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. Each policy of insurance required under Section 15.1 shall: (a) be in a form, and written by an insurer, reasonably acceptable to Landlord, (b) be maintained at Tenant’s sole cost and expense, and (c) require at least thirty (30) days’ written notice to Landlord prior to any cancellation, nonrenewal or modification of insurance coverage. Insurance companies issuing such policies shall have rating classifications of “A-” or better and financial size category ratings of “VII” or better according to the latest edition of the Best Key Rating Guide. All insurance companies issuing such policies shall be admitted carriers licensed to do business in the state where the Airport is located. Any deductible amount under such insurance shall not exceed $5,000. Tenant shall provide to Landlord, upon request, evidence that the insurance required to be carried by Tenant pursuant to this Section, including any endorsement affecting the additional insured status, is in full force and effect and that premiums therefor have been paid.
Tenant shall, at least thirty (30) days prior to expiration of each policy, furnish Landlord with certificates of renewal thereof and shall provide Landlord with at least thirty days prior written notice of any cancellation or modification.
15.3 Certificates of Insurance
. Upon execution of this Lease by Tenant, and not less than thirty (30) days prior to expiration of any policy thereafter, Tenant shall furnish to Landlord a certificate of insurance reflecting that the insurance required by this Article is in force, accompanied by an endorsement(s) showing the required additional insureds satisfactory to Landlord in substance and form.
16. DAMAGE OR DESTRUCTION
.
16.1 Definitions
.
(a) “Premises Partial Damage” shall mean damage or destruction to the improvements on the Premises (or Hazardous Material Condition for which Tenant is not responsible), other than Tenant’s Property (as defined at Section 15.1(b)), or Alterations (as defined at Article 10), which can reasonably be repaired in six (6) months or less from the date of the damage or destruction. Landlord shall notify Tenant in writing within thirty (30) days from the date of the damage or destruction as to whether or not the damage is Partial or Total and the estimated time for repairing said damage. Notwithstanding the foregoing, Premises Partial Damage shall not include damage to windows, doors, and/or other similar items which Tenant has the responsibility to repair or replace pursuant to the provisions of Section 11.1. (b) “Premises Total Destruction” shall mean damage or destruction to the Premises (or Hazardous Material Condition for which Tenant is not responsible), other than Tenant’s Property (as defined at Section 15.1(b)), or Alterations (as defined at Article 10), which cannot reasonably be repaired in six (6) months or less from the date of the damage or destruction. Landlord shall notify Tenant in writing within thirty (30) days from the date of the damage or destruction as to whether or not the damage is Partial or Total. (c) “Insured Loss” shall mean damage or destruction to improvements on the Premises, other than Tenant’s Property (as defined at Section 15.1(b)), or Alterations (as defined at Article 10), which was caused by an event required to be covered by the insurance described in Section 15.4, irrespective of any deductible amounts or coverage limits involved.
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(d) “Replacement Cost” shall mean the cost to repair or rebuild the improvements owned by Landlord (excluding Alterations) at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Laws governing the Premises, and without deduction for depreciation.
(e) “Hazardous Material Condition” shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Material as (defined in Section 12.1), in, on, or under the Premises which requires repair, remediation, or restoration.
16.2 Partial Damage - Insured Loss
. If a Premises Partial Damage that is an Insured Loss occurs, Landlord shall repair such damage (but not Tenant’s Property or Alterations) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Tenant shall, at Landlord’s election, make the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Landlord shall make any applicable insurance proceeds available to Tenant on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, Tenant shall promptly contribute the shortage in proceeds (except as to the deductible which is Tenant’s responsibility) as and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Landlord shall have no obligation to fully restore the unique aspects of the Premises unless Tenant provides Landlord with the funds to cover same, or adequate assurance thereof, within ten (10) days following receipt of written notice of such shortage and request therefor. If Landlord receives said funds or adequate assurance thereof within said ten (10) day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect. If such funds or assurance are not so received, Landlord may nevertheless elect by written notice to Tenant within ten (10) days thereafter to: (a) make such restoration and repair as is commercially reasonable with Landlord paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (b) have this Lease terminate thirty (30) days thereafter.
Tenant shall not be entitled to reimbursement of any funds contributed by Tenant to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Section 16.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made by either Party.
16.3 Partial Damage - Uninsured Loss
. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful act of Tenant (in which event Tenant shall make the repairs at Tenant’s expense), Landlord may either: (a) repair such damage as soon as reasonably possible at Landlord’s expense, in which event this Lease shall continue in full force and effect, or (b) terminate this Lease by giving written notice to Tenant within thirty (30) days after receipt by Landlord of knowledge of the occurrence of such damage. Such termination shall be effective sixty (60) days following the date of such notice. In the event Landlord elects to terminate this Lease, Tenant shall have the right within ten (10) days after receipt of the termination notice to give written notice to Landlord of Tenant’s commitment to pay for the repair of such damage without Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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reimbursement from Landlord. Tenant shall provide Landlord with said funds or satisfactory assurance thereof within thirty (30) days after making such commitment. In such event this Lease shall continue in full force and effect, and Landlord shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Tenant does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.
16.4 Total Destruction
. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate sixty (60) days following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Tenant, Landlord shall have the right to recover Landlord’s damages from Tenant.
16.5 Damage Near End of Term
. If at any time during the last six (6) months of this Lease Term (or the last 6 months of any Renewal Term) there is damage for which the cost to repair exceeds one month’s Base Rent, whether or not an Insured Loss, Landlord may terminate this Lease effective sixty (60) days following the date of occurrence of such damage by giving a written termination notice to Tenant within thirty (30) days after the date of occurrence of such damage. Notwithstanding the foregoing, if Tenant at that time has an exercisable option to extend this Lease or to purchase the Premises, then Tenant may preserve this Lease by (a) exercising such option and (b) providing Landlord with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is ten (10) days after Tenant’s receipt of Landlord’s written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Tenant duly exercises such option during such period and provides Landlord with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Landlord shall, at Landlord’s commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Tenant fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Tenant’s option shall be extinguished.
16.6 Abatement of Rent
. In the event of Premises Partial Damage, Premises Total Destruction or Hazardous Material Condition for which Tenant is not responsible under this Lease, the Rent payable by Tenant for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Tenant’s use of the Premises is impaired, and such abatement shall be Tenant’s sole remedy for such impairment of use. All other obligations of Tenant hereunder shall be performed by Tenant, and Landlord shall have no liability for any such damage, destruction, Hazardous Material Condition, remediation, repair or restoration except as provided herein.
17. CONDEMNATION
. If the whole or if any material part of the Premises or Airport is taken or condemned for any public or quasi-public use under either state or federal law, by eminent domain or purchase in lieu thereof (a “Taking”), and (a) such Taking renders the Premises or Airport unsuitable, in Landlord’s reasonable opinion, for the purposes for which they were constructed; or (b) the Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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Premises or Airport cannot be repaired, restored or replaced at reasonable expense to an economically profitable unit, then Landlord may, at its option, terminate this Lease as of the date possession vests in the condemning party. If twenty-five percent (25%) or more of the Premises is taken and if the Premises remaining after such Taking and any repairs by Landlord would be untenantable (in Tenant’s reasonable opinion) for the conduct of Tenant’s business operations, Tenant shall have the right to terminate this Lease as of the date possession vests in the condemning party. The terminating party shall provide written notice of termination to the other party within thirty (30) days after it first receives notice of the Taking. The termination shall be effective as of the effective date of any order granting possession to, or vesting legal title in, the condemning authority. If this Lease is not terminated, Base Rent shall be appropriately adjusted to account for any reduction in the square footage of the Premises. If only a part of the Premises is subject to a Taking and this Lease is not terminated, Landlord, with reasonable diligence, will restore the remaining portion of the Premises as nearly as practicable to the condition immediately prior to the Taking. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of the California Code of Civil Procedure, or any similar or successor Laws. Landlord shall be entitled to any and all compensation, damages, income, rent, awards or any interest thereon which may be paid or made in connection with any such Taking, and Tenant shall have no claim against Landlord for the value of any expired term of this Lease or otherwise; provided, however, that Tenant shall be entitled to receive any award separately allocated by the condemning authority to Tenant for Tenant’s relocation expenses, the value of Tenant’s fixture, equipment and personal property (specifically excluding components of the Premises which under this Lease or by law are or at the expiration of the Term will become the property of Landlord, including, without limitation, fixtures and Alterations), or Tenant’s loss of business goodwill, provide that such award does not reduce any award otherwise allocable or payable to Landlord.
18. DEFAULT
.
18.1 Events of Default
. The occurrence of any of the following shall constitute a “Default” by Tenant:
(a) Tenant fails to make any payment of Rent when due, if payment in full is not received by Landlord within five (5) days after written notice that it is past due. (b) Tenant abandons the Premises as defined in Section 1951.3 of the California Civil Code.
(c) Tenant fails timely to deliver any subordination document or estoppel certificate requested by Landlord within the applicable time period specified hereinbelow. (d) Tenant violates the restrictions on Transfer set forth in Article 13. (e) Tenant ceases doing business as a going concern; makes an assignment for the benefit of creditors; is adjudicated an insolvent, files a petition (or files an answer admitting the material allegations of a petition) seeking relief under any state or federal bankruptcy or other statute, law or regulation affecting creditors’ rights; all or substantially all of Tenant’s assets are subject to judicial seizure or attachment and are not released within thirty Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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(30) days, or Tenant consents to or acquiesces in the appointment of a trustee, receiver or liquidator for Tenant or for all or any substantial part of Tenant’s assets. (f) Tenant fails to perform or comply with any provision of this Lease other than those described in (a) through (e) above, and does not fully cure such failure within fifteen (15) days after notice to Tenant or, if such failure cannot be cured within such fifteen (15) day period, Tenant fails within such fifteen (15)-day period to commence, and thereafter diligently proceed with, all actions necessary to cure such failure as soon as reasonably possible but in all events within ninety (90) days of such notice.
18.2 Remedies
. Upon the occurrence of any Default under this Lease, whether enumerated in Section 18.1 or not, Landlord shall have the option to pursue any one or more of the following remedies without any notice (except as expressly prescribed herein) or demand whatsoever. Without limiting the generality of the foregoing, Tenant hereby specifically waives notice and demand for payment of Rent or other obligations, and waives any and all other notices or demand requirements imposed by applicable Law:
(a) Terminate this Lease and Tenant’s right to possession of the Premises and recover from Tenant an award of damages equal to the sum of the following:
(i) The Worth at the Time of Award of the unpaid Rent which had been earned at the time of termination;
(ii) The Worth at the Time of Award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such Rent loss that Tenant affirmatively proves could have been reasonably avoided;
(iii) The Worth at the Time of Award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of such Rent loss that Tenant affirmatively proves could be reasonably avoided discounted to the then present value;
(iv) Any other amount necessary to compensate Landlord for all the detriment either proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease or which in the ordinary course of things would be likely to result therefrom; and (v) All such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time under applicable law.
The “Worth at the Time of Award” of the amounts referred to in parts (i) and (ii) above, shall be computed by allowing interest at the lesser of a per annum rate equal to: (A) the greatest per annum rate of interest permitted from time to time under applicable law, or (B) the Prime Rate plus 5% as determined by Landlord, and as referred to in part (iii) above, shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award plus one percent (1%).
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(b) Employ the remedy described in California Civil Code § 1951.4 (Landlord may continue this Lease in effect after Tenant’s breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations); or
(c) Notwithstanding Landlord’s exercise of the remedy described in California Civil Code § 1951.4 in respect of an event or events of Default, at such time thereafter as Landlord may elect in writing, to terminate this Lease and Tenant’s right to possession of the Premises and recover an award of damages as provided above.
18.3 No Waiver
. The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such Rent. No waiver by Landlord of any breach hereof shall be effective unless such waiver is in writing and signed by Landlord.
18.4 Waiver of Redemption, Reinstatement, or Restoration . Tenant hereby waives any and all rights conferred by Section 3275 of the Civil Code of California and by Sections 1174(c) and 1179 of the Code of Civil Procedure of California and any and all other laws and rules of law from time to time in effect during the Lease Term or thereafter providing that Tenant shall have any right to redeem, reinstate or restore this Lease following its termination as a result of Tenant’s breach.
18.5 Remedies Cumulative
. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder or now or hereafter existing by agreement, applicable Law or in equity. In addition to other remedies provided in this Lease, Landlord shall be entitled, to the extent permitted by applicable Law, to injunctive relief, or to a decree compelling performance of any of the covenants, agreements, conditions or provisions of this Lease, or to any other remedy allowed to Landlord at law or in equity. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event of Default shall not be deemed or construed to constitute a waiver of such Default.
18.6 Landlord’s Right to Perform Tenant’s Obligations
. If Tenant is in Default of any of its non-monetary obligations under this Lease, in addition to the other rights and remedies of Landlord provided herein, then Landlord may at Landlord’s option, but without any obligation to do so and without further notice to Tenant, perform any such term, provision, covenant or condition or make any such payment and Landlord by reason of doing so shall not be liable or responsible for any loss or damage thereby sustained by Tenant. If Landlord performs any of Tenant’s obligations hereunder in accordance with this Section 18.6, the full amount of the costs and expense incurred or the payments so made or the amount of the loss so sustained shall be immediately be owed by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon demand, as Additional Rent, the full amount thereof Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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with interest thereon from the day of payment by Landlord the lower of ten percent (10%) per annum, or the highest rate permitted by applicable law.
18.7 Severability
. This Article 18 shall be enforceable to the maximum extent such enforcement is not prohibited by applicable Law, and the unenforceability of any portion thereof shall not thereby render unenforceable any other portion.
19. LIMITATION OF LIABILITY
. Notwithstanding anything to the contrary contained in this Lease, the liability of Landlord (and of any successor landlord) shall be governed by applicable state and federal laws for so long as Landlord is a public entity and, at any time thereafter, shall be limited to the interest of Landlord in the Airport as the same may from time to time be encumbered. Tenant shall look solely to Landlord’s interest in the Airport for the recovery of any judgment. Neither Landlord nor any Landlord Related Party shall be personally liable for any judgment or deficiency, and in no event shall Landlord or any Landlord Related Party be liable to Tenant for any lost profit, damage to or loss of business or a form of special, indirect or consequential damage. Before filing suit for an alleged default by Landlord, Tenant shall give Landlord and the Mortgagee(s) whom Tenant has been notified hold Mortgages (defined in Article 22 below), notice and reasonable time to cure the alleged default.
20. SURRENDER OF PREMISES
. At the termination of this Lease or Tenant’s right of possession, Tenant shall remove Tenant’s property including any furniture, fixtures, equipment or cabling installed by or for the benefit of Tenant from the Premises, and quit and surrender the Premises to Landlord, broom clean, and in good order, condition and repair, ordinary wear and tear and damage which Landlord is obligated to repair hereunder excepted. Landlord may, by notice to Tenant not less than sixty (60) days prior to the Expiration Date (except in the event of a termination of this Lease prior to the scheduled Expiration Date, in which event no advance notice shall be required) require Tenant, at Tenant’s expense, remove any Alterations (except as otherwise provided at Section 10.2, above) and repair any damage caused by such removal. If Tenant fails to remove any of Tenant’s property, or to restore the Premises to the required condition, Landlord, at Tenant’s sole cost and expense, shall be entitled (but not obligated) to remove and store Tenant’s property and/or perform such restoration of the Premises. Landlord shall not be responsible for the value, preservation or safekeeping of Tenant’s property. Tenant shall pay Landlord, upon demand, the expenses and storage charges incurred. If Tenant fails to remove Tenant’s property from the Premises or storage, within thirty (30) days after notice, Landlord may deem all or any part of Tenant’s property to be abandoned and, at Landlord’s option, title to Tenant’s property shall vest in Landlord or Landlord may dispose of Tenant’s property in any manner Landlord deems appropriate.
21. HOLDING OVER
. If Tenant fails to surrender all or any part of the Premises at the termination of this Lease, occupancy of the Premises after termination shall be that of a tenancy at sufferance. Tenant’s occupancy shall be subject to all the terms and provisions of this Lease and Tenant shall pay an amount (on a per month basis without reduction for partial months during the holdover) equal to 200% of the sum of the Base Rent due for the period immediately preceding the Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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holdover; provided, however, that if (a) Landlord and Tenant are, in Landlord’s reasonable judgment, actively and continuously negotiating in good faith the terms of a new written lease for the Premises, and (b) Tenant is not then in default beyond any applicable notice and cure period under this Lease, Landlord may, in Landlord’s sole and absolute discretion, waive the increased holdover rental rate described herein for a period not to exceed ninety (90) consecutive days following the expiration or earlier termination of the Term (the “Negotiation Waiver Period”). During the Negotiation Waiver Period, Tenant shall pay holdover Base Rent at the same rate as the Base Rent payable for the last month of the Term, plus all Additional Rent and other amounts due hereunder. No holding over by Tenant shall operate to extend the Term. If Tenant does not surrender possession at the end of the Term or sooner termination of this Lease, Tenant shall indemnify and hold Landlord harmless from and against any and all losses or liability resulting from delay in Tenant so surrendering the Premises including, without limitations, any loss or liability resulting from any claim against Landlord made by any succeeding tenant or prospective tenant founded on or resulting from such delay. Any holding over by Tenant with the written consent of Landlord shall thereafter constitute a lease from month to month.
22. NO SUBORDINATION BY LANDLORD
. Landlord shall not subordinate its fee title in the Airport to any lien arising from or related to any financing obtained by Tenant. The Lease, and the rights of Tenant shall be subject and subordinate in all respects to: (i) all present and future mortgages on the Premises and the property upon which the Premises is located, including all modifications, extensions, supplements, consolidations and replacements thereof; (ii) the provisions and requirements of any existing or future agreement between Landlord and the United States, relative to the development, operation or maintenance of the Airport. Tenant shall not encumber the Lease or its interest therein without first obtaining the written consent of Landlord, which shall be given or withheld in Landlord’s sole discretion.
23. TENANT’S ESTOPPEL CERTIFICATE
. Within ten (10) days after written request therefor, Tenant shall execute and deliver to Landlord, in a form provided by or satisfactory to Landlord, an estoppel certificate stating, that this Lease is in full force and effect, describing any amendments or modifications thereto, acknowledging that this Lease is subordinate or prior, as the case may be, to any Mortgage and stating any other information Landlord may reasonably request, including the Term, the monthly Base Rent, the date to which Rent has been paid, the amount of any security deposit or prepaid rent, whether either party hereto is in default under the terms of the Lease, and whether Landlord has completed any construction obligations hereunder. Any such estoppel certificate may be relied upon by any person or entity purchasing, acquiring an interest in or extending finance with respect to the Airport, or any part thereof. If Tenant fails to provide such certificate within ten (10) days as herein provided, such failure shall at Landlord’s election, constitute a Default and Tenant shall be deemed to have given such certificate as above provided without modification and shall be deemed to have admitted the accuracy of any information supplied by Landlord to a prospective purchaser or mortgagee or deed of trust holder.
24. RELOCATION
. Landlord shall have the right to relocate the entire Premises upon all the following terms, covenants and conditions: (a) Landlord shall have the right to relocate the Premises on not Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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less than ninety (90) days prior written notice given to Tenant at any time during the Term or any extension or renewal thereof; (b) the relocated Premises must be of substantially comparable size to the initial Premises; (c) if Tenant has not occupied the Premises, Landlord shall reimburse Tenant for (i) the necessary and reasonable costs incurred by Tenant in planning for the space of the initial Premises which have been previously improved by Landlord and have no benefit to Tenant’s in the relocation Premises and (ii) such other costs as Tenant may incur as a direct result of relocation which have been previously approved by Landlord; (d) if Tenant is occupying the Premises at the time Landlord gives notices of any such relocation, Landlord shall pay the cost of moving Tenant, its property and equipment to the relocated Premises and shall, without cost or expense to Tenant, improve the new Premises with improvements substantially similar to those located in the space Tenant is to vacate; and (e) all of the other terms, covenants, and conditions of this Lease shall remain unchanged and in full force and effect, except that the Basic Lease Information shall be revised (i) to identify the location of the Premises after such relocation; (ii) state the new rentable square feet of the new Premises, Base Rent and Security Deposit relative to the relocated Premises.
25. NOTICE
. All notices shall be in writing and delivered by hand or sent by registered, express, or certified mail, with return receipt requested or with delivery confirmation requested from the U.S. postal service, or sent by overnight or same day courier service at the party’s respective Notice Address(es) set forth in the Basic Lease Information (“Notice Address”). Each notice shall be deemed to have been received on the earlier to occur of actual delivery or the date on which delivery is refused, or, if Tenant has vacated the Premises or any other Notice Address of Tenant without providing a new Notice Address, three (3) days after notice is deposited in the U.S. mail or with a courier service in the manner described above. Either party may, at any time, change its Notice Address (other than to a post office box address) by giving the other party written notice of the new address.
26. NON-DISCRIMINATION; LABOR PROVISIONS.
26.1 Equal Opportunity
. During the Term, and with respect to person(s) in the Airport or Premises or employment or employees at the Premises, Tenant agrees as follows:
(a) Tenant will not discriminate against any guest, visitor, invitee, customer, employee of Tenant or applicant for employment because of employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender identity, gender expression, age, sexual orientation, or military and veteran status. The employees of Tenant shall be treated during employment, without regard to their employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender identity, gender expression, age, sexual orientation, or military and veteran status. Such action shall include, but not be limited to, the following:
employment, upgrading demotion, or transfer, recruitment or recruitment advertising, layoff or termination, rate of pay or other forms of compensation, selection for training, including apprenticeship. Tenant agrees to post in conspicuous places, notices to be provided by the applicable government agencies, setting forth the provisions of this nondiscrimination provision.
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(b) Tenant will, in all solicitations or advertisements for employees placed by or on behalf of Tenant, state that all qualified applicants will receive consideration for employment without regard to employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender identity, gender expression, age, sexual orientation, or military and veteran status.
(c) Tenant will send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding a notice, advising the labor union or worker’s representative of Tenant’s commitments under this Equal Opportunity Clause and shall post copies of notice in conspicuous places available to employee and applications for employment.
(d) Tenant, through any approved sublease, shall require each of its subtenants to comply with the nondiscrimination provisions contained in this Section 26.1.
26.2 Prevailing Wages and Related Requirements
. Tenant acknowledges and agrees any Alterations made by or on behalf of Tenant to the Premises, or any portion thereof, which are paid for in whole or in part by Landlord or which are considered to have been paid for in whole or in part by Landlord (e.g. by virtue of any rents that are reduced, waived or forgiven) will constitute “[c]onstruction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds…”. (California Labor Code section 1720.) Tenant shall comply with any applicable laws, rules and regulations related to construction wages and other construction matters, if and to the extent applicable to the Premises after the Commencement Date including, but not limited to, the provision of Labor Code Section 1720 et seq. From and after the Commencement Date, Tenant shall indemnify, defend (with counsel reasonably acceptable to Landlord), and hold harmless the Landlord Related Parties against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including Tenant and its contractors) to pay prevailing wages as determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices pursuant to Labor Code Sections 1777.5 et seq., to require any contractor or subcontractor listed on a bid proposal for a public works project be registered with the Department of Industrial Relations pursuant to Labor Code Section 1725.5, to comply with the other applicable provisions of Labor Code Sections 1720 et seq. and 1777.5 et seq., to meet the conditions of Section 1771.4 of the Labor Code, to require the general contractor for any prevailing wage work to furnish electronic certified payroll records directly to the Labor Commissioner at: https://apps.dir.ca.gov/ecpr/das/altlogin, or to comply with any other regulation related to public contracts. Tenant’s obligation to indemnify, defend and hold harmless under this Section 26.3 shall survive termination of this Lease, and shall be interpreted broadly so as to apply to any legal or administrative proceeding, arbitration, or enforcement action.
27. CLOSURE OF AIRPORT
. During any period when the Airport is closed or civil aircraft grounded by any lawful authority restricting the use of the Airport or civil aircraft in such a manner as to interfere substantially with the use of the Premises by Tenant, the Rent payable under this Lease shall abate, and the period of such closure, at the written election of Tenant delivered to Landlord, shall be added to the term of this Lease. During the time of war or national emergency, Landlord shall have the right to lease or lend the landing area of the Airport, or any part thereof, to the United States Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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Government or State government for military or naval use, and if such lease or lending is executed and the use thereunder materially interferes with the use of the Premises by Tenant, the Rent shall abate, and this Lease shall be suspended or terminated, as determined by Landlord.
28. MISCELLANEOUS.
28.1 Governing Law
. This Lease shall be interpreted and enforced in accordance with the Laws of the State of California and Landlord and Tenant hereby irrevocably consent to the jurisdiction and proper venue of such state.
28.2 Severability
. If any section, term or provision of this Lease is held invalid by a court of competent jurisdiction, all other sections, terms or severable provisions of this Lease shall not be affected thereby, but shall remain in full force and effect.
28.3 Attorneys’ Fees
. In the event of an action, suit, arbitration or proceeding brought by Landlord or Tenant to enforce any of the other’s covenants and agreements in this Lease, the prevailing party shall be entitled to recover from the non-prevailing party any costs, expenses (including out of pocket costs and expenses) and reasonable attorneys’ fees incurred in connection with such action, suit or proceeding. Without limiting the generality of the foregoing, if Landlord utilizes the services of an attorney for the purpose of collecting any Rent due and unpaid by Tenant or in connection with any other breach of this Lease by Tenant following a written demand of Landlord to pay such amount or cure such breach, Tenant agrees to pay Landlord reasonable actual attorneys’ fees for such services, irrespective of whether any legal action may be commenced or filed by Landlord.
28.4 Force Majeure
. Whenever a period of time is prescribed for the taking of an action by Landlord or Tenant (other than the payment of Rent), the period of time for the performance of such action shall be extended by the number of days that the performance is actually delayed due to strikes, acts of God, shortages of labor or materials, war, terrorist acts, pandemics, civil disturbances, extreme weather and other causes beyond the reasonable control of the performing party (“Force Majeure”).
28.5 Sale
. Landlord shall have the right to transfer and assign, in whole or in part, all of its rights and obligations under this Lease and in the Airport. Upon transfer, Landlord shall be released from any further obligations hereunder and Tenant agrees to look solely to the successor in interest of Landlord for the performance of such obligations, provided that any successor pursuant to a voluntary, third party transfer (but not as part of an involuntary transfer resulting from a foreclosure or deed in lieu thereof) shall have assumed Landlord’s obligations under this Lease.
28.6 Signs
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. Tenant shall not place any sign upon the Premises without Landlord’s prior written consent. All signage shall comply with Landlord’s signage design criteria, as exist from time to time. In addition, any style, size, materials and attachment method of any such signage shall be subject to Landlord’s prior written consent. The installation of any sign on the Premises by or for Tenant shall be subject to the provisions of this Lease. At Tenant’s sole cost and expense, Tenant shall install and maintain any such signs on the Premises in compliance with all applicable laws, rules and regulations. Unless otherwise expressly agreed herein, Landlord reserves the right to install, and retain all revenues from the installation of, such advertising signs on the Premises, including the roof, as do not unreasonably interfere with the conduct of Tenant’s business.
28.7 Brokers
. Landlord and Tenant each represents and warrants to the other that neither it nor its officers or agents nor anyone acting on its behalf has dealt with any real estate broker except the Broker(s) specified in the Basic Lease Information in the negotiating or making of this Lease.
Each party agrees to indemnify, defend and hold harmless the other from any claim or claims, and costs and expenses, including attorneys’ fees, incurred by the indemnified party in conjunction with any such claim or claims of any other broker or brokers to a commission in connection with this Lease as a result of the actions of the indemnifying party. Provided that this Lease is fully executed by the parties hereto, Landlord shall pay a commission to Landlord’s Broker pursuant to a separate written agreement between Landlord and Landlord’s Broker, and Landlord’s Broker shall be responsible for any fee or commission payable to Tenant’s Broker, if any.
28.8 Access by Landlord
. In addition to access provided by this Lease, Landlord shall be allowed access to the Premises at all reasonable times throughout the term of this Lease, for any reasonable purpose upon prior written notice to Tenant. Landlord will normally give Tenant a minimum of twentyfour (24) hours prior notice of an intention to enter the Premises, unless the entry is reasonably required on an emergency basis for safety, environmental, operations or security purposes.
Tenant shall ensure that a telephone roster is maintained at all times for on-call persons representing Tenant who will be available on short notice, 24 hours a day, 365 days per year, and have authority to use all keys necessary to gain access to the Premises to facilitate entry in time of emergency. Tenant shall ensure that Landlord has a current roster of such on-call personnel and their phone numbers. Tenant shall not change any existing locks, or attach any additional locks or similar devices to any door or window, without providing to Landlord one set of keys therefor. All keys must be returned to Landlord at the expiration or termination of this Lease. Tenant shall have no claim against Landlord for exercise of its rights of access hereunder. Tenant agrees to allow Landlord and its utility supplier reasonable access to the Premises for operation, maintenance, repair and replacement of these utilities systems as may be required. In executing operation, maintenance, repair or replacement of these systems, Landlord agrees to take commercially reasonable steps to limit interference with the use of the Premises by Tenant.
