Arroyo Grande City Council
June 23, 2026

CITY COUNCIL MEETING

AGENDA SUMMARY

Tuesday, June 23, 2026, 5:00 p.m.

In person at:

Arroyo Grande City Council Chamber
215 E. Branch Street, Arroyo Grande, CA 93420
AND via Zoom at:
https://arroyogrande-org.zoom.us/webinar/register/WN_NRsyFrUIQ_6179_iBTyDVA Please click the link above to register to join the Zoom Meeting This City Council meeting is being conducted in a hybrid in-person/virtual format. Please be advised that while the City will endeavor to ensure these remote participation methods are available, the City does not guarantee that they will be technically feasible or work all the time. Further, the City reserves the right to terminate these remote participation methods (subject to Brown Act restrictions) at any time and for any reason. Members of the public may participate and provide public comment on agenda items during the meeting in person at the location identified above, by joining the Zoom meeting, or by submitting written public comments to the Clerk of the Council at [email protected]. Meetings will be broadcast live on Channel 20 and streamed on the City’s Website.

CLOSED SESSION: 5:00 P.M.:

1. CALL TO ORDER

2. ROLL CALL

3. FLAG SALUTE

4. PUBLIC COMMENT ON CLOSED SESSION ITEMS

5. CLOSED SESSION
The City Council will recess to a closed session for the following and will report any reportable action at the City Council Regular meeting at 6:00 p.m.:
a) LABOR NEGOTIATION PURSUANT TO GOVERNMENT CODE SECTION 54957.6:

Meet with City-designated negotiators described below. Negotiation will include salary, compensation and benefits:

Employee Organization: Service Employees International Union (SEIU), City-designated negotiators: Che Johnson, Special Labor Counsel; Ashley Garcia, Human Resources Officer; Nicole Valentine, Director of Administrative Services

6. ADJOURNMENT
REGULAR MEETING 6:00 P.M.

1. CALL TO ORDER

2. ROLL CALL

3. MOMENT OF REFLECTION

4. FLAG SALUTE

5. AGENDA REVIEW

5.a Closed Session Announcements
June 23, 2026
a) LABOR NEGOTIATION PURSUANT TO GOVERNMENT CODE SECTION 54957.6:

Meet with City-designated negotiators described below. Negotiation will include salary, compensation and benefits:

Employee Organization: Service Employees International Union (SEIU) City-designated negotiators: Che Johnson, Special Labor Counsel; Ashley Garcia, Human Resources Officer; Nicole Valentine, Director of Administrative Services

5.b Ordinances read in title only
None.

6. SPECIAL PRESENTATIONS

6.a Honorary Proclamation Declaring July 2026 as "Parks Make Life Better Month"

6.b City Manager Communications
(DOWNING)
Recommended Action:

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

7. CITY COUNCIL REPORTS

7.a MAYOR RAY RUSSOM:

1. Audit Committee

2. California Joint Powers Insurance Authority (CJPIA)

3. Five Cities Fire Authority JPA Board

4. San Luis Obispo County Mayor's Meeting

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

6. Other

7.b MAYOR PRO TEM MARAVIGLIA:

1. Five Cities Fire Authority JPA Board

2. Visit SLO CAL Advisory Board

3. Other

7.c COUNCIL MEMBER GUTHRIE:

1. Integrated Waste Management Authority Board (IWMA)

2. REACH Economic Development Roundtable

3. Other

7.d COUNCIL MEMBER SECREST:

1. Air Pollution Control District (APCD)

2. Homeless Services Oversight Council (HSOC)

3. South County Chambers of Commerce Governmental Affairs Committee

4. Other

7.e COUNCIL MEMBER LOE:

1. Council of Governments/Regional Transit Authority (SLOCOG/SLORTA)

2. County Water Resources Advisory Committee (WRAC)

3. Zone 3 Water Advisory Board

4. Other

8. COMMUNITY COMMENTS AND SUGGESTIONS
This public comment period is an invitation to members of the community to present issues, thoughts, or suggestions on matters not scheduled on this agenda. Comments should be limited to those matters that are within the jurisdiction of the City Council. Members of the public may provide public comment in-person or remotely by registering and joining the Zoom meeting utilizing the link provided below. Once in the meeting, please use the “raise hand” feature to indicate your desire to provide public comment.

Click the link below to register to join the webinar: https://arroyograndeorg.zoom.us/webinar/register/WN_NRsyFrUIQ_6179_iBTyDVA •
After registering, you will receive a confirmation email containing information about joining the webinar.
•
Please be advised that while the City will endeavor to ensure these remote participation methods are available, the City does not guarantee that they will be technically feasible or work all the time.

Further, the City reserves the right to terminate these remote participation methods (subject to Brown Act restrictions) at any time and for any reason. Please attend in person or submit your comment via email to the City Clerk by 2:00 p.m. the day of the meeting to have it included as part of the record.

The Brown Act restricts the Council from taking formal action on matters not published on the agenda. In response to your comments, the Mayor or presiding Council Member may:
• Direct City staff to assist or coordinate with you.
• A Council Member may state a desire to meet with you.

It may be the desire of the Council to place your issue or matter on a future Council agenda.
•
Please adhere to the following procedures when addressing the Council:
• Comments should be limited to 1 minute or less.

Your comments should be directed to the Council as a whole and not directed to individual Council members.
•
Slanderous, profane or personal remarks against any Council Member or member of the audience shall not be permitted.
•

9. CONSENT AGENDA
The following routine items listed below are scheduled for consideration as a group. The recommendations for each item are noted. Any member of the public who wishes to comment on any Consent Agenda item may do so at this time. Any Council Member may request that any item be withdrawn from the Consent Agenda to permit discussion or change the recommended course of action. The City Council may approve the remainder of the Consent Agenda on one motion.

9.a Approval of Minutes
(MATSON)
Recommended Action:

Approve the minutes of the Regular City Council Meeting of June 9, 2026, as submitted.

9.b Cash Disbursement Ratification
(VALENTINE)
Recommended Action:

Review and ratify the attached listing of cash disbursements for the period of May 16 through May 31, 2026.

9.c Resolution Accepting the Fiscal Year 2026-27 Appropriation Limit (Gann Limit) (VALENTINE)
Recommended Action:
1) Adopt a Resolution adopting a tax proceeds expenditure appropriation limit for Fiscal Year 2026-27; and
2) Determine that establishing the appropriation limit for FY 2026-27 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.)

9.d Citywide Combined Salary Schedule
(GARCIA)
Recommended Action:
1) Adopt a Resolution establishing compensation adjustments for unrepresented part-time employees and approving the Citywide Combined Salary Schedule; and 2) Find that approval of the Resolution approving the Citywide Combined Salary Schedule 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).

9.e Notice of Award, Halcyon Complete Streets, PW 2023-15 (SWEENEY)

Recommended Action:
1) Reject low bidder, Edward’s Construction Group, Inc., as non-responsive; 2) Authorize the City Manager or designee to execute a construction contract for the Halcyon Complete Streets Project (Project) to the second lowest bidder, V. Lopez Jr. & Sons (V. Lopez) for $6,653,626.14, subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney; 3) Authorize the City Manager to approve change orders of 10% of the contract amount, $665,362.61, for unanticipated costs during the construction phase of the Project; and 4) Approve two budget amendments for construction of the Project.

9.f Approval of On Call Professional Services Agreements (SWEENEY)
Recommended Action:
1) Adopt a Resolution authorizing the City Manager to execute On-Call Professional Services Agreements for the five disciplines as listed in Tables 1 through 5, subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney; and
2) Find that the proposed action is not a project, and is exempt from review under CEQA, because approval of On-Call Professional Services Agreements is an organizational or administrative activity of government that does not itself result in direct or indirect physical changes in the environment. (State CEQA Guidelines,§ 15378(b)(5))

9.g Award of FY 2026 Streets Overlay Project (PW 2025-01) (SWEENEY)
Recommended Action:
1) Authorize the City Manager to execute contracts for the FY 2026 Streets Overlay Project PW 2025-01 (Project) to CalPortland Construction (CalPortland) and North Coast Engineering, Inc. (NCE) , subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney; and 2) Find that the project is categorically exempt from CEQA pursuant to CEQA Guidelines Section 15301(c), Existing Facilities, because it consists of the repair, maintenance, and minor alteration of existing streets, sidewalks, curb ramps, and related transportation facilities involving negligible or no expansion of existing use.

9.h Vacuum Truck Lease
(SWEENEY)
Recommended Action:
1) Adopt a Resolution approving the purchase of a Vactor 2110 Sewer Cleaner/Vacuum Truck through the Sourcewell Cooperative Purchasing Program, authorizing the City Manager to execute an agreement with Haaker Equipment Company in an amount not to exceed $689,099.81, and authorizing the City Manager to execute a municipal leasepurchase finance agreement and related documents with NCL Government Capital in a amount not to exceed $772,013; and

2) Determine that adopting the Resolution is not a project under CEQA because such action constitutes an organizational or administrative activity of a government that will not result in a direct or indirect physical change in the environment. (State CEQA Guidelines § 15378(b)(5).)

9.i 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
(PEREZ)
Recommended Action:
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.

9.j General Plan Update Progress Report – June 2026
(PEREZ)
Recommended Action:

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

10. PUBLIC HEARINGS

10.a Directing the Levy of Annual Assessments for Fiscal Year 2026-27 (SWEENEY)
Recommended Action:
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).

11. BUSINESS ITEMS

11.a Pre-application 26-001; Canyon Crest Off-Site Wastewater Treatment (PEREZ)
Recommended Action:
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).

12. COUNCIL COMMUNICATIONS
Any Council Member may ask a question for clarification, make an announcement, or report briefly on his or her activities. In addition, subject to Council policies and procedures, Council Members may request staff to report back to the Council at a subsequent meeting concerning any matter or request that staff place a matter of business on a future agenda. Any request to place a matter of business for original consideration on a future agenda requires the concurrence of at least two other Council Members.

13. ADJOURNMENT
All staff reports or other written documentation, including any supplemental material distributed to a majority of the City Council within 72 hours of a regular meeting, relating to each item of business on the agenda are available for public inspection during regular business hours in the City Clerk’s office, 300 E. Branch Street, Arroyo Grande. If requested, the agenda shall be made available in appropriate alternative formats to persons with a disability, as required by the Americans with Disabilities Act. To make a request for disability-related modification or accommodation, contact the Legislative and Information Services Department at 805-473-5400 as soon as possible and at least 48 hours prior to the meeting date.

This agenda was prepared and posted pursuant to Government Code Section 54954.2 Agenda reports can be accessed and downloaded from the City’s website at www.arroyogrande.org If you would like to subscribe to receive email or text message notifications when agendas are posted, you can sign up online through the “Notify Me” feature.

City Council Meetings are streamed live on the City’s Website and recorded for replay on Arroyo Grande’s Government Access Channel 20.

Item 6.a.

CITY COUNCIL REGULAR MEETING MINUTES
JUNE 9, 2026
PAGE 1
1 Item 9.a.

ACTION MINUTES

REGULAR MEETING OF THE CITY COUNCIL
June 9, 2026, 5:00 p.m.

Hybrid City Council Chamber/Virtual Zoom Meeting
215 East Branch Street, Arroyo Grande
Council Members Present: Mayor Caren Ray Russom, Mayor Pro Tem Jamie Maraviglia, Council Member Jim
Guthrie, Council Member Kate Secrest,
Council Member Aileen Loe
Staff Present: City Clerk Jessica Matson, City Attorney Isaac Rosen, City Manager Matthew Downing,
Human Resources Officer Ashley Garcia,
Administrative Services Director Nicole
Valentine, Interim Community Development
Director Andrew Perez, Chief of Police David
Culver, Management Analyst Aleah Bergam,
Utilities Manager Hailie Hix, Sergeant Timothy
Ramirez, Senior Officer Eli Esparza, Fire
Chief Scott Hallett
This meeting was conducted in a hybrid in-person/virtual format.

CLOSED SESSION: 5:00 P.M.:

1. CALL TO ORDER
Mayor Ray Russom called the meeting to order at 5:00 p.m.

2. ROLL CALL
City Clerk Matson took roll call.

3. FLAG SALUTE
Mayor Ray Russom led the flag salute.

4. PUBLIC COMMENT ON CLOSED SESSION ITEMS
Mayor Ray Russom invited public comment. No comments were received.

5. CLOSED SESSION
City Attorney Rosen announced that the City Council will recess to a closed session for the following and will report any reportable action at the City Council Regular meeting at 6:00 p.m.:
a) LABOR NEGOTIATION PURSUANT TO GOVERNMENT CODE SECTION 54957.6:

CITY COUNCIL REGULAR MEETING MINUTES
JUNE 9, 2026
PAGE 2
2 Item 9.a.

Meet with City-designated negotiators described below. Negotiation will include salary, compensation and benefits:

1. Employee Organization: Service Employees International Union (SEIU), Local 620 City-designated negotiators: Che Johnson, Special Labor Counsel; Ashley Garcia, Human Resources Officer; Nicole Valentine, Director of Administrative Services

2. Employee Organization: Unrepresented Management Employees City-designated negotiators: Che Johnson, Special Labor Counsel City Council adjourned to Closed Session at 5:02 p.m.

6. ADJOURNMENT
City Council adjourned Closed Session at 5:55 p.m.

REGULAR MEETING 6:00 P.M.
_____________________________________________________________________

1. CALL TO ORDER
Mayor Ray Russom called the Regular City Council Meeting to order at 6:00 p.m.

2. ROLL CALL
City Clerk Matson took roll call.

3. MOMENT OF REFLECTION

4. FLAG SALUTE
Mayor Ray Russom led the flag salute.

5. AGENDA REVIEW
Council moved Item 12.a. to be heard before Item 6.

5.a Closed Session Announcements
City Attorney Rosen announced that there was no reportable action from the following meeting:

June 9, 2026
a) LABOR NEGOTIATION PURSUANT TO GOVERNMENT CODE SECTION 54957.6:

Meet with City-designated negotiators described below. Negotiation will include salary, compensation and benefits:

1. Employee Organization: Service Employees International Union (SEIU), Local 620 City-designated negotiators: Che Johnson, Special Labor Counsel; Ashley Garcia, Human Resources Officer; Nicole Valentine, Director of Administrative Services

2. Employee Organization: Unrepresented Management Employees City-designated negotiators: Che Johnson, Special Labor Counsel

CITY COUNCIL REGULAR MEETING MINUTES
JUNE 9, 2026
PAGE 3
3 Item 9.a.

5.b Ordinances read in title only
Moved by Mayor Ray Russom
Seconded by Council Member Guthrie
Move that all ordinances presented at the meeting shall be read by title only and all further readings be waived.

AYES (5): Mayor Ray Russom, Mayor Pro Tem Maraviglia, Council Member Guthrie, Council Member Secrest, and Council Member Loe
Passed (5 to 0)

6. SPECIAL PRESENTATIONS

6.a Honorary Proclamation Recognizing the Third Friday in June 2026 as "Juneteenth Day" in Arroyo Grande
Mayor Ray Russom announced a representative from the NAACP SLO County was not able to attend the meeting to receive the Proclamation and that it will be mailed to them.

6.b Introduction of New Employee - Hailie Hix, Utilities Manager City Manager Downing introduced Utilities Manager Hailie Hix and highlighted her educational and professional background. Utilities Manager Hix addressed the Council.

6.c Police Department Promotions and Oaths of Office - Sergeant Timothy Ramirez and Senior Police Officer Eli Esparza
Chief Culver introduced promoted staff, Senior Officer Eli Esparza and Sergeant Timothy Ramirez, and highlighted their educational and professional background. City Clerk Matson administered the Oaths of Office. A badge pinning followed.

6.d City Manager Communications
City Manager Downing provided updates on FCFA’s collaboration with SLO Fire Safe Council to bring the first wildfire defense awareness event to Las Jollas de Rancho Grande HOA in the Andre Drive cul-de-sac on June 13th at 4 p.m.; summer Public Works interns starting next week; Thursday night music in the park continuing this week at Rancho Grande Park; Family Dance taking place on June 20th; the latest addition of the Arroyo Grande Gazette newsletter available on the City’s website and includes information about the Halcyon Complete Streets Project; tenting and fumigation of City Hall to take place on June 19th and reopening Monday, June 22nd.

No action was taken on this item.

7. CITY COUNCIL REPORTS
None.

CITY COUNCIL REGULAR MEETING MINUTES
JUNE 9, 2026
PAGE 4
4 Item 9.a.

Reports are made during the Second Council Meeting each month.

8. COMMUNITY COMMENTS AND SUGGESTIONS
Mayor Ray Russom invited public comment. No public comments were received.

9. CONSENT AGENDA
Mayor Ray Russom asked the Council if there were any questions or any items to be pulled from the consent agenda for further discussion. There were none.

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

Moved by Council Member Guthrie
Seconded by Council Member Secrest
Approve Consent Agenda Items 9.a. through 9.i., with the recommended courses of action.

AYES (5): Council Member Guthrie, Council Member Secrest, Council Member Loe, Mayor Pro Tem Maraviglia, and Mayor Ray Russom
Passed (5 to 0)

9.a Approval of Minutes
Approved the minutes of the Regular City Council Meeting of May 26, 2026, as submitted.

9.b Cash Disbursement Ratification
Reviewed and ratified the listing of cash disbursements for the period of May 1 through May 15, 2026.

9.c Statement of Investment Deposits for April 2026
Received and filed the report listing investment deposits of the City of Arroyo Grande as of April 30, 2026, as required by Government Code Section 53646(b).

9.d Communications Facility License Agreement with T-Mobile West, LLC 1) Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE AUTHORIZING THE CITY MANAGER TO EXECUTE A

COMMUNICATIONS FACILITY LICENSE AGREEMENT WITH T-MOBILE WEST, LLC FOR USE OF APPROXIMATELY 375 SQUARE FEET OF CITY PROPERTY LOCATED AT 200

HILLCREST DRIVE FOR THE CONTINUED OPERATION AND MAINTENANCE OF A WIRELESS COMMUNICATIONS FACILITY"; and
2) Found that adopting a Resolution authorizing the City Manager to execute a license agreement is not a project subject to the California Environmental Quality Act (“CEQA”) because it merely formalizes existing use and 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.)

CITY COUNCIL REGULAR MEETING MINUTES
JUNE 9, 2026
PAGE 5
5 Item 9.a.

9.e Resolutions for the 2026 General Municipal Election for the Election of Certain Officers of the City
1) Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE, CALIFORNIA, CALLING FOR THE HOLDING OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 3, 2026, FOR THE

ELECTION OF CERTAIN OFFICERS AS REQUIRED BY THE PROVISIONS OF THE LAWS OF THE STATE OF CALIFORNIA RELATING TO GENERAL LAW CITIES"; 2) Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE, CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE

COUNTY OF SAN LUIS OBISPO TO CONSOLIDATE A GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 3, 2026, WITH THE STATEWIDE GENERAL ELECTION TO BE HELD ON THE SAME DATE PURSUANT TO SECTION 10403 OF THE ELECTIONS CODE"; and
3) Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE, CALIFORNIA, ADOPTING REGULATIONS FOR CANDIDATES FOR

ELECTIVE OFFICE PERTAINING TO CANDIDATE STATEMENTS SUBMITTED TO THE VOTERS AT AN ELECTION TO BE HELD ON TUESDAY, NOVEMBER 3, 2026".

9.f Agreement for Consultant Services with Townsend Public Affairs, Inc. for Legislative Advocacy and Grant Writing Services
1) Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE AUTHORIZING THE CITY MANAGER TO EXECUTE A THREE-YEAR

PROFESSIONAL SERVICES AGREEMENT WITH TOWNSEND PUBLIC AFFAIRS, INC FOR LEGISLATIVE ADVOCACY AND GRANT WRITING SERVICES", subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney; and
2) Determined that approving the Agreement 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).

9.g Memorandum of Understanding Between the Arroyo Grande Police Department and the Lucia Mar Unified School District for School Resource Officer Services 1) Approved a Memorandum of Understanding between the City of Arroyo Grande and the Lucia Mar Unified School District (LMUSD) to share the cost of salary and benefits for one School Resource Officer (SRO) position in Fiscal Year (FY) 2026-27; and 2) Found that approving the Memorandum of Understanding 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.)

CITY COUNCIL REGULAR MEETING MINUTES
JUNE 9, 2026
PAGE 6
6 Item 9.a.

9.h Award of Roof Repairs and City Hall Exterior Rehabilitation 1) Adopted a resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE AUTHORIZING THE CITY MANAGER TO EXECUTE A

CONSTRUCTION CONTRACT FOR THE REBID ROOF REPAIRS ON CITY STRUCTURES PROJECT TO KRGS ROOFING, INC. AND A CONSTRUCTION CONTRACT FOR THE CITY

HALL BALCONY AND EXTERIOR REHABILITATION PROJECT TO BC CONSTRUCTION AND ELECTRIC (BC)", subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney; and 2) Found that the project is categorically exempt from the California Environmental Quality Act (“CEQA”) under the Class 2 exemption, which applies to the replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced.

9.i Notice of Acceptance, Water Main and Services Project, PW 2025-04 1) Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ACCEPTING THE WATER MAIN AND SERVICES PROJECT (PW 2025- 04) AND ASSOCIATED ACTIONS"; and
2) Determined that adopting the Resolution ordering the acceptance is exempt from the California Environmental Quality Act ("CEQA") because the activity is not a “project” subject to CEQA and 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.)

10. PUBLIC HEARINGS
None.

11. BUSINESS ITEMS

11.a Critical Need Justification for Appointment of CalPERS Retired Annuitant Human Resources Officer Garcia presented the Item.

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

Moved by Council Member Loe
Seconded by Mayor Pro Tem Maraviglia
Adopt a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE APPROVING THE TEMPORARY APPOINTMENT OF SHANE TAYLOR AS A CALPERS RETIRED ANNUITANT PRIOR TO THE EXPIRATION OF THE 180-DAY WAITING PERIOD PURSUANT TO GOVERNMENT CODE SECTIONS 7522.56(f) AND 21224".

CITY COUNCIL REGULAR MEETING MINUTES
JUNE 9, 2026
PAGE 7
7 Item 9.a.

AYES (5): Council Member Loe, Mayor Pro Tem Maraviglia, Council Member Guthrie, Council Member Secrest, and Mayor Ray Russom
Passed (5 to 0)

11.b FY 2026-27 Mid-Cycle Budget
Administrative Services Director Valentine presented the Item.

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

Mayor Ray Russom commented on the City's extensive budget review process.

Moved by Mayor Pro Tem Maraviglia
Seconded by Council Member Loe
1) Adopt a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ADOPTING THE FISCAL YEAR 2026-27 MID-CYCLE BUDGET AND MAKING APPROPRIATIONS FOR THE AMOUNT BUDGETED"; and
2) Determine that adoption of the Budget 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.) Individual projects within the Budget may be subject to CEQA and environmental review will be conducted at the appropriate time during implementation of those projects.

AYES (5): Mayor Pro Tem Maraviglia, Council Member Loe, Council Member Guthrie, Council Member Secrest, and Mayor Ray Russom
Passed (5 to 0)

11.c Consider Placing a Local Cannabis Tax Measure on the November 3, 2026 General Municipal Election Ballot
City Manager Downing introduced the Item. Management Analyst Bergam presented the Item.

City Manager Downing responded to questions from Council.

Council discussion ensued regarding the importance of communications, bringing tax revenue into the City, current laws regarding dispensary locations and regulation of the industry, health education, success in neighboring jurisdictions, and the importance of allowing the public the opportunity to decide through the voting process.

Mayor Ray Russom commented on Arroyo Grande's consideration of cannabis over the years and potential economic development.

CITY COUNCIL REGULAR MEETING MINUTES
JUNE 9, 2026
PAGE 8
8 Item 9.a.

Mayor Pro Tem Maraviglia and Mayor Ray Russom volunteered to prepare and submit the Argument in Favor of the Measure.

Moved by Mayor Ray Russom
Seconded by Council Member Secrest
1) Adopt a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE, CALIFORNIA, CALLING FOR THE PLACEMENT OF A GENERAL TAX MEASURE ON THE NOVEMBER 3, 2026 GENERAL MUNICIPAL ELECTION BALLOT FOR

THE SUBMISSION TO THE QUALIFIED VOTERS OF A PROPOSED ORDINANCE ADDING CHAPTER 3.26 TO TITLE 3 (REVENUE AND FINANCE) OF THE ARROYO GRANDE

MUNICIPAL CODE ESTABLISHING A TAX ON CANNABIS BUSINESSES OPERATING WITHIN THE CITY OF ARROYO GRANDE";
2) Adopt an Ordinance entitled: "AN ORDINANCE OF THE PEOPLE OF THE CITY OF ARROYO GRANDE, CALIFORNIA, ADDING CHAPTER 3.26 (CANNABIS BUSINESS TAX) TO TITLE 3 (REVENUE AND FINANCE) OF THE ARROYO GRANDE MUNICIPAL CODE

ESTABLISHING A TAX ON CANNABIS BUSINESSES OPERATING WITHIN THE CITY OF ARROYO GRANDE" (to ultimately be considered for approval by the voters); 3) Adopt a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE, CALIFORNIA, PROVIDING FOR THE FILING OF DIRECT AND

REBUTTAL ARGUMENTS AND SETTING RULES FOR THE FILING OF WRITTEN ARGUMENTS REGARDING A CITY MEASURE TO BE SUBMITTED AT THE NOVEMBER 3, 2026, GENERAL MUNICIPAL ELECTION";
4) Adopt a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE, CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE

COUNTY OF SAN LUIS OBISPO TO CONSOLIDATE A GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 3, 2026, WITH THE STATEWIDE GENERAL ELECTION TO BE HELD ON THAT DATE PURSUANT TO §10403 OF THE ELECTIONS CODE"; 5) Pursuant to Elections Code Section 9282, authorize and designate Mayor Ray Russom and Mayor Pro Tem Maraviglia to prepare and submit an argument in favor of the measure to the City Clerk within the time prescribed by law for inclusion in the voter information materials for the General Election to be held on November 3, 2026; and 6) Determine that adopting the Resolutions and Ordinance regarding a cannabis business tax relates to organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment, and therefore is not a project within the meaning of the California Environmental Quality Act (“CEQA”) and the State CEQA Guidelines, section 15378(b)(5).

