31 Section 7.06 No Liability by the City to the Owners. Except for the payment when due of the Base Rental Payments and the performance of the other agreements and covenants required to be performed by it contained in the Lease Agreement, the Ground Lease or herein, the City shall not have any obligation or liability to the Owners with respect to this Indenture or the preparation, execution, delivery or transfer of the Bonds or the disbursement of the Base Rental Payments by the Trustee to the Owners, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein.
Section 7.07 No Liability of the Trustee to the Owners. Except as expressly provided herein, the Trustee shall not have any obligation or liability to the Owners with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the Authority or the City of the other agreements and covenants required to be performed by them contained in the Lease Agreement, the Ground Lease or herein.
Section 7.08 Application of Amounts After Default. All payments received by the Trustee with respect to the rental of the Property after a default by the City pursuant to Article VII of the Lease Agreement (including, without limitation, any proceeds received in connection with the sale, assignment or sublease of the Authority’s right, title and interest in the Ground Lease), and all damages or other payments received by the Trustee for the enforcement of any rights and powers of the Trustee under Article VII of the Lease Agreement, shall be deposited into the Base Rental Payment Fund and as soon as practicable thereafter applied, together with all other funds held hereunder (except funds in the Rebate Fund):
(a) to the payment of all amounts due the Trustee under Article VIII hereof; (b) to the payment of all amounts then due for interest on the Bonds, in respect of which, or for the benefit of which, money has been collected (other than Bonds which have become payable prior to such event of default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of interest on such Bonds due and payable; and
(c) to the payment of all amounts then due for principal of the Bonds, in respect of which, or for the benefit of which, money has been collected (other than Bonds which have become payable prior to such event of default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of principal of such Bonds due and payable.
Section 7.09 Trustee May Enforce Claims Without Possession of Bonds. All rights of action and claims under this Indenture or the Bonds may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Owners in respect of which such judgment has been recovered.
Section 7.10 Limitation on Suits. No Owner of any Bond shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or Trustee, or for any other remedy hereunder, unless (a) such Owner shall have previously given written notice to the Trustee of a continuing event of default, (b) the Owners of not less than
32 25% of the aggregate principal amount of Bonds then Outstanding shall have made written request to the Trustee to institute proceedings in respect of such event of default in its own name as Trustee hereunder, (c) such Owner or Owners shall have afforded to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceedings, and (e) no direction inconsistent with such written request shall have been given to the Trustee during such 60 day period by the Owners of a majority of the aggregate principal amount of Bonds then Outstanding; it being understood and intended that no one or more Owners shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Owner, or to obtain or seek to obtain priority or preference over any other Owner or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Owners.
ARTICLE VIII
THE TRUSTEE
Section 8.01 Employment of the Trustee. The Authority hereby appoints and employs the Trustee to receive, deposit and disburse the Base Rental Payments, to authenticate, deliver and transfer the Bonds and to perform the other functions contained herein, all in the manner provided herein and subject to the conditions and terms hereof. By executing and delivering this Indenture, the Trustee accepts the appointment and employment hereinabove referred to and accepts the rights and obligations of the Trustee provided herein, subject to the conditions and terms hereof. Other than when an event of default has occurred and is continuing, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee. In case an event of default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. The Trustee hereby covenants and agrees that it will not encumber the Property other than in accordance with this Indenture or the Assignment Agreement.
Section 8.02 Duties, Removal and Resignation of the Trustee. The Authority shall remove the Trustee initially a party hereto and any successor thereto if at any time (a) requested to do so by an instrument or concurrent instruments in writing signed by the Owners of a majority of the aggregate principal amount of Bonds at the time Outstanding (or their attorneys duly authorized in writing), or (b) the Trustee shall cease to be eligible in accordance with the following sentence, and shall appoint a successor Trustee. The Trustee and any successor Trustee shall be: (i) a national banking association in good standing authorized to exercise trust powers or having the powers of a trust company and duly authorized to exercise trust powers within the State having a combined capital and surplus of at least $250,000,000, and subject to supervision or examination by federal or state authority, or (ii) a state-chartered commercial bank that is a member of the Federal Reserve System having at least $1,000,000,000 of assets. No removal, resignation or termination of the Trustee shall take effect until a successor, meeting the requirements above, shall be qualified and appointed. If such entity publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such entity shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.
33 The Authority shall provide 30 days written notice to the Trustee of the removal of the Trustee and the removal of the Trustee by the Authority shall be subject to such party not being in default under the transaction documents.
The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City and by giving notice, by first class mail, postage prepaid, of such resignation to the Owners at their addresses appearing on the Registration Books. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event the Authority does not appoint a successor Trustee within 30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of the Authority, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of a Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee.
Any corporation, association or agency into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such entity meets the combined capital and surplus requirements of this Section, ipso facto, shall be and become successor trustee under this Indenture and vested with all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.03 Compensation of the Trustee. The City shall from time to time, subject to any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for all its services rendered hereunder and reimburse the Trustee for all its reasonable advances and expenditures (which shall not include “overhead expenses” except as such expenses are included as a component of the Trustee’s stated annual fees) hereunder, including but not limited to advances to and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys retained by the Trustee, employed by it in the exercise and performance of its rights and obligations hereunder.
The Trustee may take whatever legal actions are lawfully available to it directly against the Authority or the City.
The City shall, to the extent permitted by law, indemnify and save the Trustee harmless against any loss, damage, liabilities, costs, claims or expenses, including those of its attorneys, which it may incur in the exercise and performance of its powers and duties hereunder, under the Lease Agreement, or in connection with any document or transaction contemplated hereunder or thereunder, including the enforcement of any remedies and the defense of any suit, and which are not due to its negligence or its willful misconduct as finally adjudicated by a court of competent jurisdiction. The duty of the City to indemnify the Trustee shall survive the termination and discharge of this Indenture and the earlier removal or resignation of the Trustee.
If the Trustee renders any service hereunder not provided for in this Indenture or related financing documents, or the Trustee is made a party to or intervenes in any litigation pertaining to this Indenture or related financing documents or institutes interpleader proceedings relative hereto, the Trustee shall be compensated reasonably by the Authority for such extraordinary services and
34 reimbursed for any and all claims, liabilities, losses, damages, fines, penalties, and expenses, including out-of-pocket and incidental expenses and legal fees and expenses occasioned thereby.
No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder. The Trustee may refuse to perform any duty or exercise any right or power which would require it to expend its own funds or risk any liability if it shall reasonably believe that repayment of such funds or adequate indemnity against such risk is not reasonably assured to it.
Upon an Event of Default, and only upon an Event of Default, the Trustee shall have a first lien with right of payment prior to payment on account of principal of and premium, if any, and interest on any Bond, upon the trust estate for the foregoing fees, charges and expenses incurred by it. When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law.
Section 8.04 Protection of the Trustee. The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice, request, requisition, resolution, statement, telegram, voucher, waiver or other paper or document which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Owners of the Bonds pursuant to this Indenture, unless such Owners shall have offered to the Trustee security or indemnity, reasonably satisfactory to the Trustee, against the reasonable costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Trustee may consult with counsel, who may be counsel to the Authority or the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect to any action taken or suffered by it hereunder in good faith in accordance therewith.
The Trustee shall not be responsible for the sufficiency of the Bonds or the Lease Agreement, or of the assignment made to it by the Assignment Agreement, or for statements made in any preliminary or final official statement or any other disclosure material prepared or distributed relating to the Bonds, or of the title to the Property. The Trustee shall have no responsibility for compliance with any state or federal securities laws in connection with the Bonds.
Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the City or a Written Certificate of the Authority, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it deems reasonable.
35 The Trustee may buy, sell, own, hold and deal in any of the Bonds and may join in any action which any Owner may be entitled to take with like effect as if the Trustee were not a party hereto. The Trustee, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Authority or the City, and may act as agent, depository or trustee for any committee or body of Owners or of owners of obligations of the Authority or the City as freely as if it were not the Trustee hereunder.
The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers hereof and perform any rights and obligations required of it hereunder either directly or by or through agents, attorneys, custodians, nominees or receivers appointed with due care, and shall be entitled to advice of counsel concerning all matters of trust and its rights and obligations hereunder, and the Trustee shall not be answerable for the negligence or misconduct of any such agent, attorney, custodian, nominee or receiver selected by it with reasonable care. The Trustee shall not be liable for any error of judgment made by it in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.
The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or for anything whatsoever in connection with the funds established hereunder, except only for its own willful misconduct, negligence or breach of an obligation hereunder.
The Trustee shall not be deemed to have knowledge of an event of default unless it has actual knowledge thereof.
The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which the Authority or the City is a party and which, in the opinion of the Trustee and its counsel, affects the Bonds or the security therefor, and shall do so if requested in writing by the Owners of at least 5% of the aggregate principal amount of Bonds then Outstanding, provided the Trustee shall have no duty to take such action unless it has been indemnified to its reasonable satisfaction against all risk or liability arising from such action.
The Trustee’s rights to immunities and protection from liability hereunder and its rights to payment of its fees and expenses shall survive its resignation or removal and final payment or defeasance of the Bonds.
All indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, officers, employees and agents of the Trustee.
The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty, and the Trustee shall not be answerable for other than its negligence or willful default. The Trustee shall have no responsibility or liability with respect to any information, statements or recitals in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of these Bonds. The Trustee shall not be accountable for the use or application by the Borrower of any of the Bonds or the proceeds thereof or for the use or application of any money paid over by the Trustee in accordance with the provisions of this Indenture or for the use and application of money received by any paying agent.
In no event shall the Trustee be responsible or liable for special, indirect, consequential, punitive or incidental loss or damage of any kind whatsoever (including, but not limited to, loss of
36 profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, pandemics, epidemics, recognized public emergencies, quarantine restrictions, nuclear or natural catastrophes or acts of God, interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services, and hacking, cyber-attacks, or other use or infiltration of the Trustee’s technological infrastructure exceeding authorized access; it being understood that the Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Indenture and related financing documents and delivered using Electronic Means; provided, however, that the Authority or the City, as applicable, shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Authority or the City, as applicable, whenever a person is to be added or deleted from the listing. If the Authority or the City, as applicable, elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Authority and the City understand and agree that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Authority and the City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Authority, the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Authority and/or the City, as applicable. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Authority and the City agree: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including, without limitation, the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Authority and/or the City, as applicable; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
In acting or omitting to act pursuant to the Lease Agreement or Ground Lease, the Trustee shall be entitled to all of the rights, immunities and indemnities accorded to it under this Indenture and the Lease Agreement, including, but not limited to, this Article VIII.
37 ARTICLE IX
MODIFICATION OR AMENDMENTS
Section 9.01 Modifications and Amendments Permitted.
(a) This Indenture and the rights and obligations of the Authority, the City, the Owners of the Bonds and the Trustee may be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into with the prior written consent of the Owners of a majority in aggregate principal amount of all Bonds then Outstanding, which shall have been filed with the Trustee. No such modification or amendment shall (i) extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or the rate of interest thereon, or extend the time of payment, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or (iii) permit the creation of any lien on the Base Rental Payments and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture or deprive the Owners of the Bonds of the lien created by this Indenture on such Base Rental Payments and other assets (except as expressly provided in this Indenture), without the consent of Owners of all of the Bonds then Outstanding. It shall not be necessary for the consent of the Bond Owners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. (b) This Indenture and the rights and obligations of the Authority, the City, the Trustee and the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into without the consent of any Bond Owners for any one or more of the following purposes:
(1) to add to the covenants and agreements of the Authority or the City in this Indenture contained other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority or the City; (2) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in this Indenture;
(3) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Sections 3.06 and 3.07 hereof; (4) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute; (5) to modify, amend or supplement this Indenture in such manner as to cause interest on the Bonds to be excludable from gross income for purposes of federal income taxation by the United States of America; and
38 (6) in any other respect whatsoever as the Authority and the City may deem necessary or desirable, provided that such modification or amendment does not materially adversely affect the interests of the Bond Owners hereunder. (c) Promptly after the execution by the Authority, the City and the Trustee of any Supplemental Indenture, the Trustee shall mail a notice (the form of which shall be furnished to the Trustee by the Authority), by first class mail postage prepaid, setting forth in general terms the substance of such Supplemental Indenture, to the Owners of the Bonds at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture. (d) No Supplemental Indenture shall modify any of the rights or obligations of the Trustee without the Trustee’s prior written consent.
The Authority or the City shall send copies of any Supplemental Indenture to any rating agency which maintains a rating with respect any Series of Bonds.
Section 9.02 Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the City, the Trustee and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
In executing, or accepting the additional trusts created by any supplemental indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an opinion of counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and complies with the terms hereof.
Section 9.03 Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if the Authority so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand of the Owner of any Bonds Outstanding at the time of such execution and presentation of their Bonds for the purpose at the Office of the Trustee a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand of the Owners of any Bonds then Outstanding shall be exchanged at the Office of the Trustee, without cost to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amount of the same interest rate and maturity.
Section 9.04 Amendment of Particular Bonds. The provisions of this Article shall not prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such Owner.
39 ARTICLE X
DEFEASANCE
Section 10.01 Discharge of Indenture. If the Authority shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, then the Owners of such Bonds shall cease to be entitled to the pledge of the Base Rental Payments and the other assets as provided herein, and all agreements, covenants and other obligations of the Authority and the City to the Owners of such Bonds hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Authority and the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the City all money or securities held by it pursuant hereto which are not required for the payment of the principal of and interest and premium, if any, on such Bonds.
Subject to the provisions of the above paragraph, when any of the Bonds shall have been paid and if, at the time of such payment, the Authority and the City shall have kept, performed and observed all of the covenants and promises in such Bonds and in this Indenture required or contemplated to be kept, performed and observed by them on or prior to that time, then this Indenture shall be considered to have been discharged in respect of such Bonds and such Bonds shall cease to be entitled to the lien of this Indenture and such lien and all covenants, agreements and other obligations of the Authority and the City hereunder shall cease, terminate become void and be completely discharged as to such Bonds.
Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this Indenture in respect of any Bonds, those provisions of this Indenture relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, shall remain in effect and shall be binding upon the Trustee and the Owners of the Bonds and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of and interest and premium, if any, on the Bonds, to pay to the Owners of Bonds the funds so held by the Trustee as and when such payment becomes due. Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this Indenture in respect of any Bonds, those provisions of this Indenture relating to the compensation and indemnity of the Trustee shall remain in effect and shall be binding upon the Trustee, the City and the Authority.
Section 10.02 Bonds Deemed To Have Been Paid. If moneys shall have been set aside and held by the Trustee (or an escrow agent or other fiduciary) for the payment or redemption of any Bonds and the interest thereon at the maturity or redemption date thereof, such Bonds shall be deemed to have been paid within the meaning and with the effect provided in Section 10.01 hereof. Any Outstanding Bonds shall, prior to the maturity date or redemption date thereof, be deemed to have been paid within the meaning of and with the effect expressed in Section 10.01 hereof if (a) in case any of such Bonds are to be redeemed on any date prior to their maturity date, the Authority shall have given to the Trustee in form satisfactory to it irrevocable instructions to mail, on a date in accordance with the provisions of Section 4.02 hereof, notice of redemption of such Bonds on said redemption date, said notice to be given in accordance with Section 4.02 hereof, (b) there shall have been deposited with the Trustee (or an escrow agent or other fiduciary) either (i) money in an amount which shall be sufficient, or
40 (ii) Federal Securities that are not subject to redemption other than at the option of the holder thereof, the interest on and principal of which when paid will provide money which, together with the money, if any deposited or on deposit with the Trustee at the same time, shall, as verified by an independent certified public accountant, be sufficient to pay when due the interest to become due on such Bonds on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and premium, if any, on such Bonds, and (c) in the event such Bonds are not by their terms subject to redemption within the next succeeding 60 days, the Authority shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable, a notice to the owners of such Bonds that the deposit required by clause (b) above has been made with the Trustee (or an escrow agent or other fiduciary) and that such Bonds, are deemed to have been paid in accordance with this Section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and premium, if any, on such Bonds.
Section 10.03 Payment of Bonds After Discharge of Indenture. Notwithstanding any provisions of this Indenture, to the extent permitted by law, any moneys held by the Trustee in trust for the payment of the principal of, or premium or interest on, any Bonds and remaining unclaimed for two years after the date of deposit of such moneys, shall be repaid to the Authority (without liability for interest) free from the trusts created by this Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee may (at the cost of the Authority) first mail, by first class mail postage prepaid, to the Owners of Bonds which have not yet been paid, at the respective addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof. Any money held by the Trustee pursuant to this paragraph shall be held uninvested and without any liability for interest.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Benefits of Indenture Limited to Parties. Nothing contained herein, expressed or implied, is intended to give to any person other than the Authority, the City, the Trustee and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition, covenant or term required herein to be observed or performed by or on behalf of the Authority or the City shall be for the sole and exclusive benefit of the Trustee and the Owners.
Section 11.02 Successor Deemed Included in all References to Predecessor. Whenever the Authority, the City or the Trustee, or any officer thereof, is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Authority, the City or the Trustee, or such officer, and all agreements, conditions, covenants and terms required hereby to be observed or performed by or on behalf of the Authority, the City or the Trustee, or any officer thereof, shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.
Section 11.03 Execution of Documents by Owners. Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any
41 notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the person signing such declaration, request or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer, or by such other proof as the Trustee may accept which it may deem sufficient.
The ownership of any Bonds and the amount, payment date, number and date of owning the same may be proved by the Registration Books.
Any declaration, request or other instrument in writing of the Owner of any Bond shall bind all future Owners of such Bond with respect to anything done or suffered to be done by the Authority, the City or the Trustee in good faith and in accordance therewith.
Section 11.04 Waiver of Personal Liability. Notwithstanding anything contained herein to the contrary, no member, officer or employee of the Authority or the City shall be individually or personally liable for the payment of any moneys, including without limitation, the principal of or interest on the Bonds, but nothing contained herein shall relieve any member, officer or employee of the City or the Authority from the performance of any official duty provided by any applicable provisions of law, by the Lease Agreement or hereby.
Section 11.05 Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the Authority of any Bonds, the Trustee may, in lieu of such cancellation and delivery, destroy such Bonds.
Section 11.06 Funds and Accounts. Any fund or account required to be established and maintained herein by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund, but all such records with respect to all such funds and accounts shall at an times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Bonds and the rights of the Owners.
The Trustee may commingle any of the moneys held by it hereunder for investment purposes only; provided, however, that the Trustee shall account separately for the moneys in each fund or account established pursuant to this Indenture. The Trustee may establish such funds and accounts as it deems necessary or appropriate to perform its obligations hereunder.
Section 11.07 Article and Section Headings Gender and References. The singular form of any word used herein, including the terms defined in Section 1.01 hereof, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. All references herein to “Articles,” “Sections,” subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, subsection or clause thereof.
42 Section 11.08 Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Authority, the City or the Trustee shall be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or terms shall be null and void to the extent contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof or of the Bonds, and the Owners shall retain all the benefit, protection and security afforded to them under any applicable provisions of law.
The Authority, the City and the Trustee hereby declare that they would have executed this Indenture, and each and every Article, Section, paragraph, subsection, sentence, clause and phrase hereof and would have authorized the execution and delivery of the Bonds pursuant hereto irrespective of the fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.
Section 11.09 Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are actually known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination; except that, in determining whether the Trustee shall be protected in relying upon any such demand, request, direction, consent or waiver of an Owner, only Bonds which the Trustee actually knows to be owned or held by or for the account of the Authority or the City, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City, shall be disregarded unless all Bonds are so owned or held, in which case such Bonds shall be considered Outstanding for the purpose of such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Authority and the City shall specify in a Written Certificate of the City and Authority those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such Certificate.
Section 11.10 Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, principal or premium due on any date with respect to particular Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.03 hereof but without any liability for interest thereon.
Section 11.11 Payment on Non-Business Days. In the event any payment is required to be made hereunder on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day with the same effect as if made on such non-Business Day.
Section 11.12 California Law. This Indenture shall be construed and governed in accordance with the laws of the State of California.
43 Section 11.13 Notices. All written notices to be given hereunder shall be given by mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the City: City of Watsonville
250 Main Street
Watsonville, California 95076
Attention: Tamara Vides, City Manager
If to the Authority: Watsonville Public Finance Authority c/o City of Watsonville
250 Main Street
Watsonville, California 95076
Attention: Tamara Vides, Executive Director
If to the Trustee: U.S. Bank Trust Company, National Association [_________]
Attention: [_________]
Ref: [_________]
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, upon the sender’s receipt of an appropriate answer back or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section.
Section 11.14 Notice to Rating Agencies. The Trustee shall provide S&P, if the Bonds are then rated by S&P, and Moody’s, if the Bonds are then rated by Moody’s, with prompt notice of any substitution or release of property pursuant to Section 10.03 of the Lease Agreement.
Section 11.15 Execution in Counterparts. This Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Authority and the City have caused this Indenture to be signed in their respective names by their representative thereunto duly authorized, and the Trustee, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.
WATSONVILLE PUBLIC FINANCE
AUTHORITY
By:
TAMARA VIDES
EXECUTIVE DIRECTOR
ATTEST:
By:
IRWIN I. ORTIZ
SECRETARY OF THE BOARD
CITY OF WATSONVILLE
By:
TAMARA VIDES
CITY MANAGER
ATTEST:
By:
IRWIN I. ORTIZ
CITY CLERK
APPROVED AS TO FORM:
City Attorney
[SIGNATURES CONTINUED ON NEXT PAGE.]
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[SIGNATURE PAGE CONTINUED.]
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By:
Authorized Officer
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EXHIBIT A
FORM OF SERIES 2025 BOND
No. ____ $___________
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE TRUSTEE FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
WATSONVILLE PUBLIC FINANCE AUTHORITY
LEASE REVENUE BOND,
SERIES 2025
INTEREST RATE MATURITY DATE DATED DATE CUSIP
______% May 1, 20__ June [___], 2025
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: _________________________ THOUSAND DOLLARS The Watsonville Public Finance Authority (the “Authority”), for value received, hereby promises to pay, solely from the Base Rental Payments (as hereinafter defined) or amounts in certain funds and accounts held under the Indenture (as hereinafter defined), to the Registered Owner identified above or registered assigns (the “Registered Owner”); on the Maturity Date identified above or on any earlier redemption date, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Interest Rate identified above in like lawful money from the date hereof payable semiannually on May 1 and November 1 in each year, commencing November 1, 2025 (the “Interest Payment Dates”), until payment of such Principal Amount in full.
This Bond shall bear interest from the Interest Payment Date next preceding the date of authentication of this Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the close of business on the fifteenth calendar day of the month next preceding such Interest Payment Date, whether or not such day is a Business Day, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to October 15, 2025, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, interest on this Bond shall be payable from the date to which interest hereon has been paid in full, payable on each Interest Payment Date).
The Principal Amount hereof is payable upon surrender hereof upon maturity or earlier redemption at the Office of the Trustee (as hereinafter defined). Interest hereon is payable by wire or check of U.S.
Bank Trust Company, National Association, as Trustee (the “Trustee”), mailed by first class mail, postage prepaid, on each Interest Payment Date to the Registered Owner hereof at the address of the
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Registered Owner shown on the Registration Books at the close of business on the fifteenth calendar day of the month next preceding such Interest Payment Date. “Office of the Trustee” means the principal corporate trust office of the Trustee in San Francisco, California, or such other office as may be specified to the Authority and the City of Watsonville (the “City”) by the Trustee in writing, except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the office or the agency of the Trustee at which, at any particular time, its corporate trust agency shall be conducted as specified to the Authority and the City by the Trustee in writing.
This Bond is one of a series of a duly authorized issue of bonds issued for the purpose of financing the Project (as defined in the Indenture), and is one of the series of bonds designated “Watsonville Public Finance Authority Lease Revenue Bonds, Series 2025” (the “Series 2025 Bonds”) in the aggregate principal amount of $[PAR]. The Series 2025 Bonds are issued pursuant to the Indenture, dated as of June 1, 2025 (the “Indenture”), by and among the Authority, the City and the Trustee, and this reference incorporates the Indenture herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Indenture, additional bonds (“Additional Bonds”), may be issued by the Authority secured by a lien on a parity with the lien on Base Rental Payments and amounts in certain funds and accounts held under the Indenture securing the Series 2025 Bonds. The Series 2025 Bonds and any Additional Bonds are collectively referred to as the “Bonds.” The Indenture is entered into, and this Bond is issued under, the Marks-Roos Local Bond Pooling Act of 1985 (the “Act”) and the laws of the State of California.
