Agenda packet, first session — Arroyo Grande City Council, June 14, 2022 (part 2 of 5)

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Summary: Are the costs reasonable? Based on the results of the three separate cost-review techniques—trend review, external factor analysis and rate comparisons—the proposed cost assumptions for 2022 are reasonable.

What Is a Reasonable Return on these Costs?
After assessing if costs are reasonable, the next step is to determine a reasonable rate of return on these costs. The rate-setting method formally adopted by Arroyo Grande, Grover Beach, Oceano and Pismo Beach in their Franchise Agreements with SCSS includes clear criteria for making this assessment. It begins by organizing costs into three main categories, which will be treated differently in determining a reasonable “operating profit ratio:” Allowable Costs (Operations and Maintenance): Reasonable Operating Profit Allowed • Direct collection labor • Fuel
• Vehicle maintenance and repairs • Depreciation
• Insurance • Billing and collection
Pass-Through Costs: Can be Recovered but No Profit Allowed • Disposal costs (landfill, recycling, greenwaste)
• Franchise fees
• Payments to affiliated companies (such as facility rent, interest and trucking charges) Excluded and Limited Costs: No Revenues Allowed
• Charitable and political contributions • Non-IRS approved profit-sharing plans • Entertainment • Fines and penalties
• Income taxes • Limits on corporate overhead
After organizing costs into these three categories, determining “operating profit ratios” and overall revenue requirements is straightforward:
• The target is an 8% operating profit ratio on “allowable costs.” • Pass-through costs may be fully recovered through rates but no profit is allowed on these costs.
• No revenues are allowed for any excluded or limited costs.

In the case of SCSS, about 60% of their costs are subject to the 8% operating profit ratio; and 40% are pass-through costs that may be fully recovered from rates but no profit is allowed. No recovery is allowed for excluded costs. The overall operating profit ratio after allowable and pass-through costs is 5%.

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Preparing the Rate Request Application
Detailed “spreadsheet” templates for preparing the rate request application—including assembling the required information and making the needed calculations—are provided in the Rate Manual. SCSS has prepared their rate increase application in accordance with these requirements (Appendix A); and the financial information provided in the application for 2019 and 2020 ties to its audited financial statements.

Proposed Rate Summary
The following summarizes the calculations that support the requested and recommended rate increases:

Table 9. Proposed Rate Increase Summary
As reflected in this summary, all the rate-setting factors are the same for all four agencies are the same except for the franchise fee adjustment (which reflects that higher franchise fees will be required with the rate increase): 5% for the Oceano CSD and 10% for the other three agencies.

Implementation
The following summarizes key implementation concepts in the adopted rate-setting model:
• The “8%” operating profit ratio is a target; in the interest of rate stability, adjustments are only made if the calculated operating profit ratio falls outside of 10% to 6%. • On the other hand, if past ratios have been stronger than this target, then the revenue base is re-set in the Base Year review.

Oceano Others
Allowable Costs 10,751,371 10,751,371
Allowable Profit (8% Operating Ratio) 934,901 934,901
Pass-Through Costs
Disposal
Landfill 1,805,407 1,805,407
MRF (Recycling) 1,143,280 1,143,280
Greenwaste 1,781,655 1,781,655
Franchise Fees 1,454,123 1,454,123
Related Party Costs 438,303 438,303
Total Pass-Through Costs 6,622,768 6,622,768
Allowed Revenue Requirements 18,309,041 18,309,041
Revenue without Rate Increase 15,260,678 15,260,678
Revenue Requirement: Shortfall (Surplus) 3,048,363 3,048,363 Rate Base Revenue 18,309,041 18,309,041
Percent Change in Revenue Requirement 19.98% 19.98%
Allowed Revenue Increase * 21.03% 22.19%
* Adjusted for 5% franchise fee in Oceano and 10% in others

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• Special rate increases for extraordinary circumstances may be considered.

The result of this process is a proposed rate increase of 22.19% (21.03% in the Oceano CSD).

RATE DIFFERENCES BETWEEN COMMUNITIES
If costs for Arroyo Grande, Grover Beach, Oceano and Pismo Beach are so similar, why are the residential rates so different?
The short answer: history and different approaches to rate structure philosophies.

History
Until 1999, service levels under the Franchise Agreements with SCSS between these four agencies were significantly different. The rates in place at that time became the basis for subsequent rate reviews.

Rate Structure Principles
Most significantly, each agency has adopted different rate structure principles to recover similar costs. For example, Pismo Beach has adopted a rate structure for its residential customers that more closely reflects a “pay-as-you-throw” philosophy under which the “per gallon” costs for 32, 64 and 96 gallon containers are the same (for example, a 64-gallon container costs twice as much as a 32-gallon one.) This results in lower monthly costs for 32-gallon customers and relatively higher rates for 64 and 96-gallon customers.

On the other hand, Arroyo Grande has adopted rates that do not have as much difference between container sizes (but still offer an incentive for smaller containers over larger ones), recognizing collection economies of scale for larger versus smaller containers. In this case, 32- gallon containers in Arroyo Grande are more expensive than in Pismo Beach, but 64-gallon containers are less.

Both rate structures have their strong points: in the case of Pismo Beach, rates are more reflective of disposal costs, whereas in Arroyo Grande they are more reflective of collection costs. But the important point is that the revenue generating capability is the same even though the rates are different.

Multi-Family and Non-Residential Rates
Lastly, multi-family and non-residential rates (which account for about 40% of SCSS revenues) are similar in all four agencies: it is only in single family residential rates that there are significant differences between communities.

COST ACCOUNTING ISSUES
As noted above, SCSS’s financial operations for Arroyo Grande, Grover Beach, Oceano and Pismo Beach are closely related. Keeping costs and revenues segregated is further complicated

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by the fact that SCSS is a subsidiary of Waste Connections US (which acquired the parent company in April 2002), which shares ownership with the following local companies:
• San Luis Garbage Company
• Mission Country Disposal
• Morro Bay Garbage Service
• Coastal Roll-Off Service
• Cold Canyon Land Fill
• Cold Canyon Processing Facility
Additionally, within the South County, SCSS’s service area includes:
• City of Arroyo Grande
• City of Grover Beach
• City of Pismo Beach
• Oceano Community Services District
• Nipomo Community Services District
• Avila Beach Community Services District
• Other unincorporated areas in the South County such as rural Arroyo Grande Cost Accounting System
Audited financial statements are prepared for each company within Waste Connections’ central coast operations by an independent certified public accountant; and SCSS’s auditors have consistently issued “clean opinions” on its financial operations. However, only direct labor hours for collection (and related compensation), liability insurance, franchise fees and revenues are directly accounted for each company (like SCSS); and then within each agency serviced by it. As summarized below for major cost categories, all other costs are allocated between companies based on apportionments using generally accepted accounting principles:

Table 10. Cost Allocation Bases
Allocation Basis Major Cost Categories
Customer counts • Region and division overhead
• Office salaries
• Office expense
• Legal and accounting
Direct labor hours • Truck depreciation
• Truck repairs and tires
• Mechanic labor
• Gas and oil
Tonnage Disposal costs
• Landfill
• MRF/recycling
• Greenwaste

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Revenue • Corporate overhead (adjusted for Rate Manual limitations) • Bad debt expense
• Other taxes
Containers • Container depreciation
• Container labor
• Container repairs
Gallons • Diesel fuel
These allocation bases seem reasonable. However, they are subject to periodic change as determined by Waste Connections. Since these apportionments are a key basis for rate setting, the bases of allocation for each cost category (including allocations of regional and district overhead and accounting for direct costs) should be established in an updated Rate Manual.

COST OF LIVING “TRIGGER OPTION”
As noted above, Section 8.3 of the Franchise Agreements provides that if the rate increase request compared with the rate in effect at the date of the agreement exceeds the cumulative cost of living increase from that same date, each agency has the option of terminating the agreement at any time within nine months following approval of the requested rate increase. While this provision does not directly limit rate increase requests by SCSS to an amount that may be less than that allowed under the rate-setting methodology, subjecting the Franchise Agreement to possible termination if the rate request is greater than the cost of living threshold provides a strong incentive for SCSS to do so, if possible.

Calculation of the Cost of Living Threshold
As recommended in the 2013 Interim Year rate review for consistency and clarity, the CPI-U rate increases used in calculating Interim Year increases and the “trigger” threshold are based on changes from June to June (given application submittal targets, this was the most recent date that would consistently be available).

Along with the adjustment for the “weighted” greenwaste rate increase in 2012 of 1.7% previously approved, the 2016 Franchise Agreement amendments provided for adjustments to the threshold “trigger” of landfill rate increases, weighted by the ratio of landfill costs to total costs (assumed at 25% based on recent trends).
• Table 11(a) provides the threshold calculation compared with actual rate increases and those recommended for 2022.
• Table 11(b) provides landfill rates since 2008.

As reflected in Table 11(a), the cumulative changes in the cost of living (with adjustments for greenwaste and landfill cost increases) is 34.87%. This compares with cumulative rate increases, including those recommended of 22.19% for 2022 (21.03% for Oceano CSD) of 61.76%. This would result in exceeding the “trigger” by 26.89%.

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Table 11(a). Trigger Threshold Calculation
Table 11(b). Landfill Rates Per Ton
Increase
Prorated
@
Year Actual Amount Percent 25%
2008 29.25 - 0.00% 0.00%
2009 29.25 - 0.00% 0.00%
2010 29.25 - 0.00% 0.00%
2011 34.25 5.00 17.09% 4.27%
2012 34.25 - 0.00% 0.00%
2013 34.25 - 0.00% 0.00%
2014 36.50 2.25 6.57% 1.64%
2015 38.75 2.25 6.16% 1.54%
2016 41.00 2.25 5.81% 1.45%
2017 41.00 - 0.00% 0.00%
2018 41.00 - 0.00% 0.00%
2019 41.00 - 0.00% 0.00%
2020 41.00 - 0.00% 0.00%
2021 41.00 - 0.00% 0.00%
2022 41.00 - 0.00% 0.00%
Note: Under long-term rate increases approved by the County, Cold Canyon Landfill was eligible for annual rate increases of $2.25 per ton from 2017 to 2022, with a resulting rate of $54.50 by 2022, However, it chose not to do so.

Rate Rate
June Index Amount Percent Greenwaste Landfill (1) Threshold Year Increase (2) 2009 215.693
2010 217.965 2.272 1.05% 4.27% 5.33% 2011 0.00%
2011 225.722 7.757 3.56% 1.70% 0.00% 5.26% 2012 5.15%
2012 229.478 3.756 1.66% 0.00% 1.66% 2013 3.20%
2013 233.504 4.026 1.75% 1.64% 3.40% 2014 2.05%
2014 238.343 4.839 2.07% 1.54% 3.61% 2015 0.00%
2015 238.638 0.295 0.12% 1.45% 1.58% 2016 3.25%
2016 241.018 2.380 1.00% 0.00% 1.00% 2017 1.10%
2017 244.955 3.937 1.61% 0.00% 1.61% 2018 1.61%
2018 251.989 7.034 2.79% 0.00% 2.79% 2019 10.06%
2019 256.143 4.154 1.62% 0.00% 1.62% 2020 1.70%
2020 257.797 1.654 0.64% 0.00% 0.64% 2021 0.70%
2021 271.696 13.899 5.12% 0.00% 5.12% 2022 22.19%
Cumulative Total 56.003 25.96% 1.70% 8.91% 34.87% 61.76% Requested Rate Increase Above Trigger Threshold 26.89%

1. Landfill rate increases prorated at 25% of total costs

2. Recommended rate for 2022, except for Oceano (21.03%) US CPI-U Increase Allowed Adjustments

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However, it is important to note that this “trigger” calculation does not limit the allowable rate increase that may be requested under the methodology set forth in the Franchise Agreements or approved by the agencies.

Accordingly, if the proposed rate increases are approved, I recommend that the agencies consider (as they did in as part of the 2019 Base Year review) adopting findings that they will not pursue the “trigger” option.

Rate Manual Update. The merit of continuing with the “trigger option” is another area that should be considered with the Rate Manual update.

COORDINATION WITH OTHER AGENCIES
SCSS has submitted similar rate requests to the three other agencies that regulate rates and services in the other South County areas that it serves: County of San Luis Obispo, Avila Beach Community Services District and the Nipomo Community Services District. These agencies are likely to act on the requested rate increases within the same time frame as the four agencies covered in this report.

Waste Connections (as San Luis Garbage Company) has also submitted a rate increase application to the City of San Luis Obispo of 17.75%, which is scheduled for Council review on April 19, 2022. As Mission County Disposal, it has also submitted initial rate applications for Los Osos and the north coastal areas of about 40%.

SUMMARY
Based on the rate-setting policies and procedures formally adopted by Arroyo Grande, Grover Beach, Oceano and Pismo Beach in their Franchise Agreements, this report concludes that:
• SCSS has submitted the required documentation required under its Franchise Agreements with the four agencies.
• This results in a recommended rate increase of 22.19% in the cities of Arroyo Grande, Grover Beach and Pismo Beach; and 21.03% in the Oceano CSD.

ATTACHMENTS
Appendix A: Base Year Rate Request Application from South County Sanitary Service Appendix B: HZI Greenwaste Digester Cost Analysis

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Appendix A

BASE YEAR RATE REQUEST

APPLICATION

1. Base Year Application Summary
• City of Pismo Beach
• City of Arroyo Grande
• City of Grover Beach
• Oceano Community Services District

2. Supporting Schedules
• Financial Information: Cost and Revenue Requirements Summary • Revenue Offset Summary
• Cost Summary for Base Year
• Base Year Revenue Offset Summary
• Operating Information
• Rate Survey

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South County Sanitary Service
2022 Base Year Rate Adjustment Application
Summary CITY OF PISMO BEACH
Requested Increase
Digester Expense 6.2%
Capital Purchases 5.9% Market Rate Wage Adjustment 5.6% Commingle Processing Fee 1.9% Other 2.6%

1. Rate Increase Requested 22.19%
Rate Schedule
Current Increased Adjustment New
Rate Schedule Rate Rate (a) Rate
Single Family Residential

2. Economy Service (1 - can curb) $17.31 $3.84 $21.15

4. Standard Service (2- can curb) $34.63 $7.69 $42.32

5. Premium Service (3 - can curb) $51.94 $11.53 $63.47
(a) Calculated rates are rounded up to the nearest $0.01.

6. Multiunit Residential and Non-residential Rate increases of 22.19% will be applied to all rates in each structure
with each rate rounded to the nearest $0.01
Certification
To the best of my knowledge, the data and information in this application is complete, accurate, and consistent with the instructions provided by the Rate Setting Manual.

Name: Jeff Clarin Title: District Manager
Signature: Date: 10/20/21
Revised 2/18/22
Fiscal Year: 1-1-2022 to 12-31-2022 Pg. 1 of 6

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South County Sanitary Service
2022 Base Year Rate Adjustment Application
Summary CITY OF ARROYO GRANDE
Requested Increase
Digester Expense 6.2%
Capital Purchases 5.9% Market Rate Wage Adjustment 5.6% Commingle Processing Fee 1.9% Other 2.6%

1. Rate Increase Requested 22.19%
Rate Schedule
Current Increased Adjustment New
Rate Schedule Rate Rate (a) Rate
Single Family Residential

2. Economy Service (1 - can curb) 19.46 $ $4.32 $23.78

4. Standard Service (2- can curb) 25.29 $ $5.61 $30.90

5. Premium Service (3 - can curb) 31.13 $ $6.91 $38.04
(a) Calculated rates are rounded up to the nearest $0.01.

Name: Jeff Clarin Title: District Manager
Signature: Date: 10/20/21
Revised 2/18/22
Fiscal Year: 1-1-2022 to 12-31-2022 Pg. 1 of 6

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South County Sanitary Service
2022 Base Year Rate Adjustment Application
Summary CITY OF GROVER BEACH
Requested Increase
Digester Expense 6.2%
Capital Purchases 5.9% Market Rate Wage Adjustment 5.6% Commingle Processing Fee 1.9% Other 2.6%

1. Rate Increase Requested 22.19%
Rate Schedule
Current Increased Adjustment New
Rate Schedule Rate Rate (a) Rate
Single Family Residential

2. Economy Service (1 - can curb) 17.65 $ $3.92 $21.57

4. Standard Service (2- can curb) 23.85 $ $5.29 $29.14

5. Premium Service (3 - can curb) 30.03 $ $6.66 $36.69
(a) Calculated rates are rounded up to the nearest $0.01.

Name: Jeff Clarin Title: District Manager
Signature: Date: 10/20/21
Revised 2/18/22
Fiscal Year: 1-1-2022 to 12-31-2022 Pg. 1 of 6

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South County Sanitary Service
2022 Base Year Rate Adjustment Application
Summary OCEANO COMMUNITY SERVICE DISTRICT
Requested Increase
Digester Expense 6.2%
Capital Purchases 5.9% Market Rate Wage Adjustment 5.6% Commingle Processing Fee 1.9% Other 1.4%

1. Rate Increase Requested 21.03%
Rate Schedule
Current Increased Adjustment New
Rate Schedule Rate Rate (a) Rate
Single Family Residential

2. Economy Service (1 - can curb) 14.98 $ $3.15 $18.13

4. Standard Service (2- can curb) 21.56 $ $4.53 $26.09

5. Premium Service (3 - can curb) 42.19 $ $8.87 $51.06
(a) Calculated rates are rounded up to the nearest $0.01.

6. Multiunit Residential and Non-residential Rate increases of 21.03% will be applied to all rates in each structure
with each rate rounded to the nearest $0.01
Certification
To the best of my knowledge, the data and information in this application is complete, accurate, and consistent with the instructions provided by the Rate Setting Manual.

Name: Jeff Clarin Title: District Manager
Signature: Date: 10/20/21
Revised 2/18/22
Fiscal Year: 1-1-2022 to 12-31-2022 Pg. 1 of 6

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South County Sanitary Service
2022 Base Year Rate Adjustment Application
Current
Financial Information Base Year
2019 2020 2021 2022 2023
(from Pg. 4)

6. Direct Labor $3,258,214 $3,614,140 $3,638,218 $3,922,681 $4,040,361

7. Corporate Overhead $350,343 $356,299 $359,149 $378,184 $389,529

8. Office Salaries $688,788 $768,706 $758,312 $835,736 $859,332

9. Other General and Admin Costs $4,482,056 $4,990,560 $5,899,433 $5,614,771 $7,809,122 10 Total Allowable Costs $8,779,401 $9,729,705 $10,655,112 $10,751,372 $13,098,345

11. Operating Ratio 97.3% 98.2% 103.6% 92.0% 92.0%

12. Allowable Operating Profit $245,196 $179,075 ($366,502) $934,902 $1,138,986

13. Tipping Fees $2,754,458 $2,924,849 $3,012,594 $4,730,341 $2,978,173

14. Franchise Fees $1,482,198 $1,629,121 $1,652,070 $1,454,123 $1,497,747

15. AB939 Fees $0 $0 $0 $0 $0

16. Payments to Affiliated Companies* $281,020 $337,664 $377,981 $438,302 $477,779

17. Total Pass Through Costs $4,517,676 $4,891,634 $5,042,645 $6,622,767 $4,953,699 * Affiliate Payments include interest, lease payments, and transportation

18. Revenue Requirement $13,542,273 $14,800,414 $15,331,255 $18,309,041 $19,191,030

19. Total Revenue Offsets $13,542,273 $14,800,414 $15,331,255 $15,260,678 $15,413,625 (from Page 3)

20. Net Shortfall (Surplus) $3,048,363

21. Total Residential and Non-residential Revenue without increase Oceano Nipomo in Base Year (pg.5, line 76) $15,260,678 $15,260,678 $15,260,678

22. Percent Change in Residential and Non-residential Revenue Requirement 19.98% 19.98% 19.14%

23. Franchise Fee Adjustment Factor (1 - 6 percent) 90.000% 95.000% 90.000%

22.19% 21.03% 21.27%
Limitation due to cumlative increases

24. Percent Change in Existing Rates 22.19% 21.03% 21.27% Fiscal Year: 1-1-2022 to 12-31-2022 Pg. 2 of 6
Section III-Pass Through Costs
Historical Projected
Section I-Allowable Costs
Section II-Allowable Operating Profit
Section III-Pass Through Costs
Section III-Pass Through Costs

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South County Sanitary Service
2022 Base Year Rate Adjustment Application
Revenue Offset Summary
Current
Base Year
2019 2020 2021 2022 2023
Residential Revenue (without increase in Base Yr.)

