disabilities. The City Council Chambers is an accessible facility. If you wish to attend a City Council meeting and require assistance such as sign language, a translator, or other special assistance or devices in order to attend and participate at the meeting, please call the City Clerk's office at (831) 440-5600 five to seven days in advance of the meeting to make arrangements for assistance. If you require the agenda of a City Council meeting be available in an alternative format consistent with a specific disability, please call the City Clerk’s Office. The California State Relay Service (TTY/VCO/HCO to Voice: English 1-800-735-2929, Spanish 1-800-855-3000; or, Voice to TTY/VCO/HCO: English 1-800-735-2922, Spanish 1-800-855-3000), provides Telecommunications Devices for the Deaf and Disabled and will provide a link between the TDD caller and users of telephone equipment.

City Council Meeting Agenda Page 5
Date: June 4, 2025

PROCEDURAL INFORMATION FOR THE PUBLIC

THE FOLLOWING IS THE PROCEDURE COUNCIL SHOULD TAKE IN
APPROVAL OF A RESOLUTION:

1. Move the Resolution number for approval.

2. Second the motion.

3. Vote by body, a roll call vote is not required.

THE FOLLOWING IS THE PROCEDURE COUNCIL SHOULD TAKE IN
INTRODUCTION/ADOPTION OF AN ORDINANCE:

1. Move the Ordinance number for introduction (or adoption).

2. Move the Ordinance be introduced by title only and waive the reading of the text.

3. Read the Ordinance title.

4. Second the motion.

5. Vote by body, a roll call vote is not required.

THE FOLLOWING IS THE PROCEDURE COUNCIL SHOULD TAKE IN
PUBLIC COMMENT/PUBLIC HEARINGS:

Unless otherwise determined by the presiding officer of the meeting:

1. Three minutes allowed per individual to speak.

2. Five minutes allowed per individual representing a group of three or more. ❖❖❖❖❖❖❖❖
The City of Scotts Valley does not discriminate against persons with disabilities. The City Council Chambers is an accessible facility. If you wish to attend a City Council meeting and require assistance such as sign language, a translator, or other special assistance or devices in order to attend and participate at the meeting, please call the City Clerk's office at (831) 440-5602 five to seven days in advance of the meeting to make arrangements for assistance. If you require the agenda of a City Council meeting be available in an alternative format consistent with a specific disability, please call the City Clerk’s Office. The California State Relay Service (TTY/VCO/HCO to Voice: English 1-800-735-2929, Spanish 1-800-855-3000; Voice to TTY/VCO/HCO: English 1- 800-735-2922, Spanish 1-800-855-3000; or, from or to Speech-to-Speech, English & Spanish 1- 800-854-7787), provides Telecommunications Devices for the Deaf and Disabled and will provide a link between the TDD caller and users of telephone equipment.

Signed and sealed this 4th day of June 2025
Derek Timm, Mayor
WHEREAS, Parks and Recreation promotes physical, emotional, and mental health and wellness through organized and self-directed fitness, play, and activity; and
WHEREAS, Parks and Recreation supports the economic vitality of communities by partnering with local businesses and non-profits, and offering events for resident’s engagement; and
WHEREAS, Parks and Recreation creates memorable experiences through youth sports and enrichment activities, senior activity centers, adult fitness, and enrichment programs, free community events, and beyond; and
WHEREAS, Parks and Recreation fosters social cohesiveness in communities by celebrating diversity, providing spaces to come together peacefully, modeling compassion, promoting social equity, connecting social networks, and ensuring all people have access to its benefits; and WHEREAS, Parks and Recreation supports human development and endless learning opportunities that foster social, intellectual, physical, and emotional growth in people of all ages and abilities; and WHEREAS, Parks and Recreation strengthens community identity by providing facilities and services that reflect and celebrate community character, heritage, culture, history, aesthetics, and landscape; and WHEREAS, Parks and Recreation facilitates community problem and issue resolution by providing safe spaces to come together peacefully and serving as key points of service, helping our communities heal both physically and emotionally; and
WHEREAS, Parks and Recreation sustains and stewards our natural resources by protecting habitats and open space, connecting people to nature, and promoting the ecological function of parkland; and
WHEREAS, Parks and Recreation supports safe, vibrant, attractive, progressive communities that make life better through positive alternatives offered in their recreational opportunities.

NOW, THEREFORE, I, Derek Timm, as Mayor of the City of Scotts Valley, on behalf of the entire City Council, do hereby declare the month of July as “Parks Make Life Better!” Month.

City of Scotts Valley
Mayor’s Proclamation
Declaring the Month of July as
“Parks Make Life Better!” Month

PLEDGE OF ALLEGIANCE and MOMENT OF SILENCE

ROLL CALL
CITY STAFF MEMBERS PRESENT:

Mali LaGoe, City Manager
Kirsten Powell, City Attorney
Steve Walpole, Police Chief
Stephanie Hill, Administrative Services Director
Rodolfo Onchi, Public Works Director
Taylor Bateman, Community Development
Director
Cathie Simonovich, City Clerk

ELECTED OFFICIALS
PRESENT:

Derek Timm, Mayor
Allan Timms, Vice Mayor
Steve Clark, Council Member
Krista Jett, Council Member
Donna Lind, Council Member

SPECIAL SET MATTER

MINUTES
Meeting of the
Scotts Valley City Council
Date: May 21, 2025
Time: 6:00 PM

CONTACT

INFORMATION

MEETING LOCATION POSTING
City of Scotts Valley City Council Chambers The agenda was posted 1 Civic Center Drive 1 Civic Center Drive on 05-16-2025 at City Scotts Valley, CA Scotts Valley, CA 95066 Hall, SV Senior Center, 95066 OR SV Public Works Building,
(831) 440-5600 Zoom Video Conference and on the Internet https://us02web.zoom.us/j/83295730901 at www.scottsvalley.gov.

CALL TO ORDER 6:00 PM
The City Council meeting was called to order at 6:00 PM.

1. Mayor's Proclamation - Homeless Garden Project, California Nonprofit of the Year
Mayor Timm presented the proclamation for the Homeless Garden Project. Brendan Miele, Board President, and Paul Goldberg, Development Director, accepted the proclamation for the Homeless Garden Project.

City Council Meeting Minutes
Date: May 21, 2025

COMMITTEE REPORTS

2. Mayor's Proclamation - Older Americans Month
Mayor Timm presented the proclamation for Older Americans Month. Dana Wagner, the Director of Meals on Wheels, accepted the proclamation on behalf of the Seniors Council and Meals on Wheels. Darshana Croskey, Senior Center Coordinator, also spoke regarding the proclamation.

3. Mayor's Proclamation - Public Works Week, May 18 - May 24 Mayor Timm presented the proclamation for Public Works Week and Public Works Director Onchi said a few words. A video showing the Public Works team in action was shown.

CM Lind attended a Criminal Justice Council (CJC) board meeting where they discussed various programs in place to take over the functions of the CJC when it is dissolved. The County of Santa Cruz will continue to maintain the website.

CM Lind attended a Santa Cruz Metropolitan Transit District (METRO) Finance meeting where they discussed the acquisition logistics of the new buses. She also attended a Board Meeting and noted that METRO has received several awards.

CM Lind congratulated Chief Walpole and all the awardees for the Scotts Valley Chamber of Commerce awards that were presented at the annual gala.

VM Timms attended the Queer Youth Leadership Awards (QYLA) along with Mayor Timm and noted it was an amazing event honoring some very impressive and courageous members of our City and County.

CM Jett attended the Town Center Subcommittee meeting where they discussed the Environmental Impact Report (EIR) and the EIR scoping meeting, which will be held Thursday, May 22, 2025, at 5:30 PM in the Council Chambers.

CM Jett attended the Youth Action Network (YAN) Pathways to Possibilities (P2P) endof-year listening party. About 10-12 Scotts Valley high school students attended this meeting and provided positive and valuable feedback.

CM Jett noted that there will be a Youth & Adult Partnership Summit on June 18 from 1:00 PM to 5:00 PM at Cabrillo College. Registration is available on the United Way website.

CM Clark noted that the Regional Transportation Commission (RTC) will be seeking input on the North Coast Transportation Demand Management (TDM) Plan and will host a virtual workshop on May 29 from 5:30 PM to 7:00 PM. The webinar link and more information can be found on the RTC website.

CM Clark attended an Economic Development Committee meeting and noted that the

City Council Meeting Minutes
Date: May 21, 2025

CITY MANAGER REPORT
business outreach program is in process and the Measure X business license implementation is underway.

CM Clark attended the Chamber of Commerce Economic Development meeting with City Manager LaGoe, and they reported on the pavement management plan, the Town Center progress, and the implementation of the new business license fee structure.

Mayor Timm attended the Town Center Subcommittee meeting and reported that they reviewed the temporary uses of the Town Center property.

Mayor Timm attended the Association of Monterey Bay Area Governments (AMBAG) meeting, and he noted that AMBAG is now part of a new rural energy network. Through this program, approximately $36M will be available to implement energy efficiency projects throughout our region. Additionally, they approved the draft 2025-2026 Monterey Bay Region Overall Work Program (OWP) and the budget.

Pavement Management Program: This is out for bid and will close May 23 at 2:00 PM and the bid opening will occur immediately after that. The PMP includes 18 lane miles of pavement resurfacing across the City.

Pothole Repairs: The Public Works staff members have been doing much-needed pothole repairs up and down Mt. Hermon Road. City Manager LaGoe thanked the public for their patience and for keeping the Public Works crew safe.

Signal Timing Improvements on Mt. Hermon Road: The signal light timing improvements along Mt. Hermon Road have been installed, so the signals have been synchronized during the peak traffic periods. There will be additional fine-tuning when the back-ordered equipment is installed.

Sports Fields/Grass Areas: City Manager LaGoe gave a huge thank you to the City's Maintenance staff, who have been doing a great job staying on top of irrigation issues, gopher issues, and making sure that the quality of grass is as good as it can possibly be for our amazing youth athletes and everyone who uses the fields.

Summer Events Walk-Through: In preparation for the Art, Wine and Beer Festival and other upcoming community events, City staff will be meeting with the Chamber representatives to complete a walk-through of the area to make sure needs are met and concerns are addressed
Planning Department Staffing: Last week the new Associate Planner Joshua Wozynski started, and interviews for the open Senior Planner position are next week.

Town Center Scoping Meeting: This meeting will be held on May 22 at 5:30 PM in

City Council Meeting Minutes
Date: May 21, 2025

PUBLIC COMMENT TIME

WRITTEN COMMUNICATIONS
the City Council Chambers and the public will have the opportunity to provide input on what should be studied in the EIR.

Arts and Poetry Contest Winners: City Manager LaGoe congratulated the arts and poetry contest winners. The winners were honored at the Arts Commission meeting and also at the showcase event at the Community Center.

Reminders:
• Follow the City on social media
• Subscribe to the City's newsletter
Kristyn Glenn, the Development Manager for Dientes Community Dental Care, thanked the Council for the grant award through the City's Community Grant Program. She stressed how important proper dental care is for our most vulnerable citizens.

Robert Aldana, a resident of Scotts Valley, thanked the Council for displaying the Pride flag in the month of June, and he thanked the Council for honoring the Homeless Garden Project. He is pleased that Scotts Valley continues to be an inclusive community.

Darshana Croskey, a resident of Scotts Valley, thanked the Council for displaying the Pride flag in the month of June, but also questioned why the Council must follow the approval process in order to do so.

Dylan Jones, a resident of Scotts Valley, spoke regarding the residency requirements for the City Manager.

Cynthia Dzendzel, a resident of Scotts Valley, thanked the Council for the proclamation for Older Americans Month and for the vital Senior Center events and programming.

1. Letter from Dylan Jones dated 05-06-2025
Mayor Timm requested that City Attorney Powell address: 1) Process for display of flags, and 2) City Manager residency requirements. City Attorney responded with the following information:

1. Display of flags: The City has a flag policy that is to be followed anytime there is a request by a Council Member to display a commemorative flag (Resolution No. 2014).

City Council Meeting Minutes
Date: May 21, 2025

ALTERATIONS TO CONSENT AGENDA

CONSENT AGENDA

PUBLIC HEARINGS

2. City Manager residency requirements: The City has complied with both the Government Code and the City's Municipal Code regarding the residency requirements for the City Manager.

Dylan Jones spoke regarding the residency requirements for the City Manager.

M/S: Timms/Clark
To approve the Consent Agenda with no alterations.

Carried 5/0 (AYES: Timm, Timms, Clark, Jett, Lind)

1. Approve City Council minutes of 05-07-2025

2. Approve check register dated 05-03-2025 through 05-16-2025

3. Road closure for City's 4th of July Parade

4. Final Map and Subdivision Improvement Agreement for Casa Way Residential Subdivision, a Nine-Lot Subdivision Located at the Intersection of Casa Way and Sandraya Heights Road/APN 023-113-36

5. Second reading and adoption of Ordinance No. 22-200.3 AB 481 Military Equipment Use policy renewal

6. Second reading and adoption of Ordinance 7.8 amending Title 8 of the Scotts Valley Municipal Code by repealing Chapter 8.04 in its entirety and by adding a new Chapter 8.05, Graffiti Abatement - Public Nuisance

1. Public Hearing to consider Resolution 1198.79 adopting proposed FY2025/26 User Fee Schedule and Charges
Administrative Services Director Hill presented this item.

Mayor Timm opened the public hearing at 6:54 PM. No members of the public provided comment, and Mayor Timm closed the public hearing at 6:55 PM.

M/S: Clark/Lind
To adopt Resolution 1198.79 adopting the proposed FY2025/26 User Fee Schedule and Charges.

Carried 5/0 (AYES: Timm, Timms, Clark, Jett, Lind)

City Council Meeting Minutes
Date: May 21, 2025

REGULAR AGENDA

CLOSED SESSION SUBJECT(S)
M/S: Lind/Clark
To approve the Regular Agenda with no alterations.

Carried 5/0 (AYES: Timm, Timms, Clark, Jett, Lind)

1. Five-Year Capital Improvement Plan for Fiscal Year 2025-2026 to Fiscal Year 2029-2030
Public Work Director Onchi presented this item and responded to questions from the Council Members. The Council provided input and CM Clark requested that the two Siltanen Park projects be revisited for funds availability at the mid-year review.

John Marlow, a resident of Scotts Valley, asked about when and how the City will consider the impact on the roads of the 100 new housing units and the related funding issues.

Dylan Jones, a resident of Scotts Valley, congratulated the Public Works Department on recent road work that was completed near his street. He also questioned the decision to have bike lanes in both directions on the Granite Creek overpass.

2. Presentation of the Proposed Fiscal Year 2025-26 Budget, Long-Range Financial Forecast, and Fund Matrix
City Manager LaGoe presented the budget process, the strategic goals for 2025-2027, strengths/challenges, major initiatives, and the road ahead. Administrative Services Director Hill presented the details of the proposed 2025-2026 budget.

Dylan Jones, a resident of Scotts Valley, asked about the outstanding loans, and he suggested that volunteers could do work to free up staff to complete other tasks.

The Council reviewed the discussion items in the presentation and directed staff to include the $50K for the Community Grant program, but to not issue the Request for Proposals (RFP) until a determination is made at the mid-year budget review.

3. Future Council Agenda Items
None.

The City Council convened to closed session at 8:36 PM to discuss the following items:

ALTERATIONS TO REGULAR AGENDA

CONVENE TO CLOSED SESSION

City Council Meeting Minutes
Date: May 21, 2025

RECONVENE TO OPEN SESSION

REPORT ON ACTION TAKEN DURING CLOSED SESSION

ADJOURNMENT

1. Conference with legal counsel regarding liability claim Legal Authority: Government Code Section 54956.95
Claimant: James Ross
Staff Present: City Manager, City Attorney, Administrative Services Director

2. Conference with legal counsel regarding existing litigation Legal Authority: Government Code Section 54956.9
Name of Case: Roseann Dudrick vs. Land Trust of Santa Cruz County, et al. Superior Court of California County of Santa Cruz, Case Number: 24CV00230
Staff Present: City Manager, City Attorney, Administrative Services Director
The City Council reconvened to open session at 8:47 PM.

City Attorney Powell reported that the City Council met in Closed Session regarding the existing litigation of Rosann Dudrick vs. the Land Trust of Santa Cruz County, and the City Council voted unanimously to authorize the City Manager to enter into a settlement in which another party in the case will pay $100K to settle the case and there will be no cost to the City of Scotts Valley.

The meeting adjourned at 8:48 PM.

Attest:

Cathie Simonovich, City Clerk
Approved:

Derek Timm, Mayor

apadatecr2 City of Scotts Valley llambert 05/30/2025 11:00 Page 1 A/P Check Register Checks from 05/17/2025 to 05/30/2025
Check Check Vendor Name Net Check Check CheckNumber Date Amount Status Type Cash Account: 999-10100-000-000-000000
134029 05/22/25 ACC BUSINESS 1,830.64 O Payment Manager 134030 05/22/25 AFLAC-FLEX ONE 738.29 O Regular134031 05/22/25 AMAZON CAPITAL SERVICES 25.28 O Regular134032 05/22/25 AT&T 87.48 O Regular134033 05/22/25 COMCAST 453.91 O Payment Manager134034 05/22/25 COMPUTERSMITHS LLC 198.75 O Regular134035 05/22/25 CORO MEDICAL LLC 6,180.00 O Regular134036 05/22/25 COUNTY OF SANTA CRUZ 1,198.08 O Regular134037 05/22/25 CSG CONSULTANTS, INC 270.00 O Regular134038 05/22/25 DEPT OF JUSTICE 96.00 O Regular134039 05/22/25 DOCTORS ON DUTY 260.00 O Regular134040 05/22/25 GOOD CITY COMPANY 23,564.50 O Regular134041 05/22/25 GRAINGER 272.77 O Regular134042 05/22/25 INTERWEST CONSULTING GROUP 8,880.00 O Regular134043 05/22/25 JEREMY LONG 387.00 O Regular134044 05/22/25 JUSTIN TAYLOR 854.09 O Regular134045 05/22/25 KOSMONT COMPANIES, INC 10,378.75 O Regular134046 05/22/25 M-GROUP 12,015.00 O Regular134047 05/22/25 MUTUAL OF OMAHA 1,157.83 O Regular134048 05/22/25 S.V. WATER DISTRICT 6,319.90 O Regular134049 05/22/25 S.V. WATER DISTRICT - BULK 87.80 O Regular134050 05/22/25 SANTA CRUZ COUNTY CONFERENCE 26,812.76 O Regular134051 05/22/25 SANTA CRUZ SENTINEL 207.90 O Payment Manager134052 05/22/25 SCARBOROUGH LUMBER 103.81 O Regular134053 05/22/25 URBAN FIELD STUDIO OAKLAND 2,372.50 O Regular134054 05/22/25 WIZIX TECHNOLOGY GROUP, INC 718.41 O Payment Manager134055 05/30/25 ALVAREZ IND INC CLEAN BLDG 615.00 O Regular134056 05/30/25 AT&T 452.96 O Regular134057 05/30/25 BELLOWS PLUMBING HEATING & AIR 24,581.50 O Regular134058 05/30/25 BLUETRITON BRANDS INC 331.74 O Regular134059 05/30/25 CALIFORNIA COAST UNIFORM CO 232.59 O Regular134060 05/30/25 COMCAST 723.72 O Payment Manager134061 05/30/25 COMMUNITY PRINTERS INC. 647.66 O Payment Manager134062 05/30/25 DYNAMIC PRESS 283.16 O Regular134063 05/30/25 JEREMY LONG 346.46 O Regular134064 05/30/25 KIWANIS CLUB OF SCOTTS VALLEY 250.00 O Regular134065 05/30/25 LAFCO 7,906.44 O Regular134066 05/30/25 LOGAN & POWELL, LLP 522.00 O Regular134067 05/30/25 MP EXPRESS, INC. 628.44 O Regular134068 05/30/25 MUTUAL OF OMAHA 1,218.95 O Regular134069 05/30/25 PALACE BUSINESS SOLUTIONS 127.50 O Regular134070 05/30/25 PRESS BANNER 305.70 O Regular134071 05/30/25 PRINICPAL LIFE INSURANCE CO 7,894.42 O Regular134072 05/30/25 SHARRON BARTH 48.40 O Regular

apadatecr2 City of Scotts Valley llambert 05/30/2025 11:00 Page 2 A/P Check Register Checks from 05/17/2025 to 05/30/2025
Check Check Vendor Name Net Check Check CheckNumber Date Amount Status Type134073 05/30/25 SUMMIT UNIFORMS 2,821.88 O Regular134074 05/30/25 TALLEN CALIFORNIA, LLC 12,600.00 O Regularapadatecr2 City of Scotts Valley llambert 05/30/2025 11:00 Page 2 A/P Check Register Checks from 05/17/2025 to 05/30/2025
40 Checks total: 163,427.73
0 ACH total:0 EFTPS total:0 Wire transfer total:6 Payment Manager total: 4,582.24 46 GRAND TOTALS 168,009.97

AGENDA ITEM 3.

DATE: 6/4/2025
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 6/4/2025
TO: Honorable Mayor and City Council
FROM: Kendra Reed, Finance Manager
APPROVED: Mali LaGoe, City Manager
SUBJECT: Adopt resolution establishing the FY 2025-26 Appropriations Limit

SUMMARY OF ISSUE
On November 6, 1979, California voters approved Proposition 4, commonly known as the Gann Initiative, establishing Article XIIIB of the California State Constitution. This proposition mandated an appropriation (spending) limit on the amount of tax proceeds that the State and most local government jurisdictions may appropriate within a fiscal year. Charges for services, fees, grants, loans, donations, and other non-tax proceeds are excluded from the spending limitation.

The Initiative was later modified by two propositions: Proposition 98 in 1988 and Proposition 111 in 1990. Proposition 98 established the return of tax revenues exceeding appropriation limit levels to the State or citizens through a process of refunds, rebates, or other means.

Proposition 111 allowed more flexibility in the appropriation calculation factors. Significant changes imposed by Proposition 111 include the following:
• The provision of a choice in methodologies for determining the annual inflation factor between 1) growth in California per capita income or 2) growth in non-residential assessed valuation due to new construction within the city. • The provision of a choice in methodologies for determining the annual population growth factor between 1) city population growth or 2) county population growth. • Regulations allowing the exclusion of “qualified capital outlay” expenditures from the calculation of the Limit.
• Provision of a process for avoiding tax refunds if a city falls sufficiently below the Limit in the next fiscal year. The revised language provides two years, beyond the second year, to refund any remaining excess during which jurisdictions can seek to obtain a successful override vote.

FISCAL IMPACT
There is no fiscal impact from this action.

STAFF RECOMMENDATION

It is recommended that the City Council adopt Resolution No. 1007.38 containing the following:

1. Elect the per capita income index as the inflation factor for FY 2025-2026;

2. Elect the County population growth index as the population factor for FY 2025-2026; and

3. Establish the FY 2025-2026 Appropriation Limit at $269,843,673 in compliance with Article XIIIB of the State of California Constitution.

The calculation of the FY 2025-26 Gann Appropriation Limit is as follows:

County
Population
Factor
Per Capita
Income Factor
Appropriation
Factor
FY 2024-25
Appropriation
Limit
FY 2025-26
Appropriation
Limit

1.001 x 1.064 = 1.065 x $253,263,904 = $269,843,673

TABLE OF CONTENTS

1. Resolution No. 1007.38 - FY 2025-26 Gann Appropriations Limit

2. Department Of Finance Price & Population Data May 2025

3. Santa Cruz County 2024-25 Non-Residential Construction

RESOLUTION NO. 1007.38

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF SCOTTS MAKING CERTAIN FINDINGS AND

DETERMINATIONS IN COMPLIANCE WITH SECTION XIII B OF THE

CALIFORNIA CONSTITUTION (GANN INITIATIVE) AND SETTING
THE APPROPRIATIONS LIMIT FOR FISCAL YEAR 2025-26
BE IT RESOLVED by the City Council of the City of Scotts Valley that in compliance with Section XIII B of the Constitution of the State of California, the following is hereby found and determined:

1. That the appropriations limit under the Gann Initiative for FY 2024/2025 was $253,263,904; and

2. The change in population in the County of Santa Cruz in 2024, according to the State of California was 0.10%, and was selected as a factor; and

3. That during fiscal year 2024/2025, according to the State, the percentage change in per capita personal income in California was 6.44%, and was selected as a factor; and

4. That the appropriations limit under the Gann Initiative for FY 2025/2026 is $269,843,673; and

5. That the documentation for establishing the appropriations limit for 2025/2026 was prepared by the Administrative Services Department and presented to the City Council on June 4, 2025.

6. That more than 15 days have elapsed since documentation used in this determination was made available to the public.

The foregoing resolution was adopted by the City Council of the City of Scotts Valley at a regularly scheduled meeting held on the 4th day of June, 2025 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved:___________________________
Derek Timm, Mayor
Attest:___________________________
Cathie Simonovich, City Clerk

May 2025
Dear Fiscal Officer:

Subject: Price Factor and Population Information
Appropriations Limit
California Revenue and Taxation Code Section 2227 requires the Department of Finance to transmit an estimate of the percentage change in population to local governments. Each local jurisdiction must use their percentage change in population factor for January 1, 2025, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2025-26. Attachment A provides the change in California’s per capita personal income and an example for utilizing the price factor and population percentage change factor to calculate the 2025-26 appropriations limit. Attachment B provides the city and unincorporated county population percentage change along with the population percentage change for counties and their summed incorporated areas. The population percentage change data excludes federal and state institutionalized populations and military populations.

Population Percent Change for Special Districts
Some special districts must establish an annual appropriations limit. California Revenue and Taxation Code Section 2228 provides additional information regarding the appropriations limit.

Article XIII B, Section 9(C) of the California Constitution exempts certain special districts from the appropriations limit calculation mandate. The code section and the California Constitution can be accessed at the following website: http://leginfo.legislature.ca.gov/faces/codes.xhtml.

Special districts required by law to calculate their appropriations limit must present the calculation as part of their annual audit. Any questions special districts have on this requirement should be directed to their county, district legal counsel, or the law itself. No state agency reviews the local appropriations limits.

Population Certification
The population certification program applies only to cities and counties. California Revenue and Taxation Code Section 11005.6 mandates Finance to automatically certify any population estimate that exceeds the current certified population with the State Controller’s Office. Finance will certify the higher estimate to the State Controller by June 1, 2025.

Please Note: The prior year’s city population estimates may be revised. The per capita personal income change is based on historical data.

If you have any questions regarding this data, please contact the Demographic Research Unit at (916) 323-4086.

