Arroyo Grande City Council
June 23, 2026


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Bid Number: RFP 092424 Vendor Name: NCL Government Capital 






 






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Bid Number: RFP 092424 Vendor Name: NCL Government Capital 






 






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1 MASTER LEASE PURCHASE AGREEMENT
Lessee Lessor
XXXXXXX Lease Servicing Center, Inc. dba NCL Government Capital XXXXXXX 510 22nd Ave E., Ste 501
XXXXXXX Alexandria, MN 56308
Dated as of August 2, 2024
This Master Lease Purchase Agreement dated as of the date listed above is between Lessor and Lessee listed directly above. Lessor desires from time to time to lease the Equipment described in Equipment Schedules (each a “Schedule”) to be attached hereto to Lessee and Lessee desires to lease such Equipment from Lessor subject to the terms and conditions of this Agreement, which are set forth below, and the applicable Schedule.

I. Definitions:

Section 1.01. Definitions. The following terms will have the meanings indicated below unless the context clearly requires otherwise:
“Agreement’ means this Master Lease Purchase Agreement. “Budget Year” means the Lessee’s fiscal year.
“Commencement Date” is the date when Lessee’s obligation to pay rent begins. “Equipment” means the items of Equipment listed on Exhibit “A” to each Schedule and all replacements, restorations, modifications and improvements. “Lease” means this Agreement and an individual Schedule hereto, which shall collectively constitute the terms and conditions applicable to the lease of the Equipment subject thereto.
“Lessee” means the entity listed above as Lessee and which is leasing the Equipment from Lessor under the provisions of this Agreement and a Schedule. “Lessor” means the entity originally listed above as Lessor or any of its assignees. “Lease Term” means the Original Term and all Renewal Terms applicable to a Lease. “Original Term” means the period from the Commencement Date until the end of the Budget Year of Lessee. “Renewal Term” means the annual term which begins at the end of the Original Term and which is simultaneous with Lessee’s Budget Year. “Rental Payments” means the payments Lessee is required to make under this Agreement as set forth on Exhibit “B” to each Schedule made subject thereto. “Schedule” means a schedule substantially in the form attached hereto and all exhibits thereto pursuant to which Lessor and Lessee agree to the lease of the Equipment described therein and which together with the terms of the Agreement applicable thereto constitutes an individual Lease. “State” means the state in which Lessee is located.

II. Lessee Warranties
Section 2.01. With respect to each Lease, Lessee represents, warrants and covenants as follows for the benefit of Lessor or its assignees:
(a) Lessee is the State or a political subdivision of the State within the meaning of Section 103 of the Internal Revenue Code of 1986, as amended (the "Code") or a constituted authority authorized to issue obligations on behalf of the State or political subdivision of the State within the meaning of the treasury regulations promulgated under the Code.
(b) Lessee is authorized under the Constitution and laws of the State to enter into this Agreement and each Schedule, and has used such authority to properly execute and deliver this Agreement and each Schedule. Lessee has followed all proper procedures of its governing body in executing this Agreement and each Schedule. The Officer of Lessee executing this Agreement and each Schedule has the authority to execute and deliver this Agreement and such Schedule. This Agreement and each Schedule constitute a legal, valid, binding and enforceable obligation of the Lessee in accordance with their terms.
(c) Lessee has complied with all statutory laws and regulations that may be applicable to the execution of this Agreement and each Schedule. (d) Lessee shall use the Equipment only for essential, traditional government purposes. (e) Should the Lessee cease to be an issuer of tax exempt obligations or if the obligation of Lessee created under any Lease ceases to be a tax exempt obligation for any reason, then Lessee shall be required to pay additional sums to the Lessor or its assignees so as to bring the after tax yield on any Lease to the same level as the Lessor or its assignees would attain if the transaction continued to be tax-exempt. (f) Lessee has never non-appropriated funds under an agreement similar to this Agreement. (g) Lessee will submit to the Secretary of the Treasury an information reporting statement as required by the Code with respect to each Lease. (h) Upon request by Lessor, Lessee will provide Lessor with current financial statements, reports, budgets or other relevant fiscal information. (i) Lessee shall retain the Equipment free of any hazardous substances as defined in the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et. seq. as amended and supplemented. (j) Lessee presently intends to continue each Lease for the Original Term and all Renewal Terms as set forth on Exhibit "B" to the Schedule relating thereto.

The official of Lessee responsible for budget preparation will include in the budget request for each Budget Year the Rental Payments to become due in such Budget year, and will use all reasonable and lawful means available to secure the appropriation of money for such Budget Year sufficient to pay the Rental Payments coming due therein. Lessee reasonably believes that moneys can and will lawfully be appropriated and made available for this purpose.

Section 2.02. Escrow Agreement. In the event both Lessor and Lessee mutually agree to utilize an escrow account, then immediately following the execution and delivery of any Schedule, Lessor and Lessee agree to execute and deliver and to cause an escrow agent to execute and deliver an escrow agreement.

Such Lease shall take effect only upon execution and delivery of the escrow agreement by the parties thereto. Lessor shall deposit or cause to be deposited with the escrow agent for credit to an equipment acquisition fund the sum specified in such Schedule which shall be held, invested and disbursed in accordance with the escrow agreement.

III. Acquisition of Equipment, Rental Payments and the Purchase Option Price Section 3.01. Acquisition: Lessee shall advise Lessor of its desire to lease Equipment and of the desired lease terms. Upon agreement by Lessor and Lessee as to the lease of such Equipment and such terms, Lessee shall be solely responsible for the ordering of the Equipment and the delivery and installation thereof. Lessor shall furnish to Lessee a Schedule relating to such Equipment, which shall become effective upon the execution and delivery of such Schedule, all documents contemplated hereby and thereby with respect to such Schedule, and the earlier of Lessee's written acceptance of such Equipment or the deposit into escrow of moneys to pay for such Equipment as provided in Section 2.02. Nothing herein shall obligate Lessor to lease any Equipment to Lessee until Lessor shall have concurred in writing to the lease of such Equipment.

Section 3.02. Rental Payments. Lessee shall promptly pay Rental Payments under each Schedule, from any and all legally available funds, exclusively to Lessor or its assignees, in lawful money of the United States of America. The Rental Payments shall be sent to the location specified by the Lessor or its assignees. The Rental Payments shall constitute a current expense of the Lessee and shall not constitute an indebtedness of the Lessee. Lessor shall have the option to charge interest at the highest lawful rate on any Rental Payment received later than the due date. The Rental Payments will be payable without notice or demand.

Section 3.03. Rental Payments Unconditional. Except as provided under Section 4.01, THE OBLIGATIONS OF LESSEE TO MAKE RENTAL PAYMENTS

AND TO PERFORM AND OBSERVE THE OTHER COVENANTS CONTAINED IN THIS AGREEMENT SHALL BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS WITHOUT ABATEMENT, DIMINUTION, DEDUCTION, SET-OFF OR DEFENSE.

Section 3.04. Purchase Option Price. With respect to each Schedule, upon 30 days written notice, Lessee shall have the option to pay, in addition to any SAMPLE ATTACHMENT 4

Rental Payment due thereunder, the corresponding Purchase Option Price which is listed on the same line on Exhibit B to such Schedule. If Lessee chooses this option and pays the Purchase Option Price to Lessor then Lessor will transfer any and all of its rights, title and interest in the Equipment subject to such Lease to Lessee.

Section 3.05. Lease Term. The Lease Term of each Lease shall be the Original Term and all Renewal Terms thereunder until all the Rental Payments due thereunder are paid as set forth in the applicable Schedule except as provided under Section 4.01 and Section 9.01 below. If, after the end of the budgeting process which occurs at the end of the Original Term or any Renewal Term, Lessee has not terminated a Lease pursuant to Section 4.01 hereof then the Lease Term for such Lease shall be extended into the next Renewal Term and the Lessee shall be obligated to make the Rental Payments that come due during such Renewal Term.

Section 3.06. Disclaimer of Warranties. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE,

DESIGN, CONDITION, MERCHANTABILITY, AND FITNESS FOR PARTICULAR PURPOSE OR ANY OTHER WARRANTY WITH RESPECT TO THE EQUIPMENT. LESSOR SHALL NOT BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGE ARISING OUT OF THE INSTALLATION, OPERATION, POSSESSION, STORAGE OR USE OF THE EQUIPMENT BY LESSEE.

IV. Non-Appropriation
Section 4.01. Non-Appropriation. If insufficient funds are available in Lessee’s budget for the next Budget Year to make the Rental Payments for the next Renewal Term under any Lease, then Lessee shall have the option to non-appropriate the funds to pay the Rental Payments for the next Renewal Term with respect to such Lease. Lack of a sufficient appropriation shall be evidenced by the passage of an ordinance or resolution by the governing body of Lessee specifically prohibiting Lessee from performing its obligations under such Lease for a designated Budget Year and all subsequent Budget Years. If Lessee chooses this option, then all obligations of the Lessee under such Lease regarding Rental Payments for all remaining Renewal Terms shall be terminated at the end of the then current Original Term or Renewal Term without penalty or liability to the Lessee of any kind provided that if Lessee has not delivered possession of the Equipment subject to such Lease to Lessor as provided herein and conveyed to Lessor or released its interest in such Equipment by the end of the last Budget Year for which Rental Payments were paid, the termination shall nevertheless be effective but Lessee shall be responsible for the payment of damages in an amount equal to the amount of the Rental Payments thereafter coming due under Exhibit “B” to the Schedule for such Lease which are attributable to the number of days after such Budget Year during which Lessee fails to take such actions and for any other loss suffered by Lessor as a result of Lessee’s failure to take such actions as required. Lessee shall immediately notify the Lessor as soon as the decision to non-appropriate is made. If such non-appropriation occurs, then Lessee shall deliver the Equipment to Lessor or to a location designated by Lessor at Lessee’s expense. Lessee shall be liable for all damage to the Equipment other than normal wear and tear. If Lessee fails to deliver such Equipment to Lessor, then Lessor may enter the premises where such Equipment is located and take possession of the Equipment and charge Lessee for costs incurred.

V. Insurance, Damage, Insufficiency of Proceeds, Lessee Negligence Section 5.01. Insurance. Lessee shall maintain both casualty insurance and liability insurance at its own expense with respect to the Equipment. Lessee shall be solely responsible for selecting the insurer(s) and for making all premium payments and ensuring that all policies are continuously kept in effect during the term of any Lease. Lessee shall provide Lessor with a Certificate of Insurance, which lists the Lessor and/or assigns as a loss payee and an additional insured on the policies with respect to the Equipment.
(a) Lessee shall insure the Equipment against any loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the State and any other risks reasonably required by Lessor in an amount at least equal to the then applicable Purchase Option Price of the Equipment. Alternatively, Lessee may insure the Equipment under a blanket insurance policy or policies. (b) The liability insurance shall insure Lessor from liability and property damage in any form and amount satisfactory to Lessor. (c) Provided that, with Lessor's prior written consent, Lessee may self-insure against the risks described in (a) and (b) above. Lessee shall furnish Lessor evidence of such self-insurance coverage throughout each Lease Term. Lessee shall not materially modify or cancel such self-insurance coverage without first giving written notice thereof to Lessor at least 10 days in advance of such cancellation or modification. (d) All insurance policies issued or affected by this Section shall be so written or endorsed such that the Lessor and its assignees are named additional insured and loss payees and that all losses are payable to Lessee and Lessor or its assignees as their interests may appear. Each policy issued or affected by this Section shall contain a provision that the insurance company shall not cancel or materially modify the policy without first giving thirty 30 days advance notice to Lessor or its assignees. Lessee shall furnish to Lessor certificates evidencing such coverage throughout each Lease Term.

Section 5.02. Damage to or Destruction of Equipment. Lessee assumes the risk of loss or damage to the Equipment. If the Equipment or any portion thereof is lost, stolen, damaged, or destroyed by fire or other casualty, Lessee will immediately report all such losses to all possible insurers and take the proper procedures to attain all insurance proceeds. At the option of Lessor, Lessee shall either (1) apply the Net Proceeds to replace, repair or restore the Equipment or (2) apply the Net Proceeds to the applicable Purchase Option Price. For purposes of this Section and Section 5.03, the term Net Proceeds shall mean the amount of insurance proceeds collected from all applicable insurance policies after deducting all expenses incurred in the collection thereof.

Section 5.03. Insufficiency of Net Proceeds. If there are no Net Proceeds for whatever reason or if the Net Proceeds are insufficient to pay in full the cost of any replacement, repair, restoration, modification or improvement of the Equipment, then Lessee shall, at the option of Lessor, either complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of the Net Proceeds or apply the Net Proceeds to the Purchase Option Price and pay the deficiency, if any, to the Lessor.

Section 5.04. Lessee Negligence. Lessee assumes all risks and liabilities, whether or not covered by insurance, for loss or damage to the Equipment and for injury to or death of any person or damage to any property whether such injury or death be with respect to agents or employees of Lessee or of third parties, and whether such property damage be to Lessee’s property or the property of others including, without limitation, liabilities for loss or damage related to the release or threatened release of hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act or similar or successor law or any state or local equivalent now existing or hereinafter enacted which in any manner arise out of or are incident to any possession, use, operation, condition or storage of any Equipment by Lessee which is proximately caused by the negligent conduct of Lessee, its officers, employees and agents. Lessee hereby assumes responsibility for and agrees to reimburse Lessor for all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses including reasonable attorneys’ fees of whatsoever kind and nature, imposed on, incurred by or asserted against Lessor that in any way relate to or arise out of a claim, suit or proceeding, based in whole or in part upon the negligent conduct of Lessee, its officers, employees and agents, to the maximum extent permitted by law.

