Watsonville City Council
February 21, 2023

AGENDA

CITY OF WATSONVILLE

CITY COUNCIL MEETING

Working with our community to create positive impact through service with heart.

Values: Teamwork, Integrity, Honesty, Service and Respect Eduardo Montesino, Mayor, District 1
Vanessa Quiroz-Carter, Mayor Pro Tempore, District 2
Maria Orozco, Council Member, District 3
Kristal Salcido, Council Member, District 4
Casey K. Clark, Council Member, District 5
Jimmy Dutra, Council Member, District 6
Ari Parker, Council Member, District 7
Rene Mendez, City Manager
Samantha W. Zutler, City Attorney
Irwin I. Ortiz, City Clerk
Location:

City Council Chambers
275 Main Street, Top Floor
Watsonville, CA 95076
Anyone addressing the City Council is asked to fill out a speaker card and leave it at the podium for recording purposes

IF YOU CHALLENGE ANY ACTION APPEARING ON THIS AGENDA IN

COURT, YOU MAY BE LIMITED TO RAISING ONLY THOSE ISSUES YOU OR

SOMEONE ELSE RAISED AT THE PUBLIC MEETING DESCRIBED ON THIS

AGENDA, OR IN WRITTEN CORRESPONDENCE DELIVERED TO THE CITY CLERK PRIOR TO, OR AT, THE PUBLIC MEETING.

Americans with Disabilities Act
The Council Chambers is an accessible facility. If you wish to attend a meeting and you will require assistance in order to attend and/or participate, please call the City Clerk's Office at least three (3) business days in advance of the meeting to make arrangements. The City of Watsonville TDD number is (831) 763-4075.

For information regarding this agenda, please call the City Clerk's Office at (831) 768- 3040
AGENDA

CITY OF WATSONVILLE

CITY COUNCIL MEETING

Location:

City Council Chambers
275 Main Street, Top Floor
Watsonville, CA 95076

Tuesday, February 21, 2023, 4:30 p.m.

Pages

FACE COVERINGS HIGHLY RECOMMENDED

1. CLOSED SESSION CORRESPONDENCE (IF ANY)

2. CLOSED SESSION
CLOSED SESSION ANNOUNCEMENT:

PUBLIC COMMENTS REGARDING THE CLOSED SESSION AGENDA WILL ONLY BE ACCEPTED BY THE CITY COUNCIL AT THIS TIME.

The City Council of the City of Watsonville will recess to Closed Session to discuss the matters that follow:

2.a THREAT TO PUBLIC SERVICES OR FACILITIES
Government Code Section 54957(a)
Consultation with: Watsonville Police Department, Police Officers Hernandez, Rodriguez, and Strong
CITY COUNCIL RESUMES AT 5:30 P.M.

3. ROLL CALL

3.a MOTION TO EXCUSE ABSENT COUNCIL MEMBER(S) (If any)

4. PLEDGE OF ALLEGIANCE

5. REPORTS TO COUNCIL -- No Action Required

5.a 2023 ATMOSPHERIC RIVER WEATHER EVENT - FLOODING REPORT

AND RECOVERY EFFORTS
6 5.b CITY MANAGER'S UPDATE REPORT

5.c COMMUNITY COMPOST GIVE BACK PRESENTATION BY THE PUBLIC

WORKS & UTILITIES SOLID WASTE DIVISION
28 6. PRESENTATIONS & ORAL COMMUNICATIONS
This time is set aside for members of the general public to address the Council on any item not on the Council Agenda, which is within the subject matter jurisdiction of the City Council. No action or discussion shall be taken on any item presented except that any Council Member may respond to statements made or questions asked, or may ask questions for clarification. All matters of an administrative nature will be referred to staff. All matters relating to Council will be noted in the minutes and may be scheduled for discussion at a future meeting or referred to staff for clarification and report.

ALL SPEAKERS ARE ASKED TO FILL OUT A SPEAKER CARD & LEAVE IT AT THE PODIUM. SPEAKERS ARE ASKED TO ANNOUNCE THEIR NAME AND DISTRICT IN

WHICH THEY LIVE IN ORDER TO OBTAIN AN ACCURATE RECORD FOR THE MINUTES.

6.a ORAL COMMUNICATIONS FROM THE PUBLIC (2 MINUTES EACH) 30

6.b ORAL COMMUNICATIONS FROM THE COUNCIL (2 MINUTES EACH)

6.c REPORT OUT OF CLOSED SESSION

6.d MAYOR'S PROCLAMATION RECOGNIZING FEBRUARY AS NATIONAL

CAREER TECHNICAL EDUCATION MONTH

7. CONSENT AGENDA
All items appearing on the Consent Agenda are recommended actions that are considered to be routine and will be acted upon as one motion. Any items removed will be considered immediately after the consensus motion. The Mayor will allow public input prior to the approval of the Consent Agenda.

PUBLIC INPUT (2 MINUTES EACH)

7.a MOTION AUTHORIZING CITY ATTORNEY TO SIGN ON TO AMICUS BRIEF

PREPARED BY CITY OF SANTA CRUZ
32 MOTION AUTHORIZING THE CITY ATTORNEY TO SIGN ON, INDICATING

SUPPORT OF THE CITY OF WATSONVILLE, TO THE AMICUS BRIEF

PREPARED BY THE CITY OF SANTA CRUZ AND FILED IN SUPPORT OF

PETITIONER/APPELLANTS IN GRANT PARK NEIGHBORHOOD
ASSOCIATION VS. CA DEPARTMENT OF PUBLIC HEALTH

7.b AMENDMENT NO. 1 WITH GRIFFIN STRUCTURES, INC., FOR PROJECT

MANAGEMENT SERVICES FOR THE RAMSAY PARK MASTER PLAN
IMPLEMENTATION (Recommended by Parks & Community Services Director Calubaquib)
34 RESOLUTION APPROVING FIRST AMENDMENT TO PROFESSIONAL SERVICES CONTRACT WITH GRIFFIN STRUCTURES, INC., ADDING TO

THE SCOPE OF WORK, INCREASING CONTRACT COMPENSATION BY
$283,700; EXTENDING THE TERM OF THE CONTRACT TO DECEMBER 31, 2024

7.c CONTRACT WITH CALLANDER ASSOCIATES LANDSCAPE

ARCHITECTURE FOR PARKS FACILITY ASSESSMENT STUDY
(Recommended by Parks & Community Services Director Calubaquib) 43 RESOLUTION AWARDING PROFESSIONAL SERVICES CONTRACT TO

CALLANDER ASSOCIATES LANDSCAPE ARCHITECTURE, INC., FOR A

PARKS FACILITY ASSESSMENT STUDY, IN AN AMOUNT NOT TO
EXCEED $199,238.38

7.d PÁJARO RIVER FLOOD MANAGEMENT AGENCY MEMBER AGENCY
COST SHARE AGREEMENT (Recommended by Interim Public Works & Utilities Director Vides)
65 RESOLUTION APPROVING COST SHARING AGREEMENT BY AND

AMONG THE CITY OF WATSONVILLE, SANTA CRUZ COUNTY FLOOD
CONTROL AND WATER CONSERVATION DISTRICT – ZONE 7,
MONTEREY COUNTY WATER RESOURCES AGENCY AND THE PÁJARO

REGIONAL FLOOD MANAGEMENT AGENCY (PRFMA) TO FUND THE
ACTIVITIES OF THE PÁJARO REGIONAL FLOOD MANAGEMENT
AGENCY, IN AN AMOUNT NOT TO EXCEED $49,000; AUTHORIZING AND

DIRECTING THE CITY MANAGER TO EXECUTE SAME AND

AUTHORIZING THE BUDGET TRANSFER OF SAID AMOUNT FROM
EXPERT & CONSULTATION SERVICES ACCOUNT 710-543-7307 TO
OTHER CONTRACT SERVICES ACCOUNT 0710-543-7361

7.e LEASE AGREEMENT WITH CORRALITOS WOMAN’S CLUB FOR CITY OWNED PROPERTY LOCATED AT 33 BROWNS VALLEY ROAD
(Recommended by Parks & Community Services Director Calubaquib) 82 RESOLUTION APPROVING A SEVEN-YEAR LEASE AREEMENT WITH ONE (1) THREE-YEAR OPTION TERM WITH CORRALITOS WOMAN’S
CLUB, A CORPORATION, FOR CITY OWNED PROPERTY LOCATED AT 33

BROWNS VALLEY ROAD, WATSONVILLE, CALIFORNIA, COMMENCING ON JANUARY 1, 2023, AND ENDING DECEMBER 31, 2030

7.f ACCEPTING & APPROPRIATING STATEWIDE PARK DEVELOPMENT &

COMMUNITY REVITALIZATION PROGRAM GRANT FUNDS & AWARDING

CONTRACT TO SSA LANDSCAPE ARCHITECTS FOR LANDSCAPE

ARCHITECTURAL DESIGN SERVICES FOR THE CITY PLAZA
101
(Recommended by Parks & Community Services Director Calubaquib) 1) RESOLUTION ACCEPTING THE STATEWIDE PARK DEVELOPMENT

AND COMMUNITY REVITALIZATION PROGRAM GRANT FUNDS IN THE AMOUNT OF $3,349,595; AUTHORIZING THE CITY MANAGER OR HIS

DESIGNEE TO EXECUTE A STANDARD AGREEMENT AND ANY
AMENDMENTS THERETO; AND ANY NECESSARY DOCUMENTS; AND

APPROPRIATING SUCH FUNDS TO THE SPECIAL GRANTS FUND
2) RESOLUTION AWARDING PROFESSIONAL SERVICES CONTRACT TO SSA LANDSCAPE ARCHITECTS, INC., FOR LANDSCAPE

ARCHITECTURAL DESIGN SERVICES FOR THE REVITALIZATION OF

THE WATSONVILLE CITY PLAZA PROJECT, IN AN AMOUNT NOT TO EXCEED $499,924

7.g DIRECTING FILING OF THE 2023-24 ANNUAL ENGINEER’S REPORT FOR

THE LANDSCAPE & LIGHTING MAINTENANCE ASSESSMENT
DISTRICTS (Recommended by Parks & Community Services Director Calubaquib)
125

1) RESOLUTION DIRECTING THE FILING OF THE 2023-2024 ANNUAL

ENGINEER'S REPORT FOR THE BAY BREEZE SUBDIVISION

LANDSCAPING AND LIGHTING MAINTENANCE ASSESSMENT DISTRICT NO. PK-03-02 (LLMAD)
2) RESOLUTION DIRECTING THE FILING OF THE 2023-2024 ANNUAL ENGINEER'S REPORT FOR THE VISTA MONTAÑA SUBDIVISION

LANDSCAPING AND LIGHTING MAINTENANCE ASSESSMENT DISTRICT NO. PK-03-03 (LLMAD)
3) RESOLUTION DIRECTING THE FILING OF THE 2023-2024 ANNUAL

ENGINEER'S REPORT FOR THE GONZALES STREET ALLEYWAY

LANDSCAPING AND LIGHTING MAINTENANCE ASSESSMENT DISTRICT NO. PK-94-1 (LLMAD)

7.h APPOINTMENT TO PERSONNEL COMMISSION - DISTRICT 3 135 RESOLUTION APPOINTING LIZETT ZUÑIGA ZAMUDIO TO THE CITY OF

WATSONVILLE PERSONNEL COMMISSION

8. ITEMS REMOVED FROM CONSENT AGENDA

9. PUBLIC HEARINGS, ORDINANCES, & APPEALS

9.a ESTABLISHMENT OF A VEHICLE MILES TRAVELED IN LIEU FEE (This item was previously published in the newspaper to be heard, but has since been removed from the agenda and will be considered at a future meeting. A new public hearing notice will be published in the newspaper)

9.b CONSIDERATION OF COMPREHENSIVE FINANCIAL REPORT AND MIDYEAR REPORT FOR FY 2022-23 (Recommended by Administrative Services Director Duran)
136
1) Staff Report by Administrative Services Director Duran 2) City Council Clarifying & Technical Questions
3) Public Comments
4) Motion
5) City Council Deliberation on Motion
6) Action on Resolution Amending the 2022-23 Budget to Authorize $1,789,759 Budget Appropriation into Various Funds and to Authorize Four Additional Positions

10. EMERGENCY ITEMS ADDED TO AGENDA

11. REQUESTS & SCHEDULING FUTURE AGENDA ITEMS

12. ADJOURNMENT
This agenda was posted in accordance with the California Brown Act. The agenda packet can be accessed on the City of Watsonville website at https://www.cityofwatsonville.org/2123/City-Council-Agendas-Minutes and available for public inspection in the City Clerk’s Office (275 Main Street, 4th Floor) during normal business hours). Any materials related to an item on this Agenda submitted to the Council after distribution of the agenda packet will be made available to the public in

accordance with Government Section 54957.5.

2023 Atmospheric River Weather Event
Flooding Report and Recovery Efforts

Pajaro River Watershed
The Pajaro River watershed comprises:
● 1300 sq mi
Includes:
● Santa Cruz County
● Monterey County
● Santa Clara County
● San Benito County
Multi-agency coordination:
● County of Santa Cruz-Zone 7
● County of Santa Cruz OR3
● Monterey County
● Monterey County Water Resources
Agency
● Pajaro Regional Flood Management
Agency
● City of Watsonville

FEMA Coordination and Flood Mapping

Multi Agency Coordination
ICS System
Law and Fire Branch
County EOC - City EOC

Review Storm Events

Review Storm Events
December 30-31, 2022 – Flooding in San Lorenzo River, Soquel Creek, Aptos Creek, Corralitos & Salsipuedes Creek, Landslides, road failures
County of Santa Cruz Emergency Proclamation - 1/3/2023
City of Watsonville Emergency Proclamation - 1/3/2023
January 4-5, 2023 – Not as significant Rain as forecasted, Extreme winds, slope failures, Coastal Damage (Alignment of High Tide, Storm Surge, and Extreme Ocean Swells) County of Santa Cruz Emergency Proclamation – 1/6/2023
January 8-9, 2023 – Significant Flooding in San Lorenzo River, Soquel Creek, Aptos Creek, Corralitos & Salsipuedes Creek, Flood Risk of Pajaro River (Levee Repair and Reinforcement Actions), Landslides, road failures January 13-14, 2023 -Flooding in San Lorenzo River, Aptos Creek, Corralitos & Salsipuedes Creek, Flood Risk of Pajaro River, Landslides, road failures
Presidential Disaster Declaration - 1/14/2023

Multiple Atmospheric Events
December 30-31, 2022 - Flooding in Corralitos, Salsipuedes, and upstream watersheds resulted in overtopping of Corralitos Creek in unleveed reach downstream of Green Valley Road. Once overtopped, brought rush of water and mud debris that ultimately flooded Bay Village neighborhood.

January 4-5, 2-23 - Not as significant rain event as forecast by NOAA. Corralitos Creek did not overtop, no flooding in Bay Village Neighborhood.

January 8-9, 2023 - Significant flooding on Corralitos, Salsipuedes and upstream watersheds.

Corralitos overtopped in same location, though this time without significant mud or debris. Flood risk on Pajaro River.

January 13-14, 2023 - Flooding on Corralitos, Salsipuedes Creek, but did not overtop, therefore no flooding in Bay Village Neighborhood. Flood risk on Pajaro River.

Rainfall Totals - 12/26/22 thru 1/17/23

Corralitos Creek at Freedom
Dec 26, 2022 - January 25, 2023

Flood Warning System

Storm Sewer System
Function
● Designed to convey
stormwater collected from
roadway during rain events
● Gravity fed to creek when
levels low enough
● As creek levels rise, sluice
gates are closed and storm
sewers are drained by pump

Pump Station Operation & Maintenance
● Pump stations designed with
more pumps than required for
redundancy
● Continuous monitoring and
automatic alarm calls outs for
stand by staff 24-7.
● Monthly checks of pump stations
● Pump operating noise: normal vs.
generator power

● 5 operations staff on call and available the
entire weekend, as well as 1 electrical
maintenance staff.
● Staff on-site December 30th through 31st.

All 6 staff on site by afternoon of 31st.
● Continuously monitoring creek levels, pump
operation, and drainage inlets.

ALL PUMP STATIONS OPERATED AS

INTENDED THROUGH THE

ATMOSPHERIC RIVER EVENTS
December 30-31st
Atmospheric River Event

Why Did Bay Village Neighborhood Flood?
Weather Forecast
Location
100 Year flood plain
What happened?
Corralitos Creek breached its banks resulting
in sudden and unexpected flow across farm
fields carrying mud and debris.

Climate Change
Shorter rainy season
Higher intensity

What Does This Mean
● Flooded areas matched FEMA 100-year
flood maps and historical flooding patterns.
● Highlights the importance of flood insurance
for residents in the FEMA flood zone and the
CRS program
● $400 million Levee Project by US Army
Corps and PRFMA JPA is a critical
infrastructure need that is already in
progress. First Phase of construction
anticipated to begin 2025.

Questions

2/16/2023 6:25:51 PM
C:\Program Files\eSCRIBE\TEMP\18254767181\18254767181,,,Community Compost Give Back Presentation by the Solid Waste Division.docx
Agenda Report
MEETING DATE: Tuesday, February 21, 2023
TO: City Council
FROM: INTERIM PUBLIC WORKS & UTILITIES DIRECTOR VIDES

ASST PUBLIC WORKS & UTILITIES DIRECTOR GREEN

SR ENVIRONMENTAL PROJECTS ANALYST STOLZENTHALER
THROUGH: CITY MANAGER MENDEZ
SUBJECT: COMMUNITY COMPOST GIVE BACK PRESENTATION
RECOMMENDED ACTION:

No action is required by the City Council. Council will be informed about the beneficial Community Compost Give Back to residents.

BACKGROUND:

Free community compost will be available for City residents starting March 1, 2023, at the Watsonville Recycling & Waste Center. This high-quality compost is the benefit of successful organic green cart collections by Watsonville residents and businesses.

DISCUSSION:

The City is required by California Senate Bill 1383 to procure the equivalent of 4,109 tons annually of compost processed from food and yard waste. The city delivers organic waste from our City green cart collection service to the Keith Day Company composting facility in Marina where it is then sifted and processed to produce a high-quality compost mix.

The City has received its first 10 tons of compost for our Community Compost Give Back pilot program. Commencing March 1, 2023, the compost will be made available free of charge for residents.

The compost give-back station will be at the Waste and Recycling Center located at 320 Harvest Drive. For this pilot program, distribution will be limited to residential use only, no commercial vehicles. Residents should bring their own containers and shovels as the station will be self-serve. The quantity available will be limited to a half-ton per resident to minimize wait times. Compost is available on a first-come, first-served basis until supplies run out. Outreach on this service will be present on social media, in print, and at community events and locations.

2/16/2023 6:25:51 PM
C:\Program Files\eSCRIBE\TEMP\18254767181\18254767181,,,Community Compost Give Back Presentation by the Solid Waste Division.docx
CEQA Determination. This item is not subject to review under CEQA as it does not constitute a “project” as defined by CEQA. California Public Resources Code Section 21065 defines a project as an activity that will cause a direct physical change or a reasonably foreseeable indirect physical change in the environment. Accepting offers of dedication will do neither.

STRATEGIC PLAN:

This project is consistent with Strategic Plan Priority:
3-Infrastructure & Environment
FINANCIAL IMPACT:

No financial impact or action is foreseen at this time from implementing this pilot program.

ALTERNATIVE ACTION:

No action – presentation only.

ATTACHMENTS AND/OR REFERENCES (If any):

See Watsonville Community Compost brief slide show and video presentation.

2/16/2023 8:13:24 PM
C:\Program Files\eSCRIBE\TEMP\20132033186\20132033186,,,Report - Support for Amicus Brief prepared by City of Santa Cruz .docx Agenda Report
MEETING DATE: Tuesday, February 21, 2023
TO: City Council
FROM: CITY ATTORNEY ZUTLER
THROUGH: CITY MANAGER MENDEZ
SUBJECT: JOIN CITY OF SANTA CRUZ IN OFFERING AMICUS SUPPORT

TO GRANT PARK NEIGHBORHOOD ASSOC V CA

DEPARTMENT OF PUBLIC HEALTH
RECOMMENDED ACTION:

Motion to authorize the City Attorney to sign on, indicating support of the City of Watsonville, to the amicus brief prepared by the City of Santa Cruz and filed in support of Petitioner/ appellants in Grant Park Neighborhood Association vs. CA Department of Public Health
BACKGROUND:

In Grant Park Neighborhood Association vs. CA Department of Public Health, a group of neighbors challenged the California Department of Public Health’s (CDPH) authorization of a needle exchange program run by Harm Reduction Coalition of Santa Cruz County (HRCSCC). The court denied the neighbors’ petition. The neighbors are appealing, and the City of Santa Cruz is filing an amicus brief in support of the neighbors. Santa Cruz is asking other cities in the County to sign onto the amicus brief, to show our support.

DISCUSSION:

Health and Safety Code Section 121349(c) provides that CDPH may authorize applicants to provide hypodermic needle and syringe exchange services consistent with State standards in certain locations. Before authorizing a program, CDPH is required to consult with the local health officer and local law enforcement, and receive public comment. (H&S Section 121349) The statute requires that, in deciding whether or not to authorize a program, CDPH “balance the concerns of law enforcement with the public health benefits.” Multiple County police chiefs, including former Watsonville Chief Honda, wrote letters to CDPH asking them not to authorize the HRCSCC program. HRCSCC authorized the program anyway, and the neighbors sued, alleging CDPH (and various other defendants/ respondents) violated the California Environmental Quality Act (CEQA), created a nuisance, and abused its discretion. The neighbors sought damages,

2/16/2023 8:13:24 PM
C:\Program Files\eSCRIBE\TEMP\20132033186\20132033186,,,Report - Support for Amicus Brief prepared by City of Santa Cruz .docx attorney’s fees, declaratory relief and an injunction requiring CDPH to rescind any authorization for HRCSCC to operate in the County.

The City of Santa Cruz if preparing an amicus brief (“friend of the court”) in support of the Neighborhood Association’s appeal of the Court’s ruling. Santa Cruz’s brief will focus on the requirement that CA Department of Public Health’s obligation to “consult” with local law enforcement before authorizing syringe exchange programs. Santa Cruz has indicated that the League of California Cities will also sign onto the brief, as will (likely) the City of Scotts Valley.

STRATEGIC PLAN:
5-Community Engagement & Well-Being
6-Public Safety
FINANCIAL IMPACT:

Signing on to the City of Santa Cruz’s amicus brief will have no cost to the City.

ALTERNATIVE ACTION:

The Council could decide not to sign on to the City of Santa Cruz’s amicus brief.

ATTACHMENTS AND/OR REFERENCES (If any):

Grant Park Neighborhood Association Advocates, Melissa Freebairn, Johnny Font, Kevin Vogel, and Renee Golder vs. California Department of Public Health, Shandra Shewry, Dr. Erica Pan, Harm Reduction Coalition of Santa Cruz County, Denise Elerick, and Does 1-50, Verified Complaint and Petition (Sacramento Superior Court, Case No. 34- 2020-80003551)
December 6, 2021 Order After Hearing on Petition for Writ of Mandate

2/16/2023 1:31:35 PM2/15/2023 4:56:00 PM
C:\Program Files\eSCRIBE\TEMP\13313163504\13313163504,,,Report - Griffin Structures 1st Contract Amendment.docxP:\FORMS\Agenda Report Template.doc
Agenda Report
MEETING DATE: Tuesday, February 21, 2023
TO: City Council
FROM: PARKS & COMMUNITY SERVICES DIRECTOR CALUBAQUIB
THROUGH: CITY MANAGER MENDEZ
SUBJECT: RESOLUTION APPROVING AMENDMENT NO. 1 WITH GRIFFIN STRUCTURES, INC., FOR PROJECT MANAGEMENT SERVICES

FOR THE RAMSAY PARK MASTER PLAN IMPLEMENTATION IN
AN AMOUNT NOT EXCEED $283,700.

RECOMMENDED ACTION:

It is recommended that the Council adopt a resolution approving Contract Amendment No. 1 with Griffin Structures, Inc., for project management services for implementation of the Ramsay Park Master Plan (Ramsay Park Improvement Project) in an amount not to exceed $283,700; and authorizing and directing the City Manager to execute same.

BACKGROUND:

On August 24, 2021 the Council adopted Resolution No. 218-21 awarding a contract to Griffin Structures, Inc., for project management services for the Ramsay Park Master plan. For the past 17 months, Griffin has provided services covering Program and PreDesign Management (defining the scope, communications, schedule development, budgetary control) and Design Management (fidelity of budget, schedule, design documents; value engineering and quality control). We are close to the end of the design process, with the next steps of permitting and bidding out the project.

DISCUSSION:

As the City moves into the next phase on the landmark project of a major renovation of Ramsay Park, staff would like to retain Griffin’s services for project management from the permitting process to the bidding period, then through the construction phase to the end of the project. The consultant’s extensive experience in providing project and construction management services for parks, sports complexes and recreation facilities will be invaluable in managing a project of this size. Their duties will include the processing of documents, bid reviews, RFI’s, submittals, change orders, invoicing and general oversight.

Griffin’s experience on parks and sports complexes of this size is the primary reason we would like to continue our working relationship. To date, their knowledge with the

2/16/2023 1:31:35 PM2/15/2023 4:56:00 PM
C:\Program Files\eSCRIBE\TEMP\13313163504\13313163504,,,Report - Griffin Structures 1st Contract Amendment.docxP:\FORMS\Agenda Report Template.doc
construction of larger projects, the eye for detail, and the extensive resume of previous projects has already proven beneficial through the design process. Staff recommends the Council to approve Amendment No. 1 to the Project Management Contract with Griffin Structures, Inc., in the amount of $283,700.

STRATEGIC PLAN:

This recommendation is consistent with a number of Council Strategic Goals, such as 03- Infrastructure & Environment, for replacing aging park infrastructure and improving the environment and 05-Community Engagement & Well-Being, for enhancing recreational and exercise opportunities.

FINANCIAL IMPACT:

The original contract amount was $150,000. The recommendation is to increase this contract by $283,700, to a total of $433,700. Funding for these project management services are included in the adopted Fiscal Year 2022- 23 Capital Improvement Plan (CIP) budget: 0150-901-7361-14923.

ALTERNATIVE ACTION:

The Council could elect not to approve this amendment.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

Reso No. (CM)
Meeting Date: 022123 1
RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE APPROVING FIRST AMENDMENT TO PROFESSIONAL

SERVICES CONTRACT BETWEEN CITY OF WATSONVILLE AND
GRIFFIN STRUCTURES, INC., A CORPORATION, ADDING TO THE

SCOPE OF WORK, INCREASING CONTRACT COMPENSATION BY
$283,700; EXTENDING THE TERM OF THE CONTRACT TO DECEMBER 31, 2024; AND AUTHORIZING AND DIRECTING THE CITY MANAGER

TO EXECUTE SAME
WHEREAS, on August 24, 2021, Council adopted Resolution No. 218-21 (CM) awarding Contract for Professional Services to Griffin Structures, Inc, for Project Management Services for the Implementation of the Ramsay Park Master Plan (Ramsay Park Improvement Project) in an amount not to exceed $150,000; and WHEREAS, § 3-5.170 of the Municipal Code provides that amendments to contracts that reasonably relate to the scope of the original contract, are based on postaward information that requires modification of the contract based on changes in scope and were originally approved by Council shall be approved by Council; and WHEREAS, this First Amendment to the Contract will add to the scope of work, increase contract compensation by $283,700.00, bringing the total contract amount to $433,700.00 and extend the contract term from June 30, 2023 to December 31, 2024.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution approving First Amendment to Contract with Griffin Structures, Inc., does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

Reso No. (CM)
Meeting Date: 022123 2

2. This First Amendment to Contract between the City of Watsonville and Griffin Structures, Inc., a corporation, a copy of which is attached hereto and incorporated herein by this reference, is hereby approved.

