Agenda packet — Grover Beach City Council, September 26, 2022 (part 2 of 2)

Annex C: City of Grover Beach
San Luis Obispo County Local Hazard Mitigation Plan
City of Grover Beach | February 2020 Annex C.2
Figure C.1 The City of Grover Beach

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Annex C: City of Grover Beach
San Luis Obispo County Local Hazard Mitigation Plan
City of Grover Beach | February 2020 Annex C.3
C.1.3 History
On August 1, 1887 Dwight William Grover founded the Town of Grover after purchasing the land for $22,982.20 in gold from John Michael Price, the founder of Pismo Beach. Grover promoted his town as “the place where the tide lands and the rails meet” and had a vision of a community that had a hotel and a train station near the beach. Grover and his partner George Gates laid out a street grid pattern and promoted the community as Grover City, the “grandest summer and winter seaside resort on the Pacific Coast.” Development didn’t flourish in Grover City until 1935 when Horace V. Bagwell bought 1,100 acres and advertised Grover City as the “home of the average man” with land prices affordable to the working man. People and development began to happen and by the mid-1940’s the first store opened in Grover City followed by the first post office. The Fair Oaks Fire District and the Grover City Water District were formed in 1949 and supported a boom in population throughout the 1950’s. On December 21, 1959 the people of Grover City voted to incorporate and become the City of Grover City. In 1992, the City had become more established and the residents of Grover City decided to rename the community to “Grover Beach”. By 1996 the train station Dwight William Grover dreamed of became a reality when Amtrak began rail service at a newly constructed Grover Beach Train Station.

C.1.4 Economy
Select estimates of economic characteristics for the City of Grover Beach are shown in Table C.2.

Table C.2 City of Grover Beach Economic Characteristics, 2013-2017 Characteristic City of Grover Beach
Families below Poverty Level (%) 10%
All People below Poverty Level (%) 14%
Median Family Income $65,250
Median Household Income $61,482
Per Capita Income $30,873
Population in Labor Force 6,613
Population Employed* 6,260
Unemployment 309
Source: CA Department of Finance U.S. Census Bureau American Community Survey 2013-2017 5-Year Estimates, www.census.gov/ *Excludes armed forces
Table C.3 show how the City of Grover Beach’s labor force breaks down by industry based on estimates from the 2013-2017 five-year American Community Survey.

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City of Grover Beach | February 2020 Annex C.4
Table C.3 City of Grover Beach’s Employment by Industry, 2013-2017 Industry # Employed % Employed
Educational Services, and Health Care and Social Assistance 1,640 26% Retail Trade 572 9%
Professional, Scientific, and Mgmt., and Administrative and Waste Mgmt. Services 789 13% Manufacturing 245 4%
Arts, Entertainment, and Recreation, and Accommodation, and Food Services 786 13% Construction 520 8%
Finance and Insurance, and Real Estate and Rental and Leasing 286 5% Public Administration 251 4%
Other Services, Except Public Administration 240 4%
Wholesale Trade 234 4%
Transportation and Warehousing, and Utilities 439 7%
Agriculture, Forestry, Fishing and Hunting, and Mining 57 1% Information 192 3%
Total 6,251 100%
Source: U.S. Census Bureau American Community Survey 2013-2017 5-Year Estimates, www.census.gov/ C.1.5 Population
According to data extracted by the California Department of Finance from U.S. Census Bureau’s American Community Survey 5-Year Estimates (2013-2017), the total population for the City of Grover Beach was estimated at 13,524 persons. Select demographic and social characteristics for the City of Grover Beach from the 2013-2017 American Community Survey are shown in Table C.4.

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City of Grover Beach | February 2020 Annex C.5
Table C.4 City of Grover Beach’s Demographic and Social Characteristics, 2013-2015 Characteristic City of Grover Beach
Gender/Age
Male 6,687
Female 6,837
Median age (years) 36
Under 5 years 1,236
Under 18 years 3,435
65 years and over 1,875
Race/Ethnicity
White 7,952
Asian 393
Black or African American 316
American Indian/Alaska Native 101
Hispanic or Latino (of any race) 4,279
Native Hawaiian and Other Pacific Islander 126
Education
% High school graduate or higher 85%
Disability Status
% of Population 5 years and over with a
disability 15%
Source: CA Department of Finance, U.S. Census Bureau American Community Survey 2013-2017 5-Year Estimates, www.census.gov/ C.1.6 Development Trends
The City’s General Plan Land Use Element (2012) recognizes that a majority of the City has been developed and future development will be concentrated on vacant properties and redevelopment of underutilized properties.

The following figures from the San Luis Obispo County Council of Governments (COG), 2050 Regional Growth Forecast for San Luis Obispo County show the projected population and housing unit growth between 2010 and 2050. According to the COG’s document the City’s population is projected to increase to over 15,000 residents by 2050.

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Annex C: City of Grover Beach
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City of Grover Beach | February 2020 Annex C.6
Figure C.2 City of Grover Beach Population Projections, 2010 to 2050 Source: 2050 Regional Growth Forecast for San Luis Obispo County, San Luis Obispo Council of Governments and Beacon Economics, June 2017 Figure C.3 City of Grover Beach Housing Unit Projections, 2010 to 2050 Source: 2050 Regional Growth Forecast for San Luis Obispo County, San Luis Obispo Council of Governments and Beacon Economics, June 2017 The California Department of Finance State Demographic Report released on May 1, 2019 indicated the current population of 13,533 and between January 1, 2018 and 2019 the City of Grover Beach lost 0.6 percent of its population. Statewide, California’s 2018 population growth rate (0.47%) was the slowest in the State’s history.

Hazard Identification and Summary
The Grover Beach Planning Team identified the hazards that affect the City and summarized their frequency of occurrence, spatial extent, potential magnitude, and significance specific to Grover Beach (see Table C.5). There are no hazards that are unique to Grover Beach. The overall hazard significance takes into account the geographic area, probability and magnitude as a way to identify priority hazards for mitigation purposes. This is discussed further in the Vulnerability Assessment Section.

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City of Grover Beach | February 2020 Annex C.7
Table C.5 City of Grover Beach – Hazard Summaries
Hazard Geograph
ic Area
Probability of
Future
Occurrence
Magnitude/
Severity
(Extent)
Overall
Significance
Coastal Storm/Coastal Erosion/Sea Level Rise Limited Occasional Limited Low Dam Incidents Significant Unlikely Limited Low
Drought and Water Shortage Extensive Likely Limited High Earthquake Extensive Occasional Critical High
Flood Limited Occasional Limited Low
Tsunami and Seiche Limited Occasional Limited Low
Wildfire Limited Occasional Limited Low
Human Caused: Hazardous Materials Limited Occasional Negligible Low Geographic Area
Limited: Less than 10% of planning area
Significant: 10-50% of planning area
Extensive: 50-100% of planning area
Probability of Future Occurrences
Highly Likely: Near 100% chance of occurrence in next year or happens every year.

Likely: Between 10 and 100% chance of occurrence in next year or has a recurrence interval of 10 years or less.

Occasional: Between 1 and 10% chance of occurrence in the next year or has a recurrence interval of 11 to 100 years.

Unlikely: Less than 1% chance of occurrence in next 100 years or has a recurrence interval of greater than every 100 years.

Magnitude/Severity (Extent)
Catastrophic—More than 50 percent of property
severely damaged; shutdown of facilities for more
than 30 days; and/or multiple deaths
Critical—25-50 percent of property severely
damaged; shutdown of facilities for at least two
weeks; and/or injuries and/or illnesses result in
permanent disability
Limited—10-25 percent of property severely
damaged; shutdown of facilities for more than a
week; and/or injuries/illnesses treatable do not result in permanent disability
Negligible—Less than 10 percent of property severely
damaged, shutdown of facilities and services for less
than 24 hours; and/or injuries/illnesses treatable with first aid
Significance
Low: minimal potential impact
Medium: moderate potential impact
High: widespread potential impact

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City of Grover Beach | February 2020 Annex C.8
Vulnerability Assessment
The intent of this section is to assess Grover Beach’s vulnerability separate from that of the County as a whole, which has already been assessed in Section 5.3 Risk Assessment in the Base Plan. This vulnerability assessment analyzes the population, property, and other assets at risk to hazards ranked of medium or high significance that may vary from other parts of the planning area.

The information to support the hazard identification and risk assessment was based of the previous LHMP for the City. A Local Hazard Mitigation Plan Update Guide and associated worksheets was distributed to each participating municipality or special district to complete during the 2019 update process. Information collected was analyzed and summarized in order to identify and rank all the hazards that could impact anywhere within the County, as well as to rank the hazards and identify the related vulnerabilities unique to each jurisdiction.

Each participating jurisdiction was in support of the main hazard summary identified in the Base Plan (See Table

5.2). However, the hazard summary rankings for each jurisdictional annex may vary slightly due to specific hazard risk and vulnerabilities unique to that jurisdiction. Identifying these differences helps the reader to differentiate the jurisdiction’s risk and vulnerabilities from that of the overall County.

Note: The hazard “Significance” reflects overall ranking for each hazard and is based on the City of Grover Beach’s Planning Team member input from the Data Collection Guide and the risk assessment developed during the planning process (see Chapter 5 of the Base Plan), which included a more detailed qualitative analysis with best available data.

The hazard summaries in Table C.5 reflect the hazards that could potentially affect the City. The discussion of vulnerability for each of the following hazards is located in C.3.2 Estimating Potential Losses. Based on this analysis, the priority hazard (High Significance) for mitigation is earthquake. Those of Medium or High significance for the City of Grover Beach are identified below. • Drought and Water Shortage
• Earthquake
Other Hazards
Hazards assigned a significance rating of Low or which do not differ significantly from the County ranking (e.g., Low vs. High) are not addressed further in this plan and are not assessed individually for specific vulnerabilities in this section. Those hazards include agricultural hazards, biological agents, adverse weather hazards, wildfires, and landslides.

C.3.1 Assets at Risk
This section considers Grover Beach’s assets at risk, including values at risk, critical facilities and infrastructure, historic assets, economic assets, and growth and development trends.

Values at Risk
The following data on property exposure is derived from the San Luis Obispo County 2019 Parcel and Assessor data. This data should only be used as a guideline to overall values in the City as the information has some limitations. The most significant limitation is created by Proposition 13. Instead of adjusting property values annually, the values are not adjusted or assessed at fair market value until a property transfer occurs. As a result, overall value information is likely low and does not reflect current market value of properties. It is also important to note that in the event of a disaster, it is generally the value of the infrastructure or improvements to the land

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City of Grover Beach | February 2020 Annex C.9
that is of concern or at risk. Generally, the land itself is not a loss. Table C.6 shows the exposure of properties (e.g., the values at risk) broken down by property type for the City of Grover Beach.

Table C.6 2019 Property Exposure for the City of Grover Beach by Property Types Property Type
Parcel
Count
Improved
Value
Content
Value Total Value
Agricultural 1 $3,139 $3,139 $6,278
Commercial 242 $71,707,475 $71,707,475 $143,414,950
Government/Utilities 37 $21,533 -- $21,533
Other/Exempt/Misc. 135 $31,280,820 -- $31,280,820
Residential 3,054 $506,840,814 $253,420,407 $760,261,221 Multi-Family Residential 600 $135,833,108 $67,916,554 $203,749,662 Mobile/Manufactured Homes 39 $2,752,757 $1,376,379 $4,129,136 Residential: Other 550 $102,234,078 $51,117,039 $153,351,117 Industrial 27 $11,177,087 $16,765,631 $27,942,718
Vacant 28 $4,325,265 -- $4,325,265
Total 4,713 $866,176,076 $462,306,623 $1,328,482,699
Source: Wood Plc analysis based on ParcelQuest and San Luis Obispo County Assessor’s Office data 2019 Critical Facilities and Infrastructure
A critical facility may be defined as one that is essential in providing utility or direction either during the response to an emergency or during the recovery operation. See Section 5 of the Base Plan for more details on the definitions and categories of critical facilities.

An inventory of critical facilities in the City of Grover Beach from San Luis Obispo County GIS is provided in Table C.7 and illustrated in Figure C.4. A more detailed list of the critical facilities, their location square footage and values from the City’s 2015 HMP can be found as an attachment to this Annex.

Table C.7 City of Grover Beach’s Critical Facilities
Facility Type Counts
Multi-modal Center (Amtrak Station) 1
Community Centers (evacuation centers
including City Hall)
3 Fire Stations 1
Local Law Enforcement 1
Private Schools 1
Public Schools 3
Emergency Communications Facility 1
Sewer Lift Stations 3
Storm Basin Pump Station 1
Water Booster Pumps 1
Water Reservoirs 3
Water Wells & Treatment Facilities 4
Total 23
Source: San Luis Obispo County Planning & Building, HIFLD 2017

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Transportation and Lifeline Facilities
State Route 1 and U.S. Highway 101 border the City of Grover Beach on the west and the northeast of the City limits. Route 1 serves as a two-lane arterial for the City and merges with Highway 101 north of the City. In addition to these major transportation routes adjacent to Grover Beach, the City also offers multi-modal transportation options for residents including bike lanes, bus routes and the Grover Beach Train Station.

According to the City’s 2015 LHMP the Grover Beach Train Station is listed as being vulnerable to earthquakes, flooding, wildfire and tsunami hazards. Other vulnerable City owned transportation and lifeline facilities were noted in the 2015 plan with a combined value of nearly $50 million. The complete list of vulnerable transportation and lifeline facilities can be found in an attachment to this Annex.

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City of Grover Beach | February 2020 Annex C.11
Figure C.4 City of Grover Beach Critical Facilities

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City of Grover Beach | February 2020 Annex C.12
Historic and Cultural Resources
While the City of Grover Beach has no registered state or federal historic sites, there are several assets within Grover Beach that define the community and represent the City’s history. Many of the historical sites of importance to Grover Beach have been converted into different uses but the historic buildings still stand. In honor of the City’s 50th Anniversary a self-guided tour pamphlet was created and lists the following historic sites. • Grover Beach City Hall – 154 South 8th Street
• Precision Automotive (now Grover Beach Fire Station) – 701 Rockaway Avenue • Grover City Hall/Fire Department (now Exploration Station) – 967 Ramona Avenue • Grover City Development (now Spoon Trade Restaurant) – 295 West Grand Avenue • White’s Malt Shop (now Enterprise Rental Car) – 502 West Grand Avenue • The Keen Agency (now Taco De Mexico) – 791 West Grand Avenue • Marshall – Spoo Sunset Funeral Chapel – 1239 Longbranch Avenue • Yeackel’s / Fairlane Department Store (now Ron’s Nursery)– 850 West Grand Avenue • Grover City Shoe – (now South County Sanitary) – 866 West Grand Avenue • Greg’s Restaurant (DarWish Cuisine) – 967 West Grand Avenue • Grover City Pharmacy (now Green Bargain) – 901 West Grand Avenue • First Southern Baptist Church (now Beacon Chiropractic) 902 West Grand Avenue • Grover City Feed Store (now Ben’s Computer Outlet) – 983 West Grande Avenue • Blinking Owl (now Villa Del Mar) – 110 West Grand Avenue • Pizza Fresh – 1301 West Grand Avenue;
• Mobile Station (now Nan’s Bookstore) – 1328 West Grand Avenue • Spears Residence (now Salon Dee) – 122 North 16th Street This is now Hogge Insurance Services • A&W Root Beer (now Higher Grounds) – 1754 Grande Avenue this is now Crossroads Cafe Source: City of Grover Beach Historic Self-Guided Tour http://www.grover.org/DocumentCenter/Home/View/1455 Natural Resources
Natural resources are important to include in benefit-cost analyses for future projects and may be used to leverage additional funding for projects that also contribute to community goals for protecting sensitive natural resources. The City of Grover Beach has designated areas on the coast as Coastal Open Space Zone; according to the City of Grover Beach Local Coastal Program (2014) this zone is designed to protect and preserve sensitive natural areas including but not limited to those containing significant habitat areas, rare or endangered plant and animal species, and erosion-prone lands. Awareness of natural assets and designated natural areas can lead to opportunities for meeting multiple objectives. For instance, protecting wetlands areas protects sensitive habitat as well as attenuates and stores floodwaters.

Economic Assets
Tourism and the industries that support tourists and tourism activities are one of the greatest economic assets in the City of Grover Beach. Additionally, the commercial cannabis industry has taken off and has become a critical economic asset for the City in terms of tax revenue. The City is located close to multiple destinations including Pismo State Beach, Oceano Dunes State Recreation Area, and the Guadalupe-Nipomo Dunes National Wildlife Refuge.

The HMPC reviewed the economic strengths and competitive advantages listed in the City of Grover Beach Final Economic Development Strategy (April 11, 2017), and identified the following:

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• Grover Beach is one of the few areas within the Southern SLO County area that has undeveloped industrial land, however these properties are quickly transforming into developed industrial and commercial holdings. • Growth in commercial cannabis. The commercial cannabis industry has played a major role in the last few years in redeveloping properties, as well as new industrial construction within the undeveloped industrial zone. The City will continue to be a future “synergy” location for commercial cannabis within San Luis Obispo County with testing labs, manufacturing, warehousing, and retail sales of commercial cannabis. • Transient occupancy tax revenue recovered quickly following the Great Recession. The development of additional lodging facilities including the Grover Beach Lodge, the Northeast Grover Beach Mixed-Use Development, and 950 El Camino Real. Development of these hotels will provide Grover Beach with an opportunity to increase tourism to the community.
• Higher quality retail and food service establishments have entered the market and increased the City’s regional draw
• Grover Beach has a reputation as a business-friendly community with a local government that is fairly easy to work with, compared to other communities.

