Grover Beach City Council
November 12, 2024

AGENDA

GROVER BEACH CITY COUNCIL

GROVER BEACH CITY HALL - COUNCIL CHAMBER
154 SOUTH EIGHTH STREET

GROVER BEACH, CALIFORNIA
TUESDAY, NOVEMBER 12, 2024, 6:00 PM
Next Resolution No .24-57
Next Ordinance No. 24-09

In compliance with the Americans with Disabilities Act, if you need special assistance to participate in a City meeting, please contact the City Clerk's Office (805-473-4567) at least 48 hours prior to the meeting to ensure that reasonable arrangements can be made to provide accessibility to the meeting.

CALL TO ORDER

CALL TO ORDER

FLAG SALUTE
ROLL CALL Council Members Daniel Rushing, Clint Weirick, Zach Zimmerman, Mayor Pro Tem Robert Robert, and Mayor Karen Bright

CLOSED SESSION ANNOUNCEMENTS
On Tuesday, October 15, 2024 at 7:55 p.m., the Council met in Closed Session regarding the following items:

A. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) or (3) of subdivision (d) of Government Code section 54956.9
One (1) Case.

Closed Session Announcements: At 8:15 p.m., Mayor Bright reconvened the meeting in open session with all Council Members present and announced the no reportable action taken during Closed Session.

AGENDA REVIEW
At this time the City Council will review the order of business to be conducted and receive requests for, or make announcements regarding, any change(s) in the order of the day. The Council should by motion adopt the agenda as presented or as revised.

CEREMONIAL CALENDAR

1. Proclamation for National Hospice and Palliative Care Month Meetings can be viewed on Channel 20 and are live streamed on the City’s website via www.slospan.org. Members of the public who cannot attend the meeting in person may provide public comment during the meeting by calling (805) 321-6639 to provide public comment via phone (the phone line will open just prior to the start of the meeting at 6:00 PM) or written public comments can be submitted via email to [email protected] prior to the Council meeting. If submitting written comments in advance of the meeting, please note the agenda item.

Agenda: Grover Beach City Council Meeting Page 2
Tuesday, November 12, 2024

PRESENTATIONS

2. 5Cities Homeless Coalition Update

PUBLIC COMMUNICATIONS
During this time, the Council will allow up to 15 minutes for Public Communication with additional communication, if necessary, allowed after the Regular Business Items. Any member of the public may address the Council for a period not to exceed three minutes total on any item of interest within the jurisdiction of this Council. The Council will listen to all communications; however, in compliance with the Brown Act, the Council cannot act on items not on the agenda.

CONSENT AGENDA
The following routine items listed below are scheduled for consideration as a group. Recommendations for each item are noted in parentheses. Members of the audience may speak on any item(s) listed on the Consent Agenda. Any Council Member, the City Attorney, or the City Manager may request that an item be withdrawn from the Consent Agenda to allow for full discussion. Items withdrawn from the Consent Agenda will be heard after the rest of the Consent Agenda is approved.

3. Treasurer’s Report for the Period September 1, through September 30, 2024 – Finance Manager Flores
(Recommended Action: Approve the Treasurer’s Report as submitted.)

VOICE VOTE

4. Treasurer’s Report for the 2022 Streets Bond Account - $10,000,000 for the Period September 1, through September 30, 2024 – Finance Manager Flores (Recommended Action: Approve the Treasurer’s Report as submitted.)

VOICE VOTE

5. Minutes of the City Council Meeting on Tuesday, October 15, 2024 – City Clerk Sims (Recommended Action: Approve the minutes as submitted or revised.)

VOICE VOTE

6. Underwriting Services for the 2024 Community Development Block Grant (CDBG) Economic Development Microenterprise Business Assistance Program – Community Development Director Martin
(Recommended Action: Approve an Agreement with Angel H. Johnstone in the amount of $151,360 for Underwriting Services to support the 2024 Community Development Block Grant (CDBG) Economic Development Microenterprise Business Assistance Program and authorize the Mayor to execute the agreement on behalf of the City.)

ROLL CALL VOTE

7. Construction Management Services Ramona Garden Park (Phases 1 and 2) – Public Works Director/City Engineer Ray and CIP Manager Wiggin (Recommended Action: Approve an agreement with Willdan in the amount of $456,023 for construction management services associated with the CIP 1259 – Ramona Garden Park Project Phases 1 and 2 and authorize the Mayor to execute the agreement on behalf of the City.)

ROLL CALL VOTE

8. FY 2024-25 First Quarter Financial Review – Administrative Services Director Szamet (Recommended Action: Receive and file the FY 2024-25 First Quarter Financial Review.)
Agenda: Grover Beach City Council Meeting Page 3
Tuesday, November 12, 2024

PUBLIC HEARING
None

REGULAR BUSINESS

9. South County Sanitary Services Rate Increase – Administrative Services Director Szamet
(Recommended Action: 1) Review the Integrated Solid Waste Collection Rate Adjustment request; 2) Set a public hearing for January 27, 2025, to consider adjusting the waste collection services rates for January 1, 2025 and each January 1 from 2026 through 2029.)

ROLL CALL VOTE

PUBLIC COMMUNICATIONS
Any member of the public may address the Council for a period not to exceed three minutes total on any item of interest within the jurisdiction of this Council. The Council will listen to all communications; however, in compliance with the Brown Act, the Council cannot act on items not on the agenda.

COUNCIL COMMITTEE REPORTS
This item gives the Mayor and Council Members the opportunity to present reports to the other members regarding committees, commissions, boards, or special projects on which they may be participating.

Air Pollution Control District (APCD) Karen Bright (Alt: Robert Robert) South SLO County Sanitation District (SSLOCSD) Karen Bright (Alt: Clint Weirick) Integrated Waste Management Authority (IWMA) Robert Robert (Alt: Daniel Rushing) Five Cities Fire Joint Powers Authority Daniel Rushing (Alt: Clint Weirick) SLO Council of Governments / SLO Regional Transit Authority Daniel Rushing (Alt: Karen Bright) (SLOCOG / SLORTA)
South County Transit Committee Daniel Rushing (Alt: Karen Bright) Zone Three Advisory Committee Daniel Rushing (Alt: Karen Bright) California Joint Powers Insurance Authority (CJPIA) Clint Weirick (Alt: Zach Zimmerman) Homeless Services Oversight Council (HSOC) Clint Weirick (Alt: Zach Zimmerman) SLO County Water Resources Advisory Committee (WRAC) Clint Weirick (Alt: Robert Robert) REACH Zach Zimmerman (Alt: Robert Robert)
South County Chambers of Commerce Zach Zimmerman (Alt: Daniel Rushing) Visit SLO CAL Advisory Committee Zach Zimmerman (Alt: Robert Robert)

COUNCIL COMMUNICATIONS
This item gives individual Council Members the opportunity to seek consensus for scheduling a specific item on a future agenda, authorizing staff time to provide background information and prepare a staff report for a future agenda, or to comment on Council business, City operations, projects or other items of community interest.

CITY MANAGER’S REPORTS AND COMMENTS
Agenda: Grover Beach City Council Meeting Page 4
Tuesday, November 12, 2024

CITY ATTORNEY’S REPORTS AND COMMENTS

CLOSED SESSION
It is the intention of the City Council to meet in Closed Session concerning the following items:

A. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) or (3) of subdivision (d) of Government Code section 54956.9
One (1) Case.

B. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Government Code Section 54957
Title: City Manager

ADJOURNMENT
* * * * *
Per Resolution No. 17-21, the public portion of City Council meetings will be scheduled to start at 6:00 p.m. and conclude no later than 11:00 p.m. Any open session items remaining on the agenda at 11:00 p.m. that have not been discussed or considered by the City Council will be continued to an adjourned meeting of the City Council (scheduled before the next regular meeting). However, the City Council may choose to continue the meeting past 11:00 p.m. upon a proper motion and a 4/5ths vote in favor of such an action. * * * * *
Staff reports or other written materials relating to each item of business referred to on this agenda are available from the City website www.groverbeach.org and on file in the City Clerk’s Office. A public counter copy is available for public inspection and reproduction during normal business hours at City Hall, 154 South 8th Street, Grover Beach, CA. Related materials submitted after distribution of the agenda packet are available in the City Clerk's Office during normal business hours. If you have questions regarding any agenda item, please contact the appropriate City Department. Any writings or documents regarding any item on this agenda, not exempt from public disclosure, provided to a majority of the City Council and distributed subsequent to distribution of the agenda packet will be made available for public inspection in the City Clerk’s Office during normal business hours.
* * * * *
Note: This agenda was prepared and posted pursuant to Government Code Section 54954.2. This agenda is subject to amendment up to 72 hours prior to the date and time set for the meeting. Please refer to the agenda posted at City Hall for any revisions or call the City Clerk’s Office at (805) 473-4567 for more information.
* * * * *
The agenda and staff reports are also available on the City’s website: www.groverbeach.org

CITY OF GROVER BEACH

POLICIES AND PROCEDURES FOR CONDUCT AND DECORUM AT COUNCIL MEETINGS (Pursuant to Resolution No. 07-44, adopted 04-16-07, revised 02-18-2020) The City Council and staff welcomes and encourages civic participation and debate on issues. The Council values the public’s opinion and in every Council meeting invite and encourages the public to address the Council on any matter of interest. The Council adopted these policies and procedures for appropriate conduct and decorum at Council meetings and establish guidance for public participation during Council meetings.

These policies will foster and provide greater clarity to preserve the intent of open government and maintain a positive environment for public input and City Council decision-making.

1.0 DECORUM AND ORDER – IN GENERAL

1.1 The presiding officer is responsible for the maintenance of order and decorum at all times.

1.2 The presiding officer shall determine all points of order subject to the right of any Council member to appeal to the City Council by majority vote. If any appeal is taken, the question shall be “Shall the decision of the presiding officer be sustained” in which event a majority vote of the Council shall govern and conclusively determine such question of order.

1.3 All Council members, staff members and members of the public should speak respectfully and avoid the use of profanity, vulgarity and slanderous comments. Recognizing that the First Amendment precludes the City Council from prohibiting speakers from speaking based upon the content of their speech, the presiding officer shall use their best efforts, short of enforcement action, to remind and encourage all participating in the meeting to keep their speech respectful towards others and within bounds appropriate for children and persons of sensitivity toward course language as a courtesy to others present or otherwise viewing Council meetings.

2.0 DECORUM AND ORDER – COUNCIL MEMBERS

2.1 Manner of Speaking.

Any Council member desiring to speak shall first address the presiding officer. Upon recognition by the presiding officer, the Council member shall speak only to the question under debate.

U2.1(a) Questioning Staff.

A Council member desiring to question the staff should address his question to the City Manager, or, in appropriate cases, the City Clerk or City Attorney, who shall be entitled either to answer the inquiry or to designate some staff member for that purpose. Such a designation may be made at the time of any staff presentation or on the agenda listing for the item.

U2.1(b) Interruptions.

Once recognized, a Council member shall not be interrupted while speaking unless called to order by the presiding officer; unless a point of order is raised by another Council member, or unless the speaker chooses to yield to questions from another Council member.

3.0 DECORUM AND ORDER – STAFF

3.1 City Manager Responsibilities
The City Manager is responsible for ensuring that members of the administrative staff observe the rules of decorum and order set forth in this Policy.

3.2 AAddressing the City Council
Any administrative staff member desiring to address the City Council or members of the public shall first be recognized by the presiding officer. All remarks shall be addressed to the presiding officer and not to any individual Council Member or member of the public. Administrative staff members shall accord the utmost courtesy to the City Council, other administrative staff members and the public.

4.0 DECORUM AND ORDER – MEMBERS OF THE PUBLIC

4.1 AAddressing the City Council
Any member of the public desiring to address the City Council or members of the public shall first be recognized by the presiding officer at the appropriate place on the agenda. All remarks shall be addressed to the presiding officer and not to any individual Council Member, City Manager, City Attorney or member of the administrative staff or member of the public.

4.2 Time Limitation for Addressing the City Council
Public comment when addressing the City Council shall be generally limited to three (3) minutes per speaker. Depending on the extent of the agenda and the number of persons desiring to speak on an issue, the presiding officer may, at the beginning of the hearing, set a different time limit for each speaker. Any person may speak for a longer period of time upon approval from the presiding officer, when deemed necessary, for instance when a person is speaking on behalf of a group or has a graphic or slide presentation requiring more time.

4.3 Failure to Yield, Disruptions
Any person who refuses to relinquish the floor after their allotted time or while attending the City Council meeting engages in conduct or speech which disrupts the business of the meeting shall be brought to order and/or removed from the room if the sergeant-at-arms is so directed by the presiding officer.

Disruptive remarks from the audience, stamping of feet, clapping, whistles, yells and similar demonstrations shall not be permitted by the presiding officer who may direct the sergeant-at-arms to remove such offenders from the room.

4.4 Prosecution
Aggravated cases shall be prosecuted on appropriate complaint signed by the presiding officer.

5.0 ENFORCEMENT OF DECORUM

5.1 The Chief of Police or his designee shall be the ex-officio sergeant-at-arms of the City Council. The sergeant-at-arms shall carry out all legal and valid orders and instructions given by the presiding officer for the purpose of maintaining order and decorum in the Council Chamber. Upon instructions from the presiding officer, it shall be the duty of the sergeant-at-arms to remove any disorderly person from the Council Chambers or place the disorderly person under arrest or both.

5.2 As set forth in Government Code Section 54957.9, in the event that any meeting is willfully interrupted by a person or group of persons so as to render the orderly conduct of such meeting unfeasible or impedes the ability of the Council to hold the meeting, and order cannot be restored by the removal of individuals who are willfully interrupting the meeting, the presiding officer may order the meeting room cleared and continue in session. Only matters appearing on the agenda may be considered in such a session. Duly accredited representatives of the press or other news media, except those participating in the disturbance, shall be allowed to attend any session held pursuant to this Section. Nothing in this Section shall prohibit the City Council from establishing a procedure for readmitting an individual or individuals not responsible for willfully disturbing the orderly conduct of the meeting.

PROCLAMATION OF THE GROVER BEACH CITY COUNCIL
“NATIONAL HOSPICE AND PALLIATIVE CARE MONTH
NOVEMBER 2024”
WHEREAS, hospice and palliative care empower people facing a serious or life-limiting illness to live as fully as possible, ensuring people dignity, choice, and quality of life; WHEREAS, the hospice model involves an interdisciplinary, team-oriented approach to treatment, including expert medical care, quality symptom control, and comprehensive pain management as a foundation of care;
WHEREAS, beyond providing physical treatment, hospice attends to the patient’s emotional, spiritual and family needs, and provides family services like respite care and bereavement counseling.

WHEREAS, in an increasingly fragmented and broken health care system, hospice is one of thefew sectors that demonstrates how health care can – and should – work at its best for its patient;
WHEREAS, a growing body of peer-reviewed research indicates that timely access to hospice and palliative care can decrease hospitalizations and Emergency Room visits and increase quality of life for patients and family caregivers; WHEREAS, every year more than 1.7 million Americans living with life-limiting illness, and their families, received care from the nation’s hospice programs in communities throughout the United States;
WHEREAS, hospice and palliative care organizations are advocates and educators about advance care planning that help individuals make decisions about the care they want; and WHEREAS, Hospice of San Luis Obispo County, Central Coast Hospice, Dignity Health Hospice, and Wilshire Hospice provide hospice care and bereavement counseling respectively to individuals within the County of San Luis Obispo.

NOW, THEREFORE, BE IT RESOLVED that the Grover Beach City Council does herby officially proclaim November 2024, as” National Hospice and Palliative Care Month and encourages citizens to increase their understanding and awareness of care at the end of life and to observe this month with appropriate activities and programs.

IN WITNESS THEREOF, I have hereunto set my hand and caused the Seal of the City of Grover Beach to be affixed this 12th day of November, 2024.

Karen Bright, Mayor
Attest:

Wendi Sims, City Clerk
Agenda Item No. 1
5CITIES

HOMELESS

COALITION
www.5CHC.org
Report To City of Grover Beach
Fiscal Year 2023-2024
Agenda Item No. 2
Our Mission
The Coalition’s mission
to help those who are
homeless or facing
homelessness
incorporates three
pillars: resources,
support and hope.

Each is key to improving
the personal well-being
of our clients as well as
strengthening our
broader community.

Mission :

Vision :

HOMELESSNESS:
3 Factors That
Change Lives
When an
integrated
continuum of
services are
combined to
address these 3
factors, 5CHC
achieves better
outcomes in
changing lives.

Stable Affordable
Housing
Health Care
Income BETTER

OUTCOMES
59%
67%
Cabin & Bungalow Guests
Services and Success :

Grover Beach
Residents:
55 of 76 Participants
72 of 365 On Wait List
Graduated To
Stable Housing
Chronically
Homeless
With At Least
1 Disabling
Condition
Rapid Re-Housing & Eviction Prevention
Rapid Re-Housing : Eviction Prevention:

G.B. Households: 28
Total Spent: $113,452
Avg Per Household: $4,051
% Of Total Served: 28% G.B.

Move-In Rent & Deposit Prevent Homelessness
G.B. Households: 16
Total Spent: $54,534
Avg Per Household: $3,408
% Of Total Served: 13% G.B.

Food Clothes Water Hygiene
0 50
100
150
200
62 Outreach &
Immediate Needs
08 Outreach
19% Success Total Served
Shelter ∙ Rapid Re-Housing ∙ Reunification
City of Grover Beach:

Individuals: 43 of 424
Office Walk-in: 201
G.B. Last Permanent Residence: 42
4 Immediate Needs:

Total Assistance By Quarter
Unaccompanied
Youth
55 29
Moved Into
Housing
50 Youth Who Gained
Employment, Benefits,
or Education
Total # of Case
Managed Youth
South County
Warming
Center
New Home
1023 E. Grand
Arroyo Grande.

Across From
Mechanics Bank
Inclement Weather
Warming Center
Opens with Forecast
38°or Less or
50% Chance of Rain
Opening Notifications
Text “Add Me”
805-295-1501
Email: [email protected]
5Cities Homeless Coalition
Phone :
(805) 574-1638
100 South 4th Street
Grover Beach, CA 93433
Website :
www.5CHC.org

CITY OF GROVER BEACH
- WE THANK YOU !

RESOURCES DESCRIPTION
Balance from August 31, 2024 $ 749,109.25
Deposits 2,462,273.73
Transferred from L.A.I.F. 4,000,000.00
Voided Checks Check Number Date
76952 09/19/24 18.00
Total Resources $ 7,211,400.98

EXPENSES

DESCRIPTION PERIOD ENDING CK DATE CHECK NUMBER AMOUNT
PR 09/01/24 09/06/24 5363280-5363350 174,123.29
WR 09/05/24 76812-76859 62,197.49
WR 09/12/24 76860-76910 124,421.68
PR 09/15/24 09/20/24 5363351-5363416 167,102.37
WR 09/19/24 76911-76967 83,316.93
WR 09/20/24 5363417 53.33
WR 09/25/24 76968-77046 237,361.92
Electronic Transfers 377,947.75
Returned Checks,Chargebacks 2,030.14
Credit Card Payments Service Charge 5,797.84
Deposit Correction 137.56
Total Expenditures $ 1,234,490.30
Cash Balance as of September 30, 2024 $ 5,976,910.68
Respectfully,
Nick Szamet
Administrative Services Director

CITY OF GROVER BEACH
Treasurer's Report for November 12, 2024 City Council Meeting September 1, 2024 to September 30, 2024
Agenda Item No. 3

9/5/2024 9:57:36 AM Page 1 of 1
Refund Check Register
City of Grover Beach, CA Refund Check Detail
UBPKT00556 - Refunds 2 UBPKT00554 Disconnect
Account Name Date Check # Amount Code Receipt Amount Type 02-3300-00 Roberts, Vincent 9/5/2024 76812 51.49 51.49 Generated From Billing 02-3506-01 BEATON, JANET 9/5/2024 76813 102.52 102.52 Generated From Billing 02-3844-00 KERT, DANIEL M 9/5/2024 76814 72.05 72.05 Generated From Billing 02-4260-02 JOHN GOLONKA & SANDRA GOLONKA 9/5/2024 76815 140.44 140.44 Generated From Billing 02-4321-02 Caywood, Britaini 9/5/2024 76816 18.39 18.39 Generated From Billing 02-4534-01 KREISER, HEATHER 9/5/2024 76817 108.46 108.46 Deposit 02-4854-03 WILLKOMM, PAUL 9/5/2024 76818 107.06 107.06 Generated From Billing 02-5135-01 BELHOVSKYI, CATALINA 9/5/2024 76819 101.82 101.82 Generated From Billing 02-5253-00 COOK, NATHAN S 9/5/2024 76820 87.44 87.44 Generated From Billing Total Refunds: 9 Total Refunded Amount: 789.67
Revenue Code Summary
Revenue Code Amount
996 - UNAPPLIED CREDITS 789.67
Revenue Total: 789.67
General Ledger Distribution
Account Number Account Name Posting Amount IFT
Posting Date: 09/05/2024
Fund: 601 - Water Fund
601-000-10001-000 Claim On Cash -789.67 Yes
601-000-11110-000 Accounts Receivable Water 789.67
601 Total: 0.00
Fund: 999 - Pooled Cash
999-000-10000-000 Cash In Bank -789.67
999-000-25100-000 Due To Other Funds 789.67 Yes
999 Total: 0.00
Distribution Total: 0.00
9/5/2024 10:00:22 AM Page 1 of 1
Refund Check Register
City of Grover Beach, CA Refund Check Detail
UBPKT00557 - Refunds 1 UBPKT00554 Disconnect
Account Name Date Check # Amount Code Receipt Amount Type 01-0415-01 ORTIZ, ERNESTO 9/5/2024 76821 292.00 292.00 Generated From Billing 01-2315-01 SPERLO, JEFFREY 9/5/2024 76822 55.66 55.66 Generated From Billing Total Refunds: 2 Total Refunded Amount: 347.66
Revenue Code Summary
Revenue Code Amount
996 - UNAPPLIED CREDITS 347.66
Revenue Total: 347.66
General Ledger Distribution
Account Number Account Name Posting Amount IFT
Posting Date: 09/05/2024
Fund: 601 - Water Fund
601-000-10001-000 Claim On Cash -347.66 Yes
601-000-11110-000 Accounts Receivable Water 347.66
601 Total: 0.00
Fund: 999 - Pooled Cash
999-000-10000-000 Cash In Bank -347.66
999-000-25100-000 Due To Other Funds 347.66 Yes
999 Total: 0.00
Distribution Total: 0.00
9/5/2024 10:02:58 AM Page 1 of 1
Refund Check Register
City of Grover Beach, CA Refund Check Detail
UBPKT00566 - 8/29/24 Closed Acct Refund 02-3507-03 SS
Account Name Date Check # Amount Code Receipt Amount Type 02-3507-03 LUDWICK, SUMMER 9/5/2024 76823 109.64 109.64 Deposit Total Refunds: 1 Total Refunded Amount: 109.64
Revenue Code Summary
Revenue Code Amount
996 - UNAPPLIED CREDITS 109.64
Revenue Total: 109.64
General Ledger Distribution
Account Number Account Name Posting Amount IFT
Posting Date: 09/05/2024
Fund: 601 - Water Fund
601-000-10001-000 Claim On Cash -109.64 Yes
601-000-11110-000 Accounts Receivable Water 109.64
601 Total: 0.00
Fund: 999 - Pooled Cash
999-000-10000-000 Cash In Bank -109.64
999-000-25100-000 Due To Other Funds 109.64 Yes
999 Total: 0.00
Distribution Total: 0.00

Account Check # Type
76967 Deposit
IFT
Fund:

Fund:

Distribution Total: 0
11/5/2024 8:14:30 AM Page 1 of 1
999-000-25100-000 Due To Other Funds 105.85 Yes
999 Total: 0
601 Total: 0
999 - Pooled Cash
999-000-10000-000 Cash In Bank -105.85
601-000-10001-000 Claim On Cash -105.85 Yes
601-000-11110-000 Accounts Receivable Water 105.85
Posting Date: 09/19/2024
Account Number Account Name Posting Amount
601 - Water Fund
996 - UNAPPLIED CREDITS 105.85
Revenue Total: 105.85
General Ledger Distribution
Total Refunds: 1 Total Refunded 105.85
Revenue Code Summary
Revenue Code Amount
Amount
01-1020-04 COX, DAVID 9/19/2024 105.85 105.85
Name Date Amount Code Receipt
Refund Check Register
City of Grover Beach, CA Refund Check Detail
UBPKT00632 - Refunds 1 UBPKT00623 Adjustment Other

DESCRIPTION OF RESOURCES AMOUNT
Balance from August 31, 2024 $ 2,086,792.82
Deposit from Interest 9/30/2024 8,547.21
Total Resources $ 2,095,340.03

DESCRIPTION OF EXPENDITURES AMOUNT
Transfers for Staff Time:

Payroll Expenses 15,880.94
Transfers for Non-Construction and Other:

Accounts Payable Expenses 25,934.80
Total Expenditures $41,815.74
Cash Balance as of September 30, 2024 $ 2,053,524.29
Respectfully,
Nick Szamet
Administrative Services Director

CITY OF GROVER BEACH
2022 STREETS BOND ACCOUNT ($10,000,000)
Treasurer's Report for November 12, 2024 City Council Meeting September 1, 2024 to September 30, 2024
Agenda Item No. 4

MINUTES

CITY COUNCIL MEETING
TUESDAY, OCTOBER 15, 2024
CALL TO ORDER Mayor Bright called the meeting to order at 6:00 p.m. in the City Hall Council Chamber, 154 South Eighth Street, Grover Beach, California.

FLAG SALUTE The flag salute was led by Arianny Ascencio an 11-year-old, 6th grade student at Grover Beach Elementary School.

ROLL CALL
City Council: Council Members Daniel Rushing, Clint Weirick, Zach Zimmerman, Mayor Pro Tem Robert Robert and Mayor Karen Bright were present.

City Staff: City Manager Matt Bronson, Assistant City Manager Kristin Eriksson, City Attorney Rob Lomeli, City Clerk Wendi Sims, Police Commander Nelida Aceves, Public Works Director/City Engineer Greg Ray, Administrative Services Director Nick Szamet, and Community Development Director Megan Martin were also present.

CLOSED SESSION ANNOUNCEMENTS
None.

AGENDA REVIEW
Action: Upon unanimous consensus, the Council adopted the agenda as presented.

CEREMONIAL CALENDAR

1. Proclamation for Filipino American History Month read by Council Member Weirick and accepted by Abraham Garces.

2. Proclamation for 2024 Dating and Domestic Violence Awareness Month read by Council Member Zimmerman and accepted by Michael Boyer with Lumina.

3. Proclamation for Red Ribbon Week read by Mayor Pro Tem Robert and accepted by Commander Aceves.

4. Proclamation for National Apprenticeship Week read by Council Member Rushing and accepted by Diana Marin and Mark Simonin.

PRESENTATIONS

5. Introduction of New Employees – Kely Blackburn introduced by Assistant City Manager; Cameron Day introduced by Commander Aceves and Michael Flores introduced by Administrative Services Director Szamet.

PUBLIC COMMUNICATIONS The Mayor opened the floor to any member of the public for comment on items of interest which were within the jurisdiction of the City Council, but were not listed on the agenda.

Agenda Item No. 5
Minutes: City Council Meeting Page 2
Tuesday, October 15, 2024
• Helen Jacobson
• Nancy Allison
• Randall Myrick
• Jim Joffee
No additional public comments were received at this time and the Mayor closed the public comment portion of the meeting.

CONSENT AGENDA
Prior to consideration of the Consent Agenda, Mayor Bright opened public comment. • Leslie Marr
• Debbie Peterson
There being no additional public comments received, the Mayor closed public comment.

It was motioned by Council Member Rushing and seconded by Mayor Pro Tem Robert to approve Consent Agenda Item No.’s 6, 7, 8, and 9 as recommended. The motion carried on the following roll call vote:

AYES: Council Members – Rushing, Weirick, Zimmerman, Mayor Pro Tem Robert and Mayor Bright
NOES: Council Members – None.

