Watsonville City Council
June 10, 2025

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and the Indenture, and to perform all of its duties and obligations thereunder, and has duly authorized the execution and delivery of the Lease Agreement, the Ground Lease and the Indenture, and (b) the Property will be used in the performance of essential governmental functions.

Representation of the Authority. The Authority has represented and warranted to the City that the Authority has the full power and authority to enter into, to execute and to deliver the Lease Agreement, the Ground Lease, the Assignment Agreement and the Indenture, and to perform all of its duties and obligations thereunder, and has duly authorized the execution and delivery of the Lease Agreement, the Ground Lease, the Assignment Agreement and the Indenture.

NO CONSEQUENTIAL DAMAGES; USE OF THE PROPERTY; SUBSTITUTION OR RELEASE No Consequential Damages. In no event will the Authority or the Trustee be liable for any incidental, indirect, special or consequential damage in connection with or arising out of the Lease Agreement or the City’s use of the Property.

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 the Lease Agreement. In addition, the City has agreed 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 the Lease Agreement.

Substitution or Release of the Property. The City has the right to substitute alternate real property for any portion of the Property or to release a portion of the Property from the Lease Agreement. All costs and expenses incurred in connection with such substitution or release will be borne by the City. Notwithstanding any substitution or release of Property pursuant to the Lease Agreement, there will be no reduction in or abatement of the Base Rental Payments due from the City thereunder as a result of such substitution or release.

Any such substitution or release of any portion of the Property is subject to the following specific conditions, which have been made conditions precedent to such substitution or release:
(a) the City has 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 the 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 has 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 the Lease Agreement;
(c) the City has 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 have executed, and the City has 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 in the Lease Agreement and in the Ground Lease;

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(e) the City has provided notice of such substitution to each rating agency then rating the Bonds;
(f) no event of default (as described in the Lease Agreement) 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 will certify to the Trustee that any substitution will not cause the City to violate any of its covenants, representations and warranties made in the Lease Agreement.

MISCELLANEOUS
Law Governing. THE LEASE AGREEMENT WILL BE GOVERNED EXCLUSIVELY BY THE

PROVISIONS OF THE LEASE AGREEMENT AND BY THE LAWS OF THE STATE OF CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.

Validity and Severability. If for any reason the Lease Agreement is 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 thereunder, including the covenant to pay Rental Payments, is unenforceable for the full term thereof; then and in such event the Lease Agreement is and will be deemed to be a Lease Agreement 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 the Lease Agreement, except to the extent that such terms, provisions and conditions are contrary to or inconsistent with such holding, will remain in full force and effect.

Net-Net-Net Lease. The Lease Agreement will be deemed and construed to be a “net-net-net lease” and the City has agreed that the Rental Payments will 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.

Taxes. The City will 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 is obligated to pay only such installments as are required to be paid during the term of the 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 notifies 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 will 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.

Amendments.

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(a) The Lease Agreement and the Ground Lease may be amended and the rights and obligations of the Authority and the City thereunder may be amended at any time by an amendment thereto which becomes 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 may (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 the Lease Agreement or the Ground Lease. (b) The Lease Agreement and the Ground Lease and the rights and obligations of the Authority and the City thereunder may also be amended at any time by an amendment thereto which will 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 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 therein to or conferred therein on the Authority or the City, and which in either case do 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 therein or in regard to questions arising thereunder which the Authority or the City may deem desirable or necessary and not inconsistent therewith, and which do 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 the Lease Agreement;
(v) to provide for the issuance of Additional Bonds in accordance with 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 therein or modifications thereto as the Authority or the City may deem desirable or necessary, and which do not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel.

Assignment. The City and the Authority have acknowledged the assignment of the Lease Agreement (except for the Authority’s obligations and its rights to give consents or approvals thereunder), and the Base Rental Payments payable thereunder, to the Trustee pursuant to the Assignment Agreement. To the extent that the Lease Agreement confers upon or gives or grants the Trustee any right, remedy or claim under or by reason of the Lease Agreement, the Trustee has been explicitly recognized as being a third-party beneficiary thereunder and may enforce any such right, remedy or claim conferred, given or granted thereunder.

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APPENDIX C
AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE YEAR ENDED JUNE 30, 2024

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APPENDIX D

PROPOSED FORM OF BOND COUNSEL OPINION
[Closing Date]
Watsonville Public Finance Authority
Watsonville, California
Re: Watsonville Public Finance Authority Lease Revenue Bonds, Series 2025 Ladies and Gentlemen:

We have acted as bond counsel to the Watsonville Public Finance Authority (the “Authority”) in connection with the issuance by the Authority of $______ Watsonville Public Finance Authority Lease Revenue Bonds, Series 2025 (the “Series 2025 Bonds”), pursuant to the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”), and pursuant to an Indenture, dated as of June 1, 2025 (the “Indenture”), by and among the Authority, the City of Watsonville (the “City”) and U.S. Bank Trust Company, National Association, as Trustee. The Series 2025 Bonds will be principally secured by lease payments to be made by the City pursuant to a Lease Agreement, dated as of June 1, 2025 (the “Lease”), by and between the Authority and the City.

In our capacity as bond counsel, we have examined such law and such certified proceedings, certifications, opinions and other documents as we have deemed necessary to render this opinion. In rendering this opinion, we have relied upon certain representations of fact and certifications made by the Authority, the City and others. We have not undertaken to verify through independent investigation the accuracy of the representations and certifications relied upon by us. Regarding certain questions of law material to our opinion, we have assumed the correctness of certain legal conclusions contained in the written opinions of general counsel to the Authority dated the date hereof regarding the due adoption of the Resolution No. __ adopted by the Board of Directors of the Authority on May __, 2025, without undertaking to verify the same by independent investigation.

Based upon our examination of the foregoing, and in reliance thereon, we are of the opinion, under existing law, that:

1. The Authority is a joint exercise of powers authority duly organized and validly existing under the laws of the State of California with the full power to enter into the Indenture and the Lease, to perform the agreements on its part contained therein and to issue the Series 2025 Bonds.

2. The Indenture and the Lease have each been duly authorized and approved by the Authority and the Indenture and the Lease constitute the valid and binding obligations of the Authority enforceable against the Authority in accordance with their respective terms. The Indenture creates a valid pledge of the Base Rental Payments and other moneys pledged under the Indenture, subject to the provisions of the Indenture.

3. The Indenture and the Lease have each been duly authorized and approved by the City and the Indenture and the Lease constitute the valid and binding obligations of the City enforceable against the City in accordance with their respective terms.

4. The Series 2025 Bonds have been duly and validly authorized by the Authority and are legal, valid and binding limited obligations of the Authority, enforceable in accordance with their terms and the

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terms of the Indenture. The Series 2025 Bonds are limited obligations of the Authority payable solely from the Base Rental Payments and other moneys pledged under the Indenture as provided in the Indenture, but are not a debt of the City, the State of California or any other political subdivision thereof within the meaning of any constitutional or statutory limitation, and, neither the faith and credit nor the taxing power of the City, the State of California, or any of its political subdivisions is pledged for the payment thereof. The Authority has no taxing power.

5. Interest on the Series 2025 Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals; however, interest on the Series 2025 Bonds is taken into account in determining annual adjusted financial statement income for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the Authority and the City must comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the date hereof in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Authority and the City have covenanted to comply with all applicable requirements. Failure to comply with certain of such requirements may cause interest on the Series 2025 Bonds to be included in gross income for federal income tax purposes retroactively to the date hereof.

6. Interest on the Series 2025 Bonds is exempt from personal income taxation imposed by the State of California.

Except as expressly stated in paragraphs 5 and 6, we express no opinion regarding any tax consequences related to the ownership, sale or disposition of the Series 2025 Bonds, or the amount, accrual or receipt of interest on, the Series 2025 Bonds. Owners of the Series 2025 Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Series 2025 Bonds.

Our opinion is limited to matters governed by the laws of the State of California and federal law. We assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction.

The rights of the owners of the Series 2025 Bonds and the enforceability of the Series 2025 Bonds, the Indenture and the Lease are limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws affecting creditors’ rights, by the application of equitable principles, whether considered at law or in equity, and the exercise of judicial discretion in appropriate cases and by the limitations on legal remedies against public agencies in the State of California and laws relating to conflicts of interest.

We express no opinion as to any provision in the Series 2025 Bonds, the Indenture or the Lease with respect to the priority of any pledge or security interest, indemnification, or governing law. We also express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Series 2025 Bonds and expressly disclaim any duty to advise the owners of the Series 2025 Bonds with respect to matters contained in the Official Statement or other offering material.