VI. Title and Security Interest
Section 6.01. Title. Title to the Equipment shall vest in Lessee when Lessee acquires and accepts the Equipment. Title to the Equipment subject to a Lease will automatically transfer to the Lessor in the event Lessee non-appropriates under Section 4.01 with respect to such Lease or in the event Lessee defaults under Section 9.01 with respect to such Lease. In either of such events, Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence the passage of legal title to the Equipment subject to such Lease to Lessor.

Section 6.02. Security Interest. To secure the payment of all Lessee’s obligations under each Lease, Lessee hereby grants to Lessor a security interest under the Uniform Commercial Code constituting a first lien on the Equipment described more fully on Exhibit “A” to each Schedule. The security interest established by this section includes not only all additions, attachments, repairs and replacements to the Equipment but also all proceeds therefrom. Lessee agrees that Lessor or its assignee may execute such additional documents including financing statements, affidavits, notices, and similar instruments, for and on behalf of Lessee which Lessor deems necessary or appropriate to protect Lessor’s interest in the Equipment and in this Agreement and each Lease. Lessee authorizes Lessor to record such documentation as necessary for Lessor to perfect its security interest.

Section 6.03. Personal Property. The Equipment is and shall at all times be and remain personal property notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner affixed or attached to or embedded in or permanently rested upon real property or any building thereon or attached in any manner to what is permanent by means of cement, plaster, nails, bolts, screws or otherwise.

3 VII. Assignment
Section 7.01. Assignment by Lessor. All of Lessor’s rights, title and/or interest in and to each Lease may be assigned and reassigned in whole or in part to one or more assignees or sub-assignees (including a registered owner for lease participation certificates) by Lessor at any time without the consent of Lessee.

No such assignment shall be effective as against Lessee until the assignor shall have filed with Lessee written notice of assignment identifying the assignee.

Lessee shall pay all Rental Payments due under each Lease to or at the direction of Lessor or the assignee named in the notice of assignment. Any assignee’s rights shall be free from all defenses, set-offs or counterclaims which Lessee may be entitled to assert against Lessor, and Lessor’s obligations hereunder and under each Lease shall not be binding on any assignee or sub-assignees. Lessee shall keep a complete and accurate record of all such assignments.

Section 7.02. Assignment by Lessee. None of Lessee’s right, title and interest under this Agreement, each Lease and in the Equipment may be assigned by Lessee unless Lessor approves of such assignment in writing before such assignment occurs and only after Lessee first obtains an opinion from nationally recognized counsel stating that such assignment will not jeopardize the tax-exempt status of the obligation.

VIII. Maintenance of Equipment
Section 8.01. Lessee shall keep the Equipment in good repair and working order. Lessor shall have no obligation to inspect, test, service, maintain, repair or make improvements or additions to the Equipment under any circumstances. Lessee will be liable for all damage to the Equipment, other than normal wear and tear, caused by Lessee, its employees or its agents. Lessee shall pay for and obtain all permits, licenses and taxes necessary for the installation, operation, possession, storage or use of the Equipment. If the Equipment includes any titled vehicles, then Lessee is responsible for obtaining such titles from the State and also for ensuring that Lessor is listed as first lien holder on all of the titles. Lessee shall not use the Equipment to haul, convey or transport hazardous waste as defined in the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et. seq. Lessee shall not during the term of this Agreement create, incur or assume any levies, liens or encumbrances of any kind with respect to the Equipment except those created by this Agreement. The Equipment is and shall at all times be and remain personal property. Lessee shall allow Lessor to examine and inspect the Equipment at all reasonable times.

IX. Default
Section 9.01. Events of Default defined. The following events shall constitute an “Event of Default” with respect to a Lease:
(a) Failure by Lessee to pay any Rental Payment listed on Exhibit “B” to the Schedule for fifteen 15 days after such payment is due according to the Payment Date listed on Exhibit “B”.
(b) Failure to pay any other payment required to be paid under this Agreement and the Schedule at the time specified herein and therein and a continuation of said failure for a period of fifteen 15 days after written notice by Lessor that such payment must be made. If Lessee continues to fail to pay any payment after such period, then Lessor may, but will not be obligated to, make such payments and charge Lessee for all costs incurred plus interest at the highest lawful rate.
(c) Failure by Lessee to observe and perform any warranty, covenant, condition, promise or duty under this Agreement or the Schedule for a period of thirty 30 days after written notice specifying such failure is given to Lessee by Lessor, unless Lessor agrees in writing to an extension of time. Lessor will not unreasonably withhold its consent to an extension of time if corrective action is instituted by Lessee. Subsection (c) does not apply to Rental Payments and other payments discussed above.
(d) Any statement, material omission, representation or warranty made by Lessee in or pursuant to this Agreement or the Schedule which proves to be false, incorrect or misleading on the date when made regardless of Lessee’s intent and which materially adversely affects the rights or security of Lessor under this Agreement or the applicable Schedule. (e) Any provision of this Agreement or the Schedule which ceases to be valid for whatever reason and the loss of such provision, would materially adversely affect the rights or security of Lessor.
(f) Lessee admits in writing its inability to pay its obligations. Lessee defaults on one or more of its other obligations. Lessee applies or consents to the appointment of a receiver or a custodian to manage its affairs. Lessee makes a general assignment for the benefit of creditors.

Section 9.02. Remedies on Default. Whenever any Event of Default exists with respect to any Lease, Lessor shall have the right to take one or any combination of the following remedial steps:
(a) With or without terminating the Lease, Lessor may declare all Rental Payments and other amounts payable by Lessee thereunder to the end of the then current Budget Year to be immediately due and payable. (b) With or without terminating the Lease, Lessor may require Lessee at Lessee’s expense to redeliver any or all of the Equipment subject thereto to Lessor to a location specified by Lessor. Such delivery shall take place within 15 days after the event of default occurs. If Lessee fails to deliver such Equipment, Lessor may enter the premises where such Equipment is located and take possession of such Equipment and charge Lessee for cost incurred. Notwithstanding that Lessor has taken possession of such Equipment, Lessee shall still be obligated to pay the remaining Rental Payments under the Lease due up until the end of the then current Original Term or Renewal Term. Lessee will be liable for any damage to such Equipment caused by Lessee or its employees or agents.
(c) Lessor may take whatever action at law or in equity that may appear necessary or desirable to enforce its rights.

Section 9.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Lease now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or shall be construed to be a waiver thereof, X. Miscellaneous
Section 10.01. Notices. All notices shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, to the parties at their respective places of business as first set forth herein or as the parties shall designate hereafter in writing.

Section 10.02. Binding Effect. This Agreement and each Schedule shall inure to the benefit of and shall be binding upon Lessee and Lessor and their respective successors and assigns.

Section 10.03. Sever ability. In the event any provision of this Agreement or any Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 10.04. Amendments, Addenda, Changes or Modifications. This Agreement and each Lease may be amended, added to, changed or modified by written agreement duly executed by Lessor and Lessee.

Section 10.05. Execution in Counterparts: Electronic Execution. This Agreement may be signed by the parties in counterparts which together shall constitute one and the same agreement among the parties. Each party hereby acknowledges and agrees that this Agreement constitutes an Electronic Record and may be executed using Electronic Signatures (including, without limitation, facsimile, .pdf and DocuSign) and shall be considered original signatures for all purposes, and shall have the same legal effect, validity and enforceability as a paper record. For purposes hereof, “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.” Section 10.06. Captions. The captions or headings in this Agreement do not define, limit or describe the scope or intent of any provisions or sections of this Agreement.

Section 10.07. Entire Writing. This Agreement and all Schedules executed hereunder constitute the entire writing between Lessor and Lessee. No waiver, consent, modification or change of terms of this Agreement or any Lease shall bind either party unless in writing and signed by both parties, and then such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given. There are no understandings, agreements, representations, conditions, or warranties, express or implied, which are not specified herein regarding this Agreement or any Lease or the Equipment leased thereunder. Any terms and conditions of any purchase order or other documents submitted by Lessee in connection with this Agreement which are in addition to or inconsistent with the terms and conditions of this Agreement or any Lease will not be binding on Lessor and will not apply to this Agreement or any Lease.

Section 10.08. Jurisdiction and Venue. Lessee irrevocably submits to the nonexclusive jurisdiction of any Federal or state court sitting in New York, over any

suit, action or proceeding arising out of or relating to this Agreement. Lessee irrevocably waives, to the fullest extent it may effectively do so under applicable law, any objection it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that the same has been brought in an inconvenient forum. Lessee hereby consents to any and all process which may be served in any such suit, action or proceeding, (i) by mailing a copy thereof by registered and certified mail, postage prepaid, return receipt requested, to the Lessee's address shown in this Agreement or as notified to the Lessor and (ii) by serving the same upon the Lessee in any other manner otherwise permitted by law, and agrees that such service shall in every respect be deemed effective service upon Lessee.

Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives listed below.

Lessee: XXXXXXX Lessor: Lease Servicing Center, Inc. dba NCL Government Capital
By: By:

Typed: Print:

Title: Title:

Date: __________________________________ Date: _________________________________

EXHIBIT A
A

DESCRIPTION OF EQUIPMENT OF LEASE AGREEMENT
RE: Master Lease Purchase Agreement dated as of 8/02/2024 between Lease Servicing Center, Inc. dba NCL Government Capital (Lessor) and XXXXXXX (Lessee) and Schedule No. 001 thereto dated as of August 2, 2024.

Below is a detailed description of all the items of Equipment including quantity, model number and serial number where applicable:

Quantity
EQUIPMENT LOCATION Complete only if equipment will not be located at Lessee’s address BILLING ADDRESS: XXXXXXX

XXXXXXX
GARAGING ADDRESS:

Lessee authorizes Lessor or its assigns to insert or modify, if needed, the Vehicle Identification Number (“VIN”), or Serial Number, in the above description of the Equipment to correspond to the final delivered and accepted Equipment as shown on the respective invoice or other supporting documents.

Lessee: XXXXXXX Lessor: Lease Servicing Center, Inc. dba NCL Government Capital
By: By:

Typed: Print:

Title: Title:

Date: __________________________________ Date: __________________________________

EXHIBIT B
B

SCHEDULE OF PAYMENTS
Interest Rate = %
Amount Financed = $
Start Date =
Number Date Payment Interest Principal Purchase Option*

*Assumes that all rental payments and other amounts due on and prior to that date have been paid.

Lessee: XXXXXXX
BY:

TYPED:

TITLE:

DATE:

EXHIBIT E
E

LESSEE RESOLUTION
Re: Master Lease Purchase Agreement dated as of 8/02/2024, between Lease Servicing Center, Inc. dba NCL Government Capital (Lessor) and XXXXXXX (Lessee) and Schedule No. 001 thereto dated as of August 2, 2024.

At a duly called meeting of the Governing Body of the Lessee (as defined in the Agreement) held on ____________________, 20___ the following resolution was introduced and adopted:

BE IT RESOLVED by the Governing Body of Lessee as follows:

1. Determination of Need. The Governing Body of Lessee has determined that a true and very real need exists for the acquisition of the Equipment described on Exhibit A of Schedule No. 001 to the Master Lease Purchase Agreement dated as of 8/02/2024, between XXXXXXX (Lessee) and Lease Servicing Center, Inc. dba NCL Government Capital (Lessor).

2. Approval and Authorization. The Governing Body of Lessee has determined that the Agreement and Schedule, substantially in the form presented to this meeting, are in the best interests of the Lessee for the acquisition of such Equipment, and the Governing Body hereby approves the entering into of the Agreement and Schedule by the Lessee and hereby designates and authorizes the following person(s) to execute and deliver the Agreement and Schedule on Lessee’s behalf with such changes thereto as such person(s) deem(s) appropriate, and any related documents, including any Escrow Agreement, necessary to the consummation of the transaction contemplated by the Agreement and Schedule. XXXXXXX is authorized to enter the lease/purchase financing with Lease Servicing Center, Inc. dba NCL Government Capital to finance their one (1) XXXXXXXX from XXXXXXXX in the amount of $XXX with X annual payments of $XXXXXX.

Authorized Individual(s): -
(Printed or Typed Name and Title of individual(s) authorized to execute the Agreement)

3. Adoption of Resolution. The signatures below from the designated individuals from the Governing Body of the Lessee evidence the adoption by the Governing Body of this Resolution.

By:
(Signature of Secretary, Board or other member of the Governing Body) Print Name: Title:
(Print name of individual who signed directly above) (Title of individual who signed directly above) Attested By:
(Signature of one additional person who can witness the passage of this Resolution) Print Name: Title:
(Print name of individual who signed directly above) (Title of individual who signed directly above)

EXHIBIT F
F

BANK QUALIFIED CERTIFICATE
Re: Master Lease Purchase Agreement dated as of 8/02/2024, between Lease Servicing Center, Inc. dba NCL Government Capital (Lessor) and XXXXXXX (Lessee) and Schedule No. 001 thereto dated as of August 2, 2024.

Whereas, Lessee hereby represents that it is a “Bank Qualified” Issuer for the calendar year in which this Agreement and Schedule are executed by making the following designations with respect to Section 265 of the Internal Revenue Code. (A “Bank Qualified Issuer” is an issuer that issues less than ten million ($10,000,000) dollars of taxexempt obligations during the calendar year).

Now, therefore, Lessee hereby designates this Agreement and Schedule as follows:

1. Designation as Qualified Tax-Exempt Obligation. Pursuant to Section 265(b)(3)(B)(ii) of the Internal Revenue Code of 1986 as amended (the “Code”), the Lessee hereby specifically designates the Agreement and this Schedule as a “qualified tax-exempt obligation” for purposes of Section 265(b)(3) of the Code. In compliance with Section 265(b)(3)(D) of the Code, the Lessee hereby represents that the Lessee will not designate more than $10,000,000 of obligations issued by the Lessee in the calendar year during which the Agreement is executed and delivered as such “qualified tax-exempt obligations”.