Pursuant to the Indenture, the principal of and interest on the Bonds are payable solely from certain base rental payments (the “Base Rental Payments”) under and pursuant to that certain Lease Agreement, dated as of June 1, 2025 (the “Lease Agreement”), by and between the City, as lessee, and the Authority, as lessor, all of which rights to receive such Base Rental Payments have been assigned without recourse by the Authority to the Trustee. Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, all of the Base Rental Payments and any other amounts (including proceeds of the sale of the Bonds) held in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund established under the Indenture are pledged to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of the Indenture and the Act.
Said pledge constitutes a first lien on such assets.
The Series 2025 Bonds are authorized to be issued in the form of fully registered bonds without coupons in denominations of $5,000 or any integral multiple thereof (“Authorized Denominations”).
The Series 2025 Bonds shall be subject to extraordinary redemption, in whole or in part, on any date, in Authorized Denominations, from and to the extent of any Net Insurance Proceeds received with respect to all or a portion of the Property, deposited by the Trustee in the Redemption Fund pursuant to the Indenture, at a Redemption Price equal to the principal amount of the Series 2025 Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.
The Series 2025 Bonds are not subject to optional redemption prior to maturity. [The Series 2025 Bonds maturing on May 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each May 1 on and after May 1, 20__, in integral multiples of $5,000 at a Redemption Price of the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:
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Sinking Fund Redemption Date
(May 1)
Principal Amount
To Be Redeemed
In the event of a partial redemption pursuant to the Indenture, the City shall provide the Trustee with a revised mandatory sinking fund schedule giving effect to the redemption so completed.] The Trustee on behalf and at the expense of the Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any Series 2025 Bonds designated for redemption at their respective addresses appearing on the Registration Books, to the Securities Depositories and to one or more Information Services, at least 20 but not more than 60 days prior to the date fixed for redemption. Such notice shall state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, the Series 2025 Bond numbers and the maturity or maturities (except in the event of redemption of all of the Series 2025 Bonds of such maturity or maturities in whole) of the Series 2025 Bonds to be redeemed, and shall require that such Series 2025 Bonds be then surrendered at the Office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Series 2025 Bonds will not accrue from and after the date fixed for redemption. Such notice may state that such redemption is conditioned upon sufficient funds being on deposit on the redemption date to redeem the Series 2025 Bonds so called for redemption. Such notice of redemption may also state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Series 2025 Bonds. Neither the failure to receive any notice so mailed, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Series 2025 Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.
Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, fully registered Series 2025 Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount and maturity of fully registered Series 2025 Bonds of other authorized denominations.
This Bond is transferable by the Registered Owner hereof, in person or by his duly authorized attorney, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Series 2025 Bond or Series 2025 Bonds, in Authorized Denominations, for the same aggregate principal amount will be issued to the transferee in exchange herefor. The Authority, the City and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority, the City and the Trustee shall not be affected by any notice to the contrary.
The Indenture and the rights and obligations of the Authority, the City, the owners of the Bonds and the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that no such modification or amendment shall (a) extend the fixed maturity of any Bonds, or reduce the principal thereof or the rate of interest thereon, or extend the time of payment, without the consent of the owner of each Bond so affected, or, (b) reduce the percentage of Bonds the consent of the owners of which is required to effect any such amendment or modification, or (c) permit the creation of any lien on the Base Rental Payments and
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other assets pledged under the Indenture prior to or on a parity with the lien created by the Indenture or deprive the owners of the Bonds of the lien created by the Indenture on such the Base Rental Payments and such other assets (except as expressly provided in the Indenture), without the consent of the owners of all Bonds then outstanding.
The Indenture contains provisions permitting the Authority to make provision for the payment of interest on, and the principal and premium, if any, of any of the Bond so that such Bonds shall no longer be deemed to be outstanding under the terms of the Indenture.
All obligations of the Authority under the Indenture and under the Bonds shall be special obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds.
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IN WITNESS WHEREOF, the Authority has caused this Bond to be signed in its name and on its behalf by the facsimile signatures of its Executive Director and Secretary, all as of the Dated Date identified above.
WATSONVILLE PUBLIC FINANCE AUTHORITY
By:
TAMARA VIDES
EXECUTIVE DIRECTOR
Attest:
IRWIN I. ORTIZ
SECRETARY OF THE BOARD
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[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]
This is one of the Series 2025 Bonds described in the within-mentioned Indenture and registered on the Registration Books.
Date: __________________, 2025 U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee
By:
Authorized Signatory
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[FORM OF ASSIGNMENT]
For value, received the undersigned hereby sells, assigns and transfers unto ____________________________________________ whose address and social security or other tax identifying number is ______________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) ____________________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.
Dated: ____________________
Signature Guaranteed:
Note: Signature(s) must be guaranteed by an eligible
guarantor in a Recognized Signature Guaranty
Medallion Program.
Note: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of
the within pond in every particular without alteration or enlargement or any change whatsoever.
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4865-0168-5958v12/202040-0002
EXHIBIT B
FORM OF PROJECT FUND REQUISITION
REQUISITION NO. _____ FOR
DISBURSEMENT FROM THE PROJECT FUND
The undersigned hereby states and certifies:
(i) that he/she is the duly appointed, qualified and acting ___________________ of the City of Watsonville, a charter city and municipal corporation duly organized and existing under and by virtue of the Constitution and laws of the State of California (the “City”), and as such, is familiar with the facts herein certified and is authorized to certify the same; (ii) that, pursuant to Section 3.05 of the Indenture, dated as of June 1, 2025 (the “Indenture”), by and among the Watsonville Public Finance Authority (the “Authority”), the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), related to the Authority’s Lease Revenue Bonds, Series 2025, the undersigned hereby requests the Trustee to disburse this date the following amounts from the Project Fund established under the Indenture, to the payees designated on the attached Exhibit A;
(iii) that each obligation mentioned herein has been incurred by the City and is a proper charge against the Project Fund; and
(iv) that there has not been filed with or served upon the City notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys payable to any of the payees named on the attached Exhibit A that has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or mechanics’ liens accruing by mere operation of law.
All capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Indenture.
Dated: ________________, 20__ CITY OF WATSONVILLE
By:
Its:
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4865-0168-5958v12/202040-0002
EXHIBIT A
PROJECT FUND DISBURSEMENTS
Item
Number Payee Name and Address
Purpose of
Obligation Amount
Agenda Version
RECORDING REQUESTED BY:
City of Watsonville
AND WHEN RECORDED RETURN TO:
Anzel Galvan LLP
595 Pacific Avenue, 4th Floor
San Francisco, California 94133
Attention: Juan M. Galvan
[Space above for Recorder’s use.]
THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE.
THE GRANTOR AND THE GRANTEE ARE GOVERNMENTAL AGENCIES.
GROUND LEASE
by and between
CITY OF WATSONVILLE
and
WATSONVILLE PUBLIC FINANCE AUTHORITY
Dated as of June 1, 2025
Relating to
$[PAR]
WATSONVILLE PUBLIC FINANCE AUTHORITY
LEASE REVENUE BONDS, SERIES 2025
GROUND LEASE
THIS GROUND LEASE (this “Ground Lease”), executed and entered into as of June 1, 2025, is by and between the CITY OF WATSONVILLE (the “City”), a charter city and municipal corporation duly organized and existing under and by virtue of the Constitution and laws of the State of California, as lessor, and the WATSONVILLE PUBLIC FINANCE AUTHORITY (the “Authority”), a joint exercise of powers authority duly organized and existing under the laws of the State of California, as lessee.
WITNESSETH:
WHEREAS, the City and the Authority desire to finance all or a portion 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 and the Authority 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” (the “Series 2025 Bonds”) for the purpose of financing the Project;
WHEREAS, to facilitate the issuance of the Series 2025 Bonds, the City will lease certain real property described in Exhibit A attached hereto and the improvements located thereon (the “Property”) to the Authority pursuant to this Ground Lease and the City will sublease the Property back from the Authority pursuant to the Lease Agreement dated as of the date hereof (the “Lease Agreement”);
WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide the funds necessary to finance all or a portion of the Project through the issuance by the Authority of the Series 2025 Bonds payable from the base rental payments (the “Base Rental Payments”) to be made by the City under the Lease Agreement; WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide for the issuance of such bonds payable from the Base Rental Payments pursuant to an Indenture, dated as of the date hereof, by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”); WHEREAS, all rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof (the “Assignment Agreement”);
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Ground Lease do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Ground Lease;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows:
2 ARTICLE I
DEFINITIONS
Except as otherwise defined herein, or unless the context clearly otherwise requires, words and phrases defined in the Lease Agreement shall have the same meaning in this Ground Lease.
ARTICLE II
LEASE OF THE PROPERTY; RENTAL
Section 2.01 Lease of Property. The City hereby leases to the Authority, and the Authority hereby leases from the City, for the benefit of the Owners of the Bonds, the Property, subject only to Permitted Encumbrances, to have and to hold for the term of this Ground Lease.
Section 2.02 Rental. The Authority shall pay to the City as and for rental of the Property hereunder, the sum of $1.00, the receipt of which is hereby acknowledged.
ARTICLE III
QUIET ENJOYMENT
The parties intend that the Property will be leased back to the City pursuant to the Lease Agreement for the term thereof. It is further intended that, to the extent provided herein and in the Lease Agreement, if an event of default occurs under the Lease Agreement, the Authority, or its assignee, will have the right, for the then remaining term of this Ground Lease to (a) take possession of the Property, subject to Permitted Encumbrances, (b) if it deems it appropriate, cause an appraisal of the Property and a study of the then reasonable use thereof to be undertaken, and/or (c) relet the Property. Subject to any rights the City may have under the Lease Agreement (in the absence of an event of default) to possession and enjoyment of the Property, the City hereby covenants and agrees that it will not take any action to prevent the Authority from having quiet and peaceable possession and enjoyment of the Property during the term hereof and will, at the request of the Authority and at the City’s cost, to the extent that it may lawfully do so, join in any legal action in which the Authority asserts its right to such possession and enjoyment.
ARTICLE IV
SPECIAL COVENANTS AND PROVISIONS
Section 4.01 Waste. The Authority agrees that at all times that it is in possession of the Property, it will not commit, suffer or permit any waste on the Property, and that it will not willfully or knowingly use or permit the use of the Property for any illegal purpose or act.
Section 4.02 Further Assurances and Corrective Instruments. The City and the Authority agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Property hereby leased or intended so to be or for carrying out the expressed intention of this Ground Lease, the Indenture and the Lease Agreement.
3 Section 4.03 Waiver of Personal Liability. All liabilities under this Ground Lease on the part of the Authority shall be solely liabilities of the Authority as a joint exercise of powers authority, and the City hereby releases each and every member, director, officer, agent and employee of the Authority from any personal or individual liability under this Ground Lease. No member, director, officer, agent or employee of the Authority shall at any time or under any circumstances be individually or personally liable under this Ground Lease to the City or to any other party whomsoever for anything done or omitted to be done by the Authority hereunder.
All liabilities under this Ground Lease on the part of the City shall be solely liabilities of the City as a public corporation, and the Authority hereby releases each and every member, officer and employee of the City from any personal or individual liability under this Ground Lease. No member, officer or employee of the City shall at any time or under any circumstances be individually or personally liable under this Ground Lease to the Authority or to any other party whomsoever for anything done or omitted to be done by the City hereunder.
Section 4.04 Taxes. The City covenants and agrees to pay any and all assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Property.
Section 4.05 Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Property at any reasonable time to inspect the same.
Section 4.06 Representations of the City. The City represents and warrants to the Authority and the Trustee as follows:
(a) the City has the full power and authority to enter into, to execute and to deliver this Ground Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution of this Ground Lease;
(b) except for Permitted Encumbrances, the Property is not subject to any dedication, easement, right of way, reservation in patent, covenant, condition, restriction, lien or encumbrance which would prohibit or materially interfere with the use of the Property for governmental purposes as contemplated by the City;
(c) all taxes, assessments or impositions of any kind with respect to the Property, except current taxes, have been paid in full; and
(d) the Property is necessary to the City in order for the City to perform its governmental functions.
Section 4.07 Representations of the Authority. The Authority represents and warrants to the City and the Trustee that the Authority has the full power and authority to enter into, to execute and to deliver this Ground Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution and delivery of this Ground Lease.
4 ARTICLE V
ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 5.01 Assignment and Subleasing. This Ground Lease may be sold or assigned and the Property subleased, as a whole or in part, by the Authority without the necessity of obtaining the consent of the City, if an event of default occurs under the Lease Agreement. The Authority shall, within 30 days after such an assignment, sale or sublease, furnish or cause to be furnished to the City a true and correct copy of such assignment, sale or sublease, as the case may be.
Section 5.02 Restrictions on City. The City agrees that, except with respect to Permitted Encumbrances, it will not mortgage, sell, encumber, assign, transfer or convey the Property or any portion thereof during the term of this Ground Lease.
ARTICLE VI
TERM; TERMINATION
Section 6.01 Term. The term of this Ground Lease shall commence as of the date of commencement of the term of the Lease Agreement and shall remain in full force and effect from such date to and including the Termination Date, unless such term is extended or sooner terminated as hereinafter provided.
Section 6.02 Extension; Early Termination. If, on the Termination Date, the Bonds shall not be fully paid, or provision therefor made in accordance with Article X of the Indenture, or the Indenture shall not be discharged by its terms, or if the Rental Payments payable under the Lease Agreement shall have been abated at any time, then the term of this Ground Lease shall be automatically extended until the date upon which all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture, and the Indenture shall be discharged by its terms, except that the term of this Ground Lease shall in no event be extended more than ten years.
If, prior to the Termination Date, all Bonds shall be fully paid, or provisions therefor made in accordance with Article X of the Indenture, and the Indenture shall be discharged by its terms, the term of this Ground Lease shall end simultaneously therewith.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Binding Effect. This Ground Lease shall inure to the benefit of and shall be binding upon the City, the Authority and their respective successors and assigns.
Section 7.02 Severability. In the event any provision of this Ground Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.
Section 7.03 Amendments, Changes and Modifications. This Ground Lease may be amended, changed, modified, altered or terminated only in accordance with the provisions of the Lease Agreement.
5 Section 7.04 Assignment to Trustee. The Authority and City acknowledge that the Authority has assigned its right, title and interest in and to this Ground Lease (but none of its obligations and none of its rights to provide consents or approvals hereunder) to the Trustee pursuant to certain provisions of the Assignment Agreement. The City consents to such assignment.
Section 7.05 Execution In Counterparts. This Ground Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 7.06 Applicable Law. This Ground Lease shall be governed by and construed in accordance with the laws of the State of California.
Section 7.07 Captions. The captions or headings in this Ground Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Ground Lease.
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4891-8414-2534v8/202040-0002
IN WITNESS WHEREOF, the Authority and the City have caused this Ground Lease to be executed by their respective officers hereunto duly authorized, all as of the day and year first above written.
CITY OF WATSONVILLE
By:
TAMARA VIDES
CITY MANAGER
ATTEST:
By:
IRWIN I. ORTIZ
CITY CLERK
WATSONVILLE PUBLIC FINANCE AUTHORITY
By:
TAMARA VIDES
EXECUTIVE DIRECTOR
ATTEST:
By:
IRWIN I. ORTIZ
SECRETARY OF THE BOARD
APPROVED AS TO FORM:
City Attorney
CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in the Property conveyed under the foregoing to the Watsonville Public Finance Authority, a joint exercise of powers authority organized and existing under and by virtue of the Constitution and the laws of the State of California, is hereby accepted by the undersigned officer or agent on behalf of the Board of Directors of the Watsonville Public Finance Authority, pursuant to authority conferred by resolution of said Board of Directors adopted on May [27], 2025, and the grantee consents to recordation thereof by its duly authorized officer.
Dated: June 1, 2025 WATSONVILLE PUBLIC FINANCE AUTHORITY By:
TAMARA VIDES, EXECUTIVE DIRECTOR
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF SANTA CRUZ )
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
4891-8414-2534v8/202040-0002
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF SANTA CRUZ )
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF SANTA CRUZ )
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
A-1
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Agenda Version
LEASE AGREEMENT
by and between
CITY OF WATSONVILLE
and
WATSONVILLE PUBLIC FINANCE AUTHORITY
Dated as of June 1, 2025
Relating to
$[PAR]
WATSONVILLE PUBLIC FINANCE AUTHORITY
LEASE REVENUE BONDS, SERIES 2025
TABLE OF CONTENTS
Page
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4882-6871-0087v11/202040-0002
ARTICLE I DEFINITIONS........................................................................................................ 2 Section 1.01 Definitions .............................................................................................................. 2 ARTICLE II LEASE OF PROPERTY; TERM ........................................................................... 4 Section 2.01 Lease of Property.................................................................................................... 4 Section 2.02 Term; Occupancy.................................................................................................... 4 ARTICLE III RENTAL PAYMENTS .......................................................................................... 5 Section 3.01 Base Rental Payments............................................................................................. 5 Section 3.02 Additional Rental Payments ................................................................................... 5 Section 3.03 Fair Rental Value .................................................................................................... 6 Section 3.04 Payment Provisions................................................................................................. 6 Section 3.05 Appropriations Covenant........................................................................................ 6 Section 3.06 Rental Abatement ................................................................................................... 7
ARTICLE IV ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF THE PROJECT................................................................................................................ 7 Section 4.01 Deposit of Bond Proceeds; City Deposit ................................................................ 7 Section 4.02 Acquisition, Construction and Improvement of the Project ................................... 7 Section 4.03 Compliance with Law............................................................................................. 8 Section 4.04 Payment of Costs.................................................................................................... 8 Section 4.05 Time of Completion................................................................................................ 8 Section 4.06 Construction and Acquisition of the Project........................................................... 8 ARTICLE V MAINTENANCE, ALTERATIONS AND ADDITIONS ..................................... 9 Section 5.01 Modification of the Property................................................................................... 9 Section 5.02 Maintenance and Utilities....................................................................................... 9 Section 5.03 Installation of City’s Equipment........................................................................... 10 ARTICLE VI INSURANCE........................................................................................................ 10 Section 6.01 Commercial General Liability and Property Damage Insurance; Workers’ Compensation Insurance....................................................................................... 10 Section 6.02 Title Insurance ...................................................................................................... 11 Section 6.03 Additional Insurance Provision; Form of Policies................................................ 11 Section 6.04 Self-Insurance ....................................................................................................... 12 ARTICLE VII DEFAULTS AND REMEDIES ........................................................................... 12 Section 7.01 Defaults and Remedies ......................................................................................... 12 Section 7.02 Waiver................................................................................................................... 15 ARTICLE VIII EMINENT DOMAIN; PREPAYMENT .............................................................. 15 Section 8.01 Eminent Domain................................................................................................... 15 Section 8.02 No Optional Prepayment ...................................................................................... 15 ARTICLE IX COVENANTS ...................................................................................................... 16 Section 9.01 Right of Entry ....................................................................................................... 16 Section 9.02 Liens...................................................................................................................... 16 Section 9.03 Quiet Enjoyment................................................................................................... 16
TABLE OF CONTENTS
(continued)
Page
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Section 9.04 Authority Not Liable............................................................................................. 16 Section 9.05 Assignment and Subleasing.................................................................................. 17 Section 9.06 Title to Property.................................................................................................... 17 Section 9.07 Authority’s Purpose .............................................................................................. 17 Section 9.08 Representations of the City................................................................................... 17 Section 9.09 Representation of the Authority............................................................................ 17 ARTICLE X NO CONSEQUENTIAL DAMAGES; USE OF THE PROPERTY; SUBSTITUTION OR RELEASE......................................................................... 18 Section 10.01 No Consequential Damages.................................................................................. 18 Section 10.02 Use of the Property ............................................................................................... 18 Section 10.03 Substitution or Release of the Property ................................................................ 18 ARTICLE XI MISCELLANEOUS ............................................................................................. 19 Section 11.01 Law Governing ..................................................................................................... 19 Section 11.02 Notices.................................................................................................................. 19 Section 11.03 Validity and Severability ...................................................................................... 20 Section 11.04 Net-Net-Net Lease ................................................................................................ 20 Section 11.05 Taxes..................................................................................................................... 20 Section 11.06 Section Headings .................................................................................................. 20 Section 11.07 Amendments......................................................................................................... 20 Section 11.08 Assignment ........................................................................................................... 21 Section 11.09 Execution .............................................................................................................. 21 Signatures ....................................................................................................................................S-1 EXHIBIT A LEGAL DESCRIPTION OF THE PROJECT SITE ................................................A-1 EXHIBIT B DESCRIPTION OF THE PROJECT........................................................................B-1 EXHIBIT C BASE RENTAL PAYMENT SCHEDULE .............................................................C-1
1 LEASE AGREEMENT
THIS LEASE AGREEMENT (this “Lease Agreement”) executed and entered into as of June 1, 2025, is by and between the CITY OF WATSONVILLE (the “City”), a charter city and municipal corporation duly organized and existing under and by virtue of the Constitution and laws of the State of California, as lessee, and the WATSONVILLE PUBLIC FINANCE AUTHORITY (the “Authority”), a joint exercise of powers authority duly organized and existing under and by virtue of the laws of the State of California, as lessor.
RECITALS
WHEREAS, the City and the Authority desire to finance all or a portion of the design, acquisition, construction and/or installation of certain capital improvement projects in the City, including capital improvements to Ramsay Park and the Watsonville Civic Plaza (collectively, the “Project”);
WHEREAS, the City and the Authority 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” (the “Series 2025 Bonds”) for the purpose of financing the Project;
WHEREAS, to facilitate the issuance of the Series 2025 Bonds, the City will lease certain real property described in Exhibit A attached hereto and the improvements located thereon (the “Property”) to the Authority pursuant to a Ground Lease, dated as of the date hereof, and the City will sublease the Property back from the Authority pursuant to this Lease Agreement; WHEREAS, the City and the Authority desire to provide for the issuance of the Series 2025 Bonds pursuant to an Indenture, dated as of the date hereof, by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”); WHEREAS, the Series 2025 Bonds are payable from base rental payments (the “Base Rental Payments”) to be made by the City hereunder;
WHEREAS, all rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof, between the Trustee and the Authority; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Lease Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Lease Agreement;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Lease Agreement, have the meanings herein specified, which meanings shall be equally applicable to both the singular and plural forms of any of the terms herein defined. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Indenture.
“Additional Bonds” means bonds other than the Series 2025 Bonds issued under the Indenture in accordance with the provisions thereof.
“Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 hereof.
“Authority” means the Watsonville Public Finance Authority, a joint exercise of powers authority organized and existing under the laws of the State of California. “Base Rental Deposit Date” means the fifth (5th) Business Day next preceding each Interest Payment Date.
“Base Rental Payments” means all amounts payable to the Authority from the City as Base Rental Payments pursuant to Section 3.01 hereof.
“Base Rental Payment Schedule” means the schedule of Base Rental Payments payable to the Authority from the City pursuant to Section 3.01 hereof and attached hereto as Exhibit C. “Bonds” means the Series 2025 Bonds, and any Additional Bonds. “City” means the City of Watsonville, a charter city and municipal corporation duly organized and existing under and by virtue of the Constitution and laws of the State of California. “Closing Date” means June [__], 2025
“Costs” means, with respect to the Project, together with any other proper item of cost not specifically mentioned herein, (a) costs of payment of, or reimbursement for, acquisition, design, construction, rehabilitation, installation, delivery and financing of the Project, including, but not limited to, the payment of real property rental, administrative costs and capital expenditures relating to acquisition, construction, installation, and demolition, inspection costs, filing and recording costs, printing costs, reproduction and binding costs, fees and charges of the Trustee pursuant to the Indenture and other financing documents, legal fees and charges, financial, accounting and other professional consultant fees, costs of rating agencies or credit ratings, fees for the printing, execution, transportation and safekeeping of the Series 2025 Bonds; (b) all other costs which the City shall be required to pay under the terms of any contract or contracts for the acquisition, construction, delivery and installation of the Project, and demolition work required for the Project, including, but not limited to, the cost of insurance; (c) any sums required to reimburse the City for advances made for any of the above items, or for any other costs incurred and for work done, which is properly chargeable to the Project; (d) any costs paid from the Net Insurance Proceeds to repair, restore or replace the Project; and (e) such other expenses not specified herein as may be necessary or
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incidental to the acquisition, construction, delivery and installation of the Project, the financing thereof and the placing of the same in use and operation. Costs, as defined herein, shall be deemed to include the cost and expenses incurred by any agent of the City for any of the above-mentioned items.
