Agenda packet — Watsonville City Council, August 26, 2025 (part 2 of 8)

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SSA LANDSCAPE ARCHITECTS, INC. FOR THE REVITALIZATION OF THE

WATSONVILLE CITY PLAZA PROJECT, ADDING TO THE SCOPE OF SERVICES, INCREASING THE CONTRACT COMPENSATION AMOUNT BY $121,154.00, FOR A TOTAL CONTRACT AMOUNT NOT TO EXCEED $714,916.00; EXTENDING THE CONTRACT TERM FROM JUNE 30, 2026 TO JUNE 30, 2027, AND AUTHORIZING

CITY MANAGER TO EXECUTE SAME

9.l. RESOLUTION NO. 190-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

APPROVING FIRST AMENDMENT TO CONTRACT BETWEEN THE CITY OF WATSONVILLE AND CAROLLO ENGINEERS, INC., A CORPORATION, FOR

CONTINUED PRELIMINARY DESIGN SERVICES ON THE HEXAVALENT CHROMIUM TREAMENT REPORT, ADDING AN AMOUNT NOT TO EXCEED $123,562, FOR A REVISED CONTRACT TOTAL AMOUNT OF $870,120 TO BE FUNDED BY THE WATER ENTERPRISE FUND; AND AUTHORIZING AND DIRECTING THE CITY

MANAGER TO EXECUTE SAME

9.m. RESOLUTION NO. 191-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE APPROVING INDEPENDENT CONTRACTOR AGREEMENT FOR NONCONSTRUCTION SERVICES BETWEEN THE CITY OF WATSONVILLE AND THE

PAJARO VALLEY UNIFIED SCHOOL DISTRICT, TO PROVIDE AFTERSCHOOL AND INTERSESSION PROGRAMING THROUGH THE DISTRICT’S EXPANDED LEARNING OPPORTUNITIES PROGRAM FOR FISCAL YEAR 2025-2026, IN AN AMOUNT NOT TO EXCEED $547,000; AND AUTHORIZING AND DIRECTING THE CITY MANAGER TO

EXECUTE SAME

9.n. RESOLUTION NO. 192-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

AWARDING CONTRACT FOR CONSULTANT SERVICES TO UNIFIED CLEANING SERVICES, INC., A CORPORATION, FOR JANITORIAL SERVICES AT CITY RECREATION FACILITIES, IN AN AMOUNT NOT TO EXCEED $321,000.00 FROM FY 25/26 THROUGH FY 26/27 WITH THE OPTION TO RENEW FOR TWO ADDITIONAL ONE-YEAR TERMS; AND AUTHORIZING AND DIRECTING THE CITY MANAGER TO

EXECUTE SAME

9.o. RESOLUTION NO. 193-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

AWARDING PROFESSIONAL SERVICES CONTRACT TO DORR DISTRIBUTION SYSTEMS, INC., A CORPORATION, FOR TRANSPORTATION SERVICES FOR RECREATIONAL PROGRAMMING, IN AN AMOUNT NOT TO EXCEED $120,000.00 FOR FY 25-26 AND FY 26-27; AND AUTHORIZING AND DIRECTING THE CITY

MANAGER TO EXECUTE SAME

9.p. RESOLUTION NO. 194-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE AUTHORIZING THE PURCHASE OF TWO (2) NEW 2025 FORD POLICE

INTERCEPTOR SPORT UTILITY VEHICLES, IN AN AMOUNT NOT TO EXCEED $117,000.00 (FUNDED FROM THE GENERAL FUND)

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9.q. RESOLUTION NO. 195-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

AMENDING THE SCHEDULE OF FEES FOR CERTAIN TOW-RELATED CHARGES TO ALIGN WITH THE CALIFORNIA HIGHWAY PATROL – SANTA CRUZ AREA’S HOURLY TOW RATES FY-2025-2026

9.r. ACCEPT CALIFORNIA OFFICE OF TRAFFIC SAFETY GRANTS FOR FY 2026 1) RESOLUTION NO. 196-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE ACCEPTING $243,336 IN GRANT FUNDS FROM THE CALIFORNIA OFFICE OF TRAFFIC SAFETY FOR FY 2026: $115,000 FOR THE SELECTIVE TRAFFIC ENFORCEMENT PROGRAM (STEP) AND $128,336 FOR THE PEDESTRIAN AND

BICYCLE SAFETY PROGRAM, TO USE FOR THE IMPLEMENTATION OF TRAFFIC SAFETY STRATEGIES; AUTHORIZING THE CITY MANAGER OR HER DESIGNEE TO EXECUTE A STANDARD AGREEMENT AND ANY AMENDMENTS THERETO; AND ANY NECESSARY DOCUMENTS; AND DIRECTING THAT SUCH FUNDS BE APPROPRIATED INTO THE SPECIAL GRANTS FUND (0260)
2) RESOLUTION NO. 197-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

APPROVING A CONTRACT WITH ECOLOGY ACTION OF SANTA CRUZ, A

CORPORATION, TO SUPPORT THE IMPLEMENTATION OF BEST PRACTICE STRATEGIES FOR THE PERIOD OF OCTOBER 1, 2025,THROUGH SEPTEMBER 30, 2026, AND APPROPRIATING $120,336, FROM THE PEDESTRIAN AND BICYCLE SAFETY PROGRAM; AND AUTHORIZING AND DIRECTING THE CITY

MANAGER TO EXECUTE THE SAME

9.s. RESOLUTION NO. 198-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE ACCEPTING $197,073.16 IN GRANT FUNDS FROM THE CALIFORNIA HIGHWAY PATROL CANNABIS TAX FUND GRANT PROGRAM FOR FY2025-2026; TO USE FOR IMPAIRED DRIVING SATURATION PATROLS AND DUI CHECKPOINTS; AND

AUTHORIZING THE CITY MANAGER OR HER DESIGNEE TO EXECUTE A STANDARD AGREEMENT AND ANY AMENDMENTS THERETO; AND ANY
NECESSARY DOCUMENTS; AND DIRECTING THAT SUCH FUNDS BE
APPROPRIATED INTO THE SPECIAL GRANTS FUND (0260)

9.t. RESOLUTION NO. 199-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE ACCEPTING THE $162,450 GRANT FROM THE DEPARTMENT OF

TRANSPORTATION, FEDERAL AVIATION ADMINISTRATION (FAA) REPRESENTING

ENGINEERING DESIGN OF THE RECONSTRUCTION OF THE PERMANENT TIEDOWN APRON (AREA 7), AT THE WATSONVILLE MUNICIPAL AIRPORT; AND

AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE GRANT

AGREEMENT FOR PROJECT AND ANY AND ALL NECESSARY DOCUMENTS AND ANY AMENDMENTS THERETO; AND APPROPRIATING SUCH FUNDS TO THE

AIRPORT ENTERPRISE FUND

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9.u. RESOLUTION NO. 200-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE ACCEPTING THE $120,888 GRANT FROM THE DEPARTMENT OF

TRANSPORTATION, FEDERAL AVIATION ADMINISTRATION (FAA) FOR THE

AIRPORT INFRASTRUCTURE GRANT (AIG) REIMBURSEMENT WASH RACK,

REPRESENTING REIMBURSEMENT FOR DESIGN, ENGINEERING DURING

CONSTRUCTION, ELECTRICAL ITEMS FOR CONSTRUCTION, AT THE WATSONVILLE MUNICIPAL AIRPORT; AND AUTHORIZING AND DIRECTING THE

CITY MANAGER TO EXECUTE GRANT AGREEMENT FOR PROJECT AND ANY AND ALL NECESSARY DOCUMENTS AND ANY AMENDMENTS THERETO; AND

APPROPRIATING SUCH FUNDS TO THE AIRPORT ENTERPRISE FUND

9.v. RESOLUTION NO. 201-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

AUTHORIZING AND DIRECTING THE CITY MANAGER, ON BEHALF OF THE CITY OF

WATSONVILLE, TO SUBMIT AN APPLICATION FOR AN AIRPORT IMPROVEMENT

PROGRAM (AIP) STATE MATCHING GRANT FROM THE CALIFORNIA DEPARTMENT

OF TRANSPORTATION (CALTRANS) FOR THE FEDERAL AVIATION

ADMINISTRATION (FAA) AIRPORT IMPROVEMENT PROGRAM GRANT (AIP) FOR

THE ENGINEERING DESIGN OF THE RECONSTRUCT PERMANENT TIEDOWN APRON (AREA 7) PROJECT IN THE AMOUNT OF $8,123 AND IF AWARDED, TO

EXECUTE A STANDARD AGREEMENT AND ANY AMENDMENTS THERETO AND NECESSARY DOCUMENTS; AND APPROPRIATING SUCH FUNDS TO THE AIRPORT

ENTERPRISE GRANT FUND

9.w. RESOLUTION NO. 202-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

AUTHORIZING AND DIRECTING THE CITY MANAGER ON BEHALF OF THE CITY OF

WATSONVILLE TO ACCEPT THE CALIFORNIA DEPARTMENT OF ALCOHOL BEVERAGE CONTROL (ABC), FY 25/26 ALCOHOL POLICING PARTNERSHIP (APP) PROGRAM GRANT, IN THE AMOUNT OF $67,350, TO REDUCE CRIME AND PUBLIC

NUISANCE PROBLEMS ASSOCIATED WITH ALCOHOL BEVERAGE OUTLETS, TO

EXECUTE A STANDARD AGREEMENT AND ANY AMENDMENTS THERETO AND ANY NECESSARY DOCUMENTS; AND APPROPRIATING SUCH FUNDS TO THE SPECIAL GRANTS FUND (0260)

9.x. MODIFY TWO OUTSTANDING LOANS PROVIDED TO EDEN HOUSING FOR THE

PRESERVATION OF AFFORDABLE HOUSING AT PAJARO COURT & TIERRA LINDA

APARTMENTS
1) RESOLUTION NO. 4-25 (SHA)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE IN ITS

CAPACITY AS THE SUCCESSOR TO THE HOUSING ASSETS AND FUNCTIONS

OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF WATSONVILLE AUTHORIZING MODIFICATIONS TO AN OUTSTANDING LOAN TO PÁJARO VALLEY HOUSING CORPORATION AND ASSUMED BY EDEN HOUSING INC., FOR THE PAJARO COURT APARTMENTS; EXTENDING THE LOAN TERM TO MATCH THE HCD LOAN TERM OF 55 YEARS; SUBORDINATING THE LOAN, AND

AUTHORIZING AND DIRECTING THE CITY MANAGER TO NEGOTIATE AND

EXECUTE ANY DOCUMENTS NECESSARY TO IMPLEMENT THE LOAN

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MODIFICATION AND SUBORDINATION SUBJECT TO LEGAL APPROVAL 2) RESOLUTION NO. 5-25 (SHA)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE IN ITS

CAPACITY AS THE SUCCESSOR TO THE HOUSING ASSETS AND FUNCTIONS

OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF WATSONVILLE AUTHORIZING MODIFICATIONS TO AN OUTSTANDING LOAN TO PÁJARO VALLEY HOUSING CORPORATION AND ASSUMED BY EDEN HOUSING INC., FOR THE TIERRA LINDA APARTMENTS; EXTENDING THE LOAN TERM TO MATCH THE HCD LOAN TERM OF 55 YEARS; SUBORDINATING THE LOAN, AND

AUTHORIZING AND DIRECTING THE CITY MANAGER TO NEGOTIATE AND

EXECUTE ANY DOCUMENTS NECESSARY TO IMPLEMENT THE LOAN

MODIFICATIONS SUBJECT TO LEGAL APPROVAL

9.y. RESOLUTION NO. 203-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

RATIFYING A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND THE CONFIDENTIAL UNIT FOR FISCAL YEARS 2025-2028

9.z. RESOLUTION NO. 204-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

RATIFYING A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND THE MANAGEMENT UNIT FOR FISCAL YEARS 2025-2028

9.aa. RESOLUTION NO. 205-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

RATIFYING A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF WATSONVILLE AND UNITED PUBLIC EMPLOYEES OF CALIFORNIA, LOCAL 792 (UPEC/LIUNA) FOR FISCAL YEARS 2025-2028

9.ab. RESOLUTION NO. 206-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

RATIFYING A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND OPERATING ENGINEERS LOCAL UNION NO. 3 (OE3) FOR FISCAL YEARS 2025- 2028

9.ac. RESOLUTION NO. 207-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

RATIFYING A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND THE POLICE OFFICERS ASSOCIATION FOR FISCAL YEARS 2025-2028

9.ad. RESOLUTION NO. 208-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

RATIFYING A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND THE POLICE MANAGEMENT UNIT FOR FISCAL YEARS 2025-2028

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9.ae. RESOLUTION NO. 209-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

APPROVING THE CITY OF WATSONVILLE COMPENSATION AND BENEFITS PLAN

FOR ASSISTANT CITY MANAGER, DEPARTMENT DIRECTORS, DEPUTY CITY

MANAGER, CHIEFS OF POLICE AND FIRE (EXECUTIVE TEAM) FOR FISCAL YEARS 2025-2028

9.af. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

APPOINTING GEORGIA LYNN ACOSTA TO THE CITY OF WATSONVILLE PLANNING COMMISSION – Removed per Member Quiroz-Carter’s request.

9.ag. RESOLUTION NO. 210-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE DENYING

APPLICATION FOR LEAVE TO PRESENT LATE CLAIM OF ROTARY CLUB OF FREEDOM 505 SCOUT FAMILY FOR DAMAGES

9.ah. ORDINANCES AMENDING TITLE 5, CHAPTER 12 & TITLE 10 OF THE WATSONVILLE

MUNICIPAL CODE
1) ORDINANCE NO. 1477-25 (CM)
AN ORDINANCE OF THE CITY OF WATSONVILLE AMENDING TITLE 5, CHAPTER 12 OF THE WATSONVILLE MUNICIPAL CODE RELATING TO PARADES 2) ORDINANCE NO. 1478-25 (CM)
AN ORDINANCE OF THE CITY OF WATSONVILLE AMENDING TITLE 10

RELATING TO PUBLIC PARKS, PUBLIC FACILITIES, AND PARKING FACILITIES,

OF THE WATSONVILLE MUNICIPAL CODE

10. ITEMS REMOVED FROM CONSENT AGENDA
Member Quiroz-Carter expressed concerns with the person recommended for appointment to the Planning Commission.

Member Parker spoke about the reasons she nominated Georgia Acosta to serve on the Planning Commission and her qualifications.

Public Input – None
Mayor Pro Tempore Salcido requested the item be moved to a September meeting so that the entire Council could be present to vote.

Member Dutra agreed with Mayor Pro Tempore Salcido’s request.

Member Parker disagreed with the request to move the item to a future meeting. She spoke about her efforts to fill the vacancy and stated commissioners had previously been appointed without the entire Council being present.

Member Quiroz-Carter further expressed concerns with the person nominated to serve on the Planning Commission and stated she would agree to moving the item to a September meeting.

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Member Parker reiterated her concerns with moving the item to a future meeting.

MOTION: It was moved by Member Parker, seconded by Member Clark, and failed by the following vote to approve Item 9.af. listed below.

AYES: MEMBERS: Clark, Parker
NOES: MEMBERS: Dutra, Montesino, Quiroz-Carter, Salcido ABSENT: MEMBERS: Orozco

9.af. RESOLUTION NO. 211-25 (CM) (FAILED)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

APPOINTING GEORGIA LYNN ACOSTA TO THE CITY OF WATSONVILLE PLANNING

COMMISSION

11. REPORTS TO COUNCIL – No Action Required

11.a. CITY MANAGER’S UPDATE REPORT
In answering Member Montesino, City Manager Vides spoke about advocacy and efforts by Public Works & Utilities staff and the City’s lobbyists to secure Federal funding for necessary projects.

12. PUBLIC HEARINGS, ORDINANCES, & APPEALS

12.a. COMMUNITY DEVELOPMENT BLOCK GRANT CONSOLIDATED PLAN FOR FISCAL YEARS 2025-2029 & ANNUAL 2025-2026 ACTION PLAN
1) Staff Report by Housing Manager Landaverry
2) City Council Clarifying & Technical Questions
In answering Member Quiroz-Cater, Housing Manager Landaverry provided additional details on the City’s Rehabilitation Program for homes. 3) Public Comments
? male, spoke about the funds dedicated to the Rehabilitation Program and Small Business Assistance Program and stated the total funding for both matched the amount spent on administration. He expressed concerns with high administrative costs across the country.
4) MOTION: It was moved by Member Dutra, seconded by Member Quiroz-Carter and carried by the following vote to approve the resolution listed under Item 12.a.6. below.

AYES: MEMBERS: Dutra, Montesino, Quiroz-Carter, Salcido NOES: MEMBERS: Clark
ABSENT: MEMBERS: Parker, Orozco
5) City Council Deliberation on Motion – None
6) RESOLUTION NO. 212-25 (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

APPROVING THE FIVE-YEAR COMMUNITY DEVELOPMENT BLOCK GRANT

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(“CDBG”) CONSOLIDATED PLAN FOR JULY 1, 2025, THROUGH JUNE 30, 2030, WHICH INCLUDES THE 2025-2026 ANNUAL ACTION PLAN AND AUTHORIZING

THE CITY MANAGER TO SUBMIT SAME TO THE UNITED STATES

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, INCLUDING ANY

AMENDMENTS THERETO, AND ALL REQUIRED DOCUMENTS

12.b. CONSIDERATION OF INCREASE OF COUNCIL MEMBER COMPENSATION 1) Oral Report by Administrative Services Director Duran 2) City Council Clarifying & Technical Questions
In answering Mayor Pro Tempore Salcido, Administrative Services Director Duran provided details regarding State regulations on Council member compensation. 3) Public Comments – None
4) MOTION: It was moved by Member Dutra seconded by Member Montesino and carried by the following vote to introduce the ordinance listed under Item 12.b.6. below.

AYES: MEMBERS: Dutra, Montesino, Quiroz-Carter, Salcido NOES: MEMBERS: Clark
ABSENT: MEMBERS: Parker, Orozco
5) City Council Deliberation on Motion – None
6) By Motion, Introduce for First Reading, by Title Only, Waiving the Full Reading of the Text, an Uncodified Ordinance of the City of Watsonville Increasing the Compensation for Each Member of the City Council, & the Mayor, Per Month, as Permitted by California Government Code Section 36516

13. EMERGENCY ITEMS ADDED TO AGENDA – None

14. REQUESTS & SCHEDULING FUTURE AGENDA ITEMS

15. ADJOURNMENT
The meeting was adjourned at 7:10 p.m.
______________________________
Kristal Salcido, Mayor Pro Tempore
ATTEST:
_______________________________
Alejandra Pacheco, Deputy City Clerk

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
RECOMMENDED BY: ADMINISTRATIVE SERVICES DIRECTOR DURAN
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: JULY 2024 THROUGH SEPTEMBER 2024 INVESTMENT REPORT RECOMMENDATION:

The City Council is asked to accept the quarterly Investment Report.

BACKGROUND:

It is recommended that Council accept the Investment Report for the period of July 2024 through September 2024 by motion.

DISCUSSION:

The City’s idle funds are invested to earn a competitive yield and to accommodate the City’s need for liquidity. Investments of idle funds are only made in investment types/instruments approved by the Council. Every year in January, the Council re-adopts the City’s Investment Policy. As shown on Table 1 below, the City’s Investment Portfolio in September 2024 was 130.4 million dollars. Our current holdings include: City Investments, LAIF and CAMP.

The City has used LAIF (Local Agency Investment Fund) as a primary benchmark for the last several years.

LAIF is a good benchmark for the city as the average days to maturity of its investments are similar to the City’s investment maturity.

Six years ago, the City added a new Investment Instrument to its Portfolio: the California Asset Management Program. This Program has been around since 1989 and has been serving the investment needs of public agencies. CAMP is a pool, which is a short-term cash reserve portfolio and cash management vehicle. The investment is AAA rated by Standard & Poor’s. They offer same-day liquidity, competitive yield, and monthly interest payments and zero out pocket expenses. The City’s current investment in CAMP is in the amount of 107.4 million dollars.

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2 PORTFOLIO RESULTS:

The results from the last several months are shown below on Table 1.

Table I
July Aug Sep
Cash Invested ($MM) 132.4 132.9 130.4
City’s Average Yield 5.26% 5.26% 5.17%
LAIF Yield 4.52% 4.58% 4.58%
LAIF Cash Invested ($MM) 25.9 25.9 22.9
THE ECONOMY:

The Federal Reserve (The Fed) at its most recent Federal Open Market Committee (FOMC) meeting in September, enacted its first interest rate cut since the early days of the COVID pandemic. The decision to lower the federal funds rate by half percentage point, or 50 basis points, came as the Committee gained greater confidence that inflation is moving sustainably toward its 2% target and considers that the risks of achieving its employment and inflation goals are roughly in balance.

The latest Summary of Economic Projections shows Policymakers expect further rate cuts leading into the end of the year. Projections indicate a full percentage point by the end of 2025 and half percentage point by 2026. The Committee remains committed to carefully assessing incoming data, the evolving outlook, and the balance of risks.

In the third quarter of 2024 (July, August, September), the U.S. economy (real gross domestic product) expanded at an annualized rate of 2.8%, according to the advance estimate released by the U.S. Bureau of Economic Analysis. Inflation pressures continued to ease, with the Personal Consumption Expenditures (PCE) price index rising 1.5% for the quarter and core PCE (excluding food and energy) up 2.1%. For monthly perspective, the Consumer Price Index showed year-over-year increases of 2.9% in July, 2.5% in August, and 2.4% in September. The labor market remained relatively strong, though it showed mild softening. The unemployment rate averaged 4.2% for the quarter, with monthly readings of 4.3% in July,

4.2% in August, and 4.1% in September, according to the Bureau of Labor Statistics. These trends aligned with the Fed’s September meeting observation that inflation was moving closer to its 2% goal, while economic growth and labor conditions remained relatively solid.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

The preparation and submittal of the investment report is not subject to CEQA, as the action is not a project as defined in Section 15378(b)(2) of the Public Resources Code, and therefore no further review is required.

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3 STRATEGIC PLAN:

The investment report addresses the following Strategic Plan:

Fiscal Health
FINANCIAL IMPACT:

Changes in the Fed’s rates directly impact on the interest cities earn in short-term investments, with higher interest rates boosting earnings from funds like LAIF and CAMP while also influencing inflation pressures and the overall economic activity. The decision to lower the federal funds rate will keep interest rates low. This will most likely cause lower interest earnings to yield in the 2025 calendar year.

ALTERNATIVE ACTION:

No reasonable alternatives are known currently.

ATTACHMENTS AND/OR REFERENCES (IF ANY):
1) July through September 2024 Investment Report Q1

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City of Watsonville
Investment Reports
Jul-24
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 5.26%
Average Maturity (Days) 0.2
Comparative Yields:

LAIF 4.52%
One Year Agency Note 4.73%
Six Month -Treasury Bills 5.14%
Attachment 1

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City of Watsonville
Investment Position Report
31-Jul-24 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 31-Jul-24 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 31-Jul-24 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) 0.00%
Average Duration -
100.0%
Pooled Investment
LAIF N/A 4.52% Demand 25,984,050 25,984,050 25,838,524 25,838,524 Various CAMP N/A 5.43% Demand 106,475,788 106,475,788 106,475,788 106,475,788 Various 132,459,839 132,459,839 132,314,313 132,314,313
132,459,839 132,459,839 132,314,313 132,314,313
Totals 5.26%
Average Maturity (Days/Years) 0.2 Activity Report
31-Jul-24 Days -22.8

Source:

Attachment 1

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City of Watsonville
Investment Reports
Aug-24
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 5.26%
Average Maturity (Days) 0.2
Comparative Yields:

LAIF 4.58%
One Year Agency Note 4.38%
Six Month -Treasury Bills 4.89%
Attachment 1

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City of Watsonville
Investment Position Report
31-Aug-24 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 31-Aug-24 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 31-Aug-24 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) 0.00%
Average Duration -
100.0%
Pooled Investment
LAIF N/A 4.58% Demand 25,984,050 25,984,050 25,838,524 25,838,524 Various CAMP N/A 5.41% Demand 106,964,115 106,964,115 106,964,115 106,964,115 Various 132,948,165 132,948,165 132,802,639 132,802,639
132,948,165 132,948,165 132,802,639 132,802,639
Totals 5.26%
Average Maturity (Days/Years) 0.2 Activity Report
31-Aug-24 Days -22.8

Source:

Attachment 1

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City of Watsonville
Investment Reports
Sep-24
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 5.17%
Average Maturity (Days) 0.2
Comparative Yields:

LAIF 4.58%
One Year Agency Note 3.98%
Six Month -Treasury Bills 4.38%
Attachment 1

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City of Watsonville
Investment Position Report
30-Sep-24 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 30-Sep-24 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 30-Sep-24 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) 0.00%
Average Duration -
100.0%
Pooled Investment
LAIF N/A 4.58% Demand 22,984,050 22,984,050 22,838,524 22,838,524 Various CAMP N/A 5.29% Demand 107,427,767 107,427,767 107,427,767 107,427,767 Various 130,411,818 130,411,818 130,266,292 130,266,292
130,411,818 130,411,818 130,266,292 130,266,292
Totals 5.17%
Average Maturity (Days/Years) 0.2 Activity Report
30-Sep-24 Days -22.8

Source:

Attachment 1

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
RECOMMENDED BY: ADMINISTRATIVE SERVICES DIRECTOR DURAN
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: MOTION TO ACCEPT OCTOBER 2024 THROUGH DECEMBER 2024

INVESTMENT REPORT
RECOMMENDATION:

The City Council is asked to accept the quarterly Investment Report.

BACKGROUND:

It is recommended that Council accept the Investment Report for the period of October 2024 through December 2024 by motion.

DISCUSSION:

The City’s idle funds are invested to earn a competitive yield and to accommodate the City’s need for liquidity. Investments of idle funds are only made in investment types/instruments approved by the Council. Every year in January, the Council re-adopts the City’s Investment Policy. As shown on Table 1 below, the City’s Investment Portfolio in December 2024 was 123.5 million dollars. Our current holdings include: City Investments, LAIF and CAMP.

The City has used LAIF (Local Agency Investment Fund) as a primary benchmark for the last several years. LAIF is a good benchmark for the City as the average days to maturity of its investments are similar to the City’s investment maturity.

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2 competitive yield, and monthly interest payments and zero out pocket expenses. The City’s current investment in CAMP is in the amount of 108.8 million dollars.

PORTFOLIO RESULTS:

The results from the last several months are shown below on Table 1.

Table I
Oct Nov Dec
Cash Invested ($MM) 126.7 127.1 123.5
City’s Average Yield 4.96% 4.82% 4.70%
LAIF Yield 4.52% 4.48% 4.43%
LAIF Cash Invested ($MM) 18.8 18.8 14.8
THE ECONOMY:

In the fourth quarter of 2024 (October, November, December), the U.S. economy (real gross domestic product) grew at a 2.3% annualized pace, according to the advance estimate released by the U.S. Bureau of Economic Analysis. Inflation remained modest, with the Personal Consumption Expenditures (PCE) price index up 2.3% and core PCE (excluding food and energy) up 2.5% for the quarter. For monthly perspective, the Consumer Price Index showed year-over-year increases of 2.6% in October, 2.7% in November, and 2.9% in December. The unemployment rate averaged 4.1% for the quarter, with monthly readings of 4.1% in October, 4.2% in November, and 4.1% in December, according to the Bureau of Labor Statistics. These trends aligned with the Fed meeting minutes from December noting that inflation has eased but remained above their 2% target.

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3 CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

STRATEGIC PLAN:

This investment report addresses the following Strategic Plan:

Fiscal Health
FINANCIAL IMPACT:

ALTERNATIVE ACTION:

No reasonable alternatives are known currently.