28.9 Waiver of Right to Jury Trial
. Landlord and Tenant waive their respective rights to trial by jury of any contract or tort claim, counterclaim, cross-complaint, or cause of action in any action, proceeding, or hearing brought by either party against the other on any matter arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, or Tenant’s use or occupancy of the Premises, Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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including without limitation any claim of injury or damage or the enforcement of any remedy under any current or future law, statute, regulation, code, or ordinance. Landlord and Tenant agree that this paragraph constitutes a written consent to waiver of trial by jury within the meaning of California Code of Civil Procedure Section 631(f)(2), and Tenant does hereby authorize and empower Landlord to file this paragraph and/or this Lease, as required, with the clerk or judge of any court of competent jurisdiction as a written consent to waiver of jury trial. If the waiver set forth in this Section 27.9 is determined by any court to be invalid because it was executed prior to the commencement of any action, then Landlord and Tenant each covenant and agree to execute and deliver to the other, within five (5) days of a written request by the other, a waiver of the right to trial by jury similar in terms and scope to the waiver set forth in this Section 28.9 at such time following the commencement of such action as such waiver , if then made, would be valid.
28.10 Recordation
. Neither this Lease, nor any memorandum, affidavit nor other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant without the prior written consent of Landlord, which may be granted or withheld in Landlord’s sole and absolute discretion. Any recording thereof in violation of this provision shall make this Lease null and void at Landlord’s election.
28.11 Article and Section Titles
. The Article and Section titles use herein are not to be consider a substantive part of this Lease, but merely descriptive aids to identify the paragraph to which they referred. Use of the masculine gender includes the feminine and neuter, and vice versa.
28.12 Authority
. If Tenant is a corporation, partnership, trust, association or other entity, Tenant and each person executing this Lease on behalf of Tenant does hereby covenant and warrant that (a) Tenant is duly incorporated or otherwise established or formed and validly existing under the laws of its state of incorporation, establishment or formation, (b) Tenant has and is duly qualified to do business in California, (c) Tenant has full corporate, partnership, trust, association or other power and authority to enter into this Lease and to perform all Tenant’s obligations hereunder, and (d) each person (and all of the persons if more than one signs) signing this Lease on behalf of Tenant is duly and validly authorized to do so. Upon execution hereof and at Landlord’s request, Tenant shall provide Landlord with a written certification of its Corporate Secretary or other appropriate authorizing officer or partner attesting that at a duly noticed meeting of its Board of Directors or other governing body a resolution has been unanimously adopted approving Tenant’s execution hereof, thereby binding itself to the terms of this Lease and identifying the person(s) authorized to execute this Lease on behalf of Tenant.
28.13 Quiet Possession
. Landlord covenants and agrees with Tenant that, upon Tenant’s payment of Rent and observing and performing all of the terms, covenants, conditions, provisions and agreements of this Lease on Tenant’s part to be observed or performed, Tenant shall have the quiet possession of the Premises throughout the Term.
28.14 Asbestos Notification for Commercial Property Constructed Before 1979 Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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. Tenant acknowledges that Landlord has advised Tenant that, because of its age, the Airport may contain asbestos-containing materials (“ACMs”). If Tenant undertakes any Alterations as may be permitted by Article 10, Tenant shall, in addition to complying with the requirements of Article 10, undertake the Alterations in a manner that avoids disturbing ACMs present in the Airport. If ACMs are likely to be disturbed in the course of such work, Tenant shall encapsulate or remove the ACMs in accordance an approved asbestos-removal plan and otherwise in accordance with all applicable Environmental Laws, including giving all notices required by California Health & Safety Code Sections 25915-25919.7.
28.15 Lead Warning Statement
. Tenant acknowledges that Landlord has advised Tenant that buildings built before 1978 may contain lead-based paints (“LBP”). Lead from paint, paint chips and dust can pose health hazards if not managed properly. Subject to Article 10 of this Lease, Tenant may at its sole cost and expense, have a state certified LBP Inspector complete a LBP inspection and abatement and provide an abatement certification to Landlord. Landlord has no specific knowledge of the presence of lead-based paint in the Premises.
28.16 OFAC Certification
. Tenant represents, warrants and covenants that: (a) Tenant and its principals are not acting, and will not act, directly or indirectly, for or on behalf of any person, group, entity, or nation named by any Executive Order or the United States Treasury Department as a terrorist, “Specially Designated and Blocked Person” or other banned or blocked person, entity, nation, or transaction pursuant to any law, order, rule or regulation that is enforced or administered by the Office of Foreign Assets Control; and (b) Tenant acknowledges that the breach of this representation, warranty and covenant by Tenant shall be an immediate Default under the Lease.
28.17 Certified Access Specialist Disclosure
. Inspection by Certified Access Specialist. Landlord discloses that the Premises have not undergone inspection by a Certified Access Specialist as referenced in California Civil Code Section 1938 subsection (e) which provides: "A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises." Pursuant to the foregoing Section 1938(e), Tenant acknowledges and agrees that, if Tenant wishes to have the Premises inspected by a CASp: (i) Tenant must notify Landlord on or before the date when Tenant executes this Lease pursuant to the election below; (ii) the inspection will be at Tenant's sole cost and expense; (iii) the inspection must be scheduled through Landlord and in coordination with the Airport manager; (iv) any repairs or modifications necessary to correct any violation of construction-related accessibility standards that is noted in the CASp report shall be Tenant’s responsibility; and (v) Tenant must provide a copy of the CASp report to Landlord on completion. By initialing below, Tenant represents that:
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Tenant wishes to have a CASp inspection of the Premises Initials: ______________ Tenant hereby waives its right a CASp inspection of the Premises Initials: _____________
28.18 Time of the Essence
. Time is of the essence of this Lease and each and all of its provisions.
28.19 Entire Agreement
. This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreements or understandings pertaining to any such matter shall be effective for any purpose. No provision of this Lease may be amended or added except by an agreement in writing signed by the parties hereto or their respective successors-in-interest.
28.20 Rules and Regulations
. Tenant shall faithfully observe and comply with the non-discriminatory rules and regulations attached hereto as Exhibit C and incorporated herein by this reference, as the same may be modified from time to time by Landlord. Any additions or modifications to those rules shall be binding upon Tenant upon Landlord’s delivery of a copy to Tenant.
28.21 Notice to Federal Aviation Administration
. Tenant shall comply with the notification and review requirements covered in Part 77 of the Federal Aviation Administration regulations (14 C.F.R. Part 77) in the event of future construction of a building planned for the Premises, or in the event of any planned modification or alteration of any present or future building or structure situated on the Premises.
28.22 No Exclusive Right
. Nothing herein contained shall be construed to grant or authorize the granting of an exclusive right within the meaning of Section 40103(e) of Title 14 of the United States Code.
28.23 Financial Statement
. Within thirty (30) days after Landlord’s written request, Tenant shall deliver to Landlord the then current financial statements of Tenant, including a balance sheet and profit and loss statement for the most recent prior year, all prepared in accordance with generally accepted accounting principles consistently applied and shall be certified as accurate in all material respect by an officer of Tenant.
28.24 Relocation Benefits
. Tenant acknowledges that upon the expiration or earlier termination of this Lease, for any reason other than a Taking as defined at Article 17, Tenant shall not be a displaced person, and therefore waives any and all claims for relocation benefits, assistances and/or payments under Government Code Sections 7260 et seq., 25 California Code of Regulations Sections 600 et seq., 42 U.S.C. 4601 et seq., 29 C.F.R. Sections 121 et seq. and 49 C.F.R Sections 24.1 et seq. (collectively the “Relocation Assistance Laws”). Any Relocation of the Premises pursuant Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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to Article 24 of this Lease shall be governed by the terms of said article and not the Relocation Assistance Laws. Tenant further acknowledges and agrees that upon the expiration or earlier termination of this Lease for any reason, other than a Taking as hereinabove defined, no claim shall arise, nor shall Tenant assert any claim for loss of business goodwill (as that term is defined at CCP §1263.510) and no compensation for loss of business goodwill shall be paid by Landlord.
28.25 Guaranty Requirement
. As a condition precedent to Landlord’s execution and delivery of this Lease and the effectiveness hereof, Tenant shall cause the individual identified as the “Guarantor” in Exhibit D to execute and deliver to Landlord, concurrently with Tenant’s execution of this Lease, an absolute and unconditional personal guaranty of Tenant’s obligations under this Lease in the form attached hereto as Exhibit D (“Guaranty Agreement”).
28.26 Counterparts
. This Lease may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.
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Landlord and Tenant have executed this Lease as of the day and year first above written.
LANDLORD:
City of Watsonville,
a municipal corporation
By: _____________________________
Tamara Vides
City Manager
Date: _____________________________
ATTEST:
By: _____________________________
City Clerk
Date: _____________________________
APPROVED AS TO FORM:
By: _____________________________
City Attorney
Date: _____________________________
TENANT:
SkyDive Surfcity, Inc.
a California corporation
By: _____________________________
Name: _____________________________
Title: _____________________________
Date: _____________________________
Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E Jacklyn Foust
4/28/2026 | 4:09 PM PDT
Owner
5/4/2026 | 6:57 PM PDT
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EXHIBIT A
PREMISES
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EXHIBIT A-1
PARACHUTE STAGING AREA
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Exhibit A-2
TRANSIENT TIE DOWN RAMP
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EXHIBIT B
COMMENCEMENT LETTER
Date: _____________________
Re: Lease dated as of ______, 20__, by and between City of Watsonville, as Landlord, and ____________________, a ____________________, as Tenant, for ______ rentable square feet in the Airport____ located at ____________________, Watsonville, California.
Dear __________________:
In accordance with the terms and conditions of the above referenced Lease, Tenant accepts possession of the Premises and agrees:
1. The Commencement Date of the Lease is _______;
2. The Expiration Date of the Lease is _____________.
Please acknowledge your acceptance of possession and agreement to the terms set forth above by signing all 3 counterparts of this Commencement Letter in the space provided and returning 2 fully executed counterparts to my attention.
Sincerely Agreed and Accepted:
Landlord: City of Watsonville
By: ___________________
Name: ___________________
Title:
Tenant: ____________________
By: ___________________
Name: ___________________
Title: ___________________
[Exhibit Do not sign]
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EXHIBIT C
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and Regulations. Landlord shall not be responsible to Tenant for the non-performance of any of said Rules and Regulations by or otherwise with respect to the acts or omissions of any other tenants or occupants of the Airport. In the event of any conflicts between the Rules and Regulations and other provisions of this Lease, the latter shall control.
1. Landlord shall have the right to control and operate the public portions of the Airport, the Parachute Staging Area, the Parking Area, and the public facilities, if any, in such manner as it deems best for the benefit of the tenants generally.
2. No advertisements, pictures or signs of any sort shall be displayed on or outside the Premises or Airport without the prior written consent of Landlord. This prohibition shall include any portable signs or vehicles placed within any parking lot or on streets adjacent thereto for the purpose of advertising or display. Landlord shall have the right to remove any such unapproved item without notice and at Tenant’s expense.
3. Storage of forklift propane tanks, whether interior or exterior, shall be in secured and protected storage and enclosure approved by the local fire department and, if exterior, shall be located in areas specifically designated by Landlord. Tenant shall protect electrical panels and Airport mechanical equipment from damage from forklift trucks.
4. Machinery, equipment and apparatus belonging to Tenant which causes noise or vibration that may be transmitted to the structure of the Airport to such a degree as to be objectionable to Landlord or other tenants or to cause harm to the Airport, shall be placed and maintained by Tenant, at Tenant’s expense, on vibration eliminators or other devices sufficient to eliminate the transmission of such noise and vibration. Tenant shall cease using any such machinery which causes objectionable noise and vibration which cannot be sufficiently mitigated.
5. All goods, including materials used to store goods, delivered to the Premises shall be immediately moved into the Premises and shall not be left in parking or exterior loading areas overnight.
6. Tractor trailers which must be unhooked or parked with dolly wheels beyond the concrete loading areas must uses steel plates or wood blocks of sufficient size to prevent damage to the asphalt paving surfaces. No parking or storage of such trailers will be permitted in any parking areas adjacent to the Premises or on streets adjacent thereto.
7. Tenant is responsible for the safe storage and removal of all pallets.
Pallets shall be stored behind screen enclosures at locations approved by Landlord.
8. Tenant shall not store or permit the storage or placement of merchandise in or around the common areas surrounding the Premises. No displays or sales of merchandise shall be allowed in any parking or public areas.
9. Tenant is responsible for the storage and removal of all trash and refuse.
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enclosures at locations approved by Landlord. Tenant may request Landlord to provide trash receptacles for the Premises, and Tenant shall pay as Additional Rent the standard rates established by Landlord for use of such trash receptacles.
10. The toilet rooms, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed and no foreign substances of any kind whatsoever shall be thrown therein. The expense of the repair of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the tenant who, or whose employees, agents, visitors or licensees shall have caused the same.
11. If Tenant shall use the Premises in a manner that creates noxious or objectionable fumes, vapors and/or odors, then Tenant shall provide proper ventilation equipment for the discharge of such fumes, vapors and odors so that they shall not enter into the air conditioning system or be discharged into other vents or flues of the Airport or annoy any of the other tenants of the Airport or adjacent property. The design, location and installation of such equipment shall be subject to the Landlord’s prior written approval.
12. The sashes, sash doors, skylights, windows and doors that reflect or admit light or air into the halls, passageways or other public places in the Airport shall not be covered or obstructed by Tenant.
13. Tenant shall not overload the floor of the Premises.
14. No awnings or other projections over or around the windows or entrances of the Premises shall be installed by any tenant without the prior written consent of Landlord.
15. Tenant shall not permit any animals, including, but not limited to, household pets (but excluding service animals, which are permitted), to be brought or kept in or about the Premises or Airport or any of the common areas.
17. Tenant hereby acknowledges that Landlord shall have no obligation to provide guard service or other security measures for the benefit of the Premises, Parking Area or other areas within and around the Airport. Tenant hereby assumes all responsibility for the protection of Tenant and its agents, employees, contractors, invitees and guests, and the property thereof, from acts of third parties, including keeping doors locked and other means of entry to the Premises closed.
18. No auction, liquidation, fire sale, going out of business or bankruptcy sale shall be conducted in or about the Premises without the prior written consent of Landlord.
19. No tenant shall use or permit the use of any portion of the Premises for living quarters, sleeping apartments or lodging rooms.
20. Tenant, Tenant’s agents, employees, contractors, licensees, or visitors shall not park any vehicles in driveways, service entrances, or areas posted as no parking.
21. If the Premises are or become infested with vermin as a result of the use or any misuse or neglect of the Premises by Tenant, its agents, employees, contractors, visitors or licensees, Tenant shall forthwith, at Tenant’s expense, cause the same to be exterminated from time to time to the satisfaction of Landlord and shall employ such licensed exterminators as shall be approved in writing in advance by Landlord.
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22. Tenant shall not use the name of the Airport for any purpose other than as the address of the business to be conducted by Tenant in the Premises, nor shall Tenant use any picture of the Airport in its advertising, stationary or in any other manner without the prior written permission of Landlord. Landlord expressly reserves the right at any time to change said name without in any manner being liable to Tenant therefor.
23. Tenant, its employees and agents shall not loiter in or on the entrances, corridors, sidewalks, courts, halls, stairways, elevators, vestibules or other areas of the Airport for the purpose of smoking tobacco products or for any other purposes, nor in any way obstruct such areas, and shall use them only as a mean of ingress and egress from the Premises.
24. Landlord reserves the right to exclude from the Airport (including the Parachute Staging Area and the Parking Area) any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of these Rules and Regulations.
25. Tenant shall provide Landlord with current copies of all keys, lock combinations, and, if applicable, alarm codes necessary to access the Premises and any associated secured areas, solely for purposes of responding to emergencies or for access upon at least forty-eight (48) hours’ advance notice. Tenant shall promptly update such keys, combinations, and codes upon any change, and in no event later than five (5) business days after such change.
26. Tenant shall provide Landlord with a written list of at least two (2) emergency contacts, including names, titles, telephone numbers, and email addresses, who are authorized to respond on Tenant’s behalf in the event of an emergency or access need. Tenant shall review and confirm the accuracy of the emergency contact list no less than annually and shall deliver an updated list to Landlord on or before each anniversary of the Commencement Date. Tenant shall further notify Landlord in writing of any change to the information on the emergency contact list within thirty (30) days of such change.
27. Landlord reserves the right at any time to change or rescind any one or more of these Rules and Regulations, or to make such other and further reasonable Rules and Regulations as in Landlord’s judgment may from time to time be necessary for the management, safety, care and cleanliness of the Premises, common areas of the Airport and Airport, and for the preservation of good order therein, as well as for the convenience of other occupants and tenants thereof. Landlord may waive any one or more of these Rules and Regulations for the benefit of any particular tenant, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of any other tenant, nor prevent Landlord from thereafter enforcing any such Rules and Regulations against any or all tenants of the Airport. Tenant shall be deemed to have read these Rules and Regulations and to have agreed to abide by them as a condition to its occupancy of the Premises.
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EXHIBIT D
FORM OF GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (“Guaranty”), is made effective as of ____________, 2026, by Jacklyn Foust (“Guarantor”) to and in favor of the City of Watsonville, California, a municipal corporation (“City”).
A. City and Skydive Surfcity, Inc. a California corporation (“Lessee”), are entering into a lease dated March __, 2026 (“Lease”), for the premises located at 160 Aviation Way, at the Watsonville Municipal Airport (“Airport”) in the City of Watsonville, California, as more particularly described in the Lease, on the terms and subject to the conditions therein.
B. It is a condition precedent to the approval and execution of the Lease by City that Guarantor shall have executed and delivered this Guaranty to City.
NOW, THEREFORE, in consideration of the foregoing, which are incorporated herein by reference, and the approval and execution of the Lease by City and as a material inducement to City to approve and execute said Lease, Guarantor hereby agrees as follows:
1. Guaranty. Guarantor hereby absolutely, irrevocably and unconditionally guarantees (as primary obligor and not merely as surety) to City, its successors and assigns, the following: (a) the full and prompt payment by Lessee of all rents and all other sums payable by Lessee at any time under the Lease, including, without limitation, all interest on past due obligations of Lessee, costs advanced by City, damages, and all expenses (including, without limitation, court costs and reasonable attorney fees) that may arise in consequence of Lessee’s default (“Payment Guaranty”); and (b) the full, faithful and prompt performance and satisfaction by Lessee of each and every one of the terms, conditions, duties, and covenants of Lessee under the Lease, including without limitation, all obligations of Lessee to indemnify and defend City (“Performance Guaranty” and together with the Payment Guaranty, collectively, “Obligations”).
City and Guarantor acknowledge and agree that: (i) the terms of the Lease may be modified by written agreement between City and Lessee; (ii) the Lease may be assigned by City or any assignee of City without consent of or notice to Guarantor; and (iii) this Guaranty shall guarantee the performance of the Obligations under the Lease as so modified or assigned.
2. Rights of City. City shall have the right, at City’s option, either before, during, or after pursuing any other right or remedy against Guarantor, to perform any and all of the Obligations by or through any agent of its selection, all as City, in its sole discretion, deems proper, and Guarantor shall indemnify, defend (with counsel acceptable to City) and hold City free and harmless from and against any and all loss, damage, cost, expense, injury, or liability City may suffer or incur in connection with the exercise of its rights under this Guaranty or the performance of the Obligations, except to the extent that such loss, damage, cost, expense, injury, or liability results from City’s gross negligence, fraud or willful misconduct.
3. Guaranty Absolute. Guarantor expressly agrees that until the Obligations are paid and performed in full, and each and every term, covenant and condition of this Guaranty and the Lease are fully performed, Guarantor shall not be released by or because of:
(a) any act, event, omission or failure to act that might otherwise discharge, reduce, limit or modify Guarantor’s obligations under this Guaranty; Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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(b) any waiver, extension, modification, forbearance, delay or other act, failure to act or omission of City, or its failure to proceed promptly or otherwise against Lessee, Guarantor and/or any security;
(c) any action, failure to act, omission or circumstance that might increase the likelihood that Guarantor may be called upon to perform under this Guaranty or that might affect the rights or remedies of Guarantor as against Lessee;
(d) any dealings occurring at any time between Lessee and City; (e) any lack of validity or enforceability of any provision of the Lease or any other agreement or instrument relating thereto; or
(f) any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Lessee or Guarantor.
Guarantor hereby acknowledges that absent this Section 3, Guarantor might have a defense to the enforcement of this Guaranty as a result of one or more of the foregoing acts, failure to act, omissions, agreements, waivers or matters. Guarantor hereby expressly waives and surrenders any defense to any liability under this Guaranty based upon any of such acts, failure to act, omissions, agreements, waivers or matters. It is the express intent of Guarantor that Guarantor’s obligations under this Guaranty are and shall be absolute, unconditional and irrevocable.
4. Guarantor’s Waivers.
(a) Except as prohibited by applicable law, Guarantor waives any right to require City to (i) make any presentment, protest, demand, or notice of any kind, including notice of change of any terms of payment of the Obligations, default by Lessee or any other guarantor or surety, any action or nonaction taken by Lessee, City, or any other guarantor or surety of Lessee, or the creation of new or additional Obligations; (ii) proceed against any person or entity, including Lessee, before proceeding against Guarantor; (iii) proceed against any collateral for the Obligations, including Lessee’s collateral, before proceeding against Guarantor; (iv) apply any payments or proceeds received against the Obligations in any order; (v) disclose any information about the Obligations, Lessee, the collateral, or any other guarantor or surety, or about any action, nonaction or omission of City; or (vii) pursue any remedy or course of action in City’s power whatsoever.
(b) Guarantor also waives any and all rights or defenses arising by reason of (i) any disability or other defense of Lessee, any other guarantor or surety or any other person or entity; (ii) the cessation from any cause whatsoever, other than payment in full, of the Obligations; (iii) the application of proceeds of the Obligations by Lessee for purposes other than the purposes understood and intended by Guarantor and City; (iv) any act of omission or commission by City that directly or indirectly results in or contributes to the discharge of Lessee or any other guarantor or surety, or the Obligations, or the loss or release of any collateral by operation of law or otherwise; (v) any statute of limitations in any action under this Guaranty or on the Obligations; or (vi) any modification or change in terms of the Obligations, whatsoever, including without limitation, the renewal, extension, acceleration, or other change in the time payment of the Obligations is due and any change in the interest rate, and including any such modification or change in terms after revocation of this Guaranty on the Obligations incurred prior to such revocation.
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(c) Guarantor waives all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to Guarantor by reason of California Civil Code Sections 2787 to 2856, inclusive. (d) Guarantor waives all rights and any defenses arising out of an election of remedies by City even though the election of remedies, such as a non-judicial foreclosure (if applicable) with respect to security for a guaranteed obligation, has destroyed Guarantor’s rights of subrogation and reimbursement against Lessee by operation of Section 580d of the California Code of Civil Procedure or otherwise.
(e) As a condition to payment or performance by Guarantor under this Guaranty, City shall not be required to, and Guarantor hereby waives any and all rights to require City to, prosecute or seek to enforce any remedies against Lessee or any other party liable to City on account of the Obligations or to require City to seek to enforce or resort to any remedies with respect to any security interests, liens or encumbrances granted in favor of City by Lessee or any other party on account of the Obligations. This waiver includes but is not limited to an express waiver of the rights created by California Civil Code Section 2845 and relevant case law. (f) Guarantor understands and agrees that the foregoing waivers are unconditional and irrevocable waivers of substantive rights and defenses to which Guarantor might otherwise be entitled under state and federal law. The rights and defenses waived include, without limitation, those provided by California law. Guarantor acknowledges that Guarantor has provided these waivers of rights and defenses with the intention that they be fully relied upon by City.
Guarantor further understands and agrees that this Guaranty is a separate and independent contract between Guarantor and City, given for full and ample consideration, and is enforceable on its own terms. Until all of the Obligations are paid and satisfied in full, Guarantor waives any right to enforce any remedy Guarantor may have against Lessee or any other guarantor, surety, or other person, and further, Guarantor waives any right to participate in any collateral for the Obligations now or hereafter held by City.
(g) Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor’s full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy.
5. No Right Of Subrogation. Until the Obligations are indefeasibly paid and satisfied in full, expire, are terminated and are not subject to any right of revocation or rescission, Guarantor shall have no right of subrogation against Lessee by reason of any payments or acts of performance by any guarantor, surety, or other person in compliance with the obligations of Guarantor hereunder. Guarantor hereby irrevocably waives all legal and equitable rights to recover from Lessee any sums paid by Guarantor under the terms of this Guaranty.
6. Subordination. Any rights of Guarantor, whether now existing or later arising, to receive payment on account of any indebtedness (including interest and related costs) owed to it by Lessee, or to withdraw capital invested by it in Lessee, or to receive distributions from Lessee, shall at all times be subordinate as to lien and time of payment and in all other respects to the full and prior repayment to City pursuant to the Obligations. Guarantor shall not be entitled to enforce or receive payment of any sums hereby subordinated until the Obligations have been paid and performed in full, and any such sums received in violation of this Guaranty shall be received by Guarantor in trust for City.
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7. Guarantor’s Representations and Warranties. Guarantor represents and warrants that:
(a) All financial statements and other financial information furnished or to be furnished to City are or will be true and correct and do or will fairly represent the financial condition of Guarantor (including all contingent liabilities);
(b) All financial statements were or will be prepared in accordance with generally accepted accounting principles, or such other accounting principles as may be acceptable to City at the time of their preparation, consistently applied; and (c) There has been no material adverse change in the business condition (financial or otherwise), operations or properties of Guarantor since the dates of the statements most recently furnished to City except as disclosed on the financial statements. (d) Guarantor is authorized to execute, deliver and perform under this Guaranty; (e) This Guaranty is a valid and binding obligation of Guarantor except as such enforceability may be limited by (a) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally, and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);
(f) No provision or obligation of Guarantor contained in this Guaranty violates any applicable law, regulation or ordinance, or any order or ruling of any court or governmental agency, and no such provision or obligation conflicts with, or constitutes a breach or default under, any agreement to which Guarantor is a party;
(g) There is no pending or threatened suit or proceeding affecting Guarantor before any court, governmental agency, or arbitrator which might affect the enforceability of this Guaranty, the business, operations, assets, or condition of Guarantor, or Guarantor’s ability to perform under this Guarantee; and
(h) No consent, approval or authorization of or notice to any person or entity is required in connection with Guarantor’s execution of and obligations under this Guaranty.
8. Events Of Default. City may declare Guarantor to be in default under this Guaranty upon the occurrence of any of the following events (“Events of Default”):
(a) Guarantor fails to perform any of its obligations under this Guaranty within ten (10) days of receipt of written demand from City; or
(b) Guarantor revokes this Guaranty or this Guaranty becomes ineffective for any reason; or
(c) any representation or warranty made or given by Guarantor to City proves to be false or misleading in any material respect when made; or (d) Guarantor becomes insolvent or the subject of any proceeding relating to bankruptcy, insolvency or relief of debtors (“Insolvency Proceeding”); or Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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(e) If Guarantor is an individual, Guarantor dies, and Lessee fails to, within sixty (60) days after such death provide City with a replacement guarantor or guarantors acceptable to City, in City’s sole discretion; or
(f) any material adverse change occurs in Guarantor’s business condition (financial or otherwise), operations, properties, or ability to perform under this Guaranty.
9. Additional and Independent Obligations. Guarantor’s obligations under this Guaranty are in addition to its obligations under any other existing or future guaranties, each of which shall remain in full force and effect until expressly modified or released in a writing signed by City. Guarantor’s obligations under this Guaranty are independent of those of Lessee under the Lease. Without prior notice to or demand upon either Guarantor or Lessee, City may bring a separate action, or commence a separate proceeding against Guarantor without first proceeding against Lessee, any other person or any security that City may hold, and without pursuing any other remedy. Guarantor agrees that any releases which may be given by City to Lessee, or any other guarantor, surety or endorser, shall not release Guarantor from this Guaranty.
10. No Waiver; Consents; Cumulative Remedies. Each waiver by City must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from City’s delay in exercising or failure to exercise any right or remedy against Lessee, Guarantor, any other guarantor or surety or any security. Consent by City to any act or omission by Lessee or Guarantor shall not be construed as a consent to any other or subsequent act or omission, or as a waiver of the requirement for City’s consent to be obtained in any future or other instance.
All remedies of City against Lessee and Guarantor are cumulative.
11. No Release. Guarantor shall not be released from its obligations under this Guaranty except by a writing signed by City.
12. Heirs, Successors and Assigns. The terms of this Guaranty shall bind and benefit the heirs, legal representatives, successors and assigns of City and Guarantor; provided, however, Guarantor may not assign this Guaranty, or assign or delegate any of its rights or obligations under this Guaranty, without the prior written consent of City in each instance, which City may give or withhold in its sole discretion.
13. Notices. Except as otherwise specified in this Guaranty, all notices to be sent pursuant to this Guaranty shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
(i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; or (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; provided that if delivery under clauses (i) or (iii) above is refused, then notice shall be deemed delivered on presentation.
