Watsonville City Council
May 27, 2025

Reso No. (CM)
Meeting Date: 052725 2
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. The Council finds that the purchase of Sensus FlexNet RNI-Analytics, Software as a Service (SaaS), is available from one source that meets the needs of the City (also known as a sole source purchase).

3. This purchase is exempt from the purchasing procedures of Chapter 5 of Title 3 of the Municipal Code as a sole source purchase under subdivision (c) of § 3-5.210 of the Municipal Code.

4. That the Council hereby approves the Purchase Order between the City of Watsonville and Aqua-Metric Sales Company, a corporation, for the purchase of Sensus FlexNet RNI-Analytics, Software as a Service (SaaS), in an amount not to exceed $296,414 for five (5) years.

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

1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, May 27, 2025
TO: CITY COUNCIL
RECOMMENDED BY: AIRPORT DIRECTOR WILLIAMS
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: RESCINDING RESOLUTION NO. 72-25 AND AUTHORIZING THE CITY

MANAGER TO EXECUTE CONTRACT FOR THE CONSTUCTION OF THE

WATSONVILLE MUNICIPAL AIRPORT FUEL DISPENSER CONTAINMENT, PROJECT NO. AIRPORT 910-7855-14900 AND BUDGET APPROPRIATION IN THE AMOUNT OF $287, 76
RECOMMENDATION:

It is recommended that City Council rescind Resolution No. 72-25 (CM), and adopt a resolution authorizing the City Manager to execute construction contract for the construction of the Watsonville Municipal Airport Fuel Dispenser Containment, Project No. Airport 910-7855-14900, in the amount of $287,769.

BACKGROUND:

Installed in the 1990s, the Fuel Dispensers are used to dispense fuel from the underground storage tanks (USTs) into the mobile fuel trucks. Since they were installed, the rules and regulations overseeing USTs have changed, and the existing Fuel Dispensers no longer comply with the requirements. A fuel dispenser containment project is necessary in order to comply with the regulations and continue with the fueling operations. The project includes dedicated sheet metal enclosures and under-dispenser containment complete with automatic shut-off valves. The sheet metal enclosures will have their own dedicated leak detection sensor, which, upon detection of a fuel leak, will stop the flow of fuel.

Council authorized adoption of a construction contract for the above project on March 25, 2025. Staff inadvertently attached the incorrect contract to the agenda. Staff is bringing this item to rescind the March 25th resolution and approve the correct contract.

2 CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

This recommendation 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.

STRATEGIC PLAN:

The Fuel Dispenser Containment Project aligns with the Watsonville Municipal Airport strategic plan to reduce the airports’ carbon footprint and lessen the airport’s impact on the environment. To date, the airport has installed LED lights throughout the airport, charging stations, unleaded fuel and acquired electric vehicles.

Infrastructure & Environment
FINANCIAL IMPACT:

The $287,769 will be and paid from the Airport Enterprise Fund. It has been on the Airport’s Capital Expenditure plan since 2021.

ALTERNATIVE ACTION:

The City Council can reject the bid and not award the construction contract.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

None.

Reso No. (CM)
Reference: Reso No. 72-25 (CM) (Rescind)
Meeting Date: 051325 SWZ ______ TV ______ Airport ______ 1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE RESCINDING RESOLUTION NO. 72-25, AUTHORIZING

THE CITY MANAGER TO EXECUTE CONSTRUCTION CONTRACT FOR

THE WATSONVILLE MUNICIPAL AIRPORT FUEL DISPENSER
CONTAINMENT, PROJECT NO. AIRPORT 910-7855-14900, AND
AUTHORIZING BUDGET APPROPRIATION OF $287,769.00 FROM
ACCOUNT 910-7855-1400
WHEREAS, on October 22nd, 2024, Council adopted Resolution No. 214-24 (CM), approving plans and specifications and authorizing calling for bids for the Watsonville Municipal Airport Fuel Dispenser Containment, Project No. Airport 910-7855-14900; and WHEREAS, the engineer’s estimate of probable construction cost was $287,769.00; and
WHEREAS, pursuant to Title 7, Chapter 14 of the City of Watsonville Municipal Code, the City issued a notice inviting bids and bids were received for the Watsonville Municipal Airport Fuel Containment, Project No. Airport 910-7855-14900; and WHEREAS, bids that were submitted by the deadline, were publicly opened in the “Old City Council Chambers”, City Hall, 250 Main Street, Watsonville, California, on Tuesday, December 3, 2024, at 11:00 A.M., and later tabulated by the Purchasing Officer for the consideration of the City Manager and submission to the City Council; and
WHEREAS, the City Manager has recommended that the bid from ACCO Engineered Systems Inc. [Contractor License #120696], for the Watsonville Municipal Airport Fuel Containment, Project No. Airport 910-7855-14900, in the amount of $287,769.00, be accepted as the lowest responsible and responsive bidder, which is below the engineer’s estimate for the project.

Reso No. (CM)
Reference: Reso No. 72-25 (CM) (Rescind)
Meeting Date: 052725 2
WHEREAS, on March 25th, 2025, Council adopted Resolution No. 72-25 (CM), awarding construction contract to ACCO Engineered Systems Inc. for the Watsonville Municipal Airport Fuel Dispenser Containment Project; and WHEREAS, subsequent to the Council’s adoption of Resolution No. 72-25 (CM), Staff discovered that the incorrect contract was attached to Resolution No. 72-25(CM); and
WHEREAS, staff wishes to correct the error by rescinding Resolution No. 72-25 (CM) and approving the correct contract.

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

1. Rescinding a prior Resolution and adopting a new Resolution authorizing the City Manager to execute a construction contract 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. Resolution No. 72-25 (CM) is rescinded.

3. The City Manager is hereby authorized and directed to execute construction contract, awarding the contract to ACCO Engineered Systems, Inc., for the City of Watsonville Fuel Dispenser Containment Project No. 910-7855-14900, in the amount of $287,769.00, attached hereto as Exhibit A and in the form on file in the Office of the City Clerk, for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney.

Reso No. (CM)
Reference: Reso No. 72-25 (CM) (Rescind)
Meeting Date: 052725 3

4. That the budget appropriation of $287,769.00 from the Airport Enterprise Fund 910-7855-14900 is hereby authorized.
*******************************

1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, May 27, 2025
TO: CITY COUNCIL
WRITTEN BY: Silvia Diaz, Public Works Financial Analyst RECOMMENDED BY: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: AUTHORIZE CITY MANAGER TO EXECUTE NO-COST CONTRACT

AMENDMENTS FOR TIME EXTENSIONS ON VARIOUS PUBLIC WORKS

CONTRACTS THAT REQUIRE COUNCIL APPROVAL
RECOMMENDATION:

It is recommended that the City Council adopt a resolution authorizing the City Manager to execute nocost contract amendments to extend the date of completion of the listed various existing executed Public Works contracts that had previously required City Council approval in accordance with the City Purchasing Policy.

BACKGROUND:

City Departments manage several contracts for various types of work and consultant agreements. These contracts are executed with a specific completion date based on the original scope of work. The City’s Purchasing Policy requires time extensions to return to the original approval authority for time extensions on said contracts, even if there is no change to cost or scope.

DISCUSSION:

Over the course of the completion of a contract, various delays may occur that are outside of the contractor’s control or may be delayed by City scheduling preference and/or staff availability. In these cases, the contract scope and budget have not changed, but the original completion date may expire before completion. Executing a no-cost time extension is a routing clerical task.

Under the City’s Purchasing Policy, contracts or amendments that originally came under the approval authority of the City Council, are required to return to Council for extensions of time, even when there is

2 no change to scope of work or compensation. The following list of contracts managed by various City Departments fall under this no-cost or no scope of work change category, and have a completion date that has recently passed or will expire soon:

Contract # Vendor Description Original
Completion Date
Requested
Completion Date
2590 Waterways
Consulting Inc.

Middle Struve Habitat
and Water Quality
Improvement
12/31/24 06/30/2026
2570 Watsonville
Wetlands Watch
Middle Struve Slough
Water Quality
Enhancements
03/31/2025 06/30/2026
2763 Carollo Engineers,
Inc.

Freedom Site Feasibility
Study, Historic Property
Identification Report
06/30/2025 06/30/2026
1871 Global Concepts Office Space Design 06/30/2025 06/30/2026 2196 Kimley-Horn &
Associates, Inc.

HWY 1 Harkins Slough Rd
Safe Routes to School
Improvements
06/30/2025 06/30/2026
2632 Cal Engineering &
Geology, Inc.

Construction Plans/Docs
Pennsylvania Trail Repair
06/30/2025 06/30/2026
2250 Cal Engineering &
Geology, Inc.

Pennsylvania Dr.

Reconstruction Project
Plans & Docs
06/30/2025 06/30/2026
Staff, therefore, recommend that the City Council authorize the City Manager to execute no-cost, no scope modification contract amendments for each of the various City contracts listed above to extend the time allowed for completion from the original contract completion date to the requested completion date listed in the table above.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

The potential environmental impacts resulting from authorizing the City Manager to approve amendments to various contracts have been adequately evaluated by previously adopted environmental documents, in accordance with the California Environmental Quality Act (CEQA). Extending the timeline to complete the various projects does not create any new or significant impacts that have not already been analyzed.

STRATEGIC PLAN:

This recommendation is consistent with the following Strategic Goals:

Efficient and Well-performing Government
FINANCIAL IMPACT:

3 There is no financial impact as all these contract time extensions have no impact on scope or cost.

ALTERNATIVE ACTION:

No reasonable alternatives are known at this time.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

None.

Reso No. (CM)
Reference: Reso Nos
Meeting Date: 052725 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE APPROVING NO-COST CONTRACT AMENDMENTS
FOR TIME EXTENSIONS ON VARIOUS CONTRACTS; AND

AUTHORIZING CITY MANAGER TO EXECUTE SAME
WHEREAS, various Departments manage several contracts for various types of work and consultant agreements; and
WHEREAS, contracts are executed with a specific completion date based on the original scope of work. The City’s Purchase Policy requires time extensions to return to the original approval authority; and
WHEREAS, the attached list of contracts managed by various Departments falls under this no cost or scope change category and has a completion date that has recently passed or will expire soon.

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

1. The potential environmental impacts resulting from authorizing the City Manager to approve amendments to various contracts have been adequately evaluated by previously adopted environmental documents, in accordance with the California Environmental Quality Act (CEQA). Extending the timeline to complete the various projects does not create any new or significant impacts that have not already been analyzed.

2. That the attached list of contracts, attached hereto and incorporated herein by this reference, are managed by various Departments, and fall under the no cost or scope change category and are extended to the Requested Completion Date.

3. That the City Manager is hereby authorized and directed to execute said No-Cost Contract Amendments for Time Extensions on Various Contract for and on

Reso No. (CM)
Reference: Reso No’s
Meeting Date: 052725
2 behalf of the City of Watsonville in the form attached hereto and incorporated herein by this reference, with minor revisions that may be approved by the City Manager and the City Attorney.
************************************

List of No-Cost Contract Amendments for Time Extensions Contract
#
Vendor Description Original
Completion Date
Requested
Completion Date
2590 Waterways
Consulting Inc.

Middle Struve
Habitat and Water
Quality
Improvements
12/31/2024 06/30/2026
2570 Watsonville
Wetlands Watch
Middle Struve
Slough Water
Quality
Enhancements
03/31/2025 06/30/2026
2763 Carollo
Engineers, Inc.

Freedom Site
Feasibility Study,
Historic Property
Identification
Report
06/30/2025 06/30/2026
1871 Global Concepts Office Space
Design
06/30/2025 06/30/2026
2196 Kimley-Horn &
Associates, Inc.

HWY 1 Harkins
Slough Rd Safe
Routes to School
Improvements
06/30/2025 06/30/2026
2632 Cal Engineering &
Geology, Inc.

Construction
Plans/Doc
Pennsylvania Trail
Repair
06/30/2025 06/30/2026
2250 Cal Engineering &
Geology, Inc.

Pennsylvania Dr.

Reconstruction
Project Plans &
Docs
06/30/2025 06/30/2026

1 THIRD AMENDMENT TO CONSULTANT SERVICES CONTRACT

BETWEEN THE CITY OF WATSONVILLE
AND WATERWAYS CONSULTING, INC.

THIS THIRD AMENDMENT TO CONTRACT for consultant services is entered into by and between the City of Watsonville ("City") and Waterways Consulting, Inc. (“Consultant”) this day of __________________. The City and Consultant agree as follows:

RECITALS
WHEREAS, City and Consultant have previously executed a Consultant Services Contract to revise Middle Struve Slough Habitat and Water Quality Improvement Project with trail extension dated February 13, 2023; and
WHEREAS, the original contract was in the amount of $64,764.00 with an expiration date of December 31, 2024;
WHEREAS, A RFQ was requested for Engineering Consultants On-Call list on June 15, 2021, where Waterways was selected as a qualified firm; and WHEREAS, on September 24, 2024, First Amendment was executed to add to Section 1. Scope of Services, to support with CDFW and CCRWQCB permit and provide assistance with developing the technical specification anbids for the construction, amending Section 4 and Exhibit “C” both entitled “Compensation”, in the amojnt of $13,173.20; and
WHEREAS, the Third Amendment of the Contract for Consultant Services is in the best interest of the City of Watsonville.

NOW, THEREFORE, the City and the Consultant agree that the Contract shall be amended as follows:

Docusign Envelope ID: 4E29D152-8F7E-4DA2-8A49-8F280AA2C706

2 Section 2 is hereby amended to add the following:
"Section 2. Term of Contract. The term of the Contract shall be extended to June 30, 2026."
Section 3 is hereby amended to read:

Section 3. and Exhibit “B”, both entitled “Schedule of Performance” is hereby amended to read:

All work shall be completed by June 30, 2026.

All other terms and conditions of the Contract dated February 13, 2023, as amended, shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to Consultant Services Contract the day and year first hereinabove written.

CITY OF WATSONVILLE WATERWAYS CONSULTING, INC.

By___________________________ By______________________________ Tamara Vides, City Manager Matt Weld, PE, CFM, CPESC

ATTEST:

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

By____________________________
Samantha W. Zutler, City Attorney
Docusign Envelope ID: 4E29D152-8F7E-4DA2-8A49-8F280AA2C706

1 SECOND AMENDMENT TO CONSULTANT SERVICES CONTRACT

BETWEEN THE CITY OF WATSONVILLE

AND WATSONVILLE WETLANDS WATCH
THIS SECOND AMENDMENT TO CONTRACT for consultant services is entered into by and between the City of Watsonville ("City") and Watsonville Wetlands Watch (“Consultant”) this day of __________________. The City and Consultant agree as follows:

RECITALS
WHEREAS, City and Consultant have previously executed a Consultant Services Contract to revise for Watsonville Wetlands Watch to support and implement Ocean Protection Council Middle Struve Slough Water Quality and Habitat Enhancement Project dated January 13, 2023; and
WHEREAS, the original contract was in the amount of $543,080 with an expiration date of December 31, 2024;
WHEREAS, City staff in partnership with Watsonville Wetlands Watch, applied for the Ocean Protection Council Grant for the implementation of multi-benefit ecosystem and watershed restoration project that improve water quality, habitat, regional resilience to climate change and enhance public access; and
WHEREAS, on March 10, 2025, First Amendment was executed to amend Section

1. Scope of Services and Section 2. Term of contract to extend to March 31, 2025; and WHEREAS, the Second Amendment of the Contract for Consultant Services is in the best interest of the City of Watsonville.

NOW, THEREFORE, the City and the Consultant agree that the Contract shall be amended as follows:

Docusign Envelope ID: 6D399313-DE03-42F3-AFD9-65629E6C049E

2 Section 2 is hereby amended to add the following:
"Section 2. Term of Contract. The term of the Contract shall be extended to June 30, 2026."
Section 3 is hereby amended to read:

Section 3. and Exhibit “B”, both entitled “Schedule of Performance” is hereby amended to read:

All work shall be completed by June 30, 2026.

All other terms and conditions of the Contract dated January 13, 2023, as amended, shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to Consultant Services Contract the day and year first hereinabove written.

CITY OF WATSONVILLE WATSONVILLE WETLANDS WATCH
By___________________________ By______________________________ Tamara Vides, City Manager Jonathan Pitch, Executive Director

ATTEST:

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

By____________________________
Samantha W. Zutler, City Attorney
Docusign Envelope ID: 6D399313-DE03-42F3-AFD9-65629E6C049E

1 SECOND AMENDMENT TO CONSULTANT SERVICES CONTRACT

BETWEEN THE CITY OF WATSONVILLE
AND CAROLLO ENGINEERS, INC.

THIS SECOND AMENDMENT TO CONTRACT for consultant services is entered into by and between the City of Watsonville ("City") and Carollo Engineers, Inc. (“Consultant”) this day of __________________________. The City and Consultant agree as follows:

RECITALS
WHEREAS, the City and Consultant have previously executed a Consultant Services Contract to revise for the Freedom Boulevard Site Feasibility Study dated June 13, 2023; and WHEREAS, the original contract was in the amount of $249,688 with an expiration date of June 30, 2025;
WHEREAS, a Request for Qualifications (RFQ) was issued on May 9, 2020, with submissions due July 9, 2020, asking for qualified consultants to assist the City for periodic and on call water and wastewater professional design services; and WHEREAS, a number of finds submitted qualifications statements; these statements were reviewed by City staff and a list was developed; and WHEREAS, Carollo Engineers, Inc., is on the list of eligible on-call consultants and selected for their knowledge and experience in water facilities and their specific experience working with the City’s Water System; and
WHEREAS, on April 5, 2024, First Amendment was executed to amend Section 1. Scope of Services and Section 4. And Exhibit “C” both entitled “Compensation” of the contract, in the amount of ($30,666), for a revised total contract amount of $280,354; and Docusign Envelope ID: 86D2B027-A203-4052-A5E2-F7ADED3C494F

2 WHEREAS, the City has added additional time to the work program for the Consultant to complete the project; and
WHEREAS, the Second Amendment of the Contract for Consultant Services is in the best interest of the City of Watsonville.

NOW, THEREFORE, the City and the Consultant agree that the Contract shall be amended as follows:

Section 2. is hereby amended to add the following:
"Section 2. Term of Contract. The term of the Contract shall be extended to June 30, 2026."
Section 3. and Exhibit “B”, both entitled “Schedule of Performance” is hereby amended to read:

All work shall be completed by June 30, 2026.

All other terms and conditions of the Contract dated June 13, 2023, as amended, shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to Consultant Services Contract the day and year first hereinabove written.

CITY OF WATSONVILLE CAROLLO ENGINEERS, INC.

By___________________________ By______________________________ Tamara Vides, City Manager Elaine L. Simmons, Associate Vice-President

ATTEST:

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

By____________________________
Samantha W. Zutler, City Attorney
Docusign Envelope ID: 86D2B027-A203-4052-A5E2-F7ADED3C494F

FOURTH AMENDMENT TO CONSULTANT SERVICES CONTRACT

BETWEEN THE CITY OF WATSONVILLE

AND GLOBAL CONCEPTS
THIS FOURTH AMENDMENT TO CONTRACT for consultant services is entered into by and between the City of Watsonville ("City") and Global Concepts (“Consultant”) this day of ____________________________. The City and Consultant agree as follows:

RECITALS
WHEREAS, City and Consultant have previously executed a Consultant Services Contract to revise for Office Space Design Services and Installation of Cubicle Office Furniture dated October 12, 2020; and
WHEREAS, the original contract was in the amount of $96,000 with an expiration date of October 9, 2022; and
WHEREAS, subdivision (c) of § 3-5.210 exempts supplies and materials which are unique, available only from one source, or sought to match existing equipment or supplies already in use (also known as a sole source purchase); and WHEREAS, Global Concepts carries office products and pre-owned office furniture that match with the City’s office furniture; and WHEREAS, on August 10, 2023, First Amendment was executed to amend Section 2. Term of Contract, and Section 3. and Exhibit “B” both entitled Schedule of Performance, to be extended to June 30, 2024; and
WHEREAS, on September 12, 2023, the City Council adopted Resolution No. 175- 23 (CM) approving the Second Amendment and increasing the contract amount by $95,000 for a revised total contract amount of $191,000; and Docusign Envelope ID: 48E434F5-69B4-40C1-A6A4-C9DEA4575E6B

WHEREAS, on December 30, 2024, the City Council adopted Resolution No. 245- 24 (CM) approving the Third Amendment to amend Section 2. Term of Contract, and Section 3. and Exhibit “B” both entitled “Schedule of Performance”, to be extended to June 30, 2025; and
WHEREAS, the Fourth Amendment of the Contract for Consultant Services is in the best interest of the City of Watsonville.

NOW, THEREFORE, the City and the Consultant agree that the Contract shall be amended as follows:

Section 2. is hereby amended to add the following:
“Section 2. Term of Contract. The term of the Contract shall be extended to June 30, 2026.”
Section 3. and Exhibit “B”, both entitled “Schedule of Performance” is hereby amended to read:
“All work shall be completed by June 30, 2026.”
All other terms and conditions of the Contract dated October 12, 2020, as amended, shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment to Consultant Services Contract the day and year first hereinabove written.

CITY CONSULTANT

CITY OF WATSONVILLE GLOBAL CONCEPTS
By___________________________ By______________________________ Tamara Vides, City Manager Lori Buffington, Owner

Docusign Envelope ID: 48E434F5-69B4-40C1-A6A4-C9DEA4575E6B

ATTEST:

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

By____________________________
Samantha W. Zutler, City Attorney
Docusign Envelope ID: 48E434F5-69B4-40C1-A6A4-C9DEA4575E6B

FOURTH AMENDMENT TO CONSULTANT SERVICES CONTRACT

BETWEEN THE CITY OF WATSONVILLE
AND KIMLEY-HORN AND ASSOCIATES, INC.

THIS FOURTH AMENDMENT TO CONTRACT for consultant services is entered into by and between the City of Watsonville ("City") and Kimley-Horn and Associates, Inc. (“Consultant”) this day of _______________________. The City and Consultant agree as follows:

RECITALS
WHEREAS, City and Consultant have previously executed a Consultant Services Contract dated September 17, 2021, to provide Design and Construction Document Preparation Services for the Highway 1 and Harkins Slough Rd Pedestrian Bridge and Safe Routes to School Improvements Project; and
WHEREAS, the original contract was in the amount of $90,020.00 with an expiration date of June 30, 2023; and
WHEREAS, a Request for Proposals (RFP) was issued on May 17, 2021, asking for qualified consulting engineers to assist the City for project design services, with the deadline for submittal of Request for Proposals on June 8, 2021; and WHEREAS, the First Amendment of the Contract for Consultant Services extended the term of the contract to June 30, 2024; and WHEREAS, Second Amendment of the Contract for Consultant Services extended the term of the contract to June 30, 2025; and
WHEREAS, the Third Amendment of the Contract for Consultant Services amends the scope of work to include Design and Construction Document Preparation Services; and
Docusign Envelope ID: 5801211C-521E-4E0A-987C-E6981EA7667D

WHEREAS, the Fourth Amendment of the Contract for Consultant Services is in the best interest of the City of Watsonville; and
NOW, THEREFORE, the City and the Consultant agree that the Contract shall be amended as follows:

Section 2. is hereby amended to add the following:
"Section 2. Term of Contract. The term of the Contract shall be extended to June 30, 2026.”
Section 3. and Exhibit “B”, both entitled “Schedule of Performance” is hereby amended to read:

All work shall be completed by June 30, 2026.

All other terms and conditions of the Contract dated September 17, 2021, as amended, shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment to Consultant Services Contract the day and year first hereinabove written.

CITY OF WATSONVILLE
By___________________________
Tamara Vides, City Manager
ATTEST:

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

By____________________________
Samantha W. Zutler, City Attorney
KIMLEY-HORN AND ASSOCIATES, INC.

By______________________________
Matthew D. Weir, P.E., Vice President

Docusign Envelope ID: 5801211C-521E-4E0A-987C-E6981EA7667D

1 FIRST AMENDMENT TO CONSULTANT SERVICES CONTRACT

BETWEEN THE CITY OF WATSONVILLE
AND CAL ENGINEERING & GEOLOGY, INC.