AYES (5): Mayor Ray Russom, Council Member Secrest, Council Member Guthrie, Council Member Loe, and Mayor Pro Tem Maraviglia
Passed (5 to 0)

CITY COUNCIL REGULAR MEETING MINUTES
JUNE 9, 2026
PAGE 9
9 Item 9.a.

11.d Consider Placing a Measure for Participation in the California State Water Project on the November 3, 2026, General Municipal Election Ballot
City Clerk Matson presented the Item.

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

Council discussion ensued regarding long-term water resiliency and reliability as well as improvements with the reliability of State Water.

Mayor Ray Russom and Council Member Loe volunteered to prepare and submit the Argument in Favor of the Measure.

Moved by Mayor Ray Russom
Seconded by Mayor Pro Tem Maraviglia
1) Adopt a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE, CALIFORNIA, SUBMITTING TO THE QUALIFIED VOTERS OF THE CITY OF ARROYO GRANDE, A MEASURE TO REPEAL 1990 MEASURE “A” AND 2016 MEASURE E-16, AND REPLACE BOTH BY AMENDING SECTION 2.08.070 OF CHAPTER

2.08 OF TITLE 2 OF THE ARROYO GRANDE MUNICIPAL CODE TO AUTHORIZE THE CITY

OF ARROYO GRANDE TO PARTICIPATE IN THE CALIFORNIA STATE WATER PROJECT,

AT A GENERAL MUNICIPAL ELECTION TO BE CONSOLIDATED WITH THE STATEWIDE GENERAL ELECTION TO BE HELD ON NOVEMBER 3, 2026; AND SETTING RULES AND

DEADLINES FOR THE SUBMITTAL OF ARGUMENTS FOR AND AGAINST THE MEASURE";
2) Adopt an Ordinance entitled: "AN ORDINANCE OF THE PEOPLE OF THE CITY OF ARROYO GRANDE, CALIFORNIA, TO REPEAL 1990 MEASURE “A” AND 2016 MEASURE “E-16” AND REPLACING BOTH BY AMENDING SECTION 2.08.070 OF CHAPTER 2.08 OF TITLE 2 OF THE ARROYO GRANDE MUNICIPAL CODE TO AUTHORIZE THE CITY OF ARROYO GRANDE TO PARTICIPATE IN THE CALIFORNIA STATE WATER PROJECT", (subject to approval by the voters);
3) Pursuant to Elections Code Section 9282, authorize and designate Mayor Ray Russom and Council Member Loe to prepare and submit an argument in favor of the measure to the City Clerk within the time prescribed by law for inclusion in the voter information materials for the General Election to be held on November 3, 2026; and
4) Determine that adopting the Resolution and Ordinance regarding participation in the California State Water Project relates to organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment and therefore is not a project within the meaning of the California Environmental Quality Act (“CEQA”) and the State CEQA Guidelines, section 15378(b)(5).

AYES (5): Mayor Ray Russom, Mayor Pro Tem Maraviglia, Council Member Guthrie, Council Member Secrest, and Council Member Loe

CITY COUNCIL REGULAR MEETING MINUTES
JUNE 9, 2026
PAGE 10
10 Item 9.a.

Passed (5 to 0)

11.e Study Session on Efforts to Redevelop East Grand Avenue Mayor Ray Russom called for a brief break at 7:04 p.m. The Council reconvened at 7:08 p.m.

Interim Community Development Director Perez presented the Item and responded to questions from Council.

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

Council discussion ensued regarding previous economic studies of the area, adding a study on residential impacts and potential, prioritizing corridor zoning, solidifying community vision for the area, evaluating housing opportunities, and encouraging development.

Council Member Loe referenced written public comment received.

Further Council discussion ensued regarding evaluating a road diet and an incremental approach to the plan.

City Manager Downing commented on Council direction and bringing the Request for Proposals (RFP) back to Council for approval before publishing.

City Council directed staff to update the proposed RFP in order to fast-track corridor mixed-use implementation and identify tools to help with the process (i.e. public-private partnerships, development agreements, objective design standards); look into whether or not a road diet would work and the streetscape component as it relates to a CIP; and look at a housing component and what type of commercial developments are needed to support residents in the area and vice-versa.

12. COUNCIL COMMUNICATIONS
This Item was heard before Item 6.

Mayor Ray Russom announced that the Arroyo Grande High School (AGHS) Boys Golf are CIF Champions and the City's Redwood Tree will reflect AGHS colors in their honor.

Council Member Loe commented on SLOCOG Board’s approval of a letter pushing back on the State's Housing and Community Development methodology for housing, their economic study featuring the E Grand Ave. corridor, their adoption of a legislative platform, and moving forward with 1/2 cent sales tax measure in November; and that she will not be at the next Council meeting.

Council Member Secrest reported on attendance at the Zone 3 meeting; the Homeless Services Oversight Committee meeting reporting anticipated funding cuts; the next Repair Cafe will take place Saturday, August 8th; and the upcoming Festival Mozaic community concert at St. Barnabes Church on July 24th.

13. ADJOURNMENT

CITY COUNCIL REGULAR MEETING MINUTES
JUNE 9, 2026
PAGE 11
11 Item 9.a.

There being no further business to come before the City Council, Mayor Ray Russom adjourned the meeting at 7:47 p.m.
_________________________
Caren Ray Russom, Mayor
_________________________
Jessica Matson, City Clerk

Item 9.b.

MEMORANDUM
TO: City Council
FROM: Nicole Valentine, Director of Administrative Services BY: Megan Schotborgh, Finance Manager
SUBJECT: Cash Disbursement Ratification
DATE: June 23, 2026
RECOMMENDATION:

Review and ratify the attached listing of cash disbursements for the period of May 16 through May 31, 2026.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

There is a $1,199,337.75 fiscal impact for the period of May 16 through May 31, 2026, that includes the following items:
 Accounts Payable Checks $767,379.98
 Payroll & Benefit Checks $431,957.77
BACKGROUND:

Cash disbursements are made weekly based on the submission of all required documents supporting the invoices submitted for payment. Prior to payment, Administrative Services staff review all disbursement documents to ensure that they meet the approval requirements adopted in the Municipal Code and the City’s Purchasing Policies and Procedures Manual.

ANALYSIS OF ISSUES:

The attached listing represents the cash disbursements required for normal and usual operations during the period. The disbursements are accounted for in the FY 2025-26 budget.

ALTERNATIVES:

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

1. Approve staff’s recommendation;

2. Do not approve staff’s recommendation; or

3. Provide other direction to staff.

Item 9.b.

City Council
Cash Disbursement Ratification
June 23, 2026

ADVANTAGES:
 The Administrative Services Department monitors payments of invoices for accountability, accuracy, and completeness using standards approved by the City Council.
 Invoices are paid in a timely manner to establish goodwill with merchants.  Discounts are taken where applicable.

DISADVANTAGES:

There are no disadvantages identified in this recommendation.

ENVIRONMENTAL REVIEW:

Ratifying the cash disbursements 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.)
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. May 16 through May 31, 2026 – Accounts Payable Check Register

2. May 29, 2026 – Payroll & Benefit Check Register

Attachment 1

Attachment 1

Attachment 1

Attachment 1

Attachment 1

.

General Fund 378,839.88 5101 Salaries Full time 298,041.54 Streets Fund 16,404.92 5101 Volunteer Employee Retirement - Sewer Fund 13,993.93 5102 Salaries Part-Time - PPT 2,658.03 Water Fund 22,719.04 5103 Salaries Part-Time - TPT 8,365.70 431,957.77 5105 Salaries OverTime 17,838.92
5106 Salaries Strike Team OT -
5107 Salaries Standby 1,786.50
5108 Holiday Pay 290.88
5109 Sick Pay 4,471.73
Administrative Services - 5110 Annual Leave Buyback -
Information Services - 5111 Vacation Buyback -
Community Development - 5112 Sick Leave Buyback -
Police 15,861.48 5113 Vacation Pay 12,710.54
Public Works - Maintenance 1,188.11 5114 Comp Pay 1,142.73 Public Works - Enterprise 789.33 5115 Annual Leave Pay 12,332.34 Recreation - Administration - 5116 Salaries - Police FTO 380.27 Recreation - Special Events - 5121 PERS Retirement 40,085.14 17,838.92 5122 Social Security 26,867.90
5123 PARS Retirement 170.00
5126 State Disability Ins. 4,528.76
5127 Deferred Compensation -
5131 Health Insurance -
5132 Dental Insurance -
5133 Vision Insurance -
5134 Life Insurance -
5135 Long Term Disability -
5137 Leave Payouts -
5142 Unemployment Insurance -
5143 Uniform Allowance 121.79
5144 Car Allowance 165.00
5146 Council Expense -
5147 Employee Assistance -
5148 Boot Allowance -
5149 Motor Pay -
5150 Bi-Lingual Pay -
5151 Cell Phone Allowance -
431,957.77
OVERTIME BY DEPARTMENT:

CITY OF ARROYO GRANDE

DEPARTMENTAL LABOR DISTRIBUTION

PAY PERIOD
05/8/2026-5/21/2026
5/29/2026

BY FUND BY ACCOUNT
Attachment 2

Item 9.c.

MEMORANDUM
TO: City Council
FROM: Nicole Valentine, Director of Administrative Services BY: Megan Schotborgh, Finance Manager
SUBJECT: Resolution Accepting the Fiscal Year 2026-27 Appropriation Limit (Gann Limit)
DATE: June 23, 2026
RECOMMENDATION:
1) Adopt a Resolution adopting a tax proceeds expenditure appropriation limit for Fiscal Year 2026-27; and
2) Determine that establishing the appropriation limit for FY 2026-27 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.)
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

There are no significant fiscal or personnel impacts associated with approval of the appropriation limit.

BACKGROUND:

Proposition 4, known as the Gann Initiative, was approved by California voters in 1979, adding Article XIIIB to the California Constitution. This Article established an annual limit on the appropriations of tax proceeds for government agencies, also known as the Gann Limit. In 1990, the Article was modified by Proposition 111 and SB 88, which included new adjustment formulas that allow cities a choice in methodologies for determining both the annual growth and inflation factors. The annual population growth factor can be calculated by using the greater of the City or the County population growth. Agencies have a choice of using the growth in California per capita personal income or the growth in non-residential assessed valuation due to new construction within their city. The City’s calculation uses the changes in California per capita personal income and the County of San Luis Obispo’s population as adjustment factors.

In May 2026, the California Department of Finance released population and per capita personal income information. The population between January 2025 and January 2026 for the City

Item 9.c.

City Council
Resolution Accepting the Fiscal Year 2026-27 Appropriation Limit (Gann Limit) June 23, 2026

decreased by eight-tenths of one percent (-0.8%) and the County population decreased by zero-point two percent (-0.2%). For Fiscal Year (FY) 2026-27, the change in per capita personal income from the prior year increased by four and ninety-five hundredths percent (4.95%).

In accordance with Proposition 111, the City’s annual spending limit must be approved by the City Council at the beginning of each fiscal year. The limit is calculated using the previous year’s appropriation limit ($30,708,601), multiplied by the per capita personal income percentage increase (4.95%), and multiplied again by the greater available population growth factor, which for FY 2026-27 is the County’s -0.2%.

ANALYSIS OF ISSUES:

The City is responsible for separating citywide revenues between tax and non-tax revenue and applying the formula to the cumulative appropriation limit. For FY 2026-27, the appropriation limit has been calculated to be $32,179,543. This calculation means the City cannot appropriate more than $32,179,543 tax-based revenues in FY 2026-27. The estimated proceeds of taxes subject to the appropriation limit for the proposed FY 2026-27 budget is estimated to be $28,015,100, which is approximately $4.2 million less than the appropriation limit. Therefore, the City is in compliance with Article XIIIB of the California Constitution.

ALTERNATIVES:

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

1. Adopt a Resolution establishing the appropriation limit for FY 2026-27;

2. Revise and adopt a Resolution establishing the appropriation limit for FY 2026-27; or

3. Provide other direction to staff.

ADVANTAGES:

Adoption of the Resolution establishing the appropriation limit for FY 2026-27 will ensure that the City is in compliance with Article 13B of the California Constitution.

DISADVANTAGES:

There are no disadvantages identified with the recommended action.

ENVIRONMENTAL REVIEW:

Establishing the appropriation limit for FY 2026-27 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.)
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. Resolution

ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE ADOPTING A TAX PROCEEDS

EXPENDITURE APPROPRIATION LIMIT FOR FISCAL
YEAR 2026-27
WHEREAS, sections 7900 et seq. of the Government Code provide for the effective and efficient implementation of Article XIIIB of the California Constitution; and WHEREAS, Government Code sections 7901 through 7914 provide that each year, the governing body of each local jurisdiction shall, by resolution adopted at a regularly scheduled meeting, establish the annual adjustment factors to be used and the tax proceeds expenditure appropriation limit.

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

1. The California per capita income and the population for the County of San Luis Obispo, California are recognized as the annual adjustment factors for Fiscal Year 2026-27.

2. The appropriation limit for Fiscal Year 2026-27 is hereby set at thirty-two million, one hundred seventy-nine thousand, five hundred forty-three dollars ($32,179,543).

3. Documentation used in the determination of the tax proceeds expenditure appropriation limit is attached hereto as Exhibit A and incorporated herein by this reference.

4. This Resolution is effective on its date of adoption.

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 2
______________________________

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 3

EXHIBIT A
Appropriation limit for 2025-26 30,708,601 (A)
Multiplied by the appropriation limit change factors:

Per Capita Personal Income Change: 4.95%
=
100
Population Factor - San Luis Obispo County
2025 279,666
2026 279,242 -0.2%
(424)
= =
279,242 100
Appropriation limit factor: (B x C) 1.0479 (D)
APPROPRIATION LIMIT FOR FISCAL YEAR 2026-26 (A x D7 $ 32,179,543 $ 28,015,100
Amount under (over) limit 4,164,443
ESTIMATED 2025-26 PROCEEDS OF TAXES SUBJECT

TO APPROPRIATION LIMIT
Conversion to ratio:
(424) -0.2% +100 0.99848
(C)

CITY OF ARROYO GRANDE

CALCULATION OF APPROPRIATION LIMIT FROM TAX PROCEEDS
FOR FISCAL YEAR 2026-27
Conversion to ratio: 4.95% +100

1.0495
(B)

Item 9.d.

MEMORANDUM
TO: City Council
FROM: Ashley Garcia, Human Resources Officer
Nicole Valentine, Director of Administrative Services
SUBJECT: Citywide Combined Salary Schedule
DATE: June 23, 2026
RECOMMENDATION:
1) Adopt a Resolution establishing compensation adjustments for unrepresented parttime employees and approving the Citywide Combined Salary Schedule; and 2) Find that approval of the Resolution approving the Citywide Combined Salary Schedule 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).

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

The contractually obligated wage adjustments were anticipated and appropriated in the adopted mid-cycle budget. Sufficient appropriations are available within the adopted Fiscal Year budget.

The fiscal impact associated with the proposed resolution to modify pay rates for parttime employees includes the cost of the 3.5% cost-of-living adjustment for part-time employees, with an estimated annual cost of $7,800 across all general and enterprise funds. This amount was appropriated in the adopted mid-cycle budget.

BACKGROUND:

The City of Arroyo Grande has 80 budgeted full-time positions and 8.3 budgeted full-time equivalent (FTE) part-time positions. Most full-time employees are represented by a recognized employee organization or are part of the unrepresented Management group.

Part-time employees are also unrepresented. Staff periodically reviews and updates the City's salary schedule to reflect organizational changes, negotiated compensation adjustments, classification modifications, and other compensation actions approved by the City Council.

The City Council previously approved cost-of-living adjustments (COLAs) for the following employee groups, effective the first full pay period in July 2026 (July 3, 2026):

Item 9.d.

City Council
Citywide Combined Salary Schedule
June 23, 2026

 Management Employees: 3.5% COLA pursuant to Resolution 2025-036 adopted June 10, 2025.
 Arroyo Grande Police Officers' Association: 3.5% COLA pursuant to the Memorandum of Understanding (MOU) adopted September 12, 2023 Consistent with these adjustments, the resolution adopting part-time salary rates is also adjusted by 3.5%.

The City is currently negotiating a successor MOU with the Service Employees International Union (SEIU) Local 620, which represents the City's miscellaneous employee group. The current MOU expires on June 30, 2026. Accordingly, the salary rates reflected on the attached citywide salary schedule for SEIU-represented classifications are the rates in effect prior to expiration of the current MOU. Upon adoption of a successor MOU, the Human Resources Officer will update the citywide salary schedule to reflect any negotiated wage adjustments.

Pursuant to the terms of the Joint Exercise of Powers Agreement that created the FCFA, all FCFA employees are employees of the City of Arroyo Grande, so the citywide salary schedule must also include agreed-upon adjustments for the International Association of Firefighters (IAFF) and FCFA Management. The FCFA Board previously approved costof-living adjustments for the following employee groups, effective the first full pay period in July 2026 (July 3, 2026):
 FCFA Management: 3.0% COLA pursuant to Resolution 2023-06 adopted October 16, 2023.
 International Association of Fire Fighters (IAFF) Local 4403: 3.0% COLA pursuant to the Memorandum of Understanding (MOU) adopted October 16, 2023.

The California Public Employees' Retirement System (CalPERS) requires all participating public agencies to maintain and publicly approve a salary schedule that complies with Title 2, California Code of Regulations (CCR), Section 570.5. The regulation establishes specific requirements governing earnable compensation and requires that salary schedules be duly approved and available for public inspection.

As a CalPERS contracting agency, the City must maintain a salary schedule that identifies each position classification and corresponding salary range and that has been formally approved by the governing body or its designee.

ANALYSIS OF ISSUES:

CalPERS regulations require that a compliant salary schedule:
 Be approved and adopted by the governing body or authorized designee;  Identify each job classification;
 Specify the salary or salary range assigned to each classification;  Remain publicly available for inspection;

Item 9.d.

City Council
Citywide Combined Salary Schedule
June 23, 2026

 Indicate the effective date of the salary schedule; and  Reflect pay rates that are paid in accordance with publicly approved salary ranges.

The attached Citywide Salary Schedule has been prepared to include all authorized City classifications, including management, part-time and represented classifications. The schedule reflects all salary actions previously approved by the City Council through Memoranda of Understanding, management resolutions, classification actions, and compensation adjustments.

Adoption of the updated salary schedule will ensure the City remains in compliance with CalPERS requirements and maintains appropriate documentation for audit purposes.

The proposed action consolidates and documents compensation previously authorized through existing City actions. The resolution also specifically designates the Human Resources Officer as the official custodian of the Citywide Salary Schedule and requires the schedule to be updated whenever salary ranges change due to Council action, MOU implementation, or classification and compensation study adjustments.

ALTERNATIVES:

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

1. Adopt the Resolution;

2. Adopt the Resolution with modifications;

3. Do not adopt the Resolution; or

4. Provide other direction to staff.

ADVANTAGES:

Adoption of the Citywide Salary Schedule ensures compliance with approved compensation provisions and CalPERS requirements for a publicly available salary schedule. It also promotes transparency, consistency, and efficient payroll administration.

DISADVANTAGES:

The proposed resolutions will result in increased ongoing personnel expenditures associated with the approved salary adjustments.

ENVIRONMENTAL REVIEW:

Approval of the Resolution approving the Citywide Combined Salary Schedule 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).

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.d.

City Council
Citywide Combined Salary Schedule
June 23, 2026

ATTACHMENTS:

1. Resolution establishing compensation adjustments for unrepresented part-time employees and approving the Citywide Combined Salary Schedule

ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE ESTABLISHING COMPENSATION

ADJUSTMENTS FOR UNREPRESENTED PART-TIME

EMPLOYEES AND APPROVING THE CITYWIDE

COMBINED SALARY SCHEDULE
WHEREAS, the City Council of the City of Arroyo Grande (“City”) has established a system of classification for all positions within the City service with descriptive occupational titles used to identify and distinguish positions from one another based on job duties, essential functions, knowledge, skills, abilities and minimum requirements; and WHEREAS, the City Council of the City of Arroyo Grande (“City”) deems it in the best interest of the City and in order to ensure compliance with State law, that compensation for part-time employees be adjusted as hereinafter provided; and WHEREAS, the parties acknowledge and agree that all previously negotiated Cost of Living Adjustments (“COLAs”) contained within prior contractual agreements shall be reflected in and applied to the Citywide Combined Salary Schedule in accordance with the terms and effective dates established in those agreements; WHEREAS, the City Council discussed and approved the updated salary ranges and schedule hereinafter provided at its Regular Meeting of June 23, 2026.

WHEREAS, the City Council finds the adoption of this Resolution is not a project subject to the California Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct, or reasonable foreseeable indirect, physical change in the environment. (State CEQA Guidelines §§ 15060, subd. (b)(2)-(3), 15378.) NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Arroyo Grande that:

1. Salary ranges for part-time employee classifications shall be adjusted as designated in Exhibit “A” attached hereto and incorporated herein by this reference, to be effective for the pay period beginning July 3, 2026.

2. All other part-time employee salary and benefit terms and conditions remain in full force and effect.

3. The Citywide Combined Salary Schedule as designated in Exhibit “A”, attached hereto and incorporated herein by this reference, to be effective July 3, 2026, reflecting the above described changes is hereby adopted.

BE IT FURTHER RESOLVED that the Human Resources Officer is designated as the official custodian of the City's Citywide Salary Schedule and shall maintain the schedule as an official public record in accordance with applicable CalPERS regulations.

RESOLUTION NO.

PAGE 2
BE IT FURTHER RESOLVED that the Human Resources Officer is authorized to update and publish revised Citywide Salary Schedules as necessary to reflect salary adjustments, classification actions, Memoranda of Understanding, management compensation resolutions, salary survey implementations, classification and compensation study recommendations, and other compensation actions duly approved by the City Council.

BE IT FURTHER RESOLVED that any revised Citywide Salary Schedule prepared pursuant to this Resolution shall:

1. Reflect compensation actions previously approved by the City Council or otherwise authorized by law;

2. Identify the effective date of the salary schedule;

3. Be maintained as a public document available for inspection; and

4. Remain in compliance with the requirements of Title 2, California Code of Regulations, Section 570.5, as may be amended.

BE IT FURTHER RESOLVED that the City Council directs staff to review and update the Citywide Salary Schedule as necessary following any Council-approved compensation change to ensure continued compliance with CalPERS regulations and to maintain accurate compensation records for audit purposes.