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CITY: City of Watsonville
275 Main Street, Suite 400
Watsonville, CA 95076
Attention: Airport Manager
GUARANTOR: __________________
__________________
Attention: Jacklyn Foust
14. Rules of Construction. In this Guaranty, the word “Lessee” includes both the named Lessee and any other person who at any time assumes or otherwise becomes primarily liable for all or any part of the obligations of the named Lessee on the Lease. The word “person” includes any individual, company, trust or other legal entity of any kind. When the context and construction so require, all words used in the singular shall be deemed to have been used in the plural and vice versa. No listing of specific instances, items or matters in any way limits the scope or generality of any language of this Guaranty. All headings appearing in this Guaranty are for convenience only and shall be disregarded in construing this Guaranty.
15. Governing Law; Venue. This Guaranty shall be deemed to be a contract under, and together with any disputes or controversies arising out of or relating to this Guaranty, shall be governed by, and construed and interpreted in accordance with, the laws of the State of California and applicable federal law, without regard to choice of law rules. The parties consent to the jurisdiction and venue of any federal or state court in Santa Cruz County, California, and consent to service of process by any means authorized by California or federal law.
16. Costs And Expenses. If any lawsuit, reference or arbitration is commenced that arises out of, or that relates to this Guaranty or the Lease, the prevailing party shall be entitled to recover from each other party such sums as the court, referee or arbitrator may adjudge to be reasonable attorneys’ fees (including allocated costs for services of in-house counsel) in the action or proceeding, in addition to costs and expenses otherwise allowed by law. In all other situations, including any Insolvency Proceeding, Guarantor agrees to pay all of City’s costs and expenses, including attorneys’ fees (including allocated costs for services of City’s in-house counsel) that may be incurred in any effort to collect or enforce the Lease or any term of this Guaranty.
17. Consideration. Guarantor acknowledges that it expects to benefit from City’s approval and execution of the Lease because of its relationship to Lessee, and that it is executing this Guaranty in consideration of that anticipated benefit.
18. Continuing Guaranty. Guarantor’s obligations under this Guaranty shall be binding upon Guarantor, its heirs, legal representatives, successors and assigns, and shall inure to the benefit of and be enforceable by City and its successors, transferees, and assigns. All of the indebtedness, liabilities and obligations of Lessee to City shall be conclusively presumed to have been created in reliance on this Guaranty.
19. Modifications. This Guaranty may not be modified except in a writing signed by both City and Guarantor. No course of prior dealing, usage of trade, parol or extrinsic evidence of any nature shall be used to supplement, modify or vary any of the terms hereof.
20. Miscellaneous. The illegality or unenforceability of one or more provisions of this Guaranty shall not affect any other provision. This Guaranty may be executed in counterparts, Docusign Envelope ID: 3156B6A2-94EE-84A4-83CD-4D3B7EDE254E
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and all counterparts shall constitute but one and the same document. Time is of the essence in the performance of this Guaranty by Guarantor.
21. Counsel. Guarantor acknowledges that Guarantor has had adequate opportunity to carefully read this Guaranty and to consult with an attorney of Guarantor’s choice prior to signing it.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and delivered as of the date first above written.
GUARANTOR:
Jacklyn Foust
By: ___________________________________
Jacklyn Foust, Personal Guarantor
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1 Reso No. ______ (CM)
Meeting Date: 051226 SWZ ______ TV ______ CC ______
RESOLUTION NO. (CM)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE
APPOINTING DAFNNE BREITLER TO THE CITY OF WATSONVILLE
PLANNING COMMISSION
[DISTRICT 3]
WHEREAS, Section 906 of the City Charter established a seven-member Planning Commission with specific powers and duties; and
WHEREAS, Section 902 of the Charter of the City of Watsonville authorizes each member of the Council to appoint one member to each Commission subject to approval by resolution of the Council adopted by at least four (4) affirmative votes; and WHEREAS, Jenni Veitch-Olson resigned from her seat on the Planning Commission effective May 5, 2026; and
WHEREAS, Council Member Orozco has nominated Dafnne Breitler to fill the vacancy and serve the remainder of the unexpired term, ending December 2026.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:
1. Adopting a Resolution appointing a member to the Planning Commission does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.
2. That Council Member Orozco hereby nominates Dafnne Breitler for appointment to the Planning Commission (expires December 2026), representing District
3. 3. That the Council approves such appointment.
2 Reso No. (CM)
Meeting Date: 051226
4. That the City Clerk is hereby directed to transmit a copy of this resolution to the newly appointed member and to the Secretary of the Planning Commission. ********************************
May 12, 2026
BIZ
SPOTLIGHT
Shalom Cleaners
Hours of Operation
Monday – Friday: 7AM – 6PM
Saturday: 8AM – 2PM
LINK:
https://youtube.com/shorts/9h0jPVTWM-4?feature=share
Senior
Resource Fair
Friday, May 22, 2026
2-5 PM
Celebrate Older Americans Month
with us and learn about resources
available in your community.
This year, this event will be held at the
Watsonville Senior Center.
Early Voting
Early voting availabe in the City
Administrative Offices
Monday – Friday
8am - 5pm
For more information, please call
(831) 768-3010
Spirit of
Watsonville
This year's theme is The Spirit of
1776, The Heart of Watsonville . Get
your creativity caps on and plan a
festive, showy entry!
Early-bird registration fees are in effect
through May 22. Prices increase after
and the application period closes June
4. watsonville.gov
America 250
Fire In the Sky
Saturday, July 4, 2026
Gates open at 4:30 PM
Special Watsonville
America 250 shirt
Price and where to buy coming
soon
Garbage Truck Wrap
1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, May 12, 2026
TO: CITY COUNCIL
WRITTEN BY: ASSISTANT FINANCE MANAGER NOLASCO
RECOMMENDED BY: ADMINISTRATIVE SERVICES DIRECTOR DURAN
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: CONSIDERATION OF THE CITYWIDE USER FEE STUDY AND ADOPTION OF NEW FEES EFFECTIVE FY 2026
RECOMMENDATION:
Staff recommends that the City Council:
1. Adopt a resolution to update the Citywide User Fee Schedule as presented in Appendix A
2. Approve implementation of all fees effective July 20, 2026
3. Approve annual fee adjustments based on the Consumer Price Index (CPI) to maintain alignment with the cost of providing services
BACKGROUND:
The City maintains a schedule of user fees to recover the cost of providing various services, including permits, inspections, administrative services, and facility use among other services. These services provide limited benefit to the community as a whole and primarily benefit specific individuals. The fees are intended to recover the costs from the benefiting individual and reduce reliance on General Fund resources. By law, cities may not charge more than the cost of providing a service. However, cities may choose to recover less than the full cost based on policy considerations. Any remaining cost is subsidized by the General Fund.
The City last conducted a comprehensive review of these fees in 2017, with a limited update in 2022 focused on Community Development fees. Periodic review of these fees is necessary to ensure alignment with the actual cost of service delivery and compliance with applicable legal requirements.
Under the California Constitution, Proposition 218, and the California Code of Regulations, user fees may not exceed the estimated reasonable cost of providing the service for which they are levied, unless placed
2 on the ballot as a measure and approved by a two-thirds vote of the electorate. This is to ensure that fees are fair, transparent, and directly connected to the actual cost of the service being provided.
DISCUSSION:
In June 2025, the Finance department issued a Request for Proposals (RFP) seeking qualified consulting firms to complete a comprehensive review of the City’s user fees. The City engaged with Government Consulting Partners, Inc (GCP) to conduct this study. The primary objective of the comprehensive user fee study was to ensure that the City of Watsonville is accurately accounting for the true cost of providing services and that fees for services reflect those costs.
Methodology:
GCP worked with staff across all departments to evaluate the time and resources required to provide services and to calculate the full cost of each fee. The goal of the comprehensive user fee study is to ensure that existing fees are calibrated to capture the full, true direct and indirect cost of public services.
The comprehensive user fee study included:
Review of existing fee structures
Development of fully burdened hourly rates
Evaluation of staff time required to perform services Comparison of current fees to calculated costs
Identification of opportunities to simplify and improve the fee schedule The comprehensive user fee study covered fees across multiple departments including Airport, City Clerk, Community Development, Finance, Fire, Police, and Public Works.
GCP used a per-unit analysis, also called a “bottom-up” approach to calculate most of the fees in the comprehensive user fee study. This approach analyzes direct staff time required to deliver one unit of the service. Fully burden rates are then applied to reflect services and supplies, as well as the administrative costs and overhead required to deliver each service.
Findings:
Using the above approach, GCP calculated the full cost of providing each service and compared that cost to the City’s current fees. The Comprehensive User Fee Study, FY 2025-2026, prepared by GCP, dated April 2026 (Fee Study) found that many of the City’s current fees do not fully recover the cost of providing services. Based on the Fee Study, the City currently recovers approximately 61% of the actual costs of providing these services, leaving about $1.1 million in unrecovered costs. If the proposed fee adjustments are adopted, overall cost recovery is expected to increase, resulting in an estimated $1.08 million increase in annual revenues to the City. Table 1 below provides a summary of these findings and the fiscal impact of the proposed fee adjustments.
3 The Fee Study also identified opportunities to improve the City’s overall fee structure by simplifying fee categories and removing outdated fees. These changes make the fee schedule easier to administer and better align with current service practices. These changes are shown in Appendix A of this report.
In addition, the Fee Study recommends the addition of two new surcharges:
1. Technology Surcharge – to support ongoing maintenance and upgrades to permitting systems and related technologies
2. General Plan Maintenance Surcharge – to recover the costs necessary to prepare, update, and maintain plans and policies required for development project approvals. This includes the next General Plan Update, a Zoning Code rewrite, and preparation of the Objective Design Standards Both surcharges align with those charged by neighboring jurisdictions and reflect best practices to ensure sustainable, efficient service delivery.
Considerations
Although the Fee Study identified the full cost of providing services, the staff is not recommending full cost recovery for certain fees charged by the Fire Department. Full recovery of fees for false alarms is limited by potential billing and collection challenges.
Although California Government Code 66017 only requires development-related fees, including building, planning, engineering, and other community development fees, to not become effective until 60 days after final action by the City Council, all fees will have the same effective date of July 20, 2026, for simple imposition of the updated fees.
4 Should the new and adjusted fees be adopted, fees will be adjusted annually by the Consumer Price Index (CPI), beginning on July 1, 2027, to keep the fees aligned with the increases in staff costs. As recommended by GCP, the City will monitor revenues generated by the new and adjusted fees and perform a check at both six months and one year to ensure the fees are performing as intended.
Parks and Community Services Department fees are not included in this report and will be brought to Council separately at a later date.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:
The proposed project is not a “project” as defined by CEQA guidelines as it involves fiscal planning that does not have the potential to result in a reasonably foreseeable change in the environment.
STRATEGIC PLAN:
Fiscal Health – The proposed fee adjustments support the City Council’s strategic goal of fiscal health by maximizing revenues and ensuring that fees are charged accurately and fairly.
FINANCIAL IMPACT:
The exact financial impact of this study will depend on the volume of the services requested. However, the financial impact is expected to generate revenue for the City and ensure cost recovery.
ALTERNATIVE ACTION:
City Council may:
1. Reject staff’s recommendations and leave the current fee schedule in effect;
2. Charge a lesser percentage of the full cost of all or any of the fees; or
3. Some combination of these alternatives
ATTACHMENTS AND/OR REFERENCES (IF ANY):
1. Appendix A – Individual Fee Recommendations prepared by GCP
2. Citywide User Fee Study prepared by GCP
Attachment 1
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C O M P R E H E N S I V E U S E R F E E S T U D Y
F Y 2 0 2 5 - 2 0 2 6
P r e p a r e d f o r : C i t y o f W a t s o n v i l l e , C A D a t e : April 2026
P r e p a r e d b y : G o v e r n m e n t C o n s u l t i n g P a r t n e r s , I n c . ( G C P ) Attachment 2
PAGE SECTION
01 1 BACKGROUND AND OBJECTIVES
02 2 APPROACH & METHODOLOGY
05 3 FISCAL IMPACT
07 4 ANALYSIS AND HIGHLIGHTS
20 5 FEE COMPARISON ANALYSIS
21 6 FEE RECOMMENDATIONS
22 APPENDIX A - INDIVIDUAL FEE RECOMMENDATIONS
48 APPENDIX B - COMPARISON SURVEY RESULTS
TABLE OF CONTENTS
Attachment 2
City of Watsonville: User Fee Study
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01 BACKGROUND & OBJECTIVES
In the fall of 2025, the City of Watsonville (City) issued a Request for Proposals (RFP) seeking qualified consulting firms to prepare a comprehensive citywide user fee study. Following the evaluation process, the City Council approved an agreement with Government Consulting Partners, Inc. (GCP), to perform these services.
The City delivers a broad range of services to residents, businesses, and visitors. Many of these services are supported through user fees—charges applied when an individual or business voluntarily requests a service that provides a direct and specific benefit. The City’s most recent comprehensive fee study was completed in 2017, with a subsequent update conducted in 2022 focused specifically on the Community Development Department.
As fiscal constraints on local governments continue to increase, user fees have become an increasingly important revenue source. A user fee is a charge paid by an individual or business that receives the primary benefit of the service, rather than the community. Public agencies may assess user fees when (1) the decision to use the service is voluntary, and (2) the fee is related to the level and cost of the service provided.
State Law
User fees in California are required to conform to the statutory requirements of the California Constitution, Proposition 218 (1996), and the California Code of Regulations, including Government Code 66000 et seq. By law, user fees may not exceed the estimated reasonable cost of providing the services for which they were levied, unless approved by a two-thirds vote of the electorate. Proposition 218 ensures user fees are fair, transparent, and directly connected to the actual cost of the service provided.
In 2010, Proposition 26 was adopted and states that user fees are limited to the "estimated reasonable cost of providing a service" by Government Code section 66014(a) and other supplementary legislation. In particular, Proposition 26 established that fees charged for the use of government property are exempt from Proposition
26. These include fees for parks and facility rentals and other equipment rental fees. All these fees may be set at a price the market will bear.
Pursuant to California Government Code § 66017, any development related fee or charge adopted or increased by a local agency including building planning engineering and other community development fees may not become effective until no sooner than 60 days after final action by the governing body ensuring transparency and providing a defined implementation period following Council adoption. Accordingly approved fee adjustments cannot be implemented immediately and must be scheduled to take effect at least 60 days after adoption.
Study Objectives
GCP’s primary objective in this user fee study was to:
1. Provide the City's decision-makers with a cost analysis that provides a clear picture of the cost recovery as it relates to the city’s user fees.
2. Align the city’s user fees to the city’s cost recovery goals and recommend a change to the current fees to better align with the city’s goals.
3. Provide a comparison survey to help guide the City’s fee recommendations.
This report presented GCP’s comprehensive review of the City of Watsonville’s user fees with the goal of aligning fees with City’s cost recovery goals and Council priorities.
Attachment 2
City of Watsonville: User Fee Study
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The study covered user fees charged by the following departments/divisions:
Airport
City Clerk
Community Development: Building
Community Development: Code
Community Development: Housing
Community Development: Planning
Finance
Fire
Police
Public Works
02 APPROCAH & METHODOLOGY
At the outset of the study, we met with City Management to define and confirm the scope. Following this, we met individually with department leadership. These discussions helped GCP understand departmental goals, City priorities, and the desired outcomes for the updated fee schedule, which in turn helped define the overall project goals. A detailed workplan was then developed to ensure that the proposed schedule aligned with these priorities.
Fee Schedule Structure
A key component of the workplan involves reviewing the City’s existing fees and restructuring where necessary. GCP worked together with departments to identify areas where improvements can be made to fee structures. The review identified opportunities to better align fees with the range of services provided. Each proposed change was intended to streamline fee calculations, improve customer experience, or otherwise advance departmental objectives for the fee schedule.
As part of the review process, GCP surveyed fee schedules from comparable cities to identify the best regional practices and emerging trends. This analysis was shared with staff, along with the compiled fee schedules, to inform decision-making.
The effort provided City staff with an overview of alternative fee structures used by peer agencies and established industry norms. Several guiding principles shaped the updated fee structure:
Reflect Modern Practices: Fee structures evolve as service delivery models and customer expectations change. GCP worked with staff to develop a structure that aligns with Watsonville’s current service mix and incorporates modern technology and administrative practices. Transparency: Linking each fee clearly to its corresponding service enhances transparency, making it easier for users to understand costs and the rationale behind them. Streamlined Administration: Simplifying the fee schedule reduces administrative complexity and improves usability for both staff and the public.
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Costing Methodology
GCP uses a per-unit or case study methodology of analysis whereby one individual unit of service is analyzed in detail and the results extrapolated for a year’s worth of activity. This is the prevalent method of analyzing user fee schedules throughout California because it ensures that one fee or group of fees does not subsidize another group. To calculate the estimated reasonable cost of providing each fee-related service, GCP requested staffing reports, departmental budgets, and internal overhead documents.
Most fees in this study were calculated via a per-unit analysis approach. Also called a “bottom-up” approach, this method analyzes the direct staff time required to deliver one unit of service. Fully burdened rates are then applied to reflect services and supplies, as well as the administrative costs and overhead required to deliver each service, resulting in a detailed per-unit cost assessment.
The per-unit methodology includes the following five steps to build the individual per unit costs:
1. Define the fees to be analyzed
2. Time spent on the fee-related service
3. Develop fully burdened hourly rate
4. Compare total costs to the current fee schedule
5. Annual revenue projections
1. Define the fees to be analyzed
GCP worked with staff to identify any proposed fee, new fees, obsolete fees, and fee structure changes to establish a list of the fees to be analyzed.
2. Time spent on the fee-related service
Once all fee structure decisions were finalized, GCP interviewed subject matter experts (SME) to estimate the average time spent by task on each fee. Each fee was reviewed individually, and City staff worked collaboratively with GCP to identify the specific tasks associated with each service. Table 1 below provides an example of the time/task documentation for a minor encroachment base fee within Public Works.
Sample Task Detail Analyzing fee services at this level of granularity provides higher confidence in study results. Accurate and detailed time estimates, multiplied by staff FBHR’s form the maximum the City may be legally charge by fee category.
3. Develop fully burdened hourly rates (FBHR’s)
Establishing FBHR’s is essential to any user fee study
engagement because these rates lay the foundation for
calculating the full cost of providing services. FBHR’s can be used to determine how much it costs the city to deliver any labor-based service. Reliable FBHR’s ensure the study’s findings, recommendations and resulting fee schedules are based on defensible costs. This promotes both transparency and financial sustainability.
Rate per hour: 136.32 $
Hours Cost
Application intake 0.25 34 $
Review 1.75 239 $
Create Invoice 0.5 68 $
Issuance 0.25 34 $
3 375 $
Full Cost: 375 $
Current Fee: 322 $
Proposed Fee 375 $
Minor Encroachment Permit
Processing Fee
Assistant Engineer
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Calculate the Annual Full Cost of Direct Staff: The FBHR calculation process incorporated data from the following sources:
Staffing costs were calculated using the City’s budgeted compensation data, including salaries and benefits, for employees responsible for performing the fee-related services. Operating costs directly associated with service delivery—such as materials, supplies, and contracted services—were incorporated into the fully burdened rate to ensure a comprehensive reflection of total service costs.
Overhead costs were included and applied to the division’s direct salary and benefit expenses to calculate the fully burdened hourly rates.
o Division overhead: Division overhead includes indirect costs such as labor from managers, supervisors and support staff, internal meetings, training, general counter time, and shared supplies that support overall service delivery within the division. o Citywide overhead: represents the allocation of indirect costs from the City’s cost allocation plan, covering central support service departments such as Human Resources, Information Technology, and Finance that provide essential resources and support to all departments throughout the organization.
Identify Annual Available Work Hours per FTE: This becomes the denominator in the rate.
Conceptually, the idea is to reflect the average number of hours in a year that an FTE is typically available to deliver services. By including only available work hours in the denominator, instead of the traditional 2,080, the rates are “fully burdened” sufficient to recover the full annual cost of one FTE, assuming normal demand levels. For this study GCP used the industry-standard staffing available hours figure of 1,800.
4. Compare total costs to the current fee schedule
Once the fully burdened hourly rate is applied to the time estimates for each fee category, this creates the “total cost” per unit. GCP compared the total cost for each fixed-fee service to the fee currently charged. This provided the initial results on the percentage of current cost recovery under the City’s existing fees.
If the current cost recovery for a particular service is under 100%, this implies the fee does not cover the cost of providing the service and can be increased. If the current cost recovery is over 100%, then the fee is set too high and must be lowered to comply with State laws prohibiting the making of a profit on user fee activities.
5. Annual Revenue Projections
GCP projected the annual fiscal impact for each division by multiplying current and proposed fees by annual demand figures. Demand figures were estimated based on the following assumptions:
Estimates are used for any new or restructured fee categories. Deposit-based fees are often difficult to predict. These fees are based on the type and complexity of the project. Deposit-based fees are seen as revenue neutral since they are based on the actual time spent multiplied by the hourly rate and therefore are assumed to be 100% cost recovery.
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03 FISCAL IMPACT
In cooperation with city staff, GCP developed cost and revenue projections for each area under study.
Costs and revenues were primarily projected by extrapolating individual per-unit results for an entire year of demand activity. The combined findings show an overall $1,084,621 net revenue increase on an annual basis, assuming historic demand levels. The table below summarizes the fiscal impact of our findings and recommendations for each fee area under study.
Table 1: Fee Service Cost Recovery Rates and Revenues
Due to fee restructuring and fluctuations within the construction cycle, this study’s fiscal projections are approximations and should be approached conservatively. It is recommended that staff monitor actual fiscal impacts beginning with the first six months of actual revenue data to ensure the fees are performing the way to which they are intended.
The fiscal impact table shows the current annual fee revenue of $1,732,804. With associated costs of $2,823,211 for an overall cost recover rate of 61%. Leaving $1,090,407 (39%) in unrecovered costs.
If the recommended fee adjustments are adopted, annual revenues are projected to increase to $2,817,425 representing a $1,084,621 annual revenue increase.
FEE AREA
COST OF FEE
RELATED
SERVICES
CURRENT
USER FEE
REVENUE
COST
RECOVERY
RATE
GENERAL
FUND
UNRECOVERE
D COST
PROJECTED
REVENUE
FROM
PROPOSED
FEES
COST
RECOVERY
RATE AT
PROPOSED
FEES
PROJECTED
REVENUE
INCREASE
City Clerk $0 $0 0% $0 $0 0% $0
Community Development Building $1,106,672 $784,000 71% $322,672 $1,106,672 100% $322,672 Community Development Code $12,958 $4,500 35% $8,458 $12,958 100% $8,458 Community Development Housing $0 $0 0% $0 $0 0% $0
Community Development Planning $442,696 $245,699 56% $196,997 $442,693 100% $196,994 Finance $196,733 $157,744 80% $38,989 $196,733 100% $38,989 Fire $180,209 $137,769 76% $42,440 $174,426 97% $36,657 Police $211,031 $155,776 74% $55,255 $211,031 100% $55,255 Public Works $397,877 $247,316 62% $150,561 $397,877 100% $150,561 General Plan Maint. Fee $200,000 $0 0% $200,000 $200,000 100% $200,000 Technology Surcharge $75,035 $0 0% $75,035 $75,035 100% $75,035 TOTAL $2,823,211 $1,732,804 61% $1,090,407 $2,817,425 100% $1,084,621 No volume data were available for the City Clerk Department; The Housing Department reported no revenue last year, and because fees are currently not established, revenue projections are not available at this time.
Fire - the 3% of unrecovered cost is due to false alarm billings PW - Cross support cost ($43k) to CDD will be caputured in the CDD models Fiscal Impact of Proposed Fee Adjustments
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Moving to full cost would result in significant impacts to users. GCP recommends gradually monitoring these fees over the coming years to ensure they remain aligned with actual staff time and service delivery costs.
It is important to note that we also analyzed the Airport Department during this study. The Airport operates as an enterprise fund, a type of proprietary fund financed primarily through fees rather than taxes. Enterprise funds are structured to cover their full costs and maintain financial self-sufficiency. As such, when revenues exceed expenses, surpluses are retained within the fund as reserves to support cash flow, capital projects, bond obligations, and long-term operational stability. These accumulated reserves, while prudent for ensuring uninterrupted service, can result in apparent over-recovery when included in citywide user fee summaries. For this reason, the results for the Airport were not included in the table recovery above, as including them would skew the citywide numbers. Detailed results for the Airport can instead be found in the Analysis Highlights section.
Technology Surcharge
The City does not currently have a technology surcharge. Implementing this fee provides a dedicated revenue stream for maintaining and upgrading permitting systems and related technologies, aligns costs with the users who benefit, and reflects best practices used by most peer cities to ensure sustainable, efficient service delivery.
The City’s projected cost of providing technology services to permit-holders is $75,035 annually, or 5% of total development revenue charges. Implementing this surcharge will produce an additional $75,035 revenue annually. The detailed calculation is presented below, along with a graph illustrating how the City’s technology surcharge aligns with those charged by comparable and neighboring jurisdictions.
General Plan Update Surcharge
The City does not currently have a General Plan Maintenance surcharge. However, Government Code 66014(b) authorizes local agencies to recover costs reasonably necessary to prepare, update, and maintain plans and policies required for development project approvals. Establishing a surcharge would allow the City to recover these costs from development activity that benefits from the planning framework, rather than relying on the General Fund. Many peers and neighboring jurisdictions have implemented similar surcharges to support ongoing planning and policy maintenance.
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To develop the proposed surcharge, GCP estimated the cost of maintaining and periodically updating the General Plan and related state-mandated elements based on current contractor pricing. The revised estimate is intended to fund key long-range planning efforts over the next planning cycle, including the next General Plan Update, a Zoning Code rewrite, and the preparation of Objective Design Standards, while also contributing funding toward the next three Housing Element updates (2031, 2039, and 2047).
The estimated cost for these activities over the next 20-year period is approximately $4,000,000. When amortized over 20 years, this equates to an annual cost of $200,000. Dividing the annual cost of $200,000 by the revenue base subject to the surcharge ($1,549,365) results in a proposed General Plan Maintenance surcharge of 13%.
While the current estimate focuses on the planning efforts described above, GPU surcharge revenue may also be used for other eligible long-range planning activities that support development review and implementation of the General Plan. These may include future updates or amendments to the Zoning Code, form-based codes, public improvement standards, and other policy or regulatory updates necessary to maintain compliance with state law and implement the City’s planning framework.
04 ANALYSIS AND HIGHLIGHTS
The analysis and highlights section summarizes the recommended fee adjustments to each of the fee schedules, such as eliminating outdated fees, introducing new ones, and combining similar charges to enhance transparency and consistency. GCP has presented the key financial results and outlines the final recommended fee structure customized to align with actual service costs and support the department’s broader fiscal and policy objectives. The full list of the proposed fees can be found in Appendix A of this report.
Airport
The City of Watsonville Municipal Airport (KWVI) is a regional general aviation airport and the sole public-use airport in Santa Cruz County, serving the aviation, business, and recreational needs of the City of Watsonville, the County of Santa Cruz, and the Monterey Bay Area. Owned and operated by the City as a self-sustaining Attachment 2
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enterprise operation, the Airport supports approximately 40 percent of regional general aviation activity and accommodates over 60,000 operations annually.
The City of Watsonville Municipal Airport’s user fees are primarily rental- and use-based, covering hangar and tie-down rentals, vehicle parking, and other facility uses, as well as operational services such as fueling, ground power, permits, special events, after-hours access, and administrative support. Fees are structured as flat rates or activity-based charges and are designed to recover the cost of providing and maintaining Airport facilities and services, while remaining clear, consistent, and aligned with the actual cost of service.
The cost analysis for Airport
shows an overall cost recovery
of $4,892,502 (112%) current
fee revenue with a cost of
$4,380,247. If fee
recommendations are adopted,
estimated annual revenue
would increase to $4,933,016
(113%), an increase of $40,514
in additional revenue. These
projections are estimates only;
actual revenues depend on
activity levels, compliance,
billing and collection practices,
and any future changes to fee structures or City policies. Most of the increased revenues come from newly established fee categories related to landing fees and airport access fees.
Airport enterprise funds are structured to operate on self-supporting, meaning that fees charged to users are intended to cover the full cost of providing services and facilities rather than relying on general tax revenues.
Under governmental accounting standards, enterprise funds are expected to recover costs through user charges and may retain revenues that exceed expenses to build reasonable reserves for working capital, contingencies, and future capital needs. A surplus is appropriate because it provides financial stability, protects against revenue shortfalls or unexpected expenditures, and ensures continuity of services without general fund support, as long as reserves remain consistent with cost recovery policies and necessary operating and capital requirements.
Fee Schedule Updates - This section outlines the recommended updates to the Airport Department’s fee schedule based on the findings of this User Fee Study. While the Airport Department recently conducted a thorough comparison survey of its lease and rental services, this study incorporates a few additional services and recommends a few fee restructurings to ensure the fee schedule remains current, equitable, and aligned
FEE AREA
COST OF FEE
RELATED
SERVICES
CURRENT
USER FEE
REVENUE
COST
RECOVERY
RATE
SUBSIDY
PROJECTED
REVENUE
FROM
PROPOSED
FEES
COST
RECOVERY
RATE AT
PROPOSED
FEES
PROJECTED
REVENUE
INCREASE
Airport $4,380,247 $4,892,502 112% ($512,255) $4,933,016 113% $40,514 Attachment 2
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with the full cost of service. These adjustments support transparency and help maintain the long-term financial sustainability of airport operations.
