CITY COUNCIL MEETING
AGENDA SUMMARY
Tuesday, October 13, 2026, 6:00 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:
None.
1. CALL TO ORDER
2. ROLL CALL
3. MOMENT OF REFLECTION
4. FLAG SALUTE
5. AGENDA REVIEW
5.a Closed Session Announcements
None.
5.b Ordinances read in title only
None.
6. SPECIAL PRESENTATIONS
6.a Honorary Proclamation Declaring October 2026 as Domestic Violence 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
None.
Reports are made during the Second Council Meeting each month.
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 September 22, 2026, as submitted.
9.b Cash Disbursement Ratification
(SCHOTBORGH)
Recommended Action:
Review and ratify the attached listing of cash disbursements for the period of September 1 through September 30, 2026.
9.c Statement of Investment Deposits for August 2026
(SCHOTBORGH)
Recommended Action:
Receive and file the attached report listing investment deposits of the City of Arroyo Grande as of August 31, 2026, as required by Government Code Section 53646(b).
9.d Approval of Fourth Amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Service, Inc. (SCHOTBORGH)
Recommended Action:
Adopt a Resolution approving and authorizing the City Manager to execute a fourth amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Services, Inc., for solid waste collection services.
9.e Opposition to Proposition 43, Limiting Voters’ Ability to Raise Revenues for Local Government Services
(DOWNING)
Recommended Action:
Adopt a Resolution opposing Proposition 43, a constitutional amendment on the November 2026 statewide ballot to limit voters’ ability to raise revenues for local government services.
9.f Notice of Acceptance, Rebid Roof Repairs
(ROBESON)
Recommended Action:
1) Adopt the Resolution accepting the Rebid Roof Repairs on City Structures Project, directing staff to file a Notice of Completion, and release of retention thirty-five days after the Notice of Completion has been recorded, if no liens have been filed; and 2) Determine 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.)
9.g Purchase of Replacement Dump Truck and Surplus Vehicles
(ROBESON)
Recommended Action:
1) Adopt a Resolution approving the purchase of a dump truck through the Sourcewell Cooperative Purchasing Program;
2) Adopt a Resolution declaring specified existing equipment as surplus and authorizing the sale or disposal thereof; and
3) Determine that adopting the Resolutions are 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)(4)-(5).)
9.h Temporary Use Permit 26-007; Authorization for Temporary Closure of Branch Street for Halloween in the Village; Saturday, October 31, 2026
(RICE)
Recommended Action:
1) Adopt a Resolution approving Temporary Use Permit 26-007 for the annual Halloween in the Village event, authorizing the closure of City streets and a fee waiver; and 2) Find the action exempt from CEQA pursuant to Section 15304(e) of the CEQA Guidelines.
10. PUBLIC HEARINGS
None.
11. BUSINESS ITEMS
11.a Adoption of the 2026 Emergency Operations Plan and Associated Annexes (HALLETT)
Recommended Action:
Adopt a Resolution adopting the 2026 Emergency Operations Plan (EOP) and associated functional and hazard-specific annexes.
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.
Item 9.a.
ACTION MINUTES
REGULAR MEETING OF THE CITY COUNCIL
September 22, 2026, 6:00 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 Members Absent: Council Member Aileen Loe
Staff Present: City Clerk Jessica Matson, City Attorney Isaac Rosen, City Manager Matthew Downing,
Assistant City Manager/Public Works Director
Bill Robeson, Community Development
Director Krystin Rice, Planning Manager
Andrew Perez, Recreation Services Director
Sheridan Bohlken, Interim Administrative
Services Director Megan Schotborgh, Police
Chief David Culver, City Engineer Shannon
Sweeney
This meeting was conducted in a hybrid in-person/virtual format. _____________________________________________________________________
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. Council Member Loe was absent.
3. MOMENT OF REFLECTION
4. FLAG SALUTE
Mayor Ray Russom led the flag salute.
5. AGENDA REVIEW
Mayor Ray Russom requested to hear Item 11.b. before Item 11.a., and to hear Item 12 after Item 7.
The Council concurred.
5.a Closed Session Announcements
None.
CITY COUNCIL REGULAR MEETING MINUTES
SEPTEMBER 22, 2026
PAGE 2
2 Item 9.a.
5.b Ordinances read in title only
None.
6. SPECIAL PRESENTATIONS
6.a Honorary Proclamation Declaring October 2026 as "National Community Planning Month"
Mayor Ray Russom read the Honorary Proclamation declaring October 2026 as "National Community Planning Month." Community Development Director Rice accepted the Proclamation and recognized the City's Planning staff.
No action was taken on this Item.
6.b Waste Connections Presentation
Zach Zimmerman, Waste Connections, presented and responded to questions from Council.
6.c City Manager Communications
City Manager Downing provided updates regarding the turnout for the Summer Concerts Series and next year’s concert series; Harvest Festival and Parade this weekend; Big Ditch Market on October 2nd; Town Hall meeting on September 29th regarding Measure D-26 for potential State water; SLO County Fire/CalFire will complete the structure burn on Valley Road on September 30th and that it is not a City burn; free chipping event in high fire severity zones on October 26- 28 in cooperation with SLO Fire Safe Council; employment opportunities with the City; and the City’s Police Department teamed up with AGHS to develop a PSA regarding safe travel through the traffic circle at the high school.
No action was taken on this item.
7. CITY COUNCIL REPORTS
The City Council provided brief reports from the following committee, commission, board, or other subcommittee meetings that they attended as the City’s appointed representative.
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
CITY COUNCIL REGULAR MEETING MINUTES
SEPTEMBER 22, 2026
PAGE 3
3 Item 9.a.
7.b MAYOR PRO TEM MARAVIGLIA:
1. Five Cities Fire Authority JPA Board
2. Visit SLO CAL Advisory Board
3. REACH Economic Development Roundtable
7.c COUNCIL MEMBER GUTHRIE:
1. Integrated Waste Management Authority Board (IWMA)
2. REACH Economic Development Roundtable
3. San Luis Obispo County Mayor's Meeting
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
8. COMMUNITY COMMENTS AND SUGGESTIONS
Mayor Ray Russom invited public comment. Speaking from the public were Glenn Martin, Sean Dasmann, and Marcy Betita. No further public comments were received. Mayor Ray Russom responded to comments from the public.
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 Mayor Pro Tem Maraviglia
Seconded by Council Member Secrest
Approve Consent Agenda Items 9.a. through 9.d., with the recommended courses of action.
AYES (4): Mayor Pro Tem Maraviglia, Council Member Secrest, Council Member Guthrie, and Mayor Ray Russom
ABSENT (1): Council Member Loe
Passed (4 to 0)
9.a Approval of Minutes
Approved the minutes of the Regular City Council Meeting of September 8, 2026, as submitted.
CITY COUNCIL REGULAR MEETING MINUTES
SEPTEMBER 22, 2026
PAGE 4
4 Item 9.a.
9.b Cash Disbursement Ratification
Reviewed and ratified the listing of cash disbursements for the period of August 16 through August 31, 2026.
9.c Adoption of a Public Meeting Technology Disruption Policy 1) Adopted a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE ADOPTING A PUBLIC MEETING TECHNOLOGY DISRUPTION POLICY"; and
2) Determined that adopting the Resolution is not a project subject to the California Environmental Quality Act pursuant to State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378 because it will not result in a direct or reasonably foreseeable indirect physical change in the environment.
9.d General Plan Update Progress Report – September 2026 Received and filed a progress report on the Comprehensive General Plan Update.
10. PUBLIC HEARINGS
None.
11. BUSINESS ITEMS
11.a Fiscal Year 2025-26 Tourism Marketing Report
Mayor Ray Russom declared a conflict of interest due to owning a short-term rental and left the meeting. Mayor Pro Tem Maraviglia presided.
Recreation Services Director Bohlken introduced the Item. Richardson Reigart, Commune Communication, presented. Director Bohlken and Mr. Reigart responded to questions from Council.
Mayor Pro Tem Maraviglia invited public comment. Speaking from the public was Sean Dasmann. No further public comments were received.
The Report was received and filed.
11.b 2027 Roost and Rhythm Music Festival
This Item was heard before Item 11a.
Recreation Services Director Bohlken presented the Item.
Director Bohlken and Andres Nuno, En Fuego Events, responded to questions from Council including a potential entertainment zone.
Mayor Ray Russom invited public comment. Speaking from the public were Marcy Betita, Sean Dasmann, and Judy Cecchetti. No further public comments were received.
CITY COUNCIL REGULAR MEETING MINUTES
SEPTEMBER 22, 2026
PAGE 5
5 Item 9.a.
Discussion ensued and Council encouraged further consideration of an entertainment zone; a program to reach out to hotels and offering the same benefits to everyone paying into the TBID; considering a spring shoulder season event in the future; and looking further into the idea of an added 5K to the event.
Moved by Council Member Secrest
Seconded by Mayor Pro Tem Maraviglia
1) Adopt a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ADOPTING A RESOLUTION APPROVING THE PROPOSED 2027
ROOST AND RHYTHM MUSIC FESTIVAL CONCEPT AS A THREE-DAY EVENT PLANNED FOR JUNE 11-13, 2027, APPROVING THE TOURISM ENHANCEMENT EVENT SPONSORSHIP PROGRAM, APPROVING THE CITY’S PARTICIPATION AS A COSPONSOR OF THE EVENT, AUTHORIZING THE CITY MANAGER TO EXECUTE AN EVENT SERVICES AGREEMENT CONTRACT WITH EN FUEGO ENTERPRISES, INC. FOR THE EVENT"; and
2) Find this action exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15304 of the CEQA Guidelines.
AYES (4): Council Member Secrest, Mayor Pro Tem Maraviglia, Council Member Guthrie, and Mayor Ray Russom
ABSENT (1): Council Member Loe
Passed (4 to 0)
12. COUNCIL COMMUNICATIONS
This Item was heard before Item 8.
Council Member Guthrie asked if staff could agendize a formal letter opposing Proposition 43. City Manager Downing provided comments regarding the City's legislative platform. City Attorney Rosen responded to questions from Council. Council concurred with adding the item to a future agenda.
Mayor Ray Russom shared that she participated in judging the Harvest Festival Scarecrow Contest and some highlights from the contest.
13. ADJOURNMENT
There being no further business to come before the City Council, Mayor Pro Tem Maraviglia adjourned the meeting at 7:51 pm.
_________________________
Caren Ray Russom, Mayor
_________________________
Jessica Matson, City Clerk
Item 9.b.
MEMORANDUM
TO: City Council
FROM: Megan Schotborgh, Director of Administrative Services SUBJECT: Cash Disbursement Ratification
DATE: October 13, 2026
RECOMMENDATION:
Review and ratify the attached listing of cash disbursements for the period of September 1 through September 30, 2026.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is a $3,393,518.65 fiscal impact for the period of September 1 through September 30, 2026, that includes the following items:
Accounts Payable Checks $2,315,252.36
Payroll & Benefit Checks $1,078,266.29
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 and FY 2026-27 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
October 13, 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. September 1 through September 30, 2026 – Accounts Payable Check Register
2. September 4 and September 18, 2026 – Payroll & Benefit Check Registers
City of Arroyo Grande
INV GROUP PUBLICATION LIST
Report generated: 10/01/2026 15:48
User: mschotborgh
Program ID: appdwarr
INV GROUP RANGE:090126 TO 093026 DATES: 07/01/26 TO 06/30/27
ACCOUNT
VENDOR NAME AMOUNT
100 1033 CHANGE CASH-SPECIAL RECREATION
PETTY CASH 700.00
100 1111 ACCOUNTS RECEIVABLE - FCFA
CIO SOLUTIONS LP 1,877.60
HEALTH AND HUMAN RESOURCE CTR 49.41
100 2206 DEPOSITS-COMMERCIAL BLDG.
BREBES, DIANE 156.00
ONE TIME PAY 52.00
10004000 4050 BUSINESS LICENSE TAX
ONE TIME PAY REFUND 144.00
10004000 4203 PARKING FINES
ONE TIME PAY 139.00
SLO COUNTY AUDITOR-CONTROLLER 882.00
10004000 4354 PARK USER FEES
ONE TIME PAY 54.00
10004000 4376 COLLECTIONS-CREDIT BUREAU
FINANCIAL CREDIT NETWORK INC 190.69
10004000 4512 SIGN REVIEWS
ONE TIME PAY 413.00
10004000 4521 GENERAL PLAN UPDATE FEE
ONE TIME PAY 12.39
10004000 4522 TECHNOLOGY FEE
ONE TIME PAY 8.26
10004000 4605 SPEC.INT.CLASSES
JENSEN, MONIQUE 190.00
NICHOLS, TERRA 70.00
ONE TIME PAY 1,282.40
SUTHERLAND, ERICA 125.00
10004000 4771 COUNTY TMD ASSESSMNT ADMIN FEE
VISIT SLO CAL -588.71
10014001 5395 COMMUNITY SERVICES GRANT
CENTER FOR CHILD & ADOLESCENT 5,000.00
CLARK CENTER FOR THE 3,600.00
10014002 5301 ADVERTISING
NEW TIMES 124.00
THE MCCLATCHY COMPANY LLC 292.07
10014002 5506 ELECTIONS
AMAZON CAPITAL SERVICES 73.26
10014003 5304 PROFESSIONAL SERVICES
BEST BEST & KRIEGER LLP 41,815.32
10014099 5132 DENTAL INSURANCE
DELTA DENTAL 2,518.72
10014099 5133 VISION INSURANCE
VISION SERVICE PLAN 626.96
10014101 5303 CONTRACTUAL SERVICES
TRIPEPI SMITH 3,985.00
10014101 5501 TRAVEL/CONFERENCE/TRAINING
DOWNING, MATTHEW 335.69
10014101 5504 PUBLIC RELATIONS
GRAND AWARDS, INC 78.30
10014102 5201 SUPPLIES-OFFICE
AMAZON CAPITAL SERVICES 79.36
Attachment 1
City of Arroyo Grande
INV GROUP PUBLICATION LIST
Report generated: 10/01/2026 15:48
User: mschotborgh
Program ID: appdwarr
INV GROUP RANGE:090126 TO 093026 DATES: 07/01/26 TO 06/30/27
ACCOUNT
VENDOR NAME AMOUNT
10014102 5255 SPECIAL DEPARTMENT SUPPLIES
BURDINE PRINTING 889.25
CRISP IMAGING 95.49
10014102 5602 MAINTENANCE-OFFICE EQUIPMENT
FLEXTG LLC 179.74
10014110 5303 CONTRACTUAL SERVICES
LIEBERT, CASSIDY, WHITMORE 1,018.50
10014110 5316 JOB RECRUITMENT EXPENSE
MOSAIC PUBLIC PARTNERS LLC 15,600.00
10014120 5201 SUPPLIES-OFFICE
AMAZON CAPITAL SERVICES 68.01
10014120 5303 CONTRACTUAL SERVICES
HINDERLITER, DE LLAMAS & ASSOC 1,124.36
ROBERT HALF 2,843.75
10014140 5303 CONTRACTUAL SERVICES
CDW GOVERNMENT, INC 5,933.00
CHARTER COMMUNICATIONS 2,050.00
CIO SOLUTIONS LP 12,274.46
ROBERT HALF 2,347.35
TOTAL COMMUNICATIONS SOLUTIONS 23.45
10014140 5501 TRAVEL/CONFERENCE/TRAINING
WADDY, KEVIN 322.00
10014140 5602 MAINTENANCE-OFFICE EQUIPMENT
AMAZON CAPITAL SERVICES 360.57
10014140 5607 MAINTENANCE-COMPUTER SOFTWARE
CIO SOLUTIONS LP 6,192.90
10014145 5147 EMPLOYEE ASSISTANCE PROGRAM
HEALTH AND HUMAN RESOURCE CTR 197.64
10014145 5208 POSTAGE/MAILING
NEW TIMES 124.00
PITNEY BOWES, INC 535.21
US POSTAL SERVICE 3,000.00
10014145 5401 UTILITIES
CHARTER COMMUNICATIONS 3,337.78
PACIFIC GAS & ELECTRIC CO 13,968.09
SOCALGAS 233.31
SOUTH SLO COUNTY SANIT DIST 462.72
10014145 5403 TELECOMMUNICATIONS
AT & T 185.43
AT&T 82.57
VERIZON WIRELESS 117.57
10014145 5503 MEMBERSHIPS & SUBSCRIPTIONS
SLOACTTC 18,189.68
10014145 5553 RENT-BUILDINGS & LAND
ATLAS PERFORMANCE INDUSTRIES I 4,326.00
10024130 2670 REIMBURSEMENT AGREEMENT
SWCA ENVIRONMENTAL CONSULTANTS 7,498.08
10024130 5201 SUPPLIES-OFFICE
BOONE PRINTING & GRAPHICS INC 57.62
GRAND AWARDS, INC 52.20
10024130 5301 ADVERTISING
AMAZON CAPITAL SERVICES 27.29
Attachment 1
City of Arroyo Grande
INV GROUP PUBLICATION LIST
Report generated: 10/01/2026 15:48
User: mschotborgh
Program ID: appdwarr
INV GROUP RANGE:090126 TO 093026 DATES: 07/01/26 TO 06/30/27
ACCOUNT
VENDOR NAME AMOUNT
10024130 5501 TRAVEL/CONFERENCE/TRAINING
ALVAREZ, CHRISTINA 363.28
10024160 5303 CONTRACTUAL SERVICES
JAS PACIFIC 74,523.40
10034201 5201 SUPPLIES-OFFICE
AMAZON CAPITAL SERVICES 978.88
MINER'S ACE HARDWARE, INC 5.66
10034201 5255 SPECIAL DEPARTMENT SUPPLIES
AMAZON CAPITAL SERVICES 811.19
BADGE FRAME, INC. 115.00
MINER'S ACE HARDWARE, INC 11.41
10034201 5272 PROTECTIVE/SAFETY CLOTHING
LOS PADRES FIRE PROTECTION 214.74
SKAGGS PUBLIC SAFETY UNIFORMS 983.93
10034201 5303 CONTRACTUAL SERVICES
ATC SEQUOIA LLC 142.57
FLEXTG LLC 217.67
OFFICE1 1,041.21
PARAMOUNT CLEANERS 526.00
PHOENIX GROUP 220.20
TRANSUNION RISK 100.00
10034201 5315 PRE-EMPLOYMENT PHYSICALS
BLEDSOE, JOHN 2,000.00
GOVERNMENTJOBS.COM INC, NEOGOV 64.18
10034201 5324 FORENSIC MANDATE SERVICES
SART PROGRAM 2,766.00
SLO COUNTY SHERIFF-CORONER 780.00
10034201 5329 LIVE SCAN FINGERPRINTING EXP.
CA ST DEPT OF JUSTICE 223.00
10034201 5403 TELECOMMUNICATIONS
AT&T 266.73
CHARTER COMMUNICATIONS 199.98
VERIZON WIRELESS 1,206.76
10034201 5501 TRAVEL/CONFERENCE/TRAINING
CULVER, DAVID 225.00
RAMIREZ, TIMOTHY 300.00
STACCATO 2011 LLC 1,833.83
10034201 5502 TUITION & REIMBURSEMENT
SMILEY, JONATHAN 2,000.00
10034201 5504 PUBLIC RELATIONS
ENAMELPINS INC 1,674.75
10034201 5601 MAINTENANCE-VEHICLES
APEX AUTO GLASS 220.00
BOB'S EXPRESS WASH 264.00
BOYER'S DIESEL 648.08
MULLAHEY FORD 1,676.06
NICK'S TELECOM 119.42
SANTA MARIA MOTORCYCLES LLC 1,171.08
10034201 5604 MAINTENANCE-BUILDINGS
AMAZON CAPITAL SERVICES 106.33
MINER'S ACE HARDWARE, INC 115.84
10034201 5605 MAINTENANCE-GROUNDS
Attachment 1
City of Arroyo Grande
INV GROUP PUBLICATION LIST
Report generated: 10/01/2026 15:48
User: mschotborgh
Program ID: appdwarr
INV GROUP RANGE:090126 TO 093026 DATES: 07/01/26 TO 06/30/27
ACCOUNT
VENDOR NAME AMOUNT
BURKE AND PACE OF AG, INC 226.66
10034201 5606 MAINTENANCE-RADIO COMM.
APPLIED TECHNOLOGY GROUP INC 168.55
10034201 5608 GAS & OIL
JB DEWAR, INC 353.16
10034201 5615 JANITORIAL SERVICES
BRENDLER JANITORIAL SERVICE 500.00
10044420 5143 UNIFORM ALLOWANCE
PRUDENTIAL OVERALL SUPPLY 283.47
10044420 5148 BOOT ALLOWANCE
BOOT BARN INC 668.88
10044420 5255 SPECIAL DEPARTMENT SUPPLIES
BRAND CREATIVE 47.12
FARM SUPPLY CO 58.70
10044420 5303 CONTRACTUAL SERVICES
JD ELECTRIC 618.00
JTS INC 800.00
SIMPSON, WILLIAM R 300.00
SOUTH COUNTY SANITARY SVC, INC 454.05
WATERBOYS PLUMBING 1,097.00
10044420 5308 STREET TREES
WEST COVINA NURSERIES 101.89
10044420 5552 RENT-EQUIPMENT
GROVER TOOL AND RENTALS 325.00
10044420 5601 MAINTENANCE-VEHICLES
BOB'S EXPRESS WASH 52.00
FIGUEROA'S TIRES 480.04
INTERSTATE BATTERIES OF CENTRA 294.26
LOS PADRES FIRE PROTECTION 286.68
O'REILLY AUTO PARTS 150.36
10044420 5603 MAINTENANCE-MACH & EQUIP
CALIFORNIA TURF EQUIPMENT & 812.32
FIGUEROA'S TIRES 25.00
TURF STAR, INC 695.46
10044420 5605 MAINTENANCE-GROUNDS
ARROYO GRANDE IN BLOOM INC 700.00
BRISCO MILL & LUMBER YARD 368.86
FARM SUPPLY CO 114.97
FASTENAL COMPANY 2,845.10
MINER'S ACE HARDWARE, INC 258.96
NOBLE SAW, INC 142.71
SITEONE LANDSCAPE SUPPLY LLC 310.20
10044421 5303 CONTRACTUAL SERVICES
BRENDLER JANITORIAL SERVICE 250.00
10044421 5601 MAINTENANCE-VEHICLES
BOB'S EXPRESS WASH 15.00
10044421 5602 MAINTENANCE-OFFICE EQUIPMENT
VERIZON WIRELESS 38.01
10044424 5351 SERVICES-CLASSES
AMERICAN LEGION POST 136 700.00
BEATTY, IRINA 128.00
BOWLING, KENDRA 560.00
Attachment 1
City of Arroyo Grande
INV GROUP PUBLICATION LIST
Report generated: 10/01/2026 15:48
User: mschotborgh
Program ID: appdwarr
INV GROUP RANGE:090126 TO 093026 DATES: 07/01/26 TO 06/30/27
ACCOUNT
VENDOR NAME AMOUNT
BRENDLER JANITORIAL SERVICE 200.00
CROSSROADS LEARNING NETWORK 199.50
CUDDY, GAYLE 649.60
FIVE CITIES DUPLICATE BRIDGE 2,460.50
HONEYCUTT, MADISON 192.00
MANGIARDI, HEIDY 2,121.70
MAULE, TAMMY L CROSS 506.10
NELSON, NICCOLA 403.20
STUMP, ANN M 89.60
TENNIS TIME ACADEMY LLC 336.00
THE TEMPLE OF THE PEOPLE 1,000.00
UK INT'L SOCCER CAMPS INC 7,748.07
YOUTH EVOLUTION BASKETBALL 2,362.50
10044424 5352 SERVICES-LEAGUES
JUAREZ, SR, LARRY 40.00
MCELHENIE, MAVERICK SOUSA 321.10
MENDOZA, JESSE DAVID 338.00
10044424 5353 SERVICES-EVENTS
ADEPT EVENTS LLC 3,600.00
CUESTA SPRINGS ICE COMPANY INC 9,243.75
DIMES MEDIA CORP; 600.00
GIVANT, PAUL 2,400.00
UNFINISHED BUSINESS PRODUCTION 1,000.00
WILLIAMS, LAUREN 1,000.00
10054301 5255 SPECIAL DEPARTMENT SUPPLIES
AMAZON CAPITAL SERVICES 25.01
BRAND CREATIVE 35.00
MINER'S ACE HARDWARE, INC 18.45
10054301 5273 SMALL TOOLS
FARM SUPPLY CO 71.76
10054301 5601 MAINTENANCE-VEHICLES
FIGUEROA'S TIRES 120.00
10054305 5143 UNIFORM ALLOWANCE
PRUDENTIAL OVERALL SUPPLY 166.71
10054305 5148 BOOT ALLOWANCE
AMAZON CAPITAL SERVICES 298.15
10054305 5255 SPECIAL DEPARTMENT SUPPLIES
HEACOCK TRAILERS 59.82
KIMBALL MIDWEST 341.50
MINER'S ACE HARDWARE, INC 36.06
10054305 5273 SMALL TOOLS
TCA TOOLS INC 593.72
10054307 5201 SUPPLIES-OFFICE
AMAZON CAPITAL SERVICES 80.41
10054307 5303 CONTRACTUAL SERVICES
SP MAINTENANCE SERVICES, INC 7,342.50
10054307 5402 POWER
PACIFIC GAS & ELECTRIC CO 43,292.42
10054307 5601 MAINTENANCE-VEHICLES
O'REILLY AUTO PARTS 82.63
10054308 5143 UNIFORM ALLOWANCE
PRUDENTIAL OVERALL SUPPLY 133.10
Attachment 1
City of Arroyo Grande
INV GROUP PUBLICATION LIST
Report generated: 10/01/2026 15:48
User: mschotborgh
Program ID: appdwarr
INV GROUP RANGE:090126 TO 093026 DATES: 07/01/26 TO 06/30/27
ACCOUNT
VENDOR NAME AMOUNT
10054308 5148 BOOT ALLOWANCE
BOOT BARN INC 250.01
10054308 5255 SPECIAL DEPARTMENT SUPPLIES
AMAZON CAPITAL SERVICES 19.25
10054308 5273 SMALL TOOLS
MINER'S ACE HARDWARE, INC 163.77
10054308 5303 CONTRACTUAL SERVICES
ALPINE REFRIGERATION 550.00
BREZDEN PEST CONTROL, INC 412.00
CAME SECURITY ALARMS 1,135.00
JD ELECTRIC 555.00
LOS PADRES FIRE PROTECTION 56.85
PRUDENTIAL OVERALL SUPPLY 449.86
SOUTH COUNTY SANITARY SVC, INC 620.52
WATERBOYS PLUMBING 2,891.50
10054308 5316 JOB RECRUITMENT EXPENSE
CA ST DEPT OF JUSTICE 32.00
10054308 5601 MAINTENANCE-VEHICLES
LOS PADRES FIRE PROTECTION 37.90
10054308 5604 MAINTENANCE-BUILDINGS
AMAZON CAPITAL SERVICES 162.15
JD ELECTRIC 565.00
LOS PADRES FIRE PROTECTION 927.94
MINER'S ACE HARDWARE, INC 879.27
STREATOR PIPE & SUPPLY 2,129.03
10054308 5615 JANITORIAL SERVICES
BRENDLER JANITORIAL SERVICE 1,135.00
10054330 5143 UNIFORM ALLOWANCE
PRUDENTIAL OVERALL SUPPLY 125.15
10054330 5148 BOOT ALLOWANCE
BOOT BARN INC 386.64
10054330 5255 SPECIAL DEPARTMENT SUPPLIES
THE SHERWIN-WILLIAMS CO INC 1,446.38
10054330 5303 CONTRACTUAL SERVICES
ALPHA ELECTRICAL SERVICE 185.00
10054330 5601 MAINTENANCE-VEHICLES
FIGUEROA'S TIRES 240.90
LOS PADRES FIRE PROTECTION 37.90
10054330 5605 MAINTENANCE-GROUNDS
BSN SPORTS, LLC 189.96
FARM SUPPLY CO 304.47
FERGUSON ENTERPRISES, INC 550.62
MINER'S ACE HARDWARE, INC 42.38
THE SHERWIN-WILLIAMS CO INC 559.52
110 2107 PARS RETIREMENT
US BANK OF CALIFORNIA 1,779.81
110 2110 DENTAL INSURANCE
DELTA DENTAL 8,579.39
110 2113 LIFE INSURANCE
STANDARD INSURANCE CO 3,091.94
110 2114 GARNISHMENTS
SLO COUNTY SHERIFF'S CIVIL DIV 813.05
Attachment 1
City of Arroyo Grande
INV GROUP PUBLICATION LIST
Report generated: 10/01/2026 15:48
User: mschotborgh
Program ID: appdwarr
INV GROUP RANGE:090126 TO 093026 DATES: 07/01/26 TO 06/30/27
ACCOUNT
VENDOR NAME AMOUNT
110 2115 FIRE EMPLOYEE DUES
FIVE CITIES PROF. FIREFIGHTERS 4,370.00
110 2116 POLICE ASSOCIATION DUES
ARROYO GRANDE POLICE ASSN 2,543.00
110 2117 DEFERRED COMPENSATION
ICMA RETIREMENT CORP PLAN ID 1 3,583.30
ICMA RETIREMENT CORP, PLAN ID 54,380.17
110 2118 S.E.I.U. EMPLOYEE DUES
S.E.I.U. LOCAL 620 1,851.62
110 2119 VISION INSURANCE
VISION SERVICE PLAN 2,145.73
110 2125 PREPAID LEGAL SERVICE
LEGALSHIELD 43.90
110 2126 SUPPLEMENTAL INSURANCE
AFLAC INSURANCE 535.46
12014118 5303 CONTRACTUAL SERVICES
HINDERLITER, DE LLAMAS & ASSOC 1,170.03
14104010 5303 CONTRACTUAL SERVICES
HINDERLITER, DE LLAMAS & ASSOC 3,106.55
21114101 5330 CABLE CASTING EXPENSE
CHARTER COMMUNICATIONS 1,349.00
21654560 5304 PROFESSIONAL SERVICES
RAINSCAPE 484.37
21754560 5355 PARKWAY MAINTENANCE-TR 1769
PACIFIC GAS & ELECTRIC CO 14.11
21954560 5304 PROFESSIONAL SERVICES
PACIFIC GAS & ELECTRIC CO 1.42
RAINSCAPE 1,977.10
22064303 5143 UNIFORM ALLOWANCE
PRUDENTIAL OVERALL SUPPLY 163.45
22064303 5148 BOOT ALLOWANCE
BOOT BARN INC 685.48
22064303 5255 SPECIAL DEPARTMENT SUPPLIES
BRAND CREATIVE 47.13
22064303 5273 SMALL TOOLS
KIMBALL MIDWEST 374.65
MINER'S ACE HARDWARE, INC 119.61
22064303 5303 CONTRACTUAL SERVICES
BUNYON BROS TREE SERVICE 1,450.00
SCHEIDT, TYLER JAMES 1,750.00
SIMPSON, WILLIAM R 800.00
SP MAINTENANCE SERVICES, INC 7,342.50
22064303 5307 DISPOSAL FEES
JTS INC 50.00
TROESH RECYCLING, INC 540.97
22064303 5552 RENT-EQUIPMENT
HARVEY'S HONEY HUTS 212.16
22064303 5601 MAINTENANCE-VEHICLES
BACK ON THE ROAD AUTOMOBILE 131.12
BOB'S EXPRESS WASH 28.00
BOYER'S DIESEL 705.00
FIGUEROA'S TIRES 30.00
Attachment 1
City of Arroyo Grande
INV GROUP PUBLICATION LIST
Report generated: 10/01/2026 15:48
User: mschotborgh
Program ID: appdwarr
INV GROUP RANGE:090126 TO 093026 DATES: 07/01/26 TO 06/30/27
ACCOUNT
VENDOR NAME AMOUNT
GIBBS INTERNATIONAL TRUCKS INC 761.34
INTERSTATE BATTERIES OF CENTRA 209.71
JB DEWAR, INC 491.33