C.3.2 Estimating Potential Losses
Note: This section details vulnerability to specific hazards of high or medium significance, where quantifiable, and/or where (according to Planning Team member input) it differs from that of the overall County.

Table C.6 above shows Grover Beach’s exposure to hazards in terms of number and value of structures. San Luis Obispo County’s parcel and assessor data was used to calculate the improved value of parcels. The most vulnerable structures are those in the floodplain (especially those that have been flooded in the past), unreinforced masonry buildings, and buildings built prior to the introduction of modern-day building codes.

Impacts of past events and vulnerability to specific hazards are further discussed below. (See Section 5.1 for more detailed information about these hazards and their impacts on San Luis Obispo County as a whole.) Dam Incidents
The Lopez Dam, a high hazard earthen dam located upstream from the community, poses the greatest risk to Grover Beach if an incident was to occur. Failure of the Lopez Dam would follow the Arroyo Grande Creek in a westerly direction approximately 3,000 feet in each direction of the centerline of the creek channel. A total of 5,319 persons and 2,392 properties would be inundated in the City of Grover Beach if the Lopez Dam was to fail.

Note that the Lopez Dam inundation mapping used to arrive at this information came from the County of San Luis Obispo’s Planning & Building/GIS Departments.

A majority of properties at risk are residential (2,119 properties) and have a combined value of $539,526,282 (refer to Table C.8 below). Refer to the Critical Facilities in the Lopez Dam Inundation Area, by Type of Facility table, in the Base Plan for details on the type of various types of critical facilities at risk. A failure of the Lopez Dam would also affect Highway 101 impeding or reducing flows of goods, people and resources into and out of Grover Beach and potentially impacting the entire region. There have been no past dam incidents or failures in the jurisdiction of the City of Grover Beach. Refer to the Dam Incidents Section in Chapter 5 of the Base Plan for additional discussion on the potential impacts of dam incidents in the County.

This information was derived from the most recent dam inundation mapping, parcel, and critical facility data available to the County of San Luis Obispo. The Grover Beach planning team added the following comments related to dam failure and inundation hazards:

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• Lopez Dam failure would result in overtopping of Arroyo Grande Creek which would cause a backwater condition in Meadow Creek, primarily along Highway 1 and the Union Pacific Railroad tracks. • There are two facilities deemed critical to the City which are at risk from this flooding: The Train Station and the Front Street Sanitary Sewer Lift Station. However, neither of these was originally included in the countywide critical facility dataset and as such were not mapped or included in tables or summary results. • Grover Beach would be surrounded by flood waters and Highway 101 would be impassible at Oak Park Boulevard if the Lopez Dam were to cause inundation downstream, which would limit ingress/egress to Highway 101 to the northwest and significantly restrict access by emergency services from outside the city.

Table C.8 Lopez Dam Inundation Estimate Losses by Property Type Property Type
Parcel
Count
Improved
Value
Content
Value Total Value Loss Estimate Population
Agricultural 1 $3,139 $3,139 $6,278 $3,139 --
Commercial 120 $24,487,269 $24,487,269 $48,974,538 $24,487,269 -- Government/Utilities 29 -- -- $0 $0 --
Other/Exempt/Misc. 84 $21,487,616 -- $21,487,616 $10,743,808 -- Residential 1,488 $234,335,647 $117,167,824 $351,503,471 $175,751,735 3,735 Multi-Family Residential 316 $74,162,097 $37,081,049 $111,243,146 $55,621,573 793 Mobile/Manufactured Homes 2 $391,213 $195,607 $586,820 $293,410 5 Residential: Other 313 $50,795,230 $25,397,615 $76,192,845 $38,096,423 786 Industrial 21 $8,932,723 $13,399,085 $22,331,808 $11,165,904 -- Vacant 18 $2,764,023 -- $2,764,023 $1,382,012 --
TOTAL 2,392 $417,358,957 $217,731,586 $635,090,543 $317,545,272 5,319 Source: San Luis Obispo County Planning and Building Dept., Assessor’s Office, ParcelQuest, Wood Plc Parcel Analysis

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Figure C.5 City of Grover Beach Dam Inundation Extent

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Figure C. 6 Dam Inundation Map

Source San Luis Obispo County

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City of Grover Beach | February 2020 Annex C.17
Drought and Water Shortage
The City of Grover Beach’s main water supplies are from surface water and groundwater. The surface water supply source is Lake Lopez or the Lopez Project, which is also the main supply for the other communities in the Five Cities Area. Grover Beach has an entitlement of 800 acre-feet per year (afy) from the Lopez Project. Grover Beach also receives a portion of its water supply (1,198 afy) from the Arroyo Grande Plain of the Tri-Cities Mesa Subbasin of the Santa Maria Valley Groundwater Basin which also supplies water for the cities of Arroyo Grande, Pismo Beach and the Oceano CSD. A majority of water consumption is by residential properties. According the San Luis Obispo Council of Government (COG) report, 2050 Regional Growth Forecast for San Luis Obispo County (2017), the figure below shows the projected water demand in the City of Grover Beach from 2015 to 2030. The City of Grover Beach’s population is not expected to grow dramatically by 2035 and as a result the water demand is not projected to increase over the next 20 to 30 years.

Figure C.7 Projected Water Demand in Grover Beach, 2015 to 2030 Source: 2050 Regional Growth Forecast for San Luis Obispo County, San Luis Obispo Council of Governments and Beacon Economics, June 2017 Severe drought events in recent years have caused concerns on the impact on the City’s limited water supply. In 2006 the City of Grover Beach adopted the Water Shortage Contingency Plan which defines what constitutes a recommendation for a water shortage proclamation, provides specific triggers for actions stages and designated responsibilities of City Council and Departments. The Grover Beach City Council annually reviews rainfall and other information on water amounts, and determines the appropriate actions to take. In 2014, with the below average rainfall and low storage levels in Lopez Lake, City Council determined the City’s water supplies were headed towards a condition of severe water shortage. As a result, on June 16, 2014 the City Council declared a Stage III Water Shortage and mandatory water conservation measures. The City had previously been under a Stage II Declaration for two years that placed voluntary prohibitions on water usage. The Declaration required those voluntary prohibitions become mandatory and all customers to reduce their water usage by 10 percent.

Stage III also gave the City the authority to impose penalties for failure to comply with water reduction or use prohibitions.

The returned Data Collection Guide from the City of Grover Beach Planning Team noted that due to the region’s water supply being served by a mix of reservoir and pumped well water, the state-wide drought in California has led to regional impacts, including watering restrictions that according to the Planning Team has led to landscaping on many properties to die, increasing the risk of wildfire for some properties.

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Earthquake
The City of Grover Beach is vulnerable to various types of seismic hazards including fault rupture, groundshaking and liquefaction. The Wilmar Avenue fault is the only mapped fault near the City of Grover Beach. The fault runs along the northern portion of the City limits. The Wilmar Avenue fault is exposed in the sea cliff near Pismo Beach and buried portions are generally aligned along the Highway 101. The fault is considered potentially active and a moderate fault rupture hazard to the City of Grover Beach.

In addition to the Wilmar Avenue fault there are a number of active and potentially active faults in proximity of the Grover Beach that are capable of producing strong groundshaking within the City limits. According to the Technical Background Report of the County Safety Element (1999), the San Andreas fault and the offshore Hosgri fault present the most likely sources of groundshaking for Grover Beach. The following table from the Technical Background Report and recreated for the 2019 Hazard Mitigation Plan, show the potential sources of groundshaking and approximate distance from Grover Beach.

Table C.9 Sources of Groundshaking in the Vicinity of Grover Beach Fault
Approximate
Distance
(kilometers)*
Maximum
Earthquake
Maximum
Probable
Earthquake
Anticipated
Acceleration
Range (g)
Wilmar Avenue 1 6.5 4 0.1-0.7
Blind Thrust Point San Luis 3 7.5 6 0.3-0.7
Los Osos 9 7 5 0.1-0.4
Pecho 6 6.3 3 <0.1-0.3
Casmalia-Orcutt- Little Pine 19 7.5 6 0.1-0.4
Hosgri 21 7.5 6.5 0.2-0.3
Rinconada 23 7.5 6.3 0.1-0.3
Los Alamos- Base Line 27 7 5.8 0.1-0.2
San Andreas 66 8.3 8 0.1-0.2
*Measured from Grand Avenue and North 8th
Source: San Luis Obispo County Safety Element Technical Background Report, December 1999 As a coastal community, portions of Grover Beach are underlain by layers of unconsolidated sand and young alluvium which have a high potential to become liquefied during groundshaking events. The following table shows the various property types in the City of Grover Beach at risk of liquefaction. Based on this analysis residential property types, including mobile and manufactured homes, are at the greatest risk of liquefaction in Grover Beach compared to other types of properties in the community. There are 4,243 residential properties at risk with a combined improved value of $747,660,747. Figure C.8 below depicts the areas of Grover Beach at risk of liquefaction.

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Table C.10 City of Grover Beach Moderate Liquefaction Risk by Property Type Property Type Parcel Count Improved Value
Agricultural 1 $3,139
Commercial 242 $71,707,475
Government/Utilities 37 $21,533
Other/Exempt/Misc. 135 $31,280,820
Residential 3,054 $506,840,814
Multi-Family Residential 600 $135,833,108
Mobile/Manufactured Homes 39 $2,752,757
Residential: Other 550 $102,234,078
Industrial 27 $11,177,087
Vacant 27 $4,262,765
Total 4,712 $866,113,576
Source: San Luis Obispo County Planning and Building Dept., Assessor’s Office, ParcelQuest, Wood Plc Parcel Analysis

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Figure C.8 Areas of the City of Grover Beach at Risk of Liquefaction

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Flood
The City of Grover Beach suffers from regular flooding in isolated areas. Flooding generally occurs after heavy rainfall events and overtopping of creeks and rivers. The Arroyo Grande Creek poses a risk of overtopping and causes Meadow Creek to flood along the western and northern portions of the City. Flooding along Meadow Creek has caused roads to be blocked by flood waters, causing difficulties in access to and egress from portions of the City. According to the City’s Safety Element, northern and western portions of the City adjacent to Meadow Creek are at the greatest risk of being impacted by a 100-year flood. The areas at risk of flooding in the northern portions of the City are isolated to an area south of U.S. 101 and north of Nacimiento Avenue where a mobile home subdivision is located. The South Grover Beach and West Grover Beach neighborhoods are also reported to experience flooding issues. Flooding in the western portion of the City is isolated to areas west of the Union Pacific Railroad tracks and areas just east of the railroad tracks in the southwest corner of the City where drainage is trapped by the railroad grade.

The City’s 2015 LHMP notes two properties located below street level that are subject to local flooding issues.

One parcel located at South 5th Street and Manhattan Avenue is subject to flooding from a 50-year storm event when sandbags are not used or if cars are parked on the street. The second parcel is located at 6th Street and Mentone Avenue is subject to a 75-100-year storm event, but after an asphalt berm was constructed flooding was alleviated under storms of lesser magnitude. Refer to the Flood Section in the Base Plan for further information on the areas of that are at risk of flooding as well as past flood events that have impacted the City of Grover Beach.

Values at Risk
A flood vulnerability assessment was completed during the 2019 update, following the methodology described in Section 5 of the Base Plan. Table C.11 and Table C.12 summarize the values at risk in the City’s 100-year and 500-year floodplain, respectively. These tables also detail loss estimates for each flood.

Table C.11 City of Grover Beach’s FEMA 1% Annual Chance Flood Hazard by Property Type Property Type Parcel Count Improved Value Content Value Total Value Loss Estimate Commercial 1 $751,181 $751,181 $1,502,362 $375,591
Government/Utilities 4 -- -- $0 $0
Other/Exempt/Misc. 1 -- -- $0 $0
Residential 6 $928,659 $464,330 $1,392,989 $348,247
Mobile/Manufactured Homes 21 $1,087,774 $543,887 $1,631,661 $407,915 Total 33 $2,767,614 $1,759,398 $4,527,012 $1,131,753
Source: San Luis Obispo County Planning and Building Dept., Assessor’s Office, ParcelQuest, Wood Plc Parcel Analysis Table C.12 City of Grover Beach’s FEMA 0.2% Annual Chance Flood Hazard by Property Type Property Type Parcel Count Improved Value Content Value Total Value Loss Estimate Government/Utilities 1 -- -- $0 $0
Other/Exempt/Misc. 1 $137,118 -- $137,118 $34,280
Mobile/Manufactured Homes 1 $116,341 $58,171 $174,512 $43,628 Vacant 1 $62,500 -- $62,500 $15,625
Total 4 $315,959 $58,171 $374,130 $93,532
Source: San Luis Obispo County Planning and Building Dept., Assessor’s Office, ParcelQuest, Wood Plc Parcel Analysis

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Based on this analysis, the City of Grover Beach has significant assets at risk to the 100-year and greater floods.

There are 33 improved parcels located within the 100-year floodplain for a total value of over $4 million. An additional 4 improved parcels valued at $374,130 fall within the 500-year floodplain.

Applying the 25 percent damage factor as previously described in Section 5 of the Base Plan, there is a 1 percent chance in any given year of a 100-year flood causing roughly $1 million in damage in the City of Grover Beach, and a 0.2 percent chance in any given year of a 500-year flood causing $1,225,285 in damages (combined damage from both floods). The tables above show the properties at risk to flooding in the City of Grover Beach in relation to the mapped floodplain, based on the parcels that have improvements and parcel centroids that intersect the flood hazard areas.

Limitations: This model may include structures in the floodplains that are elevated at or above the level of the base-flood elevation, which will likely mitigate flood damage. Also, the assessed values are well below the actual market values. Thus, the actual value of assets at risk may be significantly higher than those included herein.

Population at Risk
Using parcel data from the County and the digital flood insurance rate map, population at risk was calculated for the 100-year and 500-year floods based on the number of residential properties at risk and the average number of persons per household (2.47). The following are at risk to flooding in the City of Grover Beach:
• 100-year flood— 68 people
• 500-year flood— 3 people
• Total flood— 71 people
Insurance Coverage, Claims Paid, and Repetitive Losses
The City of Grover Beach joined the National Flood Insurance Program (NFIP) on August 1, 1984. NFIP Insurance data indicates that as of April 18, 2019, there were 36 flood insurance policies in force in the City with $9,940,700 of coverage. All 36 policies were residential (32 for single-family homes, 2 for 2-4-unit homes and 2 for all other residential). There are 8 polices in A01-30 & AE zones and no policies in A zones. The remaining 28 are in B, C, and X zones.

There have been 2 historical claims for flood losses totaling $14,881.56. Both claims were for residential properties (1 single family and 1 2-4 family) and were in B, C or X zones; According to the FEMA Community Information System accessed 4/18/2019 there are no Repetitive Loss or Severe Repetitive Loss properties located in the jurisdiction.

Critical Facilities at Risk
Critical facilities are those community components that are most needed to withstand the impacts of disaster as previously described. Based on GIS analysis of the provided critical facility dataset by the County of San Luis Obispo combined with the HIFLD dataset, there are no critical facilities at risk of flooding in a 100-year or 500- year storm event. However, the Planning Team notes that the City’s Train Station as well as the Nacimiento Sanitary Sewer Lift Station (and possibly other critical facilities not included in the countywide dataset used for analysis) should be at risk of flooding of the 100-year event, as they fall within the AE special flood hazard areas.

Coastal Storm/Coastal Erosion/Sea Level Rise
The City of Grover Beach is characterized by its sandy beaches backed by low sand dunes covered with dense vegetation. The sandy beaches provide structures and development with moderate protection from storm

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waves, although active erosion of beaches and dunes currently impacts low-lying coastal recreation uses (i.e. golf course), commercial, and residential (i.e. mobile homes) structures. The City has been impacted by storm wave hazards in the past; during a winter storm in 1983, timber beach access ramps were damaged by storm waves.

Refer to Section 5 of the Base Plan for more information on the risk that coastal hazards pose to San Luis Obispo County and the City of Grover Beach.

As part of the 2019 HMP planning effort, a sea level rise risk assessment was completed to determine how sea level rise may affect coastal jurisdictions and critical facilities and how coastal flooding might be exacerbated in the future. Table C.13 and Table C.14 summarize the properties at risk of inundation by sea level rise and sea level rise combined with a 1% annual chance coastal flood. The area of inundation by sea level rise and sea level rise combined with the 1% coastal flood are shown in Figure C.9 and Figure C.10, respectively. No critical facilities were determined to be at risk in the sea-level rise scenarios. See Section 5.3.4 Coastal Storm/Coastal Erosion/Sea Level Rise in the base plan for more details on the scenarios and data sources used for this analysis.