28. Single Family Residential $7,924,043 $8,627,550 $8,780,617 $8,769,933 $8,857,632 Multiunit Residential Dumpster

29. Number of Accounts

30. Revenues

31. Less Allowance for Uncollectible Resi Accounts $0 $0 $0 $0 $0

32. Total Residential Revenue $7,924,043 $8,627,550 $8,780,617 $8,769,933 $8,857,632 Non-residential Revenue (without increase in Base Yr.)
Account Type
Non-residential Can

33. Number of Accounts 11 11 12

34. Revenues $5,513 $5,568 $5,624
Non-residential Wastewheeler

35. Number of Accounts 508 503 513

36. Revenues $544,220 $549,662 $555,159
Non-residential Dumpster

37. Number of Accounts 1,592 1,576 1,608

38. Revenues $5,613,237 $6,171,381 $5,983,795 $5,917,531 $5,976,706

39. Less: Allowance for Uncollectible Non-resid $0 $0 $0 $0 $0

40. Total Non-residential Revenue $5,613,237 $6,171,381 $6,533,528 $6,472,761 $6,537,488

45. Interest on Investments $0 $0 $0 $0 $0

46. Other Income $4,993 $1,483 $17,111 $17,984 $18,505

47. Total Revenue Offsets $13,542,273 $14,800,414 $15,331,255 $15,260,678 $15,413,625 Fiscal Year: 1-1-2022 to 12-31-2022 Pg. 3 of 6
Section VII - Revenue Offsets
Historical Projected

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South County Sanitary Service
2022 Base Year Rate Adjustment Application
Cost Summary for Base Year
Description of Cost BASE YEAR
2019 2020 2021 2022 2023
Labor $3,020,612 $3,353,557 $3,377,752 $3,642,382 $3,751,654 Payroll Taxes $237,602 $260,583 $260,466 $280,299 $288,708

48. Total Direct Labor $3,258,214 $3,614,140 $3,638,218 $3,922,681 $4,040,361

49. Corporate Overhead $370,263 $387,844 $460,472 $484,877 $499,423 Less limitation (enter as negative) ($19,920) ($31,545) ($101,323) ($106,693) ($109,894) Total Corporate Overhead $350,343 $356,299 $359,149 $378,184 $389,529 Office Salaries $642,368 $722,755 $701,402 $773,471 $795,199 Payroll Taxes - Office $46,420 $45,951 $56,910 $62,265 $64,133

50. Total Office Salaries $688,788 $768,706 $758,312 $835,736 $859,332 Bad Debt $12,541 $12,182 $15,064 $15,064 $15,064
Allocated expenses $0 $0 $0 $0 $0
Bonds expense $6,877 $5,221 $5,153 $5,426 $5,589
Depreciation $406,756 $535,997 $1,129,264 $1,534,705 $1,827,206 Drive Cam fees $21,242 $19,353 $20,599 $21,690 $22,341
Dues and Subscriptions $20,483 $5,793 $19,974 $21,033 $21,664 Facilities $59,584 $43,035 $29,218 $30,766 $31,689
Gas and oil $914,400 $821,425 $947,541 $952,847 $980,712 Insurance $860,855 $1,062,848 $1,225,897 $1,361,460 $1,402,304 Laundry (Uniforms) $33,527 $29,461 $29,837 $31,418 $32,361 Legal and Accounting $43,392 $46,291 $51,310 $53,890 $55,428 Miscellaneous and Other $7,943 $5,614 $5,144 $5,416 $5,579 Office Expense $211,414 $229,923 $254,048 $268,409 $276,461 Operating Supplies $59,319 $83,727 $73,903 $77,820 $80,155 Other Taxes $37,649 $40,287 $39,285 $41,236 $42,399
Outside Services $1,128,991 $1,244,791 $1,231,253 $328,750 $2,120,266 Public Relations and Promotion $5,119 $8,013 $7,639 $7,654 $7,663 Postage $21,635 $8,711 $12,894 $13,578 $13,985
Permits $60,344 $67,486 $92,393 $97,290 $100,208
Relocation $18,530 $30,701 $22,040 $22,040 $22,040
Rent $3,000 $2,250 $11,023 $12,497 $12,872
Telephone $13,294 $36,444 $36,121 $38,035 $39,176
Tires $100,399 $127,834 $144,039 $151,673 $156,223
Travel $27,991 $8,712 $12,431 $13,091 $13,483
Truck Repairs $389,414 $492,848 $464,015 $488,608 $503,266 Utilities $17,357 $21,613 $19,349 $20,375 $20,986

51. Total Other Gen/Admin Costs $4,482,056 $4,990,560 $5,899,433 $5,614,771 $7,809,122

52. Total Tipping Fees $2,754,458 $2,924,849 $3,012,594 $4,730,341 $2,978,173

53. Total Franchise Fee $1,629,121 $1,652,070 $1,454,123 1,497,747.16 1,482,198.00

54. Total AB 939/Regulatory Fees $0 $0 $0 $0 $0

55. Total Lease Pmt to Affil Co.'s $142,332 $170,111 $172,663 $181,814 $187,268 55a. Interest Expense (to affiliate) $87,922 $133,282 $162,043 $213,214 $247,236 55b. Total Transportation to Affil Co.'s $50,766 $34,271 $43,275 $43,275 $43,275

56. Total Cost $13,297,077 $14,621,339 $15,697,757 $17,374,139 $18,052,043 Fiscal Year: 1-1-2022 to 12-31-2022 Pg. 4 of 6

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South County Sanitary Service
2022 Base Year Rate Adjustment Application
Base Year Revenue Offset Summary For Information Purposes Only Description of Revenue Overall Franchise Refuse Collection Non-franchise Total Total Arroyo Pismo Grover Unincorporated Total
Residential Revenue
(without increase in Base Year)

57. Single Family Residential $8,769,933 $8,769,933 $1,826,861 $1,185,972 $1,173,008 $4,584,092 Multiunit Residential Dumpster

58. Number of Accounts 0 0

59. Revenues $0 $0

60. Less Allowance for Uncollectable $0 $0

61. Total Residential Revenue $8,769,933 $8,769,933 $1,826,861 $1,185,972 $1,173,008 $4,584,092 $0 Non-residential Revenue (without increase in Base Year) Account Type

0.34% 0.35% 33.05% 15.36% 0.00% 0.00%
Non-residential Can

62. Number of Accounts 11 11 5 1 4 2

63. Revenues $5,568 $5,568 $1,416 $280 $1,033 $2,840
Non-residential Wastewheeler 3.4% 0.0%

64. Number of Accounts 503 503 139 136 98 131

65. Revenues $549,662 $549,662 149,429 195,948 84,569 119,716 Non-residential Dumpster 96% 17% 38% 3%

66. Number of Accounts 1,576 1576 402 229 321 625 0

67. Revenues $5,917,531 $5,917,531 $1,577,642 $1,333,364 $828,238 $2,178,286

68. Less: Allowance for Uncollectible
Non-residential Accounts $0 $0

69. Total Non-residential Revenue $6,472,761 $6,472,761 $1,728,486 $1,529,592 $913,840 $2,300,842 $0

74. Interest on Investments $0 $0 $0 $0 $0 $0 $0

75. Other Income $17,984 $0 $0 $0 $0 $0 $17,984

76. Total Revenue Offsets $15,260,678 $15,242,694 $3,555,347 $2,715,564 $2,086,848 $6,884,935 $17,984 Fiscal Year: 1-1-2022 to 12-31-2022 Pg. 5 of 6
Section VII-Revenue Offsets

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South County Sanitary Service
2022 Base Year Rate Adjustment Application
Operating Information
Percent Percent Percent Base Year Percent
2019 Change 2020 Change 2021 Change 2022 Change 2023
Residential
Accounts

77. Arroyo Grande 5,827 1.1% 5,890 0.6% 5,924 1.0% 5,983 1.0% 6,043 Grover Beach 4,216 0.4% 4,233 0.4% 4,249 1.0% 4,291 1.0% 4,334 Pismo Beach 3,816 0.1% 3,819 0.2% 3,828 1.0% 3,866 1.0% 3,905 Oceano CSD 1,863 0.4% 1,870 1.6% 1,899 1.0% 1,918 1.0% 1,937 Nipomo CSD 4,066 0.8% 4,097 0.9% 4,135 1.0% 4,176 1.0% 4,218 County 6,881 2.2% 7,034 1.4% 7,130 1.0% 7,201 1.0% 7,273 26,669 1.0% 26,943 0.8% 27,165 1.0% 27,437 1.0% 27,711

78. Routes-Garbage 7 26.5% 9 -13.9% 8 0.0% 8 0.0% 8

79. Routes-Recycling 6 26.5% 8 -13.9% 7 0.0% 7 0.0% 7

80. Direct Labor Hours 28,522 26.5% 36,082 -13.9% 31,059 0.0% 31,059 0.0% 31,059 Non-residential Garbage
Accounts

80. Arroyo Grande 490 0.2% 491 0.6% 494 1.0% 499 1.0% 504 Grover Beach 438 0.7% 441 0.5% 443 1.0% 447 1.0% 452
Pismo Beach 386 1.8% 393 -0.5% 391 1.0% 395 1.0% 399
Oceano CSD 190 0.5% 191 0.5% 192 1.0% 194 1.0% 196
Nipomo CSD 214 -2.3% 209 0.0% 209 1.0% 211 1.0% 213
County 508 -5.9% 478 2.5% 490 1.0% 495 1.0% 500
2,226 -1.0% 2,203 0.7% 2,219 1.0% 2,241 1.0% 2,264

81. Routes-garbage 8 26.5% 10 -13.9% 8 0.0% 8 0.0% 8
Routes-recycling 3 26.5% 4 -13.9% 4 0.0% 4 0.0% 4

82. Direct Labor Hours 22,871 26.5% 28,933 -13.9% 24,905 0.0% 24,905 0.0% 24,905 Recyclable Materials - All areas-Commingled Recycling (in tons) Accounts

83. Tons Collected 13,275 -4.0% 12,740 3.0% 13,123 3.0% 13,516 1.0% 13,651 Recyclable Materials - All areas-Greenwaste Recycling
Routes 5 26.5% 7 -13.9% 6 0.0% 6 0.0% 6
Tons Collected 13,631 -0.9% 13,511 3.0% 13,916 3.0% 14,334 1.0% 14,477 Direct Labor Hours 10,934 26.5% 13,833 -13.9% 11,907 0.0% 11,907 0.0% 11,907 Garbage Tons Collected 43,020 -3.5% 41,507 3.0% 42,752 3.0% 44,034 1.0% 44,475 Fiscal Year: 1-1-2022 to 12-31-2022 Pg. 6 of 6
Historical Current Projected
Section IX-Operating Data

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Rate Comparisons for Garbage Service
Service Size
Pismo
Beach 1
South County
Urban 1
Arroyo
Grande 1 Atascadero Templeton San Miguel
Paso
Robles2
City of Santa
Maria 3,4
Santa Barbara
County (Northern)4 City of Santa Barbara
20 Gallon
35 Gallon $ 17.31 $ 25.60 $ 19.46 $ 28.55 $ 31.40 $ 28.33 $ 30.90 $ 25.84 $ 45.30 65 Gallon $ 34.63 $ 34.04 $ 25.29 $ 44.50 $ 45.01 $ 44.48 $ 51.12 30.69 $ 27.89 $ 56.15 95 Gallon $ 51.94 $ 47.46 $ 31.13 $ 55.77 $ 45.95 $ 61.06 $ 57.25 34.81 $ 29.86 $ 67.00 2 yard (1X WK) $ 120.91 $ 129.25 $ 122.10 $ 146.79 $ 129.54 $ 103.98 $ 168.68 166.72 $ 167.72 $ 248.79 Notes:
1 Scheduled increases in 1/1/2022
2 Paso Robles does 40 gallon cart pricing
3 65 gallon Scheduled to increase to $32.70 in 1/1/22 and $34.71 in 7/1/22, and 95 gallon Scheduled to increase to $38.07 in 1/1/22 and $41.34 in 7/1/22 4 Weekly Trash pick-up but every other week recycling and green waste pick-up.

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HZI Cost Increase Summary Appendix B
Original
Cost Category Plan 2021 2022 Amount % Comment
Staffing and Administrative Cost
$ 1,592 1,090 $ 1,706 $ 616 $ 57%
Staff operation requirements increased from 3 to 6 team members due to feedstock profile, increased maintenance, equipment change out and operational demands. Additionally salary increases have been necessary to meet CA labor market demands. Administratively pollution insurance was added and audit and legal fees were increased to meet reporting requirements.

O&M Expense
$ 1,747 495 $ 1,439 $ 944 $ 191%
Increased cost due to CHP maintenance increases related to gas cycling, dosing feeder erosion, screw feeder premature erosion, shredder blade erosion and damage due to contamination, digestate pump rebuild frequency due to sand, premature wear and replacement of the decanter, and continued vacuum truck clean out of the sand build-up. Added +250K/year for management of backend products and front end peak loading; Capital Expense
$ 1,945 1,487 $ 1,946 $ 459 $ 31%
Added Capital cost includes Feed Bunker Wall extension, Speed Screen, Fat, Oils, and Grease system, and redundant pumps related to decreased food waste and sand issues in the CA environment Total Cost 3,072 $ 5,284 $ 5,091 $ 2,019 $ -
Total Service Fee $ 1,779 1,749 $ 3,861 $ 2,082 $ 119%
Increase requested equates closely to cost increase seen since original plan of monthly service fees Change $ (3,505) (1,323) $ (1,230) $ 63 $
Variance

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ITEM 9.a.:

Attachment 3 – April 12, 2022 Staff Report and Attachments Attachment 3 is available as a link:
https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2021 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2022 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2023 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2024 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2025 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2026

Page 186 of 696 ends

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4388 Old Santa Fe Road
San Luis Obispo, CA 93401
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NICOLE GRANTOr Current Resident807 Meadowlark DrArroyo Grande, CA 93420-1303TAATTAAFAADADFDFADDDTTFFAADTTDDFDDFFDDFAATTTTDAATAFDDFFDFATFTFADT 1 ATTACHMENT 4

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This notice is intended to inform you that the City of Arroyo Grande (the “City”) will hold a public hearing regarding rate increases (the “Proposed Rate Increase”) proposed by South County Sanitary Service (the “Garbage Company”) for properties and customers receiving solid waste, recycling, and green waste services within the City. The Proposed Rate Increase will be considered by the Council at the date, time, and location specified below. Consistent with the requirements of Proposition 218, this notice also provides you with the following information:
• The Date, Time, and Place of the Public Hearing;
• The Reason for the Proposed Rate Increase; and
• The Basis for the Proposed Rate Increase; and
• The Majority Protest Procedures.

June 14, 2022 6:00 pm
Arroyo Grande City Council Chambers, 215 East Branch St. Arroyo Grande, CA The Proposed Rate Increase is 22.19 percent for solid waste, recycling, and green waste/organics collection services. In addition, there will be a temporary 5.12 percent increase to recover revenue lost due to this rate increase being delayed from May 1, 2022 to June 15, 2022. This recovery component will expire January 1, 2023. The increase is necessary for the Garbage Company to continue to provide safe, environmentally sound, and reliable solid waste, recycling, green waste/organics collection, transportation and disposal/processing services to the citizens of the City. Several factors contributed to this rate increase including, but not limited to: increased costs associated with the purchase and operation of collection vehicles, fuel costs, labor costs, and increased costs associated with the organics digester facility.

The organics digester facility is required by California Senate Bill 1383 (SB 1383), and previously approved California Assembly Bill 1826 (AB 1826). SB 1383 is a recent state law passed with the goal of reducing methane. Methane is a potent greenhouse gas, with more than 80 times the warming power of carbon dioxide, and is a major component of decomposing organic waste. In response to the harmful effects of methane gas, Cal Recycle (a branch of the California Environmental Protection Agency) adopted regulations implementing SB 1383 in the fall of 2020. Key components of SB 1383 include implementing organic waste collection programs (including food waste), monitoring organics carts for contamination, and reporting data.

ATTACHMENT 5

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AB 1826 requires local jurisdictions to develop a program to divert organic waste from landfills to an authorized composting facility like an anaerobic digester.

The Proposed Rate Increase of 22.19 percent is based on the following cost increases incurred by the Garbage Company:

1. 5.88 percent of the Proposed Rate Increase is for capital investment costs of new collection vehicles, replacement containers and additional containers to meet the demands of SB 1383 compliance.

2. 6.20 percent of the Proposed Rate Increase is for increased capital equipment investments and escalating operating expenses related to the Anaerobic Digester.

3. 5.63 percent of the Proposed Rate Increase is for market wage adjustments to attract and retain safe, quality employees.

4. 1.88 percent of the Proposed Rate Increase is for increases the commingle processing fee

5. 2.60 percent of the Proposed Rate Increase is for increases in other operational expenses The additional temporary 5.12 percent recovery rate increase is for the delayed rate implementation that was no fault of the Garbage Company. The total rate increase implemented June 15, 2022 will be

27.32 percent. The temporary 5.12 percent recovery rate increase will expire January 1, 2023, net of any Consumer Price Index adjustment as discussed next.

In addition, commencing on January 1, 2023 and January 1, 2024, rates shall be increased based on the following:

1. Increases, if any, in the Consumer Price Index (CPI) for Bureau of Labor Statistics’ Consumer Price Index for Urban Consumers based on the All U.S. City Average, Bureau of Labor Statistics for the month of June 2022 for January 1, 2023 and June 2023 for January 1, 2024.

The January 1, 2023 CPI rate adjustment will be applied after the 5.12 percent recovery rate increase is removed.

At the March 9, 2022 San Luis Obispo County Integrated Waste Management Authority (IWMA) Board Meeting, a 5.4% solid waste management fee was adopted to account for operational and capital cost increases due largely to tasks associated with the implementation of SB 1383. These include the following tasks that will be delegated by the City to the IWMA: education and outreach monitoring, inspection, and record keeping programs; establishing, administering, and implementing the edible food recovery requirements; monitoring and education, including, but not limited to, monitoring compliance through route reviews and evaluations, determining the applicability of waivers, and issuing educational notices where necessary and/or appropriate; and required reporting to CalRecycle. The adopted fee will be effective on July 1, 2022. The City has authorized the Garbage Company to bill this additional fee on behalf of the IWMA.

The IWMA is a Joint Powers Authority formed to plan and implement regional solid waste and hazardous waste programs mandated by State law. The Joint Powers Agreement between the City of Arroyo Grande and the IWMA can be made available by the City upon request or on the IWMA website at www.iwma.com.

A copy of the 2022 Base Year Rate Adjustment Application, which provides additional information on the proposed rate increases, is available at the City Clerk’s office located at 300 East Branch St., Arroyo Grande, California.

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Pursuant to Section 6 of Article XIII D of the California Constitution, the following persons may submit a written protest against the Proposed Rate Increase to the City Clerk before the close of the Public Hearing referenced above.
▪ An owner(s) of property (parcel(s)) receiving solid waste, recycling, and green waste services within the City limits. If the person(s) signing the protest, as an owner, is not shown on the last equalized assessment roll as the owner of the parcel(s) then the protest must contain or be accompanied by written evidence that such person signing the protest is the owner of the parcel(s) receiving services;
or
▪ A tenant(s) whose name appears on the Garbage Company’s records as the customer of record for the corresponding parcel receiving solid waste, recycling, and green waste services within the City limits (tenant-customer).

A valid written protest must contain a statement that you protest the Proposed Rate Increase, the address or Assessor’s Parcel Number (APN) of the parcel or parcels which receive solid waste, recycling, and green waste services, and a signature by either the owner or the tenant-customer of the parcel or parcels. One written protest per parcel shall be counted in calculating a majority protest to the Proposed Rate Increase subject to the requirements of Section 6 of Article XIII D of the California Constitution. Written protests will not be accepted by e-mail or by facsimile. Verbal protests will not be counted in determining the existence of a majority protest. To be counted, a protest must be received in writing by the City Clerk before the close of the Public Hearing referenced above.

Written protests regarding the solid waste rate increase may be mailed to:

Written protests may also be personally delivered to the City Clerk located at 300 East Branch Street, Arroyo Grande, California.

If valid written protests are presented by a majority of owners and/or tenants-customers of parcels receiving solid waste, recycling, and green waste services within the City limits, then the City will not adjust/increase the rates for the services.

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SOUTH COUNTY SANITARY SERVICE
RATE INCREASE EFFECTIVE JUNE 15, 2022

CITY OF ARROYO GRANDE
Service Description
Pickups Per
Week
Current
Monthly Rate
Effective
1/1/2021
Proposed Rate
Adjustment
Proposed
Monthly Rate
Effective
6/15/2022

APARTMENTS, TRIPLEX, DUPLEX
Rates are the same as commercial rates (below).

COMMERCIAL DUMPSTERS - ALL AREAS:
1 yd dumpster 1 $96.13 $26.26 $122.39
1 yd dumpster 2 $140.24 $38.31 $178.55
1 yd dumpster 3 $184.40 $50.37 $234.77
1 yd dumpster 4 $236.32 $64.55 $300.87
1 yd dumpster 5 $277.84 $75.89 $353.73
1 yd dumpster 6 $329.80 $90.09 $419.89
1 yd dumpster 7 $400.86 $109.50 $510.36

1.5 yd dumpster 1 $109.10 $29.80 $138.90

1.5 yd dumpster 2 $168.81 $46.11 $214.92

1.5 yd dumpster 3 $238.96 $65.27 $304.23

1.5 yd dumpster 4 $311.63 $85.12 $396.75

1.5 yd dumpster 5 $379.18 $103.58 $482.76

1.5 yd dumpster 6 $428.52 $117.05 $545.57

1.5 yd dumpster 7 $501.77 $137.06 $638.83
2 yd dumpster 1 $122.10 $33.35 $155.45
2 yd dumpster 2 $205.17 $56.04 $261.21
2 yd dumpster 3 $290.89 $79.46 $370.35
2 yd dumpster 4 $384.34 $104.99 $489.33
2 yd dumpster 5 $475.25 $129.82 $605.07
2 yd dumpster 6 $532.40 $145.43 $677.83
2 yd dumpster 7 $619.02 $169.09 $788.11
3 yd dumpster 1 $145.41 $39.72 $185.13
3 yd dumpster 2 $275.28 $75.19 $350.47
3 yd dumpster 3 $384.34 $104.99 $489.33
3 yd dumpster 4 $501.19 $136.90 $638.09
3 yd dumpster 5 $594.70 $162.45 $757.15
3 yd dumpster 6 $708.98 $193.66 $902.64
3 yd dumpster 7 $905.52 $247.35 $1,152.87

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Service Description
Pickups Per
Week
Current
Monthly Rate
Effective
1/1/2021
Proposed Rate
Adjustment
Proposed
Monthly Rate
Effective
6/15/2022
4 yd dumpster 1 $181.81 $49.66 $231.47
4 yd dumpster 2 $322.02 $87.96 $409.98
4 yd dumpster 3 $462.25 $126.27 $588.52
4 yd dumpster 4 $594.70 $162.45 $757.15
4 yd dumpster 5 $734.95 $200.76 $935.71
4 yd dumpster 6 $872.60 $238.36 $1,110.96
4 yd dumpster 7 $1,111.28 $303.55 $1,414.83
6 yd dumpster 1 $272.72 $74.50 $347.22
6 yd dumpster 2 $483.05 $131.95 $615.00
6 yd dumpster 3 $693.36 $189.40 $882.76
6 yd dumpster 4 $892.08 $243.68 $1,135.76
6 yd dumpster 5 $1,102.41 $301.13 $1,403.54
6 yd dumpster 6 $1,308.92 $357.54 $1,666.46
6 yd dumpster 7 $1,666.92 $455.33 $2,122.25
8 yd dumpster 1 $363.61 $99.32 $462.93
8 yd dumpster 2 $644.05 $175.93 $819.98
8 yd dumpster 3 $924.49 $252.53 $1,177.02
8 yd dumpster 4 $1,189.43 $324.90 $1,514.33
8 yd dumpster 5 $1,469.91 $401.52 $1,871.43
8 yd dumpster 6 $1,745.22 $476.72 $2,221.94
8 yd dumpster 7 $2,222.57 $607.11 $2,829.68
The rates shown above include the monthly container rental fee and a semi-annual dumpster cleaning.

COMMERCIAL GARBAGE CANS - ALL AREAS:
32 Gallon Waste Wheeler 1 $23.37 $6.38 $29.75
32 Gallon Waste Wheeler 2 $49.34 $13.48 $62.82
32 Gallon Waste Wheeler 3 $57.15 $15.61 $72.76
32 Gallon Waste Wheeler 4 $72.69 $19.86 $92.55
64 Gallon Waste Wheeler 1 $49.34 $13.48 $62.82
64 Gallon Waste Wheeler 2 $65.57 $17.91 $83.48
64 Gallon Waste Wheeler 7 $195.92 $53.52 $249.44
96 Gallon Waste Wheeler 1 $57.15 $15.61 $72.76
96 Gallon Waste Wheeler 2 $96.13 $26.26 $122.39
96 Gallon Waste Wheeler 3 $121.02 $33.06 $154.08
96 Gallon Waste Wheeler 4 $146.21 $39.94 $186.15
96 Gallon Waste Wheeler 5 $164.63 $44.97 $209.60
96 Gallon Waste Wheeler 7 $224.61 $61.35 $285.96

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Service Description
Pickups Per
Week
Current
Monthly Rate
Effective
1/1/2021
Proposed Rate
Adjustment
Proposed
Monthly Rate
Effective
6/15/2022
COMMERCIAL - OTHER CHARGES:

Rates for all commercial customers include recycling or greenwaste/organics pickup once per week, included with the garbage service rate. Customers can choose from a 64 or 96 gallon blue commingled recycle waste wheeler or a 32 or 64 gallon organics waste wheeler included with the garbage service rate (96 gallon waste wheelers can only be used with green waste due to weight). If you need a bin for recycling there is a charge (see below).