JOE STEPHENSHAW
Director
By:

ERIKA LI
Chief Deputy Director
Attachment

May 2025
Attachment A
A. Price Factor: Article XIII B specifies that local jurisdictions select their cost of living factor to compute their appropriation limit by a vote of their governing body. The cost of living factor provided here is per capita personal income. If the percentage change in per capita personal income is selected, the percentage change to be used in setting the fiscal year 2025-26 appropriation limit is:

Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2025-26 6.44
B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2025-26 appropriation limit.
2025-26:

Per Capita Cost of Living Change = 6.44 percent
Population Change = 0.28 percent
Per Capita Cost of Living converted to a ratio: 6.44 + 100 = 1.0644 100
Population converted to a ratio: 0.28 + 100 = 1.0028
100
Calculation of factor for FY 2025-26: 1.0644 x 1.0028 = 1.0674

FISCAL YEAR 2025-26 About the Data
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2024 to January 1, 2025 and Total Population January 1, 2025 City County Percent Change 24-25
Population Minus
Exclusions 1-1-24
Population Minus
Exclusions 1-1-25 Total Population 1-1-25
Alameda City Alameda -0.22 78,406 78,236 79,020
Albany City Alameda 0.28 20,520 20,578 20,578
Berkeley City Alameda 1.32 126,676 128,348 128,348
Dublin City Alameda 2.17 72,462 74,031 74,691
Emeryville City Alameda -0.28 13,509 13,471 13,471
Fremont City Alameda 0.16 232,241 232,619 232,619
Hayward City Alameda 0.24 161,977 162,359 162,359
Livermore City Alameda -0.23 86,094 85,899 85,899
Newark City Alameda 1.04 48,382 48,886 48,886
Oakland City Alameda 0.52 424,015 426,237 426,457
Piedmont City Alameda -0.28 10,836 10,806 10,806
Pleasanton City Alameda -0.38 77,526 77,232 77,232
San Leandro City Alameda -0.35 88,124 87,813 87,813
Union City Alameda -0.36 66,898 66,657 66,657
Balance of County Alameda -0.27 147,978 147,579 147,646 Incorporated Alameda 0.37 1,507,666 1,513,172 1,514,836 County Total Alameda 0.31 1,655,644 1,660,751 1,662,482 Balance of County Alpine -0.42 1,181 1,176 1,177
County Total Alpine -0.42 1,181 1,176 1,177
Amador City Amador -0.51 197 196 196
Ione City Amador -0.19 5,173 5,163 9,037
Jackson City Amador -1.69 4,905 4,822 4,822
Plymouth City Amador 1.17 1,109 1,122 1,122
Sutter Creek City Amador -1.63 2,580 2,538 2,538
Balance of County Amador -1.63 22,167 21,805 21,848
Incorporated Amador -0.88 13,964 13,841 17,715
County Total Amador -1.34 36,131 35,646 39,563
Biggs City Butte -1.25 1,998 1,973 1,973
Chico City Butte 2.59 110,971 113,847 113,847
Gridley City Butte -1.10 7,383 7,302 7,302
Oroville City Butte 2.25 19,221 19,653 19,653
Paradise Town Butte 7.83 10,283 11,088 11,088
Balance of County Butte -7.51 58,017 53,662 53,662
Incorporated Butte 2.67 149,856 153,863 153,863
County Total Butte -0.17 207,873 207,525 207,525
Angels City Calaveras -0.42 3,585 3,570 3,570
Balance of County Calaveras -0.21 41,183 41,096 41,152
Incorporated Calaveras -0.42 3,585 3,570 3,570
County Total Calaveras -0.23 44,768 44,666 44,722
Colusa City Colusa -0.18 6,548 6,536 6,536
Williams City Colusa -0.48 5,616 5,589 5,589
Balance of County Colusa -0.28 9,929 9,901 9,901
Incorporated Colusa -0.32 12,164 12,125 12,125
County Total Colusa -0.30 22,093 22,026 22,026
Antioch City Contra Costa 0.52 116,177 116,781 116,781
Brentwood City Contra Costa 0.60 65,353 65,747 65,747
Clayton City Contra Costa -0.46 10,793 10,743 10,743
Concord City Contra Costa -0.34 123,074 122,650 122,650 Danville Town Contra Costa -0.16 43,030 42,960 42,960
El Cerrito City Contra Costa -0.31 25,943 25,862 25,862 Hercules City Contra Costa -0.50 26,357 26,225 26,225
Lafayette City Contra Costa -0.08 25,073 25,054 25,054
Martinez City Contra Costa -0.15 36,871 36,817 36,817
Moraga City Contra Costa -1.98 16,973 16,637 16,637
Oakley City Contra Costa 1.32 46,218 46,826 46,826
Orinda City Contra Costa -0.23 19,395 19,351 19,351
Pinole City Contra Costa -0.45 18,344 18,261 18,261
Pittsburg City Contra Costa 0.64 75,887 76,374 76,374
Pleasant Hill City Contra Costa -0.28 33,694 33,601 33,601 Richmond City Contra Costa -0.24 113,872 113,594 113,594 San Pablo City Contra Costa 0.18 31,450 31,507 31,507
San Ramon City Contra Costa 0.18 83,245 83,391 83,391
Walnut Creek City Contra Costa -0.44 70,238 69,927 69,927 Balance of County Contra Costa -0.20 176,178 175,833 175,917 Incorporated Contra Costa 0.03 981,987 982,308 982,308
County Total Contra Costa 0.00 1,158,165 1,158,141 1,158,225 Crescent City Del Norte -0.69 4,064 4,036 6,056
Balance of County Del Norte -1.44 20,738 20,439 20,488
Incorporated Del Norte -0.69 4,064 4,036 6,056
County Total Del Norte -1.32 24,802 24,475 26,544
Placerville City El Dorado 0.14 10,617 10,632 10,642
South Lake Tahoe City El Dorado -0.05 21,033 21,022 21,022 Balance of County El Dorado 0.09 158,862 159,009 159,106 Incorporated El Dorado 0.01 31,650 31,654 31,664
County Total El Dorado 0.08 190,512 190,663 190,770
Clovis City Fresno 1.13 127,674 129,121 129,121
Coalinga City Fresno 0.00 13,419 13,419 17,608
Firebaugh City Fresno 2.40 8,510 8,714 8,714
Fowler City Fresno 3.11 7,436 7,667 7,667
Fresno City Fresno 0.77 552,416 556,690 557,032
Huron City Fresno 7.96 6,421 6,932 6,932

Kerman City Fresno 0.76 17,403 17,535 17,535
Kingsburg City Fresno 0.90 13,167 13,285 13,285
Mendota City Fresno 0.89 12,598 12,710 12,710
Orange Cove City Fresno 0.99 9,622 9,717 9,717
Parlier City Fresno 0.78 14,535 14,649 14,649
Reedley City Fresno 2.52 25,950 26,603 26,603
Sanger City Fresno 1.44 26,652 27,037 27,037
San Joaquin City Fresno 0.03 3,653 3,654 3,654
Selma City Fresno 0.40 24,487 24,585 24,585
Balance of County Fresno 0.17 158,883 159,148 160,204
Incorporated Fresno 0.97 863,943 872,318 876,849
County Total Fresno 0.84 1,022,826 1,031,466 1,037,053
Orland City Glenn 1.17 8,603 8,704 8,704
Willows City Glenn 1.62 6,372 6,475 6,475
Balance of County Glenn 1.33 14,004 14,190 14,190
Incorporated Glenn 1.36 14,975 15,179 15,179
County Total Glenn 1.35 28,979 29,369 29,369
Arcata City Humboldt 1.66 18,691 19,001 19,001
Blue Lake City Humboldt -0.70 1,144 1,136 1,136
Eureka City Humboldt 0.00 25,966 25,967 26,122
Ferndale City Humboldt -0.44 1,367 1,361 1,361
Fortuna City Humboldt -0.38 12,245 12,198 12,198
Rio Dell City Humboldt -0.71 3,255 3,232 3,232
Trinidad City Humboldt -0.67 298 296 296
Balance of County Humboldt -0.73 70,625 70,107 70,471
Incorporated Humboldt 0.36 62,966 63,191 63,346
County Total Humboldt -0.22 133,591 133,298 133,817
Brawley City Imperial 0.84 28,710 28,952 28,952
Calexico City Imperial 0.78 39,762 40,073 40,073
Calipatria City Imperial 0.69 3,646 3,671 6,061
El Centro City Imperial 1.12 45,456 45,966 46,007
Holtville City Imperial 0.57 5,653 5,685 5,685
Imperial City Imperial 1.98 22,422 22,866 22,866
Westmorland City Imperial 0.39 2,076 2,084 2,084
Balance of County Imperial 0.59 31,371 31,557 34,771
Incorporated Imperial 1.06 147,725 149,297 151,728
County Total Imperial 0.98 179,096 180,854 186,499
Bishop City Inyo -0.10 3,854 3,850 3,850
Balance of County Inyo -0.31 14,938 14,892 14,950
Incorporated Inyo -0.10 3,854 3,850 3,850
County Total Inyo -0.27 18,792 18,742 18,800
Arvin City Kern 0.99 19,796 19,991 19,991
Bakersfield City Kern 1.16 414,451 419,238 419,238
California City Kern 0.97 13,189 13,317 13,317
Delano City Kern 1.15 46,036 46,566 52,831
Maricopa City Kern 0.59 1,018 1,024 1,024
McFarland City Kern 2.24 13,902 14,213 14,213
Ridgecrest City Kern 0.25 27,664 27,732 28,386
Shafter City Kern 4.72 22,356 23,412 23,455
Taft City Kern -0.03 7,089 7,087 7,087
Tehachapi City Kern 0.64 9,372 9,432 11,476
Wasco City Kern -2.55 23,447 22,850 26,235
Balance of County Kern 0.05 304,188 304,351 306,708
Incorporated Kern 1.09 598,320 604,862 617,253
County Total Kern 0.74 902,508 909,213 923,961
Avenal City Kings 1.07 9,431 9,532 13,315
Corcoran City Kings 0.88 13,547 13,666 21,612
Hanford City Kings 2.31 59,856 61,238 61,238
Lemoore City Kings 2.10 27,122 27,692 27,692
Balance of County Kings 1.45 25,135 25,500 30,158
Incorporated Kings 1.98 109,956 112,128 123,857
County Total Kings 1.88 135,091 137,628 154,015
Clearlake City Lake 1.01 16,367 16,533 16,533
Lakeport City Lake -0.85 5,069 5,026 5,026
Balance of County Lake -0.61 45,889 45,607 45,695
Incorporated Lake 0.57 21,436 21,559 21,559
County Total Lake -0.24 67,325 67,166 67,254
Susanville City Lassen 1.90 9,199 9,374 12,270
Balance of County Lassen 1.77 14,802 15,064 16,446
Incorporated Lassen 1.90 9,199 9,374 12,270
County Total Lassen 1.82 24,001 24,438 28,716
Agoura Hills City Los Angeles -0.18 19,940 19,904 19,904 Alhambra City Los Angeles 0.22 82,176 82,353 82,374
Arcadia City Los Angeles 0.13 56,044 56,116 56,116
Artesia City Los Angeles 1.33 16,060 16,273 16,359
Avalon City Los Angeles -0.12 3,387 3,383 3,383
Azusa City Los Angeles -1.50 49,736 48,988 48,988
Baldwin Park City Los Angeles 0.23 70,685 70,848 70,848 Bell City Los Angeles -0.15 33,366 33,315 33,315
Bellflower City Los Angeles -0.32 76,902 76,656 76,656
Bell Gardens City Los Angeles 0.09 38,438 38,471 38,471 Beverly Hills City Los Angeles -0.12 31,984 31,945 31,945 Bradbury City Los Angeles 0.78 895 902 902
Burbank City Los Angeles 0.29 105,842 106,146 106,146
Calabasas City Los Angeles -0.26 22,856 22,797 22,797
Carson City Los Angeles 0.07 91,745 91,808 91,812
Cerritos City Los Angeles -0.28 48,005 47,871 47,871
Claremont City Los Angeles -0.02 37,305 37,299 37,299

Commerce City Los Angeles -0.32 12,185 12,146 12,146
Compton City Los Angeles -0.01 93,699 93,692 93,692
Covina City Los Angeles 0.92 50,625 51,090 51,090
Cudahy City Los Angeles -0.34 22,208 22,132 22,132
Culver City Los Angeles 0.16 40,340 40,403 40,403
Diamond Bar City Los Angeles -0.07 53,577 53,539 53,539 Downey City Los Angeles -0.02 111,891 111,871 111,871
Duarte City Los Angeles -0.22 23,798 23,746 23,746
El Monte City Los Angeles 0.82 107,056 107,938 107,986
El Segundo City Los Angeles -0.11 16,976 16,958 16,983
Gardena City Los Angeles 0.14 60,176 60,263 60,263
Glendale City Los Angeles 0.26 191,706 192,212 192,212
Glendora City Los Angeles -0.07 51,289 51,254 51,254
Hawaiian Gardens City Los Angeles 0.07 13,552 13,561 13,561 Hawthorne City Los Angeles -0.25 85,868 85,653 85,653
Hermosa Beach City Los Angeles -0.22 19,055 19,014 19,014 Hidden Hills City Los Angeles 0.23 1,742 1,746 1,746
Huntington Park City Los Angeles -0.32 53,213 53,041 53,051 Industry City Los Angeles -0.23 432 431 431
Inglewood City Los Angeles -0.29 106,617 106,305 106,305 Irwindale City Los Angeles -0.07 1,510 1,509 1,509
La Canada Flintridge City Los Angeles 0.05 20,149 20,160 20,160 La Habra Heights City Los Angeles -0.13 5,510 5,503 5,503 Lakewood City Los Angeles 0.10 80,517 80,596 80,596
La Mirada City Los Angeles -0.17 48,315 48,233 48,233
Lancaster City Los Angeles 1.62 170,661 173,424 177,768 La Puente City Los Angeles 0.10 37,508 37,546 37,546
La Verne City Los Angeles 0.59 32,111 32,300 32,300
Lawndale City Los Angeles -0.20 30,921 30,860 30,860
Lomita City Los Angeles 0.04 20,398 20,407 20,407
Long Beach City Los Angeles 0.44 460,230 462,246 462,561 Los Angeles City Los Angeles 0.44 3,813,575 3,830,479 3,835,263 Lynwood City Los Angeles 0.45 66,360 66,660 66,660
Malibu City Los Angeles -0.18 10,623 10,604 10,604
Manhattan Beach City Los Angeles -0.18 34,111 34,051 34,051 Maywood City Los Angeles -0.25 24,557 24,496 24,496
Monrovia City Los Angeles 1.94 38,181 38,920 38,920
Montebello City Los Angeles 0.79 62,243 62,732 62,732
Monterey Park City Los Angeles -0.13 59,342 59,262 59,269 Norwalk City Los Angeles -0.32 100,585 100,265 101,075
Palmdale City Los Angeles 0.31 166,580 167,097 167,097
Palos Verdes Estates City Los Angeles -0.12 13,014 12,999 12,999 Paramount City Los Angeles -0.08 52,415 52,371 52,371
Pasadena City Los Angeles 0.41 140,054 140,631 140,631
Pico Rivera City Los Angeles 0.00 60,859 60,858 60,858
Pomona City Los Angeles 0.68 152,005 153,042 153,042
Rancho Palos Verdes City Los Angeles -0.25 40,831 40,727 40,727 Redondo Beach City Los Angeles -0.33 68,319 68,091 68,091 Rolling Hills City Los Angeles 0.24 1,673 1,677 1,677
Rolling Hills Estates City Los Angeles -0.14 8,557 8,545 8,545 Rosemead City Los Angeles 0.41 50,296 50,501 50,501
San Dimas City Los Angeles -0.05 34,226 34,209 34,209
San Fernando City Los Angeles 0.62 23,546 23,692 23,692 San Gabriel City Los Angeles 1.00 38,569 38,953 38,953
San Marino City Los Angeles -0.09 12,341 12,330 12,330
Santa Clarita City Los Angeles 0.35 231,573 232,377 232,377 Santa Fe Springs City Los Angeles 0.90 18,341 18,506 18,680 Santa Monica City Los Angeles 0.19 93,034 93,212 93,212 Sierra Madre City Los Angeles -0.30 10,903 10,870 10,870 Signal Hill City Los Angeles -0.31 11,457 11,421 11,421 South El Monte City Los Angeles -0.02 19,538 19,535 19,535 South Gate City Los Angeles 0.08 92,883 92,955 92,955
South Pasadena City Los Angeles 0.06 26,272 26,287 26,287 Temple City Los Angeles 0.70 36,069 36,322 36,322
Torrance City Los Angeles -0.10 143,410 143,261 143,261 Vernon City Los Angeles -0.48 208 207 207
Walnut City Los Angeles 0.74 28,008 28,214 28,214
West Covina City Los Angeles -0.21 109,657 109,428 109,428 West Hollywood City Los Angeles 0.10 35,250 35,284 35,284 Westlake Village City Los Angeles -0.31 7,943 7,918 7,918 Whittier City Los Angeles 0.03 87,820 87,850 87,850
Balance of County Los Angeles 0.18 1,001,862 1,003,674 1,004,490 Incorporated Los Angeles 0.31 8,834,429 8,861,693 8,872,321 County Total Los Angeles 0.30 9,836,291 9,865,367 9,876,811 Chowchilla City Madera -1.64 13,729 13,504 18,742
Madera City Madera -0.85 67,013 66,443 66,443
Balance of County Madera 2.24 75,718 77,414 77,414
Incorporated Madera -0.98 80,742 79,947 85,185
County Total Madera 0.58 156,460 157,361 162,599
Belvedere City Marin 0.29 2,052 2,058 2,058
Corte Madera City Marin 0.09 9,947 9,956 9,966
Fairfax City Marin 0.09 7,400 7,407 7,407
Larkspur City Marin -0.15 12,750 12,731 12,731
Mill Valley City Marin 0.07 13,679 13,688 13,688
Novato City Marin 0.22 51,372 51,486 51,690
Ross City Marin 0.83 2,290 2,309 2,309
San Anselmo City Marin 0.26 12,519 12,551 12,551
San Rafael City Marin -0.05 59,917 59,885 59,885

Sausalito City Marin 0.07 6,936 6,941 6,941
Tiburon Town Marin 0.18 8,894 8,910 8,910
Balance of County Marin 0.29 63,257 63,441 66,414
Incorporated Marin 0.09 187,756 187,922 188,136
County Total Marin 0.14 251,013 251,363 254,550
Balance of County Mariposa -0.21 16,897 16,861 16,917
County Total Mariposa -0.21 16,897 16,861 16,917
Fort Bragg City Mendocino -0.10 7,194 7,187 7,187
Point Arena City Mendocino 1.57 445 452 452
Ukiah City Mendocino 0.60 16,227 16,325 16,325
Willits City Mendocino -0.31 4,853 4,838 4,838
Balance of County Mendocino -0.09 61,031 60,975 61,025
Incorporated Mendocino 0.29 28,719 28,802 28,802
County Total Mendocino 0.03 89,750 89,777 89,827
Atwater City Merced -0.18 31,921 31,862 31,862
Dos Palos City Merced -0.28 5,728 5,712 5,712
Gustine City Merced -0.23 6,035 6,021 6,021
Livingston City Merced -0.07 14,451 14,441 14,441
Los Banos City Merced 1.42 48,213 48,896 48,896
Merced City Merced 5.26 93,138 98,039 98,039
Balance of County Merced -4.65 91,101 86,861 88,109
Incorporated Merced 2.75 199,486 204,971 204,971
County Total Merced 0.43 290,587 291,832 293,080
Alturas City Modoc -0.19 2,662 2,657 2,657
Balance of County Modoc -0.22 5,847 5,834 5,834
Incorporated Modoc -0.19 2,662 2,657 2,657
County Total Modoc -0.21 8,509 8,491 8,491
Mammoth Lakes Town Mono -1.47 7,145 7,040 7,040
Balance of County Mono -1.75 5,647 5,548 5,644
Incorporated Mono -1.47 7,145 7,040 7,040
County Total Mono -1.59 12,792 12,588 12,684
Carmel-by-the-Sea City Monterey -0.23 3,056 3,049 3,049 Del Rey Oaks City Monterey -0.32 1,551 1,546 1,546
Gonzales City Monterey -0.30 8,459 8,434 8,434
Greenfield City Monterey 1.18 20,543 20,785 20,785
King City Monterey 1.09 14,189 14,344 14,344
Marina City Monterey 1.12 22,831 23,086 23,086
Monterey City Monterey -0.33 24,282 24,202 27,273
Pacific Grove City Monterey -0.43 14,935 14,871 14,871
Salinas City Monterey -0.24 161,039 160,645 160,645
Sand City Monterey -0.27 374 373 373
Seaside City Monterey 1.35 26,367 26,724 32,019
Soledad City Monterey 1.80 20,005 20,366 27,310
Balance of County Monterey -0.14 105,111 104,962 105,096 Incorporated Monterey 0.25 317,631 318,425 333,735
County Total Monterey 0.15 422,742 423,387 438,831
American Canyon City Napa 2.94 21,757 22,396 22,396
Calistoga City Napa -0.41 5,181 5,160 5,160
Napa City Napa 0.28 77,520 77,736 77,736
St Helena City Napa -0.13 5,356 5,349 5,349
Yountville City Napa -0.54 2,056 2,045 2,638
Balance of County Napa -0.30 21,840 21,775 22,845
Incorporated Napa 0.73 111,870 112,686 113,279
County Total Napa 0.56 133,710 134,461 136,124
Grass Valley City Nevada -0.72 13,461 13,364 13,364
Nevada City Nevada -0.86 3,365 3,336 3,336
Truckee Town Nevada 0.03 16,923 16,928 16,928
Balance of County Nevada -0.63 67,092 66,667 66,726
Incorporated Nevada -0.36 33,749 33,628 33,628
County Total Nevada -0.54 100,841 100,295 100,354
Aliso Viejo City Orange -0.45 50,442 50,213 50,213
Anaheim City Orange -0.08 341,967 341,686 341,773
Brea City Orange -0.42 48,101 47,900 47,900
Buena Park City Orange -0.13 82,772 82,667 82,667
Costa Mesa City Orange 0.25 110,048 110,321 110,321
Cypress City Orange -0.13 49,563 49,499 49,499
Dana Point City Orange -0.37 32,850 32,730 32,730
Fountain Valley City Orange -0.09 56,612 56,560 56,560
Fullerton City Orange -0.31 141,909 141,469 141,469
Garden Grove City Orange 0.12 171,260 171,470 171,492
Huntington Beach City Orange -0.19 193,510 193,134 193,134 Irvine City Orange 0.79 316,119 318,629 318,629
Laguna Beach City Orange 0.02 22,759 22,763 22,763
Laguna Hills City Orange -0.41 30,435 30,309 30,309
Laguna Niguel City Orange 0.65 64,834 65,257 65,257
Laguna Woods City Orange -0.46 17,262 17,183 17,183
La Habra City Orange -0.06 61,236 61,202 61,202
Lake Forest City Orange 0.10 87,553 87,639 87,639
La Palma City Orange -0.44 15,177 15,110 15,110
Los Alamitos City Orange -0.32 12,044 12,006 12,006
Mission Viejo City Orange -0.28 91,993 91,740 91,740
Newport Beach City Orange -0.41 82,995 82,654 82,654
Orange City Orange 0.95 138,403 139,724 139,724
Placentia City Orange 2.52 52,653 53,982 53,982
Rancho Santa Margarita City Orange -0.46 46,553 46,341 46,341 San Clemente City Orange -0.35 63,085 62,865 62,865
San Juan Capistrano City Orange 0.23 35,247 35,329 35,329 Santa Ana City Orange 0.68 313,210 315,325 315,325

Seal Beach City Orange -0.47 24,439 24,325 24,400
Stanton City Orange -0.06 40,576 40,552 40,552
Tustin City Orange -0.15 79,449 79,326 79,326
Villa Park City Orange -0.21 5,750 5,738 5,738
Westminster City Orange 0.13 90,181 90,295 90,295
Yorba Linda City Orange -0.46 66,573 66,267 66,267
Balance of County Orange 0.54 132,313 133,023 133,033
Incorporated Orange 0.15 3,037,560 3,042,210 3,042,394
County Total Orange 0.17 3,169,873 3,175,233 3,175,427
Auburn City Placer -1.27 13,457 13,286 13,286
Colfax City Placer -1.48 2,026 1,996 1,996
Lincoln City Placer 0.65 54,167 54,520 54,520
Loomis Town Placer -0.59 6,729 6,689 6,689
Rocklin City Placer 0.28 72,967 73,172 73,172
Roseville City Placer 0.76 157,304 158,494 158,494
Balance of County Placer -0.44 113,786 113,289 113,289
Incorporated Placer 0.49 306,650 308,157 308,157
County Total Placer 0.24 420,436 421,446 421,446
Portola City Plumas -0.94 2,118 2,098 2,098
Balance of County Plumas 0.62 16,684 16,787 16,787
Incorporated Plumas -0.94 2,118 2,098 2,098
County Total Plumas 0.44 18,802 18,885 18,885
Banning City Riverside -0.37 32,068 31,949 31,949
Beaumont City Riverside 1.78 58,665 59,708 59,708
Blythe City Riverside -0.95 12,593 12,473 15,400
Calimesa City Riverside -0.79 11,082 10,994 10,994
Canyon Lake City Riverside -0.74 11,086 11,004 11,004
Cathedral City Riverside -0.67 51,962 51,615 51,651
Coachella City Riverside 0.76 44,050 44,384 44,384
Corona City Riverside -0.32 159,667 159,157 159,157
Desert Hot Springs City Riverside 0.02 33,255 33,262 33,262 Eastvale City Riverside -0.68 70,274 69,799 69,799
Hemet City Riverside 0.20 91,751 91,934 91,934
Indian Wells City Riverside 0.06 4,859 4,862 4,862
Indio City Riverside -0.17 92,693 92,539 92,539
Jurupa Valley City Riverside -0.90 106,830 105,870 105,928 Lake Elsinore City Riverside 0.97 72,934 73,638 73,783
La Quinta City Riverside -0.90 39,148 38,796 38,796
Menifee City Riverside 1.30 113,837 115,316 115,316
Moreno Valley City Riverside -0.27 211,389 210,823 210,823 Murrieta City Riverside 0.44 111,299 111,789 111,789
Norco City Riverside -0.63 22,563 22,421 25,221
Palm Desert City Riverside 0.04 51,961 51,980 51,980
Palm Springs City Riverside -0.63 44,760 44,476 44,476
Perris City Riverside 0.36 80,947 81,240 81,240
Rancho Mirage City Riverside -0.62 17,227 17,120 17,120 Riverside City Riverside -0.37 321,479 320,278 320,337
San Jacinto City Riverside 0.10 54,936 54,990 54,990
Temecula City Riverside 1.19 110,898 112,220 112,220
Wildomar City Riverside 0.05 37,060 37,077 37,077
Balance of County Riverside 1.53 411,338 417,646 417,901 Incorporated Riverside 0.02 2,071,273 2,071,714 2,077,739 County Total Riverside 0.27 2,482,611 2,489,360 2,495,640 Citrus Heights City Sacramento -0.43 86,655 86,280 86,280 Elk Grove City Sacramento 1.24 180,599 182,842 182,842
Folsom City Sacramento 3.69 84,416 87,532 92,577
Galt City Sacramento 1.38 25,738 26,092 26,092
Isleton City Sacramento -0.65 769 764 764
Rancho Cordova City Sacramento 3.16 82,837 85,451 85,451 Sacramento City Sacramento 0.31 526,327 527,979 527,979 Balance of County Sacramento -0.26 604,360 602,760 602,760 Incorporated Sacramento 0.97 987,341 996,940 1,001,985
County Total Sacramento 0.50 1,591,701 1,599,700 1,604,745 Hollister City San Benito 0.51 43,272 43,492 43,492
San Juan Bautista City San Benito -0.81 2,095 2,078 2,078 Balance of County San Benito 0.50 21,147 21,252 21,252
Incorporated San Benito 0.45 45,367 45,570 45,570
County Total San Benito 0.46 66,514 66,822 66,822
Adelanto City San Bernardino 1.42 36,629 37,150 37,150
Apple Valley Town San Bernardino -0.11 75,339 75,255 75,262 Barstow City San Bernardino -0.55 24,634 24,498 24,811
Big Bear Lake City San Bernardino -0.48 4,977 4,953 4,953 Chino City San Bernardino 1.76 90,123 91,712 95,206
Chino Hills City San Bernardino -0.18 77,452 77,314 77,314 Colton City San Bernardino -0.42 53,505 53,278 53,278
Fontana City San Bernardino 0.96 217,084 219,172 219,172 Grand Terrace City San Bernardino -0.51 12,868 12,803 12,803 Hesperia City San Bernardino 0.54 101,248 101,792 101,792 Highland City San Bernardino 1.16 56,436 57,088 57,088
Loma Linda City San Bernardino -0.19 25,323 25,276 25,322 Montclair City San Bernardino -0.38 37,670 37,526 37,526 Needles City San Bernardino -0.54 4,817 4,791 4,791
Ontario City San Bernardino 0.84 182,875 184,404 184,404 Rancho Cucamonga City San Bernardino 0.44 175,227 175,992 175,992 Redlands City San Bernardino 0.10 73,416 73,488 73,488
Rialto City San Bernardino 1.09 104,426 105,565 105,565 San Bernardino City San Bernardino 0.08 221,218 221,387 222,727 Twentynine Palms City San Bernardino 7.84 14,775 15,934 24,257

Upland City San Bernardino -0.23 79,326 79,140 79,140
Victorville City San Bernardino 0.49 135,981 136,652 141,013 Yucaipa City San Bernardino 0.51 54,561 54,838 54,838
Yucca Valley Town San Bernardino 0.03 22,021 22,027 22,027 Balance of County San Bernardino -0.22 290,454 289,811 297,505 Incorporated San Bernardino 0.54 1,881,931 1,892,035 1,909,919 County Total San Bernardino 0.44 2,172,385 2,181,846 2,207,424 Carlsbad City San Diego -0.24 116,652 116,368 116,368
Chula Vista City San Diego 0.19 280,590 281,137 281,401 Coronado City San Diego -0.41 17,471 17,400 22,610
Del Mar City San Diego 0.05 3,948 3,950 3,950
El Cajon City San Diego -0.47 105,429 104,932 104,932
Encinitas City San Diego 0.17 61,851 61,956 61,956
Escondido City San Diego -0.63 151,386 150,425 150,425
Imperial Beach City San Diego -0.35 26,462 26,369 26,369 La Mesa City San Diego -0.27 61,072 60,908 60,908
Lemon Grove City San Diego 0.93 27,903 28,163 28,163
National City San Diego 0.07 56,900 56,941 58,965
Oceanside City San Diego 0.44 173,569 174,340 174,340
Poway City San Diego 0.86 49,948 50,379 50,379
San Diego City San Diego 1.15 1,378,448 1,394,234 1,408,937 San Marcos City San Diego -0.14 97,261 97,123 97,123
Santee City San Diego -0.60 59,928 59,568 59,568
Solana Beach City San Diego -0.52 13,054 12,986 12,986
Vista City San Diego -0.14 101,740 101,599 101,599
Balance of County San Diego -0.19 470,041 469,135 509,160 Incorporated San Diego 0.54 2,783,612 2,798,778 2,820,979 County Total San Diego 0.44 3,253,653 3,267,913 3,330,139 San Francisco City San Francisco -0.39 844,789 841,467 842,027 Incorporated San Francisco -0.39 844,789 841,467 842,027 County Total San Francisco -0.39 844,789 841,467 842,027 Escalon City San Joaquin -1.43 7,337 7,232 7,232
Lathrop City San Joaquin 4.03 37,102 38,596 38,596
Lodi City San Joaquin -0.25 67,262 67,093 67,093
Manteca City San Joaquin 1.76 92,116 93,733 93,733
Mountain House City San Joaquin 0.00 28,795 28,795
Ripon City San Joaquin -1.33 15,966 15,753 15,753
Stockton City San Joaquin -0.77 323,325 320,847 320,877 Tracy City San Joaquin 0.73 97,501 98,215 98,215
Balance of County San Joaquin -16.29 159,392 133,422 135,562 Incorporated San Joaquin 4.63 640,609 670,264 670,294
County Total San Joaquin 0.46 800,001 803,686 805,856
Arroyo Grande City San Luis Obispo -0.64 18,025 17,910 17,910 Atascadero City San Luis Obispo -0.72 29,305 29,093 30,134 El Paso de Robles City San Luis Obispo 0.24 30,988 31,061 31,061 Grover Beach City San Luis Obispo -0.35 12,455 12,411 12,411 Morro Bay City San Luis Obispo 0.00 10,404 10,404 10,404 Pismo Beach City San Luis Obispo -0.69 7,858 7,804 7,804 San Luis Obispo City San Luis Obispo 1.52 48,791 49,534 49,534 Balance of County San Luis Obispo -0.61 118,580 117,852 120,079 Incorporated San Luis Obispo 0.25 157,826 158,217 159,258 County Total San Luis Obispo -0.12 276,406 276,069 279,337 Atherton Town San Mateo -0.33 7,030 7,007 7,007
Belmont City San Mateo 3.90 27,146 28,206 28,206
Brisbane City San Mateo -0.51 4,700 4,676 4,676
Burlingame City San Mateo 2.55 30,768 31,552 31,552
Colma Town San Mateo -0.70 1,421 1,411 1,411
Daly City San Mateo -0.16 102,315 102,155 102,155
East Palo Alto City San Mateo -0.65 29,325 29,133 29,133 Foster City San Mateo -0.60 32,856 32,658 32,658
Half Moon Bay City San Mateo -0.26 11,333 11,303 11,303 Hillsborough Town San Mateo 0.38 11,211 11,254 11,254
Menlo Park City San Mateo -0.35 33,291 33,175 33,311
Millbrae City San Mateo -0.53 23,288 23,164 23,164
Pacifica City San Mateo -0.41 37,365 37,212 37,217
Portola Valley Town San Mateo -0.02 4,286 4,285 4,285
Redwood City San Mateo -0.57 82,546 82,073 82,073
San Bruno City San Mateo 0.29 42,507 42,631 42,631
San Carlos City San Mateo -0.45 29,669 29,535 29,535
San Mateo City San Mateo 0.09 104,221 104,315 104,315
South San Francisco City San Mateo 0.39 65,146 65,397 65,397 Woodside Town San Mateo 0.58 5,176 5,206 5,206
Balance of County San Mateo -0.32 62,047 61,848 61,848
Incorporated San Mateo 0.11 685,600 686,348 686,489
County Total San Mateo 0.07 747,647 748,196 748,337
Buellton City Santa Barbara 2.23 4,980 5,091 5,091
Carpinteria City Santa Barbara 0.09 12,723 12,735 12,735 Goleta City Santa Barbara 0.45 32,601 32,747 32,747
Guadalupe City Santa Barbara 1.81 8,694 8,851 8,851
Lompoc City Santa Barbara 0.05 40,518 40,538 43,424
Santa Barbara City Santa Barbara 0.31 86,159 86,422 86,451 Santa Maria City Santa Barbara 1.19 110,885 112,208 112,208 Solvang City Santa Barbara 0.47 5,728 5,755 5,755
Balance of County Santa Barbara 0.52 136,287 136,992 139,870 Incorporated Santa Barbara 0.68 302,288 304,347 307,262 County Total Santa Barbara 0.63 438,575 441,339 447,132 Campbell City Santa Clara -0.22 43,377 43,281 43,281
Cupertino City Santa Clara -0.09 59,887 59,831 59,831