ABSENT: Council Members – None.

ABSTAIN: Council Members – None.

6. Minutes of the City Council Meeting on Monday, September 23, 2024 Action: Approved the minutes as submitted.

7. Resolution to Accept the 2024 Byrne Discretionary Community Project Grant Award for Police Technology Projects
Action: Adopted Resolution No. 24-54 approving the acceptance of 2024 Byrne Discretionary Community Project Grant funds provided by the U.S. Government in the amount of $543,000 for FY 2024-25; and authorize the Chief of Police to execute a contract with the Unites States Department of Justice to accept the funds.

Resolution No. 24-54: A Resolution of the City Council of the City of Grover Beach, California, Approving the Acceptance of $543,000 in Byrne Discretionary Community Project Grant Award Funds for Police Technology Projects and Authorizing the Execution of a Grant Agreement with U.S. Department of Justice

8. Approve Contract with HDL, Inc. for Cannabis Auditing Services Action: Approved an agreement with HDL, Inc. for cannabis auditing services for a term of three years with two, one-year extensions and authorize the City Manager to execute the agreement on behalf of the City.

Minutes: City Council Meeting Page 3
Tuesday, October 15, 2024

9. Revision of Resolution for 2024 California Department of Housing and Community Development Block Grant Application
Action: Adopted a revised Resolution No. 24-55 to comply with the updated requirements from the Department of Housing and Community Development (HCD) for the 2024 Community Development Block Grant (CDBG) application, authorizing staff to prepare and submit an application for a CDBG for Phase 3 of the Ramona Garden Park Rehabilitation Project, Microenterprise Assistance Program, and Non-Congregate Shelter Navigation Center Program.

Resolution No. 24-55: A Resolution Approving an Application for Funding and the Execution of a Grant Agreement and any Amendments thereto from the 2024 Funding Year of the State CDBG Program.

PUBLIC HEARING
None.

REGULAR BUSINESS:

10. Economic Development Update
Mayor Bright read the title to the foregoing item and deferred to staff for a report.

Community Development Director Martin presented a Powerpoint presentation discussing the Economic Development Update.

Mayor Bright invited public comment on this matter.
• Debbie Peterson
• Pamela Storton
No additional comments were received at this time and the Mayor closed public comment.

Action: Council received the update on key economic development initiatives and activities.

11. Citizens Initiative to Require the Office of City Clerk to be an Elected Position Mayor Bright read the title to the foregoing item and deferred to staff for a report.

City Attorney Lomeli discussed the citizen initiative to require the office of City Clerk to be an elected position.

Mayor Bright invited public comment on this matter.
• Leslie Marr
• Steve Lieberman
• Debra Guerra
Minutes: City Council Meeting Page 4
Tuesday, October 15, 2024
No additional public comments were received at this time and the Mayor closed public comment.

It was motioned by Council Member Rushing and seconded by Council Member Weirick to adopt Resolution No. 24-56 calling an election to submit the initiative measure to the voters at the next municipal election on November 3, 2026 and direct the City Attorney to prepare an impartial analysis of the initiative. The motion carried on the following roll call vote:

AYES: Council Members – Rushing, Weirick, Zimmerman, Mayor Pro Tem Robert and Mayor Bright
NOES: Council Members – None.

ABSENT: Council Members – None.

ABSTAIN: Council Members – None.

Resolution No. 24-56: A Resolution of the City Council of the City of Grover Beach, California, Submitting to the Voters at the General Municipal Election on November 3, 2023, an Initiative Measure Requiring that the Office of City Clerk be an Elected Position.

PUBLIC COMMUNICATIONS The Mayor opened the floor to any member of the public for comment on items of interest which were within the jurisdiction of the City Council but were not listed on the agenda.
• Pamela Storton
No additional comments were received and the Mayor closed public comment.

COUNCIL COMMITTEE REPORTS
Council Member Weirick reported he attended the San Luis Obispo County Flood Control and Water Conservation Districts Water Resources Advisory Committee Meeting. (WRAC) Council Member Zimmerman mentioned the upcoming South County Chamber of Commerce Mixer on Wednesday, October 23rd at Epic Entertainment.

COUNCIL COMMUNICATIONS
A. Council Member Zimmerman mentioned the upcoming Jazz Jubilee Central Coast which will be held on October 21st through November 4th.

B. Council Member Rushing noted he was able to participate in the Walk to School Day at Grover Heights Elementary School and thanked SLOCOG for helping put this event on this year.

C. Mayor Pro Tem Robert mentioned that there is Karaoke - Line Dancing every Tuesday night from 6:00 pm – 8:00 pm at the Grover City Grange.

D. Council Member Weirick formally requested to add a National Mentorship Month proclamation in January 2025 for Big Brothers Big Sisters of San Luis Obispo County. He also mentioned Minutes: City Council Meeting Page 5
Tuesday, October 15, 2024
a few events he attended throughout the County; Coffee with a Cop, Fire Prevention Week at Station One in Arroyo Grande, The Narvacan Association of the Central Coast Annual Dinner, Lumina Alliance Ribbon Cutting for Expansion of the Transitional Housing, Grover Beach Community Library Final Book Sale of the Year, Grover Grange’s Pancake Breakfast and the San Luis Obispo Chapter of NAMI – Beautiful Minds Walk.

E. Mayor Bright discussed events she attended; Coffee Talk, Grover Beach Library Book Sale and she met with a new non-profit, Coastal Housing Resources.

F. All Council Members agreed to add a Proclamation in January for Big Brothers and Big Sisters. And Mayor Bright requested that staff look into the issue regarding Hero Park.

CITY MANAGER'S REPORTS AND COMMENTS
City Manager Bronson reported that Apogee Brewing Company won 3 medals at the Nationwide Great American Brewing Festival in Denver Colorado and discussed the upcoming event, the Annual Trunk or Treat on Friday, October 25th at Ramona Garden at 5:00 pm.

CITY ATTORNEY’S REPORTS AND COMMENTS
None.

CLOSED SESSION
At 7:55 p.m., the Council met in Closed Session regarding the following item.

A. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) or (3) of subdivision (d) of Government Code section 54956.9

One (1) Case.

Closed Session Announcements: At 8:15 p.m., Mayor Bright reconvened the meeting in open session with all Council Members present and announced the no reportable action taken during Closed Session.

There being no further business to come before the City Council, Mayor Bright adjourned the meeting at 8:15 p.m.
_____________________________

KAREN BRIGHT, MAYOR
Attest:
______________________________

WENDI SIMS, CITY CLERK
(Approved at CC Mtg ______)
Agenda Item No. 6

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: November 12, 2024 FROM: Matthew Bronson, City Manager
PREPARED BY: Megan Martin, Community Development Director SUBJECT: Underwriting Services for the 2024 Community Development Block Grant (CDBG) Economic Development Microenterprise Business Assistance Program

RECOMMENDATION
Approve an agreement with Angel H. Johnstone in the amount of $151,360 for Underwriting Services to support the 2024 Community Development Block Grant (CDBG) Economic Development Microenterprise Business Assistance Program and authorize the Mayor to execute the agreement on behalf of the City.

BACKGROUND
Local governments, either directly or through State governments, are eligible to receive Community Development Block Grant (CDBG) funds on an annual basis from the U.S.

Department of Housing and Urban Development (HUD). These funds can be used for a variety of purposes including infrastructure needs, low-moderate income housing needs, and other eligible activities. The category of “other eligible activities” includes providing capital to businesses through grants or loans. The State Department of Housing and Community Development (HCD) administers the CDBG programs and publishes a Notice of Funding Availability (NOFA) for each program for eligible activities.

One allowable use of CDBG funds is to provide capital to small businesses through the establishment of loan and grant fund programs. The CDBG program provides flexibility to its recipients within the three national objectives to:

1. Principally benefit low to moderate income (LMI) persons or businesses;

2. Aid in the prevention of slums or blight; and

3. Meet an urgent community need.

The City has seen an increased interest from new businesses desiring to locate within Grover Beach, especially along West Grand Avenue. This highlights the area’s potential for economic development, however, many buildings and commercial spaces owned by private property owners within the city were constructed decades ago and do not meet modern building and construction standards, including for energy efficiency, accessibility, plumbing, and fire suppression. Bringing these properties within compliance can be cost prohibitive, and several businesses have been unable to occupy desired spaces because landlords and property owners are not able to afford these costly upgrades. This appears to be hindering economic growth in these developed commercial areas.

Staff Report: CDBG Economic Development Microenterprise Assistance Agreement Page 2 November 12, 2024
Economic Development is one of the CDBG program’s eligible activities. One of the qualifying categories under this activity is Microenterprise Assistance which provides funds for loans to LMI business owners for businesses with five or fewer workers (owner/operator and employees).

Examples include business training, financing of working capital, furniture, equipment, and property repairs/improvements.

On June 24, 2024, the Council received a presentation and public comment related to potential programs and projects for inclusion in a 2024 CDBG application and directed staff to pursue applications for three qualifying activities:
• Over-the-Counter (OTC) Program: Microenterprise Business Assistance Program, City of Grover Beach ($946,000)
• OTC Project: Ramona Garden Park Improvements, City of Grover Beach ($2.35 million) • Competitive Program: Non-Congregate Shelter Navigation Center Program, 5Cities Homeless Coalition ($300,000)
On July 22, 2024, Council further directed staff to pursue the OTC Program under specific program guidelines including but not limited to eligibility criteria and eligible activities as shown below:

Loan Details
(1) Up to $50,000 per eligible and qualifying business
(2) Low interest loans; rates scheduled at 1% - 3%
(3) Repayment period of 3 to 10 years, dependent upon the amount of the loan (4) Qualifying applications reviewed by consultant and loan committee Eligibility Criteria:
(1) LMI Business Owner
(2) Microenterprise Business (five or fewer workers; includes owner/operator) within the city
(3) Non-profit organizations are not eligible for this program (4) The business must not require a Use Permit to operate (5) Businesses in the cannabis industry, adult entertainment, or other restricted industries are not eligible
(6) Preference is given to businesses that best align with City’s economic development goals including public-serving businesses (e.g. retail or services) and manufacturing businesses
Eligible Activities:
(1) Energy Efficiency Upgrades: Improvements related to energy efficiency, such as insulation, HVAC systems, energy-efficient lighting, and windows (2) Plumbing Enhancements: Repairs or upgrades to plumbing systems, including pipes, fixtures, and water heaters; may also include enlargement or addition of restrooms to meet occupancy and accessibility requirements.
(3) Accessibility Improvements: Modifications to enhance accessibility, such as installing ramps, accessible restrooms, and other American Disability Act (ADA) compliant features.
(4) Fire Suppression and Safety Systems: Installation or upgrades of fire suppression systems, such as sprinklers, alarms, and emergency exits. (5) Signage (including permit costs), or minor cosmetic renovations. (6) Beautification or finishing projects, such as painting, and decorative elements, are not eligible.

Staff Report: CDBG Economic Development Microenterprise Assistance Agreement Page 3 November 12, 2024

Staff subsequently completed the requirements of the program to be competitive for the upcoming 2024 CDBG NOFA which was released by HCD on August 30, 2024 for approximately $30 million.

On October 29, 2024, City staff successfully submitted an OTC application for the Councildirected CDBG Microenterprise Business Assistance Program. OTC applications are considered for award on a first-come, first-served basis; timing of the submittal is critical.

Following Council direction, City staff issued a request for proposals for underwriting services to support the City’s implementation and administration of low-interest loans to qualifying businesses.

The role of the underwriter includes:
• Coordination with businesses to prepare loan applications • Facilitation of loan committee meetings
• Administration and management of grant reports pursuant to the 2024 CDBG grant contract
• Implementation of loans through the grant program
The City received one proposal from Ms. Angel H. Johnstone. This proposal was reviewed by staff from the Administrative Services and Community Development departments. The team interviewed Ms. Johnstone and found her background and experience pertaining to CDBG economic development programs (specifically business assistance and microenterprise) to be highly relevant and comprehensive. Ms. Johnstone demonstrated a strong understanding of CDBG requirements and effectively communicated strategies for managing compliance, reporting, and program delivery. Her proposal outlined clear objectives and actionable steps to support local businesses, aligning well with the City’s goals for economic growth and community support. Ms.

Johnstone’s proposal is included with the contract agreement in Attachment 1.

Staff anticipates 2024 CDBG award announcements will occur in spring 2025. Should the City receive the grant award, staff will coordinate with Ms. Johnstone to begin outreach to administer the grants to qualifying businesses. If the City does not receive the award, the contract between Ms. Johnstone and the City will become null and void. Ms. Johnstone understands and agrees to these terms.

FISCAL IMPACT
The cost of the agreement is $151,360 over the specified loan term (typically 36 months following CDBG contract award). All City costs including any staff administrative time will be reimbursed through the HCD CDBG grant to support the administration of the City’s low-interest loan program to qualifying businesses.

ALTERNATIVES
The Council has the following alternatives to consider:

1. Approve an agreement with Angel H. Johnstone in the amount of $151,360 for underwriting services to support the 2024 CDBG Economic Development Microenterprise Business Assistance Program; and authorize the Mayor to execute the agreement on behalf of the City; or

2. Do not approve the agreement; or

3. Provide alternative direction to staff.

Staff Report: CDBG Economic Development Microenterprise Assistance Agreement Page 4 November 12, 2024

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

Attachments

1. Agreement

AGREEMENT

CITY OF GROVER BEACH, CALIFORNIA

PROFESSIONAL SERVICES
UNDERWRITING SERVICES FOR THE 2024 COMMUNITY DEVELOPMENT BLOCK GRANT

MICROENTERPRISE BUSINESS ASSISTANCE PROGRAM
THIS AGREEMENT is made and entered into effective the 12th day of November, 2024, by and between the CITY OF GROVER BEACH, a California municipal corporation (hereinafter referred to as "CITY"), and Angel H. Johnstone (hereinafter referred to as "CONSULTANT").

RECITALS
WHEREAS, CITY desires to obtain professional services for underwriting services that will support the 2024 Community Development Block Grant (CDBG) Microenterprise Assistance Program, more specifically identified in the Proposal, Scope of Work and Fee Schedule, jointly attached as “Exhibit A” to this Agreement, herein referred to as the PROJECT; and
WHEREAS, CONSULTANT is engaged in the business of Economic Development Consultant and hereby represents that it desires to and is professionally and legally capable of performing the services called for by this Agreement; and
WHEREAS, this Agreement sets forth the terms and conditions under which CONSULTANT shall provide professional services, to be paid by the City of Grover Beach; and WHEREAS, this Agreement will be administered for CITY by the Director of Community Development, hereinafter referred to as DIRECTOR or his/her designee.

AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the covenants, conditions, and promises hereinafter contained to be kept and performed by the respective parties, it is mutually agreed as follows:

ARTICLE I. SCOPE OF SERVICES
CONSULTANT shall complete said PROJECT described herein and more fully described in Exhibit A, and in accordance with local, State and Federal laws. This shall include all work incidental to, or necessary to perform, such services even though not specifically described in Exhibit A.

ARTICLE II. COMPENSATION AND PAYMENT
A. CONSULTANT’S sole compensation for satisfactory performance of all services required or rendered pursuant to this Agreement shall be performed on a not to exceed basis of $151,360.

B. CONSULTANT shall invoice CITY on a monthly basis, via detailed statement, which will be processed and payable in the normal course of CITY business, typically within 30 days of receipt of an invoice unless otherwise identified in this Agreement.

C. The parties may modify this Agreement to increase or decrease the scope of services or provide for the rendition of services not required by this Agreement, which modification shall include an adjustment to CONSULTANT’S compensation. Any change in the scope of services must be made by written Contract Amendment to the Agreement signed by an authorized representative for each Attachment 1

party. CONSULTANT shall not be entitled to any additional compensation if services are performed prior to a signed written Contract Amendment.

D. At any time prior to issuance of final payment, the CITY may conduct a cost audit of CONSULTANT’S invoices/statements. Any payment may be reduced by amounts found by CITY not to constitute allowable costs and/or adjusted for prior overpayments or underpayments. Upon CONSULTANT’S compliance with all terms of this Agreement, City shall promptly pay any balance of allowable costs.

ARTICLE III. TERMINATION, REMEDIES, FORCE MAJEURE AND CONSOLIDATION OF DISPUTES A. This Agreement shall terminate without any liability of CITY to CONSULTANT upon the earlier of:
(i) CONSULTANT’S filing for protection under the federal bankruptcy laws, or any bankruptcy petition or petition for receiver commenced by a third party against CONSULTANT; (ii) Seven (7) calendar days written notice, with or without cause, by either the CITY or CONSULTANT;
(iii) Expiration of this Agreement.

B. Upon any termination or expiration of this Agreement, CONSULTANT shall (i) Immediately stop all work hereunder;
(ii) Immediately cause any and all of its subcontractors to cease work; and (iii) Return to CITY any and all unearned payments and all properties and materials in the possession of CONSULTANT that are owned by CITY. Subject to the terms of this Agreement, CONSULTANT shall be paid compensation for services satisfactorily performed prior to the effective date of termination. CONSULTANT shall not be paid for any work or services performed or costs incurred which reasonably could have been avoided.

C. In the event of termination due to failure of CONSULTANT to satisfactorily perform in accordance with the terms of this Agreement, CITY may withhold an amount that would otherwise be payable as an offset to, but not in excess of, CITY’S damages caused by such failure. In no event shall any payment by CITY pursuant to this Agreement constitute a waiver by CITY of any breach of this Agreement which may then exist on the part of CONSULTANT, nor shall such payment impair or prejudice any remedy available to CITY with respect to the breach.

D. Upon any breach of this Agreement by CONSULTANT, CITY may:
(i) Exercise any right, remedy (in contract, law or equity), or privilege which may be available to it under applicable laws of the State of California or any other applicable law; (ii) Proceed by appropriate court action to enforce the terms of the Agreement; and/or (iii) Recover all direct, indirect, consequential, economic and incidental damages for the breach of the Agreement. If it is determined that CITY improperly terminated this Agreement for default, such termination shall be deemed a termination for convenience.

E. CONSULTANT shall provide CITY with adequate written assurances of future performance, upon the request of the Director or his/her designee, in the event CONSULTANT fails to comply with any terms or conditions of this Agreement.

F. CONSULTANT shall be liable for default unless nonperformance is caused by an occurrence beyond the reasonable control of CONSULTANT and without its fault or negligence such as, acts of God or the public enemy, acts of CITY in its contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, unusually severe weather, and delays of common carriers. CONSULTANT shall notify the

Director or his/her designee in writing as soon as it is reasonably possible after the commencement of any excusable delay, setting forth the full particulars in connection therewith, and shall remedy such occurrence with all reasonable dispatch, and shall promptly give written notice to the Director or his/her designee of the cessation of such occurrence.

G. CONSULTANT agrees that, notwithstanding any contrary provision in this Agreement, any dispute arising from or relating to this Agreement (including, without limitation, disputes based on contract, tort, equity or statute) may, at CITY’S option, be joined and consolidated with any other dispute or disputes arising from or relating to the PROJECT so that all disputes arising from or relating to the PROJECT may be resolved in a single proceeding. CONSULTANT hereby specifically waives any objection it may otherwise have to such joinder and consolidation and specifically consents to mediation, arbitration or any other dispute resolution mechanism, forum or proceeding necessary to effectuate the joinder and consolidation contemplated by this provision.

ARTICLE IV. CONFIDENTIAL INFORMATION, OWNERSHIP OF DOCUMENTS AND COPYRIGHT LICENSE A. Any reports, information, or other data prepared or assembled by CONSULTANT pursuant to this Agreement shall not be made available to any individual or organization by CONSULTANT without the prior written approval of CITY. During the term of this Agreement, and thereafter, CONSULTANT shall not, without the prior written consent of CITY, disclose to anyone any Confidential Information. The term Confidential Information for the purposes of this Agreement shall include all proprietary and confidential information of CITY, including but not limited to business plans, marketing plans, financial information, designs, drawings, specifications, materials, compilations, documents, instruments, models, source or object codes and other information developed pursuant to this Agreement, disclosed or submitted, orally, in writing, or by any other medium or media. Confidential information shall also include any business loan applicant’s business or personal confidential information. All personal and business confidential information of loan applicants shall be kept in a locked storage facility and shall not be available to persons other than CONSULTANT or CITY. All Confidential Information shall be and remain confidential and proprietary in CITY.

B. CONSULTANT shall not reproduce (such as photographs and prints), duplicate, distribute reproductions, or incorporate into any trademark or service mark, the Confidential Information without the prior written consent of CITY. Any rights of the CONSULTANT in the Confidential Information terminate upon the death of such CONSULTANT and do not extend to such CONSULTANT’S heirs, successors or assigns.

C. Title to the Confidential Information shall pass to CITY upon final acceptance by CITY. CITY reserves the right to donate, transfer or sell the Confidential Information or any portion thereof. CITY shall have the exclusive right to publicly display the Confidential Information and shall have a license to reproduce (such as photographs and prints) or create three-dimensional reproductions of the Confidential Information for any noncommercial purpose (including, but not limited to, books, slides, postcards, film, Internet sites, reproductions for advertising, and other media). Prior to public display, the CITY shall consider the sensitive nature and potential security risk of releasing the information to the general public. Such reproductions shall contain if legally necessary a copyright notice. Reproductions for commercial purposes are only to be made with the mutual written consent of CONSULTANT and CITY. All references and reproductions or adaptations of the Confidential Information will credit the Confidential Information to the CONSULTANT unless CONSULTANT requests to the contrary. CITY reserves the right to modify, remove and/or relocate the Confidential Information at any time, and after consultation with CONSULTANT, shall have the right to determine when and if modifications, repairs and/or restorations are needed. If City makes modifications, repairs or restoration not approved by the CONSULTANT, the

CONSULTANT shall have the right to sever its association with the Confidential Information.

CONSULTANT agrees to give CITY written notice prior to asserting any claim pertaining to the Confidential Information, and CITY shall have not less than 90 days from the date of receipt of claim to cure any such claim. CITY may incorporate the Confidential Information into any trademark or service mark to be utilized by City to register the same in accordance with Federal, state or local law.

D. If CONSULTANT should subcontract all or any portion of the services to be performed under this Agreement, CONSULTANT shall cause each subcontractor to also comply with the requirements of this Article (IV).

This Article (IV) shall survive expiration or termination of this Agreement.

ARTICLE V. PROFESSIONAL SKILL
It is further mutually understood and agreed by and between the parties hereto that inasmuch as CONSULTANT represents to CITY that CONSULTANT and its subcontractors, if any, are skilled in the profession and shall perform in accordance with the standards of said profession necessary to perform the services agreed to be done by it under this Agreement, CITY relies upon the skill of CONSULTANT and any subcontractors to do and perform such services in a skillful manner and CONSULTANT agrees to thus perform the services and require the same of any subcontractors. Therefore, any acceptance of such services by CITY shall not operate as a release of CONSULTANT or any subcontractors from said professional standards.

ARTICLE VI. INDEMNIFICATION AND DEFENSE
A. Indemnification and Defense for Professional Services: To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY and any and all of its officers, officials, employees, agents and volunteers (“Indemnified Parties”) from and against any and all claims, losses, liabilities, damages, costs and expenses, including legal counsel’s fees and costs, to the extent they arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT. CONSULTANT’S duty to defend shall consist of reimbursement of defense costs incurred by CITY in direct proportion to the CONSULTANT’S proportionate percentage of fault.

CONSULTANT’S percentage of fault shall be determined, as applicable, by a court of law, jury or arbitrator. In the event any loss, liability or damage is incurred by way of settlement or resolution without a court, jury or arbitrator having made a determination of the CONSULTANT’S percentage of fault, the parties agree to mediation with a third party neutral to determine the CONSULTANT’S proportionate percentage of fault for purposes of determining the amount of indemnity and defense cost reimbursement owed to the CITY.

B. For All Other Liabilities: Notwithstanding the foregoing and without diminishing any rights of CITY under this Article (V), for any liability, claim, demand, allegation against CITY arising out of, related to, or pertaining to any act or omission of CONSULTANT, but which is not a design professional service, CONSULTANT shall defend, indemnify, and hold harmless CITY, its officials, employees, and agents (“Indemnified Parties”) from and against any and all damages, costs, expenses (including reasonable attorney fees and expert witness fees), judgments, settlements, and/or arbitration awards, whether for personal or bodily injury, property damage, or economic injury, and arising out of, related to, any concurrent or contributory negligence on the part of the CITY, except for the sole or active negligence of, or willful misconduct of the CITY.

C. If CONSULTANT should subcontract all or any portion of the services to be performed under this Agreement, CONSULTANT shall require each subcontractor to indemnify, hold harmless and defend

CITY and each of its officers, officials, employees, agents and volunteers in accordance with the terms of the preceding paragraph.

This Article (VI) shall survive termination or expiration of this Agreement.

ARTICLE VII. INSURANCE
A. Throughout the life of this Agreement, CONSULTANT shall pay for and maintain in full force and effect all insurance as required in Exhibit B, which is incorporated into and part of this Agreement, with an insurance company(ies) either:
(i) Admitted by the California Insurance Commissioner to do business in the State of California and rated no less than “A-VII” in the Best’s Insurance Rating Guide; or (ii) As may be authorized in writing by CITY'S Administrative Services Director, or his/her successor, or his/her designee at any time and in his/her sole discretion. The required policies of insurance as stated in Exhibit B shall maintain limits of liability of not less than those amounts stated therein.

B. If at any time during the life of the Agreement or any extension, CONSULTANT or any of its subcontractors/sub-consultants fail to maintain any required insurance in full force and effect, all services and work under this Agreement shall be discontinued immediately, and all payments due or that become due to CONSULTANT shall be withheld until notice is received by CITY that the required insurance has been restored to full force and effect and that the premiums therefore have been paid for a period satisfactory to CITY. Any failure to maintain the required insurance shall be sufficient cause for CITY to terminate this Agreement. No action taken by CITY pursuant to this Article (VII) shall in any way relieve CONSULTANT of its responsibilities under this Agreement. The phrase “fail to maintain any required insurance” shall include, without limitation, notification received by CITY that an insurer has commenced proceedings, or has had proceedings commenced against it, indicating that the insurer is insolvent.

C. The fact that insurance is obtained by CONSULTANT shall not be deemed to release or diminish the liability of CONSULTANT, including, without limitation, liability under the indemnity provisions of this Agreement. The duty to indemnify CITY shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by CONSULTANT. Approval or purchase of any insurance contracts or policies shall in no way relieve from liability nor limit the liability of CONSULTANT, its principals, officers, agents, employees, persons under the supervision of CONSULTANT, vendors, suppliers, invitees, consultants, sub-consultants, subcontractors, or anyone employed directly or indirectly by any of them.

D. If CONSULTANT should subcontract all or any portion of the services to be performed under this Agreement, CONSULTANT shall require each subcontractor/sub-consultant to provide insurance protection, as an additional insured, to the CITY and each of its officers, officials, employees, agents and volunteers in accordance with the terms of this section, except that any required certificates and applicable endorsements shall be on file with CONSULTANT and CITY prior to the commencement of any services by the subcontractor. CONSULTANT and any subcontractor/sub-consultant shall establish additional insured status for CITY, its officers, officials, employees, agents and volunteers.

ARTICLE VIII. CONFLICT OF INTEREST AND NON-SOLICITATION A. Prior to CITY’S execution of this Agreement, CONSULTANT shall complete a City of Grover Beach Conflict of Interest Disclosure Statement in the form as set forth in Exhibit C. During the term of this Agreement, CONSULTANT shall have the obligation and duty to immediately notify CITY in writing of any change to the information provided by CONSULTANT in such statement.