“Ground Lease” means the Ground Lease, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with to the provisions thereof and hereof.
“Indenture” means the Indenture, dated as of the date hereof, by and among the Authority, the City and the Trustee, as originally executed and as it may from time to time be amended or supplemented in accordance with the provisions thereof. “Joint Powers Agreement” means the 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, pursuant to which the Authority is established, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Lease Agreement” means this Lease Agreement, as originally executed and as it may from time to time be amended in accordance with the provisions hereof. “Net Insurance Proceeds” means any insurance proceeds or condemnation award paid with respect to any of the Property, remaining after payment therefrom of all reasonable expenses incurred in the collection thereof.
“Permitted Encumbrances” means, with respect to the Property, as of any particular time, (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to provisions of Article VI hereof, permit to remain unpaid, (b) the Assignment Agreement, (c) this Lease Agreement, (d) the Ground Lease, (e) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law as normally exist with respect to properties similar to the Property for the purposes for which it was acquired or is held by the City, (f) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the Closing Date which the City certifies in writing will not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture and the Assignment Agreement and to which the Authority and the City consent in writing, (g) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the Closing Date which the City certifies in writing do not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture and the Assignment Agreement and to which the Authority and the City consent in writing, and (h) future subleases of the Property entered into by the City, as sublessor, and third party tenants, as sublessee, so long as such subleases are entered into in compliance with Section 9.05 hereof.
“Project” is defined in the Recitals and further described in Exhibit B attached hereto. The City may add, delete or substitute other improvements for components of the Project described in Exhibit B by filing with the Authority and Trustee a Certificate of the City stating that such addition,
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deletion, or substitution shall not cause the City to violate any of its covenants, representations and warranties made in this Lease Agreement, the Indenture, or the Tax Certificate. “Property” means certain real property and improvements located thereon owned by the City and described in Exhibit A attached hereto and incorporated herein, commonly referred to as the i) City Hall, located at 250 Maple 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.
“Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments.
“Rental Period” means the twelve-month period commencing on May 1 of each year during the term of the Lease Agreement.
“Series 2025 Bonds” means the Watsonville Public Finance Authority Lease Revenue Bonds, Series 2025 issued under the Indenture.
“Termination Date” means May 1, 20[__], unless extended or sooner terminated as provided in Section 2.02 hereof.
“Trustee” means the trustee appointed under the Indenture and referred to therein as the Trustee.
ARTICLE II
LEASE OF PROPERTY; TERM
Section 2.01 Lease of Property.
(a) The Authority hereby leases to the City and the City hereby leases from the Authority the Property, on the terms and conditions hereinafter set forth, subject to all Permitted Encumbrances.
(b) The leasing of the Property by the City to the Authority pursuant to the Ground Lease shall not effect or result in a merger of the City’s leasehold estate pursuant to this Lease Agreement and its fee estate as lessor under the Ground Lease, and the Authority shall continue to have a leasehold estate in the Property pursuant to the Ground Lease throughout the term thereof and hereof. The leasehold interest granted by the City to the Authority pursuant to the Ground Lease is and shall be independent of this Lease Agreement; this Lease Agreement shall not be an assignment or surrender of the leasehold interest granted to the Authority under the Ground Lease.
Section 2.02 Term; Occupancy. The term of this Lease Agreement shall commence on the Closing Date and shall end on the Termination Date, unless such term is extended or sooner terminated as hereinafter provided. If on the Termination Date the Bonds shall not be fully paid, or
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provision therefor made in accordance with Article X of the Indenture, or the Indenture shall not be discharged by its terms, or if the Rental Payments shall remain due and payable or shall have been abated at any time and for any reason, then the term of this Lease Agreement shall be extended until the date upon which (i) all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture or (ii) the Indenture shall be discharged by its terms and all Rental Payments shall have been paid in full. Notwithstanding the foregoing, the term of this Lease Agreement shall in no event be extended more than ten years beyond the Termination Date, such extended date being the “Maximum Lease Term.” If prior to the Termination Date, all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture, the Indenture shall be discharged by its terms and all Rental Payments shall have been paid in full, then the term of this Lease Agreement shall end simultaneously therewith.
ARTICLE III
RENTAL PAYMENTS
Section 3.01 Base Rental Payments.
(a) Subject to the provisions hereof relating to a revision of the Base Rental Payment Schedule pursuant to subsection (b) of this Section, the City shall pay to the Authority, as Base Rental Payments (subject to the provisions of Section 3.06 and Article VIII hereof) the amount at the times specified in the Base Rental Payment Schedule, a portion of which Base Rental Payments shall constitute principal, and a portion of which shall constitute interest. Rental Payments, including Base Rental Payments, shall be paid by the City to the Authority for and in consideration of the right to use and occupy the Property and in consideration of the continued right to the quiet use and enjoyment thereof during each Rental Period for which such Rental Payments are to be paid.
The obligation of the City to make the Base Rental Payments does not constitute a debt of the City or of the State of California, or of any political subdivision thereof, within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation. (b) If the term of this Lease Agreement shall have been extended pursuant to Section 2.02 hereof, the obligation of the City to pay Rental Payments shall continue to and including the Base Rental Deposit Date preceding the date of termination of this Lease Agreement (as so extended pursuant to Section 2.02 hereof). Upon such extension, the Base Rental Payments shall be established so that they will be sufficient to pay all extended and unpaid Base Rental Payments; provided, however, that the Rental Payments payable in any Rental Period shall not exceed the annual fair rental value of the Property.
Section 3.02 Additional Rental Payments. The City shall also pay, as Additional Rental Payments, such amounts as shall be required for the payment of the following:
(a) all taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates of the Authority or the City therein;
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(b) all reasonable administrative costs of the Authority relating to the Property including, but without limiting the generality of the foregoing, salaries, wages, fees and expenses, compensation and indemnification of the Trustee payable by the Authority under the Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary and reasonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Indenture or the Lease Agreement or to defend the Authority and its members, officers, agents and employees;
(c) insurance premiums for all insurance required pursuant to Article VI hereof; (d) any amounts with respect to the Lease Agreement or the Bonds required to be rebated to the federal government in accordance with Section 148(f) of the Code; and (e) all other payments required to be paid by the City under the provisions of this Lease Agreement or the Indenture.
Amounts constituting Additional Rental Payments payable hereunder shall be paid by the City directly to the person or persons to whom such amounts shall be payable. The City shall pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 60 days after notice in writing from the Trustee to the City stating the amount of Additional Rental Payments then due and payable and the purpose thereof.
Section 3.03 Fair Rental Value. The parties hereto have agreed and determined that the annual fair rental value of the Property is not less than the maximum annual Rental Payments due in any year. In making such determination of fair rental value, consideration has been given to the uses and purposes that may be served by the Property and the benefits therefrom which will accrue to the City and the general public. Payments of the Rental Payments for the Property during each Rental Period shall constitute the total rental for said Rental Period.
Section 3.04 Payment Provisions. Each installment of Base Rental Payments payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Authority at the principal office of the Trustee in [San Francisco, California], or such other place or entity as the Authority or Trustee shall designate. Each Base Rental Payment shall be deposited with the Trustee no later than the Base Rental Deposit Date preceding the Interest Payment Date on which such Base Rental Payment is due. Any Base Rental Payment which shall not be paid by the City when due and payable under the terms of this Lease Agreement shall bear interest from the date when the same is due hereunder until the same shall be paid at the rate equal to the highest rate of interest on any of the Outstanding Bonds. Notwithstanding any dispute between the Authority and the City, the City shall make all Rental Payments when due without deduction or offset of any kind and shall not withhold any Rental Payments pending the final resolution of such dispute. In the event of a determination that the City was not liable for said Rental Payments or any portion thereof, said payments or excess of payments, as the case may be, shall be credited against subsequent Rental Payments due hereunder or refunded at the time of such determination. Amounts required to be deposited by the City with the Trustee pursuant to this Section on any date shall be reduced to the extent of available amounts on deposit in the Base Rental Payment Fund, the Interest Fund or the Principal Fund.
Section 3.05 Appropriations Covenant. The City covenants to take such action as may be necessary to include all Rental Payments due hereunder as a separate line item in its annual
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budgets and to make necessary annual appropriations for all such Rental Payments. The City will deliver to the Authority and the Trustee a Certificate of the City stating that its final annual budget includes all Base Rental Payments due in the fiscal years addressed in such budget within ten days after the filing or adoption thereof. The covenants on the part of the City herein contained shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease Agreement agreed to be carried out and performed by the City.
Section 3.06 Rental Abatement. Except as otherwise specifically provided in this Section, during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defect in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property, Rental Payments shall be abated proportionately, and the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate the Lease Agreement by virtue of any such interference, and the Lease Agreement shall continue in full force and effect. The amount of such abatement shall be agreed upon by the City and the Authority; provided, however, that the Rental Payments due for any Rental Period shall not exceed the annual fair rental value of that portion of the Property available for use and occupancy by the City during such Rental Period. The City and the Authority shall calculate such abatement and shall provide the Trustee with a certificate setting forth such calculation and the basis therefor. Such abatement shall continue for the period commencing with the date of interference resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending with the substantial completion of the work of repair or replacement of the Property, or the portion thereof so damaged or destroyed; and the term of this Lease Agreement shall be extended as provided in Section 2.02 hereof, except that the term shall in no event be extended beyond the Maximum Lease Term.
Notwithstanding the foregoing, to the extent that moneys are available for the payment of Rental Payments in any of the funds and accounts established under the Indenture or proceeds of the rental interruption insurance required by section 601(d) hereof are available, Rental Payments shall not be abated as provided above but, rather, shall be payable by the City as a special obligation payable solely from said funds, accounts, and proceeds.
ARTICLE IV
ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF THE PROJECT Section 4.01 Deposit of Bond Proceeds; City Deposit. Upon the issuance of the Series 2025 Bonds, the Authority agrees that all proceeds of the Series 2025 Bonds shall be paid to the Trustee and that such moneys shall be deposited with the Trustee and be applied as provided in Section 3.02 of the Indenture
Section 4.02 Acquisition, Construction and Improvement of the Project. The City agrees to acquire, construct, deliver and install any portion of the Project to be financed with the proceeds of the Series 2025 Bonds, or to cause such portion to be acquired, constructed, delivered and installed, with the proceeds of Series 2025 Bonds paid to the City by the Authority pursuant to Section 4.01 above and the Authority shall have no responsibility with respect thereto.
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Section 4.03 Compliance with Law. The City shall comply with all applicable provisions for bids and contracts prescribed by law with respect to the Project, including, without limitation, any applicable environmental review and approvals, Sections 20110 et seq. of the Public Contract Code and Article 42 (commencing with Section 20670 of Part 3 of Division 2) of the Public Contract Code. The City acknowledges and agrees that specific expenditures for all or any portion of the Project, as now or hereafter designated, are expressly subject to compliance with such requirements.
Section 4.04 Payment of Costs. Payment of Costs shall be made from the moneys deposited with the Trustee in the Project Fund as provided in Section 4.01 hereof and Section 3.05 of the Indenture, which shall be disbursed from the Project Fund in accordance and upon compliance with Section 3.05 of the Indenture.
Section 4.05 Time of Completion. The construction and equipping of the Project shall be completed on or prior to June 1, 2028, subject to excused delays pursuant to standard City procedures.
Section 4.06 Construction and Acquisition of the Project. The City agrees to oversee the construction, acquisition, delivery and installation of the Project in accordance with the following terms:
(a) Construction and Completion. The City agrees to proceed with all due diligence to complete the construction, acquisition, delivery and installation of the Project, all in accordance with the plans and specifications for the Project (the “Plans and Specifications”) approved by the City’s Principal Engineer or Public Works Director. The City shall comply with all statutes and laws applicable to the performance of its obligations hereunder, including all public laws applicable thereto and all laws regarding the approval, acquisition and construction of public projects by cities in the State of California. The City shall make certain that each contract relating to the Project is awarded in accordance with applicable law and contains a scheduled completion date which requires completion on or before the scheduled Completion Date referred to in Section 4.05 above;
(b) Reserved.
(c) Payment of Costs of the Project. Payment of the portion of the Costs of the Project being financed by the City shall be made from moneys deposited in the Project Fund, and shall be disbursed for such purpose in accordance and upon compliance with the Indenture. Neither the Authority nor the City shall be liable for the payment of Costs of the Project other than from amounts on deposit in the Project Fund; and
(d) Unexpended Monies. The City agrees that unexpended moneys remaining in the Project Fund shall, upon payment in full of all Costs of the Project, be applied solely in accordance with the provisions of the Indenture.
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ARTICLE V
MAINTENANCE, ALTERATIONS AND ADDITIONS
Section 5.01 Modification of the Property.
(a) Subject to Section 9.02 hereof, the City and any sublessee shall, at its own expense, or with the proceeds of Additional Bonds, have the right to make additions, modifications, and improvements to any portion of the Property if such improvements are necessary or beneficial for the use of such portion of the Property. All such additions, modifications and improvements shall thereafter comprise part of the Property and be subject to the provisions of this Lease Agreement.
Such additions, modifications and improvements shall not in any way cause an abatement of Rental Payments with respect to the Property or cause it to be used for purposes other than those authorized under the provisions of State and federal law or in any way which would impair the State tax-exempt status or the exclusion from gross income for federal income tax purposes of the interest on the Bonds and Additional Bonds (to the extent such Additional Bonds were issued as tax exempt Bonds); and the Property, upon completion of any additions, modifications and improvements made pursuant to this Section, shall have an annual fair rental value which is not less than the annual Rental Payments.
(b) Subject to Section 9.02 hereof, the City and any sublessee shall, at its own expense, or with the proceeds of Additional Bonds, have the right to make replacements, redevelopment or renovation of all or a portion of the Property if the following conditions precedent are satisfied:
(i) The City receives an opinion of Bond Counsel, a copy of which the City shall furnish to the Authority and the Trustee, that (1) such replacement does not adversely affect the federal income tax exclusion or the State tax-exempt status of the interest on the Bonds and Additional Bonds (to the extent such Additional Bonds were issued as tax exempt Bonds), and (2) this Lease will remain the legal, valid, binding and enforceable obligation of the City; (ii) In the event such replacement, redevelopment or renovation would result in the temporary abatement of Rental Payments as provided in Section 3.06 hereof the City shall have notified any rating agency then providing a rating on the Bonds and shall deposit moneys with the Trustee in advance for payment of Rental Payments from the proceeds of Additional Bonds or from special funds of the City or other moneys, the application of which would not, in the opinion of Bond Counsel (a copy of which shall have been delivered to the Trustee), result in such Rental Payments constituting indebtedness of the City in contravention of the Constitution and laws of the State; and
(iii) The City shall certify to the Trustee that it has sufficient funds to complete such replacement, redevelopment or renovation.
Section 5.02 Maintenance and Utilities. Throughout the term of this Lease Agreement, as part of the consideration for rental of the Property, all improvement, repair and maintenance of the Property shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Property, which may include, without limitation, janitor service, security, power gas, telephone, light, heating, ventilation, air conditioning, water and all other utility services, and shall pay for or otherwise arrange for payment of the cost of the repair and
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replacement of the Property resulting from ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof. In exchange for the Rental Payments, the Authority agrees to provide only the Property.
Section 5.03 Installation of City’s Equipment. The City and any sublessee may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed items of equipment or other personal property in or upon the Property. All such items shall remain the sole property of the City or such sublessee, and neither the Authority nor the Trustee shall have any interest therein. The City or such sublessee may remove or modify such equipment or other personal property at any time, provided that such party shall repair and restore any and all damage to the Property resulting from the installation, modification or removal of any such items. Nothing in this Lease Agreement shall prevent the City or any sublessee from purchasing items to be installed pursuant to this Section under a conditional sale or lease purchase contract, or subject to a vendor’s lien or security agreement as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shall attach to any part of the Property.
ARTICLE VI
INSURANCE
Section 6.01 Commercial General Liability and Property Damage Insurance; Workers’ Compensation Insurance.
(a) The City shall maintain or cause to be maintained, throughout the term of this Lease Agreement, a standard commercial general liability insurance policy or policies in protection of the City, the Authority and their respective members, officers, agents and employees. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the use or ownership of the Property. Said policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in a single accident or event, and in a minimum amount of $500,000 for damage to property (subject to a deductible clause of not to exceed $100,000) resulting from a single accident or event. Such commercial general liability and property damage insurance may, however, be in the form of a single limit policy in the amount of $3,000,000 covering all such risks. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried or required to be carried by the City, and may be maintained in whole or in part in the form of self-insurance by the City provided such self-insurance complies with the provisions of Section 6.04 hereof. The Net Insurance Proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the Net Insurance Proceeds of such insurance shall have been paid. (b) The City shall maintain or cause to be maintained, throughout the term of this Lease Agreement, workers’ compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the California Labor Code, or any act enacted as an amendment or supplement thereto or in lieu thereof, such workers’ compensation insurance to cover all persons employed by the City in connection with the Property and to cover full liability for compensation under any such act; provided, however, that the City’s obligations under this subsection may be satisfied by self-insurance, provided such selfinsurance complies with the provisions of Section 6.04 hereof.
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(c) The City shall maintain or cause to be maintained, fire, lightning and special extended coverage insurance (which shall include coverage for vandalism and malicious mischief, but need not include coverage for earthquake damage) on all improvements constituting any part of the Property in an amount equal to the greater of 100% of the replacement cost of such improvements or 100% of the outstanding principal amount of the Bonds. The City has an insurance policy which provides replacement cost coverage. All insurance required to be maintained pursuant to this subsection may be subject to a deductible in an amount not to exceed $500,000. The City’s obligations under this subsection may be satisfied by self-insurance, provided such self-insurance complies with the provisions of Section 6.04 hereof.
(d) The City shall maintain rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments resulting from the loss, total or partial, of the use of any part of the Property as a result of any of the hazards required to be covered pursuant to subsection (c) of this Section in an amount sufficient at all times to pay an amount not less than the product of two times the maximum amount of Base Rental Payments scheduled to be paid during any Rental Period. The City’s obligations under this subsection may be satisfied by self-insurance, provided such self-insurance complies with the provisions of Section 6.04 hereof. (e) The insurance required by this Section shall be provided by reputable insurance companies with claims paying abilities determined, in the reasonable opinion of a professionally certified risk manager or an independent insurance consultant, to be adequate for the purposes hereof.
Section 6.02 Title Insurance. The City shall provide, at its own expense, one or more CLTA or ALTA title insurance policies for the Property, in the aggregate amount of not less than the initial aggregate principal amount of the Series 2025 Bonds and the initial aggregate principal amount of any Additional Bonds issued after the Closing Date. Such policy or policies shall insure (a) the fee interest of the City in the Property, (b) the Authority’s ground leasehold estate in the Property under the Ground Lease, and (c) the City’s leasehold estate hereunder in the Property, subject only to Permitted Encumbrances. All Net Insurance Proceeds received under said policy or policies shall be deposited with the Trustee and applied as provided in Section 5.03 of the Indenture.
So long as any of the Bonds remain Outstanding, each policy of title insurance obtained pursuant to the Indenture or this Lease Agreement or required thereby or hereby shall provide that all proceeds thereunder shall be payable to the Trustee for the benefit of the Bond Owners.
Section 6.03 Additional Insurance Provision; Form of Policies. The City shall pay or cause to be paid when due the premiums for all insurance policies required by Section 6.01 hereof.
All such policies shall provide that the Trustee shall be given 30 days’ notice of the expiration thereof or any intended cancellation thereof. The Trustee shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee.
The City shall cause to be delivered to the Trustee on or before August 15 each year, commencing August 15, 2025, a Certificate of the City stating that such policies are in full force and effect and that the City is in full compliance with the requirements of this Article or, if applicable that the City maintains such insurance through self-insurance as provided in Section 6.04. The Trustee shall be entitled to rely upon said Certificate of the City as to the City’s compliance with this Article.
The Trustee shall not be responsible for the sufficiency of coverage or amounts of such policies.
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Section 6.04 Self-Insurance. Insurance provided through a California joint powers authority of which the City is a member or with which the City contracts for insurance shall be deemed to be self-insurance for purposes hereof. Any self-insurance maintained by the City pursuant to this Article shall comply with the following terms:
(a) the self-insurance program shall be approved in writing by the City’s Risk Manager, a professionally certified risk manager, or an independent insurance consultant; (b) the self-insurance program shall include an actuarially sound claims reserve fund out of which each self-insured claim shall be paid, the adequacy of each such fund shall be evaluated on an annual basis by the City’s Risk Management Department, a professionally certified risk manager or an independent insurance consultant and any deficiencies in any self-insured claims reserve fund shall be remedied in accordance with the recommendation of the City’s Risk Management Department, a professionally certified risk manager or an independent insurance consultant, as applicable; and
(c) in the event that the self-insurance program shall be discontinued, the actuarial soundness of its claims reserve fund, as determined by a professionally certified risk manager or by an independent insurance consultant, shall be maintained.
ARTICLE VII
DEFAULTS AND REMEDIES
Section 7.01 Defaults and Remedies.
(a) (i) If the City shall fail (A) to pay any Rental Payment payable hereunder when the same becomes due and payable, time being expressly declared to be of the essence in this Lease Agreement, or (B) to keep, observe or perform any other term, covenant or condition contained herein or in the Indenture to be kept or performed by the City, or (ii) upon the happening of any of the events specified in this subsection or in subsection (b) of this Section, the City shall be deemed to be in default hereunder and it shall be lawful for the Authority to exercise any and all remedies available pursuant to law or granted pursuant to this Lease Agreement. The City shall in no event be in default in the observance or performance of any covenant, condition or agreement in this Lease Agreement on its part to be observed or performed, other than as referred to in clause (i)(A) or (ii) of the preceding sentence, unless the City shall have failed, for a period of 30 days or such additional time as is reasonably required to correct any such default after notice by the Authority to the City properly specifying wherein the City has failed to perform any such covenant, condition or agreement. Upon any such default, the Authority, in addition to all other rights and remedies it may have at law, shall have the option to do any of the following:
(1) To terminate this Lease Agreement in the manner hereinafter provided on account of default by the City, notwithstanding any re-entry or re-letting of the Property as hereinafter provided for in subparagraph (2) hereof, and to re-enter the Property and remove all persons in possession thereof and all personal property whatsoever situated upon the Property and place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City. In the event of such termination, the City agrees to surrender immediately possession of the Property, without let or hindrance, and to pay the Authority all damages recoverable at law that the Authority may incur by reason of default by the City, including,
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without limitation, any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. Neither notice to pay Rental Payments or to deliver up possession of the Property given pursuant to law nor any entry or re-entry by the Authority nor any proceeding in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property nor the appointment of a receiver upon initiative of the Authority to protect the Authority’s interest under this Lease Agreement shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of default by the City shall be or become effective by operation of law or acts of the parties hereto, or otherwise, unless and until the Authority shall have given written notice to the City of the election on the part of the Authority to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Property or of the remainder of the term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated by the Authority by such written notice. (2) Without terminating this Lease Agreement, (x) to collect each installment of Rental Payments as the same become due and enforce any other terms or provisions hereof to be kept or performed by the City, regardless of whether or not the City has abandoned the Property, or (y) to exercise any and all rights of entry and re-entry upon the Property. In the event the Authority does not elect to terminate this Lease Agreement in the manner provided for in subparagraph (1) hereof, the City shall remain liable and agrees to keep or perform all covenants and conditions herein contained to be kept or performed by the City and, if the Property is not re-let, to pay the full amount of the Rental Payments to the end of the term of this Lease Agreement or, in the event that the Property is re-let, to pay any deficiency in Rental Payments that results therefrom; and further agrees to pay said Rental Payments and/or Rental Payment deficiency punctually at the same time and in the same manner as hereinabove provided for the payment of Rental Payments hereunder, notwithstanding the fact that the Authority may have received in previous years or may receive thereafter in subsequent years Rental Payments in excess of the Rental Payments herein specified, and notwithstanding any entry or re-entry by the Authority or suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property. Should the Authority elect to re-enter as herein provided, the City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to re-let the Property, or any part thereof, from time to time, either in the Authority’s name or otherwise, upon such terms and conditions and for such use and period as the Authority may deem advisable and to remove all persons in possession thereof and all personal property whatsoever situated upon the Property and to place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City, and the City hereby indemnifies and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon and re-letting of the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to re-let the Property in the event of such re-entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re-letting shall constitute a surrender or termination of this Lease Agreement irrespective of the use or the term for which such re-letting is made or the terms and conditions of such re-letting, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Lease Agreement shall vest in the Authority to be effected in the sole and exclusive manner provided for in subparagraph (1) hereof. The City further agrees to pay the Authority the cost of any alterations or additions to the
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Property necessary to place the Property in condition for re-letting immediately upon notice to the City of the completion and installation of such additions or alterations.
