Morro Bay City Council
April 28, 2026

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County of San Luis Obispo Operations and Maintenance Waterfront Infrastructure and Site Readiness Plan Study: City of Morro Bay
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 National Historic Preservation Act Section 106 Consultation. Section 106 of the National Historic Preservation Act (NHPA) requires federal agencies to consult with the State Historic Preservation Officer (SHPO) before authorizing an undertaking that would affect a historic property. A CRA that addresses archaeological and historical resources present within the APE including a marine survey to assess the intertidal and subtidal portions of the APE for the presence of cultural resources would be required. The CRA would be utilized in preparation of the CEQA and NEPA documents and would support the Section 106 consultation. In addition, it is required that a list of Tribes culturally affiliated with the Study Area be obtained from the Native American Heritage Commission, and Tribal outreach is conducted to support the Section 106 consultation, Assembly Bill 52, and CEQA requirements. Section 106 consultation also requires outreach to interested parties, such as local historic groups, and local agencies.  Coastal Zone Management Act (CZMA) Consistency Certification from the California Coastal Commission is required for development in the coastal zone regulated by federal permits (e.g., USACE). This certification is issued by the CCC to confirm that federally permitted actions proposed within or affecting the Coastal Zone are consistent with the State’s Coastal Zone Management Plan (e.g., the California Coastal Act). However, once a CCC CDP (discussed below) has been issued, that permit automatically satisfies federal consistency, and no further submittal would be needed.
 Essential Fish Habitat Consultation. The Magnuson-Stevens Fisheries Conservation and Management Act requires federal agencies to consult with NMFS prior to taking actions that would affect EFH. The USACE would likely lead this consultation in coordination with other Section 7 consultations and typically prefers the EFH analysis to be included in the projects BA.

5.2.2 State Permitting Overview
The City of Morro Bay’s certified LCP gives it the authority to issue CDPs, in accordance with the Coastal Act and the City’s LCP. However, the CCC retains CDP jurisdiction in certain areas known as “Coastal Original Jurisdiction”, which incude current and former tidelands, submerged lands, and areas of public trust, as shown on the City of Morro Bay’s official Post Certification Maps. The City’s CDP authority is also appealable to the CCC for development in certain areas, including within 100 feet of an environmentally sensitive habitat areas or within 300 feet of a coastal bluff.

The CCC regulates offshore and coastal zone activities under the auspices of the Coastal Act through the issuance of CDPs. The key goals of the Coastal Act are protecting and enhancing coastal resources, maximizing public access, prioritizing coastal-dependent activities and encouraging sustainability. The CCC has jurisdiction in the coastal zone and within State waters. Jurisdiction for the inland areas of the coastal zone also resides with the CCC, except in jurisdictions, such as Morro Bay, with a certified LCP.

As stated previously, SB 286 streamlines offshore wind development by enabling a consolidated coastal development permit, allowing the CCC to issue one coastal development permit for offshore wind projects. Pursuant to SB 286, local agencies are invited to review and participate in the consolidated permitting process, but the CCC has ultimate CDP approval rights and may override local coastal plan policies, if deemed necessary. However, SB 286 does not enable the CCC to override local land use and zoning designations; nor does it eliminate the need for local land use permits from the City of Morro Bay. Furthermore, the CCC would look to the City’s LCP, including the Waterfront Master Plan, as guidance when reviewing a consolidated CDP.

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The State Water Resources Control Board (SWRCB) and nine Regional Water Quality Control Boards (RWQCBs) have jurisdiction over “waters of the State,” which are defined as any surface water or groundwater, including saline waters, within the boundaries of the State (California Water Code sec. 13050(e)). These agencies also have responsibilities for administering portions of the CWA.

In Central California, CWA Section 401 Water Quality Certification (Section 401 Certification) is issued by the RWQCB and informs the USACE (or the applicable agency from which a license or permit was requested) that an application has been submitted. Additionally, the Porter-Cologne Water Quality Control Act (Porter-Cologne Act) is the principal law governing water quality regulation in California. It establishes a comprehensive program to protect water quality and the beneficial uses of water. The Porter-Cologne requires any person discharging or proposing to discharge waste that could affect the quality of waters of the State to file a Report of Waste Discharge with the appropriate RWQCB. The RWQCB may then authorize the discharge, subject to conditions, by issuing Waste Discharge Requirements (WDRs). The Procedures state that they are to be used in issuing CWA Section 401 Certifications and WDRs and largely mirror the existing review requirements for CWA Section 404 Permits and Section 401 Certifications, incorporating most elements of the USEPA’s Section 404(b)(1) Guidelines.