If you need more frequent recycling, including organics/greenwaste service, it can be provided at a 50% discount from the garbage service rates for the specified level of service required.

MISCELLANEOUS CHARGES - ALL CUSTOMERS:

Overstacked Garbage & extra
bags Minimum/unit each $5.51 $1.51 $7.02
Overstacked Greenwaste &
extra bags Minimum/unit each $2.77 $0.76 $3.53
Overstacked Blue Bin & extra
bags Minimum/unit each $2.91 $0.79 $3.70
Xtra Recycle 32, 64, or 96
waste wheelers per month $1.55 $0.42 $1.97
In yard service (per can or
commodity) IN ADDITION TO

STANDARD GARBAGE
RATES per month $13.76 $3.76 $17.52
Monthly charge for additional
96-gallon green waste service per month $3.80 $1.04 $4.84 Extended Vacation Service per month $12.82 $3.50 $16.32 Vacant Rate per month $15.79 $4.31 $20.10
Waste wheeler cleaning each time $20.52 $5.61 $26.13
Trip charge each time $13.76 $3.76 $17.52
Non-payment downsize
service each time $13.76 $3.76 $17.52
Non-payment redeliver waste
wheeler each time $13.76 $3.76 $17.52
Non-payment reconnect
service each time $33.07 $9.03 $42.10
Small item pickup (TV, toilet) each $32.27 $8.81 $41.08 Appliance pickup-residential each $45.51 $12.43 $57.94
Lock Charge $7.66 $2.09 $9.75
Garbage extras on your
scheduled pickup day per yard $11.62 $3.17 $14.79
Garbage extras -NOT ON

YOUR SCHEDULED
PICKUP DAY per yard $31.25 $8.54 $39.79
Commercial Waste Wheeler
rent per month $4.26 $1.16 $5.42

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Service Description
Pickups Per
Week
Current
Monthly Rate
Effective
1/1/2021
Proposed Rate
Adjustment
Proposed
Monthly Rate
Effective
6/15/2022
Re-deliver bin on stopped
acct each time $39.44 $10.77 $50.21
Large Compactor (> 4 yards) per yard $16.90 $4.62 $21.52 Small Compactors (4 yards &
below)
assume 3 to 1
compaction
3 times the
garbage rate
Sunday Service (in additional
to garbage service level) per month $68.87 $18.81 $87.68 Recycle bin rental per month $7.66 $2.09 $9.75
Stand by time per hour $66.28 $18.10 $84.38
Extra bin cleaning $61.55 $16.81 $78.36
Larger than residential
appliance by quote only
Damage/Destruction of bins
or waste wheelers by quote only
Short Term Dumpsters:

Delivery & Pickup-Bin $39.46 $10.78 $50.24
Delivery & Pickup-Waste
Wheeler $13.76 $3.76 $17.52
Rental Per Day $2.92 $0.80 $3.72
Empties Per Yard $31.25 $8.54 $39.79
Mattress:

Twin Each $17.91 $4.89 $22.80
Double Each $17.91 $4.89 $22.80
Queen Each $17.91 $4.89 $22.80
King Each $17.91 $4.89 $22.80
ADDITIONAL INFORMATION ALL CUSTOMERS:

1. Customers requesting Temporary Bins or Roll-off Box Service can call the office for current rates

2. Polystyrene (Styrofoam, Plastic #6) is not collected for recycling and should be thrown away as trash.

Please bag Styrofoam packing peanuts before placing in trash container.

3. It is encouraged to bag your trash in the garbage container but do not bag your recyclables or green waste in their respective containers and keep it loose.

4. Recycling, Greenwaste/Organics and Garbage containers should spaced 3 feet apart away from any obstacles (i.e mailboxes, cars, etc) before 6:00am on collection service day.

5. The fee schedule above only includes the Garbage Company rates and does not include IWMA fees, which are separately noted on the billings.

6. Late Fees are imposed for residential customers over 30 days delinquent. The fee is 1.5% per month of the outstanding charge, with a minimum fee of $5.00. No prior notice is required, as this late fee policy is stated at the bottom of every bill.

7. Customers can be responsible for contamination fees
Any additional recycling, including greenwaste/organic services are charged out at 50% of the garbage rate.

Page 195 of 696 ends

The Garbage Company
4388 Old Santa Fe Road
San Luis Obispo, CA 93401
Standard
US Postage
PAID
Santa Barbara, CA
Permit No. 800

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ATTACHMENT 6

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MEMORANDUM
TO: City Council
FROM: Jessica Matson, Legislative & Information Services Director/City Clerk SUBJECT: Supplemental Information
Agenda Item 9.a. – Public Hearing to Consider Adoption of a Resolution Establishing Solid Waste Rates
DATE: June 14, 2022
Attached is correspondence received before 4 p.m. for the above referenced item. cc: City Manager
Assistant City Manager/Public Works Director
Administrative Services Director
City Attorney
City Clerk
City Website (or public review binder)

Page 209 of 696 ends

From: Trudy Ng
To: Jessica Matson
Cc: Trudy Ng
Subject: Hearing this evening
Date: Tuesday, June 14, 2022 11:15:09 AM
Dear Ms. Jessica Matson,
I like to submit my opinion in reducing the increase of using our waste/refuse, recycle products and green recycle ( grass clippings, shrub trimming etc. ) Instead of collecting weekly on Blue Bin and Green bin perhaps on residential area we could do with Biweekly eg. On Odd week only . This will reduce manpower since we have a shortage of it, and save the equipment , truck wear and tear.I had spoken with most of my neighbors in the street , we are in agreement especially in the green bin, on the winter time grass and trimming are not done .

I am sorry for not being able to attend today's meeting.

Thank you for your consideration.

Best Regards,
Trudy N.

Arroyo Grande.

Cell #

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Item 9.b.

MEMORANDUM
TO: City Council
FROM: Bill Robeson, Assistant City Manager/Public Works Director SUBJECT: Consideration of Adoption of Resolutions Directing the Levy of the Annual Assessments for the Parkside Village and Grace Lane Assessment Districts and Landscaping and Lighting Assessment District No. 1, Within Tract 1769, for Fiscal Year 2022-2023 DATE: June 14, 2022
SUMMARY OF ACTION:

Adoption of the associated Resolutions will direct the levy and collection of assessment fees for maintenance and landscaping for the Parkside Village and Grace Lane Assessment Districts and the Landscaping District No. 1 within Tract 1769. No changes to the assessment amounts are proposed nor are any new improvements or substantial changes in existing improvements proposed for Fiscal Year 2022-23.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

By adopting the Resolutions, $56,298 will be collected for Fiscal Year 2022-23 for the three assessment districts to provide landscaping and other specified maintenance. The assessments are placed on the affected property owner’s property tax bill each year.

RECOMMENDATION:
1) Conduct a public hearing for the levy and collection of assessments for the Parkside Village Assessment District, Grace Lane Assessment District, and Landscaping and Lighting Assessment District No. 1 within Tract 1769;
2) Adopt a Resolution directing the levy of the annual assessment for the Parkside Village Assessment District pursuant to the Landscaping and Lighting Act of 1972 (Streets and Highways Code Sections 22500 et. seq.) for Fiscal Year 2022-2023; 3) Adopt a Resolution directing the levy of the annual assessment for the Grace Lane Assessment District pursuant to the Landscaping and Lighting Act of 1972 (Streets and Highways Code Sections 22500 et. seq.) for Fiscal Year 2022-2023; and 4) Adopt a Resolution directing the levy of the annual assessment for the Landscaping and Lighting Assessment District No. 1 within Tract 1769, pursuant to the Landscaping and Lighting Act of 1972 (Streets and Highways Code Sections 22500 et. seq.) for Fiscal Year 2022-2023.

Page 211 of 696 ends

Item 9.b.

City Council
Consideration of Adoption of Resolutions Directing the Levy of the Annual Assessments for the Parkside Village and Grace Lane Assessment Districts and Landscaping and Lighting Assessment District No. 1, Within Tract 1769, for Fiscal Year 2022-2023
June 14, 2022

Page 2 ends

BACKGROUND:

At the May 10, 2022 City Council meeting, Council approved the Engineer’s Reports and adopted Resolution Nos. 5182, 5183, and 5184 declaring its intention to levy and collect assessments for the Parkside Village Assessment District, Grace Lane Assessment District, and Landscaping and Lighting Assessment District No. 1 within Tract No. 1769, and setting a public hearing for June 14, 2022, at 6:00 P.M.  For the Parkside Village Assessment District, the proposed annual assessments are $446 or $734 per parcel for a total of $43,966 annually.  For the Grace Lane Assessment District, the proposed annual assessments are $460 for 19 parcels and $148 for 4 parcels ($8,740 + $592) for an annual total of $9,332.
 For the Landscaping and Lighting Assessment District No. 1, within Tract 1769, the total proposed annual assessment is $100 per parcel for an annual total of $3,000.

ANALYSIS OF ISSUES:

The California Streets and Highways Code Sections 22500 et seq., (California Landscape and Lighting Act of 1972) (Act), establishes one of the processes by which local governmental agencies form assessment districts for the purpose of financing the costs and expenses of landscaping and lighting public areas. The final process includes a public hearing, which affords all interested parties the opportunity to hear and be heard. At the conclusion of the public hearing, the City Council may adopt Resolutions (Attachments 1, 2, and 3) confirming the assessments, which constitute the levy of the assessments for the 2022-23 fiscal year. Upon fulfillment of these requirements, the City must submit the Resolutions to the County of San Luis Obispo for inclusion of the assessments on the Fiscal Year 2022-23 property tax roll. The fees collected for each assessment district fund items such as monthly landscape maintenance, annual fire suppression/fuel reduction, savings for anticipated drainage structure maintenance /improvements, and general landscaping cleanup projects, as needed. Section 4 of each associated Engineer’s Report provides a description of improvements (Attachment 4).

ALTERNATIVES:

The following alternatives are provided for the Council’s consideration:

1. Adopt Resolutions approving the levy to collect the annual assessments for the Parkside Village Assessment District, Grace Lane Assessment District and Landscaping and Lighting Assessment District No. 1 within Tract 1769 for Fiscal Year 2022-23; or

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Item 9.b.

Page 3 ends

2. Modify and adopt the Resolutions; or

3. Provide staff other direction.

ADVANTAGES:

Adoption of the Resolutions will be in compliance with the Act and allow the City to move forward with the process to collect assessments and perform the work identified in the Engineer’s Report for each assessment district.

DISADVANTAGES:

No disadvantages for the proposed actions have been identified for this fiscal year.

ENVIRONMENTAL REVIEW:

No environmental review is required for this item.

PUBLIC NOTIFICATION AND COMMENTS:

The Resolutions adopted by the City Council on June 14, 2022, declaring its intention to levy and collect annual assessments for all three (3) Assessment Districts in Fiscal Year 2022-23 were published in The Tribune on Friday, June 3, 2022. The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2.

Attachments:

1. Proposed Resolution – Parkside Village

2. Proposed Resolution – Grace Lane

3. Proposed Resolution – District 1, Tract 1769

4. May 10, 2022 Staff Report and Attachments

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ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF ARROYO GRANDE DIRECTING THE LEVY OF THE

ANNUAL ASSESSMENTS RELATED TO THE PARKSIDE

VILLAGE ASSESSMENT DISTRICT PURSUANT TO THE
LANDSCAPING AND LIGHTING ACT OF 1972 (STREETS
AND HIGHWAYS CODE SECTIONS 22500 ET. SEQ.) FOR
FISCAL YEAR 2022-2023
WHEREAS, on November 8, 2005, the City Council of the City of Arroyo Grande adopted Resolution No. 3888 ordering the formation of the Parkside Village Assessment District under Part 2 of Division 15 of the California Streets and Highways Code 22500- 22679 (Landscape and Lighting Act of 1972), which allows local governmental agencies to form assessment districts for the purpose of financing the costs and expenses of landscaping and lighting public areas; and
WHEREAS, the City Council, at its meeting of May 10, 2022, approved Resolution No. 5182 approving the Engineer’s Report and declaring its intention to levy and collect annual assessments for the Parkside Village Assessment District for Fiscal Year 2022- 2023 and set a public hearing for June 14, 2022 for the Parkside Village Assessment District; and
WHEREAS, a public hearing to levy the annual assessment of the Parkside Village Assessment District was held June 14, 2022 at the City Council Chambers, 215 E.

Branch Street, Arroyo Grande, California, 93420 and the City Council took public testimony from all interested persons as to the levy of the annual assessment for the Parkside Village Assessment District; and
WHEREAS, pursuant to Streets and Highways Code Section 22130, the City Council is authorized to levy this assessment; and
WHEREAS, pursuant to Streets and Highways Code Section 22646, the assessments herein confirmed by the City Council shall be collected on the secured property tax roll and collected at the same time and in the same manner as County taxes are collected.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande, as follows:

1. The foregoing recitals are true and correct and are incorporated herein.

2. The annual levy for the maintenance of Parkside Village Assessment District, located as shown in the approved Engineer’s Report for the Parkside Village Assessment District is hereby ordered and the assessment of $446 or $734 per

Page 214 of 696 ends

RESOLUTION NO.

PAGE 2
parcel for the Fiscal Year 2022-2023 as indicated on Exhibit “A” attached hereto and incorporated herein by this reference, is hereby confirmed.

3. Adoption of this Resolution shall constitute the levy of an assessment for Fiscal Year 2022-2023 and the City Clerk shall file the diagram and assessments with the County of San Luis Obispo Auditor.

On motion of Council Member , seconded by Council Member , and by the following roll call vote, to wit:

AYES:

NOES:

ABSENT:
the foregoing Resolution was passed and adopted this 14th day of June, 2022.

Page 215 of 696 ends

RESOLUTION NO.

PAGE 3

CAREN RAY RUSSOM, MAYOR
ATTEST:

JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:

WHITNEY McDONALD, CITY MANAGER
APPROVED AS TO FORM:

TIMOTHY J. CARMEL, CITY ATTORNEY

Page 216 of 696 ends

Exhibit A

SAN LUIS OBISPO COUNTY TAX SYSTEM
TRACT 2310 ASSESSMENTS
FOR TAX ROLL YEAR 2022-23
FUND ASSESSMENT # CHARGE FUND ASSESSMENT # CHARGE
1893 077255002 $ 446.00 1893 077255038 $ 734.00
1893 077255003 $ 446.00 1893 077255039 $ 734.00
1893 077255004 $ 446.00 1893 077255040 $ 734.00
1893 077255005 $ 446.00 1893 077255041 $ 734.00
1893 077255006 $ 446.00 1893 077255042 $ 734.00
1893 077255007 $ 446.00 1893 077255043 $ 734.00
1893 077255008 $ 446.00 1893 077255044 $ 734.00
1893 077255009 $ 446.00 1893 077255045 $ 734.00
1893 077255010 $ 446.00 1893 077255046 $ 734.00
1893 077255011 $ 446.00 1893 077255047 $ 734.00
1893 077255012 $ 446.00 1893 077255048 $ 734.00
1893 077255013 $ 446.00 1893 077255049 $ 734.00
1893 077255014 $ 446.00 1893 077255050 $ 734.00
1893 077255015 $ 734.00 1893 077255051 $ 734.00
1893 077255016 $ 734.00 1893 077255052 $ 734.00
1893 077255017 $ 734.00 1893 077255053 $ 734.00
1893 077255018 $ 734.00 1893 077255054 $ 734.00
1893 077255019 $ 734.00 1893 077255055 $ 734.00
1893 077255020 $ 734.00 1893 077255056 $ 734.00
1893 077255021 $ 734.00 1893 077255057 $ 734.00
1893 077255022 $ 734.00 1893 077255058 $ 734.00
1893 077255023 $ 734.00 1893 077255059 $ 734.00
1893 077255024 $ 734.00 1893 077255060 $ 734.00
1893 077255027 $ 734.00 1893 077255061 $ 734.00
1893 077255028 $ 734.00 1893 077255062 $ 734.00
1893 077255029 $ 734.00 1893 077255063 $ 734.00
1893 077255030 $ 734.00 1893 077255064 $ 734.00
1893 077255031 $ 734.00 1893 077255065 $ 734.00
1893 077255032 $ 734.00 1893 077255066 $ 734.00
1893 077255033 $ 734.00 1893 077255067 $ 734.00
1893 077255034 $ 734.00 1893 077255068 $ 734.00
1893 077255035 $ 734.00
1893 077255036 $ 734.00 TOTAL $ 43,966.00
1893 077255037 $ 734.00

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ATTACHMENT 2
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF ARROYO GRANDE DIRECTING THE LEVY OF THE

ANNUAL ASSESSMENTS RELATED TO THE GRACE

LANE ASSESSMENT DISTRICT PURSUANT TO THE
LANDSCAPING AND LIGHTING ACT OF 1972 (STREETS
AND HIGHWAYS CODE SECTIONS 22500 ET. SEQ.) FOR
FISCAL YEAR 2022-2023
WHEREAS, on November 28, 2006, the City Council of the City of Arroyo Grande adopted Resolution No. 3976 ordering the formation of the Grace Lane Assessment District under Part 2 of Division 15 of the California Streets and Highways Code 22500- 22679 (Landscape and Lighting Act of 1972), which allows local governmental agencies to form assessment districts for the purpose of financing the costs and expenses of landscaping and lighting public areas; and
WHEREAS, the City Council, at its meeting of May 10, 2022, approved Resolution No. 5183 approving the Engineer’s Report and declaring its intention to levy and collect annual assessments for the Grace Lane Assessment District for Fiscal Year 2022-2023 and set a public hearing for June 14, 2022 for the Grace Lane Assessment District; and WHEREAS, a public hearing to levy the annual assessment of the Parkside Village Assessment District was held June 14, 2022 at the City Council Chambers, 215 E.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande, as follows:

1. The foregoing recitals are true and correct and are incorporated herein.

2. The annual levy for the maintenance of Grace Lane Assessment District, located as shown in the approved Engineer’s Report for the Grace Lane Assessment District is hereby ordered and the assessment of $460 or $608 per parcel for the Fiscal Year 2022-2023 as indicated on Exhibit “A” attached hereto and incorporated herein by this reference, is hereby confirmed.

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RESOLUTION NO.

PAGE 2

On motion of Council Member , seconded by Council Member , and by the following roll call vote, to wit:

AYES:

NOES:

ABSENT:
the foregoing Resolution was passed and adopted this 14th day of June, 2022.

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RESOLUTION NO.

PAGE 3

CAREN RAY RUSSOM, MAYOR
ATTEST:

JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:

WHITNEY McDONALD, CITY MANAGER
APPROVED AS TO FORM:

TIMOTHY J. CARMEL, CITY ATTORNEY

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Exhibit A

SAN LUIS OBISPO COUNTY TAX SYSTEM
TRACT 2236 ASSESSMENTS
FOR TAX ROLL YEAR 2022-23
FUND ASSESSMENT # CHARGE
1895 007019002 $ 460.00
1895 007019003 $ 460.00
1895 007019004 $ 460.00
1895 007019005 $ 460.00
1895 007019006 $ 460.00
1895 007019007 $ 460.00
1895 007019008 $ 460.00
1895 007019035 $ 460.00
1895 007019036 $ 460.00
1895 007019037 $ 460.00
1895 007019012 $ 460.00
1895 007019014 $ 460.00
1895 007019015 $ 460.00
1895 007019016 $ 460.00
1895 007019017 $ 460.00
1895 007019034 $ 608.00
1895 007019033 $ 608.00
1895 007019025 $ 608.00
1895 007019030 $ 608.00
TOTAL $ 9,332.00

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ATTACHMENT 3
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF ARROYO GRANDE DIRECTING THE LEVY OF THE

ANNUAL ASSESSMENTS RELATED TO THE ARROYO

GRANDE LANDSCAPING AND LIGHTING ASSESSMENT
DISTRICT NO. 1, WITHIN TRACT 1769, PURSUANT TO
THE LANDSCAPING AND LIGHTING ACT OF 1972
(STREETS AND HIGHWAYS CODE SECTIONS 22500 ET.

SEQ.) FOR FISCAL YEAR 2022-2023
WHEREAS, on June 9, 1992, the City Council of the City of Arroyo Grande adopted Resolution No. 2932 ordering the formation of the Arroyo Grande Landscaping and Lighting Assessment District No. 1 (“District”), within Tract 1769 under Part 2 of Division 15 of the California Streets and Highways Code 22500-22679 (Landscape and Lighting Act of 1972), which allows local governmental agencies to form assessment districts for the purpose of financing the costs and expenses of landscaping and lighting public areas; and
WHEREAS, the City Council, at its meeting of May 10, 2022, approved Resolution No. 5184 approving the Engineer’s Report and declaring its intention to levy and collect annual assessments for the District for Fiscal Year 2022-2023 and set a public hearing for June 14, 2022 for the District; and
WHEREAS, a public hearing to levy the annual assessment of the Parkside Village Assessment District was held June 14, 2022 at the City Council Chambers, 215 E.

Branch Street, Arroyo Grande, California, 93420 and the City Council took public testimony from all interested persons as to the levy of the annual assessment for the Parkside Village Assessment District; and
WHEREAS, pursuant to Streets and Highways Code Section 22130, the City Council is authorized to levy this assessment; and
WHEREAS, pursuant to Streets and Highways Code Section 22646, the assessments herein confirmed by the City Council shall be collected on the secured tax roll and collected at the same time and in the same manner as County taxes are collected.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande, as follows:

1. The foregoing recitals are true and correct and are incorporated herein.

2. The annual levy for the maintenance of District, located as shown in the approved Engineer’s Report for the District is hereby ordered and the assessment of $3,000 to be equally distributed per assessable parcel for the

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RESOLUTION NO.

PAGE 2
Fiscal Year 2022-2023 as indicated on Exhibit “A” attached hereto and incorporated herein by this reference, is hereby confirmed.

On motion of Council Member , seconded by Council Member , and by the following roll call vote, to wit:

AYES:

NOES:

ABSENT:
the foregoing Resolution was passed and adopted this 14th day of June, 2022.

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RESOLUTION NO.

PAGE 3

CAREN RAY RUSSOM, MAYOR
ATTEST:

JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:

WHITNEY McDONALD, CITY MANAGER
APPROVED AS TO FORM:

TIMOTHY J. CARMEL, CITY ATTORNEY

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Exhibit A

SAN LUIS OBISPO COUNTY TAX SYSTEM
TRACT 1769 ASSESSMENTS
FOR TAX ROLL YEAR 2022-23
FUND ASSESSMENT # CHARGE
1765 077253001 $ 100.00
1765 077253002 $ 100.00
1765 077253003 $ 100.00
1765 077253004 $ 100.00
1765 077253005 $ 100.00
1765 077253006 $ 100.00
1765 077253007 $ 100.00
1765 077253008 $ 100.00
1765 077253009 $ 100.00
1765 077253010 $ 100.00
1765 077253011 $ 100.00
1765 077253012 $ 100.00
1765 077253013 $ 100.00
1765 077253014 $ 100.00
1765 077253015 $ 100.00
1765 077253016 $ 100.00
1765 077253017 $ 100.00
1765 077253018 $ 100.00
1765 077253019 $ 100.00
1765 077253020 $ 100.00
1765 077253021 $ 100.00
1765 077253022 $ 100.00
1765 077253023 $ 100.00
1765 077253024 $ 100.00
1765 077253025 $ 100.00
1765 077253026 $ 100.00
1765 077253027 $ 100.00
1765 077253028 $ 100.00
1765 077253029 $ 100.00
1765 077253030 $ 100.00
TOTAL $ 3,000.00

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ITEM 9.b.:

Attachment 4 – May 10, 2022 Staff Report and Attachments Attachment 4 is available as a link:
https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2542 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2543 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2544 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2545 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2546 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2547 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=2548

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Item 9.c.

