Agenda packet — Watsonville City Council, February 27, 2024 (part 3 of 3)

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
The annual requirement to amortize the lease outstanding in the Sewer Fund as of June 30, 2023 is as follows:

Fiscal Year Principal Interest Debt Service
$$$
2024 91,424 2,457 93,881
2025 92,310 1,571 93,881
2026 93,206 676 93,882
Total 276,940 4,704 281,644
On March 9, 2021, the City entered into a Master Equipment Lease Purchase agreement with Bank of America for the purchase of four solid waste collection vehicle trucks. The amount of the lease pertaining to the Solid Waste Fund was $1,809,432. The interest rate for the 6 year lease is 1.25% with principal lease payments ranging from $165,008 to $335,528.

If the City should default under any of the provisions hereof, the lessor may (1) declare defaulted and all other amounts payable to be immediately due, (2) retake possession or require the City to promptly return such equipment, (3) terminate the lease or (4) take legal action necessary and desirable to enforce its rights. There have been no events of default since the lease was entered into.

The annual requirement to amortize the lease outstanding in the Solid Waste Fund as of June 30, 2023 is as follows:

Fiscal Year Principal Interest Debt Service
$$$
2024 328,855 8,838 337,693
2025 332,041 5,651 337,692
2026 335,259 2,433 337,692
Total 996,155 16,922 1,013,077

78 Attachment B

Page 388 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
Changes in long-term liabilities
Long-term liabilities activity for the fiscal year ended June 30, 2023, are as follows:

Balance
at June 30, 2022 Balance Due Within
(as restated) Additions Reductions June 30, 2023 One Year $ $$ $ $
Governmental activities:

Direct Borrowings:

Notes payable 2,153,222 - (781,123) 1,372,099 486,460
Subtotal 2,153,222 - (781,123) 1,372,099 486,460
Other Liabilities:

Compensated absences 2,191,838 1,534,106 (1,344,547) 2,381,397 142,884 Net OPEB liability 3,631,460 - (2,453,740) 1,177,720 -
Net pension liability 42,144,966 38,795,012 - 80,939,978 - Subscription liabilities 1,065,310 (194,812) - 870,498 201,136 51,186,796 40,329,118 (4,774,222) 86,741,692 830,480
Balance Balance Due Within
June 30, 2022 Additions Reductions June 30, 2023 One Year $ $$ $ $
Business-type activities:
5,494,345 - (260,148) 5,234,197 264,500
1,876,754 6,000,000 (477,753) 7,399,001 613,977
Compensated absences 1,030,766 756,536 (781,423) 1,005,879 60,352 Net OPEB liability 1,405,140 - 1,405,140 - -
Net pension liabilities 13,580,019 12,777,817 - 26,357,836 - Landfill closure / post-closure liabilities 3,680,437 - 3,680,437 - - 27,067,461 19,534,353 (1,519,324) 45,082,490 938,829
Total Governmental activities
Long-term liabilities
Total Business-type activities
Long-Term liabilities
Loans payable (2015 SWRCB, 2019 SWRCB)
Notes payable (2019 PG&E various, Sewer Cleaning Truck, Solid Waste Collection Truck, IBank Loan)
In fiscal year 2023, the City implemented the provisions of GASB Statement No. 96, Subscription-Based Information Technology Arrangements, which required the City to record a subscription liability. As a result, a subscription liability was recorded in the amount of $1,065,310 as part of the Governmental Activities long-term liabilities at July 1, 2022. See Note III. F for additional information.

General Fund, Library Fund, Sewer Fund, Water Fund, Airport Fund and Solid Waste Fund all were required to pay their portion of costs related to other Net OPEB Liabilities and Net Pension Liabilities.
79 Attachment B

Page 389 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
Loans and notes payable activity for the fiscal year ended June 30, 2023, are as follows:

Amount
Balance Balance due within
June 30, 2022 Additions Retirements June 30, 2023 one year $$$ $ $
Governmental activities:
2004 HUD Section 108 488,000 - (155,000) 333,000 163,000 Due to Pacific Gas & Electric
Old City Hall 17,929 - (11,323) 6,606 6,606
Civic Center 16,518 - (16,518) - -
Marrinovich 10,767 - (9,229) 1,538 1,538
Youth Center 15,806 - (4,993) 10,813 4,993
Ramsay Park 14,028 - (7,013) 7,015 7,015
Beach Street Parking Garage 2 16,493 - (7,330) 9,163 7,330 Police Department 39,604 - (19,010) 20,594 19,010
Senior Center 14,653 - (2,882) 11,771 2,882
Tiller Ladder Truck 276,507 - (276,507) - -
Solar Panels 1,242,917 - (271,318) 971,599 274,086
Total governmental activities 2,153,222 - (781,123) 1,372,099 486,460 Amount
Balance Balance due within
June 30, 2022 Additions Retirements June 30, 2023 one year $$$ $ $
Business-type activities:

SWRCB 2015 Loan 1,235,406 - (68,364) 1,167,042 69,457
SWRCB 2016 Loan 4,258,939 - (191,784) 4,067,155 195,043 Due to Pacific Gas & Electric
WWTP 1 7,036 - (7,036) - -
Airport 97,907 - (23,037) 74,870 23,037
Corralitos Filter Plant 10,122 - (5,281) 4,841 4,841
MSC 20,594 - (5,492) 15,102 5,492
WWTP 2 46,412 - (19,205) 27,207 19,205
City Landfill 5,344 - (1,458) 3,886 1,458
Sewer System Cleaning Truck 367,486 - (90,546) 276,940 91,424 Solid Waste Collection Vehicles 1,321,853 - (325,698) 996,155 328,855 Landfill Obligation
Phase I & II Postclosure 239,650 - - 239,650 -
Phase III Closure 1,876,793 - - 1,876,793 -
Phase III Postclosure 1,563,994 - - 1,563,994 -
IBank Loan - 6,000,000 - 6,000,000 139,665
Total business-type activities 11,051,536 6,000,000 (737,901) 16,313,635 878,477

80 Attachment B

Page 390 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
F. Subscription-Based Information Technology Arrangements (SBITAs) A SBITA is a contract that conveys control of the right to use another party’s (a SBITA vendor’s) IT software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction.

At the commencement of a SBITA, the City initially measures the subscription liability at the present value of payments expected to be made during the contract term. Subsequently, the subscription liability is reduced by the principal portion of payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for payments made at or before the SBITA commencement date, plus certain initial direct costs.

Subsequently, the subscription asset is amortized on a straight-line basis over shorter of the subscription term or the useful life of the underlying IT assets.

Key estimates and judgments related to SBITAs include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments as follows:
• The City uses the interest rate charged by the IT vendor as the discount rate. When the interest rate charged by the IT vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for subscription liabilities. • The subscription term includes the noncancellable period of the subscription. • Subscription payments included in the measurement of the subscription liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.

The City monitors changes in circumstances that would require a remeasurement of its subscription and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

Subscription assets are reported with other capital assets and subscription liabilities are reported as long-term debt on the statement of net position.

In fiscal year 2023, the City implemented the provisions of GASB Statement No. 96, Subscription-Based Information Technology Arrangements, which required the City to record an intangible right-to-use subscription asset and subscription liability. As a result, the City recorded initial right-to-use subscription assets in the amount of $1,196,545 and subscription liabilities in the amount of $1,065,310. The difference of $131,235 represents capitalizable implementation costs and prepayments made on the subscription that were not included in the measurement of the liability. Governmental activities beginning net position at July 1, 2022, was restated and increased by $131,235.

81 Attachment B

Page 391 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
A summary of the City’s subscription liabilities for the fiscal year ended June 30, 2023, are as follows:

Balance
June 30, 2022 Balance Due Within
Governmental activities: (as restated) Retirements June 30, 2023 One Year $$ $ $
OpenGov 204,990 (68,330) 136,660 68,330
Tyler Munis ERP 860,320 (126,482) 733,838 132,806
Total subscription liabilities 1,065,310 (194,812) 870,498 201,136 The future principal and interest subscription liability payments as of June 30, 2023 are as follows:

For the Year
Ended June 30 Principal Interest Total
$ $ $
2024 7,060 201,136 208,196
2025 207,776 5,577 213,353
2026 146,419 4,060 150,479
2027 153,740 2,875 156,615
2028 161,427 1,618 163,045
Totals 21,190 870,498 891,688
IV. Other information
A. Risk management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City also provides health insurance coverage to employees. There have been no significant reductions in insurance coverage for any risk of loss in the past fiscal year, and settled claims have not exceeded the commercial coverage in any of the past three fiscal years. The City has established a risk management fund to account for and finance its uninsured risks of loss.

The City's risk management programs provide coverage for up to a maximum of $150,000 for each Workers' Compensation claim; $500,000 for each General Liability claim. The City purchases commercial insurance for claims in excess of coverage provided by the self-insurance programs. There have been no significant changes in insurance coverage as compared to last fiscal year.

All funds of the City participate in the self-insurance programs. The employee health insurance program is funded by contributions of a flat rate per employee to the self-insurance fund. Other self-insurance programs are funded by budgeted appropriations. Funding is estimated to provide amounts needed to pay prior and current fiscal year claims and to establish reserves for catastrophic losses.
82 Attachment B

Page 392 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
Liabilities in the self-insurance Internal services fund at June 30, 2023 totaled $3,991,901 as follows: Health Benefits $99,768; General Liability $1,245,553; and Workers’ Compensation $2,646,580.

The basis for estimating incurred but not reported claims is based on the statute of limitation on accepting claims as follows:

Health Benefits are estimated at 2 times the current fiscal year’s average monthly cost, General Liability is estimated at 6 months of current fiscal year’s average monthly claim cost, and Workers’ Compensation is estimated by using the last two weeks of current fiscal year’s average monthly claim cost.
2021-2022 2022-2023
Claims incurred but not reported: $ $
Beginning 1,022,049 1,346,476
Incurred claims 2,040,881 2,011,595
Claims paid (1,716,454) (2,012,751)
Ending 1,346,476 1,345,320
Claims payable
Beginning 2,628,520 2,446,053
Incurred claims (2,589,343) 3,048,035
Claims paid 2,406,876 (2,847,507)
Ending 2,446,053 2,646,581
Total claims payable 3,792,529 3,991,901
B. Public entity risk pool
In November 1994, the City became a member of the Public Agency Risk Sharing Authority of California (PARSAC), formerly known as California Municipal Insurance Authority (CMIA).

PARSAC, a consortium of 34 municipalities and one fire district, which was established in May 1986 to pool resources, share risks, purchase excess insurance, and to share costs for professional risk management and claims administration. The Authority’s governing board consists of one appointed official and an alternate from participating cities.

General liability
The City is self-insured for general liability claims up to $500,000 (effective July 1, 2023) for each occurrence. Coverage for individual losses in excess of $500,000, up to $10,000,000 is provided through the California Intergovernmental Risk Authority (CIRA). Under this program, members share in losses between the members’ individual self-insured retention and $1,000,000 under a risk sharing pool program; and from $1,000,000 to $40,000,000, coverage is provided by another risk pool, CSAC-EIA.

Estimates for all liabilities have been accrued in the Self-Insurance Internal Service Fund, which included an estimate for incurred but not reported claims. At June 30, 2023, total estimated claims payable for General Liability were $1,245,553.
83 Attachment B

Page 393 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
C. Commitments and Contingencies
Litigation
Various claims and lawsuits are pending against the City. In the opinion of City management, the potential claims loss will not be significant to the City's financial statements.

Grant audits
The City receives grants for specific purposes that are subject to review and audit by grantor agencies. Such audits could result in a request for reimbursement by the grantor for expenditures disallowed under the terms and conditions of the appropriate agency. In the opinion of City management, such disallowance, if any, will not be significant.

Contingency
Proposition 218, which was approved by the voters in November 1996, regulates the City’s ability to impose, increase and extend taxes, assessments and fees. Any new, increased or extended taxes, assessments, and fees subject to the provisions of Proposition 218 require voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes, assessments, and fees are subject to the voter initiative process and may be rescinded in the future by the voters. Therefore, the City’s ability to finance the services for which the taxes, assessments and fees were imposed may be significantly impaired. Certain language in the initiative is unclear as to the scope and impact of the proposition. Future court rulings or state legislation may clarify these issues. At this time it is uncertain as to the effect that Proposition 218 will have on the City’s ability to maintain or increase the revenue it receives from taxes, assessments and fees, or its effect on interfund payments in lieu of taxes and transfers of surplus funds from enterprise funds to the general fund. Also unclear is the extent to which a 1995 California Supreme Court ruling (the Guardino case) upholding the voter approval requirements of a previously enacted state initiative (Proposition 62) is applicable to prior periods. However, because the City of Watsonville is a Charter City, management believes that the Guardino ruling does not apply to its general law application in the cited case.

D. Post-employment health care benefits
Retiree benefits – COBRA benefits
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), the City provides health care benefits to eligible former employees and their eligible dependents. Certain requirements are outlined by the federal government for this coverage. The premium plus a 2% administration fee is paid in full by the insured on or before the tenth day of the month for the actual month covered. This program is offered for a duration between 18 and 36 months, after the termination date, depending on circumstances related to eligibility to Medicare, death or divorce. During the last fiscal year two former employees participated in the program. 84 Attachment B

Page 394 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
E. Defined Benefit Pension Plans
The City has two defined benefit pension plans, a Miscellaneous Plan and a Safety Plan. The Miscellaneous Plan is an Agent-Multiple Employer Plan and the Safety Plan is a Cost-Sharing Employer Plan administered by the California Public Employees’ Retirement System (CalPERS).

Below is a summary of the deferred outflows, net pension liabilities and deferred inflows of resources by Plan:

Deferred Outflows Net Pension Deferred Inflows Pension
CalPERS Plan of Resources Liability of Resources Expense $ $$ $
Miscellaneous - Agent Multiple Employer 18,302,174 53,175,564 - 7,825,099 Safety - Cost-Sharing Multiple Employer 25,296,580 54,122,250 (4,278,575) 2,608,539 Totals 43,598,754 107,297,814 (4,278,575) 10,433,638
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in the pension expense as follows:

Fiscal Safety Plan Miscellaneous Plan Total
Year Ended Annual Annual Annual
June 30 Amortization Amortization Amortization
$$$
2023 4,282,531 3,446,921 7,729,452
2024 3,398,049 3,050,200 6,448,249
2025 1,892,544 1,587,841 3,480,385
2026 5,213,572 4,174,040 9,387,612
Total 14,786,696 12,259,002 27,045,698
See Notes below for further information about the Plans.

CALPERS miscellaneous employees plan
A. General Information about the Miscellaneous Pension Plan Plan Description
All qualified permanent and probationary miscellaneous employees are eligible to participate in the City’s Miscellaneous Employee Pension Plan, agent multiple-employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employees. Benefit provisions under the Plan is established by State statue and City resolution.

CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
85 Attachment B

Page 395 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 55 with statutorily reduced benefits. All members are eligible for nonduty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plans’ provisions and benefits in effect at June 30, 2023, are summarized as follows:

Miscellaneous
Hire date
Prior to
July 1, 2011
On or after
July 1, 2011
On or after
January 1, 2013
Benefit formula 2.0% @ 55 2.0% @ 60 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50-63 50-63 52-67
Monthly benefits, as a % of eligible compensation 1.426% to 2.418% 1.092% to 2.418% 1% to 2.5% Required employee contribution rates 7.00% 7.00% 6.25%
Required employer contribution rates 7.85% 7.85% 12.555% Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above as a dollar amount for contributions toward the unfunded actuarial liability (UAL). The dollar amounts are billed on a monthly basis or the City can elect a lump sum payment option. The City’s required contribution for the unfunded liability in the Miscellaneous plan for the year ended June 30, 2023 was $4,050,278, which were made under the lump sum payment option.