Table C.13 Properties Inundated by Sea Level Rise and Sea Level Rise with 1% Annual Chance Flood Property Type
25-cm
SLR
75-cm
SLR
300-cm
SLR
25-cm SLR
w/ 1% Flood
75-cm SLR
w/ 1% Flood
300-cm SLR
w/ 1% Flood
Commercial -- -- 6 -- -- 6
Government/Utilities -- -- 4 -- -- 7
Other/Exempt/Misc. -- -- 4 -- -- 9
Residential -- -- 2 -- -- 15
Multi-Family Residential -- -- 3 -- -- 9
Mobile/Manufactured Homes -- -- -- -- -- 1
Industrial -- -- 1 -- -- 3
Total -- -- 20 -- -- 50
Source: Wood analysis with USGS CoSMoS 3.1 data
Table C.14 Improved Values of Properties Inundated by Sea Level Rise and Sea Level Rise with 1% Annual Chance Flood
Property Type
25-cm
SLR
75-cm
SLR
300-cm
SLR
25-cm SLR
w/ 1% Flood
75-cm SLR
w/ 1% Flood
300-cm SLR
w/ 1% Flood
Commercial -- -- $834,388 -- -- $834,388
Government/Utilities -- -- -- -- -- --
Other/Exempt/Misc. -- -- $3,181,722 -- -- $3,883,627
Residential -- -- $198,637 -- -- $1,675,517
Multi-Family Residential -- -- $971,575 -- -- $3,466,989 Mobile/Manufactured Homes -- -- -- -- -- $305,343
Industrial -- -- $62,392 -- -- $107,956
Total -- -- $5,248,714 -- -- $10,273,820
Source: Wood analysis with USGS CoSMoS 3.1 data

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Figure C.9 Grover Beach Sea Level Rise Scenario Analysis: Tidal Inundation Only

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Figure C.10 Grover Beach Sea Level Rise Scenario Analysis: Tidal Inundation and 1% Annual Chance Flood

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Tsunami and Seiche
Tsunami inundation poses a risk to all coastal communities in the County of San Luis Obispo. Offshore faults and related seismic activity could cause a tsunami event off the coast of Grover Beach, even if the faults are thousands of miles away. Grover Beach’s wide beaches and coastal dunes in general provide protection from coastal hazards, although the low-lying areas where Meadow Creek meets the ocean is considered to be at moderate risk of tsunami hazards. Based on the GIS analysis there is one critical facility, a water treatment facility, that is at risk of tsunami inundation. According to the City’s 2015 LHMP the areas shown on Figure C.8 are vulnerable to tsunami hazards.

Table C.13 below breaks down the tsunami risk in the City of Grover Beach by property type.

Table C.15 Properties at Risk of Tsunami Inundation
Property Type
Property
Count
Improved
Value
Content
Value Total Value Loss Estimate Population
Commercial 64 $11,703,763 $11,703,763 $23,407,526 $23,407,526 -- Government/Utilities 14 -- -- $0 $0 --
Other/Exempt/Misc. 34 $15,190,469 -- $15,190,469 $15,190,469 -- Residential 59 $6,180,075 $3,090,038 $9,270,113 $9,270,113 148 Multi-Family Residential 31 $8,830,232 $4,415,116 $13,245,348 $13,245,348 78 Mobile/Manufactured
Homes
1 $305,343 $152,672 $458,015 $458,015 3
Residential: Other 8 $1,100,411 $550,206 $1,650,617 $1,650,617 20 Industrial 14 $5,461,004 $8,191,506 $13,652,510 $13,652,510 -- Vacant 8 $1,859,350 -- $1,859,350 $1,859,350 --
Total 233 $50,630,647 $28,103,300 $78,733,947 $78,733,947 249 Source: San Luis Obispo County Planning and Building Dept., Assessor’s Office, ParcelQuest, Wood Plc Parcel Analysis Based on this analysis there are 233 properties with a combined value of over $78 million vulnerable to the impacts of a tsunami. Of the properties at risk, 99 are residential properties (including mobile/manufactured homes) and have a combined loss estimate of over $16 million and 64 are commercial properties.

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Figure C.11 Areas of City of Grover Beach at Risk to Tsunami Inundation

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The area along Highway 1 is also expected to be in the tsunami inundation zone, which would have cascading impacts on people being able to evacuate. The LPT noted that Grover Beach swells with beachgoing tourists including an estimated 10,000 to 40,000 visitors to the Oceano Dune State Park on a busy summer weekend or holiday; these visitors may not be familiar with the risk posed by tsunamis, leading them to ignore warnings.

Refer to Section 5 of the Base Plan for additional information related to the past tsunami events and analysis on future vulnerability.

Human Caused: Hazardous Materials
The Cal OES Warning Center reports 21 hazardous materials incidents in the City of Grover Beach from 1994 through October 24, 2018; as noted in Section 5.3.13 of the county plan, this likely excludes a large number of unreported minor spills. This constitutes 1% of the hazardous materials incidents reported countywide during the same time frame and averages out to roughly 0.8 incidents per year. As noted in Section 5.3.13, only around 6% of reported hazardous materials incidents result in injuries, fatalities, or evacuations. As shown in Base Plan there are no significant hazardous materials facilities located in the City. However, Grover Beach sits within the Emergency Planning Zone for the Diablo Canyon Nuclear Power Plant.

Capability Assessment
Capabilities are the programs and policies currently in use to reduce hazard impacts or that could be used to implement hazard mitigation activities. This capabilities assessment is divided into five sections: regulatory mitigation capabilities, administrative and technical mitigation capabilities, fiscal mitigation capabilities, mitigation outreach and partnerships, and other mitigation efforts.

To develop this capability assessment, the jurisdictional planning representatives used a matrix of common mitigation activities to inventory which of these policies or programs were in place. The team then supplemented this inventory by reviewing additional existing policies, regulations, plans, and programs to determine if they contributed to reducing hazard-related losses.

During the plan update process, this inventory was reviewed by the jurisdictional planning representatives and Wood consultant team staff to update information where applicable and note ways in which these capabilities have improved or expanded. Additionally, in summarizing current capabilities and identifying gaps, the jurisdictional planning representatives also considered their ability to expand or improve upon existing policies and programs as potential new mitigation strategies. The City of Grover Beach’s capabilities are summarized below.

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C.4.1 Regulatory Mitigation Capabilities
Table C.16 City of Grover Beach Regulatory Mitigation Capabilities Regulatory Tool Yes/No Comments
General plan Yes
Zoning ordinance Yes
Subdivision ordinance Yes
Growth management ordinance Yes
Floodplain ordinance Yes Chapter 5 Development Code, 2012 Other special purpose ordinance (stormwater,
water conservation, wildfire) Yes Stormwater only
Building code Yes
Fire department ISO rating Yes 3
Erosion or sediment control program Yes
Stormwater management program Yes
Site plan review requirements Yes
Capital improvements plan Yes
Economic development plan Yes City of Grover Beach Final Economic Development Strategy April 11, 2017
Local emergency operations plan Yes
Other special plans Yes
Local Coastal Program (Aug. 15, 2014), Open
Space Management Plan, Continuity of
Operations Plan; Recovery Plan
Flood Insurance Study or other engineering
study for streams Yes
Elevation certificates (for floodplain
development) Yes
C.4.2 Administrative/Technical Mitigation Capabilities
Table C.17 identifies the personnel responsible for activities related to mitigation and loss prevention in Grover Beach

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Table C.17 City of Grover Beach Administrative/Technical Mitigation Capabilities Personnel Resources
Yes/
No Department/Position
Planner/engineer with knowledge of land
development/land management practices Yes Community Development, Public Works Director/Engineer Engineer/professional trained in construction
practices related to buildings and/or infrastructure Yes Public Works Director/Engineer, Building official (contract) Planner/engineer/scientist with an understanding of
natural hazards Yes Public Works Director/Engineer, Building official (contract) Personnel skilled in GIS Yes Community Development
Full time building official No Contract
Floodplain manager Yes Public Works Director/Engineer (?) Emergency manager Yes
Grant writer No
GIS Data Resources
(Hazard areas, critical facilities, land use, building
footprints, etc.)
Yes
Warning systems/services
(Reverse 9-11, outdoor warning signals) Yes
C.4.3 Fiscal Mitigation Capabilities
Table C.18 identifies financial tools or resources that the City could potentially use to help fund mitigation activities.

Table C.18 City of Grover Beach Fiscal Mitigation Capabilities Financial Resources
Accessible/Eligible
to Use (Yes/No)
Community Development Block Grants Yes
Capital improvements project funding Yes
Authority to levy taxes for specific purposes Yes (As needed) Fees for water, sewer, gas, or electric services No
Impact fees for new development Yes
Incur debt through general obligation bonds Yes
Incur debt through special tax bonds Yes
Incur debt through private activities No
Withhold spending in hazard prone areas No
C.4.4 Opportunities for Enhancement
Based on the capabilities assessment, the City of Grover Beach has several existing mechanisms in place that already help to mitigate hazards. In Grover Beach’s 2015 LHMP the City conducted a “self-assessment of capability” in which they rated (limited to high) the degree of capability they believed the community had. The City noted having a high degree of capability for planning and regulatory capabilities and political capability, but a moderate rating for their administrative, technical, and fiscal capabilities. This may be an opportunity for the City to expand or improve on these policies and programs to further protect the community. Future

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improvements may include providing training for staff members related to hazards or hazard mitigation grant funding in partnership with the County and Cal OES. Additional training opportunities will help to inform City staff members on how best to integrate hazard information and mitigation projects into their departments.

Continuing to train City staff on mitigation and the hazards that pose a risk to the City of Grover Beach will lead to more informed staff members who can better communicate this information to the public.

Mitigation Strategy
C.5.1 Mitigation Goals and Objectives
During the 2019 Planning Process the Grover Beach Planning Team reviewed the mitigation goals and objectives from the 2015 LHMP and determined the existing number and intent of the goals and objectives continue to be appropriate, and no revisions or additions were necessary. The City of Grover Beach’s 2019 hazard mitigation goals and objectives are the following:

Goal 1. Minimize the level of damages and losses due to earthquake.

Objective 1.a - Develop a comprehensive approach to reducing the level of damage and losses due to earthquakes.

Objective 1.b – Perform a safety review of all current City structures and facilities, paying close attention to disaster proofing all facilities. Convene a group of department heads to prioritize the needs and research funding strategies.

Objective 1.c – Develop disaster preparedness caches of supplies, tools, and equipment for use by City employees, so that they may continue to perform their duties during a major emergency.

Goal 2. Minimize the level of damage and losses due to flooding.

Objective 2.a – Research and identify flooding vulnerability within the City of Grover Beach.

Goal 3. Minimize the level of damage and losses to people due to wildland and structure fires.

Objective 3.a – Educate the public about wildland and structure fire danger.

Goal 4. Minimize the level of damage and losses to people and surrounding areas due to tsunami events and increase understanding and response to tsunamis.

Objective 4.a – Increase the understanding and response to tsunamis within the community by working with Federal and State agencies to better understand and prepare for the hazards of tsunamis, and improve the ability to respond to tsunami warnings provided by NOAA’s West Coast and Alaska Tsunami Warning Center.

Goal 5. Minimize the potential for dam failure and the impacts from such incidents.

Objective 5.a – Work with regional partners to reduce the negative impact on the community as a result of a dam incident or failure through proper planning and infrastructure maintenance and improvement.

Objective 5.b – Develop a public outreach program to educate residents and businesses in the dam failure inundation areas on their responsibilities and emergency preparedness.

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Objective 5.c – Develop a dam failure emergency response plan.

Objective 5.d – Develop a hazard alert system to allow the city and regional partners to contact and alert our residents and businesses about the possibility of a dam failure and flooding caused by a dam failure.

Continued Compliance with the National Flood Insurance Program The City has been an NFIP participating community since 1984. In addition to the mitigation actions identified herein the City will continue to comply with the NFIP. This includes ongoing activities such as enforcing local floodplain development regulations, including issuing permits for appropriate development in Special Flood Hazard Areas and ensuring that this development is mitigated in accordance with the regulations. This will also include periodic reviews of the floodplain ordinance to ensure that it is clear and up to date and reflects new or revised flood hazard mapping.

C.5.2 Completed 2015 Mitigation Actions
Grover Beach has not completed any of the mitigation actions from the 2015 LHMP, although of Grover Beach’s thirteen mitigation actions, nine (9) are implemented annually and two (2) are in progress to be completed.

These actions that are implemented annually help to reduce vulnerability to hazards and increase local capability to implement additional mitigation actions.

C.5.3 Mitigation Actions
The planning team for the City of Grover Beach identified and prioritized the following mitigation actions based on the risk assessment. Background information and information on how each action will be implemented and administered, such as ideas for implementation, responsible office, potential funding, estimated cost, and timeline, are also included. Actions were prioritized using the process described in Section 7.2.1 of the Base Plan.

Actions with an ‘*’ are those that mitigate losses to future development.

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Table C. 19 City of Grover Beach’s Mitigation Action Plan ID Hazard(s)
Mitigated Description/Background/Benefits Lead Agency and Partners Cost
Estimate
Potential
Funding Priority Timeline
Status/
Implementation
Notes
GB.1
Adverse
Weather:

Wind, Rain,
Heat
Reduce the negative impact on the community due to
weather-related incidents that could include heavy
rain, high winds and extreme heat. Benefits: Improved
water runoff in low-lying areas, reduced pooling and
low impact street flooding; tree trimming, and removal
of old trees will reduce falling limbs and trees
Public Works
Department
$125,000
-
$250,000
PDM grants;
general funds;
capital
improvement
funds; staff
time
Low 3-5 yrs. New
GB.2
Agricultural
Pest
Infestation
and Disease
Help reduce the negative impact on the agricultural
community due to pest infestation and disease.

Benefits: Through community development and
planning, work with existing agricultural property
owners to develop safeguards to protect against pest
infestation and disease
Community
Development
Department
Little to
no Cost
Private
funding and
staff time
Medium 3-5 yrs. New
GB.3*
Coastal
Storm,
Erosion and
Sea Level
Rise
Work in partnership with the State of California and
County of San Luis Obispo to identify community
impacts associated with coastal erosion through sea
level rise and storms. In coordination with the State
and County, map areas of the City that may be
affected by sea level rise. Benefits: Lessen the impacts on the community from the effects of sea level rise and coastal erosion
Public Works
Department;
Community
Development;
Emergency
Preparedness
Less than
$10,000
PDM grants;
general funds;
capital
improvement
funds; staff
time
Medium
More
than 5
yrs.

New
GB.4* Dam Failure
In collaboration with state, county and other local
governments, reduce the negative impact on the
community as a result of a dam incident or failure
through proper planning and infrastructure
maintenance and improvement. City Staff will map
areas of potential inundation via its Geographic
Informational System and continue to implement the
San Luis Obispo County Office of Emergency Services
(OES) Emergency Plan. Benefits: Lessen the potential
Public Works
Department;
Community
Development;
Emergency
Preparedness
Less than
$10,000
PDM grants;
general funds;
capital
improvement
funds; staff
time
Medium 3-5 yrs. New

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ID Hazard(s)
Mitigated Description/Background/Benefits Lead Agency and Partners Cost
Estimate
Potential
Funding Priority Timeline
Status/
Implementation
Notes
for dam failure and reduce the likelihood of this hazard occurring
GB.5* Drought
In collaboration with state, county and other local
governments, reduce the negative impact of drought
on the community through proper planning and
infrastructure maintenance and improvement; continue
to monitor well levels to prevent seawater intrusion
while pursuing opportunities for regional recycled
water projects that will result in groundwater injection; implement water efficient landscaping. Benefits: Avoid
sea water intrusion; lessen potential negative impacts
on the community as a result of drought or water
shortage
Public Works;
Community
Development
Department
Less than
$10,000
PDM grants;
general funds;
capital
improvement
funding; staff
time
Medium
More
than 5
yrs.

New
GB.6 Earthquake Identify and catalog seismically vulnerable structures Emergency Preparedness
Less than
$10,000
PDM Grant,
General
Funds, Capital
Improvement
funds, Staff
time
High
More
than 5
yrs.

Deferred. Limited
URM structures.

Limited staff and
fiscal resources
GB.7* Earthquake Implement policies, procedures and regulations which reduce the exposure to earthquake hazards
Emergency
Preparedness
Little to
no cost
PDM Grant,
General
Funds, Capital
Improvement
funds, Staff
time
High
More
than 5
yrs.

Annual
Implementation.

Building and Fire
Codes
GB.8 Earthquake Protect the improved property and infrastructure vulnerable to earthquake hazards
Emergency
Preparedness
Less than
$10,000
PDM Grant,
General
Funds, Capital
Improvement
High
More
than 5
yrs.

Annual
Implementation.

Building and Fire
Codes

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ID Hazard(s)
Mitigated Description/Background/Benefits Lead Agency and Partners Cost
Estimate
Potential
Funding Priority Timeline
Status/
Implementation
Notes
funds, Staff
time
GB.9 Fire Encourage the 100' Defensible Space around
structures in the Wildland Urban Interface
Fire
Department
Little to
no cost
California Fire
Safe Council,
Fire
Prevention
Grant
Funding, PDM
Grant,
General
Funds, Capital
Improvement
funds, Staff
Time
Medium Annual Annual
Implementation
GB.10 Fire Continue weed abatement program
Fire
Department
Little to
no cost
California Fire
Safe Council,
Fire
Prevention
Grant
Funding, PDM
Grant,
General
Funds, Capital
Improvement
funds, Staff
Time
Medium Annual Annual
Implementation
GB.11
*
Fire Enforce building codes and ordinances that eliminate the use of wood shake roofs
Fire
Department
Little to
no cost
California Fire
Safe Council,
Fire
Prevention
Medium Annual Annual
Implementation

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ID Hazard(s)
Mitigated Description/Background/Benefits Lead Agency and Partners Cost
Estimate
Potential
Funding Priority Timeline
Status/
Implementation
Notes
Grant
Funding, PDM
Grant,
General
Funds, Capital
Improvement
funds, Staff
Time
GB.12
*
Fire Enforce codes and ordinances that require fire
sprinkler systems in all new structures constructed
Fire
Department
Little to
no cost
California Fire
Safe Council,
Fire
Prevention
Grant
Funding, PDM
Grant,
General
Funds, Capital
Improvement
funds, Staff
Time
Medium Annual Annual
Implementation
GB.13
*
Fire
Create a Fire-Smart Community by developing a
comprehensive approach to reducing damage and loss
due to fires; encourage the 100' defensible space
around structures in the Wildland-Urban Interface
(WUI); continue weed abatement program to reduce
the threat of fire around open spaces; enforce building codes and ordinances that eliminate the use of wood
shake roofs; enforce codes and ordinances that require
fire sprinkler systems consistent with the California
Building Code
Fire
Department;
Community
Development;
Emergency
Preparedness
Little to
no cost
California Fire
Safe Council;
Fire
Prevention
Grants; PDM
Grants; FEMA
funding;
General
Funding;
Capital
Improvement
Medium
More
than 5
yrs.

