Arroyo Grande City Council
September 27, 2022

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 37 OF 55 [email protected] | www.slocounty.ca.gov
(e) Conflict with or obstruct implementation of a water quality control plan or sustainable groundwater management plan?
The project would not change existing programs related to water quality and sustainable groundwater management, as discussed in (a) and (b).

Conclusion/Mitigation
The project would not affect water quality conditions in Lopez Reservoir or surface water and groundwater downstream. The project would result in periodic increases in Lopez Reservoir water levels that would be within the range of existing conditions. Because water levels and downstream releases are closely managed, the project would not result in any significant change in flood hazard conditions in the reservoir or upstream areas. The project would result in incremental increases in spill and spill volume that would be within the range of existing flow conditions in Arroyo Grande Creek downstream from the dam. Project-related effects would be minor and are not expected to result in material changes in flood conditions in the Arroyo Grande Creek corridor. No mitigation is required.

XI. LAND USE AND PLANNING
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
Would the project:
(a) Physically divide an established
community?
☐ ☐ ☐ ☒
(b) Cause a significant environmental
impact due to a conflict with any land
use plan, policy, or regulation adopted
for the purpose of avoiding or mitigating
an environmental effect?
☐ ☐ ☐ ☒
Setting
Surrounding land uses for Lopez Reservoir and Arroyo Grande Creek consist of rural lands sparsely developed for recreation and residential use, and urban development in the lower portions of Arroyo Grande Creek. The project was reviewed for consistency with policy and regulatory documents relating to the environment and appropriate land use. Early consultation notice and opportunity to comment was provided either directly by the District or through the State Clearinghouse to interested agencies to review for policy consistencies (e.g., CalFire for Fire Code, APCD for Clean Air Plan; full list in Exhibit A). The project is not within or adjacent to an approved Habitat Conservation Plan area. As described in the Biological Resources section, HCPs are being developed for Arroyo Grande Creek and the State Park Oceano Dunes District Discussion
(a) Physically divide an established community?
The project will not physically divide an established community and will not alter existing transportation routes between communities.

Attachment 2 - page 38 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 38 OF 55 [email protected] | www.slocounty.ca.gov
(b) Cause a significant environmental impact due to a conflict with any land use plan, policy, or regulation adopted for the purpose of avoiding or mitigating an environmental effect? The project is compatible with the surrounding uses and would not change or interfere with any existing land uses. The South County Inland Area Plan designates private lands within the viewshed and immediate watershed of Lopez Lake as a Sensitive Resource Area for aesthetics, water quality, primitive values, and wildlife habitat. Project-related effects on these issues are as described under Aesthetics, Biological Resources, and Hydrology and Water Quality. While not applicable to work proposed by the County within existing County rights-of-way, the project does not conflict with the designation of the Lopez Lake Sensitive Resource Area in the South County Inland Area Plan. The project was found to be consistent with other applicable plans (listed in Exhibit A), and does not conflict with the plans or policies of any of the referral agencies.

Habitat conditions for federally listed species and designated critical habitat in Arroyo Grande Creek downstream of the dam are being addressed in the draft Arroyo Grande HCP. Arroyo Grande Creek crosses into the State Parks Oceano Dunes Draft HCP area at the coast. Project-related effects on flow conditions in Arroyo Grande Creek would be relatively infrequent and within the existing range of flow conditions (Figures 4, 5, and 6). As such, the project is not expected to conflict with any of the management objectives of the HCPs, which pertain to federally listed species and designated critical habitat.

Conclusion/Mitigation
The project will have no effect on land use and planning. As described in the Biological resources section, the project would not conflict with the Arroyo Grande Creek HCP provided the contract provisions are reviewed at such time as the HCP is finalized. No mitigation measures are necessary.

XII. MINERAL RESOURCES
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
Would the project:
(a) Result in the loss of availability of a
known mineral resource that would be
of value to the region and the residents
of the state?
☐ ☐ ☐ ☒
(b) Result in the loss of availability of a
locally- important mineral resource
recovery site delineated on a local
general plan, specific plan or other land
use plan?
☐ ☐ ☐ ☒
Setting
The project site is not located near any surface mines or energy/extractive areas.

Attachment 2 - page 39 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 39 OF 55 [email protected] | www.slocounty.ca.gov
Discussion
(a) Result in the loss of availability of a known mineral resource that would be of value to the region and the residents of the state?
The project would not require any construction, ground disturbance, or transportation components that would have the potential to impact mineral resources or interfere with access to mineral resources. (b) Result in the loss of availability of a locally- important mineral resource recovery site delineated on a local general plan, specific plan or other land use plan?
The project is not located within or near any delineated mineral resource recovery sites.

Conclusion/Mitigation
The project would not impact mineral resources and no mitigation measures are necessary.

XIII. NOISE
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
Would the project result in:
(a) Generation of a substantial temporary
or permanent increase in ambient noise
levels in the vicinity of the project in
excess of standards established in the
local general plan or noise ordinance, or
applicable standards of other agencies?
☐ ☐ ☐ ☒
(b) Generation of excessive groundborne
vibration or groundborne noise levels?
☐ ☐ ☐ ☒
(c) For a project located within the vicinity
of a private airstrip or an airport land
use plan or, where such a plan has not
been adopted, within two miles of a
public airport or public use airport,
would the project expose people
residing or working in the project area to
excessive noise levels?
☐ ☐ ☐ ☒
Setting
Sensitive receptors in the vicinity of the project area include residences and recreational users at Lopez Reservoir, and residences and schools in urban developed areas bordering Arroyo Grande Creek downstream of the dam. Arroyo Grande Creek and the flood control levees border the south side of the Oceano County Airport parcel.

Attachment 2 - page 40 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 40 OF 55 [email protected] | www.slocounty.ca.gov
Discussion
(a) Generation of a substantial temporary or permanent increase in ambient noise levels in the vicinity of the project in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies?
The project would not require construction or transportation activities and would not alter the type of activities conducted to manage water levels at Lopez Dam. As such the project would not affect ambient noise levels.
(b) Exposure of persons to or generation of excessive groundborne vibration or groundborne noise levels? The project would not require construction or any other activity that would generate excessive groundborne vibration or noise.
(c) For a project located within the vicinity of a private airstrip or an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project expose people residing or working in the project area to excessive noise levels? The project is not located in the vicinity of a private airstrip. The project would not include construction activities or any operational changes that would generate noise.

Conclusion/Mitigation
The project would not result in any change in ambient noise levels and no mitigation measures are necessary.

XIV. POPULATION AND HOUSING
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
Would the project:
(a) Induce substantial unplanned
population growth in an area, either
directly (for example, by proposing new
homes and businesses) or indirectly (for
example, through extension of roads or
other infrastructure)?
☐ ☐ ☒ ☐
(b) Displace substantial numbers of existing
people or housing, necessitating the
construction of replacement housing
elsewhere?
☐ ☐ ☐ ☒
Setting
The Lopez Reservoir is located in a rural area of unincorporated San Luis Obispo County. There are only widely scattered residences located in the vicinity, and surrounding land uses are primarily recreational lands and open space.

Attachment 2 - page 41 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 41 OF 55 [email protected] | www.slocounty.ca.gov
Arroyo Grande Creek downstream of the dam passes through rural agricultural and residential land and the urban center of the City of Arroyo Grande.

Water from the Lopez project is used throughout the South County in the cities of Pismo Beach, Arroyo Grande, and Grover Beach, as well as the communities of Oceano and Avila Beach.

Discussion
(a) Induce substantial unplanned population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through extension of roads or other infrastructure)? Lopez Project entitlements range from 245 to 2,290 AFY for the five Contractors; the project would not change these entitlements. The project would also not change any Contractor’s allocation of SWP water. Instead, the project would provide greater flexibility for the Contractors, specifically during years when water availability from Lopez and/or the SWP is below average. The project would not increase the volume of water in each Contractor’s portfolio; therefore, the project would not represent a “new” source of water with the potential for inducing growth.

The project would not include any new infrastructure that would support increased service areas for any of the Contractors and therefore would not induce population growth. (b) Displace substantial numbers of existing people or housing, necessitating the construction of replacement housing elsewhere?
The project would not require any new construction and would not displace any housing.

Conclusion/Mitigation
The project would have no impacts on population and housing and no mitigation measures are necessary.

XV. PUBLIC SERVICES
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
(a) Would the project result in substantial
adverse physical impacts associated
with the provision of new or physically
altered governmental facilities, need for
new or physically altered governmental
facilities, the construction of which could
cause significant environmental impacts,
in order to maintain acceptable service
ratios, response times or other
performance objectives for any of the
public services:
☐ ☐ ☐ ☒
Fire protection? ☐ ☐ ☐ ☒
Police protection? ☐ ☐ ☐ ☒
Attachment 2 - page 42 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 42 OF 55 [email protected] | www.slocounty.ca.gov
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
Schools? ☐ ☐ ☐ ☒
Parks? ☐ ☐ ☐ ☒
Other public facilities? ☐ ☐ ☐ ☒
Setting
Police protection in the project area is provided by the County Sheriff Department. The project is located in a “very high” Fire Hazard Severity Zone (SLO County 2007); however, Cal Fire’s Airport Fire Station is located approximately 11 miles from the project site and response time is approximately 20 minutes. The closest schools are in Arroyo Grande. The project area is an integral component of the Lopez Recreation Area.

Discussion
(a) Would the project result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times or other performance objectives for any of the public services: fire protection, police protection, schools, parks, or other public facilities? The proposed project would have no effect on police, fire, schools, or other public services and would not result in the need for new services or facilities. Impacts to Lopez Recreation Area, a County Park, are discussed under Recreation. No new structures would be built, and there would be no increase in population or traffic as a result of the project. Therefore, there would be no effects on fire, police, or emergency response.

The public benefits of the Lopez Project, including providing a source of drinking water, and managing downstream releases for public benefits (habitat, agriculture, and groundwater recharge) would not be adversely affected by the project.

Conclusion/Mitigation
The project is not expected to adversely affect public services and no mitigation is required.

Attachment 2 - page 43 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 43 OF 55 [email protected] | www.slocounty.ca.gov
XVI. RECREATION
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
(a) Would the project increase the use of
existing neighborhood and regional
parks or other recreational facilities such
that substantial physical deterioration of
the facility would occur or be
accelerated?
☐ ☐ ☐ ☒
(b) Does the project include recreational
facilities or require the construction or
expansion of recreational facilities which
might have an adverse physical effect on
the environment?
☐ ☐ ☒ ☐
Setting
The Lopez Lake Recreation Area is 200 acres of parkland and an associated 4,076 acres of Natural Area publicly owned and operated by the San Luis Obispo County Department of Parks and Recreation (County Parks). The park lands include Lopez Reservoir and the surround parcels. Lopez Lake Recreation Area provides active and passive recreational opportunities associated with the Lopez Lake Reservoir. Recreational amenities include camping, boating, water skiing, water slide, fishing, swimming, trails, and nature appreciation.

Discussion
(a) Would the project increase the use of existing neighborhood and regional parks or other recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated? The project would have no effect on the amount or type of use of the Lopez Lake Recreation Area. (b) Does the project include recreational facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the environment? The project would not require construction or expansion of recreational facilities. Modeling results indicate the project would potentially result in incrementally higher water levels in Lopez Reservoir. Any such change would not adversely affect recreational use of the lake.

Conclusion/Mitigation
The project would not have adverse effects on recreation and no mitigation measures are necessary.

Attachment 2 - page 44 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 44 OF 55 [email protected] | www.slocounty.ca.gov
XVII. TRANSPORTATION
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
Would the project:
(a) Conflict with a program plan, ordinance
or policy addressing the circulation
system, including transit, roadway,
bicycle and pedestrian facilities?
☐ ☐ ☐ ☒
(b) Would the project conflict or be
inconsistent with CEQA Guidelines
section 15064.3, subdivision (b)?
☐ ☐ ☐ ☒
(c) Substantially increase hazards due to a
geometric design feature (e.g., sharp
curves or dangerous intersections) or
incompatible uses (e.g., farm
equipment)?
☐ ☐ ☐ ☒
(d) Result in inadequate emergency access? ☐ ☐ ☐ ☒
Setting
As described in the December 2018 Technical Advisory on Evaluating Transportation Impacts in CEQA, vehicle miles traveled (VMT) is considered the most appropriate metric to evaluate a project’s transportation impacts under CEQA, replacing level of service and other similar metrics for consideration of significant environmental effects. The main road in the project area is Lopez Drive, which is a two-lane County road providing access to the Lopez Lake Recreation Area and rural residential roads.

Discussion
(a) Conflict with a program plan, ordinance or policy addressing the circulation system, including transit, roadway, bicycle and pedestrian facilities?
The project would not require construction of any kind and would not alter or affect existing transportation networks or conditions. Therefore, the project would not conflict with any transit plans, ordinances, or policies.
(b) Would the project conflict or be inconsistent with CEQA Guidelines section 15064.3, subdivision (b)? Section 15064.3(b)(2) of the CEQA Guidelines states that transportation projects that reduce, or have no impact on, vehicle miles traveled should be presumed to cause a less than significant impact on transportation. The project would not involve any activities that would alter existing transportation conditions and would have no effect on vehicle miles traveled. Therefore, the project will be consistent with Section 15064.3.

Attachment 2 - page 45 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 45 OF 55 [email protected] | www.slocounty.ca.gov
(c) Substantially increase hazards due to a geometric design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment)? The project would not change the existing road configuration or introduce new traffic uses. (d) Result in inadequate emergency access?
The project would not change the existing road configuration or introduce new traffic uses and so would not have any effect on existing emergency access conditions.

Conclusion/Mitigation
Implementation of the project would not result in any impacts on transportation, and no mitigation measures are necessary.

XVIII.TRIBAL CULTURAL RESOURCES
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
(a) Would the project cause a substantial
adverse change in the significance of a
tribal cultural resource, defined in Public
Resources Code section 21074 as either
a site, feature, place, cultural landscape
that is geographically defined in terms of
the size and scope of the landscape,
sacred place, or object with cultural
value to a California Native American
tribe, and that is:
(i) Listed or eligible for listing in the
California Register of Historical
Resources, or in a local register of
historical resources as defined in
Public Resources Code section
5020.1(k), or
☐ ☐ ☐ ☒
(ii) A resource determined by the lead
agency, in its discretion and
supported by substantial evidence,
to be significant pursuant to
criteria set forth in subdivision (c)
of Public Resources Code Section
5024.1. In applying the criteria set
forth in subdivision (c) of Public
Resource Code Section 5024.1, the
lead agency shall consider the
significance of the resource to a
California Native American tribe.
☐ ☐ ☐ ☒
Attachment 2 - page 46 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 46 OF 55 [email protected] | www.slocounty.ca.gov
Setting
In accordance with AB 52 consultation requirements, outreach to seven Native American tribe groups was conducted on February 22, 2021 (Northern Chumash Tribal Council, Salinan Tribe of San Luis Obispo, Monterey and San Benito Counties, yak titÿu titÿu yak tiłhini – Northern Chumash Tribe, Xolon Salinan Tribe, Barbareno/Ventureno Band of Mission Indians (three tribal members), Santa Ynez Band of Chumash Indians, and the Coastal Band of the Chumash Nation. Responses were received from three tribal representatives (yak titÿu titÿu yak tiłhini – Northern Chumash Tribe; the Salinan Tribe of San Luis Obispo, Monterey, and San Benito Counties; and the Santa Ynez Band of Chumash Indians) stating that there is potential for archaeological sensitivity in the region, but that they have no concerns with the project based on the fact that no physical disturbance, ground disturbance, or construction activities would occur.

Discussion
(a) Would the project cause a substantial adverse change in the significance of a tribal cultural resource, defined in Public Resources Code section 21074 as either a site, feature, place, cultural landscape that is geographically defined in terms of the size and scope of the landscape, sacred place, or object with cultural value to a California Native American tribe, and that is:
(a-i) Listed or eligible for listing in the California Register of Historical Resources, or in a local register of historical resources as defined in Public Resources Code section 5020.1(k)? (a-ii) A resource determined by the lead agency, in its discretion and supported by substantial evidence, to be significant pursuant to criteria set forth in subdivision (c) of Public Resources Code Section 5024.1. In applying the criteria set forth in subdivision (c) of Public Resources Code Section 5024.1, the lead agency shall consider the significance of the resource to a California Native American tribe.

As described in the Cultural Resources section, no archaeological resources have been identified in the project area. The project would not require any ground disturbance. Any changes in hydrology that result from the project would be within the existing ranges of water level in Lopez Reservoir and flow conditions in Arroyo Grande Creek. This means that the project would not introduce the potential for inundation or flooding of areas that are not already subject to inundation.

Conclusion/Mitigation
The project would not affect cultural resources and no mitigation measures are necessary.

Attachment 2 - page 47 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 47 OF 55 [email protected] | www.slocounty.ca.gov
XIX. UTILITIES AND SERVICE SYSTEMS
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
Would the project:
(a) Require or result in the relocation or
construction of new or expanded water,
wastewater treatment or storm water
drainage, electric power, natural gas, or
telecommunications facilities, the
construction or relocation of which
could cause significant environmental
effects?
☐ ☐ ☐ ☒
(b) Have sufficient water supplies available
to serve the project and reasonably
foreseeable future development during
normal, dry and multiple dry years?
☐ ☐ ☒ ☐
(c) Result in a determination by the
wastewater treatment provider which
serves or may serve the project that it
has adequate capacity to serve the
project’s projected demand in addition
to the provider’s existing commitments?
☐ ☐ ☐ ☒
(d) Generate solid waste in excess of State
or local standards, or in excess of the
capacity of local infrastructure, or
otherwise impair the attainment of solid
waste reduction goals?
☐ ☐ ☐ ☒
(e) Comply with federal, state, and local
management and reduction statutes
and regulations related to solid waste?
☐ ☐ ☐ ☒
Setting
The District established Zone 3 (Zone 3) on July 26, 1965, for the purpose of financing, construction and maintenance of the Lopez Dam and facilities (Lopez Project) to provide potable water to the lands within the Zone 3 boundaries. The District entered into water supply contracts with the Zone 3 Contractors to fund a portion of the Lopez Project and to establish entitlements for Lopez Water. The Lopez Project includes the reservoir, dam, terminal reservoir, water treatment plant, and the Lopez Pipeline that transmits the treated water to the Contractors. The terminal reservoir serves as a holding basin prior to intake at the water treatment plant.

Each Contractor owns and operates their own distribution facilities, as well as infrastructure for other water supply sources in their portfolio.

Attachment 2 - page 48 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 48 OF 55 [email protected] | www.slocounty.ca.gov
Wastewater and solid waste are not a component of the Lopez Project and are managed by each Contractor with their own infrastructure.

Discussion
(a) Require or result in the construction of new water or wastewater treatment facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? The project would not require the construction of new water or wastewater facilities or expansion of existing facilities.
(b) Have sufficient water supplies available to serve the project and reasonably foreseeable future development during normal, dry and multiple dry years?
The project is being proposed to increase the resiliency of Lopez Project water, including management options to help alleviate water supply shortages during dry years. The project would allow Contractors to manage their use of Lopez Water in the most beneficial way given conditions with other water supplies in their portfolio. The project is expected to increase potential use of SWP water by the Contractors, and to take the pressure off any one source they use to fulfill customer demand. This should allow the Contractors to better plan and prepare for unanticipated water supply emergencies or drought conditions.

The project is expected to result in higher water levels in Lopez Reservoir on average, and to reduce the occurrence of low-water conditions that have the potential to trigger water use restrictions. The modeling predicts incremental increases in the occurrence of spill and in evaporation loss from Lopez Reservoir as a result of higher water levels. However, the project-related increase in evaporative loss is not substantial (approximately 2%), and it is anticipated that the Contractors would manage use of their water supplies to reduce loss due to spill.

In any given year, Contractors of SWP water are subject to frequent spills (almost yearly at times) at San Luis Reservoir, often regardless of climatological conditions because of the inability to move and store that water elsewhere in the system. Through analysis of historic SWP operations, it was determined that approximately 7,000 AFY of District water has spilled or been lost at San Luis Reservoir on average over the last 26 years. The project will provide additional opportunities for District and SWP subcontractors to store more SWP in Lopez Reservoir through in-lieu exchanges with Lopez water that would reduce the amount of SWP spills/losses that occur at San Luis Reservoir. While not specifically modeled, this should offset some of the anticipated projectrelated increase in spill at Lopez Reservoir. The proposed project would not preclude the District from revisiting any aspect of the Lopez Project water management and contracts with the Contractors to respond to changing conditions. For example, the proposed contract changes would be revisited when the Arroyo Grande Creek HCP is finalized to determine if any changes are required to ensure compliance with the HCP. (c) Result in a determination by the wastewater treatment provider which serves or may serve the project that it has adequate capacity to serve the project’s projected demand in addition to the provider’s existing commitments?
The project would not require wastewater treatment or affect existing wastewater treatment facilities. (d) Generate solid waste in excess of State or local standards, or in excess of the capacity of local infrastructure, or otherwise impair the attainment of solid waste reduction goals? The project would not generate solid waste or affect existing solid waste disposal facilities.

Attachment 2 - page 49 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 49 OF 55 [email protected] | www.slocounty.ca.gov
(e) Comply with federal, state, and local management and reduction statutes and regulations related to solid waste?
See response to (d).

Conclusion/Mitigation
The project would have beneficial effects for the Lopez Contractors by enabling flexible management of available water supplies. This would benefit the District in regard to managing County-wide water supply resources (e.g., groundwater), and has the potential to reduce drought-related limitations on water use, which would benefit all Contractor customers. The project would not decrease available water supply or increase demand.

Project-related increases in spill and evaporation from Lopez Reservoir have the potential to decrease water available for water supply. However, based on the estimated quantities of those water losses, and anticipated Contractor incentives expected to reduce the losses compared to the modeled levels over a 51-year period, no significant effects on water supply would result. The project will have no significant adverse effects on water or wastewater and no mitigation measures are necessary.

XX. WILDFIRE
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
If located in or near state responsibility areas or lands classified as very high fire hazard severity zones, would the project:
(a) Substantially impair an adopted
emergency response plan or emergency
evacuation plan?
☐ ☐ ☐ ☒
(b) Due to slope, prevailing winds, and
other factors, exacerbate wildfire risks,
and thereby expose project occupants
to, pollutant concentrations from a
wildfire or the uncontrolled spread of a
wildfire?
☐ ☐ ☐ ☒
(c) Require the installation or maintenance
of associated infrastructure (such as
roads, fuel breaks, emergency water
sources, power lines or other utilities)
that may exacerbate fire risk or that may
result in temporary or ongoing impacts
to the environment?
☐ ☐ ☐ ☒
(d) Expose people or structures to
significant risks, including downslope or
downstream flooding or landslides, as a
result of runoff, post-fire slope
instability, or drainage changes?
☐ ☐ ☐ ☒
Attachment 2 - page 50 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 50 OF 55 [email protected] | www.slocounty.ca.gov
Setting
As described under Hazards and Hazardous Materials, the Lopez Reservoir is located in a “very high” fire severity zone and the response time for the area is approximately 20 minutes.

Discussion
(a) Substantially impair an adopted emergency response plan or emergency evacuation plan? (b) Due to slope, prevailing winds, and other factors, exacerbate wildfire risks, and thereby expose project occupants to, pollutant concentrations from a wildfire or the uncontrolled spread of a wildfire? (c) Require the installation or maintenance of associated infrastructure (such as roads, fuel breaks, emergency water sources, power lines or other utilities) that may exacerbate fire risk or that may result in temporary or ongoing impacts to the environment?
(d) Expose people or structures to significant risks, including downslope or downstream flooding or landslides, as a result of runoff, post-fire slope instability, or drainage changes? In regard to (a) through (d), impacts of the project on emergency response are discussed under Hazards and Hazardous Materials, Public Services, and Transportation.

The project would have no impacts on existing roads or land uses and would have no material affect on any factor related to the occurrence of, or risks posed by, wildfires.

Conclusion/Mitigation
The project would have no effects on wildfire risk and no mitigation measures are necessary.

XXI. MANDATORY FINDINGS OF SIGNIFICANCE
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
(a) Does the project have the potential to
substantially degrade the quality of the
environment, substantially reduce the
habitat of a fish or wildlife species, cause
a fish or wildlife population to drop
below self-sustaining levels, threaten to
eliminate a plant or animal community,
substantially reduce the number or
restrict the range of a rare or
endangered plant or animal or eliminate
important examples of the major
periods of California history or
prehistory?
☐ ☐ ☒ ☐
Attachment 2 - page 51 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 51 OF 55 [email protected] | www.slocounty.ca.gov
Potentially
Significant
Impact
Less Than
Significant
with
Mitigation
Incorporated
Less Than
Significant
Impact No Impact
(b) Does the project have impacts that are
individually limited, but cumulatively
considerable? (“Cumulatively
considerable” means that the
incremental effects of a project are
considerable when viewed in connection
with the effects of past projects, the
effects of other current projects, and the
effects of probable future projects)?
☐ ☐ ☒ ☐
(c) Does the project have environmental
effects which will cause substantial
adverse effects on human beings, either
directly or indirectly?
☐ ☐ ☒ ☐
Setting
The project setting is described in terms of surrounding land uses on pages one through five of the Initial Study and from the perspective of environmental resources in each resource section of this document, including, for example, aesthetics, biological resources, and cultural resources.

Discussion
(a) Does the project have the potential to substantially degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below selfsustaining levels, threaten to eliminate a plant or animal community, substantially reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory?
No project-related effects have been identified that have the potential to substantially degrade the quality of the environment, reduce wildlife habitat, or threaten natural communities. As described under Biological Resources, the District is in the process of developing a Habitat Conservation Plan (HCP) for the purpose of protecting and enhancing habitat conditions in Arroyo Grande Creek for federally listed species. The HCP will address the operation of Lopez Dam (for example, storage and downstream release scenarios) and may have direct bearing on Lopez Water Project contracts, including the proposed contract changes. Pursuant to stipulations in the contracts, the proposed contract changes would be revisited at such time as the HCP is finalized to determine if modifications are necessary to ensure compliance with the HCP and potential for significant adverse effects on biological resources.

The project is not expected to adversely affect cultural resources or to eliminate important examples of the major periods of California history or pre-history.

No mitigation measures are required.

Attachment 2 - page 52 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 52 OF 55 [email protected] | www.slocounty.ca.gov
(b) Does the project have impacts that are individually limited, but cumulatively considerable? (“Cumulatively considerable” means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects)?
The project does not propose new or different uses than the existing uses of Lopez Reservoir for water supply.

The project would use the existing water supply management, treatment, and distribution infrastructure and no construction or new facilities would be required. Operational impacts would be limited to changes in Lopez Reservoir storage with potential for incremental changes in the frequency and duration of reservoir high water levels and incremental increases in downstream flow conditions due to additional spill events. Existing management protocols regarding low water conditions in the reservoir, and management of dam releases for habitat conditions, agricultural irrigation, and groundwater recharge would not change as a result of the project.

Contracts would be reviewed for consistency with the Arroyo Grande Creek HCP when it is finalized to ensure no adverse downstream effects to listed species or designated critical habitat occur. As such, the project is not expected to have impacts that will be individually limited, but cumulatively considerable. Therefore, project impacts, when considered together with past, on-going, and future projects in the vicinity, would not be cumulatively considerable and would not compound or increase other environmental impacts. Therefore, all project-related impacts will be less than significant. (c) Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly?
The project would not result in environmental effects that would cause substantial adverse effects on human beings, either directly or indirectly. The proposed contract changes would increase water supply resiliency for the Contractors, increasing their portfolio management options for providing a safe and reliable source of drinking water to their customers and increasing potential use of existing State Water allocations within the District. Increased water levels in Lopez Reservoir are expected to reduce the likelihood of low-water restrictions during droughts. Collectively, these changes would benefit the District and the Contractors by reducing the pressure on any one water supply source. Collectively these changes would benefit Contractor customers by reducing the potential for drought-related restrictions on water use and potentially reducing water costs.

Effects of increased water storage in Lopez Reservoir is expected to have a beneficial effect on recreational use of Lopez Recreation Area. Potential for increased water losses through increased evaporation from the reservoir and spill over the dam would be minor in scale and would not contribute to substantial adverse water supply effects. The potential for increased spill would result in periodic, incremental increases in Arroyo Grande Creek flow that would not cause substantial adverse effects from erosion or flooding conditions. The project would not conflict with adjacent land uses, pose any hazards, or interfere with public safety or emergency response procedures. Implementation of the project would result in net benefits to public water supply. Therefore, the project is not expected to have adverse effects, and is expected to have some beneficial effects, on human beings.

Conclusion/Mitigation
The project will have a less than significant impact on the environment. No mitigation measures are required.

Attachment 2 - page 53 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 53 OF 55 [email protected] | www.slocounty.ca.gov
Exhibit A - Initial Study References and Agency Contacts The County Public Works Department has contacted various agencies for their comments on the proposed project. With respect to the subject application, the following have been contacted for early consultation (marked with an ) and when a response was made, it is either attached or in the application file:

Lopez Water Contract Changes NOI Contact List
Company/Agency/Department Notified by District Response in File Nature of Response San Luis Obispo County Air Pollution Control District Yes No comments.

San Luis Obispo County Parks & Recreation Yes Provide standard requirements.

San Luis Obispo County Environmental Health
Department
None Received NA
San Luis Obispo County Agricultural Commissioner None Received NA Avila Valley Advisory Council None Received NA
Oceano Advisory Council None Received NA
California Department of Fish and Wildlife None Received NA California State Parks None Received NA
US Environmental Protection Agency None Received NA
National Marine Fisheries Service Yes
US Army Corps of Engineers None Received NA
US Fish and Wildlife Service None Received NA
Avila Beach Community Services District None Received NA Oceano Community Services District Yes Provided contact information; no comments.

City of Arroyo Grande Community Development None Received NA City of Grover Beach None Received NA
City of Pismo Beach Yes Provided contact information; no comments.

San Luis Obispo County Agricultural Task Force None Received NA Creek Lands Conservation None Received NA
South County Sanitation District None Received NA
Notified through State Clearinghouse NOC None Received NA California Air Resources Board None Received NA
California Coastal Commission None Received NA
California Department of State Parks, Division of Boating and Waterways
None Received NA
California Department of Transportation District 5 None Received NA California Department of Conservation None Received NA
California Department of Food and Agriculture None Received NA California Department of Forestry and Fire Protection None Received NA California Department of Water Resources None Received NA California Highway Patrol None Received NA
California Natural Resources Agency None Received NA
California Public Utilities Commission None Received NA California State Lands Commission None Received NA
Department of Toxic Substances Control None Received NA Office of Emergency Services None Received NA
Native American Heritage Commission None Received NA
State Office of Historic Preservation None Received NA
Attachment 2 - page 54 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 54 OF 55 [email protected] | www.slocounty.ca.gov
California Department of Parks and Recreation None Received NA State Water Resources Control Board – Water Quality,
Drinking Water, Water Rights, and Financial Assistance
Divisions
None Received NA
California Department of Water Resources None Received NA ** “No comment” or “No concerns”-type responses are usually not attached The following checked (“ ”) reference materials have been used in the environmental review for the proposed project and are hereby incorporated by reference into the Initial Study. The following information is available at the County Public Works Department.

