Agenda packet — Watsonville City Council, June 11, 2024 (part 3 of 4)

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_____________________________________________________________________________________ 25 years
e. Fiscal Impact:

No yearly maintenance is required. Replacement cost would be the only fiscal impact. f. Training:

Special Response Team (SRT) members receive 8-hours of training from certified trainers. Yearly training and qualifications.
g. Legal and Procedural Rules:

Use is established under WPD’s Policy. It is the policy of this agency to utilize these devices only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force, including the Fourth Amendment of the U.S.

Constitution.

12. Section 11 – Firearm or firearm accessory that is designated to launch explosive projectiles a. Description, quantity, capabilities, and purchase cost:

Combined Systems Technology Launching cup. Cost $180 per cup, quantity: 2. Designed for 5200 series grenades. Cups can be attached to any 12-gauge shotgun and the munition launched with our model 2600 launching cartridge. b. Purpose:

To limit the escalation of conflict where employment of lethal force is prohibited or undesirable
c. Authorized Use:

Tear gas may be used for crowd control, crowd dispersal or against barricaded suspects based on the circumstances. Only the Incident Commander may authorize the delivery and use of tear gas, and only after evaluating all conditions known at the time and determining that such force reasonably appears justified and necessary. d. Expected Lifespan:
5 Years
e. Fiscal Impact:

Annual replacement cost varies based on usage for training and critical incidents. On average about $360 each year.
f. Training:

Special Response Team (SRT) members receive 8-hours of training from certified trainers. Yearly training and qualifications.
g. Legal and Procedural Rules:

Use is established under WPD’s Policy. It is the policy of this agency to utilize chemical agents only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force. WPD Policy 308.

13. Section 12 – Noise-flash diversionary devices and explosive breaching tools a. Description, quantity, capabilities, and purchase cost:

BP2 NFDD (Non-Firing Distraction Device) Straight Delivery Pole with Clamp Head Delivery. Cost: $1050. Quantity: 1
b. Purpose
Attachment 2

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_____________________________________________________________________________________ The Pole allows a diversionary device to be mounted to it allowing department members to breach door handles from a relatively safe distance. c. Authorized Use:

Circumstances justifying the use of BP2 NFDD may include, but not be limited to:
• Barricaded subject and/or hostage situations
• High-risk warrant services
• Situations wherein the Incident Commander or on-scene Supervisor deems their use necessary to safely resolve the incident.
d. Expected Lifespan:
25+ years.
e. Fiscal Impact:

No fiscal impact is anticipated.
f. Training:

Special Response Team (SRT) members receive 8-hours of training from certified trainers. Yearly training and qualifications.
g. Legal and Procedural Rules:

Constitution.

14. Section 12 – Noise-flash diversionary devices and explosive breaching tools a. Description, quantity, capabilities, and purchase cost:

Defense Technology 11-gram, low roll II, non-reloadable distraction device. Cost:
$48.25 each, Quantity: 44. A Noise Flash Diversionary Device (NFDD) is a device that creates a bright flash and loud sound to temporarily divert the attention of subjects in the immediate area.
b. Purpose:

NFDD are used to distract and temporarily incapacitate dangerous suspects by overwhelming their senses of vision and hearing. The distraction allows officers to seize a moment of opportunity to take control of high-risk situations. They produce atmospheric overpressure and brilliant white light and, as a result, can cause short-term (6 - 8 seconds) physiological/psychological sensory deprivation to give officers a tactical advantage.
c. Authorized Use:

Circumstances justifying the use of flash/sound diversionary devices may include, but not be limited to:
• Barricaded subject and/or hostage situations
• High-risk warrant services
• Discouraging dangerous animals from attacking
• Riotous situations
• Circumstances wherein distraction of violent and/or emotionally disturbed persons and/or those under the influence of alcohol/drugs is believed necessary to facilitate apprehension/custody
Attachment 2

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_____________________________________________________________________________________ • Situations wherein the Incident Commander or on-scene Supervisor deems their use necessary to safely resolve the incident.
d. Expected Lifespan:
5 years
e. Fiscal Impact:

Annual replacement cost varies based on usage for training and critical incidents. On average about $200 each year.
f. Training:

Special Response Team (SRT) members receive 8-hours of training from certified trainers. Yearly training and qualifications.
g. Legal and Procedural Rules:

15. Section 12 - Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray.
a. Description, quantity, capabilities, and purchase cost:

Combined Tactical Systems Buffeted Riot CS Smoke. Cost: $33.49 each. Quantity: 19.

The Combined Systems Technology Baffled Riot CS Smoke (Model #5230B) is a pyrotechnic grenade designed for indoor/outdoor use delivering a maximum amount of irritant smoke throughout multiple rooms with minimal risk of fire. It can be hand thrown or launched. CS (2-Chlorobenzylidene Malononitrile) is an irritating agent and lachrymator (irritates the eyes and causes tears to flow). b. Purpose:

To limit the escalation of conflict where employment of lethal force is prohibited or undesirable.
c. Authorized Use:

Annual replacement cost varies based on usage for training and critical incidents. On average about $100 each year
f. Training:

Special Response Team (SRT) members receive 8-hours of training from certified trainers. Yearly training and qualifications.
g. Legal and Procedural Rules:

Attachment 2

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_____________________________________________________________________________________ Use is established under WPD’s Policy. It is the policy of this agency to utilize chemical agents only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force. WPD Policy 308.

16. Section 12 - Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray.
a. Description, quantity, capabilities, and purchase cost:

Defense Technology Stinger CS Rubber Ball Grenade. Cost: $47.20. Quantity: 6.

Maximum effect device that delivers 4 stimuli for psychological and physiological effects; rubber pellets, light, sound, and CS. CS (2-Chlorobenzylidene Malononitrile) is an irritating agent and lachrymator (irritates the eyes and causes tears to flow). b. Purpose:

To limit the escalation of conflict where employment of lethal force is prohibited or undesirable. Situations for use of the less lethal weapon systems may include, but are not limited to: Self-destructive, dangerous and/or combative individuals, riot/crowd control and civil unrest incidents, and department training exercises. c. Authorized Use:

Only SRT members who have received training by certified instructors in the use of chemical agents are authorized to use them. Tear gas may be used for crowd control, crowd dispersal or against barricaded suspects based on the circumstances. Only the Incident Commander may authorize the delivery and use of tear gas, and only after evaluating all conditions known at the time and determining that such force reasonably appears justified and necessary.
d. Expected Lifespan:
5 years
e. Fiscal Impact:

Annual replacement cost varies based on usage for training and critical incidents. f. Training:

Special Response Team (SRT) members receive 8-hours of training from certified trainers.

Yearly training and qualifications.
g. Legal and Procedural Rules:

Use is established under WPD Policy. It is the policy of this agency to utilize chemical agents only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force. WPD Policy 300, 415.

17. Section 14 – Projectile Launch Platforms
a. Description, quantity, capabilities, and purchase cost:

Defense Technology 40MM Tactical Single Shot Launcher. Cost: $920.65 each. Quantity:

25. The 40MM launchers are a single shot break-open frame launcher with a fixed stock.

These launchers are used to launch soft foam projectiles and chemical agent projectiles to resolve critical incidents involving barricaded persons. b. Purpose:

Attachment 2

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_____________________________________________________________________________________ The launcher is used to launch soft foam projectiles or chemical agent projectiles during high-risk incidents to resolve the conflict with less lethal measures. The soft foam projectiles can be further used to port windows after chemical agents have been deployed. To reduce the potential for violent confrontations. Projectiles, when used properly, are less likely to result in death or serious physical injury and can be used in an attempt to de-escalate a potentially deadly situation.
c. Authorized Use:

Circumstances appropriate for deployment include, but are not limited to, situations in which:
• The suspect is armed with a weapon and the tactical circumstances allow for the safe application of approved munitions.
• The suspect has made credible threats to harm him/herself or others. • The suspect is engaged in riotous behavior or is throwing rocks, bottles or other dangerous projectiles at people and/or officers.
• There is probable cause to believe that the suspect has already committed a crime of violence and is refusing to comply with lawful orders. d. Expected Lifespan:
25 years
e. Fiscal Impact:

No annual maintenance. Fiscal impact would be for additional devices or replacement. f. Training:

Patrol officers utilizing the 40mm launcher are required to attend a 4-hour certified training course.
g. Legal and Procedural Rules:

Use is established under WPD Policy. It is the policy of this agency to utilize 40mm launchers only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force. WPD Policy 308.

18. Section 14 – Projectile Launch Platform and Munition a. Description, quantity, capabilities and purchase cost:

Defense Technology, Exact Impact 40 MM Standard Range Sponge Round. Cost: $26 each. Quantity: 151. This is a point-of-aim, point-of-impact direct-fire round. This lightweight, high-speed projectile consisting of a plastic body and sponge nose that is spin stabilized via the incorporated rifling collar and the 40 mm launcher’s rifled barrel.

The round utilizes smokeless powder as the propellant, and therefore, have velocities that are extremely consistent.
b. Purpose:

The launcher is used to launch soft foam projectiles during high-risk incidents to resolve the conflict with less lethal measures. The soft foam projectiles can be further used to port windows after chemical agents have been deployed. To reduce the potential for violent confrontations. Projectiles, when used properly, are less likely to result in death or serious physical injury and can be used in an attempt to de-escalate a potentially deadly situation.
c. Authorized Use:

Attachment 2

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_____________________________________________________________________________________ Circumstances appropriate for deployment include, but are not limited to, situations in which:
• The suspect is armed with a weapon and the tactical circumstances allow for the safe application of approved munitions.
• The suspect has made credible threats to harm him/herself or others. • The suspect is engaged in riotous behavior or is throwing rocks, bottles or other dangerous projectiles at people and/or officers.
• There is probable cause to believe that the suspect has already committed a crime of violence and is refusing to comply with lawful orders. d. Expected Lifespan:
5 years
e. Fiscal Impact:

Annual replacement cost varies based on usage for training and critical incidents. On average about $200 each year.
f. Training:

Patrol officers utilizing the 40mm launcher are required to attend a 4-hour certified training course.
g. Legal and Procedural Rules:

19. Sections 12/14 - Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray. Projectile Launch Platforms.
a. Description, quantity, capabilities and purchase cost:

The Ferret 40mm is filled with a CS powder chemical agent. Cost: $19.66 each Quantity:

15. The frangible projectile that is spin stabilized utilizing barrel rifling. It is non-burning and designed to penetrate barriers. Primarily used to dislodge barricaded subjects. b. Purpose:

To limit the escalation of conflict where employment of lethal force is prohibited or undesirable.
c. Authorized Use:

The Ferret round may be used against barricaded suspects based on the circumstances.

Only the Incident Commander may authorize the delivery and use of Ferret rounds, and only after evaluating all conditions known at the time and determining that such force reasonably appears justified and necessary.
d. Expected Lifespan:
5 years
e. Fiscal Impact:

Annual replacement cost varies based on usage for training and critical incidents. On average about $60 each year.
f. Training:

Attachment 2

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_____________________________________________________________________________________ Special Response Team (SRT) members receive 8-hours of training from certified trainers.

Yearly training and qualifications.
g. Legal and Procedural Rules:

Section Two: Qualifying Equipment to be procured by the Watsonville Police Department • None.

Attachment 2

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3/30/22, 2:35 PM Bill Text - AB-481 Law enforcement and state agencies: military equipment: funding, acquisition, and use. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB481 1/5 SHARE THIS: Date Published: 10/01/2021 09:00 PM
AB-481 Law enforcement and state agencies: military equipment: funding, acquisition, and use. (2021-20 Assembly Bill No. 481
CHAPTER 406
An act to add Chapter 12.8 (commencing with Section 7070) to Division 7 of Title 1 of the Government Code, relating to military equipment.
[ Approved by Governor September 30, 2021. Filed with Secretary of State September 30, 2021. ]

LEGISLATIVE COUNSEL'S DIGEST
AB 481, Chiu. Law enforcement and state agencies: military equipment: funding, acquisition, and use.

Existing law designates the Department of General Services as the agency for the State of California responsible for distribution of federal surplus personal property, excepting food commodities, and requires the department to, among other things, do all things necessary to the execution of its powers and duties as the state agency for the distribution of federal personal surplus property, excepting food commodities, in accordance with specified federal law. Existing law, the Federal Surplus Property Acquisition Law of 1945, authorizes a local agency, as defined, to acquire surplus federal property without regard to any law which requires posting of notices or advertising for bids, inviting or receiving bids, or delivery of purchases before payment, or which prevents the local agency from bidding on federal surplus property. Existing federal law authorizes the Department of Defense to transfer surplus personal property, including arms and ammunition, to federal or state agencies for use in law enforcement activities, subject to specified conditions, at no cost to the acquiring agency.

This bill would require a law enforcement agency, defined to include specified entities, to obtain approval of the applicable governing body, by adoption of a military equipment use policy, as specified, by ordinance at a regular meeting held pursuant to specified open meeting laws, prior to taking certain actions relating to the funding, acquisition, or use of military equipment, as defined. The bill would also require similar approval for the continued use of military equipment acquired prior to January 1, 2022. The bill would allow the governing body to approve the funding, acquisition, or use of military equipment within its jurisdiction only if it determines that the military equipment meets specified standards. The bill would require the governing body to annually review the ordinance and to either disapprove a renewal of the authorization for a type, as defined, of military equipment or amend the military equipment use policy if it determines, based on an annual military equipment report prepared by the law enforcement agency, as provided, that the military equipment does not comply with the above-described standards for approval. The bill would specify these provisions do not preclude a county or local municipality from implementing additional requirements and standards related to the purchase, use, and reporting of military equipment by local law enforcement agencies.

This bill would also require a state agency, as defined, to create a military equipment use policy before engaging in certain activities, publish the policy on the agency’s internet website, and provide a copy of the policy to the Governor or the Governor’s designee, as specified. The bill would also require a state agency that seeks to continue use of military equipment acquired prior to January 1, 2022, to create a military equipment use policy.

This bill would also include findings that the changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

By adding to the duties of local officials with respect to the funding, acquisition, and use of military equipment, this bill would impose a state-mandated local program.

The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that amends or enacts laws relating to Home Bill Information California Law Publications Other Resources My Subscriptions My Favorites Attachment 3

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3/30/22, 2:35 PM Bill Text - AB-481 Law enforcement and state agencies: military equipment: funding, acquisition, and use. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB481 2/5 public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose.

This bill would make legislative findings to that effect.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority Appropriation: no Fiscal Committee: yes Local Program: yes THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. The Legislature finds and declares all of the following:
(a) The acquisition of military equipment and its deployment in our communities adversely impacts the public’s safety and welfare, including increased risk of civilian deaths, significant risks to civil rights, civil liberties, and physical and psychological well-being, and incurment of significant financial costs. Military equipment is more frequently deployed in low-income Black and Brown communities, meaning the risks and impacts of police militarization are experienced most acutely in marginalized communities.
(b) The public has a right to know about any funding, acquisition, or use of military equipment by state or local government officials, as well as a right to participate in any government agency’s decision to fund, acquire, or use such equipment. (c) Decisions regarding whether and how military equipment is funded, acquired, or used should give strong consideration to the public’s welfare, safety, civil rights, and civil liberties, and should be based on meaningful public input. (d) Legally enforceable safeguards, including transparency, oversight, and accountability measures, must be in place to protect the public’s welfare, safety, civil rights, and civil liberties before military equipment is funded, acquired, or used. (e) The lack of a public forum to discuss the acquisition of military equipment jeopardizes the relationship police have with the community, which can be undermined when law enforcement is seen as an occupying force rather than a public safety service.

SEC. 2. Chapter 12.8 (commencing with Section 7070) is added to Division 7 of Title 1 of the Government Code, to read:

CHAPTER 12.8. Funding, Acquisition, and Use of Military Equipment 7070. For purposes of this chapter, the following definitions shall apply:
(a) “Governing body” means the elected body that oversees a law enforcement agency or, if there is no elected body that directly oversees the law enforcement agency, the appointed body that oversees a law enforcement agency. In the case of a law enforcement agency of a county, including a sheriff’s department or a district attorney’s office, “governing body” means the board of supervisors of the county.
(b) “Law enforcement agency” means any of the following:
(1) A police department, including the police department of a transit agency, school district, or any campus of the University of California, the California State University, or California Community Colleges. (2) A sheriff’s department.
(3) A district attorney’s office.
(4) A county probation department.
(c) “Military equipment” means the following:
(1) Unmanned, remotely piloted, powered aerial or ground vehicles. (2) Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. However, police versions of standard consumer vehicles are specifically excluded from this subdivision. (3) High mobility multipurpose wheeled vehicles (HMMWV), commonly referred to as Humvees, two and one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. However, unarmored all-terrain vehicles (ATVs) and motorized dirt bikes are specifically excluded from this subdivision. (4) Tracked armored vehicles that provide ballistic protection to their occupants and utilize a tracked system instead of wheels for forward motion.
(5) Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units.
(6) Weaponized aircraft, vessels, or vehicles of any kind. Attachment 3

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3/30/22, 2:35 PM Bill Text - AB-481 Law enforcement and state agencies: military equipment: funding, acquisition, and use. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB481 3/5 (7) Battering rams, slugs, and breaching apparatuses that are explosive in nature. However, items designed to remove a lock, such as bolt cutters, or a handheld ram designed to be operated by one person, are specifically excluded from this subdivision. (8) Firearms of .50 caliber or greater. However, standard issue shotguns are specifically excluded from this subdivision. (9) Ammunition of .50 caliber or greater. However, standard issue shotgun ammunition is specifically excluded from this subdivision.
(10) Specialized firearms and ammunition of less than .50 caliber, including assault weapons as defined in Sections 30510 and 30515 of the Penal Code, with the exception of standard issue service weapons and ammunition of less than .50 caliber that are issued to officers, agents, or employees of a law enforcement agency or a state agency. (11) Any firearm or firearm accessory that is designed to launch explosive projectiles. (12) “Flashbang” grenades and explosive breaching tools, “tear gas,” and “pepper balls,” excluding standard, service-issued handheld pepper spray.
(13) Taser Shockwave, microwave weapons, water cannons, and the Long Range Acoustic Device (LRAD). (14) The following projectile launch platforms and their associated munitions: 40mm projectile launchers, “bean bag,” rubber bullet, and specialty impact munition (SIM) weapons.
(15) Any other equipment as determined by a governing body or a state agency to require additional oversight. (16) Notwithstanding paragraphs (1) through (15), “military equipment” does not include general equipment not designated as prohibited or controlled by the federal Defense Logistics Agency. (d) “Military equipment use policy” means a publicly released, written document governing the use of military equipment by a law enforcement agency or a state agency that addresses, at a minimum, all of the following:
(1) A description of each type of military equipment, the quantity sought, its capabilities, expected lifespan, and product descriptions from the manufacturer of the military equipment. (2) The purposes and authorized uses for which the law enforcement agency or the state agency proposes to use each type of military equipment.
(3) The fiscal impact of each type of military equipment, including the initial costs of obtaining the equipment and estimated annual costs of maintaining the equipment.
(4) The legal and procedural rules that govern each authorized use. (5) The training, including any course required by the Commission on Peace Officer Standards and Training, that must be completed before any officer, agent, or employee of the law enforcement agency or the state agency is allowed to use each specific type of military equipment to ensure the full protection of the public’s welfare, safety, civil rights, and civil liberties and full adherence to the military equipment use policy.
(6) The mechanisms to ensure compliance with the military equipment use policy, including which independent persons or entities have oversight authority, and, if applicable, what legally enforceable sanctions are put in place for violations of the policy.
(7) For a law enforcement agency, the procedures by which members of the public may register complaints or concerns or submit questions about the use of each specific type of military equipment, and how the law enforcement agency will ensure that each complaint, concern, or question receives a response in a timely manner. (e) “State agency” means the law enforcement division of every state office, officer, department, division, bureau, board, and commission or other state body or agency, except those agencies provided for in Article IV (except Section 20 thereof) or Article VI of the California Constitution.
(f) “Type” means each item that shares the same manufacturer model number. 7071. (a) (1) A law enforcement agency shall obtain approval of the governing body, by an ordinance adopting a military equipment use policy at a regular meeting of the governing body held pursuant to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2) or the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), as applicable, prior to engaging in any of the following:
(A) Requesting military equipment made available pursuant to Section 2576a of Title 10 of the United States Code. (B) Seeking funds for military equipment, including, but not limited to, applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers. (C) Acquiring military equipment either permanently or temporarily, including by borrowing or leasing. (D) Collaborating with another law enforcement agency in the deployment or other use of military equipment within the territorial jurisdiction of the governing body.

Attachment 3

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3/30/22, 2:35 PM Bill Text - AB-481 Law enforcement and state agencies: military equipment: funding, acquisition, and use. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB481 4/5 (E) Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body pursuant to this chapter.
(F) Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of, military equipment. (G) Acquiring military equipment through any means not provided by this paragraph. (2) No later than May 1, 2022, a law enforcement agency seeking to continue the use of any military equipment that was acquired prior to January 1, 2022, shall commence a governing body approval process in accordance with this section. If the governing body does not approve the continuing use of military equipment, including by adoption pursuant to this subdivision of a military equipment use policy submitted pursuant to subdivision (b), within 180 days of submission of the proposed military equipment use policy to the governing body, the law enforcement agency shall cease its use of the military equipment until it receives the approval of the governing body in accordance with this section. (b) In seeking the approval of the governing body pursuant to subdivision (a), a law enforcement agency shall submit a proposed military equipment use policy to the governing body and make those documents available on the law enforcement agency’s internet website at least 30 days prior to any public hearing concerning the military equipment at issue. (c) The governing body shall consider a proposed military equipment use policy as an agenda item for an open session of a regular meeting and provide for public comment in accordance with the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2) or the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), as applicable. (d) (1) The governing body shall only approve a military equipment use policy pursuant to this chapter if it determines all of the following:
(A) The military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.
(B) The proposed military equipment use policy will safeguard the public’s welfare, safety, civil rights, and civil liberties. (C) If purchasing the equipment, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety.
(D) Prior military equipment use complied with the military equipment use policy that was in effect at the time, or if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance.
(2) In order to facilitate public participation, any proposed or final military equipment use policy shall be made publicly available on the internet website of the relevant law enforcement agency for as long as the military equipment is available for use. (e) (1) The governing body shall review any ordinance that it has adopted pursuant to this section approving the funding, acquisition, or use of military equipment at least annually and, subject to paragraph (2), vote on whether to renew the ordinance at a regular meeting held pursuant to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2) or the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), as applicable.
(2) The governing body shall determine, based on the annual military equipment report submitted pursuant to Section 7072, whether each type of military equipment identified in that report has complied with the standards for approval set forth in subdivision (d). If the governing body determines that a type of military equipment identified in that annual military equipment report has not complied with the standards for approval set forth in subdivision (d), the governing body shall either disapprove a renewal of the authorization for that type of military equipment or require modifications to the military equipment use policy in a manner that will resolve the lack of compliance.
(f) Notwithstanding subdivisions (a) to (e), inclusive, if a city contracts with another entity for law enforcement services, the city shall have the authority to adopt a military equipment use policy based on local community needs. 7072. (a) A law enforcement agency that receives approval for a military equipment use policy pursuant to Section 7071 shall submit to the governing body an annual military equipment report for each type of military equipment approved by the governing body within one year of approval, and annually thereafter for as long as the military equipment is available for use.

The law enforcement agency shall also make each annual military equipment report required by this section publicly available on its internet website for as long as the military equipment is available for use. The annual military equipment report shall, at a minimum, include the following information for the immediately preceding calendar year for each type of military equipment:
(1) A summary of how the military equipment was used and the purpose of its use. (2) A summary of any complaints or concerns received concerning the military equipment. (3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.

Attachment 3

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3/30/22, 2:35 PM Bill Text - AB-481 Law enforcement and state agencies: military equipment: funding, acquisition, and use. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB481 5/5 (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. (5) The quantity possessed for each type of military equipment. (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
(b) Within 30 days of submitting and publicly releasing an annual military equipment report pursuant to this section, the law enforcement agency shall hold at least one well-publicized and conveniently located community engagement meeting, at which the general public may discuss and ask questions regarding the annual military equipment report and the law enforcement agency’s funding, acquisition, or use of military equipment. 7073. (a) A state agency shall create a military equipment use policy prior to engaging in any of the following:
(1) Requesting military equipment made available pursuant to Section 2576a of Title 10 of the United States Code. (2) Seeking funds for military equipment, including, but not limited to, applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers. (3) Acquiring military equipment either permanently or temporarily, including by borrowing or leasing. (4) Collaborating with a law enforcement agency or another state agency in the deployment or other use of military equipment within the territorial jurisdiction of the governing body. (5) Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body pursuant to this chapter.
(6) Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, or to apply to receive, acquire, use, or collaborate in the use of, military equipment. (7) Acquiring military equipment through any means not provided by this subdivision. (b) No later than May 1, 2022, a state agency seeking to continue the use of any military equipment that was acquired prior to January 1, 2022, shall create a military equipment use policy. (c) A state agency that is required to create a military equipment use policy pursuant to this section shall do both of the following within 180 days of completing the policy:
(1) Publish the military equipment use policy on the agency’s internet website. (2) Provide a copy of the military equipment use policy to the Governor or the Governor’s designee. 7074. The Legislature finds and declares that ensuring adequate oversight of the acquisition and use of military equipment is a matter of statewide concern rather than a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this chapter applies to all cities, including charter cities and shall supersede any inconsistent provisions in the charter of any city, county, or city and county. 7075. Nothing in this chapter shall preclude a county or local municipality from implementing additional requirements and standards related to the purchase, use, and reporting of military equipment by local law enforcement agencies.

SEC. 3. The Legislature finds and declares that Section 1 of this act, which adds Chapter 12.8 (commencing with Section 7070) to Division 7 of Title 1 of the Government Code, furthers, within the meaning of paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the purposes of that constitutional section as it relates to the right of public access to the meetings of local public bodies or the writings of local public officials and local agencies. Pursuant to paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the Legislature makes the following findings:

Requiring local agencies to hold public meetings prior to the acquisition of military equipment further exposes that activity to public scrutiny and enhances public access to information concerning the conduct of the people’s business.

SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district under this act would result from a legislative mandate that is within the scope of paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution.