THIS FIRST AMENDMENT TO CONTRACT for consultant services is entered into by and between the City of Watsonville ("City") and Cal Engineering & Geology, Inc. (“Consultant”) this day of ____________________________. The City and Consultant agree as follows:

RECITALS
WHEREAS, City and Consultant have previously executed a Consultant Services Contract dated June 1, 2023, for preparation of construction plans and documents for the Pennsylvania Drive Trail; and
WHEREAS, the original contract was in the amount of $123,545 with an expiration date of June 30, 2025; and
WHEREAS, Request for Qualification Statements from Consulting Engineering Firms was issued on May 12, 2021, for Periodic and On-Call Professional Engineering Services with a deadline for submittal of Request for Qualification on June 15, 2021; and WHEREAS, the First Amendment of the Contract for Consultant Services is in the best interest of the City of Watsonville.

NOW, THEREFORE, the City and the Consultant agree that the Contract shall be amended as follows:

Section 2. is hereby amended to add the following:
"Section 2. Term of Contract. The term of the Contract shall be extended to June 30, 2026.”
Section 3. and Exhibit “B”, both entitled “Schedule of Performance” is hereby amended to read:

Docusign Envelope ID: CBB80698-2D2E-43ED-9456-B8ADB422B4F9

All work shall be completed by June 30, 2026.

All other terms and conditions of the Contract dated June 1, 2023, as amended, shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Consultant Services Contract the day and year first hereinabove written.

CITY OF WATSONVILLE
By___________________________
Tamara Vides, City Manager
ATTEST:

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

By____________________________
Samantha W. Zutler, City Attorney
CAL ENGINEERING & GEOLOGY, INC.

By___________________________
Phil Gregory, Sr. Principal Engineer
Docusign Envelope ID: CBB80698-2D2E-43ED-9456-B8ADB422B4F9

SECOND AMENDMENT TO CONSULTANT SERVICES CONTRACT

BETWEEN THE CITY OF WATSONVILLE
AND CAL ENGINEERING & GEOLOGY, INC.

THIS SECOND AMENDMENT TO CONTRACT for consultant services is entered into by and between the City of Watsonville ("City") and Cal Engineering & Geology, Inc. (“Consultant”) this day of ________________________. The City and Consultant agree as follows:

RECITALS
WHEREAS, City and Consultant have previously executed a Consultant Services Contract dated January 1, 2022, to prepare construction plans and documents for the Pennsylvania Drive Reconstruction project from Clifford Avenue to Winding Way; and WHEREAS, the original contract was in the amount of $92,836 with an expiration date of June 30, 2025; and
WHEREAS, the Consultant was selected through a Request for Qualification statements from Consulting engineering firms for periodic and on call professional engineering services design in 2021; and
WHEREAS, the First Amendment was executed to add to the scope of work, extend the term of contract to have services completed by June 30, 2025, and add compensation in the amount of $78,157.25; and
WHEREAS, the Second Amendment of the Contract for Consultant Services is in the best interest of the City of Watsonville.

NOW, THEREFORE, the City and the Consultant agree that the Contract shall be amended as follows:

Docusign Envelope ID: 37B094AA-FAE0-49C9-936D-6B2F8BBD1C3E

Section 2 is hereby amended to add the following:
"Section 2. Term of Contract. The term of the Contract shall be extended to June 30, 2026.”
Section 3. and Exhibit “B”, both entitled “Schedule of Performance” is hereby amended to read:

All work shall be completed by June 30, 2026.

All other terms and conditions of the Contract dated January 1, 2022, as amended, shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to Consultant Services Contract the day and year first hereinabove written.

CITY OF WATSONVILLE
By___________________________
Tamara Vides, City Manager
ATTEST:

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

By____________________________
Samantha W. Zutler, City Attorney
CAL ENGINEERING & GEOLOGY, INC.

By___________________________
Phil Gregory, Sr. Principal Engineer
Docusign Envelope ID: 37B094AA-FAE0-49C9-936D-6B2F8BBD1C3E

1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, May 27, 2025
TO: CITY COUNCIL
RECOMMENDED BY: AIRPORT DIRECTOR WILLIAMS
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: APPROVAL OF ASSIGNMENT OF 121 AVIATION WAY LEASE TO CENTRAL COAST ENERGY SERVICES, INC.

RECOMMENDATION:

Staff recommends that the City Council approve the assignment of the remainder of ExpoImaging, Incorporated’s four (4) year non-aeronautical facility lease, at 121 Aviation Way, to Central Coast Energy Services, Incorporated.

BACKGROUND:

ExpoImaging, Inc. markets, designs, manufactures and distributes unique and innovative camera accessories to the photographic market. It occupies a 5,564 square foot area of the building at 121 Aviation Way. ExpoImaging, Inc. is a long-standing Watsonville Municipal Airport tenant and has expressed a desire to assign the remainder of the four (4) year non-aeronautical lease to Central Coast Energy Services, Inc.

The original lease has been extended and renewed over the years under mutually beneficial terms.

DISCUSSION:

In December 2024, ExpoImaging, Inc.’s principals informed Airport management of their desire to end their City Council-approved Lease early. This was not possible as the Lease does not have an option for parties to mutually agree to end the lease and the lease is a legally binding contract.

Airport management has been actively seeking an assignment. Central Coast Energy Services, Inc. expressed interest in assuming ExpoImaging, Inc.’s Lease in May 2025.

2 As required by the Lease assignment clause, the tenants have provided: (1) prior written notice, (2) $2,500 deposit supporting the proposed assignment.

This Airport’s non-aeronautical commercial facility currently leases for $5,724.36 per month. Standard Consumer Price Index (CPI) adjustments are applied annually.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

N/A
STRATEGIC PLAN:

Infrastructure & Environment
FINANCIAL IMPACT:

The lease would provide revenue of $5,724.36 per month to the Airport Enterprise Fund.

ALTERNATIVE ACTION:

Alternatives include not approving the lease assignment.

ATTACHMENTS AND/OR REFERENCES (IF ANY):
1) Notice of Assignment from ExpoImaging

Attachment 1

Reso No. (CM)
Meeting Date: 052725 SWZ ______ TV ______ Airport ______ 1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE CONSENTING TO THE ASSIGNMENT OF LEASE,
DATED OCTOBER 1, 2021, BETWEEN EXPOIMAGING, INC. AND
CENTRAL COAST ENERGY SERVICES, INC., AND AUTHORIZING AN

DIRECTING THE CITY MANAGER TO EXECUTE SAME

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

1. Adopting a Resolution consenting to the assignment of a Lease 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 does hereby consent to the Assignment of Lease, dated October 1, 2021 (the “Assignment”), between ExpoImaging, Inc., and Central Coast Energy Services, Inc., relating to that certain Lease, dated October 1, 2021, by and between the City of Watsonville and ExpoImaging, Inc., a copy of which Assignment is attached hereto and incorporated herein by this reference, and is hereby approved.

3. The City Manager is hereby authorized and directed to execute the consent to such Assignment, in the form attached hereto, for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney.
*******************************

In Process
1 ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT
AND

CONSENT TO ASSIGNMENT

THIS ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT AND
CONSENT TO ASSIGNMENT (“Assignment”) is made as of the 1st day of June, 2025, conditioned upon the consent of the CITY OF WATSONVILLE, a charter city and municipal corporation (“City”), by and between ExpoImaging Inc., a California corporation (“Assignor”), and Central Coast Energy Services, Inc., a California Nonprofit Corporation (“Assignee”).

RECITALS
A. The City, as City, and Assignor, as Tenant, executed a lease dated as of October 1, 2021 (“Lease”), a copy of which is attached and incorporated by reference as Exhibit A, pursuant to which City leased to Tenant and Tenant leased from City that certain property described on attached Exhibit B and incorporated by reference for a term of four (4) years, commencing on October 1, 2021 and ending on September 30, 2025, subject to earlier termination as provided in the Lease.

B. Assignor desires to assign the Lease to Assignee, and Assignee desires to accept the assignment of the Lease from the Assignor and assume obligations under the Lease.

NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are acknowledged, Assignor and Assignee agree as follows:

Section 1. Assignment. Assignor assigns and transfers to Assignee all right, title, and interest in the Lease and Assignee accepts from Assignor all right, title, and interest, subject to the terms and conditions set forth in this Assignment.

Section 2. Assumption of Lease Obligations. Assignee assumes and agrees to perform and fulfill all the terms, covenants, conditions, and obligations required to be performed and fulfilled by Assignor as tenant under the Lease, including the making of all payments due to or payable on behalf of City under the Lease as they become due and payable.

Section 3. Assignor's Covenants.
(a) Assignor covenants that the copy of the Lease attached as Exhibit A is a true and accurate copy of the Lease as currently in effect and that there exists no other agreement affecting Assignor's tenancy under the Lease.
(b) Assignor covenants that the Lease is in full effect and no default exists under the Lease, nor any acts or events which, with the passage of time or the giving of notice or both, could become defaults.

Section 4. Litigation Costs. If any litigation between Assignor and Assignee arises out of this Assignment or concerning the meaning or interpretation of this Assignment, the losing party shall pay the prevailing party's costs and expenses of this litigation, including, without limitation, reasonable attorney's fees.

Section 5. Indemnification. Assignor indemnifies Assignee from and against any loss, cost, or expense, including attorney's fees and court costs relating to the failure of Assignor to fulfill Assignor's obligations under the Lease, and accruing with respect to the period on or prior to the Docusign Envelope ID: D53EFC86-6EED-4746-8155-ADE78DC452ED

In Process
2 date of this Assignment. Assignee indemnifies Assignor from and against any loss, cost, or expense, including attorney's fees and court costs relating to the failure of Assignee to fulfill Assignee's obligations under the Lease, and accruing with respect to the period subsequent to the date of this Assignment.

Section 6. Successors and Assigns. This Assignment shall be binding on and inure to the benefit of the parties to it, their heirs, executors, administrators, successors in interest, and assigns.

Section 7. Governing Law. This Assignment shall be governed by and construed in accordance with California law.

Section 8. Counterparts. This Assignment may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same document.

Section 9. Independent Counsel. All parties acknowledge that they have been urged to seek independent tax and legal counsel with respect to the meaning and effect of this Assignment.

IN WITNESS WHEREOF, the parties have executed this Assignment as of the date first above written.

ASSIGNOR:

EXPOIMAGING, INC.,
a California corporation

By: __________
Name: Erik Sowder
Its: President and CEO

APPROVED AS TO FORM:

By:

Name: John Baker, Tenant Attorney

ASSIGNEE:

CENTRAL COAST ENERGY SERVICES, INC.,
a California Nonprofit Corporation

By: _________________
Name: Dennis Osmer
Its: CEO

Docusign Envelope ID: D53EFC86-6EED-4746-8155-ADE78DC452ED 5/12/2025 | 1:32 PM PDT
5/12/2025 | 1:31 PM PDT
5/12/2025 | 1:27 PM PDT

In Process
3 CONSENT OF CITY
The undersigned on behalf of City, as landlord under the Lease, consents to this Assignment of the Lease to Assignee, provided, however, that notwithstanding this Assignment and the undersigned’s consent to this Assignment, Assignor shall remain primarily obligated as Tenant under the Lease and the undersigned does not waive or relinquish any rights under the Lease against the Assignor or Assignee.
“City”

CITY OF WATSONILLE
A municipal corporation
__________________________
Tamara Vides, City Manager
ATTEST:
__________________________
Irwin I. Ortiz, City Clerk
APPROVED AS TO FORM:
__________________________
Samantha Zutler, City Attorney

Docusign Envelope ID: D53EFC86-6EED-4746-8155-ADE78DC452ED

In Process
4 EXHIBIT A

LEASE AGREEMENT
Docusign Envelope ID: D53EFC86-6EED-4746-8155-ADE78DC452ED

In Process
5 EXHIBIT B

LEGAL DESCRIPTION OF LEASEHOLD PROPERTY
Docusign Envelope ID: D53EFC86-6EED-4746-8155-ADE78DC452ED

LEASE BETWEEN LANDLORD CITY OF WATSONVILLE AND EXPOIMAGING, INC.

THIS LEASE, "Lease", is made and entered into to be effective the first day of October 2021, by and between the CITY OF WATSONVILLE, a municipal corporation, hereafter called "Landlord", and EXPOIMAGING, INC., a corporation, hereafter called "Tenant".

THE PARTIES AGREE AS FOLLOWS:

1. PREMISES.

Landlord does hereby rent and Tenant does hereby hire and take from Landlord that certain real property and improvements, commonly known and referred to as A portion of a building consisting of five thousand five hundred and sixty-four (5,564) square feet of office space and warehouse, more or less, at 121 Aviation Way, in the City of Watsonville, Santa Cruz County, California.

Ten (10) vehicle parking spaces as designated in Exhibit “A”.

The Premises are outlined in red and blue on Exhibit "A".

Tenant also has the right of ingress and egress to such Premises by using the driveway from Aviation Way.

2. TERM
INITIAL TERM.

The term of this Lease is four (4) years, commencing October 1, 2021, and shall expire automatically on September 30, 2025, hereafter "Lease Term",

3. RENT

WHERE PAID
Notwithstanding any other provision of this Lease, all rent shall be paid by check payable to the City of Watsonville, at the Finance Department by delivering or mailing to Finance Department, City of Watsonville, 250 Main Street, Watsonville, CA 95076.

The agreed monthly rent is $5,007.60 per month. (approximately $0.90 per square foot per month.) Tenant and Landlord agree to this rent without regard to whether per square foot rent is more or less than $0.90 or the area is different than as set forth in Section 1 above.

Rent shall be adjusted annually starting July 1, 2022, and each July 1st thereafter using the rate of April to April change in the Consumer Price Index (CPI) for All Urban Consumers San Francisco-Oakland-San Jose, California. In no event will the annual rent increase be more than five percent (5%) due to increases in the CPI.

If on any rental adjustment date there shall not exist a CPI in the same format as recited herein, the parties shall substitute the Consumer Price Index for all Urban DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

Consumers provided such index has been so revised or changed in such a way as to affect the direct comparability of such revised or changed index published by the Bureau of Labor Statistics or similar or successor governmental agency as may then be in existence and most nearly equivalent thereto (i.e.: the Wholesale Price Index) (CPI). If the parties are unable to agree on a successor index if the aforesaid index is no longer reporting, then the parties shall refer the choice of the successor index to arbitration in accordance with rules of the American Arbitration Association. Rent is due and shall be paid in advance on the 1st day of each and every month during the term of this Lease, commencing October 2021. Rent not received by the fifteenth (15th) of the month shall be assessed a ten percent (10%) late payment penalty.

UTILITIES AS ADDITIONAL RENT.

Tenant shall pay for all gas, heat, light, power, telephone service, garbage disposal, telecommunication services, cable, storm and sanitary sewer services, and all other services supplied to the Premises, except for potable water which is the Landlord’s responsibility, including installation and connection of such services from the main source thereof, including Landlord meters.

POSSESSORY INTEREST TAX.

Pursuant to Section 107.6 of the State Revenue and Taxation Code the Landlord hereby gives notice that the property interest to Tenant under this Lease may be subject to property taxation as a possessory interest and the Tenant acknowledges that it shall be subject to payment of property tax and shall pay said possessory use tax as additional rent if a possessory interest tax is levied on the property interest.

4. USE.

PERMITTED USE
The Premises shall be used for the commercial marketing design, manufacture and distribution of consumer products.

PROHIBITED USES.

The Premises shall not be used for any other purpose.

5. IMPROVEMENTS
ALTERATIONS AND ADDITIONS.

Except as otherwise provided by this Lease, Tenant shall not make any alterations or improvements to or erect any additional structures on the Premises without prior written consent of Landlord. Any alterations or additions approved by Landlord shall be constructed at the sole expense of Tenant.

PRIOR SUBMISSIONS
DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

If any improvements are proposed by the Tenant, Tenant shall submit a written description of the proposal to the Airport Manager together with two sketches drawn to scale. The Airport Manager will review the proposal and provide written comments with a recommendation and forward the same to the City Manager for review.

CONDITIONS OF CONSTRUCTION.

Before construction is commenced on the Premises, and before any building materials have been delivered to the Premises by Tenant or under Tenant's authority, Tenant shall satisfy to Landlord’s reasonable satisfaction all the following conditions or obtain Landlord's written waiver of the condition or conditions:
· Provide Landlord with four copies of plans and specifications and four (4) copies of site plan. Landlord shall not unreasonably disapprove preliminary plans and specifications.
· Notify Landlord of Tenant's intention to commence the work of improvement at least ten (10) days before commencement of any such work or delivery of any materials. Landlord shall have the right to post and maintain on the Premises any notices of non-responsibility provided for under applicable law. · Furnish Landlord with a true copy of Tenant's contract with the general contractor and with evidence of the general contractor's financial condition for Landlord's approval. The contact shall give Landlord the right but not the obligation to assume Tenant's obligations and rights under that contract if Tenant should default.
· Tenant shall comply with all applicable codes, ordinances, or regulations, and requirements for permits and approvals, including, but not limited to or restricted to a grading permit, building permit, zoning and planning requirements, and approvals from various governmental agencies and bodies having jurisdiction. · Tenant shall require from the contractor: (i) an endorsement or other evidence of coverage, as reasonably determined by Landlord, for "Builder's risk", (ii) evidence of Worker's Compensation Insurance covering all persons employed in connection with the work and with respect to whom death or bodily injury claims could be asserted against Landlord or the Premises, and (iii) evidence that contractor has paid or caused to be paid all premiums for the coverage described in this sub- paragraph and premiums sufficient to assure maintenance of all insurance during the anticipated course of the work.

NEW CONSTRUCTION COMPLETION DATE.

Once work has begun on one area, Tenant shall with reasonable diligence prosecute all construction of improvements for completion and ready for use; provided DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

however, that the time for completion shall be extended for as long as Tenant shall be prevented from completing the construction by delays beyond Tenant's control; but failure, regardless of cause to commence construction within two (2) months following issuance of a building permit, at Landlord's election exercised by ten (10) days written notice, shall terminate this Lease.

PROTECTION OF LANDLORD AGAINST COST OR CLAIM.

Tenant shall pay or cause to be paid the total cost and expense of all works of improvements, as that phrase is defined in the mechanic's lien law in effect at the place of construction when the work begins. No such payment shall be construed as rent. Tenant shall not suffer or permit to be enforced against the Premises or any part of it any mechanic's, designer’s, materiel man’s, contractor's, or sub-contractor's lien arising from any work of improvement, however it may arise. However, Tenant may in good faith and at Tenant's own expense contest the validity of any such asserted lien, claim, or demand, provided Tenant has furnished the bond required in California Civil Code Section 3 143.

Tenant shall defend and indemnify Landlord against all liability and loss of any type arising out of work performed on the Premises by Tenant, together with reasonable attorney's fees and all costs and expenses incurred by Landlord in negotiating, settling, defending, or otherwise protecting against such claims.

NOTICE OF COMPLETION.

On completion of the work of improvement, Tenant shall record or cause to be recorded a notice of completion. Tenant hereby appoints Landlord as Tenant's attorney in fact to record the notice of completion on Tenant's failure.

6. OWNERSHIP OF IMPROVEMENTS DURING TERM.

All buildings and improvements constructed on the Premises by Tenant as permitted or required by this Lease shall, during this Lease Term, be and remain the property of Tenant; provided, however, that Tenant shall have no right to waste, destroy, demolish or remove the improvements except as expressly provided in this Lease; and provided, further, that Tenant's rights and powers with respect to the improvements are subject to the terms and limitations of this Lease. Landlord and Tenant covenant for themselves, and all persons claiming under or through them, that the improvements are real property. All buildings and improvements existing on the Premises, as of the date of this Lease are Landlord's property, free of all claims to or against them by Tenant or any third person.

7. OWNERSHIP OF IMPROVEMENTS AT EXPIRATION.

Except as specified in the next section regarding Removal of Fixtures” of this Lease, all buildings and improvements placed or constructed on said Premises as part of said project, as well as any and all other alterations, additions, improvements, and fixtures, except furniture and trade fixtures, made or placed in or on said Premises by Tenant or any other person, shall be considered part of the real property of said Premises DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

and on expiration or sooner termination of this Lease, or the exercised option, shall remain on said Premises and become the property of Landlord free and clear of any liens or encumbrances whatsoever and without the payment of any consideration therefore.

8. REMOVAL OF FIXTURES.

At the normal expiration of the Lease Term, provided Tenant is not in default, Tenant shall have the right to remove any and all trade fixtures, provided all resultant damages to the Premises and remaining improvements, except for ordinary wear and tear, are completely remedied and Tenant complies with Landlord's reasonable requirements respecting the resultant appearance. Any such items not so removed within thirty (30) days of expiration shall become the property of Landlord free and clear of any liens or encumbrances whatsoever and without payment of consideration therefore.

9. NO SUBORDINATION.

Landlord shall not subordinate the fee title to the Premises to any security transaction to enable Tenant to obtain financing for the new improvements. The Premises are now and shall remain free and clear of any liens, encumbrances or other Tenant obligations to third person.

10. COMPLIANCE WITH RULES, REGULATIONS AND LAWS.

In the use and occupancy of the Premises and in the conduct of all business, activities and transactions thereon, Tenant will comply with all applicable laws, ordinances, rules, regulations and orders of the Landlord or any governmental subdivision, body or authority, including all federal, state and municipal laws and ordinances and all rules and regulations of the Federal Aviation Administration and the City of Watsonville Airport Ordinance in the Watsonville Municipal Code , Watsonville Airport Manager’s Regulations as they may be amended from time to time, and the Minimum Commercial Standards of the Watsonville Municipal Airport.

11. STORAGE OF MATERIALS, EQUIPMENT.

No materials, supplies, products, equipment or other personal property shall be stored or permitted to remain on any portion of the Premises outside of Landlord approved buildings or structures without Landlord's prior written consent. Tenant shall store personal property items, supplies, materials and combustibles inside the buildings in a safe, neat and sanitary manner. Tenant shall provide or cause to be provided adequate enclosures, screened areas and/or suitable covered metal receptacles within the Premises for the short-term accumulation and storage of solid waste, such as rubbish, trash, garbage, sludge, discarded machinery or parts and any other solid industrial wastes. Such enclosures and/or screened areas shall be designed in such a way as to prevent, odors, fumes, attraction of pests, and dispersal of wastes due to wind or water runoff, and shall be serviced regularly by qualified waste removal and disposal services.

DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

12. ENVIRONMENTAL CONSIDERATIONS.

NO WARRANTY OF CURRENT CONDITION.

Landlord makes no representation or warranty, express or implied, as to the physical condition of the Premises, including, but not limited to the condition of the exterior or interior of the structure, ground, soil, surface water or groundwater. the geology, the presence of known and unknown faults, the presence of any Hazardous Substance or other kinds of contamination or pollutants of any kind in the air, soil, groundwater or surface water, or the suitability of the Premises for the construction and use of the improvements thereon.
(a) Tenant shall not commit, or suffer to be committed, any waste upon the Premises, or any nuisance or other act or thing which may disturb the quiet enjoyment of the use of Watsonville Airport or surrounding property. Tenant shall ensure that no untreated waste from any type of operation will enter the airport storm drainage system, sewer or sanitary system.
(b) Tenant shall at all times comply with all applicable environmental laws, rules and regulations of federal, state or local governmental agencies, including, but not limited to, the City of Watsonville, Santa Cruz County, Regional Air and Water Quality Control Boards, the Environmental protection Agency, and any other agency with jurisdiction. Tenant shall not permit any activity which directly or indirectly produces objectionable or unlawful amounts or levels of air pollution (gases, particulate matter, odors, fumes, smoke, or dust), water pollution, noise, glare, heat emissions, electronic or radio interference with navigational and communication facilities for the operation of the Airport and for its use by aircraft, trash or refuse accumulation, vibration, prop-wash, or jet blast, or which is hazardous or dangerous by reason or risk of explosion, fire or harmful emission. Any waste oil storage tanks shall be in approved containers and in accordance with all environmental and fire protection regulations. (c) Hazardous Substance. The term "Hazardous Substance" shall mean any toxic substance, hazardous substance, Hazardous Substance, or hazardous waste, pollutant or contaminant which is or during the term of this Lease becomes regulated by any local governmental authority, the State of California, or the United States government, including, but not limited to any, material or substance which is defined as a "hazardous waste," "extremely hazardous waste" or "restricted hazardous waste" under local, State, or federal law and as determined by the Fire Department. Except in strict compliance with all government approvals, applicable laws and regulations pertaining to Hazardous Substance, and in accordance with the provisions of this Lease, Tenant shall not cause or permit the presence, use, handling, generation, emission, release, discharge, storage, or disposal of any Hazardous Substance on, under, in or about the Premises, excepting the presence of any Hazardous Substance on, under, in or about the Premises as of the date of this Lease or the migration to or seepage of Hazardous Substance from surrounding or adjacent property; and shall not cause or permit the transportation of any DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

13. HAZARDOUS SUBSTANCE TO, FROM OR ON THE PREMISES.
(a) Tenant shall at all times notify Landlord of any Hazardous Substance present, used, generated, handled, emitted, released, discharged, stored or disposed of on or from the Premises. Notwithstanding the foregoing, notice shall not be required for Hazardous Substance present on the Premises in reasonable quantities which are commonly used in machining facilities including, but not limited to, cleaning materials, motor oils, and hydraulic fluids provided such Hazardous Substance are used and disposed of in accordance with law, or for materials which are first designated as Hazardous Substance after expiration of the term of this Lease. Tenant shall also institute operating procedures designed to handle Hazardous Substance consistent with prudent industry practice, including evidence of a licensed agent removal service. Landlord shall have the right to inspect the Premises on 24-hours prior notice for compliance with the provisions of this Section.