This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Moreover, our opinions are not a guarantee of a particular result and are not binding on the Internal Revenue Service or any court; rather, our opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations, opinions, and covenants referenced above. Our engagement with respect to this matter has terminated as of the date hereof.

Respectfully submitted,

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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate, dated as of _____________________, 2025 (the “Disclosure Certificate”), is executed and delivered by the City of Watsonville (the “City”) in connection with the issuance by the Watsonville Public Finance Authority (the “Authority”) of its Lease Revenue Bonds, Series 2025 (the “Bonds”) pursuant to an Indenture dated as of June 1, 2025, by and among the City, the Authority, and U.S.

Bank Trust Company, National Association, as Trustee (the “Trustee”).

Capitalized terms not defined herein shall have the meaning set forth in the Indenture. The City covenants and agrees as follows:

SECTION 1. Purpose of this Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule (as the foregoing capitalized terms are hereinafter defined).

SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.
“Dissemination Agent” shall mean Urban Futures, Inc., or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.

In the absence of such a designation, the City shall act as the Dissemination Agent. “Financial Obligation” shall mean, for purposes of the Listed Events set out in Section 5(a)(10) and Section (5)(b)(8), a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term “Financial Obligation” shall not include municipal securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule.
“Listed Events” shall mean any of the events listed in Section 5 of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (“EMMA”) website of the MSRB, currently located at http://emma.msrb.org.
“Official Statement” shall mean the Official Statement for the Bonds dated _______________, 2025, as amended or supplemented.
“Participating Underwriter” shall mean the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.

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“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

SECTION 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent by written direction to such Dissemination Agent to, not later than March 31 after the end of the City’s fiscal year (which currently ends on June 30), commencing with the report due for the fiscal year ending June 30, 2025, provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the City may be submitted separately from and later than the balance of the Annual Report if they are not available by the date required above for the filing of the Annual Report.

An Annual Report shall be provided at least annually notwithstanding any fiscal year longer than 12 calendar months. The City’s fiscal year is currently effective from July 1 to the immediately succeeding June 30 of the following year. The City will promptly notify the MSRB of a change in the fiscal year dates. (b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report to the MSRB, the City shall provide the Annual Report to the Dissemination Agent (if the Dissemination Agent is not the City). If by fifteen (15) Business Days prior to the date specified in (a) for the Annual Report, the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall notify the City of such failure to receive the report. If the Dissemination Agent is other than the City, the City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the City and shall have no duty or obligation to review such Annual Report. (c) If the City fails to provide an Annual Report by the date required in subsection (a), the City shall or shall cause the Dissemination Agent to, in a timely manner, send a notice of such failure to file to the MSRB, in substantially the form attached as Exhibit A.

SECTION 4. Content of Annual Reports. The City’s Annual Report shall contain or include by reference the following:
(a) Financial Statements. The audited financial statements of the City for the most recent fiscal year of the City then ended. If the City prepares audited financial statements and if the audited financial statements are not available by the time the Annual Report is required to be filed, the Annual Report shall contain any unaudited financial statements of the City in a format similar to the financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. Audited financial statements of the City shall be audited by such auditor as shall then be required or permitted by State law. Audited financial statements, if prepared by the City, shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the City may from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the City shall modify the basis upon which its financial statements are prepared, the City shall provide a notice of such modification to the MSRB, including a reference to the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis. (b) Financial and Operating Data. Numerical and tabular information for the immediately preceding fiscal year in the following charts and tables:

1. Information of the type contained in Table 2 of the Official Statement;

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2. Information of the type contained in Table 3 of the Official Statement;

3. Information of the type contained in Table 4 of the Official Statement;

4. Information of the type contained in Table 5 of the Official Statement; and

5. Information of the type contained in Table 10 of the Official Statement, except that it is not necessary to identify the Primary Land Use.

Any or all of the items listed above may be included in, or by specific reference to, other documents, including the City’s Annual Comprehensive Financial Reports, or official statements of debt issues of the City or related public entities, which have been submitted to the MSRB or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The City shall clearly identify each such other document so included by reference.

SECTION 5. Reporting of Significant Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than ten business days after the occurrence of the event:

1. Principal and interest payment delinquencies;

2. Unscheduled draws on debt service reserves reflecting financial difficulties;

3. Unscheduled draws on credit enhancements reflecting financial difficulties;

4. Substitution of credit or liquidity providers, or their failure to perform;

5. Adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB);

6. Tender offers;

7. Defeasances;

8. Rating changes;

9. Bankruptcy, insolvency, receivership or similar event of the obligated person; or

10. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties.

Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.

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(b) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely manner not later than ten business days after the occurrence of the event:

1. Unless described in paragraph 5(a)(5), notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds;

2. Modifications to rights of Bond holders;

3. Bond calls;

4. Release, substitution, or sale of property securing repayment of the Bonds;

5. Non-payment related defaults;

6. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms;

7. Appointment of a successor or additional trustee or the change of name of a trustee; or

8. Incurrence of a Financial Obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders.
(c) Whenever the City obtains knowledge of the occurrence of a Listed Event described in Section 5(b), the City shall determine if such event would be material under applicable federal securities laws. (d) If the City learns of the occurrence of a Listed Event described in Section 5(a), or determines that knowledge of a Listed Event described in Section 5(b) would be material under applicable federal securities laws, the City shall within ten business days of occurrence file a notice of such occurrence with the MSRB. Notwithstanding the foregoing, notice of the Listed Event described in subsections (b)(3) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to owners of affected Bonds pursuant to the Indenture.

SECTION 6. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Disclosure Certificate must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB.

SECTION 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance or payment in full of all of the Bonds. If such termination occurs prior to the final maturity date of the Bonds, the City shall give notice of such termination in a filing with the MSRB.

SECTION 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be Urban Futures, Inc..

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SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3, 4 or 5(a) or (b), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) The amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or Beneficial Owners of the Bonds.

SECTION 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future notice of occurrence of a Listed Event.

SECTION 11. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, any Owner or Beneficial Owner of Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture or an event of default under the Lease Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.

SECTION 12. Duties, Immunities and Liabilities of Dissemination Agent. A Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save such Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

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SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, if any, the Participating Underwriter and the Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

CITY OF WATSONVILLE
By:

City Manager
ACKNOWLEDGED:

URBAN FUTURES, INC.,
as Dissemination Agent
By:

Authorized Signatory

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EXHIBIT A

NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD

OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Watsonville Public Finance Authority
Name of Issue: Watsonville Public Finance Authority Lease Revenue Bonds, Series 2025 Date of Issuance: [Closing Date]
NOTICE IS HEREBY GIVEN that the City of Watsonville (the “City”) has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate, dated as of June 6, 2024, executed by the City. The City anticipates that the Annual Report will be filed by __________.

Dated: __________
URBAN FUTURES, INC., as Dissemination Agent
By:

Name:

Title:

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APPENDIX F

BOOK-ENTRY ONLY SYSTEM
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from sources that the Authority believes to be reliable, but the Authority takes no responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Series 2025 Bonds, payment of principal, premium, if any, accreted value and interest on the Series 2025 Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Series 2025 Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Series 2025 Bonds (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each maturity of the Securities in the aggregate principal amount of such maturity, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s highest rating: “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records.

Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.

4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede &

E-2
Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners.

In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Securities within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Principal, redemption price and interest payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption price and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. If applicable, a Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to tender/remarketing agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to tender/remarketing agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to tender/remarketing agent’s DTC account.

10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Authority or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

11. The Authority may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.

1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, June 10, 2025
TO: CITY COUNCIL
RECOMMENDED BY: DEPUTY CITY MANAGER CALUBAQUIB
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: APPROVE 2025-2027 CITY COUNCIL STRATEGIC PLAN
RECOMMENDATION:

Adopt a resolution approving the 2025-2027 City Council Strategic Plan.

BACKGROUND:

Every two years, the City Council sets in place a Strategic Plan that aligns the City’s work with the City’s budget and sets forth Priorities and Strategies to guide the organization’s efforts. Staff then create a work plan that outlines policies, projects and programs to be provided for the community in alignment with the Strategic Plan.

DISCUSSION:

Since 1994, the Watsonville City Council has developed a Strategic Plan to support long-term planning for both operating and capital projects. The Council Strategic Plan is a roadmap for the future that:
• Articulates the Council’s priorities and guides its policy decisions. • Enables staff to develop feasible, measurable, and actionable strategies to address the Council’s priorities by implementing policies, projects and programs and allocating resources accordingly.
• Focuses the City’s efforts to engage community members and agency partners in achieving the City Council’s goals.
• Enables the City to prioritize time and resources in alignment with the Council’s priorities.
• Ensures accountability and transparency in furthering effective policies and City services that the community needs.