Employees Covered
The following employees were covered by the benefit terms for the Miscellaneous Plan as of the most recent actuarial valuation date of June 30, 2021 and measurement date as of June 30, 2022:

Miscellaneous
Inactive employees or beneficiaries currently receiving benefits 336 Inactive employees entitled to but not yet receiving benefits 343 Active employees 299
Total 978

86 Attachment B

Page 396 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan is determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.

The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

B. Net Pension Liability
The City’s net pension liability for the Miscellaneous Plan is measured as the total pension liability less the pension plan’s fiduciary net pension. The net pension liability of the Plan is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

Actuarial Assumptions - The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions:

Miscellaneous
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Payroll Growth 2.80%
Projected Salary Increase (1)
Investment Rate of Return 6.90% (2)
Mortality Derived using CalPERS Membership Data for all Funds (3) (1) Depending on age, service and type of employment.
(2) Net of pension plan investment expenses, includes inflation. (3) The mortality table used was developed based on CalPERS' specific data. The table includes 15 years of Mortality improvements using the Society of Actuaries Scale 80% of scale MP 2020. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 2001 to 2019) that can be found on the CalPERS website.

87 Attachment B

Page 397 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2021 valuation were based on the results of a November 2021 actuarial experience study for the period 2001 to 2019. Further details of the Experience Study can be found on the CalPERS website.

Discount Rate – The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate for each Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contributions rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, each Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments of current plan members for all plans in the PERF.

Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability for each Plan.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach.

Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.

88 Attachment B

Page 398 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
The table below reflects the long-term expected real rates of return by asset class:

Asset Class (1)
Assumed
Asset
Allocation
Real Return
(1,2)
Global Equity-Cap Weighted 30.0% 4.54%
Global Equity-Non-Cap Weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.0%
(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management study.

C. Changes in the Net Pension Liability
The changes in the Net Pension Liability for the Miscellaneous Plan were as follows:

Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
$$ $
Balance at June 30, 2021 171,368,012 144,661,222 26,706,790 Changes in the year:

Service cost 3,660,143 - 3,660,143
Interest on the total pension liability 12,135,027 - 12,135,027 Differences between actual and expected experience 550,395 - 550,395 Contribution - employer - 5,372,729 (5,372,729)
Contribution - employee - 1,604,758 (1,604,758)
Net investment income - (10,938,130) 10,938,130
Benefit payments, including refunds of employee
contributions (7,901,930) - (7,901,930)
Changes of Assumptions - 6,072,451 6,072,451
Administrative expense (90,115) 90,115 -
Net changes 14,516,086 (11,952,688) 26,468,774
Balance at June 30, 2022 185,884,098 132,708,534 53,175,564

89 Attachment B

Page 399 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the City for the Plan, calculated using the discount rate for the Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percent point lower or 1-percent point higher than the current rate:
1% Decrease 5.90%
Net Pension Liability $79,126,783
1% Decrease 6.90%
Net Pension Liability $53,175,564
1% Increase 7.90%
Net Pension Liability $31,820,650
Pension Plan Fiduciary Net Pension – Detailed information about the pension plan’s fiduciary net position is available in the separate issued CalPERS financial report.

D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pension For the fiscal year ended June 30, 2023, the City recognized pension expense of $7,825,099. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
$$
Pension contributions subsequent to measurement date 6,043,172 - Differences between actual and expected experience 1,169,067 - Changes in assumptions 4,385,659 -
Net differences between projected and actual earnings on plan investments - 6,704,276
Total 18,302,174 -
The amount of $6,043,172 was reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other amounts reported as deferred outflow of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ended Annual
June 30, Amortization
$
2024 3,446,921
2025 3,050,200
2026 1,587,841
2027 4,174,040
Total 12,259,002
90 Attachment B

Page 400 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
CALPERS Safety (Police & Fire) Employees Plan
A. General Information about the Safety Pension Plan
Plan Descriptions
All qualified public safety permanent and probationary employees are eligible to participate in the City’s Safety Employee Pension Plan, cost-sharing multiple employer defined benefit plans administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plans are established by State statue and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for nonduty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plans’ provisions and benefits in effect at June 30, 2023, are summarized as follows:

Hire date
Prior to
July 1, 2011
After
July 1, 2011
After
July 1, 2013
Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50-55 50-57
Monthly benefits, as a % of eligible compensation 3.0% 2.4% - 3.0% 2.0% - 2.7% Required employee contribution rates 9.0% 9.0% 13.0%
Required employer contribution rates 23.75% 20.64% 12.78% Safety
Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above as a dollar amount for contributions toward the unfunded actuarial liability (UAL). The dollar amounts are billed on a monthly basis or the City can elect a lump sum payment option. The City’s required contribution for the unfunded liability in the Safety plan for the year ended June 30, 2023 was $3,914,245, which were made under the lump sum payment option.

91 Attachment B

Page 401 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan is determined annually on an actuarial basis as of June 30 by CalPERS.

The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the fiscal year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Contributions to the pension plan from the City were $6,231,309 for the fiscal year ended June 30, 2023.

B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For purposes of measuring the net pension liability and deferred outflow/inflows of resources related to pensions and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the CalPERS financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

As of June 30, 2023, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan as follows:

Safety Plans
Proportion - June 30, 2021 0.82685%
Proportion - June 30, 2022 0.78762%
Change - Increase (Decrease) -0.03923%
For the year ended June 30, 2023, the City recognized pension expense of $2,608,539 for the Safety Plan. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
$$
Pension contributions subsequent to measurement date 6,231,309 - Differences between actual and expected experience 2,239,923 (587,725) Changes in assumptions 5,457,161 -
Net differences between projected and actual earnings
on plan investments 8,546,660 -
Differences between actual contributions and
proportional contributions (3,690,850) -
Adjustment due to differences in proportion 2,821,527 - Total 25,296,580 (4,278,575)

92 Attachment B

Page 402 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
The amount of $6,231,309 was reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as areduction of the net pension liability in the year ended June 30, 2024.

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

Year Ended Annual
June 30 Amortization
$
2024 4,282,531
2025 3,398,049
2026 1,892,544
2027 5,213,572
Total 14,786,696
Actuarial Assumptions
For the measurement period ended June 30, 2022, the total pension liability was determined by rolling forward the June 30, 2021 total pension liability. The June 30, 2022 total pension liabilities were based on the following actuarial methods and assumptions for all benefit tiers:

Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases (1)
Investment Rate of Return 6.90% (2)
Mortality Derived using CalPERS Membership Data for all Funds (3) (1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses, includes inflation (3) The mortality table used was developed based on CalPERS' specific data. The table includes 15 years of Mortality improvements using the Society of Actuaries Scale 80% of scale MP 2020. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 2001 to 2019) that can be found on the CalPERS website.

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2021 valuation were based on the results of a November 2021 actuarial experience study for the period 2001 to 2019. Further details of the Experience Study can be found on the CalPERS website.

93 Attachment B

Page 403 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
Discount Rate – The discount rate used to measure the total pension liability for the plan was

6.90%. The projection used to determine the discount rate for the Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

The table below reflects the expected real rates of return by asset class.

94 Attachment B

Page 404 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in Discount Rate – The following presents the City’s proportionate share of the net pension liability calculated using the discount rate of 6.90 percent, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (5.90 percent) or 1- percentage point higher (7.90 percent) than the current rate:

Safety
1% Decrease 5.90%
Net Pension Liability $79,872,313
Current Discount Rate 6.90%
Net Pension Liability $54,122,250
1% Increase 7.90%
Net Pension Liability $33,077,392
Pension Plan Fiduciary Net Position – Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

F. Successor Agency Private-Purpose Trust Fund for Assets of former Redevelopment Agency of the City of Watsonville.

On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Watsonville that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, either the city or other unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local governments. On January 10, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City.

Resolution Number 4-12
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence as the date of the dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

Successor agencies are allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

95 Attachment B

Page 405 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the state Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill.

Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. The City’s position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City.

In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City.

The following is a schedule of long-term liabilities for the fiscal year ended June 30, 2023:

Balance Balance Due Within
June 30, 2022 Retirements June 30, 2023 One Year
$$$$
Refunding tax allocation bonds 6,885,000 (1,390,000) 5,495,000 1,465,000 Bond Premium 1,036,688 (86,391) 950,297 -
Total Bonds Payable 7,921,688 (1,476,391) 6,445,297 1,465,000 Notes Payable 1,463,752 (1,002,477) 461,275 461,275
Total 9,385,440 (2,478,868) 6,906,572 1,926,275
Tax allocation refunding bonds
In June of 2004 the former Redevelopment Agency of the City of Watsonville issued tax allocation bonds in three series as follows:

1. Series A - $19,000,000

2. Series B-1 - $2,310,000

3. Series B-2 - $4,635,000
In April of 2016, the Successor Agency issued $11,790,000 of 2016 Tax Allocation Refunding Bonds, Series A and $2,420,000 of 2016 Tax Allocation Refunding Bonds, Taxable Series B for a current refunding of the $14,190,000 2004 Tax Allocation Bonds Series A and B-1 and $2,720,000 Tax Allocation Taxable Series B-2 Bonds. The Series A refunding bonds had $2,965,772 of additional funding and Series B had $410,577 of additional funding. The refunding was done to reduce future debt service payments. 96 Attachment B

Page 406 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
The transaction resulted in an economic gain of $3,269,616 and a reduction of $3,856,103 in future debt service payments and accounting loss of $163,765 which is shown as a deferred outflow of resources to be amortized over the life of the bonds.

The annual debt services requirements for the loan outstanding as of June 30, 2023 is as follows:

Fiscal Year Principal Interest Debt Service
$ $$
2024 1,465,000 227,450 1,692,450
2025 945,000 154,200 1,099,200
2026 295,000 106,950 401,950
2027 305,000 92,200 397,200
2028 325,000 76,950 401,950
2029-2033 1,770,000 236,938 2,006,938
2034 390,000 11,700 401,700
Total 5,495,000 906,388 6,401,388
Notes Payable
The City and former Agency had several notes payable from the former Agency to the City for various costs and fees associated with the construction of the Civic Plaza as follows:

Parking Garage Loan for Construction Costs $1,855,275
The State of California deemed these notes as a non-enforceable obligation, and the City could not be paid back until a finding of completion was received from the State’s Department of Finance, which the City received on February 21, 2014 and the Successor Agency’s oversight board made a finding that the notes were for a legitimate redevelopment purpose. The Oversight Board also made the finding for all the above notes. The notes are allowed to add interest based on the State of California Local Agency Investment Fund’s (LAIF) monthly interest rate.

Interest has been projected for the debt service at the most recent rate available.

Debt Payable Recap:

Parking Garage Loan
Fiscal Year Principal Interest Total
$ $$
2024 461,275 - 461,275
Total 461,275 - 461,275
97 Attachment B

Page 407 of 509 ends

This Page Left Intentionally Blank
Attachment B

Page 408 of 509 ends

Required Supplementary Information
Attachment B

Page 409 of 509 ends

The following table provides required supplementary information regarding the City's Miscellaneous Pension Plan:

MEASUREMENT DATE: 2014 2015 2016 2017
TOTAL PENSION LIABILITY $$$$
Service Cost 2,251,567 2,348,593 2,250,229 2,616,009
Interest 8,741,399 8,369,558 9,093,428 9,502,933
Differences between expected and actual experience (1,088,430) - (1,307,204) (160,738) Changes in assumptions (2,194,095) - - 8,126,558
Changes in benefits - - - -
Benefit payments, including refunds of employee contributions (4,874,482) (4,554,651) (5,292,339) (5,612,765) Net change in total pension liability 6,163,500 2,835,959 4,744,114 14,471,997 Total pension liability - beginning 112,697,136 118,860,636 121,696,595 126,440,709 Total pension liability - ending (a) 118,860,636 121,696,595 126,440,709 140,912,706

PLAN FIDUCIARY NET POSITION
Contributions - employer 1,881,144 1,750,491 2,288,840 2,856,260 Contributions - employee 1,087,253 1,064,147 1,145,223 1,265,745 Net investment income (1) 14,090,974 2,081,010 501,726 10,269,390 Administrative expense - (105,873) (57,299) (136,723)
Benefit payments, including refunds of employee contributions (4,874,482) (4,554,651) (5,292,339) (5,612,765) Net Plan to Plan Resource Movement - - - (2,203)
Other Miscellaneous Income/(Expense) - - - -
Net change in plan fiduciary net position 12,374,067 45,946 (1,413,849) 8,639,704 Plan fiduciary net position - beginning 81,597,739 93,971,806 94,017,752 92,603,903 Plan fiduciary net position - ending (b) 93,971,806 94,017,752 92,603,903 101,243,607 Net pension liability - ending (a)-(b) 24,888,830 27,678,843 33,836,806 39,669,099 Plan fiduciary net position as a percentage of the total pension liability 79.06% 77.26% 73.24% 71.85%
Covered payroll 17,452,658 17,390,545 17,680,742 18,366,981 Net pension liability as percentage of covered-employee payroll 143.12% 158.59% 191.38% 215.98% Notes to Schedule:
* Fiscal year 2015 was the 1st year of implementation.

Benefit changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).

Changes in assumptions: In 2017. the accounting discount rate reduced from 7.65% to 7.15%. In 2016, 2018, 2019, and 2020, there were no changes. In 2015. amounts reported reflect an adjustment of the discount rate from 7.5% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expense). In 2014, amounts were based on the 7.5% discount rate.

CITY OF WATSONVILLE, CALIFORNIA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

LAST NINE FISCAL YEARS
JUNE 30, 2023

100
Attachment B

Page 410 of 509 ends

2018 2019 2020 2021 2022
$$$$$
2,696,646 2,918,120 3,126,358 3,154,808 3,660,143
9,872,907 10,452,164 10,957,570 11,578,015 12,135,027
(622,350) 1,523,815 181,334 1,720,257 550,395
(617,380) - - 6,072,451 -
- - - - -
(5,877,340) (6,327,905) (6,846,317) (7,435,396) (7,901,930) 5,452,483 8,566,194 7,418,945 9,017,684 14,516,086
140,912,706 146,365,189 154,931,383 162,350,328 171,368,012 146,365,189 154,931,383 162,350,328 171,368,012 185,884,098 3,443,447 3,756,237 4,648,909 4,850,242 5,372,729
1,301,275 1,520,671 1,474,994 1,488,988 1,604,758
8,537,327 7,097,297 5,707,428 26,896,026 (10,938,130)
(457,364) (76,957) (160,932) (118,854) (90,115)
(5,877,340) (6,327,905) (6,846,317) (7,435,396) (7,901,930) (250) (3,911) - - -
-- - - -
6,947,095 5,965,432 4,824,082 25,681,006 (11,952,688)
101,243,607 108,190,702 114,156,134 118,980,216 144,661,222 108,190,702 114,156,134 118,980,216 144,661,222 132,708,534 38,174,487 40,775,249 43,370,112 26,706,790 53,175,564

73.92% 73.68% 73.29% 84.42% 71.39%
19,029,329 20,531,347 21,939,351 22,534,340 23,372,558
200.61% 198.60% 197.68% 118.52% 227.51%

101
Attachment B

Page 411 of 509 ends

The following table provides required supplementary information regarding the City's Miscellaneous Pension Plan:
2015 2016 2017 2018 2019
$$$$$
Contractually required contribution 1,769,613 2,299,823 2,288,840 2,856,260 3,756,236 Contributions in relation to the actuarially
determined contributions (1,769,613) (2,299,823) (2,288,840) (2,856,260) (3,756,236) Contribution deficiency (excess) - - - - -
Covered payroll 17,452,658 17,680,742 18,366,981 18,917,990 19,029,329 Contributions as a percentage of covered
payroll 10.14% 13.01% 12.46% 15.10% 19.74%
2020 2021 2022 2023
$$$$
Contractually required contribution 4,648,909 4,850,246 5,372,729 6,043,172 Contributions in relation to the actuarially
determined contributions (4,648,909) (4,850,246) (5,372,729) (6,043,172) Contribution deficiency (excess) - - - -
Covered payroll 20,531,347 21,939,351 22,534,340 23,372,558 Contributions as a percentage of covered
payroll 22.64% 22.11% 23.84% 25.86%
Notes to Schedule
Valuation date: 6/30/21
Methods and assumptions used to determine contribution rates:

Discount Rate 6.90% @ 6/30/2022

7.15% @ 6/30/2021

7.15% @ 6/30/2020

7.15% @ 6/30/2019

7.15% @ 6/30/2018

7.15% @ 6/30/2017

7.65% @ 6/30/2016

7.65% @ 6/30/2015

7.50% @ 6/30/2014
Inflation
Salary increases Varies by Entry Age and Service
Investment rate of return
Mortality Rate Table (1)
Post Retirement Benefit Increase
* Fiscal year 2015 was the 1st year of implementation.

