Morro Bay City Council
March 12, 2024

CITY OF MORRO BAY
City Council Regular Meeting Agenda

Tuesday, March 12, 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.
•
Zoom webinar link:
https://us02web.zoom.us/j/82722747698?pwd=aWZpTzcwTHlRTk9xaTlmWVNWRWFU QT09
•
• 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

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:
•
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.
•
All remarks should be addressed to Council, as a whole, and not to any individual member thereof.
•
The Council respectfully requests that you refrain from making slanderous, profane or personal remarks against any elected official, commission and/or staff.
•
Please refrain from public displays or outbursts such as unsolicited applause, comments or cheering.
•
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.h as submitted.

7.a Approval of Minutes
(City Clerk)

Recommended Action
Approve as submitted.

1. February 27, 2024 - Special Closed Session Meeting 6

2. February 27, 2024 - Regular Council Meeting 8

7.b Update to the Harbor Department Rules and Regulations, Section 9, to align with the City's Skiff Storage Fee established in the City's Master Fee Schedule
15 (Harbor Department)
Recommended Action
Adopt Resolution No. 17-24 updating the Harbor Department Rules and Regulations to align with the City’s current adopted Master Fee Schedule for Skiff Storage Fee.

7.c Ministerial approval of Parcel Map MP 22-0025 (3230 Beachcomber) and Acceptance of 5' Public Sewer Utility Easement
26 (Public Works Department)
Recommended Action
Adopt Resolution No. 18-24 ministerially approving finality of proposed Parcel Map MB 22-0025 (which was previously approved by Planning Commission under the designation of Tentative Parcel Map PAR22-02) with a 5’ public utility easement.

7.d Report on attendance at the 2024 C-MANC Washington Week Meetings 95 (City Manager)
Recommended Action
Receive and file.

7.e Adoption of Resolution No. 19-24 Approving a New Lease Agreement with Van Beurden Investments Lease site 78-81/78W-81W, Dutchman's Seafood House, 701 Embarcadero
121
(Harbor Department)
Recommended Action
Adopt Resolution No. 19-24, approving 29-year Master Lease Agreement with Van Beurden Investments for lease site 78-81/78W81W, Dutchman's Seafood House.

7.f Authorization to accept $35,888.50 in Grant Funds from the Friends of the Morro Bay Harbor Department for the purchase of a Polaris Utility Terrain Vehicle (UTV) for the Harbor Department
169
(Harbor Department)
Recommended Action
Authorize the City Manager to execute an agreement accepting grant funding from the Friends of the Morro Bay Harbor Department to

purchase a Polaris UTV for beach rescue operations.

7.g California State Water Resources Control Board Division of Financial Assistance Minimum Recycled Water Implementation Requirements Letter
176
(Public Works Department)
Recommended Action
Receive and file the following letter from the California State Water Resources Control Board (SWRCB) Division of Financial Assistance (DFA) Letter regarding the minimum recycled water implementation requirements necessary to satisfy the requirements of the City’s Clean Water State Revolving Fund (SRF) Loan Agreement.

7.h Authorization to reimburse Council Member Travel Expenses to attend C-MANC Washington Week Meetings
182
(City Manager)
Recommended Action
Approve reimbursement of travel expenses of approximately $2,500 submitted by Mayor Pro Tempore Landrum to be paid from grant funds received from the Central Coast Joint Cable Fisheries Liaison Committee

8. PUBLIC HEARING ITEMS
None

9. BUSINESS ITEMS

9.a Key Staffing Vacancies Update 184
(City Manager)
Recommended Action
That the City Council receive an update on key staffing vacancies and provide direction as deemed necessary.

9.b Approval of Finance Director Job Description and revised Salary Schedule
186
(City Manager)
Recommended Action
Adopt Resolution No. 20-24 reinstating the Finance Director Job Classification and Job Description and approve pay schedule, and adopt Resolution No. 21-24 approving a revised FY 23-24 pay schedule including the Finance Director Classification and increasing the salary for the Community Development Director to align with other Morro Bay director positions.

10. COUNCIL DECLARATION OF FUTURE AGENDA ITEMS

11. ADJOURNMENT

The next Regular Meeting will be held on March 26, 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.

MINUTES - MORRO BAY CITY COUNCIL
SPECIAL CLOSED SESSION MEETING –
FEBRUARY 27, 2024 – 3:00 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
Ted Schiafone Harbor Director
Lori Stilts Harbor Business Coordinator
Steve Conway Asst City Manager/Admin Services Director
Rachael Hendricks Human Resources/Risk Manager

ESTABLISH QUORUM AND CALL TO ORDER
Mayor Wixom called the meeting to order at 3:00 p.m. with all members present.

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.

Paul VanBeurden, Dutchman’s Seafood House, requested Council support for the proposed terms of a new lease agreement.

The public comment period was closed.

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

CS-1 CONFERENCE WITH REAL PROPERTY NEGOTIATOR - GOVERNMENT CODE SECTION 54956.8
Property: Lease Sites 102/102W & 105.1W/105.2W, 1001 Front Street, Central Coast Seafood/ Giovanni’s Fish Market
Property Negotiators: Giovanni DeGarimore
Agency Negotiators: Ted Schiafone, Harbor Director; Yvonne Kimball, City Manager; and Chris Neumeyer, City Attorney
Negotiation: Price and Terms of Payment
CS-2 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
AGENDA NO: 7.a.1
MEETING DATE: March 12, 2024

2 MINUTES - MORRO BAY CITY COUNCIL CLOSED SESSION – FEBRUARY 27, 2024 CS-3 CONFERENCE WITH REAL PROPERTY NEGOTIATOR - GOVERNMENT CODE SECTION 54956.8:

Property: Lease Sites 129W-131W, Morro Bay Fish Company, 1231 Embarcadero Property Negotiator: Garrett Rose, Morro Bay Seafood Company Agency Negotiators: Ted Schiafone, Harbor Director; Yvonne Kimball, City Manager; Chris Neumeyer, City Attorney
CS-4 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
CS-5 CONFERENCE WITH LABOR NEGOTIATORS
City Designated Representative: Rachael Hendricks, Human Resources Manager/Risk Manager Employee Organizations: Morro Bay Firefighters’ Association; Morro Bay Peace Officers’ Association; Service Employee’s International Union - SEIU Local 620; and unrepresented Management, Confidential and Executive employees
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 5:02 p.m.

Recorded by:

Dana Swanson
City Clerk

1 MINUTES - MORRO BAY CITY COUNCIL

REGULAR MEETING
February 27, 2024, 5:30 p.m.

Veterans Memorial Hall, 209 Surf St., Morro Bay, CA
Members Present: Mayor Carla Wixom
Council Member Zara Landrum
Council Member Laurel Barton
Council Member Cyndee Edwards
Council Member Jennifer Ford
Staff Present: City Manager Yvonne Kimball
City Attorney Chris Neumeyer
City Clerk Dana Swanson
Interim Asst City Mgr/Admin Svcs Director Steve Conway
Public Works Director Greg Kwolek
Interim Comm Dev Director Michael Codron
Police Chief Amy Watkins
Fire Chief Dan McCrain
Harbor Director Ted Schiafone
Finance Manager Emily Conrad
Senior Budget Analyst Melissa Green
_____________________________________________________________________

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

2. MOMENT OF SILENCE

3. PLEDGE OF ALLEGIANCE

4. REPORTS

4.a Closed Session Report
City Attorney Neumeyer announced no reportable action was taken in closed session.

4.b Mayor and Councilmembers' Reports, Announcements and Presentations
https://youtu.be/P8v5mVI5g8M?si=11TXjMlDRUmLWY8u&t=93

4.c City Manager Reports, Announcements and Presentations

2 None

5. RECOGNITION AND PRESENTATIONS
None

6. PUBLIC COMMENT
https://youtu.be/P8v5mVI5g8M?si=RQdl-zfTJ1vZUUK1&t=972
 Don Maruska, San Luis Obispo County resident and Morro Bay business owner, commented on the potential for offshore wind development and encouraged the community to focus on facts rather than fears when considering this opportunity.
 Linda Winters, Morro Bay, reminded residents to get out and vote on March 5th.
 Monique Davis, Morro Bay, offered suggestions for assisting those who are unhoused.
 Rachel Wilson, Cayucos, shared information gleaned from the Cal Poly Sea Grant Community Education Workshop.
 Steve Ray, Morro Bay, suggested the review period for the BESS Project EIR be increased from 60 to 90 days and noted the importance of protecting the estuary.
 Terry Simons, Morro Bay, reported the property owners along the Quintana ditch were trying to acquire property from Caltrans with a goal of extending the drainageway.
 Jeanne Marie Colby, Morro Bay, agreed with the previous speaker a 90- day review of the BESS Project EIR was necessary and that it must address potential estuary impacts.
 Jeff Heller, Morro Bay, shared his appreciation for the City's efforts to address issues around homelessness. Regarding Item 9.c., he supported staff recommendation to seek available funding.
 An unnamed resident offered comments.
 Betty Winholtz, Morro Bay, announced REACT Alliance will host a "Save Our Seas Stop Offshore Wind" event on Saturday, March 9th, beginning at 12 noon at the Veterans Hall; requested the Council agendize consideration of a letter opposing AT&T's efforts to no longer be required to provide landline telephone service; and reminded residents nesting season began February 1st.

End of public comment.

7. CONSENT AGENDA

3 https://youtu.be/P8v5mVI5g8M?si=CRLzR6YY9l0A93si&t=2951 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.

Mayor Wixom opened public comment for the Consent Agenda. Seeing none, public comment was closed.

Motion by Council Member Barton
Seconded by Council Member Landrum
Approve Consent Agenda Items 7.a through 7.b as submitted.

Ayes (5): Mayor Wixom, Council Member Landrum, Council Member Barton, Council Member Edwards, and Council Member Ford
CARRIED (5 to 0)

7.a Approval of Minutes
Approve as submitted.
a. January 23, 2024 - Regular Council Meeting
b. February 13, 2024 - Regular Council Meeting

7.b Second Quarter Investment Report (period ending December 31, 2023) for Fiscal Year (FY) 2023-24
Receive the attached Second Quarter Investment Report (period ending December 31, 2023) for Fiscal Year 2023-24.

8. PUBLIC HEARING ITEMS

8.a Review and Adopt Final Funding Recommendations for the 2024 Community Development Block Grant (CDBG) Program
https://youtu.be/P8v5mVI5g8M?si=H6pRdKpsjOwXfU06&t=3009 Interim Community Development Director Codron presented the report and responded to Council inquiries.

Mayor Wixom opened public comment for Item 8.a.
https://youtu.be/P8v5mVI5g8M?si=5C_GljW_tWzWVOeD&t=3389  Betty Winholtz, Morro Bay, suggested the City apply independently for CDBG funds at the end of the current 3-year cycle.

End of public comment.

The Council took a brief recess at 6:32 p.m. and reconvened at 6:39 p.m. with all members present.

4 Motion by Council Member Edwards
Seconded by Council Member Ford
Adopt Resolution No. 15-24 approving final funding recommendations for the 2024 Community Development Block Grant (CDBG) funds and forward recommendations to the San Luis Obispo County Board of Supervisors for inclusion with the other final funding requests from the Urban County Consortium. The funding recommendation is for the two applications received from 5 Cities Homeless Coalition and the City Public Works Department along with City program administration of $3,586 for a total 2024 funding allocation of $51,228. Additionally, staff recommends the City Council authorize the City Manager to make pro rata adjustments to the allocation based on the final funding amount from San Luis Obispo County based on the approval of the federal budget and the U.S.

Department of Housing and Urban Development’s (HUD’s) final grant amount to the County.

Ayes (5): Mayor Wixom, Council Member Landrum, Council Member Barton, Council Member Edwards, and Council Member Ford CARRIED (5 to 0)

9. BUSINESS ITEMS

9.a Presentation and Discussion of the Fiscal Year (FY) 2022-23 Annual Comprehensive Financial Report
https://youtu.be/P8v5mVI5g8M?si=h3A9-URta7G3PjsK&t=4125 Interim Assistant City Manager/Admin Services Director Conway introduced Lindsey Zimmerman of Brown Armstrong Accountancy Corporation, who presented the report and responded to Council inquiries.

Mayor Wixom opened public comment for Item 9.a.
https://youtu.be/P8v5mVI5g8M?si=19uuDtWkf4Ixg2Ad&t=4761  Terry Simons, Morro Bay, requested clarification regarding auditing of transient occupancy tax revenues collected by HdL.

End of public comment.

Ms. Zimmerman responded to questions raised during public comment.

Motion by Council Member Landrum
Seconded by Council Member Edwards

1. Receive the FY 2022-23 Annual Comprehensive Financial Report (ACFR) for the period of July 1, 2022 through June 30, 2023 (Attachment 1), and

5 2. Receive FY 2022-23 Annual Streets Report (Attachment 2) and FY 2023-24 Prop 172 Maintenance of Effort Certification (Attachment 3).

Ayes (5): Mayor Wixom, Council Member Landrum, Council Member Barton, Council Member Edwards, and Council Member Ford CARRIED (5 to 0)

9.b Fiscal Year 2023-24 Midyear Budget and Financial Update https://youtu.be/P8v5mVI5g8M?si=JvQPlEPvB5uvri-t&t=5011 Interim Assistant City Manager/Administrative Services Director Conway presented the report and responded to Council inquiries.

Mayor Wixom opened public comment for Item 9.b.
https://youtu.be/P8v5mVI5g8M?si=yL7MqLYI-GCQcQdU&t=6846  Terry Simons, Morro Bay, requested clarification regarding Community Development Department expenses and commented on the Vistra project.
 Nicole Dorfman, Morro Bay, commented on short-term vacation rental compliance issues.
 Betty Winholtz, Morro Bay, urged the City to explore best options to spend down reserves in excess of the required minimum.

End of public comment.

Motion by Council Member Ford
Seconded by Council Member Edwards
Adopt Resolution No. 16-24 authorizing the attached Budget Amendments to the 2023-24 mid-year budget report.

Ayes (5): Mayor Wixom, Council Member Landrum, Council Member Barton, Council Member Edwards, and Council Member Ford CARRIED (5 to 0)

9.c Response to San Luis Obispo County - Offshore Wind Notice of Funding Availability Scope of Work Questionnaire
https://youtu.be/P8v5mVI5g8M?si=BRgeg69l7DP6FzkS&t=7955 Harbor Director Schiafone presented the report and, along with City Manager Kimball, responded to Council inquiries.

Mayor Wixom opened public comment for Item 9.c.

6 https://youtu.be/P8v5mVI5g8M?si=-gsIKPDVJzIj5tS6&t=9676  Rachel Wilson, Cayucos, commented on the importance of protecting the environment.
 Steve Ray, Morro Bay, spoke in support of Measure A-24, an initiative that would allow citizens to decide what they want for the city.
 Terry Simons, Morro Bay, suggested a local ordinance likely would not impact the momentum and authority of the state and federal government and suggested the City focus on the potential revenues.
 Nicole Dorfman, Morro Bay, disagreed with previous speaker and was opposed to offshore wind development.
 Jeff Eckles, Morro Bay, encouraged the City to maintain strong and close relationships with county and state legislators on the issue.  Betty Winholtz, Morro Bay, spoke in favor of the letter submitted to the County.
 Mandy Davis, President of REACT Alliance, offered to present information they've collected regarding offshore wind development.

End of public comment.

Following discussion, there was consensus to add the following comments: Morro Bay distinguishes itself from the other two respondents and strongly needs a study designated to its unique needs, specifically the needs of a full-service city with a tourism-based economy, and potential circulation and parking impacts during special events.

No formal action was taken on this item.

10. COUNCIL DECLARATION OF FUTURE AGENDA ITEMS
https://youtu.be/P8v5mVI5g8M?si=miRx3GpCquSnk4e5&t=12159 Council Member Edwards requested and received support for a general review of Council and advisory board sub-committees, policies related to the formation of sub-committees, scope of work, authority, and Brown Act requirements.

Mayor Wixom requested and received support to have Planning Commission revisit the City's parking credit formula.

11. ADJOURNMENT
The meeting adjourned at 9:08 p.m.

7 /s/ Dana Swanson, City Clerk

Prepared By: ___LS ____ Dept Review: ______
City Manager Review: __YK______ City Attorney Review: __CFN____ Staff Report
TO: Honorable Mayor and City Council DATE: March 4, 2024 FROM: Lori Stilts, Harbor Business Coordinator
SUBJECT: Update to the Harbor Department Rules and Regulations, Section 9, to align with the City’s Skiff Storage Fee established in the City’s Master Fee Schedule

RECOMMENDED ACTION
Adopt Resolution No. 17-24 updating the Harbor Department Rules and Regulations to align with the City’s current adopted Master Fee Schedule for Skiff Storage Fee.

ALTERNATIVES
There are no alternatives being offered.

FISCAL IMPACT
An estimated $12,500 additional annual revenue to the Harbor fund for skiff storage tie-up when the program is fully implemented.

BACKGROUND
On August 4, 2022, Harbor Advisory Board (HAB) was asked to provide feedback regarding implementation of the new Skiff Storage Program. The HAB staff report noted, there are approximately 75 skiffs, dinghies, tenders, rowboats canoes and kayaks (hereinafter “skiffs”) collectively berthed and/or stored at the City-managed facilities of the Beach Street slips, Dunes Street slips, three street-end docks, Tidelands dock and the Launch Ramp slips, with the vast majority of those at Tidelands and Launch Ramp. In addition, approximately 175 more skiffs, (primarily canoes and kayaks) are stored on Oyster Beach.

Due to the extensive amount of time that Harbor Patrol Officers and administrative staff spend policing and managing these skiffs, the costs to repair and maintain those facilities due to skiff user wear and tear, the limited amount of space available for skiffs had become overcrowded and there was no costrecovery method for the Harbor Department to recoup the commensurate costs associated with skiff management. In Fiscal Year 23-24 a new Skiff Storage Fee was established in the Master Fee Schedule. This fee, and a commensurate management program, provides a mechanism for the Department to both recover its management costs while providing an enforceable program by which to manage the limited spaces available for those it was intended to serve.

At that meeting it was noted that the Harbor Department Rules and Regulations would need to be updated to not conflict with the new Skiff Storage Fee being proposed.

AGENDA NO: 7.b
MEETING DATE: March 12, 2024

On April 12, 2023, the new Skiff Storage fee of $100 per year was approved by City Council and adopted on the City’s FY 23-24 Master Fee Schedule.

DISCUSSION
To further implement the program, staff recommends the following language be removed from Section 9. Storage and Securing of Vessels, of the Harbor Department Rules and Regulations as not to conflict with the new Skiff Storage Program fee that is currently on the City’s Master Fee Schedule.

Each City mooring holder may berth one tender or skiff (as defined by the Harbor Department) in this manner at no charge. Other users may store tenders skiffs or dinghies on City docks at designated locations with the prior approval of the Harbor Department at a fee of $1.00 per day.

CONCLUSION
Staff has finalized the skiff storage tie-up policy and agreement and expect full implementation of the skiff storage program for mooring holders using City facilities starting July 1, 2024 along with the $100.00 annual fee. The skiff storage program for Oyster Beach is estimated to be implemented this fall.

ATTACHMENTS

1. Resolution No. 17-24

2. Harbor Rules and Regulations with recommended redline changes.

RESOLUTION NO. 17-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA
RESCINDING AND REPLACING RESOLUTION 53-06 AND

APPROVING CHANGES TO THE HARBOR DEPARTMENT

RULES AND REGULATIONS TO ALLOW
TO ALIGN WITH THE CITY’S SKIFF STORAGE PROGRAM

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 has advocated for new revenue enhancing processes; and
WHEREAS, the Harbor Department has created a new skiff storage tie-up program to increase revenue to cover the cost of the extensive time Harbor Patrol manages skiff storage tie-up on City facilities and provide an enforcement tool; and WHEREAS, the Harbor Advisory Board provided positive feedback to go forward with the program as well the City Council approved the $100.00 annual skiff storage fee adopted on the FY 23-24 master fee schedule; and
WHEREAS, the current Harbor Department Rules and Regulations contains language that directly contradicts the new skiff storage annual fee.

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

1. Resolution No. 53-06 and any parts or sections of any other resolutions in conflict with this Resolution are hereby rescinded and repealed to resolve such conflict; and.

2. The following language be stricken from the Harbor Department Rules and Regulations Section 9 regarding skiff storage, and otherwise the “Harbor Department Rules and Regulations,” attached hereto as Exhibit A and incorporated herein by reference, is adopted by the Council:

Each City mooring holder may berth one tender or skiff (as defined by the Harbor Department) in this manner at no charge. Other users may store tenders skiffs or dinghies on City docks at designated locations with the prior approval of the Harbor Department at a fee of $1.00 per day.

PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on the 12th day of March 2024 on the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:
______________________________
Carla Wixom, Mayor
ATTEST:
_____________________________
Dana Swanson, City Clerk Page 17 of 195
EXHIBIT "A"

CITY OF MORRO BAY - HARBOR DEPARTMENT

RULES AND REGULATIONS

FOR VESSELS USING CITY PIERS, DOCKS AND OFFSHORE MOORINGS ReaAdopted by Resolution NoO. 53-06XX-24

INTRODUCTION
The City of Morro Bay directly operates 2 piers, approximately 50 slips and 70 individual moorings.

The City also provides a floating dock and anchorage area for transient vessels. City-managed individual mooring sites are in the A2, A1-1 and A1-2 mooring areas as shown in the attached map.

The City leases out the A1-3 and A1-4 mooring areas to the Morro Bay Yacht Club and Morro Bay Marina respectively which manage individual mooring assignments in those areas. Most Embarcadero slips and the State Park Marina slips are privately operated with rules and regulations set by the operator. Following are rules and regulations for City-managed facilities and general operation of the Harbor within City limits. The Harbor Department shall mean the Harbor Director, or any designated employee of the City of Morro Bay Harbor Department.

1. MORRO BAY HARBOR DEPARTMENT - GENERAL REGULATIONS
No person shall anchor, moor or secure a vessel or any object within the City of Morro Bay except in designated areas and locations set by the Morro Bay Harbor Department and the Morro Bay Municipal Code. Any vessel or object moored, anchored or secured in violation of this section may be declared a hazard pursuant to California Harbor and Navigations Code Section 523 and shall be relocated to a safe anchorage or berthing location by the Harbor Patrol. The owner will be charged for all costs associated with such relocation and may be subject to impoundment at the fee shown in the Master Fee Schedule. No vessel may exceed 5 MPH speed limit within the Morro Bay City limits with the exception of governmental agencies in the performance of duties. Discharge of sewage is strictly prohibited. No person may liveaboard a non-transient vessel in excess of 4 days without first obtaining a permit as provided for in Morro Bay Municipal Code, Section 15.40.

To use or occupy City docks, City moorings, City Piers, the A1-5 anchorage area or City floating dock a vessel must be registered with the Harbor Department including submission of a signed RENTAL AGREEMENT or transient berthing agreement card.

2. CITY SLIPS
A: General
City slips shall be assigned to commercial fishing vessels as defined in Morro Bay Municipal Code 15.04.150 and Resolution 23-91 of the City of Morro Bay. Rental agreements for use of City slips are not transferable. If a vessel is sold or ceases to qualify for a slip, the agreement is terminated. No city slip agreement holder may allow the use of any city slip by another vessel without the prior permission of the Harbor office. The City may rent any unoccupied slip on a temporary basis.

A commercial fisherman with a qualified commercial fishing vessel, as defined, occupying a City slip may, at the fisherman’s discretion, occupy said slip with a second qualified commercial fishing vessel owned by the fisherman in place of the first vessel provided that said second vessel is of an appropriate size for said slip, and that both vessels remain qualified commercial fishing vessels as defined. This allowance will in no way be used by said fisherman for the purposes of transfer of the slip to a second owner or owners of either vessel in order to bypass the commercial slip waiting list by the second owner or owners. (Resolution 60-13)
Berthing space behind head floats on City slips will be designated as “head float berth” in the City’s Master Fee Schedule and may be assigned to qualified commercial fishing

PAGE 2 of 8
vessels which will be charged at the monthly commercial slip rate. Vessels other than skiffs or qualified commercial fishing vessels desiring to use the “head float berth” will be charged as set forth in the City Master Fee Schedule. This “head float berth rate” may be adjusted annually by the City Council. Head Float Berth spaces will be assigned on a first come, first serve basis with prior approval of the Harbor Department.

B: Waiting List Procedures And Assignment Of Vacant Slips The City has established a Commercial Slip Waiting List with a refundable fee as set forth in the City Master Fee Schedule and a Recreational Slip Waiting List with a refundable fee as set forth in the City Master Fee Schedule. When a slip vacancy occurs, the slip will be assigned to the next eligible vessel on the commercial slip waiting list. It is the responsibility of all waiting listees to keep the Harbor Office informed of current address and contact numbers. If no response is received after two attempts to contact waiting listee at the address and/or phone number on record with the Harbor Office, then the waiting listee will be passed over until such time as they recontact the Harbor Department.

A vessel and the vessel's owner must meet the definition for commercial fishing vessels to be placed on the commercial slip waiting list and must qualify for the year in which they are offered a permanent slip. A vessel owner may substitute a different vessel and maintain the same position on the list up to one time in any three-year period. Anyone on the commercial slip waiting list for more than 5 years will have to re-qualify as a commercial vessel to remain on the list. Failure to re-qualify the vessel will result in removal from the list and a refund of the deposit.

The recreational slip waiting list would be used in the event the City develops new slips for recreational boaters.

C: Temporary Cancellation Of City Slips And Slip Subleasing Any City slip agreement holder may, by giving City notice at the Harbor Office of a pending absence and vacation of the slip in excess of 30 days, have their slip fees reduced to 25% of the regular monthly fees listed in the Master Fee Schedule. If the slip holder returns to the slip in a period less than the 30 days and another vessel is occupying the slip under a sublease, the slip holder will have to dock at the T-Piers as space is available. Vessels on the Commercial Slip Waiting List will have priority for subleases. The City will maintain a slip sublease waiting list and will make the vacated slip available to the next available qualified vessel on the slip sublease waiting list if there is no vessel on the Commercial Slip Waiting List which desires a sublease. If a vessel or person on the sublease waiting list declines a slip sublease assignment or if the City is unable to contact the person after two attempts; then that person's name shall be removed from the waiting list. The City may assign any vessel to a vacated slip on a daily basis at the daily transient fee but no subleases will be allowed for a period less than one month. No vessel will be allowed to use any vacated slip either on a transient daily fee or monthly sublease basis without paying in advance. As long as there are vessels on the sublease waiting list, there will be a 3-month maximum for any one vessel to remain in a sublease slip. If there are no suitable vessels on the sublease waiting list or commercial waiting list, a vessel may remain in a sublease slip in excess of 3 months. If a vessel on temporary cancellation does not occupy the assigned slip for a period of at least 3 months in any 24-month period then the City may terminate the berthing agreement and assign the slip to the next qualified vessel on the commercial slip waiting list.

3. OFFSHORE MOORINGS
A: Moorings - General
Moorings are allowed only in designated locations within the outlined mooring zones or as approved by the Harbor Director and allowed by the Morro Bay Municipal Code. Some mooring locations have tackle and gear owned and installed by the City; most mooring

PAGE 3 of 8
locations have tackle and gear owned and installed by the private party. Each mooring is for one vessel and its associated tender. Floating docks or arrangements other than mooring tackle and gear as outlined and approved by the Harbor Department are prohibited.

Mooring sites A2-0-21A and A1-2-7A were assigned when previous unpermitted floating docks were removed off these moorings. The Harbor Department at its sole discretion shall set maximum vessel size limits for these moorings. Mooring sites A2-0-21A and A1-2-7A are owned by Jim Entwisle and Associated Pacific Constructors respectively and may not be sold, transferred or assigned to new parties. Should Jim Entwisle or Associated Pacific Constructors no longer desire to use mooring sites A2-0-21A or A1 -2-7A then these moorings shall be removed.

Assigned mooring agreement holders must at all times keep the Harbor Department notified of the vessel which is currently using the mooring site.

If an offshore mooring agreement is terminated for non-payment of rent or failure to inspect mooring gear, the City may take possession of the location and any personal property as outlined in Chapter 15 of the Morro Bay Municipal Code. In such case the Harbor Department may either take the mooring location out of service or install City owned mooring tackle and gear on the location.

B: Moorings - Tackle And Gear Privately Owned
Mooring locations where a private party owns the mooring tackle and gear shall be held under a monthly rental agreement. Said agreement may be assigned to another party, subject to approval of the City of Morro Bay, by making written request to the Harbor Department. The City reserves the right of approval of any assignment and may not approve such assignment if the mooring agreement holder or assignee is in violation of these rules and regulations or has a past due account with the City or if the proposed use of the mooring will violate these rules and regulations or the Morro Bay Municipal Code or safe boating practices as determined by the Harbor Director. The rental agreement shall have a month-to-month term and fees shall be set forth in the Master Fee Schedule under Offshore Moorings.

C: Moorings - Tackle And Gear City Owned
The City will rent City owned moorings on a daily or monthly agreement at fees set forth in the Master Fee Schedule under City Owned Moorings. City owned mooring agreements are not assignable or transferable or to be subleased.

The City may set up a waiting list for City moorings with no fee or deposit required. It is the responsibility of the person on the waiting list to provide the City with a current mailing address and phone number at all times. If a phone number is disconnected and/or the mail comes back as undeliverable, the person shall be removed from the waiting list. If a person is offered a mooring and refuses it, they shall be removed from the waiting list.

D: Mooring Tackle And Gear Maintenance
The offshore mooring holder shall maintain the tackle and gear to the specifications set by the Harbor Department including biennial inspections meeting the requirements set by the Chief Harbor Patrol Officer. The City will maintain and inspect City owned moorings.

Moorings leased to the Morro Bay Yacht Club and Morro Bay Marina will be maintained and inspected by those lessees to meet the specifications set by the Harbor Department.

4. T-PIERS, FLOATING DOCK OR ANCHORAGE AREA
The T-Piers, floating dock or anchorage area shall be available to registered transient vessels on a first come first serve daily basis at fees established in the Master Fee Schedule, except that no

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vessel may use the anchorage area or floating dock for more than 30 days in any six-month period.

To maintain safe and efficient Harbor operations, the Harbor Department may relocate vessels or designate specific sites for certain vessels at these facilities at any time.

5. HARBOR DEPARTMENT RESPONSIBILITY TO PROTECT SAFE AND EFFICIENT

OPERATION OF CITY-MANAGED FACILITIES
When a vessel enters a mooring or docking facility or anchorage area in the waters of the City of Morro Bay, it immediately comes under the jurisdiction of the City and may be moored or docked or anchored at the direction of the Harbor Department. The Harbor Department may refuse use of City-managed facilities to any vessel or vessel operator who represents, in the opinion of the Harbor Department, a potential to pollute or that potentially threatens the safety and security of City facilities.

When a vessel or vessel operator, who has been denied use of City facilities, continues to use those facilities without permission, that vessel or vessel operator shall be subject to impoundment under Morro Bay Municipal Code 15.56.010 and/or fines for violation of Section 525 of the Harbor and Navigations Code.

Any vessel using City-managed facilities shall operate under its own power and be seaworthy and maintained in good and safe condition as determined by the Harbor Department. Any vessel that requires Harbor Patrol emergency assistance to pump out, take under tow or otherwise care for the vessel more than once in any 12-month period will be subject to termination of its use of City facilities and/or its berthing agreement.

All vessels at City-managed facilities including piers, moorings, docks and wharves must be operable and seaworthy.

Operable means capable of maneuvering under a vessel’s own power to the Harbor entrance or to an inspection site designated by the Harbor Director and back to its berthing location.

Seaworthy shall mean the vessel’s hull, keel decking, cabin, and mast are structurally sound and generally free from structural rusting, delamination, or dry rot.

If a vessel at any City-managed facility is determined to potentially be not seaworthy or inoperable, at the sole determination of the Harbor Department, then the Harbor Department shall provide the owner of the vessel a 30-day written notice. The notice will either require the owner to prove the vessel is operable as described above, or it may require the owner to prove the vessel is seaworthy by obtaining the opinion of a qualified independent marine surveyor as to the seaworthiness of the vessel at the owner’s expense.

If the vessel owner fails to successfully respond to the notice within the 30-day period, the vessel owner will be granted an additional 120 days to make repairs for seaworthiness or to prove the vessel is operable as defined above.

If after this period of time the vessel cannot successfully complete the required test, the mooring or slip agreement shall be terminated or the vessel will be denied further use of City-managed facilities and the vessel may be subject to citation and impoundment as outlined herein or in Morro Bay Municipal Code, Section 15.56.

6. FEES
Fees for use of City-managed facilities shall be set in the City's Master Fee Schedule. All fees are due and must be paid in advance. The Harbor Department may allow billings for qualified and registered vessels with current account status at the discretion of the Harbor Department.

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Transient fees must be paid in advance provided that the Harbor Department may allow 48 hours after arrival for any vessel to make payment or acceptable arrangements for payment. Transient Vessels not complying with this section within 48 hours of arrival shall be subject to impoundment as specified in Chapter 15, Section 15.56of the Morro Bay Municipal Code.

The City will refund upon request any prepaid unused transient fees in excess of $20. Unused prepaid transient fees of less than $20 may be held as a credit to payee’s account. City slips and moorings will be billed on a monthly basis in advance, will be delinquent and subject to a late payment penalty if not paid by the 10th day of the month, whether the tenant receives a bill or not.

After a City slip or offshore mooring assignment is made and until the mooring or slip agreement is cancelled or assigned with prior approval of the Harbor Department, the agreement holder shall be responsible for payment of all fees whether the agreement holder occupies the slip or mooring or not. All fees will be adjusted annually as set forth in the Master Fee Schedule. Slip fees shall include electricity services but T-Pier fees shall not and the harbor patrol will limit electric service on the piers to those vessels, which pay the daily use fees. The established electric use fee will be for one vessel only and must be paid prior to use.

The Harbor Department may terminate any vessel’s use of City-managed facilities and/or their berthing rental agreement for violation of these requirements or of any other section hereof.

7. DAMAGE TO CITY PROPERTY
Any vessel that causes damage to City property will be responsible for repaying the cost of repair to such damage as determined by the Harbor Department and submitted in a written statement itemizing costs.

8. EMERGENCY MEASURES, CITY HELD HARMLESS
In the event of severe storm or tidal wave, the vessel owner, operator and/or agreement holder will provide preparation and damage prevention protection for their property. The vessel owner or their agent is solely responsible to take all emergency measures possible, and the City does not assume any responsibility for said protection and or damages to the vessel from storm or tidal wave action.

The City assumes no responsibility for the safety of any vessel using City-managed facilities, and will not be liable for fires, theft, loss or damage to said vessel, its equipment, or any property in or on said vessel.

Tenant expressly and by their use of City-managed facilities agrees to hold City and its officers and employees harmless from any claim tenant or any of tenant’s crew, guests or agents have against City for damage to the vessel or other property or for personal injury arising from tenant's use of City property or facilities.

9. STORAGE AND SECURING OF VESSELS
Tenders and skiffs will be stored on board larger vessels when possible and are not allowed at City slips and docks except as designated by the Harbor Department personnel. The water space between the shore and City docks shall be used primarily for the storage of tenders, skiffs or dinghies used to serve vessels occupying moorings in a non-commercial mooring zone. Each City mooring holder may berth one tender or skiff (as defined by the Harbor Department) in this manner at no charge. Other users may store tenders skiffs or dinghies on City docks at designated locations with the prior approval of the Harbor Department at a fee of $1.00 per day. No dock boxes, steps or any other installations may be made to City slips, moorings or other facilities without prior permission from the City. No rafting or storage of more than one vessel on any slip, mooring or anchorage is allowed without the permission of the Harbor Department. Temporary storage of crab or fish receivers may be allowed with the prior written permission of the City. It is the responsibility of each vessel owner or operator to safely secure that vessel to its berthing. Vessels shall be secured in their berths, moorings or anchorage in a manner acceptable to the City or the Harbor Department personnel may adequately secure the vessel and assess a service fee.

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10. FISH UNLOADING OR SALES
Fish may be unloaded off City piers and slips only by the owner or operator of the commercial fishing vessel which caught the fish. Operations including commercial truck loading by fish processors or fish buyers are prohibited from City piers and docks, including the boat launch ramp.

Commercial unloading of any cargo or materials (including kelp) requiring special heavy vehicles (such as crane, boom or stake bed trucks) is prohibited without the prior permission of the Harbor Department. Permission by the Harbor Department may be contingent on provision of an insurance certificate and payment of a fee.

Commercial fishermen may sell their catch only from their vessels at city slips and docks provided they are in conformance with these rules and regulations, State and Federal law, providing that such sales shall not negatively impact the safe or efficient operation of the harbor, at the discretion of the Harbor Department. Signage shall be minimal, and fish sold from vessels must be fish that was caught by the vessel owner.

11. VIOLATIONS OF THE MORRO BAY MUNICIPAL CODE OR OF THE RULES AND

REGULATIONS
Violations of Chapter 15 of the Morro Bay Municipal Code, the Harbor and Navigations Code or these Rules and Regulations are punishable by fines as follows:

1. Violation of MBMC 15.12.010, prohibiting operation of a vessel in excesses of 5 MPH, or in a manner which causes damaging wake within Morro Bay Harbor. $100 first offense, $200 second offense and each offense thereafter.

2. Violation of MBMC 15.24.010, prohibiting discharge of waste or refuse from vessels and prohibiting allowing vessels materials waste or refuse to remain on shorelines within City limits. $200 first offense, $500 second offense and each offense thereafter.

3. Violation of MBMC,15.32.010, establishing rules and regulations for City wharves, piers and docks by resolution of the City Council. Violation of Harbor Rules and Regulations: first offense $100 second offense and each offense thereafter $200.

4. Violation of MBMC 15.40.030, requiring a permit for occupying or owning a liveaboard vessel in Morro Bay Harbor. First offense $100, second offense and each offense thereafter $200.

5. Violation of Harbor and Navigations Code Section 525, prohibiting abandoning a vessel without the facility owner’s permission: $500 first offense, $1500 second offense and each offense thereafter.

For any violation of the Morro Bay Municipal Code or these Rules and Regulations for which a citation is not issued, or for which a vessel is not impounded, the City may provide written notice to tenant to correct such violation. Failure to comply with such written notice may subject the tenant or violator to suspension of future use of City-managed facilities and or termination or cancellation of a mooring or berthing agreement. For example: use of sub standardsub-standard electrical cords or equipment after one warning may result, at a minimum, in suspension from use of City-managed facilities for 30 days.

12. STORAGE AND ELECTRICAL SERVICE
No storage of supplies, materials, accessories, fishing gear or debris will be allowed on piers or slips. No charcoal fires or open fires of any kind will be allowed on any City-managed facility.

Electrical power cords must meet the standards of NFPA and the National Electric Code as determined by the Harbor Department. The Harbor Department may make exceptions during temporary supervised projects. No doubling off a unit is allowed.

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13. OPERATIONS FROM CITY FACILITIES
No sport fishing, tour boat, charter boat or rental business operation shall be conducted from any City slip, pier, street end dock, mooring, anchorage or other City facility or beach except as specifically allowed under a lease or license agreement. Occasional charters for environmental research or commercial fishing research related purposes by qualified commercial fishing vessels in an assigned City slip may be allowed only by prior approval of the Harbor Department and at the Harbor Department’s sole discretion.

14. SOUTH T-PIER HOIST
A. No fish, shellfish or seafood products are to be unloaded with the hoist except in the following cases:

1. All other commercial fish unloading facilities in the Morro Bay area are closed, overloaded, or unable to off-load the boat of the requesting party.

2. That the unloading by one of the commercial unloaders, in the Morro Bay area, would be untimely and cause extreme hardship or loss to the requesting party.

B. A key deposit of $20 or a valid driver's license may be required.

C. A fee set by the Master Fee Schedule shall be by the hour for any part of an hour with a one-hour minimum.

D. No overweight use of the hoist is allowed, and the Harbor Department may refuse use of the hoist to any party for any reason to insure proper safe and efficient use of Harbor facilities.

15. TIDELANDS PARK SIDE TIE DOCK, STREET END DOCKS AND BOAT LAUNCH RAMP The Launch Ramp boarding floats are for temporary tie-up while launching and retrieving a vessel only. The Tidelands Park side tie dock shall be a 3 hour maximum tie up in any 24 hour period facility and may not be used for tie up from 10:00 p.m. through 4:00 a.m.. Vessels which exceed the three hour tie up limit in any 24 hour period, or are tied up to the Tidelands Park side tie dock between the hours of 10:00 p.m. through 4:00 a.m., shall be in violation of these Rules and Regulations and subject to citation and fines as outlined in Section 11 hereof. Tenders and skiffs assigned the inside portion of the Tidelands Park side tie dock under Section 9 hereof shall be exempt from the time limits above.

In an emergency or when all other available facilities are occupied, the City may, at the sole discretion of the Harbor Department, waive the 3-hour time limit on the Tidelands Park side tie dock. In that case, the Harbor Department shall issue a special permit at fees established in the City Master Fee Schedule for a period not to exceed 7 continuous days and said permit shall be displayed in open view on the permitted vessel.

No vehicle shall park or use any parking space in the boat Launch Ramp in excess of 72 hours.

The Harbor Patrol shall monitor and enforce rules and regulation for the boat Launch Ramp parking lot to ensure that it is available for boaters. No storage or haul out is allowed in the Launch Ramp parking lot. Repairs and mechanical work are not allowed in the Launch Ramp parking lot except those minor immediately necessary jobs which will not result in any discharge or disposal of contaminants, as approved by the Harbor Patrol. Double stalls at the boat Launch Ramp are for trailers and towing vehicles only. Single vehicles without trailers attached using the double stalls shall be in violation of these Rules and Regulations. Double stalls shall be painted yellow. Parking time limits and regulations within the parking lot shall be appropriately signed and designated.

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Use of floating docks at the end of Morro Bay Blvd., Harbor St. and Anchor St. and the Launch Ramp shall be limited to transient tie-ups by recreational boats. No overnight tie-ups will be permitted. Maximum duration of tie-ups at these docks shall be for a period not to exceed 3 hours per day. Shore fishing and angling shall not be permitted from the viewing platforms or the floating dock at the ends of Harbor St., Morro Bay Blvd., Marina St. and Anchor St.

The launch ramp docks are for temporary tie-up while launching and retrieving a vessel only. No vehicle shall park or use any parking space in the boat launch ramp in excess of 72 hours. The Harbor Patrol shall monitor and enforce rules and regulations in the boat launch ramp parking lot to ensure it is available for boaters. No storage or haul out is allowed.

16. PRIOR CITY RESOLUTIONS
A. Incorporation of Prior Resolutions:

City of Morro Bay Resolutions #112-89, 23-91 and 60-13 are incorporated into these rules and regulations by reference.

B. Rescinding of Prior City Resolutions:

Adoption of these rules and regulations shall serve to rescind City of Morro Bay Resolutions # 115-67, #30-74, #1-75, #66-78, #85-80, #86-80, #09-81, #27-82, #72-82, #123-82 #124- 82, #19-83, #58-83, #59-83, #60-83, #95-83, #122-83, #8-84, #125-84, #90-85, #61-86, #85-87, #11-89, #76-89, #104-92, #83-97, #115-98, #53-06.

Prepared By:___PN_____ Department Review: _GK_______
City Manager Review:__YK_____ City Attorney Review: _LNL_______

Staff Report
TO: Honorable Mayor and City Council DATE: February 16, 2024

FROM: Greg Kwolek, Public Works Director
Pamela Newman, Associate Engineer
SUBJECT: Ministerial approval of Parcel Map MB 22-0025 (3230 Beachcomber) and Acceptance of 5’ Public Sewer Utility Easement

RECOMMENDED ACTION
Adopt Resolution No. 18-24 ministerially approving finality of proposed Parcel Map MB 22- 0025 (which was previously approved by Planning Commission under the designation of Tentative Parcel Map PAR22-02) with a 5’ public utility easement.

ALTERNATIVES
The City Council can only deny the final approval of the Parcel Map if it is not found in substantial conformance with the Planning Commission approved Tentative Map; otherwise, approval of the proposed Parcel Map is ministerial and must be approved. Denial of the Parcel Map is not recommended as the City Engineer has found the Parcel Map to be in substantial conformance. The primary reason this Parcel Map is coming to City Council is for the approval of the relocation of the 5’ public sewer easement.

FISCAL IMPACT
There is no fiscal impact to this action.

BACKGROUND/ DISCUSSION
The project owner proposed the demolition of an existing circa 1954 single-family home on 3230 Beachcomber Drive with 1,600 square feet of living space and a 400 square foot subterranean garage to allow the three underlying parcels to be reconfigured into two parcels with two new single-family homes (the “Project”). A Parcel Map is required for the Project to reconfigure the parcels into two parcels and to relocate an existing public sewer easement from the northern lot to in between the two new parcels.

The proposed Project consists of two new single-family homes. The first home is to be located at 3202 Beachcomber Drive, bordered by Beachcomber Drive on the west and Orcas Street to the south. It consists of 1,600 sf of living space and a 400 sf subterranean garage. The second home is to be located at 3230 Beachcomber Drive, bordered by Beachcomber Drive on the west and Panay Street on the north. It consists of 1,684 sf living space, an 801 sf roof deck and a 403 sf garage on a new 5,118 sf site.

AGENDA NO: 7.c
MEETING DATE: March 12, 2024

On January 3, 2022, the Planning Commission approved the Tentative Map (PAR22-02) and the Coastal Development Permit (CDP21-014) for 3202 Beachcomber Drive with Resolution No. PC 01-23 and the Coastal Development Permit (CDP21-04) for 3230 Beachcomber Drive with Resolution No. PC 02-23. The Tentative Map PAR22-02 will be recorded under the designation of Parcel Map MB22-0025.

Approval of a tentative map and a parcel map is a “ministerial act”, pursuant to the California Subdivision Map Act (Government Code Section 66474.1), once the map is found to be in substantial conformance:
“66474.1. A legislative body shall not deny approval of a final or parcel map if it has previously approved a tentative map for the proposed subdivision and if it finds that the final or parcel map is in substantial compliance with the previously approved tentative map.”
This proposed Parcel Map has met all the City regulations and no further discretionary approvals are required. City Engineer has reviewed and confirmed the Parcel Map is in substantial compliance with the approved Tentative Map based on the parcel boundary dimensions, existing utility locations, vegetation and structures to be removed, the 5’ public sewer easement relocation, and the noted removal and replacement of the existing 6” sewer main pipeline. Thus, the primary reason this Parcel Map is coming to City Council for approval is for the approval of the relocation of the 5’ public sewer easement.

The purpose for the above referenced easement relocation is to allow the property owner the ability to remove the existing public sewer mainline on the northern lot and install a new 8” public sewer mainline in between the two new parcels to create two lots that met the 5,000 sf minimum lot size requirement. Additionally, the relocation of the public sewer easement requires the applicant to install a new 8” public sewer mainline (approximately 124 linear feet) from the neighboring property line at the east to the manhole located on the westside of Beachcomber Drive.

CONCLUSION
Staff recommends the City Council approve proposed Parcel Map MB 22-0025 by Resolution No. 18-24.

ATTACHMENTS

1. Parcel Map MB 22-0025

2. Coastal Development Permit (CDP21-014) and Tentative Parcel Map (PAR22-02) with conditions and plans

3. Coastal Development Permit (CDP21-024) with conditions and plans

4. Resolution No. 18-24

PARCEL MAP MB 22-0025 §

BEACHCOMBER DRIVE ORCAS STREET PANAY STREET PARCEL 1 PARCEL 2 PARCEL MAP MB 22-0025

TIDE AVENUE

RESOLUTION NO. 18-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA,
APPROVING THE PARCEL MAP MB22-0044 AND ACCEPTANCE OF

RELOCATED EASEMENT

T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, on January 3, 2023 the Planning Commission did hold a public hearing, received public testimony, and after closing the public hearing fully considered the various issues surrounding the case; and
WHEREAS, the Planning Commission did approve the Tentative Parcel Map (PAR22- 02) and Coastal Development Permit (CDP21-014), and associated development applications, subject to certain Conditions of Approval. The Tentative Parcel Map PAR22-02 will be recorded under the designation of Parcel Map MB22-0025; and
WHEREAS, the Planning Commission has previously made findings required by the California Environmental Quality Act (CEQA) and the City of Morro Bay procedures for implementation of CEQA; and
WHEREAS the applicant has since satisfied all Conditions of Approval and requests permission to record the Parcel Map; and
WHEREAS, the recordation of the Parcel Map is a ministerial act pursuant to the City of Morro Bay Subdivision Ordinance and California Subdivision Map Act as the City Engineer has reviewed and confirmed the Parcel Map is in substantial compliance with the approved tentative map pursuant to Government Code Section 66474.1; and
WHEREAS, recordation of the Parcel Map further requires City Council approval of the relocation of a 5’ public sewer easement as shown in the plans and approvals attendant to Tentative Parcel Map (PAR22-02) and Parcel Map (MB22-0025).

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Morro Bay, California, that the City hereby approves Parcel Map MB22-0025 as being in substantial conformance pursuant to Government Code Section 66474.1, and approves the relocation of a 5’ public sewer easement as shown in the plans and approvals attendant to Tentative Parcel Map (PAR22-02) ) and Parcel Map (MB22-0025).

PASSED AND ADOPTED by the City Council of the City of Morro Bay, California, at a regular meeting held on the 12th day of March 2024 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:

CARLA WIXOM, Mayor
ATTEST:

DANA SWANSON, City Clerk

Prepared By: _YK _______ Dept Review: ______
City Manager Review: __ YK______ City Attorney Review: ______ Staff Report
TO: Honorable Mayor and City Council DATE: March 6, 2024 FROM: Yvonne Kimball, City Manager
SUBJECT: Report on attendance at the 2024 C-MANC Washington Week Meetings

RECOMMENDED ACTION
Receive and file.

ALTERNATIVES
None

FISCAL IMPACT
None.

BACKGROUND/DISCUSSION
The Council authorized the attendance at the 2024 C-MANC Washington Week meetings. Three members of city officials were approved to attend. The attendance is largely funded by the Central Coast Joint Cable Fisheries Liaison Committee.

C-MANC annually hosts Washington Week meetings, where representatives of California Ports and Harbors have the opportunity to remind Congress and various other agencies of the importance of dredging projects, commercial fishing, ocean and coastal management and other coastal-related issues in California. The City of Morro Bay is a long-standing member of C-MANC, and for over 25 years has sent representatives to the “Washington Week” meetings.

While in DC, city representatives usually engage with city’s federal lobbyist to advocate city’s distinct interest. This includes addressing critical concerns such as harbor dredging, seawall repair, pier maintenance, water reclamation along with other infrastructure needs. Additionally, discussions often extend to broader Morro Bay interests with national implications including the protection of marine lives, the perseverance of the MB National Estuary, and our partnership with local tribes.

Mayor Wixom, Mayor Pro-temp Landrum and City Manager Kimball represented the City in 2024’s DC week. Enclosed includes:
 a post meeting report outlining three days filled with meetings and actions,  meeting schedules
 briefing paper (which were used in every meeting attended)  funding requests submitted to Senator Padilla, Senator Butler and Congressman Carbajal
AGENDA NO: 7.d
MEETING DATE: March 12, 2024

Staff recommends Council receive and file the above reports. This delegation would like to express appreciation to the Joint Cable Fisheries Liaison Committee for the grant funding, to Harbor and city hall administrative staff for applying for the grant and coordinating travel details, to the Public Works Director and the Habor Director for compiling the briefing paper, attending meetings remotely and follow-ups to ensure funding. The Delegation would have not been able to have a productive trip without these dedicated staff do what they do.

ATTACHMENT(S)

1. post meeting report

2. meeting schedules

3. briefing paper

4. Funding Requests

2024 DC Meeting Report
Prepared by Yvonne Kimball
Meeting Dates: February 12 to 16, 2024
City Delegation: Mayor Carla Wixom, Mayor Pro Tempore Landrum, City Manager Yvonne Kimball
Purposes:

Participate in CMANC meetings at DC – It’s a 25-year tradition that CMANC members travel to DC connecting to meet with federal agencies and advocate for California’s harbors and ports; while in DC, Morro Bay delegation also coordinates with city’s federal lobbyist to advocate for City specific interests, including:

Harbor needs and interest - continued funding for dredging, T-pier and other infrastructure, Morro Bay commercial fisheries, marine lives, estuary, sanctuary
Infrastructure needs in light of storm damages focusing on revetment and seawall repairs
Update on Offshore Wind activities at Morro Bay, community feedback, and city’s needs for capacity to evaluate environmental, technical and social economic impacts
Update on WRF as the project received federal grants and loans.

Meeting Summaries and Highlights:

Tuesday, February 13

1. Meeting with Carissa Bunge, Policy Advisor on Environment and Public Land; Matthew Ceja, Policy Advisor for Energy, Transportation and Climate Office of Laphonza Bulter, US Senator
This was a meeting jointly scheduled by CMANC lobbyist (Carpi & Clay) and city’s lobbyist (The Fergurson Group). This meeting met both CMANC goals and city’s needs. We discussed the need for continued earmark support to harbor dredging and funding to repair T-pier.

Understanding Senator Bulter is leaving the Senate seat upon completion of this term, we

wanted to ensure that earmark dollars will be supported by her office as it has been critical for California harbors, including Morro Bay.

We also discussed the uniqueness of Morro Bay, including being a small working harbor for commercial fishermen, national estuary being one of the few in the nation, harbor infrastructure that needs repair after storm damages. We pointed out that the US Coast Guard is stationed in our harbor, which would help Morro Bay securing funding for dredging. Given their roles and expertise, it was appropriate to touch upon the potential OSW initiative impacts on the community, harbor and our fishery industry. They appeared to be surprised by Morro Bay’s close connection to OSW innovation. Additionally, Mr. Caje came from Cayucos and was familiar with city’s culture. He asked about the WRF project and we gave an update. Mr. Caje told us that his colleague had enjoyed a visit to Morro Bay’s harbor and the new wastewater reclamation plant.

The meeting ended by Ms. Bunge and her colleagues expressing their commitment to continue supporting earmark funds for needed projects, like dredging and other things that we had brought up. They also indicated that they were aware that fisheries were not supportive of floating OSW.

2. Meeting with US Army Corps of Engineers, South Pacific Division This was a meeting jointly scheduled by CMANC lobbyist and city’s lobbyist. Meeting discussions met both CMANC goals and city’s needs. We discussed the need for harbor dredging and funding to repair T-pier, and revetment.

Regarding dredging, we received money from previous years. The back bay dredging is delayed due to steelhead salmon migration from Chorro Creak. Army Corps of Engineers along with other agencies are tracking the salmons and other endangered spices. The dredging is delayed to late 2024 and hopefully contract will be awarded in 2025. Given many steps of a dredging operation, mobilization logistics and cost are considerations that could further delay process.

We also asked ACE about Morro Bay harbor’s revetment and seawall repairs following last year’s extensive storm damages. We pointed out that the infrastructure continues to deteriorate.

Revetment was originally built by Army Corps of Engineers. US Coast Guard is still stationed in Morro Bay. SPD division administrator Susan Lucus shared that if the seawall was built 50 years ago or before, to rebuilt or repair could qualify for a large project which could qualify for federal funding with a 25% to 35% local matching. Our lobbyist said he would follow up on that information.

3. Meeting with Director Elizabeth Klein, Bureau of Ocean Energy Management This meeting was arranged by city’s lobbyist, focusing on harbor health, environmental issues and OSW initiative. We talked about marine life management, protecting fishery interest, BOEM’s sanctuary designation process. BOEM acknowledged that there is no other city like Morro Bay in terms of our location and being a host of floating OSW initiatives. Three

leaseholders have gained leases off Morro Bay’s coast. BOEM director said that they were cautious of next steps in the central coast and mindful of lessons learned from the east coast.

We talked about the need for early stakeholder engagement in Morro Bay. BOEM said Department of Energy and NOAA are also regulatory agencies. They acknowledged that MB should have some help to navigate the OSW innovation activities. However, they have no funding to share. But they will keep Morro Bay posted in their stakeholder engagement efforts.

Later that week, I met with two reps from BOEM at a CMANC function. They both are assigned to Morro Bay wind areas. One has reached out.

Wednesday, February 14

1. With Cong. Carbajal
We met Cong. Carbajal at his office. His Deputy Chief of Staff / Legislative Director Joanna Montiel joined us. We thanked him for earmark funding for dredging and T-pier repairs. We talked about possible revetment repair as a large project and relayed what learned from the Army Corps of Engineers the day before. He asked his staff to follow up. He understood that FEMA process is not effective for small agencies.

We also let him know that the commercial fishermen are very concerned of the floating OSW at this point. Cong. Carbajal was very aware of Morro Bay’s uniqueness, including US coast guard presence, our native heritage, estuary and our commercial fishing history. He pointed out that the Sanctury discussion is still unresolved at NOAA. City’s need for capacity to respond to OSW needs was brought up. Cong. Carbajal advised us to continue to ask SLO County and the State to help and use available “civic tools” to let county and state know that Morro Bay community needs to be engaged and city needs resources to do so. His SLO office followed up this week.

2. Meeting with Bureau of Reclamation, Assistant Deputy commissioner Mathew Moucieri, Senior Counselor John Watts, and CGB Liaison Ankur Bhattacharya We followed the same priority list. John Watts was the Chief of Staff for late Senator Dianne Feinstein. Senator Feinstein was supportive of harbor’s dredging and T-pier fund. So we took time to thank Mr. Watts for that funding and remember his long-time boss.

Bureau of Reclamation provided funding for the city’s WRF project. We gave them an update on WRF. Public Works Director, Greg Kwolek, joined the meeting remotely. Bureau of Rec staff indicated that they believe city’s WRF is a good project and let us know about a new funding.

Nothing to follow up at this time.

3. Meeting with EPA WIFIA staff Lesile Temple
This meeting was for updating WRF project. Greg joined remotely to provide an update that the project moves along to final closure. Ms. Temple visited site before and has been in very close contact with the MB team. She said the low interest loan would not change regardless of any future complications. I stated that the project is a huge project and with any mega project,

this one could run into complicated close-out. She acknowledged that it is a very expensive project for a small community like Morro Bay. She also said the loan interest rate MB received is so low that it was unheard of; the same low interest rate is no longer available. She also indicated that her office is interested in collaborating with city of MB to work up a success story article to showcase the project. Her office has reached out to Greg for news articles.

4. Evening CMANC social event
We met CMANC staff, CMANC lobbyists, and conference attendees. I learned that Ventura Harbor has real estate lease operation. They operate it in house with an excel spreadsheet to track lease progresses. They have a larger number of leases than us. They acknowledge that their system needs improvement but not sure there is money to do so efficiently. It sounded like Morro Bay.

I also spoke to a few folks about OSW and impacts on their ports. In general, other ports seemed to covet Morro Bay’s location as the hub and focal point for floating OSW. Once we explained our uniqueness, including commercial fishing, native heritage, marine life, etc., they seemed to understand Morro Bay’s complication; some offered to assist.

Thursday, February 15
CMANC
The CMANC delegation visited a total of 17 US representative and senator offices. My group visited 9 offices to speak to staffers except for the meeting with Cong. Kevin Mullin (CA-16). See the attached schedule (Group Red). Our messages were consistent – keeping federal earmark money for dredging, advocating for fisheries, and asking for funding flexibility for small harbors, like Morro Bay. The group also touched upon OSW and its impacts on the communities and fisheries. CMANC’s advocacy voice was unified despite the differences among all ports, including sizes, budgets, purposes and culture. Port of Los Angels, Port of Long Beach, and Port of San Deigo are major ports, but they understand the importance of Morro Bay harbor, and include our special interest in the advocacy message.

During our visits to the Capitol, we also visited the offices of Cong. Rob Wittman from Virginia and Cong. Chellie Pingree from Maine respectively. Apparently, they have either jointly introduced or were supportive of a bill called “Keep America’s waterfronts working Act” or H.R. 6641, which intended to protect fishermen’s interests. This bill has gained national attention.

CMANC wanted to express its support. Fishermen on the east coast and Morro Bay share commonalities.

CMANC has a message that big and small ports rely on each other. Port of LA, Port of Long Beach and Port San Diego need Morro Bay Harbor because no one port can do it all. CMANC connects small and large ports to advance a set of collective interests in federal funding and polices. I learned that in other states, the harbors and ports are the state dept of transportation’s responsibilities. But in California Caltrans does not handle ports and harbors,

resulting in alliance efforts like CMANC. In addition to traditional dredging fund, CMANC’s other area of focus include infrastructure funding, energy independence, aquaculture, fishing and recreation.

It was interesting to hear others’ perspectives and their daily challenges. For example, the County of Los Angels Community Development handles beaches in LA county. Their ocean front projects and operation are much larger in scale than ours, but facing similar frustrations, such as dealing with the coastal commission, and the difficulties of retaining employees. The City of Morro Bay has been a CMANC member for 25 years. CMANC administrator and lobbyist said they enjoyed working with Morro Bay, and offered to be a continued resource for us.

Attachments:

Briefings and handouts
Schedules

CALIFORNIA MARINE AFFAIRS AND NAVIGATION CONFERENCE
February 14th & 15th, 2024

Wednesday, February 14
th: Agency Day (all meetings at 601 New Jersey Ave NW, Floor 4) 8:15 am Conference Room Open
For elevator access, call/text Clay Bryan – (267) 280-6129 8:30 – 9:00 am Breakfast
9:00 – 9:45 am Day One Briefing
10:00 – 11:00 am Deputy Director Walter Cruickshank
Bureau of Ocean Energy Management (BOEM)
[email protected], (907) 334-5324
11:00 am – 2:00 pm Meet with U.S. Army Corps of Engineers (USACE) Attendees:
 Eddie Belk, Director of Civil Works
 TAB Brown, Chief of Program Integration
 Tom Smith, Chief of Operations and Regulatory Division  Jase Ousley, Dredging Program Manager
 Sarah Moore, Environmental Planner
 Susan Lucas, Deputy Chief of South Pacific Division RIT  Julia Harvey, Senior Program Manager, SPD-RIT
Agenda:
 Around the horn with CMANC Members
 Annual O&M funding for navigation
 Contracting
 Beneficial Use of Dredged Material
 Hearing from USACE Leadership about USACE priorities/initiatives 3:00 – 4:00 pm Wade Morefield, Infrastructure Development Program Manager Office of Port Infrastructure Development, Maritime Administration (MARAD) U.S. Department of Transportation
[email protected], (202) 366-8921
4:00 – 4:30 pm Day Two Briefing
5:00 pm Meetings Conclude
Important Phone Numbers
Jim Haussener (925) 828-6215 (Text)
Julie Minerva Cell (202) 361-5564
Clay Bryan Cell (267) 280-6129
Wifi: 4th-Floor-Conf-Ctr; Password: Polinger

Thursday, February 15th: Hill Day (all meetings on Capitol Hill) 9:30 – 10:00 am Nick Melcher, Staff Assistant
Representative Ted Lieu (CA-36)
2454 Rayburn House Office Building
[email protected], (202) 225-3976
10:00 – 10:30 am Representative Grace Napolitano (CA-31) 1610 Longworth House Office Building
POC: Melvin Sanchez, Scheduler and Legislative Aide
[email protected], (202) 225-5256
10:00 – 10:30 am Elise Sugarman, Legislative Director
Office of Representative Pete Aguilar (CA-33)
108 Cannon House Office Building
[email protected], (202) 225-3201
11:00 – 11:30 am Matt Dernoga, Legislative Director
Office of Representative Nanette Barragán (CA-44)
2312 Rayburn House Office Building
[email protected], (202) 225-8220
11:00 – 11:30 am Representative John Garamendi (CA-8)
2004 Rayburn House Office Building
POC: Ashley Therien, Scheduler
[email protected], (202) 225-1880
11:30 – 11:50 am Kara Verma, Senior Legislative Assistant Office of Representative Josh Harder (CA-9)
209 Cannon House Office Building
[email protected], (202) 225-4540
11:30 am – 12:00 pm Matthew Ceja, Policy Advisor for Energy, Transportation, and Climate Office of Senator Laphonza Butler
112 Hart Senate Office Building
[email protected], (202) 341-2300
12:00 – 12:30 pm Andrew Bower, Legislative Director
Office of Representative Robert Garcia (CA-42)
1305 Longworth House Office Building
[email protected], (202) 225-7924
1:00 – 1:30 pm William Ahlquist, Legislative Assistant
Office of Representative John Duarte (CA-13)
1535 Longworth House Office Building
[email protected], (202) 225-1947
1:00 – 1:30 pm Will Sroka, Legislative Director*
Office of Representative Rob Wittman (VA-1)
2055 Rayburn House Office Building
[email protected], (202) 225-4261
*H.R. 6641, Keep America’s Waterfronts Working Act
Group 1 – Jim
Group 2 – Todd
Senate Group - Julie
Elevator Access to Tunnels
 Cannon – B
 Longworth – B
 Rayburn – SB

1:30 – 2:00 pm Lisa Pahel, Policy Advisor*
Office of Representative Chellie Pingree (ME-1)
2354 Rayburn House Office Building
POC: Karen Sudbay, Scheduler
[email protected], (202) 225-6116
*H.R. 6641, Keep America’s Waterfronts Working Act
1:30 – 2:00 pm Representative Julia Brownley (CA-26)
2662 Rayburn House Office Building
POC: Cole Brown, Director of Scheduling
[email protected], (202) 225-5811
2:00 – 2:30 pm Angela Ebiner, Policy Advisor^
Office of Senator Alex Padilla
331 Hart Senate Office Building
[email protected], (202) 515-6375
^10-person limit for reserved conference room
2:30 – 3:00 pm Eric Henshall, Legislative Director
Office of Representative Anna Eshoo (CA-16)
272 Cannon House Office Building
POC: Caroline O’Connor, Scheduler
[email protected], (202) 225-8104
3:00 – 3:30 pm Representative Jared Huffman (CA-2)^
2445 Rayburn House Office Building
POC: Julia Diamond, Director of Operations
[email protected], (202) 225-5161
^7-person limit for meeting
3:00 – 3:30 pm Representative Kevin Mullin (CA-15)
1404 Longworth House Office Building
POC: Stephanie Perera, Executive Assistant
[email protected], (202) 225-3531
4:00 – 4:30 pm Representative Doug LaMalfa (CA-1)
408 Cannon House Office Building
POC: Savannah Coughlin, Scheduler
[email protected], (202) 225-3076
5:00 pm Meetings Conclude
5:30 – 7:30 pm 65th Golden State Reception
Transportation & Infrastructure Committee Room
2167 Rayburn House Office Building

Meetings Schedule
DRAFT 3 – 2.7.2024
City of Morro Bay, CA (Yotel, 415 New Jersey Ave. NW,
Washington, DC 20001
Congressional and Agency Meetings – Washington, DC
February 13-14, 2024
Tuesday, February 13th
10:00 AM Meeting with Carissa Bunge, Office of Laphonza Butler Location: Hart 112
Contact: Carissa Bunge – 202.224.3841
CMANC lead; City recap MB location; Unsure earmark, combined CMANC & City (T-pier; dredging of harbor);
1:00 PM Meeting with U.S. Army Corps of Engineers, South Pacific Division RIT Location: 414 G Street NW, Washington, DC
Contact: Veronica Botts Bell – 202.761.4814
Seawalls, revetment
2:30 PM Meeting with Director Elizabeth Klein
Bureau of Ocean Energy Management
Location: 1849 C Street NW, Washington, DC (DOI Main Building) Contact: Jennafer Foreman – 907.334.5324
OSW funding

Morro Bay - Congressional/Agency Meetings – February 2024 2 Wednesday, February 14th
10:30 AM Meeting with Rep. Salud Carbajal (CA-24)
Location: Rayburn 2331
Contact: Ruth Vazquez – 202.225.3601
Funding for T-pier; seawall due to storm;
1:30 PM Meeting with Bureau of Reclamation
Asst. Deputy Commissioner Mathew Maucieri, Senior Counselor John Watts, & CGB Liaison Ankur Bhattacharya
Location: 1849 C Street NW, Washington, DC (DOI Main Building) Contact: Natasha Smith – 202.513.0570
Continue to build relationships, John Watts (senior counsel to late Daine Feinstein / John offer to write support letter)
4:00 PM Meeting with WIFIA Staff, Leslie Temple
Location: 1200 Pennsylvania Ave NW, Washington, DC
Contact: Leslie Temple – 202.564.4734
Thanks for funding, remote link available

Morro Bay - Congressional/Agency Meetings – February 2024 3 Pending
TBD Meeting with White House Intergovernmental
Location: TBD
Contact: TBD
___________________________________________________________________________ Attendees:
 Mayor Carla Wixom
 Yvonne Kimball, City Manager
 Ted Schiafone, Harbor Director
 Mike Miller, TFG – cell: 707.287.0023
 Chris Cummins, TFG – cell: 202.256.5537
Contact: Alex Strizak at [email protected] Or cell: 202-765-4993

Mayor: Carla Wixom
City Manager: Yvonne Kimball
Harbor Director: Ted Schiafone
Public Works Director: Greg Kwolek
February 2024
Morro Bay Harbor Needs
Dredging. The Yaquina (Army Corps of Engineers) comes every year to the Morro Bay Harbor in April to dredge the inlet. This dredge is critically important to the U.S. Coast Guard, California State Fish and Wildlife, Morro Bay Harbor Patrol, commercial fishing, and recreational boating. In 2023 the Harbor received an $14.4M appropriation to dredge the inlet through the back channel in 2024. That dredge is pending permits. If permits are not received in time, those funds should be carried into future years to ensure that portion of the back channel is clear to navigation. Morro Bay Harbor needs to see that $4M is available every April to ensure the inlet remains open to navigation. • The City is requesting $4,000,000 for annual dredging • Contact: Julie Minerva, Carpi & Clay, 202.822.8300

Mayor: Carla Wixom
City Manager: Yvonne Kimball
Harbor Director: Ted Schiafone
Public Works Director: Greg Kwolek
February 2024
Offshore Wind
The Biden Administration identified the “Morro Bay 399” area in the ocean off Morro Bay to support floating offshore wind energy. Three OSW companies have obtained leases to develop here. Our community has been thrust into the planning and development of this project just 30 miles off our coast. To protect the interests of our community, while supporting the greater federal goals of reaching 30GW of clean energy by 2030, Morro Bay must be funded annually for expert personnel focused on environmental, legal, and technical issues. Without annual federal funding, the City’s ability to direct resources to this critical planning activity will be severely limited. While the City remains a critical partner of OSW, we are concerned about how it will affect our fishing industry, our local economy, and our quality of life. The City needs to ensure proper and adequate mitigations are in place prior to any surveys and development. It is vital that the lease holders or auction winners meaningfully engage with Morro Bay in the community benefit agreement and mitigation process.
• The City is requesting a minimum of $500,000 annually to support City efforts to research, conduct analysis, training, outreach, legal and environmental reviews as related to the Offshore Wind Development.
• Contact: Mike Miller, The Ferguson Group, 707.287.0023

Mayor: Carla Wixom
City Manager: Yvonne Kimball
Harbor Director: Ted Schiafone
Public Works Director: Greg Kwolek
February 2024
North T-Pier Project. Morro Bay Harbor’s North T-Pier needs major safety improvements, repairs, and renovations to remain viable. The T-Pier serves the U.S. Coast Guard, commercial fishing, City Harbor Patrol, California Fish and Wildlife, and likely will support offshore wind in the future. The City received $1.5M in CPF/CDS for its North T-Pier Project.

In order to release funding the City had an above water assessment performed by a qualified engineering firm. It was determined critical above water structural repairs will be necessary to ensure continued safe operation of the Pier. Due to the significant costs to mobilize/de-mobilize for this repair, other safety repairs to electric supply and fire suppression cannot be completed with the available funding. A follow up below water assessment was performed to inform a complete plan to refurbish and rebuild the North TPier. That assessment identified all the structural pilings and piers that must be replaced.

While $1.5M will be available to repair the above water structure, it will not be sufficient to update the electrical and fire safety issues or the remaining below water piers and pilings.

The consulting engineer’s assessment determined an additional $7M will be necessary. • The City is requesting $7,000,000 in CPF/CDS funding to complete funding of the full North T-Pier project.
• Contact: Mike Miller, The Ferguson Group, 707.287.0023

Mayor: Carla Wixom
City Manager: Yvonne Kimball
Harbor Director: Ted Schiafone
Public Works Director: Greg Kwolek
February 2024
National Estuary Program. Morro Bay is home to one of the 28 National Estuary Programs in the US. Morro Bay Estuary encompasses 2,300 acres. The National Estuary Program was created by Congress in the 1987 amendments to the Clean Water Act. In addition to supporting local wildlife, estuaries have impacts on global ecosystems and climate. The Morro Bay estuary provides an ideal habitat for many animal species, ranging from sea slugs to sea otters, and endemic species. The calm, shallow waters provide food, nursery, and breeding grounds for many animals throughout the year. Morro Bay is also an important stopover for migratory animals such as birds and monarch butterflies.

With the importance of our bay’s ecological and environmental health and the great work the Morro Bay National Estuary Program and the Bay Foundation do to support and enhance those things, support for continued federal funding of our nation’s National Estuary Programs is always a priority.

Fisheries. The City remains interested in how the proposed Chumash Heritage National Marine Sanctuary (CHNMS) will potentially impact commercial and recreational fisheries and fishers. Also, of great concern to the commercial fishing industry is how the proposed offshore wind (OSW) power generation farms will affect fisheries and fishers. The City’s initial comments regarding fisheries and the sanctuary were provided to NOAA in January of 2022 and again in October 2023. The City of Morro Bay identified the following concerns:

A. The Chumash Heritage Marine Sanctuary indicates there are no new regulations proposed on commercial fishing. It is noted that future new regulations are not excluded. While it appears the Sanctuary does not have any direct jurisdiction on fishing regulations, they can recommend regulations that have direct or indirect influence on commercial fishing.

B. The Sanctuary adds another layer of governance over the activities that would occur in the designated coastal area. Staff has concluded if the proposed

Mayor: Carla Wixom
City Manager: Yvonne Kimball
Harbor Director: Ted Schiafone
Public Works Director: Greg Kwolek
February 2024
Sanctuary includes the Morro Bay dredge disposal site, it is possible that the site will be grandfathered in its use. It appears that any request to increase the size of the dredge disposal site or any new dredge site location would require the additional approval of the Sanctuary. The revised location of the proposed Sanctuary has been modified to exclude the Harbor entrance and location of possible cables that could connect offshore wind turbines to the power grid.

C. NOAA has developed a 60-page draft management plan. The plan calls for the implementation of a Sanctuary Advisory Council. The City of Morro Bay requested to be included in the Advisory Council.

Contact: Mike Miller, The Ferguson Group, 707.287.0023

Mayor: Carla Wixom
City Manager: Yvonne Kimball
Harbor Director: Ted Schiafone
Public Works Director: Greg Kwolek
February 2024
Storm Damage and High Surf/ King Tide Damage.

A federal major disaster was declared for San Luis Obispo County in January and March 2023 (which includes the City of Morro Bay) due to successive atmospheric river events that brought significant rainfall, massive swells, and flooding. An additional king tide/ high surf and storm events in December 2023 caused more damage but was not declared a federal disaster. The high surf events combined with past storms worsened the existing extensive damage to our Harbor infrastructure (docks, seawalls, revetments, etc.) and other City infrastructure (storm drains, vehicles, equipment, roads, City facilities, etc.), as well as damage to private homes and businesses. The City has been seeking funding for eligible costs through FEMA, however, it appears no reimbursements are going to be provided. This infrastructure protects roadways, parking, and public access to our beaches, waterways, and the businesses that support our economy.

While the City does not have an exact estimate on the project costs, typical revetments repairs cost $3,000 per linear foot. Estimating the linear foot of number of damaged revetments, a minimum of $4,000,000 to $5,000,000 is likely to be needed for repairs to this critical infrastructure of the Harbor.
• The City is seeking $1,000,000 to evaluate alternative improvements as it relates to revetments and seawalls, and $5,000,000 to repair infrastructure including hardening our infrastructure and preparing for sea level rise to ensure continued economic viability of the Harbor, commercial fishing, and support future offshore wind.
• Contact: Mike Miller, The Ferguson Group, 707.287.0023

Mayor: Carla Wixom
City Manager: Yvonne Kimball
Harbor Director: Ted Schiafone
Public Works Director: Greg Kwolek
February 2024

Mayor: Carla Wixom
City Manager: Yvonne Kimball
Harbor Director: Ted Schiafone
Public Works Director: Greg Kwolek
February 2024
ARMY CORPS OF ENGINEERS – Harbor Infrastructure Repair & Improvements • Morro Bay requests clarity on agency responsibility to maintain ocean jetties and harbor revetments and seawalls in Morro Bay
• Morro Bay requests development of an ocean jetty, harbor revetment, and harbor seawall implementation plan performed by the Army Corps of Engineers The extreme weather events of January 2023 caused significant damage to the Harbor’s rock revetments and seawall. While the damage has not been repaired, late 2023’s king tide/ high surf events further eroded the revetments and seawalls. These rock revetments and sea walls are necessary components to our Harbors existence and must be hardened for future weather events. Revetment on the northern side of Morro Rock protects the parking lot and beach had displaced downward and scattered causing erosion along the parking lot that supports transient visitor parking. Damage also exists along the south side of the Morro Rock Causeway and adjacent harbor beach causing potential erosion and affecting future access via pedestrian and vehicles. Damage and erosion is also identified along the path to Coleman Park Kayak Beach creating possible future closure. Another damaged area is a section of revetment by Beach Street that was previously stabilized with gunite. This area has now been undermined by wave action and has sluffed down toward the Harbor basin. Finally, a seawall by Tidelands Park was heavily damage and unrepairable. This section of sea wall will need to be replaced.

Project Financing and Request
While the City does not have an exact estimate on the project costs, typical revetments repairs cost $3,000 per linear foot. Estimating the linear foot of number of damaged revetments, we are looking at a minimum of $4,000,000 to $5,000,000 for repairs to this critical Harbor infrastructure.

Project Summary –
• The Army Corps of
Engineers built the ocean
jetties, harbor revetments,
and seawalls in Morro Bay
• These facilities have been
damaged in the past year
by extreme storm events in
early 2023 and king
tide/high surf events in winter 2023-24

Mayor: Carla Wixom
City Manager: Yvonne Kimball
Harbor Director: Ted Schiafone
Public Works Director: Greg Kwolek
February 2024
• Large boulders of the revetments have been dislodged during these environmental events exposing the harbor and public infrastructure to imminent risk and potential failure if not addressed
Why this Project?
• The jetties, revetments, and
seawalls are necessary to protect
Morro Bay Harbor from erosion
and future extreme
environmental events
• City of Morro Bay has neither the
expertise nor the resources to
properly protect the harbor
• The Morro Bay harbor includes a
federal coast guard station,
businesses, and represents
$40,000,000 of local economic
activity annually
Contact: Mike Miller, The Ferguson Group, 707.287.0023

Mayor: Carla Wixom
City Manager: Yvonne Kimball
Harbor Director: Ted Schiafone
Public Works Director: Greg Kwolek
February 2024
Water Reclamation Facility (WRF) Project
The $160M WRF project has
moved our new water
reclamation facility away from
coastal hazards, treating affluent
to modern standards, and will
have the capability to provide a
drought buffer in the future for
our community through the
innovative indirect potable reuse
portion of the project.
• The City has received a
$9.3M grant from the Bureau of Reclamation. The City is working with the Bureau to ensure it can make full use of the grant.
• The City also received a $61M low-interest WIFIA loan from the U.S. EPA. The City is working with WIFIA staff to extend the project completion date for the agreement and clarify regulatory oversight.

Prepared By: ___LS Dept Review: __ _
City Manager Review: __YK______ City Attorney Review: __CFN____ Staff Report
TO: Honorable Mayor and City Council DATE: March 4, 2024 FROM: Lori Stilts, Harbor Business Coordinator
SUBJECT: Adoption of Resolution No. 19-24 Approving a New Lease Agreement with Van Beurden Investments Lease site 78-81/78W-81W, Dutchman’s Seafood House, 701 Embarcadero.

RECOMMENDED ACTION
Adopt Resolution No. 19-24, approving 29-year Master Lease Agreement with Van Beurden Investments for lease site 78-81/78W-81W, Dutchman’s Seafood House.

ALTERNATIVES
The City Council can elect to not approve the lease agreement as proposed and/or can propose changes, and direct staff accordingly.

FISCAL IMPACT
Annual Minimum rent is set at the current rate of $107,712.53 and will continue at this rate with yearly CPI adjustments until their next appraisal in 2028.

BACKGROUND
In October, 2020 the Council approved a Consent of Landowner (COL) to Van Beurden Investments for their proposal to redevelop a portion of Lease Site 78-81/78W-81W. For various reasons, the project fell behind schedule and the COL has expired by its own terms. Reasons include delays from Coastal Commission, reworking of plans, and pandemic related delays. Nevertheless, and while proceeding in good faith, according to the Van Beurden’s, the project costs doubled.

On January 4, 2023 an amended CDP was approved for the Van Beurden Harborwalk Improvements.

On March 7, 2023 a CUP (major modification) was approved by the City for additional public access enhancements and modifications to the approved new Harborwalk public access. Essentially the new project will construct a new Harborwalk access, demo and reconfigure the wharf, retain the commercial fishing use, replace the fish crane, and various other public access improvements. This project will fill in an important gap connection of the Harborwalk and which is a City goal to have a continuous Harborwalk.

Staff brought lease negotiations to City Council in closed session, back in 2022, 2023 and February 2024, providing todays open session report.

AGENDA NO: 7.e
MEETING DATE: March 12, 2024

DISCUSSION
Lease Site 78-81/78W-81W is one of the City’s top Embarcadero lease site revenue-generators. I have had the pleasure to work with the Van Beurden’s since 2010 and can attest to their commitment to punctual rent payments and commitment in keeping their retail spaces occupied, which showcases financial responsibility and reliability. Moreover, they are dedicated to maintaining their leased property and keeps their public restroom up during business hours, and have created a welcoming destination, creating a positive ripple effect on the city’s reputation as a tourist-friendly locale.

Staff is proposing the attached new Master Lease Agreement containing the following highlights:

Van Beurden’s current Master Lease with the City expires in December of 2032, essentially this new lease would provide the Van Beurden’s with an additional 20 years.

The proposed new Master Lease requires the construction of a new Harborwalk access (behind the 715 building with the removal of the rear patio), wharf demolition and reconfiguration, retention of commercial fishing use, replacement of the fish crane, and several other public access improvements.

With an estimated cost of $700,000. The City-approved permit number for this project is MAJ22-002.

Notably the project will play a significant role in connecting the Harborwalk from Marina Square to Rose’s Landing, which is a win for the City in having the continuous Harborwalk for public/tourist use.

New performance deadlines are as follows:

A. Obtain Building Permits for the Project no later than April 1, 2024.

B. Commence construction of the Project no later than June 30, 2024.

C. Completion of construction of all components of the Project no later than March 31, 2025. Completion shall mean when the Project is entitled to be issued a final Certificate of Occupancy
The performance deadlines in the Master Lease replace the COL deadlines executed on January 15, 2020.

The proposed lease follows the Harbor Lease Management policy standards and current lease form, with negotiated language to match their current lease rent calculation format. Annual rent will be set at their current rate which is $107,712.53. This rent calculation is derived from a recent lease site appraisal performed this year in 2023. The rate was calculated from 75% of the average of the last 5 years’ total rent. As in the current lease, there will be the standard CPI increase for the next five year until the next appraisal in 2028.

CONCLUSION
The Van Beurden’s have in good faith continue to move forward with their project even though a lease agreement has not been in place. Staff, therefore, recommend approval of Resolution No. 19-24 and this new Master Lease Agreement with the Van Beurden’s to memorialize their commitment to the site.

ATTACHMENTS

1. Resolution No. 19-24

2. New Master Lease Agreement for Lease Site 78-81/78W-81W

RESOLUTION NO. 19-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA
APPROVING A 29-YEAR MASTER LEASE AGREEMENT FOR
LEASE SITE 78-81/78W-81W BETWEEN THE CITY OF MORRO BAY AND VAN BEURDEN INVESTMENTS, DUTCHMAN’S SEAFOOD HOUSE,
LOCATED AT 701 EMBARCADERO

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, Van Beurden Investments (“Tenants”) have been the lessee of Lease Site 78-81/78W-81W since 1992, and are tenants in good standing; and WHEREAS, on March 7, 2023, Tenants were approved for a major modification to their CUP for additional public access enhancements and modifications to the approved new Harborwalk public access, demo and reconfigure the wharf, retain the commercial fishing use, replace the fish crane, and various other public access improvements; and WHEREAS, Tenants obtained all necessary approvals from the Planning Commission and City Council for their proposed redevelopment project and are ready to obtain their building permit to completed the improvements; and WHEREAS, in accordance with the City’s Master Lease Policy, the City and Tenants have agreed to a new 29-year lease agreement for Lease Site 78-81/78W-81W located at 701 Embarcadero.

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

1. The attached new Master Lease Agreement for Lease Site 78-81/78W81W is hereby approved.

2. The Mayor is hereby authorized to execute said Master Lease Agreement.

PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on the 12th day of March 2024 on the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:
______________________________
Carla Wixom, Mayor
ATTEST:

Dana Swanson, City Clerk

L E A S E
This LEASE is made and entered into by and between the CITY OF MORRO BAY, a municipal corporation of the State of California herein called CITY, and Van Beurden Investments, a California general partnership, herein called TENANT. (CITY and TENANT, at times, are referred to herein individually as Party and collectively as Parties)

WITNESSETH
WHEREAS, the State of California granted certain tide and submerged lands located within the CITY limits of CITY to the County of San Luis Obispo and to its successors, being Chapter 1076, Statutes of 1947, as amended by Chapter 413, Statutes of 1955, Chapter 1874, Statutes of 1957, and Chapter 70, Statutes of 1960, first extraordinary session; which Statutes may be amended from time to time by the Legislature of the State of California; all of which Statutes are expressly recognized and agreed to be in full force and effect by the Parties; and WHEREAS, the Parties hereto recognize and agree, on July 17, 1964, CITY succeeded to all of the right, title and interest of the County of San Luis Obispo in and to all of the tide and submerged lands conveyed to said County by the State of California pursuant to the above mentioned acts; and
WHEREAS, judgment has been entered on October 14, 1968, in the case of City of Morro Bay, Plaintiff, versus County of San Luis Obispo, and State of California, Defendants, by the Superior Court of the State of California in and for the County of San Luis Obispo, #30417, adjudging and decreeing, among other things, the title to said tide and submerged lands so conveyed by the State of California to the County of San Luis Obispo in trust, as set forth above, passed automatically to CITY upon the date of its incorporation as a city on the 17th day of July, 1964; and
WHEREAS, TENANT accepts the within Lease with full knowledge there is no warranty of title in and to the within described premises by CITY to TENANT; and WHEREAS, in order to develop and improve Morro Bay Harbor and to assist in carrying out the provisions of the tideland grant as aforesaid, and in order to provide facilities for the accommodation of those using Morro Bay Harbor, CITY desires to lease to TENANT the within described property upon the terms and conditions set forth herein;

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NOW, THEREFORE, in consideration of the covenants to be performed and the rental to be paid by TENANT to CITY, CITY leases to TENANT, and TENANT leases from CITY, all of the following premises (herein collectively referred to as the "Premises") in the CITY of Morro Bay, County of San Luis Obispo, State of California, described as follows:

Lease Site 78-81/78W-81W
This Premises is delineated on Parcel Map of the CITY of Morro Bay No. 68-30, which map was recorded on October 10, 1968, in Book 3, Page 10 of Parcel Maps in the Office of the County Recorder, San Luis Obispo County, California. A copy of said Map is attached hereto as Exhibit A and made a part hereof by reference.

Article 1 FIXED TERM
Section 1.01 Term.

The term of this Lease is a period of 29 years, commencing July 1, 2023 (the "Commencement Date"). The term of this Lease will terminate without notice on June 30, 2052, unless sooner terminated as herein provided.

Section 1.02 No Extensions.

The term of this Lease will not be extended, nor will this Lease be renewed. Requests for continued use of the Premises will be treated as an application for a new lease and will require appropriate application to the CITY with all required supporting information and documents, CITY Council approval and the execution of a new CITY lease, containing the then most current terms, covenants, conditions and rent schedules.

Section 1.03 Hold Over.

If TENANT holds the Premises after the expiration of the term of this Lease with the consent of the CITY, express or implied, then such holding over (in the absence of a written agreement between CITY and TENANT with respect thereto) will be deemed to create a tenancy from month-to-month, terminable on 30-days’ written notice from either Party to the other, at a monthly rental equal to two hundred percent (200%) of the average total Rent per month for the twelve (12) months immediately preceding the expiration of this Lease, and otherwise subject to each and every term, covenant and condition of this Lease.

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Section 1.04 Replacement.

Subject to the next paragraph, as of the Commencement Date, this Lease will extinguish and replace every prior lease between CITY and TENANT respecting the Premises, if any. Any right or interest held by the TENANT pursuant to any existing lease with respect to the Premises, which is not granted pursuant to this Lease, will be extinguished as of the Commencement Date of this Lease.

If on or before May 1, 2024, TENANT does not provide satisfactory evidence, as approved by CITY’S Harbor Director and City Attorney, TENANT has committed all the financing necessary to commence and complete the Project (as defined in Article 13), then (i) this Lease will automatically terminate, without any notice to TENANT, and be of no force and effect and (ii) the lease between CITY and TENANT for the Premises that was in effect prior to this Lease, if any, will be automatically reinstituted and remain in full force and effect subject to all of that lease’s terms and conditions.

Article 2 RENT
Section 2.01 Annual Minimum Rent.

TENANT agrees to pay to CITY a minimum guaranteed annual rental for the use and occupancy of the Premises, in an initial amount of $107,712.53 per year (the "Minimum Rent"), payable in advance and at the option of TENANT either in equal semiannual installments or equal monthly instalments. If paid in equal semiannual installments, then such installments must be on January 1 and July 1 each year during the term of the Lease. If the Commencement Date is other than January 1 or July 1, then TENANT must pay, on the Commencement Date, the proportionate amount of the Minimum Rent payable for the period from the Commencement Date until the next payment date of January 1 or July 1, as the case may be. If the term of the Lease expires on a date other than December 31 or June 30, then TENANT'S final installment of Minimum Rent must be proportionate to the time remaining in the term. If paid in equal monthly installments, then each\ monthly installment must be paid no later than the tenth day of each applicable month. All Rent, including the Minimum Rent and the Percentage Rent, must be paid in lawful money of the United States of America, without offset or deduction and must be paid to CITY at City Hall located at 595 Harbor Street, Morro Bay, California, or at such other place or places CITY may from time to time designate by written notice delivered to TENANT.

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Section 2.02 CPI Adjustment to Annual Minimum Rent.
(1) The Parties agree, as of every July 1 following the Commencement Date (each, a "CPI Adjustment Date"), except as outlined in section 2.03 hereof, the annual Minimum Rent will be adjusted in direct proportion to any upward or downward movement in the Consumer Price Index for January 1, 2023, which is hereby agreed to be 318.591 (Base Index). The percentage adjustment for any given year will be based on the monthly average Index for the calendar year immediately preceding the CPI Adjustment Date as compared with the Base Index.

The Consumer Price Index referred to herein is the Consumer Price Index (all items indexes, all urban consumers) for Los Angeles – Long Beach – Anaheim, California, compiled and published by the United States Department of Labor, Bureau of Labor Statistics, 1982-84 Base Year = 100 (the "Index")
(2) The Annual Minimum Rent will be adjusted as of each CPI Adjustment Date and will remain in effect as adjusted until the next CPI Adjustment Date. As an illustration only, if the Base Index (Jan. 1, 1999 CPI) is 166.1 and the monthly average CPI for 2000 is 171.6, then the percentage increase is equal to 3.31%. Therefore, the Minimum Rent would be increased by

3.31% as of July 1, 2001, and would continue at that rate through June 30, 2002. (3) If the United States Department of Labor, Bureau of Labor Statistics, ceases to compile and make public the Index as now constituted and issued, but substitutes another index in its place, then said substituted index must be used for the purpose of adjusting the Minimum Rent for the Premises. If the Index is changed so the base year differs from that in effect on the Lease Commencement Date, then the Index must be converted in accordance with the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics.

Section 2.03 Calculation of New Minimum Rent.

At the end of the initial five years and of each five-year period thereafter, a new Minimum Rent will be calculated for the following five-year period (each, a "Subsequent Rental Period") as follows:

A. The Minimum Rent will be subject to adjustment by appraisal as of the fifth anniversary of the Commencement Date and every five years thereafter (each, an "Appraisal Adjustment Date"). CITY, at its own cost and expense, will retain an independent qualified appraiser for determination of the fair market value of the Premises. Not more than nine months prior to each Appraisal Adjustment Date, CITY will provide written notice to TENANT of the pending appraisal and the appraiser selected by the CITY to determine the fair market value of the Premises, excluding fixtures and improvements, unless such are expressly included in the

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description of the leasehold interest created by this Lease. If TENANT does not reject CITY's appraiser in writing and within thirty days after CITY's notice of its determination, then the Minimum Rent for the Subsequent Rental Period will be in the amount determined by CITY as outlined in this Section 2.03. If TENANT rejects CITY's appraiser within 30 days following CITY's notice to TENANT, then within 15 days after such 30-day period, each Party, at its own cost, will select an independent professionally designated appraiser who is a member of the American Institute of Real Estate Appraisers, or the Society of Real Estate Appraisers with a designation of MAI (Member of American Institute), SRPA (Senior Real Estate Analysis), to appraise the fair market value of the Premises. CITY may rely on its original appraisal, or select a new appraiser, at its cost. If a Party does not appoint an appraiser within 15 days after the other Party has given notice of the name of its appraiser, then the single appraiser appointed will be the sole appraiser. Each appraiser will conduct an independent appraisal within 30 days after appointment. If the Parties are unable to agree on the Minimum Rent for the Subsequent Rental Period within 30 days after receiving the appraisal(s), then each Party will select one member of a three-member committee. The two so selected members will select the third member, and this committee will, by majority vote, select one or the other of the appraisals. The Minimum Rent determined on the basis of the selected appraisal will be final and binding and all costs associated with the three-member committee will be paid equally by CITY and TENANT.

B. In the event the appraisal process is not concluded on or before the Appraisal Adjustment Date, the Minimum Rent will be adjusted retroactively to such Appraisal Adjustment Date as set out hereinbelow when said appraisal process is completed.

C. The total Rent payable, including both the Minimum Rent and the Percentage Rent for each year within the applicable previous five-year period, will be averaged to produce the average annual total Rent payable for such previous period.

D. The new Minimum Rent for the five-year period commencing on each Appraisal Adjustment Date shall be the greater amount of seventy-five percent (75%) of the average of the total yearly Rent payable during the previous five-year period (as set out in paragraph C. above) or eight percent (8%) of the fair market value of the Premises (as established in paragraph A. above.) The new Minimum Rent shall be divided by two to determine the semiannual payments and shall be paid by TENANT to CITY on the first of each January and July thereafter. This new Minimum Rent shall be adjusted each following year in proportion to any increase in the Consumer Price Index as set out in Section 2.02 of this Lease. The Base index shall be adjusted upon each calculation of new Minimum rent as set out in this section so that the Base index for CPI adjustment shall be the Consumer Price index for January 1 of the year of the calculation of the New Minimum Rent.

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Section 2.04 Percentage Rent.

A. In addition to the Minimum Rent, TENANT agrees to pay to CITY, at the time and in the manner hereinafter specified, as additional Rent for the use and occupancy of the Premises, a sum equal to the following for all TENANT'S Gross Sales as hereinafter defined: as shown on Exhibit B, less the amount of the Minimum Rent paid pursuant to this Lease (the "Percentage Rent").

B. The term "Gross Sales," as used herein, means (subject to the exceptions and authorized deductions as hereinafter set forth), the total selling price and the total gross amount received by TENANT from all rentals, merchandise sold and services rendered in, on or from the Premises by TENANT, its sublessees, licensees, or concessionaires, both for cash and on credit including, but not limited to, rentals of dockage space, leasing and servicing operations and ticket sales, and if on credit whether or not payment be actually made therefore, all charges for services, alterations or repairs made in or upon the Premises; the gross amount received by TENANT for merchandise sold pursuant to orders received in the Premises, though filled elsewhere; and the gross amount received by TENANT from any and all other sources of income derived from the business conducted upon the Premises.

C. Notwithstanding the other provisions of Section 2.04, the term "Gross Sales" does not include the following items, and such items may be deducted from Gross Sales to the extent they have been included therein or have been included in a prior computation of Gross Sales or for which a Percentage Rent has been paid under this Lease to CITY:
(1) Credits and refunds made to customers for merchandise returned or exchanged; (2) Any sales or excise taxes otherwise includable in Gross Sales as defined in this Section because such taxes are part of the total selling price of merchandise or services rendered in, from, or on the Premises, where TENANT must account for and remit the taxes to the government entity or entities by which they are imposed; and (3) With respect to credit card sales, fees retained or withheld by the issuer and/or merchant bank pursuant to TENANT'S credit card acceptance agreement, and (4) Rental payments to TENANT from sublessees whose total gross sales are included in gross sales computations.

D. 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 CITY 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

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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 CITY, CITY'S auditor, or other authorized representative or agent of CITY, if necessary. TENANT consents to the release of sales tax information to CITY and on demand will furnish to CITY a copy of the sales tax reports, quarterly reports and any audit reports of sales for confidential internal use of the CITY in determining Gross Sales for TENANT. TENANT consents and authorizes CITY to request such information directly from the State Board of Equalization or other state agency with which sales tax information is filed.

E. By July 31 of each year, TENANT must furnish CITY 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 CITY the amount of the Percentage Rent, which is due to CITY 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 CITY with a copy of said audit without cost or expense to CITY. CITY may, once in any twelve-month period, cause an audit of the business of TENANT to be made by a certified public accountant or CITY personnel of CITY'S own selection. TENANT must, upon receiving written notice of CITY'S desire for such an audit, deliver and make available all such books, records and cash register tapes to the certified public accountant or CITY personnel selected by CITY.

Furthermore, TENANT must promptly, on demand, reimburse CITY 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 CITY'S request discloses TENANT understated Gross Sales by less than 5 percent, the cost of such audit will be paid by CITY. 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, CITY 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 CITY, together with interest at the Default Rate thereon, from the date the Percentage Rent was payable until the date paid.

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F. CITY 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 CITY to check the accuracy of any such statement or statements, TENANT must, for said period of five years after submission to CITY 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 CITY for examination.

Section 2.05 Reimbursements.

If TENANT fails to perform any term or covenant of this Lease, then CITY may, but is not obligated to, perform such term or covenant, and TENANT must reimburse CITY therefore as additional Rent hereunder. As an illustration and not as a limitation, if TENANT fails to procure the insurance required by this Lease, then CITY may, but is not obligated to, obtain such insurance, with the cost of the premiums being due to CITY upon demand as additional Rent.

Section 2.06 Penalty and Interest.
(1) If any Rent is not received within ten days following the date on which the Rent first became due, then TENANT must pay a late penalty of ten percent of the amount of the Rent in addition to the Rent.
(2) In addition to the penalty, TENANT must pay interest at the rate of one percent per month or fraction thereof or the maximum amount permitted by law as of the date this Lease is signed, whichever is greater (the "Default Rate"), on the amount of the Rent, exclusive of the penalty, from the date on which Rent first became delinquent until paid. The term "Rent" includes any sums advanced by the CITY and any unpaid amounts due from TENANT to the CITY.

Article 3 USE OF PREMISES
Section 3.01 Permitted Uses.

The Premises must, during the term of this Lease, be used for the purpose of operating and conducting thereon and therein the uses permitted by, and in compliance with, Conditional Use Permit No MAJ20-004 / CUP07-91 or any other use permits approved by CITY in its governmental capacity, as they may be amended from time to time, and for no other purpose. At the Commencement Date, such uses include restaurant, retail, bar, vessel accommodation).

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Section 3.02 Unauthorized Use.

TENANT agrees to allow only those uses authorized in Section 3.01, hereinabove and any unauthorized use thereof constitutes a breach of this Lease and may, at the option of CITY, terminate this Lease.

Section 3.03 Operation of Business - Hours of Operation.

Failure to actively and diligently conduct the business authorized herein constitutes a breach of this Lease and may, at the option of CITY, terminate this Lease. (1) TENANT must, during the term of this Lease, conduct business of the nature specified in Section 3.01 of this Lease on the Premises in an efficient and diligent manner and keep the Premises open for the conduct of business continuously and without interruption for at least six hours each day of the year, except one day each week and legal holidays. This provision does not apply if the Premises is closed and the business of TENANT is temporarily shut down for a period not to exceed 14 calendar days in any calendar year to make necessary repairs, maintenance or other construction deemed necessary by TENANT. This provision does not apply if the Premises is closed and the business of TENANT is temporarily shut down as authorized or required by the City Manager or on account of strikes, walkouts, or causes beyond the control of TENANT or for not more than three days out of respect to the memory of an officer, employee, or close relative of any officer or employee of TENANT. (2) TENANT must operate TENANT'S business on the Premises with due diligence and efficiency and in like manner as comparable businesses operated in CITY or the coastal area of San Luis Obispo County, so as to produce the maximum amount of Gross Sales and gross receipts from services, which may be produced from TENANT'S business; and TENANT at all times must carry on Premises, a stock or merchandise of such size, character, and quality as is reasonable, designed to produce the maximum return to TENANT, when the sale of merchandise is a permitted use under this Lease.

Section 3.04 Competition.

During the term of this Lease, TENANT must not directly nor indirectly acquire or establish any similar or competing business within a radius of five miles from the location of the Premises; provided, however, that TENANT may, with prior written approval from CITY, own or operate more than one business, whether or not competing and similar, along the Embarcadero upon one or more CITY lease sites. The purpose of this section is to prevent and prohibit TENANT from reducing revenue to CITY by diverting business from the operation at the

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Premises to another similar business owned by TENANT within the CITY, but not upon a CITY lease site from which CITY is paid rent based on Gross Sales.

Section 3.05 Environmental Considerations and Hazardous Materials. (1) TENANT must, at all times, comply with applicable environmental regulations, including, where applicable and practical, government- and industry-adopted environmental best management practices and programs.
(2) TENANT must not transport, use, store, maintain, generate, dispose, release, treat or discharge any "Hazardous Material" (as defined below) upon or about the Premises (such activities being hereafter referred to as "Hazardous Materials Activities"), nor permit TENANT'S employees, agents, or contractors to engage in Hazardous Materials Activities upon or about the Premises, except as allowed by applicable law. The term "Hazardous Material" for purposes hereof means any chemical, substance, material or waste or component thereof which is now or hereafter listed, defined or regulated as a hazardous or toxic chemical, substance, material or waste or component thereof by any federal, state or local governing or regulatory body having jurisdiction, or which would trigger any employee or community "right-to-know" requirements adopted by any such body. All Hazardous Materials Activities at the Premises must be conducted strictly in accordance with all applicable laws and regulations. If TENANT transports, or has transported, any hazardous waste from the Premises, then such transportation must be done only by a contractor duly licensed to haul hazardous waste and only a duly licensed site approved by TENANT'S liability insurer must be used for disposal of that hazardous waste.
(3) TENANT must promptly notify CITY of: (i) any enforcement, cleanup or other regulatory action taken or threatened by any governmental or regulatory authority with respect to the presence of any Hazardous Material on the Premises or the migration thereof from or to other property, (ii) any demands or claims made or threatened by any party against TENANT or the Premises relating to any loss or injury resulting from any Hazardous Material on or from the Premises, and (iii) any matters where TENANT is required by applicable law to give a notice to any governmental or regulatory authority respecting any Hazardous Material on the Premises.

CITY has the right (but not the obligation) to inspect the Premises, to take such remedial action on the Premises, as CITY may deem appropriate, and to join and participate, as a party, in any legal proceedings or actions affecting the Premises initiated in connection with any environmental, health or safety law.

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(4) If any Hazardous Material is released, discharged or disposed of by TENANT or its employees, agents or contractors, on or about the Premises in violation of the foregoing provisions, TENANT must immediately notify CITY. CITY may elect either to take such remedial action as CITY deems appropriate, in which event TENANT must reimburse CITY for all costs thereof within ten days after demand, or direct TENANT to perform such remediation.

If CITY directs TENANT to perform the remediation, then TENANT must immediately take such remedial action, as CITY directs. TENANT must, properly and in compliance with applicable laws, clean up and remove the Hazardous Material from the Premises and any other affected property at TENANT'S expense. If CITY directs TENANT to perform remediation hereunder and if TENANT fails to comply with the provisions of this Section within five days after written notice by CITY, or such shorter time as may be required by applicable law or in order to minimize any hazard to persons or property, then CITY may (but is not be obligated to) arrange for such compliance directly or as TENANT'S agent through contractors or other parties selected by CITY at TENANT'S expense (without limiting CITY'S other remedies under this Lease or applicable law).

Section 3.06 Tidelands Trust.

In addition to the obligations set forth in this Article, TENANT must use and occupy the Premises in strict compliance with the Tidelands Trust purposes, as established by law or interpretation of the California State Lands Commission.

Section 3.07 Compliance with Law.

TENANT must, at no cost to CITY, comply with all of the requirements of all local, municipal, county, state and federal authorities now in force, or which may hereafter be in force, pertaining to the Premises, and faithfully observe in the use of the Premises all local, municipal and county rules, regulations and ordinances and state and federal statutes, rules, regulations and orders now in force or which may hereafter be in force (collectively, "Legal Requirements"); provided, that TENANT will not be required to comply with any Legal Requirement imposed by CITY that would substantially deprive TENANT of a material benefit under this Lease, unless such Legal Requirement has been imposed or required (i)_ by a county, state or federal authority or (ii) to preserve public health and safety and applied to similar businesses within CITY’S jurisdiction.. The judgment of any court of competent jurisdiction, or the admission of TENANT in any action or proceeding against TENANT, whether CITY be a party thereto or not, that TENANT has violated any such Legal Requirement in the use of the Premises will be conclusive of that fact as between CITY and TENANT.

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Section 3.08 Waste or Nuisance.

TENANT must not commit or permit the commission by others of any waste on the Premises; TENANT must not maintain, commit, or permit the maintenance or commission of any nuisance as defined by law on the Premises; and TENANT must not use or permit the use of the Premises for any unlawful purpose.

Section 3.09 Use by CITY.
(1) Subject to TENANT's rights hereunder to possession of the Premises, CITY may grant licenses to, or otherwise authorize, other persons and entities permitting uses of the Morro Bay Harbor.
(2) CITY also retains and reserves for itself, its successors and assigns, all oil, gas, petroleum and other mineral or hydrocarbon substances in and under the lands leased hereby together with right to prospect and extract all such substances.

Article 4 CONSTRUCTION, ALTERATION AND REPAIRS
Section 4.01 Construction Approval.
(1) TENANT must not make or permit any other person to make any alterations or structural additions or structural modifications to the Premises or to any structure thereon or facility appurtenant thereto if the cost thereof exceeds Ten Thousand Dollars ($10,000), without the prior written consent of CITY. The consent to be obtained pursuant to this Section 4.01(1) must be requested from the Harbor Director, or the City’s designee, for CITY. If the Harbor Director or any future successor to the duties of the City’s Harbor Director, or the City’s designee, gives such consent to proceed, then it is understood such consent is given by CITY only in its capacity as the landlord under this Lease and not as the permit-issuing authority.

TENANT remains obligated to obtain any needed building permits and comply with all applicable land use entitlement processes.
(2) Where required by the Morro Bay Municipal Code, California Coastal Act, Corps of Engineers or any other state or federal agency having authority over the proposed project, then all Conditional Use Permits, Concept Plans, Precise Plans, Coastal Development Plans, and any other required plans or permits must be applied for and approved prior to any construction, alteration or repairs.

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Section 4.02 Construction Bond.
(1) Prior to the commencement of any construction the cost of which is greater than the amount of One Hundred Thousand Dollars ($100,000), TENANT must file, with CITY’S City Clerk, a final detailed Civil Engineer's, Registered Architect's or Licensed and Bonded General Contractor's estimate of the cost of construction and installation of improvements on the Premises. Said estimate must be submitted to CITY’S City Engineer for approval. TENANT must file with the City Clerk a faithful performance bond, in a form and issued by a corporate surety company satisfactory to CITY, in an amount satisfactory to CITY, but not in excess of 100% of the final detailed cost estimate, securing the faithful performance of TENANT or its contractor in the completion of said construction.
(2) TENANT must also file with the City Clerk a labor and materials bond, in a form and issued by a corporate surety company satisfactory to CITY, in an amount satisfactory to CITY, but not in excess of 100% of the final detailed cost estimate, securing the payment of all claims for the performance of labor or services on, or the furnishing of materials for, the performance of said construction.
(3) In lieu of the above referenced bonds, TENANT may post cash deposits or may make other mutually satisfactory arrangements to guarantee the completion of construction projects.

In the event the contractor bonds the project, CITY may be named as additional indemnitee to comply with these requirements.

Section 4.03 Mechanics' Liens.

At all times during the term of this Lease, TENANT must keep the Premises and all buildings, installations and other improvements now or hereafter located on the Premises free and clear of all liens and claims of liens for labor, services, materials, supplies, or equipment performed on or furnished to the Premises. TENANT further agrees to, at all times, save CITY free and harmless and indemnify and defend CITY against all claims for labor or materials in connection with any improvement, repairs, or alterations on the Premises, and the cost of defending against such claims, including reasonable attorneys' fees. If TENANT fails to pay and discharge or cause the Premises to be released from such liens or claim of liens within 10 days after the filing of such lien or levy, then TENANT must, upon written notification, immediately deposit with CITY a bond conditioned for payment in full of all claims on which said lien or levy has been filed. Such bond must be acknowledged by TENANT as principal and by a company or corporation, licensed by the Insurance Commissioner of the State of California to transact the business of a fidelity and surety insurance company as surety. The beneficiary of any security instrument, which instrument is on record with CITY, must have the right to file a claim for

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payment from such a bond on behalf of TENANT. CITY has the right to post and keep posted on the Premises notices of non-responsibility and any other notices that may be provided by law or which CITY may deem proper for the protection of CITY and Premises from such liens.

TENANT must give CITY notice at least 20 days prior to commencement of any work on the Premises to afford CITY the opportunity to post such notices.

Section 4.04 Ownership of Improvements.

The Parties agree CITY has the option and right to require TENANT to remove all buildings, structures, installations, improvements of any kind or other property belonging to or placed upon the Premises by TENANT at the termination of this Lease, however occurring, providing CITY gives notice, in writing, no later than thirty days prior to the termination of this Lease, of its decision to require such improvements be removed. The Parties agree, if CITY exercises its option, then at the termination of this Lease, however occurring, TENANT will have sixty days thereafter to remove all buildings, structures, facilities, installations, improvements and other property belonging to TENANT from the Premises. If CITY exercises such option and TENANT fails to remove all such improvements and other property within sixty days after the termination of this Lease, then CITY has the right to have any or all such improvements and other property removed at the expense of TENANT. If CITY does not exercise its option to remove (or require the removal of) the improvements and other property, then title to such improvements and other property vests in CITY and TENANT must not remove same.

Article 5 LEASEHOLD MORTGAGES
Tenant must not mortgage, securitize or hypothecate the leasehold interest created by this Lease, in whole or any part, without the prior written approval of CITY, as evidenced by a resolution of the City Council of CITY.

CITY will not approve financing related to or using that leasehold interest created by this Lease as collateral, unless such financing is (i) to install or construct capital improvements on the Premises, (ii) to install or construct CITY-requested public improvements or provide other benefits in the Tidelands Trust area, the latter as approved by the Harbor Director or (iii) to reduce the interest rate of existing, approved debt secured by leasehold interest created by this Lease without redeeming any equity in the leasehold interest.

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Article 6 REPAIRS, MAINTENANCE AND RESTORATION
Section 6.01 Maintenance by TENANT.

At all times during the term of this Lease, TENANT must, at TENANT'S own cost and expense, keep and maintain, in good order and repair and in a safe and “broom clean” condition, all improvements now or hereafter on the Premises, including any public spaces, common areas, rights-of-way, sidewalks and other areas or spaces, even if not on the Premises but utilized as part of TENANT’S business operations. Furthermore, TENANT must, at TENANT'S own cost and expense, maintain at all times during the term of this Lease the whole of the Premises and other areas utilized for TENANT’S business operations as described above in a clean, sanitary, neat and orderly “broom clean” condition. CITY may, at the sole option of CITY, but not obligation,, clean, clear, maintain or repair the Premises, any improvements thereon or areas used by TENANT, as described above, at TENANT'S cost and expense, in the event TENANT fails to clean, clear maintain or make repairs, in accordance with this Section to the satisfaction of CITY, after 15-days' written notice to TENANT from CITY of CITY'S intent to exercise this option.

Section 6.02 Seawalls and Revetment.

At all times during the term of this Lease, TENANT must, at TENANT'S own cost and expense, repair, maintain, replace and rebuild, as necessary, the improvements, pilings, bulkheads, seawalls, revetment, piers, posts and any structures or other improvements located in the water portion of the Premises. Further, TENANT must, at TENANT'S own cost and expense, conduct maintenance and structural inspections, evaluations or surveys, by a qualified individual or firm, at reasonable intervals not to exceed ten years, to locate and determine needed maintenance, repairs or replacements of these improvements.

Section 6.03 Legal Requirements.

At all times during the term of this Lease, TENANT, at no cost to CITY, must:
(1) Make all alterations, additions, or repairs to the Premises or the improvements or facilities on the Premises required by any Legal Requirements (as defined in Section 3.07, above);
(2) Observe and comply with all Legal Requirements respecting the Premises or the improvements or facilities located thereon;
(3) Obtain all required permits pursuant to the Morro Bay Municipal Code or State law prior to the initiation of any repair or maintenance activity; and

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(4) Indemnify, defend and hold harmless CITY and the property of CITY, including the Premises, from any and all liability, loss, damages, fines, penalties, claims and actions resulting from TENANT'S failure to comply with and perform the requirements of this section.

Section 6.04 Failure to Repair.

In the event failure to repair results in a hazardous or unsafe condition, CITY has the right and option, but not the obligation, to close and prohibit access to the unsafe portion of the Premises until such repairs are completed and accomplished and the Premises rendered safe for public use. In addition, if TENANT fails to repair any hazardous or unsafe condition within ten days after written notice thereof from CITY, then CITY has the right, but not the obligation, to perform such repair at TENANT'S expense. TENANT must reimburse CITY for any such repair undertaken by CITY, promptly upon CITY'S demand, as additional Rent. Failure by CITY to enforce any of the provisions of this Article does not constitute a waiver of these provisions and CITY may, at any time, enforce all of the provisions of this Article, requiring all necessary repairs, rebuilding or replacement.

Section 6.05 Inspection by CITY.

CITY or CITY'S agents, representatives, or employees may enter the Premises at all reasonable times for the purpose of inspecting the Premises to determine whether TENANT is complying with the terms of this Lease and for the purpose of doing other lawful acts that may be necessary to protect CITY'S interest in the Premises under this Lease or to perform CITY'S duties under this Lease or in its governmental capacity.

Section 6.06 TENANT'S Duty to Restore Premises.
(1) Except as provided in Section 6.07 below, if at any time during this Lease, any improvements now or hereafter on the Premises are destroyed in whole or in part by the elements, or any other cause not the fault of TENANT or CITY, then this Lease will continue in full force and effect and TENANT, at TENANT'S own cost and expense, must repair and restore the damaged or destroyed improvement(s) according to the original plan thereof or according to such modified plans therefor as are approved in writing by CITY. The work of permitting, repair and restoration must be (i) commenced by TENANT within 180 days after the damage or destruction occurs, (ii) pursued with due diligence, and (iii) completed not later than 12 full calendar months after the work is commenced, unless the Parties mutually agree, in writing, to an extension. In all other respects, the work of repair and restoration must be done in accordance with the requirements for construction work on the Premises set forth in Article 4 of this Lease.

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Any failure by TENANT either to commence or to complete repair and restoration as required by this Section 6.06 constitutes a material default under this Lease. (2) Any and all insurance proceeds that become payable at any time during the term of this Lease because of damage to or destruction of any improvements on the Premises will be paid to TENANT and applied by TENANT toward the cost of repairing and restoring the damaged or destroyed improvements in the manner required by this Section 6.06, or, if this Lease is terminated, then applied as provided in Section 6.07. Except as set forth in Section 6.08 below, TENANT'S obligation to restore pursuant to this Section exist whether or not funds are available from insurance proceeds.

Section 6.07 Termination of Lease for Destruction.
(1) Notwithstanding the provisions of Section 6.06 of this Lease, TENANT has the option of terminating this Lease as provided in this Section 6.07 if:
(a) During the last 15 years of the term of this Lease, any improvement now or hereafter on the Premises are so damaged or destroyed by the elements or any cause, not the fault of TENANT or CITY, the improvement cannot be repaired and restored as required by Section 6.06 of this Lease at a cost not exceeding 35 percent of the cost of replacing all improvements if they had been totally destroyed at the time of such damage; or (b) During the last 10 years of the term of this Lease, any improvement now or hereafter on the Premises are so damaged or destroyed by the elements or any cause, not the fault of TENANT or CITY, the improvement cannot be repaired and restored as required by Section 6.06 of this Lease at a cost not exceeding 15 percent) of the cost of replacing all improvements if they had been totally destroyed at the time of such damage. (2) TENANT may exercise its right to terminate pursuant to this Section 6.07 by providing written notice to CITY within 180 days following damage or destruction as described herein. Such termination is effective on the last day of the calendar month following the month in which TENANT provides its notice.
(3) If TENANT fails to commence or complete repair and restoration as required by Section 6.06, then CITY has all rights and remedies with respect to TENANT’S default, including, but not limited to, termination of this Lease pursuant to Article 11. (4) If this Lease is terminated as a result of damage or destruction, then any insurance proceeds received with respect to the improvements will be applied or distributed in the following order:

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(a) first, to the demolition of the improvements and removal of all demolition debris; then
(b) to any accrued and unpaid Rent as of the effective date of the termination; then
(c) to each Lender under a Leasehold Encumbrance, in order of lien priority, an amount not to exceed the amount due under such Leasehold Encumbrance; then (d) to CITY, an amount equal to the present value, as of the date of termination, of the total Minimum Rent for the remainder of the Term; then (e) the remaining proceeds, if any, to TENANT.

Section 6.08 Destruction Due to Risk Not Covered by Insurance.

Notwithstanding anything to the contrary in Section 6.06 of this Lease, TENANT has the right to terminate this Lease, at any time, if the improvements on the Premises are damaged or destroyed by a casualty for which TENANT is not required under this Lease to carry insurance and the cost to repair or restore such improvements exceeds 50 percent of the fair market value of all the improvements on the Premises immediately prior to the damage or destruction.

Article 7 INDEMNITY AND INSURANCE
Section 7.01 Indemnity Agreement.
(1) TENANT hereby agrees to indemnify, defend and hold harmless CITY, and the property of CITY (including the Premises and any improvements now or hereafter on the Premises), and CITY'S officers, officials, employees and volunteers from any and all liability, claims, loss, damages, and expenses, including reasonable attorney’s fees and litigation expenses, resulting from TENANT'S occupation and use of the Premises or any negligent act or omission of the TENANT or any of its officers, subtenants, employees, contractors, invitees or anyone for whom TENANT may be liable, specifically including, without limitation, any liability, claim, loss, damage, or expense arising by reason of:
(a) The death or injury of any person, including TENANT or any person who is an officer, employee, contractor, subtenant, invitee or agent of TENANT, or by reason of the damage to or destruction of any property, including property owned by TENANT or by any person who is an employee or agent of TENANT, from any cause whatever while such person or

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property is in or on the Premises or in any way connected with the Premises or with any of the improvements or personal property on the Premises;
(b) The death or injury of any person, including TENANT or any person who is an officer, employee, contractor, subtenant, invitee or agent of TENANT, or by reason of the damage to or destruction of any property, including property owned by TENANT or any person who is an officer, employee, contractor, subtenant, invitee or agent of TENANT, caused or allegedly caused by either (i) the condition of the Premises or any improvement placed on the Premises by TENANT, or (ii) any act or omission on the Premises by TENANT or any person in, on, or about the Premises with or without the permission and consent of TENANT; (c) Any work performed on the Premises or materials furnished to the Premises at the insistence or request of TENANT or any person or entity acting for or on behalf of TENANT;
(d) TENANT'S failure to perform any provision of this Lease or to comply with any Legal Requirement imposed on TENANT or the Premises. (2) TENANT'S obligations pursuant to this Section to indemnify and hold harmless do not extend to any liability, claim, loss, damage or expense arising from CITY'S active negligence or willful misconduct.

Section 7.02 Liability Insurance.

During the term of this Lease, TENANT must maintain at its cost Commercial General Liability insurance with coverages as described in CITY”S HARBOR DEPARTMENT LEASE MANAGEMENT POLICY, as may be updated or changed from time to time at the sole discretion of the CITY. Such coverages must insure against claims for bodily injury (including death), property damage, contractual liability, personal injury and advertising injury occurring on the Premises or from operations located in any part of the Premises. Such insurance must afford protection in amounts no less than One Million Dollars ($1,000,000) per occurrence for bodily injury, personal injury and property damage; provided, that if insurance with a general aggregate limit is used, then either the general aggregate limit will apply separately to the Premises or the general aggregate limit will be twice the occurrence limit stated in this Section. All liability insurance carried by TENANT hereunder will name CITY, its officers, officials, employees and volunteers as additional insureds, and be primary insurance with respect to such additional insureds. TENANT must include all its subtenants as insureds under TENANT's liability policies or furnish separate certificates and endorsements for each subtenant. All coverages for subtenants must comply with all requirements of this Article Seven.

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Section 7.03 Worker's Compensation.

TENANT must maintain at TENANT'S own expense and keep in full force and effect during the term of this Lease, Worker's Compensation Insurance as provided by law. Said insurance must contain a waiver of subrogation rights against CITY. TENANT must also maintain employer's liability insurance with minimum coverage of $1,000,000 per accident for bodily injury or disease.

Section 7.04 Property Insurance.

TENANT must, at its cost, at all times during the term of this Lease keep all improvements and other structures on the Premises, as well as any and all additions, improvements and betterments thereto, insured for 100 percent) of their full replacement cost with no co-insurance provision against loss or destruction by the perils covered by "all risk" (excluding earthquake) property damage insurance policies. Any loss coverage under such insurance must be payable to TENANT, CITY, and any Lender under a Leasehold Encumbrance approved pursuant to Article 5 of this Lease, as their interests may appear, and such proceeds must be used and applied in the manner required by Article 6 of this Lease.

Section 7.05 Additional Coverage.

TENANT must also maintain, at its sole expense, the insurance described in this Section 7.05.
(1) If TENANT has (or is required by any Legal Requirement to have) a liquor license and is selling or distributing alcoholic beverages on the Premises, then TENANT must maintain liquor liability coverage in appropriate amounts. TENANT must require any subtenant who has (or is required by any Legal Requirement to have) a liquor license and who is selling or distributing alcoholic beverages on the Premises, to maintain such coverage. (2) TENANT must maintain "all risk" (excluding earthquake) property damage insurance covering TENANT's personal property located at the Premises, in amounts not less than the full replacement value of such personal property. CITY has no interest in the proceeds of such insurance.
(3) TENANT must obtain and maintain any additional insurance coverages CITY may reasonably require. As illustration only and not as a limitation, in appropriate circumstances such additional insurance may include increased general liability limits, business interruption coverage, business automobile liability, boiler and machinery insurance or builder's risk

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insurance. TENANT, however, is not required to maintain additional coverages that are in excess of those typically maintained by similarly situated tenants in the Morro Bay area.

Section 7.06 General Requirements.

Except as specifically provided to the contrary, all the insurance required pursuant to this Article Seven is subject to the requirements of this Section 7.06. (1) Maintenance of proper insurance coverage is a material element of this Lease and failure to maintain or renew coverage or to provide evidence of coverage and/or renewal may be treated by the CITY as a material breach of contract. TENANT must forward CITY”S specifications and forms to TENANT’S insurance agent for compliance. (2) CITY may, at any time, require TENANT to increase the minimum coverage limits for insurance required by this Lease, but every such increase must be reasonable under the circumstances.
(3) All policies must be issued by insurance companies authorized to issue such insurance in California, with an A.M. Best's rating of no less than A:VII. (4) Any deductibles or self-insured retentions must be declared to and approved by CITY. At the option of CITY, either: (i) the insurer must reduce or eliminate such deductibles or self-insured retentions as respects CITY, its officers, officials, employees and volunteers or (ii) TENANT must provide a financial guarantee satisfactory to CITY guaranteeing payment of losses and related investigations, claim administration and defense expenses. (5) Each insurance policy required by this Lease must be endorsed to state coverage will not be cancelled or reduced, except after 30-days' prior written notice by certified mail, return receipt requested, has been given to CITY.
(6) TENANT must furnish CITY with certificates and amendatory endorsements effecting the coverage required by this Lease. The endorsements must be on forms provided by CITY or on other than CITY's forms; provided, that those endorsements or policies conform to the requirements. All certificates and endorsements are to be received and approved by CITY before use of the Premises, and promptly following any renewal or replacement. CITY reserves the right, at any time, to require complete, certified copies of all required insurance policies, including endorsements effecting the coverage required by these specifications. (7) TENANT'S insurance coverage must be primary insurance as respects CITY, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by

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CITY, its officers, officials, employees, or volunteers will be excess of TENANT'S insurance and will not contribute with it.

Section 7.07 No Subrogation.

TENANT agrees, in the event of loss due to any of the perils for which it has agreed to provide insurance, TENANT will look solely to its insurance for recovery. TENANT hereby grants to the CITY, on behalf of any insurer providing insurance to either TENANT or CITY with respect to TENANT'S occupancy of the Premises, a waiver of any rights to subrogation, which any such insurer of TENANT may acquire against CITY by virtue of the payment of any loss under such insurance. Each insurance policy required under this Lease, including those insuring TENANT against claims, expense, or liability for injury to persons or property, must provide the insurer will not acquire by subrogation any right to recovery.

Section 7.08 TENANT'S Waiver.

TENANT hereby waives any right of recovery against CITY for each claim, expense, liability, or business interruption, or other loss, except where caused by CITY'S active negligence or willful misconduct. TENANT agrees, to the extent TENANT fails to acquire insurance, TENANT will not have any claim against CITY for any loss that results from a risk or peril that would have been included in such insurance.

Section 7.09 Insurance Not a Limit.

The insurance requirements of this Article 7 are independent of, and do not limit or modify, TENANT'S indemnification, defense, hold harmless and other obligations pursuant to this Lease.

Article 8 TAXES AND FEES
Section 8.01 TENANT to Pay Taxes.

TENANT must pay, before delinquency, all taxes and assessments levied upon or assessed to TENANT on the Premises by reason of this Lease or of any equipment, appliances, improvement, or other development of any nature whatsoever, erected, installed, or maintained by TENANT or by reason of the business or other activity of TENANT upon or in connection with the Premises. TENANT must pay all possessory interest taxes applicable to the Premises.

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Section 8.02 TENANT to Pay License and Permit Fees.

TENANT must pay any fees imposed by Legal Requirements for licenses or permits for any business or activities including construction by TENANT upon the Premises.

Section 8.03 Utilities.

TENANT must (i) pay or cause to be paid and (ii) hold harmless CITY and the property of CITY, including the Premises, from all charges for the furnishing of gas, water, electricity, telecommunication service, and for other public utilities to the Premises during the term of this Lease and for the removal of garbage and rubbish from the Premises during the term of this Lease.

Article 9 CONDEMNATION
Section 9.01 Total Condemnation.

If title and possession to all of the Premises is permanently taken for any public or quasipublic use under any statute, or by the right of eminent domain, then this Lease will be considered terminated on the date that possession of the Premises is taken; and both CITY and TENANT will thereafter be released from all obligations, including Rent, all of which will be prorated to the date of termination, except those specified in Section 9.02 of this Lease.

Section 9.02 Condemnation Award.

Any compensation or damages awarded or payable because of the permanent taking of all or any portion of the Premises by eminent domain will be allocated between CITY and TENANT as follows:
(1) All compensation or damages awarded or payable for the taking by eminent domain of any land that is part of the Premises will be paid to and be the sole property of CITY free and clear of any claim of TENANT or any person claiming rights to the Premises through or under TENANT.
(2) All compensation or damages awarded or payable which is specifically attributed by the taking party to the "good will" of TENANT'S business will be paid to and be the sole property of TENANT.
(3) All compensation or damages awarded or payable because of any improvements constructed or located on the portion of the Premises taken by eminent domain where only a portion of the Premises is taken by eminent domain, and TENANT is not entitled to or does not

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terminate this Lease, will be applied in the manner specified in Section 9.04 toward the replacement of such improvements with equivalent new improvements on the remaining portions of the Premises.
(4) All compensation or damages awarded or payable because of any improvements constructed or located on the portion of the Premises taken by eminent domain where this Lease is terminated because of the taking by eminent domain, whether all or only a portion of the Premises is taken by eminent domain, will be allocated between CITY and TENANT as follows:
(a) That percentage of the compensation or damages awarded or payable because of the improvements that equals the percentage of the full term of this Lease that has, at the time of the taking, not expired will belong to and be the sole property of TENANT. (b) That percentage of the compensation or damages awarded or payable because of the improvements that equals the percentage of the full term of this Lease that has, at the time of the taking, expired will belong to and be the sole property of CITY. (c) The term "time of taking," as used in this Section, means 12:01 a.m. of the date the agency or entity exercising the eminent domain power, takes title to or the date it takes physical possession of the portion of the Premises, whichever first occurs. (5) Any severance damages awarded or payable because only a portion of the Premises is taken by eminent domain will be the sole and separate property of CITY.

Section 9.03 Termination for Partial Taking.

If, during the term of this Lease, title and possession of only a portion of the Premises is taken for any public or quasi-public use under any statute, or by right of eminent domain, then TENANT may, at TENANT'S option, terminate this Lease by serving written notice of termination on CITY within 90 days after TENANT has been deprived of actual physical possession of the portion of the Premises taken for such public use. This Lease will terminate on the first day of the calendar month following the calendar month in which the notice of termination described in this section is served on CITY. On termination of this Lease, pursuant to this Article, all subleases and subtenancies in or on the Premises or any portion of the Premises created by TENANT under this Lease will also terminate and the Premises must be delivered to CITY free and clear of all such subleases and subtenancies; provided, however, that CITY may, at CITY'S option, by mailing written notice to a subtenant allow any subtenant to attorn to CITY and continue such subtenant's occupancy on the Premises as a TENANT of CITY. On termination of this Lease pursuant to this section, however, both CITY and TENANT

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will be released from all obligations under this Lease, except those specified in Section 9.02 of this Lease.

Section 9.04 Rent Abatement for Partial Taking.

If, during the term of this Lease, title and possession of only a portion of the Premises is taken under the power of eminent domain by any public or quasi-public agency or entity and TENANT does not terminate this Lease, then this Lease will terminate as to the portion of the Premises taken under eminent domain on the date actual physical possession of the portion taken by eminent domain is taken by the agency or entity exercising the eminent domain power.

Furthermore, the Rent payable under this Lease will, as of that time be reduced in the same proportion of the Premises taken by eminent domain bears to the full value of the Premises at that time; provided however, that TENANT will make a good faith effort to replace any improvements or facilities with equivalent new facilities on the remaining portion of the Premises and do all other acts at TENANT'S own cost and expense required by the eminent domain taking to make the remaining portion of the Premises fit for the use specified in this Lease.

Section 9.05 Conveyance in Lieu of Eminent Domain.

A voluntary conveyance by CITY, with the consent of TENANT, of title to all or a portion of the Premises to a public or quasi-public agency or entity in lieu of and under threat by such agency or entity to take the same by eminent domain proceedings will be considered a taking of title to all or such portion of the Premises under the power of eminent domain subject to the provisions of this Article.

Section 9.06 Temporary Taking.

If the possession of the Premises or any portion thereof are taken under the power of eminent domain by any public or quasi-public agency or entity for a limited period not extending beyond the term of this Lease, then this Lease will not terminate (except as provided in this Section 9.06) and TENANT must continue to perform all its obligations hereunder, except only to the extent TENANT is prevented from performing such obligations by reason of such taking.

TENANT will be entitled to receive the entire amount of compensation or damages awarded because of such temporary taking. If a temporary taking extends for more than 36 months, then TENANT will have the right to terminate this Lease, and TENANT will be entitled to receive, out of the compensation or damages awarded because of such temporary taking, the amount that

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is attributable to the period of time up until the effective date of TENANT'S termination of this Lease.

Article 10 ASSIGNMENT AND SUBLEASING
Section 10.01 No Assignment Without CITY'S Consent.

Except as provided in this Article 10, TENANT must not assign or otherwise transfer this Lease, any right or interest in this Lease, or any right or interest in the Premises or any of the improvements that may now or hereafter be constructed or installed on the Premises without the express written consent of CITY first had and obtained. Any assignment or transfer by TENANT without the prior written consent of CITY, as evidenced by a resolution of the City Council, whether it be voluntary or involuntary, by operation of law or otherwise, is void and may, at the option of CITY, terminate this Lease. A consent by CITY to one assignment will not be deemed to be a consent to any subsequent assignment of this Lease by TENANT. CITY will not unreasonably nor arbitrarily withhold its approval to the assignment or transfer of this Lease to an assignee who is financially reliable and qualified to conduct the business for which this Lease was granted. It is mutually agreed TENANT'S qualifications are a part of the consideration for granting of this Lease and said party does hereby agree to maintain active control and supervision of the operation conducted on the Premises.

Section 10.02 Change of Ownership as Assignment.

For purposes of this Article 10, the following transactions will be deemed to be assignments or transfers:
(1) If TENANT is a partnership or limited liability company:
(a) A change in ownership effected voluntarily, involuntarily, or by operation of law, within a 12-month period of 25 percent or more of the partners or members or 25 percent or more of the partnership or membership interests; or
(b) The dissolution of the partnership or limited liability company without its immediate reconstitution.
(2) If TENANT is a closely held corporation (i.e., one whose stock is not publicly held and not traded through an exchange or over the counter):

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(a) The sale or other transfer, within a 12-month period of more than an aggregate of 25 percent of the voting shares of TENANT (other than to immediate family members by reason of gift or death); or
(b) The dissolution, merger, consolidation, or other reorganization of TENANT.

Section 10.03 Application for Assignment.

A condition of an assignment is TENANT must file with CITY an application to assign its leasehold interest prepared by the prospective assignee. Concurrently with filing the application, TENANT must pay a reasonable fee associated with the cost of processing said application, in cash or certified or cashier's check to enable CITY adequately to investigate the proposed assignee's qualifications, financial reliability and suitability as a permitted assignee.

CITY is not be required to account for the use of the sum paid. If the proposed assignee's net worth, financial reliability and qualifications on the date of assignment are not sufficient to reasonably guarantee successful operation of the Premises in compliance with all applicable CITY, County, State and federal requirements, then CITY may withhold approval of the assignment or condition it upon TENANT'S guarantee of such assignee's obligations hereunder for such period as CITY deems advisable. Net worth means the amount by which the total of all assets exceed the total of all liabilities as determined in accordance with general accepted accounting principles as approved by CITY'S auditor, or other authorized representative or agent.

Section 10.04 Probate Transfer of Assignment.

If TENANT is an individual, nothing herein contained will prevent the transfer of this Lease by trust, will, or by operation of law under the intestacy provisions of the California Probate Code as it may be amended from time to time. Probate sale of the leasehold interest will not be permitted without the consent of the CITY, evidenced by a City Council resolution, first had and obtained.

Section 10.05 No Sublease Without CITY'S Consent.

TENANT must not sublease the whole nor any part of the Premises, or license, permit, or otherwise allow any other person (the employees of TENANT excepted) to occupy or use the Premises, or any portion thereof, without the prior written consent of CITY’s Harbor Director, or any future successor to the duties of the City’s Harbor Director. The process for obtaining that consent will not begin until TENANT has filed an application to sublease and paid a reasonable fee, as determined by CITY, associated with the cost of processing the application. A consent to

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one subletting, occupation, licensing or use will not be deemed to be a consent to any subsequent subletting, occupation, licensing or use by another person. Any sublease or license without CITY'S written consent is void, and may, at CITY'S option, terminate this Lease. CITY will not unreasonably nor arbitrarily withhold its consent to sublet to one who is qualified and financially reliable. CITY'S consent to any occupation, use, or licensing will be in CITY'S sole and absolute discretion. Notwithstanding any provisions herein to the contrary, the terms "assignment," "subletting," "occupation," or "use," are not to be construed or interpreted to mean or include the temporary, short-term renting or leasing of boat slips, motel, hotel, or apartment accommodations, if any, on the Premises.

Section 10.06 Subtenant Subject to Lease Terms.

Any and all subleases must be expressly made subject to all the terms, covenants, and conditions of this Lease. In no event will the term of any sublease extend beyond the term of this Lease. Subject to Section 10.09, termination of this Lease prior to the expiration of this Lease term also terminates any and all subleases. A breach of the terms of this Lease by a subtenant constitutes a breach on the part of TENANT and subjects both the subtenant and TENANT to all the remedies provided to CITY herein and by law. Failure by any subtenant to report Gross Sales or to pay Percentage Rent due from subtenant constitutes a breach of this Lease. TENANT hereby agrees to and does guarantee payment of such Percentage Rent due by a subtenant under the terms of this lease.

Section 10.07 Consent to Sublease Agreement.

Prior to any consent by CITY to any sublease hereof, TENANT, CITY and any subtenant must have executed the CITY’S Consent to Sublease Agreement making CITY a third party beneficiary, whereby the subtenant agrees to be bound by all of the terms, covenants and conditions of this Lease. Further, it is agreed by TENANT any default by the subtenant of any of the terms, covenants and conditions of this Lease will be a violations by TENANT of this Lease and all remedies of CITY for such violation, including termination of this Lease, may immediately be enforceable by CITY against TENANT. TENANT must apply any and all monies received from any subtenant first to the payment of obligations of the subtenant to CITY.

Section 10.08 TENANT and Guarantor Remain Liable.

Prior to approval by CITY to any sublease hereof, TENANT must agree to be primarily and jointly and severally liable to CITY for all obligations due CITY by any subtenant, including the payment of rents; and TENANT must agree CITY may proceed directly against TENANT

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for any obligation owed to CITY by the subtenant. If this Lease is guaranteed, then neither the sublease nor CITY'S approval thereof will release the guarantor from its obligations pursuant to the guaranty.

Section 10.09 Nondisturbance.

On the terms set forth below, CITY may enter into agreements with subtenants establishing, in the event of any termination of this Lease prior to the expiration date, CITY will not terminate or otherwise disturb the rights of the subtenant under such sublease, but will instead honor such sublease as if that sublease had been entered into directly between CITY and such subtenant, conditioned upon such subtenant's agreement to attorn to CITY and full performance of all obligations under the sublease in question ("Non-Disturbance Agreement").

CITY agrees to execute a Non-Disturbance Agreement in connection with a particular sublease; provided, that Tenant provides CITY with a copy of the sublease, and the Non-Disturbance Agreement is customary in form and substance and otherwise reasonably acceptable to CITY.

Article 11 DEFAULT AND TERMINATION
Section 11.01 Abandonment by TENANT.

If TENANT breaches this Lease and abandon all or any part of the Premises prior to the scheduled expiration of the term of this Lease, then CITY may continue this Lease in effect by not terminating TENANT'S right to possession of the Premises, in which event CITY may, at its option, enforce all CITY'S rights and remedies under this Lease including the right to recover the Rent specified in this Lease as it becomes due under this Lease.

Section 11.02 Termination for Breach by TENANT.

All covenants and agreements contained in this Lease are declared to be conditions to this Lease and to the term hereby demised to TENANT. If TENANT fails to perform any covenant, condition, or agreement contained in this Lease, except for payment of any Rent or other monetary amount due, and such failure is not cured within 30 days after written notice thereof is served on TENANT, then CITY may terminate this Lease immediately, and in the event of such termination, TENANT will have no further rights hereunder and TENANT must thereupon forthwith remove from the Premises and will have no further right or claim thereto and CITY will immediately thereupon have the right to re-enter and take possession of the Premises, subject only to appropriate legal process.

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Section 11.03 Termination for Failure to Pay Rent.

If any payment of Rent is not made as herein provided and such failure to pay is not cured within three days after written notice thereof is served on the TENANT, then CITY will have the option to immediately terminate this Lease; and in the event of such termination, TENANT will have no further right or claim thereto and CITY will immediately thereupon have the right to re-enter and take possession of the Premises, subject only to appropriate legal process.

Section 11.04 Lender May Cure Default.

CITY hereby affords the lender under any Leasehold Encumbrance of record with CITY the right to cure any default by TENANT of the covenants, conditions, or agreements hereof, as provided in Article 5 of this Lease.

Section 11.05 Damages for Breach.

If TENANT defaults in the performance of any covenant, condition or agreement contained in this Lease and the default be incurable or not be cured within the time period set forth hereinabove, then CITY may terminate this Lease and:
(1) Bring an action to recover from TENANT:
(a) The worth at the time of award of the unpaid Rent which had been earned at the time of termination of the Lease;
(b) The worth at the time of award of the amount by which the unpaid Rent, which would have been earned after termination of the Lease until the time of award exceeds the amount of rental loss that TENANT proves could have been reasonably avoided; (c) The worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of rental loss that TENANT proves could be reasonably avoided; and
(d) Any other amount necessary to compensate CITY for all detriment proximately caused by TENANT'S failure to perform its obligations under this Lease; and (2) Bring an action, in addition to or in lieu of the action described in subparagraph (1) of this Section, to re-enter and regain possession of the Premises in the manner provided by the laws of unlawful detainer of the State of California then in effect.

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Section 11.06 Cumulative Remedies.

The remedies available to CITY in this Article are not exclusive, but are cumulative with and in addition to all remedies now or hereafter allowed by law or elsewhere provided in this Lease.

Section 11.07 Waiver of Breach.

The waiver by CITY of any breach by TENANT of any of the provisions of this Lease does not constitute a continuing waiver or a waiver of any subsequent breach by TENANT either of the same or a different provision of this Lease.

Section 11.08 Surrender of Premises.

On expiration or sooner termination of this Lease, TENANT must surrender the Premises, and, subject to Section 4.04, all improvements in or on the Premises, and all facilities in any way appertaining to the Premises, to CITY in good, safe, and clean condition, reasonable wear and tear excepted.

Article 12 MISCELLANEOUS
Section 12.01 Notices.

Any and all notice or demands by or from CITY to TENANT, or TENANT to CITY, must be in writing. They must be served either personally, or by registered or certified mail.

Any notice or demand to CITY must be given to:

Harbor Director
1275 Embarcadero
Morro Bay, CA 93442
with a copy to:

City Manager of the City of Morro Bay
City Hall
595 Harbor Street
Morro Bay, CA 93442
Any notice or demand to TENANT must be given at:

Van Beurden Investments
701 Embarcadero, Suite E
Morro Bay, CA 93422

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Such addresses may be changed by written notice by either Party to the other Party.

Section 12.02 Governing Law and Jurisdiction.

This Lease, and all matters relating to this Lease, are governed by the laws of the State of California in force at the time any need for interpretation of this Lease or any decision concerning this Lease arises. CITY and TENANT consent to exclusive personal and subject matter jurisdiction in the Superior Court of the State of California in and for the county where the Premises are located, and each Party waives any claim such court is not a convenient forum.

Each Party hereby specifically waives the provisions of California Code of Civil Procedure Section 394, and any successor statute thereto.

Section 12.03 Binding on Successors.

Subject to the provisions herein relating to assignment and subletting, each and all of the terms, conditions, and agreements herein contained will be binding upon and inure to the benefit of the successors and assigns of any and all of the Parties; and all of the Parties hereto are jointly and severally liable hereunder.

Section 12.04 Partial Invalidity.

If any provision of this Lease is held by a court of competent jurisdiction to be either invalid, void, or unenforceable, then the remaining provisions of this Lease will remain in full force and effect unimpaired by the holding.

Section 12.05 Sole and Only Agreement.

Subject to the provisions of the second paragraph of Section 1.04 (used only if second paragraph of that section is used), (i) this Lease, including all exhibits incorporated by reference, constitutes the sole and only agreement between CITY and TENANT respecting the Premises and the leasing of the Premises to TENANT and (ii) any other agreements or representations respecting the Premises and their leasing to TENANT by CITY, which are not expressly set forth in this Lease, are null and void. The lease terms herein specified correctly set forth the obligations of CITY and TENANT as of the date of this Lease.

Section 12.06 Modification.

This Lease can only be modified, amended or altered pursuant to a written amendment executed by the Mayor and attested to by City Clerk, pursuant to prior City Council approval.

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Notwithstanding City Council approval, no amendment will become effective until it is in fact executed by the Mayor and attested to by City Clerk and approved as to form by the City Attorney (or designee). TENANT understands this Lease cannot be modified, amended or altered by oral statements by any person representing CITY, including the Mayor and City Clerk.

TENANT specifically agrees not to rely on oral statements, purported oral waivers, or purported oral modifications and agrees not to rely upon purported written modifications unless they meet the requirements of this Section. If the title of any person authorized to act for CITY under this Lease is changed during the term of this Lease, then the person who succeeds to substantially the same responsibilities with respect to CITY will have the authority to act for CITY under this Lease.

Section 12.07 Time of Essence.

Time is expressly declared to be the essence of this Lease.

Section 12.08 Memorandum of Lease for Recording.

CITY and TENANT agree, at the request of either at any time during the term of this Lease, to execute a Memorandum of Lease or "short form" of this Lease, which shall describe the Parties, set forth a description of the Premises, specify the term of this Lease, and incorporate this Lease by reference.

Section 12.09 Force Majeure.

If either Party hereto is delayed or hindered in or prevented from the performance of any act required hereunder by reason of a strike, lock-out, labor trouble, inability to procure materials, failure of power, governmental moratorium, riot, insurrection, war, pandemic or other reason of a like nature not the fault of the Party delaying in performing work or doing any act required under the terms of this Lease, then performance and doing of such act will be excused for the period of such delay. The Parties understand and agree, the foregoing will not extend any period of time for the payment of Rent or other sums payable by either Party or any period of time for the written exercise of an option or right by either Party.

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Article 13 SPECIAL PROVISIONS PECULIAR TO THIS LEASE SITE The following provisions apply to this Lease site only:

Section 13.01 Public Restrooms
Restrooms completed in conformance with Conditional Use Permit (CUP) 07-91 shall be made available to the public during business hours and TENANT shall maintain signage in prominent locations which clearly identifies that the restrooms are available to the general public. In the case of a dispute over location and design of signage, the CITY’s Harbor Director may designate two locations for “public restroom” signs of a type and size to be determined by the CITY.

Section 13.02 TENANT’S Obligation to Redevelop Site.

CITY and TENANT agree TENANT will construct improvements to the Premises (“Project”), valued at a minimum of $700,000 and as outlined in the approved Conditional Use Permit No. #MAJ22-002 (CUP amendment of MAJ20-004/CUP07-91) consisting of the following (the “Improvements”):

A. A major modification for additional public access enhancements and modifications to the approved new Harborwalk public access that includes an additional 20 square feet of Harborwalk area at the northwest corner of the 701 Embarcadero building,
B. Two interpretive panels with public seating benches, C. One new pile to support the Harborwalk extension,
D. Demolition of a portion of the wharf and reconfiguration of the existing commercial fishing wharf,
E. Adding a 5-foot wide wharf cantilever,
F. Replacement of the fish-offloading crane,
G. Maintenance of the existing commercial fishing use located at 715 Embarcadero that was approved for conversion to retail, and H. Retention of the existing color scheme of both 701 and 715 Embarcadero buildings. ) and valued at a minimum of $700,000.

TENANT shall perform the Improvements in accordance with the following milestones:

A. Obtain Building Permits for the Project no later than April 1, 2024.

B. Commence construction of the Project no later than June 30, 2024.

C. Completion of construction of all components of the Project no later than March 31, 2025. Completion shall mean when the Project is entitled to be issued

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a final Certificate of Occupancy. TENANT shall provide evidence TENANT has incurred at least $700,000 in costs to satisfactorily complete the Project on the site pursuant of issuance of final Certificate of Occupancy.

During construction of the Project, TENANT shall take all measures to:

A. Avoid any pollution of the atmosphere or littering of land or water by or originating in or about the Premises or caused by TENANT’S construction activities.

B. Keep the noise level on the Premises to a minimum so that persons in the neighborhood will be able to comfortably enjoy business and facilities in the area.

C. Prevent any pollutants, including but not limited to petroleum products, from entering Morro Bay waters.

D. Reasonably avoid negative impacts on surrounding businesses.

E. Prohibit storage of materials or equipment on public property and avoid parking or traffic delays or impairment without prior consent of CITY.

F. Keep the construction site in a sightly, orderly, and safe manner at all times.

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EXECUTED on ________________, 2024, at________________________ County, California.

CITY OF MORRO BAY TENANT
_________________________________
Carla Wixom , MAYOR
By: ________________________________
Paul Van Beurden
General Partner
ATTEST:
_________________________________
Dana Swanson, CITY CLERK
APPROVED AS TO FORM:
_______________________________________
Chris F. Neumeyer, CITY ATTORNEY

A-1

EXHIBIT A

COPY OF PARCEL MAP

L E A S E
by and between
the CITY OF MORRO BAY
("CITY")
and
Van Beurden Investments
("TENANT")

-iTABLE OF CONTENTS
Article 1 FIXED TERM.............................................................................................................2 Section 1.01 Term..............................................................................................2 Section 1.02 No Extensions. ..............................................................................2 Section 1.03 Hold Over......................................................................................2 Section 1.04 Replacement..................................................................................3 Article 2 RENT..........................................................................................................................3 Section 2.01 Annual Minimum Rent. ................................................................3 Section 2.02 CPI Adjustment to Annual Minimum Rent. .................................4 Section 2.03 Calculation of New Minimum Rent..............................................4 Section 2.04 Percentage Rent. ...........................................................................6 Section 2.05 Reimbursements............................................................................8 Section 2.06 Penalty and Interest.......................................................................8 Article 3 USE OF PREMISES...................................................................................................8 Section 3.01 Permitted Uses. .............................................................................8 Section 3.02 Unauthorized Use..........................................................................9 Section 3.03 Operation of Business - Hours of Operation.................................9 Section 3.04 Competition...................................................................................9 Section 3.05 Environmental Considerations and Hazardous Materials...........10 Section 3.06 Tidelands Trust. ..........................................................................11 Section 3.07 Compliance with Law.................................................................11 Section 3.08 Waste or Nuisance. .....................................................................12 Section 3.09 Use by CITY...............................................................................12 Article 4 CONSTRUCTION, ALTERATION AND REPAIRS .............................................12 Section 4.01 Construction Approval................................................................12 Section 4.02 Construction Bond. .....................................................................13

-iiSection 4.03 Mechanics' Liens.........................................................................13 Section 4.04 Ownership of Improvements.......................................................14 Article 5 LEASEHOLD MORTGAGES .................................................................................14 Article 6 REPAIRS, MAINTENANCE AND RESTORATION ............................................15 Section 6.01 Maintenance by TENANT..........................................................15 Section 6.02 Seawalls and Revetment. ............................................................15 Section 6.03 Legal Requirements. ...................................................................15 Section 6.04 Failure to Repair. ........................................................................16 Section 6.05 Inspection by CITY.....................................................................16 Section 6.06 TENANT'S Duty to Restore Premises........................................16 Section 6.07 Termination of Lease for Destruction.........................................17 Section 6.08 Destruction Due to Risk Not Covered by Insurance...................18 Article 7 INDEMNITY AND INSURANCE ..........................................................................18 Section 7.01 Indemnity Agreement. ................................................................18 Section 7.02 Liability Insurance. .....................................................................19 Section 7.03 Worker's Compensation..............................................................20 Section 7.04 Property Insurance. .....................................................................20 Section 7.05 Additional Coverage. ..................................................................20 Section 7.06 General Requirements.................................................................21 Section 7.07 No Subrogation. ..........................................................................22 Section 7.08 TENANT'S Waiver.....................................................................22 Section 7.09 Insurance Not a Limit. ................................................................22 Article 8 TAXES AND FEES..................................................................................................22 Section 8.01 TENANT to Pay Taxes...............................................................22 Section 8.02 TENANT to Pay License and Permit Fees. ................................23 Section 8.03 Utilities........................................................................................23

-iiiArticle 9 CONDEMNATION..................................................................................................23 Section 9.01 Total Condemnation....................................................................23 Section 9.02 Condemnation Award. ................................................................23 Section 9.03 Termination for Partial Taking. ..................................................24 Section 9.04 Rent Abatement for Partial Taking. ............................................25 Section 9.05 Conveyance in Lieu of Eminent Domain....................................25 Section 9.06 Temporary Taking. .....................................................................25 Article 10 ASSIGNMENT AND SUBLEASING .....................................................................26 Section 10.01 No Assignment Without CITY'S Consent. .................................26 Section 10.02 Change of Ownership as Assignment. ........................................26 Section 10.03 Application for Assignment........................................................27 Section 10.04 Probate Transfer of Assignment. ................................................27 Section 10.05 No Sublease Without CITY'S Consent.......................................27 Section 10.06 Subtenant Subject to Lease Terms..............................................28 Section 10.07 Consent to Sublease Agreement. ................................................28 Section 10.08 TENANT and Guarantor Remain Liable....................................28 Section 10.09 Nondisturbance. ..........................................................................29 Article 11 DEFAULT AND TERMINATION..........................................................................29 Section 11.01 Abandonment by TENANT........................................................29 Section 11.02 Termination for Breach by TENANT.........................................29 Section 11.03 Termination for Failure to Pay Rent. ..........................................30 Section 11.04 Lender May Cure Default. ..........................................................30 Section 11.05 Damages for Breach....................................................................30 Section 11.06 Cumulative Remedies. ................................................................31 Section 11.07 Waiver of Breach. .......................................................................31 Section 11.08 Surrender of Premises. ................................................................31

-ivArticle 12 MISCELLANEOUS .................................................................................................31 Section 12.01 Notices. .......................................................................................31 Section 12.02 Governing Law and Jurisdiction.................................................32 Section 12.03 Binding on Successors. ...............................................................32 Section 12.04 Partial Invalidity..........................................................................32 Section 12.05 Sole and Only Agreement...........................................................32 Section 12.06 Modification................................................................................32 Section 12.07 Time of Essence..........................................................................33 Section 12.08 Memorandum of Lease for Recording........................................33 Section 12.09 Force Majeure. ............................................................................33 Article 13 SPECIAL PROVISIONS PECULIAR TO THIS LEASE SITE.................................34 Section 13.01 Public Restrooms........................................................................34 Section 13.02 TENANT’S Obligation to Redevelop Site. ................................34

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\)
...

I
-- ----------------- -
£M8.412C4 D£:-./20
CHANNEL L1we
Exhibit A

EXHIBIT B

PERCENTAGE RENT FOR GROUND LEASES
% GROSS
SALES
FOOD SERVICE: Restaurant, Dining Room 3
Snack Bar, Delicatessen, 5
Fast Food, Convenience Food 5
Beer & Wine Sales 10
Bar/Lounge 10
RETAIL SALES & SERVICE: Tenant 5
FISH & SEAFOOD: Retail Sales 3
Wholesale Sales 0
MOORINGS, TIES & SLIPS: Pier/Fixed Piles 10
Pier/Floating 10
BOAT REPAIR & SALES: Boat & Marine Repair 3
New Boat Sales 1
Used Boat Sales 2
FUEL: Gasoline $0.02/gal.

Diesel $0.015/gal.

MOTEL: 5
ALL OTHER USES: 5
Percentage Rental is to be based on the gross amount received from any and all sources of income derived from the lease site.

Prepared By: ___TS ____ Dept Review: ______
City Manager Review: __DS______ City Attorney Review: __CFN____ Staff Report
TO: Honorable Mayor and City Council
FROM: Ted Schiafone, Harbor Director
SUBJECT: Authorization to accept $35,888.50 in Grant Funds from the Friends of the Morro Bay Harbor Department for the purchase of a Polaris Utility Terrain Vehicle (UTV) for the Harbor Department

RECOMMENDED ACTION
Authorize the City Manager to execute an agreement accepting grant funding from the Friends of the Morro Bay Harbor Department to purchase a Polaris UTV for beach rescue operations.

FISCAL IMPACT
The Harbor Department will receive $35,888.50 to purchase a Polaris UTV. The associated sales tax and fees will be paid from the Harbor Fund.

BACKGROUND
The 2003 F250 Ford pickup truck used for Beach Lifeguard response has reached its useful life. The Harbor Department has not had sufficient funds to purchase a replacement vehicle.

Large pickup trucks are not the best vehicles for beach use, they are difficult to navigate traffic backups on the Embarcadero during emergency response and have blind spots for driving around crowded beach activities.

DISCUSSION
UTV’s are more agile on the sand, more cost effective in operations and maintenance, and much safer to operate on crowded beaches. The Friends of the Morro Bay Harbor Department have raised over $250,000 for Harbor improvements. When they learned we were looking into options to replace a vehicle, they jumped into action and began a fundraising campaign for a new UTV.

AGENDA NO: 7.f
MEETING DATE: March 12, 2024

CONCLUSION
Staff recommends the City Manager execute an agreement accepting the grant funds from the Frends of Morro Bay Harbor Department so that the Harbor Department can order the Polaris UTV and have it available in time for summer.

ATTACHMENTS

1. Friends of the Morro Bay Harbor Department Donation Acceptance Agreement

2. Quote Polaris UTV

01181.0024/914492.1

GRANT AGREEMENT

BY THE FRIENDS OF THE MORRO BAY HARBOR DEPARTMENT

TO THE CITY OF MORRO BAY
THIS AGREEMENT is made and entered into this _____ day of _________, 2024, and is effective as of the 13th day of March, 2024, by and between the CITY OF MORRO BAY, a municipal corporation of the State of California (hereinafter GRANTEE and “City”), and FRIENDS OF THE MORRO BAY HARBOR DEPARTMENT, a California nonprofit corporation, (hereinafter GRANTOR).

WITNESSETH
WHEREAS, GRANTEE provides emergency response for the waterfront, beach and bay areas of Morro Bay ; and
WHEREAS, the 2003 pick-up truck currently used for beach lifeguard emergency response has reached its useful life; and
WHEREAS, the Harbor Department has not had sufficient funds to purchase a replacement vehicle; and
WHEREAS, GRANTOR is a not for profit community group established to help improve the Harbor Services in Morro Bay; and
WHEREAS, GRANTOR desires to assist GRANTEE by providing funding to purchase a Polaris Utility Terrain Vehicle (UTV) suitable for emergency beach response.

NOW, THEREFORE, THE PARTIES AGREE, as follows:

1. Subject to the terms of this Agreement, on or before _____________, 2024, GRANTOR agrees to remit to GRANTEE $35,888.50 (Grant) for GRANTEE to use solely for the purchase of a Polaris UTV for use by the Harbor Department and the City, with consideration to GRANTOR that GRANTEE’S use of the Polaris UTV furthers GRANTOR’S established goal of improving Harbor Services in Morro Bay.

2. GRANTOR agrees that the Polaris UTV purchased with the Grant shall be the sole and separate property of City.

2. Neither GRANTOR nor GRANTEE may assign any rights or obligations created by this agreement to any other person without the prior approval of the other party.

3. The terms and conditions of this Agreement can only be amended in writing approved and signed by GRANTOR and GRANTEE.

4. MISCELLANEOUS PROVISIONS

01181.0024/914492.1 Page 2 of 3
A. The Caption
The captions of the various sections, paragraphs, and subparagraphs of the Agreement are for convenience only and shall not be considered nor referred to for resolving questions of the interpretation.

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

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

D. No Pledging of GRANTEE'S Credit
Under no circumstances shall GRANTOR have the authority or power to pledge the credit of GRANTEE or incur any obligation in the name of GRANTEE.

E. Venue
This Agreement shall be interpreted, construed and governed both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of San Luis Obispo, State of California, or any other appropriate court in such county, and GRANTOR covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. In the event of litigation in a U.S. District Court, venue shall lie exclusively in the Central District of California, in the County of San Luis Obispo, State of California.

H. Non-liability of GRANTEE Officers and Employees
No officer or employee of GRANTEE shall be personally liable to the GRANTOR, or any successor in interest, in the event of any default or breach by GRANTEE or for any amount which may become due to GRANTOR or to its successor, or for breach of any obligation of the terms of this Agreement. ///
///
///
///
///
///
///

01181.0024/914492.1 Page 3 of 3
I. Interpretation
The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first herein above set forth.

City of Morro Bay Friends of the Morro Bay Harbor Department __________________________ __________________________
Yvonne Kimball, City Manager Bill Luffee, President
_______________________________
Roger Allen, Secretary
APPROVED AS TO FORM:
__________________________
Chris F. Neumeyer, City Attorney
ATTEST:
__________________________
Dana Swanson, City Clerk

QUOTE
Polaris Sales Inc., Medina, MN 55340
[email protected]
Phone: 866-468-7783 Fax: 763-847-8288
www.polaris.com/gov
Name: DANA STEIN
Email: [email protected]
Phone: 8054718318
Fax:

Cage:

Tax ID#:
3FP69
123399383
41-1921490
Duns#:

Customer#:

Morro Bay Harbor Dept, Harbor Patro
1275 Embarcadero Rd
Morro Bay, CA 93442
Ship To:

Bill To: Morro Bay Harbor Dept, Harbor Patro
1275 Embarcadero Rd
Morro Bay, CA 93442
Freight Delivery Terms Payment
Terms
Payment
Methods
FOB Destination-CONUS
US Continental (CONUS) Only 150 Days Net 30
Visa
Mastercard
Wire Check
Item # QTY Description MSRP Discount Price Extended
R24RSE99BZ 1 RANGER Crew XP 1000 -
Desert Sand - CA
$22,099.00 $21,227.31 $21,227.31
9990007 1 Upgrade to White Body Panels $399.99 $399.99
2889020 1 Full-Size Tip-Out Glass
Windshield
$1,475.00 $1,198.98 $1,198.98
2889223 1 Crew Full-Size Poly Sport Roof $812.00 $599.49 $599.49 2883773 1 Full-Size Poly Rear Panel $437.00 $342.56 $342.56 2889811-070 1 Full-Size Crank Window Poly
Front Doors
$3,499.99 $2,997.47 $2,997.47
2889812-070 1 Crew Full-Size Crank Window
Poly Rear Doors
$3,499.99 $2,997.47 $2,997.47
2889640 1 XP 1000 / Crew XP 1000 Mud
Guards
$149.99 $128.45 $128.45
2881386 1 K-WH/TR-REBLR/CRWL28-
BLK
$1,669.99 $1,430.22 $1,430.22
2889237 1 Crew Full-Size Roof Rack -
requires mount
$519.99 $445.33 $445.33
Contact Information
Contract Name: Sourcewell
Contract #:

Expiration Date: 1/29/2025
122220-PSI
Quote Number: QUO-51293-B8G9S3
Revision #: 4
Date: 3/7/2024 12:04 PM
Quote Expires: 4/6/2024
Quote: Page 1 of 2

QUOTE
Polaris Sales Inc., Medina, MN 55340
[email protected]
Phone: 866-468-7783 Fax: 763-847-8288
www.polaris.com/gov
Freight Delivery Terms Payment
Terms
Payment
Methods
FOB Destination-CONUS
US Continental (CONUS) Only 150 Days Net 30
Visa
Mastercard
Wire Check
Item # QTY Description MSRP Discount Price Extended
2889234 1 Crew Full-Size Roof Rack
Mount
$409.99 $351.12 $351.12
2879332 1 12mm Lug Nuts for Aluminium
Rims (Silver) - set of 16
$39.99 $34.25 $34.25
Comments: Sourcewell ID 38899
Vehicle model year and color are subject to change dependent upon delivery date.

SUBTOTAL $32,152.64
INSTALL* $922.50
FREIGHT $0.00
TAX $2,813.36
TOTAL $35,888.50
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To accept the above quotation, please provide a purchase order via email ([email protected]) and include the following:
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Quote: Page 2 of 2

Prepared By: GK, DH, DH__ Dept Review:_GK__
City Manager: ____YK__________ City Attorney: __________ Staff Report
TO: Honorable Mayor and City Council Members DATE: March 12, 2024

FROM: Gregory Kwolek, Public Works Director
Damaris Hanson, Utilities Division Manager
Dan Heimel, Confluence Engineering Solutions
SUBJECT: California State Water Resources Control Board Division of Financial Assistance Minimum Recycled Water Implementation Requirements Letter

RECOMMENDED ACTION
Receive and file the following letter from the California State Water Resources Control Board (SWRCB) Division of Financial Assistance (DFA) Letter regarding the minimum recycled water implementation requirements necessary to satisfy the requirements of the City’s Clean Water State Revolving Fund (SRF) Loan Agreement.

FISCAL IMPACT
Funding for the implementation of the recycled water project is included in the Water Reclamation Facility (WRF) Program Recycled Water Project budget of $9,424,174. Currently, the City anticipates funding these costs through a mixture of funding sources, including the WRF Program Water Infrastructure Finance and Innovation Act (WIFIA) loan, SRF loan, Integrated Regional Water Management (IRWM) grant, and Title XVI grant. However, as stated in the DFA Letter, failure of the City to comply with the terms of the SRF Agreement may be construed as a material breach of the agreement and result in the City needing to immediately reimburse the SWRCB all SRF grant and loan funding (~$66.6 under current agreement or ~$87.7M with execution of SRF Amendment).

BACKGROUND
On November 14th, 2023, the City held a Joint City Council and Public Works Advisory Board (PWAB) Meeting to consider phase 1 implementation strategy recommendations and approval of consultant contract amendments to support the implementation of the recycled water component of the Water Reclamation Facility (WRF) Program. At that meeting, the City Council directed staff to move forward with the recommended initial phase of the Recycled Water Program and initiate environmental, permitting and design activities necessary for program implementation. Included in the motion for approval was an amendment to allow these activities to move forward after the WRF Subcommittee approved a letter prepared by staff to the lending agencies requesting written clarification of the minimum recycled water implementation requirements. In subsequent meetings with the WRF Subcommittee, it was determined that only a letter to the SWRCB DFA was needed as the SRF Loan Agreement was understood to have the most stringent recycled water implementation requirements.

Included as Attachment 1 and Attachment 2 to this staff report are the letter from the City to the DFA requesting confirmation of the minimum implementation requirements to comply with the SRF Loan Agreement terms and conditions and the DFA Response Letter. The requirements AGENDA NO: 7.g
MEETING DATE: March 12, 2024

listed in the DFA Response Letter are consistent with the direction that DFA Staff conveyed to the City during staff level meetings prior to the November 14th, 2023, Joint City Council/PWAB Meeting and include the requirement for the City to construct indirect potable reuse facilities and a recycled water project capable of delivering 412.5 Acre-Feet per Year (AFY) within 5 years of completion of construction to comply with the terms of the SRF Loan Agreement.

NEXT STEPS
With the delivery of the minimum recycled water implementation requirements letter and the confirmation response letter from DFA, City staff is proceeding with the actions outlined in the November 14th, 2023, Joint City Council/PWAB Meeting, which includes initiation of the following activities:
 Archaeological and biological surveys for the recycled water pipeline alignment alternatives and potential injection well locations.
 Environmental review services to complete the necessary California Environmental Quality Act (CEQA) activities to support the implementation of the recycled water program.  Hydrogeologic support services to support the permitting and implementation of the initial phase of the recycled water program.
 Development and release of Requests for Proposals (RFP) for Engineering and Hydrogeological design and construction support services for the recycled water pipelines and injection wells.

ATTACHMENT(S)

1. November 27th, 2023 City Letter Requesting Confirmation of Minimum Recycled Water Implementation Requirements for SRF Loan Agreement

2. February 26th, 2024 SWRCB DFA Letter Confirming Minimum Recycled Water Implementation Requirements for SRF Loan Agreement

From: Greg Kwolek
To: Zellmer, Ashley@Waterboards; Kals, Sandeep@Waterboards Cc: Elaine Simmons; Anthony Cemo; Daniel Heimel; Damaris Hanson Subject: Morro Bay WRF Program Recycled Water Minimum Requirements Date: Monday, November 27, 2023 10:41:23 AM
Dear Ashley and Sunny,
As you know, the City of Morro Bay is finalizing the implementation plan for the Recycled Water component of the Water Reclamation Facility (WRF) Program and as part of the due diligence for completing the implementation plan, the City is reaching out to confirm the minimum implementation requirements of the Clean Water State Revolving Fund (SRF) loan agreement. It is important the City clearly understand the minimum recycled water implementation requirements so that it can implement a recycled water program that meets the City’s near-term water supply reliability/resiliency needs and the requirements of the SRF Program financing agreement all while achieving a minimum impact to the City rate payers, who are ultimately funding the vast majority of the project.

The WRF Program has been a financial pain point for Morro Bay. It is by far the largest public works project ($160m+) the City (pop. 10,700) has ever undertaken. The City has incurred significant costs associated with the property/easement acquisition, environmental mitigation requirements, construction contract change orders, schedule delays, related attorneys fees, a pandemic (i.e., Covid-19 delays and associated labor shortages and supply chain issues), and natural disasters (i.e., historic flooding in winter 2023). Additional information on the constraints and current recommendations for the implementation of the City’s recycled water program can be found in the Joint Public Works Advisory Committee/City Council Meeting Agenda Packet.

Further, the recycled water usage estimate provided in the City’s SRF application was based on an amount of wastewater available under a future buildout condition. However, we are unsure if the City will ever reach this projected amount within the duration of the SRF loan due to increased water usage efficiency, lower than anticipated population growth rates, and potential future population declines in California. These reductions in water demand and associated reductions in wastewater generation may make it difficult for the City to reach the recycled water usage targets included in the City’s SRF application.

As such, the City is seeking written confirmation of the minimum implementation requirements to comply with the terms of the SRF loan agreement. The City also requests consideration for changing the implementation requirements from a minimum volume to a minimum number of wells (i.e., 2), which would align with the implementation requirements of the City’s Water Infrastructure Finance and Innovation Act (WIFIA) loan.

Thank you for your assistance with this request. The City is grateful for your agency’s funding support for the WRF Program, a critical infrastructure project for the community of Morro Bay.

Sincerely,

Greg Kwolek, Public Works Director
City of Morro Bay
Gregory Kwolek
Director of Public Works
City of Morro Bay
(805) 772-6564
[email protected]

Prepared By: _YK _______ Dept Review: ______
City Manager Review: __ YK______ City Attorney Review: ______ Staff Report
TO: Honorable Mayor and City Council DATE: March 6, 2024 FROM: Yvonne Kimball, City Manager
SUBJECT: Authorization to reimburse Council Member Travel Expenses to attend C-MANC Washington Week Meetings

RECOMMENDED ACTION
Approve reimbursement of travel expenses of approximately $2,500 submitted by Mayor Pro Tempore Landrum to be paid from grant funds received from the Central Coast Joint Cable Fisheries Liaison Committee

ALTERNATIVES
Don’t approve reimbursement.

FISCAL IMPACT
The City received grant funding from the Joint Cable Fisheries Liaison Committee in the amount of $8.000.00. Total travel expenses exceeding that amount will be paid from the Harbor Fund.

BACKGROUND/DISCUSSION
In December 2023, the City Council authorized a 3-person delegation including the Mayor, City Manager and Harbor Director to travel to Washington D.C. to attend the 2024 C-MANC Washington Week meetings. The attendance is largely funded by the Central Coast Joint Cable Fisheries Liaison Committee with a grant amount up to $8,000. The total budget estimate for the trip is $12,000. The purpose of the trip has been to advocate city interests at federal level, securing funding for harbor dredging, pier maintenance, and other critical needs with national implications.

Travel plans were made weeks in advance, including registrations to the C-MANC meetings.

However, the day before the departure date, the Harbor Director fell ill and was unable to fly.

Mayor Pro Tempore Landrum is the Council liaison to the Harbor Advisory Committee, and a member of the council Offshore Wind Subcommittee. She was able to join the delegation (literally) at a moment’s notice. As a result, Landrum traveled to Washington DC in place of the Harbor Director, She attended all scheduled meetings, made good connections with elected officials from other harbors and ports, and CMANC colleagues. Detailed reports were included in a separate agenda item. The delegation returned with sufficient information and some critical fund has been secured.

City Council Policy 2.3.1.1 covering Business Travel Expense and Conference Registration requires Mayor and Council Member’s out-of-state travel requires prior approval by the City Council. Given the fact that Mayor Pro Tempore’s travel took place the night before the departing flight, it was AGENDA NO: 7.h
MEETING DATE: March 12, 2024

impossible to schedule a special meeting. Additionally, her travels replaced the originally approved Harbor Director. The difference primarily lies in the air fare cost, which could be up to a few hundreds.

Should council approve the travel expense, any total expense exceeding the grant amount would be paid out of Harbor Fund.

ATTACHMENT(S)
None

Prepared By: _YK _______ Dept Review: ______
City Manager Review: __ YK______ City Attorney Review: ______ Staff Report
TO: Honorable Mayor and City Council DATE: March 7, 2024 FROM: Yvonne Kimball, City Manager
SUBJECT: Key staffing vacancies update

RECOMMENDED ACTION
That the City Council receive an update on key staffing vacancies and provide direction as deemed necessary.

FISCAL IMPACT
None

BACKGROUND/DISCUSSION
City has a 107 full time positions. Employee turnover has been an ongoing issue for all public agencies. Morro Bay is no exception. High turnover costs money impacts operation and challenges morale. In the last six months, City is experiencing new vacancies for some key positions, including Assistant City Manager/Administrative Services Director (ACM/ADS), Engineering Technician, City Engineer, Community Development Director, and Planning Manager.

Although difficult to recruit, both the City Engineer and the Eng Technician have been filled within a reasonable timeframe and are expected to join the City in a few weeks.

The Hiring of director level vacancies such as the ACM/ADS and the Community Development Director position have proven to be more involved. Additionally, the Harbor Director has announced his departure in July. Given the significant roles that these positions play as well as common recruitment challenges, I have chosen a deliberate approach to ensure that we find the right fit that can assist my team and myself to achieve City Council’s goals. This approach includes needs assessment (though reviews of existing studies, meetings with employees, advisory committee members, council members and other stakeholders), evaluation of organization strength / weakness, budget evaluation, revising job descriptions, monitoring hiring trends and connecting with recruiters.

We are fortunate to have obtained experienced Interim Directors to help filling the hiring gaps temporarily. Their expertise and leadership have allowed strategic execution of recruitment for both the ACM/ASD and the CDD positions. One significant step forward the ultimate hiring is in tonight’s meeting agenda: approval of resolutions to reinstate the Finance Director position, its updated job description, pay schedule, and an increased pay schedule for CD Director. Once Council approves the above, both positions are expected to be filled within normal timeframes from this point on.

AGENDA NO: 9a
MEETING DATE: March 12, 2024

In terms of the Harbor Department, we are taking a similar team approach to prepare for imminent changes. For years, there have been discussions concerning restructuring Harbor Department to delineate its functions in business and lease operations away from the traditional harbor and water rescue operations. The current Harbor Director also recommended to visit this suggestion in his transition plan. I’m pleased to report that Harbor, Police, Fire, Community Development and Finance are jointly working on recommendations concerning Harbor’s next chapter, including the status quo, or possible restructuring. Some immediate goals in our discussions are how to enhance resources available to the Habor functions and increase training and leadership opportunities for harbor employees. I am confident that this collaboration approach will lead a solid path forward for harbor operations and the city as a whole. More details are to follow.

I want to add that I find immense support and guidance from my exceptionally talented Executive Team and my dedicated City Council in the journey of navigating uncertainties. Collaboration and teamwork will continue to be the key to our future success.

ATTACHMENT(S)
None

Prepared By: _YK _______ Dept Review: ______
City Manager Review: __ YK______ City Attorney Review: ______ Staff Report
TO: Honorable Mayor and City Council DATE: March 7, 2024 FROM: Yvonne Kimball, City Manager
SUBJECT: Approval of Finance Director Job Description and revised Salary Schedule

RECOMMENDED ACTION
Adopt Resolution No. 20-24 reinstating the Finance Director Job Classification and Job Description and approve pay schedule, and adopt Resolution No. 21-24 approving a revised FY 23-24 pay schedule including the Finance Director Classification and increasing the salary for the Community Development Director to align with other Morro Bay director positions.

FISCAL IMPACT
None

BACKGROUND/DISCUSSION
The Assistant City Manager/Administrative Services Director position was created in June 2021 and occupied until October 2023. Following a robust recruitment for the dual role position, we were unsuccessful in finding a suitable candidate. Upon evaluating city’s needs and with community input, I have decided to recommend Council to consider reinstatement of the position of Finance Director, which was in existence from 2016 to 2021 until its replacement by the ACM/ASD position. This would clarify the position’s focus on city’s finance needs and attracts individuals with commensurate skills in municipal finance.

A revised job description for Finance Director is expected for City Council approval. The pay scale for this position remains the same with the ACM/ASD position.

Also included in the Reso requesting salary approval is the Community Development Director position. This department head position has been receiving a pay scale slightly lower than other department heads. It is recommended to increase the scale to be the same as the other director positions, ie. the Finance Director, and the Public Works Director. This adjustment will help with the recruitment of the vacant CD Director position. The Harbor Director, the Police Chief and the Fire Chief are at a different scale.

ATTACHMENT(S)

1. Resolution No. 20-24 Adopting Finance Director Position and Job Description

2. Resolution No. 21-24 adopting Updated FY 23-24 Pay Schedule AGENDA NO: 9.b
MEETING DATE: March 12, 2024

01181.0004/762865.1
RESOLUTION NO. 20-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA,

APPROVING FINANCE DIRECTOR CLASSIFICATION

AND JOB DESCRIPTION

T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, the Council desires to approve a new “Finance Director” job classification, set a compensation range for the classification, and adopt a job description for the unrepresented Director position.

NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Morro Bay does hereby:

1. The unrepresented full-time classification of “Finance Director” is hereby re-instated. The classification will be included within the City’s Unrepresented Department Head Group. The job description for this classification has been updated, attached hereto, is hereby adopted. The initial annual compensation for the Finance Director classification shall be as follows:

Step 1 Step 2 Step 3 Step 4 Step 5
149,829 157,320 165,186 173,445 182,118
PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on the 12th day of March 2024 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

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

City of Morro Bay Finance Director
March 12, 2024
City of Morro Bay
Finance Director
Definition
Under the administrative direction of the City Manager, plans, organizes, manages, and provides administrative direction and oversight for all functions and activities of the Administrative Services Department, including auditing, purchasing, accounts payable, payroll processing, budgeting, general accounting, cash management, utility billing, business licenses, and information technology; directs and administers the fiscal operations and activities of the City, which include investments, financial transaction processing, record keeping and reporting, and payroll; coordinates the development and administration of the City's budget; coordinates assigned activities with other City departments, officials, outside agencies, and the public; fosters cooperative working relationships among City departments and with intergovernmental and regulatory agencies and various public and private groups; provides highly responsible and complex professional assistance to the City Manager in areas of expertise; and performs related work as required.

Supervision Received and Exercised
Works under the City Manager's general direction, engaging in regular and ongoing collaboration with other department heads and key staff. Exercises general direction and supervision over professional, technical and clerical personnel as assigned.

Class Characteristics
This is a department head classification that oversees, directs, and participates in all activities of the Administrative Services Department, including short- and long-term planning, development, and administration of departmental policies, procedures, and services. This class aids the City Manager in a variety of administrative, coordinative, analytical, and liaison capacities, as well as interfacing with other departments, the city council, the Citizens Oversight /Finance Advisory Committee (or other similar committee), investment advisors, banking representatives, and other parties.

Examples of Essential Job Functions
 Assumes full management responsibility for all Administrative Services Department programs, services, and activities, including finance, budgeting, financial reporting, payroll processing, accounts payable, general accounting, utility billing, business licenses, and information technology.  Develops, directs, and coordinates the implementation of goals, objectives, policies, procedures, and work standards for the department; establishes, within City policy, appropriate budget, service, and staffing levels.  Manages departmental personnel including selection, training, evaluation, development, and performance management.

City of Morro Bay Finance Director
March 12, 2024
 Prepares and administers annual departmental operating budget; manages operations to achieve goals within available resources.  Invests City funds, acts as the City Treasurer, manages the City's investment portfolio; ensures that investments meet the City's policy guidelines, and that adequate cash is available to meet obligations; prepares periodic reports regarding investments to the City Council.
 Collaborates with other City departments or divisions to manage City-owned properties, including lease negotiations, billing and payment of rent for various city-owned property.
 Acts as the city’s purchasing agent.
 Assist the City Manager to act as the Economic Development liaison to various agencies, including Visit Morro Bay and the Morro Bay Chamber of Commerce.
 Administer the City’s utility billing, business tax collection, accounts receivable, and cashier/public counter activities.
 Coordinates the development and administration of the City’s annual budget; provides for financial forecasting and planning; tracks the adopted budget and prepares periodic budget reviews for submission to City departments.  Establishes the City's central budgeting, accounting, and financial reporting practices; evaluates accounting procedures and financial controls; responds to and implements audit recommendations.
 Coordinates the City’s annual audit and special audits; oversees the preparation of the City’s Annual Comprehensive Financial Report (ACFR), state controllers’ reports, and other required annual reports and statements.  Oversees the City's Information Technology resources and function, including the purchase and implementation of new computer hardware and software, the management of all computer servers, and ensuring the security of the City's IT system; oversees and manages technical services to keep the City's IT system technologically up-to-date and operating efficiently and reliably.  Represents the Administrative Services Department to other City departments, elected officials, and outside agencies; explains and interprets departmental programs, policies, and activities; negotiates and resolves significant and controversial issues.
 In collaboration with other departments, responsible for the financial performance and reporting for major projects.
 Participates in, prepare staff reports for and makes presentations to the City Council and represents the city on a variety of boards and commissions; attends and participates in professional group meetings; stays abreast of new trends and innovations in the field of administrative services and other services as they relate to the area of assignment.
 Maintains and directs the maintenance of working and official departmental files.
 Responds to difficult and sensitive public inquiries and complaints and assists with resolutions and alternative recommendations.
 Performs other duties as assigned.

City of Morro Bay Finance Director
March 12, 2024
Qualifications

Knowledge of:

Principles, problems, and methods of public and business administration, as applied to a municipality; general municipal revenue and public financing; governmental accounting principles and practices; public purchasing requirements and procedures; laws, regulations, and ordinances affecting fiscal operations and audits; auditing principles and practices; technology related to computerized financial systems; basic terminology, methods, and practices of the operation and maintenance of computer servers, network systems and personal computer hardware and software; principles of supervision and training; investment portfolio management.

Ability to:
 Plan, organize and direct the activities of a centralized financial service department.
 Understand, interpret, and apply laws, regulations, policies, and professional practices; clearly articulate complex concepts, laws, regulations, and processes; analyze and make recommendations on complex financial matters.  Prepare effective written reports and present findings.  Interpret and apply Generally Accepted Accounting Principles (GAAP).  Organize human resources and develop and or re-engineer systems and procedures for efficiency and effectiveness.
 Develop goals and objectives and prepare plans to accomplish them.  Lead and motivate staff.
 Communicate effectively with Council, staff members and the public.  Recognize the need for awareness of and sensitivity to environmental issues and programs for economic and social consideration.
 Interpret political and administrative direction and incorporate it into operational policy and procedures.
 Establish and maintain effective relationships with the City officials, employees, other governmental and community organizations, and the public.
 Demonstrate a high level of proficiency in various software applications, including spreadsheets, databases, and presentation software.

Education and Experience:

Graduation from an accredited four-year college or university with major coursework in finance, accounting, business or public administration, or a related field and seven (7) years of increasingly responsible experience, including supervisory experience, preferably in municipal administration. At least four (4) years of finance experience and experience working with financial management data processing systems is required. Applicants with any equivalent combination of education and experience would be considered.

City of Morro Bay Finance Director
March 12, 2024
Licenses and Certifications:

Possession of, or ability to obtain, a valid California Driver's License by time of appointment. A Certified Public Accountant (CPA) designation is highly desirable.

The Fine Print:

Physical Demands
Must possess mobility to work in a standard office setting and use standard office equipment, including a computer; to operate a motor vehicle; and to visit various City and meeting sites; vision to read printed materials and a computer screen; and hearing and speech to communicate in person, before groups, and over the telephone. This is primarily a sedentary office classification although standing in and walking between work areas may be required. Finger dexterity is needed to access, enter, and retrieve data using a computer keyboard or calculator and to operate standard office equipment. Positions in this classification occasionally bend, stoop, kneel, reach, push, and pull drawers open and closed to retrieve and file information. Employees must be able to lift, carry, push, and pull materials and objects necessary to perform job functions.

Work Environment
Employees work in an office environment with moderate noise levels, controlled temperature conditions, and no direct exposure to hazardous physical substances. Employees may interact with upset staff and/or public and private representatives in interpreting and enforcing departmental policies and procedures.

Duties Statement
The duties listed are intended only as illustrations of the various types of work that may be performed.

The omission of specific statements of duties does not exclude them from the position if the work is similar, related or a logical assignment to the position. The job description does not constitute an employment agreement between the employe and employee and is subject to change by the employer as the employer's needs and requirements of the job change.

RESOLUTION NO. 21-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA,
SUPERSEDING AND REPLACING RESOLUTION NO. 13-24 AND APPROVING THE UPDATED FISCAL YEAR 2023-2024 CITY-WIDE PAY SCHEDULE

T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, Section 36506 of the California Government Code requires that the City Council fix compensation of all appointive officers and employees by resolution or ordinance; and WHEREAS, Morro Bay Municipal Code Title 2, Chapter 2.20, Section 2.20.020 requires that the salaries and compensation of officers and employees of the City shall be as fixed and determined by resolution of the City Council, after due consideration of employees’ bargaining rights, as established by the Meyers-Milias-Brown Act, except those fixed in this chapter; and WHEREAS, the California Public Employees’ Retirement System (CalPERS), has requested all CalPERS employers list their employee compensation on one pay schedule document, approved and adopted by the governing body, in accordance with 2 California Code of Regulations (CCR), section 570.5, and meeting all of the following requirements thereof:

1. Has been duly approved and adopted by the employer’s governing body in accordance with requirements of applicable public meetings laws;

2. Identifies the position title for every employee position;

3. Shows the pay rate for each identified position, which may be stated as a single amount or as multiple amounts within a range;

4. Indicates the time base, including, but not limited to, whether the time base is hourly, daily, bi-weekly, monthly, bi-monthly, or annually;

5. Is posted at the office of the employer or immediately accessible and available for public review from the employer during normal business hours or posted on the employer’s internet website;

6. Indicates an effective date and date of any revisions;

7. Is retained by the employer and available for public inspection for not less than five years; and

8. Does not reference another document in lieu of disclosing the pay rate; and WHEREAS, the Council desires to reinstate the unrepresented Finance Director job classification and assign an appropriate pay scale; and WHEREAS, the Council desires to adjust the Community Development Director’s pay to align with the Public Works Director and the Finance Director.

WHEREAS, the formal approval of the updated and revised pay schedules requires that they are duly approved and adopted by the City Council by resolution, and the 2 CCR 570.5 regulation requires the adoption of a revised and updated Pay Schedule for Fiscal Year 2023-24, attached as Exhibit A and incorporated herein by reference.

NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Morro Bay does hereby:

1. Resolution No. 13-24 shall be superseded and replaced by this resolution, and

2. The Combined Pay Schedules, attached hereto as Exhibit A shall be effective the pay period ending March 15, 2024.

PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on the 12
th day of March 2024 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

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

SEIU LOCAL 620
STEP 1
Hourly
STEP 2
Hourly
STEP 3
Hourly
STEP 4
Hourly
STEP 5
Hourly
ACCOUNT CLERK IN-TRAINING 18.06 18.97 19.92 20.91 21.96 ACCOUNT CLERK I 21.84 22.93 24.08 25.28 26.54
CONSOLIDATED MAINTENANCE WRK I 21.84 22.93 24.08 25.28 26.54 OFFICE ASST. III 21.84 22.93 24.08 25.28 26.54
OFFICE ASST. IV 23.61 24.79 26.03 27.33 28.70
ACCOUNT CLERK II 24.53 25.76 27.04 28.40 29.82
CONSOLIDATED MAINTENANCE WRK II 24.53 25.76 27.04 28.40 29.82 ACCOUNT CLERK III 26.27 27.59 28.97 30.41 31.93
CONSOLIDATED MAINTENANCE WRK III 26.27 27.59 28.97 30.41 31.93 ADMINISTRATIVE TECHNICIAN 26.74 28.07 29.48 30.95 32.50 BUILDING PERMIT TECHNICIAN I 26.74 28.07 29.48 30.95 32.50 SUPPORT SERVICES TECHNICIAN 26.74 28.07 29.48 30.95 32.50 PROPERTY EVIDENCE CLERK 26.74 28.07 29.48 30.95 32.50
COMMUNITY SERVICES OFFICER 26.74 28.07 29.48 30.95 32.50 MECHANIC 27.59 28.97 30.42 31.94 33.54
RECREATION COORDINATOR 27.59 28.97 30.42 31.94 33.54
ENGINEERING TECHNICIAN III 31.25 32.81 34.46 36.18 37.99 MAINTENANCE LEADWORKER 31.25 32.81 34.46 36.18 37.99
BUILDING PERMIT TECHNICIAN II 31.25 32.81 34.46 36.18 37.99 UTILITY OPERATOR 31.30 32.87 34.51 36.23 38.05
UTILITY SUPPORT COORDINATOR 31.30 32.87 34.51 36.23 38.05 ASSISTANT PLANNER 32.55 34.17 35.88 37.68 39.56
BUILDING INSPECTOR 32.70 34.34 36.05 37.86 39.75
BUILDING INSPECTOR/CODE ENF OFFICER 32.70 34.34 36.05 37.86 39.75 RECREATION SUPERVISOR 32.81 34.46 36.18 37.99 39.89
HARBOR PATROL OFFICER 32.89 34.54 36.26 38.08 39.98
UTILITY OPERATOR MC (MULTIPLE CERT) 33.49 35.17 36.92 38.77 40.71 IT SYSTEMS ANALYST 36.60 38.43 40.35 42.37 44.49
ENGINEERING TECHNICIAN IV 36.60 38.43 40.35 42.37 44.49 ASSISTANT ENGINEER 36.60 38.43 40.35 42.37 44.49
ASSOCIATE PLANNER 36.60 38.43 40.35 42.37 44.49
BUILDING INSPECTOR/PLANS EXAMINER 36.60 38.43 40.35 42.37 44.49 CONSOLIDATED MAINT FIELD SUPV 36.60 38.43 40.35 42.37 44.49 PUBLIC WORKS INSPECTOR 36.60 38.43 40.35 42.37 44.49
HARBOR BUSINESS COORD 37.09 38.94 40.89 42.93 45.08
LEAD UTILITY OPERATOR 37.30 39.17 41.12 43.18 45.34
OPERATIONAL TECHNOLOGY SPECIALIST 39.16 41.12 43.17 45.33 47.60 HARBOR PATROL SUPERVISOR 40.63 42.66 44.79 47.03 49.38
ASSOCIATE ENGINEER 42.09 44.19 46.40 48.72 51.16
WASTEWATER SYSTEMS SUPV 42.09 44.19 46.40 48.72 51.16
MORRO BAY PEACE OFFICERS' ASSOC.

STEP 1
Hourly
STEP 2
Hourly
STEP 3
Hourly
STEP 4
Hourly
STEP 5
Hourly
STEP 6
Hourly
POLICE OFFICER 36.60 38.43 40.35 42.37 44.49 46.71
POLICE DETECTIVE 38.43 40.35 42.37 44.49 46.71 49.05
POLICE SCHOOL RESOURCE OFFICER 38.43 40.35 42.37 44.49 46.71 49.05 POLICE SENIOR OFFICER 38.43 40.35 42.37 44.49 46.71 49.05 POLICE SERGEANT 46.92 49.27 51.73 54.32 57.03 59.89
City of Morro Bay Pay Schedule Fiscal Year 2023/2024 Effective 3/12/2024

MORRO BAY FIRE FIGHTERS ASSOC.

STEP 1
Hourly
STEP 2
Hourly
STEP 3
Hourly
STEP 4
Hourly
STEP 5
Hourly
FIREFIGHTER 23.92 25.12 26.37 27.69 29.08
FIREFIGHTER/PARAMEDIC 26.31 27.63 29.01 30.46 31.98
FIRE ENGINEER 26.15 27.46 28.83 30.27 31.79
FIRE ENGINEER/PARAMEDIC 28.77 30.21 31.72 33.30 34.97
FIRE CAPTAIN 30.06 31.56 33.14 34.80 36.54
FIRE CAPTAIN/PARAMEDIC 33.07 34.72 36.46 38.28 40.19
FIRE MARSHAL 49.96 52.46 55.08 57.84 60.73

UNREPRESENTED CONFIDENTIAL
STEP 1
Hourly
STEP 2
Hourly
STEP 3
Hourly
STEP 4
Hourly
STEP 5
Hourly
HUMAN RESOURCES ANALYST I 30.44 31.96 33.56 35.23 36.99 EXECUTIVE ASSISTANT/DEPUTY CLERK 32.70 34.34 36.05 37.86 39.75 SENIOR ACCOUNTING TECHNICIAN 33.99 35.69 37.48 39.35 41.32 FISCAL ANALYST 36.60 38.43 40.35 42.37 44.49
HUMAN RESOURCES ANALYST II 36.60 38.43 40.35 42.37 44.49

UNREPRESENTED MANAGEMENT
STEP 1
Annual
STEP 2
Annual
STEP 3
Annual
STEP 4
Annual
STEP 5
Annual
MANAGEMENT ANALYST 77,732 81,618 85,699 89,984 94,483
POLICE SUPPORT SERVICES MANAGER 77,732 81,618 85,699 89,984 94,483 CITY CLERK 90,903 95,448 100,221 105,232 110,494
MAINTENANCE SUPERINTENDENT 90,903 95,448 100,221 105,232 110,494 ENVIRONMENTAL PROGRAMS MANAGER 90,903 95,448 100,221 105,232 110,494 INFORMATION SYSTEMS TECHNICIAN 90,903 95,448 100,221 105,232 110,494 RECREATION SERVICES MANAGER 90,903 95,448 100,221 105,232 110,494 SR. ADMINISTRATIVE SERVICES ANALYST 90,903 95,448 100,221 105,232 110,494 SENIOR PLANNER 90,903 95,448 100,221 105,232 110,494
CHIEF BUILDING INSP/PLANS EXAMINER 90,903 95,448 100,221 105,232 110,494 PLANNING MANAGER 99,994 104,994 110,243 115,755 121,543 HUMAN RESOURCES/RISK MANAGER 99,994 104,994 110,243 115,755 121,543 FINANCE MANAGER 99,994 104,994 110,243 115,755 121,543
SENIOR CIVIL ENGINEER 99,994 104,994 110,243 115,755 121,543 CITY CLERK/HR MANAGER 116,450 122,272 128,386 134,805 141,546 CITY ENGINEER 117,844 123,737 129,924 136,420 143,241
UTILITY DIVISION MANAGER 117,844 123,737 129,924 136,420 143,241 OPERATIONS INTERFACE MANAGER 117,844 123,737 129,924 136,420 143,241 FIRE MARSHAL/DIVISION CHIEF 121,470 127,543 133,921 140,617 147,647 POLICE COMMANDER 132,305 138,920 145,866 153,159 160,817

DEPARTMENT HEADS/EXECUTIVE
STEP 1
Annual
STEP 2
Annual
STEP 3
Annual
STEP 4
Annual
STEP 5
Annual
COMMUNITY DEVELOPMENT DIRECTOR 149,829 157,320 165,186 173,445 182,118 FINANCE DIRECTOR 149,829 157,320 165,186 173,445 182,118 PUBLIC WORKS DIRECTOR 149,829 157,320 165,186 173,445 182,118 HARBOR DIRECTOR 152,623 160,254 168,267 176,680 185,514 FIRE CHIEF - sworn 152,623 160,254 168,267 176,680 185,514 POLICE CHIEF - sworn 152,623 160,254 168,267 176,680 185,514 CITY MANAGER 201,946 206,995 212,170 217,474 222,911