INDEMNIFICATION BY LANDLORD.

Landlord shall indemnify, protect, defend, and hold harmless Tenant and Tenant's successors and assigns, officers, directors, employees, agents, subtenants and assignees, from and against all liability, and foreseeable consequential damages, penalties, expenses and costs of any required or necessary remediation, repair, removal, clean up or detoxification, of the Premises and surrounding properties, and from and against the preparation of any clean up, remediation, closure or other required plans, whether such action is required or necessary during or following the term of this Lease, to the full extent that the same is attributable to the use, handling, generation, emission, release, storage, discharge or disposal of a Hazardous Substance by Landlord, its agents, employees, and contractors.

INDEMNIFICATION BY TENANT.

Tenant shall indemnify, protect, defend, and hold harmless Landlord and Landlord's successors and assigns, officers, directors, employees, agents, subtenants and assignees, from and against all liability, and foreseeable consequential damages, penalties, expenses and costs of any required or necessary remediation, repair, removal, clean up or detoxification, of the Premises and surrounding properties, and from and against the preparation of any clean up, remediation, closure or other required plans, whether such action is required or necessary during or following the term of this Lease, to the full extent that the same is attributable to the use, handling, generation, emission, release, storage, discharge or disposal of Hazardous Substance by Tenant, its agents, employees, and contractors.

INDEMNIFICATION SURVIVES LEASE.

The indemnification provisions of the foregoing shall survive the termination or expiration of this Lease.

DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

14. REPAIR AND MAINTENANCE OF PREMISES.

Landlord shall repair and maintain the exterior of the office and hangar building, including exterior walls and roof, heating and air conditioning, electrical systems (excluding interior lights and fixtures) except if repairs or replacements are necessary thereto because of negligence, neglect or misconduct of the Tenant or if Tenant fails to notify Landlord in writing within three (3) days of the need to repair.

Tenant shall maintain the interior of the hangar and office building, including, but not limited to, interior plumbing fixtures (including responsibilities for sanitary sewer obstructions), interior walls, doors, hardware, alarms, internal lights and fixtures, etc., in as good order, condition and repair as they shall be upon the commencement of the term of this Lease and any extended term. Any addition to the electrical system installed by Tenant shall remain the responsibility of the Tenant. Tenant shall keep drainage ditches and gutters free of debris.

15. FREEDOM FROM LIENS.

Tenant shall not create or permit to be created or to remain, and covenants to remove and discharge promptly, at its cost and expense, all liens, claims, stop notices, encumbrances and charges upon the Premises, or Tenant's leasehold interest therein which arise out of the use or occupancy of the Premises by Tenant or anyone using or occupying the Premises with the consent or sufferance of Tenant, or by reason of labor or materials furnished or claimed to have been furnished to Tenant for any construction, alteration, addition or repair of any part of the Premises. Tenant shall give Landlord fifteen (15) days notice prior to commencing any work on the Premises, so that Landlord shall have a reasonable time within which to post notices of non-responsibility.

16. HOLDING OVER.

If Tenant shall hold possession of the Premises after the term of this Lease, Tenant shall become a Tenant from month to month at the rental and upon the terms herein specified and shall continue to be such tenant until the tenancy shall be terminated by Landlord on thirty (30) days notice or until Tenant shall have given at least thirty (30) days notice of Tenant's intention to terminate the tenancy. The provisions of this Lease, so far as applicable, shall govern such tenancy, except that the monthly rent for such tenancy shall be the same as the last full month's rental rate.

17. ABANDONMENT.

Tenant shall not vacate or abandon the Premises at any time during the term thereof; if Tenant shall abandon, vacate or surrender the Premises or be dispossessed by process of law, or otherwise, any personal property belonging to Tenant and left on the Premises shall be deemed to be abandoned and at the option of Landlord shall become Landlord's property free from all claims of Tenant. If Tenant abandons the Premises Landlord shall have the option to terminate this Lease by giving Tenant notice of belief DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

of abandonment pursuant to California Civil Code Section 195 1.3 or Landlord has the remedy described in California Civil Code Section 1951.4, i.e., Landlord may continue the Lease after breach and abandonment and recover rent as it becomes due, if Tenant has the right to sublet or assign, subject to reasonable limitations as provided in the previous section regarding holding over..

18. ASSIGNMENT OR SUBLETTING.

Tenant shall not assign or encumber any interest in this Lease or in the Premises, or sublease all or any part of the Premises, or allow any other person or entity (except Tenant's authorized representatives) to occupy or use all or any part of the Premises, without Landlord's prior written consent, and consent to one assignment or sublease shall not be construed as consent to any subsequent assignment or subleasing.

If Tenant is a corporation or partnership, any dissolution, merger, consolidation or other reorganization of Tenant or the sale or transfer of controlling percentage of the capital stock of Tenant or the sale of twenty five percent (25%) of the value of the assets of Tenant shall be deemed a voluntary assignment. The phrase "controlling percentage" means the ownership of and the right to vote stock possessing at least twenty five percent (25%) of the total combined voting power of all classes of Tenant's capital stock issued outstanding and entitled to vote for the election of directors. Landlord shall not unreasonably withhold consent, but Landlord may nevertheless condition consent upon such factors as the identity, reputation, financial worth and stability and operating ability of any proposed assignee or subtenant. Unless prior written consent of Landlord shall have been obtained, any transfer, or attempted assignment or transfer, of this Lease or any interest therein, or any subletting, either by voluntary or involuntary act of Tenant or by operation of law or otherwise, shall at the option of the Landlord terminate this Lease, and any such purported assignment, transfer or subletting without such consent shall be null and void.
(e) Tenant shall pay Landlord at the time the request to assign is submitted, a deposit of Two Thousand Five Hundred Dollars ($2,500.00) to offset Landlord's expenses, including attorney's fee, in evaluating and documenting the assignment.

Landlord shall charge said deposit at the then current hourly rate for staff time charged to the Airport. Any balance of said deposit shall be refunded to Tenant, and any excess amount charged, excluding said deposit, shall be paid by Tenant. (2) Landlord and Tenant hereby deem it reasonable for the Landlord to refuse to consent to a proposed assignment in the following circumstances:
(a) Landlord may object to any proposed assignment if, in the Landlord's sole opinion, the proposed assignee is not a qualified assignee in terms of financial strength, business experience or reputation or the ability to operate the fixed base operation and provide the required services in a manner consistent with the purposes for which this Lease was granted.
(b) Landlord may object on any other reasonable grounds.

DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

The effective date of the assignment shall not occur until sixty (60) days after the Tenant's notice of the proposed assignment unless, within that time, Landlord gives notice of a valid objection or refusal of consent as set forth in subsection A. (3) hereof. If Landlord gives notice of a valid objection and withholds consent, the Lease will not be assigned.

19. TRANSFER PREMIUM PAYMENT
TRANSFER PREMIUM PAYMENT OBLIGATION.

As a reasonable condition to Landlord’s consent to any Transfer, Tenant shall pay to Landlord seventy-five percent (75%) of any Transfer Premium, as defined below.

DEFINITION OF “TRANSFER PREMIUM.”
“Transfer Premium” means all base rent, additional rent, and other consideration payable by Transferee to Tenant (including key money and bonus money and any payment in excess of fair market value for services rendered by Tenant to Transferee or assets, fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee in connection with the Transfer (Transferee Rent)), after deducting the Rent payable by Tenant under this Lease (excluding the Transfer Premium) for the Subject Space (Tenant Rent).

If part of the Transfer Premium is payable by Transferee other than in cash, Landlord’s share of that noncash consideration shall be in a form reasonably satisfactory to Landlord.

DEFINITION OF “TRANSFER PREMIUM.”
“Transfer Premium” means all Rent and other consideration actually received by Tenant from Transferee (including key money and bonus money and any payment in excess of fair market value for services rendered by Tenant to Transferee or assets, fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee in connection with the Transfer (Transferee Rent)), after deducting:
(a) The Rent payable by Tenant under this Lease (excluding the Transfer Premium) for the Subject Space (Tenant Rent);
(b) Reasonable leasing commissions paid by Tenant;
(c) Other reasonable out–of–pocket costs paid by Tenant (including attorney fees, advertising costs, and expenses of readying the Subject Space for occupancy by Transferee);
(d) Any consideration paid to Transferee or any third party to induce Transferee to consummate the Transfer; and
(e) Rent up to a maximum of _ _[insert dollar amount]_ _ paid to Landlord by Tenant after the later of (1) Tenant’s vacating the Subject Space and giving Landlord notice of it and (2) Tenant’s engaging a reputable broker to market the Subject Space for DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

sublease or assignment.

The costs referred to in subparagraphs (b)-(e) are referred to as the “Transfer Costs.”
AUDIT OF TRANSFER PREMIUM.

Tenant shall allow Landlord to review and audit Tenant’s books and records for the purpose of verifying Tenant’s calculation of the Transfer Premium. At landlord’s option, On Landlord’s request, Tenant shall furnish a complete statement, certified by an independent certified public accountant or Tenant’s chief financial officer, describing in detail the computation of any Transfer Premium that Tenant has derived or will derive from the Transfer. If an independent certified public accountant selected by Landlord and Tenant finds that the Transfer Premium for any Transfer has been understated by more than ten percent (10%), Tenant shall, within thirty (30) days after demand, pay the deficiency and Landlord’s reasonable costs of that audit.

Subtenant Rent
Landlord shall not be entitled to receive from any person any rent for any portion of the Premises which exceeds the rent charged by Landlord for the same or similar area of the Premises, the purpose hereof is that Tenant shall not receive rent for any portion of the Premises which exceeds the rent Landlord charges tenant for the Premises. Tenant shall instead turn over any such rent to Landlord as additional rent.

20. LANDLORD’S RECAPTURE RIGHT.

RIGHT OF RECAPTURE
Despite any other provision of this Lease, Tenant shall notify Landlord in writing (Availability Notice) if Tenant wishes to transfer the Premises or any portion thereof (Subject Space). If Tenant does not give Landlord the Availability Notice before delivering a Transfer Notice, the Transfer Notice shall also be the Availability Notice.

Landlord has the option, by written notice to Tenant (Recapture Notice) within thirty (30) days after receiving any Availability Notice, to recapture the Subject Space as described in the next section. A timely Recapture Notice terminates this Lease as to the Subject Space and Tenant’s obligations regarding the remaining term of this Lease (or, at Landlord’s election, for a shorter period specified in the Availability Notice as the term of the Transfer) and as of the date specified in the Availability Notice. The Recapture Notice shall be void, however, if Tenant notifies Landlord, within thirty (30) days after receipt of the Recapture Notice, that Tenant withdraws the Availability Notice or Transfer Notice. If Landlord declines or fails timely to elect to recapture the Subject Space, Landlord shall have no further right under this section to the Subject Space unless it becomes available again after Transfer by Tenant.

CONSEQUENCES OF RECAPTURE.

To determine the new Base Rent under this Lease if Landlord recaptures the Subject Space, the original Base Rent under the Lease shall be multiplied by a fraction, DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

the numerator of which is the Rentable Square Feet of the Premises retained by Tenant after Landlord’s recapture and the denominator of which is the total Rentable Square Feet of the Premises before Landlord’s recapture. The Additional Rent, to the extent that it is calculated on the basis of the Rentable Square Feet within the Premises, shall be reduced to reflect Tenant’s proportionate share based on the Rentable Square Feet of the Premises retained by Tenant after Landlord’s recapture. This Lease as so amended shall continue thereafter in full force and effect for the remaining Premises only. Either party may require written confirmation of the amendments to this Lease necessitated by Landlord’s recapture of the Subject Space. If Landlord recaptures the Subject Space, Landlord shall, at Landlord’s sole expense, construct any partitions required to segregate the Subject Space from the space retained by Tenant. Tenant shall, however, pay for painting, covering, or otherwise decorating the surfaces of the partitions facing the remaining Premises retained by Tenant.

If Landlord recaptures the Subject Space, Landlord shall pay Tenant ten percent (10%) of any Transfer Premium received by Landlord.

21. RIGHT TO COLLECT RENT.

If this Lease is assigned, Landlord may collect Rent directly from Transferee. If all or part of the Premises is subleased and Tenant defaults, Landlord may collect Rent directly from Transferee. Landlord may then apply the amount collected from Transferee to Tenant’s monetary obligations under this Lease. Collecting Rent from a Transferee or applying that Rent to Tenant’s monetary obligations does not waive any other provision of this Lease.

22. SIGNS, POSTERS, BUILDINGS AND TOWERS.

No advertising signs, posters or similar devices shall be erected, displayed or maintained in, on, about or above the Premises or the structures thereon without a sign permit and the written approval of the Airport Manager.

No structures erected on the Premises shall exceed the height limit fixed by any Landlord zoning ordinance or regulations of the Airport or Federal Aviation Administration. Tenant in its operations shall not unreasonably interfere with the property, interests, operations or activities of the Landlord or of other tenants of the Landlord.

23. TAXES.

Tenant will pay all fees, taxes, assessments and licenses levied, imposed or required by any governmental subdivision, body or authority on or in respect to any improvements or property placed on the Premises by Tenant or any person with its permission
(a) Any business, activity or transaction conducted thereon by Tenant; DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

(b) Landlord license and permits; and
(c) Commercial Operator Permit fee.

24. WAIVER OF DAMAGES AND INDEMNIFICATION.

Landlord shall not be liable to Tenant for any injury or damage that may result to any person or property by or from any cause whatsoever, except as results from affirmative conduct which is the sole negligence on the part of Landlord, its agents, servants, employees or invitees. Without limiting the generality of the foregoing waiver, it is expressly extended to injury or damage caused by water leakage of any character from the roof(s), wall(s), basement or any part of the property, or caused by gas, oil, or any other cause in or about the Premises or the building(s). Tenant agrees to hold Landlord harmless from, and to defend and indemnify Landlord against, any and all claims or liability for any death of for injury to any person or damage to any property, whatsoever, occurring in, on or about the Premises.

25. WAIVER OF CERTAIN DAMAGES
In the event of any actual or alleged failure, breach or default hereunder by either party, the other shall have no right to seek from the other any indirect, consequential or special damages, and each of the undersigned hereby waives all and any rights it may have to obtain from the other any indirect, consequential or special damages. Each party’s above-stated waiver is a material inducement for each party’s entering into this Agreement.

26. THIRD PARTY BENEFICIARIES/PARTIES IN INTEREST.

This Lease has been made and is made solely for the benefit of Landlord and Tenant and their respective successors and permitted assigns. Nothing in this Lease is intended to confer any rights or remedies under or by reason of this Lease on any persons other than the parties to it and their respective successors and permitted assigns. Nothing in this Lease is intended to relieve or discharge the obligation or liability of any third persons to any party to this Lease

27. WAIVER BY ACCEPTING VARIED PERFORMANCE.

No waiver of any provision or consent to any action shall constitute a waiver of any other provision or consent to any other action, whether or not similar. No waiver of consent shall constitute a continuing waiver of consent or commit a party to provide a waiver in the future except to the extent specifically set forth in writing. Any waiver given by a party shall be null and void if the party requesting such waiver has not provided a full and complete disclosure of all material facts relevant to the waiver requested.

DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

28. SECURITY DEPOSIT.

On execution of this Lease, Tenant shall deposit the sum of one (1) month rent in cash as security for the faithful performance of the terms, covenants and conditions of this Lease.

If Tenant is in default, Landlord can use the security deposit or any portion of it, to cure the default or to compensate Landlord for any and all damages or loss sustained by Landlord resulting from Tenant's default if the notice requirements, if applicable, have been observed. Tenant shall immediately, on demand, pay to Landlord a sum equal to the portion of the security deposit expended or applied by Landlord as provided in this paragraph so as to maintain the security deposit in the sum initially deposited. Upon final accounting by Landlord, any balance of said deposit shall be refunded to Tenant.

29. HOLD HARMLESS.
(a) Tenant shall save, protect, indemnify, and hold harmless Landlord, its elective and appointive boards, commissions, officers, agents, and employees from any and all claims, cost or liability of any kind allegedly suffered, incurred or threatened, including personal injury, death, property damage, inverse condemnation, or any combination of these, foreseeable or unforeseeable, arising directly or indirectly from or connected with any acts performed pursuant to this Lease, or any omission to perform, including, but not limited to, claims, costs or liability resulting from: (I) The conduct, negligent or otherwise, of Tenant, its subtenant(s), assignee(s), or any officer(s), agent(s) or employee(s) of one or more of them; (2) The joint conduct of the Landlord and Tenant, regardless of whether the Landlord is concurrently, active or passively negligent or not negligent at all; or (3) The sole concurrent conduct of any other person or entity.

The above promise and agreement in this section is not conditioned or dependent on whether Tenant or Landlord has prepared, supplied or approved any plan(s) or specification(s) in connection with this Lease, or has insurance or other indemnification covering any of these matters, or that the alleged damage resulted partly from any negligent or willful misconduct of Landlord.
(b) Non-Liability of Landlord for Damages. This Lease is made upon the express condition that Landlord is to be free from all liability and claim for damages by reason of any injury to any person or persons including, Tenant, or property of any kind whatsoever and to whomsoever belonging, including Tenant, from any cause or causes whatsoever while in, upon, or in any way connected with the Premises during the term of this Lease or any extension hereof or any occupancy hereunder, Tenant hereby covenanting and agreeing to indemnify and save harmless Landlord from all liability, loss, cost, attorney’s fees, and obligations on account of or arising out of any such injuries or losses however occurring.

30. BREACH.

After service of ten (10) days written notice thereof by Landlord on Tenant any DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

one of the following shall constitute a breach of this Lease by Tenant (a) The appointment a general assignment by Tenant for the benefit of creditors, or of a Receiver to take possession of all or substantially all of the assets of Tenant, or (b) Period of twenty (20) days, or
(c) A default in the performance of any other covenant or condition of this Lease on the part of Tenant to be performed for a period of twenty (20) days

31. INSURANCE.
(a) During the rental term, Tenant, at Tenant's sole expense, shall secure and maintain in force such policies of insurance as will protect it from claims for damages or injury resulting from bodily injury, including death, and for the loss or damage to property of others which may arise from operations of this Lease. Such insurance shall contain statements that:
(b) These policies shall also apply to Landlord, as an Additional Named Insured; (ii) the insurance afforded by these policies applies severally as to each insured, except that the inclusion of more than one insured shall not operate to increase the limit of the company's liability, and the inclusion hereunder of any person or organization as an insured shall not affect any right which such person or organization would have as a claimant if not so included; (iii) the insurance shall be primary insurance over any other insurance carried by Landlord, which other insurance shall be considered excess only; (iv) the above policies specifically include coverage indemnifying Landlord as set forth in this Lease; (v) the policies may not be canceled, nor the coverage reduced until thirty (30) days after a written notice of such cancellation or reduction in coverage is delivered to Landlord at the address contained herein; (vi) the insurance companies named herein waive any all rights of subrogation against Landlord. Such liability insurance shall be written with limits of at least Two Million Dollars ($2,000,000.00), combined single limits, and shall be written by companies acceptable to Landlord. The limit of liability insurance coverage shall be adjusted commensurate with inflation and other liability factors upon adoption of resolution of the Landlord Council of Landlord. Certificates of Insurance evidencing the above obligations shall be delivered to Landlord on prior commencement of operations covered by this agreement.
(c) Landlord, at Tenant's cost, shall cooperate fully with Tenant to maximize any recovery following an insured casualty. All policies of fire and extended coverage or other casualty insurance required by subparagraphs (e) and (g) below shall provide that proceeds there under shall be paid to Landlord and Tenant as their interests may appear. (d) All policies required to be maintained by Tenant pursuant to the terms of this Lease shall be issued by companies authorized to do business in the State of California with a financial rating of at least "A" in the most recent edition of Best Insurance Reports. Tenant shall pay premiums therefore and shall deliver annually to Landlord Certificates of Insurance that such policies are in effect. If Tenant fails or DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

refuses to procure or maintain the insurance coverage required hereunder, or fails or refuses to furnish Landlord with proof that coverage has been procured and is in full force and paid for, Landlord shall have the right, at Landlord's election and without notice to Tenant, but without any obligation to do so, to procure and maintain such coverage. Tenant shall reimburse Landlord on demand for any premiums Landlord so pays in connection with such procurement.
(e) Fire Insurance: During the Lease Term, Tenant, at Tenant's sole expense, shall insure for fire and extended coverage risks all buildings, personal property, improvements, and alterations in, on, or about the Premises. Such insurance shall be in an amount not less than eighty percent (80%) of insurable, full replacement cost of such buildings and improvements, and shall include vandalism and malicious mischief endorsements. Said fire insurance policies shall contain loss payable endorsements in favor of the parties as their respective interests may appear hereunder. Landlord shall be named as additional insured in such policy or policies. (f) Fire or Casualty:
(1) Destruction of Tenant Owned Building. In the event of extensive damage (greater than fifty percent (50%)) to or destruction of buildings or other improvements on the Premises owned by Tenant as provided in Section 11 of this Lease ("Tenant Improvements"), Tenant shall determine whether to repair or replace the Tenant Improvements. If it is determined to repair or replace the Tenant Improvements, the proceeds of any insurance policy paid on account of such damage or destruction shall be used to defer the cost of repairing or replacing the Tenant Improvements. Tenant shall complete all repairs within a reasonable time. If it is determined not to repair or replace the Tenant Improvements, Tenant may terminate this Lease upon written notice to Landlord within thirty (30) days of such damage or destruction. If Tenant terminates this Lease pursuant hereto, after deducting any proceeds payable to Tenant's lender pursuant to the following paragraph, the remaining proceeds of any insurance policy paid on account of such damage or destruction shall be distributed to Landlord and Tenant pursuant to the following formula: Landlord's share shall be the product of the amount of the remaining proceeds multiplied by a fraction, the numerator which is the number of months since the commencement date of this Lease until the date of the casualty causing such damage or destruction, and the denominator of which is four hundred and twenty (420). Tenant's share shall be the excess of the remaining proceeds after subtracting the Landlord's share. In the event of termination of the Lease pursuant to this Section 33 (e) (l), Tenant shall remove the Tenant Improvements and, restore the Landlord owned building to its prior condition at Tenant's sole cost and expense prior to the date of termination of the Lease.

All fire and extended coverage insurance policies insuring the Tenant Improvements may have a loss payable clause in favor of any lender of DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

Tenant, including, but not limited to, any mortgagee of Tenant, as such lender's interest may appear.
(2) Destruction of Landlord Owned Premises. If during the term of this Lease the Landlord owned Premises, as provided in Section 11 of this Lease, shall be damaged or destroyed to the extent of fifty percent (50%) of its valuation or at a repair cost estimated by the Landlord Building Official to exceed the sum of Twenty Five Thousand Dollars ($25,000.00) by fire, the elements, or any other cause, then this Lease shall, at Landlord's option, cease and become null and void from the date of such damage, or destruction, and Tenant shall immediately surrender the entire Premises to Landlord and shall pay rent only to the time of such surrender.