Attachment 3

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Reso No. (CM)
Meeting Date: 061324 SWZ ______ TV ______ WPD ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE PURSUANT TO GOVERNMENT CODE SECTION 7071
RENEWING CHAPTER 13 ENTITLED MILITARY EQUIPMENT USE OF
TITLE 4 (PUBLIC SAFETY) OF THE WATSONVILLE MUNICIPAL CODE, WATSONVILLE MILITARY EQUIPMENT USE POLICY 708 AND FINDING

THAT THE ANNUAL MILITARY EQUIPMENT REPORT COMPLIES WITH

THE STANDARDS OF APPROVAL SET FORTH IN GOVERNMENT CODE
7071(d)
WHEREAS, effective January 1, 2022, Assembly Bill 481 (AB 481) (Government Code sections 7071 et. seq.) sets forth a process by which law enforcement agencies are to obtain approval and annual renewal from their governing bodies of a City ordinance and military equipment use policy; and
WHEREAS, the Watsonville Police Department currently has military equipment (of which term is defined in Government Code section 7070(c)) in its inventory; and WHEREAS, the Watsonville Police Department works closely with other local, county, state and federal law enforcement agencies within Santa Cruz County on police related matters, including safeguarding the public’s welfare and safety, working on regional task forces, conducting training exercises, and providing mutual aid and responding to emergencies; and
WHEREAS, in exigent circumstances, there is sometimes the need to deploy military equipment from or lend military equipment to outside entities to promote the safety and security of community members; and
WHEREAS, the continued collaboration with other law enforcement agencies in the deployment or other use of military equipment within the City is necessary to safeguard the public’s welfare, safety, civil rights and civil liberties and there is no reasonable alternative that can achieve the same objective of officer and civilian safety, and

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Reso No. (CM)
Meeting Date: 061124
2 WHEREAS, Watsonville Police Department - Policy 708 sets forth a military equipment use policy that is consistent with the Police Department’s current practices, has been posted on the Department’s website since April, 2022, complies with all the requirements of AB 481, will ensure ongoing regulation and compliance with the law going forward and will provide a means of community engagement and transparency regarding use of military equipment by the Department; and
WHEREAS, a public notice has been provided and a well-publicized and conveniently located community engagement meeting held, in accordance with applicable law; and
WHEREAS, the City Council desires to renew Chapter 4-13 of the Watsonville Municipal Code and the Watsonville Police Department’s Military Equipment Use Policy - Policy 708, and approve its annual Military Equipment Report in compliance with AB 481.

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

1. The City Council finds that Chapter 4-13 of the Watsonville Municipal Code and Watsonville Police Department Military Equipment Use Policy 708 are exempt from the provisions of the California Environmental Quality Act (“CEQA”) because they will not result in a direct or reasonably foreseeable indirect physical change in the environment and are not a “project,” as defined in Section 15378 of the CEQA Guidelines.

2. The City Council has reviewed Chapter 13 entitled Military Equipment Use of Title 4 (Public Safety) of the Watsonville Municipal Code and hereby renews that Chapter without change.

3. The City Council has reviewed the Watsonville Police Department’s Military Equipment Use Policy - Policy 708 and hereby renews the Policy without change.

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Reso No. (CM)
Meeting Date: 061124
3 4. The City Council has reviewed the annual military equipment report and finds that it complies with the standards of approval set forth in subdivision (d) of Government Code section 7071, a copy of which report is attached hereto and incorporated herein by this reference.
**************************************

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Watsonville Police Department
Military Equipment – Annual Report (DRAFT)
January 1, 2023 – December 31, 2023

1. Section 1 – Unmanned, remotely piloted, powered aerial vehicle a. Axon Air, DJI Avata Pro-View Combo
(1) A summary of how the military equipment was used and the purpose of its use. Not used
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. No cost for this reporting period. This drone is one of four included in a 5-year contract with Axon in the amount of $114,740.70.
(5) The quantity possessed for each type of military equipment. One (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

2. Section 1 – Unmanned, remotely piloted, powered aerial vehicle a. Axon Air, Skydio 2+ Enterprise
(1) A summary of how the military equipment was used and the purpose of its use. Not used
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. No cost for this reporting period. This drone is one of four included in a 5-year contract with Axon in the amount of $114,740.70.
(5) The quantity possessed for each type of military equipment. One

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(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

3. Section 1 – Unmanned, remotely piloted, powered aerial vehicle a. Axon Air, DJI Matrice 30T SP Plus
(1) A summary of how the military equipment was used and the purpose of its use. Not used
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. No cost for this reporting period. This drone is one of four included in a 5-year contract with Axon in the amount of $114,740.70.
(5) The quantity possessed for each type of military equipment. One (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

4. Section 1 – Unmanned, remotely piloted, powered aerial vehicle a. Axon Air, DJI Mavic 3 Thermal SP Plus
(1) A summary of how the military equipment was used and the purpose of its use. Not used
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. No cost for this reporting period. This drone is one of four included in a 5-year contract with Axon in the amount of $114,740.70.
(5) The quantity possessed for each type of military equipment. One

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(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

5. Section 1 – Unmanned, remotely piloted, ground vehicle a. Throwbot XT
(1) A summary of how the military equipment was used and the purpose of its use. Not used
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. None (5) The quantity possessed for each type of military equipment. One (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

6. Section 10 – Specialized Firearms and Ammunition
a. Department Issued Colt LE6920 Carbine Rifle
(1) A summary of how the military equipment was used and the purpose of its use. Annual patrol rifle qualifications and trainings on 11/29/23, 12/13/23, and 12/14/23.
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. 50 Officers (including instructors) qualified. Rifle qualifications take approximately 1 hour @ avg $65/hr = $3,250. Source funds come from General Fund and Measure Y. 4 academy recruits completed the 16-hour Patrol Rifle Familiarization Course @ $58.86/hr = $3,767.04. Source funds come from General Fund and Measure Y. 15,000 practice rounds were purchased in 2023 for a total

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cost of $6,944. Source funds came from Specialized Department Equipment Budget. Annual inspections of the rifle, approximately 1 hour per rifle, total of 17 hours @ $71/ hour = $1,207. Source funds come from General Fund and Measure Y.
(5) The quantity possessed for each type of military equipment. 17 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

7. Section 10 – Specialized Firearms and Ammunition
a. Spartan Precision Bolt Action Rifle .308 cal.
(1) A summary of how the military equipment was used and the purpose of its use. One officer attended the Basic Sniper School.
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. Total cost of this school was $2,006. Source funds come from General Fund and Measure Y. (5) The quantity possessed for each type of military equipment. 4 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

8. Section 10 – Specialized Firearms and Ammunition
a. Daniel Defense V3 Semi-Auto Rifle .308 cal.
(1) A summary of how the military equipment was used and the purpose of its use. No use during this period
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be

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provided for the military equipment in the calendar year following submission of the annual military equipment report. None (5) The quantity possessed for each type of military equipment. 1 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

9. Section 10 – Specialized Firearms and Ammunition
a. Hornady .308 168gr AMAX TAP 20 250
(1) A summary of how the military equipment was used and the purpose of its use. One officer attended the Basic Sniper School and utilized approximately 300 rounds.
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. 3,000 rounds were purchased for an annual re-supply, costing $4,691.94. Source funds come from Specialized Department Equipment Budget.
(5) The quantity possessed for each type of military equipment.

Approximately 3,000 rounds are currently in inventory.
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

10. Section 10 – Specialized Firearms and Ammunition
a. Federal Cartridge .308 Win Tactical Bonded Tip 168 Grain Duty Ammunition (1) A summary of how the military equipment was used and the purpose of its use. None
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be

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provided for the military equipment in the calendar year following submission of the annual military equipment report. None (5) The quantity possessed for each type of military equipment.

Approximately 300 rounds are currently in inventory.
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

11. Section 11 – Firearm or firearm accessory that is designated to launch explosive projectiles
a. Remington 870, pump action shotgun
(1) A summary of how the military equipment was used and the purpose of its use. 4 officers received five hours of training during one training exercise.
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.

None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. Training exercise was five hours x four officers x avg. $65/hr = $1,300. Source funds come from General Fund and Measure Y.
(5) The quantity possessed for each type of military equipment. Two (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

12. Section 11 – Firearm or firearm accessory that is designated to launch explosive projectiles
a. Combined Systems Technology Launching Cup
(1) A summary of how the military equipment was used and the purpose of its use. 4 officers received five hours of training during one training exercise.
(2) A summary of any complaints or concerns received concerning the military equipment. None

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(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.

13. Section 12 – Noise-flash diversionary devices and explosive breaching tools a. BP2 NFDD (Non-Firing Distraction Device) Straight Delivery Pole with Clamp Head Delivery
(1) A summary of how the military equipment was used and the purpose of its use. Not used
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. None (5) The quantity possessed for each type of military equipment. One (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

14. Section 12 – Noise-flash diversionary devices and explosive breaching tools a. Defense Technology 11-gram, low roll II, non-reloadable distraction device (1) A summary of how the military equipment was used and the purpose of its use. 2 NFDD used during SRT training exercise.
(2) A summary of any complaints or concerns received concerning the military equipment. None

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(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. Training for two officers x 10 hours x avg. $65/hr = $1,300. Source funds come from General Fund and Measure Y.
(5) The quantity possessed for each type of military equipment. 37 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. Requested purchase of 24 NFDD @ $1,158.00. Source funds come from Specialized Department Equipment Budget.
*Anticipated new SRT members. SWAT school required training.

15. Section 12 – Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray
a. Combined Tactical Systems Buffeted Riot CS Smoke
(1) A summary of how the military equipment was used and the purpose of its use. 4 officers received five hours of training during one training exercise.
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. Training exercise was five hours x four officers x avg. $65/hr = $1,300. Source funds come from General Fund and Measure Y.
(5) The quantity possessed for each type of military equipment. 15 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

16. Section 12 – Munitions containing tear gas or OC, excluding standard, service issued handheld pepper spray
a. Defense Technology Stinger CS Rubber Ball Grenade

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(1) A summary of how the military equipment was used and the purpose of its use. Not used during this period
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. None (5) The quantity possessed for each type of military equipment. None (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

17. Section 14 – Projectile Launch Platform and Munition a. Defense Technology 40MM Tactical Single Shot Launcher (1) A summary of how the military equipment was used and the purpose of its use. Used during Department-wide training on 1/11/23 and 1/12/23. 37 Officers were trained and fired one to two live rounds each. Also used during “Zero Week” training for two lateral police officers on 10/23/23.

Each Officer fired one to two live rounds each.
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. Training exercise is two hours x 39 officers (including instructors) x avg. $65/hr = $4,810.

Source funds come from the General Fund and Measure Y.
(5) The quantity possessed for each type of military equipment. 26 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

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18. Section 14 – Projectile Launch Platform and Munition a. Defense Technology, Exact Impact 40 MM Standard Range Sponge Round (1) A summary of how the military equipment was used and the purpose of its use. A total of 47 rounds were fired on 1/11/23 and 1/12/23 during training exercises.
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. 50 rounds were purchased in 2023 at a cost of approx. $26 per round, total cost $1,300.

Source funds come from Specialized Department Equipment budget. (5) The quantity possessed for each type of military equipment. 154 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

19. Sections 12 / 14 – Munitions containing tear gas or OC, excluding standard, serviceissued handheld pepper spray. Projectile Launch Platforms a. Ferret 40 MM is filled with CS powder chemical agent (1) A summary of how the military equipment was used and the purpose of its use. Not used during this period
(2) A summary of any complaints or concerns received concerning the military equipment. None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. None (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. None (5) The quantity possessed for each type of military equipment. 15 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. None

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Section Two: Qualifying Equipment to be procured by the Watsonville Police Department

1. None

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6/6/2024 6:17:28 PM
C:\Program Files\eSCRIBE\TEMP\18172444800\18172444800,,,Report - Alcohol Policing Partnership Grant.docx Agenda Report
MEETING DATE: Tuesday, June 11, 2024
TO: City Council
FROM: POLICE CHIEF ZAMORA
SUBJECT: ALCOHOL POLICING PARTNERSHIP (APP) PROGRAM
RECOMMENDED ACTION:

Adopt a resolution authorizing the City Manager or her designee to accept the Department of Alcoholic Beverage Control, FY 2024/2025 Alcohol Policing Partnership (APP) Program grant in the amount of $62,021, to reduce crime and public nuisance problems associated with alcohol beverage outlets, and to execute all required documents, future amendments, if any, and appropriate funds to the grant budget.

BACKGROUND:

In 1995, the California Department of Alcoholic Beverage Control (ABC) embarked on a new and innovative approach to broaden and increase the level of alcoholic beverage law enforcement by partnering with cities and counties through a grant assistance project.

The mission of the Alcohol Policing Partnership Program is to work with law enforcement agencies to develop an effective, comprehensive, and strategic approach to eliminating the crime and public nuisance problems associated with problem alcoholic beverage outlets and then institutionalize those approaches within the local police agency.

DISCUSSION:

Budget reductions at the state and local level greatly reduced law enforcement staff assigned to alcoholic beverage law enforcement. Many of the state’s police and sheriff’s departments re-prioritized their missions and diverted their ABC-related enforcement resources to other areas like patrol. There’s now a strong movement by cities and communities for more regulation and education to prevent crime as it relates to the increasing number of alcohol outlets.

The main goals of the program are to:
(a) Establish closer relationships between ABC district offices and the grant agencies; (b) Target licensed outlets that cause alcohol-related crimes; (c) Reduce alcohol related disorder issues; and
(d) Maintain a training program that addresses alcohol related issues.

The Watsonville Police Department (WPD) is committed to the grant’s goals and objectives. Some of the objectives include identifying and targeting problematic

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6/6/2024 6:17:28 PM
C:\Program Files\eSCRIBE\TEMP\18172444800\18172444800,,,Report - Alcohol Policing Partnership Grant.docx establishments, minor decoy operations, shoulder tap operations and training for local law enforcement. In addition, the WPD will be coordinating Informed Merchants Preventing Alcohol Related Crime Tendencies (IMPACT) operations to ensure that retailers are compliant with state laws, ABC license conditions and the City’s alcohol ordinance. Retail licensees will also have the opportunity to attend a Licensee Education on Alcohol and Drug (LEAD) Program which is a voluntary prevention program that provides high quality, effective, and educationally sound training on alcohol responsibility and the law.

STRATEGIC PLAN:

Approval of the APP program grant is consistent with the Strategic Plan Goal 05-Public Safety. The APP grant supports the goal by focusing its efforts on problematic licensed outlets that cause crime in an effort to reduce alcohol-related disorders.

FINANCIAL IMPACT:

The APP program grant in the amount of $62,021 does not require local match funds and has no financial impact to the General Fund.

ALTERNATIVE ACTION:

The City Council may choose to not accept these grant funds, but enforcement of alcoholrelated issues and problematic alcohol outlets will continue to be sporadic as time allows and funded through general fund rather than alternative revenue sources.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

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Reso No. ________ (CM)
Meeting Date: 061124 SWZ ______ TV ______ WPD ______
1 RESOLUTION NO. _________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE AUTHORIZING AND DIRECTING THE CITY MANAGER

ON BEHALF OF THE CITY OF WATSONVILLE TO ACCEPT THE

CALIFORNIA DEPARTMENT OF ALCOHOL BEVERAGE CONTROL
(ABC), FY 24/25 ALCOHOL POLICING PARTNERSHIP (APP) PROGRAM GRANT IN THE AMOUNT OF $62,021 TO REDUCE CRIME AND PUBLIC

NUISANCE PROBLEMS ASSOCIATED WITH ALCOHOL BEVERAGE

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

APPROPRIATING SUCH FUNDS TO THE SPECIAL GRANTS FUND
(0260)
WHEREAS, the Watsonville Police Department submitted a grant proposal to the California Department of Alcohol Beverage Control (ABC), for the FY 24-25 Alcohol Policing Partnership (APP) Program grant to reduce crime and public nuisance problems associated with alcohol beverage outlets in the City; and WHEREAS, the City of Watsonville was awarded a $62,021 grant by the California Department of Alcohol Beverage Control (ABC) for the APP Program; and WHEREAS, the City Council of the City of Watsonville, a municipal corporation of the State of California, wishes to accept for FY 2024-2025, the Alcohol Policing Partnership (APP) Program grant in the amount of $62,021.

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

1. This action is exempt from the requirements of the California Environmental Quality Act (CEQA). This Resolution is not subject to review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as this is not a “project” that may cause a direct, or reasonably foreseeable indirect,

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Reso No. ______ (CM)
Meeting Date: 061124
2 physical change in the environment and if a “project,” is exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.

2. That the City Manager of the City of Watsonville, on behalf of the City of Watsonville, is authorized and directed to accept the California Department of Alcoholic Beverage Control, FY 2024/2025 Alcohol Policing Partnership Program grant in the amount of $62,021 to reduce crime and public nuisance problems associated with alcohol beverage outlets.

3. That the City Manager of the City of Watsonville, is authorized and directed to execute in the name of the City of Watsonville, all documents required by the California Department of Alcohol Beverage Control (ABC), FY 2024/2025 Alcohol Policing Partnership (APP) Program, and any amendments thereto, as well as any necessary documents.

4. That the City Manager is authorized and directed to appropriate the $62,021 to the Special Grants Fund [0260].

5. That any liability arising out of the performance of this contract, including civil court actions for damages, shall be the responsibility of the grant recipient and the authorizing agency. The State of California and ABC disclaim responsibility for any such liability.

6. That grant funds received hereunder shall not be used to supplant expenditures controlled by this body.

7. That this award is not subject to local hiring freezes. ************************************

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6/6/2024 6:20:59 PM
C:\Program Files\eSCRIBE\TEMP\18205532950\18205532950,,,Report - Appropriations LLMADS Vista Montaña Bay Breeze.docx Agenda Report
MEETING DATE: Tuesday, June 11, 2024
TO: City Council
FROM: PARKS & COMMUNITY SERVICES DIRECTOR CALUBAQUIB

PARKS SUPERINTENDENT MEDINA
SUBJECT: RESOLUTION APPROPRIATING FUNDS FOR VISTA MONTAÑA AND BAY BREEZE LLMADS FOR FISCAL YEAR 2023-2024
RECOMMENDED ACTION:

Staff recommends that Council appropriate funds for Vista Montaña and Bay Breeze Lighting and Landscape Maintenance Districts (LLMADs) for Fiscal Year, 2023-2024.

BACKGROUND:

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

The Bay Breeze Subdivision is located at the southwest corner of Ohlone Parkway and Harkins Slough Road. The Bay Breeze Subdivision LLMAD is comprised of 114 single family residential parcels. The annual costs for the operation, maintenance, and servicing of landscaping and street lighting improvements are apportioned to each parcel within the district in proportion to the EDU’s (Equivalent Dwelling Unit) assigned to the parcel as a percentage of the total number of EDU’s assigned to all parcels within the district.

DISCUSSION:

The Vista Montaña LLMAD has suffered historically from an insufficient maintenance budget. This has resulted in numerous public complaints regarding the condition of the landscape and internal concerns about the state of the reserve budget to address potential infrastructure failures. Maintenance expenses this year have again exceeded the budget per the Engineer’s Report and the adopted FY 23-24 budget for this LLMAD.

These expenses include:
 Consultant work and legal fees for community outreach and the Engineer’s Report and balloting procedures for the proposed overlay assessment

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Page 2 of 2 ends

6/6/2024 6:20:59 PM
C:\Program Files\eSCRIBE\TEMP\18205532950\18205532950,,,Report - Appropriations LLMADS Vista Montaña Bay Breeze.docx  Maintenance work throughout the LLMAD in order to service all areas (current budget does not allow for this)
 Removal and replacement of problematic trees ($70,000 of this $87,000 project was covered by the City’s CalFire grant)
These additional costs will be covered through fees collected for this LLMAD this Fiscal Year and through the LLMAD’s reserve.

For the Bay Breeze LLMAD, maintenance expenses this year have slightly exceeded the budget per the Engineer’s Report and the adopted FY 23-24 budget for this LLMAD due to increases for contract landscape maintenance services. These additional costs will be funded through fees collected this Fiscal Year.

STRATEGIC PLAN:
2-Infrastructure & Environment- The Vista Montaña trees were causing infrastructure damage. Tree removal is the required first step in repairing this. Bay Breeze enjoys a lush landscape that requires periodic maintenance and will be accounted for after this fiscal year.
4-Fiscal Health- Addressing infrastructure issues now versus in the future prevents ongoing damage additional repair, mitigation costs as well as potential safety liability. 5-Public Safety- The Vista Montana LLMAD’s infrastructure issues present tripping hazards throughout the district. Overgrown vegetation in both LLMAD’s presents clearance and visibility issues.
6-Community Engagement & Well-being- Through community meetings and outreach, City Staff has been able to identify the primary concerns of Vista Montaña residents and address a large portion of the LLMAD’s issues.

FINANCIAL IMPACT:

For the Vista Montaña LLMAD for Fiscal Year 23-24, it is recommended that the Council appropriate from LLMAD funds:
 $48,000 to 959-7011
 $48,000 to 959-7361
For the Bay Breeze LLMAD for Fiscal Year 23-24, it is recommended that the Council appropriate from LLMAD funds:
 $4,000 to 958-7361
ALTERNATIVE ACTION:

The Council could elect to appropriate funds from another account to cover these expenses.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

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Reso No. (CM)
Meeting Date: 061124 SWZ ______ TV ______ PCS ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE APPROPRIATING FUNDS FOR THE VISTA MONTAÑA

AND BAY BREEZE LIGHTING AND LANDSCAPE MAINTENANCE
ASSESSMENT DISTRICTS FOR FISCAL YEAR 2023-2024
WHEREAS, the Vista Montaña and Bay Breeze Subdivisions Landscaping and Lighting Maintenance Assessment Districts were formed pursuant to the Landscaping and Lighting Act of 1972; and
WHEREAS, expenditures have exceeded the adopted budgets for these Landscape and Lighting Maintenance Assessment Districts for this Fiscal Year.

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

1. Adopting a Resolution appropriating funds 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 budget appropriation of $96,000 to the Vista Montaña budget (Fund 959) for fiscal year 2023-2024 is hereby authorized.

3. That the budget appropriation of $4,000 to the Bay Breeze budget (Fund 958) for fiscal year 2023-2024 is hereby authorized.
***********************************

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Ord No. (CM) 1
Reference:

Meeting Date: 052824 SWZ ______ TV ______ CDD ______
ORDINANCE NO. FINAL ADOPTION (CM)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE AMENDING CERTAIN SECTIONS OF CHAPTER 14-16
(DISTRICT REGULATIONS) OF TITLE 14 (ZONING) OF THE

WATSONVILLE MUNICIPAL CODE REGARDING THE CULTIVATION,

MANUFACTURE, DISTRIBUTION, TESTING, DELIVERY AND RETAIL

SALES OF CANNABIS AND CANNABIS PRODUCTS
WHEREAS, the revisions to Chapter 14-16 (District Regulations) and 14-53 (Cannabis Facilities) will provide more visibility, more location options, more streamlined permitting for cannabis business owners, and more tax revenue for the City while still providing a comprehensive regulatory program for all types of cannabis businesses in Watsonville; and
WHEREAS, the revisions to Chapter 14-16 (District Regulations) and 14-53 (Cannabis Facilities) were developed with input from the City Council, local cannabis business owners, the prevention community, and the Watsonville Police Department with the goal of balancing the welfare of youth in the community with the challenging business environment for the cannabis industry; and
WHEREAS, the Council desires to enact an ordinance updating Chapter 14-16 (District Regulations and 14-53 (Cannabis Facilities) regulating cannabis facilities and cultivation so Watsonville residents may have safe and convenient access to cannabis while also ensuring that such uses do not conflict with the General Plan, are not incompatible with surrounding uses, and are not detrimental to the public health, safety, and welfare; and
WHEREAS, on May 7, 2024, the Planning Commission of the City of Watsonville considered the proposed Ordinance and voted 7-0 to adopt Resolution No. 06-24 recommending the City Council adopt amendments to WMC Chapter 14-16 (District Regulations) and Chapter 14-53 (Cannabis Facilities); and

Page 299 of 486 ends

Ord No. (CM) 2
Reference:

Meeting Date: 052824
WHEREAS, the City Council has reviewed the Ordinance, held a public hearing thereon, and found the request to be consistent with the Findings required for a zoning text amendment pursuant to Section 14-12.807 of the Watsonville Municipal Code.

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

SECTION 1. FINDINGS.

The above recitals are hereby declared to be true and correct findings of the City Council of the City of Watsonville.

SECTION 2. ENACTMENT.

Part 12: CT-Thoroughfare Commercial District of Chapter 14-16 (District Regulations) of Title 14 (Zoning) of the Watsonville Municipal Code is hereby amended by amending subsection (b) of Section 14-16.1203 (Conditional Uses) to add the following use requiring a Special Use Permit to read in words and figures as follows:

Chapter 14-16

DISTRICT REGULATIONS
Part 12: CT – Thoroughfare Commercial District
14-16.1203 Conditional uses.
(b) The following uses require a Special Use Permit:

GLU
50 Retail cannabis facility (Type 10
license only)
All other words and figures in Section 14-16.1203(b) shall remain unchanged.

Part 13: CN-Neighborhood Commercial District of Chapter 14-16 (District Regulations) of Title 14 (Zoning) of the Watsonville Municipal Code is hereby amended

Page 300 of 486 ends

Ord No. (CM) 3
Reference:

Meeting Date: 052824
by amending subsection (b) of Section 14-16.1303 (Conditional Uses) to add the following use requiring a Special Use Permit to read in words and figures as follows:

Part 13: CN – Neighborhood Commercial District
14-16.1303 Conditional Uses
(b) The following uses require a Special Use Permit:

GLU
50 Retail cannabis facility (Type 10
license only)
All other words and figures in Section 14-16.1303(b) shall remain unchanged.

Part 14: CNS-Neighborhood Shopping Center District of Chapter 14-16 (District Regulations) of Title 14 (Zoning) of the Watsonville Municipal Code is hereby amended by amending subsection (b) of Section 14-16.1403 (Conditional Uses) to add the following use requiring a Special Use Permit to read in words and figures as follows:

Part 14: CNS – Neighborhood Shopping Center District
14-16.1403 Conditional Uses
(b) The following uses require a Special Use Permit:

DLU 50 Retail cannabis facility (Type
10 license only)
All other words and figures in Section 14-16.1403(b) shall remain unchanged.

SECTION 3. ENVIRONMENTAL COMPLIANCE.

The provisions of this ordinance are exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15061(b)(3). This section

Page 301 of 486 ends

Ord No. (CM) 4
Reference:

Meeting Date: 052824
is the "common sense exemption" that states that CEQA applies only to projects which have the potential for causing a significant effect on the environment. If the Lead Agency can determine with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Pursuant to this section, the proposed amendments and adjustments fit within the general rule that CEQA only applies to projects that have the potential for causing a significant effect on the environment, because the proposed amendments and adjustments would primarily revise administrative processes relating to cannabis operator permits and renewal of those permits and minor regulatory amendments to the operation of cannabis businesses and would therefore not have a significant effect on the environment. The proposed amendments would also not have a significant effect on the environment because they are allowing commercial retail operations in existing commercial districts and therefore the proposed amendments would not have a significant effect on the environment and therefore the activity is not subject to CEQA.

SECTION 4. SEVERABILITY.