B. CONSULTANT shall comply, and require its subcontractors to comply, with all applicable (i) Professional canons and requirements governing avoidance of impermissible client conflicts; and
(ii) Federal, state and local conflict of interest laws and regulations including, without limitation, California Government Code Section 1090 et. seq., the California Political Reform Act (California Government Code Section 87100 et. seq.), and the regulations of the Fair Political Practices Commission concerning disclosure and disqualification (2 California Code of Regulations Section 18700 et. seq.).

At any time, upon written request of CITY, CONSULTANT shall provide a written opinion of its legal counsel and that of any subcontractor that, after a due diligent inquiry, CONSULTANT and the respective subcontractor(s) are in full compliance with all laws and regulations. CONSULTANT shall take, and require its subcontractors to take, reasonable steps to avoid any appearance of a conflict of interest. Upon discovery of any facts giving rise to the appearance of a conflict of interest, CONSULTANT shall immediately notify CITY of these facts in writing.

C. In performing the work or services to be provided hereunder, CONSULTANT shall not employ or retain the services of any person while such person either is employed by CITY or is a member of any CITY council, commission, board, committee, or similar CITY body. This requirement may be waived in writing by the City Manager, if no actual or potential conflict is involved.

D. CONSULTANT represents and warrants that it has not paid or agreed to pay any compensation, contingent or otherwise, direct or indirect, to solicit or procure this Agreement or any rights/benefits hereunder.

E. Neither CONSULTANT, nor any of CONSULTANT’S subcontractors performing any services on this Project, shall bid for, assist anyone in the preparation of a bid for, or perform any services pursuant to, any other contract in connection with this Project. CONSULTANT and any of its subcontractors shall have no interest, direct or indirect, in any other contract with a third party in connection with this Project unless such interest is in accordance with all applicable law and fully disclosed to and approved by the City Manager, in advance and in writing.

F. If CONSULTANT should subcontract all or any portion of the work to be performed or services to be provided under this Agreement, CONSULTANT shall include the provisions of this Article in each subcontract and require its subcontractors to comply therewith.

This Article (VIII) shall survive termination or expiration of this Agreement.

ARTICLE IX. GENERAL TERMS
A. Except as otherwise provided by law, all notices expressly required of CITY within the body of this Agreement, and not otherwise specifically provided for, shall be effective only if signed by the Director or his/her designee.

B. Records of CONSULTANT’S expenses pertaining to the Project shall be kept on a generally recognized accounting basis and shall be available to CITY or its authorized representatives upon request during regular business hours throughout the life of this Agreement and for a period of three years after final payment or, if longer, for any period required by law. In addition, all books, documents, papers, and records of CONSULTANT pertaining to the PROJECT shall be available for the purpose of making audits, examinations, excerpts, and transcriptions for the same period of time. If any litigation, claim, negotiations, audit or other action is commenced before the expiration of said time period, all records shall be retained and made available to CITY until such action is resolved, or until the end of said time period whichever shall later occur. If CONSULTANT should subcontract all or any portion of the services to be performed under this Agreement, CONSULTANT shall cause each subcontractor to also comply with the requirements of this paragraph. This Article IX(B) shall survive expiration or termination of this Agreement.

C. Prior to execution of this Agreement by CITY, CONSULTANT shall have provided evidence to CITY that CONSULTANT is licensed to perform the services called for by this Agreement (or that no license is required). CONSULTANT and any subcontractors shall agree to obtain any local licensing or certifications necessary to perform services within the City, including but not limited to City Business Tax Certificates. If CONSULTANT should subcontract all or any portion of the work or services to be performed under this Agreement, CONSULTANT shall require each subcontractor to provide evidence to CITY that subcontractor is licensed to perform the services called for by this Agreement (or that no license is required) before beginning work.

ARTICLE X. NONDISCRIMINATION
To the extent required by controlling federal, state and local law, CONSULTANT shall not employ discriminatory practices in the provision of services, employment of personnel, or in any other respect on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, ethnicity, status as a disabled veteran or veteran of the Vietnam era. Subject to the foregoing and during the performance of this Agreement, CONSULTANT agrees as follows:

A. CONSULTANT will comply with all applicable laws and regulations providing that no person shall, on the grounds of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, sexual orientation, ethnicity, status as a disabled veteran or veteran of the Vietnam era be excluded from participation in, be denied the benefits of, or be subject to discrimination under any program or activity made possible by or resulting from this Agreement.

B. CONSULTANT will not discriminate against any employee, applicant for employment, or business loan applicant because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, sexual orientation, ethnicity, gender identification, status as a disabled veteran or veteran of the Vietnam era. CONSULTANT shall ensure that applicants are treated, without regard to their race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, sexual orientation, ethnicity, gender identification, status as a disabled veteran or veteran of the Vietnam era. Such requirement shall apply to CONSULTANT’S employment practices including, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. CONSULTANT agrees to post in conspicuous places, available to

employees and applicants for employment, notices setting forth the provision of this nondiscrimination clause.

C. CONSULTANT will, in all solicitations or advertisements for employees placed by or on behalf of CONSULTANT in pursuit hereof, state that all qualified applicants will receive consideration for employment without regard to race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, sexual orientation, ethnicity, status as a disabled veteran or veteran of the Vietnam era.

D. CONSULTANT will send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, a notice advising such labor union or workers' representatives of CONSULTANT’S commitment under this section and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

E. If CONSULTANT should subcontract all or any portion of the services to be performed under this Agreement, CONSULTANT shall cause each subcontractor to also comply with the requirements of this Article (X).

ARTICLE XI. INDEPENDENT CONTRACTOR
A. In the furnishing of the services provided for herein, CONSULTANT is acting solely as an independent contractor. Neither CONSULTANT, nor any of its officers, agents or employees shall be deemed an officer, agent, employee, joint venture, partner or associate of CITY for any purpose. CITY shall have no right to control or supervise or direct the manner or method by which CONSULTANT shall perform its work and functions. However, CITY shall retain the right to administer this Agreement so as to verify that CONSULTANT is performing its obligations in accordance with the terms and conditions thereof.

B. This Agreement is not evidence of a partnership or joint venture between CONSULTANT and CITY.

CONSULTANT shall have no authority to bind CITY absent CITY’S express written consent. Except to the extent otherwise provided in this Agreement, CONSULTANT shall bear its own costs and expenses in pursuit thereof.

C. Because of its status as an independent contractor, CONSULTANT and its officers, agents and employees shall have absolutely no right to employment rights and benefits available to CITY employees. CONSULTANT shall be solely liable and responsible for all payroll and tax withholding and for providing to, or on behalf of, its employees all employee benefits including, without limitation, health, welfare and retirement benefits. In addition, together with its other obligations under this Agreement, CONSULTANT shall be solely responsible, indemnify, defend and save CITY harmless from all matters relating to employment and tax withholding for and payment of CONSULTANT'S employees, including, without limitation:
(i) Compliance with Social Security and unemployment insurance withholding, payment of workers’ compensation benefits, and all other laws and regulations governing matters of employee withholding, taxes and payment; and
(ii) Any claim of right or interest in CITY employment benefits, entitlements, programs and/or funds offered employees of CITY whether arising by reason of any common law, de facto, leased, or co-employee rights or other theory. It is acknowledged that during the term of this Agreement, CONSULTANT may be providing services to others unrelated to CITY or to this Agreement.

ARTICLE XII. NOTICES
All notices, including notices of address changes, required to be sent hereunder shall be in writing and shall be deemed to have been given when mailed to the addresses listed below:

A. CITY: City of Grover Beach, Megan Martin, Community Development Director], 154 South Eighth Street, Grover Beach, CA 93433
B. CONSULTANT: Angel H. Johnstone, Economic Development Consultant, 3541 Bloomfield Lane, Clovis, CA 93619
ARTICLE XIII. BINDING
Subject to Article XII, below, once this Agreement is signed by all parties, it shall be binding upon, and shall inure to the benefit of, all parties, and each parties' respective heirs, successors, assigns, transferees, agents, servants, employees and representatives.

ARTICLE XIV. ASSIGNMENT
A. This Agreement is personal to CONSULTANT and there shall be no assignment by CONSULTANT of its rights or obligations under this Agreement without the prior written approval of the Grover Beach City Council. Any attempted assignment by CONSULTANT, its successors or assigns, shall be null and void unless approved by the Grover Beach City Council.

B. CONSULTANT hereby agrees not to assign the payment of any monies due CONSULTANT from CITY under the terms of this Agreement to any other individual(s), corporation(s) or entity(ies). CITY retains the right to pay any and all monies due CONSULTANT directly to CONSULTANT.

ARTICLE XV. COMPLIANCE THE LAW
In providing the services required under this Agreement, CONSULTANT shall at all times comply with all applicable laws of the United States, the State of California and CITY, and with all applicable regulations promulgated by federal, state, regional, or local administrative and regulatory agencies, now in force and as they may be enacted, issued, or amended during the term of this Agreement.

ARTICLE XVI. COMPLIANCE WITH COMMUNITY DEVELOPMENT BLOCK GRANT REGULATIONS In providing the services required under this Agreement, CONSULTANT shall ensure that all services comply with all applicable Community Development Block Grant (“CDBG”) regulations including, but not limited to, the Economic Development Grant/Loan Program requirements included in this Agreement as Exhibit D.

ARTICLE XV. WAIVER
The waiver by either party of a breach by the other of any provision of this Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of either the same or a different provision of this Agreement. No provisions of this Agreement may be waived unless in writing and signed by all parties to this Agreement. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein.

ARTICLE XVI. GOVERNING LAW AND VENUE
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, excluding, however, any conflict of laws rule which would apply the law of another

jurisdiction. Venue for purposes of the filing of any action regarding the enforcement or interpretation of this Agreement and any rights and duties hereunder shall be San Luis Obispo County, California.

ARTICLE XVII. HEADINGS
The section headings in this Agreement are for convenience and reference only and shall not be construed or held in any way to explain, modify or add to the interpretation or meaning of the provisions of this Agreement.

ARTICLE XVIII. SEVERABILITY
The provisions of this Agreement are severable. The invalidity, or unenforceability of any one provision in this Agreement shall not affect the other provisions.

ARTICLE XIX. INTERPRETATION
The parties acknowledge that this Agreement in its final form is the result of the combined efforts of the parties and that, should any provision of this Agreement be found to be ambiguous in any way, such ambiguity shall not be resolved by construing this Agreement in favor of or against either party, but rather by construing the terms in accordance with their generally accepted meaning.

ARTICLE XX. ATTORNEY’S FEES
If either party is required to commence any proceeding or legal action to enforce or interpret any term, covenant or condition of this Agreement, the prevailing party in such proceeding or action shall be entitled to recover from the other party its reasonable attorney's fees and legal expenses.

ARTICLE XXI. EXHIBITS
Each exhibit and attachment referenced in this Agreement is, by the reference, incorporated into and made a part of this Agreement
ARTICLE XXII. PRECEDENCE OF DOCUMENTS
In the event of any conflict between the body of this Agreement and any Exhibit or Attachment hereto, the terms and conditions of the body of this Agreement shall control and take precedence over the terms and conditions expressed within the Exhibit or Attachment. Furthermore, any terms or conditions contained within any Exhibit or Attachment hereto which purport to modify the allocation of risk between the parties, provided for within the body of this Agreement, shall be null and void.

ARTICLE XXIII. CUMULATIVE REMEDIES
No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

ARTICLE XXIV. NO THIRD-PARTY BENEFICIARIES
The rights, interests, duties and obligations defined within this Agreement are intended for the specific parties hereto as identified in the preamble of this Agreement. Notwithstanding anything stated to the contrary in this Agreement, it is not intended that any rights or interests in this Agreement benefit or flow to the interest of any third parties.

ARTICLE XXV. EXTENT OF AGREEMENT
Each party acknowledges that they have read and fully understand the contents of this Agreement and any documents issued that resulted in selection of CONSULTANT for entry into this Agreement. This

Agreement represents the entire and integrated agreement between the parties with respect to the subject matter hereof and supersede all prior negotiations, representations or agreements, either written or oral. This Agreement may be modified only by written instrument duly authorized and executed by both CITY and CONSULTANT.

AGREEMENT SIGNATURES

CITY OF GROVER BEACH, CALIFORNIA

PROFESSIONAL CONSULTANT SERVICES
UNDERWRITING SERVICES FOR THE 2024 COMMUNITY DEVELOPMENT BLOCK GRANT

MICROENTERPRISE BUSINESS ASSISTANCE PROGRAM
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement effective as of the day and year first written above.

CITY OF GROVER BEACH
Karen Bright, Mayor Date
Attest:

Wendi Sims, City Clerk Date
Approved as to Form:

Robert Lomeli, City Attorney Date

CONSULTANT
Angel H. Johnstone, Owner Date
Attachments:

1. Exhibit A - Scope of Services and Fee Schedule

2. Exhibit B - Insurance Requirements

3. Exhibit C - Disclosure of Conflict of Interest

4. Exhibit D - Economic Development Grant/Loan Program Guidelines

EXHIBIT A

PROFESSIONAL CONSULTANT SERVICES

CONSULTANT SCOPE OF WORK AND FEE SCHEDULE
D. PROPOSED SCHEDULE OF WORK:

1. Identify community/business needs
Contact the City, local chamber, local groups, etc. and gather information about who may be potential business loan/grant candidates or potential business sectors in the greatest need of financial assistance.

2. Identify how the loan and or grant program will address the business financial needs
Call and meet with potential applicants to discuss how and if the program can meet their business needs.

3. Work with the business to prepare the loan application Assist the business with completing the loan application and all necessary financials. Provide them with the tools in order to properly complete all necessary documents.

4. Facilitate loan committee meetings
Set a date with most loan committee members in order to review the applications. Provide the loan members the materials prior to the meeting for adequate review time.

5. Serve as a liaison between community/city/HCD
Provide the city with updates on current and potential applicants.

Discuss loan packages with the city at the loan meeting.

Keep the city and applicants informed about the progress of their project at all times.

6. Identify the grants reports and milestones that must be met throughout the grant contract
Keep the city informed an all grant reporting deadlines and identify who will be accomplishing each item.

7. Implement loan / grant program
Per all listed items discussed above.

I personally come and meet with clients and the city on an as needed basis with no minimum or maximum meetings.

Phased milestones will be based once the grant is awarded and a more concrete timeline can be assessed from the standard agreement contract date. Although, my rule of thumb is at least 70% of total funds expended during the first half of the grant's timeline.

E. I AGREE TO ALL CDBG STANDARD CLAUSES INCLUDED IN TIDS RFP UNDER FEDERAL TERMS AND CONDITIONS.

F. I ACKNOWLEDGE THAT THE STANDARD CONTRACT FOR THE CITY OF

GROVER BEACH IS ACCEPTABLE AS PRESENTED OR AS AMENDED,

INCLUDING THAT I CAN MEET THE CITY'S INSURANCE
RERQUIREMENTS.

G. I ACKNOWLEGE THAT THE CONTRACT WITH THE CITY OF GROVER

BEACH WILL ONLY BE VALID IF THE CITY IS AW AD RED THE FUNDS FOR THE PROPOSED ACTIVITY.

CONSULTANT SCOPE OF WORK AND FEE SCHEDULE

TOTAL FUNDING FOR PROGRAM

MICROLOANS
ACTIVITY DELIVERY – ANGEL JOHNSTONE’S FEE

GENERAL ADMINISTRATION
$946,000.00
$732,752.15
$151,360.00
$61,887.85
The City can manage this general admin area, have consultant manage it, or a combination of both.

EXHIBIT B

PROFESSIONAL CONSULTANT SERVICES

INSURANCE REQUIREMENTS
Without limiting CONSULTANT’S indemnification of CITY, and prior to commencement of Work, CONSULTANT shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to CITY.

General liability insurance. CONSULTANT shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.

Automobile liability insurance. CONSULTANT shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the CONSULTANT arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non-owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident.

Professional liability (errors & omissions) insurance. CONSULTANT shall maintain professional liability insurance that covers the Services to be performed in connection with this Agreement, in the minimum amount of $1,000,000 per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this Agreement and Consultant agrees to maintain continuous coverage through a period no less than three (3) years after completion of the services required by this Agreement.

Workers’ compensation insurance. CONSULTANT shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000).

Note: Workers' compensation and employer's liability insurance requirements may be eliminated for certain sole proprietorships, partnerships, or corporations without employees.

Consultant shall submit to CITY, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of CITY, its officers, agents, employees and volunteers.

Umbrella or excess liability insurance. CONSULTANT shall obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability, automobile liability, and employer’s liability. Such policy or policies shall include the following terms and conditions:
• A drop down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; • Pay on behalf of wording as opposed to reimbursement; • Concurrency of effective dates with primary policies; • Policies shall “follow form” to the underlying primary policies; and • Insureds under primary policies shall also be insureds under the umbrella or excess policies.

Other provisions or requirements
Proof of insurance. CONSULTANT shall provide certificates of insurance to CITY as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsements must be approved by CITY’s Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with CITY at all times during the term of this contract. CITY reserves the right to require complete, certified copies of all required insurance policies, at any time.

Duration of coverage. CONSULTANT shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the Work hereunder by CONSULTANT, his agents, representatives, employees or subconsultants.

Primary/noncontributing. Coverage provided by CONSULTANT shall be primary and any insurance or selfinsurance procured or maintained by CITY shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance.

Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of CITY before the CITY’S own insurance or self-insurance shall be called upon to protect it as a named insured.

CITY’S rights of enforcement. In the event any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, CITY has the right but not the duty to obtain the insurance it deems necessary and any premium paid by CITY will be promptly reimbursed by CONSULTANT or CITY will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, CITY may cancel this Agreement.

Acceptable insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VI (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by the CITY’S Risk Manager.

Waiver of subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against CITY, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow CONSULTANT or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. CONSULTANT hereby waives its own right of recovery against CITY, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

Enforcement of contract provisions (non estoppel). CONSULTANT acknowledges and agrees that any actual or alleged failure on the part of the CITY to inform CONSULTANT of non-compliance with any requirement imposes no additional obligations on the CITY nor does it waive any rights hereunder.

Requirements not limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Consultant maintains higher limits than the minimums shown above, the CITY requires and shall be entitled to coverage for the higher

limits maintained by the CONSULTANT. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY.

Notice of cancellation. CONSULTANT agrees to oblige its insurance agent or broker and insurers to provide to CITY with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage.

Additional insured status. General liability policies shall provide or be endorsed to provide that CITY and its officers, officials, employees, and agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies.

Prohibition of undisclosed coverage limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to CITY and approved of in writing.

Separation of insureds. A severability of interests provision must apply for all additional insureds ensuring that Consultant’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer’s limits of liability. The policy(ies) shall not contain any crossliability exclusions.

Pass through clause. CONSULTANT agrees to ensure that its subconsultants, subcontractors, and any other party involved with the project who is brought onto or involved in the project by CONSULTANT, provide the same minimum insurance coverage and endorsements required of CONSULTANT.

CONSULTANT agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. CONSULTANT agrees that upon request, all agreements with consultants, subcontractors, and others engaged in the project will be submitted to CITY for review.

CITY’s right to revise specifications. The CITY reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving the CONSULTANT ninety (90) days advance written notice of such change. If such change results in substantial additional cost to the CONSULTANT, the CITY and Consultant may renegotiate CONSULTANT’S compensation.

Self-insured retentions. Any self-insured retentions must be declared to and approved by CITY. CITY reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by CITY.

Timely notice of claims. CONSULTANT shall give CITY prompt and timely notice of claims made or suits instituted that arise out of or result from CONSULTANT’S performance under this AGREEMENT, and that involve or may involve coverage under any of the required liability policies.

Additional insurance. CONSULTANT shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work.

EXHIBIT C

PROFESSIONAL CONSULTANT SERVICE

CITY OF GROVER BEACH

DISCLOSURE OF CONFLICT OF INTEREST

EXHIBIT D

PROFESSIONAL CONSULTANT SERVICES

ECONOMIC DEVELOPMENT GRANT/LOAN PROGRAM GUIDELINES
Agenda Item No. 7

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: November 12, 2024 FROM: Matthew Bronson, City Manager
PREPARED BY: Greg Ray, Public Works Director/City Engineer Erin Wiggin, CIP Manager
SUBJECT: Construction Management Services for Ramona Garden Park Improvement Project Phases 1 and 2

RECOMMENDATION
Approve an agreement with Willdan in the amount of $456,023 for construction management services associated with the CIP 1259 – Ramona Garden Park Improvement Project Phases 1 and 2 and authorize the Mayor to execute the agreement on behalf of the City.

BACKGROUND
Ramona Garden Park is a two-acre park bounded by 9th and 10th streets to the west and the east and Ramona Avenue and Brighton Avenue to the south and north. It is a multi-use facility that is the focal point for many events in Grover Beach such as the Stone Soup Music Festival, Summer Concert Series, Halloween activities, City tree lighting ceremony and Santa’s Workshop.

Phases 1 and 2 for the project includes a playground at the north side of the park along with a new restroom building, an amphitheater and a bandshell with funding for the project coming from Community Development Block Grant (CDBG) funds.

The Public Works Department requested proposals for Construction Management services for CIP 1259 Ramona Garden Park Phases 1 and 2 from a list of qualified consultants that Council previously approved on May 24, 2021. A construction manager provides the direct, day-to-day link between a contractor and City staff on City projects. The construction manager assures the project is constructed in accordance with the approved plans, provides a constructability review prior to the project bidding, records daily construction activities, monitors daily construction progress, and administers and evaluates pay requests and changes in work, while also working directly with the contractor and project manager to resolve disputes.

The City received proposals from Wallace Group, Willdan, and Cannon Corporation. Based on staff’s evaluation, Willdan identified a level of resources, direct and relevant previous project experience, and an understanding of this project that best demonstrated the level of competency and professional qualifications needed for this project. Therefore, staff recommends the City enter into a contract agreement with Willdan. Based on staff’s research and evaluation, Willdan’s estimated cost of services of $456,023 is realistic to the level of service requested by the City and relative to the estimated construction cost of $3,300,000 (approximately 14%).

FISCAL IMPACT
The City has secured a $3.3 million award through the Community Development Block Grant program for this project with a total projected cost of approximately $3.76 million. The project has Staff Report: Construction Management for Ramona Park Improvement Project Phases 1 & 2 Page 2 November 12, 2024
an estimated funding shortfall to fully fund this project as shared previously with the Council in the amount of approximately $450,000. While General Fund reserves can be used initially to offset this funding gap, staff is working on a community giving effort to enable the community to support this transformative project for Ramona Park and help close this gap. Additional information about this effort will be shared at the December 9, 2024 Council meeting.

ALTERNATIVES
The Council has the following alternatives to consider:

1. Approve an agreement with Willdan, in the amount of $456,023, for construction management services associated with the CIP 1259 – Ramona Garden Park Project Phases 1 and 2, and authorize the Mayor to execute the agreement on behalf of the City; or

2. Provide direction to staff to seek the services of other consultants to provide construction management services; or

3. Provide staff with alternative direction.

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

Attachments

1. Agreement

AGREEMENT

CITY OF GROVER BEACH, CALIFORNIA

PROFESSIONAL SERVICES
CIP 1259 RAMONA GARDEN PARK PHASE 1 & 2
THIS AGREEMENT is made and entered into effective the 12th day of November, 2024 by and between the CITY OF GROVER BEACH, a California municipal corporation (hereinafter referred to as "CITY"), and WILLDAN ENGINEERING (hereinafter referred to as "CONSULTANT").

RECITALS
WHEREAS, CITY desires to obtain professional services for the RAMONA GARDEN PARK PROJECT PHASES 1 & 2 CIP 1259, more specifically identified in the Proposal, Scope of Work and Fee Schedule, jointly attached as “Exhibit A” to this Agreement, herein referred to as the PROJECT; and WHEREAS, CONSULTANT is engaged in the business of Construction Management and Materials Testing and hereby represents that it desires to and is professionally and legally capable of performing the services called for by this Agreement; and
WHEREAS, this Agreement sets forth the terms and conditions under which CONSULTANT shall provide professional services, to be paid by the City of Grover Beach; and WHEREAS, this Agreement will be administered for CITY by the Director of Public Works, hereinafter referred to as DIRECTOR or his/her designee.

AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the covenants, conditions, and promises hereinafter contained to be kept and performed by the respective parties, it is mutually agreed as follows:

ARTICLE I. SCOPE OF SERVICES
CONSULTANT shall complete said PROJECT described herein and more fully described in Exhibit A, and in accordance with local, State and Federal laws. This shall include all work incidental to, or necessary to perform, such services even though not specifically described in Exhibit A.

ARTICLE II. COMPENSATION AND PAYMENT
A. CONSULTANT’S sole compensation for satisfactory performance of all services required or rendered pursuant to this Agreement shall be performed on a not to exceed basis of $456,023.

B. CONSULTANT shall invoice CITY on a monthly basis, via detailed statement, which will be processed and payable in the normal course of CITY business, typically within 30 days of receipt of an invoice unless otherwise identified in this Agreement.

C. The parties may modify this Agreement to increase or decrease the scope of services or provide for the rendition of services not required by this Agreement, which modification shall include an adjustment to CONSULTANT’S compensation. Any change in the scope of services must be made by written Contract Amendment to the Agreement signed by an authorized representative for each party. CONSULTANT shall not be entitled to any additional compensation if services are performed prior to a signed written Contract Amendment.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2

D. At any time prior to issuance of final payment, the CITY may conduct a cost audit of CONSULTANT’S invoices/statements. Any payment may be reduced by amounts found by CITY not to constitute allowable costs and/or adjusted for prior overpayments or underpayments. Upon CONSULTANT’S compliance with all terms of this Agreement, City shall promptly pay any balance of allowable costs.

ARTICLE III. TERMINATION, REMEDIES, FORCE MAJEURE AND CONSOLIDATION OF DISPUTES A. This Agreement shall terminate without any liability of CITY to CONSULTANT upon the earlier of:
(i) CONSULTANT’S filing for protection under the federal bankruptcy laws, or any bankruptcy petition or petition for receiver commenced by a third party against CONSULTANT; (ii) Seven (7) calendar days written notice, with or without cause, by either the CITY or CONSULTANT;
(iii) Expiration of this Agreement.

B. Upon any termination or expiration of this Agreement, CONSULTANT shall (i) Immediately stop all work hereunder;
(ii) Immediately cause any and all of its subcontractors to cease work; and (iii) Return to CITY any and all unearned payments and all properties and materials in the possession of CONSULTANT that are owned by CITY. Subject to the terms of this Agreement, CONSULTANT shall be paid compensation for services satisfactorily performed prior to the effective date of termination. CONSULTANT shall not be paid for any work or services performed or costs incurred which reasonably could have been avoided.

C. In the event of termination due to failure of CONSULTANT to satisfactorily perform in accordance with the terms of this Agreement, CITY may withhold an amount that would otherwise be payable as an offset to, but not in excess of, CITY’S damages caused by such failure. In no event shall any payment by CITY pursuant to this Agreement constitute a waiver by CITY of any breach of this Agreement which may then exist on the part of CONSULTANT, nor shall such payment impair or prejudice any remedy available to CITY with respect to the breach.

D. Upon any breach of this Agreement by CONSULTANT, CITY may:
(i) Exercise any right, remedy (in contract, law or equity), or privilege which may be available to it under applicable laws of the State of California or any other applicable law; (ii) Proceed by appropriate court action to enforce the terms of the Agreement; and/or (iii) Recover all direct, indirect, consequential, economic and incidental damages for the breach of the Agreement. If it is determined that CITY improperly terminated this Agreement for default, such termination shall be deemed a termination for convenience.

E. CONSULTANT shall provide CITY with adequate written assurances of future performance, upon the request of the Director or his/her designee, in the event CONSULTANT fails to comply with any terms or conditions of this Agreement.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2

F. CONSULTANT shall be liable for default unless nonperformance is caused by an occurrence beyond the reasonable control of CONSULTANT and without its fault or negligence such as, acts of God or the public enemy, acts of CITY in its contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, unusually severe weather, and delays of common carriers. CONSULTANT shall notify the Director or his/her designee in writing as soon as it is reasonably possible after the commencement of any excusable delay, setting forth the full particulars in connection therewith, and shall remedy such occurrence with all reasonable dispatch, and shall promptly give written notice to the Director or his/her designee of the cessation of such occurrence.