MEMORANDUM
TO: City Council
FROM: Brian Pedrotti, Community Development Director
BY: Andrew Perez, Planning Manager
SUBJECT: Continued Discussion and Consideration of the Introduction of an Ordinance Amending Title 16 of the Arroyo Grande Municipal Code to Implement Senate Bill 9; Development Code Amendment 21-002; Location – Citywide
DATE: June 14, 2022
SUMMARY OF ACTION:

Introduction of the proposed Ordinance amending Title 16 of the Arroyo Grande Municipal Code to implement Senate Bill 9 locally (Attachment 1) will allow for adoption of the Ordinance at a future City Council meeting.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

No financial impact is projected.

RECOMMENDATION:

Introduce an Ordinance establishing regulations for projects proposed under the provisions of SB 9.

BACKGROUND:

SB 9 was signed by Governor Newsom on September 16, 2021, and became effective January 1, 2022 (Attachment 2). SB 9 can be broken into two primary components: 1) provisions that allow subdivisions of a single-family zoned lot into two lots; and 2) provisions that allow construction of two units on a single-family zoned property (“two-unit development”). Lot splits proposed under the provisions of SB 9 are referred to as Urban Lot Splits (ULS). These provisions can be used in concert, so that an applicant could subdivide an existing parcel and build two units on each parcel. Cities may deny an SB 9 project or subdivision that otherwise meets the requirements of SB 9 only if the Building Official determines it will result in a specific, adverse impact on health and safety and there is no feasible way to mitigate the impact.

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Item 9.c.

City Council
Continued Discussion and Consideration of the Introduction of an Ordinance Amending Title 16 of the Arroyo Grande Municipal Code to Implement Senate Bill 9; Development Code Amendment 21-002; Location – Citywide June 14, 2022

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City Council Study Session
A study session was held with the City Council on March 22, 2022, to provide a forum for community comments and to discuss implications of SB 9 to aid staff in refining the draft Ordinance (Attachment 3). Council expressed concerns with the effects of the unplanned density associated with potential SB 9 development and also discussed impacts to the water supply, how SB 9 affects developments with homeowner’s association, and the proposed objective design standards, including height limits and parking design. These concerns and direction are noted in more detail in the corresponding sections of this report. Additionally, Council directed staff to present draft objective design standards to the Architectural Review Committee (ARC) for review and recommendation prior to the Planning Commission’s consideration of the draft Ordinance.

Architectural Review Committee
Staff presented the draft objective design standards to the ARC on April 18, 2022, for comments and a recommendation to Planning Commission. In general, the ARC recommended revisions to the design standards that allowed for more flexibility. For example, one recommendation was that the maximum size of units should be tied to lot size rather than the one-size fits all approach of a 1,200 square foot limit. The ARC also recommended that additional flexibility should be incorporated into the standards for building materials and colors. Recommendations from the ARC were included in the draft Ordinance brought to the Planning Commission.

Planning Commission
On May 3, 2022, staff presented the draft Ordinance to the Planning Commission for a recommendation hearing (Attachment 4). The Planning Commission adopted a Resolution recommending adoption of the draft Ordinance with substantial revisions from the direction provided by the City Council (Attachment 5). The changes proposed by the Commission included allowances for more units and larger units, a more permissive height limit, an elimination of parking requirements, and allowance for accessory dwelling units (ADUs) on lots created through SB 9.

City Council
Introduction of the draft Ordinance was considered by the Council at a public hearing on May 24, 2022 (Attachment 6). While Council expressed appreciation for the Planning Commission’s recommendations meant to encourage SB 9 development, Council also expressed concerns with potential impacts related to privacy, parking, and increased density in certain neighborhoods. As a result, Council requested certain changes to the proposed Ordinance to address these concerns, including revisions to the number of units allowed by the Ordinance, maximum size, height restrictions, parking requirements, and a prohibition of rooftop decks, which are discussed in more detail below.

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ANALYSIS OF ISSUES:

Number of Units
SB 9 requires agencies to ministerially approve housing developments consisting of two residential units within a single-family residential zone, if developed pursuant to the provisions of the legislation. A two-unit development may include the construction of two new units, or the addition of a new unit to a property already developed with a singlefamily dwelling.

ADUs are allowed with SB 9 projects; however, SB 9 states that an agency shall not be required to permit more than two units on a parcel that proposes both an ULS and twounit development. The draft Ordinance provided to the City Council on March 22, 2022 recommended a four unit maximum for parcels that were created through an ULS; a twounit development and up to two ADUs or JADUs. The recommendation from the Planning Commission, on the other hand, would allow either an ADU or JADU on lots created through a ULS, in addition to a two-unit development, resulting in as many as six (6) units on the original single family lot (three units total on each ULS lot). This would increase the maximum number of units allowed between the two lots from four units, the minimum required by SB 9, to six units.

During the discussion on May 24, 2022, Council agreed that, in certain circumstances, a six unit maximum is appropriate but should be limited to parcels of a certain size. Staff recommends minimum lot sizes of 10,000 square feet, after subdivision via ULS, for development of up to six units. Using Floor-Area Ratio (FAR) as the limiting factor for size of the units, a 10,000 square foot lot could be developed with two 2,125 square foot primary dwellings and a 750 square foot ADU. A minimum lot size of 10,000 square feet means the original parcel to be subdivided would need to be at least 20,000 square feet, making all parcels in the Residential Estate, Residential Hillside, and Residential Rural zones, and select parcels in the Residential Suburban zone, eligible to develop up to six units after an ULS.

Objective Design Standards
The legislation allows the City to adopt objective development standards for SB 9 projects. In addition to the mandatory development standards regarding four-foot side and rear yard setbacks and allowances for construction of attached units, the draft Ordinance provided to Council on March 22, 2022, included objective design standards to regulate size, height, building separation, and aesthetics. After receiving feedback from the ARC, Planning Commission, and Council, the draft Ordinance has been revised to use established FAR maximums as the limiting factor for unit size. Relying on the established FAR limits ensures SB 9 units will be consistent with the pattern of development anticipated by the Municipal Code in regards to size. Existing FAR maximums found in AGMC 16.32.050 are summarized in Table 1.

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Table 1: Floor-Area Ratio Maximums
Lot Size Floor Area Ratio Maximum
0-4,000 sq. ft. 0.35
4,001-7,199 sq. ft. 0.40
7,200-11,999 sq. ft. 0.50
12,000-39,999 sq. ft. 0.45
Greater than 40,000 sq. ft. None
SB 9 establishes that city-imposed design standards may not preclude the construction of at least two units of at least 800 square feet each. Therefore, the proposed Ordinance provided in Attachment 1 provides that the FAR limits listed in Table 1 may be exceeded if they would not allow two 800 square-foot units.

Height
At the study session held on March 22, 2022, Council was undecided about whether a 16-foot height limit would be appropriate. To provide flexibility, the ARC recommended a height standard that limited building height to 16-feet within the setbacks of the underlying zone, and buildings, or portions thereof, that comply with the setbacks of the underlying district would be subject to the height limit of that district. Planning Commission found this proposed height standard overly restrictive and, therefore, recommended a height limit of 30 feet, consistent with the height limit of all single-family zones. Council discussed the topic of height limits for these projects on May 24, 2022, and expressed concern that the combination of the reduced side and rear setbacks allowed by SB 9 and a 30-foot height limit is likely to result in development that is incompatible with existing neighborhoods.

Council directed staff to revert to the flexible height limitation that was supported by the ARC. The flexible height standard limits building height to 16 feet when it is located within the setback of the underlying zoning district, and up to 30 feet in areas outside the underlying setbacks. In addition, the proposed Ordinance provided in Attachment 1 prohibits rooftop decks on SB 9 projects, as directed by Council.

Parking
SB 9 establishes a maximum parking requirement of one parking space per unit. The draft ordinance reviewed by Planning Commission required one covered parking space per unit and included standards for parking locations and configurations. Planning Commission discussed the issue of parking and was in favor of eliminating the covered parking requirement for SB 9 units because of the additional costs and land associated with a garage or carport. The Planning Commission recommendation to Council included removing parking requirements from the draft ordinance as another way to incentivize SB 9 development. Council agreed with Planning Commission that a requirement for covered parking may be a barrier to development, but determined that parking should still be required for SB 9 units. As a result, Council directed staff to revise the parking requirement

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to one uncovered parking space for each unit. The proposed Ordinance provided in Attachment 1 includes this requirement.

Next Steps
The proposed Ordinance has been revised consistent with the direction provided by the City Council on May 24, 2022, and is now ready for introduction. Adoption of the Ordinance is proposed to occur at the next Council meeting on June 28, 2022, unless Council directs staff to make substantial revisions to the Ordinance, in which case a revised ordinance will be prepared and presented for consideration and introduction at a future City Council meeting.

ALTERNATIVES:

The following alternatives are provided for the Council’s consideration:

1. Introduce the attached Ordinance approving Development Code Amendment 21- 002;

2. Modify as appropriate and introduce the modified Ordinance approving Development Code Amendment 21-002;

3. Continue the introduction of the Ordinance, and provide direction to staff on specific revisions to the Ordinance; or

4. Provide other direction to staff.

ADVANTAGES:

Adoption of the Ordinance would regulate development in a manner that is appropriate for Arroyo Grande. The proposed objective design standards would allow potentially significant development under SB 9 and help achieve progress towards meeting the housing goals established in the City’s Housing Element.

DISADVANTAGES:

The reduced setbacks and development allowed by SB 9 would increase density in a manner not anticipated by the Municipal Code and may change the character of residential neighborhoods.

ENVIRONMENTAL REVIEW:

In compliance with the California Environmental Quality Act (CEQA), the Community Development Department has determined that the adoption of an ordinance to implement Senate Bill 9 creates a ministerial review process and therefore is exempt from the requirements of CEQA pursuant to Division 13 (commencing with Section 21000) of the Public Resources Code.

PUBLIC NOTIFICATION AND COMMENTS:

A notice of public hearing was published in the Tribune and posted at City Hall and on the City’s website on May 13, 2022. Council continued the introduction hearing to June

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14, 2022, therefore a Notice of Continuance was published on May 31, 2022. The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2.

Attachments:

1. Proposed Ordinance

2. Senate Bill 9

3. Staff Report and Minutes from March 22, 2022 City Council Study Session

4. Staff Report and Draft Minutes from May 3, 2022 Planning Commission meeting

5. Planning Commission Resolution 22-2361

6. Staff Report and Draft Minutes from May 24, 2022 City Council meeting

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ATTACHMENT 1
ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE AMENDING TITLE 16 OF THE

ARROYO GRANDE MUNICIPAL CODE AND ADDING
SECTIONS 16.32.060 AND 16.20.180 PERTAINING TO

REGULATIONS FOR TWO-UNIT RESIDENTIAL

DEVELOPMENT WITHIN SINGLE-FAMILY RESIDENTIAL

ZONES AND TO PARCEL MAPS FOR URBAN LOT SPLITS
TO COMPLY WITH SENATE BILL 9 (SB 9), CALIFORNIA
GOVERNMENT CODE SECTIONS 65852.21 AND 66411.7
(DEVELOPMENT CODE AMENDMENT 2-1-002)
WHEREAS, on September 16, 2021, Governor Gavin Newsom signed Senate Bill 9 into law, which establishes a series of new regulations to allow for ministerial approval of two units on parcels located in single-family residential zones as set forth in Government Code Section 65852.21 and ministerial approval of urban lot splits pursuant to Government Code Section 66411.7; and
WHEREAS, Government Code sections 65852.21 and 66411.7 permit the imposition of objective zoning standards, objective design standards and objective subdivision standards on two-unit residential development projects and urban lot splits, provided that they do not physically preclude the construction of up to two units of at least 800 square feet in floor area; and
WHEREAS, the City of Arroyo Grande desires to amend Title 16 of the Arroyo Grande Municipal Code to comply with the provisions of Government Code sections 65852.21 and 66411.7; and
WHEREAS, the City of Arroyo Grande has duly initiated this amendment to the Arroyo Grande Municipal Code to add Section 16.32.060 pertaining to Regulations for TwoUnit Residential Development within Single-Family Residential Zones and Section

16.20.180 pertaining to Parcel Maps for Urban Lot Spits; and WHEREAS, the Planning Commission of the City of Arroyo Grande, after giving notices thereof as required by law, held a public hearing on May 3, 2022 concerning this code amendment and carefully considered all pertinent testimony and the staff report offered in the case as presented; and
WHEREAS, on May 3, 2022, the Planning Commission of the Arroyo Grande recommended to the City Council adding Sections 16.20.180 and 16.32.060 to the AGMC; and
WHEREAS, the City Council of the City of Arroyo Grande has, after giving notice thereof as required by law, held a public hearing on May 24, 2022, concerning the

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addition of AGMC Sections 16.20.180 and 16.32.060; and
WHEREAS, the City Council of the City of Arroyo Grande, at its regularly scheduled public meeting on May 24, 2022 introduced this Ordinance to add Section 16.20.180 to Title 16, Chapter 20 and 16.32.060 to Title 16, Chapter 32 of the AGMC; and WHEREAS, the City Council has carefully considered all pertinent testimony and the staff report, its attachments and all supporting materials referenced therein or offered in the matter as presented at the public hearing.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DOES ORDAIN AS FOLLOWS:

SECTION 1. The above recitals and findings are true and correct and are incorporated herein by this reference.

SECTION 2. Section 16.20.180 is hereby added to Title 16, Chapter 20 of the Arroyo Grande Municipal Code to read as follows:

Section 16.20.180 Parcel Maps for Urban Lot Splits
A. Purpose and Scope

1. This Section implements Government Code section 66411.7 to provide an owner of property in a single-family zoning district an additional method to subdivide the parcel for the purpose of housing development.

2. Urban lot split means the subdivision of an existing legal parcel in a single-family zoning district to create no more than two new parcels.

B. Application and Approval

1. A parcel map for an urban lot split may not be approved except in conjunction with a concurrently submitted application for building permits for two-unit residential development pursuant to Section 16.32.060. Development on the resulting parcels is limited to the residential development approved in the concurrently submitted building permit applications.

2. A parcel map for an urban lot split must be prepared by a registered civil engineer or licensed land surveyor in accordance with Government Code sections 66444 – 66450 and this Section, and submitted for approval to the City Engineer. A fee in an amount established by City Council resolution must be paid concurrently with the submission of the parcel map.

3. The City Engineer is the approval authority for parcel maps under this Section.

The City Engineer shall approve a parcel map for an urban lot split if the Engineer determines that it meets all of the requirements of this Section.

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C. The following supplemental information is required to be submitted with a parcel map to establish compliance with the construction plans and all provisions of this Code and applicable State law:

1. A map of appropriate size and to scale showing all of the following:
a. Total area (in acreage and square feet) of each proposed lot; b. Location and dimensions of existing and proposed property lines; c. Zoning District;
d. The location and use of all existing and proposed structures; e. All required zoning setbacks for the existing and proposed lots; f. The location of all existing water, sewer, electricity, storm drain, or gas service lines, pipes, systems, or easements;
g. The location of all proposed new water, sewer, storm drain, lines, pipes, or systems;
h. The location of any proposed easements for access or public utilities to serve a lot created by the subdivision;
i. The location of any existing trees larger than four inches in diameter measured four feet six inches above the base and any such trees proposed for removal;
j. Any area of the parcel that has a slope of 25% or greater by way of contours at 5-foot intervals;
k. Name and dimensions, including right-of-way and improved area, of public and private streets or public alleys adjoining the parcel; l. Curb, gutter, sidewalk, parkway, and street trees: type, location, and dimensions;
m. Location of existing or proposed driveway dimensions, materials, and slope (including cross slope); and
n. Location of existing or proposed pedestrian pathway access to the public right of way.

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i. Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income.
ii. Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power.
iii. A parcel or parcels on which an owner of residential real property has exercised the owner’s rights under Section 12.75 (commencing with Section 7060) of Division 7 of Title 1 of the Government Code to withdraw accommodations from rent or lease within 15 years before the date that the development proponent submits an application.
iv. Housing that has been occupied by a tenant in the last three years. b. The parcel has not been established through prior exercise of an urban lot split under this Section;
c. Neither the owner of the parcel being subdivided nor any person acting in concert with the owner has previously subdivided an adjacent parcel under the provisions of this Section.
d. The owner intends to occupy one of the housing units located on a lot created by the parcel map as their principal residence for a minimum of three years from the date of the recording of the parcel map. e. Rental terms of any unit created in the subdivision shall not be less than 31 consecutive days, nor shall rental terms allow termination of the tenancy prior to the expiration of at least one thirty-one (31) day period of occupancy by the same tenant.
f. The uses allowed on a lot created by the parcel map shall be limited to residential uses.

D. Design and Improvement Requirements

1. A parcel map may subdivide an existing legal parcel to create no more than two parcels of approximately equal lot area. One parcel shall not be smaller than 40 percent of the lot area of the original parcel proposed for subdivision and neither parcel shall be smaller than 1,200 square feet.:

2. Each parcel must be served by a separate water service meter and a separate sewer connection.

3. Each parcel shall either drain to a developed drainage easement or in accordance with the City’s Standard Specification and Engineering Standards.

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4. Rights-of-way as required for access along all natural watercourses as necessary for flood control, maintenance, and improvement shall be dedicated.

5. The parcel must satisfy the requirements of Government Code section 66411.7(a).

6. A lot line shall not bisect or be located within 4 feet of any of the following:
a. A dwelling that has been occupied by a tenant at any time during the three years before the date of the parcel map;
b. A structure designated as a historic structure or a candidate structure under any City ordinance or included on the State Historic Resources Inventory;
c. A dwelling that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income.
d. Existing easements if the resulting lot would create a developable area that would interfere with the use of the easement for its intended purpose.

Lot depth shall be measured at the midpoint of the front lot line. Lot width shall be measured by a line connecting two points on opposite interior lot lines that will result in a line parallel to the front lot line. c. New lot lines must be straight lines, unless there is a conflict with existing improvements or the natural environment in which case the line may be not be straight but shall follow the appropriate course. d. Lot lines facing a street shall generally be parallel to the street. Unless the minimum public street frontage is provided, the lot line dividing the two parcels must be parallel to and not less than 50 feet from an existing front lot line, or outside the front half of the existing lot, whichever is greater. e. Interior lot lines not facing the street shall be at right angles perpendicular to the street on straight streets, or radial to the street on curved streets. f. Lot lines shall be located within appropriate physical locations such as the top of creek banks, at appropriate topographical changes (top or bottom

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of slopes etc.) or at locations which clearly separate existing and proposed land uses.
g. Lot lines shall be contiguous with existing zoning boundaries. h. The placement of lot lines shall not result in an accessory building or accessory use on a lot without a main building or primary use on the same lot, as defined in the Development Code.
i. Lot lines shall not render an existing structure as nonconforming in any respect (e.g., setbacks, Floor Area Ratio, parking), nor increase the nonconformity of an existing nonconforming structure.

E. Access Standards

1. Each lot shall front upon or have access to a public street, or be served by an access easement serving no more than two lots. Access shall be provided in compliance with these standards:
a. Vehicle access easements serving a maximum of two units shall meet the following standards:
i. Easement width shall be a minimum of 10 feet and a maximum of 16 feet, unless a wider driveway is required by the California Fire Code due to distance of the structure from the easement, or as needed to meet the driveway and parking standards in the City’s standards.
ii. The minimum length for a vehicle access easement is 20 feet. No maximum easement length shall be set. If easement length is more than 75 feet, a vehicle turnaround shall be provided.
iii. No residential structure shall be closer than 3 feet to the easement. b. Vehicle access easements serving three to four units shall meet the following standards:
i. Easement width shall be a minimum of 20 feet.
ii. The minimum length for a vehicle access easement is 20 feet. No maximum easement length shall be set. If easement length is more than 75 feet, a vehicle turnaround shall be provided.
iii. No residential structure shall be closer than 5 feet to the easement. c. Where a lot does not abut a public street, and where no automobile parking spaces are required or proposed for the residential development, a vehicle access easement is not required. An easement providing pedestrian access to a street from each lot shall be provided meeting the following standards:
i. Easement width shall be a minimum of five feet;

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ii. Pedestrian access easements shall not exceed 200 feet in length.

2. Vehicle access easements shall not be located closer than 25 feet to an intersection.

3. Access and provisions for fire protection consistent with the California Fire Code shall be provided for all structures served by an access easement.

4. Surfacing of easements, pedestrian walkways required within easements, and turnaround dimensions shall meet the requirements of the California Fire Code, the City’s Design Standards, and the parking design standards in the Development Code.

5. Lots taking access by an easement must record a shared maintenance agreement for the driveway. The agreement shall be recorded prior to or concurrently with the final map.

F. Map Requirements

1. The content and form of a parcel map shall meet all the requirements of Government Code sections 66444 – 66450.

2. The parcel map shall show all easements for public utilities necessary to serve each lot created by the subdivision.

3. The parcel map shall show all easements necessary to provide each lot with access to the public or private street or alley abutting the original parcel.

4. The parcel map shall contain a declaration that:
a. Each lot created by the parcel map shall be used solely for residential dwellings;
b. That rental of any dwelling unit on a lot created by the parcel map shall not be less than 31 consecutive days, nor shall rental terms allow termination of the tenancy prior to the expiration of at least one 31-day period occupancy by the same tenant.

G. Concurrent Processing With Other Ministerial Permits for Housing Development

1. No development, including grading or vegetation removal, shall commence on either lot, concurrent or subsequent to an urban lot split, unless it is approved with a valid building permit for the construction of a housing development and complies with all the objective development and design standards outlined for two-unit residential development or accessory dwelling units in this Code, or any other adopted objective design standards in effect at the time a complete application is submitted.

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2. A building permit for development on an urban lot split cannot be issued until the parcel map is recorded.

3. The City Engineer shall deny an urban lot split if the building official has made a written finding, based upon a preponderance of the evidence, that the proposed housing development project would have a specific, adverse impact, as defined and determined in paragraph (2) of subdivision (d) of Section 65589.5 of the Government Code, upon public health and safety or the physical environment and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact.

H. Prohibition of Further Subdivision

1. A lot created by a parcel map under this Section shall not be further subdivided.

SECTION 3. Section 16.32.060 is hereby added to Title 16, Chapter 32 of the Arroyo Grande Municipal Code to read as follows:

Section 16.32.060 Two-Unit Residential Development
A. Purpose and Intent.

1. It is the intent of these regulations to provide opportunities for two units on one legal parcel, consistent with state law and local regulations. In the event of an inconsistency between this Section and Government Code Section 65852.21, Government Code Section 65852.21 shall prevail. Provided that Government Code Sections 65852.21 or 66411.7 are not repealed, qualifying two-unit residential development in the single-family zoning districts shall be located, developed, and used in compliance with this Section.