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 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
Combined Salary Schedule

Group
Rate
Type Range Step 1 Step 2 Step 3 Step 4 Step 5 Classification IAFF Annual F28 $73,900.44 $77,596.08 $81,477.12 $85,543.56 $89,832.48 IAFF Annual F29 $75,754.44 $79,536.60 $83,516.52 $87,694.20 $92,069.64 IAFF Annual F30 $77,645.52 $81,526.56 $85,605.36 $89,881.92 $94,380.96 IAFF Annual F31 $79,586.04 $83,565.96 $87,743.64 $92,131.44 $96,741.72 IAFF Annual F32 $81,576.00 $85,654.80 $89,931.36 $94,430.40 $99,151.92 Fire Fighter IAFF Annual F33 $83,615.40 $87,793.08 $92,180.88 $96,791.16 $101,636.28 IAFF Annual F34 $85,704.24 $89,993.16 $94,492.20 $99,213.72 $104,182.44 IAFF Annual F35 $87,842.52 $92,242.68 $96,852.96 $101,698.08 $106,778.04 IAFF Annual F36 $90,042.60 $94,541.64 $99,275.52 $104,231.88 $109,447.80 Fire Engineer IAFF Annual F37 $92,292.12 $96,902.40 $101,759.88 $106,839.84 $112,179.36 IAFF Annual F38 $94,603.44 $99,337.32 $104,293.68 $109,509.60 $114,985.08 IAFF Annual F39 $96,964.20 $101,809.32 $106,901.64 $112,253.52 $117,864.96 IAFF Annual F40 $99,386.76 $104,355.48 $109,583.76 $115,059.24 $120,806.64 IAFF Annual F41 $101,871.12 $106,963.44 $112,315.32 $117,939.12 $123,834.84 Fire Captain IAFF Annual F42 $104,417.28 $109,645.56 $115,121.04 $120,880.80 $126,924.84 IAFF Annual F43 $107,037.60 $112,389.48 $118,000.92 $123,909.00 $130,101.36 IAFF Annual F44 $109,707.36 $115,195.20 $120,954.96 $126,986.64 $133,352.04 IAFF Annual F45 $112,451.28 $118,075.08 $123,983.16 $130,175.52 $136,689.24 IAFF Annual F46 $115,257.00 $121,029.12 $127,073.16 $133,426.20 $140,100.60 MGMT Annual M25 $61,114.97 $64,170.66 $67,379.25 $70,748.17 $74,285.63 Administrative Assistant MGMT Annual M26 $62,642.85 $65,774.95 $69,063.65 $72,516.78 $76,142.67 MGMT Annual M27 $64,208.92 $67,419.36 $70,790.27 $74,329.85 $78,046.29 MGMT Annual M28 $65,814.14 $69,104.88 $72,560.12 $76,188.13 $79,997.59 MGMT Annual M29 $67,459.49 $70,832.50 $74,374.19 $78,092.86 $81,997.46 MGMT Annual M30 $69,145.98 $72,603.22 $76,233.34 $80,045.04 $84,047.26 Executive Assistant MGMT Annual M31 $70,874.63 $74,418.40 $78,139.31 $82,046.27 $86,148.60 MGMT Annual M32 $72,646.49 $76,278.80 $80,092.73 $84,097.31 $88,302.23 MGMT Annual M33 $74,462.66 $78,185.76 $82,095.08 $86,199.89 $90,509.88 MGMT Annual M34 $76,324.22 $80,140.42 $84,147.49 $88,354.89 $92,772.68 Assistant Planner MGMT Annual M35 $78,232.33 $82,143.89 $86,251.06 $90,563.66 $95,091.87 MGMT Annual M36 $80,188.14 $84,197.54 $88,407.42 $92,827.83 $97,469.18 MGMT Annual M37 $82,192.84 $86,302.48 $90,617.56 $95,148.50 $99,905.98 Deputy City Clerk/Communications Coordinator MGMT Annual M38 $84,247.66 $88,460.08 $92,883.09 $97,527.30 $102,403.65 Associate Planner MGMT Annual M39 $86,353.85 $90,671.59 $95,205.14 $99,965.35 $104,963.66 MGMT Annual M40 $88,512.70 $92,938.36 $97,585.31 $102,464.63 $107,587.88 MGMT Annual M41 $90,725.51 $95,261.77 $100,024.84 $105,026.13 $110,277.43 MGMT Annual M42 $92,993.65 $97,643.31 $102,525.49 $107,651.72 $113,034.30 MGMT Annual M43 $95,318.50 $100,084.46 $105,088.73 $110,343.13 $115,860.34 MGMT Annual M44 $97,701.45 $102,586.59 $107,715.93 $113,101.74 $118,756.81 Management Analyst MGMT Annual M45 $100,143.99 $105,151.20 $110,408.71 $115,929.15 $121,725.56 MGMT Annual M46 $102,647.59 $107,780.01 $113,169.05 $118,827.48 $124,768.84 MGMT Annual M47 $105,213.78 $110,474.53 $115,998.20 $121,798.10 $127,887.99 Public Works Manager MGMT Annual M48 $107,844.13 $113,236.37 $118,898.15 $124,843.11 $131,085.28 MGMT Annual M49 $110,540.24 $116,067.26 $121,870.63 $127,964.13 $134,362.29 Capital Improvement Projects Manager MGMT Annual M50 $113,303.74 $118,968.94 $124,917.38 $131,163.27 $137,721.41 Planning Manager Utilities Manager
MGMT Annual M51 $116,136.34 $121,943.16 $128,040.26 $134,442.28 $141,164.35 Building Official Director of Legislative and Information Services
Director of Recreation Services
Information Technology Manager
MGMT Annual M52 $119,039.74 $124,991.78 $131,241.39 $137,803.50 $144,693.62 MGMT Annual M53 $122,015.74 $128,116.52 $134,522.39 $141,248.56 $148,310.95 Finance Manager MGMT Annual M54 $125,066.13 $131,319.39 $137,885.35 $144,779.57 $152,018.56 Human Resources Officer MGMT Annual M55 $128,192.78 $134,602.37 $141,332.52 $148,399.13 $155,819.08 City of Arroyo Grande
Citywide Combined Salary Schedule
Effective July 3, 2026

EXHIBIT A

Group
Rate
Type Range Step 1 Step 2 Step 3 Step 4 Step 5 Classification MGMT Annual M56 $131,397.60 $137,967.45 $144,865.76 $152,109.11 $159,714.62 MGMT Annual M57 $134,682.54 $141,416.60 $148,487.43 $155,911.86 $163,707.40 MGMT Annual M58 $138,049.60 $144,952.08 $152,199.65 $159,809.63 $167,800.16 MGMT Annual M59 $141,500.84 $148,575.86 $156,004.64 $163,804.90 $171,995.14 City Engineer MGMT Annual M60 $145,038.36 $152,290.31 $159,904.89 $167,900.14 $176,295.19 MGMT Annual M61 $148,664.33 $156,097.54 $163,902.39 $172,097.48 $180,702.31 MGMT Annual M62 $152,380.93 $160,000.03 $168,000.00 $176,400.02 $185,220.08 MGMT Annual M63 $156,190.45 $164,000.01 $172,200.07 $180,810.11 $189,850.63 Police Commander MGMT Annual M64 $160,095.22 $168,099.98 $176,504.97 $185,330.25 $194,596.81 MGMT Annual M65 $164,097.59 $172,302.54 $180,917.67 $189,963.53 $199,461.72 MGMT Annual M66 $168,200.03 $176,610.04 $185,440.54 $194,712.56 $204,448.23 MGMT Annual M67 $172,405.03 $181,025.23 $190,076.55 $199,580.33 $209,559.31 MGMT Annual M68 $176,715.17 $185,550.95 $194,828.44 $204,569.82 $214,798.31 Director of Administrative Services Director of Community Development
Director of Public Works
MGMT Annual M69 $181,133.04 $190,189.70 $199,699.19 $209,684.13 $220,168.35 MGMT Annual M70 $185,661.36 $194,944.44 $204,691.66 $214,926.24 $225,672.52 MGMT Annual M71 $190,302.90 $199,818.05 $209,808.95 $220,299.38 $231,314.30 MGMT Annual M72 $195,060.48 $204,813.50 $215,054.16 $225,806.90 $237,097.30 Chief of Police MGMT Annual M73 $199,936.98 $209,933.89 $220,430.53 $231,452.04 $243,024.62 MGMT Annual M74 $204,935.41 $215,182.21 $225,941.29 $237,238.39 $249,100.36 Assistant City Manager/Public Works Director MGMT Annual M75 $210,058.80 $220,561.69 $231,589.78 $243,169.32 $255,327.75 MGMT Annual M76 $215,310.26 $226,075.80 $237,379.61 $249,248.53 $261,711.01 MGMT Annual M77 $220,693.02 $231,727.64 $243,314.01 $255,479.77 $268,253.74 MGMT Annual M78 $226,210.35 $237,520.83 $249,396.83 $261,866.63 $274,959.92 City Manager FCFA MGMT Annual M90F $98,676.06 $109,338.62 $120,000.15 Administrative Operations Manager/Clerk to the Board
FCFA MGMT Annual M91F $151,330.69 $167,652.07 $183,972.42 Battalion Chief FCFA MGMT Annual M92F $178,218.84 $197,461.30 $216,703.76 Fire Chief POA Annual NS17 $58,980.00 $61,929.01 $65,025.45 $68,276.72 $71,690.56 POA Annual NS18 $60,463.38 $63,486.54 $66,660.86 $69,993.91 $73,493.60 Records Clerk POA Annual NS19 $61,978.99 $65,077.93 $68,331.83 $71,748.43 $75,335.85 POA Annual NS20 $63,542.98 $66,720.12 $70,056.13 $73,558.93 $77,236.88 POA Annual NS21 $65,139.21 $68,396.16 $71,815.97 $75,406.77 $79,177.11 POA Annual NS22 $66,799.94 $70,139.93 $73,646.93 $77,329.27 $81,195.73 Records/Property Evidence Technician Police Services Technician
POA Annual NS23 $68,476.78 $71,900.62 $75,495.65 $79,270.43 $83,233.95 POA Annual NS24 $70,202.00 $73,712.10 $77,397.71 $81,267.60 $85,330.98 POA Annual NS25 $71,991.72 $75,591.31 $79,370.87 $83,339.41 $87,506.38 POA Annual NS26 $73,765.31 $77,453.57 $81,326.25 $85,392.57 $89,662.19 POA Annual NS27 $75,571.16 $79,349.71 $83,317.19 $87,483.05 $91,857.20 Police Trainee POA Annual NS28 $77,473.73 $81,347.42 $85,414.79 $89,685.53 $94,169.81 POA Annual NS29 $79,424.68 $83,395.92 $87,565.71 $91,944.00 $96,541.20 Records and Property Supervisor POA Annual NS30 $81,343.39 $85,410.56 $89,681.08 $94,165.14 $98,873.39 POA Annual NS31 $83,391.08 $87,560.64 $91,938.67 $96,535.60 $101,362.38 POA Annual NS32 $85,567.77 $89,846.15 $94,338.46 $99,055.38 $104,008.15 POA Annual NS33 $87,679.95 $92,063.94 $96,667.15 $101,500.50 $106,575.52 POA Annual PS31 $94,763.13 $99,501.28 $104,476.35 $109,700.17 $115,185.17 Police Officer POA Annual PS32 $97,122.96 $101,979.11 $107,078.06 $112,431.97 $118,053.56 POA Annual PS33 $99,518.01 $104,493.91 $109,718.61 $115,204.54 $120,964.77 POA Annual PS34 $102,106.79 $107,212.12 $112,572.73 $118,201.37 $124,111.44 POA Annual PS35 $104,642.72 $109,874.85 $115,368.60 $121,137.03 $127,193.88 Senior Police Officer POA Annual PS36 $107,231.50 $112,593.07 $118,222.72 $124,133.85 $130,340.55 POA Annual PS37 $109,908.32 $115,403.73 $121,173.92 $127,232.62 $133,594.25 POA Annual PS38 $112,602.76 $118,232.89 $124,144.53 $130,351.76 $136,869.35 POA Annual PS39 $115,455.69 $121,228.47 $127,289.90 $133,654.39 $140,337.11 POA Annual PS40 $118,273.39 $124,187.06 $130,396.42 $136,916.24 $143,762.05 POA Annual PS41 $121,284.83 $127,349.07 $133,716.51 $140,402.35 $147,422.46 POA Annual PS42 $124,313.86 $130,529.55 $137,056.04 $143,908.83 $151,104.28 Police Sergeant POA Annual PS43 $127,430.96 $133,802.50 $140,492.63 $147,517.26 $154,893.12 POA Annual PS44 $130,583.27 $137,112.43 $143,968.06 $151,166.46 $158,724.78

Group
Rate
Type Range Step 1 Step 2 Step 3 Step 4 Step 5 Classification SEIU Annual S14 $46,264.00 $48,577.20 $51,006.06 $53,556.36 $56,234.18 Office Assistant I SEIU Annual S15 $47,420.60 $49,791.63 $52,281.21 $54,895.27 $57,640.03 Accounting Clerk I SEIU Annual S16 $48,606.11 $51,036.42 $53,588.24 $56,267.65 $59,081.03 SEIU Annual S17 $49,821.27 $52,312.33 $54,927.94 $57,674.34 $60,558.06 Maintenance Worker I SEIU Annual S18 $51,066.80 $53,620.14 $56,301.14 $59,116.20 $62,072.01 Office Assistant II SEIU Annual S19 $52,343.47 $54,960.64 $57,708.67 $60,594.11 $63,623.81 SEIU Annual S20 $53,652.05 $56,334.66 $59,151.39 $62,108.96 $65,214.41 SEIU Annual S21 $54,993.35 $57,743.02 $60,630.17 $63,661.68 $66,844.77 Accounting Clerk II Maintenance Worker II
Neighborhood Services Technician
SEIU Annual S22 $56,368.19 $59,186.60 $62,145.93 $65,253.22 $68,515.89 SEIU Annual S23 $57,777.39 $60,666.26 $63,699.58 $66,884.55 $70,228.78 SEIU Annual S24 $59,221.83 $62,182.92 $65,292.07 $68,556.67 $71,984.50 SEIU Annual S25 $60,702.37 $63,737.49 $66,924.37 $70,270.59 $73,784.11 Administrative Secretary SEIU Annual S26 $62,219.93 $65,330.93 $68,597.48 $72,027.35 $75,628.72 Senior Accounting Clerk Building Permit Technician
Plan/Engineer Permit Tech
Sports Facility Coordinator
Recreation Coordinator
Maintenance Worker III
Engineering Technician
SEIU Annual S27 $63,775.43 $66,964.20 $70,312.41 $73,828.03 $77,519.44 SEIU Annual S28 $65,369.82 $68,638.31 $72,070.22 $75,673.73 $79,457.42 Water Services Worker SEIU Annual S29 $67,004.06 $70,354.27 $73,871.98 $77,565.58 $81,443.86 SEIU Annual S30 $68,679.16 $72,113.12 $75,718.78 $79,504.72 $83,479.95 Fleet Maintenance Coordinator Community Services Specialist
SEIU Annual S31 $70,396.14 $73,915.95 $77,611.75 $81,492.34 $85,566.95 Public Works Lead Worker Parks Lead Worker
SEIU Annual S32 $72,156.05 $75,763.85 $79,552.05 $83,529.64 $87,706.13 SEIU Annual S33 $73,959.95 $77,657.95 $81,540.84 $85,617.88 $89,898.78 SEIU Annual S34 $75,808.95 $79,599.39 $83,579.36 $87,758.33 $92,146.25 GIS Technician SEIU Annual S35 $77,704.17 $81,589.38 $85,668.85 $89,952.29 $94,449.90 Recreation Supervisor Streets Maintenance Supervisor
Parks, Tree & Landscape Supervisor
Utilities/Water & Sewer System Supervisor
Soto Sports Complex Maint & Coord. Supervisor
SEIU Annual S36 $79,646.77 $83,629.11 $87,810.57 $92,201.10 $96,811.15 SEIU Annual S37 $81,637.94 $85,719.84 $90,005.83 $94,506.12 $99,231.43 SEIU Annual S38 $83,678.89 $87,862.84 $92,255.98 $96,868.78 $101,712.22 IT Specialist Assistant Engineer
Engineering Inspector
Program Analyst
Citywide Fleet Coordinator
SEIU Annual S39 $85,770.86 $90,059.41 $94,562.38 $99,290.50 $104,255.02 SEIU Annual S40 $87,915.14 $92,310.89 $96,926.44 $101,772.76 $106,861.40 SEIU Annual S41 $90,113.01 $94,618.67 $99,349.60 $104,317.08 $109,532.93 SEIU Annual S42 $92,365.84 $96,984.14 $101,833.34 $106,925.01 $112,271.26 SEIU Annual S43 $94,674.99 $99,408.74 $104,379.17 $109,598.13 $115,078.04 Associate Engineer SEIU Annual S44 $97,041.86 $101,893.95 $106,988.65 $112,338.08 $117,954.99 SEIU Annual S45 $99,467.91 $104,441.30 $109,663.37 $115,146.54 $120,903.86 SEIU Annual S46 $101,954.61 $107,052.34 $112,404.95 $118,025.20 $123,926.46 Senior Engineer SEIU Annual S47 $104,503.47 $109,728.64 $115,215.08 $120,975.83 $127,024.62 SEIU Annual S48 $107,116.06 $112,471.86 $118,095.45 $124,000.23 $130,200.24 SEIU Annual S49 $109,793.96 $115,283.66 $121,047.84 $127,100.23 $133,455.24 SEIU Annual S50 $112,538.81 $118,165.75 $124,074.04 $130,277.74 $136,791.62

Group
Rate
Type Range Step 1 Step 2 Step 3 Step 4 Classification
Part-Time Hourly PT10 $19.27 $20.23 $21.25 $22.30 Police Intern (Cadet) Part-Time Hourly PT11 $24.72 $25.95 $27.25 $28.61 Records Clerk Part-Time Hourly PT18 $17.81 $18.71 $19.64 $20.63 Facility Attendant Sports Facility Attendant
Part-Time Hourly PT19 $23.36 $24.53 $25.75 $27.04 Recreation Specialist Part-Time Hourly PT20 $18.94 $19.88 $20.88 $21.92 Senior Facility Attendant Part-Time Hourly PT22 $29.24 $30.70 $32.23 $33.84 Volunteer and Program Coordinator Part-Time Hourly PT24 $18.70 $19.64 $20.62 $21.65 Administrative Intern Part-Time Hourly PT25 $19.98 $20.98 $22.02 $23.13 Office Assistant Part-Time Hourly PT27 $24.28 $25.50 $26.78 $28.11 Senior Office Assistant Part-Time Hourly PT28 $29.38 $30.85 $32.40 $34.01 Administrative Assistant Part-Time Hourly PT29 $33.22 $34.88 $36.63 $38.45 Executive Assistant Human Resources Specialist
Part-Time Hourly PT37 $24.79 $26.03 $27.33 $28.70 Building Maintenance Worker Part-Time Hourly PT38 $17.81 Student Intern (seasonal)
Part-Time Hourly PT39 $21.27 $22.34 $23.45 $24.62 Office Assistant II (FCFA)

Item 9.e.
65501.00014\45123681.1

MEMORANDUM
TO: City Council
FROM: Shannon Sweeney, Acting Public Works Director/City Engineer SUBJECT: Notice of Award, Halcyon Complete Streets, PW 2023-15 DATE: June 23, 2026
RECOMMENDATION:
1) Reject low bidder, Edward’s Construction Group, Inc., as non-responsive; 2) Authorize the City Manager or designee to execute a construction contract for the Halcyon Complete Streets Project (Project) to the second lowest bidder, V. Lopez Jr. & Sons (V. Lopez) for $6,653,626.14, subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney; 3) Authorize the City Manager to approve change orders of 10% of the contract amount, $665,362.61, for unanticipated costs during the construction phase of the Project; and 4) Approve two budget amendments for construction of the Project.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

Total anticipated construction costs for this project is shown in Table 1.

Table 1: Anticipated Construction Costs
The City Council is asked to approve two budget adjustments; to appropriate $231,718 from the Transportation Facilities Development Impact Fee (DIF) Fund to this CIP project as stated in the DIF schedule to support 50% of the cost to complete the roundabout; and to appropriate $1,875,000 of Measure E-24 Local Sales Tax Funds from this CIP project to the Pavement Management Project (PMP).

Construction 6,653,626.14
Contingency 665,362.61
Surveying/Monumentation 32,242.00
Special Materials Testing 200,000.00
Staff Oversight 100,000.00
7,651,230.75

Item 9.e.
65501.00014\45123681.1
City Council
Notice of Award, Halcyon Complete Streets, PW 2023-15
June 23, 2026

BACKGROUND:

The City worked with a design consultant to develop plans and specifications. The engineer’s estimate as designed was $7,380,000. On April 28, 20261, staff presented 100% plans to City Council and received authorization to proceed with advertisement. A Notice Inviting Bids was issued on May 11, 2026. The Notice Inviting Bids was published in the local paper, posted on the City’s website, and distributed to plan rooms.

Five bids were received by the bid opening date and time of June 9, 2026, 2:00 PM, ranging from $6,038,706.51 to $10,331,385.00, as shown in Attachment 2.

ANALYSIS OF ISSUES:

Following the bid opening, City staff reviewed the bids submitted for the Project, including the bid submitted by Edwards Construction Group Inc. (“Edwards Construction”). Based on that review, staff determined that the bid submitted by Edwards Construction is nonresponsive because it does not appear to be a balanced bid and does not accurately reflect the cost to perform certain portions of the Project.

Article 20 of the Instructions to Bidders expressly reserves the City’s right to “reject any or all Bids and to waive any informality or irregularity in any Bid.” In addition, Article 31, Basis of Award; Balanced Bid, provides that the City shall award the Contract to the lowest responsible bidder submitting a responsive bid. Article 31 further provides that the City may reject any bid which, in the City’s opinion, when compared to other bids received or to the City’s internal estimates, does not accurately reflect the cost to perform the Project.

Article 31 also authorizes the City to reject as non-responsive any bid that unevenly weights or allocates costs, including overhead and profit, to one or more particular bid items.

Based on the bid tabulations, staff identified material discrepancies in the pricing submitted by Edwards Construction for certain bid items, including general conditions and temporary traffic control. The amounts included for these items were significantly lower than the corresponding amounts submitted by the other bidders and appeared to be materially below the cost reasonably necessary to perform that work. Although a lower price is generally favorable to the City, the concern here is that the pricing structure does not appear to accurately reflect the actual cost of performance and instead appears to unevenly allocate costs across the bid schedule. Balanced bid requirements are intended to protect the integrity of the bidding process and ensure that the City can fairly compare bids on an equal basis. Where a bid appears to materially understate certain required work or shift costs to other portions of the bid, the City may reasonably determine that the bid is non-responsive because it does not comply with the bidding requirements and may expose the City to risk during contract administration.

1https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=01614b02-b589-4744-ba18- 6ce404b6e869&Agenda=Agenda&lang=English&Item=44&Tab=attachments

Item 9.e.
65501.00014\45123681.1
City Council
Notice of Award, Halcyon Complete Streets, PW 2023-15
June 23, 2026

On June 15, 2026, the City informed Edwards Construction that staff had determined its bid to be non-responsive. On June 16, 2026, Edwards Construction submitted a protest challenging the merits of that determination. However, Article 31 expressly provides that “No bidder shall have any claim on account of the City’s exercise of this discretion.” Notwithstanding that provision, and in coordination with legal counsel, City staff prepared and sent its response to Edwards Construction on June 18, 2026 reaffirming the City’s position that Edwards Construction’s bid was properly deemed non-responsive and advising that staff intended to proceed with a recommendation to award the contract to V. Lopez Jr. & Sons.

Accordingly, pursuant to the discretion reserved to the City under Article 20 and Article 31 of the Instructions to Bidders, staff has determined that the bid submitted by Edwards Construction is non-responsive and recommends that the City Council reject the bid. Staff further recommends that the City Council award the Contract to V. Lopez Jr. & Sons as the lowest responsive and responsible bidder.

Budget Adjustment
The FY 2025-26 budget includes $9,428,500 for construction of the Project. Staff identified two budget adjustment requests that are described in more detail below:
 Transportation Facilities DIF: Appropriate $231,718 from the Transportation Facilities Fund towards the Halcyon/Fair Oaks roundabout. The DIF Nexus Study2 completed in 2024 identified that 50% of the Halcyon/Fair Oaks roundabout may be funded with development impact fees. The original budget included $788,500 because the estimated cost of the roundabout when the budget was developed was $1,577,000. The actual cost of the roundabout from V. Lopez’s bid sheet schedule is $2,040,436; 50% of the actual cost is $1,020,218.  Measure E-24 Sales Tax Fund: Reallocate $1,875,000 from the Halcyon Complete Streets project to the PMP project listed in the agenda as item 9.g. Halcyon Complete Streets project has adequate funding to complete the project as shown in Table 2.

Table 2: Halcyon Complete Streets Updated Budget

2 https://www.arroyogrande.org/DocumentCenter/View/12147/Arroyo-Grande---Development-Impact-FeeNexus-Study-Update Funding Source
FY 2025-26
Budget
Budget
Adjustment
Updated
Budget
Active Transportation Grant 6,765,000 6,765,000
Transportation Facilities DIF 788,500 231,718 1,020,218 Measure E-24 1,875,000 (1,875,000) -
9,428,500 (1,643,282) 7,785,218

Item 9.e.
65501.00014\45123681.1
City Council
Notice of Award, Halcyon Complete Streets, PW 2023-15
June 23, 2026

Staff recommend that City Council approve an additional $231,718 in Transportation Facilities DIF and a reduction in Measure E-24 funding for this project. Based on the costs in Table 1, estimated construction costs to complete this Project total $7,651,230.75 and are within the non-general fund money available.

ALTERNATIVES:

1. Proceed with staff’s recommendation;

2. Do not proceed with staff’s recommendation; or

3. Provide other direction to staff.

ADVANTAGES:

Completing this Project will provide the following advantages:
 Mitigate future disruptions to traffic and parking for maintenance and repairs;  Improve the use of the road for pedestrians and cyclists;  Maximize state funding to improve this vital circulation corridor.

DISADVANTAGES:

Completing this Project will provide the following disadvantages:
 Significant disruption to vehicles and pedestrians, including parking.  Potential negative impact to businesses adjacent to the construction site. Staff will approve traffic control plans, scheduling and sequencing to reasonably minimize the impacts. City staff will be at the site during construction to adjust the traffic control as needed (driveway access, etc.).

ENVIRONMENTAL REVIEW:

On July 25, 20233, the City Council adopted a Mitigated Negative Declaration (MND) for the Halcyon Complete Streets Project. The MND analyzed the environmental impacts of the Project in compliance with CEQA. Advertising this project for construction will have no direct or indirect physical impacts and does not constitute a substantial change to the Project such that revisions to the previously adopted MND are required. Thus, none of the conditions requiring subsequent environmental review called out in State CEQA Guidelines section 15162 or Public Resources Code section 21166 are present, and no further environmental review is required.

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. Resolution

2. Bid Opening Log

3https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=ba95ddc8-1575-42c7- ae715ba712dab1bc&Agenda=Agenda&lang=English&Item=35&Tab=attachments

Item 9.e.
65501.00014\45123681.1
City Council
Notice of Award, Halcyon Complete Streets, PW 2023-15
June 23, 2026

3. City’s June 15 Letter to Edwards Construction

4. Edwards Construction Protest Letter

5. City’s June 18 Letter to Edwards Construction

6. Agreement

ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE TO 1) REJECT LOW BIDDER, EDWARD’S CONSTRUCTION
GROUP, INC., AS NON-RESPONSIVE; 2) AUTHORIZE THE CITY

MANAGER OR DESIGNEE TO EXECUTE A CONSTRUCTION

CONTRACT FOR THE HALCYON COMPLETE STREETS PROJECT
(PROJECT) TO THE SECOND LOWEST BIDDER, V. LOPEZ JR. & SONS (V. LOPEZ) FOR $6,653,626.14, SUBJECT TO ANY MINOR,

TECHNICAL, OR NON-SUBSTANTIVE CHANGES AS APPROVED BY
THE CITY MANAGER IN CONSULTATION WITH THE CITY ATTORNEY; 3) AUTHORIZE THE CITY MANAGER TO APPROVE CHANGE ORDERS
OF 10% OF THE CONTRACT AMOUNT, $665,362.61, FOR

UNANTICIPATED COSTS DURING THE CONSTRUCTION PHASE OF
THE PROJECT; AND 4) APPROVE TWO BUDGET AMENDMENTS FOR
CONSTRUCTION OF THIS PROJECT.