ATTACHMENTS AND/OR REFERENCES (IF ANY):
1) October through December 2024 Investment Report Q2

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City of Watsonville
Investment Reports
Oct-24
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 4.96%
Average Maturity (Days) 0.1
Comparative Yields:

LAIF 4.52%
One Year Agency Note 4.27%
Six Month -Treasury Bills 4.43%
Attachment 1

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City of Watsonville
Investment Position Report
31-Oct-24 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 31-Oct-24 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 31-Oct-24 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) 0.00%
Average Duration -
100.0%
Pooled Investment
LAIF N/A 4.52% Demand 18,828,388 18,828,388 18,682,862 18,682,862 Various CAMP N/A 5.03% Demand 107,885,667 107,885,667 107,885,667 107,885,667 Various 126,714,055 126,714,055 126,568,529 126,568,529
126,714,055 126,714,055 126,568,529 126,568,529
Totals 4.96%
Average Maturity (Days/Years) 0.1 Activity Report
31-Oct-24 Days -22.9

Source:

Attachment 1

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City of Watsonville
Investment Reports
Nov-24
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 4.82%
Average Maturity (Days) 0.1
Comparative Yields:

LAIF 4.48%
One Year Agency Note 4.30%
Six Month -Treasury Bills 4.42%
Attachment 1

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City of Watsonville
Investment Position Report
30-Nov-24 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 30-Nov-24 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 30-Nov-24 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) 0.00%
Average Duration -
100.0%
Pooled Investment
LAIF N/A 4.48% Demand 18,828,388 18,828,388 18,682,862 18,682,862 Various CAMP N/A 4.87% Demand 108,316,370 108,316,370 108,316,370 108,316,370 Various 127,144,759 127,144,759 126,999,233 126,999,233
127,144,759 127,144,759 126,999,233 126,999,233
Totals 4.82%
Average Maturity (Days/Years) 0.1 Activity Report
30-Nov-24 Days -22.9

Source:

Attachment 1

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City of Watsonville
Investment Reports
Dec-24
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 4.70%
Average Maturity (Days) 0.1
Comparative Yields:

LAIF 4.43%
One Year Agency Note 4.16%
Six Month -Treasury Bills 4.24%
Attachment 1

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City of Watsonville
Investment Position Report
31-Dec-24 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 31-Dec-24 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 31-Dec-24 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) 0.00%
Average Duration -
100.0%
Pooled Investment
LAIF N/A 4.43% Demand 14,828,388 14,828,388 14,682,862 14,682,862 Various CAMP N/A 4.73% Demand 108,750,035 108,750,035 108,750,035 108,750,035 Various 123,578,424 123,578,424 123,432,898 123,432,898
123,578,424 123,578,424 123,432,898 123,432,898
Totals 4.70%
Average Maturity (Days/Years) 0.1 Activity Report
31-Dec-24 Days -22.9

Source:

Attachment 1

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INVESTMENT REPORT
RECOMMENDATION:

Accept the quarterly Investment Report.

BACKGROUND:

It is recommended that Council accept the Investment Report for the period of January 2025 through March 2025 by motion.

DISCUSSION:

The City’s idle funds are invested to earn a competitive yield and to accommodate the City’s need for liquidity. Investments of idle funds are only made in investment types/instruments approved by the Council. Every year in January, the Council re-adopts the City’s Investment Policy. As shown on Table 1 below, the City’s Investment Portfolio in March 2025 was 134.5 million dollars. Our current holdings include: City Investments, LAIF and CAMP.

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2 competitive yield, and monthly interest payments and zero out pocket expenses. The City’s current investment in CAMP is in the amount of 112.5 million dollars.

PORTFOLIO RESULTS:

The results from the last several months are shown below on Table 1.

Table I
Jan Feb Mar
Cash Invested ($MM) 133.7 134.1 134.5
City’s Average Yield 4.53% 4.49% 4.45%
LAIF Yield 4.37% 4.33% 4.31%
LAIF Cash Invested ($MM) 22.0 22.0 22.0
THE ECONOMY:

The Federal Reserve (The Fed) at its most recent Federal Open Market Committee (FOMC) meeting in March, announced a decision to hold the federal funds rate steady, keeping the key rate in target range between 4.25% to 4.5%. The decision to hold rates steady was driven due to elevated uncertainty around the economic outlook regarding trade policy.

Participants’ view on current conditions and the economic outlook observed that the economy continues to grow at a solid pace and labor market conditions remained broadly balanced, yet consumer price inflation stayed somewhat elevated.

The first quarter of 2025 (January, February, March), the U.S. economy (real gross domestic product) decreased at an annual rate of 0.3%, according to the advance estimate released by the U.S. Bureau of Economic Analysis. Inflation remained firm, with the Personal Consumption Expenditures (PCE) price index up 3.6% and core PCE (excluding food and energy) up 3.5% for the quarter. Monthly Consumer Price Index showed year-over-year increases of 3.0% in January, 2.8% in February, and 2.4% in March.

The unemployment rate averaged 4.1% for the quarter, with monthly readings of 4.0% in January, 4.1% in February, and 4.2% in March. These trends aligned with the Fed meeting minutes in March, highlighting that the economy continues to expand at solid pace and that while inflation had eased compared to its peak, it remained above their 2% goal.

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3 CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

STRATEGIC PLAN:

The investment report addresses the following Strategic Plan:

Fiscal Health
FINANCIAL IMPACT:

Pressures concerning the impact trade policy will have on the economy, the Fed made the decision to hold interest rates steady. Despite the uncertain impact of tariffs on the economy, the Fed still expects another half percentage point of rate cuts through 2025. California being a major part of the U.S. economy, is significantly impacted by these changes in interest rates. The City benefits from higher interest earnings because of the higher interest rate.

ALTERNATIVE ACTION:

No reasonable alternatives are known currently.

ATTACHMENTS AND/OR REFERENCES (IF ANY):
1) January through March 2025 Investment Report Q3

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City of Watsonville
Investment Reports
Jan-25
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 4.53%
Average Maturity (Days) 0.2
Comparative Yields:

LAIF 4.37%
One Year Agency Note 4.17%
Six Month -Treasury Bills 4.28%
Attachment 1

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City of Watsonville
Investment Position Report
31-Jan-25 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 31-Jan-25 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 31-Jan-25 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) 0.00%
Average Duration -
100.0%
Pooled Investment
LAIF N/A 4.37% Demand 22,047,908 22,047,908 21,902,382 21,902,382 Various CAMP N/A 4.55% Demand 111,675,070 111,675,070 111,675,070 111,675,070 Various 133,722,978 133,722,978 133,577,452 133,577,452
133,722,978 133,722,978 133,577,452 133,577,452
Totals 4.53%
Average Maturity (Days/Years) 0.2 Activity Report
31-Jan-25 Days -22.8

Source:

Attachment 1

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City of Watsonville
Investment Reports
Feb-25
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 4.49%
Average Maturity (Days) 0.2
Comparative Yields:

LAIF 4.33%
One Year Agency Note 4.08%
Six Month -Treasury Bills 4.25%
Attachment 1

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City of Watsonville
Investment Position Report
28-Feb-25 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 28-Feb-25 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 28-Feb-25 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) 0.00%
Average Duration -
100.0%
Pooled Investment
LAIF N/A 4.33% Demand 22,047,908 22,047,908 21,902,382 21,902,382 Various CAMP N/A 4.51% Demand 112,061,632 112,061,632 112,061,632 112,061,632 Various 134,109,541 134,109,541 133,964,014 133,964,014
134,109,541 134,109,541 133,964,014 133,964,014
Totals 4.49%
Average Maturity (Days/Years) 0.2 Activity Report
28-Feb-25 Days -22.8

Source:

Attachment 1

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City of Watsonville
Investment Reports
Mar-25
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 4.45%
Average Maturity (Days) 0.2
Comparative Yields:

LAIF 4.31%
One Year Agency Note 4.03%
Six Month -Treasury Bills 4.23%
Attachment 1

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City of Watsonville
Investment Position Report
31-Mar-25 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 31-Mar-25 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 31-Mar-25 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) 0.00%
Average Duration -
100.0%
Pooled Investment
LAIF N/A 4.31% Demand 22,047,908 22,047,908 21,902,382 21,902,382 Various CAMP N/A 4.47% Demand 112,486,924 112,486,924 112,486,924 112,486,924 Various 134,534,833 134,534,833 134,389,307 134,389,307
134,534,833 134,534,833 134,389,307 134,389,307
Totals 4.45%
Average Maturity (Days/Years) 0.2 Activity Report
31-Mar-25 Days -22.8

Source:

Attachment 1

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
RECOMMENDED BY: ADMINISTRATIVE SERVICES DIRECTOR DURAN
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: MOTION TO ACCEPT APRIL 2025 THROUGH JUNE 2025 INVESTMENT REPORT
RECOMMENDATION:

The City Council is asked to accept the quarterly Investment Report.

BACKGROUND:

It is recommended that Council accept the Investment Report for the period of April 2025 through June 2025 by motion.

DISCUSSION:

The City’s idle funds are invested to earn a competitive yield and to accommodate the City’s need for liquidity. Investments of idle funds are only made in investment types/instruments approved by the Council. Every year in January, the Council re-adopts the City’s Investment Policy. As shown on Table 1 below, the City’s Investment Portfolio in June 2025 was 139.1 million dollars. Our current holdings include: City Investments, LAIF and CAMP.

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2 competitive yield, and monthly interest payments and zero out pocket expenses. The City’s current investment in CAMP is in the amount of 119.8 million dollars.

PORTFOLIO RESULTS:

The results from the last several months are shown below on Table 1.

Table I
Apr May June
Cash Invested ($MM) 138.2 138.6 139.1
City’s Average Yield 4.44% 4.41% 4.39%
LAIF Yield 4.28% 4.27% 4.27%
LAIF Cash Invested ($MM) 19.3 19.3 19.3
THE ECONOMY:

The Federal Reserve (The Fed) at its most recent Federal Open Market Committee (FOMC) meeting in June held the federal funds rate steady at 4.25-4.50%, with unanimous decisions and no dissent, reflecting a cautious stance amid mixed economic signals.

The Fed’s latest Summary of Economic Projections shows policymakers expect two quarter- point rate cuts by year-end. The committee remains deeply divided, with some favoring no rate cuts at all.

Economists were expecting no change in July, eyeing September or later for the first rate cut as the Fed remains data-dependent and cautious due to lingering inflation and uncertainty of the impact of tariffs.

In the second quarter of 2025 (April, May, June), the U.S. economy (real gross domestic product) grew at an annualized rate of 3.0%, according to the advance estimate released by the U.S. Bureau of Economic Analysis. Inflation eased, with the Personal Consumption Expenditures (PCE) price index rising 2.1% for the quarter and core PCE (excluding food and energy) up 2.5%. For monthly perspective, the Consumer Price Index showed year-over-year increases of 2.3% April, 2.4% in May, 2.7% in June, according to the Bureau of Labor Statistics. The unemployment rate averaged 4.2% for the quarter, with monthly readings of 4.2% in April, 4.2% in May, and 4.1% in June. These trends aligned with the Fed meeting minutes in June highlighting that inflation is moving closer towards its goal of 2% and that overall economic activity continues to expand at a solid pace.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

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3 STRATEGIC PLAN:

This investment report addresses the following Strategic Plan:

Fiscal Health
FINANCIAL IMPACT:

ALTERNATIVE ACTION:

No reasonable alternatives are known currently.

ATTACHMENTS AND/OR REFERENCES (IF ANY):
1) April through June 2025 Investment Report Q4

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City of Watsonville
Investment Reports
Apr-25
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 4.44%
Average Maturity (Days) 0.1
Comparative Yields:

LAIF 4.28%
One Year Agency Note 3.85%
Six Month -Treasury Bills 4.19%
Attachment 1

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City of Watsonville
Investment Position Report
30-Apr-25 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 30-Apr-25 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 30-Apr-25 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) #DIV/0!
Average Duration #DIV/0!
100.0%
Pooled Investment
LAIF N/A 4.28% Demand 19,290,073 19,290,073 19,144,547 19,144,547 Various CAMP N/A 4.45% Demand 118,899,753 118,899,753 118,899,753 118,899,753 Various 138,189,827 138,189,827 138,044,301 138,044,301
138,189,827 138,189,827 138,044,301 138,044,301
Totals 4.44%
Average Maturity (Days/Years) 0.1 Activity Report
30-Apr-25 Days -22.9

Source:

Attachment 1

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City of Watsonville
Investment Reports
May-25
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 4.41%
Average Maturity (Days) 0.1
Comparative Yields:

LAIF 4.27%
One Year Agency Note 4.11%
Six Month -Treasury Bills 4.36%
Attachment 1

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City of Watsonville
Investment Position Report
31-May-25 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 31-May-24 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 31-May-24 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) #DIV/0!
Average Duration #DIV/0!
100.0%
Pooled Investment
LAIF N/A 4.27% Demand 19,290,073 19,290,073 19,144,547 19,144,547 Various CAMP N/A 4.42% Demand 119,346,392 119,346,392 119,346,392 119,346,392 Various 138,636,465 138,636,465 138,490,939 138,490,939
138,636,465 138,636,465 138,490,939 138,490,939
Totals 4.41%
Average Maturity (Days/Years) 0.1 Activity Report
31-May-25 Days -22.9

Source:

Attachment 1

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City of Watsonville
Investment Reports
Jun-25
We certify that the investment report conforms to the City of Watsonville's Investment Policy and that the City's next 6 month's cash needs can be met if past trends continue.

Marissa Duran Benjamin Getreu
Administrative Services Director Accountant I
Portfolio Average Return 4.39%
Average Maturity (Days) 0.1
Comparative Yields:

LAIF 4.27%
One Year Agency Note 3.96%
Six Month -Treasury Bills 4.29%
Attachment 1

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City of Watsonville
Investment Position Report
30-Jun-25 Current
Coup. Yield Maturity Face Purchase General Ledger Market Purchase Rate (YTM) Date Value Price Balance Value Date
Treasury Notes (**) 0.0%
Totals 0 0 0 0
Average Maturity (Days/Years) 0.0
Agency Notes(**) 0.0%
Call date
Totals 0.00% 0 0 0 0
Average Maturity (Days/Years) 0 0.0
Average Duration
City Investments 0.0%
Side Fund Pool Inv - PD 2.000% 2.00% 30-Jun-25 0 0 0 0 28-Jun-11 Side Fund Pool Inv - FF 2.000% 2.00% 30-Jun-25 0 0 0 0 28-Jun-11 Totals 0 0 0 0
Average Maturity (Days/Years) 4.57%
Average Duration -
100.0%
Pooled Investment
LAIF N/A 4.27% Demand 19,290,073 19,290,073 19,144,547 19,313,189 Various CAMP N/A 4.40% Demand 119,778,449 119,778,449 119,778,449 119,778,449 Various 139,068,522 139,068,522 138,922,996 139,091,638
139,068,522 139,068,522 138,922,996 139,091,638
Totals 4.39%
Average Maturity (Days/Years) 0.1 Activity Report
30-Jun-25 Days -22.9

Source:

Attachment 1

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
WRITTEN BY: PUBLIC INFORMATION OFFICER PULIDO
RECOMMENDED BY: POLICE CHIEF ZAMORA
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: WATSONVILLE POLICE DEPARTMENT RESPONSE TO 2025 SANTA CRUZ

COUNTY CIVIL GRAND JURY REPORT - HANDCUFFING AND TRANSPORT RECOMMENDATION:

It is recommended that the City Council, by Motion, approve the response packets prepared for the 2024- 2025 Santa Cruz County Civil Grand Jury findings and recommendations for its Handcuffing and Transport:

Can Watsonville Police Reduce Trauma? report.

BACKGROUND:

Each year, the Santa Cruz Civil Grand Jury issues reports and requires certain agencies and departments to respond. In many cases, the respondents are department heads and administrators. In other cases, the respondent is the agency itself.

This year, the Santa Cruz Civil Grand Jury is requiring a response to the report Handcuffing and Transport:

Can Watsonville Police Reduce Trauma? from the Watsonville City Council.

The Jury reviewed available documents, including arrest logs and police reports, and conducted interviews to determine whether handcuffing is overused by the Watsonville Police Department for misdemeanor infractions. The Jury looked at the level of handcuffing across various police departments and the sheriff’s office in the County.

A key area of focus was the use of “cite and release” and whether the “release” happens at the scene or the police station. The Jury concentrated on investigating various policy and procedure manuals and training materials of the Sheriff’s Office, the Santa Cruz Police Department, and the Watsonville Police Department.

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2 DISCUSSION:

The Santa Cruz County Civil Grand Jury’s investigation examined the use of handcuffing for misdemeanors across the County, noting that the Watsonville Police Department handcuffed individuals at a higher rate than other law enforcement agencies.

The Watsonville Police Department received the report and is required to respond under California Penal Code §933(c).

Regarding the findings, the department largely challenged the conclusions related to handcuffing practices, de-escalation training, and salaries. WPD disagrees with claims that officers overuse handcuffing or transport more misdemeanor violators than other agencies, emphasizing that each situation is unique and influenced by factors such as the nature of the violation, repeated offenses, and officer knowledge at the time of the call. While acknowledging that most agencies handcuff individuals during transport, WPD notes exceptions exist for medical issues, victims, and witnesses.

The report also identifies DUI investigations as an opportunity for WPD to complete processing in the field rather than transporting individuals back to the department. However, when formulating the percentages noted in this finding and comparing WPD to other departments, such as the Sheriff’s Office, the report did not account for the fact that the Sheriff’s Office turns over its DUI investigations to the California Highway Patrol. This significantly lowers the Sheriff’s percentage of individuals transported, as CHP completes those investigations. Therefore, a general comparison to that agency is neither straightforward nor fully accurate.

The department also clarified that evidentiary breath testing sometimes requires transport to the station, as field tools cannot replace DOJ-approved procedures.

Regarding de-escalation, WPD maintains that officers receive annual training and consistently apply minimal force.

Finally, comparisons of WPD salaries to those of the San Jose Police Department were deemed inappropriate due to differences in city size, budget, and population, with recent compensation studies showing WPD salaries are competitive relative to comparable cities.

With respect to the recommendations, WPD has determined that the suggested changes will generally not be implemented. Current training, policies, and practices already meet or exceed POST standards, covering de-escalation, cite-and-release, and handcuffing discretion.

Recommendations to increase field releases or install certified breath testing devices in patrol cars are unnecessary, as WPD already uses field testing tools and maintains a controlled evidentiary process.

Proposed large salary increases are not feasible, as they would exceed the City’s budget and require significant cuts to other essential services. Overall, WPD’s current practices are effective, compliant, and professionally sound.

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3 CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

N/A
STRATEGIC PLAN:

The response to the Santa Cruz County Civil Grand Jury 2024-2025 report aligns with Public Safety, Efficient and Well-Performing Government, and Community Engagement and Well-being of the 2025- 2027 Watsonville City Council Strategic Plan.

FINANCIAL IMPACT:

There is no financial impact associated with filing responses to the Santa Cruz County Civil Grand Jury report.

ALTERNATIVE ACTION:

The Council may choose not to approve the Response Packet or to modify the responses; however, the responses are due to the Grand Jury no later than September 16, 2025.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

1. Watsonville Police response to report Handcuffing and Transport, Can Watsonville Police Reduce Trauma?

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Handcuffing and Transport Published on June 18, 2025 Page 1 of 13 The 2024-2025 Santa Cruz County Civil Grand Jury
Invites the
Watsonville Police Department Chief of Police
to Respond by August 18, 2025
to the Findings and Recommendations listed below
which were assigned to them in the report titled
Handcuffing and Transport
Can Watsonville Police Reduce Trauma?
Required Responses apply to elected officials, elected agencies or department heads, elected boards, councils, and committees. The respondent is required to respond and to make the response available to the public under California Penal Code (PC) §933(c). A required response will be considered compliant under PC §933.05 if it contains an appropriate comment on all findings and recommendations which were assigned to you in this report.

Invited Responses are encouraged but are not required by the California Penal Code.

Please follow the instructions below when preparing your response.

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 2 of 13 Instructions for Respondents
Your assigned Findings and Recommendations are listed on the following pages with check boxes and an expandable space for summaries, timeframes, and explanations.

Please follow these instructions, which paraphrase PC §933.05:

1. For the Findings, mark one of the following responses with an “X” and provide the required additional information:
a. AGREE with the Finding, or
b. PARTIALLY DISAGREE with the Finding – specify the portion of the Finding that is disputed and include an explanation of the reasons why, or c. DISAGREE with the Finding – provide an explanation of the reasons why.

2. For the Recommendations, mark one of the following actions with an “X” and provide the required additional information:
a. HAS BEEN IMPLEMENTED – provide a summary of the action taken, or b. HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – provide a timeframe or expected date for completion, or c. REQUIRES FURTHER ANALYSIS – provide an explanation, scope, and parameters of an analysis to be completed within six months, or d. WILL NOT BE IMPLEMENTED – provide an explanation of why it is not warranted or not reasonable.

3. Please attach a PDF version of your completed responses to an email sent to:

The Honorable Judge: Katherine Hansen [email protected] and
The Santa Cruz County Grand Jury: [email protected].

If you have questions about this response form, please contact the Grand Jury by calling (831) 454-2099 or by sending an email to [email protected].

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 3 of 13 Findings
F1 . While handcuffing is discretionary, Watsonville Department police officers tend to overuse handcuffing, even when a person is released at the scene.
__ AGREE
__ PARTIALLY DISAGREE
_X_ DISAGREE
Response explanation (required for a response other than Agree):

It is nearly impossible to agree with this finding without having the opportunity to review the data used to formulate the finding. Every situation and interaction with community members is unique and can produce many different circumstances and outcomes. Some of these circumstances include officers' past experience with an individual(s), type of violation, repeated violations with a likelihood for the behavior to continue, information provided while responding to a call, and many others.

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 4 of 13 F2 . The WPD handcuffs and transports a much higher percentage of misdemeanor violators to department headquarters than other law enforcement agencies within the County.
__ AGREE
__ PARTIALLY DISAGREE
_X_ DISAGREE
Response explanation (required for a response other than Agree):

Again, it is difficult to agree with a finding such as this without having the opportunity to review the documents used to formulate the finding. There are many factors and circumstances that have an impact on whether or not an individual is handcuffed and transported to the police department.

The report calls out DUI as one of the opportunities for the Watsonville Police Department to complete the investigation in the field, eliminating the need to transport individuals back to the department. When formulating the percentage noted in this finding and comparing that to other departments, such as the Sheriff’s Office, the investigation did not note that the Sheriff’s Office turns over its DUI investigations to the California Highway Patrol, thus significantly lowering their percentage of individuals transported, since CHP is completing the investigation. This would mean that a general comparison to that agency in the county would not be as accurate or as straightforward a comparison as asserted.

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 5 of 13 F3 . All local law enforcement agencies handcuff individuals transported to police departments, hospitals, sobering centers, or the County jail. __ AGREE
_X_ PARTIALLY DISAGREE
__ DISAGREE
Response explanation (required for a response other than Agree):

While it is common practice to transport arrestees in a handcuffed position, officers also commonly transport other individuals, such as witnesses, victims, and other noncriminal offenders, without the use of handcuffs.

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 6 of 13 F4 . In Watsonville, second or third breath testing is done at the Police Department, requiring handcuffing for transport. If more breath testing were done in the field, fewer people would be transported to the WPD. __ AGREE
_X_ PARTIALLY DISAGREE
__ DISAGREE
Response explanation (required for a response other than Agree):

This investigation failed to take an in-depth look at DUI processes, procedures, and prosecution. There is a distinct difference between alcohol “screening” and “evidentiary” tests. While utilizing a breathalyzer device in the field is a useful screening tool, it does not qualify as an evidentiary test that can be utilized for prosecution. A breathalyzer screening device is a common tool utilized by this department and holds as much value as any of the other field sobriety tests used in the field. Once a DUI arrest is made, the officer is required to wait 15 minutes prior to administering an evidentiary breath test to determine blood alcohol content. This evidentiary test system allows all data to be stored and transferred securely to the Department of Justice through a statewide, secure computer network. These specific breath tests are utilized in court for prosecution. If an individual who is arrested for DUI refuses to voluntarily submit to breath testing, then that individual is automatically transported to the hospital for blood testing.

Furthermore, DUI investigations are typically time-consuming. Even after field testing and evidentiary testing, there is additional documentation needed to complete the DUI reporting that other arrests do not require. By attempting to do all of this in the field, it would increase the amount of time an individual is detained in view of the public eye, which could also cause more stress and embarrassment to the arrestee.

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 7 of 13 F5 . De-escalation training reduces the use of force, including handcuffing. __ AGREE
_X_ PARTIALLY DISAGREE
__ DISAGREE
Response explanation (required for a response other than Agree):

While de-escalation training equips officers with more tools that can be utilized when determining how to respond to a call for service or during an interaction with a community member, there is no guarantee that it will reduce or eliminate the need to use force, including handcuffing. There are many variables and factors that impact the outcomes of these interactions.

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 8 of 13 F7 . The WPD has a lower retention rate of officers with more than five years of experience.
__ AGREE
__ PARTIALLY DISAGREE
_X_ DISAGREE
Response explanation (required for a response other than Agree):

Again, it is difficult to agree with a finding such as this without having the opportunity to review the data used to formulate the finding.

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 9 of 13 F9 . Officers with more years of service in the department have better relationships with the community and more experience in de-escalation, leading to fewer negative interactions.
__ AGREE
_X_ PARTIALLY DISAGREE
__ DISAGREE
Response explanation (required for a response other than Agree):

Experience, as with any field, undoubtedly helps officers become more comfortable with their roles as officers, become more informed of the many solutions that can be utilized when responding to a call for service, and become more versed in the variety of resources that exist in the community.

While experience is critical, it isn’t the only thing that matters. Hiring officers from within the community or neighboring communities also helps in terms of building strong relationships with our community. Oftentimes, the department hires officers who meet this criteria. Many of these officers already arrive at the department with established relationships within the community, a deeper investment in the community, and a strong sense of passion and commitment to help produce positive outcomes throughout the community.

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 10 of 13 Recommendations
R1 . The Watsonville Police Department should update training materials and provide additional training about cite and release, so that more individuals are released in the field, and thereby reducing the number of people transported to Watsonville Police Headquarters. This should be completed by June 30, 2026. (F2, F3)
__ HAS BEEN IMPLEMENTED – summarize what has been done
__
HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__
REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
_X_ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

Training materials are updated and in compliance with industry standards.

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 11 of 13 R2 . While the WPD does include de-escalation training in some courses, the Watsonville Police Department should require all officers to take the Police Officer Standards and Training De-escalation Training by June 30, 2026. (F5, F9)
_X_ HAS BEEN IMPLEMENTED – summarize what has been done __
HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__
REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
_X_ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

The Watsonville Police Department consistently meets and exceeds POST requirements on all training, and in this case, de-escalation training. The identified “training” that was highlighted in this report is not an actual training course. Rather, it is a publication produced by POST to inform and identify the principles of deescalation.

Through the POST Perishable Skills training cycles, the department trains officers in Arrest and Control, Strategic Communications, and Use of Force. Within Arrest and Control, officers are trained in de-escalation and verbal commands, and expected to show proficiency and understanding by the end of the course. Furthermore, within Strategic Communications, officers are trained in the concepts of escalation versus de-escalation. Finally, within the Use of Force course, officers are again trained in deescalation and how to achieve a safe outcome utilizing clear verbal commands.

In addition to the POST mandated perishable skills courses, the department has made an even greater time and monetary investment to bring specialized training to the department. This includes Why’d You Stop Me? CP 21 training, which was sponsored by POST. While the report did identify this specific training, it did not adequately convey the importance of the training and the critical topics that it covered.