Remove Fees – Staff recommends the following fees because the service may no longer be offered, may not have been requested in many years, or may now be recovered under another current fee, rendering the fee obsolete within the context of the user fee study.
No fees were removed
New Fees - This section introduces recommended fees designed to fairly cover the cost of the department’s programs and services
Commercial Aeronautical Activities Permit Fee (per event) - $150 Staff are recommending Airport Landing Fees, which are charged to aircraft operators for the use of runways and related facilities. These fees are structured to recover the costs of maintaining and operating the runways, lighting, and safety system. By ensuring that users who directly benefit from these services pay their fair share, Landing Fees support the Airport’s self-sufficiency and reduce reliance on non-airport revenues. See below:
Landing Fee: less than 6,500 – no fee
Landing Fee: 6,500 – 50,000 lbs. - $2 per 1,000 lbs.
Landing Fee: 50,000+ lbs. - $3 per 1,000 lbs.
Staff are proposing a new Gate Access Fee to fund the recently replaced airport gate. The fee will amortize the gate’s annualized cost over its useful life and distribute costs equitably among the users who directly benefit, supporting the Airport’s financial self-sufficiency without relying on non-airport revenues. Several other existing fees are also tied to airport access and are structured to recover costs from the users who benefit directly from airport facilities and services. See below:
Airfield Access Credentials - Mobile Device - $50
Airfield Access Credentials - B. Card Key, Replacement - $50 Airfield Access Credentials - D. Key fob, Replacement - $60 Airfield Access Maintenance Fee (Annual) - $50
Restructured Fees
Administrative/Accounting processing fee – This fee went from a flat fee charge to a per hour charge since the time spent varies dramatically by request.
Activities Permit fee – this fee renamed to say, “noncommercial aeronautical activities permit fee” and we also added a “commercial aeronautical activity permit fee” which helps distinguish who is requesting the service.
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City Clerk
The City of Watsonville City Clerk Department serves as the custodian of the City’s official records and provides administrative support for the City Council, commissions, and the public. Key functions include maintaining and archiving official documents, preparing, and distributing agendas and minutes, administering oaths, managing public records requests, overseeing elections, and performing other statutory and administrative duties. Unlike the Finance Department, which collects measurable revenue through the City’s business licensing program, the City Clerk’s activities generate minimal direct user-fee transactions and are episodic. As a result, historical volume data for the department are limited, and annualized revenue projections cannot be reliably calculated at this time.
Fee Schedule Updates - This section outlines the recommended updates to the City Clerk’s fee schedule based on the findings of this User Fee Study. The study incorporates a review of current services and recommends a few fee adjustments to ensure the schedule remains current, equitable, and aligned with the full cost of service. These updates support transparency and help maintain the long-term financial sustainability of the department’s operations.
Remove Fees – Staff recommends the following fees because the service may no longer be offered, may not have been requested in many years, or may now be recovered under another current fee, rendering the fee obsolete within the context of the user fee study.
City Maps & Aerial Photos (6 categories)
Computer General Listings
Mail List on Labels
New Fees - This section introduces recommended fees designed to fairly cover the cost of the department’s programs and services
No new fees recommended
Restructured Fees - This section presents the proposed restructuring of the department’s fee schedule to ensure fees are equitable, transparent, and aligned with the full cost of providing services. The appeals fee was moved to the Planning department fee schedule.
Community Development: Building
The City of Watsonville Building Division plays a critical role in ensuring safe, code-compliant development across the community. The Division manages comprehensive plan review and inspection services for all new construction and fire prevention projects, verifying compliance with the Building and Fire Codes at every stage.
In addition, staff provides guidance and support to residents, contractors, and developers regarding home improvement regulations, permitting requirements, and code compliance, helping to ensure projects are completed safely and efficiently.
Current Building permit fees are calculated based on the occupancy type and square footage of each project, using 19 categories defined in the International Building Code. This approach differs from the traditional valuation-based fee structures used by many other municipalities, providing a more transparent and Attachment 2
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predictable method that aligns closely with the actual scope and complexity of the work being performed.
Through this methodology, fees are closely tied to the level of service required, supporting full cost recovery for plan review, inspections, and administrative support.
To improve usability and align the fee schedule with the City’s construction mix, GCP collaborated with Building staff to streamline the 19 occupancy categories into those most relevant to Watsonville projects. This revised structure draws on best practices from peer jurisdictions, resulting in a simplified, more user-friendly schedule. By consolidating categories, the Division ensures that fees are both equitable and transparent, reflecting the actual cost of services provided while minimizing administrative complexity for applicants and staff.
Overall, the Building Division’s operations and fee structure support efficient, consistent enforcement of building and fire codes, provide clear guidance to the community, and maintain a financially sustainable permitting system that balances cost recovery with public service objectives.
The annual cost of providing plan
check and inspection services to the
community is $1,106,672 annually.
Revenue generated from these
operations is $784,000, for a 71% cost
recovery rate. Adoption of the revised
fee structure and associated fees
would generate an additional
$322,672 annually for a total of
$1,106,672 fee revenue.
GCP utilized a top-down methodology
to evaluate Watsonville’s Building Division fees, a nationally recognized approach endorsed by the International Code Council (ICC). The ICC methodology, which establishes industry standards for building fees, is specifically designed to recover 100% of eligible building-related costs. While the methodology is traditionally applied to valuation-based fee structures, the predominant approach used by most municipalities, GCP adapted it to Watsonville’s square-footage-based fees. This approach was applied consistently across the Division’s permit categories, including building, fire, miscellaneous, and electrical, mechanical, and plumbing permits, ensuring a comprehensive and equitable cost-recovery framework.
Aside from restructuring the building permit categories, no new fees are proposed for the Building division.
Community Development: Code Enforcement
The Code Enforcement Division partners with the community to promote a safe, healthy, and desirable living environment. It supports the quality of life in Watsonville by administering a fair and impartial enforcement program to address violations of City codes and ordinances related to property, buildings, and structures. The Division enforces all relevant Municipal Code regulations associated with building and zoning compliance, ensuring consistent application of standards across the community.
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State law enables cities to recover costs associated with abating properties deemed public nuisances.
Specifically, Health and Safety Code Section 17980.8 govern the abatement of dwellings, while Government Code Sections 38771–38775 address non-dwelling nuisances. The City’s code enforcement cost recovery program is narrowly targeted, applying only to properties or businesses with active code enforcement violations. This approach ensures that cost recovery is equitable, linked to services rendered, and does not impose fees on the broader community.
The cost of fee-related activity within the Code Enforcement division is $12,958 annually. Current revenue is $4,500, for a 35% cost recovery rate. If proposed fee adjustments are adopted, $8,458 additional revenue will be generated, for a total revenue of $12,958 annually. Note that the proposed revenue is higher than current costs because administrative citations are technically penalty fees which are not cost-analyzed.
The division primarily uses administrative citations to recover costs. These fees generate the $4,500 current revenue for the division. Administrative citations are a non-judicial enforcement tool that allows cities to recover costs without resorting to criminal prosecution. The division charges the amounts prescribed by the State of California:
First violation: $100
Second violation: $200
Third and each subsequent
violation: $500
These citations are not currently listed on
the City’s master fee schedule. GCP
recommends that administrative citations
be listed on the master fee schedule,
which is customary practice and increases
transparency.
New Fees – In addition to administrative
citations, the following fee categories are
proposed to increase cost recovery for
Code Enforcement operations. Annual
volume for these fees was conservatively estimated and are projected to generate $8,458 in a typical year. Appeal Fee - Building decision
Appeal Fee – Relocation fee
Release of Liens
Abandoned Residential Property
Community Development: Housing
The City of Watsonville offers programs designed to support low-income residents in purchasing and rehabilitating homes, recognizing the critical role of homeownership in promoting community stability and opportunity. The Housing Division charges a limited set of fees to offset a portion of its operating costs; however, actual revenue from these fees is effectively negligible due to the division’s primary focus on lowincome clients. Accordingly, GCP does not recommend increasing fees at this time.
A regional survey and follow-up discussions with peer housing divisions indicate that modest cost recovery could be achieved by implementing an annual fee for owners or landlords of low-income rental properties.
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This approach would require establishing a “rental registry,” whereby landlords would register their units with the Housing Division, creating a mechanism for equitable fee collection.
GCP recommends that the City evaluate the potential benefits and community appropriateness of creating a rental registry to offset a portion of the Housing Division’s operational costs, while maintaining the Division’s commitment to supporting affordable housing initiatives.
Community Development: Planning
The Planning Division is responsible for guiding the physical development of the City in alignment with local policies, General Plan goals, and community priorities. Its work ensures that new development projects conform to zoning regulations, land use objectives, and other established standards while evaluating potential environmental impacts in accordance with state and local requirements. By providing these services, the Division supports orderly growth, promotes community sustainability, and protects public resources.
This section presents an analysis of the costs associated with reviewing a range of current planning applications and entitlements, including zoning permits, conditional use permits, variances, subdivisions, and other discretionary approvals. The Planning Division delivers these services directly to property owners and developers who seek to construct, modify, or repurpose property within the City. Fees charged for these services are designed to recover the reasonable costs of staff time, review processes, environmental assessments, and administrative support, ensuring that those benefiting from development activities contribute fairly to the resources required to manage them.
Through this cost-recovery framework, the Planning Division balances operational efficiency with transparency and equity, providing clear expectations for applicants while maintaining the City’s capacity to implement longterm planning objectives and safeguard community interests. The analysis further identifies opportunities to align fees with actual service delivery costs, promoting both fiscal responsibility and continued support for sustainable development initiatives.
The annual cost of processing
Planning applications and
permits is $442,696 annually.
Current revenue generated
from these fees is $245,699,
resulting in a 56% cost
recovery rate. If all proposed
fee adjustments are adopted,
$196,994 in additional
revenue would be generated
for a total of $442,693
annually.
The City of Watsonville’s Planning Division uses a fee schedule comprised entirely of flat fees. GCP supports flat fees over deposit-based fees because they are easier to administer, eliminate the Attachment 2
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need for staff time-tracking, and provide applicants with predictable, transparent costs. Depositbased fees, in contrast, are often perceived by the development community as “blank checks” and can create administrative complexity.
Planning staff reviewed the existing fee categories and adjusted improve equity and cost recovery. A Design Review – Minor category was added to accommodate smaller projects that can be handled administratively, and new fees were established for previously unrecovered services.
These changes were informed by a review of regional peer city fee schedules, ensuring that Watsonville’s fees remain transparent, fair, and aligned with actual service delivery.
New Fees – The following fee categories are recommended to help fully recover the cost of current planning operations.
Reasonable Accommodation Application
Density Bonus Application
Project Time Extension – Public Hearing
Minor Design Review Permit
Third-Party Technical Review
Zoning Verification Letter
Master Sign Program Application
Sign Permit – Planning Commission Approval
Staff Hourly Rates – Other Services
SB 330 Pre-applications
SB 4 Applications
SB 35 /SB9/SB10 Applications
AB 2011 Applications
Fire
The City of Watsonville Fire Department provides essential fire protection, prevention, and emergency preparedness services to the City and surrounding communities. The Department is funded in part through user fees that support services such as inspections, permits, plan reviews, special event support, and other fire prevention and operational programs. These fees are structured to recover the actual cost of providing and maintaining services while remaining transparent, consistent, and aligned with the level of service provided.
The Department includes the Fire Prevention Division, which enforces the Fire Code, conducts annual Fire/Life Safety inspections, develops hazard mitigation programs, oversee investigations, and coordinates initiatives such as the Fireworks Task Force and self-inspections for low-hazard businesses. The Operations Division responds to emergency calls within and outside the City, maintains apparatus and stations, provides public education, and develops pre-incident plans for target hazards. Together, these programs ensure community safety while supporting the Department’s mission and core values, providing a foundation for establishing cost-recovery user fees.
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The cost analysis for the Fire
Department shows an overall cost
recovery of $137,769 (76%) current
fee revenue with a cost of
$180,209. If fee recommendations
are adopted, estimated annual
revenue would increase to
$174,420 (97%), an increase of
$36,651 in additional
revenue. These projections are
estimates only; actual revenues
depend on activity levels,
compliance, billing and collection
practices, and any future changes to fee structures or City policies. It is important to note that a 100% recovery is not recommended due to potential billing and collection challenges with false alarms. While additional revenues may be generated from some of the newly established fees, projections were not included because historical data is not yet available. GCP recommends monitoring revenues from these new fee categories over the first six months to establish reliable annual revenue expectations.
Fee Schedule Updates - This section outlines the recommended updates to the Fire Department’s fee schedule based on the findings of this User Fee Study. The study incorporates a review of current services and recommends a few fee adjustments to ensure the schedule remains current, equitable, and aligned with the full cost of service. These updates support transparency and help maintain the long-term financial sustainability of the department’s operations.
Remove Fees – Staff recommends the following fees because the service may no longer be offered, may not have been requested in many years, or may now be recovered under another current fee, rendering the fee obsolete within the context of the user fee study.
No fees were removed
New Fees - This section introduces recommended fees designed to fairly cover the cost of the department’s programs and services.
Operational Permits - Annual Renewal – to be charged per hour to covers the review and inspection costs associated with renewing operational fire permits. First Responder Fee - On scene medical care (no transport) - $537 per response - This fee helps recover the costs of advanced medical response by Fire Department first responders, a practice now being adopted by more than twenty fire agencies in California and most recently implemented by San José’s Fire Department.
Restructured Fees - This section presents the proposed restructuring of the department’s fee schedule to ensure fees are equitable, transparent, and aligned with the full cost of providing services. Title 19 Inspections (Fire User Fees) - The City currently charges fire inspection fees by the hour, which can result in inconsistencies because inspection times may vary due to staff availability, property complexity, and other factors. Establishing fee categories based on square footage allows the department to match costs more accurately to the scope of work required for each property. This Attachment 2
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approach provides a fairer, more predictable fee structure and aligns with industry standards, which typically base fire inspection fees on the size and complexity of the property being inspected. The new, proposed structure is as follows:
o Title 19 Inspections (fire user fees) - 0-2,500 sqft - $240 flat fee o Title 19 Inspections (fire user fees) - 2,501 – 5,000 sqft - $280 flat fee o Title 19 Inspections (fire user fees) – 5,001 – 10,000 sqft $320 flat fee o Title 19 Inspections (fire user fees) – over 10,001 sqft $399 flat fee + per hour as needed Finance
The City of Watsonville Finance Department plays a central role in administering the City’s business licensing program, which serves as its primary area of user fee activity. The Department is responsible for the issuance, renewal, and management of business licenses for entities operating within the City, ensuring compliance with local regulations, and maintaining accurate records of business activity. User fees associated with business licensing are designed to recover the reasonable costs of providing these services, including application processing, account maintenance, compliance monitoring, and customer support, while remaining transparent, equitable, and aligned with the level of service delivered.
The Finance Department’s business licensing functions include reviewing and processing new business applications, coordinating with other City departments for zoning and regulatory compliance, administering annual renewals, and managing enforcement activities related to unlicensed businesses. The Department also supports outreach and customer service efforts to assist businesses in understanding licensing requirements and maintaining compliance. Together, these activities promote an organized and fair business environment, while providing a structured basis for establishing and maintaining cost-recovery user fees.
The cost analysis for the Finance
Department shows an overall cost
recovery of $157,744 (80%) current
fee revenue with a cost of
$196,733. If fee recommendations
are adopted, estimated annual
revenue would increase to
$196,733 (100%), an increase of
$38,898 in additional
revenue. These projections are
estimates only; actual revenues
depend on activity levels,
compliance, billing and collection practices, and any future changes to fee structures or City policies.
No fee schedule restructuring, addition, or deletions were made. The primary focus was the City’s business license fee and ensuring that the actual cost of providing the service was identified.
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The City’s business license fee is currently set at $47.70. Based on the results of this user fee study, the calculated full cost to provide this service is $59.49 per license. Accordingly, the study recommends increasing the fee to $59.49 to more accurately reflect the cost of service and improve cost recovery.
Due to the high volume of business license activity processed by the City each year, updating the fee to the calculated cost would result in an estimated additional $38,898 in annual revenue. This adjustment would help ensure that the program more fully recovers the costs associated with administering the City’s business licensing services while maintaining transparency and consistency in the City’s fee structure.
Police
The City of Watsonville Police Department provides essential law enforcement, public safety, and community services to the City and surrounding communities. The Department is funded in part through user fees that support programs such as alarm registration, abandoned vehicle enforcement, garage sale permits, dispatch services, and other operational and administrative programs. These fees are structured to recover the actual cost of providing and maintaining services while remaining transparent, consistent, and aligned with the level of service provided.
The Department includes specialized divisions and programs that support community safety. Its Alarm Program requires registration of residential and commercial security alarms to ensure effective monitoring and compliance. The Abandoned Vehicle Program manages removal and reporting of vehicles in violation of City codes. Other services include dispatch coordination through Santa Cruz Regional 911, oversight of garage sale permits, and public engagement programs such as Ride-Alongs, which allow residents to observe the day-today duties of Police Officers. Together, these programs ensure public safety, maintain operational readiness, and provide a foundation for establishing cost-recovery user fees that support the Department’s mission and core values.
The cost analysis for the Police
Department shows an overall
cost recovery of $155,776
(74%) current fee revenue with
a cost of $211,031. If fee
recommendations are
adopted, estimated annual
revenue would increase to
$211,031 (100%), an increase
of $55,255 in additional
revenue. These projections are
estimates only; actual revenues
depend on activity levels,
compliance, billing and collection practices, and any future changes to fee structures or City policies.
Additional revenues may be generated from some of the newly established fees; projections were not included because historical data is not yet available. GCP recommends monitoring revenues from these new fee categories over the first six months to establish reliable annual revenue expectations.
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Fee Schedule Updates - This section outlines the recommended updates to the Police Department’s fee schedule based on the findings of this User Fee Study. The study incorporates a review of current services and recommends a few fee adjustments to ensure the schedule remains current, equitable, and aligned with the full cost of service. These updates support transparency and help maintain the long-term financial sustainability of the department’s operations.
Remove Fees – Staff recommends the following fees because the service may no longer be offered, may not have been requested in many years, or may now be recovered under another current fee, rendering the fee obsolete within the context of the user fee study.
Concealed Weapon Permit (original)
Concealed Weapon Permit (renewal)
Limousine Driver Permit
Card Room Permit
Pool Room Permit
Class B. Medium rig tows for vehicles 6,000 pounds to 20,000 gross vehicle weight Class C. Big rig tows for vehicles 20,000 pounds or larger gross vehicle weight Gate Fees - Onetime fee only
Hourly Fee (after first hour) Per 15 minutes Class A
Hourly Fee (after first hour) Per 15 minutes Class B
Hourly Fee (after first hour) Per 15 minutes Class C
Service Calls Class A
City Towing Service Fee
Range Fees
Garage/Yard Sale Permit
New Fees - This section introduces recommended fees designed to fairly cover the cost of the department’s programs and services.
No new fees recommended
Restructured Fees - This section presents the proposed restructuring of the department’s fee schedule to ensure fees are equitable, transparent, and aligned with the full cost of providing services. No fee service was restructured
Public Works
The City of Watsonville Public Works & Utilities Department provides essential infrastructure operations and municipal services to the City and surrounding communities. The Department is funded in part through user fees that support services such as the operation and maintenance of the City’s potable water system, stormwater system management, and road design and construction oversight.
These fees are structured to recover the actual cost of providing and maintaining services while remaining transparent, consistent, and aligned with the level of service provided. The Department includes the Water Division, which ensures safe and reliable drinking water; the Solid Waste Division, which manages residential and commercial waste collection and recycling; the Engineering Division, which oversees construction and infrastructure projects; and the Conservation and Education Division, which provides residents and businesses Attachment 2
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with tools and resources to conserve natural resources. Together, these programs ensure the efficient delivery of vital public services while supporting the Department’s mission and core values, providing a foundation for establishing cost-recovery user fees.
The cost analysis for the
Public Works department
shows an overall cost
recovery of $247,316
(62%) current fee
revenue with a cost of
$397,877. If fee
recommendations are
adopted, estimated annual
revenue would increase to
$397,877 (100%), an
increase of $150,561 in
additional revenue. These
projections are estimates
only; actual revenues depend on activity levels, compliance, billing and collection practices, and any future changes to fee structures or City policies. It is important to note that the Public Works Department provides support to the Planning Department for several planning permit applications. GCP was able to identify $41,586 in staff costs from Public Works associated with these planning applications. This revenue will be recognized in the Planning model and is not included in the figures from the table above. However, we are providing this number for transparency and for potential revenue recognition purposes—should the City wish to transfer it from Planning to Public Works.
Additionally, some newly established fees may generate additional revenue. Projections for these fees were not included due to a lack of historical data. GCP recommends monitoring revenue from these new fee categories over the first six months to establish reliable annual revenue expectations.
Fee Schedule Updates - This section outlines the recommended updates to the Public Works Department’s fee schedule based on the findings of this User Fee Study. The study incorporates a review of current services and recommends a few fee adjustments to ensure the schedule remains current, equitable, and aligned with the full cost of service. These updates support transparency and help maintain the long-term financial sustainability of the department’s operations.
Remove Fees – Staff recommends the following fees because the service may no longer be offered, may not have been requested in many years, or may now be recovered under another current fee, rendering the fee obsolete within the context of the user fee study.
Lot Split
Main Extension Pipeline Construction: Application Fee 4”, 6”, 8”, 10”, 12”, over 12” Main Extension Pipeline Construction: Right of Way Deed Check Fee 4”, 6”, 8”, 10”, 12”, over 12” Construction and Fire Hydrant Meters: Construction meter deposit Attachment 2
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Construction and Fire Hydrant Meters: Penalty for unauthorized relocation of hydrant meter Water Meter Drop-in Charge: Main extension built by others Per sheet - Initial Water Meter Drop-in Charge: Re-check fee (due @ time of third submittal) Per sheet Water Meter Drop-in Charge: Engineering and inspection for main extensions built by others 7.0% of estimated cost of improvements
Fire Flow Check – All other times
New Fees - This section introduces recommended fees designed to fairly cover the cost of the department’s programs and services.
Third Party Plan Check – Actual Cost: Covers cost of a third-party plan check contractor. Transportation Permits (per trip and annual) – Set by state: Fees charged for issuing transportation permits, as required and established by state regulations. Mwelo – Consultant Actual Cost + 15%: Recovers consultant costs plus a 15% administrative overhead for specialized project review services.
Well Drilling Permit – $521 flat fee: A fixed fee to cover processing and inspection of well drilling permit applications.
Stormwater Fees – Per Hour: Charges for City staff time spent managing stormwater-related permits, inspections, and compliance activities.
Cross-Connection Program – Per Hour: Fees for staff time devoted to administering and inspecting the City’s cross-connection control program.
Restructured Fees - This section presents the proposed restructuring of the department’s fee schedule to ensure fees are equitable, transparent, and aligned with the full cost of providing services. Drainage Study Review – Previously set as a fixed fee of $1,151, staff recommend splitting this into tiers to better reflect the effort required: Tier 1 for smaller reviews and Tier 2 for larger, more complex reviews.
o Tier 1 – Proposed fee: $273 flat fee
o Tier 2 – Proposed fee: Contractor’s time and materials + 15% administration 5 COMPARISON SURVEY RESULTS
It is common for agencies to compare their fees with those of other jurisdictions; however, such comparisons are not always apples-to-apples. For example, an appeal fee at another agency may be subsidized, meaning the full cost of service is not reflected. Similarly, when comparing recreation fees— such as athletic field rentals—it can be difficult to account for differences in field condition, amenities, or level of maintenance. We often expand our research beyond the selected peer agencies in order to find information that is more in line with the fee we are comparing. While a comparison survey can offer helpful context and highlight key considerations when setting fees, it should serve as a reference point rather than the sole basis for fee decisions. The comparison survey results can be found in Appendix B of this report. Appendix B illustrates the results of the comparison survey, and we highlight select fees in graphs—particularly those that may be new, increasing significantly, and/or experiencing high levels of activity.
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Key considerations when reviewing comparison survey results:
Service Costs Vary - Differences in staffing, operations, and overhead costs means fees are not always directly comparable.
Policy Choices Matter - Some agencies keep fees low by subsidizing them to support access or other goals.
Different Services - Fees may reflect different levels or types of service, even if the name is the same. Compliance - Fees must reflect the actual costs to stay legally compliant, regardless of what others charge.
06 RECOMMENDATIONS
1. GCP recommends the departments update its user fees in non-study years by an annual inflation index, such as a Consumer Price Index (CPI) to keep fees closely aligned with staffing costs.
Certain fees are exempt from these annual indexed adjustments, such as those limited by the State or Federal government to a specific dollar amount and should not and CPI should not be applied to these fees.
2. GCP recommends the city monitor the revenue generated by new and adjusted fees and perform a check at both six months and one year to ensure that any new or restructured fees are performing the way they were intended and that any increase to recreation fees does not result in a loss of participants.
3. GCP recommends that Watsonville conduct a detailed analysis at least every three to five years, with minor adjustments, such as new fees arising from new legislation, be incorporated as needed.
Individual fee recommendations can be found in Appendix A of this report.