WHEREAS, The FY 2025-26 budget includes $9,428,500 for construction of the Project; and
WHEREAS, The Transportation Facilities Development Impact Fee (DIF) Fund to this CIP project as stated in the DIF schedule may support 50% of the cost to complete the roundabout portion of this project; and
WHEREAS, On April 28, 2026 staff presented 100% plans to City Council and received authorization to proceed with advertisement. A Notice Inviting Bids was issued on May 11, 2026. The Notice Inviting Bids was published in the local paper, posted on the City’s website, and distributed to plan rooms; and
WHEREAS, Five bids were received by the bid opening date and time of June 9, 2026, 2:00 PM, ranging from $6,038,706.51 to 10,331,385.00; and WHEREAS, Following the bid opening, City staff reviewed the bids submitted for the Project, including the bid submitted by Edwards Construction Group Inc. (“Edwards Construction”). Based on that review, staff determined that the bid submitted by Edwards Construction is non-responsive because it does not appear to be a balanced bid and does not accurately reflect the cost to perform certain portions of the Work; and WHEREAS, Grant funding and DIF are sufficient to complete this project without the additional $1,875,000 of general funding originally funded for this project.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande does hereby reject low bidder, Edward’s Construction Group, Inc., as nonresponsive;.

RESOLUTION NO.

PAGE 2
BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does hereby authorize the City Manager or designee to execute a construction contract for the Halcyon Complete Streets Project (Project) to the second lowest bidder, V. Lopez Jr. & Sons (V. Lopez) for $6,653,626.14, subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney.

BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does hereby authorize the City Manager to approve change orders of 10% of the contract amount, $665,362.61, for unanticipated costs during the construction phase of the Project.

BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does hereby approve two budget adjustments: 1)Appropriate $231,718 from the Transportation Facilities Development Impact Fee (DIF) Fund to this CIP project as stated in the DIF schedule to support 50% of the cost to complete the roundabout, and 2) appropriate $1,875,000 of Measure E-24 Local Sales Tax Funds from this CIP project to the Pavement Management Project (PMP).

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 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

1057451
607333
358030
89 939644
License #
ATTACHMENT 2

ATTACHMENT 3

DATE: June 16, 2026
TO:

Shannon Sweeney
Acting Public Works Director / City Engineer
City of Arroyo Grande
1375 Ash Street
Arroyo Grande, CA 93420
FROM:

Brad Edwards, President
Edwards Construction Group Inc.
991 Bennett Ave
Arroyo Grande, CA 93420
RE: Protest Supplement – Rejection of Bid for Halcyon Complete Streets Project ATPSB1-5199(035)
Dear Ms. Sweeney,
This letter serves as a formal "Protest Supplement" on behalf of Edwards Construction Group Inc. ("Edwards") regarding the City of Arroyo Grande’s ("City") letter dated June 15, 2026, which notified us of the City’s intent to reject our bid as non-responsive.

We respectfully but firmly refute the City’s determination that our bid was "unbalanced" or "non-responsive". Under Public Contract Code § 20162, the City has a clear statutory duty to award the contract to the lowest responsible bidder. As the lowest bidder for the Project, Edwards is entitled to the award unless the City can demonstrate a material failure to comply with the bid specifications.It is our firm position that the City's invocation of this clause to disqualify the most competitive proposal constitutes a clear abuse of administrative discretion. This determination is devoid of a substantial factual foundation and stands in direct contravention of the core tenets of competitive public procurement as established under California law.

In public contracting, a bid is only "unbalanced" in a way that warrants rejection if it is mathematically unbalanced (e.g., front-loading costs in a way that suggests fraud or severe risk to the project's completion) or materially unbalanced (e.g., creating an outcome where the lowest total bid price is no longer actually the lowest price due to skewed quantities). The City’s rejection fails to meet the threshold of a 'material' deviation from the bid instructions. A ATTACHMENT 4

mere variance from the engineer’s estimate or the 'average' of other bidders does not constitute a valid basis for rejection under the Public Contract Code Arbitrary Misclassification of Price Competitiveness
The City’s June 15 letter alleges that Edwards' pricing for general conditions and temporary traffic control does not "accurately reflect the cost to perform the Work" and falls below "staff’s expectations". This reliance on subjective staff expectations is legally prohibited. In Pozar v. Department of Transportation (1983) 145 Cal.App.3d 269, the court held that public agencies have a ministerial duty to follow established, objective criteria in bid evaluations rather than relying on internal, subjective benchmarks or expectations.

The "unbalanced" classification is an arbitrary mischaracterization of Edwards’ legitimate competitive advantages. Our headquarters is located at 991 Bennett Ave in Arroyo Grande, providing us with immediate geographic proximity to the Project site. This proximity allows for significant operational efficiencies, reduced mobilization costs, and streamlined traffic control logistics that bidders from outside the immediate area simply cannot match.

Our lower pricing for these line items reflects these real-world efficiencies, not a failure to understand or allocate the scope of work. Furthermore, our lower costs for traffic control are legitimately derived from our ownership of a comprehensive inventory of traffic control signage, which eliminates some of the rental and lease overhead that other bidders might have factor into their proposals. Our estimate for traffic control is sufficient to meet all safety requirements and contract specifications. A lower cost does not equate to a failure to perform or a failure to comply with the scope of work.

The concept of “responsiveness” in public works bidding refers to whether a bidder has complied with the material requirements of the bid package (e.g., submitting required forms, bonds, and certifications). The City is attempting to reclassify price competitiveness as non-responsiveness. By rejecting the lowest bid based on a subjective evaluation of “balanced costs,” the City is contravening the intent of the Public Contract Code, which is to protect the public from paying higher costs for the same work. This is a misapplication of Article 31.

Purpose of Competitive Bidding

The core purpose of competitive bidding is to "guard against favoritism, improvidence, extravagance, fraud and corruption, and to secure the best work or supplies at the lowest price practicable" (Konica Business Machines U.S.A. v. The Regents of the University of California (1988) 206 Cal.App.3d 449). By rejecting the lowest bid due to its competitiveness, the City is effectively subverting the goal of avoiding the misuse of public funds.

Furthermore, the City’s concerns regarding line-item allocation do not constitute a "material" irregularity. As established in Valley Crest Landscape, Inc. v. City of Davis (1996) 41 Cal.App.4th 1432, a bid variation is only material if it gives a bidder a substantial advantage or benefit not enjoyed by other bidders. Edwards has sought no such advantage; we have simply provided the most aggressive and efficient pricing based on our local presence and operational model.

Procedural Deficiency and Burden of Proof
Furthermore, the City bears the burden of establishing a factual, objective record to justify the rejection of the lowest responsive bidder. The City’s reliance on "staff expectations" regarding line-item costs is not a substitute for the substantial evidence required to disqualify a bidder. Absent a showing that Edwards’ bid is mathematically or materially unbalanced in a way that prejudices the City or undermines the project's financial integrity, the rejection is unsupported. Mere variance from other bidders’ line-item allocations, when justified by actual operational efficiencies and equipment ownership, does not constitute a material defect.

Conclusion
The City’s intent to recommend the award to V. Lopez Jr. & Sons despite Edwards’ lower bid would result in an unnecessary and legally questionable expenditure of public funds. We formally request that the City rescind its rejection of Edwards’ bid and proceed with the award to Edwards Construction Group Inc. as the lowest responsive and responsible bidder.

We look forward to your prompt response. Please provide written confirmation of receipt of this protest
Sincerely,

Brad Edwards
President, Edwards Construction Group Inc.

CITY OF
City of Arroyo Grande
Public Works Department - Engineering Division
June 18, 2026
Edwards Construction Group, Inc.

Attn: Brad Edwards, President
991 Bennett Ave
Arroyo Grande, CA 93420

CITY OF
Sent via email to [email protected]. Hard copy to follow via postal service

CALIFORNIA
RE: Rejection of Edwards Construction Group, Inc. Bid for Halcyon Complete Streets Project ATPSBl-5199(035)
Dear Mr. Edwards,
The City of Arroyo Grande ("City") is in receipt of Edwards Construction Group, Inc. 's ("Edwards") letter dated June 16, 2026 protesting the City's determination that Edwards' bid for the above captioned project was nonresponsive ("Protest"). The City rejects the request to rescind its rejection of Edwards bid and intends to move forward with recommendation to the City Council for award of the Project to V. Lopez Jr. & Sons.

It must be remembered, in accordance with Mike Moore's 24-Hour Towing v. City of San Diego (1996) 45 Cal.App.4th 1294, 1303 ("Mike Moores Towing") that "[a] public entity's award of a contract, and all of the acts leading up to the award, are legislative in character and that "the letting of contracts by a governmental entity necessarily requires an exercise of discretion guided by consideration of the public welfare[]" Id. at 1211. If the City Council, in its legislative judgment, guided by considerations of the public welfare, elects to award the contract to the apparent low bidder submitting a responsive bid, V. Lopez Jr. & Sons, and the rejection of a bid deemed non-responsive, such action will be lawful unless unsupported, arbitrary, and capricious. The City's decision in this matter is neither arbitrary nor capricious and is supported by the record.

A mathematically unbalanced bid is defined as a bid "containing lump sum or unit bid items which do not reflect reasonable actual costs plus a reasonable proportionate share of the bidder's anticipated profit, overhead costs, and other indirect costs. 23 CFR 635.102 (See also, Paramount Petroleum Corp. v. Intern. Surfacing Systems Inc., 2013 WL 12152641, at 5 (Cal. Super.). A materially unbalanced bid is one where "there is a reasonable doubt that award to the bidder submitting the mathematically unbalanced bid will result in the lowest ultimate cost to the Government." 23 CFR 635.102 (See also, Matter of Crown Laundry and Dry Cleaners, Comp. Gen. B208795.2, Apri 1 22, 1983 .) Additionally, Section 15.814, 48 Code of Federal Regulations, defines a "mathematically unbalanced" bid as a bid "based on prices which are significantly less than cost for some contract line items and significantly overstated in relation to cost for others." PUBLIC WORKS DEPARTMENT• 1375 Ash Street• Arroyo Grande, California 93420 Phone: (805) 473-5460 • Fax: (805) 473-5462 • E-mail: [email protected] • Website: www.arroyogrande.org ATTACHMENT 5

CONSTRUCTION CONTRACT
This CONTRACT is made and entered into this 23rd day of June 2026, by and between City of Arroyo Grande, sometimes hereinafter called “City,” and V. Lopez Jr. & Sons General Engineering Contractors Inc., sometimes hereinafter called “Contractor.” WITNESSETH: That the parties hereto have mutually covenanted and agreed, and by these presents do covenant and agree with each other as follows:
a. SCOPE OF WORK. The Contractor shall perform all Work within the time stipulated in the Contract, and shall provide all labor, materials, equipment, tools, utility services, and transportation to complete all of the Work required in strict compliance with the Contract Documents as specified in Section (e), below, for the following Project:

HALCYON COMPLETE STREETS PROJECT
ATPSB1-5199(035)
The Contractor and its surety shall be liable to the City for any damages arising as a result of the Contractor’s failure to comply with this obligation. b. TIME FOR COMPLETION. Time is of the essence in the performance of the Work. The Work shall be commenced on the date stated in the City’s Notice to Proceed. The Contractor shall complete all Work required by the Contract Documents within 280 WORKING DAYS from the commencement date stated in the Notice to Proceed. By its signature hereunder, Contractor agrees the time for completion set forth above is adequate and reasonable to complete the Work. c. CONTRACT PRICE. The City shall pay to the Contractor as full compensation for the performance of the Contract, subject to any additions or deductions as provided in the Contract Documents, and including all applicable taxes and costs, the sum of Six Million Six Hundred Fifty-Three Thousand Six Hundred Twenty-Six Dollars and Fourteen Cents ($6,653,626.14).

Payment shall be made as set forth in the General Conditions. d. LIQUIDATED DAMAGES. In accordance with Government Code section 53069.85, it is agreed that the Contractor will pay the City the sum set forth in Section 00 73 13, Article 1.11 for each and every calendar day of delay beyond the time prescribed in the Contract Documents for finishing the Work, as Liquidated Damages and not as a penalty or forfeiture. In the event this is not paid, the Contractor agrees the City may deduct that amount from any money due or that may become due the Contractor under the Contract. This Article does not exclude recovery of other damages specified in the Contract Documents.
e. COMPONENT PARTS OF THE CONTRACT. The “Contract Documents” include the following:

Notice Inviting Bids
Instructions to Bidders
Bid Form
Bid Bond
Designation of Subcontractors
Information Required of Bidders
Non-Collusion Declaration Form
Iran Contracting Act Certification
ATTACHMENT 6

Public Works Contractor Registration Certification
Fleet Compliance Certification
Performance Bond
Payment (Labor and Materials) Bond
General Conditions
Special Conditions
Technical Specifications
Addenda
Plans and Drawings
Applicable Local Agency Standards and Specifications, as last revised Approved and fully executed change orders
Any other documents contained in or incorporated into the Contract The Contractor shall complete the Work in strict accordance with all of the Contract Documents.

All of the Contract Documents are intended to be complementary. Work required by one of the Contract Documents and not by others shall be done as if required by all. This Contract shall supersede any prior agreement of the parties.
f. PROVISIONS REQUIRED BY LAW AND CONTRACTOR COMPLIANCE. Each and every provision of law required to be included in these Contract Documents shall be deemed to be included in these Contract Documents. The Contractor shall comply with all requirements of applicable federal, state and local laws, rules and regulations, including, but not limited to, the provisions of the California Labor Code and California Public Contract Code which are applicable to this Work.
g. INDEMNIFICATION. Contractor shall provide indemnification and defense as set forth in the General Conditions.
h. PREVAILING WAGES. Contractor shall be required to pay the prevailing rate of wages in accordance with the Labor Code which such rates shall be made available at the City’s Administrative Office or may be obtained online at http://www.dir.ca.gov and which must be posted at the job site.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

IN WITNESS WHEREOF, this Contract has been duly executed by the above-named parties, on the day and year above written.

City of Arroyo Grande
Approved By:

Matthew Downing, City Manager
Attested By:

Jessica Matson, City Clerk
Approved As To Form:

Isaac Rosen, Best Best & Krieger
City Legal Counsel
V. Lopez Jr. & Sons General
Engineering Contractors Inc.,
Vince Lopez III, President
[email protected]

END OF CONTRACT

EXHIBIT ‘A’

BID FORM INCLUDING BID SCHEDULE

MEMORANDUM
TO: City Council
FROM: Jessica Matson, Director of Legislative & Information Services/ City Clerk
SUBJECT: Supplemental Information
Agenda Item 9.e – June 23, 2026 City Council Meeting
Notice of Award, Halcyon Complete Streets, PW 2023-15
DATE: June 22, 2026
Attached is correspondence received for the above referenced Item.

Cc: City Manager
Acting Director of Public Works/City Engineer
City Attorney
City Clerk
City Website and Public Review Binder
Enc

June 19, 2026
VIA EMAIL AND U.S. CERTIFIED MAIL AND RETURN RECEIPT
[email protected]
Isaac Rosen

BEST BEST & KRIEGER LLP

CITY OF ARROYO GRANDE
300 South Grand Avenue, 25th Floor
Los Angeles, CA 90071
Re: Rejection of Bid – Halycon Complete Streets Project ATPSB1-5199(035) Dear Mr. Rosen:

Edwards Construction Group Inc. (“Edwards Construction”) retained my office to represent it with respect to the City of Arroyo Grande’s (“City”) improper rejection of the Edwards Construction bid (“Bid”) for the Halycon Complete Streets Project ATPSB1- 5199(035) (“Project”). This letter is directed to your attention because you are listed as the City Attorney on the City’s website. If this is not correct, please notify me immediately.

Please direct all further correspondence related to this matter to my attention.

The letter is in response to the City’s letter dated June 18, 2026 (“Protest Rejection Letter”).

The City’s Protest Rejection Letter notified Edwards Construction that the City was rejecting the Edwards Construction letter dated June 16, 2026, protesting the City’s determination that the Edwards Construction Bid was nonresponsive and its intent to award the Project to V. Lopez Jr. & Sons (“Protest Supplement”) and, for the first time, attempted to provide a legal and factual basis for its rejection of the Bid. The City’ Protest Rejection Letter, however, still fails to provide an adequate legal or factual justification for its rejection of the Bid. This letter is addressed to you because the City concluded its Protest Rejection Letter by stating that it would not respond to any further correspondence from Edwards Construction.

Edwards Construction is an experienced public works contractor based in Arroyo Grande.

Edwards Construction’s Bid totaled $6,038,707, which is $614,919 less than the bid from V. Lopez Jr. & Sons. The City’s Rejection Letter rests on a flawed understanding of bid responsiveness, the discretion afforded to public agencies in California when bidding public works projects, and fails to establish an adequate basis for rejecting Edwards Construction’s Bid as nonresponsive. In choosing to reject Edwards Construction’s Bid arbitrarily, the City created the very appearance of favoritism and corruption that

Isaac Rosen

BEST BEST & KRIEGER LLP
June 19, 2026

California’s public contracting laws were created to avoid. Nothing in the City’s Rejection Letter comes close to justifying the waste of $614,919 in tax payer dollars which would result if the City awarded the Project to the second lowest bidder instead of Edwards Construction.

This letter is intended to be:

1. A request under the California Public Records Act, Government Code section 7920.000 et seq., for (1) copies of the bids submitted by all of the bidders for the Project including, but not limited to, Edwards Construction and V. Lopez Jr. & Sons, (2) the City’s estimate for the Project, (3) any and all materials the City consulted or relied on in making its determination that Edwards Construction was nonresponsive.

2. A request under Government Code section 54954.1 for written notice of all meetings of the City at which any issues pertaining to the award of that contract are on the agenda for the meeting. If there is any fee for this service, please telephone that information to us immediately, so we can promptly pay the fee.

3. A request to be informed (by telephone or fax) as soon as any staff reports or recommendations concerning any issues pertaining to the award of that contract are available to the public, so we can immediately inspect those reports or recommendations.

4. A request to address the City before or during consideration of any issues pertaining to the award of that contract, which opportunity is guaranteed by Government Code section 54954.3, subdivision (a).

If this letter is not sufficient to accomplish any of these purposes, please let us know immediately what else is required, so we can comply. If we do not hear from you, we will proceed on the basis that this letter is sufficient.

RELEVANT PROCEDURAL HISTORY
The City opened the bids for the Project on June 9, 2026. (Ex. 1.) Edwards Construction submitted the lowest bid at $6,038,706.51, with V. Lopez Jr. & Sons the second lowest bidder at $6,653,626.44, which was $614,919 more than Edwards Construction’s Bid. The bid spread ranged from Edwards Construction’s low bid to the highest bid of $10,331,385 from Granite Construction.

On June 15, 2026, the City sent Edwards Construction a letter summarily rejecting its Bid as nonresponsive and informing Edwards Construction that the City intended to award the Project to V. Lopez Jr. & Sons (“Bid Rejection Letter”). (Ex. 2.) The City’s Bid Rejection Letter did not provide a detailed factual basis for its determination that Edwards Construction’s Bid was nonresponsive, merely stating that “the amounts for general

Shannon Sweeney

CITY OF ARROYO GRANDE
June 19, 2026

conditions and temporary traffic control, among other line items, were significantly lower than the amounts submitted by other bidders and materially below staff’s expectations for that work.” The City’s Bid Rejection Letter did not ask for clarification or otherwise solicit a response. Instead, the City argued “that Edwards Construction has no claim on account of the City’s exercise of this discretion.” As will be seen, this is a misstatement of the applicable laws.

Also on June 15, 2026, the City issued its Notice of Intent to Award (“Notice of Intent”), informing all bidders that the City intended to award the Project to V. Lopez Jr. & Sons. (Ex. 3.) The Notice of Intent claimed that “[a]ny proposer wishing to protest this intended award must have done so in accordance with the procedures set forth in the Bid Book” and that “[p]rotests must have been received by within 5 calendar days of the bid opening, which was June 9, 2026. As will be seen, not only is this a misstatement of the applicable laws, but it is also a misstatement of the City’s own Bid Documents.

On June 16, 2026, Edwards Construction submitted a letter responding to the City’s Bid Rejection Letter and protesting the City’s decision to award the Project to V. Lopez Jr. & Sons (“Protest Supplement”). (Ex. 4.) Although its response was complicated by the lack of detail in the City’s Bid Rejection Letter, Edwards Construction explained that, because it was based in Arroyo Grande, it did not need to include many of the mobilization costs out of town contractors like V. Lopez Jr. & Sons would incur. Edwards Construction also explained that it owned many of the traffic control devices that would be needed during the Project, reducing the rental charges necessary to complete the temporary traffic control during the Project.

On June 17, 2026, the City issued a letter summarily rejecting Edwards Construction’s Protest Supplement and confirming that it intended to proceed with awarding the Project to V. Lopez Jr. & Sons (“Protest Rejection Letter”). (Ex. 5.) For the first time, the City provided an explanation for its determination. But while the City acknowledged receipt of Edwards Construction’s Protest Supplement, it did not provide a meaningful response to Edwards Construction’s explanation. The City did not acknowledge Edwards Construction’s explanation for its lower general conditions costs in any way, and merely acknowledged receipt of Edwards Construction’s explanation for its lower temporary traffic control pricing without further addressing it. The City concluded its Protest Rejection Letter by claiming that “[t]his will be the City’s final correspondence in this matter.”

THE CITY CANNOT AWARD THE PROJECT TO A BIDDER THAT DID NOT SUBMIT THE LOWEST RESPONSIVE BID.

Although the City may reject all bids, it does not have the discretion to reject Edwards Construction’s Bid and instead award to the Project to V. Lopez Jr. & Sons at a cost increase of $614,919 to the public. Instead, California law mandates that cities must competitively bid public works contracts and may only award the contract to the lowest responsible bidder that submits a responsive bid. (Valley Crest Landscape, Inc. v. City

Isaac Rosen

BEST BEST & KRIEGER LLP
June 19, 2026

Council (1996) 41 Cal.App.4th 1432, 1438 [citing Pub. Cont. Code, § 20162] [“Valley Crest”].) Here Edwards Construction is the lowest responsible bidder and it submitted a responsive bid. The City may not award the Project to another bidder.

The Legislature enacted the Public Contract Code to protect “the public from misuse of public funds” by “stimulating competition in a manner conducive to sound fiscal practices” and eliminating “favoritism, fraud, and corruption in the awarding of public contracts.” (Pub. Cont. Code, § 100.) “Because of the potential for abuse arising from deviations from strict adherence to standards which promote these public benefits, the letting of public contracts universally receives close judicial scrutiny and contracts awarded without strict compliance with bidding requirements will be set aside.” (Konica Business Machs. U. S.

A. v. Regents of Univ. of Cal. (1988) 206 Cal.App.3d 449, 456-457] [emphasis added].) The Public Contract Code is intended to protect the public, and “protect[ing] innocent bidders and their listed subcontractors from arbitrary or erroneous disqualification from public works contracting [is] a purpose fully consistent with the act.” (D.H. Williams Construction, Inc. v. Clovis Unified School Dist. (2007) 146 Cal.App.4th 757, 766.) And even “a reasoned decision based on the reasonable view of the scope of discretion is still an abuse of judicial discretion when it starts from a mistaken premise, even though nothing about the exercise of discretion is, in ordinary-language use of the phrase, beyond the bounds of reason.” (Great West Contractors, Inc. v. Irvine Unified School Dist. (2010) 187 Cal.App.4th 1425, 1459 [internal quotes omitted] [emphasis in the original].) The City may not rely on Mike Moore’s Towing1 to justify its improper rejection of Edwards Construction’s Bid. Somewhat curiously for the primary case the City cites as its justification for its rejection of Edwards Construction’s Bid, Mike Moore’s Towing does not include a single reference to the Public Contract Code. (See Mike Moore’s 24-Hour Towing v. City of San Diego (1996) 45 Cal.App.4th 1294, 1303.) Instead, the towing contracts at issue in that case were advertised and awarded pursuant to the San Diego Municipal Code, which provided that “contracts for procurement under a request for proposals ‘will be awarded on the basis of the proposal best meeting City requirements,’ including the best economic advantage for the City.” (Id at 1306-1307 [emphasis added].) The San Diego Municipal Code’s open-ended grant of discretion to itself stands in stark contrast with the competitive bidding requirements in the Public Contract Code which require public agencies like the City to award contracts to the lowest responsible bidder that submits a responsive bid. Moreover, even Mike Moore’s Towing, explains that “[t]his test has also been formulated to add an inquiry whether the agency’s decision was ‘contrary to established public policy or unlawful or procedurally unfair.’” (Id. at 1303 [quoting Lewin v. St. Joseph Hospital of Orange (1978) 82 Cal. App. 3d 368, 387].) A case analyzing a statute that gives a city the discretion to determine which bid best satisfied its requirements and gave it the best economic advantage provides little guidance to the interpretation of the Public Contract Code.
1 Although the City cites to page 1211 of Mike Moore’s Towing, that page is not part of the decision, which begins on page 1294.