The City hereby waives any and all claims for damages caused or which may be caused by the Authority in re-entering and taking possession of the Property as herein provided and all claims for damages that may result from the destruction of or injury to the Property and all claims for damages to or loss of any property belonging to the City, or any other person, that may be in or upon the Property.
(b) If (i) the City’s interest in this Lease Agreement or any part thereof is assigned or transferred, either voluntarily or by operation of law or otherwise, without the written consent of the Authority and, as hereinafter provided for, or (ii) the City or any assignee shall file any petition or institute any proceeding under any act or acts, state or federal, dealing with or relating to the subject or subjects of bankruptcy or insolvency, or under any amendment of such act or acts, either as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby the City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of the City’s debts or obligations, or offers to the City’s creditors to elect a composition or extension of time to pay the City’s debts or asks, seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of the City’s debts, or for any other similar relief, or if any such petition or any such proceedings of the same or similar kind or character be filed or be instituted or taken against the City, or if a receiver of the business or of the property or assets of the City shall be appointed by any court, except a receiver appointed at the instance or request of the Authority, or if the City shall make a general assignment for the benefit of the City’s creditors, or (iii) the City shall abandon or vacate the Property, then the City shall be deemed to be in default hereunder. (c) In addition to the other remedies set forth in this Section, upon the occurrence of an event of default, the Authority and its assignee shall be entitled to proceed to protect and enforce the rights vested in the Authority and its assignee by the Lease Agreement or by law. The provisions of the Lease Agreement and the duties of the City and of its city council, officers or employees shall be enforceable by the Authority or its assignee by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Without limiting the generality of the foregoing, the Authority and its assignee shall have the right to bring the following actions:
(i) Accounting. By action or suit in equity to require the City and its city council, officers and employees and its assigns to account as the trustee of an express trust. (ii) Injunction. By action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of the Authority or its assignee. (iii) Mandamus. By mandamus or other suit, action or proceeding at law or in equity to enforce the Authority’s or its assignee’s rights against the City (and its city council, officers and employees) and to compel the City to perform and carry out its duties and obligations under the law and its covenants and agreements with the City as provided herein.
Each and all of the remedies given to the Authority hereunder or by any law now or hereafter enacted are cumulative and the single or partial exercise of any right, power or privilege hereunder shall not impair the right of the Authority to the further exercise thereof or the exercise of any or all other rights, powers or privileges. The term “re-let” or “re-letting” as used in this Section shall include, but not be limited to, re-letting by means of the operation by the Authority of the
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Property. If any statute or rule of law validly shall limit the remedies given to the Authority hereunder, the Authority nevertheless shall be entitled to whatever remedies are allowable under any statute or rule of law.
In the event the Authority shall prevail in any action brought to enforce any of the terms and provisions of this Lease Agreement, the City agrees to pay a reasonable amount as and for attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to the Authority hereunder.
Notwithstanding anything to the contrary contained in this Lease Agreement, the Authority shall have no right upon a default hereunder by the City to accelerate Rental Payments. (d) Notwithstanding anything to the contrary contained in this Lease Agreement, the termination of this Lease Agreement by the Authority and its assignees on account of a default by the City under this Section shall not effect or result in a termination of the Ground Lease.
Section 7.02 Waiver. Failure of the Authority to take advantage of any default on the part of the City shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may grow up between the parties in the course of administering this instrument be construed to waive or to lessen the right of the Authority to insist upon performance by the City of any term, covenant or condition hereof, or to exercise any rights given the Authority on account of such default. A waiver of a particular default shall not be deemed to be a waiver of any other default or of the same default subsequently occurring. The acceptance of Rental Payments hereunder shall not be, or be construed to be, a waiver of any term, covenant or condition of this Lease Agreement.
ARTICLE VIII
EMINENT DOMAIN; PREPAYMENT
Section 8.01 Eminent Domain. If all of the Property (or portions thereof such that the remainder is not usable for public purposes by the City) shall be taken under the power of eminent domain, the term hereof shall cease as of the day that possession shall be so taken. If less than all of the Property shall be taken under the power of eminent domain and the remainder is usable for public purposes by the City at the time of such taking, then the Lease Agreement shall continue in full force and effect as to such remainder, and the parties waive the benefits of any law to the contrary, and in such event there shall be a partial abatement of the Rental Payments in accordance with the provisions of Section 3.06 hereof. So long as any Bonds shall be Outstanding, any award made in eminent domain proceedings for the taking of the Property, or any portion thereof, shall be paid to the Trustee and applied to the redemption of Bonds as provided in subsection (a) of Section 4.01 of the Indenture, in the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued and in Section 5.03 of the Indenture. Any such award made after all of the Bonds, and all other amounts due under the Indenture and hereunder, have been fully paid, shall be paid to the Authority and to the City as their respective interests may appear.
Section 8.02 No Optional Prepayment. The Base Rental Payments attributable to the Series 2025 Bonds are subject to prepayment at the option of the City.
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ARTICLE IX
COVENANTS
Section 9.01 Right of Entry. The Authority and its assignees shall have the right to enter upon and to examine and inspect the Property during reasonable business hours (and in emergencies at all times) for any purpose connected with the Authority’s rights or obligations under this Lease Agreement, and for all other lawful purposes.
Section 9.02 Liens. In the event the City shall at any time during the term of this Lease Agreement cause any changes, alterations, additions, improvements, or other work to be done or performed or materials to be supplied, in or upon the Property, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Property and which may be secured by a mechanics’, materialmen’s or other lien against the Property or the Authority’s interest therein, and will cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to contest any such lien, it may do so as long as such contest is in good faith.
If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment.
Section 9.03 Quiet Enjoyment. The parties hereto mutually covenant that the City, by keeping and performing the covenants and agreements herein contained, shall at all times during the term of this Lease Agreement peaceably and quietly have, hold and enjoy the Property without suit, trouble or hindrance from the Authority.
Section 9.04 Authority Not Liable. The Authority and its directors, officers, agents and employees, shall not be liable to the City or to any other party whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in, on or about the Property. To the extent permitted by law, the City shall, at its expense, indemnify and hold the Authority and the Trustee and all directors, members, officers and employees thereof harmless against and from any and all claims by or on behalf of any person, firm, corporation or governmental authority arising from the acquisition, construction, occupation, use, operation, maintenance, possession, conduct or management of or from any work done in or about the Property or from the subletting of any part thereof, including any liability for violation of conditions, agreements, restrictions, laws, ordinances, or regulations affecting the Property or the occupancy or use thereof, but excepting the negligence or willful misconduct of the persons or entity seeking indemnity. The City also covenants and agrees, at its expense, to pay and indemnify and save the Authority and the Trustee and all directors, officers and employees thereof harmless against and from any and all claims arising from (a) any condition of the Property and the adjoining sidewalks and passageways, (b) any breach or default on the part of the City in the performance of any covenant or agreement to be performed by the City pursuant to this Lease Agreement, (c) any act or negligence of licensees in connection with their use, occupancy or operation of the Property, or (d) any accident, injury or damage whatsoever caused to any person, firm or corporation in or about the Property or upon or under the sidewalks and from and against all costs, reasonable counsel fees, expenses and liabilities incurred in any action or proceeding brought by reason of any claim referred to in this Section, but excepting the negligence or willful misconduct of the person or entity seeking indemnity. In the event that any action or proceeding is brought against the Authority or the Trustee or any director,
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member, officer or employee thereof, by reason of any such claim, the City, upon notice from the Authority or the Trustee or such director, member, officer employee thereof, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to the Authority or the Trustee or such director, member, officer or employee thereof.
Section 9.05 Assignment and Subleasing. This Lease Agreement may not be assigned by the City. The City may sublease the Property or any portion thereof to any other person or entity for any other purpose, subject to the satisfaction of all of the following conditions (a) through (d) below:
(a) this Lease Agreement and the obligation of the City to make all Rental Payments hereunder shall remain the primary obligation of the City; (b) the City shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Authority and the Trustee a true and complete copy of such sublease; (c) any sublease of the Property by the City shall explicitly provide that such sublease is subject to all rights of the Authority under the Lease Agreement, including, the right to reenter and re-let the Property or terminate the Lease Agreement upon a default by the City; and (d) the City shall furnish the Authority and the Trustee with an Opinion of Counsel to the effect that such sublease will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes.
Section 9.06 Title to Property. Upon the termination or expiration of this Lease Agreement (other than as provided in Section 7.01 and Section 8.01 hereof), and the first date upon which the Bonds are no longer Outstanding, all right, title and interest in and to the Property shall vest in the City. Upon any such termination or expiration, the Authority shall execute such conveyances, deeds and other documents as may be necessary to effect such vesting of record.
Section 9.07 Authority’s Purpose. The Authority covenants that, prior to the discharge of this Lease Agreement and the Bonds, it will not engage in any activities inconsistent with the purposes for which the Authority is organized, as set forth in the Joint Powers Agreement.
Section 9.08 Representations of the City. The City represents and warrants to the Authority that (a) the City has the full power and authority to enter into, to execute and to deliver this Lease Agreement, the Ground Lease, and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement, the Ground Lease, and the Indenture, and (b) the Property will be used in the performance of essential governmental functions.
Section 9.09 Representation of the Authority. The Authority represents and warrants to the City that the Authority has the full power and authority to enter into, to execute and to deliver this Lease Agreement, the Ground Lease, the Assignment Agreement and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement, the Ground Lease, the Assignment Agreement and the Indenture.
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ARTICLE X
NO CONSEQUENTIAL DAMAGES;
USE OF THE PROPERTY; SUBSTITUTION OR RELEASE
Section 10.01 No Consequential Damages. In no event shall the Authority or the Trustee be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Lease Agreement or the City’s use of the Property.
Section 10.02 Use of the Property. The City will not use, operate or maintain the Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Lease Agreement. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of the Property) with all laws of the jurisdictions in which its operations may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Property; provided, however, that the City may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not, in the opinion of the Authority, adversely affect the estate of the Authority in and to any of the Property or its interest or rights under this Lease Agreement.
Section 10.03 Substitution or Release of the Property. The City shall have the right to substitute alternate real property for any portion of the Property or to release a portion of the Property from this Lease Agreement. All costs and expenses incurred in connection with such substitution or release shall be borne by the City. Notwithstanding any substitution or release of Property pursuant to this subsection, there shall be no reduction in or abatement of the Base Rental Payments due from the City hereunder as a result of such substitution or release. Any such substitution or release of any portion of the Property shall be subject to the following specific conditions, which are hereby made conditions precedent to such substitution or release:
(a) the City shall have found (as set forth in a certificate delivered by the City to the Trustee) that the Property, as constituted after such substitution or release, (i) has an annual fair rental value at least equal to the maximum annual Base Rental Payments payable by the City in any Rental Period, during the remaining term of this Lease Agreement, as determined by the City on the basis of commercially reasonable evidence of the fair rental value of the Property, and (ii) has a useful life in excess of the final maturity of any Outstanding Bonds; (b) the City shall have obtained or caused to be obtained a CLTA or ALTA title insurance policy or policies with respect to any substituted property in the amount at least equal to the aggregate principal amount of any Outstanding Bonds of the type and with the endorsements described in Section 6.02 hereof;
(c) the City shall have provided the Trustee with an Opinion of Counsel to the effect that such substitution or release will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes; (d) the City, the Authority and the Trustee shall have executed, and the City shall have caused to be recorded with the Santa Cruz County Clerk – Recorder, any document necessary to reconvey to the City the portion of the Property being released and to include any substituted real property in the description of the Property contained herein and in the Ground Lease;
19 4882-6871-0087v11/202040-0002
(e) the City shall have provided notice of such substitution to each rating agency then rating the Bonds;
(f) no event of default (as described in Article VII hereof) has occurred and is continuing;
(g) the City will give, or cause to be given, any notice of the occurrence of such substitution required to be given pursuant to the Continuing Disclosure Certificate; (h) the City will certify to the Trustee that the City has a current need for the substituted real property; and
(i) the City shall certify to the Trustee that any substitution shall not cause the City to violate any of its covenants, representations and warranties made in the Lease Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Law Governing. THIS LEASE AGREEMENT SHALL BE GOVERNED
EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF THE STATE OF CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.
Section 11.02 Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the City: City of Watsonville
250 Main Street
Watsonville, California 95076
Attention: Tamara Vides, City Manager
If to the Authority: Watsonville Public Finance Authority c/o City of Watsonville
250 Main Street
Watsonville, California 95076
Attention: Tamara Vides, Executive Director
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section.
20 4882-6871-0087v11/202040-0002
Section 11.03 Validity and Severability. If for any reason this Lease Agreement shall be held by a court of competent jurisdiction to be void, voidable or unenforceable by the Authority or by the City, or if for any reason it is held by such a court that any of the covenants and conditions of the City hereunder, including the covenant to pay Rental Payments, is unenforceable for the full term hereof; then and in such event this Lease Agreement is and shall be deemed to be a lease under which the Rental Payments are to be paid by the City annually in consideration of the right of the City to possess, occupy and use the Property, and all of the terms, provisions and conditions of this Lease Agreement, except to the extent that such terms, provisions and conditions are contrary to or inconsistent with such holding, shall remain in full force and effect.
Section 11.04 Net-Net-Net Lease. This Lease Agreement shall be deemed and construed to be a “net-net-net lease” and the City hereby agrees that the Rental Payments shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever and notwithstanding any dispute between the City and the Authority.
Section 11.05 Taxes. The City shall pay or cause to be paid all taxes and assessments of any type or nature charged to the Authority or affecting the Property or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the term of this Lease Agreement as and when the same become due.
The City or any sublessee may, at the City’s or such sublessee’s expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority or the Trustee shall notify the City or such sublessee that, in the opinion of independent counsel, by nonpayment of any such items, the interest of the Authority in the Property will be materially endangered or the Property, or any part thereof, will be subject to loss or forfeiture, in which event the City or such sublessee shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority and the Trustee.
Section 11.06 Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Lease Agreement.
Section 11.07 Amendments.
(a) This Lease Agreement and the Ground Lease may be amended and the rights and obligations of the Authority and the City hereunder and thereunder may be amended at any time by an amendment hereto or thereto which shall become binding upon execution and delivery by the Authority and the City, but only with the prior written consent of the Owners of a majority of the principal amount of the Bonds then Outstanding pursuant to the Indenture, provided that no such amendment shall (i) extend the payment date of any Base Rental Payments, reduce the interest component or principal component of any Base Rental Payments or change the prepayment terms and provisions, without the prior written consent of the Owner of each Bond so affected, or (ii) reduce the percentage of the principal amount of the Bonds the consent of the Owners of which is required for the execution of any amendment of this Lease Agreement or the Ground Lease.
21 4882-6871-0087v11/202040-0002
(b) This Lease Agreement and the Ground Lease and the rights and obligations of the Authority and the City hereunder and thereunder may also be amended at any time by an amendment hereto or thereto which shall become binding upon execution by the Authority and the City, without the written consents of any Owners, but only to the extent permitted by law and only for any one or more of the following purposes:
(i) to add to the agreements, conditions, covenants and terms required by the Authority or the City to be observed or performed herein or therein other agreements, conditions, covenants and terms thereafter to be observed or performed by the Authority or the City, or to surrender any right or power reserved herein or therein to or conferred herein or therein on the Authority or the City, and which in either case shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel; (ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or therein or in regard to questions arising hereunder or thereunder which the Authority or the City may deem desirable or necessary and not inconsistent herewith or therewith, and which shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel; (iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of the interest on the Bonds;
(iv) to provide for the substitution or release of a portion of the Property in accordance with the provisions of Section 10.03 hereof; (v) to provide for the issuance of Additional Bonds in accordance with Article III of the Indenture including, without limitation, to increase the Base Rental Payments payable by the City hereunder and to add or substitute property as necessary; or (vi) to make such other changes herein or therein or modifications hereto or thereto as the Authority or the City may deem desirable or necessary, and which shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel.
Section 11.08 Assignment. The City and the Authority hereby acknowledge the assignment of this Lease Agreement (except for the Authority’s obligations and its rights to give consents or approvals hereunder), and the Base Rental Payments payable hereunder, to the Trustee pursuant to the Assignment Agreement. To the extent that this Lease Agreement confers upon or gives or grants the Trustee any right, remedy or claim under or by reason of this Lease Agreement, the Trustee is hereby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder.
Section 11.09 Execution. This Lease Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same Lease Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
S-1
IN WITNESS WHEREOF, the Authority and the City have caused this Lease Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.
CITY OF WATSONVILLE
By:
TAMARA VIDES
CITY MANAGER
ATTEST:
By:
IRWIN I. ORTIZ
CITY CLERK
WATSONVILLE PUBLIC FINANCE AUTHORITY
By:
TAMARA VIDES
EXECUTIVE DIRECTOR
ATTEST:
By:
IRWIN I. ORTIZ
SECRETARY OF THE BOARD
APPROVED AS TO FORM:
City Attorney
A-1
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
B-1
EXHIBIT B
DESCRIPTION OF THE PROJECT
The design, acquisition, construction and/or installation of certain public capital improvements to be located in the City of Watsonville, including some or all of the following:
________, and other capital improvements subject to the approval of Bond Counsel.
C-1
EXHIBIT C
BASE RENTAL PAYMENT SCHEDULE
Base Rental Deposit Date
(Fifth Business Day
Prior to) Principal Component Interest Component
Total Base Rental
Payment
C-2
Base Rental Deposit Date
(Fifth Business Day
Prior to) Principal Component Interest Component
Total Base Rental
Payment
Total
Agenda Version
RECORDING REQUESTED BY:
City of Watsonville
AND WHEN RECORDED RETURN TO:
Anzel Galvan LLP
595 Pacific Avenue, 4th Floor
San Francisco, California 94133
Attention: Juan M. Galvan
[Space above for Recorder’s use.]
THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. THE ASSIGNOR IS A GOVERNMENTAL AGENCY.
ASSIGNMENT AGREEMENT
by and between
WATSONVILLE PUBLIC FINANCE AUTHORITY
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of June 1, 2025
Relating to
$[PAR]
WATSONVILLE PUBLIC FINANCE AUTHORITY
LEASE REVENUE BONDS, SERIES 2025
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”), executed and entered into as of June 1, 2025, is by and between the WATSONVILLE PUBLIC FINANCE AUTHORITY, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California (the “Authority”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States, as Trustee (the “Trustee”).
WITNESSETH:
WHEREAS, the City of Watsonville (the “City”) and the Authority desire to finance all or a portion of the design, acquisition, construction and/or installation of certain capital improvement projects in the City, including improvements to Ramsay Park and the Watsonville Civic Plaza (collectively, the “Project”);
WHEREAS, the City and the Authority 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” (the “Series 2025 Bonds”) for the purpose of financing the Project;
WHEREAS, to facilitate the issuance of the Series 2025 Bonds, the City will lease certain real property described in Exhibit A attached hereto and the improvements located thereon (the “Property”) to the Authority pursuant to a Ground Lease, dated as of the date hereof and recorded concurrently herewith (the “Ground Lease”), and the City will sublease the Property back from the Authority pursuant to a Lease Agreement, dated as of the date hereof, a memorandum of which will be recorded concurrently herewith (the “Lease Agreement”); WHEREAS, under the Lease Agreement, the City is obligated to make Base Rental Payments (as defined in the Lease Agreement) to the Authority; WHEREAS, the Authority desires to assign without recourse certain of its rights in the Ground Lease and the Lease Agreement, including its right to receive the Base Rental Payments, to the Trustee for the benefit of the owners of the Series 2025 Bonds to be issued pursuant to the Indenture, dated as of the date hereof (the “Indenture”), by and among the Authority, the City and the Trustee;
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Assignment Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Assignment Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties hereto do hereby agree as follows:
Section 1. Assignment. The Authority, for good and valuable consideration, the receipt of which is hereby acknowledged, does hereby sell, assign and transfer to the Trustee, irrevocably and
2 absolutely, without recourse, for the benefit of the owners of the Series 2025 Bonds, all of its right, title and interest in and to the Ground Lease and the Lease Agreement including, without limitation, its right to receive the Base Rental Payments to be paid by the City under and pursuant to the Lease Agreement; provided, however, that the Authority shall retain its obligations under the Lease Agreement and Ground Lease, the rights to indemnification, to give approvals and consents under the Lease Agreement and the Ground Lease (including any rights therein to approve any sale, assignment, sublease, or termination) and to payment or reimbursement of its reasonable costs and expenses under the Lease Agreement.
Section 2. Acceptance. The Trustee hereby accepts the foregoing assignment, subject to the terms and provisions of the Indenture, and all such Base Rental Payments shall be applied and the rights so assigned shall be exercised by the Trustee as provided in the Lease Agreement and the Indenture.
Section 3. Conditions. This Assignment Agreement shall impose no obligations upon the Trustee beyond those expressly provided in the Indenture.
Section 4. Further Assurances. The Authority shall make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Assignment Agreement, and for the better assuring and confirming to the Trustee, for the benefit of the owners of the Series 2025 Bonds, the rights intended to be conveyed pursuant hereto.
Section 5. Governing Law. THIS ASSIGNMENT AGREEMENT SHALL BE
GOVERNED EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF THE STATE OF CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.
Section 6. Execution. This Assignment Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same Assignment Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
S-1
IN WITNESS WHEREOF, the Authority and the Trustee have caused this Assignment Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above-written.
WATSONVILLE PUBLIC FINANCE AUTHORITY
By:
TAMARA VIDES
EXCUTIVE DIRECTOR
ATTEST:
IRWIN I. ORTIZ
SECRETARY OF THE BOARD
APPROVED AS TO FORM:
Counsel
[SIGNATURES CONTINUED ON NEXT PAGE.]
S-2
[SIGNATURE PAGE CONTINUED.]
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By:
[NAME]
AUTHORIZED REPRESENTATIVE
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF SANTA CRUZ )
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF CRUZ )
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
2 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF CRUZ )
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
3 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF CRUZ )
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
A-1
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
1 City Manager’s Office
“Working with our community to create positive impact through service with heart.” Watsonville CALIFORNIA
May 23, 2025
Laura Nunn, Senior Manager
Housing Accountability Unit, Housing Policy Development Department of Housing and Community Development
651 Bannon Street, Suite 400
Sacramento, CA 95811
Also sent via email to: [email protected]
Re: City of Watsonville Exempt Surplus Land Determination Short-term Transfer of “Leased Property” for City’s “Agency’s Use”
Dear Ms. Nunn
This letter provides documentation to the California Department of Housing and Community Development (“HCD”) of an exempt surplus land determination by the City of Watsonville (“City”) and the Watsonville Public Finance Authority (“Authority”) for "Leased Property" (defined below) consistent with HCD Surplus Land Guidelines, sections 400(e) and 104(c). As described in this letter, the “Leased Property” is exempt surplus land based on Government Code Section 54221(f)(1)(D) based on transfers from one local agency to another local agency for the receiving agency’s use.
As shown in the attached resolutions of the City and the Authority, which will be presented to their respective governing bodies for approval on May 27, 2025, the City and the Authority intend to establish a lease revenue bond to generate funding for important public purposes (Ramsay Park and City Plaza Capital Improvements). Under the terms of the proposed lease revenue bond, the City will Ground Lease City-owned “Leased Property” to the Authority, and the Authority will concurrently lease the Leased Property back to the City for the City’s ongoing governmental purposes under the Lease Agreement. To be clear, the “Leased Property” will not be developed or improved as a part of the lease revenue bonds, and the improvements funded by the lease revenue bonds are located on property that is not a part of the “Leased Property.” Since the term of the Ground Lease and the Lease Agreement may exceed 15 years (within the definition of “dispose” under Government Code Section 54221(d)(2)(B)), the City and the Authority provide this documentation of an exempt surplus land determination based on transfers to another local agency (as authorized by Government Code Section 54221(f)(1)(D)). However, since the Ground Lease and the Lease Agreement authorize no development or demolition of the Leased Property, and the City intends to continue to use the Leased Property for its existing
2 public purposes, the City and the Authority concurrently assert that the Ground Lease and the Lease Agreement are outside the definition of “dispose” pursuant to Government Code Section 54221(d)(2)(B).