If the Landlord owned Premises shall be damaged by fire, or other cause, so as to be capable of being repaired within a reasonable time, Landlord shall have the option to repair the same and during the time that the repairs are being made, Landlord shall remit to Tenant a just and fair portion of the rent according to the nature of the damage sustained and according to the extent that Tenant is deprived of the use of the Landlord owned Premises. Should the estimated time to repair damage exceed one hundred twenty (120) days, the Tenant may, at his option, terminate, this Lease. In such event both parties shall be released from further obligations under the terms of this Lease. (g) Workers' Compensation: Tenant, at Tenant's sole expense, must obtain and maintain workers' compensation insurance covering all its employees, and said insurance must be kept in force during the entire term of this Lease. (h) Notice: Each party hereto shall give to the other prompt and timely notice of any claim made or suit instituted coming to its knowledge which in any way directly, contingently or otherwise, affects or might affect either, and both shall have the right to participate in the defense of the same to the extent of its own interest.

32. LITIGATION EXPENSES.

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

DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

33. SURRENDER OF PREMISES.

Tenant agrees to surrender the Premises and any addition thereto at the termination of the tenancy herein created in the same condition as the Premises were in at the beginning of the tenancy or at the time of completion of the improvements as the case may be, reasonable use and wear thereof and damage by act of God or the elements excepted. The voluntary or other surrender of this Lease by Tenant or a mutual cancellation thereof shall not work a merger, and shall, at the option of Landlord, terminate all or any existing subleases or subtenancies, or may, at the option of Landlord, operate an assignment to Landlord of any or all such sublease or subtenancies.

34. WAIVER.

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

35. QUIET ENJOYMENT.

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

36. NOTICES.

All notices, consents, waivers or other communications which this Lease requires or permits either party to give to the other shall be in writing and shall be served personally or delivered by registered or certified mail, return receipt requested, made upon or addressed to the respective parties as follows:

To Landlord: To Tenant:

City Clerk
City of Watsonville
275 Main Street, Suite 400
Watsonville, CA 95076
ExpoImaging, Inc.
121 Aviation Way
Watsonville, CA 95076
or such other address as may be contained in a notice from either party to the DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

other given pursuant to this section. Notice of registered or certified mail shall be deemed to be given forty- eight (48) hours from the time of postmarking if mailed within the United States (excluding Alaska).

37. RECORDATION.

Neither party, without the consent of the other, shall cause or permit the original nor any copy of this Lease to be recorded, filed or published in any public place.

38. TENANT TO ASSUME ALL UNKNOWN EXPENSES.

Notwithstanding the existence of a provision therefore in this Lease, Tenant shall assume, pay and be obligated for any and all costs and expenses toward the operation, protection, maintenance of the Premises, known or unknown, expressed or unexpressed, it being the intention of the parties for this to be a triple net lease to Landlord.

39. RIGHT OF LANDLORD TO INSPECTION.

Landlord shall have the right to enter upon the Premises at all reasonable times during the term of this Lease for the purpose of making any inspection it may deem expedient to the proper enforcement of this Lease.

Tenant shall furnish Landlord a copy of any lease of any subtenant, any amended lease and any amendment to any lease and shall furnish Landlord upon request with all evidence of rent or other compensation paid by any and all sub-tenant for use or occupation of all or any part of the Premises.

40. NONDISCRIMINATION
Tenant hereby covenants that Tenant in its use of the Premises and any and all structures, buildings and improvements located here on shall conduct the fixed base operation or any other activity hereafter authorized by the Landlord on the Premises on a non-exclusive and non-discriminatory basis in all respects with regard to any person, firm or group of persons. Tenant shall not act in any manner prohibited by Part 15 of the Federal Aviation Regulations and further agrees to be nondiscriminatory also with respect to price or cost of services or goods and in every other fashion.

41. ENFORCEMENT OF NONDISCRIMINATION CLAUSE.

Landlord shall have the right to take such action against the Tenant as the United States Government may direct or request to enforce the terms of the preceding paragraph on behalf of the United States Government or on behalf of any of its citizens or the Landlord itself.

DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

42. OTHER OPERATIONS.

It is understood that the use authorized at the Watsonville Municipal Airport by this Lease is not given to Tenant exclusively but may be given to any other Tenant at the Airport at the sole discretion of the Landlord.

43. CONDEMNATION.

If the whole or any substantial part of the Premises shall be taken by any paramount public authority under the power of eminent domain then the term of this Lease shall cease as to the part so taken from the date the possession of that part shall be taken for any public purpose, and from that day Tenant shall have the right either to cancel this Lease or to continue in the possession of the remainder of the Premises under the term herein provided, except that the square foot rental shall be reduced in proportion to the amount of the Premises taken. Damages awarded for such taking shall be apportioned between the Landlord and Tenant in a ratio relating to the number of years expired and remaining in the Lease Term between Landlord and Tenant respectively; provided, however, that Landlord shall not be entitled to any portion of the award made for loss of business installation or improvements belonging to Tenant.

44. NONDISCRIMINATION- (FAA, MBE, DB REQUIREMENTS).

The Tenant, for itself, its heirs, personal representatives, successors in interest, and assigns, as a part of the consideration for this Lease, does hereby covenant and agree as a covenant running with the land that if facilities are constructed, maintained, or otherwise operated on the Premises for a purpose for which a Department of Transportation (DOT) program or activity is extended or for another purpose involving the provision of similar services or benefits, the Tenant shall maintain and operate such facilities and services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal Regulations, DOT, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally- Assisted Programs of the Department of TransportationEffectuation of Title VI of the Civil Rights Act of 1964, and as such Regulations may be amended.

The Tenant for itself, its personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby further covenant and agree as a covenant running with the land that: (a) no person on the grounds of race, color or national origin shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of facilities; (b) that in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subject to discrimination; (c) that the Tenant shall use the with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 2 1, Nondiscrimination in Federally-Assisted Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and as such DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

Regulations may be amended.

Tenant shall furnish its accommodations and/or services on a fair, equal and not unjustly discriminatory basis to all users thereof and it shall charge fair, reasonable and not unjustly discriminatory prices for each unit or service; PROVIDED, THAT the Tenant may be allowed to make reasonable and nondiscriminatory discounts, rebates or other similar type of price reductions to volume purchasers.

Tenant shall insert the provisions of this section in any lease agreement or contract by which Tenant grants a right of privilege to any person, firm or corporation to render accommodations and/or services to the public on the Premises.

45. REMEDY FOR DISCRIMINATION.

In the event of breach of any of the nondiscrimination covenants identified in Paragraph 44, Landlord shall have the right to terminate this Lease and to reenter and repossess the Premises and the facilities thereon, and hold the same as if this Lease had never been made or issued. The provision does not become effective until the procedures of 49 CFR Part 21 are followed and completed including expiration of appeal rights.

Non-compliance with paragraph 44 shall constitute a material breach thereof and in the event of such non-compliance Landlord shall have the right to terminate this Lease and the estate hereby created without liability therefore or at the election of the Landlord or the United States either or both Governments shall have the right to judicially enforce paragraph 48.

46. AFFIRMATIVE ACTION.

Tenant assures that it will undertake an affirmative action program as required by 14 CFR Part 152, Subpart E, to insure that no personal shall be on the grounds of race, creed, color, national origin, or sex be excluded from participating in any employment activities covered in 14 CFR, Subpart E. Tenant assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by such subpart. Tenant assures that it will require that it’s covered by such subpart. Tenant assures that it will require that its covered suborganizations provide assurances to the Tenant that they similarly will undertake affirmative action programs and that they will require assurances from their suborganizations, as provided by 14 CFR Part 152, subpart 2, to the same effect.

47. SUBORDINATION TO FUTURE FAA AGREEMENTS.

This Lease shall subordinate to the provisions and requirements of any existing or future agreement between the Landlord and the United States, relative to the development, operation or maintenance of the Airport.

DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

48. NOTICE TO FEDERAL AVIATION ADMINISTRATION.

Tenant shall comply with the notification and review requirements covered in Part 77 of the Federal Aviation Regulations in the event of future construction of a building planned for the Premises, or in the event of any planned modification or alteration of any present or future building or structure situated on the Premises.

49. NON-EXCLUSIVE RIGHT.

It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right within the meaning of Section 308 of the Federal Aviation Act.

50. TERMS AND COVENANTS.

All the provisions of this Lease shall be deemed and construed to be "covenants" as though the words imported such covenants were used in each separate paragraph hereof, except when expressed as conditions.

51. GOVERNING LAW.

This Lease shall be construed and enforced in accordance with the laws of the State of California.

52. BINDING EFFECT.

This Lease and the covenants and agreements herein contained shall bind and inure to the benefit of the parties hereof, their heirs, successors, executors, administrators, and when permitted assigns.

53. TIME IS OF THE ESSENCE.

Time is of the essence regarding this Lease.

54. CONSENT.

Whenever consent or approval of either party is required, that part shall not unreasonably withhold such consent or approval.

55. CORPORATE STATUS.

If either party is a corporation, that party shall deliver to the other party on execution of this Lease, a certified copy of a resolution of its governing body authorizing the execution of this Lease and naming the officers that are authorized to execute this DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Lease between ExpoImaging, Inc. and City of Watsonville

Lease on behalf of the corporation.

56. BROKERS.

Each party represents that it has not had dealings with any real estate broker, finder, or other party, with respect to this Lease in any manner. Each party shall hold harmless the other party from all damages resulting from any claims that may be asserted against the other party by any broker, finder, or other person, with whom the other party has or purportedly has dealt.

57. JURY TRIAL WAIVERS.

To the fullest extent permitted by law, and as separately bargained-for-consideration, each party hereby waives any right to trial by jury in any action, suit, proceeding, or counterclaim of any kind arising out of or relating to this Agreement. Each party hereby expressly acknowledges the inclusion of this jury trial waiver through the execution by its duly authorized representative.

58. EXHIBITS.

All exhibits referred to are attached to this Lease and incorporated by reference.

59. INTERPRETATION
The terms of this Lease have been negotiated by the parties hereto and the language used in this Lease shall be deemed to be the language chosen by the parties hereto to express their mutual intent. This Lease shall be construed without regard to any presumption or rule requiring construction against the party causing such instrument or any portion thereof to be drafted, or in favor of the party receiving a particular benefit under the lease. No rule of strict construction will be applied against any person.

60. ENTIRE AGREEMENT.

This Lease contains the entire agreement of the parties, and by signing this Lease they agree that there is no other written or oral agreement, promise, or representation between them respecting the Premises. This Lease shall bind and inure to the benefit and advantage of the assigns of Landlord, and of the heirs, executors, administrators, and when permitted hereunder the assigns of Tenant.

DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D 10/1/2021 | 4:48 PM PDT
10/5/2021 | 8:37 AM PDT
10/6/2021 | 10:07 AM PDT
Lease b twe~n Expolmaging, Inc. and City of Watsonville

IN WI ESS WHEREOF,
above wr
the parties hereto have executed this Lease the day and year first tten.
"Landlo d"
CITY O WATSONVILLE a municipal
corporati1n I
r-:;- DocuSigned by:

By:L ~9C~4~ ~itl::tr By:

Matt ew Huffaker, City Manager
ATTES DocuSigned by:

By: &~ - ---'<.:::1~lAOOJ~U/ttZI=-----
Beatri , Flores, City Clerk
APPROJ ED AS TO FORM:

DocuSigned by:
aloJA, J S wtifl
Alan Smi ., City Attorney
"Tenant"
Expoimaging, Inc., a corporation
Erik
fjt1 Sowder,
~ President
APPROVED AS TO FORM:

Exhibit "A"

Approx. office, storage
and warehouse area
5,564 sq ft
Ten (10) parking
spaces
Area “A”
Area “A”
Area
“B”
Area
“B”

EXHIBIT A
DocuSign Envelope ID: EB658880-DA43-4544-8DE6-D960FBE6AF4D Exhibit "A"

Exhibit B
Area “A”
Approx. office, storage
and warehouse area
5,564 sq ft
Ten (10) parking
Spaces

1 Reso No. ______ (CM)
Meeting Date: 052725 SWZ ______ TV ______ Finance ______ RESOLUTION NO. ____________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE FIXING DATE AND TIME AS JUNE 10 AND JUNE 24, 2025, AT 6:30 P.M. FOR A PUBLIC HEARING TO CONSIDER
ADOPTION OF THE BUDGET FOR FISCAL YEAR 2025-2027 AND

DIRECTING THE CITY CLERK TO GIVE NOTICE THEREOF
WHEREAS, Section 1104 of the Charter of the City of Watsonville requires that a public hearing be held on a proposed budget for the ensuing fiscal year and a notice thereof be published not less than ten (10) days before said hearing and copies of the proposed budget be available in the office of the City Clerk at least ten (10) days before the hearing.

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

1. Adopting a Resolution fixing date and time for a public hearing 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 on Tuesday, June 10, and June 24, 2025, at the 6:30 p.m. sessions, the City Council will conduct public hearings on the proposed Budget for Fiscal Year 2025- 2027, including the 5-year Capital Improvement Program for FY 25/26 – FY29/30. The hearing will be held at the meeting place of the City Council, located in the City Council Chambers, 275 Main Street, (4th) Fourth Floor, Watsonville, California.

3. That at such public hearing all persons interested shall be given an opportunity to be heard. Such hearing may be continued from time to time as may be determined by the City Council of the City of Watsonville.

2 Reso No. (CM)
Meeting Date: 052725

4. That the City Clerk is hereby authorized and directed to publish notice of the hearing in accordance with Section 1104 of the City Charter of the City of Watsonville and make available copies of the Budget in the City Clerk’s office. ********************************

1 Ord No. ______ (CM)
Meeting Date: 052725
ORDINANCE NO. FINAL ADOPTION (CM)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE ADDING SECTION 4-5.1021 (ELECTRIC VEHICLE
PARKING) TO ARTICLE 10 (STOPPING, STANDING AND PARKING) TO CHAPTER 5 (TRAFFIC) OF TITLE 4 (PUBLIC SAFETY) OF THE

WATSONVILLE MUNICIPAL CODE RELATING TO ELECTRIC VEHICLE

CHARGING STATIONS AND PARKING RESTRICTIONS
Table of Contents
SECTION 1.FINDINGS. .................................................................................................. 2 SECTION 2.ENACTMENT. ............................................................................................. 3 CHAPTER 5 TRAFFIC.................................................................................................. 3 ARTICLE 10. STOPPING, STANDING AND PARKING.............................................. 3 Sec. 4-5.1021 Electric Vehicle Parking. .................................................................... 3 SECTION 3.ENVIRONMENTAL REVIEW ...................................................................... 5 SECTION 4.SEVERABILITY........................................................................................... 5 SECTION 5.PUBLICATION ............................................................................................ 5 SECTION 6.EFFECTIVE DATE...................................................................................... 6 o-0-o
WHEREAS, pursuant to section 7 of article XI of the California Constitution and the City of Watsonville’s (“City”) general police powers, the City is empowered and charged with responsibility for the health, safety, and welfare of its citizens; and WHEREAS, the City has expressed support for and is committed to the goal of achieving net-negative emissions by 2030 through the adoption of its 2030 Climate Action and Adaptation Plan (“CAAP”); and
WHEREAS, CAAP uses a comprehensive and holistic approach to meet the City’s climate goals by employing three types of initiatives, including: climate action, climate adaptation, and climate restoration; and
WHEREAS, climate action requires that the City reduce its greenhouse gas emissions; and
WHEREAS, more than half of the City’s greenhouse gas emissions originate from

2 Ord No. ______ (CM)
Meeting Date: 052725
transportation and the use of gas-powered cars and trucks; and WHEREAS, CAAP identifies electric vehicle infrastructure as a significant component of the City’s overall strategy to reduce greenhouse gas emissions; and WHEREAS, Vehicle Code section 22511 authorizes local authorities to designate stalls or spaces in an offstreet parking facility owned or operated by that local authority for the exclusive purpose of charging and parking a vehicle that is connected for electric charging purposes; and
WHEREAS, Vehicle Code section 22511 further authorizes local authorities to designate stalls or spaces on a public street within its jurisdiction for the exclusive purpose of charging and parking a vehicle that is connected for electric charging purposes; and WHEREAS, Vehicle Code section 22511 further provides that vehicles parked in violation of any restrictions are subject to removal; and WHEREAS, Vehicle Code section 22511.1 prohibits vehicle operators from parking or leaving standing vehicles in a stall or space designated for electric charges purposes unless the vehicle is connected for electric charging purposes; and WHEREAS, the City Council desires to adopt regulations relating to the use of electric vehicle charging stations to promote sustainable transportation and manage the availability of electric vehicle charging stations.

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

SECTION 1. FINDINGS.

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

3 Ord No. ______ (CM)
Meeting Date: 052725
SECTION 2. ENACTMENT.

Article 10 (Stopping, Standing and Parking) of Chapter 5 (Traffic) of Title 4 (Public Safety) of the Watsonville Municipal Code is hereby amended by adding a new Section 4-5.1021 (Electric Vehicle Parking) to read in words and figures as follows:

CHAPTER 5 TRAFFIC
ARTICLE 10. STOPPING, STANDING AND PARKING
Sec. 4-5.1021 Electric Vehicle Parking.
(a) Definitions.
(1) For purposes of this Section, “Electric vehicle” shall mean a vehicle that operates, either partially or exclusively, on electrical energy from the electrical grid, or an off grid source, that is fueled via an electric plug-in port and stored on board for motive purposes. These include both 100% battery electric vehicles and plug-in hybrid electric vehicles possessing charge ports for the purpose of fueling.
(2) For purposes of this Section, “Electric vehicle charging equipment” shall mean equipment that has as its primary purpose the transfer of electric energy to a battery or other energy storage device on an electric vehicle. (3) For purposes of this Section, “Charging event” shall mean an electric vehicle is plugged into the electric vehicle charging equipment and in the process of charging.
(4) For purposes of this Section, “Electric vehicle charging station” shall mean a parking space dedicated to active charging events. (b) Designation of electric vehicle parking spaces; signs or markings. (1) The director of public works, or designee, is authorized in

4 Ord No. ______ (CM)
Meeting Date: 052725
accordance with the purposes of this chapter to designate spaces in off-street public parking facilities for the exclusive parking of electric vehicles that are connected to electric vehicle charging equipment at an electric vehicle charging stations for the purpose of transfer of electricity to the battery or other energy storage device of an electric vehicle.
(2) Upon designation of a parking space or spaces for the exclusive use of electric vehicles pursuant to subsection (1), the public works department shall place signs or markings giving adequate notice that the parking space or spaces are restricted and to be used only for such electric vehicles. The signs or markings shall be in compliance with Section 22511 of the California Vehicle Code indicating that vehicles left standing in violation of the restriction may be removed. The parking restriction shall not apply to the designated parking spaces until the sign or markings have been placed.
(c) Electric vehicle parking restriction.
(1) In parking stalls designated by the use of markings and/or posting as electric vehicle charging stations, only electric vehicles are allowed to park for charging events during designated hours.
(2) It is unlawful for the operator of any vehicle to allow a vehicle to park or stand in a designated electric vehicle charging station longer than the posted time limit.
(3) It is unlawful for the operator of an electric vehicle to allow that vehicle to park or stand in a designated electric vehicle charging station unless the vehicle is actively conducting a charging event.
(4) It is unlawful for a person to obstruct, block, or otherwise bar

5 Ord No. ______ (CM)
Meeting Date: 052725
access to a designated electric vehicle charging station unless the vehicle is actively conducting a charging event.
(5) The police department is authorized to cite and/or remove or cause the removal of vehicles parked in violation of this section in accordance with Section 22511 of the California Vehicle Code.
(6) These regulations shall not apply to any vehicle that displays a valid permit issued by the director of public works that identifies it as exempt from these regulations.

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

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

SECTION 5. PUBLICATION

6 Ord No. ______ (CM)
Meeting Date: 052725
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.
************************************

Ord No. (CM)
Meeting Date: 05/27/25 1
ORDINANCE NO.FINAL ADOPTION (CM)

AN UNCODIFIED ORDINANCE OF THE CITY COUNCIL OF THE CITY

OF WATSONVILLE DESIGNATING WATSONVILLE FIRE HAZARD

SEVERITY ZONES

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

SECTION 1. ENACTMENT. Adoption of Map. The City of Watsonville (“City”) hereby designates the Fire Hazard Severity Zones as recommended by the California Department of Forestry and Fire Protection pursuant to Government Code Section 51178.

The map showing the fire zone designations, attached hereto as Attachment A, is approved by the City, hereby incorporated by reference, and entitled “City of Watsonville Fire Hazard Severity Zones.” The map is also located at the following internet address:
https://www.watsonville.gov/2536/2025-Fire-Hazard-Severity-Zone-Map SECTION 2. ENVIRONMENTAL FINDINGS. The City Council finds that this ordinance is not subject to California Environmental Quality Act (CEQA) pursuant to following sections of the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3: (1) Section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment); and (2) Section 15060(c)(3) (the activity is not a project as defined in Section 15378) because the subject ordinance has no potential for resulting in any significant physical change to the environment, either directly or indirectly.

SECTION 3: PUBLICATION.

Ord No. (CM)
Meeting Date: 05/27/25 2
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 4: EFFECTIVE DATE.

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

Ord No. (CM)
Meeting Date: 05/27/25 3
***********************************

City Council
2023-2025
watsonville.gov
Strategic Plan
Final Update - April, 2025

Eduardo Montesino
District 1
Maria Orozco
Mayor
District 3
Kristal Salcido
Mayor Pro Tempore
District 4
2025
Vanessa Quiroz-Carter
District 2 Page 265 of 793
Every two years, the City Council adopts a Strategic Plan that aligns the Council’s priorities and community needs with the budget and sets forth a forward-looking vision for the City organization and the services we offer to the community.

The 2023 - 2025 Strategic Plan includes seven long-range priorities. Under each Strategic Priority, the Council identified several strategies and actions to support meeting the measurable outcomes set forth under each priority.
• Articulates the Council’s priorities and guides
its policy decisions.
• Enables staff to develop feasible, measurable,
and actionable strategies to address the
Council’s priorities, implement policies, and
allocate resources effectively.
• Focuses the City’s efforts to engage community
members and agency partners in achieving the
City’s mission.
• Enables the City to prioritize time & resources
in alignment with the Council’s priorities.
• Ensures accountability and transparency in
furthering effective policies and City services that
meet community needs.

Strategic Plan: 2023-2025 Priorities
A Road Map for the Future
Economic Development
Efficient & Well-Performing
Government
Housing
Community Engagement & Well-being
Public Safety
Infrastructure & Environment
Fiscal Health

19% 46% 27% 8%
29% 14% 43% 14%
12% 53% 30% 5%
26% 37% 26% 11%
25% 63% 6% 6%
18% 58% 18% 6%
12% 49% 24% 15%
33% 8% 59%

OVERALL
2023 - 2025 CITY COUNCIL

STRATEGIC PLAN

FINAL UPDATE
PRIORITY 2

INFRASTRUCTURE
& ENVIRONMENT
PRIORITY 1

ECONOMIC

DEVELOPMENT
PRIORITY 3

HOUSING
PRIORITY 5
PUBLIC
SAFETY
PRIORITY 4
FISCAL
HEALTH
PRIORITY 7

EFFICIENT & HIGH
PERFORMING GOV.

PRIORITY 6

COMMUNITY

ENGAGEMENT
& WELLBEING
Completed Ongoing
In Progress Delayed
REV. 04.16.25
33 - Completed 82- Ongoing 48 - In Progress 15 - Delayed 4 - Completed 2 - Ongoing 6 - In Progress 2 - Delayed
5 - Completed 23 - Ongoing 13 - In Progress 2 - Delayed 4 - Completed 1 - Ongoing 7 - In Progress 0 - Delayed
5 - Completed 7 - Ongoing 5 - In Progress 2 - Delayed
4 - Completed 10 - Ongoing 1 - In Progress 1 - Delayed
6 - Completed 19 - Ongoing 6 - In Progress 2 - Delayed
5 - Completed 20 - Ongoing 10 - In Progress 6 - Delayed Page 267 of 793 Establish an Economic Development Plan that is data-informed and allows the City to attract new businesses. The Economic Plan should include City branding and messaging and promote business growth and connection.