3. The City Manager is hereby authorized and directed to execute said First Amendment for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney.
**************************************

2/16/2023 1:36:15 PM
C:\Program Files\eSCRIBE\TEMP\13361217830\13361217830,,,Report - Award Contract for Park Facilities Assessment .docx Agenda Report
MEETING DATE: Tuesday, February 21, 2023
TO: City Council
FROM: PARKS & COMMUNITY SERVICES DIRECTOR CALUBAQUIB
THROUGH: CITY MANAGER MENDEZ
SUBJECT: RESOLUTION AWARDING CONTRACT TO CALLANDER

ASSOCIATES LANDSCAPE ARCHITECTURE NOT TO EXCEED
$199,238.38 FOR PARKS FACILITY ASSESSMENT STUDY
RECOMMENDED ACTION:

That the City Council adopt a resolution awarding a contract to Callander Associates Landscape Architecture, Inc., in an amount not to exceed $199,238.38 for the Parks Facility Assessment Study utilizing funds from CIP account 0150-901-7820-15020 and authorizing the City Manager to execute the contract.

BACKGROUND:

On January 6, 2023, the City released a Request for Proposals (RFP) inviting all interested and qualified consultant teams with expertise in project management, landscape architecture, civil engineering, cost estimating, and other trades, with proven experience in parks and recreation facility design and construction administration to submit a project proposal to conduct a Park Facility Assessment Study.

This Study includes 24 of the City’s 26 parks, excluding Ramsay and City Plaza. The City is working in partnership with Santa Cruz County Parks and this study also includes five (5) County of Santa Cruz Parks that fall within South County and/or Watsonville’s sphere of influence. The County will reimburse the City for project costs associated with County parks. It is the intent of the City to hire a qualified consultant who can provide assessments and field review, proposed improvements, estimate of improvements costs and priority for implementation of improvements at each of the specified City Park facilities. The final product sought is a Park Facility Assessment Report.

The intent of this study is to inventory and examine each Park and determine when systems will need to be replaced. The assessment study will include the examination of the features, amenities, hardscape, landscape, electrical, and irrigation systems which are key to keeping these Park facilities safe and functioning. This study will also identify park enhancements desired by the community.

2/16/2023 1:36:15 PM
C:\Program Files\eSCRIBE\TEMP\13361217830\13361217830,,,Report - Award Contract for Park Facilities Assessment .docx The study will result in a Park Facility Assessment Report that will include priorities for funding. This will be used to develop a system-wide Park Improvement and Equity Plan for maintaining, renovating, and ultimately replacing facilities. In addition, the scope of work includes the creation of a GIS database of inventory for each park.

Results from this study will be used to prioritize needs with an equity lens and to recommend a funding and CIP plan, primarily utilizing revenue from the recently approved Measure R local sales tax.

DISCUSSION:

Proposals were due on February 3, 2023 and the City received responses from four firms:

Firm Local Office Cost Proposal
Bureau Veritas Sacramento, CA City: $134,518
County: $32,725
Facility Engineering
Associates
Santa Rosa, CA $150,494 (no price
breakdown submitted)
Callander Associates San Jose, CA City: $181,692
County: $17,546
Verde Santa Clara, CA City: $210,225
County: $91,405
A selection panel comprising of City and County employees reviewed proposals and conducted interviews with firms on February 8, 2023. Upon review, the panel recommended that Callander Associates Landscape Architecture (CALA) be awarded a contract for this project. CALA was selected for their relevant experience in conducting recent similar studies for other California cities, their ability to customize criteria for prioritization of facility repairs/replacement, their experience and approach to community engagement and their previous experience in working with the City of Watsonville.

STRATEGIC PLAN:
 3-Infrastructure & Environment – This project collects data to be used for planning and budgeting for City infrastructure needs.
 5-Community Engagement & Well-Being – The City and County parks included in this assessment directly contribute to the well-being of community members. The timeline for this project also includes a series of community meetings to help identify needs and priorities.
 6-Public Safety – This project will assess safety concerns in our City parks. Parks also contribute to our community’s sense of safety and security.

FINANCIAL IMPACT:

The contract for this project is for a not to exceed amount of $199,238.38 that will be charged to CIP 0150-7820-15020. This CIP is included in the adopted FY 2022-2023 budget. The City will contract with the County of Santa Cruz to get reimbursement of their portion of the contract.

2/16/2023 1:36:15 PM
C:\Program Files\eSCRIBE\TEMP\13361217830\13361217830,,,Report - Award Contract for Park Facilities Assessment .docx ALTERNATIVE ACTION:

The Council could elect to:
 Not adopt this resolution and the project would not move forward, or  Adopt a resolution awarding the contract to an alternative firm.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

Reso No. (CM)
Meeting Date: 022123 1
RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE AWARDING PROFESSIONAL SERVICES CONTRACT
TO CALLANDER ASSOCIATES LANDSCAPE ARCHITECTURE, INC., A

CORPORATION, FOR A PARKS FACILITY ASSESSMENT STUDY, IN AN AMOUNT NOT TO EXCEED $199,238.38; AND AUTHORIZING AND

DIRECTING THE CITY MANAGER TO EXECUTE SAME
WHEREAS, § 3-5.500 of the Municipal code provides that an RFP or RFQ process is found to be an effective and efficient way to procure professional services and procurement of professional services shall be based on proposals solicited from capable professionals and be evaluated based on a combination of factors including education, training, experience and demonstrated competence and professional qualifications necessary for the satisfactory performance of the services required; and WHEREAS, § 3-5.540 of the Municipal Code provides that contracts for professional services estimated to cost more than One Hundred Thousand and no/100ths ($100,000.00) Dollars must be awarded by the Council, and that the selection will be based on demonstrated competence and on the education, training and experience and professional qualifications necessary for the satisfactory performance of the services required, that cost will not be the only basis for selection, use a qualifications-based selection process as described in subdivision (a) of § 45271 of the California Government Code and negotiated as described in § 4528; and WHEREAS, a Request for Proposals (RFP) was issued on January 6, 2023, asking for qualified consultants to assist the City to conduct a Park Facility Assessment Study; and
WHEREAS, the deadline for submittal of Request for Statement of Qualifications was February 3, 2023; and

1 All references to section numbers will be to the California Government Code

Reso No. (CM)
Meeting Date: 022123 2
WHEREAS, a total of four (4) firms submitted qualification statements; these statements were reviewed by City staff and a list was developed; and WHEREAS, the City Manager has recommended that the proposal from Callander Associates Landscape Architecture, Inc., in an amount not to exceed $199,238.38, be accepted as the best response.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution awarding a Contract to Callander Associates Landscape Architecture does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. The Council awards a contract to Callander Associates Landscape Architecture, for a Park Facility Assessment Study, in an amount not to exceed $199,238.38.

3. That the Contract for Consultant Services between the City of Watsonville and Callander Associates Landscape Architecture, a copy of which is attached hereto and incorporated herein by this reference, is hereby approved.

4. Consultant shall file FPPC form 700s and 805s pursuant to section 19 of the Contract.

5. The City Manager is hereby authorized and directed to execute said contract for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney.
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CONTRACT FOR CONSULTANT SERVICES BETWEEN

THE CITY OF WATSONVILLE AND CALLANDER ASSOCIATES LANDSCAPE ARCHTECTURE, INC.

THIS CONTRACT, is made and entered into this ______________________, by and between the City of Watsonville, a municipal corporation, hereinafter called “City,” and Callander Associates Landscape Architecture, Inc. hereinafter called "Consultant."

WITNESSETH
WHEREAS, the City needs to obtain certain professional, technical and/or specialized services of an independent contractor to assist the City in the most economical manner; and
WHEREAS, Consultant has the requisite skill, training, qualifications, and experience to render such services called for under this Contract to City.

THE PARTIES HEREBY AGREE AS FOLLOWS:

SECTION 1. SCOPE OF SERVICES. Consultant shall perform those services as specified in detail in Exhibit "A," entitled "SCOPE OF SERVICES" which is attached hereto and incorporated herein.

SECTION 2. TERM OF CONTRACT. The term of this Contract shall be from March 1, 2023 to December 31, 2023, inclusive.

SECTION 3. SCHEDULE OF PERFORMANCE. The services of Consultant are to be completed according to the schedule set out in Exhibit "B," entitled "SCHEDULE OF PERFORMANCE," which is attached hereto and incorporated herein. Consultant will diligently proceed with the agreed Scope of Services and will provide such services in a timely manner in accordance with the "SCHEDULE OF PERFORMANCE." SECTION 4. COMPENSATION. The compensation to be paid to Consultant including both payment for professional services and reimbursable expenses as well as the rate and schedule of payment are set out in Exhibit "C" entitled "COMPENSATION," which is attached hereto and incorporated herein.

SECTION 5. METHOD OF PAYMENT. Except as otherwise provided in Exhibit "C," each month, Consultant shall furnish to the City a statement of the work performed for compensation during the preceding month. Such statement shall also include a detailed record of the month's actual reimbursable expenditures.

SECTION 6. INDEPENDENT CONSULTANT. It is understood and agreed that Consultant, in the performance of the work and services agreed to be performed by Consultant, shall act as and be an independent Consultant and not an agent or employee of City, and as an independent Consultant, shall obtain no rights to retirement

benefits or other benefits which accrue to City's employees, and Consultant hereby expressly waives any claim it may have to any such rights.

SECTION 7. ASSIGNABILITY. Consultant shall not assign or transfer any interest in this Contract nor the performance of any of Consultant's obligations hereunder, without the prior written consent of City, and any attempt by Consultant to so assign this Contract or any rights, duties or obligations arising hereunder shall be void and of no effect.

SECTION 8. INDEMNIFICATION.

To the full extent permitted by law (subject to the limitations of Civil Code section 2782.8 for any “design professional services” performed under this Contract), Consultant will indemnify, hold harmless, release and defend the City (including its officers, elected or appointed officials, employees, volunteers or agents) from and against any and all liability or claims (including actions, demands, damages, injuries, settlements, losses or costs [including legal costs and attorney’s fees])(collectively “Liability”) of any nature, to the extent arising out of, pertaining to, or relating to Consultant’s negligence, recklessness, or willful misconduct in the performance of this Contract. In no event shall the cost to defend charged to the Consultant exceed the Consultant’s proportionate percentage of fault. Consultant’s indemnification obligations under this Contract are not limited by any limitations of any insurance held by Consultant, including, but not limited to, workers compensation insurance.

SECTION 9. INSURANCE.

A. Errors and Omissions Insurance. Consultant shall obtain and maintain in full force throughout the term of this Contract a professional liability insurance policy (Errors and Omissions), in a company authorized to issue such insurance in the State of California, with limits of liability of not less than One Million Dollars ($1,000,000.00) to cover all professional services rendered pursuant to this Contract.

B. Auto and Commercial General Liability Insurance. Consultant shall also maintain in full force and effect for the term of this Contract, automobile insurance and commercial general liability insurance with an insurance carrier satisfactory to City, which insurance shall include protection against claims arising from bodily and personal injury, including death resulting therefrom, and damage to property resulting from any actual occurrence arising out of the performance of this Contract. The amounts of insurance shall not be less than the following:
(1) Commercial general liability insurance, or equivalent form, with a combined single limit of not less than $500,000.00 per occurrence. If such insurance contains a general aggregate limit, such limit shall apply separately to each project Consultant performs for City. Such insurance shall (a) name City, its appointed and elected officials, and its employees as insureds; and (b) be primary with respect to insurance or self-insurance programs maintained by City and (c) contain standard separation of insured's provisions.

(2) Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $500,000.00 per occurrence. Such insurance shall include coverage for owned, hired and non-owned automobiles.

C. Workers’ Compensation Insurance. In accordance with the provisions of Section 3700 of the Labor Code, Consultant shall be insured against liability for Workers’ Compensation or undertake self-insurance. Consultant agrees to comply with such provisions before commencing performance of any work under this Contract.

D. Proof of Insurance to City before Notice to Proceed to Work. Consultant shall satisfactorily provide certificates and endorsements of insurance to the City Clerk before Notice to Proceed to Work of this Contract will be issued. Certificates and policies shall state that the policy shall not be canceled or reduced in coverage without thirty (30) days written notice to City. Approval of insurance by City shall not relieve or decrease the extent to which Consultant may be held responsible for payment of damages resulting from services or operations performed pursuant to this Contract.

Consultant shall not perform any work under this Contract until Consultant has obtained the required insurance and until the required certificates have been submitted to the City and approved by the City Attorney. If Consultant fails or refuses to produce or maintain the insurance required by these provisions, or fails or refuses to furnish City required proof that insurance has been procured and is in force and paid for, City shall have the right at City's election to forthwith terminate this Contract immediately without any financial or contractual obligation to the City. As a result of such termination, the City reserves the right to employ another consultant to complete the project.

E. Written notice. Contractor shall provide immediate written notice if (1) any insurance policy required by this Contract is terminated; (2) any policy limit is reduced; (3) or any deductible or self insured retention is increased.

SECTION 10. NON-DISCRIMINATION. Consultant shall not discriminate, in any way, against any person on the basis of age, sex, race, color, creed, national origin or disability in connection with or related to the performance of this Contract.

SECTION 11. TERMINATION.

A. City and Consultant shall have the right to terminate this Contract, without cause, by giving not less than ten (10) days written notice of termination.

B. If Consultant fails to perform any of its material obligations under this Contract, in addition to all other remedies provided by law, City may terminate this Contract immediately upon written notice.

C. The City Manager is empowered to terminate this Contract on behalf of City.

D. In the event of termination, Consultant shall deliver to City copies of all work papers, schedules, reports and other work performed by Consultant and upon receipt thereof, Consultant shall be paid in full for services performed and reimbursable expenses incurred to the date of termination.

SECTION 12. COMPLIANCE WITH LAWS. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments. Consultant shall obtain and maintain a City of Watsonville business license during the term of this Contract.

SECTION 13. GOVERNING LAW. City and Consultant agree that the law governing this Contract shall be that of the State of California. Any suit brought by either party against the other arising out of the performance of this Contract shall be filed and maintained in the Municipal or Superior Court of the County of Santa Cruz.

SECTION 14. PRIOR CONTRACTS AND AMENDMENTS. This Contract represents the entire understanding of the parties as to those matters contained herein.

No prior oral or written understanding shall be of any force or effect with respect to those matters covered hereunder. This Contract may only be modified by a written amendment.

SECTION 15. CONFIDENTIAL INFORMATION. All data, documents, discussions or other information developed or received by or for Consultant in performance of this Contract are confidential and not to be disclosed to any person except as authorized by the City Manager or his designee, or as required by law.

SECTION 16. OWNERSHIP OF MATERIALS. All reports, documents or other materials developed or received by Consultant or any other person engaged directly by Consultant to perform the services required hereunder shall be and remain the property of City without restriction or limitation upon their use.

SECTION 17. COVENANT AGAINST CONTINGENT FEES. The Consultant covenants that Consultant has not employed or retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure the Contract, and that Consultant has not paid or agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fees, commissions, percentage, brokerage fee, gift, or any other consideration contingent on or resulting from the award or making of this Contract, for breach or violation of this covenant, the City shall have the right to annul this Contract without liability, or in its discretion, to deduct from the Contract price or consideration or otherwise recover, the full amount of such fee, commission, percentage fee, gift, or contingency.

SECTION 18. WAIVER. Consultant agrees that waiver by City or any one or more of the conditions of performance under this Contract shall not be construed as waiver of any other condition of performance under this Contract.

SECTION 19. CONFLICT OF INTEREST.

A. A Consultant shall avoid all conflict of interest or appearance of conflict of interest in performance of this Contract. Consultant shall file a disclosure statement, if required by City Council Resolution, which shall be filed within thirty (30) days from the effective date of this Contract or such Resolution, as applicable.

B. No member, officer, or employee of the City, during their tenure, or for one (1) year thereafter, shall have any interest, direct or indirect, in this Contract or the proceeds thereof and Consultant agrees not to allow, permit, grant, transfer, or otherwise do anything which will result in such member, officer, or employee of the City from having such interest.

SECTION 20. AUDIT BOOKS AND RECORDS. Consultant shall make available to City, its authorized agents, officers and employees, for examination any and all ledgers and books of account, invoices, vouchers, canceled checks and other records or documents evidencing or related to the expenditures and disbursements charged to the City, and shall furnish to City, its authorized agents and employees, such other evidence or information as City may require with respect to any such expense or disbursement charged by Consultant.

SECTION 21. NOTICES. All notices shall be personally served or mailed, postage prepaid, to the following addresses, or to such other address as may be designated by written notice by the parties:

CITY
City Clerk’s Office
275 Main Street, Suite 400
Watsonville, CA 95076
(831) 768-3040

CONSULTANT
Callender Associates Landscape
Architecture, Inc.
2025 Gateway Place, Suite 285
San Jose, CA 95110
(408) 275-0565
SECTION 22. EXHIBITS:

Exhibit A: Scope of Services
Exhibit B: Schedule of Performance
Exhibit C: Compensation
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WITNESS THE EXECUTION HEREOF, on the day and year first hereinabove written.

CITY

CITY OF WATSONVILLE
BY ______________________________
Rene Mendez, City Manager
ATTEST:

BY ______________________________
Irwin I. Ortiz, City Clerk
APPROVED AS TO FORM:

BY ______________________________
Samantha W. Zutler, City Attorney

CONSULTANT

CALLANDER ASSOCIATES LANDSCAPE
ARCHTECTURE, INC.

BY_________________________________
Marie Mai, Principal

EXHIBIT "A"

SCOPE OF SERVICES
Scope of Services is as follows (Items shown in boldface italics are deliverables; an electronic pdf copy will be provided unless noted otherwise.)

PROJECT MANAGEMENT

1.01 Kick-off Meeting: Meet with City staff in a single virtual meeting to discuss project drivers, objectives, approach, key concerns, team member roles, and other aspects of the project. Key meeting objectives include identification of major stakeholders, discussion of project protocols, review of schedule milestones, and preliminary listing of Project Advisory Committee (PAC) members – City and County parks and maintenance staff. Prepare meeting agenda and summary and distribute to attendees.

1.02 Project Schedule: Prepare a detailed project schedule in MS Project format and maintain throughout the course of the project. Schedule will be modified and submitted on a monthly basis with completed tasks and critical path items clearly indicated.

DATA REVIEW

2.01 Document Review: Review project background information provided by the City, including full GIS files and park record drawings. Task assumes that record drawings are available for each site (29 sites total, 4 with buildings/structures) and with sufficient site detail to provide an accurate, scalable base plan upon which GIS maps can be drafted. If these drawings are not available, CALA will attempt to draft in based upon Google aerial images and site observations, limited to the 3 hours per site that we have budgeted for this effort (see task 2.02 and 2.05).

2.02 GIS Example Inventory: Prepare example GIS data file for one representative park site to illustrate proposed inventory method and level of detail. Set file layering, naming, color, and formatting standards in collaboration with City staff. Prepare summary of numerical ranking system and corresponding evaluation criteria for each park asset. Submit shapefiles to City and test access, ease-of-use, and compatibility with City and County GIS system.

2.03 Review Meeting #1: Allow for a meeting with PAC members to review input on files, collaborate on refinements, and determine direction for proceeding. Prepare meeting summary and distribute to attendees.

2.04 GIS Data File Refinements: Based on input received from above, modify data file.

2.05 GIS Database Assembly: Based on approved example data file, prepare GIS data files for remaining 28 park sites.

DATA COLLECTION

3.01 Develop Analysis Criteria: In conjunction with City staff and with careful consideration given to the suggestions in the RFP, prepare draft analysis criteria.

Analysis criteria to be an elaboration on the items noted in the RFP (lighting, irrigation, etc.) with further breakdown of specific field evaluation to be performed (electrolier condition, location, irrigation backflow preventor type, sprinkler type, etc.).

3.02 Sample Inventory: Work with City staff to identify one representative sample site.

Visit the site for purposes of de-bugging and refining the inventory process. Photo document and add inventory data digitally to GIS database.

3.03 Review Meeting #2: Compile the initial findings into a inventory summary table and meet with PAC members to discuss initial findings and possible enhancements to methodology and captured content. Reach agreement on refinements to both and document these refinements in a meeting summary distributed to the attendees.

3.04 Draft GIS Database: Based on input from above, refine and modify the GIS database to reflect the agreed-upon direction.

3.05 Bulk Inventory: Inventory the remaining 28 sites and add inventory data digitally to GIS database. Compile the findings into an inventory summary table for each site for PAC members to review. Our assessment will be based on readily observable conditions and data on inaccessible elements such as irrigation, drainage, and electrical systems will be provided by park staff based on a questionnaire prepared by CALA.

3.06 Final GIS Database: Based upon findings from bulk inventory visits, make minor modifications and finalize GIS database for use in cost estimating and ranking.

3.07 Cost Estimating: Prepare a rough order of magnitude cost estimate for each park suitable for planning purposes. Utilize recent park bid results to estimate unit prices, GIS data to identify quantities of each amenity, and include upcharges to accommodate other items such as bonding and mobilization. Cost estimates are intended to reflect total costs the City would incur in implementing the improvements and will therefore include soft costs (design, permitting, administration) as well as construction costs.

3.08 Ranking Methodology: The experience of visiting all the sites will be beneficial in formulating our thoughts on improvement priorities. Based on this experience and dialogue over the course of the project with PAC and staff members, we will prepare a proposed ranking methodology. Ranking categories shall include the condition, community priorities from task 4.0, and social equity (based on available GIS/Demographics data).

3.09 Review Meeting #3: Allow for a meeting with PAC members to review input on costs and ranking, and determine direction for proceeding. Prepare written meeting summary.

INPUT MEETINGS AND PRESENTATIONS

4.01 Prepare Meeting Graphics: In conjunction with City staff, prepare meeting graphics to include for each park site: existing site plan with list of park amenities and existing conditions image board. Prepare Citywide map showing grouping of parks and focus of each community meeting and project objectives board. Incorporate Spanish translation provided by City staff. Provide hard copy of final graphics at community meetings.

4.02 Community Meeting #1: Host a public meeting on the park site, at the Public Library or other space as proposed by City staff. Present the initial group of 10 park sites and solicit input. Capture input and prepare a meeting summary to be submitted to City and posted to City web site with presentation materials.

4.03 Community Meeting #2: Present the second group of 10 park sites and solicit input. Prepare a meeting summary to be submitted to City and posted to City web site with presentation materials.

4.04 Community Meeting #3: Present the final group of 9 park sites and solicit input.

Prepare a meeting summary to be submitted to City and posted to City web site with presentation materials.

4.05 Park Priorities Summary: Prepare priorities summary describing input received from the community on each of the park sites. Summary to include a list of the top improvement priorities for each site. Incorporate the top priorities into the park ranking.

4.06 Review Meeting #4: Meet with PAC members to discuss findings and possible enhancements to methodology and captured content. Reach agreement on refinements to both and document these refinements in a meeting summary distributed to the attendees

4.07 City Parks and Recreation Commission Presentation: In conjunction with City staff, present the Draft Final Report to the Parks and Recreation Commission and solicit their input.

4.08 County Parks and Recreation Commission Presentation: In conjunction with City and County staff, present the Draft Final Report to the Parks and Recreation Commission and solicit their input.

4.09 County Board of Supervisors Presentation: In conjunction with City staff, present the Draft Final Report to the Board of Supervisors and solicit their input.

4.10 City Council Presentation: Present the Draft Final Report to the City Council at a regular meeting of the Council. Provide clarifications and respond to questions as called upon. Seek an approval or conditional approval of the report.

PARKS ASSESSMENT REPORT

5.01 Draft Improvements Ranking: Based on input on the proposed ranking methodology, perform a draft improvements ranking to identify the overall score of each park and improvement priorities and priority sites.

5.02 Review Meeting #5: Meet with PAC to present the draft improvements ranking and share implementation timeline and recommendations resulting from the ranking.

Discuss the findings and determine a direction for proceeding with refinements. Prepare and distribute a meeting summary.

5.03 Draft Report: Prepare a Draft Park Facilities Assessment Study report. Report contents to include: compilation of documents prepared to date including community priorities summary and improvements ranking; executive summary, goals and objectives, park cut sheets, ranking tables for highest priority assets, ranking table for overall park system, implementation schedule, and appendices (meeting summaries, cost estimates). To maximize the potential of the full report to act as a living document, contents will be furnished in digital format for ease of amending as warranted.

5.04 Report Refinement: Update the report per staff comments and resubmit to the City.

5.05 Final Report: Subsequent to the Council and Board of Supervisors meetings, make any final minor revisions to the report per Council and Board input. Provide ‘record copy’ hardcopy and a digital file of the final report to the City.

EXHIBIT “B”

SCHEDULE OF PERFORMANCE
Services shall commence immediately upon execution of this Contract. All services performed under the provisions of this Contract shall be completed in accordance with the following schedule:

All services to be completed by December 31, 2023

EXHIBIT “C”

COMPENSATION
a. Total Compensation. The total obligation of City under this Contract shall not exceed $199,238.38
b. Payment Request. Consultant shall submit a request for payment for services on a monthly basis by letter to Director, or said Director's designated representative. Such request for payment shall cover the preceding monthly period during the term hereof, shall note the City's purchase order number for this Contract, shall contain a detailed listing of the total number of items or tasks or hours for which payment is requested, the individual dates on which such services were rendered, and invoices for reimbursable expenses, if any. Upon receipt in the Office of Director of said payment request, Director shall cause payment to be initiated to Consultant for appropriate compensation.