New

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ID Hazard(s)
Mitigated Description/Background/Benefits Lead Agency and Partners Cost
Estimate
Potential
Funding Priority Timeline
Status/
Implementation
Notes
Funds; Staff
Time
GB.14
*
Flood
Implement policies procedures and regulations which
reduce the exposure to flood hazards; protect the
improved property, natural resources and life
vulnerable to flood hazards; reduce the vulnerability of community assets, particularly research and identify
flooding vulnerability within the city by identifying
flood vulnerability within the city by identifying parcels with flood zones; identify funding needs and funding
sources; apply for pre-disaster mitigation grants and
commence mitigation projects; conclude mitigation
projects; evaluate effectiveness of mitigation actions
and critical facilities located in the 100-year floodplain Public Works;
Parks and
Recreation;
Community
Development;
Emergency
Preparedness
Little to
no cost
PDM grants;
general funds;
capital
improvement
funds; staff
time
Medium
More
than 5
yrs.

New
GB.15
*
Flood Implement policies, procedures and regulations which reduce the exposure to flood hazards
Recreation
and
Maintenance
Services,
Public Works
and
Emergency
Preparedness
Little to
no cost
PDM Grant,
General
Funds, Capital
Improvement
funds, Staff
time
High
More
than 5
yrs.

Annual
Implementation
GB.16 Flood Protect the improved property and infrastructure vulnerable to flood hazards
Recreation
and
Maintenance
Services,
Public Works
and
Emergency
Preparedness
$500,000
to
$1,000,00
0 PDM Grant,
General
Funds, Capital
Improvement
funds, Staff
time
High
More
than 5
yrs.

Annual
Implementation

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Annex C: City of Grover Beach

San Luis Obispo County Local Hazard Mitigation Plan
City of Grover Beach | February 2020 Annex C.34
ID Hazard(s)
Mitigated Description/Background/Benefits Lead Agency and Partners Cost
Estimate
Potential
Funding Priority Timeline
Status/
Implementation
Notes
GB.17 Flood
Reduce the vulnerability of community assets,
particularly critical facilities, located in the 100-year floodplain
Recreation
and
Maintenance
Services,
Public Works
and
Emergency
Preparedness
$500,000
to
$1,000,00
0 PDM Grant,
General
Funds, Capital
Improvement
funds, Staff
time
High
More
than 5
yrs.

Annual
Implementation
GB.18 Hazardous
Materials
Require businesses that use, store or transport
hazardous materials to ensure that adequate measures
are taken to protect public health and safety;
coordinate with allied agencies to prepare for hazmat
incidents; support training and exercises in response to hazmat incidents; coordinate responses and
investigations with the county hazmat team and Five
Cities Fire; add gas pipeline mapping to the City's GIS resources; continue to monitor the manufacture,
storage, transport of hazardous materials by working
with environmental health and public safety agencies
to identify effective mitigation actions or requirements that will help reduce the risk of incidents, including the spread of released materials; coordinate with the rail
line industries to prepare for train-related hazmat
incidents
Fire
Department;
Community
Development;
Emergency
Preparedness
Less than
$10,000
California Fire
Safe Council;
Fire
Prevention
Grants; PDM
Grants; FEMA
funding;
General
Funding;
Capital
Improvement
Funds; Staff
Time
Medium 3-5 yrs. New
GB.19 Tsunami
Develop a comprehensive action plan to reduce
damage from a tsunami; display standardized and easy
to read signs alerting community members of tsunami
hazard zones, evacuation routes and evacuation sites;
review tsunami inundation areas and educational
needs; review emergency policies and training needs;
review tsunami maps and evacuation plans
Public Works;
Community
Development;
Emergency
Services
$10,000
to
$50,000
PDM grants;
general funds;
capital
improvement
funds; staff
time
Medium 3-5yrs. New

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Annex C: City of Grover Beach

San Luis Obispo County Local Hazard Mitigation Plan
City of Grover Beach | February 2020 Annex C.35
ID Hazard(s)
Mitigated Description/Background/Benefits Lead Agency and Partners Cost
Estimate
Potential
Funding Priority Timeline
Status/
Implementation
Notes
GB.20 Tsunami Review Tsunami inundation areas and educational needs
Police
Department
Little to
no costs
PDM Grant,
General
Funds, Capital
Improvement
funds, Staff
time
Medium 3-5 yrs.

In progress.

Countywide
Tsunami Plan,
and identification
of local resource
needs. Staff and
fiscal constraints
GB.21 Tsunami Review emergency policies and training needs Police Department
Little to
no costs
PDM Grant,
General
Funds, Capital
Improvement
funds, Staff
time
Medium Annual Annual
Implementation
GB.22 Tsunami Review Tsunami plans, maps, and evacuation plans Police Department
Little to
no costs
PDM Grant,
General
Funds, Capital
Improvement
funds, Staff
time
Medium 3-5 yrs.

In progress.

Countywide
Tsunami Plan,
and identification
of local resource
needs. County
Fire Chiefs
identified cityspecific
evacuation plans
as a strategic
priority. Staff and
fiscal constraints
GB.23 Dam Failure
Work with our regional partners to reduce the negative
impact on the community as a result of a dam incident
or failure through proper planning and infrastructure
maintenance and improvement.

Public Works
Department,
Community
Development
Department,
$50,00 -
$100,000
PDM Grant,
FEMA grant,
General
Funds, Capital
Improvement
Medium 5 yrs New

Page 111 of 756 ends

Annex C: City of Grover Beach

San Luis Obispo County Local Hazard Mitigation Plan
City of Grover Beach | February 2020 Annex C.36
ID Hazard(s)
Mitigated Description/Background/Benefits Lead Agency and Partners Cost
Estimate
Potential
Funding Priority Timeline
Status/
Implementation
Notes
Emergency
Preparedness
funds, Staff
time
GB.24 Dam Failure
Develop a public outreach program to educate
residents and businesses in the dam failure inundation
areas on their responsibilities and emergency
preparedness.

Public Works
Department,
Community
Development
Department,
Emergency
Preparedness
$2,500 -
$5,000
PDM Grant,
FEMA grant,
General
Funds, Capital
Improvement
funds, Staff
time
Medium 2-3 yrs New
GB.25 Dam Failure Develop a dam failure emergency response plan.

Public Works
Department,
Community
Development
Department,
Emergency
Preparedness
$5,000 to
$10,000
PDM Grant,
FEMA grant,
General
Funds, Capital
Improvement
funds, Staff
time
Medium 2-3 yrs New
GB.26 Dam Failure
Develop a hazard alert system to allow the city and
regional partners to contact and alert our residents
and businesses about the possibility or a dam failure
and flooding caused by a dam failure.

Public Works
Department,
Community
Development
Department,
Emergency
Preparedness
Less than
$1,000,00
0 PDM Grant,
FEMA grant,
General
Funds, Capital
Improvement
funds, Staff
time
Low -
Medium 5 yrs New
* mitigates losses to future development

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Annex C: City of Grover Beach

San Luis Obispo County Local Hazard Mitigation Plan
City of Grover Beach | February 2020 Annex C.36
Implementation and Maintenance
Moving forward, the City will use the mitigation action table in the previous section to track progress on implementation of each project. As illustrated in Section 7.3.1 of the Base Plan, much progress has been made since the plan was originally developed. Implementation of the plan overall is discussed in Section 8 in the Base Plan.

C.6.1 Incorporation into Existing Planning Mechanisms
The information contained within this plan, including results from the Vulnerability Assessment, and the Mitigation Strategy will be used by the City to help inform updates and the development of local plans, programs and policies. The Public Works Department may utilize the hazard information when designing and implementing the City’s capital improvement projects, and the Planning and Building Divisions within the Community Development Department may utilize the hazard information when reviewing a site plan or other type of development applications. The City will also incorporate this LHMP into the Safety Element of their General Plan, as recommended by Assembly Bill (AB) 2140.

As described in Section 8 Implementation and Monitoring, the HMPC representatives from Grover Beach will report on efforts to integrate the hazard mitigation plan into local plans, programs and policies and will report on these efforts at the annual HMPC plan review meeting.

C.6.2 Monitoring, Evaluation and Updating the Plan
The City will follow the procedures to monitor, review, and update this plan in accordance with San Luis Obispo County as outlined in Section 8 of the Base Plan. The City will continue to involve the public in mitigation, as described in Section 8.3 of the Base Plan. The Chief of Police will be responsible for representing the City in the County HMPC, and for coordination with City staff and departments during plan updates. The City realizes it is important to review the plan regularly and update it every five years in accordance with the Disaster Mitigation Act Requirements as well as other State of California requirements.

Page 113 of 756 ends

Appendix C‐ 60 Day Notification to Cities and Counties
C i t y o f G r o v e r B e a c h

DEPARTMENT OF PUBLIC WORKS
154 S. 8th Street ❖Grover Beach, CA 93433 ❖805/473-4530 ❖[email protected] Visit our website at www.groverbeach.org
October 8, 2021
Wade Horton
County Administrative Officer
County of San Luis Obispo Public Works Department
1055 Monterey Street
San Luis Obispo, CA 93408
Subject: City of Grover Beach Urban Water Management Plan Update – 60 Day Notification Letter Dear Mr. Horton:

The City of Grover Beach (City) is currently in the process of reviewing and updating its Urban Water Management Plan (UWMP) for the 2020 cycle. The City is also preparing a Water Shortage Contingency Plan (WSCP), a detailed proposal for the City’s actions in the event of a water shortage condition. The Department of Water Resources requires water suppliers to update their UWMP every five years. Among other things, the UWMP will evaluate current and projected water supplies and demands within the City’s service area over a 20-year planning horizon.

The City encourages local agencies, the public, and other interested parties in its service area to participate in the update process. If necessary, a stakeholder workshop may be scheduled in November 2021 to review the administrative draft. The City plans to make a copy of the draft 2020 UWMP and WSCP available for public review by October 2021. At that time, the plans will be available for review on the City’s website, https://www.grover.org/.

The City of Grover Beach will review and take action on the 2020 UWMP and WSCP at its December City Council Meeting on December 13, 2021 at 6:00 PM at the Council Chamber. Members of the public are welcome to attend. Thank you for your involvement with the City’s 2020 UWMP and WSCP. Please send comments to:

Robert Lepore, GISP
MKN & Associates, Inc.
(805) 904-6530
[email protected]
Sincerely,
Gregory A. Ray, PE
Public Works Director/City Engineer
C i t y o f G r o v e r B e a c h

DEPARTMENT OF PUBLIC WORKS
154 S. 8th Street ❖Grover Beach, CA 93433 ❖805/473-4530 ❖[email protected] Visit our website at www.groverbeach.org
October 8, 2021
Bill Robeson
Public Works Director
City of Arroyo Grande
300 E. Branch St.

Arroyo Grande, CA 93420
Subject: City of Grover Beach Urban Water Management Plan Update – 60 Day Notification Letter Dear Mr. Robeson:

Robert Lepore, GISP
MKN & Associates, Inc.
(805) 904-6530
[email protected]
Sincerely,
Gregory A. Ray, PE
Public Works Director/City Engineer
C i t y o f G r o v e r B e a c h

DEPARTMENT OF PUBLIC WORKS
154 S. 8th Street ❖Grover Beach, CA 93433 ❖805/473-4530 ❖[email protected] Visit our website at www.groverbeach.org
October 8, 2021
Benjamin A. Fine, PE
Director of Public Works/City Engineer
City of Pismo Beach
760 Mattie Road
Pismo Beach, CA 93449
Subject: City of Grover Beach Urban Water Management Plan Update – 60 Day Notification Letter Dear Mr. Fine:

Robert Lepore, GISP
MKN & Associates, Inc.
(805) 904-6530
[email protected]
Sincerely,
Gregory A. Ray, PE
Public Works Director/City Engineer
C i t y o f G r o v e r B e a c h

DEPARTMENT OF PUBLIC WORKS
154 S. 8th Street ❖Grover Beach, CA 93433 ❖805/473-4530 ❖[email protected] Visit our website at www.groverbeach.org
October 8, 2021
Will Clemens
General Manager
Oceano Community Services District
1655 Front Street
Oceano, CA 93445
Subject: City of Grover Beach Urban Water Management Plan Update – 60 Day Notification Letter Dear Mr. Clemens:

Robert Lepore, GISP
MKN & Associates, Inc.
(805) 904-6530
[email protected]
Sincerely,
Gregory A. Ray, PE
Public Works Director/City Engineer
Appendix D‐ Adoption Resolution
Agenda Item No. 14

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: September 26, 2022 FROM: Matthew Bronson, City Manager
PREPARED BY: David Hale, City Attorney
Matthew Bronson, City Manager
SUBJECT: Approval of a Joint Exercise of Powers Agreement Creating the Central Coast Blue Regional Recycled Water Authority

RECOMMENDATION
Approve the Joint Exercise of Powers Agreement Creating the Central Cost Blue Regional Recycled Water Authority with the cities of Arroyo Grande and Pismo Beach for the Central Coast Blue Project and authorize the Mayor to execute the Agreement.

BACKGROUND
At its February 15, 2022 meeting, the City Council authorized entering into a Cost Sharing Agreement with the cities of Arroyo Grande, and Pismo Beach for the Central Coast Blue recycled water project (Project) as well as a Resolution that authorized the City Manager to apply for financial assistance from Clean Water State Revolving Fund administered by the State Water Resources Control Board for the City’s share of anticipated construction costs for the Project. The Cost Sharing Agreement (shown as Attachment 1 for reference) contained provisions related to the contemplated creation of a Joint Powers Authority, which will be a separate legal public entity, pursuant to Government Code section 6500 et seq., that will own and operate the Project and have the power to issue debt and enter into loans or financing agreements to finance the construction costs for Phase 1 of the Project. As set forth in the Cost Sharing Agreement, the Joint Powers Authority (JPA) Agreement is to contain provisions addressing acquisition of the facility site from Pismo Beach, ownership of the facility, and financing of construction costs including repayment obligations of the parties consistent with the Water Purveyor Contribution percentages identified in the Cost Sharing Agreement.

The CCB JPA Agreement has been negotiated by the cities of Arroyo Grande, Grover Beach, and Pismo Beach and is now being presented to the Council for its consideration and approval. The Project has been a multi-agency effort between the cities of Arroyo Grande, Grover Beach, and Pismo Beach to construct a regional recycled water project that will enhance supply reliability by injecting advanced purified water into the Santa Maria Groundwater Basin. The South San Luis Obispo County Sanitation District will be involved in this project in Phase II after completion of the facility’s construction. The City of Pismo Beach is the lead agency for construction of the Project.

The Project will reduce vulnerability to drought and seawater intrusion by creating a seawater intrusion barrier and supplementing the naturally occurring groundwater. Phase 1 of the Project proposes to treat wastewater from the City of Pismo Beach to an advanced purification level to create between 900 and 1,000 acre-feet of additional water per year. This new developed water will be injected into the basin at key locations to help to ensure that a sufficient barrier exists within the basin to keep seawater from flooding into the aquifer and contaminating the wells used by the Staff Report: Central Coast Blue Joint Powers Authority Agreement Page 2 September 26, 2022
NCMA parties. As a result, the Project will support the City’s ability to rely on groundwater to supply potable water to its residents and businesses into the future. Approval of the CCB JPA Agreement and completion of the Project will secure an estimated 324 to 360 acre-feet per year of reliable groundwater for the City based on a cost-sharing allocation of 36% of project costs.

Overview of CCB JPA Agreement
The CCB JPA Agreement contains provisions to provide for the ongoing operation of the Project.

The agreement provides that the new Central Cost Blue Regional Recycled Water Authority will have the responsibility for the operation and maintenance of the Project and will own the facility sites, facilities, ancillary facility sites and ancillary facilities, which are defined in the Agreement.