Attachment 2
A P P E N D I X A
I N D I V I D U A L F E E R E C O M M E N D A T I O N S Attachment 2
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APPENDIX A – INDIVIDUAL FEE RECOMMENDATIONS
AIRPORT
Fee Category Current Fee Proposed Fee Fee Description
1 Permanent Hangars - (a) Hangars A-4, 5, 6, 7, 8 $315 $315 per month 2 Permanent Hangars - (a) Hangars A-1, 2, 3, 9, 10 $350 $350 per month 3 Permanent Hangars - (b) Hangars B, C, D, E, 3, 4, 5, 6, 7, 8 $315 $315 per month 4 Permanent Hangars - (b) Hangars 1, 2, 9, 10 $350 $350 per month 5 Permanent Hangars - (c) Hangars F, G, H, I, J, K $450 $450 per month 6 Permanent Hangars - (d) Hangars M, L $1,020 $1,020 per month 7 Permanent Hangars - (e) Hangars W, X, Y, Z $435 $435 per month 8 Permanent Hangars - (f) Mini Hangars $310 $310 per month 9 Permanent Hangars - (g) Corporate Hangars $1,945 $1,945 per month 10 Ground Power Unit Servie Fee - Min one hour $200 $200 min one hour 11 Ground Power Unit Servie Fee - After one hour/per hour $100 $100 after one hour 12 Permanent Tie-Downs (a) Tail-in Spots (tie-downs impacted by Compass Rose relocation) $90 $90 per month
13 Permanent Tie-Downs (b) Tail In Spots $100 $100 per month 14 Permanent Tie-Downs (c) Taxi-in Spots Singles $125 $125 per month 15 Permanent Tie-Downs (c) Taxi-in Spots Twins under 12,500 pounds $200 $200 per month 16 Permanent Tie-Downs (c) Taxi-in Spots Aircraft over 12,500 pounds $700 $700 per month 17 Temporary Tie-Down - (a) Single Engine Per Week $10 $10 per night 18 Temporary Tie-Down (a) Single Engine Per Night $40 $40 per week 19 Temporary Tie-Down (b) Twin Per Night $15 $15 per night 20 Temporary Tie-Down (b) Twin Per Week $60 $60 per week PER UNIT ANALYSIS City of Watsonville - FY 2025-2026
AIRPORT
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` Fee Category Current Fee Proposed Fee Fee Description 21 Temporary Tie-Down (b) Twin Turbo Prop/Fan Night $30 $30 per night 22 Temporary Tie-Down (b) Twin Turbo Prop/Fan Week $120 $120 per week 23 Temporary Tie-Down (c ) Aircraft over 12,500 Pounds Per Night $100 $100 per night 24 Temporary Tie-Down (c ) Aircraft over 12,500 Pounds Per Week $400 $400 per week 25 Hangar Waiting List - (a) Initial application $50 $150 flat fee 26 Hangar Waiting List - (b) Annual fee $100 $100 flat fee 27 End Rooms - (a) A, B, C, D, E $150 $150 per month
28 End Rooms - (b) W, X, Y, Z $200 $200 per month
29 Special Events/Slot Reservation Fees $500 $500 flat fee 30 Special Event Security Fee (waived with fuel purchase) $250 $250 flat fee 31 After Hours Fueling Fee $200 $200 per call
32 Commercial Operator Permit Fee (per event) $100 $154 per event 33 Longt Term Vehicle Parking - Day $5 $5 per day
34 Longt Term Vehicle Parking - Week $30 $30 per week
35 Longt Term Vehicle Parking - Month $75 $75 per month 36 Non Commercial Aeronautical Activities Permit Fee (per event) $15 $15 per permit 37 Commercial Aeronautical Activities Permit Fee (per event) NEW $150 New Fee 38 Derelict/Dilapidated Aircraft Fee $500 $500 Annually 39 Non Operational Aircraft Storage Rate
up to 1.50 times
operational storage
rate
up to 1.50 times
operational storage
rate
up to 1.50 times
operational storage
rate
40 Non Compliant Stored Aircraft Fee $500 $500 Annually 41 Aircraft Emergency Runway Removal - Piston Single, Twin and Helicopter (35ft rotor) $300 $300 flat fee 42 Aircraft Emergency Runway Removal Helicopter, Turboprop and Turbo Fan Actual Cost Actual Cost Actual Cost 43 Non-Commercial MoGas Fueling (annual) $15 $15 Annually PER UNIT ANALYSIS City of Watsonville - FY 2025-2026
AIRPORT
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` Fee Category Current Fee Proposed Fee Fee Description 44 Commercial MoGas Fuel Flow Rate/per gal $0.01 $0.01 per gal 45 Commercial Aeronautical Activity Permit (annual) $100 $200 Annually 46 Commercial Aeronautical Operator Permit Fee (annual) $100 $200 Annually 47 Administrative/Accounting Processing Fee $60 $150 Per Hour 48 Storage Unit Reinstatement Fee $150 $150 flat fee
49 Tenant Vehicle Security Decal Fee $5 $5 flat fee
50 Gate Card Access Annual Fee $50 $50 Annually
51 Gate Access Fee, Per Card or Fob $25 $25 flat fee
52 Airport Operation Specialist Services (Min half hour) $80 $150 per hour 53 Advertising Airport Entry Signage Rate (Available space only;annual) $0 $0 Between / Annually 54 Landing Fee - less than 6,500lbs $0 $0 New Fee, No Fee 55 Landing Fee - less than 6,500-50,000lbs $2 $2 New Fee - Per 1,000 pounds
56 Landing Fee - 50,000+ lbs $3 $3 New Fee - Per 1,000
pounds
57 Airfield Access Credentials - Mobile Device NEW $50 $0 58 Airfield Access Credentials - B. Card Key, Replacement NEW $50 New Fee 60 Airfield Access Credentials - D. Key fob, Replacement NEW $60 New Fee 61 Airfield Access Maintenance Fee (Annual) NEW $50 New Fee PER UNIT ANALYSIS City of Watsonville - FY 2025-2026
AIRPORT
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CITY CLERK
Fee Category
1 Form 700 non-filers $12.55 $10.00 $10 per day Max at $100. 2 Original Campaign Statements - late fee $12.55 $10.00 $10 per day Max at $100. 3 FPPC Forms Copies $0.11 $0.10 Per Page
4 City Maps & Aerial Photos: 8.5 X 11.0 in $12.55 Remove 5 City Maps & Aerial Photos: 11.0 X 17.0 in $12.55 Remove 6 City Maps & Aerial Photos: 18.0 X 24.0 in $12.55 Remove 7 City Maps & Aerial Photos: 24.0 X 36.0 in $37.66 Remove 8 City Maps & Aerial Photos: 36.0 X 48.0 in $50.23 Remove 9 City Maps & Aerial Photos: Customize Request $94.17 Remove 10 Public Improvement Standards $0.00 Actual Duplication Cost 11 Sepias $0.00 Actual Duplication Cost
12 Documents - Financials, Budgets, Special Reports, General Plan $0.00 Actual Duplication Cost
13 Computer generated listings $94.17 Remove
14 Mailing list on labels $94.17 Remove
15 Business License Processing Service Charge $47.70 $59.49 Each 16 Returned check fee $25.00 $25.00 Each
17 Copy Costs $0.25 $0.25 Per Page
18 Digital Copy on CD/Thumbdrive $10.00 $10.00 Each
19 Appeals $0.00 Move to Planning Schedule
20 AV for Rental of Council Chambers $30.00 $35.00 Per Hour (2 hour Minimum) 21 Elections - Notice of Intent: Election Code 9202(b) $200.00 $200.00 Refundable if the inititative qualifies for the ballot
Proposed Fee Fee Description
City of Watsoville - FY 2025-2026
CITY CLERK
PER UNIT ANALYSIS
Current Fee
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COMMUNITY DEVELOPMENT: BUILDING
City of Watsonville - FY 2025-2026
BUILDING
Fee Category Current Fee Proposed Fee Fee Description
SQUARE FOOTAGE BUILDING PERMIT FEES
1 New ADU n/a $2,455 Base Fee
a New ADU - Plus Each Additional Square Foot over 500 sqft n/a $4.00 above 500 sf b New R3/SFD/Duplex n/a $10,456 Base Fee
c New R3/SFD/Duplex - Plus Each Additional Square Foot over 2,500 sqft n/a $4.00 above 2,500 sf d New Multifamily (3 or more units) n/a $8,696 Base Fee e New Multifamily (3 or more units) - Plus Each Additional Square foot over 3,000 sqft. n/a $2.70 above 3,000 sf
f New Commercial Shell n/a $4,500 Base Fee
g New Commercial Shell -Each Additional Square Foot over 3,000 sqft n/a $1.35 above 3,000 sf h New Commercial n/a $6,927 Base Fee
i New Commercial - Plus Each Additional Square Foot over 3,000 sqft n/a $2.16 above 3,000 sf j New Accessory Structure - U Occupancy n/a $707 Base Fee k New Accessory Structure - Plus Each Additional Square Foot over 300 sqft n/a $1.35 above 300 sf l Commercial/Residential Alteration or Addition n/a $1,021 Base Fee m Comm/Residential Alteration or Addition - Pluse Each Additional Square Foot over 300 sqft n/a $2.70 above 300 sf
n New Greenhouse n/a $1,156 Base Fee
o New Greenhouse - Plus Each Additional Square Foot over 1,000 sqft n/a $0.94 above 1,000 sf p Plan Check - All Occupancies Hourly Rate 67% of Bldg Pmt
MISCELLANEOUS BUILDING PERMIT FEES
2 Hourly Inspection Fee $180 $254 Per hour
3 Building Reinspection fee $180 $254 Fixed Fee
4 Antenna Tower (up to 40' high) $1,314 $1,855 Fixed Fee 5a Awning (up to 100 lf.) $299 $422 Fixed Fee
5b Awning Addt'l 10 lf $24 $34 Ea. Addtl
6a Balcony addition (up to 200 sq ft.) $424 $599 Fixed Fee 6b Addt'l each 100sq ft. $36 $51 Ea. Addtl
7 Bay window $138 $195 Fixed Fee
8a Covered Porch (up to 300 sq ft.) $538 $759 Fixed Fee 8b addt' 100 sqft $24 $34 Ea. Addtl
9a Deck (up to 300 sq ft.) $299 $422 Fixed Fee
9b Addt'l each 100sq ft. $24 $34 Ea. Addtl
10a Demolition (up to 3,000 s.f.) $538 $759 Fixed Fee
10b Demolition Each additional 3,000 s.f. or fraction thereof $192 $271 Fixed Fee 11 Flag pole up to 20' high $198 $279 Fixed Fee
12a Masonry fence up to 6' high (standard design) 1st 50 lf $359 $507 Base Fee 12b Masonry fence up to 6' high (standard design) each additional 50 lf $96 $136 Ea. Addtl 13a Masonry fence up to 6' high (special design) 1st 50 lf $538 $759 Base Fee 13b Masonry fence up to 6' high (special design) each additional 50 lf $144 $203 Ea. Addtl
PER UNIT ANALYSIS
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` City of Watsonville - FY 2025-2026
BUILDING
Fee Category Current Fee Proposed Fee Fee Description
14a Retaining wall 0-7' high (standard design) 1st 50 lf $538 $759 Base Fee 14b Retaining wall 0-7' high (standard design) each additional 50 lf $192 $271 Ea. Addtl 15a Retaining wall over 7-10' high (special design) 1st 50 lf $896 $1,265 Base Fee 15b Retaining wall over 7-10' high (special design) each additional 50 lf $287 $405 Ea. Addtl 16a Retaining wall: over 10' + high (special design) 1st 30 lf $956 $1,349 Base Fee 16b Retaining wall: over 10' + high (special design) each additional 30 lf $287 $405 Ea. Addtl 17 Fire Place $299 $422 Fixed Fee
18a Lighting pole $365 $515 Fixed Fee
18b Lighting pole - additional pole $91 $128 Fixed Fee
19a Residential remodel (up to 300 s.f.) $538 $759 Base Fee 19b each addt'l 100sq ft $54 $76 Ea. Addtl
20a Residential remodel (up to 300 s.f. and/or kitchen) $598 $844 Base Fee 20b each addt'l 100sq ft $54 $76 Ea. Addtl
21a Patio cover (lattice / metal) (up to 300 s.f.) $275 $388 Base Fee 21b each addt'l 100sq ft $36 $51 Ea. Addtl
22a Patio cover (custom) $598 $844 Base Fee
22b each addt'l 100sq ft $36 $51 Ea. Addtl
23a Patio(enclosed)/Sunroom - 1st 300 sq ft $598 $844 Base Fee 23b each addt'l 100sq ft $36 $51 Ea. Addtl
24 Plaster per city standard $156 $220 Fixed Fee
25a Reroofing (lite weight wo/ struct. calc. ) 1st 1000 sq ft $180 $254 Base Fee 25b Reroofing (lite weight wo/ struct. calc. ) additional 500 sq ft $36 $51 Ea. Addtl 26a Reroofing (lite wt w/struct calc.) 1st 1000 sq ft $478 $675 Base Fee 26b Reroofing (lite wt w/struct calc.) additional 500 sq ft $96 $136 Ea. Addtl 27a Reroofing (comp shingles) 1st 1000 sq ft $227 $320 Base Fee 27b Reroofing (comp shingles) additional 500 sq ft $90 $127 Ea. Addtl 28a Reroof (BUR) every 30 sf up to 1000 sf $180 $254 Base Fee 28b Reroof (BUR) additional 1000 sf $36 $51 Ea. Addtl
29a Reroof Specialty roofs 1st 1000 sf $239 $337 Base Fee 29b Reroof Specialty roofs additional 500 sf $138 $195 Ea. Addtl 30a Room Addition (up to 200 s.f.) $1,075 $1,517 Base Fee 30b each addt'l 100sq ft $48 $68 Ea. Addtl
31 Skylight $418 $590 Fixed Fee
32a Storage rack (up to 100 lf.) $239 $337 Base Fee
32b Storage rack additional 100 lf $72 $102 Ea. Addtl
33a Swimming Pool (Residential) 1st 800 sq ft $1,195 $1,687 Base Fee 33b Swimming Pool (Residential) additional 200 sq ft $239 $337 Ea. Addtl 34a Swimming Pool (Commercial) 1 st 800 sq ft $1,911 $2,698 Base Fee 34b Swimming Pool (Commercial) additional 200 sq ft $1,195 $1,687 Ea. Addtl 35 Temp Construction Trailer $836 $1,180 Fixed Fee
36a Window Replacement up to 10 $239 $337 Base Fee
36b each addt'l window $24 $34 Ea. Addtl
PER UNIT ANALYSIS
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` City of Watsonville - FY 2025-2026
BUILDING
Fee Category Current Fee Proposed Fee Fee Description
37a New Window (non structural, up to 50 s.f. max) $227 $320 Fixed Fee 37b New window (structural shear wall/masonry, up to 50 s.f. max) $311 $439 Fixed Fee 38 Permit Issuance Fee $78 $110 Fixed Fee
39 Plan Check Over the Counter/Change/Recheck/Deferred $96 $136 Per hour 40 Plan Review for Sub Permits-PME's $180 $254 Fixed Fee 41 Alternate Methods & Materials Request $359 $507 Per hour 42 Appeals to Notice & Orders of the Building Official $1,433 $2,023 Per hour 43 Special Inspections Requested by Public (w/ no permits required) $180 $254 Per hour 44 Investigations of Code Violations (Bldg/Elect/Mech/Plumb & Municipal Code) $162 $229 Per hour 45 Permit Fee Estimates $85 $120 Per hour
46 Staff Time Copies/ Records Research $85 $120 Per hour 47 Release of Liens by City on Properties $239 $337 Fixed Fee 48 Code Enforcement Hourly rate $102 $144 Per hour
49 Appeal of Building Code $836 $1,180 Fixed Fee
50 Appeal of Code Enforcement $836 $1,180 Fixed Fee
51 Duplicate Permit Fee $42 $59 Fixed Fee
52 One-Time Renewal or Extension Fee $227 $320 Fixed Fee 53 Abandoned Residential Property Registration Fee $192 $271 Fixed Fee
ELECTRICAL INSPECTION FEES
1 Electrical Rewire Single Family and Multi Family Residential $162 $229 Fixed Fee 2 Residential, Buildings, Rewire-Garages, carports (attached or detached) parking structures $162 $229 Fixed Fee
3 Temporary service pole or pedestal including meters $162 $229 Fixed Fee 4 Temporary Trailer Inspection (Pre-Site) $162 $229 Fixed Fee 5a First 20 outlets, switches, fixtures $162 $229 Base Fee 5b Each additional 20 outlets, switch, fixture, etc. $82 $116 Ea. Addtl 6 Residential Appliances $162 $229 Fixed Fee
7 Commercial Appliances $221 $312 Fixed Fee
8a Power Apparatus up to 50 HP $162 $229 each
8b Power Apparatus over 50HP $221 $312 each
9 One sign and one transformer $162 $229 Fixed Fee
10 Alterations to existing signs $162 $229 Fixed Fee
11 Relocation of existing signs $162 $229 Fixed Fee
12a For Service up to 200 amps $281 $397 Fixed Fee
12b For Services of: Over 200 amps, each $341 $481 Fixed Fee 13 Private Street Lights $162 $229 Fixed Fee
14 Pool/Spa - Electrical - Residential $162 $229 Fixed Fee 15 Pool/Spa - Electrical - Commercial $281 $397 Fixed Fee 16 Solar panel Fee $238 $336 Fixed Fee
MECHANICAL PERMIT FEES
1a Heating appliances, including vent - Up to 100,000 BTU/H $162 $229 Fixed Fee 1b Heating appliances, including vent - 100,000 BTU/H and over $281 $397 Fixed Fee
PER UNIT ANALYSIS
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` City of Watsonville - FY 2025-2026
BUILDING
Fee Category Current Fee Proposed Fee Fee Description
2 Residential air circulation outlets (heating or cooling) each $102 $144 Fixed Fee 3 Commercial air distribution system (heating, cooling or ventilation per 100 sf each) $221 $312 Fixed Fee
4 Combustion products vent (other than chimney and not incl. in appliance permit) each $162 $229 Fixed Fee
5 Factory built or metal chimney each $162 $229 Fixed Fee 6 Compressor boiler HP $162 $229 Fixed Fee
7a Absorption Unit BTU up to 1,000,000 BTU/H $162 $229 Fixed Fee 7b Absorption Unit over 1,000,000 BTU/H $221 $312 Fixed Fee 8a Air handling unit (heating, cooling or ventilation supply) up to 10,000 CFM each $162 $229 Fixed Fee
8b Air handling unit Over 10,000 CFM each $281 $397 Fixed Fee 9 Evaporative cooler (other than portable) each $42 $59 Fixed Fee 10 Ventilation Fans CFM $42 $59 Fixed Fee
11 Commercial hood (including ducts, each, maximum size of 200 s.f.) $162 $229 Fixed Fee 12 Heating or cooling coils (not part of factory assembled unit) each $162 $229 Fixed Fee 13 Appliance or piece of equipment regulated by this code $162 $229 Fixed Fee 14a Gas system 1st 5 outlets $162 $229 Fixed Fee
14b Gas system Each additional outlet over 5 $29 $41 Fixed Fee 15 Fire Dampers each $102 $144 Fixed Fee
16 Central Vacuum Systems each $102 $144 Fixed Fee
17a Yard gas piping (each 200 Lf. portion) $162 $229 Fixed Fee 17b Gas yard piping each additional 100 linear lf. $59 $83 Fixed Fee 18 Processing, special, or hydronic piping per 100 Lf. $162 $229 Fixed Fee 19 Other mechanical equipment, per hourly rate $162 $229 Fixed Fee
PLUMBING PERMIT FEES
1a Plumbing fixture including water, drainage piping and backwater valve $162 $229 Fixed Fee 1b for each additional $29 $41 Fixed Fee
2a Building SEWER and each trailer space sewer: 1st 100 ft $162 $229 Fixed Fee 2b Building SEWER and each trailer space sewer: additional 100 ft $78 $110 Fixed Fee 3 Abandonment/close sewer $162 $229 Fixed Fee
4a Rainwater systems - (per drain inside building) up to five drains $162 $229 Fixed Fee 4b each additional $29 $41 Fixed Fee
5 Water heater and/or vent $162 $229 Fixed Fee
6a Gas-piping system (1st 5 outlets) $162 $229 Fixed Fee 6b Gas-piping system (additional gas piping system outlet) $29 $41 Fixed Fee 7a Medical gas system (1st 5 inlets/outlets) $221 $312 Fixed Fee 7b Medical gas system (additional inlets/outlets) $29 $41 Fixed Fee 8 Industrial waste pretreatment interceptor including its trap and vent $323 $456 Fixed Fee 9 Install, alteration or repair of water piping and/or water treating equip $221 $312 Fixed Fee 10 Backflow protective device $102 $144 Fixed Fee
11a Building water service: 1st 100 ft $162 $229 Fixed Fee 11b Building water service: additional building water service, per 100 ft $59 $83 Fixed Fee 12a Gas yard piping up to 200 linear lf. $162 $229 Fixed Fee
PER UNIT ANALYSIS
Attachment 2
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BUILDING
Fee Category Current Fee Proposed Fee Fee Description
12b Gas yard piping each additional 100 linear lf. $59 $83 Fixed Fee 13 Solar Water Heating $162 $229 Fixed Fee
14 Gray water system $221 $312 Fixed Fee
15 Swimming Pool/Spa Piping Systems (up to 1000 s.f.) $281 $397 Fixed Fee 16 Pool/Spa Pre-Site Inspection $59 $83 Fixed Fee
* Plan review fee is 65% of Building Permit Fee and is collectedupon Plan submittal.
FIRE RELATED CONSTRUCTION FEES
1 Standard hourly rate $194 $274 per hour
2a Sprinkler Systems inspection $204 $288 per hour
2b Sprinkler Systems inspection - multi-floor each flor above 2nd $204 $288 per hour 3a Sprinkler system plan check $204 $288 per hour
3b Sprinkler Plan Check Above 2nd Fl $204 $288 per hour 4 Sprinkler Systems inspection - hydro test, as needed $204 $288 per hour 5a Fire Alarm System $204 $288 per hour
5b Fire Alarm System Addt'l Floor $204 $288 per hour
6a Upgraded Alarm Panel Plan Check $120 $169 per hour
6b Upgraded Alarm Panel Permit $120 $169 per hour
7a Wet/Dry Standpipe Permit $120 $169 per hour
7b Wet/Dry Standpipe Permit - additional floor above 2nd story $120 $169 per hour 8a Flammable Liquid Tank $204 $288 per hour
8b Flammable Liquid Tank - monitoring or soil remediation systems $204 $288 per hour 9 Compressed Gas Plan Check $204 $288 per hour
10 Compressed Gas Permit $204 $288 per hour
11 Ammonia Diffusion Plan Check $204 $288 per hour
12 Ammonia Diffusion Permit $204 $288 per hour
13a Hood/Duct Fire Extinguisher Permit first 10 nozzles $123 $174 per hour 13b Hood/Duct Fire Extinguisher Permit every additional 10 nozzles $123 $174 per hour 14 Carnival and Special Event Permit $538 $759 per hour 15 Carnival and Special Event Permit - Article 1, Section 105 $538 $759 per hour 16 Misc. Permits (fireworks, etc.) $466 $658 per hour
17 Weed Abatement $251 $354 per hour
18 Reinspection Fee $251 $354 per hour
19 Additional Plan Check Fee $43 $61 per hour
20 Permit Issuance $53 $75 per hour
21 Underground Fire Service Lines - first 50 feet $120 $169 per hour 22 Underground Fire Service Lines - hydro test as needed $204 $288 per hour 23 Life Safety P.C. (residential, up to 2 units) $204 $288 per hour 24 Life Safety Inspection (residential, up to 2 units) $239 $337 per hour 25 Life Safety P.C. (commercial) $204 $288 per hour
26 Life Safety Inspection (commercial) $239 $337 per hour 27 Investigation of Fire Code Violations $239 $337 per hour 28 Certification Related Fire Inspections $239 $337 per hour
PER UNIT ANALYSIS
**Residential Repair permits that do not include project plans shall be charged a minimum of two hours of inspection time plus permit issuance fee.
Additional inspection charges may be assessed based on a staff estimate of the number of inspections required to complete the project.
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COMMUNITY DEVELOPMENT: CODE ENFORCEMENT
1 Appeal Fee: Building decision NEW $1,953
2 Appeal Fee: Relocation Fee NEW $1,953
3 Release of Liens NEW $367
4 Abandoned Residential Property (in Bldg schdl) NEW $439 5 Administrative Citation: 1st occurrence $100 $100
6 Administrative Citation: 2nd occurrence $200 $200
7 Administrative Citation: 3rd + occurrence $500 $500
Fee Category Current Fee
CITY OF WATSONVILLE - 2026
CODE ENFORCEMENT PER UNIT ANALYSIS
Proposed Fee
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COMMUNITY DEVELOPMENT: HOUSING
Fee Category Current Fee Proposed Fee Fee Description
1 Eligibility Review $500 $500 per review
2 Sales Price Determination $50 $50 per determination
3 Subordination Review $200 $200 per review
4 Pay off demand & reconveyance $50 $50 per request/ doc 5 Affordability Release Review $100 $167 per review
6 Monitoring $50 $50 per unit (one time fee)
City of Watsonville - FY 2025-2026
HOUSING
PER UNIT ANALYSIS
Attachment 2
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COMMUNITY DEVELOPMENT: PLANNING
Fee Category Current Fee Proposed Fee Fee Description
1 Zone Map Amendment $15,524 $15,673 Flat fee
2 Zone/Municipal Code Rev Zoning Text Amendment $17,912 $30,504 Flat fee 3 General Plan Map Amendment $15,524 $15,673 Flat fee
4 General Plan Text Amendment $26,271 $30,504 Flat fee
5 Drainage Study Review $65,679 $0 REMOVE
6 Area Plan $65,679 $65,679 Flat fee
7 Local Plan Amendment $15,524 $15,665 REMOVE
8 Pre-Application $1,433 $2,865 Flat fee
9 Planned Development $47,766 $47,766 Flat fee
10 Admin Use Permit $1,801 $3,202 Flat fee
11 Special Use Permit Existing Structure $4,464 $4,719 Flat fee 12 Spec. Use Permit New Construction $6,589 $7,247 Flat fee 13 Major Variance $7,165 $5,703 Flat fee
14 Minor Variance $1,075 $2,191 Flat fee
15 Admin. Review Permit $193 $843 Flat fee
16 Home Occupation Permit $193 $421 Flat fee
17 Fence Permit Admin. Review Permit $193 $414 Flat fee 18 Fence Permit Admin. Use Permit $716 $1,011 Flat fee
19 Historical Preserve Design $3,592 $3,592 Flat fee
20 Appeal fee to Planning Commission $1,256 $5,730 Flat fee 21 Environmental Assessment Application $657 $674 Flat fee 22 Prepare Initial Study/Negative Declaration $7,762 $7,762 Flat fee City of Watsonville - FY 2025-2026
PLANNING
PER UNIT ANALYSIS
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Fee Category Current Fee Proposed Fee Fee Description
23 Signs: Temporary $193 $246 Flat fee
24 Environmental Review Contractor Cost + Admin Process $11,504 $11,571 Flat fee 25 Annexation fees exclusive of State Board of Equalization fees - developed property $53,737 $53,737 Flat fee
26 Annexation fees exclusive of State Board of Equalization fees - undeveloped property $59,708 $59,708 Flat fee
27 Development Agreement Process $17,912 $30,420 Flat fee 28 Planning Plan Check $418 $546 Flat fee
29 Subdivision Major Tentative Improvements - 1st 10 lots $26,271 $27,218 Flat fee 30 Subdivision Major Tentative Improvements - per lot thereafter $1,015 $1,013 Flat fee 31 Vested Tentative Map - 1st 10 lots $26,271 $27,218 Flat fee 32 Vested Tentative Map - per lot thereafter $1,015 $1,015 Flat fee 33 Minor-Subdivision Parcel Map $10,150 $10,280 Flat fee 34 Boundary Line Adjust $4,180 $4,394 Flat fee
35 Parcel Merger $4,180 $4,394 Flat fee
36 Certificate Compliance Parcel $2,713 $2,865 Flat fee 37 Project Time Extension/Administrative $2,149 $2,191 Flat fee 38 Permit Modification Minor $2,149 $2,275 Flat fee
39 Permit Modification Major $4,180 $4,382 Flat fee
40 Coastal Development Permit $23,883 $25,409 Flat fee
41 Public Hearing Notice Fee $254 $500 Flat fee
42 Design Review Permit $4,180 $6,573 Flat fee
43 Appeal fee to Council $2,054 $5,730 Flat fee
44 Mitigation Monitoring and Reporting Program (MMRP) $5,971 $6,741 Flat fee 45 Specific Plan Amendment $14,330 $17,359 Flat fee
City of Watsonville - FY 2025-2026
PLANNING
PER UNIT ANALYSIS
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Fee Category Current Fee Proposed Fee Fee Description
46 Findings of Public Convenience and Necessity $1,194 $1,348 Flat fee 47 Sign permit $386 $506 Flat fee
48 Attorney Fees Actual Cost Actual Cost + 20% Actual Cost + 20% 49 Permanent record retention fee $13 $13 Flat fee
50 Noticing/Label Fee $84 $407 Flat fee
51 Reasonable Accomodation Application NEW $843 Flat fee 52 Density Bonus Application NEW $2,528 Flat fee
53 Project Time Extension - Public Hearing Fee NEW $3,034 Flat fee 54 Minor Design Review Permit NEW $3,708 Flat fee
55 Third-Party Technical Review Fee NEW Actual Cost + 20% Actual Cost + 20% 56 Zoning Verification Letter NEW $506 Flat fee
57 Master Sign Program Application NEW $6,741 Flat fee
58 Sign permit - PC Approval NEW $3,371 Flat fee
59 Staff Hourly Rate - Other Services NEW Per Hour Per Hour 61 SB 330 Pre-Applications NEW $2,697 Flat fee
62 SB 4 Applications NEW $1,348 Flat fee
63 SB 35 Applications NEW $1,348 Flat fee
64 AB 2011 Applications NEW $1,348 Flat fee
65 SB 9/ SB 10 Applications NEW $11,123 Flat fee
City of Watsonville - FY 2025-2026
PLANNING
PER UNIT ANALYSIS
Attachment 2
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FIRE
1 EQUIP & PERSONNEL
2 1 Personnel Costs Per Hour Per Hour Per Hour
3 2.a Equipment Costs: Fire engine (Pumper 1000 g.p.m. or larger) $147 $147 per hour 4 2.b Equipment Costs: Ladder Truck $147 $147 per hour
5 2.d Equipment Costs: Haz Mat Van $188 Remove Remove
6 2.e Equipment Costs: Automobile $.70 per mile
$122 per hour
$.70 per mile
$122 per hour
$.70 per mile
$122 per hour
7 2.f Equipment Costs: Truck 1/2 ton $122 $122 per hour 8 2.g Equipment Costs: Truck to 1 ton $122 $122 per hour 9 2.h Equipment Costs: Generator 5kw inclusive $14 $14 per hour 10 2.i Equipment Costs: Generator 15kw inclusive $18 $18 per hour 11 2.j Equipment Costs: Generator 25kw inclusive $24 $24 per hour 12 3 Research Fee Actual Cost Actual Cost Actual Cost
13 4 Fire Reports Actual Cost Actual Cost Actual Cost
14 5.a Photographs - Photo Paper Actual Cost Actual Cost Actual Cost 15 5.b Photographs - Color Copy Actual Cost Actual Cost Actual Cost 16 6 Investigation Report $435 $678 each
17 18 1 Title 19 Inspections (fire user fees) - 0-2,500 sqft $194 $240 Flat Fee 19 1 Title 19 Inspections (fire user fees) - 2,501 - 5,000 sq ft $194 $280 Flat Fee 20 1 Title 19 Inspections (fire user fees) - 5,001 - 10,000 sq ft $194 $320 Flat Fee 21 1 Title 19 Inspections (fire user fees) - Over 10,001 sqft $194 $399 Base + Per Hour (as needed) 22 2 Self Inspections $53 $63 each
23 3 Permit Issuance $53 $56 each
Current Fee
INSPECTION FEES
PER UNIT ANALYSIS
Fee Category
City of Watsonville - FY 2025-2026
FIRE
Proposed Fee Fee Description
Attachment 2
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24 4 Aerosol Products $194 $395 Per Hour --> Flat, Annual Permit 25 5 Aircraft refueling vehicles $194 $395 Per Hour --> Flat, Annual Permit 26 6 Aircraft repair hangar $194 $395 Per Hour --> Flat, Annual Permit 27 7 Asbestos removal $194 $395 Per Hour --> Flat, Annual Permit 28 8 Automobile wrecking yard $194 $395 Per Hour --> Flat, Annual Permit 29 9 Battery system $194 $395 Per Hour --> Flat, Annual Permit 30 10 Candles and open flames in assembly areas $194 $395 Per Hour --> Flat, Annual Permit 31 11 Carnivals and fairs $194 $395 Per Hour --> Flat, Annual Permit 32 12 Cellulose nitrate film $194 $395 Per Hour --> Flat, Annual Permit 33 13 Cellulose nitrate storage $194 $395 Per Hour --> Flat, Annual Permit 34 14 Combustible fiber storage $194 $395 Per Hour --> Flat, Annual Permit 35 15 Combustible material storage $194 $395 Per Hour --> Flat, Annual Permit 36 16 Compressed gases $194 $395 Per Hour --> Flat, Annual Permit 37 17 Exceptions to routine maintenance $194 $395 Per Hour --> Flat, Annual Permit 38 18 Commercial rubbish handling operation $194 $395 Per Hour --> Flat, Annual Permit 39 19 Cryogens $194 $395 Per Hour --> Flat, Annual Permit 40 20 Dry cleaning plants $194 $395 Per Hour --> Flat, Annual Permit 41 21 Dust producing operations $194 $395 Per Hour --> Flat, Annual Permit 42 22 Explosives or blasting agents $194 $395 Per Hour --> Flat, Annual Permit 43 23 Fire hydrants and water control valves $194 $395 Per Hour --> Flat, Annual Permit 44 24 Fireworks $194 $395 Per Hour --> Flat, Annual Permit 45 25 Flammable or combustible liquids $194 $395 Per Hour --> Flat, Annual Permit 46 26 Fruit ripening $194 $395 Per Hour --> Flat, Annual Permit 47 27 Fumigation or thermal insecticidal fogging $194 $395 Per Hour --> Flat, Annual Permit 48 28 Hazardous materials $194 $395 Per Hour --> Flat, Annual Permit 49 29 High-piled combustible storage $194 $395 Per Hour --> Flat, Annual Permit 50 30 Hot-work operations $194 $395 Per Hour --> Flat, Annual Permit Current Fee