Phase Description City County Combined

1.0 Background and Approach (lump sum) $ 3,375.00 $ 3,375.00

2.0 Data Review (lump sum) $ 38,146.00 $ 3,759.00 $ 41,905.00

3.0 Data Collection (lump sum) $ 64,578.00 $ 3,882.00 $ 68,460.00

4.0 Input Meetings and Presentations (lump sum) $ 17,446.00 $ 5,560.00 $ 23,006.00

5.0 Park Assessment Report (lump sum) $ 45,585.00 $ 3,351.00 $ 48,936.00 Sub Reimbursables & Mark Up (allowance) $ 3,715.50 $ 3,715.50 Reimbursables (allowance) $ 8,846.88 $ 994.00 $ 9,840.88 TOTAL COMPENSATION $ 181,692.38 17,546.00 $ $ 199,238.38

COST PROPOSAL Task Matrix City Park Facilities Assessment 2/3/2023 DTA BKF @ $240 @ $171 @ $148 @ $123 @ $183 architect civil Phase Description hrs $'s hrs $'s hrs $'s hrs $'s hrs $'s hrs $'s $'s $'s 1.0 Background and Approach 1.01 Kick-off Meeting 4.0 $ 960.00 6.0 1,026.00 $ 3.0 $ 1.0 123.00 444.00 $ - -$ 14.0 $ 2,553.00 $ - $ - 1.02 Project Schedule 2.0 $ 480.00 2.0 $ 342.00 - -$ - -$ - -$ 4.0 $ 822.00 $ - $ - SUBTOTAL 1.0 6.0 1,440.0 8.0 1,368.0 3.0 444.0 1.0 123.0 - - 18.0 3,375.0 $ - $ - Subconsultant Administration 10% $ - $ - 2.0 Data Review 2.01 Document Review 2.0 $ 480.00 8.0 1,368.00 $ 8.0 1,184.00 $ - -$ - -$ 18.0 $ 3,032.00 $ 1,425.00 $ 2,000.00

2.02 GIS Example Inventory 3.0 $ 24.0 720.00 $ 4,104.00 24.0 3,552.00 $ 1.0 123.00 $ - -$ 52.0 $ 8,499.00 $ - $ -

2.03 Review Meeting #1 2.0 $ 480.00 6.0 1,026.00 $ 6.0 $ 888.00 -$ - -$ 14.0 $ 2,394.00 $ - $ -

2.04 GIS Data File Refinements 2.0 $ 480.00 8.0 1,368.00 $ 16.0 2,368.00 $ 1.0 123.00 $ - -$ 27.0 $ 4,339.00 $ - $ -2.05 GIS Database Assembly 3.0 $ 24.0 720.00 $ 4,104.00 15,392.00 104.0 $ - -$ - -$ 131.0 $ 20,216.00 $ - $ - SUBTOTAL 2.0 12.0 2,880.00 $ 11,970.00 70.0 $ 23,384.00 158.0 $ 246.00 2.0 $ - -$ 242.0 $ 38,480.00 $ 1,425.00 $ 2,000.00 Subconsultant Administration 10% $ 142.50 $ 200.00

3.0 Data Collection3.01 Develop Analysis Criteria 1.0 $ 240.00 8.0 1,368.00 $ 8.0 1,184.00 $ - -$ - -$ 17.0 $ 2,792.00 $ - $ -

3.02 Sample Inventory 1.0 $ 240.00 8.0 1,368.00 $ 12.0 1,776.00 $ 2.0 246.00 $ - -$ 23.0 $ 3,630.00 $ - $ -3.03 Review Meeting #2 2.0 $ 480.00 3.0 $ 513.00 3.0 $ 444.00 -$ - -$ 8.0 $ 1,437.00 $ - $ -

3.04 Draft GIS Data Files 1.0 $ 240.00 6.0 1,026.00 $ 8.0 1,184.00 $ 2.0 246.00 $ - -$ 17.0 $ 2,696.00 $ - $ -

3.05 Bulk Inventory 4.0 $ 24.0 960.00 $ 4,104.00 15,984.00 108.0 $ - -$ - -$ 136.0 $ 21,048.00 $ 13,290.00 $ 8,500.00

3.06 Final GIS Data Files 2.0 $ 480.00 6.0 1,026.00 $ 8.0 1,184.00 $ 1.0 123.00 $ - -$ 17.0 $ 2,813.00 $ - $ -3.07 Cost Estimating 4.0 $ 12.0 960.00 $ 2,052.00 8.0 1,184.00 $ 2.0 246.00 $ 4.0 732.00 $ 30.0 $ 5,174.00 $ - $ -

3.08 Ranking Methodology 4.0 $ 12.0 960.00 $ 2,052.00 12.0 1,776.00 $ 1.0 123.00 $ 4.0 732.00 $ 33.0 $ 5,643.00 $ - $ -

3.09 Review Meeting #3 2.0 $ 480.00 3.0 $ 513.00 3.0 $ 444.00 - -$ - -$ 8.0 $ 1,437.00 $ - $ - SUBTOTAL 3.0 21.0 5,040.00 $ 14,022.00 82.0 $ 25,160.00 170.0 $ 984.00 8.0 $ 8.0 1,464.00 $ 289.0 $ 46,670.00 $ 13,290.00 $ 8,500.00 Subconsultant Administration 10% $ 1,329.00 $ 850.00

4.0 Input Meetings and Presentations4.01 Prepare Meeting Graphics 3.0 $ 16.0 720.00 $ 2,736.00 16.0 2,368.00 $ - -$ - -$ 35.0 $ 5,824.00 $ - $ -

4.02 Community Meeting #1 2.0 $ 480.00 6.0 1,026.00 $ 6.0 $ 3.0 369.00 888.00 $ - -$ 17.0 $ 2,763.00 $ - $ - Administrator Construction Man.

CA Fees
Callander Associates' Personnel and Rates
Principal Proj Manager 2 Designer 1
PJ522_FEE.xls© copyrighted 2020 Callander Associates Landscape Architecture, Inc.

COST PROPOSAL Task Matrix City Park Facilities Assessment 2/3/2023 DTA BKF @ $240 @ $171 @ $148 @ $123 @ $183 architect civil Phase Description hrs $'s hrs $'s hrs $'s hrs $'s hrs $'s hrs $'s $'s $'s Administrator Construction Man. CA Fees Callander Associates' Personnel and Rates Principal Proj Manager 2 Designer 1 4.03 Community Meeting #2 2.0 $ 480.00 6.0 1,026.00 $ 6.0 $ 888.00 -$ - -$ 14.0 $ 2,394.00 $ - $ - 4.04 Community Meeting #3 2.0 $ 480.00 6.0 1,026.00 $ 6.0 $ 2.0 246.00 888.00 $ - -$ 16.0 $ 2,640.00 $ - $ - 4.05 Park Priorities Summary 1.0 $ 240.00 4.0 $ 684.00 8.0 1,184.00 $ - -$ - -$ 13.0 $ 2,108.00 $ - $ - 4.06 Review Meeting #4 2.0 $ 480.00 3.0 $ 513.00 3.0 $ 444.00 -$ - -$ 8.0 $ 1,437.00 $ - $ - 4.07 City Parks and Recreation Commission Presentation 2.0 $ 480.00 4.0 $ 684.00 2.0 $ 296.00 -$ - -$ 8.0 $ 1,460.00 $ - $ - 4.08 County Parks and Rec Commission Presentation 2.0 $ 480.00 4.0 $ 684.00 2.0 $ 296.00 -$ - -$ 8.0 $ 1,460.00 $ - $ - 4.09 County Board Presentation 2.0 $ 480.00 4.0 $ 684.00 2.0 $ 296.00 -$ - -$ 8.0 $ 1,460.00 $ - $ -

4.10 City Council Presentation 2.0 $ 480.00 4.0 $ 684.00 2.0 $ 296.00 -$ - -$ 8.0 $ 1,460.00 $ - $ - SUBTOTAL 4.0 20.0 4,800.00 $ 57.0 $ 9,747.00 53.0 7,844.00 $ 5.0 615.00 $ - -$ 135.0 $ 23,006.00 $ - $ - Subconsultant Administration 10% $ - $ -

5.0 Park Assessment Report5.01 Draft Improvements Ranking 4.0 $ 960.00 8.0 1,368.00 $ 12.0 1,776.00 $ -$ - -$ 24.0 $ 4,104.00 $ - $ -

5.02 Review Meeting #5 2.0 $ 480.00 3.0 $ 513.00 3.0 $ 444.00 -$ - -$ 8.0 $ 1,437.00 $ - $ -

5.03 Draft Report 10.0 $ 2,400.00 30.0 $ 5,130.00 64.0 9,472.00 $ 3.0 369.00 $ - -$ 107.0 $ 17,371.00 $ 7,940.00 $ 4,000.00

5.04 Report Refinement 10.0 $ 2,400.00 18.0 $ 3,078.00 36.0 5,328.00 $ 2.0 246.00 $ - -$ 66.0 $ 11,052.00 $ - $ -

5.05 Final Report 2.0 $ 480.00 8.0 1,368.00 $ 8.0 1,184.00 $ -$ - -$ 18.0 $ 3,032.00 $ - $ - SUBTOTAL 5.0 28.0 6,720.00 $ 11,457.00 67.0 $ 18,204.00 123.0 $ 615.00 5.0 $ - -$ 223.0 $ 36,996.00 $ 7,940.00 $ 4,000.00 Subconsultant Administration 10% $ 794.00 $ 400.00
hrs CALA DTA BKF

1.0 Background and Approach 18.00 $ 3,375.00 $ - $ -

2.0 Data Review 242.00 38,480.00 $ $ 1,425.00 $ 2,000.00

3.0 Data Collection 289.00 46,670.00 $ $ 13,290.00 $ 8,500.00

4.0 Input Meetings and Presentations 135.00 23,006.00 $ $ - $ -

5.0 Park Assessment Report 223.00 36,996.00 $ $ 7,940.00 $ 4,000.00 Sub Reimbursables & Mark Up $ 2,265.50 $ 1,450.00
Reimbursables (allowance) $ 9,840.88
TOTAL COMPENSATION 907.00 158,367.88 $ $ 24,920.50 $ 15,950.00 PJ522_FEE.xls© copyrighted 2020 Callander Associates Landscape Architecture, Inc.

HOURLY RATES
www.callanderassociates.com

BURLINGAME GOLD RIVER SAN JOSE
1633 Bayshore Highway, Suite 133 12150 Tributary Point Drive, Suite 140 2025 Gateway Place, Suite 285 Burlingame, CA 94010 Gold River, CA 95670 San Jose, CA 95110 T 650.375.1313 T 916.985.4366 T 408.275.0565
Recreate
Educate
Live+Work
Connect
Sustain
Standard Schedule of Compensation 2023 San Jose & Burlingame

GENERAL
The following list of fees and reimbursable expense items shall be used in the provision of services described in the agreement. These amounts shall be adjusted in January, upon issuance of an updated Standard Schedule of Compensation:

Hourly Rates
Reimbursable Expenses Rates
Expenses cost + 15%
printing and reproductions, postage and
delivery, mileage, travel expenses (hotel /
food), testing and outside services, and other
project related expenses
Communications and Insurance Surcharge 2.5% of total fees Subconsultant Administration 10% of Subconsultant Costs

PAYMENTS
Payments are due within ten days after monthly billing. Callander Associates reserves the right to suspend services for non-payment if payment is not received within a period of 60 days after invoice date. Additionally invoices 60 days past due are subject to a 1.5% per month interest charge. Retainer amounts, if indicated, are due upon signing the agreement and shall be applied to the final invoice for the project.

Principal $240 /hour
Senior Associate $218 /hour
Associate $208 /hour
Arborist/Construction Manager $183 /hour
Senior Project Manager $188 /hour
Project Manager 1 $180 /hour
Project Manager 2 $171 /hour
Job Captain $158 /hour
Designer 1 $148 /hour
Designer 2 $135 /hour
Assistant Designer $120 /hour
Accounting $182 /hour
Senior Project Administrator $138 /hour
Project Administrator $123 /hour

HOURLY RATES Standard Billing Rates Rate Structure Effective Date 1/1/2023 Institutional / Public Works Level Current Rate 1 Principal $250.00 Senior Level Project / Program / Construction: Design, Management, Administration 2 Staff $175.00 Project Design, Support, Supervision3 Support $115.00 Project Design, Support, Production Billing PoliciesThe following items will not be billed to the Client:Reimbursable Expenses will not include the following items:
• Travel expenses, phone charges, fax charges, postage and other non-significant expenses.• Snacks Basic rates are computed as a multiple of average direct labor costs for various staff levels. The current multiplier is 3.2. This multiplier is based on analysis of all overhead costs including non-revenue support staff, physical plant, insurance, benefits and infrastructure. Rates are also assigned to project tasks based on the level of work being performed. Rates are aligned with the level of the task regardless of the staff level assigned. Senior personnel performing lower level tasks will be billed at lower rates. Rates are subject to change at periodic intervals due to personnel reviews and salary adjustments.All applicable staff time in support of projects and programs will be billed to the Client except as described below.Time will be billed in increments of ½ hour. Periods less than ½ hour will not be billed, however numerous short time periods may be accumulated and billed periodically.Reimbursable expenses will include a mark-up of 15% to cover related overhead expenses, including handling which may not be billed as professional time. Reimbursable expenses shall include but not be limited to the following:
• Reproductions, plotting, presentation materials• Agency fees, testing fees, related expenses.• Consultant Services not included in Contract Amounts The following information describes compensation to Dreiling Terrones Architecture for basic services rendered on an hourly basis and expenses incurred on behalf of the Client or other authorized parties. These rates will also be utilized in calculating progress toward Compensation Targets and amounts in Fixed Fee contracts. • Professional development time incurred by junior level staff attending meetings and presentations for educational purposes. • Meetings beyond one hour per staff person. • Incidental travel time.• Entertainment and recreational dining.

Expenses
1/24/2023
Rates

HOURLY RATES

BKF ENGINEERS PROFESSIONAL SERVICES RATE SCHEDULE
EFFECTIVE JANUARY 1, 2023

CLASSIFICATION HOURLY RATE

PROJECT MANAGEMENT
Principal $288.00
Senior Associate Principal $268.00
Associate Principal $260.00
Senior Project Manager | Senior Technical Manager $253.00 Project Manager | Technical Manager $247.00
Engineering Manager | Surveying Manager | Planning Manager $228.00

TECHNICAL STAFF
Senior Project Engineer | Senior Project Surveyor | Senior Project Planner $212.00 Project Engineer | Project Surveyor | Project Planner $186.00 Design Engineer | Staff Surveyor | Staff Planner $162.00 BIM Specialist I, II, III $162.00 - $186.00 - $212.00
Technician I, II, III, IV $154.00 - $164.00 - $180.00 - $194.00 Drafter I, II, III, IV $121.00 - $133.00 - $143.00 - $159.00 Engineering Assistant | Surveying Assistant | Planning Assistant $101.00

FIELD SURVEYING
Survey Party Chief $212.00
Instrument Person $182.00
Survey Chainperson $136.00
Utility Locator I, II, III, IV $110.00 - $156.00 - $187.00 - $213.00 Apprentice I, II, III, IV $83.00 - $112.00 - $124.00 - $132.00

CONSTRUCTION ADMINISTRATION
Senior Consultant $277.00
Senior Construction Administrator $241.00
Resident Engineer $179.00
Field Engineer I, II, III $162.00 - $186.00 - $212.00

FUNDING & GRANT MANAGEMENT
Director of Funding Strategies $198.00
Funding Strategies Manager $181.00
Funding/Research Analyst I, II, III, IV $124.00 - $144.00 - $153.00 - $168.00

PROJECT ADMINISTRATION
Project Coordinator $135.00
Senior Project Assistant $117.00
Project Assistant $103.00
Clerical | Administrative Assistant $87.00
Expert witness rates are available upon request.

Subject to the terms of a services agreement:
• Charges for outside services, equipment, materials, and facilities not furnished directly by BKF Engineers will be billed as reimbursable expenses at cost plus 10%. Such charges may include, but shall not be limited to: printing and reproduction services; shipping, delivery, and courier charges; subconsultant fees and expenses; agency fees; insurance; transportation on public carriers; meals and lodging; and consumable materials. • Allowable mileage will be charged at the prevailing IRS rate per mile. • Monthly invoices are due within 30 days from invoice date. Interest will be charged at 1.5% per month on past due accounts.
• The rates shown are subject to periodic increases, including January 1st of each year. BKF ENGINEERS

2/16/2023 1:29:08 PM
C:\Program Files\eSCRIBE\TEMP\1329548592\1329548592,,,Report - PRFMA Cost Share Agrmt .docx Agenda Report
MEETING DATE: Tuesday, February 21, 2023
TO: City Council
FROM: INTERIM PUBLIC WORKS & UTILITIES DIRECTOR VIDES

ENVIRONMENTAL SUSTAINABILITY MANAGER MCCLOUD
THROUGH: CITY MANAGER MENDEZ
SUBJECT: PÁJARO RIVER FLOOD MANAGEMENT AGENCY MEMBER

AGENCY COST SHARE AGREEMENT
RECOMMENDED ACTION:

Adopt a resolution to authorize the City Manager to execute a Cost Sharing Agreement to fund the activities of the Pájaro Regional Flood Management Agency by and among the City of Watsonville, Santa Cruz County Flood Control and Water Conservation District – Zone 7, Monterey County Water Resources Agency, and the Pájaro Regional Flood Management Agency, to be effective upon full execution by the parties to the Agreement.

BACKGROUND:

Last year, the Pájaro Regional Flood Management Agency (PRFMA) was formed as a new Joint Powers Authority, which will take over Operations, Maintenance, Repair, Replacement, and Rehabilitation (OMRR&R) of the federal levee system and appurtenant features on the Pájaro River and Salsipuedes Creek. Due to the transfer of responsibilities, a Cost Sharing Agreement (Agreement) regarding contributions for operating expenses by and between the City, the PRFMA, and the other “maintaining member agencies” is needed.

DISCUSSION:

The County of Santa Cruz, City of Watsonville, County of Monterey, Monterey County Water Resources Agency (“MCWRA”), and the Santa Cruz County Flood Control and Water Conservation District – Zone 7 (“Zone 7”) executed a Joint Exercise of Powers Agreement (JPA Agreement) that created the PRFMA on July 21, 2021. As part of the formation and establishment of the PRFMA, a budget was adopted by their Board of Directors on September 14, 2022 that includes the provision of funds by the maintaining member agencies of the JPA on an annual, ongoing basis to support general overhead and administration as well as operations and maintenance activities. (The “maintaining member agencies” are those agencies with membership to the PRFMA that currently, and have historically, engaged in the provision of operational and maintenance responsibilities to the Pájaro River’s and Tributaries’ federally-authorized flood control facilities. The amount

2/16/2023 1:29:08 PM
C:\Program Files\eSCRIBE\TEMP\1329548592\1329548592,,,Report - PRFMA Cost Share Agrmt .docx provided by each member agency and the PRFMA draft budget was discussed at length as an implicit ingredient of the JPA Agreement which required consensus prior to each member agency adopting the JPA Agreement. These discussions occurred during the year preceding member agency adoption and formation of the PRFMA. The provision of maintaining member agency funds requires the execution of a cost sharing agreement by each maintaining member agency to establish the revenue from existing assessment sources that is available to the PRFMA. Any remaining gap between available revenue and projected expenditures of the PRFMA to perform operations and maintenance activities of flood control facilities will be filled by a new benefit assessment district.

The City performs OMRR&R for eighteen (18) levee pump stations on the Pájaro River and Salsipuedes Creek in conformance with an adopted policy for such maintenance between the City and the County of Santa Cruz Department of Public Works dated February 10, 1983 (Attachment 1).

Analysis
Attached for consideration is a Cost Sharing Agreement (Agreement, Attachment 2) regarding contributions for operating expenses by and between the PRFMA, Zone 7, MCWRA, and the City of Watsonville, the latter three being the historical “maintaining member agencies”. The Agreement specifies that no less than $49,000 of the City’s funds will be pledged to the PRFMA on an annual, ongoing basis until such time that either the City ceases its membership to the PRFMA or the PRFMA dissolves. Annual contributions for subsequent years may be adjusted per the increase in the Consumer Price Index for All Urban Consumers in the San Francisco-Oakland-Hayward area during the previous fiscal year (“CPI Adjustment”) if approved by the increasing Party’s legislative body.

The Cost Sharing Agreement was adopted by the PRFMA Board of Directors on July 13, 2022, by the MCWRA on September 13, 2022, and by Zone 7 on December 6, 2022.

STRATEGIC PLAN:

The Cost Share Agreement supports Strategic Plan goal:
3-Infrastructure & Environment
FINANCIAL IMPACT:

The financial impact is $49,000. The City will need to transfer funds from 0710-543-7307 to 0710-543-7361 in order to cover this cost. In the future, the City will need to budget this cost annually.

The Cost Sharing Agreement will have long-term, but small, financial impacts on the City that were fully contemplated in association with advancing the creation of the PRFMA and in joining the JPA as a member agency. The Agreement will shift O&M and capital project advancement responsibility from the Maintaining Member Agencies to the PRFMA. While the PRFMA may contract back to the City to perform OMRR&R of the 18 pump stations currently maintained by the City, because of the City’s expertise and experience with these activities, the ultimate responsibility for OMRR&R will fall to the PRFMA.

2/16/2023 1:29:08 PM
C:\Program Files\eSCRIBE\TEMP\1329548592\1329548592,,,Report - PRFMA Cost Share Agrmt .docx ALTERNATIVE ACTION:

No reasonable alternatives are known at this time.

ATTACHMENTS AND/OR REFERENCES (If any):

1. Pump Station O-M Responsibility Letter dated 1983

2. PRFMA Budget 2022-2023

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CITY OF WATSONVIC
CITY HALL 250 MAIN ST. P. O. BOX 430
WATSONVILLE, CALIFORNIA 95077
TELEPHONE AREA CODE 408 728.6049 .çl:7
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February 10, 1983
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Don Porath
Pub 1 i c Works 0 i rector
County of Santa Cruz
701 Ocean Street
Santa Cruz, CA 95060
Re: Operation/Maintenance of Pajaro River/Salsipuedes Creek Pumps
Dear Don:

This will confirm my telephone conversation of February 10th with John Fantham regarding the City Council's decision to instruct our Public Works Department to take over the operation and maintenance of the eighteen levee pumps on the Pajaro River and Salsipuedes Creek. This policy will become effective immediately.

City Manager John Radin has indicated that he would like an early meeting with you and your staff to discuss some of the details of the City i S takeover of the pumps.
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Very truly yours,
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cc: City Manager
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Attachment 1

ATTACHMENT 1
PRFMA AGENCY BUDGET FY 2022‐23
REVENUES:

Line Item Amount
Member Agency Contributions ‐ Levee OMRR&R  (81.1% Zone 7 / 18.9% MCWRA):

Zone 7 ‐ Levee OMRR&R 1,805,700 $
MCWRA ‐ Levee OMRR&R 418,300 $
PRFMA ‐ Levee OMRR&R 1,200,000 $
Sub‐Total ‐ Levee OMRR&R 3,424,000 $
Member Agency Contributions ‐ Drainage OMRR&R:

Zone 7 ‐ Drainage OMRR&R 332,700 $
MCWRA ‐ Drainage OMRR&R 25,400 $
City of Watsonville (paid by Zone 7) 49,900 $
Sub‐Total ‐ Drainage OMRR&R 408,000 $
Total Revenue $         3,832,000
Prepared by LWA A‐1 of A‐2 2022 0705 PRFMA ‐ Annual Budget Attachment 2

ATTACHMENT 1
PRFMA AGENCY BUDGET FY 2022‐23                 EXPENSES:

Line Item Amount
Personnel:

Subtotal Personnel $            822,200
Administrative Contract Services:

Subtotal Administrative Contract Services $            847,400 Services and Supplies:

Subtotal Services / Supplies $            103,400
Subtotal General Operations and Administration $         1,773,000 Operations, Maintenance, Repair, Replacement & Rehabilitation:

Levee Slope/Bench Mowing 227,500 $
Levee Compaction 252,900 $
Rodent Control 167,300 $
Flap Gate/Culvert Maintenance 113,000 $
Culvert CCTV Inspection/Flushing 40,700 $
Brush Removal 56,600 $
Levee Top & Access Road Maintenance 173,600 $
Pump Station O&M 58,500 $
Misc. O&M $            210,700
In‐channel Vegetation Maintenance 339,400 $
Capacity Analysis (surveying and H/H) 113,200 $
Permitting, Biological Monitoring, Mitigation 113,200 $ Emergency Monitoring/Gaging and Response 79,200 $
Reserve, Repair, Replacement, Rehabilitation 113,200 $
Subtotal OMRR&R $         2,059,000
Total Budget $         3,832,000
Prepared by LWA A‐2 of A‐2 2022 0705 PRFMA ‐ Annual Budget Attachment 2

Reso No. (CM)
Meeting Date: 022123 SWZ ______ RM ______ PWU ______ 1
RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE APPROVING COST SHARING AGREEMENT BY AND

AMONG THE CITY OF WATSONVILLE, SANTA CRUZ COUNTY FLOOD
CONTROL AND WATER CONSERVATION DISTRICT – ZONE 7,

MONTEREY COUNTY WATER RESOURCES AGENCY AND THE
PÁJARO REGIONAL FLOOD MANAGEMENT AGENCY (PRFMA) TO
FUND THE ACTIVITIES OF THE PÁJARO REGIONAL FLOOD
MANAGEMENT AGENCY, IN AN AMOUNT NOT TO EXCEED $49,000;

AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE

SAME AND AUTHORIZING THE BUDGET TRANSFER OF SAID

AMOUNT FROM EXPERT & CONSULTATION SERVICES ACCOUNT
710-543-7307 TO OTHER CONTRACT SERVICES ACCOUNT 0710-543- 7361
WHEREAS, the County of Santa Cruz, City of Watsonville, County of Monterey, Monterey County Water Resources Agency (“MCWRA”), and the Santa Cruz County Flood Control and Water Conservation District – Zone 7 (“Zone 7”) executed a Joint Exercise of Powers Agreement (JPA Agreement) that created the PRFMA on July 21, 2021. As part of the formation and establishment of the PRFMA, a budget was adopted by their Board of Directors on September 14, 2022, that includes the provision of funds by the maintaining member agencies of the JPA on an annual, ongoing basis to support general overhead and administration as well as operations and maintenance activities; and
WHEREAS, the provision of maintaining member agency funds requires the execution of a cost sharing agreement by each maintaining member agency to establish the revenue from existing assessment sources that is available to the PRFMA.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution approving a Cost Sharing Agreement does not meet CEQA's definition of a “project,” because the action does not have the potential for

Reso No. (CM)
Meeting Date: 022123 2
resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. That the Cost Sharing Agreement between the City of Watsonville, Santa Cruz County Flood Control and Water Conservation District – Zone 7, Monterey County Water Resources Agency and Pájaro Regional Flood Management Agency, a copy of which is attached hereto and incorporated herein by this reference, is hereby approved.

3. That the budget transfer of $49,000 from budget expert & consultation services account 710-543-7307 to other contract services account 0710-543-7361 is hereby approved.

4. That the City Manager is hereby authorized and directed to execute said Agreement for and on behalf of the City of Watsonville in the form attached hereto with minor revisions that may be approved by the City Manager and the City Attorney. **************************************

Agenda Report
MEETING DATE: Tuesday, February 21, 2023
TO: City Council
FROM: PARKS & COMMUNITY SERVICES DIRECTOR CALUBAQUIB

SENIOR ADMINISTRATIVE ANALYST FLORES
THROUGH: CITY MANAGER MENDEZ
SUBJECT: RESOLUTION APPROVING SEVEN YEAR LEASE AGREEMENT WITH THE CORRALITOS WOMAN’S CLUB FOR CITY OWNED

PROPERTY
RECOMMENDED ACTION:

Adopt a resolution approving a seven-year lease with the Corralitos Woman’s Club, a corporation, for the use of City owned property located at 33 Browns Valley Road.

DISCUSSION:

The Corralitos Woman’s Club is a local organization dedicated to community improvement by enhancing the lives of others through volunteer service. The Club was founded in 1920 and members share a vision of “How can we help?”. The club holds many fundraisers to help groups and organizations in the community and also has a nationwide and global reach.

The Corralitos Woman’s Club has a long-standing history of residing in the City owned property at 33 Browns Valley Road. The location is well known by residents and is used for various events such as community meetings, youth group meetings, various private events such as birthday parties, weddings and funerals and celebrations of life. The organization strives to meet all City and accessibility requirements and is responsive to City staff requests. The previous lease agreement for the property has expired and City Staff recommend to renew the lease.

The terms of this Lease agreement can be summarized as follows:
 A seven-year term commencing January 1, 2023 and expiring on December 31, 2030.
 A base rent of seven dollars ($7.00) for the term of the lease, due and payable upon execution of this Lease as payment in advance for the term.  One (1) additional term of three (3) years option to extend the term of the Lease.
 Tenant is responsible for all Utilities and improvements on the property.

 Tenant is responsible for Fire, Property Damage and Commercial General Liability Insurance.

STRATEGIC PLAN:
05-Community Engagement & Well-Being – The Corralitos Woman’s Club supports youth organizations and community activities in the community.

FINANCIAL IMPACT:

The base rent for this lease is $1.00 annually, in acknowledgment and support of the community and social benefit the organization provides to the community and its stewardship and maintenance of the facility.

ALTERNATIVE ACTION:

The Council may:

1. Not approve this lease agreement

2. Modify the proposed lease agreement
ATTACHMENTS AND/OR REFERENCES (If any):

None.

Reso No. (CM)
Meeting Date: 022123 SWZ ______ RM ______ PCS ______1
RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE APPROVING A SEVEN-YEAR LEASE AREEMENT
WITH ONE (1) THREE-YEAR OPTION TERM BETWEEN THE CITY OF WATSONVILLE AND CORRALITOS WOMAN’S CLUB, A
CORPORATION, FOR CITY OWNED PROPERTY LOCATED AT 33

BROWNS VALLEY ROAD, WATSONVILLE, CALIFORNIA,
COMMENCING ON JANUARY 1, 2023, AND ENDING DECEMBER 31,
2030, AND AUTHORIZING AND DIRECTING THE CITY MANGER TO

EXECTE SAME

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution approving Lease with the Corralitos Woman’s Club does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. That the seven-year Lease with one (1) three-year option term between the City of Watsonville and Corralitos Woman’s Club, a corporation, for City owned property located at 33 Browns Valley Road, Watsonville, California, commencing on January 1, 2023, and ending December 31, 2030, a copy of which Lease is attached hereto and incorporated herein by this reference, is fair and equitable and is hereby ratified and approved.