G. CONSULTANT agrees that, notwithstanding any contrary provision in this Agreement, any dispute arising from or relating to this Agreement (including, without limitation, disputes based on contract, tort, equity or statute) may, at CITY’S option, be joined and consolidated with any other dispute or disputes arising from or relating to the PROJECT so that all disputes arising from or relating to the PROJECT may be resolved in a single proceeding. CONSULTANT hereby specifically waives any objection it may otherwise have to such joinder and consolidation and specifically consents to mediation, arbitration or any other dispute resolution mechanism, forum or proceeding necessary to effectuate the joinder and consolidation contemplated by this provision.

ARTICLE IV. CONFIDENTIAL INFORMATION, OWNERSHIP OF DOCUMENTS AND COPYRIGHT LICENSE A. Any reports, information, or other data prepared or assembled by CONSULTANT pursuant to this Agreement shall not be made available to any individual or organization by CONSULTANT without the prior written approval of CITY. During the term of this Agreement, and thereafter, CONSULTANT shall not, without the prior written consent of CITY, disclose to anyone any Confidential Information. The term Confidential Information for the purposes of this Agreement shall include all proprietary and confidential information of CITY, including but not limited to business plans, marketing plans, financial information, designs, drawings, specifications, materials, compilations, documents, instruments, models, source or object codes and other information developed pursuant to this Agreement, disclosed or submitted, orally, in writing, or by any other medium or media, (otherwise referred to as “work”). All Confidential Information shall be and remain confidential and proprietary in CITY.

B. CONSULTANT shall not reproduce (such as photographs and prints), duplicate, distribute reproductions, or incorporate into any trademark or service mark, the work without the prior written consent of CITY.

Any rights of the CONSULTANT in the work terminate upon the death of such CONSULTANT and do not extend to such CONSULTANT’S heirs, successors or assigns.

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C. Title to the work shall pass to CITY upon final acceptance by CITY. CITY reserves the right to donate, transfer or sell the work or any portion thereof. CITY shall have the exclusive right to publicly display the work and shall have a license to reproduce (such as photographs and prints) or create three-dimensional reproductions of the work for any noncommercial purpose (including, but not limited to, books, slides, postcards, film, Internet sites, reproductions for advertising, and other media). Prior to public display, the CITY shall consider the sensitive nature and potential security risk of releasing the information to the general public. Such reproductions shall contain if legally necessary a copyright notice. Reproductions for commercial purposes are only to be made with the mutual written consent of CONSULTANT and CITY.

All references and reproductions or adaptations of the work will credit the work to the CONSULTANT unless CONSULTANT requests to the contrary. CITY reserves the right to modify, remove and/or relocate the work at any time, and after consultation with CONSULTANT, shall have the right to determine when and if modifications, repairs and/or restorations are needed. If City makes modifications, repairs or restoration not approved by the CONSULTANT, the CONSULTANT shall have the right to sever its association with the work. CONSULTANT agrees to give CITY written notice prior to asserting any claim pertaining to the work, and CITY shall have not less than 90 days from the date of receipt of claim to cure any such claim. CITY may incorporate the work into any trademark or service mark to be utilized by City to register the same in accordance with Federal, state or local law.

D. If CONSULTANT should subcontract all or any portion of the services to be performed under this Agreement, CONSULTANT shall cause each subcontractor to also comply with the requirements of this Article (IV).

This Article (IV) shall survive expiration or termination of this Agreement.

ARTICLE V. PROFESSIONAL SKILL
It is further mutually understood and agreed by and between the parties hereto that inasmuch as CONSULTANT represents to CITY that CONSULTANT and its subcontractors, if any, are skilled in the profession and shall perform in accordance with the standards of said profession necessary to perform the services agreed to be done by it under this Agreement, CITY relies upon the skill of CONSULTANT and any subcontractors to do and perform such services in a skillful manner and CONSULTANT agrees to thus perform the services and require the same of any subcontractors. Therefore, any acceptance of such services by CITY shall not operate as a release of CONSULTANT or any subcontractors from said professional standards.

ARTICLE VI. INDEMNIFICATION AND DEFENSE
A. Indemnification and Defense for Professional Services: To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY and any and all of its officers, officials, employees, agents and volunteers (“Indemnified Parties”) from and against any and all claims, losses, liabilities, damages, costs and expenses, including legal counsel’s fees and costs, to the extent they arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT. CONSULTANT’S duty to defend shall consist of reimbursement of defense costs incurred by CITY in direct proportion to the CONSULTANT’S proportionate percentage of fault.

CONSULTANT’S percentage of fault shall be determined, as applicable, by a court of law, jury or arbitrator. In the event any loss, liability or damage is incurred by way of settlement or resolution without a court, jury or arbitrator having made a determination of the CONSULTANT’S percentage of fault, the parties agree to mediation with a third party neutral to determine the CONSULTANT’S proportionate percentage of fault for purposes of determining the amount of indemnity and defense cost reimbursement owed to the CITY.

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B. For All Other Liabilities: Notwithstanding the foregoing and without diminishing any rights of CITY under this Article (V), for any liability, claim, demand, allegation against CITY arising out of, related to, or pertaining to any act or omission of CONSULTANT, but which is not a design professional service, CONSULTANT shall defend, indemnify, and hold harmless CITY, its officials, employees, and agents (“Indemnified Parties”) from and against any and all damages, costs, expenses (including reasonable attorney fees and expert witness fees), judgments, settlements, and/or arbitration awards, whether for personal or bodily injury, property damage, or economic injury, and arising out of, related to, any concurrent or contributory negligence on the part of the CITY, except for the sole or active negligence of, or willful misconduct of the CITY.

C. If CONSULTANT should subcontract all or any portion of the services to be performed under this Agreement, CONSULTANT shall require each subcontractor to indemnify, hold harmless and defend CITY and each of its officers, officials, employees, agents and volunteers in accordance with the terms of the preceding paragraph.

This Article (VI) shall survive termination or expiration of this Agreement.

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ARTICLE VII. INSURANCE
A. Throughout the life of this Agreement, CONSULTANT shall pay for and maintain in full force and effect all insurance as required in Exhibit B, which is incorporated into and part of this Agreement, with an insurance company(ies) either:
(i) Admitted by the California Insurance Commissioner to do business in the State of California and rated no less than “A-VII” in the Best’s Insurance Rating Guide; or (ii) As may be authorized in writing by CITY'S Administrative Services Director, or his/her successor, or his/her designee at any time and in his/her sole discretion. The required policies of insurance as stated in Exhibit B shall maintain limits of liability of not less than those amounts stated therein.

B. If at any time during the life of the Agreement or any extension, CONSULTANT or any of its subcontractors/sub-consultants fail to maintain any required insurance in full force and effect, all services and work under this Agreement shall be discontinued immediately, and all payments due or that become due to CONSULTANT shall be withheld until notice is received by CITY that the required insurance has been restored to full force and effect and that the premiums therefore have been paid for a period satisfactory to CITY. Any failure to maintain the required insurance shall be sufficient cause for CITY to terminate this Agreement. No action taken by CITY pursuant to this Article (VII) shall in any way relieve CONSULTANT of its responsibilities under this Agreement. The phrase “fail to maintain any required insurance” shall include, without limitation, notification received by CITY that an insurer has commenced proceedings, or has had proceedings commenced against it, indicating that the insurer is insolvent.

C. The fact that insurance is obtained by CONSULTANT shall not be deemed to release or diminish the liability of CONSULTANT, including, without limitation, liability under the indemnity provisions of this Agreement. The duty to indemnify CITY shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by CONSULTANT. Approval or purchase of any insurance contracts or policies shall in no way relieve from liability nor limit the liability of CONSULTANT, its principals, officers, agents, employees, persons under the supervision of CONSULTANT, vendors, suppliers, invitees, consultants, sub-consultants, subcontractors, or anyone employed directly or indirectly by any of them.

D. If CONSULTANT should subcontract all or any portion of the services to be performed under this Agreement, CONSULTANT shall require each subcontractor/sub-consultant to provide insurance protection, as an additional insured, to the CITY and each of its officers, officials, employees, agents and volunteers in accordance with the terms of this section, except that any required certificates and applicable endorsements shall be on file with CONSULTANT and CITY prior to the commencement of any services by the subcontractor. CONSULTANT and any subcontractor/sub-consultant shall establish additional insured status for CITY, its officers, officials, employees, agents and volunteers.

ARTICLE VIII. CONFLICT OF INTEREST AND NON-SOLICITATION A. Prior to CITY’S execution of this Agreement, CONSULTANT shall complete a City of Grover Beach Conflict of Interest Disclosure Statement in the form as set forth in Exhibit C. During the term of this Agreement, CONSULTANT shall have the obligation and duty to immediately notify CITY in writing of any change to the information provided by CONSULTANT in such statement.

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B. CONSULTANT shall comply, and require its subcontractors to comply, with all applicable (i) Professional canons and requirements governing avoidance of impermissible client conflicts; and
(ii) Federal, state and local conflict of interest laws and regulations including, without limitation, California Government Code Section 1090 et. seq., the California Political Reform Act (California Government Code Section 87100 et. seq.), and the regulations of the Fair Political Practices Commission concerning disclosure and disqualification (2 California Code of Regulations Section 18700 et. seq.).

At any time, upon written request of CITY, CONSULTANT shall provide a written opinion of its legal counsel and that of any subcontractor that, after a due diligent inquiry, CONSULTANT and the respective subcontractor(s) are in full compliance with all laws and regulations. CONSULTANT shall take, and require its subcontractors to take, reasonable steps to avoid any appearance of a conflict of interest. Upon discovery of any facts giving rise to the appearance of a conflict of interest, CONSULTANT shall immediately notify CITY of these facts in writing.

C. In performing the work or services to be provided hereunder, CONSULTANT shall not employ or retain the services of any person while such person either is employed by CITY or is a member of any CITY council, commission, board, committee, or similar CITY body. This requirement may be waived in writing by the City Manager, if no actual or potential conflict is involved.

D. CONSULTANT represents and warrants that it has not paid or agreed to pay any compensation, contingent or otherwise, direct or indirect, to solicit or procure this Agreement or any rights/benefits hereunder.

E. Neither CONSULTANT, nor any of CONSULTANT’S subcontractors performing any services on this Project, shall bid for, assist anyone in the preparation of a bid for, or perform any services pursuant to, any other contract in connection with this Project. CONSULTANT and any of its subcontractors shall have no interest, direct or indirect, in any other contract with a third party in connection with this Project unless such interest is in accordance with all applicable law and fully disclosed to and approved by the City Manager, in advance and in writing.

F. If CONSULTANT should subcontract all or any portion of the work to be performed or services to be provided under this Agreement, CONSULTANT shall include the provisions of this Article in each subcontract and require its subcontractors to comply therewith.

This Article (VIII) shall survive termination or expiration of this Agreement.

ARTICLE IX. GENERAL TERMS
A. Except as otherwise provided by law, all notices expressly required of CITY within the body of this Agreement, and not otherwise specifically provided for, shall be effective only if signed by the Director or his/her designee.

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B. Records of CONSULTANT’S expenses pertaining to the Project shall be kept on a generally recognized accounting basis and shall be available to CITY or its authorized representatives upon request during regular business hours throughout the life of this Agreement and for a period of three years after final payment or, if longer, for any period required by law. In addition, all books, documents, papers, and records of CONSULTANT pertaining to the Project shall be available for the purpose of making audits, examinations, excerpts, and transcriptions for the same period of time. If any litigation, claim, negotiations, audit or other action is commenced before the expiration of said time period, all records shall be retained and made available to CITY until such action is resolved, or until the end of said time period whichever shall later occur. If CONSULTANT should subcontract all or any portion of the services to be performed under this Agreement, CONSULTANT shall cause each subcontractor to also comply with the requirements of this paragraph. This Article 10(B) shall survive expiration or termination of this Agreement.

C. Prior to execution of this Agreement by CITY, CONSULTANT shall have provided evidence to CITY that CONSULTANT is licensed to perform the services called for by this Agreement (or that no license is required). CONSULTANT and any subcontractors shall agree to obtain any local licensing or certifications necessary to perform services within the City, including but not limited to City Business Tax Certificates. If CONSULTANT should subcontract all or any portion of the work or services to be performed under this Agreement, CONSULTANT shall require each subcontractor to provide evidence to CITY that subcontractor is licensed to perform the services called for by this Agreement (or that no license is required) before beginning work.

ARTICLE X. NONDISCRIMINATION
To the extent required by controlling federal, state and local law, CONSULTANT shall not employ discriminatory practices in the provision of services, employment of personnel, or in any other respect on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, ethnicity, status as a disabled veteran or veteran of the Vietnam era. Subject to the foregoing and during the performance of this Agreement, CONSULTANT agrees as follows:

A. CONSULTANT will comply with all applicable laws and regulations providing that no person shall, on the grounds of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, sexual orientation, ethnicity, status as a disabled veteran or veteran of the Vietnam era be excluded from participation in, be denied the benefits of, or be subject to discrimination under any program or activity made possible by or resulting from this Agreement.

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B. CONSULTANT will not discriminate against any employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, sexual orientation, ethnicity, gender identification, status as a disabled veteran or veteran of the Vietnam era. CONSULTANT shall ensure that applicants are employed, and the employees are treated during employment, without regard to their race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, sexual orientation, ethnicity, gender identification, status as a disabled veteran or veteran of the Vietnam era. Such requirement shall apply to CONSULTANT’S employment practices including, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. CONSULTANT agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provision of this nondiscrimination clause.

C. CONSULTANT will, in all solicitations or advertisements for employees placed by or on behalf of CONSULTANT in pursuit hereof, state that all qualified applicants will receive consideration for employment without regard to race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, sexual orientation, ethnicity, status as a disabled veteran or veteran of the Vietnam era.

D. CONSULTANT will send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, a notice advising such labor union or workers' representatives of CONSULTANT’S commitment under this section and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

E. If CONSULTANT should subcontract all or any portion of the services to be performed under this Agreement, CONSULTANT shall cause each subcontractor to also comply with the requirements of this Article (X).

ARTICLE XI. INDEPENDENT CONTRACTOR
A. In the furnishing of the services provided for herein, CONSULTANT is acting solely as an independent contractor. Neither CONSULTANT, nor any of its officers, agents or employees shall be deemed an officer, agent, employee, joint venture, partner or associate of CITY for any purpose. CITY shall have no right to control or supervise or direct the manner or method by which CONSULTANT shall perform its work and functions. However, CITY shall retain the right to administer this Agreement so as to verify that CONSULTANT is performing its obligations in accordance with the terms and conditions thereof.

B. This Agreement is not evidence of a partnership or joint venture between CONSULTANT and CITY.

CONSULTANT shall have no authority to bind CITY absent CITY’S express written consent. Except to the extent otherwise provided in this Agreement, CONSULTANT shall bear its own costs and expenses in pursuit thereof.

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C. Because of its status as an independent contractor, CONSULTANT and its officers, agents and employees shall have absolutely no right to employment rights and benefits available to CITY employees. CONSULTANT shall be solely liable and responsible for all payroll and tax withholding and for providing to, or on behalf of, its employees all employee benefits including, without limitation, health, welfare and retirement benefits. In addition, together with its other obligations under this Agreement, CONSULTANT shall be solely responsible, indemnify, defend and save CITY harmless from all matters relating to employment and tax withholding for and payment of CONSULTANT'S employees, including, without limitation:
(i) Compliance with Social Security and unemployment insurance withholding, payment of workers’ compensation benefits, and all other laws and regulations governing matters of employee withholding, taxes and payment; and
(ii) Any claim of right or interest in CITY employment benefits, entitlements, programs and/or funds offered employees of CITY whether arising by reason of any common law, de facto, leased, or co-employee rights or other theory. It is acknowledged that during the term of this Agreement, CONSULTANT may be providing services to others unrelated to CITY or to this Agreement.

ARTICLE XII. NOTICES
All notices, including notices of address changes, required to be sent hereunder shall be in writing and shall be deemed to have been given when mailed to the addresses listed below:

A. CITY: City of Grover Beach, Gregory A. Ray, Director of Public Works/City Engineer, 154 South Eighth Street, Grover Beach, CA 93433
B. CONSULTANT: Willdan Engineering, Vanessa Munoz, President, 374 Poli Street, Suite 101, Ventura CA 93001-2605
ARTICLE XIII. BINDING
Subject to Article XII, below, once this Agreement is signed by all parties, it shall be binding upon, and shall inure to the benefit of, all parties, and each parties' respective heirs, successors, assigns, transferees, agents, servants, employees and representatives.

ARTICLE XIV. ASSIGNMENT
A. This Agreement is personal to CONSULTANT and there shall be no assignment by CONSULTANT of its rights or obligations under this Agreement without the prior written approval of the Grover Beach City Council. Any attempted assignment by CONSULTANT, its successors or assigns, shall be null and void unless approved by the Grover Beach City Council.

B. CONSULTANT hereby agrees not to assign the payment of any monies due CONSULTANT from CITY under the terms of this Agreement to any other individual(s), corporation(s) or entity(ies). CITY retains the right to pay any and all monies due CONSULTANT directly to CONSULTANT.

ARTICLE XV. COMPLIANCE THE LAW
In providing the services required under this Agreement, CONSULTANT shall at all times comply with all applicable laws of the United States, the State of California and CITY, and with all applicable regulations promulgated by federal, state, regional, or local administrative and regulatory agencies, now in force and as they may be enacted, issued, or amended during the term of this Agreement.

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ARTICLE XVI. WAIVER
The waiver by either party of a breach by the other of any provision of this Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of either the same or a different provision of this Agreement. No provisions of this Agreement may be waived unless in writing and signed by all parties to this Agreement. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein.

ARTICLE XVII. GOVERNING LAW AND VENUE
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, excluding, however, any conflict of laws rule which would apply the law of another jurisdiction. Venue for purposes of the filing of any action regarding the enforcement or interpretation of this Agreement and any rights and duties hereunder shall be San Luis Obispo County, California.

ARTICLE XVIII. HEADINGS
The section headings in this Agreement are for convenience and reference only and shall not be construed or held in any way to explain, modify or add to the interpretation or meaning of the provisions of this Agreement.

ARTICLE XIX. SEVERABILITY
The provisions of this Agreement are severable. The invalidity, or unenforceability of any one provision in this Agreement shall not affect the other provisions.

ARTICLE XX. INTERPRETATION
The parties acknowledge that this Agreement in its final form is the result of the combined efforts of the parties and that, should any provision of this Agreement be found to be ambiguous in any way, such ambiguity shall not be resolved by construing this Agreement in favor of or against either party, but rather by construing the terms in accordance with their generally accepted meaning.

ARTICLE XXI. ATTORNEY’S FEES
If either party is required to commence any proceeding or legal action to enforce or interpret any term, covenant or condition of this Agreement, the prevailing party in such proceeding or action shall be entitled to recover from the other party its reasonable attorney's fees and legal expenses.

ARTICLE XXII. EXHIBITS
Each exhibit and attachment referenced in this Agreement is, by the reference, incorporated into and made a part of this Agreement
ARTICLE XXIII. PRECEDENCE OF DOCUMENTS
In the event of any conflict between the body of this Agreement and any Exhibit or Attachment hereto, the terms and conditions of the body of this Agreement shall control and take precedence over the terms and conditions expressed within the Exhibit or Attachment. Furthermore, any terms or conditions contained within any Exhibit or Attachment hereto which purport to modify the allocation of risk between the parties, provided for within the body of this Agreement, shall be null and void.

ARTICLE XXIV. CUMULATIVE REMEDIES
No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

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ARTICLE XXV. NO THIRD-PARTY BENEFICIARIES
The rights, interests, duties and obligations defined within this Agreement are intended for the specific parties hereto as identified in the preamble of this Agreement. Notwithstanding anything stated to the contrary in this Agreement, it is not intended that any rights or interests in this Agreement benefit or flow to the interest of any third parties.

ARTICLE XXVI. EXTENT OF AGREEMENT
Each party acknowledges that they have read and fully understand the contents of this Agreement and any documents issued that resulted in selection of CONSULTANT for entry into this Agreement. This Agreement represents the entire and integrated agreement between the parties with respect to the subject matter hereof and supersede all prior negotiations, representations or agreements, either written or oral. This Agreement may be modified only by written instrument duly authorized and executed by both CITY and CONSULTANT.

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AGREEMENT SIGNATURES

CITY OF GROVER BEACH, CALIFORNIA

PROFESSIONAL CONSULTANT SERVICES
CIP 1259 RAMONA GARDEN PARK PHASE 1 & 2
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement effective as of the day and year first written above.

CITY OF GROVER BEACH

Karen Bright, Mayor Date
Attest:

Wendi Sims, City Clerk Date
Approved as to Form:

Robert Lomeli, City Attorney Date

WILLDAN ENGINEERING

Vanessa Munoz, President Date
Attachments:

1. Exhibit A - Scope of Services and Fee Schedule

2. Exhibit B - Insurance Requirements

3. Exhibit C - Disclosure of Conflict of Interest
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11/7/2024

EXHIBIT A

PROFESSIONAL CONSULTANT SERVICES

CONSULTANT SCOPE OF WORK AND FEE SCHEDULE
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14. CDBG COMPLIANCE Willdan’s Construction Manager will ensure that all required forms are completed, signed, and submitted by the Contractor, as well as posting of federal posters on the job site and conducting equal opportunity employment interviews throughout the course of construction.

15. CONTRACT

ADMINISTRATION
All Document Control Procedures established by the City will be followed. Both hard and electronic copies of all documents, including correspondence, contract drawings, submittals, standard forms, report, and submittal logs will be kept current during the project and will be delivered to the City as final project documentation.

16. PROJECT

CLOSEOUT
Manage all post‐construction activities, including, punch list development and oversight, management of final payment estimate applications, collection of as‐built drawings and submittal to the City, collection of all warranty certificates and submittal to the City, and assist the City in the project closeout with the contractor.

Scope of Work
Scope of Work Willdan’s Tasks
Project Management 1. Serve as primary contact for the City of Grover Beach regarding contract performance and delivery of professional services.

2. Prepare and submit monthly invoices.

3. Provide coordination of Willdan’s Team, including subconsultants, to ensure that all relevant and needed files are provided.

4. Schedule and lead kickoff meeting with City and Willdan Team to fully clarify critical elements of the project. We will prepare a discussion agenda that focuses on the project understanding (overview), project constraints, project progress, and team member involvement. This meeting will also include a review of background information provided by the City and project scope, schedule, objectives, milestones, and details.

5. Distribute assignments to Team members.

6. Provide Willdan staff with office supplies, tools, equipment, and copies of plans necessary to perform the requested review services.

7. Coordinate and monitor assignments and activities.

8. Perform quality control review of all deliverables prior to submission to the City.

Design Phase
(Pre-Bid Phase)

1. Conduct a thorough review of the construction plans, specifications, and estimate at the 95% design milestone.

2. Verify that contract documents are well coordinated and reviewed for errors.

3. Verify that designs are in conformance with City of Grover Beach Design standards and requirements.

4. Verify potential utility conflicts and identify items requiring coordination with third party utility agencies.

5. Provide a thorough review of the construction sequence necessary to complete the improvements included in the construction contract.

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CIP 1259 Ramona Garden Park Phase 1 and 2 8

6. Evaluate and make recommendations regarding construction phasing, milestones, construction duration, liquidated damages amount, budget, contingency, and contracting mechanism.

7. Identify, to the extent known, potential construction deficiencies and areas of concern.

8. Check cross referencing of plan sheets, details, etc. across various plan sheets.

9. Verify proper coordination amongst plan sheets for different disciplines.

10. Prepare and submit an itemized list of comments, findings, and outline recommendations to reconcile issues discovered and generally to expedite the project.

11. Identifying conflicts or inconsistencies amongst the construction documents, i.e., conflicts between drawings and specifications, between drawings, or between spec sections.

Bidding Phase
(If needed)

1. Assist the City with responses to bidders questions.

2. Review the three lowest bids.

3. Verify eligibility of the apparent low bidder and its subcontractors to receive contract awards by confirming current, active license status with the State of California Contractors License Board and non-appearance on the Federal List of Parties Excluded (debarment list).

4. Check references of lowest, responsive bidder.

5. Document any irregularities in the bids.

6. Verify the low bidder's qualifications.

7. Prepare the bid summary.

8. Prepare a recommendation of contract award.

Preconstruction
Services

1. Review project plans and contract documents.

2. Provide a written technical memorandum that identifies any concerns of risk to the City, or any design related risk that should be addressed before construction begins.

3. Review questions with City’s project manager and project engineer/architect.

4. Review bid form pay quantities.

5. Review City-provided Resident Engineer’s (RE) Binder and become familiar with the contents of the RE Binder.

6. Prepare and maintain project file system.

7. Become familiar with applicable standard specifications, standard drawings, and details.

8. Note critical items and unusual conditions.

9. Walk the project site and photograph and video the work area and site conditions prior to start of construction.

10. Verify coordination needed for City crews and outside utility companies.

11. Meet with City staff and project manager prior to pre-construction conference.

12. Distribute City-designed and procured door-hangers to all residence along the route of construction.

13. Participate in a neighborhood “corner meeting,” typically held after 5:30 p.m., to present to the attendees the upcoming work, and be a point of contact for the residents affected by the work. The meeting will be scheduled in coordination with City staff, and invite Contractor, Design Consultant, required City staff, utility Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2 Proposal for Construction Management Services
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companies and regulatory agencies. The meeting will be scheduled for two hours to occur within City Council Chambers at 154 South 8th Street.

14. Schedule the preconstruction meeting in coordination with City staff, and will invite contractor, design consultant, required City staff, utility companies and regulating agencies.

15. Organize and conduct the pre-construction meeting. Meet with the City’s Engineering Project Manager to review the draft meeting agenda. Incorporate any comments into the agenda before distribution. The meeting will be scheduled for two hours to occur within City Council Chambers at 154 South 8th Street. a. Provide a sign in sheet for all attendees
b. Keep meeting minutes that show subjects discussed, direction given and response received.
c. Present and/or review the City’s Notice to Proceed (NTP). Verify and/or discuss modificationsto the start-date of construction as presented within the NTP.
d. Document items submitted by the contractor such as: the emergency response sheet, baseline schedule,submittals, and otheritems of importance.
e. Confirm the authority and responsibility of all partiesinvolved. f. Address the concerns and needs of affected utilitycompanies. g. Discuss unusual working conditions and permitrequirements. h. Verify that the contractor will give proper notification to the residents and businesses of the start date of construction and what kind of work is being performed.
i. Emphasize the importance of notifications from the Contactor to the public and when and how information is distributed to the public, and just as importantly, what not to do in distribution ofinformation. j. City staff assigned to the project will attend to answer any unusual questions.

16. Prepare and distribute pre-construction meeting minutes.

17. Review the baseline schedule submitted by the Contractor and accept when satisfactory and prior to the start of construction.

18. Log and review submittals and shop drawings as needed. Route submittals as needed for project engineer/architect’s approval.

19. Document any approved changes to the scheduled start date with a change order.

Construction
Management

1. Assist City with public awareness and information program to keep residents and local stakeholders informed of project status along with impacts to traffic flow circulation, including answering public’s questions about project.

2. Prepare construction file. A copy of Willdan’s file checklist can be provided upon request.

3. Review contractor’s safety program in consultation with City staff.

4. Through Willdan’s system of project control, monitor activities related to project such that project is constructed in timely fashion pursuant to contract documents.

5. Log, track, and process submittals, RFIs, releases for construction (RFCs), contract change orders (CCOs), field directives, notices of proposed change (NOPCs), nonconformance reports (NCRs), construction schedule, and detailed traffic control plan.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2 Proposal for Construction Management Services
CIP 1259 Ramona Garden Park Phase 1 and 2 10

6. Log and review submittals and shop drawings as needed. Route submittals as needed for project engineer/architect’s approval to allow for responses within the specified turnaround time.