L. DIESEL MOBILE SERVICE 630.00
LOS PADRES FIRE PROTECTION 377.55
NICK'S TELECOM 1,087.28
O'REILLY AUTO PARTS 197.68
22064303 5603 MAINTENANCE-MACH & EQUIP
QUINN COMPANY 1,875.43
22064303 5613 MAINTENANCE-STREETS & BRIDGES
AMAZON CAPITAL SERVICES 354.66
BRISCO MILL & LUMBER YARD 32.59
BURKE AND PACE OF AG, INC 162.21
CONTRACTORS MAINT.SERVICE 32.84
MINER'S ACE HARDWARE, INC 607.53
NOBLE SAW, INC 182.24
O'REILLY AUTO PARTS 104.73
TRAFFIC MANAGEMENT PRODUCTS IN 4,969.13
TROESH RECYCLING, INC 188.12
24014150 5301 ADVERTISING
COMMUNE COMMUNICATIONS CORP 16,072.50
VISIT SLO CAL 3,000.00
24014150 5503 MEMBERSHIPS & SUBSCRIPTIONS
CENTRAL COAST TOURISM COUNCIL 475.00
27134202 5255 SPECIAL DEPARTMENT SUPPLIES
CENTRAL COAST CARTS 14,675.81
35055453 7301 CONTRACT ADMIN/INSPECTION
TYLER TECHNOLOGIES INC 10,400.00
35055468 7001 CONSTRUCTION
A-TOWN AUDIO VIDEO 44,700.00
35055485 7001 CONSTRUCTION
STAY TRUE CONSTRUCTION 4,999.00
35055614 7001 CONSTRUCTION
QUINCON INC 10,626.50
35055638 7001 CONSTRUCTION
NORTH COAST ENGINEERING INC 29,074.00
35055701 7001 CONSTRUCTION
LAHR ELECTRIC 4,341.17
35505080 7001 CONSTRUCTION
NORTH COAST ENGINEERING INC 1,680.00
V. LOPEZ JR & SONS G.E.C. INC 709,670.69
61254610 5143 UNIFORM ALLOWANCE
PRUDENTIAL OVERALL SUPPLY 125.15
61254610 5255 SPECIAL DEPARTMENT SUPPLIES
BRAND CREATIVE 47.12
BURT INDUSTRIAL SUPPLY INC 471.86
61254610 5273 SMALL TOOLS
ARROYO GRANDE HOME & GARDEN 63.98
MINER'S ACE HARDWARE, INC 101.09
61254610 5303 CONTRACTUAL SERVICES
WALLACE GROUP A CALIF CORP 8,377.35
61254610 5402 POWER
Attachment 1
City of Arroyo Grande
INV GROUP PUBLICATION LIST
Report generated: 10/01/2026 15:48
User: mschotborgh
Program ID: appdwarr
INV GROUP RANGE:090126 TO 093026 DATES: 07/01/26 TO 06/30/27
ACCOUNT
VENDOR NAME AMOUNT
PACIFIC GAS & ELECTRIC CO 3,923.14
61254610 5555 BANK CHARGES
DATAPROSE LLC 144.97
61254610 5601 MAINTENANCE-VEHICLES
BOYER'S DIESEL 565.00
MULLAHEY FORD 195.00
61254610 5610 MAINTENANCE-LINES & PUMPS
ALPHA ELECTRICAL SERVICE 366.25
BAKER, INC, R 540.00
LAHR ELECTRIC 1,166.67
MID STATE CONCRETE PROD LLC 673.63
640 2301 DEPOSIT RENTERS
ONE TIME PAY REFUND 1,525.00
64004000 4376 COLLECTIONS-CREDIT BUREAU
FINANCIAL CREDIT NETWORK INC 36.46
64054710 5208 POSTAGE/MAILING
DATAPROSE LLC 2,109.67
64054710 5303 CONTRACTUAL SERVICES
DATAPROSE LLC 400.00
GSI WATER SOLUTIONS 7,277.88
SLO COUNTY ENVIRONMENTAL 2,333.00
WATER SYSTEMS CONSULTING INC 3,974.98
64054710 5310 WATER TREATMENT SERVICES
ABALONE COAST ANALYTICAL INC 630.00
CLINICAL LABORATORY OF 1,805.00
64054710 5315 PRE-EMPLOYMENT PHYSICALS
GARRITY, JEFFREY 140.00
64054710 5555 BANK CHARGES
DATAPROSE LLC 579.88
64054710 5575 INSURANCE CLAIMS/SETTLEMENTS
WHITE BRENNER LLP 2,092.43
64054711 5148 BOOT ALLOWANCE
BOOT BARN INC 250.00
64054711 5402 POWER
PACIFIC GAS & ELECTRIC CO 8,223.48
64054712 5143 UNIFORM ALLOWANCE
BRAND CREATIVE 47.13
PRUDENTIAL OVERALL SUPPLY 240.20
64054712 5148 BOOT ALLOWANCE
BOOT BARN INC 362.12
64054712 5207 SUPPLIES-WATER METERS
AQUA-METRIC SALES CO 19,757.82
64054712 5255 SPECIAL DEPARTMENT SUPPLIES
AMAZON CAPITAL SERVICES 141.21
64054712 5273 SMALL TOOLS
BRISCO MILL & LUMBER YARD 36.40
MINER'S ACE HARDWARE, INC 12.83
64054712 5274 CHEMICAL SUPPLIES
BRENNTAG PACIFIC INC 1,122.94
HACH COMPANY 305.16
64054712 5402 POWER
PACIFIC GAS & ELECTRIC CO 13,502.80
Attachment 1
City of Arroyo Grande
INV GROUP PUBLICATION LIST
Report generated: 10/01/2026 15:48
User: mschotborgh
Program ID: appdwarr
INV GROUP RANGE:090126 TO 093026 DATES: 07/01/26 TO 06/30/27
ACCOUNT
VENDOR NAME AMOUNT
64054712 5501 TRAVEL/CONFERENCE/TRAINING
SCHMIDT, TIM 140.00
SCHMIDT, TUCKER 140.00
64054712 5601 MAINTENANCE-VEHICLES
ARROYO GRANDE CHEVROLET 129.66
BOB'S EXPRESS WASH 39.00
LOS PADRES FIRE PROTECTION 205.72
MULLAHEY FORD 866.90
NICK'S TELECOM 3,066.76
64054712 5603 MAINTENANCE-MACH & EQUIP
INTERSTATE BATTERIES OF CENTRA 113.95
64054712 5609 MAINTENANCE-RESERVOIRS
CREATIVE FENCE CO. 4,200.00
64054712 5610 MAINTENANCE-LINES & PUMPS
BURT INDUSTRIAL SUPPLY INC 367.40
CREATIVE FENCE CO. 1,890.00
ICONIX WATERWORKS (US) INC 2,510.81
MIER BROS LANDSCAPE PRODUCTS 228.38
64054712 5611 MAINTENANCE-METERS
AQUA-METRIC SALES CO 1,665.96
FAMCON PIPE AND SUPPLY INC 123.34
64054712 6301 VEHICLES
MASTERTECH AUTOMOTIVE 81,537.91
760 2304 DEPOSITS-SEWER SVC CHG-S.D.
SOUTH SLO COUNTY SANIT DIST 717,812.03
760 2305 DEPOSIT-SEWER HOOKUPS-S.D.
SOUTH SLO COUNTY SANIT DIST 30,982.10
761 2007 DUE TO COUNTY OF SLO
VISIT SLO CAL 29,435.62
TOTAL 2,315,252.36
** END OF REPORT - Generated by Megan Schotborgh **
Attachment 1
.
General Fund 485,463.46 5101 Salaries Full time 332,164.53 Streets Fund 20,648.47 5101 Volunteer Employee Retirement - Sewer Fund 19,849.26 5102 Salaries Part-Time - PPT 4,795.30 Water Fund 25,731.88 5103 Salaries Part-Time - TPT 8,737.50 551,693.07 5105 Salaries OverTime 17,942.17
5106 Salaries Strike Team OT -
5107 Salaries Standby 1,742.10
5108 Holiday Pay 11,048.38
5109 Sick Pay 7,763.35
Administrative Services - 5110 Annual Leave Buyback -
Information Services - 5111 Vacation Buyback -
Community Development - 5112 Sick Leave Buyback -
Police 17,105.56 5113 Vacation Pay 7,591.60
Public Works - Maintenance 623.90 5114 Comp Pay 1,188.29 Public Works - Enterprise 212.71 5115 Annual Leave Pay 8,903.16 Recreation - Administration - 5116 Salaries - Police FTO 279.26 Recreation - Special Events - 5121 PERS Retirement 43,772.15 17,942.17 5122 Social Security 30,177.15
5123 PARS Retirement 204.38
5126 State Disability Ins. 5,153.66
5127 Deferred Compensation 2,062.44
5131 Health Insurance 60,769.14
5132 Dental Insurance 3,158.16
5133 Vision Insurance 780.43
5134 Life Insurance 392.72
5135 Long Term Disability 463.33
5137 Leave Payouts -
5142 Unemployment Insurance -
5143 Uniform Allowance 114.41
5144 Car Allowance 1,012.50
5146 Council Expense -
5147 Employee Assistance -
5148 Boot Allowance -
5149 Motor Pay 24.46
5150 Bi-Lingual Pay 200.00
5151 Cell Phone Allowance 1,252.50
551,693.07
OVERTIME BY DEPARTMENT:
CITY OF ARROYO GRANDE
DEPARTMENTAL LABOR DISTRIBUTION
PAY PERIOD
08/14/26 - 08/27/26
9/4/2026
BY FUND BY ACCOUNT
Attachment 2
.
General Fund 459,719.19 5101 Salaries Full time 293,495.89 Streets Fund 20,552.10 5101 Volunteer Employee Retirement - Sewer Fund 18,346.29 5102 Salaries Part-Time - PPT 2,424.23 Water Fund 27,955.64 5103 Salaries Part-Time - TPT 7,414.77 526,573.22 5105 Salaries OverTime 18,464.71
5106 Salaries Strike Team OT -
5107 Salaries Standby 1,841.10
5108 Holiday Pay 26,226.31
5109 Sick Pay 10,421.23
Administrative Services 249.09 5110 Annual Leave Buyback - Information Services - 5111 Vacation Buyback -
Community Development - 5112 Sick Leave Buyback -
Police 16,214.41 5113 Vacation Pay 11,162.57
Public Works - Maintenance 893.30 5114 Comp Pay 3,752.97 Public Works - Enterprise 1,107.91 5115 Annual Leave Pay 7,782.76 Recreation - Administration - 5116 Salaries - Police FTO 104.83 Recreation - Special Events - 5121 PERS Retirement 41,791.57 18,464.71 5122 Social Security 28,506.97
5123 PARS Retirement 151.59
5126 State Disability Ins. 4,954.80
5127 Deferred Compensation 2,062.44
5131 Health Insurance 58,498.06
5132 Dental Insurance 3,030.72
5133 Vision Insurance 759.89
5134 Life Insurance 392.72
5135 Long Term Disability 463.33
5137 Leave Payouts -
5142 Unemployment Insurance -
5143 Uniform Allowance 114.41
5144 Car Allowance 1,284.50
5146 Council Expense -
5147 Employee Assistance -
5148 Boot Allowance -
5149 Motor Pay 18.35
5150 Bi-Lingual Pay 200.00
5151 Cell Phone Allowance 1,252.50
526,573.22
OVERTIME BY DEPARTMENT:
CITY OF ARROYO GRANDE
DEPARTMENTAL LABOR DISTRIBUTION
PAY PERIOD
08/28/2026-09/10/2026
9/18/2026
BY FUND BY ACCOUNT
Attachment 2
Item 9.c.
MEMORANDUM
TO: City Council
FROM: Megan Schotborgh, Director of Administrative Services SUBJECT: Statement of Investment Deposits for August 2026 DATE: October 13, 2026
RECOMMENDATION:
Receive and file the attached report listing investment deposits of the City of Arroyo Grande as of August 31, 2026, as required by Government Code Section 53646(b).
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is no funding impact on the City related to these reports. However, the City does receive interest revenue based on the interest rate of the investments. Little to no future staff time is projected.
BACKGROUND:
The Administrative Services department has historically submitted to the City Council a monthly report providing the following information:
1. Type of investment.
2. Financial institution (bank, savings and loan, broker, etc.).
3. Date of maturity.
4. Principal amount.
5. Rate of interest.
6. Current market value for all securities having a maturity of more than 12 months.
7. Relationship of the monthly report to the annual statement of investment policy.
ANALYSIS OF ISSUES:
This report represents the City’s investments as of August 31, 2026, and includes all investments managed by the City. As of August 31, 2026, the investment portfolio complied with all State laws and the City’s investment policy.
Item 9.c.
City Council
Statement of Investment Deposits for August 2026
October 13, 2026
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Approve staff’s recommendation to receive and file the attached report listing the investment deposits;
2. Do not approve staff’s recommendation; or
3. Provide other direction to staff.
ADVANTAGES:
Safety of principal is the foremost objective of the City. Investments are undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.
DISADVANTAGES:
Some level of risk is present in any investment transaction. Losses could be incurred due to market price changes, technical cash flow complications such as the need to withdraw a non-negotiable Time Certificate of Deposit early, or even the default of an issuer. To minimize such risks, diversification of the investment portfolio by institution and by investment instruments are being used as much as is practical and prudent.
ENVIRONMENTAL REVIEW:
The Statement of Investment Deposits 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. Portfolio Summary: August 31, 2026
CITY OF ARROYO GRANDE
Portfolio Summary
August 31, 2026
Investments Principal Value
Current Market
Value
Interest
Rate Date of Purchase Term Maturity Date
% of
Portfolio
Local Agency Investment Fund $ 8,895,812.61 $ 8,895,812.61 3.863% 35.527% Certificates of Deposit
Pacific Premier Bank 249,000.00 249,000.00 3.680% February 21, 2026 12 mos February 21, 2027 0.995% California Credit Union Glendale 243,000.00 243,000.00 5.450% October 26, 2023 36 mos October 26, 2026 0.971% Alliant Credit Union 248,000.00 248,000.00 5.500% November 15, 2023 36 mos November 16, 2026 0.991% Capital One Bank USA 248,000.00 248,000.00 1.250% December 8, 2021 60 mos December 8, 2026 0.991% Bank United NA 249,000.00 249,000.00 1.350% December 8, 2021 60 mos December 8, 2026 0.995% Paragon Bank TN 245,000.00 245,000.00 4.050% March 19, 2025 24 mos March 19, 2027 0.979% Discover Bank 246,000.00 246,000.00 3.200% May 18, 2022 60 mos May 19, 2027 0.983% United Teletech Financial Credit Union 248,000.00 248,000.00 5.100% November 8, 2023 48 mos November 8, 2027 0.991% Medallion Bank UT 249,000.00 249,000.00 4.000% March 14, 2025 36 mos March 14, 2028 0.995% Amerant Bank NA 245,000.00 245,000.00 4.050% March 28, 2025 36 mos March 28, 2028 0.979% Freedom Northwest Credit Union 249,000.00 249,000.00 4.000% March 28, 2025 36 mos March 28, 2028 0.995% Morgan Stanley Bank 244,000.00 244,000.00 4.650% April 6, 2023 60 mos April 6, 2028 0.975% Maine Savings Federal Credit Union 249,000.00 249,000.00 4.800% July 21, 2023 60 mos July 21, 2028 0.995% SkyOneFederal Credit Union 249,000.00 249,000.00 3.900% October 25, 2024 48 mos October 25, 2028 0.995% Merrick Bank UT 249,000.00 249,000.00 4.000% March 19, 2025 48 mos March 19, 2029 0.995% Bank Hapoalim BM New York 244,000.00 244,000.00 4.500% May 21, 2024 60 mos May 21, 2029 0.975% Morgan Stanley Private Bank 244,000.00 244,000.00 4.650% May 22, 2024 60 mos May 22, 2029 0.975% Goldman Sachs Bank USA 245,000.00 245,000.00 4.000% March 18, 2025 60 mos March 18, 2030 0.979% BMW Bank NA Salt Lake 245,000.00 245,000.00 4.000% May 16, 2025 48 mos May 16, 2029 0.979% Texas Exchange Bank Crowley 249,000.00 249,000.00 4.000% May 23, 2025 48 mos May 23, 2029 0.995% Wells Fargo Bank Natl Assn 249,000.00 249,000.00 3.950% May 29, 2025 48 mos May 29, 2030 0.995% Security First Bk Lincoln Neb 245,000.00 245,000.00 3.950% July 3, 2025 48 mos July 3, 2030 0.979% CFG Bank Lutherville Md 244,000.00 244,000.00 4.300% July 23, 2026 53 mos October 23, 2030 0.975% Synchrony Bank 245,000.00 245,000.00 3.600% October 24, 2025 60 mos October 24, 2030 0.979% Institution for Svgs Newbury 249,000.00 249,000.00 3.650% October 28, 2025 60 mos October 28, 2030 0.995% State Bank India New York 245,000.00 245,000.00 3.900% April 7, 2026 60 mos April 7, 2031 0.979% Celtic Bank Salt Lake City 249,000.00 249,000.00 3.900% April 17, 2026 60 mos April 17, 2031 0.995% Sallie Mae Bank Utah 244,000.00 244,000.00 4.400% July 22, 2026 60 mos July 22, 2031 0.975% First Natl Bank Amer 249,000.00 249,000.00 4.350% August 11, 2026 60 mos August 11, 2031 0.995% Total Certificates of Deposit 7,156,000.00 7,156,000.00 28.595% Attachment 1
Agency Bonds
Federal Home Loan Bank 994,396.00 990,360.00 2.400% March 17, 2021 72 mos March 29, 2027 3.972% Federal Home Loan Bank 500,000.00 496,860.00 3.375% May 17, 2022 60 mos May 17, 2027 1.997% Federal Agriculture Mortgage Corp 495,174.00 496,425.00 3.580% October 28, 2024 36 mos October 7, 2027 1.978% Federal Agriculture Mortgage Corp 2,029,036.00 2,013,580.00 4.650% May 17, 2024 60 mos April 26, 2029 8.105% Total Agency Bonds 4,018,606.00 3,997,225.00 16.052%
Municipal Bonds
California State Taxable GO Unlimited 1,256,116.00 1,322,271.80 3.500% November 1, 2023 53 mos April 1, 2028 5.018% California State Taxable GO Unlimited 501,880.50 490,853.00 1.750% April 1, 2026 57 mos April 1, 2028 2.005% California State Taxable GO Unlimited 525,935.25 541,523.50 2.500% December 19, 2024 57 mos October 1, 2029 2.101% Total Municipal Bonds 2,283,931.75 2,354,648.30 9.124%
Treasury Obligations
U.S. Treasury Z 1,194,600.00 1,176,888.00 3.875% April 30, 2026 48 mos April 30, 2030 4.772% U.S. Treasury Note 1,484,520.00 1,443,570.00 3.500% March 16, 2026 52 mos November 30, 2030 5.930% Total Treasury Obligations 2,679,120.00 2,620,458.00 10.702% TOTAL INVESTMENTS $ 25,033,470.36 $ 25,024,143.91 100.000% Attachment 1
Item 9.d.
MEMORANDUM
TO: City Council
FROM: Matthew Downing, City Manager
BY: Megan Schotborgh, Director of Administrative Services SUBJECT: Approval of Fourth Amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Service, Inc.
DATE: October 13, 2026
RECOMMENDATION:
Adopt a Resolution approving and authorizing the City Manager to execute a fourth amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Services, Inc., for solid waste collection services.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is no direct General Fund expenditure associated with approval of the proposed Fourth Amendment. The City's solid waste franchise fee revenue is affected by the rates charged by South County Sanitary Services (SCSS) pursuant to the Franchise Agreement originally entered into on June 10, 2008. Future changes to solid waste rates may therefore result in corresponding changes to franchise fee revenue.
The November 12, 20241 staff report also noted that future implementation of the new methodology is expected to reduce the administrative effort associated with interim-year rate reviews.
BACKGROUND:
The City provides solid waste disposal services in accordance with Chapter 8.322 of the Arroyo Grande Municipal Code. South County Sanitary Service (SCSS), a subsidiary of Waste Connections, is the City’s franchisee that provides solid waste collection services to the community. The City has had a Franchise Agreement with SCSS for the collection, diversion, and disposal of solid waste in the City since 1997. The City and SCSS entered
1 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=12957 2https://library.municode.com/ca/arroyo_grande/codes/code_of_ordinances?nodeId=COOR_TIT8HESA_ CH8.32SOWADI
Item 9.d.
City Council
Approval of Fourth Amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Service, Inc.
October 13, 2026
into a Solid Waste Collection Franchise Agreement on June, 10, 2008, and the Franchise Agreement was subsequently amended twice in 2016. The City Council approved the third amendment to the agreement on April 12, 2022, in order to comply with the requirements of Senate Bill 1383 (SB 1383). SB 1383 was signed into law on September 19, 2016, requiring a reduction of organic waste disposal to landfills levels by 75% and increasing edible food recovery by 20%, by 2025. The current franchise agreement is available on the City’s website, linked here3.
Through the terms of the Franchise Agreement, SCSS is entitled to compensation for its “labor, equipment, materials and supplies, taxes, insurance, bonds, overhead, transfer and transport, processing, division, disposal, provide and all other things necessary to perform all of the services required by [the] Agreement.” This compensation is funded through the rates and charges paid by the City’s customers, which are presented to the City through via rate adjustment applications and approved by the City Council following a noticed public hearing pursuant to article XIII D, section 6 of the California Constitution (commonly known as “Proposition 218”).
Historical Rate Setting Methodology
Per the current Franchise Agreement, rates are reviewed in accordance with the “City of San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates,” which was originally established in 1994 (1994 Rate Manual). The 1994 Rate Manual allows for a cost-based rate adjustment every three years and interim index-based rate adjustments in the other two years. In interim rate periods, the operator is limited to index-based adjustments based on inflation, tipping fee adjustments, and franchise or regulatory fee changes. During cost-based rate adjustment years, SCSS can request adjustments due to actual and projected changes in other operational costs as set forth in the 1994 Rate Manual. The following table summarizes the SCSS rate review history beginning in 2005.
Table 1: SCSS Rate Review History
Year
Review
Type
Adjustment
%
2005 Cost-based 5.60%
2006 Index-based 3.09%
2007 Index-based 3.76%
2008 Cost-based 3%
2009 N/A 0.00%
2010 N/A 0.00%
3https://www.arroyogrande.org/DocumentCenter/View/11360/South-County-Sanitary-Service-FranchiseAgreement-PDF
Item 9.d.
City Council
Approval of Fourth Amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Service, Inc.
October 13, 2026
Year
Review
Type
Adjustment
%
2011 N/A 0.00%
2012 Index-based 5.15%
2013 Cost-based 3.20%
2014 Index-based 2.05%
2015 N/A 0.00%
2016 Cost-based 3.25%
2017 Index-based 1.00%
2018 Index-based 1.60%
2019 Cost-based 10.06%
2020 Index-based 1.70%
2021 Index-based 0.70%
2022 Cost-based 22.19%
2023 Index-based 9.10%
2024 Index-based 3.00%
2025 Cost-based 4.92%
2026 Index-based 5.13%
New Rate Setting Methodology
The City of San Luis Obispo contracted with R3 Consulting Group, Inc. (R3) to support development and negotiation of a new rate adjustment methodology. On November 12, 20244the City Council reviewed the new rate methodology produced by R3 (Attachment 3). The new methodology establishes a sound base rate, then generally moves rates each year using a capped solid-waste-specific CPI, reconciles actual versus projected revenues, and only reopens the full cost structure a maximum of every five years, when requested. The new methodology fulfills key objectives including rate stability, predictability, fairness, transparency, ease of administration, and cost-effectiveness.
Process of Updating the Rate Setting Manual
The City of San Luis Obispo worked with Waste Connections, SCSS’s parent company, and nine other agencies in San Luis Obispo County receiving solid waste services from Waste Connections to implement the new rate adjustment methodology to replace the historic methodology. All nine other agencies that participated in the process to update the rate adjustment methodology have approved consistent versions of amendments updating the methodology.
The Council directed staff to proceed with the Proposition 218 process for the proposed rate adjustments for 2025 through 2029. The November 12, 2024, staff report specifically contemplated that the new methodology would subsequently be presented to the City
4 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=12957
Item 9.d.
City Council
Approval of Fourth Amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Service, Inc.
October 13, 2026
Council as an amendment to the SCSS Franchise Agreement in connection with the January 14, 2025, public hearing.
On January 14, 2025,
5 the City Council held a public hearing and adopted Resolution No. 2025-0036, approving the applicable solid waste collection rates and the new rate adjustment methodology. The proposed amendment before the City Council now formalizes the methodology within the Franchise Agreement by replacing the Agreement's reliance on the 1994 Rate Manual with the new methodology.
The proposed amendment does not constitute a new rate increase. Rather, it establishes the contractual framework under which future rate adjustments will be calculated and considered, consistent with the methodology previously presented to and approved by the City Council on January 14, 2025.
ANALYSIS OF ISSUES:
Although the City Council approved the new rate adjustment methodology through the rate-setting process, the existing Franchise Agreement continues to reference the 1994 Rate Manual. The Fourth Amendment will officially replace the Agreement’s references to the 1994 Rate Manual with the City’s New Solid Waste Rate Adjustment Methodology in an effort to remove any confusion.
The proposed Fourth Amendment is necessary to align the contractual language of the Franchise Agreement with the rate adjustment methodology approved by the City Council.
Table 1: Rate Increase in 2027
Base 2027 CPI Adjustment 4.85%
2025 Revenue Reconciliation Credit (based on
Fourth Amendment calculation method) -3.13%
Revised 2027 Adjustment (required approval
of Fourth Amendment) 1.72%
Incorporating the new rate methodology will reduce the January 1, 2027 rate increase from 4.85% to 1.72% due to a credit from application of the annual revenue reconciliation mechanism included in the new methodology. This mechanism applies over- or undercollection of rate revenues from prior years (in this case, 2025) to future rate years (in this case, 2027) in order to balance revenues to fund operational costs, stabilize rates, and maintain fair and appropriate compensation to SCSS.
5 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=13390 6 http://weblink.arroyogrande.org/WebLink/DocView.aspx?id=354064&dbid=0&repo=ArroyoGrande
Item 9.d.
City Council
Approval of Fourth Amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Service, Inc.
October 13, 2026
In addition, the amendment includes an amendment to Section 5.6.3 Garbage, Recycling and Greenwaste Containers to ensure the franchise agreement reflects the most recent fees referenced in Exhibit A of Resolution No. 2025-003.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Staff’s recommendation;
2. Decline to approve the amendment. This would prevent the new rate methodology, including the annual revenue reconciliation mechanism, from being incorporated into the Franchise Agreement and would result in a higher 2027 rate adjustment for residents;
3. Provide staff with direction regarding modifications to the proposed amendment and return to the City Council at a later date for further consideration; or
4. Provide other direction to staff.
ADVANTAGES:
Approval of the amendment would update the City’s Franchise Agreement to reflect the new Solid Waste Rate Adjustment Methodology as part of the contractual rate calculation.
For 2027 rates, the new methodology produces a 4.85% CPI adjustment, which is partially offset by the application of the annual revenue reconciliation approach included in the new Rate Adjustment Methodology. The revenue reconciliation reduces the January 1, 2027, rate adjustment from 4.85% to 1.72%. For City residents, this results in a lower increase to their monthly trash collection fee in 2027 than would occur if the revenue reconciliation were not applied.