3. The City Manager be and is hereby authorized and directed to execute such Lease for the original term and if properly exercised, the one (1) three-year option term for and on behalf of the City of Watsonville.
********************************

LEASE

BETWEEN THE CITY OF WATSONVILLE
AND CORRALITOS WOMAN’S CLUB, A CORPORATION
Table of Contents

1. PARTIES................................................................................................................................................2

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

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

3.1 INITIAL TERM .....................................................................................................................................2

3.2 OPTION TERM .....................................................................................................................................2

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

4.1 Base Rent................................................................................................................................................2

4.2 Additional Rent: Utilities .......................................................................................................................2

4.3 Additional Rent: Community Services...................................................................................................2

4.4 ADDITIONAL RENT – IMPROVEMENTS ........................................................................................2

5. USE OF PREMISES ..............................................................................................................................3

6. OPERATIONS AND SCHEDULING...................................................................................................3

7. IMPROVEMENTS ................................................................................................................................3

7.1 Compliance with Accessibility Standards..............................................................................................3

8. OWNERSHIP OF TENANT IMPROVEMENTS .................................................................................4

9. WORKS OF REPAIR AND IMPROVEMENT ....................................................................................4

9.1 Protection of Landlord against Cost or Claim........................................................................................4

9.2 Notice of Non-Responsibility.................................................................................................................4

9.3 Defense and Indemnity...........................................................................................................................4

9.4 Restrictions on Tenant’s Repairs and Improvements.............................................................................4

9.5 Notices of Completion............................................................................................................................4

10. NO SUBORDINATION ........................................................................................................................4

11. COMPLIANCE WITH RULES, REGULATIONS, AND LAWS ........................................................5

12. MAINTENANCE AND REPAIRS OF PREMISES..............................................................................5

13. HOLDING OVER..................................................................................................................................5

14. ABANDONMENT.................................................................................................................................5

15. ASSIGNMENTS AND SUBLETTING.................................................................................................5

16. SIGNS, POSTERS, BUILDINGS..........................................................................................................5

17. TAXES....................................................................................................................................................5

17.1 PERSONAL PROPERTY TAXES.......................................................................................................6

17.2 POSSESSORY USE TAX....................................................................................................................6

18.WAIVER OF DAMAGES AND INDEMNIFICATION ........................................................................6

19. INSURANCE..........................................................................................................................................6

19.1 Fire and Property Damage Insurance Policy ................................................................................7

19.2 Commercial General Liability Insurance......................................................................................7

20. DESTRUCTION OF PREMISES ..........................................................................................................7

21. BREACH................................................................................................................................................7

22. LITIGATION EXPENSES ....................................................................................................................8

23. SURRENDER OF PREMISES ..............................................................................................................8

24. DISCRIMINATION...............................................................................................................................8

25. WAIVER................................................................................................................................................8

26. QUIET ENJOYMENT...........................................................................................................................8

27. NOTICES ...............................................................................................................................................8

28. RIGHT OF CITY TO ENTER PREMISES ...........................................................................................9

29. RIGHT OF CITY TO AUDIT................................................................................................................9

30. PROPRIETARY AND GOVERNMENTAL ROLES; ACTIONS BY CITY.......................................9

31. CONDEMNATION .............................................................................................................................10

32. GENERAL PROVISIONS...................................................................................................................10

33. SIGNATURES .....................................................................................................................................11

1. PARTIES
This LEASE, made and entered into this 21st day of February 2023, between the City of Watsonville, a municipal corporation, hereafter referred to as “City,” and Corralitos Woman’s Club, a corporation, hereafter referred to as “Tenant.”

2. PREMISES
City hereby leases to Tenant, and Tenant hereby hires and takes possession from City that certain improved real property situated at 33 Browns Valley Road in the City of Watsonville, California on the terms and conditions as hereafter set forth and hereafter called “Premises” and depicted on Exhibit “A”.

3. TERM

3.1 INITIAL TERM
The term of this Lease shall be for seven (7) years, which term will commence on January 1, 2023, and shall expire on December 31, 2030, unless sooner terminated under the provisions of this Lease.

3.2 OPTION TERM
Tenant shall have the right to extend the term of the Lease for one (1) additional term of three (3) years.

In order to be effective, Tenant shall give written notice of intent to exercise the option at least sixty (60) days before the expiration of the Initial Term.

4. RENT

4.1 Base Rent
Tenant shall pay to City the sum of Seven Dollars ($7.00), in advance, all due and payable upon execution of this Lease as payment in advance for the term.

4.2 Additional Rent: Utilities
Tenant shall pay for gas, heat, light, power, telephone service, water, garbage, sewer, and all other services supplied to the Premises by City or others, including installation and connection of such services from the main source thereof. Tenant may charge to City or other users of facilities, proportional utility fees based on the number of days facility is used by City within the monthly billing period of utility.

4.3 Additional Rent: Community Services
Tenant shall also actively provide outreach to the Watsonville community by actively advertising the availability of the facility for rental purposes.

4.4 ADDITIONAL RENT – IMPROVEMENTS
Tenant shall make the following improvements to the facilities. These items are conditions subsequent to the execution of the lease and are for the sole benefit of the City. Failure of Tenant to satisfy one or more of these conditions by June 1, 2023 shall, at City’s sole and exclusive option be cause for immediate termination of this lease after 30-day notice to correct:
• Install stove exhaust hoods/fans in Kitchen
• Smoke alarms with an exterior audible alarm

5. USE OF PREMISES
The Premises may be used for conducting social and community activities that are historically part of the Corralitos Woman’s Club activities including but not limited to Corralitos Woman’s Club events and meetings, Boy Scout, Cub Scout, Girl Scout meetings and activities related to those organizations; and annual Community fundraisers. Notwithstanding the non-assignability clause below, Tenant may use and rent the Premises for small wedding receptions, club picnics, anniversaries, and club meetings, in order to generate money for continued maintenance and improvements of the Premises. Tenant shall not use or permit the Premises, or any part thereof to be used, for any other purpose or purpose without first obtaining the written consent of the City.

All Tenants shall comply with the Rental Agreement and the Rules and Regulations for use of the Corralitos Woman’s Clubhouse, a copy of which is attached to this Lease and identified as Exhibit B.

6. OPERATIONS AND SCHEDULING
Tenant shall be in charge of scheduling the use of the Premises.

The schedule shall allow and accommodate for City to reserve and use the Premises for a period or periods of time, not exceeding five days per month without charge to the City. If either City or Tenant exercises its respective right to use such reserved time, City shall endeavor to notify the Tenant at least 45 days in advance for weekend use and 20 days in advance for weekday use. The City acknowledges that the Tenant shall not be required to cancel a paid reservation previously booked by Tenant to accommodate City requested activities. The City, while using the facilities, will provide its own security and traffic control if necessary and will abide by the Housekeeping Rules.

7. IMPROVEMENTS

7.1 Compliance with Accessibility Standards
Tenant agrees to maintain any improvements to the Premises so as to satisfy all required State and Federal accessibility standards. For purposes of Section 1938 of the California Civil Code, City hereby discloses to Tenant, and Tenant hereby acknowledges, that the Premises has not undergone inspection by a Certified Access Specialist (CASp). As required by Section 1938(e) of the California Civil Code, City hereby states as follows: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” In furtherance of the foregoing, City and Tenant hereby agree as follows: (a) any CASp inspection requested by Tenant shall be conducted, at Tenant’s sole cost and expense, by a CASp designated by City, subject to City’s reasonable rules and requirements; (b) Tenant, at its sole cost and expense, shall be responsible for making any improvements or repairs within the Premises to correct violations of construction-related accessibility standards; and (c) if anything done by or for Tenant in its use or occupancy of the Premises shall require any improvements or repairs to the facilities (outside of the Premises) to correct violations of construction-related accessibility standards, then Tenant shall reimburse City upon demand, as Additional Rent, for the cost to City of performing such improvements or repairs.

8. OWNERSHIP OF TENANT IMPROVEMENTS
At the expiration or termination of the Lease, all fixtures and physical repairs or improvements to the building and grounds shall become City’s property free of all claims to or against them by Tenant or any third person.

At the normal expiration or termination of the Lease term, provided Tenant is not in default, Tenant shall have the right to remove any and all furniture and equipment. All personal property such as stoves, refrigerators and other appliances, chairs, tables and equipment provided by Tenant shall remain the property of Tenant.

9. WORKS OF REPAIR AND IMPROVEMENT

9.1 Protection of Landlord against Cost or Claim
Tenant shall pay or cause to be paid the total cost and expense of all works improvements and repairs, as the phrase is defined in the mechanic’s lien law in effect at the place of construction when the work begins. No such payment shall be construed as rent. The City shall be notified, at least 7 days prior to the date of construction so that the City can post a proper Notice of Non-Responsibility.

9.2 Notice of Non-Responsibility
Tenant shall not suffer or permit to be enforced against the Premises or any part of it any mechanic’s, materialman’s, contractor’s, or subcontractor’s lien arising from any work or improvement, however it may arise. However, Tenant may in good faith and at Tenant’s own expense contest the validity of any such asserted lien, claim, or demand, provided Tenant has furnished the bond required in California Civil Code Section 3143.

9.3 Defense and Indemnity
Tenant shall defend, indemnify and hold the City harmless against all liability and loss of any type arising out of work performed on the Premises by Tenant, or a Tenant’s request, together with reasonable attorney’s fees and all costs and expenses incurred by City in negotiating, settling, defending, or otherwise protecting against such claims.

9.4 Restrictions on Tenant’s Repairs and Improvements
Any remodeling or construction work by Tenant on the Premises shall be first subject to written approval by City and will require appropriate City of Watsonville building permits. Tenant shall submit plans and specifications for improvements to the City. Any such work shall be done and performed in the lawful manner and in conformity with all applicable laws, ordinances, codes and regulations.

Tenant shall keep the Premises free from any and all liens and charges on account of labor and materials used in contributing to any improvement installed by Tenant upon the Premises, and Tenant shall hold harmless the City for any such liens and charges. No consent given by City to Tenant however shall be construed to make City a “participating owner: and therefore ineligible for the protection offered under Civil Code Section 3094 and 3129 (Notices of Non-responsibility).

9.5 Notices of Completion
On completion of any work improvement, Tenant shall file or cause to be filed a notice of completion.

Tenant hereby appoints City as Tenant’s attorney in fact to file the notice of completion on Tenant’s failure to do so after the work of improvement has been substantially completed.

10. NO SUBORDINATION
City shall not subordinate title to the Premises to any security transaction. The Premises are now and shall remain free and clear of any liens, encumbrances, or other Tenant obligations to third persons.

11.COMPLIANCE WITH RULES, REGULATIONS, AND LAWS
In the use and occupancy of the Premises and in the conduct of all business, activities and transactions thereon, Tenant will comply with all applicable laws, ordinances, rules, regulations, and orders of the County of Santa Cruz, City or any governmental subdivision, body, or authority, including all federal, state, and municipal laws and ordinances.

12.MAINTENANCE AND REPAIRS OF PREMISES
Tenant shall maintain in good condition the exterior of the Premises, including outside walls and roof, ceiling, parking area, driveway, landscaping, electrical systems for the facility, heating and air conditioning equipment, plumbing, doors, and hardware, in as good order, condition and repair as they shall be upon the commencement of the term of this Lease. Tenant shall keep drainage ditches and gutters free of debris.

13.HOLDING OVER
If Tenant shall hold possession of the Premises after the term of this Lease between City and Tenant; Tenant shall become a Tenant from year to year upon the terms and conditions specified herein, except at the option of City and after notice, if Tenant shall hold over without the consent of City, rent may be increased from the one dollar per year base rent to fair market rent or as amended and agreed between City and Tenant, and shall continue to be such until the tenancy shall be terminated by City on thirty (30) days notice or until Tenant shall have given at least (30) days notice of Tenant’s intention to terminate the tenancy. The events scheduled beyond the term of this lease shall be negotiated between the tenant and the City. During the hold over term use of the facilities for the scheduled events will be honored by the City, provided that the premises are in such condition to house/host such events and providing Tenant pays any applicable increase rent if required by City.

14.ABANDONMENT
Tenant shall not vacate or abandon the Premises at any time during the term thereof; if Tenant shall abandon, vacate or surrender the Premises or be dispossessed by process of law, or otherwise, any personal property belonging to Tenant and left on the Premises shall be deemed to be abandoned and at the option of City shall become City’s property free from all claims of Tenant.

15.ASSIGNMENTS AND SUBLETTING
Tenant represents and agrees that it shall not assign this Lease, or any interest therein, and shall not lease or sublet the Premises, or any part thereof, or any privilege appurtenant thereto, without the prior written consent of City first. A consent to one assignment or subletting shall not be construed as a consent to any subsequent assignment or subletting.

16. SIGNS, POSTERS, BUILDINGS
No political or religious signs of any kind may be displayed on the Premises. No advertising signs, posters, or similar devices shall be erected, displayed or maintained in, on, about, or above the Premises or the structure thereon without the prior written approval of the City Manager. Tenant in its operations shall not unreasonably interfere with the property, interests, operations, or activities of the City or of other tenants of the City.

17. TAXES
Tenant will pay all taxes, assessments and license levied, imposed or required by a governmental subdivision, body, or authority on or in respect to its use and occupation of the Premises, including but not limited to:

17.1 PERSONAL PROPERTY TAXES
Any improvements or property placed on the Premises by Tenant or any person with its permission; and

17.2 POSSESSORY USE TAX
Pursuant to section 107.6(a) 1 of the State Revenue and Taxation code the City hereby gives notice that the property interests to Tenant under this Lease may be subject to property taxation as a possessory interest and the Tenant acknowledges that it shall be subject to payment of property tax if a possessory interest tax is levied on the property interest.
1 R & T Section 107.6. (a) The state or any local public entity of government, when entering into a written contract with a private party whereby a possessory interest subject to property taxation may be created, shall include, or cause to be included, in that contract, a statement that the property interest may be subject to property taxation if created, and that the party in whom the possessory interest is vested may be subject to the payment of property taxes levied on the interest. (b) Failure to comply with the requirements of this section shall not be construed to invalidate the contract. The private party may recover damages from the contracting state or local public entity, where the private party can show that without the notice, he or she had no actual knowledge of the existence of a possessory interest tax.

The private party is rebuttably presumed to have no actual knowledge of the existence of a possessory interest tax. In order to show damages, the private party need not show that he or she would not have entered the contract but for the failure of notice.
(c) For purposes of this section:
(1) "Possessory interest" means any interest described in Section 107. (2) "Local public entity" shall have the same meaning as that set forth in Section 900.4 of the Government Code and shall include school districts and community college districts. (3) "State" means the state and any state agency as defined in Section 11000 of the Government Code and Section 89000 of the Education Code.
(4) "Damages" mean the amount of the possessory interest tax for the term of the contract.

18.WAIVER OF DAMAGES AND INDEMNIFICATION
Landlord shall not be liable to tenant for any injury or damage that may result to any person or property by or from any cause whatsoever, including results from acts of negligence on the part of Landlord, its agents, servants, employees, or invitees. Said waiver is expressly extended to injury or damage caused by fire, water leakage of any character from the roof(s), wall(s), basement, or any other part of the property, or caused by gas, oil, electricity, or any other cause in or about the Premises or the building(s). City however, shall be responsible for any such conduct as may occur during scheduled City activities as set forth in section 6.

Tenant shall hold City harmless from, and defend City against, any and all claims or liability for any death or injury to any person or damage to any property, whatsoever, occurring in, on or about the Premises or any part thereof, or occurring in, on about any other areas of facilities of the building, including without limiting the foregoing, walkway(s), driveway(s), parking area(s), stairways, or passageways if such death, injury or damage shall be caused in part or in whole, directly or indirectly, by the act, negligence or fault of, or omission of any duty, with respect to the City, or by Tenant, its agents, servants, employees, or invitees. This section 18 shall survive the termination of this Lease.

19. INSURANCE
All policies required to be maintained by Tenant pursuant to the terms of this Lease shall be issued by companies authorized to do business in the State of California with a financial rating of at least A plus three A status as rated in the most recent edition of Best Insurance Reports. Tenant shall pay premiums therefore and shall deliver annually to City Endorsements naming the City as additional loss payee as to the fire and property damage and additional insured as to the liability policy. If Tenant fails or refuses to procure or maintain the insurance coverage required hereunder, or fails or refuses to furnish City with proof that coverage has been procured and is in full force and paid for, City shall have the right, at City’s election and without notice to Tenant, but without any obligation to do so, to procure and maintain such coverage. Tenant shall reimburse City on demand for any premiums City so pays in connection with such

procurement. Failure to so reimburse City within thirty days of request shall be just cause for City to terminate this Lease.

19.1 Fire and Property Damage Insurance Policy
Tenant shall procure and keep in force a fire and extended coverage insurance upon all structural improvements (buildings) owned by City on the Premises in an amount of eighty (80%) percent of the replacement value thereof with City named as beneficiary thereof.

Tenant shall be responsible for any and all fire insurance coverage for personal contents.

19.2 Commercial General Liability Insurance
During the rental term, Tenant, at Tenant’s sole expense, shall secure and maintain in force such policies of insurance as will protect it and City from claims for damages or injury resulting from bodily injury, including death, and for the loss or damage to property of other which may arise from operations of this Lease.

Such insurance shall contain statements that:
• These policies shall also apply to City, as an additional named insured by way of endorsement to the policy, not a certificate of insurance;
• The insurance afforded by these policies applies severally as to each insured, except that the inclusion of more than one insured shall not operate to increase the limit of the company’s liability, and the inclusion hereunder of any person or organization as an insured shall not affect any right which such person or organization would have as a claimant if not so included; • The insurance shall be primary insurance over any other insurance carried by City, which other insurance shall be considered excess only;
• The above policies specifically include contractual indemnity coverage indemnifying City; • The policies shall provide that they may not be canceled, nor the coverage reduced until thirty (30) days after a written notice of such cancellation or reduction in coverage is delivered to City at the address contained herein;
• The policies of insurance shall specifically say that the insurance companies waive any and all right of subrogation against City.
• Such liability insurance shall be written with limits of at least One Million ($1,000,000) Dollars combined single limits, and shall be written by companies acceptable to City. • The limit of liability insurance coverage may be unilaterally adjusted up or down at City’s reasonable discretion commensurate with inflation and other liability factors upon adoption of resolution of the City Council of the City.
• Endorsements evidencing the above obligations shall be delivered to the City Clerk on execution of the Lease Agreement.

20.DESTRUCTION OF PREMISES
In the event the structure on the premises is destroyed to the extent of fifty (50%) or more of the replacement cost thereof, the City may elect to terminate this lease. A total destruction of the structure on the premises shall terminate this lease.

21.BREACH
After service of ten (10) days written notice thereof by City on Tenant any one of the following shall constitute a breach of this Lease by Tenant:
• The appointment of a Receiver to take possession of all or substantially all of the assets of Tenant; or
• A general assignment by Tenant for the benefit of creditors; or • Any action taken or suffered by Tenant under any insolvency or bankruptcy; or • A default in the payment of the rent herein reserved or any part thereof, for a period of twenty (20) days; or

• A default in the performance of any other covenant or condition of this Lease on the part of Tenant to be performed for a period of twenty (20) days; or • At the option of Landlord, failure to satisfy any condition set forth in this lease.

22.LITIGATION EXPENSES
If either party shall bring an action against the other by reason of the breach of any covenant, warranty, or condition hereof, or otherwise arising out of this Lease, whether for declaratory or other relief, the prevailing party in such suit shall be entitled to its costs of suit and reasonable attorney fees, which shall be payable whether or not such action is prosecuted to judgment. “Prevailing Party” within the meaning of this paragraph shall include without limitation a party who brings an action against the other after the other’s breach of default, if such action is dismissed upon other’s breach or default, if such action is dismissed upon the other’s payment of the sums allegedly due or performance of the covenant’s allegedly breached, or if the plaintiff obtains substantially the relief sought by it in the action.

23. SURRENDER OF PREMISES
Tenant agrees to surrender the Premises at the expiration or termination of the tenancy herein created in the same condition as the Premises were in at the beginning of the tenancy, reasonable use and were thereof and damage by act of God or the elements excepted. The voluntary or other surrender of this Lease by Tenant or a mutual cancellation thereof shall not work a merger, and shall, at the option of City, terminate all or any existing subleases or sub-tenancies, or may, at the option of City, operate as an assignment to City of any or all such subleases or sub-tenancies.

24.DISCRIMINATION
Tenant shall not nor shall it allow it’s permitted users to discriminate in the use or occupancy of the premises based on age, race, sex, ethnicity or religion or any other state or federally protected class of persons.

25.WAIVER
Any waiver, expressed or implied, by either party of any breach by the other party of any agreement, term or condition of this Lease shall not be, or be construed to be, a waiver of any subsequent breach of a like or other agreement, term of conditions hereof; and the acceptance of rent hereunder shall not be, or be construed to be, a waiver of any breach of any agreement, term or condition of this Lease, except as to the payment of rent so accepted. The rights and remedies of either party under this Lease shall be cumulative and in addition to any and all other rights and remedies which either party as or may have.

26.QUIET ENJOYMENT
City covenants and warrants that upon Tenant’s paying the rent and observing and performing all of the terms, covenants, and conditions on Tenant’s part to be observed and performed hereunder, Tenant shall and may peaceably and quietly enjoy the Premises hereby demised, subject nevertheless to the terms and conditions of this Lease.

27.NOTICES
All notices, consents, waivers, or other communications which this Lease requires or permits either party to give to the other shall be in writing and shall be served personally and forwarded by registered or certified mail, return receipt requested, made upon or addressed to the respective parties or such other address as may be contained in a notice from either party to the other given pursuant to this paragraph, as follows:

City of Watsonville President
City Clerk’s Office Corralitos Woman’s Club
275 Main Street, Suite 400 (4th Floor) P.O. Box 997
Watsonville, CA 95076 Freedom, CA 95019

28.RIGHT OF CITY TO ENTER PREMISES
A. City shall have the right to enter upon the Premises at all reasonable times during the term of this Lease for any of the following purposes:

1. To inspect the Premises;

2. To determine whether the Premises are in good condition and whether Tenant is complying with its obligations under this Lease;

3. To do any necessary maintenance or perform any auditing, testing or sampling and to make any restoration to the Premises that City has the right or obligation to perform;

4. To serve, post, or keep posted any notices required or allowed under the provisions of this Lease;

5. To post “for sale” signs at any time during the Term and to post “for rent” or for lease” signs during the last six (6) months of the Term or during any period while Tenant is in default;

6. To show the Premises to brokers, agents, prospective buyers, or other persons interested in the purchase of the Premises at any time during the Term; and

7. To show the Premises to brokers, agents, prospective tenants and other persons interested in leasing the Premises during the last six (6) months of the Term.

B. City shall not be liable in any manner for any inconvenience, disturbance, loss of business, nuisance, or other damage arising out of City's entry on the Premises as provided in this paragraph, except for property damage resulting from the negligent acts or omissions of City or its authorized representatives.

Tenant shall not be entitled to an abatement or reduction of rent if City exercises any rights reserved in this paragraph. City shall conduct City’s activities on the Premises pursuant to this paragraph in a manner that will cause the least possible inconvenience, annoyance, or disturbance to Tenant.

29.RIGHT OF CITY TO AUDIT
City shall have the right to audit and inspect the books and business records of Tenant to determine the frequency and identity of persons and organizations using the Premises for both profit and non-profit activities, and to determine Tenant’s profit and loss, expenses and costs, and generally accepted audit objectives. Such audit shall be conducted not more frequently than quarterly upon ten (10) days written notice of intent to conduct audit given by the City Administrative Services Director.

30.PROPRIETARY AND GOVERNMENTAL ROLES; ACTIONS BY CITY
Except where clearly and expressly provided otherwise in this Lease, the capacity of the City in this Lease shall be as owner and lessor of property only (“Proprietary Capacity”), and any obligations or restrictions imposed by this Lease on the City shall be limited to that capacity and shall not relate to, constitute a waiver

of, supersede or otherwise limit or affect its governmental capacities, including enacting laws, inspecting structures, reviewing and issuing permits, and all of the other legislative and administrative or enforcement functions pursuant to federal, state or local law (“Governmental Capacity”). When acting in its Proprietary Capacity, discretionary actions may be undertaken by the City Manager or other designees as designated by the City Manager to the extent otherwise provided for in this Lease. In addition, nothing in this Lease shall supersede or waive any discretionary or regulatory approvals required to be obtained from the City under applicable law, nor guarantee that the City, in its Governmental Capacity, will grant any particular request for a license, permit or other regulatory approval. Tenant understands that the City may grant or deny such request in its sole discretion, and may impose such terms and conditions as it deems consistent with that discretion and applicable law.

31.CONDEMNATION
If the whole or any substantial part of the Premises shall be taken by any paramount public authority under the power of eminent domain then the term of this Lease shall cease as the part so taken from the date the possession of that part shall be taken for any public purpose, and from that day Tenant shall have the right either to cancel this Lease or to continue in the possession of the remainder of the Premises under the term herein provided, except that the square foot rental shall be reduced in proportion to the amount of the Premises taken.

Damages awarded for such taking shall be awarded the City and Tenant waives any claim or interest in remaining term of the leasehold. Provided, however, that City shall not be entitled to any portion of the award made for loss of business installation, relocation, or improvements belonging to Tenant.

32.GENERAL PROVISIONS
• All the provisions of this Lease shall be deemed and construed to be “covenants” as though the words imported such covenants were used in each separate paragraph hereof, except when expressed as conditions.
• This Lease shall be construed and enforced in accordance with the laws of the State of California. • This Lease and the covenants and agreements herein contained shall bind and insure to the benefit of the parties hereof, their heirs, successors, executors, administrators, and when permitted assigns.
• Whenever consent or approval of either party is required, that party shall not unreasonably withhold such consent or approval.
• Tenant shall deliver to City on execution of this Lease, that party shall not unreasonably withhold such consent or approval.
• Tenant shall deliver to City on execution of this Lease, a certified copy of a resolution of its governing body authorizing the execution of this Lease and naming the officers that are authorized to execute this lease on behalf of the corporation. • This Lease contains all the agreements of the parties and cannot be amended or modified except by a written agreement.
• There are two Exhibits to this Lease: A and B.
 Exhibit A: Premises
 Exhibit B: Rental Agreement and the Rules and Regulations for use of the Corralitos Woman’s Clubhouse

33. SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year first above written.

CITY TENANT
City of Watsonville, a municipal corporation Corralitos Woman’s Club, a corporation By: By: __________
Rene Mendez, City Manager Dean Prikazsky, President
ATTEST:
_________________________________________
Irwin Ortiz, City Clerk
APPROVED AS TO FORM:

Samantha Zutler, City Attorney

EXHIBIT “A”

PREMISES
The Premises for this lease include the area outlined in red below, located at 33 Browns Valley Road, Watsonville, CA 95076.

Corralitos Woman’s Club
Clubhouse Facility Use Application
Date of Event:________________________
The undersigned, herein referred to as “Lessee” hereby applies to lease from the Corralitos Woman’s Club, hereinafter referred to as “CWC”, the facility located at 33 Browns Valley Road, Corralitos, California, hereinafter referred to as the “Clubhouse” under the following terms:

Lessee:
(person or organization) ___________________________________________________________________________ Address: __________________________________________________________Phone (land/cell) ______________________ Type of Event:_____________________________________________E-Mail:______________________________________ Hours of Event*: Start:___________________________AM/PM / End:______________________________________AM/PM Estimated Attendance**: _____________________ Alcohol: Served____Sold______ (see pg 2 Rules regarding Alcohol) Entertainment (see page 2 for applicable noise regulations) __________________ Kitchen Use: Yes_____No__________ * Facility use is restricted to the hours between 9:00 a.m. and 10:00 pm (and an additional hour for cleanup). Setup and cleaning must be completed within the leased hours. Hours more than agreed event times shall be charged to Lessee. (See Rules & Regulations under Hours). ** Maximum interior Clubhouse facility is 80 persons; additional exterior capacity is 45 people, weather permitting.