PER UNIT ANALYSIS
Fee Category
City of Watsonville - FY 2025-2026
FIRE
Proposed Fee Fee Description
Attachment 2
City of Watsonville: User Fee Study
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51 31 Liquid or gas fueled vehicles or equipment in assembly buildings $194 $395 Per Hour --> Flat, Annual Permit 52 32 Lumber yards $194 $395 Per Hour --> Flat, Annual Permit 53 33 Magnesium working $194 $395 Per Hour --> Flat, Annual Permit 54 34 Mall covered $194 $395 Per Hour --> Flat, Annual Permit 55 35 Open burning $194 $395 Per Hour --> Flat, Annual Permit 56 36 Organic coatings $194 $395 Per Hour --> Flat, Annual Permit 57 37 Ovens, industrial baking or drying $194 $395 Per Hour --> Flat, Annual Permit 58 38 Parade floats $194 $395 Per Hour --> Flat, Annual Permit 59 39 Places of assembly $194 $395 Per Hour --> Flat, Annual Permit 60 40 Pyrotechnical special effects material $194 $395 Per Hour --> Flat, Annual Permit 61 41 Radioactive materials $194 $395 Per Hour --> Flat, Annual Permit 62 42 Refrigeration equipment $194 $395 Per Hour --> Flat, Annual Permit 63 43 Repair garages $194 $395 Per Hour --> Flat, Annual Permit 64 44 Spraying or dipping $194 $395 Per Hour --> Flat, Annual Permit 65 45 Temporary membrane structure, tents & canopies $194 $395 Per Hour --> Flat, Annual Permit 66 46 Tire storage $194 $395 Per Hour --> Flat, Annual Permit 67 47 Wood Products $194 $395 Per Hour --> Flat, Annual Permit 68 Operational Permits - Annual Renewal NEW $120 New Fee, Per Hour 69 70 1 Single Engine Response $405 $641 per incident
71 2 Full Department Response $1,364 $2,423 per incident 72 3 Fire Chief $174 $234 per hour
73 4 Battalion Fire Chief $146 $201 per hour
74 5 Fire Captain $132 $159 per hour
75 6 Engineer $111 $127 per hour
76 7 Firefighter $90 $104 per hour
Current Fee
OTHER FEES
PER UNIT ANALYSIS
Fee Category
City of Watsonville - FY 2025-2026
FIRE
Proposed Fee Fee Description
Attachment 2
City of Watsonville: User Fee Study
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77 8 Patient Care Report Actual Cost Actual Cost Actual Cost 78 9 False Alarm fee (charged after 3rd False Alarm) $453 $609 per incident 79 10 Administrative Analyst $83 $111 per hour
80 11 Division Chief $154 $214 per hour
81 12 Administrative Assistant I $82 $85 per hour
82 First Responder Fee - On scene medical care (no transport) NEW $537 New Fee, per response Current Fee
PER UNIT ANALYSIS
Fee Category
City of Watsonville - FY 2025-2026
FIRE
Proposed Fee Fee Description
Attachment 2
City of Watsonville: User Fee Study
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FINANCE
Fee Category Current Fee Proposed Fee Fee Description
3 Business License Processing Service Charge $47.70 $59.49 Each CITY OF WATSONVILLE - FY 2025-2026
FINANCE
PER UNIT ANALYSIS
Attachment 2
City of Watsonville: User Fee Study
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POLICE
Fee Category Current Fee Proposed Fee Fee Description
1 1 Police Reports $44 $69 Per Report
2 2 Concealed Weapon Permit (original) $126 Remove Remove 3 3 Concealed Weapon Permit (renewal) $126 Remove Remove 4 4 Taxi Driver Permit $434 $101 Flat Fee
5 5 Tow Service Permit $434 $434 Flat Fee
6 6 Tow Truck Driver Permit $393 $393 Flat Fee
7 7 Limousine Driver Permit $393 Remove Remove
8 8 Renewal Permit (any type) $302 $87 Flat Fee
9 9 Private Patrol Permit $393 $134 Flat Fee
10 10 Bicycle License (3 years) $27 $42 Flat Fee
11 11 Pawn Shop/2nd Hand Dealer's Permit $220 $101 Flat Fee 12 12 New Pawn Shop/2nd Hand Dealer's Permit $220 $220 Flat Fee 13 13 Private Property Tow (reposession) $18 $18 Flat Fee 14 14 Vehicle Impound Release Fee $234 $367 Flat Fee
15 15 Citation Verification Fee (For Fix-It Tickets) $44 $51 Flat Fee 16 16 DUI - Processing/Scene $397 $425 Flat Fee
17 17 DUI - Accident $861 $921 Flat Fee
18 18 Amplified Sound Permit $252 $42 Flat Fee
19 19 Ambulance Driver Permit $226 $226 Flat Fee
20 20 Card Room Permit $421 Remove Remove
21 21 Evidence Duplicating (Audio or Video) $65 $65 Flat Fee 22 22 Patrol Car - Tape Duplicating (Video Cassette) $214 $214 Flat Fee 23 23 Certificate of Public Convince $1,068 $1,068 Flat Fee City of Watsonville - FY 2025-2026
POLICE
PER UNIT ANALYSIS
Attachment 2
City of Watsonville: User Fee Study
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` Fee Category Current Fee Proposed Fee Fee Description 24 24 Bingo Permit $44 $44 Flat Fee
25 25 Clearance letter with 2 originals $63 $73 Flat Fee 26 26 Subpoena Duces Tecum $106 $106 Flat Fee
27 27 Entertainment Permit $189 $42 Flat Fee
28 28 Massage Parlor Permit or Body Art (Tattoo Parlor) $329 $82 Flat Fee 29 29 Pool Room Permit $352 Remove Remove
30 30 Parade Permit $214 $214 Flat Fee
31 31 Solicitor and Traveling Merchant Permit $322 $82 Flat Fee 32 32.a Security Alarm Registration Fee $82 $105 Flat Fee 33 32.b Security Alarm Registration Renewal Fee $53 $58 Flat Fee 34 32.c False Security Alarm Fee (After one false alarm in any calendar year) $101 $105 Penalty
35 33 Police Chief $221 $254 Per Hour
36 34 Assistant Chief of Police $201 $236 Per Hour
37 35 Sergeant $167 $191 Per Hour
38 36 Corporal/Detective $132 $142 Per Hour
39 37 Police Officer $132 $142 Per Hour
40 38 Police Service Specialist $74 $86 Per Hour
41 39 Records Supervisor $91 $101 Per Hour
42 40 Executive Assistant $82 $91 Per Hour
43 41 Parking Enforcement Officer $74 $76 Per Hour
44 42 Police Clerk II $72 $83 Per Hour
45 43 Police Clerk III $72 $83 Per Hour
46 44 Crime Analyst $94 $124 Per Hour
City of Watsonville - FY 2025-2026
POLICE
PER UNIT ANALYSIS
Attachment 2
City of Watsonville: User Fee Study
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` Fee Category Current Fee Proposed Fee Fee Description 47 Property & Evidence Supervisor $0 $107 Per Hour
48 Fiscal Manager $0 $139 Per Hour
49 Police Clerk I $0 $83 Per Hour
50 45.a Class A. Tows for vehicles under 6,000 pounds gross vehicle weight rating (including four wheel drive) $355 $355 Per Hour
51 45.b Class B. Medium rig tows for vehicles 6,000 pounds to 20,000 gross vehicle weight $400 Remove Remove 52 45.c Class C. Big rig tows for vehicles 20,000 pounds or larger gross vehicle weight $510 Remove Remove
53 46 Gate Fees - One time fee only varies Remove Remove 54 47.a Hourly Fee (after first hour) Per 15 minutes Class A $67 Remove Remove 55 47.b Hourly Fee (after first hour) Per 15 minutes Class B $82 Remove Remove 56 47.c Hourly Fee (after first hour) Per 15 minutes Class C $95 Remove Remove 57 48.a Service Calls Class A $127 Remove Remove
58 48.b Service Calls Class B $157 $157 Per Hour
59 48.c Service Calls Class C $189 $189 Per Hour
60 49 City Towing Service Fee $83 Remove Remove
61 50 Traveling Merchant Equipment Impound Release Fee $322 $61 Flat Fee 62 51 30 Day Vehicle Impound Hearing Fee $101 $162 Flat Fee 63 52.a Range Fees $283 Remove Remove
64 52.b Range Fees $440 Remove Remove
65 53 Garage/Yard Sale Permit $36 Remove Remove
City of Watsonville - FY 2025-2026
POLICE
PER UNIT ANALYSIS
Attachment 2
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PUBLIC WORKS
Fee Category Current Fee Proposed Fee Fee Description
1 Minor Encroachment Permit Processing Fee $322 $418 Flat fee 2 Major Encroachment & On-Site Permit Processing Fee $852 Time & Materials Time & Materials 3 Inspection minor/major encroachment $311 $192 Per Hour 4 Inspection commercial projects and subdivision Actual Cost Actual Cost Actual Cost 5 Drainage Study Review - Tier 1 NEW $323 Flat Fee
6 Drainage Study Review - Tier 2 $1,151 Contractors T&M + 15% admin
Contractors T&M + 15%
admin
7 Subdivision Bond Changes $306 Time & Materials Time & Materials 8 Special Study Review $532 Time & Materials Time & Materials 9 Final Map Review $532 Actual cost OR
Contractor cost + 15%
Actual cost OR
Contractor cost + 15%
10 Final Map Recordation $390 $538 Flat Fee
11 Subdivision Agreement Preparation $642 $860 Flat Fee 12 Parcel Map Review $383 Actual cost OR
Contractor cost + 15%
Actual cost OR
Contractor cost + 15%
13 Certification Compliance/Merger $576 $538 Flat Fee + Contractor Cost
14 Street, Alley & Easement Vacation/Abandonment $1,372 $1,372 Flat Fee 15 EPC multi resid 4 units or less $1,649 $1,649 Flat Fee 16 EPC multi resid 5-30 units $3,106 $3,106 Flat Fee
17 EPC multi resid >30 $5,252 $5,252 Flat Fee
18 EPC commercial <1 acre $2,667 $2,667 Flat Fee
19 EPC commercial 1 acre to 5 acre $4,316 $4,316 Flat Fee 20 EPC commercial >5 acre $6,845 $6,845 Flat Fee
PER UNIT ANALYSIS City of Watsonville - FY 2025-2026
PUBLIC WORKS
Attachment 2
City of Watsonville: User Fee Study
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` Fee Category Current Fee Proposed Fee Fee Description 21 Engineering Hourly Rate $191 $195 Flat Fee
22 Thirt Party Plan Check NEW New Fee, Actual Cost New Fee, Actual Cost 23 Transportation - per trip NEW $16 New Fee, State Set 24 Transportation - annual NEW $90 New Fee, State Set
25 Mwelo NEW New Fee, Consultant
Actual Cost + 15%
New Fee, Consultant
Actual Cost + 15%
26 Lot Split $0 Remove Remove
27 Well Drilling Permit (new wells, geotechnical borings) $0 $600 New Fee 28 Stormwater Fees $0 Per Hour
New Fee - Stormwater
BMPs, Inspections,
Violations, PCRs - Per
hour
29 Application Fee - 4" $326 Remove Remove
30 Application Fee - 6" $326 Remove Remove
31 Application Fee - 8" $326 Remove Remove
32 Application Fee - 10" $326 Remove Remove
33 Application Fee - 12" $326 Remove Remove
34 Application Fee - over 12" $0 Remove Remove
35 Right-Of- Way Deed Check Fee - 4" $434 Remove Remove 36 Right-Of- Way Deed Check Fee - 6" $434 Remove Remove 37 Right-Of- Way Deed Check Fee - 8" $434 Remove Remove 38 Right-Of- Way Deed Check Fee - 10" $434 Remove Remove 39 Right-Of- Way Deed Check Fee - 12" $434 Remove Remove 40 Right-Of- Way Deed Check Fee - over 12" $0 Remove Remove PER UNIT ANALYSIS City of Watsonville - FY 2025-2026
PUBLIC WORKS
Attachment 2
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` Fee Category Current Fee Proposed Fee Fee Description 41 5/8", 3/4" 1" $267 Time & Materials Time & Materials 42 1 1/2", 2" $357 Time & Materials Time & Materials
43 Over 2" Actual Cost Actual Cost Actual Cost
44 Construction meter deposit $126 Remove Remove
45 Hydrant meter deposit $4,845 $4,845 Deposit
46 Penalty for unauthorized relocation of hydrant meter (Deposits not changed) $150 Remove Remove 47 Main extension built by others Per sheet - Initial $619 Remove Remove 48 Re-check fee (due @ time of third submittal) Per sheet $310 Remove Remove 49 Engineering and inspection for main extensions built by others 7.0% of estimated cost of improvements $0 Remove Remove
50 Cross-Connection Program NEW New Fee, per hour New Fee, per hour 51 Testable back-flow prevention devices perfomed by City $14 $14 Flat fee 52 Testable back-flow prevention devices perfomed by outside testers $5 $5 Flat fee 53 Cross connection re-test $129 $129 Flat fee
54 Fire Flow Check - Monday through Friday 8am to 230pm $521 $998 Flat Fee 55 Fire Flow Check - all other times $782 Remove Remove 56 Penalty for unauthorized connections to hydrants, mains, and any other component of the water system Varies
57 Water Meter Lock Tampering fee $58 $108 Flat Fee
58 Repair shut-off valve $267 Time & Materials Time & Materials 59 Restoration of Utility Service Charge - regular hours $60 $161 Flat Fee 1st violation - $1,000
2nd violation - $2,000
3rd violation -$3,000 for ea addtl within a year
PER UNIT ANALYSIS City of Watsonville - FY 2025-2026
PUBLIC WORKS
Attachment 2
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` Fee Category Current Fee Proposed Fee Fee Description 60 Restoration of Utility Service Charge - all other times $179 $323 Flat Fee 61 Restoration of Utility Service Charge - Service activation fee $58 $108 Flat Fee 62 Water truck fill per 500 gallons for inside city's water system $12 $12 Flat Fee 63 Well permit filling fee $141 $405 Flat Fee
64 Well permit inspection fee $121 $385 Flat Fee
65 5/8", 3/4" $75 $75 Deposit
66 1", 1 ½" $85 $85 Deposit
67 2" $95 $95 Deposit
68 3" $115 $115 Deposit
69 4" $215 $215 Deposit
70 Solid Waste Containers and drop-boxes
2x monthly charge
Res. - $75
Comm - 1 month
charge
2x monthly charge
Res. - $75
Comm - 1 month charge
2x monthly charge
Res. - $75
Comm - 1 month charge
71 Based on equivalent equipment from current Caltrans Labor Surcharge and Equipment Rental Rates Caltrans Rates Caltrans Rates Caltrans Rates PER UNIT ANALYSIS City of Watsonville - FY 2025-2026
PUBLIC WORKS
Attachment 2
A P P E N D I X B
C O M P A R I S O N S U R V E Y R E S U L T S
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APPENDIX B COMPARISON SURVEY RESULTS
AIRPORT
Hangar Waiting List - (b) Annual fee $100 $100 Salinas (SNS) $51
Hollister (HLI)
$25
San Diego Muni
$300
Torrance Muni
$225
Hayward Exec
$150
Security Fee - Airfield Access
Credentials - A. Card Key, Initial Issuance $50 $50 Chico Regional (CIC) $59
Hollister (HLI)
$70
Monterey (MRY)
$60 Salinas (SNS)
$41.50
Hayward Exec
$43
Security Fee - Airfield Access
Credentials - B. Card Key,
Replacement
New Fee $50 Chico Regional (CIC)
$59
Hollister (HLI)
$70
Monterey (MRY)
$90 Salinas (SNS)
$41.50
Hayward Exec
$43
Security Fee - Airfield Access
Credentials - C. Key fob, Initial Issuance New Fee $60 N/A Hollister (HLI) $50
Monterey (MRY)
$60 Salinas (SNS)
$62.50 N/A
Security Fee - Airfield Access
Credentials - D. Key fob,
Replacement
New Fee $60 N/A Hollister (HLI)
$50
Monterey (MRY)
$90 Salinas (SNS)
$62.50 N/A
Landing Fee - less than 6,500lbs New Fee No Fee
Landing Fee - less than 6,500-50,000lbs New Fee $2 Per 1,000 pounds
Landing Fee - 50,000+ lbs New Fee $ 3 Per 1,000
pounds
Fee Category Current Fee Proposed Fee PEER AIRPORTS
Livermore (Reliever
airport)
0-3500lbs -
$3/landing
3,501-6,250 -
$6/landing
6,521-12,500-
$12/landing
12,501-25,000-
$24/landing
25,001-50,000-
$48/landing
50,000+ $96/landing
Torrance (Reliever
airport)
$3 per 1,000 pounds
(min charge of $6)
Paso Robeles (GA
Muni)
less than 20,000lbs
$15
20,001-26,000 $30
26,001-35,000 $40
35,001-50,000 $110
50,001-70,000 $140
70,001-90,000 $155
90,001-120,000 $180
120,001-155,000
$195
155,001+ $250
Sonoma County
(Charles M Schultz)
Reveue Producing
Commerical Flight -
$1.52/1,000lbs (any
weight)
Non-Commercial
over 12,500lbs -
$1.52/1,000lbs
Conconrd (GA,
Buchanan Field
Airport)
under 12,500lbs
$10/landing
over 12,500lbs
$25/landing
Attachment 2
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HIGHLIGHTS
Attachment 2
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COMMUNITY DEVELOPMENT: BUILDING
HIGHLIGHTS
Single Family Home
Alteration/ Addition
300 sf
Insp $1,021
PC $684
Total $1,705
Based on Const
Valuation:
$50k: $1,813
Based on Const
Valuation:
$50k: $6,221
Based on Const
Valuation:
$50k: $2,164
Based on Const
Valuation:
$50k: $2,074
New ADU
500 sf
Insp $2,455
PC $1,645
Total $4,100
Based on Const
Valuation:
$100k: $2,571
Based on Const
Valuation:
$100k: $9,562
Based on Const
Valuation:
$100k: $3,333
Based on Const
Valuation:
$100k: $14,098
Single Family Home
New Construction
3,000 sq ft
Insp $12,456
PC $8,346
Total $20,802
Based on Const
Valuation:
$800k: $10,497
Based on Const
Valuation:
$800k: $42,837
Based on Const
Valuation:
$800k: $13,794
Based on Const
Valuation:
$800k: $20.934
Commercial/Non-Res.
New Construction
1,000 sf
Insp $6,927
PC $4,641
Total $11,568
Based on Const
Valuation:
$350k: $5,598
Based on Const
Valuation:
$350k: $22,762
Based on Const
Valuation:
$350k: $6,220
Based on Const
Valuation:
$350k: $7,936
Peer Agencies
PROJECT TYPE Proposed Fee Gilroy Hollister Salinas Seaside Attachment 2
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Attachment 2
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COMMUNITY DEVELOPMENT: CODE ENFORCEMENT
HIGHLIGHTS
Gilroy Hollister Morgan Hill Salinas Santa Cruz Seaside Appeal Fee: Building Decision $0.00 $1,953.00 $1,731 $1,495 $720 $926 $801 $1,082 Appeal Fee: Relocation Fee $0.00 $1,953.00 $1,238 $1,302 $720 $926 $500 $788 Release of Liens $0.00 $367.00 Actual Cost Actual Cost Actual Cost Actual Cost Actual Cost Actual Cost Fee Category Current Fee Proposed
Fee
PEER AGENCIES
Attachment 2
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COMMUNITY DEVELOPMENT: PLANNING
Gilroy Hollister Morgan Hill Salinas Santa Cruz Seaside Zone Map Amendment $15,524 $15,673 $17,096 $14,330 $23,960 $5,225 $6222 Deposit $9,737 General Plan Map
Amendment $15,524 $15,673 $17,096 $14,330 $49,400 $8,303 $6222 Deposit $9,737 General Plan Tex
Amendment $26,271 $30,504 $20,541 $14,330 $33,920 $8,303 $6222 Deposit $9,737 Pre-Application $1,433 $2,865 $3,819 $1,579 $1,161 $1,097 Planning only:
$692
All depts:
$3495
Deposits
Res $778
Comm - $1,427
Major Variance $7,165 $5,703 $5,992 $5,877 $24,894 $6,745 $3,666 $4,970 Minor Variance $1,075 $2,191 $2,687 $5,877 $6,377 $1,306 $3,666 $3,347 Admin Use Permit $1,801 $3,202 $2,057 $1,667 $10,139 $2,668 $3,525 $1,587 Admin Review Permit $193 $843 $1,208 Actual Cost Actual Cost $1,067 Actual Cost $1,000 Appeal fee to Planning
Commission
$1,256 $5,730 $1,019 $1,495 $720 $911 $801 $1,082
Home Occupation
Permit $193 $414 $177 $229 $126 $166 $171 $89
Signs: Temporary $193 $246 $241 $161 $290 $166 $417 $223 Boundary Line Adjust $4,180 $4,394 $2500 Deposit,
$241/hour $8,445 $11,743 $2,989 $1,862 $6,000 Deposit
Parcel Merger $4,180 $4,394 $2500 Deposit,
$241/hour $8,445 $11,743 $3,266 $1,862 $6,000 Deposit
Design Review Permit $4,180 $6,573 $2500 Deposit,
$241/hour $8,445 $11,743 $2,613 $3,666 $6,000 Deposit
Specific Plan
Amendment $14,330 $17,359 $17,096 $10,581 $23,960 $8,303 $6222 Deposit $6,000 Deposit Sign permit $386 $506 $321 $304 $581 $348 $417 $223
Noticing/Label Fee $84 $407 $417 $123 $64 + staff cost Actual cost $332 $125 Current
Fee
Fee Category Proposed
Fee
PEER AGENCIES
Attachment 2
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HIGHLIGHTS
Attachment 2
City of Watsonville: User Fee Study
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Attachment 2
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FIRE
First Responder Fee Comparison:
Scotts Valley Fire City of Salinas Santa Cruz County Central Fire District City of Santa Cruz City of Gilroy
1 Title 19 Inspections (fire user fees) - Minor $194
0-2500 sqft - $240
2,501-5,000 sqft - $280
5,001 - 10,000 - $320
10,000+ $399
$159 per hour
plus $79 per half hour after first hour 0–1,000 sq. ft.: $217.00 1,001–5,000 sq. ft.:
$307.25
5,001–10,000 sq. ft.:
$384.75
10,001–12,000 sq. ft.:
$462.00
12,001–50,000 sq. ft.:
$539.50
50,001+ sq. ft.: $615.25
R1, R2
1 -12 units - $128
13-59 units - $158
60-149 units - $210
149+ $278
E Occupancies:
0-49 ppl - $128
50-149 ppl - $158
Over 149 ppl - $210
I & A Occupancies:
0-20 ppl - $113
20-49 ppl - $158
50-90 ppl - $210
over 90 ppl - $263
$201 annual
inspection $531 per hour
1 Single Engine Response $405 $641 N/A $620 Actual Cost $675 (average)
They charge actual cost Actual Cost 2 Full Department Response $1,364 $2,423 N/A Actual Cost Actual Cost $1584 (average)
They charge actual cost Actual Cost 9 False Alarm fee (charged after 3rd False Alarm) $453 $609
Third and subsequent - $182 per response 1 & 2nd - $416 3rd - $951
4th and subsequent -
$1,309
3rd and subsequent - Actual Cost 1st - $2502nd - $500
3rd and subsequent -
$750
1st and subsequent -
$272
Fee Category Current Fee Proposed Fee PEER AGENCIES
Attachment 2
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HIGHLIGHTS
Attachment 2
City of Watsonville: User Fee Study
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FINANCE
HIGHLIGHTS
Attachment 2
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POLICE
HIGHLIGHTS
Gilroy Monterey Morgan Hill Salinas Santa Cruz Seaside
4 Taxi Driver Permit $434 $101 $195 $194 $87 $312 $439 $34 6 Tow Truck Driver Permit $393 $393 $195 $194 $87 N/A $439 $581 14 Vehicle Impound Release Fee $234 $367 $160 $300 $189 $240 $270 $338 15 Citation Verification Fee (For Fix-It Tickets) $44 $51 $60 $25 $25 $10.50 $50 $25 25 Clearance letter with 2 originals $63 $73 Per Hour,
Actual Cost $35 $17 + $0.11 per page
$49 $29 + $0.25
per page
$40
27 Entertainment Permit $189 $42 $195 $194 $334
Minor $123
Major - $307
Average
$215
New $1,000
Renew $650 $85
32.a Security Alarm Registration Fee $82 $105 $41 $29 $90 $48.25 $54 $134
32.b Security Alarm Registration Renewal Fee $53 $58 $41 $29 $90 $27.50 $38 $43
32.c False Security Alarm Fee (After one false
alarm in any calendar year) $101 $105 $210
2nd - $30
3rd - $50
4th - $75
5th - $100
6th - $500
Average $125
$180
1st - $81
2nd - $201
3rd - $268
4th - $402
5th - $536
Average
$297
2nd - $404
3rd - $449
4th - $505
Average $452
$229
PEER AGENCIES Fee Category Current
Fee
Proposed
Fee
Attachment 2
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Attachment 2
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PUBLIC WORKS
Santa Cruz Capitola Salinas Gilroy Morgan Hill City of Monterey Minor Encroachment Permit
Processing Fee $322 $375 $520 $477 $400 $444 $735 $291
Major Encroachment & On-Site
Permit Processing Fee Actual Cost Actual Cost $1,501 Base + T &M $1,584 Deposit Varies
Base + per SF
or LN
Actual Cost Actual Cost Actual Cost
Inspection minor/major
encroachment
$311 Flat
Fee
$192 per
hour $208 per hour
Varies by type
$194 avg per
inspection
$119 per hour Actual Cost Actual Cost $291 flat +
$91/hour
Fee Category Current Fee Proposed
Fee
PEER AGENCIES
City of Colton San Mateo County Clovis Hawyard
Restoration of Utility Service
Charge - regular hours $60 $161 $120 $150 $150 $142
PEER AGENCIES
Fee Category Current Fee Proposed
Fee
Santa Cruz Gilroy Hayward Livermore Colton
Restoration of Utility Service
Charge - Service activation fee $58 $108 $73 $80 $108 $100 $120 Current Fee Proposed
Fee
PEER AGENCIES Fee Category
Fee Category
Well Drilling Permit (new wells,
geotechnical borings)
Alameda
County $660
San Diego
County
$873
Ventura
County
$390
Santa Clara
Valley Water
District
$500
New Fee, $521
Proposed
Proposed Fee Peer Agencies
Fee Category
Mwelo Napa Review Fee
$400
Manteca
Res 11% of permit
Commercial - 5% of
permit
Peer Agencies
New Fee, Consultant
Actual Cost + 15%
Proposed Fee
Attachment 2
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HIGHLIGHTS
Attachment 2
1 Reso No. ______ (CM)
Reference: Reso No.’s 315-91, 318-92, 38-93, 199-93, 184-94, 300-95, 91-97, 314-06, 38-07, 147-09, 39-10, 42-10, 40-11, 172-17 (Rescind) Meeting Date: 051226 SWZ ______ TV ______ Finance ______ RESOLUTION NO. (CM)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE ACCEPTING THE CITY OF WATSONVILLE
COMPREHENSIVE USER FEE STUDY REPORT – APRIL 2026, AND
ESTABLISHING AND ADOPTING FEES, RATES AND CHARGES FOR
THE COMMUNITY DEVELOPMENT DEPARTMENT, AIRPORT, FIRE,
FINANCE, POLICE, PUBLIC WORKS, AND CITY CLERK
EFFECTIVE DATE: JULY 20, 2026, FOR ALL FEES
WHEREAS, the City has the authority to impose fees, charges, and rates to offset the costs for municipal services and regulatory programs under its police powers under California Constitution Article XI §7; and
WHEREAS, the City may not charge more than the cost of providing a service; and
WHEREAS, the last complete fee study was adopted by City Council on or about November 28, 2017, with a limited update in 2022 focused on Community Development fees; and
WHEREAS, City staff have been working with Government Consulting Partners, Inc (GCP) to complete an updated analysis of the fees; and WHEREAS, the Comprehensive User Fee Study, FY 2025-2026, prepared by Government Consulting Partners, Inc., dated April 2026 (“Fee Study”) focused on fees charged by the Community Development Department, Airport, Fire, Finance, Police, Public Works, City Clerk, and Parks and Community Services Department; and WHEREAS, the City Council has determined that it is in the City’s interest to update fees for services identified in the Master Fee Schedule, as set forth in this
2 Reso No. ______ (CM)
Reference: Reso No.’s 315-91, 318-92, 38-93, 199-93, 184-94, 300-95, 91-97, 314-06, 38-07, 147-09, 39-10, 42-10, 40-11, 172-17 (Rescind) Meeting Date: 051226
resolution, in order to proportionately and equitably allocate the City’s costs of providing services to those who benefit from those services; and
WHEREAS, the City has calculated the updated fees identified in this resolution in accordance with the requirements of Proposition 26 (California Constitution Article XIII C, § 1(e)) by which the fee amounts are no more than necessary to cover the City’s estimated reasonable costs of providing the services, and the costs are proportionately allocated to each fee payor based on their respective benefits from or burdens on the services, and each updated fee falls within one or more of the following five exceptions to the definition of “tax” as set forth in Proposition 26:
a) The amount of the fee does not exceed the City’s costs of providing a specific benefit to the payor; or
b) The amount of the fee does not exceed the City’s costs of providing a service or product to the payor;
c) The amount of the fee does not exceed the City’s costs of regulation (including licensing, permitting, investigation, inspecting, auditing, or enforcement); or
d) The amount of the fee does not exceed the value of City land authorized by the City for use by the payor; or
e) The amount of the fee is a fine or penalty for a violation of law; and WHEREAS, staff is not recommending full cost recovery for certain fees charged by the Fire Department as full recovery for fees related to false alarms is limited by potential billing and collection challenges; and
WHEREAS, to the extent that fees identified on the Master Fee Schedule are imposed for City services provided as conditions of the development of property, and those fees are required to comply with the requirements of the Mitigation Fee Act (the
3 Reso No. ______ (CM)
Reference: Reso No.’s 315-91, 318-92, 38-93, 199-93, 184-94, 300-95, 91-97, 314-06, 38-07, 147-09, 39-10, 42-10, 40-11, 172-17 (Rescind) Meeting Date: 051226
“Fee Act,” Government Code §§ 66000 – 66025), particularly the requirements of Government Code § 66014, the City has calculated the updated fees identified in this resolution in accordance with those requirements; and
WHEREAS, consistent with the requirements of the Fee Act, Government Code §§ 66016, 66017, 66018, and 6062a, the City made documents available for public review to describe the fees proposed for update in accordance with this resolution, and the City provided notice of the public hearing at which public testimony would be considered prior to City Council’s approval of this resolution; and WHEREAS, Government Code § 66016 requires data describing the proposed fee updates be made available to the public at least ten (10) days before the meeting at which fee increases are considered for services provided as conditions of developing property; and
WHEREAS, notice of a public hearing on the new and increased user fees was published in accordance with Government Code §§ 66018 and 6062a; and WHEREAS, for simple imposition of amended fees, all fees will become effective July 20, 2026, which is 60 days after final action by the City Council; and WHEREAS, fees will be adjusted annually by the Consumer Price Index (CPI), beginning on July 1, 2027, to keep the fees aligned with the increases in staff costs; and WHEREAS, a duly noticed public hearing before the City Council was held May 12, 2026, at which public testimony was received and duly considered on the proposed fees described in this resolution.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:
4 Reso No. ______ (CM)
Reference: Reso No.’s 315-91, 318-92, 38-93, 199-93, 184-94, 300-95, 91-97, 314-06, 38-07, 147-09, 39-10, 42-10, 40-11, 172-17 (Rescind) Meeting Date: 051226
