Morro Bay City Council
January 9, 2024

CITY OF MORRO BAY
City Council Regular Meeting Agenda

Tuesday, January 9, 2024, 5:30 p.m.

Veterans Memorial Hall, 209 Surf St., Morro Bay, CA
Public Participation
Public participation is offered in the following ways:
• Community members may attend the meeting in person at the Morro Bay Veterans Hall.

Alternatively, members of the public may watch the meeting and speak during general Public Comment or on a specific agenda item by logging into the Zoom webinar using the information provided below. Please use the "raise hand" feature to indicate your desire to provide public comment.
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Zoom webinar link:
https://us02web.zoom.us/j/82722747698?pwd=aWZpTzcwTHlRTk9xaTlmWVNWRWFU QT09
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• Password: 135692
Or Telephone Attendee: 1 (408) 638-0968 or 1 (669) 900-6833 or 1 (346) 248-7799; Webinar ID: 827 2274 7698; Password: 135692: Press *9 to raise hand for public comment.
•
• Meetings are also broadcast on cable Channel 20 and streamed on the City's website.

Community Members are encouraged to submit agenda correspondence via email to the City Council at [email protected] prior to the meeting. Agenda correspondence received by 10:00 a.m. on the meeting day will be posted on the City website. •
Pages

1. ESTABLISH QUORUM AND CALL TO ORDER

2. MOMENT OF SILENCE

3. PLEDGE OF ALLEGIANCE

4. REPORTS

4.a Closed Session Report

4.b Mayor and Councilmembers' Reports, Announcements and Presentations

4.c City Manager Reports, Announcements and Presentations

5. RECOGNITION AND PRESENTATIONS

5.a City of Morro Bay Years of Service Awards 7

5.b Shower Program Presentation by Wendy Blackert, 805 Street Outreach 14

6. PUBLIC COMMENT
Members of the audience wishing to address the Council on City business matters not on the agenda may do so at this time. For those desiring to speak on items on the agenda, but unable to stay for the item, may also address the Council at this time.

Public comment is an opportunity for members of the public to provide input to the governing body. To increase the effectiveness of the Public Comment Period, the City respectfully requests the following guidelines and expectations be followed:
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Those desiring to speak are asked to complete a speaker slip, which are located at the entrance, and submit it to the City Clerk. However, speaker slips are not required to provide public comment. •
When recognized by the Mayor, please come forward to the podium to speak. Though not required, it is helpful if you state your name, city of residence and whether you represent a business or group. Unless otherwise established by the Mayor, comments are to be limited to three minutes.
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All remarks should be addressed to Council, as a whole, and not to any individual member thereof.
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The Council respectfully requests that you refrain from making slanderous, profane or personal remarks against any elected official, commission and/or staff.
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Please refrain from public displays or outbursts such as unsolicited applause, comments or cheering.
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Any disruptive activities that substantially interfere with the ability of the City Council to carry out its meeting will not be permitted and offenders will be requested to leave the meeting.
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Your participation in City Council meetings is welcome and your courtesy will be appreciated.
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The Council in turn agrees to abide by its best practices of civility and civil discourse according to Resolution No. 07-19.
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7. CONSENT AGENDA
Unless an item is pulled for separate action by the City Council, the following actions are approved without discussion. The public will also be provided an opportunity to comment on consent agenda items.

Recommended Action
Approve Consent Agenda Items 7.a. through 7.b & f. as submitted.

7.a Approval of Minutes

(City Clerk)
Recommended Action
Approve as submitted.

1. November 14, 2023 Regular Council Meeting 15

2. December 12, 2023 Special Closed Session Meeting 22

7.b Appointment of Mayor Pro Tempore; Appointment of Representatives on Discretionary Boards; Approval of Council Liaison Assignments and various Council Sub-committees for 2024
24 (Mayor/City Clerk)
Recommended Action
Appoint Council Member Zara Landrum as Mayor Pro Tempore; appoint representatives to serve on various County or Regional Discretionary Boards; and approve Council liaison assignments and Council SubCommittees for calendar year 2024 as shown on the attached appointment list.

7.c Adoption of Resolution No. 01-24 Establishing the 2024 City Council Meeting Calendar and Budget Development Schedule
29 (City Manager)
Recommended Action
Adopt Resolution No. 01-24 approving the 2024 City Council Meeting Calendar and Budget Development Schedule with the addition of July 23rd as a Regular Meeting to be canceled if not needed.

7.d Adoption of Ord. No. 665 for Regulation of Camping and Storage of Personal Property on Public Property; and Adoption of Ord. No. 666 for Regulation of Overnight Human Habitation of Vehicles on Certain Private Property
38 (Police Department/Fire Department)
Recommended Action
Adopt by second reading, Ordinance No. 665, "An Ordinance of the City Council of the City of Morro Bay, California Adding Chapter 8.26 to Title 8 of the Morro Bay Municipal Code Regulating Camping and Storage of Personal Property on
Public Property to Mitigate Harm to Public Health, Safety and Welfare”; and

1. Adopt by second reading, Ordinance No. 666, “An Ordinance of the City Council of the City of Morro Bay, California Adding Chapter 8.27 to Title 8 of the Morro Bay Municipal Code Regulating Overnight Human Habitation of Vehicles on Private Property Used for Business or Nonprofit Organization
Operations to Mitigate Harm to Public Health, Safety and

1.

Welfare.”

7.e Approval of COL for Lease Sites 49/49W, 50-51/50W-51W and 52/52W, Bayside Landing and Suites project, presented by Paul Gillen 65 (Harbor Department)
Recommended Action
Adopt Resolution No. 02-24 approving the Consent of Landowner (“COL”) so that the Developer can move forward with an application for a Conditional Use Permit thus allowing the Community Development Department, Planning Commission, and the public the opportunity to review and comment on the proposed project.

7.f Adoption of Resolution No. 03-24 Approving the Terms and Conditions of the Second Amended and Restated Joint Powers Agreement with the San Luis Obispo County Integrated Waste Management Authority (IWMA)
134
(Public Works)
Recommended Action
Adopt Resolution No. 03-24 to authorize the Mayor to sign the second amended and restated Joint Powers Agreement on behalf of the City of Morro Bay subject to any final, non-substantive revisions as to form being approved by the City Manager and City Attorney's Office.

7.g Approval of Amendment #1 to the Commercial Building Lease Agreement with Three Stacks and a Rock Brewing Company, LLC., for Lease Site 69-70/69W-70W located at 595 Embarcadero Road 143
(Harbor Department)
Recommended Action
Adopt Resolution No. 04-24 approving Amendment #1 to the Commercial Building Lease Agreement between the City of Morro Bay and Three Stacks and a Rock Brewing Co. (“Three Stacks”) for Lease Site 69-70/69W-70W located at 595 Embarcadero Road (the “Lease”), to add an equitable percentage rent rate beginning May 1, 2023 for the remainder of the Lease term with the following amendment: Section 1 refers to percentage sales - intent is to make percent gross on alcohol sales to be 5% for the first two years, thereafter 10%. with the added condition for tenant to provide receipts supporting cost of building improvements.

8. PUBLIC HEARING ITEMS
None

9. BUSINESS ITEMS

9.a Short-term Rental Ordinance Review - Requested by Council Member 152

Landrum
(City Manager)
Recommended Action
Receive information from Council Member Landrum and staff, then direct next steps. Options include:

Continue to monitor its overall effectiveness and bring back for future review.

1. Clarify certain weakness of current process and direct improvements accordingly, which may or may not result in ordinance change.

2. 3. Revamp the entire process. This is not recommended.

9.b Consideration of Revisions to the City Council Policies & Procedures to add Section 5.5 Establishing a Policy regarding the use of Public Resources by Elected Officials
164
(City Manager)
Recommended Action
Adopt Resolution No. 05-24 amending the City Council Policies & Procedures, to add Section 5.5 establishing a policy regarding the use of public resources by elected officials, allowing the use of city facilities free of charge for individual outreach and town hall sessions up to six times per year except during the election season beginning 120 days prior to an election to fill City office.

9.c Quarterly Update on Fiscal Year (FY) 2023-24 and 2024-25 City Council Goals and Action Items
170
(City Manager)
Recommended Action
Receive a progress report on the City Council goals, goals' statements, and action items, provide direction regarding future updates and consideration of modifying previously adopted goals.

10. COUNCIL DECLARATION OF FUTURE AGENDA ITEMS

11. ADJOURNMENT
The next Regular Meeting will be held on January 23, 2024.

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, 595 Harbor Street, Morro Bay, CA 93442 for any revisions or call the Clerk's office at (805) 772-6205 for further information.

Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are available for public inspection upon request by calling the City Clerk's office at (805) 772-6205.

In compliance with the Americans Disability Act, if you need special assistance to participate in a City meeting, please contact the Clerk's office 24 hours prior to the meeting to insure reasonable arrangements can be made to provide accessibility to the meeting.

Years Of
Service Awards
2023

10 Years of Service
• JR Lopez Maintenance Leadworker, Public Works Department • Michael Kelly Fire Engineer/Paramedic, Fire Department

15 Years of Service
• Robbie Victor Lead Utility Operator, Public Works Department

20 Years of Service
• Pat Bernard Mechanic, Public Works Department
• Angelica Jepsen Recreation Supervisor – Youth, Recreation Dept • Michael Talmadge Fire Captain/Paramedic, Fire Department

Retirements
2023

• Scott Subler Fire Captain/Paramedic – 34 Years of Service • Walter Roza Consolidated Maint Worker III – 21 Years of Service • Steve Doerr Information Systems Technician – 26 Years of Service

DATE: January 4, 2024
TO: Honorable Mayor, City Council Members and Community Members FROM: Yvonne Kimball, City Manager
SUBJECT: Shower Program Presentation by Wendy Blackert, 805 Street Outreach As part of the City’s overall homelessness response plan, the City’s Homelessness Working Group has been working on a shower program intending to help unhoused individuals become self-sufficient and ultimately reduce homelessness in Morro Bay. Similar programs have been implemented and brought positive results across the state.

After a year of research and networking, the City’s Working Group was able to partner with Wendy Blackert of 805 Street Outreach and, with the support of San Luis Obispo County Library, bring forward a shower program beginning 2024. 805 Street Outreach is a non-profit service-oriented organization that will be managing and implementing the shower program. The program is tentatively scheduled to debut on Monday, January 15th at the Morro Bay Library parking lot. Thereafter, it is intended to operate the 1st and 3rd Mondays of the month from 12 noon to 3 p.m. The library is closed on Mondays so the shower program will not interfere with normal library programs. SLO County Library is supportive of the shower program and remains a critical partner and sponsor.
805 Street Outreach plans to bring other service organizations to the shower program so that it will be an efficient service fair for the intended clients. Wendy Blackert from 805 Street Outreach will join us to explain the program details.

MINUTES - MORRO BAY CITY COUNCIL
REGULAR MEETING – NOVEMBER 14, 2023
VETERAN’S MEMORIAL HALL – 5:30 P.M.

PRESENT: Carla Wixom Mayor
Laurel Barton Council Member
Cyndee Edwards Council Member
Jennifer Ford Council Member
Zara Landrum Council Member
STAFF: Yvonne Kimball City Manager
Chris Neumeyer City Attorney
Dana Swanson City Clerk
Steve Conway Interim Assist. City Manager/Admin Svcs Dir.

Greg Kwolek Public Works Director
Scot Graham Community Development Director
Daniel McCrain Fire Chief
Amy Watkins Police Chief
Ted Schiafone Harbor Director
Cindy Jacinth Planning Manager

ESTABLISH QUORUM AND CALL TO ORDER
Mayor Wixom called the meeting to order at 5:30 p.m., with all members present.

MOMENT OF SILENCE

PLEDGE OF ALLEGIANCE
RECOGNITION – None
CLOSED SESSION REPORT – City Attorney Neumeyer stated no reportable action was taken by the City Council in accordance with the Brown Act.

MAYOR & COUNCILMEMBERS’ REPORTS, ANNOUNCEMENTS & PRESENTATIONS https://youtu.be/9Gnn1LrOvvE?si=mVa6DOfTrvgt3Q7T&t=159
CITY MANAGER REPORTS, ANNOUNCEMENTS AND PRESENTATIONS - None

PRESENTATIONS
https://youtu.be/9Gnn1LrOvvE?si=O8vwnFWcIFapU4RM&t=655
 Astound Business Solutions Presentation by Jeff Buckingham Mayor Wixom requested and received full support to pull Item C-3 from the agenda and move the item to a January 2024 meeting.

PUBLIC COMMENT
https://youtu.be/9Gnn1LrOvvE?si=25N0cfa8N1Z_lN6S&t=1299 Judi Brown, Morro Bay, requested City support to resolve neighborhood issues at 995 Allesandro Street.

Jenny Jones, Morro Bay, expressed concern about activities at 995 Allesandro and asked that the City hold the trustee responsible and accountable.

AGENDA NO: 7.a.1
MEETING DATE: January 9, 2024

2 MINUTES - MORRO BAY CITY COUNCIL MEETING – NOVEMBER 14, 2023 Linda Winters, Morro Bay, announced the upcoming Morro Bay Community Thanksgiving dinner and asked what preparations were being made for storms and potential flooding.

Barbara Alward, Morro Bay, commented on issues occurring on Allesandro Street.

Harmony Kranes, Morro Bay, spoke regarding Allesandro Street neighborhood concerns.

Terry Simons, Morro Bay, requested the Council authorize staff to submit letters to the District Attorney’s office in an effort to resolve issues on Allesandro Street.

Tim Cleath, owner of Rhapsody In View hotel in north Morro Bay, announced their grand opening next month.

Ginger Machado, Morro Bay resident and owner of FitnessWorks, spoke regarding the challenges of dealing with the homeless population in the creek area along Quintana and requested an ordinance prohibiting camping on public easements and sidewalks in the City.

Mary Caparini, Morro Bay, shared concerning interactions with the homeless population when picking up mail at the UPS store.

John Hash, Morro Bay, while frustrated with the homeless encampments along Quintana, was not in favor of the proposed shopping cart ordinance.

An unnamed resident urged the community to treat the homeless population with compassion.

Wynde Dyer, Morro Bay, expressed appreciation for the listening sessions hosted by Council Member Landrum and thanked Juan Carlos from Astound Business Solutions for his support.

Rob Frasier, Morro Bay resident and owner of properties on Main Street, thanked the City for help during last year’s flood and urged everyone to work together to address homelessness issues.

Mayor Wixom closed public comment.

The Council and staff responded to issues raised during public comment.

A. CONSENT AGENDA
https://youtu.be/9Gnn1LrOvvE?si=zyepIif4Mfl-KDcp&t=3583 Unless an item is pulled for separate action by the City Council, the following actions are approved without discussion. The public will also be provided an opportunity to comment on consent agenda items.

A-1 APPROVAL OF MINUTES FOR THE OCTOBER 24, 2023, CITY COUNCIL MEETING; (CITY CLERK)
RECOMMENDATION: Approve as submitted.

A-2 FIRST QUARTER INVESTMENT REPORT (PERIOD ENDING SEPTEMBER 30, 2023) FOR FISCAL YEAR (FY) 2023-24; (ADMINISTRATIVE SERVICES DEPARTMENT) RECOMMENDATION: Receive the attached First Quarter Investment Report (period ending September 30, 2023) for FY 2023-24.

3 MINUTES - MORRO BAY CITY COUNCIL MEETING – NOVEMBER 14, 2023 A-3 ADOPTION OF RESOLUTION NO. 72-23 APPROVING AMENDMENT NO. 5 TO THE

MORRO BAY TRANSIT AND TROLLEY OPERATIONS AND MANAGEMENT AGREEMENT WITH MV TRANSPORTATION, INC.; (PUBLIC WORKS DEPARTMENT) RECOMMENDATION: Staff recommends the City Council adopt Resolution No. 72- 23 approving Amendment No. 5 to the Morro Bay Transit and Trolley Operations and Management Agreement with MV Transportation, Inc. (MV).

A-4 AUTHORIZE EXECUTION OF LICENSE AGREEMENT WITH LIBERTINE AND HARBORWALK PLAZA LEASE SITES, 801 AND 833 EMBARCADERO
RESPECTIVELY, TO ENABLE JOINT ACCESS BETWEEN BUILDINGS; (COMMUNITY

DEVELOPMENT DEPARTMENT)
RECOMMENDATION: Staff recommends the City Council review the staff report and authorize execution of the License Agreement.

A-5 OCTOBER 2023 POLICE AND FIRE DEPARTMENT CALLS FOR SERVICE REPORTS; (POLICE DEPARTMENT/FIRE DEPARTMENT)
RECOMMENDATION: Receive and file.

A-6 PROCLAMATION DECLARING NOVEMBER AS “FAMILY COURT AWARENESS MONTH”; (ADMINISTRATION)
RECOMMENDATION: Approved as submitted.

A-7 PROCLAMATION DECLARING NOVEMBER AS “NATIONAL HOSPICE AND PALLIATIVE CARE MONTH”; (ADMINISTRATION)
RECOMMENDATION: Approved as submitted.

Mayor Wixom opened public comment for the Consent Agenda. https://youtu.be/9Gnn1LrOvvE?si=6erha3sLrFTSrHLc&t=3592 Betty Winholtz, Morro Bay, spoke regarding the trolley contract (Item A-3) and suggested the City explore RTA and other transportation alternatives.

The public comment period was closed.

MOTION: Council Member Barton moved approval of Consent Items A-1 through A-7. The motion was seconded by Council Member Edwards and carried 5-0.

B. PUBLIC HEARINGS
B-1 INTRODUCTION AND FIRST READING OF ORDINANCE NO. 662: AMENDMENTS TO 2022 ZONING CODE/COASTAL IMPLEMENTATION PLAN (IP) AND ZONING MAP AMENDMENTS AND ADOPTION OF RESOLUTION NO. 73-23 FOR A GENERAL

PLAN/ LOCAL COASTAL PROGRAM (LCP) COASTAL LAND USE PLAN MAP AMENDMENT AND INTRODUCTION AND FIRST READING OF ORDINANCE NO. 661:

AMENDMENT TO 2022 ZONING CODE TO ADOPT OBJECTIVE DESIGN STANDARDS ESTABLISHED AS CHAPTER 17.31; (COMMUNITY DEVELOPMENT

DEPARTMENT)
https://youtu.be/9Gnn1LrOvvE?si=crZoJb1RS9FHhMQn&t=3695 Planning Manager Jacinth provided the report and responded to Council inquiries.

4 MINUTES - MORRO BAY CITY COUNCIL MEETING – NOVEMBER 14, 2023 Mayor Wixom opened the Public Hearing.

Mayor Wixom opened Public Comment.
https://youtu.be/9Gnn1LrOvvE?si=2vG-0RnBu15AHe9E&t=4758 Terry Simons, Morro Bay, appreciated staff’s recommendation that fence heights in existence as of the date of adoption of Ordinance 662 be allowed to remain but suggested a maximum height be established. He urged the Council to consider a grace period for those whose residential property was re-zoned and that they be given the opportunity to request a modification.

Betty Winholtz, Morro Bay, suggested the Building Code be amended to require elevators for 3-story or higher buildings and that parapets be made optional in the Objective Design Standards. Regarding the Zoning Ordinance, she agreed with the Planning Commission’s recommendation to bring maximum heights down to 30 feet. She agreed with the previous speaker that a maximum fence height be established but that grandfathering happen as of 2019, not on the date of adoption. Lastly, she requested the Morro Elementary property be zoned a public facility.

Nicole Dorfman, Morro Bay, appreciated the reduction of maximum building height to 30 feet and agreed elevators should be required for multi-family projects that are two stories or more.

The Public Hearing and public comment period were closed.

Staff responded to questions raised during public comment.

Following discussion regarding the proposed amendment to Morro Bay Municipal Code section 17.23.060 specifying fence heights in existence as of the date of the adoption of Ordinance No. 662 shall be considered legal, non-conforming and allowed to remain, there was Council consensus to establish a maximum height for existing fences.

MOTION: Council Member Ford moved to:

1. (i) Introduce for first reading by number and title only, with further reading waived, Ordinance No. 662, “An Ordinance of the City Council of the City of Morro Bay, California, Amending the 2022 Zoning Code/Coastal Implementation Plan Title 17 (Zoning) and the Zoning Map which includes miscellaneous amendments to all of Division I and Division II and Chapters 17.23, 17.26, 17.27, 17.29, 17.30, 17.36, 17.38,

17.39, 17.42, 17.43, 17.44, 17.53, and 17.54 of the Morro Bay Municipal Code”; and (ii) adopt Resolution No. 73-23 approving a General Plan/ Local Coastal Program (LCP) Land Use Map amendment; with a finding that no further environmental review is required pursuant to State CEQA Guidelines section 15162, amending MBMC section 17.23.060 Fences and Freestanding Walls to add the amended language to

17.23.060 to item A .1.A. and B that fence heights in existence as of date of adoption of Ordinance No. 662 shall be considered legal non-conforming and allowed to remain to the maximum height of 6 ½ ft.; and

2. Introduce for first reading by number and title only, with further reading waived, Ordinance No. 661, “An Ordinance of the City Council of the City of Morro Bay, California for adoption of Objective Design Standards for inclusion as Chapter 17.31 of the Morro Bay Municipal Code, ‘Residential and Mixed Use Objective Design Standards,’ and further to be an amendment to the 2022 Zoning Code with a finding that no further environmental review is required pursuant to State CEQA Guidelines section 15162.”

5 MINUTES - MORRO BAY CITY COUNCIL MEETING – NOVEMBER 14, 2023 The motion was seconded by Council Member Edwards for discussion.

Following discussion, the motion carried 5-0 by roll call vote.

The Council took a brief recess at 7:25 p.m. The meeting reconvened at 7:36 p.m. with all members present.

C. BUSINESS ITEMS
C-1 CONSIDERATION OF AMENDMENT NO. 4 TO AN EXISTING CONTRACT WITH GHD, INC. FOR COMPLETING THE PROJECT APPROVAL AND ENVIRONMENTAL

DOCUMENT (PA& ED) PHASE FOR INTERSECTION IMPROVEMENTS AT STATE ROUTE 41, STATE ROUTE 1, AND MAIN STREET; (PUBLIC WORKS DEPARTMENT) https://youtu.be/9Gnn1LrOvvE?si=lEj0HjHrSUwxuedD&t=6974 Public Works Director Kwolek provided the report and, along with Paul Valadao from Caltrans and John Rogers from GHD, Inc., responded to Council inquiries.

The public comment period for Item C-1 was opened.
https://youtu.be/9Gnn1LrOvvE?si=XwkqUdGKX_uKwTCi&t=8622 Terry Simons, Morro Bay, spoke in support of staff’s recommendation.

Betty Winholtz, Morro Bay, offered comments and questioned the use of and available Development Impact Fees for this project.

Nattalia Merzoyan, Morro Bay, suggested alternatives be considered that would direct traffic to Morro Bay at other entry points to reduce traffic at this intersection.

Linda Winters, Morro Bay, expressed concern regarding pedestrian safety and importance of traffic calming.

The public comment period for Item C-1 was closed.

MOTION: Council Member Edwards moved to approve and authorize the City Manager to execute Amendment No. 4 (Attachment 1) to the existing amended agreement with GHD Inc., for completion of the Project Approval and Environmental Document (PA&ED) phase for Intersection Improvements at State Route 41, State Route 1, and Main Street (SR-41/SR-1/Main) and extend the contract through January of 2025. The motion was seconded by Council Member Ford and carried 3-2 by roll call vote with Council Member Landrum and Mayor Wixom opposed.

C-2 INTRODUCTION AND FIRST READING OF ORDINANCE NO. 663, AMENDING THE MORRO BAY MUNICIPAL CODE TO ADD CHAPTER 8.15 PERTAINING TO THE

UNAUTHORIZED REMOVAL OF SHOPPING CARTS FROM RETAIL

ESTABLISHMENTS AND FACILITATING RETRIEVAL OF ABANDONED SHOPPING CARTS TO TITLE 8 (“HEALTH AND SAFETY”); (POLICE DEPARTMENT/FIRE

DEPARTMENT)
https://youtu.be/9Gnn1LrOvvE?si=1khNgc-Ngu67xfqf&t=9730 Fire Chief McCrain and Police Chief Watkins provided the report and responded to Council inquiries.

6 MINUTES - MORRO BAY CITY COUNCIL MEETING – NOVEMBER 14, 2023 The public comment period for Item C-2 was opened.
https://youtu.be/9Gnn1LrOvvE?si=9NmOxjL11Zd-6VOY&t=11572 Terry Simons, Morro Bay, suggested alternative methods to be considered to support transient residents.

An unnamed resident opposed the ordinance.

The public comment period for Item C-2 was closed.

MOTION: Council Member Barton moved to introduce for first reading by title only, with further reading waived, Ordinance No. 663, “An Ordinance of the City Council of the City of Morro Bay, California, Amending Title 8 (“Health and Safety”) of the Morro Bay Municipal Code to add Chapter 8.15 pertaining to the unauthorized removal of shopping carts from retail establishments and to facilitate retrieval of abandoned shopping carts.” The motion was seconded by Council Member Edwards and carried 5-0 by roll call vote.

C-3 QUARTERLY UPDATE ON 2023-24 AND FY 2024–25 CITY COUNCIL GOALS AND ACTION ITEMS; (CITY MANAGER)
This item was continued to a January 2024 meeting.

C-4 CONSIDERATION OF REVISIONS TO THE CITY COUNCIL POLICIES & PROCEDURES TO ADD SECTION 5.5 ESTABLISHING A POLICY REGARDING THE USE OF PUBLIC RESOURCES BY ELECTED OFFICIALS; (CITY MANAGER) https://youtu.be/9Gnn1LrOvvE?si=qAiG46_FtnIy1Jet&t=12298 City Manager Kimball provided the report and responded to Council inquiries.

The public comment period for Item C-4 was opened.
https://youtu.be/9Gnn1LrOvvE?si=OmXMOXfcu8dRqjIy&t=13558 Terry Simons, Morro Bay, was enthusiastic about building community support through council member led town hall events and discouraged efforts to limit the number of opportunities to do so.

There was consensus to go past 9:30 to finish this item.

Jeff Eckles, Morro Bay, suggested the Council establish time period before election where a sitting council member not have that opportunity.

The public comment period for Item C-4 was closed.

There was consensus for individual council members to submit suggested policy language to the City Manager and bring back options at a future meeting.

D. COUNCIL DECLARATION OF FUTURE AGENDA ITEMS
https://youtu.be/9Gnn1LrOvvE?si=TaFgOHVmLjr7w0cr&t=15768 Council Member Landrum requested consideration of a Building Code amendment requiring elevators in housing developments and received majority support to send for Planning Commission review then City Council.

7 MINUTES - MORRO BAY CITY COUNCIL MEETING – NOVEMBER 14, 2023 Council Member Landrum requested consideration of eliminating artificial turf and received majority support to bring back an informational item.

The meeting adjourned at 10:08 p.m.

Recorded by:

Dana Swanson
City Clerk

MINUTES - MORRO BAY CITY COUNCIL
SPECIAL CLOSED SESSION MEETING –
DECEMBER 12, 2023 – 2:30 P.M.

CITY HALL CONFERENCE ROOM
PRESENT: Carla Wixom Mayor
Laurel Barton Council Member
Cyndee Edwards Council Member
Jennifer Ford Council Member
Zara Landrum Council Member
ABSENT: None
STAFF: Yvonne Kimball City Manager
Chris Neumeyer City Attorney
Scot Graham Community Development Director
Ted Schiafone Harbor Director
Lori Stilts Harbor Business Coordinator
Eric Riddiough City Engineer
Austin Della Senior Engineer

ESTABLISH QUORUM AND CALL TO ORDER
Mayor Wixom called the meeting to order at 2:30 p.m. with all but Council Member Landrum present. Council Member Landrum arrived at 2:35 p.m.

SUMMARY OF CLOSED SESSION ITEMS – The Mayor read a summary of Closed Session items.

CLOSED SESSION PUBLIC COMMENT – Mayor Wixom opened public comment for items on the agenda.

Sean Green, Morro Bay, suggested the City consider issuing a Request for Proposals for the aquarium site with the current tenant operating under a 10-year lease. Regarding lease sites in general, he recommended the City conduct audits to hold lease holders accountable for adherence to Conditional Development Permit and other requirements.

The public comment period was closed.

The City Council moved to Closed Session and heard the following items:

CS-1 PUBLIC EMPLOYEE PERFORMANCE EVALUATION
City Manager pursuant to Government Code section 54957
CS-2 CONFERENCE WITH REAL PROPERTY NEGOTIATOR - GOVERNMENT CODE SECTION 54956.8 Property: APN No. 066-280-045 and 066-044-011, 1130 Napa Ave., Morro Elementary School
Property Negotiators: San Luis Coastal Unified School District Agency Negotiators: Scot Graham, Community Development Director; Yvonne Kimball, City Manager; and Chris Neumeyer, City Attorney
Negotiation: Price and Terms of Payment
CS-3 CONFERENCE WITH REAL PROPERTY NEGOTIATOR - GOVERNMENT CODE SECTION 54956.8 Property: Lease Site 78-81/78W-81W, Dutchman’s Seafood House, 701 Embarcadero Road Property Negotiator: Paul and Leon VanBeurden
Agency Negotiators: Lori Stilts, Harbor Business Coordinator; Yvonne Kimball, City Manager; Chris Neumeyer, City Attorney
Negotiation: Price and Terms of Payment
AGENDA NO: 7.a.2
MEETING DATE: January 9, 2024

2 MINUTES - MORRO BAY CITY COUNCIL CLOSED SESSION – DECEMBER 12, 2023 CS-4 CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code subdivision 54956.9(d)(2); One Matter CS-5 CONFERENCE WITH REAL PROPERTY NEGOTIATOR - GOVERNMENT CODE SECTION 54956.8 Property: Lease Site 69-70/69W-70W, 595 Embarcadero
Property Negotiators: Chuck Nettnin, Three Stacks and a Rock Brewing Co. LLC Agency Negotiators: Ted Schiafone, Harbor Director; Yvonne Kimball, City Manager; and Chris Neumeyer, City Attorney
Negotiation: Price and Terms of Payment
CS-6 CONFERENCE WITH REAL PROPERTY NEGOTIATOR - GOVERNMENT CODE SECTION 54956.8:

Property: Lease Sites 129W-131W, Morro Bay Fish Company, 1231 Embarcadero Property Negotiator: Giovanni Comin, Central Coast Seafood Agency Negotiators: Ted Schiafone, Harbor Director; Yvonne Kimball, City Manager; Chris Neumeyer, City Attorney
Negotiation: Price and Terms of Payment
CS-7 CONFERENCE WITH REAL PROPERTY NEGOTIATOR - GOVERNMENT CODE SECTION 54956.8 Property: Lease Site 30W-33W, 201 Main Street, WBAM LLC., Bayfront Marina Property Negotiators: Greg and Kathy Shaffer (WBAM, LLC) Agency Negotiators: Ted Schiafone, Harbor Director; Yvonne Kimball, City Manager; and Chris Neumeyer, City Attorney
Negotiation: Price and Terms of Payment
RECONVENE IN OPEN SESSION – The City Council reconvened in Open Session. The Council did not take any reportable action in accordance with the Brown Act.