The agreement also references and incorporates the Cost Sharing Agreement and contains provisions to be consistent with it with review and revisions from Project bond counsel to address and facilitate anticipated future financing for the Project. Below are key provisions of the agreement:
• Authority powers and governance. The powers of the Authority (e.g., to make contracts, employ staff and consultants, acquire and dispose of property, issue bonds and incur debts and liabilities, apply for grants, etc.). There will be a Board of Directors, which will have a Chair and Vice Chair, meet at least quarterly, and consist of one representative of each city, as well as one alternate. Except for reimbursement for actual costs and expenses, the Board will serve without compensation from the Authority. • Budget process. In March of each year, the Board is to adopt a preliminary budget and an allocation of contributions from the Member Agencies for presentation to each Member Agency’s governing body. The governing body of each Member Agency is to then review and comment on the preliminary budget and allocation of contributions. The Board is to adopt a final budget prior to July 1 of each year and adopt an allocation of contributions from the Member Agencies to be consistent with the percentages agreed to for PreConstruction and Construction costs for Phase 1 of the Project (i.e., Arroyo Grande 25%, Grover Beach 36%, and Pismo Beach 39%). Each annual budget is to be adopted by an affirmative unanimous vote of the Board of Directors, except that the first annual budget may be adopted by a majority vote.
• Construction financing, operations and maintenance costs, capital improvement costs, and debt service. In connection with the issuance of debt, each party will enter into a Financing Agreement with the Authority securing the obligation of such party to make payments on its share of debt service on financing issued by the Authority. The Financing Agreements will stipulate that payment to the Authority is a special limited obligation payable solely from system net revenues of each party’s Enterprise Fund. • Termination and withdrawal. The agreement has provisions on withdrawal of Member Agencies and the effect of such withdrawal, including continuing liability and indemnification. The Agreement makes it clear that the debts, liabilities, and obligations of the Authority are not the debts, liabilities and obligations of any of the Member Agencies.

The Council has already approved the City’s participation in the Project through the Cost Sharing Agreement which contemplates that the parties will create a Joint Powers Authority to own and operate the Project. Approval of the CCB JPA Agreement will provide a framework for operating, managing and administering the Project. The Project is important for the ongoing resiliency of groundwater resources relied upon by the City, as well as all residents, businesses, agricultural operations, and visitors to the Five Cities area. The Arroyo Grande City Council will consider approval of the CCB JPA Agreement on September 27 and the Pismo Beach City Council will consider it on October 4.

Staff Report: Central Coast Blue Joint Powers Authority Agreement Page 3 September 26, 2022
Lastly, the Council is asked to appoint on an interim basis a representative of the Council to serve on the JPA Board of Directors along with an alternate. Such an appointment would continue for the remainder of this calendar year if a JPA Board meeting is needed prior to the end of this year.

The Council will be asked to identify a representative and alternate for 2023 as part of the Council’s committee assignments process in January 2023.

Environmental Review
The City of Pismo Beach is the Lead Agency under the California Environmental Quality Act (CEQA) for the Project and previously prepared, circulated, and approved an Environmental Impact Report (EIR), and adopted findings and a Statement of Overriding Considerations on March 16, 2021. The City of Grover Beach is a Responsible Agency for the Project under CEQA.

On February 15, 2022, the City Council adopted findings and a Statement of Overriding Considerations for the Project relying on the EIR in compliance with CEQA. No additional CEQA findings are required at this time.

FISCAL IMPACT
There is no direct fiscal impact to this action. The City’s FY 2021-23 budget includes a total of $1,385,400 in the Water Fund for the Project with $655,400.00 in FY 2021-22 and $730,000 for FY 2022-23 with a carryover from prior year of $1,200,000. The CCB JPA Agreement defines the financial obligation of the City to pay for 36% of the total costs of the Project while Pismo Beach will pay 39% of the costs and Arroyo Grande will pay 25% of the costs. Total costs for the Project are currently estimated to be $92,595,000. To date, $17,120,000 in federal and state grants have been awarded to fund the Project. The City’s portion of the remaining $46,296,000 in Project costs funded by local agencies is $16,666,920 though it is anticipated that the Project will receive additional grant funding which would reduce local costs. The water rates adopted by Council on May 10, 2021 following a utility rate study are intended to fund the City’s share of costs for the Project not funded through federal and state grants. The City’s utility rate structure, along with the rate structures in the other cities, is being reviewed by an outside consultant to verify local funding levels and adequate debt coverage ratios.

ALTERNATIVES
The Council has the following alternatives to consider:

1. Approve the Joint Exercise of Powers Agreement Creating the Water Central Cost Blue Regional Recycled Authority (CCB JPA Agreement) with the cities of Arroyo Grande and Pismo Beach for the Central Coast Blue Project and authorize the Mayor to execute the Agreement; or

2. Do not approve Joint Exercise of Powers Agreement Creating the Water Central Cost Blue Regional Recycled Authority; or

3. Provide other direction to staff.

PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.

Staff Report: Central Coast Blue Joint Powers Authority Agreement Page 4 September 26, 2022
Attachments

1. Joint Exercise of Powers Agreement Creating the Central Cost Blue Regional Recycled Water Authority

2. Central Coast Blue Cost Sharing Agreement

A JOINT EXERCISE OF POWERS AGREEMENT CREATING THE

CENTRAL COAST BLUE REGIONAL RECYCLED WATER AUTHORITY
1 A JOINT EXERCISE OF POWERS AGREEMENT

CREATING THE CENTRAL COAST BLUE REGIONAL

RECYCLED WATER AUTHORITY
THIS JOINT EXERCISE OF POWERS AGREEMENT ("Agreement") is made and entered into by and between the City of Arroyo Grande, a California municipal corporation (“Arroyo Grande”), the City of Grover Beach, a California municipal corporation (“Grover Beach”), and the City of Pismo Beach, a California municipal corporation (“Pismo Beach”). The cities may be individually referred to herein as a “Party” or collectively as the “Parties.”

RECITALS
WHEREAS, each Party to this Agreement is a public agency authorized and empowered to contract for the joint exercise of powers under Articles 1 through 4, Chapter 5, Division 7, Title 1 (commencing with Section 6500) of the Government Code of the State of California; and WHEREAS, in 1983, the Parties hereto entered into a voluntary groundwater management plan to manage the safe yield of the Arroyo Grande Groundwater Basin, which agreement was updated by the Parties through approval of the 2002 Agreement Regarding Management of the Arroyo Grande Groundwater Basin (the “Management Agreement”); and
WHEREAS, on April 30, 2002, the Parties hereto, among others, entered into a settlement agreement (the “Settlement Agreement”) related to a 1997 groundwater adjudication litigation filed by the Santa Maria Valley Water Conservation District, which reaffirmed the Management Agreement, established separate water management areas (the “Original Management Areas”) to be independently managed by the Parties and others, and requiring the Parties and others to develop an equitable cost sharing agreement for any newly constructed water resource and water production facilities within the Original Management Areas; and
WHEREAS, on June 30, 2005, the Parties hereto entered into a stipulation imposing a physical solution for ensuring the Arroyo Grande Groundwater Basin’s long-term stability (the “Stipulation”). The Stipulation adopted a local management approach, establishing three management areas (the “Current Management Areas”) and requiring a monitoring program to be established in each of the Current Management Areas; and
WHEREAS, on January 25, 2008, the Santa Clara Superior Court entered Judgment in the Santa Maria Groundwater Adjudication litigation approving the Stipulation, without qualification (the “Adjudication Decree”); and
WHEREAS, the Parties are participating in the Central Coast Blue Project to construct a regional recycled water project that will enhance supply reliability by injecting advanced purified water into the Northern Cities Management Area of the Santa Maria Groundwater Basin (“Project”). The Project will reduce vulnerability to drought and seawater intrusion by creating a seawater intrusion barrier and supplementing the naturally occurring groundwater; and
WHEREAS, Phase 1 of the Project includes construction of an Advanced Treatment Facility (“ATF”), treatment of secondary treated flows from Pismo Beach’s Wastewater Treatment Plant (“WWTP”), construction of approximately five injection wells and associated transmission lines, and injection of flows from the WWTP (“Phase 1”). Phase 1 proposes to treat wastewater from Pismo Beach to an advanced purification level to create between nine hundred (900) and one thousand (1,000) acre-feet of additional water per year; and
Attachment 1

A JOINT EXERCISE OF POWERS AGREEMENT CREATING THE

CENTRAL COAST BLUE REGIONAL RECYCLED WATER AUTHORITY
2 WHEREAS, Phase 2 of the Project will include upgrades to the ATF to increase capacity, construction of approximately two additional injection wells and associated transmission lines, and injection of flows from the South San Luis Obispo County Sanitation District Wastewater Treatment Plant (“Phase 2”); and WHEREAS, Arroyo Grande, Grover Beach and Pismo Beach believe that the best way to achieve their joint goals in a way that is mutually beneficial is to form a joint powers agency under Articles 1 through 4, Chapter 5, Division 7, Title 1 (commencing with Section 6500) of the Government Code of the State of California ("Joint Exercise of Powers Act"); and
WHEREAS, by forming a joint powers agency ("JPA") under the Joint Exercise of Powers Act, the Parties believe they will be better able to, through a separate JPA, oversee and manage the planning and implementation, including but not limited to construction, operation and administration of, the Project.

NOW THEREFORE, in consideration of the above Recitals and of the mutual promises and agreements contained herein, the Parties agree as follows:

ARTICLE 1

GENERAL PROVISIONS

1.1 Definitions. Unless the context otherwise requires, the words and terms defined in this Section

1.1 shall, for the purposes of this Agreement, have the meanings herein specified.

1.1.1. Act means Articles 1 through 4, Chapter 5, Division 7, Title 1 of the Government Code of the State of California (commencing with Section 6500) relating to the joint exercise of powers common to public agencies.

1.1.2. Agreement means this Joint Exercise of Powers Agreement.

1.1.3. Ancillary Facilities means injection wells, storage tanks, pump stations, associated piping, and any other equipment located on an Ancillary Facilities Site.

1.1.4. Ancillary Facilities Sites means any real property or real property interest held by the Authority for purposes of the Project, excluding the Facility Site.

1.1.5. Annual Budget means the budget adopted pursuant to Section 6.2.2 of this Agreement.

1.1.6. Authority means the Central Coast Blue Regional Recycled Water Authority, which is created by this Agreement.

1.1.7. Board or Board of Directors means the Board of Directors referred to in Article 2 of this Agreement, which is the governing body of the Authority.

1.1.8. Bonds means bonds, notes, commercial paper, and any other evidence of indebtedness of the Authority authorized and issued pursuant to the Act, any indebtedness issued or incurred by the Authority pursuant to any act supplementary to the Act, including, but not limited to, refunding bonds authorized and issued pursuant to Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.

1.1.9. Cost Sharing Agreement means the Cost Sharing Agreement for the Parties’ Participation in the Central Coast Blue Project dated March 14, 2022, a copy of which is attached hereto as Exhibit A and incorporated herein.

A JOINT EXERCISE OF POWERS AGREEMENT CREATING THE

CENTRAL COAST BLUE REGIONAL RECYCLED WATER AUTHORITY
3 1.1.10. Director means a member of the Board appointed to the Board pursuant to Section 2.2 of this Agreement.

1.1.11. Effective Date means the last date on which all Parties to this Agreement have executed the Agreement.

1.1.12. Facility or Facilities means the advanced water treatment facility that will receive and further treat wastewater influent from Pismo Beach’s WWTP, in Phase 1, which as of the date of this Agreement is proposed to be constructed on Assessor’s Parcel Number 060- 543-016 in the City of Grover Beach, including the Facility’s equalization basin, injection wells, storage tanks, pump station and associated piping and equipment from the Pismo Beach.WWTP, but excluding the joint outfall shared by the South San Luis Obispo County Sanitation District and the City of Pismo Beach which both agencies use to discharge their municipal waste.

1.1.13. Facility Site means Assessor’s Parcel Number 060-543-016 in the City of Grover Beach, California.

1.1.14. Financing Agreement means any agreement between the Authority and a Member Agency securing the obligation of the Member Agency to make payments relating to Bonds or other obligations issued or incurred by the Authority in connection with the financing of the Facilities or the improvement, use or acquisition of real or personal property that is or will be owned or operated by the Authority, or to refinancing of such previously issued or incurred Bonds or other obligations.

1.1.15. Manager means the manager of the Authority.

1.1.16. Member Agency(ies) means Arroyo Grande, Grover Beach and Pismo Beach and any other entity added to this Agreement by a subsequent amendment.

1.1.17. Member of the Board or Board Member means and includes any duly appointed Director, Chair and/or Vice-Chair of the Board.

1.1.18. Party(ies) means those entities who have executed this Agreement or any Amendment to this Agreement and who have not withdrawn from the Authority.

1.2 Purpose. This Agreement is made pursuant to the Act by Arroyo Grande, Grover Beach and Pismo Beach, each of which is authorized to contract with the other pursuant hereto. The purposes of this Agreement are to create the Authority, provide for the administration of the Authority and to enable the Authority to: (1) take all actions necessary to operate, and maintain Phases 1 and 2 of the Project. Phase 1 includes construction of an ATF, treatment of all secondary treated flows from Pismo Beach’s WWTP, construction of approximately five injection wells and associated transmission lines, and injection of flows from the WWTP; and (2) pursue grant funding and financing options for the Project and future projects; and (3) collectively interact with regulatory agencies with oversight over the Parties and the Project.

1.3 Creation of Authority. Pursuant to the Act, there is hereby created a public entity known as the “Central Coast Blue Regional Recycled Water Authority." The Authority shall be a public entity separate and apart from the Member Agencies and shall administer this Agreement.

A JOINT EXERCISE OF POWERS AGREEMENT CREATING THE

CENTRAL COAST BLUE REGIONAL RECYCLED WATER AUTHORITY
4 1.4 Term. The term of this Agreement shall commence on the Effective Date and shall continue until terminated by the Parties as provided in Article 7 of this Agreement.

1.5 Phase 1, Project Facility Site Ownership, Construction Financing, and Operation

1.5.1. Phase 1 of Project. As set forth in Article III, Section 1 – Lead Agency Duties of the Cost Sharing Agreement, Pismo Beach will be Lead Agency and act as project developer through final completion of Phase 1 of the Project. As the Lead Agency, Pismo Beach will act as the construction manager for Phase 1 and will provide administration of construction and start-up of Phase 1 on behalf of the Member Agencies. The Parties shall pay their pro rata shares of Pre-Construction costs for any professional service expenses incurred by Pismo Beach in connection with obtaining such Phase 1 approvals, in accordance with Section 6.3.2 below.

1.5.2. Ownership of Facility Sites and Facilities. Pismo Beach has previously purchased the Facility Site, which is located in Grover Beach and identified as Assessor’s Parcel Number 060-543-016 (“Facility Site”). Within sixty (60) days of the Effective Date of this Agreement, Pismo Beach shall transfer the Facility Site to the Authority. The Authority shall own all Facilities located at the Facility Sites, including, but not limited to, the real property, buildings, water and treatment facilities, and support infrastructure and assets, injection wells and related transmission lines.

1.5.3. Ownership of Ancillary Facilities Sites and Ancillary Facilities. The Authority shall own all Ancillary Facilities Sites and Ancillary Facilities located thereon.

1.5.4. Financing of Construction Costs. To finance Construction Costs, as defined in the Cost Sharing Agreement, the Authority shall apply for and obtain financing for such costs through the issuance of Bonds, entering into loans or Financing Agreements or any other financing mechanisms not otherwise covered by grant funding awarded to the Project.

Any loans entered into and secured for construction of the Project may consist of separate installment sale agreements based on the respective share of each Member Agency, and any prepayment may be paid either directly to the Authority by each Party consistent with the Water Purveyor Contribution percentages identified in Section 6.3.2 hereof or directly to the grant funding agency or bond trustee, depending on the funding mechanism. In the event that the Authority is not able to finance the Construction Costs as described in this Section 1.5.4, the Parties will seek financing consistent with the financing plan described in Article III, Section 1.c of the Cost Sharing Agreement for its respective share of Construction Costs.

1.5.5. Operation and Maintenance of the Facilities. The Authority will have total responsibility for the operation and maintenance of the Facilities.

1.5.6. Procurement Methods. The Board may adopt such policies relating to procurement of services, equipment, supplies and other materials needed to accomplish the purposes of this Agreement.

1.6 Powers of Authority

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5 1.6.1. General Powers. The Authority shall exercise, in the manner herein provided, the powers which are common to each of the Member Agencies, powers otherwise permitted under the Act, and powers necessary to accomplish the purposes of this Agreement.

1.6.2. Specific Powers. Subject to the limitations set out in Section 1.6.1, the Authority is hereby authorized, in its own name, to do all acts necessary, convenient and appropriate for the exercise of the foregoing powers for the purposes set forth in this Agreement and to do any or all of the following:
i. To make and enter contracts, including contracts with its Member Agencies; ii. To employ agents, attorneys, consultants and employees or to contract for personnel to fulfill its mission and purpose. The Authority shall not contact employees of the Member Agencies at their current places of employment about employment opportunities with the Authority;
iii. To lease, acquire, construct, manage, maintain or operate any building, works or improvements;
iv. To lease, acquire, hold or dispose of real or personal property; v. To acquire and hold property, including funds, Project agreements and other obligations of any kind, and pledge, encumber or assign the same, or the revenues therefrom or any portion of such revenues, or other rights, whether then owned or possessed, or thereafter acquired, for the benefit of the bondholders, and as security or additional security for any bonds or the performance of obligations under an indenture;
vi. To provide for the advance of bond proceeds and other funds pursuant to Project agreements as necessary to pay or reimburse for Project costs; vii. To borrow money and issue Bonds and incur debts, liabilities or obligations for the purpose of paying all or any part of the costs of the Project or for any other authorized purpose, which do not constitute a debt, liability or obligation of any Member Agency;
viii. To receive gifts, contributions and donations of property, funds, services and other forms of assistance from persons, firms, corporations, and governmental entities, provided that the Authority consents to such gifts, contributions and donations;
ix. To fix the compensation, if any, paid to the Board of Directors, Secretary, Treasurer, Controller and Attorney, in compliance with all applicable laws; x. To prescribe the duties, compensation and other terms and conditions of employment of other agents, officers and employees;
xi. To adopt reasonable rules and regulations for the conduct of the day-to-day operations of the Authority;

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6 xii. To apply for, accept, receive and disburse grants, loans and other aid from any agency of the United States of America or of the State of California; xiii. To sue and be sued in its own name;
xiv. To enter into Financing Agreements, state funding agreements and federal funding agreements relating to the Project, and assume rights and obligations pursuant to these agreements;
xv. To invest money in the treasury, pursuant to Government Code Section 6505.5, that is not required for the immediate necessities of the Authority, as the Authority determines advisable, in the same manner and on the same conditions as local agencies, pursuant to Section 53601 of the Government Code; xvi. To contract and pay compensation for professional, financial, and other services; xvii. To carry out and enforce all provisions of this Agreement; xviii. To exercise any and all powers which are provided for in the Act and in Government Code section 6584 et seq., including, without limitation, Government Code section 6588, as they exist on the Effective Date of this Agreement or may hereafter be amended;
xix. To exercise any power necessary or incidental to the foregoing powers.