On April 21, 2025, City Council and Department Heads convened for a Strategic Planning Workshop to discuss and identify the priorities for the 2025-2027 Strategic Plan. The workshop was open to the public

2 and facilitated by an outside consultant who helped the City Council review progress made through the previous strategic plan and set forward-looking goals and priorities for the City.

During previous years, the Council identified seven (7) Strategic Priorities to advance the City and provide services that improve the quality of life of Watsonville residents. The Council evaluated these existing Priorities and concluded that they continue to serve as strong pillars of the work that needs to be accomplished in the next two years.

The seven Priorities reaffirmed during the Council Workshop were:
 Community Engagement & Well-Being
 Economic Development
 Efficient and High-Performing Government
 Fiscal Health
 Housing
 Infrastructure & Environment
 Public Safety
The Council worked diligently to pare down an extensive list of important issues and created Strategies that support each Priority. Following the Workshop, City staff created an extensive list of policies, projects, and programs to support the identified Strategies and that will collectively become the Work Plan for the next two fiscal years.

The Strategic Plan will be a living document that features a comprehensive framework that can be adjusted based on the community's current needs. The Council will receive a progress report on work accomplished during the midyear and the annual budget report. At that time, the Council could consider adding, deleting, or modifying the Priorities and Strategies set forth in this document, along with any budget adjustments required to support proposed changes, to address emerging priorities or in response to community needs. The draft of the Strategic Plan is attached for review and final adoption by the Council.

As the Council adopts this Strategic Plan to guide the City’s work for FY 2025-2027, it is important to note the next steps to evaluate and assess progress toward meeting these goals. The Strategic Plan is used to guide decision-making at all levels of the organization. It allows the City to focus on core functions and ensure that every Department is working together towards common goals. To evaluate progress made toward that end, the City Manager’s Office will prepare two Strategic Plan Progress Reports per year.

City Council Strategic Plan
Priorities
Strategies
Workplan
Policies, Projects, Programs

3 These reports will track progress by describing key accomplishments for each identified priority area and the investment that has been made in support of that priority. This reporting is a critical tool for communicating successes and challenges to the Council, staff and the community at large.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

This action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15378(b)(5), in that adopting a Resolution approving a Strategic Plan does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and if a “project,” is exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.

STRATEGIC PLAN:

This action supports all Priorities of the Strategic Plan as it serves to reaffirm the Council’s Priorities and establish the City Council’s Strategic Plan and Workplan for the next two fiscal years.  Economic Development
 Infrastructure & Environment
 Housing
 Fiscal Health
 Public Safety
 Community Engagement & Well-being
 Efficient and Well-performing Government
FINANCIAL IMPACT:

There is no financial impact associated with the approval of the 2025-2027 City Council Strategic Plan. Any individual policies, projects, or programs requiring budget allocations will be included in the final proposed budget to be considered and approved by the City Council during the June 24, 2025, meeting.

ALTERNATIVE ACTION:

The City Council may choose to:

1. Not approve the Strategic Plan and direct staff to continue current services without the implementation of a Strategic Plan, or

2. Approve the Strategic Plan with edits.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

None.

Reso No. (CM)
Meeting Date: 061025 SWZ ______ TV ______ CM ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE APPROVING THE 2025-2027 CITY COUNCIL

STRATEGIC PLAN
WHEREAS, since 1994, the City Council has developed a Strategic Plan to support long-term planning for both operating and capital projects, and WHEREAS, the City Council adopts a new Strategic Plan every two years, and WHEREAS, on April 21, 2025, City Council and Department Heads convened for a Strategic Planning Workshop to discuss and identify the priorities for the 2025- 2027 Strategic Plan, and
WHEREAS, the City Council reaffirmed the seen Priorities of Community Engagement & Well-Being, Economic Development, Efficient and High-Performing Government, Fiscal Health, Housing, Infrastructure & Environment, and Public Safety.

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

1. This action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15378(b)(5), in that adopting a Resolution approving a Strategic Plan does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and if a “project,” is exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.

Reso No. (CM)
Meeting Date: 061025 2

2. That the 2025-2027 City Council Strategic Plan, a copy of which is attached hereto and incorporated herein by this reference, is hereby approved. ************************************

STRATEGIC PLAN

C I T Y C O U N C I L
watsonville.gov
2025 - 2027
Priorities
Strategies
Workplan

2 This page was left intentionally blank

3 WATSONVILLE CITY COUNCIL 2025
Eduardo Montesino
District 1
MAYOR
Maria Orozco
District 3
Casey Clark
District 5

MAYOR PRO TEMPORE
Kristal Salcido
District 4
Jimmy Dutra
District 6
Ari Parker
District 7
Vanessa Quiroz-Carter
District 2
“Working with our community to create
positive impact through service with heart”

4 Every two years, the City Council adopts a Strategic Plan to align its priorities and the community’s needs with the City’s budget. This plan also sets a clear, forward-looking vision for the organization and the services the City delivers.

The 2025–2027 Strategic Plan identifies seven long-term priorities. For each one, the Council has outlined targeted strategies and actions aimed at achieving measurable results and driving meaningful progress for our community.
• Clearly defines the Council’s priorities and
informs policy decisions.
• Provides staff with a framework to develop
feasible, measurable, and actionable strategies
that support policy implementation and effective
resource allocation.
• Guides the City’s efforts to engage community
members and partner agencies in advancing the
City’s mission.
• Helps the City prioritize time and resources in
alignment with the Council’s goals.
• Promotes accountability and transparency in
delivering effective policies and services that
respond to community needs.

Strategic Plan: 2025 - 2027 Priorities
A Road Map for the Future
Economic Development
Efficient & Well-Performing Government
Housing
Community Engagement & Well-being
Public Safety
Infrastructure & Environment
Fiscal Health

5 Exploring innovative and inclusive ways to engage residents in civic life by reaching diverse populations through culturally relevant events, interactive public forums, and accessible digital platforms will strengthen community connections, enhance trust in local government, and ensure that all voices are heard in shaping the community’s future.

Creating inclusive, diverse, and accessible programs and spaces that meet the needs of residents of all ages, backgrounds, and abilities; including recreational, educational, and cultural programs that reflect the community’s interests and values; foster greater participation, promote lifelong learning, and support overall well-being.

Increasing civic engagement by meeting residents where they are—both physically and digitally - by bringing City services and information directly into neighborhoods through community events and partnerships, and actively growing the City’s email database and collaborating with PVUSD to better reach families; will create more a informed, connected, and engaged community.

City departments leading the work to support:

Strategies
Creatively Increase Community Involvement
Expand Programming for All
Expand City Communications and Outreach Efforts
Foster a vibrant, connected, and healthy community by creatively increasing opportunities for residents to participate in civic life, expanding inclusive programming for all ages and backgrounds, and strengthening collaboration with Pajaro Valley Unified School District (PVUSD) to make recreational spaces more accessible to the public.

Additionally, the City will continue to broaden its communication and outreach efforts to ensure all community members are informed, involved, and empowered to contribute to its growth and quality of life.

Community Engagement
& Well-being

6 Policy Project Program/Event
Work Plan
Supporting the Strategic plan
2025 - 2027
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2025-2027 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise and funding is allocated accordingly.

How will this be accomplished?
Creatively Increase Community Involvement
Continue to expand Teen Action Council
Expand Ride a long program
Continue Student Success Card Initiative
Host the Watsonville Academy to encourage residents to
learn about the City operations and Government structure Partner with PVUSD to host Summer in the City youth
internship program
Community Engagement & Well-being
Engagement
Lead
Department
KEY
Planning Investment
Communication Other
Completed Ongoing
In Progress Delayed
City Manager
& All Depts.

City Manager
& All Depts.

Police
Parks & Library
Library
Offer a variety of Special Events, including Strawberry Festival, 4th of July and holiday events.