ADJOURNMENT - The meeting adjourned at 5:23 p.m.

Recorded by:

Dana Swanson
City Clerk

Prepared By: ___DS___ Dept Review:___________
City Manager Review: __YK____ City Attorney Review: ____LNL___

Council Report
TO: City Council DATE: December 11, 2023
FROM: Carla Wixom, Mayor
Dana Swanson, City Clerk
SUBJECT: Appointment of Mayor Pro Tempore; Appointment of Representatives on Discretionary Boards; approval of Council Liaison Assignments and various Council Sub-Committees for 2024

RECOMMENDED ACTION
Appoint Council Member Zara Landrum as Mayor Pro Tempore; appoint representatives to serve on the various County or Regional Discretionary Boards; and approve Council Liaison Assignments and Council Sub-Committees for calendar year 2024 as shown on the attached appointment list.

DISCUSSION
Mayor Pro Tempore
The City Council Policies and Procedures Section 3.2 (Appointment of Mayor Pro Tempore) states:
“The appointment of the Mayor Pro Tempore shall be for a one-year term and shall be made at the first meeting in January. For appointment as Mayor Pro Tempore, a Council Member must be on the Council at least one year. Of those who have been on the Council for at least one year, the Council Member who has not yet held the position shall be appointed Mayor Pro Tempore. If there are two Council Members who have not yet held the position, then the Council Member receiving the highest number of votes in the most recent election shall be appointed Mayor Pro Tempore. If all have held the position, then the Council Member who has held it the least number of times shall be appointed Mayor Pro Tempore. If all Council Members have held it for the same number of years, then the Council Member for whom it has been the longest period of time since holding the position shall be appointed Mayor Pro Tempore.”
Last year, Council Member Ford served as Mayor Pro Tempore and, in the year prior, Council Member Barton served as Mayor Pro Tempore. Council Members Landrum and Edwards are both eligible; however, Council Member Landrum received the highest number of votes in the 2022 election and would, therefore, receive the appointment. As AGENDA NO: 7.b
MEETING DATE: January 9, 2024

a result, Council Member Landrum is recommended to be appointed as Mayor Pro Tempore for calendar year 2024.

Representatives to serve on County or Regional Discretionary Boards The City Council Policies and Procedures Section 6.1 (“County or Regional Representation”) states:
“Annually the Mayor shall make appointments to a variety of County and/or regional committees and boards. One Member of the Council shall serve as a voting representative and one member shall serve as alternate. To the best of their ability, Voting Delegates shall reflect the majority view of the Council as a whole, rather than their own personal opinions.”
Consistent with Council Policies and Procedures Section 6.1, the Mayor may seek input from City Council regarding appointments to County and/or Regional Boards, but ultimately, the Mayor is responsible for the appointment of these positions.

Council Liaison Assignments
The City Council Policies and Procedures Section 6.2.1 (“Council Liaison Assignments”) states:
“The City Council shall assign a Council liaison to each of the following advisory bodies: Recreation & Parks Commission, Harbor Advisory Board, Public Works Advisory Board, the Citizens Finance Advisory Committee, and the Planning Commission. Council liaisons will also be appointed to the special purpose advisory bodies.

The purpose of the liaison assignment is to facilitate communication between the City Council and the advisory body. The liaison also helps to increase the Council’s familiarity with the membership, programs and issues of the advisory body. In fulfilling their liaison assignment, members should either attend advisory body meetings or watch the meeting broadcasts and present information regarding advisory body meetings to the Council during Council announcements.

Council Members are not participating members of the advisory body, but are there rather to create a linkage between the City Council and the advisory body. In interacting with advisory bodies, Council Members are to reflect the views of the Council as a body. Being an advisory body liaison bestows no special right with respect to advisory body business.”
Pursuant to Council Policies and Procedures Section 6.2.1, the City Council shall assign Council Liaisons to the Advisory Bodies. Attached for Council review and approval is a list of the proposed Council Liaison assignments for 2024.

Council Sub-Committees
The City Council Policies and Procedures Section 3.13 (“Council Sub-Committees”) states:
“From time to time it may be desirable for the City Council to appoint a subcommittee of the whole to address a particular issue. That is especially the case if the issue requires additional work or research. Per the Brown Act, subcommittees must consist of less than a quorum of the body and serve for a limited purpose and time. Therefore, the City Council sub-committees may consist of two

members. Sub-committees shall report back to the full Council for discussion before any formal action can be taken on the pertinent issue. Establishing a subcommittee requires the body to define the purpose, parameters, and duration of the sub-committee. The City Clerk will keep the list of sub-committees and defined description as a record with Council liaison assignments for review annually.”
Attached for Council review and approval is a list of the proposed Council Sub-Committees to establish for calendar year 2024 and proposed Council Sub-Committee assignments for calendar year 2024.

ATTACHMENT

1. Proposed City Council Discretionary Appointments, Liaison Assignments and Council Sub-Committees for 2024.

CITY COUNCIL DISCRETIONARY APPOINTMENTS (2024)
INTEGRATED WASTE MANAGEMENT AUTHORITY (meets the 2nd Wednesday of every month; 1:30pm; Board of Supervisors Chambers, SLO Government Center)
Laurel Barton Designee
Cyndee Edwards Alternate
COUNTY WATER RESOURCES ADVISORY COMMITTEE (meets the 1st Wednesday of the month; 1:30- 3:30pm; City County Library Room, 995 Palm, SLO)
Laurel Barton Delegate
Cyndee Edwards Alternate

SAN LUIS OBISPO REGIONAL TRANSIT AUTHORITY (SLORTA) & SAN LUIS OBISPO AREA COORDINATING COUNCIL (SLOCOG) (RTA meets the 1st Wednesday of odd-numbered months; 8:30am; Board of Supervisors Chambers, SLO County Government Center) (COG meets the 1st Wednesday of month in January, February, April, June, August, October & December; 9:00am; Board of Supervisors Chambers, SLO County Government Center. Occasionally, SLOCOG will hold an off-month meeting immediately following a regularly scheduled RTA meeting.) Carla Wixom Delegate
Zara Landrum Alternate
AIR POLLUTION CONTROL DISTRICT (meets the 4th Wednesday of every other odd numbered month; 9:00am; Board of Supervisors Chambers, SLO County Government Center) Carla Wixom Member
Cyndee Edwards Alternate
COMMUNITY ACTION PARTNERSHIP OF SAN LUIS OBISPO COUNTY, INC. (meets the 3rd Thursday of every month; 5pm; CAPSLO Board Room, 1030 Southwood, SLO). Morro Bay rotated off the Board in 2014, Los Osos CSD is the current coastal city representative.

NATIONAL ESTUARY PROGRAM (Executive Committee meets quarterly; 3rd Wednesday of the month in February, May, August and November; 4-6pm)
Zara Landrum Member
Laurel Barton Alternate
CITY SELECTION COMMITTEE (as needed)
Carla Wixom (Mayor) Member
Zara Landrum (Mayor Pro Tem) Alternate
LEGISLATIVE DELEGATE (as needed)
Carla Wixom (Mayor) Member
Zara Landrum(Mayor Pro Tem) Alternate

SAN LUIS OBISPO COUNTY HOUSING TRUST FUND
City Manager or designee (Comm. Dev.) Member
HOMELESS SERVICES OVERSIGHT COUNCIL (meets the 3rd Wednesday of odd numbered months; 1- 3pm; Family Care Network Conference Room, 1255 Kendall Road. SLO) Zara Landrum Member
Laurel Barton Alternate
FIRST 5 SLO COUNTY – CHILD CARE LIAISON FOR WE ARE THE CARE INITIATIVE Jen Ford Liaison

CITY COUNCIL DISCRETIONARY APPOINTMENTS (2024)
REACH CENTRAL COAST ECONOMIC DEVELOPMENT ROUNDTABLE (meets twice annually) Cyndee Edwards Member
ESTERO BAY ALLIANCE OF CARE (“EBAC”)
Jen Ford Member
Laurel Barton Alternate
CALIFORNIA JPIA (“CJPIA”) ANNUAL BOARD OF DIRECTORS MEETING (held annually the 3rd Wednesday in July)
Carla Wixom, Mayor Voting Delegate
Rachael Hendricks, Human Resources Mgr 1
st Alternate
Yvonne Kimball, City Manager 2
nd Alternate
CITY COUNCIL LIAISON ASSIGNMENTS (2024)
PLANNING COMMISSION (meets 1
st and 3rd Tuesday of every month; 6:00pm; Vets Hall)
Carla Wixom Liaison
HARBOR ADVISORY BOARD (meets the 1st Thursday of the month, except January, July, and November; 5:30pm; Vets Hall)
Zara Landrum Liaison
RECREATION AND PARKS COMMISSION (meets the 3rd Thursday of the month in odd-numbered months; 6:00pm; Vets Hall)
Laurel Barton Liaison
PUBLIC WORKS ADVISORY BOARD (meets the 3rd Wednesday of the month except July, November and December; 5:30pm; Vets Hall)
Jen Ford Liaison
SAN LUIS OBISPO COUNTY TOURISM MARKETING DISTRICT ADVISORY COMMITTEE (meets semiannually on the first Thursday of May and December at Embassy Suites, 333 Madonna Rd., SLO) Jen Ford Liaison
CITIZENS OVERSIGHT / FINANCE COMMITTEE (meets the 3rd Tuesday of the month in January, February, May, August and October; 3:00pm; Vets Hall)
Cyndee Edwards Liaison
CITY COUNCIL SUB-COMMITTEES (2024)
COUNCIL SUBCOMMITTEE ON EMPLOYEE GRIEVANCES (meets as needed) Carla Wixom (Mayor) Member
Zara Landrum (Mayor Pro Tem) Member

WATER RECLAMATION FACILITY / JPA SUB-COMMITTEE
Carla Wixom Member
Zara Landrum Member

MORRO BAY POWER PLANT
Carla Wixom Member
Cyndee Edwards Member

OFFSHORE WIND ENERGY
Carla Wixom Member
Zara Landrum Alternate

Prepared By: DS Dept Review: ________
City Manager Review: _YK City Attorney Review: __LNL__
Staff Report
TO: Honorable Mayor and City Council DATE: December 12, 2023 FROM: Yvonne Kimball, City Manager
SUBJECT: Adoption of Resolution No. 01-24 Establishing the 2024 City Council Meeting Calendar and Budget Development Schedule

RECOMMENDED ACTION
Adopt Resolution No. 01-24 approving the 2024 City Council Meeting Calendar and Budget Development Schedule.

ALTERNATIVES
The Council may alter the proposed meeting calendar and schedule.

FISCAL IMPACT
None

BACKGROUND/DISCUSSION
Strategic Planning and Budget Calendar
Over the past several years, City Council has adopted an annual calendar that incorporates the strategic planning and budget discussions in a methodical way to link those efforts. Adoption of a calendar by resolution informs the community of the planned dates for important work on the City’s goals and objectives, adoption of the budget, and more. In April 2023, the Council adopted a set of goals, goal statements and short-term action items following a deliberated process that will continue to guide staff efforts through June 2025 (Attachment 2).

With regard to the budget process, the calendar provides two budget study sessions in late May to provide City Council with an overall financial picture for the City and allow for review of each department’s proposed budgets and consideration of adjustments, as necessary, to balance the budget. Council then has two regular meetings in June to formally consider and adopt the annual budget prior to year-end.
2024 Meeting Calendar
A Council meeting schedule which includes proposed regular meetings, as well as proposed special meetings and study sessions (known as of the date of this report) is provided for in Exhibit A to Resolution No. 01-24.

Budget Calendar
AGENDA NO: 7.c
MEETING DATE: January 9, 2024

Exhibit B to Resolution No. 01-24 includes the Fiscal Year (FY) 2024-25 Budget calendar which lays out the projected schedule for the staff development, public briefing, Citizens Finance Advisory Committee consideration, Council review, and eventual Council approval of the FY 2024-25 City Budget. Staff is recommending that Council hold their study session meetings on back-to-back days in May. Council would reserve the regularly scheduled June 11, 2024 Council meeting date to formally adopt the FY 2024-25 Budget (with June 25th as a backup date if needed).

CONCLUSION
Staff recommends Council adopt Resolution No. 01-24 that includes the City Council’s Meeting Calendar, as well as Budget Development Schedule for calendar year 2024.

ATTACHMENTS

1. Resolution No. 01-24 with Exhibits A and B

2. FY 2023-24 and 2024-25 Adopted City Goals and Action Items

RESOLUTION NO. 01-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA
ADOPTING THE 2024 CITY COUNCIL MEETING CALENDAR

AND BUDGET DEVELOPMENT SCHEDULE

T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, the City Council adopts an annual calendar providing for the orderly course of business and to provide transparency and accountability to the public; and WHEREAS, in accordance with the Strategic Planning Framework Policy established by Resolution No. 83-18, the City Council adopts a schedule for the development of the annual budget.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Morro Bay, California, the 2024 City Council Meeting Calendar is adopted, as set forth in Exhibit A, and the Budget Development schedule is adopted, as set forth in Exhibit B.

PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on this 9
th day of January 2024 on the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:

CARLA WIXOM, Mayor
ATTEST:

DANA SWANSON, City Clerk

Reso. 01-24 Exhibit A
2024 Meeting Calendar
January 9
Regular Meeting
January 23
Regular Meeting
February 13
Regular Meeting
February 27
Budget Forecast Study Session
Regular Meeting
March 12
Regular Meeting
March 26
Regular Meeting
April 9
Regular Meeting
April 23
Regular Meeting
May 14
Regular Meeting
May 28
Budget Study Session #1
Regular Meeting
May 29
Budget Study Session #2 (if needed)
June 11
Budget Adoption
Regular Meeting
June 25
Regular Meeting
July 9

HOLIDAY BREAK
July 23

TENTATIVE BREAK
August 13
Regular Meeting
August 27
Regular Meeting
September 10
Regular Meeting
September 24
Regular Meeting
October 8
Regular Meeting
October 22
Regular Meeting
November 12
Regular Meeting
November 26

HOLIDAY BREAK
December 10
Regular Meeting
December 24

HOLIDAY BREAK

Reso. No. 01-24 - Exhibit B
Budget Development Calendar
Fiscal Year 2024-25
 February Finance prepares budget framework, training, and instructions  Feb 20 FY 2023-24 Measure Q&E Midyear budget presentation to CFAC  Feb 27 FY 2023-24 Midyear Budget Presentation to Council  March Departments prepare FY 2024-25 budget submittals  April 17 New Capital Requests PWAB Review
 April City Manager/Exec Team budget meetings; draft budget development  April Preliminary Council input on budget and/or fiscal policies if needed  May 9 City Manager delivers draft proposed budget numbers to Council  May 21 CFAC reviews budget and provides input, emphasis on Measure Q&E  May 28 Council Budget Study Session #1 (Special or Regular Meeting)  May 29 Council Budget Study Session #2 (if needed)
 Jun 11 Budget Adopted at Council Meeting
 Jun 25 Backup date for Budget Adoption
Legend
o Council Meetings
o Advisory Board Meetings
o Internal Staff Actions

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Prepared By: __AW/CFN________ Dept Review: ________
City Manager Review: ___YK_____ City Attorney Review: _CFN___ Staff Report
TO: Honorable Mayor and City Council DATE: December 21, 2023 FROM: Amy Watkins, Police Chief
Dan McCrain, Fire Chief
Chris F. Neumeyer, City Attorney
SUBJECT: Adoption of Ord. No. 665 for Regulation of Camping and Storage of Personal Property on Public Property; and Adoption of Ord. No. 666 for Regulation of Overnight Human Habitation of Vehicles on Certain Private Property

RECOMMENDED ACTION

1. Adopt Ordinance No. 665, entitled “An Ordinance of the City Council of the City of Morro Bay, California Adding Chapter 8.26 to Title 8 of the Morro Bay Municipal Code Regulating Camping and Storage of Personal Property on Public Property to Mitigate Harm to Public Health, Safety and Welfare”; and

2. Adopt Ordinance No. 666, entitled “An Ordinance of the City Council of the City of Morro Bay, California Adding Chapter 8.27 to Title 8 of the Morro Bay Municipal Code Regulating Overnight Human Habitation of Vehicles on Private Property Used for Business or Nonprofit Organization Operations to Mitigate Harm to Public Health, Safety and Welfare.”

FISCAL IMPACT
Failure to adopt the ordinances will predictably see a steady increase in an ongoing and continuing drain on City resources, time and money. This is from ever increasing City staff responses (including from Police Department, Fire Department, Code Enforcement Division and Public Works Department) to the growing public health, safety and welfare harms generated by lack of regulations like those in the proposed ordinances. The findings in the ordinances document these conditions.

Adoption of the ordinances will result in upfront additional City enforcement costs, including the costs of retaining personal property held under the ordinance and cleanup of encampments, which may involve the collection and disposal of trash and potential hazardous material response. The Police Department and Code Enforcement Division will be primarily responsible for enforcement and handling of personal property, while the Public Works Department will provide support for coordinating the pickup and disposal of trash and hazmat response through its contractors.

As directed by City Council at the December 2023 Regular Meeting, staff will return with an initial budget allocation of $50,000 to support the implementation of these ordinances, begin the cleanup and securing storage containers for the retention of personal property during cleanups. Future costs are unknown and are dependent on changes in the resident homeless population and the amount of AGENDA NO: 7.d
MEETING DATE: January 9, 2024

01181.0001/943022.8
enforcement associated with the proposed ordinance.

BACKGROUND/DISCUSSION
At the December 12, 2023 Regular Meeting, which was continued to December 13 due to technology issues, the City Council received a report from the City’s Homeless Working Group regarding the public health and safety concerns related to camping on public property and, in order to address the immediate threats from unregulated camping on public property, adopted Urgency Ordinance No. 664, entitled “An Urgency Ordinance of the City Council of the City of Morro Bay, California Adding Chapter 8.26 to Title 8 of the Morro Bay Municipal Code Regulating Camping and Storage of Personal Property on Public Property to Mitigate Harm to Public Health, Safety and Welfare.” The City Council also introduced for first reading, by title only and with further reading waived, Regular Ordinance 665 which provides for codification of Chapter 8.26 on a non-urgency basis.

Along with this, the City Council introduced for first reading, by title only, with further reading waived, Ordinance No. 666, entitled “An Ordinance of the City Council of the City of Morro Bay, California Adding Chapter 8.27 to Title 8 of the Morro Bay Municipal Code Regulating Overnight Human Habitation of Vehicles on Private Property Used for Business or Nonprofit Organization Operations to Mitigate Harm to Public Health, Safety and Welfare.” The detailed report can be found here (see Item C-2).

CONCLUSION
Staff recommends City Council, to mitigate harms to public health, safety and welfare, adopt both a regular ordinance regulating camping on public property as well as a regular ordinance to regulate use of vehicles for human habitation on private property with businesses or nonprofits.

ATTACHMENTS

1. Ordinance 665, An Ordinance of the City Council of the City of Morro Bay, California Adding Chapter 8.26 to Title 8 of the Morro Bay Municipal Code Regulating Camping and Storage of Personal Property on Public Property to Mitigate Harm to Public Health, Safety and Welfare.

2. Ordinance 666, An Ordinance of the City Council of the City of Morro Bay, California Adding Chapter 8.27 to Title 8 of the Morro Bay Municipal Code Regulating Overnight Human Habitation of Vehicles on Private Property Used for Business or Nonprofit Organization Operations to Mitigate Harm to Public Health, Safety and Welfare.

01181.0001/943134.3
Ordinance No. 665

ORDINANCE NO. 665

AN ORDINANCE OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA
ADDING CHAPTER 8.26 TO TITLE 8 OF THE MORRO BAY

MUNICIPAL CODE REGULATING CAMPING AND STORAGE OF

PERSONAL PROPERTY ON PUBLIC PROPERTY TO MITIGATE HARM

TO PUBLIC HEALTH, SAFETY AND WELFARE

THE CITY COUNCIL
City of Morro Bay, California
WHEREAS, the City of Morro Bay (“City”) encourages the use of open spaces and facilities within the City by all members of the community; and
WHEREAS, camping in undesignated campsites within the City limits creates unsanitary, unhealthy, disorderly, and dangerous conditions that may affect both the campers and the general public; and
WHEREAS, camping in undesignated campsites within the City limits tends to degrade and even destroy the property upon which the camping is occurring, particularly in situations where an encampment is large and ongoing; and
WHEREAS, camping in undesignated campsites within the City limits detracts from the use of the property for its intended purposes; and
WHEREAS, the City has the authority to adopt regulations to ensure the public’s health, safety, and general welfare, and desires to regulate camping within the City; and WHEREAS, a federal Ninth Circuit Court of Appeals decision, Martin v. City of Boise, 920 F.3d 584 (9
th Cir. 2019) (“Martin”), prohibits criminal prosecution for sleeping outside on public property when adequate shelter is not reasonably available for persons involuntarily experiencing homelessness, based upon an interpretation of the Cruel and Unusual Punishments Clause of the U.S. Constitution’s Eight Amendment; and
WHEREAS, the federal Ninth Circuit court suggested in its decision in Martin that the prohibition on criminal prosecution would not apply to individuals who have reasonable access to adequate temporary shelter; and
WHEREAS, the Ninth Circuit court in Martin suggested that even when adequate shelter is unavailable, an ordinance establishing reasonable time, place and manner regulations on sitting, lying or sleeping may be allowed under the U.S. Constitution when the regulations are to address legitimate public health and safety concerns; and

01181.0001/943134.3
Ordinance No. 665

WHEREAS, the federal Ninth Circuit court in the case of Johnson v. City of Grants Pass, 72 F.4th 868 (9th Cir. 2023) (“Grants Pass”) expanded upon its decision in Martin to prohibit civil enforcement for sleeping outside when adequate shelter is not reasonably available for persons involuntarily experiencing homelessness if civil enforcement can lead to criminal enforcement; and
WHEREAS, for many years the City has invested significant funds, resources and time to assist persons experiencing homelessness to find temporary and permanent shelter and necessary public health services to address the causes of their homelessness, has sought to address the underlying issues contributing to homelessness and has striven to be a part of the solution. These City of Morro Bay actions and efforts have included:

1. City staff and City Manager participation on committees and sub-committees with service groups, County non-profits, and County Public Health Services to address causes of homelessness and work towards solutions.

2. Assignments of officers to the police department as a homeless liaison to address needs of the unhoused within the City limits.

3. Provision of connections to County Public Health Nurse and Doctors.

4. Facilitating connections to local and regional outreach services to assist with mental health needs, drug and alcohol counselors, probation and parole services, connections to permanent housing (THEMA, CAPSLO, 805 Street Outreach, Esteros Bay Alliance for Care, Salvation Army, SLO Food Bank, County Public Health and Behavioral Health services).

5. Monthly meetings with Estero Bay Alliance for Care (EBAC), a local, ad-hoc volunteer organization started in 2011 by Morro Bay Council Members to include different agencies and community organizations with the intent to study and address social issues in the Estero Bay area. EBAC membership includes a current Morro Bay City Council member, representatives from the Police Department, Social Services, local churches, health care organizations, the Food Group, various other active organizations, such as the Community Resource Connections office, and legal services organizations.

6. The City of Morro Bay supports with financial and staffing resources a one-of-a kind weekly community dinner - where all are welcome - in an effort to support our community needs.

7. In 2022, the Morro Bay City Manager created a City homeless working group comprised of City department heads, staff and homeless outreach service groups to address homelessness in Morro Bay. One of the first items the team addressed was the need for continued outreach and case management. The City conducted a recruitment for Homeless Outreach Case Manager. The Homeless Outreach Case Manager is one step in the City’s efforts to meet the San Luis Obispo Countywide plan to address homelessness adopted by the County Homeless Services Oversight Council in 2022.

8. The Homeless Outreach Case Manager assists those experiencing homelessness to navigate services and to connect to resources that they need to secure housing, as well as

01181.0001/943134.3
Ordinance No. 665

shelter and transitional housing resources when available (e.g., ID Cards, financial benefits, transportation to service meetings and appointments). Duties include to make contact with unhoused or people struggling with housing in the field, build rapport and provide opportunities for assistance to those seeking help. The case manager schedules and provides transportation to appointments for drug and alcohol services, county probation, state parole, behavioral health, CAPSLO, ECHO, and THMA.

9. City of Morro Bay provides annual funding to San Luis Obispo County Department of Social Services and Public Health.

10. Regular meetings with homeless outreach groups such as CAPSLO, THMA, County Public Health, Salvation Army, Veteran Services, 805 Street Outreach, and EBAC.

11. The City committed $25,000 in housing impact in lieu fees to the HASLO Atascadero Rd Housing Project.

12. The City has transferred the City’s portion of the National Opioid Settlement back to San Luis Obispo County to manage a regional effort to combat opioid related issues that directly impact our unhoused population.

WHEREAS, despite the City’s efforts the Police and Fire Departments have found that a significant number of the City’s homeless population routinely decline the City’s offers of help for various reasons including many people experiencing homelessness refuse to accept services and refuse to move from encampments. Some of the homeless actually have access to temporary shelter but choose not to use it, and, therefore, of the City’s estimated population of persons experiencing homelessness, the Police and Fire Departments estimates less than ten percent of the City’s homeless population would be categorized as involuntarily homeless; and WHEREAS, the City has experienced significant and continuing threats to public health and safety resulting from persons experiencing homelessness sleeping and camping in unauthorized locations in the City, including the following:

1. Homeless encampments raise a number of public health concerns related to waste, sanitation and disease transmission. Homeless people, like all other people, generate solid waste during their daily activities of food preparation and consumption, shelter building and maintenance and storing their possessions. Though without any place or method of proper storage or disposal, the resulting piles of trash become food sources for rodents, breeding grounds for pathogens, fuel for fires, and unattractive nuisances to the public.

2. The opportunity for the spread of communicable diseases is increased in homeless encampments lacking basic sanitation services and waste collection, with some diseases such as hepatitis A and typhus more likely to occur in homeless populations.

3. Health and safety issues are presented by the violation of fire, building, electrical and other codes and standards for the public health and safety, including the unauthorized and unpermitted use of electrical and utility connections, due to the potential and reality of unsafe and unhealthy conditions in encampments, posing life, safety, fire and health threats to both the occupants of the encampments, the general public and emergency responders.

01181.0001/943134.3
Ordinance No. 665

4. Health and safety issues are exacerbated and compounded by larger encampments as there is an exponential increase in these health and safety issues the larger the encampment, including but not limited to both accumulation of trash and debris as well as the greater likelihood of the spread of disease.

5. The City regularly receives a large volume of emails, phone calls and in-person complaints regarding the encampments in the City, and the frequency and number of these complaints has been increasing greatly recently and in the last year.

6. The homelessness problem in Morro Bay impacts crime rates. Homelessness related crime rates are significant both in terms of crimes against the homeless and also crimes committed by the homeless. The Morro Bay Police Department estimates a call volume of 60% of total calls for service are related to our unhoused population.

7. Business owners and residents near encampments are confronted by trash, used needles, and human waste, and increased instances of open drug use, property damage, theft, and break-ins. They have seen their property values decline, their small businesses fail, and their public spaces become uninhabitable.

8. Businesses and residences near encampments experience physical impediments to access to public and private property which both impedes emergency responses, evacuation of occupants during an emergency, and general public access, as well as exacerbates the likelihood of conflict, intimidations and threats to the public safety for both the unhoused as well as all members of the public, and furthermore the collection of biohazard materials, human waste, trash and rubbish near businesses and residential areas contributes to a general decline in public health, safety and welfare.

9. Encampments near emergency shelters established for emergency evacuations during events such as winter rain storms can cause barriers to access for evacuees.

10. Encampments near active construction sites, areas with heavy vehicle use, and similar areas pose unique threats to both the unhoused as well as the operators of construction equipment and vehicles through unintentional yet predictable collisions and threats to health and safety.

11. Encampments on or near public utilities and critical infrastructure, such as stormwater, water and sewer infrastructure, fire stations, electrical wires and natural gas pipelines, pose unique safety, environmental and security issues and are generally closed to the public or have limited public access for safety, environmental and security reasons.

12. Unauthorized connections or taps to public utilities, as well as violation of fire, building, electrical and other codes and standards, create unsafe conditions and a potential life safety hazard for the occupant, the general public and emergency responders.

13. Encampments pose immense public health concerns as the rates of overdoses from drugs like fentanyl and heroin have increased substantially among the unhoused and encampments can provide an environment conducive to illegal drug consumption.

14. Abandoned encampment cleanups are performed by police officers with police equipment and City staff in an attempt to maintain and or control the spread of large

01181.0001/943134.3
Ordinance No. 665

encampments and this taxes public resources while unnecessarily exposing first responders and City staff to unhealthy and unsafe situations.

15. Fires in unsafe locations for cooking and warming occur at encampments increasing the risk of fires posing a threat to safety and health.

16. Accumulation of biohazard and medical waste occurs in and around encampments and these items end up in our creeks, storm drains, waterways, and beaches posing a direct threat to health and safety.

17. Severe blockage of storm drains due to excessive encampment debris leads to increased roadway and stream flooding and drain blockages during storms causing threats to health and safety.

18. During times of serve storms, unhoused camps are located in and evacuated from low lying, unsafe areas, and storm drains due to increased risk of flooding, rapid water movement, and blockage of storm drains, posing safety threats to the residents of the encampments; and
WHEREAS, in light of these significant and continuing threats to public health and safety, the City seeks to adopt reasonable time, place and manner regulations in a manner consistent with the federal Ninth Circuit court’s decisions in Martin and Grants Pass; and WHEREAS, the City finds that reasonable camping regulations for public property will best serve the public’s health, safety, and general welfare.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF MORRO BAY, CALIFORNIA, DOES ORDAIN AS FOLLOWS:

SECTION 1. RECITALS. The recitals set forth above are true and correct and are hereby adopted as findings in support of this Ordinance as if fully set forth herein.

SECTIONS 2. NEW CHAPTER 8.26 ADDED TO CODE. Chapter 8.26 is added to Title 8 of the Morro Bay Municipal Code to read as follows:
“CHAPTER 8.26 – PUBLIC PROPERTY CAMPING REGULATIONS

8.26.010 FINDINGS AND PURPOSE
A. As the City continues to offer assistance and services to persons experiencing homelessness, the City must appropriately consider various interests and formulate policy to best protect public health, safety, welfare, property, and the environment, with its limited resources.