ARTICLE 2

BOARD OF DIRECTORS

2.1. Creation. The Authority shall be governed by a board of three (3) members, which is hereby established and which shall be composed of one (1) representative appointed from each Member Agency.

The governing board shall be known as the "Board of Directors of the Central Coast Blue Regional Recycled Water Authority." All voting power shall reside in the Board.

2.2. Members of the Board of Directors.

2.2.1. Directors Appointed. Upon the Effective Date of this Agreement, each Member Agency which has not already done so shall designate and appoint, by resolution or minute order of its governing body, one (1) member of its governing body to act as its representative on the Board of Directors, and one individual to act as an alternate to each Director so appointed. The alternate appointed by each Member Agency shall have the authority to attend, participate in and vote at any meeting of the Board when the regular member is absent.

2.2.2. Membership. Each Director and alternate of the Board of Directors shall serve until a successor is appointed; provided, however, each Director and alternate serves at the pleasure of the appointing Member Agency's governing body and may be removed at any time, with or without cause, at the sole discretion of the appointing Member Agency governing body. If a Director or alternate's membership on the appointing Member Agency's governing body ceases, his or her membership on the Board shall also cease.

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7 2.2.3. Chair. The Board of Directors shall elect one of its members as Chair of the Board. The term of office for the Chair of the Board shall be one (1) year. The Chair of the Board shall preside at all meetings and shall perform such other duties as are specified by the Board of Directors.

2.2.4. Vice-Chair. The Board of Directors shall elect one of its members as Vice-Chair. The term of office for the Vice-Chair shall be one (1) year. The Vice-Chair shall perform all the duties of the Chair of the Board in the absence of the Chair of the Board or in the event the Chair of the Board is unable to perform such duties, and shall perform such other duties as are specified by the Board of Directors.

2.2.5. Board Compensation. Except for reimbursement for actual costs and expenses, the Board shall serve without compensation from the Authority. Compensation may be provided as approved by the Member Agencies appointing each Director and alternate, and any such compensation will be the responsibility of the Member Agency.

2.2.6. Reimbursement of Costs. Each Board Member is entitled to reimbursement for their travel, meals, lodging and other actual and necessary expenses incurred in the performance of the duties required or authorized by the Board pursuant to Government Code Section 53232.2.

2.3. Powers of the Board. All the power and authority of the Authority shall be exercised by the Board of Directors.

2.4. Provision for Bylaws. The Board may cause to be developed and may adopt, from time to time, such bylaws for the Authority to govern its day-to-day operations. Each Member Agency shall receive a copy of any bylaws developed and adopted under this Section.

ARTICLE 3

MEETINGS OF THE BOARD

3.1 Meetings. The Board shall provide for its regular meetings by resolution; provided, however, that at least one regular meeting shall be held each fiscal quarter. The date, hour and place of the regular meetings shall be fixed by resolution of the Board and filed with the governing body of each of the Member Agencies. The Board may meet in joint session with other public agencies and advisory bodies in accordance with State law.

3.2 Ralph M. Brown Act. All meetings of the Board, including, without limitation, regular, adjourned regular, special, adjourned special, and emergency meetings, shall be called, noticed, held, and conducted in accordance with the provisions of the Ralph M. Brown Act, commencing with section 54950 of the Government Code.

3.3 Voting. Each Board Member shall have one vote. Except as otherwise provided by law or by this Agreement, all actions of the Board shall be approved on the affirmative vote of a majority of the Members of the Board.

3.4 Quorum. A majority of the Members of the Board shall constitute a quorum for the transaction of business, except that less than a quorum may adjourn from time to time.

3.5 Minutes. The Secretary of the Authority shall cause minutes of regular, adjourned regular, special, adjourned special, and emergency meetings to be kept and shall, as soon as possible after each

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8 meeting, cause a copy of the minutes to be forwarded to each Member of the Board and to each Member Agency.

3.6 Rules. The Board may adopt from time to time such rules and regulations for the conduct of its affairs as may be required.

ARTICLE 4

OFFICERS AND EMPLOYEES OF THE AUTHORITY

4.1 Secretary. The Board of Directors shall appoint a Secretary who shall serve at the pleasure of the Board. The Secretary may, but need not, be a member of the Board of Directors. The Secretary shall be responsible for the minutes and other records of the proceedings of the Board of Directors and shall perform such other duties as the Board of Directors specifies.

4.2 Treasurer and Auditor Controller. Pursuant to Government Code Sections 6505.5 and 6505.6, the Authority's Treasurer and Auditor/Controller shall be the Manager's senior financial officer (such as its chief financial officer, director of finance, or finance manager as designated by the Manager. The Treasurer shall be the depository and have custody of all money of the Authority, from whatever source, and shall have all of the duties and obligations set forth in Sections 6505 and 6505.5 of the Government Code. The offices of Treasurer and Auditor/Controller may be held by separate individuals, or combined and held by one individual as the Board may elect. The Treasurer and Auditor/Controller shall serve at the pleasure of the Manager and may be removed at any time, with or without cause, in the sole discretion of the Manager.

4.3 Authority Attorney. The Attorney for the Authority, who may not be counsel to one of the Member Agencies, shall be engaged by the Board of Directors. The Attorney for the Authority or a designated deputy shall attend or participate in meetings of the Board of Directors; provided, however, that the absence of the Authority Attorney shall not affect the validity of any meeting. The Attorney shall perform such other duties the Board of Directors specifies.

4.4 Official Bond. Pursuant to Government Code section 6505.1, the public officer, officers or persons who have charge of, handle or have access to any property of the Authority shall file an official bond in an amount to be fixed by the Parties to this Agreement.

4.5 Additional Officers and Employees. The Board shall have the power to appoint such additional officers and to employ such employees, assistants, contractors, consultants and others as may be appropriate. Such power shall include, but not be limited to, the power to appoint a Manager for the purposes of managing and administering the Authority, and an Operator for the purposes of providing operations, maintenance, and similar services to the Authority. A Member Agency may be appointed as the Authority's Manager and/or Operator pursuant to a written agreement with the Authority.

ARTICLE 5

COMMITTEES

5.1 Committees. The Board of Directors, by a majority vote, may form committees for any purpose.

Such vote shall designate the method for appointing committee members, the scope of the duties and responsibility of the committee, whether the committee is a standing or ad hoc committee, and such other matters as the Board may deem appropriate.

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9 ARTICLE 6

FINANCES
Fiscal year. The Fiscal Year of the Authority shall be the period commencing on July 1 of each year and ending on and including the following June 30.

6.2 Annual Budget.

6.2.1 Interim Budget. The Board shall, within one hundred and twenty days (120) days of the Effective Date of this Agreement, approve an interim budget, which shall constitute the operating budget until the Annual Budget is adopted.

6.2.2 Annual Budget. Except for costs related to construction of Phase I, which shall be subject to the Cost Sharing Agreement, annually, in March of each year, the Board shall adopt a preliminary budget and an allocation of contributions from Member Agencies for presentation to each Member Agencies' governing body. The governing body of each Member Agency shall, no later than May 31 of each year, review and comment on the preliminary budget and allocation of contributions. Thereafter, annually, prior to July 1 of each year, the Board shall adopt a final budget for all expenses to be made by the Authority during the ensuing Fiscal Year and adopt an allocation of contributions from Member Agencies consistent with Section 6.3.2. Each annual budget shall be adopted and shall be effective on the affirmative unanimous vote of the Directors, except that the first Annual Budget may be adopted by an affirmative vote of a majority of the Directors.

Contributions for each Member Agency shall be due and payable to the Authority on a monthly basis with the first payment being made within thirty (30) days of approval of the budget.

6.2.3 Failure to Obtain Budget Approval. In the event the Board does not adopt a budget prior to the beginning of a fiscal year, the budgeted amounts of all expenses and allocation of contributions from Member Agencies shall remain the same as the amounts last approved by the Board in its most recently adopted budget; provided, however, that the amounts shall be increased by the Consumer Price Index ("CPI") with a minimum increase of no less than two percent (2%). The CPI shall mean the Consumer Price Index, Bureau of Labor Statistics, U.S. Department of Labor Consumer Price Index-All Urban Consumers, All Items, Los Angeles-Long Beach-Anaheim CA for the twelve (12) month period ending the February prior to the beginning of the fiscal year, or if this index no longer exists, an index approved by a majority of the Board. This factor shall be applied to the budget until such time as a new budget is adopted by the Board. Any shortfall in revenues shall be made up from available reserves dedicated by the Board for such purpose and, if insufficient to cover the shortfall, any available reserve funds which have not been designated by the Board for a particular purpose or otherwise legally restricted for other purposes. Reserves shall mean any available cash or investments.

6.3 Funds, Accounts and Reports. There shall be strict accountability of all funds and reporting of all receipts and disbursements.

6.3.1 Sources of Funds. The sources of funds available to the Authority may include, but are not limited to, the following:

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10 i. Grants, donations, and loans received by the Authority from local, State, or Federal agencies or from individuals or businesses.
ii. Funds collected as user charges or user fees by Member Agencies. iii. Funds collected from Members pursuant to this Agreement. iv. Funds received from State and Federal disaster relief agencies. v. Funds obtained by issuing Bonds.
vi. Funds collected pursuant to a Financing Agreement.
vii. "In kind" contributions from Member Agencies.
viii. Funds from any other source derived.

The Authority shall arrange for the receipt of such funds from the above sources as are available to the Authority and as are necessary for the conduct of the Authority's activities. Member Agencies may, in the appropriate circumstances: (a) make contributions from their treasuries for the purposes set forth in this Agreement; (b) make payments of public funds to defray the cost of such purposes; and (c) make advances of public funds for such purposes. The provisions of Government Code section 6513 are incorporated into this Agreement.

6.3.2 Water Purveyor Contributions. The Parties shall pay their pro rata share of all PreConstruction and Construction Costs incurred by Pismo Beach in connection with Phase 1 of the Project.

The Parties agree to the following cost allocation of the total Pre-Construction and Construction costs for Phase 1 for each Party:
i. Arroyo Grande shall contribute 25%.
ii. Grover Beach shall contribute 36%.
iii. Pismo Beach shall contribute 39%.
. As provided in Section 6.2.2, annual contributions by Member Agencies for ongoing operations shall be consistent with the above percentages.

6.3.3 Accounts. Revenues or funds received or made available to the Authority from any source whatsoever, shall be deposited into accounts that may be established by the Authority and may be expended by the Authority in any legal manner, subject to such reservations as may be imposed by the Authority from time to time.

6.3.4 Reports. The Treasurer shall, within one hundred and eighty days (180) days after the close of each Fiscal Year, give a complete written report of all financial activities for such fiscal year to the Board of Directors and to each Member Agency. The Authority's books and records shall be open to inspection at all reasonable times by representatives of each Member Agency.

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11 6.4 Payments and Advances. No expenditures in excess of those budgeted shall be made without approval of a revised or amended budget, which may from time to time be submitted to and approved by the Board of Directors.

6.5 Audit. The Treasurer and Auditor/Controller shall cause an annual audit of the accounts and records of the Authority to be made and reported in accordance with Sections 6505 through 6505.6 of the Government Code. The audit shall be conducted by an independent certified public accountant. The audit shall conform to generally accepted auditing standards. Such report shall be filed within twelve (12) months of the end of the Fiscal Year under examination.

ARTICLE 7

COST ALLOCATION

7.1 Operations and Maintenance Costs. Each Party shall pay its allocated share of all expenses incurred by the Authority for administration, operation, and maintenance of its Facilities and Ancillary Facilities based on the Water Purveyor Contribution percentages.

7.2. Capital Improvement Costs. Capital improvement costs to acquire, construct, or improve Facilities and Ancillary Facilities shall be subject to allocation between the Parties based on the Water Purveyor Contribution percentages.

7.3 Debt Service. In connection with the issuance of Bonds or the incurrence of other obligations by the Authority to finance or refinance Construction Costs or capital improvement costs to acquire, construct or improve Facilities and Ancillary Facilities, each Party shall negotiate a Financing Agreement with the Authority that includes provisions by which each Party shall make payments with respect to such Party’s share of debt service on the Bonds or other obligations incurred by the Authority, consistent with any pre-existing contractual obligations of each Party.

Each Financing Agreement will stipulate that the debt service payments made by a Party to the Authority will be subject to the payment limitations set forth in Article IV, Section 5 of the Cost Sharing Agreement. For purposes of this Section 7.3, the provisions of Article IV, Section 5 of the Cost Sharing Agreement shall continue in full force and effect in the event that the Cost Sharing Agreement shall terminate.

At the time of a Bond issuance or the entering into of any other obligation by the Authority, if a Party elects to pay its share of the capital improvement costs in full with cash, it will not be allocated any share of the debt service on such Bonds or other obligations incurred by the Authority, and will not be required to enter into a Financing Agreement with the Authority, for that Bond issuance or obligation.

ARTICLE 8

TERMINATION/WITHDRAWAL/AMENDMENT

8.1 Duration and Termination. This Agreement shall become effective as of the Effective Date and shall continue in full force and effect until terminated by the mutual written agreement of all Member Agencies, which agreement shall meet the requirements imposed by the terms and conditions of all outstanding bonds, notes, warrants, indentures and other evidences of indebtedness; provided, however, that this Agreement and the Authority shall continue to exist for the purpose of disposing of all claims, distribution of assets, and all other functions necessary to conclude the affairs of the Authority.

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12 8.2 Withdrawal. Notwithstanding any other provision of this Agreement, any Member Agency may withdraw from the Authority by providing the Authority with one hundred eighty (180) days written notice of its intent to withdraw. A withdrawal from the Authority constitutes a withdrawal of that Member Agency's representatives from the Board of Directors.

8.3 Effect of Withdrawal. The withdrawal of a Member Agency shall not terminate its responsibility to contribute its share of any obligation incurred by the Authority, including amounts determined by the Board for (1) liabilities and claims accrued during the time the agency was a Member Agency or (2) budgeted expenses for the Fiscal Year in which notice of intent to withdraw is given. Except as the withdrawing Member Agency may agree, in writing, with the Board, the withdrawing Member Agency shall automatically relinquish all rights as a Member Agency under this Agreement, on the effective date of the withdrawal. Upon termination of this Agreement, a Member Agency that has withdrawn will be treated like all other Member Agencies for purposes of disbursement of Authority assets, unless otherwise agreed in writing.

8.4 Disbursement. Upon termination of this Agreement and after payment of all liabilities, costs, expenses and charges validly incurred under this Agreement, all remaining assets of the Authority shall be disbursed among Member Agencies, including any Member Agencies which previously withdrew from the Authority. All assets shall be divided among the Member Agencies in accordance with and proportionate to the Water Purveyor Contribution amounts stated in Section 6.3.2, if it is feasible to do so.

8.5 Amendment. This Agreement may be amended at any time by the written approval of the governing body of each Member Agency upon recommendation of a majority of the Board of Directors of the Authority.

ARTICLE 9

SPECIAL PROVISIONS

9.1 Insurance. The Authority shall maintain types and levels of insurance coverage for the Authority as the Board of Directors determines to be reasonably adequate, provided, however, that each Member Agency shall be named as an additional insured on such policy of and/or agreement for insurance coverage.

9.2 Liability of Authority, Board, Officers, Employees. Pursuant to Government Code section 6508.1, the debts, liabilities, and obligations of the Authority shall not be the debts, liabilities and obligations of any of the Member Agencies or any of their respective members, officers, directors, employees or agents. The Authority, its Directors, officers, employees, staff and agents shall use ordinary care and reasonable diligence in the exercise of their powers and in the performance of their duties pursuant to this Agreement. No Member Agency, its officer, director or employee shall be responsible for any action taken or omitted by any other Member Agency, or its officers, or employees or the Authority, its officers, or employees.

9.3 Indemnity. The Authority shall indemnify, defend and hold harmless the Board of Directors, the individual Member Agencies, and their elected officials, members, officers, directors, employees and agents from and against any and all liability, loss, damages, expenses, costs (including, without limitations, costs and fees of litigation or arbitration) of every nature, arising out of any act or omission related to this Agreement, including, but not limited to those related to the use of any property and/or facility of any Member Agency, The Authority shall indemnify, defend and hold harmless the individual Member Agencies, and their elected officials, members, officers, directors, employees and agents from and against any and all liability, loss, damages, expenses, costs (including, without limitations, costs and

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13 fees of litigation or arbitration) of every nature, arising out of any willful misconduct of the Authority Board of Directors or its Board Members, officers or employees. Further, the duty of the Authority to indemnify, defend and hold harmless shall not extend to the activities of the individual Member Agencies, and their members, officers, directors, employees and agents that are outside the scope of this Agreement.