Gilroy City Santa Clara 1.10 61,402 62,076 62,205
Los Altos City Santa Clara 0.62 31,523 31,720 31,720
Los Altos Hills Town Santa Clara 0.33 8,520 8,548 8,548 Los Gatos Town Santa Clara -0.43 33,500 33,355 33,355
Milpitas City Santa Clara -0.59 82,401 81,915 81,915
Monte Sereno City Santa Clara 0.66 3,613 3,637 3,637
Morgan Hill City Santa Clara 0.06 46,573 46,599 46,599
Mountain View City Santa Clara -0.19 86,674 86,513 86,513 Palo Alto City Santa Clara 0.31 68,550 68,763 68,794
San Jose City Santa Clara -0.08 980,174 979,415 979,415 Santa Clara City Santa Clara 0.57 133,829 134,587 134,587 Saratoga City Santa Clara 0.29 31,020 31,110 31,110
Sunnyvale City Santa Clara 0.46 158,948 159,673 159,673 Balance of County Santa Clara -0.21 90,602 90,412 91,076 Incorporated Santa Clara 0.06 1,829,991 1,831,023 1,831,183 County Total Santa Clara 0.04 1,920,593 1,921,435 1,922,259 Capitola City Santa Cruz -0.35 9,704 9,670 9,670
Santa Cruz City Santa Cruz 0.18 62,861 62,972 62,972
Scotts Valley City Santa Cruz -0.04 11,836 11,831 11,831 Watsonville City Santa Cruz 0.47 50,860 51,101 51,101
Balance of County Santa Cruz -0.04 128,130 128,079 128,136 Incorporated Santa Cruz 0.23 135,261 135,574 135,574
County Total Santa Cruz 0.10 263,391 263,653 263,710
Anderson City Shasta -0.73 11,048 10,967 10,967
Redding City Shasta 0.09 93,330 93,413 93,534
Shasta Lake City Shasta -0.74 10,209 10,133 10,133
Balance of County Shasta -0.49 65,836 65,514 65,567
Incorporated Shasta -0.06 114,587 114,513 114,634
County Total Shasta -0.22 180,423 180,027 180,201
Loyalton City Sierra -0.27 732 730 730
Balance of County Sierra -0.20 2,445 2,440 2,440
Incorporated Sierra -0.27 732 730 730
County Total Sierra -0.22 3,177 3,170 3,170
Dorris City Siskiyou -0.84 837 830 830
Dunsmuir City Siskiyou -0.91 1,643 1,628 1,628
Etna City Siskiyou -0.75 667 662 662
Fort Jones City Siskiyou -0.75 668 663 663
Montague City Siskiyou -0.42 1,200 1,195 1,195
Mount Shasta City Siskiyou -0.72 3,202 3,179 3,179
Tulelake City Siskiyou -0.82 858 851 851
Weed City Siskiyou 0.30 2,708 2,716 2,716
Yreka City Siskiyou 0.64 7,829 7,879 7,879
Balance of County Siskiyou -0.49 23,772 23,656 23,708
Incorporated Siskiyou -0.05 19,612 19,603 19,603
County Total Siskiyou -0.29 43,384 43,259 43,311
Benicia City Solano -0.58 26,347 26,195 26,195
Dixon City Solano 2.89 19,608 20,174 20,174
Fairfield City Solano -0.07 116,199 116,112 120,720
Rio Vista City Solano 1.78 10,157 10,338 10,338
Suisun City Solano -0.13 29,074 29,036 29,036
Vacaville City Solano 0.04 97,347 97,382 103,181
Vallejo City Solano -0.48 122,791 122,207 122,207
Balance of County Solano -0.27 17,285 17,238 17,988
Incorporated Solano -0.02 421,523 421,444 431,851
County Total Solano -0.03 438,808 438,682 449,839
Cloverdale City Sonoma -0.97 8,763 8,678 8,678
Cotati City Sonoma -0.86 7,353 7,290 7,290
Healdsburg City Sonoma -0.35 11,010 10,972 10,972
Petaluma City Sonoma 0.40 58,858 59,094 59,094
Rohnert Park City Sonoma -0.06 44,089 44,062 44,062
Santa Rosa City Sonoma 0.80 177,043 178,452 178,452
Sebastopol City Sonoma 0.40 7,338 7,367 7,367
Sonoma City Sonoma -0.83 10,595 10,507 10,507
Windsor Town Sonoma -0.17 25,669 25,625 25,625
Balance of County Sonoma -0.46 130,591 129,985 130,801
Incorporated Sonoma 0.38 350,718 352,047 352,047
County Total Sonoma 0.15 481,309 482,032 482,848
Ceres City Stanislaus -0.35 49,480 49,305 49,305
Hughson City Stanislaus 2.26 7,801 7,977 7,977
Modesto City Stanislaus 0.03 219,705 219,765 219,765
Newman City Stanislaus 1.05 12,260 12,389 12,389
Oakdale City Stanislaus 0.28 23,167 23,231 23,231
Patterson City Stanislaus 3.57 24,977 25,868 25,868
Riverbank City Stanislaus 3.16 25,290 26,090 26,090
Turlock City Stanislaus 0.31 71,997 72,219 72,219
Waterford City Stanislaus 0.09 9,161 9,169 9,169
Balance of County Stanislaus -0.02 109,776 109,752 109,752 Incorporated Stanislaus 0.49 443,838 446,013 446,013
County Total Stanislaus 0.39 553,614 555,765 555,765
Live Oak City Sutter 0.58 9,602 9,658 9,658
Yuba City Sutter 0.96 69,781 70,453 70,453
Balance of County Sutter 0.49 20,048 20,146 20,146
Incorporated Sutter 0.92 79,383 80,111 80,111
County Total Sutter 0.83 99,431 100,257 100,257
Corning City Tehama 1.30 8,162 8,268 8,268
Red Bluff City Tehama 0.11 14,450 14,466 14,466
Tehama City Tehama 0.23 427 428 428
Balance of County Tehama -0.41 41,702 41,532 41,665

Incorporated Tehama 0.53 23,039 23,162 23,162
County Total Tehama -0.07 64,741 64,694 64,827
Balance of County Trinity -0.16 15,850 15,825 15,884
County Total Trinity -0.16 15,850 15,825 15,884
Dinuba City Tulare 0.67 25,852 26,025 26,025
Exeter City Tulare -0.19 10,252 10,233 10,233
Farmersville City Tulare -0.29 10,422 10,392 10,392
Lindsay City Tulare -0.07 12,734 12,725 12,725
Porterville City Tulare 0.04 63,427 63,455 63,622
Tulare City Tulare 2.02 71,557 73,002 73,002
Visalia City Tulare 0.69 145,714 146,722 146,978
Woodlake City Tulare 2.72 7,793 8,005 8,005
Balance of County Tulare 0.54 135,452 136,180 136,227
Incorporated Tulare 0.81 347,751 350,559 350,982
County Total Tulare 0.73 483,203 486,739 487,209
Sonora City Tuolumne -0.74 5,154 5,116 5,116
Balance of County Tuolumne -0.27 46,963 46,836 49,241
Incorporated Tuolumne -0.74 5,154 5,116 5,116
County Total Tuolumne -0.32 52,117 51,952 54,357
Camarillo City Ventura -0.78 69,467 68,927 68,927
Fillmore City Ventura -0.35 17,095 17,035 17,035
Moorpark City Ventura -0.77 35,023 34,754 34,754
Ojai City Ventura 0.04 7,556 7,559 7,559
Oxnard City Ventura 0.18 198,384 198,733 198,733
Port Hueneme City Ventura -0.81 19,024 18,870 20,838
San Buenaventura (Ventura) City Ventura 0.58 108,304 108,930 108,985 Santa Paula City Ventura 0.47 31,511 31,658 31,658
Simi Valley City Ventura 0.00 124,640 124,645 124,815
Thousand Oaks City Ventura -0.73 123,372 122,468 122,468 Balance of County Ventura 1.49 90,070 91,416 93,233
Incorporated Ventura -0.11 734,376 733,579 735,772
County Total Ventura 0.07 824,446 824,995 829,005
Davis City Yolo -0.43 65,708 65,423 65,423
West Sacramento City Yolo 0.85 54,938 55,403 55,403
Winters City Yolo 4.14 7,702 8,021 8,021
Woodland City Yolo 0.35 61,406 61,623 61,623
Balance of County Yolo 1.83 34,334 34,963 34,963
Incorporated Yolo 0.38 189,754 190,470 190,470
County Total Yolo 0.60 224,088 225,433 225,433
Marysville City Yuba -0.84 12,825 12,717 12,717
Wheatland City Yuba 2.29 3,922 4,012 4,012
Balance of County Yuba 0.57 65,454 65,828 68,294
Incorporated Yuba -0.11 16,747 16,729 16,729
County Total Yuba 0.43 82,201 82,557 85,023
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

GLKey Fund Description
Non
Residential
Growth from
Construction
Current Roll
Assessed Vallue
Previous Roll
Assessed Value
Change in
Assessed Value
Non
Residential
Growth %
131220 S C COUNTY GENERAL 814,612 61,100,607,671 58,522,924,161 2,577,683,510 0.0316% 131410 LAKESIDE SCH DIST TR-GEN 8,930 472,354,162 457,846,926 14,507,236 0.0616% 131412 LOMA PRIETA SCH DIST TR GENL 122,338 1,319,673,587 1,280,491,289 39,182,298 0.3122% 131414 LOS GATOS HIGH DIST TR GENL 121,330 1,792,027,749 1,738,338,215 53,689,534 0.2260% 131424 SANTA CLARA SPEC SCHOOL TRAINI 2,025 1,792,027,749 1,738,338,215 53,689,534 0.0038% 131426 SANTA CLARA INST TUITION TAX 1,100 1,792,027,749 1,738,338,215 53,689,534 0.0020% 131428 SANTA CLARA DEV CTR-HNDCPD MIN 3,492 1,792,027,749 1,738,338,215 53,689,534 0.0065% 131430 SANTA CLARA PHYSICALLY HANDCPP 8,085 1,792,027,749 1,738,338,215 53,689,534 0.0151% 131432 CO SCH SV SANTA CLARA 3,345 1,792,027,749 1,738,338,215 53,689,534 0.0062% 131434 LOMA PRIETA SCH AREAWIDE 52,577 1,319,673,587 1,280,491,289 39,182,298 0.1342% 131436 SANTA CLARA - ALL CAPITAL OUTL 2,759 1,792,027,749 1,738,338,215 53,689,534 0.0051% 131440 JUVENILE HALL SCH SANTA CLARA 1,658 1,792,027,749 1,738,338,215 53,689,534 0.0031% 131442 LAKESIDE AREAWIDE 4,944 472,354,162 457,846,926 14,507,236 0.0341% 131444 WEST VALLEY COM COLL TR GENL 57,039 1,737,530,305 1,685,832,112 51,698,193 0.1103% 131610 CAPITOLA CITY TR - 3,305,186,041 3,157,742,571 147,443,470 0.0000% 131622 SANTA CRUZ CITY TR 93,002 13,468,834,412 12,804,305,160 664,529,252 0.0140% 131627 SANTA CRUZ PARKING #1 - 586,717,949 540,985,432 45,732,517 0.0000% 131630 SCOTTS VALLEY CITY TR - 3,813,118,241 3,702,822,488 110,295,753 0.0000% 131648 WATSONVILLE CITY - TRUST - 5,578,835,033 5,300,042,412 278,792,621 0.0000% 131855 COUNTY LIBRARY 83,508 45,102,248,134 43,353,325,120 1,748,923,014 0.0048% 134910 REC & PARKS - CO SERV AREA #11 7,230 32,454,037,649 30,813,778,701 1,640,258,948 0.0004% 135461 SC FLOOD CONT & WTR CONS ZONE 4 7,584 61,098,283,261 58,427,821,081 2,670,462,180 0.0003% 135462 SC FLOOD CONT & WAT CONS DISTGEN 6,464 61,100,607,671 58,522,924,161 2,577,683,510 0.0003% 304100 COUNTY FIRE 37,242 5,075,041,810 4,927,064,125 147,977,685 0.0252% 622115 CO HWY SAFETY SERVICE AREA #9 6,640 34,657,161,049 33,630,730,460 1,026,430,589 0.0006% 622120 CO HWY SAFETY SERV AREA #9-A 346 23,348,199,671 14,403,400,707 8,944,798,964 0.0000% 622245 PAJARO STORM DRAIN MAINT DIST 1,510 9,194,350,212 8,782,549,016 411,801,196 0.0004% 622350 SC FLOOD CONT & WTR CONS ZONE 5 274 12,019,742,954 11,480,684,467 539,058,487 0.0001% 640401 MOUNTAIN SCH DIST GENL 208,204 362,923,615 350,999,855 11,923,760 1.7461% 640801 SOQUEL SCH DIST GENL 16,079 7,702,072,606 7,353,111,186 348,961,420 0.0046% 641210 COUNTY SCHOOL SERVICE 75,592 59,308,579,922 56,784,585,945 2,523,993,977 0.0030% 641401 S C HI SCH DIST GENL 192,462 28,766,477,700 27,476,578,671 1,289,899,029 0.0149% 641501 S C SCH DIST GENL 113,774 14,067,195,516 13,371,607,345 695,588,171 0.0164% 642001 PAJ VAL UNIF SCH DIST GENL 621,789 19,723,311,076 18,857,091,573 866,219,503 0.0718% 642501 642501 CABRILLO COMM COL DIST GENERAL 175,250 59,363,077,366 56,837,092,048 2,525,985,318 0.0069% 681410 CENTRAL WATER DIST GEN 24,279 748,771,891 716,711,146 32,060,745 0.0757% 682500 CENTRAL FPD OF SANTA CRUZ COUNTY 191,284 22,906,053,944 21,906,566,940 999,487,004 0.0191% 683100 PAJARO VALLEY FIRE PROTECTION DIST G 3,962 2,096,381,684 2,020,509,220 75,872,464 0.0052% 683310 PAJARO VALLEY PUB CEM DIST 13,299 10,492,850,315 10,038,037,387 454,812,928 0.0029% 684000 S C PORT DIST TR GENL 4,816 22,848,634,833 22,153,026,427 695,608,406 0.0007% 684810 S C CO RESOURCE CONS DIST 590 38,244,754,469 36,720,526,865 1,524,227,604 0.0000% 689510 ZAYANTE FIRE PROT DIST 781 719,818,229 698,576,366 21,241,863 0.0037% Total 3,090,195
Previous Roll Year - 2023/24
AB8 Roll Year - 2024/25

SANTA CRUZ COUNTY NONRESIDENTIAL CONSTRUCTION TRANSACTIONS DISTRIBUTED AMOUNTS BY GLKey
Includes all new construction to be completed in 2024

AGENDA ITEM 4.

DATE: 6/4/2025
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 6/4/2025
TO: Honorable Mayor and City Council
FROM: Stephanie Hill, Administrative Services Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: Annual review of the Investment Policy

SUMMARY OF ISSUE
The State of California Government Code Section 53646 states that a City Treasurer may submit the City Investment Policy to the City Council for review and approval. While not required, it is best practice to have the local governing body review and approve its investment policy.

The City’s current Investment Policy is attached at the end of this Staff Report for your information. The City’s Investment Policy affirms the City’s fiduciary responsibility to safeguard public assets. A high priority is placed on ensuring the safety of the principal and that the City’s liquidity needs for payroll and other City obligations are met prior to considering yield on the investment.

The investments authorized in the Investment Policy are typical governmental investments and are broadly recognized as reasonably safe investments. More risky investments, such as derivative investments or reverse repurchase agreements, have been categorically excluded from the City’s Investment Policy. Currently, the City invests most of its cash, other than bond proceeds, in the State of California Local Agency Investment Fund (LAIF) or California Asset Management Program (CAMP), which have proved to be safe investments with a good yield and highly liquid.

A glossary of investment security terms and a summary of permitted investments and limitations are included at the back of the Investment Policy, as a guide to the reader.

FISCAL IMPACT
Reviewing and approving the continuance of the Investment Policy will have no fiscal impact.

STAFF RECOMMENDATION
It is recommended that the City Council review and approve the continuance of the Investment Policy.

TABLE OF CONTENTS

1. Investment Policy

TITLE: INVESTMENT POLICY POLICY NUMBER: 05-17
EFFECTIVE DATE: 6/5/2019 PAGES: 12
REVISED DATES: 6/3/2020, 6/16/2021, 6/15/2022, 4/19/23, 6/12/2024
APPROVED BY: Randy Johnson, Mayor
A. PURPOSE
This investment policy is designed to develop a clear understanding for the City Council, City staff, citizens, and third parties of the objectives, policies, and guidelines for the investment of City funds which are not required for immediate needs. The investment policy also offers guidance to investment staff and to any external investment advisors on the investment of City funds.

This statement is intended to provide direction for the investment of the City’s temporary idle cash under the prudent investor rule. Civil Code Section 2261, et seq. states in part “...When investing...for the benefit of another, a trustee shall act with the care, skill, prudence, and diligence...that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise...”
B. OBJECTIVES
The City’s ultimate investment goal is to enhance the economic condition of the City while ensuring the safety of funds invested and assuring that money is always available when needed.

The City strives to maintain the level of investment of all idle funds as near 100% as possible, through the optimum operation of its cash management system which is designed to accurately monitor and forecast expenditures and revenue. The City attempts to obtain the highest yield on its investments with preservation of principal and liquidity.

The primary objective of the investment policy of the City of Scotts Valley is SAFETY.

Investments shall be placed only in securities described in this policy, authorized by federal, state, and local laws and regulations, and managed in a manner that seeks to ensure the preservation of principal. The portfolio shall also be appropriately diversified to avoid incurring unreasonable risks regarding specific types of individual financial institutions. Maximizing interest earned is a secondary objective once safety, liquidity, and legality have been assured.

CITY OF SCOTTS VALLEY COUNCIL POLICY MANUAL

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C. DELEGATION OF AUTHORITY
The City delegates the authority to invest to the City Manager and City Treasurer and appropriate assistant, subject to the limitations set forth in the Investment Policy and Investment Guidelines.

The City holds its public investor harmless for responsible investment transactions undertaken in accordance with the Investment Policy, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

The City may delegate the investment of City funds to a professional investment advisor registered under the provisions of the Investment Advisors Act of 1940, subject to approval by the City Council. All investments shall be consistent with this Investment Policy and procedures established by the City Treasurer.

D. ETHICS AND CONFLICT OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business activity that conflicts with proper execution of the investment program or impairs their ability to make impartial decisions. Additionally, the City Manager and City Treasurer are required to annually file applicable financial disclosures as required by the Fair Political Practices Commission (FPPC).

E. INVESTMENT GUIDELINES AND INVESTMENT STRATEGY
The City uses a set of written Investment Guidelines which define the procedures for investing within the directives of the Investment Policy. In accordance with the Investment Guidelines, an investment strategy is used to maximize yield depending on market conditions.

To maximize returns, the economy and various markets are monitored carefully in order to assess the probable course of interest rates. The City lengthens its maturities when rates are falling and shortens maturities when rates are rising. The City attempts to take advantage of imperfections in the market where a security’s price is out of line with other investments, and tries to improve yields during cyclical changes in interest rates.

F. SCOPE
This policy applies to all cash assets of the City of Scotts Valley, the Scotts Valley Redevelopment Agency, and the Scotts Valley Public Financing Authority. Included are all pooled funds accounted for in the City’s Comprehensive Annual Financial Report, as follows:
 General Funds
 Special Funds
 Debt Service Funds
 Capital Project Funds
 Internal Service Funds
 Enterprise Funds
 Trust and Agency Funds
Excluded funds are those held by a fiscal agent, over which the City does not exercise control over investment of the funds.

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G. PERMITTED INVESTMENTS AND LIMITATIONS ON INVESTMENT
The investment of surplus funds is governed by California Government Code Section 53601 et seq. and by California Government Code section 53630 et seq.

Funds not deposited in banks may be invested in the securities described in sections a-j below.

The maximum maturity of any securities purchased shall not exceed five (5) years from date of purchase, unless specified below as shorter than five years, or unless a longer maturity is allowed by bond documents for the investment of bond proceeds, as described in section 1 below. All investments shall be subject to limitations as described herein.

1. Obligations of the U.S. Treasury, or securities guaranteed by the full faith and credit of the United States (“Treasury Obligations”), excluding securities which have been stripped of their coupons.
a. There is no limitation to the percent of the portfolio which may be held in these Treasury obligations.

2. Obligations which are guaranteed by the full faith and credit of agencies or instrumentalities of the U.S. government (“Agency obligations”), including but not limited to FNMA, FFCB, FHLB, and SLMA.
a. There is no limitation to the percent of the portfolio which may be held in these Agency obligations.

3. Negotiable certificates of deposit at banks, the short-term obligations of which are rated A1 or higher by Standard and Poor’s or rated P1 or higher by Moody’s Investors Service, and the long term obligations (if any) of which are rated A or higher by Standard and Poor’s or by Moody’s Investors Service, or the equivalent by another recognized rating agency. a. The maximum maturity of certificates of deposit may not exceed five years.
b. No more than 30% of the portfolio, excluding bond proceeds, may be invested in certificates of deposit.
c. The institution must be located in California.
d. The institution must have current financial information, a signed contract, and a waiver on file with the City.
e. The institution must maintain a net worth to asset ratio of at least 30% and have a positive earnings record.
f. The institution must be at least 3 years old.
g. For collateralized investments, the institution must have at least $500 million in assets.

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4. Banker’s acceptances issued by banks, the short term obligations of which are rated A1 or higher by Standard and Poor’s or rated P1 or higher by Moody’s Investors Services, or the equivalent by another nationally rating agency.
a. The maximum maturity of banker’s acceptances may not exceed 180 days.
b. No more than 40% of the portfolio, excluding bond proceeds, may be invested in banker’s acceptances.

5. Commercial paper issued by corporations, the short term obligations of which are rated A1 or higher by Standard and Poor’s, or P1 by Moody’s Investor Services, or the equivalent by another nationally recognized rating agency. a. The maximum maturity of commercial paper may not exceed 270 days. b. Eligible paper is limited to notes issued by corporations organized and operating within the United States and having total assets in excess of $500 million, and having a long term debt rating of “A” or higher. c. No more than 15% of the portfolio, excluding bond proceeds, may be invested in commercial paper.
d. An additional 15% of the portfolio (for a total of 30%), excluding bond proceeds, may be invested in commercial paper if the dollar-weighted average maturity of the entire amount does not exceed 31 days.

6. Repurchase agreements collateralized by any securities permitted under paragraphs 1. and 2. of this section of this policy (Treasury obligations or Agency obligations). a. The term of a repurchase agreement may not exceed 30 days. b. The market value of securities shall not be less than 102% of the repurchase amount.
c. No more than 15% of the portfolio, excluding bond proceeds, may be invested in repurchase agreements.
d. The repurchase agreements shall be subject to a master repurchase agreement between the City and the provider of the repurchase agreement. The repurchase agreement shall be substantially in the form developed by the Public Securities Association.
e. Collateral underlying repurchase agreements shall be delivered to the City’s custodial bank. Clearly marked evidence of ownership (safekeeping receipts) must be supplied to the bank.

7. Corporate medium notes, rated A or higher by Moody’s Investor Services and by Standard and Poor’s.
a. No more than 30% of the portfolio, excluding bond proceeds, may be invested in corporate medium term notes.

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8. Mortgage pass through securities issued by an agency of the U.S. government. a. No more than 15% of the portfolio, excluding bond proceeds, may be invested in mortgage pass through securities.

9. Money market mutual funds with a minimum of $250 million is assets which invest in securities described in a. through h. above, provided:
a. The fund has attained the highest rating provided by two of the three largest nationally recognized rating agencies, or
b. The fund has an investment advisor registered with the Securities and Exchange Commission with not less than five year’s experience investing in the securities and obligations in a. through h. above. c. No more than 15% of the portfolio, excluding bond proceeds, may be invested in money market mutual funds.

10. The State of California “Local Agency Investment Fund” (“LAIF”):. a. No more than the maximum deposit allowed per agency set by the State Treasurer may be invested in LAIF.
b. Annual review of LAIF’s Pool Money Investment Board Annual Report will be conducted to continue to ensure LAIF’s investment policy, standards, and rate of return are compatible with the City’s risk tolerance.

11. Joint Powers Authority Pool (JPAP): Funds may be invested in a JPAP organized pursuant to Government Code Section 6509.7 that invests in the securities and obligations authorized in Section 53601, subdivisions (a) to (q) where each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority.
a. Prior to investing, and on an annual basis thereafter, the City will request from each Joint Powers Authority Pool, documents which provide details on the operations of the fund. These documents, along with the other criteria below, including the rating restriction, will be used to determine the suitability to invest in the JPAP. b. Investment in JPAPs will be limited to the California Asset Management Program (CAMP) and the Investment Trust of
California (CalTRUST).
c. Ratings of a JPAP must be in a rating category of AAf/S-1+ for CalTrust or AAAm for CAMP, or its equivalent by Moody’s, S&P or Fitch.
d. There is no limit on the percent of the portfolio, excluding bond proceeds, that may be invested in JPAP’s.

12. The City of Scotts Valley also utilizes deposits from commercial banks for regular depository services including operating and payroll accounts. Utilization of “sweep” account services provides short term interest on operating funds. Interest-bearing

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accounts may also be maintained for certain individual City funds. a. Deposits in local banks or savings and loans must be consistent with the basic investment goals which stress safety and liquidity above yield. b. All bank and savings and loan association deposits shall be insured by the FDIC or, to the extent not insured, be collateralized with securities in accordance with California law.

13. Bond proceeds, obligations under lease, installment sales, or proceeds from other agreements of the City may be invested with more flexibility, in accordance with Section 53601 of the California Government Code, in any security that meets the statutory provisions governing the issuance of bonds or other agreements made by the City.

H. POLICY CRITERIA FOR SELECTING INVESTMENTS, IN ORDER OF PRIORITY

1. Safety
Safety and the minimization of risk associated with investing refers to attempts to reduce the potential for loss of principal, interest, or combination of the two. The first level of risk for municipalities. The second level of risk control is reduction of default risk by investing in instruments that appear upon examination to be the most creditworthy. The third level of risk control is reduction of market risk by investing in instruments that have maturities coinciding with dates of disbursement, thereby eliminating risk of loss from a forced sale.

The City only invests in those instruments that are considered very safe.

2. Liquidity
Liquidity refers to the “ability to easily sell” at any time with a minimal risk of losing some portion of principal or interest. Liquidity is an important quality for an investment to have, for at any time the City may have unexpected or unusual circumstances that result in larger disbursements than expected, and some investments may need to be sold to meet the contingency. Most investments of the City are highly liquid, with the exception of bond proceeds. Maturities of investments are selected in anticipation if disbursement needs, thereby obviating the need for forced liquidation or lost interest penalties.

3. Yield
Yield is the potential dollar earnings an investment can provide, and also is sometimes described as the rate of return. The City attempts to obtain the highest yield possible when selecting an investment, provided that the criteria stated in the Investment Policy for safety and liquidity are met and provided that the Investment Guidelines and Strategy are followed.

I. POLICY CONSTRAINTS
The City operates its investment program with many state and self-imposed constraints.

The City does not speculate; it does not buy stocks; it does not deal in futures or options; it does not purchase on margin through reverse repurchase agreements. The weighted average life of the portfolio is maintained within the limits dictated by the cash flow needs of the City and by Investment Guidelines. The City diversifies its investments to reduce

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potential default on market risks. The portfolio is carefully monitored to assure the prudent management of the portfolio.