The CDFW administers several State laws protecting fish and wildlife resources and the habitats upon which they depend. The CESA (Fish and Game Code Section 2050 et. seq.) prohibits take of State listed threatened or endangered. Unlike the FESA, CESA’s protections extend to candidate species during the period (typically one year) while the California Fish and Game Commission decides whether the species warrants CESA listing. The CDFW enforces Sections 3511, 4700, 5050, and 5515 of the Fish and Game Code, which prohibit take of species designated as Fully Protected.

The CDFW is not allowed to issue an Incidental Take Permit for Fully Protected species; therefore, impacts to these species must be avoided.

The concept designs are expected to require the State of California approvals described in the subsections below. Based on SB 286 guidance, the CCC would utilize a consolidated permit process and lead the engagement with other State resource agencies. The project proponent would be responsible for the funding and development of technical studies or supporting materials requested by the CCC and would be required to pay permitting fees based on the size and type of proposed development. It should be noted that primary State approval would not generally be issued until after CEQA documentation has been certified.

Primary State Approvals
 Tidelands Lease Agreement from the CSLC will be required for work seaward of the mean high tide line or review of existing Tidelands Lease Agreements for permissible development or use.  Coastal Development Permit from the CCC for offshore and coastal zone activities would need to be approved and issued by the CCC since “development” would occur. CCC would also address CZMA consistency for federal permits in a separate action.  Streambed Alteration Agreement pursuant to Section 1600 et seq. of the CFGC requires notification to the CDFW for activities that substantially alter stream resources. This requirement does not apply to the marine environment but could be triggered if the concept design may affect stream resources that are not subject to tidal influence.  Water Quality Certification and/or Waste Discharge Requirements issued by the RWQCB are required when a federal permit authorizes discharge into waters of the United States (e.g., NWP) and/or when a proposed activity results in a discharge into waters of the State,

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respectively. A Water Quality Certification is required for work within tidelands and subject to CEQA. A pre-filling meeting must be requested 30 days in advance of the application submittal and an alternatives analysis must be submitted with the WQC or WDR application.  Incidental Take Permit (ITP) would be required from CDFW if the concept design would result in take of a State-listed threatened or endangered or candidate species. The ITP would be issued after the CEQA document is certified and application is deemed complete.

Secondary State Approvals and Processes Triggered by Primary Approvals  CEQA Review. Based on conversations with CSLC, CCC, City of Morro Bay, and San Luis Obispo County, the City of Morro Bay would serve as the lead CEQA agency as the area has been granted to the City via a State Tidelands Grant. The CEQA lead agency must complete the appropriate CEQA document to approve the proposed development. As a lead agency, the City of Morro Bay would require that a CEQA document and supporting technical studies be prepared. The State approvals listed above are discretionary and these agencies would be responsible agencies that rely on the certified CEQA document. CEQA is discussed further in Section 4.5, CEQA and NEPA Requirements.

5.2.3 Local Permitting Overview
Future proposals for O&M facilities within the coastal zone would require City of Morro Bay land use permits (e.g., Conditional Use Permits) and building permits and would have to be found consistent with all City of Morro Bay land use regulations, including voter approval for any necessary changes to land use designations. The standard of review for the City’s land use permits is the City’s Municipal Code, General Plan, and required findings contained therein. These requirements are not superseded by the SB 286 consolidated CDP process described above.

The least constrained concept designs (Option 4A, Option 4B, and Split Location variants) identified for Morro Bay involve in-water, overwater, shoreline, and inland construction that would require comprehensive biological and cultural resource assessments, threatened and/or endangered species biological assessment (BA), and an Essential Fish Habitat evaluation to support the USACE 404/401 permitting process. If the final designs involve work in or near freshwater or estuarine water ways of wetlands, then permitting would likely require a wetland delineation and rare plant survey. Technical studies are required by both federal and State agencies as components of their permit applications. Additional technical studies to support CEQA and NEPA review, including cultural resources, air quality, and noise studies, would also be required, as detailed in Section 5.4, CEQA and NEPA Requirements. Table 3 presents a matrix identifying the federal, State, and local permits and authorizations anticipated to be required for the least constrained concept designs.