CITY OF WATSONVILLE, CALIFORNIA

SCHEDULE OF CONTRIBUTIONS
LAST NINE FISCAL YEARS*
JUNE 30, 2023
(1) The probabilities of mortality are based on the CalPERS Experience Study. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries for 2015 to 2018. For 2019 to 2023, pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.

2.75% for 2015 to 2019, 2.625% for 2020, and 2.50% for 2021 to 2023

7.50% for 2015 to 2018, 7.375% for 2019, 7.25% for 2020, and 7.00% for 2021 to 2023, net of pension plan investment expenses, including inflation.

Derived using CalPERS' Membership Data for all Funds
Contract COLA up to 2.50% until Purchasing Power
Protection Allowance Floor on Purchasing Power applies,

2.50% thereafter.
102
Attachment B

Page 412 of 509 ends

The following table provides required supplementary information regarding the City's Safety Pension Plan:
2014 2015 2016 2017 2018
$$$$$
Proportion of the net pension liability 0.358953% 0.379737% 0.387650% 0.388914% 0.666691% Proportionate share of the net pension liability 26,064,837 22,335,737 33,543,690 38,569,604 39,118,450 Covered payroll 10,541,326 9,190,095 9,792,080 11,557,360 11,496,504 Proportionate share of the net pension liability as
percentage of covered payroll 211.89% 283.62% 342.56% 333.72% 340.26% Plan's total pension liability 30,829,966,631 31,771,217,402 18,961,274,094 21,144,800,930 22,053,702,155 Plan fiduciary net position 24,607,502,515 24,907,305,871 13,782,056,004 15,169,595,595 16,186,149,467 Plan fiduciary net position as a percentage of the
total pension liability 79.82% 78.40% 72.69% 71.74% 73.39% The following table provides required supplementary information regarding the City's Safety Pension Plan:
2019 2020 2021 2022
Proportion of the net pension liability $$$

0.679156% 0.697883% 0.826850% 0.787620%
Proportionate share of the net pension liability
42,396,602 46,495,443 29,018,195 54,122,250
Covered payroll
11,783,799 12,765,651 12,422,544 13,235,291
Proportionate share of the net pension liability as
percentage of covered payroll
359.79% 364.22% 233.59% 408.92%
Plan's total pension liability
23,442,265,225 24,782,493,361 172,165,293 186,461,648
Plan fiduciary net position
17,199,726,799 18,120,140,152 143,147,098 132,339,398
Plan fiduciary net position as a percentage of the
total pension liability 73.37% 73.12% 83.15% 70.97%
Notes to Schedule:
* Fiscal year 2015 was the 1st year of implementation. Years will be added until 10 years of data is reached.

CITY OF WATSONVILLE, CALIFORNIA

SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY LAST NINE FISCAL YEARS*
JUNE 30, 2023

103
Attachment B

Page 413 of 509 ends

The following table provides required supplementary information regarding the City's Safety Pension Plan:
2015 2016 2017 2018 2019
$$$$$
Actuarially determined contribution 2,921,288 2,648,853 3,364,471 3,606,866 3,940,104 Contributions in relation to the actuarially
determined contributions (2,921,288) (2,648,853) (3,364,471) (3,606,866) (4,006,904) Contribution deficiency (excess) - - - - (66,800)
Covered payroll 9,190,095 9,792,080 11,557,360 11,496,504 11,783,799 Contributions as a percentage of covered payroll 28.82% 29.83% 29.11% 31.37% 34.00% 2020 2021 2022 2023
$$$$
Actuarially determined contribution 4,649,154 5,129,097 5,742,501 6,231,309 Contributions in relation to the actuarially
determined contributions (4,699,442) (5,129,097) (5,742,501) (6,231,309) Contribution deficiency (excess) (50,288) - - -
Covered payroll 12,765,651 12,422,544 13,235,291 11,555,278 Contributions as a percentage of covered payroll 36.81% 41.29% 43.39% 53.93% Notes to Schedule
Valuation date: 6/30/21
Methods and assumptions used to determine contribution rates:

Discount Rate 6.90% @ 6/30/2022

7.15% @ 6/30/2021

7.15% @ 6/30/2020

7.15% @ 6/30/2019

7.15% @ 6/30/2018

7.15% @ 6/30/2017

7.65% @ 6/30/2016

7.65% @ 6/30/2015

2.75% for 2015 to 2019, 2.625% for
2020, 2.50% for 2021 & 2022, and

2.30% for 2023

CITY OF WATSONVILLE, CALIFORNIA

SCHEDULE OF CONTRIBUTIONS
LAST NINE FISCAL YEARS*
JUNE 30, 2023
Contract COLA up to 2.50% until
Purchasing Power Protection Allowance
Floor on Purchasing Power applies,

2.50% thereafter.

7.50% for 2015 to 2018, 7.375% for
2019, 7.25% for 2020, and 7.00% for
2021 to 2023, net of pension plan
investment expenses, including
Derived using CalPERS' Membership
Data for all Funds
(1) The probabilities of mortality are based on the CalPERS Experience Study. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries for 2015 10 2018. For 2019 to 2022, pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.
104
Attachment B

Page 414 of 509 ends

This Page Left Intentionally Blank
Attachment B

Page 415 of 509 ends

City of Watsonville, California
Nonmajor Governmental Funds
Special Revenue Funds
Gas Tax
The City of Watsonville receives various revenues from taxes imposed on the sale of gasoline.

These funds are to be used for maintaining and improving Watsonville's roads and transportation system.

Narcotics Assets Seizure
Federal and State law authorize the seizure of assets used in the sale of illegal drugs. The proceeds from these seizures are to be used to further Police enforcement. These monies are accounted for in this fund.

Business Development
This fund collects a business license surcharge and downtown property tax assessment which is then remitted to the Chamber of Commerce and Economic Development for their respective purposes.

Economic Development
Funds held for economic development. The fund receives interest income and loan payoffs that are used to support economic development.

Library
The Library Fund receives sales tax, grants, donations and state subventions for the advancement of the Library in Watsonville. This fund receives such revenues and records their expenditures.

Parks Development
This fund's revenues are grants, park development impact fees and 1972 Landscape and Lighting Assessment fees. These funds are used to acquire, improve and maintain the government’s parks.

Retirement Tax
The City of Watsonville participates in the California Public Employees Retirement System.

The government's contribution for General Fund employees is funded by a voter approved property tax override. The tax is collected in this fund and then used to pay for appropriate retirement expenses.
(Continued)
106
Attachment B

Page 416 of 509 ends

City of Watsonville, California
Nonmajor Governmental Funds
Special Revenue Funds
Parking Garage
This fund is used to record operating costs used to maintain the government’s parking garage downtown.

Measure G /Y
This fund was established in 2014, the Citizens of Watsonville approved an additional sales tax of .5% for seven years to increase funding for public safety.

Abandoned Vehicle
The government has assigned a Watsonville Police Department Service Specialist to aggressively enforce all State laws and City of Watsonville Ordinances pertaining to the abatement of all abandoned, wrecked, dismantled, inoperative vehicles or parts from any and all private or public properties. This fund collects State and County funds used to pay for these services.

Inclusionary Housing
The government levies an impact fee on all market rate housing development, which either requires a specified number of below market housing units be created or the payment of a fee.

This fund collects those fees and uses them to create low-income housing.

SB 1 Gas Tax
This fund was established in 2017, which increased the gas tax by $0.12 per gallon, increased the diesel fuel tax by $0.20 per gallon, increased the sales tax on diesel fuels by an additional 4 percentage points, created an annual transportation improvement fee, and created an annual zeroemission vehicles fee.

Measure D
This fund was established in 2017, Measure D is a comprehensive and inclusive package of transportation improvements passed in November 2016 by over 2/3 of Santa Cruz County voters.

This ½-cent sales tax guarantees every city and the county a steady, direct source of local funding for local streets and road maintenance, bicycle and pedestrian projects (especially near schools), safety projects, and transit and paratransit service, as well as numerous essential transportation projects and programs throughout the county. (Concluded)
107
Attachment B

Page 417 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NONMAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
JUNE 30, 2023

NARCOTICS

GAS ASSETS BUSINESS ECONOMIC PARKS RETIREMENT

TAX SEIZURE DEVELOPMENT DEVELOPMENT LIBRARY DEVELOPMENT TAX $$ $ $ $ $ $
ASSETS:

Cash and investments 1,000,568 202,898 294,726 30,801 2,025,581 1,762,731 487,169 Receivables:

Interest - - - 47,770 - - -
Taxes 113,192 - - - - - 205,103
Accounts 400 - 2,447 - 348,640 10,540 -
Intergovernmental 303,231 - - - - - -
Advances receivable - - - - 12,719 5,858 -
Loans receivable - - - 50,324 - - -
Total Assets 1,417,391 202,898 297,173 128,895 2,386,940 1,779,129 692,272 LIABILITIES:

Accounts payable 142,254 1,790 - - 45,140 402,247 -
Accrued personnel costs 8,478 - - - - 1,792 -
Retentions payable - - - - - 43,741 -
Unearned revenue - - - - - - -
Deposits payable - - - - - - -
Due to other funds - - - - - - -
Total Liabilities 150,732 1,790 - - 45,140 447,780 -
Deferred Inflows of Resources
Unavailable revenue 303,231 - 10,720 98,094 - - -
Total Deferred Inflows of Resources 303,231 - 10,720 98,094 - - - Fund Balances:

Restricted for:

Assets seizure - 201,108 - - - - -
Business development - - 286,453 - - - -
Economic development - - - 30,801 - - -
Library - - - - 2,341,800 - -
Parks development - - - - - 1,331,349 -
Retirement tax - - - - - - 692,272
Measure G/Y - - - - - - -
Inclusionary housing - - - - - - -
SB1 gas tax 963,428 - - - - - -
Measure D - - - - - - -
Unassigned - - - - - - -
Total Fund Balances 963,428 201,108 286,453 30,801 2,341,800 1,331,349 692,272 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 1,417,391 202,898 297,173 128,895 2,386,940 1,779,129 692,272 Continued
Special Revenue Funds
108
Attachment B

Page 418 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NONMAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
JUNE 30, 2023
PARKING ABANDONED INCLUSIONARY SB 1

GARAGE MEASURE G/Y VEHICLE HOUSING GAS TAX MEASURE D TOTAL $ $$ $ $ $
ASSETS:

Cash and investments 541 2,769,007 49,892 642 2,733,195 4,307,183 15,664,934 Receivables:

Interest - - - 189,494 - - 237,264
Taxes - 870,209 - - 103,702 87,124 1,379,330
Accounts 7,618 - - - - - 369,645
Intergovernmental - 13,909 - 3,844 - - 320,984
Advances receivable - - - - - - 18,577
Loans receivable - - - 1,605,038 - - 1,655,362
Total Assets 8,159 3,653,125 49,892 1,799,018 2,836,897 4,394,307 19,646,096 LIABILITIES:

Accounts payable 15,358 298,648 - 3,982 27,789 56,116 993,324 Accrued personnel costs - 57,460 - - - - 67,730
Retentions payable - 5,375 - - 10,042 - 59,158
Unearned revenue - - - 3,844 - - 3,844
Deposits payable - - - - - - -
Due to other funds 327,280 - - - - - 327,280
Total Liabilities 342,638 361,483 - 7,826 37,831 56,116 1,451,336 Deferred Inflows of Resources
Unavailable revenue - 13,909 - 1,794,532 - - 2,220,486
Total Deferred Inflows of Resources - 13,909 - 1,794,532 - - 2,220,486 Fund Balances:

Restricted for:

Assets seizure - - - - - - 201,108
Business development - - - - - - 286,453
Economic development - - - - - - 30,801
Library - - - - - - 2,341,800
Parks development - - - - - - 1,331,349
Retirement tax - - - - - - 692,272
Measure G/Y - 3,277,733 - - - - 3,277,733
Abandoned vehicle - - 49,892 - - - 49,892
Inclusionary housing - - - - - -
SB1 gas tax - - - - 2,799,066 - 3,762,494
Measure D - - - - - 4,338,191 4,338,191
Unassigned (334,479) - - (3,340) - - (337,819)
Total Fund Balances (334,479) 3,277,733 49,892 (3,340) 2,799,066 4,338,191 15,974,274 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 8,159 3,653,125 49,892 1,799,018 2,836,897 4,394,307 19,646,096 Concluded
Special Revenue Funds
109
-
Attachment B

Page 419 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NONMAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NARCOTICS

GAS ASSETS BUSINESS ECONOMIC PARKS RETIREMENT

TAX SEIZURE DEVELOPMENT DEVELOPMENT LIBRARY DEVELOPMENT TAX $$ $ $ $ $ $
REVENUES:

Taxes - - - - 4,047,668 - 4,034,825
Licenses, permits and fees - - 108,679 - 10,182 223,855 - Intergovernmental 1,294,508 - - - 66,159 - -
Charges for services - - - - - - -
Interest 34,686 8,216 12,180 - 85,766 81,878 -
Miscellaneous - 30,559 - 2,391 12,803 - -
Total revenues 1,329,194 38,775 120,859 2,391 4,222,578 305,733 4,034,825 EXPENDITURES:

Current:

General government - - 16,777 - - - -
Public safety - 24,369 - - - - -
Housing - - - - - - -
Streets 1,171,933 - - - - - -
Culture and recreation - - - - 3,698,632 1,208,970 -
Total expenditures 1,171,933 24,369 16,777 3,698,632 - 1,208,970 - Excess (deficiency) of revenues over
(under) expenditures 157,261 14,406 104,082 2,391 523,946 (903,237) 4,034,825 OTHER FINANCING SOURCES (USES):

Transfers in - - - - - - -
Transfers (out) - - (24,900) (159,283) - (3,870,308) -
Total other financing sources (uses) - - (24,900) (159,283) - (3,870,308) - Net change in fund balances 157,261 14,406 79,182 2,391 364,663 (903,237) 164,517 Fund balances, July 1 806,167 186,702 207,271 28,410 1,977,137 2,234,586 527,755 Fund balances, June 30 963,428 201,108 286,453 30,801 2,341,800 1,331,349 692,272 Continued
Special Revenue Funds
110
Attachment B

Page 420 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NONMAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE FISCAL YEAR ENDED JUNE 30, 2023
PARKING ABANDONED INCLUSIONARY SB 1

GARAGE MEASURE G/Y VEHICLE HOUSING GAS TAX MEASURE D TOTAL $ $ $ $ $$$
REVENUES:

Taxes - 5,151,026 - - 1,143,906 976,825 15,354,250
Licenses, permits and fees 139,425 36,734 87,810 - - - 606,685 Intergovernmental - - - - - - 1,360,667
Charges for services - - - 4,650 - - 4,650
Interest - 122,630 - 1,499 90,843 156,647 594,345
Miscellaneous 167 - - 1,500 - - 47,420
Total revenues 139,592 5,310,390 87,810 7,649 1,234,749 1,133,472 17,968,017 EXPENDITURES:

Current:

General government 159,010 - - - - - 175,787
Public safety - 5,240,015 60,000 - - - 5,324,384
Housing - - - 177,069 - - 177,069
Streets - - - - 390,061 360,950 1,922,944
Culture and recreation - - - - - - 4,907,602
Total expenditures 159,010 5,240,015 60,000 177,069 390,061 360,950 12,507,786 Excess (deficiency) of revenues over
(under) expenditures (19,418) 70,375 27,810 (169,420) 844,688 772,522 5,460,231 OTHER FINANCING SOURCES (USES):