The Authority's duty to indemnify each Member Agency pursuant to this Agreement shall survive that Member Agency's withdrawal from the Agency. This section shall not be deemed to supersede, extinguish, or modify the indemnification provisions in the Cost Sharing Agreement.

9.4 Conflict of Interest Code. The Authority shall, by resolution, adopt a conflict of interest code as required by law.

ARTICLE 10

MISCELLANEOUS PROVISIONS

10.1 Severability. If any section, clause or phrase of this Agreement or the application thereof to any Party or any other person or circumstance is for any reason held to be invalid by a court of competent jurisdiction, it shall be deemed severable, and the remainder of the Agreement or the application of such provisions to the other Party or to other persons or circumstances shall not be affected thereby. Each Party hereby declares that it would have entered into this Agreement, and each subsection, sentence, clause and phrase thereof, irrespective that one or more sections, subsections sentences, clauses or phrases or the application thereof might be held invalid.

10.2 Notices. Notices required or permitted hereunder shall be sufficiently given if made in writing and delivered either personally or by registered or certified mail, postage prepaid to the respective Parties, as follows:

City of Arroyo Grande
Attention: City Manager
300 E Branch Street
Arroyo Grande, CA 93420
City of Pismo Beach
Attention: City Manager
760 Mattie Road
Pismo Beach, CA 93449
City of Grover Beach
Attention: City Manager
154 S. Eighth Street
Grover Beach, CA 93433

10.3 Other Obligations. The responsibilities and obligations of each Party to this Agreement shall be solely as provided in this Agreement, or as may be provided for in other agreements to be executed by the Parties, including but not limited to the Cost Sharing Agreement. In the event there is any conflict between this Agreement and the Cost Sharing Agreement, the provisions of this Agreement shall be controlling.

10.4 Consent. Whenever in this Agreement or in any amendment thereto consent or approval is required, the same shall not be unreasonably withheld.

10.5 Other Agreements Not Prohibited. Other agreements by and between the Parties of this Agreement or any other entity are neither prohibited nor modified in any manner by execution of this Agreement.

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14 10.6 Assignment. The rights, titles and interests of any Party to this Agreement shall not be assignable or transferable without the consent of the governing body of each Party hereto and the Board of Directors.

Any assignment of a membership in the Authority made under this Section 10.6 by the governing body of any Party hereto will not result in the novation of the assignor Member Agency’s obligations with respect to this Agreement, a Financing Agreement or any other agreement which may obligate the assignor Member Agency, unless such novation is agreed to in writing by such consenting Member Agency, the assignee and the assignor Member Agency.

10.7 Section Headings. The section headings herein are for convenience of the Parties only, and shall not be deemed to govern, limit, modify or in any manner affect the scope, meaning or intent of the provisions or language of this Agreement.

10.8 Laws of California. This Agreement is made in the State of California, under the Constitution and laws of such State, and shall be construed and enforced in accordance with the laws of such State.

10.9 Construction of Language. It is the intention of the Parties hereto that if any provision of this Agreement is capable of two constructions, one of which would render the provision void and the other of which would render the provision valid, then the provision shall have the meaning which renders it valid.

10.10 Cooperation. The Parties recognize the necessity and hereby agree to cooperate with each other in carrying out the purposes of this Agreement.

10.11 Successors. This Agreement shall be binding upon and shall inure to the benefit of the successors of the Parties hereto.

10.12 Enforcement. The Authority is hereby authorized to take any and all legal or equitable actions, including, but not limited to, an injunction and specific performance, necessary or permitted by law to enforce this Agreement.

10.13 Integration. This Agreement constitutes the full and complete Agreement of the Parties.

10.14 Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement. [Signatures on following page.]

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15 IN WITNESS WHEREOF, the Parties have caused this Joint Exercise of Powers Agreement to be executed and attested by their proper officers thereunto duly authorized on the day and year set forth below, making the same effective on the date signed by the last of all Parties hereto.

CITY OF ARROYO GRANDE: CITY OF PISMO BEACH:

By:

Caren Ray Russom, Mayor
Date:

By:

Ed Waage, Mayor
Date:

ATTEST:

By:

Jessica Matson, City Clerk
Date:

ATTEST:

By:

Erica Inderlied, City Clerk
Date:

APPROVED AS TO FORM:

By:

Timothy J. Carmel, City Attorney
Date:

APPROVED AS TO FORM:

By:

David M. Fleishman, City Attorney
Date:

CITY OF GROVER BEACH:

By:

Jeff Lee, Mayor
Date:

ATTEST:

By:

Wendi Sims, City Clerk
Date:

APPROVED AS TO FORM:

By:

David P. Hale, City Attorney
Date:
{CW108993.18} COST SHARING AGREEMENT
City of Arroyo Grande, City of Pismo Beach, and City of Grover Beach

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COST SHARING AGREEMENT
FOR PARTIES’ PARTICIPATION IN THE

CENTRAL COAST BLUE PROJECT
THIS COST SHARING AGREEMENT (hereinafter “Agreement”), is effective as of _______________________ (the “Effective Date”) by and between the City of Arroyo Grande, a California municipal corporation (“Arroyo Grande”), City of Grover Beach, a California municipal corporation (“Grover Beach”) and City of Pismo Beach, a California municipal corporation (“Pismo Beach”). The cities may be individually referred to herein as a “Party” or collectively as the “Parties.”
RECITALS:

WHEREAS, in 1983, the Parties hereto entered into a voluntary groundwater management plan to manage the safe yield of the Arroyo Grande Groundwater Basin, which agreement was updated by the Parties through approval of the 2002 Agreement Regarding Management of the Arroyo Grande Groundwater Basin (the “Management Agreement”); and WHEREAS, on April 30, 2002, the Parties hereto, among others, entered into a settlement agreement (the “Settlement Agreement”) related to a 1997 groundwater adjudication litigation filed by the Santa Maria Valley Water Conservation District, which reaffirmed the Management Agreement, established separate water management areas (the “Original Management Areas”) to be independently managed by the Parties and others, and requiring the Parties and others to develop an equitable cost sharing agreement for any newly constructed water resource and water production facilities within the Original Management Areas; and WHEREAS, on June 30, 2005, the Parties hereto entered into a stipulation imposing a physical solution for ensuring the Arroyo Grande Groundwater Basin’s long-term stability (the “Stipulation”). The Stipulation adopted a local management approach, establishing three management areas (the “Current Management Areas”) and requiring a monitoring program to be established in each of the Current Management Areas; and WHEREAS, on January 25, 2008, the Santa Clara Superior Court entered Judgment in the Santa Maria Groundwater Adjudication litigation approving the Stipulation, without qualification (the “Adjudication Decree”); and
WHEREAS, the Parties intend to participate in the Central Coast Blue Project to construct a regional recycled water project that will enhance supply reliability by injecting advanced purified water into the Northern Cities Management Area of the Santa Maria Groundwater Basin (“Project”). The Project will reduce vulnerability to drought and seawater intrusion by creating a seawater intrusion barrier and supplementing the naturally occurring groundwater; and WHEREAS, the Project must comply with the California Environmental Quality Act (“CEQA”), and the lead agency pursuant to CEQA is Pismo Beach. Both Arroyo Grande and Grover Beach are considered responsible agencies for the Project and are required to make findings for each significant effect of the Project and adopt a mitigation monitoring and reporting program; and
DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE March 14, 2022
Attachment 2
{CW108993.18} COST SHARING AGREEMENT
City of Arroyo Grande, City of Pismo Beach, and City of Grover Beach

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WHEREAS, Phase 1 of the Project includes construction of an Advanced Treatment Facility (“ATF”), treatment of all secondary treated flows from Pismo Beach’s Wastewater Treatment Plant (“WWTP”), construction of five injection wells and associated transmission lines, and injection of flows from the WWTP (“Phase 1”). Phase 1 proposes to treat wastewater from Pismo Beach to an advanced purification level to create between nine hundred (900) and one thousand (1,000) acre-feet of additional water per year; and WHEREAS, Phase 2 will include upgrades to the ATF to increase capacity, construction of two additional injection wells and associated transmission lines, and injection of flows from the South San Luis Obispo County Sanitation District Wastewater Treatment Plant (“Phase 2”); and WHEREAS, the Parties desire to enter into this Agreement to set forth the mechanism for establishing the fair share allotment of the Phase 1 costs in proportion to each Party’s share of the benefits of the Project.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, the Parties hereby agree as follows:

ARTICLE I
General Provisions

1. Recitals. The Recitals set forth above are expressly incorporated as terms of this Agreement. In the event of a conflict between the Recitals above and Articles I through V of this Agreement, Articles I through V shall prevail.

2. Term. This Agreement shall be effective from the last date of execution by all Parties until the date of issuance of a Notice of Completion of Phase 1 to all other Parties by Pismo Beach (the “Term”).

3. Management Agreement. In the event of a conflict between this Agreement and the Management Agreement, the Management Agreement shall prevail.

4. Adjudication Decree. In the event of a conflict between this Agreement and the Adjudication Decree, the Adjudication Decree shall prevail.

5. Developed Water. The Parties hereto acknowledge and agree that the recycled water injected into the ground pursuant to this Agreement, as well as all new developed water subsequently extracted, is New Developed Water as defined in the Adjudication Decree.

6. Municipal Pumping Entitlement. Each Party’s annual allocation of groundwater, as provided in the Management Agreement including agricultural conversion credits, shall remain as follows:

Arroyo Grande: 1,323 acre-feet per year.

Grover Beach: 1,407 acre-feet per year.

Pismo Beach: 700 acre-feet per year.

DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE {CW108993.18} COST SHARING AGREEMENT
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This Agreement in no way limits any Party’s right to pump their respective annual allocation of groundwater under the Adjudication Decree and in no way limits any Party’s right to transfer, sell, or lease their allocation of water consistent with the Adjudication Decree. Further, this Agreement in no way limits any Party’s right to pump their respective share of the recycled water injected into the ground pursuant to this Agreement, as well as all other dependent agreements described herein, for subsequent extraction.

ARTICLE II
Definitions

1. Construction Cost. Means the cost incurred as of the effective date of the first construction contract for Phase 1 of the Project through the determination by the Parties that construction of Phase 1 is complete, including the cost of the purchase of the Facility site for the Project. Construction Cost does not include legal expenses attributable to each Party’s City Attorney, retained counsel or their associates.

2. Enterprise. Means, for purposes of application to the Cities of Arroyo Grande and Grover Beach, the Party’s water system, including all facilities, works, properties and structures of the Party for the treatment, transmission and distribution of potable and non-potable water, including all contractual rights to water supplies, transmission capacity supply, easements, rightsof-way and other works, property or structures necessary or convenient for such facilities, together with all additions, betterments, extensions and improvements to such facilities or any part thereof hereafter acquired or constructed. For purposes of City of Pismo Beach, the above definition shall include both the Party’s water and wastewater system.

3. Facility or Facilities. Means the advanced water treatment facility that will receive and further treat wastewater influent from Pismo Beach’s WWTP, in Phase 1, which as of the date of this Agreement is proposed to be constructed on Assessor’s Parcel Number 060-543-016 in the City of Grover Beach, including the Facility’s equalization basin, injection wells, storage tanks, pump station and associated piping and equipment from the Pismo Beach WWTP.

4. Gross Revenues. Means all gross income and revenue received or receivable by the Party from the ownership and operation of its Enterprise, calculated in accordance with Generally Accepted Accounting Principles, including all rates, fees and charges (including fees for connecting to the Enterprise and any water stand-by or water availability charges or assessments) received by the Party for water service made available or provided by the Enterprise and all other income and revenue howsoever derived by the Party from the Enterprise or arising from the Enterprise; provided, however, that (i) any specific charges levied for the express purpose of reimbursing others for all or a portion of the cost of the acquisition or construction of specific facilities, or (ii) customers’ deposits or any other deposits subject to refund until such deposits have become the property of the Party, are not Gross Revenues and are not subject to the lien of the Agreement. For purposes of Pismo Beach, this definition will include all income and revenue received as defined by this provision for both the water and wastewater system.

5. Lead Agency. Means the public agency that has the principal responsibility for carrying out or approving a project. The lead agency for this Project is Pismo Beach.

DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE {CW108993.18} COST SHARING AGREEMENT
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6. Net Revenues. “Net Revenues” means, for any period, all of the Gross Revenues during such period less all of the Maintenance and Operation Costs during such period. For purposes of this provision, Maintenance and Operation Expense means all reasonable expenses incurred by the Party in causing the Enterprise to be operated and maintained in good repair, working order and condition, including payments made to any other municipal corporation or private entity for water service (or other utility service if the Party combines such service in the Enterprise and enters into a contract for such services), but not including any depreciation or taxes levied or imposed by the Party or payments to the Party in lieu of taxes, or capital additions to or capital replacements of any portion of the Enterprise. Net Revenues for the City of Pismo Beach shall mean the above definition as it applies to both the water and wastewater systems.

7. Pre-Construction Cost. Includes the cost of planning, designing and procuring of contracts for professional services required to obtain and perfect any necessary permits, leases, licenses, or other requirements for Phase 1 of the Project, beginning with the 2017 Regional Groundwater Sustainability Program Contract through, but not including award of the first construction contract for Phase 1 of the Project. Pre-Construction Cost does not include legal expenses attributable to each Party’s City Attorney, retained counsel or their associates.

ARTICLE III
Project Delivery and Governance Framework

1. Lead Agency Duties. Pismo Beach will remain Lead Agency and act as project developer through final completion of Phase 1 of the Project. As the Lead Agency, Pismo Beach will act as the construction manager for Phase 1 and will provide administration of Phase 1 on all Parties' behalf. Pismo Beach is hereby authorized and empowered to represent the Parties in construction supervisory and coordination activities, including the authority to issue field work directives and/or change orders on behalf of the Parties, pursuant to the terms of this Agreement.

As Lead Agency, Pismo Beach will contract for professional services and is responsible for obtaining and perfecting any necessary permits, leases, licenses or other approvals for Phase 1 of the Project, consistent with its own contracting policies. The Parties shall pay their pro rata shares of Pre-Construction costs for any professional service expenses incurred by Pismo Beach in connection with obtaining such Phase 1 approvals, in accordance with Article IV below. a. Contract Awards. Pismo Beach shall adhere to all federal, state, and local laws in awarding contracts for Phase 1 and, to the extent any federal grant funds are used to finance contracts for Phase 1, specifically in compliance with Title 2 of the Federal Code of Regulations, part 200 et seq.
b. Local Hire. Subject to Section 1.a., above, every contractor submitting a bid to Pismo Beach for a public works contract for Phase 1 of the Project shall agree to make a good faith effort to hire individuals who are local residents. A “good faith effort” means a contractor will take the following or similar actions to recruit and maintain residents of San Luis Obispo County and Santa Barbara County as part of the construction workforce:
i. Contact local recruitment sources to identify individuals who are local residents;
DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE {CW108993.18} COST SHARING AGREEMENT
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ii. Advertise for individuals who are local residents in trade papers and newspapers of general circulation within San Luis Obispo and Santa Barbara Counties; and
iii. With respect to any portion of a public works contract to be performed by a subcontractor, identify subcontractors whose workforce includes individuals who are local residents.
c. Grant Funding and Financing. As Lead Agency, Pismo Beach will apply for available grant funding for Pre-Construction and Construction Costs of Phase 1 of the Project, including but not limited to Proposition 1 Groundwater Grant Program Grant Funding from the State Water Resources Control Board and Title XVI WaterSMART Water Reclamation and Reuse Grant Funding from the United States Bureau of Reclamation. The Parties may jointly develop a financing plan describing the anticipated mechanisms for obtaining the necessary funding to construct Phase 1 of the Project.

2. Phase 1 Accounting. Pismo Beach will maintain Phase 1 accounting and will invoice the other Parties consistent with the Water Purveyor Contributions identified in Article IV of this Agreement. Pismo Beach shall, on a monthly basis, invoice each Party for its pro rata percentage of the Pre-Construction Costs and Construction Costs incurred by Pismo Beach during such preceding, if not reimbursed by other funding sources, as established in the annual operating budget, and further detailed in Article IV of this Agreement. All Parties agree to pay Pismo Beach’s invoices within thirty (30) days of the date of the invoice subject to and consistent with Article IV, Section 4 of this Agreement.

3. Joint Powers Authority. Contemporaneously with preparation of this Agreement, the Parties are negotiating a Joint Powers Agreement to establish a Joint Powers Authority (“JPA”), pursuant to Government Code section 6500 et seq., that will own and operate the Project and have the power to issue debt and enter into loans or financing agreements to finance the Construction Costs for Phase 1. The Joint Powers Agreement will contain provisions addressing, without limitation, acquisition of the Facility site from Pismo Beach, ownership of the Facility, and financing of Construction Costs, including repayment obligations of the Parties consistent with the Water Purveyor Contribution percentages identified in Article IV, Section 2.a of this Agreement. It is the intent of the Parties that the JPA shall apply for and obtain financing through the State Water Resources Control Board’s Clean Water State Revolving Fund for Construction Costs or other financing mechanisms not otherwise covered by grant funding awarded to the Project and for the JPA to comply with all requirements to obtain such financing. The potential loans could be separate installment sale agreements based on the respective share of each Party, and repayment would be paid either directly to the JPA by each Party consistent with the Water Purveyor Contribution percentages identified in Article IV, Section 2.a of this Agreement or directly to the State Water Resources Control Board or bond trustee, depending on the funding mechanism. In the event that the JPA is not able to finance the Construction Costs, the Parties will seek financing consistent with the financing plan described in Article III, Section 1.c above, which may include applications by each Party to the State Water Resources Control Board’s Clean Water State Revolving Fund for its respective share of Construction Costs. Any financing mechanism for construction of Phase 1 of the Project, ownership, and operation of the Facility will be addressed DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE {CW108993.18} COST SHARING AGREEMENT
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in the Joint Powers Agreement. The Joint Powers Agreement will also contain provisions regarding governance of the JPA that will include, at a minimum, the following requirements: the JPA will be governed by a three-member Board of Directors consisting of one elected official from each Party; each JPA Director will retain equal voting rights on the JPA Board of Directors; and the JPA Board of Directors will meet bi-monthly or quarterly.