J. SELECTION OF INVESTMENT CONTACTS
The City determines those firms with which it will do investment business through a process outlined in the Investment Guidelines. The City will not invest with any firm not on the approved list of Investment Contacts.

K. SAFEKEEPING
All securities in the City’s portfolio are maintained in the City’s vault or in an acceptable safekeeping account with a perfected interest in the City’s name, and are evidenced by safekeeping receipts. All transactions will be conducted as delivery-vs-payment settlements.

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L. INVESTMENT CONTROLS
The City Treasurer has developed a system of internal investment controls and a segregation of responsibilities of investment functions, in order to assure an adequate system of internal controls over the investment function. The controls are designed to prevent losses of public funds arising from fraud, employee error, misrepresentation of third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of the City of Scotts Valley. Controls deemed most important include: clear delegation of authority to subordinate staff members, separation of transaction authority from accounting and recordkeeping, supervisory control of employee actions, written confirmation of all transactions, minimizing the number of authorized investment officials, documentation of transactions and strategies, custodial safekeeping, avoidance of bearer-form securities, specific limitations regarding securities losses and remedial actions, proper review and approval of brokerage accounts and investment transactions, and control of collusion.

M. INVESTMENT REPORTS

1. The City Treasurer may annually render a Statement of Investment Policy to the City Council for their approval at a public meeting per California Government Code section 53646(a).

2. The City Treasurer may render to the City Manager and City Council a quarterly report within 45 days after the end of the quarter. Included in these types of reports are type of investment, issuer, date of maturity, face value, cost of security, current market value (and source of valuation), yield, citation of compliance with the investment policy (or explanation), and a statement of the City’s ability to meet expenditure requirements for the next 6 months.

N. INVESTMENT AUDITS
Annually, there shall be both internal and external audits of the City’s Investment Program to assure compliance with the Investment Policy, Investment Guidelines, and Investment Controls.

O. INVESTMENT PERFORMANCE EVALUATION
Annually, the City Council, at the time that the Investment policy is brought to the City Council, shall review and evaluate the investment program and update the Statement of Investment Policy. The City Manager shall review the Investment guidelines semiannually.

P. RATING OF SECURITIES
Only securities which meet the ratings specified above may be purchased. If the rating of a security which the City owns is downgraded below these rating standards, the Treasurer shall determine whether to retain or liquidate the security, based upon the new rating, the reason for the re-rating, the maturity date, the amount, and the market value of the security.

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Q. INVESTMENT GUIDELINES

1. Cash Availability Guidelines
a. Cash flow analysis is developed which serves as a basis for determining the cash available for investment and maturity dates needed to cover future disbursements.
b. A close rapport is maintained with all departments having a significant impact on cash flow to ensure receipt of timely and accurate data. c. Where practical, revenue receipts are consolidated into one bank account and invested on a pooled concept basis. Interest earnings are allocated according to fund cash and investment balances.
d. Active bank balances are kept as low as possible without jeopardizing good banking relationships by maintaining investment of available cash as near to 100% as possible.
c. Bank balances are obtained weekly to assure accurate and detailed information.
d. Sufficient funds are maintained in very liquid investments to meet most unexpected contingencies.

2. Investing Guidelines
a. A close working relationship is maintained with a list of well-established brokers, dealer/brokers, and bankers whose proven technical knowledge and expertise is of assistance in making investment decisions. b. Economic data, forecasts, and conditions are continuously obtained from financial experts in the field and evaluated as to impact on investment decisions.
c. Business journals are routinely reviewed and education programs are attended to enhance knowledge and professional skills required to manage an investment portfolio.
d. Only investments authorized by the Investment Policy are transacted.

Investments are made with qualifying institutions based only on competitiveness of interest rates offered.
e. Purchases of investments are made with the intent of holding the investments to maturity. If, under favorable market conditions, investments of similar maturities can be swapped or traded and portfolio performance can be improved without compromising safety, the trades may be transacted.

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f. Individuals authorized by delegation to assist the City Treasurer and City Manager in conducting transactions are limited to purchases of 90 days maturity or less, and are limited to transactions of no more than $100,000 in size, unless specifically otherwise authorized under unusual circumstances.

3. Guidelines for Broker/Dealer and Banker Relationships a. A list of approved brokers, broker/dealers, banks, and savings and loans is reviewed monthly based upon the following:
(1) Being authorized under California Government Code section 53635.5 to transact investments with local agencies.
(2) Receipt of positive audited financial statements.
(3) Being in business for a minimum of three years.
b. The City Treasurer reviews and acts on requests to be on the approved list and accompanying financial statements.
c. There is a formal filing system of the required information for those on the approved list, which provides for an annual report of updated financial information.
e. There is a timely transaction monitoring system to ensure that all documents and confirmation are received and are correct. f. Transactions are monitored monthly to assure that there are no undue concentrations of investments with any single firm.

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GLOSSARY OF INVESTMENT SECURITIES
a. Obligations of the U.S. Treasury - Debt obligations backed by the full faith and credit of the U.S. Government. They are issued with initial maturities from three months to 30 years.
b. Agency Obligations - Obligations guaranteed by the full faith and credit of agencies and instrumentalities of the U.S. Government, such as FNMA, FFCB, FHLB, and GNMA. c. Negotiable Certificates of Deposits - A bank deposit issued in negotiable form (i.e., one that can be bought or sold in the open market).
d. Banker’s Acceptance - A draft that is drawn and accepted by banks. Because the accepting institution is obligated to pay the draft without regard to whether it is paid or not, banker acceptances are considered to be high quality money market instruments. e. Commercial Paper - Unsecured promissory notes issued by corporations to fund short term cash requirements.
f. Repurchase Agreement - An agreement in which an investor buys securities from a contra-party with the provision that the buyer must sell the securities back to the contraparty at a specific date at a pre-agreed upon price. The repurchase amount is expressed as principal plus interest at an agreed upon rate. g. Corporate Medium Term Note - An obligation of a corporation issued with an initial term of maturity of nine months to 15 years.
h. Mortgage Pass Through Certificates - Bonds backed by an undivided interest in a pool of mortgages or trust deeds. Income and principal from the underlying mortgages is used to pay off the securities.
i. Money Market Mutual Funds - Mutual funds which invest in short term securities and strive to maintain a share price of $1.
j. Local Agency Investment Fund (LAIF) - An investment pool managed by the California State Treasurer’s Office to provide safe, low cost, and highly liquid investment alternative for California’s local governmental agencies. k. Joint Powers Authority Pool (JPAP) - Joint powers authorities in which local agencies may invest in the securities and obligations authorized in Section 53601, subdivisions (a) to (q) where each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. l. Demand Deposits - A deposit of monies where the monies are payable by the bank upon demand of the depositor.

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PERMITTED INVESTMENTS AND LIMITATIONS ON INVESTMENT
Investment Type Percent of
Portfolio
Maximum Life Other Requirements
a. US Treasury No Limit 5 Years No Strips
b. Agencies of US Government No Limit 5 Years
c. Certificates of Deposit 30% 5 Years Rated A1/P1
d. Banker’s Acceptances 40% 180 Days Rated A1/P1
e. Commercial Paper 15%
(30% if
weighted
dollar)
270 Days
(Average <31 days)
Rated A1/Pa
US Corporations Assets
>$500 M LTD Rated A
f. Repurchase Agreements 15% 30 Days Collateralized Market >102%
g. Corporate Medium Term
Notes
30% 5 Years Rated A
h. Mortgage Pass-Through 15% 5 Years US Government Only i. Money Market Mutual Funds 15% N/A Assets >$250M
Invests only in a-h
above.

Highest rating possible.

Registered Advisor
j. LAIF LAIF Limit N/A
k. JPAP No Limit N/A Rated AAf/S-1+ CalTrust
Rated AAAm CAMP
k. Demand Deposits No Limit N/A FDIC or collateralized
APPROVED AS TO FORM:

Kirsten Powell, City Attorney

AGENDA ITEM 5.

DATE: 6/4/2025
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 6/4/2025
TO: Honorable Mayor and City Council
FROM: Stephanie Hill, Administrative Services Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: Adopt and approve annual budget items, including the Fiscal Year 2025-26 Budget

SUMMARY OF ISSUE
Adoption of the Fiscal Year 2025-26 Annual Budget
The FY 2025-26 Final Proposed Budget is attached for City Council consideration. This budget includes a long-range financial forecast with a detailed focus on the City's General Fund, the primary funding source for City operations. It reflects Council priorities such as exploring new revenue sources, investing in service enhancements, and advancing development efforts, particularly for the Town Center.

The budget has been developed using the OpenGov platform, which enables residents, elected officials, and stakeholders to explore the City's budgets online. The platform provides real-time access to the budget and interactively displays current and historical revenues and expenditures by fund, department, and object level. This tool supports the City's ongoing commitment to transparency in local government.

The budget highlights the need for continued fiscal planning. While voter-adopted Measure Z has brought much-needed stability, further revenue measures may be required to sustain service levels. Sales tax revenue is expected to remain flat amid economic uncertainty.

Implementation of voter-adopted Measure X (business license modernization) will be closely monitored, with an update planned for the FY 2025-26 Mid-Year Review in December 2025.

The City is presenting a structurally balanced operating budget.

Key Highlights:
• General Government Revenue: $24.1 million
• Operating Expenses: $22.7 million
• Capital Projects: $6.7 million
• Wastewater Enterprise Revenue/Expenses: $6.8 million
o Includes $2.3 million in capital that may require debt financing if all projects move forward in the same fiscal year.
• Transfers: $7.1 million (primarily from Special Revenue to Capital Projects) • Projected General Fund Ending Balance: $2.5 million, or 11% of operating

expenditures — below the minimum reserve level
• Pending FHWA Reimbursement: $2.2 million from FY 2022-23 storm damage, expected end of calendar year 2026
The FY 2025-26 Budget was reviewed in detail by the City Council at the May 21, 2025 meeting. The original budget presentation did not include the Community Grant Program funding. Council directed a change to include $50,000 for the Community Grant Program, similar to the prior year. Applications for the program will be on a temporary hold while the City reviews current fiscal year results and revenue projections.

The full Online Budget Book will be accessible through the City’s website shortly after the budget is adopted.

Classification and Salary Schedules
As part of the current employee agreements, the Council previously adopted the FY 2024-25 through FY 2026-27 Classification and Salary Schedules. These schedules are incorporated into the proposed budget. Any future adjustments will be brought to Council for approval as needed.

Transfers
Transfers represent the internal movement of funds between different City accounts. They help ensure balanced funding, support specific priorities such as capital projects or debt repayment, and do not constitute direct expenditures. Including these in the budget enhances transparency and supports strategic financial management.

Long-Range Financial Planning
The FY 2025-26 Proposed Budget includes a 10-year long-range forecast, which, despite showing improvement, continues to project a structural deficit. The City is taking steps to address this challenge in alignment with its Guiding Budget Principles.

Planned Actions to Address the Structural Deficit:

1. Present forecast results from the Measure X business license tax implementation at or before the FY 2025-26 Mid-Year Review.

2. Continue analysis of a Transient Occupancy Tax (TOT) adjustment for potential placement on the 2026 election ballot. (Scotts Valley's TOT is currently 11%, while other jurisdictions in Santa Cruz County are at 12%.)

3. Delayed one proposed full-time equivalent (FTE) position in FY 2025-26. The current model includes one new FTE annually over the next three years (3 total). These will be reassessed during each annual budget cycle.
o Note: Eliminating all future FTEs would technically resolve the deficit by 2033 but would likely impair service delivery and is not recommended as a sole strategy.

City-wide Fund Review
In support of financial transparency and compliance, staff conducted a comprehensive review of all City funds. The review evaluated the necessity, categorization, and intended use of each fund.

High-Level Fund Changes:
• Close inactive funds with minimal balances and transfer remaining amounts to similarpurpose funds. • Establish new funds for specific or legally required tracking purposes. • Consolidate recreation-related funds under the General Fund. • Create a revised fund matrix confirming active funds, categories, uses, and interestearning activity.

These changes will become effective in FY 2024-25. A resolution and matrix outlining the changes are attached. Future changes will follow this same formal review and approval process.

Annual Adoption of the Utility Users Tax
In accordance with Ordinance No. 109.3 (SVMC §3.35.180), the City Council must annually authorize the continued collection of the Utility Users Tax on gas and electric service providers serving properties in Scotts Valley. The FY 2025-26 Proposed Budget assumes continued collection of this tax to support essential services.

FISCAL IMPACT
The FY 2025-26 Proposed Budget anticipates total revenues of $30.9 million and expenditures of $36.2 million, which includes $8.9 million in capital improvement projects. Fund transfers totaling $7.1 million support a structurally balanced operating budget, even as the City makes strategic capital investments.

STAFF RECOMMENDATION
It is recommended the City Council adopt the following resolutions:

1. Resolution No. 630.45 approving the FY 2025-26 Annual Budget and making related appropriations.

2. Resolution No. 2062 approving the Fund Structure.

3. Resolution No. 1501.32 approving the continued collection of the Utility Users Tax for FY 2025-26.

TABLE OF CONTENTS

1. Resolution No. 630.45 Approving FY 2025-26 Annual Budget

2. Exhibit A FY2526 Budget Package

3. Resolution No. 2062 Fund Review

4. Exhibit B Fund Matrix Summary

5. Resolution No. 1501.32 UUT FY2526

RESOLUTION NO. 630.45

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY APPROVING THE CITY’S ANNUAL BUDGET FOR FISCAL YEAR 2025-26

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 2025-26 Annual Budget for the fiscal year ending June 30, 2025 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.

The above and foregoing resolution was duly and regularly adopted by the City Council of the City of Scotts Valley at a special meeting held on the 4th day of June 2025 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved: ____________________________
Derek Timm, Mayor
Attest: ___________________________
Cathie Simonovich, City Clerk

FY 2025-26
City of Scotts Valley Annual Budget

FY 2025–26 BUDGET
Table of Contents
Budget Highlights ....................................................................... 1 City Manager Message .......................................................... 2 - 5 Long-Range Financial Forecast ..............................................6 - 7 Fund Balance Summary .............................................................. 8 Department Expense Details......................................................9 Revenue Details........................................................................ 10 Budgeted Positions................................................................... 11 Capital Improvement Projects..................................................12 Transfer Activity ....................................................................... 13

BUDGET HIGHLIGHTS CITY COUNCIL BIANNUAL
STRATEGIC GOALS 2025-2027
Overall revenue of $30.9 million is included with $15.2 million of that revenue generated from taxes, including Measure Z.

The budget includes $27.2 million in operating expenditures and an ambitious $8.9 million in capital projects for a total budget of $36.2 million.

The Economic Development budget continues to focus on
investments to prepare the Town Center for development.

Investing in staff has paid off as the City was fully staffed in 2024 and continues to have very low vacancy rates.

The City’s $8.9 million CIP focuses on completing $7.7 million on 17 major capital projects including roadway improvements and critical wastewater treatment plant infrastructure upgrades per Council directed goals. The remaining $1.3 million is for 19 smaller capital outlay projects that are fully funded by Special Revenue sources.

The General Fund is expected to draw down reserves totaling $1 million in FY 2026 as expenses outpace revenues to provide core services and deliver capital improvement projects leaving a projected ending fund balance of $2.5 million or 11% of operating expenses.

Maximize citywide high performance through efficient use of resources, proactive revenue development, adaptability, and strategic thinking across all operational areas.

Promote safety across the City through improving road
conditions, including safe routes for cyclists and pedestrians, preparing for and preventing wildfire impacts, and continuing proactive, community-based policing.

Support a thriving city through economic development,
diverse and affordable housing, recreation programs,
(protecting and) promoting the City’s brand and supporting community building events.

Improve City facilities to meet the needs of a modern
workforce and community services.

Invest in and continue planning the City’s Town Center
FY 2025-26 BUDGET

SCOTTS VALLEY, CA
The City’s budget is done through the OpenGov online platform to allow for online access to the budget, interactive displays, current and historical revenue and expenses down to the fund, department and object level. This financial transparency platform has been deployed as a resource for stakeholders as part of the City’s ongoing initiative to promote and enhance public transparency in local government. Shortly after the Council adopts the budget, this platform will go live with the FY 2025-26 budget. 1

City Manager Budget Message
May 29, 2025
Honorable Mayor and Members of the City Council:

With appreciation for the tremendous collective effort dedicated to its development, the FY 2025-26 City of Scotts Valley Preliminary Budget is presented to the City Council for your consideration. The last year brought continued economic uncertainty with regard to inflation, interest rates, new tariffs, and shifting economic policies at the federal and state level. The Scotts Valley economy remained relatively stable, with sales tax flat and modest growth in hotel taxes as tourism on the California coast exceeded prepandemic levels, particularly in Santa Cruz County. The City’s economic outlook remains cautious, with sales tax projections remaining flat into the next year. The State budget shortfall will impact the City’s opportunities to leverage grant funding and delays in federal reimbursements for emergency work done to repair roads after the 2023 winter storms will impinge the City’s cashflow for this budget year.

Despite the challenges and economic uncertainty, our City has been rebuilding, thanks to the passage of Measure Z, the City’s 1.25% sales and use tax, in March 2020. In the current year, Measure Z accounted for $4.3 million of the City’s revenue, which was $300 thousand less than the original budget projected. It allowed us to hire key staff across the City, particularly in the Police Department, which is now 100% staffed. In the Preliminary Budget for FY 2025-26, Measure Z revenue is expected to remain flat. Sales tax is a key revenue source that will continue to be monitored as results come in, and future trends are reported in the markets.

In addition, Measure X was overwhelmingly passed by the voters in November 2024 to modernize the City’s business license tax program. Measure X will move the City away from an employee-based tax rate to a gross receipts-based rate. In year 1 (FY 2025-26) businesses will only pay 50% of any increase in tax owed, limiting Measure X’s impact on this year’s budget to $300 thousand. A complementary compliance effort is underway to identify businesses operating without a business license, to ensure all businesses are paying their fair share.

Our efforts to rebuild the City’s infrastructure and organizational capacity were mostly successful this year. The City’s technology is now managed by a fiveyear equipment replacement plan, ensuring cyber security and technological efficiencies to enhance our workforce performance. With full staffing in our Public Works Engineering Division, we completed 11 capital projects this year and have another 24 active projects with 7 of those expected to be completed next year. This demonstrates success in addressing the backlog of capital projects that plagued the City during and following, the pandemic years.

Fiscal Year
2025-2026
Budget
$30.9 Million Revenue
• $4.3 Million Measure Z
• $300,000 Measure X

$36.1 Million Expenses
• $25.9 Million Operating
Expenses
• $9 Million Capital
Projects
Labor Force
• 65 Staff
• 3.5% Vacancy Rate
Planned Use of
Reserves
$1 Million General Fund
$4.2 Million Other Funds
2

In the calendar year 2024, we hired 13 new employees. Our staffing situation has stabilized across most departments, but with over 50% of our staff with a tenure of less than 3 years, the City’s workforce is traversing a steep learning curve. Our success in hiring and retaining staff has resulted in the City’s vacancy rate being at its lowest level since before the COVID pandemic, at 3.5%. In December 2024, the City was fully staffed across all departments for the first time in recent memory.

The Council established the following priorities for the coming two fiscal years:

1. Maximize citywide high performance through efficient use of resources, proactive revenue development, adaptability, and strategic thinking across all operational areas.

2. Promote safety across the City through improving road conditions including safe routes for cyclists and pedestrians, preparing for and preventing wildfire impacts, and continuing proactive, community-based policing.

3. Support a thriving city through economic development, diverse and affordable housing, recreation programs, (protecting and) promoting the City’s brand and supporting community building events.

4. Improve City facilities to meet the needs of a modern workforce and community services.

5. Invest in and continue planning the City’s Town Center.

These goals have been used to inform the proposed budget and will be supported by strategies and tactics developed by staff.

Budget Overview
The proposed FY 2025-26 annual budget includes cautious revenue assumptions as the City and the region continue to face high inflation and economic uncertainty. Overall revenue of $30.9 million is included with $15 million of that revenue generated from taxes, including Measure Z. The budget includes $25.9 million in operating expenditures and an ambitious $9 million in capital projects for a total budget of $36.1 million.

This budget includes a planned use of fund balance of $1 million from the General Fund, and an additional $4.2 million from other funds, which includes funding for capital projects and supplementing recreation programs. In all likelihood, we will not complete every project on the CIP or maintain full staffing, resulting in budget savings as we progress through the year, as has been the trend for the last 2 years.

Highlights from the proposed FY 2025-26 budget are as follows:
 The City’s general fund balance is projected to drop below minimum reserve levels by the end of FY2025- 26 due to sluggish revenue, increased labor expenses and predicted delay in federal emergency fund reimbursement.
 In alignment with the City’s budget policies, this budget relies heavily on special revenue and other fund utilization to protect the general fund balance. A thorough review of these funds and their allowable expenses, along with force accounting and restructuring our CIP and capital outlay programs has resulted in no general fund transfer to the CIP fund this year, and more departmental expenses being charged to other funds. This is shown in an increase in transfer activity.  Measure X, modernizing the City’s Business License Tax program, will modestly help in FY2025-26, however its full impact won't be understood until the mid-year budget review, after the first year of renewals are processed.
3

 Increases in labor costs as agreed in the current 3-year labor contracts reflect fair market compensation packages for all city staff. The largest increase is in the Police Department. Certain programs and personnel have been restructured to improve organizational efficiency. Vacancies will be reviewed and assessed throughout the year for efficiency and necessity before refilling.  The cost of the School Resources Officer continues to rely entirely on the City’s General Fund.  $50,000 in General Fund was allocated for the City’s Community Grant Program but with applications being placed on temporary hold, and $5,000 was discontinued as a contribution to the County’s Housing for Health program. Support for these programs will be reassessed at the mid-year budget review, depending on updated revenue projections at that time.
 The Economic Development budget focuses on investments to prepare the Town Center for development.
 The City’s CIP focuses on completing 7 projects including the Skypark big kids' playground, roadway improvements and critical wastewater treatment plant infrastructure upgrades per Council directed goals.

Fiscal Reserves and Long-Range Forecast
The City Council establishes target reserve
policies for its operating and capital funds.

Nonetheless, the General Fund is expected to
draw down reserves totaling $1 million in FY
2025-26 as expenses outpace revenues to
provide core services and deliver capital
improvement projects leaving a projected
ending fund balance of $2.5 million or 11% of
operating expenses. This is below the
established target minimum reserve of 17%.

Fund balance is expected to return to the
reserve target in FY 2026-27 upon Federal
reimbursement of $2.2 million of emergency
road repair expenses. The City’s long-range forecast, updated with Measure X projected revenue added, predicts a smaller structural budget deficit than prior forecasts. However, revenues are projected to trail expenses by $500,000 - $1 million per year which will deplete reserves if additional action is not taken.

The 2021-2023 surplus represents one time
funding from ARPA coupled with depleted staffing
levels and virtually no capital project activity. In
2024, the Council established the Section 115
Pension Trust Fund with an initial deposit of $2
million. Across 2024-2025, $2.2 million of
emergency road repair expenses were incurred
and are not expected to be reimbursed by the
Federal government until 2027.
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202120222023202420252026202720282029203020312032203320342035 Millions
City of Scotts Valley General Fund Reserve Forecast
Ending Reserves Reserve Minimum
$2.9
$2.1
$3.2
($4.4)
($3.6)
($1.0)
$1.2
($1.1) ($0.8) ($0.6) ($0.5) ($0.5) ($0.4) ($0.4) ($0.3) $(5.0)
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$1.0
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$4.0
202120222023202420252026202720282029203020312032203320342035 Millions
City of Scotts Valley General Fund Surplus (Deficit) Forecast 4

To understand the City’s long-range forecast, it is important to understand the City’s past. The chart below shows the City’s key tax revenue sources from 2009 to present.

The loss of redevelopment revenue was not
addressed for almost a decade, leaving the City
in a dire financial situation until Measure Z was
adopted in 2020. Compared to 2% inflation, the
cumulative loss over that period is over $30
million.

Property taxes still only provide $2.1M per year,
or 8% of the City’s overall governmental revenue,
while Measure Z provides $4.3M or 18%.

A decade of deferred maintenance on the City’s streets, parks and buildings has left the City in a difficult and costly game of catch up. The City will need additional revenue sources if it is going to be able to meet the expectations of the community in the areas of street conditions, park amenities, recreation programming, and modernization of our facilities.

To help us understand the extent of these needs, Public Works has completed several assessments including: the Citywide Parks Master Plan, Pavement Condition Assessment and a Facility Conditions Assessment. In this coming year, we have prioritized completion of two additional plans: a Wastewater Master Plan and Skypark Facility Master Plan to ensure resources are planned efficiently for the next decade or more. The resulting needs identified in these planning efforts will need to be accounted for in the longterm forecast and future CIP.

I would be remiss to not dedicate a portion of this summary to the Town Center. Over the last three years, the City has made incredible progress toward making the Town Center a reality and FY 2025-26 will be the year it all comes together, cumulating with a development agreement with a to-be-determined private development partner, based on the City’s updated vision. The City has invested wisely to remove the prior barriers to development and in FY 2024-25 purchased the final 8 acres of land needed to assemble the Town Center core land. With market forces on our side, in the near future we will see the Town Center constructed! In Closing
Scotts Valley is not alone in facing financial challenges, however our challenges are unique due to our low property tax rate. The City is on a path of modernization and renewal to bring back our streets, parks and services to a level that our staff and community can be proud of. I believe the team at the City is up to this task, but the community will need to continue to fund this important work for current and future generations.

Thank you to the City Council for your ongoing support and commitment to the Scotts Valley community.

Thank you to Mayor Timm and Vice Mayor Timms, as the budget subcommittee, for your guidance and feedback as we prepared this budget; and a huge thank you to the finance team and executive team for your incredibly hard work to help move our City forward.

Mali LaGoe, City Manager
5

Long-Range Financial Forecast
The City prepares a long-range financial forecast for funds to guide policy decisions, assess sustainability, and anticipate fiscal challenges. These forecasts are not intended to predict exact outcomes, but to serve as strategic planning tools that help the City Council and community understand long-term financial trends, particularly in areas such as capital improvement funding, service level maintenance, and the identification of potential funding gaps. The General Fund forecast includes:
• A current snapshot of fund balance reserves
• Revenue projections based on existing revenue sources and trends • An expenditure plan aligned with current service levels and building in future needs • Additional funding for capital improvement projects and subsidizing recreation activities General Fund Overview
The General Fund is the focus of the forecast, as it accounts for most of the City’s expenditures.

The charts below illustrate the projected General Fund Available Balance through FY 2034–35.

Projections incorporate the latest data, including FY 2025–26 budgeted activities, and reflect the City’s reserve target of 17% of operating expenditures. • For FY 2025–26, the projected ending fund balance is $2.5 million, or 11%, which falls below the target reserve level.
• A pending $2.2 million federal reimbursement for storm-related damage (FY 2022–23) is anticipated in calendar year 2026 and is reflected in the FY 2026–27 projection. • Without changes to revenue or expenditures, the fund balance is projected to be fully depleted by FY 2031–32.

While there are measures available to maintain the General Fund, the projection signals a need for proactive planning to address the structural deficit and protect the City’s fiscal health.

Key Forecast Assumptions
The long-range forecast is built on multiple financial variables:
• Steady growth in core revenues
• Rising costs for service delivery and long-term liabilities • Minimal economic downturn impacts
• It does not include potential future revenue sources unless they are formally approved or more clearly defined.

Measure Z, the local 1.25% sales tax approved in 2020, is expected to generate $4.3 million in FY 2025–26, with modest growth assumed in subsequent years. While it is currently scheduled to expire after FY 2031–32, the forecast assumes continuation of this funding.