Host Airport Open House with Pyrotechnics
Grow ParkRx with Salud para la Gente and
County Health
Parks
Parks
Airport

7 Host Historical Aircraft Display Day
Continue Poet Laureate and Youth Poet Laureate Programs Expand programs and services for Seniors
Expand programs and events at the Watsonville
Youth Center
Continue to partner with PVUSD to offer Expanded Learning Opportunities Program (ELOP)
Continue to Implement Library Strategic Plan
Expand Programming for All
Community Engagement & Well-being
EngagementPlanning Investment Communication Other
Expand programs and events at the Watsonville Senior
Center
Continue Watsonville Reads: One book, One community
Program
Continue to offer a variety of programs and events for all ages through Measure R
Host Wheels@Watsonville Car Show
Policy Project Program/Event
Creatively Increase Community Involvement (Continued)
Lead
Department
Parks
Library
Library
Library
Parks &
Library
Library
Parks
Parks
Airport
Airport
Support annual Council District Meetings
Support the PV Collaborative to advance community
health& wellness, economic mobility, and engagement
City Manager
City Manager
Provide public outreach and interactive events to educate the public on Public Work’s purpose and activities that provide public health, safety, and protect the natural environment and encourage community engagement to do the same.

Public Works
Increase information about voter registration City Clerk

8 Continue to offer 4th grade Field Trips at the Airport Expand Programming for All (Continued)
Community Engagement & Well-being
Policy Project Program/Event
EngagementPlanning Investment Communication Other
Lead
Department
Airport
Expand email list to engage residents and distribute
information
Implement new Software, including Open Captions in
City Council Chambers City Clerk
City Manager
Expand City Communications and Outreach Efforts
Collaborate with CA State Parks to provide education about state parks
Create and Implement an Outreach Plan & Develop a
Marketing Plan Library
Parks
Adopt an Age Friendly Community Strategic Plan Parks
Strengthen public education and community outreach Police Offer a Bilingual workshop for candidates (Council) City Clerk

9 Strengthening the foundation of the local economy by providing resources, streamlining processes, fostering a businessfriendly environment through technical assistance, promoting local purchasing, and creating opportunities for networking and collaboration to retain jobs will preserve the unique character of the community and encourage continued economic growth from within.

Fostering a dynamic and resilient local economy that reflects changing market trends and community needs by offering incentives to investors, streamlining the permitting process to be more customer-focused, cultivating a results-driven internal culture, advocating for more state-issued liquor licenses and prioritizing the attraction of entertainment and experiencebased businesses will attract new businesses that are adaptable to the evolving retail landscape.

Leveraging the Downtown Specific Plan as a powerful tool to drive revitalization and sustainable development by actively promoting the plan’s vision, incentives, and development guidelines to attract investment will encourage mixed-use projects will enhance the overall vibrancy of the downtown area and build strong public-private partnerships that transform underutilized spaces into thriving hubs of activity, commerce, and community life.

Strategies
Support Local Businesses
Attract New and Diversified Businesses
Engage with Property Owners and Investors to Utilize the Downtown Specific Plan as a Catalyst for Development
City departments leading the work to support:

Focus on building a strong, resilient, and inclusive local economy by supporting existing local businesses through resources and partnerships, attracting new and diverse businesses that meet the community’s needs, and fostering investment in key areas. By actively engaging with property owners and investors and leveraging the Downtown Specific Plan as a catalyst for revitalization, the City aims to stimulate economic growth, create jobs, and enhance the vibrancy of its commercial districts.

Economic
Development

10 Policy Project Program/Event
Work Plan
Supporting the Strategic plan
2025 - 2027
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2025-2027 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise and funding is allocated accordingly.

Support Local Businesses
Partner with workforce Investment Board to expand business and employment opportunities Conduct an Airport Economic Benefits Analysis
Develop outreach program to build support for public
improvements (e.g., social media posts, surveys, community events, businesss roundtable events)
Build strategies to help current business
grow and thrive
Economic Development
KEY
Completed Ongoing
In Progress Delayed Engagement
Lead
Department
Planning Investment Communication Other
Airport
City Manager
HR
Community
Development
Prioritize the attraction of entertainment and
experience-based businesses
Focus on engaging commercial property owners to improve image and fill vacant spaces
Attract New and Diversified Businesses
Encourage creation of new retail, professional, and residential uses as well as personal services within the downtown.

Community
Development &
City Manager
Community
Development &
City Manager
Community
Development
How will this be accomplished?

11 Engage with Property Owners and Investors to Utilize the Downtown Specific Plan as a Catalyst for Development
Adopt and implement a Public Art Master Plan
Hire support to expand retail business in the City
Develop a regular reporting schedule on key objectives of the DWSP, such as tracking public and private investments, new housing units, business openings, or other implementation metrics Attract New and Diversified Businesses (Continued)
Economic Development
Expand the Downtown Parking District to the boundaries of the Downtown Watsonville Specific Plan (DWSP) to make all nonresidential land uses exempt from onsite parking requirements Address for more state-issued liquor licenses moratorium Other
Implement City branding and image project (wayfinding)
Work collaboratively with Santa Cruz METRO and MidPen Housing on redeveloping the Watsonville Transit Center to improve bus service and provide housing
Adopt the General Plan 2050 and associated EIR
Policy Project Program/Event
EngagementPlanning Investment Communication Other
Lead
Department
City Manager
City Manager
Parks
Community
Development
Community
Development
Community
Development
Community
Development
Community
Development &
City Manager

12 Improving the overall experience for residents and businesses by modernizing and streamlining City services, updating antiquated systems and software to leverage the latest technology, simplifying and accelerating permitting processes, creating an efficient workforce structure, and reducing wait times and bureaucratic hurdles to foster a more business-friendly environment will promote economic growth, and create a more responsive, transparent, and innovative municipal government.

Fostering clear communication and collaboration between departments, Council Members, and other elected officials by aligning stakeholders on shared priorities and initiatives will leverage and showcase Watsonville’s unique strengths and values and ensure our community’s needs are met.

Enhancing both internal and external interactions, by investing in professional development, upgrading the phone system to reduce waiting times, streamlining the City website for more straightforward navigation, adjusting front counter hours to meet community needs, and highlighting the positive work being done will increase customer satisfaction.

Strategies
Modernize and Streamline City Services
Develop Effective Advocacy to Ensure Local Control
Improve Customer Service
City departments leading the work to support:

Deliver responsive, transparent, and effective services to the community by modernizing and streamlining City services through updated technology and improved internal processes, implementing the Classification Study to ensure a balanced and efficient workforce structure and enhancing customer service across all departments.

Additionally, developing strong advocacy efforts will ensure the community’s unique needs and priorities are effectively represented at all levels of government.

Efficient & High
Performing Gov.

13 Policy Project Program/Event
Work Plan
Supporting the Strategic plan
2025 - 2027
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2025-2027 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise and funding is allocated accordingly.

Modernize and Streamline City Services
Develop and maintain a cybersecurity incident response plan Expand multi-factor authentication using Azure MFA
Migrate shared and department files to Microsoft 365/Teams Implement work order and asset management system
Create a Building Permit Portal to processing permits easier Implement records retention education and destruction Citywide Update all job descriptions within the City per study
recommendations.

Improve Processing and Implementation of Retention
Strategies through NextRequest Software Upgrade
Utilize features in MUNIS upgrade to streamline HR
processes (forms, evaluations, etc.)
Update internal policies to stay current with updated
legislation.

Efficient and High Performing Government KEY
Completed Ongoing
In Progress Delayed
How will this be accomplished? Engagement
Lead
Department
Planning Investment Communication Other
City Clerk
HR & Finance
City Clerk & HR
HR
City Clerk
IT
IT
IT
Library & Parks
Community
Development

14 Improve Customer Service
Provide excellent customer service to all City departments to maintain an efficient, well-maintained, and safe vehicle fleet while moving towards implementation of the State’s clean vehicle goals Utilize See-Click-Fix for maximizing resident driven
work orders
Provide customer service training for all city employees to strengthen our public service standards
Continue partnerships for regional and local climate
related grants
Coordinate stakeholder partnership for homelessness encampment management, policy development, housing and resources - City Action Plan
Deploy improved online customer account access
for payments and service
Update and refresh the website
Assess counter hours and staff availability to enhance
Customer Service
Continue to support transparent reporting for Measure R, Measure Y and Measure Q (County) through public advisory committees
Develop Effective Advocacy to Ensure Local Control
Efficient and High
Performing Government
Continue to coordinate the Traffic Advisory Committee to improve traffic safety on neighborhoods.

Utilize the Nature Center to promote and foster climate change resiliency behaviors and actions
Expand electronic payment methods by installing kiosks at payment office.

Policy Project Program/Event
EngagementPlanning Investment Communication Other
Lead
Department
Public Works
PW, PCS, Lib., PD,
Fire, & Finance

CM, PW, CDD,
Lib., & PCS
Public Works
Public Works
Public Works
All Depts.
& Finance
Public Works
Public Works
City Manager
& HR
City Manager
Community
Development

15 City departments leading the work to support:

Avoiding rising costs from delays by advancing projects quickly and efficiently and exploring funding opportunities to address critical needs, such as stormwater improvements and homelessness, will ensure responsible financial management, while meeting community priorities.