Develop a plan that attracts flagship companies and larger revenue-generating businesses. Adopt the Downtown Specific Plan and support local business growth.

Fiber optics support the digital middle mile for future growth and digital access of residents, businesses, and connected/smart City initiatives. Fiber optics are foundational to increasing data access to small cell sites throughout the city. Small cell sites improve cellular signal in populated areas, which increases data access for all.

City departments
leading the work
to support:

Strategies

1.1 - Establish an Economic Development Plan

1.2 - Work on Business Attraction

1.3 - Expand Fiber Optics
Priority 1
Focus on developing a strong and
visible City Brand to help strengthen
and diversify the City’s economy for all.

Support and grow existing businesses,
attract new businesses and industries,
enhance workforce development,
revitalize downtown, and encourage
entrepreneurs to invest and grow locally.

Economic
Development

Work Plan
Supporting the Strategic plan
2023 - 2025
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2023-2025 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise.

Focus on developing a strong and visible City Brand
to help strengthen and diversify the City’s economy
for all. Support and grow existing businesses, attract
new businesses and industries, enhance workforce
development, revitalize downtown, and encourage
entrepreneurs to invest and grow locally.

How do we accomplish this goal
(What is needed or work you will need to do to get there?)

1.1 - Establish Economic Development Plan

1.2 - Work on Business Attraction
Hire Consultant to assist with economic
development *
Create and execute an economic development
campaign
Develop plan that attracts flagship companies and
larger revenue generating businesses *
Follow-on to the 2019 Airport Economic Benefit
Analysis; conduct a 2024 analysis
Develop city branding for helping market
businesses *
Engage Chamber of Commerce and partners to
strengthen workforce development *
Adopt the Downtown Specific Plan
Strategy to support local business growth
1 - Economic Development
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Completed Ongoing
In Progress Delayed
* Voted as Council Priorities

Other
Develop and adopt a “Dig Once”Policy
Adopt a small Cell site guidelines
Work with educational partners to develop
strategies that support education and
workforce training (PVUSD, SUEÑOS, etc)
Opportunity to Work Program
Develop a Public Art Master Plan

1.3 - Expand Fiber Optics
1 - Economic Development
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Complete Fiber Optic Loop

Address potholes, striping, road maintenance, and repairs on streets throughout the city. Implement new traffic safety projects that make Watsonville more accessible to drivers and safer for pedestrians.

Explore opportunities to update and enhance City facilities for the benefit and enjoyment of employees and City residents.

Continue the City’s longstanding and proactive efforts to serve as a regional leader in environmental stewardship.

City departments
leading the work
to support:

Strategies

2.1 - Improve Streets

2.2 - Address City’s Aging Facilities

2.3 - Support Environmental Stewardship
Priority2
The City will work to build and maintain
our infrastructure and preserve the
natural environment through careful
planning, preservation, and maintenance
for residents and future generations.

Special attention will be given to road
maintenance, street lighting and City
facilities.

Infrastructure
& Environment

2.2 - Address City’s Aging Facilities
Repair potholes throughout the City
Explore better roundabout standards
Update lighting throughout the City
Implement Way finding program
Improve Crosswalks
Improve Striping on City streets
Replace & install 1-2 miles of new water main / year
Repair City sidewalks, curbs, and gutters to reduce
trip and injury hazards
Improve and install bike lanes
Work Plan
Supporting the Strategic plan
2023 - 2025
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2023-2025 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise.

The City will work to build and maintain our
infrastructure and preserve the natural environment
through careful planning, preservation, and
maintenance for residents and future generations.

Special attention will be given to road maintenance,
street lighting and City facilities.

How do we accomplish this goal
(What is needed or work you will need to do to get there?) 2 - Infrastructure & EnvironmentOngoing
EngagementPolicy Project ProgramPlanning Investment Communication Other

2.1 - Improve Streets *
Completed Ongoing
In Progress Delayed
* Voted as Council Priorities

Improve or when possible, build new City Hall,
Municipal Service Center, Police Department and
Fire stations *
Minimize blight by providing proactive graffiti
abatement response.

Build City Plaza Master Plan
Invest in technology for safety improvements
at City buildings
Provide landscape maintenance and weed
abatement services.

Joint Use Investment at Rolling Hills MS
Youth Center and Senior Center Building
Enhancements
Park and Trail Signage Master Implementation Plan
Expedite development, design, & construction of
wastewater related projects that will maintain,
upgrade and enhance the infrastructure of the
wastewater system in order to meet NPDES permit
requirements and protect the environment
Construction of new Nature Center Building
System-wide Park Assessment Implementation Plan
City Council Chambers Upgrades

2.2 - Address City’s Aging Facilities (Continued)
2 - Infrastructure & Environment
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Centralize internal service requests for all
departments.

Perform daily and routine cleaning services for
approximately 220,000 square feet of facilities.

Complete Ramsay Park Renaissance *

Continue supporting the implementation and
construction of the levee project
Convey wastewater to the treatment plant in a
reliable and cost-effective manner, meet all
applicable State and Federal regulations, and
protect the environment and public health
Provide technical support and project management
for energy conservation and renewable energy
projects for all City departments.

Continue Food Scraps Program
Increase tree canopy within the City *
Reduce carbon footprint by acquiring zero emission
vehicles and eliminating leaded fuel sales.

Ensure timely homeless encampment litter removal
Improve levees in and around the City
Complement existing unleaded aviation fuel
offerings by introducing a higher-octane alternative
that services 70 % of based aircraft.

Expansion of electrification of City fleet to meet state mandates, explore alternative fuel opportunities,
purse grant funding for Evs.

Implement Urban Forest Master Plan *
Create guidelines to implement underground
utility lines

2.3 - Support Environmental Stewardship
Other
2 - Infrastructure & Environment
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Implementation of the Local Hazard Mitigation Plan
(LHMP) and Climate Action and Adaptation Plan
(CAAP)
Provide cost-effective wastewater treatment, protect
Monterey Bay water quality and public health, and
comply with National Pollution Discharge Elimination
System (NPDES) permit requirements

Building enhancements at the Main Library;
develop the atrium on the 2nd floor to increase
reader seating and outdoor engagement for
fundraising, programming, etc.

Other (Continued)
Additional - (Future work not identified as of yet)
2 - Infrastructure & Environment
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Explore options to expand park space
Need for a new Police Activities League Building
Expand on partnership with PVUSD to expand
parks, green spaces and public spaces for the
community to use and enjoy
Continue to improve City’s cybersecurity program.

Explore opportunities and policies that will allow for mixed-use development to make use of the limited space available within city limits.

Encourage the development of sustainable, inclusive, and affordable homes for all residents, including moderate housing, workforce housing, and downsizing options.

Explore opportunities to enhance and market ADUs to Watsonville residents.

City departments
leading the work
to support:

Strategies

3.1 - Explore Mixed Use Development

3.2 - Increase Housing Options for All

3.3 - Explore Opportunities for ADUs
Priority3
Proactively remove barriers to accessing
stable, quality and affordable housing
and strive to create new opportunities
to add housing to meet our community’s
current and future housing needs.

Housing

3.2 Increase Housing Options for All

3.3 Explore Opportunities for ADU’s
Explore new ways to incentivize mixed-used
developments *
Incentivize “Housing for all” developments *
Market and enhance ADUs *
Explore opportunities for businesses to provide
housing to employees
Explore opportunities for housing developments
near rail and public transportation *
Adopt the Downtown Specific Plan *
Explore ADU Assistance Program
Explore ways of assisting new homeowners
through education and financing *
Work Plan
Supporting the Strategic plan
2023 - 2025
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2023-2025 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise.

Proactively remove barriers to accessing stable,
quality and affordable housing and strive to
create new opportunities to add housing to meet
our community’s current and future housing needs.

How do we accomplish this goal
(What is needed or work you will need to do to get there?) 3 - Housing
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other

3.1 - Explore Mixed Use Development
Completed Ongoing
In Progress Delayed
* Voted as Council Priorities

Prepare and adopt the 6th cycle Housing Element
Community engagement and outreach to support
2050 General Plan Update
Require charging stations in new developments
Enhance Legislative Engagement including County,
LAFCO, Regional, State, and Federal *
Other
3 - Housing
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other

Explore the possibility of amending the City Charter to allow Council members to receive health benefits and a salary. This will appeal and attract other community members who wish to get involved with local government and run for office.

Maintain a balanced budget with healthy fund balances while aligning with the Strategic Plan Priorities.

Develop additional policies to help maintain and grow adequate city reserves.

Leverage local tax measure funds and explore the possibility of bonding to finance Capital Improvement Projects.

City departments
leading the work
to support:

Strategies

4.1 - Increase Community Involvement in Local Government

4.2 - Maintain a Balanced Budget

4.3 - Leverage Local Tax Measures
Priority4
The City will continue to enhance fiscal
sustainability of the City, through prudent
financial planning and decision-making
to ensure the organization can best
serve the residents and businesses
of Watsonville today and in the future.

Fiscal
Health

4.2 - Maintain a Balanced Budget

4.3 - Leverage Local Tax Measures
Evaluate tools that could increase community
members involvement with local government
and to run for office *
Prepare a comprehensive, balanced budget book
which includes long term budget plan and strategic
priorities *
Develop a spending plan for Measure R
revenues based on community priorities *
Prepare a Comprehensive Annual Financial Report
including external audit review
Implement policies to have a healthy fund balance
and fiscal reserve policies in place to help us get
through future economical uncertainties
Leverage bond financing to support major
infrastructure projects to be built in our community
Prepare an Annual Mid-Year Report and present to
City Council with appropriation corrections
Increase Community Involvement in Local Government
Work Plan
Supporting the Strategic plan
2023 - 2025
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2023-2025 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise.

The City will continue to enhance fiscal sustainability of the City, through prudent financial planning and decision-making to ensure the
organization can best serve the residents and
businesses of Watsonville today and in the future.

How do we accomplish this goal
(What is needed or work you will need to do to get there?) 4 - Fiscal Health
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other

4.1 - Increase Community Involvement
in Local Government
Completed Ongoing
In Progress Delayed
* Voted as Council Priorities

Modernize Financial Services
Deploy improved online customer account access for
payments and service
Hexavalent Chromium Funding and Implementation
Lobby Government officials for additional funds
Expand electronic payment methods by installing
kiosks at payment office.

Continued funding for capital improvement of
facilities. *
Manage our Retirement Liability
Maintain fleet and replacement program to ensure
funding is available for transportation needs

4.3 Leverage Local Tax Measures
Other - Collection
Other - Community Investments
4 - Fiscal Health
EngagementPolicy Project ProgramPlanning Investment Communication Other Leverage economic development as a driver to
improve fiscal health of the City *
Ensure all service connections are metered
Federal Levee Project
Ongoing

Attract and retain public safety staff to have the capacity to educate our community and enforce existing laws and regulations.

Focus on traffic safety education, infrastructure, and enforcement to ensure safe streets for all.

Engage the community though a wide range of programs and initiatives to enhance the sense of safety and highlight the rich and diverse cultural, linguistic and ethnic heritage of Watsonville.

City departments
leading the work
to support:

Strategies

5.1 - Promote Public Safety

5.2 - Focus on Tra!c Education & Enforcement

5.3 - Improve Safety Through Engagement and Outreach
Priority5
Strive to create a healthy, safe, and
thriving Watsonville. The definition
of public safety under this priority is
expansive, and it reaches beyond the
absence of crime or providing
emergency medical response services
in the community. Public safety includes
safe roads, lighting, traffic, community
partnerships, fire, community-oriented
police, and community services.

Public
Safety

Work Plan
Supporting the Strategic plan
2023 - 2025
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2023-2025 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise.

Strive to create a healthy, safe, and thriving
Watsonville. The definition of public safety under
this priority is expansive, and it reaches beyond the
absence of crime or providing emergency medical
response services in the community. Public safety
includes safe roads, lighting, traffic, community
How do we accomplish this goal
(What is needed or work you will need to do to get there?)

5.1 - Promote Public Safety

5.2 - Focus on Traffic Education & Enforcement *

5.3 - Improve Safety Through Engagement and Outreach
Relocation of Runway Two-Seven threshold by 870
to mitigate Runway Visibility Zone issue
Lead a community Youth Developmental Asset
Movement
Expansion of Traffic Unit, Education and Enforcement
Be the preferred place for adults, youth, families and
caregivers to connect, learn & grow together by providing opportunities for learning & social development.

Police and Fire Youth Academy *
Street Lighting - assessment project
Police and Fire response
Crosswalk and street stripping program
5 - Public Safety
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Completed Ongoing
In Progress Delayed
* Voted as Council Priorities

Additional - (Future work not identified as of yet)
Provide resources to disenfranchised community
members through ongoing outreach activities.
(Mental health, monolingual, lack of access to services) * Partner with local organizations and agencies to
effectively communicate the library’s programs and
services to maximize community use.

Community outreach and education about the
Community Development Department

5.3 - Improve Safety Through Engagement
and Outreach (Continued)
5 - Public Safety
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Celebrate the unique diversity and heritage of our community through programming and events that highlight the rich and diverse cultural, linguistic and ethnic heritage.

Offer a dynamic & diverse collection of both physical
and downloadable materials and resources for all
ages that focuses on self-discovery and expression.

Implement the Police Flock Camera Program
Implement the Police Drone Program
Police Firearms and Drug Detection Canine

Create a sense of community and belonging for residents by working with the community and stakeholders to continue to provide events that promote art, culture, health, and economic opportunities.

Provide inclusive opportunities to learn about the City, gain new skills, and increase resiliency for youth, adults, and seniors through programs provided by all City departments.

Work with the community to assess, promote, and maintain City parks and trails. Increase traffic calming and pedestrian safety projects throughout the City.

City departments
leading the work
to support:

Strategies

6.1 - Expand Community Events

6.2 - Increase Inclusive Engagement Programs

6.3 - Promote Parks and Pedestrian Safety
Priority6
Actively engage community members
on important issues affecting the
quality of life to create a more informed,
engaged, and thriving community.

Engagement efforts will prioritize
expanding programs and activities
that create a sense of community and
belonging. Prioritize efforts that increase
our community’s a sense of physical
and emotional safety.

Community
Engagement
& Well-being

Work Plan
Supporting the Strategic plan
2023 - 2025
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2023-2025 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise.

Actively engage community members on important issues
affecting the quality of life to create a more informed, engaged, and thriving community. Engagement efforts will prioritize expanding programs and activities that create a sense of community and belonging. Prioritize efforts that increase our community’s a sense of physical and emotional safety.

How do we accomplish this goal
(What is needed or work you will need to do to get there?)

6.1 - Expand Community Events *
Expand the Bibliovan’s availability at events
throughout the City
Partnering with Agencies to Increase Services for
Residents: Ex. Increase County hours in Watsonville;
Mexican Consulate, etc.

National Night Out
Watsonville Reads; one book, one community
reading program
Explore opportunities to expand holiday events
Host community cleanup days 1 or 2 times per year
Creative Cafe at Freedom Library aims to provide
space, supplies, and inspiration for crafters in the
community
Continue and expand Summer Concert Series
Fire In the Sky Event
6 - Engagement & Well-being
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Completed Ongoing
In Progress Delayed
* Voted as Council Priorities

6.3 - Promote Parks and Pedestrian Safety
Implement a PD Advisory Board
Expand P.A.L.’s Programing
Implement the Library’s Strategic Plan
Expand Programs and services for Seniors
Work with Community Based Orgs to provide
resources for residents
Implement a Records Management System to
allow staff to respond to public in a transparent
and efficient manner
Poet Laureate and Youth Poet Laureate
Collaborate with CA State Parks to provide
transportation and education about state parks
Install traffic calming and pedestrian safety
measures *

6.2 - Increase Engagement Programs *
6 - Engagement & Well-being
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Expand the Watsonville Academy
Expand Teen Action Council with Library
Expand Field trips to the Airport
Expand “Passport to Fun” with City Youth Programs
Prioritize deferred maintenance of existing parks
and facilities

Additional - (Future work not identified as of yet)
Other
Grow ParkRx with Salud para la Gente and
County Health
Partner with County on survey for Master Plan on
Aging and develop Age Friendly Community
Strategic Plan *
Begin initial evaluation and effort to create a single
log-in- for city web-based services

6.3 - Promote Parks and Pedestrian Safety
(Continued)
6 - Engagement & Well-being
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Explore Library Book Vending Machines
Create a program to allow access to computers
Police Cadet Program
Pink Patch Project
Police Multi-Disciplinary Team
Police Neighborhood watch Program
Police Post Incident Team

Assess ways of increasing productivity throughout City departments, capitalizing on using technology to streamline and increase service capacity.

Increase effective communications with the community, between departments, and with elected officials.

Attract, retain, and develop a well-qualified, diverse, and professional workforce dedicated to public service. Lead departments in talent management, succession planning, employee engagement, and positive employee relations.

City departments
leading the work
to support:

Strategies

7.1 - Increase Department Capacity

7.2 - Promote E"ective Communications

7.3 - Invest in our Human Resources
Priority 7
Deliver high-quality and efficient
services for the community through
a commitment to local government
best practices, employee retention and
development, effective communications,
and investment in technology.

Efficient & High
Performing
Government

Work Plan
Supporting the Strategic plan
2023 - 2025
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2023-2025 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise.

Deliver high-quality and efficient services for the
community through a commitment to local
government best practices, employee retention
and development, effective communications, and
investment in technology.

How do we accomplish this goal
(What is needed or work you will need to do to get there?)

7.1 - Increase Department Capacity
7 - Efficient & High Performing Government Ongoing Engagement Policy Project ProgramPlanning Investment Communication Other
Coordinate timely and responsive input to develop
the Capital Improvement Program, the financial plan,
and the annual budget.

Create framework with staff to facilitate data
collection and improve data visualization
Provide technical support and project management
for energy conservation and renewable energy
projects for all City departments.

Install automated materials handling system at Main
Library; a sorting solution to improve efficiency and
enhance the patron experience
Install a check-in tablet at the one-stop permit center Determine the work required to maintain and
upgrade the City’s facilities and infrastructure.

Continue migration to Microsoft 365 and migrate
shared and department files
Continue to expand fire equipment maintenance
services.

Develop an operational and sustainability analysis of
shop operations.

Completed Ongoing
In Progress Delayed
* Voted as Council Priorities

7.3 - Invest in our Human Resources
Provide innovative technologies that will benefit the
City operations.

Develop succession planning and training for all
departments *
Process correspondence & inquiries, Council reports,
public records requests, and personnel actions and
evaluations in a timely and accurate fashion.

Maintain proactive/timely communications with the
City Council *
Attract and retain a highly talented and
diverse workforce *
Records Management System Implementation: New
system will allow staff to respond to the public in a
transparent and efficient manner.

Update Personnel Rules and Regulations.

Support employee safety and well-being.

Expanding multi-factor authentication using Azure
MFA
Update regulations, policies, and procedures to
minimize operational risks.

7.1 - Increase Department Capacity (Continued)
7 - Efficient & High Performing Government
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Needs Assessment for the Police Department

7.2 - Promote Effective Communications
Consolidate Airport functions/resources into two
Divisions: Operations and Administration

Develop and coordinate all department
revenues including water, wastewater, and
solid waste rate setting.

Expand electronic payment methods by installing
kiosks at the payment office.

Explore Charter Amendments (Election in 2024)
Independent Police auditor
Police Axon My90 Program
Coordinate and administer the department’s
budget activities, ensuring that expenses are within
the approved appropriation.

Manage our Retirement Liability
Increase transparency and community
understanding of the City’s finances
Training for Police- Looking beyond the traditional
police training. Implement training that is more in
line with 21st century policing
Complete transition to full AMI deployment for
meter reading
Maintain an apparatus and car fleet replacement plan
that meets the needs of the community and ensures
funding is allocated for future replacements.

Modernize Financial Services
Develop Cybersecurity work-plan
Supervisory leadership Institute training for all Sergeants Develop a plan to address data at risk from Long
term employees exiting the organization
Guardian Tracking Accountability, re-enforce positive
performance
Other (Continued)
7 - Efficient & High Performing Government
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other

Develop a Data Governance Policy that addresses
data classification and retention
Identify duplicate software & Create a plan to
consolidate where possible.

Encourage agencies to use Council Chambers for
hybrid meetings to increase participation.

Use ERP software to reduce the cost of DocuSign.
7 - Efficient & High Performing Government
OngoingEngagementPolicy Project ProgramPlanning Investment Communication Other Additional - (Future work not identified as of yet)

watsonville.gov

City Council Strategic Plan
FY 24/25 - Final Report

Strategic Plan:

A Road Map for the Future
• Articulates the Council’s priorities and
guides its policy decisions.
• Enables staff to develop feasible,
measurable, and actionable strategies to
address the Council’s priorities,
implement policies, and allocate
resources effectively.
• Focuses the City’s efforts to engage
community members and agency
partners in achieving the City’s mission.
• Enables the City to prioritize time &
resources in alignment with the Council’s
priorities.
• Ensures accountability and transparency
in furthering effective policies and City
services that meet community needs.
2023-2025 Priorities
Economic Development
Infrastructure & Environment
Housing
Fiscal Health
Public Safety
Community Engagement & WellBeing
Efficient & Well-Performing Government
1 2
3 4
5 6
7

Executive
Team

Progress Check
33 - Completed
82 - Ongoing
48 - In progress
15 - Delayed

Economic
Development
Focus on developing a strong and visible City brand to help strengthen and diversify the City's economy for all.

Support and grow existing businesses, attract new businesses and industries, enhance workforce development, revitalize downtown, and encourage entrepreneurs to invest and grow locally.
4 - Completed
2 - Ongoing
6 - In progress
2 - Delayed

Economic
Development
Mayor on the Move – Social Media Campaign
Code enforcement study session
Wayfinding project is underway
Hotel Incentive Policy Adopted
Assisted with the EDA grant for the Lee Rd hotel project El Frijolito reopened
Worked on the Drive-thru ordinance changes
Airport economic benefits analysis
Vallarta Supermarket Opened
New beverage warehouse & distribution facility at 200 Manabe Ow Rd New mini-storage facility at 70 Nielson St
New Starbucks at 1726 Freedom Blvd
Approved expansion of Body by Hank Automotive Services at 140 Grove Street Potential ASHC grant for Watsonville transit center redevelopment project at 475 Rodriguez St

Economic
Development
- Adopted Downtown Specific Plan
- Continued work on the 2050 Watsonville General Plan
*Hosted 39 Engagement Events (meetings, focus groups, pop ups) attended by over 1,000 residents
- 180 Code Enforcement Cases Open and Processed
- 82 Planning Permits & 1006 Building Permits Processed

Housing
Proactively remove barriers to accessing stable, quality and affordable housing and strive to create new opportunities to add housing to meet our community’s current and future housing needs.
4 - Completed
1 - Ongoing
7 - In progress
0 - Delayed

Housing
City of Watsonville 6th Cycle Housing Element 2023-2031 – adopted & certified 558 Main Street-Mixed Use Development-(50 rental units with 20% affordable) Miles Lane-72 Units & Tabasa Gardens-53 Units (City assisted in securing funding for development) Includes housing for farm workers, those at risk of homelessness, and those with disabilities
Habitat for Humanity Project -36 Airport Road—13 Ownership units and 5 reserved for farm workers. City facilitated by donating land, assisted financially and in securing state funding Watsonville Transit Center Redevelopment Project-475 Rodriguez Street—Staff working collaboratively with Santa Cruz METRO and MidPen Housing on redeveloping the Watsonville Transit Center to improve bus service and provide affordable housing above City leveraged CDBG, Joe Serna, CalHOME, HOME, PLHA funding to support housing for all CDD provides workshops for potential homeowners, renters, lenders and realtors to educate on all affordable housing options and programs.