Shannon Sweeney

CITY OF ARROYO GRANDE
June 19, 2026

In contrast with the discussion of the San Diego Municipal Code in Mike Moore’s Towing, multiple cases discussing the competitive bidding requirements in the Public Contract Code have rejected decisions by public agencies like the City. In Konica Business Machines, the court set aside a contract because the deviations in the bid could not be waived under the Public Contract Code. (Konica Business Machs. U. S. A. v. Regents of Univ. of Cal. (1988) 206 Cal.App.3d 449, 457.) In Valley Crest, the court declared the contract invalid under the Public Contract Code even though the landscaper had already substantially performed the contract. (Valley Crest Landscape, Inc. v. City Council (1996) 41 Cal.App.4th 1432, 1443.) In Great West Contractors, the district improperly rejected a bid as nonresponsive when its investigation and evaluation of the bid was really an investigation of the bidders responsibility, entitling the contractor to seek damages. (Great West Contractors, Inc. v.

Irvine Unified School Dist. (2010) 187 Cal.App.4th 1425, 1458-1460.) These, and other similar decisions, confirm that the City’s discretion is constrained by the strict requirements of the Public Contract Code.

As discussed in greater detail below, the City’s improper determination that Edwards Construction’s Bid was nonresponsive was unlawful because it went outside the four corners of the Bid when evaluating its responsiveness, procedurally unfair because it did not give Edwards Construction an opportunity to respond, and against public policy because it increased the cost to the public and created the appearance of favoritism, the very evils the Public Contract code was enacted to prevent. The competitive bidding requirements in the Public Contract Code, which are strictly enforced by the courts to protect the public fisc and avoid even the appearance of favoritism and corruption, gives lie to the City’s argument that it has the discretion to reject Edwards Construction’s Bid and that Edwards Construction has no recourse for the City’s arbitrary action. Edwards Construction has every right to challenge the City’s decision waste $614,919 in taxpayer dollars by awarding the Project to the second lowest bidder.

EDWARDS CONSTRUCTION SUBMITTED THE LOWEST RESPONSIVE BID.

The test for responsiveness focuses on the four corners of the bid documents and does not consider information or details outside of the bid and bid documents. (Great West Contractors, Inc. v. Irvine Unified School Dist. (2010) 187 Cal. App. 4th 1425, 1453-1454.) As a threshold matter, a bid is responsive if it responds to the requirements included in the bid documents, regardless of the quality of the responses. (Id. at 1456-1457.) Bids must be evaluated from a practical, rather than hypothetical, standpoint, giving due consideration to the public interest being served. (Ghilotti, 45 Cal.App.4th at 908-909; MCM Construction, Inc. v. City and County of San Francisco, 66 Cal. App. 4th 359, 370.) As discussed above, those public interests are getting the best work at the lowest practicable price and avoiding favoritism and corruption. (See Domar Electric, Inc. v. City of Los Angeles (1994) 9 Cal.4th 161, 173.) Due process considerations require that “a bidder determined to be nonresponsive is entitled to notice of that fact and is entitled to submit materials, in a manner defined by the district, concerning the issue of responsiveness.” (Taylor Bus Serv. v. San Diego Bd. of Educ. (1987) 195 Cal.App.3d 1331, 1343.)

Isaac Rosen

BEST BEST & KRIEGER LLP
June 19, 2026

Here the City does not, and cannot, dispute that Edwards Construction submitted a complete Bid that responded to all of the requirements in the Bid Documents. That is the test for responsiveness. (See Great West, supra, 187 Cal. App. 4th at 1456-1457.) Edwards Construction’s Bid is responsive. Instead, the City goes beyond the four corners of Edwards Construction’s Bid to challenge the quality of Edwards Construction’s responses, comparing them not just to the City’s estimates but to the responses submitted by the other bidders as well. This is improper when evaluating a bid’s responsiveness. (See Great West, supra, 187 Cal. App. 4th at 1456-1457.)
Nor did the City give Edwards Construction notice and an opportunity to respond to the City’s determination, as it was required to do even for a rejection based on responsiveness. (See Taylor Bus Serv., supra, 195 Cal.App.3d at 1343.) The City’s Notice of Intent claimed that protests of the City’s decision to award the Project to V. Lopez Jr. & Sons “must have been received by within 5 calendar days of the bid opening, which was June 9, 2026.” Five calendar days after the bid opening date of June 9 is Sunday, June 14, the day before the City notified Edwards Construction of its determination that Edwards Construction that the City was rejecting its Bid and instead awarding the Project to V. Lopez Jr. & Sons. Since 1872, over 150 years ago, it has been enshrined in California law that “[t]he law never requires impossibilities.” (Civ. Code, § 3531.) Yet the City’s position is that Edwards Construction was required to protest the City’s rejection of its Bid before the City issued its Bid Rejection Letter, an obvious impossibility.

Nor is the City’s position in its Notice of Intent consistent with its own Bid Documents.

Under Article 30, Filing of Bid Protests, a Bidder’s protest of another bid must “[b]e filed in writing within five (5) calendar days after the bid opening date.” But that only applies to a Bidder’s protest of another bid. By its express terms, it does not apply to a bidder’s response to a determination of that its bid was not responsive by the City. The City’s Bid Documents are completely silent as to the procedures the City must follow when rejecting a bid for responsiveness on its own, as well as the procedures bidders must follow in response. Due process, however, requires that bidders be given an opportunity to respond. (See Taylor Bus Serv., supra, 195 Cal.App.3d at 1343.)
As reflected in its Bid Rejection Letter and Protest Rejection Letter, the City’s arbitrary decision to reject Edwards Construction’s Bid as nonresponsive is a perfect example of why the Public Contract Code and associated case law established these important limitations on responsiveness reviews by public agencies. Multiple issues with the City’s arbitrary approach are evident.

For starters, the City’s Bid Rejection Letter merely alleges the “the amounts for general conditions and temporary traffic control, among other line items, were significantly lower than the amounts submitted by other bidders and materially below staff’s expectation for that work” without providing any details or documentation substantiating that claim. (Ex.

2.) Although the City recognizes that “lower pricing is generally favorable,” it goes on to state that “the concern here is that the bid does not present a balanced allocation of costs across the bid schedule.” (Ex. 2 [emphasis added].) Notably absent was any indication that

Shannon Sweeney

CITY OF ARROYO GRANDE
June 19, 2026

any of Edwards Construction’s other bid items were unreasonably high. By failing to provide a meaningful basis for its decision, the City’s Rejection Letter makes it impossible to evaluate the merits of the City’s rejection of Edwards Construction’s Bid, not just for Edwards Construction, but more importantly under the Public Contract Code, the City’s taxpayers who the competitive bidding laws were enacted to protect.

Issued three days after its Notice of Intent, the City’s Protest Rejection Letter provides limited support for its determination for the first time. (Ex. 5.) But the City’s Protest Rejection Letter fails to justify its rejection of Edwards Construction’s Bid because it rests on an unreasonable and unsupported reading of the Public Contract Code, fails to provide the documents supporting its determination, and fails to engage with the information in Edwards Construction’s Protest Supplement. As further detailed below, the City’s Protest Rejection Letter ignores Edwards Construction’s explanation of its pricing of the general conditions and temporary traffic control bid items in its Protest Supplement. And the City compounds these errors by again refusing to allow Edwards Construction an opportunity to respond, confirming that its determination is final by dismissively stating that “[t]his will be the City’s final correspondence in this matter.” This is precisely why bid rejections that go beyond evaluating the four corners of a bid and require the application of subtle judgment are outside the purview of a responsiveness determination and require additional due process protections. (See Taylor Bus Serv. v. San Diego Bd. of Educ. (1987) 195 Cal.App.3d 1331, 1341-1342 [discussing the additional requirements for responsibility determinations].) Here, by relying on incomplete information the City used its subtle judgment to determine that Edwards Construction could not complete the Project for the listed price. But because the City did not accord Edwards Construction the due process protections required when evaluating the quality of response, as opposed to the responsiveness, it was missing critical information necessary to a full evaluation of the Bid. (Great West Contractors, Inc. v. Irvine Unified School Dist. (2010) 187 Cal.App.4th 1425, 1455 [explaining that bidder is “entitled to at least a ‘due process hearing’ on the purported nonresponsibility”].) The City’s rejection of Edwards Construction’s Bid went beyond the four corners of the Bid without affording Edwards Construction the due process protections required when the quality of responses to a bid are evaluated. The City’s determination that Edwards Construction’s Bid was nonresponsive was arbitrary and an abuse of limited discretion allowed to public entities under the Public Contract Code.

EDWARDS CONSTRUCTION’S BID IS NOT UNBALANCED.

Edwards Construction’s bid is neither mathematically nor materially unbalanced. The City withheld the bid schedules submitted by V. Lopez Jr. & Sons and the other bidders, making it impossible for Edwards Construction to evaluate the City’s claims or whether the City is holding V. Lopez Jr. & Sons to the same standards it is imposing on Edwards Construction.

This is particularly concerning given that the City’s correspondence has repeatedly suggested that its decisions are driven by favoritism.

Isaac Rosen

BEST BEST & KRIEGER LLP
June 19, 2026

The City’s Protest Rejection Letter fails to explain how Edwards Construction’s Bid is materially unbalanced. Lacking any relevant requirements in the Public Contract Code or published California cases discussing unbalanced bids, the City instead cites federal regulations. The federal regulations define a “mathematically unbalanced bid” as “a bid containing lump sum or unit bid items which do not reflect reasonable actual costs plus a reasonable proportionate share of the bidder’s anticipated profit, overhead costs, and other indirect costs.” (23 CFR § 635.102 (2026).2) A “materially unbalanced bid” is “a bid which generates a reasonable doubt that award to the bidder submitting a mathematically unbalanced bid will result in the lowest ultimate cost to the Federal Government.” (Id.3) The City also cites 48 CFR § 15.814 for support, but that regulation no longer exists and has not since 1997. (See 48 CFR § 15.) Only a bid that is both mathematically and materially unbalanced must be rejected. (23 CFR § 635.114(d) (2026) [explaining that “[a] bid found to be mathematically unbalanced, but not found to be materially unbalanced, may be awarded”].)
The City at least attempts to show that Edwards Construction’s Bid is mathematically unbalanced. But the City’s attempt is flawed. These flaws begin with the mathematical calculations the City made to support its position. The City cites the average of the other four bidders in claiming that Edwards Construction’s Bid underpriced the for Section4 10 General Construction5 and Section 12 Temporary Traffic Control portions of the Project.

But this average includes the bids from JJ Fisher Construction, which totaled 115% of the City’s estimate, and Granite Construction, which totaled 140% of the City’s estimate.

Including two bids that significantly exceeded the City’s estimate in the four bids used to calculate the average cost is going to skew the results higher.

More importantly, the City’s arbitrary decision to reject Edwards Construction’s Bid as nonresponsive without investigation ignores the reasons why Edwards Construction was able to bid the Project for substantially less than the other bidders, or even the City’s own estimate. As explained in its Protest Supplement, Edwards Construction is based in Arroyo Grande, the location of the Project. (Ex. 4.) Its office, which sits on a 1.57-acre lot, is less than two miles from the Project. In contrast, the second lowest bidder, V. Lopez Jr. & Sons, is based in Santa Maria, approximately 20 miles away. Edwards Construction’s local presence provides obvious benefits, particularly related to the mobilization and demobilization, the very bid items the City is concerned that Edwards Construction underbid. (See Ex. 5.)
2 In contrast with the CFR’s definitions, the City’s Bid Documents require bidders to include their overhead and indirect costs in the Mobilization bid item, highlighting the difficulties inherent in applying cases, statutes, and regulations from different jurisdictions. 3 Although the City claims to quote this provision in its Bid Rejection Letter, the City improperly modifies the quote by omitting the word “Federal” without indicating the modification. 4 Although all of the Sections of the City’s Bid Schedule include multiple bid items, the City’s Protest Rejection Letter treats them as if they are a single bid item. Given the City’s failure to provide the supporting documents this further compounds the difficulty in evaluating whether the City is actually comparing Section to Section as represented.
5 Which the City erroneously refers to as General Conditions in its Protest Rejection Letter.

Shannon Sweeney

CITY OF ARROYO GRANDE
June 19, 2026

The General Conditions detail the kind of costs that must be included in the Mobilization and Demobilization bid item. (Ex. 6, § 00 72 13-6.B.) These include “[p]roviding and maintaining the field office trailers for the Contractor, if necessary.” (Emphasis added.) Not only does this recognize that this bid item may vary based on the bidder’s evaluation of whether a field office is necessary, making it impossible to compare the bid items from different bidders, but Edwards Construction does not need a field office trailer because its actual office is close enough to serve as its field office. Similarly, bidders must include costs for “[f]urnishing, installing, and maintaining all storage buildings or sheds required for temporary storage of products, equipment, or materials that have not yet been installed in the Work” and “[a]rranging for and erection of Contractor’s work and storage yard.” Again, this is work that Edwards Construction did not need to include in its Bid because of the proximity of its office. Because Edwards Construction will not need the same level of temporary facilities as out-of-town contractors like V. Lopez Jr. & Sons, it will cost Edwards Construction less for “[m]oving off the job (demobilization), removal, clean up.” Although Edwards Construction’s Protest Supplement explained how its Bid benefited from being a local contractor, the City completely ignored this in its Protest Rejection Letter.

Similarly, in its Protest Supplement Edwards Construction explained that it owns many of the traffic control devices that will need to be used during the Project, which again provides an obvious benefit compared to bidders which must rent all of the required traffic control devices. The City at least acknowledged the Protest Supplement in its Protest Rejection Letter, but it did not do so in any kind of material way. Instead, the City simply stated that “[t]he City is in receipt of Edward’s [sic] argument that its ownership of traffic control equipment may explain some of this discrepancy.” But that mere acknowledgement is the sum total of the City’s response. The City simply ignores Edwards Construction’s explanation in its Protest Rejection Letter.

This leaves Edwards Construction’s pricing for Section 19 Earthwork, which the City did not address for the first time until its Protest Rejection Letter dated June 18, 2026, three calendar days after it issued its Notice of Intent. For the first time, the City alleged that a particular portion of Edwards Construction’s Bid exceeded the City’s estimate and the bids of the other bidders. In contrast with City’s explanation for Section 10 General Construction and Section 12 Temporary Traffic Control, the City omitted the average of the other bidders from its discussion of the Section 19 Earthwork. Because the City failed to provide the documents supporting its determination, there is no way to determine whether this was an oversight or whether the City omitted the average of the other bidders because it did not support the City’s argument.

As the City is aware, two of the four bid items in Section 19 Earthwork are lump sum items.

Of the $515,450 included in Edwards Construction’s Bid for Section 19 Earthwork, $303,780 (58% of the total) is a lump sum for Excavation while an additional $42,000 (9% of the total) is a lump sum for Erosion Control. To the extent that these bid items are higher than the City’s estimate, or the bids from the other bidders, which cannot be determined

Isaac Rosen

BEST BEST & KRIEGER LLP
June 19, 2026

because the City has not provided documents supporting its determination, the City has utterly failed to explain how they could result in the City having to pay a higher overall price for the Project. They are lump sum costs, independent of the quantity of work actually performed. While the costs for Tree Removal and Class II Aggregate Base are at least unit prices, there is no reasonable argument that Edwards Construction’s pricing for these bid items could result in the District having to pay more for the Project.

Edwards Construction’s Bid is $614,919 less than the bid from V Lopez Jr. & Sons. (See Ex. 1.) The City, not Edwards Construction, determined the quantities listed on the bid schedule. Edwards Construction bid a unit price of $690 per tree for the 43 trees the City estimated would need to be removed in the Tree Removal bid item. To exceed the bid from V Lopez Jr. & Sons, the City would have had to have underestimated the number of trees by 892 trees ($614,919 / $690 = 891.2), and that doesn’t even account for the increase in V Lopez Jr. & Sons’ price for the increased number of trees. Encountering 23 times the number of trees the City estimated would need to be removed is outside the bounds of reason.

Similarly, Edwards Construction bid $100 per cubic yard for the 1,400 cubic yards of the City estimated would be required for the Class II Aggregate Base bid item. To exceed the bid from V Lopez Jr. & Sons, the City would have had to have underestimated the quantity of aggregate base required by 6,150 cubic yards ($614,919 / $100 = 6,149.2), and that doesn’t even account for the increase in V Lopez Jr. & Sons’ price for the increased number of trees. Although not as extreme as for the Tree Removal, anticipating that the City’s estimate for the quantity of Class II Aggregate Base is 4.4 times lower is outside the bounds of reason.

Edwards Construction’s Bid is not unbalanced.

THE CITY’S ARBITRARY DECISION CREATES THE APPEARANCE OF FAVORITISM AND THE MISUSE OF PUBLIC FUNDS.

The City’s arbitrary rejection of Edward Construction’s Bid creates the very evils the Public Contract Code was enacted to eliminate. As courts have explained, [t]he purpose of requiring governmental entities to open the contracts process to public bidding is to eliminate favoritism, fraud and corruption; avoid misuse of public funds; and stimulate advantageous marketplace competition.” (Konica Business Machs. U. S. A. v. Regents of Univ. of Cal. (1988) 206 Cal.App.3d 449, 456.)
By sending the Project out for competitive bidding, but arbitrarily rejecting the lowest responsive bid, the City is failing to take advantage of the competitive market, thereby misusing public funds. This results in an increase of $614,919 in the price of the Project.

That increase represents a full 10% of Edwards Construction’s price. That is a significant additional cost to the City, a cost that will fall on the City’s taxpayers.

Moreover, the City’s rejection raises the specter of favoritism, graft, and corruption. The City did not notify Edwards Construction of its preliminary determination and give

Shannon Sweeney

CITY OF ARROYO GRANDE
June 19, 2026

Edwards Construction an opportunity to address the City’s concerns prior to issuing the Notice of Intent. The City did not even provide a reasoned basis for its rejection prior to issuing its Notice of Intent, instead relying on nebulous concerns about the pricing of unspecified bid items.

Instead, the City’s Bid Rejection Letter simply informed Edwards Construction that its Bid was rejected and absurdly claims that Edwards Construction has no recourse for the City’s arbitrary action, as if the City could waive the competitive bidding requirements of the Public Contract Code through self-serving provisions in its Bid Documents. The arbitrary nature of the City’s Rejection Letter creates the appearance that the City wanted to award the Project to award the Project to V. Lopez Jr. & Sons and went looking for a justification to do so, despite the increased cost. This appearance of favoritism is exactly the type of evil the Public Contract Code was enacted to prevent.

The City’s belated issuance of its Protest Rejection Letter, which for the first time presented the basis for its rejection of Edwards Construction’s Bid, did not cure the defects. Most notably, the City did not issue the Protest Rejection Letter until after it issued the Notice of Intent. And the City’s Protest Rejection Letter again denied that Edwards Construction had the right to respond to the new allegations included in the letter, including the City’s allegation that Edwards Construction’s price for Section 19 Earthwork was too high, something not even hinted at in its original Bid Rejection Letter. Nor did the City address Edwards Construction’s explanations in its Protest Supplement, the very letter the City was supposedly responding to. These errors again create the appearance of improper favoritism rather than reflecting a meaningful attempt to obtain the best work at the best price.

Because the City failed to investigate the reasons why Edwards Construction was able to bid the Project at a lower price than its competitors before improperly rejecting the Bid as nonresponsive, the City’s taxpayers are being denied the protections of the competitive bidding laws. By improperly rejecting Edwards Construction’s Bid, the City is imposing $614,919 in additional costs on its taxpayers for no discernable benefit, exactly the opposite of the purposes for the Public Contract Code. That there is no legitimate basis for this decision, as well as the City’s repeated failure to provide Edwards Construction with the due process protections afforded under the Public Contract Code, suggest that the City’s decision is driven by favoritism rather than the public’s best interest.

CONCLUSION
Based on the foregoing, as well as the information in its Supplemental Protest, Edwards Construction requests that the City rescind its Rejection Letter and instead recommend that the Project be awarded to Edwards Construction. Edwards Construction submitted the lowest responsive bid, and there is no justification for wasting $614,919 in taxpayer dollars

Isaac Rosen

BEST BEST & KRIEGER LLP
June 19, 2026

by awarding the Project to a different contractor at a higher cost to the public. Edwards Construction looks forward to working with the Authority to complete this important Project without further delay.

Sincerely,
SMTD Law LLP
Jonathan J. Dunn
JJD/tau
Enclosure(s)
c: Client (email only)
Sidney Sweeney, Arroyo Grande, [email protected]

Exhibit 1

Exhibit 2

Exhibit 3

NOTICE OF INTENT TO AWARD
Date of Notice: June 15, 2026
Project Title: Halcyon Complete Streets
Project Number: PW 2023-15
To All Bidders/Proposers:

This Notice serves to inform all interested parties that the City of Arroyo Grande has completed its evaluation of the proposals submitted for the above-referenced project.

Based on the results of the evaluation and in accordance with the requirements of the solicitation, the Agency intends to award a contract to:

V. Lopez Jr. & Sons, General Engineering Contractors, Inc. 1639 E. Donovan Road
Santa Maria, CA 93454
This Notice of Intent to Award does not constitute a contract award. The City Council is scheduled to consider the award of this project at its meeting on June 23, 2026. No contract shall be formed until the City issues a formal Notice of Award and executes a contract with the selected firm.

Any proposer wishing to protest this intended award must have done so in accordance with the procedures set forth in the Bid Book. Protests must have been received by within 5 calendar days of the bid opening, which was June 9, 2026.

The City appreciates the time and effort invested by all firms that submitted bids.

Thank you,
Theresa Wren, Capital Improvement Projects Manager
[email protected]

Exhibit 4

DATE: June 16, 2026
TO:

Shannon Sweeney
Acting Public Works Director / City Engineer
City of Arroyo Grande
1375 Ash Street
Arroyo Grande, CA 93420
FROM:

Brad Edwards, President
Edwards Construction Group Inc.
991 Bennett Ave
Arroyo Grande, CA 93420
RE: Protest Supplement – Rejection of Bid for Halcyon Complete Streets Project ATPSB1-5199(035)
Dear Ms. Sweeney,
This letter serves as a formal "Protest Supplement" on behalf of Edwards Construction Group Inc. ("Edwards") regarding the City of Arroyo Grande’s ("City") letter dated June 15, 2026, which notified us of the City’s intent to reject our bid as non-responsive.

We respectfully but firmly refute the City’s determination that our bid was "unbalanced" or "non-responsive". Under Public Contract Code § 20162, the City has a clear statutory duty to award the contract to the lowest responsible bidder. As the lowest bidder for the Project, Edwards is entitled to the award unless the City can demonstrate a material failure to comply with the bid specifications.It is our firm position that the City's invocation of this clause to disqualify the most competitive proposal constitutes a clear abuse of administrative discretion. This determination is devoid of a substantial factual foundation and stands in direct contravention of the core tenets of competitive public procurement as established under California law.

In public contracting, a bid is only "unbalanced" in a way that warrants rejection if it is mathematically unbalanced (e.g., front-loading costs in a way that suggests fraud or severe risk to the project's completion) or materially unbalanced (e.g., creating an outcome where the lowest total bid price is no longer actually the lowest price due to skewed quantities). The City’s rejection fails to meet the threshold of a 'material' deviation from the bid instructions. A

mere variance from the engineer’s estimate or the 'average' of other bidders does not constitute a valid basis for rejection under the Public Contract Code Arbitrary Misclassification of Price Competitiveness
The City’s June 15 letter alleges that Edwards' pricing for general conditions and temporary traffic control does not "accurately reflect the cost to perform the Work" and falls below "staff’s expectations". This reliance on subjective staff expectations is legally prohibited. In Pozar v. Department of Transportation (1983) 145 Cal.App.3d 269, the court held that public agencies have a ministerial duty to follow established, objective criteria in bid evaluations rather than relying on internal, subjective benchmarks or expectations.

The "unbalanced" classification is an arbitrary mischaracterization of Edwards’ legitimate competitive advantages. Our headquarters is located at 991 Bennett Ave in Arroyo Grande, providing us with immediate geographic proximity to the Project site. This proximity allows for significant operational efficiencies, reduced mobilization costs, and streamlined traffic control logistics that bidders from outside the immediate area simply cannot match.

Our lower pricing for these line items reflects these real-world efficiencies, not a failure to understand or allocate the scope of work. Furthermore, our lower costs for traffic control are legitimately derived from our ownership of a comprehensive inventory of traffic control signage, which eliminates some of the rental and lease overhead that other bidders might have factor into their proposals. Our estimate for traffic control is sufficient to meet all safety requirements and contract specifications. A lower cost does not equate to a failure to perform or a failure to comply with the scope of work.

The concept of “responsiveness” in public works bidding refers to whether a bidder has complied with the material requirements of the bid package (e.g., submitting required forms, bonds, and certifications). The City is attempting to reclassify price competitiveness as non-responsiveness. By rejecting the lowest bid based on a subjective evaluation of “balanced costs,” the City is contravening the intent of the Public Contract Code, which is to protect the public from paying higher costs for the same work. This is a misapplication of Article 31.

Purpose of Competitive Bidding

The core purpose of competitive bidding is to "guard against favoritism, improvidence, extravagance, fraud and corruption, and to secure the best work or supplies at the lowest price practicable" (Konica Business Machines U.S.A. v. The Regents of the University of California (1988) 206 Cal.App.3d 449). By rejecting the lowest bid due to its competitiveness, the City is effectively subverting the goal of avoiding the misuse of public funds.

Furthermore, the City’s concerns regarding line-item allocation do not constitute a "material" irregularity. As established in Valley Crest Landscape, Inc. v. City of Davis (1996) 41 Cal.App.4th 1432, a bid variation is only material if it gives a bidder a substantial advantage or benefit not enjoyed by other bidders. Edwards has sought no such advantage; we have simply provided the most aggressive and efficient pricing based on our local presence and operational model.