B. The City Council acknowledges that at the time of the adoption of this ordinance, there is a lack of nightly shelter beds and housing available regionally for persons experiencing homelessness and recognizes the systemic lack of state and federal investment in shelter and public health services for those experiencing homelessness.

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C. The City Council acknowledges that it is currently unavoidable that some persons will live or shelter for survival outdoors until they are able to access affordable or free shelter or housing. In Morro Bay, this has typically meant sheltering, sometimes for extended periods of time, on City rights-of-way and City property, and at times on other public agency property such as the California Department of Parks and Recreation property.

D. Public rights-of-way and public property are generally intended for public use and travel.

The City Council is the authority for rights-of-way within the City; as such, the City must consider the safety of motorists and pedestrians travelling on roadways and sidewalks, including to and from neighboring properties, businesses, and residences.

E. The City owns limited property where camping can or should be allowed for reasons including but not limited to public health and safety concerns and issues created by the impact of camping on public property.

F. The City has had increasing concerns regarding public health and safety due to camping on or in rights-of way and public property in or near streets, roads, sidewalks, schools, residences, businesses, critical infrastructure, public access points and similar locations.

Public utility properties (e.g., stormwater, water, sewer) are environmentally and operationally sensitive and generally closed to the public or have limited access for safety, environmental and security reasons.

G. Over the long term and working with other governmental agencies and non-profit organizations, the City’s goal is that people should not have to live outside and there should be safer options because long-term camping for survival and sheltering outside is not a solution for people without homes.

H. It is the purpose and intent of the City Council to provide standards for camping and survival sheltering on City rights-of-way and public property, which are intended to be as compatible as possible with the needs of everyone in Morro Bay to be healthy, safe, and have access to public places.

I. Smaller camp sites support both the health and safety of people who are camping for survival on public property as well as the health and safety of the public.

J. It is the purpose and intent of the City Council to provide standards for camping and survival sheltering on City rights-of-way and public property which will address issues such as fire risk, unsanitary conditions, health risks, public infrastructure security, public access impediments, trash, waste and public safety hazards to both people camping as well as neighboring businesses, residents and community members, as well as environmental degradation, which have occurred with longer-term camping in the City.

K. It is the intent of the City to evaluate each removal of an Established Campsite with considerations of public health and safety, including for the people who are sheltering in the camps, potential user conflicts, and available resources. The City intends to use a team approach and coordinate with other governmental agencies and non-profit organizations as appropriate. When the City requires a person experiencing homelessness to remove an Established Campsite, through these regulations, it intends to provide the person

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adequate time to remove the Established Campsite before the City removes the Established Campsite, to secure any personal property with reasonable utility or reasonable value for the person to retrieve at a later date, and to clean the former Established Campsite to address threats to public health and safety.

8.26.020 DEFINITIONS
The following words and phrases, when used in this Chapter, shall have the meaning ascribed to them by this section unless it is apparent from the context that another meaning is intended.

A. “Camp” or “Camping” means residing in or using any public property for one or more nights for living accommodation purposes, such as sleeping activities or making preparations to sleep (including the laying down of bedding for the purpose of sleeping), or using any tents, or storing personal belongings (including but not limited to clothing, sleeping bags, bedrolls, blankets, sheets, luggage, backpacks, kitchen utensils, cookware, and similar material), or making any fire using Bunsen burners or other heating items, or regularly cooking meals. These activities constitute camping when it reasonably appears, in light of all the circumstances, that a person is using public property as a living accommodation for one or more nights, with the intent to camp.

B. “Camp Facilities” include, but are not limited to, tents, huts, or similar temporary shelters consisting of any material with a top or roof or any other upper covering or that is otherwise enclosed by sides that is of sufficient size for a person to fit underneath or inside while sitting or lying down and includes the use of a tarp or other material tied or affixed to a structure or bush to create an enclosed area.

C. “Camp Materials” includes but is not limited to, tarpaulins, cots, beds, sleeping bags, hammocks, shopping carts, recyclable material and/or non-City designated cooking or heating facilities and similar equipment, or personal possessions that would facilitate one’s use of a park, public property, or any portion of the public right-of-way as a temporary residence.

D. “Critical Infrastructure” means real property or a facility, whether privately or publicly owned, that the City Manager designates as being so vital and integral to the operation or functioning of the City or in need of protection that its damage, incapacity, disruption, or destruction would have a debilitating impact on the public health, safety, or welfare.

Critical infrastructure may include, but is not limited to, government buildings, such as fire stations, police stations, jails, or courthouses; hospitals; structures, such as antennas, bridges, roads, train tracks, drainage systems, or levees; or systems, such as computer networks, public utilities, electrical wires, natural gas pipes, telecommunication centers, or water sources.

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E. “Enforcement Personnel” means the employee(s) of the City, including but not limited to sworn police officers, authorized by the City to seek compliance with, and enforce, the regulations, requirements and rules of this Chapter.

F. "Established Campsite" means a location or locations in the public right-of-way or on City property where a Camp, Camps, and/or Camp Materials have been set up for twenty-four (24) hours or more.

G. “Fire Severity Zones” means mapped area as defined by the Office of State Fire Marshal that designates zones (based on factors such as fuel, slope, and fire weather) with varying degrees of fire hazard (i.e., moderate, high, and very high).

H. “Greywater” means untreated wastewater from bathtubs, showers, bathroom washbasins, clothes washing machines and the like. It does not include any toilet discharge, unhealthy bodily wastes, or manufacturing wastes.

I. “Hazardous Water” means sewage, toilet discharge, unhealthy bodily wastes, manufacturing wastes and the like.

J. “Landscaped Area” means any manicured or natural ground covered areas including but not limited to flower beds, bushes, brush areas, or shrubs.

K. “Personal Property” means any tangible property and includes, but is not limited to, goods, materials, merchandise, tents, tarpaulins, bedding, blankets, sleeping bags, personal items such as household items, luggage, backpacks, clothing, food, documents, and medication.

L. “Playground” means any park or recreational area specifically designed to be used by children that has play equipment installed, or any similar facility located on public or private school grounds, or on City, county, or State park grounds.

M. “Public Property” means any publicly owned property in the City, whether improved or unimproved, including, but not limited to, any of the following: public alleyways; public parking lots; public passageways; public streets; public rights-of-way; park Playgrounds; freeway on-ramps and off-ramps; publicly owned, maintained, or operated parks; publicly owned, maintained, or operated landscaped areas or greenbelts; publicly owned fences, trees, light poles, or equipment boxes; publicly owned, maintained, or operated open spaces including, but not limited to, public facilities or buildings of any kind; public sidewalks, curbs, and gutters; public educational institutions; or other government owned, maintained, or operated properties located within the City.

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N. “Public Utilities” means every common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, and heat corporation, where the service is performed for, or the commodity is delivered to, the public or any portion thereof, as defined by Public Utilities Code section 216, and as amended.

O. "Rights-of-Way" means all City-owned or controlled rights-of-way, whether in fee title or as holder of a public easement for right-of-way or public access purposes. Public rightsof-way include but are not limited to any public road, street, sidewalk, or private street or other property that is subject to a public access easement dedicated or granted to the City for vehicular use, pedestrian use, utilities or other means, and any planter strip or landscaped area located adjacent to or contained within streets that is part of the public right-of-way.

P. “School” means any institution, facility or organization, whether public or private, that offers instruction on those courses of study required by the California Education Code or that is maintained pursuant to standards set by the State Board of Education. School for purposes of this section does not include a vocational or professional institutions of higher education, including a community or junior college, college, or university. The setback shall be calculated from the school property boundaries.

Q. “Store” means to put aside or accumulate for use when needed, to put for safekeeping, to place or leave in a location.

R. “Transportation Facility Loading Area” means that area within 200 feet of where trains, buses or any form of public transportation loads or unloads passengers.

S. “Vehicle” means a “motor vehicle” as defined by California Vehicle Code, section 415 and includes a “recreational vehicle” as defined by California Health and Safety Code, section 18010(a).

8.26.030 TIME, PLACE AND MANNER REGULATIONS
Persons who do not have any other permanent residence or domicile and/or are involuntarily experiencing homelessness are permitted to camp on public property or rights of-way, provided the camping is occurring in compliance with the following time, place and manner regulations and consistent with any administrative rules and policies promulgated by the City Manager, or designee, adopted after the Effective Date of this Ordinance, in accordance with this Chapter.

A. Time. Unless otherwise specified, any Camping or Camp, where allowed, may only occur for 24-hours at a time in any one location. After 24 hours in one location, the Camp and all

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associated Camp Materials must be moved at least one street block or 600 feet, whichever is greater, to another allowed location.

B. Place. Camping is not allowed at any time in any of the following places:

1. Within 200 feet of a residentially zoned property boundary or within any area zoned Residential, as determined by the City of Morro Bay Zoning Map and the Morro Bay Municipal Code.

2. Within any Mixed Use Overlay Zone, as determined by the City of Morro Bay Zoning Map and the Morro Bay Municipal Code.

3. Any place where Camping, a Camp, or Camp Materials create a physical impediment preventing emergency or non-emergency ingress, egress or access to public or private property, including but not limited to, on public sidewalks or other public rights-of-way, driveways providing access to vehicles, and entrances or exits from buildings and/or other real property.

4. Any vehicle lane, bicycle lane, or roundabout within any public rights-of-way or Transportation Facility Loading Area.

5. Within 1000 feet from any shelter both established for emergency evacuations as well as approved under the Morro Bay Municipal Code and/or approved consistent with any applicable provision of State or federal law.

6. On any street or public rights-of-way, the City has closed to camping due to construction, heavy vehicle use, or other use of the roadway that is incompatible with camping in the rights-of-way. The City does not need to close a street to vehicle traffic, to close a street to camping under this section.

7. Within, or within 200 feet of, any School.

8. Within, or within 200 feet of, any Playground.

9. Within, or within 200 feet of, any area designated as Visitor Serving Commercial (VSC), as determined by the City of Morro Bay Zoning Map and the Morro Bay Municipal Code.

10. At the following public property: Morro Bay City Hall, Morro Bay Community Center, Morro Bay Veterans Hall, Morro Bay Public Library, Morro Bay Centennial Parkway and Stairway, and such further designations made in writing by the City Manager, or her or his designee, upon the written recommendation of the Morro Bay Police Chief and the Morro Bay Fire Chief.

11. Within, or within 200 feet of, Critical Infrastructure.

12. Within, or within 200 feet of, either a very high Fire Severity Zone or a high Fire Severity Zone.

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C. Manner. Camping, when and where allowed, is subject to all of the following limitations and regulations:

1. Individuals, Camp Materials, Camps, or personal property may not obstruct, block, prevent access to, or impede: sidewalk accessibility or passage; clear vision of moving vehicles or bicycles; usage of fire hydrants; usage or function of Public Utilities, Critical Infrastructure, or other City infrastructure; or, otherwise obstruct, block, prevent access to, or impede the use of the Rights-of-Way for vehicular, pedestrian, bicycle, or other passage.

2. A Camp or Camping shall be limited to a spatial footprint of no greater than 12 feet by 12 feet, or 144 square feet, and shall have a smaller footprint if necessary to comply with the restrictions set forth in this Chapter. The intent of this section is to allow a person to sleep protected from the elements and maintain the essentials for living, while still allowing others to use public spaces as designed and intended.

3. To prevent larger Camping sites from forming and the impacts to public health and safety that can result, a Camp shall not be within a one hundred fifty (150) foot radius of any other Camp.

4. Individuals may not accumulate, discard, or leave behind garbage, debris, unsanitary or hazardous materials, or other items of no reasonable utility or reasonable value, as determined by the City, in public rights-of-way, on City property, or on any adjacent public or private property.

5. Open flames, recreational fires, burning of garbage, bonfires, or other fires, flames, or heating deemed unsafe by the Morro Bay Fire Department, or the Morro Bay Police Department, are prohibited. Types of flameless cooking stoves and other flameless devices for keeping warm, as consistent with this subsection, are permitted.

6. Dumping of Greywater or Hazardous Water into any facilities or places not intended for Greywater or Hazardous Water disposal is prohibited. This includes but is not limited to City streets, public rights-of-way, public waterways and storm drains, which are not intended for disposal of Greywater or Hazardous Water.

7. Unauthorized connections or taps to Public Utilities, including but not limited to such connections or taps that cross over City property, roadways, rights-of-way, driveways, streets, sidewalks, and fences, are prohibited.

8. Violations of building codes, fire codes, and other relevant codes or standards for health and safety, are prohibited.

9. Obstruction of, or attachment of Camp Materials or personal property to, fire hydrants, utility poles, Public Utilities infrastructure, public infrastructure, fences, trees, vegetation, vehicles, or buildings is prohibited.

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10. Individuals may not build or erect structures, whether by using plywood, wood materials, pallets, or other materials. Items such as tents, and similar items used for shelter that are readily portable, are not structures for purposes of this section.

11. Storage of personal property such as vehicle tires, bicycles, or associated components (except as needed for an individual's personal use), gasoline, generators, lumber, household furniture, propane tanks, combustible material or gases, or other items or materials, is prohibited, other than what is related to camping, sleeping, or keeping warm and dry.

12. Digging, excavation, terracing of soil, alteration of ground, water or infrastructure, or damage to vegetation or trees is prohibited.

13. All animals, in the custody, ownership or companionship of an individual, must be leashed or crated at all times.

14. Camps shall consist of no more than two persons, two animals (e.g., dogs) that are leashed or crated at all times, and one tent.

8.26.040 ENFORCEMENT
A. Voluntary Compliance. Before enforcement actions are taken in respect to this Chapter (with the exception of enforcement of subsection (B)(3)), the enforcement personnel shall make a good faith effort to contact the person violating this Chapter and provide a reasonable opportunity to cure or remedy the alleged violation. Enforcement Personnel shall make a good faith effort to determine whether the person subject to enforcement has been referred to service providers and/or local non-profit assistance organizations and make a referral if it appears none has been made. The following shall be communicated to the person in a manner designed to help them understand the alleged violation:

1. A written or verbal description or identification of the activity constituting the alleged violation and identification of the recipient as being the person responsible for the violation;

2. A written or verbal statement that the enforcement personnel has determined the activity to be a violation;

3. A written or verbal statement of the action required to fix the violation and the time and/or date by which the violation must be fixed; and

4. A written or verbal statement advising that if the violation is not fixed within the time specified, enforcement actions may be imposed.

B. Notice of Violation

1. 72 Hour Notice. Prior to implementing any of the enforcement mechanisms provided for in this Chapter to remove an Established Campsite and/or Camp Facilities because of violations of this Chapter, the Enforcement Personnel shall provide occupants of an Established Campsite or Camp Facilities, at least 72 hours in advance of any action to

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remove the Established Campsite or Camp Facilities, notice both to remove the camp within 72 hours consistent with the requirements of this Chapter as well as of the intent by the City to remove the Established Campsite or Camp Facilitiesin no less than 72 hours (the “notice”). The notice shall be in writing and shall be posted on or near the Established Campsite or Camp Facilities, so as to reasonably communicate the notice to persons living at the Established Campsite or Camp Facilities but not present during the attempt to provide notice. In addition, the Enforcement Personnel shall make a good faith effort to personally provide the written notice to the occupant(s) of the Established Campsite or Camp Facilities present at the time the Enforcement Personnel posts the notice. Failure of the occupant(s) of the encampment to comply with the notice’s requirements to remove the camp within 72 hours consistent with the requirements of this Chapter shall constitute a violation of this Chapter. The notice shall contain the following information:
a. The location of the Established Campsite or Camp Facilities; b. The date and time notice was posted;
c. A statement that the Established Campsite or Camp Facilities violates this Chapter;
d. An advisement that the City will remove the Established Campsite or Camp Facilities 72 hours after the date and time of the notice; e. Information about any housing, shelter or homeless services available for occupants of the Established Campsite or Camp Facilities, the phone number and address to contact in order to obtain such housing, shelter or homeless services, if available, and information about obtaining free transportation, if available, to such housing, shelter or homeless services; f. An advisement that any personal property remaining at the Established Campsite or Camp Facilities site when the Enforcement Personnel returns to remove the Camp Facilities will be impounded for no fewer than 90 days, or as provided for by applicable law, and will be discarded thereafter if not claimed; and
g. The address, phone number, and operating hours of the location where the personal property will be stored and may be retrieved, being a storage facility and depending on the property potentially with the Morro Bay Police Department, and that the City will charge no fee for storage or retrieval.

2. Less Than 72 Hour Notice. The notice detailed above may establish a shorter time for the removal of the encampment if the Enforcement Personnel have determined the conditions at the Established Campsite or Camp Facilities requires removal of the Established Campsite or Camp Facilities in less than 72 hours to avoid a potential emergency, such as possible site contamination by hazardous materials or when there is reasonable potential danger to human life or safety. Failure of the occupant(s) of the encampment to comply with the notice’s requirements to remove the camp consistent with the requirements of this Chapter shall constitute a violation of this Chapter.

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3. Illegal Activity or Exceptional Emergency. Enforcement personnel may remove an Established Campsite or Camp Facilities without providing the notice described above in the following circumstances:
a. When there is probable cause for law enforcement officials to believe that illegal activity, other than camping, is occurring at an Established Campsite or Camp Facilities, or in the immediate vicinity of an Established Campsite or Camp Facilities; or
b. When there is probable cause for law enforcement officials to believe that the property that comprises an Established Campsite or Camp Facilities is being used or is intended to be used to commit or facilitate the commission of otherwise illegal activity; or
c. In the event of an exceptional emergency, such as significant evidence of site contamination by hazardous materials or when there is immediate danger to human life or safety.

C. Removal of an Established Campsite or Camp Facilities. If the occupant(s) fail to comply with the request for voluntary compliance set forth in subsection A above, and after the enforcement personnel comply with the requirements set forth in subsection B above, any Camp, Camp Materials, or personal property in violation of any of the standards in this Chapter may be removed or cleaned-up by the City or its designated contractors, and the enforcement personnel may take appropriate actions to remove an Established Campsite or Camp Facilities and enforce this Chapter, consistent with the following:

1. When removing Camp Facilities, or individuals, Camp Materials, or personal property from an Established Campsite, enforcement personnel will make reasonable efforts to remove individuals without the use of force or citation.

2. When removing personal property, the City shall make reasonable efforts to determine if the property belongs to an individual and has any reasonable utility or reasonable value. The City shall make reasonable efforts to identify which Established Campsite the property was removed from, to aid in connecting people with their property. Items that are perishable, that have no reasonable use or value, that are not identifiable as belonging to an individual, or that are in an unsanitary condition due to saturation or contamination from bodily fluids, whether human or animal, or other contamination, will be considered garbage, discarded, and need not be stored.

3. Weapons, drug paraphernalia, or other contraband, and items that appear to be either stolen or evidence of a crime, shall be provided to law enforcement officials.

4. Following removal of personal property from City property or rights-of-way, the City shall post a notice at or as near as possible to the location the property was collected and on the City's website, stating where the personal property is being stored, and listing the phone number and hours a person claiming ownership can collect or make arrangements to collect their personal property.

5. After an Established Campsite or Camp Facilities has been removed, then at the recommendation of the Police Chief or Fire Chief on the basis of public health and safety, the City Manager may order that no camp be set up in that same location or a

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100-foot radius for up to 30 days. The City shall post signs informing the public that camping is prohibited at the location for the specified period of time.

D. Removal and Storage of Personal Property or Camp Materials During Removal of an Established Campsite or Camp Facilities. Personal property or Camp Materials may be removed from City rights-of-way, City property, or a Camp, during removal of an Established Campsite or Camp Facilities pursuant to Section C above, if in violation of the provisions of this Chapter, as provided for herein.

1. Personal property removed from City rights-of-way or City property and unclaimed at the time of removal will be stored by the City for a minimum of ninety (90) days, or the duration (if shorter in time) allowed by applicable State or federal law, counting from the day of the removal as day one.

2. Items that are perishable, that have no reasonable use or value, that are not identifiable as belonging to an individual, or that are in an unsanitary condition due to saturation or contamination from bodily fluids, whether human or animal, or other contamination, will be considered garbage, discarded, and will not be stored. Property discarded, dumped, or otherwise abandoned in the City rights-of-way or on public property may be immediately discarded.

3. The City will store personal property at a storage facility at or near a designated City facility, where people can reasonably retrieve belongings. Notwithstanding any otherwise applicable City policy or procedure, all items collected and stored pursuant to this Chapter that reasonably appear to have a monetary value at the time of collection of less than one thousand dollars ($1,000) shall be stored at a storage facility, and items that reasonably appear to have a monetary value at the time of collection of one thousand dollars ($1000) or more shall be separately stored for safekeeping with the Morro Bay Police Department (“MBPD”).

4. The City will make reasonable efforts to provide a range of times the storage facility will be available for people to collect their personal property. The City may dispose of any personal property (whether stored at the storage facility or with the MBPD) that remains unclaimed after ninety (90) days, or the duration (if shorter in time) allowed by applicable State or federal law, counting from the day of the removal as day one.

8.26.050 VIOLATIONS
A citation for a violation of Chapter 8.26 shall be for an infraction. At the City's discretion, it may issue Administrative Citations under Chapter 1.03. Citations will be issued only when other means of achieving compliance have been unsuccessful or are not practicable for the particular situation.

8.26.060 SUSPENSION OF ENFORCEMENT
The City Manager, or designee, is specifically authorized to modify or suspend enforcement of any section or part of this Chapter in the event of a declared emergency, pursuant to

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administrative rules or policies, weather conditions (including but not limited to extreme heat or cold), or for any other reason within the City Manager's authority, regardless of whether an emergency has been declared. In addition, the City Manager may suspend the enforcement of regulations contained in this Chapter when the City Manager, or designee, has determined a person does not have access to shelter and is engaged in case management or behavioral health services, or when necessary or appropriate to respond to a person’s disability, or as further set forth in City's administrative policies implementing this Chapter 8.26 adopted by the City Manager, or designee, pursuant to Section 8.26.090.

8.26.070 ADOPTION OF ADMINISTRATIVE RULES
The City Manager, or designee may adopt administrative rules or policies governing or guiding enforcement of this Chapter, consistent with the intent of this Chapter, including but not limited to ensuring consistent and appropriate enforcement for various circumstances. These administrative rules or policies should ensure that enforcement is tailored to various circumstances, including but not limited to situations where a person has a disability under the Americans with Disabilities Act, where minor children are present or otherwise involved, where a person has employment obligations that may relate to their ability to comply with this Chapter, or for other reasons that may support discretion in enforcement.

8.26.80 METHODS OF ENFORCEMENT NOT EXCLUSIVE
Methods of enforcement for violations of this Chapter are not exclusive and may consist of multiple enforcement mechanisms where legally authorized and appropriate. However, the intent of the City is to always resolve violations at the lowest possible level, and to engage to seek compliance and solve problems while maintaining the dignity of all involved.” SECTION 3. SEVERABILITY. If any section, subsection, sentence, clause, phrase, or portion of this ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions thereof may be declared invalid or unconstitutional.

SECTION 4. POTENTIAL CONFLICTS. All ordinances, parts of ordinances, City resolutions or policies, and the like, in conflict with those sections amended or added herein to the Morro Bay Municipal Code, are hereby expressly superseded by this ordinance, with the exception of Section 8.24.010(D) of the Morro Bay Municipal Code.

SECTION 5. EFFECTIVE DATE. This ordinance shall be in full force and effect thirty (30) days after its passage and adoption.

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SECTION 6. CERTIFICATION. The City Clerk shall certify as to the passage and adoption of this ordinance, and the City Clerk shall cause the same to be posted and codified in the manner required by law.

INTRODUCED at a regular meeting of the City Council held on the 12th day of December 2023, which was continued to December 13, 2023, by motion of Council Member Barton and seconded by Council Member Landrum.

PASSED AND ADOPTED on the ______ day of _______________, 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:
____________________________
CARLA WIXOM, Mayor
ATTEST:
________________________________
DANA SWANSON, City Clerk
APPROVED AS TO FORM:
_________________________________
CHRIS F. NEUMEYER, City Attorney

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Ordinance No. 665

STATE OF CALIFORNIA )

COUNTY OF SAN LUIS OBISPO )

CITY OF MORRO BAY )
I, Dana Swanson, CITY CLERK OF THE CITY OF MORRO BAY, DO HEREBY CERTIFY that the foregoing Ordinance No. 665 was duly adopted by the City Council of the City of Morro Bay at a regular meeting of said Council on the ____ day of ______ 2024, and that it was so adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:

IN WITNESS WHEREOF I have hereunto set my hand and affixed the official seal of the City of Morro Bay, California, this ____day of ______, _____. _________________________________________
DANA SWANSON, City Clerk

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Ordinance No. 666

ORDINANCE NO. 666

AN ORDINANCE OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA
ADDING CHAPTER 8.27 TO TITLE 8 OF THE MORRO BAY

MUNICIPAL CODE REGULATING OVERNIGHT HUMAN

HABITATION OF VEHICLES ON PRIVATE PROPERTY USED FOR

BUSINESS OR NONPROFIT ORGANIZATION OPERATIONS TO

MITIGATE HARM TO PUBLIC HEALTH, SAFETY AND WELFARE

THE CITY COUNCIL
City of Morro Bay, California
WHEREAS, the City finds that the use of vehicles for human habitation overnight on private property used for business or nonprofit organization operationsimpacts public health and safety as this activity tends to result in damage to private property, theft, the accumulation of trash, food waste, human waste and contaminated medical waste and the unauthorized discharge of Greywater and Hazardous Water; and,
WHEREAS, the accumulation of trash, food waste and human waste has the potential to spread disease and result in infestations by vermin and insects; and, WHEREAS, the accumulation of discarded contaminated medical waste, including used hypodermic needles, has the potential to harm patrons of the businesses or non-profits located where the overnight human habitation of vehicles is occurring who are exposed to this waste, and is an attractive nuisance for children; and,
WHEREAS, the collection of contaminated medical waste, human waste and trash and the discharge of Greywater and Hazardous Water has the potential to contaminate the City’s waterways and beaches due to the proximity to storm drains; and, WHEREAS, overnight human habitation in vehicles on private property used by business or nonprofit establishments has resulted in a significant number of police calls for service related to vandalism, property damage and criminal activity, including narcotics usage, noise violations, excessive debris around the vehicles, prowling, parking violations, private property trespassing, and loitering; and,
WHEREAS, unregulated overnight human habitation in vehicles on private property used by business or nonprofit establishments creates increased public health and safety risks such as those from overdoses, fire hazards, and death; and,
WHEREAS, the City finds that reasonable regulations for human habitation of vehicles overnight on private property used for businesses and nonprofit organizations are necessary to protect public health and safety.

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Ordinance No. 666

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF MORRO BAY, CALIFORNIA, DOES ORDAIN AS FOLLOWS:

SECTION 1. RECITALS. The recitals set forth above are true and correct and are hereby adopted as findings in support of this Ordinance as if fully set forth herein.

SECTIONS 2. NEW CHAPTER 8.27 ADDED TO CODE. Chapter 8.27 is added to Title 8 of the Morro Bay Municipal Code to read as follows:
“CHAPTER 8.27 – REGULATION OF OVERNIGHT HUMAN HABITATION OF VEHICLES ON PRIVATE

PROPERTY USED FOR BUSINESS OR NONPROFIT ORGANIZATION OPERATIONS

8.27.010 FINDINGS AND PURPOSE
A. The use of various types of vehicles for human habitation overnight on private property used for businesses or non-profit organizations impacts public health and safety as this activity tends to result in damage to private property, theft, public safety risks, the accumulation of trash, food waste, human waste and contaminated medical waste and the unauthorized discharge of Greywater and Hazardous Water.

B. It is the purpose and intent of the City Council to regulate and provide standards for the human habitation of vehicles overnight on private properties used for business and nonprofit operations so as to be as compatible as possible with the needs of everyone in Morro Bay to be healthy and safe.

8.27.020 DEFINITIONS
The following words and phrases, when used in this Chapter, shall have the meaning ascribed to them by this section unless it is apparent from the context that another meaning is intended.

A. “Business” means any business that is required to obtain a current and valid business tax certificate under Chapter 5.04 of the Morro Bay Municipal Code.

B. “Greywater” means untreated wastewater from bathtubs, showers, bathroom washbasins, clothes washing machines and the like. It does not include any toilet discharge, unhealthy bodily wastes, or manufacturing wastes.

C. “Hazardous Water” means sewage, toilet discharge, unhealthy bodily wastes, manufacturing wastes and the like.

D. “Human Habitation” means, considering all the circumstances, that a person is using a vehicle for: sleeping; bathing; preparing or cooking meals; or, possessing or storing items that are not associated with ordinary vehicle use, such as a sleeping bag, bedroll, blanket, sheet, pillow, used bedding, kitchen utensils, cookware, cooking equipment, camping gear, food, water, personal grooming items, or containers of feces or urine. Evidence of

01181.0001/943043.2
Ordinance No. 666

human habitation includes observations, considering all the circumstances, of any of the above, as well as that: a person has obscured some or all of the windows; there is litter, rubbish, or waste in or around the vehicle; there is furniture set up in or around the vehicle, such as chairs, tables, umbrellas, or portable cooking equipment; or, there is evidence of human urination or defecation around the vehicle.

E. “Nonprofit Organization” means an organization that qualifies for tax-exempt status by the IRS because its mission and purpose are to further a social cause and provide a public benefit, regardless of whether or not the organization has secured such tax-exempt status.

F. “Overnight” means at any time during the hours of 10:00 p.m. and 6:00 a.m. the following day.

G. “Vehicle” means a “motor vehicle” as defined by California Vehicle Code, section 415 and includes a “recreational vehicle” as defined by California Health and Safety Code, section 18010(a).

8.27.030 PROHIBITION AND REGULATIONS
A. Prohibition. Notwithstanding any other provision of this Code, overnight human habitation is prohibited in vehicles parked on private property owned or leased by a business or a nonprofit organization.

B. Exception. A total of three vehicles per parcel, may be used by persons who lack access to permanent or safe shelter and who cannot obtain other housing, for overnight human habitation in a parking lot or paved or gravel surface of a parcel of any size owned or leased by a business or nonprofit organization, with the permission of the property owner or lessee, after the owner or lessee is issued a City permit by the Community Development Department, and the owner or lessee complies with the requirements of subsection C.

C. Requirements. A property owner or lessee who allows overnight human habitation in vehicles on private property pursuant to this section shall:

1. Provide persons occupying such vehicles with access to sanitary facilities, including but not limited to toilet, hand washing and trash disposal facilities at all times people are authorized to be present overnight.