2. Issuance Limitation. In compliance with the requirements of Section 265(b)(3)(C) of the Code, the Lessee hereby represents that the Lessee (including all subordinate entities of the Lessee within the meaning of Section 265(b)(3)(E) of the Code) reasonable anticipates not to issue in the calendar year during which the Agreement and Supplement are executed and delivered, obligations bearing interest exempt from federal income taxation under Section 103 of the Code (other than “private activity bonds” as defined in Section 141 of the Code) in an amount greater than $10,000,000.

By:
(Signature of individual authorized to execute this Exhibit) Typed Name:
(Typed name of individual who signed directly above)

EXHIBIT G
G

AGREEMENT TO PROVIDE INSURANCE
Lessee: XXXXXXX Lessor: Lease Servicing Center, Inc. dba NCL Government Capital AOIA
Address: XXXXXXX Address: 510 22nd Ave E., Ste 501
XXXXXXX Alexandria, MN 56308
Phone: Phone: (320) 763-7600
Description of Equipment:

Quantity
I understand that to provide protection from serious financial loss, should an accident or loss occur, my lease contract requires the equipment to be continuously covered with insurance against the risks of fire and theft, and that failure to provide such insurance gives the Lessor the right to declare the entire unpaid balance immediately due and payable. Accordingly, I have arranged for the required insurance through the insurance company shown below and have requested my agent to note Lessor’s interest in the equipment and name Lessor as additional insured.

NAME OF AGENT INSURANCE COMPANY
Name: Name:

Address: Policy #:

Phone:

Lessee: XXXXXXX
BY:

TYPED:

TITLE:

DATE:

EXHIBIT H
H

LESSEE CERTIFICATE
RE: Master Lease Purchase Agreement dated as of 8/02/2024 between Lease Servicing Center, Inc. dba NCL Government Capital (Lessor) and XXXXXXX (Lessee) and Schedule No. 001 thereto dated as of August 2, 2024.

I, the undersigned, hereby certify that I am a duly qualified representative of Lessee and that I have been given the authority by the Governing Body of Lessee to sign this Certificate of Acceptance with respect to the above referenced Master Lease Purchase Agreement (the “Lease”). I hereby certify that:

1. Lessee has appropriated and/or taken other lawful actions necessary to provide moneys sufficient to pay all Rental Payments required to be paid under the Lease during the current Budget Year of Lessee, and such moneys will be applied in payment of all Rental Payments due and payable during such current Budget Year.

2. The governing body of Lessee has approved the authorization, execution and delivery of the Lease on its behalf by the authorized representative of Lessee who signed the Lease.

3. During the term of the Lease, the Equipment will be used for essential governmental functions. Such functions are:
___________________________________________________________________________________ ___________________________________________________________________________________

4. The source of funds (fund Item in budget) for the Rental Payments that come due under Exhibit B of this Lease is as follows:
___________________________________________________________________________________ ___________________________________________________________________________________

5. Lessee reasonably expects and anticipates that adequate funds will be available for all future Rental Payments that will come due under Exhibit B because:
___________________________________________________________________________________ ___________________________________________________________________________________ Lessee: XXXXXXX
BY:

TYPED:

TITLE:

DATE:

NOTICE OF ASSIGNMENT
AND

LETTER OF DIRECTION
Lease Servicing Center, Inc. dba NCL Government Capital ("Lessor") hereby gives notice to XXXXXXX (“Lessee”) that it has assigned all of its rights to receive payments under the Master Lease Purchase Agreement dated August 2, 2024, Schedule No. 001 as set out in Section 7.01, and in any of the Equipment now or hereafter leased thereunder, including without limitation all amounts of rent, insurance, and condemnation proceeds, indemnity or other payment proceeds due to become due as a result of the sale, lease of other disposition of the Equipment, all rights to receive notices and give consents and to exercise the rights of the Lessor under the Lease, and all rights, claims and causes of action which Assignor may have against the manufacturer or seller of the Equipment in respect of any defects therein.

This Master Lease Purchase Agreement requires X annual payments of $XXXXX. As of the date of assignment, X annual payments of $XXXXX remain on the contract and should be forwarded to the assignee at the following address:
“ASSIGNEE”
FEIN:
* Please list the following as lien holder on vehicle titles:

Any assigned payments received by Lessor are received in trust for assignee and will be immediately delivered to Assignee.

LEASE SERVICING CENTER,INC. DBA XXXXXXX

NCL GOVERNMENT CAPITAL
(Lessor/Assignor) (Lessee)
BY: ___________________________ BY: _____________________________ PRINT: TYPED:

TITLE: TITLE:

DATE: __________________________ DATE: _____________________________

Internal Escrow Letter
8/02/2024
RE: Schedule No. 001 dated August 2, 2024, to Master Lease Purchase Agreement dated as of 8/02/2024 (the “Lease”), between XXXXXXX (Lessee) and Lease Servicing Center Inc. dba NCL Government Capital (Lessor), concurrently assigned to XXXXXX (“Assignee”).

Ladies and Gentlemen:

We have entered into the above referenced Lease for the purpose of financing the equipment listed in Attachment #1 (the "Equipment") in the amount of $XXXXXX (the "Financed Amount").

Lessee hereby requests that Lessor retain $XXXXXXX (the "Retained Amount"). Lessee further requests that Lessor hold the Retained Amount in an internal escrow pending Lessor's receipt of confirmation from Lessee that the Equipment has been delivered, inspected and accepted for all purposes by the Lessee and that payment can be remitted to the vendor of such Equipment. There will be no separate escrow fee charged to Lessee for internally escrowing the Retained Amount.

Lessee understands and agrees that interest shall accrue on the entire Financed Amount as of the date hereof, and further understands and agrees that any interest earned on the Retained Amount shall be paid to Lessor in consideration of managing the internal escrow account.

Lessee acknowledges that Lessor may commingle the Retained Amount held by Lessor for the benefit of Lessee with other funds held by Lessor for its own account, so long as Lessor maintains segregation of such amounts on the books and records of Lessor.

Sincerely,
Lessee: XXXXXXX
BY:

TYPED:

TITLE:

DATE:

Internal Escrow Letter
Attachment #1
Quantity Year Make Type/Style/Model VIN/Serial Number Price Total Cost: $
Down Payment $0
Total Amount Financed $

LEASE PAYMENT INSTRUCTIONS
Lessee: ___________________________________________________________________ Tax ID#: ___________________________________________________________________ Invoice Mailing Address: ___________________________________________________ ___________________________________________________
Mail invoices to the attention of: __________________________ Phone: ____________________
Fax: _______________________
Email: _____________________
Approval of Invoices required by: __________________________ Phone: ____________________
Fax: _______________________
Email: _____________________
Accounts Payable Contact: __________________________
Phone: ____________________
Fax: _______________________
Email: _____________________
Processing time for Invoices: ______ Approval: _________Checks: _________ Do you have a Purchase Order Number that you would like included on the invoice? No __ Yes __ PO# ___________________
Description needed for Lease Payment Invoices (up to 54 characters including a PO#) : ___________ _________________________________________________________________________________ Does your PO# change annually? No ____ Yes ____
Processing time for new purchase orders:____________

EXHIBIT C-1

PAYMENT REQUEST AND PARTIAL ACCEPTANCE CERTIFICATE
RE: Master Lease Purchase Agreement dated as of August 2, 2024, between Lease Servicing Center, Inc. dba NCL Government Capital (Lessor) and XXXXXXX (Lessee) and Schedule No. 001 thereto.

I, the undersigned, hereby certify that I am a duly qualified representative of Lessee and that I have been given the authority by the Governing Body of Lessee to sign this Certificate of Acceptance with respect to the above referenced Master Lease Purchase Agreement and Schedule No. 001 (the “Lease”). I hereby certify that:

1. The Equipment described below (comprising part of the Equipment described on Lease Exhibit A) has been delivered and installed in accordance with Lessee’s specifications and Lessee hereby requests and authorizes Lessor to disburse, or direct the escrow agent to disburse, to Lessee or the vendor described below net proceeds of the Lease in the amount specified by wire transfer or by check. Such amount has not formed the basis for a previous request for payment.

2. Lessee has conducted such inspection and/or testing of such Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts such Equipment for all purposes.

3. Rental Payments are due and owing as set forth in Exhibit B to the Lease.

4. Lessee has obtained insurance coverage as required under the Lease.

5. Lessee is exempt from all personal property taxes and is also exempt from sales and/or use taxes with respect to the Equipment and the Rental Payments.

6. No event or condition that constitutes or would constitute an Event of Default exists as of the date hereof.

Quantity Year Make Type/Style/Model VIN/Serial Number Price Total Cost: $
Down Payment $0
Total Amount Financed $
Vendor Name and Address:

Vendor Federal ID Number:

Lessee: XXXXXXX
BY:

TYPED:

TITLE:

DATE:
\

EXHIBIT C-2

FINAL ACCEPTANCE
Re: Master Lease Purchase Agreement dated as of 8/02/2024, between Lease Servicing Center, Inc. dba NCL Government Capital (Lessor) and XXXXXXX (Lessee) and Schedule No. 001 thereto.

I, the undersigned, hereby certify that I am a duly qualified representative of Lessee and that I have been given the authority by the Governing Body of Lessee to sign this Final Acceptance Certificate with respect to the above referenced Master Lease Purchase Agreement and Schedule No. 001 (the “Lease”). I hereby certify that:

1. All Equipment described on Exhibit A has been delivered and installed in accordance with Lessee’s specifications and Lessee hereby requests and authorizes Lessor to direct the escrow agent to apply the remaining net proceeds of the Lease to Lessee’s next Rental Payment due.

2. Lessee has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes.

3. Rental Payments with respect to such Equipment are due and owing as set forth in Exhibit B to the Lease.

4. Lessee has obtained insurance coverage as required under the Lease.

5. Lessee is exempt from all personal property taxes and is also exempt from sales and/or use taxes with respect to the Equipment and the Rental Payments.

6. No event or condition that constitutes or would constitute an Event of Default exists as of the date hereof.

Lessee: XXXXXXX
BY:

TYPED:

TITLE:

DATE:

4490 SOUTH K STREET, TULARE, CALIFORNIA 93274
(559) 220-8897 ~ HAAKER.COM

SOURCEWELL QUOTE
JUNE 4, 2026
TO: CITY OF ARROYO GRANDE ATTN: MS HAILIE HIX
1375 ASH STREET (805) 748-3635
ARROYO GRANDE, CA 93421 EMAIL: [email protected]

IN ACCORDANCE WITH YOUR REQUEST, WE ARE PLEASED TO SUBMIT THE FOLLOWING PROPOSAL FOR

YOUR CONSIDERATION AND APPROVAL BASED ON THE SOURCEWELL COOPERATIVE PURCHASING AGREEMENT - CONTRACT #101221-VTR.

ONE (1) NEW DIESEL VACTOR 2110 SINGLE ENGINE FAN SEWER CLEANER 10 YD DEBRIS, SINGLE ENGINE-DUAL STAGE FAN. MOUNTED ON A 2027 FREIGHTLINER 114SD SINGLE AXLE (4X2) 370HP, WITH CUMMINS L9 ENGINE AND ALLISON 3000RDS AUTOMATIC TRANSMISSION.

EQUIPPED WITH ALL STANDARD/OPTIONAL EQUIPMENT LISTED:

STANDARD EQUIPMENT INCLUDED:

JETRIGHT TECHNOLOGY

UNDER ENGINE TOOLBOX

ALUMINUM FENDERS

MUD FLAPS

COLOR CODED SEALED ELECTRICAL
SYSTEM

INTUITOUCH ELECTRONIC PACKAGE

DOUBLE ACTING HOIST CYLINDER

HANDGUN ASSEMBLY

EX-TEN STEEL CYLINDRICAL DEBRIS
TANK

FLEXIBLE HOSE GUIDE
(3) NOZZLES WITH CARBIDE INSERTS
W/RACK

SUCTION TUBE STORAGE
1" NOZZLE PIPE
10' LEADER HOSE

FLAT REAR DOOR W/HYDRAULIC
LOCKS

DUAL STAINLESS-STEEL FLOAT SHUT

OFF SYSTEM

LUBE MANIFOLD, WITH LUBE CHART

DEBRIS BODY VACUUM RELIEF
SYSTEM

DEBRIS DEFLECTOR PLATE
48" DUMP HEIGHT
1000 GALLONS STD

DEBRIS BODY-UP MESSAGE AND
ALARM

LOW WATER INDICATOR ON SCREEN

W/ALARM AND WATER PUMP FLOW

INDICATOR
3" Y -STRAINER AT PASSENGER SIDE
FILL WITH 25' FILL HOSE

ADDITIONAL WATER TANK SIGHT
GAUGE

LIQUID FLOAT LEVEL INDICATOR

SINGLE ENGINE DUAL STAGE FAN

DIGITAL WATER PRESSURE GAUGE

FRONT JOYSTICK BOOM CONTROL

BOOM HOSE STORAGE

BOOM OUT OF POSITION MESSAGE

AND ALARM

RODDER SYSTEM ACCUMULATOR -

JACK HAMMER ON/OFF CONTROL

W/ MANUAL VALVE
3"Y -STRAINER @ WATER PUMP

MIDSHIP HANDGUN COUPLING

CHASSIS ENGINE COOLING PACKAGE

SIDE MOUNTED WATER PUMP

DIGITAL HOSE FOOTAGE COUNTER

HOSE REEL MANUAL HYD

EXTEND/RETRACT

HOSE REEL CHAIN COVER

HYDRAULIC TANK SHUTOFF VALVES

RODDER PUMP DRAIN VALVES
HYDRAULIC EXTENDING 15" -
ROTATING HOSE REEL - 1" X800'

CAPACITY

TACHOMETER/CHASSIS ENGINE

W/HOURMETER

WATER PUMP HOUR METER

PTO HOUR METER

HYDRAULIC OIL TEMP ALARM

CIRCUIT BREAKERS
LED LIGHTS- CLEARANCE- BACKUP- STOP- TAIL & TURN

TOW HOOKS- FRONT AND REAR

ELECTRONIC BACK-UP ALARM

MODULE PAINT- DUPONT IMRON

ELITE - WET ON WET
7" VACUUM PIPE PACKAGE

EMERGENCY FLARE KIT
FIRE EXTINGUISHER 5 LBS.