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iii. Very high fire severity zones, except if the site has adopted fire hazard mitigation measures pursuant to existing building standards or state fire mitigation measures applicable to the development;
iv. A hazardous waste site, unless the site has been cleared by the State for residential use;
v. Delineated earthquake fault zones, unless the development complies with applicable seismic protection building code standards;
vi. Special flood hazard areas (100-year flood zones), unless the site has been subject to a FEMA Letter of Map Revision issued to the City or the site meets FEMA requirement necessary to meet minimum flood plain management criteria of the National Flood Insurance Program; vii. A regulatory flood way identified in a FEMA map, unless the development has received a no-rise certification;
viii. Lands identified for conservation in an adopted natural resource protection plan, habitat for protected species, or under a conservation easement; and
ix. A historic district or property designated pursuant to a local ordinance or included on the State Historic Resources Inventory.
b. The proposed development would require demolition or alteration of any of the following types of housing:
i. Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to moderate, low, or very low incomes;
ii. A unit that has been occupied by a tenant within the past three years; and iii. A rent-controlled unit.
c. The proposed development would result in the demolition of more than 25 percent of the existing exterior structural walls, unless the site has not been occupied by a tenant in the last three years.
d. The building official finds that the proposed development would have a specific, adverse impact on public health and safety or the physical environment that cannot be feasibly mitigated or avoided, as defined and determined in paragraph (2) of subdivision (d) of Government Code Section 65589.5.

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B. Restrictions.

A qualifying two-unit residential project shall be subject to the following restrictions:

1. The development and use of the dwelling units shall only be valid and permitted based on the terms established in the Section.

2. The dwelling unit(s) shall not be rented for a period of less than thirty-one (31) consecutive days, nor shall rental terms allow termination of the tenancy prior to the expiration of at least one thirty-one (31) day period of occupancy by the same tenants.

C. Ministerial Approval of Two-Unit Residential Development Projects.

1. The Community Development Director or his/her designee shall ministerially review and approve a two-unit residential development application and shall not require a public hearing, provided that the submitted application is complete and demonstrates that the two-unit residential development project complies with the requirements contained in this Title 16 and qualifies under Government Code Section 65852.21(a).

2. In addition to obtaining planning approval for the two-unit residential development project, the applicant shall be required to obtain a building permit, and comply with other applicable construction permit requirements prior to the construction of the dwelling units.

D. Unit Configurations.

The new unit in a two-residential unit development may be permitted in the following configurations. For the purpose of this section, “unit” means any dwelling unit, including, but not limited to, two-unit residential development, additional residential unit, primary residential unit, accessory dwelling unit, or junior accessory dwelling unit.

1. One new unit incorporated entirely within an existing residential unit.

2. One new unit incorporated entirely within an existing accessory building, including garages.

3. One new unit attached to and increasing the size of an existing residential unit or an existing accessory building.

4. One new unit detached from and located on the same lot as an existing unit. A unit that is attached to another detached accessory building, but not another residential unit, or is attached by a breezeway or porch, is considered detached.

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5. Two newly constructed attached units (duplex) or two detached residential units on a vacant lot.

6. A two-unit residential development in any of the configurations described above may be added to a newly created lot concurrently with an approval for a parcel map for an urban lot split, pursuant to AGMC Section 16.20.180, Parcel Maps for Urban Lot Splits.

7. Up to two accessory dwelling units pursuant to AGMC Section 16.52.150, Accessory Dwelling Units, may be proposed in addition to the two units constructed pursuant to this Section. One accessory dwelling unit may be added to a lot created through an Urban Lot Split, but only if the resulting lot is larger than 10,000 square feet in size.

E. Parking.

1. No parking shall be required for dwelling units developed pursuant to this Section. Pursuant to Government Code Section 65852.21(c), one off-street parking space is required per dwelling unit, unless the parcel is located within one-half mile of a high-quality transit corridor as defined in subdivision (b) of Section 21155 of the Public Resources Code or a major transit stop as defined in Section 21064.3 of the Public Resources Code or there is a car share vehicle located within one block of the parcel.

2. All required parking spaces, driveways, and maneuvering areas shall be paved and permanently maintained with asphalt or concrete to applicable requirements.

F. Rear and Side Setbacks.

1. No setback shall be applied to existing structures or structures constructed in the same location and to the same dimensions as an existing structure.

2. For projects not meeting the requirements of subsection 1 above, a minimum four-foot setback shall be provided from side and rear lot lines.

G. Objective Zoning and Design Standards for Two-Unit Residential Developments.

Government Code Section 65852.21 permits the imposition of objective zoning standards and objective design standards provided the standards do not physically preclude the construction of up to two units of at least 800 square feet. Accordingly, the follow objective standards shall apply to two-unit residential development projects:

1. Massing and Articulation

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a. Maximum Unit Size: The total gross floor area of the unit(s), excluding garages, shall not exceed the floor-area ratios maximums found in Section

16.32.050 of this Title. These maximums, however, shall not preclude the construction of at least two (2) 1,200 square foot units per lot. b. Building Separation: detached dwelling units shall have a minimum of 10 feet of separation whether the units are on one lot or adjacent lots. c. Height: The maximum height of a unit developed pursuant to this Section shall be 30 feet. The maximum height of a unit developed pursuant to this Section shall be 16-feet for any structure, or portions thereof, located within the setback of the underlying zoning district. Structures, or any portion thereof, located outside of the setbacks of the underlying zoning district shall conform to the height requirements of that district.
d. Rooftop decks shall be permitted in accordance with the design standards established by Subsection D of Section 16.48.180 of this Title are not allowed.

2. Colors and Materials.
a. The primary cladding shall be stone, brick, fiber cement, composite wood or stone, wood, stucco, or other cementitious material. Plywood, such as T1-11 siding, is prohibited.
b. Color schemes shall consist of one primary color and at least one secondary color, at a minimum. The roof color shall not be considered a color for purposes of this standard.

3. Parking and Circulation.
a. When parking is proposed, the Parking areas shall not be located between a structure and a public sidewalk within the front setback, with the exception of permitted driveways. When parking areas are located in the front yard, outside of the front setback, a landscape buffer of at least 10 feet between the sidewalk and parking area shall be provided.
b. All parking areas serving more than one unit shall be internally connected and shall use shared driveways.

4. Utility and Service Areas.
a. All new dwelling units must connect to City utilities in accordance with Section

13.12.060 of Title 13.

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b. Areas for the storage of trash, recycling, and green waste receptacles shall not be visible from the public right of way.
c. All mechanical equipment shall be either screened or hidden from view from the public street.

SECTION 4. The adoption of this Ordinance is not considered a project, therefore is statutorily exempt from the requirements of California Environmental Quality Act (CEQA) pursuant to Division 13 (commencing with Section 21000) of the Public Resources Code. The City Clerk shall file a Notice of Exemption from CEQA review in accordance with CEQA Guidelines.

SECTION 5. A summary of this Ordinance shall be published in a newspaper published and circulated in the City of Arroyo Grande at least five (5) days prior to the City Council meeting at which the proposed Ordinance is to be adopted. A certified copy of the full text of the proposed Ordinance shall be posted in the office of the City Clerk. Within fifteen (15) days after adoption of the Ordinance, the summary with the names of those City Council members voting for and against the Ordinance shall be published again, and the City Clerk shall post a certified copy of the full text of such adopted Ordinance.

SECTION 6. This Ordinance shall take effect and be in full force and effect thirty (30) days after its passage.

SECTION 7. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.

On motion by Council Member ______, seconded by Council Member _______, and by the following roll call vote to wit:

AYES:

NOES:

ABSENT:
the foregoing Ordinance was adopted this ____ day of _______, 2022.

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ORDINANCE NO.

PAGE 14
___________________________________

CAREN RAY RUSSOM, MAYOR
ATTEST:
___________________________________

JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:
________________________________
WHITNEY McDONALD, CITY MANAGER
APPROVED AS TO FORM:
___________________________________
TIMOTHY J. CARMEL, CITY ATTORNEY

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4/21/22, 12:17 PM Bill Text - SB-9 Housing development: approvals. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB9 1/8 SHARE THIS: Date Published: 09/17/2021 09:00 PM
SB-9 Housing development: approvals. (2021-2022)
Senate Bill No. 9
CHAPTER 162
An act to amend Section 66452.6 of, and to add Sections 65852.21 and 66411.7 to, the Government Code, relating to land use.
[ Approved by Governor September 16, 2021. Filed with Secretary of State September 16, 2021. ]

LEGISLATIVE COUNSEL'S DIGEST
SB 9, Atkins. Housing development: approvals.

The Planning and Zoning Law provides for the creation of accessory dwelling units by local ordinance, or, if a local agency has not adopted an ordinance, by ministerial approval, in accordance with specified standards and conditions.

This bill, among other things, would require a proposed housing development containing no more than 2 residential units within a single-family residential zone to be considered ministerially, without discretionary review or hearing, if the proposed housing development meets certain requirements, including, but not limited to, that the proposed housing development would not require demolition or alteration of housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income, that the proposed housing development does not allow for the demolition of more than 25% of the existing exterior structural walls, except as provided, and that the development is not located within a historic district, is not included on the State Historic Resources Inventory, or is not within a site that is legally designated or listed as a city or county landmark or historic property or district.

The bill would set forth what a local agency can and cannot require in approving the construction of 2 residential units, including, but not limited to, authorizing a local agency to impose objective zoning standards, objective subdivision standards, and objective design standards, as defined, unless those standards would have the effect of physically precluding the construction of up to 2 units or physically precluding either of the 2 units from being at least 800 square feet in floor area, prohibiting the imposition of setback requirements under certain circumstances, and setting maximum setback requirements under all other circumstances.

The Subdivision Map Act vests the authority to regulate and control the design and improvement of subdivisions in the legislative body of a local agency and sets forth procedures governing the local agency’s processing, approval, conditional approval or disapproval, and filing of tentative, final, and parcel maps, and the modification of those maps. Under the Subdivision Map Act, an approved or conditionally approved tentative map expires 24 months after its approval or conditional approval or after any additional period of time as prescribed by local ordinance, not to exceed an additional 12 months, except as provided.

Home Bill Information California Law Publications Other Resources My Subscriptions My Favorites ATTACHMENT 2

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4/21/22, 12:17 PM Bill Text - SB-9 Housing development: approvals. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB9 2/8 This bill, among other things, would require a local agency to ministerially approve a parcel map for an urban lot split that meets certain requirements, including, but not limited to, that the urban lot split would not require the demolition or alteration of housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income, that the parcel is located within a single-family residential zone, and that the parcel is not located within a historic district, is not included on the State Historic Resources Inventory, or is not within a site that is legally designated or listed as a city or county landmark or historic property or district.

The bill would set forth what a local agency can and cannot require in approving an urban lot split, including, but not limited to, authorizing a local agency to impose objective zoning standards, objective subdivision standards, and objective design standards, as defined, unless those standards would have the effect of physically precluding the construction of 2 units, as defined, on either of the resulting parcels or physically precluding either of the 2 units from being at least 800 square feet in floor area, prohibiting the imposition of setback requirements under certain circumstances, and setting maximum setback requirements under all other circumstances. The bill would require an applicant to sign an affidavit stating that they intend to occupy one of the housing units as their principal residence for a minimum of 3 years from the date of the approval of the urban lot split, unless the applicant is a community land trust or a qualified nonprofit corporation, as specified. The bill would prohibit a local agency from imposing any additional owner occupancy standards on applicants. By requiring applicants to sign affidavits, thereby expanding the crime of perjury, the bill would impose a state-mandated local program.

The bill would also extend the limit on the additional period that may be provided by ordinance, as described above, from 12 months to 24 months and would make other conforming or nonsubstantive changes.

The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment. CEQA does not apply to the approval of ministerial projects.

This bill, by establishing the ministerial review processes described above, would thereby exempt the approval of projects subject to those processes from CEQA.

The California Coastal Act of 1976 provides for the planning and regulation of development, under a coastal development permit process, within the coastal zone, as defined, that shall be based on various coastal resources planning and management policies set forth in the act.

This bill would exempt a local agency from being required to hold public hearings for coastal development permit applications for housing developments and urban lot splits pursuant to the above provisions.

By increasing the duties of local agencies with respect to land use regulations, the bill would impose a statemandated local program.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

Vote: majority Appropriation: no Fiscal Committee: yes Local Program: yes THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 65852.21 is added to the Government Code, to read:
65852.21. (a) A proposed housing development containing no more than two residential units within a singlefamily residential zone shall be considered ministerially, without discretionary review or a hearing, if the proposed housing development meets all of the following requirements:
(1) The parcel subject to the proposed housing development is located within a city, the boundaries of which include some portion of either an urbanized area or urban cluster, as designated by the United States Census Bureau, or, for unincorporated areas, a legal parcel wholly within the boundaries of an urbanized area or urban cluster, as designated by the United States Census Bureau.

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4/21/22, 12:17 PM Bill Text - SB-9 Housing development: approvals. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB9 3/8 (2) The parcel satisfies the requirements specified in subparagraphs (B) to (K), inclusive, of paragraph (6) of subdivision (a) of Section 65913.4.
(3) Notwithstanding any provision of this section or any local law, the proposed housing development would not require demolition or alteration of any of the following types of housing:
(A) Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. (B) Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power.
(C) Housing that has been occupied by a tenant in the last three years. (4) The parcel subject to the proposed housing development is not a parcel on which an owner of residential real property has exercised the owner’s rights under Chapter 12.75 (commencing with Section 7060) of Division 7 of Title 1 to withdraw accommodations from rent or lease within 15 years before the date that the development proponent submits an application.
(5) The proposed housing development does not allow the demolition of more than 25 percent of the existing exterior structural walls, unless the housing development meets at least one of the following conditions:
(A) If a local ordinance so allows.
(B) The site has not been occupied by a tenant in the last three years. (6) The development is not located within a historic district or property included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code, or within a site that is designated or listed as a city or county landmark or historic property or district pursuant to a city or county ordinance. (b) (1) Notwithstanding any local law and except as provided in paragraph (2), a local agency may impose objective zoning standards, objective subdivision standards, and objective design review standards that do not conflict with this section.
(2) (A) The local agency shall not impose objective zoning standards, objective subdivision standards, and objective design standards that would have the effect of physically precluding the construction of up to two units or that would physically preclude either of the two units from being at least 800 square feet in floor area. (B) (i) Notwithstanding subparagraph (A), no setback shall be required for an existing structure or a structure constructed in the same location and to the same dimensions as an existing structure. (ii) Notwithstanding subparagraph (A), in all other circumstances not described in clause (i), a local agency may require a setback of up to four feet from the side and rear lot lines. (c) In addition to any conditions established in accordance with subdivision (b), a local agency may require any of the following conditions when considering an application for two residential units as provided for in this section:
(1) Off-street parking of up to one space per unit, except that a local agency shall not impose parking requirements in either of the following instances:
(A) The parcel is located within one-half mile walking distance of either a high-quality transit corridor, as defined in subdivision (b) of Section 21155 of the Public Resources Code, or a major transit stop, as defined in Section 21064.3 of the Public Resources Code.
(B) There is a car share vehicle located within one block of the parcel. (2) For residential units connected to an onsite wastewater treatment system, a percolation test completed within the last 5 years, or, if the percolation test has been recertified, within the last 10 years. (d) Notwithstanding subdivision (a), a local agency may deny a proposed housing development project if the building official makes a written finding, based upon a preponderance of the evidence, that the proposed housing development project would have a specific, adverse impact, as defined and determined in paragraph (2) of subdivision (d) of Section 65589.5, upon public health and safety or the physical environment and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact.

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4/21/22, 12:17 PM Bill Text - SB-9 Housing development: approvals. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB9 4/8 (e) A local agency shall require that a rental of any unit created pursuant to this section be for a term longer than 30 days.
(f) Notwithstanding Section 65852.2 or 65852.22, a local agency shall not be required to permit an accessory dwelling unit or a junior accessory dwelling unit on parcels that use both the authority contained within this section and the authority contained in Section 66411.7. (g) Notwithstanding subparagraph (B) of paragraph (2) of subdivision (b), an application shall not be rejected solely because it proposes adjacent or connected structures provided that the structures meet building code safety standards and are sufficient to allow separate conveyance. (h) Local agencies shall include units constructed pursuant to this section in the annual housing element report as required by subparagraph (I) of paragraph (2) of subdivision (a) of Section 65400. (i) For purposes of this section, all of the following apply:
(1) A housing development contains two residential units if the development proposes no more than two new units or if it proposes to add one new unit to one existing unit. (2) The terms “objective zoning standards,” “objective subdivision standards,” and “objective design review standards” mean standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official prior to submittal. These standards may be embodied in alternative objective land use specifications adopted by a local agency, and may include, but are not limited to, housing overlay zones, specific plans, inclusionary zoning ordinances, and density bonus ordinances. (3) “Local agency” means a city, county, or city and county, whether general law or chartered. (j) A local agency may adopt an ordinance to implement the provisions of this section. An ordinance adopted to implement this section shall not be considered a project under Division 13 (commencing with Section 21000) of the Public Resources Code.
(k) Nothing in this section shall be construed to supersede or in any way alter or lessen the effect or application of the California Coastal Act of 1976 (Division 20 (commencing with Section 30000) of the Public Resources Code), except that the local agency shall not be required to hold public hearings for coastal development permit applications for a housing development pursuant to this section.

SEC. 2. Section 66411.7 is added to the Government Code, to read:
66411.7. (a) Notwithstanding any other provision of this division and any local law, a local agency shall ministerially approve, as set forth in this section, a parcel map for an urban lot split only if the local agency determines that the parcel map for the urban lot split meets all the following requirements:
(1) The parcel map subdivides an existing parcel to create no more than two new parcels of approximately equal lot area provided that one parcel shall not be smaller than 40 percent of the lot area of the original parcel proposed for subdivision.
(2) (A) Except as provided in subparagraph (B), both newly created parcels are no smaller than 1,200 square feet.
(B) A local agency may by ordinance adopt a smaller minimum lot size subject to ministerial approval under this subdivision.
(3) The parcel being subdivided meets all the following requirements:
(A) The parcel is located within a single-family residential zone. (B) The parcel subject to the proposed urban lot split is located within a city, the boundaries of which include some portion of either an urbanized area or urban cluster, as designated by the United States Census Bureau, or, for unincorporated areas, a legal parcel wholly within the boundaries of an urbanized area or urban cluster, as designated by the United States Census Bureau.
(C) The parcel satisfies the requirements specified in subparagraphs (B) to (K), inclusive, of paragraph (6) of subdivision (a) of Section 65913.4.

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4/21/22, 12:17 PM Bill Text - SB-9 Housing development: approvals. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB9 5/8 (D) The proposed urban lot split would not require demolition or alteration of any of the following types of housing:
(i) Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. (ii) Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power.
(iii) A parcel or parcels on which an owner of residential real property has exercised the owner’s rights under Chapter 12.75 (commencing with Section 7060) of Division 7 of Title 1 to withdraw accommodations from rent or lease within 15 years before the date that the development proponent submits an application. (iv) Housing that has been occupied by a tenant in the last three years. (E) The parcel is not located within a historic district or property included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code, or within a site that is designated or listed as a city or county landmark or historic property or district pursuant to a city or county ordinance. (F) The parcel has not been established through prior exercise of an urban lot split as provided for in this section. (G) Neither the owner of the parcel being subdivided nor any person acting in concert with the owner has previously subdivided an adjacent parcel using an urban lot split as provided for in this section. (b) An application for a parcel map for an urban lot split shall be approved in accordance with the following requirements:
(1) A local agency shall approve or deny an application for a parcel map for an urban lot split ministerially without discretionary review.
(2) A local agency shall approve an urban lot split only if it conforms to all applicable objective requirements of the Subdivision Map Act (Division 2 (commencing with Section 66410)), except as otherwise expressly provided in this section.
(3) Notwithstanding Section 66411.1, a local agency shall not impose regulations that require dedications of rights-of-way or the construction of offsite improvements for the parcels being created as a condition of issuing a parcel map for an urban lot split pursuant to this section. (c) (1) Except as provided in paragraph (2), notwithstanding any local law, a local agency may impose objective zoning standards, objective subdivision standards, and objective design review standards applicable to a parcel created by an urban lot split that do not conflict with this section. (2) A local agency shall not impose objective zoning standards, objective subdivision standards, and objective design review standards that would have the effect of physically precluding the construction of two units on either of the resulting parcels or that would result in a unit size of less than 800 square feet. (3) (A) Notwithstanding paragraph (2), no setback shall be required for an existing structure or a structure constructed in the same location and to the same dimensions as an existing structure. (B) Notwithstanding paragraph (2), in all other circumstances not described in subparagraph (A), a local agency may require a setback of up to four feet from the side and rear lot lines. (d) Notwithstanding subdivision (a), a local agency may deny an urban lot split if the building official makes a written finding, based upon a preponderance of the evidence, that the proposed housing development project would have a specific, adverse impact, as defined and determined in paragraph (2) of subdivision (d) of Section 65589.5, upon public health and safety or the physical environment and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact. (e) In addition to any conditions established in accordance with this section, a local agency may require any of the following conditions when considering an application for a parcel map for an urban lot split:
(1) Easements required for the provision of public services and facilities. (2) A requirement that the parcels have access to, provide access to, or adjoin the public right-of-way.

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4/21/22, 12:17 PM Bill Text - SB-9 Housing development: approvals. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB9 6/8 (3) Off-street parking of up to one space per unit, except that a local agency shall not impose parking requirements in either of the following instances:
(A) The parcel is located within one-half mile walking distance of either a high-quality transit corridor as defined in subdivision (b) of Section 21155 of the Public Resources Code, or a major transit stop as defined in Section 21064.3 of the Public Resources Code.
(B) There is a car share vehicle located within one block of the parcel. (f) A local agency shall require that the uses allowed on a lot created by this section be limited to residential uses.
(g) (1) A local agency shall require an applicant for an urban lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban lot split.
(2) This subdivision shall not apply to an applicant that is a “community land trust,” as defined in clause (ii) of subparagraph (C) of paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code, or is a “qualified nonprofit corporation” as described in Section 214.15 of the Revenue and Taxation Code. (3) A local agency shall not impose additional owner occupancy standards, other than provided for in this subdivision, on an urban lot split pursuant to this section. (h) A local agency shall require that a rental of any unit created pursuant to this section be for a term longer than 30 days.
(i) A local agency shall not require, as a condition for ministerial approval of a parcel map application for the creation of an urban lot split, the correction of nonconforming zoning conditions. (j) (1) Notwithstanding any provision of Section 65852.2, 65852.21, 65852.22, 65915, or this section, a local agency shall not be required to permit more than two units on a parcel created through the exercise of the authority contained within this section.
(2) For the purposes of this section, “unit” means any dwelling unit, including, but not limited to, a unit or units created pursuant to Section 65852.21, a primary dwelling, an accessory dwelling unit as defined in Section 65852.2, or a junior accessory dwelling unit as defined in Section 65852.22. (k) Notwithstanding paragraph (3) of subdivision (c), an application shall not be rejected solely because it proposes adjacent or connected structures provided that the structures meet building code safety standards and are sufficient to allow separate conveyance.
(l) Local agencies shall include the number of applications for parcel maps for urban lot splits pursuant to this section in the annual housing element report as required by subparagraph (I) of paragraph (2) of subdivision (a) of Section 65400.
(m) For purposes of this section, both of the following shall apply:
(1) “Objective zoning standards,” “objective subdivision standards,” and “objective design review standards” mean standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official prior to submittal. These standards may be embodied in alternative objective land use specifications adopted by a local agency, and may include, but are not limited to, housing overlay zones, specific plans, inclusionary zoning ordinances, and density bonus ordinances. (2) “Local agency” means a city, county, or city and county, whether general law or chartered. (n) A local agency may adopt an ordinance to implement the provisions of this section. An ordinance adopted to implement this section shall not be considered a project under Division 13 (commencing with Section 21000) of the Public Resources Code.
(o) Nothing in this section shall be construed to supersede or in any way alter or lessen the effect or application of the California Coastal Act of 1976 (Division 20 (commencing with Section 30000) of the Public Resources Code), except that the local agency shall not be required to hold public hearings for coastal development permit applications for urban lot splits pursuant to this section.