Maintaining a balanced budget and strong reserve balance by aligning the budgeting process with the Strategic Plan Workplan will ensure resources are effectively allocated to support the City’s goals and initiatives.

Expanding partnerships and maximizing grant opportunities by growing the volunteer program to increase staff capacity, collaborating with the regional partners, enhancing parking enforcement, and establishing a stormwater utility fund will strengthen the City’s financial resources while supporting vital services and infrastructure.

Strategies
Ensure Long-Term Fiscal Stability
Maintain a Balanced Budget and a Robust
Explore Innovative Ways to Generate New
Secure long-term fiscal health by prioritizing a balanced budget and maintaining robust reserve balances to safeguard against economic uncertainties, exploring innovative ways to generate new revenue streams while carefully managing expenses, maximizing opportunities through strategic partnerships, and actively pursuing grants to supplement funding. These efforts will help sustain essential services, support community growth, and strengthen the City’s financial foundation for the future.

Fiscal Health

16 Policy Project Program/Event
Work Plan
Supporting the Strategic plan
2025 - 2027
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2025-2027 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise and funding is allocated accordingly.

Ensure for Long-Term Fiscal Stability
Prepare a comprehensive, balanced budget that includes a long-term budget plan and strategic priorities
Update Community Development Department
Master Fee Schedule
Update Development Impact Fee
Implement policies to maintain a healthy fund balance and fiscal reserve policies to sustain a resilient financial future Ensure balanced financial revenue streams and user fees cost recovery.

Fiscal Health
KEY
Completed Ongoing
In Progress Delayed
How will this be accomplished? Engagement
Lead
Department
Planning Investment Communication Other
Finance
Community
Development
Community
Development
Finance
Finance
Maintain a Balanced Budget and a Robust Reserve Balance Coordinate timely and proactive input to develop the Capital Improvement Plan, financial plan, and annual budget, and administer the department’s budget activities
All Depts.

Explore development of a stormwater fee Public Works

17 Explore Innovative Ways to Generate New Revenue
Manage our Retirement Liability
Lobby Government officials for additional funds to be invested in our community Explore Freedom County Sanitation District annexation into City Utilities
Ensure ability to fiscally comply with Chrom 6 and PFAS legislative compliance
Monitor budget performance and key economic indicators
quarterly, allowing us to make informed adjustments and financial decisions.

Fiscal Health
Leverage bond financing to support major infrastructure projects to be built in our community
Other
Implement Airport Aviation Storage Unit (Hangars)
auto-payment
Plan and implement the capital improvement investment in infrastructure in an efficient manner to help ensure continued reliability of City assets, and continue to pursue grants and other funding sources to mitigate cost impacts on the community Policy Project Program/Event
EngagementPlanning Investment Communication Other
Lead
Department
Public Works
Finance
All Depts.

Airport &
Finance
Finance
Finance
Public Works
City Manager
Maintain a Balanced Budget and a Robust Reserve Balance (Continued) Prepare a Comprehensive Annual Financial Report including external audit review, to ensure integrity Finance
Prepare an Annual Mid-Year Report and present to City
Council with appropriation corrections Finance
Establish a Contingency Fund for non-planned Operational expenses
Finance

18 Promoting thoughtful mixed-use developments by integrating residential, commercial, and community spaces and supporting local businesses will foster a sense of community while ensuring balanced and sustainable growth and create vibrant, walkable neighborhoods that enhance quality of life.

Increasing housing options for all sectors of the community by supporting housing for workforce and middle-income residents, updating the General Plan and assessing our growth opportunities will allow for the development of additional housing to meet the growing needs of our diverse population.

Expanding housing options by encouraging the development of accessory dwelling units (ADUs), while carefully minimizing impacts on existing neighborhoods will balance growth with preserving neighborhood character.

Strategies
Encourage Thoughtful Mixed-Use Developments
Increase Housing Options for all Sectors of the Community Encourage the Development of ADUs while Minimizing Impacts to Neighborhoods City departments leading the work to support:

Encourage thoughtful mixed-use developments that blend residential and commercial spaces by increasing diverse housing options to serve all community sectors. By developing accessory dwelling units (ADUs) while carefully managing their impact to preserve neighborhood character and quality of life will increase housing affordability and accessibility.

Housing

19 Policy Project Program/Event
Work Plan
Supporting the Strategic plan
2025 - 2027
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2025-2027 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise and funding is allocated accordingly.

Encourage Thoughtful Mixed-Use Developments
Explore new ways to incentivize mixed-used developments Housing
KEY
Completed Ongoing
In Progress Delayed
How will this be accomplished? Engagement
Lead
Department
Planning Investment Communication Other
Community
Development
Explore opportunities for businesses to provide housing to employees
Promote the City’s housing programs through outreach and educational opportunities
Prepare a user-friendly handout to explain density bonus regulations as they apply in the City of Watsonville
Increase Housing Options for all Sectors of the Community Support grant funding opportunities for affordable housing projects (e.g., AHSC program)
Community
Development
Community
Development
Community
Development
Community
Development
Update City’s affordable housing ordinance
Implement Housing Element strategies and policies, such as amending the zoning code concerning Density Bonus (WMC Chapter 14-47), Transitional Housing (WMC Chapter 14-16), ADUs (WMC Chapter 14-23), and DWSP.

Community
Development
Community
Development
Approve HOME program documents by HCD Community
Development

20 Encourage the Development of ADUs while Minimizing Impacts to Neighborhoods Housing
Prepare a user-friendly handout on the new requirements and processes for ADUs/JADUs
Other
Approve CDBG 5 year plan by HUD
Explore ways of assisting new homeowners through
education and financing
Approve PLHA 5 year plan
Policy Project Program/Event
EngagementPlanning Investment Communication Other
Lead
Department
Community
Development
Community
Development
Community
Development
Community
Development

21 City departments leading the work to support:

Prioritizing funding for deferred maintenance projects, including lighting, by allocating the necessary resources to repair and upgrade critical infrastructure will ensure long-term safety and reliability for the community.

Providing safe, accessible, and well-maintained infrastructure for everyone by ensuring that street, sidewalk, multimodal, and road improvements are carried out equitably across all neighborhoods will promote fairness and connectivity throughout the entire community.

Enhancing environmental, economic and social sustainability by leading programs and policies related to climate change, resource management, energy and green building, watershed management, pollution prevention and control and laboratory services will create a cleaner and greener community.

Strategies
Address Aging Infrastructure and Facilities
Ensure that Sidewalk and Road Improvements are Equitably Implemented Promote Environmental Sustainability
Protect the environment by addressing aging infrastructure and facilities, completing lighting installations and upgrades Citywide, and ensuring that improvements to streets, sidewalks, and multimodal roads are implemented equitably across all neighborhoods to promote safety, accessibility, and environmental sustainability.

Infrastructure
& Environment

22 Policy Project Program/Event
Work Plan
Supporting the Strategic plan
2025 - 2027
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2025-2027 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise and funding is allocated accordingly.

Address Aging Infrastructure and Facilities
Upgrade Fire Station 2 living quarters to improve health and safety
Conduct a Fire Department Facilities Needs Assessment
Replace asphalt with concrete at both Fire Stations
to provide stronger surfaces for Fire apparatus
Develop a Fire Department Master Plan
Install new HVAC at all city facilities
Complete Airport Fuel Farm Secondary containment
upgrade
Replace card access and CCTV at all facilities
Slurry & Seal Southside Ramp
Conduct Field-wide Taxilane Striping Rehabilitation
Infrastructure and Environment
KEY
Completed Ongoing
In Progress Delayed
How will this be accomplished? Engagement
Lead
Department
Planning Investment Communication Other
Airport
Airport
Fire
Fire
Fire
Fire
Finance &
Public Works
IT
Airport
Install Pillar Booths: Study Rooms at Main Library Library