Project File for the Subject Application
County Documents
Coastal Plan Policies
Framework for Planning (Coastal/Inland)
General Plan (Inland/Coastal), includes all
maps/elements; more pertinent elements:

Design Plan
Specific Plan
Annual Resource Summary Report
Circulation Study
Other Documents
Clean Air Plan/APCD Handbook
Regional Transportation Plan
Uniform Fire Code
Water Quality Control Plan (Central Coast Basin –
Region 3)
Archaeological Resources Map
Area of Critical Concerns Map
Special Biological Importance Map
CA Natural Species Diversity Database
Fire Hazard Severity Map
Flood Hazard Maps
Natural Resources Conservation Service Soil Survey
for SLO County
GIS mapping layers (e.g., habitat, streams,
contours, etc.)
Other
Agriculture Element
Conservation & Open Space Element
Economic Element
Housing Element
Noise Element
Parks & Recreation Element/Project List
Safety Element
Land Use Ordinance (Inland/Coastal)
Building and Construction Ordinance
Public Facilities Fee Ordinance
Real Property Division Ordinance
Affordable Housing Fund
Airport Land Use Plan
Energy Wise Plan
Select Planning Area
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□ □ □ □ □ ~
□
□ ~
□ □ □ ~
~ ~
□ ~
□ ~
□ ~
□
□ ~
□
□ □
Attachment 2 - page 55 of 96

Project Number Project Name PLN-2039
04/2019
Initial Study – Environmental Checklist
976 OSOS STREET, ROOM 206 | SAN LUIS OBISPO, CA 93408 |(805) 781-5252 | TTY/TRS 7-1-1 PAGE 55 OF 55 [email protected] | www.slocounty.ca.gov
Additional References: The following project-specific information and/or reference materials have been considered as a part of the Initial Study:

California Office of Historic Preservation. 2021. California Historical Resources. Online search for sites in San Luis Obispo County conducted April 14, 2021, at https://ohp.parks.ca.gov/listedresources/.

California State Parks. 2020. Oceano Dunes District Draft Habitat Conservation Plan, draft dated November 2020 and related documents available at: https://www.oceanoduneshcp.com/document-library.

California Water Commission. 2021. Climate change projections for Water Storage Investment Program (WSIP). Technical Reference and Model Components accessible online at https://data.ca.gov/dataset/climate-change-projections-for-water-storage-investment-program-wsip.

Central Coast Blue. 2018. http://centralcoastblue.com/.

County of San Luis Obispo Flood Control and Water Conservation District. 2007. Interim Downstream Release Schedule. Zone 3, Lopez Project, February.

GSI Water Solutions, Inc. 2021. Northern Cities Management Area 2020 Annual Monitoring Report. Prepared for City of Arroyo Grande, City of Grover Beach, Oceano Community Services District, and City of Pismo Beach. April.

SLO Watershed Project, undated. Arroyo Grande Creek Description, with excerpt from the Arroyo Grande Creek Watershed Management Plan. A project of the Upper Salinas-Las Tablas Resource Conservation District. Accessed online at http://slowatershedproject.org/watersheds/arroyo-grande-creek/ on January 4, 2021.

State Water Resources Control Board. 2021. California 303(d) List Approved by the U.S. Environmental Protection Agency April 6, 2018. Accessed online at
https://www.waterboards.ca.gov/water_issues/programs/tmdl/integrated2014_2016.shtml on January 4, 2021.

SWCA. 2019. Natural Environment Study, Lopez Drive Bridge Seismic Retrofit Project, Lopez Drive, Arroyo Grande, San Luis Obispo County. Prepared for California Department of Transportation and County of San Luis Obispo Department of Public Works. May.

SWCA. 2018. Lopez Drive Bridge Seismic Retrofit Project Archaeological Survey Report. Prepared for California Department of Transportation and County of San Luis Obispo Public Works Department. January.

Western Hydrologics. 2021. Zone 3 Contract Change Modeling Results, San Luis Obispo County Flood Control and Water Conservation District. November. [Attachment A] Attachment 2 - page 56 of 96

Zone 3 Contract Change Modeling Results
San Luis Obispo County Flood Control and Water Conservation District
November 24, 2021
Prepared under the responsible charge of
Jeffery K. Meyer Jared C. Emery
C 54387 C 81467
610 Auburn Ravine Road, Suite C, Auburn, CA 95603

WESTERN HYDROLOGICS

WATER & HYDROPOWER CONSULTING
Attachment 2 - page 57 of 96

2 Western Hydrologics performed modeling at the request of the Zone 3 Contractors to investigate outcomes of proposed Zone 3 Contract Changes (the Project) under various scenarios. The Project provides opportunities for the Contractors to store both Lopez water and State Water Project water (SWP) year over year. The modeling scenarios are listed in Table 1. Scenarios B, C, E, and F represent modeling of the Project. The modeling was broken down into either Maximize Lopez Storage or Maximize SWP Storage to provide bookends of how the Project affects Contractors proposed storage accounts. The intent of the modeling is to evaluate the following:

1. Improved Water Management Opportunities: Opportunities for Zone 3 Agencies to store Lopez and store SWP water thru the Agency Initiated Exchanges provisions of the proposed Contract Changes (the Project) and supply prioritization to improve local water supply availability during drought conditions, while limiting losses from spills during wet periods.

2. Climate Change: Evaluation of potential impact of climate change on Lopez Reservoir inflow, evaporation, and other conditions. These Climate Change hydrology planning scenarios are required to support the California Environmental Quality Act (CEQA) impact analyses.

1.0 Assumptions
A detailed description of the model scenario assumptions is provided in Table 1.

Table 1 - Scenario Summary
Scenario
Scenario Parameters
Hydrology Downstream
Releases
Municipal
Demands
Supply Priority2 Storage Rights Low Reservoir
Response Plan
A -Baseline 1969 -2020 IDRS Release
Schedule
2035
Demands
No Storage (Lopez,
SWP, Groundwater)
No Not Included
B – Project:

Maximize Lopez
Storage
1969-2020 IDRS Release
Schedule
2035
Demands
With Storage (SWP,
Groundwater,
Lopez)
Unreleased
Downstream Releases,
Unused Entitlements
Not Included
C – Project:

Maximize SWP
Storage
1969 -2020 IDRS Release
Schedule
2035
Demands
With Storage
(Lopez,
Groundwater, SWP)
Unreleased
Downstream Releases,
SWP Exchange,
Unused Entitlements
Not Included
D - Climate
Change Baseline
Climate
Change
1969 -2020
IDRS Release
Schedule
2035
Demands
No Storage (Lopez,
SWP, Groundwater)
No Not Included
E - Climate
Change Project:

Maximize Lopez
Storage
Climate
Change
1969 -2020
IDRS Release
Schedule
2035
Demands
With Storage (SWP,
Groundwater,
Lopez)
Unreleased
Downstream Releases,
Unused Entitlements
Not Included
F - Climate
Change Project:

Maximize SWP
Storage
Climate
Change
1969 -2020
IDRS Release
Schedule
2035
Demands
With Storage
(Lopez,
Groundwater, SWP)
Unreleased
Downstream Releases,
SWP Exchange,
Unused Entitlements
Not Included
Attachment 2 - page 58 of 96

3 1.1 Priorities:

The available water sources are used in the following order to meet demands:

Baseline Scenarios (A,D):

1. Lopez Entitlement water.

2. Imported SWP water

3. Groundwater Entitlement limited to 1,080 AF per year to ensure no seawater intrusion.

Maximize Lopez Storage Scenario (B,E):

1. Imported SWP water

2. Groundwater Entitlement limited to 1,080 AF per year to ensure no seawater intrusion.

3. Lopez Entitlement water.

4. Stored Lopez water
Maximize SWP Storage Scenarios (C,F):

1. Lopez Entitlement water

2. Groundwater Entitlement limited to 1,080 AF per year to ensure no seawater intrusion.

3. Imported SWP water

4. Stored Lopez water

5. Stored SWP imports are not to be used for downstream releases.

1.2 Consumptive Demands and Supplies:

Consumptive Demand
The model used projected 2035 consumptive demand estimates based on an evaluation of anticipated future demand for the Zone 3 Agencies. The 2035 demand estimates were developed by dividing 2018 water demands by the estimated 2018 populations to develop gallons per capita per day (gpcd) demand factors for each agency. 2018 demands were utilized because they incorporated demand reduction behaviors adopted by Zone 3 Contractor customers during the historic drought from 2011 to 2017. These demand factors were then applied to the estimated populations for 2035 obtained from the Zone 3 Contractors 2015 UWMPs, where available, and input from OCSD staff. The 2015 UWMP estimates for 2035 water usage were not used because they did not include recent trends in demand reduction. 2020 UWMP data was not available at the time the model was developed. Actual demands will vary based on customer demand behaviors, climatic conditions, and socio-economic and other factors.

Table 2 – Projected 2035 Water Demands – All Scenarios
Water User Annual Consumptive Demand
Pismo Beach 1,888
City of Arroyo Grande 2,510
City of Grover Beach 1,330
Oceano CSD 1,016
CSA 12 245
Total 6,989
Attachment 2 - page 59 of 96

4 Lopez Lake Supply
Safe yield of the reservoir is 8,730 AFY: 4,530 AFY for pipeline deliveries, and 4,200 AFY for downstream releases.1 Entitlement for pipeline deliveries are outlined in Table 3.2 Table 3 - Lopez Lake Treated Water Entitlement
Water User Entitlement (AFY)
Pismo Beach 892
Oceano CSD 303
Grover Beach 800
Arroyo Grande 2,290
CSA 12 245
Total 4,530
State Water Project Supply
Water Service Amounts (WSA) for SWP delivery at the Lopez SWP turnout are 2392 AF, outlined in Table

4.3 Table 4 - SWP Lopez Turnout Water Service Amount
Sub-Contractor WSA1 Drought Buffer2
Pismo Beach 1,240 1,240
Oceano CSD 750 750
San Miguelito MWC3 275 275
Avila Beach CSD4 100 100
Avila Valley MWC4 20 20
San Luis Coastal USD4 7 7
Notes:

1. This is the maximum amount of SWP water available to the agency

2. Drought buffer provides a level of insurance that an agency will receive its maximum amount in any one year

3. The Project will not affect this agency because they are not a Zone 3 Contractor

4. Subcontractor of CSA 12’s entitlement of Lopez water State Water Project allocations are taken from the DWR 2013 State Water Project Delivery Reliability Report’s existing demand level Calsim runs for 1968-2003, and historical allocations are used for 2004- 2020.

Santa Maria Groundwater Basin Extraction
The Northern Cities Management Areas (NCMA) Agencies (Cities of Arroyo Grande, Grover Beach, Pismo Beach and the Oceano Community Services District) have an agreement for groundwater management, associated with the Santa Maria Groundwater Basin Adjudication (2002 Management Agreement) that establishes groundwater entitlements for the NCMA Agencies, which are shown in Table 5. However, groundwater modeling, completed as part of the Central Coast Blue Phase 1B Hydrogeologic Evaluation has indicated that pumping the full NCMA Agency Entitlements (4,330 AFY) during periods of extended drought could increase the risk of seawater intrusion. To respond to this threat, the NCMA Agencies have voluntarily limited their groundwater pumping to an amount of approximately 1,080 AF per year to prevent seawater intrusion. For the purposes of the Zone 3 Contract Change Modeling, the target of 1 SLO Master Water Report, section 2.2.8.
2 SLO Master Water Report, section 4.3.4 and Table 4.9. 3 SLO Master Water Report, section 4.3.1 and Table 4.5.

Attachment 2 - page 60 of 96

5 1,080 AFY was allocated to each of the NCMA Agencies according to their percentage of the NCMA Municipal Entitlement and their assumed groundwater extractions were limited to the targets shown in Table 5.

Table 5 – Modeled Groundwater Extraction
NCMA Agencies Groundwater
Entitlement (AFY)
Groundwater Entitlement
Percentage (%)
Groundwater Extraction
Target (AFY)
Pismo Beach 700 16% 175
City of Arroyo Grande 1,323 31% 330
City of Grover Beach 1,407 32% 351
Oceano CSD 900 21% 224
Total 4,330 100% 1,080
Supply Availability Assumptions - The estimated amount of available water supply and usage priority for each Zone 3 contractor was calculated based on the anticipated amount of Lopez, Santa Maria Groundwater Basin and State Water Project water each agency would have available under potential future conditions. The actual amounts of available supply, potential future supplies, and each agencies’ strategy for using those supplies will vary by agency. Arroyo Grande’s Pismo Formation water supply was not incorporated in this analysis, however, if incorporated would likely proportionally increase the amount of stored Lopez Water the City of Arroyo Grande could generate.

Table 6. Modeled Supply Available by Zone 3 Contractor
Zone 3 Contractor Lopez (AFY) Groundwater
Extraction
Target (AFY)
SWP (AFY) Total (AFY)
Pismo 892 175 1,240 2,307
City of Arroyo Grande 2,290 330 0 2,620
City of Grover Beach 800 351 0 1,151
Oceano CSD 303 224 750 1,277
CSA 121 245 0 0 245
Notes:

1. Certain CSA 12 subcontractors have a SWP allocation but CSA 12 itself does not.

Attachment 2 - page 61 of 96

6 1.3 Climate Change Hydrology Development
Climate change adjusted hydrology was developed using the data products from the California Water Commission’s (CWC) dataset for Water Storage Investment Program applications4. These data products include the results from statewide Variable Infiltration Capacity (VIC) watershed runoff models performed with historical meteorology and climate change adjusted meteorology using climate change assumptions centered at the year 2070. These VIC models are better suited to be used in a comparative manner rather than predictive, and for this reason a ratio is taken of climate change adjusted VIC model output to historic meteorology VIC model output. These ratios are applied to historic hydrology to estimate the climate change adjusted hydrology.

The CWC’s VIC model provides gridded output for the state of California. VIC model results for the project watersheds were developed by delineating watersheds and crossing those watersheds with the VIC gridded output. Watersheds and CWC grid cells are shown in Figure 2. The ratio of VIC model Climate Change results to VIC model historic results is then applied to calculated historic project hydrology. The resulting climate change adjusted basin inflows are summarized in Table 7. An exceedance curve of annual inflow volumes is shown in Figure 1.

Table 7 and Figure 1 both indicate that the Climate Change Adjusted hydrology is wetter than the historic hydrology. This phenomenon may be counterintuitive to many but is common to the coastal watersheds along the California Coast. Sierra Nevada watersheds also experience an increase in annual average runoff under Climate Change Adjusted hydrology using the CWC data. However, the pattern of runoff shifts to earlier in the year to a time when reservoirs can’t capture as much of the runoff due to flood control operations. While local Arroyo Grande Creek supplies appear to increase under Climate Change Adjusted hydrology, the State Water Project supplies decrease. This is because the State Water Project supplies originate in the northern Sierra Nevada mountains above Lake Oroville.

Table 7 - Climate Change Adjusted Annual Average Inflows 4 Data and more information can be found at : https://data.ca.gov/dataset/climate-change-projections-for-waterstorage-investment-program-wsip Watershed Historic Inflow
(1969-2020), AF
Climate Change
Adjusted Inflow, AF Difference, AF Difference, %
Lopez Lake 15,867 17,367 1,500 9.5%
Arroyo Grande Basin 21,792 24,502 2,710 12.4%
Attachment 2 - page 62 of 96

7 Figure 1 - Annual Inflow Exceedance, Historical and Climate Change Adjusted Hydrology 0 20,000
40,000
60,000
80,000
100,000
120,000
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Annual Inflow, AF Exceedance
Historical Hydrology 2070 Climate Change Hydrology
Attachment 2 - page 63 of 96

8 Figure 2 - CWC Climate Change Grid Cells and Project Watersheds .... ....., l.'W2!121 5:&i~E5RI
ECORP Con.sulli1!-M'., I.ill". ..._. __ n,~;,c110,u.1rr,:-,.1 .-n-...i::111.r.:.. 'If'.

SLOC Lopez Project Climate Change Hydrology
l018-1f/3 lll!ou!m .l¥frolgicr
Attachment 2 - page 64 of 96

9 2.0 Model Results
Model results are presented in three separate sections. Section 2.1 presents summary results of the baseline (A) versus Project scenarios (B,C) using Historic hydrology (51-year period of record) see Table

11. Table 12 provides the same results using Climate Change hydrology (D, E, F). Annual average values of water delivered and put to storage in Lopez are shown in Table 8 (Scenarios A and D), Table 9 (Scenarios B and E), and Table 10 (Scenarios C and F). The purpose is to illustrate the differences of each of the items below using Historic hydrology versus Climate Change hydrology. Results include:
 Lopez Lake Storage Annual Low Point
 Downstream Releases
 Evaporation
 Number of Spills
 Peak Daily Spill Rate
In addition, Table 13 presents summary results of the Project which will give each Contractor a storage account including:
 Maximum amount stored in a year
 Maximum use of stored water in a year
 Maximum lost to spill in a year
 Total lost to spills over simulation period
Section 2.2 presents the same types of information presented in Section 2.1 but with Climate Change Hydrology (D, E, F) and in more detail on an annual basis. Section 2.3 presents the results of the Spill minimization studies performed on study F. The Zone 3 Contractors requested modeling that would look at ways to minimize the number of spill events under the Project model. Three scenarios were modeled in which limitations were placed on the amount of SWP water that could be stored by any contractor.

2.1 Results Summary
Table 8 - Modeled Annual Average Water Delivered and Stored (AFY) – Baseline (A, D) Pismo
Beach
Grover
Beach
Arroyo
Grande
Oceano CSA 12 Total
Lopez Lake
Entitlement Supply
Delivered same year 892 800 2,290 303 245 4,530
Delivered to Lopez Storage 0 0 0 0 0 0
Total 892 800 2,290 303 245 4,530
Lopez Lake Surplus
Supply
Delivered same year 20 18 51 7 0 96
State Water Project
Supply
Delivered same year 792 0 0 477 0 1,269
Delivered to Lopez Storage 0 0 0 0 0 0
Total 792 0 0 477 0 1,269
Groundwater Supply 175 351 170 224 0 920
Total Delivered/Stored 1,879 1,169 2,511 1,011 245 6,815 Attachment 2 - page 65 of 96

10 Table 9 - Modeled Annual Average Water Delivered and Stored (AFY) - with Project (B, E) Pismo
Beach
Grover
Beach
Arroyo
Grande
Oceano CSA 12 Total
Lopez Lake
Entitlement Supply
Delivered same year 583 800 2180 115 245 3923
Delivered to Lopez Storage 336 0 162 191 0 689
Total 919 800 2342 306 245 4612
Lopez Lake Surplus
Supply
Delivered same year 3 18 0 1 0 22
State Water Project
Supply
Delivered same year 1072 0 0 637 0 1709
Delivered to Lopez Storage 0 0 0 0 0 0
Total 1072 0 0 637 0 1709
Groundwater Supply 175 351 330 224 0 1080
Total Delivered/Stored 2169 1169 2672 1168 245 7423
Table 10 - Modeled Annual Average Water Delivered and Stored (AFY) - with Project (C, F) Pismo
Beach
Grover
Beach
Arroyo
Grande
Oceano CSA 12 Total
Lopez Lake
Entitlement Supply
Delivered same year 892 800 2,180 303 245 4420
Delivered to Lopez Storage 0 0 162 0 0 162
Total 892 800 2,342 303 245 4582
Lopez Lake Surplus
Supply
Delivered same year 20 18 0 7 0 45
State Water Project
Supply
Delivered same year 745 0 0 448 0 1193
Delivered to Lopez Storage 354 0 0 215 0 569
Total 1099 0 0 663 0 1762
Groundwater Supply 175 351 330 224 0 1080
Total Delivered/Stored 2186 1169 2672 1197 245 7469
Table 11 - Summary Results Table - with Historic Hydrology With Project
Baseline (A) Maximize Lopez
Storage (B)
Maximize SWP
Storage (C)
Lopez Lake Storage
Annual Low Point (AF)
Average 34,380 36,183 36,051
Minimum 9,105 12,690 12,298
Maximum 49,066 49,295 49,359
Downstream Releases
(AFY)
Average 4,100 4,100 4,100
Maximum 4,100 4,100 4,100
Evaporation (AFY) Average 2,585 2,655 2,649
Maximum 3,992 4,060 4,061
Number of Spills Total 16 18 18
Spill Rate (Daily Peak in
cubic feet per second)
Average 150 194 191
Maximum 2,426 2,427 2,427
Attachment 2 - page 66 of 96

11 Table 12- Summary Results Table - with Climate Change Hydrology With Project
Baseline (D) Maximize Lopez
Storage (E)
Maximize SWP
Storage (F)
Lopez Lake Storage
Annual Low Point (AF)
Average 35,439 37,179 37,061
Minimum 9,681 13,331 12,926
Maximum 48,925 49,267 49,351
Downstream Releases
(AFY)
Average 4,100 4,100 4,100
Maximum 4,100 4,100 4,100
Evaporation (AFY) Average 2,645 2,708 2,702
Maximum 3,984 4,043 4,043
Number of Spills Total 20 21 21
Spill Rate (Daily Peak in
cubic feet per second)
Average 268 315 315
Maximum 2,740 2,740 2,740
Table 13 - Summary of Contractor Storage Accounts (over a 51 year period of simulation) Contractor Maximum
amount stored in
a year (AF)
Maximum use of
stored water in a
year (AF)
Maximum lost to
Spill in a year (AF)
Total lost to spills
over simulation
period (AF)
With Project - Maximize Lopez Storage (B) – Historical Hydrology Pismo 483 553 1,748 11,205
Oceano 286 327 1,041 6,607
Arroyo Grande 166 0 1,171 6,016
With Project - Maximize SWP Storage (C) – Historical Hydrology Pismo 494 533 1,583 12,202
Oceano 306 320 961 7,444
Arroyo Grande 166 0 1,169 6,015
With Project - Maximize Lopez Storage (E)–Climate Change Hydrology Pismo 483 533 1,692 11,074
Oceano 286 308 1,030 6,491
Arroyo Grande 166 0 1,080 6,102
With Project - Maximize SWP Storage (F) –Climate Change Hydrology Pismo 494 533 1,527 12,449
Oceano 306 320 928 7,595
Arroyo Grande 166 0 1,079 6,147
Note: For a year by year accounting of agency storage see Section 2.2.6 Attachment 2 - page 67 of 96

12 2.2 Annual Results for Climate Change Hydrology Scenarios The results in the following sections represent details related to the modeling using Climate Change Hydrology and the Project scenarios.

2.2.1 Total Lopez Lake Storage
The Project can cause additional water to be stored in Lopez Lake due to deliveries from Lopez Lake being offset by increased take of SWP water and subsequent storage of Lopez Lake water. The annual storage low point in Lopez Lake is shown in Table 14. An exceedance of the storage low point values is shown graphically in Figure 3. Annual storage low point is defined as the lowest reservoir storage within a Lopez water year (April 1 through March 30). For example, 1969 represents April 1, 1969, through March 30, 1970.

Table 14 - Lopez Lake Annual Low Point with Climate Change Hydrology Baseline (D) Maximize Lopez
Storage (E)
Difference Maximize SWP
Storage (F)
Difference
Acre-Feet Acre-Feet Acre-Feet Acre-Feet Acre-Feet
Average 35,439 37,179 1,740 37,061 1,622
1969 46,537 47,072 535 47,207 669
1970 43,674 44,339 665 44,385 711
1971 37,956 39,759 1,803 39,717 1,761
1972 30,483 32,949 2,466 32,846 2,363
1973 39,270 42,451 3,181 42,266 2,996
1974 44,361 45,119 759 45,217 856
1975 40,580 42,266 1,686 42,241 1,661
1976 35,374 37,646 2,272 37,386 2,012
1977 27,502 29,145 1,643 28,874 1,372
1978 44,686 45,327 641 45,402 716
1979 42,331 43,085 755 43,038 707
1980 44,533 45,202 669 45,278 745
1981 42,558 43,248 690 43,236 678
1982 45,506 46,067 561 46,056 550
1983 48,839 49,150 311 49,268 429
1984 43,600 44,309 709 44,372 772
1985 38,121 39,794 1,674 39,764 1,643
1986 44,469 45,176 707 45,191 723
1987 39,192 39,787 594 39,619 426
1988 32,275 32,834 559 32,685 410
1989 25,823 27,275 1,452 27,050 1,227
1990 17,799 18,894 1,095 18,657 858
1991 18,450 19,421 971 19,220 770
1992 16,483 17,555 1,072 17,341 859
1993 25,449 27,441 1,992 27,148 1,699
Attachment 2 - page 68 of 96

13 1994 19,622 22,359 2,737 22,020 2,398
1995 45,581 46,127 547 46,227 646
1996 44,546 45,157 611 45,198 652
1997 45,241 45,859 618 45,962 721
1998 48,925 49,267 343 49,351 426
1999 43,891 44,649 759 44,745 854
2000 43,498 44,229 731 44,250 752
2001 43,817 44,452 635 44,424 607
2002 39,114 40,731 1,617 40,605 1,491
2003 34,072 36,558 2,487 36,373 2,301
2004 31,893 35,208 3,315 34,951 3,058
2005 44,624 45,450 825 45,527 903
2006 44,584 45,299 716 45,376 793
2007 37,379 38,970 1,591 38,956 1,577
2008 37,772 40,119 2,346 39,675 1,903
2009 31,529 34,419 2,890 33,942 2,413
2010 36,123 39,880 3,757 39,323 3,200
2011 45,226 45,927 701 46,035 809
2012 39,367 40,945 1,578 40,954 1,587
2013 31,041 33,528 2,487 33,393 2,351
2014 22,728 25,246 2,518 24,920 2,192
2015 15,607 18,504 2,897 18,151 2,543
2016 9,681 13,331 3,650 12,926 3,244
2017 24,180 28,615 4,435 28,174 3,994
2018 18,721 23,241 4,520 22,909 4,189
2019 26,702 31,876 5,173 31,593 4,891
2020 21,508 28,048 6,540 27,766 6,258
Attachment 2 - page 69 of 96

14 Figure 3 - Lopez Lake Storage Annual Low Point

2.2.2 Downstream releases
The Project modeling shows no change in non-spill downstream releases. The modeling shows that Lopez Lake can deliver 4,100 AF of non-spill downstream releases each year in both the baseline and Project scenarios in both historical hydrology and climate change hydrology models.

2.2.3 Evaporation
The higher Lopez Lake storage levels result in higher evaporation with the contract changes. Increases due to increased storage is deducted from each contractor’s storage account in proportion to their storage account volumes. Annual Average Evaporation Volumes for both the Baseline and Project modeling are shown in Tables 15 and 16.

Table 15 - Annual Evaporation Volumes, Maximize Lopez Storage (E) Baseline (D) With Project
(E)
Difference Increase due to
Storage of Lopez
water
Acre-Feet Acre-Feet Acre-Feet Acre-Feet
Average 2,645 2,708 62 62
Total 137,545 140,792 3,247 3,247
1969 2,608 2,615 8 8
1970 3,962 3,976 14 14
1971 3,984 4,043 58 58
1972 3,430 3,544 114 114
1973 3,356 3,495 139 139
1974 3,460 3,509 50 50
1975 3,311 3,354 44 44
0 5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
0% 20% 40% 60% 80% 100% Storage, Acre-Feet
Exceedance
Baseline (D) Maximize Lopez Storage (E) Maximize SWP Storage (F) Attachment 2 - page 70 of 96

15 1976 3,283 3,380 97 97
1977 2,978 3,102 124 124
1978 3,617 3,655 38 38
1979 3,656 3,671 15 15
1980 3,349 3,359 10 10
1981 3,923 3,938 15 15
1982 3,160 3,173 14 14
1983 3,032 3,03644
1984 3,538 3,548 10 10
1985 3,135 3,184 49 49
1986 2,881 2,898 17 17
1987 2,561 2,586 25 25
1988 2,824 2,851 27 27
1989 2,769 2,822 53 53
1990 2,391 2,494 103 103
1991 2,010 2,090 79 79
1992 1,932 2,013 81 81
1993 2,282 2,368 87 87
1994 2,123 2,267 144 144
1995 2,688 2,726 37 37
1996 3,196 3,20599
1997 3,402 3,41199
1998 2,687 2,69155
1999 2,835 2,84277
2000 3,095 3,106 11 11
2001 2,867 2,87799
2002 2,594 2,634 40 40
2003 2,475 2,553 78 78
2004 2,462 2,585 123 123
2005 2,353 2,382 30 30
2006 2,524 2,53499
2007 2,560 2,597 37 37
2008 2,247 2,307 60 60
2009 2,313 2,415 101 101
2010 2,008 2,111 103 103
2011 2,202 2,222 21 21
2012 2,007 2,034 27 27
2013 1,772 1,830 58 58
2014 1,669 1,765 96 96
2015 1,298 1,431 133 133
Attachment 2 - page 71 of 96

16 2016 1,198 1,361 164 164
2017 2,002 2,197 195 195
2018 1,732 1,967 234 234
2019 970 1,087 117 117
2020 836 950 114 114
Table 16 - Annual Evaporation Volumes, Maximize SWP Storage (F) Baseline (D) With Project
(F)
Difference Increase due to
Storage of SWP
water
Increase due to
Storage of Lopez
water
Acre-Feet Acre-Feet Acre-Feet Acre-Feet Acre-Feet
Average 2,645 2,702 57 41 16
Total 137,545 140,507 2,962 2,135 827
1969 2,608 2,615 8 8 0
1970 3,962 3,978 16 12 5
1971 3,984 4,043 59 46 14
1972 3,430 3,540 110 87 23
1973 3,356 3,488 133 106 27
1974 3,460 3,508 48 40 9
1975 3,311 3,357 46 41 5
1976 3,283 3,375 93 78 14
1977 2,978 3,087 109 84 25
1978 3,617 3,651 34 24 9
1979 3,656 3,671 15 15 0
1980 3,349 3,360 10 10 0
1981 3,923 3,939 16 16 0
1982 3,160 3,173 13 13 0
1983 3,032 3,036 4 4 0
1984 3,538 3,549 11 7 4
1985 3,135 3,186 50 39 11
1986 2,881 2,898 17 15 2
1987 2,561 2,583 21 16 5
1988 2,824 2,842 19 4 15
1989 2,769 2,812 43 16 27
1990 2,391 2,477 86 43 42
1991 2,010 2,073 63 8 54
1992 1,932 1,997 65 0 65
1993 2,282 2,353 71 16 56
1994 2,123 2,248 125 62 63
1995 2,688 2,722 34 21 13
1996 3,196 3,205 10 10 0
Attachment 2 - page 72 of 96

17 1997 3,402 3,412 10 10 0
1998 2,687 2,692 6 6 0
1999 2,835 2,843 8 8 0
2000 3,095 3,107 12 11 0
2001 2,867 2,876 9 9 0
2002 2,594 2,631 37 32 5
2003 2,475 2,547 72 60 12
2004 2,462 2,576 114 95 19
2005 2,353 2,381 28 23 6
2006 2,524 2,534 10 10 0
2007 2,560 2,599 39 34 5
2008 2,247 2,302 54 45 9
2009 2,313 2,397 84 66 18
2010 2,008 2,095 87 69 19
2011 2,202 2,221 19 16 3
2012 2,007 2,035 28 25 4
2013 1,772 1,829 57 48 9
2014 1,669 1,758 90 73 17
2015 1,298 1,415 117 86 30
2016 1,198 1,338 140 104 36
2017 2,002 2,178 176 134 42
2018 1,732 1,949 217 166 51
2019 970 1,081 111 85 27
2020 836 944 108 81 27
Attachment 2 - page 73 of 96

18 2.2.4 Annual and Monthly Spill Volumes
Annual spill volumes are shown in Tables 17 and 18, and annual spill volume exceedances are shown in Table 19. The Project under both scenarios (E & F) increases spill events in the climate change hydrology studies from 20 out of the 52-year study period to 21 years out of the 52-year study period. Annual spill volume exceedances are shown graphically in Figure 4. Of the total increase in spills in the Maximize SWP storage scenario (F), 77% of the spills are due to storage of SWP water in Lopez Reservoir, and the remaining 23% of the increase is due to increased storage of Lopez water.