DISADVANTAGES:
If the amendment is not approved, the new Solid Waste Rate Adjustment Methodology, including the annual revenue reconciliation mechanism, would not be incorporated into the Franchise Agreement. Solid waste rates would be adjusted January 1, 2027, by the
4.85% CPI adjustment rather than by the lower 1.72% that could be implemented via approval of the amendment.
ENVIRONMENTAL REVIEW:
Adopting the Resolution Approving the Fourth Amendment to the City’s Solid Waste Collection Franchise Agreement with SCSS to incorporate the City’s New Solid Waste Rate Adjustment Methodology is not a project subject to the California Environmental Quality Act (“CEQA”) because the action 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.).
Item 9.d.
City Council
Approval of Fourth Amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Service, Inc.
October 13, 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. Solid Waste Rate Adjustment Methodology Prepared by R3 Consulting Group, Inc.
ATTACHMENT 1
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE, CALIFORNIA APPROVING AND AUTHORIZING THE CITY
MANAGER TO EXECUTE, A FOURTH AMENDMENT TO THE
AMENDED AND RESTATED SOLID WASTE COLLECTION FRANCHISE
AGREEMENT WITH SOUTH COUNTY SANITARY SERVICES, INC., FOR
SOLID WASTE COLLECTION SERVICES
WHEREAS, the City of Arroyo Grande has a franchise agreement with South County Sanitary Services, Inc. (SCCS) for solid waste collection services; and WHEREAS, the agreement provides, among other things, that SCSS will provide solid waste, recyclable materials, and green waste collection and disposal services for the City; and
WHEREAS, this agreement has been periodically amended and restated, and further amendment is now warranted to reflect an updated rate adjustment methodology to replace the outdated “City of San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Dolid Wate Management Rates” which was originally established in 1994 (1994 Rate Manual); and
WHEREAS, the new rate adjustment methodology is designed to enhance rate stability, predictability, fairness, transparency, ease of administration, and cost-effectiveness; and WHEREAS, an update is now warranted to adjust expectations regarding solid waste collection containers consistent with the rate schedule.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande does hereby approve, and authorize the City Manager to execute, the Fourth Amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Service, attached as Exhibit 1 to this Resolution and incorporated herein.
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 th day of , 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 1
FOURTH AMENDMENT TO
AMENDED AND RESTATED SOLID WASTE COLLECTION FRANCHISE AGREEMENT
FOR SOLID WASTE, RECYCLABLE MATERIALS, AND ORGANIC MATERIALS This FOURTH AMENDMENT to the Amended and Restated Solid Waste Collection Franchise Agreement (the “Forth Amendment”) is made and entered into this __ day of ___________, 2026, by and between the City of Arroyo Grande (the “City”), a political subdivision of the State of California, and South County Sanitary Service, Inc. (“Contractor”), a California corporation. The City and Contractor are collectively referred to herein as the “Parties” and each individually as a “Party.” Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to them in the Agreement (as defined below).
RECITALS
WHEREAS, the City and Contractor are Parties to that certain Amended and Restated Solid Waste Collection Franchise Agreement, dated June 10, 2008, as modified by written amendments on March 22, 2016, July 26, 2016 and March 11, 2022, (together, the “Agreement”); WHEREAS, the Agreement originally provided for a rate setting methodology according to the City of San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates dated June 1994 (the “1994 Rate Manual”);
WHEREAS, the City of San Luis Obispo contracted with R3 Consulting Group, Inc. to support development and negotiation of a new rate adjustment methodology; WHEREAS, the new rate adjustment methodology, entitled “Annual Rate Adjustment Methodology,” is available for consideration and use by other public agencies in San Luis Obispo County; WHEREAS, the Parties have, in good faith, negotiated changes to the Agreement necessary to support the transition to a new rate setting methodology using the Annual Rate Adjustment Methodology, attached hereto as Appendix 1, and mutually desire to incorporate the Annual Rate Adjustment Methodology in place of the 1994 Rate Manual;
WHEREAS, on January 14, 2025, the City Council held a public hearing and adopted Resolution No. 2025- 003, imposing increases to certain solid waste collection service rates in accordance with Proposition 218 and Article XIII D of the California Constitution; and
WHEREAS, the City Council desires to amend the Agreement to ensure consistency with these actions.
AGREEMENT
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HEREBY AGREE TO AMEND THE AGREEMENT AS FOLLOWS:
1. Amendment to Article 1. Article 1 of the Agreement is hereby amended to add the following definition:
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PAGE 4
“Manual” means Appendix 1, “Annual Rate Adjustment Methodology,” attached hereto and incorporated herein by reference, as supplemented by the “New Solid Waste Rate Adjustment Methodology and 2025 Rates,” commissioned by the City of San Luis Obispo and prepared by R3 Consulting Group, Inc., dated November 1, 2024, incorporated herein by reference, provided that in the event of a conflict between the two documents, the “Annual Rate Adjustment Methodology” attached as Appendix 1 shall prevail. Any direct or indirect references to the “City of San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates dated June 1994” in the Agreement shall be replaced with “Manual.”
2. Amendment to Section 4.5.1. Section 4.5.1 of the Agreement is hereby deleted in its entirety and replaced with the following:
4.5.1 General. City may request Contractor to perform additional services (including new diversion programs, etc.) or modify the manner in which it performs existing services. Pilot programs and innovative services that may entail new Collection methods, different kinds of services and/or new requirements for Waste Generators are included among the kinds of changes that City may request. Contractor shall present, within thirty (30) days of a request to do so by City, a proposal to provide additional or expanded diversion services pursuant to the terms of Article 4.5.2 (New Diversion Programs). Contractor shall be entitled to an adjustment in its compensation for providing such additional or modified services in accordance with the Manual’s procedures for extraordinary adjustments for “Change in Scope” (as that term is defined in the Manual).
3. Amendment to Section 5.6.3. Section 5.6.3 of the Agreement is hereby deleted in its entirety and replaced with the following:
5.6.3 Garbage, Recycling and Organics Containers. Contractor shall supply each Single Family Dwelling Unit with a 32, 64 or 96-gallon Container for Garbage. The monthly service fee for each size Container is set forth in Exhibit A, as adjusted from time to time in accordance with the Manual adopted by City Council resolution. In addition, each Single-Family Dwelling Unit will receive from Contractor a 64 or 96-gallon Container for all commingled Recyclable Materials- and a 64. or 96-gallon Container for Organic Materials. If requested by Customer, Contractor shall provide to the Customer a 64, or 96 gallon Recyclable Container and a 96 gallon Organic Materials Container. The Contractor shall provide kitchen pails designed to contain Food Scraps prior to placement in the Customer' s Organic Materials Cart. Contractor will be responsible for distribution of kitchen pails to Single- Family and Multi-Family Customers upon request, from Contractor' s office beginning the Effective Date. City or its designee may restock Contractor inventories at local offices for distribution to new residents or residents who need a replacement.
Contractor shall supply each Multi- Family complex and Commercial or governmental agency with appropriately sized Containers for Discarded Materials. Contractor agrees to provide additional Containers, as requested, by all Persons at the rate as shown on Exhibit A. Note that all MultiFamily complex and Commercial or governmental agency Customers shall be entitled to the free Collection of an unlimited quantity of Recyclable Material picked up twice per week. Contractor agrees not to limit the specific type of Recyclable Material ( such as cardboard only) that can be placed in a Container unless approved by the City on a Customer by Customer basis.
All Solid Waste Cart lids shall be black/ grey, all Recyclable Materials Cart lids shall be blue, and all Organic Materials Cart lids shall be green. All Solid Waste Bin, Compactor, and franchise RollOff lids or bodies shall be black/ grey, all Recyclable Materials Bin, Compactor, and franchise RollPage 39 of 221 RESOLUTION NO.
PAGE 5
Off lids or bodies shall be blue, and all Organic Materials Bin, Compactor, and franchise Roll-Off lids or bodies shall be green. No later than December 31, 2035, Contractor shall provide all Customers with Collection Containers that comply with the Container color requirements specified in this Section or as otherwise specified in 14 CCR Section 18982; 14 CCR, Division 7, Chapter 12, Article 3; or other Applicable Law.
If an existing Container breaks or is otherwise rendered non-functional on or after January 1, 2022, the Contractor shall replace the non-functional Container with a Container that complies with the color requirements of this Section. Notwithstanding this Section, the Contractor is not required to replace functional Containers, including Containers purchased prior to January 1, 2022, that do not comply with the color requirements of this Section prior to the end of the useful life of those Containers, or prior to January 1, 2036, whichever comes first.
Any new Containers for Recyclable Materials shall include an in molded graphic or sticker which provides instructions to the Waste Generator. The final color and signage, including the in molded graphic or sticker on the Containers shall be approved by the City Manager or their designee.
City and Contractor acknowledge that from time to time, Containers become damaged or destroyed.
City and Contractor also acknowledge that from time to time Containers may be stolen from the curb or damaged due to normal use. The fee schedule to replace lost or damaged Containers is shown on Exhibit A.
All Contractor-supplied Containers for Discarded Materials shall remain the property of Contractor.
Containers damaged due to lack of reasonable care by the Customer, or Containers damaged by graffiti may be replaced by Contractor, the fee for which shall be the same as for lost or damaged Containers as set forth on Exhibit A. Contractor may recover Containers used by Customers for other than their intended purpose.
4. Amendment to Article 8. Article 8 of the Agreement is hereby deleted in its entirety and replaced with the following:
8.1 General
Contractor’s compensation provided for in this Article shall be the full, entire and complete compensation due to Contractor pursuant to this Agreement for all labor, equipment, materials and supplies, taxes, insurance, bonds, overhead, transfer and transport, processing, division, disposal, profit and all other things necessary to perform all the services required by this Agreement in the manner and at the times prescribed. Contractor will not be entitled to any further rate adjustments as a result of customer delinquencies and other bad debt issues.
Contractor does not look to the City for payment of any sums under this Agreement in consideration of the right to charge and collect from customers for services rendered at rates fixed by the City from time-to-time. The City shall have the right to structure those rates as it deems appropriate so long as the revenues forecasted to be received by Contractor from charging such rates can reasonably be expected to generate sufficient revenues to provide for Contractor's compensation as calculated in accordance with the Manual.
8.2. Collection Rates
RESOLUTION NO.
PAGE 6
Service rates caps are those established by resolution adopted by the City Council.
Contractor shall provide the services required by this Agreement and charge no more than the rates authorized by City Resolution.
8.3 Rate Review and Allowable Profit
Ordinary and extraordinary rate reviews shall be submitted and considered in accordance with the procedures described in the Manual, except as that may be modified by the City from time to time. In addition to the procedures contained in the Manual, Contractor shall submit any and all data requested by and in the format prescribed by the City. In the event Contractor shall fail to meet the schedule set forth in Manual, a revision of rates for the following year shall not be authorized until the 1st day of the first calendar month following a one hundred twenty day (120) day period from the date that the complete application is submitted and such revision shall contain no consideration for Contractor's failure to submit the application in accordance with the schedule set forth in the Manual.
If at any time during the term of this Contract, the Contractor requests and is granted a rate increase by the City that when the new rate is compared to the rate at the effective date of this Contract exceeds the cumulative cost of living increase from the effective date of the Contract, the City shall have the option of terminating the Agreement. The cumulative cost of living increase from the effective date of the Contract shall be calculated in accordance with the Manual. Such option shall be available for a period of nine (9) months following the granting of the rate increase.
8.4 Publication of Rates
Contractor shall provide written notice to subscribers of all rate changes, prior to implementation. If appropriate, this notice should include reasons and background for the rate change.
5. Amendment to Section 9.6. The first paragraph of Section 9.6 is hereby revised and amended as follows:
Contractor shall submit to the City annual audited financial statements prepared at Contractor's expense by an independent Certified Public Accountant not later than one hundred eighty (180) days following the expiration of the Contractor’s fiscal year. Pursuant to the Manual, at the time a rate application request is submitted to City, the financial forms contained in the rate application must be reconciled to the audited financial statements to provide assurance that all of the Contractor's activities are accounted for.
6. Amendment to Exhibit A. Exhibit A is hereby deleted in its entirety and replaced with the Exhibit A attached to this Fourth Amendment and incorporated herein by this reference.
7. Reaffirmation and Entire Agreement. The Parties hereby reaffirm their agreement with all the terms and provisions of the Agreement as amended by this Fourth Amendment. The Agreement and this Fourth Amendment represent the entire agreement among the Parties with respect to the matters that are the subject hereof. All the terms and provisions of the Agreement not amended hereby, either expressly or by necessary implication, shall remain in full force and effect.
8. Conflicting Provisions and Severability. In the event of any conflict between the terms of the Agreement and this Fourth Amendment, the terms of this Fourth Amendment shall prevail, and the
RESOLUTION NO.
PAGE 7
terms of Appendix 1 shall prevail in the event of a conflict relating to rate setting procedures among or between any of the foregoing documents. The provisions of this Fourth Amendment shall be deemed severable. If any provision of this Fourth Amendment is invalid or unenforceable, such provision shall be of no force or enforceability and the Fourth Amendment shall otherwise continue in full force and effect.
9. Counterparts. This Fourth Amendment may be executed in one or more facsimile or original counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same instrument.
10. Authorization. Each Party executing this Fourth Amendment represents and warrants that it is duly authorized to cause this Fourth Amendment to be executed and delivered. [Signatures on Next Page]
IN WITNESS WHEREOF, the City and Contractor have executed this Fourth Amendment on the day and year first hereinabove set forth.
CITY OF ARROYO GRANDE
By: ____________________
Name: ____________________
Title: ____________________
SOUTH COUNTY SANITARY
SERVICE, INC.
By: ____________________
Name: ____________________
Title: ____________________
Attest:
By: ____________________
Name: ____________________
Title: ____________________
Approved as to Form:
By: ____________________
Name: ____________________
Title: ____________________
RESOLUTION NO.
PAGE 8
Exhibit A
Service Fees Effective January 14, 2025
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Appendix 1
Annual Rate Adjustment Methodology
Section 1 Objectives
This Exhibit details the process by which Maximum Service Rates are adjusted annually to provide fair and adequate compensation to Franchisee for collection of solid waste and other services provided to Customers and the City per the Agreement. The annual rate adjustment methodology described herein fulfills key objectives established by the City and Franchisee, including rate stability, predictability, fairness, transparency, ease of administration, and cost-effectiveness.
Section 2 Index-Based Rate Adjustments
Except in the case of a Cost-Based Rate Adjustment (see Section 3, below) Franchisee’s Maximum Service Rates shall be adjusted via the Index-Based Rate Adjustment methodology described in this section. The Index-Based Rate Adjustment methodology shall be used to adjust Maximum Service Rates effective each January 1 of 2026, 2027, 2028, and 2029 and any subsequent year during which a CostBased Rate Adjustment is not allowed or not requested by the City or the Franchisee.
In years during which Maximum Services Rates are to be adjusted pursuant to this Index-Based Rate Adjustment methodology, Franchisee shall submit a report to the City on or before September 1 of the calendar year preceding the effective date of the new rates, detailing its calculations of Index-Based Rate Adjustment. City shall have the right to review Franchisee’s calculations of Index-Based Rate Adjustment for mathematical accuracy and adherence to the terms and conditions of this Exhibit. City shall prepare written findings regarding adjustments to the Franchisee’s calculations of Index-Based Rate Adjustment that are required for mathematical accuracy and adherence to the terms and conditions of this Exhibit on or before October 30 of the same year.
Index-Based Rate Adjustments shall be prepared and calculated in accordance with the steps described below. All Index-Based percentages shall be rounded to the nearest hundredth of a percent, and all cost calculations shall be rounded to the nearest dollar.
A. Calculation of CPI Adjustment to Franchisee’s Collection Services and Post-Collection Services
Franchisee’s prior year cost projections for Collection Services and Post-Collection Services shall be adjusted in accordance with the Consumer Price Index (CPI) for Garbage and Trash Collection, U.S. City average, Bureau of Labor Statistics Series I.D. CUUR0000SEHG02.
The CPI Adjustment shall be equal to the percentage change in the average 12-month CPI value ending June of the current year and compared to the average 12-month CPI value ending June of the prior year.
For example, the CPI used to set the 2026 rates shall be calculated as follows:
(Average CPI from July 1, 2024 to June 30, 2025) − (Average CPI from July 1, 2023 to June 30, 2024) Average CPI from July 1, 2023 to June 30, 2024
If the percentage change is below 2%, the applicable CPI Adjustment shall be 2%, with the difference in the amount below 2% being carried forward as a credit on the rates and applied to the subsequent year. If the percentage change is above 5%, the applicable CPI Adjustment shall be 5%, with the difference in the amount above 5% being carried forward and applied to the rates in subsequent years. Franchisee’s prior year cost projections for Collection Services and PostPage 49 of 221 RESOLUTION NO.
PAGE 15
Collection Services shall be escalated by the resultant CPI Adjustment, rounded to the nearest dollar.
Franchisee’s 2025 cost projection for Collection Services is $2,640,547 and Franchisee’s 2025 cost projection for Post-Collection Services is $1,485,678. For 2026, by way of example, if the percentage change in the average 12-month CPI value ending June 2026 compared to the average 12-month CPI value ending June of 2025 is 5%, then Franchisee’s 2026 cost projection for Collection Services shall be $2,772,575 and Franchisee’s 2026 cost projection for Post-Collection Services shall be $1,559,962. Likewise, if the percentage change in the average 12-month CPI value ending June 2026 compared to the average 12-month CPI value ending June of 2025 is 2%, then Franchisee’s 2026 cost projection for Collection Services shall be $2,693,358 and Franchisee’s 2026 cost projection for Post-Collection Services shall be $1,515,392.
Example Calculation for application of amounts above cap on CPI increases applied to Collection Services component of CPI Adjustment (noting that cap on CPI increases also applies to PostCollection Services):
Year 1
Collection Services: $2,640,547
12-month average CPI index increase: 6.00%
$2,640,547 x (1+5.00%*) = $2,772,575
*5% cap on CPI increases. 1% difference carried over to next year Year 2
Collection Services: $2,772,575
12-month average CPI index increase: 6.00%
$2,772,575 x (1+5.0%*) = $2,911,203
*5% cap on CPI increases. 1% difference carried over to next year Year 3
Collection Services: $2,911,203
12-month average CPI index increase: 3.00%
$2,911,203 x (1+5.0%*) = $3,056,763
*3.00% + 1.00% carried forward from Year 1 + 1.00% carried forward from Year 2 The above is also demonstrated in Table 1, on the following page.
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Table 1 – Example of CPI Cap and Carryforward
2025 2026 2027 2028
Collection Services $2,640,547 $2,772,575 $2,911,203 $3,056,763 12-Month Average CPI 6.00% 6.00% 3.00%
CPI Adjustment (5% Cap) 5.00% 5.00% 5.00%
B. Calculation of Profit Allowance
The Index-Based Rate Adjustment methodology includes a component for Franchisee’s fair and reasonable Profit Allowance. Profit Allowance is used for the purposes of calculating IndexBased Rate Adjustments and does not constitute a guarantee of profit to the Franchisee.
Franchisee’s Profit Allowance for the purposes of Index-Based Rate Adjustments is calculated as a function of Franchisee’s current year cost projection for Collection Services. For 2025, Franchisee’s Profit Allowance is 9% of the cost projection for Collection Services and in 2026 and thereafter, Franchisee’s Profit Allowance shall be 10% of the cost projection for Collection Services.
Franchisee’s 2025 cost projection for Collection Services is $2,640,547; therefore, Franchisee’s Profit Allowance for 2025 is $2,640,547 times 9%, rounded to the nearest dollar, equaling $237,649. Using the first example from Section 2.A above, if Franchisee’s 2026 cost projection is $2,772,575 (corresponding to a 5% CPI Adjustment), Franchisee’s 2026 Profit Allowance for the purposes of calculating Index-Based Rate Adjustment shall be $277,257. Likewise, and using the second example from Section 2.A above, if Franchisee’s 2026 cost projection is $2,693,358 (corresponding to a 2% CPI Adjustment), Franchisee’s 2026 Profit Allowance for the purposes of calculating Index-Based Rate Adjustment shall be $269,336.
C. Calculation of Franchise Fee
Franchisee pays the City a Franchise Fee of 10% of Franchisee’s gross revenues received from Customers in the City. For the purposes of Index-Based Rate Adjustments, the Franchise Fee is calculated as 10% of Franchisee’s annual Total Cost Projection, per Section 2.E below, rounded to the nearest dollar. For 2025, Franchisee’s annual Total Cost Projection is $4,848,749, yielding Franchise Fee component of $484,875. Actual Franchise Fee payments made by Franchisee to City shall be calculated as a function of Franchisee’s gross revenues received from Customers in the City and may differ from the amount used in calculating adjustments to the Maximum Service Rates.
D. Calculation of Annual Revenue Reconciliation
Starting with the 2027 Index-Based Rate Adjustment, the difference between the Franchisee’s annual Total Cost Projection and the Franchisee’s actual annual total billings to Customers in the City shall be included in the annual Index-Based Rate Adjustment as an Annual Revenue Reconciliation.
For example, for the 2027 Index-Based Rate Adjustment, the difference between Franchisee’s 2025 Total Cost Projection and Franchisee’s total 2025 billings to Customers in the City shall be included in the 2027 annual Total Cost Projection. By way of example, if Franchisee’s 2025 total billings to Customers in the City is a shortfall of 1% (-$48,487) then $48,487 will be added to Franchisee’s Total Cost Projection for 2027. Conversely, if Franchisee’s 2025 total billings to
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Customers in the City is a surplus of 1% (+$48,487) then $48,487 will be subtracted from Franchisee’s Total Cost Projection for 2027.
Table 2, on the following page, provides an example of the case in which there is a 1% shortfall of billed revenues in 2025, which is added to the Total Cost Projection in 2027. The table shows a continuation of 1% shortfalls being added in 2028 and 2029 for example purposes only, and assumes the CPI adjustment to Collection Services, Post-Collection Services, and AB 939 Fee at the 5% cap. Table 2a on the following page, provides an example of the case in which there is a 1% surplus of billed revenues in 2025, which is added to the Total Cost Projection in 2027. The table shows a continuation of 1% surpluses being added in 2028 and 2029 for example purposes only, and assumes the CPI adjustment to Collection Services, Post-Collection Services, and AB 939 Fee at the 5% cap.
Table 2 – Example Revenue Reconciliation of -1% Annually 2025 2026 2027 2028 2029
Collection Services $2,640,547 $2,772,575 $2,911,203 $3,056,763 $3,209,602 Profit Allowance $237,649
$277,257
$291,120
$305,676
$320,960
Post-Collection Services
$1,485,678
$1,559,962
$1,637,960 $1,719,858 $1,805,851
Franchise Fee $484,875
$512,199
$543,197
$570,391
$598,970
Revenue Reconciliation Example N/A N/A $48,487 $51,220 $54,320 Total Cost Projection $4,848,749 $5,121,993 $5,431,968 $5,703,909 $5,989,703 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
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Table 2a – Example Revenue Reconciliation of +1% Annually 2025 2026 2027 2028 2029
Collection Services $2,640,547 $2,772,575 $2,911,203 $3,056,763 $3,209,602 Profit Allowance $237,649
$277,257 $291,120 $305,676 $320,960
Post-Collection Services
$1,485,678 $1,559,962 $1,637,960 $1,719,858 $1,805,851
Franchise Fee $484,875
$512,199 $532,422 $559,009 $587,019
Revenue Reconciliation
Example N/A N/A $(48,487) $(51,220) $(53,242)
Total Cost Projection $4,848,749 $5,121,993 $5,324,218 $5,590,087 $5,870,190 Indexed Rate Adjustment 5.64% 3.95% 4.99% 5.01%
Significant, unexpected increases or decreases in revenue may be included or excluded from the Annual Revenue Reconciliation if deemed reasonable by the parties. As a one-time exercise, the Franchisee may request to review the entirety of its revenue earnings with the City as a check-in to evaluate alignment with its revenue forecast and conditions outlined in this exhibit. By no later than September 30, 2025, the Franchisee shall provide the City with documentation of actual todate receipts or billings, accompanied by an analysis of all corresponding service trends. Upon receipt of these materials, the City and the Franchisee shall engage in a good-faith meet-andconfer process to discuss and determine an appropriate resolution, which may include a rate adjustment in January 2026 if necessary.
E. Calculation of Total Cost Projection
Franchisee’s annual Total Cost Projection shall be the sum of the resultant values from Section
2.A through 2.D above. For 2025, the Total Cost Projection is $4,848,749. Table 3 below demonstrates the 2026 Total Cost Projection if the percentage change in the average 12-month CPI value ending June 2026 compared to the average 12-month CPI value ending June of 2025 is 5%. Table 4, on the following page, demonstrates the 2026 Total Cost Projection in the percentage change in the average 12-month CPI value ending June 2026 compared to the average 12-month CPI value ending June of 2025 is 2%.
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Table 3 – 2026 Total Cost Projection at 5% CPI Value for 2026 2025 2026
Collection Services $2,640,547 $2,772,575
Profit Allowance $237,649 $277,257
Post-Collection Services $1,485,678 $1,559,962
Franchise Fee $484,875 $512,199
Total Cost Projection $4,848,749 $5,121,993
Table 4 – 2026 Total Cost Projection at 2% CPI Value for 2026 2025 2026
Collection Services $2,640,547 $2,693,358
Profit Allowance $237,649 $269,336
Post-Collection Services $1,485,678 $1,515,392
Franchise Fee $484,875 $497,565
Total Cost Projection $4,848,749 $4,975,651
F. Calculation of Annual Index-Based Rate Adjustments
The Index-Based Rate Adjustment shall be calculated as function of the Franchisee’s forthcoming annual Total Cost Projection divided by the then current year Total Cost Projection, minus 100%, rounded to the nearest hundredth of a percent.
For example, taking the results shown in Table 3, on the prior page, the Index-Based Rate Adjustment for 2026 would be $5,121,993, divided by $4,848,749, minus 100%, yielding a
5.64% adjustment to the Maximum Service Rates effective January 1, 2026. Using the results of Table 4, above as an example, the Index-Based Rate Adjustment for 2026 would be $4,975,651, divided by $4,848,749, minus 100%, yielding a 2.62% adjustment to the Maximum Service Rates effective January 1, 2026.
This Index-Based Rate Adjustment calculation described herein shall repeat in 2027, 2028, and 2029, with the addition of the Annual Revenue Reconciliation amounts calculated pursuant to Section 2.D of this Exhibit. Rate adjustments shall be effective on January 1st of each year (unless otherwise agreed to in writing by the parties) and any delay in rate change approval not caused by Franchisee will result in additional adjustments so that all required revenues are billed within the rate year. Any delay in rate change approval that is caused by Franchisee shall not result in additional adjustments corresponding with the delay in approval.
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Section 3 Cost-Based Rate Adjustments
Franchisee or City shall have the right to request a Cost-Based Rate Adjustment effective January 1, 2030.
Franchisee’s request for Cost-Based Rate Adjustment in 2030 shall be requested in writing on or before January 15, 2029 and City’s request for Cost-Based Rate Adjustment in 2030 shall be requested in writing on or before January 31, 2029. To the extent possible any City request for Cost-Based Rate Adjustment shall be coordinated with the other agencies in San Luis Obispo County that follow the rate adjustment methodology described in this Exhibit, with all such agencies opting to request Cost-Based Rate Adjustment effective in the same rate year
Upon request by either party for Cost-Based Rate Adjustment, Franchisee shall prepare and submit financial records and calculations to the City in accordance with this Section by April 30, 2029. City shall have the right to review Franchisee’s financial records related to the Cost-Based Rate Adjustment and calculations of Cost-Based Rate Adjustment for mathematical accuracy and adherence to the terms and conditions of this Section. City shall prepare written findings regarding adjustments to the Franchisee’s calculations of Cost-Based Rate Adjustment that are required for mathematical accuracy and adherence to the terms and conditions of this Exhibit on or before June 30, 2029. City shall make every effort to seek City Council authorization of Cost-Based Rate Adjustment prior to August 30, 2029. If neither party requests a Cost-Based Rate Adjustment in writing as specified above, then an Index-Based Rate Adjustment shall be applied for adjustments to Maximum Service Rates effective January 1, 2030 and subject to the terms and conditions of Section 2 of this Exhibit.
Franchise or City shall have the right to request subsequent Cost-Based Rate Adjustments no more frequently than every five (5) years following the prior Cost-Based Rate Adjustment. For example, if a Cost-Based Rate Adjustment is requested as stipulated in above in January, 2029 (and effective January 1, 2030) then the next Cost-Based Rate Adjustment may not be requested by either party until January, 2034 (for effectiveness in 2035). The schedule from the following paragraph would also apply: Franchisee would prepare and submit financial records and calculations by April 30, 2034, City would prepare written findings regarding adjustments to Franchisee’s calculations of Cost-Based Rate Adjustment that are required for mathematical accuracy and adherence to the terms and conditions of this Exhibit by June 30, 2034, and City would make every effort to seek City Council authorization of Cost-Based Rate Adjustment prior to August 30, 2034.
Notwithstanding the above, nothing shall prevent the parties from mutually agreeing to conduct CostBased Rate Adjustments in other years (i.e., years other than 2030 and 2035), provided that both parties agree in writing to waive the five (5) year limitation on Cost-Based Rate Adjustments expressed herein.
If neither party requests Cost-Based Rate Adjustments in subsequent years pursuant to the five (5) year schedule described above, then Index-Based Rate Adjustments shall be applied for adjustments to Maximum Service Rates in such years, subject to the terms and conditions of Section 2 of this Exhibit.
Franchisee shall provide all financial information and supporting documentation required by this review in a format acceptable to City (or City’s designated consultant) in a timely manner. Franchisee shall not require City (or City’s designated consultant) to review any such documents at Franchisee’s worksite but shall instead allow for all required information and supporting documentation to be provided to City (or its designated consultant) via physical mail,e-mail, or any other delivery method approved by City.