23 Address Aging Infrastructure and Facilities (Continued) Infrastructure
& Environment
Policy Project Program/Event
Replace aging storage and servers that have reached end of life and support
Finalize and maintain federal funding for the electrical project at wastewater treatment plant
Construct water infrastructure projects: Reservoir 2, Well #4, Miles Lane
ESCO Phase 2: improvements at WWTP, aeration, belt
press, cogen, completing SECAP (system evaluation
capacity assurance plan)
Complete recycled water plant electrical improvements
Construct the Boiler infrastructure project at WWTP
Pursue partial or full funding for the critical wastewater headworks project ($37 million project)
Upgrade AV equipment at the Main Library, Meeting Room
Complete Callaghan Park Upgrades
Upgrade public bathrooms at Main Library
Complete Ramsay Park Renaissance Project
Complete Installation and Upgrades to Lighting throughout the City
EngagementPlanning Investment Communication Other
Lead
Department
IT
Public Works
Public Works
Public Works
Public Works
Public Works
Public Works
Library
Library
Parks
Parks
Public Works
Upgrade Public Computers at both locations Library
Parks Begin park master plan process for River Park and Pinto Lake Park
Construct Rooftop Project at Main Library Library

24 Address Aging Infrastructure and Facilities (Continued) Infrastructure
& Environment
Policy Project Program/Event
Develop an Internal Service Fund for facilities management Utilize facilities needs assessment for project prioritization Complete City Plaza Revitalization Project
Identify procedure to include cost of conduit for future fiber as part of street rennovation/construction
Fund and implement Park Assessment Plan
Improve and invest in the efficient maintenance of the City’s transportation systems including roadways, striping, and sidewalks to promote walkability, bicycling, accessibility, and overall safety EngagementPlanning Investment Communication Other
Lead
Department
Public Works
Public Works
IT
Parks
Parks
Public Works
Ensure that Streets, Sidewalks, Multimodal and Road Improvements are Equitably Implemented throughout the City
Re-imagine Main Street (SR 152) to function as a downtown street with priority given to pedestrians and destination traffic
Work with Public Works to re-imagine Main Street (within City R/W) to function as a downtown street with priority given to pedestrians and destination traffic
Explore grant funding opportuntities for roadway and
streetscape improvements
Develop funding mechanism to invest in roadway and
streetscape improvements on Main Street per the DWSP
Community
Development
Community
Development
Community
Development
Community
Development &
Public Works
Explore removing the truck traffic designation from SR 152 within downtown
Work with SCCRTC on designing/implementing regional facilities that connect Watsonville to the wider region (e.g., ZEPRT project, Pajaro River Levee Trail)
Community
Development
Community
Development

25 Infrastructure
& Environment
Policy Project Program/Event
EngagementPlanning Investment Communication Other
Lead
Department
Environmental Sustainability
Install Airport Pollution Control Facility (Wash Rack)
Install new windows at Fire Station 2 for energy efficiency Increase tree canopy within the City
Provide solid waste collection and disposal for the City in an efficient and sustainability-focused manner that continues to meet all State and Federal regulations.

Maintain an efficient, well-maintained, and safe vehicle fleet while moving towards implementation of the State’s clean vehicle goals and mandates.

Consider pursuing approval of an Urban Sustainability Area designation from the Central Coast Regional Water Quality Control Board for the DWSP area to allow offsite compliance for water quality treatment and retention requirements Provide planning, technical guidance, and project management for energy conservation, sustainability, and renewable energy resources and projects for all City departments
Meet all Federal, State and regulatory mandates to protect the natural environment through efficient management and maintenance of the City’s water, stormwater, wastewater, and recycled water treatment infrastructure.

Support Airport Green Strategy to reduce carbon footprint Implement Urban Forest Master Plan
Airport
Fire
Airport
Parks
Parks
Public Works
Public Works
Public Works
Public Works
Public Works

26 City departments leading the work to support:

Fostering a supportive work environment by providing ongoing training and career development opportunities and offering competitive benefits will build a skilled, dedicated workforce committed to protecting and serving the community effectively.

Coordinating closely with partner agencies and organizations by streamlining emergency communications, creating dedicated funding streams to address public safety impacts, and accessing training and resources for specialized challenges will ensure timely, clear, and effective information sharing and improve response efforts and community safety.

Developing innovative programs that foster community involvement and improve service delivery by expanding the Police Service Specialists program, increasing support for law enforcement and growing Neighborhood Watch programs will strengthen community partnerships and promote neighborhood safety.

Strategies
Attract and Retain Public Safety Employees
Coordinate with Partners to Prepare for Emergencies
Develop Innovative Public Safety Programs
Enhance public safety by attracting and retaining skilled public safety employees and strengthening coordination and communication with partners to improve emergency preparedness. Develop innovative public safety programs that address the community’s evolving needs and promote a safer environment for all residents.

Public Safety

27 Policy Project Program/Event
Work Plan
Supporting the Strategic plan
2025 - 2027
The list below reflects the work that various City Departments will complete and ideas to be explored during the 2025-2027 Fiscal Years to support the advancement of the Council’s Strategic Priorities. Additional work and projects that emerge as part of continued reassessment of community needs could be added as the Council reviews progress of their Strategic Plan or as new operational needs arise and funding is allocated accordingly.

Attract and Retain Public Safety Employees
Expand the Fire Cadet Program
Continue to offer the Fire Youth Academy
Develop a Firefighter Trainee Program to support workforce development
Recruit a local, well-qualified, professional and diverse workforce to improve employee retention.

Public Safety
KEY
Completed Ongoing
In Progress Delayed
How will this be accomplished? Engagement
Lead
Department
Planning Investment Communication Other
Fire
Police & Fire
Implement a Chiefs Advisory Board Police
Fire
Fire
Expand Police Cadet Program
Expand Summer Youth Academy
Police
Police
Partner with County on development of multi
jurisdictional hazard mitigation plan
Coordinate with Partners to Prepare for Emergencies
Continue participation in regional 911 JPA City Manager Public Works

28 Develop Innovative Public Safety Programs
Public Safety
Continue to offer the Car Seat Safety Program
Other
Explore closure of Airport’s Crosswind Runway 9-27 - Per Council direction.

Policy Project Program/Event
EngagementPlanning Investment Communication Other
Lead
Department
Airport
Fire
Expand Neighborhood Watch Program
Continue coordination and training with EOC
(County and regional partners) to protect our community during emergencies
Police
CM
Continue to lead the community Youth Developmental
Asset Movement to align goals of all youth services
providers in prevention and youth success
Parks
Expand the fire Ride-along program
Continue fire safety presentations thorough school
visits and station tours
Fire
Fire
Continue Caminos Hacia El Exito Police
Host Agua Con La Chota Police
Apply Code enforcement tools to ensure compliance with
life and safety rules of the City Community
Development

June 10, 2025 Page 875 of 908
Recommendation
Adopt a resolution Approving the 2025–2027
City Council Strategic Plan.

Purpose of the Strategic Plan
• Aligns City work with budget priorities
• Guides development of a work plan
• Helps staff implement policies, projects, and programs • Supports long-term planning and community engagement

City Council Strategic Plan
Priorities
Strategies
Workplan
Policies, Projects, Programs

Strategic Planning Process
Workshop held April 21, 2025
• Open to the public
• Facilitated by an external consultant
• Reviewed previous progress
• Established priorities and strategies for next two years

Reaffirmed Priorities
• Community Engagement & Well-Being
• Economic Development
• Efficient & High-Performing Government
• Fiscal Health
• Housing
• Infrastructure & Environment
• Public Safety Page 880 of 908
Strategy Development
• Council identified key strategies for each priority

Strategies
Community Engagement and Well Being
• Creatively Increase Community Involvement
• Expand Programming for All
• Expand City Communications and Outreach Efforts
Economic Development
• Support Local Businesses
• Attract New and Diversified Businesses
• Engage with Property Owners and Investors to Utilize the Downtown Specific Plan as a Catalyst for Development
Efficient and High-Performing Government
• Modernize and Streamline City Services
• Develop Effective Advocacy to Ensure Local Control
• Improve Customer Service
Fiscal Health
• Ensure Long-Term Fiscal Stability
• Maintain a Balanced Budget and a Robust Reserve Balance • Explore Innovative Ways to Generate New Revenue

Housing
• Encourage Thoughtful Mixed-Use Developments
• Increase Housing Options for all Sectors of the Community • Encourage the Development of ADUs while Minimizing Impacts to Neighborhoods Infrastructure and Environment
• Address Aging Infrastructure and Facilities
• Ensure that Sidewalk and Road Improvements are Equitably Implemented • Promote Environmental Sustainability
Public Safety
• Attract and Retain Public Safety Employees
• Coordinate with Partners to Prepare for Emergencies
• Develop Innovative Public Safety Programs
Strategies

Workplan and Budget Alignment
• Using the Council’s identified Strategies, Staff developed the City's 2025– 2027 Work Plan
• The Workplan outlines the policies, programs, and projects staff will focus on over the next two years
• Priorities align with proposed Biennial Budget
• Future projects requiring funding will be included in the June 24, 2025, budget proposal Page 884 of 908
Updates and Accountability
• Plan is adaptable to emerging community needs
• Reviewed during midyear and annual budget with biannual progress reports
• Reports will highlight accomplishments and investments

Recommendation
Adopt a resolution Approving the 2025–2027
City Council Strategic Plan.