Transfers in 93,195 - - - - 93,195 -
Transfers (out) (26,340) (286,307) - - - (4,367,138) -
Total other financing sources (uses) 66,855 (286,307) - - - (4,273,943) - Net changes in fund balances 47,437 (215,932) 27,810 (169,420) 844,688 772,522 1,186,288 Fund balances, July 1 (381,916) 3,493,665 22,082 166,080 1,954,378 3,565,669 14,787,986 Fund balances, June 30 (334,479) 3,277,733 49,892 (3,340) 2,799,066 4,338,191 15,974,274 Concluded
Special Revenue Funds
111
Attachment B

Page 421 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NONMAJOR SPECIAL REVENUE FUNDS

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance With Variance With
Final Budget - Final Budget -
Positive Positive
Original Final Actual (Negative) Original Final Actual (Negative) $ $ $ $ $ $$ $
REVENUES:

Taxes - - - - - - - -
Intergovernmental 1,310,139 1,294,508 1,294,508 - - - - - Interest 4,200 34,686 34,686 1,500 - 8,216 8,216 -
Miscellaneous - - - 10,000 - 30,559 30,559 -
Total revenues 1,314,339 1,329,194 1,329,194 11,500 - 38,775 38,775 - EXPENDITURES:

Public safety - - - 11,500 - 24,369 24,369 -
Streets 1,599,477 1,171,933 1,171,933 - - - - -
Total expenditures 1,599,477 1,171,933 1,171,933 11,500 - 24,369 24,369 - Net changes in fund balances (285,138) 157,261 157,261 - 14,406 - 14,406 - Fund balances, July 1 (as restated) 806,167 806,167 806,167 186,702 - 186,702 186,702 - Fund balances, June 30 521,029 963,428 963,428 186,702 - 201,108 201,108 - Budgeted Amounts

GAS TAX NARCOTICS ASSETS SEIZURE
Budgeted Amounts
112
Attachment B

Page 422 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NONMAJOR SPECIAL REVENUE FUNDS

Licenses, permits and fees 85,000 108,679 108,679 - - - - - Interest 12,180 1,425 12,180 - - - - -
Miscellaneous 6,000 - - - - 2,391 - 2,391
Total revenues 120,859 92,425 120,859 - - 2,391 - 2,391 EXPENDITURES:

Current:

General government 73,000 16,777 16,777 - - - - -
Total expenditures 73,000 16,777 16,777 - - - - -
Excess (deficiency) of revenues over
(under) expenditures 104,082 19,425 104,082 - - 2,391 - 2,391 OTHER FINANCING SOURCES (USES):

Transfers (out) (24,900) (24,900) (24,900) - - - - -
Total other financing sources (uses) (24,900) (24,900) (24,900) - - - - - Net changes in fund balances (5,475) 79,182 79,182 - - 2,391 - 2,391 Fund balances, July 1 207,271 207,271 207,271 28,410 - 28,410 28,410 - Fund balances, June 30 201,796 286,453 286,453 28,410 - 28,410 30,801 2,391 Budgeted Amounts

BUSINESS DEVELOPMENT ECONOMIC DEVELOPMENT
Budgeted Amounts
113
Attachment B

Page 423 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NONMAJOR SPECIAL REVENUE FUNDS

Taxes 3,675,752 3,699,028 4,047,668 348,640 - - - -
Licenses, permits and fees 32,000 10,182 10,182 - - - 223,855 223,855 Intergovernmental 43,000 66,159 66,159 - - - - -
Interest 20,000 85,766 85,766 - - - 81,878 81,878
Miscellaneous 12,000 12,803 12,803 - - - - -
Total revenues 3,782,752 3,873,938 4,222,578 348,640 - - 305,733 305,733 EXPENDITURES:

Current:

Culture and recreation 3,730,061 3,698,632 3,698,632 - 1,229,443 1,208,970 1,208,970 - Total expenditures 3,730,061 3,698,632 3,698,632 - 1,229,443 1,208,970 1,208,970 - Excess (deficiency) of revenues over
(under) expenditures 52,691 175,306 523,946 348,640 (1,229,443) (1,208,970) (903,237) 305,733 OTHER FINANCING SOURCES (USES):

Transfers (out) (159,283) (159,283) (159,283) - - - - - Total other financing sources (uses) (159,283) (159,283) (159,283) - - - - - Net change in fund balances (106,592) 16,023 364,663 348,640 (1,229,443) (1,208,970) (903,237) 305,733 Fund balances, July 1 1,977,137 1,977,137 1,977,137 2,234,586 - 2,234,586 2,234,586 - Fund balances, June 30 1,870,545 1,993,160 2,341,800 348,640 1,005,143 1,025,616 1,331,349 305,733

LIBRARY PARKS DEVELOPMENT
Budgeted Amounts Budgeted Amounts
114
Attachment B

Page 424 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NONMAJOR SPECIAL REVENUE FUNDS

Taxes 3,873,308 4,034,825 4,034,825 - - - - -
Licenses, permits, and fees - - - - 162,000 139,425 139,425 - Miscellaneous - - - - - 167 167 -
Total revenues 3,873,308 4,034,825 4,034,825 - 162,000 139,592 139,592 - EXPENDITURES:

Current:

General government - - - - 183,994 159,010 159,010 -
Total expenditures - - - - 183,994 159,010 159,010 -
Excess (deficiency) of revenues over
(under) expenditures 3,873,308 4,034,825 4,034,825 - (21,994) (19,418) (19,418) - OTHER FINANCING SOURCES (USES):

Transfers in - - - - 93,195 93,195 93,195 -
Transfers (out) (3,873,308) (3,870,308) (3,870,308) - (19,010) (26,340) (26,340) - Total other financing sources (uses) (3,873,308) (3,870,308) (3,870,308) - 74,185 66,855 66,855 - Net change in fund balances 164,517 - 164,517 52,191 - 47,437 47,437 - Fund balances, July 1 527,755 527,755 527,755 (381,916) - (381,916) (381,916) - Fund balances, June 30 527,755 692,272 692,272 (329,725) - (334,479) (334,479) -

RETIREMENT TAX
Budgeted Amounts

PARKING GARAGE
Budgeted Amounts
115
Attachment B

Page 425 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NONMAJOR SPECIAL REVENUE FUNDS

Taxes 2,772,496 5,151,026 5,151,026 - - - - -
Licenses, permits and fees 36,734 100 36,734 60,000 - 87,810 87,810 - Interest 35,000 122,630 122,630 - - - - -
Total revenues 2,807,596 5,310,390 5,310,390 60,000 - 87,810 87,810 - EXPENDITURES:

Current:

Public safety 2,788,767 5,240,015 5,240,015 61,800 - 60,000 60,000 - Total expenditures 2,788,767 5,240,015 5,240,015 61,800 - 60,000 60,000 - Excess (deficiency) of revenues over
(under) expenditures 18,829 70,375 70,375 (1,800) - 27,810 27,810 - OTHER FINANCING SOURCES (USES):

Transfers (out) (286,307) (286,307) (286,307) - - - - - Total other financing sources (uses) (286,307) (286,307) (286,307) - - - - - Net change in fund balances (267,478) (215,932) (215,932) (1,800) - 27,810 27,810 - Fund balances, July 1 3,493,665 3,493,665 3,493,665 22,082 - 22,082 22,082 - Fund balances, June 30 3,226,187 3,277,733 3,277,733 20,282 - 49,892 49,892 - Budgeted Amounts Budgeted Amounts

MEASURES G/Y ABANDONED VEHICLE
116
Attachment B

Page 426 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NONMAJOR SPECIAL REVENUE FUNDS

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance With Variance With
Final Budget - Final Budget -
Positive Positive
Original Final Actual (Negative) Original Final Actual (Negative) $ $ $ $ $$ $ $
REVENUES:

Taxes - - - 1,143,906 - 1,143,906 1,143,906 -
Licenses, permits and fees - - - - - - - -
Charges for services 127,000 4,650 4,650 - - - - -
Interest - 1,499 1,499 90,843 - 90,843 90,843 -
Miscellaneous - 1,500 1,500 - - - - -
Total revenues 127,000 7,649 7,649 1,234,749 - 1,234,749 1,234,749 - EXPENDITURES:

Current:

Housing 648,681 177,069 177,069 - - - - -
Streets - - - 390,061 - 390,061 390,061 -
Total expenditures 648,681 177,069 177,069 390,061 - 390,061 390,061 - Excess (deficiency) of revenues over
(under) expenditures (521,681) (169,420) (169,420) 844,688 - 844,688 844,688 - OTHER FINANCING SOURCES (USES):

Transfers (out) (50,000) - - - - - - -
Total other financing sources (uses) (50,000) - - - - - - - Net changes in fund balances (571,681) (169,420) (169,420) 844,688 - 844,688 844,688 - Fund balances, July 1 166,080 166,080 166,080 1,954,378 - 1,954,378 1,954,378 - Fund balances, June 30 (405,601) (3,340) (3,340) 2,799,066 - 2,799,066 2,799,066 - Budgeted Amounts
INCLUSIONARY HOUSING SB 1 - GAS TAX
Budgeted Amounts
117
Attachment B

Page 427 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

NONMAJOR SPECIAL REVENUE FUNDS

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance With
Final Budget -
Positive
Original Final Actual (Negative)
$ $$ $
REVENUES:

Taxes 889,701 889,701 976,825 87,124
Interest 156,647 156,647 156,647 -
Total revenues 1,046,348 1,046,348 1,133,472 87,124
EXPENDITURES:

Current:

Streets 360,950 360,950 360,950 -
Total expenditures 360,950 360,950 360,950 -
Excess (deficiency) of revenues over
(under) expenditures 685,398 685,398 772,522 87,124
Net change in fund balance 685,398 685,398 772,522 87,124 Fund balance, July 1 3,565,669 3,565,669 3,565,669 -
Fund balance, June 30 4,251,067 4,251,067 4,338,191 87,124

MEASURE D
Budgeted Amounts
118
Attachment B

Page 428 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA

DEBT SERVICE FUND

SCHEDULE OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance With
Final Budget -
Positive
Original Final Actual (Negative)
$$$ $
REVENUES:

Intergovernmental - - - -
Total revenues - - - -
EXPENDITURES:

Debt service:

Principal 781,123 781,123 781,123 -
Interest and fiscal charges 32,308 33,070 33,070 -
Total expenditures 813,431 814,193 814,193 -
Excess (deficiency) of revenues over
(under) expenditures (813,431) (814,193) (814,193) -
OTHER FINANCING SOURCES (USES):

Transfers in 832,765 832,765 892,498 59,733
Total other financing sources (uses) 832,765 832,765 892,498 59,733 Net change in fund balance 19,334 18,572 78,305 59,733
Fund balance, July 1 245,989 245,989 245,989 -
Fund balance, June 30 265,323 264,561 324,294 59,733
Budgeted Amounts
119
Attachment B

Page 429 of 509 ends

This Page Left Intentionally Blank
Attachment B

Page 430 of 509 ends

STATISTICAL SECTION
This part of the City of Watsonville’s comprehensive annual financial report presents detailed information as a context for the understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health.

Contents Page
Financial Trends 123
These schedules contain trend information to help the reader understand how the city’s financial performance and well-being have changed over time.

Revenue Capacity 128
These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax.

Debt Capacity 133
These schedules present information to help the reader assess the affordability of the city’s current levels of outstanding debt and the city’s ability to issue additional debt in the future.

Demographic and Economic Information 137
These schedules offer the demographic and economic indicators to help the reader understand the environment within which the city’s financial activities take place.

Operating Information 140
These schedules contain service and infrastructure data to help the reader understand how the information in the city’s financial report relates to the services the city provides and the activities it performs.

SOURCE: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.
121
Attachment B

Page 431 of 509 ends

This Page Left Intentionally Blank
Attachment B

Page 432 of 509 ends

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ $ $ $ $ $ $ $ $ $
Governmental activities
Net investment in capital assets 118,302 114,148 110,806 111,256 108,892 110,033 109,660 108,607 111,205 113,121 Restricted 42,945 44,188 16,754 16,496 19,849 19,803 8,803 24,412 27,012 27,082 Unrestricted (2,634) (39,888) (7,184) (3,294) 475 (1,797) 6,712 (4,162) (4,102) 3,333 Total governmental activities net position 158,613 118,448 120,376 124,458 129,216 128,039 125,175 128,857 134,115 143,536 Business-type activities
Net investment in capital assets 99,277 98,484 94,655 96,034 95,782 92,296 97,119 93,904 96,016 100,264 Restricted - - - - - - - - - -
Unrestricted 10,865 (2,581) 2,587 5,524 9,085 20,058 19,821 27,642 34,895 43,746 Total business-type activities net position 110,142 95,903 97,242 101,558 104,867 112,354 116,940 121,546 130,911 144,010 Primary government
Net investment in capital assets 217,579 212,632 205,461 207,290 204,674 202,329 206,779 202,511 207,222 213,386 Restricted 42,945 44,188 16,754 16,496 19,849 19,803 22,228 24,412 27,012 27,082 Unrestricted 8,231 (42,469) (4,597) 2,230 9,560 18,261 13,109 23,480 30,793 47,079 Total primary government net position 268,755 214,351 217,618 226,016 234,083 240,393 242,116 250,403 265,027 287,547 Fiscal Year

CITY OF WATSONVILLE, CALIFORNIA
Net Position By Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
123
Attachment B

Page 433 of 509 ends

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ $ $ $ $ $ $ $ $ $
Expenses:

Governmental activities:

General government 11,773 5,494 7,151 8,257 7,032 15,143 13,812 8,599 12,246 17,339 Public safety 23,020 25,716 27,751 27,382 30,972 31,221 35,811 35,608 33,149 35,379 Housing 820 1,298 1,389 2,318 1,158 2,289 2,059 24,412 3,255 1,191 Highways and streets 6,708 4,697 3,043 6,348 5,974 8,561 6,931 8,652 6,050 3,894 Culture and recreation 7,334 7,916 8,613 7,817 8,591 9,152 9,850 (4,162) 10,264 12,398 Interest on long term debt 189 132 112 146 158 491 78 123 42 35 Total government activities 49,844 45,253 48,059 52,268 53,885 66,857 68,541 73,232 65,006 70,236 Business-type activities:

Water 11,001 11,583 15,537 13,851 12,038 13,996 19,378 15,960 16,095 16,473 Sewer 9,298 10,741 10,731 10,272 13,175 14,195 14,099 14,190 13,633 14,509 Solid Waste 8,699 10,136 9,181 10,976 12,758 11,925 12,567 19,189 14,355 15,640 Airport 2,888 2,580 2,225 2,684 3,382 5,118 3,803 4,235 4,470 3,974 Fiber Optic - - 8 41 46 68 59 69 64 62
Total business-type activities 31,886 35,040 37,682 37,824 41,399 45,302 49,906 53,643 48,617 50,658 Total primary government 81,730 80,293 85,741 90,092 95,284 112,159 118,447 126,875 113,623 120,894 Program Revenues:

Governmental activities:

Charges for services:

General government 9,249 5,488 5,524 8,426 8,285 12,233 8,649 9,181 9,420 13,642 Public safety 1,549 1,396 1,853 1,780 1,875 822 874 821 777 914 Housing 1,619 391 - 675 289 866 782 667 1,269 134
Highways and streets 2,501 1,585 1,858 2,284 2,663 1,057 799 64 34 244 Culture and recreation 827 1,330 833 952 1,189 1,244 832 606 669 479 Operating grants and contributions 2,657 2,393 3,590 3,310 2,772 2,501 5,988 5,100 3,541 3,621 Capital grants and contributions - - - - - - - - - -
Total governmental activates program revenues 18,402 12,583 13,658 17,427 17,073 18,723 17,924 16,439 15,710 19,034 Business-type activities:

Charges for services:

Water 12,363 12,075 12,756 14,617 15,243 17,358 20,484 19,885 21,045 22,041 Sewer 10,864 10,046 14,307 12,069 12,475 13,444 14,153 15,119 16,366 18,226 Solid Waste 9,580 10,471 10,746 11,225 12,549 13,493 14,587 18,310 16,116 16,946 Airport 1,844 1,956 2,159 1,937 2,576 5,595 3,713 2,432 2,706 2,799 Fiber Optic - - 23 44 43 45 74 609 94 140
Operating grants and contributions 603 901 759 1,373 1,430 2,016 796 732 (20) 465 Capital grants and contributions 1,156 590 659 1,104 311 94 163 107 489 49 Total business-type activities program revenues 36,410 36,039 41,409 42,369 44,627 52,045 53,970 57,194 56,796 60,666 Continued
Fiscal Year

CITY OF WATSONVILLE, CALIFORNIA
Changes In Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
124
Attachment B

Page 434 of 509 ends

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ $ $ $ $ $ $ $ $ $
Net (expense) / revenue
Governmental activities (31,442) (32,670) (34,401) (34,840) (37,564) (48,134) (50,655) (46,217) (49,359) (51,409) Business-type activities 4,525 999 3,727 4,544 3,227 6,744 4,065 3,551 8,179 10,008 Total primary government net expense (26,917) (31,671) (30,674) (30,296) (34,337) (41,390) (46,590) (42,666) (41,180) (41,401) General Revenues and Other Changes
in Net Position
Governmental activities:

Taxes
Property taxes 12,090 11,868 12,846 13,300 13,436 15,669 16,243 16,169 16,977 17,802 Sales taxes 11,436 13,988 16,693 16,083 18,393 19,369 19,075 22,232 24,408 25,337 Utility users taxes 3,029 3,437 3,183 3,679 4,019 4,011 4,265 3,994 4,144 4,358 Franchise taxes 365 404 456 471 436 460 458 563 538 572 Other taxes 1,120 1,295 1,457 1,792 2,060 3,125 2,906 2,610 3,618 3,694 Intergovernmental revenue not restricted 1,686 1,475 1,120 1,009 1,048 1,021 1,139 1,434 1,727 3,963 Transfers 211 226 232 308 270 272 251 246 284 285
Unrestricted investment earnings 1,890 1,916 2,098 2,218 2,660 3,030 3,416 2,531 2,857 4,449 Other revenue - - - - - - - - - 31
Total governmental activities 31,827 34,609 38,085 38,860 42,322 46,957 47,753 49,779 54,553 60,491 Business-type activities:

Transfers (284) (285)
Other Revenue
(211) (226) (231) (308) (270) (272) (251) (246)
1,296 1,151
Unrestricted investment earnings 263 269 201 206 352 1,014 811 70 239 2,431 Total business-type activities 52 43 -30 (102) 82 742 560 1,098 1,251 3,297 Total primary government 31,879 34,652 38,055 38,758 42,404 47,699 48,313 50,877 55,804 63,788 Change in net position before extraordinary item
Governmental activities 385 1,939 3,683 4,020 4,758 (1,177) (2,863) 3,605 5,258 9,289 Business-type activities 4,577 1,043 3,696 4,442 3,309 7,486 4,586 4,606 9,366 13,099 Total primary government 4,962 2,982 7,379 8,462 8,067 6,309 1,723 8,211 14,624 22,388 Extraordinary items
Governmental activities - - - - - - - - - -
Total primary government - - - - - - - - - -
Change in net position
Governmental activities 385 1,939 3,683 4,020 4,758 (1,177) (2,863) 3,605 5,258 9,289 Business-type activities 4,577 1,043 3,696 4,442 3,309 7,486 4,586 4,606 9,366 13,099 Total primary government 4,962 2,982 7,379 8,462 8,067 6,309 1,723 8,211 14,624 22,388 Concluded

CITY OF WATSONVILLE, CALIFORNIA
Fiscal Year
(amounts expressed in thousands)
(accrual basis of accounting)
Last Ten Fiscal Years
Changes In Net Position
- - - -
- - - 1,274
125
Attachment B

Page 435 of 509 ends

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ $ $ $ $ $ $ $ $ $
General fund
Nonspendable 56 35 3,365 2,965 2,588 123 114 308 147 -
Restricted - - - - - - - - - -
Unassigned 1,881 4,595 4,228 6,057 10,342 13,144 16,478 18,253 18,228 21,626 Total general fund 1,937 4,630 7,593 9,022 12,930 13,267 16,592 18,561 18,375 21,626 All other governmental funds
Restricted, reported in
Special revenue funds 12,021 14,566 18,216 17,880 20,926 20,607 22,465 24,778 27,107 27,096 Debt service funds 79 72 125 131 123 129 238 247 246 324 Unassigned (910) (1,069) (770) (740) (728) (615) (475) (404) (381) (338) Total all other governmental funds 11,190 13,569 17,571 17,271 20,321 20,121 22,228 24,621 26,972 27,082 Fiscal Year

CITY OF WATSONVILLE, CALIFORNIA
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
126
Attachment B

Page 436 of 509 ends

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ $ $ $ $ $ $ $ $ $
Revenues
Taxes 29,725 32,466 35,754 36,198 39,392 43,655 42,029 45,583 49,693 51,763 Licenses, permits, and fees 4,855 5,248 5,795 5,885 6,642 5,971 5,315 3,378 5,848 3,204 Intergovernmental 3,032 2,458 3,336 3,410 3,455 3,417 9,167 5,734 5,735 7,891 Charges for services 2,447 2,458 2,945 2,770 3,224 3,072 3,534 3,396 3,523 3,915 Fines 622 552 690 737 723 708 24,412 462 593 530
Interest 2,084 2,076 2,168 2,435 2,869 3,405 3,280 2,529 2,844 4,282 Special assessment 92 91 77 60 58 50 (4,162) - - -
Miscellaneous 825 1,995 2,810 1,871 2,491 3,007 3,826 3,940 3,785 8,177 Total revenues 43,682 47,344 53,575 53,366 58,854 63,285 87,401 65,022 72,021 79,762 Expenditures
Current:

General government 10,447 5,574 6,989 7,556 7,978 13,062 11,330 10,089 14,262 19,000 Public safety 20,406 22,707 24,860 24,271 26,744 30,459 30,543 30,012 33,544 34,910 Housing 820 1,298 1,389 2,318 1,158 2,289 2,059 4,159 3,057 1,191 Streets 5,972 4,252 1,672 5,772 5,385 8,759 8,911 7,827 8,770 8,972 Culture and recreation 6,505 7,172 7,090 7,079 7,837 9,406 9,076 8,297 9,383 11,601 Debt service:

Principal 439 495 429 478 463 730 797 2,391 785 976
Interest and fiscal charges 195 159 183 173 161 220 82 147 49 37 Total expenditures 46,365 42,474 45,898 52,480 49,726 64,925 62,798 62,922 69,850 76,687 Excess (deficiency) of revenues
over (under) expenditures (2,683) 4,870 7,677 886 9,128 (1,640) 24,603 2,100 2,171 3,075 Other financing sources (uses)
Bond/note proceeds 191 - - - - 1,541 144 1,649 - -
Transfers in 3,238 3,340 3,692 3,562 4,464 5,457 4,750 6,171 4,795 5,310 Transfers out (3,309) (3,150) (3,496) (3,290) (4,230) (5,222) (4,535) (5,926) (4,510) (5,025) Total other financing sources (uses) 120 190 196 272 234 1,776 359 1,894 285 285 Net change in fund balances before
extraordinary items (2,563) 5,060 7,873 1,158 9,362 136 24,962 3,995 2,456 3,360 Extraordinary items - - - - - - - - - -
Net change in fund balances (2,563) 5,060 7,873 1,158 9,362 136 24,962 3,995 2,456 3,360 Debt service as a percentage of ** **
noncapital expenditures 4.1% 1.4% 1.6% 1.5% 1.4% 1.5% 1.4% 4.3% 1.2% 1.3% ** Capital Outlay reconciliation amount was used for the percentage calculation. It reduced noncapital expenditures.

Fiscal Year

CITY OF WATSONVILLE, CALIFORNIA
Net Change in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
127
Attachment B

Page 437 of 509 ends

Fiscal Property Sales Franchise Utility User Other
Year Tax Tax Tax Tax Tax Total
$ $ $ $ $ $
2014 12,090 11,436 365 3,029 1,120 28,040
2015 11,868 13,988 404 3,437 1,295 30,992
2016 12,846 16,693 455 3,183 1,457 34,634
2017 13,300 16,083 471 3,679 1,793 35,326
2018 13,436 18,393 436 4,019 3,108 39,392
2019 15,669 19,369 460 4,011 3,125 42,634
2020 16,243 19,075 458 4,265 2,906 42,947
2021 16,169 22,232 563 3,994 2,610 45,568
2022 16,977 24,408 538 4,144 3,618 49,685
2023 17,802 25,337 572 4,358 3,694 51,763
Source: City of Watsonville Finance Department
(amounts expressed in thousands)

CITY OF WATSONVILLE, CALIFORNIA
General Governmental Tax Revenues By Source
Last Ten Fiscal Years
(modified accrual basis of accounting)
128
Attachment B

Page 438 of 509 ends

Fiscal Total Estimated Assessed
Year Less: Taxable Direct Actual Value as a %
Ended Residential Commercial Industrial Other Unsecured Tax Exempt Assessed Tax Taxable of Actual June 30 Property Property Property Property Property Property Value Rate (1) Value Taxable Value $ $ $ $ $ $ $ % $ %
2014 2,091,245 544,645 103,080 329,813 212,372 171,985 3,109,170 1.18 3,109,170 1.00 2015 2,316,558 548,165 106,401 350,110 231,586 185,687 3,367,133 1.18 3,367,133 1.00 2016 2,456,187 563,026 115,344 361,791 235,517 200,675 3,531,190 1.18 3,531,190 1.00 2017 2,606,044 626,252 135,130 394,814 229,211 229,936 3,761,515 1.16 3,761,515 1.00 2018 2,757,691 609,505 168,676 435,526 259,425 252,874 3,977,950 1.17 3,977,950 1.00 2019 2,727,533 583,841 442,945 421,714 262,350 222,957 4,215,426 1.16 4,215,426 1.00 2020 2,858,513 618,090 470,547 459,879 277,705 246,737 4,437,997 1.09 4,437,997 1.00 2021 3,002,026 640,089 485,947 410,766 276,813 205,383 4,610,258 1.16 4,610,258 1.00 2022 3,150,126 671,837 505,514 456,649 275,930 249,202 4,810,854 1.09 4,810,854 1.00 2023 3,288,822 757,157 515,612 507,728 290,464 307,240 5,052,543 1.16 5,052,543 1.00 Notes: Source: HDL, Coren & Cone
Source: Previously published ACFR Reports
(1.) Total Direct Tax Rate is represented by TRA 02-021

CITY OF WATSONVILLE, CALIFORNIA
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
(amounts expressed in thousands)
129
Attachment B

Page 439 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA
Property Tax Rates - Direct
and Overlapping
(Per $100 of Assessed Value)
Last Ten Years
Basic
Countywide School
Year Levy Districts Retirement Total
2014 1.000 0.109 0.077 1.186
2015 1.000 0.098 0.077 1.175
2016 1.000 0.101 0.077 1.178
2017 1.000 0.086 0.077 1.163
2018 1.000 0.094 0.077 1.171
2019 1.000 0.081 0.077 1.158
2020 1.000 0.087 0.077 1.164
2021 1.000 0.084 0.077 1.161
2022 1.000 0.090 0.077 1.167
2023 1.000 0.085 0.077 1.162
Source: HDL, Coren & Cone
130
Attachment B

Page 440 of 509 ends

Percentage of Percentage of
Taxable Total Taxable Taxable Total Taxable
Assessed Assessed Assessed Assessed
Value Rank Value Value Rank Value
$ % $ %
S Martinelli And Company 56,747 1 1.19% 33,881 2 1.15%
MPT of Watsonville 50,798 2 1.07%
OW Family-Lee Road LLC 37,270 3 0.78%
Freedom Associates LLC 28,143 4 0.59% 22,415 3 0.76%
Blackbird Homes LLC 27,724 5 0.58%
Save Mart Portfolio Owner Fund V Ca 25,000 6 0.54%
Bridge Paloma Associates LLC 24,653 7 0.52%
111 Jenning Drive LLC 23,688 8 0.50%
Home Depot USA 22,072 9 0.46%
William J and Neva J Hansen Co Trustees 22,141 10 0.46% Watsonville Hospital Corp 58,781 1 1.99%
Harvest Drive Properties LLC 20,173 4 0.68%
George Ow Jr Trustee ET AL 19,858 5 0.67%
Terminal Freezers LLC 19,784 6 0.67%
Home Depot Dev of Maryland INC 16,700 7 0.56%
WRI Freedom Center LP 18,069 8 0.61%
Dayton Hudson Corporation 15,998 9 0.54%
Carl E Best 1999 Trust 15,513 10 0.52%
Totals 318,236 6.69% 241,172 8.15%
Source: HDL, Coren & Cone
2023 2014

CITY OF WATSONVILLE, CALIFORNIA
Principal Property Taxpayers
June 30, 2023
(amounts expressed in thousands)
131
Attachment B

Page 441 of 509 ends

Percent Supplemental Delinquent
Fiscal Total * Current Tax * Of Levy Tax Tax * Total Tax Year Tax Levy Collections Collected Collections Collections Collections $ $ $ $ $ $
2014 8,242,044 8,242,044 100% 69,092 - 8,311,136
2015 7,837,187 7,837,187 100% 112,079 - 7,949,266
2016 7,801,004 7,801,004 100% 117,264 - 7,918,268
2017 8,615,411 8,615,411 100% 200,484 - 8,815,895
2018 8,605,570 8,605,570 100% 225,296 - 8,830,866
2019 10,536,951 10,536,951 100% 238,730 - 10,775,681
2020 10,859,042 10,859,042 100% 212,455 - 11,071,497
2021 10,732,446 10,732,446 100% 127,234 - 10,859,680
2022 11,026,084 11,026,084 100% 352,022 - 11,378,106
2023 11,707,891 11,707,891 100% 296,479 - 12,004,370
Source: City of Watsonville
*Property Tax collection equals property Tax collected due to agreement with the County of Santa Cruz.

With this agreement the City does not receive any Delinquent tax collection.

CITY OF WATSONVILLE, CALIFORNIA
Property Tax Collection
Last Ten Fiscal Years
132
Attachment B

Page 442 of 509 ends

General Special Total Percentage
Fiscal Obligation Assessment Capital Revenue Loans & Capital Primary of Personal Per Year Debt Debt Leases Bonds Notes Leases Government Income Capita $ $ $ $ $ $ $
2014 5,082 379 - 30,313 8,181 - 43,955 4.90% 0.852
2015 4,676 290 - 29,057 11,124 - 45,147 5.22% 0.875
4,254 214 - 677 347 - 5,492 0.59% 0.104
2017 3,818 149 - 461 582 - 5,010 0.50% 0.092
2018 3,406 98 - 235 922 - 4,661 0.47% 0.090
2019 4,283 49 - - 1,639 - 5,971 0.59% 0.113
2020 3,679 - - - 1,693 - 5,372 0.50% 0.104
2021 2,938 - - - 8,150 - 11,088 1.24% 0.216
2022 2,153 - - - 7,371 - 9,524 0.94% 0.219
2023 2,243 - - - 12,633 - 14,876 1.17% 0.298
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. 1 See the Schedule of Demographic and Economic Statistics for the personal income and population data.