In 2023, the City allocated $2 million to a pension trust to generate interest and help offset future pension obligations. While only interest earnings are currently factored into the forecast, these funds remain accessible for General Fund pension costs if needed. 6

Fiscal Outlook and Next Steps
The forecast reflects gradual movement toward long-term financial sustainability; however, a structural deficit remains under the current assumptions. Consistent with the City’s Guiding Budget Principles, any ongoing financial gap must be addressed through clearly defined and actionable decisions. The City will continue to monitor tax revenues closely, including the Measure X business license tax passed in November 2024. In parallel, City staff and financial consultants are actively evaluating strategies to enhance revenue and control costs. The longrange financial forecast will remain a living document, with formal updates and reassessments beginning with the FY 2025–26 Mid-Year Review to ensure the City remains on a path toward fiscal resilience.
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$-
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20252026202720282029203020312032203320342035
Millions
City of Scotts Valley General Fund Reserve
Forecast
Ending Reserves Reserve Minimum
($3.6)
($1.0)
$1.2
($1.1) ($0.8) ($0.6) ($0.5) ($0.5) ($0.4) ($0.4) ($0.3) $(4.0)
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$-
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20252026202720282029203020312032203320342035
Millions
City of Scotts Valley General Fund Surplus
(Deficit) Forecast
7

City of Scotts Valley
Summary of Financial Resources and Requirements
FY 2025-26
Fund Description
Projected
Beginning Fund
Balance
07/01/2025
Estimated
Revenues
FY26
Transfers
In
Estimated
Total Funds
Available
Proposed
Budget
Expenditures
FY26
Transfers
Out
Projected
Ending Fund
Balance
06/30/2026
General Funds
1 General Fund 2,550,293 19,686,976 627,750 22,865,019 20,540,783 623,585 1,700,651 6 Equipment Replacement Reserve 1,003,154 38,000 1,041,154 267,250 773,904 Recreation Funds (4, 28, 123) 0 348,400 681,085 1,029,485 971,985 57,500 0 Subtotal General Funds 3,553,447 20,073,376 1,308,835 24,935,658 21,512,768 948,335 2,474,555 Capital Improvement Projects
150 Major Capital Projects 664,627 750,000 4,423,000 5,837,627 5,755,000 82,627 151 Capital Outlay Projects - - 973,800 973,800 973,800 - Subtotal Capital Improvement Projects 664,627 750,000 5,396,800 6,811,427 6,728,800 - 82,627 Special Revenue Funds - Development Impact Fees
7 Drainage Construction Impact Fees 116,765 10,000 126,765 126,765 8 Traffic Impact Mitigation Fees 960,673 60,000 1,020,673 1,020,673 9 Park & Recreation Facilities Impact Fees 1,872,364 90,000 1,962,364 500,000 1,462,364 21 General Facility Impact Fees 2,503 2,500 5,003 5,003 27 Police Facility Building Impact Fees 382,709 20,000 402,709 402,709 86 Library Impact Fees 195,329 11,000 206,329 206,329
Subtotal Special Revenue Funds - Development Im 3,530,343 193,500 - 3,723,843 - 500,000 3,223,843 Special Revenue Funds - Other
2 Recycling/Environment 369,293 260,000 629,293 255,000 145,000 229,293 3 Gas Tax (HUTA) 1,135,987 361,685 1,497,672 1,222,000 275,672 5 SMIP Fees (0) 4,000 4,000 4,000 (0)
19 Affordable Housing 3,905,760 151,120 4,056,880 805,000 3,251,880 24 Lennar Funds 514,450 - 514,450 441,300 73,150
31 STP Exchange Projects (RSTPX) - 1,023,000 1,023,000 1,023,000 - 33 Tree Replacement 56,016 4,000 60,016 60,016
35 Green Building Funding 659,350 30,000 689,350 55,538 633,812 36 Disability Compliance 26,624 5,000 31,624 5,000 26,624 50 Pinewood Estates Maint. Dist. 0 6,000 6,000 6,000 0
51 Mt. Hermon Traffic Mitigation 12,268 - 12,268 12,268 77 Skypark Landscape Maint. Dist. (0) 41,750 41,750 41,750 (0) 78 Skypark Landscape Maint. Dist. Insurance 562,622 20,000 582,622 582,622 88 Library Improvements (Measure S) - 30,000 30,000 30,000 - 89 Library - Cty MOE Excess Distribution 486,513 15,000 30,000 531,513 531,513 115 Section 115 Set Aside - Pension 2,162,866 100,000 2,262,866 2,262,866 155 Measure D Sales Tax for Transportation 1,033,507 373,000 1,406,507 975,000 431,507 156 SB-1 (RMRA) 1,128,493 316,652 1,445,145 803,000 642,145 200 Quimby Act 197,052 7,000 204,052 204,052
201 Measure Q - 200,000 200,000 200,000 -
306 Supplemental Law Enforcement Services 109,691 103,000 212,691 148,000 64,691 313 Youth Based Programs 55,152 5,000 60,152 5,000 55,152 317 EDG Revolving Loan 407,487 15,000 422,487 422,487
Subtotal Special Revenue Funds - Other 12,823,133 3,071,207 30,000 15,924,340 1,177,288 4,987,300 9,759,752 Debt Service Funds
66 COP Debt Service Reserve 1,114,878 1,114,878 300,000 814,878 Subtotal Debt Service Funds 1,114,878 - - 1,114,878 - 300,000 814,878 Total Governmental Funds 21,686,428 24,088,083 6,735,635 52,510,146 29,418,856 6,735,635 16,355,655 Wastewater Enterprise Funds (funds are presented with working capital (current assets, less current liabilities) 10 Wastewater Operations 2,263,419 4,771,000 7,034,419 3,838,459 361,368 2,834,592 11 Tertiary Operating - 272,000 361,368 633,368 633,368 - 12 Waterwater Treatment Facility Fee (DIF) 395,522 45,000 440,522 440,522 14 Wastewater Capital Replacement Fund (1,182,309) 1,750,000 - 567,691 2,278,188 (1,710,497) Subtotal Wastewater Enterprise Funds 1,476,632 6,838,000 361,368 8,676,000 6,750,015 361,368 1,564,617 Total All Funds 23,163,059 30,926,083 7,097,003 61,186,145 36,168,871 7,097,003 17,920,271 38,023,086 Total revenues with transfers 43,265,874 Total expenses with transfers 8

DEPARTMENT EXPENSE DETAILS
FY2024

ACTUALS
FY2025

AMENDED
BUDGET
FY2026

PROPOSED
BUDGET

DIFF TO
PY
BUDGET

EXPENSES - GENERAL FUND

LEGISLATIVE
Salaries & Benefits 225,219 90,562 115,665 25,103
Services & Supplies 38,729 129,903 24,500 (105,403)
LEGISLATIVE TOTAL 263,948 220,465 140,165 (80,300)
LEGAL
Salaries & Benefits - - - -
Services & Supplies 296,888 305,000 340,500 35,500
LEGAL TOTAL 296,888 305,000 340,500 35,500

CITY MANAGER'S OFFICE
Salaries & Benefits 648,371 749,679 789,900 40,221
Services & Supplies 56,886 581,900 458,050 (123,850)
CITY MANAGER'S OFFICE TOTAL 705,257 1,331,579 1,247,950 (83,629)

ADMINISTRATIVE SERVICES
Salaries & Benefits 1,523,174 1,628,002 1,777,975 149,973 Services & Supplies 2,244,594 2,033,684 2,089,000 55,316 Debt Service 910,731 828,000 789,000 (39,000)
ADMINISTRATION TOTAL 4,678,499 4,489,686 4,655,975 166,289 POLICE
Salaries & Benefits 6,125,896 6,879,422 7,501,191 621,769 Services & Supplies 769,555 813,048 838,600 25,552
POLICE TOTAL 6,895,450 7,692,470 8,339,791 647,321

COMMUNITY DEVELOPMENT
Salaries & Benefits 953,870 1,052,020 1,187,434 135,414 Services & Supplies 655,633 746,000 709,000 (37,000)
COMMUNITY DEVELOPMENT TOTAL 1,609,503 1,798,020 1,896,434 98,414

PUBLIC WORKS
Salaries & Benefits 1,580,293 1,830,427 2,263,028 432,601 Services & Supplies 1,376,011 2,401,800 1,656,940 (744,860) PUBLIC WORKS TOTAL 2,956,304 4,232,227 3,919,968 (312,259) RECREATION - FUNDS 004, 028, 123
Salaries & Benefits 473,689 569,597 576,385 6,788
Services & Supplies 459,535 552,961 395,600 (157,361)
RECREATION TOTAL 933,224 1,122,558 971,985 (150,573)
GENERAL FUND EXPENSE TOTAL 18,339,073 21,192,005 21,512,768 320,763 * excludes transfers

EXPENSES - WASTE WATER ENTERPRISE FUNDS
Salaries & Benefits 1,525,384 1,496,889 1,432,011 (64,878) Services & Supplies 2,201,190 2,342,628 3,053,004 710,376 Capital Project Related 1,284,493 3,004,908 2,265,000 (739,908) WASTE WATER TOTAL 5,011,067 6,844,425 6,750,015 (94,410) * excludes transfers and depreciation
9

FY2024

ACTUALS
FY2025

AMENDED
BUDGET
FY2026

PROPOSED
BUDGET

DIFF TO
PY
BUDGET

REVENUE - GOVERNMENTAL FUNDS
Debt Service 51,220 45,000 - (45,000)
Capital Improvements 1,268,029 1,587,578 6,146,800 4,559,222 General Fund 20,251,811 19,894,824 21,382,211 1,487,387 Other Revenue 1,198,759 442,963 - (442,963)
Special Revenues (DIF) 238,033 241,500 193,500 (48,000) Special Revenues (Other) 4,584,439 3,743,450 3,101,208 (642,242) REVENUE TOTAL 27,592,290 25,955,315 30,823,719 4,868,404

REVENUE - WASTEWATER ENTERPRISE FUND
Wastewater 4,616,193 4,498,412 7,199,368 2,700,956
REVENUE - CITY WIDE 32,208,483 30,453,727 38,023,087 7,569,360 -
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
Sales & Use Tax Property Tax Business
License Tax
Utility Users
Tax
Transient
Occupancy Tax
Franchise Fees Charges for
Services

MAIN GENERAL FUND REVENUE CHANNELS
FY22/23 Act. FY23/24 Act. FY24/25 Est. FY25/26 Bud.
10

FY 2025-26 Budgeted Positions
The City’s budgeted position summary for Fiscal Year 2025-26 reflects a total of 65.00 FullTime Equivalent (FTE) positions distributed across key departments to support core municipal operations. The largest allocation of personnel is within the Police Department, which comprises 28.00 FTEs, highlighting the City's ongoing commitment to public safety and emergency response services. Public Works, collectively accounting for 20.50 FTEs between the General Fund and Wastewater operations, plays a vital role in maintaining infrastructure and services, ensuring the City's physical assets and environmental systems are well-managed.

Administrative Services is allocated 8.00 FTEs encompassing the City Manager’s Office, Finance and Human Resources, all providing support to internal operations. Community Development is allocated 5.00 FTEs, supporting and guiding growth and planning initiatives. The Recreation Department, with 3.50 FTEs, focuses on enriching the community through recreational programming and public amenities. This staffing plan reflects a balanced approach, aligning personnel resources with strategic priorities and community needs while maintaining fiscal responsibility.

Department FTE Count
Administrative Services 8.00
Community Development 5.00
Public Works General Fund 12.15
Public Works Wastewater 8.35
Police 28.00
Recreation 3.50
Total FTE FY25/26 65.00
11

FY 2025-26 City-Wide Capital Improvement Project Budget $ 8,993,800 Major Capital Projects
Priority Description Funding Source FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 Wastewater
A Wastewater Master Plan WWTP-C $ 350,000
A Clarifier Superstructure & Walkways WWTP-C $ 550,000
B Effluent Pump Replacement WWTP-C $ 275,000 $ 275,000 $ 275,000 A Collection System Lift Stations WWTP-C $ 200,000 $ 50,000 $ 50,000 $ 50,000 A Collection System Pipeline Upgrades WWTP-C $ 300,000 $ 300,000 $ 300,000 A MBR Upgrade WWTP-C $ 250,000
Wastewater Total $ 1,925,000 $ 625,000 $ 625,000 $ 50,000 -$ Transportation
A Annual Street Maintenance/Resurfacing GT/SB1/Meas D $ 1,500,000 $ 1,000,000 $ 1,000,000 B Janis Way Digout, Overlay, Sidewalk, Bike Lanes Measure D $ 250,000 A Mount Hermon Road Improvements Measure D/ RTC $ 723,000 A Bean Creek Road Pavement Rehab - Phase 2 Measure D $ 300,000 B Lockwood Lane Street Improvements Measure D $ 100,000 A Granite Creek Overcrossing RSTPX/SB-1 $ 200,000 $ 523,000 B Scotts Valley Drive - Pedestrian Safety Street Lighting CIP $ 300,000 A Traffic Signal Upgrade CIP $ 250,000 $ 250,000
A Scotts Valley Drive Corridor Improvements RTC/SB1/Measure D $ 1,500,000 Transportation Total $ 3,923,000 $ 1,823,000 $ 600,000 $ 1,300,000 $ 250,000 Storm Drains
A Storm Drain Trash Capture System CIP $ 150,000 $ 200,000 B Pinecone Drive Draining Improvements CIP $ 25,000 $ 100,000 A Scotts Valley Drive - Culvert Repair CIP $ 150,000 $ 850,000 A Granite Creek - Culvert Repair Design* CIP $ 100,000
A N. Scotts Valley Drive (S. of Redwood Vista) - Drainage CIP $ 30,000 $ 200,000 B Hacienda Road Storm Drain Extension CIP $ 100,000
Storm Drains Total $ 375,000 $ 1,130,000 $ 400,000 -$ -$ Parks
A Skypark Play Structure Replacement HUD $ 757,000
A Shugart Park Buildout Parks DIF $ 500,000 $ 2,154,863 Parks Total $ 1,257,000 $ 2,154,863 -$ -$ -$
General Facilities
A Public Works Facility Improvements CIP $ 200,000 $ 1,300,000 General Facilities Total $ 200,000 $ 1,300,000 -$ -$ -$ Total Major Capital Projects $ 7,680,000 $ 7,032,863 $ 1,625,000 $ 1,350,000 $ 250,000 * Specific year and funding source not yet identified
Capital Outlay Projects
Priority Description Funding Source FY 2025-26
Wastewater Enterprise Funds
B Generator Transfer Switch and UPS upgrades WWTP-C $ 40,000 B Wastewater Dump Truck WWTP-C $ 200,000
B Breaker Replacement: Thermographic / Neta WWTP-C $ 100,000 Wastewater Total $ 340,000
Government Funds
A Annual Citywide Street Striping1 Gas Tax $ 100,000
A IT Network Firewall Replacement Equip. Replacement $ 150,000 C Equipment Trailer Equip. Replacement $ 27,500
C Tractor Implements Equip. Replacement $ 25,000
A Police Patrol Vehicle Police SLES $ 80,000
B 5 Electric gate repair/replacements Equip. Replacement $ 30,000 C ADA Improvements - Phase 1 Lennar $ 116,300
B Recreation Building Exterior Paint/Siding Lennar $ 100,000 B Parks Lighting Project Lennar $ 65,000
B Basketball Courts Resurfacing Hocus Pocus Lennar $ 50,000 B Tennis Court Lights Lennar $ 45,000
B Community Center Doors Lennar $ 35,000
B Siltanen Retaining Wall Lennar $ 30,000
B Parks Buildings Roofing Measure Q $ 50,000
C Siltanen Gazebo Measure Q $ 45,000
B Glenwood Retain Wall Culvert Measure Q $ 25,000
Government Funds Total $ 973,800.00
12

FY 2025 - 26 Transfer Activity
Transfer From Transfer To Amount Method Purpose
2 1 $ 45,000 Actuals Environmental support
2 1 $ 100,000 Actuals Environmental support
306 1 $ 68,000 Actuals Police equipment
201 1 $ 80,000 Actuals Parks related support
66 1 $ 300,000 Actuals Debt service smoothing
6 1 $ 34,750 Actuals Computer replacements
1 4 $ 535,208 Actuals Recreation supplement
123 4 $ 57,500 Actuals Recreation supplement
10 11 $ 361,368 Actuals Tertiary supplement
1 28 $ 88,377 Actuals Recreation supplement
9 150 $ 500,000 Actuals Shugart Park
3 150 $ 500,000 Actuals Annual Street Maintenance
3 150 $ 622,000 Actuals SV Drive Corridor Improvements
156 150 $ 500,000 Actuals Annual Street Maintenance
156 150 $ 303,000 Actuals SV Drive Corridor Improvements 31 150 $ 300,000 Actuals SV Drive Corridor Improvements 31 150 $ 200,000 Actuals Granite Creek Overpass
31 150 $ 523,000 Actuals Mt Hermon Rd Improvements
155 150 $ 500,000 Actuals Annual Street Maintenance
155 150 $ 275,000 Actuals SV Drive Corridor Improvements 155 150 $ 200,000 Actuals Mt Hermon Rd Improvements
306 151 $ 80,000 Actuals Police vehicle
3 151 $ 100,000 Actuals Annual Citywide Street Striping 6 151 $ 232,500 Actuals Equip. Replacement Capital Outlay 24 151 $ 441,300 Actuals Lennar Funded Capital Outlay
201 151 $ 120,000 Actuals Measure Q Funded Capital Outlay 88 89 $ 30,000 Actuals Library repayment
$ 7,097,003
Summary of Transfers From by Fund Summary of Transfers To by Fund 1 $ 623,585 1 $ 627,750
2 $ 145,000 4 $ 592,708
3 $ 1,222,000 11 $ 361,368
6 $ 267,250 28 $ 88,377
9 $ 500,000 89 $ 30,000
10 $ 361,368 150 $ 4,423,000
24 $ 441,300 151 $ 973,800
31 $ 1,023,000 $ 7,097,003
66 $ 300,000
88 $ 30,000
123 $ 57,500
155 $ 975,000
156 $ 803,000
201 $ 200,000
306 $ 148,000
In municipal budgeting, transfers refer to the movement of funds between different accounts or funds within the City’s financial structure. These transfers are used to allocate resources where they are most needed, ensure balanced funding across operations, and support specific purposes such as capital projects, debt repayment, or special projects. Unlike direct expenditures for goods and services, transfers do not represent spending on external vendors but rather reflect internal reallocations of financial resources. By including these transfers in the budget package, the City provides transparency into how it strategically manages and prioritizes financial resources across departments and programs. 13

RESOLUTION NO. 2062

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY

FORMALIZING CITY-WIDE MUNICIPAL FUNDS AND ADOPTING CHANGES

RESULTING FROM A COMPREHENSIVE FUND REVIEW
WHEREAS, the City of Scotts Valley maintains a variety of municipal funds, each designated for specific purposes and supported by corresponding revenue sources; and WHEREAS, the structure, categorization, and usage of these funds have evolved over time; and
WHEREAS, as part of the City’s commitment to financial transparency and accountability, staff conducted a comprehensive review of all City funds; and WHEREAS, the objective of this review was to ensure that all municipal funds are necessary, properly categorized, clearly defined in purpose, and compliant with relevant financial guidelines; and
WHEREAS, the fund review resulted in the following key recommendations:
• Closure of funds no longer in use or with minimal balances, with transfers to similar-purpose funds;
• Creation of new funds for specific or required financial tracking; • Reclassification of certain recreation-related funds under the General Fund for better alignment and oversight;
• Adoption of a comprehensive fund matrix identifying active funds, categories, uses, and interest-earning activity;
NOW, THEREFORE, BE IT RESOLVED AND ORDERED by the City Council of the City of Scotts Valley that the City-wide municipal fund structure, as reflected in the attached Exhibit B, is hereby approved and adopted effective Fiscal Year 2024-25; and BE IT FURTHER RESOLVED that any future creation, modification, or closure of municipal funds shall follow a similar review and approval process as outlined herein.

The above and foregoing resolution was duly and regularly adopted by the City Council of the City of Scotts Valley at a meeting held on the 4th day of June, 2025, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved:

Derek Timm,
Mayor
Attest:

Cathie Simonovich,
City Clerk

Fund Matrix
Fund No. Fund Name Short Description Category Classification Restricted,
Committed,
Assigned,
Unassigned
Interest
Earning
1 General Fund
The General Fund is the City’s primary and most flexible funding source, where local tax revenues are deposited. Unlike restricted special revenue funds, the City Council has full discretion over how General Fund dollars are spent. General Fund Governmental Fund All Yes
4 Recreation
The Recreation Fund supports environmental stewardship and provides safe, inclusive spaces for play, learning, and community building. It includes five parks with athletic fields, play areas, and an off-leash area. Any shortfalls are covered by the other Recreation funds and then by the General Fund. General Fund Governmental Fund Varies 6 Equipment Replacement Reserve
This fund holds reserve assets to finance the future replacement of capital assets and equipment, such as vehicles or machinery. General Fund Governmental Fund Committed,
Assigned
28 Senior Center Operations
The City operates a Senior Center for the enjoyment of Scotts Valley’s seniors, offering a variety of programs and activities and rental of the senior center facility by community members. Program and rental revenues are recorded in the fund to pay for the expenditures associated with the programs and activities offered. Any shortfalls are covered by the other Recreation funds and then by the General Fund. This is a subset of the overal Recreation fund. General Fund Governmental Fund Varies
123
Commmunity Facility Center
Operations
The City operates a Community Center for the enjoyment of the community.

The facility is available for rental to the public. Rental revenues are recorded in the fund to pay for the expenditures associated with the operation and maintenance of the Center and any remaining goes towards overall Recreation activities. This is a subset of the overal Recreation fund. General Fund Governmental Fund Assigned 150 Major Capital Projects
These are large-scale, one-time investments that typically involve significant planning, design, and construction. They often have long useful lives, impact community infrastructure, and exceed a defined cost threshold (e.g., $100,000 or more). Project expenses are typically all tracked here and has revenue sources as transfers in. Capital Improvement Projects Governmental Fund Committed,
Assigned
151 Capital Outlay Projects
This category includes routine, yet essential, capital investments that support operations but do not rise to the level of a major capital project. These items are often recurring and ensure that existing assets remain safe, functional, and efficient. Project expenses are typically all tracked here and has revenue sources as transfers in. Capital Improvement Projects Governmental Fund Committed,
Assigned
7 Drainage Construction Impact
Fees
For payment of the actual or estimated costs of constructing and improving the storm drain facilities within the city, including any required acquisition of land. Special Revenue Fund - DIF Governmental Fund Restricted Yes 8 Traffic Impact Mitigation Fees

improvement of the traffic network, including any required acquisition of land. Special Revenue Fund - DIF Governmental Fund Restricted Yes The Fund Matrix serves as a comprehensive reference tool that outlines the structure and purpose of each budgeted fund within the City’s financial system. It provides essential information including the fund name, a brief description of its function, its classification (such as governmental, proprietary, or fiduciary), the category it falls under, and the primary use or purpose of the fund. This matrix helps readers understand how public resources are organized and managed, ensuring transparency in how different funding sources are allocated, restricted, or applied to specific programs, operations, or capital needs. By clearly identifying the role of each fund, the matrix supports effective decision-making and reinforces the City's commitment to fiscal accountability.

Fund No. Fund Name Short Description Category Classification Restricted,
Committed,
Assigned,
Unassigned
Interest
Earning
9 Park & Recreation Facilities
Impact Fees
For payment of the actual or estimated costs of constructing and improving the park and recreation facilities within the city, including any required acquisition of land, as well as grading, irrigation, and turfing costs associated therewith. Special Revenue Fund - DIF Governmental Fund Restricted Yes 21 General Facility Impact Fees
For payment of the actual or estimated costs of constructing and improving the general municipal facilities within the city, including any required acquisition of land. Special Revenue Fund - DIF Governmental Fund Restricted Yes 27 Police Facility Building Impact
Fees
For payment of the actual or estimated costs of law enforcement facilities, equipment, and training, including any required acquisition of land. Special Revenue Fund - DIF Governmental Fund Restricted Yes 86 Library Impact Fees
For payment of the actual or estimated costs of constructing and improving the library facilities within the city, including any required acquisition of land. Special Revenue Fund - DIF Governmental Fund Restricted Yes 2 Recycling/Environment
This fund accounts for fees paid by solid waste companies and customers through the County of Santa Cruz for disposal of solid waste in County transfer facilities. A portion of these revenues are sent back to the City help pay for recycling and environmental protection. (CSA-9) Special Revenue Fund Governmental Fund Restricted Yes 3 Gas Tax (HUTA)
The state of California imposes per-gallon excise taxes on gasoline and diesel fuel, sales taxes on gasoline and diesel fuel and registration taxes on motor vehicles with allocations to dedicated transportation purposes. These allocations flow through the Highway Users Tax Account (HUTA), which are allocated to state and local agencies based primarily on population. Special Revenue Fund Governmental Fund Restricted Yes 5 SMIP Fees
The City collects a Strong Motion Instrumentation Program (SMIP) fee on building permits requiring inspection, which supports California’s statewide seismic monitoring efforts. Administered by the Department of Conservation, these funds help install and maintain seismic instruments and are remitted to the State as required by law. Special Revenue Fund Governmental Fund Restricted 17 HOME Grant Program
The HOME Grant Program is administered by HUD and provides block grants to state and local governments to support affordable housing for low-income households. Funds are used for activities such as homebuyer assistance, rental housing development, and property rehabilitation. Special Revenue Fund Governmental Fund Restricted Yes 19 Affordable Housing
After the dissolution of Scotts Valley’s redevelopment agency in 2012, the City became the successor housing agency to manage affordable housing programs. It received funds and properties from the former agency, including rental income and first-time homebuyer loan repayments. These revenues support the administration of existing affordable housing and help fund new affordable housing development through subsidies to developers. Special Revenue Fund Governmental Fund Committed,
Assigned Yes
24 Lennar Funds
In 2014, the City received $1 million from Lennar Homes as part of a development agreement for the former Polo Ranch property. The funds, to be used at the City Council’s discretion, have supported various park and recreational infrastructure improvements. Special Revenue Fund Governmental Fund Committed

Fund No. Fund Name Short Description Category Classification Restricted,
Committed,
Assigned,
Unassigned
Interest
Earning
31 STP Exchange Projects (RSTPX)
The City receives grant funding through the Regional Surface Transportation Program and the California Local Partnership Program to support transportation-related projects. This fund accounts for the grant revenues and capital expenditures associated with approved projects. Special Revenue Fund Governmental Fund Restricted Yes 33 Tree Replacement
The City levies a tree removal fee for property owners that wish to remove trees on their property. Fees collected are used to fund tree planting maintenance efforts on City property to mitigate the environmental impact on tree removal by private property owners. Special Revenue Fund Governmental Fund Committed 35 Green Building Funding
The City collects a green building fee, as outlined in Municipal Code §17.51.080, on most property developments based on the project’s assessed valuation. The fee supports program management, public education, and local seminars on green building practices. Special Revenue Fund Governmental Fund Committed 36 Disability Compliance
The City collects a fee on business license registrations and renewals, as required by Senate Bill 1186. Ninety percent supports local accessibility compliance efforts, including training certified access specialists, while the remaining ten percent is remitted to the State. Special Revenue Fund Governmental Fund Assigned 50 Pinewood Estates Maint. Dist.

Established in 1987, the Pinewood Estates Landscape Maintenance District funds the upkeep of landscaping, irrigation, signage, fencing, and storm detention ponds for 25 parcels. Maintenance costs are covered by assessments levied on homeowners within the district. Special Revenue Fund Governmental Fund Restricted Yes 51 Mt. Hermon Traffic Mitigation
This fund accounts for fees charged for any development project whose traffic generation causes an increased burden on Scotts Valley Dr/Mt.

Hermon Rd and Mt. Hermon Rd/La Madrona Dr. Special Revenue Fund Governmental Fund Assigned 77 Skypark Landscape Maint. Dist.

Established in 1995, the Skypark Open Space Maintenance District funds the upkeep of a linear park and two greenbelt areas serving 190 adjacent parcels.

Maintenance and utilities are funded through assessments deposited into Fund 077, while Fund 078 holds reserves for slope failure self-insurance. Special Revenue Fund Governmental Fund Restricted Yes 78 Skypark Landscape Maint. Dist.

Insurance
Established in 1995, the Skypark Open Space Maintenance District funds the upkeep of a linear park and two greenbelt areas serving 190 adjacent parcels.

Maintenance and utilities are funded through assessments deposited into Fund 077, while Fund 078 holds reserves for slope failure self-insurance. Special Revenue Fund Governmental Fund Restricted Yes 88 Library Improvements (Measure
S)
Measure S, passed in June 2016, allocated $3.75 million in bond funding for renovations to the Scotts Valley Library. The project, which began in summer 2021 and was completed in 2022, included seismic upgrades, a new HVAC system, interior redesigns, and various facility improvements. Remaining funds were drawn down in FY 2022-23. Special Revenue Fund Governmental Fund Restricted Yes 89 Library - Cty MOE Excess
Distribution
The City participates in the Santa Cruz County Library Financing Authority, which collects property taxes in Scotts Valley to fund the City's share of the countywide library system and operate the Scotts Valley Branch. This contribution, known as the Maintenance of Effort (MOE), supports library services and may be used for renovation projects and direct operational costs as needed. Special Revenue Fund Governmental Fund Restricted Yes 115 Section 115 Set Aside - Pension
This fund was established for the safe and secure setting aside of funds, separate from the government's general fund, to reduce pension liabilities and stabilize pension costs. Special Revenue Fund Governmental Fund Restricted Yes

Fund No. Fund Name Short Description Category Classification Restricted,
Committed,
Assigned,
Unassigned
Interest
Earning
155
Measure D Sales Tax for
Transportation
The passage of countywide Measure D in November 2016 provides nearly $300,000 in annual sales tax revenues to the City to fund a variety of transportation projects that the City might not have otherwise been able to fund with existing revenues (a key stipulation in the measure). Projects are identified and approved by the Regional Transportation Commission on an annual basis. Special Revenue Fund Governmental Fund Restricted Yes 156 SB-1 (RMRA)
Established under SB 1 (The Road Repair and Accountability Act of 2017), RMRA funds are dedicated to maintaining and improving California’s transportation infrastructure. Special Revenue Fund Governmental Fund Restricted Yes 200 Quimby Act
This fee is collected from developers in lieu of requiring them to dedicate land for parks, recreation, or open space when a subdivision does not align with designated areas in the city’s open space plans. Special Revenue Fund Governmental Fund Restricted Yes 201 Measure Q
The Measure Q Fund is a dedicated special revenue fund established to support environmental resilience in Santa Cruz County. It was created by voter-approved ordinance to protect local drinking water sources, improve water quality, reduce wildfire risk, conserve wildlife and habitats, and expand access to parks and recreation. Special Revenue Fund Governmental Fund Restricted Yes 306
Supplemental Law Enforcement
Services

provisions of California Government Code §30061 under the Citizens’ Option for Public Safety program. These funds, known as “supplemental law enforcement services funds.” (SLESF) are allocated to local agencies to provide “front-line law enforcement services”, allocated based on population; the City of Scotts Valley receives a grant of $100,000 to each agency. Special Revenue Fund Governmental Fund Restricted Yes 313 Youth Based Programs
This fund accounts for youth focused programs such as DARE, the Junior Policy Academy, National Night Out, Police Exploring, and other associated youth focused public relations events. Special Revenue Fund Governmental Fund Committed 317 Community and Economic Grants
This fund accounts for revenues and expenditures related to federally, state, and locally funded grant programs that support community development and economic growth. This fund primarily tracks activities funded through the Community Development Block Grant (CDBG) program administered by the U.S. Department of Housing and Urban Development (HUD), as well as Economic Development Grant (EDG) programs awarded by state or local agencies. Special Revenue Fund Governmental Fund Restricted Yes 66 Debt Service
This fund holds reserve assets for previous City debt service. The remaining balance is used to smooth out future debt service payments until the fund is expended or a new debt service requires a reserve. Debt Service Funds Governmental Fund Assigned 10 Wastewater Operations
The City provides wastewater services to the community through its wastewater collection and treatment plant operations. Wastewater services are provided under the Public Works Department. Wastewater Fund Enterprise Fund Varies Yes 11 Tertiary Operating
The City provides tertiary water (recycled water) services through the treatment and distribution of non-potable water to the Scotts Valley Water District, maintained and operated by the City Wastewater Department. Wastewater Fund Enterprise Fund Varies 12 Wastewater Treatment Facility
Fee (DIF)
For payment of the actual or estimated costs of constructing and improving the sewage treatment facilities within the city, including any required acquisition of land. Wastewater Fund Enterprise Fund Restricted Yes 14 Wastewater Capital Replacement
Fund
This fund is established to finance the replacement of wastewater infrastructure, such as pipes, pumps, and treatment plant equipment, after they have reached the end of their useful lifespan. Wastewater Fund Enterprise Fund Committed,
Assigned

RESOLUTION NO. 1501.32

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY APPROVING THE CONTINUED COLLECTION OF THE UTILITY USERS’ TAX FOR THE FISCAL YEAR 2025-26
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 2025-26 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, 2026.