Security: CWC requires the hiring of Panther Protective Services for all events where either: 1) alcohol is served, 2) occupancy is 50 persons or greater; or 3) where amplified music is played (only allowed indoors). A permit from Alcohol Beverage Control where applicable (see page 2 for terms). A copy of said permit MUST be submitted to CWC 45 days prior to the event date, and a copy of the permit application must be submitted to CWC within 10 days of reserving the facility.

Liability Insurance: Lessee is required to obtain $1M event insurance policy naming CWC as beneficiary.

FEES PAYMENTS/DOCUMENTATION
Type of Rental Fri/Sat/Sun Mon – Thu 50% Binder Security Deposit
Public $900 $600 $450/$300 $500
Memorial Service $350 $350 $175 $300
Non-Profit* $350 $350 $175 $300
Use of TV $100
* Non-Profit rental fees are for eligible 501(c) organizations registered as nonprofits with the Internal Revenue Service

1. Balance of all fees shall be paid 45 days prior to event

2. All payments shall be made in the form of cash, bank check, money order, or business check payable to
Corralitos Woman’s Club; mailing address is P.O. Box 997, Freedom, CA 95019-0997. Returned-check fee $50.

3. Use of the Clubhouse includes use of interior hall, kitchen, bathrooms, front driveway, and rear patio during the agreed upon date and time(s). Corralitos Woman’s Club is a non-profit 501(c)(3) organization; TAX ID #94-6090638.

4. Cancellation Policy (see page 2).

CERTIFICATION AND HOLD HARMLESS
In signing this application, I certify that I have read and understand the facility Rules and Regulations attached herein and I/my organization will abide by any conditions set forth therein. I also agree to hold the Corralitos Woman’s Club, any and all of its members, Board, agents representing them, independent contractors, and/or vendors associated with the Club free and harmless from any and all loss, damage, liability, personal injury, or property damage resulting from any use of the Clubhouse. This shall include negligent conduct of indemnities. This covers all liability, personal injury, or property damage resulting from the service of alcoholic beverages and/or use of illegal substances by guests during the use of the Clubhouse facility and grounds. Failure to disclose information/intended use of music, alcohol or number of attendees will be grounds for forfeiture of all deposits/fees.

LESSEE: CORRALITOS WOMAN’S CLUB REPRESENTATIVE:

Signature: _______________________________________ Signature: _________________________________________ Printed Name/Date: ______________________________ Printed Name/Date: _______________________________ Rental Fee $
Security Deposit $
50% Binder -$
Balance Owed $
Balance Payment
Balance Due Date
Panther Security
ABC Permit
Proof of Insurance

EXHIBIT B

Corralitos Woman’s Club
Clubhouse Facility Use Application
Date of Event:________________________

RULES AND REGULATIONS FOR USE OF CWC CLUBHOUSE
Lessee is agrees to the following terms. (Please initial each item below) HOURS

1._____Hours requested include your group’s event setup and cleanup time. Individuals associated with the event will not be allowed in the facility before the agreed start time unless specifically designated. All individuals associated with the event must vacate the facility by the indicated ending time.

2. _____Delivery of supplies or equipment will not be accepted in the facility prior to the indicated event start time without prior approval.

3. _____In accordance with the County of Santa Cruz noise ordinance 4.10, all amplified music in the Clubhouse must stop at 10:00 pm and be at or below the required decibel level. No amplified music allowed outdoors.

4._____All events will end no later than 10:00 pm with an additional hour for cleanup. Clubhouse will be cleaned/vacated by 11:00 pm.

5. ____Overtime charges will be billed to Lessee at $100 per hour (Partial hours will be billed as whole hours).

INSURANCE

1. ___Lessee is required to obtain event insurance with minimum coverage of $1,000,000 (One Million dollars), naming the Corralitos Woman’s Club as co-insured.

ALCOHOL

1._____No alcoholic beverage shall be sold on the premises unless first obtaining a permit from the Alcohol Beverage Control. A copy of permit application must be obtained within 10 days of booking the event, and a copy of the final permit submitted to the Club 45 days prior to the event. Permit to be posted at the event.

2._____No alcoholic beverages shall be served to minors. Alcohol consumption by underage guests shall result in immediate cessation of the event.

PAYMENT OF FEES & SECURITY DEPOSIT REFUNDS

1._____The security deposit may be refunded, all or in part, based on the condition of the Clubhouse premises following the event, time the facility is vacated, additional custodial services required, and any other damages incurred.

2._____Any refund or partial refund of the security deposit will be returned within 30 business days by U.S. Mail, if the premises are left in clean and satisfactory condition. Any damages will be deducted from the security deposit per post-event checklist.

CANCELLATIONS

1._____If cancellation of facility use is necessary, the CWC must be notified at least thirty (30) days in advance of the scheduled event date in order to receive a refund, minus $50 for rebooking fee. If less than thirty (30) days’ notice is given, all rental fees will be forfeited.

2._____The Corralitos Woman’s Club is a designated community Emergency Facility, and in case of an emergency where the building requires occupancy by First Responders, the event will be cancelled and all fees will be reimbursed to the lessee, with no liability incurred by CWC.

BUILDING SETUP/CLEANUP

1._____ONLY CWC-PROVIDED (MAGIC TAPE) AND PUSHPINS ARE
PERMITTED TO AFFIX DECORATIONS ON WALLS. ALL OTHER
MATERIALS ARE STRICTLY PROHIBITED. WALL DAMAGE WILL BE
ASSESSED IMMEDIATELY.

2.____CONFETTI or GLITTER is prohibited inside or outside the Clubhouse.

3._____Use of fireplace, flaming candles, tea lights, or other open flame decorations are PROHIBITED in or on the facility premises.

4.____NO INFLATABLE BOUNCY OR JUMPY HOUSES.

5.____Decorations containing dyes that could stain tables, walls, floors or woodwork are not allowed.

6.____Window blinds should not be raised; louvers may be adjusted for light.

7.____If using kitchen, countertops, sink, floors, stove tops, ovens, microwave, refrigerator, cabinets, and walls should be left in the same condition as at start of event.

8._____It is the responsibility of the Lessee to leave the Clubhouse clean. Floors shall be cleaned of spilled beverages, food, candy, chewing gum, etc. Tables and chairs must be wiped down and left in good working order. Additional
custodial fees and/or damage fees may be deducted from
security deposit as applicable.

9._____Trash must be placed in the trash bags provided, tied securely, and placed in the dumpster found outside the
building. A maximum of 6 (six) bags is allowed.

10._____Recyclable items (cans, glass bottles, plastic bottles) shall be placed in the appropriate recycling receptacles. Boxes must be flattened before placing in receptacle.

11._____Any food scraps should be put in the compost bin/bag provided per instructions on sign in kitchen.

BUILDING SECURITY AND REVOKING A USE

1._____Lessee shall comply with Santa Cruz County Ordinance facility use regulations: maximum Clubhouse capacity is 80 persons; tables, chairs or other obstructions shall not block exit doors; Table arrangement must allow for thirty-six (36) in. aisle clearance in case of emergency evacuation. Smoking is always prohibited on the premises in accordance with
Santa Cruz Fire Ordinance 7.88.070

2.____Failure to observe any rules, regulations,
ordinances of the County of Santa Cruz or improper
conduct will result in the revocation of use and no
deposits will be refunded.

3._____Attendance exceeding approved amount on the contract may be an immediate cause for cancellation of the event.

4._____Fights, vandalism, or unacceptable behavior during a use shall cause an immediate cancellation with no refund of security deposit.

5._____CWC representative(s), CalFire, and/or Santa Cruz County Sheriff reserve the right to access the Clubhouse facility premises at any time during the event. Emergency access (fire lane) must be maintained in the driveway.

EVENT PARKING

1. _____Available parking is in the following locations: in clubhouse driveway, provided unrestricted access is
ensured; and on Browns Valley Road. Parking may be
secured from Corralitos Community Church with a
donation.

The Corralitos Woman’s Club is a non-profit
community service organization with limited
resources. The proceeds from rentals go
directly back into our community. We rely
upon our lessees to leave our facility in order
so we may continue our fundraising efforts.

We appreciate your cooperation!
Lessee
Date

EXHIBIT B

Addendum to Corralitos Woman’s Club Clubhouse Facility Use Application (7/31/22) This addendum to the standard Corralitos Woman’s Club Clubhouse Facility Use Application was created to incorporate latest requirements provided by California Department of Health and Santa Cruz County Health Department. This document is updated as required. Lessee should initial each requirement below and sign/date where indicated.

GENERAL REQUIREMENTS

1._______ (Santa Cruz County Health Department dated 7/28/22): People may choose to mask at any time. People with symptoms, a positive test, or exposure to someone with COVID-19 should wear a mask.

2. _______If additional post-event cleaning is required based on Post Event Checklist Review, the Corralitos Woman’s Club’s designated service provider will complete cleaning. Fees for this cleaning will be deducted as specified in Rules & Regulations.

The Corralitos Woman’s Club wishes to continue to protect the health and safety of the community. We ask that you act responsibly and enjoy our beautiful space, in order to help us remain in service to our greater community.
.

EXHIBIT B

Signed: ____________________________ Date:_____________________ Lessee

EXHIBIT B

2/22/2023 1:10:51 PM
C:\Program Files\eSCRIBE\TEMP\13103336334\13103336334,,,Report - Accept Grant and Award Bid City Plaza Project .docx Agenda Report
MEETING DATE: Tuesday, February 21, 2023
TO: City Council
FROM: PARKS & COMMUNITY SERVICES DIRECTOR CALUBAQUIB

SENIOR UTILITIES ENGINEER BERRY
THROUGH: CITY MANAGER MENDEZ
SUBJECT: RESOLUTIONS ACCEPTING AND APPROPRIATING STATEWIDE

PARK DEVELOPMENT AND COMMUNITY REVITALIZATION
PROGRAM GRANT FUNDS IN THE AMOUNT OF $3,349,595 AND

AWARDING CONTRACT TO SSA LANDSCAPE ARCHITECTS

FOR LANDSCAPE ARCHITECTURAL DESIGN SERVICES FOR

THE CITY PLAZ
RECOMMENDED ACTION:

It is recommended that the Council:

1. Adopt a resolution authorizing the City Manager to accept the Statewide Park Development and Community Revitalization Program Grant funds in the amount of $3,349,595 for the Watsonville City Plaza Revitalization project and to execute all required documents, future non-substantive amendments, if any, and appropriate the funds to the grant budget; and

2. Adopt a resolution awarding a contract to SSA Landscape Architects for landscape architectural design services for the Watsonville City Plaza Revitalization project in an amount not to exceed $499,924 and authorizing and directing the City Manager to execute same.

BACKGROUND:

On February 11, 2020 the City adopted Resolution No. 13-20 which approved the City of Watsonville 2020 Parks and Recreation Strategic Plan, which included the Ramsay Park concept plan and the City Plaza concept plan. The City then focused on implementing both Ramsay and City Plaza conceptual plans into design documents for construction.

As part of the process of preparing the strategic plan, staff secured the Administrative Use Permit with Design Review and Environmental Review (PP2019-448) for 350 Main Street, the City Plaza Site, from the City’s Community Development Department.

Included with that review was an approved Initial Study – Mitigated Negative Declaration, meeting CEQA criteria.

2/22/2023 1:10:51 PM
C:\Program Files\eSCRIBE\TEMP\13103336334\13103336334,,,Report - Accept Grant and Award Bid City Plaza Project .docx In the fall of 2020, Council approved the application for a grant to the State of California Statewide Park Development and Community Revitalization Program (Resolution No. 171-20).

In December of 2021, Parks and Community Services was awarded a grant in the amount of $3,349,595 for this project. With both Council and planning approval of the project, along with a funding source, the next steps were to select an architect to produce construction documents.

DISCUSSION:

In November of 2022, staff sent out a Request for Proposal for Landscape Architectural Design and Consultant Services for the City Plaza Revitalization project. The proposal was sent to a handful of consultants we have worked with in the past along with being advertised in the RFP section of EBidBoard. In describing the project RFP states:

The City Plaza Revitalization Project weaves together the space's rich history with the community's current and modern use of this culturally significant asset. Known as the "heart of the city," this downtown plaza has been the focus of community gatherings and celebrations for well over a century. Watsonville City Plaza is on the National Register of Historic Places, with its classic design, which includes a bandstand (gazebo) and fountain. The community proposes to restore these features to their historic grandeur, preserving them for the enjoyment of future generations. Integrating new recreational features and upgrading the park’s infrastructure will serve to accommodate 20+ annual events and weekly farmers’ market in and around the plaza. This project will increase recreational opportunities and protect a safe green space for residents, while augmenting the site’s historical and cultural significance for one of Watsonville’s densest and most disadvantaged neighborhoods.

Improvements included:
 Seismically retrofit and cosmetically refurbish the gazebo  Repaving of gazebo surface and surroundings with permeable pavers and landscaping
 Refurbishment of the fountain area with a brick plaza, park benches, and interpretative signage
 Installation of 18-inch high permanent stage facing out from the gazebo toward Main Street with removable stage portion with paver pattern and guardrail.  ADA-accessible spectator area, permeable pavers, and a sloped ramp with guardrails to the stage
 Installation of a game table area south of the gazebo  Installation of a group picnic area east of the gazebo  Repaving of existing pathways with brick accent
 Installation of a historic/art element pedestal at the corner of Main Street and East Beach Street
 Installation of new public art (to be coordinated with City selected artist)  Drinking fountain with bottle-filling station
 Bicycle parking

2/22/2023 1:10:51 PM
C:\Program Files\eSCRIBE\TEMP\13103336334\13103336334,,,Report - Accept Grant and Award Bid City Plaza Project .docx  Improved electrical infrastructure to accommodate cultural performances, holiday lighting and upgrades and expansion of existing park lighting.  Planting of six 15-gallon sized trees, 14 smaller ornamental trees, and four large statured shade trees
o 17 existing trees will be maintained on site, including three trees designated under Chapter 7-13, Preservation of Historical Trees, of the Watsonville Municipal Code.
o 16 trees will be removed from the site, including nine unhealthy trees, and two trees will be relocated.

Proposals were due on December 23, 2022. Five consulting firms submitted packages for review:
 SSA Landscape Architects / Santa Cruz
 Verde Design / Santa Clara
 RHAA Landscape Architects / San Francisco
 SWA Group / San Francisco
 The Wallace Group / San Luis Obispo
A team was established to review the proposals and interview the firms. This team was comprised of staff from Parks and Community Services, Public Works, and the Planning section of the Community Development Department. There was also a member of the Pajaro Valley Historical Association.

All firms were invited to be interviewed. These meetings took place at the Parks and Community Services offices on January 30 and 31, 2023.

Upon completion of the interviews and internal discussion, staff chose to award the project to SSA Landscape Architects of Santa Cruz. The committee liked their straightforward approach to the project, in terms of site review investigation, execution of design, and experience in construction management. SSA has a great track record of projects with Santa Cruz County and the Pajaro Valley.
 Callaghan Park Renovation / Watsonville – 2009
 Pajaro Neighborhood Park / Pajaro– 2014
 Heart of Soquel Plaza Park / Soquel– 2015
 Chanticleer Neighborhood Park / Live Oak – 2020
 Watsonville Slough Farm / near Pajaro High School – in Design There was one final project which impressed staff, which was the Paso Roble City Park, completed in 2016. This was a renovation of a park very similar to the City Plaza, and work included renovation of their historic bandstand.

Based upon their approach to this project and their experience in similar projects, staff is recommending the Council to award the design contract for the City Plaza Revitalization project to SSA Landscape Architects in the amount of $499,924.

2/22/2023 1:10:51 PM
C:\Program Files\eSCRIBE\TEMP\13103336334\13103336334,,,Report - Accept Grant and Award Bid City Plaza Project .docx STRATEGIC PLAN:

The Council’s adoption of this resolution is consistent with the Council’s priorities of:
 3 - Infrastructure & Environment – Renovation of significant City infrastructure.  4 -Economic Development – The Plaza serves as a gathering place and focal point for events and social life in the downtown.
 5 - Community Engagement & Well-Being – Parks support community well-being.

FINANCIAL IMPACT:

The State of California Statewide Park Development and Community Revitalization Grant awarded will be appropriated to account 0260-337-7361-09053 in the amount of $3,349,595. The contract with SSA Landscape Architects will be charged to this account in the amount of $499,924.

ALTERNATIVE ACTION:

The Council may choose to:
 Not accept the grant and not award this contract with SSA Landscape Architects.  Accept the grant and not award this contract with SSA Landscape Architects.  Accept the grant and award this contract to another firm.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

Reso No. (CM)
Meeting Date: 022123 SWZ ______ RM ______ PCS ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE ACCEPTING THE STATEWIDE PARK DEVELOPMENT

AND COMMUNITY REVITALIZATION PROGRAM GRANT FUNDS IN THE AMOUNT OF $3,349,595; AUTHORIZING THE CITY MANAGER OR HIS

DESIGNEE TO EXECUTE A STANDARD AGREEMENT AND ANY
AMENDMENTS THERETO; AND ANY NECESSARY DOCUMENTS; AND

APPROPRIATING SUCH FUNDS TO THE SPECIAL GRANTS FUND
WHEREAS, on February 11, 2020, the City adopted Resolution No. 13-20 (CM) approving the City of Watsonville 2020 Parks and Recreation Strategic Plan, which included the Ramsay Park concept plan and the City Plaza concept plan; and WHEREAS, on September 22, 2020, Council adopted Resolution No. 171-20 (CM) approving the application for a grant to the State of California Statewide Park Development and Community Revitalization Program for the Watsonville City Plaza Revitalization Project; and
WHEREAS, in December of 2021, the City was awarded a grant from the State of California Statewide Park Development and Community Revitalization Program in the amount of $3,349,595 for the Watsonville City Plaza Revitalization Project.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution accepting a Grant from the State of California does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. That the Council hereby accepts the State of California Statewide Park Development and Community Revitalization Grant, in the amount of $3,349,595 for the Watsonville City Plaza Revitalization Project.

Reso No. (CM)
Meeting Date: 022123
ri 2/15/2023 7:41:08 PM
2 3. That the City Manager of the City of Watsonville, is authorized and directed to execute in the name of the City of Watsonville, all documents required by the State of California, Department of Parks and Recreation, for the California Statewide Park Development and Community Revitalization Grant, and any amendments thereto, as well as any necessary documents.

4. That the $3,349,595 grant is hereby appropriated to the Special Grants Fund [0260].
************************************

Reso No. (CM)
Meeting Date: 022123 1
RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE AWARDING PROFESSIONAL SERVICES CONTRACT
TO SSA LANDSCAPE ARCHITECTS, INC., A CORPORATION, FOR

LANDSCAPE ARCHITECTURAL DESIGN SERVICES FOR THE

REVITALIZATION OF THE WATSONVILLE CITY PLAZA PROJECT, IN AN AMOUNT NOT TO EXCEED $499,924; AND AUTHORIZING AND

DIRECTING THE CITY MANAGER TO EXECUTE SAME
WHEREAS, § 3-5.500 of the Municipal code provides that an RFP or RFQ process is found to be an effective and efficient way to procure professional services and procurement of professional services shall be based on proposals solicited from capable professionals and be evaluated based on a combination of factors including education, training, experience and demonstrated competence and professional qualifications necessary for the satisfactory performance of the services required; and WHEREAS, § 3-5.540 of the Municipal Code provides that contracts for professional services estimated to cost more than One Hundred Thousand and no/100ths ($100,000.00) Dollars must be awarded by the Council, and that the selection will be based on demonstrated competence and on the education, training and experience and professional qualifications necessary for the satisfactory performance of the services required, that cost will not be the only basis for selection, use a qualifications-based selection process as described in subdivision (a) of § 45271 of the California Government Code and negotiated as described in § 4528; and WHEREAS, a Request for Proposals (RFP) was issued on November 16, 2022, asking for qualified consultants to assist the City in providing Landscape Architectural Design and Consultant Services for the Watsonville City Plaza Revitalization Project; and

1 All references to section numbers will be to the California Government Code

Reso No. (CM)
Meeting Date: 022123 2
WHEREAS, the deadline for submittal of Request for Statement of Qualifications was December 22, 2022; and
WHEREAS, a total of five (5) firms submitted qualification statements; these statements were reviewed by City staff and a list was developed; and WHEREAS, the City Manager has recommended that the proposal from SSA Landscape Architects, Inc., in an amount not to exceed $499,924, be accepted as the best response.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution awarding a contract to SSA Landscape Architects, Inc., does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. The Council hereby awards a contract to SSA Landscape Architects, Inc., for Landscape Architectural Design and Consultant Services for Revitalization of the Watsonville City Plaza Project, in an amount not to exceed $499,924.

3. That the Contract for Consultant Services between the City of Watsonville and SSA Landscape Architects, Inc., a copy of which is attached hereto and incorporated herein by this reference, is hereby approved.

4. Consultant shall file FPPC form 700s and 805s pursuant to section 19 of the Contract.

5. The City Manager is hereby authorized and directed to execute said contract for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney.
**************************************

2/15/2023 8:15:01 PM
C:\Program Files\eSCRIBE\TEMP\20145732341\20145732341,,,RESOLUTION DIRECTING FILING OF 2023-24 ANNUAL ENGINEER'S REPORT FOR LLMADS.docx
Agenda Report
MEETING DATE: Tuesday, February 21, 2023
TO: City Council
FROM: PARKS & COMMUNITY SERVICES DIRECTOR CALUBAQUIB

PARKS SUPERINTENDENT MEDINA
SUBJECT: DIRECTING FILING OF THE 2023-24 ANNUAL ENGINEER’S

REPORT FOR THE LANDSCAPE & LIGHTING MAINTENANCE
ASSESSMENT DISTRICTS PK-03-02 BAY BREEZE, PK-03-03
VISTA MONTAÑA AND PK-94-1 GONZALES STREET ALLEY
STATEMENT OF ISSUES:

This resolution is required to direct staff and the Assistant Public Works & Utilities Director, as the Engineer, to prepare the necessary reports, including the program budget and the assessment schedule for each Landscape & Lighting Maintenance Assessment District (LLMAD), for City Council consideration. The Engineer’s Report should appear for approval on the March 28, 2023 City Council meeting agenda.

RECOMMENDED ACTION:

Staff recommends that the City Council:

1. Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-03-02 (Bay Breeze),

2. Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-03-03 (Vista Montaña), and

3. Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-94-1 (Gonzales Street Alley).

DISCUSSION:

The 1972 Landscaping and Lighting Act requires various resolutions to provide notice to those affected relating to annual assessments levied after the formation of an assessment district. These resolutions directing the filing of the Annual Engineer’s Report, pursuant to California Streets and Highways Code section 2262, triggers the development of the 2023/2024 program and budget.

Bay Breeze
The Bay Breeze Subdivision is located at the southwest corner of Ohlone Parkway and Harkins Slough Road. The improvements include maintenance of landscaping, lighting, street trees, perimeter fencing, a pedestrian path, detention basins and a sewer pump station. The project’s developer, Western Pacific Housing, proposed that the operation,

2/15/2023 8:15:01 PM
C:\Program Files\eSCRIBE\TEMP\20145732341\20145732341,,,RESOLUTION DIRECTING FILING OF 2023-24 ANNUAL ENGINEER'S REPORT FOR LLMADS.docx
maintenance, repair and replacement of these items be funded through the formation of a LLMAD as provided in the Project’s Tentative Map Condition No. 17.

The City accepted the public improvements at the City Council meeting of March 22, 2005, (Resolution No. 60-05 (CM)). City staff now maintains the above-listed improvements.

Vista Montaña
The Vista Montaña subdivision is located off of East Lake Avenue and adjacent to Ann Soldo Elementary School. The Vista Montaña Subdivision LLMAD is comprised of two Zones: A and B. Zone A benefits all parcels within the District which includes, for example, the street lighting installed along Highway 152, the landscape improvements along Highway 152 and the agricultural buffer area. Zone B benefits those parcels within the single-family residential area primarily and includes the maintenance of the “street end caps”, the “park strips” and street lighting.

The subdivision’s developer, the Clarum Corporation, proposed that the maintenance of these items be funded through a Landscaping and Lighting Assessment District and was required in Tentative Map Condition No. 74.

Gonzales Street Alley
Gonzales Street Alleyway District was established in order to assist the residents bordering the alleyway to cooperatively maintain this parcel that is now owned by the City.

The annual cost to maintain the parcel is estimated at $640 and is spread among 17 parcels. Under Proposition 218, the Gonzales Street Alleyway Assessment District meets the test of “special benefit” and is exempt from any mail ballot process.

STRATEGIC PLAN:

The Assessment District addresses the City Council’s Strategic Goal 03-Infrastructure & Environment by working to maintain our built infrastructure and preserve our natural environment through careful planning, preservation and maintenance for current residents and future generations.

FINANCIAL IMPACT:

The preparation of the Engineer’s Report will be accomplished by City Staff at no cost to the District. The total assessment to be collected for 2023-24 will be determined upon preparation of the Engineer’s Report.

ALTERNATIVE ACTION:

None. This resolution is procedural and does not obligate the City Council to further action.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

Reso No. (CM)
Meeting Date: 022123
ri 2/16/2023 1:49:21 PM SWZ ______ RM ______ PCS ______ 1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE DIRECTING THE FILING OF THE 2023-2024 ANNUAL

ENGINEER'S REPORT FOR THE BAY BREEZE SUBDIVISION

LANDSCAPING AND LIGHTING MAINTENANCE ASSESSMENT
DISTRICT NO. PK-03-02 (LLMAD)
Assessment District No. PK-03-02
(Pursuant to the Landscaping and Lighting Act of 1972)
WHEREAS, the Bay Breeze Subdivision Landscaping and Lighting Maintenance Assessment District was formed pursuant to the Landscaping and Lighting Act of 1972; and
WHEREAS, on March 25, 2003, the City Council adopted Resolution No. 73-03 (CM), a Resolution of Intention to Order Improvements, Levy and Collect Assessments for the Bay Breeze Subdivision; and
WHEREAS, the improvements to be made in this assessment district are generally described as follows:
(a) Operate, maintain, repair, and replace the interior streetlights within the Subdivision.
(b) Maintain and replace the street trees within the District. (c) Operate, maintain, repair, and replace the detention basins and detention basin access roads within the District.
(d) Operate, maintain, repair, and replace the perimeter fencing within the District on its exterior boundaries.
(e) Maintain and replace the plantings done as a part of the wetland mitigation plan.

Reso No. (CM)
Meeting Date: 022123
ri 2/16/2023 1:49:21 PM
2 (f) Maintain the Environmental Management Open Space parcel to be created inside the District.
(g) Maintain, repair, and replace the pedestrian path within the slough area outside adjacent to the District.
(h) Maintain, repair, and replace the landscaping within the public lands [abutting] and within the District, including the Ohlone Parkway medians. (i) Operate, maintain, repair, and replace the sewer pump station within the District.
(j) Maintain the graffiti coatings on walls within the District and with public exposure.
(k) Administrative services to operate the District; and WHEREAS, on June 10, 2003, the City Council adopted Resolution No. 150-03 (CM) ordering the maintenance of improvements and confirming the first annual Engineers Report (including the diagram and assessment) and levying the assessment; and WHEREAS, Streets and Highways Code Section 22621 requires proceedings to be taken for any fiscal year during which an assessment is to be levied and collected within an existing assessment district; and
WHEREAS, it is anticipated that an assessment will be levied and collected within this Assessment District during fiscal year 2023-2024 in an estimated amount to be determined upon preparation of the Engineer’s Report; and WHEREAS, this Resolution is adopted pursuant to Section 22622 of the California Streets and Highways Code; and
WHEREAS, there are no new improvements and no substantial changes in existing improvements proposed for said Assessment District.