FIXED REAR DOOR PIPE RACK -7"
PIPE
VACTOR 2100I BODY DECALSTANDARD

VACTOR LOGOS - APPLIED
ATTACHMENT 5

OPTIONAL EQUIPMENT INCLUDED

BELLYPACK WIRELESS CONTROLS
WITH HOSE REEL CONTROLS- 2-

WAY COMMUNICATIONS- AND LCD

DISPLAY

ROTATABLE BOOM INLET HOSE
180 DEG. 10' X 15' RAPID

DEPLOYMENT BOOM

HEAVY DUTY RDB HOSE

RDB WASHOUT COUPLING

DEBRIS BODY FLUSHOUT

CENTRIFUGAL SEPARATORS
(CYCLONES)

FOLDING PIPE RACK - STREETSIDE -
7" PIPE
FOLDING PIPE RACK - CURBSIDE -7"
PIPE

REAR DOOR SPLASH SHIELD

DIGITAL DEBRIS BODY LEVEL

INDICATOR TIED TO VACUUM RELIEF
6" REAR DOOR BUTTERFLY VALVE -
3:00 POSITION
600' X 1" PIRANHA SEWER HOSE
2500 PSI IN LIEU OF STD

FAN FLUSHOUT SYSTEM

RODDER HOSE PINCH ROLLER

HIGH PRESSURE HOSE REEL

HOSE WIND GUIDE (DUAL ROLLER)-

AUTO- INDEXING

HOSE REEL WRAPPED FOR DELIVERY

HANDGUN COUPLERS- FRONT AND
REAR

D/S WATERTANK FILL

DIGITAL WATER LEVEL INDICATOR

SAFETY CONE STORAGE RACK -

POST STYLE

ADDITIONAL SAFETY CONE STORAGE

RACK - POST STYLE
WIRELESS- WATERPROOFRECHARGABLE- HANDHELD- LED
SPOTLIGHT W/12V CHARGER

LED MID-SHIP TURN SIGNALS
WORKLIGHTS (2), SELF-LEVELING

BOOM LED
WORKLIGHTS (2)- LED- REAR DOOR

WORKLIGHT- LED- OPERATORS

STATION

WORKLIGHT- LED- HOSE REEL

MANHOLE

WORKLIGHT- LED- PASSENGER SIDE

WORKLIGHT- LED- DRIVER SIDE

CAMERA SYSTEM- FRONT- REAR

AND BOTH SIDES

DOOR STRIPE MATERIAL- REFLECTIVE
TAPE

FRONT HOSE REEL TOOL STORAGE

TOOLBOX- FRONT BUMPER
MOUNTED- 16 X 12 X 18 W/(2) LED

SIDE MARKERS

LONG HANDLE TOOL STORAGE
TOOLBOX- BEHIND CAB - 14W X
36H X 96D

HYDRO EXCAVATION KIT - INCLUDES
LANCES W/ SHIELD- NOZZLESSTORAGE TRAY- AND VACUUM TUBE 80 GPM/2500 PSI JET RODDER PUMP

HANDGUN COUPLER ADDITIONAL

LIGHT PACKAGE TO INCLUDE LED

LIGHT BAR, ARROW LED TRAFFIC

ADVISOR AND STROBES
VACTOR BODY PRICE: $ 429,711.00
SOURCEWELL DISCOUNT: ($-12,891.00)
VACTOR BODY SOURCEWELL SUBTOTAL: $ 416,820.00
NON-SOURCEWELL ITEMS: $ 216,835.00
SUBTOTAL: $ 633,655.00
SALES TAX (8.750%): $ 55,444.81
TOTAL PRICE F.O.B. ARROYO GRANDE, CA: $ 689,099.81

THE PROPERTY HEREIN IS GUARANTEED BY MANUFACTURER'S WARRANTY ONLY AND SELLER MAKES NO

WARRANTY EXPRESSED OR IMPLIED, OF MERCHANTABILITY OR OTHERWISE, OR OF FITNESS FOR ANY PARTICULAR PURPOSE, THAT EXTENDS BEYOND THE ABOVE DESCRIPTION OF THE EQUIPMENT.

NOTE: PRICE ISGOODUNTIL 30 DAYS . COST INCREASESDUE TO THE ADDITION OF GOVERNMENT MANDATED

SAFETY OR ENVIRONMENTAL DEVICES INCURREDAFTER THE DATE OF THIS PROPOSAL WILL BE CHARGED TO YOU AT OUR COST. PROOF OF SUCH COSTS, IF ANY, WILL BE DOCUMENTED.

TAXES: SALES TAX APPLICABLE AT TIME OF DELIVERY WILL BE SHOWN ON OUR INVOICE. FEDERAL EXCISE TAXES, IF APPLICABLE, WILL REQUIRE PAYMENT UNLESS A PROPERLY EXECUTED EXEMPTION CERTIFICATE IS SUBMITTED.

DELIVERY: TO BE DETERMINED TERMS: NET TERMS OR APPROVED FINANCING

WE APPRECIATE THE OPPORTUNITY TO PRESENT THIS PROPOSAL AND LOOK FORWARD TO BEING OF FURTHER AND CONTINUED SERVICE.

HAAKER EQUIPMENT COMPANY ACCEPTED BY:

BY: Bryan Fox DATE:

BRYAN FOX,

SALES AREA REPRESENTATIVE

Item 9.i.

MEMORANDUM
TO: City Council
FROM: Andrew Perez, Interim Director of Community Development BY: Patrick Holub, Associate Planner
SUBJECT: Temporary Use Permit 26-004; Authorization for Sale of Beer and Wine at the 2026 Summer Concert Series, and an Application Fee Waiver; Location Heritage Square Park; Applicant – Arroyo Grande Rotary Club
DATE: June 23, 2026
RECOMMENDATION:
1) Adopt a Resolution approving Temporary Use Permit 26-004 to allow the sale of beer and wine at the 2026 Heritage Square Park Summer Concert Series and approving a waiver of fees; and
2) Find the action exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15304 of the CEQA Guidelines.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

The applicant, Arroyo Grande Rotary Club (AGRC), is requesting a waiver of application fees for the Temporary Use Permit, which totals $418.95. Due to the annual nature of the request, the staff time required to review the proposal and prepare the staff report is minimal compared to a one-time event; therefore, it is recommended that the fee waiver request be approved. Ten percent (10%) of gross revenue from beer and wine sales will be remitted to the Arroyo Grande Recreation Services Department.

BACKGROUND:

The Summer Concert Series are annual concert events in which visitors bring their own lawn chairs and blankets to congregate on the Nelson Green at Heritage Square Park, while musical performances are conducted on the Rotary Bandstand. The Summer Concert Series is a City program, which is being organized by the Recreation Services Department for a sixth year, rather than being organized by a local sponsor. While the concerts are organized by the City, the Arroyo Grande Rotary Club (AGRC) applied for a Temporary Use Permit to allow for the sale and consumption of beer and wine at the 2026 Heritage Square Park Summer Concert Series (the “Event”). The request for alcohol sales necessitates the approval of a Temporary Use Permit by the City Council. The City

Item 9.i.

City Council
Temporary Use Permit 26-004; Authorization for Sale of Beer and Wine at the 2026 Summer Concert Series, and an Application Fee Waiver; Location Heritage Square Park; Applicant – Arroyo Grande Rotary Club
June 23, 2026

Council approved permits for beer and wine sales and consumption at seven previous Summer Concert Series and no issues associated with alcohol sales were reported to the Police or Community Development Departments.

The AGRC is requesting that the City Council allow the sale of beer and wine at the Event as an additional amenity for Event patrons. The benefits identified by the applicant include increased revenue from alcohol sales beyond those realized through the sale of hot dogs, non-alcoholic drinks, and ice cream at the Event, as well as the establishment of additional promotional opportunities with new partners.

The City may approve a temporary use permit for the sale of beer and wine at the event pursuant to AGMC § 16.16.0901. The City may authorize a fee waiver through the authority found in City Council Resolution 3760, adopted and approved July 13, 2004 (Attachment 2).

Staff Advisory Committee
In accordance with conditions of approval for last year’s permit, the Staff Advisory Committee (SAC) held a debrief meeting during and at the conclusion of the Event to evaluate its success. No issues with public intoxication or public health, safety, or welfare were noted, and the Event was considered a success.

The SAC reviewed this year’s proposal on June 17, 2026. The SAC was in support of the project with the same conditions of approval included for the 2025 Event to ensure a safe and successful experience.

ANALYSIS OF ISSUES:

The Summer Concert Series begins July 4, 2026, and continues each Sunday through the summer, concluding on September 20, 2026, for a total of thirteen (13) events. Beer and wine sales would occur during each of the concerts, which are scheduled to occur from 1:00 PM – 3:00 PM, except for the concerts on July 4, which are scheduled from 11:00 AM to 4:00 PM. Sales and identification checks would be conducted by AGRC volunteers in accordance with the conditions associated with the one-day license issued by the California Department of Alcoholic Beverage Control (ABC) for each occurrence of the event. Similar to last year’s Event, the applicant is proposing not to fence off the Nelson Green, opting to use the entire lawn area for alcohol consumption during the Event.

1https://library.municode.com/ca/arroyo_grande/codes/code_of_ordinances?nodeId=CD_ORD_TIT16DE CO_CH16.16LAUSPEAP_16.16.090MIUSPEEMUS

Item 9.i.

City Council
Temporary Use Permit 26-004; Authorization for Sale of Beer and Wine at the 2026 Summer Concert Series, and an Application Fee Waiver; Location Heritage Square Park; Applicant – Arroyo Grande Rotary Club
June 23, 2026

Fencing
The need for fencing was discussed during processing of permits for Events held in previous years, and it was determined that safety and public welfare would be met without fencing around the Heritage Square Park lawn area to contain the consumption of alcohol.

In accordance with the requirements of the ABC, the public sidewalks surrounding the lawn area act as the boundary for alcohol consumption, and therefore, fencing is not required. This boundary will be enforced with appropriate signage and trained personnel provided by AGRC serving as security. Recreation Services staff will be on site during the events, will ensure the signage is posted, and will help address any monitoring issues that arise.

Attendee Identification
The Event does not require the sale of entrance tickets like other events where alcohol is consumed. Therefore, the screening process to ensure lawful consumption is necessary.

This will be closely monitored by AGRC volunteers to ensure only persons of legal drinking age will be able to buy and consume beer and wine. The AGRC will provide volunteers who have completed the Responsible Beverage Service Training Program from the ABC to prevent service of alcohol to underage or intoxicated individuals and monitor for proper identification.

Trash and Recycling
If authorized for the sale of beer and wine, the potential for increased trash and recyclable material increases. Therefore, the applicant will be required to add at least 5 more temporary/cardboard trash and recycling receptacles, with a trash liner, and place them at appropriate locations around the park. At the end of each event, the bags of material will be placed near the sidewalk so that Public Works staff can more easily load them onto a truck for disposal and recycling.

Fee Waiver
The applicant has requested that the application fees associated with the Temporary Use Permit application be waived. If approved, this waiver would result in the loss of $418.95 in revenue. Revenue from application fees is used to offset the costs of processing the application. City Council has traditionally approved this request. Although the time necessary to process the application in the first year was higher, subsequent years have resulted in less impact on personnel resources due to increased familiarity with the event.

The Community Development Director has the authority to waive the fees for TUPs that do not require City Council approval when an event is operated solely by volunteers, and one hundred percent (100%) of net revenues are donated to a charitable cause.

The Event will be staffed by AGRC volunteers and as a 501(c)3 organization, all proceeds will go towards philanthropic endeavors in the community. The Event also provides additional exposure of the City and its amenities to the public. It also brings attendees to

Item 9.i.

City Council
Temporary Use Permit 26-004; Authorization for Sale of Beer and Wine at the 2026 Summer Concert Series, and an Application Fee Waiver; Location Heritage Square Park; Applicant – Arroyo Grande Rotary Club
June 23, 2026

the Village, which can have a direct economic benefit to businesses in the area, and the City through increased sales, and therefore, increased sales tax revenue. While this exposure cannot be directly quantified, it remains beneficial. Lastly, City Council Resolution No. 3760 established the blanket waiver of application fees for similar annual events. Although this event is not identified on this list, the evolving annual nature of the event may be deemed consistent with the intent of the policy. The City Council has elected to waive the fees for this application for the previous six occurrences of the event.

ALTERNATIVES:

1. Adopt the Resolution approving Temporary Use Permit 26-004, including an authorization to waive the application fee;

2. Modify and adopt the Resolution approving Temporary Use Permit 26-004, but do not authorize waiver of the application fee such that language authorizing such fee waiver is deleted;

3. Modify as appropriate and adopt the Resolution, approving Temporary Use Permit 26-004;

4. Do not adopt the Resolution; or

5. Provide other direction to staff.

ADVANTAGES:

The Summer Concert Series is a well-attended event that holds a special place in the heart of many in the community. Beer and wine sales at the Event will generate revenue for the AGRC and the Recreation Services Department to continue their valuable contributions to the community. Additionally, the sale of beer and wine at the Event would provide attendees an additional beverage option during their time at the concerts.

DISADVANTAGES:

None identified due to the success of previous Events when beer and wine was sold.

ENVIRONMENTAL REVIEW:

In compliance with the California Environmental Quality Act (CEQA), it has been determined that this project is Categorically Exempt per Section 15304(e) of the CEQA Guidelines regarding minor temporary uses of land. Specifically, a Class 4 exemption applies to minor public or private alterations in the condition of land, water, and/or vegetation where the project does not involve removal of healthy, mature, scenic trees except for forestry and agricultural purposes. (State CEQA Guidelines, § 15304.) Further, none of the exceptions to the Class 4 exemptions set forth in State CEQA Guidelines section 15300.2 apply.