7. Log and route RFIs. Answer field-related RFIs to the extent possible.

8. Prepare RFI responses or potential solutions for the City’s review.

9. Manage the RFI process to provide responses to RFIs within the turn- around time specified in the contract documents to the extent possible.

10. Closely review schedule and advise contractor to take action on schedule slippage.

11. Receive and review contractor’s look ahead schedule (two- or three-week look ahead) and provide a narrative to the City for use in updating the project’s social media site. The City will provide a template in Word for use in developing the weekly update. Compare the progress of work with the baseline or progress schedules, and issue nonconforming reports if unapproved slippages occur.

12. Review project progress, proposed change orders and notification to the project with the design engineer via the city project manager.

13. Prepare weekly statement of working days and submit to contractor and City.

14. Prepare correspondence necessary to maintain control over the construction contract.

15. Establish and conduct weekly construction progress meetings to:
 Resolve all old business issues to maximum extent possible  Address all items of new business as presented by any party  Review project schedule and address any deviations
 Review submittal log in terms of items needed and resubmittals required and review RFI, RFC, CCO, NCR, and NOPC logs
 List status of construction items recently undertaken or ongoing  List planned construction items for next two weeks (two-week look ahead schedule)
 Review SWPPP issues
 Review contractor’s safety program

16. Prepare minutes for weekly construction progress meeting.

17. Notify City contact in writing within 24-hours at any point in the project when a dispute arises, an unknown condition is discovered, or at any time the contractor believes extra work / change order work is warranted.

18. Monitor and coordinate activities of design engineering support, surveying, testing, and work by utilities or other agencies.

19. Conduct special site meetings, when necessary, with contractor and City staff to review job progress, scheduling, and coordination.

20. Assist in coordinating contractor’s field work with utility companies and other agencies.

21. Notify contractor of any unacceptable condition or workmanship. Document approved changes.

22. Notify City contact in writing in a timely manner when a dispute arises, an unknown condition is discovered, or at any time the contractor believes extra work / change order work is warranted.

23. Document conversations that could be significant in the event a claim or dispute.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2 Proposal for Construction Management Services
CIP 1259 Ramona Garden Park Phase 1 and 2 11

24. Negotiate and prepare change orders, including memorandum of explanation and cost estimates, to substantiate change order and send to City for review.

25. Maintain all data for change orders and record information with regard to time of dispute, time of notification by contractor, and action taken by inspector.

26. Prepare and route Change Orders on the city’s form, as required, and in a timely manner. Evaluate the merit of proposed change orders and provide justification of recommendation to the City.

27. Monitor and perform immediate and thorough analysis of validity of all potential claims that arise.

28. Require Contractor to follow proper procedures for substitution of subcontractors.

29. Document contractor’s 20-day notices, mechanic’s liens, and stop notices.

30. Review for approval contractor’s progress payment requests; negotiate differences over amount with contractor; and process payments through City's Project Manager. Verify that Contractor is maintaining an accurate and ongoing set of Record Drawings as a condition of payment approval.

31. Routinely review construction files to ensure conformance to City standards and good construction management practices.

Construction
Inspection

1. Review plans, specifications, and all other contract- and construction-related documents.

2. Conduct a field investigation of the project area to become familiar with the existing facilities and the project environment.

3. Become familiar with traffic control plans, construction schedule, construction sequence, and permit requirements from other agencies.

4. Photograph continuous property frontages along the street alignment once prior to construction and once immediately following construction. Maintain a photographic record of key elements of each major operation of work each day, with increased detail in situations of potential changes or claims.

5. Provide full-time and as-needed construction inspection of the work to monitor materials and methods for compliance with plans, specifications, and contract documents; and address and document non-conforming items as they are discovered.

6. Maintain an open and effective working and professional level of communication with the contractor.

7. Meet with the contractor at the beginning of each day and review the proposed work plan, including specific details that may affect progress.

8. Review schedule, plans, and specifications for upcoming work, to keep ahead of the contractor and the workflow. Advise Contractor that any questions shall be presented by the contractor as an RFI.

9. Daily: document manpower, equipment and materials used on site, separate activities, hours, and resources by pay item. Document Inspector arrival/departure time from site.

10. Maintain a daily diary of craft of workers, equipment, operations, and hours spent on each item. Send these weekly to the city.

11. Note approval or rejection of material and work. Any rejected work shall be documented by a Nonconformance Report issued to the Contractor and copied to the City’s project manager.

12. Respond to basic public inquires. Refer more complicated inquires to appropriate City staff. The City will provide a template hand-out that field personnel (CM and Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2 Proposal for Construction Management Services
CIP 1259 Ramona Garden Park Phase 1 and 2 12
construction staff) will use to hand to members of the public who approach crews and ask questions. This hand-out will advise the public to contact a person at City Hall so that there is a single point-of-contact who can field questions and provide answers.

13. Monitor the construction activities to ensure the project is built as designed and specified.

14. Check site safety, signage, and contractor’s traffic control, and document findings.

Immediately notify the contractor of any nonconforming situations. Although Willdan will monitor the activities, it is the contractor’s sole responsibility to provide workers with a safe working environment.

15. Check for public safety and compliance to the approved traffic control plan, and document findings. Immediately notify the contractor of any nonconforming situations. Although Willdan will monitor the activities, it is the contractor’s sole responsibility to provide workers with a safe working environment.

16. Monitor compliance of Poster boards, DBE requirements and EEO notifications.

17. Monitor compliance with the Clean Air Act and the Clean Water Act (National Pollutant Discharge Elimination System – NPDES best management practices). Also, monitor the contractor’s compliance with approved SWPPP.

18. Verify compliance of Underground Service Alert notification/delineation.

19. Evaluate the contractor’s operation and production with respect to quality and progress and report to the construction manager.

20. Verify layout, operations, and intent of work with the contractor.

21. Examine all material to be used for contract compliance and document findings.

Issue a written Nonconforming Report for any rejected materials and direct Contractor to have it removed from the job.

22. Notify contractor of any unacceptable condition or workmanship. Document approved changes.

23. Document delays, including the cause and time of day. Keep accurate record of any work delays, including construction manager personnel and equipment, city personnel and equipment, and contractor personnel and equipment. Any contractor-caused work delays beyond normal work hours are eligible for backcharge/withhold from the contractor’s payment application.

24. Maintain records of disputed work

25. Document the approved Force Account work on the appropriate forms daily.

26. Track time for the management of any nonconforming work, as such inspection services are subject to backcharge/withhold from contractor’s payment applications.

27. Make reasonable attempts to obtain agreement and sign-off of the job supervisor of the documented operation performed with written reservation to the validity of the claim.

28. Review the plans and specifications for legitimacy of contractors claim and present a specific written report documenting this review and a formal signed and dated recommendation for the City to consider. No extra work requests will be processed without this independent analysis and report recommendation

29. Discuss with city project manager to minimize impacts if the city is liable.

30. Note statements of concern made by the contractor in daily inspection report.

31. Conduct an ongoing evaluation of operations and materials used.

32. Monitor the subcontractors used on the project for compliance with the contractors’ listing requirements.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2 Proposal for Construction Management Services
CIP 1259 Ramona Garden Park Phase 1 and 2 13

33. At the end of each month, measure all work performed during the month, using the pay items.

34. Maintain backup documentation such as delivery tickets and tonnage slips.

35. Provide complete measurements and calculations documentation to administer progress payments.

36. Attend weekly progress meetings with the construction manager, contractor, and subcontractors.

37. Assist in coordination of engineering support, surveying, specialty inspections, and fieldwork by utility companies.

38. Coordinate with Contractor and utility companies to assist in the identification of unknown utilities and possible relocation of interfering structures or lines.

39. Closely monitor testing results and require the contractor to provide corrective measures to achieve compliance.

40. Maintain copies of all permits needed to construct the projects and enforce special requirements of each.

41. Maintain and submit a clean set of plans marked in red for as-built corrections on record drawings to be filed with the City.

Material Testing/
Special Inspection
Earth Systems’ proposed scope of work for Ramona Garden Park phases 1 and 2 includes special inspection and material testing during site grading, utility construction, pedestrian, and landscape improvements, as well as special inspection and testing during construction of the planned site structures, which includes a new playground, prefabricated restroom, and kiosk building. They will also assist the construction manager with geotechnical engineering insight and review of necessary submittals for compliance with the project specifications, including helping to review material submittals, as applicable to the final design.

Earth Systems will provide geotechnical inspection services during earthwork operations.

Soils special inspection will be performed during site grading, structure backfill, utility backfill operations, amphitheater and seatwall foundation construction, building footing excavation and other miscellaneous site grading. Compaction testing on native soil, aggregate base, non-expansive backfill and utility backfill material during construction of the building pad, landscape areas, previously mentioned activities and other miscellaneous items will also be performed.

Earth Systems will also perform laboratory testing associated with grading. Laboratory material testing will include sieve analysis, maximum density vs. optimum moisture, and other associated tests where applicable. Testing will be performed in accordance with the applicable Caltrans Test Method or appropriate ASTM test procedures as listed in the project plans and specifications and City Standards.

Earth Systems will provide special inspection during structural concrete and rebar placement and anchor bolt installation. Further, they will sample the concrete and perform testing on the concrete compressive strength samples for foundations, walls, and piers. They’ve assumed that acceptance of these materials, as well as cement, by review of certificates if approved by the structural engineer will be allowed. Sampling of non-structural concrete, such as pedestrian flatwork and retaining curbs, will also be performed as requested by the City’s representative.

Earth Systems will attend a pre-construction meeting, as well as meetings for major work elements, as needed. Compaction test reports, final inspection and testing reports and Certified Payroll reports will be prepared and submitted as required.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2 Proposal for Construction Management Services
CIP 1259 Ramona Garden Park Phase 1 and 2 14
Survey
(If Needed)

1. Perform quality assurance survey checking, if needed. This proposal assumes two half-day callouts by a surveyor for quality assurance checking.

Contract Closeout 1. Review project for acceptance of workmanship and materials.

2. Review site with the design project manager and the city project manager for acceptance.

3. Compile a punch list of deficiencies and manage the punch list until all work items are complete.

4. Notify the contractor and re-inspect when the contractor is ready. Working days are in effect until all contract items are complete.

5. Collect and file or distribute maintenance manuals and operating instructions of equipment installed as it applies to the project specifications.

6. Assist with scheduling the training for City maintenance staff if training is required in the project specifications.

7. Compile and review record drawings, make changes, or have changes made as required. The construction manager’s and the contractor’s as-built red-line drawings shall be submitted to the City for review and acceptance. This process is a condition for the release of retention and final payment; therefore, it shall be done in a timely manner. City staff will confirm the accuracy and pass them on to the designer upon acceptance. Record drawings will be produced by the design engineer for the City’s records only: no distribution will be made to the construction manager or the contractor.

8. Draft and Submit Recommendation for Acceptance to City following Project Completion. Recommendation for management of liquidated damages and/or the addition of days, shall be clearly described within this Recommendation for Acceptance.

9. Within 2 weeks of project completion, prepare and chair a post construction meeting with the design engineer and city staff involved with the project to discuss the pros and cons. Prepare a complete critique of the project for the meeting.

10. Assist City with stop notices and release of retention.

11. Finalize and deliver all construction files and supplies to City for their records.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2 Proposal for Construction Management Services
CIP 1259 Ramona Garden Park Phase 1 and 2
18 Fee Proposal
If awarded, Willdan’s invoicing will be submitted monthly, on a time and materials basis, matching the line items included in this fee matrix.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2

EXHIBIT B

PROFESSIONAL CONSULTANT SERVICES

INSURANCE REQUIREMENTS
Without limiting CONSULTANT’S indemnification of CITY, and prior to commencement of Work, CONSULTANT shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to CITY.

General liability insurance. CONSULTANT shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.

Automobile liability insurance. CONSULTANT shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the CONSULTANT arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non-owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident.

Professional liability (errors & omissions) insurance. CONSULTANT shall maintain professional liability insurance that covers the Services to be performed in connection with this Agreement, in the minimum amount of $1,000,000 per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this Agreement and Consultant agrees to maintain continuous coverage through a period no less than three (3) years after completion of the services required by this Agreement.

Workers’ compensation insurance. CONSULTANT shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000).

Note: Workers' compensation and employer's liability insurance requirements may be eliminated for certain sole proprietorships, partnerships, or corporations without employees.

Consultant shall submit to CITY, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of CITY, its officers, agents, employees and volunteers.

Umbrella or excess liability insurance. CONSULTANT shall obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability, automobile liability, and employer’s liability. Such policy or policies shall include the following terms and conditions:
• A drop down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; • Pay on behalf of wording as opposed to reimbursement; • Concurrency of effective dates with primary policies; • Policies shall “follow form” to the underlying primary policies; and • Insureds under primary policies shall also be insureds under the umbrella or excess policies.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2

Other provisions or requirements
Proof of insurance. CONSULTANT shall provide certificates of insurance to CITY as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsements must be approved by CITY’s Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with CITY at all times during the term of this contract. CITY reserves the right to require complete, certified copies of all required insurance policies, at any time.

Duration of coverage. CONSULTANT shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the Work hereunder by CONSULTANT, his agents, representatives, employees or subconsultants.

Primary/noncontributing. Coverage provided by CONSULTANT shall be primary and any insurance or selfinsurance procured or maintained by CITY shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance.

Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of CITY before the CITY’S own insurance or self-insurance shall be called upon to protect it as a named insured.

CITY’S rights of enforcement. In the event any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, CITY has the right but not the duty to obtain the insurance it deems necessary and any premium paid by CITY will be promptly reimbursed by CONSULTANT or CITY will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, CITY may cancel this Agreement.

Acceptable insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VI (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by the CITY’S Risk Manager.

Waiver of subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against CITY, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow CONSULTANT or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. CONSULTANT hereby waives its own right of recovery against CITY, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

Enforcement of contract provisions (non estoppel). CONSULTANT acknowledges and agrees that any actual or alleged failure on the part of the CITY to inform CONSULTANT of non-compliance with any requirement imposes no additional obligations on the CITY nor does it waive any rights hereunder.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2

Requirements not limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Consultant maintains higher limits than the minimums shown above, the CITY requires and shall be entitled to coverage for the higher limits maintained by the CONSULTANT. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY.

Notice of cancellation. CONSULTANT agrees to oblige its insurance agent or broker and insurers to provide to CITY with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage.

Additional insured status. General liability policies shall provide or be endorsed to provide that CITY and its officers, officials, employees, and agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies.

Prohibition of undisclosed coverage limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to CITY and approved of in writing.

Separation of insureds. A severability of interests provision must apply for all additional insureds ensuring that Consultant’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer’s limits of liability. The policy(ies) shall not contain any crossliability exclusions.

Pass through clause. CONSULTANT agrees to ensure that its subconsultants, subcontractors, and any other party involved with the project who is brought onto or involved in the project by CONSULTANT, provide the same minimum insurance coverage and endorsements required of CONSULTANT.

CONSULTANT agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. CONSULTANT agrees that upon request, all agreements with consultants, subcontractors, and others engaged in the project will be submitted to CITY for review.

CITY’s right to revise specifications. The CITY reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving the CONSULTANT ninety (90) days advance written notice of such change. If such change results in substantial additional cost to the CONSULTANT, the CITY and Consultant may renegotiate CONSULTANT’S compensation.

Self-insured retentions. Any self-insured retentions must be declared to and approved by CITY. CITY reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by CITY.

Timely notice of claims. CONSULTANT shall give CITY prompt and timely notice of claims made or suits instituted that arise out of or result from CONSULTANT’S performance under this AGREEMENT, and that involve or may involve coverage under any of the required liability policies.

Additional insurance. CONSULTANT shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2

EXHIBIT C

PROFESSIONAL CONSULTANT SERVICE

CITY OF GROVER BEACH

DISCLOSURE OF CONFLICT OF INTEREST
Explanation: Signature

Date
Name

Company
Address

Additional page(s) attached. City, State, Zip
YES* NO
1 Are you currently in litigation with the City of Grover Beach or any of its agents?
2 Do you represent any firm, organization or person who is in litigation with the City of Grover Beach?
3 Do you currently represent or perform work for any clients who do business with the City of Grover Beach?
4 Are you or any of your principals, managers or professionals, owners or investors in a business which does business with the City of Grover Beach, or in a business which is in litigation with the City of Grover Beach? 5 Are you or any of your principals, managers or professionals, related by blood or marriage to any City of Grover Beach employee who has any significant role in the subject matter of this service? 6 Do you or any of your subcontractors have, or expect to have, any interest, direct or indirect, in any other contract in connection with this Project? * If the answer to any question is yes, please explain in full below.

Docusign Envelope ID: 1F1D20ED-692B-4D1C-A94F-715824BB07E2 X
na
11/4/2024
Willdan Engineering
374 Poli St Suite 101
X
X
X
Ventura CA 93001
Vanessa Munoz
X
X
Agenda Item No. 8

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: November 12, 2024 FROM: Matthew Bronson, City Manager
PREPARED BY: Nick Szamet, Administrative Services Director SUBJECT: FY 2024-25 First Quarter Financial Review

RECOMMENDATION
Receive and file the FY 2024-25 First Quarter Financial Review.

BACKGROUND
General Fund
The City Council adopted the budget for FY 2024-25 on June 24, 2024, which includes a General Fund budget of $18,435,020. The adopted General Fund budget assumes revenues and transfers-in of $18,480,020 leading to a projected surplus of $45,000 with ending reserves equivalent to 31% of operating expenditures. This first quarter report covers revenue and expenditure activity in the beginning of FY 2024-25 from July-September 2024 for both the General Fund and the two Enterprise Funds (Water and Wastewater). This report is provided for financial transparency though staff would note that broader trends are difficult to determine from only the first quarter of the fiscal year.

Overall, over the first quarter General Fund revenues are aligned with expectations. The first quarter of the fiscal year is slow to recognize revenues as payments for taxes occur at later periods in the fiscal year. Table 1 shows the total revenue for City’s top five General Fund revenue sources compared to first quarter FY 2023-24 (prior year).

Table 1
FY 2024-25 FY 2023-24
Activity Q1 Budget Activity Q1 Year-End
Actual
Sales Tax 445,201 6,710,000 424,494 5,733,277
Property Tax 130,096 5,949,000 23,634 5,859,025
Cannabis Tax 166,043 1,224,000 141,313 1,066,489
Franchise Fees 74,127 947,000 151,985 718,906
Transient Occupancy Tax 203,778 1,186,000 208,850 953,685 Total 1,019,245 16,016,000 950,276 14,331,382
Sales Tax – Sales tax reported in the first quarter is $20,707 higher when compared to the first quarter in the prior year. Sales tax revenue for the first quarter represents revenue collected for one month only (July 2024) as there is a two-month delay.

Property Tax- Property taxes are due November 1 and February 1, therefore property tax revenue collected in the first quarter is minimal. Property tax revenue overall is following past years’ Staff Report: FY 2024-25 First Quarter Financial Review Page 2 November 12, 2024

historical trends. However, there was a jump in Current Unsecured Property Taxes which can be attributed to personal property such as boats and airplanes or business machinery. This is unlikely to affect larger secured property taxes associated with real estate.

Cannabis Tax – Cannabis tax collected in the first quarter is slightly higher than last fiscal year by approximately $24,000. This is likely owing to additional retailers opening within the City, although there remain uncertainties for the industry statewide.

Transient Occupancy Tax (TOT) – TOT revenue for the first quarter is slightly less than prior year by $5,072. However, staff anticipates this gap to be eliminated once any pending receipts from hotel operators or STRs are collected and accrued to appropriate accounting period.

Franchise Fees – Franchise fees for the first quarter are $77,858 lower than the prior year. This is largely owing to timing and receipt of payment. It is anticipated revenues will be aligned with budget targets by the mid-year report in February 2025.

A more detailed estimate of City revenues will be presented with the mid-year budget review and included in the updated five-year financial forecast presented to the Council in February 2025 in preparation for the upcoming FY 2025-27 budget development process.

Turning to expenditures, departments are on track with 25% expended in the first quarter of the fiscal year. There are overages in Non-Departmental accounts and in the Public Works and Police departments. Non-Departmental accounts regularly have higher expenses in the beginning of the year, due to upfront payment of insurance premiums for the entire fiscal year. The Public Works and Police departments have expended more than anticipated on vehicle maintenance costs due to staffing-related challenges which have required Public Works to utilize third-party vehicle maintenance. The Administrative Services Department will work with these departments to reconcile the vehicle maintenance budget during the mid-year budget process.

Table 2

ACTUAL ANNUAL
BUDGET REMAINING %
Non-Departmental 1,513,895 5,252,430 3,738,535 71%
City Manager's Office 437,908 1,815,519 1,377,611 76%
Administrative Services Department 95,318 647,581 552,263 85% Community Development Department 263,073 1,275,685 1,012,612 79% Public Works 412,880 1,556,801 1,143,921 73%
Police Department 1,635,382 6,962,264 5,326,882 77%
Total 4,358,456 17,510,280 13,151,824 75%
Water Fund
Water Fund revenues were $1,369,146 for the first quarter or $300,000 more than projected.

However, this additional revenue is largely due to the one-time payment to the City from the Central Coast Blue Recycled Water Project Joint Powers Authority for the City’s share of property acquisition costs following the City’s withdrawal from the project. Operating expenditures for the Water Fund are aligned with expectations with 73% of budget remaining, which includes an annual payment for insurance, a semi-annual payment made to the County for the Lopez Lake water contract, and debt service payment for the water revenue bonds. Capital project Staff Report: FY 2024-25 First Quarter Financial Review Page 3 November 12, 2024

expenditures are higher due to carryover of the Water Tank Rehab Project and expenditures occurring largely in this fiscal year, although budgeted in the prior year.

Wastewater Fund
Wastewater Fund revenues for the first quarter are on track as compared to this time in FY 2023-

24. Expenditures are below budget for the first quarter with only 19% expended to date. This is mainly due to capital projects that are scheduled to start later this fiscal year pending available revenues along with transfers-out that are reconciled and accounted for annually as a year-end adjustment. Operating expenditures that include salaries and benefits along with supplies and services are on track to meet budgeted expenditures.

FISCAL IMPACT
There is no fiscal impact from receiving this report.

ALTERNATIVES
The Council has the following alternatives to consider:

1. Receive and file the FY 2024-25 First Quarter Financial Review; or

2. Provide alternative direction to staff

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

Agenda Item No. 9
$3.6

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: November 12, 2024 FROM: Matthew Bronson, City Manager
PREPARED BY: Nick Szamet, Administrative Services Director SUBJECT: South County Sanitary Service Rate Increase Request and Approval of Proposition 218 Noticing

RECOMMENDATION
Review the Integrated Solid Waste Collection Rate Adjustment request to adjust the waste collection services rates for January 1, 2025 and each January 1 from 2026 through 2029 and approve the Proposition 218 noticing process for holding a public hearing on January 27, 2025.

BACKGROUND
The City has had a Franchise Agreement with South County Sanitary Service (SCSS), a subsidiary of Waste Connections, for collection, diversion and disposal of solid waste in the City since 1997. On June 10, 2008, a new Solid Waste Collection Franchise Agreement with SCSS was approved and the Franchise Agreement was subsequently amended twice in 2016.

Through the terms of the Franchise Agreement, SCSS is entitled to compensation for its “labor, equipment, materials and supplies, taxes, insurance, bonds, overhead, transfer and transport, processing, division, disposal, provide and all other things necessary to perform all of the services required by [the] Agreement.” This compensation is received through the rates and charges paid by the City’s customers, which are presented to the City through cost-based rate adjustment applications and reviewed by the City Council through the Proposition 218 process.

Per the Franchise Agreement, rates are reviewed in accordance with the “City of San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates” which was originally established in 1994 (1994 Rate Manual). The 1994 Rate Manual allows for a cost-based rate adjustment every three years and interim rate adjustments in the other two years. In interim rate periods, the operator is limited to adjustments based on inflation, tipping fee adjustments, and franchise or regulatory fee changes. During cost-based rate adjustment years, SCSS is able to request adjustments due to changes in other operational costs as set forth in the 1994 Rate Manual.

In the region, the largest franchise agencies are the City of San Luis Obispo and Los Osos Community Services District (CSD) with both served by San Luis Garbage, also a subsidiary of Waste Connections. San Luis Obispo and Los Osos have been working with Waste Connections to develop and implement a new rate adjustment methodology to replace the 30-year-old Rate Manual. The key objectives for a new rate adjustment methodology are to enhance rate stability, predictability, fairness, transparency, ease of administration, and cost-effectiveness. The City of San Luis Obispo contracted with R3 Consulting Group, Inc. (R3) to support development and negotiation of a new rate adjustment methodology and the new rate adjustment methodology is available for consideration by other public agencies in San Luis Obispo County. The City of Grover Staff Report: South County Sanitary Service Rate Request and Proposition 218 Noticing Page 2 November 12, 2024
Beach has been following the development of the new rate adjustment methodology, which will be presented to the Council as an amendment to the agreement with SCSS as part of a January 27, 2025 public hearing regarding the 2025 rate adjustment.

The City of San Luis Obispo also contracted with R3 to conduct a detailed review of the 2025 cost-based rate applications submitted by Waste Connections to 10 agencies in San Luis Obispo County, including the City of Grover Beach. The City of Grover Beach received an initial rate adjustment request from SCSS on July 3, 2024, for an adjustment to the City’s solid waste rates of 3.97% effective January 1, 2025. After R3’s review, and adjustments necessary for effectuation of the new rate methodology and new regional service enhancements, the recommended 2025 rate adjustment is 5.02% with CPI adjustments beginning in 2026. Below is further information about this rate adjustment request.

Review of 2025 Rate Adjustment Request
R3 completed a thorough review of SCSS’ 2025 cost-based rate adjustment application and adjustments necessary for the new recommended rate adjustment methodology. After careful review of the rate adjustment request, and the outcomes of negotiations of a new rate adjustment methodology between the City of San Luis Obispo and Waste Connections, R3 completed a report evaluating the 2025 rate adjustment request and the new rate methodology shown in Attachment 1. R3’s review suggests that the original 3.97% adjustment effective January 1, 2025, is justifiable in accordance with the 1994 Rate Manual and may be accepted by the City in the event that the City does not adopt the new rate adjustment methodology. However, R3’s report further recommends the new rate adjustment methodology and the corresponding rate adjustment of 5.02%, which will provide key benefits to the City in terms of rate predictability and stability and new enhanced services as outlined below.

Regional Service Enhancements
As part of the proposed service level agreement changes, residents can expect the several enhancements to service offered to the City of Grover Beach. • Customer Assistance Program (CAP): 20% low-income discount provided to residential customers using 32-gallon cart service, using existing jurisdictional practices on lowincome relief for their offered utility type services with evidence of qualifying financial hardship. In the City’s case, verification would be based on existing enrollment in lowincome utility subsidy programs including the City’s CAP and PG&E CARE program. • Free Bulky Waste Collections: Collection of a bulky waste item twice annually from residential accounts at no cost via bi-annual clean-up weeks. • Annual Cart Exchange: Once annual exchange of a residential solid waste, recycling, or organics cart per customer account.

New Rate Adjustment Methodology
The City of San Luis Obispo, in its capacity as the lead agency on the solid waste rate adjustment methodology update process, and in partnership with Los Osos CSD and Waste Connections, completed negotiations and arrived at tentative agreement with Waste Connections regarding the terms and conditions of a new methodology. The outcome was the result of extensive good faith negotiations between the City and Waste Connections, with due consideration to input provided by other public agency stakeholders, including the City of Grover Beach.