Cost-Based Rate Adjustments shall be prepared and calculated in accordance with the steps described below.
A. Projection of Collection Services and Post-Collection Service Costs Franchisee shall prepare financial records and calculations of Cost-Based Rate Adjustment using audited financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) for Franchisee’s immediately preceding three (3) fiscal years. Such financial records and calculations shall include Franchisee’s projected costs for Collection Services and
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Post-Collection Services as well as Franchisee’s projected gross revenues at then-current Maximum Service Rates for the forthcoming year (e.g., 2030 at the earliest).
Franchisee shall promptly assemble, provide, and submit such information that is reasonably necessary to support the assumptions made by the Franchisee with regard to the assumptions underlying the forecast. Upon submission of such information, the City holds the ability to make appropriate changes for non-allowable costs, large unsupported variances in cost projections including but limited to corporate transactions and allocations, large variances in inter-company and related party transactions and allocations, unjustifiable variances in any cost category, nonconformance with agreed upon depreciation terms, non-conformance agreed upon profit allowances, and other customary and reasonable adjustments as detailed in the Agreement. Cost projections for Collection Services and Post-Collection Services prepared by Franchisee must be justifiable, supportable with financial information, and provide accountability for all expenditures.
In preparing such cost projections, Franchisee shall assemble and submit its forecasts of:
a. Revenues at current Maximum Service Rates for the then-current year, including delineation of revenues by sector (single-family residential vs. commercial and multifamily) and with details of the number of subscribers by type within each sector. b. Projected costs of Collection Services for the then-current year and the forthcoming year, with comparison to and explanation of any variances to actual costs for Collection Services in the prior three (3) fiscal years. Costs for Collection Services include labor, corporate overhead, depreciation (with rolling stock at 10-year depreciation lifespan), and general and administrative costs and shall be delineated as per the primary cost categories included in Franchisee’s Audited Financial Statements. Franchisee must provide documentation of, and explanation for, material variances in any cost category. Projected costs for the forthcoming year shall be based on Franchisee’s actual costs per Audited Financial Statements and escalated by the CPI Adjustment described in Section 2.A of this Exhibit, with the exception that Franchisee may adjust projections to account for other documentable changes in costs. Corporate overhead costs shall be limited to be less than 4% of Franchisee’s Total Cost Projection for the forthcoming year and Franchisee must provide documentation and justification for any amounts of Corporate Overhead above 3% of Franchisee’s Total Cost Projection for the forthcoming year. City retains the right to make appropriate adjustments to cost projections to cost categories for which Franchisee does not or cannot provide adequate documentation and explanation of material variances compared to prior years.
c. Projected costs of Post-Collection Services for the then-current year and the forthcoming year, with comparison to and explanation of any variances to actual costs for Collection Services in the prior three (3) fiscal years. Costs for Post-Collection Services include landfill disposal, organics processing, recyclables processing and marketing, related-party transportation, and related-party rent and shall be delineated as per the primary cost categories included in Franchisee’s Audited Financial Statements. Franchisee must provide documentation of, and explanation for, material variances in any cost category. Projected costs for the forthcoming year shall be based on Franchisee’s actual costs per Audited Financial Statements and escalated by the CPI Adjustment described in Section 2.A of this Exhibit, with the exception that Franchisee may adjust projections to account for other documentable changes in costs. City retains the right to make appropriate adjustments to cost projections to cost categories for which Franchisee does not or cannot provide adequate documentation and explanation of material variances compared to prior years.
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d. Franchisee shall not include any non-allowable costs in its cost projections for Collection Services or Post-Collection Services. Non-allowable costs include but are not limited to:
i. Entertainment and non-work related travel expenses, unless authorized in advance by City.
ii. Advertising for services not within the scope of this Agreement or outside of the service area of the City of Arroyo Grande.
iii. Fines or penalties of any nature.
iv. Liquidated damages assessed under this Agreement.
v. Federal or State income taxes.
vi. Profit sharing payments not related to an IRS approved pension program. vii. Charitable or political donations.
viii. Attorneys’ fees and other expenses incurred by Franchisee in any court proceeding in which City and Franchisee are adverse parties, unless Franchisee is the prevailing party in said proceedings. ix. Attorneys’ fees and other expenses incurred by Franchisee in any court proceeding in which Franchisee’s own negligence, violation of law or regulation, or other wrongdoing, is in issue and occasions part of the attorneys’ fees and expenses claimed, provided, however, such attorneys’ fees will be allowed to the extent Franchisee can demonstrate they were reasonable and necessary and a cost of doing business, and were not the result of any intentional or willful misconduct by Franchisee or its employees; and attorneys’ fees and expenses incurred by Franchisee in a court proceeding in which the legal theory or statute providing a basis of liability against Franchisee also provides for separate strict liability for City arising from the action of its citizens or ratepayers (such as in a CERCLA lawsuit). x. Payments to related party entities for products or services (other than lease expense, calculated as provided below), in excess of the fair market value for those products or services. For purposes of this Agreement, related party expenses are those resulting from transactions between Franchisee and another company (companies) that has (have) common ownership or management control.
e. Franchisee’s audited financial statements, and any other documentation as deemed necessary by the City, will be reviewed to determine Franchisee’s cost projections for each of the foregoing categories during the year involved. City will use the financial statements to determine that costs have actually been incurred and have been assigned to the appropriate category.
f. City may adjust the actual costs in two ways: (1) to exclude any non-allowable costs, set out below, and (2) to exclude and/or reduce any costs that were actually incurred but which are not reasonable and necessary in keeping with industry standard best practices.
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B. Calculation of Profit Allowance
Franchisee’s Profit Allowance shall be 10% of the cost projection for Collection Services, rounded to the nearest dollar.
C. Calculation of Franchise Fee
Calculation of Franchise Fee shall be calculated in accordance with Section 2.C, above, for the applicable year as appropriate.
D. Calculation of Annual Revenue Reconciliation
Calculation of Annual Revenue Reconciliation shall be calculated in accordance with Section
2.D, above, for the applicable year as appropriate.
E. Calculation of Total Cost Projection
Calculation of Total Cost Projection shall be calculated in accordance with Section 2.E, above, for the applicable year as appropriate.
F. Calculation of Cost-Based Rate Adjustment
The Cost-Based Rate Adjustment shall be the calculated as function of the Franchisee’s forthcoming annual Total Cost Projection divided by the then current year Total Cost Projection, minus 100%, rounded to the nearest hundredth of a percent. This is the same calculation described in Section 2.F, above. The resultant percentage shall be applied to the then-current Maximum Service Rates and be effective January 1 of the forthcoming year.
Rate adjustments shall be effective on January 1st of each year (unless otherwise agreed to in writing by the parties) and any delay in rate change approval not caused by Franchisee will result in additional adjustments so that all required revenues are billed within the rate year. Any delay in rate change approval that is caused by Franchisee shall not result in additional adjustments corresponding with the delay in approval.
Section 4 Annual Audited Financial Statements
Franchisee shall annually prepare Audited Financial Statements in accordance with Generally Accepted Accounting Principles (GAAP) for its operations in the San Luis Obispo County region. Franchisee shall provide City with copies of the annual Audited Financial Statements upon request and with any CostBased Rate Adjustment submittal.
Section 5 Extraordinary Adjustments
Except as provided herein, Franchisee may not request adjustments to Maximum Service Rates in years during which Index-Based Rate Adjustments are scheduled to be applied and must follow the timeline described in Section 3. Notwithstanding the above, Franchisee may request extraordinary adjustments to Maximum Service Rates due to changes in law affecting collection operations, including for compliance with the California Air Resource Board’s (CARBS’s) Advanced Clean Fleet (ACF) electrification mandate. The City may, but is not obligated to, consider requests for extraordinary adjustment to Maximum Service Rates due to changes in law affecting Post-Collection Services. Requests for extraordinary changes in Maximum Service Rates are subject to good faith negotiations between City and Franchisee.
In the event of any Change in Scope or Change in Law (each as described below) that results in an material increase or decrease in Franchisee’s costs or revenues, in the event of an Extraordinary Cost Increase (as defined below), or in the event of any Change in Fees (as described below), an appropriate adjustment will be made to the Maximum Service Rates in order to compensate, to the maximum extent possible, for such
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increase or decrease in costs, revenues or Fees, commencing from the Effective Date(s) such increase or decrease first occurs. Any adjustment to Maximum Service Rates due to a Change in Scope, a Change in Law or an Extraordinary Cost Increase shall be in the reasonable discretion of the City.
A. “Change in Scope” shall mean any change in the services provided by the Franchisee under the Agreement whether proposed by the Franchisee or by the City.
B. “Change in Law” shall mean the enactment, adoption, promulgation, issuance, modification or written change in any law, regulation, order or judgment of any governmental body that affects the Franchisee’s performance of services under the Agreement including, without limitation, the issuance of final regulations under existing laws.
C. “Change in Fees” shall mean any change in franchise fees, vehicle impact fees and other fees charged to the Franchisee by the City connection with the services provided by the Franchisee under the Agreement the cancellation of any existing fees, and the adoption of any new fees.
D. “Extraordinary Cost Increase” shall mean a substantial increase in the Franchisee’s operating or capital costs or expenses that is outside of the Franchisee’s control but not due to a Change in Scope or Change in Law.
E. “Effective Date” shall mean the date in which the Franchisee notifies the City of the reasons for the cost estimate associated with a Change in Law, Change in Fees, and/or Extraordinary Cost Increase or when the Franchisee begins incurring costs for the Change in Law, Change in Fees, or Extraordinary Cost Increase, whichever is later.
In the case of a Change in Scope, a Change in Law or an Extraordinary Cost Increase, the Franchisee shall provide the City with projected operational, cost and revenue data reflecting the entire financial effect of such Change. The City reserves the right to require that the Franchisee supply any additional operational, cost and revenue data, or any other information it may reasonably need, to ascertain the appropriate financial impact of the Change and any necessary adjustment to Maximum Service resulting from such change.
Extraordinary adjustments to Maximum Service Rates for a qualifying Change in Scope or Change in Law, for a Change in Fees, or for an Extraordinary Cost Increase shall take effect as of the beginning of the next year and will include all impacts of the extraordinary adjustment from the Effective Date of the impact; provided, however, that, in the case of any Change in Fees charged by the City, the Extraordinary adjustment shall take effect as of the Effective Date of such Change in Fees. The underlying service, cost, revenue or fee changes supporting any rate adjustment under this Section 5 will be added to the appropriate category under Sections 2 and 3 above for purposes of future cost projections.
REPORT
City of San Luis Obispo and Participating Agencies
Submitted electronically on October 22, 2020
Submitted electronically: November 1, 2024
New Solid Waste Rate Adjustment
Methodology and 2025 Rates
ATTACHMENT 2
1512 Eureka Road, Suite 220, Roseville, CA 95661 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com November 1, 2024
Ms. Meg Buckingham
Solid Waste and Recycling Coordinator
Public Utilities
879 Morro, San Luis Obispo, CA 93401
submitted via email: [email protected]
SUBJECT: New Solid Waste Rate Adjustment Methodology and 2025 Rates Dear Ms. Buckingham and Participating Agencies,
R3 Consulting Group, Inc. (R3) was engaged by the City of San Luis Obispo (City) to provide solid waste consulting services via two engagements supporting the City’s negotiations of a new solid waste services agreement with Waste Connections, the solid waste hauler. R3 was originally engaged by the City to work in collaboration with Los Osos Community Services District and Waste Connections to update the methodology for annual adjustments to the solid waste rates charged by Waste Connections. The key objectives for updating the rate adjustment methodology were to enhance rate stability, predictability, fairness, transparency, ease of administration, and costeffectiveness.
As that engagement proceeded, eight other agencies in San Luis Obispo County (the City of Arroyo Grande, the City of Grover Beach, the City of Pismo Beach, Avila Beach Community Services District, Cambria Community Services District, Cayucos Sanitary District, Nipomo Community Services District, and Oceano Community Services District – altogether “Participating Agencies” or “Agencies”) were included as stakeholder participants in the development of new rate adjustment methodology. With the inclusion of these additional Agencies, objectives for the engagement were updated to include regional scale applicability of the new rate adjustment methodology. R3 was then engaged by the City to review Waste Connections’ rate adjustment requests for the 2025 rate year on behalf of all ten Agencies with the objective of determining 2025 solid waste rates that would an appropriate starting point for a new rate adjustment methodology starting in 2026.
The City of San Luis Obispo served as the lead contracting agency for both engagements, providing primary oversight and direction of R3’s work. Input and feedback were also sought from the other nine Agencies, and the results reflect their stakeholder input. Ultimately, the outcomes of both engagements are the conclusion of good faith contract negotiations between the City and Waste Connections. In summary, the City and Waste Connections have tentatively agreed to updated terms and conditions for annual rate adjustment which fulfill key objectives while also securing enhanced services that will protect low income households, prevent illegal dumping, and clean solid waste collection containers. The new rate adjustment methodology and enhanced services also resulted in updated adjustments to solid waste rates for 2025.
The City intends to recommend a new agreement with Waste Connections to the City Council that will include the new rate adjustment methodology and enhanced services along with the 2025 adjustments to solid waste rates. In keeping with the objective for the results to be applicable on a regional scale, Waste Connections is willing to offer the new rate adjustment methodology and
1512 Eureka Road, Suite 220, Roseville, CA 95661 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com select enhanced services to the other nine Agencies at the updated 2025 adjustments to solid waste rates.
R3 would like to recognize that this has been a significant undertaking, and we’d like to thank the City of San Luis Obispo, Waste Connections, Los Osos Community Services District, and Participating Agencies for your involvement in providing feedback during this process. In closing, R3 recommends City and stakeholder consideration of the revised 2025 rates and the new rate adjustment methodology as a means of achieving shared rate fairness, stability, and predictability objectives. Here’s what Waste Connections has shared regarding the outcomes:
“San Luis Garbage (SLG) had the opportunity to negotiate with the City of San Luis Obispo on the re-write of the 1994 rate-making manual. The goal of this endeavor was to simplify and streamline the rate-making process for all parties and provide an improved model going forward for potential refuse collection rate changes. The process included a considerable amount of discussion and analysis and although arduous at times, SLG feels the negotiations were performed in good faith, were collaborative in nature and carried out with mutual respect. In addition to updating the rate-making methodology, both parties took the opportunity to establish some new service enhancements that will discourage illegal dumping, provide cart cleaning exchanges, and offer rate relief for low-income customers. SLG believes the outcome of the negotiation has provided a much-improved rate-review process for the City of San Luis Obispo and other cities currently under the old rate-making methodology which will ultimately allow for an easier path to fair and reasonable rates for all customers.” * * * * * * *
We appreciate the opportunity to be of service to the City and would like to thank the City and the Participating Agencies for their involvement and feedback. We would also like to recognize Waste Connections staff for being communicative and responsive to requests for information during the process.
Sincerely,
Garth Schultz | Principal
R3 Consulting Group, Inc.
510.292.0853 | [email protected]
TABLE OF CONTENTS
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates TOC
1. Executive Summary
page 1
2. Background
page 4
3. New Solid Waste Rate Adjustment
Methodology and 2025 Rates
page 10
Attachments
1 Summary of Original 2025 Base Year Rate Adjustments
2 Revised 2025 Rate Adjustments
3 CPI-U for Garbage and Trash
4 Example Rate Calculations for 2026 through 2029
1. EXECUTIVE SUMMARY
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 1 of 19 New Rate Adjustment Methodology
The City of San Luis Obispo, in its capacity as the lead agency on the solid waste rate adjustment methodology update process, and in partnership with Los Osos Community Services District and Waste Connections, completed negotiations and arrived at tentative agreement with Waste Connections regarding the terms and conditions of a new methodology. The outcome was the result of extensive good faith negotiations between the City and Waste Connections, with due consideration to input provided by other public agency stakeholders.
Pending City Council approvals, the new methodology will replace the 1994 Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates (1994 Rate Manual) and will regulate annual rate adjustments for the City’s solid waste rates starting in 2026.
The new methodology fulfills key objectives established by the City and Waste Connections, including rate stability, predictability, fairness, transparency, ease of administration, and cost-effectiveness.
Additionally, in response to requests by other Agencies that contract with Waste Connections in San Luis Obispo County, the new methodology can be applied on a regional-scale and is available as recommended alternative to the 1994 Rate Adjustment Manual for those Agencies.
The key features of the new methodology include:
》 CPI Adjustments: Starting in 2026, rate adjustments will be based on the Garbage and Trash CPI, with a floor of 2% and a cap of 5%. Amounts under 2% or over 5% will carry forward. The CPI adjustment will apply to Waste Connections’ collection and post-collection cost centers. 》 Revenue Balancing Mechanism: Starting in 2027, adjustments to rates will account for shortfalls or surpluses in Waste Connections’ actual revenues compared to projected revenues from prior years. For example, if Waste Connections’ 2025 revenues exceed projections, the amount of surplus revenues will be credited to the rates in 2027 (and vice versa), achieving fairness in compensation and rates for the company and for ratepayers. Such adjustments would take place annually and will be independent of the CPI cap and floor noted above (there is no cap on these amounts).
》 Less Frequent Cost-Based Adjustments: Currently, solid waste rates are adjusted based on the 1994 Rate Adjustment Manual every three years on Waste Connections’ costs. Via the new methodology, cost-based adjustments would occur a maximum of every five years, and only if requested by Waste Connections or the City. The first opportunity for a cost-based adjustment will be for the 2030 rate year. If neither Waste Connections nor the City request a cost-based adjustment, then the CPI adjustment approach will be applied. Cost-based adjustments will be based on Waste Connections’ consolidated audited financial statements for the region.
Timeframes for cost-based adjustment application and review process will be ample, such that the City will have sufficient time for review and approval processes and such that the potential for delay in implementation is minimized. These timeframes will be delineated in the forthcoming amendment to the agreement with Waste Connections.
》 Updated Depreciation Lifespan for Trucks: The 1994 Rate Manual set a 7-year depreciation schedule for solid waste collection trucks. Modern solid waste collection trucks have a 10-year lifespan, and the depreciation schedule was adjusted accordingly. 》 Updated Profit Allowance: The 2025 rate adjustment will include a 9% profit allowance of projected collection costs and in 2026 and thereafter the profit allowance will be 10%. The updated profit allowance is in-keeping with industry standard ranges for solid waste services. For
Executive Summary
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 2 of 19 context, the 2025 profit allowance is approximately 5% of revenues and we estimate that the 2026 profit allowance will be approximately 5.5% of revenues. Profit will not be allowed on postcollection costs. 》 Removed Limitation on Corporate Overhead: The 1994 Rate Manual placed a limitation on corporate overhead costs. Today, corporate overhead costs fund legal, tax, payroll, human resources, engineering, compliance, IT, training and recruiting programs. The City and Waste Connections agreed to remove the prior limitation in order to fund these services. In the nearterm, compensation to Waste Connections for corporate overhead will be limited by the CPI adjustment noted above. Cost-based adjustments to corporate overhead are possible in 2030, and will be subject to review, justification, and potential limitation at that time. 》 Extraordinary Adjustments: The California Air Resources Board (CARB) Advanced Clean Fleets (ACF) regulation is requiring all solid waste collection trucks to have zero emissions by 2042. This includes a phased in plan to get the percentage of the fleet to be zero emission vehicle (ZEV) with 10% by 2030, 25% by 2033, 50% by 2036,75% by 2039 and 100% by 2042.
During CPI Adjustment years, Waste Connections may request extraordinary rate adjustments due to changes in law affecting collection operations, including for compliance with CARB’s ACF zero emission mandate (which may necessitate change to depreciation schedules). The City may, but is not obligated to, consider requests for extraordinary rate adjustments due to changes in law affecting post-collection operations. Requests for extraordinary change are subject to good faith negotiations between City and Waste Connections.
New Service Enhancements
During negotiations, the City and Waste Connections also took the opportunity to establish new service enhancements that will discourage illegal dumping, provide cart cleaning exchanges, and offer rate relief for low-income customers. The below service enhancements are available to the other Agencies that approve the new rate adjustment methodology in association with adjusted 2025 solid waste rates:
》 Customer Assistance Program: 20% low-income discount provided to residential customers using 32-gallon cart service, using existing jurisdictional practices on low-income relief for their offered utility type services with evidence of qualifying financial hardship. 》 Free Bulky Waste Collections: Collection of a bulky waste item twice annually from residential accounts at no separate cost, via clean-up week or voucher program depending on existing program.
》 Annual Cart Exchange: Once annual exchange of a residential solid waste, recycling, or organics cart per customer account.
2025 Rate Adjustments
As a result of the above, Waste Connections’ 2025 rate adjustment request was revised from a 9.29% increase to a 9.89% increase in solid waste rates, effective January 1, 2025 (and prior to other rate structure adjustments that the City and Waste Connections may enact). When the new rate methodology changes and service enhancements are equally applied to the other regional Agencies, the results are as shown in Table 1 on the following page. Additional details are included in Section 3 of this report.
Executive Summary
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 3 of 19 Table 1: 2025 Rate Adjustments
Agency Original Revised
City of San Luis Obispo 9.29% 9.89%
City of Arroyo Grande 3.97% 4.92%
Los Osos CSD 12.47% 13.18%
City of Pismo Beach 3.97% 4.82%
Cambria CSD 12.78% 12.59%
City of Grover Beach 3.97% 5.02%
Nipomo CSD 3.23% 5.04%
Oceano CSD 3.76% 4.98%
Cayucos SD 12.47% 14.32%
Avila Beach CSD 3.97% 4.60%
2. BACKGROUND
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 4 of 19 1994 Rate Manual
The 1994 Rate Manual is a 120-page document that provides step-by-step directives regarding annual adjustments to solid waste rates in the City. Though the 1994 Rate Manual specifically references the City of San Luis Obispo, other agencies in San Luis Obispo County (including the nine Agencies referenced in this report) also follow the 1994 Rate Manual for annual adjustments to solid waste rates.
The 1994 Rate Manual established a three-year cycle for adjustments to solid waste rates. The first year of each three-year cycle (called a “base year”) adjusted rates based on the documented costs of providing solid waste services. In the second and third years, solid waste rates were adjusted in accordance with external indicators, such as the Consumer Price Index (CPI).
While the 1994 Rate Manual was an appropriate approach to annually adjusting solid waste rates at the time, changing regulatory conditions and modern best practices in solid waste rate setting indicate that the prior approach has outlived its usefulness. In particular, cost-based adjustments on a fixed three-year cycle are no longer the industry norm. Most solid waste rate adjustment methodologies in California today either do not include regular cost-based adjustments or do so less frequently. When allowed, cost-based adjustments are typically the result of extraordinary changes in cost due to factors like changes in law or other uncontrollable factors (such as China’s National Sword Policy in 2017 and the COVID pandemic in 2020). Additionally, step-by-step instructions and timelines in the 1994 Rate Manual are outdated and do not contemplate current approaches to public noticing, public hearings, and review timelines for authorizing rate adjustments.
RFQ for New Rate Adjustment Methodology
Recognizing the limitations of the 1994 Rate Manual, the City and Los Osos Community Services District issued a request for quotes (RFQ) in early 2024 seeking a consultant to develop a new rate adjustment methodology. Pursuant to the RFQ process, R3 was awarded an agreement to provide support in developing a new rate adjustment methodology.
Rate Adjustment History
Rate adjustments experienced by the City and participating Agencies have varied significantly in the prior ten years from 2015 through 2024, as shown in Table 2, on the following page. As shown in the table, rate adjustments by agency have varied from 0% (most Agencies in 2015) to over 20% (most Agencies in 2022).
There are important reasons for these variances, primarily related to the unfunded State mandates of SB 1383 (Short-lived Climate Pollutants Act) which required all agencies in California to implement programs to recover and recycle organic waste to reduce methane emissions from landfills. While rate adjustments were necessary to fund the required SB 1383 programs, the combination of new costs with the three-year cost-based adjustment approach in the 1994 Rate Manual resulted in rate adjustment spikes in 2016, 2019, and 2022. Overall, across the Agencies, the average annual rate adjustment from 2015 through 2024 has been 6.76%.
One important objective of the new rate adjustment methodology is to minimize the recurrence of such spikes by reducing the frequency of cost-based rate adjustments. From R3’s experience implanting new rate methodologies with other clients, the result has been stable and predictable annual rate adjustments.
Background
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 5 of 19 Table 2: 2015 – 2024 Rate Adjustments by Agency
Agency 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 City of San Luis
Obispo 0.00% 5.25% 1.00% 1.60% 13.70% 1.70% 0.70% 17.75% 9.10% 3.00% City of Arroyo
Grande 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00% Los Osos CSD 2.00% 10.37% 1.00% 1.60% 25.74% 1.70% 0.70% 41.87% 7.70% 2.70% City of Pismo Beach 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00% Cambria CSD 1.92% 9.93% 1.00% 1.60% 25.32% 1.70% 0.70% 41.50% 9.10% 3.00% City of Grover
Beach 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00% Nipomo CSD 0.00% 0.00% 1.00% 1.60% 15.08% 1.70% 0.70% 21.27% 9.10% 3.00% Oceano CSD 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 21.03% 9.10% 3.00% Cayucos SD 2.00% 27.39% 1.00% 1.60% 26.43% 1.70% 0.70% 43.30% 9.10% 3.00% Avila Beach CSD 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00% Financial Statement History
There are three Waste Connections business units serving the ten participating Agencies (San Luis Garbage, Mission Country Disposal, and South County Sanitary Service). Each business unit prepares annual audited financial statements which are used as the basis for base year rate applications to the Agencies. R3 analyzed Waste Connections’ audited financial statements for the six years from 2018 through 2023 to evaluate profit achievement, with the results summarized in Table 3, below. Table 3 also includes estimated profit achievement in 2024 (still underway) and for 2025 (prior to 2025 rate adjustments).
Table 3: 2018 – 2023 Profit Achievement
Business Unit 2018 2019 2020 2021 2022 2023 2024 2025
San Luis Garbage -13.84% -16.84% -9.66% -3.41% 12.47% 6.30% -0.64% -6.62% Mission Country Disposal -19.26% -30.77% -9.28% -19.84% -10.21% 2.47% -4.09% -8.95% South County Sanitary Service 5.38% 1.40% 0.25% -5.56% 5.93% 15.85% 8.43% 2.38% Overall -7.22% -12.45% -5.22% -7.88% 4.66% 9.67% 2.61% -3.16%
Background
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 6 of 19 As shown in Table 3, in total across all three business units, Waste Connections operated without any net income between 2018 and 2021, with net positive profitability being achieved in 2022 and 2023. Profit achievement varied by business unit, with South County Sanitary Service consistently experiencing greater profit achievement and Mission Country Disposal consistently experiencing lesser or no profit achievement. This is one of the key reasons that rate adjustments for the Agencies served by Mission Country Disposal (Cambria Community Services District, Cayucos Sanitary District, and Los Osos Community Services District) were higher than the other Agencies in 2019 and 2022.
Table 3 also shows that projected profit achievement in 2024 will be lower than 2023, which is primarily the result of Waste Connections incurring increased landfill disposal costs (provided by a related party) and increased organics processing costs (provided by a non-affiliated third party processor). Projected profit achievement for 2025 – which, importantly, is prior to 2025 adjustments to solid waste rates – demonstrates no net profit for San Luis Garbage and Mission County Disposal and low net income for South County Sanitary Service. Overall, without adjustments to rates, Waste Connections service to the Agencies in 2025 will not yield net income.
It should be noted that Waste Connections allocates costs between business units based on allocation metrics that include vehicle operating hours, number of solid waste containers, and number of customer accounts. While such metrics are useful means of allocating costs, they do not necessarily represent the exact cost of providing service within a given business unit.
Rate Comparison
R3 compared current 2024 solid waste rates for the Agencies to rates in other jurisdictions in San Luis Obispo County, Santa Barbara County, and Monterey County. The results are shown in Table 4, below and on the following page, and are organized in ascending order by 32-gallon monthly rate (common residential subscription level).
Table 4: Regional Comparison of Monthly Rates
Agency 20 Gallon 32 Gallon 64 Gallon 96 Gallon 2 Cubic
Yards
Oceano CSD N/A $20.37 $29.31 $57.39 $128.75
San Luis Obispo $14.74 $23.53 $47.06 $70.59 $185.21
Pismo Beach N/A $23.76 $47.56 $71.33 $166.02
Grover Beach N/A $24.23 $32.74 $41.23 $147.95
Arroyo Grande N/A $27.33 $35.52 $43.73 $167.65
Nipomo CSD N/A $27.57 $39.52 $51.81 $136.62
Avila Beach CSD N/A $28.31 $46.78 $65.24 $177.68
Santa Barbara County Zone 4 Lompoc N/A $31.41 $36.13 $40.70 $179.98 Cayucos SD N/A $32.60 $38.52 $44.48 $184.32
Santa Barbara County Zone 5 N/A $33.03 $37.84 $42.46 $192.87 City of Atascadero N/A $33.67 $52.80 $66.35 $172.24
San Miguel N/A $34.13 $53.80 $72.88 $124.12
Santa Barbara County Zone 4 Santa Ynez N/A $34.33 $42.62 $50.77 $254.11 City of Morro Bay $22.21 $35.54 $71.07 $106.63 $265.30
Solvang N/A $36.28 $45.20 $54.69 $256.55
Background
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 7 of 19 Agency 20 Gallon 32 Gallon 64 Gallon 96 Gallon 2 Cubic
Yards
Goleta N/A $37.39 $41.88 $48.35 $240.10
Templeton N/A $38.73 $54.63 $60.41 $149.58
Los Osos CSD $27.74 $39.45 $60.57 $64.96 $228.72
Buellton N/A $40.51 $48.40 $56.38 $281.13
Cambria CSD N/A $41.52 $83.03 $124.55 $201.94
King City $32.43 $42.83 $53.68 $63.52 $288.00
Santa Barbara County Zone 2 N/A $43.25 $54.66 $65.92 $259.61 City of Paso Robles $38.15 $43.32 $57.42 $63.59 $188.36 Santa Barbara County Zone 3 N/A $45.22 $51.52 $57.75 $215.72 MRWMD $38.28 $46.54 $72.92 $91.20 $277.20
City of Santa Barbara N/A $48.26 $59.82 $71.38 $277.66
WM Area (Formerly Mid-State) N/A $48.72 $71.31 $93.84 $214.46 Santa Barbara County Zone 1 N/A $56.60 $62.86 $69.25 $256.74 Santa Maria N/A N/A $38.74 $47.87 $166.72
Table 4 demonstrates that solid waste rates for the City and other Participating Agencies compare favorably to others in the region. Charts 1 through 4, below and on the following pages, show the information from Table 4 in graphical format.