These topics included de-escalation, implicit bias, procedural justice, strategic communication, and community trust-building.

Finally, the department invested about $30,000 to bring in two additional trainings to expand on the CP 21 training, both of which covered de-escalation principles among other critical topics. One of these was trainings was geared towards supervisors and managers to provide additional guidance to them on how to uphold and encourage principle of de-escalation within the department.

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 12 of 13 R3 . The Watsonville Police Department should update training materials and provide training around handcuffing discretion so that more individuals are released on the scene without being handcuffed. This should be completed by December 31, 2025. (F1)
__ HAS BEEN IMPLEMENTED – summarize what has been done
__
HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__
REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
_X_ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

WPD updates policies and training materials in alignment with state law and POST standards. Currently, WPD policies and training material are up to date.

Attachment 1

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Invited Response from the Watsonville Police Department Chief of Police Handcuffing and Transport Due by August 18, 2025 Page 13 of 13 R6 . The Watsonville Police Department should institute quarterly meetings with community groups to strengthen relationships with the community. These meetings should begin by October 1, 2025. (F9)
_X_ HAS BEEN IMPLEMENTED – summarize what has been done __
HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__
REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
_X_ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

This is already standard practice for the department. One of the most critical meetings that is scheduled on a quarterly basis is the Chief’s Advisory Board meeting.

The Chief’s Advisory Board is comprised of community members from different segments of the community, including faith-based organizations, education, non-profit, business, and others. This board is in place to help guide, advise, and inform the Chief and the department.

Additionally, the department collaborates with non-profits, such as Community Action Board, Monarch Services, and Pajaro Valley Prevention and Student Assistance (PVPSA) to help inform the department on the needs and issues facing our community. The department also holds a seat on the board of directors for PVPSA, which strengthens our partnership with the organization.

Finally, the department supports a program named Agua Con La Chota, which is a program geared towards bringing police department personnel and resources to the agriculture fields to learn more about the issues facing our labor community and strengthen our relationship with this essential segment of our community.

Attachment 1

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Handcuffing and Transport Published on June 18, 2025 Page 1 of 13 The 2024-2025 Santa Cruz County Civil Grand Jury
Requires the
Watsonville City Council
to Respond by September 16, 2025
to the Findings and Recommendations listed below
which were assigned to them in the report titled
Handcuffing and Transport
Can Watsonville Police Reduce Trauma?
Required Responses apply to elected officials, elected agencies or department heads, elected boards, councils, and committees. The respondent is required to respond and to make the response available to the public under California Penal Code (PC) §933(c). A required response will be considered compliant under PC §933.05 if it contains an appropriate comment on all findings and recommendations which were assigned to you in this report.

Invited Responses are encouraged but are not required by the California Penal Code.

Please follow the instructions below when preparing your response.

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 2 of 13 Instructions for Respondents
Your assigned Findings and Recommendations are listed on the following pages with check boxes and an expandable space for summaries, timeframes, and explanations.

Please follow these instructions, which paraphrase PC §933.05:

3. Please confirm the date on which the assigned responses were approved during an official meeting:

We approved these responses in a regular public meeting as shown in our minutes dated August 26, 2025

4. Please attach a PDF version of your completed responses to an email sent to:

The Honorable Judge: Katherine Hansen [email protected] and
The Santa Cruz County Grand Jury: [email protected].

If you have questions about this response form, please contact the Grand Jury by calling (831) 454-2099 or by sending an email to [email protected].

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 3 of 13 Findings
F1. While handcuffing is discretionary, Watsonville Department police officers tend to overuse handcuffing, even when a person is released at the scene.
__ AGREE
__ PARTIALLY DISAGREE
_X_ DISAGREE
Response explanation (required for a response other than Agree):

It is nearly impossible to agree with this finding without having the opportunity to review the data used to formulate it. Every situation and interaction with community members is unique and can produce many different circumstances and outcomes.

Some of these circumstances include officers' experience with an individual(s), type of violation, repeated violations with a likelihood for the behavior to continue, information provided while responding to a call, and many others.

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 4 of 13 F2. The WPD handcuffs and transports a much higher percentage of misdemeanor violators to department headquarters than other law enforcement agencies within the County.
__ AGREE
__ PARTIALLY DISAGREE
_X_ DISAGREE
Response explanation (required for a response other than Agree):

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 5 of 13 F3. All local law enforcement agencies handcuff individuals transported to police departments, hospitals, sobering centers, or the County jail. __ AGREE
_X_ PARTIALLY DISAGREE
__ DISAGREE
Response explanation (required for a response other than Agree):

As a general rule, yes. There are exceptions, some include people who have medical issues, victims of crimes, or witnesses.

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 6 of 13 F4. In Watsonville, second or third breath testing is done at the Police Department, requiring handcuffing for transport. If more breath testing were done in the field, fewer people would be transported to the WPD. __ AGREE
__ PARTIALLY DISAGREE
_X_ DISAGREE
Response explanation (required for a response other than Agree):

Watsonville Police Department complies with the Department of Justice (DOJ) evidentiary breath test process. At times, it may require transporting to allow for a controlled evidentiary testing process in the station. Off-the-shelf screening tools are not adequate to take evidentiary samples.

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 7 of 13 F5. De-escalation training reduces the use of force, including handcuffing. __ AGREE
_X_ PARTIALLY DISAGREE
__ DISAGREE
Response explanation (required for a response other than Agree):

Watsonville Police Department is trained yearly and complies with POST standards on de-escalation. Watsonville Police Department's track record shows clear evidence that officers use minimum force to effect an arrest.

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 8 of 13 F8. The WPD salaries are at least 17% lower than the San Jose Police Department salaries.
__ AGREE
__ PARTIALLY DISAGREE
_X_ DISAGREE
Response explanation (required for a response other than Agree):

Comparing officer wages of the City of Watsonville with the City of San Jose is not appropriate. The City of Watsonville recently completed a city-wide classification and compensation study. As part of this study, the outside consultant identifies ‘comparable cities’ to use for salary and benefit comparisons. Cities are included due to geography, employer size, historical practices, and economic similarity. When the City of Watsonville police officer salary and benefits were compared to our survey agencies (Gilroy, Santa Cruz, Salinas, Seaside, Hollister, Monterey, Morgan Hill, and Santa Cruz County) our police officers were found to be 3.3% above market for salary and -4.6% below market for total compensation. Comparing salaries in the City of San Jose, with a budget of over $5 billion and a population of over 1 million, to the wages in Watsonville, with a budget of around $300M and a population of just over 52,000 people, is not equitable.

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 9 of 13 Recommendations
R1. The Watsonville Police Department should update training materials and provide additional training about cite and release, so that more individuals are released in the field, and thereby reducing the number of people transported to Watsonville Police Headquarters. This should be completed by June 30, 2026. (F2, F3)
__ HAS BEEN IMPLEMENTED – summarize what has been done
__
HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__
REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
_X_ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

The training materials are updated and in compliance with industry standards.

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 10 of 13 R2. While the WPD does include de-escalation training in some courses, the Watsonville Police Department should require all officers to take the Police Officer Standards and Training De-escalation Training by June 30, 2026. (F5, F9)
_X_ HAS BEEN IMPLEMENTED – summarize what has been done __
HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__
REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
_X_ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 11 of 13 R3. The Watsonville Police Department should update training materials and provide training around handcuffing discretion so that more individuals are released on the scene without being handcuffed. This should be completed by December 31, 2025. (F1)
__ HAS BEEN IMPLEMENTED – summarize what has been done
__
HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__
REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
_X_ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

WPD updates policies and training materials in alignment with state law and POST standards. Currently, WPD policies and training material are up to date.

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 12 of 13 R4. The Watsonville Police Department should install in every patrol car a certified breath testing apparatus so that multiple breath tests are completed in the field and fewer DUI misdemeanors are transported to WPD. This should be completed by December 31, 2025. (F4)
__ HAS BEEN IMPLEMENTED – summarize what has been done
__
HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__
REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
_X_ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

Watsonville Police Department uses field testing breathalyzer screening tools in addition to the evidentiary test kit at the Watsonville Police station.

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Required Response from the Watsonville City Council
Handcuffing and Transport Due by September 16, 2025 Page 13 of 13 R5. The Watsonville City Council should add incentives and raise officer total compensation for those with experience of zero to 15 years by 10% to 30% to reduce attrition, especially in regards to those officers with more than five years of experience. This should be completed by June 30, 2027. (F7, F8, F9)
__ HAS BEEN IMPLEMENTED – summarize what has been done
__
HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__
REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
_X_ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

The City of Watsonville has a General Fund budget of $61,917,745. Of this, 40% of the budget is dedicated to the police department. While increasing pay and benefits for all employees to attract and retain qualified people is an important and desired goal of the City, these increases must be considered in light of the available revenues and the services that the City must provide. Recommending an increase of 10% - 30% in salaries and benefits for police is well beyond the means of the City with current revenue projections and would require significant and detrimental cuts to other general fund departments (Fire, Parks, Finance, Library, Administration, and IT) greatly limiting the City’s ability to provide other critical services to the community.

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
RECOMMENDED BY: INNOVATION & TECHNOLOGY DIRECTOR GILL
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: ACCEPTANCE OF RESPONSES TO GRAND JURY REPORT
RECOMMENDATION:

By motion, approve the response packets prepared for the 2022-2023 Santa Cruz County Grand Jury’s Investigation on Cyber Threat Preparedness: Phishing and Passwords and Ransomware, Oh My! BACKGROUND:

The Grand Jury of Santa Cruz followed up to the Cyber Threat Preparedness: Phishing and Passwords and Ransomware, Oh My! in 2023.

DISCUSSION:

City IT staff had one item remaining, the incident response plan, which has since been completed.

However, during the review, the plan had not yet started, due to the timing this led to two items for remediation.

With the incident response plan complete, both grand jury items have been met.

STRATEGIC PLAN:

The response to the Grand Jury 2023 report aligns with Goal 7 of the 2023-2025 Strategic Plan: Efficient and Well Performing Government.

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2 FINANCIAL IMPACT:

The incident response plan was funded by the State and Local Government Cybersecurity Program grant.

ALTERNATIVE ACTION:

The Council may choose not to approve the Response Packet, or to modify the responses, however the responses are due to the Grand Jury no later than September 15, 2025.

ATTACHMENTS AND/OR REFERENCES (IF ANY):
1) Response to Grand Jury

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Honoring Commitments Published on June 17, 2025 Page 1 of 4 The 2024-2025 Santa Cruz County Civil Grand Jury
Requires the
Watsonville City Council
to Respond by September 15, 2025
to the Findings and Recommendations listed below
which were assigned to them in the report titled
Honoring Commitments to the Public
Looking Back at 2022-2023 Civil Grand Jury
Recommendations and Actions Taken by County
Agencies
Required Responses apply to elected officials, elected agencies or department heads, elected boards, councils, and committees. The respondent is required to respond and to make the response available to the public under California Penal Code (PC) §933(c). A required response will be considered compliant under PC §933.05 if it contains an appropriate comment on all findings and recommendations which were assigned to you in this report.

Please follow the instructions below when preparing your response.

Attachment 1

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Required Response from the Watsonville City Council
Honoring Commitments Due by September 15, 2025 Page 2 of 4 Instructions for Respondents
Your assigned Findings and Recommendations are listed on the following pages with check boxes and an expandable space for summaries, timeframes, and explanations.

Please follow these instructions, which paraphrase PC §933.05:

3. Please confirm the date on which the assigned responses were approved during an official meeting:

We approved these responses in a regular public meeting as shown
in our minutes dated ________________.

4. Please attach a PDF version of your completed responses to an email sent to:

The Honorable Judge: Katherine Hansen [email protected] and
The Santa Cruz County Grand Jury: [email protected].

If you have questions about this response form, please contact the Grand Jury by calling (831) 454-2099 or by sending an email to [email protected].

Attachment 1

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Required Response from the Watsonville City Council
Honoring Commitments Due by September 15, 2025 Page 3 of 4 Findings
F1 . The City of Watsonville does not have an Incident Response Plan. Funds have been identified in the city IT budget, and a vendor has been selected. In April 2025, the kickoff for this project begins. Items covered in the project are an incident response plan, playbooks, training, and cybersecurity scenarios that test the incident response plan. __ AGREE
__ PARTIALLY DISAGREE
_X_ DISAGREE
Response explanation (required for a response other than Agree):

City staff and the vendor have completed the incident response plan.

Attachment 1

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Required Response from the Watsonville City Council
Honoring Commitments Due by September 15, 2025 Page 4 of 4 Recommendations
R1 . The City of Watsonville should develop a formal Incident Response Plan with sufficient detail to serve as a guide in the event of a cyber-attack. They should complete the plan by October 31, 2025. (F1)
_X_ HAS BEEN IMPLEMENTED – summarize what has been done __ HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__ REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
__ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

Plan has been accepted and approved by IT Director. Training for IT staff was 08/18/2025.

Attachment 1

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 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 PLANS AND SPECIFICACTION AND CALLING FOR BIDS FOR THE LEE ROAD TRAIL PHASE 1, CITY PROJECT NO. CT-24-14860, FEDERAL PROJECT NO. 5031(040)
RECOMMENDATION:

Adopt a resolution approving the plans and specifications and calling for bids for the Lee Road Trail - Phase 1, City Project No. CT-24-14860, Federal Project No. 5031(040).

BACKGROUND:

The Lee Road Trail project is part of the City of Watsonville Trails and Bicycle Master Plan for the Watsonville Scenic Trails Network approved in November 2012. The Lee Road Trail is 1.4 miles long and extends from the Pajaro Valley High School driveway to the railroad crossing. The project will be built in phases, and Phase 1 will allow pedestrians and bicyclists to travel from the Pajaro Valley High School driveway on Harkins Slough Road 500 feet west to Lee Road, then 2,000 feet south on Lee Road, and connect to the Watsonville Slough Farm (See Location Map). Future phases of the Lee Road Trail Project will construct a pedestrian and bicycle bridge across Struve Slough and connect to several existing or proposed trails, including the Monterey Bay Sanctuary Scenic (Rail) Trail, the Lower Watsonville Slough Trail, the Manabe-Ow Trail, and the 5-mile Watsonville Slough Farm trail.

The Lee Road Trail Phase 1 project is one of three contiguous pedestrian and bicycle projects that will begin construction in the next two years and significantly expand public access to nature for Watsonville residents, students at Pajaro Valley High School, and the wider community. The other two projects are:

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2  The Safe Routes to Pajaro Valley High School and Beyond project, which will add a separated bidirectional bike lane and sidewalks to Harkins Slough Rd between the high school and the intersection with Green Valley Rd and install a pedestrian bridge across Highway 1.  The Community Harvest Gateway trailhead will be built by the Land Trust of Santa Cruz County along with five miles of trail on their Watsonville Slough Farms property.

The city has benefitted from strong partners on this project. Collaborative efforts with the office of Congressman Jimmy Panetta, the Land Trust of Santa Cruz County, the California State Coastal Conservancy, the County Parks Department and Watsonville Wetlands Watch secured funds to design and construct the project. The office of Congressman Jimmy Panetta selected this project to receive $1.0 Million for construction. The Land Trust of Santa Cruz County supported this project for the last several years with funding for planning, design and construction. This included $70,000 for engineering and planning and $700,000 for construction through a Proposition 68 Green Infrastructure Grant. The State Coastal Conservancy provided $330,000 for environmental studies, permitting and design.

DISCUSSION:

The Lee Road Trail Phase 1 project includes the following improvements:
 Widening a portion of Harkins Slough Road to accommodate bike lanes and installation of guard rail;
 Installation of new sidewalk, curb and gutter, curb ramps, high visibility crosswalks and signage on Harkins Slough Road at the high school driveway and at the intersection with Lee Rd;  Installation of 2,000 linear feet of an eight-foot-wide trail parallel to Lee Road;  Installation of four culverts to drain runoff under trail; and  Installation of informational signs regarding the surrounding area.

Mesiti-Miller Engineering prepared the design drawings and specifications for construction. All permits from regulatory agencies have been secured and the project is now ready to be bid with bid opening scheduled for October 7, 2025. The estimated cost of construction is $1.7 Million. The project is expected to take six months to build. Construction is expected to begin next Spring and be completed by the end of 2026.

Project construction is constrained by funding deadlines and permit requirements. The federal funds need to be spent by the end of 2026. Because some improvements are within environmentally sensitive areas, the project permits require that construction take place between April and October. Therefore, the construction window for this project is from April to October of next year. Receiving approval to bid the project at this time allows the construction contract to be awarded before the end of the year and gives the contractor opportunity to mobilize and be ready beginning in April.

Another funding constraint is the time needed for federal review of some project documents. City staff was informed that federal review of a Project Labor Agreement would need to take place before the project could be bid and would take up to a year. A one-year delay would push the project construction

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3 into 2027 and beyond the funding deadlines. Therefore, staff recommends that a Project Labor Agreement not be incorporated in the contract documents.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

On March 12, 2021, the County adopted a mitigated negative declaration for the Lee Road Trail project.

No changes to the mitigated negative declaration are necessary. It proposes no changes to the project that would require additional environmental analysis, and none of the conditions described in CEQA Guidelines Section 15162 for the preparation of a subsequent EIR have been met.

No substantial changes involving new significant environmental effects or a substantial increase in the severity of previously identified significant effects are proposed, and there has been no change in circumstances. There is no new information about the project that could not have been known at the time of the original project approval that indicates any new significant environmental effects or effects that will be substantially more severe, nor are there new mitigation measures that would substantially reduce one or more significant effects on the environment, or mitigation measures previously found to be infeasible that would, in fact, be feasible and would substantially reduce one or more significant effects of the project. Therefore, nothing further is required under CEQA.

The City hired Harris and Associates to perform the California Environmental Quality Act (CEQA) process under this contract. The CEQA lead Agency is County of Santa Cruz. An Initial Study/Mitigated Negative Declaration was prepared, and the declaration findings were that there is no substantial evidence that the project will have a significant effect on the environment. The expected environmental impacts are documented in the Initial Study and listed in the Mitigation Monitoring and Report Program.

A National Environmental Policy Act (NEPA) document was prepared to ensure compliance with all Federal environmental regulations, per the Grantor’s requirement. Caltrans approved NEPA document on May 8, 2024 and determined that the project is a Categorical Exclusion under 23 CFR 771.117(c); activity (c) (3).

STRATEGIC PLAN:

The project addresses the following Strategic Plan goals:
 Infrastructure & Environment
 Public Safety
FINANCIAL IMPACT:

There are sufficient funds allocated in the current budget for construction of the Lee Road Trail Phase 1 Project No. 14860. This includes funding from grants and Measure D.

ALTERNATIVE ACTION:

No reasonable alternatives are known at this time.

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Page 1 of 4 ends

8/21/2025 5:46:36 PM
C:\Program Files\eSCRIBE\TEMP\17463425832\17463425832,,,Report - Call Bids Lee Rd Trail Phase 1 .docx 0 ATTACHMENTS AND/OR REFERENCES (IF ANY):

1. Location Map

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"
k
k
"
k
"
Struve Slough
Watsonville Slough Farm
West Branch Struve Slough
Watsonville Slough
Pajaro Valley
High School
Watsonville Slough
LE
Ecological Reserve E RD
OHLON
E
PKWY
LEE
RD

HARKINS SLOUGH RD
MBSST Rail Trail
Land
Trust Nature
Trail
Lower Watsonville Slough Trail
Manabe-Ow Trail
Watsonville Slough
Struve Slough Bridge
Lee Road Middle
Lee Road South
Lee Road North
ÄÆ1
City of Watsonville Boundary
Proposed Lee Road Trail
Other Planned Trails
" Crosswalk
k Vista Point Date: 12/2/2020 - Last saved by: Randy.Deodat - Path: C:\Users\Randy.Deodat\Desktop\Projects_Clone\Watsonville\Lee Road Trail\Map Docs\IS_MND\Figure2_OverviewMap.mxd Lee Road Trail Overview
Source: County of Santa Cruz Imagery 2016.
± 0 400 800 Figure 2
Feet

CITY OF WATSONVILLE
Attachment 1

Page 1 of 1 ends

Lee Rd Trail Phase 1

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Reso No. (CM)
Meeting Date: 082625 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO. __________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

APPROVING PLANS AND SPECIFICATIONS AND CALLING FOR BIDS FOR THE LEE ROAD TRAIL - PHASE 1, CITY PROJECT NO. CT-24-14860 FEDERAL PROJECT NUMBER 5031(040) (ESTIMATED COST OF
$1,700,000 WILL BE FUNDED FROM GRANT AND MEASURE D FUNDS) WHEREAS, the goals of this project are consistent with the City of Watsonville Trails and Bicycle Master Plan for the Watsonville Scenic Trails Network; and WHEREAS, the Lee Road Trail - Phase 1 Project, City Project No. CT-24-14860, Federal Project No. 5031(040) design has been completed and the project is ready for advertisement to bid.

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

1. On March 12, 2021, the County adopted a mitigated negative declaration for the Lee Road Trail project. No changes to the mitigated negative declaration are necessary. It proposes no changes to the project that would require additional environmental analysis, and none of the conditions described in CEQA Guidelines Section 15162 for the preparation of a subsequent EIR have been met. No substantial changes involving new significant environmental effects or a substantial increase in the severity of previously identified significant effects are proposed, and there has been no change in circumstances. There is no new information about the project that could not have been known at the time of the original project approval that indicates any new significant environmental effects or effects that will be substantially more severe, nor are there new mitigation measures that would substantially reduce one or more significant effects on the environment, or mitigation measures previously found to be infeasible that would, in fact,

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Reso No. (CM)
Meeting Date: 082625
2 be feasible and would substantially reduce one or more significant effects of the project.

Therefore, nothing further is required under CEQA. The City hired Harris and Associates to perform the California Environmental Quality Act (CEQA) process under this contract.

The CEQA lead Agency is County of Santa Cruz. An Initial Study/Mitigated Negative Declaration was prepared, and the declaration findings were that there is no substantial evidence that the project will have a significant effect on the environment. The expected environmental impacts are documented in the Initial Study and listed in the Mitigation Monitoring and Report Program. A National Environmental Policy Act (NEPA) document was prepared to ensure compliance with all Federal environmental regulations, per the Grantor’s requirement. Caltrans approved NEPA document on May 8, 2024, and determined that the project is a Categorical Exclusion under 23 CFR 771.117(c); activity (c) (3).

2. That the plans and specifications for the Lee Road Trail - Phase 1, City Project No. CT-24-14860, Federal Project Number 5031(040), copies of which are on file in the Office of the City Clerk and incorporated by reference in this Resolution, are hereby approved.

3. That the Purchasing Officer is hereby authorized and directed to call for public competitive electronically sealed bids in accordance with Title 7, Chapter 14 of the Watsonville Municipal Code for the above named project, and that the bids are to be opened through the City’s electronic procurement bidding portal, on October 7, 2025, at 3:00PM, and the City Clerk is hereby directed to give notice inviting such sealed bids in the time, form, and manner provided by law.

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Reso No. (CM)
Meeting Date: 082625
3 4. That electronic bids shall be delivered to the City of Watsonville Purchasing Office in manner identified in the bid documents.

5. That after the bids are opened, they shall be tabulated and analyzed and a report submitted to the City Manager, who shall recommend the awarding, or other action, to the Council at its next regular meeting, or as soon thereafter as possible. ********************************

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
WRITTEN BY: PRINCIPAL ENGINEER THERIOT
RECOMMENDED BY: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: AWARD CONTRACT TO GRANITE ROCK COMPANY FOR PAVEMENT REPAIR ON VARIOUS CITY STREETS, ST-25-15187, IN THE AMOUNT OF $2,488,310.08
RECOMMENDATION:

It is recommended that City Council adopt a resolution awarding a contract to the lowest responsive bidder, Granite Rock Company, Inc., a corporation, for the 2025 Pavement Repair Project on various City streets, Project No. ST-25-15187, in the amount of $ 2,488,310.08.

BACKGROUND:

At its February 11, 2025, meeting, Council approved Resolution No. 43-25 (CM), accepting the City of Watsonville 2024 Pavement Management Program Update Report. The Report was prepared by Harris & Associates and assessed the condition of existing city roads and provided a six-year plan for pavement projects. Harris was retained to assist with the preparation of construction documents for the projects proposed for Year 1 and to be done as part of the 2025 Pavement Repair Project. Harris & Associates prepared plans and specifications for the 2025 Pavement Repair Project, which were approved by the City Council on June 24, 2025. The City Council adopted Resolution No. 155-25 (CM) approving plans and specifications and calling for bids. Bids were received for the 2025 Pavement Repair Project, and publicly opened and read on August 5, 2025.

The following bids were received:

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2 Contractor Location Base Bid (including supplemental work) + Add Alternate A + Add Alternate B
Graniterock San Jose, CA $ 2,488,310.08
McKim Corporation Gilroy, CA $ 2,649,527.02
Granite Construction Co. Watsonville, CA $ 2,995,307.13 QA Constructors San Francisco, CA $ 3,002,370.65
Jv Lucas Paving Martinez, CA $ 3,251,677.96
DISCUSSION:

The City of Watsonville 2025 Pavement Repair Project consists of performing pavement maintenance and light rehabilitation of approximately 3.8 miles of existing street segments throughout the city, including:
 Harkins Slough Road from Green Valley Road to Struve Slough Bridge  Harkins Slough Road from Ohlone Parkway to Blackbird Circle  Loma Prieta Avenue from Green Valley Road to Airport Boulevard  Green Valley Road from Main Street to Carey Avenue
 Freedom Boulevard from Alta Vista Avenue to Main Street  Kilburn Street from Ford Street to West 5th Street
 Ford Street from Rodriguez Street to Walker Street
Kilburn Street and Ford Street were bid as Additive Alternates A and B. Following the bid opening, it was determined that there are sufficient funds to include them in the bid award. The award amount reflects the inclusion of Additive Alternates A and B.

This project’s maintenance and rehabilitation activities include Slurry Seal and Mill and Inlays. New pavement surfaces will provide a smooth and safe ride for bicyclists and vehicles and will be re-striped to current standards and provide improved visibility and pedestrian safety at crosswalks. The project scope is based on the city’s Pavement Management Program (PMP) for Year 1 (2025).

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

The project qualifies as Categorically Exempt under CEQA in accordance with CEQA Guidelines Section 15301, CE Class 1, maintenance of existing streets involving no expansion of capacity.

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3 STRATEGIC PLAN:

The project is consistent with the following Strategic Plan goals:

Infrastructure & Environment
Public Safety
FINANCIAL IMPACT:

The 2025 Road Repair Project is included in the 2025/2026 budget. There are sufficient funds and no additional appropriations are required.

Source Account Amount
SB1 0306-924-7837-15187 $ 2,388,310.08
Measure D 0312-972-7837-15187 $ 100,000.00
ALTERNATIVE ACTION:

The council could elect to not award the construction contract. The roadways would continue to deteriorate and the cost of rehabilitation in the future will continue to increase.