Governmental Activities Business-Type Activities

CITY OF WATSONVILLE, CALIFORNIA
Ratio of Outstanding Debt By Type
Last Ten Fiscal Years
(amounts expressed in thousands, except per capita amount) 2016
133
Attachment B

Page 443 of 509 ends

Percentage of
Estimated
General Less:Amounts Actual Taxable
Fiscal Obligation Available in Debt Value of Per
Year Debt Service Fund Total Property Capita
$ $ $ $
2014 4,676 79 4,597 0.15% 1,123
2015 4,676 72 4,604 0.15% 1,121
2016 4,254 125 4,129 0.13% 1,250
2017 3,818 131 3,687 0.12% 1,438
2018 3,406 123 3,283 0.09% 1,615
2019 4,283 129 4,154 0.10% 1,276
2020 3,679 238 3,441 0.08% 1,497
2021 2,938 247 2,691 0.06% 1,909
2022 2,153 246 1,907 0.04% 2,657
2023 2,243 324 1,919 0.04% 2,599
Note: Detail of the City's outstanding debt can be found in the notes to the financial statements.

See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property for estimated actual property value data.

Population data can be found in the Schedule of Demographic and Economic Statistics

CITY OF WATSONVILLE, CALIFORNIA
Ratio of Net General Obligation Debt Outstanding
Last Ten Fiscal Years
(amounts expressed in thousands, except per capita amount) 134
Attachment B

Page 444 of 509 ends

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ $ $ $ $ $ $ $ $
Debt limit 123,043 133,232 139,945 149,679 158,656 166,439 175,678 181,450 189,752 200,992 Total net debt applicable to limit 5,082 4,676 4,129 3,687 3,283 4,154 3,441 2,691 1,907 1,919 Legal debt margin 118,367 128,556 135,816 145,992 155,373 162,285 172,237 178,759 187,845 199,073 Total net debt applicable to the limit 4.130% 3.510% 2.950% 2.463% 2.069% 2.496% 1.959% 1.483% 1.005% 0.955% as a percentage of debt limit
Legal Debt Margin Calculation for Fiscal Year 2023
Assessed value $ 5,052,543
Add back: exempt real property 307,240
Total assessed value 5,359,783
Debt Limit = 3.75% of assessed valuation 200,992
Debt applicable to limit 2,243
Less: Amount set aside for repayment of
general obligation debt 324
Total net debt applicable to limit 1,919
Legal debt margin $ 199,073
Source: City of Watsonville
Fiscal Year
(amounts expressed in thousands)
Last Ten Fiscal Years
Legal Debt Margin Information

CITY OF WATSONVILLE, CALIFORNIA
135
Attachment B

Page 445 of 509 ends

Estimated
Total (1) Share of
Debt Percentage Overlapping
Jurisdiction Outstanding Applicable Debt
$ $
Direct Debt:

City of Watsonville 2,243 100% 2,243
Total of Direct Debt 2,243
Overlapping Tax Debt:

Cabrillo Joint Community College District 98,100 9.03% 8,855 Pajaro Valley Unified School District 158,914 26.37% 41,902 Santa Cruz County General Fund
Obligations 99,249 9.10% 9,034
Santa Cruz County Office of Education
General Fund Obligations 7,017 9.10% 639
Pajaro Valley Joint Unified School District
Certificates of Participation 11,835 26.37% 3,121
City of Watsonville General
Fund Obligations (2) 2,668 100.00% 2,668
Successor Agency 5,495 100.00% 5,495
(3)
Total Overlapping Debt 383,278 71,713
Total Direct and Overlapping Bonded Debt 385,521 71,715 Source: Wildan Financial Services
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value.

Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value. (2) Includes share of Santa Cruz County Emergency Communications Center obligations ($423,600). (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage reveue and non-bonded capital lease obligations.

CITY OF WATSONVILLE, CALIFORNIA
Computation of Direct and Overlapping Bonded Debt
June 30, 2023
(amounts expressed in thousands, except per capita amount) 136
Attachment B

Page 446 of 509 ends

Education
Personal (2) Per Level in
Income Capita Years of
Fiscal (amounts expressed Personal Median Formal School (4) Unemployment Year Population (1) in thousands) Income Age (3) Schooling Enrollment Rate (5) $ $
2014 52,508 896,824 17.080 29.7 N/A 20,362 19.3%
2015 52,087 864,719 16.601 29 N/A 20,438 19.2%
2016 52,891 934,271 17.664 29.9 N/A 20,354 19.2%
2017 53,015 981,527 18.514 30.1 N/A 20,400 19.2%
2018 53,434 1,052,216 19.692 29.7 N/A 20,279 19.3%
2019 53,021 1,014,448 19.133 29.7 N/A 20,106 10.4%
2020 51,515 1,068,567 20.742 30.3 N/A 18,616 10.1%
2021 51,366 1,122,733 21.857 30.3 N/A 19,772 14.8%
2022 50,669 1,183,950 23.366 30.9 N/A 18,675 13.6%
2023 49,876 1,270,289 25.468 31.1 N/A 18,094 10.3%
Source: MuniServices, LLC & Data Reporting Office Ca. Dept of Ed.

1.) Population Projections are provided by the California Department of Finance Projections.

2.) Income Data is derived from previous income adjusted for inflation.

3.) Unemployment Data is provided by the EDD's Bureau of Labor Statistics Department.

CITY OF WATSONVILLE, CALIFORNIA
Demographic and Economic Statistics
Last Ten Fiscal Years

4.) Student Enrollment reflects the total number of students enrolled in the Pajaro Valley Unified School District. Other School Districts w/in the City are not accounted for in this statistics. 137
Attachment B

Page 447 of 509 ends

Percentage Percentage
of Total City of Total City
Employees Rank Employment Employees Rank Employment
2,139 1 9.22% 2,008 1 9.13%
620 2 2.67% 653 2 2.97%
521 3 2.25%
471 4 2.03%
397 5 1.71% 361 4 1.64%
340 6 1.47% 280 7 1.27%
244 7 1.05%
264 8 1.14%
240 9 1.03%
210 10 0.91%
417 3 1.90%
300 5 1.36%
280 6 1.27%
219 8 1.00%
186 9 0.85%
186 10 0.85%
5,446 23.47% 4,890 22.23%
(1) Total City Labor Force provided by EDD Labor Force Data https://www.labormarketinfo.edd.ca.gov/data/labor-force-and-unemployment-for-cities-and-census-areas.html City Total (1) 23,200 21,996
Pajaro Valley Unified School District
Watsonville Community Hospital
Granite Construction
Del Mar Food Products, Inc
City of Watsonville *
S Martinelli & Co.

Lakeside Organic Gardens LLC
Nordic Naturals, Inc
FedEx Ground Package Systems, INC
Community Tree Service, Inc
West Marine Products
Fox Factory
Manning Montessori Children's House
Community Bridges
Clinica Del Valle Del P
Green Valley Clinic
Total
Source: BL Data, MuniServices, LLC & Called Employers
Source: 2013-2014 previously published CAFR
* Includes Certificated, classified & Admin.
**Includes contractors.
2023 2014

CITY OF WATSONVILLE, CALIFORNIA
Principal Employers
Current Fiscal Year and Ten Years Ago
138
Attachment B

Page 448 of 509 ends

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Function
General Government 6 7 7 9 9 9 9 10 11 11
Community Development 14 13 11.5 14 15 16 16 12 15 15
Finance 17 16 16 10 10 11 11 10 10 10
Fire 35 41 41 40 42 43 43 31 31 32
Informaion Services * n/a n/a n/a 8 8 8 9 11 16 16
Police:

Officers 68 64 67.2 66 75 75 75 71 75 78
Civilians 17 22 26 27 22 24 23 21 19 19
Library 29 29 27.4 25 25 26 27 23 22 22
Parks & Community
Services 27 27 25.9 26 29 29 26 22 24 28
Public Works 16 16 14 14 13 15 15 15 12 13
Airport 9 9 9 9 10 13 13 10 11 10
LLMAD 1 1 1 1 1 1 1 1 1 1
Gas Tax n/a n/a n/a 0 2 4 4 3 3 3
Parking Garage 0 0 0 0 0 0 0 0 0 0
Redevelopment and
Housing 4 4 5.2 3 4 4 4 5 4 4
Solid Waste 38 36 44 46 49 43 43 43 44 45
Wastewater 46 47 49 53 55 59 59 52 53 53
Water 31 34 35 38 41 44 44 44 39 37
358 366 379 389 410 424 422 384 390 397
* Information Services was created and moved out of General Government.

Source: City of Watsonville's Biennial Budget documents.

CITY OF WATSONVILLE, CALIFORNIA
Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years
139
Attachment B

Page 449 of 509 ends

CITY OF WATSONVILLE, CALIFORNIA
Operating Indicators by Function
Last Ten Fiscal Years
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Function
General Government:

City Council meetings 22 27 19 21 25 25 23 22 34 31
Resolutions processed 153 181 199 187 192 180 229 282 285 261 Community Development:

Planning application reviews 259 393 361 369 423 442 396 230 501 472 Construction inspections 1,851 1,725 1,165 2,933 3,828 3,624 2,904 1,029 3,557 3,537 Building Permits 625 768 817 862 1,034 810 758 1,493 927 1,104 Finance:

Payroll checks issued 12,203 12,327 12,511 12,547 13,323 13,028 13,045 11,200 12,973 12,973 Utility accounts 14,685 15,023 15,024 14,985 15,043 15,070 14,556 14,474 14,104 14,610 A/P checks issued 7,460 7,313 7,517 7,644 7,588 8,062 7,695 6,890 6,904 6,919 Fire:

Field incidents dispatched 4,123 4,282 4,282 4,997 5,070 5,286 5,427 6,539 6,271 5,658 Information Services:

Client Computers 542 542 531 531 646 646 682 698 609 646 Library:

Items used/checked out 262,929 411,234 411,234 439,234 272,468 326,888 303,137 34,242 53,238 134,413 Parks & Community Services:

Registered Participants 506 549 475 479 413 297 335 48 1,972 2,296 Police:

Moving and Parking Citations 9,876 10,524 11,105 12,747 9,600 15,659 9,738 8,721 15,466 7,867 Service Calls Dispatch 61,239 65,288 69,668 67,632 65,635 44,386 56,901 53,730 54,239 52,215 URC Crime Rate 25 39 40 43 38 34 34 30 28 31
(# crimes/1,000 population, calendar years)
Wastewater:

Avrg. Annual volume per day septage
treated (in million gallons) 8 8 3 3 4 5 5 6 8 9
Water:

Water production (acre feet) 7,163 6,597 6,648 7,102 6,906 7,882 7,100 6,950 6,348 Solid Waste:

Refuse handled (tons) 32,607 40,204 41,389 36,028 34,286 35,109 35,202 39,898 33,373 32,699 Recycled material (tons) 6,041 4,946 7,466 7,081 8,188 7,070 6,050 5,808 7,869 11,221 Source: City of Watsonville departments
140
Attachment B

Page 450 of 509 ends

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Function
Fire:

Stations 2 2 2 2 2 2 2 2 2 2
Police:

Patrol units 18 17 17 17 22 22 22 22 26 25
Patrol motorcycles 6 4 5 5 5 5 6 6 5 7
Library:

Buildings 2 2 2 2 2 2 2 2 2 2
Parks & Community Services:

Parks 21 26 26 26 26 26 26 26 26 26
Acreage of parks 85.0 143.0 143.0 143.0 143.0 143.0 143 143 143.0 143.0 Community Centers 6 5 5 5 5 6 8 8 7 7
Public Works:

Miles of streets 96 89 89 89 89 89 89 89 84 84
Airport:

Runways 2 2 2 2 2 2 2 2 2 2
Wastewater:

Treatment plants 1 1 1 1 1 1 1 1 1 1
Capacity of treatment plant* 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 *(gallons per day in millions)
Water:

Maximum pumping capacity* 18.7 19.1 19.1 19.1 19.1 19.1 19.1 19.1 19.1 19.1 Average consumption* 6.3 6.1 5.9 5.9 5.9 6.2 7 7 6 6
*(gallons per day in millions)
Solid Waste:

Collection trucks 16 16 19 19 20 20 25 25 25 25
Source: City of Watsonville departments

CITY OF WATSONVILLE, CALIFORNIA
Capital Assets Statistics by Function
Last Ten Fiscal Years
141
Attachment B

Page 451 of 509 ends

This Page Left Intentionally Blank
Attachment B

Page 452 of 509 ends

City of Watsonville, California
Measure Y Fund
Financial Statements
For the Year Ended June 30, 2023
Attachment C

Page 453 of 509 ends

The Page Left Intentionally Blank
Attachment C

Page 454 of 509 ends

CITY OF WATSONVILLE

MEASURE Y FUND

FINANCIAL STATEMENTS
For the Year ended June 30, 2023
Table of Contents
Independent Auditor’s Report .............................................................................................................................. 1 Financial Statements:

Balance Sheet ........................................................................................................................................ 3 Statement of Revenues, Expenditures, and Change in Fund Balance .................................................. 4 Statement of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual ......................................................................................................................... 5 Notes to the Financial Statements ......................................................................................................... 7 Independent Auditor’s 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 ............................................................ 9 Attachment C

Page 455 of 509 ends

The Page Left Intentionally Blank
Attachment C

Page 456 of 509 ends

INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of City
Council of the City of Watsonville, California
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of the Measure Y Fund (the Fund) of the City of Watsonville, California (City), as of and for the year ended June 30, 2023, and the related notes to the 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 financial position of the Fund as of June 30, 2023, and the change in the financial position and budgetary comparison listed in the Table of Contents as part of the financial statements for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
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 opinion.

Emphasis of a Matter
As discussed in Note 1, the financial statements present only the Fund and do not purport to, and do not present fairly the financial position of the City as of June 30, 2023, the changes in its financial position, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

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. 1 Attachment C

Page 457 of 509 ends

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 there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with 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.

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.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 26, 2023, 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 26, 2023
2 Attachment C

Page 458 of 509 ends

ASSETS
Cash and investments 2,769,007 $
Accounts receivable 870,209
Intergovernmental receivable 13,909
Total Assets $ 3,653,125

LIABILITIES
Accounts and retentions payable $ 304,023
Accrued personnel costs 57,460
Total Liabilities 361,483

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 13,909
Total Deferred Inflows of Resources 13,909

FUND BALANCE
Restricted for:

Fire services 1,406,875
Police services 1,400,763
Parks and recreation 470,095
Total Fund Balance 3,277,733

TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE $ 3,653,125
See accompanying Notes to Financial Statements.

CITY OF WATSONVILLE

MEASURE Y FUND

BALANCE SHEET
June 30, 2023
(FORMERLY KNOWN AS MEASURE G)
3 Attachment C

Page 459 of 509 ends

AND CHANGE IN FUND BALANCE

REVENUES
Sales tax - Fire 1,957,390 $
Sales tax - Police 2,781,554
Sales tax - Parks and recreation 412,082
Interest - Fire 66,220
Interest - Police 46,600
Interest - Parks and recreation 9,810
Other revenue - police 36,734
Total Revenues 5,310,390

EXPENDITURES
Fire 1,547,624
Police 3,257,536
Park and Recreation 434,855
Total Expenditures 5,240,015
Excess (deficiency) of revenues over expenditures 70,375 OTHER FINANCING SOURCES (USES):

Transfers out for debt services payments (286,307)
NET CHANGE IN FUND BALANCE (215,932)

FUND BALANCE
Beginning Fund Balance 3,493,665
Ending Fund Balance $ 3,277,733
See accompanying Notes to Financial Statements.