QUESTIONS?

1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, June 10, 2025
TO: CITY COUNCIL
WRITTEN BY: ASSISTANT PUBLIC WORKS & UTILITIES DIRECTOR FONTES RECOMMENDED BY: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: APPROVAL OF PROJECT LISTS FOR TRANSPORTATION PROJECTS FUNDED BY MEASURE D AND SB 1 FOR FY25/26
RECOMMENDATION:

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

1. Measure D in FY25/26 through FY29/30

2. Senate Bill 1 (SB1) in FY25/26
BACKGROUND:

The City’s proposed Capital Improvement Program (CIP) for FY25/26 includes transportation projects funded from various sources. Two sources are the Measure D and SB 1 programs. Each requires that the city develop and approve an annual project list and expenditure plan. The projects included in these plans are part of the larger CIP which Council will be approving during the current budget process.

DISCUSSION:

MEASURE D
In 2016, Santa Cruz County voters approved Measure D, a one-half-cent sales tax that funds transportation projects for 30 years. The Measure allocates a portion of the funding to individual agencies with the city’s projected share for FY25/26 totaling $1,213,000. The City will spend these funds and others that have carried over from previous years. Requirements of the funding include the development of a five-year expenditure plan that is presented at a public hearing and approved by the City Council. The Plan is entitled “Measure D: 5-Year Program of Projects (FY25/26-29/30)” and is included with the resolution.

2 The Plan and Council Resolution of approval are to be submitted to the Santa Cruz County Regional Transportation Commission by December 30th of each year. Attached to this staff report is a map showing the projects receiving Measure D and SB 1 funding in FY25/26.

In FY25/26, the Plan proposes allocating Measure D to partially or completely fund the following projects:
 Improve bicycle and pedestrian safety through annual funding for activities and improvements that involve citywide bicycle facilities, maintenance and improvement of trails, and supporting pedestrian & traffic safety
 Citywide road restriping projects
 Provide Pavement Program Management services for 2025 Pavement Repair Project  Construct Pavement Repair Project
FY25/26 projects to receive Measure D funding that was allocated previously and carried over to this year include:
 Bridge St reconstruction from Blackburn St to Beck St  Freedom Blvd reconstruction and sidewalk infill between Green Valley Rd & Airport Blvd design  Green Valley Rd reconstruction from Freedom Blvd to City limits  Lake Ave lighting improvements from Rodriguez St to Union St/Brennan St design  Lee Rd Trail design, permitting and construction
 Safe Routes to Downtown Watsonville project that includes pedestrian and bicycle safety improvements within the downtown area and around eight schools design & permitting  Safer Access to Pajaro Valley High School & Beyond project (Highway 1/Harkins Slough Rd pedestrian bridge) design and construction
In future years, the Plan continues to provide funding for bicycle, pedestrians, and traffic safety, trail maintenance, road maintenance, repair, and striping.

SB 1
In 2017, Governor Brown signed SB 1, providing additional funding for road maintenance, rehabilitation, and safety projects. The funding is apportioned by formula to cities and counties. Watsonville’s projected annual share for FY25/26 is $ 1,403,164. The City will use these funds and others that have rolled over from previous years for projects to be constructed in this and future fiscal years.

To be eligible for SB 1 funding in FY25/26, the City must provide the California Transportation Commission (CTC) with a list of projects that have been approved by the City Council. The list is due to the CTC by July 1, 2025. The list is included with the resolution. Attached to the staff report is a map showing the location of the proposed SB 1 and Measure D funded projects.

In FY25/26, the city will allocate SB 1 funding for:
 2025 Road Maintenance Project

3 FY25/26 projects to receive SB1 funding that was allocated previously and carried over to this year include:
 Pennsylvania Dr Reconstruction Design
 Pennsylvania Drive Trail Repair Design
 Road Repair Construction
 Sidewalk Repair
 Road Restriping
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

This action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15378(b)(5), in that adopting a Resolution supporting a funding plan does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and if a “project,” is exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.

STRATEGIC PLAN:

The proposed expenditure plans are consistent with the following Strategic Plan Goals:

Infrastructure & Environment
Public Safety
FINANCIAL IMPACT:

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

ALTERNATIVE ACTION:

No reasonable alternatives are known currently.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

1. Watsonville Measure D & SB 1 FY25/26 Projects Map

Attachment 1

Green Valley Rd
Reconstruction (D)
Safer Access to Pajaro Valley
High School & Beyond (D) Lee Rd Trail Phase I (D) Safe Routes to Downtown Watsonville Design (D) Bridge St Reconstruction (D) Watsonville Measure D & SB1 FY25/26 Projects Map
Citywide Projects
2025 Road Maintenance/Pavement Repair (D/SB1)
Bicycle Facilities (D)
Maintain & Improve Trails (D)
Pedestrian & Traffic Safety (D)
Pavement Program Manager (D)
Road Repair (SB1)
Road Restriping (D/SB1)
Sidewalk Repair (SB1)
Lake Ave Lighting
Improvements (D)
Pennsylvania Dr
Trail Repair Design (SB1)
Pennsylvania Dr
Reconstruction Design (SB1)
Freedom Blvd
Improvements Design (D)

Reso No. ______ (CM)
Meeting Date: 061025 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE APPROVING THE 2025 MEASURE D 5-YEAR
PROGRAM OF PROJECTS (FY 25/26 - FY 29/30) FOR THE CITY OF

WATSONVILLE FUNDED BY MEASURE D APPROVED BY VOTERS ON
NOVEMBER 8, 2016
WHEREAS, Santa Cruz County voters approved a one-half cent sales tax (Measure D) on November 8, 2016, to fund transportation projects for the next 30 years; and
WHEREAS, Watsonville City Council adopted Resolution No. 76-17 (CM), approving a Measure D Master Funding Agreement between the Santa Cruz Regional Transportation Commission and the City of Watsonville for receipt of Measure D funding for City transportation projects; and
WHEREAS, Watsonville City Council adopted Resolution No. 125-22 (CM), approving a first amendment to the Master Funding Agreement and extending the term an additional 25 years to 2047; and
WHEREAS, said Master Funding Agreement states that for the City to receive its annual allocation of funding for “Neighborhood Projects”, the Watsonville City Council shall first approve a 5-Year Program of Projects following public comment; and WHEREAS, the City of Watsonville’s projected annual allocations Measure D Neighborhood Projects funds for FY25/26 is $1,213,000.

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

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

Reso No. ______ (CM)
Meeting Date: 061025
2 adopting a Resolution supporting a funding plan does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and if a “project,” is exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment .

2. That the City Council hereby approves the 2025 Measure D 5-Year Program of Projects (FY25/26 – FY29/30) for the City of Watsonville attached hereto and incorporated herein as Exhibit “A.”
*************************************

Measure D: 5-Year Program of Projects (FY25/26-FY29/30) Agency: City of Watsonville
Expenditure Plan Category: Neighborhood Projects
Approval Date: Tuesday, June 10, 2025
Public Hearing Date: Tuesday, June 10, 2025 Prior FY25/26 FY26/27 FY27/28 FY28/29 FY29/30 Estimated Annual Measure D Allocations $8,530,342 $1,213,000 $1,251,000 $1,299,000 $1,349,000 $1,395,000 5-Year Program of Projects FY25/26-FY29/30
Project Name/location
City
Project
Number
Description (include project purpose and complete streets components if applicable)
Total
Measure D
Prior Years
Spent &
Allocation
FY25/26 FY26/27 FY27/28 FY28/29 FY29/30 Total cost
estimate Other fund sources
Est.