ATTACHMENTS AND/OR REFERENCES (IF ANY):
1) 2025 Road Repair Project Map

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2025 Road Repair Project
Legend
Mill & Pave
Slurry
4000 ft
N
➤
Attachment 1

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Reso No. (CM)
Meeting Date: 082625 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE AWARDING CONSTRUCTION CONTRACT TO
GRANITE ROCK COMPANY, A CORPORATION, FOR THE 2025
PAVEMENT REPAIR PROJECT, NO. ST-25-15187, IN THE AMOUNT OF $2,488,310.08; AND AUTHORIZING CITY MANAGER TO EXECUTE
CONTRACT ($2,388,310.08 WILL BE FUNDED FROM THE SB1 FUND AND $100,000.00 WILL BE FUNDED FROM THE MEASURE D FUND) WHEREAS, Resolution No. 155-25 (CM) adopted by the City Council of the City of Watsonville on June 24, 2025, approved plans and specifications and authorized calling for bids for the 2025 Pavement Repair Project, No.ST-25-15187; and WHEREAS, the engineer’s estimate of probable construction cost was $2,036,000.00; and
WHEREAS, pursuant to Title 7, Chapter 14 of the City of Watsonville Municipal Code, the City issued a notice inviting bids and bids were received for the 2025 Pavement Repair Project, No ST-25-15187; and
WHEREAS, bids that were submitted by the deadline, were publicly opened in the OpenGov online portal, on Tuesday, August 5, 2025, at 11:00 A.M., and later tabulated by the Purchasing Officer for the consideration of the City Manager and submission to the City Council; and
WHEREAS, the City Manager has recommended that the bid from Granite Rock Company, a corporation, [Contractor License #22], for the 2025 Pavement Repair Project, No. ST-25-15187 in the amount of $2,488,310.08 be accepted as the lowest responsible and responsive bidder.

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

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Reso No. (CM)
Meeting Date: 082625
2 1. That the construction contract is hereby awarded to Granite Rock Company, Inc., a corporation, for the 2025 Pavement Repair Project, No. ST-25-15187, in the amount of $2,488,310.08, in the form on file in the Office of the City Clerk.

2. The project is determined to be categorically exempt from the requirements of CEQA in accordance with CEQA Guidelines Section 15301, CE Class 1, maintenance of existing streets involving no expansion of capacity.

3. The City Manager is hereby authorized and directed to execute said construction contract for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney. ********************************

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
RECOMMENDED BY: LIBRARY DIRECTOR MARTINEZ
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: APPROVE FIFTH AMENDMENT TO THE JOINT EXERCISE OF POWERS

AGREEMENT WITH THE SANTA CRUZ COUNTY LIBRARY FINANCING

AUTHORITY
RECOMMENDATION:

Approve the fifth Amendment to the Joint Exercise of Powers Agreement establishing the Santa Cruz County Library Financing Authority to establish new contributions and extend the term through June 30, 2032; and authorize the City Manager to sign the amendment.

BACKGROUND:

Financing of public library services in the County is provided through the Santa Cruz County Library Financing Authority (LFA), a Joint Powers Authority formed in 1996 by the County of Santa Cruz and the cities of Santa Cruz, Watsonville, Scotts Valley and Capitola, established for the purpose of consolidating and providing for equitable financing of library services. LFA funding is currently provided through the proceeds of the voter-approved quarter-cent sales tax for libraries (Measure R) and from jurisdictional contributions (also referred to as Maintenance of Effort (MOE) contributions) from the cities of Santa Cruz and Watsonville and the County Library Fund, which includes Capitola and Scotts Valley.

Under the original LFA agreement approved in June 1996, the cities of Santa Cruz and Watsonville contributed a fixed amount from their general funds, and the County Library Fund contributed an amount based on property taxes collected in the unincorporated area and cities of Capitola and Scotts Valley. When the LFA was established, the City of Santa Cruz contributed more than the County Library Fund based on population, and these amounts were intended to equalize. That occurred in approximately 15 years, and the County Library Fund's contribution continued to grow from property taxes.

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2 Prior Amendments
Over the past decade, County staff have been working on right sizing the LFA’s contributions from member agencies and distributions to library systems. Three amendments have been entered into during this time:
· In December 2015, the jurisdictions executed the Second Amendment to adjust contributions from the City of Santa Cruz and the County Library Fund through June 30, 2021. For the first time, the County Library Fund contributed a fixed amount while the City of Santa Cruz began contributing more to the LFA. The City of Watsonville’s contribution and distribution both remained a fixed amount, beginning a phased down approach to reach the targeted level of funding based on the population served.
· In June 2021, the jurisdictions executed the Third Amendment to increase contributions from the City of Santa Cruz and the County Library Fund in FY 2021-22. This one-year extension allowed staff to consider the funding of major maintenance at branches and update the schedule for Watsonville target funding based on the population served and property tax growth. · In July 2022, the jurisdictions executed the Fourth Amendment to increase contributions from the City of Santa Cruz and the County Library Fund through June 30, 2025. Over the three-year period, contributions increased based on a formula weighted equally by population and library square footage in each jurisdiction. Adjustments were also made for systemwide use and administrative staff at the Downtown Branch.

With these changes, County staff intended for the City of Santa Cruz’s contribution to reach a targeted level of funding equal to the County Library Fund. This has not been achieved due to higher than anticipated property tax growth in the County Library Fund.

DISCUSSION:

With the Fourth Amendment ending on June 30, 2025, staff with the County of Santa Cruz and cities of Capitola and Santa Cruz met to discuss and negotiate new contributions. Staff looked at various metrics and models to calculate contributions. In the end, due to the fluidity of library users across the system, staff recommended a per capita formula with a three-year phase in and 3.5% annual increase for contributions from the City of Santa Cruz and the County Library Fund through June 30, 2032.

The attached Fifth Amendment establishes the contributions and distributions shown in Tables 1 and 2.

Table 1: Maintenance of Effort Contributions of the Cities and County The City of Santa Cruz and the City of Watsonville shall contribute an MOE amount each year in the amounts shown below:

Fiscal Year
City of
Santa Cruz
City of
Watsonville
County
Library Fund Total
2025-26 $2,815,836 $541,684 $7,779,536 $11,137,056

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3 2026-27 $3,303,600 $541,684 $8,413,107 $12,258,391
2027-28 $3,795,704 $541,684 $9,057,050 $13,394,438
2028-29 $3,928,553 $541,684 $9,374,298 $13,844,535
2029-30 $4,066,053 $541,684 $9,702,657 $14,310,394
2030-31 $4,208,365 $541,684 $10,042,516 $14,792,565
2031-32 $4,355,657 $541,684 $10,394,279 $15,291,620
The City of Watsonville’s contribution continues to remain the same, but the Watsonville Library’s distribution will increase each year due to reaching the agreed upon targeted level of funding based on the population served.

Table 2: Annual Budget/Distributions of Funds to the Libraries The estimated amount available from MOE contributions shall be distributed to the Santa Cruz City/County Library System and the Watsonville Library each year in the amounts shown below:

Fiscal Year
Santa Cruz
City/County Library
System
Watsonville Library Total
2025-26 $9,653,267 $1,483,789 $11,137,056
2026-27 $10,741,392 $1,516,999 $12,258,391
2027-28 $11,843,059 $1,551,379 $13,394,438
2028-29 $12,257,565 $1,586,970 $13,844,535
2029-30 $12,686,581 $1,623,813 $14,310,394
2030-31 $13,130,611 $1,661,954 $14,792,565
2031-32 $13,590,182 $1,701,438 $15,291,620
The LFA Board of Directors considered the Fifth Amendment at its June 25, 2025 meeting and directed staff to forward the amendment to member agencies for approval.

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 Fifth

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4 Amendment to Joint Exercise of Powers Agreement establishing the Santa Cruz County Library Financing Authority 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 is consistent with the following Council Strategic Goals:

Infrastructure & Environment
Efficient and Well-performing Government
Fiscal Health
Community Engagement & Well-being
FINANCIAL IMPACT:

The recommended actions have no impact on the General Fund; the City of Watsonville’s contribution continues to remain the same. The County Library Fund has sufficient funds available for the contribution in Fiscal Year 2025-26. County Staff anticipate the County Library Fund will have sufficient funds to pay the contribution in each of the remaining six years based on the three-year phase in and the 3.5% annual increase.

ALTERNATIVE ACTION:

The City Council may choose not to approve the amendment. However, such an action would cause financial hardship, and staff would need to seek alternative funding sources.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

None.

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Reso No. (CM)
Reference: Reso No.’s 176-96, 126-13, 10-16, 149-21 and 111-22 (Amend) Meeting Date: 082625 SWZ ______ TV ______ Library ______ 1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE APPROVING FIFTH AMENDMENT TO THE JOINT

EXERCISE OF POWERS AGREEMENT ESTABLISHING THE SANTA

CRUZ COUNTY LIBRARY FINANCING AUTHORITY BETWEEN THE

CITY OF WATSONVILLE, THE COUNTY OF SANTA CRUZ, THE CITY OF

SANTA CRUZ, THE CITY OF CAPITOLA, AND THE CITY OF SCOTTS VALLEY, TO ESTABLISH CONTRIBUTIONS COMMENCING FY 2025/26,

UPDATING BUDGET PROCESS AND DISBURSEMENT OF FUNDS,

MAINTAINING EXISTING PROCEDURES, EXTENDING TERM
THROUGH JUNE 30, 2032; AND AUTHORIZING AND DIRECTING THE

CITY MANAGER TO EXECUTE SAME

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 approving fifth amendment to agreement 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 because the action constitutes organizational or administrative activities of governments that will not result in direct or indirect physical changes 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 Fifth Amendment to Joint Exercise of Powers Agreement establishing the Santa Cruz County Library Financing Authority between the City of Watsonville, the County of Santa Cruz, the City of Santa Cruz, the City of Capitola, and the City of Scotts Valley, establishing contributions for FY 2025-26, updating budget

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Reso No. (CM)
Reference: Reso No.’s 176-96, 126-13, 10-16, 149-21 and 111-22 (Amend) Meeting Date: 082625
2 process and disbursement of funds, maintaining existing procedures, extending term through June 30, 2032, a copy of which Agreement is attached hereto and incorporated herein by this reference, is fair and equitable and is hereby ratified and approved.

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

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Library Financing JPA Fifth Amendment June 2025

FIFTH AMENDMENT TO THE JOINT EXERCISE OF POWERS

AGREEMENT ESTABLISHING THE SANTA CRUZ COUNTY LIBRARY

FINANCING AUTHORITY
WHEREAS, the Santa Cruz County Library Financing Authority (“the Financing Authority”) was created in 1996 for the purpose of financing library services and facilities; and WHEREAS, the Financing Authority was established pursuant to the Joint Exercise of Powers Law of the State of California, constituting Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (“the Act”); and WHEREAS, an original agreement entitled the “Joint Exercise of Powers Agreement Santa Cruz County Library Financing Authority” (“the Agreement”) was entered into by each of the parties in May 1996; and
WHEREAS, an agreement amending the original Agreement was entered into by each of the parties in November 2013; and
WHEREAS, a Second Amendment to the Agreement was entered into by each of the parties in December 2015; and
WHEREAS, a Third Amendment to the Agreement was entered into by each of the parties in June 2021; and
WHEREAS, a Fourth Amendment to the Agreement was entered into by each of the parties in July 2022; and
WHEREAS, a Fifth Amendment to the Agreement is necessary to increase the Maintenance of Effort contributions and extend the term seven years; and WHEREAS, said Section 9.5 of said Second Amendment authorizes amendments at any time, or from time to time, only by the unanimous consent of the parties.

NOW THEREFORE, the Board of Supervisors of the County of Santa Cruz, and the City Councils for the Cities of Santa Cruz, Watsonville, Scotts Valley and Capitola agree to further amend the Fourth Amendment as follows:

1. Article III – Contributions is hereby amended as follows:

Section 3.1 – Maintenance of Effort Contributions of the Cities. Commencing with the 2025- 26 fiscal year, the City of Santa Cruz and the City of Watsonville shall contribute a Maintenance of Effort (“MOE”) amount each year in the amounts shown below:

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Library Financing JPA Fifth Amendment June 2025
City of Santa Cruz Maintenance of Effort
Fiscal Year Amount
2025-26 $2,815,836
2026-27 $3,303,600
2027-28 $3,795,704
2028-29 $3,928,553
2029-30 $4,066,053
2030-31 $4,208,365
2031-32 $4,355,657
City of Watsonville Maintenance of Effort
Fiscal Year Amount
2025-26 $541,684
2026-27 $541,684
2027-28 $541,684
2028-29 $541,684
2029-30 $541,684
2030-31 $541,684
2031-32 $541,684
Section 3.2 – Maintenance of Effort Contributions of the County. Commencing with the 2025-26 fiscal year, and subject to the terms below, the County of Santa Cruz, on behalf of the Unincorporated Area and the cities of Capitola and Scotts Valley, shall contribute a MOE amount from the County Library Fund each year in the amounts shown below:

County Library Fund Maintenance of Effort
Fiscal Year Amount
2025-26 $7,779,536
2026-27 $8,413,107
2027-28 $9,057,050
2028-29 $9,374,298
2029-30 $9,702,657
2030-31 $10,042,516
2031-32 $10,394,279
If the Annual Net Amount of Allocated Taxes received by the County Library Fund is less than the annual MOE amount shown above, the County shall contribute the lesser amount as its annual MOE contribution. In no instance shall the County’s annual MOE contribution exceed the Annual Net Amount of Allocated Taxes received by the County Library Fund.

If the Annual Net Amount of Allocated Taxes received by the County Library Fund exceeds the annual MOE amount shown above, the County shall allocate any excess funds in the

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Library Financing JPA Fifth Amendment June 2025
County Library Fund for exclusive use on library improvements, major maintenance, or services at County Library Fund branches (including Capitola and Scotts Valley branches) with input by library staff and the cities of Capitola and Scotts Valley.

2. Article IV – Annual Budget/Disbursement of Funds is hereby amended as follows:

Section 4.3 – Disbursement of Funds. Commencing with the 2025-26 fiscal year, the amounts available from MOE contributions, taxes or fees, and carryover balances or surplus funds shall be disbursed as follows:
(A) The estimated amount available from MOE contributions shall be distributed to the Santa Cruz City/County Library System and the Watsonville Library each year in the amounts shown below:

Santa Cruz City/County Library System
Fiscal Year Amount
2025-26 $9,653,267
2026-27 $10,741,392
2027-28 $11,843,059
2028-29 $12,257,565
2029-30 $12,686,581
2030-31 $13,130,611
2031-32 $13,590,182
Watsonville Library
Fiscal Year Amount
2025-26 $1,483,789
2026-27 $1,516,999
2027-28 $1,551,379
2028-29 $1,586,970
2029-30 $1,623,813
2030-31 $1,661,954
2031-32 $1,701,438
These distribution amounts shall be adjusted proportionally should the County’s annual MOE contribution be reduced pursuant to Section 3.2.

3. Article VI – Term and Withdrawal is hereby amended as follows:

Section 6.1 – Term. The changes outlined in this Fifth Amendment shall commence on July 1, 2025 and will continue to remain in effect through June 30, 2032.

All other provisions of said Agreement shall remain the same.

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Library Financing JPA Fifth Amendment June 2025
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to be executed and attested by their proper officers thereunto duly authorized on the day and year stated below the name of each of the parties. This Fifth Amendment may be signed in counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same agreement.

COUNTY OF SANTA CRUZ Approved as to form:

By:

Dated:

CITY OF SANTA CRUZ Approved as to form:

By:

Dated:

CITY OF WATSONVILLE Approved as to form:

By:

Dated:

CITY OF CAPITOLA Approved as to form:

By:

Dated:

CITY OF SCOTTS VALLEY Approved as to form:

By:

Dated:

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 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: APPROVE FIRST AMENDMENT TO CONTRACT WITH PACIFIC CREST ENGINEERING, INC. FOR THE ON-CALL INSPECTION, TESTING, AND

GEOTECHNICAL ENGINEERING SERVICES AND EXTENDING CONTRACT TO JUNE 30, 2026.

RECOMMENDATION:

Adopt a resolution approving the First Contract Amendment with Pacific Crest Engineering, Inc., for OnCall Inspection, Testing, and Geotechnical Engineering Services, and extending the contract to June 30, 2026, and authorize and direct City Manager to execute the same.

BACKGROUND:

On February 25, 2022, the Public Works & Utilities Department released a Request for Qualifications (RFQ) for inspection, testing, and geotechnical engineering services on an on-call and as-needed basis. On March 24, 2022, four proposals were submitted for consideration and Pacific Crest Engineering, Inc., was recommended as the most qualified firm.

On May 24, 2022, the City Council adopted Resolution No. 94-22 (CM) approving a professional services contract with Pacific Crest Engineering, Inc., for on-call inspection, testing, and geotechnical engineering services to not exceed $250,000.

DISCUSSION:

The City of Watsonville frequently requires the services of specially trained and certified individuals to perform the following tasks on an on-call and as-needed basis:

Inspection, sampling & testing of:

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2  Concrete & masonry structures
 Earthwork projects
 Hot mix asphalt
Geotechnical engineering includes:
 Review of design documents
 Field observations
 Preparation of reports, recommendations, plans, and specifications The First Contract Amendment will extend the contract to June 30, 2026, with no changes to the scope of work and no changes to the compensation. This amendment will prevent delays with ongoing projects and provide additional time for City staff to prepare and issue a new Request for Qualification (RFQ) for On-Call Inspection, Testing, and Geotechnical Engineering Services, which has been delayed due to staff shortages in the Engineering Division. City staff recommend approving the First Contract Amendment with Pacific Crest Engineering, Inc.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

No additional California Environmental Quality Act (CEQA) review is required for the Contract Amendment with Pacific Crest Engineering, Inc. On May 24, 2022, the City Council declared the On-Call Inspection, Testing, and Geotechnical Engineering Services as exempt in accordance with CEQA Guidelines Section 15378 (b)(5), as it does not meet CEQA’s definition of a “project”. Further, the approval of the First Amendment to Contract for On-Call Inspection, Testing and Geotechnical Engineering Services is an administrative activity that would not have the potential to either (1) cause a direct physical change in the environment, or (2) cause a reasonably foreseeable indirect physical change in the environment.

Therefore, no CEQA action is required at this time.

STRATEGIC PLAN:

This amendment is consistent with the following Strategic Plan Goals:

Housing
Infrastructure & Environment
FINANCIAL IMPACT:

The costs associated with this contract are paid entirely by projects that will already have been approved in the budget and have funding appropriated.

ALTERNATIVE ACTION:

No reasonable alternatives are known at this time.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

None.

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1 Reso No. ______ (CM)
Reference: Reso No. 94-22 (Amend)
Meeting Date: 082625 SWZ ______ TV ______ PWU ______
RESOLUTION NO. (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE APPROVING THE FIRST AMENDMENT TO CONTRACT

BETWEEN THE CITY OF WATSONVILLE AND PACIFIC CREST
ENGINEERING, INC., A CORPORATION, FOR ON-CALL INSPECTION,

TESTING AND GEOTECHNICAL ENGINEERING SERVICES,
EXTENDING THE TERM FROM JUNE 30, 2025, TO JUNE 30, 2026; AND

AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE

THE SAME
WHEREAS, on May 24, 2022, the City Council adopted Resolution No. 94-22 (CM) awarding contract to Pacific Crest Engineering, Inc., for On-call Inspection, Testing, and Geotechnical Engineering Services in an amount not to exceed $250,000 and with an expiration date of June 30, 2025; and
WHEREAS, on-going projects continue to require on-call Inspection, Testing and Geotechnical Engineering Services; and
WHEREAS, staff need additional time to prepare and issue a new Request for Qualification (RFQ) for On-Call Inspection, Testing and Geotechnical Engineering Services; and
WHEREAS, this First Amendment will extend the term of the contract from June 30, 2025 to June 30, 2026.

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

1. No additional California Environmental Quality (CEQA) review is required for the Contract Amendment with Pacific Crest Engineering, Inc., a corporation. On May 24, 2022, the City Council declared the On-Call Inspection, Testing, and Geotechnical Engineering Services as exempt in accordance with CEQA Guidelines Section 15378 (b)(5), as it does not meet CEQA’s definition of a “project”. Further, the approval of the

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2 Reso No. (CM)
Reference: Reso No. 94-22 (Amend)
Meeting Date: 082625
First Amendment to Contract for On-Call Inspection, Testing and Geotechnical Engineering Services is an administrative activity that would not have the potential to either (1) cause a direct physical change in the environment, or (2) cause a reasonably foreseeable indirect physical change in the environment. Therefore, no CEQA action is required at this time.

2. This First Amendment to Contract between City of Watsonville and Pacific Crest Engineering, Inc., a corporation, a copy of which is attached hereto and incorporated herein by this reference, is hereby approved.

3. The City Manager is hereby authorized and directed to execute said First Amendment for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney.
********************************

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FIRST AMENDMENT TO CONSULTANT SERVICES CONTRACT

BETWEEN THE CITY OF WATSONVILLE
AND PACIFIC CREST ENGINEERING, INC.

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

RECITALS
WHEREAS, on May 24, 2022, the City Council adopted Resolution No. 94-22 (CM) and approved contract with Pacific Crest Engineering, Inc. for On-Call Inspection, Testing, and Geotechnical Engineering Services; and
WHEREAS, the original contract was in the amount of $250,000 with an expiration date of June 30, 2025; and
WHEREAS, a Request for Qualification (RFQ) was issued on February 25, 2022, asking for qualified consultants to assist the City with special inspection, testing and geotechnical services on an on-call and as-needed basis; and WHEREAS, the deadline for submittal of Request for Statement of Qualification was March 24, 2022; and
WHEREAS, a total of four (4) firms submitted qualification statements; these statements were reviewed by City staff, and a list was developed; and WHEREAS, the City Manager Pro Tempore has recommended that the proposal from Pacific Crest Engineering, Inc., in an amount not to exceed $250,000, be accepted as the best response; and
WHEREAS, the First Amendment of the Contract for Consultant Services is in the best interest of the City of Watsonville.

Docusign Envelope ID: F0AAA87F-084D-4F72-8D82-30BE5F771F39

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

Section 2. is hereby amended to add the following:
“Section 2. Term of Contract. The term of the Contract shall be extended to June 30, 2026.”
Section 3. and Exhibit “B” is hereby amended to read:
“All work shall be completed by June 30, 2026.”
All other terms and conditions of the Contract dated May 24, 2022, as amended, shall remain in full force and effect.

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

CITY OF WATSONVILLE PACIFIC CREST ENGINEERING, INC.

By___________________________ By______________________________ Tamara Vides, City Manager Matt Maciel, President/Principle Geotechnical Engineer
ATTEST:

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

By____________________________
Samantha W. Zutler, City Attorney
Docusign Envelope ID: F0AAA87F-084D-4F72-8D82-30BE5F771F39

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
WRITTEN BY: ASSISTANT PUBLIC WORKS & UTILITIES DIRECTOR GREEN RECOMMENDED BY: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: APPROVE CONSULTANT AGREEMENT WITH MICHAEL K. NUNLEY & ASSOCIATES, INC. FOR ENGINEERING SUPPORT SERVICES TO THE WASTEWATER DIVISION IN FY 25/26, IN AN AMOUNT NOT TO EXCEED $350,000
RECOMMENDATION:

Adopt a resolution awarding a contract to Michael K. Nunley & Associates, Inc. (MKN) for engineering support services to the Wastewater Division in FY 25/26, in an amount not to exceed $350,000; authorizing City Manager to execute the same; and approving a budget transfer within the Sewer Enterprise Fund to cover the cost of the contract.

BACKGROUND:

The Public Works Wastewater Division needs engineering support services for various existing and upcoming projects, ranging in size from small to large. MKN successfully provided support services to the division in fiscal year 24/25, and a new contract for on-call engineering support services is necessary for fiscal year 25/26.

DISCUSSION:

The City has been unable to fill the full-time Principal Engineer position allocated to support Wastewater Division projects. The division has several existing and upcoming projects that require engineering support including: Digester Cleaning and Piping Replacements project, Primary Influent Channel Rehabilitation, Boiler Replacement engineering services during construction, dewatering equipment pilot test program, among other on-call needs that may arise over the fiscal year.

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2 MKN was selected from the City’s list of qualified on-call water and wastewater design consultants. The list of qualified consultants was selected from the On-Call Water and Wastewater Design Services Request for Qualifications issued by the City in July 2023. Statements of qualifications were due August 9, 2023.

MKN was selected from the on-call list to provide as-needed services based on their expertise in wastewater-specific engineering and their experience in providing engineering support services to the City.

Staff therefore recommend that a consultant agreement be executed with MKN in an amount not to exceed $350,000 for as-needed engineering support services for the Wastewater Division.

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 awarding contract to Michael K. Nunley & Associates, Inc. for wastewater engineering support services 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.

If the engineering support services lead to a “project” as defined under CEQA, action on the CEQA determination for each specific project will be brought when the plans and specifications are brought before Council because any CEQA determination on any specific project would be speculative at this time.

STRATEGIC PLAN:

This contract is consistent with Strategic Plan Goal: Infrastructure & Environment FINANCIAL IMPACT:

The total cost of this agreement is $350,000. There is currently $175,000 available in Wastewater Division budget account 530-7307 – Expert and Consultation Services, requiring a budget transfer. A budget transfer in the amount of $175,000 from 530-7361 Other Contract Services to 530-7307 to cover the full cost of the agreement is requested.

ALTERNATIVE ACTION:

Council could elect not to award this contract, which would leave several on-going Wastewater Division projects without engineering support for fiscal year 25/26.

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3 ATTACHMENTS AND/OR REFERENCES (IF ANY):

None.

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1 Reso No. ______ (CM
Meeting Date: 082625 SWZ ______ TV ______ PWU ______
RESOLUTION NO. (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE AWARDING PROFESSIONAL SERVICES CONTRACT TO MICHAEL K.

NUNLEY & ASSOCIATES, INC., A CORPORATION, FOR ENGINEERING SUPPORT SERVICES FOR FISCAL YEAR 25/26, IN AN AMOUNT NOT TO EXCEED $350,000, AUTHORIZING AND DIRECTING THE CITY MANAGER

TO EXECUTE SAME AND AUTHORIZING A BUDGET TRANSFER OF
$175,000 FROM ACCOUNT 530-7361 OTHER CONTRACT SERVICES TO ACCOUNT 530-7307
WHEREAS, § 3-5.500 of the Municipal code provides that an RFP or RFQ process is found to be an effective and efficient way to procure professional services and procurement of professional services shall be based on proposals solicited from capable professionals and be evaluated based on a combination of factors including education, training, experience and demonstrated competence and professional qualifications necessary for the satisfactory performance of the services required; and WHEREAS, § 3-5.540 of the Municipal Code provides that contracts for professional services estimated to cost more than One Hundred Thousand and no/100ths ($100,000.00) Dollars must be awarded by the Council, and that the selection will be based on demonstrated competence and on the education, training and experience and professional qualifications necessary for the satisfactory performance of the services required, that cost will not be the only basis for selection, use a qualifications-based selection process as described in subdivision (a) of § 45271 of the California Government Code and negotiated as described in § 4528; and WHEREAS, a Request for Qualifications (RFQ) was issued on July 10, 2023, asking for qualified consultants to assist the City with on-call water and wastewater design services; and
1 All references to section numbers will be to the California Government Code

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2 Reso No. ______ (CM)
Meeting Date: 082625
WHEREAS, the deadline for submittal of Request for Statement of Qualifications was August 9, 2023; and
WHEREAS, a total of sixteen firms submitted a proposal; these proposals were reviewed by City staff; and
WHEREAS, the City Manager has recommended that the proposal from Michael K. Nunley & Associates, Inc., be accepted as the best response.

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 awarding contract to Michael K. Nunley & Associates, Inc. for wastewater engineering support services 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. The Council awards a contract to Michael K. Nunley & Associates, Inc., a corporation, for wastewater engineering support services for Fiscal Year 25/26, in an amount not to exceed $350,000.

3. That the Contract for Consultant Services between the City of Watsonville and Michael K. Nunley & Associates, Inc., a copy of which is attached hereto and incorporated herein by this reference, is hereby approved.

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3 Reso No. ______ (CM)
Meeting Date: 082625

4. The City Manager is hereby authorized and directed to execute said contract for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney.