Chart 1: Regional Comparison of Monthly 32-gallon Cart Rates Chart 1, which is organized in ascending order of 32-gallon monthly rate, demonstrates that the rates for 32-gallon monthly service (the most subscribed residential service level) for all Participating Agencies $0
$10
$20
$30
$40
$50
$60
Oceano CSD
San Luis Obispo
Pismo Beach
Grover Beach
Arroyo Grande
Nipomo CSD
Avila Beach CSD
Santa Barbara County…
Cayucos SD
Santa Barbara County…
City of Atascadero
San Miguel
Santa Barbara County…
City of Morro Bay
Solvang
Goleta
Templeton
Los Osos CSD
Buellton
Cambria CSD
King City
Santa Barbara County…
City of Paso Robles
Santa Barbara County…
MRWMD
City of Santa Barbara
WM Area (Formerly Mid-…
Santa Barbara County…
Santa Maria
Background
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 8 of 19 other than Cambria Community Services District, Cayucos Sanitary District, and Los Osos Community Services District are the lowest in the region. Chart 2 shows how 64-gallon monthly rates compare.
Chart 2: Regional Comparison of Monthly 64-gallon Cart Rates Chart 3: Regional Comparison of Monthly 96-gallon Cart Rates $0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Oceano CSD
San Luis Obispo
Pismo Beach
Grover Beach
Arroyo Grande
Nipomo CSD
Avila Beach CSD
Santa Barbara County…
Cayucos SD
Santa Barbara County…
City of Atascadero
San Miguel
Santa Barbara County…
City of Morro Bay
Solvang
Goleta
Templeton
Los Osos CSD
Buellton
Cambria CSD
King City
Santa Barbara County…
City of Paso Robles
Santa Barbara County…
MRWMD
City of Santa Barbara
WM Area (Formerly Mid-…
Santa Barbara County…
Santa Maria
$0
$20
$40
$60
$80
$100
$120
$140
Oceano CSD
San Luis Obispo
Pismo Beach
Grover Beach
Arroyo Grande
Nipomo CSD
Avila Beach CSD
Santa Barbara County…
Cayucos SD
Santa Barbara County…
City of Atascadero
San Miguel
Santa Barbara County…
City of Morro Bay
Solvang
Goleta
Templeton
Los Osos CSD
Buellton
Cambria CSD
King City
Santa Barbara County…
City of Paso Robles
Santa Barbara County…
MRWMD
City of Santa Barbara
WM Area (Formerly Mid-…
Santa Barbara County…
Santa Maria
Background
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 9 of 19 Charts 3 and 4 keep the same ordering as Charts 1 and 2 and show how large residential 96-gallon service and commercial two (2) cubic yard bin service compare with the region. Overall, while exceptions exist, rates for solid waste service for the City and the Participating Agencies are among the lowest in the region, including San Luis Obispo County, Santa Barbara County, and Monterey County.
Chart 4: Regional Comparison of Monthly 2 Cubic Yard Rates $0
$50
$100
$150
$200
$250
$300
$350
Oceano CSD
San Luis Obispo
Pismo Beach
Grover Beach
Arroyo Grande
Nipomo CSD
Avila Beach CSD
Santa Barbara County…
Cayucos SD
Santa Barbara County…
City of Atascadero
San Miguel
Santa Barbara County…
City of Morro Bay
Solvang
Goleta
Templeton
Los Osos CSD
Buellton
Cambria CSD
King City
Santa Barbara County…
City of Paso Robles
Santa Barbara County…
MRWMD
City of Santa Barbara
WM Area (Formerly Mid-…
Santa Barbara County…
Santa Maria
3. NEW RATE ADJUSTMENT METHODOLOGY
AND 2025 RATES
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 10 of 19 2025 Base Year Rate Adjustments
Waste Connections submitted base year rate applications to the Agencies for rates effective January 1, 2025.1 Those rate applications were prepared in accordance with the 1994 Rate Manual, with modification for an effectiveness date of January 1, 2025, instead of the October 1, 2024 date that otherwise would have been the effective date given strict adherence to the 1994 Rate Manual. In simple terms, the applications project future 2025 costs for providing solid waste services based on the actual costs of providing services as follows:
》 Actual results for the most recently completed year (2023), which are based on the audited financial statements.
》 Projected results for the current year (2024), which are to be based on year-to-date information available at the time the application is submitted.
》 Projected results for the next year (2025).
Adjustments to solid waste rates are then calculated based on the projected 2025 revenue requirement, which is the sum of:
》 Allowed costs.
》 Allowable operating profit.
》 Pass through costs.
In reviewing the 2025 base year rate applications for the Agencies, R3:
》 Checked calculations for mathematical accuracy and consistency. 》 Tied projected costs back to the 2023 audited financial statements. 》 Evaluated the root causes of extraordinary changes in cost for landfilling and organics processing.
》 Reviewed 2024 revenues year to date to determine accuracy of projected revenues at current rates for 2025.
》 Proposed adjustments to solid waste collection vehicle depreciation lifetimes.
A summary of Waste Connections’ original 2025 base year rate adjustments per the applications submitted to the Agencies is included as Attachment 1.
It should be noted that Waste Connections’ base year rate applications are made at the business unit level (San Luis Garbage, Mission Country Disposal, and South County Sanitary Service) with no allocation of projected costs to individual Agencies served by those business units. Rather, the base year rate adjustment applications use total costs and revenues for those business units to calculate rate adjustments for the individual Agencies. For the purposes of our analysis, and as documented in Attachment 1, R3 allocated projected expenses by agency in accordance with proportion of revenues – this allocation approach is what the base year rate application achieve in practice, and the result is an exact match to the rate adjustment calculations included in the base year rate applications for each agency.
1 Authorization of the January 1, 2025 rate adjustments are expected to occur after that date. Waste Connections will prorate adjustment amounts on customer bills to account for the timing difference.
New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 11 of 19 R3 thoroughly reviewed the figures included in the 2025 rate adjustment calculations, as well as supporting documentation requested of Waste Connections during the review process and found that Waste Connections’ rate applications were accurate and in accordance with the 1994 Rate Manual. The rate adjustments shown in Table 5 on the following page are the correct rate adjustments per the 1994 Rate Manual and are the default rate adjustments effective January 1, 2025, if the City and the Participating Agencies do not move forward with revisions to the 2025 rates in accordance with the new rate adjustment methodology.
Table 5: 2025 Rate Adjustments Per 1994 Rate Manual
Agency January 1, 2025, Default
Rate Adjustment
City of San Luis Obispo 9.29%
City of Arroyo Grande 3.97%
Los Osos CSD 12.47%
City of Pismo Beach 3.97%
Cambria CSD 12.78%
City of Grover Beach 3.97%
Nipomo CSD 3.23%
Oceano CSD 3.97%
Cayucos SD 12.47%
Avila Beach CSD 3.97%
Revisions for New Rate Adjustment Methodology
In negotiating the terms and conditions of a new rate adjustment methodology starting in 2026, the City and Waste Connections made the following revisions to the 2025 base year rate adjustments:
Updated Depreciation Lifespan for Trucks
The 1994 Rate Manual set a 7-year depreciation schedule for solid waste collection trucks. Modern solid waste collection trucks have a 10-year lifespan, and the depreciation schedule was adjusted by Waste Connections accordingly. Table 6, on the following page, shows the dollar magnitude of this change and the effect on the 2025 rate adjustment, with the effect being a reduction in the rate adjustment calculation ranging from 1.33% to 1.62%, depending on agency. Differences in effect by agency are the result of business unit allocations described earlier in this report.
New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 12 of 19 Table 6: Change in Depreciation Lifespan
San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
Original
Depreciation
$1,338,367
$376,989
$295,515
$131,502
$398,063
$316,350
$236,919
$225,376
$114,616
$26,441
Revised
Depreciation
1,125,720
317,545
248,918
110,766
336,460
267,393
200,254
190,498
96,879
22,349
Change in
Calculations
(212,647)
(59,444)
(46,597)
(20,735)
(61,603)
(48,957)
(36,665)
(34,878)
(17,737)
(4,092)
Effect on
Rate
Adjustment
-1.47% -1.62% -1.62% -1.62% -1.33% -1.33% -1.33% -1.33% -1.33% -1.33% Removed Limitation on Corporate Overhead
The 1994 Rate Manual placed a limitation on corporate overhead costs. Today, corporate overhead costs fund legal, tax, payroll, human resources, engineering, compliance, IT, training and recruiting programs.
The City and Waste Connections agreed to remove the prior limitation in order to fund these services.
Table 7, below, shows the effect of removing the prior limitation on corporate overhead. Differences in effect by agency are the result of different original proportionate amounts of corporate overhead between Agencies. In the near-term, compensation to Waste Connections for corporate overhead will be limited by the CPI adjustment noted above. Cost-based adjustments to corporate overhead are possible in 2030, and will be subject to review, justification, and potential limitation at that time.
Table 7: Change in Corporate Overhead
San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
Original
Corporate
Overhead
$246,296 $46,213 $36,226 $16,120 $93,625 $74,406 $55,724 $53,009 $26,958 $6,219 Revised
Corporate
Overhead
430,378 80,753 63,301 28,168 163,600 130,017 97,371 92,627 47,106 10,867 Change in
Calculations 184,082 34,540 27,075 12,048 69,975 55,611 41,648 39,619 20,148 4,648 Effect on Rate
Adjustment 1.28% 0.94% 0.94% 0.94% 1.51% 1.51% 1.51% 1.51% 1.51% 1.51%
New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 13 of 19 50% Cost Share for Regional Service Enhancements
Waste Connections is offering new service enhancement to the benefit of the City and the Agencies including:
》 Collection of a bulky waste item twice annually from residential accounts at no cost, via clean-up week or voucher program depending on existing program.
》 Once annual exchange of a residential solid waste, recycling, or organics cart per customer account.
Waste Connections has estimated the annual cost of offering these service regionally and is proposing recovery of 50% of the projected costs via the 2025 rate adjustment. The City and Waste Connections have tentatively agreed to this cost sharing as part of the new agreement and for inclusion in the 2025 rates. Waste Connections is proposing the low income discount customer assistance program without a change in rate adjustment.
Table 8, below, shows the effect of including the 50% cost sharing for these two service enhancements into the 2025 rate adjustment. Cost allocations are by percentage of accounts by agency, which is the reason for differences in the effect of rate adjustment by agency.
Table 8: 50% Cost Share for Service Enhancements
San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
New Annual
Cart Exchange $26,376 $9,889 $7,223 $3,623 $11,445 $7,566 $8,179 $7,987 $3,681 $320 Bulky Clean-up
Enhancements 21,091 7,908 5,776 2,897 9,152 6,050 6,540 6,386 2,944 256 Change in
Calculations 47,467 17,797 12,999 6,520 20,597 13,616 14,719 14,373 6,625 576 Effect on Rate
Adjustment 0.33% 0.48% 0.45% 0.51% 0.45% 0.37% 0.54% 0.55% 0.50% 0.19% Corrections to AB 939 Fees
Agency fees, which include AB 939 Fees and Franchise Fees, are included as estimates in rate adjustment applications. Because the rate applications are at the company business unit level, and not at the individual agency level, AB 939 fees in the application are allocated to the Agencies in proportion to revenues. However, only the City of San Luis Obispo and Cayucos Sanitary District receive AB 939 Fees – therefore this was corrected in the revised 2025 rate adjustments as shown in Table 9, on the following page. Note that the values for the City of San Luis Obispo also include a correction to Franchise Fee revenues.2
2 Specifically, to remove the 1994 Rate Manual’s approach to “grossing up” the calculated rate adjustment to account for the Franchise Fee by including the projected Franchise Fee payment amounts in the rate adjustment calculation itself. This approach is also recommended for the other Agencies starting with the 2026 rate adjustment.
New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 14 of 19 Table 9: Corrections to AB 939 Fees
San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
Original
Agency Fees $362,140 $5,226 $4,097 $1,823 $- $- $- $- $- $- Revised
Agency Fees 439,411 - - 12,754 - - - - - -
Change in
Calculations 77,2713 (5,226) (4,097) 10,931 - - - - - - Effect on Rate
Adjustment 0.54% -0.14% -0.14% 0.85% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Updated Profit Allowance
The 1994 Rate Manual, along with the Agencies agreements with Waste Connections, limits allowable profit based on an “operating ratio” of 92% or 93% of allowable collection expenses (not including postcollection disposal, processing or recycling expenses nor agency fees) depending on the agency. A 93% operating ratio is the equivalent of a 7.53% profit margin, and a 92% operating ratio is the equivalent of an 8.7% profit margin.
A key negotiation point between the City and Waste Connections was a change to the profit allowance.
Ultimately, after much discussion and negotiation, the City and Waste Connections agreed that the 2025 rate adjustment will include a 9% profit allowance of projected allowable collection costs and in 2026 and thereafter the profit allowance will be 10%. The updated profit allowance is in-keeping with industry standards for solid waste services.
For context, the 2025 profit allowance is approximately 5% of revenues and we estimate that the 2026 profit allowance will be approximately 5.5% of revenues. Table 10, on the following page, shows the effect of changing the profit allowance to 9% of collection costs for all Agencies for the 2025 rate adjustments. Differences in the effect on rate adjustment are due to differences in existing profit allowances by agency, as well as differences in the depreciation, corporate overhead and new service enhancements shown in earlier tables.
3 Includes adjustment to Franchise Fee to remove “grossing up” method from City’s 2025 rate adjustment calculations.
New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 15 of 19 Table 10: 9% Profit Allowance on Allowable Collection Costs San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
Original Profit
Allowance $641,302 $188,392 $170,609 $65,715 $227,094 $180,477 $135,161 $111,295 $65,388 $15,085 Revised Profit
Allowance 768,515 224,623 175,993 78,382 237,649 188,618 141,665 134,797 68,490 15,714 Change in
Calculations 127,213 36,231 5,384 12,667 10,555 8,141 6,504 23,502 3,102 629 Effect on Rate
Adjustment 0.88% 0.99% 0.19% 0.99% 0.23% 0.22% 0.24% 0.90% 0.23% 0.20% Total Revisions for New Rate Adjustment Methodology
Taken altogether, the revisions to the 2025 rate adjustment result in small increases to the original 2025 rate adjustment calculations. These are shown in Table 11, on the following page, and are also shown in Attachment 2.
New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 16 of 19 Table 11: Overall Revisions to 2025 Rate Adjustments
San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
Original 2025
Revenue
Calculation
$15,640,734 $4,089,595 $3,228,699 $1,426,540 $4,786,646 $3,804,059 $2,848,911 $2,692,832 $1,378,241 $317,951 Change in
Depreciation (212,647) (59,444) (46,597) (20,735) (61,603) (48,957) (36,665) (34,878) (17,737) (4,092) Change in
Corporate
Overhead
184,082 34,540 27,075 12,048 69,975 55,611 41,648 39,619 20,148 4,648 Enhanced
Services 47,467 17,797 12,999 6,520 20,597 13,616 14,719 14,373 6,625 576 Updated Profit
Allowance 127,213 36,231 5,384 12,667 10,555 8,141 6,504 23,502 3,102 629 Corrections to
AB 939 Fees 77,271 (5,226) (4,097) 10,931 - - - - - -
Revised 2025
Revenue
Calculation
15,864,119 4,113,493 3,223,463 1,447,971 4,826,170 3,832,470 2,875,118 2,735,447 1,390,379 319,712 Revenues at
Current Rates 14,435,726 3,677,194 2,882,493 1,282,686 4,621,616 3,672,906 2,750,690 2,616,676 1,330,724 306,989 Shortfall (1,428,393) (436,299) (340,970) (165,285) (204,554) (159,564) (124,428) (118,771) (59,655) (12,724) Revised 2025
Rate
Adjustment4
9.89% 13.18% 12.59% 14.32% 4.92% 4.82% 5.02% 5.04% 4.98% 4.60% Proportionality in Cost of Service
R3 analyzed the 2025 rate adjustments for adequacy with respect to the cost-of-service requirements of Proposition 218. Because the base year rate adjustment methodology is based on the documented cost of provided solid waste services as expressed in Waste Connections’ audited financial statements, we find that the current and proposed solid waste service rates will generate revenues sufficient to cover the cost-of-providing service plus a reasonable profit allowance commensurate with normal expectations in the solid waste industry.
R3 also analyzed the proposed solid waste service rates for adequacy with respect to proportionate allocation of costs among solid waste service customers. R3 found that the current (and thus also 4 Rate adjustments shown include grossing up for franchise fees per 1994 Rate Manual methodology, except for San Luis Obispo.
New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 17 of 19 proposed) solid waste rate structure proportionately allocates costs to service types and container sizes based on the relative differences in cost associated with the types of services provided to customers.
For example, for customers subscribing to 60- or 90-gallon cart solid waste service, the per-gallon cost-ofservice for those subscribed to the larger container size (90-gallons) is proportionately less than those subscribed to the smaller container size (60-gallons). This is because solid waste service is comprised of both fixed and variable costs, with the fixed cost portion being for the cost of collection (labor, fuel, capital equipment, and other shared costs) as well as the costs related to post-collection disposal, processing, recycling and composting. Thus, the cost-of-service for the larger container size (90-gallons) has a lesser proportion of fixed costs to variable costs compared to the smaller (60-gallon) container size.
Factors Affecting 2025 Rate Adjustments
Overall, for the Agencies and the three Waste Connections business units, the 2025 rate adjustments reflect an 8.12% increase in revenues to meet increased costs and revised profit allowances. The largest contributors to the overall increase are:
》 Increases in organics processing costs – Third-party costs for the organic waste postcollection processing facility operated by the company formerly named Hitachi Zosen INOVA, and which are not within Waste Connections’ control, have doubled since 2022. The change in cost is the result of changes in facility capital and operating costs. 》 Increases in landfill disposal costs – Related party costs for landfill waste disposal at Cold Canyon have remained flat since 2016. The 2025 rate adjustment reflects a market adjustment to these costs, from a per ton tipping fee of $41 per ton (in place since 2016) to a per ton tipping fee of $70. Waste Connections provided market comparison demonstrating the applicability of the $70 per ton market tipping fee.
Other factors play minor roles in the 2025 rate adjustment:
》 Collection costs including labor, vehicles, operating expenses and overhead – These costs are increasing in proportion to the Consumer Price Index and are projected to increase by 3.20% in 2024 and 4.21% for 2025.
》 Agency fees – These costs are mostly proportionate to changes in rates and are projected to increase by 2.22% in 2024 and 3.30% in 2025.
Overall, collection services comprise the single largest component overall rate funded expenses, at 56% of total rate revenues. Post-collection services are the next largest component of rate funding, at 29% of total rate revenues. Agency fees comprise 10% of rate revenues and profit allowance comprises 5% of rate revenues. This is demonstrated in Chart 5, on the following page.
New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 18 of 19 Chart 5: Summary Components of 2025 Rate Revenues
New Rate Adjustment Methodology
The City and Waste Connections negotiated a new methodology for adjusting rates starting in 2026, which are summarized below. R3 is preparing an exhibit to the City’s new agreement with Waste Connections that will further detail the terms and conditions of the new methodology in accordance with the following points, which have been tentatively agreed to by the parties. The exhibit will be finalized and ready for distribution to the Agencies on or around November 18, 2024. It is recommended that the Agencies bring forward the exhibit as an amendment to their agreements with Waste Connections when considering the 2025 rate adjustments, which is anticipated to occur in January 2025.
The features of the new methodology include:
》 CPI Adjustments: Starting in 2026, rate adjustments will be based on the Garbage and Trash CPI, with a floor of 2% and a cap of 5%. Amounts under 2% or over 5% will carry forward. The CPI adjustment will apply to Waste Connections’ collection and post-collection cost centers. The proposed CPI is the Consumer Price Index for all Urban Consumers for Garbage and Trash in the United States, all City average. Details and prior results for this CPI are included in Attachment 3.
This is the same CPI used by Waste Connections in preparing its 2025 base year application. 》 Updated Profit Allowance: As stated previously, the 2025 rate adjustment includes a 9% profit allowance of projected collection costs. The City and Waste Connections have tentatively agreed that, in 2026 and thereafter, the profit allowance will be 10% of collection costs. 》 Revenue Balancing Mechanism: Starting in 2027, adjustments to rates will account for shortfalls or surpluses in Waste Connections’ actual revenues compared to projected revenues from prior years. For example, if Waste Connections’ 2025 revenues exceed projections, the amount of surplus revenues will be credited to the rates in 2027 (and vice versa), achieving fairness in compensation and rates for the company and for ratepayers. Such adjustments would take place annually and will be independent of the CPI cap and floor noted above. 》 Less Frequent Cost-Based Adjustments: Currently, solid waste rates are adjusted based on the 1994 Rate Manual every three years on Waste Connections’ costs. Via the new methodology, Collection
Services
56%
PostCollection
Services
29%
Agency Fees
10%
Profit
Allowance
5%
New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 19 of 19 cost-based adjustments would occur a maximum of every five years, and only if requested by Waste Connections or the City. The first opportunity for a cost-based adjustment will be for the 2030 rate year. If neither Waste Connections nor the City request a cost-based adjustment, then the CPI adjustment approach will be applied. Cost-based adjustments will be based on Waste Connections’ consolidated audited financial statements for the region. Timeframes for cost-based adjustment application and review process will be ample, such that the City will have sufficient time for review and approval processes and such that the potential for delay in implementation is minimized.
》 Extraordinary Adjustments: The California Air Resources Board (CARB) Advanced Clean Fleets (ACF) regulation is requiring all solid waste collection trucks to be zero emissions in 2042.
This includes a phased in plan to get the percentage of the fleet to be zero emission vehicle (ZEV) with 10% by 2030, 25% by 2033, 50% by 2036,75% by 2039 and100% by 2042. During CPI Adjustment years, Waste Connections may request extraordinary rate adjustments due to changes in law affecting collection operations, including for compliance with CARB’s ACF zero emission mandate (which may necessitate change to depreciation schedules). The City may, but is not obligated to, consider requests for extraordinary rate adjustments due to changes in law affective post-collection operations. Requests for extraordinary change are subject to good faith meet and confer negotiations between City and Waste Connections.
Example Calculations for 2026 through 2029
R3 has prepared example calculations of projected rate adjustments for 2026 through 2029 based on the tentatively agreed to terms and conditions outlined above (including adjustment to 10% profit allowance on collection services starting in 2026). Table 12, below, demonstrates this example for the City of San Luis Obispo, and Attachment 4 provides examples for all Agencies. Note that the example in Table 12 and Attachment 4 includes the following assumptions:
》 CPI at the 5% cap (note that CPI below the 5% cap will result in lower rate adjustments) 》 Revenue reconciliation at 1% below annual rate revenue projections (note that amounts above rate revenue projections will offset rate adjustments, not add to them). 》 Discontinuance of the prior Franchise Fee grossing method on rate adjustment for all Agencies starting in 2026.