Construction
start date
Major
project? *
(yes/no)
Citywide Bicycle Facilities (Various
Locations) 14320
Provide signage and traffic markings along bicycle corridors and provide educational programs. $916,473 $466,473 $50,000 $100,000 $100,000 $100,000 $100,000 Annual None Annual No Maintain & Improve Trails (Various
locations) 14321
Develop, maintain and enhance existing pedestrian and bicycle trails $1,016,297 $616,297 $0 $100,000 $100,000 $100,000 $100,000 Annual None Annual No Pedestrian & Traffic Safety (Various
Locations)
14322
Install or upgrade safety and traffic calming measures such as striping, markers, signage, signals, lighting, flashing beacons, curb extensions and speed humps and provide educational programs. $2,346,488 $1,096,488 $250,000 $250,000 $250,000 $250,000 $250,000 Annual None Annual No Lee Rd Trail
14522
Design & permitting for bicycle & pedestrian trail on Harkins Slough Rd & Lee Rd $672,131 $672,131 $0 $0 $0 $0 $0 $ 1,002,131
Coastal Conservancy -
$330,000
FY24/25
(carryover) No
Green Valley Rd Reconstruction from
Freedom Blvd to City Limits
14523
Reconstruct roadway, install median island, remove and replace noncompliant driveways & curb ramps, restripe roadway & provide bike lanes where none exist.
$1,050,000 $1,050,000 $0 $0 $0 $0 $0 $ 4,712,123
RSTPX - $1,833,000
Measure R - $700,000
Gas Tax - $47,810
SB1 - $1,081,313
FY24/25
(carryover) Yes
Lake Ave Sidewalk improvements from
Rodriguez St to Union St/Brennan St
14731
Prepare design for repair/replace damaged sidewalk. Done in conjunction with PG&E Utility Undergrounding project.
$160,600 $160,600 $0 $0 $0 $0 $0 $ 337,491
Impact Fees - $127,946
UG Utilities Fee -
$48,945
FY26/27
(carryover) No
Bridge St Reconstruction from Blackburn St
to Beck St
14816
Repair and resurface damaged roadway, replace damaged sidewalks, restripe roadway. Includes design, environmental documentation and construction. $250,000 $250,000 $0 $0 $0 $0 $0 $ 1,180,000 Measure R - $930,000 FY24/25
(carryover) Yes
Safer Access to Pajaro Valley High School &
Beyond (Highway 1/Harkins Slough Rd
Pedestrian Bridge & Safe Routes to School
project)
14859
Construct pedestrian bridge over SR 1, install sidewalk and reconfigure bike lanes on Harkins Slough Rd. Modify Harkins Slough Rd/Green Valley Rd/Silver Leaf Dr intersection to improve bicycle and pedestrian access. At Pajaro Valley High School and at feeder schools and various locations within the high school attendance area install high visibility crosswalks, curb extensions, upgrade curb ramps and improve bicycle facilities and provide pedestrian and bicycle safety training.
$300,000 $300,000 $0 $0 $0 $0 $0 15,529,000
ATP - $11,700,000
Developer Fees -
$2,629,000
STIP - $900,000
FY24/25
(carryover) Yes
Lee Rd Trail Phase 1 from Pajaro Valley
High School driveway to Land Trust
driveway 14860
Construct sidewalk and bikelanes on Harkins Slough Rd and pedestrian and bicycle path on Lee Rd.
$672,850 $672,850 $0 $0 $0 $0 $0 $2,372,850
Federal Earmark -
$1,000,000
Land Trust $700,000 FY24/25 Yes
Citywide Restriping 15081 Restripe roadways at various locations within City $1,375,000 $125,000 $250,000 $250,000 $250,000 $250,000 $250,000 $ 1,725,000 SB1 - $350,000 Complete No Pavement Program Manager 15195 Provide project management services for pavement projects $1,275,000 $425,000 $425,000 $425,000 $0 $0 $0 $ 4,275,000 None FY24/25 No Freedom Blvd Improvements: Green Valley
Rd to Airport Blvd 15209
Reconstruction, infill sidewalk on east side, restripe roadway. Includes design & environmental documents. $433,891 $433,891 $0 $0 $0 $0 $0 $ 433,891 None FY24/25
(carryover) No
Pavement Repair Projects TBD Pavement Repair Projects at Various Locations $2,270,000 $0 $775,000 $55,000 $480,000 $480,000 $480,000 $ 5,270,000 None FY24/25 No Adminstrative Costs NA Cost of annaul audit. $56,620 $31,620 $5,000 $5,000 $5,000 $5,000 $5,000 Annual None Annual No Estimated Annual Measure D Expenditures $7,911,839 $1,755,000 $1,185,000 $1,185,000 $1,185,000 $1,185,000 Annual Interest Earnings on Measure D Revenues 393,415 $586 $1,176 $1,176 $1,344 $1,632 Carry over to next fiscal year $ 1,011,918 $ 470,504 $537,680 $652,856 $818,201 $1,029,833 Exhibit A

Reso No. ______ (CM)
Meeting Date: 061025 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE APPROVING THE CITY OF WATSONVILLE – SB1
PROJECT LIST FY 25/26 TO BE FUNDED BY SENATE BILL 1 FUNDS WHEREAS, Senate Bill 1 (SB1) also known as the Road Repair and Accountability Act of 2017, was signed into law on April 28, 2017; and WHEREAS, SB1 provides funding for road maintenance, rehabilitation, and safety projects which is split between the state, cities and counties; and WHEREAS, eligibility for SB1 funding includes City Council approval of list of possible transportation projects provided to the California Transportation Commission (CTC) before July 1, 2025; and
WHEREAS, the State estimates annual funding available to the City of Watsonville through SB1 to be approximately $1,403,164 for FY25/26.

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

1. This action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15378(b)(5), in that adopting a Resolution supporting a funding plan does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and if a “project,” is exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.

Reso No. ______ (CM)
Meeting Date: 061025
2 2. That the City Council hereby approves the 2025 City of Watsonville – SB1 Project List FY25/26 for the City of Watsonville which is attached hereto and incorporated herein as Exhibit “A.”
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City of Watsonville - SB1 Project List
FY25/26
Name/Road/
Limits
Description SB1 Share
of Project
Cost
Status Complete Useful
Life
Pennsylvania
Drive
Reconstruction
Design of roadway repair between
Winding Way and Clifford St 68,134 In Progress FY25/26 10 Yr Pennsylvania Drive
Trail Repair
Design of trail repair between
Winding Way and Clifford St 78,668 In Progress FY25/26 10 Yr Road Repair Pavement repair and restriping at
varioius locations within the city
including Ohlone Parkway
319,915 Carry Over FY25/26 1-5 Yr
2025 Road
Maintenance
Pavement maintenance and
restriping at Ford St from Rodriguez
St to Walker St, Freedom Blvd from
Alta Vista St to Broadis St, Green
Valley Rd from Main St to Pennsylania
Dr, Harkins Slough Rd from Green
Valley Rd to Struve Slough Bridge,
Kilburn St from Ford St to West 5th
St, Loma Prieta Ave from Airport Blvd
to Green
Valley Rd
3,725,000 New FY25/26 1-5 Yr
Sidewalk Repair Repair and/or replace existing
sidewalks on Union St, Maple St,
within the Vista Montana Subdivision
and other locations within the city
146,628 Carry Over FY25/26 20 Yr
Road Restriping Restripe existing roadway on Airport
Blvd, Marin St, Tuttle Ave, Westgate
Dr, at the Watsonville Airport and
other locations within the city
108,029 Carry Over FY25/26 1-5 Yr
Exhibit A

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

CIP & Transportation Funding
FY25/26 allotment:
• Measure D - $1,213,000
• SB 1 - $1,403,164
Transportation funding in proposed CIP includes:
• Measure D
• SB 1

Design - Bicycle & Pedestrian
Lake Ave Sidewalks
& Street Lighting
Carryover
Safe Routes to Downtown
Watsonville
Carryover
Pennsylvania Dr Trail Repair from
Clifford St to Winding Way
Carryover

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

Design - Roads
PMP Yr 1 – Pavement
Program Manager
Carry over + $425,000
Freedom Blvd Reconstruction &
Sidewalks from Green Valley Rd
to Airport Blvd
Carryover

Construction - Bicycle & Pedestrian
Pedestrian & Traffic Safety
Design, Construction
Carryover + $250,000
Citywide Bicycle Facilities
Programs, Design, Construction
Carryover + $50,000
Maintain & Improve Trails
Design, Construction
Carryover
Sidewalk Repair
Carryover

Construction - Bicycle & Pedestrian
Phase 1 Limits
Lee Rd Trail Phase I
Design, Permitting,
Construction
Carryover Safer Access to Pajaro Valley
High School and Beyond
Carryover

Green Valley Reconstruction from
Freedom Blvd to City Limits
Carryover
Construction
- Roads

Construction - Roads
Citywide Restriping
Design, Construction
Carryover + $250,000
PMP Yr 1 –
Pavement Repair
Projects
$775,000
2025 Road
Maintenance
$3,725,000
Road Repair
Carryover

RECOMMENDATION
Approve Measure D & SB 1 project lists

Construction - Roads