If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.

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.

Page 302 of 486 ends

Ord No. (CM) 5
Reference:

Meeting Date: 052824
SECTION 6. EFFECTIVE DATE.

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

Page 303 of 486 ends

1 Ord No. (CM)
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824 SWZ ______ TV ______ CDD ______

ORDINANCE NO. FINAL ADOPTION (CM)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE REPEALING CHAPTER 53 (CANNABIS FACILITIES) OF TITLE 14
(ZONING) IN ITS ENTIRETY AND ADDING A NEW CHAPTER 53
(CANNABIS FACILITIES) OF TITLE 14 (ZONING) OF THE WATSONVILLE

MUNICIPAL CODE REGARDING THE CULTIVATION, MANUFACTURE,

DISTRIBUTION, TESTING, DELIVERY AND RETAIL SALES OF CANNABIS

AND CANNABIS PRODUCTS
WHEREAS, the revisions to Chapter 14-53 (Cannabis Facilities) and 14-16 (District Regulations) will provide more visibility, more location options, more streamlined permitting for cannabis business owners, and more tax revenue for the City while still providing a comprehensive regulatory program for all types of cannabis businesses in Watsonville; and
WHEREAS, the revisions to Chapter 14-53 (Cannabis Facilities) and 14-16 (District Regulations) were developed with input from the City Council, local cannabis business owners, the prevention community, and the Watsonville Police Department with the goal of balancing the welfare of youth in the community with the challenging business environment for the cannabis industry; and
WHEREAS, the Council desires to enact an ordinance updating Chapter 14-53 (Cannabis Facilities) and 14-16 (District Regulations) regulating cannabis facilities and cultivation so Watsonville residents may have safe and convenient access to cannabis while also ensuring that such uses do not conflict with the General Plan, are not incompatible with surrounding uses, and are not detrimental to the public health, safety, and welfare; and
WHEREAS, on May 7, 2024, the Planning Commission of the City of Watsonville considered the proposed Ordinance and voted 7-0 to adopt Resolution No. 06-24

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Ord No. (CM) 2
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
recommending the City Council adopt amendments to WMC Chapter 14-16 (District Regulations) and Chapter 14-53 (Cannabis Facilities); and WHEREAS, the City Council has reviewed the Ordinance, held a public hearing thereon, and found the request to be consistent with the Findings required for a zoning text amendment pursuant to Section 14-12.807 of the Watsonville Municipal Code.

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

SECTION 1. FINDINGS.

The above recitals are hereby declared to be true and correct findings of the City Council of the City of Watsonville.

SECTION 2. ENACTMENT.

Title 14 (Zoning) is hereby amended by repealing Chapter 53 (Cannabis Facilities) in its entirety and adding a new Chapter 53 (Cannabis Facilities) of the Watsonville Municipal Code to read in words and figures as follows:
o-0-o

TABLE OF CONTENTS
SECTION 1. FINDINGS. ________________________________________________ 2 SECTION 2. ENACTMENT. ______________________________________________ 2 CHAPTER 14-53 CANNABIS FACILITIES* ______________________________________3 Article 1. General Provisions__________________________________________ 3 Sec. 14-53.101 Purpose and intent._________________________________________3 Sec. 14-53.102 Legal authority. ____________________________________________4 Sec. 14-53.103 Definitions. _______________________________________________4 Sec. 14-53.104 Cannabis use permit required to engage in cannabis business. ______6 Sec. 14-53.105 Requirements for cannabis delivery by businesses outside City.______7 Sec. 14-53.106 Permit classes, numbers and location. __________________________7 Sec. 14-53.107 Cannabis equity use permit set-aside. __________________________9 Sec. 14-53.108 Cannabis use permit pre-application –Type 10 Retail Permits_______10 Sec. 14-53.109 Evidence of cannabis background check required. _______________11 Sec. 14-53.110 Approval of cannabis use permit. _____________________________12 Sec. 14-53.111 Fees and charges. ________________________________________12 Sec. 14-53.112 Change in location/business structure._________________________13 Sec. 14-53.113 Renewal or revocation. _____________________________________14

Page 305 of 486 ends

Ord No. (CM) 3
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
Sec. 14-53.114 Limitations on City’s liability. _________________________________16 Article 2. Required Findings _________________________________________ 17 Sec. 14-53.201 Findings for approval. ______________________________________17 Article 3. Operating Conditions _______________________________________ 17 Sec. 14-53.301 Uniform use permit conditions for all cannabis facilities. ___________17 Sec. 14-53.302 Type 1A, 2A, or 3A conditions (cultivation). _____________________20 Sec. 14-53.303 Type 6 and 7 conditions (manufacturing)._______________________22 Sec. 14-53.304 Type 8 conditions (testing).__________________________________25 Sec. 14-53.305 Storefront and non-storefront delivery conditions. ________________26 Sec. 14-53.306 Type 10 conditions (storefront retail). __________________________28 Sec. 14-53.307 Type 11 conditions (distribution). _____________________________31 Article 4. Operating Standards _______________________________________ 32 Sec. 14-53.401 Signs and advertising. _____________________________________32 Sec. 14-53.402 Permissible delivery locations and customers. ___________________33 Sec. 14-53.403 Recordkeeping.___________________________________________33 Sec. 14-53.404 Security. ________________________________________________35 Sec. 14-53.405 Video surveillance. ________________________________________39 Sec. 14-53.406 Additional terms and conditions.______________________________43 Article 5. Enforcement______________________________________________ 43 Sec. 14-53.501 Compliance. _____________________________________________43 Sec. 14-53.502 Inspections.______________________________________________44 Sec. 14-53.503 Appeals. ________________________________________________45 Sec. 14-53.504 Violation is misdemeanor.___________________________________45 SECTION 3. ENVIRONMENTAL COMPLIANCE. ____________________________ 45 SECTION 4. SEVERABILITY. ___________________________________________ 46 SECTION 5. PUBLICATION.____________________________________________ 46 SECTION 6. EFFECTIVE DATE._________________________________________ 46 CHAPTER 14-53 CANNABIS FACILITIES*
Article 1. General Provisions
Sec. 14-53.101 Purpose and intent.
(a) This chapter is intended to implement the Medicinal and Adult Use Cannabis Regulation and Safety Act (Senate Bill 94, approved by Governor June 27, 2017, filed with California Secretary of State on June 27, 2017, hereafter “MAUCRSA”) to accommodate the needs of medically ill persons in need of cannabis for medicinal purposes as recommended by their health care provider(s), and to provide access to same.
(b) This chapter is intended to provide access to adult-use cannabis for persons aged twenty-one (21) and over as authorized by the Control, Tax and Regulate the Adult Use Cannabis Act (“AUMA” or “Proposition 64” approved by California voters in 2016),

Page 306 of 486 ends

Ord No. (CM) 4
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
while imposing sensible regulations on the use of land to protect the City’s residents, neighborhoods, and businesses from disproportionately negative impacts. (c) It is the further purpose and intent of this chapter to regulate the cultivation, processing, manufacturing, testing, sale, delivery, distribution and transportation of cannabis and cannabis products in a responsible manner to protect the health, safety, and welfare of the residents of the City of Watsonville and to enforce rules and regulations consistent with State law.
(d) It is, in addition, the purpose and intent of this chapter to require all commercial cannabis operators to obtain and renew annually a permit to operate within the City of Watsonville.
(e) Nothing in this chapter is intended to authorize the possession, use, or provision of cannabis for purposes that violate State law. (f) This chapter is in addition to any other permits, licenses and approvals which may be required to conduct business in the City.

Sec. 14-53.102 Legal authority.

Pursuant to Sections 5 and 7 of Article XI of the California Constitution, the provisions of MAUCRSA and any subsequent State legislation and/or regulations regarding same, the City may adopt standards, requirements and regulations for the licensing and permitting of commercial cannabis activity. Any standards, requirements, and regulations regarding health and safety, security, and worker protections established by the State of California, or any of its departments or divisions, shall be the minimum standards applicable in the City to all commercial cannabis activity.

Sec. 14-53.103 Definitions.

The following definitions shall apply to this chapter:

The definitions promulgated for the California Cannabis Cultivation Program in Division 8 (Cannabis Cultivation) of Title 3 (Food and Agriculture) of the California Code of Regulations Section 8000 et seq., 3 CCR 8000.

The definitions promulgated for the California Bureau of Cannabis Control in Division 42 (Bureau of Cannabis Control) of Title 16 (Professional and Vocational Regulations) of the California Code of Regulations Section 5000 et seq., 16 CCR 5000.

Page 307 of 486 ends

Ord No. (CM) 5
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(a) “Cannabis processing” shall mean the drying, curing, grading, or trimming of cannabis within a permitted cannabis cultivation facility or as part of a standalone cannabis processing facility.
(b) “Discrepancy” shall mean a five percent difference between the licensee’s physical inventory and the inventory recorded in the track and trace system. (c) “Facility” shall mean any building or structure used for or related to the cultivation, processing, testing, retail sales, delivery or manufacturing of cannabis. (d) “Manager” shall mean a person who participates in the direction, control, or supervision of a permittee.
(e) “Owner” shall mean a person with an aggregate ownership interest of 20 percent or more in the commercial cannabis business, unless the interest is solely a security, lien, or encumbrance. For purposes of this section, “aggregate” means the total ownership interest held by a single person through any combination of individually held ownership interests in a commercial cannabis business and ownership interests in an entity that has an ownership interest in the same commercial cannabis business. For example, a person who owns 10 percent of the stock in a commercial cannabis business as an individual shareholder and 100 percent of the stock in an entity that owns 10 percent of the stock in the same commercial cannabis business has a 20 percent aggregate ownership interest in the commercial cannabis business. (1) An individual who manages, directs, or controls the operations of the commercial cannabis business, including but not limited to:
(a) A member of the board of directors of a nonprofit.
(b) A general partner of a commercial cannabis business that is organized as a partnership.
(c) A non-member manager or managing member of a commercial cannabis business that is organized as a limited liability company. (d) The trustee(s) and all persons who have control of the trust and/or the commercial cannabis business that is held in trust.
(e) The chief executive officer, president or their equivalent, or an officer, director, vice president, general manager or their equivalent

Page 308 of 486 ends

Ord No. (CM) 6
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(2) If the commercial cannabis business is owned in whole or in part by an entity and the entity includes individuals who manage, direct, or control the operations of the commercial cannabis business, as described in subsection (a)(2)(E), those individuals shall also be disclosed as owners. Department of Cannabis Control Medicinal and Adult-Use Commercial Cannabis Regulations (January 2023) Page 23 of 222
(3) If available evidence indicates that an individual qualifies as an owner, the Department may notify the applicant or licensee that they must either disclose the individual as an owner and submit the information required by section 15002 or demonstrate that the individual does not qualify as an owner. (f) “Permittee” shall mean a person issued a cannabis use permit under this chapter to engage in commercial cannabis activity.
(g) “Youth Center” shall mean any public or private facility that is exclusively used to host recreational or social activities for minors (under 18 years of age), such as private youth membership organizations or clubs, social service teenage club facilities, or amusement facilities. “Youth Centers” does not include any building, location, or facility where any programs, activities, or services: (a) are offered at private residences, (b) involve martial arts/combat sports, cultural or similar education, or physical fitness, or (c) are offered for fewer than five (5) hours per day each day the building, location, or facility is open. Notwithstanding the foregoing, Youth Centers shall also mean any facility determined by the City of Watsonville Parks Department to be a recreation center in a City park.

Sec. 14-53.104 Cannabis use permit required to engage in cannabis business. (a) A cannabis use permit shall be required before engaging in commercial cannabis activity in the City.
(b) An application for a cannabis use permit shall include the information and completed and verified documents as may be prescribed by the Zoning Administrator. (c) The Zoning Administrator shall determine and provide submittal requirements and instructions for cannabis use permit applications. (d) All application fees shall be paid when the application is submitted. (e) No application shall be complete until the Zoning Administrator notifies an applicant in writing that the Zoning Administrator deems the application complete.

Page 309 of 486 ends

Ord No. (CM) 7
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
Sec. 14-53.105 Requirements for cannabis delivery by businesses outside City.

No cannabis delivery business located outside the City shall deliver cannabis and/or cannabis products to a customer located inside the City unless all the following requirements are met:
(a) The business for delivery is properly licensed by the State of California and by any California city or county.
(b) The delivery business has first obtained, paid for and maintains in full force and effect a City business license under Chapter 3-4.
(c) The delivery business has registered with the Police Department using forms approved by the Chief of Police and provided a copy of its State license and local government approval permitting it to engage in commercial cannabis delivery. (d) The delivery business has obtained and continues to maintain in full force and effect the required State license or licenses for the commercial cannabis activities in which they are engaged.

Sec. 14-53.106 Permit classes, numbers and location.
(a) Cannabis use permit classifications are:

Watsonville Cannabis Use Permit Classifications
Classification Activity Description
1A Cultivation Indoor. Up to five thousand (5,000) square feet of canopy space.
2A Cultivation Indoor. Five thousand one (5,001) to ten thousand (10,000) square feet of canopy space.
3A Cultivation Indoor. Ten thousand one (10,001) to twenty-two thousand (22,000) square feet of canopy space.
6 Manufacture Manufacturer for products not using volatile solvents.
7 Manufacture Manufacturer for products using volatile solvents. 8 Testing laboratory Independent lab for the purpose of testing cannabis and cannabis products.
9 Retailer nonstorefrontMust have a licensed premises but is not open to the public. Sales conducted exclusively by delivery.
10 Retailer No more than three (3) retail sites.

Page 310 of 486 ends

Ord No. (CM) 8
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
Classification Activity Description
11 Distribution Cannabis distribution.

Cannabis
processing
A facility where cannabis is dried, cured, trimmed
and/or graded.
(b) Any cannabis use permit shall automatically expire if cannabis business activity ceases for ninety (90) calendar days or more.
(c) The number of cannabis facilities in the City shall not exceed:

Permitted Numbers of Cannabis Use Permits
Cannabis Use Permit
Classifications
Number of Equity
Licenses Maximum Facilities Allowed
Type 1A, 2A, or 3A
(cultivation)
1 6
Type 6 or 7
(manufacturing)
1 15
Type 8 (testing) 1 No limit
Type 9 (non-storefront
retail)
7; only those cultivation and/or
manufacturing permittees holding a
valid City use permit shall be eligible
to obtain a Type 9 cannabis use
permit to sell only products
cultivated/manufactured at their local
Watsonville facility
Type 10 (storefront
retail)
1 3
Type 11 (distribution)* 1 2 (standalone)
Processing 1 3
* Distribution shall be allowed in conjunction with a valid permit for cultivation, manufacturing, and/or processing license with approval of an administrative use permit.

A permittee may have only one (1) of each of the following classes of cannabis use permits:

License Type Description
1A, 2A, or 3A Cultivation
6 or 7 Manufacturing
9 Non-storefront
delivery
10 Retail

Page 311 of 486 ends

Ord No. (CM) 9
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
License Type Description
11 Distribution
Cannabis processing
(d) Type 1A, 2A, or 3A (cultivation) cannabis use permits shall be limited to two (2) parcels.
(e) More than one (1) cannabis facility may be located on a single parcel. A separate permit is required for each cannabis facility.

Separation Requirements1
Cultivation
and
Processing
Manufacture Distribution Testing Retail
Schools, licensed
daycares
and youth centers
600’ 600’ 600’ 600’ 600’
Park 600’ NA NA NA NA
Residential district 250’ NA NA NA NA
Legal residential use 100’ NA NA NA NA ‘
Faith-based facility or
library
600’ NA NA NA NA
1 Separation distance from K-12 schools, daycares and youth centers shall be measured from property line to property line. Separation distance for cultivation facilities shall be measured from parcel line of sensitive use to nearest wall of cultivation facility.

Sec. 14-53.107 Cannabis equity use permit set-aside.
(a) A minimum of one (1) cannabis use permit for each cannabis license type shall be reserved in order to provide for support of those businesses determined eligible under Chapter 5-49 by the Cannabis Equity Officer. Such equity applications shall be processed in conformance with the provisions of this chapter with the following exceptions:
(1) Equity applications shall be scored against other equity applicants during the application process, and shall not compete with nonequity applicants. (2) Entitlement permit fees for eligible equity applicants shall be waived. (3) If during an application period no equity applicants have been identified, the equity license shall be made available to a nonequity applicant.

Page 312 of 486 ends

Ord No. (CM) 10
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(4) Eligibility as an equity applicant shall be determined prior to and/or during the pre-application process.
(b) Renewal. In order to renew a cannabis equity use permit, an equity applicant must provide proof that it continues to satisfy the equity criteria at the time of its annual permit renewal.

An equity applicant that no longer satisfies the equity criteria but is compliant with all other requirements of Chapter 5-49 will be entitled to renew the cannabis use permit but will not be eligible for any other benefits of an equity assistance program. (c) Cannabis equity use permits are nontransferable.
(d) The ownership structure of the cannabis equity business shall not be modified for five (5) years after the cannabis equity permittee has commenced business, unless such modification maintains eligibility in the cannabis equity program as determined by the Cannabis Equity Officer.

Sec. 14-53.108 Cannabis use permit pre-application –Type 10 Retail Permits When the Zoning Administrator determines that the number of active Type 10 Retail Permits in the City is less than the number of cannabis Type 10 Retail Permits allowed, the Zoning Administrator shall advertise in at least one (1) newspaper of general circulation and post on the City’s website an announcement that the City will accept applications for additional cannabis Type 10 Retail Permits. The notice shall identify the City’s application web page, requirements, application deadline(s), and contact information for questions.
(a) The Zoning Administrator shall determine an appropriate period within which to allow submittal of pre-applications.
(b) The Zoning Administrator shall determine the form and requirements for a cannabis Type 10 Retail pre-application.
(c) Applicants shall submit cannabis Type 10 Retail pre-applications to the Zoning Administrator.
(d) Cannabis Type 10 Retail pre-applicants shall be subject to a competitive, merit-based review to determine eligibility to apply for a cannabis use permit.

Page 313 of 486 ends

Ord No. (CM) 11
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(e) Staff shall then schedule interviews with three (3) more applicants than the number of cannabis Type 10 Retail permits available.
(f) City staff shall review and score all pre-applications after expiration of the pre-application period. A Type 10 Retail pre-application selection committee shall consist of representatives of the Police Chief, Fire Chief, Community Development Director, and City Manager and an independent third-party cannabis consultant selected by the Zoning Administrator and shall convene to review applications and interview applicants. The Type 10 Retail pre-applicants determined to best meet the community’s needs shall then be asked to submit an application for a cannabis use permit. (g) If the cannabis Type 10 Retail pre-applicant interview panel approves any cannabis retail pre-application, the applicant shall have (6) six months to submit a cannabis use permit application to the Community Development Department for consideration.

Sec. 14-53.109 Evidence of cannabis background check required. (a) All applicants for a cannabis use permit must be legally authorized for cannabis activity under State law.
(b) All applicants shall provide the Zoning Administrator with evidence of submittal of a LiveScan criminal background check for all owners of the business. (c) The criminal background checks completed for business owners must at a minimum disclose:
(1) Whether any owner has ever plead guilty or no contest or been convicted of a violent felony as defined by California Penal Code Section 667.5(c), or equivalent offenses in other states or under the laws of the United States.; (2) Whether any owner has ever plead guilty or no contest or been convicted of a felony involving dishonesty, fraud or deceit, including but not limited to fraud, forgery, theft, or embezzlement as those offenses are defined in California Penal Code Sections 186.11, 470, 484, and 504a, respectively; or equivalent offenses in other states or under the laws of the United States; or (3) Whether any owner has ever plead guilty or no contest or been convicted of a felony, possession, transportation, distribution or similar activities related to controlled substances, as defined in the Federal Controlled Substances

Page 314 of 486 ends

Ord No. (CM) 12
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
Act, not including cannabis-related offenses for which the conviction occurred before the passage of MAUCRSA.
(d) Evidence that any owner has plead guilty or no contest or been convicted of any of the offenses enumerated in this section may be grounds for denial of a cannabis use permit.

Sec. 14-53.110 Approval of cannabis use permit.

Cannabis use permits shall be processed in accordance with the procedures described in Part 5 of Chapter 14-12.

Approval of a Type 10 Retail cannabis use permit shall be contingent on the following:
(a) Type 10 Cannabis retail applicant must have been identified as a potential candidate the pre-application process; and
(b) The applicant must obtain approval of a cannabis use permit within six (6) months of selection as a potential Type 10 retail cannabis use permit holder; and (c) Obtaining all necessary State license(s) within six (6) months of positive recommendation through the pre-application process.

If any one (1) or more of the above items have not been satisfied, the Type 10 retail cannabis use permit shall not be approved.

Sec. 14-53.111 Fees and charges.

An applicant, permittee, owner, manager and employee shall timely and fully pay required fees when due. The amount of the following required fees shall be established by Council resolution:
(a) A Type 10 cannabis retail pre-application fee is due and payable in full when a cannabis pre-application is submitted;
(b) A Type 10 cannabis retail pre-application interview fee is due and payable in full within ten (10) days of notice that a pre-application interview has been granted; (c) A cannabis use permit application fee is due and payable in full when a qualified applicant submits a cannabis use permit application;

Page 315 of 486 ends

Ord No. (CM) 13
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(d) A cannabis use permit renewal fee is due and payable for each location when a cannabis use permit renewal application is submitted to the City; (e) Any other fees for inspection, auditing or investigation not included within the other fees associated with a cannabis use permit application or a cannabis use permit renewal application.

Sec. 14-53.112 Change in location/business structure.
(a) A cannabis use permit does not run with the land. It is personal to the permittee. A permittee may apply to relocate contingent upon first obtaining a new cannabis use permit for the new location, and approval from the State licensing agency for the new location. The process and the fees for relocation shall be the same as the process and fees in Sections 14-53.108 and 14-53.112.
(b) Prior to any change in information provided in the application for a cannabis use permit or any change in status of compliance with the provisions of this chapter, including any change in the applicant’s ownership or control (maintenance of a minimum 20 percent ownership), the permittee shall file an application for a new cannabis use permit with the Zoning Administrator and pay the applicable cannabis use permit fee. No change in ownership shall be effective prior to approval of a new cannabis use permit. (c) A permittee may change the form of its business entity upon application to the Zoning Administrator and presentation of a new business license application under Chapter 3-4 if membership of the new business entity is substantially similar to the original permittee, owner and managers.
(d) If the original permittee is an unincorporated association, mutual or public benefit corporation, agricultural or consumer cooperative and transitions to or forms a new business entity as allowed under MAUCRSA; provided, that the board of directors (or, in the case of an unincorporated association, the owners and managers) are substantially the same as the original permittee.
(e) Although an application for a new cannabis use permit is not required in these two (2) circumstances, the permittee shall notify the Zoning Administrator in writing of the change prior to the change becoming effective by filing a new business license application with a written explanation of the change. Failure to comply with this provision is grounds for cannabis use permit revocation.

Page 316 of 486 ends

Ord No. (CM) 14
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(f) Any attempt to transfer a cannabis use permit directly or indirectly in violation of this section is void and is ground for revocation of the cannabis use permit.

Sec. 14-53.113 Renewal or revocation.
(a) Each cannabis use permit shall be valid for a period not exceeding one (1) year and require renewal each year on or before June 30th. Renewal of cannabis use permit shall be as provided for in this section.
(b) No cannabis use permit issued under this chapter may be renewed unless:
(1) A new application has been filed as set forth in Section 14-53.114 no later than March 30th or ninety (90) days before expiration date of the use permit, whichever first occurs;
(2) The cannabis use permit renewal application fee in Section 14-

53.111 has been paid; and
(3) The applicant satisfies all requirements of this chapter. (c) Cannabis Use Permit Renewal Application.
(1) An application to renew a cannabis use permit shall be on forms provided by the Zoning Administrator. The forms shall be signed under penalty of perjury, and shall include, but not be limited to, the following information:
(i) The names of the applicant’s owners and managers;
(ii) The street address;
(iii) The Santa Cruz County Tax Assessor’s parcel number of the existing cannabis facility;
(iv) A copy of the applicant’s State-issued license to engage in a cannabis business;
(v) The applicant’s and owner’s waiver and release of the City from any and all liability arising from the application for a cannabis use permit, the issuance of the cannabis use permit, the denial of the cannabis use permit, or the enforcement of the conditions of the cannabis use permit;

Page 317 of 486 ends

Ord No. (CM) 15
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(vi) For retail cannabis businesses, provide proof that at least fifteen (15%) percent of product inventory is sourced from cannabis businesses located in the City of Watsonville, the County of Santa Cruz, and/or the County of Monterey;
(vii) Proof of compliance with workers’ compensation State insurance requirements;
(viii) Identification of any changes to the information the applicant submitted on the original cannabis use permit renewal application; (ix) Any law enforcement or enforcement activity related to the permittee’s operations during the past calendar year;
(x) A representation that the applicant continues to hold in good standing any license required by the State of California to operate a cannabis facility; and
(xi) Such other information as the Zoning Administrator deems reasonably necessary to conduct a thorough review of the cannabis use permit renewal application.
(d) Review of the Use Permit Renewal Application.
(1) Upon receipt of an application for renewal of a cannabis use permit, the Zoning Administrator shall update the permittee’s file and perform whatever investigation the Zoning Administrator deems necessary to determine whether to grant or deny the cannabis use permit. The investigation may include a physical inspection of the facility and any delivery vehicles, at the discretion of the Zoning Administration.
(2) Issuance of a renewal cannabis use permit is a discretionary act. No applicant shall be automatically entitled to receive a use permit renewal based solely on meeting the basic requirements of this chapter. It is not necessary for the Zoning Administrator to issue findings before granting a use permit renewal to an applicant who is requesting to maintain already-approved business operations. (e) The Zoning Administrator or designee may revoke or elect not to renew a cannabis use permit issued under this chapter if:

Page 318 of 486 ends

Ord No. (CM) 16
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(1) The applicant or permittee and its owners and managers have not complied at all times with this chapter.
(2) Any failure to comply with the cannabis use permit conditions of approval or the Municipal Code.
(3) Any other facts, circumstances or conditions which indicate that renewal of the cannabis use permit will be detrimental to the health, safety, or welfare of the residents of the City.
(4) The Zoning Administrator or designee is aware of any law enforcement or State license enforcement activity related to the permittee’s operations either with the locally permitted facility or any other facility owned and/or operated by the permittee in any other jurisdiction during the past calendar year that led to a documented, material violation of one (1) or more conditions of the facility’s cannabis use permit.