1. That the above recitals are true and correct findings of the City Council.
2. That the Comprehensive User Fee Study, FY 2025-2026, prepared by Government Consulting Partners, Inc., dated April 2026., a copy of which is on file in the Office of the City Clerk, is hereby accepted.
3. That the City Council hereby establishes and adopts fees, rates and charges as listed in the “Proposed Fee Column” on Appendix “A”, effective July 20, 2026, attached hereto and incorporated herein by this reference.
4. The City Council hereby authorizes the City Manager, or designee, to approve an adjustment to any fee identified on the Fee Schedule (Appendix A) to adjust for impacts of inflation, provided that the adjustment complies with this section. The adjustment shall be made no more frequently than once every fiscal year and shall be effective on the date it is approved in writing by the City Manager, or designee, and posted on the City’s website. The amount of the adjustment to the fees shall not exceed the corresponding proportional change in the Consumer Price Index for All Urban Consumers in the San Francisco-Oakland-San Jose Area, published by the Bureau of Labor Statistics of the United States Department of Labor (CPI). In determining the annual CPI percentage increase, the index for the month immediately preceding the adjustment date shall be compared with the index for the month immediately preceding the date of the most recent previous adjustment. Notwithstanding the foregoing sentence, no such adjustment shall be made to: (i) any rates, fees or charges determined by using a percentage calculation; or (ii) any fee for which separate legal requirements must be followed (including any fee limited by state or federal law; a property related fee subject to Proposition 218, California Constitution Article XIII D § 6;
5 Reso No. ______ (CM)
Reference: Reso No.’s 315-91, 318-92, 38-93, 199-93, 184-94, 300-95, 91-97, 314-06, 38-07, 147-09, 39-10, 42-10, 40-11, 172-17 (Rescind) Meeting Date: 051226
and any development impact fee subject to the requirements of a nexus study in accordance with Government Code § 66016.5).
5. That the aforementioned amended fees, rates, and charges shall supersede any and all fees of the City inconsistent therewith and shall be effective immediately.
********************************
Comprehensive User Fee Study
City of Watsonville — City Council Presentation
Prepared by: Government Consulting Partners, Inc.
Recommended Actions
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville Adopt a resolution to
update the Citywide
User Fees
Approve
implementation of
adopted fees effective
7/20/2026
Approve an annual CPI
increase beginning in
July 2027
We last implemented a new Citywide Fee Study in 2017, with a refresh in FY 2020 for CDD fees.
The user fee study is intended to align user fees with the actual cost of providing the service and promoting fiscal sustainability and equity for our community as a whole.
Considerations
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville
Study Background & Purpose
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville What Are User Fees?
User fees are charges paid by individuals or businesses that directly request specific City services — such as building permits, planning applications, fire inspections, and policerelated reports.
Unlike taxes and impact fees, user fees are charged for specific services provided directly to the applicant and may not exceed the City’s reasonable cost to deliver those services under California law.
Impact fees are charged to new development to fund
infrastructure and facilities needed to accommodate growth Key Legal Standard:
Government Code §66000 et seq. — fees must reflect actual cost, not generate profit. Any shortfall is subsidized by the General Fund.
Why Update Fees Now?
Aging Fee Schedule
Many City fees have not been updated in years — cost increases have outpaced revenue.
General Fund Subsidy
Without adequate fees, general tax dollars subsidize services benefiting individual applicants.
Legal Compliance
Periodic fee studies ensure fees stay within legal limits and reflect current staffing costs.
New Service Costs
Opportunity to add new fee services
Study Methodology
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville 1 Data Collection
Gathered salary,
benefit, overhead,
and service volume
data from
departments.
Reviewed existing
fee schedules.
2 Time & Activity
Interviews
Staff interviews
were used to
document time
estimates by
activity for each
individual fee.
3 Full-Cost Calculations
Produced
Calculation is based
on a fully burdened
hourly rate
multiplied by
average staff time,
including direct
labor and allocated
overhead.
4 Comparison Survey
Current Watsonville
fees compared
against peer
California cities to
establish market
context and
reasonableness.
5 Recommendations
Fees set at the
calculated full cost.
Policy options
presented for
phased
implementation or
full adoption.
Departments Included in This Study
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville Airport City Clerk/Admin Building Code Enforcement
Housing Planning Finance Fire
Police Public Works
Citywide Fiscal Impact
Summary of current fees vs. full cost of service
$2.82M
Full Cost of Service
Annual estimated cost to deliver all feesupported services $1.73M
Current Fee Revenue
Revenue generated at existing fee levels
$1.09M
Revenue Opportunity
This represents the unrecovered fee revenue
for the fees analyzed in this study
Current Cost Recovery Rate: 61% → Full Cost Recovery Would Generate: $1.09M Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville
Department-by-Department Results
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville Department Full Cost Current Rev Gap Recommended Revenue City Clerk $0 $0 $0 $0
Building $1,106,672 $784,000 $322,672 $1,106,672
Code Enforcement $12,958 $4,500 $8,458 $12,958
Housing $0 $0 $0 $0
Planning $442,696 $245,699 $196,997 $442,693
Finance $196,733 $157,744 $38,989 $196,733
Fire $180,209 $137,769 $42,440 $174,426
Police $211,031 $155,776 $55,255 $211,031
Public Works $397,877 $247,316 $150,561 $397,877
General Plan Maint. Fee $200,000 $0 $200,000 $200,000
Technology Surcharge $75,035 $0 $75,035 $75,035
TOTAL $2,823,211 $1,732,804 $1,090,407 $2,817,425
Fee Recommendation Highlights
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville Department Fee Volume Current
Fee
Proposed
Fee $ Change
Finance Business License Processing Service Charge 3307 $48 $59 $12 Fire Title 19 Inspections (fire user fees) - 0-2,500 sqft 336 $194 $240 $46 Fire Self Inspections 932 $53 $63 $10
Planning Admin Review Permit 195 $193 $843 $650
Planning Fence Permit Admin. Use Permit 32 $716 $1,011 $295 Planning Signs: Temporary 38 $193 $246 $53
Planning Permanent record retention fee 63 $13 $13 $0
Planning Noticing/Label Fee 20 $84 $407 $323
Fee Recommendation Highlights
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville Department Fee Volume Current
Fee
Proposed
Fee $ Change
Police Police Reports 960 $44 $69 $25
Police Vehicle Impound Release Fee 285 $234 $367 $133
Police Security Alarm Registration Fee 56 $82 $105 $23
Police Security Alarm Registration Renewal Fee 192 $53 $58 $5 Police False Security Alarm Fee (After one false alarm in any calendar year) 101 $101 $105 $4
Police 30 Day Vehicle Impound Hearing Fee 36 $101 $162 $61 Public Works Minor Encroachment Permit Processing Fee 66 $322 $418 $96 Public Works Testable back-flow prevention devices perfomed by City 1200 $14 $14 $0 Public Works Fire Flow Check - Monday through Friday 8am to 230pm 40 $521 $998 $477 Public Works Restoration of Utility Service Charge - regular hours 889 $60 $161 $101 Public Works Restoration of Utility Service Charge - Service activation fee Page 386 of 644 671 $58 $108 $50 Airport Fund Results
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville ¹ Airport reflects an enterprise fund — fees are structured for full self-sufficiency. | Parks & Recreation data not included Page 387 of 644in this study cycle.
General Plan Maintenance Fee
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville Watsonville does not currently recover General Plan maintenance costs, despite State law allowing it. Peer jurisdictions already do. This fee aligns with regional practice, shifts costs to development, and generates ~ $200K annually based on $4.0M in long-term planning costs. The charts below show the cost build-up (left) and peer fee comparison (right).
Technology Surcharge
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville The City does not currently recover technology system costs. A 5% surcharge would ensure users help fund the permitting systems they rely on for service delivery and efficiency. This would generate approximately $75,000 annually for ongoing maintenance and upgrades. The charts below show the cost build-up (left) and peer comparison (right), including neighboring jurisdictions, the peer average, and the proposed rate.
STAGE 3 OF 4
Comparison Survey
Peer Cities Analysis — How Watsonville Compares
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville
Comparison Survey
How Watsonville’s fees compare to peer California cities Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville Service Costs Vary
Differences in staffing,
operations, and
overhead
Policy Choices Matter
Cost recovery targets
vary by agency
Different Services
Level of service may
differ from agency to
agency
Legal Compliance
Legal compliance
requires fees to be
based on actual costs,
not peer averages
How to use this survey: Comparison data shows where Watsonville’s fees fall relative to peers, but recommendations are based on cost-of-service—not peer averages. Full tables are in Appendix B of the report; the charts on the following slides show data point for peer fee (gray), average fee (orange), proposed fee (green), and current fee (blue).
STAGE 4 OF 4
Policy Recommendations
GCP’s Recommendations for Fee Administration & Sustainability Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville
Policy Recommendations
Three formal recommendations from GCP
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville 01 Annual CPI Indexing
In non-study years, update user fees using an annual inflation index (CPI) to keep fees aligned with staffing costs. Note: fees capped by State or Federal law are exempt from CPI adjustments.
02 Revenue Monitoring for New & Adjusted Fees
Monitor revenue generated by new and adjusted fees. Check performance at 6 months and 1 year to ensure fees are performing as intended, and that recreation fee increases are not reducing participation. 03 Comprehensive Re-Study Every 3–5 Years
Conduct a detailed fee analysis at least every three to five years. Incorporate minor adjustments (e.g., new fees arising from new legislation) as needed between full study cycles.
Next Steps
Moving from study findings to fee adoption
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville 01 Council Direction
Council provides direction on cost
recovery targets and any fee amounts to
phase in gradually rather than adopt at
full cost.
02 Fee Schedule Update
City prepares an updated fee schedule
resolution incorporating Council direction
and the study’s cost findings.
03 Adoption & Monitoring
Council adopts updated fee schedule.
Staff monitors revenue at 6-month and 1-
year intervals; applies annual CPI
adjustments going forward.
Comparison Survey — Highlights
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville Building
Comparison Survey — Highlights
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville Planning
Comparison Survey — Highlights
Government Consulting Partners, Inc. | Confidential — Prepared for City of Watsonville Fire Finance
1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, May 12, 2026
TO: CITY COUNCIL
WRITTEN BY: PARKS SUPERINTENDENT MEDINA
RECOMMENDED BY: PARKS & COMMUNITY SERVICES DIRECTOR CALUBAQUIB APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: DIRECTING FILING OF THE 2026-27 ANNUAL ENGINEER’S REPORT FOR
THE LANDSCAPE & LIGHTING MAINTENANCE ASSESSMENT DISTRICTS PK-03-02 BAY BREEZE, PK-03-03 VISTA MONTAÑA AND PK-94-1
GONZALES STREET ALLEY
RECOMMENDATION:
Staff recommend that the City Council:
1. Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-03-02 (Bay Breeze),
2. Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-03-03 (Vista Montaña), and
3. Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-94-1 (Gonzales Street Alley).
BACKGROUND:
The Landscaping and Lighting Act of 1972 (the “1972 Act”) requires various resolutions to provide notice to those affected regarding the annual approval of assessment amounts to be levied for an existing landscape and lighting maintenance assessment district (“LLMAD”). These resolutions include a resolution of initiation (to direct the filing of the annual engineer’s report), a resolution of intention (to schedule a public hearing to consider the annual assessment levy based on the engineer’s report), and the resolution of formation (to approve the levy of the annual assessment), pursuant to the 1972 Act (California Streets and Highways Code Sections 22500, et seq.). This report summarizes the recommendation to approve the resolution of initiation to direct the preparation of the Engineer’s
2 Report for FY 2026/2027 for the three LLMADs in the City for Bay Breeze, Vista Montaña, and Gonzales Street Alley.
DISCUSSION:
Bay Breeze
The Bay Breeze Subdivision is located at the southwest corner of Ohlone Parkway and Harkins Slough Road. The improvements include maintenance of landscaping, lighting, street trees, perimeter fencing, a pedestrian path, and detention basins. The project’s developer, Western Pacific Housing, proposed that the operation, maintenance, repair, and replacement of these items be funded through the formation of an LLMAD as provided in the Project’s Tentative Map Condition No. 17.
The public improvements were accepted by the city at the March 22, 2005, City Council meeting (Resolution No. 60-05 (CM)). City staff now maintain the improvements listed above.
Vista Montaña
The Vista Montaña subdivision is located off of East Lake Avenue and adjacent to Ann Soldo Elementary School. The Vista Montaña Subdivision LLMAD is comprised of two Zones: A and B.
Zone A benefits all parcels within the District, which includes, for example, the street lighting installed along Highway 152, the landscape improvements along Highway 152, and the agricultural buffer area. Zone B benefits those parcels within the single-family residential area primarily and includes the maintenance of the “street end caps”, the “park strips”, and street lighting.
The subdivision’s developer, the Clarum Corporation, proposed that the maintenance of these items be funded through a Landscaping and Lighting Assessment District, which was required in Tentative Map Condition No. 74.
Current assessment revenue has proven insufficient to fund ongoing operational needs and the maintenance levels desired by property owners, while building a reserve over time to fund eventual capital repairs and/or associated improvements. To address these funding needs, City staff conducted a year-long engagement effort with property owners to develop solutions.
The City held meetings with residents on June 15 and June 21, 2023. Following those meetings, Vista Montaña property owners, who volunteered to participate in focused discussions, formed an Advisory Committee Group. This group met with City staff twice a month from August through December 2023.
The Advisory Committee Group identified assessment options that the LLMAD property owners could consider.
Follow-up meetings with property owners were held on January 24 and February 15, 2024, to present recommendations from the Advisory Committee Group, refine a proposed overlay assessment to adequately fund the reserve and maintenance of the Vista Montaña LLMAD, and share information regarding the vote necessary to approve said assessment. Staff presented background information on the
3 LLMAD, historical accounting information, an overlay option for dedicated maintenance, and Prop 218 (voting procedures for the LLMAD assessment). Staff collected and responded to residents' questions.
On March 26, 2024, the Council adopted a resolution directing the initiation of proceedings for the formation of a Landscape and Lighting Assessment District to be known as Vista Montaña No. 2 Landscape and Lighting Maintenance Assessment District to fund operation, maintenance, and repair of the landscaping and associated improvements. The proposed district would overlay the existing district to provide supplemental revenue. Based on property owner input, it was proposed that this assessment be implemented gradually over a five-year period. In accordance with Proposition 218, formation proceedings for the proposed new LLMAD were held, including the required noticing, balloting, and public hearing. During the public hearing on July 9, 2024, ballots were tabulated, and the proposed overlay failed with 18.85% of weighted ballots in support and 81.15% not in support.
Following this 2024 ballot process, when the City Council set the annual LLMAD assessment amounts in 2024 and 2025, the City included Consumer Price Index (CPI) increases, as authorized by the initial 2003 LLMAD. However, the assessment amounts for this LLMAD continue to be insufficient to fund the full scope of maintenance and replacement of improvements as allowed by the Engineer’s Report. Therefore, the City’s maintenance efforts are prioritizing essential maintenance to a level that ensures safety, functionality, and regulatory compliance, while nonessential aesthetic landscape services have been paused in order to stay within budget, while rebuilding the reserve account. The City has a responsibility to ensure proper funding to cover emergencies or other essential infrastructure failures. Maintenance crews continue to provide basic services, including maintenance of:
Streetlights, signs, and related electrical infrastructure Perimeter walls and fencing
Agricultural buffer areas
Parkway strips, street trees, pedestrian and bicycle paths Graffiti-resistant coatings
Safety-related landscape maintenance
Landscape maintenance within the drainage channel
Finances for the Vista Montaña LLMAD currently consist of:
Total Estimated Annual Expenditures - Estimated per forthcoming 26/27 Engineer’s Report
$ 311,544
Maximum Assessment - Estimated per forthcoming 26/27 Engineer’s Report with 3% CPI increase
$ 166,271
Variance between Annual Expenditures and Max. Assessment $ 145,273 Current FY 25/26 Financials
Total Assessment per 25/26 Engineer's report $ 161,428
Operating Expenses - FY 25/26 Adopted Budget $ 63,125
4 Personnel $ 7,500
Operating (Utilities, Contract Services, Supplies) $ 55,625 Estimated Balance to Reserve $ 98,303
Reserve Balance - As of 4/24/26 $ 141,209
City’s Maintenance Obligations
The City of Watsonville strives to maintain all City facilities to the best of its ability with its limited resources. LLMADs serve as a mechanism to generate funding to be spent on the maintenance and replacement of specific improvements in defined areas and assessed on properties that directly benefit from these improvements. The LLMAD, by way of the Engineer’s Report, identifies the improvements on which that assessment revenue may be spent to maintain or improve, but the LLMAD does not establish specific standards of maintenance that the City must meet, nor can it impose maintenance obligations when there is insufficient revenue to fund the services. Instead, the City’s legal obligation is to maintain City-owned property within the LLMAD to ensure public safety and regulatory compliance.
Potential Options for Increased Maintenance Service
As noted above, the costs of performing maintenance services have outpaced the assessment amounts approved in 2003 for the Vista Montaña LLMAD. Therefore, the City has insufficient revenue to fund all services identified in the 2003 Engineer’s Report for the LLMAD. In fact, that 2003 Engineer’s Report identifies the maintenance of publicly visible property owned by the subdivision’s developer, the Clarum Corporation, for which the developer has an underlying obligation to maintain (per the recorded Declaration of Covenants, Conditions and Restrictions).
Staff have identified the following options, including those that would allow maintenance levels beyond basic services afforded by the current “status quo” assessment, and beyond the City’s legal obligation to maintain the safety of City-owned property within the LLMAD.
1. Status Quo – The LLMAD could remain as is, and services would remain the same or may be reduced over time should expenses continue to outpace CPI. Additionally, property owners could form a Homeowners Association (HOA) to fund and manage additional maintenance.
2. Initiate a Proposition 218 Ballot Procedure to Propose a New LLMAD Assessment Overlay – The City could work with property owners to propose a similar overlay assessment as was proposed in 2024 to fund landscape maintenance.
3. Dissolve the LLMAD – The Council could dissolve the LLMAD by resolution, and property owners could form a Homeowners Association (HOA) to fund and manage all maintenance.
5 Gonzales Street Alley
Gonzales Street Alleyway District was established in order to assist the residents bordering the alleyway to cooperatively maintain this parcel that is now owned by the City. The annual cost to maintain the parcel is estimated at $640 and is spread among 17 parcels.
STRATEGIC PLAN:
The proposed levy of assessments for the LLMADs addresses the City Council’s Strategic Goal 02- Infrastructure & Environment by working to maintain our built infrastructure and preserve our natural environment through careful planning, preservation and maintenance for current residents and future generations.
FINANCIAL IMPACT:
The preparation of the Engineer’s Report will be accomplished by City Staff without the use of LLMAD revenue. The total assessment to be collected for 2026-27 will be determined upon preparation of the Engineer’s Report
ALTERNATIVE ACTION:
The resolutions proposed by this report are procedural and do not require that the City Council take further action.
For Assessment District PK-03-03 (Vista Montaña), in addition to filing the Annual Engineer’s Report, the Council could direct staff to pursue any of the options outlined above.
ATTACHMENTS AND/OR REFERENCES (IF ANY):
1. Options for Increased Maintenance Service - Potential Benefits and Challenges
2. Vista Montaña LLMAD Diagram
Attachment 1
Options for Increased Maintenance Service - Potential Benefits and Challenges Option 1: Status Quo (Annual CPI Increase) Option 2: CPI Increase, with Proposed Ballot Assessment
Option 3: Dissolve the LLMAD
Description Adopt annual CPI increase of 3%. Adopt annual CPI increase AND initiate a Prop 218 ballot proceeding to approve a new overlay
assessment.
Dissolve LLMAD and work with property owners
to form an HOA to fund and manage all
maintenance.
Potential Benefits Minimal financial impact to residents. If proposed overlay passes, it could fund increased maintenance services.
If HOA is formed, property owners would
control HOA dues and how funds are
budgeted.
Would remove an administrative structure that
has not met financial needs to produce
maintenance levels desired by property
owners.
Potential
Challenges
Funding limitations would continue to cause
landscape maintenance to fall far short of
Property Owner expectations and industry
standards.
Proposed assessment may be unlikely to pass
(Failed in 2024).
Degree of increased maintenance levels is
dependent on increased assessment property
owners are willing to support.
Would require initiative from property owners
to form HOA.
If HOA is not formed, City and private property
owners would remain responsible for
maintenance of their respective properties,
without LLMAD funding.
Property owners could form a Home Owners Association (HOA) under any of these options to generate revenue to fund additional maintenance.
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Reso No. (CM)
Meeting Date: 051226 SWZ ______ TV ______ PCS ______
1 RESOLUTION NO.__________ (CM)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE DIRECTING THE FILING OF THE 2026-2027 ANNUAL
ENGINEER'S REPORT FOR THE BAY BREEZE SUBDIVISION
LANDSCAPING AND LIGHTING MAINTENANCE ASSESSMENT
DISTRICT NO. PK-03-02 (LLMAD)
Assessment District No. PK-03-02
(Pursuant to the Landscaping and Lighting Act of 1972)
WHEREAS, the Bay Breeze Subdivision Landscaping and Lighting Maintenance Assessment District was formed pursuant to the Landscaping and Lighting Act of 1972; and
WHEREAS, on March 25, 2003, the City Council adopted Resolution No. 73-03 (CM), a Resolution of Intention to Order Improvements, Levy and Collect Assessments for the Bay Breeze Subdivision; and
WHEREAS, the improvements to be made in this assessment district are generally described as follows:
(a) Operate, maintain, repair, and replace the interior streetlights within the Subdivision.
(b) Maintain and replace the street trees within the District. (c) Operate, maintain, repair, and replace the detention basins and detention basin access roads within the District.
(d) Operate, maintain, repair, and replace the perimeter fencing within the District on its exterior boundaries.
(e) Maintain and replace the plantings done as a part of the wetland mitigation plan.
Reso No. (CM)
Meeting Date: 051226
2 (f) Maintain the Environmental Management Open Space parcel to be created inside the District.
(g) Maintain, repair, and replace the pedestrian path within the slough area outside adjacent to the District.
(h) Maintain, repair, and replace the landscaping within the public lands [abutting] and within the District, including the Ohlone Parkway medians. (i) Maintain the graffiti coatings on walls within the District and with public exposure.
(j) Administrative services to operate the District; and WHEREAS, on June 10, 2003, the City Council adopted Resolution No. 150-03 (CM) ordering the maintenance of improvements and confirming the first annual Engineers Report (including the diagram and assessment) and levying the assessment; and
WHEREAS, Streets and Highways Code Section 22621 requires proceedings to be taken for any fiscal year during which an assessment is to be levied and collected within an existing assessment district; and
WHEREAS, it is anticipated that an assessment will be levied and collected within this Assessment District during fiscal year 2026-2027 in an estimated amount to be determined upon preparation of the Engineer’s Report; and WHEREAS, this Resolution is adopted pursuant to Section 22622 of the California Streets and Highways Code, and the City proposes that assessment revenue will not be used to fund any new improvements or substantial changes to existing improvements; and
Reso No. (CM)
Meeting Date: 051226
3 WHEREAS, there are no new improvements and no substantial changes in existing improvements proposed for said Assessment District.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:
1. Adopting a Resolution directing the filing of the 2026-2027 Engineer’s Report is exempt from the requirements of the California Environmental Quality Act (CEQA) because the action will fund maintenance of existing facilities per CEQA Guidelines Section 15301.
2. The City Council finds that the foregoing recitals are true and correct.
3. That the Engineer is hereby ordered to prepare and to file the 2026-2027 annual report with the City Clerk for the Bay Breeze Subdivision Landscaping and Lighting Maintenance District in accordance with Article 4 (commencing with Section 22565) of Chapter 1 of the Landscaping and Lighting Act of 1972 of the Street and Highways Code. **********************************
Reso No. (CM)
Meeting Date: 051226 SWZ ______ TV ______ PCS ______ 1
RESOLUTION NO.__________ (CM)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE DIRECTING THE FILING OF THE 2026-2027 ANNUAL ENGINEER'S REPORT FOR THE VISTA MONTAÑA SUBDIVISION
LANDSCAPING AND LIGHTING MAINTENANCE ASSESSMENT
DISTRICT NO. PK-03-03 (LLMAD)
Assessment District No. PK-03-03
(Pursuant to the Landscaping and Lighting Act of 1972)
WHEREAS, the Vista Montaña Subdivision Landscaping and Lighting Maintenance Assessment District was formed pursuant to the Landscaping and Lighting Act of 1972; and
WHEREAS, on April 22, 2003, the City Council adopted Resolution No. 98-03 (CM), a Resolution of Intention to Order Improvements, Levy and Collect Assessments for the Vista Montaña Subdivision; and
WHEREAS, the improvements to be made in this assessment district are generally described as follows:
(a) Maintain landscaping and erosion control measures adjacent to the drainage facilities within the agricultural buffer area. (b) Maintain, repair, and replace all facilities within the agricultural buffer area (except streets and utilities) including but not limited to landscaping, signage, perimeter walls, retaining walls, pedestrian paths and erosion control plantings within or adjacent to the detention basins and drainage swale.