5. That the budget transfer of $175,000 from Account # 530-7361(Other Contract Services) to Account # 530-7307 is hereby authorized.
**************************************

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EXHIBIT "A"
pg. 1 of 4

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EXHIBIT "A"
pg. 2 of 4

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EXHIBIT "A"
pg. 3 of 4

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EXHIBIT "A"
pg. 4 of 4

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EXHIBIT “C” pg. 1 of 1

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
WRITTEN BY: ENGINEERING ASSOCIATE GREGORIO
RECOMMENDED BY: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: AWARD CONTRACT TO MCKIM CORPORATION FOR RECONSTRUCTION OF BRIDGE STREET, PROJECT NO. ST-25-14816, IN THE AMOUNT OF $919,883.50, PLUS AN ADDITIONAL 15% CONTINGENCY ($137,975.00) FOR A TOTAL PROJECT AMOUNT OF $1,057,858.50
RECOMMENDATION:

Adopt a resolution awarding a contract to the lowest responsive bidder, McKim Corporation, for the Bridge St Pavement Restoration Project – Blackburn St to Beck St, No. ST-25-14816, in the amount of $919,883.50, plus an additional 15% contingency ($137,975.00) for a total project amount of $1,057,858.50.

DISCUSSION:

The Public Works & Utilities Department plans to reconstruct the pavement and curb ramps on Bridge St Blackburn St to Beck St. The pavement is deteriorated, and several curb ramps do not comply with the American Disabilities Act guidelines.

Project highlights and enhancements will include:
 Pedestrian enhancements, including reconstruction of curb ramps, improving accessibility  New pavement for a smooth and safe ride for bicyclists and vehicles and improved pedestrian safety at crosswalks; and
 New striping for improved visibility.

The City Council adopted Resolution No. 164-24 (CM) approving plans and specifications and called for bids on August 27, 2024. Bids were received for the Bridge St Pavement Restoration Project – Blacburn St to Beck, No. ST-25-14816, and publicly opened and read on August 7, 2025.

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2 The following bids were received:

Contractor Location Bid
McKim Corporation Gilroy, CA $919,883.50
Kraemer Engineering Inc Salinas, CA $923,862.33
Granite Rock Company San Jose, CA $1,015,888.00
QA Constructors San Francisco, CA $1,061,895.02
Radius Earthwork Inc Campbell, CA $1,277,926.30
Galeb Paving Inc. Saratoga, CA $1,338,000.00
Current Funding
This project is included in the FY2025-2026 approved budget as the Bridge Street Reconstruction. There are sufficient funds in the following accounts and additional appropriations are required Source Account
Measure R 0201-975-7837-14816
Measure D 0312-972-7837-14816
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

The project qualifies as Categorically Exempt under CEQA in accordance with CEQA Guidelines Section 15301, CE Class 1, maintenance of existing streets involving no expansion of capacity. Staff has filed a Notice of Exemption with the Santa Cruz County Clerk.

STRATEGIC PLAN:

Infrastructure & Environment
Public Safety
FINANCIAL IMPACT:

As Shown above, the Bridge St Pavement Restoration Project construction is fully funded in the 2025-2026 approved budget.

ALTERNATIVE ACTION:

The council could elect not to award the construction contract. The roadway would continue to deteriorate and the cost of rehabilitation in the future will continue to increase.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

1. Project Map

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Bridge St Pavement Restoration Project Work Area
Untitled layer
Bridge St Pavement
Restoration Project
Attachment 1

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Reso No. (CM)
Meeting Date: 082625 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE AWARDING CONSTRUCTION CONTRACT TO MCKIM

CORPORATION, A CORPORATION, FOR THE BRIDGE STREET
PAVEMENT RESTORATION PROJECT – BRIDGE ST. TO BECK ST.,
NO. ST-25-14816, IN THE AMOUNT OF $919,883.50, PLUS AN
ADDITIONAL 15% CONTINGENCY ($137,975), FOR A TOTAL
PROJECT AMOUNT OF $1,057,858.50; AND AUTHORIZING AND

DIRECTING THE CITY MANAGER TO EXECUTE SAME
WHEREAS, Resolution No. 164-24 (CM) adopted by the City Council of the City of Watsonville on August 27, 2024, approved plans and specifications and authorized calling for bids for the Bridge St. Pavement Restoration Project – Blackburn St. to Beck St., No. ST-25-14816; and
WHEREAS, the engineer’s estimate of probable construction cost was $1,141,233; and
WHEREAS, pursuant to Title 7, Chapter 14 of the City of Watsonville Municipal Code, the City issued a notice inviting bids and bids were received for the Bridge St.

Pavement Restoration Project – Blackburn St. to Beck St., Project No. ST-25-14816; and WHEREAS, bids that were submitted by the deadline, were publicly opened live online in the City’s electronic bidding procurement portal, on Thursday, August 7, 2025, at 3:05 P.M., and later tabulated by the Purchasing Officer for the consideration of the City Manager and submission to the City Council; and
WHEREAS, the City Manager has recommended that the bid from McKim Corporation, a corporation, [Contractor License #976269], for the Bridge St. Pavement Restoration Project – Blackburn St. to Beck St., No. ST-25-14816, in the amount of $1,057,858.50, be accepted as the lowest responsible and responsive bidder, which is below the engineer’s estimate for the project.

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Reso No. (CM)
Meeting Date: 082625 2

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

1. The project qualifies as Categorically Exempt under CEQA in accordance with CEQA Guidelines Section 15301, CE Class 1, maintenance of existing streets involving no expansion of capacity. Staff have filed a Notice of Exemption with the Santa Cruz County Clerk.

2. That the construction contract is hereby awarded to McKim Corporation, Inc., a corporation, for the Bridge St. Pavement Restoration Project – Blackburn St. to Beck St., o. ST-25-14816, in the amount of $919,883.50, plus an additional 15% contingency ($137,975) for unforeseen change orders for a total project amount of $1,057,858.50, in the form on file in the Office of the City Clerk.

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
WRITTEN BY: SENIOR FINANCIAL ANALYST DIAZ
RECOMMENDED BY: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: AUTHORIZATION INCREASING THE BLANKET PURCHASE ORDER WITH GRAINGER BY $5,000 FOR AN AMOUNT NOT TO EXCEED $104,999.99 RECOMMENDATION:

It is recommended that the City Council adopt a resolution authorizing increasing the blanket purchase order with Grainger by $5,000 for an amount not to exceed $104,999.99 BACKGROUND:

Staff recommends that the City Council adopt a resolution authorizing increasing the blanket purchase order with Grainger by $5,000 for an amount not to exceed $104,999.99 for the purchase of materials and supplies used to facilitate small jobs throughout many departments.

DISCUSSION:

The city established an open purchase order with Grainger for an amount not to exceed $99,999.99. From time to time, city operations require immediate purchases to facilitate small jobs under $10,000, and Grainger has been identified as a vendor commonly used for these small purchases. A request to increase this purchase order by $5,000 is necessary to pay for purchases that exceeded the $99,999.99 amount for fiscal year 2024-2025.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

Approval of a Grainger purchase order is not a project pursuant to the California Environmental Quality Act (CEQA) because it can be seen with certainty based on substantial evidence in the record that the approval constitutes a governmentfiscal activity that does notinvolve any commitment to any specific

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2 project that may result in a potentially significant physical impact on the environment (CEQA Guidelines section 15378(b)(4)).

STRATEGIC PLAN:

This purchase order supports the following Strategic Plan:

Infrastructure & Environment
FINANCIAL IMPACT:

Funds for this purchase order will be paid through the supplies and materials account in the operational budgets of the respective departments.

ALTERNATIVE ACTION:

No reasonable alternatives are known at this time.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

None

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1 Reso No. ______ (CM)
Meeting Date: 082625 SWZ ______ TV ______ PWU ______
RESOLUTION NO. (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE AUTHORIZING THE INCREASE OF THE BLANKET
PURCHASE ORDER WITH GRAINGER BY $5,000, IN AN AMOUNT NOT TO EXCEED $104,999.99 FOR FY 24-25
WHEREAS, purchases in excess of $100,000 must be approved by Council and require Council award of the contract by resolution per Section 3-5.460 of Chapter 5 (Purchasing Procedures) of Title 3 (Finance) of the Watsonville Municipal Code; and WHEREAS, City operations require immediate purchases from time to time to facilitate small jobs under $10,000; and
WHEREAS, Grainger has been identified as a vendor commonly used to facilitate small jobs throughout many departments; and
WHEREAS, it is in the City's best interest to allow the Finance Department to prepare open blanket purchase orders for said vendor to expedite work orders.

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

1. This action does not meet CEQA’s definition of a “project”, because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. The City Council hereby authorizes the increase of the blanket Purchase Order with Grainger by $5,000, in an amount not to exceed $104,999.99 for FY24-25. *****************************

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
WRITTEN BY: WASTEWATER DIVISION MANAGER TELLEZ
RECOMMENDED BY: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: EMERGENCY PURCHASE OF REPLACEMENT RETURN ACTIVATED SLUDGE (RAS) PUMPS FROM DXP ENTERPRISES – $169,858.14
RECOMMENDATION:

It is recommended that the City Council approve the emergency purchase of four (4) KSB D 150-315G 3EN Sewatec RAS pump with base, coupling, and driver from DXP Enterprises, in the amount of $169,858.14 (including taxes and shipping), as a sole source procurement. This pump will replace a failing 1997 PACO RAS pump, and its design minimizes the need for costly and time-consuming re-piping or fabrication work.

BACKGROUND:

The RAS system is a critical operational component of the wastewater treatment process, returning settled biological solids to the aeration basins. The existing PACO RAS pumps were installed in 1997 and have been experiencing performance degradation and failures. PACO is no longer in business, and replacement parts are unavailable and need to be fabricated.

Recent failures have increased operational risk, and any loss of RAS pumping capacity jeopardizes regulatory compliance and treatment plant stability. Immediate action is necessary to maintain service reliability and prevent system-wide disruptions.

DISCUSSION:

After evaluating replacement options, staff determined that the KSB Sewatec D 150-315G 3EN pump is the only viable unit capable of integrating with the existing 1997 piping and base infrastructure. This

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2 model provides the closest mechanical and hydraulic match to the original installation, thereby minimizing the amount of fabrication, demolition, and piping modifications required.

DXP Enterprises is the exclusive and sole-source distributor for KSB municipal pumps in California and Northern Nevada, per the attached sole source letter from KSB Inc. dated March 24, 2025. No other vendor is authorized to provide KSB products in our service area.

The total quote of $169,858.14 (including taxes and shipping) dated June 20, 2025, covers the pump, baseplate, couplings, motor, and associated hardware. Lead time is estimated at 20–22 weeks. Given the current equipment conditions, this purchase qualifies as an emergency procurement to prevent further system degradation or failure.

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 approving a sole source purchase for PACO replacement pumps for RAS system, four (4) KSB D 150-315G 3EN, Sewatec RAS pump with base, coupling, and driver 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 because the action constitutes organizational or administrative activities of governments that will not result in direct or indirect physical changes 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:

Infrastructure and Environment
Supports operational continuity, public health, and regulatory compliance through proactive emergency equipment replacement.

FINANCIAL IMPACT:

Total cost: $169,858.14 (including taxes and shipping)
Funding is available from Account 911-7855-14328 WWTP Infrastructure and Repair budget. No additional appropriation is required.

ALTERNATIVE ACTION:

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3 Due to the urgent nature of the equipment failure, the lack of parts availability for the existing system, and the infrastructure compatibility provided by KSB equipment, staff does not recommend delaying this purchase or pursuing alternative vendors.

ATTACHMENTS AND/OR REFERENCES (IF ANY):
 1) KSB Inc. Sole Source Letter dated March 24, 2025
 2) DXP Enterprises Quote #14809641 dated June 20, 2025

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Ref: Sole Source Letter
Ref: To whom it may concern,
March 24, 2025
To whom it may concern,
With this letter we would like to inform that DXP Enterprises company is our only exclusive representative for California and Northern Nevada for Municipal Water and Wastewater projects.

All inquiries, requests and quotations should be directed to DXP Enterprises as no other organization is contractually authorized to sell or distribute KSB equipment in this area.

This is valid for entire year of 2025.

Ramin Ghasemi
Ramin Ghasemi
Western Regional Manager
KSB, Inc.

Cell: 949 557 7458
Cc: Rep File
KSB, Inc., 4415 Sarellen Road, Henrico, VA 23231 • Tel. (804) 222-1818 • Fax (804) 226-6961 • www.ksbusa.com Attachment 1

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dxppacific.com
City of Watsonville
PACO replacement pumps
for RAS system

SCOPE OF SUPPLY
From: Andrew Jones
Attn: Alfonso Hernandez
Attachment 2

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dxppacific.com

PRICING SUMMARY
Attachment 2

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QUOTATION
Order Date
06/20/2025
Page
1 of 1
Quote Expires On 7/31/2025
Order Number
(14809641)
US

CITY OF WATSONVILLE
500 CLEARWATER LANE
WATSONVILLE, CA 95076
US
Customer ID:

Watsonville, CA 95076-5047
250 Main St
Bill To: Ship To:

CITY OF WATSONVILLE
831-768-3462
411298 Order Required Date 07/31/2025
PO Number Ship Route
WALTER.ROKOSZ
Taker SalesRep
Andrew Jones
Item ID
Item Description Remaining
Quantities
UOM Disp. Unit Size
Pricing
UOM Unit
Price
Unit Size
Price
14809641 Rev. 1
Extended
Ordered Allocated

4.000 0.000 151,012.00 4.000 EA (001) KSB D 150-315G 3EN EA 37,753.0000 Item Required Date: 7/21/2025 1.0 1.0 SEWATEC PUMP W/ BASE, CPLG. & DRIVER Horizontal solids handling pump designed to
deliver 1200 GPM at 18' of RAS.Pump fully
assembled on steel baseplate with tandem
mechanical seals, coupling and guard and 10 HP,
1200 RPM, 230-460/3/60 TEFC PE, 256T frame
NEMA motor.

SUB-TOTAL:

Total Lines: 1
151,012.00
TAX: 14,346.14
FREIGHT OUT : 4,500.00
USD
AMOUNT DUE: 169,858.14
** Pricing subject to change at time of shipment due to government imposed tariffs ** Pioneering Solutions in Industrial Distribution Since 1908 ALL SALES SUBJECT TO TERMS AND CONDITIONS AT WWW.DXPE.COM/TERMS.HTML Due to uncertainties in international trade policies, we must adapt to potential changes in tariffs, which are taxes on goods. These tariffs could increase our costs, requiring us to adjust prices to stay viable. Our goal is to maintain competitive pricing and high quality.

If we face tariff surcharges at shipment, we will pass these costs to you. This ensures fairness in our pricing, reflecting external factors beyond our control. We appreciate your understanding as we navigate these challenges.

FOB: Shipping point. Estimated lead time: 20 to 22 weeks to ship, ARO + transit time to jobsite & subject to material availability at time of order.

Prices quoted are valid until 7/31/2025 and subject to change without notice. $500.00 order minimum. Freight charges & sales tax are not included in prices quoted. DXP terms and conditions apply. Please note that all items that are ordered are subject to the manufacturer’s return policy. Restock & order cancellation fees will apply. We will do our best to meet the delivery dates specified and will notify you as soon as possible with any delays. Thank you for your patience and understanding.

Attachment 2

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dxppacific.com

TECH DATA
Attachment 2

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Data sheet
Doc. no.: TC250612A City of Watsonville
Quantity: 1
Sewatec D 150-315G 3EN
Operating data
Design
Standard-EN-flange drilled acc. to ASME FF
Driver, accessories
Requested flow rate 1200.00 US GPM
Requested developed head 18.00 ft
Pumped medium Water
Clean water
Pumped medium details Not containing chemical and
mechanical substances which
affect the materials
Max. ambient air temperature 68.0 °F
Min. ambient air temperature 68.0 °F
Fluid temperature 68.0 °F
Actual flow rate 1255.63 US GPM
Actual developed head 19.71 ft
Efficiency 72.0 %
Power absorbed 8.68 HP
Pump speed of rotation 1174 rpm
NPSH 3% 4.63 ft
Permissible operating
pressure

91.374 psi.g
Discharge press. 8.527 psi.g
Fluid density 62.303144 lb/ft³
Fluid viscosity 0.0015 in²/s
Suction pressure max. 0.000 psi.g
Mass flow rate 174.29 lbm/s
Max. power on curve 8.69 HP
Max. allow. mass flow 257.75 lbm/s
Shutoff head 53.16 ft
Min. allowable flow rate 449.57 US GPM
Min. allow. mass flow 62.40 lbm/s
Design Single system 1 x 100 %
Tolerances to ISO 9906 Class
3B; below 10 kW acc. to
paragraph 4.4.2
Pump standard KSB-Aggregate North
American execution
Design Baseplate mounted, longcoupled
Orientation Horizontal
Suction nominal dia. DN 150
Suction nominal pressure CL 125
Suction position axial
Suction flange drilled
according to standard
ASME B 16.1
Discharge nominal dia. DN 150
Discharge nominal pressure CL 125
Discharge position top (0°/360°)
Discharge flange drilled
according to standard
ASME B 16.1
Shaft seal 2 mech. seals in tandem
arrangement with oil reservoir
Shaft seal manufacturer KSB
Type MG
Material code SIC/SIC/NBR
Impeller type Single vane mixed flow (D)
Wear ring Wear plate
Impeller diameter 11.02 in
Free passage size 3.9 in
Direction of rotation from drive Clockwise
Bearing bracket size S03
Bearing type Anti-friction bearings
Lubrication type Grease
Color Ultramarine blue (RAL 5002)
KSB-blue
Coupling Manufacturer Flender
Coupling type Eupex N
Nominal size 140
Coupling guard type Heavy (ZN3230)
Guard size A2
Guard material Steel ST
Baseplate type Welded steel for Sewatec
Baseplate size H22
Motorside drill No
Driver type Electric motor
Drive standard mech. NEMA
Drive standard elec. NEMA
Drive supplied by without motor
Motor const. type F-2
Motor size 256T
Frequency 60 Hz
Rated power P2 10.06 HP
Available reserve 15.77 %
Number of poles 6
EAC Approval Yes
Attachment 2

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Data sheet
Doc. no.: TC250612A City of Watsonville
Quantity: 1
Sewatec D 150-315G 3EN
Materials G
General criteria for a water analysis: pH-value >= 6,5; chloride content (Cl) <=250 mg/kg. Chlorine (Cl2) <=0.6 mg/kg.

Packaging
Outdoor storage at -40 °C to +50°C for up to 3 months. Packet must be covered. No corrosion protection, only transport protection.

Nameplates
Notes
Pump casing (101) Cast iron A 48 Class 35 B
Wear Plate (135) High chrome white iron A 532
IIC 15% CrMo-Hc
Discharge cover (163) Cast iron A 48 Class 35 B
Shaft (210) Chrome steel A276 Type 420
Impeller (230) Cast iron A 48 Class 35 B
O-Ring (412) Nitrile rubber NBR
Screwed plug (903) Steel ST
Hexagon socket head cap
screw (914)
Chrome steel
IPPC Standard ISPM 15 Yes
Packaging category B1 Wooden or plywood
case, cover provided with
polyproylene cellular sheet,
outdoor storage up to 3
months
Packaging for storage Indoor
Packaging for transport Truck
Nameplates language International
Attachment 2

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Performance curve
Doc. no.: TC250612A City of Watsonville
Quantity: 1
Sewatec D 150-315G 3EN
0 200[US GPM]400 600 800 1000 1200 1400 1600 1800 2000
0 20
40 60
[ft]
Qmin Total developed head
0 200[US GPM]400 600 800 1000 1200 1400 1600 1800 2000
2 16
10 [ft] NPSH
0 200[US GPM]400 600 800 1000 1200 1400 1600 1800 2000
0 50 Efficiency [%]
0 200[US GPM]400 600 800 1000 1200 1400 1600 1800 2000

7.4 8.8

8.0 [HP] Power Input
Flow
Curve data
Speed of rotation 1174 rpm
Fluid density 62.303144 lb/ft³
Viscosity 0.0015 in²/s
Flow rate 1255.63 US GPM
Requested flow rate 1200.00 US GPM
Total developed head 19.71 ft
Requested developed head 18.00 ft
Efficiency 72.0 %
Power absorbed 8.68 HP
NPSH 3% 4.63 ft
Curve number K43043/0
Effective impeller diameter 11.02 in
Acceptance standard Tolerances to ISO 9906
Class 3B; below 10 kW
acc. to paragraph 4.4.2
Attachment 2

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Installation plan
Doc. no.: TC250612A City of Watsonville
Quantity: 1
Sewatec D 150-315G 3EN

3.94 DN1 DN2

15.63 12.4

9.84 15.16

4.72 16.34

4.92 0.71

23.62 20.87

25.59 31.5

0.0 8.54 24.31 ø
ø
ø
ø
1)
1) The inlet flange spacer is available as an accessory

0.24 1.14

5.59 .
.

5.91 33.09

47.24 59.06

68.5 ø

2.36 1.63
Drawing is not to scale Dimensions in in
Motor
required but not scope of supply
Baseplate
Connections
Standard-EN-flange drilled acc. to ASME FF
Coupling
Weight net
Connect pipes without stress or strain!
Dimensional tolerances for shaft axis height: DIN 747
For auxiliary connections see
separate drawing.

Motor size 256T
Motor power 10.06 HP
Number of poles 6
Speed of rotation 1173 rpm
Design Welded steel for Sewatec
Size H22
Material Steel ST
Leakage drain baseplate
(8B)
Rp1, Without
Baseplate drain piping
execution
Without
Foundation bolts M16x200 (required but not
scope of supply)
Suction nominal size DN1 DN 150 / ASME B 16.1
Discharge nominal size DN2 DN 150 / ASME B 16.1
Nominal pressure suct. CL 125
Rated pressure disch. CL 125
Coupling manufacturer Flender
Coupling type Eupex N
Coupling size 140
Spacer 0.00 in
Pump 551 lbm
Baseplate 176 lbm
Suction side accessory
Coupling 15 lbm
Coupling guard 9 lbm
Total 752 lbm
Attachment 2

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Installation plan
Doc. no.: TC250612A City of Watsonville
Quantity: 1
Sewatec D 150-315G 3EN
Dimensions without tolerances, middle tolerances to: ISO 2768-m Connection dimensions for pumps: EN735
Dimensions without tolerances - welded parts: ISO 13920-B Dimensions without tolerances - gray cast iron parts: ISO 8062-CT9 Attachment 2

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Connection plan
Doc. no.: TC250612A City of Watsonville
Quantity: 1
Sewatec D 150-315G 3EN
1M.1 6D
13B
13D
6B
8B
6B
1M.1
Connection schematic also applies to vertical installation.

Connections
1M.1 Pressure gauge connection G 1/2 Drilled and plugged. 6B Pumped liquid drain G 1 Drilled and plugged.
6D Pumped medium - filling / venting G 1 Drilled and plugged. 8B Leakage drain G 3/8 Drilled and plugged.
13B Oil drain G 3/8 Drilled and plugged.
13D Refill / venting G 1/2 Drilled and plugged.

Attachment 2

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CONTROLS &

AUTOMATION
At DXP, we understand the importance of optimizing
the performance of your rotating equipment.

Our Controls Engineers are ready to collaborate with you to design customized solutions to automate and control the process while providing advanced machine protection, improving effi ciency and increasing safety. We provide the latest technologies paired with over 115 years of pump hydraulic expertise using advanced control systems and integrated software.

ADVANCED CONTROL SYSTEMS
From simple control panels to custom designed systems with VFDs, PLCs and HMIs; our advanced control systems provide you with the capability to monitor and control processes from a single interface. Our systems allow you to measure, monitor and control pressure, temperature, and levels, as well as provide information about the process to SCADA. Our integrated software allows you to keep track of all the data collected from the system and make changes quickly and easily.

AUTOMATION
Automation of process controls reduces the risk to rotating equipment typically caused by operator error. With DXP, you can be confi dent that your processes are running smoothly and reliably, allowing you to focus on other areas of your business. Our automation solutions are designed to be cost-eff ective, allowing you to save money while still improving the process.

TRAINING & SUPPORT
DXP also off ers comprehensive training and support. Our staff can provide you with the skills and knowledge you need to operate your automation system with confi dence. We can also provide maintenance and troubleshooting services. Our team of Controls Engineers are ready to work with you in all phases of the operation.

PREFERRED VENDORS
Attachment 2

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P-100
P-200
VFD

VINYL CHOLORIDE

NITROGEN
TO USERS, QTY 5 REQ’D

NITROGEN

FROM SUPPLY

TO FRAC TANK
N2 SUPPLY
5 5
5 1”

TO REACTOR

TO INCENERATOR
V-100
N2 SUPPLY 1/2”
5 VFD SDV
210
PT
101
SY
400
SDV
200
SDV
100
RO
100
LSH
100
PCV
300
SV
310
LSL
100
PT
100
WATER

CLEANOUT
N2 SUPPLY
SY
210
SY
110
[email protected]
800-830-3972 | dxpe.com
Turn your trusted pump partner into
your trusted controls and automation
partner. Contact us today!
PUMP KNOWLEDGE | CUSTOMER CARE | INTEGRATION & AUTOMATION EXPERIENCE WHY Single-source partner and accountability
National presence, local support
Reduced downtime, maximized pump performance
Integrated automation needs from pump experts
Pump protection from common upsets
Integrating the process instruments to control
pressure, temperature, level and more
Building the electrical control panels to the
latest UL, NEC and NEMA codes
Integrating the control philosophy and
programming PLCs, HMIs and smart relays
Utilizing modern smart VFDs and leveraging our
hydraulic expertise to reduce costs
Controlling external devices;
valves, actuators to automate
the process
Using DXP as a single supplier for your business needs will save you time and money.

Streamline the purchasing process and reduce costs, allowing you to focus more on other aspects of your business.

PROCESS CONTROLS
Automated Processes
There are many automation
companies out there that can do a
good job, but do they understand
the intricacies of dynamic hydraulic
principles?
Optimized Performance
By fundamentally understanding
your process, DXP can provide a
cost-effective solution to maximize
efficiency while protecting the
equipment from premature failure.

The X is for Expert
Who better than the OEM of the
equipment to control and automate
your process? Leverage over
115 years of rotating equipment
expertise within one supplier.

Attachment 2

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dxppacific.com

TERMS & CONDITIONS
Attachment 2

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TERMS AND CONDITIONS OF SALE
(Unless Otherwise Specified in Writing)
NET DUE 30 DAYS FROM DATE OF INVOICE
These Terms and Conditions are part of each purchase order entered into with DXP Enterprises, Inc., whether or not attached to such Purchase Order (collectively "Order"). No terms or conditions, other than those stated herein, and no agreement or understanding, oral or written, in any way purporting to modify this Order, whether contained in Buyer’s purchase or shipping release form, or elsewhere, shall be binding on DXP Enterprises, Inc., its affiliates, parents or subsidiary entities (“Seller”) and any such attempted modifications are hereby rejected by Seller. All proposals, negotiations, and representations, if any, made prior, and with reference hereto, are merged herein and superseded hereby.

1. Payment and Taxes: Payment shall be made at par in legal tender of the United States of America and all charges are payable within net 30 days of the date of invoice. The amount of compensation payable to Seller shall be that set forth in Seller’s current price book at the time services are performed, unless otherwise agreed in writing by the parties. Prices quoted by Seller do not include sales, VAT, use or similar taxes and such taxes, where applicable shall be added to the quoted prices and invoiced accordingly. All Orders are subject to the continued review of the Seller and if, in its opinion, the financial position of the Buyer has so changed prior to delivery as to render the Seller insecure, the Seller may suspend production and/or refuse to make delivery pending satisfactory modification of the terms of payment. In the event the Buyer’s account with Seller becomes delinquent, Seller has the right to revoke any and all discounts previously applied in arriving at the net invoice price. Upon revocation, the full invoice price without discount shall become immediately due and owing and subject to collection, with interest at the maximum rate allowed by law. If in the event it becomes necessary to place the account in the hands of an attorney for collection, Buyer agrees to pay reasonable attorney’s fees incurred by the Seller. All federal, state, dominion, provincial or municipal taxes now or hereafter imposed in respect to the goods sold by the Seller and/or the processing, manufacture, delivery, transportation and/or proceeds of the goods herein specified shall be for the account of the Buyer and if taxes are required to be paid by the Seller, the amount thereof shall be added to and become part of the price payable by the Buyer.