Table 17 - Modeled Annual Spills with Maximize Lopez Storage (E) Annual Spill Volume Days of Spill
Baseline
(D)
With
Project (E)
Difference Baseline
(D)
With
Project (E)
Difference
Acre-Feet Acre-Feet Acre-Feet Days Days Days
Average 5,591 6,119 529 30 35 5
Total 290,711 318,195 27,484 1,558 1,811 253
Count 20 21 1 20 21 1
1969 9,806 10,224 419 121 121 0
1970 820 1,509 690 29 32 3
1971 0 0 0 0 0 0
1972 0 0 0 0 0 0
1973 0 0 0 0 0 0
1974 768 4,073 3,305 21 65 44
1975 0 0 0 0 0 0
1976 0 0 0 0 0 0
1977 0 0 0 0 0 0
1978 14,308 16,088 1,780 82 86 4
1979 431 1,224 793 18 19 1
1980 26,164 26,989 825 93 96 3
1981 828 1,621 793 27 29 2
1982 833 1,754 922 36 38 2
1983 88,114 88,839 725 202 208 6
1984 6,306 6,729 423 120 128 8
1985 0 0 0 0 0 0
1986 5,439 7,210 1,772 49 54 5
1987 0 0 0 0 0 0
1988 0 0 0 0 0 0
1989 0 0 0 0 0 0
1990 0 0 0 0 0 0
1991 0 0 0 0 0 0
1992 0 0 0 0 0 0
1993 0 0 0 0 0 0
Attachment 2 - page 74 of 96

19 1994 0 0 0 0 0 0
1995 7,462 10,362 2,900 80 91 11
1996 11,141 11,768 627 76 82 6
1997 34,945 35,632 687 120 121 1
1998 58,673 59,495 822 169 188 19
1999 3,342 3,722 380 103 137 34
2000 4,298 5,100 802 65 64 -1
2001 5,621 6,428 807 54 52 -2
2002 0 0 0 0 0 0
2003 0 0 0 0 0 0
2004 0 0 0 0 0 0
2005 0 3,191 3,191 0 58 58
2006 4,414 5,371 957 40 63 23
2007 0 0 0 0 0 0
2008 0 0 0 0 0 0
2009 0 0 0 0 0 0
2010 0 0 0 0 0 0
2011 6,999 10,865 3,866 53 79 26
2012 0 0 0 0 0 0
2013 0 0 0 0 0 0
2014 0 0 0 0 0 0
2015 0 0 0 0 0 0
2016 0 0 0 0 0 0
2017 0 0 0 0 0 0
2018 0 0 0 0 0 0
2019 0 0 0 0 0 0
2020 0 0 0 0 0 0
Table 18 - Modeled Annual Spills with Maximize SWP Storage (F) Annual Spill Volume Days of Spill
Baseline
(D)
With
Project (F)
Difference Baseline
(D)
With
Project (F)
Difference
Acre-Feet Acre-Feet Acre-Feet Days Days Days
Average 5,591 6,106 516 30 35 5
Total 290,711 317,520 26,809 1,558 1,827 269
Count 20 21 1 20 21 1
1969 9,806 10,192 386 121 121 0
1970 820 1,562 743 29 37 8
1971 0 0 0 0 0 0
1972 0 0 0 0 0 0
1973 0 0 0 0 0 0
Attachment 2 - page 75 of 96

20 1974 768 3,900 3,131 21 63 42
1975 0 0 0 0 0 0
1976 0 0 0 0 0 0
1977 0 0 0 0 0 0
1978 14,308 15,816 1,508 82 85 3
1979 431 1,307 877 18 21 3
1980 26,164 26,977 812 93 94 1
1981 828 1,719 890 27 31 4
1982 833 1,718 886 36 38 2
1983 88,114 88,826 711 202 203 1
1984 6,306 6,846 541 120 139 19
1985 0 0 0 0 0 0
1986 5,439 7,210 1,771 49 54 5
1987 0 0 0 0 0 0
1988 0 0 0 0 0 0
1989 0 0 0 0 0 0
1990 0 0 0 0 0 0
1991 0 0 0 0 0 0
1992 0 0 0 0 0 0
1993 0 0 0 0 0 0
1994 0 0 0 0 0 0
1995 7,462 10,023 2,561 80 89 9
1996 11,141 11,914 774 76 82 6
1997 34,945 35,721 776 120 125 5
1998 58,673 59,576 903 169 182 13
1999 3,342 3,739 397 103 145 42
2000 4,298 5,247 949 65 67 2
2001 5,621 6,499 878 54 54 0
2002 0 0 0 0 0 0
2003 0 0 0 0 0 0
2004 0 0 0 0 0 0
2005 0 3,010 3,010 0 57 57
2006 4,414 5,404 990 40 63 23
2007 0 0 0 0 0 0
2008 0 0 0 0 0 0
2009 0 0 0 0 0 0
2010 0 0 0 0 0 0
2011 6,999 10,313 3,315 53 77 24
2012 0 0 0 0 0 0
2013 0 0 0 0 0 0
Attachment 2 - page 76 of 96

21 2014 0 0 0 0 0 0
2015 0 0 0 0 0 0
2016 0 0 0 0 0 0
2017 0 0 0 0 0 0
2018 0 0 0 0 0 0
2019 0 0 0 0 0 0
2020 0 0 0 0 0 0
Table 19 - Modeled Annual Spill Volume Exceedances
Baseline (D) Maximize Lopez
Storage (E)
Maximize SWP
Storage (F)
Acre-Feet Acre-Feet
2% 88,114 88,839 88,826
4% 58,673 59,495 59,576
6% 34,945 35,632 35,721
8% 26,164 26,989 26,977
9% 14,308 16,088 15,816
11% 11,141 11,768 11,914
13% 9,806 10,865 10,313
15% 7,462 10,362 10,192
17% 6,999 10,224 10,023
19% 6,306 7,210 7,210
21% 5,621 6,729 6,846
23% 5,439 6,428 6,499
25% 4,414 5,371 5,404
26% 4,298 5,100 5,247
28% 3,342 4,073 3,900
30% 833 3,722 3,739
32% 828 3,191 3,010
34% 820 1,754 1,719
36% 768 1,621 1,718
38% 431 1,509 1,562
40% 0 1,224 1,307
42% 0 0 0
43% 0 0 0
45% 0 0 0
47% 0 0 0
49% 0 0 0
51% 0 0 0
53% 0 0 0
Attachment 2 - page 77 of 96

22 55% 0 0 0
57% 0 0 0
58% 0 0 0
60% 0 0 0
62% 0 0 0
64% 0 0 0
66% 0 0 0
68% 0 0 0
70% 0 0 0
72% 0 0 0
74% 0 0 0
75% 0 0 0
77% 0 0 0
79% 0 0 0
81% 0 0 0
83% 0 0 0
85% 0 0 0
87% 0 0 0
89% 0 0 0
91% 0 0 0
92% 0 0 0
94% 0 0 0
96% 0 0 0
98% 0 0 0
Attachment 2 - page 78 of 96

23 Figure 4 - Annual Spill Volume Exceedance
Average monthly spill volumes are shown in Figure 5. Increases in spills are generally concentrated in February through April, with the largest increase in March.

Figure 5 - Average Monthly Spills at Lopez Reservoir
0 10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Annual Volume, Acre-Feet Exceedance
Baseline (D) Maximize Lopez Storage (E) Maximize SWP Imports (F) 0 500
1,000
1,500
2,000
2,500
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Average Monthly Spill Volume, AF ■ Baseline (D) ■ Maximize Lopez Storage (E) ■ Maximize SWP Storage (F) Attachment 2 - page 79 of 96

24 2.2.5 Peak Flow Rates
Peak flow rates due to spills at selected locations along Arroyo Grande are shown in Tables 20 through

22. Peak flow rates are shown graphically in figures 6 through 8.

Table 20 - Annual Peak Spill Rates below Lopez Dam
Climate Change
Baseline (D)
Maximize
Lopez Storage
(E)
Difference Maximize SWP
Storage (F)
Difference

CFS CFS CFS CFS CFS
1969 301 301 0 301 0
1970 70 107 37 114 44
1971 0 0 0 0 0
1972 0 0 0 0 0
1973 0 0 0 0 0
1974 32 193 161 193 161
1975 0 0 0 0 0
1976 0 0 0 0 0
1977 0 0 0 0 0
1978 1,560 2,006 446 2,006 446
1979 44 234 189 232 188
1980 1,725 1,726 0 1,726 0
1981 76 308 232 307 231
1982 85 296 212 276 191
1983 2,740 2,740 0 2,740 0
1984 522 522 0 522 0
1985 0 0 0 0 0
1986 602 603 0 603 0
1987 0 0 0 0 0
1988 0 0 0 0 0
1989 0 0 0 0 0
1990 0 0 0 0 0
1991 0 0 0 0 0
1992 0 0 0 0 0
1993 0 0 0 0 0
1994 0 0 0 0 0
1995 707 707 0 707 0
1996 783 784 0 784 0
1997 1,030 1,030 0 1,030 0
1998 1,231 1,231 0 1,231 0
1999 182 182 0 182 0
2000 140 272 132 270 130
Attachment 2 - page 80 of 96

25 2001 756 1,188 431 1,190 434
2002 0 0 0 0 0
2003 0 0 0 0 0
2004 0 0 0 0 0
2005 0 300 300 300 300
2006 369 369 0 369 0
2007 0 0 0 0 0
2008 0 0 0 0 0
2009 0 0 0 0 0
2010 0 0 0 0 0
2011 451 658 207 658 207
2012 0 0 0 0 0
2013 0 0 0 0 0
2014 0 0 0 0 0
2015 0 0 0 0 0
2016 0 0 0 0 0
2017 0 0 0 0 0
2018 0 0 0 0 0
2019 0 0 0 0 0
2020 0 0 0 0 0
Figure 6 - Annual Peak Spill Rates below Lopez Dam (D,F) 0 500
1000
1500
2000
2500
3000 Flow, cfs
Baseline (D) Increase Due to Project, Maximize SWP Storage (F) I I I II I I II I 11 I ■ ■
Attachment 2 - page 81 of 96

26 Table 21 - Annual Peak Spill Rates at AG stream gage Climate Change
Baseline (D)
Maximize
Lopez Storage
(E)
Difference Maximize SWP
Storage(F)
Difference

CFS CFS CFS CFS CFS
1969 1534.6 1534.6 0.0 1534.6 0.0
1970 142.1 166.5 24.5 166.5 24.5
1971 36.0 36.0 0.0 36.0 0.0
1972 96.4 96.4 0.0 96.4 0.0
1973 349.5 349.5 0.0 349.5 0.0
1974 130.8 286.5 155.7 286.5 155.7
1975 18.4 18.4 0.0 18.4 0.0
1976 15.1 15.1 0.0 15.1 0.0
1977 14.0 14.0 0.0 14.0 0.0
1978 1706.7 2152.9 446.2 2152.9 446.2
1979 106.8 334.3 227.5 332.9 226.1
1980 1955.6 1955.8 0.2 1955.8 0.2
1981 124.2 337.9 213.7 336.5 212.3
1982 283.4 543.9 260.6 523.2 239.8
1983 5647.4 5647.6 0.2 5647.6 0.2
1984 891.6 891.8 0.2 891.8 0.2
1985 14.8 14.8 0.0 14.8 0.0
1986 830.8 831.0 0.2 831.0 0.2
1987 13.0 13.0 0.0 13.0 0.0
1988 18.7 18.7 0.0 18.7 0.0
1989 35.8 35.8 0.0 35.8 0.0
1990 8.5 8.5 0.0 8.5 0.0
1991 294.9 294.9 0.0 294.9 0.0
1992 465.0 465.0 0.0 465.0 0.0
1993 492.7 492.7 0.0 492.7 0.0
1994 12.9 12.9 0.0 12.9 0.0
1995 1358.8 1358.8 0.0 1358.8 0.0
1996 931.3 931.5 0.2 931.5 0.2
1997 1334.6 1334.8 0.2 1334.8 0.2
1998 1718.3 1718.5 0.2 1718.5 0.2
1999 202.4 202.5 0.2 202.5 0.2
2000 182.8 345.9 163.2 344.4 161.7
2001 1954.6 2385.9 431.2 2388.4 433.7
2002 9.6 9.6 0.0 9.6 0.0
2003 30.4 30.4 0.0 30.4 0.0
2004 51.1 51.1 0.0 51.1 0.0
Attachment 2 - page 82 of 96

27 2005 276.7 425.7 149.1 425.7 149.1
2006 504.4 504.6 0.2 504.6 0.2
2007 17.9 17.9 0.0 17.9 0.0
2008 440.7 440.7 0.0 440.7 0.0
2009 25.5 25.5 0.0 25.5 0.0
2010 274.7 274.7 0.0 274.7 0.0
2011 761.2 1419.2 658.0 1419.2 658.0
2012 20.5 20.5 0.0 20.5 0.0
2013 13.3 13.3 0.0 13.3 0.0
2014 12.0 12.0 0.0 12.0 0.0
2015 14.1 14.1 0.0 14.1 0.0
2016 6.0 6.0 0.0 6.0 0.0
2017 463.1 463.1 0.0 463.1 0.0
2018 9.7 9.7 0.0 9.7 0.0
2019 236.6 236.6 0.0 236.6 0.0
2020 23.2 23.2 0.0 23.2 0.0
Figure 7 - Annual Peak Spill Rates at AG stream gage (D, F) 0 1000
2000
3000
4000
5000
6000 Flow, cfs
■ Baseline (D) ■ Increase Due to Project, Maximize SWP Storage (F) Attachment 2 - page 83 of 96

28 Table 22 - Annual Peak Spill Rates at 22nd Street Bridge Baseline
(D)
Maximize
Lopez Storage
(E)
Difference Maximize SWP
Storage (F)
Difference

CFS CFS CFS CFS CFS
1969 1898.8 1898.8 0.0 1898.8 0.0
1970 145.4 167.9 22.4 167.9 22.4
1971 44.7 44.7 0.0 44.7 0.0
1972 96.8 96.8 0.0 96.8 0.0
1973 378.5 378.2 -0.3 378.2 -0.3
1974 198.1 299.6 101.4 299.5 101.4
1975 23.9 23.9 0.0 23.9 0.0
1976 14.7 14.6 0.0 14.6 0.0
1977 15.5 15.5 0.0 15.5 0.0
1978 1866.3 2312.6 446.2 2312.6 446.2
1979 126.9 340.0 213.1 338.6 211.7
1980 1970.6 1970.8 0.2 1970.8 0.2
1981 132.2 337.6 205.4 336.3 204.1
1982 305.8 556.7 250.9 537.5 231.7
1983 5603.0 5603.1 0.2 5603.1 0.2
1984 906.9 907.0 0.2 907.0 0.2
1985 16.1 16.1 -0.1 16.1 -0.1
1986 821.8 818.3 -3.5 818.2 -3.6
1987 13.0 12.9 -0.1 12.9 -0.1
1988 17.7 17.6 -0.1 17.6 -0.1
1989 35.8 35.8 0.0 35.8 0.0
1990 8.5 8.5 0.0 8.5 0.0
1991 309.5 307.1 -2.4 307.1 -2.4
1992 489.2 485.3 -3.9 485.3 -3.9
1993 533.4 528.8 -4.5 528.8 -4.6
1994 31.8 31.7 -0.1 31.7 -0.1
1995 1465.1 1465.1 0.0 1465.1 0.0
1996 974.1 968.8 -5.4 968.5 -5.6
1997 1432.4 1432.6 0.2 1432.6 0.2
1998 1936.5 1936.7 0.2 1936.7 0.2
1999 196.2 195.3 -0.9 195.3 -1.0
2000 200.8 384.5 183.7 383.1 182.3
2001 2407.3 2838.6 431.2 2841.1 433.7
2002 11.7 11.7 0.0 11.7 0.0
Attachment 2 - page 84 of 96

29 2003 37.4 37.4 0.0 37.4 0.0
2004 49.7 49.2 -0.5 49.2 -0.5
2005 330.5 430.0 99.6 430.0 99.5
2006 512.3 508.2 -4.1 508.1 -4.2
2007 18.5 18.5 0.0 18.5 0.0
2008 429.3 425.2 -4.1 425.1 -4.1
2009 25.6 25.3 -0.3 25.3 -0.3
2010 255.0 195.8 -59.1 195.8 -59.1
2011 813.1 1459.7 646.6 1459.7 646.6
2012 19.2 19.0 -0.2 19.0 -0.2
2013 13.3 13.3 0.0 13.3 0.0
2014 11.1 9.8 -1.3 9.8 -1.3
2015 14.1 14.1 0.0 14.1 0.0
2016 7.5 7.5 0.0 7.5 0.0
2017 488.1 488.1 0.0 488.1 0.0
2018 10.4 10.4 0.0 10.4 0.0
2019 156.6 156.6 0.0 156.6 0.0
2020 12.1 12.1 0.0 12.1 0.0
Figure 8 - Annual Peak Spill Rates at 22nd Street Bridge, maximize SWP storage (D, F) -1000
0 1000
2000
3000
4000
5000
6000 Flow, cfs
Baseline (D) Increase Due to Project, Maximize SWP Storage (F) Channel Capacity Capacity of AG Creek Flood
Control Channel
---------~ ----------------
•--••--- I_I ___
••• _111 I ___
ll_l_!I __ - I._
ro°> {'> ::\1,
~ :\<,
",,°> :\'b
~ 9,"> ~ ~ ",,°> ~ ~ ?P {'> ?,,,,
",,~
?,<o {'> ?,°> {'> !::)1,
1,<::l
!::)<,
~ c'b
1,<::l ~",, 1,<::> ~ ~ 1,<::> ~ cf> 1,<::>
- -
Attachment 2 - page 85 of 96

30 2.2.6 Storage Accounts – Maximize Lopez Storage (E)
Three of the five contractors have supplies in excess of demands at the 2035 level of demand – Pismo Beach, Oceano CSD, and Arroyo Grande. Pismo Beach, Oceano CSD, and Arroyo Grande are modeled as storing Lopez Lake water in Lopez Lake. An accounting of the water in these storage accounts for each year is shown in Tables 23 through 25.

Table 23 - Pismo Beach Use of Storage Account under maximize Lopez Storage (E) Calendar
Year
Delivered to
Storage
Delivery
from Storage
Lost to
Evaporation
Lost to Spills Resulting End
of Year Storage
Acre-Feet Acre-Feet Acre-Feet Acre-Feet Acre-Feet
Average 336 44 32 213 487
1969 399 0 0 0 0
1970 450 3 22 0 299
1971 443 0 59 0 677
1972 442 0 92 0 1,028
1973 443 0 110 0 1,357
1974 483 70 11 1,692 0
1975 443 0 25 0 386
1976 312 0 59 0 768
1977 0 533 75 0 506
1978 418 10 3 555 0
1979 444 21 16 141 211
1980 416 28 1 570 0
1981 431 26 15 148 197
1982 421 5 3 607 0
1983 299 5 0 303 0
1984 407 1 12 0 174
1985 443 0 40 0 571
1986 437 36 2 954 0
1987 0 200 14 0 116
1988 0 113 4 0 0
1989 443 0 8 0 90
1990 0 235 28 0 185
1991 0 204 2 0 0
1992 0 3 0 0 0
1993 443 0 6 0 82
1994 443 0 38 0 483
1995 422 17 2 890 0
1996 414 34 1 284 0
1997 403 29 14 72 205
1998 331 15 0 543 0
Attachment 2 - page 86 of 96

31 1999 408 19 0 167 0
2000 428 37 8 209 136
2001 414 37 10 307 176
2002 443 0 33 0 562
2003 443 0 58 0 943
2004 442 0 86 0 1,300
2005 468 83 13 1,443 177
2006 467 22 1 541 0
2007 443 0 21 0 390
2008 94 0 40 0 765
2009 324 0 61 0 1,009
2010 443 0 62 0 1,292
2011 466 48 3 1,649 0
2012 442 0 15 0 390
2013 443 0 38 0 791
2014 0 151 56 0 941
2015 247 0 61 0 945
2016 442 0 94 0 1,136
2017 443 0 107 0 1,469
2018 142 0 119 0 1,740
2019 0 0 58 0 1,923
2020 0 321 69 0 1,888
Table 24 - Oceano CSD Use of Storage Account under Maximize Lopez Storage (E) Calendar
Year
Delivered to
Storage
Delivery
from Storage
Lost to
Evaporation
Lost to Spills Resulting End
of Year Storage
Acre-Feet Acre-Feet Acre-Feet Acre-Feet Acre-Feet
Average 191 33 19 125 279
1969 194 0 0 0 0
1970 254 3 12 0 164
1971 268 0 34 0 393
1972 267 0 55 0 609
1973 268 0 66 0 810
1974 286 53 6 1,001 0
1975 268 0 15 0 227
1976 189 0 36 0 460
1977 0 308 44 0 320
1978 219 9 2 354 0
1979 261 21 8 81 114
1980 214 25 1 318 0
1981 246 25 8 83 105
1982 238 5 2 349 0
Attachment 2 - page 87 of 96

32 1983 112 5 0 169 0
1984 218 2 6 0 91
1985 268 0 23 0 333
1986 246 31 1 554 0
1987 0 104 8 0 76
1988 0 80 3 0 0
1989 268 0 5 0 57
1990 0 135 16 0 118
1991 0 125 1 0 0
1992 0 1 0 0 0
1993 268 0 4 0 54
1994 268 0 24 0 298
1995 218 13 1 541 0
1996 225 31 0 146 0
1997 203 28 7 40 108
1998 123 11 0 300 0
1999 207 18 0 81 0
2000 237 36 4 118 71
2001 221 35 6 168 93
2002 268 0 19 0 323
2003 268 0 34 0 556
2004 267 0 51 0 775
2005 269 69 7 854 96
2006 269 17 0 302 0
2007 268 0 12 0 229
2008 57 0 24 0 466
2009 196 0 39 0 649
2010 268 0 39 0 821
2011 263 36 2 1,030 0
2012 267 0 9 0 228
2013 268 0 23 0 472
2014 0 57 34 0 592
2015 149 0 38 0 587
2016 267 0 59 0 705
2017 268 53 63 0 857
2018 90 142 63 0 878
2019 0 118 28 0 891
2020 0 126 31 0 885
Attachment 2 - page 88 of 96

33 Table 25 - Arroyo Grande Use of Storage Account under Maximize Lopez Storage (E) Calendar
Year
Delivered to
Storage
Delivery
from Storage
Lost to
Evaporation
Lost to Spills Resulting End
of Year Storage
Acre-Feet Acre-Feet Acre-Feet Acre-Feet Acre-Feet
Average 162 0 22 117 317
1969 0 0 0 0 0
1970 165 0 11 0 154
1971 165 0 26 0 293
1972 166 0 38 0 420
1973 165 0 44 0 541
1974 165 0 4 701 0
1975 165 0 10 0 155
1976 166 0 23 0 297
1977 165 0 41 0 421
1978 165 0 2 584 0
1979 165 0 7 61 97
1980 166 0 0 262 0
1981 165 0 7 65 92
1982 165 0 1 256 0
1983 165 0 0 165 0
1984 166 0 11 0 155
1985 165 0 22 0 298
1986 165 0 1 462 0
1987 165 0 8 0 157
1988 166 0 23 0 299
1989 165 0 39 0 425
1990 165 0 53 0 536
1991 165 0 59 0 642
1992 166 0 70 0 738
1993 165 0 69 0 834
1994 165 0 79 0 919
1995 165 0 4 1,080 0
1996 166 0 0 165 0
1997 165 0 8 38 119
1998 165 0 0 283 0
1999 165 0 0 165 0
2000 166 0 4 94 67
2001 165 0 5 143 84
2002 165 0 14 0 236
2003 165 0 23 0 377
2004 166 0 34 0 509
2005 165 0 6 583 84
Attachment 2 - page 89 of 96

34 2006 165 0 0 249 0
2007 165 0 9 0 157
2008 166 0 16 0 306
2009 165 0 27 0 444
2010 165 0 28 0 581
2011 165 0 1 745 0
2012 166 0 6 0 159
2013 165 0 15 0 309
2014 165 0 25 0 449
2015 165 0 36 0 578
2016 166 0 57 0 686
2017 165 0 58 0 792
2018 165 0 62 0 896
2019 165 0 31 0 1,030
2020 166 0 39 0 1,156

2.2.7 Storage Accounts – Maximize SWP Imports
Three contractors have supplies in excess of demands at the 2035 level of demand – Pismo Beach, Oceano CSD, and Arroyo Grande. Pismo Beach and Oceano CSD are modeled as storing SWP water in Lopez Lake (via a swap with Lopez supply), and Arroyo Grande is modeled as storing Lopez Lake water in Lopez Lake. An accounting of the water in these storage accounts for each year is shown in Tables 26 through 28.

Table 26 - Pismo Beach Use of Storage Account under Maximize SWP Storage (F) Calendar
Year
Delivered to
Storage
Delivery
from Storage
Lost to
Evaporation
Lost to Spills Resulting End
of Year Storage
Acre-Feet Acre-Feet Acre-Feet Acre-Feet Acre-Feet
Average 354 45 36 239 693
1969 444 2 9 170 374
1970 478 33 14 383 417
1971 443 0 55 0 803
1972 442 1 88 0 1,157
1973 443 0 106 0 1,491
1974 494 51 20 1,493 417
1975 443 0 45 0 813
1976 312 1 74 0 1,050
1977 0 533 73 0 445
1978 448 5 10 501 375
1979 449 7 12 451 353
1980 446 5 10 399 386
1981 442 8 12 456 350
Attachment 2 - page 90 of 96

35 1982 4345 10 7670
1983 321 493 2700
1984 4420 100 431
1985 4430 450 827
1986 454 129 881 377
19870 278 140 85
19880 83200
1989 4430 190 422
19900 216 300 178
19910 178200
199200000
1993 4430 160 425
1994 4430 510 814
1995 45299 877 368
1996 439 188 7810
1997 444390 432
1998 313 1243 586 35
1999 45299 27 439
2000 44978 487 385
2001 43137 445 358
2002 4430 330 765
2003 4430 590 1,147
2004 4421 870 1,502
2005 481 38 11 1527 404
2006 482 408 428 408
2007 4430 340 814
2008 942 440 862
2009 3240 600 1,123
2010 4430 620 1,502
2011 481 3991,523 410
2012 4421 250 826
2013 4430 500 1,217
20140 249 600 910
2015 2470 630 1,092
2016 4421 1030 1,431
2017 4430 1150 1,756
2018 1950 1210 1,827
2019 4430 610 2,207
20200 305 680 1,835
Attachment 2 - page 91 of 96

36 Table 27 - Oceano CSD use of Storage Account under Maximize SWP Storage (F) Calendar
Year
Delivered to
Storage
Delivery
from Storage
Lost to
Evaporation
Lost to Spills Resulting End
of Year Storage
Acre-Feet Acre-Feet Acre-Feet Acre-Feet Acre-Feet
Average 215 27 22 146 422
1969 269 1 5 96 227
1970 281 12 9 241 245
1971 268 0 34 0 480
1972 267 0 54 0 696
1973 268 0 65 0 899
1974 306 38 13 895 259
1975 268 0 28 0 499
1976 189 0 46 0 642
1977 0 320 43 0 281
1978 271 3 6 315 228
1979 272 4 8 277 211
1980 272 5 6 240 234
1981 266 3 8 279 211
1982 263 4 6 463 0
1983 197 34 2 163 0
1984 267 0 7 0 263
1985 268 0 28 0 503
1986 275 8 6 537 227
1987 0 167 8 0 54
1988 0 53 1 0 1
1989 268 0 13 0 256
1990 0 127 18 0 110
1991 0 111 1 0 0
1992 0 0 0 0 1
1993 268 0 11 0 258
1994 268 0 32 0 495
1995 273 5 6 535 222
1996 265 11 6 472 0
1997 270 1 6 0 263
1998 226 82 2 377 23
1999 273 5 6 24 268
2000 272 5 5 298 234
2001 257 2 5 272 214
2002 268 0 21 0 461
2003 268 0 36 0 693
2004 267 0 53 0 909
2005 295 27 7 924 247
Attachment 2 - page 92 of 96

37 2006 295 28 5 260 250
2007 268 0 22 0 497
2008 57 1 27 0 528
2009 196 0 38 0 687
2010 268 0 38 0 917
2011 295 27 6 928 251
2012 267 0 16 0 505
2013 268 0 31 0 741
2014 0 148 36 0 559
2015 149 0 39 0 670
2016 267 0 64 0 875
2017 268 0 71 0 1,072
2018 118 0 74 0 1,117
2019 268 0 37 0 1,347
2020 0 181 41 0 1,124
Table 28 - Arroyo Grande Use of Storage Account under Maximize SWP Storage (F) Calendar
Year
Delivered to
Storage
Delivery
from Storage
Lost to
Evaporation
Lost to Spills Resulting End
of Year Storage
Acre-Feet Acre-Feet Acre-Feet Acre-Feet Acre-Feet
Average 162 0 21 118 303
1969 0 0 0 0 0
1970 165 0 11 2 152
1971 165 0 26 0 291
1972 166 0 38 0 419
1973 165 0 44 0 539
1974 165 0 6 699 0
1975 165 0 10 0 155
1976 166 0 23 0 297
1977 165 0 41 0 421
1978 165 0 2 584 0
1979 165 0 0 165 0
1980 166 0 0 166 0
1981 165 0 1 164 0
1982 165 0 0 165 0
1983 165 0 0 165 0
1984 166 0 11 1 154
1985 165 0 21 0 297
1986 165 0 1 461 0
1987 165 0 8 0 157
1988 166 0 23 0 299
Attachment 2 - page 93 of 96

38 1989 165 0 39 0 425
1990 165 0 53 0 536
1991 165 0 59 0 642
1992 166 0 70 0 737
1993 165 0 69 0 833
1994 165 0 80 0 918
1995 165 0 4 1,079 0
1996 166 0 0 166 0
1997 165 0 0 164 0
1998 165 0 0 165 0
1999 165 0 0 165 0
2000 166 0 0 165 0
2001 165 0 0 165 0
2002 165 0 9 0 156
2003 165 0 19 0 303
2004 166 0 29 0 439
2005 165 0 5 556 43
2006 165 0 0 207 0
2007 165 0 9 0 157
2008 166 0 16 0 306
2009 165 0 27 0 444
2010 165 0 28 0 581
2011 165 0 2 744 0
2012 166 0 6 0 159
2013 165 0 15 0 309
2014 165 0 25 0 449
2015 165 0 37 0 578
2016 166 0 57 0 686
2017 165 0 58 0 792
2018 165 0 62 0 895
2019 165 0 31 0 1,029
2020 166 0 39 0 1,155
Attachment 2 - page 94 of 96

39 2.3 Spill Minimization Analysis
Modeling was requested that would look at ways to minimize the number of spill events under the project model. A set of sensitivity runs based on scenario F (Maximize SWP Storage with climate change hydrology) were modeled in which limitations were placed on the amount of SWP water that could be stored by any contractor. When reservoir spills occur in the modeling, the model prioritized spills from storage accounts in the following order consistent with the proposed contract changes:

1. Spill from Lopez SWP accounts in proportion to their storage volumes

2. Spill from Lopez storage accounts in proportion to their storage volumes

3. Spill from Flood Control District account when all other storage accounts have been depleted.

This method often results in SWP storage accounts being spilled on the leading edge of the inflow hydrograph, and Lopez storage accounts being spilled closer to the peak of the hydrograph. Some years both accounts spill on the same day. Limiting the amount of SWP water that can be stored in Lopez Reservoir will result in a lower volume of spill in most years, but often does not reduce the increase in annual peak flow rates below Lopez Reservoir. An example of this is shown for a spill event in 1978, the largest spill event in the period of record, in Figure 9 below. In addition to the contract change modeling, results are shown for a modeling study in which the SWP storage accounts are limited to 10% of the contractor’s annual demand, which is a very restrictive limitation and yet has a negligible effect on peak flow rates in this event.