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.

Item 9.i.

City Council
Temporary Use Permit 26-004; Authorization for Sale of Beer and Wine at the 2026 Summer Concert Series, and an Application Fee Waiver; Location Heritage Square Park; Applicant – Arroyo Grande Rotary Club
June 23, 2026

ATTACHMENTS:

1. Resolution

2. City Council Resolution 3760

ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE APPROVING TEMPORARY USE PERMIT
NO. 26-004 TO ALLOW THE SALE OF BEER AND WINE AT THE
2026 SUMMER CONCERT SERIES AND APPROVING A

WAIVER OF FEES
WHEREAS, the 2026 Summer Concert Series (the “Event”) is a City program organized by the Recreation Services Department; and
WHEREAS, the Arroyo Grande Rotary Club (AGRC) have requested permission for the sale of beer and wine at the Event; and
WHEREAS, beer and wine sales organized by the AGRC during the 2018, 2019, 2021-2025 Events were successfully implemented; and
WHEREAS, the AGRC submitted a request to waive the $418.95 application fee; and WHEREAS, the purpose of the Temporary Use Permit is to ensure the Event is conducted in a manner that is compatible with the surrounding area; and WHEREAS, members of the AGRC will be responsible for monitoring identification and consumption of alcoholic beverages during the Event; and WHEREAS, the City Council finds, in accordance with the requirements of Arroyo Grande Municipal Code Section 16.16.090 and City Council Resolution 3760, after due study and deliberation, the following circumstances exist:

Temporary Use Permit Findings:

1. The operation of the requested use at the location proposed and within the time period specified will not jeopardize, endanger, or otherwise constitute a menace to the public health, safety, or general welfare.

The operation of the requested use at the location proposed and within the time periods specified will not jeopardize, endanger or constitute a menace because the AGRC will have trained personnel monitoring individuals purchasing and consuming alcohol to prevent disruptions to the public health, safety, or general welfare.

2. The proposed site is adequate in size and shape to accommodate the temporary use without material detriment to the use and enjoyment of other properties located adjacent to and in the vicinity of the site.

RESOLUTION NO.

PAGE 2
The proposed site is adequate in size and shape to accommodate the temporary use without detriment to the use and enjoyment of other properties located adjacent to and in the vicinity of the site due to the Event being monitored by AGRC personnel.

3. The proposed site is adequately served by streets or highways having sufficient width and improvements to accommodate the kind and quantity of traffic that the temporary use will or could reasonably be expected to generate.

The proposed site is adequately served by South Mason and Nelson Streets, which are of significant width and improvements to accommodate the kind and quantity of traffic that the temporary use will generate.

4. Adequate temporary parking to accommodate vehicular traffic to be generated by the use will be available either on- site or at alternate locations acceptable to the City Council.

Adequate temporary parking to accommodate vehicular traffic to be generated is available because Heritage Park is located in a commercial district that has ample public parking for visitors.

Waiver of Temporary Use Permit Fees Finding.

1. The project will be of obvious public benefit because generating revenue for the Recreation Service Department and a local non-profit organization will help those organizations carry out their respective missions which both are beneficial to the entire community.

NOW, THEREFORE, BE IT RESOLVED that:

1. All recitals above are true, correct, and incorporated herein.

2. The City Council of the City of Arroyo Grande hereby approves Temporary Use Permit 26-004, authorizing the sale of beer and wine at the 2026 Summer Concert Series as presented to the City Council on June 23, 2026, with the above findings and subject to the conditions as set forth in Exhibit "A", attached hereto and incorporated herein by this reference.

3. Environmental. In compliance with the California Environmental Quality Act (CEQA), it has been determined that this project is Categorically Exempt per Section 15304(e) of the CEQA Guidelines regarding minor temporary uses of land. Specifically, a Class 4 exemption, applies to minor public or private alterations in the condition of land, water, and/or vegetation where the project does not involve removal of healthy, mature, scenic trees except for forestry and agricultural purposes. (State CEQA Guidelines, § 15304.) Further, none of the exceptions to the Class 4 exemptions set forth in State CEQA Guidelines section 15300.2 apply.

RESOLUTION NO.

PAGE 3

4. The City Council of the City of Arroyo Grande hereby approves the fee waiver request for the Temporary Use Permit application processing fee.

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 23 rd day of June 2026.

RESOLUTION NO.

PAGE 4
_________________________________________

CAREN RAY RUSSOM, MAYOR
ATTEST:
________________________________________

JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:
________________________________________

MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:
________________________________________

ISAAC ROSEN, CITY ATTORNEY

RESOLUTION NO.

PAGE 5
E X H I B I T " A"

CONDITIONS OF APPROVAL FOR
TEMPORARY USE PERMIT NO. 26-004
This approval authorizes the sale of beer and wine from 11:00 AM – 4:00 PM on July 4, 2026, and from 1:00 – 3:00 PM for the remainder of the 2026 Summer Concert Series.

General Conditions

1. The Arroyo Grande Rotary Club (AGRC) shall ascertain and comply with all State, County and City requirements as are applicable to this project, specifically all Department of Alcoholic Beverage Control requirements.

2. The event shall occur in substantial conformance with the application and plans on file in the Community Development Department office.

3. The AGRC shall comply with all the conditions of the City Council Resolution adopted on June 23, 2026.

4. To the extent permitted by law, Applicant shall defend, indemnify and hold harmless the City of Arroyo Grande, its City Council, its officers, employees and agents (the “indemnified parties”) from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside, or void any permit or approval for this project authorized by the City, including (without limitation) reimbursing the City its actual attorney’s fees and costs in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its choice. The Applicant shall reimburse the City for any court and attorney's fees which the City may be required to pay as a result of any claim or action brought against the City related to this permit or approval. Although the Applicant is the real party in interest in an action, the City may, at its sole discretion, participate at its own expense in the defense of the action, but such participation shall not relieve the Applicant of any obligation under this condition.

5. The AGRC shall monitor alcohol sales to ensure alcoholic beverages are served to responsibly behaving persons over the age of twenty-one (21).

6. Consumption of alcoholic beverages shall be limited to the Heritage Square Park lawn area. The playground area shall be excluded from the consumption area. Appropriate signage shall be posted outlining these rules and restrictions.

7. Requests to continue alcoholic beverage sales in future years shall be made through the Temporary Use Permit process.

8. The AGRC shall utilize an easily identifiable (i.e. colored or similar) glass for the sale of alcohol to help ensure attendees are not bringing their own alcoholic beverages.

9. The Staff Advisory Committee shall conduct a debriefing following the conclusion of the first few events to evaluate the success of the event.

10. AGRC shall remit ten percent (10%) of gross revenue from beer and wine sales to the Recreation Services Department.

RESOLUTION NO.

PAGE 6

11. The AGRC shall provide a $1,000,000 comprehensive general liability insurance policy naming the City as additional insured by June 30, 2026.

12. The AGRC shall abide by all terms and conditions of the Park Use Permit issued by the Recreation Services Department.

Public Works Department Conditions

13. The AGRC is responsible for providing trash bags and enough restroom facilities to serve the event. Any supplies the Public Works Department may need to provide must be reimbursed by the AGRC.

14. The AGRC shall have an individual designated to periodically inspect the restrooms and areas around food vendors and waste containers. That individual shall be responsible for maintaining the cleanliness of these areas and gathering and disposing of all debris.

15. The AGRC shall reimburse the City for electrical costs associated with the event.

16. The AGRC shall reimburse the City for the costs of any Public Works staff services required for this event, including, but not limited to, restroom maintenance, trash, etc.

17. The AGRC shall remove any tape placed on streets, parking areas, and grass after the event.

18. The ARGC shall flag all sprinkler heads on turf and lawn areas to prevent damage. The AGRC shall reimburse the City for any damage to the irrigation system at the park.

19. Restroom facilities, barricades, and signing shall be provided by the AGRC as required.

20. The AGRC shall reimburse the City for the costs of Engineering Division services and any other City services required for this event.

Building and Life Safety Division Conditions

21. All food booths must comply with the Fire Department guidelines and must have County Health Department approval. The AGRC will inform booth applicants of Fire Department guidelines and will ensure total compliance of booth operators. The AGRC will not allow non-compliant booths to operate.

22. The project shall comply with the most recent edition of the California State Fire and Building Codes and the Uniform Building and Fire Codes as adopted by the City of Arroyo Grande. Specifically, all temporary-wiring provisions of the N.E.C. must be met.

23. Emergency access must be maintained to the satisfaction of the Building Official and Fire Chief. A detailed chart or map will be provided to Building and Life Safety Division and Fire Department for approval prior to the event, showing placement of all booths, to include actual dimensions of access pathways for fire apparatus and emergency vehicles.

24. The use of generators must be reviewed and approved by the Building Official.

25. The AGRC shall identify an individual to act as liaison with the Fire Department for the purpose of maintaining life and safety.

RESOLUTION NO.

PAGE 7
Police Department Conditions

26. All temporary "No Parking" signs shall be posted by AGRC a minimum of 48 hours prior to event setup. Delineators for no parking signage may be borrowed from the Public Works Department. Pickup must be coordinated at least 48 hours in advance by calling 805-473-5485.

RESOLUTION NO. 3760

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO

GRANDE ESTABLISHING POLICIES TO WAIVE PERMIT

APPLICATION FEES FOR C'ERTAIN ANNUAL TEMPORARY USE

PERMIT EVENTS
WHEREAS, Temporary Use Permits for certain annual events are granted application fee refunds; and
WHEREAS, these Temporary Use Permit events meet the criteria established by the City Council on September 25, 2001 for application fee waivers; and WHEREAS, staff expends a substantial amount of City time and resources submitting application fee refund requests to Administration, the City Council, and Finance; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows:

1. That a list of annual Temporary Use Permit events meeting the application fee waiver criteria be established to streamline the process of refunding permit application fees; and

2. That the initial list of Temporary Use Permit events eligible for fee waivers include the following events that have been granted a refund of permit application fees in the past: the Arroyo Valley Car Show, Christmas Caroling in the Village, Harvest Festival, March of Dimes Walk America, Nelson Green Book Fair, Strawberry Festival, Summer Concerts in the Village, and Watershed Education Fair; and

3. That Temporary Use Permit events will be added or removed from the fee waiver list only by action of the City Council.

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

AYES: Council Members Runels, Dickens, Lubin and Mayor Ferrara NOES: None
ABSENT: Council Member Costello
the foregoing Resolution was passed aRd adopted this 13th day of July 2004. w_________
ATTACHMENT 2

RESOLUTION NO. 3760
PAGE 2
ATTEST:
lLbJkUM.JLORE, DIRECTOR OF ADMINISTRATIVE SERVICES/

DEPUTY CITY CLERK
APPROVED AS TO CONTENT:

STEV ADAMS,
Z~

CITY MANAGER
APPROVED AS TO FORM:

I

RESOLUTION NO. 3760

OFFICIAL CERTIFICATION
I, KELLY WETMORE, Director of Administrative Services/Deputy City Clerk of the City of Arroyo Grande, County of San Luis Obispo, State of California, do hereby certify under penalty of pe~ury, that Resolution No. 3760 is a true, full, and correct copy of said Resolution passed and adopted at a regular meeting of the City Council of the City of Arroyo Grande on the 13th day of July, 2004.

WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 14th day of July, 2004.

KELLY Eli ORE, DIRECTOR OF ADMINISTRATIVE SERVICESI

DEPUTY CITY CLERK

Item 9.j.

MEMORANDUM
TO: City Council
FROM: Andrew Perez, Interim Director of Community Development SUBJECT: General Plan Update Progress Report – June 2026 DATE: June 23, 2026
RECOMMENDATION:

Receive and file a progress report on the Comprehensive General Plan Update.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

The financial and personnel impacts associated with this progress report are included in the budget for the Comprehensive General Plan Update.

BACKGROUND:

The last progress report was provided for the City Council on April 28, 20261. The report described the process for amending the Preliminary Public Draft General Plan and included an update on the progress made on the Environmental Impact Report and Climate Action Plan. During the study session held on May 26, 20262, staff described how the Preliminary Public Draft General Plan was revised based on Council’s direction received at the February 24, 20263 study session.

ANALYSIS OF ISSUES:

With Council’s support heard at the last study session, the Public Review Draft General Plan will be finalized for consideration of approval by Council in November. In the meantime, a final review of the document will occur to identify and correct any remaining minor grammatical and formatting mistakes.

Environmental Impact Report (EIR)
The EIR will describe and analyze the potential significant environmental impacts associated with the comprehensive update of the General Plan. Staff has completed its

1https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=19198 2https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=719929d2-2a9c-4fd6-afa3- 36c6d06c2565&lang=English&Agenda=Agenda&Item=65&Tab=attachments 3https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=661c1650-22a5-4167-91df42e815675b95&lang=English&Agenda=Agenda&Item=35&Tab=attachments

Item 9.j.

City Council
General Plan Update Progress Report – June 2026
June 23, 2026

initial review of the internal draft EIR. The internal draft is being revised to address staff comments and edits to create the Draft EIR, which will be released in July. State law requires a 45-day period for the public to review and provide public comment on the Draft EIR. The City will need to respond to all comments received during that period and include those comments and responses in the Final EIR that will be considered by Council for certification.

Climate Action Plan (CAP)
Staff has also completed an internal review of the draft implementation measures for the CAP. The implementation measures will be the foundation of the CAP and were formulated based on comprehensive analyses of existing conditions and the Greenhouse Gas (GHG) Emissions Inventory and Forecast. These measures account for feedback received from City staff and community obtained from engagement with the public at Farmer’s Market and the Thursday Night Music in the Park event at Rancho Grande Park on June 11, 2026. The measures and supporting actions are intended to be achievable and implementable that help advance the City’s efforts to reduce GHG emissions in alignment with California’s climate targets.