The above and foregoing resolution was duly and regularly adopted by the City Council of the City of Scotts Valley at a special meeting held on the 4th day of June, 2025 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved:___________________________
Derek Timm, Mayor
Attest:___________________________
Cathie Simonovich, City Clerk

AGENDA ITEM 6.

DATE: 6/4/2025
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 6/4/2025
TO: Honorable Mayor and City Council
FROM: Rodolfo Onchi, Public Works Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: Pinewood Estates Maintenance Assessment District Request for Engineering 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 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. Council must adopt a resolution instructing the City’s engineer to prepare and file a report with the City Clerk in accordance with Article 4, Chapter 1, Part 2, of the Landscaping and Lighting Act of 1972 for the 2025-2026 fiscal year.

After completion of the Engineer’s Report, the City Council will consider the report and a resolution of intention to impose the annual assessments. It is expected that it will occur at the June 18th City Council Meeting. On August 6, 2025, the City Council will hold the public hearing and consider any protests to the imposition of the assessments. As required, all 25 owners will be notified via mail before the public hearing.

FISCAL IMPACT
No fiscal impact is associated with this action.

STAFF RECOMMENDATION
Staff recommends that Council adopt Resolution No. 1213.39, a resolution of the City Council

of the City of Scotts Valley instructing the City’s engineer to prepare and file a report with the City Clerk in accordance with Article 4, Chapter 1, Part 2, of the Landscaping and Lighting Act of 1972.

TABLE OF CONTENTS

1. Resolution No. 1213.39 - Prepare Engineer Report for Pinewood Estates Assessment

RESOLUTION NO. 1213.39

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY

DIRECTING THE CITY ENGINEER TO PREPARE THE PINEWOOD ESTATES MAINTENANCE ASSESSMENT DISTRICT ENGINEER’S REPORT
WHEREAS, the City of Scotts Valley has an assessment district which was created pursuant to the Landscaping and Lighting Act of 1972 (Streets and Highways Code § 22500); and
WHEREAS, assessments are to be levied and collected within the Pinewood Estates Maintenance Assessment District for the 2025-2026 fiscal year; and WHEREAS, the procedure for levy of annual assessments found in the California Streets and Highways Code Section 22500 et seq. requires that the City Council direct the City Engineer to prepare and file an appropriate report; and WHEREAS, the purpose of the District is for the landscape maintenance of ornamental landscaping, irrigation equipment, signs, fences, and storm detention ponds.

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

1. That the City Engineer is hereby instructed to prepare and file a report with the City Clerk in accordance with Article 4, Chapter 1, Part 2, of the Landscaping and Lighting Act of 1972.

2. That this Resolution shall be effective immediately.

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 4th day of June 2025 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved: ____________________________
Derek Timm, Mayor
Attest: ___________________________
Cathie Simonovich, City Clerk

AGENDA ITEM 7.

DATE: 6/4/2025
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 6/4/2025
TO: Honorable Mayor and City Council
FROM: Rodolfo Onchi, Public Works Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: Skypark Open Space Maintenance Assessment District Request for Engineering 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. Council must adopt a resolution instructing the City’s engineer to prepare and file a report with the City Clerk in accordance with Article 4, Chapter 1, Part 2, of the Landscaping and Lighting Act of 1972 for the 2025-2026 fiscal year.

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.

After completion of the Engineer’s Report, the City Council will consider the report and a resolution of intention to impose the annual assessments. It is expected that it will occur at the June 18th City Council Meeting. On August 6, 2025, the City Council will hold the public hearing and consider any protests to the imposition of the assessments. As required, all 190 owners will be notified via mail before the public hearing.

FISCAL IMPACT

No fiscal impact is associated with this action.

STAFF RECOMMENDATION
Staff recommends that Council adopt Resolution No. 1555-SP-037, a resolution of the City Council of the City of Scotts Valley instructing the City’s engineer to prepare and file a report with the City Clerk in accordance with Article 4, Chapter 1, Part 2, of the Landscaping and Lighting Act of 1972.

TABLE OF CONTENTS

1. Resolution No. 1555-SP-037 - Prepare Engineer Report for Skypark Assessment

RESOLUTION NO. 1555-SP-037

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY

DIRECTING THE CITY ENGINEER TO PREPARE THE SKYPARK OPEN SPACE MAINTENANCE ASSESSMENT DISTRICT ENGINEER’S REPORT
WHEREAS, the City of Scotts Valley has an assessment district which was created pursuant to the Landscaping and Lighting Act of 1972 (Streets and Highways Code § 22500); and
WHEREAS, assessments are to be levied and collected within the Skypark Open Space Maintenance Assessment District for the 2025-2026 fiscal year; and WHEREAS, the procedure for levy of annual assessments found in the California Streets and Highways Code Section 22500 et seq. requires that the City Council direct the City Engineer to prepare and file an appropriate report; and WHEREAS, the purpose of the District is for the landscape maintenance of the linear park and two greenbelt areas, and a self-insurance fund in the event of a slope failure.

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

1. That the City Engineer is hereby instructed to prepare and file a report with the City Clerk in accordance with Article 4, Chapter 1, Part 2, of the Landscaping and Lighting Act of 1972.

2. That this Resolution shall be effective immediately.

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 4th day of June 2025 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved: ____________________________
Derek Timm, Mayor
Attest: ___________________________
Cathie Simonovich, City Clerk

AGENDA ITEM 8.

DATE: 6/4/2025
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 6/4/2025
TO: Honorable Mayor and City Council
FROM: Rodolfo Onchi, Public Works Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: Award Contract to Rapid Grading Services for the Street Resurfacing and Pavement Repair Project and Authorize the City Manager to Enter into a Contract with Rapid Grading Services in an Amount Not to Exceed $1,854,000.

SUMMARY OF ISSUE
The City of Scotts Valley (City) released a formal invitation for bids for annual pavement maintenance and rehabilitation on various streets throughout the City, covering approximately 13 lane miles. The streets are shown on the map attached to this report. The scope of work will vary by location and may include the removal and replacement of failed pavement sections (dig-outs), asphalt grinding and overlay, slurry seal application, reconstruction of hot mix asphalt (HMA) dike, and the reinstallation of loop detectors. Additional work will include traffic control and temporary erosion control measures.

On May 23, 2025 the City received three bids for the Street Resurfacing and Pavement Repair Project. The lowest responsive and responsible bid was received by Rapid Grading Services with a total bid amount of $1,545,000.

Bidder Amount of Bid
Always Paving, Inc. $1,654,199.52 + $139,295.00 = $1,793,494.51

Rapid Grading Services $1,479,000.00 + $66,000.00 = $1,545,000.00

Graniterock $2,301,551.50 + $122,337.45 = $2,423,888.95

FISCAL IMPACT
Funding for this project is included in the FY 2025/26 Capital Improvement Program budget.

Staff recommends a not-to-exceed amount of $1,854,000, which includes a 20% contingency

($309,000) to cover unforeseen conditions or necessary change orders. The contingency portion would be funded through available special revenue funds.

STAFF RECOMMENDATION
Staff recommends that the City Council:

1. Select Rapid Grading Services as the lowest responsive and responsible bidder for the Street Resurfacing and Pavement Repair Project;

2. Authorize a 20% contingency, for a total not-to-exceed amount of $1,854,000 for the project;

3. Authorize the City Manager to execute the contract, in a form approved by the City Attorney, with Rapid Grading Services; and

4. Authorize the City Manager to approve change orders up to $309,000.

TABLE OF CONTENTS

1. Street Resurfacing and Pavement Repair Project Map - May 2025

2. Street Resurfacing & Pavement Repair Project Agreement - 05.28.25

CALL UTILITY NOTIFICATION CENTER OF

CALIFORNIA
Know what'sbelow.

Callbefore you dig.

R E N G I N E E R I N G / P U B L I C W O R K S SCOTTS VALLEY, CA 95066 ONE CIVIC CENTER DRIVE CITY of SCOTTS VALLEY FAX 831.439.9748 831.438.5854

CITY OF SCOTTS VALLEY

STREET RESURFACING AND PAVEMENT REPAIR
CIP# 25-001

1 CITY OF SCOTTS VALLEY

STATE OF CALIFORNIA

CONSTRUCTION AGREEMENT
THIS AGREEMENT, made and concluded that 29th day of May, 2025 between the CITY OF SCOTTS VALLEY, hereinafter called CITY, and Rapid Services, LLC, dba Rapid Grading Services, hereinafter called CONTRACTOR.

ARTICLE I. WITNESS TO, that for and in consideration of the payments and agreements hereinafter mentioned, to be made and performed by CITY, and under the conditions expressed in the bonds, bearing even date with these presents and hereunto annexed, CONTRACTOR agrees with CITY, at CONTRACTOR'S own proper cost and expense, to do all the work and furnish all the materials, except such as are mentioned in the specifications to be furnished by CITY, necessary to construct and complete the work of the improvement herein referenced in a good workmanlike and substantial manner and to the satisfaction of the CITY’S Director of Public Works, Street Resurfacing and Pavement Repair Project, in accordance with the Standard Provisions hereto annexed, and also in accordance with the General Prevailing Wage Rates as determined by the Department of Industrial Relations, which said Standard Provisions and General Prevailing Wage Rates are hereby specifically referred to and by such reference made a part hereof.

The work to be done is described in Section 1 "Description of Work" of the Standard Provisions, which said Standard Provisions are hereby made a part of this contract, and is shown upon the plans entitled Street Resurfacing and Pavement Repair Project, which said plans are hereby made a part of the contract. The work shall be completed 47 working days after issuance of notification to proceed.

ARTICLE II. CITY hereby promises and agrees with CONTRACTOR to employ, and does hereby employ, CONTRACTOR to provide the materials and to do the work according to the terms and conditions herein contained and referred to, for the prices set forth in the Bid of CONTRACTOR for the work to be constructed and completed under this Agreement, which prices shall be considered as though repeated herein, subject to additions and deductions as provided therein, and hereby contracts to pay the same at the time, in the manner upon the conditions herein set forth; and the said parties for themselves, their heirs, executors, administrators, successors and assigns, do hereby agree to the full performance of the covenants herein contained.

ARTICLE III. The statement of prevailing wages appearing in the General Prevailing Wage Rates is hereby specifically referred to and by this reference is made a part of this contract. It is further expressly agreed by and between the parties hereto that should there be any conflict between the terms of this instrument and the bid or proposal of said CONTRACTOR, then this instrument shall control, and nothing herein shall be considered as an acceptance of the said terms of said proposal conflicting herewith.

ARTICLE IV. By its signature hereunder, as CONTRACTOR, CONTRACTOR hereby certifies that it is aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workmen's compensation or to undertake self-insurance in accordance with the provisions of that code, and it will comply with such provisions before commencing the performance of the work of this contract.

ARTICLE V. CONTRACTOR shall be compensated for satisfactory completion of the work in compliance with the contract documents for the sum not to exceed $1,545,000.00 in accordance with the Bid Schedule outlined in the CONTRACTOR’S Bid and Bid Price Schedule, dated May 23, 2025.

CONTRACTOR agrees to receive and accept the prices as set forth in the Bid of CONTRACTOR for the work to be constructed and completed under this Agreement, which prices shall be considered as though repeated herein, subject to additions and deductions as provided therein, as full compensation for furnishing all materials and for doing all the work contemplated and embraced in this agreement; also, for all loss or damage arising out of the nature of the work aforesaid, or from the action of elements, or from any unforeseen difficulties or obstructions which may arise or be encountered in the prosecution of the work until its acceptance by CITY, and for all the risks of every description connected with the work; also, for all expenses incurred by or in consequence of the suspension or discontinuance of work; and for well and faithfully

2 completing the work, and the whole thereof, in the manner and according to the plans and specifications, and the requirements of Engineer.

ARTICLES VI. CONTRACTOR shall indemnify and save harmless and defend CITY, its elected officials, officers, agents, consultants, servants and employees, and each of them from and against:
(a) Any and all claims, demands, causes of action, damages, costs, expenses, losses or liabilities, in law or in equity, of every kind and nature whatsoever for, but not limited to, injury to or death of any person including CONTRACTOR, or any elected official, officer, agent, consultant, servant and/or employee of CITY or CONTRACTOR, and damages to or destruction of property of any person, including, but not limited to, CITY and/or CONTRACTOR and their elected officials, officers, agents, consultants, servants and/or employees, arising out of or in any manner directly or indirectly connected with the work to be performed under this agreement, however caused, regardless of any negligence of CITY or its elected officials, officers, agents, consultants, servants or employees, except the sole negligence or willful misconduct of CITY or its elected officials, officers, agents, consultants, servants or employees, or the active negligence of CITY, its elected officials, officers, agents, consultants, servants or employees; (b) and any and all actions, proceedings, damages, costs, expenses, penalties or liabilities, in law or equity, of every kind or nature whatsoever, arising out of, resulting from, or on account of the violation of any governmental law or regulation, compliance with which is the responsibility of CONTRACTOR.

CONTRACTOR shall, at CONTRACTOR'S own cost, expense and risk, defend any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against CITY or CITY’S elected officials, officers, agents, consultants, servants or employees.

CONTRACTOR shall pay and satisfy and judgment, award or decree that may be rendered against CITY or its elected officials, officers, agents, consultants, servants or employees, in any such suit, action or other legal proceedings;
CONTRACTOR shall reimburse CITY and its elected officials, officers, agents, consultants, servants and employees for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided.

ARTICLE VII. Prior to the commencement of any work, CONTRACTOR shall provide CITY with evidence that it has obtained insurance and Performance and Payment Bonds satisfying all requirements outlined in the Insurance Certificate. Failure to do so shall be deemed a material breach of this Construction Contract.

ARTICLE VIII. The complete contract for the work of improvement herein referenced consists of the following documents, all of which are hereby expressly made a part hereof and incorporated herein by this reference.

CONTRACTOR shall be bound by the requirements and obligations of such documents.

1. Notice To Bidders

2. Construction Agreement

3. Bond for Faithful Performance

4. Bond of Security of Laborers and Material Person

5. Proposal

6. General Provisions

7. Contractor’s Bid and Bid Price Schedule

8. Public Contract Code Section 10162 Questionnaire

9. Public Contract Code Section 10232 Statement

10. Public Contract Code Section 10285.1 Statement

11. Noncollusion Affidavit

12. Bidder’s Bond

13. Standard Provisions

14. Standard Specifications dated 2024 and Standard Plans dated 2024 of the California Department of Transportation

3 15. Labor Surcharge and Equipment Rental Rates and the General Prevailing Wage Rates as determined by the California Department of Transportation Division of Construction (all as referenced herein)

16. Technical specifications

17. Plans entitled,

18. Insurance Certificate

19. Information for Bidders
IN WITNESS WHEREOF, CITY has caused these presents to be executed by its officers hereunto duly authorized, and CONTRACTOR has subscribed same, all on the day and year first above written.

CONTRACTOR
By:

Date:

License No:

FOR CITY OF SCOTTS VALLEY
By: Date:

Mali LaGoe, City Manager
ATTEST:

By: Date:

Cathie Simonovich, City Clerk
APPROVED AS TO FORM:

By: Date:

Kirsten Powell, City Attorney

4 BOND NO. __________

CITY OF SCOTTS VALLEY

STATE OF CALIFORNIA

BOND FOR FAITHFUL PERFORMANCE
WHEREAS, the City Council of the City of Scotts Valley, State of California, and Rapid Grading Services, (herein designated as "Contractor") have entered into an agreement whereby contractor agrees to install and complete certain designated public improvements, which said agreement dated May 29, 2025 identified as Construction Agreement, (the “Agreement”) is hereby referred to and made a part hereof; and WHEREAS, Contractor is required under the terms of the Agreement to furnish a bond for the faithful performance of the Agreement.

NOW, THEREFORE, WE, the principals and ____________________________________, as surety, are held and firmly bound unto the City of Scotts Valley, hereinafter called "City", in the penal sum of _________________________ Dollars ($_____________________) lawful money of the United States for the payment of which sum, well and truly made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, firmly by these presents.

The condition of this obligation is such that if above-bounded Contractor, or their heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions in the said Agreement and any alteration thereof made as therein provided, on their part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless City, its officers, agents and employees, as therein stipulated, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect.

As part of the obligation secured hereby and in addition to the face amount specified therefore, there shall be included costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by City in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered.

The surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Agreement or to the work to be performed thereunder or the specifications accompanying the same shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the agreement or to the work or to the specifications.

The surety shall provide City with thirty (30) days’ written notice of Contractor’s default prior to the surety terminating, suspending or revoking the bond.

IN WITNESS WHEREOF, this instrument has been duly executed by the principals and surety above names, on ______________________, 20__.
__________________________________ _____________________________ Surety
__________________________________ _____________________________ Attorneys in Fact
__________________________________ _____________________________ Principal
__________________________________ _____________________________ Principal

5 BOND NO. __________

CITY OF SCOTTS VALLEY

STATE OF CALIFORNIA

BOND FOR SECURITY OF LABORERS AND MATERIAL PERSON
WHEREAS, the City Council of the City of Scotts Valley, State of California, and Rapid Grading Services, (herein designated as "principals") have entered into an agreement whereby principals agrees to install and complete certain designated public improvements, which said agreement dated May 29, 2025, and identified as Construction Agreement, (the “Agreement”) is hereby referred to and made a part hereof; and WHEREAS, under the terms of said Agreement, principals are required before entering upon the performance of the work, to file a good and sufficient payment bond with the City of Scotts Valley to secure the claims to which reference is made in Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the Civil Code of the State of California.

NOW, THEREFORE, said principals and the undersigned as corporate surety, are held firmly bound unto the City of Scotts Valley and all contractors, subcontractors, laborers, material person and other persons employed in the performance of the aforesaid Agreement and referred to in the aforesaid Civil Code in the sum of One Million, Five Hundred, Forty-Five Thousand Dollars ($1,545,000.00), for materials furnished or labor thereon of any kind, or for amounts due under the Unemployment Insurance Act with respect to such work or labor, that said surety will pay the same in an amount not exceeding the amount herein above set forth, and also in case suit is brought upon this bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees including reasonable attorney's fees, incurred by City in successfully enforcing such obligation to be awarded and fixed by the Court and to be taxed as costs and to be included in the judgment therein rendered.

IT IS HEREBY EXPRESSLY STIPULATED AND AGREED that this bond shall inure to the benefit of any and all persons, companies and corporations entitled to file claims under Title 15 (commencing with Section 3082) of Part 4 Division 3 of the right to action to them or their assigns in any suit brought upon this bond.

Should the condition of this bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full force and effect. Surety shall provide City with thirty (30) days’ written notice of Principal’s default prior to Surety terminating, suspending or revoking the bond.

The surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of said Agreement or the specifications accompanying the same shall in any manner affect its obligations on this bond, and it does hereby waive notice of any such change, extension, alteration or addition.

IN WITNESS WHEREOF, this instrument has been duly executed by the principals and surety above names, on ______________________, 20__.
__________________________________ _____________________________ Surety
__________________________________ _____________________________ Attorneys in Fact
__________________________________ _____________________________ Principal

AGENDA ITEM 1.

DATE: 6/4/2025
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 6/4/2025
TO: Honorable Mayor and City Council
FROM: Rodolfo Onchi, Public Works Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: Fiscal Year 2025 - 2026 SB 1 Projects

SUMMARY OF ISSUE
On April 28, 2017, the Governor signed Senate Bill (SB) 1, which is known as the Road Repair and Accountability Act of 2017. SB 1 was passed by the legislature as a means of providing additional funding for basic road maintenance, rehabilitation and critical safety needs on both state highways and local streets and road system. SB 1 increases per gallon fuel excise taxes, diesel fuel excise taxes and vehicle registration fees, and provides for adjustments for inflation in future years.

The California Transportation Commission (CTC) has set July 1st, 2025, as the deadline for cities to submit a list of projects to be funded with Road Maintenance and Rehabilitation Account (RMRA) funds. The City expects to receive approximately $316,652 in FY 2025/26. As part of the proposed FY 2025/26 Capital Improvement Program (CIP), staff recommends the following project/s be funded with RMRA funds:

STREET NAME LOCATION TREATMENT
Granite Creek Overcrossing Granite Creek Rd between
Scotts Valley Drive and
Santa's Village Rd
Granite Creek Overcrossing
improvements; e.g.
pavement, sidewalk, retaining
wall, guardrail, and traffic
signal modifications.

Annual Street Maintenance/
Resurfacing
Hacienda Drive from Cumbre
Lane to Glenwood Drive,
Civic Center Drive, Tabor
Way and Lundy Lane
Repair damaged areas, crack
seal, surface seal, re-stripe
Scotts Valley Drive – Corridor
Improvements
Scotts Valley Drive Mount
Hermon Road to Bethany
Drive
Pavement resurfacing and
buffered bike lanes.

These projects are selected based on the City’s 2023 Pavement Management Report. The

report lists the streets that need pavement preservation based on a PCI (pavement condition Index) classification. The PCI evaluates which streets are in the worst condition and allows staff to prioritize each location. These funds will provide funding for the streets addressed above as well as any shortfall in previously approved pavement projects.

Both previously proposed and adopted projects were initially individual projects which are now a part of the “Annual Street Maintenance/Resurfacing” project above.

The project list submitted to the CTC does not limit flexible use of funds, provided that funds are only used for eligible projects – the City can fund projects in a given year not on the project list or not fund projects that were on the project list. As required by SB1, the City will also prepare a report at the end of the fiscal year detailing the actual expenditure of SB1 funds during the year including the projects funded and the amount of funding expended.

FISCAL IMPACT
SB1 will provide RMRA funds totaling approximately $316,652. Fund allocations in FY 2025/26 will be used for project construction. RMRA funds are supplemental to current City funding sources.

STAFF RECOMMENDATION
Staff recommends that Council adopt Resolution No. 1946.7, a resolution of the City Council of the City of Scotts Valley incorporating a list of projects to be funded by SB-1:

The Road Repair and Accountability Act for Fiscal Year 2025/26.

TABLE OF CONTENTS

1. SB1 2025-2026 – Resolution No. 1946.7

RESOLUTION NO. 1946.7
RESOLUTION ADOPTING A LIST OF PROJECTS FOR FISCAL YEAR 2025/26 FUNDED BY SB 1: THE ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017
WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and Signed into law by the Governor in April 2017 to address the significant multi-modal transportation funding shortfalls statewide; and
WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of the City of Scotts Valley are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year; and WHEREAS, the City of Scotts Valley must adopt by resolution a list of projects proposed to receive fiscal year funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and
WHEREAS, the City of Scotts Valley, will receive an estimated $316,652 in RMRA funding in Fiscal Year 2025/26 from SB 1; and
WHEREAS, this is the 9th year in which the City of Scotts Valley is receiving SB 1 funding and will enable the City to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options for the traveling public that would not have otherwise been possible without SB 1; and
WHEREAS, the City of Scotts Valley has undergone a robust public process to ensure public input into our community’s transportation priorities/the project list; and WHEREAS, the City of Scotts Valley used a Pavement Management System to develop the SB 1 project list to ensure revenues are being used on the most high-priority and costeffective projects that also meet the community’s priorities for transportation investment; and WHEREAS, the funding from SB 1 will help the City of Scotts Valley maintain and rehabilitate street and roads throughout the City this year and similar projects into the future; and
WHEREAS, the 2018 California Statewide Local Streets and Roads Needs Assessment found that the City’s streets and roads are in an “at lower risk” condition and this revenue will help us increase the overall quality of our road system and over the next decade will keep our streets and roads in said condition; and

WHEREAS, the SB 1 project list and overall investment in our local streets and roads infrastructure with a focus on basic maintenance and safety, investing in complete streets infrastructure, and using cutting-edge technology, materials and practices, will have significant positive co-benefits statewide.

NOW, THEREFORE IT IS HEREBY RESOLVED, ORDERED AND FOUND by the City Council of the City of Scotts Valley, as follows:

1. The foregoing recitals are true and correct.

2. The following list of newly proposed projects that will be funded in-part or solely with Fiscal Year 2025/26 Road Maintenance and Rehabilitation Account revenues:

Project Title: Granite Creek Overcrossing
Project Description: Granite Creek Overcrossing improvements; e.g. pavement, sidewalk, retaining wall, guardrail, and traffic signal modifications.

Project Location: Granite Creek Rd between Scotts Valley Drive and Santa's Village Rd
Estimated Project Schedule: Spring 2027 – Summer 2028
Project Title: Annual Street Maintenance/Resurfacing – FY25/26 Project Description: Repair damaged areas, crack seal, surface seal, re-stripe Project Location: Hacienda Drive from Cumbre Lane to Glenwood Drive, Civic Center Drive, Tabor Way and Lundy Lane.

Useful Life: 8-10 Years
Estimated Project Schedule: Spring 2025 – Summer 2025
Project Title: Scotts Valley Drive – Corridor Improvements Project Description: Pavement resurfacing and buffered bike lanes.

Project Location: Scotts Valley Drive Mount Hermon Road to Bethany Drive Useful Life: 7-10 Years
Estimated Project Schedule: Spring 2026 – Summer 2026

3. The following previously proposed and adopted projects may also utilize Fiscal Year 2025-2026 Road Maintenance and Rehabilitation Account revenues in their delivery.

With the relisting of these projects in the adopted fiscal year resolution, the City of Scotts Valley is reaffirming to the public and the State our intent to fund these projects with Road Maintenance and Rehabilitation Account revenues:

Both previously proposed and adopted projects were initially individual projects, which are now a part of the “Annual Street Maintenance/Resurfacing” project above.

The above and foregoing resolution as duly and regularly adopted by the City Council of the City of Scotts Valley at a regular meeting held on the 4th day of June, 2025 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved:

Derek Timm, Mayor
Attest:

Cathie Simonovich, City Clerk

AGENDA ITEM 2.

DATE: 6/4/2025
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 6/4/2025
TO: Honorable Mayor and City Council
FROM: Rodolfo Onchi, Public Works Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: Measure D Five-Year Plan (2025-2030)

SUMMARY OF ISSUE
Passed in November 2016 by Santa Cruz County Voters, Measure D provides funding for efforts related to maintaining and improving local roads, including pavement, bicycle, and pedestrian infrastructure for a period of 30 years. As a part of the measure’s accountability and transparency measures, each agency receiving funds is required to develop, update, hold a public hearing on, and adopt a five-year program of projects (“5-Year Plan”) every year. 5-Year Plans are adjusted annually based on actual expenditures, updated revenue projections, proposed allowances to projects, updated project schedules, and updated cost estimates.

FISCAL IMPACT
Measure D will fund or partially fund projects on the 5-Year Plan, and will be used to help leverage additional grant funding by serving as local match.

STAFF RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 1923.8 approving the list of Measure D Projects for FY25-26 through FY29-30.

TABLE OF CONTENTS

1. FY 25-26 Measure D Resolution No. 1923.8

2. FY25-30 Measure D Project List

RESOLUTION NO. 1923.8

RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF SCOTTS VALLEY APPROVING THE
FY 2025/26 TO FY 2029/30 FIVE-YEAR PROGRAM OF

PROJECTS TO BE FUNDED WITH MEASURE D REVENUES
WHEREAS, on November 8, 2016, the voters of Santa Cruz County adopted an ordinance approving the Santa Cruz County Transportation Improvement Plan Measure (“Measure D”), authorizing the Santa Cruz County Regional Transportation Commission (“RTC”) to administer the proceeds from a retail transaction and use tax of one-half of one percent (0.5%); and
WHEREAS, sales tax proceeds from Measure D will be collected for 30 years beginning April 1, 2017, which are to be used to pay for the programs and projects outlined in the Measure D Expenditure Plan and Ordinance; and
WHEREAS, the Master Funding Agreement between RTC and the City of Scotts Valley articulates the terms and conditions of RTC’s administration and direct allocation of proceeds to the City as authorized in the Measure D Expenditure Plan; and WHEREAS, the Master Funding Agreement requires that the City Council annual adopt an annual report that includes a five-year program of projects including information about each of the projects to be funded with Measure D revenues after holding a public hearing; and
WHEREAS, the five-year program of projects is considered part of the City’s Five-Year Capital Improvement Plan, which was published for public review on the City’s website on May 30, 2025 and reviewed during a public hearing at the City Council’s regular meeting on June 4, 2025; and
WHEREAS, the five-year program of projects, attached hereto and incorporated herein, lists the projects proposed by the City that are consistent with the Measure D Expenditure Plan.

NOW, THEREFORE, BE IT RESOLVED AND ORDERED that the FY 2025/26 to FY 2029/30 Five-Year Program of Projects to be funded with Measure D revenues, attached hereto and incorporated herein, is approved.

