Morro Bay City Council
April 9, 2024

CITY OF MORRO BAY
City Council Regular Meeting Agenda

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

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

Alternatively, members of the public may watch the meeting and speak during general Public Comment or on a specific agenda item by logging into the Zoom webinar using the information provided below. Please use the "raise hand" feature to indicate your desire to provide public comment.
•
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

5.a Sexual Assault Awareness Month Proclamation

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.
•
Your participation in City Council meetings is welcome and your courtesy will be appreciated.
•
The Council in turn agrees to abide by its best practices of civility and civil discourse according to Resolution No. 07-19.
•

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.e as submitted.

7.a Approval of Minutes

(City Clerk)
Recommended Action
Approve as submitted.

1. March 26, 2024 - Regular Council Meeting 6

2. March 26, 2024 - Special Closed Session Meeting 11

7.b Adoption of Resolution No. 22-24 Initiating Proceedings to Levy the Annual Assessment for the North Point Natural Area - Landscaping and Lighting Maintenance Assessment District
13 (Public Works Department)
Recommended Action
Adopt Resolution No. 22-24 ordering the preparation of an Engineer’s Report detailing the expenses projected for Fiscal Year 2024/25 for the maintenance of the North Point Natural Area under the provisions of the “Landscaping and Lighting Act of 1972.”

7.c Adoption of Resolution No. 23-24 Initiating Proceedings to Levy the Annual Assessment for the Cloisters Park and Open Space - Landscaping and Lighting Maintenance Assessment District 18 (Public Works Department)
Recommended Action
Adopt Resolution No. 23-24 ordering the preparation of an Engineer’s Report detailing the expenses projected for Fiscal Year 2024/25 for the maintenance of the Cloisters Park and Open Space under the provisions of the “Landscaping and Lighting Act of 1972.”

7.d Adoption of Resolution No. 24-24 Approving Amendment #1 to the Interim Lease Agreement with Todd Baston and Tamara Gray-Baston, for Lease Site 62/62W located at 551 Embarcadero
23 (Harbor Department)
Recommended Action
Adopt Resolution No. 24-24, approving Amendment #1 to the Interim Lease Agreement with Todd Baston and Tamara Gray-Baston, for Lease Site 62/62W located at 551 Embarcadero.

7.e Proclamation Declaring April 2024 as Sexual Assault Awareness Month 29 (Administration)
Recommended Action
Approve as submitted.

8. PUBLIC HEARING ITEMS
None

9. BUSINESS ITEMS

9.a Approval of Contract Closeout Amendment No. 10 for FBV Agreement 30 (Public Works Department)
Recommended Action
Review and approve the closeout of the agreement among the City of Morro Bay and its design build contractor for the Water Resources Center (WRC), KS Overland Contracting, Inc. and J.R. Filanc Construction Company, Inc., collectively, aka FBV Morro Bay Joint Venture (FBV), as outlined in Amendment No. 10.

9.b Approve WRF Close-out Agreement Contract Amendment for Anvil Builders, Inc. and Settlement Agreement
49 (Public Works Department)
Recommended Action
Authorize the City Manager to execute Amendment No. 9 to the agreement with Anvil Builders, Inc. (Anvil) for the Water resources Center (WRC) Lift Stations and Offsite Pipelines (Conveyance Facilities) construction for $880,000 and the accompanying settlement agreement, which results in a total not to exceed contract amount of $37,264,606.

9.c Consideration of Introduction and First Reading of Ordinance No. 667 Adding Chapter 2.48 to Title 2 of the Morro Bay Municipal Code Relating to Electronic and Paperless Filing of Campaign Disclosure Statements and Statement of Economic Interests
69 (City Clerk)
Recommended Action
Introduce for first reading by title only, with further reading waived, Ordinance No. 667: An Ordinance of the City Council of the City of Morro Bay, Adding Chapter 2.48 to Title 2 of the Morro Bay Municipal Code Relating to Electronic and Paperless Filing of Campaign Disclosure Statements and Statements of Economic Interests to the Morro Bay Municipal Code.

10. COUNCIL DECLARATION OF FUTURE AGENDA ITEMS

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

This agenda is subject to amendment up to 72 hours prior to the date and time set for the meeting. Please refer to the agenda posted at City Hall, 595 Harbor Street, Morro Bay, CA 93442 for any revisions or call the Clerk's office at (805) 772-6205 for further information.

Materials related to an item on this agenda submitted to the City Council after

distribution of the agenda packet are available for public inspection upon request by calling the City Clerk's office at (805) 772-6205.

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

1 MINUTES - MORRO BAY CITY COUNCIL

REGULAR MEETING
March 26, 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 Finance Director Emily Conrad
Public Works Director Greg Kwolek
Interim Comm Dev Director Michael Codron
Police Chief Amy Watkins
Fire Chief Dan McCrain
Harbor Director Ted Schiafone
_____________________________________________________________________

1. ESTABLISH QUORUM AND CALL TO ORDER
Mayor Wixom called the meeting to order at 5:37 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/L3BEIA2LDgk?si=fzePWJJ-OKJUHSuU&t=92

4.c City Manager Reports, Announcements and Presentations https://youtu.be/L3BEIA2LDgk?si=oTYspQnejlB7MxDu&t=2210

2 5. RECOGNITION AND PRESENTATIONS

5.a Month of the Child and Child Abuse Prevention Month Proclamation https://youtu.be/L3BEIA2LDgk?si=5MUzViJQqYzUYazH&t=605
The Proclamation was presented to Shana Paulson, Council Member of the Early Care and Education Planning Council.

5.b San Luis Obispo Council of Governments (SLOCOG) Presentation on Countywide Self-Help Transportation Measure
https://youtu.be/L3BEIA2LDgk?si=kixG4IqaxVpBYNHe&t=991

6. PUBLIC COMMENT
https://youtu.be/L3BEIA2LDgk?si=4OVoCew2M8fhKMt-&t=2838  Linda Winters, Morro Bay, shared her hopes for Morro Bay's future.  Natalie Teichmann and Jon Nowaczyk, Let's Get Tuned, provided a business update.
 Casey Cordes, Morro Bay, questioned information being presented by REACT Alliance about the effects of offshore wind development.  David Yohe, Morro Bay, commented on a presentation by REACT Alliance to the San Luis Obispo County Board of Supervisors and the importance of remaining engaged on the potential impacts of offshore wind development.
 Wynde Dyer, Morro Bay, stated her opposition to offshore wind development.
 Kathleen McCollum, Cambria, spoke against offshore wind farms.  Barry Rands, San Luis Obispo, responded to information being offered regarding the impacts of offshore wind and announced an upcoming event hosted by Citizens' Climate Education on April 6, from 10:00 a.m. to Noon at the Morro Bay Library.
 June McIvor, San Luis Obispo, submitted a recent Tribune article disputing claims made regarding negative impacts of offshore wind and urged the City to be thoughtful and deliberate when considering potential benefits of offshore wind development.
 Mandy Davis, Paul Gallo, Betty Winholtz, Nicole Dorfman, Sheri Hafer, Andrea Lueker, David Raichart and Melissa Beach from REACT Alliance, presented information regarding the negative impacts Offshore Wind Energy may have on the environment, economy and culture.

3  Don Maruska, announced Climate Solutions Community Forum on Saturday, April 6th from 2:00-4:00 p.m. at St. Benedict's Episcopal Church in Los Osos.
 Laura Fiedler, California Community Affairs Director for Equinor, offered to follow-up with Council Members, staff and members of the public regarding the proposed Atlas Wind project. Visit atlaswind.com or contact [email protected] for more information.
 Ted Key, Cambria, spoke in support of REACT Alliance and concerns raised by the Northern Chumash Tribe regarding anticipated impacts offshore wind would have on their tribal lands.
 Victoria Young, Los Osos Middle School student, read a quote by Dr.

Miles Bidwell from Columbia University regarding offshore wind.  Margaret Carman, Morro Bay, requested Council review information provided on information cards prepared by REACT Alliance.  Michelle Leister-Cadaret, Morro Bay, read a statement submitted to the CEC opposing offshore wind.
 Terry Simons, Morro Bay, stated the importance of having consultants in Washington D.C. express the community's concerns regarding offshore wind and raised questions regarding the 1/2 cent sales tax measure presented by SLOCOG.
 An unnamed resident commented on Morro Bay's voter turnout and failures of those in authority.
 Susan, a retired NASA employee, expressed concern about misinformation being promoted by REACT Alliance.

End of public comment.

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.
https://youtu.be/L3BEIA2LDgk?si=kewht02oqRi3T1ja&t=7438  An unnamed resident commented on the Month of the Child and Fair Housing Month proclamations.

End of public comment.

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

4 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. March 12, 2024 - Special Closed Session Meeting
b. March 12, 2024 - Regular City Council Meeting

7.b Authorization to Apply for and Accept the Grant, if awarded, from the Department of Homeland Security and Federal Emergency
Management Agency for funding under the Staffing for Adequate Fire and Emergency Response (SAFER) Grant
Authorize the Fire Department to apply for and accept the grant, if awarded, of funding under the Staffing for Adequate Fire and Emergency Response (SAFER) Grant from the Department of Homeland Security and Federal Emergency Management Agency for the hiring of limited term Firefighters. This application would be for two (2) Firefighter positions to increase daily staffing to five (5) Firefighters.

7.c Approval of Assignment and Assumption Agreement, transferring Lease Site 129W-131W located at 1231 Embarcadero from Morro Bay Fish Company to Morro Bay Seafood Company and Approval of Settlement and Release Agreement with Morro Bay Fish Company Approve the Assignment and Assumption Agreement transferring Lease Site 129W-131W located at 1231 Embarcadero from Morro Bay Fish Company to Morro Bay Seafood Company for the remainder lease term which ends on June 30, 2025, and authorize the Mayor to execute a Settlement Agreement and Release of all claims with Morro Bay Fish Company.

7.d Approval of Lease Agreements between the City of Morro Bay and Orietta M. DeGarimore, as Trustee of Michael G. and Orietta M.

DeGarimore Revocable Trust for Lease Sites 105.1W/105.2 and Lease Sites 102/102W
Approve the Lease Agreement by and between the City of Morro Bay and Orietta M. DeGarimore, as Trustee of Michael G. and Orietta M.

DeGarimore Revocable Trust for Lease Sites 105.1W/105.2 and Lease Sites 102/102W.

7.e Proclamation Declaring April 2024 as Month of the Child and Child Abuse Prevention Month
Approve as submitted.

5 7.f Proclamation Declaring the month of April as Fair Housing Month Approve as submitted.

8. PUBLIC HEARING ITEMS
None

9. BUSINESS ITEMS
None

10. COUNCIL DECLARATION OF FUTURE AGENDA ITEMS
https://youtu.be/L3BEIA2LDgk?si=mRLjV2cnHxdFpL6L&t=7698 Council Member Landrum requested and received majority support for discussion and consideration of a resolution opposing AB 2560, proposed legislation that would eliminate the exemption of the Coastal Zone from the State's Density Bonus Law.

11. ADJOURNMENT
The meeting adjourned at 7:47 p.m.
/s/ Dana Swanson, City Clerk

1 MINUTES - MORRO BAY CITY COUNCIL

CLOSED SESSION MEETING
March 26, 2024, 3:00 p.m.

City Hall Conference Room
595 Harbor Street, Morro Bay, CA 93442
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
Public Works Director Greg Kwolek
Ken Wilkins, Carollo Engineers
Anthony Cemo, Carollo Engineers
_____________________________________________________________________

1. ESTABLISH QUORUM AND CALL TO ORDER
Mayor Wixom called the meeting to order at 3:00, with all but Council Member Barton present. Council Member Barton joined the meeting at 3:09 p.m.

2. SUMMARY OF CLOSED SESSION ITEMS

3. CLOSED SESSION PUBLIC COMMENT
Mayor Wixom opened public comment for items on the agenda; seeing none, the public comment period was closed.

4. THE COUNCIL WILL CONVENE IN CLOSED SESSION
Conduct an employee evaluation of the City Manager pursuant to Government Code section 54957

4.a CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code subdivision 54956.9(d)(2)

4.b PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Conduct an employee evaluation of the City Manager pursuant to Government Code section 54957

2 5. 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.

6. ADJOURNMENT
The meeting adjourned at 5:25 p.m.

Respectfully submitted,
/s/ Dana Swanson, City Clerk

Prepared By: GK Dept Review: __GK___
City Manager Review: _YK_ __ City Attorney Review: __ CFN____ Staff Report
TO: Honorable Mayor and City Council DATE: April 2, 2024 FROM: Greg Kwolek, Public Works Director
SUBJECT: Adoption of Resolution No. 22-24 Initiating Proceedings to Levy the Annual Assessment for the North Point Natural Area - Landscaping and Lighting Maintenance Assessment District

RECOMMENDED ACTION
Adopt Resolution No. 22-24 ordering the preparation of an Engineer’s Report detailing the expenses projected for Fiscal Year 2024/25 for the maintenance of the North Point Natural Area under the provisions of the “Landscaping and Lighting Act of 1972.”

ALTERNATIVE
Staff does not recommend any alternative direction.

FISCAL IMPACT
If approved by Council, the FY2024/25 assessments are estimated to provide $5,645 for the maintenance of the North Point Natural Area.

BACKGROUND
On June 27, 1994, the City Council accepted Lot 11 of the North Point subdivision and accepted the final map for Tract 2110. As per the conditions of approval, a Landscaping and Lighting Maintenance Assessment District was formed for the ongoing maintenance of the 1.3-acre natural area. The area includes a non-irrigated meadow area, decomposed granite and asphalt walkways, stairway/beach access, parking lot, drip irrigation system, public access signage and parking lot.

On December 9, 1996, the City Council adopted Resolution No. 89-96, which ordered the formation of the North Point Landscaping and Lighting Maintenance Assessment District and confirmed the yearly assessment of $5,645. On January 13, 1997, the City Council adopted Resolution No. 01-97, which approved and accepted the on- and off-site improvements for Tract 2110. By adoption of Resolution No. 01-97, the City officially started the maintenance of the North Point Natural Area.

After the initial formation of the assessment district, each year, for the assessment to continue, the City must adopt a series of three resolutions to confirm the levy of assessment for the AGENDA NO: 7.b
MEETING DATE: April 9, 2024

2 upcoming fiscal year. The first resolution, which is the one being proposed by this staff report, initiates the annual levy process and orders the preparation of an Engineer’s Report; the second resolution approves the Engineer’s Report and notices the intent to levy the assessment; and the third resolution levies the assessment for the upcoming fiscal year.

DISCUSSION
Upon adoption of Resolution No. 22-24, which initiates the proceedings to levy the annual assessment, an Engineer’s Report will be prepared for review, modification, acceptance or rejection at the May 14, 2024 City Council meeting. At that meeting will be a resolution for consideration declaring the City Council’s intent to levy and collect the assessment. That Resolution will list the improvements, names the district and gives its general location; it also refers to the proposed assessment and gives notice of the time and place for a meeting regarding the levy of the continuing assessment. The Government Code states the third and final meeting must be noticed in accordance with Sections 22500 et seq. of the California Streets and Highways Code and is tentatively scheduled for June 25, 2024.

The North Point Natural Area Landscaping and Lighting Maintenance Assessment District is a separate fund from all other City funds and can only be expended for improvements authorized for the District. Once set, the annual assessment is transmitted to the County Auditor for recordation on the County assessment role. The assessment amount then appears on the parcel owner’s annual property tax bill.

In conformance with Proposition 218, “The Right to Vote on Taxes Act,” passed in 1996 by the voters in the State of California, the North Point Natural Area Landscaping and Lighting Maintenance Assessment District was approved, at that time, by one hundred percent (100%) of the owners for which the assessment is to be levied. All property owners were fully apprised of the costs and benefits associated with the district, prior to its approval by them.

CONCLUSION
Resolution No. 22-24 has been prepared for City Council review and adoption. The Resolution serves as the initiation to the annual assessment proceedings and orders an Engineer’s Report detailing the proposed costs for the maintenance of the North Point Natural Area, for purposes of assessing private property owners of Tract Map No. 2110 (excluding the City’s property). The Resolution also gives notice of review and acceptance, modification or rejection, of the Engineer’s Report, scheduled for the May 14, 2024, Council meeting.

ATTACHMENT

1. Proposed Resolution No. 22-24

RESOLUTION NO. 22-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA

INITIATING PROCEEDINGS TO LEVY THE ANNUAL ASSESSMENT

FOR THE NORTH POINT NATURAL AREA LANDSCAPING AND LIGHTING

MAINTENANCE ASSESSMENT DISTRICT PURSUANT TO THE
“LANDSCAPING AND LIGHTING ACT OF 1972"
(STREETS AND HIGHWAYS SECTIONS 22500 ET SEQ.)

T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, the City placed certain conditions on the development of Tract 2110 “North Point,” requiring formation of a property Landscaping and Lighting Maintenance Assessment District encompassing and coterminous with the proposed subdivision to provide for the maintenance of a natural area, parking lot, landscaping, decomposed granite and asphalt walkways, and coastal access stairway and other common area improvements to be held by or dedicated to the City of Morro Bay; and
WHEREAS, those conditions are more specifically identified in the Precise Plan (condition F1-F7) related to North Point; and
WHEREAS, the owners of the real property within the proposed district (the “Owners”) consented to the formation of the district pursuant to the Landscaping and Lighting Act of 1972 (Streets and Highways Code sections 22500 et seq.) (the “Act”), and are the only owners of property to be subject to assessments within the district; and WHEREAS, the Owners offered, in fee and in perpetuity, Lot 11 of Tract 2110, and the City accepted that Offer of Dedication; provided, that the cost of maintenance, thereof, would be borne by an assessment district as required by the Conditions of Approval of North Point; and WHEREAS, one hundred percent of the property owners, at the time of the subdivision of the land, approved formation of the District to assure conformance with the “Right to Vote on Taxes Act” (Proposition 218, California Constitution Act XIII, C & D); and WHEREAS, subsequent owners of the lots within the subdivision have received constructive notice of the existence of the assessment district through the real estate disclosures, title report process, and publicly available records.

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

1. The City Council of the City of Morro Bay hereby declares its intent to initiate the proceedings to levy and collect assessments pursuant to the Act.

2. The improvements to be subject to assessment for maintenance by the District shall include those enumerated in the conditions of approval of North Point and in Section 22525 of the Act, which were installed by the developer as a condition of approval of Tract 2110 or which are hereafter installed by developer; pursuant to the Final Improvement Plans for North Point as approved by the City.

3. The Assessment District is a District located in the City of Morro Bay, County of San Luis Obispo. A map showing the boundaries of the proposed District is attached as Exhibit A which is hereby incorporated herein.

4. An Engineer’s Report will be prepared for consideration at the May 14, 2024, City Council meeting and that date is set to review and accept or reject that report.

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

AYES:

NOES:

ABSENT:

ABSTAIN:

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

Exhibit A

DISTRICT BOUNDARY DIAGRAM
The boundary diagrams for the District have previously been submitted to the City Clerk in the format required under the Act and, by reference are hereby made part of this Report. The boundary diagrams are available for inspection at the office of the City Clerk during normal business hours. The following diagram provides an overview of the District.

Prepared By: GK Dept Review: GK
City Manager Review: __YK ___ City Attorney Review: __CFN __ Staff Report
TO: Honorable Mayor and City Council DATE: April 2, 2024 FROM: Greg Kwolek, Public Works Director
SUBJECT: Adoption of Resolution No. 23-24 Initiating Proceedings to Levy the Annual Assessment for the Cloisters Park and Open Space - Landscaping and Lighting Maintenance Assessment District

RECOMMENDED ACTION
Adopt Resolution No. 23-24 ordering the preparation of an Engineer’s Report detailing the expenses projected for Fiscal Year 2024/25 for the maintenance of the Cloisters Park and Open Space under the provisions of the “Landscaping and Lighting Act of 1972.”

ALTERNATIVE
Staff does not recommend any alternatives to the recommendation.

FISCAL IMPACT
When approved by City Council, the FY2024/25 assessments are estimated to provide $148,944 for the maintenance of the Cloisters Park and Open space totaling 34 acres.

BACKGROUND
On September 23, 1996, the City Council passed Resolution No. 69-96, which approved the final map for Tract 1996, known as the Cloisters Sub-division, consisting of 124 lots. With that approval, the City Council accepted lots 121 and 122 of the Cloisters subdivision, 34 acres of open space and organized park. Prior to the acceptance of the final map and pursuant to the Conditions of Approval, an assessment district was formed to cover the cost of maintenance of the parkland and open space. The assessment district formation proceedings began in August 1996 and concluded with the final public hearing for formation on September 23, 1996, which levied an annual assessment of $148,944 for the maintenance of the 34 acres of parkland and open space.

After the initial formation of the assessment district, each year thereafter, for the assessment to continue, the City must adopt a series of three resolutions to confirm the levy of assessment for the upcoming fiscal year. The first resolution, which is the one being proposed by this staff report, initiates the annual levy process and orders the preparation of an Engineer’s Report; the second resolution approves the Engineer’s Report and notices the intent to levy the assessment; and the third resolution levies the assessment for the upcoming fiscal year.

AGENDA NO: 7.c
MEETING DATE: April 9, 2024

2 DISCUSSION
After the adoption of Resolution No. 23-24, which initiates the proceedings to levy the annual assessment, an Engineer’s Report will be prepared for review, modification, acceptance or rejection at the May 14, 2024 City Council meeting. At that meeting there will be a resolution for consideration declaring the City Council’s intent to levy and collect the assessment. That Resolution will list the improvements, name the district and give its general location; it also refers to the proposed assessment and gives notice of the time and place for a meeting regarding the levy of the continuing assessment. The Government Code states the third and final meeting must be noticed in accordance with Sections 22500 et seq. of the California Streets and Highways Code and is tentatively scheduled for June 25, 2024.

The Cloisters Landscaping and Lighting Maintenance Assessment District is a separate fund from all other City funds and can only be utilized for improvements within the District. Once set, the annual assessment is transmitted to the County Auditor for recording on the County assessment role. The assessment amount then appears on the parcel owner’s annual property tax bill.

In conformance with Proposition 218, The Right to Vote on Taxes Act, passed in 1996 by the voters in the State of California, the Cloisters Landscaping and Lighting Maintenance Assessment District was approved, at that time, by one hundred percent (100%) of the owners for which the assessment is to be levied. All property owners were fully apprised of the costs and benefits associated with the district, prior to its approval by them.

CONCLUSION
Resolution No. 23-24 has been prepared for City Council review and adoption. The Resolution serves as the initiation of the annual assessment proceedings and orders the preparation of the Annual Engineer’s Report detailing the proposed costs for the maintenance of the Cloisters Park and Open Space, for purposes of assessing property owners of lots located within the bounds of Tract Map No. 1996 (excluding the City’s property). The Resolution also gives notice of review and acceptance, modification, or rejection, of the Engineer’s Report by City Council, scheduled for the May 14, 2024, Council meeting.

ATTACHMENT

1. Proposed Resolution No. 23-24

RESOLUTION NO. 23-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA

INITIATING PROCEEDINGS TO LEVY THE ANNUAL ASSESSMENT

FOR CLOISTERS LANDSCAPING AND LIGHTING

MAINTENANCE ASSESSMENT DISTRICT PURSUANT TO THE
“LANDSCAPING AND LIGHTING ACT OF 1972"
(STREETS AND HIGHWAYS SECTIONS 22500 ET SEQ.)

T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, the City Council has placed certain conditions on the development of Tract 1996, The Cloisters, requiring formation of a property Maintenance Assessment District encompassing and coterminous with the proposed subdivision to provide for the maintenance of a public park, bicycle pathway, right-of-way landscaping, coastal access ways, ESH restoration area, and other common area improvements to be held by or dedicated to the City of Morro Bay as required by City Ordinance; and,
WHEREAS, those conditions are more specifically identified in Vesting Tentative Tract Map (condition 10e) and Precise Plan (condition 2c) as required by City Ordinance; and WHEREAS, the owners of the real property within the proposed district (the “Owners”) consented in writing to the formation of the district pursuant to the Landscaping and Lighting Act of 1972 (Streets and Highways Code sections 22500 et seq.) (the “Act”), and are the only owners of property to be subject to assessments within the district; and WHEREAS, the Owners offered, in fee and in perpetuity, Lot 121 (Parcel 1) and Lot 122 of Tract 1996, and the City has accepted that Offer of Dedication; provided, that the costs of maintenance thereof, are borne by an assessment district as required by the Conditions of Approval of the project; and
WHEREAS, one hundred percent of the property owners, at the time of the subdivision of the land, approved formation of the district to assure conformance with the “Right to Vote on Taxes Act” (Proposition 218, California Constitution Act XIII C & D); and WHEREAS, subsequent owners of the lots within the subdivision have received constructive notice of the existence of the assessment district through the real estate disclosures, title report process, and publicly available records.

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

1. The City Council of the City of Morro Bay hereby declares its intent to initiate the proceedings to levy and collect assessments pursuant to the Act.

2. The improvements to be subject to assessment for maintenance by such District shall include those enumerated in the conditions of project approval and in Section 22525 of the Act, which were installed by the developer as a condition of approval of Tract 1996; pursuant to the Final Improvement Plans for the Cloisters Project as approved by the City.

3. The Assessment District is a District located in the City of Morro Bay, County of San Luis Obispo. A map showing the boundaries of the District is attached as Exhibit A which is hereby incorporated herein.

4. An Engineer’s Report, detailing the proposed costs for the maintenance of the Cloisters Park and Open Space, will be prepared for consideration by the City Council at the May 14, 2024, meeting and that date is set to review and accept, modify, or reject that report.

5. This District is called the “Cloisters Landscaping and Lighting Maintenance Assessment District.”
PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on the 9
th day of April 2024 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSED:
________________________________
CARLA WIXOM, Mayor
ATTEST:
________________________________
DANA SWANSON, City Clerk

EXHIBIT A

CLOISTERS

LANDSCAPING AND LIGHTING

MAINTENANCE ASSESSMENT DISTRICT

DISTRICT BOUNDARY DIAGRAM
The boundary diagrams for the District have previously been submitted to the City Clerk in the format required under the 1972 Act and, by reference, are hereby made part of this Report. The boundary diagrams are available for inspection at the office of the City Clerk during normal business hours. The following diagram provides an overview of the District.

01181.0024/972540.1
Prepared By: ___LS Dept Review: __TS _
City Manager Review: ___YK____ City Attorney Review: __PJM____ Staff Report
TO: Honorable Mayor and City Council DATE: March 25, 2024 FROM: Lori Stilts, Harbor Business Coordinator
SUBJECT: Adoption of Resolution No. 24-24 Approving Amendment #1 to the Interim Lease Agreement with Todd Baston and Tamara Gray-Baston, for Lease Site 62/62W located at 551 Embarcadero.

RECOMMENDED ACTION
Adopt Resolution No. 24-24, approving Amendment #1 to the Interim Lease Agreement with Todd Baston and Tamara Gray-Baston, for Lease Site 62/62W located at 551 Embarcadero.

ALTERNATIVES
The City Council can elect to not approve Amendment #1 as proposed and/or can propose changes, and direct staff accordingly.

FISCAL IMPACT
The lease site provides a modest positive fiscal impact and once re-developed will increase to its full revenue generating purposes.

BACKGROUND
Council approved a 5-year Interim Lease Agreement for Lease Site 62/62W through an RFP process in September 2019. The Lease Site is operated by Todd Baston and Tamara Gray-Baston (Baston’s) and subleases to Morro Bay Paddle Sports (MBPS).

The Baston’s are working towards a redevelopment plan with consent of landowner (COL) approved by City Council on September 12, 2023.

DISCUSSION
After following up on the Baston’s COL deadlines, staff realized that Amendment #1 to the Interim Lease Agreement, which was intended to be approved concurrently with the COL, was inadvertently overlooked and not included in the staff report in September of 2023.

The term of the Interim Lease Agreement expires on September 30, 2024, whereas the redevelopment project will supersede the lease expiration date. Staff met with the Baston’s contractor, discussed the project timeline and agreed the Interim Lease Agreement needed to be extended by at least 18 months to meet the COL deadlines. Accordingly, staff recommends establishing a new expiration date of March 30, 2026 for the term of the Interim Lease Agreement.

AGENDA NO: 7.d
MEETING DATE: April 9, 2024

01181.0024/972540.1

CONCLUSION
The Baston’s have in good faith continue to move forward with their proposed redevelopment project.

Staff, therefore, recommends approval of Resolution No. 24-24 and Amendment #1 to the Interim Lease Agreement with the City.

ATTACHMENTS

1. Resolution No. 24-24

2. Amendment #1, Lease Site 62/62W

01181.0024/972541.1
RESOLUTION NO. 24-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA
APPROVING AMENDMENT #1 TO THE INTERIM LEASE AGREEMENT

WITH TODD BASTON AND TAMARA GRAY-BASTON,
FOR LEASE SITE 62/62W LOCATED AT 551 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, Todd Baston and Tamara Gray-Baston (Tenant) are the current master leaseholder at Lease Site 62/62W located at 551 Embarcadero under an Interim Lease Agreement, dated October 1, 2019, by and between the City and Tenant (Master Lease); and WHEREAS, Tenant has submitted their preliminary site plans for redevelopment on May 23, 2023, for input by the City Council; and
WHEREAS, on September 12, 2023, Tenant obtained a Consent of Landowner (COL) which provides permission and authority to submit their Lease Site 62/62W redevelopment plans for Conditional Use Permit approval by the City; and
WHEREAS, the term of the Master Lease expires on September 30, 2024; however, the redevelopment project will supersede this lease expiration date; and WHEREAS, pursuant to Amendment #1 to the Master Lease, the City and Tenant have agreed to extend the term of the Master Lease by 18 months, establishing a new lease expiration date of March 30, 2026, to allow continued compliance with the COL.

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

1. The Amendment #1 to the Master Lease for Lease Site 62/62W attached hereto is hereby approved.

2. The City Manager is hereby authorized to execute said Amendment #1 in substantially the form attached hereto and to take all actions necessary to effectuate Amendment #1. //
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01181.0024/972541.1

3. The City Clerk shall certify to the adoption of this Resolution.

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

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:
______________________________
Carla Wixom, Mayor
ATTEST:
_____________________________
Dana Swanson, City Clerk

01181.0024/972542.1
AMENDMENT #1 TO THE LEASE AGREEMENT FOR
LEASE SITE 62/62W,
LOCATED AT 551 EMBARCADERO
This Amendment #1 to the Lease Agreement ("Amendment #1") is made and entered into as of this day of , 2024, by and among the City of Morro Bay, a municipal corporation of the State of California, whereinafter called "City," and Todd Baston and Tamara Gray-Baston, hereinafter called "Tenant." (Collectively, City and Tenant are sometimes referred to herein as the "Parties.")
WHEREAS, this Amendment #1 amends that certain Interim Lease Agreement entered into by and between the Parties and effective as of October 1, 2019 (the "Master Lease") for Lease Site 62/62W located at 551 Embarcadero (the “Lease Site”).

WHEREAS, on September 12, 2023, Tenant obtained a Consent of Landowner (COL) which provides permission and authority to submit their Lease Site 62/62W redevelopment plans for Conditional Use Permit approval by the City; and
WHEREAS, the term of the Master Lease expires on September 30, 2024; however, the redevelopment project will supersede this lease expiration date; and WHEREAS, the Parties now desire to enter into this Amendment #1 to extend the term of the Master Lease by 18 months, establishing a new lease expiration date of March 30, 2026, to allow continued compliance with the COL.

NOW THEREFORE, Tenant and City agree, as follows: Tenant and City shall provide for the amendment of Lease as follows:

1. The foregoing recitals are incorporated into this Amendment #1 as true and correct.

2. Section 2.01, “Term,” of the Master Lease is hereby amended to extend the term of the Master Lease by eighteen (18) Months, establishing a new lease expiration date of March 30, 2026.
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01181.0024/972542.1

3. All other provisions of the lease shall remain in full force and effect.

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

CITY OF MORRO BAY Tenant

By: ______________________ By:

Carla Wixom, Mayor Todd Baston
By:

APPROVED AS TO FORM: Tamara Gray-Baston
Chris F. Neumeyer, City Attorney
ATTEST:
_____________________________
Dana Swanson, City Clerk

AGENDA NO: 7.e
MEETING DATE: April 9, 2024

A PROCLAMATION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA
DECLARING APRIL 2024 AS SEXUAL ASSAULT AWARNESS MONTH

THE CITY COUNCIL
City of Morro Bay, California
WHEREAS, Sexual Assault Awareness Month calls attention to the fact that sexual and intimate partner violence is widespread and impacts every person in San Luis Obispo County; and WHEREAS, the marginalization of certain groups in society, including undocumented individuals, transgender individuals, and those living with disabilities, increases their vulnerability to sexual violence; and
WHEREAS, although much progress has been made toward preventing and ending sexual violence, important work remains to be done; and
WHEREAS, LUMINA ALLIANCE continues to provide a safe environment to those affected by sexual violence with crisis intervention, counseling, education, and emergency safe housing, with the help of dedicated volunteers and professionals; and
WHEREAS, LUMINA ALLIANCE provided services to 1,397 people in 2022-23, including answering 2,189 calls from the crisis line; and
WHEREAS, LUMINA ALLIANCE provided 380 survivors with more than 4,800 sessions of therapy in 2022-23; and
WHEREAS, LUMINA ALLIANCE provided evidence-based violence prevention education to 1,431 students in SLO County in 2022-23; and
WHEREAS, LUMINA ALLIANCE encourages the community to recognize our collective power to create a culture that supports survivors and works to create a community where everyone can live free from violence.⁠
WHEREAS, LUMINA ALLIANCE is celebrating its 45th Anniversary of serving survivors of sexual and intimate partner violence in SLO County in 2024.

WHEREAS, the City of Morro Bay strongly supports the efforts of LUMINA ALLIANCE, how every segment of our community can work together to better address sexual violence, and how to help survivors connect with services; and
NOW, THEREFORE BE IT RESOLVED, the Morro Bay City Council recognizes the important work done by sexual violence programs, do hereby proclaim the month of April to be National Sexual Assault Awareness Month.

IN WITNESS WHEREOF, I have
hereunto set my hand and caused the
seal of the City of Morro Bay to be
affixed this 9th day of April 2024.
___________________________________

CARLA WIXOM, MAYOR
City of Morro Bay, California

Prepared By: ___AC_____ Dept Review: __GK___
City Manager Review: ___YK _____ City Attorney Review: _CFN_ ____ Staff Report
TO: Honorable Mayor and City Council DATE: March 18, 2024 FROM: Greg Kwolek – Public Works Director
Anthony Cemo, PE – Water Reclamation Facility Program – Project Manager Ken Wilkins, PE – Water Reclamation Facility Program – Program Manager SUBJECT: Approval of Contract Closeout Amendment No. 10 for FBV Agreement

RECOMMENDED ACTION
Review and approve the closeout of the agreement among the City of Morro Bay and its design build contractor for the Water Resources Center (WRC), KS Overland Contracting, Inc. and J.R. Filanc Construction Company, Inc., collectively, aka FBV Morro Bay Joint Venture (FBV), as outlined in Amendment No. 10.

FISCAL IMPACT
The City’s current budget for the construction of the WRC is $79,123,216. The $79,000,000 closeout contract value does not exceed the City’s budgeted construction amount for the WRC.

DISCUSSION
In summary, City has negotiated final resolution of $2,422,876.46 in outstanding potential change orders from FBV for a payment of $575,674.

City staff and FBV have negotiated an agreement (Amendment No. 10) to close out the construction contract of the WRC for a total not to exceed contract amount of $79M, an increase from $78.4M set by Amendment No. 9.

Amendment No. 10 proposes to settle all outstanding potential change orders (PCOs) submitted by FBV. The table below identifies the PCOs and claims submitted by FBV for the final construction contract close out. The total of these PCOs is valued at approximately $2.4M and, if all were accepted by the City, would result in a final contract amount of $80.8M. Instead, City has negotiated with FBV for a final Amendment No. 10 for $575,674 and a final contract amount of $79M, saving City about $1,800,000 in settlement of all outstanding PCOs from FBV.

PCO # Description Cost
122 Delay #2 (Beyond Seed Sludge Maintenance Period) $125,103.40 123 Delay #3 (DDW Issues - UV / AOP Challenge Test Delay) $1,328,315.14 126 V-Ditch Site Security Requirements (FBV Claim) $80,089.00 AGENDA NO: 9.a
MEETING DATE: April 9, 2024

131 SWPPP and Storm Clean-up Costs (January 2023) $181,178.48 138 V-ditch Failures, Repairs, Redesign (Claim) $669,467.37 139 SRF Billings $38,723.07
T O T A L $2,422,876.46
PCO 122 - Delay #2 Beyond Seed Sludge Maintenance Period:

Initial seed sludge biology was significantly weakened due in part to a lack of sufficient food and development of unfavorable water quality conditions. On October 11, 2023, there was a slug of poorquality raw wastewater from the City’s existing plant that overwhelmed and killed the biology at the WRC requiring a re-seeding of the plan.

PCO 123 – Delay #3 DDW Issues – UV/AOP Challenge Testing Delay:

The Department of Drinking Water (DDW) required additional testing in two phases for the UV system of the WRC. This testing was outside of the initial permit requirements and required extensive testing, reporting, meetings, and analysis from FBV. The claim for this extended period of work is the delay caused to FBV to remain on site while still performing the additional UV/AOP challenge testing per DDW requirements.

PCO 131 – SWPPP and Storm Clean-up Costs:

The 2022-2023 rainy season proved to be an above average rainfall event for the City of Morro Bay.

This PCO covers the additional compensation for the additional storm measures, SWPPP replacement and post storm cleanup related to the unforeseen rain impacts.

PCO 138 – V-ditch Failures, Repairs and Redesign:

On January 9, 2023, the City experienced a significant rainfall and runoff event that caused significant erosion and structural damage to the newly constructed V-ditch drainage system at the WRC. FBV made design improvements to prevent any back channeling erosion of the V-ditch foundation and to improve the soil and structure interface of the drainage feature. FBV re-hydroseeded the hillside as well as installed a temporary irrigation system to ensure that the hydroseed established. It should be noted that the V-ditches have currently not had any issue during the rainy season this year.

PCO 139 – State Revolving Fund Billing Administration:

The SRF construction loan required a complete change to FBV’s monthly billing for the project. This required a significant effort from FBV’s project administration staff to collate all the task codes to the respective SRF line item.

Negotiations between the City and FBV have resulted in a final construction contract amount $575,674 above the current contract amount of $78,424,326 for a total close amount to FBV of $79M, approximately $1.8M less than the potential PCOs and change orders submitted by FBV outlined above.

The Program Management Team and the City presented the details of the closeout agreement to the Public Works Advisory Board on February 21, 2024, which voted 7-0 to recommend the City Council approve Amendment No. 10.

ATTACHMENT

1. Amendment No. 10 to the FBV Agreement

01181.0001/836362.1 Page 1 of 3
AMENDMENT NO. 10 TO THE

AGREEMENT FOR DESIGN/BUILD SERVICES

AMONG THE CITY OF MORRO BAY AND
OVERLAND CONTRACTING INC. AND
J.R. FILANC CONSTRUCTION COMPANY, INC.
______________________________________________________________________________ This Amendment No. 10 is entered by and among the CITY OF MORRO BAY, a municipal corporation (City) and OVERLAND CONTRACTING INC., a Delaware corporation, dba KS OVERLAND CONTRACTING, INC. (OCI) and J.R. FILANC CONSTRUCTION COMPANY, INC., a California corporation (JRF), the latter two acting as FBV Morro Bay Joint Venture (collectively, OCI and JRF are referred to as the “Design Build Entity”). City and Design Build Entity are sometimes referred to individually as “Party” and collectively “Parties.”

RECITALS
WHEREAS, City and the Design Build Entity entered into an agreement as of October 23, 2018, to design and construct a new Water Reclamation Facility (Project), which was approved by the City Council for a Cost Plus with Guaranteed Not to Exceed Amount of $67,234,512 (Agreement); WHEREAS, the Parties amended the Agreement, as of May 14, 2019, to provide for design and construction of additional elements for the Project and to increase the Cost Plus with Guaranteed Not to Exceed Amount for the construction of the Project to $68,870,571 (Amendment No. 1); WHEREAS, the Parties amended the Agreement, as of April 21, 2020, to provide for updated Davis Bacon Wage Requirements for the Project and to increase the Cost Plus with Not to Exceed Amount for the construction of the Project to $68,934,508 (Amendment No. 2); WHEREAS, the Parties amended the Agreement, as of May 20, 2020, to provide design and construction of additional elements for the Project and to increase the Cost Plus with Not to Exceed Amount for the construction of the Project to $74,926,725 (Amendment No. 3); WHEREAS, the Parties amended the Agreement, as of November 17, 2020, to provide design and construction of additional elements for the Project and to increase the Cost Plus with Not to Exceed Amount for the construction of the Project to $75,761,822 (Amendment No. 4); WHEREAS, the Parties amended the Agreement, as of March 9, 2021, to provide changes and adjustments to the design and construction of the Project and to decrease the Cost Plus with Not to Exceed Amount for the construction of the Project to $75,565,877 (Amendment No. 5); WHEREAS, the Parties amended the Agreement, as of August 24, 2021, to provide changes and adjustments to the design and construction of the Project and to increase the Cost Plus with Not to Exceed Amount for the construction of the Project to $76,697,994 (Amendment No. 6);

01181.0001/836362.1 Page 2 of 3
WHEREAS, the Parties amended the Agreement, as of August 23, 2022, to provide changes and adjustments to the design and construction of the Project and to increase the Cost Plus with Not to Exceed Amount for the construction of the Project to $77,057,879 (Amendment No. 7); WHEREAS, the Parties amended the Agreement, as of November 22, 2022, to provide changes and adjustments to the design and construction of the Project and to increase the Cost Plus with Not to Exceed Amount for the construction of the Project to $78,015,298 (Amendment No. 8); WHEREAS, the Parties amended the Agreement, as of May 24, 2023, to provide changes and adjustments to the design and construction of the Project and to increase the Cost Plus with Not to Exceed Amount for the construction of the Project to $78,424,326 (Amendment No. 9); WHEREAS, the Agreement, Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, Amendment No. 8, and Amendment No. 9 are collectively referred to as the Amended Agreement.

NOW, THEREFORE, City and Design Build Entity mutually agree to further amend the Amended Agreement as follows:

1. City issued a Notice of Substantial Completion to the Design Build Entity on January 24, 2024, with an effective date of September 7, 2023. The Notice of Substantial Completion included the list of remaining work items to be completed by the Design Build Entity to achieve Final Completion of the Project.

2. City and the Design Build Entity mutually agree City shall take full responsibility for fixing the failed concrete of the treatment facility known as the SAFE Diversion Box. The Parties understand and agree other than the responsibility stated above and any rectification related to the responsibility stated above, the Parties retain all contractual rights under the Amended Agreement to the extent any breach of any obligations occurs and is timely raised.

3. The Design Build Entity submitted its Notice of Final Completion with a completion date of March 8, 2024. The Notice of Final Completion has been accepted by the City and the Project is closed out.

4. City and the Design Build Entity mutually agreed the Design Build Entity is to be compensated in the revised Guaranteed Not to Exceed Amount of $79,000,000, as full and final payment, pursuant to the Amended Agreement, as herein amended, for any and all work, claims, costs and attorney’s fees, related directly or indirectly to the Amended Agreement, including the list of remaining work as included in the Notice of Substantial Completion. Such payment shall be made in accordance with the terms of the Amended Agreement.

5. The Design Build Entity shall be paid for the Final Work within 30 days after City’s receipt of an invoice for a total Guaranteed Not to Exceed Amount of $79,000,000. The final invoice will account for the remaining difference between the mutually agreed to total Guaranteed Not to Exceed Amount of $79,000,000 and the total amount invoiced to date.

01181.0001/836362.1 Page 3 of 3

6. The Exhibit A, attached to the Amended Agreement, shall be replaced in its entirety with the new Exhibit A, dated March 26, 2024 attached hereto and incorporated herein, as well as into the Amended Agreement as amended herein.

7. Except as expressly stated herein, all terms and conditions in the Amended Agreement shall remain in full force and effect.

8. The effective date of this Amendment No. 10 shall be deemed to be March 26, 2024.

IN WITNESS WHEREOF, the Parties have caused this Amendment No. 10 to be executed by their duly authorized representatives.

CITY OF MORRO BAY DESIGN BUILD ENTITY
a municipal corporation
OVERLAND CONTRACTING INC.

By: _____________________________ By: _____________________________ Yvonne Kimball, City Manager Charles B. Mitchell,
Its Attorney in Fact
Dated: _____________, 2024
Dated: _____________, 2024
J.R. FILANC CONSTRUCTION
COMPANY, INC.

Attest: By: ___________________________
Omar Rodea,
________________________ Its President
Dana Swanson, City Clerk
Dated: _____________, 2024
Approved As To Form:

Acting together as FBV Morro Bay Joint
Venture, PWCR #947773 – Classification A
__________________________
Chris F. Neumeyer, City Attorney

1401 Fulton Street, Suite 802, Fresno, California 93721 P. 559.436.6616 F. 559.436.1191
Morro Bay Water Reclamation Facility Project | Exhibit A Exhibit A (Revised)
(Revision thru Amendment No. 10)
Project Milestone Schedule
The Project Milestones for the Water Reclamation Facility Project (Project) are defined below. The Project is composed of two (2) phases: Design Phase and Construction Phase Separate Notices to Proceed (NTPs) will be issued for each phase of the Project. If the NTP dates change, the subsequent dates may change accordingly.

Project Milestones
Project Milestones Milestone Date
Design NTP November 5, 2018
Construction NTP March 20, 2020
Original Calendar Days to Substantial Completion 829
Original Substantial Completion (as of NTP) June 27, 2022 Original Calendar Days to Final Completion 886
Original Final Completion (as of NTP) August 23, 2022
Amendment 4 Calendar Day Time Extension* 8
Amendment 6 Calendar Day Time Extension* 7
Amendment 7 Calendar Day Time Extension 0
Amendment 8 Calendar Day Time Extension* 187
Amendment 9 Calendar Day Time Extension 172
Amendment 10 Calendar Day Time Extension 63
Total Added Calendar Days 437
Revised Calendar Days to Substantial Completion 1,266
Revised Substantial Completion (thru Amendment 10) September 7 th, 2023
Revised Calendar Days to Final Completion 1,449
Revised Final Completion (thru Amendment 10) March 8th, 2024 *Notes:

1. Potential Change Order No. 41 - Add Perimeter Barbed Wire Fence (Amend 4)

2. Environmental Allowance 1B - Temporary Wildlife Exclusionary Fencing (Amend 4)

3. Potential Change Order No. 96 - January 2021 Storm Event & Texas Ice Storm (Amend 6)

4. Potential Change Order No. 108 - Defer SEED PLANT Milestone and WRF Commission (Amend 8)

4/4/2024
1 Water Reclamation Facility Program
Project Status Update
City Council Meeting
April 9, 2024
Project Status
• FBV is in final stages of project close-out activity
• All PCOs have been submitted
• Punch list is complete with exception of 1 item, expected to be completed by end of March
• Notice of Substantial Completion issued per City approval January 24, 2024 which requires the City to release of $212k of remaining retention.
• Retention tied to punch-list items to be completed prior to close-out 1 2

4/4/2024
2 Project Close-Out Considerations
Current WRF GMP and Budget
Current GMP
(Amendments 1-9)
WRF Max Budget | |
$78.4M
$79.1M
3 4

4/4/2024
3 Outstanding PCOs and Claims
• PCO 126, 131, 139 have merit for a total value of $299,990.25. • PCO 122 has been unresolved for a year; merit of claim TBD. • Total value of 122, 126, 131, 139 = $425,093.25
• Carollo has transmitted extensive comments to FBV on PCO 123 and 138. • Total Value of 123 and 138 = $1,997,782,.51
PCO # Title Costs
122 Delay #2 (Beyond Seed Sludge Maint Period) $125,103.40 123 Delay #3 (DDW Issues - UV / AOP Challenge Test Delay) $1,328,315.14 126 V-Ditch Site Security Requirements (FBV Claim) $80,089.00 131 SWPPP and Storm Clean-up Costs (January 2023) $181,178.48 138 V-ditch Failures, Repairs, Redesign (Claim) $669,467.37 139 SRF Billings $38,723.07
TOTAL = $2,422,876.46
Outstanding PCOs and Claims
• Initial seed sludge biology was significantly weakened due in part to a lack of sufficient food and development of unfavorable water quality conditions. • On October 11th, there was a slug of poor-quality raw wastewater from the City’s existing plant that overwhelmed and killed the biology at the WRC requiring a reseeding of the plan PCO # Title Costs
122 Delay #2 (Beyond Seed Sludge Maint Period) $125,103.40 5 6

4/4/2024
4 Outstanding PCOs and Claims
• The Department of Drinking Water (DDW) required additional testing in two phases for the UV system of the WRC
• This testing was outside of the initial permit requirements and required extensive testing, reporting, meetings, and analysis from FBV
• The claim for this extended period of work is the delay it caused FBV having to remain on site while still performing the additional UV/AOP challenge testing per DDW requirements.

PCO # Title Costs
123 Delay #3 (DDW Issues - UV / AOP Challenge Test Delay) $1,328,315.14 Outstanding PCOs and Claims
• At the intersection of the V-ditch drainage system of the WRC site, there is a gap between the bottom of the site security fence and the V-ditch • The City requested that FBV add a welded wire mesh screen to this opening as a site security feature.

PCO # Title Costs
126 V-Ditch Site Security Requirements (FBV Claim) $80,089.00 7 8

4/4/2024
5 Outstanding PCOs and Claims
• The 2022-2023 rainy season proved to be an above average rainfall event for the City of Morro Bay. • This PCO covers the additional compensation for the additional storm measures, SWPPP replacement and post storm cleanup related to the unforeseen rain impacts.

PCO # Title Costs
131 SWPPP and Storm Clean-up Costs (January 2023) $181,178.48 Outstanding PCOs and Claims
• On January 9th, 2023, the City experienced a significant rainfall and runoff event that caused significant erosion and structural damage to the newly constructed V-ditch drainage system at the WRC. • FBV made design improvements to prevent any back channeling erosion of the V-ditch foundation and to improve the soil and structure interface of the drainage feature. • FBV re-hydroseeded the hillside as well as installed a temporary irrigation system to ensure that the hydroseed established.

PCO # Title Costs
138 V-ditch Failures, Repairs, Redesign (Claim) $669,467.37 9 10

4/4/2024
6 Outstanding PCOs and Claims
• The SRF construction loan required a complete change to FBV’s monthly billing for the project. • This required a significant effort from FBV’s project administration staff to collate all of the task codes to the respective SRF line item.

PCO # Title Costs
139 SRF Billings $38,723.07
Status of Discussions: PCO 123 & 138
• City team has provided two rounds of comments and has received responses from FBV
• Significant gap remains between City position on basis and merit and FBV position and response
11 12

4/4/2024
7 Implications of Unresolved Discussions:

PCO 123 & 138
• Current GMP stands at $78.4M
• In Summary:
• PCOs with merit (122, 126, 131, 139) would add +/- $0.4M (would increase the GMP to $78.8M)
• PCO/Claims 123 and 138 could increase GMP up to $2M in addition to PCOs 122, 126,131 & 139 (could increase the GMP to $80.8M) • Current maximum authorized budget for the WRF is $79.1M Current WRF Budget vs. Total Potential
Remaining PCOs & Claims (Worst Case)
Current GMP +
Pending PCOs/Claims
| WRF Max Budget |
$78.4M
$79.1M $-1.7M
| |
$2.4M
13 14

4/4/2024
8 HIGH SCENARIO MEDIUM SCENARIO LOW SCENARIO
Title Full Costs Remove V-Ditches Reduced all by 50%
PCO
#
$125,103 $62,551 $125,103 Delay #2 (Beyond Seed Sludge
Maint Period) 122
$1,328,315 $664,157 $1,328,315 Delay #3 (DDW Issues - UV / AOP Challenge Test Delay) 123
$80,089 $40,044 $80,089 V-Ditch Site Security Requirements (FBV Claim) 126
$181,178 $90,589 $181,178 SWPPP and Storm Clean-up Costs (January 2023) 131
$0.00 $334,733 $669,467 V-ditch Failures, Repairs,
Redesign (Claim) 138
$38,723 $9,361 139 SRF Billings $38,723
T O T A L $2,422,876 $1,753,409 $1,211,438
Potential Mediation Outcome Scenarios for
PCO/Claim 123 &138
Potential Changes to GMP
PCO Amount Current GMP New GMP
High Scenario $2.4M $78.4M $80.8M
Medium Scenario $1.8M $78.4M $80.2M
Low Scenario $1.2M $78.4M $79.6M
Each scenario would result in an increase to GMP
(consistent with all previous Amendments)
15 16

4/4/2024
9 Assessment of Closeout Scenarios
• High – Unlikely; FBV PCOs leave room to challenge/negotiate • Med – Most likely; potential to negotiate FBV PCO numbers down by $500 to $700k. • Low – Least likely; FBV will rigorously challenge reduction of PCOs by 50%.

None of the scenarios result in favorable outcome for the City FBV Offering for Close Out Settlement
FBV’s initial offer was $79.1M.
The $79M value the City negotiated is acceptable to FBV as final contract close out value
Current Authorized Budget for the WRF: $79.1M
17 18

4/4/2024
10 Contractual Considerations for
Closeout Settlement
• Project Management Team and FBV agree that Final GMP contract amount of $79M fully compensate FBV for all services required to fulfill contract
• Agreement aligns with Contract (Article 6 Payments and Completion)
• Section 6.1: Cost Plus with Guaranteed Not to Exceed Amount • Section 6.11.7 Final Payment
Recommendation
• Accept FBV offer for closeout settlement at $79.0M.
• Revise Final GMP to contract budget amount of $79.0M
via Amendment 10
19 20

4/4/2024
11 No Fiscal Impact to the Current WRF Program Budget
Current FBV Contract Amount $78,424,326
Settlement Amount $575,674
Proposed Final FBV Contract $79,000,000
Amount
WRF Project Budget $79,123,216
Water Resources Funding Plan
Current Funding Sources
SRF Planning Grant $4.5M
WIFIA Total $33M
$41.0M
With Amendment in Progress
SRF Construction Loan &
Amendment
Funding Total Approx. $79M
21 22

4/4/2024
12 Questions and Discussion
[email protected]
877-MORROBAYH2O (877-667-7622)
morrobaywrf.com
Contractual Considerations for
Closeout Settlement
• Mediation is not required to finalize the Close Out settlement • Mediation is only required if one of the parties is
requesting mediation.
• Contract Article 10 Disputes and Claims – Section 10.1:

Dispute and Claim Procedures
23 24

4/4/2024
13 Why Would FBV Accept Settlement Offer at
Significant Savings to City?
Time to Project Close Out

FBV ROI
Calculus
$M
Mediation Alternative
Close-out Deal
Time & Dollar Value of
Leveraged FBV
Resources on New
Project
25

Prepared By: ___AC_____ Dept Review: __GK____
City Manager Review: __YK_____ City Attorney Review: __CFN ____ Staff Report
TO: Honorable Mayor and City Council DATE: March 28, 2024 FROM: Greg Kwolek – Public Works Director
Ken Wilkins, PE – Water Reclamation Facility (WRF) Program Manager SUBJECT: Approve WRF Close-out Agreement Contract Amendment for Anvil Builders, Inc. and Settlement Agreement

RECOMMENDED ACTION
Authorize the City Manager to execute Amendment No. 9 to the agreement with Anvil Builders, Inc. (Anvil) for the Water resources Center (WRC) Lift Stations and Offsite Pipelines (Conveyance Facilities) construction for $880,000 and the accompanying settlement agreement, which results in a total not to exceed contract amount of $37,264,606.

FISCAL IMPACT
Anvil Builders, Inc.

Anvil currently has unresolved change orders and claims submitted to the City for the Conveyance Facilities totaling $2,586,370. Amendment No. 9 and the proposed settlement agreement with Anvil builders closes out all change orders and claims for the Conveyance Facilities Project for $880,000 (with an additional approval of a $200,000 retention by City pending outfall hydraulic final resolution concerning brine line effluent pipeline). The $880,000 amount includes extending limits of final paving, Force Majeure claims on flood clean up from the January 9 and 10 storm events, additional work at the City Corporation Yard, and the acceleration of pipeline construction, including additional crews, overtime, and per diem pay. Prior to Amendment No. 9, Contract Amendment No. 8 was approved by City Council on May 24th, 2023, resulting in a total contract value of $36,384,606. With approval of Amendment No. 9, Anvil’s total contract results in a not to exceed amount of $37,264,606.

As a reminder of the negotiation process to reach this close-out settlement, Anvil originally submitted a claim for $4.2M for additional compensation for changes in the scope of the project work. With this Amendment No. 9 and Amendment No. 8, already approved by the Council at the May 27, 2023, meeting, the total being approved for all final claims is $2.3M.

Overall Fiscal Impact
Acceptance of Anvil’s contract amendments would not result in an increase in the overall WRF Program baseline budget, as adopted in the FY23 City Budget ($159.84 Million). The following table connects the proposed contract amendment to the Conveyance Facilities Project item included in the overall WRF Program Budget. The negative overall conveyance facilities construction budget listed below has been covered over the course of the program using a combination of contingency budgets from the Conveyance Construction, General Program, and WRF Construction budgets. The AGENDA NO: 9.b
MEETING DATE: April 9, 2024

construction budget overage identified in this contract Amendment is only considering the $880,000 value for Amendment No. 9 and will be covered by reallocating funds from the WRF Project Construction contingency budget included in the WRF City Costs Budget.

Approved Conveyance Facilities Construction Budget $ 34,701,121 Original Contract Amount $ 31,493,675
Total Approved Amendments (1-8) $ 4,890,931
Amendment No. 9 $ 880,000
Proposed Contract Amount $ 37,264,606
Overall Conveyance Facilities Construction Budget Remaining (including Amendment No. 9)
$ (2,563,485)
WRF Construction Budget re-allocation to Cover Conveyance Overage $ 123,216 WRF Program Budget re-allocation to Cover Conveyance Overage $ 2,440,269

DISCUSSION
Amendment No. 9 defines the terms between the City and Anvil to reach final completion of this project component. Those items being resolved are as follows:

1. Contractor has completed all punch-list items required by the Contract.

2. City will pay Contractor $880,000 in full settlement of all punch list items, disputed PCOs, and claims through Project completion, except for brine line effluent pipeline, as discussed in Paragraph 3., below.

3. As to the brine line effluent pipeline, $200,000 in retention will be withheld by the City pending the outcome of the investigation of the conveyance capacity problem. If, after considering that investigation City determines, in good faith, the conveyance capacity problems were caused, in whole or in part, by construction defects, then City will continue to withhold the $200,000 in retention until Contractor remedies the problem to the satisfaction of the City, then release such withheld retention to Contractor, in accordance with City’s payment process. If City, after considering the investigation, in good faith determines the problem was not caused by construction defect, then City will release withheld retention to Contractor, in accordance with City’s payment process.

4. Payment of the settlement amount of $880,000 shall be made by City, as soon as possible, in accordance with City’s payment process with payment no later than April 30, 2024.

ATTACHMENTS

1. Amendment No. 9 to the Agreement with Anvil Builders, Inc.

2. Exhibit A – Settlement Agreement Document

01181.0032/973826.1 Settlement and Release Agreement

SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement (“Settlement Agreement”) is made and entered into by and among the City of Morro Bay, a municipal corporation (“City”) and Anvil Builders, Inc., a California corporation (“Anvil”) and is effective as of March 26, 2024 ("Effective Date").

In this Settlement Agreement, City and Anvil are sometimes referred to collectively as the “Parties” and individually as a “Party.”

RECITALS
WHEREAS, City and Anvil entered into an agreement as of November 10, 2020, for construction services for Anvil to complete the work for the Water Reclamation Facility Lift Station and Offsite Pipelines Project, (the “Project") which was approved by the City Council for a not to exceed amount of $31,493,675 (the “Agreement”).

WHEREAS, the Parties amended the Agreement, eight previous times, being on October 12, 2021, January 11, 2022, March 22, 2022, June 14, 2022, August 23, 2022, November 22, 2022, February 28, 2023, and May 23, 2023, for a total not to exceed amount of $36,384,606; WHEREAS, the Agreement and all of the above-referenced amendments are hereinafter referred to collectively as the "Amended Agreement;”
WHEREAS, the Parties, in good faith, had disputes comprised of: 1) the amount for full and final payment of all remaining potential change orders (“PCOs”) through Project completion totaling up to approximately $2,580,000; and 2) the monetary amount of retention to be held by City for a Project brine line effluent pipeline conveyance capacity defect under review currently for cause, and Anvil’s acceptance of responsibility to remedy to satisfaction of City if determined by City, in good faith, to be a construction defect in whole or in part; and, 3) placement of fifteen items on a punch list for the Project, all three disputed items as referenced in Amendment No. 9 to the Amended Agreement dated March 26, 2024 (“Amendment No. 9”), which are required to be resolved for the Project to be deemed to achieve final completion (collectively, the “Disputes); WHEREAS, the Parties have engaged in good faith discussions to resolve the Disputes EXCEPT FOR the monetary amount of retention to be held by City for a Project brine line effluent pipeline conveyance capacity defect under review currently for cause, and Anvil’s acceptance of responsibility to remedy to satisfaction of City if determined by City, in good faith, to be a construction defect in whole or in part in an effort to avoid litigation regarding those matters (“Litigation”);
WHEREAS, the Parties desire to avoid the expense, inconvenience, and uncertainties of engaging in litigation and, therefore, in conjunction with and pursuant to Amendment No. 9, have agreed to forever settle, resolve and compromise their differences, existing and potentially existing between them, concerning the Disputes, without the admission of liability of or by any of them, and are entering into this Settlement Agreement to formally memorialize the terms of the settlement as set forth below; and
WHEREAS, the Parties declare each has read this Settlement Agreement and understands and knows the contents thereof and represents and warrants that each of the Parties executing this Settlement Agreement is empowered to do so and hereby binds the respective Party.

01181.0032/973826.1 Settlement and Release Agreement

TERMS AND CONDITIONS
Now, in consideration of the foregoing recitals, which are incorporated herein, the mutual understandings contained in this Settlement Agreement, Amendment No. 9 and other good, valuable, and sufficient consideration, the Parties agree as follows:

1. SETTLEMENT TERMS

1.1 Settlement Agreement Signatures
All Parties shall execute this Settlement Agreement concurrently with Amendment No. 9.

1.2 Condition Precedent
Execution of Amendment No. 9 is a condition precedent to this Settlement Agreement.

Once executed, the Parties agree this Settlement Agreement shall be an attachment to Amendment No. 9 and be effective as of the date Amendment No. 9 is effective. Completion of, and payment for, items set forth in Amendment No. 9 are material terms of this Settlement Agreement.

2. COOPERATION DURING AUDIT
The Parties recognize the Project was funded by outside funding sources and is therefore subject to Project closeout audits. Should the City receive an audit request, Anvil will provide reasonable assistance in responding to any auditor inquiries at no additional cost to the City.

3. FULL SETTLEMENT
The Parties acknowledge this Settlement Agreement and completion of, and payment for, Amendment No. 9 shall constitute full and final settlement of all claims Anvil has against the City, including, but not limited to, those related to compensation for any and all contract amounts, change order requests (including but not limited to the PCOs), contract balances, claims, backcharges, liquidated damages, retention amounts and credits related to the Disputes and the Project except for those matters expressly set forth in Section 2 of Amendment No. 9 and the monetary amount of retention to be held by City for a Project brine line effluent pipeline conveyance capacity defect under review currently for cause.

4. RELEASE

4.1 Release of Claims by City
Except as set forth in this Settlement Agreement and as reserved in Sections 5.2 & 5.3 below, City releases and discharges all claims of every kind whatsoever including, without limitation, liquidated damages, whether known or unknown, which City or any of its officials, officers, agents, representatives, employees (past or present), successors and/or assigns, asserts or could assert against Anvil, or any of its officials, officers, agents, shareholders, representatives,

01181.0032/973826.1 Settlement and Release Agreement

sureties, insurers, employees, predecessors, successors and/or assigns, concerning the Disputes (the “City Releases”).

4.2 Release of Claims by Anvil
Except as set forth by this Settlement Agreement and as reserved in Sections 5.2 & 5.3, below, Anvil releases and discharges all claims of every kind whatsoever whether known or unknown, which Anvil or any of its officials, officers, agents, shareholders, representatives, employees, insurers, sureties, predecessors, successors and/or assigns, asserts or could assert against City or any of its officials, employees (past and present), consultants, agents, representatives, insurers, predecessors, successors and/or assigns, concerning the Disputes and the subject matter of Section 3 (the “Anvil Releases”).

5. RELEASED MATTERS
The City Releases and the Anvil Releases are collectively referred to herein as the “Released Matters.”

5.1 Civil Code Section 1542 Waiver.

A. With respect to the releases described in the Released Matters, the Parties expressly waive all rights under California Civil Code section 1542, which provides that a general release does not extend to unknown or unsuspected claims which, if known, would have materially affected the settlement. California Civil Code section 1542 provides:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE

RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE

MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR OR RELEASED PARTY.”
__________ __________

ANVIL CITY
B. The Parties acknowledge that they may hereafter discover facts different from, or in addition to, those which they now believe to be true with respect to the Released Matters. The Parties agree that the foregoing releases shall be and remain effective in all respects notwithstanding such different or additional facts or any discovery thereof.

C. The Parties further acknowledge and agree that waivers of rights under Section 1542 of the California Civil Code have been separately bargained for and are essential and material terms of this Settlement Agreement, and, without such waivers, this Settlement Agreement would not have been entered into.

5.2. Exclusions.

A. The Parties agree that specifically excluded from the Released Matters and Civil Code 1542 Waiver are any demands, claims and causes of action for damages, costs, expenses,

01181.0032/973826.1 Settlement and Release Agreement

attorneys’ fees, expert fees, consultant fees, other fees, interest and compensation of any nature arising from or relating to any of the Parties’ rights and remedies with respect to Anvil’s performance of, or failure to perform Amendment No. 9 until a Notice of Completion is issued by the City, extant warranties, and patent or latent construction defects in the Project as defined by California Code of Civil Procedure sections 337.1 and 337.15.

B. The Parties agree that specifically excluded from the Released Matters and Civil Code 1542 Waiver are any and all claims based either on third party actions for personal injury or property damage arising out of construction of the Project, or on environmental liabilities such as, but not limited to, site contamination, toxics or hazardous materials, effluent and water quality, or air quality. The Parties acknowledge and agree they are presently unaware of any such pending claims.

C. The Parties agree that specifically excluded from the released Matters and Civil Code 1542 waiver are any and all claims based on the brine line effluent pipeline conveyance capacity issues including, without limitation, retention.

D. The Parties specifically acknowledge and agree that this Settlement Agreement and any Released Matters set forth herein shall not be construed as a release of Anvil’s indemnity obligations under any indemnity agreement(s) under any bonds related to the Project, or as a release of any other liability related to or arising from Project bonds.

5.3 Other Matters Not Included in the Released Matters
The Parties specifically acknowledge and agree the Released Matters do not include any liability or obligation created by this Settlement Agreement.

6. GENERAL PROVISIONS.

6.1 Representation and Warranty. The Parties and signatories hereby each represent, covenant and warrant that they are authorized (individually or by their respective principals) to enter into and execute this Settlement Agreement and that they have not previously assigned any claims released or assigned in this Settlement Agreement, in whole or in part, or taken any other steps which would adversely affect the rights which are the subject of this Settlement Agreement.

In the event that any of the above representations and/or warranties are breached or any of the representations and/or warranties contained in this subparagraph prove false, the breaching/misrepresenting Party hereby agrees to defend, indemnify and hold the other Parties harmless from all damages, loss, liability, costs and attorneys’ fees resulting from said breach/misrepresentation.

6.2 No Reliance. Each Party acknowledges: (i) this Settlement Agreement and Amendment No. 9 are the resolution of a fully matured set of facts and each Party individually declares and represents it is executing this Settlement Agreement in reliance solely on its own judgment, belief, and knowledge of the facts surrounding the transactions described in this Settlement Agreement and Amendment No. 9; (ii) this Settlement Agreement and Amendment No. 9 are made without reliance upon any statement or representation not contained in this Settlement Agreement or Amendment No. 9 of any other Party, or any representative, agent or attorney of any other party; (iii) no promise, inducement or agreement not expressed in this Settlement Agreement

01181.0032/973826.1 Settlement and Release Agreement

or Amendment No. 9 has been made to any Party as concerns this Settlement Agreement or Amendment No. 9; and (iv) the recitals, terms and conditions contained in this Settlement Agreement and Amendment No. 9 are contractual and not mere recitals.

6.3 Discovery. Each Party acknowledges that it may subsequently discover facts different from, or in addition to, those which it now believes to be true with respect to the Released Matters, and agree this Settlement Agreement and Amendment No. 9 shall be and remain effective in all respects notwithstanding such different or additional facts.

6.4 Additional Documents. The Parties agree to perform such further acts and to execute and deliver such further documents as may be reasonably necessary or appropriate to carry out the intent or provisions of this Settlement Agreement and Amendment No. 9.

6.5 Entire Agreement. This Settlement Agreement and Amendment No. 9 embody the entire understanding and agreement among the Parties pertaining to the matters described herein and supersedes and cancels all prior oral or written agreements among the Parties. No modification of this Settlement Agreement shall be valid unless agreed to in writing by the Parties.

6.6 Voluntary. This Settlement Agreement is executed voluntarily and without duress or undue influence on the part of or on behalf of the Parties, or of any other person, firm, or other entity.

6.7 Consultation with Legal Counsel. The Parties acknowledge that they have had the right to seek counsel in the preparation of this Settlement Agreement and Amendment No. 9 and have had the opportunity to have it fully explained to them by such counsel, and that they are fully aware of the contents of this Settlement Agreement and Amendment No. 9 and of their legal effect.

Except as provided for in this Settlement Agreement and Amendment No. 9, none of the Parties have been influenced to any extent whatsoever in executing this Settlement Agreement by any representations, statements, or omissions pertaining to any of the foregoing matters by any Party or said Party’s counsel.

6.8 Interpretation. None of the Parties hereto, nor their respective counsel, shall be deemed the drafters of this Settlement Agreement for purposes of construing the provisions thereof. The language in all parts of this Settlement Agreement shall in all cases be construed according to its fair meaning, and shall not be construed for or against either Party by reason of the authorship of this Agreement, headings used, or any other rule of construction which might otherwise apply.

6.9 Waiver. No provision of this Settlement Agreement may be waived unless in writing and signed by all Parties hereto. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein.

6.10 Assignment. Each Party represents and warrants that it has not assigned or otherwise transferred any interest in any claims which are the subject matter hereof. Each Party agrees to indemnify and hold any other Party, and each of them, harmless from any liability, loss, claims, demands, damages, costs, and expenses for attorneys’ fees incurred by any of them as a result of any person asserting such assignment or transfer.

01181.0032/973826.1 Settlement and Release Agreement

6.11 Governing Law. This Settlement Agreement is entered into in the County of San Luis Obispo, State of California, and shall be interpreted pursuant to California law. If legal action is necessary to enforce any of the terms of this Settlement Agreement, such action shall be brought in accordance with the laws of the State of California and of the United States in the San Luis Obispo Superior Court for state claims and the United States District Court for the Central District of California, Western Division for federal claims.

6.12 No Promise or Warranty. No promise or warranty shall be binding on the Parties except as expressly contained in this Settlement Agreement or Amendment No. 9 with the exception of manufacturers’ warranties, which shall remain in full force and effect beyond satisfaction of this Settlement Agreement.

6.13 Attorneys’ Fees. The Parties agree to bear their own attorneys’ fees and costs incurred in resolving the Disputes. In the event of any suit or proceeding arising from the enforcement or breach of this Settlement Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs in addition to any other permitted relief.

6.14 Admissibility. This Settlement Agreement and its terms shall not be used or introduced as evidence for any purpose other than to enforce the terms of the Settlement Agreement.

6.15 Settlement Agreement Binding on Assignees, Successors. This Settlement Agreement shall bind and inure to the benefit of the successors and assigns of the Parties, and to all affiliates, dba’s, or any other associated entities.

6.16 Severability. In the event that any portion of this Settlement Agreement is deemed illegal, invalid or unenforceable in any respect, then such invalidity, illegality or unenforceability will not affect any other provision of this Settlement Agreement, and this Settlement Agreement shall be construed as though such illegal, invalid or unenforceable provision had never been contained herein, unless a court determines the primary purpose of this Settlement Agreement would be frustrated.

6.17 Counterparts. This Settlement Agreement may be executed in multiple counterparts, all of which shall constitute a binding Settlement Agreement. Facsimile and/or PDF signatures, when received, shall have the same force and effect as original signatures.

6.18 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Settlement Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.

WHEREFORE, the undersigned having read the foregoing Settlement and Release Agreement, and fully understanding it and agreeing to its terms, hereby execute this Settlement Agreement and make it effective of the date and year first-above written.\

01181.0032/973826.1 Settlement and Release Agreement

CITY OF MORRO BAY
By:

Print Name:

Title:

Date:

ANVIL BUILDERS, INC. (need two signatures in
compliance with Corporations Code § 3131)
By:

Print Name:

Title:

Date:

By:

Print Name:

Title:

Date:
1 Corporations Code, section 313 requires two signatures. One must be by corporate chairperson of the board, the president or any vice president. The other must be by the corporate secretary, any assistant secretary, the chief financial officer or any assistant treasurer of such corporation.

4/4/2024
1 Water Reclamation Facility Program
Anvil PCOs and Claims
City Council
April 9, 2024
Background – Anvil Close-out Settlement
• City Noticed Substantial Completion April 2023
• City proceeded to engage in final closeout terms concurrent to Anvil completion of punch-list
• Negotiation centered around several outstanding PCOs and claim • City’s position that some elements lacked adequate backup, and dollar value of the claim lacked merit.
• City offered settlement, and Anvil agreed to terms
• Final settlement offer was never signed by Anvil
1 2

4/4/2024
2 Re-Set: Previous Settlement Process
Anvil’s Final Amendment Request
35 Potential Change Orders
Total Anvil Request $4,188,936
3 4

4/4/2024
3 Amendment 8 Approved 24-May-2023
20 PCOs
$1.62M
City Settlement Counteroffer Against
Remainder of Total Claims
Amendment 8
Paid
City Offer: $780K
to Closeout
= $2.4M total closeout
5 6

4/4/2024
4 Amendment 8
Paid
Anvil Counteroffer: $980K
to Closeout
= $2.6M total closeout
Anvil Closeout Counteroffer
Closeout Options Considered
June 2023
7 8

4/4/2024
5 Option 1 – Reject Anvil’s Offer
• High risk of Anvil choosing litigation for remaining $2.6M • City’s total cost of litigation and settlement will exceed current $200K difference between City offer and Anvil best and final offer
Option 2 – Accept Anvil’s Offer
• Majority amount of Anvil counteroffer focused on acceleration claim which does have merit
Amendment 8
Paid
Anvil Counteroffer: $980K
to Closeout
= $2.6M total closeout
9 10

4/4/2024
6 Option 3 – Split Difference
• Follows previous negotiation strategy for change orders Amendment 8
Paid
City Counteroffer: $880K
to Closeout
= $2.5M total closeout
Negotiation Outcome
• City offered Option 3 - $880K final close-out.
• City to retain $200K (separate from $880K) and apply if necessary for additional work on outfall pipeline
• Anvil accepted terms, but did not sign the contract close out document
• Anvil interpreted language in the close-out document to present future risk/cost
11 12

4/4/2024
7 Current Status
• Anvil has reconsidered the close-out document language, and is ready to sign the close-out offer
• City to pay $880K, and retain $200K (separate from $880K) Other Considerations
• Outfall pipeline hydraulics still not resolved
• Water Works contends hydraulic constraints are construction related • Other analyses suggest construction is not the root cause • Additional time required to resolve outfall hydraulics and basis of design
• Settlement can proceed absent final resolution to outfall hydraulics • City retains $200K until resolution confirmed
13 14

4/4/2024
8 Recommendation
Finalize Settlement with 2023 Option 3 - $880K
Retain $200K until outfall hydraulic resolution is confirmed Questions and Discussion
[email protected]
877-MORROBAYH2O (877-667-7622)
morrobaywrf.com
15 16

Prepared By: _DS_____ Dept Review: _______
City Manager Review: _YK____ City Attorney Review: _LNL _
Staff Report
TO: Honorable Mayor and City Council DATE: March 28, 2024 FROM: Dana Swanson, City Clerk
SUBJECT: Consideration of Introduction and First Reading of Ordinance No. 667 Adding Chapter 2.48 to Title 2 of the Morro Bay Municipal Code Relating to Electronic and Paperless Filing of Campaign Disclosure Statements and Statements of Economic Interests

RECOMMENDED ACTION
Introduce for first reading by title only, with further reading waived, Ordinance No. 667: An Ordinance of the City Council of the City of Morro Bay, Adding Chapter 2.48 to Title 2 of the Morro Bay Municipal Code Relating to Electronic and Paperless Filing of Campaign Disclosure Statements and Statements of Economic Interests to the Morro Bay Municipal Code.

ALTERNATIVES
The Council may choose not to introduce Ordinance No. 667 and provide direction as deemed appropriate by a majority of the Council.

FISCAL IMPACT
Implementation of NetFile will result in substantial staff time savings currently spent reviewing, requesting amendments, scanning, redacting and uploading campaign disclosure statements to the City website for public review.

BACKGROUND/DISCUSSION
The Political Reform Act of 1974 (“Act”) requires the filing of specified statements, reports and other documents. Under the Act, a local government agency may require these filings to be made online or electronically with the local filing officer (City Clerk). With the enactment of more recent legislation, AB2452 and AB2151, the Act requires the local filing officer to make all data available on the internet in an easily understood format that provides the greatest public access within 72 hours of the filing deadline.

Historically, City Council candidates and campaign committees have filed paper copies of required campaign statements and reports. Once filed, the documents are made available for review by the public. The City Clerk’s office spends a significant amount of staff time to make such paper filings readily available and posted online which requires further handling.

Public access to campaign disclosure information is a vital and integral component of a fully informed electorate. Transparency in campaign financing is critical in order to maintain public trust and support AGENDA NO: 9.c
MEETING DATE: April 9, 2024

01181.0001/766043.1
of the political process. Nevertheless, these values require staff resources to implement. As a means to more cost-effectively maintain the public trust, the City recently contracted with NetFile for installation of two electronic programs for on-line submittal and posting of Fair Political Practices Commission (FPPC) forms related to Conflict of Interest (i.e., Form 700s) and Campaign Disclosure documents (i.e., Form 460s). Both programs have been installed and are operational; however, there is one remaining authorization necessary by Council in order to make these filings fully electronic.

Pursuant to California Government Code Section 84615, the City Council must adopt an Ordinance memorializing their approval to require and authorize complete electronic signature and submission of electronic campaign disclosure forms. Tonight’s action is the first of a two-step process to implement electronic filing.

The proposed Ordinance pertains specifically to the campaign finance component of the NetFile system, and will only apply to those filers that exceed a threshold of $1,000 for expending or receiving campaign funds, or another amount as established under the Political Reform Act. This section reflects Senate Bill No. 1329 (2017-2018 Reg. Sess.), which updates applicable thresholds to $2,000 effective when “the Secretary of State certifies an online filing and disclosure system pursuant to paragraph (7) of subdivision (b) of Section 84602 of the Government Code.” This threshold is also consistent with the Act, which recognizes campaigns that spend or raise more than $2,000 as “Controlled Committees.” Under the Act, these types of committees are obligated to file detailed campaign finance disclosure statements, also known as Form 460s. For those smaller campaigns that do not exceed the $2,000 threshold, they may continue to file paper versions of the Form 470 disclosure forms. That being said, it should be noted that the NetFile system is able to accommodate the online filing of several types of required forms by the FPPC, including Form 460, 470, 496, and 497, which are the most commonly used in Morro Bay’s local election campaigns.

The NetFile system is created specifically for cities and counties responsible for administering campaign finance filings and Statements of Economic Interest, meets the requirements of the Secretary of State, and allows for electronic and paperless filing of campaign statements.

In terms of security, the NetFile system is a web-based, vendor-hosted application that utilizes “industry best practices” for securing data, using the same data encryption for online filings that is used by banks for online banking. NetFile stores and backs up data at three separate locations, creating the essential safety measures and redundancy that will allow for recovery of information in the event of an emergency or disaster. The City’s data will be retained incompliance with state and local regulations. For professional treasurers that have already purchased campaign software, NetFile is able to receive uploaded data from certain types of third-party applications for electronic filing purposes. The NetFile system also maintains each filing for easy updates the next year or filing cycle.

The City Clerk’s office has begun to request City of Morro Bay Statement of Economic Interest (Form 700) filers to file electronically through the NetFile system. State law does not require the City to adopt an ordinance before mandating Form 700s be filed electronically. Rather, this is accomplished through changes to internal procedures. With the transition to electronic filing of Campaign Disclosure Statements through the Ordinance in front of Council, the City Clerk’s office intends to require all future reports and other documents filed on behalf of Form 700 filers to be filed electronically. The City Clerk’s office is currently responsible for the annual filing of all Form 700s, which include the City Council, Planning Commission, City Manager, City Attorney, City Clerk, Treasurer, designated City employees, board and commission members, and consultants. Form 700s occasionally need

01181.0001/766043.1
amendments or are submitted incomplete or without marked schedules attached. The Form 700 electronic filing incorporates an initial review process and alerts the filer of errors at the time he or she is entering information, thereby minimizing the need for the City Clerk to request amendments.

Transitioning to electronic filing will substantially reduce staff burdens on the Clerk’s office.

ATTACHMENT(S)

1. Ordinance No. 667

Ordinance No. 667

ORDINANCE NO. 667

AN ORDINANCE OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA,
ADDING CHAPTER 2.48 RELATING TO ELECTRONIC AND

PAPERLESS FILING OF CAMPAIGN DISCLOSURE

STATEMENTS AND STATEMENTS OF ECONOMIC INTEREST

TO THE MORRO BAY MUNICIPAL CODE

THE CITY COUNCIL
City of Morro Bay, California

THE CITY COUNCIL OF THE CITY OF MORRO BAY, CALIFORNIA FINDS AND ORDAINS AS FOLLOWS:

SECTION 1. Purpose and Authority. The purpose of this Ordinance is to require the filing of Campaign Disclosure Statements and Statements of Economic Interest by elected officials, candidates, staff, consultants, or committees to be completed electronically. The City Council enacts this Ordinance in accordance with the authority granted to cities by state law. This Ordinance is intended to supplement, and not conflict with, the Political Reform Act.

SECTION 2. Findings.

The City Council of the City of Morro Bay finds and determines as follows:

A. That California Government Code Section 84615 provides that a legislative body of a local government agency may adopt an ordinance that requires an elected officer, candidate, or committee, required to file statements, reports, or other documents required by Chapter 4 of the Political Reform Act, to file such statements, reports, or other documents online or electronically with the City Clerk.

B. In any instance in which the original statement is required to be filed with the Secretary of State and a copy of that statement is required to be filed with the City, the filer is permitted, but not required, to file a copy electronically.

C. The City Clerk’s web-based system contains multiple safeguards to protect the integrity and security of the data, will operate securely and effectively, and will not unduly burden filers.

D. The City Clerk will operate the electronic filing system in compliance with the requirements of California Government Code Section 84615 and any other applicable laws.

E. This Ordinance is not a project within the meaning of Section 15378 of the CEQA Guidelines because it has no potential for resulting in either a direct or reasonably foreseeable indirect physical change in the environment, either directly or ultimately. In the event that the Ordinance is found to be a project under CEQA, it is subject to the CEQA exemption contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have no possibility to have a significant effect on the environment.

SECTION 3. Addition of Electronic Filing System for Campaign Disclosure Statements and Statements of Economic Interest. A new Morro Bay Municipal Code Chapter

Ordinance No. 667

2.48, “Electronic Filing of Campaign Disclosure Statements and Statements of Economic Interest,” is hereby added to the Morro Bay Municipal Code to read as follows:

2.48.010 Definitions
For the purposes of this chapter, the following words, terms and phrases shall be defined as follows:

A. “Electronic filing system” means a system established by the city clerk pursuant to Section 84615 of the Government Code for electronic filing of statements, as defined herein.

B. “Filer” means any elected officer, candidate, committee, or other person required to file statements, as defined herein.

C. “Statements” shall mean any statements, reports, or other documents that filers must file in accordance with Chapter 4 of the Political Reform Act (“Government Code Section 84100, et seq.) for the filing of statements.

2.48.020 Electronic Filing System.

A. Pursuant to Government Code section 84615, the city clerk may establish an electronic filing system for the filing of statements.

B. The electronic filing system shall meet the following requirements:
a. Comply with all requirements set forth in Section 84615 of the Government Code. b. Ensure the integrity of data transmitted, including by establishing safeguards against efforts to tamper with, manipulate, alter, or subvert data. c. Accept filing in the standardized record format developed by the California Secretary of State pursuant to Section 84602(a)(2) of the California Government Code, compatible with the Secretary of State’s system for receiving an online or electronic filing.
d. Include a procedure for filers to comply with the requirement that they sign statements and reports under penalty of perjury pursuant to Section 81004 of the Government Code.

2.48.030 Required Online Filing.

A. Upon establishment of an electronic filing system by the city clerk pursuant to Section

2.0X.020(A), each filer shall file statements using the city clerk’s electronic filing system according to procedures established by the city clerk. These requirements are not applicable to an officer, candidate, committee or other person that is exempt pursuant to California Government Code Section 84615 as may be amended or renumbered.

B. Filers who have electronically filed a statement using the city clerk’s electronic filing system are not required to file copies of that document in paper format with the city clerk.

C. Filers shall file statements in paper format with the city clerk if the electronic filing system is not capable of accepting a statement for any reason.

D. The electronic filing system shall allow filers to complete and submit statements free of charge.

2.48.040 Availability of Statements for Public Review; Record Retention.

A. The city clerk shall make available on the city’s website all data filed pursuant to this chapter in an easily understood format that provides the greatest feasible public access.

Data shall be made available free of charge and as soon as possible after receipt.

Ordinance No. 667

B. Data made available on the city’s webpage shall not contain the street name and building number of the persons or entity representatives listed on the electronically filed forms or any bank account number required to be disclosed by the filer. A complete, unredacted copy of the statement shall be made available to any person upon request to the city clerk’s office.

C. The city clerk’s office shall maintain online or electronic statements in compliance with State law and the city’s adopted record retention schedule.” SECTION 4. Effective Date.

This Ordinance shall be in full force and effect thirty (30) days after its passage and adoption.

SECTION 5. Severability.

If any provision of this Ordinance or its application is held invalid by a court of competent jurisdiction, such invalidity shall not affect other provisions, sections, or applications of the Ordinance which can be given effect without the invalid provision or application and to this end each phrase, section, sentence, or word is declared to be severable.

SECTION 5. Certification.

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

INTRODUCED at a regular meeting of the City Council held on the 9th day of April 2024, by motion of Council Member ________ and seconded by Council Member __________.

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

AYES:

NOES:

ABSENT:

ABSTAIN:

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

Ordinance No. 667

STATE OF CALIFORNIA )

COUNTY OF SAN LUIS OBISPO )

CITY OF MORRO BAY )
I, Dana Swanson, CITY CLERK OF THE CITY OF MORRO BAY, DO HEREBY CERTIFY that the foregoing Ordinance Number 667 was duly adopted by the City Council of the City of Morro Bay at a regular meeting of said Council on the ____ day of ______ 2024, and that it was so adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:

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