CDBG Funded major renovations to the Watsonville Senior Center

Infrastructure &
Environment
The City will work to build and maintain our infrastructure and preserve the natural environment through careful planning, preservation, and maintenance for residents and future
generations. Special attention will be given to road
maintenance, street lighting, and City facilities.
5 - Completed
23 - Ongoing
13 - In progress
2 - Delayed

Infrastructure &
Environment
Zone 2 Reservoir Foundation Excavation
Landfill Cell IV Opening Page 306 of 793 Fish Ladder Freedom Blvd Road Reconstruction Infrastructure &
Environment
Headworks & Influent Pump
Station Improvement
WWTP Electrical Work

Infrastructure & Environment
Airport Pollution Control Facility (Wash Rack)
Environmental Determination for Runway Deactivation 2026 Community
Engagement
Airport investment
in the Community

Fiscal
Health
The City will continue to enhance fiscal sustainability of the City, through prudent financial planning and decision-making to ensure the organization can best serve the residents and businesses of Watsonville today and in the future.
5 - Completed
7 - Ongoing
5 - In progress
2 - Delayed

Fiscal
Health
Finance Accomplishments
Entered into an Agreement with a Municipal Advisor to facilitate borrowing for Capital Improvement Projects
Produced FY 24/25 balanced budget
Produced FY 24/25 Annual Comprehensive Financial Report Received FY 2023-2025 Budget Award of Excellence (GFOA) Received FY 2023-2024 Comprehensive Financial Report, including an external audit review

Public
Safety
Strive to create healthy, safe, and thriving Watsonville.

The definition of public safety under this priority is expansive, and it reaches beyond the absence of crime or providing emergency medical response services in the community.

Public safety includes safe roads, lighting, traffic, community. 4 - Completed
10 - Ongoing
1 - In progress
1 - Delayed Page 311 of 793
Public
Safety
Police Department Accomplishments
Implemented and successfully utilize the Flock Camera system Coordinated and participated in National Night Out
Acquired drones and established an effective Drone Unit Acquired, successfully trained, and implemented the Police Drug Detection Canine
Raised $34,636 for the Pink Patch Project
Awarded two OTS grants, totaling $327,382 for traffic safety enforcement, education and community engagement; one
completed and one still active
Established the Youth Summer Academy
Acquired and installed fleet cameras with LPR technology in all patrol cars
Awarded two ABC grants, totaling $136,222 for alcohol enforcement and education; one completed and one still active

Public
Safety
Fire Department Accomplishments
Painted Fire Station 1 Exterior Walls
Replaced Fire Station 1 Windows
Increased Participation at Local Events
Partnered with Salvation Army to Collect Toys for their Christmas Gifts for Local Kids and Teens Program Supported Salvation Army's Back-To-School Backpack Distribution Event and Teddy Bears with Heart Watsonville Summer Youth Academy
Paramedic Sponsorship Program
Santa Cruz Regional Fire Academy 23-01, 23-02 and 24-01 Recruitment Team was created to brainstorm ideas to successfully recruit applicants to join our Department and serve Watsonville.

Community
Engagement &
Well-being
Actively engage community members on important issues affecting the quality of life to create a more informed,
engaged, and thriving community.

Engagement efforts will prioritize expanding programs and activities that create a sense of community and belonging.

Prioritize efforts that increase our community’s a sense of physical and emotional safety.
6 - Completed
19 - Ongoing
6 - In progress
2 - Delayed Page 314 of 793

Engagement
& Well-being
Library Accomplishments
BiblioVan Outreach & Community Impact
The BiblioVan delivers high quality, free library services directly to community members who may be underserved by our traditional library branches. This includes:
• Seniors and those with physical limitations
• Children and families in need of engaging learning tools • Residents in geographically remote areas
This mobile outreach ensures equitable access to books, technology, educational materials, and enriching programs—empowering all individuals to learn, grow, and connect.

Cultural Programming & Creative Engagement
We partnered with local artists, poets, and performers to host:
• Storytimes, writing, poetry, and art workshops
• Culinary demonstrations
• Live music and animal encounters
• Events that celebrate and showcase our diverse multicultural community These programs reflect our commitment to cultural enrichment, creativity, and inclusive learning opportunities for all.

Expanded Access Through Measure R Funding
Thanks to Measure R funding, we’ve enhanced community services by:
• Hiring additional staff to support expanded weekend hours at the Main Library • Increasing access to resources, digital content, and streaming services • Created spaces in the children's area to allow for an engaging learning experience. Page 316 of 793

Engagement
& Well-being
Parks & Community Services Accomplishments
• Grew programs, participation and the PCS Team through Measure R funding – Youth, Seniors, Teen Action
Council, Special Events
• Completed Park Assessment Project
• Began Construction of Ramsay Park Renaissance

Efficient & HighPerforming
Government
Deliver high-quality and efficient services for the community through a commitment to local government best practices, employee retention and development, effective communications and investment in technology.
5 - Completed
20 - Ongoing
10 - In progress
6 - Delayed

Efficient & HighPerforming Government
City Clerk Accomplishments
• City Council Chambers upgrades complete, paving way for virtual access to meetings and broadcasting in HD.
• Upgrading NextRequest, Public Records Act Portal, to handle 722 PRAs in last 2 years and released 18,717 records.
• Successfully coordinated review and placement of Charter on the 2024 Ballot. • Implemented retention policy for emails.
• Collaborated with the County for various years until their office was open in Watsonville.

Efficient &
High-Performing
Government
HR Accomplishments
• Implemented new pre-employment testing module allowing for on-line testing • Provided core HR services to over 420 FT and 100+ hourly employees • -Conducted 116 Recruitments and assisted with onboarding of 75 new full-time employees and 100+ hourly
• Processed over 2,666 personnel action forms
• Organized and coordinated 72 in person trainings
• Coordinated 75 workers compensation claims
• Managed 100 employee leaves (FMLA,Reasonable Accommodations, PDL, etc.) • Coordinated several workplace investigations and assisted with discipline implementation

IT Accomplishments
• Moved to Watsonville.gov for website and email
• Replaced phones with a hosted Microsoft Teams system
• Awarded a $250K grant for cybersecurity
Efficient &
High-Performing
Government

Questions
& Discussion

1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, May 27, 2025
TO: CITY COUNCIL AND WATSONVILLE PUBLIC FINANCE AUTHORITY RECOMMENDED BY: ADMINISTRATIVE SERVICES DIRECTOR DURAN
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: CITY OF WATSONVILLE AND WATSONVILLE PUBLIC FINANCE

AUTHORITY APPROVE/AUTHORIZE ISSUANCE OF LEASE REVENUE
BONDS, SERIES 2025, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $13,000,000 TO FINANCE PROTION OF RAMSAY PARK AND

CITY PLAZA CAPITAL IMPROVEMENTS
RECOMMENDATION:

1. City Council: Hold a public hearing on the financing of the Projects.

2. City Council: Adopt Resolution a Resolution of the City Council of the City of Watsonville authorizing the execution and delivery by the City of Watsonville of a Ground Lease, Lease Agreement, Indenture, Continuing Disclosure Certificate and Bond Purchase Agreement in connection with the issuance of Watsonville Public Finance Authority Lease Revenue Bonds, Series 2025, approving the issuance of such bonds in an aggregate principal amount not to exceed $13,000,000, authorizing the distribution of an Official Statement in connection with the offering and sale of such bonds and authorizing the execution of necessary documents and certificates and related actions.

3. Board of Directors: Adopt a Resolution of the Board of Directors of the Watsonville Public Finance Authority authorizing the execution and delivery by the Authority of a Ground Lease, Lease Agreement, Indenture, Assignment Agreement, and Bond Purchase Agreement in connection with the issuance of Watsonville Public Finance Authority Lease Revenue Bonds, Series 2025, authorizing the issuance of such bonds in an aggregate principal amount not to exceed $13,000,000, authorizing the distribution of an Official Statement in connection with the offering and sale of such bonds and authorizing the execution of necessary documents and certificates and related actions.

BACKGROUND:

The City of Watsonville maintains 143 acres of park space, 70 acres of which consist of the City portion of

2 Pinto Lake. This equates to 2.5 acres of parkland per 1,000 residents, a far cry from the national average of 10 acres per 1,000. One needs only to compare Watsonville’s 143 acres of parkland to the City of Santa Cruz’s 1,700 acres to realize that our residents have extremely disproportionate access to parks, playgrounds, and open space.

Research has shown time and time again that residents of neighborhoods of color have access to 44% less park space per person than those of white neighborhoods. Communities with fewer park spaces are hotter in summer, have worse air quality, and are more susceptible to catastrophic flooding. People without parks close to home get less exercise, and a lack of access is associated with higher rates of heart disease, stroke, and obesity. Because access to parks is tied to overall community health, it is critical that the limited park space available to our community consists of quality, safe and wellmaintained outdoor space.

Ramsay Park and the City Plaza have historically been identified and prioritized as the City’s most significant and highly used park assets. Over the past two decades, the City has prioritized investment in improvements to amenities at both sites.

At 26 acres, Ramsay Park is the City’s largest park and is often considered the community’s hub for recreation. The last major renovations to the site were completed over 30 years ago, bringing in new play structures and a ballfield, with the skatepark and pump track added in the past decade. A community call for reinvestment of this key space is demonstrated by a two-decade-long conversation with the community through countless meetings with hundreds of residents over three state grant applications that ultimately went unfunded, especially regarding improvements to the soccer field and play areas.

Known as the "heart of the city," the City Plaza has been the focus of community gatherings and celebrations for well over a century. The Plaza’s designation on the National Register of Historic Places points to several key features, including a bandstand, water fountain, historic cannons, and other elements that have been added throughout the space’s close to 175-year history. All these features need repair and restoration. The historic gazebo/bandstand, although iconic in local imagery, has not been usable since the 1989 Loma Prieta Earthquake and is too small to serve as a modern performance venue.

In 2019, the City of Watsonville Parks and Community Services Department worked with Verde Design to lead a community input process to develop the Department's Strategic Plan and park master plans for the City Plaza and Ramsay Park. A comprehensive community input process was used to create the 2020 Parks and Recreation Strategic Plan that identifies priorities for the Parks and Community Services Department for the next 5-10 years. The park master plans created through this process provided a vision and plan for these loved community spaces and positioned the projects well for funding through grants, earmarks and community investment.

Through the support of Speaker Rivas, the City received $7 million in specified grant funds from the State of California to improve the soccer field. Shortly after, the City allocated a portion of its ARPA funds to augment this project and convert the softball field into a multiuse softball/soccer field. Simultaneously, the City invested CIP funds for the design of the project and secured grant funds to provide seed money

3 for construction of a new dog park and playground. With Watsonville residents passing Measure R in 2022, it has long been discussed that this new revenue could be used to fully fund construction of the playground, dog park and supporting amenities (parking lots, pathways and trails), with the whole project collectively now known as the Ramsay Park Renaissance. The Council awarded the construction contract for this project in March 2024.

In 2021, the City was awarded $3,350,000 in Proposition 68 funds from the State of California for the City Plaza Revitalization Project. Due to the sharp rise in construction costs since the master plan was developed and this grant was awarded, it has long been anticipated that construction cost will exceed the grant award and that Measure R funds could be leveraged to complete most, if not all, of the master plan improvements. Staff have completed the design of this project and are awaiting permitting before going out to bid.

The Ramsay Park Renaissance Project and City Plaza Revitalization Project (“Projects”) are under way and will be funded by Measure R, State Grants, ARPA, the City’s General Fund, and a portion of the Watsonville Public Finance Authority Lease Revenue Bonds, Series 2025 (“2025 Bonds”) proceeds.

Staff and the financing team have been working on the 2025 Bonds for several months and are now ready to present, for consideration by the City Council and Board of Directors of the Watsonville Public Finance Authority (“Authority”), this financing that would generate $12 million in bond proceeds to finance a portion of the Projects.

DISCUSSION:

Public Hearing
In accordance with Government Code Section 6586.5(a)(1), the City must hold a public hearing to consider public testimony concerning the possible issuance of bonds by the Authority to finance certain public capital improvements within the boundaries of the City. The City Resolution approves the sale of bonds by the Authority and finds that there are significant public benefits in connection with the Projects, and the associated financing thereof, with bond proceeds.

This meeting has been convened as a joint meeting of the City Council and the Authority Board of Directors in order to allow the City Council, and the Council Members acting in their capacity as the Authority Board of Directors, to hold the hearing as described above and consider adoption of resolutions of each body approving or authorizing the issuance of bonds by the Authority and approving the form of related financing documents and other actions.

Summary of Financing Documents
The City can generate proceeds required to complete the Projects through the issuance of the 2025 Bonds, which would be secured by lease payments that are made by the City pursuant to a lease agreement. The lease payments would be made by the City from legally available funds which are expected to consist primarily of funds in the City’s General Fund and would not require an increase in taxes to its residents.

4 Under this financing mechanism, the Authority would issue the 2025 Bonds. The Authority would simultaneously enter into a Ground Lease with the City whereby the City leases city-owned property (“Leased Assets”) to the Authority in consideration of an upfront payment (generated by the issuance of the 2025 Bonds), and the Authority leases the Leased Assets back to the City in consideration for semiannual lease payments, which in turn, are used to pay debt service on the 2025 Bonds.

The Resolutions approve the financing plan outlined above, appoints and retains the financing team, including Urban Futures, Inc. as Municipal Advisor; Anzel Galvan LLP as Bond and Disclosure Counsel; Samuel A. Ramirez & Co. as Underwriter; and U.S. Bank Trust Company National Association as Trustee; and approves all documents and actions needed to authorize the issuance and sale of the 2025 Bonds, including the form financing documents provided herein, together with any changes or additions deemed advisable and approved by any Authorized Officer, upon consultation with Bond Counsel. Because certain numbers and information related to the financing are unknown until the 2025 Bonds are sold, after the sale of the 2025 Bonds, such final numbers and information will be populated into the documents and approved by an Authorized Officer before execution of the financing documents and closing of the transaction. The following documents and information related to the transaction are included herein:
 Ground Lease and Lease Agreement: The Ground Lease and Lease Agreement provide for the City to lease the Leased Assets (City Hall, Youth Center, Parks and Community Services Building, and the Police/IT Building) to the Authority in consideration of an upfront rent payment, and for the Authority to lease the Leased Assets back to the City in consideration of the payment by the City to the Authority of semi-annual base rental payments, which rental payments are pledged to the repayment of the 2025 Bonds. The rental payments will be due on dates and in amounts to enable the Authority to pay scheduled debt service on the 2025 Bonds. In addition, under the Lease Agreement the City would agree to annually budget for and appropriate the rental payments for the use and occupancy of the Leased Assets. The City would further agree in the Lease Agreement to provide specified forms of insurance and to maintain the Leased Assets.

To comply with the Surplus Land Act, California Government Code Sections 54220 – 54234, the resolutions include the required findings and declarations to conclude that the Leased Assets under the Ground Lease and the Lease Agreement are “exempt surplus land.” Under the Surplus Land Act, if a local agency leases property for a term of more than 15 years, it is generally required to first be offered for affordable housing purposes under a published notice of availability. However, a local agency may lease exempt surplus land without publishing a notice of availability. As relevant to the proposed Ground Lease and Lease Agreement, the Leased Assets are “exempt surplus land” because the property will be transferred from one local agency to another local agency for “the receiving agency’s use” under Government Code Section 54221(f)(1)(D). In this case, the transfer from the City to the Authority under the Ground lease is exempt because the Authority will use the leased property in connection with the financing of the Project. The transfer of the Leased Assets from the Authority back to the City is exempt because the City will use the leased property for its legitimate City purposes in operating a City Hall, Youth Center, Parks and Community Services Building, and Police/IT Building.

5  Indenture: The Indenture defines the terms and conditions of the 2025 Bonds, including the pledge of revenues, redemption provisions, investment and management of funds and accounts, repayment mechanisms, and the rights and obligations of the City, the Authority, the municipal bond insurer, if any, the Trustee (US Bank), and the bondholders. Under the Indenture, the Trustee directly receives rental payments made by the City under the Lease Agreement, which are equal in amount to the interest and principal payments due on the 2025 Bonds. The Trustee receives and disburses the rental payments semiannually to holders of the 2025 Bonds as payments of interest and principal.
 Assignment Agreement: Under the Assignment Agreement, the Authority agrees to assign to the Trustee its right to receive the rental payments made under the Lease Agreement.  Bond Purchase Agreement: The Bond Purchase Agreement among the Authority, the City, and Samuel A. Ramirez & Co. (the Underwriter) defines the terms and conditions under which the 2025 Bonds will be purchased by the Underwriter.
 Preliminary Official Statement (“POS”): The POS will be distributed to prospective purchasers of the 2025 Bonds. The POS must contain all facts material to potential purchasers of the 2025 Bonds, including information regarding the security for the bonds and the City (with certain permitted exceptions to be completed in the final Official Statement) must not omit any material facts. The POS is required to satisfy the City’s obligation under federal securities laws to provide material information to potential purchasers of the 2025 Bonds and must be accurate and complete in all material respects.

The City Council, as the governing body of the City, and the Board of Directors, as the governing body of the Authority, have an obligation to ensure that the POS includes all information that would be material to a prospective investor’s decision whether to purchase the 2025 Bonds.

While the City’s Disclosure Counsel, Municipal Advisor, and the Underwriter have participated in preparing the documents, the City is ultimately responsible for ensuring that the POS is accurate, contains no misleading information, and does not omit any information necessary to make the POS not misleading to investors.
 Continuing Disclosure Certificate: The Continuing Disclosure Certificate will be delivered by the City for the benefit of owners of the 2025 Bonds and to assist the Underwriter in complying with Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission. This document describes various annual and certain event reporting and disclosure obligations of the City, as required by federal securities laws.

The City Resolutions also set forth certain not-to-exceed parameters for the 2025 Bonds, including a principal amount not exceeding $13 million, a true interest cost not exceeding 4.5%, a final maturity not exceeding May 1, 2037, and an underwriter’s discount not exceeding 0.8% of the principal amount of the

6 2025 Bonds. These not-to-exceed parameters are meant to provide some flexibility and cushion in case market conditions change.

Next Steps
On May 22, 2025, City staff and the financing team met with S&P Global Ratings to discuss the bond issuance, and we expect to receive the rating by May 30th. If the City Council and Board of Directors adopt the Resolutions approving/authorizing the issuance of the 2025 Bonds, the financing team will proceed with seeking bond insurance bids and will distribute the Preliminary Official Statement to potential purchasers of the bonds on or about June 3rd. The 2025 Bonds are expected to be sold the week of June 9 th and delivered the week of June 23rd, at which time the City would receive the bond proceeds.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

The potential environmental impacts resulting from the recommended resolutions to authorize the Watsonville Public Finance Authority Lease Revenue Bonds have been adequately evaluated by previously adopted mitigated negative declarations, in accordance with the California Environmental Quality Act (CEQA), as authorized by CEQA Guidelines Section 15162. The recommended resolutions will authorize funding through the Lease Revenue Bonds of public improvement projects known as the Ramsay Renaissance Project and the Watsonville City Plaza Expansion and Revitalization Project. The Ramsay Renaissance Project was analyzed in an Initial Study/Mitigated Negative Declaration with a corresponding mitigation monitoring program that supported the City Council’s award of the construction contract at its meeting on March 26, 2024. The Plaza Expansion and Revitalization Project was analyzed in the Mitigated Negative Declaration and mitigation monitoring program for which the Notice of Determination (Document Number 027-19 NOD) was filed with the Santa Cruz County Clerk on December 20, 2019.

STRATEGIC PLAN:

The issuance of the 2025 Bonds is consistent with Strategic Plan Priority:
2-Infrastructure & Environment
FINANCIAL IMPACT:

Pursuant to Government Code Section 5852.1, good faith estimates (obtained from the underwriter and the municipal advisor) must be disclosed at a public meeting before the authorization of the 2025 Bonds.

Required good faith estimates are provided in the applicable resolutions; the table below summarizes those estimates and includes additional information.

7 2025 Bonds
Principal Amount:

Final Maturity:

True interest cost:
$11,375,000
May 1, 2035

3.47%
Finance charge: $337,749
Amount of project proceeds received: $12,000,000
Average annual debt service:

Total debt service payment amount:
$1,485,201
$14,625,108
* These are good faith estimates only and are based on market rates as of May 13, 2025. Final results will likely differ based on market conditions as of the actual sale date and other factors. However, for the financing to proceed, the not-to-exceed parameters described in the previous section must be met.

ALTERNATIVE ACTION:

The Council and Board of Directors could not approve the Resolutions in which case the funding of the Projects would be delayed.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

1. City Council Resolution

2. Authority Resolution

3. Form of Indenture

4. Form of Ground Lease

5. Form of Lease Agreement

6. Form of Assignment Agreement

7. Form of Bond Purchase Agreement

8. Preliminary Official Statement (with Form of Continuing Disclosure Certificate included as Appendix E)

RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE AUTHORIZING THE EXECUTION AND DELIVERY BY

THE CITY OF WATSONVILLE OF A GROUND LEASE, LEASE

AGREEMENT, INDENTURE, CONTINUING DISCLOSURE CERTIFICATE

AND BOND PURCHASE AGREEMENT IN CONNECTION WITH THE

ISSUANCE OF WATSONVILLE PUBLIC FINANCE AUTHORITY LEASE
REVENUE BONDS, SERIES 2025, APPROVING THE ISSUANCE OF SUCH

BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $13,000,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL

STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF

SUCH BONDS AND AUTHORIZING THE EXECUTION OF NECESSARY

DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS
WHEREAS, the City of Watsonville, California (the “City”) is a charter city and municipal corporation duly organized and existing under and by virtue of the Constitution and laws of the State of California;
WHEREAS, the Watsonville Public Finance Authority (the “Authority”) is a joint exercise of powers authority duly organized and existing pursuant to the laws of the State of California and that certain Joint Exercise of Powers Agreement, dated as of October 24, 2017, as amended pursuant to that certain First Amendment to Joint Exercise of Powers Agreement, dated as of May 1, 2025, each between the City and the Industrial Development Authority of the City of Watsonville (as so amended, the “Joint Powers Agreement”);
WHEREAS, pursuant to the Joint Powers Agreement and Section 6588(h) of the Marks-Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code (the “Act”), the Authority has the legal authority to lease and sublease lands, structures, real or personal property, and other interests in lands that are located within the State of California that the Authority determines are necessary or convenient for the financing of public capital improvements, or any portion thereof;
WHEREAS, the City and the Authority desire to finance all or a portion of the costs of the design, acquisition, construction and/or installation of certain capital improvements in the City, including capital improvements to Ramsay Park and the Watsonville Civic Plaza (collectively, the “Project”);
WHEREAS, the City is a member of the Authority, and the Project is located within the boundaries of the City;
WHEREAS, the City has, prior to the consideration of this Resolution, held a public hearing on the financing of the Project in accordance with Section 6586.5 of the Act, which hearing was held at 275 Main Street, Watsonville, California on May 27, 2025; WHEREAS, in accordance with Section 6586.5 of the Act, notice of such hearing was published once at least five days prior to the hearing in Santa Cruz Sentinel, a local newspaper of general circulation in the City;

2 WHEREAS, the Authority and the City have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “Watsonville Public Finance Authority Lease Revenue Bonds, Series 2025,” in one or more series, on a taxable or tax-exempt basis (the “Bonds”) for the purpose of financing all or a portion of the Project; WHEREAS, to facilitate the issuance of the Bonds, the City and the Authority desire to enter into a Ground Lease between the City and the Authority (the “Ground Lease”) pursuant to which the City will lease certain real property, which real property shall initially consist of (i) City Hall, located at 250 Main Street, Watsonville, California, (ii) the Watsonville Parks and Community Services Building, located at 231 Union Street, Watsonville, California, (iii) the Watsonville Police Information Technology Building, located at 215 Union Street, Watsonville, California, and (iv) the Watsonville Youth Center, located at 30 Maple Street, Watsonville, California (collectively, the “Leased Assets”), to the Authority, and a Lease Agreement between the City and the Authority (the “Lease Agreement”), pursuant to which the City will lease the Leased Assets back from the Authority, and pay certain Base Rental Payments (as defined in the Lease Agreement), which will be pledged to the owners of the Bonds by the Authority pursuant to an Indenture by and among U.S. Bank Trust Company, National Association (the “Trustee”), the City and the Authority (the “Indenture”); WHEREAS, the Authority will issue the Bonds pursuant to the Act; WHEREAS, the City and the Authority desire to provide for the negotiated sale of the Bonds; WHEREAS, the City and the Authority have selected Samuel A. Ramirez, Inc., to act as underwriter (in such capacity, the “Underwriter”) and to purchase the Bonds from the Authority pursuant to a Bond Purchase Agreement (the “Bond Purchase Agreement”), among the City, the Authority and the Underwriter;
WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”) requires that, in order to be able to purchase or sell the Bonds, the underwriter thereof must have reasonably determined that the City has undertaken in a written agreement or contract for the benefit of the holders of the Bonds to provide disclosure of certain financial information and certain events on an ongoing basis;
WHEREAS, to cause such requirement to be satisfied, the City desires to execute and deliver a Continuing Disclosure Certificate (the “Continuing Disclosure Certificate”); WHEREAS, a form of the Preliminary Official Statement (the “Preliminary Official Statement”) has been prepared;
WHEREAS, good faith estimates of certain information relating to the Bonds are disclosed and set forth in Exhibit A attached to this Resolution as required by California Government Code Section 5852.1; such estimates were provided by Urban Futures, Inc., the City’s the Municipal Advisor, based on preliminary bond pricing information provided by the Underwriter; WHEREAS, the City Council has been presented with the form of each document referred to herein, and the City Council has examined and approved each document and desires to authorize and direct the execution of such documents and the consummation of such financing; and

3 WHEREAS, all acts, conditions and things required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of such financing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided;

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

Section 1. Each of the above recitals is true and correct. Following a duly noticed public hearing, the City Council hereby approves the financing of the Project and further finds and determines that there are significant public benefits to the citizens of the City through the issuance of the Bonds and execution and delivery of the Ground Lease and Lease Agreement pursuant to the Act and otherwise hereunder within the meaning of Section 6586(a) through (d), inclusive, of the Act, in that the delivery of the Bonds and related transactions will result in demonstrable savings in effective interest rate to the City and enable the City to undertake the Project on a timely basis, and provide a more efficient delivery of public safety services to the community.