Procedural Deficiency and Burden of Proof
Furthermore, the City bears the burden of establishing a factual, objective record to justify the rejection of the lowest responsive bidder. The City’s reliance on "staff expectations" regarding line-item costs is not a substitute for the substantial evidence required to disqualify a bidder. Absent a showing that Edwards’ bid is mathematically or materially unbalanced in a way that prejudices the City or undermines the project's financial integrity, the rejection is unsupported. Mere variance from other bidders’ line-item allocations, when justified by actual operational efficiencies and equipment ownership, does not constitute a material defect.

Conclusion
The City’s intent to recommend the award to V. Lopez Jr. & Sons despite Edwards’ lower bid would result in an unnecessary and legally questionable expenditure of public funds. We formally request that the City rescind its rejection of Edwards’ bid and proceed with the award to Edwards Construction Group Inc. as the lowest responsive and responsible bidder.

We look forward to your prompt response. Please provide written confirmation of receipt of this protest
Sincerely,

Brad Edwards
President, Edwards Construction Group Inc.

Exhibit 5

MEMORANDUM
TO: City Council
FROM: Jessica Matson, Director of Legislative & Information Services/ City Clerk
SUBJECT: Supplemental Information
Agenda Item 9.e – June 23, 2026 City Council Meeting
Notice of Award, Halcyon Complete Streets, PW 2023-15
DATE: June 23, 2026
The correct Resolution for the above referenced Item Attachment 1 is enclosed.

Cc: City Manager
Acting Director of Public Works/City Engineer
City Attorney
City Clerk
City Website and Public Review Binder
Enc

ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE TO 1) REJECT LOW BIDDER, EDWARD’S CONSTRUCTION
GROUP, INC., AS NON-RESPONSIVE; 2) AUTHORIZE THE CITY

MANAGER OR DESIGNEE TO EXECUTE A CONSTRUCTION

CONTRACT FOR THE HALCYON COMPLETE STREETS PROJECT
(PROJECT) TO THE SECOND LOWEST BIDDER, V. LOPEZ JR. & SONS (V. LOPEZ) FOR $6,653,626.14, SUBJECT TO ANY MINOR,

TECHNICAL, OR NON-SUBSTANTIVE CHANGES AS APPROVED BY
THE CITY MANAGER IN CONSULTATION WITH THE CITY ATTORNEY; 3) AUTHORIZE THE CITY MANAGER TO APPROVE CHANGE ORDERS
OF 10% OF THE CONTRACT AMOUNT, $665,362.61, FOR

UNANTICIPATED COSTS DURING THE CONSTRUCTION PHASE OF
THE PROJECT; AND 4) APPROVE TWO BUDGET AMENDMENTS FOR
CONSTRUCTION OF THIS PROJECT.

WHEREAS, The FY 2025-26 budget includes $9,428,500 for construction of the Project; and
WHEREAS, The Transportation Facilities Development Impact Fee (DIF) Fund to this CIP project as stated in the DIF schedule may support 50% of the cost to complete the roundabout portion of this project; and
WHEREAS, On April 28, 2026 staff presented 100% plans to City Council and received authorization to proceed with advertisement. A Notice Inviting Bids was issued on May 11, 2026. The Notice Inviting Bids was published in the local paper, posted on the City’s website, and distributed to plan rooms; and
WHEREAS, Five bids were received by the bid opening date and time of June 9, 2026, 2:00 PM, ranging from $6,038,706.51 to 10,331,385.00; and WHEREAS, Following the bid opening, City staff reviewed the bids submitted for the Project, including the bid submitted by Edwards Construction Group Inc. (“Edwards Construction”). Based on that review, staff determined that the bid submitted by Edwards Construction is non-responsive because it does not appear to be a balanced bid and does not accurately reflect the cost to perform certain portions of the Work; and WHEREAS, Grant funding and DIF are sufficient to complete this project without the additional $1,875,000 of general funding originally funded for this project.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande does hereby reject low bidder, Edward’s Construction Group, Inc., as nonresponsive;.

RESOLUTION NO.

PAGE 2
BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does hereby authorize the City Manager or designee to execute a construction contract for the Halcyon Complete Streets Project (Project) to the second lowest bidder, V. Lopez Jr. & Sons (V. Lopez) for $6,653,626.14, subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney.

BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does hereby authorize the City Manager to approve change orders of 10% of the contract amount, $665,362.61, for unanticipated costs during the construction phase of the Project.

BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does hereby approve two budget adjustments: 1)Appropriate $231,718 from the Transportation Facilities Development Impact Fee (DIF) Fund to this CIP project as stated in the DIF schedule to support 50% of the cost to complete the roundabout, and 2) appropriate $1,875,000 of Measure E-24 Local Sales Tax Funds from this CIP project to the Pavement Management Project (PMP).

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 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

MEMORANDUM
TO: City Council
FROM: Jessica Matson, Director of Legislative & Information Services/ City Clerk
SUBJECT: Supplemental Information
Agenda Item 9.e – June 23, 2026 City Council Meeting
Notice of Award, Halcyon Complete Streets, PW 2023-15
DATE: June 23, 2026
Attached is correspondence sent by City staff regarding the above referenced Item.

Cc: City Manager
Acting Director of Public Works/City Engineer
City Attorney
City Clerk
City Website and Public Review Binder
Enc

Item 9.f.

MEMORANDUM
TO: City Council
FROM: Shannon Sweeney, Acting Public Works Director/City Engineer BY: Theresa Wren, Capital Improvement Projects Manager
SUBJECT: Approval of On Call Professional Services Agreements DATE: June 23, 2026
RECOMMENDATION:
1) Adopt a Resolution authorizing the City Manager to execute On-Call Professional Services Agreements for the five disciplines as listed in Tables 1 through 5, subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney; and
2) Find that the proposed action is not a project, and is exempt from review under CEQA, because approval of On-Call Professional Services Agreements is an organizational or administrative activity of government that does not itself result in direct or indirect physical changes in the environment. (State CEQA Guidelines,§ 15378(b)(5)) IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

There are no costs associated with approval of On-Call Professional Services Agreements. Costs will only be incurred for specific scope of services which will be managed within approved budget for that project
BACKGROUND:

The use of on-call consultants has been found to be an effective tool in the delivery of City projects and services. On-Call agreements allow the City to obtain specialized expertise and supplemental resources on an as-needed basis, improving responsiveness and reducing the time required to procure consultant services for individual projects. The current list of on-call professional services for engineering and planning consultants was established in 2015. The last Council-approved extension for On-Call Professional Services occurred on July 27, 20211, for three (3) years, with two (2) one-year extensions exercised thereafter. The current on-call agreements expire on July 27, 2026.

1 https://www.arroyogrande.org/AgendaCenter/ViewFile/Agenda/_07272021-1353?html=true

Item 9.f.

City Council
Approval of On Call Professional Services Agreements
June 23, 2026

ANALYSIS OF ISSUES:

Qualifications Received and Evaluation Process
The City’s current On-Call Professional Services program approved in 2021 included sixteen (16) professional service disciplines. In preparation for renewal of the program, staff reviewed the historical use of On-Call consultants and anticipated professional service needs for the next five-year period. Based on this review, staff determined that five (5) disciplines would provide the greatest value and flexibility for supporting engineering, planning and public works projects.

On April 3, 2026, the City issued a Request for Qualifications (RFQ) for On-Call Professional Services for the following disciplines:

1. Civil Engineering

2. Geotechnical Engineering & Materials Testing

3. Water, Wastewater and Stormwater Engineering

4. Surveying

5. Environmental Consulting and Permitting
On May 1, 2026, the City received forty-four (44) Statement of Qualifications (SOQs).

Most firms proposed on more than one service category. The number of responses received, and the breadth of consultant experience represented, demonstrated strong interest in providing professional services to the City. Each SOQ was evaluated by City staff using the criteria identified in the RFQ:

1. Understanding of the work involved in completing the specific discipline Services. (30%)

2. Experience in successfully performing similar services. (30%)

3. Demonstrated competence, professional qualifications and availability of proposed staff to be assigned. (30%)

4. Local presence within San Luis Obispo or Santa Barbara Counties (10%) Based on evaluation results, staff recommends awarding On-Call Professional Services Agreements to a maximum of four (4) firms within each discipline as identified in Tables 1 through 5 below. The recommended firms, noted in bold, were selected based on their demonstrated qualifications, experience, staffing resources, and ability to meet the City's anticipated service needs.

Maintaining multiple consultants within each discipline provides the City with access to a broader range of expertise, creates redundancy when consultant availability is limited, and increases the likelihood of receiving competitive scope and fee proposals for individual projects. Limiting the number of consultants to four (4) per discipline balances these benefits while providing selected firms a reasonable opportunity to perform work for the City during the agreement term. Four firms were selected for all disciplines except for geotechnical engineering and materials testing. Although 5 firms submitted proposals, the review team determined that only three firms met City needs.

Item 9.f.

City Council
Approval of On Call Professional Services Agreements
June 23, 2026

TABLE 1

CIVIL ENGINEERING
TABLE 2

GEOTECHNICAL ENGINEERING &

MATERIALS TESTING
Ashley Vance Engineering, Inc. Pavement Engineering, Inc. (PEI) Garing, Taylor & Associates, Inc. (GTA) Earth Systems
Hive Engineering, Inc. Tetra Tech, Inc
North Coast Engineering, Inc. (NCE) Krazan
RRM Design Group AESCO
GHD Inc.

Tetra Tech, Inc
Wallace Group
4Creeks, Inc.

EESW, Inc. dba Executive Engineering
Pavement Engineering, Inc. (PEI)
Diversified Project Services international, Inc. (DPSI) Omni Design, Inc
L6 Engineering
RICK Engineering Company
TABLE 3

WATER, WASTEWATER & STORMWATER

ENGINEERING
TABLE 4

SURVEYING
Ardurra Group, Inc. North Coast Engineering, Inc. (NCE) Wallace Group Wallace Group
Tetra Tech, Inc Tetra Tech, Inc
GHD Inc. BKF Engineers
4Creeks, Inc. Garing, Taylor & Associates, Inc. (GTA)
Watearth, Inc. RRM Design Group
4Creeks, Inc.

Diversified Project Services international, Inc. (DPSI) Omni Design, Inc
TABLE 5

ENVIRONMENTAL CONSULTING & PERMITTING
Padre Associates, Inc.

Rincon Consultants, Inc.

BKF Engineers
SWCA, Inc. dba SWCA Environmental Consultants
LSA Associates, Inc.

Tetra Tech, Inc
EMC Planning Group, Inc
UltraSystems Environmental, Inc
Mad River Properties, Inc.

Item 9.f.

City Council
Approval of On Call Professional Services Agreements
June 23, 2026

On-Call Use and Duration
As services are needed, scopes of work and rates will be negotiated with firm(s) on the qualified list, depending on the size, complexity, schedule, and funding requirements of the task. Consultant selection for individual tasks may consider factors including relevant experience, project understanding, proposed approach, availability, schedule, and fee. If the services are successfully negotiated at a maximum cost for staff approval based on City Purchasing Policy, the City Manager may enter into a professional services agreement with the firm to provide the services.

If the cost of the services exceeds staff purchasing limits, staff will return to City Council for award of a contract. All contracts are subject to budgetary authority granted by the Council.

For projects receiving federal or state funding, consultant selection will comply with all applicable federal, state, and Caltrans Local Assistance procurement requirements.

Additional documentation may be required for those specific projects.

Execution of an On-Call Professional Services Agreement does not authorize work, obligate funding, or guarantee any minimum amount of services. Individual tasks will be procured through the Mini-RFP or Scope and Fee Proposal process described above. Upon selection for a specific task, City staff will negotiate and execute taskspecific documentation establishing the scope of work, schedule, and not-to-exceed compensation amount prior to commencement of services.

The proposed agreements will have an initial term of three (3) years, with the option to extend for one additional two-year term, for a maximum contract duration of five (5) years.

ALTERNATIVES:

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

1. Approve staff recommendations;

2. Request changes or clarification and approve as modified; or

3. Provide other direction to staff.

ADVANTAGES:
 Flexible access to expertise: The City can efficiently match project needs with consultants in different technical disciplines as work arises.  Maintains competitive selection: Individual task assignments are still issued and negotiated under the on-call agreements to ensure appropriate scope and pricing.  Faster project delivery: Pre-qualified consultants are available to begin work without the delay of initiating a full RFP process for each project.  Reduced administrative workload: Staff do not need to repeatedly prepare and distribute RFPs, evaluate proposals, select consultants, and develop contracts for each individual assignment.
 Cost efficiency: Reduced staff time spent on procurement and contract processing lowers overall administrative costs.

Item 9.f.

City Council
Approval of On Call Professional Services Agreements
June 23, 2026

 Continued use of formal RFPs when needed: The City retains the ability to use a full RFP process for larger projects, specialty services, or grant-funded work with specific requirements.

DISADVANTAGES:

No disadvantages have been identified.

ENVIRONMENTAL REVIEW:

Find that the proposed action is not a project, and is exempt from review under CEQA, because approval of On-Call Professional Services Agreements is an organizational or administrative activity of government that does not itself result in direct or indirect physical changes in the environment. (State CEQA Guidelines,§ 15378(b)(5)).

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. Resolution

2. Sample Professional Services Agreement

ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF ARROYO GRANDE AUTHORIZING THE CITY

MANAGER TO EXECUTE ON-CALL PROFESSIONAL

SERVICES AGREEMENTS FOR THE FIVE DISCIPLINES
AS LISTED IN TABLES 1 THROUGH 5, SUBJECT TO

ANY MINOR, TECHNICAL, OR NON-SUBSTANTIVE

CHANGES AS APPROVED BY THE CITY MANAGER IN

CONSULTATION WITH THE CITY ATTORNEY
WHEREAS, the City utilizes on-call professional services agreements to provide efficient access to qualified consulting firms for engineering, planning, and related professional services as needed for City projects and operations; and WHEREAS, the City’s current on-call professional services agreements are scheduled to expire on July 26, 2026, necessitating the establishment of new on-call agreements to maintain continuity of service; and
WHEREAS, the on-call consultant selection process was conducted through a competitive Request for Qualifications (RFQ) process in which firms were evaluated based on established criteria including experience, qualifications, understanding of services, and personnel qualifications; and
WHEREAS, the use of on-call agreements allows the City to streamline the procurement of professional services for individual task assignments while maintaining compliance with applicable procurement policies and procedure; and WHEREAS, execution of an on-call agreement does not guarantee any minimum amount of work or services, and all work will be authorized only through future task orders, scopes of work, and negotiated not-to-exceed budgets; and WHEREAS, individual task assignments under the on-call agreements will be issued through a mini-request for proposals (mini-RFP) or similar task order process, and will be subject to separate written authorization prior to commencement of work; and WHEREAS, to ensure the City maintains timely access to qualified consultants for future projects and operational needs, staff recommends approval of the on-call professional services agreements with the selected firms noted in bold in Tables 1 through 5 in Exhibit “A”.

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. Authorize the City Manager to execute On-Call Professional Services

RESOLUTION NO.

PAGE 2
Agreements for the five disciplines listed in Exhibit A Tables 1 through 5, subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney.

3. Find that the proposed action is not a project, and is exempt from review under CEQA, because approval of On-Call Professional Services Agreements is an organizational or administrative activity of government that does not itself result in direct or indirect physical changes in the environment. (State CEQA Guidelines,§ 15378(b)(5)).

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”
TABLE 1

CIVIL ENGINEERING
TABLE 2

GEOTECHNICAL ENGINEERING &

MATERIALS TESTING
Ashley Vance Engineering, Inc. Pavement Engineering, Inc. (PEI) Garing, Taylor & Associates, Inc. (GTA) Earth Systems
Hive Engineering, Inc. Tetra Tech, Inc
North Coast Engineering, Inc. (NCE) Krazan
RRM Design Group AESCO
GHD Inc.

Tetra Tech, Inc
Wallace Group
4Creeks, Inc.

EESW, Inc. dba Executive Engineering
Pavement Engineering, Inc. (PEI)
Diversified Project Services international, Inc. (DPSI) Omni Design, Inc
L6 Engineering
RICK Engineering Company
TABLE 3

WATER, WASTEWATER & STORMWATER

ENGINEERING
TABLE 4

SURVEYING
Ardurra Group, Inc. North Coast Engineering, Inc. (NCE) Wallace Group Wallace Group
Tetra Tech, Inc Tetra Tech, Inc
GHD Inc. BKF Engineers
4Creeks, Inc. Garing, Taylor & Associates, Inc. (GTA)
Watearth, Inc. RRM Design Group
4Creeks, Inc.

Diversified Project Services international, Inc. (DPSI) Omni Design, Inc

ATTACHMENT 2
BB&K (2023) -1- PROFESSIONAL SERVICES AGREEMENT

SAMPLE PROFESSIONAL SERVICES CONTRACT

CITY OF ARROYO GRANDE

PROFESSIONAL SERVICES AGREEMENT

1. PARTIES AND DATE.

This Agreement is made and entered into this _____ day of ________, 20___, by and between the City of Arroyo Grande, a municipal corporation organized under the laws of the State of California with its principal place of business at 300 E. Branch Street, Arroyo Grande, California 93420, County of San Luis Obispo, State of California ("City") and [***INSERT NAME OF COMPANY], a [INSERT TYPE OF BUSINESS; I.E.,

CORPORATION (INCLUDE STATE OF INCORPORATION), LIMITED LIABILITY COMPANY, SOLE PROPRIETORSHIP, ETC.***], with its principal place of business at [***INSERT ADDRESS***] ("Consultant"). City and Consultant are sometimes individually referred to herein as "Party" and collectively as "Parties."

2. RECITALS.

2.1 Consultant.

Consultant desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing [***INSERT TYPE***] services to public clients, is licensed in the State of California, and is familiar with the plans of City.

2.2 Project.

City desires to engage Consultant to render such professional services for the On Call Professional Services ("Project") as set forth in this Agreement.

3. TERMS.

3.1 Scope of Services and Term.

3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional [***INSERT TYPE***] consulting services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations.

3.1.2 Term. The term of this Agreement shall be from [***INSERT DATE***] to [***INSERT DATE***], unless earlier terminated as provided herein. [***INSERT THE

FOLLOWING SENTENCE FOR MULTI-YEAR, AUTOMATIC RENEWAL NOT TO EXCEED THREE CONSECUTIVE YEARS; OTHERWISE, ALWAYS DELETE: The City shall have the unilateral option, at its sole discretion, to renew this Agreement automatically for no more than

ATTACHMENT 2
BB&K (2023) -2- PROFESSIONAL SERVICES AGREEMENT
[INSERT NUMBER] additional one-year terms.***] Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. The Parties may, by mutual, written consent, extend the term of this Agreement if necessary to complete the Services.

3.2 Compensation.

3.2.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed [***INSERT AMOUNT WRITTEN OUT] ($[***INSERT NUMBER]) without written approval of the City Council or City Manager, as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

3.2.2 Payment of Compensation. Consultant shall submit to City a monthly invoice which indicates work completed and hours of Services rendered by Consultant. The invoice shall describe the amount of Services provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the invoice.

City shall, within 30 days of receiving such invoice, review the invoice and pay all non-disputed and approved charges. If the City disputes any of Consultant's fees, the City shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth therein. Payment shall not constitute acceptance of any Services completed by Consultant. The making of final payment shall not constitute a waiver of any claims by the City for any reason whatsoever.

3.2.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City, or included in Exhibit "C" of this Agreement.

3.2.4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement.

Consultant shall not perform, nor be compensated for, Extra Work without written authorization from the City.

3.3 Responsibilities of Consultant.

3.3.1 Independent Contractor; Control and Payment of Subordinates. The Services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee.

Any personnel performing the Services on behalf of Consultant shall not be employees of City and shall at all times be under Consultant's exclusive direction and control. Neither City, or any of its officials, officers, directors, employees or agents shall have control over the conduct of Consultant or any of Consultants officers, employees or agents, except as set forth in this Agreement. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law.

Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding,

ATTACHMENT 2
BB&K (2023) -3- PROFESSIONAL SERVICES AGREEMENT
unemployment insurance, disability insurance, and workers' compensation insurance.

3.3.2 Schedule of Services. Consultant shall perform the Services in a prompt and timely manner and in accordance with the Schedule of Services set forth in Exhibit "B" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services expeditiously. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services.

3.3.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City.

3.3.4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. The key personnel for performance of this Agreement are as follows:
[***INSERT NAME AND TITLE***].

3.3.5 City's Representative. The City hereby designates the City Manager, or his/her designee, to act as its representative in all matters pertaining to the administration and performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for review and approval of all products submitted by Consultant but not the authority to enlarge the Scope of Services or change the total compensation due to Consultant under this Agreement. The City Manager shall be authorized to act on City's behalf and to execute all necessary documents which enlarge the Scope of Services or change the Consultant's total compensation subject to the provisions contained in this Agreement.

Consultant shall not accept direction or orders from any person other than the City Manager, City's Representative or his/her designee.

3.3.6 Consultant's Representative. Consultant hereby designates [***INSERT NAME AND TITLE***], or his/her designee, to act as its representative for the performance of this Agreement ("Consultant's Representative"). Consultant's Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.

3.3.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants and other staff at all reasonable times.

3.3.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Consultant

ATTACHMENT 2
BB&K (2023) -4- PROFESSIONAL SERVICES AGREEMENT
represents that it, its employees and subconsultants have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement. Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant's failure to comply with the standard of care provided for herein. Any employee of the Consultant or its subconsultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Consultant and shall not be re-employed to perform any of the Services or to work on the Project.

3.3.9 Period of Performance.

3.3.9.1 Consultant shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”). Consultant shall also perform the Services in strict accordance with any completion schedule or Project milestones described in Exhibits “A” or “B” attached hereto, or which may be separately agreed upon in writing by the City and Consultant (“Performance Milestones”). Consultant agrees that if the Services are not completed within the aforementioned Performance Time and/or pursuant to any such Performance Milestones developed pursuant to provisions of this Agreement, it is understood, acknowledged and agreed that the City will suffer damage.

3.3.9.2 Neither City nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the non-performing Party. For purposes of this Agreement, such circumstances include a Force Majeure Event. A Force Majeure Event shall mean an event that materially affects a Party’s performance and is one or more of the following: (1) Acts of God or other natural disasters; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in the issuance of permits or approvals by governmental authorities that are required for the services); (4) strikes and other organized labor action occurring at the site and the effects thereof on the services, only to the extent such strikes and other organized labor action are beyond the control of Consultant and its subcontractors, and to the extent the effects thereof cannot be avoided by use of replacement workers; and (5) pandemics, epidemics or quarantine restrictions. For purposes of this section, “orders of governmental authorities,” includes ordinances, emergency proclamations and orders, rules to protect the public health, welfare and safety, and other actions of a public agency applicable to the services and Agreement.

3.3.9.3 Should a Force Majeure Event occur, the non-performing Party shall, within a reasonable time of being prevented from performing, give written notice to the other Party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. Force Majeure Events and/or delays, regardless of the Party responsible for the delay, shall not entitle Consultant to any additional compensation.

Notwithstanding the foregoing in this section, the City may still terminate this Agreement in accordance with the termination provisions of this Agreement.

3.3.10 Laws and Regulations; Employee/Labor Certification.

ATTACHMENT 2
BB&K (2023) -5- PROFESSIONAL SERVICES AGREEMENT

3.3.10.1 Compliance with Laws. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with the Services and this Agreement. All violations of such laws and regulations shall be grounds for the City to terminate the Agreement for cause.

3.3.10.2 Employment Eligibility; Consultant. Consultant certifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time and shall require all subconsultants and sub-subconsultants to comply with the same. Consultant certifies that it has not committed a violation of any such law within the five (5) years immediately preceding the date of execution of this Agreement, and shall not violate any such law at any time during the term of the Agreement.

3.3.10.3 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted.

3.3.10.4 Air Quality. To the extent applicable, Consultant must fully comply with all applicable laws, rules and regulations in furnishing or using equipment and/or providing services, including, but not limited to, emissions limits and permitting requirements imposed by the South Coast Air Quality Management District (SCAQMD) and/or California Air Resources Board (CARB). Consultant shall indemnify City against any fines or penalties imposed by SCAQMD, CARB, or any other governmental or regulatory agency for violations of applicable laws, rules and/or regulations by Consultant, its subconsultants, or others for whom Consultant is responsible under its indemnity obligations provided for in this Agreement.

3.3.10.5 Water Quality Management and Compliance. Consultant shall keep itself and all subcontractors, staff, and employees fully informed of and in compliance with all local, state and federal laws, rules and regulations that may impact, or be implicated by the performance of the Services including, without limitation, all applicable provisions of the City’s ordinances regulating water quality and storm water; the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.); the California Porter-Cologne Water Quality Control Act (Water Code § 13000 et seq.); and any and all regulations, policies, or permits issued pursuant to any such authority. Consultant must additionally comply with the lawful requirements of the City, and any other municipality, drainage district, or other local agency with jurisdiction over the location where the Services are to be conducted, regulating water quality and storm water discharges. City may seek damages from Consultant for delay in completing the Services caused by Consultant’s failure to comply with the laws, regulations and policies described in this Section, or any other relevant water quality law, regulation, or policy.

3.3.10.6 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and

ATTACHMENT 2
BB&K (2023) -6- PROFESSIONAL SERVICES AGREEMENT
regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed.