2. Not require payment of any fee, rent or other monetary charge for the activity authorized by this Chapter.

3. Restrict this use of owner's or lessee's property to one period consisting of no more than three (3) overnight stays, once every ten (10) days, per vehicle.

4. Not allow the discharge or dumping of wastewater, Greywater, Hazardous Water, or trash on the property unless sufficient City approved receptacles or hook ups are available.

01181.0001/943043.2
Ordinance No. 666

5. Not allow for the storage of personal property beyond six (6) feet immediately adjacent to the vehicle.

6. Not allow on-site storage of personal property when the personal property owner is no longer staying on the private property being used.

D. Revocation. A property owner or lessee who permits overnight human habitation in vehicles on private property pursuant to this Chapter may revoke that permission at any time and for any reason. Any person who has permission for human habitation in a vehicle on that property as provided in this Chaptershall leave the property with their vehicle and personal property immediately after permission has been revoked.

E. Existing Land Uses. The provisions of this Chapter are not intended to limit or otherwise change any land uses that may be permitted on real property under the Morro Bay Municipal Code.

8.27.040 VIOLATIONS AND ENFORCEMENT
A. Violations of this chapter are deemed a public nuisance, and may be abated as such. Each day a violation continues is deemed a new violation.

B. Violations of this chapter may be punishable as infractions or misdemeanors, pursuant to Chapter 1.16 of this Code.

C. Violations of this chapter may be punishable thorough administrative fines, in accordance with Chapter 1.03 of this Code, as may be set by City Council resolution.

D. Methods of enforcement for violations of this Chapter are not exclusive and may consist of multiple enforcement mechanisms where legally authorized and appropriate.

8.27.050 SUSPENSION OF ENFORCEMENT
The City Manager, or designee, is specifically authorized to modify or suspend enforcement of any section or part of this Chapter in the event of a declared emergency, pursuant to administrative rules or policies, weather conditions (including but not limited to extreme heat or cold), or for any other reason within the City Manager's authority, regardless of whether an emergency has been declared. In addition, the City Manager may suspend the enforcement of any of the regulations in this Chapter when the City Manager, or designee, has determined a person does not have access to shelter and is engaged in case management or behavioral health services, or when necessary or appropriate to respond to a person’s disability, or as further set forth in City's administrative policies implementing this Chapter 8.27 adopted by the City Manager, or designee, pursuant to Section 8.27.060.

01181.0001/943043.2
Ordinance No. 666

8.26.060 ADOPTION OF ADMINISTRATIVE RULES
The City Manager, or designee, may adopt administrative rules or policies governing or guiding enforcement of this Chapter, consistent with the intent of this Chapter, including but not limited to ensuring consistent and appropriate enforcement for various circumstances. These administrative rules or policies should ensure that enforcement is tailored to various circumstances, including but not limited to situations where a person has a disability under the Americans with Disabilities Act, where minor children are present or otherwise involved, where a person has employment obligations that may relate to their ability to comply with this Chapter, or for other reasons that may support discretion in enforcement. “ SECTION 3. SEVERABILITY. If any section, subsection, sentence, clause, phrase, or portion of this ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions thereof may be declared invalid or unconstitutional.

SECTION 4. POTENTIAL CONFLICTS. All ordinances, parts of ordinances, City resolutions or policies, and the like, in conflict with those sections amended or added herein to the Morro Bay Municipal Code, are hereby expressly superseded by this ordinance.

SECTION 5. EFFECTIVE DATE. This ordinance shall be in full force and effect thirty (30) days after its passage and adoption.
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01181.0001/943043.2
Ordinance No. 666

SECTION 6. CERTIFICATION. The City Clerk shall certify as to the passage and adoption of this ordinance, and the City Clerk shall cause the same to be posted and codified in the manner required by law.

INTRODUCED at a regular meeting of the City Council held on the 12th day of December 2023, which was continued to December 13, 2023, by motion of Council Member Barton and seconded by Council Member Landrum.

PASSED AND ADOPTED on the ______ day of _______________, 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:
____________________________
CARLA WIXOM, Mayor
ATTEST:
________________________________
DANA SWANSON, City Clerk
APPROVED AS TO FORM:
_________________________________
CHRIS F. NEUMEYER, City Attorney

01181.0001/943043.2
Ordinance No. 666

STATE OF CALIFORNIA )

COUNTY OF SAN LUIS OBISPO )

CITY OF MORRO BAY )
I, Dana Swanson, CITY CLERK OF THE CITY OF MORRO BAY, DO HEREBY CERTIFY that the foregoing Ordinance No. 666 was duly adopted by the City Council of the City of Morro Bay at a regular meeting of said Council on the ____ day of ______ 2024, and that it was so adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:

IN WITNESS WHEREOF I have hereunto set my hand and affixed the official seal of the City of Morro Bay, California, this ____day of ______, _____. _________________________________________
DANA SWANSON, City Clerk

Prepared By: ___TS Dept Review: ___TS
City Manager Review: ___YK_____ City Attorney Review: __LNL__ Staff Report
TO: Honorable Mayor and City Council DATE: December 27, 2023 FROM: Ted Schiafone, Harbor Director
SUBJECT: Approval of COL for Lease Sites 49/49W, 50-51/50W-51W and 52/52W, Bayside Landing and Suites project, presented by Paul Gillen

RECOMMENDED ACTION
Adopt Resolution No. 02-24 approving the Consent of Landowner (“COL”) so that the Developer can move forward with an application for a Conditional Use Permit thus allowing the Community Development Department, Planning Commission, and the public the opportunity to review and comment on the proposed project.

FISCAL IMPACT
Total rent revenue on all lease sites equals approximately $35,000 per year. If the project were to move forward as proposed, the annual rent and percentage income to the Harbor after three years would be approximately $170,000.

BACKGROUND
Lease Site 49/49W has always been vacant and unsuccessful in attracting a developer. Lease Sites 50-51/50W-51W have been a residential rental with a lease that expires on June 30, 2025. The lessee of Lease Site 50-51/50W-51W has not demonstrated interest in extending the lease or proposing any development.

A Request For Proposals (“RFP”) for the development of Lease Sites 49/49W and 50-51/50W-51W was issued June 15, 2023. Proposals were due October 12, 2023. Paul Gillin was the only proposal submitted. The proposal was reviewed, evaluated by the Harbor Department, Public Works, and Community Development. All three Departments recommended moving forward with the development process for Paul Gillin’s project.

DISCUSSION
This project brings a much-needed development to the south end of the Embarcadero. The proposer has the ability to finance and complete this project which, if approved, would add significant revenue to the Harbor Enterprise Fund. The proposed COL provides timeframes that must be met in order for the project to be completed in a timely manner. Note: only response times for the Developer are outlined in the COL, as control over the response of other agencies is not possible. If the project AGENDA NO: 7.e
MEETING DATE: January 9, 2024

moves forward and is approved by Council, staff will pursue a Master Lease that follows the current Harbor Department Lease Management Policy.

CONCLUSION
Staff recommends Council adopt Resolution No. 02-24 approving the COL so that the Developer can move forward with an application for a Conditional Use Permit, thus allowing the Community Development Department, Planning Commission, and the public with the opportunity to review the project and make the appropriate decisions.

ATTACHMENTS

1. Proposed COL

2. Resolution No. 02-24

3. Request for Proposals (RFP)

4. RFP Submittal – Bayside Landing and Suites

01181.0024/911004.1 Page | 1
City of Morro Bay
Tidelands Trust Grant Properties
Consent of Landowner Agreement Form
Consent For:

Redevelopment of Lease Sites 49-50-51-52/49W-50W-51W-52W, located at 431, 451 & 495 Embarcadero Road, by Paul E. Gillen doing business as Bayside Landing and Suites, as proposed to the City Council On January 9, 2024.

Site Location: Lease Sites 49-50-51-52/49W-50W-51W-52W
Lease Site Address: 431, 451 & 495 Embarcadero, Morro Bay, CA 93442 Property Owner: City of Morro Bay Telephone: 805-772-6254 Address: 595 Harbor St. City: Morro Bay State: CA Zip: 93442 Applicants: Paul Gillen Telephone: 805-234-5055
Address: 495 Embarcadero City: Morro Bay State: CA Zip: _93442

I, as representative of the City of Morro Bay, the owner of record of the trust interest in the above noted land for which an application for a Conditional Use Permit is being requested by the Applicant, do certify Consent of Landowner ( COL) is given as approved by the City Council on January 9, 2024, and with application to be submitted to the City of Morro Bay Community Development Department for processing in accordance with the following timelines:

1. Obtain a Conditional Use Permit (CUP) from the City:
o Applicants must submit for Design Review within 30 days after COL approval. ▪ COL Approval Submittal _________ Estimated –February 2024 o Applicants must submit for CUP within 120 days after Design Review approval. ▪ COL Approval _ Submittal _________ Estimated – May 2024 ▪
o If Design Review is not required, then Applicants will submit a CUP application within 120 days after COL approval.
▪ COL Approval _ Submittal _________ Estimated – N/A
o The City will schedule a City Council hearing for review and approval of the project within a reasonable time based upon agenda time and noticing requirements.

2. Other agency permits and approvals:
o Applicants shall submit to the California Coastal Commission (CCC) for a Coastal Development Permit (CDP) within 45 days after City Council approval of the proposed project.

01181.0024/911004.1 Page | 2
▪ COUNCIL Approval _________Submittal _________ Estimated-TBD o Applicants shall submit to the Army Corps of Engineers for the appropriate Permit within 15 days after CCC approval of the proposed project or before as warranted. ▪ CCC Approval _________ Submittal _________ Estimated – TBD o Applicants shall submit to the Regional Water Quality Control Board (RWQCB) for the appropriate Permit within 15 days after CCC approval of the proposed project or before as warranted.
▪ CCC Approval _________ Submittal _________ Estimated - TBD

3. Long-term lease and Financing:
o Applicants shall execute Master Lease Agreement 90 days after Council approval of the proposed project.
▪ COUNCIL Approval _________Submittal ________Estimated- TBD o Applicants shall secure financing within 180 days after Council approval of the proposed project.
i. Obtain evidence of available financing, acceptable to the Finance Director and City Attorney
ii. Submit a professionally prepared business plan.
iii. Submit a professionally prepared marketing plan.

COUNCIL Approval _________ Submittal _________ Estimated - TBD

4. Return to City for project modifications by CCC or other agencies:
o Applicants shall submit to the City for any project amendments within 30 days after CCC modification. This timeline may be amended if required by the other agencies for permit processing time.
▪ CCC Mod. _________ Submittal _________ Estimated - TBD

5. Obtain a building permit from the City:
o Applicants shall submit to the City for a building permit within 120 days after all agency approvals are complete.
▪ AGENCY Approvals _________ Submittal _________Estimated– TBD o Applicants shall resubmit for building plan check comments on the following time schedule:

1. Applicants shall resubmit within 90 days after the first City complete plan check.

PLAN CHECK DATE _________ Submittal TBD

2. Applicants shall resubmit within 30 days after minor corrections.

PLAN CHECK DATE _________ Submittal TBD

3. Applicants shall resubmit within 60 days after major corrections.

PLAN CHECK DATE _________ Submittal TBD
o The City shall issue a building permit within a reasonable time after all plan check comments have been satisfactorily corrected/completed by Applicants. This timeline

01181.0024/911004.1 Page | 3
may be amended, for example, eelgrass surveys are required prior to issuance of building permits (see notes below).

6. Construction commencement dates:
o Applicants shall commence construction within 120 days after a building permit has been issued. “Commence construction” shall mean when Applicants have spent a minimum of $50,000 on hard construction costs.
▪ BLDG PMT Issued _________ Start Date _________ Estimated – TBD o The following are allowable construction commencement delays and timing shall be coordinated with the City but in any case, no more than 12 months after issuance of building permit:

Pre-con eelgrass surveys:

1. To be no more than 30 to 60 days before start of construction.

2. Survey to be performed during the eelgrass growing season – April 1 to October 31. Unless otherwise approved by the appropriate agencies.

7. Construction completion:
▪ Const. Com. _________ C.O. Date _________ Estimated - TBD Applicants must meet the specified dates, or the City Council can deem this COL to be expired with 10-days’ written notice to Applicants or impose a penalty of 1/30th the base rent for each day, or portion thereof, that milestone was not met.

If, due to any reason outside the control of Applicants, as reasonably determined by the Harbor Director, any of the above compliance dates is not met, then one or more extensions to any of those compliance dates may be granted without penalty by the City Council in its sole discretion. _______________________________________________________________________________ Yvonne Kimball, City Manager Date
o The Applicants must complete construction for the approved project within 450 days after construction commencement, as evidenced by a Certificate of Occupancy (C.O.) issued by the City.

RESOLUTION NO. 02-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA

APPROVING CONSENT OF LANDOWNER DOCUMENT
FOR PAUL E. GILLEN, DOING BUSINESS AS BAYSIDE LANDING AND SUITES, TO REDEVELOP LEASE SITES 49/49W, 50-51/50W-51W AND 52/52W LOCATED AT 431, 451 & 495 EMBARCADERO ROAD

T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, the City of Morro Bay is the lessor of certain properties on the Morro Bay Waterfront described as City Tidelands leases and properties; and
WHEREAS, Mr. Paul Gillen (Gillen) has submitted a proposal for the redevelopment of Lease Sites 49/49W, 50-51/50W-51W and 52/52W located at 431, 451 and 495 Embarcadero Road; and WHEREAS, it is now appropriate for the City Council to grant Consent of Landowner approval for Gillen to submit an application for Conditional Use Permit consideration and approval.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Morro Bay, California, as follows:

1. The attached Consent of Landowner agreement provides Gillen doing business as Bayside Landing and Suites the permission and authority to submit their Lease Site redevelopment plans for Conditional Use Permit approval by the City.

2. The City Manager is hereby authorized to execute said Consent of Landowner agreement, subject to any minor or non-substantive review and revisions as to form by the City Attorney.

PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on the 9
th day of January 2024 on the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:
______________________________
CARLA WIXOM, Mayor
ATTEST:
_____________________________
DANA SWANSON, City Clerk

01181.0024/874315.1
City of Morro Bay
Request for Proposals

Redevelopment of
Lease Site 49/49W and
Lease Sites 50-51/50W-51W
431 Embarcadero and
451 Embarcadero
Morro Bay, CA 93442
Project: MB-2023-XXXX
49/49W
50-51/50W-51W

01181.0024/874315.1
2 June 15, 2023
SUBJECT: REQUEST FOR PROPOSALS FOR:

Lease Site 49/49W and Lease Sites 50-51/50W-51W
431 Embarcadero and 451 Embarcadero, Morro Bay, CA 93442 Prospective Proposers:

The City of Morro Bay invites the submittal of proposals from qualified individuals and entities (Proposer) to redevelop public land and water located on the Embarcadero for Lease Site 49/49W and Lease Sites 50-51/50W-51W, located at 431 Embarcadero and 451 Embarcadero, Morro Bay, CA 93442 (Property).

The City of Morro Bay intends to select a Proposer to redevelop the Property. The Property will be available on a long-term ground lease basis after Concept Plans for site redevelopment are approved.

The existing lease on site 50-51/50W-51W expires on June 30, 2025. There is no existing lease agreement for site 49/49W. Since design, planning and permitting can take substantial time, the City may leave the existing tenant for lease site 50-51/50W-51W in place on a lease holdover until Concept Plans for site redevelopment are approved and a new lease executed with the successful respondent to this Request for Proposals (RFP).

Instructions and forms to be used in preparing a proposal are found in the information included in the RFP document. The activity schedule for the RFP is included.

For more information and a copy of the City of Morro Bay Harbor Department Lease Management Policy, as well as a copy of the City’s standard lease format, visit the Harbor Department’s page of the City website under “Harbor Administration and Leases.” If you cannot agree to the requirements exactly as set forth in the RFP, then please do not submit a proposal.

For general questions, please contact Ted Schiafone, Harbor Director, by email at [email protected]. Specific questions relevant to the RFP must be submitted as- directed in the “Invitation to Participate” section of the RFP. It is the responsibility of any Proposer to review the City’s website for any revisions or answers to questions regarding the RFP prior to submitting a proposal in order to ensure all proposals are complete and responsive.

Sincerely,
Ted Schiafone
Harbor Director

01181.0024/874315.1 3
Redevelopment of
Lease Site 49/49W and Lease Sites
50-51/50W-51W, 431 Embarcadero and
451 Embarcadero, Morro Bay, CA 93442
Project: MB-2023-XXXX

TABLE OF CONTENTS
INTRODUCTION.................................................................................................. 4 SECTION I SITE HISTORY......................................................................... 6 SECTION II SITE DATA............................................................................... 7 SECTION III INVITATION TO PARTICIPATE............................................ 9 SECTION IV SELECTION PROCESS.......................................................... 11 SECTION V REQUEST FOR PROPOSALS SUBMITTAL PACKAGE.... 14 SECTION VI TENTATIVE PROPOSAL SCHEDULE ................................ 18 SECTION VII ATTACHMENTS.................................................................... 19

01181.0024/874315.1 4

INTRODUCTION
Purpose
The City of Morro Bay (City) is seeking proposals from qualified individuals and entities (Proposer) to redevelop Lease Site 49/49W and Lease Sites 50-51/50W-51W, public land and water located at 431 Embarcadero and 451 Embarcadero, Morro Bay, CA 93442, currently operating as vacant land and vacation rentals, and hereinafter referred to as the “Property” or the “Site.” The Site includes land and water lease sections and will be available for long-term lease after Concept Plans for the selected Proposer’s proposal are approved and a lease negotiated and executed. The term (length) and conditions of the long-term lease to be awarded as a result of this Request for Proposals (RFP) will be negotiable, depending on the investment and redevelopment plan of the Proposer. The subsequent lease agreement will become effective once approved by the City Council.

Objectives
The Morro Bay City Council has determined it is in the best interest of the City and public to consider redevelopment proposals for the Site. The City desires to have the Property redeveloped to continue to provide affordable visitor-serving opportunities that provide access to the bay, as well as an economic return to the City, while meeting modern design criteria that incorporate current planning and building codes for uses that are the most beneficial to the Embarcadero visitor-serving and business environments.

Key Objectives with the RFP are design improvements that include:
• Best and highest use of both the land and water portions of the S ite to maximize revenues and return on investment.
• Improved viewshed and façade.
• Adds to overall tourism draw.
• Restore and/or enhance the environment, where applicable. • Incorporation of an independent public restroom on the Site, if practical. • Include safety enhancements in the area, where applicable. • Proposals must conform to the City’s Downtown Waterfront Strategic Plan and Local Coastal Program, including, but not limited to:

01181.0024/874315.1 5
- Minimum 8-foot wide sidewalks and 10-foot wide lateral public access along the waterfront
- Architectural, and perhaps functional, emphasis on fishing village / marine heritage / working waterfront / national estuary themes. - ADA compliance.
- Incorporation of sustainability or “LEED” features, such as (but not limited to) solar, rainwater retention, drought-tolerant landscaping, recycling and waste management and stormwater runoff best management practices.

The City desires to solicit proposals to ensure maximization of public benefit from redevelopment and a long-term lease agreement for the Site. To do so, it is seeking Proposers who have the proven experience, financial resources, and professional expertise to deliver the highest quality and economically feasible project that is consistent with and best implements the land and water uses outlined in the City’s Downtown Waterfront Strategic Plan, General Plan, Local Coastal Program, Harbor Department Lease Management Policy and City Council Goals and Objectives.

01181.0024/874315.1 6
SECTION I: SITE HISTORY
Tracing back to English Common law the Public Trust Doctrine establishes navigable water or lands subject to tidal influence are “sovereign,” held open to the public for commerce, fisheries or navigation. In 1942-1944, the federal government constructed a revetment along the Morro Bay waterfront and filled most of the area now known as the commercial strip along the Embarcadero.

The State of California claimed ownership of the newly created land as at least a portion of it had previously been below the high tide line. After many years of dispute with private property owners, who also claimed an interest in the land, most title issues were settled in the 1950s-1960s by designating those lands west of Embarcadero Road as public trust lands owned by the State, and those lands east of Embarcadero Road as privately owned.

In 1947, the State of California granted those public trust lands in Morro Bay to the County of San Luis Obispo. The City of Morro Bay assumed trusteeship of the granted lands upon incorporation in 1964-1965. The tidelands grant in Morro Bay is in perpetuity, provided the City conforms to the terms of the legislative grant. The granted lands must be used for commerce, fisheries, navigation, recreational purposes, parklands, public access, public parking and environmental protection or enhancement. Residential use of the public lands is specifically prohibited. The City may lease out the lands to private businesses for a period up to 50 years and all revenues from such leases must be expended within the area of the granted lands for the purposes of the public trust.

It is primarily with those lease revenues the City manages the waterfront leases, provides and maintains various public, commercial fishing and other facilities and amenities, manages open spaces and the moorings in the bay and provides for the public safety with Harbor Patrol and Lifeguard services.

Lease Site 50-51/50W-51W has operated under a few different leases since the 1960’s, and the current lease expires June 30, 2025.

01181.0024/874315.1 7
SECTION II: SITE DATA
Lease Site 49/49W is delineated on Exhibit A, page 3 of City of Morro Bay Resolution 119-89, and was recorded on October 10, 1989, in the Office of the County Recorder, San Luis Obispo, California. The Property is located within the visitor-serving Tidelands Trust granted lands. The designated Site, located at 431 Embarcadero, has been surveyed and contains approximately 1000 square feet of land and 2500 square feet of water.

Lease Sites 50-51/50W-51W are delineated on Exhibit A, page 3 of City of Morro Bay Resolution 119-89, and was recorded on October 10, 1989, in the Office of the County Recorder, San Luis Obispo, California. The Property is located within the visitor-serving Tidelands Trust granted lands.

The designated Site, located at 451 Embarcadero, have been surveyed and contains approximately 2020 square feet of land and 3611 square feet of water.

A. Current Uses
The Site currently serves as vacant land and vacation rentals. There are public sidewalks and access on the eastern boundary of the land site.

B. Topography/Soil Conditions
The Site is generally flat on filled land, with a seawall/rock revetment leading down to the water.

Investigation of land, soil, seawall, revetment, and harbor bottom conditions for suitability of the proposed development shall be the responsibility of the Proposer.

C. Hazards
The Site is subject to all conditions and hazards commonly associated with a bay/ocean-front setting including, but not limited to:

1. Flooding: the Site is not in a designated flood zone.

2. Tsunami: the Site is within the tsunami 50-foot inundation zone.

3. Earthquake: the Site is within an earthquake hazard zone.

4. Storms: the Site is subject to periodic storm conditions.

5. Tidal Overflow: the Site can be subject to periodic tidal overflow.

6. Seawalls/Revetments: subject to erosion, scouring, tidal influences and normal deterioration in the marine environment.

01181.0024/874315.1 8
D. Archeology
The Site is not listed as, nor is it within 300 feet of a known archaeological site.

E. Zoning
The lease site is zoned Waterfront (WF) with Planned Development (PD) and Special Treatment (S.4) overlays. The waterfront zone is also subject to requirements in the City’s Downtown Waterfront Strategic Plan, which includes design guidelines. Allowable uses in the waterfront zone can be found at Morro Bay Municipal Code (MBMC) 17.24.170 and include a mixture of visitor-serving commercial, recreational and harbor-dependent land uses. Planning entitlements require both a conditional use permit and a coastal development permit. The Planned Development overlay describes the conditional use permit process, which requires concept plan approval by both Planning Commission and the City Council. Coastal Development Permit approval is then required by the California Coastal Commission prior to Planning Commission approval of the Precise Plan. Specific submittal requirements can be found at MBMC 17.40.030.

The Waterfront Master Plan document is available on the City’s website at http://www.morrobay.ca.us/documentcenter/view/1061.

F. Parking
There are currently zero (0) parking spaces attributed to the Site when calculating parking requirements for proposals.

01181.0024/874315.1 9
SECTION III: INVITATION TO PARTICIPATE
The City is seeking proposals from Proposers with experience in commercial facilities, with the financial resources and capabilities to fund a proposed project, and whose general development approach and concept for the site best meets the City’s objectives in this Request for Proposals.

A. Proposal Process

1. All proposals must be submitted per Section V, “Request for Proposals Submittal Package.” All proposals become the property of the City and will not be returned.

2. All times referenced in the RFP are “Verizon” cell phone time.

3. Submittals will be initially screened to ensure they are complete and conform to the RFP. City staff will review and evaluate the qualifying proposals and make recommendations in a Staff Report to the Selection Panel, defined below.

4. The City will convene the Selection Panel to review the proposals, and to interview each qualified proposing party. The Selection Panel shall consist of any combination of the following, as the City Manager, in consultation with the Harbor Director, determines in the City’s best interest:
• Members from City staff.
• Members of the public.
• Members of the Harbor Advisory Board and/or other constituencies.

5. The Selection Panel will make Primary and Secondary Proposers recommendations to the City Council.

6. The City Council will determine the final Primary and Secondary proposals, and approve a Consent of Landowner agreement with the Primary Proposer to begin the Concept Plan approval process. The Consent of Landowner will include specific milestones, such as, but not limited to, dates for submissions of plans and financial capacity information. If the Primary Proposer declines to participate, then the Secondary Proposer will ascend to the Primary Proposer position.

7. Concurrent with the Concept Plan approval process, City staff will begin preliminary negotiations for a long-term lease agreement with the Primary Proposer. Upon approval of the Concept Plan by the City Council, City staff will be in a position to complete lease negotiations and recommend to the City Council

01181.0024/874315.1 10
approval and execution of the lease agreement. Proposing parties must assume the basic terms of the new lease agreement will be as set forth in the City's draft standard master lease format and in compliance with the Harbor Department Lease Management Policy.

B. Permitting and Project Costs

ANY AND ALL COSTS INCURRED BY A PROPOSER RELATED TO THE RFP

PROCESS, INCLUDING, BUT NOT LIMITED TO, PERMITTING, DESIGN,

ENGINEERING, AND PLAN PREPARATION AND SUBMITTAL WILL BE THE SOLE RESPONSIBILITY OF EACH PROPOSER. THE CITY SHALL INCUR NO COST OR

LIABILITY FOR ANY COSTS RELATED TO THE RFP OR IF THE PROPOSER IS UNABLE TO COMPLETE THE PROJECT APPROVAL OR PERMITTING PROCESS.

C. City’s Right to Amend RFP
The City reserves the right to amend the RFP process and the selection procedures at any time.

It is the responsibility of any Proposer to review the City’s website for any RFP revisions or answers to questions prior to submitting a proposal in order to ensure all proposals are complete and responsive.

D. Contact Person
RFP Packets and written inquiries regarding the RFP or the project site can be obtained by contacting:

Harbor Director Ted Schiafone, Morro Bay Harbor Department 1275 Embarcadero
Morro Bay, CA 93442
805-772-6254
[email protected]
E. Pre-Proposal Meeting and Questions
Attendance is recommended at the Pre-Proposal Meeting and Site Walk-Through on Thursday June 22, 2023, at 10:00 a.m. starting at the Harbor Office, 1275 Embarcadero in Morro Bay. All questions on the RFP are due by 4:00 p.m. on Thursday June 29, 2023. For any questions posed, a response will be posted on the City website under the original proposal posting by 4:00 p.m. on Thursday July 6 2023.

01181.0024/874315.1 11
SECTION IV: SELECTION PROCESS
The City reserves the right in its sole discretion to waive any defect or omission in any proposal that does not materially affect the terms of the response to the RFP. The City reserves the right in its sole discretion to reject any and all proposals submitted, to revise its selection process at any time, and to rescind the RFP at any time.

A. Criteria for Selection of Proposer
The City will select a Proposal on the basis of maximization of public benefit in the proposed project, in addition to the proposing party's potential to bring the project to completion and successfully operate the lease site based on financial capability and experience. The City expects to negotiate with the selected Proposer on all aspects of the development program including a longterm lease for the Property.

Important elements influencing selection of a proposal are:
• Proposal best meets the Key Objectives of the RFP.
• Maximization of public benefit of the project and best utilization of both the land and water portions of the Site.
• Demonstrated financial capability, capacity and capitalization at the time of submitting proposal to undertake the redevelopment and successfully maintain ongoing operations.
• Proven capabilities, history and expertise in commercial development and redevelopment projects.
• Professionally-prepared business plan and ten-year pro forma with industrystandard elements expected of such documents. • Best balance between uses and requirements in the City’s General Plan, Local Coastal Program, Zoning Ordinance, building codes, and design elements. • The overall quality of the development team as evidenced by the professional reputations and experience of the principals and agents. • Lease terms proposed.
• Knowledge and experience in economic development and revitalization. • Experience in commercial leasing and property management.

01181.0024/874315.1 12
• The architectural excellence, engineering and overall quality of previous projects of like scope and scale.
• Anticipated financial benefit to the City.
• Proposed timing and progress through the design, planning, and permitting processes in order to minimize redevelopment timeline.

Proposed uses on the Site shall be in conformance with the Tidelands Trust and consistent with current planning, zoning and land use policies of the City. The selected Proposal will be subject to the normal planning, permitting and approval processes of the City and other regulators, including, but not necessarily limited to, the California Coastal Commission, Army Corps of Engineers and Central Coast Regional Water Quality Control Board.

B. Proposer Selection
The City reserves its right to seek input from various community and business representatives, staff, and other agencies. In addition, the City may utilize the services of leading consultants in the areas of design, land and marine architecture and engineering, real estate, economics, and law to assist in the evaluation of the proposals and to negotiate a new lease.

In order to submit a proposal, a $5,000 deposit is required as outlined in Section V. Deposits from proposing parties reviewed by the City will be held in trust during the proposal review period. After City Council selection, the City will refund Deposits from parties not in Primary or Secondary position, if any. The City will hold the Deposits from the proposing party under final Primary and Secondary consideration in trust during the approximate 12-month Concept Plan processing period.

If the Primary Proposer successfully completes Concept Plan approval of the selected Proposal, then all Deposits will be fully refunded. If the Primary Proposer fails to complete Concept Plan approval within the specified time, then the City will retain the Deposit as a processing fee and the Secondary Proposer may ascend to Primary status and the remaining Deposit handled accordingly.

C. Selection Methodology
In reviewing and evaluating the qualifications of the Proposers and the Proposals, the following criteria will be considered:

1. The Proposal’s compliance with the RFP – Pass/Fail

2. Overall quality of the conceptual design of the facilities and site plan. – up to 15 points

3. Proposer’s financial strength and current relationships with financing sources, and demonstrated ability to finance the proposal through to completion – up to 20 points

01181.0024/874315.1 13

4. Proposal that includes Key Objectives as outlined – up to 20 points

5. Demonstrated understanding of the development constraints on the Embarcadero, and market knowledge of the Morro Bay and Central Coast local and visitor serving needs – up to 10 points

6. Proposed lease terms, including financial benefit to the City – up to 15 points

7. Overall Proposer and team qualifications and experience in similar projects – up to 15 points

8. Proposed development schedule – up to 5 points
D. Exclusive Lease Negotiation
The City intends to enter into a long-term ground lease with the selected Proposer. The Harbor Department’s typical ground lease is “triple net” and includes base rent and percentage rent terms.