ALTERNATIVES:

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

1. Receive and file this progress report on the Comprehensive General Plan Update; or

2. Provide other direction to staff.

ADVANTAGES:

Regular updates to the City Council will inform decision-makers and the community on the status of the project.

DISADVANTAGES:

None identified.

ENVIRONMENTAL REVIEW:

No environmental review is required to receive and file this progress report on the General Plan Update because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, Cal.

Code Regs., tit. 14, §§ 15060, subd. (c)(2)-(3), 15378.) 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.

Item 10.a.

MEMORANDUM
TO: City Council
FROM: Shannon Sweeney, Acting Public Works Director/City Engineer BY: Theresa Wren, Capital Improvement Projects Manager
SUBJECT: Directing the Levy of Annual Assessments for Fiscal Year 2026-27 DATE: June 23, 2026
RECOMMENDATION:
1) Conduct a public hearing for the levy and collection of assessments for the Parkside Village Assessment District, Grace Lane Assessment District, and Arroyo Grande Landscaping and Lighting Assessment District No. 1 within Tract 1769; 2) Adopt Resolutions confirming the diagram and assessments, and directing the levy of the annual assessment related to the Parkside Village Assessment District, the Grace Lane Assessment District and the Arroyo Grande Landscaping and Lighting Assessment District No. 1 within Tract 1769, pursuant to the Landscaping and Lighting Act of 1972 (Streets and Highways Code Sections 22500 et. seq.) for Fiscal Year 2026-27; and 3) Find the proposed action is exempt from CEQA under State CEQA Guidelines § 15302 and State CEQA Guidelines § 15378(b)(5).

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

By adopting the Resolutions, $56,298 will be collected for Fiscal Year (FY) 2026-27 for the three assessment districts to provide landscaping and other specified maintenance.

The assessments are placed on the affected property owner's property tax bill each year.

No assessments were increased.

BACKGROUND:

At the May 26, 20261 City Council Meeting, the City Council approved the Engineer's Reports and adopted Resolutions declaring its intention to levy and collect assessments for the Parkside Village Assessment District, Grace Lane Assessment District, and the Arroyo Grande Landscaping and Lighting Assessment District No. 1 within Tract No. 1769, and set a public hearing for June 23, 2026. The anticipated FY 26-27 annual assessments are as follows:

1https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=719929d2-2a9c-4fd6-afa3- 36c6d06c2565&lang=English&Agenda=Agenda&Item=51&Tab=attachments

Item 10.a.

City Council
Directing the Levy of Annual Assessments for Fiscal Year 2026-27 June 23, 2026

 Parkside Village (Tract 2310) Assessment District
13 parcels at $446 per parcel - $ 5,798
52 parcels at $734 per parcel - $38,168
TOTAL: 65 parcels total $43,966 annually
 Grace Lane (Tract 2236) Assessment District
15 parcels at $460 per parcel - $6,900
4 parcels at $608 per parcel - $2,432
TOTAL: 19 parcels total $9,332 annually
 Landscaping and Lighting Assessment District No. 1, within Tract 1769 TOTAL: 30 parcels at $100 per parcel total $3,000 annually ANALYSIS OF ISSUES:

The California Streets and Highways Code Sections 22500 et seq. (Landscaping and Lighting Act of 1972) (Act), establishes one of the processes by which local governmental agencies form assessment districts to finance the costs and expenses of landscaping and lighting public areas. The final process includes a public hearing, which allows all interested parties to hear and be heard. After the public hearing, the City Council may adopt Resolutions (Attachments 1, 2, and 3) confirming the assessments, which constitute the levy of the assessments for the 2026-27 fiscal year. Upon fulfilling these requirements, the City must submit the Resolutions to the County of San Luis Obispo for inclusion of the assessments on the FY 2026-27 property tax roll. The assessments collected for each assessment district fund items such as monthly landscape maintenance, annual fire suppression/fuel reduction, savings for anticipated drainage structure maintenance and improvements, and general landscaping cleanup projects, as needed. Each associated Engineer's Report provides a description of improvements.

ALTERNATIVES:

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

1. Approve staff recommendations;

2. Request changes or clarification to the Resolutions and approve them as modified; or

3. Provide other direction to staff.

ADVANTAGES:

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

Item 10.a.

City Council
Directing the Levy of Annual Assessments for Fiscal Year 2026-27 June 23, 2026

DISADVANTAGES:

No disadvantages for the proposed actions have been identified.

ENVIRONMENTAL REVIEW:

Adoption of the Resolutions to levy and collect annual assessments is not a project subject to the California Environmental Quality Act (CEQA) because it has no potential to result in either a direct, or reasonably foreseeable, indirect, physical change in the environment. (State CEQA Guidelines,§§ 15060, subd. (c)(2)-(3), 15378.) The actions merely constitute an administrative activity of the City.

Alternatively, the adoption of resolutions to levy and collect annual assessments is exempt from CEQA on that basis that it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. (State CEQA Guidelines, § 15061, subd. (b)(3).) The levy and collection of assessments applies to maintenance of existing improvements and does not result in new construction or physical change in 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. The Resolutions adopted by the City Council on May 26, 2026, declaring its intention to levy and collect annual assessments for all three Assessment Districts in Fiscal Year 2026-27 were published in The New Times in accordance with the Act providing notice of the public hearing scheduled this evening.

ATTACHMENTS:

1. Resolution - Parkside Village Assessment District

2. Resolution - Grace Lane Assessment District

3. Resolution - Arroyo Grande Landscaping and Lighting District No. 1, Tract 1769

ATTACHMENT 1
RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE CONFIRMING THE DIAGRAM AND

ASSESSMENTS, AND DIRECTING THE LEVY OF THE

ANNUAL ASSESSMENTS RELATED TO THE PARKSIDE

VILLAGE ASSESSMENT DISTRICT PURSUANT TO THE
LANDSCAPING AND LIGHTING ACT OF 1972 (STREETS
AND HIGHWAYS CODE SECTIONS 22500 ET. SEQ.) FOR
FISCAL YEAR 2026-2027
WHEREAS, on November 8, 2005, the City Council of the City of Arroyo Grande adopted Resolution No. 3888 ordering the formation of the Parkside Village Assessment District under Part 2 of Division 15 of the California Streets and Highways Code 22500- 22679 (Landscaping and Lighting Act of 1972), which allows local governmental agencies to form assessment districts for the purpose of financing the costs and expenses of landscaping and lighting public areas; and
WHEREAS, the City Council, at its meeting of May 26, 2026, approved Resolution No. 5362 approving the Engineer's Report and declaring its intention to levy and collect annual assessments for the Parkside Village Assessment District for Fiscal Year 2026- 2027 and set a public hearing for June 23, 2026, for the Parkside Village Assessment District; and
WHEREAS, notice was duly published in a newspaper of general circulation at least 10 days prior to the date of the public hearing; and
WHEREAS, a public hearing to levy the annual assessment of the Parkside Village Assessment District was held June 23, 2026, at the City Council Chambers, 215 E.

Branch Street, Arroyo Grande, California, 93420 and the City Council took public testimony from all interested persons as to the levy of the annual assessment for the Parkside Village Assessment District; and
WHEREAS, pursuant to the Landscaping and Lighting Act of 1972, the City Council is authorized to levy this assessment; and
WHEREAS, pursuant to Streets and Highways Code Section 22631 and 22646, the assessments herein confirmed by the City Council shall be collected on the secured property tax roll and collected at the same time and in the same manner as County taxes are collected.

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

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

2. The City Council, having been informed with the Engineer's Report, supporting

RESOLUTION NO.

PAGE 2
documentation, and presentations from staff and conducted the public hearing hereby confirms the diagram and the assessments for Fiscal Year 2026-2027.

3. The annual levy for the maintenance of Parkside Village Assessment District, located as shown in the approved Engineer's Report for the Parkside Village Assessment District is hereby ordered and the assessment of $446 or $734 per parcel for the Fiscal Year 2026-2027 as indicated on Exhibit "A" attached hereto and incorporated herein by this reference, is hereby confirmed.

4. Adoption of this Resolution shall constitute the levy of an assessment for Fiscal Year 2026-2027 and the City Clerk shall file the diagram and assessments with the County of San Luis Obispo Auditor.

5. Adoption of this Resolution to levy and collect annual assessments is not a project subject to the California Environmental Quality Act ("CEQA") because it has no potential to result in either a direct, or reasonably foreseeable, indirect, physical change in the environment. (State CEQA Guidelines,§§ 15060, subd. (b)(2)-(3), 15378. The actions merely constitute an administrative activity of the City. Alternatively, the adoption of resolutions to levy and collect annual assessments is exempt from CEQA on that basis that it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. (State CEQA Guidelines, § 15061, subd. (b)(3).) The levy and collection of assessment fees applies to maintenance of existing improvements and does not result in new construction or physical change in the environment.

6. This Resolution shall be effective immediately upon adoption.

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

AYES:

NOES:

ABSENT:
the foregoing Resolution was passed and adopted this 23 rd day of June 2026.

RESOLUTION NO.

PAGE 3

CAREN RAY RUSSOM, MAYOR
ATTEST:

JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:

MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:

ISAAC ROSEN, CITY ATTORNEY

RESOLUTION NO.

PAGE 4
EXHIBIT “A”

SAN LUIS OBISPO COUNTY AUDITOR-CONTROLLER
PARKSIDE VILLAGE TRACT 2310 ASSESSMENTS
FUND NO. 1893
FOR TAX ROLL YEAR 2026-27
LOT #

ASSESSOR'S PARCEL

NUMBER (APN) CHARGE
1 077255002 $ 446.00
2 077255003 $ 446.00
3 077255004 $ 446.00
4 077255005 $ 446.00
5 077255006 $ 446.00
6 077255007 $ 446.00
7 077255008 $ 446.00
8 077255009 $ 446.00
9 077255010 $ 446.00
10 077255011 $ 446.00
11 077255012 $ 446.00
12 077255013 $ 446.00
13 077255014 $ 446.00
14 077255015 $ 734.00
15 077255016 $ 734.00
16 077255017 $ 734.00
17 077255018 $ 734.00
18 077255019 $ 734.00
19 077255020 $ 734.00
20 077255021 $ 734.00
21 077255022 $ 734.00
22 077255023 $ 734.00
23 077255024 $ 734.00
26 077255027 $ 734.00
27 077255028 $ 734.00
28 077255029 $ 734.00
29 077255030 $ 734.00
30 077255031 $ 734.00
31 077255032 $ 734.00
32 077255033 $ 734.00
33 077255034 $ 734.00
34 077255035 $ 734.00
35 077255036 $ 734.00

RESOLUTION NO.

PAGE 5
LOT #

ASSESSOR'S PARCEL

NUMBER (APN) CHARGE
36 077255037 $ 734.00
37 077255038 $ 734.00
38 077255039 $ 734.00
39 077255040 $ 734.00
40 077255041 $ 734.00
41 077255042 $ 734.00
42 077255043 $ 734.00
43 077255044 $ 734.00
44 077255045 $ 734.00
45 077255046 $ 734.00
46 077255047 $ 734.00
47 077255048 $ 734.00
48 077255049 $ 734.00
49 077255050 $ 734.00
50 077255051 $ 734.00
51 077255052 $ 734.00
52 077255053 $ 734.00
53 077255054 $ 734.00
54 077255055 $ 734.00
55 077255056 $ 734.00
56 077255057 $ 734.00
57 077255058 $ 734.00
58 077255059 $ 734.00
59 077255060 $ 734.00
60 077255061 $ 734.00
61 077255062 $ 734.00
62 077255063 $ 734.00
63 077255064 $ 734.00
64 077255065 $ 734.00
65 077255066 $ 734.00
66 077255067 $ 734.00
67 077255068 $ 734.00
TOTAL $43,966.00

ATTACHMENT 2
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF ARROYO GRANDE CONFIRMING THE DIAGRAM

AND ASSESSMENTS, AND DIRECTING THE LEVY OF

THE ANNUAL ASSESSMENTS RELATED TO THE

GRACE LANE ASSESSMENT DISTRICT PURSUANT TO
THE LANDSCAPING AND LIGHTING ACT OF 1972
(STREETS AND HIGHWAYS CODE SECTIONS 22500 ET.

SEQ.) FOR FISCAL YEAR 2026-2027
WHEREAS, on November 28, 2006, the City Council of the City of Arroyo Grande adopted Resolution No. 3976 ordering the formation of the Grace Lane Assessment District under Part 2 of Division 15 of the California Streets and Highways Code 22500- 22679 (Landscaping and Lighting Act of 1972), which allows local governmental agencies to form assessment districts for the purpose of financing the costs and expenses of landscaping and lighting public areas; and
WHEREAS, the City Council, at its meeting of May 26, 2026, approved Resolution No. 5363 approving the Engineer's Report and declaring its intention to levy and collect annual assessments for the Grace Lane Assessment District for Fiscal Year 2026-2027 and set a public hearing for June 23, 2026, for the Grace Lane Assessment District; and WHEREAS, notice was duly published in a newspaper of general circulation at least 10 days prior to the date of the public hearing; and
WHEREAS, a public hearing to levy the annual assessment of the Grace Lane Assessment District was held June 23, 2026, at the City Council Chambers, 215 E.

Branch Street, Arroyo Grande, California, 93420 and the City Council took public testimony from all interested persons as to the levy of the annual assessment for the Grace Lane Assessment District; and
WHEREAS, pursuant to the Landscaping and Lighting Act of 1972, the City Council is authorized to levy this assessment; and
WHEREAS, pursuant to Streets and Highways Code Section 22646, the assessments herein confirmed by the City Council shall be collected on the secured property tax roll and collected at the same time and in the same manner as County taxes are collected.