Table 12: Example Calculation of New Rate Methodology for the City of San Luis Obispo 2025 2026 2027 2028 2029
Collection Services $8,539,055 $8,966,008 $9,414,308 $9,885,024 $10,379,275 Profit Allowance 768,515 896,601 941,431 988,502 1,037,927 Post-Collection Services 4,602,096 4,832,201 5,073,811 5,327,501 5,593,876 Franchise Fee 1,586,412 1,675,695 1,777,106 1,866,072 1,959,572 AB 939 Fee 368,041 386,443 405,765 426,053 447,356
Revenue Reconciliation Example N/A N/A 158,641 167,569 177,711 Total Revenues 15,864,119 16,756,947 17,771,062 18,660,722 19,595,717 Indexed Rate Adjustment 5.63% 6.05% 5.01% 5.01%
San Luis Obispo Los Osos Cambria Cayucos Arroyo Grande Pismo Beach Grover Beach Nipomo Oceano Avila Single Family Residential $ 5,282,964 $ 2,795,167 $ 2,201,010 $ 987,376 $ 2,379,516 $ 1,598,158 $ 1,580,148 $ 1,570,029 $ 684,117 $ 91,446 Multi-Family Dumpsters 2,556,077 - - - - - - - - -
Non-Residential Carts 729,282 100,710 77,805 33,710 256,857 237,767 134,053 119,843 74,076 24,711 Non-Residential Dumpsters 5,846,777 776,244 599,701 259,830 1,979,781 1,832,640 1,033,238 923,712 570,958 190,469 Total Rate Revenue 14,415,100 3,672,121 2,878,516 1,280,916 4,616,154 3,668,565 2,747,439 2,613,584 1,329,151 306,626 Other Income (Allocated) 20,626 5,073 3,977 1,770 5,462 4,341 3,251 3,092 1,573 363 14,435,726 3,677,194 2,882,493 1,282,686 4,621,616 3,672,906 2,750,690 2,616,676 1,330,724 306,989 Labor 3,658,710 1,042,706 817,360 363,719 1,113,222 884,704 662,567 630,287 320,535 73,945 Depreciation 1,338,367 376,989 295,515 131,502 398,063 316,350 236,919 225,376 114,616 26,441 Insurance 1,124,499 316,418 248,035 110,374 329,978 262,241 196,396 186,828 95,012 21,919 Other G&A 976,729 282,701 221,605 98,612 304,307 241,840 181,117 172,293 87,621 20,213 Fuel 754,387 321,408 251,946 112,114 254,951 202,616 151,742 144,349 73,409 16,935 Maintenance 421,166 116,487 91,312 40,633 117,432 93,326 69,893 66,488 33,813 7,800 Corporate Overhead 246,296 46,213 36,226 16,120 93,625 74,406 55,724 53,009 26,958 6,219 Total Collection Services 8,520,154 2,502,921 1,961,999 873,074 2,611,578 2,075,482 1,554,357 1,478,629 751,964 173,473 Garbage Landfilling 2,408,278 349,264 273,782 121,831 508,314 403,969 302,538 287,798 146,361 33,765 Organics Processing 1,108,784 477,019 373,927 166,395 660,852 525,194 393,325 374,162 190,282 43,897 Recyclables Processing 916,880 173,112 135,700 60,385 270,385 214,881 160,927 153,087 77,853 17,960 Affiliated Party Costs 168,154 57,121 44,776 19,925 46,128 36,659 27,455 26,117 13,282 3,064 Total Post-Collection & Affiliated Party Services 4,602,096 1,056,516 828,185 368,536 1,485,678 1,180,703 884,245 841,165 427,778 98,686 Franchise Fee 1,515,042 336,540 263,809 117,393 462,296 367,397 275,149 261,744 133,111 30,708 AB 939 Fee 362,140 5,226 4,097 1,823 - - - - - -
Total Pass-Through Services 1,877,182 341,766 267,905 119,216 462,296 367,397 275,149 261,744 133,111 30,708 14,999,432 3,901,203 3,058,090 1,360,825 4,559,552 3,623,582 2,713,750 2,581,537 1,312,853 302,866 641,302 188,392 170,609 65,715 227,094 180,477 135,161 111,295 65,388 15,085 15,640,734 4,089,595 3,228,699 1,426,540 4,786,646 3,804,059 2,848,911 2,692,832 1,378,241 317,951 (1,205,008) (412,401) (346,206) (143,854) (165,030) (131,153) (98,222) (76,155) (47,518) (10,962)
8.36% 11.22% 12.01% 11.22% 3.57% 3.57% 3.57% 2.91% 3.57% 3.57% Grossing up for Franchise Fees 9.29% 12.47% 12.78% 12.47% 3.97% 3.97% 3.97% 3.23% 3.76% 3.97% Category
Calculated Adjustment to Rate Revenues
Attachment 1: Summary of Waste Connections' Original 2025 Rate Application Calculations Total Compensation for Services
Allowed Operating Margin
Total Revenue Requirement
Surplus (Shortfall)
Collection Services
Post-Collection & Affiliated
Party Services
Pass-Through Services
San Luis Garbage
Company (SLG)
Mission Country Disposal (MCD) South County Sanitary Service (SCSS) Total Current Revenues
Current Revenues
San Luis Obispo Los Osos Cambria Cayucos Arroyo Grande Pismo Beach Grover Beach Nipomo Oceano Avila Single Family Residential $ 5,282,964 $ 2,795,167 $ 2,201,010 $ 987,376 $ 2,379,516 $ 1,598,158 $ 1,580,148 $ 1,570,029 $ 684,117 $ 91,446 Multi-Family Dumpsters 2,556,077 - - - - - - - - -
Non-Residential Carts 729,282 100,710 77,805 33,710 256,857 237,767 134,053 119,843 74,076 24,711 Non-Residential Dumpsters 5,846,777 776,244 599,701 259,830 1,979,781 1,832,640 1,033,238 923,712 570,958 190,469 Total Rate Revenue 14,415,100 3,672,121 2,878,516 1,280,916 4,616,153 3,668,565 2,747,439 2,613,584 1,329,152 306,626 Other Income (Allocated) 20,626 5,073 3,977 1,770 5,462 4,341 3,251 3,092 1,573 363 14,435,726 3,677,194 2,882,493 1,282,686 4,621,615 3,672,905 2,750,689 2,616,676 1,330,724 306,989 Labor 3,658,710 1,042,706 817,360 363,719 1,113,222 884,704 662,567 630,287 320,536 73,945 Depreciation 1,125,720 317,545 248,918 110,766 336,460 267,393 200,254 190,498 96,879 22,349 Insurance 1,124,499 316,418 248,035 110,374 329,978 262,241 196,396 186,828 95,012 21,919 Other G&A 1,024,196 300,498 234,604 105,132 324,904 255,456 195,836 186,666 94,246 20,789 Fuel 754,387 321,408 251,946 112,114 254,951 202,616 151,742 144,349 73,409 16,935 Maintenance 421,167 116,487 91,312 40,633 117,431 93,326 69,893 66,488 33,813 7,800 Corporate Overhead 430,378 80,753 63,301 28,168 163,600 130,017 97,371 92,627 47,106 10,867 Total Collection Services 8,539,055 2,495,814 1,955,476 870,906 2,640,547 2,095,751 1,574,059 1,497,742 761,000 174,605 Garbage Landfilling 2,408,278 349,264 273,782 121,831 508,314 403,969 302,538 287,798 146,361 33,765 Organics Processing 1,108,784 477,019 373,927 166,395 660,852 525,194 393,325 374,162 190,282 43,897 Recyclables Processing 916,880 173,112 135,700 60,385 270,385 214,881 160,927 153,087 77,853 17,960 Affiliated Party Costs 168,154 57,121 44,776 19,925 46,128 36,659 27,455 26,117 13,282 3,064 Total Post-Collection & Affiliated Party Services 4,602,096 1,056,516 828,185 368,536 1,485,678 1,180,703 884,245 841,164 427,779 98,686 Franchise Fee 1,586,412 336,540 263,809 117,393 462,296 367,397 275,149 261,744 133,111 30,708 AB 939 Fee 368,041 - - 12,754 - - - - - -
Total Pass-Through Services 1,954,453 336,540 263,809 130,147 462,296 367,397 275,149 261,744 133,111 30,708 15,095,604 3,888,870 3,047,470 1,369,589 4,588,521 3,643,852 2,733,452 2,600,650 1,321,890 303,998 768,515 224,623 175,993 78,382 237,649 188,618 141,665 134,797 68,490 15,714 15,864,119 4,113,493 3,223,463 1,447,971 4,826,170 3,832,470 2,875,117 2,735,447 1,390,380 319,712 (1,428,393) (436,299) (340,970) (165,285) (204,555) (159,564) (124,428) (118,771) (59,655) (12,724)
9.89% 11.86% 11.83% 12.89% 4.43% 4.34% 4.52% 4.54% 4.48% 4.14%
13.18% 12.59% 14.32% 4.92% 4.82% 5.02% 5.04% 4.98% 4.60%
9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0%
10.0% 10.0% 6.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% Change to Original Rate Application 0.60% 0.71% -0.19% 1.85% 0.95% 0.85% 1.05% 1.81% 1.22% 0.63% Franchise Fee
Allowed Operating Margin
Total Revenue Requirement
Surplus (Shortfall)
Calculated Adjustment to Rate Revenues
Grossing up for Franchise Fees
Profit Margin on Collection Services (2025)
Total Compensation for Services
Attachment 2: Summary of Revised 2025 Rate Application Calculations Category
San Luis Garbage
Company (SLG)
Mission Country Disposal (MCD) South County Sanitary Service (SCSS) Current Revenues
Total Current Revenues
Collection Services
Post-Collection & Affiliated
Party Services
Pass-Through Services
Bureau of Labor Statistics
ATTACHMENT 3
Series Id:
Series Title:
Area:
Item:
Base Period:
Years:
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec HALF1 HALF2 Annual Change 2014 422.440 422.483 423.413 425.393 425.242 425.930 426.562 426.771 427.327 427.995 427.808 428.187 2015 427.734 429.248 429.235 429.807 431.234 430.813 431.229 432.967 433.843 434.829 436.428 436.996 1.46% 2016 437.205 438.296 437.699 437.676 438.317 437.858 438.607 439.358 439.707 440.311 443.343 444.745 1.71% 2017 446.266 447.699 446.987 447.129 447.272 448.046 448.328 448.717 449.008 452.196 453.820 453.596 2.20% 2018 453.354 454.915 455.230 458.722 462.887 465.041 465.579 470.457 471.026 472.535 486.650 485.935 458.358 475.364 3.96% 2019 475.687 477.474 478.569 479.449 480.865 480.984 482.138 483.987 484.346 486.133 486.485 486.708 478.838 484.966 3.22% 2020 491.003 494.429 495.288 494.432 494.946 496.679 498.564 500.882 501.756 503.315 504.970 508.190 494.463 502.946 3.49% 2021 512.722 517.270 518.505 518.579 516.440 517.202 521.185 524.408 529.934 530.114 529.053 532.538 516.786 527.872 4.74% 2022 533.078 538.313 540.719 542.564 544.546 547.554 548.187 548.706 558.254 561.090 563.816 565.185 541.129 557.540 5.17% 2023 570.412 575.697 576.773 580.124 587.431 589.812 596.167 597.347 596.997 597.569 601.631 602.164 580.042 598.646 7.28% 2024 606.773 610.551 610.015 611.073 609.538 611.946 614.089 615.880 609.983 3.71% 10-Year Average
3.69%
U.S. city average
Garbage and trash collection
DECEMBER 1983=100
2014 to 2024
Consumer Price Index for All Urban Consumers (CPI-U)
Original Data Value
CUUR0000SEHG02
Not Seasonally Adjusted
Garbage and trash collection in U.S. city average, all
b t ll dj t d
Source: Bureau of Labor Statistics Page 85 of 221 Generated on: October 8, 2024 (04:11:38 PM) 5% 5% 5% 5%
2025 2025 2026 2027 2028 2029
Collection Services $ 8,539,055 $ 8,539,055 $ 8,966,008 $ 9,414,308 $ 9,885,024 $ 10,379,275 Profit Allowance 768,515 768,515 896,601 941,431 988,502 1,037,927 Post-Collection Services 4,602,096 4,602,096 4,832,201 5,073,811 5,327,501 5,593,876 Franchise Fee 1,586,412 1,586,412 1,675,695 1,777,106 1,866,072 1,959,572 AB 939 Fee 368,041 368,041 386,443 405,765 426,053 447,356 Revenue Reconciliation Example N/A N/A N/A 158,641 167,569 177,711 Total Revenues 15,864,119 15,864,119 16,756,947 17,771,062 18,660,722 19,595,717 Indexed Rate Adjustment 5.63% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (158,641) (167,569) (177,711) (186,607) (195,957) 2025 2025 2026 2027 2028 2029
Collection Services $ 2,640,547 $ 2,640,547 $ 2,772,575 $ 2,911,203 $ 3,056,763 $ 3,209,602 Profit Allowance 237,649 237,649 277,257 291,120 305,676 320,960 Post-Collection Services 1,485,678 1,485,678 1,559,962 1,637,960 1,719,858 1,805,851 Franchise Fee 462,296 484,875 512,199 543,197 570,391 598,970 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 48,487 51,220 54,320 Total Revenues 4,826,170 4,848,749 5,121,993 5,431,968 5,703,909 5,989,703 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (48,487) (51,220) (54,320) (57,039) (59,897) 2025 2025 2026 2027 2028 2029
Collection Services $ 2,495,814 $ 2,495,814 $ 2,620,605 $ 2,751,635 $ 2,889,217 $ 3,033,677 Profit Allowance 224,623 224,623 262,060 275,163 288,922 303,368 Post-Collection Services 1,056,516 1,056,516 1,109,341 1,164,808 1,223,049 1,284,201 Franchise Fee 336,540 419,661 443,556 470,397 493,949 518,698 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 41,966 44,356 47,040 Total Revenues 4,113,493 4,196,613 4,435,563 4,703,970 4,939,492 5,186,984 Indexed Rate Adjustment 5.69% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (41,966) (44,356) (47,040) (49,395) (51,870) 2025 2025 2026 2027 2028 2029
Collection Services $ 2,095,751 $ 2,095,751 $ 2,200,539 $ 2,310,566 $ 2,426,094 $ 2,547,399 Profit Allowance 188,618 188,618 220,054 231,057 242,609 254,740 Post-Collection Services 1,180,703 1,180,703 1,239,738 1,301,725 1,366,811 1,435,152 Franchise Fee 367,397 385,008 406,703 431,316 452,909 475,602 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 38,501 40,670 43,132 Total Revenues 3,832,470 3,850,080 4,067,035 4,313,165 4,529,095 4,756,025 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (38,501) (40,670) (43,132) (45,291) (47,560) Example CPI
San Luis Obispo
Attachment 4 - Indexed Rate Adjustment Methodology Example Calculations Arroyo Grande
Los Osos CSD
Pismo Beach
2025 2025 2026 2027 2028 2029
Collection Services $ 1,955,476 $ 1,955,476 $ 2,053,250 $ 2,155,912 $ 2,263,708 $ 2,376,894 Profit Allowance 175,993 175,993 205,325 215,591 226,371 237,689 Post-Collection Services 828,185 828,185 869,595 913,074 958,728 1,006,664 Franchise Fee 263,809 188,914 199,670 211,664 222,261 233,395 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 31,486 33,278 35,277 Total Revenues 3,223,463 3,148,569 3,327,840 3,527,727 3,704,346 3,889,920 Indexed Rate Adjustment 5.69% 6.01% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (31,486) (33,278) (35,277) (37,043) (38,899) 2025 2025 2026 2027 2028 2029
Collection Services $ 1,574,059 $ 1,574,059 $ 1,652,762 $ 1,735,400 $ 1,822,170 $ 1,913,278 Profit Allowance 141,665 141,665 165,276 173,540 182,217 191,328 Post-Collection Services 884,245 884,245 928,457 974,880 1,023,624 1,074,805 Franchise Fee 275,149 288,885 305,166 323,634 339,836 356,864 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 28,889 30,517 32,363 Total Revenues 2,875,117 2,888,854 3,051,661 3,236,343 3,398,364 3,568,639 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (28,889) (30,517) (32,363) (33,984) (35,686) 2025 2025 2026 2027 2028 2029
Collection Services $ 1,497,742 $ 1,497,742 $ 1,572,629 $ 1,651,261 $ 1,733,824 $ 1,820,515 Profit Allowance 134,797 134,797 157,263 165,126 173,382 182,051 Post-Collection Services 841,164 841,164 883,223 927,384 973,753 1,022,441 Franchise Fee 261,744 274,856 290,346 307,917 323,333 339,533 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 27,486 29,035 30,792 Total Revenues 2,735,447 2,748,559 2,903,461 3,079,173 3,233,326 3,395,332 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (27,486) (29,035) (30,792) (32,333) (33,953) 2025 2025 2026 2027 2028 2029
Collection Services $ 761,000 $ 761,000 $ 799,050 $ 839,002 $ 880,953 $ 925,000 Profit Allowance 68,490 68,490 79,905 83,900 88,095 92,500 Post-Collection Services 427,779 427,779 449,168 471,626 495,207 519,968 Franchise Fee 133,111 139,697 147,569 156,500 164,335 172,569 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 13,970 14,757 15,650 Total Revenues 1,390,380 1,396,966 1,475,692 1,564,998 1,643,347 1,725,686 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (13,970) (14,757) (15,650) (16,433) (17,257) Cambria CSD
Grover Beach
Nipomo CSD
Oceano CSD
2025 2025 2026 2027 2028 2029
Collection Services $ 870,906 $ 870,906 $ 914,452 $ 960,174 $ 1,008,183 $ 1,058,592 Profit Allowance 78,382 78,382 91,445 96,017 100,818 105,859 Post-Collection Services 368,536 368,536 386,962 406,311 426,626 447,957 Franchise Fee 117,393 147,842 156,250 165,705 174,002 182,720 AB 939 Fee 12,754 12,754 13,392 14,061 14,764 15,503
Revenue Reconciliation Example N/A N/A N/A 14,784 15,625 16,571 Total Revenues 1,447,971 1,478,420 1,562,501 1,657,053 1,740,019 1,827,202 Indexed Rate Adjustment 5.69% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (14,784) (15,625) (16,571) (17,400) (18,272) 2025 2025 2026 2027 2028 2029
Collection Services $ 174,605 $ 174,605 $ 183,335 $ 192,502 $ 202,127 $ 212,234 Profit Allowance 15,714 15,714 18,334 19,250 20,213 21,223 Post-Collection Services 98,686 98,686 103,620 108,801 114,241 119,953 Franchise Fee 30,708 32,112 33,921 35,974 37,775 39,667 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 3,211 3,392 3,597 Total Revenues 319,712 321,117 339,210 359,738 377,748 396,675 Indexed Rate Adjustment 5.63% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (3,211) (3,392) (3,597) (3,777) (3,967) 2025 2025 2026 2027 2028 2029
Collection Services $ 22,604,956 $ 22,604,956 $ 23,735,204 $ 24,921,964 $ 26,168,062 $ 27,476,465 Profit Allowance 2,034,446 2,034,446 2,373,520 2,492,196 2,616,806 2,747,647 Post-Collection Services 11,773,587 11,773,587 12,362,266 12,980,380 13,629,399 14,310,869 Franchise Fee 3,834,558 3,948,262 4,171,077 4,423,411 4,644,863 4,877,591 AB 939 Fee 380,795 380,795 399,835 419,826 440,818 462,859 Revenue Reconciliation Example N/A N/A N/A 407,420 430,419 456,452 Total Revenues 40,628,342 40,742,046 43,041,902 45,645,198 47,930,367 50,331,883 Indexed Rate Adjustment 5.65% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (407,420) (430,419) (456,452) (479,304) (503,319) Cayucos SD
Avila Beach CSD
Total
Item 9.e.
MEMORANDUM
TO: City Council
FROM: Matthew Downing, City Manager
BY: Aleah Bergam, Management Analyst
SUBJECT: Opposition to Proposition 43, Limiting Voters’ Ability to Raise Revenues for Local Government Services
DATE: October 13, 2026
RECOMMENDATION:
Adopt a Resolution opposing Proposition 43, a constitutional amendment on the November 2026 statewide ballot to limit voters’ ability to raise revenues for local government services.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Proposition 43 would not directly reduce or eliminate existing City revenues. Current real property transfer taxes, parcel taxes, and other voter-initiated special taxes would remain in effect. Its fiscal effects would instead arise when future voter-initiated special taxes receive majority support but fall short of the new two-thirds threshold.
BACKGROUND:
Proposition 43 is a California Constitutional Amendment that would add Section 4.5 to Article XIII A of the California Constitution and make the following changes to local taxation authority:
Two-Thirds Requirement for All Local Special Taxes
Beginning January 1, 2027, a local government, including the electorate of a local government exercising the initiative power, could not impose, extend, or increase a special tax unless the tax is submitted to the electorate and approved by a two-thirds vote.
Local government-sponsored special taxes are already subject to two-thirds voter approval under Article XIII C. Proposition 43 would extend that same threshold to special taxes proposed through the voter initiative process, reversing the current judicial interpretation that permits those measures to pass with a simple majority.
Item 9.e.
City Council
Opposition to Proposition 43, Limiting Voters’ Ability to Raise Revenues for Local Government Services
October 13, 2026
Ad Valorem Property Tax Limitation
Proposition 43 would prohibit a local government, including its electorate acting through the initiative power, from imposing an ad valorem tax on real property except as authorized by paragraph (1) of subdivision (a) of Section 3 of Article XIII D of the California Constitution. This provision clarifies that the existing constitutional limitation applies to both local governing bodies and local voters acting by initiative.
Prospective Application
The measure would operate prospectively, applying to voter-proposed ballot measures approved on or after January 1, 2027.
Proposition 13 and Local Tax Approval Requirements
California's modern local tax framework largely stems from Proposition 13, approved by voters in 19781. Proposition 13 limited property tax rates and established voter approval requirements for local taxes. Specifically, it capped the general ad valorem property tax rate at 1 percent of assessed value, limited annual increases in assessed value, and required two-thirds voter approval for cities, counties, and special districts to impose special taxes.
Proposition 218, approved by voters in 1996, added Articles XIII C and XIII D to the California Constitution. Under Article XIII C, local governments may not impose, extend, or increase a special tax without approval by two-thirds of voters. A special tax is defined as any tax imposed for a specific purpose rather than for general governmental use.
Article XIII C also classifies local taxes as either general or special. General taxes used for general governmental purposes generally require majority voter approval, otherwise known as “50%+1.” When proposed by a local governing body, a general tax must generally appear on the ballot at a regularly scheduled general election for members of that governing body, unless an emergency is declared by a unanimous vote.
Article XIII C also expressly preserves the voters' initiative power. More broadly, Article II of the California Constitution reserves the initiative power to the people, and courts have traditionally construed that power broadly.
ACA 13 (Ward)
In 2023, the League of California Cities supported ACA 13, a constitutional amendment dealing with voter thresholds. The measure would have required any state or local initiative measure to conform with any increased voter threshold that it seeks to impose on future ballot measures. For example, if a measure looks to increase the voter threshold
1 California Proposition 43, Two-Thirds Vote Requirement for Local Special Tax Initiatives and Property Tax Initiative Prohibition Amendment (2026) - Ballotpedia
Item 9.e.
City Council
Opposition to Proposition 43, Limiting Voters’ Ability to Raise Revenues for Local Government Services
October 13, 2026
of general tax measures from a simple majority (50% +1) to a supermajority (2/3), the measure would be required to pass by that same supermajority.
The measure would have also preserved the right of local governments to place advisory questions on the ballot to ask voters their opinion on the issue.
ACA 13 also stated that the provisions of this constitutional amendment apply to all statewide initiative measures submitted to voters on or after January 1, 2024. It contained intent language stating that the provisions of this measure are not intended to reverse or invalidate provisions of the California Constitution in effect before January 1, 2024, including the provisions of Proposition 13 of 1978.
ACA 13 was originally scheduled to be on the March 2024 ballot, but was subsequently moved to the November 2024 ballot, and then again to the November 2026 ballot.
The 2026 Ballot Agreement
ACA 22, the legislation to place Proposition 43 on the November ballot, is the product of an agreement between state leaders and the Howard Jarvis Taxpayers Association (HJTA). In exchange for the Legislature passing ACA 22 and removing ACA 13 from the November ballot, HJTA withdrew its Local Taxpayer Protection Act to Save Proposition 13 (Initiative 25-0006A12). The proposal included a two-thirds requirement for all local special taxes, restrictions on real property transfer taxes, and the invalidation of certain existing taxes. The League of California Cities opposed the measure based on its effects on existing voter-approved revenues, local taxation authority, and essential local services.
The California Legislature’s Analyst Office has provided an analysis of the measure.3 ANALYSIS OF ISSUES:
Proposition 43 would operate prospectively and would not repeal or reduce existing real property transfer taxes, invalidate existing voter-approved special taxes, limit documentary transfer tax rates, or create a deadline for local governments to eliminate existing taxes. The result is a new constitutional restriction on future local revenue measures by requiring two-thirds approval for voter-initiated special taxes that may pass by majority vote under current law.
Opposing Proposition 43 aligns with the City’s adopted legislative platform, specifically Item 4.4: Oppose legislation that would confiscate, shift, borrow, or divert local revenues.
2 https://oag.ca.gov/system/files/initiatives/pdfs/Title%20and%20Summary%20%2825-0006A1%29.pdf 3 https://lao.ca.gov/BallotAnalysis/Proposition?number=43&year=2026
Item 9.e.
City Council
Opposition to Proposition 43, Limiting Voters’ Ability to Raise Revenues for Local Government Services
October 13, 2026
Existing voter-initiated special taxes illustrate the potential scale of revenue that could be affected if comparable measures are proposed after January 1, 2027. Examples of existing taxes that passed with less than two-thirds support include:
Los Angeles Measure ULA: approximately $655 million to $1.2 billion annually.
Santa Monica Measure GS: approximately $54 million annually. Oakland Measure AA: approximately $30 million to $36 million annually. Berkeley Measure FF: approximately $15 million annually.
Proposition 43 would not invalidate or reduce revenue from these existing measures.
However, a future measure with the same level of voter support would not take effect unless it received two-thirds approval. These examples are therefore illustrative of the type and magnitude of future locally dedicated revenue that could be foregone, not an estimate of an immediate revenue loss under the measure.
Additionally, Proposition 43 may also influence how future revenue measures are structured. Communities may favor general taxes, which remain subject to majority approval, over special taxes dedicated to specific purposes. Although this may preserve a path to revenue, it would prevent voters from legally restricting the funds to the program identified in the measure and could place additional demands on a city's general fund given the higher voter threshold.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Staff’s recommendation; or
2. Provide other direction to staff.
ADVANTAGES:
Opposing Proposition 43 would preserve local fiscal flexibility by allowing certain voterproposed special taxes to continue being approved by a majority vote instead of a twothirds vote. This would help ensure local communities retain the ability to fund essential services and address future community needs when supported by a majority of voters.
DISADVANTAGES:
The City of Arroyo Grande has not traditionally taken a position on matters of statewide concern. However, with the adoption of the first Legislative Platform earlier this year, the intent of having a larger voice in matters of statewide concern is supported by this action.
ENVIRONMENTAL REVIEW:
Adopting a resolution opposing Proposition 43, 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.) Alternatively, adopting a resolution
Item 9.e.
City Council
Opposition to Proposition 43, Limiting Voters’ Ability to Raise Revenues for Local Government Services
October 13, 2026
opposing Proposition 43 is exempt from CEQA on the basis that it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. (State CEQA Guidelines, § 15061, subd. (b)(3).) 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, CALIFORNIA OPPOSING PROPOSITION 43, A
CONSTITUTIONAL AMENDMENT ON THE NOVEMBER 2026
STATEWIDE BALLOT TO LIMIT VOTERS’ ABILITY TO RAISE
REVENUES FOR LOCAL GOVERNMENT SERVICES
WHEREAS, communities across California have been coming together to pass local ballot measures to provide critical funding for fire and wildfire prevention, local roads, libraries and parks as well as housing and alleviating homelessness; and WHEREAS, Proposition 43 on the November 3, 2026 statewide ballot, limits voters’ ability to raise revenues to fund local services; and
WHEREAS, beginning January 1, 2027, Proposition 43 would raise the percentage of votes needed to approve any new, increased, or extended local special taxes proposed by the voters; and
WHEREAS, under Proposition 43, when voters place measures on the ballot to fund specific local services, opponents would only need one-third (33.4%) of the vote to block it; and
WHEREAS, if Proposition 43 had been the law, California communities would not have been able to raise nearly $3 billion in revenue every year that funds firefighters and 911 response, childcare, homelessness solutions, street repairs, parks and libraries; and WHEREAS, Proposition 43 does not cut taxes. It limits local voters’ power to raise revenue to fund local services; and
WHEREAS, the measure is opposed by a broad coalition of local governments, including the League of California Cities, nurses, teachers and school employees, firefighters, and law enforcement; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande does hereby direct staff to email a copy of this Resolution to the League of California Cities at [email protected].
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 th day of , 2026.
ATTACHMENT 1
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
Item 9.f.
MEMORANDUM
TO: City Council
FROM: Bill Robeson, Assistant City Manager/Public Works Director BY: Theresa Wren, Capital Improvement Projects Manager
SUBJECT: Notice of Acceptance, Rebid Roof Repairs
DATE: October 13, 2026
RECOMMENDATION:
1) Adopt the Resolution accepting the Rebid Roof Repairs on City Structures Project, directing staff to file a Notice of Completion, and release of retention thirty-five days after the Notice of Completion has been recorded, if no liens have been filed; and 2) Determine 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.)
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
On May 13, 20251, the City Council approved the 10-Year CIP including $370,000 allocated for Roof Repairs on seven City structures: City Hall including repairs of the balcony and siding, Old City Hall, Council Chamber, Elm St. Restroom (Jaycee Building), Police Station, Women’s Club, and Fire Station 1. At its June 9, 20262, meeting, the City Council awarded construction contracts to KRGS Roofing, Inc. to complete the Rebid Roof Repairs Project and to BC Construction and Electric for the City Hall Balcony and Exterior Rehabilitation Project. The Rebid Roof Repairs Project has been substantially completed within budget and authorized contingency. The City Hall Balcony and Exterior Rehabilitation Project is still under construction.
Contract KRGS Roofing, Inc. (Roof Repairs) $117,000
Unforeseen Field Changes (Contingency) $ 6,460
Construction Cost Roof Repairs $123,460
1 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=14506 2https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=11328fe3-9baa-480b-94c4- 57c04b3d7ed8&lang=English&Agenda=Agenda&Item=46&Tab=attachments
Item 9.f.
City Council
Notice of Acceptance, Rebid Roof Repairs
October 13, 2026
BACKGROUND:
Staff contracted Wick’s Roofing to assess the roofs at these seven locations: Old City Hall, Council Chamber, Elm St. Restroom (Jaycee Building), City Hall, Fire Station 1, Police Station, and the Woman’s Club. The project was originally advertised in September 2025, but the bids received were significantly over budget. Accordingly, all bids were rejected on October 14, 20253. Council directed staff to solicit quotes for minor repairs on four City facilities (City Hall, Fire Station 1, Police Station, Women’s Club), which were completed in February 2026.
Staff advertised Rebid Roof Repairs Project for removal and replacement of the roof at two City facilities: 214 E. Branch Street (Old City Hall/REMAX) and 215 E. Branch Street (City Council Chambers). Four bids were received by the bid opening date of May 22, 2026.
At its June 9, 20264 meeting, the City Council awarded a construction contract to KRGS Roofing, Inc. to complete the Rebid Roof Repairs Project.
ANALYSIS OF ISSUES:
The Rebid Roof Repairs Project was completed to the satisfaction of Engineering staff and the Building Official. Final inspection was signed off on September 11, 2026. Staff are awaiting receipt of manufacturer’s warranty documentation.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Approve staff’s recommendation;
2. Do not approve staff’s recommendation and request further information;
3. Provide other direction to staff.
ADVANTAGES:
The project was completed, and accepting the improvements will allow staff to file the Notice of Completion and close out the project.
DISADVANTAGES:
No disadvantages to accepting this project have been identified.
ENVIRONMENTAL REVIEW:
These actions are 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.)
3https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=290d7d89-520f-4257-a4f2- d8f615e2f4d4&lang=English&Agenda=Agenda&Item=60&Tab=attachments 4https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=11328fe3-9baa-480b-94c4- 57c04b3d7ed8&lang=English&Agenda=Agenda&Item=46&Tab=attachments
Item 9.f.
City Council
Notice of Acceptance, Rebid Roof Repairs
October 13, 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. Notice of Completion
ATTACHMENT 1
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE ACCEPTING THE REBID ROOF
REPAIRS OF CITY STRUCTURES PROJECT,
DIRECTING STAFF TO FILE THE NOTICE OF
COMPLETION AND RELEASE THE RETENTION
THIRTY-FIVE DAYS AFTER THE NOTICE OF
COMPLETION HAS BEEN RECORDED IF NO LIENS
HAVE BEEN FILED.
WHEREAS, the construction project known as the Rebid Roof Repairs of City Structures Project (PW 2025-08) has been completed in accordance with applicable contracts as of September 11, 2026; and
WHEREAS, it is in the best interest of the City of Arroyo Grande to formally acknowledge the completion of this project and to record a Notice of Completion.
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. Accepts the Rebid Roof Repairs of City Structures Project (PW 2025-08)
3. Authorizes staff to file the Notice of Completion with the San Luis Obispo County Recorder’s Office.
4. Authorizes release of the retention payment thirty-five days after the Notice of Completion has been recorded, if no liens have been filed.
BE IT FURTHER RESOLVED, that the City Council finds that the acceptance of the completed improvements, recordation of the Notice of Completion, and release of retention 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.)
On motion of to wit: , seconded by , and on the following roll call vote,
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this 13th day of October, 2026.
ATTACHMENT 1
RESOLUTION NO.
PAGE2
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
ATTACHMENT 2
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
CITY CLERK
CITY OF ARROYO GRANDE
300 EAST BRANCH STREET
ARROYO GRANDE, CA 93420
NOTICE OF COMPLETION
NOTICE IS HEREBY GIVEN THAT:
1. The undersigned is owner or agent of owner of the interest or estate or the property hereinafter described as stated below.
2. The FULL NAME of the OWNER is: The City of Arroyo Grande
3. The FULL ADDRESS of the OWNER is: 300 East Branch Street, Arroyo Grande, California 93420
4. The NATURE OF THE INTEREST or ESTATE of the undersigned is: in fee
5. THE FULL NAME and FULL ADDRESS of ALL PERSONS, if any, who hold such interest or estate with the undersigned as JOINT TENANTS or as TENANTS IN COMMON are:
NAMES ADDRESSES
None
6. THE FULL NAMES and FULL ADDRESSES of the PREDECESSOR’S in interest of the undersigned if the property was transferred subsequent to the commencement of the work of improvements herein referred to:
NAMES ADDRESSES
None
7. All work of improvement on the property hereinafter described was COMPLETED September 11, 2026
8. The NAME OF THE ORIGINAL CONTRACTOR, if any, for such work of improvement is:
KRGS Roofing, Inc.
9. The street address of said property is: 214 and 215 East Branch Street, Arroyo Grande, CA 93420
10. The property on which said work of improvement was completed is in the City of Arroyo Grande, County of San Luis Obispo, State of California, and is described as follows: Rebid Roof Repairs on City Structures Verification of NON-INDIVIDUAL owner: I, the undersigned, declare under penalty of perjury under the laws of the State of California that I am the Public Works Director of the aforesaid interest or estate in the property described in the above notice; that I have read the said notice, that I know and understand the contents thereof, and the facts stated therein are true and correct. _________________________________________________
Bill Robeson, Assistant City Manager/Public Works Director October 13, 2026, Arroyo Grande, California
-- END OF DOCUMENT --
Item 9.g.