3.3.11 Insurance.

3.3.11.1 Time for Compliance. Consultant shall not commence work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subconsultant to commence work on any subcontract until it has provided evidence satisfactory to the City that the subconsultant has secured all insurance required under this section. Failure to provide and maintain all required insurance shall be grounds for the City to terminate this Agreement for cause.

3.3.11.2 Types of Insurance Required. As a condition precedent to the effectiveness of this Agreement for work to be performed hereunder, and without limiting the indemnity provisions of the Agreement, the Consultant, in partial performance of its obligations under such Agreement, shall procure and maintain in full force and effect during the term of the Agreement the following policies of insurance. If the existing policies do not meet the insurance requirements set forth herein, Consultant agrees to amend, supplement or endorse the policies to do so.
(A) Commercial General Liability: Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office "occurrence" form CG 00 01, or the exact equivalent, with limits of not less than $1,000,000 per occurrence and no less than $2,000,000 in the general aggregate. Defense costs shall be paid in addition to the limits. The policy shall contain no endorsements or provisions (1) limiting coverage for contractual liability; (2) excluding coverage for claims or suits by one insured against another (cross-liability); (3) products/completed operations liability; or (4) containing any other exclusion(s) contrary to the terms or purposes of this Agreement. (B) Automobile Liability Insurance: Automobile Liability Insurance with coverage at least as broad as Insurance Services Office Form CA 00 01 covering "Any Auto" (Symbol 1), or the exact equivalent, covering bodily injury and property damage for all activities with limits of not less than $1,000,000 combined limit for each occurrence. (C) Workers' Compensation: Workers' Compensation
Insurance, as required by the State of California and Employer's Liability Insurance with a limit of not less than $1,000,000 per accident for bodily injury and disease. (D) Professional Liability (Errors & Omissions): [Professional Liability insurance or Errors & Omissions insurance appropriate to Consultant’s profession with limits of not less than $1,000,000. Covered professional services shall specifically include all work to be performed under the Agreement and delete any exclusions that may potentially affect the work to be performed (for example, any exclusions relating to lead, asbestos, pollution, testing, underground storage tanks, laboratory analysis, soil work, etc.). If coverage is written on a claims-made basis, the retroactive date shall precede the effective date of the initial Agreement and continuous coverage will be maintained or an extended reporting period will be exercised for a period of at least five (5) years from termination or expiration of this Agreement.

ATTACHMENT 2
BB&K (2023) -7- PROFESSIONAL SERVICES AGREEMENT

3.3.11.3 Insurance Endorsements. Required insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms approved by the City to add the following provisions to the insurance policies:
(A) Commercial General Liability: (1) Additional Insured: The City, its officials, officers, employees, agents, and volunteers shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement.

Additional Insured Endorsements shall not (1) be restricted to "ongoing operations"; (2) exclude "contractual liability"; (3) restrict coverage to "sole" liability of Consultant; or (4) contain any other exclusions contrary to the terms or purposes of this Agreement. For all policies of Commercial General Liability insurance, Consultant shall provide endorsements in the form of ISO CG 20 10 10 01 and 20 37 10 01 (or endorsements providing the exact same coverage) to effectuate this requirement. (2) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (B) Automobile Liability. (1) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium.
(C) Professional Liability (Errors & Omissions): 1) Cancellation:

Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (2) Contractual Liability Exclusion Deleted: This insurance shall include contractual liability applicable to this Agreement. The policy must “pay on behalf of” the insured and include a provision establishing the insurer’s duty to defend. (D) Workers' Compensation: (1) Cancellation: Required
insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (2) Waiver of Subrogation: A waiver of subrogation stating that the insurer waives all rights of subrogation against the City, its officials, officers, employees, agents, and volunteers.

3.3.11.4 Primary and Non-Contributing Insurance. All policies of Commercial General Liability and Automobile Liability insurance shall be primary and any other insurance, deductible, or self-insurance maintained by the City, its officials, officers, employees, agents, or volunteers shall not contribute with this primary insurance. Policies shall contain or be endorsed to contain such provisions.

3.3.11.5 Waiver of Subrogation. All required insurance coverages, except for the professional liability coverage, shall contain or be endorsed to waiver of subrogation in favor of the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

ATTACHMENT 2
BB&K (2023) -8- PROFESSIONAL SERVICES AGREEMENT

3.3.11.6 Deductibles and Self-Insured Retentions. Any deductible or selfinsured retention must be approved in writing by the City and shall protect the City, its officials, officers, employees, agents, and volunteers in the same manner and to the same extent as they would have been protected had the policy or policies not contained a deductible or self-insured retention.

3.3.11.7 Evidence of Insurance. The Consultant, concurrently with the execution of the Agreement, and as a condition precedent to the effectiveness thereof, shall deliver either certified copies of the required policies, or original certificates on forms approved by the City, together with all endorsements affecting each policy. Required insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been submitted to the City for approval. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen (15 days) prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced and not replaced immediately so as to avoid a lapse in the required coverage, Consultant shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies.

3.3.11.8 Acceptability of Insurers. Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and authorized to transact business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.

3.3.11.9 Enforcement of Agreement Provisions (non estoppel).

Consultant acknowledges and agrees that actual or alleged failure on the part of the City to inform Consultant of non-compliance with any requirement imposes no additional obligation on the City nor does it waive any rights hereunder.

3.3.11.10 Requirements Not Limiting. Requirement of specific coverage or minimum limits contained in this Section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance.

3.3.11.11 Additional Insurance Provisions
(A) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by the City, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
(B) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Consultant or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement.

ATTACHMENT 2
BB&K (2023) -9- PROFESSIONAL SERVICES AGREEMENT
(C) The City may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project. (D) Neither the City nor any of its officials, officers, employees, agents or volunteers shall be personally responsible for any liability arising under or by virtue of this Agreement.
(E) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability. Further the limits set forth herein shall not be construed to relieve the Consultant from liability in excess of such coverage, nor shall it limit the Consultant’s indemnification obligations to the City and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or law.
(F) Consultant shall report to the City, in addition to Consultant’s insurer, any and all insurance claims submitted by Consultant in connection with the Services under this Agreement.

3.3.11.12 Insurance for Subconsultants. Consultant shall include all subconsultants engaged in any work for Consultant relating to this Agreement as additional insureds under the Consultant's policies, or the Consultant shall be responsible for causing subconsultants to purchase the appropriate insurance in compliance with the terms of these Insurance Requirements, including adding the City, its officials, officers, employees, agents, and volunteers as additional insureds to the subconsultant's policies. All policies of Commercial General Liability insurance provided by Consultant’s subconsultants performing work relating to this Agreement shall be endorsed to name the City, its officials, officers, employees, agents and volunteers as additional insureds using endorsement form ISO CG 20 38 04 13 or an endorsement providing equivalent coverage. Consultant shall not allow any subconsultant to commence work on any subcontract relating to this Agreement until it has received satisfactory evidence of subconsultant’s compliance with all insurance requirements under this Agreement, to the extent applicable. The Consultant shall provide satisfactory evidence of compliance with this section upon request of the City.

3.4 Labor Code Requirements.

3.4.1 Prevailing Wages. Consultant is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Consultant's principal place of business and at the project site. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the Labor Code within this Agreement, and Consultant shall therefore comply with such Labor Code sections to the fullest extent required by law. Consultant shall defend, indemnify and hold the City, its

ATTACHMENT 2
BB&K (2023) -10- PROFESSIONAL SERVICES AGREEMENT
officials, officers, employees, agents, and volunteers free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.

3.4.2 Registration/DIR Compliance. If the Services are being performed on a public works project of over $25,000 when the project is for construction, alteration, demolition, installation, or repair work, or a public works project of over $15,000 when the project is for maintenance work, in addition to the foregoing, then pursuant to Labor Code sections 1725.5 and 1771.1, the Consultant and all subconsultants must be registered with the Department of Industrial Relations (“DIR”). Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants.

3.4.3 Compliance Monitoring. This Project may also be subject to compliance monitoring and enforcement by the DIR. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements, including the submission of payroll records directly to the DIR. Any stop orders issued by the DIR against Consultant or any subconsultant that affect Consultant’s performance of services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the DIR against Consultant or any subconsultant.

3.4.4 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.

3.5 Termination of Agreement.

3.5.1.1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those Services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause. The rights and remedies of the City provided in this section shall not be exclusive and are in addition to any other rights and remedies provided by law, equity or under this Agreement.

3.5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen (15) days of the request.

3.5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

ATTACHMENT 2
BB&K (2023) -11- PROFESSIONAL SERVICES AGREEMENT

3.6 Indemnification.

3.6.1 To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s Services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses except such loss or damage caused by the sole negligence or willful misconduct of the City. Consultant's obligation to indemnify shall survive expiration or termination of this Agreement and shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, or volunteers.

3.6.2 If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.

3.7 General Provisions.

3.7.1 Accounting Records. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement.

3.7.2 Independent Contractors and Subcontracting.

3.7.2.1 Use of Consultants. Consultant is aware of statutory and case law regarding classification of workers as independent contractors, including California Labor Code Section 2750.3 and Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903 (2018). To ensure that Consultant is in compliance with the California Labor Code, Consultant shall only utilize its employees to provide the Services. Consultant may not provide the services through any independent contractor, subcontractor or subconsultant (“Subcontractor(s)”) unless approved by the City as set forth in Section 3.7.2.2 below. Consultant represents and warrants that all personnel who perform the Services on Consultant’s behalf are Consultant’s employees, and that Consultant complies with all applicable laws, rules and regulations governing its employees, including, but not limited to, the California Labor Code, Unemployment Insurance Code and all applicable Industrial Welfare Commission Wage Orders.

ATTACHMENT 2
BB&K (2023) -12- PROFESSIONAL SERVICES AGREEMENT

3.7.2.2 Prior Approval Required. Consultant shall not use any Subcontractor to provide the Services, or any portion of the work required by this Agreement, without prior written approval of City. In the event that City authorizes Consultant to use a Subcontractor, Consultant shall enter into a written agreement with the Subcontractor, which must include all provisions of the Agreement, including a restriction on the Subcontractor’s use of further independent contractors, subcontractors or subconsultants without the City’s prior written consent.

3.7.3 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose:

Consultant: [***INSERT BUSINESS NAME***]
[***INSERT STREET ADDRESS***]
[***INSERT CITY STATE ZIP***]
ATTN: [***INSERT NAME AND TITLE***]
City: City of Arroyo Grande
300 E. Branch Street
Arroyo Grande, CA 93420
ATTN: Matthew Downing, City Manager
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

3.7.4 Ownership of Materials and Confidentiality.

3.7.4.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). All Documents & Data shall be and remain the property of City, and shall not be used in whole or in substantial part by Consultant on other projects without the City’s express written permission. Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Consultant shall provide to City reproducible copies of all Documents & Data, in a form and amount required by City. City reserves the right to select the method of document reproduction and to establish where the reproduction will be accomplished. The reproduction expense shall be borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of compensation to which the Consultant is entitled under the termination provisions of this Agreement, Consultant shall provide all Documents & Data to City upon payment of the undisputed amount. Consultant shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Consultant shall retain copies of all Documents & Data on file for a minimum of fifteen (15) years following completion of the Project, and shall make copies available to City upon the payment of actual reasonable duplication costs. Before destroying the

ATTACHMENT 2
BB&K (2023) -13- PROFESSIONAL SERVICES AGREEMENT
Documents & Data following this retention period, Consultant shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents.

3.7.4.2 Subconsultants. Consultant shall require all subconsultants to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subconsultant prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or its subconsultants, or those provided to Consultant by the City.

3.7.4.3 Right to Use. City shall not be limited in any way in its use or reuse of the Documents and Data or any part of them at any time for purposes of this Project or another project, provided that any such use not within the purposes intended by this Agreement or on a project other than this Project without employing the services of Consultant shall be at City’s sole risk. If City uses or reuses the Documents & Data on any project other than this Project, it shall remove the Consultant’s seal from the Documents & Data and indemnify and hold harmless Consultant and its officers, directors, agents and employees from claims arising out of the negligent use or re-use of the Documents & Data on such other project. Consultant shall be responsible and liable for its Documents & Data, pursuant to the terms of this Agreement, only with respect to the condition of the Documents & Data at the time they are provided to the City upon completion, suspension, abandonment or termination. Consultant shall not be responsible or liable for any revisions to the Documents & Data made by any party other than Consultant, a party for whom the Consultant is legally responsible or liable, or anyone approved by the Consultant.

3.7.4.4 Indemnification. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by City of the Documents & Data, including any method, process, product, or concept specified or depicted.

3.7.4.5 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City.

3.7.5 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.

ATTACHMENT 2
BB&K (2023) -14- PROFESSIONAL SERVICES AGREEMENT

3.7.6 Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements.

3.7.7 Attorneys’ Fees. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorneys’ fees and all costs of such action.

3.7.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in San Luis Obispo County. In addition to any and all contract requirements pertaining to notices of and requests for compensation or payment for extra work, disputed work, claims and/or changed conditions, Consultant must comply with the claim procedures set forth in Government Code sections 900 et seq. prior to filing any lawsuit against the City. Such Government Code claims and any subsequent lawsuit based upon the Government Code claims shall be limited to those matters that remain unresolved after all procedures pertaining to extra work, disputed work, claims, and/or changed conditions have been followed by Consultant. If no such Government Code claim is submitted, or if any prerequisite contractual requirements are not otherwise satisfied as specified herein, Consultant shall be barred from bringing and maintaining a valid lawsuit against the City.

3.7.9 Time of Essence. Time is of the essence for each and every provision of this Agreement.

3.7.10 City's Right to Employ Other Consultants. City reserves right to employ other consultants in connection with this Project.

3.7.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the parties.

3.7.12 Assignment or Transfer. Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination.

Consultant shall not subcontract any portion of the Services required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.

3.7.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subconsultants of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

3.7.14 Amendment; Modification. No supplement, modification, or amendment of

ATTACHMENT 2
BB&K (2023) -15- PROFESSIONAL SERVICES AGREEMENT
this Agreement shall be binding unless executed in writing and signed by both Parties.

3.7.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

3.7.16 No Third-Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

3.7.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.7.18 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Consultant further agrees to file, or shall cause its employees or subconsultants to file, a Statement of Economic Interest with the City’s Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

3.7.19 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.

3.7.20 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.

3.7.21 Survival. All rights and obligations hereunder that by their nature are to continue after any expiration or termination of this Agreement, including, but not limited to, the indemnification obligations, shall survive any such expiration or termination.

3.8 Federal Provisions. [***INCLUDE THIS SECTION ONLY IF APPLICABLE; DELETE OTHERWISE AND DELETE ASSOCIATED EXHIBIT. YOU MAY ALSO NEED TO INCLUDE SOME INFORMATION IN THE RFP DUE TO FEDERAL FUNDING GUIDELINES.

CONSULT LEGAL COUNSEL IF NECESSARY***]When funding for the services is provided, in whole or in part, by an agency of the federal government, Consultant shall also fully and adequately comply with the provisions included in Exhibit “A-1” (Federal Requirements) attached hereto and incorporated herein by reference (“Federal Requirements”). With respect to any conflict between such Federal Requirements and the terms of this Agreement and/or the provisions of state law, the more stringent requirement shall control. [SIGNATURES ON NEXT PAGE]

ATTACHMENT 2
BB&K (2023) -16- PROFESSIONAL SERVICES AGREEMENT

SIGNATURE PAGE TO PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF ARROYO GRANDE AND
[***INSERT NAME***]
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on the day and year first above written.

CITY OF ARROYO GRANDE [INSERT NAME OF CONSULTANT]
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
By:

Its:

Printed Name:

By:

Its:

Printed Name:

Approved By:

Matthew Downing, City Manager
Approved as to Form:
_____________________________________
Best Best & Krieger LLP
Isaac Rosen, City Attorney
Attested By:

Jessica Matson, City Clerk

ATTACHMENT 2
BB&K (2020) Exhibit “B”-17 PROFESSIONAL SERVICES AGREEMENT EXHIBIT "A"

SCOPE OF SERVICES
[***INSERT SCOPE***]
EXHIBIT "A-I"

FEDERAL CONTRACT PROVISIONS
[***INCLUDE THIS EXHIBIT (AND CORRESPONDING AGREEMENT PROVISION) ONLY IF APPLICABLE; DELETE OTHERWISE. IF APPLICABLE, YOU MAY ALSO NEED TO INCLUDE SOME INFORMATION IN THE RFP. CONSULT THE CITY ATTORNEY IF NECESSARY***] EXHIBIT "B"

SCHEDULE OF SERVICES
[***INSERT SCHEDULE***]
EXHIBIT "C"

COMPENSATION
[***INSERT RATES & AUTHORIZED REIMBURSABLE EXPENSES***]

Item 9.g.

MEMORANDUM
TO: City Council
FROM: Shannon Sweeney, Acting Public Works Director/City Engineer BY: Theresa Wren, Capital Improvement Projects Manager
SUBJECT: Award of FY 2026 Streets Overlay Project (PW 2025-01) DATE: June 23, 2026
RECOMMENDATION:
1) Authorize the City Manager to execute contracts for the FY 2026 Streets Overlay Project PW 2025-01 (Project) to CalPortland Construction (CalPortland) and North Coast Engineering, Inc. (NCE) , subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney; and 2) Find that the project is categorically exempt from CEQA pursuant to CEQA Guidelines Section 15301(c), Existing Facilities, because it consists of the repair, maintenance, and minor alteration of existing streets, sidewalks, curb ramps, and related transportation facilities involving negligible or no expansion of existing use.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

To accomplish the Pavement Management Plan projects for FY 2025-26 and FY 2026- 27, the FY 2025-26 budget includes $4,139,506 for the Pavement Management Program (PMP), $1,875,000 allocated from Measure E-24 Local Sales Tax for Halcyon Road Complete Streets, and $5,841,600 from the FY 2026-27 budget. Funding sources and Estimated Costs are shown in Tables 1 and 2.

Item 9.g.

City Council
Award of FY 2026 Streets Overlay Project (PW 2025-01)
June 23, 2026

TABLE 1. Funding Sources
TABLE 2. Estimated Costs
COSTS AMOUNT ($)
Predesign (Overlay & FDR) 151,350

OVERLAY (THIS PAVING PROJECT)
Design 319,928
Construction (CalPortland) 6,982,979
Construction Contingency (10%) 698,297
Surveying & Monumentation (NCE) 145,060
Estimated Materials Testing 70,000

FULL DEPTH RECLAMATION (NEXT PAVING PROJECT)
Estimated Design 40,000
Estimated Construction 3,000,000
Estimated Construction Contingency (10%) 300,000
Surveying & Monumentation (NCE) 61,123
Estimated Materials Testing 87,369
TOTAL 11,856,106
BACKGROUND:

Completing the engineering design for the 2025 Streets Repair Project is consistent with the 13-year PMP reviewed and accepted by City Council at its meeting on April 22, 20251.

The indicated repairs will extend the service life of the treated street segments, reduce future costs, and provide a smoother, safer driving surface. New striping will be installed, which will provide safer driving facilities. Curb ramps will be upgraded as noted in the adopted ADA Transition Plan, adopted on October 14, 2025. 2 Predesign deflection testing of pavement was conducted on streets proposed for treatment in 2026 and 2027 in the PMP. It was determined through the predesign testing that several streets that were anticipated to require full-depth reclamation could be treated through overlay treatment instead (Newport Avenue, Newport Frontage, Hillcrest Drive,

1https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=290d7d89-520f-4257-a4f2- d8f615e2f4d4&lang=English&Agenda=Agenda&Item=58&Tab=attachments 2https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=290d7d89-520f-4257-a4f2- d8f615e2f4d4&lang=English&Agenda=Agenda&Item=58&Tab=attachments Request Title Funding Source FY 2025-26 FY 2026-27 Total SB1 $ 481,000 $ 495,400 $ 976,400
Measure E-24 Sales Tax $ 3,577,640 $ 5,296,200 $ 8,873,840 CDBG $ 80,866 $ 50,000 $ 130,866
Halcyon Road Complete Streets Measure E-24 Sales Tax $ 1,875,000 $ - $ 1,875,000 $ 6,014,506 $ 5,841,600 $ 11,856,106
Pavement Management Program

Item 9.g.

City Council
Award of FY 2026 Streets Overlay Project (PW 2025-01)
June 23, 2026

Chilton Avenue, Sierra Drive, Forest Glen Drive, Olive Street, Todd Lane, Woodland Court, Vernon Street, Wesley Street, Cross Street, Hawkins Street, and Trinity Avenue).

The overlay treatment provides cost savings over full-depth reclamation (FDR) and results in a larger overlay project for this Streets Overlay Project (PW 2025-01). The Streets FDR Project (PW 2026-02) will have a smaller scope than originally anticipated since there are fewer streets requiring more substantial treatment.

On December 9, 20253, the City Council awarded a contract to Pavement Engineering, Inc. to develop plans and specifications. The engineer’s estimate for the FY 2026 Streets Overlay Project was $10,100,000.

ANALYSIS OF ISSUES:

A Notice Inviting Bids was issued on May 20, 2026, published in the local paper, posted on the City’s website, and distributed to plan rooms and local contractors.

Five bids were received by the bid opening date and time of June 11, 2026, 2:00 PM, ranging from $6,982,978.65 to $10,582,277.00.

The lowest responsive bid was received from CalPortland Construction for $6,982,978.65. The funding has been outlined in the Impact on Financial Resources section. This staff report speaks to only the overlay project and monumentation professional services agreement, not the upcoming FDR portion of the PMP. FDR costs are shown as reference only, to demonstrate that sufficient funding is available to complete the streets identified in the PMP for treatment for both years.

The list of streets receiving treatment in this project is included as Attachment 4.

Special Services
Surveying and monumentation perpetuation are required to document and protect existing survey markers that may be impacted by construction. This work ensures important property and roadway reference points can be accurately restored following completion of the pavement improvements. To comply with the City’s purchasing policy, scope and fee proposals were solicited from firms on the City’s current On-Call Professional Services for the FY 26 Streets Overlay, FY 26 Full Depth Reclamation Project, and Halcyon Complete Streets Project. Two (2) proposals were received by the deadline of June 10, 2026.

Staff recommends awarding the survey and monumentation professional services contract to North Coast Engineering, Inc. (NCE) for $238,424.50. Although this will be awarded under a single contract, $206,182.50 will be funded by the PMP projects, and $32,242.00 will be funded from Halcyon Complete Streets Project as shown in Table 3.

3https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=45cb77a4-833c-41fa-af53- 4fa9cb457dd2&lang=English&Agenda=Agenda&Item=53&Tab=attachments

Item 9.g.

City Council
Award of FY 2026 Streets Overlay Project (PW 2025-01)
June 23, 2026

Table 3. Survey and Monumentation Costs
NEXT STEPS:

While the overlay project is under construction, staff will go out to bid for plans and specifications development for the FDR project. Staff anticipates bidding construction for the FDR as the overlay project finishes. The overlay project has 110 working days.

Assuming a construction start date of mid-August and no major weather issues, the overlay project is scheduled to end by mid-January. The FDR project will then follow, depending on weather conditions.

ALTERNATIVES:

1. Staff’s recommendation;

2. Do not approve staff’s recommendation for any contract and request further information; or

3. Provide other direction to staff.

ADVANTAGES:

Completing the FY 2026 Streets Overlay Project will extend the service life of the treated street segments, reduce future costs, and provide a smoother, safer driving surface. New striping will be installed, which will provide safer driving facilities. New or replacement curb ramps improve safety and accessibility for pedestrians.

DISADVANTAGES:

There will be traffic impacts to the traveling public during construction. Staff will approve traffic control plans, scheduling, and sequencing to reasonably minimize the impacts. City staff will be at the site during construction to adjust the traffic control as needed (driveway access, etc.).

ENVIRONMENTAL REVIEW:

The project is categorically exempt from the California Environmental Quality Act (“CEQA”) pursuant to the Class 1 exemption for existing facilities (CEQA Guidelines Section 15301(c)), which applies to the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing structures, facilities, mechanical equipment, or topographical features where the project involves negligible or no expansion of existing or former use. The Existing Facilities exemption applies because it consists of the repair, maintenance, and minor alteration of existing streets, sidewalks, curb ramps, and related transportation facilities involving negligible or no expansion of existing use.

Survey and Monumentation Scope Quote
FY 26 Streets Overlay Project $ 145,060.00
FY 26 Full Depth Reclamation Project (FDR) $ 61,122.50
Halcyon Complete Streets Project $ 32,242.00
$ 238,424.50

Item 9.g.

City Council
Award of FY 2026 Streets Overlay Project (PW 2025-01)
June 23, 2026

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. Resolution

2. Construction Contract – CalPortland

3. Professional Services Contract – NCE

4. Project Street List

65501.00015\42788974.6
ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE AUTHORIZING THE CITY MANAGER TO
EXECUTE A CONSTRUCTION CONTRACT FOR THE FY 2026

STREETS OVERLAY PROJECT TO CALPORTLAND

CONSTRUCTION AND A PROFESSIONAL SERVICES

CONTRACT FOR SURVEYING SERVICES TO NORTH COAST
ENGINEERING, INC.