CITY OF WATSONVILLE

MEASURE Y FUND

STATEMENT OF REVENUES, EXPENDITURES,
For The Year Ended June 30, 2023
(FORMERLY KNOWN AS MEASURE G)
4 Attachment C

Page 460 of 509 ends

CITY OF WATSONVILLE

MEASURE Y FUND
(FORMERLY KNOWN AS MEASURE G)

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGE IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended June 30, 2023
Variance
Final Favorable
REVENUES Budget Actual (Unfavorable)
Sales tax - Fire 1,957,390 $ 1,957,390 $ - $
Sales tax - Police 2,781,554 2,781,554 -
Sales tax - Parks and recreation 412,082 412,082 -
Interest - Fire 66,220 66,220 -
Interest - Police 46,600 46,600 -
Interest - Parks and recreation 9,810 9,810 -
Other revenue - Police 36,734 36,734 -
Total Revenues 5,310,390 5,310,390 -

EXPENDITURES
Fire:

Salaries and Wages 1,079,948 1,079,948 -
Operations 229,715 229,715 -
Capital Outlay 237,961 237,961 -
Total Fire 1,547,624 1,547,624 -
Police:

Salaries and Wages 1,765,822 1,765,822 -
Operations 917,606 917,606 -
Capital Outlay 574,108 574,108 -
Total Police 3,257,536 3,257,536 -
Park and Recreation:

Salaries and Wages 81,087 81,087 -
Operations 353,768 353,768 -
Total Park and Recreation 434,855 434,855 -
Total Expenditures 5,240,015 5,240,015 -
Excess (deficiency) of revenues over expenditures 70,375 70,375 Other financing sources (uses):

Transfers out for debt services payments - Fire (286,307) (286,307) - NET CHANGE IN FUND BALANCE $ (215,932) (215,932) $ -

FUND BALANCE
Beginning Fund Balance 3,493,665
Ending Fund Balance $ 3,277,733
See accompanying Notes to Financial Statements.
5 Attachment C

Page 461 of 509 ends

The Page Left Intentionally Blank
Attachment C

Page 462 of 509 ends

CITY OF WATSONVILLE

MEASURE Y FUND
(FORMERLY KNOWN AS MEASURE G)

NOTES TO THE FINANCIAL STATEMENTS
June 30, 2023
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
In the June 3, 2014 election, City of Watsonville (City) voters approved Measure G, establishing a temporary half-cent transaction sales and use tax. The Measure G Fund (Fund) was established to accumulate revenues transmitted by the State Board of Equalization (BOE), the agency responsible for administering and collecting the transactions and use taxes for the City, and apportion them to essential services outlined within the approved expenditure plan.

On March 3, 2020, City voters approved Measure Y to renew and continue the half-cent transaction sales and use tax. The fund was used to accumulate revenues transmitted by the State Board of Equalization and apportion them to essential services outlined within the approved expenditure plan.

The financial statements present only the activities of the Measure Y Fund, and are not intended to present the financial position and changes in financial position of the City of Watsonville, in accordance with accounting principles generally accepted in the United States of America.

B. Basis of Accounting
The Measure Y Fund of the City is maintained on the modified accrual basis of accounting. As such, revenues are recognized when they become susceptible to accrual, that is, when they become both measurable and available to finance expenditures of the current period. Expenditures are recognized in the accounting period in which the liability is incurred (when goods are received or services rendered).

C. Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

NOTE 2 - CASH AND INVESTMENTS
Cash and investments at June 30, 2023, consist of the following:

Pooled cash and investments with the
City of Watsonville $2,769,007
Please refer to the notes of the City's June 30, 2023 Annual Comprehensive Financial Report regarding cash and investments for additional detail.
7 Attachment C

Page 463 of 509 ends

The Page Left Intentionally Blank
Attachment C

Page 464 of 509 ends

INDEPENDENT AUDITOR’S 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
To the Honorable Mayor and Members of City Council of
the City of Watsonville, California
We have audited, in accordance with the 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, the financial statements of the City of Watsonville (City) Measure Y Fund (the Fund) as of and for the year ended June 30, 2023, and the related notes to the financial statements, and have issued our report thereon dated December 26, 2023. Our report included an emphasis of a matter paragraph disclosing the implementation of a new accounting principle.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified a deficiency in internal control that we consider to be a material weakness as listed on the Schedule of Material Weakness included as part of our separately issued Memorandum on Internal Control dated December 26, 2023, which is an integral part of our audit and should be read in conjunction with this report.
9 Attachment C

Page 465 of 509 ends

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance or other matters that is required to be reported under Government Auditing Standards and is listed as finding 2023-01 in our separately issued Memorandum on Internal Control dated December 26, 2023, which is an integral part of our audit and should be read in conjunction with this report.

City’s Response to Findings
Government Auditing Standards require the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in our separately issued Memorandum on Internal Control dated December 26, 2023, which is an integral part of our audit and should be read in conjunction with this report. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Pleasant Hill, California
December 26, 2023
10 Attachment C

Page 466 of 509 ends

Reso No. (CM)
Reference: Reso No. 134-23 (CM) Amend
Meeting Date: 022427 SWZ ______ RM ______ Finance ______ 1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE AMENDING THE 2023-24 BUDGET TO AUTHORIZE
$3,735,852 BUDGET APPROPRIATION INTO VARIOUS FUNDS AND TO

AUTHORIZE FOUR ADDITIONAL POSITIONS
WHEREAS, on June 25, 2023, the City Council adopted Resolution No.134-23 (CM) approving the Final Budget for the City of Watsonville for fiscal year 2023-24; and WHEREAS, current projections show that without budget adjustments, departments will go over budget by the end of the fiscal year; and WHEREAS, City staff recommends some increases and four additional positions to departmental budgets to meet increases in demand for services.

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

1. Adopting a Resolution amending the 2023-2024 Budget 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 City Council hereby authorizes certain budget appropriations and new positions for fiscal year 2023-24, as fully described on Exhibit “A,” attached hereto and incorporated herein for fiscal year ending June 30, 2024. ********************************

Page 467 of 509 ends

Mid Year 23/24 Review Appropriation Request
General Fund
Revenue Expense
OTHER Legal Costs 130-7303 370,000
Settlement 280-7302 900,000
Warming Centers 280-7361 62,000
County Homelesness Share 280-7361 81,614
Homeless Efforts 280-7361 200,000
Cloud Upgrade 280-7361 80,290
Economic Development 280-7361 250,000
City Manager Redevelopment Manager 120-7011-7067 Salary & Benefits 153,494 FIRE Fire 450-7012 Overtime 603,000
Parks Science Workshop 694-5895 Other Revenue 7,500
694-7011 Wages 980
694-7021-09048 Temporary Wages 4,420
694-7559-09048 Other Supplies 2,100
Police Support Services 409-7012 Overtime 85,000
Police - Operations 410-7012 Overtime 85,200
Eliminate 1 Police Officer Position 410-7011 to 7067 Salaries & Benefits (62,279) Police Service Specialist 410-7011 to 7067 Salaries & Benefits 40,058 Police Service Specialist - 1 year 410-7011 to 7067 Salaries & Benefits 40,058 TOTALS 7,500 2,895,935
Other Funds
Revenue Expense
Airport Cloud Upgrade 560-7361 Contract Services 3,381
Library Increase Minimum Wage 620-7021 Temporary Wages 13,500 Cloud Upgrade 620-7361 Contract Services 7,522
Carbon Fund EV charging stations 325-7361 Contract Services 10,000 CDD-RAH County Homelesness Share 221-347 Contract Services 81,614 Grants Fund Senior Administrative Analyst 339-7011 Salary & Benefits 128,000 (City Manager's Office) Second Harvest Agreement - costs 339-7361 other costs as identified 120,093 Second Harvest Agreement 339-5890 reimbursement agreement 248,093 PW Increase of .75 position to full time 540-7011 to 7067 Salary & Benefits 36,000 540-7361 Other Contract Services (36,000)
Environmental & Sustainability 543-7361 Contract Services 30,000 PW- Wastewater Cloud Upgrade 530-7361 Contract Services 18,002 PW- Water Cloud Upgrade 596-7361 Contract Services 12,508 PW- Solid Waste Cloud Upgrade 570-7361 Contract Services 15,297 PCS Public Arts 0274-928-7361 Contract Services 75,000
Workers Compensation Reimbursement of Claim 291-5819 WC Stop Loss 284,327 Claim Payment 291-7712 Compensation Claim 325,000
TOTALS 532,420 839,917
TOTALS APPROPRIATION REQUEST 539,920 3,735,852
Exhibit "A"

Page 1 of 1 ends

ACFR FY 22-23 and Mid Year
Financial Report FY 23-24
Marissa Duran, Finance Director
February 27, 2024

Page 469 of 509 ends

RECOMMENDED

ACTIONS
• Accept by motion, the Annual
Comprehensive Financial Report for FY
2022-23, and
• Accept by motion, the mid-year
financial report for the 2023-24 Fiscal
Year:
• Accept by motion, the Annual Measure
Y Audit Report for FY 2022-23, and
• Approve a resolution appropriating
$3,485,852 including three additional
positions

Page 470 of 509 ends

ACFR Online
• - Watsonville ACFR FY23
(06/30/2023 City of
Watsonville FY23 AUD
[6/30/2023]

Page 471 of 509 ends

2023 CAFR

Page 472 of 509 ends

General Fund Balance

Page 473 of 509 ends

Use of Fund Balance
Note: Hospital Loan Guarantee, we do not anticipate using but have identified for good practice.

Page 474 of 509 ends

General Fund Revenues

Page 475 of 509 ends

General Fund Revenues - Overall
Property tax is projected to be just slightly overbudget Sales tax is projected to be at budget, Statewide this revenue stream has seen decreases, but our auto sales are outpacing statewide sales and keeping us within budget projections Utility tax is projected to be on budget
Hotel tax is projected on budget, 6 hotels remitting
Measure R - $5.2MM first full year
Department Revenues, CDD, Police and PCS lower than budgeted

Page 476 of 509 ends

Sales Tax

Page 477 of 509 ends

List of Hotels

Page 478 of 509 ends

Revenues cont.

On the “Other Revenues” category
Reminder, these are Leases, Business License, Franchise Fees agreements, etc.

The City is currently focusing on the economic
development side, as this is the key going forward to
building more revenue capacity

Page 479 of 509 ends

General Fund Expenditures

Page 480 of 509 ends

Measure R
Measure R
Budget Projected Variance
Operations
Parks 747,200 455,488 291,712
Library 290,000 96,662 193,338
Financing 750,000 0 750,000
0 Capital 0
Parks 400,000 200,000 200,000
Library 100,000 0 100,000
Streets 3,180,000 150,000 3,030,000
TOTALS 5,467,200 902,150 4,565,050

Page 481 of 509 ends

Measure R
projects
• Currently working with a financial advisor on
leveraging these funds for our major projects,
namely: Ramsay, City Plaza, Nature Center and
Rolling Hills joint use agreement
• Streets- has the largest piece of the pie – they are
currently design on Green Valley and Bridge Street
and also starting work on Ohlone project
• Library – working on their Outdoor Cafe on the
second floor of the library

Page 482 of 509 ends

General Fund
Revenue Expense
OTHER Legal Costs 370,000
Settlement 900,000
Warming Centers 62,000
County Homelesness Share 81,614
Homeless Efforts 200,000
Cloud Upgrade 80,290
Economic Development 250,000
City Manager Development Facilitator- Ombudsperson Salary & Benefits 153,494 FIRE Fire Overtime 603,000
Parks Science Workshop Other Revenue 7,500
Wages 980
Temporary Wages 4,420
Other Supplies 2,100
Police Support Services Overtime 85,000
Police - Operations Overtime 85,200
Eliminate 1 Police Officer Position Salaries & Benefits (62,279) Police Service Specialist Salaries & Benefits 40,058
Police Service Specialist - 1 year Salaries & Benefits 40,058 TOTALS 7,500 2,895,935

Page 483 of 509 ends

New Staff Request

POLICE REQUESTS
Swapping Police Officer
position with Police
Service Specialist
One-year limited Police
Service Specialist

CITY MANAGER

REQUESTS
Development
FacilitatorOmbudsperson
Sr. Administrative
Analyst through Co-Op
Agreement, this hire
will not be funded by
the City

Page 484 of 509 ends

General Fund Appropriations Requests
• Other – Cloud $137k will modernize our ERP as we move from on premise to cloud based, Settlement - $900k Willowcreek Settlement-Legal Costs $370k • City Manager’s Office – Economic Development Position, 250K seed money, Homelessness efforts $343 for warming shelter and other programs • Fire – Overtime Costs - $603k, we are seeing a very high spike as we struggle to hire
• Parks – Appropriating a Science Workshop Program, “El Nido” • Police – Overtime Costs $170k, swapping police officer position with Police Service Specialist adding an additional Police Service Specialist on a one-year limited basis

Page 485 of 509 ends

Enterprise Funds
Starting
Balance Revenue Expense Capital Ending Balance
Airport Revised Budget 817,481 5,100,768 4,458,499 115,000 1,344,750 Projection 5,290,892 4,495,365 63,075 1,549,933
Variance 190,124 36,866 (51,925) 175,065
Waste Water Revised Budget 16,328,536 22,552,802 17,415,161 14,814,670 6,651,507 Projection 18,964,576 17,400,162 6,577,811 11,315,139
Variance (3,588,226) (14,999) (8,236,859) (11,840,084)
SW Revised Budget 16,916,396 24,413,887 17,697,413 11,982,752 11,650,118 Projection 18,840,387 17,697,413 9,243,120 8,816,250
Variance (5,573,500) - (2,739,632) (8,313,132)
Water Revised Budget 31,730,377 26,558,244 16,823,856 19,264,177 22,200,588 Projection 22,658,244 16,823,856 9,078,488 28,486,277
Variance (3,900,000) - (10,185,689) (14,085,689)

Page 486 of 509 ends

Other Funds
Revenue Expense
Airport Cloud Upgrade 560-7361 Contract Services 3,381
Library Increase Minimum Wage 620-7021 Temporary Wages 13,500 Cloud Upgrade 620-7361 Contract Services 7,522
Carbon Fund EV charging stations 325-7361 Contract Services 10,000 CDD-RAH County Homelesness Share 221-347 Contract Services 81,614 Grants Fund Senior Administrative Analyst 339-7011 Salary & Benefits 128,000 (City Manager's Office) Second Harvest Agreement - costs 339-7361 other costs as identified 120,093 Second Harvest Agreement 339-5890 reimbursement agreement 248,093 PW Increase of .75 position to full time 540-7011 to 7067 Salary & Benefits 36,000 540-7361 Other Contract Services (36,000)
Environmental & Sustainability 543-7361 Contract Services 30,000 PW- Wastewater Cloud Upgrade 530-7361 Contract Services 18,002 PW- Water Cloud Upgrade 596-7361 Contract Services 12,508 PW- Solid Waste Cloud Upgrade 570-7361 Contract Services 15,297 PCS Public Arts 0274-928-7361 Contract Services 75,000
Workers Compensation Reimbursement of Claim 291-5819 WC Stop Loss 284,327 Claim Payment 291-7712 Compensation Claim 325,000
TOTALS 532,420 839,917

Page 487 of 509 ends

Internal Service Funds
Information and Technology – The department is currently working on modernizing City IT by replacing a failing 18-year-old phone system throughout all departments. Working on migrating City’s ERP from onpremise to the Cloud.

MSC Vehicle Shop – This division is in its 3rd year and facing increased costs for fuel and vehicle parts but was able to build these into their budget and is expected to absorb the increases.