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

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

2. The City Council, having been informed with the Engineer's Report, supporting documentation, and presentations from staff and conducted the public hearing

RESOLUTION NO.

PAGE 2
hereby confirms the diagram and the assessments for Fiscal Year 2026-2027.

3. The annual levy for the maintenance of Grace Lane Assessment District, located as shown in the approved Engineer's Report for the Grace Lane Assessment District is hereby ordered and the assessment of $460 for lots 1 through 15 and $608 for lots 16 through 19 for the Fiscal Year 2026-2027 as indicated on Exhibit "A" attached hereto and incorporated herein by this reference, is hereby confirmed.

4. Adoption of this Resolution shall constitute the levy of an assessment for Fiscal Year 2026-2027 and the City Clerk shall file the diagram and assessments with the County of San Luis Obispo Auditor.

5. Adoption of this Resolution to levy and collect annual assessments is not a project subject to the California Environmental Quality Act ("CEQA") because it has no potential to result in either a direct, or reasonably foreseeable, indirect, physical change in the environment. (State CEQA Guidelines,§§ 15060, subd. (b)(2)-(3), 15378. The actions merely constitute an administrative activity of the City. Alternatively, the adoption of resolutions to levy and collect annual assessments is exempt from CEQA on that basis that it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. (State CEQA Guidelines, § 15061, subd. (b)(3).) The levy and collection of assessment fees applies to maintenance of existing improvements and does not result in new construction or physical change in the environment.

6. This Resolution shall take effect immediately upon adoption.

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

AYES:

NOES:

ABSENT:

The foregoing Resolution was passed and adopted this 23rd day of June 2026.

RESOLUTION NO.

PAGE 3

CAREN RAY RUSSOM, MAYOR
ATTEST:

JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:

MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:

ISAAC ROSEN, CITY ATTORNEY

RESOLUTION NO.

PAGE 4
EXHIBIT “A”

SAN LUIS OBISPO COUNTY AUDITOR-CONTROLLER
GRACE LANE TRACT 2236 ASSESSMENTS
FUND NO. 1895
FOR TAX ROLL YEAR 2026-27
LOT # ASSESSOR'S PARCEL

NUMBER (APN) CHARGE
1 007019002 $ 460.00
2 007019003 $ 460.00
3 007019004 $ 460.00
4 007019005 $ 460.00
5 007019006 $ 460.00
6 007019007 $ 460.00
7 007019008 $ 460.00
8 007019035 $ 460.00
9 007019036 $ 460.00
10 007019037 $ 460.00
11 007019012 $ 460.00
12 007019014 $ 460.00
13 007019015 $ 460.00
14 007019016 $ 460.00
15 007019017 $ 460.00
16 007019034 $ 608.00
17 007019033 $ 608.00
18 007019025 $ 608.00
19 007019030 $ 608.00
TOTAL $ 9,332.00

ATTACHMENT 3
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF ARROYO GRANDE CONFIRMING THE DIAGRAM

AND ASSESSMENTS, AND DIRECTING THE LEVY OF

THE ANNUAL ASSESSMENTS RELATED TO THE

ARROYO GRANDE LANDSCAPING AND LIGHTING
ASSESSMENT DISTRICT NO. 1, WITHIN TRACT 1769,

PURSUANT TO THE LANDSCAPING AND LIGHTING ACT
OF 1972 (STREETS AND HIGHWAYS CODE SECTIONS
22500 ET. SEQ.) FOR FISCAL YEAR 2026-2027
WHEREAS, on June 9, 1992, the City Council of the City of Arroyo Grande adopted Resolution No. 2932 ordering the formation of the Arroyo Grande Landscaping and Lighting Assessment District No. 1 ("District"), within Tract 1769 under Part 2 of Division 15 of the California Streets and Highways Code 22500-22679 (Landscape and Lighting Act of 1972), which allows local governmental agencies to form assessment districts for the purpose of financing the costs and expenses of landscaping and lighting public areas; and
WHEREAS, the City Council, at its meeting of May 26, 2026, approved Resolution No. 5364 approving the Engineer's Report and declaring its intention to levy and collect annual assessments for the District for Fiscal Year 2026-2027 and set a public hearing for June 23, 2026, for the District; and
WHEREAS, notice was duly published in a newspaper of general circulation at least 10 days prior to the date of the public hearing; and
WHEREAS, a public hearing to levy the annual assessment of the District was held June 23, 2026, at the City Council Chambers, 215 E. Branch Street, Arroyo Grande, California, 93420 and the City Council took public testimony from all interested persons as to the levy of the annual assessment for the District; and WHEREAS, pursuant to the Landscaping and Lighting Act of 1972, the City Council is authorized to levy this assessment; and
WHEREAS, pursuant to Streets and Highways Code Section 22631 and 22646, the assessments herein confirmed by the City Council shall be collected on the secured tax roll and collected at the same time and in the same manner as County taxes are collected.

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

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

RESOLUTION NO.

PAGE 2

2. The City Council, having been informed with the Engineer's Report, supporting documentation, and presentations from staff and conducted the public hearing hereby confirms the diagram and the assessments for Fiscal Year 2025-2026.

3. The annual levy for the maintenance of District, located as shown in the approved Engineer's Report for the District is hereby ordered and the assessment of $100 per lot for Lots 1 through 30 for Fiscal Year 2026-27 as indicated on Exhibit "A" attached hereto and incorporated herein by this reference, is hereby confirmed.

4. Adoption of this Resolution shall constitute the levy of an assessment for Fiscal Year 2026-2027 and the City Clerk shall file the diagram and assessments with the County of San Luis Obispo Auditor.

5. Adoption of this Resolution to levy and collect annual assessments is not a project subject to the California Environmental Quality Act ("CEQA") because it has no potential to result in either a direct, or reasonably foreseeable, indirect, physical change in the environment. (State CEQA Guidelines,§§ 15060, subd. (b)(2)-(3), 15378. The actions merely constitute an administrative activity of the City. Alternatively, the adoption of resolutions to levy and collect annual assessments is exempt from CEQA on that basis that it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. (State CEQA Guidelines, § 15061, subd. (b)(3).) The levy and collection of assessment fees applies to maintenance of existing improvements and does not result in new construction or physical change in the environment.

6. This Resolution shall take effect immediately upon adoption.

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

AYES:

NOES:

ABSENT:

The foregoing Resolution was passed and adopted this 23rd day of June 2026.

RESOLUTION NO.

PAGE 3

CAREN RAY RUSSOM, MAYOR
ATTEST:

JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:

MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:

ISAAC ROSEN, CITY ATTORNEY

RESOLUTION NO.

PAGE 4
EXHIBIT “A”

SAN LUIS OBISPO COUNTY AUDITOR-CONTROLLER
PARKVIEW TRACT 1769 ASSESSMENT DISTRICT NO 1
FUND NO. 1765
FOR TAX ROLL YEAR 2026-27
LOT # ASSESSOR'S PARCEL

NUMBER (APN) CHARGE
1 077253001 $ 100.00
2 077253002 $ 100.00
3 077253003 $ 100.00
4 077253004 $ 100.00
5 077253005 $ 100.00
6 077253006 $ 100.00
7 077253007 $ 100.00
8 077253008 $ 100.00
9 077253009 $ 100.00
10 077253010 $ 100.00
11 077253011 $ 100.00
12 077253012 $ 100.00
13 077253013 $ 100.00
14 077253014 $ 100.00
15 077253015 $ 100.00
16 077253016 $ 100.00
17 077253017 $ 100.00
18 077253018 $ 100.00
19 077253019 $ 100.00
20 077253020 $ 100.00
21 077253021 $ 100.00
22 077253022 $ 100.00
23 077253023 $ 100.00
24 077253024 $ 100.00
25 077253025 $ 100.00
26 077253026 $ 100.00
27 077253027 $ 100.00
28 077253028 $ 100.00
29 077253029 $ 100.00
30 077253030 $ 100.00
TOTAL: $ 3,000.00

Item 11.a.

MEMORANDUM
TO: City Council
FROM: Andrew Perez, Interim Director of Community Development SUBJECT: Pre-application 26-001; Canyon Crest Off-Site Wastewater Treatment DATE: June 23, 2026
RECOMMENDATION:
1) Confirm informal support for the applicant’s proposal to consolidate wastewater service from the Canyon Crest HOA to the South San Luis Obispo County Sanitation District’s treatment facility, which would require the City to approve an annexation agreement to coordinate infrastructure use, responsibilities, and service delivery prior to LAFCO approval of annexation; and
2) Find that the recommended actions are not subject to the California Environmental Quality Act (“CEQA”) because these efforts have no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060 (c)(2) and (3), 15378).

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

No financial impact is associated with the pre-application discussion. Financial implications associated with the wastewater consolidation project are described in the report.

BACKGROUND:

The Canyon Crest homeowners association (Canyon Crest HOA) serves a 55-lot subdivision located between Stagecoach Road and Huasna Road, outside city limits. The subdivision is comprised of 54 single-family residential lots and the final lot dedicated for the leach field that supports a wastewater system for the tract. The Canyon Crest Mutual Benefit Water Company (the “Water Company”) operates the wastewater treatment system that was permitted under regulatory standards in effect at the time of development approval by the County of San Luis Obispo. Individual septic tanks collect wastewater from each residential lot, which is then discharged into the community leach field.

On October 14, 2022, the Central Coast Regional Water Quality Control Board (RWQCB) issued the Water Company a Notice of Violation (NOV) because the septic system discharges are resulting in elevated nitrate concentrations in the underlying groundwater.

The NOV notes that elevated nitrates in groundwater present a public health and

Item 11.a.

City Council
Pre-application 26-001; Canyon Crest Off-Site Wastewater Treatment June 23, 2026

environmental concern, as groundwater impacts extend beyond individual parcels and affect surrounding water resources. In response to the NOV, the Water Company explored two potential solutions:
 Building an on-site wastewater treatment facility to serve the 54 residential units; or
 Consolidating wastewater and conveying it to the South San Luis Obispo County Sanitation District (the “Sanitation District”) treatment plant.

Consolidation of the wastewater for conveyance to the Sanitation District for treatment has been deemed the preferred solution by the applicant, the Canyon Crest HOA. The HOA prepared a project description which is included as Attachment 1. The applicant prepared a cost analysis for both the initial startup costs and the ongoing operation costs for the two solutions (Attachment 2). Costs for the wastewater consolidation solution will require an initial investment of $700,000-$1.0 million with annual operation costs of approximately $50,000-$60,000. Establishing an on-site wastewater treatment facility will cost approximately $1.5-2.0 million, plus an additional $83,000-$108,000 annually for operations. The RWQCB supports wastewater consolidation and off-site treatment to prevent further degradation of the groundwater.

The purpose of the pre-application discussion is to provide the City Council with an opportunity to provide comments to the applicant regarding the proposed solution. If the Council conceptually supports wastewater consolidation, the applicant would embark on additional technical, engineering, and capacity analyses to further evaluate the feasibility of the project and prepare a formal application.

ANALYSIS OF ISSUES:

Project Description
To abate the violations, the 54 homes would discontinue on-site wastewater treatment and disposal and instead consolidate wastewater service for treatment by the Sanitation District. This would be accomplished by the installation of approximately 1,000 feet of 8- inch sewer pipe between the connection point in the Canyon Crest development and the existing manhole located on Huasna Road, near Pearwood Drive, to convey wastewater through the City’s sewer infrastructure to the Sanitation District treatment plant.

Attachment 3 shows the points of connection and approximate location of the new 8-inch sewer line. Maintenance of the new sewer main extension between Canyon Crest and the point of connection on Huasna Road would be the responsibility of the Water Company. Those specific terms and maintenance responsibilities would be described in an annexation agreement and plan for service.

The annexation agreement would involve three separate parties, subject to San Luis Obispo Local Agency Formation Commission (LAFCO) approval:
 Canyon Crest HOA;
 Sanitation District; and
 City of Arroyo Grande.

Item 11.a.

City Council
Pre-application 26-001; Canyon Crest Off-Site Wastewater Treatment June 23, 2026

The Sanitation District has already confirmed that the treatment plant has capacity to treat the wastewater volumes Canyon Crest is anticipated to produce. However, to serve as the primary service provider for wastewater treatment, Canyon Crest would need to be annexed into the Sanitation District’s service area. The City would need to approve a three-party annexation agreement discussed above in order for such annexation to occur.

Attachment 4 shows the location of the Canyon Crest subdivision in relation to the boundary of the service area. Annexation, in this context would only consist of a change to the boundary of the service area of the Sanitation District and would not involve annexation of Canyon Crest subdivision into the City. The application for annexation would specify that a maximum of 59 parcels would be annexed into the service area. This number consists of the 54 existing residential parcels and up to five additional parcels. If the wastewater consolidation is accomplished, Canyon Crest HOA intends to sell the existing leach field parcel to a third-party developer for the construction of up to five new homes after site remediation to help offset the costs associated with this project.

LAFCO is authorized to approve or deny the annexation request by Canyon Crest into the Sanitation District service area. LAFCO is a regional planning and regulatory agency with county-wide jurisdiction established by State Law to encourage orderly and efficient provision of governmental services, such as water, sewer, and fire protection. This responsibility includes reviewing and approving proposed agency jurisdictional boundary changes, including annexations and detachments of territory to and/or from cities and special districts, incorporations of new cities, formations of new special districts, and consolidations, mergers, and dissolutions of existing districts. City staff have met with LAFCO on multiple occasions to understand the procedure for annexation of the Canyon Crest subdivision into the Sanitation District. That process is described in Attachment 5.

The process for annexation begins with the three parties—the Canyon Crest HOA, the Sanitation District, and the City—negotiating a Memorandum of Understanding (MOU) to establish the framework for the annexation agreement. The MOU would identify items that need to be mutually agreed upon and included in the annexation agreement. These items include infrastructure use, maintenance responsibilities, service delivery, connection and service fees, and any other items deemed necessary by the parties. Upon concurrence of the framework, the applicant would prepare and submit the application for annexation to LAFCO.