Figure 9 - 1978 Spill Event
Figure 10 shows daily spill flows for a spill event in 2001. Here, putting a 10% of annual demand limitation on SWP storage reduces the increase in spill by less than 50%, but a 25% of annual demand limitation brings spills back to the peak flow of the full with project study. 0 500
1,000
1,500
2,000 Spill Flow, cfs
■ Baseline ■ With Contract Change ■ With Contract Change and 10% Storage Limitation I
:'.\Cb :'.\Cb :'.\Cb :'.\Cb :'.\Cb :'.\Cb :'.\Cb :'.\Cb :'.\Cb :'.\Cb ~~ \~ ~~ >l ~~ ~~ \~ ~~ ~""°' ~""°' '>;,\"Y '>;,'\V '>;,'\' '>;,\~ '>;,f> '>;,\<o '>;,'0 '>;,\'1> '?\°' '>;,\...,,~ Attachment 2 - page 95 of 96

40 Figure 10 - 2001 Spill Event
The effect of a SWP storage limitation on annual spill volumes are shown in Table 29.

Table 29 - Effect of SWP Storage Limitations on Spill Volumes SWP Storage Limitation Total Spill Volume, 1969-2020
Base line Case (D) – 290,711
Project (F) – SWP Storage Limited to 10% of annual demand 302,853 Project (F) – SWP Storage Limited to 25% of annual demand 310,655 Project (F) – SWP Storage Limited to 50% of annual demand 314,479 Project (F) – SWP Storage Limited to 100% of annual demand 317,521 Project (F) – No Limitation 317,521
Note: Annual demand is that shown in Table 2
0 200
400
600
800
1,000
1,200 Flow, cfs
Baseline With Contract Change
With Contract Change and 10% Storage Limitation With Contract Change and 25% Storage Limitation ■
■
■
■
Attachment 2 - page 96 of 96

day , 2022
PRESENT: Supervisors
ABSENT:

RESOLUTION NO._________

RESOLUTION APPROVING EXECUTION OF AMENDED

AND RESTATED WATER SUPPLY CONTRACTS
WITH THE ZONE 3 CONTRACTORS AND ADOPTING A NEGATIVE DECLARATION PURSUANT TO PUBLIC RESOURCES CODE SECTION 21000 ET SEQ. (CEQA) The following Resolution is now offered and read:

WHEREAS, the San Luis Obispo County Flood Control and Water Conservation District (District) Zone 3 Contractors (Contractors) receive water entitlements from Lopez Reservoir via individual but substantially identical Water Supply Contracts (Contracts) with the District that were originally executed in 1966 and subsequently amended and restated; and
WHEREAS, the Contractors wish to again restate and amend the Contracts to provide storage rights for each of the Contractors to store their unused entitlement, surplus water and State Water Project Water year over year in Lopez Reservoir and to permit the refunding of the bonds associated with the completed Lopez Dam Seismic Retrofit Project in order to reduce the costs of debt service (which purposes may advance on a similar schedule or on different schedules); and WHEREAS, providing storage rights allows for flexibility of multi-year water resource planning and enhanced water supply portfolio management for the Contractors; and WHEREAS, the proposed Amended and Restated Contracts continue to make clear that legally required water releases, including, without limitation, releases pursuant to any Habitat Conservation Plan, shall have first priority when the District is distributing Lopez Reservoir water; and WHEREAS, Environmental Division staff prepared a Negative Declaration for the proposed Amended and Restated Contracts (Project) which was approved by the Environmental Division Manager and which concludes that the Project will not have a significant effect on the environment and that no mitigation measures are required; and
WHEREAS, prior to commencement of preparation of the Negative Declaration, staff conducted early consultation with potentially affected local, State and Federal agencies, Native American groups and other potentially interested parties but no substantive comments were received; and

BEFORE THE BOARD OF SUPERVISORS
of the

SAN LUIS OBISPO COUNTY FLOOD CONTROL

AND WATER CONSERVATION DISTRICT
ATTACHMENT 4

WHEREAS, notice of intent to adopt the proposed Negative Declaration was also published in a local newspaper and circulated to the relevant, local, State and Federal agencies through the State Clearinghouse and by mail and the thirty (30) day review period for the Project ended on February 28, 2022; the only comments received were from the County of San Luis Obispo Department of Parks and Recreation opining that the Project would have potential net benefits for recreational use; and WHEREAS, the form of the Amended and Restated Contracts and the Negative Declaration have been presented to and considered at this meeting of the Board of Supervisors together with a summary of all comments received during the public review process; and NOW, THEREFORE, BE IT RESOLVED AND ORDERED by the Board of Supervisors of the County of San Luis Obispo, State of California acting as the governing board of the San Luis Obispo County Flood Control and Water Conservation District, as follows:

Section 1. Recitals. The foregoing recitals are true and correct.

Section 2. Approval of Amended and Restated Water Supply Contracts. The Amended and Restated Water Supply Contracts substantially in the form presented to and considered during this meeting of the Board of Supervisors are hereby approved. Any one of the Chairperson or Vice Chairperson of said Board, and each of them (collectively, the Authorized Officers) is hereby authorized and directed, for and in the name and on behalf of the District, to execute and deliver an Amended and Restated Water Supply Contract on substantially similar terms to each Contractor, with such insertions and changes as may be approved by the Authorized Officer executing the same, such approval to be conclusively evidenced by such execution and delivery provided that said Amended and Restated Water Supply Contract is approved as to form and legal effect by County Counsel. To accommodate the possibility of financing purposes proceeding on a different schedule than water storage purposes reflected in the form of the Amended and Restated Water Supply Contracts, the amendments contemplated in the form of the Amended and Restated Water Supply Contracts related to financing matters may instead be effected under a separate amendment document with each Contractor which the Board of Supervisors hereby approves and authorizes the Authorized Officer to execute and deliver, with such changes therein as the Authorized Officer shall approve, subject to prior approval of such changes by County Counsel, such approval to be conclusively established by the execution and delivery thereof by the Authorized Officer.

Section 3. Negative Declaration. The Board of Supervisors reviewed and considered the information contained in the Negative Declaration and the whole record and finds that there is no substantial evidence that the Project will have a significant effect on the environment, that the Negative Declaration reflects the lead agency’s independent judgment and analysis, and hereby adopts the Negative Declaration.

Section 4. Effective Date. This Resolution shall take effect immediately upon its passage and adoption.

Upon motion of Supervisor _________________________, seconded by Supervisor _____________________, and on the following roll call vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAINING:
the foregoing resolution is hereby adopted on the ____ day of _________, 20___.

Chairperson of the Board of Supervisors
ATTEST:

WADE HORTON
Ex-Officio Clerk of the Board of Supervisors
By:

Deputy Clerk
(SEAL)
APPROVED AS TO FORM AND LEGAL EFFECT:

RITA L. NEAL
County Counsel
By:

Deputy County Counsel
Dated:

L:\Utilities\2022\_Resolutions\Zone 3 Amended Contracts rsl.docx July 29, 2022

Response to Comments on the Lopez Water Project Contract Changes Draft Negative Declaration
The Lopez Water Project Contract Changes Draft Negative Declaration (ND) was distributed on January 28, 2022, for a 30-day public comment period.

The following agencies, organizations, and members of the public provided comments on the Draft ND:

1. County of San Luis Obispo Parks and Recreation Department, Nick Franco, Director, provide comments by email dated January 26, 2022. The comments stated the following in support of the project: “It looks like a potential net benefit to improve the opportunity to keep the water levels higher than existing levels, so that would definitely be good for our recreational users.”
Response: The County acknowledged receipt of the comments. No other response or changes to the ND are required. A copy of the comment email is attached (Attachment A).

No other comments were received.
1 of 2
$77$&+0(17

From: Nick Franco
To: Monica J. Stillman
Subject: RE: Lopez Water Contract Changes draft ND
Date: Wednesday, January 26, 2022 3:39:14 PM
Attachments: image001.png
image002.jpg
Thanks for sharing! It looks like a potential net benefit to improve the opportunity to keep the water levels higher than existing levels, so that would definitely be good for our recreational uses.

Thanks,
Nick
From: Monica J. Stillman <[email protected]>
Sent: Wednesday, January 26, 2022 10:15 AM
To: Nick Franco <[email protected]>
Subject: Lopez Water Contract Changes draft ND
Hello Nick –
The attached Negative Declaration for the proposed Lopez Water Project Contract Changes Project is out for a 30-day comment period, from January 28 to February 28, 2022.

The project would change how water is stored in Lopez Reservoir, which could affect reservoir water levels and flows in Arroyo Grande Creek. It would not require any new construction or any changes to the existing Lopez Water Project infrastructure, and would not change existing water allocations or where the water is used.

Thanks! Monica
Monica J. Stillman
Environmental Specialist III
Public Works, County of San Luis Obispo
Tel: (805) 781-1046 | An APWA Accredited Agency
Website | Twitter | Map
APWA
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Item 8.d.

MEMORANDUM
TO: City Council
FROM: Whitney McDonald, City Manager
Timothy J. Carmel, City Attorney
SUBJECT: Consideration of First Amendment to the Communications Site Lease Agreement (“Lease”) with T-Mobile West, LLC (“T-Mobile”), for the Operation of a Telecommunications Facility Located at Branch Mill Road (Reservoir 4)
DATE: September 27, 2022
SUMMARY OF ACTION:

Approve the First Amendment to the Communications Site Lease Agreement (“Lease”) with T-Mobile West, LLC (“T-Mobile”), successor in interest to Cingular Wireless, for the operation of a telecommunications facility located at Branch Mill Road, commonly known as the Reservoir 4 site.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

T-Mobile currently pays $30,643.80 per year under the Lease, with an automatic adjustment of three percent (3%) annually. The proposed Amendment will increase the annual revenue by $8,120.28 per year, which will continue to escalate automatically on the anniversary of the commencement date by three percent (3%) of the rent for the previous year. The Amendment will extend the term for an additional twenty years.

RECOMMENDATION:

Approve the First Amendment to the Communications Site Lease Agreement (“Lease”) with T-Mobile West, LLC (“T-Mobile”), successor in interest to Cingular Wireless, for the operation of a telecommunications facility located at Branch Mill Road, commonly known as the Reservoir 4 site.

BACKGROUND:

On January 14, 2004, the City entered into a Lease with Cingular Wireless for the installation, maintenance and operation of telecommunications facilities on City-owned property, contained within a 510 square foot area located on Branch Mill Road (Reservoir 4). The Lease had an initial five-year term commencing December 16, 2003, which automatically extended for three additional five-year terms. The Lease will expire on December 16, 2023.

Item 8.d.

City Council
Consideration of First Amendment to the Communications Site Lease Agreement (“Lease”) with T-Mobile West, LLC (“T-Mobile”), for the Operation of a Telecommunications Facility Located at Branch Mill Road (Reservoir 4) September 27, 2022

In 2020, T-Mobile submitted a permit application to expand the leased area and update their equipment. They also requested an extension of the Lease term. Negotiations resulted in consensus on the following terms for an amended Lease:
 The leased premises is expanded by 135 square feet;
 The initial term shall be for seven years from the effective date of the amendment (this recaptures the time remaining from the original Lease), with three automatic five-year term extensions, unless T-Mobile provides notice that it will not renew at least sixty day prior to the commencement of the renewal term;  Monthly rent of $3,230.34 (increased to account for the additional leased area);  Automatic rent increases in the amount of 3% every year;  Reservoir maintenance provisions; and
 $1,000 administrative fee.

T-Mobile has approved and executed the amendment, a copy of which is attached.

ANALYSIS OF ISSUES:

The Amendment would provide revenue of $1,183,730.19 over the next 22 years, assuming that the Lease is not terminated early and there are no reductions in rent. If the lease is allowed to expire, the City can only expect to receive $49,618.02 for the remainder of the current term. While most of the telecommunications site leaseholders are trying to negotiate significant rent reductions, T-Mobile has agreed to maintain their current rent (prorated to account for the additional square footage) and annual escalation, has invested heavily in upgraded equipment and has been a good tenant; all of which indicate a good faith commitment to maintaining their tenancy in the long-term.

The Amendment also contains important maintenance provisions not currently included in the Lease. This is important, as Reservoir 4 is scheduled to be recoated in the near future.

ALTERNATIVES:

The following alternatives are presented for consideration:

1. Approve the Amendment and authorize the Mayor to execute it on behalf of the City;

2. Reject the Amendment;

3. Direct staff to negotiate alternate terms with regard to the Amendment; or

4. Provide other direction to staff.

Item 8.d.

City Council
Consideration of First Amendment to the Communications Site Lease Agreement (“Lease”) with T-Mobile West, LLC (“T-Mobile”), for the Operation of a Telecommunications Facility Located at Branch Mill Road (Reservoir 4) September 27, 2022

ADVANTAGES:

Cell tower leases represent a significant and important revenue source to the City.

Therefore, it is in the best interest of the City to approve the amendment to ensure this revenue stream for potentially 22 more years.

DISADVANTAGES:

No disadvantages are identified.

ENVIRONMENTAL REVIEW:

No environmental review is required for this item.

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. Proposed First Amendment to Communications Site Lease Agreement

2. Communications Site Lease Agreement

1 FIRST AMENDMENT TO COMMUNICATIONS SITE LEASE AGREEMENT This First Amendment to Communications Site Lease Agreement (the “Amendment”) is effective as of the date of execution by the last party to sign (the “Effective Date”) by and between the City of Arroyo Grande, a municipal corporation formed under the laws of the State of California (“Lessor”) and T-Mobile West LLC, a Delaware limited liability company (“Lessee”) (each a “Party”, or collectively, the “Parties”).

Lessor and Lessee (or their predecessors-in-interest) entered into that certain Communications Site Lease Agreement dated January 14, 2004 (the “Agreement”) regarding the real property located at Branch Mill Road, Arroyo Grande, CA 93420, commonly known as the Reservoir 4 site.

For good and valuable consideration, Lessor and Lessee agree as follows:

1. The Agreement is in full force and effect and neither Lessor nor Lessee is in breach under the terms of the Agreement.

2. Paragraph 1 of the Agreement, “Premises,” is amended in its entirety as follows:

Lessor is the owner of a parcel of land (the “Land”) located on Branch Mill Road, Arroyo Grande, California, commonly known as the Reservoir 4 site. The Land is more particularly described in Exhibit A attached hereto and incorporated by reference herein. Lessor hereby leases to Lessee and Lessee leases from Lessor, approximately six hundred forty-five (645) square feet of the Land and all access and utility easements, if any (the “Premises”), described in Exhibit B, attached hereto and incorporated by reference herein.

3. Paragraph 4 of the Agreement, “Term,” is amended in its entirety as follows:

The term of this Agreement shall be seven (7) years commencing on the Effective Date of this Amendment (“Commencement Date”) and terminating on the seventh anniversary of the Commencement Date (the “Term”), unless otherwise terminated as provided in paragraph 10 of the Agreement. Lessee shall have the right to extend the Term for three (3) successive five (5) year periods (the “Renewal Terms”) on the same terms and conditions as set forth herein. This Agreement shall automatically be extended for each successive Renewal Term unless Lessee notifies Lessor in writing of its intention not to renew at least sixty (60) days prior to commencement of the succeeding Renewal Term.

4. Paragraph 5 of the Agreement, “Rent,” is amended in its entirety as follows:
(a) Within fifteen (15) business days of the Commencement Date and on the first day of each month thereafter, Lessee shall pay to Lessor as rent Three Thousand Two Hundred Thirty Dollars and Thirty-Four Cents ($3,230.34) ^sϬϬϰϮϰͺE>'ͲϲϯϱϵϯͺDͺ,ĂƌĚĞŶŝŶŐEĂƚŝŽŶĂůͺ,ϮϬϭϵͺϭϬϭϵϵϲ 









 




 ATTACHMENT 1

2 per month (“Rent”). Rent for any fractional month at the beginning or at the end of the Term or Renewal Term shall be prorated. Rent shall be payable to Lessor at City of Arroyo Grande, 300 East Branch Street, Arroyo Grande, CA 93420; Attention Administrative Services Director. (b) Rent shall be increased on each anniversary of the Commencement Date by an amount equal to three percent (3%) of the Rent for the previous year during the initial Term and all Renewal Terms.
(c) Rent payments made after the tenth (10th) day of any month will be considered delinquent, and shall accrue interest at the rate of ten percent (10%) per annum on the delinquent account. If the tenth (10th) day of the month is on a Saturday, Sunday, or holiday, then Lessee has until the next business day for the payment to be received by Lessor.

5. Paragraph 19 is hereby added to the Agreement as follows:

Reservoir Maintenance. Lessee recognizes that the primary function of the reservoir upon which some of Lessee’s Facilities are located is to provide water storage for Lessor and its customers. Lessee understands that Lessor may find it necessary from time to time to interrupt Lessee’s use of the Premises for maintenance or repair of the reservoir, and Lessor understands that Lessee’s Facilities are operating 24 hours a day, seven days a week for first responders and other emergency services, including customer services. Lessor shall provide Lessee with at least thirty (30) days prior written notice for nonemergency maintenance and Lessee agrees to take the Lessee’s Facilities out of service for a period not to exceed ten (10) days. If major maintenance and/or repair is required, Lessee agrees to remove Lessee’s Facilities from the reservoir, provided that such removal shall not exceed a period of thirty (30) days. If Lessee is required to take Lessee’s Facilities out of service or to remove Lessee’s Facilities for any period, Lessee, at its sole cost and expense, may use a temporary transmission site or cell on wheels on the Land at a location sufficient to meet Lessee’s cover or engineering needs and approved by Lessor.

Rent shall be abated during any maintenance or repair period.

6. Within thirty (30) days of the full execution of this Agreement, Lessee shall pay to Lessor as additional consideration a one-time administrative fee of One Thousand Dollars ($1,000) for City transactional costs associated with preparation and processing of this Agreement.

7. All notices, requests, demands and other communications shall be in writing and shall be effective three (3) business days after deposit in the U.S. mail, certified, return receipt requested or upon receipt if personally delivered or sent via a nationally recognized courier to the addresses set forth below. Lessor or Lessee may from time to time designate any other address for this purpose by providing written notice to the other Party. 









 






3 If to Lessee: If to Lessor:

T-Mobile USA, Inc.
12920 SE 38th Street
Bellevue, WA 98006
Attn: Lease Compliance/SV00424A
City of Arroyo Grande
300 East Branch Street
Arroyo Grande, CA 93420
Attn: City Manager

8. Lessor will execute a Memorandum of Agreement at Lessee’s request. If the Land is encumbered by a deed, mortgage, or other security interest, Lessor will also execute a subordination, non-disturbance, and attornment agreement.

9. Except as expressly set forth in this Amendment, the Agreement otherwise is unmodified.

To the extent any provision contained in this Amendment conflicts with the terms of the Agreement, the terms and provisions of this Amendment shall control. Each reference in the Agreement to itself shall be deemed also to refer to this Amendment.

10. This Amendment may be executed in duplicate counterparts, each of which will be deemed an original. Signed electronic copies of this Amendment will legally bind the Parties to the same extent as originals.

11. Each of the Parties represents and warrants that it has the right, power, legal capacity and authority to enter into and perform its respective obligations under this Amendment.

Lessor represents and warrants to Lessee that the consent or approval of a third party has either been obtained or is not required with respect to the execution of this Amendment.

12. This Amendment will be binding on and inure to the benefit of the Parties herein, their heirs, executors, administrators, successors-in-interest and assigns. [Signatures on following page.]










 






4 IN WITNESS, the Parties execute this Amendment as of the Effective Date.

Lessor:

City of Arroyo Grande,
a municipal corporation formed under the
laws of the State of California
By:

Caren Ray Russom, Mayor
Date:

Attest:

By:

Jessica Matson, City Clerk
Approved as to Form:

Timothy J. Carmel
City Attorney
Lessee:

T-Mobile West LLC,
a Delaware limited liability company
By:

Print Name:

Title:

Date:

T-Mobile Contract Attorney
as to form
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Digitally
signed by AJ
Date:
2022.08.16
08:38:02
-04'00'










 




























 
















 
















 
















 






EXHIBIT B
The Premises consist of those areas described/shown below and where Lessee's communications antennae, equipment, cables and utilities occupy Lessor's Property. The Premises and the associated utility connections and access, including easements, ingress, egress, dimensions, and locations as described/shown below, are approximate only and may be adjusted or changed by Lessee at the time of construction to reasonably accommodate sound engineering criteria and the physical features of Lessor's Property. 









 






COMMUNICATIONS SITE LEASE AGREEMENT
This Communications Site Lease Agreement ( Ground) ( Agreement) is entered into this / 1M day of January, 2004, between PACIFIC BELL WIRELESS, LLC, a Nevada limited liability company doing business as CINGULAR WIRELESS (" Lessee"), and CITY OF ARROYO GRANDE, a municipal corporation formed under the laws of the State of California (" Lessor").

For good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. PREMISES.

Lessor is the owner of a parcel of land ( the " Land") located on Branch Mill Road, Arroyo Grande, California, commonly known as the Reservoir 4 site. The Land is more particularly described in Exhibit A annexed hereto. Lessor hereby leases to Lessee and Lessee leases from Lessor, approximately five hundred ten ( 510) square feet of the Land and all access and utility easements, if any, ( the " Premises") described in Exhibit B annexed hereto.

2. USE.

The Premises may be used by Lessee for reasonable activities in connection with the provision of mobile/ wireless communications services. Lessee shall, at Lessee' s sole cost and expense, make application for and obtain all licenses, permits and any and all other necessary approvals that may be required for Lessee' s intended use of the Premises.

Lessee is aware that Lessee must obtain a conditional use permit from the City of Arroyo Grande and comply with conditions imposed thereon as a condition precedent to occupancy of the Premises.

3. TESTS AND CONSTRUCTION.

Lessee shall have the right at any time, following the full execution of this Agreement, to enter upon the Land for the purposes of making appropriate engineering and boundary surveys, inspections, soil test borings, other reasonably necessary tests ( collectively, Tests"). Lessee shall comply with the repair provisions of Paragraph 15 below during and after all Tests and related work.

ATTACHMENT 2

4. TERM.

The term of this Agreement shall be five (5) years commencing on the date Lessee obtains a conditional use permit as specified in Paragraph 2 above ( Commencement Date) and terminating on the fifth anniversary of the Commencement Date ( the Term) unless otherwise terminated as provided in Paragraph 10. Lessee shall have the right to extend the Term for three ( 3) successive five ( 5) year periods ( The Renewal Terms) on the same terms and conditions as set forth herein. This Agreement shall automatically be extended for each successive Renewal Term unless Lessee notifies Lessor of its intention not to renew prior to commencement of the succeeding Renewal Term.

5. RENT.
a) Within fifteen ( 15) business days of the Commencement Date and on the first day of each month thereafter, Lessee shall pay to Lessor as rent Fifteen Hundred Dollars 1, 500. 00) per month (" Rent"). Rent for any fractional month at the beginning or at the end of the Term or Renewal Term shall be prorated. Rent shall be payable to Lessor at City of Arroyo Grande, P. O. Box 550, 214 East Branch Street, Arroyo Grande, CA 93421; Attention: Financial Services Director.
b) Rent shall be increased on each anniversary of the Commencement Date by an amount equal to three percent (3%) of the Rent for the previous year during the initial Term and all Renewal Terms.
c) Rent payments made after the tenth ( 10') day of any month will be considered delinquent, and shall accrue interest at the rate of ten percent ( 10%) per annum on the delinquent account. If the tenth ( 10') day of the month is on a Saturday, Sunday or holiday, then Lessee has until the next business day for the payment to be received by Lessor.
d) Within thirty( 30) days of the full execution of this Agreement, Lessee shall pay to Lessor as additional consideration a one time administrative fee of Two Thousand Dollars ($ 2, 000. 00) for City transactional costs associated with preparation and processing of this Agreement.

6. FACILITIES; UTILITIES; ACCESS.
a) Subject to the terms and conditions herein, Lessee has the right to erect, maintain and operate on the Premises radio communications facilities, utility lines, transmission lines, air conditioned equipment shelter(s), electronic equipment, radio transmitting and receiving antennas, supporting equipment and structures thereto(" Lessee Facilities"). In connection therewith, Lessee has the right to do all work necessary to prepare, maintain and alter the Premises for Lessee' s business operations and to install i 2

transmission lines connecting the antennas to the transmitters and receivers. All of Lessee' s construction and installation work shall be performed at Lessee' s sole cost and expense and in a good workmanlike manner. Except as otherwise specified herein, title to the Lessee Facilities shall be held by Lessee. All of the Lessee Facilities shall remain Lessee' s personal property and are not fixtures. Lessee shall remove all the Lessee Facilities at its sole expense on or before the expiration or earlier termination of this Agreement; provided, Lessee repairs any damage to the Premises caused by such removal. Additionally, upon the expiration or earlier termination of this Lease, Lessee shall surrender the Premises to Lessor in good condition, less ordinary wear and tear. Should Lessee fail to remove the Lessee Facilities from the Land within thirty (30) days of the expiration or earlier termination of this Agreement, Lessor may remove and store the Lessee Facilities at Lessee' s sole cost and expense. If Lessee does not claim the Lessee Facilities, and provided that Lessor has given Lessee any third party financing entity sixty 60) days prior written notice, the Lessee Facilities shall be deemed abandoned. Lessee shall post a Twenty-Five Thousand Dollars ($ 25,000) surety bond for removal of the Lessee Facilities. The aforementioned surety bond shall be in effect for the initial five ( 5) year Term and all Renewal Terms of this Agreement. Lessee agrees to increase the amount of the bond for each Renewal Term in the same proportion that rent increases in said Renewal Term.
b) Lessee shall pay for the electricity and all other utility services it consumes or uses in its operations at the rate charged by the servicing utility company. Any electrical upgrade, if necessary, shall be at Lessee' s sole cost and expense. Lessee shall have the right to draw electricity and other utilities from the existing utilities on the Land or obtain separate utility service from any utility company that will provide service to the Land including a standby power generator for Lessee' s exclusive use.) c) Lessee, Lessees employees, agents, subcontractors, lenders and invitees shall have access to the Premises without notice to Lessor twenty-four( 24) hours a day, seven 7) days a week, at no charge. During the Term of the Agreement, Lessor grants to Lessee, and its agents, employees, contractors, guests and invitees, a non- exclusive right and easement for pedestrian and vehicular ingress and egress across that portion of the Land described in Exhibit B.
d) Lessor shall maintain all access roadways from the nearest public roadway to the Premises in a manner sufficient to allow pedestrian and vehicular access at all times under normal weather conditions. Lessor shall be responsible for maintaining and repairing such roadways, at its expense, except for any damage caused by Lessee' s use of such roadways.
e) Prior to commencing construction of Lessee' s Facilities, Lessee shall obtain Lessor' s approval of Lessee' s work plans.
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7. ( NTERFERENCE.
a) Lessee shall construct, repair and operate the Lessee Facilities in such a manner that will not cause interference to Lessor including, but not limited to, Lessor' s rebroadcaster for its fire, police and other public safety departments, and other lessees or licensees of the Land. All operations by Lessee shall be in compliance with all Federal Communications Commission (` FCC") requirements and all applicable laws. b) Subsequent to the installation of the Lessee Facilities, Lessor shall not permit its lessees or licensees to install new equipment on the Land or property contiguous thereto owned or controlled by Lessor, if such equipment will cause interference with Lessee' s operations. Such interference shall be deemed a material breach by Lessor. In the event interference occurs, Lessor agrees to take all reasonable steps necessary to eliminate such interference, in a reasonable time period. Notwithstanding anything herein to the contrary, in the event Lessor fails to comply with this paragraph, Lessee's sole remedy is to terminate this Agreement.

8. TaxES.

If personal property taxes are assessed, Lessee shall pay any portion of such taxes which are attributable to the Lessee Facilities. Except as provided immediately below, Lessor shall pay all real property taxes attributable to the Land. Lessee shall reimburse Lessor for any increases in real property taxes which are assessed as a result of Lessee' s improvement to the Land. As a condition of Lessee' s obligation to pay such increases, Lessor shall first provide to Lessee the documentation from the taxing authority indicating th e increase is due to Lessee' s improvements.

9. WAIVER OF LESSOR' S LIENS.
a) Lessor waives any lien rights it may have concerning the Lessee Facilities which are deemed Lessee' s personal property and not fixtures, and Lessee has the right to remove the same at any time without Lessor's consent. b) Lessor acknowledges that Lessee has entered into a financing arrangement including promissory notes and financial and security agreements for the financing of the Lessee Facilities ( the" Collateral") with a third party financing entity ( and may in the future enter into additional financing arrangements with other financing entities). In connection therewith, Lessor ( i) consents to the installation of the Collateral; ( ii) disclaiming any interest in the Collateral, as fixtures or otherwise, and ( iii) agrees that the Collateral shall be exempt from execution, foreclosure, sale, levy, attachment, or distress for any Rent due or to become due and that such Collateral may be removed at any time without recourse to legal proceedings.
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10. TERMINATION.

This Agreement may be terminated on thirty ( 30) days prior written notice as follows:
i) by either party upon a default of any covenant or term hereof by the other party, which default is not cured within sixty ( 60) days of receipt of written notice of default, provided that the grace period for any monetary default is ten ( 10) days from receipt of notice; ( ii) by Lessee if it does not obtain or maintain any license, permit or other approval necessary for the construction, and operation of the Lessee Facilities; or ( iii) by Lessee if Lessee is unable to occupy and utilize the Premises due to an action of the FCC, including without limitation, a take back of channels or change in frequencies; or (v) by Lessee if Lessee determines that the Premises are not appropriate for its operations for economic or technological reasons, including, without limitation, signal interference. Should this Agreement be terminated pursuant to this Paragraph 10, Lessee shall pay the Rent due up to the effective date of termination.

11. DESTRUCTION OR CONDEMNATION.

If the Premises or Lessee Facilities are damaged, destroyed, condemned or transferred in lieu of condemnation, Lessee may elect to terminate this Agreement as of the date of such damage, destruction, condemnation or transfer in lieu of condemnation, by giving notice to Lessor no more than forty-five ( 45) days following the date of such damage, destruction, condemnation or transfer in lieu of condemnation.

12. INSURANCE.

Lessee shall maintain the following insurance: ( 1) Commercial General Liability with limits of$ 5, 000, 000. 00 per occurrence, covering Lessee' s use, occupancy and operations on the Premises; ( 2) Automobile Liability with a combined single limit of$ 2, 000, 000. 00 per accident; ( 3) Workers Compensation as required law; and ( 4) Employer' s Liability with limits of $ 1 , 000, 000. 00 per occurrence. Lessee shall provide to Lessor a certificate of insurance evidencing the coverage required by this paragraph prior to entering the Land.

Each policy of insurance shall be endorsed to state that it shall not be suspended, canceled or reduced in coverage or in limits except after thirty ( 30) days prior written notice has been given to Lessor.

13. ASSIGNMENT AND SUBLETTING.

Lessee may assign this Agreement or sublet the Premises or any portion thereof to any entity, subject to Lessor' s prior written consent and the assignee assuming all of Lessee' s obligations• herein. Under any such assignment or subletting, Lessee shall not be relieved of any future performance, liabilities, or obligations under this Agreement.

Lessor may assign this Agreement upon written notice to Lessee, subject to the assignee assuming all of Lessor' s obligations herein, including, but not limited to, those set forth in Paragraph 9 (" Waiver of Lessor's Lien") above. This Agreement shall run with the property 5

i
and shall be binding upon and inure to the benefit of the parties, their respective successors, personal representatives, heirs and permitted assigns. Notwithstanding anything to the contrary contained in this Agreement, Lessee may assign, mortgage, pledge, hypothecate or otherwise transfer without notice or consent its interest in this Agreement to any financing entity, or agent on behalf of any financing entity to whom Lessee ( i) has obligations for borrowed money or in respect of guaranties thereof, ( ii) has obligations evidenced by bonds, debentures, notes or similar instruments, or ( iii) has obligations under or with respect to letters of credit, bankers acceptances and similar facilities or in respect of guaranties thereof.

14. WARRANTY OF TITLE AND QUIET ENJOYMENT.

Lessor warrants that: ( i) Lessor owns the Land in fee simple and has rights of access thereof and the Land is free and clear of all liens, encumbrances and restrictions, except as disclosed by the public records: ( ii) Lessor has full right to make and perForm this I Agreement; and ( iii) Lessor covenants and agrees with Lessee that upon Lessee paying the Rent and observing and performing all of the terms, covenant and conditions on Lessee' s part to be observed and performed, Lessee may peacefully and quietly enjoy the Premises.

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15. REPAIRS.

I
Lessee shall be required to make any repairs to the Premises or Land necessitated by reason of Lessee' s action or inaction, including, but not limited to, Lessee' s tests and/ or Lessee' s construction, use, operation and maintenance of the Lessee Facilities. Except as set forth in Paragraph 6( a) above, upon expiration or termination hereof, Lessee shall restore the Premises to the condition in which it existed upon execution hereof, reasonable wear and tear excepted.

16. HAZARDOUS SUBSTANCES.

Lessee agrees that it will not use, generate, store or dispose or permit the use, generation, storage or disposal of any Hazardous Material on, under, about or within the Land in violation of any law or regulations. To the best of Lessor' s knowledge without investigation, Lessor represents, warrants, and agrees ( 1) that neither Lessor nor, to the best of Lessor's knowledge without investigation, any third party has used, generated, stored or disposed of, or permitted the use, generation, storage or disposal of, any Hazardous Material ( defined below) on, under, about or within the Land in violation of any law or regulation, and ( 2) that Lessor will not, and will not permit any third party to use, generate, store or dispose of any Hazardous Material on, under, about orwithin the Land in violation of any law or regulation. Lessor and Lessee each agree to defend, indemnify and hold harmless the other and the other' s partners, affiliates, agents and employees against any and all losses, liabilities, claims and/ or costs( including reasonable attorneys= fees and costs) arising from any breach of any representation, warranty or agreement contained in 6

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this paragraph. As used in this paragraph, " Hazardous Material" shall mean petroleum or any petroleum product, asbestos, any substance known by the state in which the Land is located to cause cancer and/or reproductive toxicity, and/or any substance, chemical or waste that is identified as hazardous, toxic or dangerous in any applicable federal, state or local law or regulation. This paragraph shall survive the termination of this Agreement.

17. LIABILITY AND INDEMNITY.
a) Lessee shall exonerate, hold harmless, indemnify, and defend Lessor and its directors, officers and employees from and against any and all suits, actions, judgments, legal or administrative proceedings, arbitrations, claims, demands, causes of action, damages, liabilities, interest, attorneys' fees, fines, penalties, losses, costs and expenses of whatsoever kind or nature ( collectively, " Claims") arising out of or resulting from: 1) operations or performance under this Agreement by Lessee or its officers, directors, employees, contractors, subcontractors, lenders or agents, including, without limitation, the use, occupancy or enjoyment of the Premises by Lessee or any work, activity or other things allowed or suffered by Lessee or Lessee' s directors, officer, employees, contractors, subcontractors, lenders or agents, invitees or lenders; or 2) any injury to or the death of any person or any damage to property, if such injury, death or damage arises out of or is attributable to or results from the acts or omissions of Lessee or its directors, officers, employees, contracto s, subcontractors, lenders or agents, including, without limitation, the use, occupancy or enjoyment of the Premises by Lessee or any work, activity or other things allowed or suffered by Lessee or Lessee' s directors, officers, employees, I contractors, subcontractors, lenders or Agents on the Premises. Neither the expiration or earlier termination ofthis Agreement nor completion ofthe acts to be performed under this Agreement shall release Lessee from its obligation to indemnify, as to any Claim, so long as the event upon which the Claim is predicated shall have occurred prior to the effective date of any such expiration or earlier termination or completion and arose out of or was in any way connected with performance or operations under this Agreement by Lessee, its directors, officers, employees, contractors, subcontractors, lenders or agents or any one of them.

18. MISCELLANEOUS.
a) This Agreement constitutes the entire agreement and understanding befinreen the parties, and supersedes all offers, negotiations and other agreements concerning the subject matter contained herein. Any amendments to this Agreement must be in writing and executed by both parties.
b) If any provision of this Agreement is invalid or unenforceable with respect to any party, the remainder of this Agreement or the application of such provision to persons other than those as to whom it is held invalid or unenforceable, shall not be affected and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
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c) All of the terms and conditions of this Agreement shall be binding on and inure to the benefit of the successors and permitted assignees of the respective parties. d) Any notice or demand required to be given herein shall be made by certified or registered mail, return receipt requested, or reliable overnight courier to the address of the respective parties set forth below.

LESSOR: LESSEE:

City Manager Pacific Bell Wireless, LLC
City of Arroyo Grande 6100 Atlantic Boulevard
P. O. Box 550 MailCode GAN02
214 East Branch Street Norcross, GA 30071
Arroyo Grande, CA 93421
Attn: Nefinrork Real Estate Administration
With Copy to:

Pacific Bell Wireless, LLC
3345 Michelson Drive, Suite 100
Irvine, CA 92612
Attn: Legal Department
Lessor or Lessee may from time to time designate any other address for this purpose by written notice to the other party. All notices hereunder shall be deemed received upon actual receipt.
e) This Agreement shall be governed by the laws of the State of California. f) Upon request either party may require that a Memorandum of Lease be recorded confirming the ( i) Lease commencement, ( ii) expiration date of the Term, and ( iii) the duration of any Renewal Terms.
g) Lessee, at its sole cost, may obtain title insurance on its interest in the Land, Lessor shall cooperate by executing documentation required by the title insurance company.
h) In any case where the approval or consent of one party hereto is required, requested or otherwise to be given under this Agreement, such party shall not unreasonably delay or withhold its approval or consent. i) All Riders and Exhibits annexed hereto form material parts of this Agreement.
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j) This Agreement may be executed in duplicate counterparts, each of which shall be deemed as original.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

LESSOR: LESSEE:

CITY OF ARROYO GRANDE, PACIFIC BELL WIRELESS, LLC
a Nevada limited liability company
To vY M. FE At, Mayor By: GSM Facilities, LLC,
its sole member
By: CINGULAR WIRELESS, LLC
ATTEST: its agent
By:

KELLY ETM E HARLE RANEK
Director of Administrative Services/ Regional Director, Deputy City Clerk Network Deployment
APPROVED AS TO CONTENT: ATTEST WITNESS:

DAMS, STE City Manager
Date:_ T
it/ L
i
APPROVED AS TO FORM:

Tinno Y. 1. ARM , City Attorney
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EXHIBIT A

LEGAL DESCRIPTION OF LESSOR' S PROPERTY( LAND)
Lessor' s Property ( Land) of which Premises are a part is legally described as follows:

APN:
007- 611- 016
All of that certain real property located in the County of San Luis Obispo, State of California, being more particularly described as follows:

THAT PORTION OF LOT 91 OF THE MAP OF THE RANCHOS CORRAL DE PIEDRA PISMO AND BOLSA DE CHEMISAL, IN THE CI"fY OF ARROYO GRANDE, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFpRNIA, AS PER MAP FILED IN BOOK A, PAGE 65 OF MAPS, IN THE OFFICE OF THE COUN7Y RECORDER OF SAID COUN7Y, DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST SOUTHERLY CORNER OF THE LAND DESCRIBED IN THE DEED TO AMASA W. DIXSON RECORDED IN BOOK 15, PAGE 302 OF DEEDS, RECORDS OF SAID COUMY, MARKED BY A POST SET BY A F. PARSONS IN FEBRUARY 1892, PRESEMIY MARKED BY AN 1 1/ 4 INCH DIAMETER PIPE TAGGED RCE 6923 AS SHOWN ON THE MAP FILED IN BOOK 8, PAGE 120 OF RECORD OF SURVEYS IN SAID COUNTY RECORDERS OFFICE.

THENCE NORTH 54° EAS7' 664. 00 FEET TO A POINT, FROM WHICH THE MOSf EASTERLY CORNER OF SAID LAND OF DIXSON BEARS NORTH 54° EAST 537.30 FEET, MORE OR LESS, MARKED BY A POST ESTABLISHED BY A.F. PARSONS, IN FEBRUARY, 1892, PRESENTLY MARKED AN OLD FENCE CORNER, SAID POINT BEING THE TRUE POINT OF BEGINNING.

THENCE AT RIGHT ANGLES SOUTH 36° EAST' 240. 00 FEET TO A POINT.

THENCE AT RIGHT ANGLES NORTH 54° EAST 27Z, 00 FEET TO A POINT.

THENCE AT RIGHT ANGLES NORTH 36° WEST 240. 00 FEEZ' TO A POINT, THENCE SOUTH 54° EAST 272, 00 FEET TO THE TRUE POINT OF BEGINNING.

APN: 007- 611- 016
PAPCC(. ::
11n eascmcn• ovcr et1,, t pnr[ ion uI l, t 9] pr the raap oF the 4anchos Co= Count
de Picdra, Pisno ncl Ltc+ 25 cic C: hc; m{ sn1 { th City o£ Azroyo Gzande, o San i. uis obi o, Sta e oE C11 i6a= ya,
Doo F., as per m' ap filed in Page 65 of t-la, s in the ( r'£ ice of khc c: ounty Recarder of said County, for pu52ic itility puz, oses a, cc: iEica2ly including ., ater tran mission lir.es and , ee s. cooct,, to athc; r vtCh al•l necessary appurtenanees theceto boCh at, ve a ncl l elo qrouncl levtl, in.cluding the right to improve, repnir n. rnZintairi saicl ro cl+ ay snd water trnnsmissipn 1 t3eginning at an lni 2f: Oltlt ln thc rouchi:t-ly right of way line of L[ anCh Hi I1 Ro? d ' ccordi tic7 to thc dcr.l to ehe County of Sa Luis Ot is Fror. A. t. Di; son recorclec9 in Eloc, k R8 e° I. eecls ot Puge 4U5 fn' said County Recorder' s c ffic::, +•rl icn : nqie , c, int is on the rlorCheaster2y lia of the land dcscribcd in thi: dcad to ninr, sa W_ Diy. sbn recorde in doo! c I5, P y J02 oE De c s, R- t:ords E s< id C' ounty, and said anq3e oint beinq oc, posiLc thit oi t n r.c t ; s " station, 40- 22" ( sic) Nhi. ch oa [ hc Northcrly r: idc of sr id ro:<l, :, l o frum c id anqle point an l, i tliametez pipa t g: crcl [. 5 375C trc, r rtc, rrli 1' t• a5' a9" East 26. 26 feet Jistant:
i

EXHIBIT A

LEGAL DESCRIPTION OF LESSOR' S PROPERTY LAND
Phence Slong said •Tfortl1c soirtts
ll c of tl lzsnd oE aixson South 36°
5g'• East 31. 00 feet. to a P oint
Thence leaving sai$ line North 26e 2a• q' 1" East 3D_ 88. feet to a p on the Southerly
rxght of ray line of s i 42antest132.. 49afeeC distar.
the p int of beginnin9
bears South 84° 58'
st 32. 49 feet
Thence. a ong' said ri9ht oE w y line Soutl, B4° 58' 42" to tt e Point of BeginningPARCEL C= rater
n easement far plic utility purposes s ecifically including tiansmission . 11nes' : nJ acce5s ro:ic] s to} t cr, with all necess ry nPP?= ir d m intain srid ro d+ aY ana water . trnnsmission
e ri5
tenances ttiereto t oth
above : snd beloa yrouncl lev l, includofgparts oi
to ' imptove, rep.
lines 10 feet + icic ovez that Ppismonancl BolsaldefChemisal-, 3. s1 the Cii of S n Luis Obis o,
State of California,
as
thc Ranchos Corral cic Piedra,
o£
ArroYa Grande, CountY ,
a e 65 of *: ps, in the Office of• the Cour t:
per map fiLed in Dook A. 9
Recozder of snid CountY•
described as follous:

gQgi.nning at n1iL_` n rederickeand r+iPeetec:orledcin Book in t
d^_ed to verno
of OEfici. aT.

Recorcls,
it1 said County Iteeorder'
s = fiCC,. being reCited
as stake L' vo•' 1 tlierein:
the Southues crly
line oE said Parcel v.

A. North 34° 13
Tltencc alon9
mor or less, to the TRUE PO.INT OF Q NN NG• fXO
p1e t 1496. 48 feet, orner of t11e, lond
described_ iT'
records o ts:
hzch the mosc Southerly j02 of. Deeds.
a post
T. masa ,.

Dixson r corded in IIook 15,
9 l' by ;
CountY bears e
ortr 74' 13 west ? 00. 00 fcet clistant marked by
1B92. P= esentlY 7''' = iled i:
e5tabliGhP :';' •

1. F_ r
c' o c. cl (: CErG923 as shown on the maP Uffi
1 1/ 4 inch di metcr pir y9 '
uook 8 , Po9' : 2a:" of °•
crorcls oE Survcy i.n :
aid County Recbrd.: t =
Th nce Notth 34° ' 13' . rst 7Q0' 00 .`. cct to sai
most Southerly cozner
Che land of Di.:. sort:

I> st 6t; 4. 0 fcct: to a <,
intofrom + hich the rnostiEY2
7hencc t o= Ch 54° 189
riJ of t i cson be:. rs
Noreh Sn L•ast 537. 0 feet,
of s; st blishr,d hy n., '. r rsons in F bruary.
corner
i, st cl ss,
marked bY
t 1 f.encc corncr:
pr sentl:y m rkc<7 by
Thcnce at ri ht tigl
South 36° l:ast ! 0- f.eet to a point;
t t i c l` jc utli 54° West G54_ 31 feet tfzomisaid S
Thence t
i h i,; nt 10. 00 icet * lorthe. istcrl,y
d! s111e1 . nJ[ C' 1 V. 1. :
esterly linc oC
alor.
saicl I. r licl linC :
outh 4• 13' 1: ast 690: 31 feet t a
Thence 4
47'
point froi -=
hich t2ie ' I' cue i' oint
f IIe,yinning bears
outh 55'
e"

10. 0 fect dist ht: intti- ng•
1•} ence South 5° 4 t est 10. 00 f.cct to the True Point of Beq

EXHIBIT A

LEGAL DESCRIPTION OF LESSOR' S PROPERTY( LAND)
pARCEL D:
yin easement for publir utility purposes specifically including- water tzansmission iis es and access roads, together rrith 11 necessary appL tenances thazeto beth above and belaN yround level, including the rig to improve, repair' and maintain said road+ ay and wateF transmission lines over that portion of Lot 91 of tt e map of the Ranchos Corral d ricdra, Pismo and nols. de Chemisal, ici thc City o Ar.royo Gzande, Cc of San I.uis Obispo, Stat of C 11€ otni. s p r map fi ga in Sook A.

included + ithin a strip oP land• 25 eet wide ]. yi'ng 12. 50• Peet, on eacr side of the follo.risig describecl Centerlines
Heyinning at the most Southerly •corne r of tt e lanc3 describe3 in the deed to Rmasa SV_ Dix on recorded in IInok 15, Paqe 302 oF Deeds, recor of said County, marked Dy a post• set by ). F_ Parsons in Februsry, lE presently marked by an 1 1/ 4 inch 8iamrter pipe• ta,qged RCE 6923 as sho.rn on the rnap fil d in IIook B, ragc 12O of Records of.• Survey 3.n sa County Recorder' s Office:

Thence No,: h S4' ast 478. 52 fc nt to . point, ft'om uhici the mosG Easterly corner of said land of pixson bears North 54° East ?22. 7E fe more or less, msrked by a post establishecl by R. F. Parsons i.n Febru 1892. Prasently m rked by an olcl Eencc orncr, snid point being the TRUE POZNT OF IIFCINt1It3G: y
Thet ce South 44' O1' 00" est 7. 44 fe C to a point;' I Thence con inuiny South+ esterly lony a ` tang.ent• curve concave Easter:
w3th a radiu of 70; 00 fcet throi gh a ca: n ral angle ' oE 87.° 3Q' 03" a:
i
3rc distan e- oE 207. 02 fec to a point;
Thence Sout h 43° 3'' S5" East 94 : G7 lec: t to a point; Thence contir.uing > outhca te: ly long . tangc: nt curve concave Northe' with a radius of 150. Un' f c thrc+uyti a ccntr l anqle of 117° 39' S7" an rc dis ancc of 348. 05 fcet tcr a F+ oinl•: •
t' hence L orth 28° 45' us" F.a t 95. J3 fee[ to a oint on the Southwest line of Pazcel A hcrein Jescribed.
7' lic sidclincs o£ tliis e:+ scincnt cF, all be extended or shortened as nec ary co tcrnincte Nort:+ estrriy ot th Southcasterly line oE said la of Uixson a d South ast rly at Che S uth+ester2y line of Parce2 A 2ierei. n descriUed.
i

EXHIBIT A

LEGAL DESCRIPTION OF LESSOR' S PROPERTY( LAND)
PARCEL E= ,
pn .easement for• public u' ii,ity aurposes specifically i,cluding Water Cransmission lines anu access roads,
together with all ecessaty appu
tenances thereto both abova and below ground level, inc'Iuding the rig:
to improve, repaiz and r.aintai n said roadway and water transmission lines over that porticri o
Lot 91 of the map of. the Ranchos Coxral de
Piedra, t'ismo and Bolsa• de Chemisal, i.n the Ci.ty of Azroyo Grande, County o£ San Luis Obispo, State o•f California, as per map filed in Book A. Page 65 of. iaps in che Office o£ the County Recordar of said County, included within a strip of land 20 feet «ide lying I.U- 00 • feet on each side of the fcllowinq clescribed centerline:
8eqinning t3t e
pzXS n
lS, ePaged302 of Deeds, recorc
deed to Amas
of sai.d County Triarked by a post set by . n. F. L' axsoestan edbRCE
pxesent2y marked bY iled/ in19oo,k H, mpaqe 1. 20no 1Records o£ Suzvey i as shown on the map
said County Recorder' s OfFice;
Thence North SA° East 478. 52 feet to a point,
called herei. n, o=
Convenience only,
pOZNT A;
Thence continvinq t]orth said lan37of. Di cson mark d by aeposttsethby rewst Easterly coraer ok., csentl marked b an oI.d Fence p_ F., Parsons i.ri February, 1892, pX Y
CoXner;
Thence North 36° S1' S8" West i99• 39 fcet,• more or less, to the T UE POINT lineGoE, Branch Mi.tl Itoad describedlin thetdeed tohtheyCounty of o r+ay
San Luis Obispo Exom A. • l. D.'. xson recorded in Dook 88 of Detds at aqe A85, recor8s of said County i: ears
North 3G• 51' S8" west 19. 6Z feet
dS. stant, which angle point •i•: on tltc NortheasterJ.y line of thepa ed302 cicscribed iri th°_ deed to nmc1 3 W' nd" s° idrznqleepoi. skopoos te tbat
of Deeds, R2c:= d5 0£ sni. d Cou' ty. . si8e of
oint noted as "
station 40- 22"• SOint~ ancl
inchndiamete
said zoad, a? so from s3id angle p
LS 375G bears . torth 12° 45' 49" East 2G. fcct distant; Thence crossir.g said land of Dixson along said centerline South 26° 2B
pq" Ft2st 6. 40 feet to ' a poi. nt; .

Thenc co,ntinuiilg Soutnuesterly alonq a tangent curve concave North- wesGerly r+ith a radius of 25U- 00 Ee t through a central angle of 20° 20' 33" an arc distance oE 08. 76 zcet to a point;
Thence South 46" 38' 37" t cst h6. 83 fect to a point;
Theoce South 39° 35' 3>>" t• est B7. 75 fcet to a pofnt; , , l' t e: cc Sou.th 42° 12' J' i" lvC,st G4. 91 fec.t tn a point:

EXHIBIT B

DESCRIPTION OF PREMISES
The Premises consist of those areas described/ shown below and where Lessee' s communications antennae, equipment, cables and utilities occupy Lessor' s Property. The Premises and the associated utility connections and access, including easements, ingress, egress, dimensions, and locations as described/ shown below, are approximate only and may be adjusted or changed by Lessee at the time of construction to reasonably accommodate sound engineering criteria and the physical features of Lessor' s Property.

See Site Plan dated 12/ 16/ 03
VY-465- 01
A final drawing, Site Plan, or copy of a property survey substantially depicting the above will replace this Exhibit " B" when initialed by Lessor

1. This Exhibit may be replaced by a land surveyor Site Plan of the Premises once it is z received by Lessee.

2. Setback of the Premises from the Lessor' s boundaries shall be the distance required by the applicable governmental authorities.

3. Width of access road shall be the width required by the applicable governmental r authorities, including police and fire departments.

4. The type, number and mounting positions and locations of antennas and transmission lines are illustrative only. Actual types, numbers, mounting positions may vary from what is shown above. j
t
h;

1 Item 8.e.

ACTION MINUTES

REGULAR MEETING OF THE CITY COUNCIL/SUCCESSOR AGENCY TO THE DISSOLVED ARROYO

GRANDE REDEVELOPMENT AGENCY
September 13, 2022, 6:00 p.m.

Hybrid City Council Chamber/Virtual Zoom Meeting
215 East Branch Street, Arroyo Grande
Council/Board Members Present: Mayor/Chair Ray Russom, Mayor Pro Tem/Vice Chair George, Council/Board
Member Paulding, Council/Board Member
Storton
Council/Board Members Absent: Council/Board Member Barneich Staff Present: City Clerk Jessica Matson, City Attorney Timothy Carmel, City Manager Whitney
McDonald, Assistant City Manager/Public
Works Director Bill Robeson, Administrative
Services Director Nicole Valentine,
Community Development Director, Police
Chief Michael Martinez, Planning Manager
Andrew Perez, Associate Planner Patrick
Holub, Police Commander Dave Culver
Given the recent increase in COVID-19 cases in San Luis Obispo County, and in compliance with Assembly Bill (AB) 361, which allows for a deviation of teleconference rules required by the Ralph M.

Brown Act, this meeting was held by teleconference.
_____________________________________________________________________

1. CALL TO ORDER
Mayor/Chair Ray Russom called the Regular City Council/Successor Agency to the Dissolved Arroyo Grande Redevelopment Agency Meeting to order at 6:00 p.m.

2. ROLL CALL
City Clerk Matson took roll call.

3. MOMENT OF REFLECTION

4. FLAG SALUTE
Felix Esparza, Latino Outreach Council, led the flag salute.

2 Item 8.e.

5. AGENDA REVIEW
Mayor/Chair Ray Russom noted that Item 9.b. will be heard before 9.a. and 11.a., and Council Communications will be heard before the Public Hearing items.

5.a Closed Session Announcements
None.

5.b Ordinances read in title only
Moved by Mayor/Chair Ray Russom
Seconded by Council/Board Member Storton
AYES (4): Mayor/Chair Ray Russom, Mayor Pro Tem/Vice Chair George, Council/Board Member Paulding, and Council/Board Member Storton
ABSENT (1): Council/Board Member Barneich
Passed (4 to 0)

6. SPECIAL PRESENTATIONS

6.a Update Regarding Countywide COVID-19 Efforts
City Manager McDonald provided a brief update on COVID-19 including available booster vaccines and testing sites.

Mayor/Chair Ray Russom invited public comment. No public comments were received.

No action was taken on this item.

6.b City Manager Communications
City Manager McDonald provided information regarding the City's summer concert series, the Elm Street Inclusive Playground groundbreaking event; and the first Joint City Council meeting regarding the Central Coast Blue Project.

Assistant City Manager/Public Works Director Robeson provided information regarding awards received for the Bridge Street Bridge Rehabilitation Project.

Mayor/Chair Ray Russom invited public comment. No public comments were received.

No action was taken on this item.

Receive correspondence/comments as presented by the City Manager and Provide direction, as necessary.

6.c Honorary Proclamation Recognizing September 15-October 15, 2022 as "National Hispanic Heritage Month"
Mayor/Chair Ray Russom read the Honorary Proclamation recognizing September 15 - October 15, 2022 as "National Hispanic Heritage Month." Felix Esparza, Latino Outreach Council, accepted the proclamation. The Latino Outreach Council and Mexican Consulate presented a Certificate of Recognition to the Council for highlighting the contributions made by the Latino

3 Item 8.e.
and Mexican community in the city of Arroyo Grande and enhancing and connecting the diverse and multi-racial and multi-cultural mosaic of cultures during Hispanic Heritage Month.

Mayor/Chair Ray Russom invited public comment. No public comments were received.

No action was taken on this item.

6.d Introduction of Police Commander Culver
Police Chief Martinez introduced Police Commander Culver, and highlighted his educational and professional background.

6.e Update on Active Shooter Drill
Police Commander Culver provided information regarding the recent multi-jurisdictional Active Shooter Drill and responded to questions from Council/Board.

Mayor/Chair Ray Russom invited public comment. Speaking from the public was Ben Franco and Rachelle Krelle. No further public comments were received.

No action was taken on this item.

7. COMMUNITY COMMENTS AND SUGGESTIONS
Mayor/Chair Ray Russom invited public comment. Speaking from the public was Jeff Edwards. No further public comments were received.

8. CONSENT AGENDA
Mayor/Chair Ray Russom asked the Council/Board if there were any questions or any items to be pulled from the consent agenda for further discussion.

Staff responded to Council questions regarding Item 8.j.

Mayor/Chair Ray Russom invited public comment. No public comments were received.

Moved by Council/Board Member Storton
Seconded by Council/Board Member Paulding
Approve Consent Agenda Items 8.a. through 8.m., with the recommended courses of action.

AYES (4): Mayor/Chair Ray Russom, Mayor Pro Tem/Vice Chair George, Council/Board Member Paulding, and Council/Board Member Storton
ABSENT (1): Council/Board Member Barneich
Passed (4 to 0)

8.a Consideration of Cash Disbursement Ratification
Ratified the listing of cash disbursements for the period of August 1 through August 15, 2022.

8.b Consideration of Statement of Investment Deposits
Received and filed the attached report listing investment deposits of the City of Arroyo Grande as of July 31, 2022, as required by Government Code Section 53646(b).

4 Item 8.e.

8.c Consideration of Adoption of Resolution Approving the Last and Final Recognized Obligation Payment Schedule for the Successor Agency to the Arroyo Grande Redevelopment Agency
Adopted a Resolution entitled: "A RESOLUTION OF THE BOARD OF DIRECTORS OF THE

SUCCESSOR AGENCY TO THE DISSOLVED ARROYO GRANDE REDEVELOPMENT

AGENCY APPROVING THE LAST & FINAL RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR FISCAL YEARS 2023-38 AND APPROVING CERTAIN RELATED ACTIVITIES".

8.d Consideration of Approval of Minutes
Approved the minutes of the Regular City Council Meeting of August 23, 2022, as submitted.

8.e Consideration of Adoption of a Resolution Declaring a Continued Local Emergency Related to the Coronavirus (COVID-19) Pandemic
Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE DECLARING A CONTINUED LOCAL EMERGENCY RELATED TO THE CORONAVIRUS (COVID-19) PANDEMIC".

8.f Consideration of Cancellation of November 8, 2022 City Council Meeting Cancelled the regularly scheduled Council meeting of November 8, 2022.

8.g Consideration of Authorizing the City Attorney to Amend the Affordable Housing Agreement for 252 S. Courtland Street
Authorized the City Attorney to amend the Agreement allowing the property owner to sell the subject property to an eligible, moderate income household.

8.h Consideration of a Resolution Approving a Grant Agreement from the Office of Traffic Safety for Traffic Records Improvement and Approval of the Purchase of the Crossroads Traffic Collision Reporting and Electronic Citation Systems 1) Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE APPROVING AND AUTHORIZING THE CHIEF OF POLICE TO

EXECUTE AN AGREEMENT WITH THE CALIFORNIA OFFICE OF TRAFFIC SAFETY TO

ACCEPT GRANT FUNDING FOR TRAFFIC RECORDS IMPROVEMENT PROJECT AND TO APPROPRIATE THE FUNDING FOR THE PROGRAM ACTIVITIES"; 2) Approved a Budget Amendment Request for FY 2022-23 in the amount of $109,000 to account for the OTS grant revenue and the expenditures for the new reporting and citation systems, and 3) Approved the sole source purchase of the Crossroads traffic collision reporting and electronic citation software programs.

8.i Consideration of a Resolution Approving a Grant Agreement with the Office of Traffic Safety for Traffic/DUI Enforcement
1) Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE APPROVING AND AUTHORIZING THE CHIEF OF POLICE TO

EXECUTE AN AGREEMENT WITH THE CALIFORNIA OFFICE OF TRAFFIC SAFETY TO

ACCEPT GRANT FUNDING FOR TRAFFIC SAFETY PROGRAMS AND TO APPROPRIATE

5 Item 8.e.

THE FUNDING FOR THE PROGRAM ACTIVITIES"; and 2) Approved a Budget Amendment Request for FY 2022-23 in the amount of $58,000 to account for the additional revenue and expenditures related to the grant.

8.j Consider Adoption of a Resolution Pursuant to Public Contract Code (PCC) Section 20168 and Authorizing Contracting Without a Competitive Solicitation for Bids Pursuant to PCC Section 22050 for FCFA Station 1 Emergency Generator Replacement 1) Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE DECLARING AN EMERGENCY AND AUTHORIZING THE IMMEDIATE

EXPENDITURE OF FUNDS TO REPLACE THE EMERGENCY GENERATOR AT THE FIVE CITIES FIRE AUTHORITY STATION 1"; and 2) Authorized the City Manager, or designee, to execute a contract with a qualified contractor for construction of the project.

8.k Consideration of Acceptance of the 2021 Street Repairs Project, PW 2021-01 1) Accepted the project improvements as constructed by Ferravanti Grading & Paving in accordance with the plans and specifications for the 2021 Street Repairs Project, PW 2021-01; 2) Directed staff to file a Notice of Completion; and 3) Authorized release of retention, thirty-five (35) days after the Notice of Completion has been recorded, if no liens have been filed.

8.l Consideration of Resolution Authorizing Refund of Planning Commission Appeal Fees to the Appellants of Vacation Rental Permits Approved for 263-D Spruce Street and 1170 Linda Drive
Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE AUTHORIZING THE REFUND OF APPEAL FEES FOR THE APPEALS OF THE SHORT-TERM RENTALS AT 263-D SPRUCE STREET AND 1170 LINDA DRIVE".

8.m Consideration of a Grant Agreement with Smart Share Housing Solutions for Public Outreach, Education, and Project Management to Facilitate Development of Accessory Dwelling Units in Arroyo Grande
Reviewed the proposal from SSHS and authorize the City Manager to execute an Agreement between the City and SSHS for public outreach, education, and project management and demonstration to facilitate the development of ADUs in the City.

9. PUBLIC HEARINGS
Mayor/Chair Ray Russom noted that due to conflicts of interest, Council previously drew straws to see who would hear each item.

9.a Discuss and Consider Introduction of Ordinance Amending Title 16 of Arroyo Grande Municipal Code Regarding Accessory Dwelling Units; Development Code Amendment 20-001 and Consideration of a Fee Waiver Program for Certain Accessory Dwelling Units Mayor Ray Russom called for a brief break at 8:54 p.m. The Council reconvened at 9:04 p.m.

This item was heard after Item 9.b.

Mayor Ray Russom declared a conflict of interest due to owning an ADU and left the meeting.

Mayor Pro Tem George presided over the meeting.

6 Item 8.e.

Planning Manager Perez presented the staff report and recommended that Council introduce the Ordinance amending the regulations for accessory dwelling units and provide feedback about the details of the proposed fee waiver program. Staff responded to questions.

Mayor Pro Tem George opened the public hearing. Speaking from the public was Ben Franco.

Upon hearing no further public comments, Mayor Pro Tem George closed the public hearing and directed staff to follow-up with the commenter.

Moved by Mayor Pro Tem/Vice Chair George
Seconded by Council/Board Member Paulding
Introduce an Ordinance entitled: "AN ORDINANCE OF THE CITY COUNCIL ADOPTING AMENDMENTS TO TITLE 16 OF THE ARROYO GRANDE MUNICIPAL CODE (AGMC) REGARDING ACCESSORY DWELLING UNITS; LOCATION- CITYWIDE". City Attorney Carmel read the full title of the Ordinance into the record.

AYES (3): Mayor Pro Tem/Vice Chair George, Council/Board Member Paulding, and Council/Board Member Storton
ABSENT (2): Mayor/Chair Ray Russom, and Council/Board Member Barneich Passed (3 to 0)

9.b Introduction of Ordinance Amending Title 16 of the Arroyo Grande Municipal Code Regarding Short Term Rentals (Vacation Rentals and Homestays); Development Code Amendment 22-002
This item was heard out of order.

Mayor Pro Tem George declared a conflict of interest due to owning a short-term rental and left the meeting.

Community Development Director Pedrotti introduced the item. Associate Planner Holub presented the item and recommended that the Council introduce an Ordinance amending Title 16 of the AGMC regarding short-term rentals and responded to questions.

Mayor Ray Russom opened the public hearing. Speaking from the public were John Hagler, Sharon Valienzi, Ben Franco, Jim Guthrie, Jami Fordyce, Corina Garsa, Francine Errico, Ken Steitz. Upon hearing no further public comments, Mayor Ray Russom closed the public hearing. Mayor Ray Russom responded to questions from the public. City Attorney Carmel provided clarification regarding references to properties being "grandfathered in." Staff responded to questions from Council.

Moved by Mayor/Chair Ray Russom
Seconded by Council/Board Member Paulding
To modify the Ordinance as follows: a cap of 90 vacation rentals with a 6-month lookback; a short-term rental buffer of 500 feet as recommended by the Planning Commission; language for revocation triggers; "unresponsive emergency contact" defined as a contact who does not respond 3 times in a 12-month rolling period and would initiate a revocation hearing; language that 2 citations or arrests in a 12-month rolling period would initiate a revocation hearing;

7 Item 8.e.
language in outreach letters regarding voluntary relinquishment of permits for existing permit holders; language that TOT must be paid every 6 months; modify language that states the 2- space parking requirement only applies to vacation rentals; the wording "revocation proceeding" be changed to "revocation hearing;" definitions are approved as presented by staff; and to continue the introduction of an Ordinance amending Title 16 of the AGMC regarding short term rentals to a date certain of September 27, 2022.

AYES (3): Mayor/Chair Ray Russom, Council/Board Member Paulding, and Council/Board Member Storton
ABSENT (2): Mayor Pro Tem/Vice Chair George, and Council/Board Member Barneich Passed (3 to 0)

10. OLD BUSINESS
None.

11. NEW BUSINESS

11.a Discussion of Draft Ordinance Addressing Tiny Homes on Wheels This item was heard after item 9.a. Mayor Ray Russom previously declared a conflict of interest due to owning an ADU and left the meeting.

Planning Manager Perez presented the report and staff responded to questions from Council.

Mayor Pro Tem George invited public comment. Speaking from the public was Joe Pollon. No further public comments were received.

Building Official Meyers provided more information regarding tiny home accreditation organizations permitted. Mayor Pro Tem George directed staff to research accreditation options.

Moved by Council/Board Member Paulding
Seconded by Council/Board Member Storton
Approve staff's recommendation with the modification to add language to paragraph B3 to state "in addition to the RVIA any other HCD approved association", and to ban roof top decks.

AYES (3): Mayor Pro Tem/Vice Chair George, Council/Board Member Paulding, and Council/Board Member Storton
ABSENT (2): Mayor/Chair Ray Russom, and Council/Board Member Barneich Passed (3 to 0)

12. COUNCIL COMMUNICATIONS
This item was heard out of order.

Mayor/Chair Ray Russom stated that she will be unable to attend the Mayor's meeting and asked if any other Council Member would be available to attend. Council members Storton, Paulding and George stated they would not be able to attend.

8 Item 8.e.

13. CLOSED SESSION
None.

14. ADJOURNMENT
There being no further business to come before the City Council/Board of Directors, Mayor Pro Tem George adjourned the meeting at 9:47 p.m.
_________________________
Caren Ray Russom, Mayor/Chair
ATTEST:
_________________________
Jessica Matson, City Clerk/Secretary

Item 8.f.

MEMORANDUM
TO: City Council
FROM: Jessica Matson, Legislative & Information Services Director/City Clerk SUBJECT: Consideration of Conflict of Interest Code Biennial Review and Resolution Amending the City of Arroyo Grande Conflict of Interest Code
DATE: September 27, 2022
SUMMARY OF ACTION:

Biennial review of the City’s Conflict of Interest Code and amendment to the list of designated positions.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

There are no fiscal or personnel impacts as a result of the proposed action.

RECOMMENDATION:

Adopt a Resolution approving an amended Conflict of Interest Code for designated positions.

BACKGROUND:

The California Political Reform Act requires every local government agency to adopt a Conflict of Interest Code (“COI Code”). The COI Code designates positions within the City required to file Statements of Economic Interests and assigns disclosure categories specifying the types of financial interests to be reported. Further, the Political Reform Act contains specific provisions setting forth any circumstances under which designated positions or categories of designated positions must disqualify themselves from making, participating in the making, or using their official position to influence the making of any decision.

Certain officials, including the Mayor, members of the City Council, candidates for City offices, members of the Planning Commission, City Manager, City Attorney, and City Treasurer are exempt from the City’s Conflict of Interest Code as they are all otherwise statutorily required to file disclosure statements pursuant to Government Code Section 87200 (commonly known as “87200 filers”). The City’s COI Code and list of designated positions supplements those statutory requirements by including employees, consultants, and members of City advisory bodies who are not 87200 filers. It is important to note that

Item 8.f.

City Council
Consideration of Conflict of Interest Code Biennial Review and Resolution Amending the City of Arroyo Grande Conflict of Interest Code September 27, 2022

the list of designated positions includes members of the Successor Agency of the Dissolved Arroyo Grande Redevelopment Agency. Because the City Council also serves as board members of this authority, members of the Council are required to include this position on their Statements of Economic Interest Form 700 when filing their disclosure statements.

ANALYSIS OF ISSUES:

In 1987, the City adopted the State’s standard Conflict of Interest Code by reference which, along with the Appendix of Designated Positions and the Appendix of Disclosure Categories, constitutes the City of Arroyo Grande COI Code.

Under the Political Reform Act, local agencies are required to review its COI Code biennially to determine whether the COI Code is accurate, or if revisions are needed due to organizational changes, including the creation of new positions, elimination of positions, position title changes, and/or relevant changes in the duties assigned to existing positions.

The City’s COI Code was last updated in September 2020. A review of the designated positions has been completed and it has been determined that a revision to the City’s Conflict of Interest Appendix of Designated Positions is required at this time.

In June 2021, the City Council adopted Resolution 5091 (Attachment 2) approving the following changes to position titles as part of the FY 2021-23 Biennial Budget:

1. Upgrading the Executive Assistant/Deputy City Clerk position to Deputy City Clerk/Communications Coordinator;

2. Changing the Human Resources Manager title to Human Resources Officer.

In addition, in June 2022, the City Council adopted Resolution 5206 (Attachment 3) approving a salary classification for a Management Analyst position in the City Manager’s Office.

It is recommended that all of these changes be reflected in the City’s COI Code to ensure that it is current and accurate, including the addition of the Management Analyst position to the list of designated filers.

Staff has completed the biennial review of the current COI Code and has determined that no other amendments are necessary at this time. The City's COI Code accurately designates all positions that make or participate in the making of governmental decisions; the disclosure categories assigned to those positions accurately require the disclosure of all investments, business positions, interests in real property and sources of income which may foreseeably be affected materially by the decisions made by those designated

Item 8.f.

City Council
Consideration of Conflict of Interest Code Biennial Review and Resolution Amending the City of Arroyo Grande Conflict of Interest Code September 27, 2022

positions; and the COI Code includes all other provisions required by Government Code Section 87302.

ALTERNATIVES:

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

1. Adopt the Resolution approving an amended Code for designated positions

2. Modify and adopt the Resolution; or

3. Provide other direction to staff.

ADVANTAGES:

Adoption of the proposed Resolution will meet the requirements of the Political Reform Act concerning biennial review of the City’s COI Code.

DISADVANTAGES:

There are no identified disadvantages related to adoption of the proposed Resolution.

ENVIRONMENTAL REVIEW:

No environmental review is required for this item.

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. Proposed Resolution (with Redline)

2. Resolution 5091

3. Resolution 5206

ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO

GRANDE APPROVING AN AMENDED CONFLICT OF INTEREST

CODE FOR DESIGNATED POSITIONS
WHEREAS, the Political Reform Act of 1974 (California Government Code Sections 81000 et seq.,) requires that governmental entities in the State of California adopt and promulgate a Conflict of Interest Code; and
WHEREAS, in 1987 the City of Arroyo Grande adopted a standardized Conflict of Interest Code, incorporating by reference the terms of Title 2 of the California Code of Regulations, Sections 18730 et seq., which contain the terms of a Standard Conflict of Interest Code; an Appendix of Designated Positions listing employees, officials, and consultants who make or participate in the making of decisions that may foreseeably have a material effect on their economic interests, and an Appendix of Disclosure Categories assigned to the Designated Positions; and WHEREAS, the Political Reform Act requires every local agency to review its Conflict of Interest Code biennially to determine if it is accurate and up-to-date or, to make amendments to the Code when necessitated by changed circumstances; and
WHEREAS, certain positions within the City of Arroyo Grande have been upgraded, added, reclassified, or removed which requires the Conflict of Interest Code to be amended; and WHEREAS, the City Council has determined that the attached Appendices, marked Exhibit “A” and Exhibit “B”, respectively, both of which are incorporated herein by this reference, accurately set forth those positions which should be designated and categories of economic interests which should be disclosed.

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

1. The above recitals are true, correct, and are incorporated herein by reference.

2. The City’s “Appendix of Designated Positions” is hereby amended and replaced in its entirety with Exhibit “A”, attached hereto and incorporated herein by this reference.

3. The City’s “Appendix of Disclosure Categories,” attached hereto as Exhibit “B” and incorporated herein by this reference, is hereby approved.

BE IT FURTHER RESOLVED that the terms of 2 California Code of Regulations Sections 18730 et seq., duly adopted by the Fair Political Practices Commission, are hereby incorporated by reference and with the attached Exhibits “A” & “B” shall constitute the Conflict of Interest Code of the City of Arroyo Grande.

RESOLUTION NO.

PAGE 2
BE IT FURTHER RESOLVED that this Resolution supersedes Resolution No. 5033 adopted September 22, 2020.

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

AYES:

NOES:

ABSENT:

The foregoing Resolution was passed and adopted this 27th day of September, 2022.

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

RESOLUTION NO.

PAGE 4

CONFLICT OF INTEREST CODE

FOR THE CITY OF ARROYO GRANDE
The Political Reform Act, Government Code Section 81000, et seq., requires state and local government agencies to adopt and promulgate conflict of interest codes.

The Fair Political Practices Commission has adopted a regulation, 2 California Code of Regulations Section 18730, which contains the terms of a standard conflict of interest code, which can be incorporated by reference in an agency's code. After public notice and hearing, it may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act.

Therefore, the terms of Title 2 of the California Code of Regulations Section 18730 and any amendments to it duly adopted by the Fair Political Practices Commission are hereby incorporated by reference, and along with the attached a ppendices, Exhibit “A” and Exhibit “B”, in which positions are designated and disclosure categories are set forth, constitute the conflict of interest code of the City of Arroyo Grande, which is considered the "agency" within the purview of this code.

Designated employees, committees, commissions, boards, and consultants shall file statements of economic interests with the City Clerk of the City of Arroyo Grande, who shall be and will perform the duties of filing officer for the City of Arroyo Grande and who will make the statements available for public inspection and reproduction (Gov. Code Section 81008). Upon receipt of the statements of those positions designated in Government Code Section 87200 (members of the City Council and Planning Commission, City Manager, City Attorney, and City Treasurer), the City Clerk shall make and retain a copy and forward the original of these statements to the Fair Political Practices Commission. Statements of all other designated positions will be retained by the City Clerk in accordance with State law.

RESOLUTION NO.

PAGE 5
EXHIBIT "A"

APPENDIX OF DESIGNATED POSITIONS
The following positions entail the making or participation in the making of decisions which may foreseeably have a material effect on financial interests:

Designated Position:2 Disclosure Category:

Management Analyst 1, 3
Assistant City Manager/Public Works Director 1, 2, 3
Capital Improvement Project Manager 1, 2, 3
Utilities Manager 1, 3
Public Works Manager 1, 3
Public Works Supervisor 1, 3
Director of Community Development 1, 2, 3
Planning Manager 1, 2, 3
Associate Planner 1, 2, 3
Assistant Planner 1, 2, 3
City Engineer 1, 2, 3
Senior Engineer 1, 2, 3
Associate Engineer 1, 2, 3
Assistant Engineer 1, 2, 3
Engineering Inspector 1, 2, 3
Building Official 1, 2, 3
Building and Fire Safety Inspector 1, 2, 3
Director of Legislative and Information Services/City Clerk 1, 3 Information Technology Manager 1, 3
Executive Assistant/Deputy City Clerk/Communications Coordinator 1, 3 Police Chief 1, 2, 3
Police Commander 1, 2, 3
Director of Administrative Services 1, 2, 3
Accounting Manager 1, 3
Human Resources ManagerOfficer 1, 3
Director of Recreation Services 1, 2, 3
Assistant City Attorney 1, 2, 3
Deputy City Attorney 1, 2, 3
Architectural Review Committee Member 1, 2, 3
Downtown Parking Advisory Board Member 1, 2, 3
Tourism Business Improvement District Board Member 1, 2, 3 Successor Agency Board Member 1, 2, 3
Consultants3 Determined on case by case basis
Exempt Officials4 1, 2, 3
2 In the event that State law or regulations regarding the filing of Conflict of Interest Statements should be amended, this Exhibit shall be changed to include the designated position and category of each official as required by said amendment. 3 Consultants: An individual is a consultant if the person serves in a staff capacity with the agency and in that capacity performs the same or substantially all the same duties for the agency that would otherwise be performed by a person holding a position specified or that should be specified in the City’s Conflict of Interest Code. The City Manager and/or the City Attorney may determine in writing that a particular consultant, although a “designated position”, is hired to perform a range of duties that are limited in scope and thus is not required to fully comply with the disclosure requirements described herein. Such written determination shall include a description of the consultant’s duties and, based upon that description, a statement of the extent of disclosure requirements. The City Manager’s and/or the City Attorney’s determination is a public record and shall be retained for public inspection in the same manner and location as this Conflict of Interest Code. 4 Exempt Officials include the Mayor, Members of the City Council, candidates for City offices, Members of the Planning Commission, City Manager, City Attorney, and City Treasurer who are all otherwise required to file disclosure statements pursuant to State Law.

RESOLUTION NO.

PAGE 6
EXHIBIT “B”

APPENDIX OF DISCLOSURE CATEGORIES

CATEGORIES OF DISCLOSURE FOR

DESIGNATED POSITIONS
The following shall be the categories of disclosure covered by this Policy:

1. Investments
California Fair Political Practices Committee (“FPPC”) Form 700, Schedules A-1 and A-2

2. Interests in Real Property
FPPC Form 700, Schedule B

3. Income & Business Positions
FPPC Form 700, Schedule C, D, and E
The officials and employees covered by this policy shall each disclose the categories 1, 2, and 3 as designated herein above set forth.

ATTACHMENT 2

ATTACHMENT 3

Item 8.g.

MEMORANDUM
TO: City Council
FROM: Michael T. Martinez, Chief of Police
BY: Zak Ayala, Commander
SUBJECT: Consideration of an Agreement for Police Fleet Lease and Purchase and Resolution Declaring Vehicles as Surplus
DATE: September 27, 2022
SUMMARY OF ACTION:

Approval of the recommended action will result in the purchase of nine (9) marked 2023 Ford Explorer vehicles for use by the Police Department’s Patrol Services; the purchase of one (1) 2023 Ford F-250 Truck for use by the Police Department’s Patrol Services; the purchase of two (2) marked 2023 Ford Rangers for use by the Police Department’s Support Services; and the purchase of one (1) 2023 Ford Transit Van for use by the Police Department’s Support Services. The action will also authorize the purchase of equipment for upfitting the vehicles and declaring 14 vehicles as surplus.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

The FY 2022-23 Budget allocates $178,000 to Lease Purchase Payments and $247,300 to Vehicle purchases for Police Department vehicles, totaling $425,300. Ford Explorer Lease Purchase Payments financing agreement for nine (9) Patrol vehicles and upfitting for a total not to exceed the amount of $749,103, through a 4-year municipal lease from Holman Capital Corporation at an APR of 4.57%, will include 4 annual payments of approximately $201,583; the first payment will be completed in FY 2022-23. The Ford F250 Truck, Ford Rangers, and Ford Transit Van expenditures will cost approximately $204,395 to be completed in FY 2022-23 as a cash purchase. The total to lease and purchase the proposed 13 vehicles will cost $405,978 in FY 2022-23. The vehicles will be on a full warranty during the terms of the lease. The City anticipates receiving $305,000 in revenue from the sale of the existing surplus vehicles that will offset this cost, reducing the net impact to $100,978.

RECOMMENDATION:
1) Authorize the purchase of (a) thirteen (13) vehicles from Mullahey Ford, (b) vehicle fleet upfitting from Dana Safety Supply, (c) MDC Computers from Code3 Technologies, and (d) dash cameras from Safe Fleet; 2) Authorize a financing agreement for nine (9)

Item 8.g.

City Council
Consideration of an Agreement for Police Fleet Lease and Purchase and Resolution Declaring Vehicles as Surplus
September 27, 2022

Patrol vehicles and upfitting for a total not to exceed the amount of $749,103, through a 4-year municipal lease from Holman Capital Corporation at an APR of 4.57% (4 annual payments of approximately $201,583); 3) Authorize the cash purchase of four (4) vehicles and upfitting not to exceed the amount of $204,395; 4) Adopt a Resolution declaring existing Police vehicles as surplus and authorizing their sale; and 5) Authorize the City Manager to execute all necessary documents.

BACKGROUND:

The Arroyo Grande Police Department (Police Department) introduced the fleet leasing program in 2008, and it has proven to be a cost-effective alternative to traditional purchasing. Municipal leasing has become a viable alternative for municipalities that operate small to medium sized fleets. The programs are competitive, cost-effective, and many times reduce the total average operating costs of operating the fleet.

Vehicles purchased through the fleet leasing program are covered by a manufacturer’s extended service contract during the entire term of the lease, which has proven valuable in reducing the annual cost of fleet maintenance. The $1.00 end of lease purchase option allows the vehicles to be declared as surplus and sold to cover equipment up-fitting costs each time a new lease program is approved. The program rotates the fleet every four years and the residual value of the fleet at the end of the lease term helps maintain the ongoing program. The current Police Department patrol fleet lease concluded in FY 2020- 21, at which time the vehicles were slated for replacement. Replacement of the patrol fleet was deferred for one year for financial savings to the City during the COVID-19 pandemic.

The patrol fleet is over 5 years old and has seen significant increases in maintenance costs to the Department due to vehicles no longer being under manufacturer warranties.

Vehicles from the Department’s support fleet, which include a 2015 Dodge Ram 1500, a 2001 Ford F550, a 2015 Dodge Ram 3500 and a 2005 Chevrolet Impala, are also over 5 years old and have also seen significant increases in maintenance costs due to being out of warranty.

The City’s Administrative Policy and Procedure C-006 states that replacement of equipment should consider the following criteria:

1. Condition of the equipment

2. Age of equipment (for autos – 5 years and/or 80,000 miles)

3. Maintenance history of the equipment
On June 14, 2022, the City Council approved the FY 2022-23 Mid-Cycle Budget Update that included the following Proposed Vehicle Replacement Requests table:

Item 8.g.

City Council
Consideration of an Agreement for Police Fleet Lease and Purchase and Resolution Declaring Vehicles as Surplus
September 27, 2022

The table reflects the total cost of vehicles that will be leased over a four-year term. The FY 2022-23 budget includes principal and interest payments for the first year’s payments, and the remaining amounts will be included in future budgets. The 4 proposed Police vehicles for purchase included in the proposed vehicle replacement request total $247,300 and the estimated lease payment for the 9 leased vehicles is estimated to be $178,000 per year for the four-year lease period, totaling $425,300 in FY 2022-23.

ANALYSIS OF ISSUES:

Police Fleet Lease and Purchase
A Vehicle Selection Committee was formed within the Police Department and evaluated a number of police-rated vehicles. In 2017, the Committee recommended switching to the Ford Explorer for the entire fleet. The Department was on schedule to transition the Patrol Ford Explorers at the end of the four-year rotation during FY 2021-22 but delayed the transition due to anticipated budgetary impacts of the COVID-19 pandemic. Due to supply chain issues with vehicle and equipment manufacturers, the Department was unable to obtain accurate price quotes from vendors until late August 2022.

A Vehicle Selection Committee convened in early 2022 and again selected the Ford Explorer for meeting the fleet needs of Patrol Services. The Committee further selected Ford trucks and a van for meeting the needs of Support Services (SWAT, DUI/Traffic, Cadet and Volunteers). The selection of the Ford vehicles for the patrol fleet will provide purchasing and support from a local dealer while continuing to provide consistency in vehicles and the opportunity to retain an inventory of regular maintenance related parts and equipment. The selection committee had initially recommended two (2) Ford Expeditions for Patrol supervisors, due to their increased cargo capacity, but this recommendation was changed back to Ford Explorers in order to save significant costs and maintain fleet consistency. This does not change the total amount of Patrol vehicles.

The Police Department Patrol fleet operates nine (9) marked (black and white) police vehicles. The current proposal calls for replacing and maintaining the same number of marked police vehicles under a municipal lease agreement.

Item 8.g.

City Council
Consideration of an Agreement for Police Fleet Lease and Purchase and Resolution Declaring Vehicles as Surplus
September 27, 2022

The following marked Patrol vehicles are in need of replacement:
 Unit 4601: 2017 Ford Explorer
 Unit 4602: 2017 Ford Explorer
 Unit 4603: 2017 Ford Explorer
 Unit 4604: 2017 Ford Explorer
 Unit 4605: 2017 Ford Explorer
 Unit 4606: 2017 Ford Explorer
 Unit 4607: 2017 Ford Explorer
 Unit 4608: 2017 Ford Explorer
 Unit 4609: 2017 Ford Explorer
The Police Department fleet operates four (4) marked vehicles used by Support Services.

The current proposal calls for replacing and maintaining the same number of marked Support vehicles. These vehicles would not be on the Patrol 4-year lease rotation, rather would be purchased, and remain in service for no less than 5 years due to their expected mileage and wear and tear, in relation to the Patrol vehicles.

The following marked Support vehicles are in need of replacement:
 Unit 4613: 2015 Dodge Ram 1500 Assigned to Cadet program  Unit 4623: 2001 Ford F550 Assigned to SWAT
 Unit 4622: 2015 Dodge Ram 3500 Assigned to Traffic Safety/ DUI  Unit 4627: 2005 Chevrolet Impala Assigned to Volunteers/ pool vehicle The Ford F-250 would replace Unit 4622, a 2015 Dodge Ram 3500. It addresses the specific needs of the Traffic Officers. The vehicle will be used to stage and transport their specialized equipment, such as traffic cones, lighting, measuring devices for major collisions and investigations, as well as the ability to safely pull the Traffic Safety/DUI trailer due to its specific weight capacity.

The two (2) Ford Rangers would replace Unit 4613, a 2015 Dodge Ram 1500, and Unit 4627, a 2005 Chevrolet Impala. The Ford Rangers address the needs of the Cadet and Volunteers, due to their passenger carrying capability, utility cargo beds, fuel economy, and small footprint compared to full size vehicles.

The Ford Transit Van would replace Unit 4623, a Ford-550 truck. It addresses the needs of SWAT officers, due to its passenger carrying capability, while also providing a means to safely store and secure their associated weapons and equipment.

Item 8.g.

City Council
Consideration of an Agreement for Police Fleet Lease and Purchase and Resolution Declaring Vehicles as Surplus
September 27, 2022

Upfitting of the vehicles to make them service ready will include all electronics and equipment upgrades, including graphics, emergency lighting, siren, consoles, computers, audio-video recorders, transport compartments, radios and other related safety equipment.

Ford Explorer vehicles Lease Purchase Payments will cost approximately $201,583 a year for four (4) years, as shown in Table 1 below:

Table 1 Ford Explorers Lease Purchase Payments
The Ford F-250 Truck, Ford Rangers, and Ford Transit Van expenditures will cost a total one-time payment of approximately $204,395, as shown in Table 2 below:

Table 2 Support Vehicles
Holman Capital Corporation has proposed a competitive lease finance agreement for nine (9) 2023 Ford Explorers; as well as up-fitting costs for the Patrol vehicles. It is recommended that the City enter into a municipal lease purchase agreement with Holman Capital Corporation, with a lease-financing rate of 4.57%, which results in four (4) annual payments of approximately $201,583. Holman Capital Corporation is headquartered in Laguna Hills, CA. Other bids for financing were Sparta Commercial Services at 5.06% and California First Leasing at 5.54%. Holman Capital Corporation has agreed to the purchase option of $1.00 at the end of the 4-year Term provided no event of default has occurred and is continuing at the end of the Term.

It is recommended that the City Council approve the lease agreement with Holman Capital Corporation Services for nine (9) patrol vehicles, and the purchase of four (4) support vehicles from Mullahey Ford, not to exceed the combined amount of $692,074.

This is the purchase of nine (9) Ford Explorers totaling $504,300, as shown in Table 1 Type
# of
units
Lease
/Buy
Mullahey
Ford
Dana
Safety
Code3
Tech
Safe
Fleet
Financing
Fee
Total
Purchase
Ford Explorers 9 Lease 504,300 149,358 32,089 60,355 3,000 749,103 Interest & Fees 57,231
Total Financing 806,334
Annual payment 201,583
Type
# of
units
Lease
/Buy
Mullahey
Ford
Dana
Safety
Total
Purchase
Ford Ranger Crew Cab 2 Buy 76,510 5,084 81,594
Ford F250 1 Buy 60,343 8,167 68,510
Ford Transit Van 1 Buy 50,921 3,370 54,291
187,774 16,621 204,395

Item 8.g.

City Council
Consideration of an Agreement for Police Fleet Lease and Purchase and Resolution Declaring Vehicles as Surplus
September 27, 2022

column titled Mullahey Ford, plus the four (4) Support Vehicles totaling $187,774, as shown in Table 2 column titled Mullahey Ford. This quote is less than the State of California contract used by larger jurisdictions. Additional benefits include purchasing from a local Arroyo Grande vendor, local tax revenue from the sale, and having the continued convenience of warranty coverage and local service on the vehicle fleet.

It is further recommended that the City Council authorize the purchase of the following Support vehicles: one (1) 2023 Ford F-250; two (2) 2023 Ford Rangers; and one (1) 2023 Ford Transit Van, including necessary upfitting, purchased with cash for $204,395 in order to reduce financing costs.

It is recommended that the City Council approve the upfitting agreement with Dana Safety Supply for thirteen (13) vehicles, not to exceed the amount of $165,979. This is the purchase of upfitting the nine (9) Ford Explorers totaling $149,358, as shown in Table 1 column titled Dana Safety, plus upfitting the four (4) Support Vehicles totaling $16,621, as shown in Table 2 column titled Dana Safety. This quote was selected due to significant cost savings from other businesses, quality of work, projected turn-around time, past City projects, and availability of components. Dana Safety Supply met the Department’s needs in performing installations and upgrades for the Department’s Administration fleet replacements in 2021.

It is recommended that the City Council authorize the purchase of MDC Computers from Code3 Technologies totaling $32,089. The current computers in the Patrol fleet are over 5 years old and were recommended for replacement by the former City Information Technology Manager due to their age, capabilities, and evolving technology requirements. Replacement of the computers would be from the same vendor, Code3 Technologies - Gettac, as the existing systems and would be covered by a manufacturer’s warranty for 4 years.

It is recommended that the City Council authorize the purchase of dash cameras from Safe Fleet totaling $60,355. The current audio-visual recorders in the Patrol fleet are over 5 years old and no longer under warranty. They are recommended for replacement due to service issues related to aging technology and expected repairs to motherboards.

Replacement of the audio-visual recorders would be from the same vendor, SafeFleet - COBAN, as existing systems, and would continue to work in conjunction with the Department’s body worn camera system and software. These recording systems would be covered by a manufacturer’s warranty for 4 years.

Item 8.g.

City Council
Consideration of an Agreement for Police Fleet Lease and Purchase and Resolution Declaring Vehicles as Surplus
September 27, 2022

Declaration of Vehicles as Surplus
In anticipation of this proposed fleet replacement, and to begin to realize revenues to apply towards this proposal, the Department surplused the following by Council Resolution on April 12, 2022:
 Unit 4601: 2017 Ford Explorer K9 SUV
 Unit 4627: 2005 Chevrolet Impala
 Unit 4622: 2015 Dodge Ram 3500
It is recommended that the City Council declare as surplus the following vehicles:
 Unit 4602: 2017 Ford Explorer
 Unit 4603: 2017 Ford Explorer
 Unit 4604: 2017 Ford Explorer
 Unit 4605: 2017 Ford Explorer
 Unit 4606: 2017 Ford Explorer
 Unit 4607: 2017 Ford Explorer
 Unit 4608: 2017 Ford Explorer
 Unit 4609: 2017 Ford Explorer
 Unit 4613: 2015 Dodge Ram 1500
 Unit 4623: 2001 Ford F550
The City anticipates receiving $280,000 in surplus revenue from the sale of the existing vehicles ($30,000 per Ford Explorer x 8, totaling $240,000, plus $20,000 for the Dodge Ram 1500, plus $20,000 for the Ford F550).

It is further recommended that the following vehicles be declared as surplus, as they were replaced following authorization by the City Council on July 27, 2021:
 Unit 4612: 2016 Dodge Charger
 Unit 4611: 2016 Dodge Charger
 Unit 4620: 2005 Honda Motorcycle
 Unit 4621: 2005 Honda Motorcycle
The City anticipates receiving $25,000 in surplus revenue from the sale of the existing vehicles that will offset this cost ($12,000 per Dodge Charger x 2, totaling $24,000, plus $500 per Honda Motorcycle totaling $1,000).

Based on the condition of the aforementioned Police Department fleet vehicles, a residual surplus value is estimated to be approximately $305,000. This surplus revenue from the sale of the existing vehicles will offset the cost of this project in FY 2022-23.

Item 8.g.

City Council
Consideration of an Agreement for Police Fleet Lease and Purchase and Resolution Declaring Vehicles as Surplus
September 27, 2022

ALTERNATIVES:

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

1. 1) Authorize the purchase of (a) thirteen (13) vehicles from Mullahey Ford, (b) vehicle fleet upfitting from Dana Safety Supply, (c) MDC Computers from Code3 Technologies, and (d) dash cameras from Safe Fleet; 2) Authorize a financing agreement for nine (9) Patrol vehicles and upfitting for a total not to exceed the amount of $749,103, through a 4-year municipal lease from Holman Capital Corporation at an APR of 4.57% (4 annual payments of approximately $201,583); 3) Authorize the cash purchase of four (4) vehicles and upfitting not to exceed the amount of $204,395; 4) Adopt a Resolution declaring existing Police vehicles as surplus and authorizing their sale; and 5) Authorize the City Manager to execute all necessary documents;

2. Do not authorize the purchase of some or all of the proposed vehicles, and/or do not approve the municipal lease, and/or do not adopt the proposed resolution to surplus certain vehicles, and direct staff to seek new proposals; or

3. Provide other direction to staff.

ADVANTAGES:

The proposed plan will continue to provide for the police fleet leasing program, update the police vehicle fleet, maintain standardized equipment, reduce maintenance costs, and maintain residual values on the existing fleet for surplus sale.

DISADVANTAGES:

No disadvantages are identified at this time.

ENVIRONMENTAL REVIEW:

No environmental review is required for this item.

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. Lease Purchase Financing Approval – Holman Capital Corporation

2. Proposed Resolution – Declaring Surplus Vehicles

City of Arroyo Grande/ Holman Capital Corporation
Master Equipment Lease-Purchase Agreement 9/27/2022

INDEX TO LEGAL DOCUMENTS

BANK-QUALIFIED, APPROPRIATION-BASED, ESCROW FUNDED

TAX-EXEMPT MASTER EQUIPMENT LEASE-PURCHASE AGREEMENT
DATED SEPTEMBER 30, 2022 BY AND BETWEEN

HOLMAN CAPITAL CORPORATION
And

CITY OF ARROYO GRANDE
Lease Documents:

Tab 1: Master Equipment Lease-Purchase Agreement;
Tab 2: Exhibit A – Payment Schedule;
Tab 3: Exhibit A-1 – Notice and Acknowledgment of Assignment; Tab 4: Exhibit B-1 – Insurance Coverage Request;
Tab 5: Exhibit B-2 – Self-Insurance Rider (if applicable); Tab 6: Exhibit C – Essential Use Certificate;
Tab 7: Exhibit D – Incumbency Certificate;
Tab 8: Exhibit E – Opinion of Lessee’s Counsel;
Tab 9: Exhibit F – Bank Qualified Certificate (omit if NBQ); Tab 10: Exhibit G – Post Issuance Tax Compliance Procedures; Tab 11: Exhibit H – Escrow Agreement;
Tab 12: Exhibit I - Resolution of Lessee;
Tab 13: Exhibit J - UCC-1 Financing Statement with attached Schedule A (to be filed by the Investor);
Tab 14: Exhibit K - Form 8038-G;
Tab 15: Exhibit L - Closing Memorandum/Payment Proceeds Direction; and Assignment Documents (Lessor and Investor Only):

Tab 16: Assignment Agreement with Schedule A thereto.

HOLMAN CAPITAL CORPORATION
ATTACHMENT 1

City of Arroyo Grande/ Holman Capital Corporation Page 1 Master Equipment Lease-Purchase Agreement 9/27/2022

MASTER EQUIPMENT LEASE-PURCHASE AGREEMENT

1. Agreement. Subject to the terms and conditions contained in this Master Equipment Lease-Purchase Agreement dated September 30, 2022 (this “Master Lease Agreement”), HOLMAN CAPITAL CORPORATION, as lessor (“Lessor”), whose mailing address is 25231 Paseo de Alicia, Suite 105, Laguna Hills, CA 92653, hereby purchases from and agrees to sell, transfer and lease back to the CITY OF ARROYO GRANDE as lessee (“Lessee”), whose mailing address is 300 E Branch Street , Arroyo Grande, CA 93420, and Lessee hereby sells to and agrees to acquire, purchase and lease back from Lessor, the items of personal property (together with any replacement parts, additions, substitutions, repairs or accessories now or hereafter incorporated in or affixed to it, hereinafter referred to collectively as the “Equipment”) described, particularly, in each Payment Schedule to be issued under this Master Lease Agreement in the form attached hereto as Exhibit A (the “Payment Schedule”). The Master Lease Agreement and each Payment Schedule issued hereunder shall constitute a separate “Lease.”

2. Term. The term of each Lease under a Payment Schedule issued under this Master Lease Agreement (the “Lease Term”) begins as of the Commencement Date stated in the applicable Payment Schedule and shall continue so long as any amounts remain unpaid under that Payment Schedule. Each Lease Term will terminate upon the first to occur of: (a) the exercise by Lessee of the option to purchase the Equipment pursuant to Paragraph 11 and the applicable Payment Schedule, (b) Lessor’s election to terminate this Lease Agreement pursuant to Paragraph 17, (c) Lessee’s option to terminate this Lease Agreement pursuant to Paragraph 4, and (d) the payment by Lessee of all sums required to be paid by Lessee under the applicable Payment Schedule.

3. Escrow Agreements. On the Commencement Date for an applicable Payment Schedule, Lessor and Lessee shall enter into an escrow agreement (an “Escrow Agreement”) dated the respective Commencement Date, between Lessor, Lessee, and the escrow agent specified in the particular Escrow Agreement, relating to the escrow fund (an “Escrow Fund”) created thereunder. On each Commencement Date, Lessor shall deposit the amount specified in the applicable Escrow Agreement into the Escrow Fund to be held in escrow and applied upon the express terms and conditions of the Escrow Agreement for the acquisition of the equipment which shall be disbursed as provided for in the Closing Memorandum and/or Escrow Agreement applicable to the particular Payment Schedule.

4. Rental Payments. Lessee agrees to pay the rental payments specified in the applicable Payment Schedule for the specified Lease Term in the amounts and on the dates identified in the Payment Schedule. Payment of all rental payments and other amounts payable shall be made to Lessor at its abovestated address or as it shall otherwise designate in writing. As set forth in the applicable Payment Schedule, a portion of each rental payment is paid as, and represents payment of, interest (as calculated based on a 360-day year consisting of 12 months of 30 days), and the balance of each rental payment is paid as, and represents payment of, principal.

Notwithstanding any provision to the contrary in this Master Lease Agreement, Lessee may terminate this Lease, or any individual Payment Schedule, at the end of any fiscal year of Lessee (a “Fiscal Year”) if sufficient funds are not appropriated by Lessee’s governing body to pay rental payments and other amounts due under the Lease or any individual Payment Schedule during the next succeeding Fiscal Year (an “Event of Nonappropriation”). Lessee hereby agrees to notify Lessor at least 30 days prior to the last day of its then current Fiscal Year of the occurrence of an Event of Nonappropriation or, if nonappropriation has not occurred by that date, promptly upon the occurrence of an Event of Nonappropriation.

Lessee covenants, represents and warrants that: (a) if a Payment Schedule is issued concurrently with this Master Lease Agreement, it has made sufficient appropriations or has other legally available funds to pay all rental payments due during the first Fiscal Year under that Payment Schedule; (b) the officer of Lessee responsible for budget preparation will do all things lawfully within his/her power to obtain appropriated funds for the payment of rental payments and other amounts required to be paid under any

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Payment Schedule in the first Fiscal Year under that particular Payment Schedule and in each next succeeding Fiscal Year for the Lease Term; and (c) Lessee acknowledges that Lessor has relied upon these representations as an inducement to enter into this Master Lease Agreement. If an Event of Nonappropriation shall occur, Lessee agrees, at Lessee’s sole cost and expense, peaceably to deliver the corresponding Equipment under any Payment Schedule to Lessor at such location in the continental United States as is specified by Lessor, in the condition required by Paragraph 8 of this Lease Agreement, on or before the effective date of termination.

Lessee’s obligation to pay rental payments and any additional amounts payable under any Payment Schedule constitutes a current obligation payable exclusively from legally available funds and shall not be construed to be an indebtedness within the meaning of any applicable constitutional or statutory limitation or requirement.

5. Essentiality. Subject to Paragraph 4 of this Lease Agreement, Lessee’s present intention is to make rental payments for any Lease Term as long as it has sufficient appropriations or other legally available funds. Lessee represents that, with respect hereto, (a) the use and operation of any Equipment to be leased under a Payment Schedule shall be essential to its proper, efficient, and economic governmental operation and (b) the functions performed by such Equipment could not be transferred to other equipment available for its use. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last rental payment scheduled to be paid under any Payment Schedule.

On each Commencement Date, Lessee shall complete and provide Lessor a certificate in the form of Exhibit C.

6. Disclaimer of Warranties. LESSEE REPRESENTS AND AGREES THAT IT HAS SELECTED, OR WILL SELECT, THE EQUIPMENT PRIOR TO HAVING REQUESTED LESSOR TO FINANCE THE SAME. LESSEE

AGREES THAT LESSOR HAS NOT MADE ANY, AND MAKES NO, REPRESENTATIONS OR WARRANTIES OF

ANY KIND OR NATURE, DIRECTLY OR INDIRECTLY, EXPRESS OR IMPLIED, AS TO ANY MATTER

WHATSOEVER, INCLUDING (WITHOUT LIMITATION) THE SUITABILITY OF THE EQUIPMENT, ITS

DURABILITY, ITS FITNESS FOR ANY PARTICULAR PURPOSE, ITS MERCHANTABILITY, ITS CONDITION, ITS

CAPACITY, ITS OPERATION, ITS PERFORMANCE, ITS DESIGN, ITS MATERIALS, ITS WORKMANSHIP AND/OR ITS QUALITY. AS BETWEEN LESSEE AND LESSOR, LESSEE LEASES, PURCHASES AND ACQUIRES THE EQUIPMENT “AS IS” “WHERE IS” AND “WITH ALL FAULTS.” Lessor hereby assigns to Lessee, to the extent that it may lawfully do so, so long as no Event of Default and no Event of Nonappropriation shall have occurred and be continuing under any Payment Schedule, all rights and benefits that Lessor may have under any warranty, guaranty or the like that may be made with respect to any designated Equipment by the manufacturer, seller and/or supplier (collectively, the “Vendor”) thereof. Lessor shall not be liable to Lessee or any third party for any loss, damage, injury or expense of any kind or nature caused directly or indirectly by any of the Equipment or the use or maintenance thereof or any defect therein, the failure of operation thereof or by any interruption of service or loss of use thereof or for any loss of business or damage whatsoever and howsoever caused. Lessor makes no warranty as to the treatment of this Lease for tax or accounting purposes or as to the compliance of the Equipment with applicable government regulations or requirements. Lessee agrees to look solely to the Vendor for any claim arising from any defect, breach of warranty, failure or delay in delivery, mis-delivery or inability to use the Equipment for any reason whatsoever and Lessee’s obligations to Lessor shall not in any manner be affected thereby, including (without limitation) Lessee’s obligations to pay Lessor all rental payments and other amounts payable under any Payment Schedule. Lessee has selected, and will select, both the Equipment and the Vendor and acknowledges that Lessor has not participated in any way in Lessee’s selection of the Equipment or the Vendor. Lessor has no obligation to install, erect, test, adjust, service or maintain the Equipment.

7. Delivery and Acceptance; Quiet Enjoyment. Lessee shall accept the Equipment for which disbursement is requested from any Escrow Fund upon its delivery and authorizes Lessor to insert on each Payment Schedule the serial numbers and any additional description of the items of Equipment so

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delivered. As evidence of that acceptance, Lessee shall execute and deliver to Lessor a Certificate of Acceptance in the form attached as Exhibit A to each Escrow Agreement. Regardless of whether Lessee has furnished a Certificate of Acceptance pursuant to this Paragraph 7, by making a rental payment after its receipt of the Equipment, Lessee shall be deemed to have accepted the Equipment on the date of such rental payment for purposes hereof. During the Lease Term, Lessee shall be entitled to quiet enjoyment of the Equipment, subject to the terms of this Master Lease Agreement.

8. Use of Equipment; Maintenance and Repairs. Lessee shall keep the Equipment within the State at the “Equipment Location” stated in the applicable Payment Schedule and Lessee shall not remove any of the Equipment therefrom without Lessor’s prior written consent. Lessee shall use the Equipment in a careful manner and shall at all times, at its sole expense, keep the Equipment in good operating condition, repair and appearance and comply with all laws, ordinances, regulations or requirements of any governmental authority, official, board or department relating to its installation, possession, use or maintenance. Lessee shall not make any alterations, additions, or improvements to the Equipment that are not readily removable without causing damage to or reducing the value of the Equipment. All alterations, additions, or improvements not readily removable shall become property of Lessor.

9. Security Interest; Title to Equipment. (a) The provisions of this Section 9(a) apply generally to all Equipment, regardless of the type, and to each Escrow Fund (if any/applicable): To secure the performance of all of Lessee’s obligations hereunder and under each Payment Schedule, Lessee hereby grants to Lessor, and Lessor shall have and retain, a security interest constituting a first priority and perfected lien and security interest on the Equipment delivered under each Payment Schedule and on any attachments, proceeds therefrom. Lessee agrees to execute and deliver such additional documents, including, without limitation, opinions of counsel, financing statements, landlord-tenant or mortgagee waivers, notices and similar instruments, in form satisfactory to Lessor, that Lessor deems necessary or appropriate to establish and maintain its security interest in any Equipment or for the confirmation or perfection of Lessor’s rights hereunder and under the applicable Payment Schedule. As further security therefor, Lessee hereby grants to Lessor a first priority security interest in the cash and negotiable instruments from time to time in each Escrow Fund and all proceeds (cash and non-cash) thereof, and agrees with respect thereto that Lessor shall have all the rights and remedies of a secured party under the applicable provisions of the Uniform Commercial Code as enacted in the applicable state. Lessee, at its expense, will protect and defend Lessee’s rights in the Equipment and Lessor’s rights and interests therein and will keep the Equipment free and clear from any and all claims, liens, encumbrances and legal processes of Lessee’s creditors and other persons. Lessor shall have the right during normal hours, upon reasonable prior notice to Lessee, to enter upon the premises where the Equipment is located in order to inspect the Equipment.
(b) Solely with respect to Equipment that is not comprised of vehicles and during any Lease Term, ownership and legal title of all of the Equipment and all substitutions, repairs, modifications, and replacements shall be in Lessee, and Lessee shall take all necessary action to vest such ownership and title in Lessee. Lessor does not own such Equipment, and, by this Lease Agreement, Lessor is merely financing the acquisition of the Equipment for the Lessee. Lessor has not been in the chain of title, does not, and will not, operate, control or have possession or control over the Equipment, or Lessee’s use, maintenance, operation, storage, or maintenance of the Equipment. Lessee is entitled to use and possession of the Equipment, subject to the rights of Lessor hereunder (including its interest in the Equipment as the lessor hereunder). If Lessor terminates this Master Lease Agreement or any Payment Schedule pursuant to Paragraph 17 hereof or an Event of Nonappropriation occurs, all rights, title, and interests in the Equipment shall immediately vest in Lessor free and clear of any right, title or interest of Lessee. Lessee, at its expense, will protect and defend Lessee’s rights in the Equipment and Lessor’s rights and interests therein and will keep the Equipment free and clear from any and all claims, liens, encumbrances and legal processes of Lessee’s creditors and other persons.

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(c) Solely with respect to Equipment consisting of vehicles, the provisions of this Section 9(c) shall apply: Lessee agrees to either cause the original registration to reflect Lessor or its assignee as legal owner of the Equipment or endorse the certificate of ownership to show Lessor or its assignee as legal owner (as required by Section 6301 of the California Vehicle Code). Lessee agrees to execute and deliver such additional documents, including, without limitation, opinions of counsel, MSOs/Certificates of Origin, Title Applications, notices and similar instruments, in form satisfactory to Lessor, that Lessor deems necessary or appropriate to establish and maintain its security interest in such Equipment or for the confirmation or perfection of Lessor’s rights hereunder and under the applicable Payment Schedule. During any Lease Term, Lessee shall be the owner (as defined in Section 460 of the California Vehicle Code) of the Equipment entitled to use and possession of such Equipment, subject to the rights of Lessor hereunder, which is the legal owner (as defined in Section 370 of the California Vehicle Code) of the Equipment. If Lessor terminates this Lease Agreement pursuant to Paragraph 17 hereof or an Event of Nonappropriation occurs, all rights, title, and interests in the specified Equipment shall immediately vest in Lessor free and clear of any right, title or interest of Lessee.

10. Personal Property. The Equipment shall be and remain personal property notwithstanding the manner in which it may be attached or affixed to realty. Lessee covenants that, unless Lessee owns the premises in which the Equipment is to be located and such premises are not subject to any mortgage or lease. At Lessor’s request, Lessee shall provide Lessor with a waiver from each landlord and/or mortgagee of the premises in which any Equipment is to be located of any rights that such landlord and/or mortgagee may have in respect of any of that Equipment.

11. Purchase of Equipment by Lessee; Prepayment. At the option of Lessee, and provided that no Event of Default has occurred and is continuing hereunder, Lessor’s interest in all, but not less than all, of the Equipment described in a particular Payment Schedule will be transferred, conveyed and assigned to Lessee, and this Lease shall terminate: (a) upon payment in full of the rental payments and all other payments then due under that particular Payment Schedule, or (b) on any rental payment date under the particular Payment Schedule, provided Lessee shall have delivered written notice at least 30 days prior to such date of Lessee’s intention to purchase the Equipment pursuant to this provision, by paying to Lessor, in addition to the rental payment due on such date, an amount equal to the concluding payment (the “Concluding Payment”) shown for such rental payment date in the particular Payment Schedule. Lessee shall not have the option to purchase any Equipment as provided in the foregoing clause (b) on any rental payment date for which a Concluding Payment is not stated in the applicable Payment Schedule.

12. Risk of Loss. Lessee shall bear the entire risk of loss, theft, destruction of or damage to the Equipment or any part thereof from any cause whatsoever during any Lease Term and thereafter until redelivery to a location designated by Lessor, and shall not be relieved of the obligation to pay rental payments or any other obligation hereunder and under any Payment Schedule because of any such occurrence. If (a) the Equipment or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof hereunder is taken under the exercise of the power of eminent domain, Lessee shall immediately notify Lessor. Lessee and Lessor shall cause the net proceeds of any insurance claim (including self-insurance) or condemnation award to be applied, at Lessor’s option, to (i) the prompt repair, restoration, modification or replacement of the applicable Equipment so affected or (ii) the payment in full of the then applicable Concluding Payment. Any balance of net proceeds remaining after completion of such work or payment of such Concluding Payment shall be paid promptly to Lessee. If the net proceeds are insufficient to pay the costs of such repair, restoration, modification or replacement or to pay such Concluding Payment in full, Lessee shall, at Lessor’s direction and sole discretion, either complete the work or pay the then applicable Concluding Payment in full, and in either case pay any cost in excess of the amount of net proceeds, but only from legally available funds.

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13. Insurance. (a) Insurance Policies. If Lessee is not self-insured (as hereafter provided), Lessee shall, at its expense, keep all Equipment fully insured against loss, fire, theft, damage or destruction from any cause whatsoever in an amount not less than the greater of (a) the total rental payments for the Lease Term under the applicable Payment Schedule for the Equipment listed on that Payment Schedule, and (b) the full replacement cost of that Equipment without consideration for depreciation. Lessee shall also provide such additional insurance against injury, loss or damage to persons or property arising out of the use or operation of the Equipment as is customarily maintained by the owners of like property, with companies satisfactory to Lessor. Each policy shall provide that, as to the interest or coverage of Lessor or Lessor’s assignee, the insurance afforded thereby shall not be suspended, forfeited or in any manner prejudiced by any default or by any breach of warranty, condition or covenant on the part of Lessee. If Lessee shall fail to provide any such insurance required hereunder or, within ten (10) days after Lessor’s request therefor, shall fail to deliver the policies or certificates thereof to Lessor, then Lessor, at its option, shall have the right to procure such insurance and to add the full cost thereof to the rental payment next becoming due, which Lessee agrees to pay as additional rent under the applicable Payment Schedule. All such insurance shall be in form, issued by such insurance companies and be in such amounts as shall be satisfactory to Lessor, and shall provide that losses, if any, shall be payable to Lessor and its successors and/or assigns as “loss payee,” and all such liability insurance shall name Lessor and its successors and/or assigns as an “additional insured.” Lessee shall pay the premiums for such insurance and deliver to Lessor a certification in the form of Exhibit B-1 and satisfactory evidence of the insurance coverage required hereunder on or before the Commencement Date of the applicable Payment Schedule, but in no event later than the date on which an Acceptance Certificate is executed with respect to any Equipment. Lessee hereby irrevocably appoints Lessor as Lessee’s attorney-in-fact to make claim for, receive payments of and execute and endorse all documents, checks or drafts received in payment for loss or damage under any such insurance policy.
(b) Self-Insurance. If Lessee is self-insured (including any self-insured retentions and deductibles or participation in a risk pool) with respect to equipment such as the Equipment, the Equipment will be self-insured under an actuarially sound self-insurance program that is subject to Lessor’s prior written consent and approval. If the Lessee shall maintain during the Lease Term under the applicable Payment Schedule such actuarially sound self-insurance program and in lieu of the coverage required under Section 13(a) hereunder, Lessee will, at all times, provide Lessor a certification in the form of Exhibit B-2 together with evidence of the self-insurance program in form and substance satisfactory to Lessor. The approval of self-insurance, self-insured retentions, and deductibles are all subject to Lessor’s approval and prior written consent, which shall be based on the Lessor’s then current credit underwriting practices.

14. Fees; Taxes and Other Governmental Charges; Liens. Lessee covenants and agrees at all times to keep the Equipment free and clear of all levies, liens (other than those created hereunder) and encumbrances, and to pay all charges, taxes and fees (including any recording or stamp fees or taxes) that may now or hereafter be imposed upon the ownership, leasing, rental, sale, purchase, possession or use of the Equipment and shall give Lessor immediate written notice of any of the foregoing. If any of same shall remain unpaid when due, Lessor may pay same and add such payment to the rental payment next becoming due under the applicable Payment Schedule, as additional rent. Lessee shall execute and deliver to Lessor upon Lessor’s request such further instruments and documents containing such other assurances as Lessor deems necessary or advisable for the confirmation or perfection of Lessor’s rights hereunder and under the applicable Payment Schedule or to otherwise effectuate the intent of this Master Lease Agreement and the Lease.

15. Indemnification. (a) To the extent authorized by law, Lessee shall indemnify and save Lessor, its officers, employees, agents, servants, successors and assigns, harmless from any and all liabilities (including, without limitation, negligence, tort and strict liability), damages, expenses, claims, actions, proceedings, judgments, settlements, losses, liens and obligations, including (without limitation) attorneys’ fees and costs (“Claims”), arising out of the ordering, purchase, delivery, rejection, non-delivery, ownership,

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selection, possession, operation, control, use, condition, maintenance, transportation, storage, repair, return or other disposition of the Equipment, any claims arising under federal, state or local environmental protection and hazardous substance clean up laws and regulations and any claims of patent, trademark or copyright infringement or, if Lessee shall be in default hereunder or under any Payment Schedule, arising out of the condition of any item of Equipment sold or disposed of after use by Lessee, including (without limitation) claims for injury to or death of persons and for damage to property. The indemnities, assumption of liabilities and obligations herein provided shall be payable solely from funds legally available for such purpose and shall continue in full force and effect notwithstanding the expiration, termination or cancellation of this Master Lease Agreement or any Payment Schedule for any reason whatsoever.

However, Lessee shall not be obligated to indemnify Lessor from Claims arising from the actual, proven and proximate gross negligence, bad faith, fraud or willful misconduct of Lessor. (b) Lessor’s Indemnification of Lessee. Lessor shall indemnify, defend, and hold harmless Lessee, its Governing Board, boards, commissions, officials, employees, and volunteers (“Indemnitees”) from and against any and all Claims arising from or in any manner connected to Lessor's willful misconduct or any grossly negligent act or omission, whether alleged or actual, regarding performance of services or work conducted or performed pursuant to this Master Lease Agreement or any Payment Schedule. If Claims are filed against Indemnitees that allege negligence on behalf of Lessor, Lessor shall have no right of reimbursement against Indemnitees for the costs of defense even if gross negligence is not found on the part of Lessor. However, Lessor shall not be obligated to indemnify Indemnitees from Claims arising from the negligence or willful misconduct of Indemnitees.

16. Assignment; Subleasing. LESSEE SHALL NOT ASSIGN, PLEDGE, MORTGAGE, SUBLET OR

OTHERWISE TRANSFER OR ENCUMBER ANY OF ITS RIGHTS UNDER THIS MASTER LEASE AGREEMENT OR

ANY PAYMENT SCHEDULE, ANY ESCROW AGREEMENT (INCLUDING ANY ESCROW FUND CREATED

THEREUNDER) OR IN THE EQUIPMENT OR ANY PART THEREOF, NOR PERMIT ITS USE BY ANYONE OTHER THAN LESSEE AND ITS REGULAR EMPLOYEES, WITHOUT LESSOR’S PRIOR WRITTEN CONSENT, WHICH MAY BE WITHHELD OR CONDITIONED IN LESSOR’S REASONABLE DISCRETION. ANY SUCH PURPORTED TRANSFER, ASSIGNMENT OR OTHER ACTION WITHOUT LESSOR’S PRIOR WRITTEN CONSENT SHALL BE VOID.

Lessor may, at any time and from time to time, assign, transfer or otherwise convey all or any part of its interest in any Equipment, this Master Lease Agreement, any Payment Schedule and any Escrow Agreement (including any Escrow Fund created thereunder), including, but not limited to, Lessor’s rights to receive the rental payments under the applicable Payment Schedule or any part thereof (in which event Lessee agrees to make all rental payments thereafter to the assignee designated by Lessor) without the necessity of obtaining Lessee’s consent, provided, however, Lessor will deliver to Lessee prior written notice of an assignment. No such assignment, transfer or conveyance shall be effective until Lessee shall have received a written notice of assignment that discloses the name and address of each such assignee. During the term of this Lease, Lessee shall keep, or cause to be kept, a complete and accurate record of all such assignments with respect hereto in form necessary to comply with Section 149 of the Internal Revenue Code of 1986, as amended (the “Code”). Lessee agrees (unless otherwise stated), if so requested, to acknowledge any such assignment in writing within 15 days after request therefor in the form attached as Exhibit A-1 hereto. Lessee further agrees that any moneys or other property received by Lessor as a result of any such assignment, transfer or conveyance shall not inure to Lessee’s benefit.

17. Events of Default; Remedies. Each of the following events constitutes an “Event of Default” hereunder: (a) Lessee fails to pay in full the rental payment due under any Payment Schedule on any date upon which such rental payment is due; (b) Lessee fails to comply with any other agreement or covenant of Lessee hereunder or under any Payment Schedule for a period of 30 days following receipt of written notice of violation of such agreement or covenant and demand that such violation be remedied; (c) Lessee institutes any proceedings under any bankruptcy, insolvency, reorganization or similar law or a receiver or similar officer is appointed for Lessee or any of its property; (d) any warranty, representation or

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statement made in writing by or on behalf of Lessee in connection herewith or in connection with any Payment Schedule is found to be incorrect or misleading in any material respect on the date made; (e) actual or attempted sale, lease or encumbrance of any of the Equipment or the making of any levy, seizure or attachment thereof or thereon; or (f) Lessee defaults in its obligations under any other agreement for borrowing money, lease financing of property, or otherwise receiving credit and the obligee thereunder (or trustee on its behalf) is permitted to exercise any remedies under such other agreement.

Immediately upon the occurrence of an Event of Default hereunder, Lessor may terminate this Master Lease Agreement, the applicable Payment Schedule, the Lease, or Lessee’s rights hereunder and in any such event repossess the applicable Equipment, which Lessee hereby agrees, at its expense, to surrender promptly to Lessor at such location in the continental United States as Lessor shall direct. Such right of repossession and other rights as specifically provided in this Paragraph 17 shall constitute the sole remedies for Lessee’s failure to make payments or otherwise perform its obligations when required hereunder and under any Payment Schedule. If Lessor is entitled to repossess the Equipment under any provision of this Master Lease Agreement, Lessee shall permit Lessor or its agents to enter the premises where the Equipment is then located. In the event of any such repossession, Lessee shall execute and deliver such documents as may reasonably be required to restore title to and possession of the Equipment to Lessor, free and clear of all liens and security interests to which the Equipment may have become subject.

Upon repossession, if the Equipment is damaged or otherwise made less suitable for the purposes for which it was manufactured than when delivered to Lessee, Lessee agrees, at its option, to (a) repair and restore the Equipment to the same condition in which it was received by Lessee (reasonable wear and tear excepted) or (b) pay to Lessor the reasonable costs of such repair and restoration. If Lessor sells or otherwise liquidates the Equipment following an Event of Default or an Event of Nonappropriation as herein provided and realizes net proceeds (after payment of costs) in excess of total rental payments for such Equipment that would have been paid during the applicable Lease Term plus any other amounts then due hereunder, Lessor shall immediately pay the amount of any such excess to Lessee.

If Lessor terminates this Master Lease Agreement, any Payment Schedule and/or the Lease under this Paragraph 17 or an Event of Nonappropriation occurs hereunder and in either case Lessee continues to use the Equipment or if Lessee otherwise refuses to pay rental payments hereunder due during a Fiscal Year for which Lessee’s governing body has appropriated sufficient legally available funds to pay such rental payments due hereunder, Lessor (i) may declare the rental payments due and owing for the Fiscal Year for which such appropriations have been made to be immediately due and payable and (ii) shall be entitled to bring such action at law or in equity to recover money and other damages attributable to such holdover period for the Equipment.

Lessor shall also be entitled to exercise any or all remedies available to a secured party under the applicable provisions of the Uniform Commercial Code as enacted in the applicable state, and all other rights and remedies that Lessor may have at law or in equity. All rights and remedies of Lessor shall be cumulative and not alternative. Lessor’s failure to exercise or delay in exercising any right or remedy shall not be construed as a waiver thereof, nor shall a waiver on one occasion be construed to bar the exercise of any right or remedy on a future occasion. Lessee agrees to reimburse Lessor for any expenses reasonably incurred by Lessor with respect to the enforcement of any of the remedies listed above or any other remedy available to Lessor, but only from legally available funds.

18. Late Payments. Whenever any rental payment or other amount payable to Lessor by Lessee under any Payment Schedule is not paid within ten (10) days of the regularly scheduled due date (or if not a regularly scheduled due date, then the due date specified in an undisputed invoice), Lessee agrees to pay Lessor a late charge on the delinquent amount at the rate of one percent (1%) per month, or the maximum amount permitted under applicable law, whichever is less. Such amount(s) shall be payable solely from legally available funds in addition to all amounts payable by Lessee as a result of the exercise of any of the remedies herein provided.

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19. Rental Payments to Be Unconditional. Except as expressly set forth in this Master Lease Agreement (including Paragraph 4), Lessee agrees that as of the Commencement Date of any Payment Schedule, Lessee’s obligations under the Lease are absolute and unconditional and shall continue without set-off, deduction, counterclaim, abatement, recoupment, or reduction and regardless of any disability of Lessee to use the Equipment or any part thereof because of any reason including, but not limited to, war, act of God, governmental regulations, strike, loss, damage, destruction, obsolescence, failure of or delay in delivery or failure of the Equipment to operate properly.

20. Tax Covenants. Lessee agrees that it will not take any action that would cause the interest component of rental payments under any Payment Schedule to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes, nor will it omit to take or cause to be taken, in a timely manner, any action or omission which would cause the interest component of rental payments under any Payment Schedule to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes. Lessee agrees, for each Payment Schedule, to (a) execute and deliver to Lessor, upon Lessor’s request, a tax certificate and agreement in form and content acceptable to Lessor and Lessee, relating to the establishment and maintenance of the excludability from gross income of the interest component of rental payments under the applicable Payment Schedule for federal income tax purposes; (b) complete and file in a timely manner an information reporting return as required by the Code; and (c) rebate an amount equal to excess earnings on any Escrow Fund to the federal government if required by, and in accordance with, Section 148(f) of the Code, and make the determinations and maintain the records required by the Code. Any tax certificate or agreement executed pursuant hereto shall be fully incorporated by reference herein.

Lessee represents that neither Lessee nor any agency or unit of Lessee has, or will have, on hand any property, including cash and securities, that is legally required or otherwise restricted (no matter where held or the source thereof) to be used directly or indirectly to purchase the Equipment described in any Payment Schedule. Lessee has not and will not establish any funds or accounts (no matter where held or the source thereof) the use of which is legally required or otherwise restricted to pay directly or indirectly rental payments under any Payment Schedule. Lessor and Lessee certify that, so long as any rental payments hereunder remain unpaid, moneys on deposit in the Escrow Fund will not be used in a manner that will cause any Payment Schedule to be classified as an “arbitrage bond” within the meaning of Section 148(a) of the Code.

If Lessor either (i) receives notice, in any form, from the Internal Revenue Service or (ii) reasonably determines, based on an opinion of nationally recognized independent tax counsel selected by Lessor, that Lessor may not exclude any Interest paid under any Lease from its Federal gross income (each an "Event of Taxability"), the Lessee shall pay to Lessor upon demand (x) an amount which, with respect to Rental Payments previously paid under the Lease and taking into account all penalties, fines, interest and additions to tax (including all federal, state and local taxes imposed on the Interest due through the date of such event), will restore to Lessor its after-tax yield (assuming tax at the highest marginal tax rate and taking into account the time of receipt of such Rental Payments and reinvestment at the after-tax yield rate) on the transaction evidenced by such Lease through the date of such event and (y) as additional Rental Payments to Lessor on each succeeding Payment Date such amount as will maintain such after-tax yield to Lessor.