Section 2. The forms of the Ground Lease and Lease Agreement, on file with the City Clerk, are hereby approved, and the Mayor, the Mayor Pro Tempore, the City Manager, the Administrative Services Director, and the City Clerk, and each of their authorized designees (the “Authorized Officers”), are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Ground Lease and Lease Agreement in substantially said forms, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the all-in true interest cost applicable to the Bonds shall not exceed 3.47% per annum. In the event that it is determined by the City Manager, or her designee, that there are limitations or restrictions on the ability of the City to lease or sublease any portion of the Leased Assets as contemplated by the Ground Lease and Lease Agreement or that other City-owned property would be more appropriate to use as Leased Assets under the Ground Lease and the Lease Agreement, the City Manager, or her designee, is hereby expressly authorized to designate other or additional real property of the City to be leased or subleased pursuant to the Ground Lease and Lease Agreement, with such designation to be conclusively evidenced by the execution and delivery of the Ground Lease and Lease Agreement by an Authorized Officer.

The City Council hereby declares that the real property that is the subject of the Ground Lease (herein defined as the “Leased Assets”) is “exempt surplus land” as defined by California Government Code Section 54221(f)(1)(D) since the City is transferring the Leased Assets to another local agency (the Authority) for the Authority’s use. As set forth in the Ground Lease and the Lease Agreement, the Leased Assets are needed for the Authority’s use to serve as the leased property in connection with the financing of the Project, which are important public improvements that will benefit the Authority and the City.

Section 3. The form of Indenture, on file with the City Clerk, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Indenture in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution and delivery thereof; provided,

4 however, that the aggregate principal amount of the Bonds shall not exceed $13,000,000, and the allin true interest cost applicable to the interest components of the Base Rental Payments shall not exceed

3.47% per annum; and, provided, further, that such changes, insertions and omissions shall be consistent with the terms of the Bonds established at negotiated sale pursuant to the Bond Purchase Agreement. In the event that it is determined by the Administrative Services Director, or her designee, that the funding or financing of capitalized interest on the Bonds would be in the best interests of the City, the Indenture may be modified to provide for capitalized interest on such basis as is determined by the Administrative Services Director or her designee, such determination to be conclusively evidenced by the execution and delivery of the Indenture by an Authorized Officer.

Section 4. The Bond Purchase Agreement, on file with the City Clerk, is hereby approved and the Authorized Officers are each hereby authorized and directed, for and in the name of the City, to execute and deliver the Bond Purchase Agreement in substantially said form, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Bond Purchase Agreement by such Authorized Officer; provided, however, that the underwriter’s discount (not including any original issue discount paid by the Underwriter) from the principal amount of the Bonds shall not exceed eight tenths of one percent (0.80%) of the principal amount of the Bonds.

As an alternative to the sale of the Bonds through a public offering authorized in the immediately preceding paragraph of this Section 4, the Bonds may be sold on a private placement basis through Samuel A. Ramirez, Inc., acting as private placement agent (in such capacity, the “Private Placement Agent”), if a private placement of the Bonds will produce lower interest rates than are available through a public offering of the Bonds, or if a private placement is otherwise preferable and/or more appropriate than a public offering of the Bonds, in the opinion of, and upon recommendation of, the City’s Municipal Advisor, which recommendation is agreed to by the City Manager or the Administrative Services Director; provided, however, that the compensation paid to the Private Placement Agent shall not exceed the amount approved by the City Manager or the Administrative Services Director. The Authorized Officers are each hereby authorized to negotiate and execute a private placement agreement with the Private Placement Agent in consultation with the City’s Bond Counsel and Municipal Advisor.

Section 5. The issuance by the Authority of not to exceed $13,000,000 aggregate principal amount of the Bonds, in one or more series, on a taxable or tax-exempt basis, in the principal amounts, bearing interest at the rates and maturing on the dates as specified in the Indenture as finally executed, is hereby approved.

Section 6. The sale and issuance of the Bonds and execution and delivery of the Lease Agreement is hereby determined to be consistent with the City’s Debt Management Policy and to the extent the sale and issuance of the Bonds is not in compliance with the City’s Debt Management Policy, such noncompliance is waived in accordance with the terms of the City’s Debt Management Policy.

The City further instructs Anzel Galvan LLP, as Bond Counsel, on behalf of the City, with respect to the Bonds and the Lease Agreement described in this Resolution, (a) to cause notices of the proposed sale and final sale of the Bonds and the Lease Agreement to be filed in a timely manner with the California Debt and Investment Advisory Commission (“CDIAC”) pursuant to Government Code Section 8855, and (b) to certify to CDIAC, on behalf of the City, that the City’s Debt Management Policy complies with Government Code Section 8855(i) in the notice of proposed sale filed pursuant to Government Code Section 8855.

5 Section 7. The form of Preliminary Official Statement, on file with the City Clerk, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Bonds is hereby authorized and approved. The Authorized Officers are each hereby authorized to certify on behalf of the City that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12).

The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective bidders for the Bonds a reasonable number of copies of the Preliminary Official Statement.

Section 8. The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Bonds, is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute the final Official Statement and any amendment or supplement thereto for and in the name and on behalf of the City.

Section 9. The form of Continuing Disclosure Certificate, on file with the City Clerk, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure Certificate in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution and delivery thereof.

Section 10. Anzel Galvan LLP is hereby approved and appointed as Bond and Disclosure Counsel, Urban Futures, Inc., is hereby approved and appointed as Municipal Advisor, and U.S. Bank Trust Company, National Association is hereby appointed as Trustee, each to provide such services to the City and any other related services as may be required to issue the Bonds.

Section 11. The officers, employees and agents of the City are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, including, but not limited to, taking such actions and executing such instruments as may be necessary or appropriate to remove encumbrances and clear title to any Leased Assets. Anything to the contrary herein notwithstanding, in the event the Administrative Services Director determines in consultation with the Municipal Advisor that the cost-efficient marketing of the Bonds requires creation of a funded reserve under the Indenture, each of the Indenture, Lease Agreement and other documents approved herein may be revised to reflect the funding of such a reserve. Specifically and without limiting the foregoing, the Administrative Services Director is authorized and directed to solicit and accept bids for bond insurance and, if applicable, a reserve account insurance policy, for the Bonds, provided she determines acceptance of the best bid will result in lower overall debt service or lower interest cost, and appropriate changes to each of the documents referenced herein to evidence such bond insurance, and, if applicable, a reserve account insurance policy, and the terms thereof, are hereby authorized and approved. All actions heretofore taken by the officers, employees and agents of the City with respect to the transactions set forth above are hereby approved, confirmed and ratified.

6 Section 12. The City Council hereby determines the potential environmental impacts resulting from the adoption of this Resolution have been adequately evaluated by previously adopted mitigated negative declarations, in accordance with the California Environmental Quality Act (CEQA), as authorized by CEQA Guidelines Section 15162. The Bonds will finance public improvement projects known as the Ramsay Renaissance Project and the Watsonville City Plaza Expansion and Revitalization Project. The Ramsay Renaissance Project was analyzed in an Initial Study/Mitigated Negative Declaration with a corresponding mitigation monitoring program that supported the City Council’s award of the construction contract at its meeting on March 26, 2024. The Plaza Expansion and Revitalization Project was analyzed in the Mitigated Negative Declaration and mitigation monitoring program for which the Notice of Determination (Document Number 027-19 NOD) was filed with the Santa Cruz County Clerk on December 20, 2019.

Section 13. This Resolution shall take effect from and after its date of adoption.

PASSED AND ADOPTED this ___ day of May 2025.

Mayor of the City of Watsonville
ATTEST:

City Clerk of the City of Watsonville
APPROVED AS TO FORM:

City Attorney

7 STATE OF CALIFORNIA )
) ss.

COUNTY OF SANTA CRUZ )
I, Irwin I. Ortiz, City Clerk of said City, do hereby certify that the foregoing Resolution was duly adopted by the City Council of said City and was signed by the Mayor of said City at an adjourned regular meeting of said City Council held on the ___ day of May 2025 and was approved by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

City Clerk of the City of Watsonville

A-1

EXHIBIT A

GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by the City’s Municipal Advisor, Urban Futures, Inc., in consultation with Samuel A. Ramirez, Inc., the Underwriter of the Bonds.

Principal Amount. The Municipal Advisor has informed the City that, based on the City’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be issued and sold is $13,000,000 (the “Estimated Principal Amount”).

True Interest Cost of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 3.47%.

Finance Charge of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $337,749.

Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $12,000,000.

Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $14,625,108, which excludes any reserves or capitalized interest paid or funded with proceeds of the Bonds (which may offset such total payment amount).

The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds issued and sold being different from the Estimated Principal Amount, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of

A-2
sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, (f) alterations to the City’s financing plan, or a combination of such factors.

1 WATSONVILLE PUBLIC FINANCE AUTHORITY
RESOLUTION NO. ___

RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATSONVILLE

PUBLIC FINANCE AUTHORITY AUTHORIZING THE EXECUTION AND

DELIVERY BY THE AUTHORITY OF A GROUND LEASE, LEASE

AGREEMENT, INDENTURE, ASSIGNMENT AGREEMENT, AND BOND

PURCHASE AGREEMENT IN CONNECTION WITH THE ISSUANCE OF

WATSONVILLE PUBLIC FINANCE AUTHORITY LEASE REVENUE
BONDS, SERIES 2025, AUTHORIZING THE ISSUANCE OF SUCH BONDS

IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED
$13,000,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL

STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF

SUCH BONDS AND AUTHORIZING THE EXECUTION OF NECESSARY

DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS
WHEREAS, the Watsonville Public Finance Authority (the “Authority”) is a joint exercise of powers authority duly organized and existing pursuant to the laws of the State of California and that certain Joint Exercise of Powers Agreement, dated as of October 24, 2017, as amended pursuant to that certain First Amendment to Joint Exercise of Powers Agreement, dated as of May 1, 2025, each between the City of Watsonville, California (the “City”) and the Industrial Development Authority of the City of Watsonville (as so amended, the “Joint Powers Agreement”); WHEREAS, pursuant to the Joint Powers Agreement and Section 6588(h) of the Marks-Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code (the “Act”), the Authority has the legal authority to lease and sublease lands, structures, real or personal property, and other interests in lands that are located within the State of California that the Authority determines are necessary or convenient for the financing of public capital improvements, or any portion thereof;
WHEREAS, the City and the Authority desire to finance all or a portion of the costs of the design, acquisition, construction and/or installation of certain capital improvements in the City, including improvements to Ramsay Park and the Watsonville Civic Plaza (collectively, the “Project”); WHEREAS, the City is a member of the Authority, and the Project is located within the boundaries of the City;
WHEREAS, the City has, prior to the consideration of this Resolution, held a public hearing on the financing of the Project in accordance with Section 6586.5 of the Act, which hearing was held at 275 Main Street, Watsonville, California on May 27, 2025 and adopted its resolution approving the financing and making a finding of significant public benefit in accordance with the Act; WHEREAS, in accordance with Section 6586.5 of the Act, notice of such hearing was published once at least five days prior to the hearing in Santa Cruz Sentinel, a local newspaper of general circulation in the City;

2 WHEREAS, the Authority and the City have determined that it would be in the best interests of the Authority, the City and residents of the City to authorize the preparation, sale and delivery of the “Watsonville Public Finance Authority Lease Revenue Bonds, Series 2025,” in one or more series, on a taxable or tax-exempt basis (the “Bonds”) for the purpose of financing all or a portion of the Project;
WHEREAS, to facilitate the issuance of the Bonds, the City and the Authority desire to enter into a Ground Lease between the City and the Authority (the “Ground Lease”) pursuant to which the City will lease certain real property, which real property shall initially consist of (i) City Hall, located at 250 Main Street, Watsonville, California, (ii) the Watsonville Parks and Community Services Building, located at 231 Union Street, Watsonville, California, (iii) the Watsonville Police Information Technology Building, located at 215 Union Street, Watsonville, California, and (iv) the Watsonville Youth Center, located at 30 Maple Street, Watsonville, California (collectively, the “Leased Assets”), to the Authority, and a Lease Agreement between the City and the Authority (the “Lease Agreement”), pursuant to which the City will lease the Leased Assets back from the Authority, and pay certain Base Rental Payments (as defined in the Lease Agreement), which will be pledged to the owners of the Bonds by the Authority pursuant to an Indenture by and among U.S. Bank Trust Company, National Association (the “Trustee”), the City and the Authority (the “Indenture”); WHEREAS, the Authority and the Trustee desire to enter into an Assignment Agreement to provide, among other things, that all rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee;
WHEREAS, the Authority will issue the Bonds pursuant to the Act; WHEREAS, the City and the Authority desire to provide for the negotiated sale of the Bonds; WHEREAS, the City and the Authority have selected Samuel A. Ramirez, Inc., to act as underwriter (in such capacity, the “Underwriter”) and to purchase the Bonds from the Authority pursuant to a Bond Purchase Agreement (the “Bond Purchase Agreement”), among the City, the Authority and the Underwriter;
WHEREAS, a form of the Preliminary Official Statement (the “Preliminary Official Statement”) has been prepared;
WHEREAS, on February 23, 2021, the City Council of the City adopted a Debt Management Policy for the City that complies with Government Code Section 8855(i) (the “Debt Management Policy”), which Debt Management Policy is by this Resolution being adopted by the Authority, and the sale and issuance of the Bonds as contemplated by this Resolution complies with the Debt Management Policy;
WHEREAS, good faith estimates of certain information relating to the Bonds are disclosed and set forth in Exhibit A attached to this Resolution as required by California Government Code Section 5852.1; such estimates were provided by Urban Futures, Inc., the Authority’s the Municipal Advisor, based on preliminary bond pricing information provided by the Underwriter; WHEREAS, the Board of Directors of the Authority (the “Board of Directors”) has been presented with the form of each document referred to herein, and the Board of Directors has examined

3 and approved each document and desires to authorize and direct the execution of such documents and the consummation of such financing; and
WHEREAS, all acts, conditions and things required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of such financing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the Authority is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided;

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE WATSONVILLE PUBLIC FINANCE AUTHORITY AS FOLLOWS:

Section 1. All of the recitals herein contained are true and correct and the Board of Directors so finds. The Board of Directors of the Authority has determined and hereby finds that the Authority’s assistance in financing the Project by the issuance of the Bonds and related transactions will result in significant public benefits of the type described in Section 6586 (a) through (d), inclusive, of the Act.

Section 2. The forms of the Lease Agreement and the Ground Lease, on file with the Secretary of the Authority, are hereby approved, and the Chair, Vice Chair, Executive Director, the Secretary, and the Treasurer, and each of their authorized designees (the “Authorized Officers”), are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Lease Agreement and the Ground Lease, respectively, in substantially said forms, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the all-in true interest cost applicable to the Bonds shall not exceed 3.47% per annum. In the event that it is determined by the Executive Director, or her designee, that there are limitations or restrictions on the ability of the City to lease or sublease any portion of the Leased Assets as contemplated by the Ground Lease and Lease Agreement, or that other City-owned property would be more appropriate to use as Leased Assets under the Ground Lease and the Lease Agreement the Executive Director, or her designee, is hereby expressly authorized to designate other or additional real property of the City to be leased or subleased pursuant to the Ground Lease and Lease Agreement, with such designation to be conclusively evidenced by the execution and delivery of the Ground Lease and Lease Agreement by an Authorized Officer.

The Board of Directors hereby declares that the real property that is the subject of the Lease Agreement (previously defined as the “Leased Assets”) is “exempt surplus land” as defined by California Government Code Section 54221(f)(1)(D) since the Authority is transferring the Leased Assets to another local agency (the City) for the City’s use. As set forth in the Ground Lease and the Lease Agreement, the Leased Assets are needed for the City’s use to serve as the leased property in connection with the of the Project, which are important public improvements that will benefit the Authority and the City. The Leased Assets are also needed for the City’s ongoing operational purposes to providing facilities for City Hall, the Community Services Building, Police Information Technology purposes, as well as recreational purposes.

Section 3. The form of Indenture, on file with the Secretary of the Authority, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Indenture in substantially said form, with

4 such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the aggregate principal amount of the Bonds shall not exceed $13,000,000, and the all-in true interest cost applicable to the Bonds shall not exceed 3.47% per annum and, provided, further, that such changes, insertions and omissions shall be consistent with the terms of the Bonds established at negotiated sale pursuant to the Bond Purchase Agreement. In the event that it is determined by the Treasurer, or her designee, that the funding or financing of capitalized interest on the Bonds would be in the best interests of the City, the Indenture may be modified to provide for capitalized interest on such basis as is determined by the Treasurer or her designee, such determination to be conclusively evidenced by the execution and delivery of the Indenture by an Authorized Officer.

Section 4. The issuance of not to exceed $13,000,000 aggregate principal amount of the Bonds, in one or more series, on a taxable or tax-exempt basis, in the principal amounts, bearing interest at the rates and maturing on the dates as specified in the Indenture as finally executed, is hereby authorized and approved.

Section 5. The form of Assignment Agreement, on file with the Secretary of the Authority, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Assignment Agreement in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution and delivery thereof.

Section 6. The Bond Purchase Agreement, on file with the Secretary of the Authority, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name of the Authority to execute and deliver the Bond Purchase Agreement in substantially said form, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Bond Purchase Agreement by such Authorized Officer; provided, however, that the underwriter’s discount (not including any original issue discount paid by the Underwriter) from the principal amount of the Bonds shall not exceed eight tenths of one percent (0.80%) of the principal amount of the Bonds.

As an alternative to the sale of the Bonds through a public offering authorized in the immediately preceding paragraph of this Section 6, the Bonds may be sold on a private placement basis through Samuel A. Ramirez, Inc., acting as private placement agent (in such capacity, the “Private Placement Agent”), if a private placement of the Bonds will produce lower interest rates than are available through a public offering of the Bonds, or if a private placement is otherwise preferable and/or more appropriate than a public offering of the Bonds, in the opinion of, and upon recommendation of, the Authority’s Municipal Advisor, which recommendation is agreed to by the Executive Director or Treasurer of the Authority; provided, however, that the compensation paid to the Private Placement Agent shall not exceed the amount approved by the Executive Director or Treasurer of the Authority. The Authorized Officers are each hereby authorized to negotiate and execute a private placement agreement with the Private Placement Agent in consultation with the Authority’s Bond Counsel and Municipal Advisor.

Section 7. The form of Preliminary Official Statement, on file with the Secretary of the Authority, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Bonds is hereby authorized and approved. The Authorized Officers are each

5 hereby authorized to certify on behalf of the Authority that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (except for the omission of certain final pricing, rating and related information as permitted by such Rule).

The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective bidders for the Bonds a reasonable number of copies of the Preliminary Official Statement.

Section 8. The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Bonds, is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the Authority, to execute the final Official Statement and any amendment or supplement thereto for and in the name and on behalf of the Authority.

Section 9. Anzel Galvan LLP is hereby approved and appointed as Bond and Disclosure Counsel, Urban Futures, Inc., is hereby approved and appointed as Municipal Advisor, and U.S. Bank Trust Company, National Association is hereby appointed as Trustee, each to provide such services to the Authority and any other related services as may be required to issue the Bonds.

Section 10. The Authority hereby adopts the Debt Management Policy and certifies that the Debt Management Policy complies with Government Code Section 8855(i), and that the Authority’s financing described in this Resolution and its obligations under the Indenture and the Ground Lease as contemplated by this Resolution are in compliance with the Debt Management Policy, and to the extent the sale and issuance of the Bonds is not in compliance with the Debt Management Policy, such noncompliance is waived in accordance with the terms of the Debt Management Policy.

The Authority further instructs Anzel Galvan LLP, as Bond Counsel, on behalf of the Authority, with respect to the Bonds described in this Resolution, (a) to cause notices of the proposed sale and final sale of the Bonds to be filed in a timely manner with the California Debt and Investment Advisory Commission (“CDIAC”) pursuant to Government Code Section 8855, and (b) to certify to CDIAC, on behalf of the Authority, that the Debt Management Policy complies with Government Code Section 8855(i) in the notice of proposed sale filed pursuant to Government Code Section 8855.

Section 11. The officers and agents of the Authority are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution. Specifically and without limiting the foregoing, any Authorized Officer is authorized and directed to solicit and accept bids for bond insurance and, if applicable, a reserve account insurance policy, for the Bonds, provided such officer determines acceptance of the best bid will result in lower overall debt service or lower interest cost, and appropriate changes to each of the documents referenced herein to evidence such bond insurance, and, if applicable, a reserve account insurance policy, and the terms thereof, are hereby authorized and approved.

Anything to the contrary herein notwithstanding, in the event the Executive Director determines in consultation with the Municipal Advisor that the cost-efficient marketing of the Bonds requires creation of a funded reserve under the Indenture, each of the Indenture, Lease Agreement and other documents approved herein may be revised to reflect the funding of such a reserve. All actions

6 heretofore taken by the officers and agents of the Authority with respect to the transactions set forth above are hereby approved, confirmed and ratified.

Section 12. The Board of Directors hereby determines the potential environmental impacts resulting from the adoption of this Resolution have been adequately evaluated by previously adopted mitigated negative declarations, in accordance with the California Environmental Quality Act (CEQA), as authorized by CEQA Guidelines Section 15162. The Bonds will finance public improvement projects known as the Ramsay Renaissance Project and the Watsonville City Plaza Expansion and Revitalization Project. The Ramsay Renaissance Project was analyzed in an Initial Study/Mitigated Negative Declaration with a corresponding mitigation monitoring program that supported the City Council’s award of the construction contract at its meeting on March 26, 2024. The Plaza Expansion and Revitalization Project was analyzed in the Mitigated Negative Declaration and mitigation monitoring program for which the Notice of Determination (Document Number 027-19 NOD) was filed with the Santa Cruz County Clerk on December 20, 2019.

Section 13. This Resolution shall take effect from and after its date of adoption.

PASSED AND ADOPTED this __ day of May 2025.

Chair
ATTEST:

Secretary
APPROVED AS TO FORM:

Counsel

7 STATE OF CALIFORNIA )
) ss.

COUNTY OF SANTA CRUZ )
I, Irwin I. Ortiz, Secretary of the Board of Directors of the Watsonville Public Finance Authority, do hereby certify that the above and foregoing Resolution was duly and regularly adopted by the Board of Directors of said Authority and was signed by the Chair of said Board at a regular meeting held on the ____ day of May, 2025, and that it was so adopted by the following vote:

AYES: Directors
NOES: Directors
ABSENT: Directors
ABSTAIN: Directors
Secretary of the Watsonville Public Finance Authority

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EXHIBIT A

GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the Authority by the Authority’s Municipal Advisor, Urban Futures, Inc., in consultation with Samuel A. Ramirez, Inc., the Underwriter of the Bonds.