2. Agreement, Integration and Conflict of Terms: These terms and conditions, together with any special conditions expressly incorporated thereto in the quotation or sales form, are to govern any sale by the Seller (“Seller”) identified on the other side of this form or on the purchase order attached to these terms and conditions (collectively, the “Order”). This writing is an offer or counteroffer by Seller to sell the goods and/or services set forth on the order and is expressly made conditional on Buyer’s acceptance of these terms and conditions. Acceptance by Buyer is expressly limited to these terms and conditions.

Any additional or different terms and conditions contained in Buyer’s purchase order or other communication shall not be effective or binding upon Seller unless specifically agreed to in writing by Seller; Seller hereby objects to any such conditions, and the failure of Seller to object to specific provisions contained in any purchase order or other communication from Buyer shall not be construed as a waiver of these terms and conditions nor an acceptance of any such provisions. This Order supersedes all prior negotiations, representations, or agreements, either written or oral, between the parties and, further, can only be altered, modified, or amended with the express written consent of Seller.

3. Quotation, Withdrawal, Expiration: Quotes are valid for thirty (30) days from the date of issuance unless otherwise provided therein. Seller reserves the right to cancel or withdraw the quotation at any time with or without notice or cause prior to acceptance by Buyer.

4. Prices: Prices apply to the specific quantities stated on the quotation or sales form. Unless otherwise agreed to in writing by Seller, all prices are Ex Works Seller's shipping location (as defined in accordance with the latest version of Incoterms), and do not include transportation costs or charges relating to transportation, which costs and charges shall be solely the responsibility of Buyer unless otherwise agreed in writing by Seller.

5. Delivery, Risk of Loss: Delivery dates are estimates, and time is not of the essence for the delivery dates. All shipments will be made Ex Works Seller’s shipping location unless otherwise specified. Seller shall not be responsible to Buyer for any loss, whether direct or indirect, arising out of or relating to any failure of the goods to be delivered by the estimated delivery date. In the absence of specific instructions, Seller will select the carrier for shipment. Risk of loss for services shall pass to Buyer at completion of services. Title and risk of loss for goods shall pass to Buyer upon completion of the agreed Incoterm. Buyer shall reimburse Seller for the additional cost of Seller’s performance resulting from inaccurate or lack of delivery instructions, or by any act or omission on Buyer’s part. Any such additional cost may include, but is not limited to storage, insurance, protection, re-inspection and delivery expenses. Buyer further agrees that any payment due on delivery shall be made on delivery into storage as though the goods had been delivered in accordance with the order.

6. Warranty: Seller warrants that the goods manufactured by Seller sold to Buyer hereunder (with the exception of "wear parts" or consumables all of which are not warranted except as otherwise provided in the quotation or sales form) will be (i) of the quantity and type agreed in the order, (ii) built in accordance with the specifications referred to in the quotation or sales form, if such specifications are expressly made a part of this Agreement, and (iii) free from defects in material and workmanship (the “Warranty”). The Warranty shall be in effect for a period of the earlier of twelve (12) months from the date of installation or eighteen (18) months from the date of shipment (which date of shipment shall not be greater than thirty (30) days after receipt of notice that the goods are ready to ship), and services shall be warranted against defects in workmanship for thirty (30) days from completion of services (the “Warranty Period”).

Seller shall, at its option and expense, either repair, replace, or refund amounts paid for any goods that fail to conform to the Warranty. Seller shall, at its option and expense, either re-perform or refund amounts paid for any services that fail to conform to the Warranty. In no case shall Seller be obligated to remove the defective goods or install the replaced or repaired goods, and Buyer shall be responsible for providing ready access to the goods and areas for warranty work, and all other associated costs, including, but not limited to, service costs, shipping fees, and expenses. Seller shall have complete discretion as to the method or means of repair or replacement. Buyer’s failure to comply with Seller’s repair or replacement directions shall constitute a waiver of its rights and render all warranties void. Any goods repaired or replaced under the Warranty are warranted only for the balance of the Warranty Period on the goods that were repaired or replaced. The Warranty is conditioned on Buyer giving written notice to Seller of any goods that fail to meet the Warranty within ten (10) days of the date when any defects first become apparent. Seller shall have no warranty obligations to Buyer with respect to any goods or parts of a good that: (a) have been repaired by parties other than Seller or without Seller’s written approval; (b) have been subject to misuse, misapplication, neglect, alteration, accident, or physical damage; (c) have been used in a manner contrary to Seller’s or the manufacturer’s instructions for installation, operation and maintenance; (d) have been damaged from ordinary wear and tear, corrosion, or chemical attack; (e) have been damaged due to abnormal conditions, vibration, failure to properly prime, or operation without flow; (f) have been damaged due to a defective power supply or improper electrical protection; or (g) have been damaged resulting from the use of accessory equipment not sold by Seller or not approved by Seller in connection with goods supplied by Seller hereunder. In any case of goods not manufactured by Seller, there is no warranty from Seller; however, Seller will extend to Buyer any warranty received from Seller’s supplier of such goods.

THE FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU OF ANY AND ALL OTHER EXPRESS, ORAL, OR IMPLIED

WARRANTIES, GUARANTEES, CONDITIONS OR TERMS OF WHATEVER NATURE RELATING TO THE GOODS AND

SERVICES PROVIDED HEREUNDER, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF

MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WHICH ARE HEREBY EXPRESSLY DISCLAIMED AND EXCLUDED. BUYER’S EXCLUSIVE REMEDY AND SELLER’S AGGREGATE LIABILITY FOR BREACH OF ANY OF THE FOREGOING WARRANTIES ARE LIMITED TO THE REPAIR, REPLACEMENT, RE-PERFORMANCE, OR REFUND.

7. Inspection: Buyer shall have the right to inspect the goods upon their receipt. Buyer shall notify Seller in writing of any nonconformity of the goods with this Agreement within three (3) days from receipt by Buyer, and Seller shall promptly remedy the non-conformance in accordance with section 6 herein. Failure to give such applicable notice shall constitute an irrevocable acceptance of the goods by Buyer.

8. Indemnity: Buyer shall release, indemnify, defend, and hold harmless Seller, its parent, subsidiaries, and related companies, and the employees, agents, consultants, representatives, and officers, respectively (“Seller Group”), from and against any and all claims, demands, and causes of action for personal injury (including death) and property damage to the extent caused by the negligent acts or omissions of Buyer Group. Seller shall release, indemnify, defend, and hold harmless Buyer, its parent, subsidiaries, and related companies, and the employees, agents, consultants, representatives, and officers, respectively (“Buyer Group”), from and against any and all claims, demands, and causes of action for personal injury (including death) and property damage to the extent caused by the negligent acts or omissions of Seller Group.

9. Seller’s Limitation of Liability: IN NO EVENT SHALL SELLER’S LIABILITY ARISING UNDER OR RELATED TO THIS AGREEMENT EXCEED THE AMOUNT PAID BY BUYER UNDER THIS AGREEMENT. SELLER SHALL HAVE NO

LIABILITY FOR LOSS OF PROFIT, LOSS OF ANTICIPATED SAVINGS OR REVENUE, LOSS OF INCOME, LOSS OF

BUSINESS, LOSS OF PRODUCTION, LOSS OF OPPORTUNITY, LOSS OF USE, LOSS OF REPUTATION, INDIRECT,

CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES, HOWSOEVER ARISING, WHETHER IN

CONTRACT, TORT, OR OTHERWISE, REGARDLESS OF BREACH OF CONTRACT OR BREACH OF WARRANTY, OR WHETHER SELLER HAS BEEN APPRISED OF SUCH LOSSES IN ADVANCE.

10. Force Majeure: Seller may cancel or suspend this Agreement and Seller shall have no liability for any failure to deliver or perform, or for any delay in delivering or performing any obligations, due to acts or omissions of Buyer and/or its contractors, or due to circumstances beyond Seller’s reasonable control, including but not limited to acts of God, fire, flood or other natural disasters, war and civil disturbance, riot, acts of governments, terrorism, disease, pandemics, endemics, currency restrictions, labor shortages or disputes, unavailability of materials, fuel, power, energy or transportation facilities, or for failures of suppliers or subcontractors to effect deliveries, in which case the time for performance shall be extended in an amount equal to the excused period, provided that Seller shall have, as soon as reasonably practicable after it has actual knowledge of the beginning of any excusable delay, notified Buyer of such delay, of the reason therefor and of the probable duration and consequence thereof. Seller shall use its commercially reasonable efforts to eliminate the cause of the delay, interruption or cessation and to resume performance of its obligations hereunder without undue delay. Cancellation: Except as otherwise provided in this Agreement, no order may be cancelled unless requested in writing by either party and accepted in writing by the other. In the event of a cancellation by Buyer, Buyer shall, within thirty (30) days of such cancellation, pay Seller a cancellation fee, which shall include all costs and expenses incurred by Seller up to the receipt of the request for cancellation including, but not limited to, all commitments to its suppliers, subcontractors and others, all fully burdened labor and overhead expended by Seller, plus a reasonable charge for profit. Return of goods shall be in accordance with Seller’s most current Return Materials Authorization and subject to a minimum twenty percent (20%) restocking fee.1RWZLWKVWDQGLQJWKHIRUHJRLQJDOOLWHPVWKDWDUH RUGHUHGDUHVXEMHFWWRWKHPDQXIDFWXUHU
VUHWXUQSROLF\DQGQRWUHWXUQDEOHDIWHUDSHULRGRI\HDU5HVWRFNDQGRUGHU FDQFHOODWLRQIHHVZLOODSSO\
Notwithstanding anything to the contrary herein, should the financial responsibility or condition of Buyer is such that Seller in good faith deems itself insecure, if Buyer becomes insolvent, if a material change in the control of Buyer occurs, if Buyer fails to make any payments in accordance with the terms of its contract with Seller, in the event of the commencement by or against Buyer of any voluntary or involuntary proceedings in bankruptcy or insolvency, or in the event Buyer shall be adjusted bankrupt, make a general assignment for the benefit of its creditors, or if a receiver shall be appointed on account of Buyer’s insolvency, or in the event Buyer does not correct or, if immediate correction is not possible, commence and diligently pursue the cure of any default of Buyer to comply with any of the provisions or requirements of this Agreement within ten (10) days after being notified in writing of such default by Seller, Seller may, by written notice to Buyer, without prejudice to any other rights or remedies which Seller may have, terminate its further performance of this Agreement. In the event of such termination, Seller shall be entitled to receive payment as if Buyer had cancelled the Agreement as per the preceding paragraph. Seller may also cease the performance of services or stop goods in transit and defer or decline to make delivery of goods, except upon receipt of satisfactory security or cash payments in advance. Seller may nevertheless elect to complete its performance of this Agreement by any means it chooses. Buyer agrees to be responsible for any additional costs incurred by Seller in so doing. Upon termination of this Agreement, sections 9 and 10 herein and the other rights, obligations, and liabilities of the parties which shall have arisen or been incurred under this Agreement prior to its termination shall survive such termination.
Drawings: All drawings are the property of Seller. Seller does not supply detailed or shop working drawings of the goods; however, Seller will supply necessary installation drawings. The drawings and bulletin illustrations submitted with Seller's quotation show general type, arrangement, and approximate dimensions of the goods to be furnished for Buyer’s information only and Seller makes no representation or warranty regarding their accuracy. Unless expressly stated to the contrary within the quotation or sales form, all drawings, illustrations, specifications, or diagrams form no part of this Agreement.
Proprietary Information, Injunction: Seller’s designs, illustrations, drawings, specifications, technical data, catalogues, “know-how,” economic or other business or manufacturing information (collectively “Proprietary Information”) disclosed to Buyer shall be deemed proprietary and confidential to Seller. Buyer agrees not to disclose, use, or reproduce any Proprietary Information without first having obtained Seller’s express written consent. Buyer’s agreement to refrain from disclosing, using or reproducing Proprietary Information shall survive completion of the Agreement. Buyer acknowledges that its improper disclosure of Proprietary Information to any third party will result in Seller’s suffering irreparable harm. Seller may seek injunctive or equitable relief to prevent Buyer’s unauthorized disclosure. Information disclosed by Buyer hereunder shall not be considered confidential or proprietary to Buyer unless otherwise agreed to in writing by Seller prior to Buyer’s disclosure.
Installation and Start-up: Unless otherwise agreed to in writing by Seller, installation shall be the sole responsibility of Buyer. Where start-up service is required with respect to the goods purchased hereunder, it must be performed by Seller's authorized personnel or agents; otherwise, the Warranty is void. Notwithstanding anything herein to the contrary, in the event Buyer has engaged Seller to provide any personnel for start-up supervision, such personnel will function in a supervisory capacity only and Seller shall have no responsibility for the quality of workmanship of the installation. In any event, Buyer understands and agrees that it shall furnish, at Buyer's expense, all necessary foundations, supplies, labor, and facilities that might be required to install and operate the goods. Specifications: Changes in specifications requested by Buyer are subject to approval in writing by Seller. In the event such changes are approved, the price for the goods and the delivery schedule shall be changed to reflect such changes. Buyer Warranty: Buyer warrants the accuracy of any and all information relating to the details of its operating conditions, including temperatures, pressures, and where applicable, the nature of all hazardous materials. Seller can justifiably rely upon the accuracy of Buyer’s information in its performance. Should Buyer’s information prove inaccurate, Buyer agrees to reimburse Seller for any losses, liabilities, damages, and expenses that Seller may have incurred as a result of any inaccurate information provided by Buyer to Seller. Product Recalls: Buyer shall take all reasonable steps (including, without limitation, those measures prescribed by the Seller) to: (a) ensure that all customers of the Buyer and authorized service personnel who own or use affected products are advised of every applicable recall campaign of which the Buyer is notified by the Seller; and (b) ensure that modifications of which the Buyer is notified by the Seller, by means of service campaigns, recall campaigns, service programs or otherwise, are made with respect to any products sold or serviced by Buyer to its customers or authorized service personnel. The reimbursement of Buyer for parts and labor used in making those modifications shall be as set forth in the campaign or program instructions. Except as described herein, the Buyer shall not disclose to any other third party the information contained in service campaign, recall campaign or service program literature without the prior consent of the Seller. Should Buyer fail to perform any of the actions required under this section, Buyer shall be liable to Seller for any costs, liabilities, and damages resulting therefrom.
Governing Law: THE TERMS OF THIS AGREEMENT AND ALL RIGHTS AND OBLIGATIONS HEREUNDER

SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS (WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS). THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL NOT BE GOVERNED BY THE 1980 U.N. CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS.
California Safe Drinking Water and Toxic Enforcement Act (commonly known as “Prop 65”): If Seller provides Buyer with a warning label or notice showing that the goods provided herein contain any of the chemicals listed by the State of California and the Safe Drinking Water and Toxic Enforcement Act to be determined to cause cancer, birth defects or other reproductive harm (“Warning Notice”), Buyer agrees to maintain any Warning Notice that may be affixed to the goods and to provide all such Warning Notices to all Buyer’s customers, if any. Buyer agrees to defend, indemnify and hold Seller harmless for any claim, damage, loss, expenses, fines, penalties, legal fees and any other additional cost arising out of Buyer’s breach of the obligations set forth in this section 14.
Titles: The section titles are for reference only and shall not limit or restrict the interpretation or construction of this Agreement.
Waiver: Seller’s failure to insist, in any one or more instances, upon Buyer’s performance of this Agreement, or to exercise any rights conferred, shall not constitute a waiver or relinquishment of any such right or right to insist upon Buyer’s performance in any other regard.
Severability: If any term herein should prove invalid or otherwise unenforceable, such term shall be excluded to the extent of such invalidity or unenforceability but shall not affect the validity or continuing force and effect of any other provision of this Agreement. Such term shall be deemed modified and replaced by a valid and enforceable term that most closely expresses the intent of the parties.

Additional Conditions Applicable to Export Sales
Seller will not provide any certification or other documentation nor agree to any contract provision or otherwise act in any manner which may cause Seller to be in violation of United States law, including but not limited to the Export Administration Act of 1979 and regulations issued pursuant thereto. This Order shall be construed in accordance with United States law.

All Orders shall be conditional upon granting of export licenses or import permits which may be required. Buyer shall obtain at its own risk any required export license and import permits and Buyer shall remain liable to accept and pay for material if licenses are not granted or are revoked.

Unless otherwise specified on the face hereof, all international sales shall be EXW Seller’s premises (INCOTERMS 2010), as modified by this Order.

Attachment 2

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Reso No. (CM)
Meeting Date: 082625 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO. __________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE

APPROVING A SOLE SOURCE PURCHASE ORDER WITH DXP
ENTERPRISES, INC., LIMITED LIABILITY COMPANY, FOR THE

EMERGENCY PURCHASE OF PACO REPLACEMENT PUMPS FOR RAS
SYSTEM, (4) KSB D 150-315G 3EN SEWATEC RAS PUMP WITH BASE, COUPLING, AND DRIVER, IN AN AMOUNT NOT TO EXCEED $169,858.14;

AND AUTHORIZING AND DIRECTING CITY MANAGER TO EXECUTE
SAME (FUNDED FROM ACCOUNT 911-7855-14328 WWTP

INFRASTRUCTURE AND REPAIR)
WHEREAS, the City has a need to replace its current pump systems; and WHEREAS, competitive bidding requirements for the purchase of supplies, equipment and non-personal contractual services and the sale of personal property are set forth in Chapter 5 of Title 3 of the Municipal Code; and WHEREAS, subdivision (c) of § 3-5.210 exempts supplies and materials which are unique, available only from one source, or sought to match existing equipment or supplies already in use (also known as a sole source purchase); and WHEREAS, DXP Enterprise, Inc. is the sole provider to sell or distribute KSB equipment for California and Northern Nevada for Municipal Water and Wastewater projects and equipment; and
WHEREAS, the City received a quote from DXP Enterprise, Inc., for the purchase of PACO replacement pumps for RAS system, four (4) KSB D 150-315G 3EN, Sewatec RAS pump with base, coupling, and driver, in the amount of $169,858.14 (including taxes and shipping).

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

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Reso No. (CM)
Meeting Date: 082625 2

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 approving a sole source purchase for PACO replacement pumps for RAS system, four (4) KSB D 150-315G 3EN, Sewatec RAS pump with base, coupling, and driver 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. Even if the approval of the purchase of PACO replacement pumps for RAS system, four (4) KSB D 150-315G 3EN, Sewatec RAS pump with base, coupling, and driver were a “project,” it would be exempt from CEQA under CEQA Guidelines Section 15301 because it consists of the maintenance of an existing facility with no expansion of the existing use.

2. The Council finds that the purchase of PACO replacement pumps for RAS system, four (4) KSB D 150-315G 3EN, Sewatec RAS pump with base, coupling, and driver is available from one source that meets the needs of the City (also known as a sole source purchase).

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

4. This sole source purchase of PACO replacement pumps for RAS system, four (4) KSB D 150-315G 3EN, Sewatec RAS pump with base, coupling, and driver in an amount not to exceed $169,858.14 (including taxes and shipping) is hereby authorized.

5. That the Council hereby approves the Purchasing Agreement between the City of Watsonville and DXP Enterprise, Inc., for the purchase of PACO replacement pumps for RAS system, four (4) KSB D 150-315G 3EN, Sewatec RAS pump with base,

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Reso No. (CM)
Meeting Date: 082625 3
coupling, and driver in an amount not to exceed $169,858.14 (including taxes and shipping).

6. That the City Manager is hereby authorized and directed to execute purchase order for and on behalf of the City of Watsonville, including any extensions or amendments thereof in order to implement this purchase. ********************************

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
WRITTEN BY: WASTEWATER DIVISION MANAGER TELLEZ
RECOMMENDED BY: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: CONTRACT AUTHORIZATION FOR PURCHASE AND INSTALLATION OF

AUMA ACTUATORS
RECOMMENDATION:

It is recommended that the City Council approve a contract in the amount of $152,033.83 with Industrial Service Solutions (ISS) for the purchase and installation of AUMA actuators, funded from accounts 710- 530-7324, 710-532-7324, and 710-531-7324.

BACKGROUND:

The City’s wastewater treatment and pumping facilities rely on actuators for critical valve control. Several actuators have reached the end of their useful life and require replacement to maintain safe and efficient operation.

AUMA actuators are preferred because their control units are separated from the actuator drive mechanism, allowing operators and maintenance technicians to work outside of confined spaces, reducing safety risks and improving accessibility.

Industrial Service Solutions is the exclusive authorized service center for AUMA products in Northern California, as confirmed by the attached sole source letter from AUMA Actuators, Inc. While staff sought matching quotes from other actuator retailers, no responses were received.

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2 DISCUSSION:

The proposed scope includes the purchase and installation of multiple AUMA actuators and supporting components at various treatment facility locations. The quote also covers labor, vault adaptation work, travel, and per diem.

The total cost, including sales tax, is $152,033.83 as quoted by ISS (Quote No. 39216 WATSONVILLE REV 2).

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

This action is not a “project” as defined under CEQA and is therefore not subject to environmental review.

STRATEGIC PLAN:

Efficient and Well-Performing Government – Improves operational efficiency and safety by upgrading essential wastewater infrastructure.

Infrastructure & Environment – Enhances long-term reliability of critical water infrastructure.

FINANCIAL IMPACT:

The contract will be funded from the following accounts:
 710-530-7324 – Wastewater Operations, amount $55,358
 710-532-7324 – Water Recycling Operations & Maintenance, amount $84,983.84  710-531-7324 – Wastewater Collections, amount $11,691.99 There is no impact to the General Fund.

ALTERNATIVE ACTION:

Council may choose not to approve the contract. This would delay critical actuator replacements and increase the risk of operational disruptions and confined space entry safety hazards.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

1. Industrial Service Solutions Quote (39216 WATSONVILLE REV 2)

2. AUMA Sole Source Letter

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QUOTATION
Sold To: Ship To:

CITY OF WATSONVILLE
250 Main St
Watsonville, CA 95076-5047

CITY OF WATSONVILLE
250 MAIN STREET
WATSONVILLE, CA 95076
Customer Number:
0039216
6/11/2025
Terms: Net 30 Days
98-0001467
Quote Date:
8/15/2025

Page 1 of 2 ends

Submitted By:

Quote Number:

Quote Expires:

Please reference quote number on all orders placed.

Goods may incur tariffs that are not incorporated into our pricing.

Tariffs incurred will be passed to and become the responsibility of the customer.

Ship Via EXW Freight Terms Freight Account
Best Way
Customer Project
Item/Description Unit Price Amount Ordered
EACH 15,950.00 2.00 7,975.00
LOCATION 1 & 2:

SA7.6/GS63.3/AC01.2 CONTROLS --15 FOOT CABLE WALL MOUNT 8-10 WEEKS ARO--CANNOT BE CANCELED RETURNED OR

EXCHANGED-SHIPPING PPA

NSL-ACTUATOR
EACH 38,425.00 5.00 7,685.00
LOCATION 3-7:

SA10.2/GK14.2/AC01.2
8-10 WEEKS ARO-CANNOT BE CANCELED RETURNED OR EXCHANGEDSHIPPING PPA

NSL-ACTUATOR
EACH 19,095.00 3.00 6,365.00
LOCATION 8-10:

AUMA SAR7.2/GS50.3/AC01.2
8-10 WEEKS ARO-CANNOT BE CANCELED RETURNED OR EXCHANGEDSHIPPING PPA

NSL-ACTUATOR
EACH 7,360.00 1.00 7,360.00
LOCATION 11:

SA14.2/AC01.2
8-10 WEEKS ARO-CANNOT BE CANCELED RETURNED OR EXCHANGEDSHIPPING PPA

NSL-ACTUATOR
EACH 17,460.00 1.00 17,460.00
LOCATION VAULT:

SAR07.6/GS200.3/AC01.2-50 ft CABLE WALL MOUNT CONTROLS

NSL-ACTUATOR
EACH 7,920.00 1.00 7,920.00
ESTIMATED LABOR FOR 2 TECHS
FS-ACT
EACH 1,485.00 1.00 1,485.00
ESTIMATED LABOR: VAULT LOCATION
FS-ACT
EACH 30,000.00 12.00 2,500.00
ESTIMATED ADAPTION: MACHINE NUTS AND PLATES
/LABOR-04
Continued
Attachment 1

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QUOTATION
Sold To: Ship To:

CITY OF WATSONVILLE
250 Main St
Watsonville, CA 95076-5047

CITY OF WATSONVILLE
250 MAIN STREET
WATSONVILLE, CA 95076
Customer Number:
0039216
6/11/2025
Terms: Net 30 Days
98-0001467
Quote Date:
8/15/2025

Page 2 of 2 ends

Submitted By:

Quote Number:

Quote Expires:

Please reference quote number on all orders placed.

Goods may incur tariffs that are not incorporated into our pricing.

Tariffs incurred will be passed to and become the responsibility of the customer.

Ship Via EXW Freight Terms Freight Account
Best Way
Customer Project
Item/Description Unit Price Amount Ordered
EACH 336.00 1.00 336.00
Truck and Mileage
/TRUCK MILEAGE
EACH 1,200.00 2.00 600.00
Hotel & Per Diem
/HOTEL & PER DIEM
This agreement is governed by ISS Terms, Conditions, and Warranties of Sale, which can be found at this website http://2025-02-tc.iss-na.com/ and are hereby incorporated by reference. The ISS Terms, Conditions, and Warranties of Sale are also available upon written request to [email protected]. The information provided within this document is confidential and / or proprietary in nature and is hereby protected from further disclosure.

Net Order: 139,231.00
Sales Tax: 12,802.83
Order Total: 152,033.83
I have read and understand the ISS Terms, Conditions, and Warranties of Sale governing this agreement and certify that their terms and conditions are agreed to as if printed above my signature. There are no oral or other representations not included herein. I certify that by executing this agreement that I have the authority to bind the Buyer as their agent and am hereby doing so.

By: _____________________________________________ Date: _________________________________ Attachment 1

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AUMA Actuators, Inc.  Suite B 15012 Red Hill Ave.  Tustin, CA 92780 USA Phone: +1 714-247-1250  Fax: +1 714-247-1255  www.auma-usa.com Lido Flores
Western Regional
Manager15012 Red Hill Ave
Suite B Tustin, CA 92780
Phone: (714) 247-1250
Cell: 714-318-8596
E-mail: [email protected]
Date: 06/24/2025

Page 1 of 1 ends

To: Ruben Tellez
City of Watsonville
500 Clearwater Ln.

Watsonville, CA 95076
This is to confirm that Industrial Service Solutions, located in Benicia CA is the exclusive Authorized Service Center for AUMA product lines in Northern CA.

Industrial Service Solutions is authorized to perform field automation, all retrofit, service, repairs and training within their territory. There are no other distributors authorized by AUMA to sell AUMA products, parts and service directly into Northern CA. All correspondence, including purchase orders should be sent to:

Industrial Service Solutions
3948 Teal Court
Benicia, CA 94510
(707) 752-8702
Please do not hesitate to contact the undersigned should additional information be required.