Reso No. (CM)
Meeting Date: 022123
ri 2/16/2023 1:49:21 PM
3 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution directing the filing of the 2023-2024 Engineer’s Report does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. The City Council finds that the foregoing recitals are true and correct.

3. That the Engineer is hereby ordered to prepare and to file the 2023-2024 annual report with the City Clerk for the Bay Breeze Subdivision Landscaping and Lighting Maintenance District in accordance with Article 4 (commencing with Section 22565) of Chapter 1 of the Landscaping and Lighting Act of 1972 of the Street and Highways Code. **********************************

Reso No. (CM)
Meeting Date: 022123
ri 2/15/2023 8:15:02 PM
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE DIRECTING THE FILING OF THE 2023-2024 ANNUAL ENGINEER'S REPORT FOR THE VISTA MONTAÑA SUBDIVISION

LANDSCAPING AND LIGHTING MAINTENANCE ASSESSMENT
DISTRICT NO. PK-03-03 (LLMAD)
Assessment District No. PK-03-03
(Pursuant to the Landscaping and Lighting Act of 1972)
WHEREAS, the Vista Montaña Subdivision Landscaping and Lighting Maintenance Assessment District was formed pursuant to the Landscaping and Lighting Act of 1972; and
WHEREAS, on April 22, 2003, the City Council adopted Resolution No. 98-03 (CM), a Resolution of Intention to Order Improvements, Levy and Collect Assessments for the Vista Montaña Subdivision; and
WHEREAS, the improvements to be made in this assessment district are generally described as follows:
(a) Operate, maintain, repair and replace the storm drain detention basins, drainage channels, drainage facilities and erosion control measures within the agricultural buffer area, including the proposed storm drain culvert crossing Highway 152 and the inlet structure on the west side of Highway 152.
(b) Maintain, repair, and replace all facilities within the agricultural buffer area (except streets and utilities) including but not limited to landscaping, signage, perimeter walls, retaining walls, pedestrian paths and erosion control plantings within or adjacent to the detention basins and drainage swale.
(c) Operate, maintain, repair, and replace and supply power to the street lighting within the District.

Reso No. (CM)
Meeting Date: 022123
ri 2/15/2023 8:15:02 PM
2 (d) Maintain, repair, and replace the landscape parkway strip and street trees within the District.
(e) Maintain, repair, and replace the landscaping and replace the perimeter wall along Highway 152, which may or may not be within the District boundaries. (f) Maintain, repair, and replace the pedestrian/bike path connecting McKenzie Avenue and outside the subdivision.
(g) Provide administrative services to operate the District; and WHEREAS, on June 10, 2003, the City Council adopted Resolution No. 149-03 (CM) ordering the maintenance of improvements and confirming the first annual Engineers Report (including the diagram and assessment) and levying the assessment; and
WHEREAS, Streets and Highways Code Section 22621 requires proceedings to be taken for any fiscal year during which an assessment is to be levied and collected within an existing assessment district; and
WHEREAS, it is anticipated that an assessment will be levied and collected within this Assessment District during fiscal year 2023-2024 in an estimated amount to be determined upon preparation of the Engineer’s Report; and WHEREAS, this Resolution is adopted pursuant to Section 22622 of the California Streets and Highways Code; and
WHEREAS, there are no new improvements and no substantial changes in existing improvements proposed for said Assessment District.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution directing the filing of the 2023-2024 Engineer’s

Reso No. (CM)
Meeting Date: 022123
ri 2/15/2023 8:15:02 PM
3 Report does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. The City Council finds that the foregoing recitals are true and correct.

3. That the Engineer is hereby ordered to prepare and to file the 2023-2024 annual report with the City Clerk for the Vista Montaña Subdivision Landscaping and Lighting Maintenance District in accordance with Article 4 (commencing with Section 22565) of Chapter 1 of the Landscaping and Lighting Act of 1972 of the Street and Highways Code.
*****************************************

Reso No. (CM)
Meeting Date: 022123
ri 2/16/2023 1:48:24 PM SWZ ______ RM ______ PCS ______ 1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE DIRECTING THE FILING OF THE 2023-2024 ANNUAL

ENGINEER'S REPORT FOR THE GONZALES STREET ALLEYWAY

LANDSCAPING AND LIGHTING MAINTENANCE ASSESSMENT
DISTRICT NO. PK-94-1 (LLMAD)
Assessment District No. PK-94-1
(Pursuant to the Landscaping and Lighting Act of 1972)
WHEREAS, the Gonzales Street Alleyway Landscaping and Lighting Maintenance Assessment District was formed pursuant to the Landscaping and Lighting Act of 1972; and
WHEREAS, on October 11, 1994, the City Council adopted Resolution No. 297-94 (CM), a Resolution of Intention to Order Improvements, Levy and Collect Assessments for the Gonzales Street Alleyway Landscaping and Lighting Assessment District No. PK-94- 1; and
WHEREAS, Resolution No. 297-94 (CM) described the improvements as follows:
the installation, servicing, and/or maintenance; of public lighting, landscaping, park and recreational improvements within the Assessment District; and WHEREAS, on November 29, 1994, the City Council adopted Resolution No. 352- 94 (CM) ordering the maintenance of improvements and confirming the first annual Engineer’s Report (including the diagram and assessment) and levying the assessment; and
WHEREAS, the current plans and specifications call for annual maintenance: a) routine plant care and mowing, and b) alleyway maintenance; and

Reso No. (CM)
Meeting Date: 022123
ri 2/16/2023 1:48:24 PM
2 WHEREAS, Streets and Highways Code Section 22621 requires proceedings to be taken for any fiscal year during which an assessment is to be levied and collected within an existing assessment district; and
WHEREAS, it is anticipated that an assessment will be levied and collected within this Assessment District during fiscal year 2023-2024 in an estimated amount to be determined upon preparation of the Engineer’s Report; and WHEREAS, this Resolution is adopted pursuant to Section 22622 of the California Streets and Highways Code; and
WHEREAS, there are no new improvements and no substantial changes in existing improvements proposed for said Assessment District.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution directing the filing of the 2023-2024 Engineer’s Report does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. The City Council finds that the foregoing recitals are true and correct.

3. That the Engineer is hereby ordered to prepare and to file the 2023-2024 annual report with the City Clerk for the Gonzales Street Alleyway Landscaping and Lighting Maintenance Assessment District PK-94-1 in accordance with Article 4 (commencing with Section 22565) of Chapter 1 of the Landscaping and Lighting Act of 1972 of the Street and Highways Code.
***********************************************

1 Reso No. (CM)
Meeting Date: 022123 SWZ ______ RM ______
RESOLUTION NO. __________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

APPOINTING MEMBER TO THE CITY OF WATSONVILLE PERSONNEL

COMMISSION
[DISTRICT 3]
WHEREAS, Section 908 of the City Charter established a seven member Personnel Commission with specific powers and duties; and WHEREAS, Section 902 of the Charter of the City of Watsonville authorizes each member of the Council to appoint one member to each City board or commission subject to approval by resolution of the Council adopted by at least four (4) affirmative votes.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution appointing a member to the City’s Personnel Commission does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. That Council Member Orozco hereby nominates Lizett Zuñiga Zamudio for appointment to the Personnel Commission (expires November 2026), representing District 3.

3. That the Council hereby approves such appointment.

4. That the City Clerk is hereby directed to transmit a copy of this resolution to the newly appointed member and to the Secretary of the Personnel Commission. ********************************

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Agenda Report
MEETING DATE: Tuesday, February 14, 2023
TO: City Council
FROM: ADMINISTRATIVE SERVICES DIRECTOR DURAN
THROUGH: CITY MANAGER MENDEZ
SUBJECT: CONSIDERATION OF COMPREHENSIVE FINANCIAL REPORT AND MID-YEAR REPORT FOR FY 2022-23
STATEMENT OF ISSUES:

Receive audited financial reports for Fiscal Year 2021-22 and a mid-year financial report for FY 2022-23.

RECOMMENDED ACTION:

That the City Council:

I. Accept by motion, the Annual Comprehensive Financial Report for FY 2021-22, and
II. Accept by motion, the mid-year financial report for the 2022-23 Fiscal Year:

III. Accept by motion, the Annual Measure G Audit Report for FY 2021-22, and
IV. Approve a resolution appropriating $1,789,759 into various funds, as shown in Exhibit A attached to the resolution, and authorizing four additional positions.

DISCUSSION:

I. Review of Fiscal Year 2021-22
The City’s Charter and the State of California law require that all general-purpose local governments publish a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (US GAAP).

Upon its completion, the City prepared the Annual Comprehensive Financial Report (ACFR) and submitted it to the Government of Finance Officers Association (GFOA) for consideration in receiving the “Certificate of Achievement for Excellence in Financial Reporting”. The ACFR was audited by Maze and Associates, a certified public accountant firm, who issued an unqualified opinion of the City's audit.

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Highlights from the audited statements include:
 The City of Watsonville's assets exceeded its liabilities by $265 MM. See Table 1 below.
 The City's total net position increased by $14.6 MM with a $5.3 MM increase in the net position for governmental activities, mainly due to the receipt of American Rescue Plan Act (ARPA) monies, and a $9.4MM increase in the net position for business type activities, mostly due to Water ending with positive operating income.  As of the end of the fiscal year, the City's governmental funds reported a combined ending fund balance of $45.3 MM, a $2.4 MM increase from the prior fiscal year. The fund balance was comprised of $147K non-spendable, $27.4 MM restricted, and $17.8MM unassigned, with much of the unassigned balance created by increases in impact fees and Measure D during the fiscal year 2021-22, as well as budgetary expenditure savings.

General Fund Balance
The General Fund balance for the fiscal year 2021-22 was $18.228 MM, a decrease of $43K from the prior fiscal year. The General Fund, which encompasses 18 subaccounts, experienced a $1 MM write-down of the City's share in the Local Agency Investment fund (LAIF) investment. This loss is recorded in the books at year-end but will not be realized. Other subaccounts, such as the computer replacement fund and grants subaccount, decreased due to expenditures on grant programs and awaited reimbursements. Despite this, the General Fund balance stands at approximately 31% of operating expenses, exceeding the Council's approved policy goal of 20%. It is expected that most of the fund balance above the reserve requirement will be spent in future years.

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Table 1:

City of Watsonville’s Net Position
June 30, 2022(in thousands)

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Chart 1:

History of General Fund Balance
I. Review of Fiscal Year 2022-23
Revenues:

The budget for Fiscal Year 2022-23 assumed a return to normalcy with a normal level of revenue growth after the unpredictability of the pandemic.

Property Taxes
The budget assumed a 3.1% growth in property taxes, considering the lower increase in the Consumer Price Index (CPI) for existing assessments would be offset by increases in assessed values of properties changing hands, as well as increases in supplemental and transfer taxes for properties changing hands. The current projections indicate that the city will slightly exceed the budget by around $188K in property taxes, mainly in property tax in-lieu revenues.

Sales tax
Sales tax has been outperforming the budgeted numbers in past years, but the current fiscal year is seeing the amount level off. Consumers are responding to inflation and higher interest rates by slowing down on purchases, leading to a flattening of sales tax. Data through September 30, 2022 shows that sales tax is expected to come in at budget, collecting about the same revenue amount as last fiscal year. The city is also expecting revenues from Measure R to come in later in the fiscal year, with the first remittance expected in June 2023.

Consultants project that the city will collect approximately $1.2 MM by the end of the fiscal year.

Hotel tax
Hotel tax is performing close to projections and at nearly pre-pandemic levels, helped by the opening of the Hampton Inn hotel last fiscal year. Despite two hotels being taken offline for county-related housing, the opening of the Hampton Inn compensates for the loss of revenue from those two hotels.

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Other General Revenues
The city's other general revenues, including utility taxes, franchise fees, and business licenses, are performing as expected and with little variation from the budget. The city sold the Porter Building at the beginning of the fiscal year for $1.1 MM, proceeds were used to donate towards the purchase of Watsonville Hospital and to help offset the costs of the General Plan Update.

The city also loaned the County of Santa Cruz $5 MM towards the purchase of Watsonville Hospital and was quickly repaid. We are reflecting both the expenditure of the loan and the loan proceeds in the first six months of the fiscal year.

Departmental Revenues
The story of departmental revenues reflects the impacts of the pandemic's aftermath. The Community Development Department experienced a surge in activity last fiscal year. This fiscal year building permit issuances have slowed down, leading to revenues coming in under budgeted amounts. The police department will have slightly less revenue than budgeted due to budgeting for two School Resource Officer contracts but only obtaining one, as well as a vacancy in parking enforcement officers. The fire department will partially offset cost overruns by bringing in reimbursements from deploying their strike teams. Recreation fees continue to recover. The parks and community services department will have slightly less revenues than budgeted due to some programs taking longer to recover from the pandemic. The Ramsay Park Center was not available for the gymnastics program, as it was being used as a Covid vaccination site. The department, however, successfully negotiated a contract with the Pajaro Valley Unified School District (PVUSD) for after-school programming. The public works department is showing lower than budgeted revenue in reimbursable activities, but this will be offset by expenditure savings.

Expenditures:

Most departments are staying within budget with minor savings expected. However, there are some areas where departments are facing challenges and require additional funds. 1- Fire Department
The Fire Department has deployed strike teams to assist with wildland fires and provide medical support to firefighters. Despite hiring efforts, they have several vacancies which have resulted in overtime. Some of this overtime is reimbursed and offset by salary savings, but the department is still requesting $150K in overtime. Additionally, they are proposing an appropriation of $75K to offset training costs for the medic support program and to help recruit local EMTs to become accredited firefighters with the city. The department also needs $7.5K for first aid supplies. The $150K in overtime is offset by unplanned strike team revenues as described above.
2- Police
The Police Department is requesting an additional appropriation of $75K to cover overtime costs for an extra training day, as recommended by the Policing Ad Hoc Committee.

Additionally, the department has received $37K from insurance for a damaged vehicle, and it is requesting that the funds be appropriated for its replacement.

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3- Community Development Department
The Community Development Department is experiencing a lower demand for building permits, but they are keeping busy by working on projects from the previous fiscal year and starting the new general plan. They are not requesting any additional funds. 4- City Clerk
The City Clerk Department is requesting an additional appropriation of $51K for hosted services, as they have had to add more users to programs such as DocuSign to make their processes more efficient and require more funds.
5- Public Works
The General Fund divisions of public works cover building, street, and sidewalk maintenance and are requesting an increase in their budget by $165K. This includes $75K for reimbursable property repairs, $20K for MSC charge increases, $10.7K for increased custodial and building maintenance, and $60K for temporary salaries in the gas tax fund due to temporary workers returning after Covid.
6- Parks and Community Services
The Parks and Community Services department is projected to have some savings due to programs recovering slowly after Covid. They are requesting to add 2 positions, a Recreation Specialist and a Recreation Coordinator, to manage their after-school program as a result of a new contract with PVUSD. The estimated cost for these positions through the end of the fiscal year is $51K and will be paid from the revenues collected from PVUSD. The department is also proposing to spend down $341.5K from their Measure Y fund balance for various center improvements such as a new gym floor, upgraded exterior lighting, benches, scoreboard, stage improvements, and other purchases.
7- Storm Costs
The City of Watsonville experienced heavy rains, storms and flooding at the end of last year and beginning of the new calendar year. The president of the United States has declared the “Winter Storms” emergency to include Santa Cruz County. This means that our City can apply for FEMA reimbursement for the damages left behind in the aftermath of the storm.

The City’s initial rough budget submitted to the County is about $21MM. This estimate included an estimated $3 MM for our residents that experienced damage and flooding of their homes.

As the City projects are reviewed and approved by FEMA, we will bring these costs back for additional appropriations request. It is estimated to date the City has spent $886K in storm related costs. City regular staff time was about $402K, overtime costs $254K, materials and supplies about $229K. The City has applied to FEMA to be considered for reimbursement of these costs. We do know some of the staff time costs will not be eligible for reimbursements as these hours are for regular hours worked. Reimbursements are usually slow to come in. It is estimated that the general fund will need additional appropriations in the amount of $500K for the unplanned City storm costs. These costs include Emergency Operations Center, overtime staff costs and clean-up efforts.

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Overall, all other departments are expected to end the year within their budgets, although some General Fund capital projects may not be completed as budgeted this fiscal year and will be rolled into the 2023-24 fiscal year. Tables 2 and 3 summarize all general fund appropriation requests and the overall projection for the general fund for FY 2021-22. Table 2 below shows a summary of all general fund appropriations requests. Table 3 summaries the overall projection for the general fund for FY 2022-23.

Table 2: Summary of General Fund Appropriation Requests

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Table 3: General Fund Summary for Fiscal Year 2021-23

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Other Funds
The Airport Fund ended the fiscal year 2021-22 with $359K in cash, despite facing challenges such as fuel and legal costs. However, the department's conservative approach to revenue projections helped them to end the year on a strong note. In order to offset increased costs for special events and fuel, they are seeking to appropriate $30K and remain on track to maintain their cash balance.

On the other hand, the Utility Enterprise Funds for Water, Sewer, and Solid Waste are witnessing normal revenues and were able to secure state grants to pay aging account balances for customers during the pandemic. These funds expect to fully expend their operating budgets, but not their capital budgets, which will result in an increase in their cash balances by the end of the fiscal year. Additionally, the utilities are requesting two new positions: a Water Operator I to meet operational needs and the upcoming Chromium 6 demand. Also, a Wastewater Operator III is being requested to manage the Recycled Water Treatment Facility more effectively. This position will be reimbursed by the Pájaro Valley Water Agency in the foreseeable future.

Revenues from sales tax are the primary source for the Library, Measure D, and Measure Y funds, and as a result, these funds are projected to have better revenues in FY 2022-23 than originally projected. Each of these funds also plans to fully expend their operating budgets and have some savings in capital, leading to an increase in their cash balances and the availability of one-time funds for future projects.

Gas Tax and SB1 are revenues driven more by the number of miles driven than by the cost of gasoline. They are not projected to have major fluctuations in their revenue projections though likely will have savings from capital projects that will not be completed this year. They will likely roll those projects forward and complete them in future years.

In Information and Technology internal service fund accumulated a balance of approximately $1.9 MM in the prior year. The current year budget anticipated spending much of that down on citywide infrastructure projects such as upgrading the council chamber and replacing servers, switches, and other major hardware. The department is going through some growth and transition in order to provide the needed level of service to other departments. The department is currently working on modernizing City IT by rolling out Office 365 and replacing a failing 18- year-old phone system throughout all departments. IT is also working to continually increase cybersecurity awareness and enhancements through all upgrades and new systems purchased.

IT will introduce a new, updated service desk software that follows current Information Technology Service Management (ITSM) and will incorporate a service desk for Facilities.

Lastly, the Municipal Service Center Vehicle Shop, a new internal service fund in its second year, manages the maintenance of all city vehicles. The fleet manager is making changes to the operation to yield a more efficient and data-driven fleet management. This division is facing increased costs for fuel and vehicle parts but was able to build these into their budget and is expected to absorb the increases.

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For a summary of all non-General fund appropriation requests and major other funds, see tables 4 and 5.

Table 4: Summary of Non-General Fund Appropriation Requests Next Steps
The mid-year report officially marks the beginning of the budget season for Fiscal Year 2023-

24. Based on the report's findings and projections, an updated five-year projection and budget outlook will be developed. In February, budget instructions will be provided to departments to use in preparing their budget proposals to the City Manager by March 31st. Throughout the rest of the fiscal year, both revenues and expenditures will be closely monitored and any necessary updates to the projections will be made at the end of the third quarter in April or May. On June 13th, a proposed FY 2023-24 budget will be submitted to the Council for review and approval.

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Table 5: Summary of Other Funds for FY 2022-23

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STRATEGIC PLAN:
02-Fiscal Health: the report above meets strategic plan goal number 2 by keep the Council and the public informed as to the status of the City’s finances.

FINANCIAL IMPACT:

The proposed appropriations listed in Exhibit A amount to $1,789,759 and are funded by $225,000 in revenue, with the remainder of the requests being covered by the use of fund balance from Measure Y and other funds that have the capacity to absorb these additional expenditures within their operating budgets.

ALTERNATIVE ACTION:

The Council has the discretion to accept some, all, or none of the recommendations presented to them.

ATTACHMENTS AND/OR REFERENCES (If any):
1) Annual Comprehensive Financial Report for FY 2021-22 2) Annual Measure Y Audit Report for FY 2021-22

ANNUAL COMPREHENSIVE

FINANCIAL REPORT
FISCAL YEAR END JUNE 30, 2022
cityofwatsonville.org Attachment 1

Attachment 1

City of Watsonville, California
ANNUAL

COMPREHENSIVE

FINANCIAL
REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Prepared by the Finance Department
Marissa Duran, Administrative Services Director
Attachment 1

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Attachment 1

CITY OF WATSONVILLE, CALIFORNIA
Annual Comprehensive Financial Report
Fiscal Year Ending June 30, 2022

TABLE OF CONTENTS
I. INTRODUCTORY SECTION:

Schedule of Other Matters ....................................................................................................... 3 Transmittal Letter .................................................................................................................... 3 GFOA Certificate of Achievement ......................................................................................... 9 Officers and Officials ............................................................................................................ 10 Organizational Structure ........................................................................................................ 11 II. FINANCIAL SECTION:

Independent Auditors’ Report ............................................................................................... 13 Management’s Discussion and Analysis ............................................................................... 17 Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position. ........................................................................................ 30 Statement of Activities .............................................................................................. 32 Fund Financial Statements:

Balance Sheet – Governmental Funds ...................................................................... 33 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ............................................................................ 34 Statement of Revenues, Expenditures, and Changes in
Fund Balances – Governmental Funds. ................................................................. 35 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ............ 36 Statement of Revenues, Expenditures, and Changes in
Fund Balance – Budget and Actual – General Fund ............................................. 37 Statement of Revenues, Expenditures, and Changes in
Fund Balance – Budget and Actual – Impact Fees Fund ...................................... 38 Statement of Revenues, Expenditures, and Changes in
Fund Balance – Budget and Actual – Housing Fund ............................................ 39 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Redevelopment and Housing Grants Fund .......................... 40 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – American Rescue Plan Act Fund ......................................... 41 Statement of Net Position – Proprietary Funds ........................................................ 42 Statement of Revenues, Expenses, and Changes in
Net Position – Proprietary Funds ........................................................................... 43 Statement of Cash Flows – Proprietary Funds ......................................................... 44 Statement of Fiduciary Net Position – Successor Agency
Private Purpose Trust Fund .................................................................................... 45 Statement of Changes in Fiduciary Net Position – Successor Agency Private Purpose Trust Fund .................................................................................... 46 Notes to Financial Statements ............................................................................................... 47

Attachment 1

CITY OF WATSONVILLE, CALIFORNIA
Annual Comprehensive Financial Report
Fiscal Year Ending June 30, 2022
TABLE OF CONTENTS (Continued)
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net Pension Liability and Related Ratios – Miscellaneous Pension Plan ................................................................................... 95 Schedule of Contributions – Miscellaneous Pension Plan ....................................... 96 Schedule of Proportionate Share of Net Pension Liability – Safety Pension Plan ................................................................................................ 97 Schedule of Contributions – Safety Pension Plan .................................................... 98 Supplementary Information:

Combining and Individual Fund Statements and Schedules:

Combining Balance Sheet – Nonmajor Governmental Funds ..................................... 102 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds .................................................. 104 Schedule of Revenues, Expenditures, and Changes
in Fund Balances – Budget to Actual:

Gas Tax and Narcotics Assets Seizure Funds ..................................................... 106 Business Development and Economic Development Funds ............................... 107 Library and Parks Development Funds ............................................................... 108 Retirement Tax and Parking Garage Funds. ........................................................ 109 Measure G/Y and Abandoned Vehicle Funds. .................................................... 110 Inclusionary Housing and SB 1 – Gas Tax Fund ................................................ 111 Measure D Fund ................................................................................................... 112 Schedule of Revenues, Expenditures, and Changes
in Fund Balances – Budget and Actual:

Debt Service Fund ................................................................................................ 113 III STATISTICAL SECTION (Unaudited):

Net Position By Component – Last Ten Fiscal Years ............................................ 117 Changes In Net Position – Last Ten Fiscal Years .................................................. 118 Fund Balances of Governmental Funds – Last Ten Fiscal Years .......................... 120 Net Change In Fund Balances of Governmental Funds – Last Ten Fiscal Years ............................................................................................... 121 General Governmental Tax Revenues By Source – Last Ten Fiscal Years ........... 122 Assessed Value and Estimated Actual Value of Taxable Property. ....................... 123 Property Tax Rates – Direct and Overlapping – Last Ten Years ........................... 124 Principal Property Taxpayers – Current Year and Nine Years Ago ..................... 125 Property Tax Collection – Last Ten Fiscal Years ................................................... 126 Ratio of Outstanding Debt By Type – Last Ten Fiscal Years ................................ 127 Ratio of Net General Obligation Debt Outstanding – Last Ten Fiscal Years ........ 128 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA
Annual Comprehensive Financial Report
Fiscal Year Ending June 30, 2022
TABLE OF CONTENTS (Continued)
III STATISTICAL SECTION (Unaudited) (Continued):

Legal Debt Margin Information – Last Ten Fiscal Years ...................................... 129 Computation of Direct and Overlapping Bonded Debt .......................................... 130 Demographic and Economic Statistics – Last Ten Fiscal Years ............................ 131 Principal Employers – Current Fiscal Year and Ten Years Ago ........................... 132 Full-time Equivalent City Government Employees by Function – Last Ten Fiscal Years ....................................................................................... 133 Operating Indicators by Function – Last Ten Fiscal Years .................................... 134 Capital Assets Statistics by Function – Last Ten Fiscal Years .............................. 135

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INTRODUCTORY

SECTION
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December 21, 2022
Honorable Mayor, City Council and Citizens of the City of Watsonville:

REPORT PURPOSE AND ORGANIZATION
We are pleased to present the City of Watsonville’s Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2022. The ACFR is intended to present information above, what is required by generally accepted accounting principles and State law.

The Charter of the City of Watsonville and the State of California law require that all general-purpose local governments publish within six months of the close of the fiscal year a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (U.S.GAAP). The report should also be audited by an independent firm of certified public accountants (CPA) in accordance with generally accepted government auditing standards (GAGAS).

Pursuant to the requirements, we hereby issue the comprehensive annual financial report of the City of Watsonville for the fiscal year ended June 30, 2022.

The ACFR consists of management’s representation concerning the finances of the City of Watsonville (City). Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Watsonville’s financial statements in conformity to U.S.GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Watsonville’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

Audited Financial Statements
Certified Public Accountants, have issued an unmodified (“clean”) opinion on the City of Watsonville’s financial statements for the fiscal year ending June 30, 2022. A copy of this report is included in page 13 in the Financial Section of this report.

City of Watsonville
“A Community of Opportunities”
3 Attachment 1

The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City’s financial statements for the fiscal year ended June 30, 2022, are fairly presented in conformity with U.S. GAAP. The independent auditors report is presented as the first component of the financial section of this report.

The independent audit of the financial statements of the City of Watsonville also incorporates a broader, federally mandated Single Audit Uniform Guidance designed to meet the special needs of federal grantor agencies. The standards governing the Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City of Watsonville’s separately issued Single Audit Report.

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

CITY OF WATSONVILLE PROFILE
The City of Watsonville was incorporated in 1868 and is located six miles inland from the Monterey Bay in the State of California. The government has a land area of 6.19 square miles and a population of 52,590 people based on US Census 2020 Census.

Watsonville became a charter City government in 1908. Policymaking and legislative authority are vested in the governing City Council, which consists of seven Council Members, one of whom serves as mayor. The mayor is appointed on sequential basis from each of the numbered City Council districts and serves for a term of one year.