The selected Proposer will be financially responsible for all construction activities.

The lease will outline roles, expectations, responsibilities, goals, objectives and timelines with regard to the proposed development and specific financial parameters to which both the selected Proposer and City will adhere. Proposers will be responsible for all costs associated with the RFP process including all costs incurred by the Proposer associated with the negotiation and development of the lease, as well as all costs associated with the entitlement, permitting, CEQA processing, and development. The selected Proposer will work closely with the City to establish general design parameters for the proposed development.

The City and the selected Proposer shall negotiate a long-term ground lease agreement not to exceed a term of 50 years, the maximum allowable under State law.

01181.0024/874315.1 14
SECTION V: REQUEST FOR PROPOSALS SUBMITTAL PACKAGE

1. Proposal Submittal. All responses to the RFP must be received by U.S. mail or in person no later than 4:00 p.m. on October 5, 2023 Postmarks and proposals submitted by facsimile or email will not be accepted.

Proposals shall be delivered in person or mailed to:

City of Morro Bay
Attention: City Clerk
595 Harbor Street
Morro Bay, CA 93442
Submittal envelopes shall be clearly marked “MB-2023 XXXX” No fax or email proposals will be accepted.

2. Acknowledgement Form. Each proposing party must review, complete, and sign the attached Acknowledgement Form and include it with the Proposal.

3. Deposit Check. A $5,000 Deposit check or bank draft payable to the City of Morro Bay must be included with the Proposal. Deposit disposition shall be in accordance with Section IV. B.

All Proposers mustsubmit four copies of the following information:

A. Proposer Information

1. Identification. Name of the individual(s) and entity submitting the proposal and, if any, the type of entity and individuals who control the entity. Also, provide known members of development team such as architect, engineer, landscape architect, major equity investors, consultants, including project organizational and management roles in implementation of development.

2. Experience. Provide a brief description of the Proposer’s and key team members’ recent development experience. That experience should include projects in which the Proposer was instrumental, and which are similar to the kind of project or similar project being proposed. Please be specific and indicate references for each project.

3. Financial andBusiness Data. Provide information indicating:
a. How the Proposer has sufficient financial resources to undertake the project, including a statement of proof of financial capability to plan and construct the proposed project.
b. Bank references where appropriate. The latter may be in the form of letters of financial approval from bank or financing institutions.

01181.0024/874315.1 15
c. A minimum of three credit references.
d. Financing for prior or current development projects. e. A current Credit Report, including Credit Score.
f. If the Proposer is involved in any litigation or other disputes that could affect its ability to fulfill the terms of a commercial lease. g. Any other documents or reports that would assist in determining the financial condition of the Proposer.
h. The length of time and locations at which the Proposer has operated like or other businesses.
i. Contact information for three business references.
j. A current or most recent Landlord reference, if applicable.

The City will independently investigate the financial background of proposing parties as agreed to in the required Acknowledgment Form.

B. Business Plan and Pro Forma
The Proposal shall include a business plan and ten-year pro forma for the entire development to include, but not be limited to, design, planning, permitting, construction, operation and maintenance, and stabilization. A description of the Proposal’s financing as it pertains to the pro forma shall also be included. The Proposal should include an estimate of the total value of the project, broken down into land and water improvement values. The pro forma must reflect all income and expense line items necessary to the proper functioning of the operation, including, but not limited to, ground lease payments, with sufficient detail and clarity, for the Proposal to be properly evaluated by the City.

C. Proposal Narrative

1. Narrative. The written narrative must be included in the Proposal describing the redevelopment of the Site, the type of development envisioned and its market orientation, which best implements both the land and water elements of the Site.

2. Design. The narrative should include the basic design elements, especially as they pertain to the City’s waterfront design criteria, and all current planning conditions and zoning standards.

D. Proposal Visuals
ALL DRAWINGS SHALL BE 24” X 36” BLACKLINE PRINTS WITH A HORIZONTAL LAYOUT. FOUR SETS ARE REQUIRED.

EACH 24” X 36” DRAWING SHALL ALSO BE PROVIDED IN 8 ½” X 11” BLACK AND WHITE REDUCTIONS WHICH CAN BE PHOTO-COPIED.

01181.0024/874315.1 16

1. Site Plan. Site Plan illustrating at an appropriate scale the outline of all buildings and improvements, including proposed building locations, landscape and hardscape areas, adjoining public areas, and proposed public improvements. Tabulations in square footage and percentage of the following shall be shown on the Site Plan:
a. Building footprint, landscaped areas and hardscaped areas, b. Individual building tabulations depicting gross floor area and gross leasable floor area as well as proposed use, and
c. Designation of parking designated as standard, compact, handicap and loading spaces, if applicable.

2. 4-Sided Elevations. Four sided elevations shall be at appropriate scale and overall dimensions shall not exceed 24” X 36.” All elevations shall be dimensioned to illustrate the height of roof and height of parapet. Material details shall be illustrated on those elevations.

3. Section Drawings. Section drawings shall be provided of all street frontages, and shall show true dimensions and the outlines of buildings on the adjoining lots. Section drawings shall include the adjacent roadway.

4. Colored Site Plan Rendering. A rendering utilizing the above-mentioned Site Plan shall be provided. The Site Plan rendering is intended to provide a colored overall view of the entire project.

5. Building. A narrative description of proposed treatment of building facades and features shall be included. If appropriate, photographs of existing buildings with similar facades may be included to further illustrate the concept.

6. Water Portion. Proposals must include plans, elevations and other depictions for the water portion of the Site as well.

NOTE: Each Site Plan will be considered “pre-Conceptual” and will be subject to adjustment and City-approval once a proposal has been selected and the details of the project are finalized through the planning, permitting, and negotiation processes.

E. Terms of Lease
The proposal must include an accurate estimate of the total cost of redevelopment, and a set of draft lease and business terms and conditions the Proposer would be willing to negotiate for development of the project and subsequent ground lease.

01181.0024/874315.1 17
F. Schedule
Include a preliminary time schedule including any proposed phasing of land and/or water redevelopment. The schedule should include any financial scheduling, amortization, etc.

G. Ownership of Materials
All drawings, plan documents, proposals and other materials submitted by the Proposer shall become the permanent property of the City.

SECTION VI: TENTATIVE PROPOSALSCHEDULE
ACTIVITY/Key Steps DATE
Issue Request for Proposals Thursday, June 15, 2023
RecommendedPre-Proposal Meeting and
Site Walk-Through Thursday, June 29, 2023
Questions Due by Thursday, July 6, 2023
Responses to Questions Posted by Thursday, July 13 2023 Proposals Due by Thursday, October 12, 2023
Proposals Evaluated October 2023
Consent of Landowner Approval Granted Winning
Proposer (estimated) November 2023
Winning Proposer Submits Complete Plans to Begin
Concept Plan Approval Process (estimated) February 2024 Concept Plans Approved, Lease Negotiation (estimated) Spring 2024 New Lease Approved and Inaugurated (estimated) Fall 2024 Site Redevelopment Begins (estimated) Winter-Spring 2025 Site Redevelopment Completion (estimated) Winter-Spring 2026

01181.0024/874315.1 18
SECTION VII: ATTACHMENTS
Attachment 1: Acknowledgement Form
Attachment 2: Proposer Information
Attachment 3: Lease Site Map

THANK YOU FOR YOUR INTEREST IN WORKING WITH THE CITY OF MORRO BAY ON THIS EXCITING OPPORTUNITY.

WE LOOK FORWARD TO RECEIVING YOUR PROPOSAL.

01181.0024/874315.1 19
ATTACHMENT 1
Lease Site 49/49W and Lease Sites
50-51/50W-51W, 431 Embarcadero and
451 Embarcadero, Morro Bay, CA 93442
Project: MB-2023-XXXX
Initial Below

1. I have reviewed all of the information in this Request for Proposals, and all additions, changes and answer provided on the City’s website and agree to all of the terms and conditions outlined therein.

2. I understand each proposing party must review the City’s General Plan, Local Coastal Program, and any and all planning and permitting elements as they pertain to this lease site.

3. Any new lease with the City must be in the City’s approved Master Lease format and should comply with the City’s Harbor Department Lease Management Policy.

4. I have reviewed the City’s Master Lease format and Harbor Department Lease Management Policy and agree the lease policy and basic lease format is acceptable for any future lease negotiations.

5. I agree the City may take all steps necessary to investigate any financial information provided in response to this Request for Proposals. The City has my permission and consent to investigate such information however it deems appropriate.

6. Enclosed is a check or bank counter draft in the amount of $5,000 made out to the City as a Deposit and an indication of good faith interest for consideration in this Request for Proposals.

7. I agree that check will be handled as outlined in this Request for Proposals including that the check may be retained by the City as a processing fee under certain conditions.

8. The parties signing below are all the parties in interest in our proposal to the City in response to this Request for Proposals, and, if part of a partnership or other entity, affirm that they have the authority to enter into this Request for Proposals.

Printed Name Signature Date
Printed Name Signature Date

01181.0024/874315.1 20
ATTACHMENT 2

PROPOSER INFORMATION

REQUEST FOR PROPOSALS
Lease Site 49/49W and Lease Sites
50-51/50W-51W, 431 Embarcadero and
451 Embarcadero, Morro Bay, CA 93442
Project: MB-2023-XXXX
Include the personal information for all individuals or entities submitting this proposal. If a corporation or partnership, then include corporation or partnership information (i.e., type, state of incorporation, articles of incorporation and by-laws, officers’/members’ names and contact information and length of time of office our membership, when registered to do business in California):

Name
Address
Phone(s) (home) (work)
(cell)
Email
Name
Address
Phone(s) (home) (work)
(cell)
Email
Name
Address
Phone(s) (home) (work)
(cell)
Email

01181.0024/874315.1 21
ATTACHMENT 3

LEASE SITE MAP
(follows)

01181.0024/874315.1

BAYSIDE LANDING AND SUITES
City of Morro Bay
Attn: City Clerk and Ted Schiafone, Harbor Director
595 Harbor St., Morro Bay, CA 93442

PROPOSED DEVELOPMENT OF LEASE SITES
49 L 49 w, 50 L 50 W, 51 L 51 w AND 52 L, 52 W

SEAGULL VIEW
Submitted by:

Paul E. Gillen
[email protected]
805 234 5055
10/12/2023

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
Cover Letter
Signed Acknowledgement
Credit References
Introduction to Paul E. Gillen – Principal Shareholder Bayside Landing & Suites Design/Engineering/Construction Team
Principal Financial Information on Developer
Credit References
Business References
Landlord References
Business Plan
Narrative on Design
Drawings
Site Plan
4 Side Elevations
Section Drawings
Colored Site Plan Rendering
Building
Water Portion
Proposed Terms of Lease
Schedule
Statement of Ownership of Materials
October 12, 2023
City of Morro Bay

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
Attn: City Clerk and Ted Schiafone, Harbor Director
595 Harbor St.

Morro Bay, CA 93442
Dear Harbor Director and Selection Panel,
This proposal is in response to the RFP request for the Redevelopment for Sites 431 and 451 Embarcadero, Morro Bay.

This proposal is not only to provide for the development of the vacant lease site 49/49W and re-development of 50-51/50W51W, but to combine my current lease sites, 52/52W, as part of an overall larger project re-development. This comprehensive project development over the multiple lease sites will transform the south end of the Embarcadero to a significant visitor destination. This proposal is contingent on all these lease sites being approved for development.

This packet includes a project description, construction estimates, my qualifications, financial assurances to attest to my financial capabilities, and other pertinent information as outlined in the RFP. The project includes new retail shops, food and beverage services, floating docks, public space and more. The plan as presented meets or exceeds the City’s regulations and standards for development along the waterfront.

This proposal has several distinct advantages. The southern developed end of the Embarcadero has long suffered from limited visitor foot traffic, nothing really of interest from a commercial or retail perspective. This proposal creates retail, food and beverage and sweeps the HarborWalk viewing platform back onto the Embarcadero, plus eight boutique hotel rooms with spectacular southern and rock views. I am the current lease site holder of lease sites 52/52W with over 18 years in good standing with the City of Morro Bay plus I have the ability and resources to commence constructing this project sooner than other prospective developers if the agency permitting process was to go quickly. In addition, my proposal provides an abundance of comprehensive public benefit features incorporating public viewing decks, public restroom and commercial access to docks and watersports activities.

Please accept my project proposal and grant me this opportunity to construct a new project that can anchor the southern end of the Embarcadero and create a better visitor-serving and pedestrian environment.

Thank you for your time and consideration. Please feel free to contact me with any questions.

Sincerely,
Paul Gillen
Sincerely,
Paul E. Gillen
President
Associated Pacific Constructors, Inc.

01181.0024/874315.1 19
ATTACHMENT 1
Lease Site 49/49W and Lease Sites
50-51/50W-51W, 431 Embarcadero and
451 Embarcadero, Morro Bay, CA 93442
Project: MB-2023-HD01
Initial Below

1. I have reviewed all of the information in this Request for Proposals, and all additions, changes and answer provided on the City’s website and agree to all of the terms and conditions outlined therein.

2. I understand each proposing party must review the City’s General Plan, Local Coastal Program, and any and all planning and permitting elements as they pertain to this lease site.

3. Any new lease with the City must be in the City’s approved Master Lease format and should comply with the City’s Harbor Department Lease Management Policy.

4. I have reviewed the City’s Master Lease format and Harbor Department Lease Management Policy and agree the lease policy and basic lease format is acceptable for any future lease negotiations.

5. I agree the City may take all steps necessary to investigate any financial information provided in response to this Request for Proposals. The City has my permission and consent to investigate such information however it deems appropriate.

6. Enclosed is a check or bank counter draft in the amount of $5,000 made out to the City as a Deposit and an indication of good faith interest for consideration in this Request for Proposals. A check is currently in with the City from a previous application on this project.

7. I agree that check will be handled as outlined in this Request for Proposals including that the check may be retained by the City as a processing fee under certain conditions.

8. The parties signing below are all the parties in interest in our proposal to the City in response to this Request for Proposals, and, if part of a partnership or other entity, affirm that they have the authority to enter into this Request for Proposals.

Printed Name Signature Date
Printed Name Signature Date
X
X
X
X
X
X
X
Paul E. Gillen

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
Principal Owner/General Contractor
Paul E. Gillen - Associated Pacific Constructors, Inc.

Paul has a long history of creating and building waterfront projects. Paul’s “water cooled” career started as a teenager growing up on a small Atlantic Island called Bermuda.

Diving was a summer job that launched him into various commercial diving certifications, landing him a job in the North Sea as a Hyperbaric diver welder and saturation diver in the early 70s. Undertaking a range of u/w projects the likes of repairing pipelines, wet welding on platforms and salvaging sunken vessels, becoming a seasoned North Sea veteran at the age of 28 so after 7 years in the North Sea it was time to dry out a bit and it was off to various international marine construction projects around the world, landing in Singapore in the mid 80’s through to the mid 90’s , married and with a growing family, Paul formed a number of marine oriented business based in Singapore, assisting in the construction one of the first world class marinas in southeast Asia, a full-service boat yard and chandlery amongst numerous other varied projects in Malaysia, Thailand, Philippines and Indonesia. So leaving the tropics and returning to the US in 1994 Paul formed a new marine construction company with three other partners in Houston Texas, building power plants, marine loading terminals, bridges and wharfs on a turn-key basis throughout the Caribbean and Gulf Coast. In 2000 Paul returned to California and continued his international consulting services until teaming up with Reg Whibley in 2003 and eventually acquiring Associated Pacific Constructors (APC) in 2005. Since acquiring APC Paul has led the company the last 18 years with over $92 million in revenue safely building and repairing marine structures from offshore platforms, pipelines, dredging, bridges, piers, and wharfs to commercial marina developments. APC has maintained a marine facility in Port of Los Angeles since 2008 and maintains a water and land lease in good standing. APC still manages the State Park Marina in Morro Bay under a

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
concession from the State of California. So, Paul has a proven commitment to Morro Bay’s marine presence and believes this development would truly enhance Morro Bay’swaterfront appeal.

Paul E. Gillen’s Personal and Customer References
2005 to Present
Thomas H. Anderson
SVP – Regional President 1st Capital Bank
[email protected] (805) 712-8625 (cell) City of Morro Bay
Rick Algert – Ex MB Harbor Master
Eric Endersby- Ex MB Harbor Master
Local Clients current and existing
(note all our customers in Morro Bay are very satisfied customers) Cliff Branch-Owner of Boatyard and ex Otter Rock
Travis Leage-HarborWalk Plaza
Brandon Leage-GAFCO owner
Troy Leage-Harbor Hut
Giovanni DeGarimore-Giovannis Fish Market
Paul & William Van Beurden-Dutchman
Smith Held- Harbor Center -Held Properties
Clayton Gambril – Salt Building
Doug Redican – Roses Landing
Gene Doughty – Land and Sea Interface
Cathy Novak- Cathy Novak Consulting
RFP Response Date October 12, 2023

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
Construction Team Overview
Bayside Landing and Suites will operate as a Limited Liability Company (LLC) with Paul E. Gillen slated to become the Principal Shareholder. In this capacity, Mr. Gillen will assume critical responsibilities, including the selection of the management team, approval of the marketing budget, decisions related to online or cloud reservation systems, capital expenditures, and the formulation of the strategic business plan.

To ensure the seamless operation of Bayview Landing and Suites, the business will hire a General Manager. This individual will be tasked with overseeing the Profit and Loss of all revenue units, including the selection of staff for hotel front desk, maid services, maintenance services, and food services. Additionally, the General Manager will manage leases on retail and slip spaces, with previous boutique hotel experience being a valuable qualification for this role.

This future structure, with Mr. Gillen at the helm and the General Manager overseeing day-today operations, will ensure a well-organized and efficient management framework for Bayview Landing and Suites success in the hospitality industry.

Team
Paul E. Gillen - Principal Shareholder of a to be formed LLC.

Paul E. Gillen is a visionary entrepreneur and the driving force behind the creation of Bayside Landing and Suites. With a profound passion for Morro Bays waterfront and unwavering commitment to create a first-class facility, Paul will assemble a team of proven professionals in the hospitality management and guest serving industry to reach the objectives.

Principle Owner/Contractor
Paul E. Gillen Associated Pacific Constructors, Inc.

Paul has a long history of creating and building waterfront projects. In the mid 80’s through to the mid 90’s , 10 years in Singapore, Paul owned and operated several marine oriented businesses constructing one of the first world class marinas in southeast Asia, a full-service boat yard and chandlery amongst numerous other varied projects in Malaysia, Thailand, Philippines, and Indonesia. After returning to the US in 1994 Paul formed a new marine construction company with three other partners in Houston Texas, building projects throughout the Caribbean and Gulf Coast from its Houston Base. In 2000 Paul returned to California and continued his international consulting services until teaming up with Reg Whibley in 2003 and eventually acquiring Associated

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
Pacific Constructors in 2005. Since acquiring APC Paul has led the company the last 18 years with over $70 million in revenue building and repairing marine structures from offshore platforms, pipelines, piers, and wharfs to commercial marina developments.

As current sole owner of Associated Pacific Constructors, Inc. and master lease holder of Lease Site 52 &52W, Paul plans form a new LLC corporation will be the General Contractor and Project manager for the design, permitting and construction of this project, in conjunction with the following team of consultants and engineering firms.

Architect
Gene Doughty
Land and Sea Interface
Morro Bay, Ca 93442
[email protected]
Permitting – Agency Liaison
Cathy Novak Consulting
[email protected]
Environmental Consultant
Padre Associates Inc.
369 Pacific St.

San Luis Obispo, Ca. 93401
805 786-2650

Embarcadero View
Preliminary Construction Budget
9/19/23
Bayview Landing and Suites 1st Quarter 2nd Quarter 3 rd Quarter 4th Quarter 5th Quarter Preliminary Construction Budget
10/1/2023
Engineering $ 40,000.00 1 $ 40,000.00 $ 12,000.00 $ 13,000.00 $ 15,000.00 $ -
Architectural 200 Hrs $ 200.00 1 $ 40,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ -
Electrical Design $ 8,000.00 1 $ 8,000.00 $ 8,000.00
$ -
Mechanical Engineering $ 20,000.00 1 $ 20,000.00 $ 10,000.00 $ 10,000.00 $ -
City Building Permits $ 40,000.00 1 $ 40,000.00 $ 25,000.00 $ 15,000.00 $ -
Permitting Consultant $ 10,000.00 1 $ 10,000.00 $ 10,000.00 $ -
Accommodation 384 sq ft $ 200.00 8 $ 614,400.00 $ - $ 400.00 $ 200,000.00 $ 200,000.00 $ 214,000.00 Demo Site Prep 1 $ 35,000.00 1 $ 35,000.00 $ 35,000.00
$ -
Foundation 1 $ 150,000.00 1 $ 150,000.00 $ 100,000.00 $ 50,000.00 $ -
Structural Steel /Framing 1 $ 80,000.00 1 $ 80,000.00 $ 30,000.00 $ 30,000.00 $ 20,000.00 $ -
Utilities 1 $ 40,000.00 1 $ 40,000.00 $ 20,000.00 $ 20,000.00 $ -
Elevator 1 $ 100,000.00 1 $ 100,000.00 $ 50,000.00 $ 50,000.00 $ -
Roofing 450 $ 45.00 4 $ 81,000.00 $ 45,000.00 $ 36,000.00 $ -
Electrical 1 WAG $ 150,000.00 1 $ 150,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00 $ - $ -
Fire Suppression 1 WAG $ 35,000.00 1 $ 35,000.00 $ 35,000.00 $ -
Plumbing 1 WAG $ 75,000.00 1 $ 75,000.00 $ 50,000.00 $ 25,000.00 $ -
Windows 1 WAG $ 4,500.00 8 $ 36,000.00 $ 12,000.00 $ 12,000.00 $ 12,000.00 $ -
Architectural Finishes 1 WAG $ 50,000.00 1 $ 50,000.00 $ 25,000.00 $ 25,000.00 $ -
Accomd Decking 128 sq ft $ 45.00 8 $ 46,080.00 $ 30,720.00 $ 15,360.00 $ -
Common area deck 1500 sq ft $ 30.00 1 $ 45,000.00 $ 45,000.00 $ -
Railing 400 LF $ 350.00 1 $ 140,000.00 $ 140,000.00
$ -
Exterior lighting 1 WAG $ 45,000.00 1 $ 45,000.00 $ 20,000.00 $ 20,000.00 $ 5,000.00 $ -
Laundry 1 WAG $ 75,000.00 1 $ 75,000.00 $ 75,000.00
$ 1,955,480.00
$ 1,955,480 $ 260,000.00 $ 178,400.00 $ 397,000.00 $ 622,720.00 $ 497,360.00 Renovate Existing Building 495 Embarcadero
Demo 1 Est $ 23,000.00 1 $ 23,000 $ 12,000.00 $ 11,000.00 Reconstruction Structural 1 WAG $ 28,000.00 1 $ 28,000 $ 15,000.00 $ 13,000.00 Framing 1 WAG $ 15,000.00 1 $ 15,000 $ 5,000.00 $ 10,000.00 Electrical 1 WAG $ 20,000.00 1 $ 20,000 $ 10,000.00 $ 10,000.00 Utilities 1 WAG $ 10,000.00 1 $ 10,000 $ 5,000.00 $ 5,000.00 Plumbing 1 WAG $ 10,000.00 1 $ 10,000 $ 10,000.00
Windows 1 WAG $ 12,000.00 1 $ 12,000 $ 6,000.00 $ 6,000.00 Fire 1 WAG $ 15,000.00 1 $ 15,000 $ 5,000.00 $ 10,000.00 Architectural Finish 1 WAG $ 30,000.00 1 $ 30,000 $ 30,000.00 Roof 1 WAG $ 25,000.00 1 $ 25,000 $ 25,000.00
Kitchen 1 WAG $ 70,520.00 1 $ 70,520 $ 70,520.00
495 Embarcadero Repurpose Cost WAG $ 258,520 $ 58,000.00 $ 200,520.00 $ - $ - $ - Marina Dock
Docks 1800 sq ft $ 100.00 1 $ 180,000 $ 90,000.00 $ 90,000.00 Guide Piling 7 each $ 8,000.00 8 $ 64,000 $ 64,000.00
Landing 2 EST $ 5,000.00 1 $ 10,000 $ 10,000.00
Gangway 2 EST $ 8,000.00 1 $ 16,000 $ 16,000.00
Utilities 8 EST $ 2,000.00 1 $ 16,000 $ 16,000.00
Marina Dock System $ 286,000 $ 90,000.00 $ 196,000.00 $ - Total Development Costs $ 2,500,000 $ -
Contingency Allocation 20% $ 3,000,000
Landside Improvements $ 2,656,800.0 $ 408,000.00 $ 574,920.00 $ 397,000.00 $ 622,720.00 $ 497,360.00 Waterside Improvements $ 343,200.0
Plus 495 Carry over $ 300,000.00 Cash by Quarter including contingency $ 489,600.00 $ 689,904.00 $ 476,400.00 $ 747,264.00 $ 596,832.00 Total Project Improvement Costs $ 3,300,000.0
Units Unit Cost No. of Units Extended

RFP Response Date October 12, 2023
THOMAS H. ANDERSON
SVP, Regional President
Office: (805) 592-2043
Mobile: (805) 712-8625
599 Higuera Street. Suite B
San Luis Obispo, CA 93401
www.1stcapital.bank

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
Principal Investor Financial information
Paul E. Gillen will be the Principal investor and has a long-standing relationship with the Primary Banker who has attached a letter of support for this project. Paul considers his financial information highly confidential and will provide specific information after obtaining a NDA from the individual in the City of Morro Bay responsible for evaluating this information.

As an alternative the City individual may contact my banker to obtain any assurances on my financial ability to construct and execute this business plan.

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
Credit References
Associated Pacific Constructors, Inc.

As of: Oct. 1, 2023
495 Embarcadero Tax ID #: 95-3501283, Corporation Morro Bay, CA 93442 Contractor’s License #: 394886 11/30/18
Phone: (805) 772-7472 DUNS: 08-717-3118
Fax: (805) 772-5803
Email: [email protected]
Name or Number Contact: Robin Ludwig (805) 234-2763
The business started in 1975. Incorporated in 1980 in California. 36 years at the above referenced address.

Effective January 1, 2006 the company was purchased by Paul E. Gillen through the sale of company stock.

Paul is President and Chief Operating Officer and manages the daily operations.

TRADE REFERENCES:

Company Contact Phone Email
Gemini Forest Products Jill Epson (562) 594-8948
Cat Finance Credit Department NABC.customerrelations.com Miners Hardware Natalie (800) 489-0158 x 112 [email protected] Contractors Maintenance AR (805) 541-4558
JD Fields Chris Risso (978) 505-1740 [email protected] Techno Coatings Jennifer Alvarez (714) 635-1130 x 243 [email protected] Bluewater Marine Jim Booth (619) 449-2007 [email protected] BANK REFERENCE:

Primary Bank Contact
1st Capital Bank Thomas H Anderson
599 Higuera Street, Suite B SVP Regional President
San Luis Obispo, CA 93401 Office (805) 592-2043
www.1stcapital.bank Mobile (805) 712-8625

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
Business References
City of Morro Bay
Rick Algert
Eric Endersby
City of Newport Beach
Public Works Director – Dave Webb- [email protected] Harbor Resources Director – Chris Miller [email protected] (949) 644- 3043
City of Newport Beach - Harbor Master – Paul Blank [email protected] (949) 270-8158
Private Custom Home Builders Newport Beach
JC Dyer – Chris Dyer owner- [email protected] (949) 715-8916 PMR Construction – Chris Miller owner [email protected] (714) 754-4111 RD Olson Development – Robert D Olson – President
[email protected] (949) 271-1101
City of San Clemente
Senior Civil Engineer – Amir K. IIkhanipour [email protected](949) 361-6140
City of Avalon
Director of Public Works – Bob Greenlaw (210) 510-0220 Ext 129 [email protected]

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
Landlord References
Port of Los Angeles – Waterfront and Commercial Real estate Sr. Real Estate Officer – Kevin Kim [email protected]

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
Business Plan
Forecast
Revenue
The revenue is expected to begin in September 2026, following a 15-month construction phase commencing in July 2025. Our revenue streams are categorized as Hotel Room, Food Service, Beer & Wine, Marina Slips, and Retail Rental. We anticipate the first year of operation, being that it will be opening at the end of our summer season our conservative 12-month revenue is forecasted to be $ 1,887,655, with year two $ 2,166,895 and year three $2,251,815. We are projecting a conservative 5% growth in revenue the following 7 years, subject to many different economic factors.

Net Profit
Our primary focus is on sustainable growth, with a target net profit percentage between %10- 20%.

Financing
We have tentatively set up financing this project with a combination of the principal investor meeting the initial cash requirements of $ 600,000 and 1st Capital Bank supporting the construction loan of up to $2,600,000. The initial working capital will be made available by the principal shareholder of $400,000.