The “Leased Property” includes: (i) City Hall, located at 250 Main Street; (ii) the Watsonville Parks and Community Services Building, located at 231 Union Street; (iii) the Watsonville Police Information Technology Building, located at 215 Union Street; and (iv) the Watsonville Youth Center, located at 30 Maple Street. Collectively this “Leased Property,” as referenced in this letter, is also identified in the attached documents as “Property” or “Leased Assets.” The City is currently using, and will continue to use, the "Leased Property" for core "City use" purposes. City Hall provides a venue for meetings of the City Council and related local agencies as well as offices for City employees. The Parks and Community Services Building provides office and meeting space for City employees of those departments providing public service to the community. The Police Information Technology Building provides critical technology infrastructure for public safety purposes. The Youth Center provides publicly available space for recreational, cultural, and after-school activities with a focus on serving middle and high school students.
While the City Council and the Authority Board of Directors will consider approval of the attached resolutions on May 27, 2025, the Ground Lease and the Lease Agreement will not be executed and effective until after a planned close for the lease revenue bond of June 26, 2025.
As you see in the attached Resolution of the City Council, Section 2, second paragraph:
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.
As you see in the attached Resolution of the Authority, Section 2, second paragraph:
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 provide facilities for City Hall, the Community Services Building, Police Information Technology, and Youth Center.
3 275 Main Street, Suite 400, Watsonville, CA 95076
w a t s o n v i l l e . g o v
The attached documents provide the details of the transaction between the City and the Authority by which the City will Ground Lease the Leased Property to the Authority, and the Authority will concurrently lease the Leased Property back to the City under the Lease Agreement (by which the City will make lease payments to the Authority to fund the “Project” improvements for Ramsay Park and the City Plaza Capital Improvements). As summarized above, the attached documents confirm that the proposed Ground Lease and Lease Agreement are each a transfer from one local agency to another local agency for the receiving agency’s use. In the case of the Ground Lease from the City to the Authority, the Authority will use the Leased Property as a source of revenue for financing the improvement of important public improvements for the “Project.” In the case of the Lease Agreement from the Authority to the City, the City will continue to use the Leased Property for its existing purposes of providing space for public meetings, employee offices, and community programs. Therefore, the entire transaction is an exempt surplus land transaction in accordance with Government Code Section 54221(f)(1)(D):
“Surplus land that a local agency is transferring to another local … agency… for the receiving agency’s use….”
The City and the Authority respectfully request confirmation from HCD that the proposed Ground Lease and Lease Agreement, once executed, are an exchange of exempt surplus land under Government Code Section 54221(f)(1)(D).
Sincerely,
Tamara Vides
City of Watsonville, City Manager
cc: Marissa Duran, Administrative Services Director
Samantha W. Zutler, City Attorney
Michael W. Barrett, Burke, Williams & Sorensen Partner
Attachments: City Resolution
Authority Resolution
Ground Lease
Lease Agreement
Assignment
Bond Purchase Agreement
Indenture
Preliminary Official Statement
Watsonville Public Finance Authority
Lease Revenue Bonds, Series 2025
May 27, 2025
Financing Team
Urban Futures, Inc.
Municipal Advisor
Anzel Galvan LLP
Bond Counsel and Disclosure Counsel
Samuel A. Ramirez & Co., Inc
Underwriter
U.S. Bank
Trustee
Plan of Finance: 2025 Lease Revenue Bonds
Issuer
• Watsonville Public Finance Authority
• A joint-powers authority between the City and the Industrial Development Authority of the City of Watsonville
Purpose • Generate $12 million in proceeds to finance a portion of the costs of the design, acquisition, construction and installation of certain public capital improvements to the City’s Ramsay Park and City Plaza, and related infrastructure improvements and pay the costs of issuing the Bonds Security • Semi-annual lease payments made by the City for use and occupancy of the leased property • The Authority assigns its right to receive lease payments from the City to the Trustee to pay debt service
• City agrees to annually budget and appropriate lease payments • Standard general and hazard insurance plus 2 years of rental interruption insurance • City’s obligation to make lease payments will be reduced, in full or in part, to the extent there’s substantial interference with its right to use and occupy any portion of the leased property Leased Property • City Hall, Youth Center, Parks and Community Services Building, and Police/IT Building
Projects
Ramsay Park Renaissance Project (City’s largest park)
• Improvements include renovated Sotomayer soccer field, new multi-use sports field, inclusive playground, dog play areas, and a 3,500-sf nature center • $33 million total project cost
• Funded by Measure R, State grants, ARPA funds, the City of Watsonville General Fund, and bond proceeds
City Plaza Expansion and Revitalization Project
• Renovation of gazebo and historic fountain, enhanced landscaping and lighting • New permanent stage with seating, picnic areas, play station, public art, and circular walkway • Additional upgrades include bottle-filling station, bike parking, upgraded electrical infrastructure, and interpretive signage
• Funded by Measure R, State grants and bond proceeds
Preliminary Financing Details*
Estimated par or principal amount of
$11.375 million
• Project fund deposit of $12 million
Debt Structure
• Level annual debt service of approximately
$1,485,201 with final maturity in 2035
• Payment dates of May and November, principal
paid in May
• Current market true interest cost of 3.47%
Not-to-Exceed Parameters in Resolution
• Not-to-exceed parameters of principal ($13
million), true interest cost (4.5%), and
Underwriter’s fee (0.8% of par) allow some
room should market conditions shift
Sources and Uses
2025 Bonds
Sources
Par Amount $11,375,000
Net Premium 962,749
Total $12,377,749
Uses
Project Fund $12,000,000
Costs of Issuance 337,749
Total $12,337,749
* Preliminary, subject to change
City
Council
and
Board of
Directors
Actions
City Council and Board of Directors consider adoption of Resolutions to authorize/approve issuance of Lease
Revenue Bonds, Series 2025 (not to exceed $13 million), approve financing team, and approve final form of
financing documents
City Documents
• City Council Resolution
• Ground Lease
• Lease Agreement
• Indenture
• Bond Purchase Agreement
• Preliminary Official
Statement
• Continuing Disclosure
Certificate
Board Documents
• Authority Resolution
• Ground Lease
• Lease Agreement
• Assignment Agreement
• Indenture
• Bond Purchase Agreement
• Preliminary Official
Statement
Financing
Schedule:
Next Steps
May 22 Rating Meeting
May 30 Rating Received
Jun 2* Preliminary Official Statement Posted
Jun 10* Bond Sale
Jun 26* Closing (Bond Proceeds Received)
* Preliminary, subject to change Page 625 of 793
1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, May 27, 2025
TO: CITY COUNCIL
WRITTEN BY: PARKS SUPERINTENDENT MEDINA
RECOMMENDED BY: DEPUTY CITY MANAGER CALUBAQUIB
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: RESOLUTIONS CONFIRMING DIAGRAMS, ASSESSMENTS, AND LEVYING ASSESSMENTS FOR FISCAL YEAR 2025-2026 FOR BAY BREEZE LLMAD NO.
PK-03-02, VISTA MONTANA LLMAD PK-03-03, AND GONZALES STREET ALLEYWAY LLMAD NO. PK-94-1
RECOMMENDATION:
Staff recommend that the City Council adopt:
1. A resolution confirming the diagrams, assessments, and levying the assessments for Fiscal Year 2025- 2026 for the Bay Breeze Subdivision Landscaping and Lighting Maintenance Assessment District No.
PK-03-02,
2. A resolution confirming the diagrams, assessments, and levying the assessments for Fiscal Year 2025- 2026 for the Vista Montaña Subdivision Landscaping and Lighting Maintenance Assessment District (LLMAD) No. PK-03-03,
3. A resolution confirming the diagrams, assessments, and levying the assessments for Fiscal Year 2025- 2026 for the Gonzales Street Alley Landscaping and Lighting District (Gonzales LLMAD) No. PK-94-1.
DISCUSSION:
During the April 21, 2025, City Council meeting, the City Council accepted the Engineer’s Reports for all LLMAD’s for Fiscal Year 2025-2026 and set the public hearing for May 27, 2025, to confirm the diagrams, assessments, and levy the assessments for the three LLMADs. The Engineer’s Reports are on file in the City Clerk’s office.
Bay Breeze LLMAD
2 The Bay Breeze Subdivision is located at the southwest corner of Ohlone Parkway and Harkins Slough Road.
The Bay Breeze Landscaping and Lighting Maintenance Assessment District (LLMAD) program includes the following:
1. Maintenance and replacement of the street trees within the subdivision.
2. Operation, maintenance, repair, and replacement of the detention basins and the detention basin access roads within the subdivision.
3. Operation, maintenance, repair, and replacement of the perimeter fencing around the entire subdivision.
4. Maintenance and replacement of the plantings done as part of the wetland mitigation plan.
5. Maintenance of the environmental management parcel created within the subdivision.
6. Maintenance, repair, and replacement of the landscaping within the public right-of-way abutting and within the subdivision, including the Ohlone Parkway medians.
7. Operation, maintenance, repair and replacement of the sewer pump station.
8. Maintenance of the graffiti coatings on the public exposure of the perimeter walls along the district boundaries.
The Bay Breeze Subdivision LLMAD is comprised of 114 single family residential parcels. The annual costs for the operation, maintenance, and servicing of landscaping and street lighting improvements are apportioned to each parcel within the district in proportion to the EDU’s (Equivalent Dwelling Unit) assigned to the parcel as a percentage of the total number of EDU’s assigned to all parcels within the district.
Staff held a community meeting for Bay Breeze property owners to inform them of LLMAD background, maintenance, and budget status on May 8, 2025.
The amount collected in assessments for the Bay Breeze LLMAD only allows for a scaled back service from our landscape contractor and does not provide for the full scope of maintenance currently outlined in the Engineer’s Report. City staff will be reaching out to the Bay Breeze residents in the next year to begin conversations about desired service levels and a potential assessment increase.
Staff is recommending that Council confirm the Diagrams, Assessments, and Levying Assessments, which recommends a 2.4% CPI increase for 2025-26 to maintain the status quo.
Vista Montaña LLMAD
The Vista Montaña Subdivision is located off East Lake Avenue and adjacent to Ann Soldo Elementary School and the Bay Village subdivision. The Vista Montaña Subdivision Landscaping and Lighting Maintenance Assessment District includes the following:
1. Regular maintenance, repair, and replacement of all facilities within the agricultural buffer area (except the street and utilities) which includes but is not limited to, the landscaping, signage, perimeter wall, retaining walls, pedestrian path and erosion control plantings within or adjacent to the detention basins and drainage swale.
2. Operation, maintenance, repairs, and replacement of and power for the street lighting within the district.
3. Regular maintenance, repair, and replacement of the parkway strip and street trees on Cipres, Roble, Arce, Manzana, Cirvelo, Cereze, and Secoya Streets and Vista Montaña, Franich, and Marcela Drives.
3 4. Operation, maintenance, repair, and replacement of the storm drain detention basins, drainage channel, drainage facilities, and erosion control measures within the agricultural buffer, including the storm drain culvert crossing Highway 152 and the inlet structure on the west side of Highway 152.
5. Regular maintenance, repair, and replacement of the landscaping and perimeter wall along the Highway 152 frontage adjacent to the district boundaries, including graffiti removal.
6. Regular maintenance, repair, and replacement of the pedestrian/bike path connecting Secoya Street and McKenzie Avenue, adjacent to the district boundaries.
7. Regular maintenance, repair, and replacement of pedestrian pathways located at the end of Roble Street, at the end of Cirvelo Street, within the agricultural buffer area and parallel to Bridge Street, on the south side of the town homes parallel to Franich Drive and on the west side of the town homes parallel to Marcela Drive.
The Vista Montaña Subdivision LLMAD is comprised of two Zones: A and B. Zone A benefits all parcels within the district which includes, for example, the street lighting installed along Highway 152, the landscape improvements along Highway 152 and the agricultural buffer area. Zone B benefits those parcels within the single-family residential area primarily and includes the maintenance of the street end caps, the park strips and street lighting.
The Assessment District is based on the total number of Equivalent Dwelling Units (EDU’s) and maximum annual assessments are included in the Engineer’s Report.
Staff held an in-person community meeting at nearby Ann Soldo Elementary School for Vista Montaña property owners to inform them of LLMAD background, maintenance, and budget status on May 6, 2025.
The Vista Montaña LLMAD is severely underfunded. City staff worked with a consultant from 2023-2024 to formulate and present an option in July of 2024 to increase the assessment and provide the level of service that the community has demanded. The proposed overlay assessment was voted down by property owners. City staff has since reduced non-essential maintenance to minimal levels in order to continue service to critical infrastructure and to replenish the reserve account. This was described to property owners as an expected outcome in the community meetings of 2024.
Staff is recommending that Council confirm the Diagrams, Assessments, and Levying Assessments, which recommends a 2.4% CPI increase for 2025-26 to maintain the status quo.
Gonzales Street Alleyway LLMAD
The Gonzales Street Alleyway LLMAD was established to assist the residents bordering the alleyway and adjoining small parcel to cooperatively maintain this parcel that is now owned by the City but benefits its neighbors. The annual cost of $600 to maintain the area was spread among the 17 parcels with one parcel not immediately adjacent to the alley paying slightly less.
The amount collected in assessment for the Gonzalez LLMAD only allows for a partial service to happen once a year from our contractor. City staff will be reaching out to the Gonzalez residents at the near future to begin conversations about desired service levels and a potential assessment increase.
Staff is recommending that Council confirm the Diagrams, Assessments, and Levying Assessments, which does
4 not include a CPI increase for 2025-26.
STRATEGIC PLAN:
The Assessment District addresses the City Council’s strategic goals of:
02-Infrastructure & Environment – Maintaining LLMAD assets per the development agreements and Engineer’s Study and Reports sustains infrastructure.
05-Public Safety – Maintaining critical lighting, safety sighting, drainage and pump station assets protects the safety of residents.
FINANCIAL IMPACT:
Bay Breeze LLMAD (0360-810)
In 2024-2025 the assessment was $627.38 per EDU and the total District assessment was $71,521.
For Fiscal Year 2025-2026, the total annual assessment per EDU will be increased to $642.44 and the total District assessment will be increased to $73,237.66, which is the maximum allowed per the Engineer's Report and reflects the increase in the Consumer Price Index of 2.4%. This amount includes $24,739 for annual maintenance and the remainder sum of $48,499 will be placed in a reserve for the replacement of trees, lights, sewer pump station, and perimeter fencing.
Vista Montaña LLMAD (0354-959)
In Fiscal Year 2024-2025 the total annual assessment was $157,646.91. The assessment for single family dwelling units was $574.84 per unit, the assessment for townhomes was $459.88 per unit and the assessment for apartments was $158.58 per unit.
For Fiscal Year 2025-2026 the total annual assessment will be increased to $161,428.44 to reflect the 2.4% increase in the consumer price index and includes funds in the amount of $71,130 for annual maintenance and $90,298 for the reserve, which provides for replacement costs of such assets as lighting or street trees based on current EDU’s within the district. The assessment for single-family dwelling units will be $588.63 per unit, the assessment for townhomes will be $470.91 per unit, and the assessment for apartments will be $162.39 per unit.
Gonzales LLMAD (0291-604)
The total of $600 in assessments will go towards maintenance costs currently under contract with K&D Landscaping Inc., including maintenance costs allocated toward plant care, mowing, clearing of vegetation, and/or general alleyway maintenance.
ALTERNATIVE ACTION:
The Council could elect to:
5 1. Not confirm the Diagrams, Assessments, and Levying Assessments, thereby not adjusting assessments.
2. Confirm the Diagrams and Assessments, and not confirm Levying Assessments, thereby not adjusting assessments. Not adjusting assessments for CPI will continue to increase deficits, putting annual maintenance budgets farther behind due to the continued rising costs of labor and maintenance.
ATTACHMENTS AND/OR REFERENCES (IF ANY):
None.
Reso No. (CM)
Meeting Date: 052725 SWZ ______ TV ______ PCS ______ 1
RESOLUTION NO.__________ (CM)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE CONFIRMING DIAGRAM AND ASSESSMENT AND
LEVYING ASSESSMENT FOR FISCAL YEAR 2025-2026 FOR THE BAY
BREEZE SUBDIVISION LANDSCAPING AND LIGHTING MAINTENANCE
ASSESSMENT DISTRICT
Assessment District No. PK-03-02
(Pursuant to the Landscaping and Lighting Act of 1972)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:
1. This action 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 pursuant to Chapter 3 (California Streets and Highways Code Sections 22620 et seq.) of the Landscaping and Lighting Act of 1972, the City Council directed the City Public Works and Utilities Assistant Director, Engineer of Work for the Bay Breeze Subdivision Landscaping and Lighting Maintenance Assessment District No. PK-03-02, to prepare and file an annual report for Fiscal Year 2025-2026.
3. That the Council on March 25, 2025, adopted Resolution No. 84-25 (CM) directing the filing of the 2025-2026 Annual Engineer's Report for Assessment District No.
PK-03-02.
4. That the Council on April 21, 2025, adopted Resolution No. 107-25 (CM), accepting the Engineer’s Report.
5. That the Council on April 21, 2025, adopted Resolution No. 108-25 (CM), a Resolution of Intention to levy and collect assessments within the assessment district for
Reso No. (CM)
Meeting Date: 052725
2 Fiscal Year 2025-2026 and set a public hearing to be held on May 27, 2025, the City Council will conduct a public hearing on the proposed annual assessment. The public 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. Notice of the hearing was given in the time and manner required by law.
6. That at the public hearing, the City Council afforded to every interested person an opportunity to protest the annual report either in writing or orally, and the City Council has considered any such protest.
7. That the City Council hereby confirms the annual report of the Engineer of Work accepted by Resolution No. 107-25 (CM) on April 21, 2025.
8. That the City Council hereby confirms the Diagram and Assessment and hereby levies the assessment set forth on Exhibit “A,” attached herein and incorporated hereto, for Fiscal Year 2025-2026.
*******************************
Exhibit "A"
Bay Breeze Landscaping and Lighting Maintenance Assessment District 2025-26
Property Owner List and Assessment Roll
Asmnt
No.