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 4th day of June, 2025, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved: ___________________________
Derek Timm, Mayor
Attest:

Cathie Simonovich, City Clerk

Rollover FY26/27 FY27/28 FY28/29 FY29/30
$ 618,507 $ 391,000 $ 403,000 $ 417,000 $ 429,000
Name/Road/Limits Total Measure D Rollover FY26/27 FY27/28 FY28/29 FY29/30 Other Funds ($)
Other Fund
Sources
Est.

Constructio
n Start Date
Major
Project?
(yes/no)
Scotts Valley Drive $ 550,000 $ 275,000 $ 1,225,000 RTC, SB1, Gas Tax
Summer
25/26
yes
Mount Hermon Road Improvements $ 400,000 $ 200,000 $ 523,000 RTC Grant Summer 25/26
yes
Annual Street Maintenance $ 1,176,840 $ 143,507 $ 200,000 $ 333,333 $ 2,333,333 Gas Tax/ SB1 ongoing yes Janis Way Digout, Overlay, Sidewalk,
Bike Lanes
$ 250,000 $ 250,000 Summer
28/29
no
Lockwood Lane (Mt Hermon to
City Limit)
$ 100,000 $ 100,000 Summer
28/29
no
Estimated Annual Measure D Expenditures $ 200,000 $ 350,000 $ 333,333 $ - Carryover to next Fiscal Year $ 618,507 $ 214,507 $ 267,507 $ 351,174 $ 780,174 Annual Interest Earnings on Measure D Revenues
Description, Complete Streets Components FY25/26
Measure D Five Year Plan
Measure D: 5-Year Program of Projects (FY25/26-FY29/30) Agency: City of Scotts Valley
Expenditure Plan Category: Neighborhood Projects
Estimated Annual Measure D Allocations
Measure D Revenues
FY25/26
$ 380,000
Digouts, manholes, surface seal, ATP improvements $ 275,000 Digouts & crack seal & slurry & La Madronna
intersection rework
$ 200,000
Amount of Measure D Funds to be Used
Annual street maintenance citywide consisting of surface seals, overlays and repairs
$ 500,000
Digout, Overlay, Sidewalk, Bike Lanes
Digouts and overlay and striping and bike lanes
$ 975,000
$ 23,507

AGENDA ITEM 3.

DATE: 6/4/2025
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 6/4/2025
TO: Honorable Mayor and City Council
FROM: Taylor Bateman, Community Development Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: A public hearing to consider the Planning Commission's recommendation to 1) amend the Scotts Valley Municipal Code Title 16 (Subdivisions), Title 17 (Zoning), General Plan Land Use and Mobility Elements, and SB 9 Standards to implement the 2023-2031 Housing Element of the General Plan; and 2) adopt an Addendum to the General Plan EIR for the proposed amendments in compliance with the California Enviornmental Quality Act (CEQA)

SUMMARY OF ISSUE
In December of 2023, the City Council adopted the 2023-2031 Housing Element of the General Plan (Housing Element). The Housing Element identifies actions that the City must complete by the end of 2025 to remain in compliance with state housing laws. Among these actions are amendments to the Scotts Valley Subdivision Ordinance (Municipal Code Title 16), Zoning Code (Municipal Code Title 17), General Plan Land Use Element and Mobility Element, and SB 9 Public Health and Safety and Environmental Resource Protection Standards.

Included in these amendments are rezonings to provide adequate sites to accommodate the City’s regional housing needs allocation (RHNA) for the 2023-2031 Housing Element planning period.

PLANNING COMMISSION REVIEW
The Planning Commission held a study session on March 13, 2025, to provide preliminary input on the proposed amendments. On May 15, 2025, the Planning Commission reviewed the proposed amendments and recommended their adoption to the City Council. A discussion of the proposed amendments is provided in the attached Planning Commission staff report (Attachment 5). Attachment 1 of the Planning Commission staff report includes a red-lined version of the proposed amendments.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
To comply with the California Environmental Quality Act (CEQA), an Addendum to the General Plan Update EIR was prepared for the proposed amendments to implement the Housing Element. Under CEQA, the City may prepare an EIR Addendum if the proposed amendments would not create new or substantially more severe environmental impacts than analyzed in the

General Plan Update EIR. Attachment 1 Exhibit A provides the Draft EIR Addendum for the proposed amendments, which concludes that the amendments would not result in any significant impacts not considered under the General Plan Update EIR, and that additional environmental review of the amendments is not required.

PUBLIC NOTICE & COMMENT
On May 23, 2025, public hearing notices were posted at City Hall, the Scotts Valley Public Works Building, and the Scotts Valley Senior Center, and published on the Scotts Valley website and in the newspaper, consistent with State law. As of this date, no comments have been received.

FISCAL IMPACT
There is no fiscal impact associated with the recommended action.

STAFF RECOMMENDATION
The Planning Commission recommends the City Council:

1. Adopt Resolution No. 1119.37 to adopt the Addendum to the General Plan Update EIR for the Proposed Amendments to implement the Housing Element.

2. Adopt Resolution No. 1119.38 to amend the General Plan to maintain consistency with the amended Zoning Code and clarify unit development regulations for properties accessed solely from Highway 17.

3. Adopt Ordinance No. 16.142.1 with amendments to Municipal Code Title 16 (Subdivisions) and Title 17 (Zoning) to implement the Housing Element.

4. Adopt Resolution No. 2046.1 to amend SB 9 Public Health and Safety and Environmental Resource Protection Standards.

TABLE OF CONTENTS

1. Attachment 1 - Resolution No. 1119.37 CEQA Addendum

2. Attachment 2 - Resolution No. 1119.38 General Plan Amendments 2025

3. Attachment 3 - Ordinance No. 16.142.1 Municipal Code Amendments 2025

4. Attachment 4 - Resolution No. 2046.1 SB 9 Standards

5. Attachment 5 - Planning Commission Staff Report 5-15-2025

RESOLUTION NO. 1119.37

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTS VALLEY

APPROVING THE ADDENDUM TO THE GENERAL PLAN UPDATE EIR FOR THE PROPOSED AMENDMENTS TO IMPLEMENT THE 2023-2031 HOUSING ELEMENT

OF THE GENERAL PLAN
WHEREAS, on November 29, 2023 the City Council certified the Environmental Impact Report (EIR) (SCH 2020070330) for the General Plan Update in compliance with the California Environmental Quality Act;
WHEREAS, on December 20, 2023, the City Council adopted the 2023-2031 Housing Element of the General Plan (Housing Element);
WHEREAS, the Housing Element contains programs that call for the City to amend Municipal Code Title 17 (Zoning Code) to implement Housing Element goals and policies;
WHEREAS, amendments to the Scotts Valley Municipal Code Title 17 (Zoning), Title 16 (Subdivisions), SB 9 Standards, and General Plan Land Use Element (“Proposed Amendments”) were prepared to implement the Housing Element; WHEREAS, an Addendum to the General Plan Update EIR was prepared for the Proposed Amendments in accordance with Section 15162 of the California Environmental Quality Act (CEQA) Guidelines. The EIR Addendum demonstrates that none of the conditions requiring preparation of a subsequent EIR or negative declaration have occurred, and that the Proposed Amendments would not result in any significant impacts not considered under the original EIR;
WHEREAS, on May 15, 2025 the Planning Commission adopted Resolution No. 1804 recommending the City Council approve the Addendum to the General Plan Update EIR; and
WHEREAS, the City Council held a duly noticed public hearing on June 4, 2025 on the Addendum to the General Plan Update EIR at which the public were granted an opportunity to provide oral and written testimony.

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

1. The above recitals are true and correct and incorporated herein by reference.

2. The City Council has reviewed and considered the Addendum to the General Plan Update EIR for the Proposed Amendments and finds that none of the conditions requiring preparation of a subsequent EIR or negative declaration have occurred and that the Proposed Amendments would not result in any significant impacts not

considered under the original EIR. No supplemental or subsequent EIR is required because none of the circumstances requiring a supplemental or subsequent EIR exist (CEQA Guidelines Section 15162):
(a) No substantial changes are proposed in the project which will require major revisions of the previous EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. The proposed amendments do not create any additional environmental impacts.
(b) No substantial changes have occurred with respect to the circumstances under which the project is undertaken. No substantial evidence has been submitted showing any change in the circumstances applicable to the project.
(c) No new information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the previous EIR was certified as complete, has been submitted to the City.

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 4 th day of
June, 2025, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved: ___________________________
Derek Timm, Mayor
Attest: ___________________________
Cathie Simonovich, City Clerk

Addendum to the General Plan EIR
for the 6th Cycle Housing Element – 2025 Implementation Actions

EXHIBIT A

City of Scotts Valley Addendum to the General Plan EIR for the 6th Cycle Housing Element 2025 Implementation Actions
Table of Contents | Page i
May 2025
Table of Contents
1 Introduction 1-1

1.1 Statutory Authority and Requirements ..................................................................................... 1-1

1.2 Purpose of an Initial Study ......................................................................................................... 1-3

1.3 Responsible and Trustee Agencies............................................................................................. 1-4

1.4 Incorporation By Reference....................................................................................................... 1-4 2 Project Background and Context 2-1

2.1 Project Location ......................................................................................................................... 2-1

2.2 Environmental Setting ............................................................................................................... 2-1

2.3 General Plan and Zoning Designations...................................................................................... 2-1

2.4 Purpose and Organization of the Housing Element................................................................... 2-1

2.5 Regional Housing Needs Assessment ........................................................................................ 2-3

2.6 Residential Sites Inventory......................................................................................................... 2-4 3 Project Description 3-1

3.1 Rezone Sites to Meet the RHNA ................................................................................................ 3-1

3.2 Citywide Residential Development Constraints......................................................................... 3-2

3.3 Affirmatively Furthering Fair Housing (AFFH)............................................................................ 3-3

3.4 Other Miscellaneous Amendments........................................................................................... 3-5

3.5 Project Implementation............................................................................................................. 3-6

3.6 Permits and Approvals............................................................................................................... 3-7 4 Supplemental Environmental Checklist Form 4-1
5 Environmental Analysis 5-1

5.1 Aesthetics................................................................................................................................... 5-6

5.2 Agriculture and Forestry Resources........................................................................................... 5-9

5.3 Air Quality ................................................................................................................................ 5-10

5.4 Biological Resources................................................................................................................. 5-16

5.5 Cultural Resources................................................................................................................... 5-20

5.6 Energy ...................................................................................................................................... 5-22

5.7 Geology and Soils..................................................................................................................... 5-23

5.8 Greenhouse Gas Emissions...................................................................................................... 5-27

5.9 Hazards and Hazardous Materials ........................................................................................... 5-29

5.10 Hydrology and Water Quality .................................................................................................. 5-32

5.11 Land Use and Planning............................................................................................................. 5-35

5.12 Mineral Resources ................................................................................................................... 5-37

5.13 Noise ........................................................................................................................................ 5-38

5.14 Population and Housing........................................................................................................... 5-41

5.15 Public Services.......................................................................................................................... 5-43

5.16 Transportation ......................................................................................................................... 5-46

5.17 Tribal Cultural Resources......................................................................................................... 5-49

5.18 Utilities and Service Systems ................................................................................................... 5-52

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5.19 Wildfire..................................................................................................................................... 5-55

5.20 Mandatory Conclusion of Significance..................................................................................... 5-59 List of Tables
Table 1 Regional Housing Needs Allocation 2023-2031
Table 2 6th Cycle RHNA Sites Inventory Analysis
Table 3 Comparison of Existing and Project Rezoning Residential Units and Population Capacity List of Figures
Figure 1 Regional Location
Figure 2 6th Cycle Housing Element Sites Inventory – All Sites Figure 3 Residential Rezone Sites
Figure 4 Mixed-Use Rezone Sites
Figure 5 Racially Concentrated Areas of Affluence (RCAAs) Note: All figures are inserted at the end of the document.

List of Appendices
None.

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1 Introduction
The Scotts Valley General Plan 6th Cycle Housing Element 2023-2031 (Housing Element) requires that the City adoption and implementation of a number of amendments to the Zoning Ordinance to implement various Housing Element programs (the Project). The City of Scotts Valley has determined that the Project is subject to the guidelines and regulations of the California Environmental Quality Act (CEQA) and has prepared this Addendum to the City’s General Plan EIR.

1.1 Statutory Authority and Requirements
This environmental document has been prepared in conformance with CEQA (California Public Resources Code [PRC] Section 21000 et seq.); CEQA Guidelines (California Code of Regulations [CCR], Title 14, Section 15000 et seq.); and the rules, regulations, and procedures for implementation of CEQA, as adopted by the City of Scotts Valley.

In accordance with CEQA Guidelines Sections 15051 and 15367, the City of Scotts Valley (City) is identified as the Lead Agency for the Project. This document has been prepared in accordance with CEQA Guidelines Sections 15164 (Addendum to an EIR on Negative Declaration) and 15168 (Program EIR) to explain the rationale for determining that the proposed 6th Cycle Housing Element 2023-2031 would not create any new or substantially more severe significant effects on the environment that were not analyzed in the Scotts Valley General Plan Update Environmental Impact Report (EIR).

In determining whether an Addendum is the appropriate document to analyze modifications to the General Plan EIR, CEQA Guidelines Section 15164 states:
a) The lead agency or responsible agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in Section 15162 calling for preparation of a subsequent EIR have occurred. b) An addendum to an adopted negative declaration may be prepared if only minor technical changes or additions are necessary or none of the conditions described in Section 15162 calling for the preparation of a subsequent EIR or negative declaration have occurred.
c) An addendum need not be circulated for public review but can be included in or attached to the final EIR or adopted negative declaration. d) The decision-making body shall considerthe addendum with the final EIR or adopted negative declaration prior to making a decision on the project. e) A brief explanation of the decision not to prepare a subsequent EIR pursuant to Section 15162 should be included in an addendum to an EIR, the lead agency’s required findings on the project, or elsewhere in the record. The explanation must be supported by

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substantial evidence.

Since the Scotts Valley General Plan EIR has been certified, the environmental impacts of subsequent activities proposed underthe General Plan must be examined in light of the impact analysisin the certified EIR to determine if additional CEQA documentation must be prepared.

One of the standards that applies is whether, under Public Resources Code Section 21166 and CEQA Guidelines Sections 15162, there are new significant effects or other grounds that require preparation of a subsequent EIR in support of further agency action on the project. Under these guidelines, a subsequent EIR shall be prepared if any of the following criteria are met:
a) When an EIR has been certified or negative declaration adopted for a project, no subsequent EIR shall be prepared for that project unless the lead agency determines, on the basis of substantial evidence in light of the whole record, one or more of the following:
1) Substantial changes are proposed in the project which will require major revisions of the previous EIR or negative declaration due to the involvement of significant new environmental effects or a substantial increase in the severity of previously identified significant effects;
2) Substantial changes occur with respect to the circumstances under which the project is undertaken which will require major revisions of the previous EIR or negative declaration due to the involvement of significant new environmental effects or a substantial increase in the severity of previously identified significant effects; or 3) New information of substantial importance, which was not known and count not have been known with the exercise of reasonable diligence at the time the previous EIR was certified as complete or the negative declaration was adopted, shows any of the following:

A. The Project will have one or more significant effects not discussed in the previous EIR or negative declaration;
B. Significant effects previously examined will be substantially more severe than shown in the previous EIR;
C. Mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects of the project, but the project proponents decline to adopt the mitigation measure or alternative; or
D. Mitigation measures or alternatives which are considerably different from those analyzed in the previous EIR would substantially reduce one or more significant effects on the environment, but the project proponents decline to adopt the mitigation measure or alternative.

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As demonstrated in the environmental analysis contained herein in the Addendum, none of the conditions that had been analyzed in the Scotts Valley General Plan EIR would change with adoption of the proposed 6th Cycle Housing Element 2023-2031. Furthermore, no new information of substantial importance meeting the criteria listed in CEQA Guidelines Section 15162 has been identified in the environmental analysis.

The environmental documentation (supported by the Initial Study, below), which is ultimately selected by the City in accordance with CEQA, is intended as an informational document undertaken to provide an environmental basisforsubsequent discretionary actions relevant to the project. The resulting documentation is not, however, a policy document and its approval and/or certification neither presupposes nor mandates any actions on the part of those agencies from whom permits and other discretionary approvals would be required.

1.2 Purpose of an Initial Study
The purposes of an Initial Study are to:

1. Identify environmental impacts;

2. Provide the lead agency with information to use as the basis for deciding whether to prepare an EIR or a negative declaration;

3. Enable an applicant or lead agency to modify a project, mitigating adverse impacts before an EIR is required to be prepared;

4. Facilitate environmental assessment early in the design of the project;

5. Document the factual basis of the finding in a negative declaration that a project would not have a significant environmental effect;

6. Eliminate needless EIRs;

7. Determine whether a previously prepared EIR could be used for the project; and

8. Assist in the preparation of an EIR, if required, by focusing the EIR on the effects determined to be significant, identifying the effects determined not to be significant, and explaining the reasons for determining that potentially significant effects would not be significant.

CEQA Guidelines Section 15063 identifiesspecific disclosure requirementsfor inclusion in an Initial Study. Pursuant to those requirements, an Initial Study shall include:
 A description of the project, including the location of the project  Identification of the environmental setting
 Identification of environmental effects by use of a checklist, matrix, or other method, provided that entries on a checklist or other form are briefly explained to indicate that there is some evidence to support the entries

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 Discussion of ways to mitigate significant effects identified, if any  Examination of whether the project is compatible with existing zoning, plans, and other applicable land use controls
 The name(s) of the person(s) who prepared or participated in the preparation of the Initial Study

9. With regardsto the context of an Addendum, the Initial Study serves as the basis for substantial evidence that none of the elements of CEQA Guidelines Section 15162 requiring a subsequent EIR are triggered.

1.3 Responsible and Trustee Agencies
Certain projects or actions undertaken by a Lead Agency require subsequent oversight, approvals, or permitsfrom other public agencies in order to be implemented. Such other agencies are referred to as Responsible Agencies and Trustee Agencies. Pursuant to CEQA Guidelines Sections 15381 and 15386, as amended, Responsible Agencies and Trustee Agencies are respectively defined as follows:
“Responsible Agency” means a public agency, which proposesto carry out or approve a project, for which [a] Lead Agency is preparing or has prepared an EIR or Negative Declaration. For the purposes of CEQA, the term “responsible agency” includes all public agencies other than the Lead Agency, which have discretionary approval power over the project. (Section 15381) “Trustee Agency” means a state agency having jurisdiction by law over natural resources affected by a project, which are held in trust for the people of the State of California. Trustee Agencies include; The California Department of Fish and Wildlife, The State Lands Commission; The State Department of Parks and Recreation and The University of California with regard to sites within the Natural Land and Water Reserves System. (Section 15386) For this project, the City of Scotts Valley isthe Lead Agency and hasthe sole responsibility of processing and approving the project. There are no Responsible or Trustee Agencies that have oversight, approval, or permit responsibility associated with the project, or require consultation with the City of Scotts Valley. In addition, no other agency is required to approve the Housing Element, but it has been reviewed by the California Department of Housing and Community Development for the purpose of determining whether it complies with the requirements of State Housing Element law.

1.4 Incorporation By Reference
Pertinent documents relating to this Initial Study have been cited in accordance with CEQA Guidelines Section 15150, which encourages incorporation by reference as a means of reducing

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redundancy and length of environmental reports. The following documents are hereby incorporated by reference into this EIR. Information contained within these documents has been utilized for this Initial Study. These documents are available for review at the City of Scotts Valley Community Development Department, and online.

1.4.1 Scotts Valley General Plan
The Scotts Valley General Plan (General Plan) is the City's "blueprint" for all future development and conservation within the community. The General Plan is organized into four main categories. These categories and their respective General Plan element(s) are shown below:

General Plan Category General Plan Element(s)
Built Environment
Land Use
Economic Development
Housing
Mobility Mobility
Natural Environment Open Space & Conservation
Environmental Review 1
Community Community Services & Facilities
Public Safety & Noise
Each element, within the four categories, contains a brief background section, following by a set of goals, policies and actions.

CEQA Review
Chapter 8 Environmental Review, in combination with other elements of the General Plan document, serves as the Draft EIR (DEIR) for the project and provides the environmental information and analysis and primary California Environmental Quality Act (CEQA) documentation necessary to adequately consider the effects of the updated General Plan. The update did not incorporate major changes in land use (i.e., General Plan Land Use designations) and brought the City’s General Plan in compliance with current State Law. It also incorporated policies designed to minimize environmental impacts (i.e., “self-mitigating).

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To minimize the need to re-analyze future development projects related to SVGP, CEQA encourages using a general plan EIR to address subsequent discretionary projects, such as adopting zoning ordinances and specific plans and approving capital improvement or development projects that are consistent with the general plan. This streamlined approach to environmental review is commonly called “tiering” (CEQA Guidelines §15152). By using a tiered approach, the environmental review for a subsequent project can be limited to those projectspecific significant effects that either were not examined or not examined fully in SVGP Program EIR. Later activities that have been described adequately under the SVGP Program EIR will not require additional environmental documents.

When necessary, new environmental documents, such as a subsequent or supplemental EIR or a negative declaration, will focus on the project-specific impacts of later activities, filling in the information and analysis missing from the SVGP Program EIR. Similarly, CEQA offers the ability for projects that are consistent with the development density established by general plan policies for which an EIR was certified to evaluate only project-specific significant effects particular to the project or its site (CEQA Guidelines §15183).

The General Plan EIR reviewed the following topics: Aesthetics, Air Quality, Biological Resources, Cultural and Tribal Cultural Resources, Geology and Soils, Greenhouse Gas Emissions, Hazards and Hazardous Materials, Hydrology and Water Quality, Land Use and Planning, Noise and Vibration, Population and Housing, Public Services and Utilities, Transportation, and Wildfire.

Significant Unavoidable Impacts
A significant and unavoidable impact was identified for Impact AQ-3 regarding a cumulatively considerable net increase in criteria pollutants. The most recent AMBAG 2018 Population, Housing Unit, and Employment Forecasts project population growth in five-year increments to the year 2040. The 2040 population forecast for the City of Scotts Valley by AMBAG is 12,418 persons. Since the General Plan assumes a population buildout of 15,400 (see Table LU-1:

General Plan Buildout Summary), the General Plan would be inconsistent with the AQMP. This inconsistency in population forecasts is considered to result in a cumulatively considerable significant air quality impact. Due to the projected population growth, regional emissions would remain significant, and the General Plan would likely remain inconsistent with the AQMP. No further mitigation is feasible to reduce this impact. Therefore, this impact would remain significant and unavoidable.

A significant and unavoidable impact was also identified for Impact T-1 regarding the exceedance of VMT thresholds. While Impact T-1 identifies goals and policies in the Mobility Element, and the City’s VMT Implementation Guidelines identifies strategies to reduce VMT, impacts associated with implementation of the General Plan would not be reduced to less than significant due to the increased development, new roadways, and increased use of the City’s and regional transportation system. While project-level impact mitigation shall be analyzed to

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reduce the significance of VMT-related impacts and the City VMT Implementation Guidelines will be continually improved and innovated to require VMT reduction to the extent feasible, this impact would be significant and unavoidable.

Less Than Significant Impacts
No other significant impacts were identified in the EIR. This is due to the fact that this General Plan is a programmatic policy document and does not propose specific development projects.

Furthermore, where potential significant impacts were initially identified, additional policies were added to the General Plan to “pre-mitigate” such impacts. Lastly, the City of Scotts Valley is a compact urban community that is surrounded by natural barriers to outward expansion. As described in the Land Use Element, developable areas within the City limits are largely built out.

As an established community, new development accommodated by the General Plan would be considered infill development, both on limited remaining vacant lands or intensification and/or redevelopment on underutilized parcels.

On November 23, 2023, the Scotts Valley City Council adopted the General Plan to replace the City's previous 1994 General Plan. The Council also adopted a Statement of Overriding Considerations for significant, unavoidable impacts.

1.4.2 Scotts Valley Housing Element
The Housing Element is one of seven mandated elements of the City’s General Plan. It identifies the current and future housing needs of the City with proposed actions to facilitate the provision of housing to meet those needs at all income levels. Updates to the Housing Element are required by State law every eight years and reflects the State’s housing goal of "attaining decent housing and a suitable living environment for every California family," as well as incorporating the unique concerns of the community. The Housing Element includes programs with actions that the City must complete within a specified timeframe.

For the 6th Cycle, the City of Scotts Valley was allocated a total of 1,220 housing units (also known as the City’s Regional Housing Need (RHNA)). The Housing Element update is required to identify strategies and exact parcels to accommodate the entirety of RHNA.

On December 20, 2023, the City Council adopted the City’s 6th Housing Element (2023-2031).

The Housing Element was subsequently certified by the California Department of Housing and Community Development (HCD) on April 2, 2024.

CEQA Review
The Housing Element was determined by the City, acting as the Lead Agency, to be exempt from further CEQA review per Section 15061(b)(3), given the project consists of activities covered by the “common sense exemption” that CEQA allows when a project would not cause a significant effect on the environment.

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This was based on the finding that the Housing Element would not result in any direct or indirect physical changes to the environment. The Housing Element is a policy document and does not provide entitlements to any specific land use projects. It does not make any changes to the General Plan land use map and does not modify any land use designations, allowed densities, or land use intensities currently established in the General Plan. It neither entitles, proposes, nor otherwise requires the construction of new development or rehabilitation of existing development, nor does it change the rate or location of new development.

Rather, the goals, policies, and programs established by the Housing Element only facilitate the development, preservation, and rehabilitation of housing consistent with existing and planned uses, as identified in the General Plan and as mandated under State law. As such, the impacts of the proposed 6th Cycle Housing Element were addressed by the EIR that was certified by the City Council for the General Plan (11/29/23). The proposed modifications to the Housing Element did not create any impacts on the environment that were not previously evaluated as part of the General Plan.

1.4.3 Scotts Valley Municipal Code
The Scotts Valley Municipal Code (Municipal Code), consists of codes and ordinances adopted by the City. These include standards intended to regulate land use, development, health and sanitation, water quality, public facilities, and public safety.

On December 4, 2024, the City Council adopted various Zoning Ordinance amendments that were required by the Housing Element to be completed in 2024. These amendments addressed accessory dwelling units, by-right development, design review criteria, and other topics. The City determined that these amendments were exempt from further CEQA review per Section 15061(b)(3), covered by the “common sense exemption” that CEQA allows when a project would not cause a significant effect on the environment.

The Housing Element requires the City to complete additional Zoning Ordinance amendments in 2025. These include amendments to remove residential development constraints, incentivize development on large lots, incentivize lot consolidation, implement fair housing laws, and other topics. Further amendments that must be completed in 2026 include housing opportunity site rezoning and inclusionary housing ordinance revisions.

Based on the CEQA Guidelines, this Addendum analyzes the potential environmental impacts associated with these amendments.

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2 Project Background and Context

2.1 Project Location
Scotts Valley is located in north Santa Cruz County and is bisected by Highway 17. The City is located just a short distance from the Monterey Bay, nestled in the redwoods on the upland slope of the Santa Cruz Mountains. It is approximately six miles north of Santa Cruz, 30 miles southwest of San Jose and 68 miles south of San Francisco (see Figure 1 Regional Location).

2.2 Environmental Setting
Since incorporation in 1966, the City of Scotts Valley has evolved as a balanced community with family-oriented residential neighborhoods, innovative light-industrial and manufacturing businesses, and strong retail/services corridors along Mount Hermon Road and Scotts Valley Drive. The City’s topography reinforces the notion of a community in a valley, surrounded by forested hills and scenic landscapes.

The City of Scotts Valley is comprised of approximately 4.6 square miles. Land uses in the City includes residential, commercial, industrial, open space, and civic (government) uses. A large majority (72% of total land area) of Scotts Valley is designated residential, which includes both single and multiple-family residences, apartments and condominiums and mobile home parks.

2.3 General Plan and Zoning Designations
Not Applicable (Citywide)

2.4 Purpose and Organization of the Housing Element
The Scotts Valley 6th Cycle Housing Element 2023-2031 (Housing Element) represents an update of the City’s 2015-2023 Housing Element. The Housing Element is an integral component of the City’s General Plan, as it addresses existing and future housing needs of all types for persons of all economic segment groups in the City. The Housing Element serves as a tool for decisionmakers and the public in understanding and meeting housing needs in Scotts Valley. While the law does not require local governments to actually construct housing to meet identified needs, it does allow the City to plan for and accommodate the construction of housing as may be proposed by future development projects.

The Housing Element is one of the seven mandatory elements of a General Plan. Through policies, procedures, and incentives, it provides an action-plan for maintaining and expanding the housing supply in the City of Scotts Valley. The Housing Element consists of the following Chapters and Appendices:
 Chapter 1: Introduction

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 Chapter 2: Housing Plan
 Appendix A: Review of Past Performance
 Appendix B: Housing Needs Assessment
 Appendix C: Housing Constraints
 Appendix D: Housing Resources
 Appendix E: Affirmatively Furthering Fair Housing (AFFH)  Appendix F: Candidate Sites Inventory
 Appendix G: Summary of Community Engagement
 Appendix H: Glossary
Scotts Valley’s Housing Element for the 6th cycle planning period of June 30, 2023 to December 15, 2031 describes policies and programs that include:
 Identification and analysis of existing and projected housing needs, resources, and constraints;
 A statement of goals, policies, quantified objectives, and scheduled programs for preservation, improvement and development of housing;
 Identification of adequate sites for housing; and
 Adequate provision for existing and projected needs of all economic segments of the community.

Pursuant to Government Code Section 65583, the Housing Element contains four basic parts:

1. Analysis of demographic, social, and housing characteristics, current and future housing needs due to population growth and change, and other factors affecting housing needs;

2. Analysis of governmental and nongovernmental constraints that affect the development, maintenance, and improvement of housing for all income groups and people with disabilities;

3. Inventory of resources available to address the City’s housing needs, including available land for housing, as well as the financial resources and administrative capacity to manage housing programs; and

4. Specific actions or programs to address the development, improvement, and conservation of housing to meet current and future needs. This includes goals, policies, and specific housing programs.