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4/21/22, 12:17 PM Bill Text - SB-9 Housing development: approvals. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB9 7/8 SEC. 3. Section 66452.6 of the Government Code is amended to read:
66452.6. (a) (1) An approved or conditionally approved tentative map shall expire 24 months after its approval or conditional approval, or after any additional period of time as may be prescribed by local ordinance, not to exceed an additional 24 months. However, if the subdivider is required to expend two hundred thirty-six thousand seven hundred ninety dollars ($236,790) or more to construct, improve, or finance the construction or improvement of public improvements outside the property boundaries of the tentative map, excluding improvements of public rights-of-way that abut the boundary of the property to be subdivided and that are reasonably related to the development of that property, each filing of a final map authorized by Section 66456.1 shall extend the expiration of the approved or conditionally approved tentative map by 48 months from the date of its expiration, as provided in this section, or the date of the previously filed final map, whichever is later. The extensions shall not extend the tentative map more than 10 years from its approval or conditional approval.

However, a tentative map on property subject to a development agreement authorized by Article 2.5 (commencing with Section 65864) of Chapter 4 of Division 1 may be extended for the period of time provided for in the agreement, but not beyond the duration of the agreement. The number of phased final maps that may be filed shall be determined by the advisory agency at the time of the approval or conditional approval of the tentative map.
(2) Commencing January 1, 2012, and each calendar year thereafter, the amount of two hundred thirty-six thousand seven hundred ninety dollars ($236,790) shall be annually increased by operation of law according to the adjustment for inflation set forth in the statewide cost index for class B construction, as determined by the State Allocation Board at its January meeting. The effective date of each annual adjustment shall be March 1.

The adjusted amount shall apply to tentative and vesting tentative maps whose applications were received after the effective date of the adjustment.
(3) “Public improvements,” as used in this subdivision, include traffic controls, streets, roads, highways, freeways, bridges, overcrossings, street interchanges, flood control or storm drain facilities, sewer facilities, water facilities, and lighting facilities.
(b) (1) The period of time specified in subdivision (a), including any extension thereof granted pursuant to subdivision (e), shall not include any period of time during which a development moratorium, imposed after approval of the tentative map, is in existence. However, the length of the moratorium shall not exceed five years. (2) The length of time specified in paragraph (1) shall be extended for up to three years, but in no event beyond January 1, 1992, during the pendency of any lawsuit in which the subdivider asserts, and the local agency that approved or conditionally approved the tentative map denies, the existence or application of a development moratorium to the tentative map.
(3) Once a development moratorium is terminated, the map shall be valid for the same period of time as was left to run on the map at the time that the moratorium was imposed. However, if the remaining time is less than 120 days, the map shall be valid for 120 days following the termination of the moratorium. (c) The period of time specified in subdivision (a), including any extension thereof granted pursuant to subdivision (e), shall not include the period of time during which a lawsuit involving the approval or conditional approval of the tentative map is or was pending in a court of competent jurisdiction, if the stay of the time period is approved by the local agency pursuant to this section. After service of the initial petition or complaint in the lawsuit upon the local agency, the subdivider may apply to the local agency for a stay pursuant to the local agency’s adopted procedures. Within 40 days after receiving the application, the local agency shall either stay the time period for up to five years or deny the requested stay. The local agency may, by ordinance, establish procedures for reviewing the requests, including, but not limited to, notice and hearing requirements, appeal procedures, and other administrative requirements.
(d) The expiration of the approved or conditionally approved tentative map shall terminate all proceedings and no final map or parcel map of all or any portion of the real property included within the tentative map shall be filed with the legislative body without first processing a new tentative map. Once a timely filing is made, subsequent actions of the local agency, including, but not limited to, processing, approving, and recording, may lawfully occur after the date of expiration of the tentative map. Delivery to the county surveyor or city engineer shall be deemed a timely filing for purposes of this section. (e) Upon application of the subdivider filed before the expiration of the approved or conditionally approved tentative map, the time at which the map expires pursuant to subdivision (a) may be extended by the legislative body or by an advisory agency authorized to approve or conditionally approve tentative maps for a period or

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4/21/22, 12:17 PM Bill Text - SB-9 Housing development: approvals. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB9 8/8 periods not exceeding a total of six years. The period of extension specified in this subdivision shall be in addition to the period of time provided by subdivision (a). Before the expiration of an approved or conditionally approved tentative map, upon an application by the subdivider to extend that map, the map shall automatically be extended for 60 days or until the application for the extension is approved, conditionally approved, or denied, whichever occurs first. If the advisory agency denies a subdivider’s application for an extension, the subdivider may appeal to the legislative body within 15 days after the advisory agency has denied the extension. (f) For purposes of this section, a development moratorium includes a water or sewer moratorium, or a water and sewer moratorium, as well as other actions of public agencies that regulate land use, development, or the provision of services to the land, including the public agency with the authority to approve or conditionally approve the tentative map, which thereafter prevents, prohibits, or delays the approval of a final or parcel map.

A development moratorium shall also be deemed to exist for purposes of this section for any period of time during which a condition imposed by the city or county could not be satisfied because of either of the following:
(1) The condition was one that, by its nature, necessitated action by the city or county, and the city or county either did not take the necessary action or by its own action or inaction was prevented or delayed in taking the necessary action before expiration of the tentative map. (2) The condition necessitates acquisition of real property or any interest in real property from a public agency, other than the city or county that approved or conditionally approved the tentative map, and that other public agency fails or refuses to convey the property interest necessary to satisfy the condition. However, nothing in this subdivision shall be construed to require any public agency to convey any interest in real property owned by it. A development moratorium specified in this paragraph shall be deemed to have been imposed either on the date of approval or conditional approval of the tentative map, if evidence was included in the public record that the public agency that owns or controls the real property or any interest therein may refuse to convey that property or interest, or on the date that the public agency that owns or controls the real property or any interest therein receives an offer by the subdivider to purchase that property or interest for fair market value, whichever is later. A development moratorium specified in this paragraph shall extend the tentative map up to the maximum period as set forth in subdivision (b), but not later than January 1, 1992, so long as the public agency that owns or controls the real property or any interest therein fails or refuses to convey the necessary property interest, regardless of the reason for the failure or refusal, except that the development moratorium shall be deemed to terminate 60 days after the public agency has officially made, and communicated to the subdivider, a written offer or commitment binding on the agency to convey the necessary property interest for a fair market value, paid in a reasonable time and manner.

SEC. 4. The Legislature finds and declares that ensuring access to affordable housing is a matter of statewide concern and not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution.

Therefore, Sections 1 and 2 of this act adding Sections 65852.21 and 66411.7 to the Government Code and Section 3 of this act amending Section 66452.6 of the Government Code apply to all cities, including charter cities.

SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

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Item 11.b.

MEMORANDUM
TO: City Council
FROM: Brian Pedrotti, Community Development Director
BY: Andrew Perez, Acting Planning Manager
SUBJECT: Study Session for City Council to Provide Direction on a New Ordinance to Implement Senate Bill 9
DATE: March 22, 2022
SUMMARY OF ACTION:

The purpose of this item is to give the City Council an opportunity to obtain public comment, discuss the implications of Senate Bill 9 (SB 9), and provide direction regarding an ordinance addressing SB 9.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

No financial impact is projected with the study session. Staff time from both the Community Development Department and City Attorney will be required to draft the ordinance.

RECOMMENDATION:

Receive public comment, discuss the implications of SB 9, and provide direction to staff.

BACKGROUND:

SB 9 was signed by Governor Newsom on September 16, 2021, and became effective January 1, 2022 (Attachment 1). This bill is intended to streamline housing development by requiring a proposed housing development containing no more than two residential units within a single-family residential zone to be considered ministerially, without discretionary review or hearing, if the proposed housing development meets certain requirements. SB 9 also requires a local agency to ministerially approve a parcel map for an urban lot split in a single-family residential zone if it meets certain requirements, including minimum lot size requirements and certain objective standards. Cities may deny an SB 9 project or subdivision that otherwise meets the requirements of SB 9 only if the Building Official determines it will result in a specific, adverse impact on health and safety and there is no feasible way to mitigate the impact.

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ATTACHMENT 3

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Item 11.b.

City Council
Study Session for City Council to Provide Direction on a New Ordinance to Implement Senate Bill 9
March 22, 2022

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ANALYSIS OF ISSUES:

SB 9 can be broken into two primary components: 1) provisions that allow subdivisions of a single-family zoned lot into two lots (“subdivisions”); and 2) provisions that allow construction of two units on a single-family zoned property (“two-unit projects”). These provisions can be used in concert, so that an applicant could subdivide an existing parcel and build two units on each parcel.

Qualifying Properties
As proposed in the draft ordinance, SB 9 applies to parcels located in the Single-Family zoning district. The Residential Estate, Residential Hillside, Residential Rural, Residential Suburban, Village Residential zones, and the Planned Development districts all allow single-family residences as an allowed use, however, based on staff’s interpretation and guidance from the City Attorney, the City is only required to allow the provisions of SB 9 on Single Family zoned parcels. Limiting subdivisions and two-unit projects proposed pursuant to SB 9 to only the Single Family zoning district may alleviate impacts associated with unplanned density, including traffic generation, water use, and parking. This interpretation is also being followed by the County of San Luis Obispo.

Regardless of zoning, properties are excluded from using SB 9 for two-unit projects and/or subdivisions if they are located in any of the following areas:
 Prime farmlands or farmlands of statewide importance, or farmlands protected by a local ordinance
 Wetlands, as defined in the United States Fish and Wildlife Service Manual  Within a very high fire hazard severity zone
 A hazardous waste site
 Within a delineated earthquake fault zone, unless the project is designed to meet building code requirements for building within such zone  Within a special flood hazard area or regulatory floodway, unless certain requirements are met
 Lands identified for conservation in an adopted conservation plan or under a conservation easement
 Habitat for protected species
 Within a historic district or on a site that is designated as historic As indicated, SB 9 does not apply to parcels located “within a historic district or property included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code.” Under Public Resources Code Section 5020.1, “Historic district” means “a definable unified geographic entity that possesses a significant concentration, linkage, or continuity of sites, buildings, structures, or objects united historically or aesthetically by plan or physical development.” Studies were conducted by the City that confirms the HCO district (D-2.4) possesses a high concentration of historically relevant

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Item 11.b.

City Council
Study Session for City Council to Provide Direction on a New Ordinance to Implement Senate Bill 9
March 22, 2022

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sites and structures which supported creation of the Historic Character Overlay (HCO) Therefore, parcels in the overlay district would be ineligible for purposes of SB 9.

Prime farmland and farmlands of statewide importance are present within the City, most of which is found near Fair Oaks Avenue between Woodland Drive and Highway 101 and in the areas near Branch Mill Road. None of these sites have a single family zoning designation, so they would be ineligible for SB 9 projects regardless of their status as prime farmland. There are several parcels adjacent to Arroyo Grande and Corbett Canyon Creeks that are within a special flood hazard area and/or a regulatory floodway. A no-rise certification, prepared in accordance with Federal Emergency Management Agency guidelines, allows for development on a site within the floodway, and therefore would make these parcels eligible for SB 9 projects. No very high fire severity zones or hazardous waste sites located within City limits.

A property can only be subdivided pursuant to SB 9 once. SB 9 also precludes the same applicant, or someone working in concert with the applicant, from subdividing adjacent properties. SB 9 does not override covenants, conditions, and restrictions (CC&Rs) or other private governing documents for homeowner’s associations (HOA) or commoninterest developments, meaning these developments may impose further restrictions on subdivision of parcels and two-unit developments. The City would process an SB 9 application, but because the City is not a party to private governing documents, enforcement of such documents is left to the HOA.

Urban Lot Splits
Lot splits proposed under the provisions of SB 9 are referred to as Urban Lot Splits (ULS).

A parcel map for an ULS shall be approved ministerially, without discretionary review.

Parcels developed with affordable housing, or residential units that have been occupied by a tenant within three (3) years of the ULS application may not be split if the application proposes to alter or demolish the residential units.

Under the subdivision provisions of SB 9, the City must also allow a single-family zoned property to be subdivided into two roughly proportional lots. To ensure rough proportionality, SB 9 specifies that one lot cannot be less than 40 percent the size of the other. The bill also establishes a minimum lot size of 1,200 square feet for lots created through an urban lot split. Provisions of SB 9 include the following allowances and restrictions on subdivisions:
 Cannot require dedication of right-of-way or construction of off-site improvements (such as installation of a sidewalk where there is none);  May require that parcels have access to a public right-of-way;  May require easements for the provision of public services and facilities; and  Must require the applicant to sign an affidavit stating that the applicant intends to live on one of the properties as their primary residence for at least three years after

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Item 11.b.

City Council
Study Session for City Council to Provide Direction on a New Ordinance to Implement Senate Bill 9
March 22, 2022

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the date of the subdivision. This requirement does not apply to an urban land trust or qualified non-profit.

Units built on lots created through an ULS are reserved for residential uses, may not be permitted for short term rentals, and requires owner occupancy for at least three years from the date of the approval of the ULS. The owner affidavit will be required to include a clause prohibiting short term rentals in these units. Jurisdictions may not require correction of non-conforming zoning conditions, dedication of rights-of-way, or construction of public improvements as a condition of approving an ULS.

Two-unit Development
A housing development consisting of two residential units within a single-family residential zone shall also be considered ministerially, without discretionary review or hearing if the developed pursuant to the provisions in SB 9. A two-unit development may include the construction of two new units, or the addition of a new unit to a property already developed with a single-family dwelling. A two-unit development would be subject to the following requirements, among others:
 The proposed housing development would not require demolition or alteration of housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income;  The proposed housing development would not require demolition or alteration of housing that has been occupied by a tenant in the last three years;  The proposed housing development does not allow for the demolition of more than 25% of the existing exterior structural walls of an existing residential unit on the property unless the site has not been occupied by a tenant in the last three years; and
 The development is not located within a historic district, is not included on the State Historic Resources Inventory, or is not within a site that is legally designated or listed as a city or county landmark or historic property or district.

When an application for a two-unit development is submitted that proposes the demolition of an existing unit, staff will confirm the subject parcel complies with the State mandated requirements listed above. Staff maintains a database of deed-restricted affordable housing units that will be referenced to verify an affordable unit is not proposed for demolition. Furthermore, staff can obtain water billing information to verify whether a unit has been rented in the previous three years.

The City may apply objective development standards, but those standards cannot preclude construction of at least two units of 800 square feet in size each. Objective standards are standards that involve no exercise in judgment to apply, such as numeric setback requirements.

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Item 11.b.

City Council
Study Session for City Council to Provide Direction on a New Ordinance to Implement Senate Bill 9
March 22, 2022

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SB 9 includes the following mandatory development standards:
 Cannot require more than four-foot side and rear setbacks for SB 9 developments;  Cannot require more than one parking space per unit. Cannot require any parking for projects within a half-mile walking distance of high-quality transit or major transit stops, as defined by state law, or if there is a car share vehicle located within one block;
 Must allow construction of attached units; however, attached units must be designed to meet all requirements for selling each unit individually;  No setback can be required for existing structures, and  The City shall not require the correction of non-conforming zoning conditions on a property as a condition of approval of a project or deny a project due to existing non-conformities.

A high-quality transit stop is defined as a stop on a fixed route bus service with service intervals no longer than 15 minutes during peak commute hours. The bus routes serving Arroyo Grande all have service intervals exceeding 15 minutes, therefore the parking exemption described above is not applicable to future SB 9 projects in the City unless bus service changes to meet the state definitions. Beyond the mandatory development standards, the City may incorporate standards for floor-area ratios, height, lot coverage, and building separation, among others. Just as with units that are constructed on parcels created through a ULS, two-unit developments may not be rented for terms of less than 30 days and so cannot be used as vacation rentals.

Accessory Dwelling Units
ADUs are allowed with SB 9 projects; however, SB 9 states that an agency shall not be required to permit more than two units on a parcel created by an ULS. In addition, SB 9 states that the City is not required to permit an ADU on parcels that propose both a twounit residential development and an ULS. Staff recommends that ADUs not be allowed on parcels created through an ULS. Staff also recommends restricting ADUs and JADUs to two-unit developments as allowed under SB 9. As a result of this recommendation, for each primary unit allowed, an ADU or JADU would be allowed, but no ADUs would be allowed on new parcels created through a ULS. Objective design standards may apply to ADUs as well as two-unit developments.

Actions to Implement SB 9
Adoption of an ordinance is recommended because it allows the City to implement objective design standards that would maintain the character of single-family neighborhoods despite the added density. As previously mentioned, objective development standards can address a numerous aspects of a development. These standards can regulate specific standards such as height and lot coverage, aesthetics through architectural design, and function, such as street access. Staff has developed the following conceptual standards as a starting point for this discussion:

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Item 11.b.

City Council
Study Session for City Council to Provide Direction on a New Ordinance to Implement Senate Bill 9
March 22, 2022

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 Massing and Articulation
o Maximum unit size of 1,200 square feet
o Building Separation: detached dwelling units shall have a minimum of 10 feet of separation whether the units are on one lot or adjacent lots. o Height: 16-foot maximum
 Colors and Materials
o The primary cladding shall be stone, brick, fiber cement, composite wood or stone, or other cementitious material. Plywood, such as T1-11 siding, is prohibited.
o Color schemes shall consist of one primary color and one secondary color, at a minimum. The roof color shall not be considered a color for purposes of this standard.
 Parking and Circulation
o Parking shall not be located between a structure and a public sidewalk o All parking areas shall be internally connected and shall use shared driveways
 Utility and Service Areas
o All new dwelling units must connect to City utilities. o Areas for the storage of trash, recycling, and green waste receptacles shall not be visible from the public right of way.
o All mechanical equipment shall be either screened or hidden from view from the public street.

Beyond adopting an ordinance, other issues must be addressed to successfully implement the provisions of SB 9. Those issues include development of a new application and review process for SB 9 projects, establishing a fee for the review of these projects, development of the objective design standards, and monitoring and enforcement of the owner-occupancy requirement.

Prior to January 1, 2022, a property owner pursuing a lot split would submit an application for a Tentative Parcel Map at a fee of $9,537. An application for a parcel map may create of up to four lots, and the fee accounts for staff time to process the permit, including public hearings at Planning Commission and City Council. Due to the mandatory ministerial approval of an ULS, staff anticipates the amount of work to process a ULS will be similar to the amount of staff time required to process an application for a Lot Line Adjustment (LLA). Staff work associated with a lot line adjustment is limited to confirming the proposal is consistent with the Subdivision Map Act, confirming the lot size requirements of the underlying zoning district, and making the findings of Arroyo Grande Municipal Code Section 16.20.140. The amount of staff time required to process a LLA is considerably less than what is required for a parcel map and that is reflected in a lesser fee of $3,326.

Currently, the Community Development Department does not have an application

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Item 11.b.

City Council
Study Session for City Council to Provide Direction on a New Ordinance to Implement Senate Bill 9
March 22, 2022

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specifically for ULS or two-unit development projects. A SB 9 specific application, and associated fee, will need to be created for these projects.

SB 9 does not allow the City to require dedication of rights-of-way or the construction of off-site improvements as a condition of approval for an ULS. The City may impose Arroyo Grande Municipal Code Chapter 16.68 requiring the undergrounding of utilities at the time of building permit issuance. Development impact fees, such as those for fire protection, police facilities, park improvements, and traffic signalization, and connection fees for water and wastewater may be collected with building permit fees for new residential units proposed with the provisions of SB 9.

Next Steps
Feedback obtained during the study session will be used to refine the draft ordinance.

Staff recommends that the Architectural Review Committee review the proposed objective design standards applicable to SB 9 projects. The ARC recommended objective design standards would be included in the draft ordinance to be reviewed by the Planning Commission. A recommendation for adoption from the Planning Commission will allow the ordinance to return to Council for introduction and adoption.

Environmental Review
Both two-unit projects and subdivisions authorized under SB 9 must be processed ministerially, meaning no public hearing and no review under the California Environmental Quality Act (CEQA). The adoption of an ordinance addressing SB 9 is likewise not subject to CEQA.

ALTERNATIVES:

The following alternatives are provided for the Council’s consideration:

1. Discuss the draft ordinance, received public comment, and provide direction to staff

2. Provide other direction to staff.

ADVANTAGES:

A study session providing direction to staff will result in an efficient development of the ordinance to implement SB 9.

DISADVANTAGES:

None identified.

ENVIRONMENTAL REVIEW:

The State law includes a provision that explicitly states that an ordinance to implement SB 9 (California Government Code Section 65852.21) shall not be considered a project under CEQA and, therefore, is not subject to environmental review.

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Item 11.b.

City Council
Study Session for City Council to Provide Direction on a New Ordinance to Implement Senate Bill 9
March 22, 2022

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PUBLIC NOTIFICATION AND COMMENTS:

The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2.

Attachments:

1. Draft Ordinance Implementing SB 9

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Sample Draft Ordinance – For Discussion Purposes
Section 16.32.060 Two-Unit Residential Development
A. Purpose and Intent.

1. It is the intent of these regulations to provide opportunities for two units on one legal parcel, consistent with state law and local regulations. In the event of an inconsistency between this Section and Government Code Section 65852.21, Government Code Section 65852.21 shall prevail. Provided that Government Code Sections 65852.21 or 66411.7 are not repealed, qualifying two-unit residential development in the Single Family zoning district shall be located, developed, and used in compliance with this Section.

2. In accordance with Government Code Section 65852.21(a)(2), two-unit residential development shall not be permitted under this Section in any of the following circumstances:
a. Parcels located in:
i. Wetlands;
ii. Either prime farmland or farmland of statewide importance, as defined pursuant to United States Department of Agriculture land inventory and monitoring criteria, as modified for California, and designated on the maps prepared by the Farmland Mapping and Monitoring Program of the Department of Conservation; iii. Very high fire severity zones, except if the site has adopted fire hazard mitigation measures pursuant to existing building standards or state fire mitigation measures applicable to the development;
iv. A hazardous waste site, unless the site has been cleared by the State for residential use;
v. Delineated earthquake fault zones, unless the development complies with applicable seismic protection building code standards;
vi. Special flood hazard areas (100-year flood zones), unless the site has been subject to a FEMA Letter of Map Revision issued to the City or the site meets FEMA requirement necessary to meet minimum flood plain management criteria of the National Flood Insurance Program;
vii. A regulatory flood way identified in a FEMA map, unless the development has received a no-rise certification;
viii. Lands identified for conservation in an adopted natural resource protection plan, habitat for protected species, or under a conservation easement; and ix. A historic district or property designated pursuant to a local ordinance or included on the State Historic Resources Inventory.

ATTACHMENT 1

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b. The proposed development would require demolition or alteration of any of the following types of housing:
i. Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to moderate, low, or very low incomes;
ii. A unit that has been occupied by a tenant within the past three years; and iii. A rent controlled unit.
c. The proposed development would result in the demolition of more than 25 percent of the existing exterior structural walls, unless the site has not been occupied by a tenant in the last three years.
d. The building official finds that the proposed development would have a specific, adverse impact on public health and safety or the physical environment that cannot be feasibly mitigated or avoided, as defined and determined in paragraph (2) of subdivision (d) of Government Code Section 65589.5.

B. Restrictions.

A qualifying two-unit residential project shall be subject to the following restrictions:

1. The development and use of the dwelling units shall only be valid and permitted based on the terms established in the Section.

Item #1 – SB 9 mandates that the ordinance allow at least two units on all eligible parcels.

Some discretion is permitted as to how those two units can be achieved. At a minimum, the ordinance must allow either a duplex, or one new unit constructed in addition to an existing unit.

C. Unit Configurations
The new unit in a two-residential unit development may be permitted in the following configurations, provided that no more than two attached residential units are in any one building on a lot. For the purpose of this section, “unit” means any dwelling unit, including, but not limited to, two-unit residential development, additional residential unit, primary residential unit, accessory dwelling unit, or junior accessory dwelling unit.

1. One new unit incorporated entirely within an existing residential unit.

2. One new unit incorporated entirely within an existing accessory building, including garages.

3. One new unit attached to and increasing the size of an existing residential unit or an existing accessory building.

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5. Two newly constructed attached units (duplex) or two detached residential units on a vacant lot.

D. Parking.

1. Pursuant to Government Code Section 65852.21(c), one off-street parking space is required per dwelling unit, unless the parcel is located within one-half mile of a highquality transit corridor as defined in subdivision (b) of Section 21155 of the Public Resources Code or a major transit stop as defined in Section 21064.3 of the Public Resources Code or there is a car share vehicle located within one block of the parcel.

2. The location of the required parking space(s) shall not obstruct the required parking of each Dwelling Unit.

3. The parking facilities shall comply with Section 16.56.070.

4. Required parking spaces for separate dwelling units shall not be provided in a tandem configuration.

5. The required parking spaces must be covered.

E. Rear and Side Setbacks.

1. No setback shall be applied to existing structures or structures constructed in the same location and to the same dimensions as an existing structure.

2. For projects not meeting the requirements of subsection 1 above, a minimum four-foot setback shall be provided from side and rear lot lines.

Item #2 – A city may impose objective design standards.

Design Standards must allow at least two units of 800 square feet each. Objective design standards can regulate development aspects such as height, lot coverage, floor-area ratio, etc.

F. Objective Zoning and Design Standards for Two-Unit Residential Developments.

Government Code Section 65852.21 permits the imposition of objective zoning standards and objective design standards, provided the standards do not physically preclude the construction

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of up to two units of at least 800 square feet. Accordingly, the follow objective standards shall apply to two-unit residential development projects

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1. Massing and Articulation
a. Maximum size of a unit is 1,200 square feet.
b. Building Separation: detached dwelling units shall have a minimum of 10 feet of separation whether the units are on one lot or adjacent lots. c. Height: Units are subject to a 16-foot height limit

2. Colors and Materials
a. The primary cladding shall be stone, brick, fiber cement, composite wood or stone, or other cementitious material. Plywood, such as T1-11 siding, is prohibited. b. Color schemes shall consist of one primary color and one secondary color, at a minimum. The roof color shall not be considered a color for purposes of this standard

3. Parking and Circulation
a. Parking shall not be located between a structure and a public sidewalk b. All parking areas shall be internally connected and shall use shared driveways

4. Utility and Service Areas
a. All new dwelling units must connect to City utilities. b. Areas for the storage of trash, recycling, and green waste receptacles shall not be visible from the public right of way.
c. All mechanical equipment shall be either screened or hidden from view from the public street
Ministerial Approval of Two-Unit Residential Development Projects.

2. In addition to obtaining planning approval for the two-unit residential development project, the applicant shall be required to obtain a building permit, and other applicable construction permit requirements prior to the construction of the dwelling units.

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Sample Draft Ordinance – For Discussion Purposes
Section 16.20.180 Parcel Maps for Urban Lot Spits
A. Purpose and Scope

1. This Section implements Government Code section 66411.7 to provide an owner of property in the Single Family zoning district an additional method to subdivide the parcel for the purpose of housing development.

Item #1 – SB 9 applies to parcels zoned for “single-family residential.” Determination about whether the proposed ordinances for two-unit developments should apply to all single family zones, or specifically the Single Family zoning district.

2. Urban lot split means the subdivision of an existing legal parcel in the Single Family zoning district to create no more than two new parcels.

B. Application and Approval

3. The City Engineer is the approval authority for parcel maps under this Section. The City Engineer shall approve a parcel map for an urban lot split if the Engineer determines that it meets all of the requirements of this Section.

C. The following supplemental information is required to be submitted with a parcel map to establish compliance with the construction plans and all provisions of this Code and applicable State law:

1. A map of appropriate size and to scale showing all of the following:
a. Total area (in acreage and square feet) of each proposed lot. b. Location and dimensions of existing and proposed property lines; c. Zoning District;
d. The location and use of all existing and proposed structures; e. All required zoning setbacks for the existing and proposed lots; f. The location of all existing water, sewer, electricity, storm drain, or gas service lines, pipes, systems, or easements;

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g. The location of all proposed new water, sewer, storm drain, lines, pipes, or systems; h. The location of any proposed easements for access or public utilities to serve a lot created by the subdivision;
i. The location of any existing trees larger than four inches in diameter measured four feet six inches above the base and any such trees proposed for removal; j. Any area of the parcel that has a slope of 25% or greater by way of contours at 5- foot intervals;
l. Name and dimensions, including right-of-way and improved area, of public and private streets or public alleys adjoining the parcel;
m. Curb, gutter, sidewalk, parkway, and street trees: type, location, and dimensions; n. Location of existing or proposed driveway dimensions, materials, and slope (including cross slope); and
o. Location of existing or proposed pedestrian pathway access to the public right of way.

2. A statement of the owner, signed under penalty of perjury under the laws of California, that:
a. The proposed urban lot split would not require or authorize demolition or alteration of any of the following types of housing:
(i) Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income.
(ii) Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power.
(iii) A parcel or parcels on which an owner of residential real property has exercised the owner’s rights under Section 12.75 (commencing with Section 7060) of Division 7 of Title 1 of the Government Code to withdraw accommodations from rent or lease within 15 years before the date that the development proponent submits an application.
(iv) Housing that has been occupied by a tenant in the last three years. b. The parcel has not been established through prior exercise of an urban lot split under this Section;
c. Neither the owner of the parcel being subdivided nor any person acting in concert with the owner has previously subdivided an adjacent parcel under the provisions of this Section.
d. The owner intends to occupy one of the housing units located on a lot created by the parcel map as their principal residence for a minimum of three years from the date of the recording of the parcel map.

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e. Rental terms of any unit created by the subdivision shall not be less than 31 consecutive days, nor shall rental terms allow termination of the tenancy prior to the expiration of at least one thirty-one (31) day period of occupancy by the same tenant. f. The uses allowed on a lot created by the parcel map shall be limited to residential uses.

D. Design and Improvement Requirements
Item #2 – A city may impose objective design standards for lots created by this ordinance.

Design Standards must allow at least two units of 800 square feet each. Objective design standards can regulate development aspects such as lot access, size, easements, etc.

2. Each parcel must be served by a separate water service meter and a separate sewer connection.

3. Each parcel shall either drain a developed drainage easement or in accordance with the City’s Standard Specification and Engineering Standards.

4. Rights-of-way as required for access along all natural watercourses as necessary for flood control, maintenance, and improvement shall be dedicated.

5. The parcel must satisfy the requirements of Government Code section 66411.7(a).

6. A lot line shall not bisect or be located within 4 feet of any of the following:
a. A dwelling that has been occupied by a tenant at any time during the three years before the date of the parcel map;
b. A structure designated as a historic structure or a candidate structure under any City ordinance or included on the State Historic Resources Inventory; c. A dwelling that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income.
d. Existing easements if the resulting lot would create a developable area that would interfere with the use of the easement for its intended purpose.

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measured at the midpoint of the front lot line. Lot width shall be measured by a line connecting two points on opposite interior lot lines that will result in a line parallel to the front lot line.
c. New lot lines must be straight lines, unless there is a conflict with existing improvements or the natural environment in which case the line may be not be straight but shall follow the appropriate course.
d. Lot lines facing a street shall generally be parallel to the street. Unless the minimum public street frontage is provided, the lot line dividing the two parcels must be parallel to and not less than 50 feet from an existing front lot line, or outside the front half of the existing lot, whichever is greater.
e. Interior lot lines not facing the street shall be at right angles perpendicular to the street on straight streets, or radial to the street on curved streets. f. Lot lines shall be located within appropriate physical locations such as the top of creek banks, at appropriate topographical changes (top or bottom of slopes etc.) or at locations which clearly separate existing and proposed land uses. g. Lot lines shall be contiguous with existing zoning boundaries. h. The placement of lot lines shall not result in an accessory building or accessory use on a lot without a main building or primary use on the same lot, as defined in the Development Code.
i. Lot lines shall not render an existing structure as nonconforming in any respect (e.g., setbacks, Floor Area Ratio, parking), nor increase the nonconformity of an existing nonconforming structure.

E. Access Standards

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ii. The minimum length for a vehicle access easement is 20 feet. No maximum easement length shall be set. If easement length is more than 75 feet, a vehicle turnaround shall be provided.
iii. No residential structure shall be closer than 5 feet to the easement. c. Where a lot does not abut a public street, and where no automobile parking spaces are required or proposed for the residential development, a vehicle access easement is not required. An easement providing pedestrian access to a street from each lot shall be provided meeting the following standards:
i. Easement width shall be a minimum of five feet;
ii. Pedestrian access easements shall not exceed 200 feet in length.

2. Vehicle access easements shall not be located closer than 25 feet to an intersection.

3. Access and provisions for fire protection consistent with the California Fire Code shall be provided for all structures served by an access easement.

F. Map Requirements

1. The content and form of a parcel map shall meet all the requirements of Government Code sections 66444 – 66450.

2. The parcel map shall show all easements for public utilities necessary to serve each lot created by the subdivision.

3. The parcel map shall show all easements necessary to provide each lot with access to the public or private street or alley abutting the original parcel.

4. The parcel map shall contain a declaration that:
a. Each lot created by the parcel map shall be used solely for residential dwellings; b. That no more than two residential dwelling units may be permitted on each lot. As used in this subsection residential dwelling unit includes a unit created pursuant to Government Code section 65852.21, a primary dwelling unit, an accessory dwelling unit as defined in Government Code section 65852.2, or a junior accessory dwelling unit as defined in Government Code section 65852.22.
c. That rental of any dwelling unit on a lot created by the parcel map shall not be less than 31 consecutive days, nor shall rental terms allow termination of the tenancy prior to the expiration of at least one 31-day period occupancy by the same tenant.

G. Concurrent Processing With Other Ministerial Permits for Housing Development

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accessory dwelling units in this Code, or any other adopted objective design standards in effect at the time a complete application is submitted.

2. A building permit for development on an urban lot split cannot be issued until the parcel map is recorded.

H. Prohibition of Further Subdivision
A lot created by a parcel map under this Section shall not be further subdivided.

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5 None.

11. NEW BUSINESS
The Council heard Item 11.b. next.

Mayor Ray Russom called for a brief break at 8:55 p.m. The Council reconvened at 9:03 p.m. and returned to Item 11.a.

11.a Study Session Regarding Short Term Rentals (Vacation Rentals and Homestays) and Potential Revisions to the City’s Short Term Rental Ordinance City Attorney Carmel commented on the Fair Political Practices Commission's (FPPC) advice regarding the conflicts of interest for Mayor Ray Russom, Mayor Pro Tem George, Council Member Storton, and Council Member Barneich.

City Clerk Matson explained the process for randomly drawing straws to determine which two of the conflicted Council members may hear the item. Mayor Ray Russom, Mayor Pro Tem George, and Council Members Barneich and Storton drew straws. Mayor Ray Russom and Council Member Storton drew the short straws and remained in the meeting to hear the item.

Mayor Pro Tem George and Council Member Barneich left the meeting.

Community Development Director Pedrotti introduced the item and Assistant Planner Holub provided a presentation and responded to questions from Council.

Mayor Ray Russom invited public comment. Speaking from the public were John Keen, and Jim Guthrie. City Clerk Matson read into the record written comments received from Krista Jeffries.

No further public comments were received.

Council discussion ensued regarding staff recommendations.

At 10:52 p.m., Mayor Ray Russom stated that pursuant to Council policy, the Council must vote unanimously to continue the meeting past 11:00 p.m.

Mayor Ray Russom moved to continue the meeting to 11:10 p.m. Council Member Paulding seconded the motion, and the motion passed unanimously by voice vote.

Council directed staff to include a Short Term Rental buffer for homestays and vacation rentals; apply a cap of 120 vacation rentals; send the performance standards and parking standards sections of the Ordinance to Planning Commission for review; do not place approvals on a cancelled Planning Commission agenda; charge for mailing labels to notice neighbors; revoke permits if no Transient Occupancy Tax (TOT) is generated within a 12 month period; research a full service company to administer host compliance; add a section to the permit application where applicants can state they will provide contact information to neighbors each year; and create a process to notify the public regarding the number of current permits. Council also requested that staff bring back a discussion regarding administrative fines for violation of the Ordinance.

No action was taken on this item.

11.b Study Session for City Council to Provide Direction on a New Ordinance to Implement Senate Bill 9

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6 Acting Planning Manager Perez presented the staff report. Acting Planning Manager Perez, Community Development Director Pedrotti and City Manager McDonald responded to questions from Council.

Mayor Ray Russom invited public comment. Speaking from the public was Rachel Mann, John Keen, and Jim Guthrie. City Clerk Matson read into the record written comments from Krista Jeffries. No further public comments were received. City Attorney Carmel and City Manager McDonald responded to questions from the public.

Council expressed support for the proposed draft Ordinance and staff recommendations including the prohibition of short term rentals and requiring undergrounding of utilities. Council directed staff to provide clarification in Section D of the draft Ordinance regarding parking, to leave the height restriction for further discussion, and requested the addition of a disclaimer regarding abiding by individual CCRs.

No action was taken on this item.

Mayor Ray Russom called for a brief break at 8:55 p.m. The Council reconvened at 9:03 p.m. and returned to Item 11.a.

12. CITY COUNCIL REPORTS
The City Council provided brief reports from the following committee, commission, board, or other subcommittee meetings that they attended as the City’s appointed representative.

12.a MAYOR RAY RUSSOM:

1. California Joint Powers Insurance Authority (CJPIA)

2. South San Luis Obispo County Sanitation District (SSLOCSD)

3. Tourism Business Improvement District Advisory Board

4. Other

12.b MAYOR PRO TEM GEORGE:

1. County Water Resources Advisory Committee (WRAC)

2. Visit SLO CAL Advisory Board

3. Other

12.c COUNCIL MEMBER BARNEICH:

1. Audit Committee

2. Homeless Services Oversight Council (HSOC)

3. Zone 3 Water Advisory Board

4. Other

12.d COUNCIL MEMBER STORTON:

1. Brisco/Halcyon Interchange Subcommittee

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MEMORANDUM
TO: Planning Commission
FROM: Brian Pedrotti, Community Development Director
BY: Andrew Perez, Acting Planning Manager
SUBJECT: Consideration Of Development Code Amendment 21-002 To Implement Senate Bill 9; Location – Citywide
DATE: May 3, 2022
SUMMARY OF ACTION:

A recommendation to City Council to adopt an ordinance to implement Senate Bill 9 (SB 9).

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

No financial impact is projected.

RECOMMENDATION:

It is recommended that the Planning Commission adopt a Resolution recommending the City Council adopt amendments to the Municipal Code to implement the provisions of Senate Bill 9 (Attachment 1).

BACKGROUND:

SB 9 was signed by Governor Newsom on September 16, 2021, and became effective January 1, 2022 (Attachment 2). This bill is intended to streamline housing development by requiring a proposed housing development containing no more than two residential units within a single-family residential zone to be considered ministerially, without discretionary review or hearing, if the proposed housing development meets certain requirements. SB 9 also requires a local agency to ministerially approve a parcel map for an urban lot split in a single-family residential zone if it meets certain requirements, including minimum lot size requirements and certain objective standards. Cities may deny an SB 9 project or subdivision that otherwise meets the requirements of SB 9 only if the Building Official determines it will result in a specific, adverse impact on health and safety and there is no feasible way to mitigate the impact.

A study session at City Council was held on March 22, 2022 to provide a forum for community comments and discuss implications of SB 9 to aid staff in refining the draft

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ATTACHMENT 4

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ordinance. Council expressed concerns with the effects of the unplanned density associated with potential SB 9 development. To mitigate the concerns, Council directed staff to present the draft objective design standards to the Architectural Review Committee (ARC) for review and recommendation to the Planning Commission.

ANALYSIS OF ISSUES:

Qualifying Properties
Parcels located in any zoning district allowing single family residential uses are eligible for SB 9 development. This includes the Residential Estate, Residential Hillside, Residential Rural, Residential Suburban, Village Residential, Single-Family zones, and the Planned Development districts, which all allow single-family residences as an allowed use. In the draft ordinance presented to Council at the study session, only parcels in the Single Family zone would have been eligible for development under the SB 9 ordinance.

This was based on staff’s interpretation and guidance from the City Attorney. Subsequent to the study session, the California Department of Housing and Community Development released a SB 9 Fact Sheet with information about the legislation (Attachment 3). Based on the information in that document, the zoning districts eligible for SB 9 development has been broadened to include all zones that permit single family residential as an allowed use.

Regardless of zoning, properties are excluded from using SB 9 for two-unit projects and/or subdivisions if they are located in any of the following areas:
 Prime farmlands or farmlands of statewide importance, or farmlands protected by a local ordinance
 Wetlands, as defined in the United States Fish and Wildlife Service Manual  A hazardous waste site
 Lands identified for conservation in an adopted conservation plan or under a conservation easement
 Habitat for protected species
 Within a historic district or on a site that is designated as historic As indicated above, SB 9 does not apply to parcels located “within a historic district or property included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code.” Under Public Resources Code Section 5020.1, “Historic district” means “a definable unified geographic entity that possesses a significant concentration, linkage, or continuity of sites, buildings, structures, or objects united historically or aesthetically by plan or physical development.” Studies were conducted by

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the City that confirm the Historic Character Overlay District (D-2.4) possesses a high concentration of historically relevant sites and structures which supported creation of the district. Therefore, parcels in the overlay district would be ineligible for purposes of SB 9.

Three other areas are identified as conditionally excluded from SB 9. These areas include:
 Within a very high fire hazard severity zone
 Within a delineated earthquake fault zone, unless the project is designed to meet building code requirements for building within such zone  Within a special flood hazard area or regulatory floodway, unless certain requirements are met
SB 9 development is allowed in the areas listed above, but only when applicable building code and measures for hazard mitigation are met. For example, a property in the flood zone is required to provide a no-rise certification, prepared in accordance with Federal Emergency Management Agency guidelines, to indicate that the construction of a building will not increase flood hazards downstream. Certain building techniques and materials measures are required for SB 9 developments on properties in an earthquake or high fire zone.

Urban Lot Splits
Lot splits proposed under the provisions of SB 9 are referred to as Urban Lot Splits (ULS).

The legislation requires that a parcel map for an ULS shall be approved ministerially, without discretionary review. Parcels developed with affordable housing, or residential units that have been occupied by a tenant within three (3) years of the ULS application may not be split if the application proposes to alter or demolish the residential units.

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Units built on lots created through an ULS are reserved for residential uses, may not be permitted for short term rentals, and requires owner occupancy for at least three years from the date of the approval of the ULS. An owner affidavit will be required with the application for a ULS and in addition to the owner occupancy statement, must include a clause stating that a unit located on a lot created through an ULS will not be used as a short term rental.

Two-unit Development
A housing development consisting of two residential units within a single-family residential zone shall also be considered ministerially, without discretionary review or hearing if developed pursuant to the provisions in SB 9. A two-unit development may include the construction of two new units, or the addition of a new unit to a property already developed with a single-family dwelling. A two-unit development would be subject to the following requirements, among others:
 The proposed housing development would not require demolition or alteration of housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income;  The proposed housing development would not require demolition or alteration of housing that has been occupied by a tenant in the last three years;  The proposed housing development does not allow for the demolition of more than 25% of the existing exterior structural walls of an existing residential unit on the property unless the site has not been occupied by a tenant in the last three years; and
 The development is not located within a historic district, is not included on the State Historic Resources Inventory, or is not within a site that is legally designated or listed as a city or county landmark or historic property or district.

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Objective Design Standards
The City may adopt objective development standards for SB 9 projects, but those standards cannot preclude construction of at least two units of 800 square feet in size each. Objective standards are those standards that involve no exercise in judgement to apply, such as numeric setback requirements. These design standards can regulate specific standards such as unit size, height limits; aesthetics; and function.

SB 9 already includes the following mandatory development standards:
 Cannot require more than four-foot side and rear setbacks for SB 9 developments;  Cannot require more than one parking space per unit. Cannot require any parking for projects within a half-mile walking distance of high-quality transit or major transit stops, as defined by state law, or if there is a car share vehicle located within one block;
 Must allow construction of attached units; however, attached units must be designed to meet all requirements for selling each unit individually;  No setback can be required for existing structures, and  The City shall not require the correction of non-conforming zoning conditions on a property as a condition of approval of a project or deny a project due to existing non-conformities.

A high-quality transit stop is defined as a stop on a fixed route bus service with service intervals no longer than 15 minutes during peak commute hours. Every bus route serving Arroyo Grande has service intervals exceeding 15 minutes, therefore the parking exemption described above is not available for SB 9 projects in the City unless bus service changes to meet the state definitions. Beyond the mandatory development standards, the City may incorporate standards for floor-area ratios, height, lot coverage, and building separation, among others. Just as with units that are constructed on parcels created through a ULS, two-unit developments may not be short term rentals.

On April 18, 2022, the ARC reviewed the proposed objective design standards (Attachment 4). As a result of that meeting, standards for maximum unit size, height, rooftop decks, color, and materials were revised. The standards in the following bulleted lists below are included in the draft ordinance:

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 Massing and Articulation
o Maximum Unit Size: The total gross floor area of the unit(s), excluding garages, shall not exceed the floor-area ratios maximums found in Section

16.32.050.
o Building Separation: detached dwelling units shall have a minimum of 10 feet of separation whether the units are on one lot or adjacent lots. o Height: 16-foot maximum for portions of structures located within the setback of the underlying zoning district. The remainder of the structure located outside of the setbacks of the underlying zoning district shall conform to the height requirements of that district.
o Rooftop Decks shall be permitted in accordance with Section 16.48.180.

The ARC found the maximum unit size to be too restrictive for the larger single family lots, and was also concerned that the previously proposed maximum unit size of 1,200 square feet would discourage SB 9 development. Using the floor-area ratios already established in the Municipal Code was determined to be a solution that is both equitable and maintains neighborhood character. The floor-area ratios found in AGMC 16.32.050 are summarized in Table 1.

Table 1: Floor-Area Ratio Maximums
Lot Size Floor Area Ratio Maximum
0-4,000 sq. ft. 0.35
4,001-7,199 sq. ft. 0.40
7,200-11,999 sq. ft. 0.50
12,000-39,999 sq. ft. 0.45
Greater than 40,000 sq. ft.

At the study session, Council was undecided about whether the 16-foot height limit would be overly restrictive. To provide some flexibility, staff revised the height limitation so that the 16-foot height limit would only apply to the portion of structures built within the setbacks of the underlying zone. Portions of the structure that comply with the setbacks of the underlying district would be subject to the height limit of that district. The building separation standard is proposed to maximize privacy and outdoor space for inhabitants of SB 9 units. Initially, staff proposed a prohibition of rooftop decks, but the ARC felt that rooftop decks provide an opportunity for outdoor living space.  Colors and Materials
o The primary cladding shall be stone, brick, fiber cement, composite wood or stone, wood, stucco, or other cementitious material. Plywood, such as T1-11 siding, is prohibited.
o Color schemes shall consist of one primary color and at least one secondary color, at a minimum. The roof color shall not be considered a color for purposes of this standard.

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Standards for colors and materials are intended to ensure a minimal amount of aesthetic quality. The cladding materials are commonly found throughout the city, and prevent the use of less durable materials that would deteriorate over time and become unsightly.

Multiple colors are required to ensure more visual appeal than a simple, single color.  Parking and Circulation
o Parking areas shall not be located between a structure and a public sidewalk within the front setback, with the exception of permitted driveways.

When parking areas are located in the front yard, outside of the front setback, a landscape buffer of at least 10 feet between the sidewalk and parking area shall be provided.
o All parking areas serving more than one unit shall be internally connected and shall use shared driveways.

As many as four units can be developed on a single-family lot that was planned to accommodate just a single unit. One parking space is required per unit under SB 9, potentially creating the need for as many as four uncovered parking spaces on the original parcel. Arroyo Grande Municipal Code Section 16.56.030 already prohibits parking in a front setback, but makes an exception for parking spaces on a lawfully established driveway. The requirement to provide a landscape buffer is intended to prevent parking from dominating the most publicly visible area of a property. Shared driveways are a way to minimize the amount of paving on a property for both aesthetic and stormwater management purposes.
 Utility and Service Areas
o All new dwelling units must connect to City utilities in accordance with AGMC 13.12.060
o Areas for the storage of trash, recycling, and green waste receptacles shall not be visible from the public right of way.
o All mechanical equipment shall be either screened or hidden from view from the public street.

Requiring connection to City utilities (water and sewer) ensures that units developed under SB 9 will remain livable without relying on private water wells or septic systems, which have a finite lifespan. The standards applicable to service areas are intended to maintain neighborhood character through aesthetics.

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on parcels created through an ULS. Staff also recommends restricting ADUs and JADUs to two-unit developments as allowed under SB 9. As a result of this recommendation, for each primary unit allowed, an ADU or JADU would be allowed, but no ADUs would be allowed on new parcels created through a ULS. Objective design standards may apply to ADUs as well as two-unit developments.

Next Steps
A recommendation for adoption to the Planning Commission will allow the ordinance to return to Council for introduction and adoption.

ALTERNATIVES:

The following alternatives are provided for the Planning Commission’s consideration:

1. Adopt the Resolution, as prepared, recommending that the City Council adopt the ordinance to implement SB 9; or

2. Adopt the Resolution, as revised by the Planning Commission, recommending that the City Council adopt the ordinance to implement SB 9; or

3. Provide other direction to staff.

ADVANTAGES:

A recommendation to City Council to adopt an ordinance to implement SB 9 will allow the City to regulate development pursuant to the State legislation. The objective design standards contained in the draft ordinance will ensure orderly development of SB 9 projects that are consistent with the character of existing single-family neighborhoods.

DISADVANTAGES:

None identified.

ENVIRONMENTAL REVIEW:

PUBLIC NOTIFICATION AND COMMENTS:

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A notice of public hearing was published in the Tribune and posted at City Hall and on the City’s website on April 22, 2022. The meeting Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2.

Attachments:

1. Resolution

2. Senate Bill 9

3. HCD SB 9 Fact Sheet

4. Draft Minutes from the April 18, 2022 Regular Meeting

5. Draft Ordinance – Urban Lot Splits

6. Draft Ordinance – Two-Unit Residential Development

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ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE PLANNING COMMISSION OF

THE CITY OF ARROYO GRANDE RECOMMENDING THE

CITY COUNCIL ADOPT AN ORDINANCE APPROVING
DEVELOPMENT CODE AMENDMENT NO. 21-002 TO
IMPLEMENT SENATE BILL 9; LOCATION- CITYWIDE
WHEREAS, on September 16, 2021, the Governor signed into law Senate Bill (SB) 9 that, among other things, added Government Code Sections 65852.21 and 66411.7 and amended Government Code Section 66452.6 allowing additional housing units on properties within residential zoning districts; and
WHEREAS, SB 9 went into effect on January 1, 2022; and
WHEREAS, SB 9 allows a local jurisdiction to adopt an ordinance that provides ministerial approval of 1) no more than two housing units on a lot within a single-family residential zoning district; and 2) urban lot splits; and WHEREAS, SB 9 allows a local jurisdiction to adopt objective design, development, and subdivision standards for up to two housing units and urban lot splits; and WHEREAS, the proposed amendments to the Arroyo Grande Municipal Code (AGMC) implement the requirements of SB 9 and add local regulations that within the scope of the State law; and
WHEREAS, the City of Arroyo Grande has duly initiated amendments to AGMC; and WHEREAS, the Planning Commission of the City of Arroyo Grande, after giving notices thereof as required by law, held a public hearing on May 3, 2022 concerning this code amendment and carefully considered all pertinent testimony and the staff report offered in the case as presented; and
NOW, THEREFORE, BE IT RESOLVED that the Planning Commission of the City of Arroyo Grande hereby recommends the City Council adopt Ordinances approving Development Code Amendment 21-002 amending Title 16 of the Arroyo Grande Municipal Code as attached hereto as Exhibit “A” and incorporated herein by this reference.

On motion by Commissioner ________, seconded by Commissioner _______, and by the following roll call vote, to wit:

AYES:

NOES:

ABSENT:

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the foregoing Resolution was adopted this 3rd day of May, 2022.

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_______________________________

GLENN MARTIN
CHAIR
ATTEST:
_______________________________

PATRICK HOLUB

SECRETARY TO THE COMMISSION
AS TO CONTENT:
_______________________________

BRIAN PEDROTTI

COMMUNITY DEVELOPMENT DIRECTOR

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EXHIBIT ‘A’
WHEREAS, on September 16, 2021, the Governor signed into law Senate Bill (SB) 9 that, among other things, added Government Code Sections 65852.21 and 66411.7 and amended Government Code Section 66452.6 allowing additional housing units on properties within residential zoning districts; and
WHEREAS, SB 9 went into effect on January 1, 2022; and
WHEREAS, SB 9 allows a local jurisdiction to adopt an ordinance that provides ministerial approval of 1) no more than two housing units on a lot within a single-family residential zoning district; and 2) urban lot splits; and WHEREAS, SB 9 allows a local jurisdiction to adopt objective design, development, and subdivision standards for up to two housing units and urban lot splits; and WHEREAS, the proposed amendments to the Arroyo Grande Municipal Code (AGMC) implement the requirements of SB 9 and add local regulations that within the scope of the State law; and
WHEREAS, the City of Arroyo Grande has duly initiated amendments to AGMC; and WHEREAS, the Planning Commission of the City of Arroyo Grande, after giving notices thereof as required by law, held a public hearing on May 3, 2022 concerning this code amendment and carefully considered all pertinent testimony and the staff report offered in the case as presented; and
WHEREAS, on May 3, 2022, the Planning Commission of the Arroyo Grande recommended to the City Council adding Sections 16.20.180 and 16.32.060 to the Arroyo Grande Municipal Code; and
WHEREAS, the City Council of the City of Arroyo Grande has, after giving notice thereof as required by law, held a public hearing on __________, 2022, concerning the addition of AGMC Sections 16.20.180 and 16.32.060; and
WHEREAS, the City Council of the City of Arroyo Grande, at its regularly scheduled public meeting on __________, 2022 introduced this Ordinance to add Section

16.20.180 to Title 16, Chapter 20 and 16.32.060 to Title 16, Chapter 32 of the Arroyo Grande Municipal Code; and
WHEREAS, the City Council has carefully considered all pertinent testimony and the staff report, its attachments and all supporting materials referenced therein or offered in the matter as presented at the public hearing.

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NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DOES ORDAIN AS FOLLOWS:

SECTION 1. The above recitals and findings are true and correct and are incorporated herein by this reference.

SECTION 2. Section 16.20.180 is hereby added to Title 16, Chapter 20 of the Arroyo Grande Municipal Code to read as follows:

Section 16.20.180 Parcel Maps for Urban Lot Spits
A. Purpose and Scope

2. Urban lot split means the subdivision of an existing legal parcel in the Single Family zoning district to create no more than two new parcels.

B. Application and Approval

3. The City Engineer is the approval authority for parcel maps under this Section.

The City Engineer shall approve a parcel map for an urban lot split if the Engineer determines that it meets all of the requirements of this Section.

C. The following supplemental information is required to be submitted with a parcel map to establish compliance with the construction plans and all provisions of this Code and applicable State law:

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c. Zoning District;
d. The location and use of all existing and proposed structures; e. All required zoning setbacks for the existing and proposed lots; f. The location of all existing water, sewer, electricity, storm drain, or gas service lines, pipes, systems, or easements;
g. The location of all proposed new water, sewer, storm drain, lines, pipes, or systems;
h. The location of any proposed easements for access or public utilities to serve a lot created by the subdivision;
i. The location of any existing trees larger than four inches in diameter measured four feet six inches above the base and any such trees proposed for removal;
j. Any area of the parcel that has a slope of 25% or greater by way of contours at 5-foot intervals;
l. Name and dimensions, including right-of-way and improved area, of public and private streets or public alleys adjoining the parcel; m. Curb, gutter, sidewalk, parkway, and street trees: type, location, and dimensions;
n. Location of existing or proposed driveway dimensions, materials, and slope (including cross slope); and
o. Location of existing or proposed pedestrian pathway access to the public right of way.

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PAGE 7
accommodations from rent or lease within 15 years before the date that the development proponent submits an application.
(iv)Housing that has been occupied by a tenant in the last three years. b. The parcel has not been established through prior exercise of an urban lot split under this Section;
c. Neither the owner of the parcel being subdivided nor any person acting in concert with the owner has previously subdivided an adjacent parcel under the provisions of this Section.
d. The owner intends to occupy one of the housing units located on a lot created by the parcel map as their principal residence for a minimum of three years from the date of the recording of the parcel map. e. Rental terms of any unit created by the subdivision shall not be less than 31 consecutive days, nor shall rental terms allow termination of the tenancy prior to the expiration of at least one thirty-one (31) day period of occupancy by the same tenant.
f. The uses allowed on a lot created by the parcel map shall be limited to residential uses.

D. Design and Improvement Requirements

2. Each parcel must be served by a separate water service meter and a separate sewer connection.

3. Each parcel shall either drain a developed drainage easement or in accordance with the City’s Standard Specification and Engineering Standards.

4. Rights-of-way as required for access along all natural watercourses as necessary for flood control, maintenance, and improvement shall be dedicated.

5. The parcel must satisfy the requirements of Government Code section 66411.7(a).

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b. A structure designated as a historic structure or a candidate structure under any City ordinance or included on the State Historic Resources Inventory;
c. A dwelling that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income.
d. Existing easements if the resulting lot would create a developable area that would interfere with the use of the easement for its intended purpose.

7. The location and orientation of new lot lines shall meet the following standards:
a. Front lot lines shall conform to the minimum public street frontage requirements of the Development Code; a flag lot, or a lot with a narrow projecting strip of land extending along a street, is not permitted. b. Each parcel shall have approximately equal lot width and lot depth, consistent with the minimum lot sizes described in subsection D, above. Lot depth shall be measured at the midpoint of the front lot line. Lot width shall be measured by a line connecting two points on opposite interior lot lines that will result in a line parallel to the front lot line.
c. New lot lines must be straight lines, unless there is a conflict with existing improvements or the natural environment in which case the line may be not be straight but shall follow the appropriate course.
d. Lot lines facing a street shall generally be parallel to the street. Unless the minimum public street frontage is provided, the lot line dividing the two parcels must be parallel to and not less than 50 feet from an existing front lot line, or outside the front half of the existing lot, whichever is greater. e. Interior lot lines not facing the street shall be at right angles perpendicular to the street on straight streets, or radial to the street on curved streets. f. Lot lines shall be located within appropriate physical locations such as the top of creek banks, at appropriate topographical changes (top or bottom of slopes etc.) or at locations which clearly separate existing and proposed land uses.
g. Lot lines shall be contiguous with existing zoning boundaries. h. The placement of lot lines shall not result in an accessory building or accessory use on a lot without a main building or primary use on the same lot, as defined in the Development Code.

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i. Lot lines shall not render an existing structure as nonconforming in any respect (e.g., setbacks, Floor Area Ratio, parking), nor increase the nonconformity of an existing nonconforming structure.

E. Access Standards

1. Each lot shall front upon or have access to a public street, or be served by an access easement serving no more than two lots. Access shall be provided in compliance with these standards:
a. Vehicle access easements serving a maximum of two units shall meet the following standards:
i. Easement width shall be a minimum of 10 feet and a maximum of 16 feet, unless a wider driveway is required by the California Fire Code due to distance of the structure from the easement, or as needed to meet the driveway and parking standards in the City’s standards. ii. The minimum length for a vehicle access easement is 20 feet. No maximum easement length shall be set. If easement length is more than 75 feet, a vehicle turnaround shall be provided.
iii. No residential structure shall be closer than 3 feet to the easement. b. Vehicle access easements serving three to four units shall meet the following standards:
i. Easement width shall be a minimum of 20 feet.
ii. The minimum length for a vehicle access easement is 20 feet. No maximum easement length shall be set. If easement length is more than 75 feet, a vehicle turnaround shall be provided.
iii. No residential structure shall be closer than 5 feet to the easement. c. Where a lot does not abut a public street, and where no automobile parking spaces are required or proposed for the residential development, a vehicle access easement is not required. An easement providing pedestrian access to a street from each lot shall be provided meeting the following standards:
i. Easement width shall be a minimum of five feet;
ii. Pedestrian access easements shall not exceed 200 feet in length.

2. Vehicle access easements shall not be located closer than 25 feet to an intersection.

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3. Access and provisions for fire protection consistent with the California Fire Code shall be provided for all structures served by an access easement.

5. Lots taking access by an easement must record a shared maintenance agreement for the driveway. The agreement shall be recorded prior to or concurrently with the final map.

F. Map Requirements

1. The content and form of a parcel map shall meet all the requirements of Government Code sections 66444 – 66450.

2. The parcel map shall show all easements for public utilities necessary to serve each lot created by the subdivision.

3. The parcel map shall show all easements necessary to provide each lot with access to the public or private street or alley abutting the original parcel.

4. The parcel map shall contain a declaration that:
a. Each lot created by the parcel map shall be used solely for residential dwellings;
b. That no more than two residential dwelling units may be permitted on each lot. As used in this subsection residential dwelling unit includes a unit created pursuant to Government Code section 65852.21, a primary dwelling unit, an accessory dwelling unit as defined in Government Code section 65852.2, or a junior accessory dwelling unit as defined in Government Code section 65852.22.
c. That rental of any dwelling unit on a lot created by the parcel map shall not be less than 31 consecutive days, nor shall rental terms allow termination of the tenancy prior to the expiration of at least one 31-day period occupancy by the same tenant.

G. Concurrent Processing With Other Ministerial Permits for Housing Development

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other adopted objective design standards in effect at the time a complete application is submitted.

2. A building permit for development on an urban lot split cannot be issued until the parcel map is recorded.

H. Prohibition of Further Subdivision
A lot created by a parcel map under this Section shall not be further subdivided.

SECTION 3. Section 16.32.060 is hereby added to Title 16, Chapter 32 of the Arroyo Grande Municipal Code to read as follows:

Sample Draft Ordinance – For Discussion Purposes
Section 16.32.060 Two-Unit Residential Development
A. Purpose and Intent.

1. It is the intent of these regulations to provide opportunities for two units on one legal parcel, consistent with state law and local regulations. In the event of an inconsistency between this Section and Government Code Section 65852.21, Government Code Section 65852.21 shall prevail. Provided that Government Code Sections 65852.21 or 66411.7 are not repealed, qualifying two-unit residential development in the single family zoning districts shall be located, developed, and used in compliance with this Section.

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prepared by the Farmland Mapping and Monitoring Program of the Department of Conservation;
iii. Very high fire severity zones, except if the site has adopted fire hazard mitigation measures pursuant to existing building standards or state fire mitigation measures applicable to the development;
iv. A hazardous waste site, unless the site has been cleared by the State for residential use;
v. Delineated earthquake fault zones, unless the development complies with applicable seismic protection building code standards;
vi. Special flood hazard areas (100-year flood zones), unless the site has been subject to a FEMA Letter of Map Revision issued to the City or the site meets FEMA requirement necessary to meet minimum flood plain management criteria of the National Flood Insurance Program; vii. A regulatory flood way identified in a FEMA map, unless the development has received a no-rise certification;
viii. Lands identified for conservation in an adopted natural resource protection plan, habitat for protected species, or under a conservation easement; and
ix. A historic district or property designated pursuant to a local ordinance or included on the State Historic Resources Inventory.
b. The proposed development would require demolition or alteration of any of the following types of housing:
i. Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to moderate, low, or very low incomes;
ii. A unit that has been occupied by a tenant within the past three years; and iii. A rent controlled unit.
c. The proposed development would result in the demolition of more than 25 percent of the existing exterior structural walls, unless the site has not been occupied by a tenant in the last three years.
d. The building official finds that the proposed development would have a specific, adverse impact on public health and safety or the physical environment that cannot be

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feasibly mitigated or avoided, as defined and determined in paragraph (2) of subdivision (d) of Government Code Section 65589.5.

B. Restrictions.

A qualifying two-unit residential project shall be subject to the following restrictions:

1. The development and use of the dwelling units shall only be valid and permitted based on the terms established in the Section.

1. One new unit incorporated entirely within an existing residential unit.

2. One new unit incorporated entirely within an existing accessory building, including garages.

3. One new unit attached to and increasing the size of an existing residential unit or an existing accessory building.

5. Two newly constructed attached units (duplex) or two detached residential units on a vacant lot.

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D. Parking.

1. Pursuant to Government Code Section 65852.21(c), one off-street parking space is required per dwelling unit, unless the parcel is located within one-half mile of a high-quality transit corridor as defined in subdivision (b) of Section 21155 of the Public Resources Code or a major transit stop as defined in Section 21064.3 of the Public Resources Code or there is a car share vehicle located within one block of the parcel.

2. The location of the required parking space(s) shall not obstruct the required parking of each Dwelling Unit.

3. The parking facilities shall comply with Section 16.56.070.

4. Required parking spaces for separate dwelling units shall not be provided in a tandem configuration.

5. The required parking spaces must be covered.

E. Rear and Side Setbacks.

1. No setback shall be applied to existing structures or structures constructed in the same location and to the same dimensions as an existing structure.

2. For projects not meeting the requirements of subsection 1 above, a minimum four-foot setback shall be provided from side and rear lot lines.

F. Objective Zoning and Design Standards for Two-Unit Residential Developments.

Government Code Section 65852.21 permits the imposition of objective zoning standards and objective design standards, provided the standards do not physically preclude the construction of up to two units of at least 800 square feet. Accordingly, the follow objective standards shall apply to two-unit residential development projects:

1. Massing and Articulation
a. Maximum Unit Size: The total gross floor area of the unit(s), excluding garages, shall not exceed the floor-area ratios maximums found in Section 16.32.050 of this Title.

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b. Building Separation: detached dwelling units shall have a minimum of 10 feet of separation whether the units are on one lot or adjacent lots. c. Height: The maximum height shall be 16-feet for any structure, or portions thereof, located within the setback of the underlying zoning district.

Structures, or any portion thereof, located outside of the setbacks of the underlying zoning district shall conform to the height requirements of that district.
d. Rooftop decks shall be permitted in accordance with Section 16.48.180 of this Title.

2. Colors and Materials
a. The primary cladding shall be stone, brick, fiber cement, composite wood or stone, wood, stucco, or other cementitious material. Plywood, such as T1-11 siding, is prohibited.
b. Color schemes shall consist of one primary color and at least one secondary color, at a minimum. The roof color shall not be considered a color for purposes of this standard.

3. Parking and Circulation
a. Parking shall not be located between a structure and a public sidewalk within the front setback, with the exception of permitted driveways. When parking areas are located in the front yard, outside of the front setback, a landscape buffer of at least 10 feet between the sidewalk and parking area shall be provided.
b. All parking areas serving more than one unit shall be internally connected and shall use shared driveways.

4. Utility and Service Areas
a. All new dwelling units must connect to City utilities in accordance with Section 13.12.060 of Title 13.
b. Areas for the storage of trash, recycling, and green waste receptacles shall not be visible from the public right of way.
c. All mechanical equipment shall be either screened or hidden from view from the public street.

Ministerial Approval of Two-Unit Residential Development Projects.

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SECTION 6. This Ordinance shall take effect and be in full force and effect thirty (30) days after its passage.

On motion by Council Member ______, seconded by Council Member _______, and by the following roll call vote to wit:

AYES:

NOES:

ABSENT:
the foregoing Ordinance was adopted this ____ day of _______, 2022.

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___________________________________

CARON RAY RUSSOM, MAYOR
ATTEST:
___________________________________

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LEGISLATIVE COUNSEL'S DIGEST
SB 9, Atkins. Housing development: approvals.

Home Bill Information California Law Publications Other Resources My Subscriptions My Favorites ATTACHMENT 2

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This bill, by establishing the ministerial review processes described above, would thereby exempt the approval of projects subject to those processes from CEQA.

By increasing the duties of local agencies with respect to land use regulations, the bill would impose a statemandated local program.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

This bill would provide that no reimbursement is required by this act for specified reasons.

Vote: majority Appropriation: no Fiscal Committee: yes Local Program: yes THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

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Arroyo Grande City CouncilJune 14, 2022

Arroyo Grande City Council
June 14, 2022