Staff Report: South County Sanitary Service Rate Request and Proposition 218 Noticing Page 3 November 12, 2024

Pending City Council approval, the new methodology will replace the 1994 Rate Manual and will regulate annual rate adjustments for the City’s solid waste rates starting in 2025. The new methodology fulfills key objectives including rate stability, predictability, fairness, transparency, ease of administration, and cost-effectiveness. Additionally, the new methodology can be applied on a regional scale and is available as recommended alternative to the 1994 Rate Manual for all agencies, including the City of Grover Beach.

The proposed adjustments will increase the rates for customers within Grover Beach by 5.02% whereas using the 1994 Methodology would increase rates by 3.97%. The tradeoff for enhanced services is 1.05% relative to current rates. This approximate 5% increase is a similar increase as proposed in both Arroyo Grande and Pismo Beach. This request will be presented to the Arroyo Grande City Council on November 12 and to the Pismo Beach City Council in January 2025.

Proposition 218 Noticing
Per the provisions of Proposition 218, all property owners receiving solid waste collection services will receive written notice by mail at least 45 days prior to the Council consideration of approving solid waste rate adjustments. The notice will include the amount of the fee, the basis on which the fee was calculated and the date, time and place of the public hearing and must clearly advise of the right to protest the rate adjustment. Staff would reiterate that the solid waste fee is from Waste Connections not the City though our franchise agreement requires Council action after a Proposition 218 noticing process and public hearing.

Staff recommends that the Council set the public hearing for January 27, 2025, and direct staff to ensure that notices are provided by Waste Connections to affected property owners of the proposed rate adjustments stated in the following table in compliance with Proposition 218. A summary of changes in residential rates at the 5.02% rate adjustment is shown in the table below.

Service Description
Current
Monthly
Rate
Effective
1/1/2024
Proposed
Rate
Adjustment
Proposed
Monthly
Rate
Effective
1/1/2025
32 Gallon Waste
Wheeler $24.23 $1.22 $25.45
64 Gallon Waste
Wheeler $32.74 $1.64 $34.38
96 Gallon Waste
Wheeler $41.23 $2.07 $43.30
Pending Council’s action approval to move forward with the Proposition 218 noticing, the following timeline will be used to move the rate increase forward working with Waste Connections. • November 29, 2024 – Deadline for mailing the 45-day public hearing notice in compliance with Proposition 218.
• January 27, 2025 – Conduct a public hearing to consider protests regarding the proposed rate adjustments identified in the Proposition 218 hearing notice. • January 1, 2025 – If approved, new rates go into effect. The rate adjustment will be prorated to the beginning of the calendar year.

Staff Report: South County Sanitary Service Rate Request and Proposition 218 Noticing Page 4 November 12, 2024

FISCAL IMPACT
Upon approval, the updated rate structure will result in an additional $14,000 per year in franchise fees collected by the City from Waste Connections.

ALTERNATIVES
The Council has the following alternatives to consider:

1. Review the Integrated Solid Waste Collection Rate Adjustment request; and 2) Set a public hearing for January 27, 2025 to consider adjusting the waste collection services rates for January 1, 2025 and each January 1 from 2026 through 2029; or

2. Provide alternate direction to staff.

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

Attachments

1. New Solid Waste Rate Adjustment Methodology

2. Proposition 218 Notice
REPORT
City of San Luis Obispo and Participating Agencies
Submitted electronically on October 22, 2020
Submitted electronically: November 1, 2024
New Solid Waste Rate Adjustment
Methodology and 2025 Rates
Attachment 1
1512 Eureka Road, Suite 220, Roseville, CA 95661 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com November 1, 2024
Ms. Meg Buckingham
Solid Waste and Recycling Coordinator
Public Utilities
879 Morro, San Luis Obispo, CA 93401
submitted via email: [email protected]
SUBJECT: New Solid Waste Rate Adjustment Methodology and 2025 Rates Dear Ms. Buckingham and Participating Agencies,
R3 Consulting Group, Inc. (R3) was engaged by the City of San Luis Obispo (City) to provide solid waste consulting services via two engagements supporting the City’s negotiations of a new solid waste services agreement with Waste Connections, the solid waste hauler. R3 was originally engaged by the City to work in collaboration with Los Osos Community Services District and Waste Connections to update the methodology for annual adjustments to the solid waste rates charged by Waste Connections. The key objectives for updating the rate adjustment methodology were to enhance rate stability, predictability, fairness, transparency, ease of administration, and costeffectiveness.

As that engagement proceeded, eight other agencies in San Luis Obispo County (the City of Arroyo Grande, the City of Grover Beach, the City of Pismo Beach, Avila Beach Community Services District, Cambria Community Services District, Cayucos Sanitary District, Nipomo Community Services District, and Oceano Community Services District – altogether “Participating Agencies” or “Agencies”) were included as stakeholder participants in the development of new rate adjustment methodology. With the inclusion of these additional Agencies, objectives for the engagement were updated to include regional scale applicability of the new rate adjustment methodology. R3 was then engaged by the City to review Waste Connections’ rate adjustment requests for the 2025 rate year on behalf of all ten Agencies with the objective of determining 2025 solid waste rates that would an appropriate starting point for a new rate adjustment methodology starting in 2026.

The City of San Luis Obispo served as the lead contracting agency for both engagements, providing primary oversight and direction of R3’s work. Input and feedback were also sought from the other nine Agencies, and the results reflect their stakeholder input. Ultimately, the outcomes of both engagements are the conclusion of good faith contract negotiations between the City and Waste Connections. In summary, the City and Waste Connections have tentatively agreed to updated terms and conditions for annual rate adjustment which fulfill key objectives while also securing enhanced services that will protect low income households, prevent illegal dumping, and clean solid waste collection containers. The new rate adjustment methodology and enhanced services also resulted in updated adjustments to solid waste rates for 2025.

The City intends to recommend a new agreement with Waste Connections to the City Council that will include the new rate adjustment methodology and enhanced services along with the 2025 adjustments to solid waste rates. In keeping with the objective for the results to be applicable on a regional scale, Waste Connections is willing to offer the new rate adjustment methodology and 1512 Eureka Road, Suite 220, Roseville, CA 95661 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com select enhanced services to the other nine Agencies at the updated 2025 adjustments to solid waste rates.

R3 would like to recognize that this has been a significant undertaking, and we’d like to thank the City of San Luis Obispo, Waste Connections, Los Osos Community Services District, and Participating Agencies for your involvement in providing feedback during this process. In closing, R3 recommends City and stakeholder consideration of the revised 2025 rates and the new rate adjustment methodology as a means of achieving shared rate fairness, stability, and predictability objectives. Here’s what Waste Connections has shared regarding the outcomes:
“San Luis Garbage (SLG) had the opportunity to negotiate with the City of San Luis Obispo on the re-write of the 1994 rate-making manual. The goal of this endeavor was to simplify and streamline the rate-making process for all parties and provide an improved model going forward for potential refuse collection rate changes. The process included a considerable amount of discussion and analysis and although arduous at times, SLG feels the negotiations were performed in good faith, were collaborative in nature and carried out with mutual respect. In addition to updating the rate-making methodology, both parties took the opportunity to establish some new service enhancements that will discourage illegal dumping, provide cart cleaning exchanges, and offer rate relief for low-income customers. SLG believes the outcome of the negotiation has provided a much-improved rate-review process for the City of San Luis Obispo and other cities currently under the old rate-making methodology which will ultimately allow for an easier path to fair and reasonable rates for all customers.” * * * * * * *
We appreciate the opportunity to be of service to the City and would like to thank the City and the Participating Agencies for their involvement and feedback. We would also like to recognize Waste Connections staff for being communicative and responsive to requests for information during the process.

Sincerely,
Garth Schultz | Principal
R3 Consulting Group, Inc.
510.292.0853 | [email protected]

TABLE OF CONTENTS
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates TOC

1. Executive Summary
page 1

2. Background
page 4

3. New Solid Waste Rate Adjustment
Methodology and 2025 Rates
page 10
Attachments
1 Summary of Original 2025 Base Year Rate Adjustments
2 Revised 2025 Rate Adjustments
3 CPI-U for Garbage and Trash
4 Example Rate Calculations for 2026 through 2029

1. EXECUTIVE SUMMARY
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 1 of 19 New Rate Adjustment Methodology
The City of San Luis Obispo, in its capacity as the lead agency on the solid waste rate adjustment methodology update process, and in partnership with Los Osos Community Services District and Waste Connections, completed negotiations and arrived at tentative agreement with Waste Connections regarding the terms and conditions of a new methodology. The outcome was the result of extensive good faith negotiations between the City and Waste Connections, with due consideration to input provided by other public agency stakeholders.

Pending City Council approvals, the new methodology will replace the 1994 Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates (1994 Rate Manual) and will regulate annual rate adjustments for the City’s solid waste rates starting in 2026.

The new methodology fulfills key objectives established by the City and Waste Connections, including rate stability, predictability, fairness, transparency, ease of administration, and cost-effectiveness.

Additionally, in response to requests by other Agencies that contract with Waste Connections in San Luis Obispo County, the new methodology can be applied on a regional-scale and is available as recommended alternative to the 1994 Rate Adjustment Manual for those Agencies.

The key features of the new methodology include:
》 CPI Adjustments: Starting in 2026, rate adjustments will be based on the Garbage and Trash CPI, with a floor of 2% and a cap of 5%. Amounts under 2% or over 5% will carry forward. The CPI adjustment will apply to Waste Connections’ collection and post-collection cost centers. 》 Revenue Balancing Mechanism: Starting in 2027, adjustments to rates will account for shortfalls or surpluses in Waste Connections’ actual revenues compared to projected revenues from prior years. For example, if Waste Connections’ 2025 revenues exceed projections, the amount of surplus revenues will be credited to the rates in 2027 (and vice versa), achieving fairness in compensation and rates for the company and for ratepayers. Such adjustments would take place annually and will be independent of the CPI cap and floor noted above (there is no cap on these amounts).
》 Less Frequent Cost-Based Adjustments: Currently, solid waste rates are adjusted based on the 1994 Rate Adjustment Manual every three years on Waste Connections’ costs. Via the new methodology, cost-based adjustments would occur a maximum of every five years, and only if requested by Waste Connections or the City. The first opportunity for a cost-based adjustment will be for the 2030 rate year. If neither Waste Connections nor the City request a cost-based adjustment, then the CPI adjustment approach will be applied. Cost-based adjustments will be based on Waste Connections’ consolidated audited financial statements for the region.

Timeframes for cost-based adjustment application and review process will be ample, such that the City will have sufficient time for review and approval processes and such that the potential for delay in implementation is minimized. These timeframes will be delineated in the forthcoming amendment to the agreement with Waste Connections.
》 Updated Depreciation Lifespan for Trucks: The 1994 Rate Manual set a 7-year depreciation schedule for solid waste collection trucks. Modern solid waste collection trucks have a 10-year lifespan, and the depreciation schedule was adjusted accordingly. 》 Updated Profit Allowance: The 2025 rate adjustment will include a 9% profit allowance of projected collection costs and in 2026 and thereafter the profit allowance will be 10%. The updated profit allowance is in-keeping with industry standard ranges for solid waste services. For Executive Summary
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 2 of 19 context, the 2025 profit allowance is approximately 5% of revenues and we estimate that the 2026 profit allowance will be approximately 5.5% of revenues. Profit will not be allowed on postcollection costs. 》 Removed Limitation on Corporate Overhead: The 1994 Rate Manual placed a limitation on corporate overhead costs. Today, corporate overhead costs fund legal, tax, payroll, human resources, engineering, compliance, IT, training and recruiting programs. The City and Waste Connections agreed to remove the prior limitation in order to fund these services. In the nearterm, compensation to Waste Connections for corporate overhead will be limited by the CPI adjustment noted above. Cost-based adjustments to corporate overhead are possible in 2030, and will be subject to review, justification, and potential limitation at that time. 》 Extraordinary Adjustments: The California Air Resources Board (CARB) Advanced Clean Fleets (ACF) regulation is requiring all solid waste collection trucks to have zero emissions by 2042. This includes a phased in plan to get the percentage of the fleet to be zero emission vehicle (ZEV) with 10% by 2030, 25% by 2033, 50% by 2036,75% by 2039 and 100% by 2042.

During CPI Adjustment years, Waste Connections may request extraordinary rate adjustments due to changes in law affecting collection operations, including for compliance with CARB’s ACF zero emission mandate (which may necessitate change to depreciation schedules). The City may, but is not obligated to, consider requests for extraordinary rate adjustments due to changes in law affecting post-collection operations. Requests for extraordinary change are subject to good faith negotiations between City and Waste Connections.

New Service Enhancements
During negotiations, the City and Waste Connections also took the opportunity to establish new service enhancements that will discourage illegal dumping, provide cart cleaning exchanges, and offer rate relief for low-income customers. The below service enhancements are available to the other Agencies that approve the new rate adjustment methodology in association with adjusted 2025 solid waste rates:
》 Customer Assistance Program: 20% low-income discount provided to residential customers using 32-gallon cart service, using existing jurisdictional practices on low-income relief for their offered utility type services with evidence of qualifying financial hardship. 》 Free Bulky Waste Collections: Collection of a bulky waste item twice annually from residential accounts at no separate cost, via clean-up week or voucher program depending on existing program.
》 Annual Cart Exchange: Once annual exchange of a residential solid waste, recycling, or organics cart per customer account.
2025 Rate Adjustments
As a result of the above, Waste Connections’ 2025 rate adjustment request was revised from a 9.29% increase to a 9.89% increase in solid waste rates, effective January 1, 2025 (and prior to other rate structure adjustments that the City and Waste Connections may enact). When the new rate methodology changes and service enhancements are equally applied to the other regional Agencies, the results are as shown in Table 1 on the following page. Additional details are included in Section 3 of this report.

Executive Summary
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 3 of 19 Table 1: 2025 Rate Adjustments
Agency Original Revised
City of San Luis Obispo 9.29% 9.89%
City of Arroyo Grande 3.97% 4.92%
Los Osos CSD 12.47% 13.18%
City of Pismo Beach 3.97% 4.82%
Cambria CSD 12.78% 12.59%
City of Grover Beach 3.97% 5.02%
Nipomo CSD 3.23% 5.04%
Oceano CSD 3.76% 4.98%
Cayucos SD 12.47% 14.32%
Avila Beach CSD 3.97% 4.60%

2. BACKGROUND
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 4 of 19 1994 Rate Manual
The 1994 Rate Manual is a 120-page document that provides step-by-step directives regarding annual adjustments to solid waste rates in the City. Though the 1994 Rate Manual specifically references the City of San Luis Obispo, other agencies in San Luis Obispo County (including the nine Agencies referenced in this report) also follow the 1994 Rate Manual for annual adjustments to solid waste rates.

The 1994 Rate Manual established a three-year cycle for adjustments to solid waste rates. The first year of each three-year cycle (called a “base year”) adjusted rates based on the documented costs of providing solid waste services. In the second and third years, solid waste rates were adjusted in accordance with external indicators, such as the Consumer Price Index (CPI).

While the 1994 Rate Manual was an appropriate approach to annually adjusting solid waste rates at the time, changing regulatory conditions and modern best practices in solid waste rate setting indicate that the prior approach has outlived its usefulness. In particular, cost-based adjustments on a fixed three-year cycle are no longer the industry norm. Most solid waste rate adjustment methodologies in California today either do not include regular cost-based adjustments or do so less frequently. When allowed, cost-based adjustments are typically the result of extraordinary changes in cost due to factors like changes in law or other uncontrollable factors (such as China’s National Sword Policy in 2017 and the COVID pandemic in 2020). Additionally, step-by-step instructions and timelines in the 1994 Rate Manual are outdated and do not contemplate current approaches to public noticing, public hearings, and review timelines for authorizing rate adjustments.

RFQ for New Rate Adjustment Methodology
Recognizing the limitations of the 1994 Rate Manual, the City and Los Osos Community Services District issued a request for quotes (RFQ) in early 2024 seeking a consultant to develop a new rate adjustment methodology. Pursuant to the RFQ process, R3 was awarded an agreement to provide support in developing a new rate adjustment methodology.

Rate Adjustment History
Rate adjustments experienced by the City and participating Agencies have varied significantly in the prior ten years from 2015 through 2014, as shown in Table 2, on the following page. As shown in the table, rate adjustments by agency have varied from 0% (most Agencies in 2015) to over 20% (most Agencies in 2022).

There are important reasons for these variances, primarily related to the unfunded State mandates of SB 1383 (Short-lived Climate Pollutants Act) which required all agencies in California to implement programs to recover and recycle organic waste to reduce methane emissions from landfills. While rate adjustments were necessary to fund the required SB 1383 programs, the combination of new costs with the three-year cost-based adjustment approach in the 1994 Rate Manual resulted in rate adjustment spikes in 2016, 2019, and 2022. Overall, across the Agencies, the average annual rate adjustment from 2015 through 2024 has been 6.76%.

One important objective of the new rate adjustment methodology is to minimize the recurrence of such spikes by reducing the frequency of cost-based rate adjustments. From R3’s experience implanting new rate methodologies with other clients, the result has been stable and predictable annual rate adjustments.

Background
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 5 of 19 Table 2: 2015 – 2024 Rate Adjustments by Agency
Agency 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 City of San Luis
Obispo 0.00% 5.25% 1.00% 1.60% 13.70% 1.70% 0.70% 17.75% 9.10% 3.00% City of Arroyo
Grande 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00% Los Osos CSD 2.00% 10.37% 1.00% 1.60% 25.74% 1.70% 0.70% 41.87% 7.70% 2.70% City of Pismo Beach 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00% Cambria CSD 1.92% 9.93% 1.00% 1.60% 25.32% 1.70% 0.70% 41.50% 9.10% 3.00% City of Grover
Beach 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00% Nipomo CSD 0.00% 0.00% 1.00% 1.60% 15.08% 1.70% 0.70% 21.27% 9.10% 3.00% Oceano CSD 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 21.03% 9.10% 3.00% Cayucos SD 2.00% 27.39% 1.00% 1.60% 26.43% 1.70% 0.70% 43.30% 9.10% 3.00% Avila Beach CSD 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00% Financial Statement History
There are three Waste Connections business units serving the ten participating Agencies (San Luis Garbage, Mission Country Disposal, and South County Sanitary Service). Each business unit prepares annual audited financial statements which are used as the basis for base year rate applications to the Agencies. R3 analyzed Waste Connections’ audited financial statements for the six years from 2018 through 2023 to evaluate profit achievement, with the results summarized in Table 3, below. Table 3 also includes estimated profit achievement in 2024 (still underway) and for 2025 (prior to 2025 rate adjustments).

Table 3: 2018 – 2023 Profit Achievement
Business Unit 2018 2019 2020 2021 2022 2023 2024 2025
San Luis Garbage -13.84% -16.84% -9.66% -3.41% 12.47% 6.30% -0.64% -6.62% Mission Country Disposal -19.26% -30.77% -9.28% -19.84% -10.21% 2.47% -4.09% -8.95% South County Sanitary Service 5.38% 1.40% 0.25% -5.56% 5.93% 15.85% 8.43% 2.38% Overall -7.22% -12.45% -5.22% -7.88% 4.66% 9.67% 2.61% -3.16% Background
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 6 of 19 As shown in Table 3, in total across all three business units, Waste Connections operated without any net income between 2018 and 2021, with net positive profitability being achieved in 2022 and 2023. Profit achievement varied by business unit, with South County Sanitary Service consistently experiencing greater profit achievement and Mission Country Disposal consistently experiencing lesser or no profit achievement. This is one of the key reasons that rate adjustments for the Agencies served by Mission Country Disposal (Cambria Community Services District, Cayucos Sanitary District, and Los Osos Community Services District) were higher than the other Agencies in 2019 and 2022.

Table 3 also shows that projected profit achievement in 2024 will be lower than 2023, which is primarily the result of Waste Connections incurring increased landfill disposal costs (provided by a related party) and increased organics processing costs (provided by a non-affiliated third party processor). Projected profit achievement for 2025 – which, importantly, is prior to 2025 adjustments to solid waste rates – demonstrates no net profit for San Luis Garbage and Mission County Disposal and low net income for South County Sanitary Service. Overall, without adjustments to rates, Waste Connections service to the Agencies in 2025 will not yield net income.

It should be noted that Waste Connections allocates costs between business units based on allocation metrics that include vehicle operating hours, number of solid waste containers, and number of customer accounts. While such metrics are useful means of allocating costs, they do not necessarily represent the exact cost of providing service within a given business unit.

Rate Comparison
R3 compared current 2024 solid waste rates for the Agencies to rates in other jurisdictions in San Luis Obispo County, Santa Barbara County, and Monterey County. The results are shown in Table 4, below and on the following page, and are organized in ascending order by 32-gallon monthly rate (common residential subscription level).

Table 4: Regional Comparison of Monthly Rates
Agency 20 Gallon 32 Gallon 64 Gallon 96 Gallon 2 Cubic
Yards
Oceano CSD N/A $20.37 $29.31 $57.39 $128.75
San Luis Obispo $14.74 $23.53 $47.06 $70.59 $185.21
Pismo Beach N/A $23.76 $47.56 $71.33 $166.02
Grover Beach N/A $24.23 $32.74 $41.23 $147.95
Arroyo Grande N/A $27.33 $35.52 $43.73 $167.65
Nipomo CSD N/A $27.57 $39.52 $51.81 $136.62
Avila Beach CSD N/A $28.31 $46.78 $65.24 $177.68
Santa Barbara County Zone 4 Lompoc N/A $31.41 $36.13 $40.70 $179.98 Cayucos SD N/A $32.60 $38.52 $44.48 $184.32
Santa Barbara County Zone 5 N/A $33.03 $37.84 $42.46 $192.87 City of Atascadero N/A $33.67 $52.80 $66.35 $172.24
San Miguel N/A $34.13 $53.80 $72.88 $124.12
Santa Barbara County Zone 4 Santa Ynez N/A $34.33 $42.62 $50.77 $254.11 City of Morro Bay $22.21 $35.54 $71.07 $106.63 $265.30
Solvang N/A $36.28 $45.20 $54.69 $256.55
Background
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 7 of 19 Agency 20 Gallon 32 Gallon 64 Gallon 96 Gallon 2 Cubic
Yards
Goleta N/A $37.39 $41.88 $48.35 $240.10
Templeton N/A $38.73 $54.63 $60.41 $149.58
Los Osos CSD $27.74 $39.45 $60.57 $64.96 $228.72
Buellton N/A $40.51 $48.40 $56.38 $281.13
Cambria CSD N/A $41.52 $83.03 $124.55 $201.94
King City $32.43 $42.83 $53.68 $63.52 $288.00
Santa Barbara County Zone 2 N/A $43.25 $54.66 $65.92 $259.61 City of Paso Robles $38.15 $43.32 $57.42 $63.59 $188.36 Santa Barbara County Zone 3 N/A $45.22 $51.52 $57.75 $215.72 MRWMD $38.28 $46.54 $72.92 $91.20 $277.20
City of Santa Barbara N/A $48.26 $59.82 $71.38 $277.66
WM Area (Formerly Mid-State) N/A $48.72 $71.31 $93.84 $214.46 Santa Barbara County Zone 1 N/A $56.60 $62.86 $69.25 $256.74 Santa Maria N/A N/A $38.74 $47.87 $166.72
Table 4 demonstrates that solid waste rates for the City and other Participating Agencies compare favorably to others in the region. Charts 1 through 4, below and on the following pages, show the information from Table 4 in graphical format.

Chart 1: Regional Comparison of Monthly 32-gallon Cart Rates Chart 1, which is organized in ascending order of 32-gallon monthly rate, demonstrates that the rates for 32-gallon monthly service (the most subscribed residential service level) for all Participating Agencies $0
$10
$20
$30
$40
$50
$60
Oceano CSD
San Luis Obispo
Pismo Beach
Grover Beach
Arroyo Grande
Nipomo CSD
Avila Beach CSD
Santa Barbara County…
Cayucos SD
Santa Barbara County…
City of Atascadero
San Miguel
Santa Barbara County…
City of Morro Bay
Solvang
Goleta
Templeton
Los Osos CSD
Buellton
Cambria CSD
King City
Santa Barbara County…
City of Paso Robles
Santa Barbara County…
MRWMD
City of Santa Barbara
WM Area (Formerly Mid-…
Santa Barbara County…
Santa Maria
Background
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 8 of 19 other than Cambria Community Services District, Cayucos Sanitary District, and Los Osos Community Services District are the lowest in the region. Chart 2 shows how 64-gallon monthly rates compare.

Chart 2: Regional Comparison of Monthly 64-gallon Cart Rates Chart 3: Regional Comparison of Monthly 96-gallon Cart Rates $0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Oceano CSD
San Luis Obispo
Pismo Beach
Grover Beach
Arroyo Grande
Nipomo CSD
Avila Beach CSD
Santa Barbara County…
Cayucos SD
Santa Barbara County…
City of Atascadero
San Miguel
Santa Barbara County…
City of Morro Bay
Solvang
Goleta
Templeton
Los Osos CSD
Buellton
Cambria CSD
King City
Santa Barbara County…
City of Paso Robles
Santa Barbara County…
MRWMD
City of Santa Barbara
WM Area (Formerly Mid-…
Santa Barbara County…
Santa Maria
$0
$20
$40
$60
$80
$100
$120
$140
Oceano CSD
San Luis Obispo
Pismo Beach
Grover Beach
Arroyo Grande
Nipomo CSD
Avila Beach CSD
Santa Barbara County…
Cayucos SD
Santa Barbara County…
City of Atascadero
San Miguel
Santa Barbara County…
City of Morro Bay
Solvang
Goleta
Templeton
Los Osos CSD
Buellton
Cambria CSD
King City
Santa Barbara County…
City of Paso Robles
Santa Barbara County…
MRWMD
City of Santa Barbara
WM Area (Formerly Mid-…
Santa Barbara County…
Santa Maria
Background
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 9 of 19 Charts 3 and 4 keep the same ordering as Charts 1 and 2 and show how large residential 96-gallon service and commercial two (2) cubic yard bin service compare with the region. Overall, while exceptions exist, rates for solid waste service for the City and the Participating Agencies are among the lowest in the region, including San Luis Obispo County, Santa Barbara County, and Monterey County.

Chart 4: Regional Comparison of Monthly 2 Cubic Yard Rates $0
$50
$100
$150
$200
$250
$300
$350
Oceano CSD
San Luis Obispo
Pismo Beach
Grover Beach
Arroyo Grande
Nipomo CSD
Avila Beach CSD
Santa Barbara County…
Cayucos SD
Santa Barbara County…
City of Atascadero
San Miguel
Santa Barbara County…
City of Morro Bay
Solvang
Goleta
Templeton
Los Osos CSD
Buellton
Cambria CSD
King City
Santa Barbara County…
City of Paso Robles
Santa Barbara County…
MRWMD
City of Santa Barbara
WM Area (Formerly Mid-…
Santa Barbara County…
Santa Maria

3. NEW RATE ADJUSTMENT METHODOLOGY
AND 2025 RATES
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 10 of 19 2025 Base Year Rate Adjustments
Waste Connections submitted base year rate applications to the Agencies for rates effective January 1, 2025.1 Those rate applications were prepared in accordance with the 1994 Rate Manual, with modification for an effectiveness date of January 1, 2025, instead of the October 1, 2024 date that otherwise would have been the effective date given strict adherence to the 1994 Rate Manual. In simple terms, the applications project future 2025 costs for providing solid waste services based on the actual costs of providing services as follows:
》 Actual results for the most recently completed year (2023), which are based on the audited financial statements.
》 Projected results for the current year (2024), which are to be based on year-to-date information available at the time the application is submitted.
》 Projected results for the next year (2025).

Adjustments to solid waste rates are then calculated based on the projected 2025 revenue requirement, which is the sum of:
》 Allowed costs.
》 Allowable operating profit.
》 Pass through costs.

In reviewing the 2025 base year rate applications for the Agencies, R3:
》 Checked calculations for mathematical accuracy and consistency. 》 Tied projected costs back to the 2023 audited financial statements. 》 Evaluated the root causes of extraordinary changes in cost for landfilling and organics processing.
》 Reviewed 2024 revenues year to date to determine accuracy of projected revenues at current rates for 2025.
》 Proposed adjustments to solid waste collection vehicle depreciation lifetimes.