It is Lessor’s and Lessee’s intention that this Lease and the Payment Schedules issued under this Master Lease Agreement not constitute a “true” lease for federal income tax purposes and, therefore, it is Lessor’s and Lessee’s intention that Lessee be considered the owner of the Equipment hereunder for federal income tax purposes.

21. Lessee Representations, Warranties and Covenants. Lessee hereby represents and warrants to and agrees with Lessor that:

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(a) Lessee is a political subdivision of the State of California, within the meaning of Section 103(c) of the Code, and will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as such.
(b) Lessee has the power and authority under applicable law to enter into the transactions contemplated by this Lease, any Payment Schedule and any Escrow Agreement and has been duly authorized to execute and deliver this Lease, all Payment Schedules and all Escrow Agreements and to carry out its obligations hereunder and thereunder. Lessee has provided to Lessor a full, true and correct copy of a resolution or other appropriate official action of Lessee’s governing body specifically authorizing Lessee to execute and deliver this Lease, all Payment Schedules and Escrow Agreements and all documents contemplated hereby and thereby, including the delegation by Lessee’s Governing Board to a designated officer to execute on Lessee’s behalf all future Payment Schedules. Lessee has provided to Lessor a full, true, and correct copy of an Incumbency Certificate in substantially the form attached as Exhibit D hereto relating to the authority of the officers who have executed and delivered this Master Lease Agreement and who will execute and deliver this Master Lease Agreement on behalf of Lessee. Lessee will provide in the future similar Incumbency Certificates with respect to each Payment Schedule and Escrow Agreement and all documents in connection therewith on behalf of Lessee. (c) All requirements have been met and procedures have occurred in order to ensure the enforceability of this Master Lease Agreement, any Payment Schedule and any Escrow Agreement, and Lessee has complied with such public bidding requirements, if any, as may be applicable to the transactions contemplated by this Master Lease Agreement, any Payment Schedule and any Escrow Agreement. (d) Lessee is not subject to any legal or contractual limitation or provision of any nature whatsoever that in any way limits, restricts or prevents Lessee from entering into this Master Lease Agreement, any Payment Schedule and any Escrow Agreement, or performing any of its obligations hereunder or thereunder, except to the extent that such performance may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally. (e) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, known to be pending or threatened against or affecting Lessee, nor to the best knowledge of Lessee is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the transactions contemplated by this Master Lease Agreement, any Payment Schedule or any Escrow Agreement, or any other agreement or instrument to which Lessee is a party and that is used or contemplated for use in the consummation of the transactions contemplated by this Master Lease Agreement, any Payment Schedule or any Escrow Agreement. All authorizations, consents, and approvals of governmental bodies or agencies required in connection with the execution and delivery by Lessee of this Master Lease Agreement or in connection with the carrying out by Lessee of its obligations hereunder, including the subsequent execution of any Payment Schedule, have been obtained. (f) The payment of the rental payments or any portion thereof hereunder is not (under the terms of this Master Lease Agreement and any Payment Schedule) directly or indirectly (i) secured by any interest in property used or to be used in any activity carried on by any person other than a state or local governmental unit or payments in respect of such property; or (ii) on a present value basis, derived from payments (whether or not to Lessee) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any person other than a state or local government unit. No portion of the purchase price for the Equipment will be used, directly or indirectly, to make or finance loans to any person other than Lessee. Lessee has not entered into any management or other service contract with respect to the use and operation of the Equipment. (g) The entering into and performance of this Master Lease Agreement, the Lease, and the Escrow Agreement will not violate any judgment, order, law or regulation applicable to Lessee or result in

City of Arroyo Grande/ Holman Capital Corporation Page 10 9/27/2022 Master Equipment Lease-Purchase Agreement
any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest, or other encumbrance upon any assets of Lessee or on the Equipment pursuant to an indenture, mortgage, deed of trust, bank loan or credit agreement, or other instrument to which Lessee is a party or by which it or its assets may be bound, except as herein provided.
(h) Lessee’s name as indicated on the first page of this Master Lease Agreement is its true, correct, and complete legal name.
(i) The useful life of any Equipment will not be less than the Lease Term of the Payment Schedule applicable to any such Equipment.
(j) Lessee has entered into this Lease, and will enter into each Payment Schedule, for the purpose of purchasing, acquiring, and leasing the Equipment and not for the purpose of refinancing any outstanding obligation of Lessee more than 90 days in advance of its payment or prepayment date. The purchase price for the Equipment has been or will be paid directly by Lessor from the applicable Escrow Fund to the Vendor, and no portion of the purchase price for the Equipment has been or will be paid to Lessee as reimbursement for any expenditure paid by Lessee more than 60 days prior to the execution and delivery hereof.
(k) The application, statements, and credit or financial information submitted by it to Lessor are true and correct and made to induce Lessor to enter into this Master Lease Agreement, any Payment Schedules and any Escrow Agreements.
(l) For so long as this Master Lease Agreement remains in effect, Lessee shall (i) provide Lessor, no later than ten days prior to the end of each Fiscal Year (commencing with the current Fiscal Year), with current budgets or other proof of appropriation for the ensuing Fiscal Year and such other information relating to Lessee’s ability to continue any current Lease Term for the next succeeding Fiscal Year as may be reasonably requested by Lessor and (ii) furnish or cause to be furnished to Lessor, at Lessee’s expense, as soon as available and in any event not later than 180 days after the close of each Fiscal Year, the audited financial statements of Lessee at the close of and for such Fiscal Year, all in reasonable detail, audited by and with the report of Lessee’s auditor.
(m) On each Commencement Date, Lessee shall cause to be executed and delivered to Lessor an Opinion of Lessee’s Counsel for each Payment Schedule in substantially the form attached as Exhibit E hereto.
(n) Lessee shall pay the excess (if any) of the actual costs of acquiring the Equipment hereunder over the amount deposited by Lessor in any Escrow Fund and interest earnings thereon. (o) Lessee has experienced no material change in its financial condition since the date of its last prepared financial statements, which was for the fiscal year ended June 30, 2021. (p) Lessee acknowledges that: (a) Lessor is acting solely for its own account and not as a fiduciary for Lessee or in the capacity of broker, dealer, municipal securities underwriter or municipal advisor; (b) Lessor has not provided, and will not provide, financial, legal, tax, accounting or other advice to or on behalf of Lessee with respect to its acquisition of the Equipment; and (c) Lessee has sought and obtained financial, legal, tax, accounting and other advice (including as it relates to structure, timing, terms and similar matters) with respect to this Lease from its financial, legal and other advisors (and not Lessor) to the extent that Lessee desired to obtain such advice.

22. Execution in Counterparts; Chattel Paper. This Master Lease Agreement and any Payment Schedule may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument; provided, however, that only Counterpart No. 1 of this Master Lease Agreement and of any Payment Schedule shall constitute chattel paper for purposes of the applicable Uniform Commercial Code.

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23. Applicable Law. This Master Lease Agreement and each Payment Schedule shall be governed by and construed under the laws of the State of California.

24. Binding Effect; Severability; Survival. This Master Lease Agreement and each Payment Schedule entered into hereunder shall not become effective until accepted by Lessor at its herein-described office, and upon such acceptance shall inure to and bind the parties, their successors, legal representatives, and assigns. No provision of this Master Lease Agreement that may be construed as unenforceable shall in any way invalidate any other provision hereof, all of which shall remain in full force and effect.

25. Miscellaneous Provisions. Any notice to a party hereunder shall be deemed given when mailed to that party by certified mail, return receipt requested, or by overnight delivery by a nationally recognized overnight courier, at its address set forth herein or such other address as either may designate for itself in such notice to the other. This Master Lease Agreement, any Payment Schedule and any Escrow Agreement constitute the entire mutual understanding of the parties regarding the subject matter hereof and thereof and may not be modified except in writing, signed by the party against whom such modification is asserted. Upon the request of Lessor, Lessee shall at any time and from time to time execute and deliver such further documents and do such further acts as Lessor may reasonably request in order fully to effectuate the purposes hereof and any assignment hereof. If a court with competent jurisdiction rules that the interest rate charged hereunder exceeds the maximum rate of interest allowed by applicable law, then the effective rate of interest hereunder shall be automatically reduced to the maximum lawful rate allowable under the applicable laws.
[Remainder of page intentionally left blank]

City of Arroyo Grande/ Holman Capital Corporation Page 12 9/27/2022 Master Equipment Lease-Purchase Agreement

THE UNDERSIGNED HEREBY AGREE TO ALL OF THE TERMS AND CONDITIONS AS SET FORTH IN THIS EQUIPMENT MASTER LEASE-PURCHASE AGREEMENT.

HOLMAN CAPITAL CORPORATION, Lessor
By:

Name: Lance S. Holman
Title: President & CEO
CITY OF ARROYO GRANDE, Lessee
By:

Name: Whitney McDonald
Title: City Manager
Counterpart No. _____ of two manually executed and serially numbered counterparts. To the extent that this Lease Agreement constitutes chattel paper (as defined in the applicable provisions of the Uniform Commercial Code as enacted in the applicable state), no security or ownership interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1.

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EXHIBIT A
PAYMENT SCHEDULE NO. 1 TO MASTER EQUIPMENT LEASE-PURCHASE AGREEMENT DATED SEPTEMBER 30, 2022

1. DESCRIPTION OF THE EQUIPMENT:

Police Ford Explorers with Dash Cameras, Computers and Upfitting Services purchased pursuant to that certain Agreement from Ford Motor Company and financed by this Payment Schedule No. 1 dated September 30, 2022 to that certain Master Equipment Lease-Purchase Agreement dated September 30, 2022 by and between Holman Capital Corporation and City of Arroyo Grande, including, without limitation, the following together with all accessories, attachments, substitutions and accessions.

2. EQUIPMENT LOCATION: 200 N HALCYON ROAD, ARROYO GRANDE, CA 93420

3. RENTAL PAYMENT SCHEDULE: The rental payments shall be made for the Equipment as follows:
* Assumes that all rental payments and additional rentals due on and prior to that date have been paid.

Rental payments are calculated on the basis of a 360-day year consisting of 12 months of 30 days.

4. INTEREST RATE: 4.57%

5. COMMENCEMENT DATE: SEPTEMBER 30, 2022

6. SCHEDULED LEASE TERM: 4 Years

7. Lessee’s current Fiscal Year extends from July 1, 2022.

8. The terms and provisions of the Master Equipment Lease-Purchase Agreement described above are hereby incorporated into this Payment Schedule by reference and made a part hereof.

9. Lessee hereby consents to the assignment by the Lessor of its rights under this Payment Schedule, which rights are evidenced by the Assignment Agreement entered into concurrently with this Payment Schedule.

10. Lessee hereby represents, warrants, and covenants that (i) its representations, warranties, and covenants set forth in the Master Equipment Lease-Purchase Agreement (particularly Paragraph 21 thereof) are true and correct as though made on the date of execution of this Schedule, and (ii) sufficient Description Quantity Cost % of Total Vendor 2023 Ford Explorers 9 $ 504,300.24 67.59% Mullahey Ford Arroyo Grande Dash Camera System 9 $ 60,355.00 8.09% COBAN Technologies Mobile Data Computers 9 $ 32,088.61 4.30% Code3 Technologies Vehicle Upfitting Services 1 $ 149,358.35 20.02% Dana Safety Supply SubTotal $ 746,102.20 100.00%
Documentation Fee $ 3,000.00
Total Financing $ 749,102.20
PAYMENT NO. DATE PAYMENT

INTEREST

COMPONENT

PRINCIPAL

COMPONENT

CONCLUDING

PAYMENT
0 9/30/2022
1 12/1/2022 $ 201,583.34 $ 5,895.85 $ 195,687.49 $ 570,017.15 2 12/1/2023 $ 201,583.34 $ 25,291.05 $ 176,292.29 $ 388,436.09 3 12/1/2024 $ 201,583.34 $ 17,234.49 $ 184,348.85 $ 198,556.78 4 12/1/2025 $ 201,583.34 $ 8,809.77 $ 192,773.57 $ -
Grand Totals $ 806,333.36 $ 57,231.16 $ 749,102.20 $ -

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funds have been appropriated by Lessee for the payment of all rental payments due under this Payment Schedule during Lessee’s current Fiscal Year.

11. Interest, if any, accruing from the Commencement Date hereof to the actual date of funding shall be retained by Lessor as additional consideration for entering into this Schedule.

12. The following exhibits are incorporated into this Payment Schedule by this reference: Exhibit A-1 – Notice and Acknowledgment of Assignment; Exhibit B-1 – Insurance Coverage Request or, as applicable, Exhibit B-2 – Self-Insurance Rider; Exhibit C – Essential Use Certificate; Exhibit D - Incumbency Certificate; Exhibit E – Opinion of Lessee’s Counsel; Exhibit F – Bank Qualified Certificate; Exhibit G – Post-Issuance Tax Compliance Procedures; Exhibit H – Escrow Agreement; Exhibit I – Resolution of Lessee; Exhibit J – UCC-1 Financing Statement; Exhibit K – Form 8038-G; and Exhibit L – Closing Memorandum.

A-3

CITY OF ARROYO GRANDE HOLMAN CAPITAL CORPORATION
as Lessee as Lessor
By: __________________________________ By:_________________________________ Name: Whitney McDonald
Title: City Manager
Name: Lance S. Holman
Title: President & CEO

Counterpart No. _____ of two manually executed and serially numbered counterparts. To the extent that this Schedule constitutes chattel paper (as defined in the applicable provisions of the Uniform Commercial Code as enacted in the applicable state), no security or ownership interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1.

A-1-1
EXHIBIT A-1

NOTICE AND ACKNOWLEDGEMENT OF SALE OF RENTAL PAYMENTS AND ASSIGNMENT OF PAYMENT SCHEDULE NO. 1 AND ESCROW AGREEMENT Holman Capital Corporation (“Lessor”) and the City of Arroyo Grande (“Lessee”) have entered into a Master Equipment Lease-Purchase Agreement dated September 30, 2022 (the “Master Lease Agreement”) and Payment Schedule No. 1 issued thereunder, under which Lessee has, or will have prior to its execution hereof, leased vehicles and equipment (collectively, the “Equipment”) described in that Payment Schedule.

Lessee is hereby notified that Lessor has assigned its right, title, and interest in and to Payment Schedule No. 1, the leased Equipment, and the rental payments as permitted by Payment Schedule No. 1 in accordance with the Master Lease Agreement.

Lessee is hereby directed to pay any and all rental payments and other amounts due under Payment Schedule No. 1 to Community Bank of Santa Maria and/or its affiliates, as Lessor’s assignee (the “Assignee”), as directed by the Assignee or a paying agent acting on behalf of Assignee, pursuant to the instructions contained in any invoice or notice. Lessee will also direct any and all correspondence, notice and servicing requests to the Assignee at the following address:

Community Bank of Santa Maria
Attn: Loan Servicing Department
PO Box 5307
Santa Maria, CA 93456
By signing this Notice and Acknowledgment, Lessee agrees that it will pay all amounts due under Payment Schedule No. 1 as directed in the invoice without any set-off or deduction whatsoever notwithstanding any defect in, damage to or requisition of any of the Equipment leased under Payment Schedule No. 1, any other similar or dissimilar event, any defense, set-off, counterclaim or recoupment arising out of any claim against Lessor or Assignee.

Lessee further acknowledges and agrees that Assignee has not assumed any of Lessor’s obligations or duties under the Master Lease Agreement or Payment Schedule No. 1, or made any warranties whatsoever as to the Master Lease Agreement, Payment Schedule No. 1 or the Equipment.

Lessee agrees that no change may be made to the Master Lease Agreement or Payment Schedule No. 1 without the prior written consent of Assignee.

By signing this Notice and Acknowledgment, Lessee warrants that its representations and warranties under the Lease Agreement are true and correct on the date hereof.

Date: September 30, 2022
CITY OF ARROYO GRANDE, as Lessee
By: _______________________________________
Name: Whitney McDonald
Title: City Manager

B-1
EXHIBIT B-1

INSURANCE CERTIFICATION
[complete only if Lessee is not self-insured]
Holman Capital Corporation
25231 Paseo de Alicia, Suite 105
Laguna Hills, CA 92653
September 30, 2022
Re: Payment Schedule No. 1 under Master Equipment Lease-Purchase Agreement dated September 30, 2022
In connection with the above-referenced Payment Schedule No. 1 and Master Lease Agreement, City of Arroyo Grande, as lessee (the “Lessee”) certifies that it has instructed the insurance agent named below (please fill in name, address, and telephone number):

Name of Agent: Alliant Insurance Services, Inc.

Address: 2180 Harvard Street Suite 460, Sacramento, CA 95815 Phone: 916-643-2715
to issue:

X
Liability Insurance. Lessee is required to maintain public liability insurance, personal injury and property damage with policy limits of $1,000,000. The policy should be endorsed to name Community Bank of Santa Maria (the assignee of Holman Capital Corporation) as an additional insured.

X
Casualty Insurance. Lessee is required to maintain all risk extended coverage, malicious mischief and vandalism insurance for the Equipment described in the above-referenced Payment Schedule in an amount not less than the greater of $749,102.20 or the full replacement cost of the Equipment. Such insurance shall be endorsed to name Community Bank of Santa Maria as a co-loss payee with respect to such Equipment.

The required insurance should also be endorsed to give Community Bank of Santa Maria at least 30 days’ prior written notice of the effective date of any material alteration or cancellation of coverage, and an endorsement confirming that the interest of Community Bank of Santa Maria shall not be invalidated by any actions, inactions, breach of warranty or conditions or negligence of Lessee.

Proof of insurance coverage will be provided to Community Bank of Santa Maria prior to and/or commensurate with the later of the Commencement Date of Payment Schedule No. 1 or the delivery and acceptance of the Equipment.

Very truly yours,
CITY OF ARROYO GRANDE, as Lessee
By: _______________________________________
Name: Whitney McDonald
Title: City Manager

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EXHIBIT B-2
[complete only if Lessee is self-insured]
Holman Capital Corporation
25231 Paseo de Alicia, Suite 105
Laguna Hills, CA 92653
<DATE>
Re: Payment Schedule No. 1 under Master Equipment Lease-Purchase Agreement dated September 30, 2022
In connection with the above-referenced Payment Schedule No. 1, City of Arroyo Grande as lessee (the “Lessee”) certifies that it participates in an actuarially sound self-insurance program for property damage and public liability risks.

The following is attached (check all that apply):
 Letter from risk manager describing self-insurance program  Other evidence of Lessee’s participation in self-insurance program Very truly yours,
CITY OF ARROYO GRANDE, as Lessee
By: _______________________________________
Name: Whitney McDonald
Title: City Manager

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EXHIBIT C

ESSENTIAL USE CERTIFICATE
Holman Capital Corporation
25231 Paseo de Alicia, Suite 105
Laguna Hills, CA 92653
September 30, 2022
Re: Payment Schedule No. 1 under Master Equipment Lease-Purchase Agreement dated September 30, 2022
I, Whitney McDonald, appointed, or designated representative and City Manager of the City of Arroyo Grande, as lessee (the “Lessee”), am qualified to answer the questions set forth below regarding the Equipment to be acquired by Lessee in connection with the above-referenced Payment Schedule:

1. What is the specific use of the Equipment?
Police patrol vehicles will be used to provide public safety services, including crime prevention and emergency response.

2. What increased capabilities will the Equipment provide? New Police patrol vehicles with Dash Cameras and upgraded computers will increase conviction rates as it collects evidence of value. These vehicles will enhance officer safety when responding to emergency calls and other public safety situations.

3. Why is the Equipment essential to your ability to deliver governmental services? Providing public safety services requires patrol officers to rely on reliable vehicles when responding to emergencies and volatile situations. Upgraded vehicle safety equipment provides additional safety features for responding officers.

4. Does the Equipment replace existing equipment?
(If so, please explain why you are replacing the existing equipment) The new Police patrol vehicles are replacing patrol vehicles that are over 5 years old and have exceeded the mileage limit set for safety standards.

5. Why did you choose this specific Equipment?
The City’s procurement procedures require making purchases from bidders that meet the City’s specifications and offer goods or services for the lowest price.

6. For how many years do you expect to utilize the Equipment? The new Police patrol vehicles with upgraded safety equipment are expected to be in service for four to six years.

Very truly yours,
CITY OF ARROYO GRANDE, as Lessee
By: __________________________________________
Name: Whitney McDonald
Title: City Manager

D-1

EXHIBIT D

INCUMBENCY CERTIFICATE
I, Nicole Valentine, do hereby certify that I am the Director of Administrative Services of the City of Arroyo Grande (“District”), which is a body corporate and politic duly established and validly existing as a political subdivision of the State of California and operates under a Governing Board, and that I have custody of the records of such entity.

I hereby certify that, as of the date hereof, the individuals named below are the duly elected or appointed officers of the District holding the offices set forth opposite their respective names. I further certify that:
(i) The signatures set opposite their respective names and titles are their true and authentic signatures, and
(ii) Such officers have the authority on behalf of such entity to:
a. Enter into that certain Payment Schedule No. 1 under Master Equipment LeasePurchase Agreement dated September 30, 2022 the “Lease Agreement”), between the City of Arroyo Grande and Holman Capital Corporation, as lessor, and that certain Escrow Agreement dated as of September 30, 2022 (the “Escrow Agreement”) between the City of Arroyo Grande, Holman Capital Corporation, and Community Bank of Santa Maria, as escrow agent; and
b. Execute Certificates of Acceptance, Payment Request/Disbursement Request Forms, and any and all other certificate, documents, and agreements relating to the Master Lease Agreement, Payment Schedule No. 1 and Escrow Agreement applicable to that Payment Schedule.

NAME TITLE SIGNATURE
Whitney McDonald City Manager
IN WITNESS WHEREOF, I have duly executed this Certificate on behalf of the City of Arroyo Grande.

September 30, 2022
By: ______________________________________
Name: Nicole Valentine
Title: Director of Administrative Services

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EXHIBIT E
[Print on Counsel Letterhead]
OPINION OF LESSEE’S COUNSEL
September 30, 2022
Holman Capital Corporation
25231 Paseo de Alicia, Suite 105
Laguna Hills, CA 92653
Re: Payment Schedule No. 1 under Master Equipment Lease-Purchase Agreement dated September 30, 2022
Ladies and Gentlemen:

As counsel to the City of Arroyo Grande (the “Lessee”), I have examined the Master Equipment Lease-Purchase Agreement dated September 30, 2022 and Payment Schedule No. 1, both collectively, the “Lease Agreement”), between the Lessee and Holman Capital Corporation, as lessor (“Lessor”), the form of the Escrow Agreement for Payment Schedule No. 1, together with the Disbursement Request Form and Certificate of Acceptance (collectively, the “Escrow Agreement”), and the proceedings taken by the Governing Body of the Lessee to authorize on behalf of the Lessee the execution and delivery of the Master Lease Agreement, Payment Schedule No. 1 and the Escrow Agreement. The Master Lease Agreement, Payment Schedule No. 1 and the Escrow Agreement are herein collectively referred to as the “Transaction Documents.” Based upon the foregoing examination and upon an examination of such other documents and matters of law as I have deemed necessary or appropriate, I am of the opinion that:

1. The Lessee is a political subdivision of the State of California and operates under a Governing Board, and the laws of the State of California with full power and authority to enter into the Transaction Documents.

2. The Transaction Documents have each been duly authorized, executed, and delivered by the Lessee. Assuming due authorization, execution and delivery thereof by Lessor, the Transaction Documents constitute legal, valid, and binding obligations of the Lessee, enforceable against the Lessee in accordance with their respective terms, subject to any applicable bankruptcy, insolvency, moratorium or other laws or equitable principles affecting the enforcement of creditors’ rights generally.

3. The Equipment to be leased pursuant to the Lease Agreement constitutes personal property and, when subjected to use by the Lessee, will not be a fixture under applicable law.

4. The Lessee has complied with any applicable public bidding requirements in connection with the Transaction Documents and the transactions contemplated thereby. By proper action, the Governing Body of the Lessee authorized the execution and delivery of the Transaction Documents and certain other matters, which actions were duly taken at a meeting that was held in compliance with all applicable laws relating to the holding of open and public meetings.

E-2

5. No litigation or proceeding is pending or, to the best of my knowledge, threatened to restrain or enjoin the execution, delivery, or performance by the Lessee of the Transaction Documents or in any way to contest the validity of the Transaction Documents, to contest or question the creation or existence of the Lessee or the Governing Body of the Lessee or the authority or ability of the Lessee to execute or deliver the Transaction Documents or to comply with or perform its obligations thereunder. There is no litigation pending or, to the best of my knowledge, threatened seeking to restrain or enjoin the Lessee from annually appropriating sufficient funds to pay the rental payments or other amounts contemplated by the Master Lease Agreement and Payment Schedule No. 1.

6. The entering into and performance of the Transaction Documents do not and will not violate any judgment, order, law, or regulation applicable to the Lessee or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest, or other encumbrance upon any assets of the Lessee or on the Equipment (as such term is defined in the Lease Agreement) pursuant to any indenture, mortgage, deed of trust, bank loan or credit agreement, or other instrument to which the Lessee is a party or by which it or its assets may be bound. Notwithstanding the foregoing, upon the due and timely filing of a UCC-1 and a Title Application and/or Certificate of Title (the latter solely with respect to Equipment constituting titled vehicles), the Lessor will have a perfected security interest in the Equipment.

This opinion may be relied upon by Lessor and purchasers and assignees of Lessor’s interests in the Lease Agreement.

Respectfully submitted,
______________________________________

F-1

EXHIBIT F

BANK-QUALIFIED DESIGNATION
The City of Arroyo Grande, as lessee, (the “Lessee”) under that certain Master Equipment LeasePurchase Agreement dated September 30, 2022 and Payment Schedule No. 1 issued thereunder (collectively, the “Lease”) to which this Designation is attached, hereby designates the Lease as a “qualified tax-exempt obligation” for the purposes and within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. The Lessee hereby represents that the Lessee is a “qualified small issuer” in that it reasonably anticipates that the Lessee and other entities that the Lessee controls will not issue tax-exempt obligations (including the Lease) the aggregate principal amount of which exceed $10,000,000 during the calendar year in which the Lease is executed and delivered, and interest commences to accrue thereunder; and that the Lease is being entered into and will be used in connection with public purposes.

This Designation is attached to and made a part of the Lease and inures to the benefit of the Lessor and its successors and/or assigned.

EXECUTED as of this September 30, 2022.

CITY OF ARROYO GRANDE, as Lessee
By: ________________________
Name: Whitney McDonald
Title: City Manager

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EXHIBIT G

POST-ISSUANCE TAX COMPLIANCE PROCEDURES
Dated: September 30, 2022
The following certificate is delivered in connection with the execution and delivery of Payment Schedule No. 1 issued under the Master Equipment Lease-Purchase Agreement dated September 30, 2022 (the "Master Lease Agreement"), entered into between the City of Arroyo Grande (the "Lessee") and Holman Capital Corporation (the "Corporation"). Capitalized terms used herein have the meanings defined in the Lease Agreement.

Section 1. In General.

1.1. This Certificate is executed for the purpose of establishing the reasonable expectations of Lessee as to future events regarding the financing of certain equipment (the “Equipment”) to be acquired by Lessor and leased to Lessee pursuant to and in accordance with Payment Schedule No. 1 executed under the Master Lease Agreement (together with all related documents executed pursuant thereto and contemporaneously herewith, the "Financing Documents"). As described in the Financing Documents, Lessor shall apply $749,102.20 (the “Principal Amount”) toward the acquisition of the Equipment and closing costs, and Lessee shall make Rental Payments under the terms and conditions as set forth in the Financing Documents.

1.2. The individual executing this Certificate on behalf of Lessee is an officer of Lessee delegated with the responsibility of reviewing and executing the Financing Documents, pursuant to the governing board’s approval or other official action of Lessee adopted with respect to the Financing Documents, a copy of which has been delivered to Lessor.

1.3. The Financing Documents are being entered into for the purpose of providing funds for financing the cost of acquiring, equipping and installing the Equipment which is essential to the governmental functions of Lessee, which Equipment is described in said Payment Schedule No. 1. The Principal Amount will be deposited in escrow by Lessor on the date of issuance of the Financing Documents and held by Community Bank of Santa Maria, as escrow agent (the "Escrow Agent") pending acquisition of the Equipment under the terms of that certain Escrow Agreement for Payment Schedule No. 1 dated as of September 30, 2022 (the "Escrow Agreement"), by and between Lessor, Lessee and Escrow Agent.

1.4. Lessee will timely file for each Payment Schedule issued under the Master Lease Agreement a Form 8038-G (or, if the invoice price of the Equipment under such schedule is less than $100,000, a Form 8038-GC) relating to such Lease with the Internal Revenue Service in accordance with Section 149(e) of the Internal Revenue Code of 1986, as amended (the “Code”).

1.5. The Lease is designated a “qualified tax-exempt obligation” for the purposes and within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. In that regard, the Lessee is a “qualified small issuer” in that it reasonably anticipates that the Lessee and other entities that the Lessee controls will not issue tax-exempt obligations (including the Lease) the aggregate principal amount of which exceed $10,000,000 during the calendar year in which the Lease is executed and delivered and interest commences to accrue thereunder; and that the Lease is being entered into and will be used in connection with public purposes.

G-2
Section 2. Non-Arbitrage Certifications.

2.1. The Rental Payments due under the Financing Documents will be made with monies retained in Lessee's general operating fund (or an account or subaccount therein). No sinking, debt service, reserve or similar fund or account will be created or maintained for the payment of the Rental Payments due under the Financing Documents or pledged as security therefor.

2.2. There have been and will be issued no obligations by or on behalf of Lessee that would be deemed to be (i) issued or sold within fifteen (15) days before or after the date of issuance of the Financing Documents, (ii) issued or sold pursuant to a common plan of financing with the Financing Documents and (iii) paid out of substantially the same source of funds as, or deemed to have substantially the same claim to be paid out of substantially the same source of funds as, the Financing Documents.

2.3. Lessee does not and will not have on hand any funds that are or will be restricted, segregated, legally required or otherwise intended to be used, directly or indirectly, as a substitute, replacement or separate source of financing for the Equipment.

2.4. No portion of the Principal Amount is being used by Lessee to acquire investments which produce a yield materially higher than the yield realized by Lessor from Rental Payments received under the Financing Documents.

2.5. The Principal Amount does not exceed the amount necessary for the governmental purpose for which the Financing Documents were entered into. Such funds are expected to be needed and fully expended for payment of the costs of acquiring, equipping and installing the Equipment.

2.6. Lessee does not expect to convey, sublease or otherwise dispose of the Equipment, in whole or in part, at a date which is earlier than the final Payment Date under the Financing Documents.

Section 3. Disbursement of Funds; Reimbursement to Lessee.

3.1 It is contemplated that the entire Principal Amount will be used to pay the acquisition cost of Equipment to the vendors or manufacturers thereof or for any financial advisory or closing costs, provided that, if applicable, a portion of the principal amount may be paid to Lessee as reimbursement for acquisition cost payments already made by it so long as the conditions set forth in Section 3.2 below are satisfied.

3.2. Lessee shall not request that it be reimbursed for Equipment acquisition cost payments already made by it unless each of the following conditions have been satisfied:
(a) If applicable, Lessee adopted a resolution or otherwise declared its official intent in accordance with Treasury Regulation § 1.150-2 (a copy of which will be provided to Lessor, if applicable, the “Declaration of Official Intent”), wherein Lessee expressed its intent to be reimbursed from the proceeds of a borrowing for all or a portion of the cost of the Equipment, which expenditure was paid to the Vendor (as defined in the Master Lease Agreement) not earlier than sixty (60) days before Lessee adopted the Declaration of Official Intent;
(b) The reimbursement being requested will be made by a written allocation before the later of eighteen (18) months after the expenditure was paid or eighteen (18) months after the items of Equipment to which such payment relates were placed in service; (c) The entire payment with respect to which reimbursement is being sought is a capital expenditure, being a cost of a type properly chargeable to a capital account under general federal income tax principles; and