WHEREAS, the City Council awarded a contract to Pavement Engineering, Inc. on December 9, 2025, for the design of the FY 2026 Streets Overlay Project; and WHEREAS, the design package was competitively bid and five bids were received by the bid opening deadline of 2:00 pm on June 11, 2026; and WHEREAS, staff recommends awarding the construction contract for the FY 2026 Streets Overlay Project to the lowest responsive bidder, CalPortland Construction, for $6,982,978.65; and
WHEREAS, staff solicited proposals from firms on the City’s current On-Call Professional Services list for surveying and monumentation services associated with the FY 2026 Streets Overlay Project, FY 2026 Full-Depth Reclamation Project and Halcyon Complete Streets Project; and
WHEREAS, two proposals were received by the proposal deadline of June 11, 2026; and
WHEREAS, staff recommends awarding the professional services contract for surveying services associated with the FY 2026 Streets Overlay Project, FY 2026 Full-Depth Reclamation Project and Halcyon Complete Streets Project to North Coast Engineering, Inc., for $238,424.50; and
WHEREAS, the FY 2025-26 and FY 2026-27 budget includes sufficient funding for the completion of the FY 2026 Streets Overlay Project and the surveying professional services contract; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande, as follows:

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

2. BID AWARD. The City Council authorizes the City Manager or designee to execute a construction contract for the FY 2026 Streets Overlay Project to CalPortland Construction for $6,982,978.65 and a professional services contract for surveying services to North Coast Engineering, Inc. for

RESOLUTION NO.

PAGE 2
$238,424.50, subject to any minor, technical, or non-substantive changes as approved by the City Manager in consultation with the City Attorney, and to approve change orders as needed for either project up to $698,297 for unanticipated costs during construction. The City Council incorporates the analysis of the Staff Report dated June 23, 2026, accompanying this item, as part of the passage of this Resolution.

3. CEQA FINDINGS. The City Council finds that the project is categorically exempt from the California Environmental Quality Act (“CEQA”) pursuant to the Class 1 exemption for existing facilities (CEQA Guidelines Section 15301(c)), which applies to the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing structures, facilities, mechanical equipment, or topographical features where the project involves negligible or no expansion of existing or former use. The Existing Facilities exemption applies because it consists of the repair, maintenance, and minor alteration of existing streets, sidewalks, curb ramps, and related transportation facilities involving negligible or no expansion of existing use.

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 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

00 52 13 – SAMPLE CONTRACT
This CONTRACT is made and entered into this 23rd day of June, 2026 by and between City of Arroyo Grande, sometimes hereinafter called “City,” and CalPortland Construction, sometimes hereinafter called “Contractor.”
WITNESSETH: That the parties hereto have mutually covenanted and agreed, and by these presents do covenant and agree with each other as follows:
a. SCOPE OF WORK. The Contractor shall perform all Work within the time stipulated in the Contract, and shall provide all labor, materials, equipment, tools, utility services, and transportation to complete all of the Work required in strict compliance with the Contract Documents as specified in Section (e), below, for the following Project:

FY 2026 STREETS OVERLAY PROJECT (PW 2025-01)
The Contractor and its surety shall be liable to the City for any damages arising as a result of the Contractor’s failure to comply with this obligation. b. TIME FOR COMPLETION. Time is of the essence in the performance of the Work. The Work shall be commenced on the date stated in the City’s Notice to Proceed. The Contractor shall complete all Work required by the Contract Documents within 110 WORKING DAYS from the commencement date stated in the Notice to Proceed. By its signature hereunder, Contractor agrees the time for completion set forth above is adequate and reasonable to complete the Work. c. CONTRACT PRICE. The City shall pay to the Contractor as full compensation for the performance of the Contract, subject to any additions or deductions as provided in the Contract Documents, and including all applicable taxes and costs, the sum of Six Million Nine Hundred Eighty-Two Thousand Nine Hundred Seventy-Eight Dollars and Sixty-Five Cents ($6,982,978.65). Payment shall be made as set forth in the General Conditions. d. LIQUIDATED DAMAGES. In accordance with Government Code section 53069.85, it is agreed that the Contractor will pay the City the sum set forth in Section 00 73 13, Article 1.11 for each and every calendar day of delay beyond the time prescribed in the Contract Documents for finishing the Work, as Liquidated Damages and not as a penalty or forfeiture. In the event this is not paid, the Contractor agrees the City may deduct that amount from any money due or that may become due the Contractor under the Contract. This Article does not exclude recovery of other damages specified in the Contract Documents.
e. COMPONENT PARTS OF THE CONTRACT. The “Contract Documents” include the following:

Notice Inviting Bids
Instructions to Bidders
Bid Form
Bid Bond
Designation of Subcontractors
Information Required of Bidders
Non-Collusion Declaration Form
Iran Contracting Act Certification
Public Works Contractor Registration Certification
ATTACHMENT 2

Fleet Compliance Certification
Performance Bond
Payment (Labor and Materials) Bond
General Conditions
Special Conditions
Technical Specifications
Addenda
Plans and Drawings
Applicable Local Agency Standards and Specifications, as last revised Approved and fully executed change orders
Any other documents contained in or incorporated into the Contract The Contractor shall complete the Work in strict accordance with all of the Contract Documents.

All of the Contract Documents are intended to be complementary. Work required by one of the Contract Documents and not by others shall be done as if required by all. This Contract shall supersede any prior agreement of the parties.
f. PROVISIONS REQUIRED BY LAW AND CONTRACTOR COMPLIANCE. Each and every provision of law required to be included in these Contract Documents shall be deemed to be included in these Contract Documents. The Contractor shall comply with all requirements of applicable federal, state and local laws, rules and regulations, including, but not limited to, the provisions of the California Labor Code and California Public Contract Code which are applicable to this Work.
g. INDEMNIFICATION. Contractor shall provide indemnification and defense as set forth in the General Conditions.
h. PREVAILING WAGES. Contractor shall be required to pay the prevailing rate of wages in accordance with the Labor Code which such rates shall be made available at the City’s Administrative Office or may be obtained online at http://www.dir.ca.gov and which must be posted at the job site.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

IN WITNESS WHEREOF, this Contract has been duly executed by the above-named parties, on the day and year above written.

City of Arroyo Grande
Approved By:

Matthew Downing, City Manager
Date
Attested By:

Jessica Matson, City Clerk
Approved As To Form:

Isaac Rosen, Best Best & Krieger
City Legal Counsel
CalPortland Construction
Derek Todd, Vice-President
[email protected]
Robert M. Binam, Secretary
[email protected]

END OF CONTRACT

CALPORTLAND

ATTACHMENT 3
BB&K (2023) -1- PROFESSIONAL SERVICES AGREEMENT

CITY OF ARROYO GRANDE

PROFESSIONAL SERVICES AGREEMENT

1. PARTIES AND DATE.

This Agreement is made and entered into this 26th day of June, 2026, by and between the City of Arroyo Grande, a municipal corporation organized under the laws of the State of California with its principal place of business at 300 E. Branch Street, Arroyo Grande, California 93420, County of San Luis Obispo, State of California ("City") and NORTH COAST ENGINEERING, INC., a California Corporation, with its principal place of business at 725 Creston Road, Suite C, Paso Robles, CA 93446 ("Consultant"). City and Consultant are sometimes individually referred to herein as "Party" and collectively as "Parties."

2. RECITALS.

2.1 Consultant.

Consultant desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement.

Consultant represents that it is experienced in providing professional surveying services to public clients, is licensed in the State of California, and is familiar with the plans of City.

2.2 Project.

City desires to engage Consultant to render such professional services for the Surveying Services for FY 2026 Streets Overlay Project, FY 2026 Full-Depth Reclamation Project and Halcyon Complete Streets Project ("Project") as set forth in this Agreement. Services include monument perpetuation reports, monument and benchmark reestablishment and reinstallation (as needed), and corner record of survey verification (reinstall as needed). Project Plans for FY 2026 Streets Overlay Project and Halcyon Complete Streets describe their respective project scope. The streets anticipated with the scope of the FY 2026 Full Depth Reclamation include:

Woodland Drive, Virginia Drive, Creekside Drive, Via La Barranca, Short Street from Poole Street to Nelson Street, Corbet Canyon from Huasna to Hwy. 227, and Willow Lane.

2.3 Authority
The City Council approved this Agreement and authorized the City Manager to execute this contract in its June 23, 2026, meeting.

3. TERMS.

3.1 Scope of Services and Term.

3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional engineering design consulting services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations.

ATTACHMENT 3
BB&K (2023) -2- PROFESSIONAL SERVICES AGREEMENT

3.1.2 Term. The term of this Agreement shall be from June 23, 2026, to December 31, 2027, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. The Parties may, by mutual, written consent, extend the term of this Agreement if necessary to complete the Services.

3.2 Compensation.

3.2.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "A" attached hereto and incorporated herein by reference. The total compensation shall not exceed TWO-HUNDRED THIRTY-EIGHT THOUSAND FOUR-HUNDRED TWENTY-FOUR DOLLARS AND FIFTY CENTS ($238,424.50) without written approval of the City Council or City Manager, as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

3.2.2 Payment of Compensation. Consultant shall submit to City a monthly invoice which indicates work completed and hours of Services rendered by Consultant. The invoice shall describe the amount of Services provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the invoice.

City shall, within 30 days of receiving such invoice, review the invoice and pay all non-disputed and approved charges. If the City disputes any of Consultant's fees, the City shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth therein. Payment shall not constitute acceptance of any Services completed by Consultant. The making of final payment shall not constitute a waiver of any claims by the City for any reason whatsoever.

3.2.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City, or included in Exhibit "A" of this Agreement.

3.2.4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement.

Consultant shall not perform, nor be compensated for, Extra Work without written authorization from the City.

3.3 Responsibilities of Consultant.

3.3.1 Independent Contractor; Control and Payment of Subordinates. The Services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee.

Any personnel performing the Services on behalf of Consultant shall not be employees of City and shall at all times be under Consultant's exclusive direction and control. Neither City, or any of its officials, officers, directors, employees or agents shall have control over the conduct of Consultant or any of Consultants officers, employees or agents, except as set forth in this Agreement. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law.

Consultant shall be responsible for all reports and obligations respecting such additional

ATTACHMENT 3
BB&K (2023) -3- PROFESSIONAL SERVICES AGREEMENT
personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance.

3.3.2 Schedule of Services. Consultant shall perform the Services in a prompt and timely manner and in accordance with the Schedule of Services set forth in Exhibit "A" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services expeditiously. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services.

3.3.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City.

3.3.4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause.

3.3.5 City's Representative. The City hereby designates Matthew Downing, City Manager, or his/her designee, to act as its representative in all matters pertaining to the administration and performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for review and approval of all products submitted by Consultant but not the authority to enlarge the Scope of Services or change the total compensation due to Consultant under this Agreement. The City Manager shall be authorized to act on City's behalf and to execute all necessary documents which enlarge the Scope of Services or change the Consultant's total compensation subject to the provisions contained in this Agreement. Consultant shall not accept direction or orders from any person other than the City Manager, City's Representative or his/her designee.

3.3.6 Consultant's Representative. Consultant hereby designates Greg Jager, President, or his/her designee, to act as its representative for the performance of this Agreement ("Consultant's Representative"). Consultant's Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.

3.3.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants and other staff at all reasonable times.

3.3.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Consultant represents that it, its employees and subconsultants have all licenses, permits, qualifications and

ATTACHMENT 3
BB&K (2023) -4- PROFESSIONAL SERVICES AGREEMENT
approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement. Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant's failure to comply with the standard of care provided for herein. Any employee of the Consultant or its subconsultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Consultant and shall not be re-employed to perform any of the Services or to work on the Project.

3.3.9 Period of Performance.

3.3.9.1 Consultant shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”). Consultant shall also perform the Services in strict accordance with any completion schedule or Project milestones described in Exhibit “A” attached hereto, or which may be separately agreed upon in writing by the City and Consultant (“Performance Milestones”). Consultant agrees that if the Services are not completed within the aforementioned Performance Time and/or pursuant to any such Performance Milestones developed pursuant to provisions of this Agreement, it is understood, acknowledged and agreed that the City will suffer damage.

3.3.9.2 Neither City nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the non-performing Party. For purposes of this Agreement, such circumstances include a Force Majeure Event. A Force Majeure Event shall mean an event that materially affects a Party’s performance and is one or more of the following: (1) Acts of God or other natural disasters; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in the issuance of permits or approvals by governmental authorities that are required for the services); (4) strikes and other organized labor action occurring at the site and the effects thereof on the services, only to the extent such strikes and other organized labor action are beyond the control of Consultant and its subcontractors, and to the extent the effects thereof cannot be avoided by use of replacement workers; and (5) pandemics, epidemics or quarantine restrictions. For purposes of this section, “orders of governmental authorities,” includes ordinances, emergency proclamations and orders, rules to protect the public health, welfare and safety, and other actions of a public agency applicable to the services and Agreement.

3.3.9.3 Should a Force Majeure Event occur, the non-performing Party shall, within a reasonable time of being prevented from performing, give written notice to the other Party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. Force Majeure Events and/or delays, regardless of the Party responsible for the delay, shall not entitle Consultant to any additional compensation.

Notwithstanding the foregoing in this section, the City may still terminate this Agreement in accordance with the termination provisions of this Agreement.

3.3.10 Laws and Regulations; Employee/Labor Certification.

3.3.10.1 Compliance with Laws. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any

ATTACHMENT 3
BB&K (2023) -5- PROFESSIONAL SERVICES AGREEMENT
manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with the Services and this Agreement. All violations of such laws and regulations shall be grounds for the City to terminate the Agreement for cause.

3.3.10.2 Employment Eligibility; Consultant. Consultant certifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time and shall require all subconsultants and sub-subconsultants to comply with the same. Consultant certifies that it has not committed a violation of any such law within the five (5) years immediately preceding the date of execution of this Agreement, and shall not violate any such law at any time during the term of the Agreement.

3.3.10.3 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted.

3.3.10.4 Air Quality. To the extent applicable, Consultant must fully comply with all applicable laws, rules and regulations in furnishing or using equipment and/or providing services, including, but not limited to, emissions limits and permitting requirements imposed by the South Coast Air Quality Management District (SCAQMD) and/or California Air Resources Board (CARB). Consultant shall indemnify City against any fines or penalties imposed by SCAQMD, CARB, or any other governmental or regulatory agency for violations of applicable laws, rules and/or regulations by Consultant, its subconsultants, or others for whom Consultant is responsible under its indemnity obligations provided for in this Agreement.

3.3.10.5 Water Quality Management and Compliance. Consultant shall keep itself and all subcontractors, staff, and employees fully informed of and in compliance with all local, state and federal laws, rules and regulations that may impact, or be implicated by the performance of the Services including, without limitation, all applicable provisions of the City’s ordinances regulating water quality and storm water; the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.); the California Porter-Cologne Water Quality Control Act (Water Code § 13000 et seq.); and any and all regulations, policies, or permits issued pursuant to any such authority. Consultant must additionally comply with the lawful requirements of the City, and any other municipality, drainage district, or other local agency with jurisdiction over the location where the Services are to be conducted, regulating water quality and storm water discharges. City may seek damages from Consultant for delay in completing the Services caused by Consultant’s failure to comply with the laws, regulations and policies described in this Section, or any other relevant water quality law, regulation, or policy.

3.3.10.6 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed.

ATTACHMENT 3
BB&K (2023) -6- PROFESSIONAL SERVICES AGREEMENT

3.3.11 Insurance.

3.3.11.1 Time for Compliance. Consultant shall not commence work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subconsultant to commence work on any subcontract until it has provided evidence satisfactory to the City that the subconsultant has secured all insurance required under this section. Failure to provide and maintain all required insurance shall be grounds for the City to terminate this Agreement for cause.

3.3.11.2 Types of Insurance Required. As a condition precedent to the effectiveness of this Agreement for work to be performed hereunder, and without limiting the indemnity provisions of the Agreement, the Consultant, in partial performance of its obligations under such Agreement, shall procure and maintain in full force and effect during the term of the Agreement the following policies of insurance. If the existing policies do not meet the insurance requirements set forth herein, Consultant agrees to amend, supplement or endorse the policies to do so.
(A) Commercial General Liability: Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office "occurrence" form CG 00 01, or the exact equivalent, with limits of not less than $1,000,000 per occurrence and no less than $2,000,000 in the general aggregate. Defense costs shall be paid in addition to the limits. The policy shall contain no endorsements or provisions (1) limiting coverage for contractual liability; (2) excluding coverage for claims or suits by one insured against another (cross-liability); (3) products/completed operations liability; or (4) containing any other exclusion(s) contrary to the terms or purposes of this Agreement. (B) Automobile Liability Insurance: Automobile Liability Insurance with coverage at least as broad as Insurance Services Office Form CA 00 01 covering "Any Auto" (Symbol 1), or the exact equivalent, covering bodily injury and property damage for all activities with limits of not less than $1,000,000 combined limit for each occurrence. (C) Workers' Compensation: Workers' Compensation
Insurance, as required by the State of California and Employer's Liability Insurance with a limit of not less than $1,000,000 per accident for bodily injury and disease. (D) Professional Liability (Errors & Omissions): Professional Liability insurance or Errors & Omissions insurance appropriate to Consultant’s profession with limits of not less than $1,000,000. Covered professional services shall specifically include all work to be performed under the Agreement and delete any exclusions that may potentially affect the work to be performed (for example, any exclusions relating to lead, asbestos, pollution, testing, underground storage tanks, laboratory analysis, soil work, etc.). If coverage is written on a claims-made basis, the retroactive date shall precede the effective date of the initial Agreement and continuous coverage will be maintained or an extended reporting period will be exercised for a period of at least five (5) years from termination or expiration of this Agreement.

3.3.11.3 Insurance Endorsements. Required insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms approved by the City to add the following provisions to the insurance policies:

ATTACHMENT 3
BB&K (2023) -7- PROFESSIONAL SERVICES AGREEMENT
(A) Commercial General Liability: (1) Additional Insured: The City, its officials, officers, employees, agents, and volunteers shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement.

Additional Insured Endorsements shall not (1) be restricted to "ongoing operations"; (2) exclude "contractual liability"; (3) restrict coverage to "sole" liability of Consultant; or (4) contain any other exclusions contrary to the terms or purposes of this Agreement. For all policies of Commercial General Liability insurance, Consultant shall provide endorsements in the form of ISO CG 20 10 10 01 and 20 37 10 01 (or endorsements providing the exact same coverage) to effectuate this requirement. (2) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (B) Automobile Liability. (1) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium.
(C) Professional Liability (Errors & Omissions): 1) Cancellation:

Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (2) Contractual Liability Exclusion Deleted: This insurance shall include contractual liability applicable to this Agreement. The policy must “pay on behalf of” the insured and include a provision establishing the insurer’s duty to defend. (D) Workers' Compensation: (1) Cancellation: Required
insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (2) Waiver of Subrogation: A waiver of subrogation stating that the insurer waives all rights of subrogation against the City, its officials, officers, employees, agents, and volunteers.

3.3.11.4 Primary and Non-Contributing Insurance. All policies of Commercial General Liability and Automobile Liability insurance shall be primary and any other insurance, deductible, or self-insurance maintained by the City, its officials, officers, employees, agents, or volunteers shall not contribute with this primary insurance. Policies shall contain or be endorsed to contain such provisions.

3.3.11.5 Waiver of Subrogation. All required insurance coverages, except for the professional liability coverage, shall contain or be endorsed to waiver of subrogation in favor of the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

3.3.11.6 Deductibles and Self-Insured Retentions. Any deductible or selfinsured retention must be approved in writing by the City and shall protect the City, its officials, officers, employees, agents, and volunteers in the same manner and to the same extent as they would have been protected had the policy or policies not contained a deductible or self-insured retention.

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BB&K (2023) -8- PROFESSIONAL SERVICES AGREEMENT

3.3.11.7 Evidence of Insurance. The Consultant, concurrently with the execution of the Agreement, and as a condition precedent to the effectiveness thereof, shall deliver either certified copies of the required policies, or original certificates on forms approved by the City, together with all endorsements affecting each policy. Required insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been submitted to the City for approval. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen (15 days) prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced and not replaced immediately so as to avoid a lapse in the required coverage, Consultant shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies.

3.3.11.8 Acceptability of Insurers. Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and authorized to transact business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.

3.3.11.9 Enforcement of Agreement Provisions (non estoppel).

Consultant acknowledges and agrees that actual or alleged failure on the part of the City to inform Consultant of non-compliance with any requirement imposes no additional obligation on the City nor does it waive any rights hereunder.

3.3.11.10 Requirements Not Limiting. Requirement of specific coverage or minimum limits contained in this Section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance.

3.3.11.11 Additional Insurance Provisions
(A) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by the City, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
(B) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Consultant or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement.
(C) The City may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project.

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(D) Neither the City nor any of its officials, officers, employees, agents or volunteers shall be personally responsible for any liability arising under or by virtue of this Agreement.
(E) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability. Further the limits set forth herein shall not be construed to relieve the Consultant from liability in excess of such coverage, nor shall it limit the Consultant’s indemnification obligations to the City and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or law.
(F) Consultant shall report to the City, in addition to Consultant’s insurer, any and all insurance claims submitted by Consultant in connection with the Services under this Agreement.

3.3.11.12 Insurance for Subconsultants. Consultant shall include all subconsultants engaged in any work for Consultant relating to this Agreement as additional insureds under the Consultant's policies, or the Consultant shall be responsible for causing subconsultants to purchase the appropriate insurance in compliance with the terms of these Insurance Requirements, including adding the City, its officials, officers, employees, agents, and volunteers as additional insureds to the subconsultant's policies. All policies of Commercial General Liability insurance provided by Consultant’s subconsultants performing work relating to this Agreement shall be endorsed to name the City, its officials, officers, employees, agents and volunteers as additional insureds using endorsement form ISO CG 20 38 04 13 or an endorsement providing equivalent coverage. Consultant shall not allow any subconsultant to commence work on any subcontract relating to this Agreement until it has received satisfactory evidence of subconsultant’s compliance with all insurance requirements under this Agreement, to the extent applicable. The Consultant shall provide satisfactory evidence of compliance with this section upon request of the City.

3.4 Labor Code Requirements.

3.4.1 Prevailing Wages. Consultant is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Consultant's principal place of business and at the project site. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the Labor Code within this Agreement, and Consultant shall therefore comply with such Labor Code sections to the fullest extent required by law. Consultant shall defend, indemnify and hold the City, its officials, officers, employees, agents, and volunteers free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.

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3.4.2 Registration/DIR Compliance. If the Services are being performed on a public works project of over $25,000 when the project is for construction, alteration, demolition, installation, or repair work, or a public works project of over $15,000 when the project is for maintenance work, in addition to the foregoing, then pursuant to Labor Code sections 1725.5 and 1771.1, the Consultant and all subconsultants must be registered with the Department of Industrial Relations (“DIR”). Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants.

3.4.3 Compliance Monitoring. This Project may also be subject to compliance monitoring and enforcement by the DIR. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements, including the submission of payroll records directly to the DIR. Any stop orders issued by the DIR against Consultant or any subconsultant that affect Consultant’s performance of services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the DIR against Consultant or any subconsultant.

3.4.4 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.

3.5 Termination of Agreement.

3.5.1.1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those Services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause. The rights and remedies of the City provided in this section shall not be exclusive and are in addition to any other rights and remedies provided by law, equity or under this Agreement.

3.5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen (15) days of the request.

3.5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

3.6 Indemnification.

3.6.1 To the fullest extent permitted by law, Consultant shall defend (with counsel

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of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s Services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses except such loss or damage caused by the sole negligence or willful misconduct of the City. Consultant's obligation to indemnify shall survive expiration or termination of this Agreement and shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, or volunteers.

3.6.2 If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.

3.7 General Provisions.

3.7.1 Accounting Records. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement.

3.7.2 Independent Contractors and Subcontracting.

3.7.2.1 Use of Consultants. Consultant is aware of statutory and case law regarding classification of workers as independent contractors, including California Labor Code Section 2750.3 and Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903 (2018). To ensure that Consultant is in compliance with the California Labor Code, Consultant shall only utilize its employees to provide the Services. Consultant may not provide the services through any independent contractor, subcontractor or subconsultant (“Subcontractor(s)”) unless approved by the City as set forth in Section 3.7.2.2 below. Consultant represents and warrants that all personnel who perform the Services on Consultant’s behalf are Consultant’s employees, and that Consultant complies with all applicable laws, rules and regulations governing its employees, including, but not limited to, the California Labor Code, Unemployment Insurance Code and all applicable Industrial Welfare Commission Wage Orders.

3.7.2.2 Prior Approval Required. Consultant shall not use any Subcontractor to provide the Services, or any portion of the work required by this Agreement, without prior written approval of City. In the event that City authorizes Consultant to use a Subcontractor, Consultant shall enter into a written agreement with the Subcontractor, which must

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include all provisions of the Agreement, including a restriction on the Subcontractor’s use of further independent contractors, subcontractors or subconsultants without the City’s prior written consent.

3.7.3 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose:

Consultant: North Coast Engineering, Inc.
725 Creston Road, Suite C
Paso Robles, CA 93446
ATTN: Greg Jager, PE, President, CEO
[email protected]
City: City of Arroyo Grande
300 E. Branch Street
Arroyo Grande, CA 93420
ATTN: Matthew Downing, City Manager
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

3.7.4 Ownership of Materials and Confidentiality.

3.7.4.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). All Documents & Data shall be and remain the property of City, and shall not be used in whole or in substantial part by Consultant on other projects without the City’s express written permission. Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Consultant shall provide to City reproducible copies of all Documents & Data, in a form and amount required by City. City reserves the right to select the method of document reproduction and to establish where the reproduction will be accomplished. The reproduction expense shall be borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of compensation to which the Consultant is entitled under the termination provisions of this Agreement, Consultant shall provide all Documents & Data to City upon payment of the undisputed amount. Consultant shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Consultant shall retain copies of all Documents & Data on file for a minimum of fifteen (15) years following completion of the Project, and shall make copies available to City upon the payment of actual reasonable duplication costs. Before destroying the Documents & Data following this retention period, Consultant shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents.