Arroyo Grande City Council
November 14, 2023

City of Arroyo Grande, CA
Cost Allocation Plan

i Cost Allocation Plan
Table of Contents
Table of Contents ........................................................................................................................................... i List of Tables ................................................................................................................................................. ii Certification of Cost Allocation Plan ............................................................................................................. 1 Executive Summary ....................................................................................................................................... 2 Introduction .................................................................................................................................................. 5 Approach ....................................................................................................................................................... 6 Methodology ............................................................................................................................................................. 6 Applications ............................................................................................................................................................... 7 OMB Super Circular and 2 CFR Part 200 .................................................................................................................... 7 Central Service Departments ..................................................................................................................................... 8 Distribution Bases ...................................................................................................................................................... 9 Allocable Costs and Distribution Bases ....................................................................................................... 10 Allocable Costs ........................................................................................................................................................ 10 Central Service Allocation Methodology ................................................................................................................. 11 Section 1: Automotive Shop ............................................................................................................................... 11 Section 2: City Attorney ...................................................................................................................................... 11 Section 3: City Clerk ............................................................................................................................................ 12 Section 4: City Council ......................................................................................................................................... 12 Section 5: City Manager ...................................................................................................................................... 13 Section 6: Financial Services ............................................................................................................................... 14 Section 7: Government Buildings ........................................................................................................................ 14 Section 8: Human Resources .............................................................................................................................. 15 Section 9: Management Information Systems .................................................................................................... 16 Section 10: Non-Departmental ........................................................................................................................... 16 Section 11: Printing/Duplicating ......................................................................................................................... 16 Section 12: Public Works Administration ............................................................................................................ 17 Section 13: Retirees ............................................................................................................................................ 17 Section 14: USDA City Hall Loan Fund ................................................................................................................. 18 Iterative Allocation .................................................................................................................................................. 19 Appendix A .................................................................................................................................................. 20 Appendix B .................................................................................................................................................. 27

ii Cost Allocation Plan
List of Tables
Table 1: Allocated Costs to Recipient Departments (OMB Compliant CAP) ................................................. 3 Table 2: Allocated Costs to Recipient Departments (Full CAP) ..................................................................... 4 Table 3: Allocable Cost Summary ................................................................................................................ 10 Table A-1a: Initial Allocation Percentages (OMB Compliant CAP) .............................................................. 21 Table A-1b: Initial Allocation Percentages (OMB Compliant CAP) – continued .......................................... 22 Table A-2a: Final Allocation Percentages (OMB Compliant CAP) ............................................................... 23 Table A-2b: Final Allocation Percentages (OMB Compliant CAP) – continued ........................................... 24 Table A-3a: Final Allocation Amounts (OMB Compliant CAP) .................................................................... 25 Table A-3b: Final Allocation Amounts (OMB Compliant CAP) – continued ................................................ 26 Table B-1a: Final Allocation Amounts (Full CAP)......................................................................................... 28 Table B-1b: Final Allocation Amounts (Full CAP) – continued..................................................................... 29

1 Cost Allocation Plan
Certification of Cost Allocation Plan
This is to certify that I have reviewed the cost allocation plan submitted herewith and to the best of my knowledge and belief:
(1) All costs included in this proposal 3/3/2023 to establish cost allocations or billings for Fiscal Year 2022 – 2023 are allowable in accordance with the requirements of this Part and the Federal award(s) to which they apply. Unallowable costs have been adjusted for in allocating costs as indicated in the cost allocation plan. (2) All costs included in this proposal are properly allocable to Federal awards on the basis of a beneficial or causal relationship between the expenses incurred and the Federal awards to which they are allocated in accordance with applicable requirements. Further, the same costs that have been treated as indirect costs have not been claimed as direct costs. Similar types of costs have been accounted for consistently.

I declare that the foregoing is true and correct.

Governmental Unit: City of Arroyo Grande

Signature: ___________________________________________________________________ Name of Official: ___________________________________________________________________ Title: ___________________________________________________________________ Date of Execution: ___________________________________________________________________

2 Cost Allocation Plan
Executive Summary
This cost allocation plan (“CAP”) summarizes a comprehensive analysis that has been completed for the City of Arroyo Grande, California (the “City”) to determine the appropriate allocation of costs from central service departments to the operating departments. The primary objective is to allocate costs from departments that provide services internally to operating departments that conduct the day-to-day operations necessary to serve the community. The internal service costs typically represent (a) incurred for a common or joint purpose benefiting more than one cost objective, and (b) not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. The term "indirect costs," as used herein, applies to costs of this type originating in the central service departments.

To ensure central service department costs are appropriately allocated to the operating departments, Willdan analyzed the City’s cost code structure to determine which types of costs are allowable versus unallowable in accordance with standard and accepted cost allocation principles. The term “allocable costs” as used herein, applies to costs that are allowable for allocation.

The study is comprised of two separate allocation plans. Table 1 is the summary results of the allocation in compliance with the Office of Management and Budget Super Circular (the OMB Super Circular) and CFR Part 200 (Cost Principles). Table 2 that follows is the summary results of the full plan. The report below includes descriptions of the differences between the two plans, their separate purposes, and specific details of when the plans deviate from each other.

3 Cost Allocation Plan
Table 1: Allocated Costs to Recipient Departments (OMB Compliant CAP) Fiscal Year 2022-23
Direct Cost Base
Operating Department / Division / Fund Total Allocation Modified Total Direct
Cost
Indirect Cost
Rate
$6,456,242 $17,211,784 38%
010: Community Development $722,458 $1,525,663 47%
010: Parks & Recreation $654,424 $1,304,981 50%
010: Police $2,663,697 $5,577,389 48%
010: Public Works $260,056 $374,312 69%
211: PUBLIC ACCESS TELEVISION $8,032 $41,621 19%
216: GRACE LANE ASSESSMENT DISTRICT $1,567 $6,906 23%
217: LANDSCAPE MAINTENANCE DISTRICT $1,415 $2,601 54%
218: LOCAL USE TAX FUND $21,223 $591,981 4%
219: PARKSIDE ASSESSMENT DISTRICT $2,255 $19,169 12%
220: STREETS FUND $301,672 $801,632 38%
225: Transportation Fund $0 $0
226: WATER NEUTRALIZATION IMPACT $6,663 $112,420 6%
240: TOURISM BUSINESS IMPROVEMENT DISTRICT $7,781 $204,527 4% 241: WATER AVAILABILITY $21 $0
260: American Rescue Plan Act (ARPA) $1,409 $31,643 4%
271: STATE COPS BLOCK GRANT FUND $6,306 $0
286: SUCCESSOR AGENCY TO THE FORMER RDA $6,921 $189,797 4% 287: SUCCESSOR AGENCY TO THE RDA'S HOUSING FUND $74 $1,491 5% 350: CAPITAL IMPROVEMENT FUND $70,830 $92,115 77%
612: Sewer Fund $330,747 $998,999 33%
640: Water Fund $587,482 $1,636,578 36%
641: LOPEZ FUND $745,645 $3,693,150 20%
751: DOWNTOWN PARKING $55,565 $4,807 1156%

4 Cost Allocation Plan
Table 2: Allocated Costs to Recipient Departments (Full CAP) Fiscal Year 2022-23
Direct Cost Base
Operating Department / Division / Fund Total Allocation Modified Total Direct
Cost
Indirect Cost
Rate
$6,654,156 $17,211,784 39%
010: Community Development $752,242 $1,525,663 49%
010: Parks & Recreation $670,939 $1,304,981 51%
010: Police $2,737,320 $5,577,389 49%
010: Public Works $269,318 $374,312 72%
211: PUBLIC ACCESS TELEVISION $8,295 $41,621 20%
216: GRACE LANE ASSESSMENT DISTRICT $1,615 $6,906 23%
217: LANDSCAPE MAINTENANCE DISTRICT $1,449 $2,601 56%
218: LOCAL USE TAX FUND $23,201 $591,981 4%
219: PARKSIDE ASSESSMENT DISTRICT $2,348 $19,169 12%
220: STREETS FUND $312,859 $801,632 39%
225: Transportation Fund $0 $0
226: WATER NEUTRALIZATION IMPACT $7,089 $112,420 6%
240: TOURISM BUSINESS IMPROVEMENT DISTRICT $8,472 $204,527 4% 241: WATER AVAILABILITY $22 $0
260: American Rescue Plan Act (ARPA) $1,517 $31,643 5%
271: STATE COPS BLOCK GRANT FUND $6,427 $0
286: SUCCESSOR AGENCY TO THE FORMER RDA $7,557 $189,797 4% 287: SUCCESSOR AGENCY TO THE RDA'S HOUSING FUND $79 $1,491 5% 350: CAPITAL IMPROVEMENT FUND $72,426 $92,115 79%
612: Sewer Fund $341,707 $998,999 34%
640: Water Fund $608,018 $1,636,578 37%
641: LOPEZ FUND $764,624 $3,693,150 21%
751: DOWNTOWN PARKING $56,631 $4,807 1178%

5 Cost Allocation Plan
Introduction
In the early 1970s, the cost allocation plan concept was introduced to many government agencies. The purpose of a typical cost allocation plan is to identify costs related to rendering internal central support services and allocate those costs to operating departments or programs that utilize and benefit from them, in a fair and equitable manner.

Before indirect costs and central support service charges may be claimed for reimbursement by an operating department, there must be some formal means of identifying, accumulating and distributing these types of costs to all benefiting departments. Regardless of whether an agency has a formal comprehensive cost accounting system, the best method of accumulating, identifying, and determining a distribution of indirect costs is a cost allocation plan.

A City is made up of many departments, each with their own specific purposes or functions. Departments whose primary function is to provide support internally to other City departments are called central services.

Examples of central services are City Manager, Human Resources, Financial Services, and City Council.

Within these groups there are numerous functions performed that provides support to the direct cost centers. The direct cost centers, or departments and funds, that require support from Central Services and provide services directly to the community through their day-to-day operations, are called operating departments. Examples of operating departments are Community Development, Police, Public Works, and Parks and Recreation. The Cost Allocation Plan allocates the costs of the central services to the operating departments based on the nature of the functions of each central service, upon which the operating departments depend. This is done to determine the total cost associated with providing direct services. The overall goal of the cost allocation plan process is to allow cities to allocate a portion of the central service costs to the operating departments, thus 1) accounting for “all” costs, direct and indirect, for each operating department, and 2) facilitating the calculation of a fully burdened cost estimate of providing services to the public.

The purpose of this study is to:
 Identify the central support and operating departments in the City;  Identify the functions and services provided by the central departments;  Identify allocable and non-allocable costs associated with the City’s central service departments; and
 Distribute those costs to operating entities in a fair and equitable manner.

6 Cost Allocation Plan
Approach
Methodology
The way in which each Indirect Service provides support to the operating departments is determined in order to perform allocations in a manner consistent with the nature of that Indirect Service. This ensures that the costs can be allocated to each operating department in a fair and equitable way. The Cost Allocation Plan identifies the functions of each central service department, and then determines a methodology to allocate or spread the central service costs in a manner that best represents the nature of those functions.

The mathematical representations of central service functions used to allocate indirect costs are commonly called distribution bases. A distribution basis is a set of data displayed as the level of measure of each department’s participation in a specific activity or City function. This basis is then used to distribute costs that reasonably relate to the activity or City function that the basis represents. Some examples of distribution bases are salary and benefits costs, number of full-time equivalent employees, total revenue, City hall square footage, and number of IT devices. The data sets associated with these distribution bases for each department is collected to facilitate the allocation of indirect costs.

The methodology used for this Cost Allocation Plan is the iterative method, which is one of the most equitable methods for allocating costs from central services to operating departments. While not used as prevalently as simpler allocation methods, it is widely considered to be the most accurate. The iterative method utilizes a recursive application of central service cost distribution to allocate indirect costs. In the first step, the allocable costs of central service departments are identified and distributed to all departments including the central service departments themselves, based on the appropriate allocation bases that were selected to represent the manner in which central services are utilized. This is repeated ad infinitum until all costs have been distributed to the operating departments, and none remain with the central service departments.

As an example, consider the allocation of central service costs associated with Government Buildings. The function of Government Buildings is identified, and the appropriate distribution basis is determined to be total building square footage per department and fund. The allowable costs are then distributed to all City departments and funds based on their proportional share of the total building square footage, including other central services. The costs allocated from central service to central service in the initial allocation are then allocated out using the same distribution methodology. This function is performed as many times as necessary until all costs for Government Buildings have been allocated.

All central service departments are treated equally. That is to say, this method is performed concurrently for the allowable costs in each of the central service departments for each iteration until all costs associated with the central service departments have been allocated to each direct service department. The method is complete when the total amount of allocable costs remaining in the central service departments is equal to zero.

7 Cost Allocation Plan
Applications
Public agencies use cost allocation plans for many purposes such as internal accounting, the justification of user fees, application for reimbursement from federal programs or the determination of administrative effort associated with special districts and/or municipal service activities. In many of these cases, the agency will be required to certify that the costs identified are “reasonable”. Per the Code of Federal Regulations, a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when determining the amount that a public agency should be reimbursed for central service overhead activities associated with a federally funded program. Additionally, public agencies should consider special care to only identify the portion of central service costs that have not been reimbursed through other means (such as grants, user fee revenues, transfers from other departments or internal service funds) to avoid double-counting. These cost reductions are done before the allocation methodologies are used and are detailed within the model itself.

OMB Super Circular and 2 CFR Part 200
This report details the allocations for two separate cost allocation plans. The primary model, presented in text and tables in the below sections and in Appendix A, provides a plan that complies with the Office of Management and Budget Super Circular (the OMB Super Circular) and CFR Part 200 (Cost Principles) that are used to determine central overhead costs incurred while carrying out activities associated with Federal awards, cost reimbursement contracts and some other intergovernmental agreements (as required). The secondary model presented in Appendix B of this report is the full cost allocation plan, which the City should use for standard City operations and budgeting. Unless otherwise indicated, the details of this report and Appendix A contain the OMB compliant allocation plan. The Appendix B tables contain the full cost plan and utilize the same distribution methodology as the OMB Compliant plan. While the overall methodology used for both plans is the same, there are specific guidelines that require additional cost exemptions for OMB Super Circular compliance outside of what was done for the full cost plan. Where such exemptions are done in the methodology has been explained below. Some commonly encountered examples that are usually exempt under OMB Super Circular guidelines are:
 General Advertising
 Bad Debt
 Contingencies
 Litigation
 Debt Service
 Entertainment
 Capital
 Lobbying
 Legislative Body (City Council)
 Promotional Items

8 Cost Allocation Plan
Central Service Departments
Fourteen (14) central service functions were identified for the purposes of this cost allocation plan:
 Automotive Shop
 City Attorney
 City Clerk
 City Council
 City Manager
 Financial Services
 Government Building
 Human Resources
 Management Information Systems
 Non-Departmental
 Printing/Duplicating
 Public Works Administration
 Retirees
 USDA – City Hall

9 Cost Allocation Plan
Distribution Bases
Distribution bases are the allocation factors that may be used to distribute the allocable costs to all departments and funds. As discussed previously, distribution bases are measurable and readily available data that are utilized to represent activities or functions, and which are then used to distribute costs matching that activity or function. Below are the bases that were analyzed in this study and used to allocate Central Services costs to operating departments.
 Total FTEs – The total number of full-time equivalent personnel for all positions for each department and fund.
 Total Purchase Orders – The total number of Purchase Orders processed for each department and fund in a year.
 Total Checks – The total number of Checks processed for each department and fund in a year.  Total Vehicles – The total number of Vehicles for each department and fund in a year maintained by the Automotive Shop.
 Total IT items – The total number of IT items for each department and fund in a year maintained by Management Information Systems.
 City Council Agenda Frequency – City Council agendas spanning a 12-month period were used to determine the number of times each department and fund had matters brought before the City Council.
 Total Building Square Footage – The total building square footage for City maintained spaces for each department and fund.
 Total City Hall Square Footage – The total City Hall square footage for each department and fund.  Modified Total Direct Cost – The total allowable expenditure budgeted for each department and fund for fiscal year 2022-23 which excludes capital, debt, and transfers.  Total Salaries and Benefits – The total salary and benefit expenditures budgeted for each department and fund for the 2022-2023 fiscal year.
 Utility Support – When support functions were identified as provided to utilities, and equal allocation to the utility funds was used.

10 Cost Allocation Plan
Allocable Costs and Distribution Bases
Allocable Costs
Table 3 identifies the allocable cost of each central service department for the OMB compliant allocation plan, with the total allocable costs for this study being $6,456,242. The total expenditures from the central service departments were $10,106,274. However, $3,650,031 of the expenditures identified as unallowable by the 200 CFR Part 200 and have been excluded from allocation. The exclusions were related to City Council, elections, transfers, litigation, and the City’s share of the Five Cities Fire Authority. The remaining amount was distributed to the operating departments and the central services departments by distribution factor(s) that best represents the functions of each central service department and the demand placed on that central service by all City departments, as previously described in the Methodology section of this report. The allocation methodology for each central service is detailed in the following section of this report.

Table 3: Allocable Cost Summary
Allocable Cost Summary - Central Services Fiscal Year 2022-23 Total Cost
Unallocable
Cost Allocable Cost
Summary $ 3,650,031 10,106,274 $ 6,456,242 $
Central Service
010: Automotive Shop 175,956 - 175,956
010: City Attorney 24,814 262,145 237,331
010: City Clerk 321 346,425 346,105
010: City Council 165,460 165,460 -
010: City Manager - 299,468 299,468
010: Financial Services 689,306 - 689,306
010: Government Buildings 192,470 - 192,470
010: Human Resources 161,247 - 161,247
010: Management Information Systems 601,973 - 601,973
010: Non Departmental 6,024,315 3,367,125 2,657,190
010: Printing/Duplicating 18,918 - 18,918
010: Public Works Administration 864,454 - 864,454
010: Retirees 92,311 237,673 145,362
472: USDA - CITY HALL 66,463 - 66,463

11 Cost Allocation Plan
Central Service Allocation Methodology
The first step of the iterative allocation method is to distribute the allocable costs of the central service departments to other central service departments and operating departments based on the distribution methodology and bases that best represent the activity of the central service, and the functions it serves.

The sections below describe each central service and the methodology used to allocate their costs.

Corresponding tables detailing each distribution are attached in the Appendices as tables A-1 through A-3 for the OMB compliant plan and B-1 for the full cost plan.

Section 1: Automotive Shop
The Public Works Department is dedicated to contributing to a safe environment for the City's residents, businesses, schools, and visitors by providing fast and courteous service. Public Works has a wide variety of responsibilities; from routine maintenance of the majority of Arroyo Grande’s above and below ground infrastructure including our drinking water distribution system lines, water meters, sanitary sewer lines and storm water collection systems, streets network, sidewalks and crosswalks, street lights, traffic signs and signals, City parks and Soto Sports Complex; to planting and trimming City trees and maintaining the City’s fleet of vehicles, equipment, facilities, and buildings. The Department is also responsible for delivering capital projects across the City and providing proper storm water management for creeks and basins.

Allocation Method
Based on the assessment of the functions of the Automotive Shop, it is reasonable to distribute the allocable cost by using the method(s) described below.
 One hundred percent (100%) of the allocable cost was allocated based on the total number of vehicles for each department and fund
Section 2: City Attorney
The City Attorney is a professional specializing in the area of Municipal Law. The City Council appoints a city attorney to whom it turns to for legal advice. The City Attorney attends Council meetings to advise on points of the law and to ensure that all proper procedures are maintained. The City Attorney also provides legal advice and represents the City Council, City Manager, City departments and other City boards and commissions on legal matters. The City Attorney is responsible for drafting ordinances, reviewing contracts, and prosecuting municipal code violations.

Allocation Method
Based on the assessment of functions of the City/District Manager - Administration, it is reasonable to distribute the allocable cost by using the method(s) described below. 010: Automotive Shop
Total Vehicles 100%

12 Cost Allocation Plan
 One third (33%) of the allocable cost was allocated based on the amount of modified total direct costs of each department and fund
 One third (33%) of the allocable cost was allocated based on the total FTEs for each department and fund
 One third (33%) of the allocable cost was allocated based on the total agenda items for each department and fund
Section 3: City Clerk
The City Clerk’s Office is dedicated to serving the City Council, City staff, and the citizens of Arroyo Grande by ensuring transparency and access to the legislative process, and by ensuring compliance with applicable State and local laws and regulations relating to municipal elections, open meetings, financial reporting, and access to public records.

Allocation Method
Based on the assessment of the functions of the City Clerk, it is reasonable to distribute the allocable cost by using the method(s) described below.
 One third (33%) of the allocable cost was allocated based on the amount of modified total direct costs of each department and fund
 One third (33%) of the allocable cost was allocated based on the total FTEs for each department and fund
 One third (33%) of the allocable cost was allocated based on the total agenda items for each department and fund
Section 4: City Council
The City Council consists of five members: one mayor and four councilmembers. Beginning with the November 2022 General Municipal Election, residents will elect a council member within their district. The mayor will continue to be elected at-large. All members of the City Council are elected on a nonpartisan basis. Council Members serve four-year overlapping terms. The Mayor is directly elected and serves a two010: City Attorney Total FTE's 33%
Modified Total Direct Cost 33%
Total Agendas 33%
010: City Clerk
Total FTE's 33%
Modified Total Direct Cost 33%
Total Agendas 33%

13 Cost Allocation Plan
year term. The City Council establishes city policies, approves ordinances and resolutions, makes land use decisions, approves agreements and contracts, and hears appeals on decisions made by city staff or advisory committees. The Mayor and City Council members receive a monthly stipend set by resolution.

Allocation Method
Based on the assessment of functions of the City Council, it is reasonable to distribute the allocable cost by using the method(s) described below.
 One third (33%) of the allocable cost was allocated based on the amount of modified total direct costs of each department and fund
 One third (33%) of the allocable cost was allocated based on the total FTEs for each department and fund
 One third (33%) of the allocable cost was allocated based on the total agenda items for each department and fund
 For the OMB plan the costs of City Council are not allocated to ensure OMB compliance Section 5: City Manager
The City Manager serves at the will of the City Council and is responsible for providing policy recommendations, staff support, and to implement their directions and decisions. The City Manager is responsible for overseeing day-to-day operations of the City and appoints professionals to direct departments responsible for a wide variety of services provided to the community. The City Manager is responsible for the overall direction and coordination of the City organization and to provide services and projects in an efficient manner. The City Manager coordinates with community organizations and individuals to ensure the City is responsive to the community’s needs and concerns.

Allocation Method
Based on the assessment of duties of the City Manager, it is reasonable to distribute the allocable cost by using the method(s) described below.
 One third (33%) of the allocable cost was allocated based on the amount of modified total direct costs of each department and fund
 One third (33%) of the allocable cost was allocated based on the total FTEs for each department and fund
 One third (33%) of the allocable cost was allocated based on the total agenda items for each department and fund
010: City Council
Total FTE's 33%
Modified Total Direct Cost 33%
Total Agendas 33%

14 Cost Allocation Plan
Section 6: Financial Services
The Administrative Services Department manages the City's financial and personnel systems by providing accurate and timely actions and information to City Council, operating departments, and the public.

Policies, record keeping and reporting are carried out in compliance with generally accepted accounting principles and all applicable laws and regulations. Areas of responsibility include utility billing, cash receipting, accounts payable, budgeting, business licensing and non-departmental charges that are not directly related to a specific department. The Financial Services Division is responsible for maintaining sound fiscal management for the City.

Allocation Method
Based on the assessment of duties of the Financial Services Division, it is reasonable to distribute the allocable cost by using the method(s) described below.
 Fifteen percent (15%) of the allocable cost was allocated based on the amount of modified total direct costs of each department and fund
 Twenty-five percent (25%) of the allocable cost was allocated based on the total FTEs for each department and fund
 Fifteen percent (15%) of the allocable cost was allocated based on the total number of checks for each department and fund
 Twenty-five percent (25%) of the allocable cost was allocated based on the total number of purchase orders for each department and fund
 Twenty percent (20%) of the allocable cost was allocated based on the utility support directly to each department and fund
Section 7: Government Buildings
The Public Works Department is dedicated to contributing to a safe environment for the City's residents, businesses, schools, and visitors by providing fast and courteous service. Public Works has a wide variety 010: City Manager
Total FTE's 33%
Modified Total Direct Cost 33%
Total Agendas 33%
010: Financial Services
Modified Total Direct Cost 15%
Total FTE's 25%
Total Checks 15%
Total Purchase Orders 25%
Utility Support 20%

15 Cost Allocation Plan
of responsibilities; from routine maintenance of the majority of Arroyo Grande’s above and below ground infrastructure including our drinking water distribution system lines, water meters, sanitary sewer lines and storm water collection systems, streets network, sidewalks and crosswalks, street lights, traffic signs and signals, City parks and Soto Sports Complex; to planting and trimming City trees and maintaining the City’s fleet of vehicles, equipment, facilities, and buildings. The Department is also responsible for delivering capital projects across the City and providing proper storm water management for creeks and basins.

Allocation Method
Based on the assessment of functions of Government Buildings, it is reasonable to distribute the allocable cost by using the method(s) described below.
 One hundred percent (100%) of the allocable cost was allocated based on the total building square footage for each department and fund
Section 8: Human Resources
Human Resources is a Division of the City Manager's Office and provides effective services and vital information to employees, retirees and the public with compassion, dignity, and respect in a fair and equitable manner. It is responsible for carrying out all the activities essential to the effective administration of personnel functions.

Allocation Method
Based on the assessment of the duties of the Human Resources Division, it is reasonable to distribute the allocable cost by using the method(s) described below.
 Fifty percent (50%) of the allocable cost was allocated based on the total FTEs for each department and fund
 Fifty percent (50%) of the allocable cost was allocated based on the total salaries and benefits for each department and fund
010: Government Buildings
Total Building Square Footage 100%
010: Human Resources
Total Salaries and Benefits 50%
Total FTE's 50%

16 Cost Allocation Plan
Section 9: Management Information Systems
The Information Technology Division is dedicated to working collaboratively with City departments and organizations to deliver and support innovative, reliable and secure technology solutions and systems that align with current and future business needs
Allocation Method
Based on the assessment of duties of the Management Information Systems Division, it is reasonable to distribute the allocable cost by using the method(s) described below.  One hundred percent (100%) of the allocable cost was allocated based on the total IT items for each department and fund
Section 10: Non-Departmental
The purpose of the Non-Departmental categorization is to accumulate those costs not easily associated with a particular cost center and to more easily monitor certain expendable cots for savings and control purposes.

Allocation Method
Based on the assessment of functions of Non-Departmental, it is reasonable to distribute the allocable cost by using the method(s) described below.
 Fifty percent (50%) of the allocable cost was allocated based on the amount of modified total direct cost for each department in the General Fund
 Fifty percent (50%) of the allocable cost was allocated based on the total salaries and benefits for each department in the General Fund
Section 11: Printing/Duplicating
The Legislative and Information Services Department consists of the City Clerk and Communication Component. The City Clerk’s Office is dedicated to serving the City Council, City staff, and the citizens of Arroyo Grande by ensuring transparency and access to the legislative process, and by ensuring compliance with applicable State and local laws and regulations relating to municipal elections, open meetings, financial reporting, and access to public records.
010: Management Information Systems
Total IT Items 100%
010: Non Departmental
GF Modified Total Direct Cost 50%
GF Salaries and Benefits 50%

17 Cost Allocation Plan
Allocation Method
Based on the assessment of functions of Printing/Duplicating, it is reasonable to distribute the allocable cost by using the method(s) described below.
 One hundred percent (100%) of the allocable cost was allocated based on the amount of modified total direct cost for each department and fund
Section 12: Public Works Administration
The Public Works Department is dedicated to contributing to a safe environment for the City's residents, businesses, schools, and visitors by providing fast and courteous service. Public Works has a wide variety of responsibilities; from routine maintenance of the majority of Arroyo Grande’s above and below ground infrastructure including our drinking water distribution system lines, water meters, sanitary sewer lines and storm water collection systems, streets network, sidewalks and crosswalks, street lights, traffic signs and signals, City parks and Soto Sports Complex; to planting and trimming City trees and maintaining the City’s fleet of vehicles, equipment, facilities, and buildings. The Department is also responsible for delivering capital projects across the City and providing proper storm water management for creeks and basins.

Allocation Method
Based on the assessment of functions of Public Works Administration, it is reasonable to distribute the allocable cost by using the method(s) described below.
 One hundred percent (100%) of the allocable cost was allocated based on the amount of modified total direct cost for each department and fund that Public Works Administration supports Section 13: Retirees
The Retirees Health program accounts for the City’s obligations to retirees for post-employment benefits other than pensions. The City provides minimal health contributions for retirees that have met certain criteria related to years of service.

Allocation Method
Based on the assessment of functions of Retirees, it is reasonable to distribute the allocable cost by using the method(s) described below.
010: Printing/Duplicating
Modified Total Direct Cost 100%
010: Public Works Administration
PW Admin MTDC 100%

18 Cost Allocation Plan
 One hundred percent (100%) of the allocable cost was allocated based on the amount of modified total direct cost for each department and fund
Section 14: USDA City Hall Loan Fund
Allocation of the USDA City Hall Loan Fund expenditure.

Allocation Method
Based on the assessment of functions of the USDA City Hall Loan Fund, it is reasonable to distribute the allocable cost by using the method(s) described below.
 One hundred percent (100%) of the allocable cost was allocated based on the total City Hall square footage for each department and fund
010: Retirees
Modified Total Direct Cost 100%
472: USDA - CITY HALL
City Hall Square Footage 100%

19 Cost Allocation Plan
Iterative Allocation
The total allocable expenditures of each central service department were allocated to other departments (including both operating departments and other central service departments) based on the individual methodologies outlined above in Sections 1 through 14 of the Allocation Percentages chapter. Any cost allocated from central service to central service is then reallocated out using the same methodology. This operation is done iteratively until all allocable cost is received by the operating departments and funds, and none remain with the central services. After completion of the iterative allocation method, a total combined allocable cost of $6,456,242 was distributed to all departments and funds until the allocable cost remained only in the operating departments and funds, and the amount of allocable costs remaining in central service departments was equal to zero.

The full cost plan follows the same methodology with the exception that all costs that were excluded solely for OMB compliance, but were reasonable for the full plan, were made allowable and included in the allocation. See Table B-1 for additional details for the full cost plan.

After implementing the iterative allocation methodology, all allocable central service costs have been distributed to the operating departments and funds. Table 1 in the Executive Summary of this report summarized the distribution of the total allocable cost of $6,456,242 to each recipient department for the OMB compliant CAP. Table 2 summarized the distribution of the total allocable cost of $6,654,156 to each recipient department for the full cost CAP.

20 Cost Allocation Plan
Appendix A
Appendix A lists the tables detailing the allocation methodology performed in allocating central service costs for the OMB Compliant cost allocation plan.

21 Cost Allocation Plan
Table A-1a: Initial Allocation Percentages (OMB Compliant CAP) First Iteration
Central Service/Operating Departments 010: Automotive Shop 010: City Attorney 010: City Clerk 010: City Council 010: City Manager 010: Financial Services 010: Government Buildings 010: Automotive Shop 0.0% 0.9% 0.9% 0.9% 0.9% 0.9% 0.0%010: City Attorney 0.0% 0.3% 0.3% 0.3% 0.3% 0.2% 0.0%010: City Clerk 0.0% 9.4% 9.4% 9.4% 9.4% 1.4% 0.0%010: City Council 0.0% 0.2% 0.2% 0.2% 0.2% 0.2% 0.0%010: City Manager 0.0% 11.2% 11.2% 11.2% 11.2% 1.1% 0.0%010: Financial Services 0.0% 7.3% 7.3% 7.3% 7.3% 3.8% 0.0%010: Government Buildings 2.6% 0.9% 0.9% 0.9% 0.9% 1.6% 0.0%010: Human Resources 0.0% 0.6% 0.6% 0.6% 0.6% 0.4% 0.0%010: Management Information Systems 0.0% 3.3% 3.3% 3.3% 3.3% 4.3% 0.0%010: Non Departmental 0.0% 6.1% 6.1% 6.1% 6.1% 3.7% 0.0%010: Printing/Duplicating 0.0% 0.0% 0.0% 0.0% 0.0% 0.3% 0.0%010: Public Works Administration 2.6% 3.8% 3.8% 3.8% 3.8% 2.8% 2.9%010: Retirees 0.0% 0.2% 0.2% 0.2% 0.2% 0.2% 0.0%472: USDA - CITY HALL 0.0% 0.1% 0.1% 0.1% 0.1% 0.0% 0.0%010: Community Development 0.0% 9.8% 9.8% 9.8% 9.8% 6.1% 8.4%010: Parks & Recreation 13.0% 4.2% 4.2% 4.2% 4.2% 5.0% 39.8%010: Police 37.7% 20.1% 20.1% 20.1% 20.1% 20.5% 37.1%010: Public Works 5.2% 2.8% 2.8% 2.8% 2.8% 2.4% 2.9%211: PUBLIC ACCESS TELEVISION 0.0% 0.1% 0.1% 0.1% 0.1% 0.6% 0.0%216: GRACE LANE ASSESSMENT DISTRICT 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.0%217: LANDSCAPE MAINTENANCE DISTRICT 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.0%218: LOCAL USE TAX FUND 0.0% 0.8% 0.8% 0.8% 0.8% 0.4% 0.0%219: PARKSIDE ASSESSMENT DISTRICT 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.0%220: STREETS FUND 22.1% 3.4% 3.4% 3.4% 3.4% 3.0% 0.0%225: Transportation Fund 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%226: WATER NEUTRALIZATION IMPACT 0.0% 0.1% 0.1% 0.1% 0.1% 0.3% 0.0%240: TOURISM BUSINESS IMPROVEMENT DISTRICT 0.0% 0.3% 0.3% 0.3% 0.3% 0.2% 0.0%241: WATER AVAILABILITY 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%260: American Rescue Plan Act (ARPA) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%271: STATE COPS BLOCK GRANT FUND 0.0% 0.0% 0.0% 0.0% 0.0% 0.6% 0.0%286: SUCCESSOR AGENCY TO THE FORMER RDA 0.0% 0.2% 0.2% 0.2% 0.2% 0.1% 0.0%287: SUCCESSOR AGENCY TO THE RDA'S HOUSING FUND 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%350: CAPITAL IMPROVEMENT FUND 0.0% 0.1% 0.1% 0.1% 0.1% 6.2% 0.0%612: Sewer Fund 2.6% 3.0% 3.0% 3.0% 3.0% 8.3% 2.9%640: Water Fund 14.3% 5.8% 5.8% 5.8% 5.8% 12.5% 5.9%641: LOPEZ FUND 0.0% 4.7% 4.7% 4.7% 4.7% 7.1% 0.0%751: DOWNTOWN PARKING 0.0% 0.0% 0.0% 0.0% 0.0% 5.0% 0.0% Central Service Departments

22 Cost Allocation Plan
Table A-1b: Initial Allocation Percentages (OMB Compliant CAP) – continued First Iteration
Central Service/Operating Departments 010: Human Resources 010: Management Information Systems 010: Non Departmental 010: Printing/Duplicating 010: Public Works Administration 010: Retirees 472: USDA - CITY HALL 010: Automotive Shop 1.2% 0.4% 1.1% 0.7% 2.2% 0.7% 0.0%010: City Attorney 0.0% 0.0% 0.8% 1.0% 0.0% 1.0% 0.0%010: City Clerk 2.5% 8.7% 2.3% 1.3% 0.0% 1.3% 9.1%010: City Council 0.3% 0.0% 0.8% 0.6% 0.0% 0.6% 0.0%010: City Manager 2.4% 2.4% 2.1% 1.2% 0.0% 1.2% 9.1%010: Financial Services 5.7% 3.9% 4.8% 2.7% 0.0% 2.7% 22.7%010: Government Buildings 1.1% 0.4% 1.0% 0.7% 2.4% 0.7% 0.0%010: Human Resources 1.3% 0.0% 1.2% 0.6% 0.0% 0.6% 4.5%010: Management Information Systems 2.4% 13.4% 3.0% 2.3% 0.0% 2.3% 9.1%010: Non Departmental 6.2% 0.0% 20.6% 18.2% 0.0% 18.2% 0.0%010: Printing/Duplicating 0.0% 0.0% 0.1% 0.1% 0.0% 0.1% 0.0%010: Public Works Administration 5.0% 1.8% 5.2% 3.3% 0.0% 3.3% 0.0%010: Retirees 0.6% 0.0% 1.1% 0.6% 0.0% 0.6% 0.0%472: USDA - CITY HALL 0.0% 0.0% 0.0% 0.3% 0.0% 0.3% 0.0%010: Community Development 10.4% 9.1% 8.9% 5.9% 0.0% 5.9% 45.5%010: Parks & Recreation 7.1% 5.9% 8.1% 5.0% 0.0% 5.0% 0.0%010: Police 37.1% 47.2% 36.7% 21.5% 0.0% 21.5% 0.0%010: Public Works 3.4% 1.6% 2.3% 1.4% 4.8% 1.4% 0.0%211: PUBLIC ACCESS TELEVISION 0.0% 0.0% 0.0% 0.2% 0.0% 0.2% 0.0%216: GRACE LANE ASSESSMENT DISTRICT 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%217: LANDSCAPE MAINTENANCE DISTRICT 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%218: LOCAL USE TAX FUND 0.0% 0.0% 0.0% 2.3% 0.0% 2.3% 0.0%219: PARKSIDE ASSESSMENT DISTRICT 0.0% 0.0% 0.0% 0.1% 0.0% 0.1% 0.0%220: STREETS FUND 4.3% 1.6% 0.0% 3.1% 10.2% 3.1% 0.0%225: Transportation Fund 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%226: WATER NEUTRALIZATION IMPACT 0.0% 0.0% 0.0% 0.4% 0.0% 0.4% 0.0%240: TOURISM BUSINESS IMPROVEMENT DISTRICT 0.0% 0.0% 0.0% 0.8% 0.0% 0.8% 0.0%241: WATER AVAILABILITY 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%260: American Rescue Plan Act (ARPA) 0.1% 0.0% 0.0% 0.1% 0.0% 0.1% 0.0%271: STATE COPS BLOCK GRANT FUND 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%286: SUCCESSOR AGENCY TO THE FORMER RDA 0.0% 0.0% 0.0% 0.7% 0.0% 0.7% 0.0%287: SUCCESSOR AGENCY TO THE RDA'S HOUSING FUND 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%350: CAPITAL IMPROVEMENT FUND 0.0% 0.0% 0.0% 0.4% 0.0% 0.4% 0.0%612: Sewer Fund 2.7% 1.1% 0.0% 3.9% 12.7% 3.9% 0.0%640: Water Fund 6.3% 2.5% 0.0% 6.3% 20.8% 6.3% 0.0%641: LOPEZ FUND 0.0% 0.0% 0.0% 14.2% 46.9% 14.2% 0.0%751: DOWNTOWN PARKING 0.0% 0.0% 0.0% 0.0% 0.1% 0.0% 0.0% Central Service Departments

23 Cost Allocation Plan
Table A-2a: Final Allocation Percentages (OMB Compliant CAP) Central Service/Operating Departments 010: Automotive Shop 010: City Attorney 010: City Clerk 010: City Council 010: City Manager 010: Financial Services 010: Government Buildings 010: Automotive Shop 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: City Attorney 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: City Clerk 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: City Council 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: City Manager 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Financial Services 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Government Buildings 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Human Resources 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Management Information Systems 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Non Departmental 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Printing/Duplicating 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Public Works Administration 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Retirees 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%472: USDA - CITY HALL 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Community Development 0.2% 15.1% 15.1% 15.1% 15.1% 8.2% 8.4%010: Parks & Recreation 14.1% 8.2% 8.2% 8.2% 8.2% 7.2% 39.8%010: Police 38.7% 36.5% 36.5% 36.5% 36.5% 28.8% 37.1%010: Public Works 5.4% 4.7% 4.7% 4.7% 4.7% 3.2% 3.1%211: PUBLIC ACCESS TELEVISION 0.0% 0.1% 0.1% 0.1% 0.1% 0.7% 0.0%216: GRACE LANE ASSESSMENT DISTRICT 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.0%217: LANDSCAPE MAINTENANCE DISTRICT 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.0%218: LOCAL USE TAX FUND 0.0% 1.0% 1.0% 1.0% 1.0% 0.4% 0.0%219: PARKSIDE ASSESSMENT DISTRICT 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.0%220: STREETS FUND 22.4% 5.8% 5.8% 5.8% 5.8% 4.1% 0.3%225: Transportation Fund 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%226: WATER NEUTRALIZATION IMPACT 0.0% 0.2% 0.2% 0.2% 0.2% 0.3% 0.0%240: TOURISM BUSINESS IMPROVEMENT DISTRICT 0.0% 0.4% 0.4% 0.4% 0.4% 0.2% 0.0%241: WATER AVAILABILITY 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%260: American Rescue Plan Act (ARPA) 0.0% 0.1% 0.1% 0.1% 0.1% 0.0% 0.0%271: STATE COPS BLOCK GRANT FUND 0.0% 0.1% 0.1% 0.1% 0.1% 0.6% 0.0%286: SUCCESSOR AGENCY TO THE FORMER RDA 0.0% 0.3% 0.3% 0.3% 0.3% 0.2% 0.0% 287: SUCCESSOR AGENCY TO THE RDA'S HOUSING FUND 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 350: CAPITAL IMPROVEMENT FUND 0.0% 0.8% 0.8% 0.8% 0.8% 6.6% 0.0% 612: Sewer Fund 3.0% 5.7% 5.7% 5.7% 5.7% 9.5% 3.3%640: Water Fund 15.0% 10.6% 10.6% 10.6% 10.6% 14.7% 6.5%641: LOPEZ FUND 1.3% 9.8% 9.8% 9.8% 9.8% 9.6% 1.4%751: DOWNTOWN PARKING 0.0% 0.5% 0.5% 0.5% 0.5% 5.3% 0.0% Central Service Departments

24 Cost Allocation Plan
Table A-2b: Final Allocation Percentages (OMB Compliant CAP) – continued Central Service/Operating Departments 010: Human Resources 010: Management Information Systems 010: Non Departmental 010: Printing/Duplicating 010: Public Works Administration 010: Retirees 472: USDA - CITY HALL 010: Automotive Shop 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: City Attorney 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: City Clerk 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: City Council 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: City Manager 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Financial Services 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Government Buildings 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Human Resources 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Management Information Systems 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Non Departmental 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Printing/Duplicating 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Public Works Administration 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Retirees 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%472: USDA - CITY HALL 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%010: Community Development 13.2% 12.8% 13.7% 9.9% 0.2% 9.9% 51.8%010: Parks & Recreation 9.7% 8.5% 12.6% 8.6% 1.3% 8.6% 4.3%010: Police 47.2% 60.9% 55.4% 36.5% 1.8% 36.5% 20.9%010: Public Works 4.5% 2.7% 4.1% 2.8% 4.9% 2.8% 2.0%211: PUBLIC ACCESS TELEVISION 0.1% 0.0% 0.1% 0.2% 0.0% 0.2% 0.2%216: GRACE LANE ASSESSMENT DISTRICT 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%217: LANDSCAPE MAINTENANCE DISTRICT 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%218: LOCAL USE TAX FUND 0.1% 0.2% 0.1% 2.4% 0.0% 2.4% 0.3%219: PARKSIDE ASSESSMENT DISTRICT 0.0% 0.0% 0.0% 0.1% 0.0% 0.1% 0.0%220: STREETS FUND 6.0% 3.1% 2.0% 4.5% 10.7% 4.5% 2.5%225: Transportation Fund 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%226: WATER NEUTRALIZATION IMPACT 0.0% 0.0% 0.0% 0.5% 0.0% 0.5% 0.1%240: TOURISM BUSINESS IMPROVEMENT DISTRICT 0.0% 0.1% 0.1% 0.8% 0.0% 0.8% 0.1%241: WATER AVAILABILITY 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%260: American Rescue Plan Act (ARPA) 0.1% 0.0% 0.0% 0.1% 0.0% 0.1% 0.0%271: STATE COPS BLOCK GRANT FUND 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.2%286: SUCCESSOR AGENCY TO THE FORMER RDA 0.0% 0.0% 0.0% 0.8% 0.0% 0.8% 0.1% 287: SUCCESSOR AGENCY TO THE RDA'S HOUSING FUND 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 350: CAPITAL IMPROVEMENT FUND 0.5% 0.4% 0.5% 0.7% 0.0% 0.7% 1.7% 612: Sewer Fund 4.5% 2.8% 2.2% 5.3% 12.8% 5.3% 3.6%640: Water Fund 9.6% 5.4% 3.9% 9.0% 21.3% 9.0% 6.2%641: LOPEZ FUND 3.9% 2.7% 4.8% 17.6% 46.9% 17.6% 4.4%751: DOWNTOWN PARKING 0.4% 0.3% 0.4% 0.3% 0.1% 0.3% 1.3% Central Service Departments

25 Cost Allocation Plan
Table A-3a: Final Allocation Amounts (OMB Compliant CAP) Department Classification Department 010: Automotive Shop 010: City Attorney 010: City Clerk 010: City Council 010: City Manager 010: Financial Services 010: Government Buildings 175,956 237,331 346,105 0 299,468 689,306 192,470
Central Service 010: Automotive Shop - - - - - - -
Central Service 010: City Attorney - - - - - - -
Central Service 010: City Clerk - - - - - - -
Central Service 010: City Council - - - - - - -
Central Service 010: City Manager - - - - - - -
Central Service 010: Financial Services - - - - - - -
Central Service 010: Government Buildings - - - - - - - Central Service 010: Human Resources - - - - - - -
Central Service 010: Management Information Systems - - - - - - - Central Service 010: Non Departmental - - - - - - -
Central Service 010: Printing/Duplicating - - - - - - - Central Service 010: Public Works Administration - - - - - - - Central Service 010: Retirees - - - - - - -
Central Service 472: USDA - CITY HALL - - - - - - -
Operating Department 010: Community Development 35,835 394 52,259 - 45,217 56,621 16,205 Operating Department 010: Parks & Recreation 19,413 24,730 28,310 - 24,496 49,872 76,640 Operating Department 010: Police 86,631 68,047 126,336 - 109,313 198,571 71,472 Operating Department 010: Public Works 11,160 9,508 16,275 - 14,082 22,055 5,950 Operating Department 211: PUBLIC ACCESS TELEVISION 323 - 472 - 408 4,544 - Operating Department 216: GRACE LANE ASSESSMENT DISTRICT - 59 86 - 75 909 - Operating Department 217: LANDSCAPE MAINTENANCE DISTRICT - 41 60 - 52 888 - Operating Department 218: LOCAL USE TAX FUND 2,449 - 3,572 - 3,091 3,048 - Operating Department 219: PARKSIDE ASSESSMENT DISTRICT 116 - 168 - 146 1,136 - Operating Department 220: STREETS FUND 13,751 39,350 20,053 - 17,351 28,555 606 Operating Department 225: Transportation Fund - - - - - - - Operating Department 226: WATER NEUTRALIZATION IMPACT 526 - 767 - 664 2,322 - Operating Department 240: TOURISM BUSINESS IMPROVEMENT DISTRICT - 857 1,249 - 1,081 1,350 - Operating Department 241: WATER AVAILABILITY 0 - 1 - 1 14 - Operating Department 260: American Rescue Plan Act (ARPA) 134 - 195 - 169 157 - Operating Department 271: STATE COPS BLOCK GRANT FUND 146 - 213 - 184 4,176 - Operating Department 286: SUCCESSOR AGENCY TO THE FORMER RDA - 788 1,149 - 994 1,055 - Operating Department 287: SUCCESSOR AGENCY TO THE RDA'S HOUSING FUND - 7 10 - 8 21 - Operating Department 350: CAPITAL IMPROVEMENT FUND 1,942 - 2,832 - 2,450 45,185 - Operating Department 612: Sewer Fund 13,450 5,309 19,614 - 16,971 65,297 6,397 Operating Department 640: Water Fund 25,221 26,406 36,780 - 31,824 101,458 12,535 Operating Department 641: LOPEZ FUND 23,191 2,209 33,821 - 29,263 65,838 2,661 Operating Department 751: DOWNTOWN PARKING 1,292 3 1,884 - 1,630 36,234 3 Central Service Departments

26 Cost Allocation Plan
Table A-3b: Final Allocation Amounts (OMB Compliant CAP) – continued Department Classification Department 010: Human Resources 010: Management Information Systems 010: Non Departmental 010: Printing/Duplicating 010: Public Works Administration 010: Retirees 472: USDA - CITY HALL Total Allocation 161,247 601,973 2,657,190 18,918 864,454 145,362 66,463 6,456,242 Central Service 010: Automotive Shop - - - - - - - -
Central Service 010: City Attorney - - - - - - - -
Central Service 010: City Clerk - - - - - - - -
Central Service 010: City Council - - - - - - - -
Central Service 010: City Manager - - - - - - - -
Central Service 010: Financial Services - - - - - - - - Central Service 010: Government Buildings - - - - - - - - Central Service 010: Human Resources - - - - - - - -
Central Service 010: Management Information Systems - - - - - - - - Central Service 010: Non Departmental - - - - - - - -
Central Service 010: Printing/Duplicating - - - - - - - - Central Service 010: Public Works Administration - - - - - - - - Central Service 010: Retirees - - - - - - - -
Central Service 472: USDA - CITY HALL - - - - - - - -
Operating Department 010: Community Development 77,046 21,251 365,135 1,868 1,822 14,357 34,447 722,458 Operating Department 010: Parks & Recreation 51,136 15,702 335,944 1,632 11,123 12,537 2,889 654,424 Operating Department 010: Police 366,790 76,173 1,471,280 6,898 15,310 53,006 13,871 2,663,697 Operating Department 010: Public Works 16,308 7,277 108,707 531 42,770 4,081 1,352 260,056 Operating Department 211: PUBLIC ACCESS TELEVISION 285 82 1,473 37 - 286 120 8,032 Operating Department 216: GRACE LANE ASSESSMENT DISTRICT 16 55 288 6 - 49 24 1,567 Operating Department 217: LANDSCAPE MAINTENANCE DISTRICT 15 49 260 3 - 24 22 1,415 Operating Department 218: LOCAL USE TAX FUND 912 171 3,859 451 - 3,467 204 21,223 Operating Department 219: PARKSIDE ASSESSMENT DISTRICT 22 82 413 16 - 122 32 2,255 Operating Department 220: STREETS FUND 18,563 9,608 52,474 843 92,349 6,478 1,692 301,672 Operating Department 225: Transportation Fund - - - - - - - - Operating Department 226: WATER NEUTRALIZATION IMPACT 61 262 1,217 88 - 676 81 6,663 Operating Department 240: TOURISM BUSINESS IMPROVEMENT DISTRICT 64 330 1,416 156 - 1,201 78 7,781 Operating Department 241: WATER AVAILABILITY 1 0 4 0 - 0 0 21 Operating Department 260: American Rescue Plan Act (ARPA) 219 49 259 24 - 187 15 1,409 Operating Department 271: STATE COPS BLOCK GRANT FUND 68 213 1,159 5 - 41 102 6,306 Operating Department 286: SUCCESSOR AGENCY TO THE FORMER RDA 56 296 1,259 145 - 1,112 67 6,921 Operating Department 287: SUCCESSOR AGENCY TO THE RDA'S HOUSING FUND 1 3 13 1 - 9 1 74 Operating Department 350: CAPITAL IMPROVEMENT FUND 2,420 756 13,013 127 - 979 1,127 70,830 Operating Department 612: Sewer Fund 16,555 7,307 57,742 1,011 110,906 7,769 2,419 330,747 Operating Department 640: Water Fund 32,702 15,436 102,409 1,696 183,857 13,032 4,125 587,482 Operating Department 641: LOPEZ FUND 16,054 6,364 128,665 3,326 405,789 25,559 2,904 745,645 Operating Department 751: DOWNTOWN PARKING 1,863 597 10,202 51 528 389 890 55,565 Central Service Departments

27 Cost Allocation Plan
Appendix B
Appendix B provides the table detailing the allocation performed in allocating central service costs for the full cost allocation plan. The methodology for the full plan is the same as for the OMB compliant plan, as it is the most reasonable and represents how indirect support is provided in the City. The difference between the two plans, as has been described in this report, is in the costs that can be allocated.

28 Cost Allocation Plan
Table B-1a: Final Allocation Amounts (Full CAP)
Department Classification Department 010: Automotive Shop 010: City Attorney 010: City Clerk 010: City Council 010: City Manager 010: Financial Services 010: Government Buildings 175,956 262,145 346,425 165,460 299,468 689,306 192,470 Central Service 010: Automotive Shop - - - - - - -
Central Service 010: City Attorney - - - - - - -
Central Service 010: City Clerk - - - - - - -
Central Service 010: City Council - - - - - - -
Central Service 010: City Manager - - - - - - -
Central Service 010: Financial Services - - - - - - -
Central Service 010: Government Buildings - - - - - - - Central Service 010: Human Resources - - - - - - -
Central Service 010: Management Information Systems - - - - - - - Central Service 010: Non Departmental - - - - - - -
Central Service 010: Printing/Duplicating - - - - - - - Central Service 010: Public Works Administration - - - - - - - Central Service 010: Retirees - - - - - - -
Central Service 472: USDA - CITY HALL - - - - - - -
Operating Department 010: Community Development 39,582 394 52,307 24,983 45,217 56,621 16,205 Operating Department 010: Parks & Recreation 21,443 24,730 28,337 13,534 24,496 49,872 76,640 Operating Department 010: Police 95,689 68,047 126,453 60,397 109,313 198,571 71,472 Operating Department 010: Public Works 12,327 9,508 16,290 7,781 14,082 22,055 5,950 Operating Department 211: PUBLIC ACCESS TELEVISION 357 - 472 225 408 4,544 - Operating Department 216: GRACE LANE ASSESSMENT DISTRICT - 65 86 41 75 909 - Operating Department 217: LANDSCAPE MAINTENANCE DISTRICT - 46 60 29 52 888 -Operating Department 218: LOCAL USE TAX FUND 2,705 - 3,575 1,708 3,091 3,048 - Operating Department 219: PARKSIDE ASSESSMENT DISTRICT 128 - 169 81 146 1,136 - Operating Department 220: STREETS FUND 15,188 39,350 20,071 9,587 17,351 28,555 606 Operating Department 225: Transportation Fund - - - - - - - Operating Department 226: WATER NEUTRALIZATION IMPACT 581 - 768 367 664 2,322 - Operating Department 240: TOURISM BUSINESS IMPROVEMENT DISTRICT - 946 1,250 597 1,081 1,350 - Operating Department 241: WATER AVAILABILITY 1 - 1 0 1 14 - Operating Department 260: American Rescue Plan Act (ARPA) 148 - 195 93 169 157 - Operating Department 271: STATE COPS BLOCK GRANT FUND 161 - 213 102 184 4,176 - Operating Department 286: SUCCESSOR AGENCY TO THE FORMER RDA - 870 1,150 549 994 1,055 - Operating Department 287: SUCCESSOR AGENCY TO THE RDA'S HOUSING FUND - 7 10 5 8 21 - Operating Department 350: CAPITAL IMPROVEMENT FUND 2,145 - 2,834 1,354 2,450 45,185 - Operating Department 612: Sewer Fund 14,856 5,309 19,632 9,377 16,971 65,297 6,397 Operating Department 640: Water Fund 27,858 26,406 36,814 17,583 31,824 101,458 12,535 Operating Department 641: LOPEZ FUND 25,616 2,209 33,852 16,168 29,263 65,838 2,661 Operating Department 751: DOWNTOWN PARKING 1,427 3 1,886 901 1,630 36,234 3 Central Service Departments

29 Cost Allocation Plan
Table B-1b: Final Allocation Amounts (Full CAP) – continued Department Classification Department 010: Human Resources 010: Management Information Systems 010: Non Departmental 010: Printing/Duplicating 010: Public Works Administration 010: Retirees 472: USDA - CITY HALL Total Allocation 161,247 601,973 2,664,509 18,918 864,454 145,362 66,463 6,654,156 Central Service 010: Automotive Shop - - - - - - - -
Central Service 010: City Attorney - - - - - - - -
Central Service 010: City Clerk - - - - - - - -
Central Service 010: City Council - - - - - - - -
Central Service 010: City Manager - - - - - - - -
Central Service 010: Financial Services - - - - - - - - Central Service 010: Government Buildings - - - - - - - - Central Service 010: Human Resources - - - - - - - -
Central Service 010: Management Information Systems - - - - - - - - Central Service 010: Non Departmental - - - - - - - -
Central Service 010: Printing/Duplicating - - - - - - - - Central Service 010: Public Works Administration - - - - - - - - Central Service 010: Retirees - - - - - - - -
Central Service 472: USDA - CITY HALL - - - - - - - -
Operating Department 010: Community Development 77,046 21,251 366,141 1,868 1,822 14,357 34,447 752,242 Operating Department 010: Parks & Recreation 51,136 15,702 336,869 1,632 11,123 12,537 2,889 670,939 Operating Department 010: Police 366,790 76,173 1,475,333 6,898 15,310 53,006 13,871 2,737,320 Operating Department 010: Public Works 16,308 7,277 109,007 531 42,770 4,081 1,352 269,318 Operating Department 211: PUBLIC ACCESS TELEVISION 285 82 1,477 37 - 286 120 8,295 Operating Department 216: GRACE LANE ASSESSMENT DISTRICT 16 55 288 6 - 49 24 1,615 Operating Department 217: LANDSCAPE MAINTENANCE DISTRICT 15 49 261 3 - 24 22 1,449 Operating Department 218: LOCAL USE TAX FUND 912 171 3,869 451 - 3,467 204 23,201 Operating Department 219: PARKSIDE ASSESSMENT DISTRICT 22 82 414 16 - 122 32 2,348 Operating Department 220: STREETS FUND 18,563 9,608 52,619 843 92,349 6,478 1,692 312,859 Operating Department 225: Transportation Fund - - - - - - - - Operating Department 226: WATER NEUTRALIZATION IMPACT 61 262 1,220 88 - 676 81 7,089 Operating Department 240: TOURISM BUSINESS IMPROVEMENT DISTRICT 64 330 1,419 156 - 1,201 78 8,472 Operating Department 241: WATER AVAILABILITY 1 0 4 0 - 0 0 22 Operating Department 260: American Rescue Plan Act (ARPA) 219 49 260 24 - 187 15 1,517 Operating Department 271: STATE COPS BLOCK GRANT FUND 68 213 1,162 5 - 41 102 6,427 Operating Department 286: SUCCESSOR AGENCY TO THE FORMER RDA 56 296 1,262 145 - 1,112 67 7,557 Operating Department 287: SUCCESSOR AGENCY TO THE RDA'S HOUSING FUND 1 3 14 1 - 9 1 79 Operating Department 350: CAPITAL IMPROVEMENT FUND 2,420 756 13,048 127 - 979 1,127 72,426 Operating Department 612: Sewer Fund 16,555 7,307 57,901 1,011 110,906 7,769 2,419 341,707 Operating Department 640: Water Fund 32,702 15,436 102,691 1,696 183,857 13,032 4,125 608,018 Operating Department 641: LOPEZ FUND 16,054 6,364 129,019 3,326 405,789 25,559 2,904 764,624 Operating Department 751: DOWNTOWN PARKING 1,863 597 10,230 51 528 389 890 56,631 Central Service Departments

27368 Via Industria, Suite 200
Temecula, California 92590-4856
800.755.6864 | Fax: 888.326.6864
951.587.3500 | Fax: 951.587.3510
www.willdan.com
27368 Via Industria, Suite 200
Temecula, CA 92590
800.755.6864 | Fax: 888.326.6864
951.587.3500 | Fax: 951.587.3510
www.willdan.com Page 197 of 213
Item 10.b.