Best Regards,
Lido Flores
AUMA Southwest Regional Manager
Attachment 2

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Reso No. (CM)
Meeting Date: 082625 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO. __________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE APPROVING SOLE SOURCE AGREEMENT WITH

INDUSTRIAL SERVICE SOLUTIONS, FOR THE PURCHASE OF AUMA

AND NSL ACTUATORS, CONTROLS, ADAPTATION SERVICES, IN AN AMOUNT NOT TO EXCEED $152,033.83; AND AUTHORIZING CITY

MANAGER TO EXECUTE A SERVICES AND PURCHASING

AGREEMENT (FUNDED FROM WASTEWATER ENTERPRISE FUND -
ACCOUNTS 710-530-7324, 710-532-7324, 710-531-7324)
WHEREAS, competitive bidding requirements for the purchase of supplies, equipment and non-personal contractual services and the sale of personal property are set forth in Chapter 5 of Title 3 of the Municipal Code; and https://www.codepublishing.com/CA/Watsonville/#!/Watsonville03/Watsonville0305.html# 3-5
WHEREAS, subdivision (c) of § 3-5.210 exempts supplies and materials which are unique, available only from one source, or sought to match existing equipment or supplies already in use (also known as a sole source purchase); and WHEREAS, Industrial Service Solutions, is the sole authorized provider for the specified AUMA and NSL actuators and controls, including the necessary installation labor and adaptation services, that meet the City’s operational requirements and are compatible with the existing wastewater treatment plant infrastructure.

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 approving a sole source purchase agreement for the actuators, controls and adaptation services does not meet CEQA's definition of a “project,” because the action does not have

Page 460 of 1416 ends

Reso No. (CM)
Meeting Date: 082625 SWZ ______ TV ______ PWU ______
2 the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment, and because the action constitutes organizational or administrative activities of governments that will not result in direct or indirect physical changes 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. The Council finds that the purchase of the actuators, controls and adaptation services is available from one source that meets the needs of the City (also known as a sole source purchase).

3. This purchase is exempt from the purchasing procedures of Chapter 5 of Title 3 of the Municipal Code as a sole source purchase under subdivision (c) Equipment, supplies or nonprofessional services are unique, available only from one (1) source, or sought to match existing equipment or supplies already in use (also known as a sole source purchase); of § 3-5.210 of the Municipal Code.

4. That the Council hereby approves the Contract for Consultant Services between the City of Watsonville and Industrial Service Solutions for the purchase of the actuators, controls and adaptation services in an amount not to exceed $152,033.83 (including taxes and shipping).

5. That the City Manager is hereby authorized and directed to execute said Agreement for and on behalf of the City of Watsonville, in the form attached hereto and incorporated herein by this reference, with minor revisions that may be approved by the City Manager and the City Attorney.
********************************

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Page 1 of 9 ends

CONTRACT FOR CONSULTANT SERVICES BETWEEN

THE CITY OF WATSONVILLE AND INDUSTRIAL SERVICE SOLUTIONS THIS CONTRACT, is made and entered into this , by and
between the City of Watsonville, a municipal corporation, hereinafter called "City," and Industrial Service Solutions, hereinafter called "Consultant."

WITNESSETH
WHEREAS, the City needs to obtain certain professional, technical and/or specialized services of an independent contractor to assist the City in the most economical manner; and
WHEREAS, Consultant has represented that consultant has appropriate skill, training, qualifications, and experience to render such services called for under this Contract to City.

THE PARTIES HEREBY AGREE AS FOLLOWS:

SECTION 1. SCOPE OF SERVICES. Consultant shall perform those services described in detail in Exhibit “A,” entitled “SCOPE OF SERVICES” which exhibit is attached hereto and incorporated herein.

SECTION 2. TERM OF CONTRACT. The term of this Contract shall be from September 1, 2025 to June 31, 2026, inclusive.

SECTION 3. SCHEDULE OF PERFORMANCE. The services of Consultant are to be completed according to the schedule set out in Exhibit “B,” entitled “SCHEDULE OF PERFORMANCE,” which is attached hereto and incorporated herein. Consultant will diligently proceed with the agreed Scope of Services and will provide such services in a timely manner in accordance with the “SCHEDULE OF PERFORMANCE.” SECTION 4. COMPENSATION. The compensation to be paid to Consultant including both payment for professional services and reimbursable expenses as well as the rate and schedule of payment are set out in Exhibit “C” entitled “COMPENSATION,” which is attached hereto and incorporated herein. This amount shall not exceed $152,033.83.

SECTION 5. METHOD OF PAYMENT. Except as otherwise provided in Exhibit “C,” each month, Consultant shall furnish to the City a statement describing the work performed for compensation during the preceding month. Such statement shall also include a detailed record of the month's actual reimbursable expenditures.

SECTION 6. INDEPENDENT CONSULTANT. It is understood and agreed that Consultant, in the performance of the work and services agreed to be performed by Consultant, shall act as and be an independent Consultant and not an agent or Docusign Envelope ID: 0D972F34-5457-413B-82B8-A7C0F26D5E98

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Page 2 of 9 ends

employee of City, and as an independent Consultant, shall obtain no rights to retirement benefits or other benefits which accrue to City's employees, and Consultant hereby expressly waives any claim it may have to any such rights.

SECTION 7. ASSIGNABILITY. Consultant shall not assign or transfer any interest in this Contract nor the performance of any of Consultant's obligations hereunder, without the prior written consent of City, and any attempt by Consultant to so assign this Contract or any rights, duties or obligations arising hereunder shall be void and of no effect.

SECTION 8. INDEMNIFICATION. Consultant represents that Consultant has the expertise and experience necessary to perform the services and duties agreed to be performed by Consultant under this Contract, and City is relying upon the skill and knowledge of Consultant to perform said services and duties. Consultant agrees to defend, indemnify and hold harmless City, its officers, agents, and employees, against any loss or liability arising out of or resulting in any way from work performed by or on behalf of Consultant under this Contract or the errors or omissions by Consultant.

SECTION 9. INSURANCE.

A. Auto and Commercial General Liability Insurance. Consultant shall also maintain in full force and effect for the term of this Contract, automobile insurance and commercial general liability insurance with an insurance carrier satisfactory to City, which insurance shall include protection against claims arising from bodily and personal injury, including death resulting therefrom, and damage to property resulting from any actual occurrence arising out of the performance of this Contract. The amounts of insurance shall not be less than the following:
(1) Commercial general liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000.00 per occurrence. If such insurance contains a general aggregate limit, such limit shall apply separately to each project Consultant performs for City. Such insurance shall (a) name City, its appointed and elected officials, and its employees as insureds; and (b) be primary with respect to insurance or self-insurance programs maintained by City and (c) contain standard separation of insured's provisions.
(2) Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000.00 per occurrence. Such insurance shall include coverage for owned, hired and non-owned automobiles.

B. Workers’ Compensation Insurance. In accordance with the provisions of Section 3700 of the Labor Code, Consultant shall be insured against liability for Workers’ Compensation or undertake self-insurance. Consultant agrees to comply with such provisions before commencing performance of any work under this Contract.

Docusign Envelope ID: 0D972F34-5457-413B-82B8-A7C0F26D5E98

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C. Proof of Insurance to City before Notice to Proceed to Work. Consultant shall satisfactorily provide certificates and endorsements of insurance to the City Clerk before Notice to Proceed to Work of this Contract will be issued. Certificates and policies shall state that the policy shall not be canceled or reduced in coverage without thirty (30) days written notice to City. Approval of insurance by City shall not relieve or decrease the extent to which Consultant may be held responsible for payment of damages resulting from services or operations performed pursuant to this Contract.

Consultant shall not perform any work under this Contract until Consultant has obtained the required insurance and until the required certificates have been submitted to the City and approved by the City Attorney. If Consultant fails or refuses to produce or maintain the insurance required by these provisions, or fails or refuses to furnish City required proof that insurance has been procured and is in force and paid for, City shall have the right at City's election to forthwith terminate this Contract immediately without any financial or contractual obligation to the City. As a result of such termination, the City reserves the right to employ another consultant to complete the project.

D. Written notice. Contractor shall provide immediate written notice if (1) any insurance policy required by this Contract is terminated; (2) any policy limit is reduced; (3) or any deductible or self insured retention is increased.

SECTION 10. NON-DISCRIMINATION. Consultant shall not discriminate, in any way, against any person on the basis of age, sex, race, color, creed, national origin, or disability in connection with or related to the performance of this Contract.

SECTION 11. TERMINATION.

A. City and Consultant shall have the right to terminate this Contract, without cause, by giving not less than ten (10) days written notice of termination.

B. If Consultant fails to perform any of its material obligations under this Contract, in addition to all other remedies provided by law, City may terminate this Contract immediately upon written notice.

C. The City Manager is empowered to terminate this Contract on behalf of City.

D. In the event of termination, Consultant shall deliver to City copies of all work papers, schedules, reports and other work performed by Consultant and upon receipt thereof, Consultant shall be paid in full for services performed and reimbursable expenses incurred to the date of termination.

SECTION 12. COMPLIANCE WITH LAWS. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments. Consultant shall obtain and maintain a City of Watsonville business license during the term of this Contract.

Docusign Envelope ID: 0D972F34-5457-413B-82B8-A7C0F26D5E98

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SECTION 13. GOVERNING LAW. City and Consultant agree that the law governing this Contract shall be that of the State of California. Any suit brought by either party against the other arising out of the performance of this Contract shall be filed and maintained in the Courts of the County of Santa Cruz.

SECTION 14. PRIOR CONTRACTS AND AMENDMENTS. This Contract represents the entire understanding of the parties as to those matters contained herein.

No prior oral or written understanding shall be of any force or effect with respect to those matters covered hereunder. This Contract may only be modified by a written amendment.

SECTION 15. CONFIDENTIAL INFORMATION. Except as may be required by law, all data, documents, discussions, or other information developed or received by or for Consultant in performance of this Contract are confidential and not to be disclosed to any person except as authorized by the City Manager.

SECTION 16. OWNERSHIP OF MATERIALS. All reports, documents or other materials developed or received by Consultant or any other person engaged directly by Consultant to perform the services required hereunder shall be and remain the property of City without restriction or limitation upon their use.

SECTION 17. COVENANT AGAINST CONTINGENT FEES. The Consultant covenants that Consultant has not employed or retained any company or person to solicit or secure the Contract, and that Consultant has not paid or agreed to pay any company or person, any fees, commissions, percentage, brokerage fee, gift, or any other consideration contingent on or resulting from the award or making of this Contract.

For breach or violation of this covenant, the City shall have the right to annul this Contract without liability, or in its discretion, to deduct from the contract price or consideration or otherwise recover, the full amount of such fee, commission, percentage fee, gift, or contingency.

SECTION 18. WAIVER. Consultant agrees that waiver by City or any one or more of the conditions of performance under this Contract shall not be construed as waiver of any other condition of performance under this Contract.

SECTION 19. CONFLICT OF INTEREST.

A. A Consultant shall avoid all conflict of interest or appearance of conflict of interest in performance of this Contract. Consultant shall file a FPPC Form 700 disclosure statement, which form shall be filed with the City Clerk within thirty (30) days from the effective date of this Contract as applicable.

B. No member, officer, or employee of the City, during their tenure, or for one (1) year thereafter, shall have any interest, direct or indirect, in this Contract or the Docusign Envelope ID: 0D972F34-5457-413B-82B8-A7C0F26D5E98

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proceeds thereof and Consultant agrees not to allow, permit, grant, transfer, or otherwise do anything which will result in such member, officer, or employee of the City from having such interest.

SECTION 20. AUDIT BOOKS AND RECORDS. Consultant shall make available to City, its authorized agents, officers and employees, for examination any and all ledgers and books of account, invoices, vouchers, canceled checks and other records or documents evidencing or related to the expenditures and disbursements charged to the City, and shall furnish to City, its authorized agents and employees, such other evidence or information as City may require with respect to any such expense or disbursement charged by Consultant.

SECTION 21. NOTICES. All notices shall be personally served or mailed, postage prepaid, to the following addresses, or to such other address as may be designated by written notice by the parties:

CITY
City Clerk’s Office
275 Main Street, Suite 400
Watsonville, CA 95076
(831) 768-3040

CONSULTANT
Industrial Service Solutions
3948 Teal Court
Benicia, CA 94510
(707) 752-8702
SECTION 22. EXHIBITS:

Exhibit A: Scope of Services
Exhibit B: Schedule of Performance
Exhibit C: Compensation
///
///
///
///
Docusign Envelope ID: 0D972F34-5457-413B-82B8-A7C0F26D5E98

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WITNESS THE EXECUTION HEREOF, on the day and year first hereinabove written.

CITY

CITY OF WATSONVILLE
BY ______________________________
Tamara Vides, City Manager
ATTEST:

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

BY ______________________________
Samantha W. Zutler, City Attorney

CONSULTANT
BY_________________________________
Brad Fowler, GM, West
Docusign Envelope ID: 0D972F34-5457-413B-82B8-A7C0F26D5E98

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EXHIBIT "A"

SCOPE OF SERVICES
The scope of services is as follows:

As described in the attached quote #0039216, dated June 11,2025, from Industrial Service Solutions for the purchase and installation of multiple AUMA actuators and supporting components at various treatment facility locations (Wastewater Treatment Facility, Recycle Water Treatment Facility and Blackburn Storm Collections Station).

The quote also covers labor, vault adaptation work, travel, and per diem.

See attachment labeled EXHIBIT “A”

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EXHIBIT "B"

SCHEDULE OF PERFORMANCE
Services shall commence immediately upon execution of this Contract. All services performed under the provisions of this Contract shall be completed in accordance with the following schedule: September 1, 2025 to June 31, 2026 Docusign Envelope ID: 0D972F34-5457-413B-82B8-A7C0F26D5E98

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EXHIBIT "C"

COMPENSATION

a. Total Compensation. The total obligation of City under this Contract shall not exceed ____ $152,033.83 _______________________.
b. Basis for Payment. Payment(s) to Consultant for services performed under this contract shall be made as follows and shall include payment for reimbursable expenses:
c. Payment Request. Consultant shall submit a request for payment for services on a monthly basis by letter to Director, or said Director's designated representative. Such request for payment shall cover the preceding monthly period during the term hereof, shall note the City's purchase order number for this contract, shall contain a detailed listing of the total number of items or tasks or hours for which payment is requested, the individual dates on which such services were rendered, and invoices for reimbursable expenses, if any. Upon receipt in the Office of Director of said payment request, Director shall cause payment to be initiated to Consultant for appropriate compensation.

Docusign Envelope ID: 0D972F34-5457-413B-82B8-A7C0F26D5E98

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QUOTATION
Sold To: Ship To:

CITY OF WATSONVILLE
250 Main St
Watsonville, CA 95076-5047

CITY OF WATSONVILLE
250 MAIN STREET
WATSONVILLE, CA 95076
Customer Number:
0039216
6/11/2025
Terms: Net 30 Days
98-0001467
Quote Date:
8/15/2025

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Submitted By:

Quote Number:

Quote Expires:

Please reference quote number on all orders placed.

Goods may incur tariffs that are not incorporated into our pricing.

Tariffs incurred will be passed to and become the responsibility of the customer.

Ship Via EXW Freight Terms Freight Account
Best Way
Customer Project
Item/Description Unit Price Amount Ordered
EACH 15,950.00 2.00 7,975.00
LOCATION 1 & 2:

SA7.6/GS63.3/AC01.2 CONTROLS --15 FOOT CABLE WALL MOUNT 8-10 WEEKS ARO--CANNOT BE CANCELED RETURNED OR

EXCHANGED-SHIPPING PPA

NSL-ACTUATOR
EACH 38,425.00 5.00 7,685.00
LOCATION 3-7:

SA10.2/GK14.2/AC01.2
8-10 WEEKS ARO-CANNOT BE CANCELED RETURNED OR EXCHANGEDSHIPPING PPA

NSL-ACTUATOR
EACH 19,095.00 3.00 6,365.00
LOCATION 8-10:

AUMA SAR7.2/GS50.3/AC01.2
8-10 WEEKS ARO-CANNOT BE CANCELED RETURNED OR EXCHANGEDSHIPPING PPA

NSL-ACTUATOR
EACH 7,360.00 1.00 7,360.00
LOCATION 11:

SA14.2/AC01.2
8-10 WEEKS ARO-CANNOT BE CANCELED RETURNED OR EXCHANGEDSHIPPING PPA

NSL-ACTUATOR
EACH 17,460.00 1.00 17,460.00
LOCATION VAULT:

SAR07.6/GS200.3/AC01.2-50 ft CABLE WALL MOUNT CONTROLS

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QUOTATION
Sold To: Ship To:

CITY OF WATSONVILLE
250 Main St
Watsonville, CA 95076-5047

CITY OF WATSONVILLE
250 MAIN STREET
WATSONVILLE, CA 95076
Customer Number:
0039216
6/11/2025
Terms: Net 30 Days
98-0001467
Quote Date:
8/15/2025

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Submitted By:

Quote Number:

Quote Expires:

Please reference quote number on all orders placed.

Goods may incur tariffs that are not incorporated into our pricing.

Tariffs incurred will be passed to and become the responsibility of the customer.

By: _____________________________________________ Date: _________________________________ EXHIBIT "A"
pg. 1 of 2
Docusign Envelope ID: 0D972F34-5457-413B-82B8-A7C0F26D5E98

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
WRITTEN BY: WASTEWATER DIVISION MANAGER TELLEZ
RECOMMENDED BY: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: PURCHASE OF FLOCCULANT POLYMER CHEMICAL AND DELIVERY RECOMMENDATION:

It is recommended that the City Council approve the purchase of flocculant polymer chemicals and delivery services from SNF Polydyne, Inc. as a sole source provider for Fiscal Year 2025/2026, in an amount not to exceed $250,000.00, funded from the wastewater enterprise fund.

BACKGROUND:

The City of Watsonville Wastewater Division uses polymer chemicals to enhance solids separation, dewatering, and effluent quality in both the wastewater treatment and recycled water facilities. SNF Polydyne, Inc., has been the supplier of these polymers and has provided consistent, reliable service and technical support. A new contract is needed to continue chemical delivery for wastewater treatment in the new fiscal year.

DISCUSSION:

Polydyne, Inc. is the current provider of polymer chemicals used in our wastewater and recycled water treatment process. Polymers are manufactured with chemical formulas unique to each supplier. When the Recycled Water Treatment Facility was constructed, several rounds of jar testing and pilot testing were completed to confirm that the Polydyne polymer is the most effective and cost-efficient chemical for the City’s particular wastewater and recycled water makeup. From time to time, the City completes jar and pilot testing with polymer from other manufacturers. The city will be performing polymer testing in September to compare manufacturers. Depending on the outcome, either an amendment to this contract will be brought to Council or a contract with a new manufacturer will be brought to Council for

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2 approval. In the meantime, this contract requires wastewater and recycled water treatment in the new fiscal year.

The specific polymer purchased from Polydyne was tested and found to work best with the makeup of the City’s particular wastewater and recycled water constituents, resulting in optimal treatment performance and operational efficiency. Continuing with this vendor ensures product consistency, avoids operational risk from chemical incompatibility, and maintains compliance with regulatory requirements. Polydyne has demonstrated reliability, product availability, and responsive technical support tailored to our treatment needs.

Staff therefore recommends that Council approve the sole source contract with Polydyne, in the amount of $250,000. Subdivision (c) of § 3-5.210 of the Municipal Code exempts from competitive bidding “Equipment, supplies or nonprofessional services (that) are unique, available only from one (1) source, or sought to match existing equipment or supplies already in use (also known as a sole source purchase).

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

Adopting a Resolution approving a Contract for the purchase of polymer chemicals does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

STRATEGIC PLAN:

Infrastructure & Environment
Efficient and Well-performing Government
FINANCIAL IMPACT:

Historically, the wastewater division spends approximately $650,000 annually on polymer chemical purchase and delivery. Staff is only requesting a contract, in an amount not to exceed $250,000.00 to begin Fiscal Year 2025/2026 until jar testing can be completed. This contract will be funded through the wastewater operational budget account 710-530-7551 ($100,000.00) and the recycled water operational budget account 710-532-7551 ($150,000.00).

ALTERNATIVE ACTION:

No reasonable alternative is known. Polymer is required to meet state regulatory requirements for wastewater and recycled water.

ATTACHMENTS AND/OR REFERENCES (IF ANY):
1) Sole Source Letter from SNF Polydyne dated July 21, 2025

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polydyne.com
Polydyne Inc. • 1 Chemical Plant Road • Riceboro, GA 31323 USA • Tel 800.848.7659 Emailed to: [email protected]
July 21, 2025
Ruben Tellez
Interim Wastewater Division Manager
City of Watsonville
500 Clearwater Lane
Watsonville, CA 95076
Subject: City of Watsonville Sole Source Letter
Dear Mr. Tellez,
Please accept this letter as Polydyne Inc.’s proposal that we are the sole source manufacturer and supplier of the following products supplied to the City of Watsonville:

CLARIFLOC™ A-210P, CLARIFLOC™ C-378, and CLARIFLOC™ C-331 A sole source declaration is a frequently used method by which municipal customers can secure the purchase of goods that have proven efficacy in their process and cannot be obtained from any other source.

The above-named CLARIFLOC™ polymers have a molecular structure, molecular weight, and particular raw material components that are unique to Polydyne’s CLARIFLOC™ product line.

CLARIFLOC™ is Polydyne’s trademark and no other vendor is authorized to supply these products.

For the period of July 15
th
, 2025, through July 14th, 2026, Polydyne Inc. shall commit to manufacture, maintain inventory, and supply the City of Watsonville with CLARIFLOCTM A-210P polymer at the price of $1.67 per pound, CLARIFLOCTM C-378 at the price of $1.43 per pound, and CLARIFLOCTM C-331 or a similar CLARIFLOCTM polymer at the price of $0.25 per pound.

Thank you for your business. If you have any questions or need additional information, please contact Sarah Ben-Yoseph, Technical Sales Representative, at (415) 404-2138.

Best regards,
Sarah Ben-Yoseph
Technical Sales Representative
Attachment 1

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1 Reso No. ______ (CM)
Meeting Date: 082625 SWZ ______ TV ______ PWU ______
RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE APPROVING SOLE SOURCE CONTRACT WITH POLYDYNE, INC., DBA SNF POLYDYNE, INC., A CORPORATION, FOR THE PURCHASE AND

DELIVERY OF POLYMER CHEMICALS USED IN WASTEWATER

TREATMENT AND RECYCLED WATER PRODUCTION, IN THE AMOUNT
NOT TO EXCEED $250,000 FOR FY 2025-2026; AND DIRECTING THE

CITY MANAGER TO EXECUTE SAME (FUNDED FROM THE

WASTEWATER ENTERPRISE FUND)
WHEREAS, bidding requirements for the purchase of supplies, equipment and nonpersonal contractual services and the sale of personal property are set forth in Chapter 5 of Title 3 of the Municipal Code; and
WHEREAS, subdivision (c) of § 3-5.210 exempts equipment that is unique, available only from one source, or sought to match existing equipment or supplies already in use (also known as a sole source purchase); and
WHEREAS, Polydyne, Inc., dba SNF Polydyne, Inc., presently supplies polymers to the City; and
WHEREAS, there are no other polymer suppliers that have proven to be effective and cost effective in treating the City’s particular wastewater and water constituents to meet state regulatory requirements (also known as a sole source purchase).

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

1. Approving a Contract for the purchase of polymer chemicals 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. Even if the approval of the contract were a

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2 Reso No. ______ (CM)
Meeting Date: 082625
“project,” it would be exempt from CEQA under CEQA Guidelines Section 15301 because it consists of the operation of an existing facility with no expansion of existing use.

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

3. The Council finds that the purchase of polymer chemicals used in Wastewater Treatment and Recycled Water Production are currently available from one source that meets the City’s facility treatment operations (also known as a sole source purchase).

4. That this purchase from Polydyne, Inc., dba SNF Polydyne, Inc., a corporation, in an amount not to exceed $250,000 is hereby authorized.

5. That the Contract for Consultant Services between the City of Watsonville and Polydyne, Inc., dba SNF Polydyne, Inc., for the purchase of Polymers used in wastewater treatment processes, a copy of which Contract is attached hereto and incorporated herein by this reference, is hereby approved.

6. The City Manager is hereby authorized and directed to execute said contract for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney.
****************************

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EXHIBIT "A" SCOPE OF SERVICES
PG. 1 OF 2

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EXHIBIT "A" SCOPE OF SERVICES
PG. 2 OF 2

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
WRITTEN BY: Brandon Gill, Director of Innovation and Technology RECOMMENDED BY: INNOVATION & TECHNOLOGY DIRECTOR GILL
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: THREE YEAR VMWARE RENEWAL NOT TO EXCEED $407,000 RECOMMENDATION:

Adopt a resolution approving the sole source purchase of VMware from Converge Technology Solutions, in an amount not to exceed $407,000.

BACKGROUND:

VMware use started over 15 years ago, the move saves on hardware costs and allows for a centralized management of all internal servers.

DISCUSSION:

VMware is the primary technology used for all servers within the city. Due to the short timeframe, functionality loss, and high penalties, the first year was paid for through an emergency purchase memo.

The City now needs to renew its license to use the software; staff recommends agreeing to a three year term. This purchase qualifies for Sole Source per Chapter 5 of Title 3 of the Municipal Code, subdivision (c) of § 3-5.210, which exempts equipment, supplies, or nonprofessional services that have been uniformly adopted or otherwise standardized in the City, available only from one source, or sought to match existing equipment or supplies already in use. VMware is the only software that meets the city's requirements for server virtualization. Pallera/Converge is the reseller assigned to the city by VMware as the primary license holder.

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2 STRATEGIC PLAN:

Efficient and Well-performing Government – This license renewal will keep all critical technology servers within a required licensed state and continued support.

FINANCIAL IMPACT:

This will be part of the budget and will be split among utilities and IT department General Fund Year 1 $85,378.08
Year 2 $85,378.08
Year 3 $85,378.08
sub-total $256,134.24
Water Year 1 $25,111.20
Year 2 $25,111.20
Year 3 $25,111.20
sub-total $75,333.60
Watstewater Year 1 $25,111.20
Year 2 $25,111.20
Year 3 $25,111.20
sub-total $75,333.60
Total $406,801.44
ALTERNATIVE ACTION:

No reasonable alternative
ATTACHMENTS AND/OR REFERENCES (IF ANY):
1) Quote# QUO-CTSUS047838 from Converge Technology Solutions

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VMware renewal
Quote # QUO-CTSUS047838
Version 3
Prepared by: Prepared for:

Converge Technology Solutions CITY OF WATSONVILLE
Kyle Doerksen
[email protected]
Kevin Lew
[email protected]
Attachment 1

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VMware renewal
Quote #: QUO-CTSUS047838
Version: 3
Quote Date: 08/08/2025
Expiration Date: 08/15/2025
Payment Terms: Net 30
Kyle Doerksen
Account Executive
[email protected]
Converge Technology Solutions
130 Technology Parkway
Ste 100
Norcross, GA 30092
Bill To: Ship To:

CITY OF WATSONVILLE CITY OF WATSONVILLE
215 UNION ST
Watsonville, CA 95076
Kevin Lew
831-768-3433
[email protected]
215 UNION ST
Watsonville, CA 95076
Kevin Lew
831-768-3433
[email protected]
3 Year - Annual Payments
Line Qty Product Description Start Date End Date Price Ext. Price 1 1 VMware Year 1 Payment - Invoice NET 30 $135,600.48 $135,600.48

1.01 432 VCF-CLD-FND VMWARE CLOUD FOUNDATION 8/16/2025 8/15/2026 $313.89 $135,600.48 2 1 VMware Year 2 Payment - Invoice 8/16/26 $135,600.48 $135,600.48

2.01 432 VCF-CLD-FND VMWARE CLOUD FOUNDATION 8/16/2026 8/15/2027 $313.89 $135,600.48 3 1 VMware Year 3 Payment - Invoice 8/16/27 $135,600.48 $135,600.48

3.01 432 VCF-CLD-FND VMWARE CLOUD FOUNDATION 8/16/2027 8/15/2028 $313.89 $135,600.48 Subtotal: $406,801.44
Quote #QUO-CTSUS047838 v3 Page: 2 of 3
Attachment 1

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Quote Summary
Description Amount
3 Year - Annual Payments $406,801.44
Total (USD): $406,801.44
***Three year commitment invoiced annually.