APN OWNER Owner Address City ST ZIP Asmnt Amount
1001 018-601-01
WINTER MICHAEL L & MONICA S H/W
JWIT 116 PELICAN DR WATSONVILLE CA 95076 $ 642.44
1002 018-601-02
SANDS CHRISTOPHER F & WINDY H/W
CP RS 112 PELICAN DR WATSONVILLE CA 95076 $ 642.44
1003 018-601-04 CAMACHO JOSE PATRICIO 108 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1004 018-601-05 ARRATIA EDWARD U/M 104 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1005 018-601-06 RAMIREZ PHILLIP NICHOLAS & JENNIFER 100 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1006 018-601-07 LOPEZ DOLORES CASTRO U/W 96 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1007 018-601-10
ALCANTAR MARCELINO & MARIA H/W
JT 4 EGRET LN WATSONVILLE CA 95076 $ 642.44
1008 018-601-09 BAKER MICHAEL A & COURTNEY N 8 EGRET LN WATSONVILLE CA 95076 $ 642.44 1009 018-601-08
SAMMS CHARLIE FRANCIS JR &
KATHLEEN YEDNAK 1760 HAMES RD APTOS CA 95003 $ 642.44
1010 018-602-01 DIAZ NANCY D U/W JT ETAL 21 EGRET LN WATSONVILLE CA 95076 $ 642.44 1011 018-602-02 HERNANDEZ JOSE & BEATRIZ 1180 MARILYN LN AROMAS CA 95004 $ 642.44 1012 018-602-03 BHATNAGAR SANJAY M/M SS 13 EGRET LN WATSONVILLE CA 95076 $ 642.44 1013 018-602-04 ROCHA ARTURO 9 EGRET LN WATSONVILLE CA 95076 $ 642.44 1014 018-602-05 TEJAM ELIEZER T & ELISA H/W JT 5 EGRET LN WATSONVILLE CA 95076 $ 642.44 1015 018-611-06 MUNIZ JOSE E MORALES 25 YARRO CT WATSONVILLE CA 95076 $ 642.44 1016 018-611-05 RAMIREZ HERMOSILLO CALIXTO 21 YARRO CT WATSONVILLE CA 95076 $ 642.44 1017 018-611-04
VELAZQUEZ ERNESTO SANTIAGO
REBOLLAR 17 YARRO CT WATSONVILLE CA 95076 $ 642.44
1018 018-611-01
KAJIHARA KEVIN KENICHI & JEE EUN
H/W CP RS ETAL 6 VISTA ST WATSONVILLE CA 95076 $ 642.44 1019 018-611-02 PIMENTEL JORGE & JOSEFINA H/W JT 56 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1020 018-611-03
VILLARREAL ARMANDO C & DEBBIE B
H/W JT 52 PELICAN DR WATSONVILLE CA 95076 $ 642.44
1021 018-613-08 COLLAZO ANTONIA 4 YARRO CT WATSONVILLE CA 95076 $ 642.44 1022 018-613-07 PENNINGTON ELIZABETH JULIE 150 FOX CT SCOTTS VALLEY CA 95066 $ 642.44 1023 018-613-06 SANTOS CHAVEZ LUS ENEDINA 12 YARRO CT WATSONVILLE CA 95076 $ 642.44 1024 018-613-05 STRUTHERS EDITHA & JERRY A 16 YARRO CT WATSONVILLE CA 95076 $ 642.44 1025 018-613-04 FERNANDEZ GILBERTO R H/W JT ETAL 20 YARRO CT WATSONVILLE CA 95076 $ 642.44 1026 018-613-03 NANDY RAJEEV 24 YARRO CT WATSONVILLE CA 95076 $ 642.44 1027 018-613-02 GOMEZ CARLOS L & FLAVIA B H/W JT 28 YARRO CT WATSONVILLE CA 95076 $ 642.44 1028 018-613-01 FIGUEROA JOSE LUIS 32 YARRO CT WATSONVILLE CA 95076 $ 642.44 1029 018-613-21 PATEL RAKSHIT V & RUPAL R 4 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1030 018-613-20 BRANDT HERBERT M & TERI L 8 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1031 018-613-19 JUAREZ-CAHUE FRANCISCO H/W JT ETAL 12 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1032 018-613-18 SLADE DIANNE 16 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1033 018-613-17 MACERI EILEEN TRUSTEE ETAL 20 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1034 018-613-16 JENNINGS PHILLIP E & TINA C H/W JT 24 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1035 018-613-15 SANCHEZ ROSA M M/W SS 28 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1036 018-613-14 ORTIZ JUAN C H/W JT ETAL 32 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 Exhibit "A" Page 634 of 793
1037 018-613-09 DEWALD CELESTE S W/H JT ETAL 20 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1038 018-613-10 MARQUEZ JAIME 16 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1039 018-613-11 SANCHEZ JACARANDA MEDINA 12 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1040 018-613-12 DURAN PEDRO RODRIGUEZ 8 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1041 018-613-13 ELARCO JAIME C & NIEVES H/W JT 4 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1042 018-614-01 HERNANDEZ ROCIA 5 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1043 018-614-02 CARRILLO MIGUEL 9 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1044 018-614-03 ROCHA JOSE G H/W JT ETAL 13 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1045 018-614-04 SALAZAR JUAN B U/M JT ETAL 17 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1046 018-614-05
BAJAN MATTHEW C & MARIA DASILVA
H/W JT 21 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44
1047 018-614-06 CATTERALL LISA G 25 KINGFISHER DR WATSONVILLE CA 95077 $ 642.44 1048 018-614-07 LEMOSS CHRISTIAN D 29 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1049 018-614-08 JIMENEZ REYES & LIDIA H/W JT 33 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1050 018-621-01 TORRES ERNESTO & TERESA F 37 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1051 018-621-02 RETTNER SANDRA 41 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1052 018-621-03 VELEZ NANCY Y 45 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1053 018-621-04 SINGH KARINVIR 49 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1054 018-621-05 LARIOS FORTINO & MARIA 53 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1055 018-621-06
MONCOVICH WILLIAM N & KAREN S
TRUSTEES 255 FIELDBROOK LN WATSONVILLE CA 95076 $ 642.44 1056 018-621-07 LARIOS OSWALDO 61 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1057 018-621-08 ERICKSON MARK 3085 AGUAZUL DR SOQUEL CA 95073 $ 642.44 1058 018-621-09 ZHANG XIANG 69 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1059 018-621-10 COLLAZO JULIAN U/M 73 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1060 018-621-11 DRAAYER GERALD F & BAONA G 77 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1061 018-621-12 FERNANDO ELLEN M 244 STANYAN ST SALINAS CA 93907 $ 642.44 1062 018-621-13 GLYNN STEPHEN MICHAEL & JULIE 85 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1063 018-621-14 CHAU KING & MEY C 89 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1064 018-621-15 CONNELL JOSEPH IRI & DEBORAH 93 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1065 018-621-16 FIGUEROA CARLOS & HELEN H/W JT 97 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1066 018-621-17 JIMENEZ JOSE E & MARIBEL H/W JT 101 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1067 018-621-18
WALTERS DAVID BYRON & DINAH
ABBOTT 105 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44
1068 018-621-19 THOMAS ADAM U/M 109 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1069 018-621-20 ERICKSON MARK 3085 AGUAZUL DR SOQUEL CA 95073 $ 642.44 1070 018-621-21 RAMIREZ EDWARD H/W JT ETAL 117 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1071 018-622-01 LANDRY SEAN R & CYNTHIA M 88 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1072 018-622-02 CHAU YONG C & SUSAN 84 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1073 018-622-03 ZAMORA ARNULFO & MARIA G H/W JT 80 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1074 018-622-04 KRISTICH KRISTO 76 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1075 018-622-05 PRESLEY FLORENCIA SANCHEZ TRUSTEE 72 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1076 018-622-06 GALVAN ALFONSO & SUSANA C H/W JT 68 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1077 018-622-07 ANTONINO ROBERT & CHRISTINA M 64 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 Exhibit "A"
1078 018-622-08
MONDRAGON EVENCIO & LUZMARIA
H/W JT 60 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44
1079 018-622-09 GUZMAN CARLOS H/W JT ETAL 56 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1080 018-622-10 MILLAN GERMAN ROLDAN S/M JT ETAL 5 HERON CT WATSONVILLE CA 95076 $ 642.44 1081 018-622-11 MENDOZA SERVANDO M/M SS 9 HERON CT WATSONVILLE CA 95076 $ 642.44 1082 018-622-12 CHANG JONG HEE & GU HEE H/W CP RS 13 HERON CT WATSONVILLE CA 95076 $ 642.44 1083 018-623-01
MONROY BERONICA & GUADALUPE J
W/H JT 12 HERON CT WATSONVILLE CA 95076 $ 642.44
1084 018-623-02 COVELL ROSE M U/W AS JT ETAL 8 HERON CT WATSONVILLE CA 95076 $ 642.44 1085 018-623-03 ARENAS LUIS FRANCISCO ARENAS 4 HERON CT WATSONVILLE CA 95076 $ 642.44 1086 018-623-04 DENG FANG W/H JT ETAL 3596 HART CMN FREMONT CA 94538 $ 642.44 1087 018-623-05 MIRANDA CAROL B & EFRAIN W/H JT 48 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1088 018-623-06
CORTES FRANCISCO C & ANGELITA H/W
JT 44 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44
1089 018-623-07 LOWETH CATHERINE M U/W 40 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1090 018-623-08 DVORAK JANET A 36 KINGFISHER DR WATSONVILLE CA 95076 $ 642.44 1091 018-623-09 MARTINEZ ARIEL M/M SS 9 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1092 018-623-10 CANALES HECTOR J & MARIA M H/W JT 13 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1093 018-612-12 KOLBACH GERRIT H & JODY L 17 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1094 018-612-11 DANKERT ROBERT TRUSTEE 21 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1095 018-612-10
LANDSCHOOT WILLIAM F & HILDEGARD
FELLOW 3061 STRAWBERRY HIL PEBBLE BEACH CA 93953 $ 642.44 1096 018-612-09 TAYLOR JEFFREY S 29 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1097 018-612-08 MATA GABRIELLE 33 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1098 018-612-07 LEVINE BERNARD R HARRIET N 815 CLINTONIA AVE SAN JOSE CA 95125 $ 642.44 1099 018-612-06 WILKENNING CHRISTY 41 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1100 018-612-05 CHOWDHURY SAMYAK ROY 45 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1101 018-612-04
JONES GREGORY R & ANN-MARIE D
H/W JT 2 OAK RD SANTA CRUZ CA 95060 $ 642.44
1102 018-612-03 BENTLEY THOMAS K & HEATHER L 53 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1103 018-612-02 JARVIS MICHAEL A 57 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1104 018-612-01
DACQUIGAN JUAN T & SUSANA S H/W
JT 61 PELICAN DR WATSONVILLE CA 95076 $ 642.44
1105 018-603-10 BIONDI ANTONIO D & SUSAN M 65 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1106 018-603-09 JACKSON JOHN G & ANNE T 69 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1107 018-603-08 FLOWERS SHERI 73 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1108 018-603-07 STEINBERG LEE 9006 SOQUEL DR APTOS CA 95003 $ 642.44 1109 018-603-06 HURLEY KEAN & SHEILA H/W CP RS 125 VIA MEDICI APTOS CA 95003 $ 642.44 1110 018-603-05 ALBERTA STEPHEN NELSON 85 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1111 018-603-04 HANSEN PAUL & KATHLEEN 89 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1112 018-603-03 SCHACHER NICK 93 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1113 018-603-02 RUBIO ANTHONY & LORRIE H/W JT 97 PELICAN DR WATSONVILLE CA 95076 $ 642.44 1114 018-603-01 BRETAN PETER N & MELANIE JEAN 225 MAIN ST 2780 WATSONVILLE CA 95076 $ 642.44 TOTAL ASSESSMENT FY 25/26 $73,237.66
Exhibit "A"
Reso No. (CM)
Meeting Date: 052725 SWZ ______ TV ______ PCS ______ 1
RESOLUTION NO.__________ (CM)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE
CONFIRMING DIAGRAM AND ASSESSMENT AND LEVYING
ASSESSMENT FOR FISCAL YEAR 2025-2026 FOR THE VISTA MONTAÑA
SUBDIVISION LANDSCAPING AND LIGHTING MAINTENANCE
ASSESSMENT DISTRICT
Assessment District No. PK-03-03
(Pursuant to the Landscaping and Lighting Act of 1972)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:
1. This action 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 pursuant to Chapter 3 (California Streets and Highways Code Sections 22620 et seq.) of the Landscaping and Lighting Act of 1972, the City Council directed the City Public Works and Utilities Assistant Director, Engineer of Work for the Vista Montaña Subdivision Landscaping and Lighting Maintenance Assessment District No. PK-03-03, to prepare and file an annual report for Fiscal Year 2025-2026.
3. That the Council on March 25, 2025, adopted Resolution No. 85-25 (CM) directing the filing of the 2025-2026 Annual Engineer's Report for Assessment District No.
PK-03-03.
4. That the Council on April 21, 2025, adopted Resolution No. 109-25 (CM), accepting the Engineer’s Report.
5. That the Council on April 21, 2025, adopted Resolution No. 110-25 (CM), a Resolution of Intention to levy and collect assessments within the assessment district for
Reso No. (CM)
Meeting Date: 052725
2 Fiscal Year 2025-2026 and set a public hearing to be held on May 27, 2025. The public 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. Notice of the hearing was given in the time and manner required by law.
6. That at the public hearing, the City Council afforded to every interested person an opportunity to protest the annual report either in writing or orally, and the City Council has considered any such protest.
7. That the City Council hereby confirms the annual report of the Engineer of Work accepted by Resolution No. 109-25 (CM) on April 21, 2025.
8. That the City Council hereby confirms the Diagram and Assessment and hereby levies the assessment set forth on Exhibit “A,” attached herein and incorporated hereto, for Fiscal Year 2025-2026.
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16 Exhibit "A"Page 1 of 8 Page 639 of 793
FY 2025-26
ASSESSMENT ROLL
Vista Montaña Landscaping and Lighting Maintenance Assessment District 2025/26 Property Owner List and Assessment Roll
APN Owner Owner Address City ST Zip Assessment
Amount*
017-741-01 HSEI REX C & JUDITH S 240 VENTANA WAY APTOS CA 95003 $588.63 017-741-02 MELGOZA YOLANDA S/W 705 VISTA MONTANA DR WATSONVILLE CA 95076 $588.63 017-741-03 FERNANDEZ ESTHER U/W JT ETAL 709 VISTA MONTANA DR WATSONVILLE CA 95076 $588.63 017-741-04 RYAN JAMES & SONIA H/W JT 713 VISTA MONTANA DR WATSONVILLE CA 95076 $588.63 017-741-05 YIN ALBERTO & TERESITA H/W JT 2290 MURIEL DR SANTA CRUZ CA 95062 $588.63 017-741-06 YIN ALBERTO & TERESITA 2290 MURIEL DR SANTA CRUZ CA 95062 $588.63 017-741-07 HOPKINS WM E & R S 93 ALDRIDGE LN WATSONVILLE CA 95076 $588.63 017-741-08 SINGH PARMENDER 729 VISTA MONTANA DR WATSONVILLE CA 95076 $588.63 017-741-09 GARCIA JUAN 733 VISTA MONTANA DR WATSONVILLE CA 95076 $588.63 017-741-10 MICHEL LUIS ALBERTO LORETO 737 VISTA MONTANA DR WATSONVILLE CA 95076 $588.63 017-741-11 RAYGOZA JAIME E & MAURA T 741 VISTA MONTANA DR WATSONVILLE CA 95076 $588.63 017-741-12 PEREZ ELEAZAR RUIZ & ALEJANDRA 745 VISTA MONTANA DR WATSONVILLE CA 95076 $588.63 017-741-13 NAVARRO MARIA TRUSTEE 140 KINGSTON DR WATSONVILLE CA 95076 $588.63 017-741-14 SUPPES JOHN B TRUSTEE P O BOX 60970 PALO ALTO CA 94306 $470.91 017-741-15
CADWELL KENNETH RICHARD & ROSSENA
VILLAMERO 757 VISTA MONTANA DR WATSONVILLE CA 95076 $470.91 017-741-16 SHERRILL STEVEN S/M 761 VISTA MONTANA DR WATSONVILLE CA 95076 $470.91 017-741-17 JUAREZ RICARDO S/M 101 FRANICH DR WATSONVILLE CA 95076 $470.91 017-741-18 WHITELAW RYAN J & CLAIRE E 4455 NOVA DR SANTA CRUZ CA 95062 $470.91 017-741-19 LUMICAO MARIA THERESA U/W 762 ARCE ST WATSONVILLE CA 95076 $470.91 017-741-20 CABRALES EFREN CASTILLO 758 ARCE ST WATSONVILLE CA 95076 $470.91 017-741-21 GARCIA ISRAEL H/W JT ALL AS TC ETAL 754 ARCE ST WATSONVILLE CA 95076 $470.91 017-741-22 MELGOZA YOLANDA U/W 750 ARCE ST WATSONVILLE CA 95076 $588.63 017-741-23 VARGAS ERNESTO & VERONICA H/W JT 746 ARCE ST WATSONVILLE CA 95076 $588.63 017-741-24 TAYTAYON ELISEO MENDOZA 742 ARCE ST WATSONVILLE CA 95076 $588.63 017-741-25 LLANOS JESUS ENRIQUE 738 ARCE ST WATSONVILLE CA 95076 $588.63 017-741-26 OROZCO LETICIA & GABRIEL 734 ARCE ST WATSONVILLE CA 95076 $588.63 017-741-27 VAZQUEZ BLANCA & JOSE L W/H JT 730 ARCE ST WATSONVILLE CA 95076 $588.63 017-741-28 ESPINO NOEL 726 ARCE ST WATSONVILLE CA 95076 $588.63 017-741-29 NAREZ DAVID R H/W JT ETAL 722 ARCE ST WATSONVILLE CA 95076 $588.63 Exhibit "A"
017-741-30 MARTINEZ RICHARD & SILVIA H/W JT 718 ARCE ST WATSONVILLE CA 95076 $588.63 017-741-31 ESPINOZA ABEL & MARITA H/W JT 714 ARCE ST WATSONVILLE CA 95076 $588.63 017-741-32 MORAN PABLO JR & VERONICA MARIE H/W CP RS 710 ARCE ST WATSONVILLE CA 95076 $588.63 017-741-33 MEDINA LUIS J H/W JT ETAL 706 ARCE ST WATSONVILLE CA 95076 $588.63 017-741-34 GERRERO RAUL CASTORENA 702 ARCE ST WATSONVILLE CA 95076 $588.63 017-742-01 SOLORIO ALFONSO G & MAXIMINA 142 2nd ST WATSONVILLE CA 95076 $588.63 017-742-02 MONTEJANO JORGE PEREZ 705 ARCE ST WATSONVILLE OH 95076 $588.63 017-742-03 ZAMORA MARISOL. S/W 709 ARCE ST WATSONVILLE CA 95076 $588.63 017-742-04 PEREZ PABLO GALLO 713 ARCE ST WATSONVILLE CA 95076 $588.63 017-742-05 SEGURA LEO M/M SS P O BOX 1617 FREEDOM CA 95019 $588.63 017-742-06 ARTEAGA JUAN & MIREYA H/W JT 721 ARCE ST WATSONVILLE CA 95076 $588.63 017-742-07 FERNANDEZ GONZALO TRUSTEES ETAL 725 ARCE ST WATSONVILLE CA 95076 $588.63 017-742-08 RUSSELL PAUL F & DEBORA AN H/W JT 729 ARCE ST WATSONVILLE CA 95076 $588.63 017-742-09 DIAZ RAFAEL R & SILVIA M H/W JT 733 ARCE ST WATSONVILLE CA 95076 $588.63 017-742-10 IBARRA MARIA GUADALUPE REYNA 739 ARCE ST WATSONVILLE CA 95076 $588.63 017-742-11 HERNANDEZ JAVIER H/W JT ETAL 741 ARCE ST WATSONVILLE CA 95076 $588.63 017-742-12 PEREIRA NELLIE A U/W JT EAL 745 ARCE ST WATSONVILLE CA 95076 $588.63 017-742-13 BURBATT ROBERT P & WENDY C 749 ARCE ST WATSONVILLE CA 95076 $588.63 017-742-14 DAVIS MELANI L TRUSTEE 753 ARCE ST WATSONVILLE CA 95076 $470.91 017-742-15 PENA LEONARDO & ANABELL L H/W JT 757 ARCE ST WATSONVILLE CA 95076 $470.91 017-742-16 CLOUDBREAK PROPERTIES LLC 600 CELESTE WAY SANTA CRUZ CA 95065 $470.91 017-742-17 GREGERIO MARIA N M/W SS PO BOX 1202 WATSONVILLE CA 95077 $470.91 017-742-18 CAVANAGH MARSHA 408 PILGRIM DR CAPITOLA CA 95010 $470.91 017-742-19 GUTIERREZ EMERITA 762 ROBLE ST WATSONVILLE CA 95076 $470.91 017-742-20 BRJK LLC 758 ROBLE ST WATSONVILLE CA 95076 $470.91 017-742-21 DUARTE AVELARDO JERONIMO 754 ROBLE ST WATSONVILLE CA 95076 $470.91 017-742-22 BALLESTA FRANK & JULIE H/W CP RS 750 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-23 SOLORZANO GILBERTO R & BERTHA H/W JT 746 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-24 GREGORIO JOE P & SHANEEN D 742 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-25 BRAMBILA JOSE L & SANDRA H/W JT 738 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-26 PLASENCIA MIGUEL & MARIA 734 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-27 MELGOZA RIGOBERTO 730 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-28 LUA CARMEN U/W 726 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-29 FERNANDEZ ELENA 722 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-30 OROZCO YADHIRA 718 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-31 AGUIRRE ATENEDOR & LEONOR 714 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-32 PATINO CARLOS S/M 710 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-33 TRINIDAD ARTHUR M & REGINA A H/W JT 706 ROBLE ST WATSONVILLE CA 95076 $588.63 017-742-34 RODRIGUEZ ROBERT L JR & LUCIA H/W JT 702 ROBLE ST WATSONVILLE CA 95076 $588.63 017-743-01 DUQUE REMINGTON U/M 701 ROBLE ST WATSONVILLE CA 95076 $588.63 017-743-02 GREGG RYAN C & GLORIA P H/W JT 705 ROBLE ST WATSONVILLE CA 95076 $588.63 Exhibit "A"
017-743-03 GUZMAN JOSE 709 ROBLE ST WATSONVILLE CA 95076 $588.63 017-743-04 VARGAS ANTONIO S M/M SS 713 ROBLE ST WATSONVILLE CA 95076 $588.63 017-743-05 ELIZALDE PETER JR 717 ROBLE ST WATSONVILLE CA 95076 $588.63 017-743-06 ROTH GARY L & SUZANNE M H/W JT 721 ROBLE ST WATSONVILLE CA 95076 $588.63 017-743-07 GUERRERO OMAR J JR 725 ROBLE ST WATSONVILLE CA 95076 $588.63 017-743-08 HAAS IRMA U/W 729 ROBLE ST WATSONVILLE CA 95076 $588.63 017-743-09 MELGOZA RAMON & MARIELA 733 ROBLE ST WATSONVILLE CA 95076 $588.63 017-743-10 GONZALES RICARDO G & CHRISTINA A 261 PALOMA WAY WATSONVILLE CA 95076 $588.63 017-743-11 DUARTE ROGELIO ANAYA 172 CARNATION DR FREEDOM CA 95019 $588.63 017-743-12 LOZA EVARISTO A H/W JT ETAL 745 ROBLE ST WATSONVILLE CA 95076 $588.63 017-743-13 PEREZ ALEJANDRO & VERONICA H/W JT 749 ROBLE ST WATSONVILLE CA 95076 $588.63 017-743-14 PEREZ IRMA 753 ROBLE ST WATSONVILLE CA 95076 $470.91 017-743-15 NAVARRO RIGOBERTO ROCHA & MICHELLE MARIE 757 ROBLE ST WATSONVILLE CA 95076 $470.91 017-743-16 LOPEZ FRANCISCO REYES JR 761 ROBLE ST WATSONVILLE CA 95076 $470.91 017-743-17 RAMENO JESUS 147 FRANICH DR WATSONVILLE CA 95076 $470.91 017-743-20 IHH LLC PO BOX 3765 WATSONVILLE CA 95076 $470.91 017-743-21 YIN ALBERTO & TERESITA 2290 MURIEL DR SANTA CRUZ CA 95062 $470.91 017-743-22 GOMEZ MARIANA L 754 CIPRES ST WATSONVILLE CA 95076 $470.91 017-743-23 GONG JAMES & LISA C K 221 JASMINE LN WATSONVILLE CA 95076 $588.63 017-743-24 CRAWFORD DEBRA TRUSTEE 746 CIPRES ST WATSONVILLE CA 95076 $588.63 017-743-25 FERNANDEZ ELPIDIO 742 CIPRES ST WATSONVILLE CA 95076 $588.63 017-743-26 SCHWAB THOMAS R & VIRGINIA G P O BOX 426 CAPITOLA CA 95010 $588.63 017-743-27 JORDAN CHRISTOPHER & ANNA R H/W JT 734 CIPRES ST WATSONVILLE CA 95076 $588.63 017-743-28 RODRIGUEZ DEREK MICHAEL & KATRINA LOYOLA 730 CIRPES ST ROYAL OAKS CA 95076 $588.63 017-743-29 ARROYO SILVIA 726 CIPRES ST WATSONVILLE CA 95076 $588.63 017-743-30 GALVAN FRANCISCO J & VERONICA H/W CP RS 722 CIPRES ST WATSONVILLE CA 95076 $588.63 017-743-31 FLORES ELLERY T & LETICIA A H/W JT 718 CIPRES ST WATSONVILLE CA 95076 $588.63 017-743-32 MARINEZ JUAN & DAISY H/W JT 714 CIPRES ST WATSONVILLE CA 95076 $588.63 017-743-33 FLORES MARIETA T U/W ALL TC ETAL 710 CIPRES ST WATSONVILLE CA 95076 $588.63 017-743-34 ELAZIER GARY E U/M AS JT ETAL 706 CIPRES ST WATSONVILLE CA 95076 $588.63 017-743-35 KOKOT JACEK & ANNA M H/W JT 702 CIPRES ST WATSONVILLE CA 95076 $588.63 017-743-37 HERRERA ARMANDO & MARIA GUADALUPE 163 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-01 HOLGUIN JOHN E & NORMA B 156 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-02 SEYMOUR BRIANA R 152 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-03 VEGA MIGUEL & LAURA 148 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-04 CONTRERAS ERNEST P JR 144 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-05 RUVALCABA FERNANDO 140 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-06 VILOZNY I Y LTD 136 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-07 BARTON JEFFREY D & EVA MICAELA 1487 PARTRIDGE DR GILROY CA 95020 $470.91 017-744-08 DELGADILLO CESAR & MARTA H/W JT 128 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-09 RODRIGUEZ IVAN S/M 124 FRANICH DR WATSONVILLE CA 95076 $470.91 Exhibit "A"