Key Assumptions used in this Business Plan
 Average Hotel Room Rates adjusted per seasonality.
 Combined TOT at 14 ½ %
 Food Service 3%
 Beer and Wine 5%
 Marina Slips 10%
 Retail Sublet of space 3-5%
 Annual Min Rental $ 60,000.
 50 year lease term

Bayside Landing Suites
Pro Forma Business Plan
10/3/23

BAYSIDE LANDING AND SUITES
Revenue Projections
YEAR 1
Hotel Units August September October November December January Feburary March April May June July Occupancy Rate per month 20% 30% 45% 65% 90% 90% 65% 70% 80% 90% 90% 100% Percentage of Occupancy Revenue 12,200.00 $ $ 18,300.00 $ 27,450.00 $ 39,650.00 $ 54,900.00 $ 54,900.00 $ 39,650.00 $ 42,700.00 $ 48,800.00 $ 54,900.00 $ 54,900.00 $ 61,000.00 $ 509,350.00 ANNUAL ROOM REVENUE Days Occupancy 48.8 73.2 109.8 158.6 219.6 219.6 158.6 170.8 195.2 219.6 219.6 244 2037.4 ANNUAL TOTAL DAYS OCCUPANCY IT Management Software 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 18,000.00 $ Annual management software Direct Costs 1,171.20 $ $ 1,756.80 $ 2,635.20 $ 3,806.40 $ 5,270.40 $ 5,270.40 $ 3,806.40 $ 4,099.20 $ 4,684.80 $ 5,270.40 $ 5,270.40 $ 5,856.00 $ 48,897.60 ANNUAL COST Management $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 120,000.00 Annual Management Net Operating Income $ (471.20) $ 5,043.20 $ 13,314.80 $ 24,343.60 $ 38,129.60 $ 38,129.60 $ 24,343.60 $ 27,100.80 $ 32,615.20 $ 38,129.60 $ 38,129.60 $ 43,644.00 $ 322,452.40 Net Profit before tax and depreciation refer below detail TOT PER NIGHT PER RM $ 1,769 $ 2,654 $ 3,980 $ 5,749 $ 7,961 $ 7,961 $ 5,749 $ 6,192 $ 7,076 $ 7,961 $ 7,961 $ 8,845 $ 73,855.75 TOT BED TAX PAID CITY OF MB Light food service August September October November December January Feburary March April May June July100 meals day 50% 50% 50% 50% 65% 65% 65% 90% 80% 90% 90% 90% % of Revenue of 100% Av $20 per meal $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,300.00 $ 1,300.00 $ 1,300.00 $ 1,800.00 $ 1,600.00 $ 1,800.00 $ 1,800.00 $ 1,800.00 Daily Revenue by Month Montly Rev $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 39,000.00 $ 39,000.00 $ 39,000.00 $ 54,000.00 $ 48,000.00 $ 54,000.00 $ 54,000.00 $ 54,000.00 $ 501,000.00 Annual Revenue 6 day week Monthly DC $ 12,000.00 $ 12,000.00 $ 12,000.00 $ 12,000.00 $ 15,600.00 $ 15,600.00 $ 15,600.00 $ 21,600.00 $ 19,200.00 $ 21,600.00 $ 21,600.00 $ 21,600.00 $ 200,400.00 Direct Cost Wait Staff 2 persons $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 156,000.00 Labor Fast Food, Delicatessen 5% $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,950.00 $ 1,950.00 $ 1,950.00 $ 2,700.00 $ 2,400.00 $ 2,700.00 $ 2,700.00 $ 2,700.00 $ 25,050.00 Percentage Gross 5% Net Operating Income $ (2,500.00) $ (2,500.00) $ (2,500.00) $ (2,500.00) $ 650.00 $ 650.00 $ 650.00 $ 5,900.00 $ 3,800.00 $ 5,900.00 $ 5,900.00 $ 5,900.00 $ 19,350.00 Net Profit before tax and depreciation Beer and Wine August September October November December January Feburary March April May June July 50% 50% 50% 50% 65% 65% 65% 90% 80% 90% 90% 90%
150 x $25 $ 1,875.00 $ 1,875.00 $ 1,875.00 $ 1,875.00 $ 2,437.50 $ 2,437.50 $ 2,437.50 $ 3,375.00 $ 3,000.00 $ 3,375.00 $ 3,375.00 $ 3,375.00 6 days week $ 48,750.00 $ 48,750.00 $ 48,750.00 $ 48,750.00 $ 63,375.00 $ 63,375.00 $ 63,375.00 $ 87,750.00 $ 78,000.00 $ 87,750.00 $ 87,750.00 $ 87,750.00 $ 814,125.00 Annual Revenue 6 day week DC at .40 $ 19,500.00 $ 19,500.00 $ 19,500.00 $ 19,500.00 $ 25,350.00 $ 25,350.00 $ 25,350.00 $ 35,100.00 $ 31,200.00 $ 35,100.00 $ 35,100.00 $ 35,100.00 $ 325,650.00 Direct Cost Wait Staff 2 persons $ 15,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 13,000.00 $ 158,000.00 Labor Beer and Wine 10% gross $ 4,875.00 $ 4,875.00 $ 4,875.00 $ 4,875.00 $ 6,337.50 $ 6,337.50 $ 6,337.50 $ 8,775.00 $ 7,800.00 $ 8,775.00 $ 8,775.00 $ 8,775.00 $ 81,412.50 Beer and Wine at 10% Monthly Net $ 9,375.00 $ 11,375.00 $ 11,375.00 $ 11,375.00 $ 18,687.50 $ 18,687.50 $ 18,687.50 $ 30,875.00 $ 26,000.00 $ 30,875.00 $ 30,875.00 $ 30,875.00 $ 249,062.50 Net Profit before tax and depreciation August September October November December January Feburary March April May June July Marina Slips 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 4 slips at 50 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 18,000.00 Annual Revenue 1 slip at 65 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 11,700.00 Annual Revenue total Revenue $ 2,475.00 $ 2,475.00 $ 2,475.00 $ 2,475.00 $ 2,475.00 $ 2,475.00 $ 2,475.00 $ 2,475.00 $ 2,475.00 $ 2,475.00 $ 2,475.00 $ 2,475.00 $ 29,700.00 Sip Revenue Direct Cost $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 1,200.00 Direct Costs R and M marina slips 10% gross $ 247.50 $ 247.50 $ 247.50 $ 247.50 $ 247.50 $ 247.50 $ 247.50 $ 247.50 $ 247.50 $ 247.50 $ 247.50 $ 247.50 $ 2,970.00 Slips at 10% Net Income $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 25,530.00 Net Profit before tax and depreciation August September October November December January Feburary March April May June July Retail Rental 30% 30% 30% 80% 80% 80% 100% 100% 100% 100% 100% 100% Downstairs 1,200 sq ft $ 1,080.00 $ 1,080.00 $ 1,080.00 $ 2,880.00 $ 2,880.00 $ 2,880.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 33,480.00 annual Revenue Direct Costs $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 1,200.00 Direct Costs Percentage of retail sales 3‐5% ? ? ?? ? ? ????? ? tennant retail sales percentage tax ? Net Income $ 980.00 $ 980.00 $ 980.00 $ 2,780.00 $ 2,780.00 $ 2,780.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 32,280.00 Net Income August September October November December January Feburary March April May June July Public Restrooms240 sq ft $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 8,640.00 Maintaince $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 1,800.00 Annual Cost maintain public restroom Cost per month $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 10,440.00 provided FOC to city
SUMMARY Revenue NetHotel (471.20) $ $ 5,043.20 $ 13,314.80 $ 24,343.60 $ 38,129.60 $ 38,129.60 $ 24,343.60 $ 27,100.80 $ 32,615.20 $ 38,129.60 $ 38,129.60 $ 43,644.00 $ 509,350.00 $ 248,596.65 Net Profit before tax and depreciation less TOT tax
Food Service $ (2,500.00) $ (2,500.00) $ (2,500.00) $ (2,500.00) $ 650.00 $ 650.00 $ 650.00 $ 5,900.00 $ 3,800.00 $ 5,900.00 $ 5,900.00 $ 5,900.00 $ 501,000.00 $ 19,350.00 Net Profit before tax and depreciation Beer and Wine $ 9,375.00 $ 11,375.00 $ 11,375.00 $ 11,375.00 $ 18,687.50 $ 18,687.50 $ 18,687.50 $ 30,875.00 $ 26,000.00 $ 30,875.00 $ 30,875.00 $ 30,875.00 $ 814,125.00 $ 249,062.50 Net Profit before tax and depreciation Marina Slips $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 2,127.50 $ 29,700.00 $ 25,530.00 Net Profit before tax and depreciation Retail Rental (not retail sales) $ 980.00 $ 980.00 $ 980.00 $ 2,780.00 $ 2,780.00 $ 2,780.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 33,480.00 $ 32,280.00 Net Profit before tax and depreciation Annual Cost maintain Public Restro$ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (1,200.00) Cost to maintain public restroom Utility Costs (1,000.00) $ $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (12,000.00) Utility Costs Property Insurance (2,000.00) $ $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (24,000.00) Property Insurance Minium Annual Rental $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (60,000.00) Annual Minimum Rent estimate Bank Mortgage Payment $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (204,000.00) $ (15,588.70) $ (8,074.30) $ 197.30 $ 13,026.10 $ 37,274.60 $ 37,274.60 $ 24,208.60 $ 44,403.30 $ 42,942.70 $ 55,432.10 $ 55,432.10 $ 60,946.50 $ (109,432.50) Food, Beer/Wine,MarinaSlips, Percentage Rent Year 1 Start up $ 1,887,655.00 $ 164,186.65
Revenue Net
9%

Bayside Landing Suites
Pro Forma Business Plan
10/3/23

BAYSIDE LANDING AND SUITES
Revenue Projections
YEAR 2
Hotel Units August September October November December January Feburary March April May June July Occupancy Rate per month 100% 80% 80% 70% 70% 70% 70% 65% 80% 90% 90% 100% Percentage of Occupancy Revenue 67,100.00 $ $ 53,680.00 $ 53,680.00 $ 46,970.00 $ 46,970.00 $ 46,970.00 $ 46,970.00 $ 43,615.00 $ 53,680.00 $ 60,390.00 $ 60,390.00 $ 67,100.00 $ 647,515.00 ANNUAL ROOM REVENUEDays Occupancy 268.4 214.72 214.72 187.88 187.88 187.88 187.88 174.46 214.72 241.56 241.56 268.4 2590.06 ANNUAL TOTAL DAYS OCCUPANCY IT Management Software 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 18,000.00 $ Annual management software Direct Costs 6,441.60 $ $ 5,153.28 $ 5,153.28 $ 4,509.12 $ 4,509.12 $ 4,509.12 $ 4,509.12 $ 4,187.04 $ 5,153.28 $ 5,797.44 $ 5,797.44 $ 6,441.60 $ 62,161.44 ANNUAL COST Management $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 120,000.00 Annual Management Net Operating Income $ 49,158.40 $ 37,026.72 $ 37,026.72 $ 30,960.88 $ 30,960.88 $ 30,960.88 $ 30,960.88 $ 27,927.96 $ 37,026.72 $ 43,092.56 $ 43,092.56 $ 49,158.40 $ 447,353.56 Net Profit before tax and depreciation refer below detail TOT PER NIGHT PER RM $ 9,730 $ 7,784 $ 7,784 $ 6,811 $ 6,811 $ 6,811 $ 6,811 $ 6,324 $ 7,784 $ 8,757 $ 8,757 $ 9,730 $ 93,889.68 TOT BED TAX PAID CITY OF MB Light food service August September October November December January Feburary March April May June July 100 meals day 80% 80% 80% 70% 70% 70% 70% 65% 80% 90% 90% 100% % of Revenue of 100% Av $20 per meal $ 1,600.00 $ 1,600.00 $ 1,600.00 $ 1,400.00 $ 1,400.00 $ 1,400.00 $ 1,400.00 $ 1,300.00 $ 1,600.00 $ 1,800.00 $ 1,800.00 $ 2,000.00 Daily Revenue by Month Montly Rev $ 48,000.00 $ 48,000.00 $ 48,000.00 $ 42,000.00 $ 42,000.00 $ 42,000.00 $ 42,000.00 $ 39,000.00 $ 48,000.00 $ 54,000.00 $ 54,000.00 $ 60,000.00 $ 567,000.00 Annual Revenue 6 day week Monthly DC $ 19,200.00 $ 19,200.00 $ 19,200.00 $ 16,800.00 $ 16,800.00 $ 16,800.00 $ 16,800.00 $ 15,600.00 $ 19,200.00 $ 21,600.00 $ 21,600.00 $ 24,000.00 $ 226,800.00 Direct Cost Wait Staff 2 persons $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 171,600.00 Labor Fast Food, Delicatessen 5% $ 2,400.00 $ 2,400.00 $ 2,400.00 $ 2,100.00 $ 2,100.00 $ 2,100.00 $ 2,100.00 $ 1,950.00 $ 2,400.00 $ 2,700.00 $ 2,700.00 $ 3,000.00 $ 28,350.00 Percentage Gross 5% Net Operating Income $ 2,500.00 $ 2,500.00 $ 2,500.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ (650.00) $ 2,500.00 $ 4,600.00 $ 4,600.00 $ 6,700.00 $ 26,850.00 Net Profit before tax and depreciation Beer and Wine August September October November December January Feburary March April May June July 80% 80% 80% 70% 70% 70% 70% 65% 80% 90% 90% 100%
150 x $25 $ 3,000.00 $ 3,000.00 $ 3,000.00 $ 2,625.00 $ 2,625.00 $ 2,625.00 $ 2,625.00 $ 2,437.50 $ 3,000.00 $ 3,375.00 $ 3,375.00 $ 3,750.00 6 days week $ 78,000.00 $ 78,000.00 $ 78,000.00 $ 68,250.00 $ 68,250.00 $ 68,250.00 $ 68,250.00 $ 63,375.00 $ 78,000.00 $ 87,750.00 $ 87,750.00 $ 97,500.00 $ 921,375.00 Annual Revenue 6 day week DC at .40 $ 31,200.00 $ 31,200.00 $ 31,200.00 $ 27,300.00 $ 27,300.00 $ 27,300.00 $ 27,300.00 $ 25,350.00 $ 31,200.00 $ 35,100.00 $ 35,100.00 $ 39,000.00 $ 368,550.00 Direct Cost Wait Staff 2 persons $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 198,000.00 Labor Beer and Wine 10% gross $ 7,800.00 $ 7,800.00 $ 7,800.00 $ 6,825.00 $ 6,825.00 $ 6,825.00 $ 6,825.00 $ 6,337.50 $ 7,800.00 $ 8,775.00 $ 8,775.00 $ 9,750.00 $ 92,137.50 Beer and Wine at 10% Monthly Net $ 22,500.00 $ 22,500.00 $ 22,500.00 $ 17,625.00 $ 17,625.00 $ 17,625.00 $ 17,625.00 $ 15,187.50 $ 22,500.00 $ 27,375.00 $ 27,375.00 $ 32,250.00 $ 262,687.50 Net Profit before tax and depreciation August September October November December January Feburary March April May June July Marina Slips 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 4 slips at 50 $ 4,240.00 $ 4,240.00 $ 4,240.00 $ 4,240.00 $ 4,240.00 $ 4,240.00 $ 4,240.00 $ 4,240.00 $ 4,240.00 $ 4,240.00 $ 4,240.00 $ 4,240.00 $ 50,880.00 Annual Revenue 1 slip at 65 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 11,700.00 Annual Revenue total Revenue $ 5,215.00 $ 5,215.00 $ 5,215.00 $ 5,215.00 $ 5,215.00 $ 5,215.00 $ 5,215.00 $ 5,215.00 $ 5,215.00 $ 5,215.00 $ 5,215.00 $ 5,215.00 $ 62,580.00 Sip Revenue Direct Cost $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 1,200.00 Direct Costs R and M marina slips 10% gross $ 521.50 $ 521.50 $ 521.50 $ 521.50 $ 521.50 $ 521.50 $ 521.50 $ 521.50 $ 521.50 $ 521.50 $ 521.50 $ 521.50 $ 6,258.00 Slips at 10% Net Income $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 55,122.00 Net Profit before tax and depreciation August September October November December January Feburary March April May June July Retail Rental 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% Downstairs 1,200 sq ft $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 38,880.00 annual Revenue Direct Costs $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 2,400.00 Direct Costs Percentage of retail sales 3‐5% ? ? ?? ? ? ????? ? tennant retail sales percentage tax ? Net Income $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 36,480.00 Net Income August September October November December January Feburary March April May June July Public Restrooms240 sq ft $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 8,640.00 Maintaince $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 1,800.00 Annual Cost maintain public restroom Cost per month $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 10,440.00 provided FOC to city
SUMMARY Revenue NetHotel 49,158.40 $ $ 37,026.72 $ 37,026.72 $ 30,960.88 $ 30,960.88 $ 30,960.88 $ 30,960.88 $ 27,927.96 $ 37,026.72 $ 43,092.56 $ 43,092.56 $ 49,158.40 $ 647,515.00 $ 353,463.89 Net Profit before tax and depreciation less TOT tax
Food Service $ 2,500.00 $ 2,500.00 $ 2,500.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ (650.00) $ 2,500.00 $ 4,600.00 $ 4,600.00 $ 6,700.00 $ 567,000.00 $ 26,850.00 Net Profit before tax and depreciation Beer and Wine $ 22,500.00 $ 22,500.00 $ 22,500.00 $ 17,625.00 $ 17,625.00 $ 17,625.00 $ 17,625.00 $ 15,187.50 $ 22,500.00 $ 27,375.00 $ 27,375.00 $ 32,250.00 $ 921,375.00 $ 262,687.50 Net Profit before tax and depreciation Marina Slips $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 4,593.50 $ 62,580.00 $ 55,122.00 Net Profit before tax and depreciation Retail Rental (not retail sales) $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 38,880.00 $ 36,480.00 Net Profit before tax and depreciation Annual Cost maintain Public Restro$ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (1,200.00) Cost to maintain public restroom Utility Costs (1,000.00) $ $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (12,000.00) Utility Costs Property Insurance (2,000.00) $ $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (2,000.00) $ (24,000.00) Property Insurance Minium Annual Rental $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (60,000.00) Annual Minimum Rent estimate Bank Mortgage Payment $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (204,000.00) $ 56,691.90 $ 44,560.22 $ 44,560.22 $ 31,519.38 $ 31,519.38 $ 31,519.38 $ 31,519.38 $ 24,998.96 $ 44,560.22 $ 57,601.06 $ 57,601.06 $ 70,641.90 $ (109,432.50) Food, Beer/Wine,MarinaSlips, Percentage Rent increase in staff wages Year 2 $ 2,237,350 $ 323,971
increase in occupancy and room rates average to $ 275 per night Revenue Net increase in marina slip per ft rate to $16/ft per month 268 ft total. 14%

Bayside Landing Suites
Pro Forma Business Plan
10/3/23

BAYSIDE LANDING AND SUITES
Revenue Projections
YEAR 3
Hotel Units August September October November December January Feburary March April May June July Occupancy Rate per month 100% 80% 80% 70% 70% 70% 70% 65% 80% 90% 90% 100% Percentage of Occupancy Revenue 73,200.00 $ $ 58,560.00 $ 58,560.00 $ 51,240.00 $ 51,240.00 $ 51,240.00 $ 51,240.00 $ 47,580.00 $ 58,560.00 $ 65,880.00 $ 65,880.00 $ 73,200.00 $ 706,380.00 ANNUAL ROOM REVENUE Days Occupancy 292.8 234.24 234.24 204.96 204.96 204.96 204.96 190.32 234.24 263.52 263.52 292.8 2825.52 ANNUAL TOTAL DAYS OCCUPANCY IT Management Software 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 18,000.00 $ Annual management software Direct Costs 7,027.20 $ $ 5,621.76 $ 5,621.76 $ 4,919.04 $ 4,919.04 $ 4,919.04 $ 4,919.04 $ 4,567.68 $ 5,621.76 $ 6,324.48 $ 6,324.48 $ 7,027.20 $ 67,812.48 ANNUAL COST Management $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 120,000.00 Annual Management Net Operating Income $ 54,672.80 $ 41,438.24 $ 41,438.24 $ 34,820.96 $ 34,820.96 $ 34,820.96 $ 34,820.96 $ 31,512.32 $ 41,438.24 $ 48,055.52 $ 48,055.52 $ 54,672.80 $ 500,567.52 Net Profit before tax and depreciation refer below detail TOT PER NIGHT PER RM $ 10,614 $ 8,491 $ 8,491 $ 7,430 $ 7,430 $ 7,430 $ 7,430 $ 6,899 $ 8,491 $ 9,553 $ 9,553 $ 10,614 $ 102,425.10 TOT BED TAX PAID CITY OF MB Light food service August September October November December January Feburary March April May June July 100 meals day 80% 80% 80% 70% 70% 70% 70% 65% 80% 90% 90% 100% % of Revenue of 100% Av $20 per meal $ 1,600.00 $ 1,600.00 $ 1,600.00 $ 1,400.00 $ 1,400.00 $ 1,400.00 $ 1,400.00 $ 1,300.00 $ 1,600.00 $ 1,800.00 $ 1,800.00 $ 2,000.00 Daily Revenue by Month Montly Rev $ 48,000.00 $ 48,000.00 $ 48,000.00 $ 42,000.00 $ 42,000.00 $ 42,000.00 $ 42,000.00 $ 39,000.00 $ 48,000.00 $ 54,000.00 $ 54,000.00 $ 60,000.00 $ 567,000.00 Annual Revenue 6 day week Monthly DC $ 19,200.00 $ 19,200.00 $ 19,200.00 $ 16,800.00 $ 16,800.00 $ 16,800.00 $ 16,800.00 $ 15,600.00 $ 19,200.00 $ 21,600.00 $ 21,600.00 $ 24,000.00 $ 226,800.00 Direct Cost Wait Staff 2 persons $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 14,300.00 $ 171,600.00 Labor Fast Food, Delicatessen 5% $ 2,400.00 $ 2,400.00 $ 2,400.00 $ 2,100.00 $ 2,100.00 $ 2,100.00 $ 2,100.00 $ 1,950.00 $ 2,400.00 $ 2,700.00 $ 2,700.00 $ 3,000.00 $ 28,350.00 Percentage Gross 5% Net Operating Income $ 2,500.00 $ 2,500.00 $ 2,500.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ (650.00) $ 2,500.00 $ 4,600.00 $ 4,600.00 $ 6,700.00 $ 26,850.00 Net Profit before tax and depreciation Beer and Wine August September October November December January Feburary March April May June July 80% 80% 80% 70% 70% 70% 70% 65% 80% 90% 90% 100%
150 x $25 $ 3,000.00 $ 3,000.00 $ 3,000.00 $ 2,625.00 $ 2,625.00 $ 2,625.00 $ 2,625.00 $ 2,437.50 $ 3,000.00 $ 3,375.00 $ 3,375.00 $ 3,750.00 6 days week $ 78,000.00 $ 78,000.00 $ 78,000.00 $ 68,250.00 $ 68,250.00 $ 68,250.00 $ 68,250.00 $ 63,375.00 $ 78,000.00 $ 87,750.00 $ 87,750.00 $ 97,500.00 $ 921,375.00 Annual Revenue 6 day week DC at .40 $ 31,200.00 $ 31,200.00 $ 31,200.00 $ 27,300.00 $ 27,300.00 $ 27,300.00 $ 27,300.00 $ 25,350.00 $ 31,200.00 $ 35,100.00 $ 35,100.00 $ 39,000.00 $ 368,550.00 Direct Cost Wait Staff 2 persons $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 16,500.00 $ 198,000.00 Labor Beer and Wine 10% gross $ 7,800.00 $ 7,800.00 $ 7,800.00 $ 6,825.00 $ 6,825.00 $ 6,825.00 $ 6,825.00 $ 6,337.50 $ 7,800.00 $ 8,775.00 $ 8,775.00 $ 9,750.00 $ 92,137.50 Beer and Wine at 10% Monthly Net $ 22,500.00 $ 22,500.00 $ 22,500.00 $ 17,625.00 $ 17,625.00 $ 17,625.00 $ 17,625.00 $ 15,187.50 $ 22,500.00 $ 27,375.00 $ 27,375.00 $ 32,250.00 $ 262,687.50 Net Profit before tax and depreciation August September October November December January Feburary March April May June July Marina Slips 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 4 slips at 50 $ 4,505.00 $ 4,505.00 $ 4,505.00 $ 4,505.00 $ 4,505.00 $ 4,505.00 $ 4,505.00 $ 4,505.00 $ 4,505.00 $ 4,505.00 $ 4,505.00 $ 4,505.00 $ 54,060.00 Annual Revenue 1 slip at 65 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 975.00 $ 11,700.00 Annual Revenue total Revenue $ 5,480.00 $ 5,480.00 $ 5,480.00 $ 5,480.00 $ 5,480.00 $ 5,480.00 $ 5,480.00 $ 5,480.00 $ 5,480.00 $ 5,480.00 $ 5,480.00 $ 5,480.00 $ 65,760.00 Sip Revenue Direct Cost $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 1,200.00 Direct Costs R and M marina slips 10% gross $ 548.00 $ 548.00 $ 548.00 $ 548.00 $ 548.00 $ 548.00 $ 548.00 $ 548.00 $ 548.00 $ 548.00 $ 548.00 $ 548.00 $ 6,576.00 Slips at 10% Net Income $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 57,984.00 Net Profit before tax and depreciation August September October November December January Feburary March April May June July Retail Rental 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% Downstairs 1,200 sq ft $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 3,240.00 $ 38,880.00 annual Revenue Direct Costs $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 2,400.00 Direct Costs Percentage of retail sales 3‐5% ? ? ?? ? ? ????? ? tennant retail sales percentage tax ? Net Income $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 36,480.00 Net Income August September October November December January Feburary March April May June July Public Restrooms240 sq ft $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 8,640.00 Maintaince $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 1,800.00 Annual Cost maintain public restroom Cost per month $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 870.00 $ 10,440.00 provided FOC to city
SUMMARY Revenue Net
Hotel 54,672.80 $ $ 41,438.24 $ 41,438.24 $ 34,820.96 $ 34,820.96 $ 34,820.96 $ 34,820.96 $ 31,512.32 $ 41,438.24 $ 48,055.52 $ 48,055.52 $ 54,672.80 $ 706,380.00 $ 398,142.42 Net Profit before tax and depreciation less TOT tax
Food Service $ 2,500.00 $ 2,500.00 $ 2,500.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ (650.00) $ 2,500.00 $ 4,600.00 $ 4,600.00 $ 6,700.00 $ 567,000.00 $ 26,850.00 Net Profit before tax and depreciation Beer and Wine $ 22,500.00 $ 22,500.00 $ 22,500.00 $ 17,625.00 $ 17,625.00 $ 17,625.00 $ 17,625.00 $ 15,187.50 $ 22,500.00 $ 27,375.00 $ 27,375.00 $ 32,250.00 $ 921,375.00 $ 262,687.50 Net Profit before tax and depreciation Marina Slips $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 4,832.00 $ 65,760.00 $ 57,984.00 Net Profit before tax and depreciation Retail Rental (not retail sales) $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 3,040.00 $ 38,880.00 $ 36,480.00 Net Profit before tax and depreciation Annual Cost maintain Public Restro$ (150.00) $ (150.00) $ (150.00) $ (150.00) $ (150.00) $ (150.00) $ (150.00) $ (150.00) $ (150.00) $ (150.00) $ (150.00) $ (150.00) $ (1,200.00) Cost to maintain public restroom Utility Costs (1,300.00) $ $ (1,300.00) $ (1,300.00) $ (1,300.00) $ (1,300.00) $ (1,300.00) $ (1,300.00) $ (1,300.00) $ (1,300.00) $ (1,300.00) $ (1,300.00) $ (1,300.00) $ (15,600.00) Utility Costs Property Insurance (2,100.00) $ $ (2,100.00) $ (2,100.00) $ (2,100.00) $ (2,100.00) $ (2,100.00) $ (2,100.00) $ (2,100.00) $ (2,100.00) $ (2,100.00) $ (2,100.00) $ (2,100.00) $ (25,200.00) Property Insurance Minium Annual Rental $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (5,000.00) $ (60,000.00) Annual Minimum Rent estimate Bank Mortgage Payment $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (17,000) $ (204,000.00) $ 61,994.80 $ 48,760.24 $ 48,760.24 $ 35,167.96 $ 35,167.96 $ 35,167.96 $ 35,167.96 $ 28,371.82 $ 48,760.24 $ 62,352.52 $ 62,352.52 $ 75,944.80 $ (109,432.50) Food, Beer/Wine,MarinaSlips, Percentage Rent increase in staff wages Year 3 $ 2,299,395 $ 366,711
increase in room rates average to $ 300 per night Revenue Net increase in marina slip per ft rate to $17/ft per month 268 ft total. 16% Revenue and Cost increase annually 5% Utility cost increase, toilet maintainence and property insurance

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
Project description:

Current Setting:

The proposed combined project sites in our proposal are:
 495 Embarcadero Lease sites 52/52 W The property is located on the western side of Embarcadero Road and adjacent to the city park known as Mariner Park and the Estero Inn north of the park.
o Land 3,185 sq ft,
o Water 4,500 sq. ft,
o Total 7,685 sq ft.
 451 Embarcadero Lease sites 50-51/50-51W The vacation rental site has single story buildings with a wood wharf and a single floating dock. o Land 2,020 sq ft,
o Water 3,611 sq. ft.
o Total 5,631 sq. ft.
 431 Embarcadero (currently vacant site)
o Land 1,650 sq. ft.
o Water 1,300 sq. ft.
o Total 2,950 sq ft
Currently Lease sites of 50 and 51 are an old single story visitor serving motel with these other uses in their lease: “Visitor serving motel. Design, sales, repair of marine electronic and instrumentation equipment. Rental of dock space, use of work dock, operation of mooring inspection & installation service. Retail sales, marine construction materials, sails, marine woodworking & repair, diving service & marine and general engineering services. Sail loft.

RFP Response Date October 12, 2023

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
These structures are most likely 1940-50 vintage and have no value in restoring. They have no foundations or pile support pier structure worth retaining. We are proposing demolition of the entire two lease sites for our development. 495 Embarcadero, Lease site 52/52W currently is the office and workshop of Associated Pacific Constructors, Inc. and both the building and pier structure are in very good structural condition. The pier was completely rebuilt two years ago and upgraded to support the 60-ton hydraulic crane of APC at a cost of $300,000. It is the intention of this development proposal to incorporate the existing building and pier into the new plan.

By way of background information, the capital improvement money spent for this work has been a “paper” credit for the 495 Embarcadero master lease and should receive commiserate lease years at the time of a new lease.

RFP Response Date October 12, 2023

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
Project Summary:

Summary: The Associated Pacific Constructors, Inc. (APC) building has been used for many years for marine construction business with offices on the second floor and equipment with material storage on the first floor. The wood wharf has been used for vessel tie-up and supports a large crane to load materials on the barges and other marine equipment necessary to carry out the business operations.

Associated Pacific is in the process of downsizing their construction operations so the lease site now lends itself to a redevelopment of not only this site but proposing a larger and more cohesive project that will encompass the current vacation rentals and vacant lease parcels to the south.

First, the APC building will be remodeled in the following ways:

1. Remove the existing stairs that currently encroaches into the sidewalk area which will allow for an 8-foot-wide sidewalk.

2. Relocate the front entry for the second floor to the northeast (inside) corner of the building. This new upstairs entry will be open and readily seen by pedestrians walking south along the Embarcadero and will create an inviting atmosphere.

3. The first floor will include a public restroom located on the north side, two retail units on the east and west sides, and the food preparation and delicatessen.

The second floor will become the beer /wine and light food service equipped with a dumbwaiter to serve the food from the first floor. There will be a takeout window located on the south side which the public will have access to from the new observation/view deck.

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023

4. A new window will be added to the first-floor west side of the building to provide a pedestrian and customer experience while walking along the new HarborWalk.

5. The existing building has a wooden wharf on the west side however it is not open to the public due to the current construction operations.