The council is elected on a non-partisan basis from seven electoral districts. Council members are elected to four-year terms. Elections are staggered with four Council Members elected during one election and three Council Members elected in the following election two years later. The governing City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring the government's City Manager, City Clerk, and Attorney. The City Manager is responsible for carrying out the policies and ordinances of the governing council, for overseeing the day-to-day operations of the government, and for appointing the department heads.
4 Attachment 1

City Services
The City of Watsonville provides a full range of services including police and fire protection; water treatment and distribution; solid waste collection and disposal; sanitary sewer collection and treatment; airport facilities; building inspection, planning, economic development, housing rehabilitation, and general government services; library; recreation; parks; street construction and maintenance; and general administration.

The financial reporting entity of the City includes all the funds of the City of Watsonville, as well as all of its component units. Component units are legally separate entities for which the primary government is financially accountable. The Successor Agency of the City of Watsonville Redevelopment Agency’s information in this year’s financial report is presented separately as part of the fiduciary statements.

Additional information can be found on this entity starting on page 93 within the notes to the financial statements.

Budgetary Process and Controls
The annual budget serves as the foundation for the City of Watsonville’s financial planning and control. All departments of the City of Watsonville are required to submit requests for appropriations to the government’s management on or before March 31 of each fiscal year. The Finance Department uses these requests as a starting point for developing a proposed budget. The Finance Department then presents this proposed budget to the Council for review prior to May 31. The Council is required to hold public hearings on the proposed budget and to adopt a final budget by no later than June 30, the close of the City of Watsonville’s fiscal year. The appropriated budget is prepared by fund (i.e. General Fund, Water), department (i.e., police), and division (i.e., investigation).

Department directors may make transfers of appropriations within a department.

Transfers of appropriations between departments, however, require the special approval of the City Manager. Budget to actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. The general fund, impact fee fund, housing fund, and redevelopment and housing grants fund comparisons are presented on pages 37 to 41 as part of the basic financial statements for the governmental funds. For governmental funds, other than major funds, with appropriated annual budgets, these comparisons can be found in the governmental fund subsection of this report, which starts on page 106.

FACTORS AFFECTING FINANCIAL CONDITON
The budget for Fiscal Year 2021-22 assumed a return to normalcy with a normal level of revenue growth after the unpredictability of the pandemic. The budget was adopted after almost two years into the pandemic. The General Fund budget assumed a normal level of growth. We did propose to spend down some of our fund balance to fund Ramsay Park. We ended the year essentially flat on our General Fund reserves and we received the second payment of $9.1 million payments from the American Rescue Plan Act.
5 Attachment 1

The CPI (Consumer Price Index), is used by the U.S. Bureau of Labor Statistics to measure inflation. The September 2022 CPI-U (Consumer Price index for all Urban Consumers) increased 8.2 percent over the last 12 months. Core CPI (CPI less food and energy) is 6.6 percent compared to 4.0 percent in September 2021. Core CPI represents a more accurate picture of underlying inflation trends since volatile food and energy products are excluded. While the global economic activity remains uncertain, the U.S. Bureau of Labor Statistics’ Employment Projections for 2021-2022 shows a projected growth from 158.1 million to 166.5 million over the 2021-31 decade.

Local Economy
After more than two years of alternative methods during the pandemic, we are returning to our new normal. The Watsonville economy faired fairly well despite the pandemic. Watsonville’s fiscal year 2021-22 budget assumed a return to normalcy with normal level of revenue growth. Despite the confusion brought by the pandemic, Watsonville was able to end the fiscal year on a positive note, driven by year over year tax increases and responsible spending and savings on the part of our departments.

Property taxes saw an increase of $810k from FY 2020-2021. Property tax collections in FY 2020-22 were driven by assessments that were set the prior year. We received slightly higher supplemental and transfer taxes than in the prior year to reflect the upturn on turnover of property which is an improvement from what we saw during the height of the pandemic. Lower interest rates in this year also helped with the turnover in properties. The doubling of the 30-year mortgage interest rates to over 6.5% during the latter of calendar year 2022 appears to be reducing the demand to purchase homes. FY 2020-22 saw the opening of a new hotel and several residential and commercial projects in various phases of planning or construction are underway. We expect to see that growth reflected in our property tax base in future years.

Biggest increase continues to be Sales tax revenues. We have recovered very well and are seeing the impacts on inflation on our increased revenue. Auto sales saw some slow down due to low inventory and parts not available to car manufacturers.

Another category that saw declines is the building and construction category.

Consumers are still spending but they are spending a little less due to the price shock that inflation has caused. Below is a graph that shows the percentage or receipts by category for the Sales tax receipts in FY 2022 (provided by HDL):
6 Attachment 1

Watsonville is a strong and resilient community with a history of doing more with less.

We are on a good path and with slow and steady steps we will stay there.

Independent Audit
Each year the City requires an independent annual audit of the City's financial records, the results of its operations, and cash flows. This report includes the opinion of the City's independent auditors, Maze & Associates, for the basic financial statements of the City. In addition, the document also contains the auditors' report on Internal Control over Financial Reporting and on compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.

Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Watsonville, California for its annual comprehensive financial report (ACFR) for the fiscal year ending June 30, 2021. This was the twentieth consecutive year that the government has received this prestigious award. In order to be awarded a Certificate of Achievement, the government must publish an easy, readable, and efficiently organized ACFR. The report satisfies both U.S. GAAP and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current ACFR meets the Certificate of Achievement Program’s requirements and we are submitting it to GFOA to determine its eligibility for another certificate. In addition, the City has received the GFOA’s Award for Distinguished Budget Presentation for its biennial budget dated June 30, 2021. In order to qualify for the Distinguished Budget Presentation Award, the government’s budget document was judged to be proficient in several categories, including policy documentation, a financial plan and a communication device.
7 Attachment 1

The preparation of this report could not have been accomplished without the efficient and dedicated service of the Finance Department staff. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Ilda Estrada, Accountant II and Patricia Rodriguez, Assistant Finance Manager deserve special recognition for her contribution to the report. The following remaining Finance Staff made this report possible through their dedicated service throughout the fiscal year: Marisa Bermudez, Christine McGrath, Jorge Ortiz, Diana Rivas, and Mary Stepovich. The Mayor and the governing council should also be given due credit for their interest and support in managing the City of Watsonville in a responsible and progressive manner.

Respectfully submitted,
Interim Administrative Services Director
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Watsonville
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
9 Attachment 1

City of Watsonville, California
Officers and Officials
For the Fiscal Year End June 30, 2022
City Council:

Mayor – Eduardo Montesino
Mayor Pro Tempore –Vanessa Quiroz-Carter
Council Member – Maria Orosco
Council Member – Aurelio Gonzalez
Council Member – Krystal Salcido
Council Member – Jimmy Dutra
Council Member – Ari Parker
City Officials:

City Manager – Rene Mendez
City Clerk – Irwin Ortiz
Fire Chief – Rudy Lopez
Interim Administrative Services Director – Marissa Duran Police Chief – Jorge Zamora
Interim Public Works Director – Tamara Vides
Library Director – Alicia Martinez
Community Development Director – Suzi Merriam
Parks and Community Services Director – Nick Calubaquib Airport Director – Rayvon Williams
10 Attachment 1

INFORMATION SERVICES

BRANDON GIL

SAMANTHA ZUTLER

WATSONVILLE

GOVERNING BODY

ORGANIZATIONAL STRUCTURE
FISCAL YEAR 2021 - 2022

CITIZENS

CITY COUNCIL

MAYOR -EDUARDO MONTESINO

MAYOR PRO TEMPORE - VANESSA QUIROZ-CARTER

COUNCIL MEMBER - JIMMY DUTRA

COUNCIL MEMBER - MARIA OROSCO
COUNCIL MEMBER - CASEY K. CLARK

FINANCE

MARISSA DURAN

COUNCIL MEMBER - KRYSTAL SALCIDO

COUNCIL MEMBER - ARI PARKER

CITY ATTORNEY CITY MANAGER CITY CLERK
RENE MENDEZ IRWIN I. ORTIZ
POLICE

JORGE ZAMORA

LIBRARY

ALICIA MARTINEZ

PUBLIC WORKS/UTILITIES

TAMARA VIDES

PARKS & COMMUNITY

NICK CALUBAQUIB

SERVICES
FIRE
RUDY LOPEZ SR.

COMMUNITY DEVELOPMENT

SUZI MERRIAM

REDEVELOPMENT & HOUSING

SUZI MERRIAM

AIRPORT

RAYVON WILLIAMS
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This Page Left Intentionally Blank
Attachment 1

INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
City of Watsonville, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Watsonville, California (City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, , each major fund, and the aggregate remaining fund information of the City as of June 30, 2022, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparisons listed in the Table of Contents as part of the basic financial statements for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 13 Attachment 1

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the judgment made by a reasonable user based on the financial statements.

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

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

Change in Accounting Principles
Management adopted the provisions of the Governmental Accounting Standards Board Statement No. 87 – Leases, which became effective during the year ended June 30, 2022.

As discussed in Note III-D to the financial statements, the beginning balances of leases receivable and deferred inflows of resources related to leases were restated and increased by $3,915,100 as of July 1, 2021, as a result, and the net effect on beginning fund balance was zero.

The emphasis of this matter does not constitute a modification to our opinions. 14 Attachment 1

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

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying Supplementary Information, as listed in the Table of Contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.

The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplementary Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the Introductory Section and Statistical Section listed in the Table of Contents, but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
15 Attachment 1

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2022, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Pleasant Hill, California
December 21, 2022
16 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Watsonville, we offer readers of the City of Watsonville’s financial statements this narrative overview and analysis of the financial activities of the City of Watsonville for the fiscal year ended June 30, 2022. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 3 - 8 of this report. All amounts, unless otherwise indicated, are expressed in thousands of dollars.

Financial Highlights
• The assets of the City of Watsonville exceeded its liabilities at the close of the most recent fiscal year by $265,027.
• The City’s deferred outflow of resources-Pension totaled $19,211 and its deferred inflow of resources-Pensions totaled $36,846.
• The City’s liabilities totaled $112,232.
• The City’s total net position increased by $14,624. Governmental activities net position increased by $5,258 this increase was due to an increase in cash mostly due to Impact Fees and the Library Fund. Business type activities net position increased by $9,365. Most of this increase was from Water, Sewer and Solid Waste funds ending with positive operating income. • As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $45,347 an increase of $2,455 in comparison with the prior fiscal year’s balances. The non-spendable portion of the fund balance was $147, the restricted portion was $27,354 and the unassigned amount was $17,846 which is essentially flat from prior fiscal year.

Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Watsonville’s basic financial statements. The City of Watsonville’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Watsonville’s finances, in a manner similar to a private-sector business.

The Statement of Net Position presents information on all of the City of Watsonville’s assets and liabilities, with the difference between the two reported as net position. Increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Watsonville is improving or deteriorating overtime.
17 Attachment 1

The Statement of Activities presents information showing how the City of Watsonville’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing or related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future periods (e.g. uncollected taxes).

Both of the government-wide financial statements distinguish functions of the City of Watsonville that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Watsonville include general government, public safety, housing, streets, and culture and recreation. The business-type activities of the City of Watsonville include water, sewer, solid waste, airport, and fiber optic activities.

The government-wide financial statements can be found on pages 30 to 32 of this report.

Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Watsonville, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Watsonville can be divided into three categories: governmental funds, proprietary funds and fiduciary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on nearterm inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluation of a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements.

By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental funds balance sheet and the governmental fund statements of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City of Watsonville maintains eighteen individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the general fund, impact fees fund, housing fund, redevelopment and housing grants fund, American rescue plan act fund and general debt service fund which are all major funds. Data for the other thirteen governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report.

The City of Watsonville adopts a biennial budget (one year adopted and one year proposed) for all its governmental funds.
18 Attachment 1

The basic governmental fund financial statements can be found on pages 33 to 37 of this report.

Proprietary funds. The City of Watsonville maintains two types of proprietary funds; Enterprise and Internal Service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Watsonville uses enterprise funds to account for Water, Sewer, Solid Waste, Airport and Fiber Optic operations.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary funds financial statements provide separate information for the water, sewer, solid waste, airport and fiber optic operations, all of which are considered to be major funds of the City of Watsonville.

Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of Watsonville’s various functions. The City of Watsonville uses an internal service fund to account for insurance activities of the City. The fund predominantly benefits governmental funds rather than business-type functions, and it has been included within governmental activities in the government-wide financial statements. Conversely, the internal service fund is presented in the proprietary funds’ financial statements.

The basic proprietary funds financial statements can be found on pages 42 to 44 of this report.

Fiduciary fund. Fiduciary funds are used to account for resources held for the benefit of parties’ outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City of Watsonville’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.

The basic fiduciary fund financial statements can be found on pages 45 to 46.

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 47 to 92 of this report.

Other information. In addition to the basic financial statements and accompanying notes, required supplementary information, combining statements and schedules referred to earlier in connection with non-major governmental funds are presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules can be found on pages 102 to 112 of this report.

Government-wide Financial Analysis
Statement of Net Position. As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City of Watsonville, assets exceeded liabilities by $265,027 at the close of the most recent fiscal year.

By far the largest portion of the City of Watsonville’s net position $207,222 reflects its investment in capital assets (e.g., land, buildings and improvements, machinery, work in progress, and infrastructure) less any related outstanding debt used to acquire those assets. The City of 19 Attachment 1

Watsonville uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Watsonville’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the City of Watsonville’s net position $27,012 represent resources that are subject to external restrictions on how they may be used by creditors (such as through debt covenants), grantors, contributions or laws or regulations of other governments. The remaining balance of unrestricted net position $30,793 is unrestricted and available for next year’s operations at the direction of the City Council.

City of Watsonville’s Net Position
June 30, 2022
(in thousands)
At the end of the current fiscal year, the City of Watsonville is able to report positive balances in net investment in capital assets and restricted net position for the government as a whole. 2022 2021 2022 2021 2022 2021
$ $$$$$
Current and other assets 113,479 98,218 66,399 57,509 179,878 155,727 Capital assets 111,545 113,358 101,659 102,055 215,017 213,600 Total Assets 209,763 226,837 168,058 159,564 394,895 369,327 Deferred outflows of resources 14,164 15,666 3,625 3,546 19,212 17,789 Total Defered Outlfows of Resources 15,666 14,164 3,625 3,546 19,212 17,789 Long-term liabilities outstanding 72,530 49,209 26,228 37,103 75,437 109,633 Other Liabilities 20,630 32,620 4,412 4,175 36,795 25,042 Total Liabilities 93,160 81,829 30,403 41,515 112,232 134,675 Deferred inflows of resources 26,558 10,288 1,910 36,846 128 2,038 Total Defered Outlfows of Resources 26,558 10,288 1,910 36,846 128 2,038 Net Position:

Net Investment in capital assets 108,607 111,205 93,904 96,016 207,221 202,511 Restricted 24,412 27,012 27,012 - 24,412
Unrestricted (4,162) (4,102) 34,895 27,642 30,793 23,480 Total Net Position 128,857 134,115 130,911 121,546 265,026 250,403 Business-type
Activities
Governmental
Activities Total
20 Attachment 1

City of Watsonville
Summary of Changes in Net Position
For the Fiscal Year Ending June 30, 2022
(in thousands)
Governmental Activities. Governmental activities increased the City of Watsonville’s Net Position by a $5,258. Key elements of this increase are as follows:
• Governmental revenues saw increases in Sales Tax at about $2,000. There were very minimal increases in other tax categories and charges for services were relatively flat offset by increases in grants and contributions.
• Governmental spending decreased by $5,929 primarily in the area of general government and streets. The decrease in spending is primarily due to less grant revenues to complete street projects and the moving of the Municipal Service Center services to the Solid Waste Fund as they mostly serve that division.

21 Attachment 1

For the fiscal year ending June 30, 2022
Expenses and Program Revenues
Governmental Activities
Revenues by Source
Governmental Activities

22 Attachment 1

Business-type activities. Business-type activities increased the City of Watsonville’s net position by $9,365. Key elements of this increase are as follows:

For the fiscal year ending June 30, 2022
Expenses and Program Revenues
Business-type Activities
• Charges for services were essentially flat in comparison to last fiscal year, other revenues decreased by $4628.
• Water had an increase in revenues mostly due to two large construction projects paying their water permit fees and the decrease in spending mostly due less capital spending a decrease in pension obligation. The Solid Waste had decrease in operating costs as of the fiscal year end mostly due to the division of Municipal Services moving to their own Internal Service Fund and an increase in their pension obligation.
23 Attachment 1

For the fiscal year ending June 30, 2022
Revenues by Source
Business-type Activities
Financial Analysis of the City of Watsonville’s Funds
As noted earlier, the City of Watsonville uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds. The focus of the City of Watsonville’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Watsonville’s financing requirements. In particular, restricted fund balances for specific proposes may serve as a useful measure of a government’s net resources available for spending on various activities at the end of the fiscal year.

As of the end of the current fiscal year, the City of Watsonville’s governmental funds reported combined ending fund balances of $45,347, an increase of $2,455 in comparison with the prior year. The largest portion of fund balances is restricted for specific purposes and the largest restricted portion is for impact fees in the amount of $8,149. This balance is for projects that have been budgeted, planned or will be completed within the next five years. The remainders of fund balances are either non-spendable or unassigned at year end. The non-spendable portion of fund balances represents the amounts of funds that cannot be spent because they are either not in spendable form or legally required to remain intact. Unassigned fund balances represent amounts which are unconstrained in that they may be spent for any purpose. 24 Attachment 1

The General Fund is the chief operating fund of the City of Watsonville. At the end of the current fiscal year, the charter reserve of the General Fund was $2,450. As a measure of the General Fund’s liquidity, it may be useful to compare both the charter reserve and total fund balance to total fund expenditures. The City’s General Fund Reserve met the Charter Reserve this fiscal year end. The required Charter Reserve fund balance would be 5.1 percent of total general fund expenditures; the total fund balance represented 34 percent of the same amount.

The fund balance of the City of Watsonville’s General Fund decreased by $42 during the current year largely due to the City having to write down the LAIF Investment fund to market, which was about $1 M write down.

The changes in Governmental Fund balance can be attributed to:

The General Fund increase in fund balance was from increases in various revenue types, such as, sales tax and property tax in lieu of vehicle license fees, decrease in operating costs from a controlled spending initiative.

The Impact Fees Fund had a fund balance of $8,256 an increase of $744 over the prior year’s fund balance. This increase was due to new revenues and saving for future projects in fund balance.

The Housing Fund had a fund balance of $3,475, an increase of $84 over the prior year’s fund balance. This increase is due to a new loan issued during the fiscal year.

The Redevelopment and Housing Grants Fund has a fund balance of $354, a decrease of $6 from the negative beginning fund balance. This decrease is the result of loans processed.

The government’s Debt Service Fund had a fund balance of $246, a decrease of $1 during the fiscal year.

Proprietary funds. The City of Watsonville’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

Net position and changes of net position for the five major enterprise funds are as follows:

Other factors concerning the finances of these funds have already been addressed in the discussion of the City of Watsonville’s business-type activities.
25 Attachment 1

General Fund Budgetary Highlights
There were several budget amendments this fiscal year. The fiscal year 21-22 was developed when the City was seeing return to normalcy from the COVID pandemic. Budget assumptions and predictions were the new normal. During the February 2022 mid-year Council meeting $705,000 budget amendments were approved. Most of the increases were for increase in costs due to inflationary pressures, such as fuel and electricity costs. Also, additional $580,000 was approved for Fire Department who was responding to mutual aid.

Tax revenues were $2,048 over budget. The majority was due to Sales Tax revenues coming in $1,328 over budget. This increase was mainly due to impacts on inflation. Miscellaneous revenues were over budget by $533. Most of this increase was due to reimbursements from the County for Watsonville locations provided for vaccinations sites.

Capital Asset and Debt Administration
Capital assets. The City of Watsonville’s capital assets, for its governmental and business type activities as of June 30, 2022 was $215,017 (net of depreciation). This represents a $1,418 increase from the prior year or 0.66%.

Governmental Type Activities increase by 1.63% due to the additional projects in progress. 26 Attachment 1

While Business Type Activities decreased by 0.39% due to depreciation outpacing additions.

Additional information on the City of Watsonville’s capital assets can be found in Note 4 on pages 60 to 61 of this report.

Long-Term Debt. At the end of the current fiscal year, the City of Watsonville had total net debt outstanding of $77,188. The debt for governmental activities is made up of notes payable of $2,153, net OPEB liability of $3,631, compensated absences of $2,192, and net pension liability of $42,145. Business type activities have $1,877 in notes payable, $5,494 in a loan, net OPEB liability of $1,405, compensated absences of $1,031, net pension liability of $13,580 and landfill closure/post closure liability of $3,680.

State statutes limit the amount of general obligation debt a governmental entity may issue to 10 percent of its total assessed valuation. The current debt limit for the City of Watsonville is $184,141 which is significantly in excess of the City of Watsonville’s outstanding debt subject to this limit.

Additional information on the City of Watsonville’s long-term debt can be found on page 5 of this report.

Economic Factors and Next Year’s Budget
• Budget will include using of the American Rescue Plan Act allocation. • Less growth in charges for services than prior years in the proprietary funds due to the delay of an anticipated rate increase.
• In non-General Fund departments, you will see the same cautious growth assumptions, consistent with the revenue activity we have experienced and assumed for the General Fund. • Taking advantage of healthy fund balances to move much needed capital and infrastructure projects.
• Continued and accelerated increases in PERS contributions. 27 Attachment 1

After several years of improving position Watsonville appears poised to weather the immediate impacts. As we emerge from the pandemic and turn our attention to helping the community recover. Watsonville was fortunate to receive $18.2 million in direct funding as part of the American Rescue Plan Act (ARPA). The 2021-23 Biennial Budget utilized limited amount of ARPA funding for restoring those departments hardest hit by the pandemic. The ARPA funding plan will include opportunities for community input and will prioritize areas of greatest community need. We still face ever increasing PERS contributions and have a large pent up demand for capital investments. Watsonville will have to act cautiously to balance increasing expenditure pressure with what is likely to be several years of flatter revenue growth than we have recently experienced.

The City was successful in passing a new transaction and use tax. This new tax measure will be used to meet community goals. The tax enables the City to invest in repair and expansion of aging parks, playgrounds and trails; creating safe place for kids, maintaining after-school and gang prevention programs, fixing potholes and maintaining streets; expanding library access and services or seniors; and creating employment opportunities. Watsonville has an opportunity to reset, restructure, and rebuild the budget in ways that we meet community goals, without recreating structural deficits.

All of these factors will be taken into consideration during the preparation of the City of Watsonville’s annual budget for the fiscal year 2022-23.

Request for Information
This financial report is designed to provide a general overview of the City of Watsonville’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Administrative Services Director, City of Watsonville, and 250 Main Street, Watsonville, CA 95076.
28 Attachment 1

BASIC FINANCIAL STATEMENTS
Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

STATEMENT OF NET POSITION
JUNE 30, 2022
Governmental Business-type
Activities Activities Total
$$$
ASSETS
Cash and investments 74,836,089 52,184,987 127,021,076
Restricted cash - 1,728,614 1,728,614
Receivables:

Interest 2,354,090 - 2,354,090
Taxes 5,490,562 - 5,490,562
Accounts 2,873,083 5,836,317 8,709,400
Intergovernmental 3,620,569 112,702 3,733,271
Internal balances (2,221,401) 2,221,401 -
Loans receivable 26,048,985 393,319 26,442,304
Inventories 266,850 342,505 609,355
Deposits 60,000 - 60,000
Land held for resale 150,000 - 150,000
Leases receivable - 3,578,927 3,578,927
Capital assets (net of depreciation,
where applicable):

Land 16,467,923 14,771,215 31,239,138
Construction in progress 8,635,424 5,685,774 14,321,198 Buildings and Improvements 69,678,325 51,271,116 120,949,441 Machinery and equipment 4,862,368 8,663,255 13,525,623
Infrastructure 13,714,557 21,267,584 34,982,141
Total Assets 226,837,424 168,057,716 394,895,140

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflow of resources - Pensions 15,665,594 3,545,714 19,211,308 Total Deferred Outflow of Resources 15,665,594 3,545,714 19,211,308 Continued
Primary Government
See accompanying notes to financial statements
30 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

STATEMENT OF NET POSITION
JUNE 30, 2022
Governmental Business-type
Activities Activities Total
$$$

LIABILITIES
Accounts payable 3,299,491 2,122,910 5,422,401
Accrued personnel costs 2,449,993 1,043,737 3,493,730
Insurance claims payable 3,792,529 - 3,792,529
Interest payable 12,273 - 12,273
Retentions payable 122,672 18,929 141,601
Unearned revenue 20,145,870 85,322 20,231,192
Deposits payable 1,884,931 65,076 1,950,007
Noncurrent liabilities
Due within one year 912,633 839,745 1,752,378
Due in more than one year 49,208,853 26,227,716 75,436,569 Total Liabilities 81,829,245 30,403,435 112,232,680

DEFERRED INFLOWS OF RESOURCES
Leases related - 3,541,687 3,541,687
Deferred inflows of resources - pensions 26,558,145 6,746,656 33,304,801 Total Deferred Inflows of Resources 26,558,145 10,288,343 36,846,488

NET POSITION
Net investment in capital assets 111,205,375 96,016,459 207,221,834 Restricted for:

Debt service 245,989 - 245,989
Impact fee 8,149,285 - 8,149,285
Housing 3,475,432 - 3,475,432
Grants, contributions & fees for
specific purpose 15,141,602 - 15,141,602
Unrestricted (4,102,055) 34,895,193 30,793,138
Total Net Position 134,115,628 130,911,652 265,027,280
Concluded
Primary Government
See accompanying notes to financial statements
31 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Operating Capital
Charges for Grants and Grants and Governmental Business-type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Primary Government: $ $ $$ $ $ $
Governmental activities:

General government 12,246,164 9,420,347 827,562 - (1,998,255) - (1,998,255) Public safety 33,148,975 777,087 253,587 - (32,118,301) - (32,118,301) Housing 3,255,731 1,269,226 1,696,301 - (290,204) - (290,204) Streets 6,050,361 34,633 103,027 - (5,912,701) - (5,912,701) Culture and recreation 10,263,815 668,625 660,908 - (8,934,282) - (8,934,282) Interest on long term debt 41,701 - - - (41,701) 63,625 (105,326) Total governmental activities 65,006,747 12,169,918 3,541,385 - (49,295,444) 63,625 (49,359,069) Business-type activities:

Water 16,094,802 21,044,726 - 88,922 - 5,038,846 5,038,846 Sewer 13,633,454 16,365,977 5,052 399,911 - 3,137,486 3,137,486 Solid Waste 14,354,900 16,115,767 21,249 - - 1,782,116 1,782,116 Airport 4,469,655 2,659,206 - - - (1,810,449) (1,810,449) Fiber Optic 64,239 94,808 - - - 30,569 30,569
Total business-type activities 48,617,050 56,280,484 26,301 488,833 - 8,178,568 8,178,568 Total primary government 113,623,797 68,450,402 3,567,686 488,833 (49,295,444) 8,114,943 (41,180,501) General revenues:

Property taxes 16,977,124 - 16,977,124
Sales taxes 24,407,959 - 24,407,959
Utility users taxes 4,144,043 - 4,144,043
Franchise taxes 538,424 - 538,424
Other taxes 3,617,684 - 3,617,684
Intergovernmental revenues not restricted to specific program 1,726,996 - 1,726,996 Unrestricted investment earnings 2,857,336 239,149 3,096,485 Other revenue - 1,295,988 1,295,988
Transfers 284,292 (284,292) -
Total general revenues and transfers 54,553,858 1,250,845 55,804,703 Change in net position 5,258,414 9,365,788 14,624,202
Net position - beginning 128,857,214 121,545,864 250,403,078 Net position - ending 134,115,628 130,911,652 265,027,280 Program Revenues Primary Government
See accompanying notes to financial statements
32 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