The City’s role in the proposed arrangement includes allowing pass-through of wastewater effluent to the Sanitation District treatment facility. This would also require the City to provide billing and administration for the new customer wastewater account.

Canyon Crest receives water from the Oceano Community Service District (OCSD) that is wheeled through City water system infrastructure. Under this existing arrangement, the City tracks water usage and sends the bill to OCSD. If the City were to be supportive of wastewater consolidation, the City would receive applicable connection and capacity fees. The project would also make a financial contribution towards an upgrade to Lift Station No. 3, which is located in the proximity of Huasna Road and Callie Court. The

Item 11.a.

City Council
Pre-application 26-001; Canyon Crest Off-Site Wastewater Treatment June 23, 2026

upgrade would include the installation of a generator to improve system reliability. The exact amount of fees will be determined during the MOU negotiations.

Should the Council be conceptually supportive of the annexation, staff negotiation of the MOU would center on items that limit City expense and protection of the system existing residents have paid to maintain, including requiring the Water Company to maintain the newly installed sewer pipes, should maintenance be required.

ALTERNATIVES:

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

1. Discuss applicant’s proposal to engage in further technical studies and analysis for the preparation of an application for annexation to the Sanitation District service area for wastewater consolidation, and following such study and analysis, the applicant would return to City for formal approval of an annexation agreement between the City, Sanitation District, and Canyon Crest;

2. Provide other direction to staff.

ADVANTAGES:

The City’s participation in the wastewater consolidation project will allow for the abatement of a public health and environmental concern that potentially impacts groundwater beyond this development. The City would also receive development impact fees for the new residences that will use City infrastructure, as well as a contribution to the upgrades to Lift Station No. 3.

DISADVANTAGES:

Canyon Crest would become a new customer and will require staff time for meter reading and billing on a bi-monthly basis, however the sewer fees collected would offset those costs. Additionally, concerns have been expressed regarding continued urban development into unincorporated areas as a result of this expansion of infrastructure.

ENVIRONMENTAL REVIEW:

The pre-application discussion will not result in the approval of a project. Therefore, it is not subject to the California Environmental Quality Act (“CEQA”) because these efforts have no potential to result in either a direct, or reasonably foreseeable indirect, physical change in 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. Project Description

2. Cost Comparison Analysis

3. Sewer Line Extension Exhibit

Item 11.a.

City Council
Pre-application 26-001; Canyon Crest Off-Site Wastewater Treatment June 23, 2026

4. Sanitation District Service Area

5. LAFCO Annexation Process Overview

Canyon Crest Wastewater Consolidation
The Canyon Crest community is an existing residential development consisting of 54 single-family homes served by a privately operated on-site wastewater treatment and disposal system. A 55th parcel within the community is currently dedicated exclusively to use as a leach field supporting wastewater disposal for the existing residences. No residential development currently exists on that parcel.

The on-site wastewater system was permitted under regulatory standards in effect at the time of development in the 1990s. Since that time, environmental regulations and groundwater protection requirements have become more stringent. The Central Coast Regional Water Quality Control Board has issued a Notice of Violation (NOV) related to elevated nitrate concentrations, confirming that the existing wastewater treatment and disposal system no longer meets current water quality and permitting requirements. Elevated nitrates in groundwater present a public health and environmental concern, as groundwater impacts extend beyond individual parcels and affect surrounding water resources.

The Regional Water Quality Control Board has expressed strong support for wastewater consolidation as the most viable and protective solution to address the NOV and prevent ongoing groundwater degradation. Achieving compliance is mandatory and time-sensitive, and continued reliance on on-site treatment is no longer a feasible long-term option for this community.

The proposed project would discontinue on-site wastewater treatment and disposal and instead consolidate wastewater service by conveying flows from Canyon Crest to existing public sewer infrastructure. Wastewater would be conveyed through the City of Arroyo Grande’s sewer system for conveyance purposes only and treated by the South San Luis Obispo County Sanitation District, which has confirmed available treatment capacity.

Upon connection to public sewer service, the existing leach field would be permanently abandoned in accordance with regulatory requirements, eliminating a known source of groundwater risk. To help offset the substantial costs associated with achieving environmental compliance, the leach field parcel may be sold to a third-party developer for the construction of up to five (5) single-family homes, subject to all applicable land use approvals. If approved, the wastewater consolidation request would therefore serve a maximum of 59 homes (the existing 54 residences plus up to 5 additional units). No additional development or intensification beyond this limited scope is proposed.

The fundamental purpose of this project is environmental and public health protection, not growth, increased density, or profit. This request is distinct from surrounding properties and neighboring communities because it is driven by a documented State regulatory violation and the need to remediate groundwater impacts affecting the broader area, rather than by development objectives.

ATTACHMENT 1

Water service for Canyon Crest has already been addressed through a separate Outside User Agreement with Oceano Community Services District, with water wheeled through the City of Arroyo Grande. This project addresses the second and remaining component of the community’s infrastructure compliance challenge by resolving wastewater service in a manner consistent with current environmental standards.

The project does not request City of Arroyo Grande water service, since it was previously obtained as referenced above, and no annexation into the City is requested or required. Canyon Crest Mutual Benefit Water Company would remain the single customer of record for wastewater service, avoiding the creation of multiple individual sewer accounts. Utility management would comply with City standards and existing methods. Meter-reading data would be provided to the City six (6) times per year, or more often if requested, and billing would follow the City’s normal billing process and be performed by City of Arroyo Grande Public Works. Operations and maintenance of on-site components would be provided by Nviro, a third-party contracted provider.

Wastewater flows from Canyon Crest are relatively low, estimated at approximately 8,000 gallons per day, representing less than one percent of the City’s average daily wastewater flow. All residences are served by individual septic tanks, resulting in pre-treated wastewater with relatively low solids and organic strength.

The project would be fully funded by the applicant, including all planning, engineering, permitting, construction, and City staff time associated with review and implementation. In addition, the project proposes a capital contribution toward upgrades to Lift Station #3, including installation of a generator, improving system reliability and emergency preparedness in a manner consistent with City-identified infrastructure needs. Applicable impact and connection fees would be paid.

This pre-application review is requested to obtain the City of Arroyo Grande’s concurrence with the proposed approach and to authorize initiation of the technical, engineering, and capacity analyses necessary to fully evaluate the wastewater conveyance and consolidation. The purpose of this meeting is to confirm that the project framework is appropriate for further study and interagency coordination, not to seek approval at this stage.

Following completion of the required analyses and technical review, the project would return to the City for formal consideration, at which time the City would evaluate the complete record and determine whether to approve or deny the proposed wastewater conveyance arrangement.

Canyon Crest Annexation Cost Analysis
Option A: On Site Treatment Option B: City Sewer Connection

1. Gravity sewer: Install 2,000 linear feet of 8" PVC
gravity sewer with 3 new sewer manholes and two
system connnections to City (see display)
N/A $500k to $700k

2. Wastewater treatment plant for 50% nitrogen
removal, 0.02 mgd, equipment only assuming least cost
alternative (Orenco Systems)
$700k to $1M N/A

3. Wastewater treatment plant installation and
commissioning
$800k to $1M N/A

4. Future treatment upgrade to achieve less than 10
mg/L total nitrogen
Undefined risk factor not included,
but could exceed $1M N/A

5. City sewer impact fees for 54 homes, assuming $1850
per home ($0.59 per sq ft) for City and $2475 for

SSLOCSD
N/A $200k to $300k
Total Estimated Capital Cost $1.5M to $2.0M $0.7M to $1.0M Operating/Life Cycle Item Description Option A: On Site Treatment Option B: City Sewer Connection

1. City sewer fees per year assuming $48/mo SSLOCSD,
$30/mo City N/A $50k to $60k per year

2. Contract operations for wastewater treatment
facility, including power and consumables $50k to $60k N/A

3. Regional Board annual fees $9k to $12k N/A

4. Lab and sampling fees $4k to $6k N/A

5. Minimum recommended capital reserve for
equipment replacement $20k to $30k N/A
Total Estimated Operating Cost $83k to $108k per year $50k to $60k per year Estimated Cost Range (Low to High)
Capital Cost Item Description
ATTACHMENT 2

ATTACHMENT 3

POINT OFCONNECTION

CONNECT TOEXISTING SEWERMANHOLE
APPROX 1,000 FTOF 8" GRAVITYSEWER

Canyon Crest
(Tract 1819)
ATTACHMENT 4

Page | 1

MEMORANDUM
TO: INTERESTED PARTIES
FROM: LOCAL AGENCY FORMATION COMMISSION
SUBJECT: LAFCO PROCESS OVERVIEW FOR CANYON CREST ANNEXATION INTO

SOUTH SAN LUIS OBISPO COUNTY SANITATION DISTRICT
Purpose
The memorandum is intended to outline LAFCO’s procedural steps to facilitate annexation of the Canyon Crest development into the South San Luis Obispo County Sanitation District’s service area. The process outlined below reflects continued coordination among affected agencies, feasibility considerations, and adherence to applicable provisions of the Government Code.

Background
The Canyon Crest Mutual Benefit Water Company operates a wastewater treatment system that includes wastewater collection, treatment, and disposal service for 54 residential homes in the Canyon Crest neighborhood in unincorporated Arroyo Grande. Each residence has an individual septic tank.

Wastewater from residential units is conveyed to dosing tanks before it is discharged to a community leach field. The Central Coast Water Board issued a notice of violation in October 2022 to the Canyon Crest Mutual Water Company, noting that its septic system discharges are causing an increase in nitrate in the underlying groundwater. Addressing this issue would require either substantial upgrades to the existing onsite wastewater treatment system or consolidation with a nearby public wastewater system. The nearest public system service provider is the South San Luis Obispo County Sanitation District (SSLOCSD).

Procedure
Consistent with LAFCO policies and regulations, the most logical and orderly change of governmental organization is annexation into the SSLOCSD. The following steps outline key procedural steps:

1. Pre-Application Coordination
• A three-party annexation agreement will be required between the following parties, subject to LAFCO approval. This does not need to be finalized prior to application submittal but will be required prior to the San Luis Obispo Local Agency Formation Commission

COMMISSIONERS
Chairperson

HEATHER MORENO
County Member
Vice-Chair

DAVID WATSON
Public Member

DAWN ORTIZ-LEGG
County Member

ED WAAGE
City Member

STEVE GREGORY
City Member
ED EBY
Special District Member

NAVID FARDANESH
Special District Member

ALTERNATES

BRUCE GIBSON
County Member

CARLA WIXOM
City Member
VACANT
Special District Member

MICHAEL DRAZE
Public Member
STAFF

ROB FITZROY
Executive Officer

IMELDA MARQUEZ-VAWTER
Senior Analyst

MORGAN BING
Analyst

MELISSA MORRIS
Commission Clerk

HOLLY WHATLEY
Legal Counsel
ATTACHMENT 5

Page | 2
LAFCO hearing. A Memorandum of Understanding (MOU) is recommended; see the bullet further below. Parties include:
o Applicant (Canyon Crest Homeowners Association)
o SSLOCSD (primary service provider for wastewater)
o City of Arroyo Grande (to allow pass-through of effluent to the SSLOCSD treatment facility, no annexation into the City is necessary)
• While not required, the three parties may consider entering into a Memorandum of Understanding (MOU) to establish a mutually agreed-upon framework prior to undertaking significant work. Early discussion and coordination of a potential MOU during the pre-application phase is recommended to support project success; however, execution of a final agreement would not be necessary until a later stage in the process.
• The annexation agreement should address infrastructure use, responsibilities, service delivery, and any other factor deemed necessary by any party • A Plan for Service consistent with Government Code Requirements is also required.

This does not need to be finalized prior to application submittal but will be required prior to the LAFCO hearing.

2. Application Submittal
• The applicant shall submit a petition of application to LAFCO proposing annexation to

SSLOCSD

3. Agency Referrals
• Upon receipt of the application, LAFCO will initiate the standard referral process, including:
o Referral to all affected agencies
o Referral to the County Assessor
 The County Assessor initiates the property tax exchange negotiation period per Section 99 of the Revenue and Taxation Code

4. 60-Day Termination Period
• Per Government Code Section 56857, upon receipt of the application by the LAFCO Commission, SSLOCSD will have 60 days to adopt and submit a resolution to LAFCO requesting termination of the proceedings
o The resolution requesting termination shall be based upon written findings supported by substantial evidence in the record that the request is justified by a financial or service-related concern.
• If no request for termination is received, LAFCO will continue processing the application.

5. Three Party Annexation Agreement and Plan for Service • If SSLOCSD does not make the required findings to terminate the proceedings, the next phase of the process should focus on development of a detailed Three-Party Annexation Agreement and a comprehensive Plan for Service.

6. Agency Consideration of Each Required Item
• City of Arroyo Grande

Page | 3
o City Council consideration of the Three-Party Annexation Agreement should occur first
• SSLOCSD
o Following the City’s action, SSLOCSD should consider the following items:
 Three-Party Annexation Agreement
 Plan for Service
 Property Tax Exchange Agreement
• All approvals should be structured as “Subject to LAFCO Approval”

7. LAFCO Consideration
• Following agency approvals and once the application is found complete and acceptable for filing:
o LAFCO will set the item for hearing
o LAFCO will consider the annexation proposal at a public hearing and has the authority to approve, conditionally approve or deny the application.

8. Protest Proceedings
• If approved by LAFCO, the proposal will proceed to the protest hearing process • Depending on the level of protest received:
o The annexation may be ordered
o An election may be required
o Or the proposal may be terminated
The above represents a high-level overview, and numerous details remain to be addressed as the process advances. Throughout the application review process, staff may request additional information. Given the unique nature of this proposal, the process is expected to take approximately 9 to 12 months. However, the timeline by be extended if delays are encountered.