The project as proposed will open this area as the HarborWalk and provide a new connection to Mariner Park.

6. The current configuration to access the APC building from Mariner Park is along the north side of the APC building and is only 4 feet wide. The project as proposed will construct a new 10-foot wide HarborWalk from the end of the park view deck to the APC building and new HarborWalk. This new connection will vastly improve the pedestrian harbor side walkway in this area.

7. The building will retain the existing wood siding exterior and marine type appearance.

Second, the existing vacation rental buildings will be demolished and a new 2 story building with 8 vacation rentals will be constructed.

The following are highlights for the new building:

1. There are 5 units located on the first floor and 3 units located on the second floor.

2. The first-floor units will have an east to west orientation while the second-floor units are angled and will have more of a north/south orientation.

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023

3. The angled or offset units from the first floor to the second floor create better articulation for the site by eliminating a long, large flat expanse of the building.

4. Each of the units will have a deck on the west side with views of the harbor and/or southward towards Montana de Oro.

5. A connecting second floor walkway along the east side of the building to the APC building will allow for installation of one elevator unit to service the rental units, the public observation deck and new restaurant. This combination of use will provide a better layout for both the APC building and rental units as there will not be the need to take additional space for a second elevator and therefore lose potential retail or other business space.

6. In addition, this second-floor walkway will be connected to a 20 foot plus wide public observation/view deck. This view deck will be accessed from four points. 1) Set of stairs on the north side of the rental building, 2) The elevator, and 3) Two from the second floor of the APC building.

The view deck will have a public seating area to allow visitors a chance to relax and enjoy the views. While there will be a “takeout” window installed to the delicatessen style light food and snacks, there will be clear signage that the area is open to the public with no purchase necessary and no wait service allowed. This is consistent with the other waterfront projects that have been approved over the years. This new public deck will only cover the second floor and will be open underneath to allow for a pedestrian

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
view corridor and for vehicle loading/unloading space off the Embarcadero.

7. To be consistent with the existing APC building and current rentals, each of the proposed room doors facing the Embarcadero will be painted bright and colorful as they are now and will also have the wood siding exterior.

Third, the existing waterside of both the APC and rental unit buildings are being used for large and small vessel tie-up with a wharf and floating docks.

The new proposed water area will include the following:

1. A new 162’ foot long, 8-foot-wide floating dock parallel to the existing wharf. This includes a long tie-up for larger boats that could include fishing or work boats.

2. 3 new 4’ x 40’ finger slips. Will allow mono hull and multi hull yachts, recreational or commercial boats to tie up.

3. One finger dock space is proposed with a low floating dock for a kayak rental business. There will be a low-profile building on the dock for the kayak office and storage space. This set up is similar in nature to the one constructed at the “Boatyard” down the street.

Fourth, the existing lease site, #49 to the south is a vacant parcel. The following are proposed improvements to this area:

1. This parcel on the land side is relatively small at 1,650 sq. ft. and has made it difficult for applicants to propose a development in that space. In addition, there is a very large eelgrass bed offshore which

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
makes it nearly impossible to develop or construct any floating docks in this location. Overall, because of the site constraints, the city has not received any formal proposal for development over the years.

With the APC proposal to take over this lease, it makes much more sense to utilize this area for public benefit and connection to the other proposed development as provided above.

An angled HarborWalk connection can be made to the
Embarcadero for pedestrians to continue to Tidelands Park. This decking will conform to the current light penetration standards to enhance the promotion of eelgrass, as well as the waterfront standards, specifically height and coverage. This area of the Embarcadero has a progressively smaller land side lease area to develop which significantly limits the ability of applicants to propose a feasible project. The challenges and costs associated with most of the development being supported on a pile structure as opposed to a slab on grade greatly increase the difficulty and costs.

Paul Gillen and Associated Pacific are uniquely qualified and experienced to accomplish this challenge in a cost effective and timely manner. This applicant has incorporated many aspects to the project to meet the objectives of the waterfront master plan and community needs. The applicant believes that this project overall will be a big benefit to the city and a welcome redevelopment.

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
Proposed Lease Terms
Proposed Lease Terms of Lease sites 52/50/51 and 49 under one a new Lease Agreement
Considerations
1) Currently the south end of the Embarcadero has very little retail traffic appeal. Any development of retail businesses will be slow in building traffic and will not attract the level of revenue or draw for several years.
2) Cost of development of any project over these sites will take special engineering methodology and will be at least double the cost of a “conventional slab on grade” foundation.
3) Given the small land footprint for construction, virtually all construction materials must be staged offsite and moved onto site on a just in time basis. Another added cost for construction. 4) All these factors make this development site costly and difficult to construct. This also leads to Paul Gillen and Associated Pacific Constructors, Inc. being the most qualified and capable group to execute this project in a timely and cost-effective manner.

These are the general Terms of Lease being proposed by the proposer.  Lease Term 50 years – approximately $2.5-$3 million investment  Minimum Annual Base rent will not commence until final occupancy permit is issued. It will be based on final development costs.  Following gross % reductions to allow business to build profitably. o Hotel TOT - no change proposed combined 14.5%
o food and beverage – 3% for first 5 years
 Restaurant 3%
 Snack Bar , Delicatessen 2.5%
 Fast Food, Convenience Food 2.5%
 Bar/Lounge, Beer & Wine Sales 5%
o Retail Sales and Service – Tennant 3%
o Fish and Seafood
 Retail Sales 3%

BAYSIDE LANDING AND SUITES
495 Embarcadero
morro bay, ca. 93442
RFP Response Date October 12, 2023
o Wholesale Sales 0%
o Moorings, Ties and Slips 10%
 Two liveaboard
o Boat Repair and Sales 1%
o Motel / Hotel Per TOT
o All other uses 2.5%
 No Dedicated Parking requirement

ID Task Name Duration Start Finish
1 Submittal of RFP 0 days Thu 10/12/23 Thu 10/12/232 Award and Consent of Landowner 0 days Fri 12/29/23 Fri 12/29/233 Submit Project for CUP 0 days Fri 12/29/23 Fri 12/29/234 Planning Commission Approval 111 days Fri 12/29/23 Fri 5/31/245 City Council Approval 30 days Mon 6/3/24 Fri 7/12/246 Start of Agency Submittal for Approval 0 days Fri 7/12/24 Fri 7/12/247 Obtain Agency Approval 200 days Mon 7/15/24 Fri 4/18/258 City Permit is issued 47 days Mon 4/21/25 Tue 6/24/259 Demo/Start Construction 33 days Wed 6/25/25 Fri 8/8/25 10 Foundation/Primary Utilities 65 days Mon 8/11/25 Fri 11/7/2511 Framing and Roof Structure 45 days Mon 11/10/25 Fri 1/9/2612 Marina and Gangways 20 days Mon 1/19/26 Fri 2/13/2613 Rough Utilities 30 days Tue 1/20/26 Mon 3/2/2614 Interior build out 45 days Tue 2/17/26 Mon 4/20/2615 Final Interior Exterior Finishes 50 days Tue 4/7/26 Mon 6/15/2616 Finish Electrical Plumbing 45 days Tue 6/2/26 Mon 8/3/2617 Final Inspections 6 days Tue 8/4/26 Tue 8/11/2618 Furnishing and Prep 14 days Wed 8/12/26 Mon 8/31/2619 Grand Opening Official Launch 0 days Mon 8/31/26 Mon 8/31/26 Preliminary Development Schedule
Bayside Landing & Suites
Lease Sites 49, 50/51 and 52
Land and Water
Paul E. Gilllen
10/12/23

Prepared By: JB Dept Review: GK
City Manager Review: YK City Attorney Review: LNL
Staff Report
TO: Honorable Mayor and City Council DATE: December 14, 2023 FROM: Greg Kwolek, Public Works Director
Janeen Burlingame, Management Analyst
SUBJECT: Adoption of Resolution No. 03-24 Approving the Terms and Conditions of the Second Amended and Restated Joint Powers Agreement with the San Luis Obispo County Integrated Waste Management Authority (IWMA)

RECOMMENDED ACTION
Adopt Resolution No. 03-24 to authorize the Mayor to sign the second amended and restated Joint Powers Agreement on behalf of the City of Morro Bay subject to any final, non-substantive revisions as to form being approved by the City Manager and City Attorney’s Office.

FISCAL IMPACT
There is no direct financial impact to the City or the City’s solid waste customers from the recommended action. The IWMA is funded with a combination of rates, fees and other mechanisms including tipping fees at the county’s various landfills and fees paid for by each customer as part of the solid waste bill. With the County of San Luis Obispo (County) rejoining the IWMA, IWMA staff will conduct a new fee study to determine if the current fee will remain the same or if it needs to be reduced based on the larger customer base supporting the IWMA.

DISCUSSION
The IWMA was formed in 1994 for the purpose of facilitating the development of programs, services, and projects to meet the solid waste diversion requirements from Assembly Bill 939, the California Integrated Waste Management Act. The regional approach was determined to be the most cost-effective way to meet State’s waste reduction goals. Over the years the IWMA has assisted participating agencies, including the City of Morro Bay, in meeting subsequent solid waste legislative requirements, the most recent being the State’s organics law Senate Bill 1383, by developing programs and services and managing the mandated reporting to the State. The IWMA Board of Directors was comprised of 13 seats as follows:
 one seat for each city within the County (7 total)
 one seat for a special district in the County (1 total)  one seat for each County Supervisor (5 total)
On November 15, 2021, the County Board of Supervisors voted to withdraw from the IWMA, which eliminated five seats from the IWMA Board of Directors.

The County Board of Supervisors has now asked to rejoin the IWMA. On June 14, 2023, the IWMA Board appointed an Ad Hoc Committee to engage work with IWMA staff and members of the County Board of Supervisors to discuss the conditions and process of rejoining the IWMA and discuss representation on the IWMA Board. Through negotiations, the 2023 Joinder Agreement was prepared and delivered to County staff as a pathway for the Unincorporated County to rejoin the IWMA with a single seat on the board, and a single vote. The 2023 Joinder Agreement was adopted and signed by the County Board of Supervisors. The IWMA Board directed its staff to circulate the Joinder Agreement to the member jurisdictions of the IWMA for adoption.

AGENDA NO: 7.f
MEETING DATE: January 9, 2024

Prepared By: JB Dept Review: GK
City Manager Review: YK City Attorney Review: LNL
The 2023 Joinder Agreement fundamentally addresses two issues:

1. It allows the County to rejoin the JPA with one seat and one vote on the IWMA Board.

2. It allows the IWMA Board to move its election of officers to the beginning of the calendar year.

The JPA Agreement, as last amended and adopted by City Resolution No. 62-22, authorized amendments to the JPA Agreement on vote of a majority of the Members, and the proposed resolution (attached) is intended to express the approval by the City. Other member agencies are being asked to adopt a similar resolution approving the County’s membership.

CONCLUSION
Staff recommends the City Council adopt Resolution No. 03-24 and authorize the Mayor to sign the Second Amended and Restated Joint Powers Agreement on behalf of the City of Morro Bay subject to any final, non-substantiative revisions as to form being approved by the City Manager and City Attorneys’ Office.

ATTACHMENT

1. Resolution No. 03-24

RESOLUTION NO. 03-24

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA
ADOPTING 2023 COUNTY JOINDER AMENDMENT TO THE

SECOND AMENDED AND RESTATED JOINT POWERS AGREEMENT

OF THE INTEGRATED WASTE MANAGEMENT AUTHORITY

T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, on May 10, 1994, an agreement was executed by and between the incorporated cities of San Luis Obispo County (“Cities”) and the County of San Luis Obispo, forming a joint powers authority pursuant to the provisions of the Joint Exercise of Powers Act (Government Code sections 6500 et seq.), for the purpose of facilitating the development of waste diversion programs and projects that provide economies of scale without interfering with individual agencies’ exercise of power within their own jurisdiction (hereinafter referred to as the “JPA Agreement”); and
WHEREAS, pursuant to the JPA Agreement, the power to perform the responsibilities of the joint powers authority was vested in the San Luis Obispo County Integrated Waste Management Authority Board of Directors (“IWMA Board”); and WHEREAS, in or around 2001, a Memorandum of Agreement (“MOA”) was executed by and between the Cities, the County of San Luis Obispo, and certain special districts within San Luis Obispo County that possessed solid waste authority (“Authorized Districts”), amending the JPA Agreement to include the Authorized Districts for representation on the IWMA Board, which MOA was replaced on execution of the Second Amended and Restated JPA Agreement; and WHEREAS, the IWMA Board of Directors directed IWMA staff that on the County of San Luis Obispo’s approval to rejoin the IWMA, to circulate the 2023 County Joinder Amendment to the Second Amended and Restated JPA (“Joinder Amendment”) to the Participating Agencies for approval (a true and correct copy of the 2023 County Joinder Amendment to JPA is attached hereto as Exhibit A), including among the Authorized Districts with representation on the Board through their designated representative; and
WHEREAS, the JPA Agreement, as last amended, authorized amendments to the JPA Agreement on vote of a majority of the Members, and this resolution is intended to express the approval of Members and acknowledged agreement of all other Participating Agencies; and WHEREAS, the County wishes to join the Cities and the Authorized Districts (together “Participating Agencies”) in confirming and conferring upon the IWMA as separate legal entity the powers necessary to enable them to achieve their waste diversion goals and to comply with the Integrated Waste Management Act, Assembly Bill 341, Assembly Bill 1826, Senate Bill 1383, and all current and future state-mandated laws, rules and regulations to the extent allowed by law and as provided in the JPA Agreement; and
WHEREAS, the City Council of the City of Morro Bay desires to acknowledge, accept, and agree to be bound by the terms and conditions of the Joinder Amendment to the Second Amended and Restated JPA; and

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MORRO BAY, CALIFORNIA, that the City Council acknowledges, accepts, and agrees to be bound by the terms and conditions of the Joinder Amendment to the Second Amended and Restated JPA upon approval as to form by the City Manager and City Attorneys’ Office of any non-substantiative revisions.

PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on the 9
th day of January 2024 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:
_______________________________
CARLA WIXOM, Mayor
ATTEST:
_______________________________
DANA SWANSON, City Clerk

3 EXHIBIT A
2023 COUNTY JOINDER AMENDMENT TO THE

SECOND AMENDED AND RESTATED JOINT POWERS AGREEMENT

OF THE INTEGRATED WASTE MANAGEMENT AUTHORITY

4 2023 COUNTY JOINDER AMENDMENT

TO SECOND AMENDED AND RESTATED JOINT POWERS AGREEMENT

OF THE INTEGRATED WASTE MANAGEMENT AUTHORITY
This County Joinder Amendment (“County Joinder”), dated _______________, 2023, to the SECOND AMENDED AND RESTATED JOINT POWERS AGREEMENT (“2022 JPA Agreement”) is by and between the incorporated cities of Arroyo Grande, Atascadero, El Paso de Robles, Grover Beach, Morro Bay, Pismo Beach, and San Luis Obispo, all being municipal corporations of the State of California and located within the boundaries of the County of San Luis Obispo, California (collectively, the “Cities”), and the County of San Luis Obispo, by its joinder herein.

A. On or about May 10, 1994, an agreement was executed by and between the Cities and the County of San Luis Obispo forming a joint powers authority pursuant to the provisions of the Joint Exercise of Powers Act (the “Original JPA Agreement”), through which such member agencies created and established a public entity identified as the San Luis Obispo County Integrated Waste Management Authority (“IWMA”).

B. On or around 2001, the Cities, County, and certain special districts within the County (“Authorized Districts”) executed a Memorandum of Agreement (“MOA”) amending the Original JPA Agreement to include the Authorized Districts for representation on the IWMA Board.

C. On or about November 15, 2021, the County withdrew from the IWMA, after which the remaining Cities and Authorized Districts elected to reestablish and continue the IWMA, on the terms set forth in the Second Amended and Restated Joint Powers Agreement of the Integrated Waste Management Authority, which was adopted by the participating agencies in 2022 (“2022 JPA Agreement”).

D. On or about October 31, 2023, the County officially elected to rejoin the IWMA, including on the terms set forth the 2022 JPA Agreement, as amended hereby.

Based on the foregoing, the Cities, Authorized Districts, including the County through its joinder, hereby agree to the following amendments to the 2022 JPA Agreement reflecting the County’s joinder.

1. Title Amendment and List of Participating Agencies Attachment. The Title of the 2022 JPA shall be amended to read “Second Amended and Restated Joint Powers Agreement to Establish an Integrated Waste Management Authority.” The List of Participating Agencies attached to the 2022 JPA Agreement is replaced with the list attached to this Joinder Amendment.

2. Definitions. Section 1, entitled, “Definitions” shall be amended to include the following new definitions or amended definitions.

A. County shall be added as a definition. “County” means any unincorporated areas of the County of San Luis Obispo.

B. The following referenced definitions replace those of the same number in the 2022 JPA Agreement in their entirety.
“1.17 “Members” means the Cities and the County who are members of this regional agency, formed pursuant to Public Resources Code section 40970 et seq, and the one (1) Authorized District Representative pursuant to Public Resources Code section 40977.”

5 “1.18 “Participating Agency” or “Participating Agencies” means and shall include the Cities, the County and the Authorized Districts who are signatories to this Agreement, including by way of joinder, delegating powers to the Authority pursuant to this Agreement, and participating in the governance of the IWMA.”
C. Notwithstanding the foregoing, the definition of “MRF”, was inadvertently included within the definition of “Members”, in the 2022 JPA Agreement, and such definition shall remain the definition of “MRF” and is not deleted.

3. Section 8, entitled “Boundaries” is amended and restated in its entirety to read:
“Section 8. Boundaries. The boundaries of the Authority shall be the boundaries of the collective Participating Agencies. If a Participating Agency withdraws from the Authority, the boundaries shall be modified to exclude the area of the withdrawing agency. If a qualified agency joins the Authority, the boundaries shall be modified to include the area of the joining Participating Agency. Section 8 shall not prevent the Authority’s use and/or operation of facilities outside of its boundaries within the County of San Luis Obispo.”

4. Section 9, entitled “Organization” shall be amended as follows:

A. A new paragraph (g) is added to Section 9.2 Participating Agencies to read:
“(g) County. The County shall be entitled to appoint one representative to the Authority which representative shall consist of one (1) member from the Board of Supervisors. The County may elect to have an alternate member from the Board of Supervisors in addition to any official member but said appointed alternate shall be able to vote only in the absence of the official representative.”
B. Section 9.4(b) entitled “Officers” is replaced with the following:
“(b) Both the President and Vice President of the Board shall be elected each year at a meeting set for such purpose.”

5. County Joinder. The County hereby joins the IWMA pursuant to the terms and conditions in the 2022 JPA Agreement as amended hereby, and the undersigned hereby consent.

6. Omnibus Change. Wherever references to “Cities” is used or “Cities and Authorized Districts”, are used in the 2022 JPA Agreement, including in its recitals, such references shall expressly be read to include the County unless context expressly dictates otherwise.

7. Ratification. The 2022 JPA Agreement is hereby ratified and confirmed and shall continue in full force and effect in accordance with its terms and provisions, as amended hereby.

8. Effective Date. This Joinder Amendment shall take effect when adopted by each of the Cities, the County, with the Authorized Districts consenting to the joinder of the County, as evidenced by their execution pursuant to resolutions of such governing bodies authorizing such execution and shall remain in full force and effect until dissolved pursuant to the provisions herein.

This Joinder Amendment may be executed in counterparts which together shall constitute a single agreement. Electronically executed signatures may be accepted in lieu of originals if a Member agency has authorized electronic signatures through policy or otherwise.

6 LIST OF PARTICIPATING AGENCIES
CITIES
Arroyo Grande
Atascadero
El Paso de Robles
Grover Beach
Morro Bay
Pismo Beach
San Luis Obispo
COUNTY
The County of San Luis Obispo

AUTHORIZED DISTRICTS
Avila Beach CSD
California Valley CSD
Cambria CSD
Cayucos Sanitary District
Ground Squirrel Hollow CSD
Heritage Ranch CSD
Los Osos CSD
Nipomo CSD
Oceano CSD
San Miguel CSD
San Simeon CSD
Templeton CSD
[Participating Agency Signature Pages Follow]

7 CITY OF MORRO BAY
By: _______________________________ Date: ____________________ Carla Wixom, Mayor
ATTEST
__________________________________ Resolution No. ____________ Dana Swanson, City Clerk

APPROVED AS TO FORM AND LEGAL EFFECT
__________________________________
Chris Neumeyer, City Attorney

Prepared By: ___TS Dept Review: ___TS
City Manager Review: __YK______ City Attorney Review: __PJM____ Staff Report
TO: Honorable Mayor and City Council DATE: December 27, 2023 FROM: Ted Schiafone, Harbor Director
SUBJECT: Approval of Amendment #1 to the Commercial Building Lease Agreement with Three Stacks and a Rock Brewing Company, LLC., for Lease Site 69-70/69W70W located at 595 Embarcadero Road

RECOMMENDED ACTION
Adopt Resolution No. 04-24 approving Amendment #1 to the Commercial Building Lease Agreement between the City of Morro Bay and Three Stacks and a Rock Brewing Co. (“Three Stacks”) for Lease Site 69-70/69W-70W located at 595 Embarcadero Road (the “Lease”), to add an equitable percentage rent rate beginning May 1, 2023 for the remainder of the Lease term.

FISCAL IMPACT
Total rent is estimated to increase by a minimum amount of $25,000 per year.

BACKGROUND
The City and Three Stacks entered into the Lease. effective May 1, 2022, for a 10-year lease term with a base rent of $23,000, no percentage rent for the first 12 months and the option to convert to a ground lease after 5 years upon mutual agreement. Per Section 3.3 of the Lease, the City and Three Stacks were required to negotiate an equitable percentage rent rate 60 days prior to May 1, 2023.

During negotiations, the Harbor Department and Three Stacks have not been able to reach a mutual agreement on percentage rent. Accordingly, pursuant to Section 3.3 of the Lease, the percentage rent rate for the remainder of the Lease term will be the same as applicable in the City’s Harbor Department Lease Management Policy.

This Amendment #1 effectuates such equitable percentage rent rate for the remainder of the Lease Term.

DISCUSSION
The Harbor Department and Three Stacks have not been able to reach a mutual agreement on percentage rent. The Lease stipulates, “If an agreement cannot be reached, then that Percentage Rent shall be the same as applicable in the City’s Harbor Department Lease Management Policy.” AGENDA NO: 7.g
MEETING DATE: January 9, 2024

This Amendment #1 amends Section 3.4.2, “Performance Standards,” of the Lease to effectuate the percentage rent rate set forth in the City’s Harbor Department Lease Management Policy, beginning May 1, 2023, until the expiration of the Lease term.

Pursuant to the Amendment, Tenant will be responsible for percentage rent from Tenant’s gross sales at the following rates in addition to the annual rent:
 Restaurant Sales 5%
 Bar/Lounge Beer & Wine Sales 10%
 Merchandise 5%

CONCLUSION
Staff recommends Council approve the Lease Amendment to add percentage rent consistent with the City’s Harbor Department Lease Management Policy beginning May 1, 2023 through the remainder of the Lease term.

ATTACHMENTS

1. Lease Amendment #1

2. Resolution No. 04-24

AMENDMENT #1 TO THE BUILDING LEASE AGREEMENT
FOR LEASE SITE 69-70/69W-70W,
LOCATED AT 595 EMBARCADERO
This Amendment ("Amendment #1") is made and entered into as of this _day of , 2024, by and among the City of Morro Bay, a municipal corporation of the State of California, whereinafter called "Landlord," and Three Stacks and a Rock Brewing Company, LLC, a California limited liability company, hereinafter called "Tenant." (Collectively, Landlord and Tenant are sometimes referred to herein as the "Parties.")
WHEREAS, this Amendment #1 is to that certain Building Lease (the “Lease”), which was approved by the City Council on April 12, 2022, and effective May 1, 2022; and WHEREAS effective May 1, 2022, Landlord and Tenant entered into that certain Building Lease (the “Lease”);
WHEREAS, the Landlord and Tenant, per Section 3.3 Percentage Rent of the lease have negotiated an equitable percent rent rate for the remainder of the lease term.

NOW THEREFORE, Parties agree, as follows:

1. After the second paragraph of Section 3.4.2 under Performance Standards of the Lease will include the following paragraph:

Starting as of May 1, 2023, Tenant must furnish Landlord with a statement, to be certified by Tenant as current, true and accurate, which must set forth the Gross Sales of each department, sublessee, licensee and concession operating in, on or from the Premises for the previous 12 calendar months, ending June 30, just concluded, and the authorized deductions, if any, therefrom; and with it Tenant must pay to Landlord the amount of the Percentage Rent, which is due to Landlord as shown thereby. Tenant will be responsible for percentage rent from Tenant’s gross sales at the following rates in addition to the annual rent.

Restaurant Sales 5%
Bar/Lounge Beer & Wine Sales 10%
Merchandize 5%

2. After the third paragraph of Section 3.4.2 under Performance Standards of the Lease will include the following paragraph:

Tenant, must keep or cause to be kept full, complete, and accurate records, and books of account in accordance with accepted accounting practices showing the total amount of Gross Sales, as defined herein, made each calendar month in, on or from the Premises. Tenant must keep said records and books of account within San Luis Obispo County and will notify Landlord in advance of their location at all times. Furthermore, Tenant must, at the time of sale and in the presence of the customer, cause the full selling price of each piece of merchandise, each rental received and each service rendered in, on or from the Premises to be recorded in a cash register or cash registers that have cumulative totals and are sealed in accordance with standard commercial practices. Said records, books of account and cash register tapes, including any sales tax reports

or income tax returns Tenant may be required to furnish any government or governmental agency, and income and bank statements must, at all reasonable times, be open to the inspection of Landlord, Landlord’s auditor, or other authorized representative or agent of Landlord, if necessary. Tenant consents to the release of sales tax information to Landlord and on demand will furnish to Landlord a copy of the sales tax reports, quarterly reports and any audit reports of sales for confidential internal use of the Landlord in determining Gross Sales for Tenant. Tenant consents and authorizes Landlord to request such information directly from the State Board of Equalization or other state agency with which sales tax information is filed.

By July 31 of each year, Tenant must furnish Landlord with a statement, to be certified by Tenant as current, true and accurate, which must set forth the Gross Sales of each department, sublessee, licensee and concession operating in, on or from the Premises for the previous 12 calendar months, ending June 30, just concluded, and the authorized deductions, if any, therefrom; and with it Tenant must pay to Landlord the amount of the Percentage Rent, which is due to Landlord as shown thereby. If Tenant, at any time, causes an audit of sales of Tenant’s business to be made by a public accountant, then Tenant must furnish Landlord with a copy of said audit without cost or expense to Landlord. Landlord may, once in any twelve-month period, cause an audit of the business of Tenant to be made by a certified public accountant or Landlord personnel of Landlord’s own selection. Tenant must, upon receiving written notice of Landlord’s desire for such an audit, deliver and make available all such books, records and cash register tapes to the certified public accountant or Landlord personnel selected by Landlord. Furthermore, Tenant must promptly, on demand, reimburse Landlord for the full cost and expense of said audit, if the audit discloses the questioned statement or statements understated Gross Sales by 5 percent or more but less than ten percent. In the event an audit performed at Landlord’s request discloses Tenant understated Gross Sales by less than 5 percent, the cost of such audit will be paid by Landlord. In the event any audit or other review of records discloses the amounts reported as Gross Sales were understated by Tenant by 10 percent or more, Landlord will not only be entitled to recover from Tenant all costs of audit and review but will also be entitled to recover from Tenant a penalty equal to two times the Percentage Rent due pursuant to this Lease on such unreported amounts. Whenever any audit discloses that Gross Sales were understated by any amount, Tenant must immediately pay the additional Percentage Rent therein shown to be payable by Tenant to Landlord, together with interest at the Default Rate thereon, from the date the Percentage Rent was payable until the date paid.

Landlord will be entitled at any time within five years after the receipt of any such Percentage Rent payment, to question the sufficiency of the amount thereof or the accuracy of the statement or statements furnished by Tenant to justify the same. For the purpose of enabling Landlord to check the accuracy of any such statement or statements, Tenant must, for said period of five years after submission to Landlord of any such statement, keep all of Tenant’s records, including sales tax returns, all cash register tapes, income tax returns and income and bank statements and other data which in any way bear upon or are required to establish in detail TENANT'S Gross Sales and any authorized deductions therefrom as shown by any such statements and must, upon request, make the same available to Landlord for examination.

3. Except as expressly stated herein, all provisions of the Lease shall remain in full force and effect.

4. The effective date of this Amendment #1 is the date first written above.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment #1 as of the date written above.