PAYMENTSCHEDULE:

PAYMENT 1 of 3-Invoiced NET 30
PAYMENT 2 of 3-Invoice Date 8/16/26
PAYMENT 3 of 3-Invoice Date 8/16/27
• Payment Terms, as established or upon credit approval. • FOB Destination.
• Taxes, freight and other fees not included unless otherwise stated. • Returns or exchanges are at the discretion of the Manufacturer. • Order may be delivered in multiple shipments, and customer agrees to pay partial payments as product is delivered. • Supplier is acting as a reseller of the Original Equipment Manufacturer (OEM). The products sold under this quotation are subject to the terms and conditions provided by the OEM.
• This Quote, including the Vendor’s terms and conditions therein, represent the complete and final agreement and supersedes all prior understandings, including but not limited to, any negotiations, representations, and terms listed on a Customer's purchase order. • To the extent that this Quote is a multi-year commitment, this quote cannot be cancelled or terminated unless agreed to, in writing, by the Vendor. • It is our full intent to hold pricing firm until the end of the contract term but given recent developments in global trade policies and the potential tariffs, we would like to bring to your attention that materials and imported goods may be subject to higher costs and impact the supply chain that may impact pricing. We are committed to transparency and will ensure you are kept informed of any price adjustments as soon as they are identified.

CITY OF WATSONVILLE
Signature:

Name:

Date:

PO Number:

Quote #QUO-CTSUS047838 v3 Page: 3 of 3
Attachment 1

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Reso No. (CM)
Meeting Date: 020822 1
RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE APPROVING SOLE SOURCE PURCHASE OF

VMWARE FROM CONVERGE TECHNOLOGY SOLUTIONS, IN AN
AMOUNT NOT TO EXCEED $407,000, FOR A THREE YEAR TERM
WHEREAS, VMware has been utilized by the city for over 15 years, providing significant savings on hardware costs and allowing for centralized management of all internal servers; and
WHEREAS, VMware is the primary technology used for all servers within the city, and its renewal is critical to maintaining functionality; and WHEREAS, subdivision (c) of § 3-5.210 exempts supplies and materials which are unique, available only from one source, or sought to match existing equipment or supplies already in use (also known as a sole source purchase); and WHEREAS, the renewal of the VMware license aligns with the city's strategic plan for an efficient and well-performing government by ensuring all critical technology servers remain in a required licensed state and continue to receive support; and WHEREAS, the financial impact of this renewal is budgeted at $135,649 per year, split between utilities and the General Fund;

NOW, THEREFORE, BE IT RESOLVEDBY 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 approving a sole source purchase agreement for VMware 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 reasonable foreseeable indirect physical change in the environment, and because the action constitutes organizational or

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Reso No. (CM)
Meeting Date: 082625 2
administrative activities of governments that will not result in direct or indirect physical changes 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. The Council finds that the purchase of VMware from Converge Technology Solutions is available from one source that meets the needs of the City (also known as a sole source purchase).

3. This purchase is exempt from the purchasing procedures of Chapter 5 of Title 3 of the Municipal Code as a sole source purchase under subdivision (c) equipment, supplies or nonprofessional services are unique, available only from one (1) source, or sought to match existing equipment or supplies already in use (also known as a sole source purchase); of Section 3-5.210 of the Municipal Code.

4. That the sole source purchase of VMware from Converge Technology Solutions for a three-year term, in an amount not to exceed $407,000, is hereby approved. ********************************

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AGREEMENT FOR STORMWATER DRAINAGE OUTFALL PURPOSES AT

THE HILLCREST SUBDIVISION
RECOMMENDATION:

Adopt a resolution approving a Grant of Easements and Maintenance Agreement with LANDCO Hillcrest, LLC., for stormwater drainage outfall purposes and authorize the City Manager to execute the documents.

BACKGROUND:

LANDCO Hillcrest, LLC is developing the Hillcrest Estates Subdivision, Track No. 1607.  On August 28, 2018, Council adopted Resolution No. 141-18 (CM) approving a Tentative Map for Tract No. 1607;
 On August 25, 2020, Council adopted Resolution No. 161-20 (CM) approving a two-year time extension of the Tentative Map;
 On July 6, 2021, Council adopted Resolution No. 210-21 (CM) approving a First Amended Tentative Map for the Hillcrest Estates Subdivision;
 On May 10, 2022, Council adopted Ordinance No. 1431-22 (CM) approving a Development Agreement between Hillcrest Watsonville, LLC (predecessor to LANDCO Hillcrest, LLC) and the City;
 On December 5, 2022, Council adopted Resolution No. 242-22 (CM) approving a Final Subdivision Map Resolution No. 241-22 (CM) approving a Public and On-Site Improvement Agreement.

DISCUSSION:

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2 Stormwater facilities within the subdivision are privately owned and maintained. This includes storm drain piping and outfall structures at two locations that extend beyond the limits of the subdivision and into city property. The subdivision needs an easement from the city to install, own, operate, and maintain these facilities on city property. In granting these easements, the city requires the Developer, and eventually the homeowners’ association of the subdivision, to agree to maintain them. The easement and agreement are incorporated into the Grant of Easements and Maintenance Agreement for Stormwater Drainage Outfall Purposes, which is the subject of this staff report.

The Grant of Easements and Maintenance Agreement includes:
 Legal descriptions that identify the location of the easements;  An agreement that identifies the duties of the subdivision in installing, owning, operating, and maintaining the drainage facilities.

The resolution directs the City Manager to execute the Agreement. The City Clerk will then ensure that the document is recorded with Santa Cruz County.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

This action implements the approvals analyzed and considered by the Sunshine Vista Environmental Impact Report and its associated Addendums (State Clearinghouse Number: 2017032041). The project was formerly known as Sunshine Vista. Any potentially significant effects have been adequately analyzed and have been avoided or mitigated pursuant to that earlier EIR and Addendums, including revisions or mitigation measures that are imposed upon the proposed project. In addition, none of the conditions described in California Code of Regulations, Section 15162, exist. Therefore, no further action is required under the California Environmental Quality Act (CEQA).

STRATEGIC PLAN:

This project is consistent with Strategic Plan Priority:
 Housing
 Infrastructure & Environment
FINANCIAL IMPACT:

There is no financial impact on the City’s budget.

ALTERNATIVE ACTION:

No reasonable alternatives are known at this time.

ATTACHMENTS AND/OR REFERENCES (IF ANY):

None

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Reso No. (CM)
Meeting Date: 082625 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE APPROVING A GRANT OF EASEMENTS AND

AGREEMENT FOR STORMWATER DRAINAGE OUTFALL PURPOSES

WITH LANDCO HILLCREST, LLC, FOR THE HILLCREST ESTATES
SUBDIVISION; AND AUTHORIZING AND DIRECTING THE CITY

MANAGER TO EXECUTE SAME
WHEREAS, LANDCO Hillcrest, LLC (“Developer”) is developing the Hillcrest Estates Subdivision, Tract No. 1607 (“Project”); and
WHEREAS, on August 28, 2018, the City Council of the City of Watsonville (“City”) adopted Resolution No. 141-18 (CM) approving a Tentative Map for the Project; and WHEREAS, on August 25, 2020, the City Council adopted Resolution No. 161-20 (CM) approving a two-year time extension of the Tentative Map; and WHEREAS, on July 6, 2021, the City Council adopted Resolution No. 210-21 (CM) approving a First Amended Tentative Map; and
WHEREAS, on May 10, 2022, the City Council adopted Ordinance No. 1431-22 (CM) approving a Development Agreement between Hillcrest Watsonville, LLC (Developer’s predecessor) and the City; and
WHEREAS, on December 5, 2022, the City Council adopted Resolution No. 242- 22 (CM) approving a Final Subdivision Map and Resolution No. 241-22 (CM) approving a Public and On-Site Improvement Agreement for the Project; and WHEREAS, consistent with the Public and On-Site Improvement Agreement and the Stormwater Management Agreement, Developer will construct, operate and maintain stormwater facilities (“Facilities”) for the Project, until operation and maintenance responsibilities are transferred to the Project’s homeowners’ association; and

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Reso No. (CM)
Meeting Date: 082625
2 WHEREAS, the Facilities include storm drain piping and outfall structures at two locations that extend beyond the limits of the Project and into City property; and WHEREAS, Developer requires an easement over City property to access the Facilities for construction, operation and maintenance; and WHEREAS, City desires to grant the easement with the understanding that Facilities construction, operation and maintenance within the Easement area will be the responsibility of Developer until such interests and responsibilities are transferred to the homeowners’ association, at which time the homeowners’ association will be responsible for them in perpetuity.

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

1. This action implements the approvals analyzed and considered by the Sunshine Vista Environmental Impact Report and its associated Addendums (State Clearinghouse Number: 2017032041). The project was formerly known as Sunshine Vista. Any potentially significant effects have been adequately analyzed and have been avoided or mitigated pursuant to that earlier EIR and Addendums, including revisions or mitigation measures that are imposed upon the proposed project. In addition, none of the conditions described in California Code of Regulations, Section 15162, exist. Therefore, no further action is required under the California Environmental Quality Act (CEQA).

2. The City Council hereby approves the Grant of Easements and Maintenance Agreement attached hereto and incorporated herein by this reference, and authorizes and directs the City Manager is to execute said Grant of Easements and Maintenance Agreement for and on behalf of the City of Watsonville with minor revisions necessary to complete the transaction that may be approved by the City Manager and the City Attorney.

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Reso No. (CM)
Meeting Date: 082625
3 3. The City Clerk is hereby authorized and directed to attach a copy to this resolution, the Grant of Easements and Maintenance Agreement for Stormwater Drainage Outfall Purposes, once recorded.
**************************************

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
WRITTEN BY: Assistant Director of Public Works and Utilities Fontes RECOMMENDED BY: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: RESOLUTION APPROVING PROGRAM SUPPLEMENTAL AGREEMENT

FROM THE STATE FOR PREPARATION OF PLANS, SPECIFICATIONS AND

ESTIMATE FOR THE SAFE ROUTES TO DOWNTOWN WATSONVILLE

PROJECT
RECOMMENDATION:

Staff recommends that the City Council adopt a resolution approving Program Supplemental Agreement No. 00000A809 to Administering Agency — State Agreement for State Funded Project No. 05-5031S21 with the California Department of Transportation (Caltrans) and authorizing the City Manager to execute the Program Supplement, and any amendments which may be necessary, and accept and appropriate grant funds to the Special Grants Fund (0260).

BACKGROUND:

In 2022, the City was awarded an $8.69M State of California Active Transportation Program grant to design and construct the Safe Routes to Downtown Watsonville Project. The project will provide improved pedestrian and bicycle facilities in the downtown area and to eight public schools in the southeast part of the city.

DISCUSSION:

The Watsonville Safe Routes to School Downtown Project includes minor infrastructure improvements near eight school locations in the downtown area. The project purpose is to provide Safe Routes to School and help complete active transportation corridors connecting Watsonville High School and its five feeder schools and two charter schools. The improvements include Class III bike routes, high visibility crosswalks, curb extensions, new or upgraded curb ramps, refuge islands and signs along the existing paved roadways

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2 and sidewalks. The project also includes advanced warning pavement markings and site distance improvements including the installation of red curbs and trimming back vegetation.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

This project qualifies as Categorically Exempt under the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15301 Class 1, example (c):

Existing highways and streets, sidewalks, gutters, bicycle and pedestrian trails, and similar facilities (this includes road grading for the purpose of public safety), and other alterations such as the addition of bicycle facilities, including but not limited to bicycle parking, bicycle-share facilities and bicycle lanes, transit improvements such as bus lanes, pedestrian crossings, street trees, and other similar alterations that do not create additional automobile lanes);
Public Works Staff have filed a Notice of Exemption with the Santa Cruz County Clerk.

STRATEGIC PLAN:

The project is consistent with the following Strategic Plan goals:

Infrastructure & Environment
Public Safety
FINANCIAL IMPACT:

This project will be funded, in part, by the $8.69M State of California Active Transportation Program awarded to the City in 2022, in addition to $100,000 in Regional Surface Transportation Program Exchange funds secured through the Santa Cruz County Regional Transportation Commission, and $31,000 in Watsonville Measure D funds.

ALTERNATIVE ACTION:

No reasonable alternatives are known at this time
ATTACHMENTS AND/OR REFERENCES (IF ANY):

None.

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1 Reso No. (CM)
Meeting Date: 020822
RESOLUTION NO. (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE ACCEPTING $638,000 IN GRANT FUNDS FROM THE

CALIFORNIA DEPARTMENT OF TRANSPORTATION (CALTRANS)

FOR PREPARATION OF PLANS, SPECIFICATIONS AND ESTIMATE

FOR THE SAFE ROUTES TO DOWNTOWN WATSONVILLE PROJECT,
APPROVING PROGRAM SUPPLEMENT NO. 00000A809 TO

ADMINISTERING AGENCY-STATE AGREEMENT FOR STATE FUNDED
PROJECT NO. 02-2031S21, AUTHORIZING THE CITY MANAGER TO

EXECUTE THE PROGRAM SUPPLEMENT, AND ANY AMENDMENTS
WHICH MAY BE NECESSARY; AND APPROPRIATE SUCH FUNDS TO
THE SPECIAL GRANTS FUND [0260] – PROJECT BUDGET ACCOUNT 0260-338-7837-15087
WHEREAS, in 2022, the City of Watsonville was awarded an $8.69 million Active Transportation Program grant for the Safe Routes to Downtown Watsonville Project; and WHEREAS, on June 27, 2025, the California Transportation Commission (CTC) approved the allocation request for the Safe Routes to Downtown Watsonville Project in the amount of $507,000.

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

1. The project qualifies as Categorically Exempt under the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15301 Class 1, example (c): Existing highways and streets, sidewalks, gutters, bicycle and pedestrian trails, and similar facilities (this includes road grading for the purpose of public safety), and other alterations such as the addition of bicycle facilities, including but not limited to bicycle parking, bicycle-share facilities and bicycle lanes, transit improvements such as bus lanes, pedestrian crossings, street trees, and other similar alterations that do not create additional automobile lanes). Public Works staff have filed a Notice of Exemption with the Santa Cruz County Clerk.

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2 Reso No. (CM)
Meeting Date: 020822

2. That the Program Supplement No. 00000A809 to Administering Agency – State Agreement for State Funded Projects No. 05-5031S21 with the California Department of Transportation (CALTRANS), a copy of which is attached hereto and incorporated herein by this reference, is fair and equitable and is hereby approved.

3. The City Manager is hereby authorized and directed to execute the Program Supplement, in the form attached hereto, with minor revisions that may be approved by the City Manager and the City Attorney, and to take any actions necessary to effectuate acceptance of the grant funds.

4. That the $507,000 is hereby appropriated to the Special Grants Fund [0260] Project Account 0260-338-7837-15087.
********************************

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00000A809
FOR STATE FUNDED PROJECTS NO 05-5031S21
0523000082
July 10, 2025
05-SCR-0-WAT
ATPSB1L-5031(042)
5031
This Program Supplement, effective 06/27/2025, hereby adopts and incorporates into the Administering Agency-State Agreement No. 05-5031S21 for State Funded Projects which was entered into between the ADMINISTERING AGENCY and the STATE with an effective date of 08/04/2022 and is subject to all the terms and conditions thereof. This PROGRAM SUPPLEMENT is executed in accordance with Article I of the aforementioned Master Agreement under authority of Resolution No. approved by the ADMINISTERING AGENCY on (See copy attached).

The ADMINISTERING AGENCY further stipulates that as a condition to the payment by the State of any funds derived from sources noted below encumbered to this project, Administering Agency accepts and will comply with the Special Covenants and remarks set forth on the following pages.

Various locations in southeastern Watsonville.

Pedestrian and bicycle improvements 0.0(MILES)
Estimated Cost State Funds Matching Funds

CITY OF WATSONVILLE
By ________________________________ By ________________________________ Title _______________________________
Date _______________________________
Attest _______________________________ Date _______________________________ Division of Local Assistance
I hereby certify upon my personal knowledge that budgeted funds are available for this encumbrance:

Accounting Officer _______________________ Date _______________ PROGRAM SUPPLEMENT NO.
to

ADMINISTERING AGENCY-STATE AGREEMENT
Adv. Project ID Date:

Location:

Project Number:

E.A. Number:

Locode:

PROJECT LOCATION:

TYPE OF WORK: LENGTH:

LOCAL OTHER
$638,000.00 $131,000.00 $0.00
Chief, Office of Project Management Oversight

STATE OF CALIFORNIA
Department of Transportation
$507,000.00
STATE $507,000.00
Program Supplement 05--503-A809- SERIAL 1Page of 4
7/14/25

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SPECIAL COVENANTS OR REMARKS
05-SCR-0-WAT
ATPSB1L-5031(042)

1. A. This PROJECT will be administered in accordance with the applicable CTC STIP guidelines and the Active Transportation Program guidelines as adopted or amended, the Local Assistance Procedures Manual (LAPM), the Local Assistance Program Guidelines (LAPG), and this PROGRAM SUPPLEMENT.

B. This PROJECT is programmed to receive State funds from the Active Transportation Program (ATP). Funding may be provided under one or more components. A component(s) specific fund allocation is required, in addition to other requirements, before reimbursable work can occur for the component(s) identified. Each allocation will be assigned an effective date and identify the amount of funds allocated per component(s).

This PROGRAM SUPPLEMENT has been prepared to allow reimbursement of eligible PROJECT expenditures for the component(s) allocated. Unless otherwise determined, the effective date of the component specific allocation will constitute the start of reimbursable expenditures.

C. STATE and ADMINISTERING AGENCY agree that any additional funds made available by future allocations will be encumbered on this PROJECT by use of a STATE-approved Allocation Letter and STATE Finance Letter. ADMINISTERING AGENCY agrees that STATE funds available for reimbursement will be limited to the amount allocated by the California Transportation Commission (CTC) and/or the STATE.

D. Upon ADMINISTERING AGENCY request, the CTC and/or STATE may approve supplementary allocations, time extensions, and fund transfers between components. Funds transferred between allocated project components retain their original timely use of funds deadlines, but an approved time extension will revise the timely use of funds criteria for the component(s) and allocation(s) requested. Approved supplementary allocations, time extensions, and fund transfers between components made after the execution of this PROGRAM SUPPLEMENT will be documented and considered subject to the terms and conditions thereof.

Documentation will consist of a STATE approved Allocation Letter, Fund Transfer Letter, Time Extension Letter, and Finance Letter, as appropriate.

E. This PROJECT is subject to the timely use of funds provisions enacted by the Active Transportation Program guidelines, as adopted or amended, and by approved CTC and State procedures as outlined below.

Funds allocated for the environmental & permits (E&P), plan specifications & estimate (PS&E), and right-of-way components are available for expenditure until the end of the second fiscal year following the year in which the funds were allocated.

Program Supplement 05--503-A809- SERIAL Page 2 of 4

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SPECIAL COVENANTS OR REMARKS
05-SCR-0-WAT
ATPSB1L-5031(042)
Funds allocated for the construction component are subject to an award deadline and contract completion deadline. ADMINISTERING AGENCY agrees to award the contract within 6 months of the construction fund allocation and to complete and accept the construction within 36 months of award.

F. Award information shall be submitted by the ADMINISTERING AGENCY to the District Local Assistance Engineer immediately after project contract award and prior to the submittal of the ADMINISTERING AGENCY'S first invoice for the construction contract. Failure to do so will cause a delay in the State processing of invoices for the construction phase.

G. The ADMINISTERING AGENCY shall invoice STATE for environmental & permits (E&P), plans specifications & estimate (PS&E), and right-of-way costs no later than 180 days after the end of last eligible fiscal year of expenditure. For construction costs, the ADMINISTERING AGENCY has 180 days after project completion or contract acceptance to make the final payment to the contractor prepare the final Report of Expenditures and final invoice, and submit to STATE for verification and payment.

H. ADMINISTERING AGENCY agrees to submit the final report documents that collectively constitute a "Report of Expenditures" within one hundred eighty (180) days of PROJECT completion. Failure of ADMINISTERING AGENCY to submit a "Final Report of Expenditures" within 180 days of PROJECT completion will result in STATE imposing sanctions upon ADMINISTERING AGENCY in accordance with the current LAPM and the Active Transportation Program (ATP) Guidelines.

I. ADMINISTERING AGENCY indirect costs, as defined in 2 CFR, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirement for Federal Awards, to be claimed must be allocated in accordance with an Indirect Cost Allocation Plan (ICAP), submitted, reviewed, and approved in accordance with Caltrans Audits and Investigations requirements which may be accessed at: www.dot.ca.gov/hq/audits/.

ADMINISTERING AGENCY agrees to comply with, and require all sub-recipients and project sponsors to comply with 2 CFR, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirement for Federal Awards, and all applicable Federal and State laws and regulations.

ADMINISTERING AGENCY agrees, and will assure that its contractors and subcontractors will be obligated to agree, that Contract Cost Principles and Procedures, 48 CFR, Federal Acquisition Regulations System, Chapter 1, Part 31, et seq., and all applicable Federal and State laws and regulations, shall be used to determine the allowability of individual PROJECT cost items.

Any Fund expenditures for costs for which ADMINISTERING AGENCY has received Program Supplement 05--503-A809- SERIAL Page 3 of 4

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SPECIAL COVENANTS OR REMARKS
05-SCR-0-WAT
ATPSB1L-5031(042)
payment or credit that are determined by subsequent audit to be unallowable under 2 CFR, Part 200, or 48 CFR, Chapter 1, Part 3, are subject to repayment by ADMINISTERING AGENCY to STATE. Should ADMINISTERING AGENCY fail to reimburse Funds due STATE within 30 days of demand, or within such other period as may be agreed in writing between the Parties hereto, STATE is authorized to intercept and withhold future payments due ADMINISTERING AGENCY from STATE or any third-party source, including, but not limited to, the State Treasurer, the State Controller, and the California Transportation Commission.

J. By executing this PROGRAM SUPPLEMENT, ADMINISTERING AGENCY agrees to comply with all reporting requirements in accordance with the Active Transportation Program guidelines, as adopted or amended.

K. This PROJECT has received funds from Active Transportation Program (ATP). The ADMINISTERING AGENCY agrees to administer the project in accordance with the CTC Adopted SB1 Accountability and Transparency Guidelines.

2. The ADMINISTERING AGENCY shall construct the PROJECT in accordance with the scope of work presented in the application and approved by the California Transportation Commission. Any changes to the approved PROJECT scope without the prior expressed approval of the California Transportation Commission are ineligible for reimbursement and may result in the entire PROJECT becoming ineligible for reimbursement.

Program Supplement 05--503-A809- SERIAL Page 4 of 4

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1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, August 26, 2025
TO: CITY COUNCIL
WRITTEN BY: Recreation Supervisor Beebe
Assistant Parks & Community Services Director Negrete
RECOMMENDED BY: PARKS & COMMUNITY SERVICES DIRECTOR CALUBAQUIB APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: APPROPRIATE $32,000 TO THE GENERAL FUND AND $33,000 TO THE

GENERAL FUND CAPITAL IMPROVEMENT PLAN FOR A WINTER SPECIAL EVENT
RECOMMENDATION:

Adopt a resolution appropriating $32,000 to the General Fund and $33,000 to the General Fund Capital Improvement Plan for a winter special event.

BACKGROUND:

For many decades the Parks and Community Services Department (PCS) has installed lights in the City Plaza and planned and implemented a Holiday Tree Lighting Ceremony in November/December each year.

For the past several years, this event has taken place on the Friday before the Thanksgiving holiday. For many years, during December, PCS has implemented an additional winter event, as budgets have allowed, and with the support of generous community donations. Prior events have included a snow day, holiday train rides, Farmers Market booths, pictures with Santa, winter themed crafts and more. In 2020, during the COVID-19 pandemic, the Department shifted gears and began offering the Santa Tour, with socially distanced visits from St. Nick planned throughout town.

Although this event has remained popular for three+ years post-COVID, in-person special events have regained popularity and remain a cornerstone of community life in Watsonville. This has been underscored by the large number of attendees recorded at the City’s Spirit of Watsonville 4th of July Parade and Strawberry Festival. Although attendance numbers for both large events decreased slightly in 2025 (see chart below), overall participation has remained high, demonstrating the value that residents place on these events and their economic impact.

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2 Recognizing the community-building value that many residents place in in-person City special events and the request of several City Council Members to create more winter festivities and events downtown, staff is recommending a shift away from the Santa Tour this year to bring back a larger-scale, one-day winter event. Staff is recommending a budget appropriation to support what will likely become an annual event.

Additionally, a one-time appropriation would allow for investment in event infrastructure that will enhance this event for years to come.

DISCUSSION:

Current direct costs to offer the Holiday Tree Lighting Ceremony and Santa Tour are approximately $45,000 combined. Staff plan to utilize these funds to continue to light up the Plaza and a holiday tree, and for staff and supplies to support an in-person winter event called Night of Lights/Noche de Brillo, tentatively scheduled for Sunday, December 14, 2025. Key elements of this event will include a snow day, holiday train and a new light parade down Main Street.

Event costs are anticipated to exceed the budget currently allocated for winter events. Staff have been meeting with Board Members from the Friends of Watsonville PCS, which is committed to raising funds to support the cost of contractors needed for the snow and train elements ($27,000). Fundraising efforts include sponsorships, direct donation requests to support specific event elements, and the sale of sponsorships for lighted wreaths that will adorn downtown lampposts on Main Street.

An additional $15,000 is needed for City services (public safety costs, street closures, porta potties, etc.) to support these event elements. The Friends of Watsonville PCS will work towards raising funds to pay for these costs. To fund event supplies and performances, $17,000 is also requested for a movie showing, crafts and entertainment. However, time is of the essence and contractors and supplies need to be reserved and ordered now in preparation for the event. Staff is recommending that the Council appropriate up to $32,000 to support this winter event to ensure that the event can occur, should the Friends fall short of raising funds for these expenses.

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3 Staff is also recommending that the Council appropriate up to $33,000 in one-time CIP funds to invest in winter event elements. Funding would be used to purchase large winter themed decorations to serve as photo opportunities and backdrops to enhance the look and feel of the event. These items could be used year after year and be used as collateral for sponsorship opportunities.

The total combined request for funds for this event is $65,000.

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 appropriating funds for a special event 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:
 Community Engagement & Well-being – It is anticipated that this event will create community and engage thousands of community members in a festive winter event.  Economic Development – It is anticipated that this event will draw thousands of people to the downtown area, who may create positive economic impact to local stores and restaurants.

FINANCIAL IMPACT:

Staff is recommending that the Council appropriate $32,000 to the General Fund (682-7361-09056) for winter event expenses and an additional $33,000 to the General Fund CIP (901-7813-09056) for the purchase of winter event elements, for a total of $65,000.

Summary of Event Budget
Funds currently budgeted for Plaza/Tree Lighting and Santa Tour $45,000 Donations/Sponsorships from FWPCS for Snow and Train $27,000 Proposed appropriation for:
 Event services ($15,000)
 Event supplies and performances ($17,000)
FWPCS will work towards securing donations to pay for these expenses.

The balance will be paid by City.
$32,000
Proposed appropriation of one-time funds for winter event elements $33,000 Total Event Budget $137,000

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Watsonville City CouncilAugust 26, 2025

Watsonville City Council
August 26, 2025