017-744-10 CASTRO JOSE GARCIA U/M 120 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-11 ESPINOZA EDUARDO & ISABEL H/W ALL AS JT ETAL 116 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-12 CONTRERAS MIGUEL A 24 PIMA ST WATSONVILLE CA 95076 $470.91 017-744-13 LEDESMA-PENA BELINDA W/H JT ETAL 108 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-14 GUERRERO FELIX GUERRERO 36-D TREMBLEY LN WATSONVILLE CA 95076 $470.91 017-744-15 WOOD ANDREW JOSEPH & SASHA DAVIS 160 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-16 FERNANDEZ ANGELICA 164 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-17 AGUILERA ADRIAN H/W JT ETAL 168 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-18 OROZCO LUIS S JR 790 NUTTAL OAK CT SUNNYVALE CA 94086 $470.91 017-744-19 MARTINEZ LUZ M U/W TC ETAL 176 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-20 RANDOLPH JOHN C & CECILY TRUSTEES 530 LIGHT SPRINGS RD APTOS CA 95003 $470.91 017-744-21 LEE GORDON & JUDITH 2850 PLEASANT VALLEY RD APTOS CA 95003 $470.91 017-744-22 MANFRE GARY & KRISTI TRUSTEES ALL AS TC ETAL 188 FRANICH DR WATSONVILLE CA 95076 $470.91 017-744-23 AUVINEN JEWEL SHELLY TRUSTEE 115 MARNELL AVE B SANTA CRUZ CA 95062 $470.91 017-744-24 TANGONAN VICTORIA E GABUG & MELANIO 761 CIPRES ST WATSONVILLE CA 95076 $470.91 017-744-25 VILLALOBOS JOHN E & LAURA I 757 CIPRES ST WATSONVILLE CA 95076 $470.91 017-744-26 BELTRAN NELSON & JANE H/W JT 753 CIPRES ST WATSONVILLE CA 95076 $470.91 017-744-27 DIAZ CESAR C & NORMA I 749 CIPRES ST WATSONVILLE CA 95076 $588.63 017-744-28 CHIPRES JAVIER & BERTA A H/W CP RS 745 CIPRES ST WATSONVILLE CA 95076 $588.63 017-744-29 PAVILION COMMUNICATIONS OF NEVADA LLC PO BOX 1030 APTOS CA 95001 $588.63 017-744-30 AVILA CAROLINA H/W JT ETAL 737 CIPRES ST WATSONVILLE CA 95076 $588.63 017-744-31 KORNDER PHILLIP & SHALIMAR 733 CIPRES ST WATSONVILLE CA 95076 $588.63 017-744-32 CAMPOS CYNTHIA M 729 CIPRES ST WATSONVILLE CA 95076 $588.63 017-744-33 KETTNICH KATHLEEN N M/W SS 35 TERRACE DR WEAVERVILLE NC 28787 $588.63 017-744-34 DETESO DAVID R & KATHLEEN L 213 KINGSBURY DR APTOS CA 95063 $588.63 017-744-35 THE FEELEY 2008 TRUST 717 CIPRESS ST WATSONVILLE CA 95076 $588.63 017-744-36 MEZA LUCILA G & MIGUEL M W/H JT 713 CIPRES ST WATSONVILLE CA 95076 $588.63 017-744-37 JOHNSON CARI CARMELA 709 CIPRES ST WATSONVILLE CA 95076 $588.63 017-744-38 ALBOR EDGAR & NAOMI SUHAY 705 CIPRES ST WATSONVILLE CA 95076 $588.63 017-744-39 ARCE JOSE LUIS 701 CIPRES ST WATSONVILLE CA 95076 $588.63 017-551-23 WATSONVILLE VISTA MONTANA ASSOCIATES LP P O BOX 60970 PALO ALTO CA 94306 $21,922.65 017-751-02 AYALA CECILIA 505 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-751-03 ORTIZ RODOLFO JR & VERONICA H/W JT 509 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-751-04 RUIZ SANDY U/W ETAL 513 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-751-05 HAYES RONALD & HELEN 517 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-751-06 BARAJAS RUBEN GONZALEZ H/W ALL JT ETAL 521 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-751-07 JACOB ALEX PO BOX 287 PACIFIC GROVE CA 93950 $588.63 017-751-08 REYES RUBEN H/W CP RS ETAL 529 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-751-09 CURIEL FRANCISCO J RUELAS 533 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-751-10 MICCICHI ERIN TRUSTEE 537 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-751-11 LOPEZ MICAELA U/W JT ETAL 541 CIRVELO ST WATSONVILLE CA 95076 $588.63 Exhibit "A"
017-751-12 MORENO ESTEBAN & MARIA C H/W ALL AS JT ETAL 545 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-751-13 DAVIDS JOHN A TRUSTEE ETAL 62 BROWN VALLEY RD WATSONVILLE CA 95076 $470.91 017-751-14 SALAS ARTHUR & SUSAN H/W CP RS 135 MARCELA DR WATSONVILLE CA 95076 $470.91 017-751-15 SMITH ROGER V 270 TENNYSON DR PALO ALTO CA 94301 $470.91 017-751-16 CLOUDBREAK PROPERTIES LLC 600 CELESTE WAY SANTA CRUZ CA 95065 $470.91 017-751-17 REBOLLAR JOSE T & JUANA H/W JT 147 MARCELA DR WATSONVILLE CA 95076 $470.91 017-751-18 IBARRA NICOLE D M/W SS 151 MARCELA DR WATSONVILLE CA 95076 $470.91 017-751-19 FLORES EVELIA HERNANDEZ 155 MARCELA DR WATSONVILLE CA 95076 $470.91 017-751-20 MENDEZ LUIS 159 MARCELA DR WATSONVILLE CA 95076 $470.91 017-751-21 BENNETT STEVEN & GENIE H/W CP RS 163 MARCELA DR WATSONVILLE CA 95076 $470.91 017-751-22 GOMEZ MARIBEL 562 JOYCE CT WATSONVILLE CA 95076 $470.91 017-751-23 TOSTA JOSEPH C 2200 17TH AVE SANTA CRUZ CA 95062 $470.91 017-751-24 TAVANTZIS A MARCELA 509 E BEACH ST WATSONVILLE CA 95076 $470.91 017-751-25 MORAN ASHLEY ELIZABETH & SILVINO JR 166 MARCELA DR WATSONVILLE CA 95076 $470.91 017-751-26 ESTRADA ISAAC J & TARA C 542 MANZANA ST WATSONVILLE CA 95076 $470.91 017-751-27 DEAN TAICHI NOAH 206 ARROYO SECO SANTA CRUZ CA 95060 $470.91 017-751-28 ROCHA ANTONIO & BERTHA H/W CP RS 534 MANZANA ST WATSONVILLE CA 95076 $470.91 017-751-29 RUIZ JOSE 530 MANZANA ST WATSONVILLE CA 95076 $588.63 017-751-30 MARTINEZ MARVIN & SARAHI 528 MANZANA ST WATSONVILLE CA 95076 $588.63 017-751-31 BETTENCOURT CARRIE & JOHN 522 MANZANA ST WATSONVILLE CA 95076 $588.63 017-751-32 LEONARDIS BRIAN & JESSICA H/W JT 518 MANZANA ST WATSONVILLE CA 95076 $588.63 017-751-33 RAMOS AMINTA R & ARTURO W/H JT 514 MANZANA ST WATSONVILLE CA 95076 $588.63 017-751-34 MC GRAW RANDE & BLANCA H/W JT 510 MANZANA ST WATSONVILLE CA 95076 $588.63 017-751-35 BAMFORD VIRGINIA 506 MANZANA ST WATSONVILLE CA 95076 $588.63 017-751-39 SALINAS LILIANA U/W 123 MARCELA DR WATSONVILLE CA 95076 $470.91 017-751-40 JUDD NICK & REBECCA 119 MARCELA DR WATSONVILLE CA 95076 $470.91 017-751-41 SCHWAB THOMAS R & VIRGINIA G P.O. BOX 426 CAPITOLA CA 95010 $470.91 017-751-42 KUMAR DEVIKA 111 MARCELA DR WATSONVILLE CA 95076 $470.91 017-751-43 PEREZ JESSIE 107 MARCELA DR WATSONVILLE CA 95076 $470.91 017-751-44 SILVA SUSANA 546 CEREZE ST WATSONVILLE CA 95076 $588.63 017-751-45 JOHNSTON COREY J & KATLIN K H/W JT 542 CEREZE ST WATSONVILLE CA 95076 $588.63 017-751-46 HERNANDEZ LAURA ANN S/P 538 CEREZE ST WATSONVILLE CA 95076 $588.63 017-751-47 CAMACHO JOSE H H/W JT ETAL 534 CEREZE ST WATSONVILLE CA 95076 $588.63 017-751-48 ZAMORA TERESA & JOSE L W/H JT ETAL 530 CEREZE STREET WATSONVILLE CA 95076 $588.63 017-751-49 ROCIO CASTRO 526 CEREZE ST WATSONVILLE CA 95076 $588.63 017-751-50 HERNANDEZ HERMALINDA M/W SS AS JT ETAL 522 CEREZE ST WATSONVILLE CA 95076 $588.63 017-751-51 MARTINEZ BENJAMIN FRANK 518 CEREZE ST WATSONVILLE CA 95076 $588.63 017-751-52 HERNANDEZ ANDREW & KRISTI H/W JT 514 CEREZE ST WATSONVILLE CA 95076 $588.63 017-751-53 GONZALEZ DILVA J 510 CEREZE ST WATSONVILLE CA 95076 $588.63 017-751-54 MILHOUSE ANGELIQUE 506 CEREZE ST WATSONVILLE CA 95076 $588.63 017-751-57 WILSON KENNETH C 110 BRYCE CT APTOS CA 95003 $470.91 Exhibit "A"
017-752-01 BYERS JON & DIANE SIRI H/W JT 505 MANZANA ST WATSONVILLE CA 95076 $588.63 017-752-02 OKAMURA STEVEN U/M 509 MANZANA ST WATSONVILLE CA 95076 $588.63 017-752-03 GARCIA ANGELICA B S/P JT ETAL 513 MANZANA ST WATSONVILLE CA 95076 $588.63 017-752-04 CRAWFORD DON C JR & STACEY 510 VISTA DEL MAR DR APTOS CA 95003 $588.63 017-752-05 CASILLAS ANA S S/P JT ETAL 521 MANZANA ST WATSONVILLE CA 95076 $588.63 017-752-06 DORAME VERONICA U/W 525 MANZANA ST WATSONVILLE CA 95076 $588.63 017-752-07 AYON GREGORIO & RAMONA H/W JT 529 MANZANA ST WATSONVILLE CA 95076 $588.63 017-752-08 FARIAS FRED & SONIA H/W JT 533 MANZANA ST WATSONVILLE CA 95076 $588.63 017-752-09 DIAZ RAFAEL & IRMA ASTRIDA H/W JT 537 MANZANA ST WATSONVILLE CA 95076 $588.63 017-752-10 VARGAS FERNANDO H/W JT ALL AS TC ETAL 541 MANZANA ST WATSONVILLE CA 95076 $588.63 017-752-11 BROWN PRISCILLA T 1821 17TH AVE WATSONVILLE CA 95076 $588.63 017-752-12 DELATORRE ROGELIO & ZENDI 546 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-752-13 LIPARI DAWNA M U/W 542 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-752-14 RAMIREZ GIDGET R & ARTHUR W/H CP RS 538 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-752-15 GUERRERO ONESIMO & LUCINA 534 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-752-16 SANDOVAL EDGAR M H/W JT ETAL 530 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-752-17 CANTU HECTOR B & ANGELICA O H/W JT 526 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-752-18 HOEHN KATHLEEN DENISE S/W 522 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-752-19 BARRIOS TED & VERONICA H/W JT 518 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-752-20 LOPEZ YOLANDA MARIA S/W 514 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-752-21 CARBAJAL JAVIER 510 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-752-22 SHUAIBI AZIZ FADHL ALI 506 CIRVELO ST WATSONVILLE CA 95076 $588.63 017-753-02 VASQUEZ FRANCISCO J H/W CP RS ETAL 505 CEREZE ST WATSONVILLE CA 95076 $588.63 017-753-03 VICTORY DANILO H & LEONIDA T 509 CEREZE ST WATSONVILLE CA 95076 $588.63 017-753-04 CHAVEZ MIGUEL 513 CEREZE ST WATSONVILLE CA 95076 $588.63 017-753-05 GODINEZ JOSE & YANED 517 CEREZE ST WATSONVILLE CA 95076 $588.63 017-753-06 RUIZ SERAFIN M/M SS 521 CEREZE ST WATSONVILLE CA 95076 $588.63 017-753-07 JIMENEZ JAMES & PATRICIA H/W JT 525 CEREZE ST WATSONVILLE CA 95076 $588.63 017-753-08 ROCHA ARTURO 529 CEREZE ST WATSONVILLE CA 95076 $588.63 017-753-09 FERNANDEZ SANDRA W/H JT ETAL 533 CEREZE ST WATSONVILLE CA 95076 $588.63 017-753-10 PULIDO RUBEN & VANESSA 637 CEREZE ST WATSONVILLE CA 95076 $588.63 017-753-11 MENDOZA GILBERTO & JANET H/W JT 541 CEREZE ST WATSONVILLE CA 95076 $470.91 017-753-12 CADENA FRANCISCO 545 CEREZE ST WATSONVILLE CA 95076 $470.91 017-753-13 DISCENA ANDREW B 468 21ST AVE SAN FRANCISCO CA 94121 $470.91 017-753-14 GARCIA JOSE LUIS YANEZ 106 MARCELA DR WATSONVILLE CA 95076 $470.91 017-753-15 YOSHII MARK H & DOMINIQUE R H/W JT 102 MARCELA DR WATSONVILLE CA 95076 $470.91 017-753-16 GUTIERREZ J JESUS DELGADO 550 SECOYA ST WATSONVILLE CA 95076 $470.91 017-753-17 MISTRY SHAUNAK H/W CP RS ETAL 24 TARYN CT SCOTTS VALLEY CA 95066 $470.91 017-753-18 LEGIONS TERRY U/W 542 SECOYA ST WATSONVILLE CA 95076 $470.91 017-753-19 ULLOA EDUARDO RAMIREZ 538 SECOYA ST WATSONVILLE CA 95076 $588.63 017-753-20 MARTIN SALVADOR JR & ARIANA O 534 SECOYA ST WATSONVILLE CA 95076 $588.63 Exhibit "A"
017-753-21 LOVATO HECTOR M/M SS AS JT ETAL 530 SECOYA ST WATSONVILLE CA 95076 $588.63 017-753-22 REYES NICANOR R & NANCY P/W JT 526 SECOYA ST WATSONVILLE CA 95076 $588.63 017-753-23 LONGORIA RAYMOND & MARIA F H/W JT 522 SECOYA ST WATSONVILLE CA 95076 $588.63 017-753-24 RUIZ BRENDA M/W SS 518 SECOYA ST WATSONVILLE CA 95076 $588.63 017-753-25 ALANIZ JENNIFER MARIE & OSCAR 514 SECOYA ST WATSONVILLE CA 95076 $588.63 017-753-26 TORRES GUILLERMO & EVA G H/W JT 510 SECOYA ST WATSONVILLE CA 95076 $588.63 017-753-27 LODDER STEPHEN C S/M TC ETAL 506 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-02 SOWARDS STACEY L S/W AS JT ETAL 505 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-03 ARELLANO MARIO R 509 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-04 GONZALEZ DAVID LOMELI & ROSARIO H/W JT 513 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-05 ALVARADO PETE JR & BLANCA 517 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-06 CORTEZ ENRIQUETA S TRUSTEE 521 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-07 MURAKAMI BRIAN A & CIONE 511 CALABASAS RD WATSONVILLE CA 95076 $588.63 017-754-08 FERNANDEZ ANGEL & MARIA H/W JT 529 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-09 NUNEZ JOSE A & MARIA D H/W JT 533 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-10 HERNANDEZ ALBERTO & HILDA H/W JT 537 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-11 MAGANA AURORA G U/W 541 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-12 GARCIA JESUS RUIZ H/W JT ETAL 545 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-13 ZARAGOZA JOSE 549 SECOYA ST WATSONVILLE CA 95076 $588.63 017-754-14 ROBBERT APRIL A 411 LOMA AVE CAPITOLA CA 95010 $588.63 Total Assessment FY 2025/2026 $161,428.44
Assessment Amount determined as follows:
$588.63 per Single Family
Dwelling Unit
$470.91 per Town Home
$162.39 per Apartment** ** APN 017-551-23 Cost includes amount for 135 apartment units Exhibit "A"
Reso No. (CM)
Meeting Date: 052725
SWZ ______ TV ______ PCS ______
1 RESOLUTION NO.__________ (CM)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE
CONFIRMING DIAGRAM AND ASSESSMENT AND LEVYING
ASSESSMENT FOR FISCAL YEAR 2025-2026 FOR THE GONZALES
STREET ALLEYWAY LANDSCAPING AND LIGHTING MAINTENANCE
ASSESSMENT DISTRICT
Assessment District No. PK-94-1
(Pursuant to the Landscaping and Lighting Act of 1972)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:
1. This action 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 pursuant to Chapter 3 (California Streets and Highways Code Sections 22620 et seq.) of the Landscaping and Lighting Act of 1972, the City Council directed the City Public Works and Utilities Assistant Director, Engineer of Work for the Gonzales Street Alleyway Landscaping and Lighting Maintenance Assessment District No. PK-94-1, to prepare and file an annual report for Fiscal Year 2025-2026.
3. That the Council on March 25, 2025, adopted Resolution No. 86-25 (CM) directing the filing of the 2025-2026 Annual Engineer's Report for Assessment District No.
PK-94-1.
4. That the Council on April 21, 2025, adopted Resolution No. 111-25 (CM), accepting the Engineer’s Report.
5. That the Council on April 21, 2025, adopted Resolution No. 112-25 (CM), a Resolution of Intention to levy and collect assessments within the assessment district for
Reso No. (CM)
Meeting Date: 052725
2 Fiscal Year 2025-2026 and set a public hearing to be held on May 27, 2025. The public 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. Notice of the hearing was given in the time and manner required by law.
6. That at the public hearing, the City Council afforded to every interested person an opportunity to protest the annual report either in writing or orally, and the City Council has considered any such protest.
7. That the City Council hereby confirms the annual report of the Engineer of Work accepted by Resolution No. 111-25 (CM) on April 21, 2025.
8. That the City Council hereby confirms the Diagram and Assessment and hereby levies the assessment set forth on Exhibit “A,” attached herein and incorporated hereto, for Fiscal Year 2025-2026.
*******************************
8 Exhibit "A"
Gonzales St
Assessment Roll
For the 2025/2026 Fiscal Year
Annual Maintenance
APN Property Owner Owner Address Assessment
Amount
016-143-01 MARTIN TROY M & BRITTANY m 11 WEST HIGH ST WATSONVILLE CA 95076 $ 35.82 016-143-02 DAVILA JOSE JESUS LARA 855 FREEDOM BLVD WATSONVILLE CA 95076 $ 35.82 016-143-03 COLEY DEAN E & SANDRA L CO-TRUSTEE 845 FREEDOM BLVD WATSONVILLE CA 95076 $ 35.82 016-143-04 BONITA STEVEN P O BOX 448 WATSONVILLE CA 95077 $ 35.82 016-143-05 ROMERO RALPH L & SUSAN L H/W JT 833 FREEDOM BLVD WATSONVILLE CA 95076 $ 35.82 016-143-07 FEHR GERALD K & TERESA K TRUSTEES 95 LILLY WAY WATSONVILLE CA 95076 $ 35.82 016-143-08 SANCHEZ DANIEL H/W JT ETAL 819 FREEDOM BLVD WATSONVILLE CA 95076 $ 35.82 016-143-09 CASA COURT APPOINTED SPECIAL ADVOCATES SC CO 813 FREEDOM BLVD WATSONVILLE CA 95076 $ 35.82 016-143-10 EXEX LLC
9909 HUENNEKENS
St STE 225 SAN DIEGO CA 92121 $ 26.88
016-143-11 EXEX LLC P O BOX 207 WATSONVILLE CA 95077 $ 35.82 016-143-12 MUNOZ DAVID U/M 322 BRENNAN WATSONVILLE CA 95076 $ 35.82 016-143-13 STRATMAN DAVID C & COLETTE W
1871 ORANGE
GROVE DR SAN JOSE CA 95124
$ 35.82
016-143-17 EXEX LLC P O BOX 207 WATSONVILLE CA 95077 $ 35.82 016-143-19 MC FARREN TODD D & YOLANDA R H/W 24 GONZALES AVE WATSONVILLE CA 95076 $ 35.82 016-143-21 RHOADS ERNEST B & LAUREL A H/W JT 32 GONZALES ST WATSONVILLE CA 95076 $ 35.82 016-143-24 RADOVICH BARNEY M & MARLENE L TRUSTEES 925 FREEDOM BLVD WATSONVILLE CA 95076 $ 35.82 016-143-25 JIMENEZ ROSALINA N 827 FREEDOM BLVD WATSONVILLE CA 95076 $ 35.82 016-143-26 WATSONVILLE CITY OF P O BOX 50000 WATSONVILLE CA 95077 $ - Total $ 600.00
Exhibit "A"
Landscape, Lighting and
Maintenance Assessment
Districts (LLMADs)
•Gonzales Street Alleyway
•Bay Breeze
•Vista Montaña
Recommendation
That the City Council adopt resolutions confirming the
diagrams, assessments, and levying the assessments for
Fiscal Year 2025-2026 for the:
• Bay Breeze Subdivision Landscaping and Lighting
Maintenance Assessment District No. PK-03-02,
• Vista Montaña Subdivision Landscaping and Lighting
Maintenance Assessment District (LLMAD) No. PK-03-03,
and
• Gonzales Street Alleyway Landscaping and Lighting District (Gonzales LLMAD) No. PK-94-1.
Annual Assessments
• The 1972 LLMAD Act allows for annual CPI increases
• Engineer’s Report update and Annual Budget based on
Consumer Price Index for the San Francisco Bay Area
• Public Hearing is advertised; LLMAD property owners
received a courtesy notice in the mail.
• Public hearing is held
• If new assessments are approved, assessments placed on property tax bills
Process
Initiate – March 25, 2025– City Council adopted
Resolutions directing the filing of the Annual
Engineer’s Reports for all 3 LLMADS
Update – April 21, 2025 – City Council adopted
Resolutions accepting Engineer’s Report for all 3
LLMADS & setting the Public Hearing for May 27,
2025
Approve – May 27, 2025 - Public Hearing is
required to levy the assessment for the Districts
Annual Assessments
Need for annual increases:
• Account for rising personnel and
materials costs
• Account for rising contractor costs
•If assessments do not keep pace with
costs, then service levels will need to
be reduced.
Gonzales Street Alleyway LLMAD
Gonzales Street Alleyway
• Gonzales Street Landscape, Lighting & Maintenance
Assessment District (LLMAD) was established in 1994.
• 17 parcels
• The maximum annual assessment is $35.82 per unit.
• Total annual assessment is $600.
• No change to the 2025-26 assessment.
Bay Breeze LLMAD
Budget for Bay Breeze- 2025-26
• 114 single family parcels
• Annual assessment per EDU:
2024-25 2025-26 increase
Per EDU $627.38 $642.44 $15.06
Total District $71,521.15 $73,237.66 $1,716.51
• $24,739 – For maintenance
• $48,499 - Placed in reserve for future repair and
replacement of critical infrastructure
• Reserve Balance - $664,130
Ongoing Maintenance
Beginning in 2004-2005, Operation, maintenance, repair, and replacement of:
• Interior Streetlights and Signage
• Detention basins and the access roads and fencing at the detention basins • Perimeter fencing around the exterior boundaries
• Pedestrian path within the slough area adjacent to the district • Pump station
• Plantings done as part of the wetland mitigation plan, including erosion control
• Environmental Management Open Space Parcel created within the district • Street trees within the subdivision
• Landscaping and within the public right-of-way abutting and within the district, including half of the Ohlone Parkway medians
• Graffiti coatings on the public exposure of the perimeter walls along the district boundaries
• Administrative Services to operate the District
Ongoing Issues
• Maintenance cost for all items in E.R. currently
exceeds annual funding
• Upcoming meetings regarding maintenance budget
and potential fee increase
• K&D is not providing a full service due to budget
• $60,358 - Actuals for Maintenance: K&D services,
Field Services, and Wastewater Services
• Detention basin fencing is failing
• Plans to replace in design phase
Vista Montaña LLMAD
Budget for Vista Montaña- 2025-26
• Total Annual Maintenance Budget: $161,428.
• $71,130 is budgeted for maintenance
• $90,298 will be placed in the reserve
• Current Reserve Balance= $75,745
2024-2025 2025-26 Increase
Single Family
Dwelling Units
$574.84 $588.63 $13.79
Townhomes $459.88 $470.91 $11.03
Apartments $158.58 $162.39 $3.81
Total $157,647 $161,428 $3,781
Background
REASONS FOR RESERVE & MAINTENANCE DEFECIT
• $138,000 was spent on landscaping improvements in
2007 at the request of residents
• $141,000 of unrealized revenue loss due to no CPI
increases until 2014
• Additional maintenance work over the years and resident expectations and requests that exceeded the budget.
• City Staff presented an option in 2024 to increase the assessment to meet aesthetic landscape expectations.
• Proposal was voted down
Current Maintenance Priorities
• Drainage channel clearing and maintenance
• Drainage channel weed abatement
• Culvert Clearing and maintenance
• Inlet Structure clearing and maintenance
• Sound wall maintenance/graffiti removal
• Pump station maintenance
• Street light maintenance
• Street signage
• Safety Issues/necessary repairs
Recommendation
That the City Council adopt a resolutions confirming the diagrams, assessments, and levying the assessments
for Fiscal Year 2025-2026 for the:
• Bay Breeze Subdivision Landscaping and Lighting
Maintenance Assessment District No. PK-03-02,
• Vista Montaña Subdivision Landscaping and Lighting
Maintenance Assessment District (LLMAD) No. PK03-03, and • Gonzales Street Alley Landscaping and Lighting
District (Gonzales LLMAD) No. PK-94-1.
Questions...
1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, May 27, 2025
TO: CITY COUNCIL
WRITTEN BY: PRINCIPAL MANAGEMENT ANALYST ZAVALA
RECOMMENDED BY: CITY MANAGER VIDES
APPROVED BY: SOCIAL & COMMUNITY SERVICE GRANTS CITY COUNCIL
SUBCOMMITTEE
SUBJECT: FUNDING RECOMMENDATIONS FOR THE SOCIAL AND
COMMUNITY SERVICE GRANTS
RECOMMENDATION:
The Social & Community Services Grant Subcommittee recommends that the City Council approve by resolution the funding recommendations for the Social and Community Service Grant for the 2025-2027 funding cycle.
BACKGROUND:
The Watsonville City Council allocates annual General Fund resources to support local community-based organizations in addressing the needs of Watsonville residents. The Social and Community Service Grants are awarded on a two-year funding cycle to align with the City's biennial budget process.
To facilitate the grant process, a Council Subcommittee—appointed by the Mayor—is tasked with setting application guidelines and funding priorities, reviewing proposals, and making funding recommendations to the full City Council. For the current grant cycle, the Subcommittee is comprised of Mayor Maria Orozco, Council Member Eduardo Montesino, and Council Member Vanessa Quiroz-Carter.