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2.5 Regional Housing Needs Assessment
California Government Code Article 10.6, Section 65580 – 65589.8, Chapter 3 of Division 1 of Title 7 sets forth the legal requirements for a housing element and encourages the provision of affordable and decent housing in suitable living environments for all communities to meet statewide goals. The 6th Cycle Housing Element 2023-2031 is a statement by the City of Scotts Valley of its current and future housing needs identified in a policy document that sets forth the City’s goals, policies, and programs to address those identified needs.

Specifically, Government Code Section 65580 states the housing element shall consist of “…an identification and analysis of existing and projected housing needs and a statement of goals, polices, quantified objectives, financial resources and scheduled programs for the preservation, improvement, and development of housing.” The housing element must also contain a housing plan with quantified objectives for the implementation of the goals and objectives described in the housing element. State law requires the housing element be updated every eight years or as otherwise required by State law.

Government Code Article 10.6, Section 65589 – 65589.8, Chapter 3 of Division 1 of Title 7 sets forth the legal requirements for a housing element and encourages the provision of affordable and decent housing in all communities to meet statewide goals. This Addendum and supporting Initial Study evaluates the environmental effects of the adoption and implementation of the Scotts Valley 6th Cycle Housing Element. The planning period is from June 30, 2023 through December 15, 2031.

Government Code Section 65583 requires that housing elements include the following components:
 A review of the previous element’s goals, policies, programs, and objectives to ascertain the effectiveness of each of these components, as well as the overall effectiveness of the Housing Element;
 An assessment of housing needs and an inventory of resources and constraints related to the meeting of these needs;
 An analysis and program for preserving assisted housing developments;  A statement of community goals, quantified objectives, and policies relative to the preservation, improvement and development of housing; and,  A program which sets forth an eight-year schedule of actions that the City is undertaking or intends to undertake, in implementing the policies set forth in the Housing Element.

California housing element law requires that each city and county develop local housing programs designed to meet their “fair share” of housing needs for all income groups. The California Department of Housing and Community Development (HCD), Housing Policy Division

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develops the Regional Housing Needs Assessments (RHNA) for each region of the State, represented by councils of governments.

The Association of Monterey Bay Area Governments (AMBAG) determines the housing allocation for each city and county within its three-county jurisdiction, which includes Santa Cruz County. The City’s RHNA is divided into four income categories, which is based on the Santa Cruz County HUD Area Median Family Income (HAMFI) for an assumed family of four, as shown in Table 1 Regional Housing Needs Allocation 2023-2031. The RHNA covers the period of June 30, 2023 through December 15, 2031.

Table 1 Regional Housing Needs Allocation 2023-2031 by Income Category Income Category
Percent of HUD Area Median Family
Income (HAMFI)
Number of Units
(per RHNA)
Very Low-Income 0-50% HAMFI 392
Low-Income 51-80% HAMFI 257
Moderate-Income 81-120% HAMFI 154
Above Moderate-Income >120% HAMFI 417
Total RHNA 1,220
*The Scotts Valley AMI is $119,300 for a family of four, according to the 2022 HCD Income Limits.

2.6 Residential Sites Inventory
The inventory is detailed in Appendix F: Candidate Sites Inventory of the Scotts Valley 6th Cycle Housing Element 2023-2031.

Table 2 6th Cycle RHNA Sites Inventory Analysis shows the City’s ability to accommodate the 6th Cycle RHNA by income category through a variety of methods, including those listed below.

Figure 2 6th Cycle Housing Element Sites Inventory – All Sites illustrates the location of the sites throughout Scotts Valley. The inventory includes:
 Current capacity on residentially-zoned sites;
 Projects currently in the City’s review pipeline;
 Accessory dwelling unit (ADU) projections; and,
 Rezone strategies to accommodate the remaining RHNA.

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Table 2 6th Cycle RHNA Sites Inventory Analysis
Strategies
Very Low
Income
Low
Income
Moderate
Income
Above
Moderate
Income Total
6th Cycle RHNA 392 257 154 417 1,220
Existing Residential Capacity 11 6 66 83
Pipeline Projects 51 13 353 417
Projected ADUs 24 12 4 40
Town Center Specific Plan 427 39 191 657
Rezones
Residential 103 24 137 264
Mixed Use 280 74 351 705
Total 896 168 1,102 2,166
Percent Over RHNA 38% 9% 164% 78%
The 6th Cycle Housing Element 2023-2031 identifies sites evaluated previously for potential environmental impacts in the Scotts Valley General Plan EIR (2024). The 6th Cycle Housing Element 2023-2031 Update identifies a range of inventoried sites that could be developed to meet the City’s 6th cycle RHNA throughout Scotts Valley. Some of these sites may differ from those identified in the Scotts Valley General Plan and require land use changes (rezones) that would allow for increased density or other provisions. These rezones are the basis for this CEQA analysis and are described below.

Government Code Section 65583 (c)(1)(A) states that cities have up to three years from the time a Housing Element is adopted to rezone sites, including adoption of minimum density and development standards. The sites inventory yields housing units that provide more than 100 percent of the RHNA requirements. Furthermore, each future development proposal associated with implementation of the Housing Element would be subject to environmental analysis, as applicable, pursuant to CEQA Guidelines Section 15168(c) and as required by State law, to evaluate potential impacts specific to that proposal.

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3 Project Description
The Project includes amendments to Scotts Valley General Plan and the Scotts Valley Municipal Code (SVMC) to bring the City into compliance with their Housing Element. These include: 1) Rezone 35 residential and mixed-use parcels (Rezone Sites); 2) Revise relevant residential development standards; 3) Revise relevant standards to conform to Housing Element Program H-3.2 Affirmatively Furthering Fair Housing; and 4) Incorporate other various amendments required as part of the Housing Element implementation. These amendments (the Project) are described below.

3.1 Rezone Sites to Meet the RHNA
To provide adequate sites, Housing Element Program H-1.1 requires the City to rezone 35 properties (Rezone Sites) to allow a residential density of 40 units per acre. As shown in Figures 3 Residential Rezone Sites and Figure 4 Mixed-Use Rezone Sites, seven of these sites are “residential rezones” and 28 sites are “mixed-use rezones.” For a residential rezone site, the City must allow residential-only development (no commercial component required). For a mixed-use rezone site, the City may require residential development to include a commercial component but must allow projects with up to 70 percent residential floor area.

On all rezone sites, the City must permit up to 40 dwelling units per acre with development standards (e.g., building height, lot coverage, setbacks) that allow for this density. All but three of the rezone sites are currently zoned Service Commercial (C-S). Additional information about the sites can be found in Housing Element Appendix F.

In 2024, the City adopted Zoning Ordinance amendments to create a new Housing Element Opportunity Site (HE) Combing District. The HE Combining District, found in Chapter 17.41 of the SVMC, establishes a by-right permitting process for Housing Element sites required by state law. The HE Combining District applies to the Rezone Sites.

3.1.1 Proposed Rezone Sites Amendments
To implement Housing Element Program H-1.1, the proposed Zoning Code Amendments include the following changes to Chapter 17.41 Housing Element Opportunity Site Combining District:
 Permitted Uses: Allows multifamily dwellings as a permitted use in the HE combining district. On mixed-use rezone sites, residential uses must occupy less than 70 percent of the total gross square feet on the property. On all other sites, residential-only development (no commercial uses on site) is allowed.

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 Development Standards: Up to 40 dwelling units per acre and 60 percent building coverage is allowed on rezone sites. Building heights greater than 35 feet permitted for pitched roofs and vertical mixed-use buildings.
 Deviations: Deviation from development standards is allowed if necessary to accommodate permitted density on the site.

These proposed Zoning Code Amendments also require revisions to the General Plan Land Use Element, Table LU-2: General Plan Land Use Designations. Specifically, if would add notes “(3)” pertaining to “Residential Density / Commercial Building Coverage” and “(4)” pertaining to “Potential Land Uses” as follows:
(3) On sites listed in Housing Element Table F-10: Scotts Valley 6th Cycle Candidate Sites, the residential density, commercial building coverage, and potential land uses are as permitted in the Housing Element.
(4) In the Mixed Use Rezone sites listed in Housing Element Table F-10, residential uses must consist of no more than 70 percent of the total gross square feet of the development. On Residential Rezone sites, there is no limit on the percent of development floor area that may be residential (i.e., residential-only development is allowed).

These Amendments would affect seven parcels (8.7 acres), identified in Figure 3 Residential Rezone Sites, to permit residential uses ranging up to a density of 40 dwelling units per acre, accommodating 264 units, including 103 lower income units. They would also affect 28 parcels (32.2 acres), identified in Figure 4 Mixed-Use Rezone Sites, to permit mixed-use developments ranging up to a density of 40 dwelling units per acre with up to 70 percent residential, accommodating 705 units, including 280 lower income units.

The proposed new development standard would reduce the existing commercial use requirement on these sites from 50 to 30 percent. Analysis of development standards in the Housing Element concluded that this reduction to 30 percent would help facilitate housing development. In addition, proposed lot consolidation incentives (discussed below) would allow residential-only development on the mixed use rezone sites for qualifying 100 percent affordable development projects.

These amendments would not apply to any parcels located in the Town Center Specific Plan area.

3.2 Citywide Residential Development Constraints
Housing Element Program H-1.6 requires the City to study existing residential development standards and to determine if these standards are a potential constraint to housing production.

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Program H-1.6 also states that the City shall adopt Zoning Ordinance amendments, if needed, to address and remove these constraints. These amendments would apply citywide in all areas, including the HE Combining District.

Residential development standards include maximum density, minimum lot size and dimensions, minimum setbacks, maximum building and site coverage, maximum building heights, and minimum on-site parking.

Housing Element Appendix C analyzes governmental constraints to housing production in Scotts Valley, including development standards in the Zoning Ordinance. This analysis concludes that the minimum building coverage standard on C-S and C-SC properties (45 percent and 35 percent, respectively) would constrain mixed-use housing development to 20 units per acre.

Required multifamily parking (two parking spaces per multifamily unit, plus one guest space per five units) would constrain multifamily and mixed-use development to 20 units per acre. Other development standards would not constrain residential development at permitted densities.

3.2.1 Proposed Amendments
To implement Housing Element Program H-1.6, Sections 17.20.040 and 17.22.040 would be amended to increase the maximum building coverage outside of the HE Combining District from 45 percent to 50 percent in the Service Commercial (C-S) zone and from 35 percent to 50 percent in the Shopping Center (C-SC) zone. Within the HE Combining District, the maximum permitted building coverage would be 60 percent to allow for development at 40 units per acre.

The proposed amendments also includes revisions to Section 17.44.030 to reduce the number of required parking spaces for multi-family dwellings to one space for studios and one-bedroom units, 1.5 spaces for two-bedroom units, and two spaces for units with three or more bedrooms.

3.3 Affirmatively Furthering Fair Housing (AFFH)
Housing Element Program H-3.2 requires the City to “affirmatively further fair housing” by taking actions to overcome patterns of segregation and increase access to opportunities for all residents. Program H-3.2 requires changes to development regulations that apply uniquely in “racially concentrated areas of affluence” (RCAA). Under state law, RCAA are areas with relatively high percentage of white population and high household incomes.

Figure 5 Racially Concentrated Areas of Affluence (RCAAs) illustrates the RCAA boundary as identified in the Housing Element which includes all residential areas east of Highway 17 and south of Mount Hermon Road using the methodology recommended by the California Department of Housing and Community Development (HCD). These boundaries are established in the Housing Element consistent with state law.

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3.3.1 Proposed Amendments
To implement Program H-3.2, the proposed amendments would create a new section in the Zoning Ordinance to address RCAA provisions, which are summarized as follows:

Missing Middle Conversions
Allow conversion of existing single-family residences into “missing middle” housing in lower density residential areas. 1
Within RCAA, an existing single-family home may be converted into a duplex or a triplex with development standards designed to protect the public health and safety and ensure neighborhood compatibility including:
 The lot must conform to zoning district minimum lot area standard.  The lot may contain only one existing dwelling unit.
 The conversion may only use existing living area in the primary dwelling (e.g., no conversion of accessory structures).
 Minimum lot area of 5,000 sq. ft. per unit (two units max on 10,000 sq. ft. R-1 lot, three units max on 15,000 sq. ft. R-1 lot).
 Three units permitted only on lots with an average slope of less than 25 percent.  Conversions are not permitted on lot with existing ADUs, however ADUs may be added in the future as permitted by state law.
 The conversion may not be combined with an SB 9 project.  Two on-site parking spaces must be provided for each unit. Parking spaces may not be in the front setback. The conversion may not add or enlarge an existing driveway curb cut.  Units must be connected to water and sewer.

SB 9 Triplexes
SB 9 requires cities to permit two primary dwelling units on single-family lots. One accessory dwelling unit (ADU) and one junior accessory dwelling unit (JADU) are also permitted on the lot with the two primary dwelling units. Scotts Valley adopted a local ordinance implementing SB 9 in 2024 (SVMC Chapter 17.55).

The amendment would allow properties eligible for SB 9 unit development provisions to construct triplexes in R-1 zoned single-family neighborhoods identified as RCAAs with the 1 “Missing middle” housing in this context refers to duplexes and triplexes intended to match the character of single-family residential neighborhoods.

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inclusion of at least one deed restricted unit affordable to a very low or low-income household.

The third SB 9 unit will be subject to the following development standards:
 Maximum floor area: 800 square feet.
 A third unit is not allowed with an SB 9 urban lot split.  The third unit is allowed only as a modification to an existing dwelling.  The third unit may be created by adding new floor area to the existing dwelling (not limited to conversion of existing floor area only).
 The third unit must comply with zoning district setbacks.  The third unit must comply with all SB 9 standards, including public health and safety and environmental resource protection standards (except as modified above).

Permits for Condominiums and Townhomes
Remove the conditional use permit (CUP) requirement for condominiums and townhomes within R-1 parcels which are identified as RCAAs.

3.4 Other Miscellaneous Amendments
A variety of other amendments to Chapter 17 Zoning of the SVMC would implement other Housing Element programs. These include the following with the respective implementing program shown in parentheses, where applicable:
 Mixed Use Development Incentives (H-1.7): Adopt development incentives, such as, but not limited to, decreasing the commercial component for projects that include a greater number of affordable units, for candidate sites identified for mixed-use rezoning.
 Large Lot Development Incentives (H-2.6): Adopt and implement a program to facilitate the development of lots larger than ten acres (including flexibility in zoning)  Lot Consolidation Incentives (H-2.8): Facilitate the consolidation of vacant and underutilized lots or residential development (e.g., reduction in lot size and setback requirements, and/or parking reductions.
 Condominium Conversion Ordinance (H-3.12): The City shall adopt a Condominium Conversion Ordinance to preserve the existing, and future, rental housing stock by establishing a maximum percent of the City’s total housing stock that can be converted over a certain period of time. The Ordinance shall also establish tenant notification and relocation assistance requirements, limit rent increases once a notice of intent to convert has been filed and give tenants the priority to purchase units.

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 SB 9 Ordinance Amendments: These amendments consist of various revisions to 17.55 (SB 9 Residential Development), 16.78 (Urban Lot Splits), and the City’s SB 9 public health and safety and environmental protection standards to bring the City’s SB 9 ordinance into compliance with recently amended state law.  Highway 17 Access Hazards: This amendment would update the General Plan and would prohibit new residential development from solely accessing Highway 17 at specific roadways, as identified in the Highway 17 Access Management Plan (Caltrans, 2016).

3.5 Project Implementation
Based on an analysis by the City and as shown in Table 3 Comparison of Existing and Project Rezoning Residential Units and Population Capacity, implementation of the Project would result in an additional 480 residential units and 605 persons.

Table 3 Comparison of Existing and Project Rezoning Residential Units and Population Capacity
Rezone Sites # of Parcels Units Population 1
Existing Zoning Capacity
Residential 7 86 216
Mixed-Use 28 403 1,011
Total 35 489 1,227
Project Zoning Capacity
Residential 7 264 662
Mixed-Use 28 705 1,770
Total 35 969 1,832
Net Change
Residential 7 178 446
Mixed-Use 28 302 759
Total 35 480 605
Notes:

1. Assumes an average of 2.51 persons per household.

Source: City of Scotts Valley, March 2025.

As shown in Table LU-1: General Plan Buildout Summary of the General Plan, the buildout development capacity analysis (2023) assumed an additional 1,199 additional residential units will be constructed between 2022 and the 2045 buildout projection year. Based on an average

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household size of 2.51 persons per household (U. S. Census, 2022), this equates to an estimated population increase of approximately 3,000 people. Implementation of the Project would not exceed the development capacity as described the Land Use Element of General Plan. It is also consistent with the City’s Housing Element and State requirements to provide additional housing consistent with the City’s RNHA allocation.

Furthermore, allowing all parcels to be developed to the maximum density or intensity is not the intention of the General Plan. The intention is to reflect a maximum development envelope or density range under appropriate conditions, and in accordance with applicable zoning regulations. There are many factors that may limit or affect a development’s ability to achieve the maximum intensity on a specific parcel, resulting from the parcel’s physical limitations, the City’s zoning standards, and how an owner/developer chooses to address the function and design of the development. These factors may include, but are not limited to, the following:
 Parcel size and configuration
 Height limits
 Lot coverage allowed
 Requirements for setbacks, build-to standards, landscaping and open space  Development standards and design guidelines
 Type of parking provided (e.g., surface, below-grade, or structured)  Adjacency to sensitive land uses, such as single-family neighborhoods.

It is important to note that the General Plan development build-out analysis represents a maximum development envelope of density based on existing and potential general plan land use designations. Development forecasts involve an analysis of other factors such as environmental constraints, economic and market conditions, historic trends, property ownership, and community preferences.

3.6 Permits and Approvals
The City of Scotts Valley is the Project Applicant. The Project requires the following legislative/discretionary approvals:
 General Plan Amendment
 Zoning Code Amendments
 Subdivision Ordinance Amendments
 Amendments to the City of Scotts Valley SB 9 Standards adopted by City Council Resolution

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4 Supplemental Environmental Checklist Form

4.1.1 Project Title
Addendum to the General Plan EIR for the 6th Cycle Housing Element 2023-2031

4.1.2 Lead Agency Name and Address
City of Scotts Valley
One Civic Center Drive
Scotts Valley, CA 95066

4.1.3 Contact
Taylor Bateman
Community Development Director
[email protected]

4.1.4 Project Location
Citywide. See Figure 1 Regional Location.

4.1.5 Project Applicant
None.

4.1.6 General Plan Designation
Citywide.

4.1.7 Zoning
Citywide.

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5 Environmental Analysis
In accordance with CEQA, Public Resources Code Sections 21000-21178.1, this Initial Study has been prepared to analyze whether any new or more significant environmental impacts could occur from implementation of the Project. The purpose of this Initial Study is to inform the decision makers, affected agencies, and the public of potential environmental impacts associated with the implementation of the Project. This section analyzes the potential environmental impacts associated with the Project.

As demonstrated in Environmental Analysis Sections below, none of the conditions that had been analyzed in the General Plan EIR would change with adoption of the proposed Project.

Furthermore, no new information of substantial importance meeting the criteria listed in CEQA Guidelines Section 15162 has been identified.

A Housing Element does not propose or require development of any residential use, rather, it establishes local goals, policies, and actions the City would implement and/or facilitate to address identified housing issues. In accordance with State law, Housing Elements must be updated every eight years to establish current housing and land use strategies reflective of changing needs, resources, and conditions.

Implementation of the Project would result in a relatively minor increase in allowable density and be consistent with buildout-projections as identified in the General Plan. The Project involves policy-level documents, and as such, does not include any site-specific development designs or proposals. Future development proposals associated with implementation of the Project would be required to comply with: 1) all applicable Scotts Valley General Plan goals, policies, and actions, 2) Federal, State and local regulations and development standards, 3) project- specific conditions and mitigation measures to reduce potential impacts.

Criteria used to analyze potential impacts associated with the proposed project including the following:
1) A finding of “New Potentially Significant Impact” means that the project may have a new potentially significant impact on the environment or a substantially more severe impact than analyzed in the previously approved or certified CEQA document that cannot be mitigated to below a level ofsignificance or be avoided. 2) A finding of “New Mitigation is Required” means that the project may have a new potentially significant impact on the environment or a substantially more severe impact than analyzed in the previously approved or certified CEQA document and that new mitigation is required to address the impact.
3) A finding of “No New Impact/No Impact” means that the potential impact was fully analyzed and/or mitigated in the prior CEQA document and no new or different impacts will result from the proposed activity. A brief explanation is required for all

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answers except “No New Impact/No Impact” answers that are adequately supported by the information sources a lead agency cites in the parentheses following each question. A “No New Impact/No Impact” answer is adequately supported if the referenced information sourcesshow that the impactsimply does not apply to projectslike the one involved (e.g. the project falls outside a fault rupture zone). A “No New Impact/No Impact” answer should be explained where it is based on project-specific factors as well as general standards (e.g., the project will not expose sensitive receptors to pollutants, based on a project-specific screening analysis). 4) A finding of “Reduced Impact” means that a previously infeasible mitigation measure is now available, or a previously infeasible alternative is now available that will reduce a significant impact identified in the previously prepared environmental document.
5) All answers must take account of the whole action involved, including off-site as well as on-site, cumulative as well as project-level, indirect as well as direct, and construction as well as operational impacts.
6) Earlier analyses may be used where, pursuant to the tiering, program EIR, or other CEQA process, an effect has been adequately analyzed in an earlier EIR or negative declaration. Section 15063(c)(3)(D). In this case, a brief discussion should identify the following:
a) Earlier Analyses Used. Identify and state where they are available for review. a) Impacts Adequately Addressed. Identify which effects from the above checklist were within the scope of and adequately analyzed in an earlier document pursuant to applicable legal standards, and state whether such effects were addressed by mitigation measures based on the earlier analysis.

Describe the mitigation measures which were incorporated or refined from the earlier document and the extent to which they address site-specific conditions for the proposed action.
b) Infeasible Mitigation Measures. Since the previous EIR was certified or previous ND or MND was adopted, discuss any mitigation measures or alternatives previously found not to be feasible that would in fact be feasible or that are considerably different from those previously analyzed and would substantially reduce one or more significant effects of the project, but the project proponents decline to adopt the mitigation measures or alternatives. c) Changes in Circumstances. Since the previous EIR was certified or previous ND or MND was adopted, discuss any changes in the project, changes in circumstances under which the project is undertaken and/or "new information of substantial importance" that cause a change in conclusion regarding one or more effects discussed in the original document. 7) Lead agencies are encouraged to incorporate into the checklist references to

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information sources for potential impacts (e.g. general plans, zoning ordinances).

Reference to a previously prepared or outside document should, where appropriate, include a reference to the page or pages where the statement is substantiated. 8) Supporting Information Sources. A source list should be attached, and other sources used or individuals contacted should be cited in the discussion. 9) This is only a suggested form, and lead agencies are free to use different formats; however, lead agencies should normally address the questions from this checklist that are relevant to a project's environmental effects in whatever format is selected. 10) The explanation of each issue should identify:
a) the significance criteria or threshold, if any, used to evaluate each question; b) differences between the proposed activity and the previously approved project described in the approved ND or MND or certified EIR; and c) the previously approved mitigation measure identified, if any, to reduce the impact to less than significance.

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New Significant Environmental Effects or Substantially More Severe Environmental Effects Compared to Those Identified in the Previous CEQA Document
The subject areas checked below were determined to be new significant environmental effects or to be previously identified effects that have a substantial increase in severity either due to a change in project, change in circumstances or new information of substantial importance, as indicated by the checklist and discussed below.

Aesthetics Land Use and Planning
Agriculture and Forestry Resources Mineral Resources
Air Quality Noise
Biological Resources Population and Housing
Cultural and Tribal Cultural Resources Public Services
Energy Recreation
Geology and Soils Transportation
Greenhouse Gas Emissions Utilities and Service Systems
Hazards and Hazardous Materials Wildfire
Hydrology and Water Quality

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Lead Agency Determination
On the basis of this evaluation:

No substantial changes are proposed in the project and there are no substantial changes in the circumstances under which the project will be undertaken that will require major revisions to the previous approved ND or MND or certified EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. Also, there is no "new information of substantial importance" as that term is used in CEQA Guidelines Section 15162(a)(3).

Therefore, the previously adopted ND or MND or previously certified EIR is adequately discusses the potential impacts of the project without modification.

X No substantial changes are proposed in the project and there are no substantial changes in the circumstances under which the project will be undertaken that will require major revisions to the previous approved ND or MND or certified EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. Also, there is no "new information of substantial importance" as that term is used in CEQA Guidelines Section 15162(a)(3).

Therefore, the previously adopted ND, MND or previously certified EIR adequately discussesthe potential impacts of the project; however, minor changes require the preparation of an ADDENDUM.

Substantial changes are proposed in the project or there are substantial changes in the circumstances under which the project will be undertaken that will require major revisions to the previous ND, MND or EIR due to the involvement of significant new environmental effects or a substantial increase in the severity of previously identified significant effects. Or, there is "new information of substantial importance," as that term is used in CEQA Guidelines Section 15162(a)(3). However, all new potentially significant environmental effects or substantial increases in the severity of previously identified significant effects are clearly reduced to below a level of significance through the incorporation of mitigation measures agreed to by the project applicant. Therefore, a SUBSEQUENT MND is required.

Substantial changes are proposed in the project or there are substantial changes in the circumstances under which the project will be undertaken that willrequire majorrevisionsto the previous environmental document due to the involvement of significant new environmental effects or a substantial increase in the severity of previously identified significant effects. Or, there is "new information ofsubstantial importance," as that term is used in CEQA Guidelines Section 15162(a)(3). However, only minor changes or additions or changes would be necessary to make the previous EIR adequate for the project in the changed situation. Therefore, a SUPPLEMENTAL EIR is required.

Substantial changes are proposed in the project or there are substantial changes in the circumstances under which the project will be undertaken that willrequire majorrevisionsto the previous environmental document due to the involvement of significant new environmental effects or a substantial increase in the severity of previously identified significant effects. Or, there is "new information ofsubstantial importance," as that term is used in CEQA Guidelines Section 15162(a)(3). Therefore, a SUBSEQUENT EIR is required.

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5.1 Aesthetics

ENVIRONMENTAL IMPACTS
Issues
New
Potentially
Significant
Impact
New Impact
Requiring
Mitigation
No New
Impact /
No
Impact
Reduced
Impact
Except as provided in Public Resources Code Section 21099, would the project:
a) Have a substantial adverse effect on a
scenic vista?
X
b) Substantially damage scenic resources,
including but not limited to trees, rock
outcroppings, and historic buildings within
a state scenic highway?
X
c) In non-urbanized areas, substantially
degrade the existing visual character or
quality of public views of the site and its
surroundings? (Public views are those that
are experienced from publicly accessible
vantage point). If the project is in an
urbanized area, would the project conflict
with applicable zoning and other
regulations governing scenic quality?
X
d) Create a new source of substantial light or
glare which would adversely affect day or
nighttime views in the area?
X

5.1.1 Discussion
Scenic Vistas, Resources, or Viewsheds (a)
Figure OSC-5: Viewsheds and Scenic Corridors of the General Plan identifies prominent forested ridges, scenic road corridors along portions of Highway 17 and several redwood canyon riparian areas, and vistas (largely from higher vantage points toward the ridges, or toward the broad sweep of the valley below). Prominent ridges parallel Highway 17 on the east and Scotts Valley Drive on the west, surround the City limits north and west on Glenwood Drive, and follow the Bean Creek/Zayante divide in the southwest part of the City.

As described in the General Plan EIR (Impact AES-1), future development will be required to preserve and protect existing viewsheds and scenic open spaces and corridors. Policies include

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ridgeline protection, visual integration of new development within the natural setting, clustering development, and careful site planning to protect scenic resources.

Given the fact that the City is largely built out, and there are a number of General Plan goals and polices that protect existing viewsheds and scenic open spaces, the General Plan concluded that substantial impacts to scenic vistas, resources, and viewsheds are considered less than significant and no mitigation is required.

Implementation of the Project would result in a relatively minor increase in allowable density and be consistent with buildout-projections as identified in the General Plan. The Project involves policy-level documents, and as such, does not include any site-specific development designs or proposals. Future development proposals associated with implementation of the Project would be required to comply with: 1) all applicable Scotts Valley General Plan goals, policies, and actions, 2) Federal, State and local regulations and development standards, 3) project- specific conditions and mitigation measures to reduce potential impacts.

Conclusion
No New Impact. The changes associated with the Project would not result in any new impacts or increase the severity of impacts in this regard.

Scenic Resources and Visual Character (b and c)
As described in the General Plan EIR (Impact AES-2), implementation of the General Plan would result in localized alteration to the existing visual character within the City. Land Use Element Goals LU-1 and LU-4 and associated policies address design quality, compatible development, landscaping, and design guidelines and require high-quality commercial and mixed-use development within the Mount Hermon Road and Scotts Valley Drive corridors.

As described in the Open Space & Conservation Element, Goal OSC-2 and associated policies require future development to incorporate appropriate site planning and design features to minimize aesthetic impacts and visually integrate with the visual character of surrounding land uses and the overall City’s “small town” character. Policies include natural setting integration, landscape screening, infill and clustering of development, street and open space planning, integrated site planning, and quality design.

Additionally, the Mount Hermon Road Design Guidelines, the Commercial and Industrial Design Review Guidelines, Multi-Unit Residential Design Standards, and the Residential Design Handbook provide guidance regarding the protection and enhancement of aesthetic and visual resources, as applicable.

As such, the General Plan EIR concluded that substantial impacts to scenic resources and visual character is considered less than significant and no mitigation is required.