CITY OF MORRO BAY Three Stacks and a Rock Brewing
Brewing Company, LLC
A California limited liability company
By: ______________________ By: ________________________ Carla Wixom, Mayor Charles Nettnin, Managing Member
APPROVED AS TO FORM: By:

Ananda Nettnin, Managing Member
____________________________
Chris F. Neumeyer, City Attorney
ATTEST:
_____________________________
Dana Swanson, City Clerk

RESOLUTION NO. 04-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA
APPROVING AMENDMENT #1 TO THE COMMERCIAL BUILDING LEASE AGREEMENT FOR LEASE SITES 69-70/69W-70W, BETWEEN THE CITY OF MORRO BAY AND THREE STACKS AND A ROCK BREWING CO. LLC,
LOCATED AT 595 EMBARCADERO ROAD

T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, the City of Morro Bay (City) is the lessor of certain properties on the Morro Bay Waterfront described as City Tidelands leases and properties; and WHEREAS, on August 13, 2019, the City approved a short-term Building Lease Agreement with Three Stacks and a Rock Brewing Company LLC (“Three Stacks”) while Three Stacks and the City completed significant improvements to enable Three Stacks to occupy and operate from the building on Lease Site 69-70/69W-70W; and
WHEREAS, on April 12, 2022, following completion of the improvements, the City and Three Stacks agreed upon a new Commercial Building Lease Agreement (the “Lease”) for Three Stacks’ occupation of the building for a 10-year term with a base rent of $23,000, no percentage rent for the first 12 months and the option to convert to a ground lease after five years upon mutual agreement; and WHEREAS, pursuant to Section 3.3 of the Lease, the City and Three Stacks were required to negotiate an equitable percentage rent rate sixty days prior to May 1, 2023; and WHEREAS, during such negotiations, the City and Three Stacks were not able to reach a mutual agreement on an equitable percentage rent rate; and
WHEREAS, Section 3.3. of the Lease states, “If an agreement cannot be reached, then that Percentage Rent shall be the same as applicable in the City’s Harbor Department Lease Management Policy”; and
WHEREAS, accordingly, the City and Three Stacks desire to enter into Amendment #1 to the Lease, to effectuate the same percentage rent rate that is applicable in the City’s Harbor Department Lease Management Policy, beginning on May 1, 2023 and until the expiration of the Lease term. //
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NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Morro Bay, California, as follows:

1. The foregoing recitals, and each of them, are true and correct.

2. The attached Amendment #1 to the Lease is hereby approved.

3. The Mayor is hereby authorized to execute that Amendment #1.

4. The City Clerk shall certify to the adoption of this resolution.

PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on the 9
th day of January 2024 on the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:
______________________________
CARLA WIXOM, Mayor
ATTEST:
_____________________________
DANA SWANSON, City Clerk

Supplemental Staff Report
TO: Honorable Mayor and City Council DATE: January 9, 2024 FROM: Ted Schiafone, Harbor Director
SUBJECT: Approval of Amendment #1 to the Commercial Building Lease Agreement with Three Stacks and a Rock Brewing Company, LLC., for Lease Site 69-70/69W70W located at 595 Embarcadero Road SUPPLEMENTAL INFORMATION PRESENTED AT JAN. 9, 2024 COUNCIL MEETING I’d like to provide some background information regarding this Lease as you may have received some comments:
 This is a building lease and not a Master Lease. In a building lease, the landlord (City/Harbor) owns the building and holds responsibility for all maintenance, building repairs and insurance. This lease with Three Stacks is similar to a sub-tenant leasing space from a Master Leaseholder.
 Three Stacks signed the first lease in August 2019 with no rent required until the commencement of business operations.
 Two extensions of the lease were granted because the tenant did not complete the project on time according to the terms of the original lease.
 As a result of these extensions, the tenant paid no rent from August 2019 to May 2022. That is over $65,000 in base rent they did not pay to the Harbor. Note: When a Master Leaseholder remodels or rebuilds their building, they are required to pay base rent during that timeframe.
 The tenant was required to spend a minimum of $120,000 towards building improvements and provide documentation proving such expenses. The Harbor received a spreadsheet of expenses totaling over $300,000 without any documentation proving such expenses.  The building lease called for $23,000 annual base rent starting May 2022, with no percentage rent owed for the first 12 months. The tenant leases approximately 3,800 square feet of space from the City/Harbor. That equates to approximately .50 cents/square foot/month. As a comparison, the most recent restaurant sub-lease tenant (from a Master Leaseholder) is paying $5,792 per month for approximately 1,000 square feet, amounting to $5.00 /square foot/month. Another recent restaurant sub-lease tenant is pay $12,000 per month for approximately 5,000 square feet of space. That amounts to $2.40 /square foot/month. Currently rent for off water restaurant locations in San Luis Obispo County average around $3.00 /square foot/month.
 If Three Stacks was paying the lowest rate quoted above($2.40 /square foot/month), they would be paying a base rent of over $9,000/month.
 Regarding negotiations for percent rent: Three Stacks wants to paint the City/Harbor as not negotiating in good faith. We have been actively trying to reach an agreement. o April 6. Harbor sent a formal letter to Three Stacks regarding the need to determine percent rent and confirm the improvements.

AGENDA NO: 7.g
MEETING DATE: January 9, 2024

o Early May, I contacted Three Stacks by phone to set an in person meeting to discuss percent rent.
o On May 16, 2023, I took a tour of property to confirm improvements where made. I made a request at that time to receive documentation on improvements. (Note: they only provided a listing of expenses at a later date). We discussed percent rent and they indicated they would expect rates like some of the other Master Tenants received. I explained those Master Tenants are different from a building lease and they invest several million dollars into their development. I indicated the percent rent as listed in the Master Lease policy is where I would need to start. o On May 19, I received an email from Three Stacks indicating they would be willing to pay 3% for food and 5% for beer/alcohol, in addition to paying base rent. o On June 6, I had a follow up meeting with Three Stacks and indicated the Harbor would recommend percent rent as stated in the Master Lease Policy (5% for food, 10% for beer/alcohol) and would consider subtracting base rent from percent rent. o Closed Session June 27.
o Closed Session August 8.
o After the Closed Session on August 8
th
, Three Stacks was sent a draft amendment
with the terms Council had approved. They indicated they would have their attorney review the document and get back to us. The delayed providing any response for four months, saying their attorney was reviewing the amendment. o After being delayed for several months, I indicated this was going back to Council for new terms. Three Stacks sent a non-attorney letter indicating they want percentage rent equal to other Master Leaseholders.
o Closed Session December 12.
 In my opinion, this tenant has been receiving well below market rates for years. It is these types of under market rents that has made it difficult for the Harbor to maintain its infrastructure and appearance. If this lease amendment that has been submitted for Council is approved, Three Stacks will be paying an estimated $60,000 in base rent plus percentage rent for the year. That amounts to $1.25 /square foot/month. This is still way below market.

Prepared By: _YK _______ Dept Review: ______
City Manager Review: __ YK______ City Attorney Review: __CFN____ Staff Report
TO: Honorable Mayor and City Council DATE: January 2, 2024 FROM: Yvonne Kimball, City Manager
SUBJECT: Short-Term Rental Ordinance Review – requested by Council Member Landrum

RECOMMENDED ACTION
Receive information from Council Member Landrum and staff, then direct next steps. Options include:

1. Continue to monitor its overall effectiveness and bring back for future review.

2. Clarify certain weakness of current process and direct improvements accordingly, which may or may not result in ordinance change.

3. Revamp the entire process. This is not recommended.

ALTERNATIVES
See above.

FISCAL IMPACT
There is no immediate and significant fiscal impact related to option 1 or 2. Option 3 requires substantial staff time, legal fees, review by Planning Commission and City Council, followed by Coastal Commission certification.

BACKGROUND/DISCUSSION
In late 2019, the City formed a community committee of Morro Bay residents/business owners to develop recommendations for a new Short-Term Rental (STR) ordinance that considered key issues raised by community members during town hall discussions and surveys on the topic. The committee was charged with developing policy recommendations that balanced all of the important community considerations surrounding neighborhood character, quality of life, affordable housing, economics, provision of visitor accommodations, City revenues and community safety. Following a deliberative process, the Community Committee’s recommendations were formed into a draft STR ordinance presented to City Council on September 22, 2020, introduced on October 13, 2020 and adopted October 27, 2020.

Link to Sept. 22, 2020 agenda packet: (see Items B-1 and B-2) https://morrobayca.gov/ArchiveCenter/ViewFile/Item/5443 The ordinance was approved by the California Coastal Commission on September 9, 2021, and became effective September 19, 2021, as part of a certified amendment of the City’s Local Coastal Program Implementation Plan.

AGENDA NO: 9.a
MEETING DATE: January 9, 2024

The attached memo from Community Development Director Scot Graham provides an overview of the current regulations. The Community Development Department responds to code enforcement complaints and the Police Department responds to calls when necessary.

In October 2023, Council Member Landrum hosted a Town Hall session titled short-term rentals.

Provided as Attachment 2 is Council Member Landrum’s summary from that session.

At today’s meeting, the Council will review and discuss above information and provide direction for next steps as deemed appropriate by a majority of Council.

ATTACHMENTS

1. Community Development memorandum

2. List of attendees and public comment summary notes from Council Member Landrum’s October 15, 2023 Town Hall session

3. Council Member Landrum’s STR Survey Results

City of Morro Bay
City Hall
595 Harbor Street
Morro Bay, CA 93442
805-772-6201

MEMORANDUM
To: Mayor and City Council
From: Scot Graham, Community Development Director
Date: January 9, 2024
Subject: C-2: Attachment 1, Short-term rental ordinance/key policy discussion This memo is provided as supplemental information to the short-term rental (STR) staff report included as item C-1 of the January 9, 2024, City Council Agenda and more specifically to provide a summary of key STR policy requirements. The policy discussion is broken into four categories: 1. Background, 2. General Regulations, 3.

Operational Requirements and 4. Enforcement.

Background
The City’s STR ordinance was adopted on October 27, 2020, as Chapter 17.41 of the City of Morro Bay Municipal Code (Zoning Code). The ordinance was approved by the California Coastal Commission on September 9, 2021, and became effective September 19, 2021, as part of a certified amendment of the City’s Local Coastal Program Implementation Plan.

Link to short-term rental ordinance:
https://library.municode.com/ca/morro_bay/codes/code_of_ordinances?nodeId=TIT17Z O_CH17.41SHRMVARE
In Fiscal Year 2022/2023 STR’s generated $757,558 in Transient Occupancy Tax (TOT) or just under 18% of the total TOT collected by the City.

STR numbers in Morro Bay:

Full Home Rentals = 173
Commercial = 9
Home-sharing Rental = 11
Total = 193
Waitlist total = 169
Key Definitions

1. Full-Home Rental: guest enjoys exclusive use of the dwelling and host is not present

Memo re Short-term Rental Discussion Page 2 of 3
January 9, 2024

2. Home-sharing rental: STR located within a dwelling that is the host’s primary residence, and where the host is on site throughout the guest’s stay. Includes guest houses (detached bedroom)

3. Short-term vacation rental: means a single-family dwelling, multi-family unit, bedroom of a primary residence, accessory dwelling unit, or junior accessory dwelling unit, which is rented to a guest for compensation for the purpose of lodging for a period of thirty or fewer consecutive days. "Short-term vacation rental" encompasses home-sharing and full-home rentals. "For compensation" includes, but is not limited to, rental of the property for any form of monetary or non-monetary consideration, including but not limited to money, goods, or services, as well as in-kind exchanges of goods, services, or premises.

General Regulations
 STR’s must pay minimum Transient Occupancy Tax of $500 per year  STR’s are prohibited in affordable housing projects, Accessory Dwelling Units, mobile home parks and apartments located in residential zones  STR’s are limited to 12.5% or 1/8th of the number of units in an apartment or apartment house, located in a mixed use or commercial zone.  Grandfathering: STR’s lawfully permitted prior to the effective date of the ordinance, that are in good standing on the ordinance effective date of the ordinance shall be considered legal nonconforming uses
 Inspections: all STR’s are required to be inspected as part of the initial application/renewal under the ordinance, and every 4-years thereafter.

Community Development and Fire conduct the inspections.  STR licenses are not transferable upon sale or death
 Density Limitations
 Full-home rental cap = 175 in residential zones
 No maximum # of full-home rentals in commercial and mixed use zones  Full-home rentals, in residential zones must be separated by 175’ radius measured from exterior property lines…see below.

Memo re Short-term Rental Discussion Page 3 of 3
January 9, 2024
Operational Requirements
• The STR permit/license must be posted in the rental
• Parking: all parking must be onsite in legal spaces required for the applicable housing type
• STR operators must notify guest of STR operational reqs. • Permit/license number must be included in the hosting platform advertisement. • Minimum age 21 for primary renter of STR
• STR operator must have policies in place to address things like noise, disorderly conduct, overcrowding, and alcohol consumption.
• Occupancy for full-home rentals: 2 per bedroom, plus two, with maximum of 10 guests.
• Occupancy for home-share rental: 2 per bedroom
• Children under 3 are excluded from the occupancy limitations • Local 24 hour/7-day per week contact must be identified and available to address concerns within 1-hour while STR’s are being rented
• Signage: a sign is required to be posted on site in a location that is visible and legible from the public right of way that includes:
• Identification that the residence is an STR, with permit/license No. • 24-hour contact information
• Violations are subject to penalties set by resolution and include possible permit revocation
Enforcement
Staff uses various methods for identifying and tracking illegal STR’s or STR’s operating in violation of the City STR policy. Citizens can contact code enforcement directly via phone or email or indirectly through the City’s “Service Request” application found on the front page of the City website. Code enforcement also uses the Granicus Host Compliance application to proactively identify illegal short term rental advertisements in Morro Bay. The Host Compliance application allows code enforcement staff to track illegal vacation rentals and to generate automatic violation letters through the system.

Code enforcement will typically provide two notice of violation letters prior to issuing an administrative citation. Administrative citations are issued pursuant section 1.03.050 (Administrative Fines) of the Morro Bay Municipal Code which includes a $100 fine for the first violation, $200 fine for the second violation and a $500 fine for the second violation. The Morro Bay Police Department also responds to STR complaints, mostly related to noise issues and typically outside regular business hours. Inspections are conducted by Fire Department and Community Development staff.

TOT administration
City utilizes HDL to administrate TOT revenue collection. Due to COVID delays and staffing transition, there has been miscommunication between HDL and city. Staff will continue to work on improving process and customer satisfaction.

Town Hall STR 10/15/23
First Name Last Name
Maureen Gillespie
Derek Dahlgren
Bill Luffee
John Crews
Marlys McPherson
Michelle Leicester-Cudaret
Brenda Carlson
Rigmor Samuelson
Keith Crowfar
Patti Anderson
Patel Amir
Tammy Haas
Jim Twentyman
Gail Johnson
Chuck Stoll
Barry Branin
Laurel Barton
Julie Phillip
Jeanne Colby
Mitchell Bush
Terry Simon
Judi Brown
Sugar Cliff
Jeff Eckles
Paul Donnelly
Jim Curnutt
Cindi Muir
Cherise Hansson
Linda Winters
Dawn Feuerberg
Val Seymor
Betty Winholtz
Craig Gossard
Donna Matchette
Joe Rawson

10/15/2023 at 2pm, Vets Hall
Introduction of Zara
Zara thanked everyone, enhance transparency, engage public, STVR as first meeting, city has a pause, no review of STVR. “I will pass questions on to the city”.

Questions:

1. Hotels with Airbnb are not in the STVR count.

2. Michelle Leicester-Cadaret. Next door to me is a small one-bedroom unlicensed house.

It’s advertised as an Airbnb, the housekeeper lives four housed down the street. I asked her and about the house and she stated that she rents to her many cousins. They park all over the street. Wood burning outside fire pit, they installed a gas pit but it’s not used.

Dogs left in the home while out in town, dogs barking, fire pit must be ten feet away from the home. I’ve called the fire dept many times. What do we have to do to slow this down. A problem with parking, narrow streets, to many illegal STVR.

3. Rigmor. It’s sad to hear this story. I rented for $50.00 a night but it did not work. I gave my license away between the cost of cleaning and upkeep. Find a way to do it good, I enjoy out of the state visitors, get the licenses for four years than pass it on. It good for the businesses.

4. No name. Sad to hear those stories. I host a home share. I’m upstairs, I’ve given the city nine-thousand dollars from me. I think of all of the illegals. I’m not doing those things. I do my own cleaning. I pay state and federal taxes. I paid five-thousand dollars to the city.

I feel enforcement is the problem. I don’t know what HDL is doing. Code enforcement sent me a letter with a complaint. The city didn’t even look up to see if I was licensed.

Why are we paying HDL. They should have told the neighbor complaining that I have a license but I received a complaint notice. Visitors come to my house and spent money.

Enforcement is the problem. Shut it down, collect all of the fee from the vacation rentals. Sorry to vent. I paid five-thousand dollars of the nine-thousand dollar collected by the city.

5. Terry Simons. I live next to an unlicensed vacation rental with three cars, kids and several adults. We involve the police and enforcement. Owner next door is an attorney and said sue me. As I look at this evolving situation, follow the money. So far, we have not heard for the vacation rental professional community. Professional community is doing their best to manage their vacation rentals. Hosted rentals we spoke to, they experience what it’s like to have someone in their home. We asked neighbor attorney to help us manage their illegal people in their home. It’s the cities job to regulate the vacation rentals. It’s not the fire department duty to monitor the vacation rentals. It’s the police who are supposed to monitor. We have a new code enforcer who I hope will help us. I don’t think we need to bring attention to those who don’t bring harm. We are a community who own homes here. What do you do to control the people who have vacation rentals, follow the money. The city can enforce and bring more voice to the problems and back it with public information ……. of step of, if they’re not on our list then we cannot help.

Who what and when is someone in the city …... Penalize the HDL who is managing the vacation rentals.

6. Michelle Leicester-Cadaret. those illegals should never get a license

7. Marlys McPherson. I was on the council when this ordinance was passed. We had an adhoc committee with 14 meeting. I want to correct a few things, host compliance and identity of illegals. HDL does not do the enforcement. The city is supposed to enforce vacation rentals. I agree with penalties, commercial district vacation rentals should be included in the numbers, you should be allowed to keep your vacation rental if you follow the rules.

8. Dawn Furstenberg. I have a home share. I contacted HDL and they were confused, they charge 10% for home share, 14% for non-share. HDL operates vacation rentals in Carpinteria. Visitor come to go here to visit Big Sur. I put a three-night mandatory because it’s not worth it for me due to the fees. There should be a distinction between hosted and non-hosted vacation rentals. I got a notice that I have an illegal unit in my back yard then the inspector states oh you are licensed. I’m a R-2 lot, the process could be a little refined. It’s like harassment because it’s happened three to four times. The city will not give a home share a licensed.

9. No name. I have an Airbnb. I ask my neighbors to contact me it they have a problem.

SLO has a noise ordinance to govern their neighborhoods. This ordinance states the homeowner gets a warning, first fine is five hundred, the second fine is one thousand dollars. Illegal rental should not be given a vacation rental license. The few that are bad are affecting the name of Airbnb. Travelers spend money in our town and bring in revenue. Airbnb sometimes helps with bills.

10. Judi Brown. Whatever we do going forward there should be dog rules. We have dogs left in back yard when renters are gone. The ordinance should say that the dog is not to be left home alone. Triple the fines, this will get their attention.

11. Lisa. I don’t’ think we should just sit back and allow this to happen. I have a vacation rental; I send an agreement to the renter where they initial next to the contract or they will be fined. They will not leave the dog behind and must pick up after their dog. The amount of money we contribute to TOT and license fees, the city is making a lot of money. The downfall of the city who is not following up on complaints. I happened to live close by and speak to the renter if there is a problem. Show best practices, these are the rules that the guest must follow with all the of the agencies. I have talked to Carla about these issues. There needs to be a discovery, unlicensed should not be allowed to cause problems and should be followed up by the code enforcement.

12. Marlys McPherson. Give a brochure to the renter. I’ve been interested to know how the ordinance has been followed.

13. Mitchell Bush, STVR Property Manager. I manage rentals in our city. Violators should be fined. Out of 200 rentals, I’ve only had 2 complaints. We make rules, we reserve the right to kick renters out, we have not had any problems with neighbors. Just me talking to neighbors has helped me understand new issues and I invite feedback. Enforcement must come with communication and fines. The city should figure out who is in charge. Is it the fire, police or code enforcer. We need to know the problems. HDL has been a big problem for us. They are not timely for sending us new license in a timely manner. We

pay HDL a lot of money. I would like to see that money come back to our city. They stopped giving out stickers, “I make my own to give out”

14. No name. it took me four months from Fresno to get my license, why is our city hall closed at noon, hire a few more people.

15. No name. It’s enforcement, one-hundred-dollar fines, review unlicensed records for their address. Do they have a business license, if they have had the licenses for five years, they own the city five years of taxes, VIN diagram of these paying their license fees. Collect the back taxes, put a lean on their property.

16. No name. Airbnb can be a monthly rental. On my hosted, a business with no permit or blue paper notice for my window. How many people of the 175 licensed have more than one vacation rental? Ciano reality owns nine homes that he rents.

17. Jim Curnutt. I had a licensed vacation rental a few doors down the street. It took a month to get the city to put a sign with how many people could stay there. The house finally sold. There is another Airbnb with fifteen cars in the street. They were quiet but the parking was a problem. The police had the renters repark their cars. I approached a renter who said “it was a gift from a friend of a friend”. I going to report the address. I asked the city if I could get a list of vacation rentals. They said they can’t because they have to redact information. Severn days later, I have not been given a list. It should be easy to get a license list. Proper signage should not be a problem.

18. Jim. I live next to two vacation rentals. I called Beach Rental 40 times in the last years.

The police have documented records there should be three strikes. There should be a fine or you lose your licensed.

19. Moraine. I’m impressed with the solutions you are coming up with. Are we addressing the parking because where I live there is only parking on side of the street.

20. Nicole. With five-thousand homes, we have a housing crisis, rentals are lucrative. Can we make an incentive for vacation rentals to become regular housing?

21. No name. The housing department gives four-thousand dollars to people who rent to people. It’s a one-time payment.

22. Marlys McPherson. We have 22% of our homes vacant in town. Give incentives to them to rent.

23. No name. we are making less money of vacation rentals. Beachcomber Street homes can make a lot of money if they rent monthly to citizens for the housing shortage.

24. No name. what is going to happen from here. What is coming up this November?

25. Michelle Leicester-Cadaret. on the STVR ordinance there is 175 feet between rentals.

What about behind my house? If you call the police then there is retaliation. It’s happening right now. “Why hasn’t the city taken care of this problem”

26. Marlys McPherson. when we consider this ordinance, I voted for this, everything should adherence to this policy.

27. Terry Simons. amend the ordinance.

28. No name. make an incentive to rent during the school year and return to vacation rental during the summer months.

29. Cherise. I used to live in north MB, my friend was kicked out of her rental. It took three months to find a rental. Host share produces a much better rental. The home sticker, we need to signs posted, the code enforcement is not doing a good job.

30. Val. Who in the city is in charge of vacation rentals? What with limiting vacation rentals?

31. Mitchell Bush. Pacific Grove has 55 vacation rentals. We have the same population.

32. Zara. I sent a poll to the business owners. Do vacation rentals affect your business?

33. No name. Hire someone for sixty- thousand a year. Just make the players better.

Consider the good ones and not try to remove them.

34. Zara. I was not able to get the amount paid. Why are these numbers not transparent. It seems so elementary. We just lost our financial officer.

35. Terry Simons. Invite everyone to the City Council meetings.

Linda read Gail Johnson letter
Notes from phone appointment with Kevin Sanchez Morales from Airbnb 11/8/23  Eric Vincent is a code enforcement officer in Morro Bay who also does building inspections. He contacted Kevin in July regarding code enforcement
 Airbnb City Portal is a tool for the city to help manage data and more https://www.airbnb.com/cityportal
 Can the City incentivize Hosts to join Airbnb to make it easier for the city to monitor?  Kevin suggests large fines for offenses - starting at $1000  Kevin suggests MB pass ordinance requiring all STR platforms to collect TOT. Once this is in place, they will collect and remit TOT for free.
 Good neighbor (? not sure of the name) info sent to all MB Hosts with whatever info the City wants to include regarding compliance with regs, parking requirements, pet policy etc.  That info can include an ask to add Permit #'s to Airbnb Host listings. This could help identify illegal listings on the platform.

Staff Report
AGENDA NO: 9.b
MEETING DATE: January 9, 2024
Prepared By: DS, YK______ Dept Review:_____
City Manager Review: YK________ City Attorney Review: _CFN_____ TO: Honorable Mayor and City Council DATE: December 27, 2023

FROM: Yvonne Kimball, City Manager
SUBJECT: Consideration of Revisions to the City Council Policies & Procedures to add Section 5.5 Establishing a Policy regarding the use of Public Resources by Elected Officials

RECOMMENDED ACTION
Discuss proposed revisions to the City Council Policies & Procedures and adopt Resolution No. 05-24 amending the City Council Policies & Procedures, to add Section 5.5 establishing a policy regarding the use of public resources by elected officials.

ALTERNATIVES

1. The City Council may choose to adopt Resolution No. 05-24 using modified policy language as agreed to by a Council majority.

2. The Council may choose not to adopt Policy language regarding the use of public resources by elected officials.

3. The Council may establish a Council ad hoc sub-committee to review the Council Policies & Procedures in part, or in whole, and return to Council with recommended revisions.

FISCAL IMPACT
There is no fiscal impact associated with the recommended action.

BACKGROUND/DISCUSSION
The Council Policies & Procedures were adopted in 2001 and have been reviewed and updated over the years, most recently in 2022. The overall principles and guidelines contained in the Council Policies & Procedures establish procedures, roles and responsibilities that contribute to the orderly conduct of the City’s business. Periodically, the City Council has established a subcommittee to conduct a cover to cover review of this and the Advisory Bodies Handbook and Bylaws and return to Council with recommended updates. The most recent review by a Council subcommittee was completed in April 2022 (linked here and provided as Attachment 1).

At the October 10, 2023 Regular Meeting, Council Member Landrum requested and received majority support for discussion of a policy around Council Member use of City facilities and resources in light of her request and other council members’ to hold a series of outreach meetings at city facilities. These individual outreach meetings include, but are not limited to Town Hall, Listening sessions.

2 Staff recognized that the subjects of those meetings are closely related to City operations; however, the first few outreach meetings were not specifically directed by the City Council, therefore were considered as an outreach effort made by individual council members. Community outreach by individual council members is a long-standing tradition that has typically taken place in coffee shops or parks so the outreach and subject matter were not in question, particularly given improved communication is an adopted City goal.

A couple of individual outreach meetings by Council Members took place since the request for a Council policy. Those meetings fortunately did not result in excessive use of City resources.

However, in some cases, to support an outreach effort, staff research and preparation time do occur along with facility rental conflicts. With the concern of California law prohibiting using of public resources for either personal or political purposes, staff recommends a policy defining use of public resources by elected officials that could be utilized to address future requests.

Under California law, using public resources for either personal or political purposes is illegal. “Public resources” include such things as:
 Money (for example, charges made on an agency credit card or account),  Staff time,
 Equipment (for example, machinery, vehicles, technology, tools, telephones, furniture and computers), and
 Supplies (for example, items one would otherwise purchase at office supply or hardware stores).
“Use” means the use of public resources that is substantial enough to result in a gain or advantage for the user and a loss to the local agency that can be estimated as monetary value. There are very narrow exceptions for “incidental and minimal” use of resources. The purposes of these exceptions appear to be more to prevent traps for the unwary; they do not constitute an affirmative authorization for personal use of public resources.

Public officials face both criminal and civil penalties for using public resources for personal or political benefit.

At the November 14, 2023 Regular Meeting, the City Council discussed policy language gathered through a review of policy manuals from various agencies around the State to guide the allowed use of City resources (facilities, staff time, equipment, supplies) by elected officials and directed staff to return with revised language that would address the following:
 Establishing a reasonable limit for frequency of use. Four times per year is suggested based on Council discussion at the November 14 meeting
 Prohibition of certain usage in election years to avoid potential election law conflict  Limited staff support for facility use
Staff has incorporated the above input into the proposed options:

Option 1:

Use of Public Resources
Members shall not use public resources unavailable to the public in general, such as City staff time, equipment, supplies or facilities, for private gain or personal

3 purposes.

City Council has identified community engagement as a priority of the council. City Council recognizes that limited meeting spaces are available in the City of Morro Bay. In supporting individual council member’s effort to reach the general public for the overall interest of the City of Morro Bay, council members, Mayor included, are allowed to use city’s meeting facility free of charge for up to four times per calendar year for outreach meetings, including Town Hall, Listening sessions and like, provided those sessions require only limited staff support for facility use. The outreach events must demonstrate a reasonable connection to the city council adopted goals. Council members shall request facility usage through the City Manager. Members shall not use public facility free of charge in March to November in election years (i.e., 2024, 2026, etc.), and an equivalent timeframe prior to any special municipal election held to fill a Council vacancy.

Option 2:

Use of Public Resources and Advocacy.

Members shall not use public resources which are not available to the public in general (e.g., City staff time, equipment, supplies or facilities) for private gain, political advantage, or for personal purposes not otherwise authorized by law.

City Council has identified community engagement as a priority of the council. City Council recognizes that limited meeting spaces are available in the City of Morro Bay. In supporting individual council member’s effort to reach the general public for the overall interest of the City of Morro Bay, council members, Mayor included, are allowed to use city’s meeting facility free of charge for up to four times per calendar year for outreach meetings, including Town Hall, Listening sessions and like, provided those sessions require only limited staff support for facility use. The outreach events must demonstrate a reasonable connection to the city council adopted goals. Council members shall request facility usage through the City Manager. Members shall not use public facility free of charge in March to November in election years (i.e., 2024, 2026, etc,) and an equivalent timeframe prior to any special municipal election held to fill a Council vacancy.

When representing their individual opinions and positions, Members shall expressly state they are not representing the Council or the City of Morro Bay, unless expressly authorized by the Council.

CONCLUSION
Staff recommends the Council discuss proposed revisions to the City Council Policies & Procedures and adopt Resolution No. 05-24 amending the City Council Policies & Procedures, to add Section 5.5 establishing a policy regarding the use of public resources by elected officials.

This policy would not apply to individual council member’s events that have been authorized by the Council as a whole. For example, if one or all of the Town Hall meetings were specifically authorized by the Council, staff will provide research and facility uses and other resources that are necessary to support other city directed events.

4 ATTACHMENTS

1. Link to City Council Policies & Procedures

2. Resolution No. 05-24 adopting revised Council Policies & Procedures

RESOLUTION NO. 05-24

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA

AMENDING THE CITY COUNCIL

POLICIES AND PROCEDURES MANUAL

T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, the Council Policies and Procedures Manual for the City of Morro Bay (the “Manual”) is a combination of City Council actions, policies, references, and information regarding the City Council; and
WHEREAS, to ensure all Councilmembers are familiar with and understand the City of Morro Bay’s philosophies and policies regarding serving on the City Council, on July 23, 2001, the City Council adopted Resolution 47-01 approving an early version of the Manual; and WHEREAS, the Manual has been amended several times throughout the years; and WHEREAS, at a Regular Meeting held October 10, 2023, the City Council directed staff to bring forward policy language around Council Member use of City facilities and resources; and WHEREAS, the City Council has identified community engagement as a priority of the Council; and WHEREAS, promoting community engagement by Council Members with the public concerning City Council adopted goals promotes a good government mandate of responsiveness, transparency and accountability; and
WHEREAS, the City Council recognizes that limited meeting spaces are available in the City of Morro Bay; and
WHEREAS, a limited use of public resources to promote the Council goals of community engagement is a worthy and proper endeavor for the City; and WHEREAS, the City Council desires to add Section 5.5 to establish a policy for use of public resources for community engagement by elected officials, so as to promote responsive government, transparency, and accountability, while also actualizing a Council priority of community engagement; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Morro Bay does hereby amend the City Council Policies and Procedures Manual to add Section 2.6 as follows:

5.5 Use of Public Resources
Members shall not use public resources unavailable to the public in general, such as City staff time, equipment, supplies or facilities, for private gain or personal purposes.

City Council has identified community engagement as a priority of the council. City Council recognizes that limited meeting spaces are available in the City of Morro Bay. In supporting individual council members’ effort to reach the general public for the overall interest of the City of Morro Bay, council members, Mayor included, are allowed to use city’s meeting facility free of charge for up to four times per calendar year for outreach meetings, including Town Hall, Listening sessions and like, provided those sessions require only limited staff support for facility use. The outreach events must demonstrate a reasonable connection to the city council adopted goals. Council members shall request facility usage through the City Manager. Members shall not use public facility free of charge in March to November