A summary of Waste Connections’ original 2025 base year rate adjustments per the applications submitted to the Agencies is included as Attachment 1.

It should be noted that Waste Connections’ base year rate applications are made at the business unit level (San Luis Garbage, Mission Country Disposal, and South County Sanitary Service) with no allocation of projected costs to individual Agencies served by those business units. Rather, the base year rate adjustment applications use total costs and revenues for those business units to calculate rate adjustments for the individual Agencies. For the purposes of our analysis, and as documented in Attachment 1, R3 allocated projected expenses by agency in accordance with proportion of revenues – this allocation approach is what the base year rate application achieve in practice, and the result is an exact match to the rate adjustment calculations included in the base year rate applications for each agency.
1 Authorization of the January 1, 2025 rate adjustments are expected to occur after that date. Waste Connections will prorate adjustment amounts on customer bills to account for the timing difference.

New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 11 of 19 R3 thoroughly reviewed the figures included in the 2025 rate adjustment calculations, as well as supporting documentation requested of Waste Connections during the review process and found that Waste Connections’ rate applications were accurate and in accordance with the 1994 Rate Manual. The rate adjustments shown in Table 5 on the following page are the correct rate adjustments per the 1994 Rate Manual and are the default rate adjustments effective January 1, 2025, if the City and the Participating Agencies do not move forward with revisions to the 2025 rates in accordance with the new rate adjustment methodology.

Table 5: 2025 Rate Adjustments Per 1994 Rate Manual
Agency January 1, 2025, Default
Rate Adjustment
City of San Luis Obispo 9.29%
City of Arroyo Grande 3.97%
Los Osos CSD 12.47%
City of Pismo Beach 3.97%
Cambria CSD 12.78%
City of Grover Beach 3.97%
Nipomo CSD 3.23%
Oceano CSD 3.97%
Cayucos SD 12.47%
Avila Beach CSD 3.97%
Revisions for New Rate Adjustment Methodology
In negotiating the terms and conditions of a new rate adjustment methodology starting in 2026, the City and Waste Connections made the following revisions to the 2025 base year rate adjustments:

Updated Depreciation Lifespan for Trucks
The 1994 Rate Manual set a 7-year depreciation schedule for solid waste collection trucks. Modern solid waste collection trucks have a 10-year lifespan, and the depreciation schedule was adjusted by Waste Connections accordingly. Table 6, on the following page, shows the dollar magnitude of this change and the effect on the 2025 rate adjustment, with the effect being a reduction in the rate adjustment calculation ranging from 1.33% to 1.62%, depending on agency. Differences in effect by agency are the result of business unit allocations described earlier in this report.

New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 12 of 19 Table 6: Change in Depreciation Lifespan
San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
Original
Depreciation $1,338,367 $376,989 $295,515 $131,502 $398,063 $316,350 $236,919 $225,376 $114,616 $26,441 Revised
Depreciation 1,125,720 317,545 248,918 110,766 336,460 267,393 200,254 190,498 96,879 22,349 Change in
Calculations (212,647) (59,444) (46,597) (20,735) (61,603) (48,957) (36,665) (34,878) (17,737) (4,092) Effect on
Rate
Adjustment
-1.47% -1.62% -1.62% -1.62% -1.33% -1.33% -1.33% -1.33% -1.33% -1.33% Removed Limitation on Corporate Overhead
The 1994 Rate Manual placed a limitation on corporate overhead costs. Today, corporate overhead costs fund legal, tax, payroll, human resources, engineering, compliance, IT, training and recruiting programs.

The City and Waste Connections agreed to remove the prior limitation in order to fund these services.

Table 7, below, shows the effect of removing the prior limitation on corporate overhead. Differences in effect by agency are the result of different original proportionate amounts of corporate overhead between Agencies. In the near-term, compensation to Waste Connections for corporate overhead will be limited by the CPI adjustment noted above. Cost-based adjustments to corporate overhead are possible in 2030, and will be subject to review, justification, and potential limitation at that time.

Table 7: Change in Corporate Overhead
San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
Original
Corporate
Overhead
$246,296 $46,213 $36,226 $16,120 $93,625 $74,406 $55,724 $53,009 $26,958 $6,219 Revised
Corporate
Overhead
430,378 80,753 63,301 28,168 163,600 130,017 97,371 92,627 47,106 10,867 Change in
Calculations 184,082 34,540 27,075 12,048 69,975 55,611 41,648 39,619 20,148 4,648 Effect on Rate
Adjustment 1.28% 0.94% 0.94% 0.94% 1.51% 1.51% 1.51% 1.51% 1.51% 1.51% New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 13 of 19 50% Cost Share for Regional Service Enhancements
Waste Connections is offering new service enhancement to the benefit of the City and the Agencies including:
》 Collection of a bulky waste item twice annually from residential accounts at no cost, via clean-up week or voucher program depending on existing program.
》 Once annual exchange of a residential solid waste, recycling, or organics cart per customer account.

Waste Connections has estimated the annual cost of offering these service regionally and is proposing recovery of 50% of the projected costs via the 2025 rate adjustment. The City and Waste Connections have tentatively agreed to this cost sharing as part of the new agreement and for inclusion in the 2025 rates. Waste Connections is proposing the low income discount customer assistance program without a change in rate adjustment.

Table 8, below, shows the effect of including the 50% cost sharing for these two service enhancements into the 2025 rate adjustment. Cost allocations are by percentage of accounts by agency, which is the reason for differences in the effect of rate adjustment by agency.

Table 8: 50% Cost Share for Service Enhancements
San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
New Annual
Cart Exchange $26,376 $9,889 $7,223 $3,623 $11,445 $7,566 $8,179 $7,987 $3,681 $320 Bulky Clean-up
Enhancements 21,091 7,908 5,776 2,897 9,152 6,050 6,540 6,386 2,944 256 Change in
Calculations 47,467 17,797 12,999 6,520 20,597 13,616 14,719 14,373 6,625 576 Effect on Rate
Adjustment 0.33% 0.48% 0.45% 0.51% 0.45% 0.37% 0.54% 0.55% 0.50% 0.19% Corrections to AB 939 Fees
Agency fees, which include AB 939 Fees and Franchise Fees, are included as estimates in rate adjustment applications. Because the rate applications are at the company business unit level, and not at the individual agency level, AB 939 fees in the application are allocated to the Agencies in proportion to revenues. However, only the City of San Luis Obispo and Cayucos Sanitary District receive AB 939 Fees – therefore this was corrected in the revised 2025 rate adjustments as shown in Table 9, on the following page. Note that the values for the City of San Luis Obispo also include a correction to Franchise Fee revenues.2
2 Specifically, to remove the 1994 Rate Manual’s approach to “grossing up” the calculated rate adjustment to account for the Franchise Fee by including the projected Franchise Fee payment amounts in the rate adjustment calculation itself. This approach is also recommended for the other Agencies starting with the 2026 rate adjustment.

New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 14 of 19 Table 9: Corrections to AB 939 Fees
San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
Original
Agency Fees $362,140 $5,226 $4,097 $1,823 $- $- $- $- $- $- Revised
Agency Fees 439,411 - - 12,754 - - - - - -
Change in
Calculations 77,2713 (5,226) (4,097) 10,931 - - - - - - Effect on Rate
Adjustment 0.54% -0.14% -0.14% 0.85% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Updated Profit Allowance
The 1994 Rate Manual, along with the Agencies agreements with Waste Connections, limits allowable profit based on an “operating ratio” of 92% or 93% of allowable collection expenses (not including postcollection disposal, processing or recycling expenses nor agency fees) depending on the agency. A 93% operating ratio is the equivalent of a 7.53% profit margin, and a 92% operating ratio is the equivalent of an 8.7% profit margin.

A key negotiation point between the City and Waste Connections was a change to the profit allowance.

Ultimately, after much discussion and negotiation, the City and Waste Connections agreed that the 2025 rate adjustment will include a 9% profit allowance of projected allowable collection costs and in 2026 and thereafter the profit allowance will be 10%. The updated profit allowance is in-keeping with industry standards for solid waste services.

For context, the 2025 profit allowance is approximately 5% of revenues and we estimate that the 2026 profit allowance will be approximately 5.5% of revenues. Table 10, on the following page, shows the effect of changing the profit allowance to 9% of collection costs for all Agencies for the 2025 rate adjustments. Differences in the effect on rate adjustment are due to differences in existing profit allowances by agency, as well as differences in the depreciation, corporate overhead and new service enhancements shown in earlier tables.
3 Includes adjustment to Franchise Fee to remove “grossing up” method from City’s 2025 rate adjustment calculations.

New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 15 of 19 Table 10: 9% Profit Allowance on Allowable Collection Costs San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
Original Profit
Allowance $641,302 $188,392 $170,609 $65,715 $227,094 $180,477 $135,161 $111,295 $65,388 $15,085 Revised Profit
Allowance 768,515 224,623 175,993 78,382 237,649 188,618 141,665 134,797 68,490 15,714 Change in
Calculations 127,213 36,231 5,384 12,667 10,555 8,141 6,504 23,502 3,102 629 Effect on Rate
Adjustment 0.88% 0.99% 0.19% 0.99% 0.23% 0.22% 0.24% 0.90% 0.23% 0.20% Total Revisions for New Rate Adjustment Methodology
Taken altogether, the revisions to the 2025 rate adjustment result in small increases to the original 2025 rate adjustment calculations. These are shown in Table 11, on the following page, and are also shown in Attachment 2.

New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 16 of 19 Table 11: Overall Revisions to 2025 Rate Adjustments
San Luis
Obispo
Los Osos
CSD
Cambria
CSD
Cayucos
SD
Arroyo
Grande
Pismo Beach
Grover
Beach
Nipomo
CSD
Oceano
CSD
Avila
CSD
Original 2025
Revenue
Calculation
$15,640,734 $4,089,595 $3,228,699 $1,426,540 $4,786,646 $3,804,059 $2,848,911 $2,692,832 $1,378,241 $317,951 Change in
Depreciation (212,647) (59,444) (46,597) (20,735) (61,603) (48,957) (36,665) (34,878) (17,737) (4,092) Change in
Corporate
Overhead
184,082 34,540 27,075 12,048 69,975 55,611 41,648 39,619 20,148 4,648 Enhanced
Services 47,467 17,797 12,999 6,520 20,597 13,616 14,719 14,373 6,625 576 Updated Profit
Allowance 127,213 36,231 5,384 12,667 10,555 8,141 6,504 23,502 3,102 629 Corrections to
AB 939 Fees 77,271 (5,226) (4,097) 10,931 - - - - - -
Revised 2025
Revenue
Calculation
15,864,119 4,113,493 3,223,463 1,447,971 4,826,170 3,832,470 2,875,118 2,735,447 1,390,379 319,712 Revenues at
Current Rates 14,435,726 3,677,194 2,882,493 1,282,686 4,621,616 3,672,906 2,750,690 2,616,676 1,330,724 306,989 Shortfall (1,428,393) (436,299) (340,970) (165,285) (204,554) (159,564) (124,428) (118,771) (59,655) (12,724) Revised 2025
Rate
Adjustment4

9.89% 13.18% 12.59% 14.32% 4.92% 4.82% 5.02% 5.04% 4.98% 4.60% Proportionality in Cost of Service
R3 analyzed the 2025 rate adjustments for adequacy with respect to the cost-of-service requirements of Proposition 218. Because the base year rate adjustment methodology is based on the documented cost of provided solid waste services as expressed in Waste Connections’ audited financial statements, we find that the current and proposed solid waste service rates will generate revenues sufficient to cover the cost-of-providing service plus a reasonable profit allowance commensurate with normal expectations in the solid waste industry.

R3 also analyzed the proposed solid waste service rates for adequacy with respect to proportionate allocation of costs among solid waste service customers. R3 found that the current (and thus also 4 Rate adjustments shown include grossing up for franchise fees per 1994 Rate Manual methodology, except for San Luis Obispo.

New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 17 of 19 proposed) solid waste rate structure proportionately allocates costs to service types and container sizes based on the relative differences in cost associated with the types of services provided to customers.

For example, for customers subscribing to 60- or 90-gallon cart solid waste service, the per-gallon cost-ofservice for those subscribed to the larger container size (90-gallons) is proportionately less than those subscribed to the smaller container size (60-gallons). This is because solid waste service is comprised of both fixed and variable costs, with the fixed cost portion being for the cost of collection (labor, fuel, capital equipment, and other shared costs) as well as the costs related to post-collection disposal, processing, recycling and composting. Thus, the cost-of-service for the larger container size (90-gallons) has a lesser proportion of fixed costs to variable costs compared to the smaller (60-gallon) container size.

Factors Affecting 2025 Rate Adjustments
Overall, for the Agencies and the three Waste Connections business units, the 2025 rate adjustments reflect an 8.12% increase in revenues to meet increased costs and revised profit allowances. The largest contributors to the overall increase are:
》 Increases in organics processing costs – Third-party costs for the organic waste postcollection processing facility operated by the company formerly named Hitachi Zosen INOVA, and which are not within Waste Connections’ control, have doubled since 2022. The change in cost is the result of changes in facility capital and operating costs. 》 Increases in landfill disposal costs – Related party costs for landfill waste disposal at Cold Canyon have remained flat since 2016. The 2025 rate adjustment reflects a market adjustment to these costs, from a per ton tipping fee of $41 per ton (in place since 2016) to a per ton tipping fee of $70. Waste Connections provided market comparison demonstrating the applicability of the $70 per ton market tipping fee.

Other factors play minor roles in the 2025 rate adjustment:
》 Collection costs including labor, vehicles, operating expenses and overhead – These costs are increasing in proportion to the Consumer Price Index and are projected to increase by 3.20% in 2024 and 4.21% for 2025.
》 Agency fees – These costs are mostly proportionate to changes in rates and are projected to increase by 2.22% in 2024 and 3.30% in 2025.

Overall, collection services comprise the single largest component overall rate funded expenses, at 56% of total rate revenues. Post-collection services are the next largest component of rate funding, at 29% of total rate revenues. Agency fees comprise 10% of rate revenues and profit allowance comprises 5% of rate revenues. This is demonstrated in Chart 5, on the following page.

New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 18 of 19 Chart 5: Summary Components of 2025 Rate Revenues
New Rate Adjustment Methodology
The City and Waste Connections negotiated a new methodology for adjusting rates starting in 2026, which are summarized below. R3 is preparing an exhibit to the City’s new agreement with Waste Connections that will further detail the terms and conditions of the new methodology in accordance with the following points, which have been tentatively agreed to by the parties. The exhibit will be finalized and ready for distribution to the Agencies on or around November 18, 2024. It is recommended that the Agencies bring forward the exhibit as an amendment to their agreements with Waste Connections when considering the 2025 rate adjustments, which is anticipated to occur in January 2025.

The features of the new methodology include:
》 CPI Adjustments: Starting in 2026, rate adjustments will be based on the Garbage and Trash CPI, with a floor of 2% and a cap of 5%. Amounts under 2% or over 5% will carry forward. The CPI adjustment will apply to Waste Connections’ collection and post-collection cost centers. The proposed CPI is the Consumer Price Index for all Urban Consumers for Garbage and Trash in the United States, all City average. Details and prior results for this CPI are included in Attachment 3.

This is the same CPI used by Waste Connections in preparing its 2025 base year application. 》 Updated Profit Allowance: As stated previously, the 2025 rate adjustment includes a 9% profit allowance of projected collection costs. The City and Waste Connections have tentatively agreed that, in 2026 and thereafter, the profit allowance will be 10% of collection costs. 》 Revenue Balancing Mechanism: Starting in 2027, adjustments to rates will account for shortfalls or surpluses in Waste Connections’ actual revenues compared to projected revenues from prior years. For example, if Waste Connections’ 2025 revenues exceed projections, the amount of surplus revenues will be credited to the rates in 2027 (and vice versa), achieving fairness in compensation and rates for the company and for ratepayers. Such adjustments would take place annually and will be independent of the CPI cap and floor noted above. 》 Less Frequent Cost-Based Adjustments: Currently, solid waste rates are adjusted based on the 1994 Rate Manual every three years on Waste Connections’ costs. Via the new methodology, Collection
Services
56%
PostCollection
Services
29%
Agency Fees
10%
Profit
Allowance
5%
New Rate Adjustment Methodology and 2025 Rates
City of San Luis Obispo | New Solid Waste Rate Adjustment Methodology and 2025 Rates 19 of 19 cost-based adjustments would occur a maximum of every five years, and only if requested by Waste Connections or the City. The first opportunity for a cost-based adjustment will be for the 2030 rate year. If neither Waste Connections nor the City request a cost-based adjustment, then the CPI adjustment approach will be applied. Cost-based adjustments will be based on Waste Connections’ consolidated audited financial statements for the region. Timeframes for cost-based adjustment application and review process will be ample, such that the City will have sufficient time for review and approval processes and such that the potential for delay in implementation is minimized.
》 Extraordinary Adjustments: The California Air Resources Board (CARB) Advanced Clean Fleets (ACF) regulation is requiring all solid waste collection trucks to be zero emissions in 2042.

This includes a phased in plan to get the percentage of the fleet to be zero emission vehicle (ZEV) with 10% by 2030, 25% by 2033, 50% by 2036,75% by 2039 and100% by 2042. During CPI Adjustment years, Waste Connections may request extraordinary rate adjustments due to changes in law affecting collection operations, including for compliance with CARB’s ACF zero emission mandate (which may necessitate change to depreciation schedules). The City may, but is not obligated to, consider requests for extraordinary rate adjustments due to changes in law affective post-collection operations. Requests for extraordinary change are subject to good faith meet and confer negotiations between City and Waste Connections.

Example Calculations for 2026 through 2029
R3 has prepared example calculations of projected rate adjustments for 2026 through 2029 based on the tentatively agreed to terms and conditions outlined above (including adjustment to 10% profit allowance on collection services starting in 2026). Table 12, below, demonstrates this example for the City of San Luis Obispo, and Attachment 4 provides examples for all Agencies. Note that the example in Table 12 and Attachment 4 includes the following assumptions:
》 CPI at the 5% cap (note that CPI below the 5% cap will result in lower rate adjustments) 》 Revenue reconciliation at 1% below annual rate revenue projections (note that amounts above rate revenue projections will offset rate adjustments, not add to them). 》 Discontinuance of the prior Franchise Fee grossing method on rate adjustment for all Agencies starting in 2026.

Table 12: Example Calculation of New Rate Methodology for the City of San Luis Obispo 2025 2026 2027 2028 2029
Collection Services $8,539,055 $8,966,008 $9,414,308 $9,885,024 $10,379,275 Profit Allowance 768,515 896,601 941,431 988,502 1,037,927 Post-Collection Services 4,602,096 4,832,201 5,073,811 5,327,501 5,593,876 Franchise Fee 1,586,412 1,675,695 1,777,106 1,866,072 1,959,572 AB 939 Fee 368,041 386,443 405,765 426,053 447,356
Revenue Reconciliation Example N/A N/A 158,641 167,569 177,711 Total Revenues 15,864,119 16,756,947 17,771,062 18,660,722 19,595,717 Indexed Rate Adjustment 5.63% 6.05% 5.01% 5.01%
San Luis Obispo Los Osos Cambria Cayucos Arroyo Grande Pismo Beach Grover Beach Nipomo Oceano Avila Single Family Residential $ 5,282,964 $ 2,795,167 $ 2,201,010 $ 987,376 $ 2,379,516 $ 1,598,158 $ 1,580,148 $ 1,570,029 $ 684,117 $ 91,446 Multi-Family Dumpsters 2,556,077 - - - - - - - - -
Non-Residential Carts 729,282 100,710 77,805 33,710 256,857 237,767 134,053 119,843 74,076 24,711 Non-Residential Dumpsters 5,846,777 776,244 599,701 259,830 1,979,781 1,832,640 1,033,238 923,712 570,958 190,469 Total Rate Revenue 14,415,100 3,672,121 2,878,516 1,280,916 4,616,154 3,668,565 2,747,439 2,613,584 1,329,151 306,626 Other Income (Allocated) 20,626 5,073 3,977 1,770 5,462 4,341 3,251 3,092 1,573 363 14,435,726 3,677,194 2,882,493 1,282,686 4,621,616 3,672,906 2,750,690 2,616,676 1,330,724 306,989 Labor 3,658,710 1,042,706 817,360 363,719 1,113,222 884,704 662,567 630,287 320,535 73,945 Depreciation 1,338,367 376,989 295,515 131,502 398,063 316,350 236,919 225,376 114,616 26,441 Insurance 1,124,499 316,418 248,035 110,374 329,978 262,241 196,396 186,828 95,012 21,919 Other G&A 976,729 282,701 221,605 98,612 304,307 241,840 181,117 172,293 87,621 20,213 Fuel 754,387 321,408 251,946 112,114 254,951 202,616 151,742 144,349 73,409 16,935 Maintenance 421,166 116,487 91,312 40,633 117,432 93,326 69,893 66,488 33,813 7,800 Corporate Overhead 246,296 46,213 36,226 16,120 93,625 74,406 55,724 53,009 26,958 6,219 Total Collection Services 8,520,154 2,502,921 1,961,999 873,074 2,611,578 2,075,482 1,554,357 1,478,629 751,964 173,473 Garbage Landfilling 2,408,278 349,264 273,782 121,831 508,314 403,969 302,538 287,798 146,361 33,765 Organics Processing 1,108,784 477,019 373,927 166,395 660,852 525,194 393,325 374,162 190,282 43,897 Recyclables Processing 916,880 173,112 135,700 60,385 270,385 214,881 160,927 153,087 77,853 17,960 Affiliated Party Costs 168,154 57,121 44,776 19,925 46,128 36,659 27,455 26,117 13,282 3,064 Total Post-Collection & Affiliated Party Services 4,602,096 1,056,516 828,185 368,536 1,485,678 1,180,703 884,245 841,165 427,778 98,686 Franchise Fee 1,515,042 336,540 263,809 117,393 462,296 367,397 275,149 261,744 133,111 30,708 AB 939 Fee 362,140 5,226 4,097 1,823 - - - - - -
Total Pass-Through Services 1,877,182 341,766 267,905 119,216 462,296 367,397 275,149 261,744 133,111 30,708 14,999,432 3,901,203 3,058,090 1,360,825 4,559,552 3,623,582 2,713,750 2,581,537 1,312,853 302,866 641,302 188,392 170,609 65,715 227,094 180,477 135,161 111,295 65,388 15,085 15,640,734 4,089,595 3,228,699 1,426,540 4,786,646 3,804,059 2,848,911 2,692,832 1,378,241 317,951 (1,205,008) (412,401) (346,206) (143,854) (165,030) (131,153) (98,222) (76,155) (47,518) (10,962)

8.36% 11.22% 12.01% 11.22% 3.57% 3.57% 3.57% 2.91% 3.57% 3.57% Grossing up for Franchise Fees 9.29% 12.47% 12.78% 12.47% 3.97% 3.97% 3.97% 3.23% 3.76% 3.97% Category
Calculated Adjustment to Rate Revenues
Attachment 1: Summary of Waste Connections' Original 2025 Rate Application Calculations Total Compensation for Services
Allowed Operating Margin
Total Revenue Requirement
Surplus (Shortfall)
Collection Services
Post-Collection & Affiliated
Party Services
Pass-Through Services
San Luis Garbage
Company (SLG)
Mission Country Disposal (MCD) South County Sanitary Service (SCSS) Total Current Revenues
Current Revenues
San Luis Obispo Los Osos Cambria Cayucos Arroyo Grande Pismo Beach Grover Beach Nipomo Oceano Avila Single Family Residential $ 5,282,964 $ 2,795,167 $ 2,201,010 $ 987,376 $ 2,379,516 $ 1,598,158 $ 1,580,148 $ 1,570,029 $ 684,117 $ 91,446 Multi-Family Dumpsters 2,556,077 - - - - - - - - -
Non-Residential Carts 729,282 100,710 77,805 33,710 256,857 237,767 134,053 119,843 74,076 24,711 Non-Residential Dumpsters 5,846,777 776,244 599,701 259,830 1,979,781 1,832,640 1,033,238 923,712 570,958 190,469 Total Rate Revenue 14,415,100 3,672,121 2,878,516 1,280,916 4,616,153 3,668,565 2,747,439 2,613,584 1,329,152 306,626 Other Income (Allocated) 20,626 5,073 3,977 1,770 5,462 4,341 3,251 3,092 1,573 363 14,435,726 3,677,194 2,882,493 1,282,686 4,621,615 3,672,905 2,750,689 2,616,676 1,330,724 306,989 Labor 3,658,710 1,042,706 817,360 363,719 1,113,222 884,704 662,567 630,287 320,536 73,945 Depreciation 1,125,720 317,545 248,918 110,766 336,460 267,393 200,254 190,498 96,879 22,349 Insurance 1,124,499 316,418 248,035 110,374 329,978 262,241 196,396 186,828 95,012 21,919 Other G&A 1,024,196 300,498 234,604 105,132 324,904 255,456 195,836 186,666 94,246 20,789 Fuel 754,387 321,408 251,946 112,114 254,951 202,616 151,742 144,349 73,409 16,935 Maintenance 421,167 116,487 91,312 40,633 117,431 93,326 69,893 66,488 33,813 7,800 Corporate Overhead 430,378 80,753 63,301 28,168 163,600 130,017 97,371 92,627 47,106 10,867 Total Collection Services 8,539,055 2,495,814 1,955,476 870,906 2,640,547 2,095,751 1,574,059 1,497,742 761,000 174,605 Garbage Landfilling 2,408,278 349,264 273,782 121,831 508,314 403,969 302,538 287,798 146,361 33,765 Organics Processing 1,108,784 477,019 373,927 166,395 660,852 525,194 393,325 374,162 190,282 43,897 Recyclables Processing 916,880 173,112 135,700 60,385 270,385 214,881 160,927 153,087 77,853 17,960 Affiliated Party Costs 168,154 57,121 44,776 19,925 46,128 36,659 27,455 26,117 13,282 3,064 Total Post-Collection & Affiliated Party Services 4,602,096 1,056,516 828,185 368,536 1,485,678 1,180,703 884,245 841,164 427,779 98,686 Franchise Fee 1,586,412 336,540 263,809 117,393 462,296 367,397 275,149 261,744 133,111 30,708 AB 939 Fee 368,041 - - 12,754 - - - - - -
Total Pass-Through Services 1,954,453 336,540 263,809 130,147 462,296 367,397 275,149 261,744 133,111 30,708 15,095,604 3,888,870 3,047,470 1,369,589 4,588,521 3,643,852 2,733,452 2,600,650 1,321,890 303,998 768,515 224,623 175,993 78,382 237,649 188,618 141,665 134,797 68,490 15,714 15,864,119 4,113,493 3,223,463 1,447,971 4,826,170 3,832,470 2,875,117 2,735,447 1,390,380 319,712 (1,428,393) (436,299) (340,970) (165,285) (204,555) (159,564) (124,428) (118,771) (59,655) (12,724)

9.89% 11.86% 11.83% 12.89% 4.43% 4.34% 4.52% 4.54% 4.48% 4.14%

13.18% 12.59% 14.32% 4.92% 4.82% 5.02% 5.04% 4.98% 4.60%

9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0%

10.0% 10.0% 6.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% Change to Original Rate Application 0.60% 0.71% -0.19% 1.85% 0.95% 0.85% 1.05% 1.81% 1.22% 0.63% Franchise Fee
Allowed Operating Margin
Total Revenue Requirement
Surplus (Shortfall)
Calculated Adjustment to Rate Revenues
Grossing up for Franchise Fees
Profit Margin on Collection Services (2025)
Total Compensation for Services
Attachment 2: Summary of Revised 2025 Rate Application Calculations Category
San Luis Garbage
Company (SLG)
Mission Country Disposal (MCD) South County Sanitary Service (SCSS) Current Revenues
Total Current Revenues
Collection Services
Post-Collection & Affiliated
Party Services
Pass-Through Services
Bureau of Labor Statistics
ATTACHMENT 3
Series Id:

Series Title:

Area:

Item:

Base Period:

Years:

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec HALF1 HALF2 Annual Change 2014 422.440 422.483 423.413 425.393 425.242 425.930 426.562 426.771 427.327 427.995 427.808 428.187 2015 427.734 429.248 429.235 429.807 431.234 430.813 431.229 432.967 433.843 434.829 436.428 436.996 1.46% 2016 437.205 438.296 437.699 437.676 438.317 437.858 438.607 439.358 439.707 440.311 443.343 444.745 1.71% 2017 446.266 447.699 446.987 447.129 447.272 448.046 448.328 448.717 449.008 452.196 453.820 453.596 2.20% 2018 453.354 454.915 455.230 458.722 462.887 465.041 465.579 470.457 471.026 472.535 486.650 485.935 458.358 475.364 3.96% 2019 475.687 477.474 478.569 479.449 480.865 480.984 482.138 483.987 484.346 486.133 486.485 486.708 478.838 484.966 3.22% 2020 491.003 494.429 495.288 494.432 494.946 496.679 498.564 500.882 501.756 503.315 504.970 508.190 494.463 502.946 3.49% 2021 512.722 517.270 518.505 518.579 516.440 517.202 521.185 524.408 529.934 530.114 529.053 532.538 516.786 527.872 4.74% 2022 533.078 538.313 540.719 542.564 544.546 547.554 548.187 548.706 558.254 561.090 563.816 565.185 541.129 557.540 5.17% 2023 570.412 575.697 576.773 580.124 587.431 589.812 596.167 597.347 596.997 597.569 601.631 602.164 580.042 598.646 7.28% 2024 606.773 610.551 610.015 611.073 609.538 611.946 614.089 615.880 609.983 3.71% 10-Year Average

3.69%
U.S. city average
Garbage and trash collection
DECEMBER 1983=100
2014 to 2024
Consumer Price Index for All Urban Consumers (CPI-U)
Original Data Value
CUUR0000SEHG02
Not Seasonally Adjusted
Garbage and trash collection in U.S. city average, all
b t ll dj t d
Source: Bureau of Labor Statistics Generated on: October 8, 2024 (04:11:38 PM) 5% 5% 5% 5%
2025 2025 2026 2027 2028 2029
Collection Services $ 8,539,055 $ 8,539,055 $ 8,966,008 $ 9,414,308 $ 9,885,024 $ 10,379,275 Profit Allowance 768,515 768,515 896,601 941,431 988,502 1,037,927 Post-Collection Services 4,602,096 4,602,096 4,832,201 5,073,811 5,327,501 5,593,876 Franchise Fee 1,586,412 1,586,412 1,675,695 1,777,106 1,866,072 1,959,572 AB 939 Fee 368,041 368,041 386,443 405,765 426,053 447,356 Revenue Reconciliation Example N/A N/A N/A 158,641 167,569 177,711 Total Revenues 15,864,119 15,864,119 16,756,947 17,771,062 18,660,722 19,595,717 Indexed Rate Adjustment 5.63% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (158,641) (167,569) (177,711) (186,607) (195,957) 2025 2025 2026 2027 2028 2029
Collection Services $ 2,640,547 $ 2,640,547 $ 2,772,575 $ 2,911,203 $ 3,056,763 $ 3,209,602 Profit Allowance 237,649 237,649 277,257 291,120 305,676 320,960 Post-Collection Services 1,485,678 1,485,678 1,559,962 1,637,960 1,719,858 1,805,851 Franchise Fee 462,296 484,875 512,199 543,197 570,391 598,970 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 48,487 51,220 54,320 Total Revenues 4,826,170 4,848,749 5,121,993 5,431,968 5,703,909 5,989,703 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (48,487) (51,220) (54,320) (57,039) (59,897) 2025 2025 2026 2027 2028 2029
Collection Services $ 2,495,814 $ 2,495,814 $ 2,620,605 $ 2,751,635 $ 2,889,217 $ 3,033,677 Profit Allowance 224,623 224,623 262,060 275,163 288,922 303,368 Post-Collection Services 1,056,516 1,056,516 1,109,341 1,164,808 1,223,049 1,284,201 Franchise Fee 336,540 419,661 443,556 470,397 493,949 518,698 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 41,966 44,356 47,040 Total Revenues 4,113,493 4,196,613 4,435,563 4,703,970 4,939,492 5,186,984 Indexed Rate Adjustment 5.69% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (41,966) (44,356) (47,040) (49,395) (51,870) 2025 2025 2026 2027 2028 2029
Collection Services $ 2,095,751 $ 2,095,751 $ 2,200,539 $ 2,310,566 $ 2,426,094 $ 2,547,399 Profit Allowance 188,618 188,618 220,054 231,057 242,609 254,740 Post-Collection Services 1,180,703 1,180,703 1,239,738 1,301,725 1,366,811 1,435,152 Franchise Fee 367,397 385,008 406,703 431,316 452,909 475,602 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 38,501 40,670 43,132 Total Revenues 3,832,470 3,850,080 4,067,035 4,313,165 4,529,095 4,756,025 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (38,501) (40,670) (43,132) (45,291) (47,560) Example CPI
San Luis Obispo
Attachment 4 - Indexed Rate Adjustment Methodology Example Calculations Arroyo Grande
Los Osos CSD
Pismo Beach
2025 2025 2026 2027 2028 2029
Collection Services $ 1,955,476 $ 1,955,476 $ 2,053,250 $ 2,155,912 $ 2,263,708 $ 2,376,894 Profit Allowance 175,993 175,993 205,325 215,591 226,371 237,689 Post-Collection Services 828,185 828,185 869,595 913,074 958,728 1,006,664 Franchise Fee 263,809 188,914 199,670 211,664 222,261 233,395 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 31,486 33,278 35,277 Total Revenues 3,223,463 3,148,569 3,327,840 3,527,727 3,704,346 3,889,920 Indexed Rate Adjustment 5.69% 6.01% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (31,486) (33,278) (35,277) (37,043) (38,899) 2025 2025 2026 2027 2028 2029
Collection Services $ 1,574,059 $ 1,574,059 $ 1,652,762 $ 1,735,400 $ 1,822,170 $ 1,913,278 Profit Allowance 141,665 141,665 165,276 173,540 182,217 191,328 Post-Collection Services 884,245 884,245 928,457 974,880 1,023,624 1,074,805 Franchise Fee 275,149 288,885 305,166 323,634 339,836 356,864 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 28,889 30,517 32,363 Total Revenues 2,875,117 2,888,854 3,051,661 3,236,343 3,398,364 3,568,639 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (28,889) (30,517) (32,363) (33,984) (35,686) 2025 2025 2026 2027 2028 2029
Collection Services $ 1,497,742 $ 1,497,742 $ 1,572,629 $ 1,651,261 $ 1,733,824 $ 1,820,515 Profit Allowance 134,797 134,797 157,263 165,126 173,382 182,051 Post-Collection Services 841,164 841,164 883,223 927,384 973,753 1,022,441 Franchise Fee 261,744 274,856 290,346 307,917 323,333 339,533 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 27,486 29,035 30,792 Total Revenues 2,735,447 2,748,559 2,903,461 3,079,173 3,233,326 3,395,332 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (27,486) (29,035) (30,792) (32,333) (33,953) 2025 2025 2026 2027 2028 2029
Collection Services $ 761,000 $ 761,000 $ 799,050 $ 839,002 $ 880,953 $ 925,000 Profit Allowance 68,490 68,490 79,905 83,900 88,095 92,500 Post-Collection Services 427,779 427,779 449,168 471,626 495,207 519,968 Franchise Fee 133,111 139,697 147,569 156,500 164,335 172,569 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 13,970 14,757 15,650 Total Revenues 1,390,380 1,396,966 1,475,692 1,564,998 1,643,347 1,725,686 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (13,970) (14,757) (15,650) (16,433) (17,257) Cambria CSD
Grover Beach
Nipomo CSD
Oceano CSD
2025 2025 2026 2027 2028 2029
Collection Services $ 870,906 $ 870,906 $ 914,452 $ 960,174 $ 1,008,183 $ 1,058,592 Profit Allowance 78,382 78,382 91,445 96,017 100,818 105,859 Post-Collection Services 368,536 368,536 386,962 406,311 426,626 447,957 Franchise Fee 117,393 147,842 156,250 165,705 174,002 182,720 AB 939 Fee 12,754 12,754 13,392 14,061 14,764 15,503
Revenue Reconciliation Example N/A N/A N/A 14,784 15,625 16,571 Total Revenues 1,447,971 1,478,420 1,562,501 1,657,053 1,740,019 1,827,202 Indexed Rate Adjustment 5.69% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (14,784) (15,625) (16,571) (17,400) (18,272) 2025 2025 2026 2027 2028 2029
Collection Services $ 174,605 $ 174,605 $ 183,335 $ 192,502 $ 202,127 $ 212,234 Profit Allowance 15,714 15,714 18,334 19,250 20,213 21,223 Post-Collection Services 98,686 98,686 103,620 108,801 114,241 119,953 Franchise Fee 30,708 32,112 33,921 35,974 37,775 39,667 AB 939 Fee - - - - - -
Revenue Reconciliation Example N/A N/A N/A 3,211 3,392 3,597 Total Revenues 319,712 321,117 339,210 359,738 377,748 396,675 Indexed Rate Adjustment 5.63% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (3,211) (3,392) (3,597) (3,777) (3,967) 2025 2025 2026 2027 2028 2029
Collection Services $ 22,604,956 $ 22,604,956 $ 23,735,204 $ 24,921,964 $ 26,168,062 $ 27,476,465 Profit Allowance 2,034,446 2,034,446 2,373,520 2,492,196 2,616,806 2,747,647 Post-Collection Services 11,773,587 11,773,587 12,362,266 12,980,380 13,629,399 14,310,869 Franchise Fee 3,834,558 3,948,262 4,171,077 4,423,411 4,644,863 4,877,591 AB 939 Fee 380,795 380,795 399,835 419,826 440,818 462,859 Revenue Reconciliation Example N/A N/A N/A 407,420 430,419 456,452 Total Revenues 40,628,342 40,742,046 43,041,902 45,645,198 47,930,367 50,331,883 Indexed Rate Adjustment 5.65% 6.05% 5.01% 5.01%
Revenue Surplus (Shortfall) Example -1% (407,420) (430,419) (456,452) (479,304) (503,319) Cayucos SD
Avila Beach CSD
Total
Notice of Public Hearing Regarding
Proposed Solid Waste Rate Adjustments
Property Owners and Tenants - Customers:

This notice is intended to inform you that the City of Grover Beach (the “City”) will hold a public hearing regarding rate adjustments (the “Proposed Rate Adjustments”) proposed by South County Sanitary Service (the “Garbage Company”) for properties and customers receiving solid waste, recycling, and green waste services within the City. The Proposed Rate Adjustments will be considered by the Grover Beach Council at the date, time, and location specified below. Consistent with the requirements of Proposition 218, this notice also provides you with the following information:
• The Date, Time, and Place of the Public Hearing;
• The Reason for the Proposed Rate Adjustments;
• The Effective Date of the Rate Adjustment if Approved; • The Basis for the Proposed Rate Adjustments; and
• The Majority Protest Procedures.

NOTICE OF PUBLIC HEARING
The Public Hearing for the Proposed Rate Adjustments within the City limits will be held on:

Date: January 27, 2025 Time: 6:00 pm
Place: Grover Beach City Hall located at 154 South 8th St, Grover Beach At the Public Hearing, the City Council will consider all public comment in support of and in opposition to the Proposed Rate Adjustments and whether or not a Majority Protest exists pursuant to the California Constitution (as described below). If approved, the Proposed 2025 Rate Adjustment would become effective on January 1, 2025 and annual adjustments would be effective each January 1 of 2026, 2027, 2028 and 2029.

Reason For and Basis of the Proposed Rate Adjustments
The Proposed Rate Adjustment for 2025 is based on the Garbage Company’s documented cost of providing solid waste services and is a 5.02% increase above current solid waste rates. This cost-based adjustment is necessary PARA UNA VERSIÓN EN ESPAÑOL DE ESTE “AVISO DE AUDENCIA PÚBLICA SOBRE LOS AUMENTOR PROPUESTOS DE LA TASA DE RESIDUOS SÓLIDOS”, UTILICE EL SIGUIENTE ENLACE AL SITIO WEB:
https://www.sanluisgarbage.com/news/list
Attachment 2
for the Garbage Company to continue to provide safe, environmentally sound and reliable solid waste removal, transportation and disposal services to the residents and businesses of the City. The adjustments are requested due to:
• Increases in organics processing costs – Third-party costs for the organic waste post-collection processing facility operated by the company formerly named Hitachi Zosen INOVA, and which are not within the Garbage Company’s control, have doubled since 2022. The change in cost is the result of changes in facility capital and operating costs.
• Increases in landfill disposal costs – Related party costs for landfill waste disposal at Cold Canyon have remained flat since 2016. The 2025 rate adjustment reflects a market adjustment to these costs, from a per ton tipping fee of $41 per ton (in place since 2016) to a per ton tipping fee of $70. The Garbage Company provided market comparison demonstrating the applicability of the $70 per ton market tipping fee.
• Collection costs including labor, vehicles, operating expenses and overhead – These costs are increasing approximately 4.21% in 2025.
• Adjustments necessary for moving to a new methodology for annual rate adjustments that provides for increased rate stability, predictability, fairness, transparency, ease of administration, and costeffectiveness. These include updated depreciation lifespans for solid waste collection vehicles, removal of a limitation on corporate overhead costs for legal, tax, payroll, human resources, engineering, compliance, IT, training and recruiting programs, and updated profit allowance inkeeping with industry standards. • Adjustments for new service enhancements, including the ability for residents to exchange a solid waste collection cart once annually at no additional cost, no charge collection for one bulky item during clean-up weeks, and a rate assistance program providing a 20% low-income discount provided to residential customers using 32-gallon cart service (using existing jurisdictional practices on lowincome relief for their offered utility type services).

The Proposed Rate Adjustments for 2025 applicable to residential solid waste customers are shown in the table below.

Garbage
Container Size 2024 2025 Change in Monthly Rate
32-gallon $24.23 $25.45 $1.22
64-gallon $32.74 $34.38 $1.64
96-gallon $41.23 $43.30 $2.07
In addition, commencing each January 1 of 2026, 2027, 2028 and 2029 solid waste rates will be adjusted based on the following:
• Annual change in the Bureau of Labor Statistics’ Consumer Price Index (CPI) for Garbage and Trash Collection in the U.S all city average, with a minimum 2% adjustment and a maximum 5% adjustment.

Amounts below the minimum or above the maximum will carry forward to the following year. • Calculation of a 10% profit allowance starting in 2026 (estimated at additional 0.67% to 0.69% adjustment in 2026).
• Addition of a revenue balancing mechanism starting in 2027, wherein actual revenues from solid waste rates over or under projections carry forward as additions to, or offsets against, the annual CPI adjustment.
• Rate adjustments for January 1, 2026, 2027, 2028 and 2029 are not expected to exceed 7%.

The Proposed Rate Adjustments have been independently reviewed for consistency with the City of San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste Management dated June 1994 and in accordance with the provisions of the City’s Franchise Agreement with the Garbage Company, as amended, governing solid waste service within the boundaries of the City. The Proposed Rate Adjustments contemplate implementation of a new methodology for annual rate adjustments which is described in New Solid Waste Rate Adjustment Methodology and 2025 Rates report authored by independent reviewer, R3 Consulting Group, Inc. The consultant’s report and the complete set of proposed 2025 solid waste rates is available at the City Clerk’s office located at Grover Beach City Hall located at 154 South 8th St, Grover Beach.

How Do I Protest the Proposed Rate Adjustments?
Pursuant to Section 6 of Article XIII D of the California Constitution, the following persons may submit a written protest against the Proposed Rate Adjustments to the City Clerk before the close of the Public Hearing referenced above.
▪ An owner(s) of property (parcel(s)) receiving solid waste, recycling, and green waste services within the City limits. If the person(s) signing the protest, as an owner, is not shown on the last equalized assessment roll as the owner of the parcel(s) then the protest must contain or be accompanied by written evidence that such person signing the protest is the owner of the parcel(s) receiving services; or
▪ A tenant(s) whose name appears on the Garbage Company’s records as the customer of record for the corresponding parcel receiving solid waste, recycling, and green waste services within the City limits (tenant-customer).

A valid written protest must contain a statement that you protest the Proposed Rate Adjustments, the address or Assessor’s Parcel Number (APN) of the parcel or parcels which receive solid waste, recycling, and green waste services, and a signature by either the owner or the tenant-customer of the parcel or parcels. One written protest per parcel shall be counted in calculating a majority protest to the Proposed Rate Adjustments subject to the requirements of Section 6 of Article XIII D of the California Constitution. Written protests will not be accepted by e-mail or by facsimile. Verbal protests will not be counted in determining the existence of a majority protest. To be counted, a protest must be received in writing by the City Clerk before the close of the Public Hearing referenced above.

Written protests regarding the solid waste rate adjustments may be mailed to:

City of Grover Beach
Attn: City Clerk
154 South 8th St
Grover Beach, CA 93433
Written protests may also be personally delivered to the City Clerk at Grover Beach City Hall located at 154 South 8th St, Grover Beach, California.

If valid written protests are presented by a majority of owners and/or tenants-customers of parcels receiving solid waste, recycling, and green waste services within the City limits, then the City will not adjust the rates for the services.

SOUTH COUNTY SANITARY SERVICE
RATE ADJUSTMENT EFFECTIVE JANUARY 1, 2025

CITY OF GROVER BEACH
Service Description Pickups Per Week
Monthly Rates
Effective
01/01/2024
Proposed Rate
Adjustment
Monthly Rates
Effective
01/01/2025
RESIDENTIAL SINGLE FAMILY DWELLING AND MULTI-UNIT (4 UNITS OR LESS):
32 Gallon Waste Wheeler 1 $24.23

1.22 $25.45
64 Gallon Waste Wheeler 1 $32.74

1.64 $34.38
96 Gallon Waste Wheeler 1 $41.23

2.07 $43.30
TWO-64 Gallon Waste Wheelers 1 $49.76

2.50 $52.26
ONE 64 & ONE 96 Gallon 1 $58.26

2.92 $61.18
TWO-96 Gallon Waste Wheelers 1 $66.77

3.35 $70.12
Residential customers must use the waste wheelers provided by the garbage company. This solid service fee for residential trash collections (container with black or gray lid) includes once a week pick-up of one greenwaste/organics container (green lid), and one recycling container (blue lid).

MULTI-FAMILY (5 or MORE)
Rates are the same as commercial dumpsters and waste wheeler rates (below).

COMMERCIAL DUMPSTERS - ALL AREAS:
1 yd dumpster 1 $113.14

5.68 $118.82
1 yd dumpster 2 $168.23

8.45 $176.68
1 yd dumpster 3 $229.18

11.50 $240.68
1 yd dumpster 4 $290.11

14.56 $304.67
1 yd dumpster 5 $342.30

17.18 $359.48
1 yd dumpster 6 $409.07

20.54 $429.61
1 yd dumpster 7 $499.60

25.08 $524.68

1.5 yd dumpster 1 $130.55

6.55 $137.10

1.5 yd dumpster 2 $205.98

10.34 $216.32

1.5 yd dumpster 3 $290.11

14.56 $304.67

1.5 yd dumpster 4 $377.16

18.93 $396.09

1.5 yd dumpster 5 $461.25

23.15 $484.40

1.5 yd dumpster 6 $548.29

27.52 $575.81

1.5 yd dumpster 7 $667.07

33.49 $700.56

SOUTH COUNTY SANITARY SERVICE
RATE ADJUSTMENT EFFECTIVE JANUARY 1, 2025

CITY OF GROVER BEACH
Service Description Pickups Per Week
Monthly Rates
Effective
01/01/2024
Proposed Rate
Adjustment
Monthly Rates
Effective
01/01/2025
2 yd dumpster 1 $147.95

7.43 $155.38
2 yd dumpster 2 $243.68

12.23 $255.91
2 yd dumpster 3 $356.80

17.91 $374.71
2 yd dumpster 4 $469.97

23.59 $493.56
2 yd dumpster 5 $574.37

28.83 $603.20
2 yd dumpster 6 $687.54

34.51 $722.05
2 yd dumpster 7 $840.70

42.20 $882.90
3 yd dumpster 1 $176.96

8.88 $185.84
3 yd dumpster 2 $339.44

17.04 $356.48
3 yd dumpster 3 $469.97

23.59 $493.56
3 yd dumpster 4 $612.10

30.73 $642.83
3 yd dumpster 5 $728.17

36.55 $764.72
3 yd dumpster 6 $864.50

43.40 $907.90
3 yd dumpster 7 $1,100.96

55.27 $1,156.23
4 yd dumpster 1 $229.18

11.50 $240.68
4 yd dumpster 2 $388.71

19.51 $408.22
4 yd dumpster 3 $556.98

27.96 $584.94
4 yd dumpster 4 $728.17

36.55 $764.72
4 yd dumpster 5 $896.43

45.00 $941.43
4 yd dumpster 6 $1,067.56

53.59 $1,121.15
4 yd dumpster 7 $1,362.59

68.40 $1,430.99
6 yd dumpster 1 $343.77

17.26 $361.03

SOUTH COUNTY SANITARY SERVICE
RATE ADJUSTMENT EFFECTIVE JANUARY 1, 2025

CITY OF GROVER BEACH
Service Description Pickups Per Week
Monthly Rates
Effective
01/01/2024
Proposed Rate
Adjustment
Monthly Rates
Effective
01/01/2025
6 yd dumpster 2 $583.05

29.27 $612.32
6 yd dumpster 3 $835.47

41.94 $877.41
6 yd dumpster 4 $1,092.26

54.83 $1,147.09
6 yd dumpster 5 $1,344.68

67.50 $1,412.18
6 yd dumpster 6 $1,601.36

80.39 $1,681.75
6 yd dumpster 7 $2,043.91

102.60 $2,146.51
8 yd dumpster 1 $458.37

23.01 $481.38
8 yd dumpster 2 $777.43

39.03 $816.46
8 yd dumpster 3 $1,113.97

55.92 $1,169.89
8 yd dumpster 4 $1,456.37

73.11 $1,529.48
8 yd dumpster 5 $1,792.87

90.00 $1,882.87
8 yd dumpster 6 $2,135.16

107.19 $2,242.35
8 yd dumpster 7 $2,725.17

136.80 $2,861.97
The rates shown above include the monthly container rental fee and a semi-annual dumpster cleaning.

COMMERCIAL - OTHER CHARGES:

Rates for all commercial customers include recycling or greenwaste/organics pickup once per week, included with the garbage service rate. Customers can choose from a 64 or 96 gallon blue commingled recycle waste wheeler or a 32 or 64 gallon organics waste wheeler included with the garbage service rate (96 gallon waste wheelers can only be used with green waste due to weight). If you need a bin for recycling there is a charge (see below).

If you need more frequent recycling, including organics/greenwaste service, it can be provided at a 50% discount from the garbage service rates for the specified level of service required.

COMMERCIAL GARBAGE CANS - ALL AREAS:
32 Gallon Waste Wheeler 1 $31.91

1.60 $33.51
64 Gallon Waste Wheeler 1 $58.03

2.91 $60.94
96 Gallon Waste Wheeler 1 $72.54

3.64 $76.18
Re-deliver bin to stopped acct $54.16

2.72 $56.88
MISCELLANEOUS CHARGES - ALL CUSTOMERS:

SOUTH COUNTY SANITARY SERVICE
RATE ADJUSTMENT EFFECTIVE JANUARY 1, 2025

CITY OF GROVER BEACH
Service Description Pickups Per Week
Monthly Rates
Effective
01/01/2024
Proposed Rate
Adjustment
Monthly Rates
Effective
01/01/2025
Overstacked Garbage & extra
bags Minimum/unit each $7.56

0.38 $7.94
Overstacked Greenwaste & extra
bags Minimum/unit each $3.79

0.19 $3.98
Overstacked Blue Bin & extra bags
Minimum/unit each $3.80

0.19 $3.99
In yard service (per can or
commodity) IN ADDITION TO
STANDARD GARBAGE RATES per month $18.88

0.95 $19.83
Monthly charge for additional 32,
64 or 96-gallon green
waste/organics service per month $5.23

0.26 $5.49
Monthly charge for additional 32,
64 or 96-gallon recycle service per month $2.14

0.11 $2.25
Vacant Rate per month $17.62

0.88 $18.50
Waste wheeler cleaning each time $28.17

1.41 $29.58
Trip charge each time $18.89

0.95 $19.84
Non-payment downsize service each time $18.89

0.95 $19.84
Non-payment redeliver waste
wheeler each time $45.41

2.28 $47.69
Non-payment reconnect service each time $45.41

2.28 $47.69
Small item pickup (TV, toilet) each $44.31

2.22 $46.53
Appliance pickup-residential each $62.49

3.14 $65.63
Lock Charge per month $10.52

0.53 $11.05
City Clean Up each $16.44

0.83 $17.27
Garbage extras on your scheduled
pickup day per yard $15.94

0.80 $16.74
Garbage extras -NOT ON YOUR
SCHEDULED PICKUP DAY per yard $44.00

2.21 $46.21
Commercial Waste Wheeler rent per month $5.85

0.29 $6.14
Re-deliver bin on stopped acct each time $54.16

2.72 $56.88
Compactors per yard $21.48

1.08 $22.56
Sunday Service (in additional to
garbage service level) per month $94.55

4.75 $99.30

SOUTH COUNTY SANITARY SERVICE
RATE ADJUSTMENT EFFECTIVE JANUARY 1, 2025

CITY OF GROVER BEACH
Service Description Pickups Per Week
Monthly Rates
Effective
01/01/2024
Proposed Rate
Adjustment
Monthly Rates
Effective
01/01/2025
Recycle bin rental per month $65.28

3.28 $68.56
Stand by time per hour $90.63

4.55 $95.18
Extra bin cleaning $84.51

4.24 $88.75
Damage/Destruction of bins or
waste wheelers
Replacement/repair at market price
Short Term Dumpsters:

Delivery & Pickup-Bin $54.16

2.72 $56.88
Delivery & Pickup-Waste Wheeler $18.88

0.95 $19.83
Rental Per Day $5.85

0.29 $6.14
Empties Per Yard $44.00

2.21 $46.21
Mattress:

Twin PER SET $24.59

1.23 $25.82
Double PER SET $24.59

1.23 $25.82
Queen PER SET $24.59

1.23 $25.82
King PER SET $24.59

1.23 $25.82
ADDITIONAL INFORMATION ALL CUSTOMERS:

1. Customers requesting Temporary Bins or Roll-off Box Service can call the office for current rates

2. Polystyrene (Styrofoam, Plastic #6) is not collected for recycling and should be thrown away as trash. Please bag Styrofoam packing peanuts before placing in trash container.

3. It is encouraged to bag your trash in the garbage container but do not bag your recyclables or green waste in their respective containers and keep it loose.

4. Recycling, Greenwaste/Organcis and Garbage containers should spaced 3 feet apart away from any obstacles (i.e mailboxes, cars, etc) before 6:00am on collection service day.

5. The fee schedule above only includes the Garbage Company rates and does not include IWMA fees, which are separately noted on the billings.

6. Cleaning fees will be billed on a time and materials basis

7. Late Fees are imposed for residential customers over 30 days delinquent. The fee is 1.5% per month of the outstanding charge, with a minimum fee of $5.00. No prior notice is required, as this late fee policy is stated at the bottom of every bill.

8. Customers can be charged for contamination fees in the trash, recycling and/or the greenwaste/organics containers.

Any additional recycling, including greenwaste/organic services are charged out at 50% of the garbage rate.