MEMORANDUM
TO: City Council
FROM: Brian Pedrotti, Community Development Director
BY: Andrew Perez, Planning Manager
SUBJECT: Public Hearing to Consider Introduction of an Ordinance Amending Title 16 of the Arroyo Grande Municipal Code Regarding Restrictions on Irrigated Turf and Finding This Action Exempt from The California Environmental Quality Act
DATE: November 14, 2023
SUMMARY OF ACTION:

Introduction and public hearing for a proposed ordinance amending Title 16 of the Arroyo Grande Municipal Code (“AGMC”) to restrict the installation and maintenance of irrigated turf citywide. Introducing the ordinance will allow for adoption at a future City Council meeting following this noticed public hearing.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

No financial impact is projected.

RECOMMENDATION:
1) Introduce an Ordinance amending Section 16.84 of the Arroyo Grande Municipal Code regarding installation and maintenance of irrigated turf; and 2) Determine that the ordinance amendments are exempt under the California Environmental Quality Act as set forth in the proposed Ordinance, pursuant to State Guidelines Sections 15060(c)(2),(3), 15378, and in the alternative, State CEQA Guidelines Section 15061(b)(3).

BACKGROUND:

In 2006, the State Legislature adopted the "Water Conservation in Landscaping Act" (Assembly Bill 1881), requiring the Department of Water Resources (DWR) to update the State Model Water Efficient Landscape Ordinance (MWELO). The updated model Ordinance contained several new landscape and irrigation design requirements aimed at reducing water consumption and waste in landscape irrigation. All local land use agencies were required to adopt the model Ordinance or develop an ordinance that is at least as effective.

Item 10.b.

City Council
Public Hearing to Consider Introduction of an Ordinance Amending Title 16 of the Arroyo Grande Municipal Code Regarding Restrictions on Irrigated Turf and Finding This Action Exempt from The California Environmental Quality Act November 14, 2023

The State’s MWELO acknowledges that there is a limited water supply, and conservation and efficient use of water is critical to economic prosperity. Water efficient landscape design, installation, maintenance, and management is an important part of the water conservation strategy. The MWELO furthers water conservation by promoting the use drought tolerant landscaping over water intensive species and provisions for efficient use of water for the purposes of landscaping.

In 2016, AGMC Chapter 16.84 was updated to incorporate the changes to the State’s MWELO, by reference. The implementation of MWELO represents the City’s only standards with regards to efficient use of water for landscaping.

City Council Study Session
On June 27, 2023, a study session was held with City Council to discuss potential revisions to City’s existing ordinance. Staff presented several potential revisions for Council to consider and discuss. The public was also provided an opportunity to provide feedback on the potential revisions on that date. At the conclusion of the study session, Council directed staff to proceed with a number of ordinance revisions proposed by staff, including:
 Prohibition of irrigated turf for new non-residential projects;  Removal of turf when a non-residential property is significantly remodeled;  Prohibition of irrigated turf in the front yards of new residential projects; and  Limitations on the amount of turf on residential properties The revisions were incorporated into the ordinance amendment and forwarded to the Planning Commission for a recommendation hearing.

Planning Commission
Planning Commission considered the proposed ordinance at its meeting on October 17, 2023. The Commission was supportive of the amendments as proposed and recommended the revised ordinance to the City Council following a public hearing. Minor changes have been made to the Planning Commission’s recommended ordinance to capture the decision-makers’ intent and consistency with City Council direction.

ANALYSIS OF ISSUES:

Proposed Ordinance Amendments
MWELO already prohibits the use of irrigated turf for non-residential projects that are subject to the Prescriptive standards, which apply to projects that propose between 500 and 2,500 square feet of irrigated landscape. The proposed ordinance prevents irrigated turf installation at all non-residential development and mixed-use parcels, regardless of the size or other applicable standards. This would prevent the installation of any irrigated turf on the property on which the non-residential use is located. The ordinance amendment also requires removal of all existing irrigated turf when more than 50% of the

Item 10.b.

City Council
Public Hearing to Consider Introduction of an Ordinance Amending Title 16 of the Arroyo Grande Municipal Code Regarding Restrictions on Irrigated Turf and Finding This Action Exempt from The California Environmental Quality Act November 14, 2023

floor area of a property consisting of all non-residential uses is remodeled, as defined by the California Building Code. Staff considered an amendment that would require turf removal in an area proportional to the amount of floor area proposed to be remodeled but determined that tracking and enforcement of this provision would be overly burdensome for staff. Fortunately, nearly all of the City’s shopping centers are already devoid of turf making a potential provision unnecessary.

Residential properties would also be subject to turf restrictions in the proposed ordinance.

While most single-family residential projects are already limited to installing only 25% of their landscape area with irrigated turf due to the restrictions contained in MWELO, additional restrictions to front yard irrigated turf installations are included in the ordinance amendments. Front yard irrigated turf can tend to be nonfunctional and exist for aesthetic purposes rather than for active recreational use by the residents. The state defines nonfunctional irrigated turf as grass that “is solely ornamental and not regularly used for recreation”. It includes areas not in active use but still requiring maintenance, such as street medians and office parking lots.” The ordinance amendment prohibits front yard irrigated turf for new construction to increase water conservation efforts.

Irrigated turf installations would also be limited to 25% of the backyard area as proposed.

The amendments are intended to allow small amounts of irrigated turf for recreational/pet purposes while still reducing the overall amount of irrigated turf that requires irrigation on residential properties. The ordinance also proposes to limit the amount of turf to 500 square feet in situations where this may be less than 25% of the backyard area. The lesser of the two provisions, either 25% of the rear yard area or 500 square feet would be the maximum amount of turf that can be installed on a residential property. Limitations to irrigated turf will not affect sports fields or irrigated turf at parks regularly used for human recreational purposes or for civic or community events.

Next Steps
Introduction of the Ordinance and holding the public hearing is the first step in amending the City’s irrigated turf standards consistent with the standards described above and Council’s past direction. Following the introduction of the Ordinance and the public hearing, adoption of the Ordinance could be scheduled to occur at the November 28, 2023, City Council meeting.

ALTERNATIVES:

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

1. Introduce the Ordinance; or

2. Modify as appropriate and introduce the modified Ordinance; or

3. Do not introduce the Ordinance and provide direction to staff on specific revisions to the Ordinance; or

4. Provide other direction to staff.

Item 10.b.

City Council
Public Hearing to Consider Introduction of an Ordinance Amending Title 16 of the Arroyo Grande Municipal Code Regarding Restrictions on Irrigated Turf and Finding This Action Exempt from The California Environmental Quality Act November 14, 2023

ADVANTAGES:

Ordinance amendments that further restrict or prohibit the use of irrigated turf will further the City’s efforts to conserve water.

DISADVANTAGES:

Residents will need to convert to alternate forms of landscaping, which some residents may prefer less than turf.

ENVIRONMENTAL REVIEW:

The Ordinance is exempt from the California Environmental Quality Act ("CEQA") because the Ordinance does not qualify as a “project” under CEQA and will not result in a direct or reasonably foreseeable indirect physical change in the environment. (State CEQA Guidelines section 15060, subd. (c)(2), (3).) Section 15378 of the State CEQA Guidelines defines a project as the whole of an action, which could potentially result in either a direct physical change, or reasonably foreseeable indirect physical change, in the environment. Here, the Ordinance will not result in any construction or development, and it will not have any other effect that would physically change the environment. In the alternative, the Ordinance is exempt under State CEQA Guidelines section 15061(b)(3), which exempts projects from CEQA “[w]here it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” 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 Ordinance

ATTACHMENT 1
ORDINANCE NO. ____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE AMENDING CHAPTER 16.84 OF THE

ARROYO GRANDE MUNICIPAL CODE REGARDING

RESTRICTIONS ON IRRIGATED TURF AND FINDING THE

ORDINANCE EXEMPT FROM THE CALIFORNIA

ENVIRONMENTAL QUALITY ACT
WHEREAS, in 2006, the State Legislature adopted the "Water Conservation in Landscaping Act" (Assembly Bill 1881), requiring the Department of Water Resources (DWR) to update the State Model Water Efficient Landscape Ordinance (MWELO) to reduce water consumption and waste in landscape irrigation; and WHEREAS, on June 14, 2011, the City adopted a Water Efficient Landscape Ordinance deemed to be as effective as the State MWELO Ordinance; and WHEREAS, the MWELO Ordinance was incorporated into the Arroyo Grande Municipal Code (AGMC) as Chapter 16.84; and
WHEREAS, in 2016, AGMC Chapter 16.84 was updated to incorporate the changes to the State’s MWELO, by reference; and
WHEREAS, this ordinance amends Chapter 16.84, by adding restrictions on the installation and maintenance on irrigated turf to further the City’s water conservation efforts; and
WHEREAS, on October 17, 2023, the Planning Commission conducted a duly noticed public hearing to consider the staff report, recommendations by staff, and public testimony concerning the ordinance. Following the public hearing, the Planning Commission voted to forward the ordinance to the City Council with a recommendation in favor of its adoption; and
WHEREAS, on November 14, 2023, the City Council introduced the ordinance and conducted a duly noticed public hearing to consider the ordinance and its changes to Chapter 16.84 of Title 16 of the Arroyo Grande Municipal Code, including: (1) the public testimony and agenda reports prepared in connection with the ordinance; (2) the policy considerations discussed therein; and (3) the consideration and recommendation of the Planning Commission; and
WHEREAS, all legal prerequisites to the adoption of the ordinance have occurred.