MEMORANDUM
TO: City Council
FROM: Bill Robeson, Assistant City Manager/Public Works Director BY: Mike Robles, Public Works Manager
SUBJECT: Purchase of Replacement Dump Truck and Surplus Vehicles DATE: October 13, 2026
RECOMMENDATION:
1) Adopt a Resolution approving the purchase of a dump truck through the Sourcewell Cooperative Purchasing Program;
2) Adopt a Resolution declaring specified existing equipment as surplus and authorizing the sale or disposal thereof; and
3) Determine that adopting the Resolutions are 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)(4)-(5).)
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The dump truck purchase cost totals $136,660.31. Approximately ten (10) hours of staff time were required to specify and obtain price quotes. The Fiscal Year 2026-27 budget includes $140,000 for a replacement vehicle.
Section 4.6 subsection 3 of the City’s Purchasing Policy permits the use of regional or national purchasing cooperatives, such as Sourcewell, provided that the City is a registered member of the cooperative. The proposed purchase resolution is included as Attachment 1. The Gibbs dump truck quote is included as Attachment 2.
BACKGROUND:
The Public Works Department operates 40 vehicles and other equipment. The vehicle pool is assessed annually. As vehicles age, they become less reliable, require more frequent repairs, and some become noncompliant with California State emissions requirements.
Item 9.g.
City Council
Purchase of Replacement Dump Truck and Surplus Vehicles October 13, 2026
The 1998 International 4700 dump truck has reached the end of its useful life.
ANALYSIS OF ISSUES:
The dump truck is a critical piece of Public Works equipment. It is used to operate and maintain public infrastructure including streets, sidewalks, trees, and drainage facilities.
A nonfunctioning dump truck can delay maintenance and pose public safety risks. The typical service life of a dump truck is 10-12 years. The existing 28-year-old dump truck has exceeded its standard service life.
Government Code Section 37350 authorizes the City Council to control and dispose of property for the common benefit. Replacement equipment has been or will be purchased to replace the equipment listed below. These vehicles are surplus; therefore, sale or disposal is appropriate and will benefit the City. The proposed surplus resolution is included as Attachment 3.
Make, Model & Year Purpose VIN
International 4700, 1998 Dump Truck 1HTSCABL0WH529748
Ford Escape, 2007 Staff transportation 1FMCU59H38KA95320 Ford F-250, 2013 Utilities Service Truck 1FTBFZA61EEA74088 Ford F-450, 2008 Utilities Service Truck 1FDAF46R49EA25818 Dodge Ram 1500, 2016 Street Service Truck 1C6RR7XT8GS188505 Honda Ruckus, 2021 Meter Reading vehicle JH2AF5814NK902523 ALTERNATIVES:
1. Staff’s recommendation;
2. Modify purchase and/or surplus;
3. Do not authorize purchase and/or surplus as presented; or
4. Provide other directions for staff.
ADVANTAGES:
Declaring older vehicles as surplus augments the replacement budget, and purchasing replacement equipment allows staff to operate and maintain public infrastructure efficiently and meet regulatory requirements. Purchasing the dump truck now makes it more likely that the vehicle will be available during what is anticipated to be a stormy El Niño winter.
DISADVANTAGES:
Not purchasing this dump truck will significantly reduce the Public Works Division's ability to repair and maintain the City’s public infrastructure, including streets, sidewalks, trees, and storm drainage. The current dump truck and other listed vehicles will be expensive to repair and will likely continue to have mechanical issues, further reducing reliability.
Item 9.g.
City Council
Purchase of Replacement Dump Truck and Surplus Vehicles October 13, 2026
ENVIRONMENTAL REVIEW:
No environmental review is required for this item. Approval of the purchase of the dump truck and authorization to surplus the listed City vehicles and equipment are not projects under the California Environmental Quality Act (“CEQA”) because such actions constitutes an organizational, fiscal, and administrative activity of a government that will not result in a direct or indirect physical change in the environment. (State CEQA Guidelines § 15378(b)(4)-(5).)
The Resolutions authorize the purchase of municipal equipment for continued Public Works operations and the disposition of existing surplus vehicles and equipment that have reached the end of their useful life or are no longer needed for City operations.
These actions do not authorize any construction or commit the City to any activity that may result in a physical change in the environment. Accordingly, the actions are not subject to CEQA.
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 - Vehicle Purchase
2. Dump Truck Quote
3. Resolution - Surplus of Vehicle/Equipment
65501.00014\44272638.2
ATTACHMENT 1
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE
APPROVING THE PURCHASE OF A DUMP TRUCK THROUGH THE
SOURCEWELL COOPERATIVE PURCHASING PROGRAM
WHEREAS, the City of Arroyo Grande (“City”) owns and operates public works infrastructure, including streets, sidewalks, trees, and drainage facilities; and WHEREAS, the City’s existing dump truck has exceeded its anticipated service life and is a critical piece of equipment used to operate and maintain public works infrastructure; and WHEREAS, Section 3.08.070(C)(3) of the Arroyo Grande Municipal Code and Section 4.6, subsection 3, of the City’s Purchasing Policy authorize the use of cooperative purchasing agreements, including contracts awarded through Sourcewell; and WHEREAS, Gibbs International Trucks, Inc.’s parent company, Navistar, Inc., is an authorized dealer under Sourcewell Contract No. 032824-NVS and has provided a quotation for one (1) new 2026 International MV607 Chassis truck (the “Equipment”) in the amount of $136,660.31, including applicable sales tax; and
WHEREAS, City staff has determined that procurement of the Equipment through the Sourcewell cooperative purchasing program provides a competitive and cost-effective method for acquiring the Equipment; and
WHEREAS, the City Council desires to authorize the City Manager to execute all agreements and documents necessary to complete the purchase of the dump truck, subject to review and approval as to form by the City Attorney; and
WHEREAS, the City Council considered the purchase at its regular meeting on October 13, 2026; and
WHEREAS, all legal prerequisites to the adoption of this Resolution have occurred.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande that:
1. Recitals. All recitals above are true and correct and incorporated herein.
2. CEQA. The City Council of the City of Arroyo Grande finds that approval of the purchase of municipal equipment is not a project under the California Environmental Quality Act (“CEQA”) because it constitutes an organizational, fiscal, or administrative activity of government that will not result in a direct or indirect physical change in the environment pursuant to State CEQA Guidelines sections 15378(b)(4)-(5). This Resolution authorizes the purchase of municipal equipment for continued Public Works operations and does not
RESOLUTION NO.
PAGE 2
authorize any construction or commit the City to any activity that may result in a physical change in the environment.
3. Approval of Purchase. The City Council hereby approves the purchase of the Equipment from Gibbs International Trucks, Inc. through the Sourcewell cooperative purchasing program in an amount not to exceed One Hundred Thirty-Six Thousand Six Hundred Sixty Dollars and Thirty-One Cents ($136,660.31). The City Manager, or City Manager’s designee, is hereby authorized and directed to execute a purchase agreement or purchase order with Gibbs International Trucks, Inc. and any incidental or necessary documents thereto to effectuate the acquisition of the Equipment. The City Manager is authorized to execute such documents subject to such minor, technical, non-substantive, or clarifying revisions as may be approved by the City Manager in consultation with the City Attorney.
4. Effective Date. This Resolution shall take effect immediately upon 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 13th day of October, 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
PROPOSAL PREPARED FOR: PROPOSAL PREPARED BY:
Proposal Number
Date 9/30/2026
Quantity of this Specification 1
Single Sourcewell Transaction Total Volume 1
$ 146,887.00
$ 113,929.00
$ 32,958.00
30.3% $ (44,534.88)
$ -
Tarriffs or Raw Materials Increase $ -
Net Sourcewell Chassis Price $ 102,352.12
$ -
$ -
4.00% $ -
$ 34,075.00
$ -
5.00% $ 1,703.75
$ 3,500.00
$ -
$ -
5.00% $ 175.00
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ 2,278.58
$ -
$ 10,994.81
$ 10.50
$ -
$ 136,660.31
$ 136,660.31
$1,200
Terms:
Phone: 805-473-5488
[email protected]
Base Chassis List
Options List
New 2026 International MV607 Chassis
Email:
Chassis
Silver Package Award
tire
Final Sourcewell Total Vehicle(s) Price
Additional Freight
Service Contracts
Additional Fees & Taxes
Final Sourcewell Per Vehicle Price FOB City of Arroyo Grande Service Contracts (Bundle) w/40% Discount
Sourcewell Partner Body
Additional Sourcewell Qualified Content
Handling Fee
Additional Post Build Work
Stock unit in dealer's inventory, dealer will accept a final purchase order using the current Sourcewell pricing quoted above.
Dealer placing a new orders for the Sourcewell Member, the purchase order cannot be firmed up until the unit is slotted to build with a firm build date or lineset.
Once a firm build date has been established, dealer will provide the Sourcewell Member approved pricing and a final purchase order can be accepted with firm pricing.
Dealer cannot guarantee bodies and/or equipment pricing added to the chassis for a turnkey sale until chassis is lineset.
International Motors, LLC is pleased to provide you with this proposal compliant with all terms of the Sourcewell Vehicles and Chassis Contract #032824-NVS awarded fromerly to Navistar, Inc now International Motors, LLC for new International truck(s). If you have any questions regarding enrollment in Sourcewell or detailed contract terms and conditions, please see your local International Dealer sales representative.
Santa Maria, Ca. 93455
365 W. Betteravia
Allen Granski
Gibbs Truck Centers
Address:
Arroyo Grande, Ca. 93420
Sourcewell Member: City of Arroyo Grande
Contact: Mike Robles
1375 Ash St
City/State/Zip:
[email protected]
805-922-5778
tax
Additional Floorplan
Handling Fee
C&C Modifications
14' Landscape Dump
Handling Fee
Sourcewell Contract Discount
Volume Incentive
Non-Sourcewell Dealer Supplied Body
ATTACHMENT 2
ATTACHMENT 3
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE DECLARING SPECIFIED EXISTING
EQUIPMENT AS SURPLUS AND AUTHORIZING THE SALE
OR DISPOSAL THEREOF
WHEREAS, Government Code Section 37350 authorizes the City Council to control and dispose of property for the common benefit; and
WHEREAS, the City Council wishes to declare certain equipment to be surplus and has determined that sale or disposal, as indicated below, is appropriate and will benefit the City:
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DECLARES, FINDS AND RESOLVES AS FOLLOWS:
Section 1. The City Council hereby declares the following equipment to no longer be useful or necessary to the City’s services and programs and therefore surplus property, to be disposed of as indicated below:
Make, Model & Year Purpose VIN
International 4700, 1998 Dump Truck 1HTSCABL0WH529748
Ford Escape, 2007 Staff transportation 1FMCU59H38KA95320 Ford F-250, 2013 Utilities Service Truck 1FTBFZA61EEA74088 Ford F-450, 2008 Utilities Service Truck 1FDAF46R49EA25818 Dodge Ram 1500, 2016 Street Service Truck 1C6RR7XT8GS188505 Honda Ruckus, 2021 Meter Reading vehicle JH2AF5814NK902523 Section 2. Staff is authorized to dispose of the listed equipment in accordance with the foregoing provisions and those of Arroyo Grande Municipal Code Section 3.08.120.
Section 3. The City Council finds that approval of this Resolution declaring specified City vehicles and equipment to be surplus and authorizing their sale or disposal is not a project under the California Environmental Quality Act (“CEQA”) because it constitutes an organizational, fiscal, or administrative activity of government that will not result in a direct or indirect physical change in the environment pursuant to State CEQA Guidelines sections 15378(b)(4)-(5). This Resolution authorizes the disposition of existing City vehicles and equipment that are no longer useful or necessary for City services and programs, and does not authorize any construction or commit the City to any activity that may result in a physical change in the environment.
On motion by Council Member ______, seconded by Council Member _______, and by the following roll call vote to wit:
AYES:
NOES:
ABSENT:
RESOLUTION NO.
PAGE 2
the foregoing Resolution was adopted this 13th day of October, 2026
ATTACHMENT 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
Item 9.h.
MEMORANDUM
TO: City Council
FROM: Krystin Rice, Director of Community Development
BY: Shayna Sutherland, Assistant Planner
SUBJECT: Temporary Use Permit 26-007; Authorization for Temporary Closure of Branch Street for Halloween in the Village; Saturday, October 31, 2026 DATE: October 13, 2026
RECOMMENDATION:
1) Adopt a Resolution approving Temporary Use Permit 26-007 for the annual Halloween in the Village event, authorizing the closure of City streets and a fee waiver; and 2) Find the action exempt from CEQA pursuant to Section 15304(e) of the CEQA Guidelines.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The applicant, Cheers Arroyo Grande, is requesting a waiver of the $431.55 Temporary Use Permit application fee. Due to the annual nature of the Event and its similarity to prior years' events, the staff time required to review the proposal and prepare the staff report is minimal. In addition, the City is a co-sponsor of the Event; therefore, staff recommends approval of the requested fee waiver.
The event requires traffic control consistent with a Small Traffic Event, which has a fee of $6,118 in the Comprehensive Fee Schedule. This fee covers the costs of labor and materials to prepare and run the event and consists of 18 hours of labor from the Public Works Department, 30 hours of labor from the Police Department, and 5 hours of labor from the Recreation Services Department.
BACKGROUND:
Halloween in the Village (the “Event”) is intended to provide a safe, family-friendly environment for community members to participate in trick-or-treating while supporting and highlighting businesses within the Village. The Event began as an informal, community-run event that operated without permits or formal City involvement prior to 2007. As attendance increased, corresponding traffic and pedestrian safety concerns prompted the City to require a more formalized process for the Event, including obtaining applicable permits and implementing safety procedures. The closure of Branch Street
Item 9.h.
City Council
Temporary Use Permit 26-007; Authorization for Temporary Closure of Branch Street for Halloween in the Village; Saturday, October 31, 2026 October 13, 2026
between Traffic Way and Mason Street was determined to be necessary to facilitate safe pedestrian movement and allow participants to cross the street while minimizing conflicts with vehicular traffic. Various community-based organizations have applied for the necessary permits to continue the annual Halloween in the Village celebration.
ANALYSIS OF ISSUES:
The Event is proposed from 4:00 p.m. to 6:00 p.m. on Saturday, October 31, 2026. To facilitate setup, traffic control, and pedestrian safety, the Temporary Use Permit application requests street closures from 3:00 p.m. to 7:00 p.m. By limiting occurrences of pedestrian and vehicular interactions during the Event, crowds of children and families are able to safely gather and walk on both sides of the four-block core of the Village. Prior to the implementation of street closures, unsafe conditions such as overcrowded sidewalks and crossings of uncontrolled intersections were common. Street closures and associated safety measures have been successfully implemented during past editions of the Event.
TRAFFIC CONTROL PLAN:
The traffic control plan for the Event involves staff and equipment from various City departments. To secure the area from vehicular traffic, City vehicles will be parked at intersections around the perimeter of the Event. The Police Department will place a public safety vehicle and trailer at the intersection of Traffic Way and Branch Street, a Police Department vehicle at the intersection of Bridge Street and Branch Street, and additional Police Department vehicles at designated closure points, including Bridge Street, the Car Corral, Nevada Street, and other major driveways to serve as vehicle barricades to establish the pedestrian-only areas. The Public Works Department will use up to three vehicles and traffic delineators as barricades for traffic control and three staff members to install and remove no-parking and detour signage. Five Cities Fire Authority will park a ladder truck at the intersection of Mason Street and Branch Street for traffic control. This intersection will serve as the access point for emergency vehicles during the Event, if necessary. The Recreation Services Department anticipates providing one vehicle and one staff member at the Car Corral. The applicant will be responsible for monitoring and addressing trash overflow during the Event.
Traffic detours will be implemented to route automobile and truck traffic around the Event closure area. The detour will be established through the following measures:
Placement of “No Parking” signs mounted on delineators 48 hours in advance of the event on West and East Branch Streets;
No parking along a small section at the corner of Mason Street and Nelson Street to allow turning movement for commercial trucks;
Traffic control at Bridge Street, Car Corral, Nevada Street, and other intersections or major driveways providing access to the Branch Street closure to prevent vehicles from entering the Event area;
Item 9.h.
City Council
Temporary Use Permit 26-007; Authorization for Temporary Closure of Branch Street for Halloween in the Village; Saturday, October 31, 2026 October 13, 2026
Routing automobile and truck traffic onto Traffic Way, Nelson Street, and Mason Street; and
Delineation of a widened turning lane on East Branch Street at Mason Street for commercial trucks.
These traffic control and detour measures are shown on the Detour Map provided as Attachment 2.
NOTIFICATION:
At least two (2) weeks in advance of the Event, the applicant shall mail or hand deliver notification of the planned street closures and associated traffic detours to affected residents, businesses, and property owners located within or adjacent to the area where street closures will occur. “No Parking” signs will be posted on affected portions of West and East Branch Streets at least 48 hours in advance of the Event, as described in the Traffic Control Plan. These notification and signage measures are intended to provide advance notice of the closures, parking restrictions, and temporary traffic circulation changes associated with the Event.
ALTERNATIVES:
1. Staff’s recommendation;
2. Modify and adopt the Resolution without authorizing the fee waiver;
3. Modify and adopt the Resolution as appropriate;
4. Do not adopt the Resolution; or
5. Provide other direction to staff.
ADVANTAGES:
A full street closure facilitates pedestrian movement, reduces conflicts between pedestrians and vehicles, and provides a controlled environment for participants during the Event.
DISADVANTAGES:
The closure of streets will impact parking and traffic conditions and necessitate the allocation of City resources to uphold safety standards.
ENVIRONMENTAL REVIEW:
In compliance with the California Environmental Quality Act (CEQA), staff has determined that this action is categorically exempt pursuant to the Class 4 exemption under Section 15304(e) of the CEQA Guidelines, which applies to minor temporary uses of land that have negligible or no permanent effects on the environment. The Event consists of a oneday temporary use of existing developed streets and does not involve construction, grading, permanent physical improvements, tree removal, or a permanent change to the existing condition or use of the property.
Item 9.h.
City Council
Temporary Use Permit 26-007; Authorization for Temporary Closure of Branch Street for Halloween in the Village; Saturday, October 31, 2026 October 13, 2026
Staff has also determined that none of the exceptions to the Class 4 categorical exemption set forth in Section 15300.2 of the CEQA Guidelines apply. The Event will occur on existing developed land, will not affect a sensitive environmental resource area or hazardous waste site, will not result in a significant cumulative impact, and will not involve unusual circumstances indicating that the Event may have a significant effect on the environment. The Event will also not result in damage to or a substantial adverse change in the significance of a historical resource or affect a state scenic highway.
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. Detour Map
ATTACHMENT 1
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE APPROVING TEMPORARY USE
PERMIT 26-007 FOR THE ANNUAL HALLOWEEN IN THE
VILLAGE EVENT, AUTHORIZING THE CLOSURE OF CITY
STREETS AND A FEE WAIVER
WHEREAS, Cheers Arroyo Grande (“Applicant”) has requested closure of City streets for the annual Halloween in the Village (“the Event”); and
WHEREAS, the City of Arroyo Grande is a co-sponsor of the Event and will provide City operational support for traffic control, public safety, and related event operations; and WHEREAS, the Arroyo Grande Municipal Code (AGMC) section 16.16.090 provides for the issuance of Temporary Use Permits for short-term events and activities on privately or publicly owned property such as Halloween in the Village; and WHEREAS, AGMC Section 10.16.050 authorizes the City Council to restrict parking on any street, and California Vehicle Code Section 21101(e) authorizes the closure of streets for local special events.
NOW, THEREFORE, BE IT RESOLVED that the above recitals are true, correct and incorporated herein by reference.
BE IT FURTHER RESOLVED that the Arroyo Grande City Council finds, in accordance with the requirements of Arroyo Grande Municipal Code section 16.16.090(E), after due study and deliberation, that the following circumstances exist and does hereby approve Temporary Use Permit 26-007, authorizing the following actions and use of the following described City property for the Event, subject to the conditions as set forth in Exhibit "A", attached hereto and incorporated herein by this reference:
Temporary Use Permit Findings:
1. The operation of the requested use at the location proposed and within the time period specified will not jeopardize, endanger, or otherwise constitute a menace to the public health, safety, or general welfare.
The operation of the Event on Branch Street between Traffic Way and Mason Street will not jeopardize, endanger, or otherwise constitute a menace to the public health, safety, or general welfare because the implementation of a traffic control plan will limit occurrences of pedestrian and vehicular interactions and ensure safe conditions for attendees and members of the public. Adherence to the conditions of approval ensures that the Event is operated in a safe and orderly manner.
RESOLUTION NO.
PAGE 2
2. The proposed site is adequate in size and shape to accommodate the temporary use without material detriment to the use and enjoyment of other properties located adjacent to and in the vicinity of the site.
The proposed site is adequate in size and shape to accommodate the temporary use without material detriment to the use and enjoyment of adjacent properties because the temporary street closures provide sufficient space for pedestrian activity while maintaining separation between the Event and vehicular traffic.
3. The proposed site is adequately served by streets or highways having sufficient width and improvements to accommodate the kind and quantity of traffic that the temporary use will or could reasonably be expected to generate.
The proposed Event is adequately served by the surrounding street network, including Traffic Way, Nelson Street, Mason Street, and other public streets in the vicinity of the Event. These streets are of sufficient width and improvements to accommodate the anticipated traffic generated by the temporary use and the associated detour.
4. Adequate temporary parking to accommodate vehicular traffic to be generated by the use will be available either on-site or at alternate locations acceptable to the City Council.
Despite the loss of street parking within the Event area, public parking will be available in the Le Point Street parking lot and Olohan Alley. On-street parking is also available on the streets in the proximity of the Event, which can accommodate Event related parking and serve as a detour around the street closure.
Authorized Actions and Property for Halloween in the Village – Saturday, October 31, 2026
1. The City Council authorizes “No Parking/Tow Away” restrictions on Branch Street between Traffic Way and Mason Street, and at the corner of Mason Street and Nelson Street, from 3:00 p.m. to 7:00 p.m. on Saturday, October 31, 2026. The City Council finds that the temporary street closure is necessary for the safety and protection of persons attending the Event because it separates pedestrian activities from vehicular traffic.
2. “No Parking/Tow Away” signs for the authorized parking restrictions shall be placed at least 48 hours before the Event. The parking restrictions shall be effective from 3:00 p.m. to 7:00 p.m. on Saturday, October 31, 2026.
3. The City Council authorizes the closure of Branch Street between Traffic Way and Mason Street from 3:00 p.m. to 7:00 p.m. on Saturday, October 31, 2026.
RESOLUTION NO.
PAGE 3
4. The Arroyo Grande Police Department will control traffic at designated closure and access points, including Bridge Street, Nevada Street, and the Car Corral, to prevent vehicles from entering the Branch Street closure and to direct traffic to the designated detour route. Emergency and local access shall be maintained as directed by the Police Department and Five Cities Fire Authority.
BE IT FURTHER RESOLVED that, based on the authority found in Resolution No. 3760, adopted July 13, 2004, the City Council hereby waives the $431.55 Temporary Use Permit application fee for Temporary Use Permit 26-007 because the City of Arroyo Grande is a co-sponsor of the Halloween in the Village event.
BE IT FURTHER RESOLVED, that the City Council finds and determines that this action is categorically exempt from the California Environmental Quality Act (“CEQA”) under the Class 4 exemption per Section 15304(e) of the CEQA Guidelines, which applies to minor public or private alterations in the condition of land, water, and/or vegetation where the project will have negligible or no permanent effects on the environment and does not involve the removal of healthy, mature, scenic trees except for forestry and agricultural purposes.
This action falls within the Class 4 exemption because the Halloween in the Village event is a minor temporary use of land that will occur on existing developed land for a single day.
The Halloween in the Village event will not involve construction, grading, permanent physical improvements, tree removal, or any permanent change to the existing condition or use of the property.
Further, none of the exceptions to the Class 4 exemption set forth in State CEQA Guidelines section 15300.2 apply. The City Council finds that the action is not subject to exceptions to the Class 4 exemption because the Halloween in the Village event will occur on existing developed land and not a sensitive environmental resource area or hazardous waste site; will not result in a significant cumulative impact; there are no unusual circumstances indicating that the event may have a significant effect on the environment or a state scenic highway; and the event will not cause a substantial adverse change in the significance of a historical resource.
On motion by 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 13th day of October, 2026.
RESOLUTION NO.
PAGE 4
______________________________________
CAREN RAY RUSSOM, MAYOR
ATTEST:
______________________________________
JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:
______________________________________
MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:
______________________________________
ISAAC ROSEN, CITY ATTORNEY
RESOLUTION NO.
PAGE 5
EXHIBIT “A”
CONDITIONS OF APPROVAL
TEMPORARY USE PERMIT 26-007
HALLOWEEN IN THE VILLAGE
SATURDAY, OCTOBER 31, 2026
GENERAL CONDITIONS:
1. The Applicant shall ascertain and comply with all State, County, and City requirements as are applicable to this project.
2. The Event shall occur in substantial conformance with the application and plans on file in the Community Development Department.
3. The Applicant shall comply with all Conditions of Approval for Temporary Use Permit 26-007.
4. To the full extent permitted by law, the Applicant shall indemnify, defend and hold harmless the City, its agents, officers, and employees from and against any liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses or costs of any kind, whether actual, alleged or threatened, including attorney’s fees and costs, court costs, interest, defense costs, and expert witness fees), where the same arise out of, are a consequence of, or are in any way attributable to, in whole or in part, this Temporary Use Permit except liability arising out of the proven sole negligence of the City.
PUBLIC WORKS DEPARTMENT CONDITIONS:
5. The Applicant shall monitor trash receptacles throughout the Event and shall be responsible for addressing any trash overflow, including providing additional trash receptacles, collection, or other measures as necessary to maintain the Event area in a clean and sanitary condition.
6. The Public Works Department will provide and place the required “No Parking/Tow Away” and detour signage and supplemental cone barricades as determined necessary by Public Works. Police Department vehicles will serve as vehicle barricades at designated closure points.
7. At least two (2) weeks in advance of the Event, the Applicant shall mail or hand deliver a notification of street closures to affected businesses and property owners located within the area where street closures will occur.
8. The Applicant shall provide a $1,000,000 commercial general liability insurance policy naming the City as additional insured subject to approval by the City Attorney.
RESOLUTION NO.
PAGE 6
Proof of insurance shall be submitted to the Director of Legislative and Information Services ten (10) days before the Event.
FIVE CITIES FIRE AUTHORITY CONDITIONS:
9. Emergency access must be maintained to the satisfaction of the Fire Chief.
10. The use of generators must be reviewed and approved by the Fire Chief.
11. All fire lanes must be posted and enforced in accordance with Police Department and Five Cities Fire Authority guidelines. Fire lanes and access must be approved by the Fire Chief.
Police Vehicle Barricade
Cones
Fire Truck Barricade
ATTACHMENT 2
Item 11.a.
MEMORANDUM
TO: City Council
FROM: Matthew Downing, City Manager
BY: Scott Hallett, Fire Chief
SUBJECT: Adoption of the 2026 Emergency Operations Plan and Associated Annexes
DATE: October 13, 2026
RECOMMENDATION:
Adopt a Resolution adopting the 2026 Emergency Operations Plan (EOP) and associated functional and hazard-specific annexes.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is no anticipated immediate fiscal impact associated with adoption of the 2026 Emergency Operations Plan. Future emergency preparedness activities identified within the plan may be incorporated into departmental budgets or pursued with grant funding.
BACKGROUND:
The City of Arroyo Grande maintains an Emergency Operations Plan to guide the City’s response to disasters, large-scale emergencies, and significant incidents impacting the community. State law and best practices require periodic updates to ensure alignment with the Standardized Emergency Management System (SEMS), National Incident Management System (NIMS), and current operational needs.
The City’s previous EOP was updated in 2011. Since then, changes in operational structures, regional hazards, and statewide guidance have necessitated a full revision.
ANALYSIS OF ISSUES:
The 2026 Emergency Operations Plan provides a comprehensive framework for coordinated response activities during emergencies and disasters.
This Emergency Operations Plan (EOP) accomplishes the following:
Establishes an incident management organization for Arroyo Grande, which will coordinate and support on-scene responses, including maintenance of situational
Item 11.a.
City Council
Adoption of the 2026 Emergency Operations Plan and Associated Annexes October 13, 2026
awareness, facilitation of effective communication between operations centers at various levels of government, maintenance of continuity of government, and interaction with public information sources.
Establishes the overall operational concepts associated with the management of incidents, emergencies, crises, disasters, and catastrophes in the City of Arroyo Grande.
Provides a flexible platform for planning and response to all hazards, incidents, events, and emergencies believed to be important to Arroyo Grande. It is applicable to a wide variety of anticipated incident events, including earthquakes, hazardous materials incidents, mass casualty incidents, civil disturbances, terrorist events, wildland fires, adverse weather, utility disruptions, and public health issues.
The EOP also strengthens interoperability with regional public safety agencies and aligns with San Luis Obispo County’s emergency management structure. Adoption of the EOP ensures the City remains compliant with state and federal standards required for disaster reimbursement.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Staff’s recommendation;
2. Provide directions for modifications to the EOP prior to adoption;
3. Do not adopt the EOP (not recommended due to compliance implications); or
4. Provide other direction to staff.
ADVANTAGES:
Adoption of the EOP ensures regulatory compliance with SEMS and NIMS, strengthens Citywide emergency preparedness and response coordination, and provides updated guidance reflecting current hazards and operational capabilities.
DISADVANTAGES:
No disadvantages are identified.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2.