Application Review Process:
In March 2025, the Subcommittee convened to discuss the application process, overall funding level, and evaluation criteria for the upcoming grant cycle. At its meeting on March 25, 2025, the City Council approved a minimum annual funding request of $6,000 and a maximum of $24,000 per organization. The
2 Council also approved an annual allocation of $235,000 to $300,000 for the Social and Community Service Grants Program. The following evaluation criteria were approved for use during this cycle:
Does the program/service meet a current community need? Is the organization in good standing with the City and State? (if previously funded) Organization serves the Watsonville Community
Financial need as demonstrated by the organization’s overall funding request and annual budget
Completeness of the application
Impact on Watsonville residents
DISCUSSION:
New and previously funded agencies were invited to submit applications for the 2025–2027 funding cycle, with a deadline of April 23, 2025. The City received 31 applications: 16 from returning agencies seeking continued funding and 15 from new applicants. In total, agencies requested $599,850 in funding.
In consideration of citywide budget constraints, the Subcommittee recommends an annual allocation of $235,000 for this grant cycle. The City of Watsonville remains committed to supporting community-based organizations that provide essential services to local residents. The Social and Community Service Grants Program is one of several mechanisms through which the City invests in core services. In addition to this grant program, the City contracts annually with various nonprofit organizations to deliver vital programs that enhance the well-being of the community.
On May 7, 2025, the Subcommittee reviewed and ranked all eligible applications. As a result of this process, the Subcommittee is recommending funding for 19 organizations that directly serve Watsonville residents. The table below summarizes funding requests and recommended allocations by program category. A detailed list of recommended awards by organization is attached.
Program Category
# of Applications
Received
Amount
Requested
# of Applications
Funded
Amount
Funded
Drug & Alcohol 1 $10,000 1 $10,000
Food Insecurity 3 $64,000 2 $25,000
Housing 6 $140,000 4 $60,000
Mental Health 5 $103,000 3 $30,000
Community
Engagement 9 $197,500 7 $89,500
Immigration 0 $0 0 $0
Job Training 1 $10,000 0 $0
LGBTQ 0 $0 0 $0
Recreation and
Wellness 6 $75,350 3 $20,500
Total 31 $599,850 20 $235,000
3 CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:
N/A
STRATEGIC PLAN:
The Social and Community Service Grant Program is consistent with all the City Council Strategic plan goals.
Economic Development
Infrastructure & Environment
Housing
Fiscal Health
Public Safety
Community Engagement & Well-being
Efficient and Well-performing Government
FINANCIAL IMPACT:
The proposed funding for the Social and Community Service grants in the amount of $235,000 per year from the General Fund will be included in the FY 2026-2027 budget.
ALTERNATIVE ACTION:
The City Council may propose a different distribution of funds.
ATTACHMENTS AND/OR REFERENCES (IF ANY):
1. Proposed Social Service Grant Funding Recommendations by City Council Subcommittee
1 2025-2027 Social and Community Service Grants
Organization Program Category
Recommended
Annual Funding
Activities4All Recreation and Wellness $12,000.00
Arte del Corazon Community Engagement $18,000.00
Community Action Board of Santa Cruz County Housing $24,000.00 Community Bridges Food Insecurity $10,000.00
Court Appointed Special Advocates Mental Health $6,000.00 Gardenia Amor Y Bienestar Recreation and Wellness $6,000.00 Grey Bears Food Insecurity $15,000.00
Jacob's Heart Childrens's Cancer Services Mental Health $18,000.00 MENtors Driving Change for Boys Mental Health $6,000.00 Monarch Services Housing $10,000.00
Pajaro Valley Arts Community Engagement $6,000.00
Pajaro Valley Shelter Services Housing $20,000.00
Raices y Carino Community Engagement $4,500.00
Save our Shores Community Engagement $6,000.00
Senior Citizens Legal Services Housing $6,000.00
Senior Network Services Community Engagement $10,000.00 Special Events Sponsorships Community Engagement $35,000.00 Ventures Community Engagement $10,000.00
Watsonville Community Band Recreation and Wellness $2,500.00 Watsonville Film Festival Drug & Alcohol $10,000.00
Total $235,000.00
Attachment 1
Reso No. (CM)
Meeting Date: 052725 SWZ ______ TV ______ CM ______
1 RESOLUTION NO.__________ (CM)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE APPROVING THE AWARD OF SOCIAL AND
COMMUNITY SERVICE GRANTS, IN THE AMOUNT OF $235,000 TO
DESIGNATED COMMUNITY & SOCIAL SERVICE AGENCIES;
AUTHORIZING AND DIRECTING PAYMENT OF SAME FOR FISCAL
YEARS 2025/2026 AND 2026/2027.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:
1. That the City Council does hereby accept and approve the recommended award of Social and Community Service Grants in the amount of $235,000 to various Community and Social Service Agencies for fiscal years 2025/2026 and 2026/2027 set forth in Exhibit "A," a copy of which is attached hereto and incorporated herein by this reference.
2. That the Administrative Services Director and City Manager are hereby authorized and directed to pay such amounts and execute any needed agreements, respectively, for and on behalf of the City of Watsonville. **************************************
Exhibit “A”
2025-2027 Social and Community Service Grants
Organization Program Category
Recommended
Annual Funding
Activities4All Recreation and Wellness $10,000.00
Arte del Corazon Community Engagement $16,000.00
Community Action Board of Santa Cruz County Housing $20,000.00 Community Bridges Food Insecurity $18,000.00
Court Appointed Special Advocates Mental Health $6,000.00 Gardenia Amor Y Bienestar Recreation and Wellness $6,000.00 Grey Bears Food Insecurity $15,000.00
Jacob's Heart Childrens's Cancer Services Mental Health $16,000.00 MENtors Driving Change for Boys Mental Health $6,000.00 Monarch Services Housing $10,000.00
Pajaro Valley Arts Community Engagement $6,000.00
Pajaro Valley Shelter Services Housing $20,000.00
Raices y Carino Community Engagement $4,500.00
Save our Shores Community Engagement $6,000.00
Senior Citizens Legal Services Housing $6,000.00
Senior Network Services Community Engagement $10,000.00 Special Events Sponsorships Community Engagement $35,000.00 Ventures Community Engagement $10,000.00
Watsonville Community Band Recreation and Wellness $2,500.00 Watsonville Film Festival Drug & Alcohol $6,000.00
Watsonville Youth Training Center dba Watsonville
Boxing Academy Recreation and Wellness $6,000.00
Total $235,000.00
REVISED
SOCIAL AND COMMUNITY SERVICE GRANTS 2
025-2027
City Council Ad Hoc Subcommittee
May 27, 2025
THANK
YOU TO ALL
ORGANIZATION
S
THAT APPLIED!
The City recognizes and deeply
appreciates the tremendous
value of the services our nonprofit partners provide to the community!
Council
Subcommittee
Thank you to Council Subcommittee
members:
• Mayor Maria Orozco
• Council Member Eduardo Montesino
• Council Member Vanessa Quiroz-Carter
Subcommittee Members:
●Established funding priorities
●Established screening criteria
●Reviewed, ranked and allocated existing
funding
All subcommittee recommendations are approved by the Council.
Background
• Applications were due April 23, 2025
• 31 applications were received
• 16 organizations reapplied for continued funding
• 15 new organizations applied for funding
• Total funding requested was $599,850
• Total funding available $235,000
Funding Guidelines
• The subcommittee established an annual
funding range of $6,000 to $24,000 per
organization
• The subcommittee also recommended setting
funding aside for community projects at a
range of $1,000 per project – No applications
were received for this purpose.
• Funding recommendations also include
capacity to support community special events
which helps various non-profit agencies cover
the fees and costs associated with hosting
special events. Based on the following criteria:
• Tier I - Maximum of 50% of City fees or $10,000,
whichever is higher
• Tier II - Maximum of 50% of City fees or $4,000,
whichever is higher
• Tier III - Maximum of 50% of City fees or $1,500,
whichever is higher
• Tier IV - Maximum of 50% of City fees or $750,
whichever is higher
Application
Review
Do the program/services align with the City Council Strategic Plan priorities? Does the program/service meet a current community need? Is the organization in good standing with the City (if previously funded) and State?
Organization serves the Watsonville Community
Financial need as demonstrated by the organization’s overall funding request and annual budget
Completeness of the application
Impact on Watsonville residents
Funds Requested & Recommended
Program Category # of applications received Amount Requested # of applications funded Amount Funded Drug & Alcohol 1 $10,000 1 $10,000
Food Insecurity 3 $64,000 2 $25,000
Housing 6 $140,000 4 $60,000
Mental Health 5 $103,000 3 $30,000
Community Engagement 9 $197,500 7 $89,500
Immigration 0 $0 0 $0
Job Training 1 $10,000 0 $0
LGBTQ 0 $0 0 $0
Recreation and Wellness 6 $75,350 3 $20,500
Total 31 $599,850 20 $235,000
Organizations Recommended for Funding
2025-2027 Social and Community Service Grants
Organization Program Category Recommended Annual Funding Activities4All Recreation and Wellness $12,000.00
Arte del Corazon Community Engagement $18,000.00
Community Action Board of Santa Cruz County Housing $24,000.00 Community Bridges Food Insecurity $10,000.00
Court Appointed Special Advocates Mental Health $6,000.00 Gardenia Amor Y Bienestar Recreation and Wellness $6,000.00 Grey Bears Food Insecurity $15,000.00
Jacob's Heart Childrens' Cancer Services Mental Health $18,000.00 MENtors Driving Change for Boys Mental Health $6,000.00 Monarch Services Housing $10,000.00
Pajaro Valley Arts Community Engagement $6,000.00
Pajaro Valley Shelter Services Housing $20,000.00
Raices y Carino Community Engagement $4,500.00
Save our Shores Community Engagement $6,000.00
Senior Citizens Legal Services Housing $6,000.00
Senior Network Services Community Engagement $10,000.00 Special Events Sponsorships Community Engagement $35,000.00 Ventures Community Engagement $10,000.00
Watsonville Community Band Recreation and Wellness $2,500.00 Watsonville Film Festival Drug & Alcohol $10,000.00
Total $235,000.00 Page 681 of 793
Recommendation
The Social & Community Service Grants
Subcommittee recommends that the City Council
approves the funding recommendations for the
Social and Community Service Grants for funding
cycle 2025 - 2027
Questions?
1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, May 27, 2025
TO: CITY COUNCIL
WRITTEN BY: BRIAN FULGONI, POLICE CAPTAIN
RECOMMENDED BY: POLICE CHIEF ZAMORA
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: APPROVAL OF THE ANNUAL MILITARY EQUIPMENT REPORT, RENEWAL OF ORDINANCE 4-13 AND WATSONVILLE POLICE DEPARTMENT
MILITARY EQUIPMENT USE POLICY
RECOMMENDATION:
Adopt a resolution renewing Chapter 4-13 of the Watsonville Municipal Code, Watsonville Military Equipment Use Policy 708, and finding that the Annual Military Equipment Report complies with the standard of approval outlined in Government Code Section 7071(d).
BACKGROUND:
Effective January 1, 2022, Assembly Bill 481 (codified in Government Code §§7070, et seq.) requires legislative bodies to adopt ordinances approving military equipment use policies before law enforcement agencies can continue to engage in specified activities related to the use of what the state legislature has now defined as “military equipment” in Government Code §7070. The Council approved the Watsonville Police Department Military Equipment Use Policy and Equipment list on June 14, 2022.
Government Code §7071(e)(1) states that the governing body shall review any ordinance that it has adopted pursuant to this section approving the funding, acquisition, or use of military equipment at least annually and, subject to paragraph (e)(2), vote on whether to renew the ordinance at a regular meeting.
Paragraph (e)(2) of Government Code §7071 states that the governing body shall determine, based on the annual military equipment report, whether each type of military equipment identified in that report has complied with the standards for approval outlined in subdivision (d) of §7071, which reads as follows:
(A) The military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.
2 (B) The proposed military equipment use policy will safeguard the public’s welfare, safety, civil rights, and civil liberties.
(C) If purchasing the equipment, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety. (D) Prior military equipment uses complied with the military equipment use policy that was in effect at the time, or if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance.
If the governing body determines that a type of military equipment identified in that annual military equipment report has not complied with the standards for approval set forth above, the governing body shall either disapprove a renewal of the authorization for that type of military equipment or require modifications to the military equipment use policy in a manner that will resolve the lack of compliance.
Government Code §7072 requires that any law enforcement agency that receives approval for a military equipment use policy pursuant to §7071 shall submit to the governing body an annual military equipment report for each type of military equipment approved by the governing body within one year of approval, and annually thereafter for as long as the military equipment is available for use. The law enforcement agency shall also make each annual military equipment report required by this section publicly available on its website for as long as the military equipment is available for use. The annual military equipment report shall, at a minimum, include the following information for the immediately preceding calendar year for each type of military equipment:
(1) A summary of how the military equipment was used and the purpose of its use. (2) A summary of any complaints or concerns received concerning the military equipment. (3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
(5) The quantity possessed for each type of military equipment. (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
A copy of the annual military equipment annual report is attached hereto as Attachment 1.
3 DISCUSSION:
The proposed ordinance and Military Equipment Use Policy were brought to Council for approval on April 26, 2022. The ordinance and policy were approved by a vote of six in favor and one opposed. On May 10, 2022, the ordinance and policy were brought back to Council for passage. During this meeting, the Council postponed passage of the ordinance and policy. On June 14, 2022, the City Council unanimously passed the ordinance and approved the policy.
On April 29th, 2025, the WPD publicized the date and location of the Community Engagement Meeting set for May 8th, 2025, through social media platforms.
On May 7th, 2025, the WPD posted the 2024 Annual Military Equipment Annual Report Draft to their website. The WPD publicized the release and provided a reminder of the Community Engagement meeting set for May 8th, 2025, through social media platforms The Annual Report is meant to provide yearly information about each type of military equipment that was approved by Council. The report contains a summary of how it was used, any complaints or concerns received and any associated costs related to their use. The report is asking for resupply of used equipment and to consider the procurement of new equipment (Section II of Attachment 1).
On May 8, 2025, the WPD held the well-publicized community meeting in the Civic Plaza Community Room to discuss AB 481 and the Annual Report. About ten (10) people attended the meeting.
The May 27, 2025 Council Meeting will serve as another opportunity for community members to provide comment on the Annual Report.
State law requires the City review and renew its ordinance and policy on an annual basis. Staff is suggesting no changes to the ordinance or policy.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:
The City Council has previously found that Chapter 4-13 of the Watsonville Municipal Code and Watsonville Military Equipment Use Policy 708 are exempt from the provisions of the California Environmental Quality Act (“CEQA”) because they will not result in a direct or reasonably foreseeable indirect physical change in the environment and are not a “project,” as defined in Section 15378 of the CEQA Guidelines.
STRATEGIC PLAN:
Public Safety
FINANCIAL IMPACT:
4 There would not be any new, unplanned direct fiscal impacts to continuing the use of equipment already in the Department’s inventory or continuing to collaborate with other law enforcement agencies, including in mutual aid circumstances. Maintenance costs of existing equipment is within the Department’s budget.
There will be staff time associated with compliance, annual review, reporting and community engagement meetings, all of which are required pursuant to applicable provisions of the Government Code.
ALTERNATIVE ACTION:
Council could make changes to the Military Equipment Use Policy and/or ordinance or If Council determines that a type of military equipment identified in the annual military equipment report has not complied with the standards for approval set forth in subdivision (d) of Section 7071, Council can either disapprove a renewal of the authorization for that type of military equipment or require modifications to the military equipment use policy in a manner that will resolve the lack of compliance.
ATTACHMENTS AND/OR REFERENCES (IF ANY):
1. WPD Annual Military Equipment Report for calendar year 2024
2. City Ordinance Chapter 4-13
3. WPD Military Equipment Use Policy and Inventory List
4. Text of California Assembly Bill 481 (AB 481)
1 Watsonville Police Department
AB 481 Military Equipment – Annual Report (DRAFT)
January 1, 2024 – December 31, 2024
Attachment 1
2 1. Section 1 – Unmanned, remotely piloted, powered aerial vehicle a. Axon Air, DJI Avata Pro-View Combo
(1) A summary of how the military equipment was used and the purpose of its use.
The drones have been a vital asset to Watsonville PD as they have been deployed during many different situations. The drones have helped increase operational efficiency by reducing the amount of personal and time it would take to search large areas. Overall the drones have increased both officer and public safety.
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
This drone is one of four included in a 5-year contract with Axon in the amount of $114,740.70. The contract began in September 2023. (5) The quantity possessed for each type of military equipment.
One (1)
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
None
Attachment 1
3 2. Section 1 – Unmanned, remotely piloted, powered aerial vehicle a. Axon Air, Skydio 2+ Enterprise
(1) A summary of how the military equipment was used and the purpose of its use.
The drones have been a vital asset to Watsonville PD as they have been deployed during many different situations. The drones have helped increase operational efficiency by reducing the amount of personal and time it would take to search large areas. Overall the drones have increased both officer and public safety.
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
This drone is one of four included in a 5-year contract with Axon in the amount of $114,740.70. The contract began in September 2023. (5) The quantity possessed for each type of military equipment.
One (1)
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
Attachment 1
4 None
3. Section 1 – Unmanned, remotely piloted, powered aerial vehicle a. Axon Air, DJI Matrice 30T SP Plus
(1) A summary of how the military equipment was used and the purpose of its use.
The drones have been a vital asset to Watsonville PD as they have been deployed during many different situations. The drones have helped increase operational efficiency by reducing the amount of personal and time it would take to search large areas. Overall the drones have increased both officer and public safety.
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
This drone is one of four included in a 5-year contract with Axon in the amount of $114,740.70. The contract began in September 2023. (5) The quantity possessed for each type of military equipment.
One (1)
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
Attachment 1
5 None
4. Section 1 – Unmanned, remotely piloted, powered aerial vehicle a. Axon Air, DJI Mavic 3 Thermal SP Plus
(1) A summary of how the military equipment was used and the purpose of its use.
The drones have been a vital asset to Watsonville PD as they have been deployed during many different situations. The drones have helped increase operational efficiency by reducing the amount of personal and time it would take to search large areas. Overall the drones have increased both officer and public safety.
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
This drone is one of four included in a 5-year contract with Axon in the amount of $114,740.70. The contract began in September 2023. (5) The quantity possessed for each type of military equipment.
One (1)
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
Attachment 1
6 None
5. Section 1 – Unmanned, remotely piloted, ground vehicle a. Throwbot XT
(1) A summary of how the military equipment was used and the purpose of its use.
Not used
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
None
(5) The quantity possessed for each type of military equipment.
One (1)
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
None
6. Section 10 – Specialized Firearms and Ammunition
Attachment 1
7 a. Department Issued Colt LE6920 Carbine Rifle
(1) A summary of how the military equipment was used and the purpose of its use.
Annual patrol rifle qualifications and trainings on 12/11/24, and 12/18/24.
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
50 Officers (including instructors) qualified. Rifle Training and annual qualifications take approximately 10 hour @ avg $66/hr = $33,000. Source funds come from General Fund and Measure Y. 7 academy recruits completed the 16-hour Patrol Rifle Familiarization Course @ $59/hr = $6,608. Source funds come from General Fund and Measure Y.
Special Response Team (SRT) Range Training on 4/17/24, 6/24/24, 8/24/24, and 12/12/24. Combined 40 hours of training by 28 at $66/hr = $73,920. Source funds come from General Fund and Measure Y. 20,000 practice rounds were purchased in 2024 for a total cost of $10,861. Source funds came from Specialized Department Equipment Budget.
Attachment 1
8 Annual inspections of the rifle, approximately 1 hour per rifle, total of 17 hours @ $71/ hour = $1,207. Source funds come from General Fund and Measure Y.
(5) The quantity possessed for each type of military equipment.
Seventeen (17)
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
See section II.
7. Section 10 – Specialized Firearms and Ammunition
a. Spartan Precision Bolt Action Rifle .308 cal.
(1) A summary of how the military equipment was used and the purpose of its use.
One (1) officer attended the Basic Sniper School. Two (2) officers attending five (5) five (5) hours training exercises for a total of twentyfive (25) hours per officer. (2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
Attachment 1
9 Total cost of this school was $2,006. Source funds come from General Fund and Measure Y.
(5) The quantity possessed for each type of military equipment.
Four (4)
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
None
8. Section 10 – Specialized Firearms and Ammunition
a. Daniel Defense V3 Semi-Auto Rifle .308 cal.
(1) A summary of how the military equipment was used and the purpose of its use.
None
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
None
(5) The quantity possessed for each type of military equipment.
Attachment 1
10 One (1)
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
None
9. Section 10 – Specialized Firearms and Ammunition
a. Hornady .308 168gr AMAX TAP 20 250
(1) A summary of how the military equipment was used and the purpose of its use.
One (1) officer attended the Basic Sniper School and utilized approximately 300 rounds. Two (2) officers attended five (5) training exercises and utilized approximately 100 rounds per training.
Approximately, 1,000 rounds were used for training exercises. (2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
Five training exercises for five hours x two officers x avg. $95/hr = $2,375. Source funds come from General Fund and Measure Y. (5) The quantity possessed for each type of military equipment.
Attachment 1
11 Approximately 2,700 rounds are currently in inventory. (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
None
10. Section 10 – Specialized Firearms and Ammunition
a. Federal Cartridge .308 Win Tactical Bonded Tip 168 Grain Duty Ammunition (1) A summary of how the military equipment was used and the purpose of its use.
None
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
None
(5) The quantity possessed for each type of military equipment.
Approximately 300 rounds are currently in inventory.
Attachment 1
12 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
None
11. Section 11 – Firearm or firearm accessory that is designated to launch explosive projectiles
a. Remington 870, pump action shotgun
(1) A summary of how the military equipment was used and the purpose of its use.
Six (6) officers received one (1) hour of training during one training exercise.
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
Three (3) officers for one (1) hour x avg. $95/hr = $285. Three (3) officers for one (1) hour x avg. $65/hr = $195. Source funds come from General Fund and Measure Y.
(5) The quantity possessed for each type of military equipment.
Two (2)
Attachment 1
13 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
None
12. Section 11 – Firearm or firearm accessory that is designated to launch explosive projectiles
a. Combined Systems Technology Launching Cup
(1) A summary of how the military equipment was used and the purpose of its use.
Six (6) officers received one (1) hour of training.
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
Three (3) officers for one (1) hour x avg. $95/hr = $285. Three (3) officers for one (1) hour x avg. $65/hr = $195. Source funds come from General Fund and Measure Y.
(5) The quantity possessed for each type of military equipment.
Two (2)
Attachment 1
14 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
None
13. Section 12 – Noise-flash diversionary devices and explosive breaching tools a. BP2 NFDD (Non-Firing Distraction Device) Straight Delivery Pole with Clamp Head Delivery
(1) A summary of how the military equipment was used and the purpose of its use.
None
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
None
(5) The quantity possessed for each type of military equipment.
One (1)
Attachment 1
15 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
See section II.
14. Section 12 – Noise-flash diversionary devices and explosive breaching tools a. Defense Technology 11-gram, low roll II, non-reloadable distraction device (1) A summary of how the military equipment was used and the purpose of its use.
One (1) NFDD was successfully deployed on an operation in May 2024. The NFDD was collected and properly documented in a police report. Approximately seven (7) NFDD devices were used during an SRT training exercise.
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
Training for three (3) officers x five (5) hours x avg. $95/hr = $1,425 and avg. four (4) officers x five (5) hours x $65/hr = $975. Source funds come from General Fund and Measure Y.
(5) The quantity possessed for each type of military equipment.
Thirty-seven (37)
Attachment 1
16 (6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
See section II.
15. Section 12 – Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray
a. Combined Tactical Systems Buffeted Riot CS Smoke
(1) A summary of how the military equipment was used and the purpose of its use.
Seven (7) officers received five (5) hours of training during one training exercise.
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
Training exercise was five (5) hours x four (4) officers x avg. $65/hr = $1,300. Training exercise with additional three (3) officers x five (5) hours x avg. $95/hr = $475.00. Source funds come from General Fund and Measure Y.
(5) The quantity possessed for each type of military equipment.
Attachment 1
17 Fifteen (15)
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
Forty (40) CTS 5230B CS Smoke @ $47.50 = $1900 plus tax and shipping. Source funds come from General Fund.
16. Section 12 – Munitions containing tear gas or OC, excluding standard, service issued handheld pepper spray
a. Defense Technology Stinger CS Rubber Ball Grenade
(1) A summary of how the military equipment was used and the purpose of its use.
None
(2) A summary of any complaints or concerns received concerning the military equipment.
None
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
None
(4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
None
(5) The quantity possessed for each type of military equipment.
None
Attachment 1