I would have contacted the locksmith tech to get additional details before assuming it was tenant damage.

The contractor I hired finished the Foundation work in 4 weeks and tenant started reporting damages, thefts to items in Garage which contractor denied.

Then do a thorough research on tenant applicants (note: leaving this to a PM may be hazardous to your financial health) and choose the one that is most “stable” with the best potential for long term tenancy.This advice is contrary to maximization of rental income, but IMO will reduce expenses of tenant turnover, property damage, property management fees so much that the difference in bottom line income will be quite small.  

You are allowed to charge for ALL damages beyond ordinary wear-and-tear.

  $7k damage. 

The property was impacted by hurricane Helene and there is no substantial damages letter issued (yet?)

b) How do they (Cali Govt) deal with the damage, both in terms of who gets the blame and also where do they get the money?

Insurance doesn't cover anything anymore and we can almost just pay for all damages with the money we spend on it! 

Tenant covenants and agrees to pay interest at the maximum lawful rate or eighteen percent (18%) interest, whichever is less, compounded annually, on all unpaid Rent, damages, and other amounts owed by Tenant, excluding late fees, from that date of Landlord’s final accounting until such time Tenant pays all such outstanding amounts.

They are very likely to respond, but keep in mind you can't get dollars from a turnip.My experience is wear and damage are higher with some S8 tenants and not at all with others, just like regular tenants.