ATTACHMENTS:
1. Resolution
2. 2026 Emergency Operations Plan
3. 2026 EOP Annexes and Plans (link)
ATTACHMENT 1
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE ADOPTING THE 2026 EMERGENCY OPERATIONS PLAN
AND ASSOCIATED FUNCTIONAL AND HAZARD-SPECIFIC ANNEXES
WHEREAS, the City of Arroyo Grande maintains an Emergency Operations Plan (EOP) to guide the City’s response to emergencies, disasters, and significant incidents affecting the community; and
WHEREAS, the State of California mandates that local jurisdictions maintain emergency operations plans consistent with the Standardized Emergency Management System (SEMS) and the National Incident Management System (NIMS); and WHEREAS, the City’s previously adopted Emergency Operations Plan has been reviewed and updated to reflect current operational needs, hazard profiles, and statewide emergency management guidance; and
WHEREAS, the 2026 Emergency Operations Plan strengthens coordination among City departments, regional partners, and allied agencies, and enhances preparedness through updated functional and hazard-specific annexes; and WHEREAS, adoption of the updated EOP and annexes ensures continued compliance with state and federal standards necessary for disaster response and reimbursement eligibility.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande hereby adopts the 2026 Emergency Operations Plan and all associated functional and hazard-specific annexes.
BE IT FURTHER RESOLVED that City staff are authorized and directed to implement the provisions of the Emergency Operations Plan and ensure ongoing updates as required by law, best practices, or operational needs.
On motion by Council Member ______, seconded by Council Member _______, and by the following roll call vote to wit:
AYES:
NOES:
ABSENT:
the foregoing Ordinance was adopted this 13th day of October, 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
ATTACHMENT 2
City of Arroyo Grande
Emergency Operations Plan
2026
Emergency
Operations
Plan
May 2026
EXECUTIVE SUMMARY
The City of Arroyo Grande Emergency Operations Plan (EOP) is an all-hazards document describing the Arroyo Grande incident management organization, compliance with relevant legal statutes, other relevant guidelines, whole community engagement, continuity of government focus, and critical components of the incident management structure. The incident management system is a component-based system designed to be scaled up, and components activated as necessary to reflect the incident/event’s escalation from routine incident(s) to emergency, disaster, or catastrophe affecting the City of Arroyo Grande. This EOP is not intended to address specific emergency responses, scenarios, hazards, or threats. Functional and hazard-specific annexes to this EOP will outline specific response activities for response organizations.
This Emergency Operations Plan (EOP) accomplishes the following:
Establishes an incident management organization for Arroyo Grande, which will coordinate and support on-scene responses, including maintenance of situational awareness, facilitation of effective communication between operations centers at various levels of government, maintain continuity of government, and interaction with public information sources. Establishes the overall operational concepts associated with the management of incidents, emergencies, crises, disasters, and catastrophes in the City of Arroyo Grande. Provides a flexible platform for planning and response to all hazards, incidents, events, and emergencies believed to be important to Arroyo Grande. It is applicable to a wide variety of anticipated incident events, including earthquake, hazardous materials incidents, mass casualty incidents, civil disturbance, terrorist events, wildland fires, adverse weather, utility disruptions, and public health issues.
This EOP continues the City of Arroyo Grande compliance with the Standardized Emergency Management System (SEMS), the National Incident Management System (NIMS), the Incident Command System (ICS), the National Response Framework (NRF), and the National Preparedness System to include FEMA Comprehensive Preparedness Guide (CPG) 101, Version 3.1 (2025), Developing and Maintaining Emergency Operations Plans. It facilitates multi-agency and multi-jurisdictional coordination during emergency operations, public information functions, and resource management.
This EOP serves as the legal and conceptual framework for incident management to be utilized by the City of Arroyo Grande and its various departments within municipal government. There are a number of separately published annexes that support this EOP. These supporting annexes further describe the operational or functional response to particular threats and hazards and the basic considerations, actions, and responsibilities of specific emergency response and management disciplines or functions.
PROMULGATION
The preservation of life, property, the environment, and the economy is an inherent responsibility of local, state, and federal governments. While no plan can completely prevent death and destruction, reasonable plans carried out by knowledgeable and well-trained personnel can and will minimize losses.
The City of Arroyo Grande has prepared this Standardized Emergency Management System (SEMS) and National Incident Management System (NIMS) compliant Emergency Operations Plan (EOP) to ensure the most effective and efficient allocation of resources for the maximum benefit and protection of the civilian population during times of emergency.
This EOP establishes the emergency organization, assigns tasks, specifies policies and general procedures, and provides coordination of planning efforts for respective staff.
This EOP will be reviewed and exercised periodically and revised as necessary to satisfy changing conditions and needs.
The Arroyo Grande City Council gives its full support to this Emergency Operations Plan and urges all officials, employees, and residents—individually and collectively—to do their share in the whole community emergency effort of the City of Arroyo Grande. This EOP became effective on Month, Day, 2026, when approved by the Arroyo Grande City Council.
_____________________________________________ ____________________ Caren Ray Russom, Mayor Date
_____________________________________________ ____________________ Matthew Downing, City Manager Date
_____________________________________________ ____________________ Scott Hallett, Five Cities Fire Chief Date
_____________________________________________ ____________________ David Culver, Arroyo Grande Police Chief Date
APPROVAL, IMPLEMENTATION, AND DELEGATION OF AUTHORITY
This Emergency Operations Plan is approved by the Arroyo Grande City Council and is effective upon adoption. The City Manager, as the Director of Emergency Services, is authorized to implement this plan and direct emergency response and recovery activities in accordance with the California Emergency Services Act, SEMS, and NIMS.
The Director of Emergency Services, or designee, is authorized to approve non-substantive administrative updates to this plan without City Council action. These updates may include typographical corrections, formatting changes, position or title updates, and revisions to contact information, resource listings, appendices, and supporting procedures, provided such changes do not alter policy, authority, or organizational responsibilities.
Substantive changes that affect policy direction, legal authority, roles, responsibilities, or operational concepts require formal review and approval by the City Council. All approved revisions shall be documented in the Record of Changes section of this plan.
ARROYO GRANDE CITY COUNCIL ADOPTION APPROVAL
**Insert City Council approval once document is approved**
PLAN CONCURRENCE
The agencies and departments listed below have reviewed the Arroyo Grande Emergency Operations Plan and concur with the roles, responsibilities, and procedures assigned to them as described herein.
Concurrence indicates agreement with plan content and coordination expectations during emergencies.
Agency or Department Representative
Name and Title
Signature Date
City Manager
Police Department
Legislative & Information
Five Cities Fire Authority
Public Works Department
Community Development
Administrative Services
Recreation Services
ANNUAL REVIEW RECORD OF CHANGES
The Five Cities Fire Authority (FCFA) is responsible for maintaining, reviewing, and updating this Emergency Operations Plan (EOP). They will—at a minimum—review this EOP on an annual basis in accordance with the plan maintenance policy. If the EOP requires an immediate change due to lessons learned from training, exercises, or actual incidents, FCFA will identify a course of action for the review, update, and implementation of the necessary changes. All changes will be noted in the table below.
VERSION DATE NAME/ORGANIZATION CHANGE DESCRIPTION
RECORD OF DISTRIBUTION
DATE NAME / TITLE ORGANIZATION # OF COPIES
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TABLE OF CONTENTS
Executive Summary .......................................................................................................................... i Promulgation ................................................................................................................................... i Approval, Implementation, and Delegation of Authority .............................................................. iii Arroyo Grande City Council Adoption Approval ............................................................................ iv Plan Concurrence ............................................................................................................................ v Annual Review Record of Changes ................................................................................................ vi Record of Distribution ................................................................................................................... vii Purpose, Scope, Situation Overview, and Planning Assumptions .................................................. 4 Purpose .................................................................................................................................................... 5 Scope ........................................................................................................................................................ 5 Situation Overview ................................................................................................................................... 6 Event Types Defined ................................................................................................................................. 8 Hazard Analysis Overview ........................................................................................................................ 9 Adverse Weather .............................................................................................................................................. 10 Care & Shelter ................................................................................................................................................... 12 Civil Disturbance ................................................................................................................................................ 13 Debris Management .......................................................................................................................................... 14 Evacuation ......................................................................................................................................................... 16 Fires ................................................................................................................................................................... 16 Hazardous Material Incident ............................................................................................................................. 18 Pandemic ........................................................................................................................................................... 18 Transportation ................................................................................................................................................... 19 Utility Disruption ............................................................................................................................................... 20 Core Capability Overview ....................................................................................................................... 21 Planning Assumptions ............................................................................................................................ 26 Concept of Operations .................................................................................................................. 29 National Response Framework (NRF) .................................................................................................... 30 Standard Emergency Management System (SEMS) ............................................................................... 30 National Incident Management System (NIMS) .................................................................................... 30 Incident Command System (ICS) ............................................................................................................ 31 Integrating Federal, State, and Local Systems ....................................................................................... 31 Phases of Emergency Management ....................................................................................................... 31 Mitigation .......................................................................................................................................................... 32 Preparedness ..................................................................................................................................................... 32 Response ........................................................................................................................................................... 32 Recovery ............................................................................................................................................................ 33
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Access and Functional Needs ................................................................................................................. 33 Planning Process and Stakeholder Engagement ............................................................................................... 34 Accessible Alerts, Warnings, and Public Information ........................................................................................ 34 Evacuation and Transportation ......................................................................................................................... 34 Sheltering .......................................................................................................................................................... 35 RECOVERY AND REINTEGRATION ...................................................................................................................... 35 Organization and Assignment of Responsibilities ........................................................................ 36 Field Response ........................................................................................................................................ 37 Local Government .................................................................................................................................. 37 Operational Area (OA) ............................................................................................................................ 37 Operational Area Responsibilities ..................................................................................................................... 38 Arroyo Grande Emergency Organization ............................................................................................... 39 Arroyo Grande Emergency Operations Center (EOC) ............................................................................ 39 EOC Locations .................................................................................................................................................... 40 EOC Activation Levels ........................................................................................................................................ 40 EOC Position Training Requirements ................................................................................................................ 41 Emergency Operations Center Position Assignments ....................................................................................... 44 Emergency Operations Center Organization ..................................................................................................... 45 Region ..................................................................................................................................................... 46 State ....................................................................................................................................................... 46 Additional Support and Planning Organizations .................................................................................... 46 Disaster Service Workers (DSWs) ...................................................................................................................... 46 Community Emergency Response Team (CERT) ............................................................................................... 47 Disaster Council ................................................................................................................................................. 47 Direction, Control, and Coordination ........................................................................................... 48 Direction and Control Interface ............................................................................................................. 49 Operational Area Coordination and Communication ............................................................................ 49 Emergency Operations Center Notification ...................................................................................................... 50 Coordination With Other Levels of Government .............................................................................................. 50 Coordination With Non-Profit and Volunteer Organizations ............................................................................ 50 Information Collection, Analysis, and Dissemination ................................................................... 52 Information Collection and Management Tool ...................................................................................... 53 Crisis Communications and Public Information ............................................................................ 54 Joint Information System (JIS) ................................................................................................................ 55 Joint Information Center (JIC) ................................................................................................................ 55 EOC Communication Systems ................................................................................................................ 55 Public Awareness and Notification Systems .......................................................................................... 56 Public Awareness and Education ........................................................................................................... 58 Finance and Mutual Aid ................................................................................................................ 60 Finance Considerations .......................................................................................................................... 61
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Mutual Aid .............................................................................................................................................. 63 Mutual Aid Systems ........................................................................................................................................... 64 Special Mutual Aid Considerations for Terrorism Incidents .............................................................................. 64 Mutual Aid Authorities, Plans, and Guidance Documents ................................................................................ 65 Resource management .......................................................................................................................... 65 Integration of Mutual Aid Resources ................................................................................................................ 65 Plan Development and Maintenance ........................................................................................... 67 Plan Development .................................................................................................................................. 68 Plan Maintenance .................................................................................................................................. 68 Plan Concurrence ................................................................................................................................... 68 Plan Training and Exercise ...................................................................................................................... 68 Authorities and References .......................................................................................................... 72 Authorities .............................................................................................................................................. 73 Regulations ............................................................................................................................................. 73 References .............................................................................................................................................. 73 Glossary ......................................................................................................................................... 75 Acronyms ................................................................................................................................................ 76 Definitions .............................................................................................................................................. 78 Appendix A – Local / State / Federal Crosswalk ........................................................................... 83 Federal / State / Local Crosswalk ........................................................................................................... 83 Appendix B – EMERGENCY ANNEX PLANNING PROCESS GUIDE .................................................. 86 Purpose Statement ................................................................................................................................. 86 APPENDIX C – City of Arroyo Grande Emergency Hazard-Specific Annexes & Operational Plans 87 Relationship to Other Plans/References ................................................................................................ 87
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PURPOSE, SCOPE, SITUATION OVERVIEW, AND
PLANNING ASSUMPTIONS
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PURPOSE
This City of Arroyo Grande (City) Emergency Operations Plan (EOP) provides a comprehensive, single source of guidance and procedure for the City to prepare for, respond to, and manage significant or catastrophic natural or man-made threats, crises, incidents, or events that produce situations requiring a coordinated response. This EOP is intended to conform to the requirements of the National Incident Management System (NIMS), Standardized Emergency Management System (SEMS), Incident Command System (ICS), and the California State Emergency Plan for managing response to multi-agency and multijurisdictional incidents, and to be consistent with federal and state emergency plans and guidance documents.
This EOP is intended as a concept of collaboration and consistency amongst various internal departments and their specific incident management plans, procedures, functions, and capabilities. As such, the EOP is flexible enough to use in all incident types and will facilitate short-term recovery activities.
In the event of an emergency or disaster, the City’s primary responsibility is to maximize the safety of the public, to minimize property and environmental damage, and to ensure the continuity of government. To aid in accomplishing this goal, the City has adopted the principles of SEMS, NIMS, and ICS so that responses to such conditions are done in the most organized, efficient, and effective manner possible and are used to manage and control the response operations.
SCOPE
This EOP provides guidance on response to the City’s most likely and demanding emergency conditions.
It does not supersede established operational policies and procedures for coping with and responding to day-to-day emergencies involving law enforcement, fire services, medical aid, transportation services, flood control, or other discipline-specific emergency response systems. It is intended as a supplement to such systems. This EOP does, however, place emphasis on those unusual and unique emergency conditions that will require extraordinary response beyond the ability of any one or common set of organizations to respond. This EOP does not include detailed response-level operating instructions or procedures. Each organization identified in this EOP is responsible for, and expected to develop, implement, and test policies, instructions, and standard operating procedures (SOPs) or checklists that reflect the tactical, operational, strategic, executive tasks, and incident management concepts contained in this EOP. Coordinated response and support roles must be defined by these organizations to facilitate the ability to respond to and manage any given incident.
This document is not intended to be an overview of the City of Arroyo Grande Emergency Operations Center functions, procedures, section responsibilities, or position-specific standard operating procedures.
These procedures are covered more specifically in the Standardized Emergency Management System (SEMS) position-specific checklists, which are maintained as position-specific job aids in the EOC.
The graphic below describes the process and purpose of this document and how it can be utilized by the City. It further identifies objectives in creating it, why the document has been created, the needs it fills, and their importance to the emergency management framework.
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SITUATION OVERVIEW
General Background:
The City of Arroyo Grande (“Arroyo Grande”) is a municipal corporation in San Luis Obispo County, California, situated on the scenic Central Coast of the State. The city lies along U.S. Highway 101, roughly midway between Los Angeles and San Francisco in a region known for its mild Mediterranean climate, coastal access, agriculture, and small-town character. Arroyo Grande was first established as a township in the 1860’s and later incorporated as a city on July 10, 1911.
Named from the Spanish words meaning “big creek,” Arroyo Grande grew around agriculture and transportation systems, including a railroad built in the 1880s that served the area’s farms and orchards. The city’s historic downtown “Village” features Victorian-era buildings, antique storefronts, and the iconic Swinging Bridge over Arroyo Grande Creek, reflecting its deep local history.
According to the 2020 U.S. Census Bureau estimates, Arroyo Grande has a population of approximately 18,249 residents and covers a total area of approximately 5.94 square miles, all of which is land. The community has a diverse mix of residential neighborhoods, commercial districts, parks, agricultural lands, and outdoor recreation areas.
The city’s government operates under a council-manager form of government, with services and infrastructure designed to support residents, businesses, and visitors while preserving quality of life and local character.
Geographic related information:
The City of Arroyo Grande is situated in southern San Luis Obispo County on California’s Central Coast and is characterized by gently rolling terrain shaped by coastal and foothill influences. The city’s landscape includes low hills, valleys, and riparian corridors, with elevations increasing gradually toward inland foothills associated with the Santa Lucia Range. Native vegetation in and around the city reflects a typical Central Coast environment, including oak woodland, coastal scrub, grasslands, and riparian habitat.
A defining geographic feature of the area is Arroyo Grande Creek, which flows through the city in a generally southwest direction before emptying into the Pacific Ocean near Oceano. The creek corridor has historically influenced settlement patterns, land use, and agriculture and continues to shape the city’s open space, floodplain management, and environmental planning efforts.
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Arroyo Grande’s proximity to both coastal environments and inland hills contribute to localized climatic variation and diverse ecosystems within a relatively compact geographic area. This setting supports a mix of residential neighborhoods, agricultural lands, and natural open space while reinforcing the city’s strong connection to surrounding watersheds and coastal resources.
Education/recreation related info:
The City of Arroyo Grande is served by the Lucia Mar Unified School District, which provides public education through multiple elementary schools, a middle school, and Arroyo Grande High School, a comprehensive public high school located within the city. The area also has access to nearby community colleges and California Polytechnical University (Cal Poly) within San Luis Obispo County, supporting both vocational and academic pathways.
Recreational opportunities are a defining feature of the community. The City of Arroyo Grande operates and maintains a network of public parks, open space areas, sports fields, and recreational facilities, including parklands along Arroyo Grande Creek and the historic Swinging Bridge. Residents and visitors also enjoy access to multi-use trails, playgrounds, and community gathering spaces, as well as nearby coastal and inland recreation areas throughout the South County region.
Arroyo Grande hosts a variety of annual community events and festivals that celebrate local culture, agriculture, and history. Signature events include the Harvest Festival, one of the Central Coast’s largest and longest-running community festivals, along with concerts, holiday celebrations, farmers markets, and Village-centered events that draw residents and visitors from across the region.
Commerce related info:
According to the 2020 U.S. Census Bureau and American Community Survey data, the City of Arroyo Grande has a diversified economy with employment distributed across several major industry sectors.
The largest employment categories for city residents are health care and social assistance, accommodation and food services, and educational services, followed by retail trade, construction, and manufacturing, reflecting the city’s role as a community, health care, service, and tourism-oriented economy. Major local employers include Arroyo Grande Community Hospital, the Lucia Mar Unified School District, and a mix of regional retail, hospitality, and service businesses, including national retail chains and locally based health care, financial, and agricultural enterprises.
Median household income in Arroyo Grande is approximately $102,553 to $103,258, with a per capita income of about $50,623, both of which exceed national averages, and a relatively low poverty rate of around 4.8 percent. Most residents commute by automobile to jobs throughout the South County region, with average travel times in the low 20-minute range. The broader San Luis Obispo–Arroyo Grande metropolitan area unemployment rate has generally remained below the statewide average, most recently around 4.5 to 4.8 percent, compared with a California unemployment rate above 5 percent, indicating relatively strong employment conditions in the region.
Transportation related info:
The City of Arroyo Grande is served by U.S. Route 101, the primary north-south transportation corridor along California’s Central Coast, which runs through the city and provides regional connectivity between Southern California and the San Francisco Bay Area. U.S. Route 101 is the most heavily traveled roadway in the area and serves as the principal arterial for commuter, commercial,
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and emergency traffic, supported by a network of local arterial and collector roadways connecting neighboring South County communities. Intercity passenger rail service is provided by Amtrak at the nearby Grover Beach Station, with daily Central Coast service along the Coast Starlight. Commercial air service is available at the San Luis Obispo County Regional Airport, which provides scheduled passenger flights to regional and national destinations. Together, these roadways, rail, and air systems support regional mobility, goods movement, emergency response, and evacuation operations for the city.
EVENT TYPES DEFINED
CATASTROPHE A series of cascading human-caused/influenced events or incidents with or without a human caused genesis, the adverse effects/consequences of which are potentially, seemingly, or definitively irreversible.
DISASTER Any natural event or emergency (hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, drought, etc.), or regardless of cause, any fire, flood, or explosion which the President determines to be of such severity as to warrant major federal disaster assistance.
EMERGENCY Incident(s) or crisis(es) (air pollution, fire, flood, storm, epidemic, riot, drought, sudden/severe energy shortage, plant or animal infestation or disease, Governor’s warning of
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volcanic predictions, and earthquakes, etc.) posing threat to safety of persons, property, or the environment that exceeds an organization’s resources/capability.
INCIDENT The physical manifestation of crisis, event, or occurrence that has adversely affected life, property, or the environment requiring the response of at least one individual.
STATE OF EMERGENCY An eminent impending incident(s) or crisis(es) posing threat to safety of persons, property, or the environment that is/are likely to exceed resources/capability of the proclaiming political jurisdiction, or the existence of an active incident which threatens a population and the adequacy of local resources is unknown.
CRISIS Phenomenon, event, active threat, or trend, with or without specific location, posing seemingly inevitable harm to life, property, environment, organizational performance, reputation, or way of life reasonably or ethically necessitating deliberate urgent intervention. (A crisis may be local, national, or global).
ACTIVE THREAT Known communicated, demonstrated, or inferred timely intent and capability to harm life, property, environment, organizational performance, or way of life with specified or unspecified target.
PASSIVE THREAT Existing communicated, demonstrated, or inferred intent and potential capability to harm life, property, environment, organizational performance, or way of life.
HAZARD ANALYSIS OVERVIEW
This section of the EOP consists of a series of threat summaries based upon a hazard analysis. This hazard analysis provides a description of the local area, risk factors, and the anticipated nature of situations that could threaten or occur in the city. If future annex or hazard mitigation plan development results in more current or robust hazard or threat analysis data, future EOP revisions will incorporate that data into this section. The following identified threats are discussed:
Adverse Weather
Care & Shelter
Civil Disturbance – Terrorism – Active Shooter
Crisis Communication
Dam Failure
Debris Management
Earthquake
Evacuation
Fire
Hazardous Materials
Pandemic
Transportation
Utility Disruption / PSPS
San Luis Obispo County Nuclear Power Plant Response
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It is important to note that these hazards are not mutually exclusive hazards. One or more of these events may occur simultaneously. Specific actions to be accomplished in response to these hazards are contained in the functional and hazard-specific annexes that are separate from this EOP, as well as department-specific SOPs.
The City works to identify, catalog, and prioritize threats and hazards throughout Arroyo Grande in the Local Hazard Mitigation Planning process. This effort culminates in an updated report called the Threat and Hazard Identification and Risk Assessment (THIRA) and is informed by the San Luis Obispo County Threat and Hazard Identification and Risk Assessment (THIRA) and Local Hazard Mitigation Plan. The THIRA helps local public safety agencies prioritize grant funding and preparedness/mitigation endeavors to improve capabilities to address the most serious and highly prioritized risks and gaps. The hazards below (in addition to other risk factors) are addressed within the THIRA.
Adverse Weather
The City of Arroyo Grande is susceptible to several adverse weather events in any given year. Adverse weather events are typically of relatively short duration but nonetheless can create major recovery issues for the City. The risk of these events impacting Arroyo Grande is a concern, as they may occur on a frequent basis.
Adverse weather events may place the City’s commercial district in jeopardy, as well. Commercial and residential units, unhoused communities, businesses, critical infrastructure, and tourism may be threatened during an Adverse Weather event. Listed below are the most common Adverse Weather events that will likely impact the City:
FLOODING
Flooding is a natural occurrence along stream beds and creek corridors resulting from significant rain events when rainfall and surface runoff exceed the capacity of drainage systems. Floods are generally classified as either slow rise or flash floods. Slow rise floods may allow advance warning and protective actions such as evacuation and sandbagging, while flash floods develop rapidly with little or no warning and typically require immediate evacuation.
The National Weather Service issues flash flood watches when conditions are favorable for flash flooding and flash flood warnings when flooding is reported, imminent, or occurring. No area is immune to flash flooding. Water levels in small streams and low-lying areas can rise rapidly during intense rainfall, particularly near headwaters, urbanized floodplains, and mountainous terrain.
Flooding may also result from dam inundation caused by structural failure, overtopping, or seismic activity. Arroyo Grande Creek and associated flood control infrastructure represent the primary flood and dam failure hazard to the City of Arroyo Grande. The Arroyo Grande Creek watershed drains approximately 157 square miles through the City to downstream communities and the Pacific Ocean. Flooding is most likely to impact low lying areas adjacent to the creek and levee system within the mapped floodplain. A partial or complete failure of Lopez Dam, operated by the San Luis Obispo County Flood Control and Water Conservation District, could result in rapid downstream flooding affecting life safety, residential and commercial property, critical facilities, utilities, transportation corridors, and agricultural areas, including portions of the Cienega Valley
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and facilities near Highway 1, the Union Pacific Railroad, the South County Sanitation District wastewater treatment plant, and Oceano Airport.
Additional hazards associated with flooding and severe weather events may include utility disruptions, downed power lines and trees, landslides, and roadway closures.
EROSION
Erosion is a natural geological process caused by currents, storms, earthquakes, winds, and the gradual movement of tectonic plates. It may take place slowly over hundreds of years, or it may occur dramatically, as with landslides or severe storms.
DROUGHT
Droughts are short-term or long-term water deficiencies that cause agricultural, environmental, and societal impacts. Droughts can occur in any part of the country and can last for indeterminate periods of time. Agricultural drought is characterized by unusually dry conditions during the growing season, resulting in significant economic effects on local agriculture. Extended periods of drought can increase the risk of wildfire occurrences and can impact public water supplies.
SEVERE HEAT
According to the NWS, heat waves are defined as a period of abnormally hot and unusually humid weather, typically lasting two or more days. Heat waves normally coincide with little overnight cooling/relief. Heat waves do not cause damage or elicit the immediate response that floods, fires, earthquakes, and other disasters do. They do, however, rank among the deadliest natural hazards and claim many more lives when compared with other disasters.
While heat waves do not elicit the same immediate response as floods, fires, and earthquakes, they have claimed more lives over the past fifteen years than all other proclaimed disaster events combined. The worst single heat wave event in California occurred in Southern California in 1955, when an eight-day heat wave resulted in 946 deaths. Typical summer temperatures in the state contribute to the untimely demise of 20 people on average per year.
The NWS uses the Heat Index to issue excessive heat watches and warnings. The Heat Index combines air temperature and relative humidity to determine the human-perceived equivalent temperature. NWS will issue an excessive heat watch when conditions are favorable for an excessive heat event in the next 24 to 72 hours. Arroyo Grande Cooling Center(s) may be activated when temperatures exceed 105 degrees for more than three consecutive days.
Cooling centers within the City of Arroyo Grande will be identified and activated as needed in coordination with the Emergency Operations Center (EOC), Community Services, and partner agencies. Locations will be determined based on operational needs, accessibility, and available resources.
WINDSTORMS
Windstorms refer to any dangerous meteorological phenomena with the potential to cause damage, serious social disruption, or loss of human life. Severe windstorms pose a significant risk
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to life and property in the region by creating conditions that disrupt essential systems such as public utilities, telecommunications, and transportation routes. High winds can and do occasionally cause tornado-like damage to local homes and businesses. Severe windstorms can present a very destabilizing effect on the dry brush that covers local hillsides and wildland urban interface areas. In addition, high winds may have destructive impacts, especially on property, trees, power lines, and other utility services.
Emergency response actions associated with an Adverse Weather event are presented in City of Arroyo Grande EOP Adverse Weather Annex.
In the event of an Adverse Weather event, the Fire Chief will assume the position of Incident Commander. In the event the Fire Chief is not available, the following chain of command is provided to identify authorized alternates to fill the City of Arroyo Grande position as Incident Commander.
No. 1 – The Fire Chief or the On-Duty Battalion Chief
No. 2 – The On-Duty Fire Officer as appointed by the Fire Chief No. 3 – The Chief of Police or highest-ranking Police Officer The Incident Commander will alert the Arroyo Grande City Manager or assigned designee as to the severity of the incident.
Care & Shelter
Whenever a major emergency or disaster strikes, the City will activate the EOC, and the Care and Shelter Branch Director will be established in the Operations Section. The City’s EOC will provide support to field personnel, coordinate the efforts of other City departments, and collaborate with the San Luis Obispo County Operational Area and other allied stakeholders utilizing the Standardized Emergency Management System (SEMS).
Depending on the scope, severity, and duration of the event, the City will assess the need for providing care and shelter services. Should the City decide to open congregate shelters, the Recreation Services Department shall lead the effort to locate, open, and manage care and shelter facilities. Other City departments will support these operations by providing staff, equipment, supplies, and transportation as directed. The American Red Cross, the Salvation Army, and other non-governmental organizations may provide support to city operations or directly to residents.
Coordination – including allocation of resources - will occur via the EOC. Care and Shelter is considered a critical function second only to life safety operations, and resources will be allocated accordingly.
Independent, spontaneous shelters and mass care activities may also be established by community or faith-based organizations. The City will identify these and either monitor their status or integrate them into the care and shelter operation as appropriate.
In the event the city cannot support all care and shelter missions, the EOC will coordinate with the San Luis Obispo County Office of Emergency Services to procure sufficient personnel, resources, or supplies from the Operational Area, the State of California, or the Federal government.
In the event the Care and Shelter Annex must be activated, the Fire Chief will assume the position of Incident Commander. In the event the Fire Chief is not available, the following chain of command is