GOVERNMENTAL FUNDS

BALANCE SHEET
JUNE 30, 2022

REDEVELOPMENT AMERICAN OTHER TOTAL

AND HOUSING RESCUE DEBT GOVERNMENTAL GOVERNMENTAL

GENERAL IMPACT FEES HOUSING GRANTS PLAN ACT SERVICE FUNDS FUNDS $ $ $ $ $$ $ $
ASSETS:

Cash and investments 21,927,988 8,371,662 3,343,360 2,836,458 17,863,042 245,989 14,151,421 68,739,920 Receivables:

Interest 138,619 - 801,298 1,223,800 - - 190,373 2,354,090 Taxes 3,914,301 - - - - - 1,576,261 5,490,562
Accounts 2,024,890 9,150 2,000 - - - 363,376 2,399,416
Intergovernmental 2,854,378 - - 462,960 - - 303,231 3,620,569 Due from other funds 843,485 - - - - - - 843,485
Advances receivable - 106,344 - - - - 40,674 147,018
Loans receivable 1,423,779 - 10,782,657 12,183,943 - - 1,658,606 26,048,985 Land held for resale - - 150,000 - - - - 150,000
Total Assets 33,127,440 8,487,156 15,079,315 16,707,161 17,863,042 245,989 18,283,942 109,794,045 LIABILITIES:

Accounts payable 1,686,110 231,527 81 900 164,152 - 759,353 2,842,123 Accrued personnel costs 2,008,985 - 19,682 18,661 7,670 - 185,985 2,240,983 Retentions payable 105,311 - - 10,526 - - - 115,837
Due to other funds - - - 462,295 - - 381,190 843,485
Advances payable 2,368,419 - - - - - - 2,368,419
Unearned revenue - - - 2,453,420 17,691,220 - 1,230 20,145,870 Deposits payable 1,884,460 - 471 - - - - 1,884,931
Total Liabilities 8,053,285 231,527 20,234 2,945,802 17,863,042 - 1,327,758 30,441,648

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 6,846,046 - 11,583,649 13,407,743 - - 2,168,198 34,005,636 Total Deferred Inflows of Resources 6,846,046 - 11,583,649 13,407,743 - - 2,168,198 34,005,636 FUND BALANCES:

Nonspendable:

Advances receivable - 106,344 - - - - 40,674 147,018
Restricted for:

Debt service - - - - - 245,989 - 245,989
Streets - Impact fees - 8,149,285 - - - - - 8,149,285
Housing - - 3,475,432 353,616 - - - 3,829,048
Public safety - Narcotics assets seizure - - - - - - 186,702 186,702 Housing - Business development - - - - - - 207,271 207,271 Housing - Economic development - - - - - - 28,410 28,410 Cultural and recreation - Library - - - - - - 1,959,259 1,959,259 Cultural and recreation - Parks development - - - - - - 2,216,541 2,216,541 General government - Retirement tax - - - - - - 527,755 527,755 Public safety - Measure G/Y - - - - - - 3,493,665 3,493,665 Public safety - Abandoned vehicle - - - - - - 22,082 22,082 Housing - Inclusionary housing - - - - - - 161,329 161,329 Streets - SB1 Gas tax - - - - - - 2,760,545 2,760,545
Streets - Measure D - - - - - - 3,565,669 3,565,669
Unassigned 18,228,109 - - - - - (381,916) 17,846,193
Total Fund Balances 18,228,109 8,255,629 3,475,432 353,616 - 245,989 14,787,986 45,346,761 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 33,127,440 8,487,156 15,079,315 16,707,161 17,863,042 245,989 18,283,942 109,794,045

SPECIAL REVENUE FUNDS
See accompanying notes to financial statements
33 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

GOVERNMENTAL FUNDS

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
JUNE 30, 2022
Amounts reported for governmental activities in the Statement of Net Position are different from those reported in the governmental funds because: $ Fund balances of governmental funds 45,346,761
Capital assets (gross) used in Governmental Activities are not financial resources and, therefore, are not reported in the governmental funds. 220,979,483 Accumulated depreciation has not been included in the governmental funds financial statements. (107,652,441)
The internal service fund is used by management to charge the costs of insurance to individual governmental funds. The net current assets and liabilities of the internal service fund are included in Governmental Activities on the Statement of Net Position. (610,542)
Loans and intergovernmental receivables recorded as unavailable revenue in the governmental funds are recorded as revenue on the Statement of Activities. 34,005,636 Interest payable is not due and payable in the current period and therefore, not reported in governmental funds. (12,273)
Long-term liabilities are not due and payable in the current period and therefore, not reported in governmental funds. (47,608,386)
Deferred outflows and inflows of resources relating to pensions: in governmental funds, deferred outflows and inflows of resources relating to pensions are not reported because they are applicable to future periods. In the Statement of Net Position, deferred outflows and inflows of resources relating to pensions are reported.

Deferred outflows of resources relating to pensions 15,054,047 Deferred inflows of resources relating to pensions (25,386,657) Total Net Position - Governmental Activities 134,115,628 See accompanying notes to financial statements
34 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2022

REDEVELOPMENT AMERICAN OTHER TOTAL

AND HOUSING RESCUE DEBT GOVERNMENTAL GOVERNMENTAL

GENERAL IMPACT FEES HOUSING GRANTS PLAN ACT SERVICE FUNDS FUNDS $ $ $ $ $$ $ $
REVENUES:

Taxes 34,344,898 - - - - 15,348,141 - 49,693,039
Licenses, permits, and fees 3,373,571 1,810,228 - - - - 663,742 5,847,541 Intergovernmental 2,472,809 - 1,474,652 - 514,850 - 1,273,059 5,735,370 Charges for services 3,500,499 - - - - - 22,247 3,522,746 Fines 592,760 - - - - - - 592,760
Interest 2,731,729 29,432 33,127 3,389 - - 46,366 2,844,043 Miscellaneous 2,194,199 - 1,250,409 98,516 - - 242,225 3,785,349 Total revenues 49,210,465 1,839,660 1,283,536 1,576,557 514,850 - 17,595,780 72,020,848 EXPENDITURES:

Current:

General government 13,551,227 - - - 514,850 - 196,288 14,262,365 Public safety 28,203,017 - - - - - 5,341,143 33,544,160 Housing - - 1,284,241 1,298,738 - - 473,532 3,056,511
Streets 5,170,149 1,091,475 - - - - 2,508,626 8,770,250 Culture and recreation 6,028,429 - - - - - 3,354,451 9,382,880 Debt service:

Principal - - - - 784,640 - - 784,640
Interest and fiscal charges - - - - 48,890 - - 48,890
Total expenditures 52,952,822 1,091,475 1,284,241 1,298,738 514,850 833,530 11,874,040 69,849,696 Excess (deficiency) of revenues over
(under) expenditures (3,742,357) 748,185 (705) 277,819 - (833,530) 5,721,740 2,171,152

OTHER FINANCING SOURCES (USES)
Transfers in 3,783,286 - 85,381 - 832,761 - 93,195 4,794,623 Transfers out (83,777) (5,000) - (283,934) - - (4,137,620) (4,510,331) Total other financing sources (uses) 3,699,509 (5,000) 85,381 (283,934) - 832,761 (4,044,425) 284,292 Net change in fund balances (42,848) 743,185 84,676 (6,115) - (769) 1,677,315 2,455,444 Fund balances, July 1 18,270,957 7,512,444 3,390,756 359,731 - 246,758 13,110,671 42,891,317 Fund balances, June 30 18,228,109 8,255,629 3,475,432 353,616 - 245,989 14,787,986 45,346,761

SPECIAL REVENUE FUNDS
See accompanying notes to financial statements
35 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

GOVERNMENTAL FUNDS

RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL

FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
$
Amounts reported for governmental activities in the statement of activities are different because of the following:

Net Change In Fund Balance - Total Governmental Funds 2,455,444 Capital Assets Transactions
Governmental Funds report capital outlay as expenditures However, the cost of those assets is capitalized in the Statement of Activities and allocated over their estimated useful lives and reported as depreciation expense.

The capital outlay expenditures are therefore added back to fund balance 7,462,894 Depreciation expense is deducted from the fund balance (5,680,736) Long-Term Debt Proceeds and Payments
Debt and lease proceeds provide current financial resources to Governmental Funds but increases long-term liabilities in the Statement of Net Position.

The repayment of the principal is an expenditure in the governmental funds, but in the Statement of Net Position the repayment reduces long-term liabilities.

Repayment of debt principal is added back to fund balance 784,640 Interest accrued to principal is deducted from fund balance 7,189 Accrual of Non-Current Items
The amounts below included in the Statement of Activities do not provide or (require) the use of current financial resources and therefore are not reported as revenue or expenditures in governmental funds (net change):

Compensated Absences 192,084
Net pension liabilities and pension-related deferred outflows/inflows of resources 3,889,614 Net OPEB liability (1,613,516)
Unavailable revenue (199,220)
Internal Service Funds Are Used By Management To Charge The Costs Of Insurance To Individual Funds. (2,039,979)
Change In Net Position Of Governmental Funds 5,258,414
See accompanying notes to financial statements
36 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

GENERAL FUND

STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Variance With
Final Budget -
Positive
Original Final Actual (Negative)
$$$$
REVENUES:

Taxes 32,296,474 34,344,898 34,344,898 -
Licenses, permits, and fees 2,478,051 3,373,571 3,373,571 - Intergovernmental 6,152,261 2,472,809 2,472,809 -
Charges for services 4,689,636 3,500,499 3,500,499 -
Fines 657,488 592,760 592,760 -
Interest 2,733,979 2,733,979 2,731,729 (2,250)
Miscellaneous 1,661,117 2,194,199 2,194,199 -
Total revenues 50,669,006 49,212,715 49,210,465 (2,250) EXPENDITURES:

Current:

General government 16,857,522 13,551,227 13,551,227 -
Public safety 27,798,034 28,832,501 28,203,017 629,484
Streets 5,810,488 5,170,149 5,170,149 -
Culture and recreation 7,154,219 6,028,429 6,028,429 -
Total expenditures 57,620,263 53,582,306 52,952,822 629,484 Excess (deficiency) of revenues over
(under) expenditures (6,951,257) (4,369,591) (3,742,357) 627,234

OTHER FINANCING SOURCES (USES)
Transfers in 4,366,465 4,014,827 3,783,286 (231,541)
Transfers out (273,391) (315,318) (83,777) 231,541
Total other financing sources (uses) 4,093,074 3,699,509 3,699,509 - Net change in fund balance (2,858,183) (670,082) (42,848) 627,234 Fund balance, July 1 18,270,957 18,270,957 18,270,957 - Fund balance, June 30 15,412,774 17,600,875 18,228,109 627,234 Budgeted Amounts
See accompanying notes to financial statements
37 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

IMPACT FEES FUND

STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Variance With
Final Budget -
Positive
Original Final Actual (Negative)
$$$ $
REVENUES:

Licenses, permits, and fees 1,791,649 1,791,649 1,810,228 18,579 Interest 29,430 29,430 29,432 2
Miscellaneous - - - -
Total revenues 1,821,079 1,821,079 1,839,660 18,581
EXPENDITURES:

Current:

Streets 1,091,475 1,091,475 1,091,475 -
Total expenditures 1,091,475 1,091,475 1,091,475 -
Excess (deficiency) of revenues over
(under) expenditures 729,604 729,604 748,185 18,581

OTHER FINANCING SOURCES (USES)
Transfers (out) (5,000) (5,000) (5,000) -
Total other financing sources (uses) (5,000) (5,000) (5,000) - Net change in fund balance 724,604 724,604 743,185 18,581 Fund balance, July 1 7,512,444 7,512,444 7,512,444 -
Fund balance, June 30 8,237,048 8,237,048 8,255,629 18,581 Budgeted Amounts
See accompanying notes to financial statements
38 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Variance With
Final Budget -
Positive
Original Final Actual (Negative)
$$$ $
REVENUES:

Interest 33,130 33,130 33,127 (3)
Miscellaneous 1,250,409 1,250,409 1,250,409 -
Total revenues 1,283,539 1,283,539 1,283,536 (3)
EXPENDITURES:

Current:

Housing 1,284,241 1,284,241 1,284,241 -
Total expenditures 1,284,241 1,284,241 1,284,241 -
Excess (deficiency) of revenues over
(under) expenditures (702) (702) (705) (3)

OTHER FINANCING SOURCES (USES)
Transfers In 85,381 85,381 85,381 -
Total other financing sources (uses) 85,381 85,381 85,381 - Net change in fund balance 84,679 84,679 84,676 (3)
Fund balance, July 1 3,390,756 3,390,756 3,390,756 -
Fund balance, June 30 3,475,435 3,475,435 3,475,432 (3) Budgeted Amounts

HOUSING FUND
See accompanying notes to financial statements
39 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Variance With
Final Budget -
Positive
Original Final Actual (Negative)
$$$ $
REVENUES:

Intergovernmental 1,573,168 1,573,168 1,573,168 -
Interest 3,389 3,389 3,389 -
Total revenues 1,576,557 1,576,557 1,576,557 -
EXPENDITURES:

Housing 1,298,738 1,298,738 1,298,738 -
Total expenditures 1,298,738 1,298,738 1,298,738 -
Excess (deficiency) of revenues over
(under) expenditures 277,819 277,819 277,819 -
OTHER FINANCING SOURCES (USES):

Transfers (out) (283,934) (283,934) (283,934) -
Total other financing sources (uses) (283,934) (283,934) (283,934) - Net change in fund balance (6,115) (6,115) (6,115) -
Fund balance, July 1 359,731 359,731 359,731 -
Fund balance, June 30 353,616 353,616 353,616 -
Budgeted Amounts

REDEVELOPMENT AND HOUSING GRANTS FUND
See accompanying notes to financial statements
40 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Variance With
Final Budget -
Positive
Original Final Actual (Negative)
$$$ $
REVENUES:

Intergovernmental 514,850 514,850 514,850 -
Total revenues 514,850 514,850 514,850 -
EXPENDITURES:

General Government 514,850 514,850 514,850 -
Total expenditures 514,850 514,850 514,850 -
Excess (deficiency) of revenues over
(under) expenditures - - - -
Net change in fund balance - - - -
Fund balance, July 1 - - - -
Fund balance, June 30 - - - -

AMERICAN RESCUE PLAN ACT FUND
Budgeted Amounts
See accompanying notes to financial statements
41 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
JUNE 30, 2022
Governmental
Activities -
Internal Service
WATER SEWER SOLID WASTE AIRPORT FIBER OPTIC TOTALS Fund $ $ $ $$ $ $
ASSETS
Current Assets:

Cash and investments 28,121,135 14,183,328 9,429,654 358,606 92,264 52,184,987 6,096,169 Restricted cash - 1,019,050 709,564 - - 1,728,614 -
Receivables:

Accounts 1,771,114 3,039,864 952,753 68,166 4,420 5,836,317 473,667 Intergovernmental - - 2,581 110,121 - 112,702 -
Loans receivable - 393,319 - - - 393,319 -
Deposits - - - - - - 60,000
Inventories 215,874 - 25,461 101,170 - 342,505 266,850
Total Current Assets 30,108,123 18,635,561 11,120,013 638,063 96,684 60,598,444 6,896,686 Noncurrent Assets:

Advances receivable 1,956,182 184,944 80,275 - - 2,221,401 - Leases receivable - - - 3,357,255 221,672 3,578,927 -
Capital assets:

Land and improvements 259,333 8,375,598 1,769,401 4,366,883 - 14,771,215 - Construction in progress 3,839,090 1,813,737 32,947 - - 5,685,774 - Buildings 49,626,108 30,905,407 2,289,649 9,160,742 - 91,981,906 - Machinery and equipment 7,261,390 6,978,332 12,543,857 441,365 - 27,224,944 33,910 Infrastructure 13,830,163 48,245,492 76,916 7,966,694 706,929 70,826,194 - Accumulated depreciation (33,964,770) (52,362,822) (10,231,122) (12,057,351) (215,024) (108,831,089) (2,355) Net Capital Assets 40,851,314 43,955,744 6,481,648 9,878,333 491,905 101,658,944 31,555 Total Noncurrent Assets 42,807,496 44,140,688 6,561,923 13,235,588 713,577 107,459,272 31,555 Total Assets 72,915,619 62,776,249 17,681,936 13,873,651 810,261 168,057,716 6,928,241

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - pension 874,524 1,544,320 888,923 237,947 - 3,545,714 611,547 Total Deferred Outflows of Resources 874,524 1,544,320 888,923 237,947 - 3,545,714 611,547

LIABILITIES
Current Liabilities:

Accounts payable 953,707 681,063 385,533 102,507 100 2,122,910 457,368 Accrued personnel costs 226,339 482,909 268,971 65,518 - 1,043,737 209,010 Insurance claims payable - - - - - - 3,792,529
Retentions payable 7,950 10,979 - - - 18,929 6,835
Customer deposits 65,076 - - - - 65,076 -
Unearned revenue - - 5,398 79,924 - 85,322 -
Current maturities of long term debt:

Compensated absences 14,124 28,377 17,438 1,906 - 61,845 10,253 Liability for landfill closure - - 40,000 - - 40,000 -
Notes payable 10,773 116,787 327,156 23,037 - 477,753 - Loans payable - 260,147 - - - 260,147 -
Total Current Liabilities 1,277,969 1,580,262 1,044,496 272,892 100 4,175,719 4,475,995 Noncurrent Liabilities:

Compensated absences 221,277 444,580 273,197 29,867 - 968,921 160,637 Net OPEB liability 372,792 506,615 420,586 105,147 - 1,405,140 - Liability for landfill closure - - 3,640,437 - - 3,640,437 - Net pension liability 3,349,410 5,914,717 3,404,559 911,333 - 13,580,019 2,342,210 Notes payable 19,943 304,147 1,000,041 74,870 - 1,399,001 - Loans payable - 5,234,198 - - - 5,234,198 -
Total Noncurrent Liabilities 3,963,422 12,404,257 8,738,820 1,121,217 - 26,227,716 2,502,847 Total Liabilities 5,241,391 13,984,519 9,783,316 1,394,109 100 30,403,435 6,978,842

DEFERRED INFLOWS OF RESOURCES
Leases related - - - 3,293,811 247,876 3,541,687 -
Deferred inflows of resources - pension 1,675,253 2,958,326 1,702,836 410,241 - 6,746,656 1,171,488 Total Deferred Inflows of Resources 1,675,253 2,958,326 1,702,836 3,704,052 247,876 10,288,343 1,171,488

NET POSITION
Net investment in capital assets 40,820,598 39,059,515 5,864,015 9,780,426 491,905 96,016,459 31,555 Unrestricted 26,052,901 8,318,209 1,220,692 (766,989) 70,380 34,895,193 (642,097) Total Net Position 66,873,499 47,377,724 7,084,707 9,013,437 562,285 130,911,652 (610,542) Business-type Activities -
Enterprise Funds
See accompanying notes to financial statements
42 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

PROPRIETARY FUNDS

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Governmental
Activities -
Internal Service
WATER SEWER SOLID WASTE AIRPORT FIBER OPTIC TOTALS Fund $ $ $ $ $$ $
OPERATING REVENUES:

Charges for services 21,044,726 $16,365,977 16,115,767 $2,659,206 94,808 56,280,484 19,800,176 Total operating revenues 21,044,726 16,365,977 16,115,767 2,659,206 94,808 56,280,484 19,800,176 OPERATING EXPENSES:

Costs of sales and services 14,519,574 12,075,456 13,516,423 4,074,270 28,893 44,214,616 21,851,093 Depreciation 1,575,228 1,557,998 838,477 395,385 35,346 4,402,434 2,355 Total operating expenses 16,094,802 13,633,454 14,354,900 4,469,655 64,239 48,617,050 21,853,448 Operating income (loss) 4,949,924 2,732,523 1,760,867 (1,810,449) 30,569 7,663,434 (2,053,272)

NONOPERATING REVENUES (EXPENSES)
Lease revenues - - - 1,295,988 - 1,295,988 -
Grant revenues - 5,052 21,249 - - 26,301 -
Interest revenues 90,032 79,492 37,449 58,071 (25,895) 239,149 13,293 Interest expenses (17,120) (57,492) (15,119) 26,106 - (63,625) - Total nonoperating revenues (expenses) 72,912 27,052 43,579 1,380,165 (25,895) 1,497,813 13,293 Income (loss) before contributions and transfers 5,022,836 2,759,575 1,804,446 (430,284) 4,674 9,161,247 (2,039,979) Capital contributions - connection fees 88,922 399,911 - - - 488,833 - Transfers (out) (31,625) (201,976) (45,635) (5,056) - (284,292) - Changes in net position 5,080,133 2,957,510 1,758,811 (435,340) 4,674 9,365,788 (2,039,979) Total Net Position - Beginning 61,793,366 44,420,214 5,325,896 9,448,777 557,611 121,545,864 1,429,437 Total Net Position - Ending 66,873,499 47,377,724 7,084,707 9,013,437 562,285 130,911,652 (610,542) Business-type Activities -
Enterprise Funds
See accompanying notes to financial statements
43 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Governmental
Activities -
Internal Service
WATER SEWER SOLID WASTE AIRPORT FIBER OPTIC TOTALS Fund $ $ $ $ $$$
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users 20,763,374 16,117,069 15,919,482 2,745,723 116,592 55,662,240 - Receipts from interfund services provided - - - - - - 19,722,109 Payments to suppliers (14,763,567) (11,811,289) (13,785,871) (4,147,103) (28,793) (44,536,623) (21,834,770) Payments to employees (888,908) (928,817) (1,241,512) (337,267) (63) (3,396,567) 3,307,497 Receipt for interfund services provided (used) 601,278 21,738 57,027 - - 680,043 - Net cash provided (used) by operating activities 5,712,177 3,398,701 949,126 (1,738,647) 87,736 8,409,093 1,194,836

CASH FLOW FROM NONCAPITAL FINANCING ACTIVITIES
Grant revenue - 5,052 21,249 - - 26,301 -
Transfers (to) other funds (31,625) (201,976) (45,635) (5,056) - (284,292) - Net cash provided (used) by noncapital financing activities (31,625) (196,924) (24,386) (5,056) - (257,991) -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets ($1,531,111) (1,622,447) ($831,700) (21,401) - (4,006,659) (33,910) Connection fees 88,922 399,911 - - - 488,833 -
Principal paid on long term debt (13,888) (418,463) (324,029) (23,037) - (779,417) - Interest paid on long term debt (17,120) (57,492) (15,119) 26,106 - (63,625) - Net cash provided (used) by capital and related financing activities (1,473,197) (1,698,491) (1,170,848) (18,332) - (4,360,868) (33,910) CASH FLOWS FROM INVESTING ACTIVITIES:

Lease revenue - - - 1,295,988 - 1,295,988 -
Interest received 90,032 79,492 37,449 58,071 (25,895) 239,149 13,293 Net cash provided (used) by investment activities 90,032 79,492 37,449 1,354,059 (25,895) 1,535,137 13,293 Net cash flows 4,297,387 1,582,778 (208,659) (407,976) 61,841 5,325,371 1,174,219 Cash and cash equivalents at beginning of period 23,823,748 13,619,600 10,347,877 766,582 30,423 48,588,230 4,921,950 Cash and cash equivalents at ending of period 28,121,135 15,202,378 10,139,218 358,606 92,264 53,913,601 6,096,169 Reconciliation of Statement of Net Position:

Cash and investments 28,121,135 14,183,328 9,429,654 358,606 92,264 52,184,987 6,096,169 Cash and investments with fiscal agents - 1,019,050 709,564 - - 1,728,614 - 28,121,135 15,202,378 10,139,218 358,606 92,264 53,913,601 6,096,169 Reconciliation of operating income (loss) to cash flows from operating activities Operating Income (loss) 4,949,924 2,732,523 1,760,867 (1,810,449) 30,569 7,663,434 (2,053,272) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation 1,575,228 1,557,998 838,477 395,385 35,346 4,402,434 2,355 (Increase) decrease in receivables (281,352) (335,860) (199,102) 25,040 (4,420) (795,694) (78,067) (Increase) decrease in inventories 37,136 - (24,599) (49,987) - (37,450) (266,850) (Increase) decrease in loans receivable - 86,952 - - - 86,952 - (Increase) decrease in due from other governments - - (2,581) 83,463 - 80,882 - (Increase) decrease in advances receivable 601,278 21,738 57,027 - - 680,043 - (Increase) decrease in leases receivable - - - (63,444) 26,204 (37,240) - (Increase) decrease in deferred outflows 29,444 (50,785) 86,170 14,332 - 79,161 (611,547) Increase (decrease) in accounts payable (272,555) 253,188 (239,290) (22,846) 100 (281,403) 279,778 Increase (decrease) in claims payable - - - - - - 141,960 Increase (decrease) in accrued personnel costs (6,587) 66,610 (15,278) (22,462) (63) 22,220 92,496 Increase (decrease) in retentions payable (63,719) 10,979 (5,559) - - (58,299) 3,395 Increase (decrease) in liability for landfill closure - - - - - - - Increase (decrease) in unearned revenue - - 5,398 41,458 - 46,856 - Increase (decrease) in customer deposits 55,145 - - - - 55,145 - Increase (decrease) in net pension liability (2,532,573) (3,803,487) (2,940,224) (730,209) - (10,006,493) 2,342,210 Increase (decrease) in net OPEB liabilities (22,635) (46,925) (40,704) (292) - (110,556) 170,890 Increase (decrease) in deferred inflows 1,643,443 2,905,770 1,668,524 401,364 - 6,619,101 1,171,488 Increase (decrease) in advances payable - - - - - - -
Total adjustments 762,253 666,178 (811,741) 71,802 57,167 745,659 3,248,108 Net cash provided (used) by operating activities 5,712,177 3,398,701 949,126 (1,738,647) 87,736 8,409,093 1,194,836

NON CASH TRANSACTIONS
Retirement of capital assets (202,440) (290,486) (551,324) - - (1,044,250) - Landfill post closure liability amortization - - - - - - - Landfill usage amortization - - - - - - -
Business-type Activities -
Enterprise Funds
See accompanying notes to financial statements
44 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

SUCCESSOR AGENCY PRIVATE PURPOSE TRUST FUND

STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2022
ASSETS $
Cash and investments 2,727,907
Cash and investments with fiscal agent 1,692,468
Notes receivable 171,179
Total Assets 4,591,554

DEFERRED OUTFLOW OF RESOURCES
Deferred Loss on Refunding 163,765
Total Deferred Outflow of Resources 163,765

LIABILITIES
Current Liabilities:

Accounts Payable 599,518
Salaries Payable -
Interest Payable 122,848
Notes Payable 955,275
Refunding Bonds Payable 1,390,000
Total Current Liabilities 3,067,641
Noncurrent liabilities:

Notes Payable 508,477
Refunding Bonds Payable 6,531,688
Total Non Current liabilities 7,040,165
Total Liabilities 10,107,806
Net Position
Held in trust for other purposes (5,352,487)
Total Net Position (5,352,487)
See accompanying notes to financial statements
45 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

SUCCESSOR AGENCY PRIVATE PURPOSE TRUST FUND

STATEMENT OF CHANGES IN NET POSITION
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
ADDITIONS: $
Taxes 3,480,428
Interest 5,616
Amortization 72,744
Total additions 3,558,788
DEDUCTIONS:

Administration 548,577
Interest 338,048
Total deductions 886,625
Change in Net Position 2,672,163
Net Position (Deficit), July 1 (8,024,650)
Net Position (Deficit), June 30 (5,352,487)
See accompanying notes to financial statements
46 Attachment 1

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2022
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

A. Reporting entity
The City of Watsonville, California was incorporated in 1868 as a charter city and operates under the Council-Manager form of government. The City provides the following services: public safety (police, fire and building inspections), highway and streets, water, sewer and solid waste services, airport, public improvements, planning and zoning, housing and general administration.

B. Government-wide and fund financial statements
The Government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the activities of the primary government except for the Fiduciary fund type – Private Purpose Trust Fund. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among programs revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

C. Measurement focus, basis of accounting, and financial statement presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental funds financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period.
47 Attachment 1