Page 488 of 509 ends

Internal Service Funds
Summary of Other Funds for FY 2023-24
IT Revised Budget 1,927,275 3,569,762 3,704,406 1,064,179 728,452 Projection 3,569,922 3,301,864 462,168 1,733,165
Variance 160 (402,542) (602,011) (1,004,393)
MSC Shop Revised Budget 113,752 3,404,161 3,404,161 113,752 Projection 3,404,161 3,404,161 113,752
Variance - - -

Page 489 of 509 ends

Other Funds
Summary of Other Funds for FY 2023-24
Starting
Balance Revenue Expense Capital Ending Balance
Library Revised Budget 2,025,581 4,352,691 4,809,902 270,000 1,298,370 Projection 4,307,109 4,572,601 - 1,760,089
Variance (45,582) (237,301) (270,000) (552,883)
Measure Y Revised Budget 2,769,007 5,225,409 4,879,225 3,098,872 16,319 Projection 5,225,308 4,804,785 682,235 2,507,294
Variance (101) (74,440) (2,416,637) (2,491,177)
Gas Tax Revised Budget 1,000,568 1,314,339 980,323 1,145,196 189,388 Projection 1,314,339 980,323 903,644 430,940
Variance - - (241,552) (241,552)
SB1 Revised Budget 2,733,195 1,055,000 - 2,632,855 1,155,340 Projection 633,888 - 1,869,682 1,497,401
Variance (421,112) - (763,173) (1,184,285)
Measure D Revised Budget 4,307,183 1,010,000 5,386,833 (69,650) Projection 514,581 4,478,670 343,094

Page 490 of 509 ends

Measure Y

Page 491 of 509 ends

Outlook and Caution
PERS Unfunded Liability
Capital needs – working on Ramsay, Nature Center, City Plaza and Rolling Hills Agreement – will be bringing Financing request soon
Labor Negotiations – City is embarking in unprecedented Compensation and Classification Study, building capacity to be able to address issues identified Unknown Costs- NextGen, RFP currently being issued, and entire system has to be upgraded

Page 492 of 509 ends

Today’s Actions
Accept by motion, the
Annual Comprehensive
Financial Report for FY
2022-23, and
Accept by motion, the
mid-year financial report
for the 2023-24 Fiscal
Year:

Accept by motion, the
Annual Measure Y Audit
Report for FY 2022-23,
and
Approve a resolution
appropriating
$3,735,852 including

3.25 additional positions

Page 493 of 509 ends

Page 494 of 509 ends

Page 1 of 2 ends

2/22/2024 8:04:58 PM
C:\Program Files\eSCRIBE\TEMP\2045667920\2045667920,,,Report - Safe Firearm Storage .docx Agenda Report
MEETING DATE: Tuesday, February 27, 2024
TO: City Council
FROM: CITY ATTORNEY ZUTLER
THROUGH: CITY MANAGER MENDEZ
SUBJECT: SAFE FIREARM STORAGE REQUIREMENTS
RECOMMENDED ACTION:

Introduce, for first reading only, waiving full reading of the text, an Ordinance adding Section 4-

7.06 (Safe Firearm Storage) to Chapter 7 (Weapons) of Title 4 (Public Safety) of the Watsonville Municipal Code relating to the safe storage of firearms.

BACKGROUND:

This item was initially brought forward by Councilmember Dutra as an item to add to the agenda that was subsequently directed by the City Council as part of the process to bring forward. Part of that discussion was the idea to bring forward an ordinance regarding safe storage of firearms.

DISCUSSION:

Safe Storage Ordinances require that firearms be securely stored within private residences.

Generally, to comply with a safe storage ordinance, owners must store firearms in a locked container or disable the firearm with a trigger lock. Owners must also timely report missing or stolen firearms to law enforcement.

Safe storage ordinances are in effect in at least 20 California municipalities, including Morgan Hill, San Francisco, San Jose, Santa Cruz, and Saratoga.

Watsonville Municipal Code section 4-7-05 requires firearm dealers to equip all firearms sold or transferred with an effective trigger lock, but the WMC does not currently regulate residential storage of firearms.

Proposed Safe Storage Ordinance
State law requires that firearms be stored securely if the firearms can be accessed by a child or if a person who is prohibited from possessing a firearm is likely to gain access to the firearm. If adopted, this ordinance would require all firearms be stored in a locked container or

Page 495 of 509 ends

Page 2 of 2 ends

2/22/2024 8:04:58 PM
C:\Program Files\eSCRIBE\TEMP\2045667920\2045667920,,,Report - Safe Firearm Storage .docx disabled with a trigger lock, regardless of potential access by a child or prohibited person. The ordinance includes exceptions for when a police officer or firearm owner is carrying the firearm or exerts immediate control and possession of the firearm.

State law requires a firearm owner, within 5 days of suspecting or learning a firearm is missing, to report the missing firearm. If adopted, this ordinance would require any person who owns or possesses a firearm to report a missing firearm to the Watsonville Police Department within 48 hours of the time they suspect or know the firearm is missing if the person is a resident of Watsonville or the firearm went missing in Watsonville.

A violation of the proposed ordinance would be subject to enforcement through the City’s municipal code enforcement procedures outlined in Watsonville Municipal Chapter 2 (Penalty Provisions) of Title 1 (General Provisions). The procedures allow for a violation to be handled as an administrative, civil, or criminal matter. The ordinance would not permit Police Department staff to enter a private residence to ensure compliance or take proactive enforcement action without a warrant. Enforcement would thus typically occur in conjunction with another incident or crime wherein a person is found to have gained access to a firearm unlawfully stored.

Requiring safe firearm storage is intended to decrease the risk of harm to children and the entire community from unauthorized access to firearms. The proposed ordinance extends current safe storage requirements to all gun owners, providing more protection than State law, and aims to further reduce accidental gun shootings, gun-related homicides and suicides, and theft of unsecured firearms.

FINANCIAL IMPACT:

There is no financial impact as a result of this item, beyond the minimal costs to update the ordinance.

ALTERNATIVE ACTION:

The City Council could decline to introduce the ordinance, or direct staff to revise the draft presented.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

Page 496 of 509 ends

1 Ord No. ______ (CM)
Meeting Date: 022724 SWZ ______ RM ______
ORDINANCE NO. Introduction (CM)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE ADDING SECTION 4-7.06 (SAFE FIREARM STORAGE) TO CHAPTER 7 (WEAPONS) OF TITLE 4 (PUBLIC SAFETY) OF THE

MUNICIPAL CODE RELATING TO SAFE STORAGE OF FIREARMS
Table of Contents
SECTION 1. FINDINGS. ................................................................................................. 2 SECTION 2. ENACTMENT............................................................................................. 2 CHAPTER 7 WEAPONS.............................................................................................. 2 Sec. 4-7.06 Safe firearm storage................................................................................ 2 SECTION 3. ENVIRONMENTAL REVIEW ..................................................................... 4 SECTION 4. SEVERABILITY.......................................................................................... 4 SECTION 5. PUBLICATION ........................................................................................... 5 SECTION 6. EFFECTIVE DATE..................................................................................... 5 o-0-o
WHEREAS, the City of Watsonville, California (“City”) does not presently regulate firearm storage within residential locations; and
WHEREAS, firearm injuries have significant adverse public health and safety impact nationally, regionally, and locally; and
WHEREAS, improperly stored firearms may result in accidental firearm injuries and/or deaths, particularly in homes with children; and WHEREAS, having a loaded or unlocked firearm in the home has been associated with an increased risk of firearm-related injury and death, as well as theft of the firearm; and
WHEREAS, a firearm stored while loaded or unloaded increases the risk of an accidental shooting, and has been associated with higher risks of suicide; and WHEREAS, utilizing gun locks or lock boxes when storing firearms in the home reduces the risk of firearm injury, death, and firearm theft; and WHEREAS, keeping a firearm locked when it is not being carried ensures that it

Page 497 of 509 ends

2 Ord No. ______ (CM)
Meeting Date: 022724
cannot be accessed or used by others without the owner’s knowledge or permission, decreasing the risk that the gun will be used to commit suicide, homicide, or inflict injury, whether intentionally or unintentionally; and
WHEREAS, the International Association of Chiefs of Police and the American Academy of Pediatrics recommend the safe storage of firearms; and WHEREAS, requiring stored, unsupervised firearms to be secured with gun locks or in a locked container does not substantially burden the right or ability to use firearms for self-defense in the home; and
WHEREAS, the City Council finds that requiring safe storage of firearms would constitute a sensible safety regulation and would not be unduly burdensome for firearm owners.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, DOES ORDAIN AS FOLLOWS:

SECTION 1. FINDINGS.

The City Council of the City of Watsonville does hereby find that the above referenced recitals are true and correct and incorporated into this Ordinance.

SECTION 2. ENACTMENT.

Chapter 7 (Weapons) of Title 4 (Public Safety) of the Watsonville Municipal Code is hereby amended by adding a new Section 4-7.06 (Safe Firearm Storage) to read in words and figures as follows:

CHAPTER 7 WEAPONS
Sec. 4-7.06 Safe firearm storage.

Page 498 of 509 ends

3 Ord No. ______ (CM)
Meeting Date: 022724
(a) No person shall keep a firearm within any residence unless the firearm is stored in a locked container or disabled with a trigger lock. (1) For purposes of this Section, “Firearm” shall mean any gun, rifle, pistol, or any other firearm as defined in California Penal Code section 16520, as amended from time to time.
(2) For purposes of this Section, “Locked Container” shall mean a locked container as defined in California Penal Code Section 16850, as amended from time to time, and is listed on the California Department of Justice Bureau of Firearms roster of approved firearm safety devices.
(3) For purposes of this Section, “Trigger Lock” shall mean a trigger lock that is listed on the California Department of Justice’s roster of approved firearms safety devices and that is identified as appropriate for that firearm by reference to either the manufacturer and model of the firearm or to the physical characteristics of the firearm that match those listed on the roster for use with the device under California Penal Code Section 23635.
(4) For purposes of this Section, “Residence” shall mean any structure intended or used for human habitation, including but not limited to houses, apartments, condominiums, rooms, in-law units, accessory dwelling units, motels, hotels, single-room occupancy units (SROs), time-shares, mobile homes, and recreational and other vehicles where human habitation occurs. (b) The requirements of Section 4-7.06(a) do not apply when a firearm is carried on the person of or is otherwise in the immediate control and possession of, an individual in accordance with applicable local, state, or federal laws.

Page 499 of 509 ends

4 Ord No. ______ (CM)
Meeting Date: 022724
(c) This Section does not apply when a firearm is carried on the person of, or is otherwise in the immediate control and possession of, a peace officer (as defined in California Penal Code Section 830 et seq., as may be amended from time to time). (d) It is not the intention of this chapter to regulate any conduct if the regulation of such conduct has been preempted by state or federal law. (e) Every violation of this chapter shall constitute an infraction and shall be punished in accordance with Watsonville Municipal Code Section 1-2.01 et. seq. (f) Any person who owns or possesses a firearm shall report the theft or loss of the firearm to the City of Watsonville Police Department within forty-eight (48) hours of the time the person suspected or knew that the firearm had been stolen or lost, if:
(1) the person who owns or possessed the stolen or lost firearm resides in the City; or
(2) the theft or loss of the firearm occurred in the City.

SECTION 3. ENVIRONMENTAL REVIEW
The City Council finds and determines that this Ordinance, which regulates the safe storage of firearms, is not subject to the provisions of the California Environmental Quality Act ("CEQA") because it is not a project, since it will not have a direct or reasonably foreseeable indirect impact on the environment.

SECTION 4. SEVERABILITY
If any section, subsection, sentence, clause or phrase or word of this Ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance.

Page 500 of 509 ends

5 Ord No. ______ (CM)
Meeting Date: 022724
SECTION 5. PUBLICATION
This ordinance shall be published in the Watsonville Register-Pajaronian and/or Santa Cruz Sentinel in compliance with the provisions of the Charter of the City of Watsonville.

SECTION 6. EFFECTIVE DATE
This ordinance shall be in force and take effect thirty (30) days after its final adoption.
************************************

Page 501 of 509 ends

1 Ord No. ______ (CM)
Meeting Date: 022724 SWZ ______ RM ______
ORDINANCE NO. Introduction (CM)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE ADDING SECTION 4-7.06 (SAFE FIREARM STORAGE) TO CHAPTER 7 (WEAPONS) OF TITLE 4 (PUBLIC SAFETY) OF THE

Page 502 of 509 ends

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, DOES ORDAIN AS FOLLOWS:

SECTION 1. FINDINGS.

The City Council of the City of Watsonville does hereby find that the above referenced recitals are true and correct and incorporated into this Ordinance.

SECTION 2. ENACTMENT.

Chapter 7 (Weapons) of Title 4 (Public Safety) of the Watsonville Municipal Code is hereby amended by adding a new Section 4-7.06 (Safe Firearm Storage) to read in words and figures as follows:

CHAPTER 7 WEAPONS
Sec. 4-7.06 Safe firearm storage.

Page 503 of 509 ends

3 Ord No. ______ (CM)
Meeting Date: 022724
(a) No person shall keep a firearm within any residence unless the firearm is stored in a locked container or disabled with a trigger lock. (1) For purposes of this Section, “Firearm” shall mean any gun, rifle, pistol, or any other firearm as defined in California Penal Code section 16520, as amended from time to time.
(2) For purposes of this Section, “Locked Container” shall mean a locked container as defined in California Penal Code Section 16850, as amended from time to time, and is listed on the California Department of Justice Bureau of Firearms roster of approved firearm safety devices.
(3) For purposes of this Section, “Trigger Lock” shall mean a trigger lock that is listed on the California Department of Justice’s roster of approved firearms safety devices and that is identified as appropriate for that firearm by reference to either the manufacturer and model of the firearm or to the physical characteristics of the firearm that match those listed on the roster for use with the device under California Penal Code Section 23635.
(4) For purposes of this Section, “Residence” shall mean any structure intended or used for human habitation, including but not limited to tents, tent-like structures, houses, apartments, condominiums, rooms, in-law units, accessory dwelling units, motels, hotels, single-room occupancy units (SROs), time-shares, mobile homes, and recreational and other vehicles where human habitation occurs.
(b) The requirements of Section 4-7.06(a) do not apply when a firearm is carried on the person of or is otherwise in the immediate control and possession of, an individual in accordance with applicable local, state, or federal laws.

Page 504 of 509 ends

Page 505 of 509 ends

SECTION 6. EFFECTIVE DATE
This ordinance shall be in force and take effect thirty (30) days after its final adoption.
************************************

Page 506 of 509 ends

Land Use Policy Social Policy
Budget Policy
Other:

Rev. 04/05/2023
Submittal - Completed by requesting City Council Member(s) and returned to the City Manager on or before the Council Meeting.

Date:

Classification - Implication Mode of Response
Department: Referral Lead:

Council Meeting Date:

Request Title:

Council Report Presentation
Motion Resolution
Ordinance Proclamation
Other:

Purpose - Please be specific, highlight the goal of your request.

Submitted:

Assignment - By the City Manager
Watsonville City Council
Request for New Agenda Item
Bring back an informational item on the use of all Park Restrooms and how hours of operations are established, and what hours of operation currently are.

February 13, 2024 Mayor Quiroz-Carter Park Restrooms Informational item Use of Public Buildings Parks and Community Services April 9, 2024 Nick Calubaquib

Page 507 of 509 ends

Land Use Policy Social Policy
Budget Policy
Other:

Rev. 04/05/2023
Submittal - Completed by requesting City Council Member(s) and returned to the City Manager on or before the Council Meeting.

Date:

Classification - Implication Mode of Response
Department: Referral Lead:

Council Meeting Date:

Request Title:

Council Report Presentation
Motion Resolution
Ordinance Proclamation
Other:

Purpose - Please be specific, highlight the goal of your request.

Submitted:

Assignment - By the City Manager
Watsonville City Council
Request for New Agenda Item
This item was brought up to bring back a dicussion on the existing ordinance and code enforcement efforts pertaining to the use of sandwich sign boards for advertisement.

February 13, 2024 Councilmember Montesino Sandwich Sign Boards Informational item & Discussion Community Development Department April 9, 2024 Suzi Merriam

Page 508 of 509 ends

Land Use Policy Social Policy
Budget Policy
Other:

Rev. 04/05/2023
Submittal - Completed by requesting City Council Member(s) and returned to the City Manager on or before the Council Meeting.

Date:

Classification - Implication Mode of Response
Department: Referral Lead:

Council Meeting Date:

Request Title:

Council Report Presentation
Motion Resolution
Ordinance Proclamation
Other:

Purpose - Please be specific, highlight the goal of your request.

Submitted:

Assignment - By the City Manager
Watsonville City Council
Request for New Agenda Item
Bring back a report and discussion on the City's current code enforcement efforts and explore ways to enhance per Council direction.

February 13, 2024 Councilmember Parker City Code Enforcement Informational item & Discussion Community Development Department April 9, 2024 Suzi Merriam

Page 509 of 509 ends

Watsonville City CouncilFebruary 27, 2024

Watsonville City Council
February 27, 2024