ORDINANCE NO.

PAGE 2
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NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DOES ORDAIN AS FOLLOWS:

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

SECTION 2. Environmental. The City Council finds that this ordinance is exempt from the California Environmental Quality Act ("CEQA") because the ordinance does not qualify as a “project” under CEQA and because the ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment. (State CEQA Guidelines section 15060, subd. (c)(2), (3).) Section 15378 of the State CEQA Guidelines defines a project as the whole of an action, which could potentially result in either a direct physical change, or reasonably foreseeable indirect physical change, in the environment.

Here, the ordinance will not result in any construction or development, and it will not have any other effect that would physically change the environment. The ordinance therefore does not qualify as a project subject to CEQA.

In the alternative, even if the Ordinance did qualify as a “project” under CEQA, it would be exempt from CEQA under State CEQA Guidelines section 15061(b)(3), which exempts projects from CEQA “[w]here it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” Thus, even if the ordinance could result in some physical change in the environment, the ordinance is exempt from CEQA because it can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment.

Finally, the Ordinance is adopted with the intent to protect natural resources and the environment, specifically the City’s water resources. This Ordinance will regulate and restrict the installation of irrigated turf for nonresidential, residential, and mixed uses.

Accordingly, this Ordinance is categorically exempt under either State CEQA Guidelines section 15307 or 15308.

SECTION 3. Required Findings. In accordance with section 16.16.040(E) of the AGMC, the City Council hereby makes the following findings:

1. General Plan. The ordinance’s amendments to the AGMC are consistent with the general plan and necessary and desirable to implement the provisions thereof.

Specifically, conservation and open space element objective C/OS6 encourage water conservation to support urban development potential. This ordinance effectuates and implements objective C/OS6 by limiting irrigated turf which has very high water needs to be maintained in good condition. For this reason, the ordinance’s amendments to the AGMC are consistent with the general plan and necessary and desirable to implement the provisions thereof.

2. Effect on Public. The ordinance’s amendments to the AGMC will not adversely affect the public health safety, and welfare or result in an illogical land use

ORDINANCE NO.

PAGE 3
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pattern because these updates to the development code will help ensure an adequate supply of water for Arroyo Grande residents.

3. Purpose and Intent. The revision to this title is consistent with the purpose and intent of the title since it implements the objectives of the General Plan, protects the vitality and orderly development of the Arroyo Grande community by limiting intensive water uses, and ensures an orderly planning with respect to the community’s water resources.

4. Environmental Impacts. The proposed amendments will promote positive environmental impacts through water conservation. Irrigated turf is associated with higher levels of water use and these code amendments will restrict or prohibit the use of such turf.

SECTION 4. Code Amendment. The City Council hereby approves the addition of the following Section 16.84.020 in full, amending Arroyo Grande Municipal Code Chapter 16.84, Water Efficient Landscape Requirements as follows:

16.84.020 Irrigated Turf Prohibition
A. Nonresidential and Mixed Uses

1. New nonresidential and mixed-use projects shall be prohibited from installing and maintaining irrigated turf on the property.

2. Proposed remodels or additions constituting fifty percent (50%) or more of the floor area of a property consisting of nonresidential or mixed-uses at the time when a building permit is issued for the remodel shall be required to remove all existing irrigated turf and replace that area with either water wise landscape species or an alternative with a watering requirement that is less than or equal to the water needs of the area landscaped with water wise landscaping.

Calculating the area of a remodel shall be done in accordance with the California Building Code.

B. Residential Uses

1. New projects consisting of solely residential uses shall be prohibited from installing and maintaining irrigated turf in the front yard of the property. For purposes of this section, the front yard is defined as the portion of the lot between the structure and the front property line.

2. Turf installations in the rear yard of residential properties is limited to either, whichever is less:
a. 500 square feet, or
b. Twenty-five percent (25%) of the total rear yard area. c. For purposes of this section, the rear yard is defined as the portion of the lot between the structure and the rear property line.

3. In situations where no turf is proposed in or will be installed in the rear yard, irrigated turf may be installed and maintained in the front yard area but the

ORDINANCE NO.

PAGE 4
-4-
amount of irrigated turf may not exceed twenty-five percent (25%) of the total front yard area.

SECTION 6. Publication. A summary of this ordinance shall be published in a newspaper published and circulated in the City of Arroyo Grande at least five days prior to the City Council meeting at which the proposed ordinance is to be adopted. A certified copy of the full text of the proposed ordinance shall be posted in the office of the City Clerk. Within 15 days after adoption of the ordinance, the summary with the names of those City Council members voting for and against the ordinance shall be published again, and the City Clerk shall post a certified copy of the full text of such adopted ordinance.

SECTION 7. Effective Date. This ordinance shall become effective 30 days after adoption.

SECTION 8. Severability. Should any provision of this ordinance, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall have no effect on any other provision of this ordinance or the application of this ordinance to any other person or circumstance, and, to that end, the provisions hereof are severable.

The City Council declares that it would have adopted all the provisions of this ordinance that remain valid if any provisions of this ordinance are declared invalid.

SECTION 9. Records. The documents and materials associated with this ordinance that constitute the record of proceedings on which the City Council’s findings and determinations are based are located at 300 E. Branch Street, Arroyo Grande, CA 93420. The City Clerk is the custodian of the record of proceedings.

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

AYES:

NOES:

ABSENT:
the foregoing Ordinance was adopted this ____ day of _______, 2023.

ORDINANCE NO.

PAGE 5
-5-
___________________________________

CAREN RAY RUSSOM, MAYOR
ATTEST:
___________________________________

JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:
___________________________________

BILL ROBESON, INTERIM CITY MANAGER
APPROVED AS TO FORM:
___________________________________

ISAAC ROSEN, CITY ATTORNEY

Item 12.a.

MEMORANDUM
TO: City Council
FROM: Jessica Matson, Legislative & Information Services Director/City Clerk SUBJECT: Consideration of Appointment of a Primary Board Member to Serve on the Central Coast Community Energy Policy Board for 2023-2025 DATE: November 14, 2023
SUMMARY OF ACTION:

Appoint a council member to serve as primary Board Member on the Central Coast Community Energy (CCCE) Policy Board for the two-year term beginning December 1, 2023, and ending November 30, 2025.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

There are no impacts to financial or personnel resources.

RECOMMENDATION:

Appoint a council member to serve as the primary representative on the Central Coast Community Energy (CCCE) Policy Board for a two-year term beginning December 1, 2023, and ending November 30, 2025.

BACKGROUND:

On August 13, 2019, City Council adopted Resolution 4940 (Attachment 1) requesting membership in the Monterey Bay Community Power Joint Powers Authority (JPA). In November 2019, a Memorandum of Understanding (MOU) between the cities of Arroyo Grande, Grover Beach, and Pismo Beach regarding participation in Monterey Bay Community Power (MBCP) was fully executed and implemented. In September 2020, MBCP rebranded and changed its name to Central Coast Community Energy (CCCE).

The MOU lays out a foundation for how the cities will share seats on governing boards of the JPA as follows:
 The Policy Board is comprised of elected officials and meets quarterly to decide high level policy decisions.
 The Operations Board is comprised of City Managers or their designees and meets approximately eight times per year to decide finer-detailed operational decisions.

Item 12.a.

City Council
Consideration of Appointment of a Primary Board Member to Serve on the Central Coast Community Energy Policy Board for 2023-2025 November 14, 2023

 The Community Advisory Council is comprised of community members and serves in an advisory role to the Policy Board and Operations Board.

In November 2021, Council appointed the Mayor as the City’s representative to the Policy Board. Due to the time and location of the Policy Board meetings, in May 2023, the City Council changed the alternate appointee to Mayor Pro Tem Barneich to serve the remainder of the current term, ending November 30, 2023.

ANALYSIS OF ISSUES:

The Cities of Grover Beach, Pismo Beach, and Arroyo Grande share a seat on the CCCE Policy and Operations Boards. Terms are two years. Pismo Beach has been serving as the primary representative on the Operations and Policy Boards, with Arroyo Grande serving as the alternate. The current term on these two Boards expires on November 30, 2023.

Per the MOU, Arroyo Grande is next in line to serve as the primary representative on the Operations and Policy Boards. The two-year term will begin December 1, 2023, and end November 30, 2025. Grover Beach is next in line to serve as an alternate on the Boards.

Policy Board meetings will be held according to the following schedule:

February and June
1 st Wednesday of the month, 1:30 pm at Monterey Headquarters September
3 rd Wednesday & Thursday of the month, Time TBD in Santa Cruz County December
2 nd Wednesday of the month, 9:00 am, teleconference locations in SLO County ALTERNATIVES:

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

1. Appoint a council member to serve as the Primary representative on the CCCE Policy Board; or

2. Provide other direction.

ADVANTAGES:

Appointing a primary representative to the CCCE Policy Board enables the City to remain in compliance with the MOU and to participate in the CCCE Policy and Operations Boards.

DISADVANTAGES:

No disadvantages have been identified.

Item 12.a.

City Council
Consideration of Appointment of a Primary Board Member to Serve on the Central Coast Community Energy Policy Board for 2023-2025 November 14, 2023

ENVIRONMENTAL REVIEW:

No environmental review is required for this item.

PUBLIC INFORMATION AND COMMENTS:

The Agenda was posted in accordance with Government Code Section 54954.2.

Attachments:

1. Resolution 4940

ATTACHMENT 1