Principal Amount. The Municipal Advisor has informed the Authority that, based on the Authority’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be issued and sold is $13,000,000 (the “Estimated Principal Amount”).

True Interest Cost of the Bonds. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 3.47%.

Finance Charge of the Bonds. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $337,749.

Amount of Proceeds to be Received. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the Authority for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $12,000,000.

Total Payment Amount. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the Authority will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $14,625,108, which excludes any reserves or capitalized interest paid or funded with proceeds of the Bonds (which may offset such total payment amount).

The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds issued and sold being different from the Estimated Principal Amount, (c) the actual amortization of the Bonds being different than the

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amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, (f) alterations to the Authority’s financing plan, or a combination of such factors.

1 $___________

WATSONVILLE PUBLIC FINANCE AUTHORITY
LEASE REVENUE BONDS, SERIES 2025

BOND PURCHASE AGREEMENT
________, 2025
Watsonville Public Finance Authority
250 Main St.

Watsonville, CA 95076
City of Watsonville
250 Main St.

Watsonville, CA 95076
Ladies and Gentlemen:

The undersigned Samuel A. Ramirez & Co., Inc. (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (which, together with Exhibit A, is referred to as this “Purchase Agreement”) with the Watsonville Public Finance Authority (the “Authority”) and the City of Watsonville (the “City”), which, upon the acceptance by the Authority and the City, will be binding upon the parties hereto. By execution of this Purchase Agreement, the Authority, the City and the Underwriter acknowledge the terms hereof and recognize that they will be bound by certain of the provisions hereof, and to the extent binding thereupon, acknowledge and agree to such terms. This offer is made subject to acceptance by the Authority and by the City by the execution of this Purchase Agreement and delivery of the same to the Underwriter prior to 11:59 P.M., Pacific time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Authority and the City at any time prior to the acceptance hereof by the Authority and the City. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Indenture (defined herein).

The City and Authority acknowledge and agree that: (i) the purchase and sale of the Bonds (defined herein), pursuant to this Purchase Agreement is an arm’s-length commercial transaction between the City and the Authority, on one hand, and the Underwriter, on the other; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended); (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City or the Authority with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City or the Authority on other matters); (iv) the Underwriter has financial and other interests that differ from those of the City and the Authority; and (v) the City and the Authority have consulted their own legal, financial and other advisors to the extent they have deemed appropriate.

2 Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements herein set forth, the Underwriter hereby agrees to purchase from the Authority, and the Authority hereby agrees to issue, sell and deliver to the Underwriter all (but not less than all) of the Watsonville Public Finance Authority Lease Revenue Bonds, Series 2025 (the “Bonds”). The Bonds will be dated as of their date of delivery. Interest on the Bonds shall be payable semiannually in each year on May 1 and November 1, commencing November 1, 2025 (each an “Interest Payment Date”), and will bear interest at the rates and on the dates as set forth in Exhibit A attached hereto.

The purchase price for the Bonds shall be $______ (which represents the principal amount of the Bonds, plus a net original issue premium in the amount of $______, less an Underwriter’s discount of $______) (the “Purchase Price”).

The Underwriter agrees to make a bona fide public offering of the Bonds at the initial offering yields set forth in the Official Statement (defined herein); however, the Underwriter reserves the right to make concessions to dealers and to change such initial offering yields as the Underwriter shall deem necessary in connection with the marketing of the Bonds. The Underwriter agrees that, in connection with the public offering and initial delivery of the Bonds to the purchasers thereof from the Underwriter, the Underwriter will deliver or cause to be delivered to each purchaser a copy of the final Official Statement prepared in connection with the Bonds, for the time period required under Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 15c2- 12”). Terms defined in the Official Statement are used herein as so defined.

Section 2. The Bonds. The Bonds shall be secured by revenues consisting primarily of base rental payments (the “Base Rental Payments”) to be paid by the City pursuant to the Lease Agreement, dated as of June 1, 2025 (the Lease Agreement”), by and between the Authority and the City. The Authority’s right to receive the Base Rental Payments due under the Lease Agreement and to exercise remedies upon default under such Lease Agreement shall be assigned to U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) for the benefit of the owners of the Bonds pursuant to an Assignment Agreement, dated as of June 1, 2025 (the “Assignment Agreement”), by and between the Authority and the Trustee. The Bonds shall be as described in and secured under and pursuant to an Indenture, dated as of June 1, 2025 (the “Indenture”), by and among the Authority, the City, and the Trustee. The Bonds will be subject to redemption as set forth in the Indenture and Official Statement herein described.

The Bonds are being issued to provide funds to: (i) finance a portion of the costs of the design, acquisition, construction and installation of certain public capital improvements to be located at [_____________], and related infrastructure improvements; and (ii) pay the costs incurred in connection with the issuance of the Bonds.

Section 3. Public Offering. The Underwriter agrees to make an initial public offering of all the Bonds at the public offering prices (or yields) set forth on Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth on Exhibit A attached hereto. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices.

3 Section 4. Establishment of Issue Price of the Bonds. (a) The Underwriter agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. (b) Except as otherwise set forth in Exhibit B, the Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Authority the price or prices at which it has sold to the public each maturity of Bonds.

If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Authority the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either (i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Authority or Bond Counsel. For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds.
(c) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A, except as otherwise set forth therein. Exhibit A also sets forth, as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”).

So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following: (i) the close of the 5th business day after the sale date; or (ii) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter will advise the Authority promptly after the close of the 5th business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

4 (d) The Underwriter confirms that:
(i) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(A)(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter,
(B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and
(C) to acknowledge that, unless otherwise advised by the dealer or brokerdealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(ii) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (e) The Authority acknowledges that, in making the representations set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Authority further

5 acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offeringprice rule, if applicable to the Bonds. (f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.

Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party, (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public),
(iii) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and
(iv) “sale date” means the date of execution of this Purchase Agreement by all parties.

Section 5. The Official Statement. By their acceptance of this Purchase Agreement, the Authority and the City ratify, confirm and approve of the use and distribution by the Underwriter prior to the date hereof of the Preliminary Official Statement relating to the Bonds, dated ______, 2025 (including the cover page, all appendices and all information incorporated therein and any supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially consistent with such physical form, the “Preliminary Official Statement”) that authorized officers of the City deemed “final” as of its date, for purposes of Rule 15c2-12 except for certain omissions permitted to be omitted therefrom by Rule 15c2-12. The Authority and the City hereby agree to deliver or cause to be delivered to the Underwriter, within seven (7) business days of the date hereof, copies of the final official statement, dated the date hereof, relating to the Bonds (including all information previously permitted to have been omitted by Rule 15c2-12, the cover page, all appendices, all information incorporated therein and any amendments or supplements as have been approved by the Authority, the City and the Underwriter (the “Official Statement”)) in such quantity as the Underwriter shall reasonably request to comply

6 with Securities and Exchange Commission Rule 15c2-12(b)(4) and the rules of the Municipal Securities Rulemaking Board (the “MSRB”).

The Underwriter hereby agrees that it will not request that payment be made by any purchaser of the Bonds prior to delivery by the Underwriter to the purchaser of a copy of the Official Statement. The Underwriter agrees to (i) provide the Authority and the City with final pricing information on the Bonds on a timely basis and (ii) promptly file a copy of the final Official Statement, including any supplements prepared by the Authority or the City with the MSRB on its Electronic Municipal Markets Access (“EMMA”) system at http://emma.msrb.org. The Authority and the City hereby approve of the use and distribution by the Underwriter of the final Official Statement in connection with the offer and sale of the Bonds. The Authority and the City will cooperate with the Underwriter in the filing by the Underwriter of the Official Statement with EMMA.

Section 6. Closing. At 8:00 a.m., California time, on [Closing Date], or at such other time or date as the Authority, the City and the Underwriter agree upon, the Authority shall deliver or cause to be delivered to the Trustee, and the Trustee shall deliver or cause to be delivered through the facilities of The Depository Trust Company, New York, New York (“DTC”), the Bonds in definitive form, duly executed and authenticated. Concurrently with the delivery of the Bonds, the Authority and the City shall deliver the documents hereinafter mentioned at the offices of Anzel Galvan LLP, San Francisco, California or another place to be mutually agreed upon by the Authority, the City and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer in immediately available funds. This payment for and delivery of the Bonds, together with the delivery of the aforementioned documents referenced herein, is called the “Closing.”
The Bonds shall be registered in the name of Cede & Co., as nominee of DTC in denominations of five thousand dollars ($5,000) or any integral multiple thereof, and shall be made available to the Underwriter at least one (1) business day before the Closing for purposes of inspection and packaging. The Authority and the City acknowledge that the services of DTC will be used initially by the Underwriter to permit the issuance of the Bonds in book-entry form, and agree to cooperate fully with the Underwriter in employing such services.

Section 7. Representations, Warranties and Covenants of the Authority. The Authority represents, warrants and covenants to the Underwriter and the City that:
(a) The Authority is and will be at the date of Closing a joint exercise of powers authority organized and existing under the laws of the State of California, including Section 6500 et seq. of the California Government Code (the “JPA Act”) with all necessary power and authority to enter into and perform its duties under the Ground Lease, dated as of June 1, 2025 (the “Ground Lease”), by and between the City and the Authority, the Lease Agreement, the Indenture, the Assignment Agreement and this Purchase Agreement. The Ground Lease, Lease Agreement, Indenture, Assignment Agreement and this Purchase Agreement are collectively referred to herein as the “Authority Documents”.
(b) The Authority has complied with all filing requirements of the JPA Act. (c) By official action of the Authority prior to or concurrently with the acceptance hereof, the Authority has duly approved the distribution of the Preliminary Official Statement and the distribution of the Official Statement (including in electronic form), and has duly

7 authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained, in the Authority Documents. When executed and delivered, each Authority Document will constitute the legal, valid and binding obligation of the Authority enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally.
(d) Prior to the date hereof, the Authority has provided to the Underwriter for its review the Preliminary Official Statement that an authorized officer of the Authority has deemed final for purposes of Rule 15c2-12, has approved the distribution of the Preliminary Official Statement and the Official Statement and has duly authorized the execution and delivery of the Official Statement (including in electronic form). The Preliminary Official Statement, at the date thereof, did not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its bookentry system, as to which no view is expressed), in light of the circumstances under which they were made, not misleading. At the date hereof and on the Closing, the final Official Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its book-entry system, as to which no view is expressed), in light of the circumstances under which they were made, not misleading.
(e) To the knowledge of the undersigned officer of the Authority, the execution and delivery by the Authority of the Authority Documents and the approval and execution by the Authority of the Official Statement and compliance with the provisions on the Authority’s part contained in the Authority Documents, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject to, which conflict, breach or default has or may have a material adverse effect on the ability of the Authority to carry out its obligations under the Authority Documents, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any material lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the Authority under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument, except as provided by the Authority Documents.
(f) The Authority will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement. The Authority will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds.
(g) To the knowledge of the undersigned officer of the Authority, the Authority is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument, in each case which breach or default has or may have a material adverse effect on the ability of the Authority to perform its obligations under the Authority Documents.

8 (h) As of the time of acceptance hereof and as of the date of Closing, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, is pending or, to the knowledge of the officers of the Authority, threatened (i) in any way questioning the corporate existence of the Authority or the titles of the officers of the Authority to their respective offices, (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the execution or delivery of any of the Bonds, or in any way contesting or affecting the validity of the Bonds or the Authority Documents or the consummation of the transactions contemplated thereby, or contesting the exclusion of the interest on the Bonds from gross income for federal income tax purposes or contesting the powers of the Authority to enter into the Authority Documents or (iii) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clause (i) through (iii) of this sentence.
(i) Any certificate signed by any officer of the Authority authorized to execute such certificate in connection with the issuance, sale and delivery of the Bonds and delivered to the Underwriter shall be deemed a representation and warranty of the Authority to the Underwriter and the City as to the statements made therein but not of the person signing such certificate.

Section 8. Representations, Warranties and Covenants of the City. The City represents, warrants and covenants to the Underwriter and the Authority that:
(a) The City is and will be at the date of Closing a charter city and municipal corporation duly organized and existing pursuant to and under the Constitution and laws of the State of California and has all necessary power and authority to enter into and perform its duties under the Continuing Disclosure Certificate relating to the Bonds (the “Continuing Disclosure Certificate”), the Indenture, the Ground Lease, the Lease Agreement and this Purchase Agreement (together, the “City Documents” and, together with the Authority Documents, the “Legal Documents”) and has by official action duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in the City Documents for the purpose of refinancing the Prior Certificates.
(b) By official action of the City prior to or concurrently with the acceptance hereof, the City has duly approved the distribution of the Preliminary Official Statement and the distribution of the Official Statement (including in electronic form), and has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained, in the City Documents. When executed and delivered, each City Document will constitute the legally valid and binding obligation of the City enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally. (c) The Preliminary Official Statement heretofore delivered to the Underwriter is hereby deemed final by the City as of its date and as of the date hereof, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(i) of Rule 15c2-12.

The Preliminary Official Statement, at the date thereof, did not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its book-entry system, as to which no view is expressed), in the

9 light of the circumstances under which they were made, not misleading. At the date hereof and on the Closing, the final Official Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its book-entry system, as to which no view is expressed), in the light of the circumstances under which they were made, not misleading. (d) To the knowledge of the undersigned officer of the City, the execution and delivery by the City of the City Documents and the approval by the City of the Official Statement and compliance with the provisions on the City’s part contained in the City Documents, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject to, which conflict, breach or default has or may have a material adverse effect on the ability of the City to carry out its obligations under the City Documents, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any material lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the City under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument, except as provided by the City Documents. (e) The City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental Authority prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (f) To the knowledge of the undersigned officer of the City, after reasonable inquiry, the City is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument, in each case which breach or default has or may have a material adverse effect on the ability of the City to perform its obligations under the City Documents. (g) The financial statements relating to the receipts, expenditures and cash balances of the City as of June 30, 2024 as set forth in the Official Statement fairly represent the revenues, expenditures and fund balances of the General Fund. Except as disclosed in the Preliminary Official Statement, the Official Statement or otherwise disclosed in writing to the Underwriter, there has not been any materially adverse change in the financial condition of the General Fund or in its operations since June 30, 2024 and, except as disclosed in the Preliminary Official Statement, the Official Statement or otherwise disclosed in writing to the Underwriter, there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change.
(h) As of the time of acceptance hereof and as of the date of Closing, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, is pending or, to the knowledge of the officers of the City, threatened (i) in any way questioning the corporate existence of the City or the titles of the officers of the City to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the execution or delivery of any of the Bonds, or in any way contesting or affecting the validity of the Bonds or the City Documents or the consummation of the transactions contemplated thereby, or

10 contesting the exclusion of the interest on the Bonds from gross income for federal income tax purposes or contesting the power of the City to enter into the City Documents; (iii) which may result in any material adverse change to the financial condition of the City or to its ability to pay the Base Rental Payments when due; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clause (i) through (iv) of this sentence.
(i) To the extent required by law, the City will undertake, pursuant to the Continuing Disclosure Certificate, to provide annual reports and notices of certain events. A description of this undertaking is set forth as an appendix to the Preliminary Official Statement and will also be set forth in an appendix to the final Official Statement. Except as otherwise disclosed in the Preliminary Official Statement and the Official Statement, the City has never failed to comply in all material respects with any previous undertakings with regard to Rule 15c2-12 to provide annual reports or notices of enumerated events with respect to the last five years. (j) Any certificate signed by any officer of the City authorized to execute such certificate in connection with the issuance, sale and delivery of the Bonds and delivered to the Underwriter shall be deemed a representation and warranty of the City to the Underwriter and the Authority as to the statements made therein but not of the person signing such certificate. (k) As of the date hereof, the City does not have any material obligations secured by payments from the General Fund of the City, except as disclosed in the Preliminary Official Statement and the Official Statement.

Section 9. Conditions to the Obligations of the Underwriter. The Underwriter has entered into this Purchase Agreement in reliance upon the representations and warranties of the Authority and the City contained herein. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the date of the Closing shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the statements of the officers and other officials of the Authority and of the City, as well as authorized representatives of Bond Counsel, the Trustee, Disclosure Counsel and the municipal advisor made in any Bonds or other documents furnished pursuant to the provisions hereof; to the performance by the Authority and the City of their obligations to be performed hereunder at or prior to the date of the Closing; and to the following additional conditions:
(a) The representations, warranties and covenants of the City and the Authority contained herein shall be true, complete and correct at the date hereof and at the time of the Closing, as if made on the date of the Closing;
(b) At the time of Closing, the Legal Documents shall be in full force and effect as valid and binding agreements between or among the various parties thereto, and the Legal Documents and the Official Statement shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter, and all such reasonable actions as, in the opinion of Bond Counsel, shall reasonably deem necessary in connection with the transactions contemplated hereby;

11 (c) At the time of the Closing, no default shall have occurred or be existing under the Authority Documents, the City Documents, or any other agreement or document pursuant to which any of the City’s financial obligations were executed and delivered, and the City shall not be in default in the payment of principal or interest with respect to any of its financial obligations, which default would adversely impact the ability of the City to make the Base Rental Payments; (d) In recognition of the desire of the Authority, the City and the Underwriter to effect a successful public offering of the Bonds, and in view of the potential adverse impact of any of the following events on such a public offering, this Purchase Agreement shall be subject to termination in the absolute discretion of the Underwriter by notification, in writing, to the Authority and the City prior to delivery of and payment for the Bonds, if at any time prior to such time, regardless of whether any of the following statements of fact were in existence or known of on the date of this Purchase Agreement:
(i) any event shall occur which makes untrue any statement or results in an omission to state a material fact necessary to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading, which event, in the reasonable opinion of the Underwriter would materially or adversely affect the ability of the Underwriter to market the Bonds; (ii) the marketability of the Bonds or the market price thereof, in the opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States or by any legislation in or by the Congress of the United States or by the State of California, or the amendment of legislation pending as of the date of this Purchase Agreement in the Congress of the United States, or the recommendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or the proposal for consideration of legislation by either such Committee or by any member thereof, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or any decision of any federal or state court or any ruling or regulation (final, temporary or proposed) or official statement on behalf of the United States Treasury Department, the Internal Revenue Service or other federal or State authority affecting the federal or State tax status of the Authority or the City, or the interest on or with respect to bonds or notes (including the Bonds); (iii) any proceeding shall be pending or threatened by the Securities and Exchange Commission against the Authority or the City;
(iv) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State of California, or a decision by any court of competent jurisdiction within the State of

12 California shall be rendered which materially adversely affects the market price of the Bonds;
(v) an order, decree or injunction issued by any court of competent jurisdiction, or order, ruling, regulation (final, temporary or proposed), official statement or other form of notice or communication issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that: (i) obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended; or (ii) the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby or by the Official Statement, is or would be in violation of the federal securities laws as amended and then in effect; (vi) a decision by a court of the United States shall be rendered, or a stop order, release, regulation or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made, to the effect that the issuance, offering or sale of the Bonds, including the underlying obligations as contemplated by this Bond Purchase Agreement or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act, the Exchange Act and the Trust Indenture Act;
(vii) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, to the effect that obligations of the general character of the Bonds, or the Bonds are not exempt from registration under or other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; (viii) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any domestic governmental authority or by any domestic national securities exchange, which are material to the marketability of the Bonds;
(ix) there shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (2) any other calamity or crisis in the financial markets of the United States or elsewhere or the escalation of such calamity or crisis;
(x) a general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of

13 determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction;
(xi) the New York Stock Exchange or other national securities exchange, or any governmental or regulatory authority, shall impose, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of the Underwriter; (xii) any rating of the Bonds or the rating of any obligations of the City secured by the City’s general fund shall have been downgraded, suspended or withdrawn by a national rating service, which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; (xiii) a general banking moratorium shall have been established by federal or State authorities;
(xiv) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; or
(xv) the commencement of any action, suit or proceeding described in Section 7(h) or Section 8(h).
(e) At or prior to the Closing, the Underwriter shall receive the following documents, in each case to the reasonable satisfaction in form and substance of the Underwriter:
(i) all resolutions relating to the Bonds adopted by the Authority and certified by an authorized official of the Authority authorizing the issuance of the Bonds, the Authority Documents and the Official Statement; (ii) all resolutions relating to the Bonds adopted by the City and certified by an authorized official of the City authorizing the execution and delivery of the City Documents and the issuance of the Bonds and the Official Statement; (iii) the Legal Documents duly executed and delivered by the respective parties thereto, with only such amendments, modifications or supplements as may have been agreed to in writing by the Underwriter;
(iv) the approving opinion of Bond Counsel, dated the date of Closing and addressed to the Authority and the City, in substantially the form attached as Appendix D to the Official Statement, and a reliance letter thereon addressed to the Underwriter;
(v) a supplemental opinion of Bond Counsel dated the date of Closing and addressed to the Underwriter, in substantially the form attached hereto as Exhibit C;
(vi) the Official Statement, executed on behalf of the Authority and the City;

14 (vii) evidence that the rating on the Bonds is as described in the Official Statement;
(viii) a certificate, dated the date of Closing, signed by a duly authorized officer of the Authority satisfactory in form and substance to the Underwriter to the effect that: (A) the representations, warranties and covenants of the Authority contained in this Purchase Agreement are true and correct in all material respects on and as of the date of Closing with the same effect as if made on the date of the Closing by the Authority, and the Authority has complied with all of the terms and conditions of this Purchase Agreement required to be complied with by the Authority at or prior to the date of Closing; (B) to such officer’s knowledge, no event affecting the Authority has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (C) the information and statements contained in the Official Statement (other than information relating to DTC and its book-entry system) did not as of its date and do not as of the Closing contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; and (D) to its knowledge, the Authority is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject, which would have a material adverse impact on the Authority’s ability to perform its obligations under the Authority Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument; (ix) a certificate, dated the date of Closing, signed by a duly authorized officer of the City satisfactory in form and substance to the Underwriter to the effect that: (A) the representations, warranties and covenants of the City contained in this Purchase Agreement are true and correct in all material respects on and as of the date of Closing with the same effect as if made on the date of the Closing by the City, and the City has complied with all of the terms and conditions of the Purchase Agreement required to be complied with by the City at or prior to the date of Closing; (B) to such officer’s knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (C) the information and statements contained in the Official Statement (other than information relating to DTC and its book-entry system) did not as of its date and do not as of the Closing contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; (D) to its knowledge after reasonable investigation, the City is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement (including but not limited to

15 the Lease Agreement) or other instrument to which the City is a party or is otherwise subject, which would have a material adverse impact on the City’s ability to perform its obligations under the City Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument; and (E) no further consent is required for inclusion of its audited financial statements in the Official Statement;
(x) an opinion dated the date of Closing and addressed to the Underwriter, the Trustee and Bond Counsel, of the City Attorney of the City, as counsel to the Authority, to the effect that:
(A) the Authority is a joint exercise of powers authority organized and existing under the laws of the State of California; (B) the resolution of the Authority approving and authorizing the execution and delivery of the Authority Documents, the Bonds and the Official Statement and other actions of the Authority was duly adopted at a meeting of the governing body of the Authority which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the resolution is now in full force and effect and has not been amended or superseded in any way; (C) to the knowledge of such counsel there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or public body pending with respect to which the Authority has been served or, to such counsel’s knowledge, threatened against or affecting the Authority, except as may be disclosed in the Official Statement, which would materially adversely impact the Authority’s ability to complete the transactions contemplated by the Authority Documents, the Official Statement or any other document or certificate related to such transactions, restrain or enjoin the collection of Base Rental Payments with respect to the Lease Agreement, or in any way contesting or affecting the validity of the Bonds, the Official Statement, the Authority Documents or the transactions described in and contemplated thereby wherein an unfavorable decision, ruling or finding would materially adversely affect the validity and enforceability of the Bonds or the Authority Documents or in which a final adverse decision could materially adversely affect the operations of the Authority;
(D) the Authority Documents have been duly authorized, executed and delivered by the Authority, and (assuming due execution and delivery by parties other than the Authority) are valid, legal and binding agreements of the Authority enforceable in accordance with their terms, except that the rights and obligations under the Authority Documents are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of