4. Parties’ Review of Construction Scope, Schedule and Budget. Prior to initiating construction, the City Council for each Party shall have a reasonable opportunity to review and approve the scope, schedule, and budget of Phase 1 of the Project. The approved budget for Phase 1 shall include a twenty percent (20%) contingency to allow for appropriate flexibility for contract management by the Lead Agency. Change orders and amendments that exceed twenty percent (20%) of the most recently-approved contract value shall require approval by the City Council for each Party. If a Party does not grant such approval, the Parties will immediately confer in an attempt to reconcile the disagreement. Should the Parties be unable to reach agreement, measures shall be taken to reduce the additional costs below 20% of the current contract value and in no such event shall the Parties be liable for Construction Costs in excess of this amount absent a written amendment to this Agreement.

5. Technical Advisory Committee. The City Managers of the Parties may create a temporary Technical Advisory Committee (“TAC”) to assist the Parties in reviewing the technical aspects of Phase 1 and the Phase 1 budget. The TAC will consist of nine (9) members with three members appointed by each Party’s City Manager. If created, the TAC will be established within one (1) month of the Effective Date and will meet monthly until completion of Phase I of the Project. The TAC will provide technical input on the following: (1) review and suggest any modifications to the pre-construction and construction plans and agreements for Phase 1; (2) assist the Parties in deliberating on technical matters that could be of issue in the development of Phase 1, and make recommendations to be presented to the City Councils of the Parties on all major technical aspects of Phase 1 of the Project; and (3) develop, for consideration by the Parties’ City Councils, joint operational protocols for the JPA to ensure the continued operation of the facilities and viability of the Project in the future. The TAC will be disbanded upon completion of Phase I of the Project.

6. Joint Agency Meetings. During design and construction of Phase 1, the City Councils for each Party will meet jointly at least once but no more than twice per year to provide a venue for discussion and transparency for the public on the progress of Phase 1, to receive Phase 1 updates, and discuss policy issues as needed. The TAC will present a summary of their work and analysis of Phase 1 at all the joint meetings.

ARTICLE IV
Pre-Construction and Construction Costs

1. Facility Purchase. Pismo Beach has previously purchased the site for the Facility at a total cost of $1,815,373 (the “Purchase Price”). The Purchase Price shall be included as a Construction Cost of Phase 1 of the Project. The Parties acknowledge that pursuant to Article XIII, Section 11, subdivision (a), of the California Constitution, the Facility site may be considered taxable real property. As such, the Parties shall cooperate to minimize the property tax implications DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE {CW108993.18} COST SHARING AGREEMENT
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of Pismo Beach’s current ownership of the Facility site by either allocating such property tax costs among the Parties according to the Water Purveyor Contribution percentages, as defined in Article IV below, by transferring title of the Facility site to the JPA, or by such other action upon which the Parties may agree.

2. Water Purveyor Contributions. The Parties shall pay their pro rata share of all PreConstruction and Construction Costs incurred by Pismo Beach in connection with Phase 1 of the Project.
a. The Parties agree to the following cost allocation of the total PreConstruction and Construction costs for Phase 1 for each Party:
i. Arroyo Grande shall contribute 25%.
ii. Grover Beach shall contribute 36%.
iii. Pismo Beach shall contribute 39%.
b. Pursuant to Section VII.3(c) of the Stipulation, as adopted by the Adjudication Decree, the Parties may engage in contractual transfers, leases, licenses, or sales of any of their water rights, including voluntary fallowing programs, for drought protection, conservation, or other management purposes; however, no groundwater produced within the Current Management Areas, including water produced by Phase 1 of the Project, may be transported outside of the Current Management Areas without the written agreement of each Party.

3. Pre-Construction Cost Review and Adjustment. Following approval of this Agreement, the City Council for each Party shall have a reasonable opportunity to review and approve the scope, schedule, and budget of the remaining Pre-Construction Costs for Phase 1 of the Project, which will include a twenty percent (20%) contingency to allow for appropriate flexibility for contract management by the Lead Agency. Change orders and amendments that exceed twenty percent (20%) of the current Pre-Construction Cost contract value shall require approval by the City Council for each Party. If a Party does not grant such approval, the Parties will immediately confer in an attempt to reconcile the disagreement. Should the Parties be unable to reach agreement, measures shall be taken to reduce the additional costs below 20% of the current contract value and in no such event shall the Parties be liable for Pre-Construction Costs in excess of these amounts absent a written amendment to this Agreement. Cost share percentages for Pre‐ Construction Costs may be temporarily adjusted to help reconcile remaining Pre‐Construction Cost contributions for each of the Parties, if funding is available, until the cumulative contributions by each Party approximately match the Water Purveyor Contribution percentages set forth in Section 2, above, taking into account the payments already made by Pismo Beach, and the contributions already made by Grover Beach and Arroyo Grande, for Phase 1. Once Pre‐Construction Cost contributions approximate the Water Purveyor Contribution percentages, the remaining PreConstruction Costs will be split according to the Water Purveyor Contribution percentages. In the event that the costs funded by Pismo Beach, Arroyo Grande, and Grover Beach do not match the cumulative contributions in the Water Purveyor Contribution percentages set forth in Section 2, above, prior to construction, the Parties shall structure the construction financing to achieve the contributions in the Water Purveyor Contribution percentages.

DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE {CW108993.18} COST SHARING AGREEMENT
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4. Invoicing. Pismo Beach shall, on a monthly basis, invoice each other Party for its pro rata percentage of the expenses incurred, as established in the budget approved by the Party’s City Councils for all Pre-Construction and Construction Costs. Payment shall be made within thirty (30) days of receipt of each invoice as to all non‐disputed charges. If a Party disputes any of the charges, it shall give written notice to Pismo Beach within thirty (30) days of receipt of an invoice of any disputed charges set forth on the invoice. In the event that payment is not made as to all non‐disputed charges consistent with this Section, interest may apply at the maximum rate allowed by law. Notwithstanding the foregoing, Construction Costs financed by the JPA shall be invoiced to and paid by the JPA consistent with any financing agreements entered into by the JPA, including the time frames and other requirements included in the financing agreements. In the event that the JPA does not obtain financing for the Construction Costs and each Party obtains financing for its respective share of Construction Costs, invoices will be paid consistent with the financing agreements entered into by the Parties, including the time frames and other requirements included in the financing agreements. Pismo Beach agrees to provide all documentation necessary for the JPA, or for a Party individually financing its share of the Construction Costs, to receive reimbursements for Construction Costs consistent with the financing agreement entered into by the JPA or the Party.

5. Payment Limitations. The respective obligation of each Party to make payments herein with respect to the Pre-Construction and Construction Costs of Phase 1 or in furtherance of the objective and purpose of this Agreement, is a special, limited obligation payable solely from net revenues of each party’s respective Enterprise fund(s), and does not constitute a debt or pledge of the faith and credit of each Party or of the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction. The payments made under this Agreement are payable from net revenues of each party’s respective Enterprise fund(s) on such a basis as is dictated by each Party’s existing debt instruments. The respective obligation of each Party to make payments hereunder or in furtherance of the objective and purpose of this Agreement is further subject to the Parties establishing sufficient net revenues to fund the obligations of this Agreement, which includes, but is not limited to, approval by the Parties’ City Councils for an increase in Enterprise user fees sufficient to meet the above obligations of this Agreement, the successful implementation of a Proposition 218 protest hearing wherein the Parties are authorized to proceed with approval of a fee increase, and the attainment of Proposition 1 Groundwater Grant Program Grant Funding by the State Water Resources Control Board.

6. Grant Funding. Any grant funding obtained for Pre-Construction or Construction Costs will be applied to reduce the total cost of Phase 1. The Parties’ obligations for such costs shall be reduced according to the contribution percentages set forth in Section 2, above.

ARTICLE V
Miscellaneous

1. Indemnification.
a. Each Party hereto agrees to protect, indemnify, defend, and hold harmless each of the other Parties and their elected officials, officers, employees, agents, successors, and DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE {CW108993.18} COST SHARING AGREEMENT
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assigns from and against any and all actual or potential claims, liabilities, damages, losses, fines, penalties, judgments, awards, costs, and expenses (including without limitation reasonable attorneys’ fees and costs and all foreseeable, unforeseeable and consequential damages) asserted against, resulting in, imposed upon, or incurred by said other Party by reason of the first Party’s breach of any provisions of this Agreement, the Adjudication Decree, the Management Agreement, or applicable federal or state law. This indemnification shall survive the termination of this Agreement.
b. Notwithstanding the above indemnity provision, costs and expenses arising from an action challenging the preparation, approval, or certification of the Facility Environmental Impact Report (Facility EIR) or any other document related to certification under the California Environmental Quality Act (CEQA) used by Pismo Beach for the approval of the Project, shall be considered a Pre-Construction Cost subject to pro-rata division. However, if the challenge is successful, Pismo Beach shall pay any award of attorney’s fees.

2. Records. Pismo Beach shall maintain identifiable records regarding any and all costs and expenses subject to this Agreement, including records of billing, payment, and other documents related to the execution of its obligations under this Agreement. The Parties and their designated agents shall have the right to inspect all records maintained by Pismo Beach associated with this Agreement at any time during normal business hours, with fifteen (15) business days’ advanced written notice to Pismo Beach.

3. Assignability. This Agreement shall not be assignable by any Party hereto to any other Party or non-party.

4. No Third Party Beneficiary. This Agreement shall not be construed or deemed to be an agreement for the benefit of any third party or parties and no third party or parties shall have any claim or right of action hereunder for any cause whatsoever.

5. Notice. Any notice or communication required hereunder between the Parties must be in writing and may be given either personally, by registered or certified mail (return receipt requested), or by Federal Express, UPS, or other similar couriers providing overnight delivery. If personally delivered, a notice or communication shall be deemed to have been given when delivered to the Party whom it is addressed. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of (i) actual receipt by any of the addressees designated below as the Party to whom notices are to be sent; or (ii) five (5) calendar days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar overnight courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any Party hereto may at any time, by giving ten (10) calendar days’ written notice to the other Party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the Parties at their addresses set forth below:

DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE {CW108993.18} COST SHARING AGREEMENT
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To City of Arroyo Grande: Whitney McDonald
City Manager for City of Arroyo Grande
300 E. Branch Street
Arroyo Grande, CA 93420
With copy to: White Brenner LLP
Attn: Barbara A. Brenner, Esq.
1414 K Street, 3rd Floor
Sacramento, CA 95814
To City of Grover Beach: Matthew Bronson
City Manager for City of Grover Beach
154 S. Eighth Street
Grover Beach, CA 93433
With copy to: David Hale, City Attorney
1233 W. Shaw Ave. Ste. 106
Fresno, CA 93711
To City of Pismo Beach James R. Lewis
City Manager for City of Pismo Beach
760 Mattie Road
Pismo Beach, CA 93449
With copy to: Richards, Watson & Gershon
Attn: Dave Fleishman, Esq.
847 Monterey Street, Suite 206
San Luis Obispo, CA 93401

6. Amendments. No alteration of the terms of this Agreement shall be valid unless made in writing and signed by the Parties and incorporated into this Agreement.

7. Severability Clause. In case any one or more of the provisions contained herein shall, for any reason, be held invalid, illegal, or unenforceable in any respect, it shall not affect the validity of the other provisions, which shall remain in full force and effect.

8. Captions. The captions of the various sections, paragraphs and subparagraphs of this Agreement are for convenience only and shall not be considered nor referred to for resolving questions of interpretation of this Agreement.

9. Opt-out Clause. Any Party may opt-out of this Agreement prior to the award of the first Phase 1 construction contract. Any Party exercising this opt-out clause shall be responsible for their pro rata share of the Pre-Construction Costs as set forth in Article IV up to the date of opting-out.

DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE {CW108993.18} COST SHARING AGREEMENT
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10. Dispute Resolution. In the event of any dispute arising from or relating to this Agreement, the disputing Party shall, within thirty (30) calendar days of discovery of the event(s) giving rise to the dispute, notify all Parties to this Agreement in writing of the basis for the dispute.

Within thirty (30) calendar days of receipt of said notice, the Parties shall meet and confer in good faith to informally resolve the dispute. Except as provided in Article III, Section 4, and Article IV, Section 3, all disputes that are not resolved informally shall be settled by non-binding mediation.

Within ten (10) calendar days following the failed informal proceedings, each Party shall nominate and circulate to all other Parties the name of two (2) mediators. Within ten (10) calendar days following the nominations, the Parties shall rank their top three among all nominated mediators, awarding 3 points to the top choice, 2 points to the second choice, and 1 point to the third choice, and zero points to all others. Each Party shall forward its tally to Pismo Beach, who shall tabulate the points and notify the Parties of the name of the mediator with the highest cumulative score, who shall be the selected mediator. In the event of a tie vote, or in the event the selected mediator declines or ceases to act, Pismo Beach may develop a procedure for approval by the Parties for selecting a mediator. Upon completion of mediation, if the controversy has not been resolved, any Party may exercise all rights to bring a legal action relating to the controversy in state or federal court, as applicable.

11. Statutes and Law Governing Contract. This Agreement shall be governed and construed in accordance with the statutes and laws of the State of California.

12. Venue. Venue for all legal proceedings shall be in the Superior Court of California in and for the County of San Luis Obispo.

13. Waiver. The Parties’ waiver of any term, condition or covenant, or breach of any term, condition or covenant shall not be construed as a waiver of any other term, condition or covenant or breach of any other term, condition, or covenant.

14. Attorney’s Fees and Costs. If any action at law or in equity, including action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing Party shall be entitled to reasonable attorney’s fees and costs, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which such Party may be entitled.

15. Entire Agreement. This Agreement contains the entire Agreement between Arroyo Grande, Grover Beach and Pismo Beach relating to Phase 1 of the Project. Any prior agreements, promises, negotiations, or representations not expressly set forth in this Agreement are of no force or effect.

16. Good Faith. To the extent reasonably required, each Party to this Agreement shall, in good faith, cooperate and assist the other Party in meeting its obligations under this Agreement.

17. Authority. The Parties to this Agreement warrant and represent that they have the power and authority to enter into this Agreement and the names, titles, and capacities herein stated on behalf of any entities, persons, states, counties or cities represented, or purported to be represented, by such entities, persons, states, counties or cities and that all former requirements necessary or required by state or federal law in order to enter into the Agreement have been fully DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE {CW108993.18} COST SHARING AGREEMENT
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complied with. Further, by entering into this Agreement no Party hereto shall have breached the terms or conditions of any other contract or agreement to which such Party is obligated, which such breach would have a material effect hereon.

18. Counterparts. This Agreement may be executed in counterparts, and all such executed counterparts shall constitute the same agreement. It shall be necessary to account for only one such counterpart from and executed by each Party hereto in proving this Agreement.

19. Other Agreements. This Agreement shall not prevent any Party from entering into similar agreements with others. The Parties acknowledge and accept the terms and conditions of this Agreement as evidenced by the following signatures of their duly authorized representatives.

It is the intent of the Parties that this Agreement shall become operative on the Effective Date.

20. Drafting and Ambiguities. Each Party acknowledges that it has reviewed this Agreement with its own legal counsel, and based upon the advice of that counsel, freely entered into this Agreement. Each Party has participated fully in the review and revision of this Agreement.

Any rule of construction that ambiguities are to be resolved against the drafting Party, does not apply in interpreting this Agreement.
[Signatures on Following Page]

DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE

COST SHARING AGREEMENT
City of Arroyo Grande, City of Pismo Beach, and City of Grover Beach

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first written above.

CITY OF ARROYO GRANDE
a municipal Corporation
By:

Whitney McDonald, City Manager
Date:

APPROVED AS TO FORM:

By:

Timothy J. Carmel, City Attorney
ATTEST:

By:

Jessica Matson, City Clerk

CITY OF GROVER BEACH
A municipal Corporation
By:

Matthew Bronson, City Manager
Date:

APPROVED AS TO FORM:

By:

David P. Hale, City Attorney
ATTEST:

By:

Wendi Sims, City Clerk
{CW108993.18}

CITY OF PISMO BEACH
a municipal Corporation
By:

James R. Lewis, City Manager
Date:

APPROVED AS TO FORM:

By:

David M. Fleishman, City Attorney
ATTEST:

By:

Erica Inderlied, City Clerk
DocuSign Envelope ID: 1820EDE6-C475-4CB7-BCAB-F765A830B6EE 3/11/2022
3/11/2022
3/14/2022

Grover Beach City CouncilSeptember 26, 2022

Grover Beach City Council
September 26, 2022