Sec. 14-53.114 Limitations on City’s liability.
(a) To the fullest extent permitted by law, the City shall not be liable whatsoever, with respect to approving any permit pursuant to this chapter or the operation of any facility approved pursuant to this chapter. As a condition of approval of a cannabis use permit as provided in this chapter, the applicant or its legal representative shall:
(1) Execute an agreement, in a form approved by the City Attorney, agreeing to indemnify, defend (at applicant’s sole cost and expense), and hold the City, its officers, elected and appointed officials, employees, representatives, and agents, harmless and defend from any and all claims, losses, damages, injuries, or liabilities of any kind arising out of, or in any way related to, the City’s issuance or denial of a cannabis use permit, the registration or operation of a cannabis facility, the process used by the City in making any decision, the alleged violation of any Federal, State, or local laws by the applicant, or the prosecution of the applicant or permittee or its owners or managers for violation of Federal or State laws;
(2) Maintain insurance at the coverage limits and of the types required by the City’s risk manager in compliance with State law; (3) Name the City as an additional insured on all liability policies;

Page 319 of 486 ends

Ord No. (CM) 17
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(4) Agree to reimburse the City for all costs and expenses, including any court costs and attorney fees that the City may be required to pay as a result of any legal challenge related to the City’s approval of a cannabis use permit. The City may, at its sole discretion, participate at its own expense in the defense of any such action, but such participation shall not relieve the permittee of its obligation hereunder.

Article 2. Required Findings
Sec. 14-53.201 Findings for approval.

When considering applications for a cannabis use permit, the Zoning Administrator or Planning Commission shall evaluate the impact of the proposed use on and its compatibility with surrounding properties and neighborhoods to ensure the appropriateness of the use at a particular location to determine whether it can make all required findings of Section 14-12.513 (required findings for conditional use permits).

Article 3. Operating Conditions
Sec. 14-53.301 Uniform use permit conditions for all cannabis facilities.

All cannabis use permits shall be subject to all general conditions of this section and all specific conditions for the cannabis use permit class.
(a) Parking area lighting and exterior lighting mounted on the facility shall be balanced and shall not result in glare on adjoining properties, shall complement the security systems required in this chapter to ensure that all areas of the location are visible, and shall provide increased lighting at all entrances to the facility. The lighting required in this subsection shall be on from dusk to dawn.
(b) No person, other than a licensed security guard, shall be in possession of any firearm while on the premises without having first obtained a license from the State and City authorizing the person to be in possession of such firearm. (c) Each applicant or permittee shall notify the City within 24 hours after discovering any of the following: diversion, theft, loss, or any criminal activity involving the cannabis activity or operation of the facility; significant discrepancies identified during inventory; or any breach of security.

Page 320 of 486 ends

Ord No. (CM) 18
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(d) No permittee shall be delinquent in the payment of any State and City taxes and fees.
(e) The permittee shall hold all required State licenses under the Cannabis Regulation and Safety Act (Business and Professions Code Section 19300, et seq.), as it may be amended, and under all other applicable State laws. (f) At any time during hours of operation and without notice, City may enter the facility to observe compliance of the facility operation, and may inspect facility records, books, accounts, financial data, and all data and records relevant to its cannabis use permit for the purposes of conducting an audit or compliance review. (g) It is unlawful for any person to refuse to allow, impede, obstruct, or interfere with an inspection, or the review of the copying of records and monitoring (including recordings) including, but not limited to, the concealment, destruction, and falsification of any paper, electronic or other records deemed necessary and reasonable to administer the requirements of this chapter.
(h) It shall be unlawful and a violation of this chapter for any person to employ any other person at a facility who is not at least twenty-one (21) years of age. (i) All weighing devices must be maintained in compliance with local, County, State, or Federal law and comply with applicable regulations regarding device registration with the Santa Cruz County Agricultural Commissioner.
(j) All facilities shall follow all local, County, State, and Federal requirements for solid waste and hazardous waste disposal. The County of Santa Cruz Environmental Health Division may inspect the facility at any time during business hours to ensure compliance with this section.
(k) Facilities shall employ security personnel as follows:
(1) All security personnel shall register and maintain valid registration status with the State of California’s Department of Consumer Affairs. At no time shall any security personnel register with the State at any level that is less than that of a State-licensed private security officer. Proof of application and registration for all security personnel shall be maintained by the applicant or permittee and shall consist of copies of all relevant documentation including: application forms, receipts for application fees and LiveScan fees, and actual proof of registration.

Page 321 of 486 ends

Ord No. (CM) 19
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(2) While on duty, all security personnel shall have a nameplate containing the security personnel’s full name and the word “SECURITY” printed in bold, capital letters. The nameplate shall be exhibited prominently on the clothing, at chest level, and shall be visible and easily read at all times. The nameplate shall be a minimum of two (2”) inches high and four (4”) inches wide, with the required information printed in capital letters, at least three-fourths (3/4”) inches high and in a contrasting color. As an alternative to a nameplate, the security personnel’s name and the word “SECURITY” may be embroidered on the security personnel’s outermost garment with the required information meeting the above specifications and located at chest level.
(l) Each permittee shall conspicuously display its cannabis use permit and State license within the facility. Each facility that engages in delivery or transportation services shall carry a copy of the facility cannabis use permit in all vehicles that deliver or transport cannabis.
(m) No applicant or permittee may hold a license from the State Department of Alcoholic Beverage Control to sell alcohol beverages, nor may the facility include a business that sells alcohol beverages. No alcohol may be stored, sold, dispensed or used on the facility.
(n) The facility shall take all necessary and reasonable steps, including the refusal of service to any customer of the applicant or permittee, to prevent:
(1) The distribution of cannabis to minors;
(2) Revenue from the sale or distribution of cannabis from going to criminal enterprises, gangs and cartels;
(3) The diversion of cannabis from California to any other state; (4) State-authorized cannabis activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; (5) Violence and the use of firearms in the cultivation and distribution of cannabis;
(6) Drugged driving or the exacerbation of other adverse public health consequences associated with cannabis use;

Page 322 of 486 ends

Ord No. (CM) 20
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(7) Growing of cannabis on public lands and the attendant public safety and environmental dangers posed by cannabis production on public lands; and (8) Cannabis possession or use on Federal property.
(o) All cannabis facilities shall include the following language on all job postings as well as all applications for employment in both English and Spanish in minimum twelve (12) point font all caps:

THE CANNABIS INDUSTRY IS NOT A FEDERALLY RECOGNIZED BUSINESS,

THEREFORE THERE MAY BE RISKS TO INDIVIDUALS WORKING IN THIS

INDUSTRY, WHO MAY NEED TO DISCLOSE WORK INFORMATION ON
FEDERAL APPLICATIONS.
(p) The manufacture and sale of flavored combustible products (intended for inhalation or vaporization) is prohibited.
(q) Microbusiness—Commercial Activity. All cultivation, manufacturing, distribution, and retail activities performed by a permittee under a Type 12 microbusiness permit shall occur on the same licensed premises. Areas of the premises for manufacturing and cultivation shall be separated from the distribution and retail areas by a wall and all doors between the areas shall remain closed when not in use.

Sec. 14-53.302 Type 1A, 2A, or 3A conditions (cultivation).

All cannabis use permits for Type 1A, 2A or 3A cultivation facilities shall be approved only if subject to all of the conditions of this section.
(a) Outdoor commercial cultivation is prohibited. All cultivation of cannabis must occur within a permanent, permitted structure.
(b) In no case shall cannabis plants be visible from a public or private road, sidewalk, park or any common public viewing area.
(c) Commercial cannabis cultivation which is permitted in the City of Watsonville shall not exceed twenty-two thousand (22,000) square feet of canopy space permitted by State law with a valid cannabis use permit. (d) A permittee may cultivate cannabis at more than one (1) location if each location is separately permitted and the total square footage of cannabis cultivated does not exceed the total allowed under the license type.

Page 323 of 486 ends

Ord No. (CM) 21
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(e) Cannabis cultivation shall be conducted in accordance with State and local laws related to land conversion, grading, electricity, water usage, water quality, woodland and riparian habitat protection, agricultural discharges, and similar matters. (f) Pesticides and fertilizers shall be properly labeled and stored to avoid contamination through erosion, leakage or inadvertent damage from pests, rodents or other wildlife.
(g) Cultivation shall at all times occur in such a way as to ensure the health, safety, and welfare of the public, the employees working at the facility, visitors to the area, neighboring properties, and the end users of the cannabis being cultivated, to protect the environment from harm to streams, fish, and wildlife; to ensure the security of the cannabis being cultivated; and to safeguard against the diversion of cannabis. (h) The applicant or permittee shall prohibit loitering by persons outside the facility, either on the premises or within one hundred (100’) feet of the premises. (i) The cultivation of cannabis shall not create hazards due to the use or storage of materials, processes, products, chemicals, fertilizers, or wastes. (j) The interior and exterior of the facility, including driveways, sidewalks, parking strips, fire access roads and streets on or adjacent to the premises, shall be kept in a clean and safe condition.
(k) Exterior lighting on the premises and location shall ensure the safety of the public and the members and employees of the applicant or permittee while not disturbing surrounding residential or commercial areas.
(l) Each permittee shall operate in a manner such that the cultivation of cannabis does not adversely affect the health or safety of nearby properties through the creation of mold, mildew, dust, glare, heat, noise, noxious gases, odor, smoke, traffic, vibration, or other impacts.
(m) The facility shall follow all pesticide use requirements of local, State, and Federal law. City staff may inspect the facility at any time during business hours to ensure compliance with this section.
(n) Odor control devices and techniques shall be incorporated in all facilities to ensure that odors from cannabis are not detectable off site. Facilities shall provide a sufficient odor-absorbing ventilation and air filtration system so that odor generated inside the facility that is distinctive to its operation is not detected outside of the facility, anywhere

Page 324 of 486 ends

Ord No. (CM) 22
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
on adjacent property or public rights-of-way, on or about the exterior or interior common area walkways, hallways, breezeways, foyers, lobby areas, or any other areas available for use by common tenants or the visiting public, or within any other unit located inside the same building as the facility. Facilities shall install and maintain the following equipment or any other equipment which the Chief of Police determines has the same or better effectiveness:
(1) A ventilation and air filtration system that prevents internal odors from being emitted externally;
(2) An air filtration system that creates negative air pressure between the facility’s interior and exterior so that the odors generated inside the facility are not detectable on the outside of the facility.

Sec. 14-53.303 Type 6 and 7 conditions (manufacturing).

All cannabis use permits for Type 6 or 7 manufacturing facilities shall be approved only if subject to all conditions of this section. All cannabis use permits shall be subject to all of the general conditions of this section and the specific conditions of this article for the specific permit type.
(a) Cannabis manufacturing shall only be permitted pursuant to Section 14-

53.101 or any subsequently created manufacturing State license as defined in MAUCRSA, and may be permitted to operate only within those zone districts as defined in Section 14-53.106.
(b) No compressed gases used in the manufacturing may be stored in containers that exceed the amount approved by the Watsonville Fire Department and authorized by this cannabis use permit. Each facility shall be limited to a total number of tanks authorized by the Watsonville Fire Department.
(c) Cannabis manufacturing facilities may use heat, screens, presses, steam distillation, ice water, ethanol and other methods without employing solvents or gases to create kief, hashish, bubble hash, or infused dairy butter, or oils or fats derived from natural sources, and other extracts.
(d) If an extraction process uses a professional grade closed loop CO2 gas extraction system every vessel must be certified by the manufacturer for its safe use. The CO2 must be of at least ninety-nine (99%) percent purity.

Page 325 of 486 ends

Ord No. (CM) 23
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(e) Closed loop systems for compressed gas extraction systems must be commercially manufactured and bear a permanently affixed and visible serial number. (f) Certification from an engineer licensed by the State of California, or by a certified industrial hygienist, must be provided to the Community Development Department for a professional grade closed loop system to certify that the system was commercially manufactured, is safe for its intended use, and was built to codes of recognized and generally accepted good engineering practices, including but not limited to:
(1) The American Society of Mechanical Engineers (ASME); (2) American National Standards Institute (ANSI);
(3) Underwriters Laboratories (UL); or
(4) The American Society for Testing and Materials (ASTM). (5) The certification must contain the signature and stamp of the professional engineer or industrial hygienist and serial number of the extraction unit being certified.
(g) Professional closed loop systems and other equipment used for extraction must be approved for use by the Watsonville Fire Department and meet all fire, safety, and building code requirements specified in the California Building Reference Codes. (h) Facilities may use food grade glycerin, ethanol, and propylene glycol solvents to create or refine extracts. Ethanol should be removed from the extract in a manner to recapture the solvent and ensure that it is not vented into the atmosphere. (i) Facilities creating cannabis extracts must develop standard operating procedures, good manufacturing practices, and a training plan prior to producing extracts for the marketplace.
(j) Any person using solvents or gases in a closed looped system to create cannabis extracts must be fully trained on how to use the system, have direct access to applicable material safety data sheets and handle and store the solvents and gases safely.
(k) Parts per million for one (1) gram of finished extract cannot exceed State standards for any residual solvent or gas when quality assurance tested.

Page 326 of 486 ends

Ord No. (CM) 24
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(l) Preparation of Edible Cannabis Products.
(1) All food products, food storage facilities, food-related utensils, equipment and materials shall be approved, used, managed and handled in accordance with the California Retail Food Code (Section 113700 et seq. of the California Health and Safety Code). All food products shall be protected from contamination at all times; and
(2) All food handlers shall be clean, in good health and free from communicable diseases.

Baked products (e.g., brownies, bars, cookies, cakes), tinctures, and other nonrefrigerated type items may be sold or distributed at a cannabis retailer. The County of Santa Cruz Environmental Health Department may inspect the facility at any time during business hours to ensure compliance with this section. (3) Products with specific youth appeal and adverse health impacts, such as products that mix other addictive and psychoactive substances with cannabis (e.g., nicotine, alcohol, or added caffeine), artificial flavors or additives that increase underage appeal, cannabis “candies” produced in character shapes (gummy bears, Swedish Fish, animal-shaped chocolates) that would have higher appeal to youth, shall be awarded fewer points in the application process. (4) Cannabis products shall not be created in the shape of a human, animal, fruit, or any youth-friendly depiction.
(m) Packaging of Cannabis.
(1) Before sale or delivery of any edible cannabis or edible cannabis product the same shall be labeled and in tamper-evident packaging which at least meets the requirements of California Business and Professions Code Section 19347, as the same may be amended from time to time or superseded or replaced by subsequent State legislation or by any department or division of the State of California. The City Council may impose additional packaging and labeling requirements on cannabis or cannabis products.
(2) Cannabis or cannabis products shall be packaged in resealable, tamper-evident, child-proof, opaque packaging with text and adult-intended design. Packaging that has special appeal to youth, such as cartoons, recreational

Page 327 of 486 ends

Ord No. (CM) 25
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
images (sports, musicians, etc.), names referencing pop culture figures, or bright, eye-catching colors, is prohibited.

Sec. 14-53.304 Type 8 conditions (testing).

All cannabis use permits for Type 8 testing facilities shall be approved only if subject to all of the conditions of this section.
(a) Testing labs shall be required to conduct all testing in a manner pursuant to Business and Professions Code Section 26100 and shall be subject to State and local law. Each testing lab shall be subject to additional regulations as determined from time to time as more regulations are developed under this chapter and any subsequent State of California legislation regarding the same.
(b) Testing labs shall conduct all testing in a manner consistent with general requirements for the competence of testing and calibrations activities, including sampling using verified methods.
(c) All cannabis testing laboratories performing testing shall obtain and maintain ISO/IEC 17025 accreditation as required by the Bureau. (d) Testing labs shall destroy any harvest batch whose testing sample indicates noncompliance with health and safety standards required by the Bureau unless remedial measures can bring the cannabis or cannabis products into compliance with quality standards as specified by law and implemented by the Bureau. (e) Each operator shall ensure that a testing laboratory employee takes the sample of cannabis or cannabis products from the distributor’s premises for testing required by State law and that the testing laboratory employee transports the sample to the testing laboratory.
(f) Except as provided by State law, a testing laboratory shall not acquire or receive cannabis or cannabis products except from a permittee in accordance with State law, and shall not distribute, sell, or dispense cannabis, or cannabis products, from the licensed premises from which the cannabis or cannabis products were acquired or received. All transfer or transportation shall be performed pursuant to a specified chain of custody protocol.
(g) A testing laboratory may receive and test samples of cannabis or cannabis products from a qualified patient or primary caregiver only if the qualified patient or primary caregiver presents the qualified patient’s valid physician’s recommendation for

Page 328 of 486 ends

Ord No. (CM) 26
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
cannabis for medicinal purpose. A testing lab shall not certify samples from a qualified patient or primary caregiver for resale or transfer to another party or permittee. All tests performed by a testing laboratory for a qualified patient or primary caregiver shall be recorded with the name of the qualified patient or primary caregiver and the amount of the cannabis or cannabis products received.

Sec. 14-53.305 Storefront and non-storefront delivery conditions.

All cannabis use permits for non-storefront and storefront delivery facilities shall be approved only if subject to all of the conditions of this section. (a) The business operating the delivery service shall provide the Chief of Police with evidence of a valid State license for a facility on whose authorization the delivery service is performing the delivery function.
(b) A cannabis business may receive orders for cannabis deliveries through any technology platform owned and controlled by the business, or independently approved by the Chief of Police, or his or her designee, that enables customers to arrange for or facilitate the transfer of cannabis and/or cannabis products by the cannabis business to registered customers.
(c) The business operating the delivery service shall furnish to the Chief of Police the year, make, model, color, license plate number, and numerical vehicle identification number (VIN) for any and all vehicles that will be used to deliver cannabis goods.
(d) Non-storefront delivery by those cannabis cultivation and manufacturing facilities with valid local use permits shall be limited to only those products cultivated and/or manufactured by the licensed facility.
(e) Age verification using an ID scanner at point of delivery that matches required State-approved identification. This identification must match information and address on file as part of purchase.
(f) Delivery shall be only to the person named as the customer ordering. A signature shall be required upon transfer to be verified at delivery to match with all electronically or physically stored identification and signatures. (g) Delivery hours are limited to 8:00 a.m. to 10:00 p.m. with no new orders initiated after 9:30 p.m. for same day delivery.

Page 329 of 486 ends

Ord No. (CM) 27
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(h) All cannabis products shall remain locked in vehicle. (i) Detailed education about cannabis products (including concentration, dosage, titration and proper use warnings) shall be listed on the ordering platform and with product dissemination.
(j) Utilize GPS surveillance mapping to track delivery provider location. (k) Delivery vehicles shall be equipped with a camera to enhance safety while conducting all deliveries.
(l) A cannabis delivery business shall not deliver cannabis or cannabis product to an individual if there is reason to believe that cannabis or cannabis product will be diverted to a person under twenty-one (21) years of age unless that person is a qualified patient or a person with an identification card, as those terms are defined in Health and Safety Code Section 11362.7.
(m) A cannabis business shall not deliver cannabis or cannabis product to any jurisdiction that prohibits deliveries.
(n) Incident Reporting Requirements.
(1) Any vehicle accident resulting in injury to any person shall be reported to the local police department where the incident occurred, a manager of the retailer immediately, and to the Chief of Police, or his or her designee, within twenty-four (24) hours. The report shall include the date, time, location, involved vehicle and driver, circumstances and local police department case number. (2) For any vehicle accident resulting in property damage only, the delivery driver shall exchange driver, vehicle, and insurance information with all involved parties, and the accident may be reported to the local police department where the incident occurred, a manager of the retailer immediately, and the Chief of Police, or his or her designee, within twenty-four (24) hours. The report shall include the date, time, location, involved vehicle and driver, circumstances, and local police department case number, as applicable.
(3) Any loss of cannabis, cannabis product, or money shall be reported to the local police department where the incident occurred and a manager of the retailer immediately, and to the Chief of Police, or his or her designee, within twenty-four (24) hours. The report shall include the date, time, location, involved vehicle and driver, circumstances and local police department case number. Any

Page 330 of 486 ends

Ord No. (CM) 28
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
theft of cannabis, cannabis product, or money during the delivery process shall be immediately reported to the local police department where the incident occurred and a cannabis manager immediately, and, if the incident did not occur within the investigative jurisdiction of the City of Watsonville Police Department, a duplicate City of Watsonville Police Department notification will be made by calling the nonemergency citizen contact dispatch center number.

Sec. 14-53.306 Type 10 conditions (storefront retail).

All cannabis use permits for Type 10 storefront retail facilities shall be approved only if subject to all of the conditions of this section.
(a) No more than the number of cannabis retailers adopted by resolution may operate within the City of Watsonville at any one (1) time and shall be issued a permit by the City of Watsonville.
(b) Parking for retail cannabis facilities shall be a minimum of one (1) parking space per three hundred (300) square feet of floor area dedicated to the business, plus 1 space for each employee on shift.
(c) Retailers shall verify the age and all necessary documentation of each individual to ensure the customer is not under the age of eighteen (18) years. If the potential customer is eighteen (18) to twenty (20) years old, retailer shall confirm the customer’s possession of a valid doctor’s recommendation and/or Health and Safety Code Section 11362.71 identification card (medical marijuana card). For adult-use purchases, retailers shall verify that all customers are twenty-one (21) years of age or older for the purchase of cannabis or cannabis products. Individuals must show their government-issued identification, and, in the case of medical cannabis facilities, their physician’s recommendation, or a cannabis card issued pursuant to Health and Safety Code Section 11362.71 in order to gain access into the retailer. (d) Entrances into the sales floor shall have entry strictly controlled. A physical barrier shall be utilized to limit access to and entry into the retailer to separate it from the reception/lobby area. Doctor recommendations are not to be obtained or provided at the retail location.
(e) Uniformed licensed security personnel shall be employed to monitor site activity, control loitering and site access, and to serve as a visual deterrent to unlawful activities at all times that the retail facility is open in compliance with Section 14-

53.404(a)13.

Page 331 of 486 ends

Ord No. (CM) 29
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(f) Retailers may have only that quantity of cannabis and cannabis products to meet the daily demand readily available for sale on site in the retail sales area of the retailer. Additional product may be stored in a secured, locked area to which customers, vendors, and visitors shall not have access.
(g) All restroom facilities shall remain locked and under the control of management.
(h) Retailers and microbusinesses authorized to conduct retail activities shall only serve customers who are within the licensed premises except as specifically allowed. (1) The sale of cannabis goods shall not occur through a pass-through window or a slide-out tray to the exterior of the premises. (2) No cannabis goods shall be sold and/or delivered through a drivethrough window. (3) Notwithstanding subsections (1) and (2) above, licensed retailers or licensed microbusinesses authorized to engage in retail sales may provide curbside delivery conducted pursuant to the following:
(a) A licensed retailer or licensed microbusiness authorized to engage in storefront sales at their licensed premises may conduct sales through curbside delivery. Cannabis goods that have been purchased by a customer may be delivered to the customer in a vehicle parked immediately outside the licensed retail premises in spaces clearly marked and set aside for curbside delivery customers. Curbside delivery of cannabis goods must occur under video surveillance and meet the requirements of DCC section 15044, subsection © for recording point-of-sale areas. Retail employees engaging in curbside delivery must verify each customer’s age pursuant to subsection 14-53.306 (c). Licensed retailers who are only authorized to engage in retail sales through delivery shall not conduct sales through curbside delivery.
(b) Prior to initiating a curbside delivery service, a retailer shall submit a Minor Modification application to the Zoning Administrator in order to modify the cannabis use permit to include procedures for curbside delivery, identify camera locations, additional lighting, and any other information deemed necessary to ensure that the proposed curbside delivery service will not cause negative impacts to health and safety.

Page 332 of 486 ends

Ord No. (CM) 30
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(i) Retailers or microbusinesses shall not operate as or with a drive-in or drivethrough at which cannabis goods are sold to persons within or about a motor vehicle. (j) All cannabis goods sold by a retail business shall be contained in childresistant packaging. (k) Retailers shall record point-of-sale areas and areas where cannabis goods are displayed for sale on the video surveillance system. At each point-of-sale location, camera placement must allow for the recording of the facial features of any person purchasing or selling cannabis goods, or any person in the retail area, with enough clarity to determine identity.
(l) A retail permittee or microbusiness permittee who is engaged in retail sale shall hire or contract for security personnel who are at least twenty-one (21) years of age to provide security services for the licensed retail premises. Refer to Section 14-

53.404(a)(13) for security personnel requirements.
(m) Access to Retailer Premises.
(1) Access to the premises of a retail permittee shall be limited to individuals who are at least twenty-one (21) years of age. (2) Notwithstanding subsection (n)(1) of this section, individuals who are at least 18 years of age and in possession of a valid physician’s recommendation shall be granted access to the premises of a retail permittee for the sole purpose of purchasing medicinal cannabis consistent with the physician’s recommendation. (n) Authorized Sales. A retailer shall only sell adult-use cannabis and adult-use cannabis products to individuals who are at least twenty-one (21) years of age. A retailer may sell medicinal cannabis, medicinal cannabis products, adult-use cannabis, and adultuse cannabis products to individuals who are at least eighteen (18) years of age, but not yet twenty-one (21), if those individuals are in possession of a valid physician’s recommendation. Medicinal cannabis sales to individuals twenty-one (21) years of age and older are unrestricted.
(o) Limited Access Areas. A retailer shall establish limited access areas and permit only authorized individuals to enter the limited access areas. Authorized individuals include individuals employed by the retailer as well as any outside vendors, contractors, or other individuals conducting business that requires access to the limited access area.

All individuals granted access to the limited access area shall be at least twenty-one (21)

Page 333 of 486 ends

Ord No. (CM) 31
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
years of age, and if not employed by the retailer, shall be escorted at all times by an employee of the permittee/permittee. A retailer shall maintain a log of all individuals who are not employees who are granted access to the limited access area. These logs shall be made available to the Chief of Police or the Development Services Director upon request.
(p) Operating hours of the storefront retailer license shall be limited to the hours of 8:00 a.m. to 10:00 p.m., seven (7) days a week.
(q) Storefront/Retail Security Requirements. All provisions incorporated within Section 14-53.404 (Security) are directly applicable to and binding on all facilities, including all storefront/retail businesses.
(r) “No smoking” signs shall be placed near the entrance and exit of the business.
(s) The retail cannabis premise shall have an independent exterior entrance that is not shared with any other business or residence. (t) No vending machines shall be allowed.
(u) For retail cannabis businesses, provide proof that at least fifteen (15%) percent of product inventory is sourced from cannabis businesses located in the City of Watsonville, the County of Santa Cruz, and/or the County of Monterey; (v) Retail facilities shall not charge a slotting fee to Watsonville cultivation/manufacturing businesses for the display of local product in the retail facility.

Sec. 14-53.307 Type 11 conditions (distribution).

All cannabis use permits for Type 11 distribution facilities shall be approved only if subject to all conditions of this section.
(a) After taking physical possession of a cannabis goods batch, the distributor shall contact a testing laboratory and arrange for a laboratory employee to come to the distributor’s licensed premises to select a representative sample for laboratory testing. (b) A distributor shall ensure that all cannabis goods batches are stored separately and distinctly from other cannabis goods batches on the distributor’s premises.

Page 334 of 486 ends

Ord No. (CM) 32
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(c) The distributor shall ensure that the batch size from which the sample is taken meets the requirements of State law, specifically the testing provisions within the California Code of Regulations.
(d) A distributor or an employee of the distributor shall be physically present to observe the laboratory employee obtain the sample of cannabis goods for testing and shall ensure that the increments are taken from throughout the batch. The sampling shall be video-recorded, and the recording kept available to State and local authorities for a minimum of one hundred eighty (180) days, pursuant to Section 5305 of the California Code of Regulations.
(e) A distributor shall not transport cannabis or cannabis products to a licensed retail facility until and unless it has verified that the cannabis or cannabis products have been tested and certified by a testing lab as being in compliance with State health and safety requirements pursuant to Sections 5705, 5710 and 5714 of the California Code of Regulations.
(f) Each facility that engages in distribution services shall carry a copy of the use permit in all vehicles that distribute cannabis.

The distributor shall be in compliance with State and local cannabis regulations at all times, including California Business and Professions Code Division 10 (Cannabis), as may be amended.

Article 4. Operating Standards
Sec. 14-53.401 Signs and advertising.

Exterior signage shall comply with the sign standards set forth in Watsonville Municipal Code Chapter 14-21.
(a) A facility shall not print, publish, advertise, or disseminate in any way or by any means, other than a dedicated business Internet website accessible only through an age gate portal.
(b) A facility may provide an entry in the telephone directory with the name, location, and phone number of the facility. Such directory entry may identify the business as a “cannabis facility.” The telephone directory shall not include: pricing of products, details regarding specific cannabis products, or cannabis photography or graphics related to the cannabis plant or cannabis products.

Page 335 of 486 ends

Ord No. (CM) 33
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(c) Banners, sandwich boards, flags, billboards, placards, and persons waving signs are prohibited.
(d) All signage and advertising shall comply with the state of California Business and Professions Code Sections 26150 through 26155 and any modifications or relocations of these code sections. In addition, any form of advertisement or signage that includes pricing of cannabis and cannabis products, details related to specific cannabis products, or photography or graphics of the cannabis plans or cannabis products is prohibited except on a dedicated business website accessible only through an age gate portal.

Sec. 14-53.402 Permissible delivery locations and customers.

Cannabis delivery businesses permitted to engage in delivery of cannabis and cannabis products inside the City of Watsonville are subject to the following requirements:
(a) A licensed facility shall not deliver cannabis goods to an address located on publicly owned land or any address on land or in a building leased by a public agency. (b) A licensed facility shall comply with all requirements of State and local law pertaining to the cannabis permit and all subsequent policies, procedures and regulations which may be amended by the Community Development Department from time to time in order to enforce this chapter.

Sec. 14-53.403 Recordkeeping.
(a) Each facility shall maintain an inventory control and reporting system to track and report on all aspects of the facility including, but not limited to, such matters as cannabis tracking, inventory data, and gross sales (by weight and sale) and shall ensure that such information is compatible with the City’s recordkeeping systems and complies with State law. The system must have the capability to produce historical transactional data for review by the City of Watsonville. All information provided to the City pursuant to this subsection shall be confidential and shall not be disclosed, except as otherwise may be required under the law. Such system must be authorized by the City Manager or their designee.
(b) Each applicant or permittee shall maintain at the premises all records and documents required by this chapter and all the information and records listed below:
(1) The name, address, and telephone number(s) of the owner, landlord and/or lessee of the location;

Page 336 of 486 ends

Ord No. (CM) 34
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(2) The name, address, and telephone number of each patient and primary caregiver, along with a copy of the written documentation provided by each qualified patient designating his or her primary caregiver; (3) The name, business address, and telephone number of each attending physician who provided a physician’s recommendation for any patient of the applicant or permittee;
(4) The records of all qualified patients with a valid identification card and primary caregivers with a valid identification card may be maintained by the applicant or permittee using only the identification card number issued by the State pursuant to California Health and Safety Code Section 11362.7 et seq., in lieu of the information required by this section;
(5) Complete and up-to-date records regarding the amount of cannabis cultivated, produced, harvested, stored, or packaged at its cultivation site; (6) Complete and up-to-date manifest records regarding cannabis transfers from the applicant or permittee’s cultivation site to dispensing location(s), including the date and time of the transfer; the name and address of the cultivation facility and the name and address of the supplier if different from the cultivation facility; the amount, form, type, batch and lot number of cannabis transferred; the time of departure from the cultivation facility; the time of arrival at the dispensing location; the names of the employees distributing the product; and the name of the employee who received the product at the dispensing location; (7) Complete and up-to-date records documenting each transfer of cannabis from the applicant or permittee’s dispensing location to patients including the amount provided, the form or product category in which the cannabis was provided, the date and time provided, the name of the employee making the transfer, and the amount of monetary or other transaction; (8) All receipts of the applicant or permittee, including but not limited to all contributions and all expenditures incurred by the applicant or permittee for the cultivation and dispensing of cannabis; and
(9) Records demonstrating compliance with State and Federal rules and regulations regarding reporting and taxation of income received.

Page 337 of 486 ends

Ord No. (CM) 35
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(c) The permittee shall review the information recorded in the track and trace system at least once every 30 calendar days to ensure its accuracy, including at a minimum:
(1) Reconciling on-hand inventory of cannabis and cannabis product with the records in the track and trace system; and
(2) Reviewing the permitee’s authorized users and removing any users who are no longer authorized to enter information into the track and trace system. (d) If a permittee finds a discrepancy between the on-hand inventory and the track and trace system, the licensee shall conduct an audit and notify the DCC and Watsonville City Manager in writing if the discrepancy is significant as defined in DCC section 15034
(e) All records required by this section shall be maintained by the applicant or permittee for a period of seven (7) years and shall be made available by the applicant or permittee to the Zoning Administrator and any City official charged with enforcing the provisions of this Code upon request.

Sec. 14-53.404 Security.
(a) A permitted facility shall implement enough security measures to deter and prevent the unauthorized entrance into areas containing cannabis or cannabis products, and to deter and prevent the theft of cannabis or cannabis products at the facility. Except as may otherwise be determined by the City Manager or his/her designee(s), these security measures shall include, but shall not be limited to, all of the following:
(1) Alarm system (perimeter, fire, and panic buttons).
(2) Remote monitoring of alarm systems by licensed security professionals.
(3) Perimeter lighting systems (including motion sensors) for after-hours security.
(4) Perimeter security and lighting as approved by the Police Chief and Director of the Community Development Department or his/her designee.

Page 338 of 486 ends

Ord No. (CM) 36
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(5) Preventing individuals from remaining on the premises of the facility if they are not engaging in an activity directly related to the permitted operations of the facility.
(6) Establishing limited access areas accessible only to authorized facility personnel.
(7) Except for live growing plants which are being cultivated at a cultivation operation, all cannabis and cannabis products shall be stored in a secured and locked vault or vault equivalent. All safes and vaults shall be compliant with Underwriters Laboratories burglary-resistant and fire-resistant standards. All cannabis and cannabis products, including live plants that are being cultivated, shall be kept in a manner as to prevent diversion, theft, and loss. (8) Installing twenty-four (24) hour security surveillance cameras of at least HD-quality to monitor all entrances and exits to and from the premises, all interior spaces within the facility which are open and accessible to the public, all interior spaces where cannabis, cash or currency is being stored for any period of time on a regular basis and all interior spaces where diversion of cannabis could reasonably occur. All cameras shall record in color. All exterior cameras shall be in weatherproof enclosures, shall be located so as to minimize the possibility of vandalism, and shall have the capability to automatically switch to black and white in low light conditions. The facility shall be responsible for ensuring that the security surveillance camera’s footage is remotely accessible by the City Manager or his/her designee(s), and that it is compatible with the City’s software and hardware.

In addition, remote and real-time, live access to the video footage from the cameras shall be provided to the City Manager or his/her designee(s). Video recordings shall be maintained for a minimum of ninety (90) days and shall be made available to the City Manager or his/her designee(s) upon request. Video shall be of sufficient quality for effective prosecution of any crime found to have occurred on the site of the facility and shall be capable of enlargement via projection or other means. Internet Protocol address information shall be provided to the Watsonville Police Department by the facility, to facilitate remote monitoring of security cameras by the Department or its designee.
(9) Sensors shall be installed to detect entry and exit from all secure areas and shall be monitored in real time by a security company licensed by the State of California Bureau of Security and Investigative Services.

Page 339 of 486 ends

Ord No. (CM) 37
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(10) Panic buttons shall be installed in all facilities with direct notification to the Watsonville Police Department dispatch and shall be configured to immediately alert dispatch for the Watsonville Police Department. (11) Having a professionally installed, maintained, and monitored realtime alarm system by a security company licensed by the State of California Department of Consumer Affairs Bureau of Security and Investigative Services.

Such security system shall be operational twenty-four (24) hours a day seven (7) days a week.
(12) Any bars installed on the windows or the doors of the facility shall be installed only on the interior of the building.
(13) Security personnel shall be on site during operating hours as well as any hours in which employees may be on site before or after regular operating hours. Security personnel must be at least 21 years of age, licensed by the State of California Bureau of Security and Investigative Services personnel and comply with Chapters 11.4 and 11.5 of Division 3 of the Business and Professions Code.

Security personnel shall be subject to the prior review and approval of the City Manager or his/her designee(s), with such approval not to be unreasonably withheld. Firearms may be carried by security personnel while they are on duty if authorized by the Chief of Police.
(14) Each facility shall have the capability to remain secure during a power outage and shall ensure that all access doors are not solely controlled by an electronic access panel to ensure that locks are not released during a power outage.
(15) Entrance areas are to be locked at all times and under the control of a designated responsible party that is either (i) an employee of the facility, or (ii) a licensed security professional.
(a) For retail facilities, the entrance area to the sales floor is to be under the control of a designated responsible party that is either (i) an employee of the facility, or (ii) a licensed security professional, during hours of operation.
(16) Each facility shall have an accounting software system in place to provide point-of-sale data as well as audit trails for both product and cash, where applicable.

Page 340 of 486 ends

Ord No. (CM) 38
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(17) Each facility shall demonstrate to the Chief of Police, City Manager or their designees, compliance with the State’s track and trace system for cannabis and cannabis products, as soon as it is operational.
(18) Each facility shall have a professionally installed video surveillance system, access control and intrusion alarm systems designed to protect the inventory, facility, and employees. Each business shall have network security protocols that are certified by Underwriters Laboratories. (19) Exterior vegetation shall be planted, altered and maintained in a fashion that precludes its use as a hiding place for persons on the premises. (20) Emergency access and emergency evacuation plans that are in compliance with State and local fire safety standards.
(b) Each facility shall identify a designated security representative/liaison to the City of Watsonville, who shall be reasonably available to meet with the City Manager or his/her designee(s) regarding any security related measures and/or operational issues.

The designated security representative/liaison shall, on behalf of the cannabis facility, annually maintain a copy of the current security plan on the cannabis facility to present to the City Manager or his/her designee upon request that meets the following requirements:
(1) Confirms that a designated manager will be on duty during business hours and will be responsible for monitoring the behavior of employees. (2) Identifies all managers of the cannabis facility and their contact phone numbers.
(3) Confirms that first aid supplies and operational fire extinguishers are in the service areas and the manager’s office.
(4) Confirms that burglar, fire, and panic alarms are operational and monitored by a licensed security company twenty-four (24) hours a day, seven (7) days a week, and provides contact information for each licensed security company. (5) Identify enough licensed, interior and exterior security personnel who will monitor individuals inside and outside the facility, the parking lot, and any adjacent property under the business’ control.
(6) Confirm that the licensed security personnel shall regularly monitor the parking lot and any adjacent property to ensure that these areas are: (i) free of

Page 341 of 486 ends

Ord No. (CM) 39
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
individuals loitering or causing a disturbance; (ii) are cleared of employees and their vehicles one-half (1/2) hour after closing.
(c) As part of the application and permitting process each facility shall have a storage and transportation plan, which describes in detail the procedures for safely and securely storing and transporting all cannabis, cannabis products, any hazardous materials that may be used by the business, and any currency. (d) The facility shall cooperate with the City whenever the City Manager or his/her designee(s) makes a request, with or without prior notice, to inspect or audit the effectiveness of any security plan or of any other requirement of this chapter. (e) A facility shall notify the City Manager or his/her designee(s) within twentyfour (24) hours after discovering any of the following:
(1) Significant discrepancies identified during inventory. A significant discrepancy in inventory is defined as a five percent difference between the licensee’s physical inventory and the inventory recorded in the track and trace system.
(2) Diversion, theft, loss, or any criminal activity involving the facility or any agent or employee of the facility.
(3) The loss or unauthorized alteration of records related to cannabis, customers or employees or agents of the facility.
(4) Any other breach of security.
(f) Compliance with the foregoing requirements shall be verified by the Zoning Administrator before commencing business operations. The Zoning Administrator may supplement these security requirements once operations begin upon request of the business owner.

Sec. 14-53.405 Video surveillance.
(a) Minimum Requirements. The following video surveillance requirements shall apply to all facilities:
(1) Prior to exercising the privileges of a facility, an applicant must install a fully operational video surveillance and security camera recording system. The

Page 342 of 486 ends

Ord No. (CM) 40
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
recording system must record in digital format and meet the requirements of this chapter.
(2) All video surveillance records and recordings must be stored in a secure area that is only accessible to an applicant or permittee’s management staff.
(3) Video surveillance records and recordings must be made available upon request to the Division, the relevant local licensing authority, or any other State or local law enforcement agency for a purpose authorized by the Municipal Code or for any other State or local law enforcement purpose. (4) Video surveillance records and recordings of point-of-sale areas shall be held in confidence by all employees and representatives of the Division, except that the Division may provide such records and recordings to the relevant local licensing authority, or any other State or local law enforcement agency, for a purpose authorized by the Municipal Code or for any other State or local law enforcement purpose.
(b) Video Surveillance Equipment.
(1) Video surveillance equipment shall, at a minimum, consist of digital or network video recorders, cameras capable of meeting the recording requirements described in this rule, video monitors, digital archiving devices, and a color printer capable of delivering still photos.
(2) All video surveillance systems must be equipped with a failure notification system that provides prompt notification to the applicant or permittee of any prolonged surveillance interruption and/or the complete failure of the surveillance system.
(3) Permittees are responsible for ensuring that all surveillance equipment is properly functioning and maintained so that the playback quality is suitable for viewing and the surveillance equipment is capturing the identity of all individuals and activities in the monitored areas.
(4) All video surveillance equipment shall have sufficient battery backup to support a minimum of four (4) hours of recording in the event of a power outage. (c) Placement of Cameras and Required Camera Coverage.

Page 343 of 486 ends

Ord No. (CM) 41
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(1) Camera coverage is required for all limited access areas, point-ofsale areas, security rooms, all points of ingress and egress to limited access areas, all areas where cannabis or cannabis-infused product is displayed for sale, and all points of ingress/egress to the exterior of the licensed premises. (2) Camera placement shall be capable of identifying activity occurring within twenty (20’) feet of all points of ingress and egress and shall allow for the clear and certain identification of any individual and activities on the licensed premises.
(3) At each point-of-sale location, camera coverage must enable recording of the patients’, caregivers’ or customer(s)’ and employee(s)’ facial features with sufficient clarity to determine identity. (4) All entrances and exits to the facility shall be recorded from both indoor and outdoor vantage points.
(5) The system shall be capable of recording all predetermined surveillance areas in any lighting conditions. If the licensed premises has a cannabis cultivation area, a rotating schedule of lighted conditions and zeroillumination can occur as long as ingress and egress points to flowering areas remain constantly illuminated for recording purposes.
(6) Areas where cannabis is grown, tested, cured, manufactured, or stored shall have camera placement in the room facing the primary entry door at a height which will provide a clear unobstructed view of activity without sight blockage from lighting hoods, fixtures, or other equipment. (7) Cameras shall also be placed at each location where the following activities occur:
(i) Weighing, packaging, transport, preparation, or tagging of cannabis or cannabis products.
(ii) Storage and counting of cash.
(8) At least one (1) camera must be dedicated to record the access points to the secured surveillance recording area.
(d) Location and Maintenance of Surveillance Equipment.

Page 344 of 486 ends

Ord No. (CM) 42
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
(1) The surveillance room or surveillance area shall be a limited access area.
(2) Surveillance recording equipment must be housed in a designated, locked and secured room or other enclosure with access limited to authorized employees, agents of the City, County and State for a purpose authorized by this Code or for any other State or local law enforcement purpose, and service personnel or contractors.
(3) Permittees must keep a current list of all authorized employees and service personnel who have access to the surveillance system and/or room on the licensed premises. Permittees must keep a surveillance equipment maintenance activity log on the licensed premises to record all service activity including the identity of the individual(s) performing the service, the service date and time and the reason for service to the surveillance system.
(4) Off-site monitoring and video recording storage of the licensed premises by the permittee or an independent third party is authorized as long as standards exercised at the remote location meet or exceed all standards for onsite monitoring. (5) Each cannabis licensed premises located in a common or shared building must have a separate surveillance room/area that is dedicated to that specific licensed premises. Commonly owned facilities located in the same local jurisdiction may have one (1) central surveillance room located at one (1) of the commonly owned licensed premises which simultaneously serves all of the commonly owned facilities. The facility that does not house the central surveillance room is required to have a review station, printer, and map of camera placement on the premises. All minimum requirements for equipment and security standards as set forth in this section apply to the review station. (e) Video Recording and Retention Requirements.
(1) All camera views of all limited access areas must be continuously recorded twenty-four (24) hours a day. The use of motion detection is authorized when a permittee can demonstrate that monitored activities are adequately recorded.
(2) All surveillance recordings must be kept for a minimum of ninety (90) days and be in a format that can be easily accessed for viewing. Video recordings

Page 345 of 486 ends

Ord No. (CM) 43
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
must be archived in a format that ensures authentication of the recording as legitimately captured video and guarantees that no alteration of the recorded image has taken place.
(3) The permittee’s surveillance system or equipment must have the capabilities to produce a color still photograph from any camera image, live or recorded, of the licensed premises.
(4) The date and time must be embedded on all surveillance recordings without significantly obscuring the picture. The date and time must be synchronized with any point-of-sale system.
(5) Time is to be measured in accordance with the official United States time established by the National Institute of Standards and Technology and the U.S. Naval Observatory in Pacific time.

Sec. 14-53.406 Additional terms and conditions.

Based on the information set forth in the application, the Zoning Administrator or Planning Commission may impose reasonable terms and conditions on the proposed operations of the facility in addition to those specified in this chapter.

Article 5. Enforcement
Sec. 14-53.501 Compliance.
(a) All cannabis facilities shall pay any applicable sales, use, business or other tax, and all license, registration, or other fees pursuant to Federal, State, County, and local law, or any other regulatory agencies as applicable. (b) All cannabis facilities and their related permittees or cooperatives shall fully comply with all the provisions of the Compassionate Use Act of 1996, the Medical Cannabis Program Act, the 2008 Attorney General Guidelines, MAUCRSA, any subsequently enacted State law or regulatory, licensing, or certification requirement, all applicable provisions of this Code, and any specific, additional operating procedures and measures as may be imposed as conditions of approval of the regulatory permit. (c) Nothing in this chapter shall be construed as authorizing any actions which violate State or local law regarding the cultivation, transportation, manufacture, provision, sale, transfer, or disposition of cannabis.

Page 346 of 486 ends

Ord No. (CM) 44
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
Sec. 14-53.502 Inspections.
(a) The Zoning Administrator shall have the right to enter all cannabis facilities from time to time unannounced during the facility’s hours of operation for the purpose of making reasonable inspections to observe and enforce compliance with this chapter, to inspect and copy records required to be maintained under this chapter, or to inspect and view recordings made by security cameras, all without requirement for a search warrant, subpoena, or court order.
(b) Nothing in this chapter requires the disclosure of any patient’s private medical record.
(c) The Zoning Administrator may summarily suspend or revoke a cannabis regulatory permit, or disqualify an applicant from the registration process, or elect not to renew a regulatory permit if any of the following, singularly or in combination, occur:
(1) The Zoning Administrator determines that the facility has failed to comply with any requirement of this chapter or any condition of approval or a circumstance or situation has been created that would have permitted the Zoning Administrator to deny the regulatory permit pursuant to Section 14-53.114; (2) The permittee or facility has conducted itself or is being conducted in a manner that creates or results in a public nuisance;
(3) Ownership is changed without the new owners securing a regulatory permit;
(4) The applicant or permittee relocates to a different location or premises;
(5) The facility fails to allow inspection and/or copying of the security recordings, the activity logs and records required under this chapter, or the premises by authorized City officials;
(6) Applicant violates State law or rulemaking for the purpose of compliance with this chapter.

Page 347 of 486 ends

Ord No. (CM) 45
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
Sec. 14-53.503 Appeals.

Any decision regarding or pertaining to the regulatory permit process set forth in this chapter, or any action taken by the Zoning Administrator pursuant hereto, may be appealed per Section 14-10.1100 et seq.

Sec. 14-53.504 Violation is misdemeanor.

As provided in Section 1-2.01, any violation of this chapter is a misdemeanor.

SECTION 3. ENVIRONMENTAL COMPLIANCE.

The provisions of this ordinance are exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15061(b)(3). This section is the "common sense exemption" that states that CEQA applies only to projects which have the potential for causing a significant effect on the environment. If the Lead Agency can determine with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Pursuant to this section, the proposed amendments and adjustments fit within the general rule that CEQA only applies to projects that have the potential for causing a significant effect on the environment, because the proposed amendments and adjustments would primarily revise administrative processes relating to cannabis operator permits and renewal of those permits and minor regulatory amendments to the operation of cannabis businesses and would therefore not have a significant effect on the environment. The proposed amendments would also not have a significant effect on the environment because they are allowing commercial retail operations in existing commercial districts and therefore the proposed amendments would not have a significant effect on the environment and therefore the activity is not subject to CEQA.

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Ord No. (CM) 46
Reference: Ordinance No. 1404-20 (CM) (Repeal)
Meeting Date: 052824
SECTION 4. SEVERABILITY.

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.
******************************

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x
El Pajaro CDC Watsonville Impact
El Pájaro CDC elpajarocdc www.elpajarocdc.org #LWIBLC2024

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x
“Promoting equal access to
economic opportunity”
 SBA Designation as a Women’s
Business Center
 Lending license from State of
California

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Watsonville Impact
Clients Served since 2017
Clients Served
Session Type 2017 2018 2019 2020 2021 2022 2023 2024 Grand Total Initial/New 41 104 104 157 187 216 336 162 1238
Follow-up 93 203 223 287 348 478 617 436 1505
Grand Total 108 227 243 333 711 762 997 757 1887
Hispanic Origin
Hispanic, Latino, or Spanish
origin 0.885630499
Not of Hispanic, Latino, or
Spanish origin 0.100879765
Prefer not to say 0.016422287
Race
Prefer not to say 0.431671554
Native American 0.33313783
White/Caucasian 0.235190616
Asian 0.013489736
Black or African American 0.009970674
Native Hawaiian or Pacific
Islander 0.004105572
Alaska Native 0.002932551
Middle Eastern 0.00058651

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Watsonville Impact
Clients Served since 2017
Gender
Female 0.690322581
Male 0.33255132
Intersex 0.00058651
Non-binary 0.001173021
Prefer not to say 0.006451613
Industry
Health Care and Social Assistance 0.245227606
Accommodation and Food Services 0.234214391
Service Establishment 0.22907489
Retail Trade 0.083700441
Agriculture, Forestry, Fishing and Hunting 0.079295154
Other 0.059471366
Manufacturer 0.033773862
Construction 0.013215859
Transportation and Warehousing 0.011013216
Professional, Scientific, and Technical Services 0.011013216

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x
Watsonville Impact
Clients Served since 2017
Access to Capital
Capital Source 2017 2018 2019 2020 2021 2022 2023 2024 Grand Total COVID and Disaster Relief Funding 0 3,055,578 2,898,056 571,650 187,000 66,000 6,778,284 El Pajaro CDC Loan Program 53,191 76,000 310,000 319,000 758,191 EPCDC Forgivable Loan 274,170 274,170
Other Lending Agency 512,500 0 426,747 349,239 537,220 316,000 250,000 2,391,706 Grand Total 512,500 0 426,747 3,404,817 3,488,467 963,650 1,021,170 385,000 10,202,351

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x
Women’s Business Center
SEED PROGRAM – COLABORATION WITH STATE

OF CALIFORNIA EMPLOYMENT TRAINING PANEL
(ETP)
Childcare Home Graduates: 45
Total Amount of SEED grants distributed:
$268,700.

Childcare “slots” supported: 342 children.

Childcare Industry Jobs: 52 Full time 8
Part-time
Childcare Home Business
Development and Expansion

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x
El Pajaro CDC Microloan Program

COUNTY OF SANTA CRUZ FORGIVABLE

LOAN PROGRAM
(ARPA FUNDS )
Program Goal: Improving Facilities and
retaining workforce.
 Businesses Supported: 32
 Funds distributed: $334,170
Total Investment in the Watsonville
Childcare Business Community:
$602.8K
Childcare Home Business
Development and Expansion

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x
Conference tailored to cultivating,
transforming and investing in women
driving change in the business world and our
communities.
• Women Leaders Panel
• enriching workshops
• opportunity to meet the well-deserving
recipient of the 2024 Mujer Al Mando
award!

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• 270 business assisted x
• 100 Obtained full licensing
and operated successfully within
our kitchen
• 40 launched ventures outside the kitchen
including food trucks, cottage operations,
restaurants and at farmer's markets
• 130 received general assistance
Commercial Kitchen Incubator
10th Anniversary
Connects entrepreneurs to various business opportunities, including farmers' markets, retail access, catering jobs, and more!

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x
Support incubator business in
scaling up
Support small local farmers in
developing value added
products
Commercial Kitchen Incubator
Co-Packing

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Page 361 of 486 ends

Watsonville Brillante &
Vallarta Super Market
Grand Opening
Tomorrow Morning

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City Clerk - Elections
Workshop for those Interested
in running for office

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Music In the plaza
Returns June 21, 2024
6-8pm
Spirit of Watsonville
4th of July Parade

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Watsonville Public Library
Outreach Schedule

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See, Click, Fix
Reporting App

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Illegal Fireworks Messaging
Started Last week

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California Planning Roundtable
Visited Watsonville
On Friday, June 8th and
Saturday, June 9th

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Tiny Home Project

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We need to hear from you
We are here to help
Safety Non-Emergency Issues
471-1151
Other issues call City Admin
768-3010

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1 Public Safety Tax Revenue Measure
9th Annual Report
REPORTING PERIOD: July 1, 2023 – June 30, 2024
May 2024 Page 372 of 486
2 Eric Sturm Neighborhood Leader
Rick Danna Realtor
P J Mecozzi Business Owner
Robby Olson Pastor
Vacant
Vacant
Vacant

OVERSIGHT COMMITTEE

FISCAL ACCOUNTABILITY
Fiscal Year 2023-24 marks the third fiscal year to be completed under the terms of Measure Y, approved by voters on March 2, 2020. Measure Y directs 54% of tax revenues to be allocated to the Police Department, 38% allocated to the Fire Department, and 8% to the Parks and Community Services Department. Attached to this report is the Measure Y Annual Comprehensive Financial Report for the Fiscal Year ending June 30. 2023. Our auditors, Maze and Associates, have issued us an unqualified opinion. Which means there are no audit findings. The audit has confirmed that Measure Y funds for the Fiscal Year 2022-23 were spent as required by Measure Y.

Maintenance of Effort
Measure Y requires that an annual maintenance of effort (MOE) be met. The MOE is an amount of General Fund spending which must be dedicated to Police and Fire Services. The MOE for Police and Fire services is defined as the Fiscal Year 2023-24 adopted General Fund operating budget for each department inflated by change in the April-to-April San Francisco Bay Area Consumer Price Index (CPI). The MOE requirements for Fiscal Year 2022-23 and FY 2023-24 are shown in Table 1 below. The MOE is met and projected to be exceeded for both fiscal years.

MEASURE Y

ACTUALS FOR
FY 2022 - 2023
Fire Dept.
(38%)
Police Dept.
(54%)
Parks Dept.
(8%)
Revenues
Tax Revenue
Interest
Other Revenue
Expenditures
Total Revenues
Totals Expenses
Change in Fund Balance
$1,957,390
$66,220
$0
$1,547,624
$5,310,390
$5,240,015
$70,375
$ 2,781,554
$,46,600
$36,734
$3,257,536
$412,082
$9,810
$0
$434,855

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3 Measure Y funding is being used to hire and retain nine (9) additional personnel - eight (8) firefighters and one (1) administrative staff person. Due to retirements and resignations in both the General Fund and Measure Y, the department has struggled to continually keep the nine allocated Measure Y positions filled. At the start of this reporting period, there were two firefighter positions vacant. At the end of this reporting period, only one Measure Y firefighter position is vacant.

Apparatus and Equipment
Funds were used for the following apparatus and
equipment related purchases:
• Fire Hose
• Radio for apparatus
• Fleet maintenance
• LP15 Heart monitor/Defibrillators
The cost of the LP15 Heart monitor/defibrillators has
been spread out over three years. The total cost is
$120,964. The first of three payments of $40,321.15
was made during this reporting period.

Building Maintenance
The window replacement of the windows at Fire
Station 1 was completed. The windows had not
been replaced since the building was built in 1980.

Fire Station 1 received a new coat of paint. This is
the first time it has been fully repainted since it was originally built in 1980.

Work is moving forward to upgrade the restrooms
at Fire Station 1 to make them gender neutral and
allow for privacy while showering.

Watsonville Fire Department
Supporting the Mental Health
of First Responders
Measure Y funds were used to provide mental health
support to first responders and their families. Mental
health clinicians familiar with the fire service and the impact incidents can have on first responders are
available to fire personnel and their families when
needed.

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4 Summer Youth Academy
Measure Y funds were used to hold a summer youth
academy session during this reporting period from
July 24-August 4, 2023. The maximum number of
participants accepted for the youth academy is 15.

Due to the high interest this year, after meeting
with all the interested applicants, 20 youth were
accepted into the academy. 19 students completed
the program and graduated. Of the 20 youth, three
were young women. Sessions run for a period of
two weeks, Monday through Friday 8am-4pm, and
are open to 8th graders starting high school in Fall
2023 to high school Seniors who are graduating in
June 2024.

Paramedic Training Program for EMTs
The WFD is sponsoring three local EMTS through
the Paramedic Core Course being offered through
South Bay Regional Public Safety Training. Three
candidates are participating in this program. The
three participants began the Core Phase (Didactic)
which is the first phase of the Paramedic Core Course
on November 25, 2023 and completed the course
on April 19, 2024. They began the Clinical Course
(Hospital Internship) which is the second phase of
the Paramedic Core Course on May 1, 2024. This
second phase will run through July 12, 2024. The
third and final phase will begin July 14, 2024, with
an anticipated completion date of December 21,
2024. Upon successful completion and paramedic
certification, the participants will begin a 16-week
fire academy in early 2025.

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5 Watsonville Police Department
The WPD continues to enhance community engagement programming to foster trust and develop coordinated efforts with the community and local nonprofits. During the reporting period, the WPD organized or will be organizing the following events:

Agua con la Chota: an educational program that
is aimed at engaging local farm workers to speak
about topics that matter to them. This builds stronger
community relationships with local farmworkers,
sponsors and collaborating non-profit organizations.

From July 2023 to June 2024, the program reached
nearly 50 agricultural workers.

Cadet Program: provides youth with the opportunity
to explore the law enforcement field as a possible
career choice. This program was placed on hold
due to the pandemic, however, the WPD started
recruiting new members. The program currently has
23 youth participants.

Post Incident Team: composed of police and
neighborhood leaders who are brought together
after a serious incident has occurred; they walk
through the neighborhood in crisis in an effort
to help calm fears and disseminate information
about counseling or other social services. The PIT
volunteers were deployed twice between July 2023
and June 2024.

WPD Youth Academy: offers Watsonville youth
the opportunity to gain basic knowledge of the
law enforcement field, develop life skills, build
confidence and become empowered. To date, the
Youth Academy has served nearly 40 local students.

Measure Y Positions for July 2023 – June 2024 # of Positions # Filled Police Officers 7 6 Filled
Police Service Specialist 1 1 Filled
Property & Evidence Technician 1 1 Filled
Crime Analyst 1 1 Filled
Youth Specialist 1 1 Filled
Administrative Analyst 1 1 Filled
Communications & Media Assistant 1 1 Filled
Total 13 12 Filled
Día de los Muertos/Day of the Dead: a Mexican tradition that honors deceased loved ones by building altars. The event will be on November 1st and will have live performances, community altars and traditional day of the dead bread. The event is in collaboration with Pajaro Valley Prevention and Student Assistance, Watsonville Police Activities League and Watsonville Parks and Community Services Department. It’s estimated that more than 300 people took part in the 2023 event.

Coffee with a Cop: the WPD connects with community members in casual conversation over coffee to improve trust and build relationships. Two Coffee with Cop events were organized between July 2023 and June 2024, reaching nearly 250 residents. Page 376 of 486 6 Measure Y also funds trainings, facility maintenance, vehicles, specialized department equipment and technology:
• Trainings include those provided to the canines
and their handlers; canines can search large areas
and buildings in a relatively short period of time,
assist with apprehension of suspects and are able to
detect narcotics.
• Driver training instructor classes, which allow
sworn personnel to become instructors and teach
skills and techniques necessary to effectively provide
instruction in driver training courses focused on
emergency driving and emergency vehicle operation.
• Field Training Program (FTP) for individuals who
manage the FTP, it introduces the supervisors to the
personnel procedures, policies, and the purpose.
• An ICI sexual assault course provides investigators
with the specialized skills and knowledge necessary
to collaboratively, effectively, and objectively conduct investigations unique to sexual assault.
• Property and evidence management courses
allow staff to compare procedures and policies to
be used as best practices and to learn about newer
technologies in the property and evidence unit such
as handheld scanners, bar code labeling and storage
software among others.
• Staying up to date on various law enforcement
topics allows both, sworn personnel and professional
staff to stay diligent in their skills, adapt to new
approaches and increase department efficiency.
• The police parking lot gate was constantly
malfunctioning and it needed to be replaced. A new
gate was built, fabricated and installed in order to
provide building safety.
• Five (5) police vehicles and a van for the Police
Activities League were purchased during the
reporting period as part of the Vehicle Replacement
Program. Many of the existing vehicles have high
mileage or have constant mechanical breakdowns,
this program allows the WPD to purchase reliable
vehicles to continue law enforcement activities.

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7 Specialized department equipment and technology includes:

Unmanned aerial systems (UAS/Drones)
This equipment is used to help solve crime, as
well as protect life and property. Some of the uses
include search and rescue, photographic evidence
collection, overwatch during emergency incidents,
response to calls for service, accident and crime
scene reconstructions.

Mobile Data Computer (MDC)
Replacement Project, with Santa Cruz Regional
911 updating the computer aided dispatch (CAD)
system, the WPD is required to update the MDC’s
in order for them to be compatible with the CAD
system. The MDC’s are located in police vehicles,
it’s a secure digital dispatch/data communications
system that allows police officers to be dispatched
to calls for service.

COPLINK
This software is an advanced crime analytics
platform that allows data sharing designed to
help solve crimes faster by providing strategic and
command-level access to vast quantities of data
to help law enforcement professionals search the
expansive inter-agency database for leads and
suspects. This platform is part of a partnership
between the Santa Clara County Sheriff’s Office,
Santa Cruz, San Benito and Monterey Counties.

DORS
This software is a desk online reporting system
that allows community members to report crimes
online. DORS has improved response times because
it allows officers to attend to higher priority calls
and it provides the community with a secure online
reporting system that’s available 24/7.

Cellebrite Inc
This software that allows law enforcement to have
access to critical digital evidence from smartphones
to uncover leads faster and expedite case resolution.

Flock Automated License Plate Reader (ALPR)
This deployment of cameras provide greater
coverage and more detailed information for
law enforcement. This technology helps with
investigations, enhances public safety and provides
justice to victims. The number of recovered
stolen vehicles has increased, its assisted with the
apprehension of suspects and its helped other law
enforcement agencies with homicide cases.

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8 Caminos Hacia el Éxito
Measure Y funds the Caminos Hacia el Éxito Program, a
diversion program for Watsonville youth who commit
a first offense (misdemeanor), it uses evidencebased approaches to hold the youth accountable for their actions. Eligible youth and their families
are provided with evidence-based activities such
as case management, cognitive behavior therapy,
counseling, Teen Peer Court/Restorative Circles,
Neighborhood Accountability Board, mentoring,
pro-social activities and Guiding Good Choices, a
program proven to reduce juvenile delinquency that
improves parents’ skills and bonding.

To date, 242 youth have accepted to participate
in Caminos under the Measure Y funding and 189
have successfully completed the program. Of the
youth that completed the program successfully,
91% remain arrest free. The WPD attributes the
success of this program to the strong collaboration
with our partners: Pájaro Valley Prevention and
Student Assistance, Inc., Santa Cruz County Office
of Education, Police Activities League, Pájaro Valley
Unified School District and the County of Santa Cruz
Probation Department.

Parks & Community Services
The Department’s Measure Y budget
includes funding to support
Staff and supplies for free late night and weekend
youth development programs, primarily at the
GHWR Youth Center
• Staff, transportation and fees for youth field trips
• Recreation Facility improvements
• Staff, supplies, and contract services for park
and playground enhancements, maintenance, and
operations

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9 Free After-School and Summer
Programs
The Gene Hoularis & Waldo Rodriguez (GHWR)
Youth Center continued to serve as an outlet for
youth looking to engage in positive after-school
programming. Measure Y funds are used to expand
program hours and funds staffing and operations so
that these facilities can remain open on Friday nights
until 9p and Saturdays from 12-9p.

This represents a 55% increase in weekly operating
hours during the academic school year compared to
prior to receiving these funds. This has allowed the
team to plan engaging, positive activities for youth
and teens to participate in during these crucial outof-school times, including video game and sporting event nights, physical activity events, and more.

The free “Passport to Fun Membership” for
Watsonville youth removes financial barriers
allowing all youth regardless of financial status the
opportunity to participate in in GHWR Youth Center
programming, programming at the Environmental
Science Workshop and other youth programs, events
and field trips.

Activities and Field Trip Highlights
We are proud to report that nearly two dozen
activities, along with more than a dozen field
trips, were organized from July 2023 to June 2024
to provide youth with hands-on and engaging
experiences.

From movie nights, poetry workshops, and family
art sessions to summer kickoff barbecues, the
Parks and Community Services Department staff
ensured that kids in our community remained
active and involved in various activities.

Field trips included memorable outings to the
Santa Cruz County Fair, the Santa Cruz Boardwalk,
Gilroy Gardens, Morgan Hill Aquatic Center, and
Top Golf, among others.

The Youth Center saw over 800 member check ins on
Fridays and Saturdays from January – March 2024.

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10 Graffiti removal- Ramsay Park
Tennis court benches- Various Parks
New Basketball backboards and hoops- Callaghan
Pathway repair- Ramsay
Tule removal- Pinto Lake
Fallen tree removal- Ramsay Park
Tree work- Marinovich, Franich, Plaza
Replace damaged bench- Callaghan Park
Plumbing repair- Franich Park, Plaza
4 Double Station Waste Receptacles that will be the new standard throughout the park system.

They provide a clean look, reduce litter and rummaging and provide opportunities for advertising.

Repaired Tennis Court Pole Lights at Ramsay Park
Flodberg Park Fence Repair
Emmett Court Park- Hand Ball Court Lights repair
Replace 2 skylights at Franich Park
Installed vandal proof toilet paper holders in various park restrooms Pruned trees at Pinto Lake, City Hall, Muzzio, Kearney Park, Marinovich, City Plaza Repaired playground equipment and swings at Callaghan, Seaview and Marinovich Parks Repaired tables at Kearney Park
Replaced Callaghan water fountain with water bottle and pet fountain, including repairing water leak underground and installation.

Park, Playground and Recreation
Facility Maintenance
Measure Y funds support staff, supplies, and
contract services for the enhancement, maintenance,
and operations of our community’s public parks
and playgrounds. Due to many years of budget
recessions and limitations, the City’s parks and
facilities have accumulated approximately $98
million in deferred maintenance needs. These
needs range from landscape repair to equipment
replacement to termite mitigation to the
replacement of playground structures. Investments
in these areas are needed to mitigate further
damage, address safety concerns, and improve
user experience.

Parks and Playgrounds

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11 Recreation Facilities
Resurfaced Youth Center Basketball Court and New Score Board Computer for new Youth Center Registration Desk
Upgraded Furniture in Youth Center
Upstairs Youth Center Office Carpet Replacement
Upgraded Exterior Lighting at Youth Center
Upgraded Exterior Lighting at Marinovich
Upgraded Exterior Lighting at Callaghan Park
A message from the Revenue Measure Oversight Committee’s Chair I am pleased to share the Revenue Measure Oversight Committee’s 9th Annual Report for the year ending June 30, 2024. In the 2020 Primary Election, Watsonville voters renewed the existing half-cent sales tax — now called Measure Y. This renewed measure went into effect on July 1st, 2020.

The Revenue Measure Oversight Committee meets twice yearly to review the use of Measure Y revenues by Watsonville’s Police, Fire, and Parks and Recreation departments. The half-cent sales tax measure includes strict accountability provisions and the committee is tasked with making sure that all tax revenue is properly received, allocated, and spent in compliance with Measures Y.

The Committee looks forward to continuing to work with the community to ensure the ongoing success of Measure Y. Reports, presentations, and other information are available for public review at watsonville.gov” - Eric Sturm
Commitee Chair Page 382 of 486
12 Public Safety Tax Revenue Measure
watsonville.gov Page 383 of 486

Page 1 of 3 ends

6/6/2024 6:23:43 PM
C:\Program Files\eSCRIBE\TEMP\18233919883\18233919883,,,Report - Measure D and SB1 Expenditure Plans 24-25.docx Agenda Report
MEETING DATE: Tuesday, June 11, 2024
TO: City Council
FROM: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG

ASSISTANT PUBLIC WORKS & UTILITIES DIRECTOR FONTES
SUBJECT: APPROVAL OF PROJECT LISTS FOR TRANSPORTATION
PROJECTS FUNDED BY MEASURE D AND SB 1 FOR FY24/25
RECOMMENDED ACTION:

Staff recommends that the City Council adopt resolutions approving project lists for transportation projects to be funded by:

1. Measure D in FY24/25 through FY28/29; and

2. Senate Bill 1 (SB1) in FY24/25.

DISCUSSION:

The City’s proposed Capital Improvement Program (CIP) for FY24/25 includes several transportation projects which are funded from various sources. Two are the Measure D and SB 1 programs. Each of these programs requires that the city develop and approve an annual project list and expenditure plan. The projects included in these plans are part of the larger CIP which Council will be approving during the current budget process.

MEASURE D
In 2016, Santa Cruz County voters approved Measure D, a one-half-cent sales tax that funds transportation projects for 30 years. The Measure allocates a portion of the funding to individual agencies with the city’s projected share for FY24/25 totaling $1,178,000. The City will spend these funds and others that have carried over from previous years.

Requirements of the funding include the development of a five-year expenditure plan that is presented at a public hearing and approved by the City Council. The Plan is entitled “Measure D: 5-Year Program of Projects (FY24/25-28/29)” and is included with the resolution. The Plan and Council Resolution of approval are to be submitted to the Santa Cruz County Regional Transportation Commission by June 30th of each year. Attached to this staff report is a map showing the projects receiving Measure D and SB 1 funding in FY24/25.

In FY24/25, the Plan proposes to allocate Measure D to partially or completely fund the following projects:

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6/6/2024 6:23:43 PM
C:\Program Files\eSCRIBE\TEMP\18233919883\18233919883,,,Report - Measure D and SB1 Expenditure Plans 24-25.docx  Improve bicycle and pedestrian safety through annual funding for activities and improvements that involve citywide bicycle facilities, maintenance, and improvement of trails, and supporting pedestrian & traffic safety;  Prepare plans and environmental documents for bicycle and pedestrian improvements within the downtown area and at eight schools within the southeast area of the City; for installation of sidewalk on the east side of Freedom Blvd between Green Valley Rd and Airport Blvd; and for pedestrian amenities recommended by the Downtown Watsonville Specific Plan.
 Construct Lee Rd Trail Phase I which includes sidewalk and bike lanes on a portion of Harkins Slough Rd and a pedestrian and bike path on a portion of Lee Rd;
 Implement pavement repair and maintenance projects identified in Year 1 of the Pavement Management Plan.

In future years, the Plan provides funding for the following projects:
 Pennsylvania Dr Trail Repair from Clifford St to Winding Way;  Rail Trail Segment 18 Phase 3 from Watsonville Slough Trail trailhead to Walker St.

FY24/25 projects to receive Measure D funding that was allocated previously and carried over to this year include:
 Bridge St Reconstruction from Blackburn St to Beck St;  Green Valley Rd Reconstruction from Freedom Blvd to City Limits;  Highway 1/Harkins Slough Rd Pedestrian Bridge & Safe Routes to School project design;
 Lake Ave sidewalk and lighting improvements from Rodriguez St to Union St/Brennan St design;
 Lee Rd Trail design and permitting;
 Pennsylvania Dr Reconstruction from Clifford St to Winding Way design.

SB 1
In 2017, Governor Brown signed SB 1, providing additional funding for road maintenance, rehabilitation, and safety projects. The funding is apportioned by formula to cities and counties. Watsonville’s projected annual share for FY24/25 is $1,325,000. The City will use these funds and others that have rolled over from previous years for projects to be constructed in this and future fiscal years.

To be eligible for SB 1 funding in FY24/25, the City must provide the California Transportation Commission (CTC) with a list of projects that have been approved by the City Council. The list is due to the CTC by July 1, 2024. The list is included with the resolution. Attached to the staff report is a map showing the location of the proposed SB 1 and Measure D funded projects.

In FY24/25, the city will allocate SB 1 funding for:
 Preparation of plans, specifications and estimates for Year 1 Pavement Management Plan projects;
 Reconstruct and repair roads at various locations within the city;

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6/6/2024 6:23:43 PM
C:\Program Files\eSCRIBE\TEMP\18233919883\18233919883,,,Report - Measure D and SB1 Expenditure Plans 24-25.docx  Project management and construction oversight services for Year 1 Pavement Management Plan projects;
 Road repair work includes repair of potholes and pavement damage at various locations within the city.

FY24/25 projects to receive SB1 funding that was allocated previously and carried over to this year include:
 Citywide Restriping
 Green Valley Rd Reconstruction (Carey Ave to City Limits)  Green Valley Rd Safety
 Pennsylvania Dr Reconstruction
STRATEGIC PLAN:

The proposed expenditure plans are consistent with the following Strategic Plan Goals:
2-Infrastructure & Environment
5-Public Safety
FINANCIAL IMPACT:

Measure D and SB 1 will provide funding for transportation projects and help the city qualify for additional grant funds by serving as a local match.

ALTERNATIVE ACTION:

No reasonable alternatives are known currently.

ATTACHMENTS AND/OR REFERENCES (If any):

1. Watsonville Measure D & SB 1 FY24/25 Projects Map

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Attachment 1

Page 1 of 1 ends

Green Valley Rd
Reconstruction
Hwy 1/Harkins Slough Rd
Pedestrian Bridge Design Lee Rd Trail Phase I Safe Routes to Downtown Watsonville Design Bridge St Reconstruction Watsonville Measure D & SB1 FY24/25 Projects Map
Citywide Projects
Bicycle Facilities
Citywide Restriping
Maintain & Improve Trails
Pavement Repair per Pavement Management Plan
Pedestrian & Traffic Safety
Pedestrian Amenities per Downtown Specific Plan
PMP Yr 1 - PS&E Consultant
PMP Yr 1 - Pavement Repair
PMP Yr 1 - Project Management & Construction Oversight
Road Repair
Lake Ave
Sidewalk &
Lighting Design
Pennsylvania Dr
Trail Repair
Pennsylvania Dr
Reconstruction
Design
Freedom Blvd
Sidewalk Design Rail Trail Segment 18 Phase 3
Green Valley Rd
Safety

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Reso No. ______ (CM)
Meeting Date: 061124 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE APPROVING THE 2024 MEASURE D 5-YEAR
PROGRAM OF PROJECTS (FY 24/25 - FY 28/29) FOR THE CITY OF

WATSONVILLE FUNDED BY MEASURE D APPROVED BY VOTERS ON
NOVEMBER 8, 2016
WHEREAS, Santa Cruz County voters approved a one-half cent sales tax (Measure D) on November 8, 2016, to fund transportation projects for the next 30 years; and
WHEREAS, Watsonville City Council adopted Resolution No. 76-17 (CM), approving a Measure D Master Funding Agreement between the Santa Cruz Regional Transportation Commission and the City of Watsonville for receipt of Measure D funding for City transportation projects; and
WHEREAS, Watsonville City Council adopted Resolution No. 125-22 (CM), approving a first amendment to the Master Funding Agreement and extending the term an additional 25 years to 2047; and
WHEREAS, said Master Funding Agreement states that for the City to receive its annual allocation of funding for “Neighborhood Projects”, the Watsonville City Council shall first approve a 5-Year Program of Projects following public comment; and WHEREAS, the City of Watsonville’s projected annual allocations Measure D Neighborhood Projects funds for FY24/25 is $1,178,000.

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

1. This action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15378(b)(5), in that

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Reso No. (CM)
Meeting Date: 061124
2 adopting a Resolution supporting a funding plan 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 and if a “project,” is exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment .

2. That the City Council hereby approves the 2024 Measure D 5-Year Program of Projects (FY24/25 – FY28/29) for the City of Watsonville attached hereto and incorporated herein as Exhibit “A.”
*************************************

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Measure D: 5-Year Program of Projects (FY24/25-FY28/29) Agency: City of Watsonville
Expenditure Plan Category: Neighborhood Projects
Approval Date: Tuesday, June 11, 2024
Public Hearing Date: Tuesday, June 11, 2024 Prior FY24/25 FY25/26 FY26/27 FY27/28 FY28/29 Estimated Annual Measure D Allocations $7,352,342 $1,178,000 $1,215,000 $1,252,000 $1,252,000 $1,293,000 Amount of Measure D Funds Programmed
Project Name/location
City
Project
Number
Description (include project purpose and complete streets components if applicable)
Total
Measure D
Prior Years
Spent &
Allocation
FY24/25 FY25/26 FY26/27 FY27/28 FY28/29 Total cost
estimate Other fund sources
Est.

Construction
start date
Major
project? *
(yes/no)
Lee Rd Trail
14522
Design & permitting for bicycle & pedestrian trail on Harkins Slough Rd & Lee Rd $738,416 $738,416 $0 $0 $0 $0 $0 $ 1,068,416
Coastal Conservancy -
$330,000
FY24/25
(carryover) No
Green Valley Rd Reconstruction from
Freedom Blvd to City Limits
14523
Reconstruct roadway, install median island, remove and replace noncompliant driveways & curb ramps, restripe roadway & provide bike lanes where none exist.
$1,050,000 $1,050,000 $0 $0 $0 $0 $0 $ 4,712,123
RSTPX - $1,833,000
Measure R - $700,000
Gas Tax - $47,810
SB1 - $1,081,313
FY24/25
(carryover) Yes
Lake Ave Sidewalk & Lighting
Improvements from Rodriguez St to Union
St/Brennan St 14731
Prepare design for repair/replace damaged sidewalk. Done in conjunction with PG&E Utility Undergrounding project.
$85,371 $85,371 $0 $0 $0 $0 $0 $ 262,262
Impact Fees - $127,946
UG Utilities Fee -
$48,945
FY26/27
(carryover) No
Bridge St Reconstruction from Blackburn
St to Beck St
14816
Repair and resurface damaged roadway, replace damaged sidewalks, restripe roadway. Includes design, environmental documentation and construction. $155,680 $155,680 $0 $0 $0 $0 $0 $ 1,085,680 Measure R - $930,000 FY24/25
(carryover) Yes
Pennsylvania Dr Reconstruction from
Clifford St to Winding Way
14817
Reconstruct roadway, bike lanes and pedestrian facilities, restripe roadway. Includes design, environmental documentation and construction. $110,807 $110,807 $0 $0 $0 $0 $0 $ 1,910,807 SB1 - $913,000 TBD -
$887,000
FY26/27
(carryover) Yes
Highway 1/Harkins Slough Rd Pedestrian
Bridge & Safe Routes to School project
14859
Construct pedestrian bridge over SR 1, install sidewalk and reconfigure bike lanes on Harkins Slough Rd. Modify Harkins Slough Rd/Green Valley Rd/Silver Leaf Dr intersection to improve bicycle and pedestrian access. At Pajaro Valley High School and at feeder schools and various locations within the high school attendance area install high visibility crosswalks, curb extensions, upgrade curb ramps and improve bicycle facilities and provide pedestrian and bicycle safety training.
$129,733 $129,733 $0 $0 $0 $0 $0 15,358,733
ATP - $11,700,000
Developer Fees -
$2,629,000
STIP - $900,000
FY24/25
(carryover) Yes
Citywide Bicycle Facilities (Various
Locations) 14320
Provide signage and traffic markings along bicycle corridors and provide educational programs. $796,173 $296,173 $100,000 $100,000 $100,000 $100,000 $100,000 Annual None Annual No Maintain & Improve Trails (Various
locations) 14321
Develop, maintain and enhance existing pedestrian and bicycle trails $819,036 $319,036 $100,000 $100,000 $100,000 $100,000 $100,000 Annual None Annual No Pedestrian & Traffic Safety (Various
Locations)
14322
Install or upgrade safety and traffic calming measures such as striping, markers, signage, signals, lighting, flashing beacons, curb extensions and speed humps and provide educational programs. $1,123,408 $623,408 $100,000 $100,000 $100,000 $100,000 $100,000 Annual None Annual No Lee Rd Trail Phase 1 from Pajaro Valley
High School driveway to Land Trust
driveway 14860
Construct sidewalk and bikelanes on Harkins Slough Rd and pedestrian and bicycle path on Lee Rd.
$533,795 $133,795 $400,000 $0 $0 $0 $0 $2,233,795
Federal Earmark -
$1,000,000
Land Trust $700,000 FY24/25 Yes
Rail Trail Segment 18 Phase 3 from
Watsonville Slough Trail trailhead to
Walker St. 15058
Design & construct pedestrian and bicycle trail within railroad corridor $914,368 $368 $0 $0 $914,000 $0 $0 $ 914,368 RTC - $2,200,000 FY26/27 Yes Pennsylvania Dr Trail Repair from Clifford
St to Winding Way 15085
Reconstruct pedestrian pathway to address failing trail surface. Includes design and environmental documents. $1,064,000 $150,000 $914,000 $0 $2,364,000 TBD - $1,300,000 FY25/26 Yes Safe Routes to Downtown Watsonville
15087
Design bicycle and pedestrian improvements within downtown area and at eight schools within southeast area of City
$300,000 $244,000 $56,000 $0 $8,687,000
ATP - $6,948,000
SB1 - $162,000
STIP - $896,000
RSTPX - $352,000
Private - $29,000 FY26/27 Yes
Pavement Repair
15187
Implement pavement repair and maintenance projects identified in Pavement Management Program $2,032,870 $0 $204,870 $914,000 $914,000 $5,257,870 SB1 - $3,225,000 Annual Yes Freedom Blvd Sidewalk Design - East side
of road between Green Valley Rd & Airport
Blvd 15193
Design & permit sidewalks
$100,000 $0 $100,000 $0 $ 100,000 None FY24/25 No
Downtown Specific Plan Implementation -
Design 15194
Design pedestrian amenities
$100,000 $0 $100,000 $0 $ 3,100,000 None FY24/25 No
Adminstrative Costs NA Cost of annaul audit. $56,160 $31,160 $5,000 $5,000 $5,000 $5,000 $5,000 Annual None Annual No Estimated Annual Measure D Expenditures $5,363,251 $1,165,870 $1,219,000 $1,219,000 $1,219,000 $1,219,000 Annual Interest Earnings on Measure D Revenues $4,033 $4,073 $4,073 $4,073 $4,259 Carry over to next fiscal year $1,629,202 $1,629,275 $1,666,348 $1,703,421 $1,781,680 Exhibit "A"

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Reso No. (CM)
Meeting Date: 061124 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE APPROVING THE CITY OF WATSONVILLE – SB1
PROJECT LIST FY 24/25 TO BE FUNDED BY SENATE BILL 1 FUNDS WHEREAS, Senate Bill 1 (SB1) also known as the Road Repair and Accountability Act of 2017, was signed into law on April 28, 2017; and WHEREAS, SB1 provides funding for road maintenance, rehabilitation, and safety projects which is split between the state, cities and counties; and WHEREAS, eligibility for SB1 funding includes City Council approval of list of possible transportation projects provided to the California Transportation Commission (CTC) before July 1, 2024; and
WHEREAS, the State estimates annual funding available to the City of Watsonville through SB1 to be approximately $1,325,000 for FY24/25.

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

1. This action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15378(b)(5), in that adopting a Resolution supporting a funding plan 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 and if a “project,” is exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.

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Reso No. ______ (CM)
Meeting Date: 061124
2 2. That the City Council hereby approves the 2024 City of Watsonville – SB1 Project List FY24/25 for the City of Watsonville which is attached hereto and incorporated herein as Exhibit “A.”
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City of Watsonville - SB1 Project List
FY24/25
Name/Road/
Limits
Description SB1 Share
of Project
Cost
Status Complete Useful
Life
Citywide
Restriping
Restripe roadways at various
locations within City including
Pennsylvania Dr
350,000
Carry
Over
FY24/25 1-5 Yr
Green Valley Rd
Reconstruction
(Carey Ave to City
Limits)
Reconstruct roadway, install median
island, remove and replace noncompliant driveways & curb ramps, restripe roadway & provide bike
lanes where none exist.
1,081,313
Carry
Over
FY24/25 20 Yr
Green Valley Rd
Safety
Provide safety improvements on
Green Valley Rd, including striping,
signage and traffic calming
50,000
Carry
Over
FY24/25 5-10 Yr
Pennsylvania
Drive
Reconstruction
Reconstruct Roadway, bike lanes and
pedestrian facilities, restripe
roadway. 78,157
Carry
Over
FY26/27 20 Yr
PMP Yr 1 - PS&E
Consultant
Preparation of plans, specifications
and estimates for Year 1 Pavement
Management Plan projects including
Airport Blvd
300,000 New FY24/25 20 Yr
PMP Yr 1 -
Pavement Repair
Reconstruct and repair roads at
various locations within the City
including Airport Blvd
425,000 New FY24/25 20 Yr
PMP Yr 1 - Project
Management &
Construction
Oversight
Project management and
construction oversight services for
Year 1 Pavement Management Plan
projects including Airport Blvd
350,000 New FY24/25 20 Yr
Road Repair Road repair work including repair of
potholes and pavement damage at
various locations within the City
including Ohlone Parkway
250,000 New FY24/25 1-5 Yr
Exhibit "A"

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Measure D & SB 1
Project Lists
Public Works & Utilities Department

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CIP & Transportation Funding
FY24/25 allotment:
• Measure D - $1,178,000
• SB 1 - $1,325,000
Transportation funding in proposed CIP includes:
• Measure D
• SB 1

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Bicycle & Pedestrians
Pedestrian & Traffic Safety
Design, Construction
$100,000
Citywide Bicycle Facilities
Programs, Design, Construction
$100,000
Maintain & Improve Trails
Design, Construction
$100,000

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Bicycle & Pedestrians
Lake Ave Sidewalks & Street Lighting
Design
Carryover
Safe Routes to Downtown Watsonville
Design
$244,000
DWSP Implementation
Design
$100,000 Page 397 of 486
Bicycle &
Pedestrians
Pennsylvania Dr Trail Repair from
Clifford St to Winding Way
Design
Carryover
Freedom Blvd Sidewalks from
Green Valley Rd to Airport Blvd
Design
$100,000

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Bicycle & Pedestrians
Phase 1 Limits
Lee Rd Trail Phase I
Design, Permitting,
Construction
Carryover & $400,000 Hwy 1/Harkins Slough
Rd Pedestrian Bridge
Design
Carryover

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Striping & Safety Projects
Citywide Restriping
Design, Construction
Carryover
Green Valley Rd Safety
Design, Construction
Carryover

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Roads
Bridge St Reconstruction from
Blackburn St to Beck St
Design, Construction
Carryover
Pennsylvania Dr Reconstruction
from Clifford St to Winding Way
Design
Carryover

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Roads
Green Valley Reconstruction from
Freedom Blvd to City Limits
Design, Construction
Carryover Page 402 of 486
Pavement Repair
Construction
$204,870
Road Repair
Construction
$250,000
Roads
PMP Yr 1 – PS&E Consultant
Design
$300,000
PMP Yr 1 – Pavement Repair
Construction
$425,000
PMP Yr 1 – Project
Management & Construction
Construction
$350,000 Page 403 of 486

RECOMMENDATION
Approve Measure D & SB 1 project lists

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6/6/2024 7:34:35 PM
C:\Program Files\eSCRIBE\TEMP\19343196657\19343196657,,,Report - 2024 Affordable Housing Program Limits.docx Agenda Report
MEETING DATE: Tuesday, May 28, 2024
TO: City Council
FROM: COMMUNITY DEVELOPMENT DIRECTOR MERRIAM

HOUSING MANAGER LANDAVERRY
SUBJECT: 2024 AFFORDABLE HOUSING PROGRAM LIMITS
RECOMMENDED ACTION:

It is recommended that the City Council of the City of Watsonville, and City Council acting as the Successor Housing Agency adopt a resolution establishing the 2024 Maximum Income, Rent, and Sales Price Limits for the Watsonville Affordable Housing Program.

BACKGROUND:

The original Affordable Housing Ordinance was adopted by the City Council in 1991 to provide affordable housing to Watsonville residents. That ordinance required developers of housing projects over eight (8) units to make at least twenty-five percent (25%) of the units affordable to median, low and very low-income households, based on the County’s median household income. Although the goal of providing additional affordable housing was desirable, the first decade of the ordinance had shown that the ordinance had not been effective in providing additional affordable units. By the end of 2000, only five (5) affordable units had been supplied that met the intent of the ordinance.

In 1999, the Housing Safety Committee developed a series of recommendations that were forwarded to City Council in an effort to improve housing conditions and increase unit affordability. In early 2000, the Watsonville City Council directed staff to create a Housing Task Force, which would include a membership from a broad range of interests, to examine ways to improve the Affordable Housing Ordinance.

Based on recommendations from the Housing Task Force and the Planning Commission, in September 2001, the Watsonville City Council adopted the current Affordable Housing Ordinance (“Ordinance”) to reflect the actual income of Watsonville residents, codified in Chapter 14-46 of the Watsonville Municipal Code. The current Ordinance requires that 15% to 20% of new residential development projects of seven (7) or more units built in the City be affordable to households with very low, low, median, moderate and above moderate incomes, based on Watsonville household median income (Watsonville Municipal Code Sections (WMC) 14-46.040, 14-46.030 and 14-46.130(a)(3)). The housing units regulated by this Ordinance are generally considered affordable, inclusionary and/or deed restricted units. The Ordinance also establishes standards for rental and home ownership and

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6/6/2024 7:34:35 PM
C:\Program Files\eSCRIBE\TEMP\19343196657\19343196657,,,Report - 2024 Affordable Housing Program Limits.docx includes formulas for determining maximum income, rent and sale price limits to be used by the City’s Affordable Housing Program (“Program”) (WMC 14-46.030, 14-46.140 and 14-46.150).

Under the provisions of WMC 14-46.030(cc), “Watsonville Median Household Income” means seventy (70%) percent of Santa Cruz County’s median household income, as adjusted for family size. This figure is determined annually and is derived from the State Department of Housing and Community Development (HCD) publication of annual income data for counties by income categories pursuant to Section 6932 of Title 25 of the California Code of Regulations. This local adjustment means that the names of the Watsonville income categories do not match the state/federal income category names. The State limits are based on U.S. Census Bureau estimates for each county, which are adjusted by the U.S. Department of Housing and Urban Development (HUD) and HCD for the purpose of administering State and Federal programs.

DISCUSSION:

On May 9, 2024, HCD released the 2024 Official State Income Limits and given that HCD’s limits and the economic and housing market have changed, a modification in the sales price limits for the City’s Program is warranted at this time. Also included in the new 2024 Watsonville Affordable Housing Program Limits is a proposed prevailing interest rate and a “Watsonville Median Sales Price,” which the City’s Ordinance requires to be adopted periodically by resolution of the City Council (WMC 14-46.030).

Pursuant to WMC 14-46.150, the maximum allowable sales price for a new affordable unit is based on the following formula and the income limits established by resolution from time to time by the Council.

STEP ONE: Determine annual household unit income limit.

1. Determine income category for unit (Median, Moderate or Above Moderate).

2. Determine household size, assigning a family size one person more than the number of bedrooms in the affordable unit. For example, the household size for a three (3) bedroom unit would be four (4) persons and for a studio would be one person.

3. Determine the maximum annual household income limit for the unit based on income category and family size using the most recent City of Watsonville Affordable Housing Ordinance Qualifying Maximum Income, and Maximum Rents and Sales Prices adopted by resolution by the Council.

STEP TWO: Determine monthly household allowance permitted to be used for a mortgage payment as follows:

1. Multiply the annual household income limit derived in Step One by .30 to obtain an annual household allowance of thirty (30%) percent of income.

Round up to the nearest Fifty and no/100ths ($50.00) Dollars to obtain the annual household allowance.

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C:\Program Files\eSCRIBE\TEMP\19343196657\19343196657,,,Report - 2024 Affordable Housing Program Limits.docx

2. Divide the annual household allowance by twelve (12). Round up to the nearest Fifty and no/100ths ($50.00) Dollars to determine the household allowance which is the maximum mortgage payment allowed.

STEP THREE: Determine the maximum mortgage that can be financed for a thirty (30) year fully amortized fixed-rate mortgage:

1. Determine the prevailing interest rate.

2. Determine the amount of the monthly mortgage payment (principal pay-down and interest).

STEP FOUR: Determine maximum allowable unit sales price: Assuming a mortgage of ninety-five (95%) percent of the sales price, divide the principal amount of the mortgage by

0.95 and round to the nearest Fifty and no/100ths ($50.00) Dollars. The result is the maximum allowable price of the affordable unit.

In times of rising interest rates and because the prevailing interest rate plays such a critical role in establishing the sales price, this could result in an income-eligible buyer being unable to purchase an affordable unit. To illustrate the impact that interest rates have on sales prices, the following chart demonstrates how interest rate increases result in reducing the maximum sales prices for a three-bedroom affordable home at 7.0%, 7.5% and 8.0% interest rates respectively.

Maximum Price
3-Bedroom Unit 7.0% Interest Rate 7.5% Interest Rate 8.0% Interest Rate Median $367,700 $349,866 $333,392
Moderate $441,240 $419,840 $400,071
Above
Moderate $551,550 $524,799 $500,089
Seen another way, at the current maximum resale price, a typical Watsonville family with a household median income of $111,600 per year could not afford to buy a moderate or above moderate affordable home.
3-Bedroom Unit Median Moderate Above Moderate
Price $430,849 $517,019 $646,274
Loan Amount 417,923 $501,508 $626,885
Principal & Interest $2,924 $3,507 $4,383
Prop. Taxes $449 $538 $673
Insurance $140 $180 $220
HOA Dues $180 $180 $180
Total Monthly
Housing Cost $3,693 $4,405 $5,456

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6/6/2024 7:34:35 PM
C:\Program Files\eSCRIBE\TEMP\19343196657\19343196657,,,Report - 2024 Affordable Housing Program Limits.docx Housing Costs as a % of
Income 39.71% 47.37% 58.67%
Chapter 14-46.030 (x) defines the “Prevailing Interest Rate” as “the interest rate adopted by the City of Watsonville City Council from time to time.” The proposed prevailing interest rate of 7.50% was derived from interest rate data obtained from local lenders, the national housing finance systems (Bankrate, Fannie Mae, Freddie Mack), and the City’s First Time Home Buyer Program Guidelines. The proposed prevailing interest rate represents the midpoint between the current interest rates of 6.90% and 8.10% for 30-year fixed mortgages (assuming 5% down and a credit score of 700-719).

Existing owners of affordable units affected by fluctuations in the maximum allowable resale price are provided alternatives means to establish the maximum sales price wherein owners are guaranteed a reasonable return on their investment. Pursuant to WMC 14-

46.150(h)(2), the maximum allowable resale price for existing affordable units is derived using one of the two following methods, whichever yields the highest price for the owner:

1. The maximum allowable sales price formula; or

2. The original sales price plus fifty (50%) percent of the increase in the House Price Index since the date of purchase.

The median home sales price for Watsonville was determined to be $770,076 and it was based on home sale data obtained from the Multiple Listing Service and submitted by the Santa Cruz County Association of Realtors for the past twelve months from January 2023 through January 2024.

The proposed 2024 limits will take effect upon adoption by the Council and will remain in effect until new limits are adopted.

STRATEGIC PLAN:

The proposed resolution is consistent with the Housing goal in the City’s Strategic Plan by providing sufficient, quality housing opportunities and expanding housing programs for all City residents.

CEQA
The preparation of the Affordable Housing Program Limits is not a project under the California Environmental Quality Act (CEQA), pursuant to CEQA Guidelines Section 15378(b)(2), as 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, and therefore no further review is required.

FINANCIAL IMPACT:

The recommended action will not impact the General Fund. The preparation of the Affordable Housing Program Limits is part of the Community Development Department’s budgeted work program using existing staff resources.

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6/6/2024 7:34:35 PM
C:\Program Files\eSCRIBE\TEMP\19343196657\19343196657,,,Report - 2024 Affordable Housing Program Limits.docx ALTERNATIVE ACTION:

The Council could choose to modify the Prevailing Interest Rate and/or the Watsonville Median Sales Price, or not to adopt the proposed resolution, in which case the existing Affordable Housing Program limits would remain in effect.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

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Reso No. ______ (CM)
Reso No. ______ (SHA)
Meeting Date: 061124 SWZ ______ TV ______ CDD ______
1 RESOLUTION NO.__________ (CM)
RESOLUTION NO.__________ (SHA)

A JOINT RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE, AND CITY COUNCIL ACTING AS THE SUCCESSOR

HOUSING AGENCY ADOPTING THE WATSONVILLE AFFORDABLE
HOUSING PROGRAM 2024 INCOME, RENT AND SALES PRICE LIMITS

FOR THE CITY'S AFFORDABLE HOUSING PROGRAM AND

ESTABLISHING THE WATSONVILLE MEDIAN SALES PRICE AS
$770,076
WHEREAS, on June 26, 2001, the City Council adopted Ordinance No. 1107- 01 (CM) repealing Chapter 14-46 (Affordable Housing Ordinance) and adding a new Chapter 14-46 (Affordable Housing Ordinance) to the Watsonville Municipal Code to better meet the Goals, Policies and Programs of the Housing Element of the Watsonville 2005 General Plan; and
WHEREAS, Subsection (cc) of 14-46.030 of the Watsonville Municipal Code defines the Watsonville median household income to be seventy percent (70%) of Santa Cruz County's median household income adjusted for family size and rounded up to the nearest fifty and no/100ths ($50.00) dollar increment; and WHEREAS, the annual income data for counties is published annually by the State Department of Housing and Community Development (HCD) pursuant to Section 6932 of Title 25 of the California Code of Regulations; and
WHEREAS, Subsection (a)(2) of Section 14-46.130 and Subsection (a) of Section 14-46.140, and Subsection (f)(2) of Section 14-46.150 of the Watsonville Municipal Code provide that the Council from time to time shall adopt a resolution establishing income limits, residential rent levels and affordable sales prices for the City of Watsonville; and WHEREAS, Subsection (I) of Section 14-46.030 of the Watsonville Municipal Code provides in part that "for-sale" affordable units be sold to first time homebuyers, except

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Reso No. ______ (CM)
Reso No. ______ (SHA)
Meeting Date: 061124
2 when a buyer has sold a unit within the City of Watsonville at a price that is no more than ninety-five (95%) percent of the Watsonville median sales price determined from time to time by resolution of the Council.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL AND CITY

COUNCIL ACTING AS THE SUCCESSOR HOUSING AGENCY OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution adopting the 2023 Watsonville Affordable Housing Program 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 of the City of Watsonville, acting as the Successor Housing Agency hereby adopt the schedule entitled "Watsonville Affordable Housing Program 2024 Income, Rent and Sales Price Limits, attached hereto and incorporated herein as Exhibit "A," setting forth the City of Watsonville Affordable Housing Program 2024 limits for Maximum Allowable Income to Occupy Affordable Units, Maximum Allowable Residential Rent, and Maximum Allowable Home Sales Price.

3. That said schedule shall be used to determine income limits, maximum residential rents, and maximum home sales prices until changed by Council.

4. That the Watsonville Median Sales Price for a home is hereby established as $770,076 and the prevailing interest rate as 7.50 per cent until changed by Council. ********************************************

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1 2 3 4 5 6 7 8
Very Low $52,100 $59,500 $66,950 $74,400 $80,350 $86,300 $92,250 $98,200 Low $65,100 $74,400 $83,650 $93,000 $100,400 $107,850 $115,300 $122,750 Median $78,100 $89,250 $100,400 $111,600 $120,500 $129,450 $138,350 $147,300 Moderate $97,600 $111,600 $125,500 $139,450 $150,600 $161,800 $172,900 $184,100 Above Moderate $110,650 $126,450 $142,250 $158,050 $170,650 $183,350 $195,950 $208,650 Studio 1 2 3 4
Very Low $813 $930 $1,046 $1,162 $1,255
Low $1,301 $1,488 $1,673 $1,859 $2,008
Median $1,627 $1,859 $2,091 $2,324 $2,510
Moderate $2,510
Studio 1 2 3 4
Median $244,880 $279,919 $314,827 $349,866 $377,792
Moderate $293,856 $335,903 $377,792 $419,840 $453,351
Above Moderate $367,320 $419,879 $472,240 $524,799 $566,689 2024 Watsonville Median Single Family Home Price:
95% of Watsonville Median Single Family Home Price:

Prevailing Interest Rate: 7.50 Per Cent
* based on MLS listings for single family homes sold in City limits from January, 2023 through January, 2024.

Income Levels % of AMI 1 2 3 4 5 6 7
Very Low 50% 63,400 72,450 81,500 90,550 97,800 105,050 112,300 Low 80% 101,750 116,250 130,750 145,300 156,950 168,550 180,200 Median 100% 92,950 106,250 119,500 132,800 143,400 154,050 164,650 Moderate 120% 111,550 127,500 1,434,050 159,350 172,100 184,850 197,600 Watsonville Affordable Housing Program
2024 Income, Rent and Sales Price Limits
Income Limits
Resale Price Limits (per Affordability Formula)
Number of Persons in Household
Income Category
Rent Limits
$770,076
$731,572
Number of Bedrooms
Income Category
SANTA CRUZ COUNTY INCOME LIMITS FOR 2024
Number of Bedrooms
Income Category
Exhibit "A"

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Community Development Dept.

Carlos Landaverry, Housing Manager
City of
Watsonville

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Affordable Housing Ordinance
History
• First Ordinance Adopted in 1991
• Required 25% Inclusionary based
on County Median Income
• Most affordable units were
produced by non-profit developers

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Affordable Housing Ordinance
History
• Current Ordinance Adopted in 2001
• Incentives
• Set standards for rental & home
ownership (required percentage)
• Set Watsonville Income Limits
• Set In-Lieu Fees

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Incentives
● Priority Processing
● Flexible Density Bonus Schedule
● Reduction of Site Development Standards
● Financial Assistance

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Unit Requirements
Rental Developments
Projects with 7 or more new units:
5% Median
5% Low
5% Very Low
5% Section 8
20% Total Requirement

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Unit Requirements
For Sale Developments
Projects with 7-50 new units:
5% Above Moderate
5% Moderate
5% Median
15% Total Requirement

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Unit Requirements
For Sale Developments
Projects with more than 50 units:
10% Above Moderate
5% Moderate
5% Median
20% Total Requirement

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Affordable Housing
In Watsonville

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INCOME, RENT, SALES LIMITS
Watsonville Median Income = 70% Santa Cruz County Median Income $72,295 $104,409

69.24%
Rents based on Watsonville median income
Sales price based on Watsonville median income and prevailing interest rates

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Median Income
Low Income
Very Low Income
$2,091
$1,673
$1,046

INCOME CATEGORY RENT
$100,400
$83,650
$66,950
INCOME
RENTAL
2 bedroom Apt.

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Above Moderate
Moderate
Median
2023 limits & 5.5% Interest Rate
$646,274
$517,019
$430,849

INCOME CATEGORY PRICE
$158,050
$139,450
$111,600
INCOME

OWNERSHIP
3-bedroom Home

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Above Moderate
Moderate
Median
2024 limits & 7.5% Interest Rate
$524,799
$419,840
$349,866

INCOME CATEGORY PRICE
$158,050
$139,450
$111,600
INCOME

OWNERSHIP
3-bedroom Home

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Prevailing Interest Rates

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Watsonville Interest Rates
Buyer 1 6.990%
Buyer 2 7.375%
Buyer 3 7.750%
Buyer 4 7.500%

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Max Sales Price
3-bedroom
Income Category 7.0% Interest Rate 7.5% Interest Rate 8.0% Interest Rate Median $367,700 $349,866 $333,392
Moderate $441,240 $419,840 $400,071
Above Moderate $551,550 $524,799 $500,089

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Max Sales Price
3-bedroom
Income Category 5.5% Interest Rate 6.5% Interest Rate 7.5% Interest Rate Median $430,849 $387,034 $349,866
Moderate $517,019 $464,440 $419,840
Above Moderate $646,274 $580,550 $524,799

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Resale Formula
The maximum allowable sales price formula; or
The original sales price plus 50% of the increase in the House Price Index since the date of purchase.

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RECOMMENDATION
That the City Council of the City of Watsonville, and City Council acting as the Successor Housing Agency adopt a resolution establishing the 2024 Maximum Income, Rent, and Sales Price Limits for the Watsonville Affordable Housing Program.

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Dear City Council Members,
I am writing to express my profound concerns surrounding the sudden proposed changes to our City's affordable housing parameters and to request that the council act circumspectly and responsibly to defer final action until the proposed changes are carefully and properly evaluated and understood.

I urge you to consider the following key reasons for a modest postponement:
1) Current program requirements are barely eight months old: Our City has never updated these requirements more frequently than annually. In fact, in the past, several years have passed between program updates. Making changes so soon after the parameters adopted in October of 2023 would violate this established pattern without justification or demonstrable purpose.
2) Insufficient empirical evidence: The data inputs supporting the proposed changes appear to be based on random or arbitrary anecdotal information obtained from unidentified sources rather than verifiable statistics and other facts reported by universally respected sources.

Adopting significant changes without solid evidence and reliable support would threaten to destabilize Watsonville’s affordable housing market, and even more disturbingly, would inadvertently undercut Watsonville’s critical need for a steady and predicable expansion of the City’s supply of affordable housing for years—if not decades—into the future. 3) Lack of transparency and stakeholder engagement: The public, including those constituencies directly impacted by the City’s affordable housing program, have not yet been given a meaningful opportunity to provide input.
4) Impact on all stakeholders: The changes you eventually adopt will certainly extend well beyond housing developers like me. By way of illustration, current program residents' resale prospects (and the financial condition of their respective households) would be severely affected by precipitously adopting erroneous and artificially restrictive program requirements. Furthermore, the spillover effect of such a punitive treatment of current program participants would disappoint prospective program beneficiaries who are patiently awaiting the chance to purchase through the affordable program as their only practical pathway to home ownership. In sum, the dual phenomena of chilling the resale market for current program participants and creating outsized obstacles for housing developers otherwise qualified to supplement the affordable housing inventory (as addressed in Paragraph 5 below) would be a pernicious combination.
5) Barriers to essential capital and other critical resources in a highly-competitive global financial markets: As you may know, I am actively engaged as a conduit for arranging and structuring capitalization and other crucial resources essential to the construction of housing projects in Watsonville and elsewhere now and over the intermediate and long term. As such, I am proud to say that I have always been a zealous advocate for Watsonville-based

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projects. From that vantage point, I am constantly focused on touting Watsonville's attractiveness to the global investment networks. Speaking candidly and forthrightly, over more than a decade committed to housing projects in Watsonville and elsewhere, I have never until now encountered such a major challenge to Watsonville’s hard-won reputation as a “being open for business.” Frankly, I worry that if the proposed changes to the affordable housing program are precipitously rushed through without careful attention, the omnipresent law of unintended consequences will cause Watsonville to be bypassed by developers (unavoidably and sadly including my own organization) in the future inasmuch as Watsonville projects will be disfavored when contrasted with viable opportunities elsewhere.

On a constructive note, the benefits of tapping the outweighs versus punching the accelerator in the context of the newly proposed changes significantly outweigh the potential drawbacks. By simply pausing to engage in a thorough and collaborative review process, Watsonville stands to secure and protect an effective affordable housing supply. On the other hand, the potential consequences of hastily implementing poorly informed changes will negatively impact not only housing developers like me but also current program residents, prospective program participants, and the Watsonville community at large. Given Watsonville’s dire demand for housing coupled with the asymmetry of the associated risks and rewards, I submit that the City is called upon to follow a cautious and measured approach to the proposed changes, where the rule of "look before you leap" is particularly fitting.

If you concur that a modest postponement is in order, I propose that the City take maximal advantage of the resulting window of opportunity. During the interim, wouldn’t it be advisable for the City to form an ad hoc taskforce drawn from a cross-section of stakeholders, including representatives from City Hall, housing developers (whether non-profit and for-profit), current and prospective homeowners within the affordable program, real estate and mortgage professionals, and any number of other constituencies and community advocacy groups? It seems the key to success is to promote and ensure a transparent, data-driven process that respects the concerns of all stakeholders and targets a balanced and positive outcome for Watsonville and its residents.

Thank you for your time and consideration, which I earnestly appreciate.

Sincerely,
Lisa Li
Phone: 415-2790482; Email: [email protected]

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx Agenda Report
MEETING DATE: Tuesday, June 11, 2024
TO: City Council
FROM: ADMINISTRATIVE SERVICES DIRECTOR DURAN
SUBJECT: RECOMMENDED ANNUAL BUDGET FOR FISCAL YEARS 2024- 25 AND RELATED ACTIONS
Link to Budget: https://www.watsonville.gov/426/Budgets RECOMMENDED ACTION:

It is recommended that the City Council and Successor Agency and Successor Housing Agency Boards of the City of Watsonville review the proposed FY 2024-25 Budget Plan and take the following actions and any appropriate motions:

Appropriate motions if any:

DISCUSSION:

The City Council and Successor Agency and Successor Housing Agency Board of the City of Watsonville will consider the following actions at its June 25, 2024, meeting:
1) Resolution adopting the FY 2024-25 Budget Plan, providing certain transfers of funds & approve the Five-Year Capital Improvement Program
2) Approve a resolution adopting a Hydrant Meter Deposit 3) Approve a resolution adopting a Commercial Container Contamination Fee 4) Resolution establishing the “Total Annual Appropriations” pursuant to State Constitution Article XIII-B for Fiscal Year FY 2024-25 (Proposition 4 GANN spending limit)
5) Ordinance instructing Santa Cruz County to levy and collect property tax on taxable property within the City of Watsonville for fiscal year beginning July 1, 2024, to June 30, 2025, at the levy rate of 0.077% and allocating proceeds to the Retirement Fund 6) Successor Housing Agency Resolution authorizing the expenditure of low and moderate-income housing funds.
7) Successor Agency Resolution finds that the use of taxes allocated from the Watsonville 2000 Redevelopment Project outside the project area will be of benefit to the project area.

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx DISCUSSION:

Table 1: Fiscal Year FY 2024-25 Budget Summary
Budget appropriations for fiscal year 2024-25 are $267,655,732.

The City is in its second year of a 2-year budget plan. This report was prepared to provide new and updated information. This allows for an expedited budget review and adoption process that includes the February mid-year review. We are presenting a budget that will provide for proposed budget savings to present a balanced General Fund budget. Table 2 below provides a summary of the proposed savings in the General Fund. This is a balanced budget that maintains Council approved reserves.

City Charter. Under the Charter of the City of Watsonville, sections 1103-1105 instruct that the City Manager must prepare and present a proposed budget for the ensuing fiscal year at least 30 days prior to the beginning of next fiscal year. The Charter requires the budget to include:
a) An itemized statement of estimated income and revenues from all sources for the year that the budget is to cover.
b) An itemized statement of the proposed expenditures recommended by the City Manager for each office, department, or agency for the year which the budget is to cover.
c) The probable amount required to be levied and raised by property taxation; and d) Other information the City Manager may deem essential, or as the Council may require.

The Charter requires that “the Council shall proceed to consider the proposed budget and may increase, decrease or omit any item or insert new items therein.” It further requires that a public hearing be held, grants the authority for Council to make any final modifications and then requires that prior to the beginning of the ensuing fiscal year, “the Council shall adopt the budget with revisions, if any.”
General Fund
Total
Special
Total
Debt
Total
Enterprise
Total
Internal
Total
Private Trust
Total
Total All
Funds
Projected Resources 2024-25
Revenues 60,516,653 30,214,953 - 89,340,581 23,711,133 1,168,105 204,951,425 Transfers In 4,497,355 93,195 466,994 - - - 5,057,544
Total Gross Resources 65,014,008 30,308,148 466,994 89,340,581 23,711,133 1,168,105 210,008,969 Projected Expenditures
Operations 59,852,229 15,047,873 - 58,420,554 23,739,266 77,562 157,137,484 Capital 18,754,853 22,954,253 - 59,871,123 1,082,382 - 102,662,611 Transfers Out 135,139 4,622,381 - 285,056 - 14,968 5,057,544 Debt Service - - 466,994 1,255,524 - 1,075,575 2,798,093 Total Gross Uses 78,742,221 42,624,507 466,994 119,832,257 24,821,648 1,168,105 267,655,732

FUND ANALYSIS SUMMARY

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx General Fund
We have reviewed the previously budgeted revenues and expenditures that were presented in our biannual budget FY 23/24 through FY 24/25. In FY 24/25, despite increases in revenues, our operational expenditures surpassed the growth of revenues. The City experienced increased revenues exceeding the originally budgeted biannual amount by approximately $812k. However, ongoing operational costs rose by $2.3MM. This required us to review expenditures and identify budget savings to propose a balanced budget. Staff recommends that the City Council direct staff to take the necessary actions as outlined in the draft budget and implement the recommended expenditure savings measures.

We are experiencing operational expenditures that are exceeding our initial budget projections.

The increased costs are in several areas, specifically salaries, insurance costs, CalPERS Unfunded Liability, legal and other contract services.
 The rise in salaries also increased the costs of insurance and retirement.  Unfunded liability estimates are provided by CalPERS and are used in the budget preparation. In July 2022, those were provided, assuming that the investment return rate by CalPERS would be 6.8%. However, the revised amount now payable for the upcoming fiscal year is with the investment rate of return of -6.1%. Annual payment on the Unfunded Accrued Liability (UAL) is the amortized dollar amount needed to fund past service credit earned (or accrued) for members who are currently receiving benefits, active members, and for members entitled to deferred benefits, as of the valuation date. The Unfunded PERS liability costs are anticipated to remain high until 2032. At this point, there should be some relief as the PEPRA formula provides for some relief in costs.
 The proposed increase in legal costs is to align these expenditures with a more realistic budget. In previous years, we’ve had to request additional legal budget appropriations during the mid-year review.
 Other contract services include the Animal Shelter and 911 JPA increased costs.  A one-time $250,000 appropriation for upcoming ballot question costs to the County.

The increase in costs that exceeded the budgeted revenues is approximately $1.6MM. We are planning for the $250,000 budget estimate for ballot questions as a one-time cost and are therefore not including that amount in our budget savings plan.

The General Fund’s 2024/25 proposed balanced budget includes a hiring pause for some vacant positions until the mid-year review of this budget. It also includes continuing to fund four filled positions with ARPA funds throughout the entire fiscal year. We are also eliminating two approved vacant budgeted positions that have remained unfilled since their approval.

These three actions will provide enough budget savings to provide a balanced Budget Plan for the City’s General Fund.

Our recommended savings plan encompasses the following budget reductions:

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx Table 2: Proposed Budget Savings
Revenues:

The following chart illustrates the composition of revenues in the general fund for FY 2024-25.

Chart 1: General Fund Revenues by Type for Fiscal Year 2024-25 Property Tax- We are budgeting base property tax to be 4% higher than the estimated collections for FY 2023-24, resulting in a total of $14,797,577. Property taxes are collected based on County Assessor rolls that were formally closed in January 2024. At that time, the normal Prop 13 assessed CPI growth was 1.3%, less the maximum allowed 2%.

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx Over the past few years, sales tax has experienced robust growth. In this upcoming fiscal year car sales are our biggest driver to a higher increase in this revenue. We expect an increase of

5.8 percent over the collections of fiscal year 23/24. The table below shows the City’s share of the County’s 9.75% sales tax:

Table 3: Breakdown of County of Santa Cruz sales tax.

Sales Tax – The category of sales represents 34% of General Fund revenues, following the passage of Measure R. Additionally, the City is also supported by sales tax in various special funds including the Library, the Measure Y Public Safety Sales tax, and Measure D transportation. Similar assumptions discussed in this report also affect each of these funds.

Hotel Tax – Hotel tax represents a relatively smaller proportion of the City’s overall revenue mix. Hotel tax is projected to grow about 3% next fiscal year 2024-25.

Utility User Tax- Utility User Tax represents about 6.1% of General Fund revenues. This tax stream tends to be more stable as it is a tax on telecommunication services, electricity, gas, and water. This revenue has been basically flat in the current year, and we are expecting normal growth of 3% in the next budget year.

Community Development Department Revenues – The Community Development Department charges fees for various services, such as inspections, plan checks, and permit issuance. The department is expected to meet its revenue budget in the current fiscal year. Nevertheless, in the next fiscal year we are projecting modest increases in their departmental revenue.

Interest rates should start seeing some decreases, so it is expected that construction and development will see some stronger numbers than in previous years. Additionally, the department is currently experiencing a high workload due to two major projects: the general plan and the housing element. The general plan update involves revising the long-term vision for the community’s development, while the housing element specifically addresses housing needs and policies.

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx Parks and Community Services Revenues – The Parks and Community Services Department is projecting modest increases in their departmental revenue. The Parks and Community Services Department brings exceptional value, particularly through its low-cost services for our residents, especially children and seniors. The department has partnered with the Pajaro Valley Unified School District and is collaborating with the school district to leverage resources to better serve the community. Parks broke ground earlier this month on the Ramsay Renaissance project, and we will have a much-improved park space when we finalize this project.

Other General Fund revenues comprise smaller portions of the overall revenues, and we are projecting fewer fluctuations. This includes business licenses and parking permits, franchise fees, lease revenues, and interest. Each item was analyzed on its own. The budget does assume the use of $9,429,387 of American Rescue Plan Act (ARPA) funds over the next fiscal year. There are many parts of the budget that we believe will be eligible to be covered by ARPA funds, but we are specifically utilizing the funds to assist us in fixing streets and potholes, Ramsay Park, wayfinding, economic development, and position restoration. It is important to highlight that these funds must be obligated and allocated for specific purposes by December 2024. The ARPA funds give us a unique opportunity to address pressing community needs and invest in our City.

Table 4 below summarizes all the revenue categorized by type described above.

Table 4: General Fund Revenue Summary
Department
Actuals
FY 2023
FY 2024
Bugdet
FY 24
Projection FY 25 Budget
Revenues:

Property Tax 13,530,558 14,188,665 14,255,398 14,797,577 Sales Tax-General 14,817,434 14,020,907 14,023,852 14,974,566 Hotel Room Tax 1,536,839 1,500,000 1,804,252 1,600,000
Utility User Tax 4,358,302 4,268,320 4,268,320 4,400,000 Transfers In 4,122,071 4,423,954 3,993,020 4,264,868
Measure R 344,323 5,205,309 5,205,309 5,518,000
Total Revenues 38,709,527 43,607,155 43,550,151 45,555,011 CDD 1,740,264 2,116,800 2,116,800 2,355,600
Police 1,271,080 1,597,100 1,437,921 1,707,297
Fire 793,626 509,592 450,157 509,592
PW 64,075 287,000 46,347 522,742
PCS 617,301 957,066 696,454 960,363
Other 14,497,683 9,246,926 9,238,478 8,981,717
Total GF Revenue 57,693,557 58,321,639 57,536,309 60,592,322 General Fund Estimate Expenditures and Revenues
Fiscal Year Ending June 30, 2025

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx Expenditures and Revenues
The city expenditures are projected to grow faster than revenues. In prior years, Watsonville was already dealing with structural shortfalls in its budget. This was primarily driven by increasing costs of unfunded actuarial liabilities (UAL) related to retirement costs. Unfunded actuarial liabilities refer to the difference between the projected obligations of the pension plan and the assets set aside to fund those obligations. Though this is still a major driver for the increased costs, salaries and insurance have also seen steep increases. The City received a 12% increase in Worker’s Compensation, Liability, and Health Insurance.

The City has demonstrated prudent fiscal planning, and we have remained focused on maintaining reserves and anticipating future needs. Because of this, we implemented a hiring pause of many vacant positions, followed by eliminating two (2) new, unfilled positions that were approved by the Council at the mid-year budget update utilizing fund balance. By prudently working with our departments, we are better prepared to address unforeseen circumstances or financial challenges that may arise. We are also proactively planning for certain adjustments that must be made to accommodate cost-of-living adjustments (COLAS), increased benefits costs, and contractual obligations.

The City is also facing uncertainty with Measure R Funds. There is a proposal on the November 2024 ballot sponsored by the California Business Roundtable that, if passed, would require any new state or local tax to be approved by voters (retroactive to January 1, 2022) if it did not meet certain requirements. Unfortunately, this includes Measure R. If successful, the ballot measure would require the governing body to approve all new taxes by a two-thirds vote.

Measure R would be repealed and would need to be re-voted on, and this time, instead of needing a majority of the voters, would require 2/3 of votes or 66%.

The threat of losing this revenue prevented the City from issuing bonds for the Ramsay construction project, City Plaza, and the Rolling Hills Use Agreement. We have previously presented the information to the Council at their approval of the Ramsay construction contract at the March 26th City Council meeting. Due to the uncertainty of the measure, the City Council opted not to issue bonds as it would commit the general fund to the debt service payment. After November and the fate of Measure R is determined we will take appropriate steps to address these capital needs based on Council direction.

We have also not added any new personnel positions as, at this time, we have not been able to identify ongoing revenues that would be able to pay for the ongoing costs of new positions.

Instead, our Library Department will use its personnel budget to fund temporary salaries to implement its planned programming. Also, we have budgeted most of the fund balance and current operational revenue to continue funding the programs already underway and on capital dollars to be spent on Ramsay Park and streets projects.

Salaries– Salaries and benefits make up 75% percent of General Fund operating expenditures and therefore represent the greatest cost increase. There is an increase of 0.5 position proposed across all funds, in the library fund. The budget also reflects both actual and expected contractual raises for all bargaining units.

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx Table 5: Proposed new positions
Unfunded Actuarial Liability (UAL) – The City’s UAL costs pose an ongoing challenge. The upcoming FY 2024-25 UAL costs will represent 13% of the general fund operating budget.

The total of $6,403 million represents a $912 thousand increase from the prior year. Costs are projected to increase every fiscal year until about 2032. At this point, there will be some relief as a result of a new retirement formula the City implemented in FY 2013, known as the California Public Employees’ Pension Reform Act (PEPRA). The fact that the UAL costs are expected to represent 13% of the general fund operating budget suggests a significant portion of the city’s financial resources will be allocated to addressing the liability. We have a CalPERS smoothing reserve of $1 million fully funded in our fund balance reserves to help mitigate the impact of future UAL costs on the city’s budget.

Other Benefits—Other benefits such as normal retirement costs, social security, and Medicare are expected to rise at similar rates to salaries. Our health insurance broker recently provided information that after several years of minimal or no increases in healthcare costs, there will be a significant rise of approximately 12 percent in the upcoming calendar year.

Other non-position costs—Citywide non-position impacts on the general fund are mainly for rate increases in the JPA contract with the county for 911 and Animal Shelter services. Also, ballot questions for the November election are projected at $250,000, and migration to the Cloud with the general fund share at about $85,000.

Select Department Changes
All departments are impacted by the citywide impacts described above. Table 6 shows the proposed General Fund operating budget by department.

Table 6: General Fund Operating Budget by Department
Below is the graph that shows the breakdown of the General Fund expenditures:

Proposed position addition
Library Fund
Librarian 0.5
Total 0.5

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx Graph 2: General Fund Expenditures by Type
Community Development Department—As mentioned in the revenue section above, the Community Development Department is actively engaged in two major projects: the City’s new general plan update and housing element. Despite their workload, demand for their services has not decreased throughout this past year.

Parks and Community Services Department- The Parks and Community Services Department offers a wide array of services and programming for our community. The science workshop program is also a program that PCS offers; this helps better leverage our combined child programming resources. In addition to the ongoing projects and programs mentioned earlier, the department is actively involved in the Ramsay Renaissance Park Improvements. Bothman Construction was awarded the contract at the March 2024 meeting. Construction is slated to begin later in the summer. The park’s grand opening is expected in September 2025. These efforts demonstrate the City’s and department's commitment to enhancing recreation facilities and providing inclusive and enjoyable spaces for our community.

Other General Fund Operational Changes- As discussed, most of the increases in the table above reflect increased costs of doing business and increases in salary and benefits for existing employees.

Expenditutres
Actuals
FY 2023
FY 2024
Bugdet
FY 24
Projection FY 25 Budget
City Council 82,884 121,513 102,417 296,825
City Manager 1,862,370 1,975,335 1,884,045 1,861,960
City Clerk 883,076 797,948 703,087 1,800,667
Community Development 3,119,652 3,096,837 3,096,837 3,229,808 Finance 1,518,037 1,822,539 1,556,073 1,898,810
Human Resources 818,498 877,447 868,563 935,927
Social Services 237,398 279,415 267,334 279,415
Parks & Community Services 5,402,103 6,035,860 5,405,208 6,009,647 Fire 8,784,112 8,720,387 9,279,412 9,239,593
Library 541,684 578,164 578,164 624,584
Non-Department 8,470,645 3,831,117 3,129,474 2,904,728
Police 20,597,580 22,551,283 22,768,455 24,001,089
Public Works 1,665,179 2,325,954 1,805,039 2,204,423
Measure R - 5,467,200 902,150 3,177,041
Total Depts 53,983,219 58,481,000 52,346,259 58,464,517

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx Chart 2: General Fund Expenditures by Department for Fiscal Year 2024-25 Five Year Outlook
Our five-year projection assumption assumes that there will be no new programmatic changes.

It provides a snapshot of the projected costs if we maintain our current operations and do not introduce new programming. To that end, it takes our annual budget produced and described above and adds some assumed inflationary factors to the revenues and expenses. This will be refined and updated each year as information becomes available, as economic conditions change, new priorities arise, and decisions are made to keep the City’s budget in balance.

Table 7 reflects the General Fund’s five-year outlook with major assumptions described below.

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx Table 7: General Fund Five-Year Outlook
Property Tax: Based on historical averages, we are projecting a 3% increase in each year.

Sales Tax: The FY 2024-25 sales tax is expected to increase by 5.8% over the last fiscal year.

In the following years, past the current proposed budget, we have received estimates from our sales consultants as to our percentage growth increases, assuming some normal growth.

Other Non-Department and Departmental Revenues: These are projected to grow between 2% and 3% for each of the out years, assuming some normal inflation.

Salaries: In the last three years, we assume salaries have grown gradually, at 2%.

Retirement Costs: The normal cost portion of our retirement is anticipated to grow at the same rate as our salaries. Our portion of the unfunded liability is based on the most recent actuarial reports from CalPERS. The actuarial report shows our annual liability increasing in the budget year included.

Health Benefits – While Watsonville has seen little to no increases in our health insurance costs in recent years, we knew it was an anomaly in the industry and among our peer cities.

This trend has changed and we experienced a 12 percent increase in this current calendar year with additional increases expected in the upcoming calendar year which are planned for in this budget.

Utilities – We assume the newly adopted rate increase schedule for the Public Utilities of 1% for Water, 7.5% for Wastewater, and 5% for Solid Waste.

Other Non-Personnel Costs – We assume these costs will increase by 3%, an assumed proxy for CPI.

Operating Capital- In our 5-year capital plan, we are budgeting capital just over $9.8 million in FY 2024-25. The City has quite a bit of unfunded capital needs. We continue to look for outside funding sources to meet those needs. However, budgeting a realistic amount of capital to maintain our facilities is imperative to preventing projects from becoming larger and more expensive replacement projects.

FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2027/28
Revenue 60,592,322 61,861,215 63,213,362 64,653,773 66,083,282 Expenses 70,867,827 64,633,019 66,909,156 69,180,170 71,867,616 Revenue less Expense (10,275,505) (2,771,804) (3,695,794) (4,526,397) (5,784,335) Net Deficit (10,275,505) (2,771,804) (3,695,794) (4,526,397) (5,784,335)

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx Select Special Revenue Funds
Table 8: Select Special Revenue Funds
Library Fund
The Library fund is supported through a county-levied special sales and use tax. As such, we expect its revenues to return to normal and follow the sales tax patterns described above. The library is proposing to utilize some of its accumulated fund balance for building improvements to the library restroom facilities and painting the library. They are also increasing their workforce by converting one half-time employee into a full-time employee. This will enable the library to expand its service, offering to better cater to the needs of our citizens.

ARPA
We have budgeted to use the remaining American Rescue Plan Act (ARPA) funds to support improvements in streets, investment in economic development to continue to grow and diversify our revenues, Ramsay Park, and position restoration, just to name a few. We will continue to monitor the spending of these funds as the deadline to commit and obligate the use of these funds is approaching, December 31, 2024. The funds must then be fully spent down, two years later, December 31, 2026. We will work with the various departments on developing a contingency plan.

Gas Tax and SB1
The gas tax is expected to be relatively flat in this budget. These funds pay for roadway projects and include some staff and material costs for regular maintenance of the streets. The Public Works department has been very successful in recent years in receiving grants for transportation projects in addition to these special revenue funds.

Measure Y
In March 2020, Watsonville voters overwhelmingly voted to pass Measure Y and renew the existing half cent public safety sales and use tax. This tax allows Fire, Police and Parks departments to increase their expenditures on their respective operating budgets. The Fire 0250 0262 0305 0306 0309 0310 0312

LIBRARY
ARPA FUNDAMERICAN

RELIEF PLAN GAS TAX
SB 1 - GAS

TAX FUNDING

PARKING
GARAGE

SALES TAX

MEASURE Y

M EA SUR E D -

T R A N SP OR T A T ION
F UN D
Projected Resources 2024-25
Revenues 4,636,759 8,988,031 1,413,546 1,100,000 162,000 5,539,100 1,030,000 Transfers In - - - - 93,195 - -
Total Gross Resources 4,636,759 8,988,031 1,413,546 1,100,000 255,195 5,539,100 1,030,000 Projected Expenditures
Operations 4,468,298 622,037 1,050,395 - 178,948 5,723,530 - Capital 550,000 8,807,350 1,230,351 3,423,540 - 1,996,716 5,308,966 Transfers Out 163,474 - - - 1,584 - -
Debt Service - - - - - - -
Total Gross Uses 5,181,772 9,429,387 2,280,746 3,423,540 180,532 7,720,246 5,308,966 Surplus / (Shortfall) (545,013) (441,356) (867,200) (2,323,540) 74,663 (2,181,146) (4,278,966) Total Available Funds 6/30/2025 1,576,435 11,558,644 (117,200) 426,460 74,663 268,854 (278,966)

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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx and Police Department can fund positions, other operating expenditures, and capital with these funds. The Parks department can fund repairs, staffing and other operating costs with their allocation. Fire and Police are also proposing to use their accumulated balances to purchase specialized equipment for their departments and invest in some building maintenance and repairs. Though it is expected that at the end of this budget year, the Police Department will have spent down all of their spendable fund balances on capital and will need general fund support in future years to come.

Select Enterprise Funds
Table 9: Select Enterprise Funds
The Utility Enterprises of Wastewater, Water, and Solid Waste are proposing minimal changes to their operating budgets. The Council approved a five-year rate schedule that is still in place during this budget. This budget year is in fact the last year of that rate schedule and they will be embarking on a new study. The rising costs of the Utility finds is primarily attributed to the growing expenses associated with capital improvement projects, the costs of materials and supplies, and in the case of Solid Waste, the cost of disposal contracts, rather than personnelrelated cost increases as seen in the general fund. The Main Switchgear and Energy Recovery Electrical System Improvement and the continuation of the work for the reopening of the Landfill are two of the biggest drivers for these increases in spending for the Enterprise Funds.

The Airport fund is supported through three revenue streams, leasing of properties to aeronautical and non-aeronautical commercial businesses, leasing of aviation storage units, and aviation fuel sales. The department is expecting revenues to improve in the budget 0710 0720 0730 0740 0741 0789
WASTE

WATER WATER AIRPORT
SOLID
WASTE

LANDFILL

CLOSURE

FIBER OPTIC
FUND
Projected Resources 2024-25
Revenues 36,109,971 26,473,508 4,271,382 22,403,870 - 81,850 Transfers In - - - - - -
Total Gross Resources 36,109,971 26,473,508 4,271,382 22,403,870 - 81,850 Projected Expenditures
Operations 18,837,126 18,215,455 4,238,345 16,804,739 247,761 77,128 Capital 22,726,294 25,031,161 304,000 3,117,590 8,692,078 - Transfers Out 202,513 31,651 5,056 45,836 - -
Debt Service 485,078 13,888 23,037 733,521 - -
Total Gross Uses 42,251,011 43,292,155 4,570,438 20,701,686 8,939,839 77,128 Surplus / (Shortfall) (6,141,040) (16,818,647) (299,056) 1,702,184 (8,939,839) 4,722 Total Available Funds 6/30/2025 4,821,784 11,667,630 200,944 15,918,434 - 279,722

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Watsonville City CouncilJune 11, 2024

Watsonville City Council
June 11, 2024