(c) Operate, maintain, repair, and replace and supply power to the street lighting within the district.
Reso No. (CM)
Meeting Date: 051226
2 (d) Maintain, repair, and replace the landscape parkway strip and street trees within the District.
(e) Maintain, repair, and replace the landscaping and replace the perimeter wall along Highway 152, which may or may not be within the District boundaries. (f) Maintain, repair, and replace the pedestrian/bike path connecting McKenzie Avenue and outside the subdivision.
(g) Provide administrative services to operate the District; and WHEREAS, on June 10, 2003, the City Council adopted Resolution No. 149-03 (CM) ordering the maintenance of improvements and confirming the first annual Engineers Report (including the diagram and assessment) and levying the assessment; and
WHEREAS, Streets and Highways Code Section 22621 requires proceedings to be taken for any fiscal year during which an assessment is to be levied and collected within an existing assessment district; and
WHEREAS, it is anticipated that an assessment will be levied and collected within this Assessment District during fiscal year 2026-2027 in an estimated amount to be determined upon preparation of the Engineer’s Report; and WHEREAS, this Resolution is adopted pursuant to Section 22622 of the California Streets and Highways Code, and the City proposes that assessment revenue will not be used to fund any new improvements or substantial changes to existing improvements; and
WHEREAS, there are no new improvements and no substantial changes in existing improvements proposed for said Assessment District.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:
Reso No. (CM)
Meeting Date: 051226
3 1. Adopting a Resolution directing the filing of the 2026-2027 Engineer’s Report is exempt from the requirements of the California Environmental Quality Act (CEQA) because the action will fund maintenance of existing facilities per CEQA Guidelines Section 15301.
2. The City Council finds that the foregoing recitals are true and correct.
3. That the Engineer is hereby ordered to prepare and to file the 2026-2027 annual report with the City Clerk for the Vista Montaña Subdivision Landscaping and Lighting Maintenance District in accordance with Article 4 (commencing with Section 22565) of Chapter 1 of the Landscaping and Lighting Act of 1972 of the Street and Highways Code.
*****************************************
Reso No. (CM)
Meeting Date: 051226 SWZ ______ TV ______ PCS ______ 1
RESOLUTION NO.__________ (CM)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE DIRECTING THE FILING OF THE 2026-2027 ANNUAL
ENGINEER'S REPORT FOR THE GONZALES STREET ALLEYWAY
LANDSCAPING AND LIGHTING MAINTENANCE ASSESSMENT
DISTRICT NO. PK-94-1 (LLMAD)
Assessment District No. PK-94-1
(Pursuant to the Landscaping and Lighting Act of 1972)
WHEREAS, the Gonzales Street Alleyway Landscaping and Lighting Maintenance Assessment District was formed pursuant to the Landscaping and Lighting Act of 1972; and
WHEREAS, on October 11, 1994, the City Council adopted Resolution No. 297-94 (CM), a Resolution of Intention to Order Improvements, Levy and Collect Assessments for the Gonzales Street Alleyway Landscaping and Lighting Assessment District No. PK-94- 1; and
WHEREAS, Resolution No. 297-94 (CM) described the improvements as follows:
the installation, servicing, and/or maintenance; of public lighting, landscaping, park and recreational improvements within the Assessment District; and WHEREAS, on November 29, 1994, the City Council adopted Resolution No. 352- 94 (CM) ordering the maintenance of improvements and confirming the first annual Engineer’s Report (including the diagram and assessment) and levying the assessment; and
WHEREAS, the current plans and specifications call for annual maintenance: a) routine plant care and mowing, and b) alleyway maintenance; and
Reso No. (CM)
Meeting Date: 051226
2 WHEREAS, Streets and Highways Code Section 22621 requires proceedings to be taken for any fiscal year during which an assessment is to be levied and collected within an existing assessment district; and
WHEREAS, it is anticipated that an assessment will be levied and collected within this Assessment District during fiscal year 2026-2027 in an estimated amount to be determined upon preparation of the Engineer’s Report; and WHEREAS, this Resolution is adopted pursuant to Section 22622 of the California Streets and Highways Code, and the City proposes that assessment revenue will not be used to fund any new improvements or substantial changes to existing improvements; and WHEREAS, there are no new improvements and no substantial changes in existing improvements proposed for said Assessment District.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:
1. Adopting a Resolution directing the filing of the 2026-2027 Engineer’s Report is exempt from the requirements of the California Environmental Quality Act (CEQA) because the action will fund maintenance of existing facilities per CEQA Guidelines Section 15301.
2. The City Council finds that the foregoing recitals are true and correct.
3. That the Engineer is hereby ordered to prepare and to file the 2026-2027 annual report with the City Clerk for the Gonzales Street Alleyway Landscaping and Lighting Maintenance Assessment District PK-94-1 in accordance with Article 4 (commencing with Section 22565) of Chapter 1 of the Landscaping and Lighting Act of 1972 of the Street and Highways Code.
*******************************************
DIRECTING FILING OF THE 2026-27 ANNUAL
ENGINEER’S REPORT FOR THE LANDSCAPE
& LIGHTING MAINTENANCE ASSESSMENT
DISTRICTS PK-03-02 BAY BREEZE, PK-03-03
VISTA MONTAÑA AND PK-94-1 GONZALES
STREET ALLEY
May 12, 2026
Recommendation
• Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-03-02 (Bay Breeze)
• Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-03-03 (Vista Montaña)
• Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-94-1 (Gonzales Street Alley)
Landscaping & Lighting Act
• Landscaping & Lighting Act of 1972 governs annual
assessment procedures
• Required Resolutions:
• Resolution of Initiation (Directs the Engineer’s
Report) – 5/12/26
• Resolution of Intention (Files the Engineer’s Report
and sets public hearing) – 6/9/26
• Resolution of Formation (approves annual levy) –
7/7/26
Bay Breeze: Overview
• Location: SW corner of Ohlone Pkwy & Harkins
Slough Rd
• Improvements maintained:
• Landscaping & lighting
• Street trees
• Perimeter fencing
• Pedestrian path
• Detention basins
• Developer: Western Pacific Housing
• Public improvements accepted March 22, 2005
Gonzales Street Alley Overview
• District created to support shared maintenance of
alley parcel
• Parcel owned by City
• Annual Assessment: $640
• Cost spread over 17 parcels
Vista Montaña:
Overview
• Location: Off East Lake Ave, near
Ann Soldo Elementary
• Two Zones:
• Zone A: street lighting
along Hwy 152, landscaping,
ag buffer
• Zone B: street end caps,
park strips, residential
lighting
• Developer: Clarum
Corporation
Current Funding Challenges
Revenue is insufficient to
fund reserves AND standard
maintenance levels
The City has a responsibility
to rebuild reserves for future
repairs
Since 2020: Meetings,
letters, and outreach to
property owners
2024: Proposition 218 ballot
for landscape overlay to
address revenue
difficiency did not pass:
18.85% support
81.15% not in support
Current Finances
Total Estimated Annual Expenditures - Estimated per forthcoming 26/27 Engineer’s Report $ 311,544
Maximum Assessment - Estimated per forthcoming 26/27 Engineer’s Report with 3% CPI increase $ 166,271
Variance between Annual Expenditures and Max. Assessment $ 145,273 Current FY 25/26 Financials
Total Assessment per 25/26 Engineer's report $ 161,428
Operating Expenses - FY 25/26Adopted Budget $ 63,125
Personnel $ 7,500
Operating (Utilities, Contract Services, Supplies) $ 55,625 Estimated Balance to Reserve $ 98,303
Reserve Balance - As of 4/24/26 $ 141,209
City’s Maintenance
Obligations
• The City historically and currently maintains
facilities with deficient funding.
• The LLMAD includes both City-owned and
privately-owned properties
• The Engineer’s Report
• Does: Defines what funds may be spent on to maintain or improve • Does not:
• Establish maintenance obligations or specific
standards, nor
• Impose maintenance obligations where there
is insufficient revenue to fund services
• The City’s legal obligation is to maintain City- owned property within the LLMAD to ensure public safety and regulatory compliance
Current
Maintenance Status
• CPI increases applied in 2024 &
2025
• Funding is insufficient for full
services - Nonessential aesthetic
maintenance has been paused
Essential Services
Currently Provided
Maintenance to a level that ensures safety,
functionality, and regulatory compliance of
the following:
• Streetlights, signs, electrical infrastructure
• Perimeter walls & fencing
• Agricultural buffer areas
• Parkway strips & street trees
• Pedestrian & bicycle paths
• Graffiti-resistant coatings
• Safety-related landscape work
• Drainage channel landscape maintenance
Options for Increased Maintenance
Option 1: Status Quo
• Services remain the same
• HOA could be formed for additional
maintenance
Option 2: Propose New Assessment Overlay
• Similar to 2024 proposal
• Would fund enhanced aesthetic
landscape maintenance
Option 3: Dissolve the LLMAD
• Council could dissolve by resolution
• HOA would manage and fund all
maintenance
Option 1: Status Quo (Annual CPI
Increase)
Option 2: CPI Increase, with
Proposed Ballot Assessment
Option 3: Dissolve the LLMAD
Description Adopt annual CPI increase of 3%. Adopt annual CPI increase AND initiate a Prop 218 ballot proceeding
to approve a new overlay
assessment.
Dissolve LLMAD and work with
property owners to form an HOA to
fund and manage all maintenance.
Potential
Benefits
Minimal financial impact to property
owners.
If proposed overlay passes, it could
fund increased maintenance
services.
• If HOA is formed, property
owners would control HOA dues
and how funds are budgeted.
• Would remove an administrative
structure that has not met
financial needs to produce
maintenance levels desired by
property owners.
Potential
Challenges
Funding limitations would continue
to cause landscape maintenance to
fall far short of Property Owner
expectations and industry standards.
• Proposed assessment may be
unlikely to pass (Failed in 2024).
• Degree of increased
maintenance levels would be
dependent on increased
assessment property owners are
willing to support.
• Would require initiative from
property owners to form HOA.
• Degree of increased
maintenance levels would be
dependent on HOA dues
property owners are willing to
support.
• If HOA is not formed, City and
private property owners would
remain responsible for
maintenance of their respective
properties, without LLMAD
funding.
Property owners could form a Home Owners Association (HOA) under any of these options to generate revenue to fund additional maintenance. Page 424 of 644
Recommendation
• Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-03-02 (Bay Breeze)
• Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-03-03 (Vista Montaña)
• Adopt a resolution directing the Filing of the Annual Engineer’s Report for Assessment District PK-94-1 (Gonzales Street Alley)
• Alternative Action for Vista Montaña (PK-03-03): Council may also direct staff to pursue any of the options for Increased Maintenance Service presented
QUESTIONS
1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, May 12, 2026
TO: CITY COUNCIL
WRITTEN BY: COMMUNITY DEVELOPMENT DIRECTOR ORBACH
RECOMMENDED BY: COMMUNITY DEVELOPMENT DIRECTOR ORBACH
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: ORDINANCE AMENDING MULTIPLE CHAPTERS OF TITLE 14 (ZONING) AND TITLE 13 (SUBDIVISIONS AND MAPS) RELATED TO
IMPLEMENTATION OF PROGRAMS WITHIN THE 6TH CYCLE 2023-2031
HOUSING ELEMENT
RECOMMENDATION:
City Staff recommend the City Council introduce, for first reading only, waiving full reading of the text, an Ordinance amending multiple chapters within Title 14 (Zoning) and Title 13 (Subdivisions and Maps) of the Watsonville Municipal Code and finding the action exempt from review under the California Environmental Quality Act (CEQA) as it is not a “project” but if a project, exempt pursuant to CEQA Guidelines section 15061(b)(3).
BACKGROUND:
On September 26, 2023, the City of Watsonville accepted a $180,000 Regional Early Access Planning (REAP) 2.0 Grant from the Association of Monterey Bay Area Governments (AMBAG) for the implementation of programs in the City’s 6th Cycle Housing Element.
In 2024, due to state budget shortfalls, the grant amount was reduced by approximately six percent to $169,380.
On September 17, 2024, the California Department of Housing and Community Development (HCD) provided the city with a findings letter stating that the Draft City of Watsonville 2023-2031 Housing Element was in substantial compliance with the requirements of Housing Element law, stating:
“The revised draft, including revisions, element meets the statutory requirements that were described in HCD’s May 10, 2024, review. The housing element will substantially
2 comply with State Housing Element Law (Gov. Code, § 65580 et seq.) when it is adopted, submitted to, and approved by HCD, in accordance with Government Code section 65585.”
On October 1, 2024, the Planning Commission adopted Resolution No. 12-24 (PC), recommending the City Council repeal in its entirety the 5th Cycle 2015-2023 Housing Element of the General Plan and adopt in full the 6th Cycle 2023-2031 Housing Element as an amendment to the 2005 General Plan by an affirmative vote of a majority of the total membership of the Commission in compliance with Government Code Section 65354.
On October 15, 2024, the City Council adopted Resolution No. 213-24 (CM), repealing in its entirety the 2015-2023 Housing Element and adopting in full the 2023-2031 Housing Element as an amendment to the 2005 General Plan. The following day, staff submitted the adopted Housing Element to HCD for final certification review. On October 28, 2024, HCD provided a letter certifying that the adopted Housing Element was in substantial compliance with State Housing Element Law. In this letter, HCD also noted that the City must continue to implement all programs in the adopted Housing Element in a timely and effective manner.
On November 12, 2024, the City Council adopted Resolution No. 228-24 (CM), awarding a contract to Raimi + Associates for consultant services for the 6th Cycle Housing Element implementation. ` On May 6, 2025, City Staff presented an overview of the first round of proposed changes to the Watsonville Municipal Code and the Downtown Watsonville Specific Plan (DWSP) related to the implementation of Housing Element programs to the Planning Commission for discussion and feedback.
On June 3, 2025, the Planning Commission adopted Resolution No. 10-25 (PC) recommending the City Council adopt zoning code text amendments to multiple chapters within Title 14 (Zoning) of the Watsonville Municipal Code and adopt amendments to the Downtown Watsonville Specific Plan related to implementation of ten programs within the 2023-2031 6th Cycle Housing Element.
On September 9, 2025, the City Council adopted Ordinance No. 1481-25 with zoning code text amendments to multiple chapters within Title 14 (Zoning) of the Watsonville Municipal Code and Ordinance No. 1482-25 with amendments to the Downtown Watsonville Specific Plan related to implementation of ten programs within the 2023-2031 6th Cycle Housing Element.
As part of Phase II implementation of the 2023–2031 6th Cycle Housing Element, staff and the project team identified additional programs and updates needed based on this review and recent changes in state law.
On May 5, 2026, the Planning Commission approved Resolution No. 07-26 (PC) recommending the City Council adopt additional zoning code text amendments for multiple chapters within Title 14 (Zoning) and Title 13 (Subdivisions and Maps) of the Watsonville Municipal Code related to implementation of two more programs within the 2023-2031 6th Cycle Housing Element and several clean up amendments to address recently adopted state law.
3 PROCESS:
Pursuant to WMC Section 14-12.801, the text of the adopted Zoning Code may be amended in a manner identical to WMC Section 14-12.701, which outlines the process for General Plan amendments. Any proposed zoning code text amendment shall be reviewed by the Planning Commission at a public hearing for recommendation to the City Council. At the conclusion of the public hearing, the Commission shall adopt a resolution recommending approval or denial of the proposed amendment by the affirmative vote of the majority of the Commission members, subject to findings required by WMC Section 14-12.708.
Upon receipt of the Commission’s recommendation, and before adopting any amendment, the Council shall review the matter at a public hearing noticed in accordance with Part 9 of Chapter 14-10 and conducted in accordance with Part 10 of Chapter 14-10.
To approve the Zoning Code Text Amendments, the City Council must make the findings in WMC Section 14-12.708.
STANDARD OF REVIEW:
The City Council's approval of Zoning Code text amendments is legislative and requires environmental review. For more information on the standard of review and process, see the Standard of Review and Process Overview on the City website.
DISCUSSION:
The 6th Cycle Housing Element programs must be implemented in accordance with the timelines set forth in the Policy Plan, Chapter 2 of the Housing Element. City staff created a Housing Element implementation program checklist to track and monitor progress and used it to identify the second round of implementation action items for inclusion in the scope of work for the Housing Element Implementation consultant.
Raimi + Associates conducted a review and analyzed existing policy documents, staff reports, previous studies, and relevant sections of the 6th Cycle Housing Element, Watsonville Municipal Code (WMC) Title 14 Zoning and Title 13 Subdivisions and Maps, pertaining to the following Housing Element programrelated items:
Program C.9 - Low Barrier Navigation Centers (WMC Chapter 14-55) Program B.5 - Child Day Care Home by Right (WMC Chapter 14-16) As a part of this review, and to address recent changes in state law, the following items were identified as clean-up items:
WMC Chapter 14-54 – Two-Unit Development
WMC Chapter 13 -13 – Urban Lot Splits
WMC Chapter 14-23 – Accessory Dwelling Units and Junior Accessory Dwelling Units Each of these programs is briefly described below, along with the proposed action.
4 The proposed amendments to WMC Title 14 (Zoning) and Title 13 (Subdivisions and Maps) are included in Exhibit A to the Ordinance.
Amendments to Title 14 Zoning Ordinance
Program B.5 Child Day Care Home by Right (WMC Chapters 14-16 & 14-18) Description: Adopt a Zoning Ordinance amendment to permit Child Day Care home by right. Watsonville is primarily a family community, and the City permits child (day) care homes at various scales as an accessory use in all residential zones.
Proposed Action:
1. Continue to support the provision of childcare assistance and facilitate the development of new housing with a childcare component.
2. Amend the Zoning Ordinance to allow child day care home by-right in all residential zoning districts in compliance with the provisions of the Health and Safety Code.
3. Amend the Zoning Ordinance to define “Child (day) Care Home by-Right” in WMC Chapter 14-18:
Definitions.
4. Revise the use tables in WMC Chapter 14-16: District Regulations for the following zones to allow Child Day Care by right:
(a) R-1 - Single-Family Residential District (Low Density) (b) R-1P - Single-Family Planned Residential District
(c) RM-2 - Multiple Residential District (Medium Density) (d) RM-3 - Multiple Residential District (High Density) (e) DWSP zoning districts (Downtown Core, Downtown Mixed Use, and Downtown Industrial) Program C.9 - Low Barrier Navigation Centers (WMC Chapter 14-55) Description: Adopt a Zoning Ordinance amendment to permit Low Barrier Navigation Centers (LBNC) and to include procedures and regulations to process low-barrier navigation centers in compliance with California Senate Bill 48. Low-barrier navigation centers are generally defined as housing first, low-barrier, service-enriched, temporary living facilities and/or shelters. LBNCs are focused on providing services and housing for persons at-risk of becoming homeless or those experiencing homelessness into permanent housing while also connecting individuals to income, public benefits, and health services.
Proposed Action:
1. Amend the Zoning Ordinance to include procedures and regulations to process low-barrier navigation centers as a new chapter, WMC Chapter 14-55: Low Barrier Navigation Centers. (a) Revise the use tables in WMC Chapter 14-16: District Regulations for the following zones to allow Low Barrier Navigation Centers by right, provided the new requirements in Section 14-
55.04 are met:
5 (b) RM-2—Multiple Residential District (Medium Density) (c) RM-3—Multiple Residential District (High Density)
(d) CT — Thoroughfare Commercial District
(e) CN – Neighborhood Commercial District
(f) DWSP zoning districts (Downtown Core, Downtown Mixed Use, and Downtown Industrial) Because LBNCs are required to obtain an Administrative Review Permit (ARP), one additional change is being proposed to WMC Chapter 14-12.301(b) to allow the City to add conditions of approval to ARPs related to indemnity.
WMC Chapter 14-54 - Two-Unit Development
Description: Conduct a comprehensive review of Two-Unit Development requirements in the City’s Zoning Code. A “two (2) unit development” is defined as two primary dwelling units with a minimum living space of eight hundred (800) square feet. The two (2) unit developments may be in the form of a duplex or two (2) detached units. Amend the Two-Unit Developments, as applicable, to comply with State law requirements.
Proposed Actions:
1. Amend the WMC Chapter 14-54 - Two-Unit Development, as identified in Exhibit A to the Ordinance.
2. Refer to State law and apply amendments to areas of the City zoned for single-family residential (R-1 and R-1P zones), except where a development is located on a structure or parcel that is listed in the State Historic Resources Inventory or is designated under City ordinance as a historic district, property, or landmark, as defined in Section 5020.1 of the Public Resources Code.
WMC Chapter 13-13 – Urban Lot Splits
Description: Conduct a comprehensive review of the Urban Lot Splits eligibility requirements in the City’s Zoning Code. An “urban lot split” is defined as a subdivision of an existing parcel to create no more than two (2) new parcels of approximately equal lot area; provided that one (1) parcel shall not be smaller than forty (40%) percent of the lot area of the original parcel proposed for subdivision. Amend the urban lot splits chapter, as applicable, to comply with State law requirements.
Proposed Actions:
1. Amend WMC Chapter 13-13 – Urban Lot Splits as identified in Exhibit A to the resolution.
2. Refer to State law and apply amendments to areas of the City zoned for single-family residential (R-1 and R-1P zones), except where a development is located on a structure or parcel that is listed in the State Historic Resources Inventory or is designated under City ordinance as a historic district, property, or landmark, as defined in Section 5020.1 of the Public Resources Code.
WMC Chapter 14-23 – Accessory Dwelling Units and Junior Accessory Dwelling Units
6 Description: Text edits and additional text updating the language to comply with new state law relating to fire sprinklers, impact fees, utility connections, and Coastal Development Permits.
Proposed Actions:
1. Amend WMC Chapter 14-23 – Accessory Dwelling Units and Junior Accessory Dwelling Units as identified in Exhibit A to the Ordinance.
ZONING CODE TEXT AMENDMENT FINDINGS:
Pursuant to WMC Section 14-12.807, the Planning Commission and the City Council shall, in approving a text amendment to the zoning code, make the findings in WMC Section 14-12.708. Those findings with supportive evidence are below.
a) That the proposed amendment is consistent with the policies embodied in the General Plan and 2023-2031 Housing Element.
Supportive Evidence: The proposed amendments are consistent with the following policies embodied in the Housing Element and General Plan as described below:
General Plan Goal 3.1 Orderly Growth – Provide for orderly urban development that respects existing community character and provides for a clear separation between urban and agricultural land uses.
The proposed amendments were identified in the adopted and certified 6th Cycle Housing Element, which provides for orderly urban development by only identifying potential housing sites within the existing city limits. No housing inventory sites are within close proximity to agricultural land uses. Adoption of the proposed amendments will allow the Housing Element to remain certified; therefore, adoption of the proposed amendments is consistent with Goal 3.1.
Housing Element Goal 2.0 – Expand and protect housing opportunities for all economic segments and special needs groups within the community.
The proposed amendments were identified in the adopted and certified 6th Cycle Housing Element, which provides childcare assistance and facilitate the development of new housing with a childcare component. Adoption of the proposed amendments will allow the Housing Element to remain certified; therefore, adoption of the proposed amendments is consistent with Goal 2.0.
Housing Element Goal 3.0 – Provide housing opportunities for Watsonville’s share of the regional housing need for all income groups.
The proposed amendments were identified in the adopted and certified 6th Cycle Housing Element, which provides guidance to amend the zoning code to include
7 supportive housing and Low Barrier Navigation Centers would be included in the Policy plan. Adoption of the proposed amendments will allow the Housing Element to remain certified, therefore, adoption of the proposed amendments is consistent with Goal 3.0. b) That the proposed amendment is compatible to the extent possible with the actual and general planned use of the adjacent properties.
Supportive Evidence: The proposed amendments are consistent and compatible with the densities and development standards identified in: the Watsonville Municipal Code; the Downtown Watsonville Specific Plan (DWSP), which was last amended in August 2025; the General Plan as modified by the DWSP; and the 6th Cycle Housing Element, which was adopted and certified in October 2024. Therefore, the proposed amendment is compatible with the actual and general planned use of the adjacent properties.
These findings are located in Exhibit C to the Ordinance.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:
The City Council previously found that the adoption of the Housing Element update, including associated implementation programs, was exempt from review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000 et seq., as necessary to implement the City’s Regional Housing Needs Allocation (RHNA).
The proposed zoning amendments described in this report are consistent with and implement the programs identified in the certified Housing Element and are primarily clarifying changes or changes to conform to state law. Therefore, the proposed amendments do not constitute a “project” under CEQA, as they do not have the potential to result in a director or reasonably foreseeable indirect physical change in the environment.
Even if the proposed code amendments were considered a “project,” they would be exempt from CEQA review under the common sense exemption set forth in CEQA Guidelines Section 15061(b)(3), as it can be seen with certainty there is no possibility the activity may have a significant effect on the environment.
Accordingly, no further environmental review is required.
STRATEGIC PLAN:
The purpose of the City of Watsonville’s 2023-2025 Strategic Plan is to help the City prioritize its efforts, allocating both fiscal and human resources to achieve a shared vision and goals. The 2023-2025 Strategic Plan identifies seven goals, concerning economic development, infrastructure and environment, housing, fiscal health, public safety, community engagement and well-being, and efficient and well-performing government.
8 This action is consistent with the City Council’s goal regarding housing, in that it involves implementing Program B.5 (Child Day Care Home By Right), Program C.9 (Low Barrier Navigation Centers) of the City’s adopted Housing Element and brings Chapter 14-54 (Two-Unit Development), Chapter 13-13 (Urban Lot Splits), and Chapter 14-23 (Accessory Dwelling Units and Junior Accessory Dwelling Units) of the Watsonville Municipal Code into compliance with current state law.
FINANCIAL IMPACT:
A fiscal impact analysis estimates the costs and revenues to a local government from new plans or development proposals. The proposed item involves amending the Watsonville Municipal Code and DWSP in accordance with certain programs identified in the 6th Cycle Housing Element and would not result in new costs or revenues to the City.
This work is funded through a REAP 2.0 grant administered by AMBAG.
ALTERNATIVE ACTION:
The City Council may consider continuing the project and directing staff to return with additional information and/or revisions. This alternative action could compromise the City’s ability to meet the implementation timelines identified in the City’s Housing Element.
REFERENCES:
AMBAG. REAP 2.0: Local Suballocation Grant Program Guidelines. June 14, 2023. (Available at https://ambag.org/plans/regional-early-action-planning-grants-program) City of Watsonville. City of Watsonville 2023-2031 Housing Element. Adopted October 15, 2024 (Reso. No. 213-24). (Available at https://www.watsonville.gov/DocumentCenter/View/25062/HousingElement-2023-2031) City of Watsonville. Downtown Watsonville Specific Plan. Adopted September 26, 2025 (Ordinance No. 1482-25). (Available at https://www.watsonville.gov/DocumentCenter/View/23797/AdoptedDWSP-adopted-10-25-23-amended-8-26-25) Watsonville Municipal Code. Title 13, Subdivisions and Maps. Watsonville, CA: City of Watsonville. (Available at: https://www.codepublishing.com/CA/Watsonville/) Watsonville Municipal Code. Title 14, Zoning. Watsonville, CA: City of Watsonville. (Available at:
https://www.codepublishing.com/CA/Watsonville/)
ATTACHMENTS:
None.
1 Ord No. ______ (CM)
Reference:
Meeting Date: 051226
ORDINANCE NO. Introduction (CM)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE AMENDING MULTIPLE CHAPTERS WITHIN TITLE 14
(ZONING) AND TITLE 13 (SUBDIVISIONS AND MAPS) OF THE
WATSONVILLE MUNICIPAL CODE RELATED TO IMPLEMENTATION
OF PROGRAMS WITHIN THE 6th CYCLE 2023-2031 HOUSING
ELEMENT; AND FINDING THE ACTION EXEMPT FROM REVIEW
UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
AS IT IS NOT A PROJECT BUT IF A PROJECT, EXEMPT PURSUANT TO CEQA GUIDELINES SECTION 15061(B)(3)
WHEREAS, on October 15, 2024, the Watsonville City Council adopted Resolution No. 213-24 (CM), repealing in its entirety the 5th Cycle 2015-2023 Housing Element and adopting in full the 6th Cycle 2023-2031 Housing Element as an amendment to the 2005 General Plan; and
WHEREAS, the 2023-2031 Housing Element includes programs requiring amendments to Title 14 (Zoning) and Title 13 (Subdivisions and Maps) of the Watsonville Municipal Code (WMC) to comply with State law and address the City’s housing needs; and
WHEREAS, City staff and consultants from Raimi + Associates identified several other clean-up changes to Title 14 (Zoning) related to accessory dwelling units (Chapter 14-23) of the Watsonville Municipal Code that would bring them into compliance with current state law; and
WHEREAS, Chapter 2 of the 2023-2031 Housing Element provided timelines for the implementation of the Housing Element programs, and WHEREAS, City staff created a Housing Element implementation program checklist to track and monitor progress; and