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Table 3 Federal, State, and Local Permitting Matrix
Concept designs
Federal Permits State Permits Local Permits
USACE USCG NMFS USFWS RWQCB CCC CDFW Morro Bay
CWA Section
404
RHA Section
10 RHA Section
14 NHPA Section 106/SHPO CWA Section 408* MSA EFH MMPA IHA FESA Section 7 FESA Section 7 CWA Section 401/
Porter-Cologne Act Coastal Act
CFGC Section
1600 et seq.

Conditional
Use Permit
Do Nothing X X X X X X X X X
Do Minimum X X X X X X X X X X X X
Option 1 X X X X X X X X X X X X
Option 2 X X X X X X X X X X X X
Option 3 X X X X X X X X X X X X
Option 4 X X X X X X X X X X X X
Option 4A X X X X X X X X X X X X
Option 4B X X X X X X X X X X X X
Split Location Variant A X X X X X X X X X X X X
Split Location Variant B X X X X X X X X X X X X
Split Location Variant C X X X X X X X X X X X
CWA = Clean Water Act; RHA = Rivers and Harbors Act; NHPA = National Historic Preservation Act; MSA = Magnuson-Stevens Fishery Conservation and Management Act; EFH = Essential Fish Habitat; MMPA = Marine Mammal Protection Act; IHA = Incidental Harassment Authorization; FESA = Federal Endangered Species Act; CFGC = California Fish and Game Code; CDP = Coastal Development Permit

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5.3 Land Use and Zoning Considerations
Under SB 286 a consolidated permit would be obtained from the CCC, and a coastal development permit from the City would not be required. However, SB 286 does not permit the CCC to override local land use and zoning designations or permitting requirements. The least constrained concept designs include development at the North T-Pier as well as nearby Intermediate Staging Zone facilities, and constraints on the identified parcels are assessed herein. In addition, the larger Study Area was reviewed for general feasibility of development of OSW O&M facilities based on proximity to Morro Bay Harbor, land use designations, and existing development. Parcels designated for open space were eliminated from consideration, as well as properties containing existing development (such as residences and schools) that would not be compatible with OSW O&M facilities.

Areas considered under this feasibility assessment are designated Coastal Dependent Industrial, Public/Institutional, High Density Residential, Visitor Serving Commercial, Commercial/Recreational Fishing, General (Light) Industrial, Low Density Residential, and District Commercial. In some of the areas designated Visitor Serving Commercial, a Mixed-Use Residential Overlay also exists. In addition to these land use designations, some areas occur within the boundaries of Measure A-24 and Measure D, which provide for additional land use regulations in these areas.

OSW O&M facilities could be categorized by the City as one of a few different land use classifications, depending on the specific facility details. Depending on the ultimate project description, future O&M facilities could potentially fit into the following classifications: Harbor, Port, and Marina Facilities, Construction and Material Yards, Warehousing and Storage, or Industrial use categories depending on project specifics. If the OSW O&M facility was limited to a typical office building, then it could be considered part of the Offices use classification. MBMC Chapter 17.53, Use Classifications, provides the following definitions for these land uses:
 Harbor, Port, and Marina Facilities. Facilities that provide a range of services related to the use of boats and other watercraft and commercial and recreational fishing. Services may include, but are not limited to, boating moorings; boat haul out; sales, storage, construction, repair, and maintenance of boats, boat parts, and other marine-related items; marine fueling stations and washing facilities; seafood processing, boat and watercraft charter operations; offices; bait and tackle shops; and hardware sales.
 Construction and Material Yards. Storage of construction materials or equipment on a site other than a construction site.
 Warehousing and Storage. Storage and distribution facilities without sales to the public on-site or direct public access except for public storage in small individual space exclusively and directly accessible to a specific tenant.
 Industrial. Establishments engaged in any of the following types of activities taking place within enclosed buildings: manufacturing finished parts or products primarily from previously prepared materials; providing industrial services; or conducting industrial or scientific research, including product testing.
 Offices. Offices of firms, organizations, or public agencies providing professional, executive, management, administrative or design services, such as accounting, architectural, computer software design, engineering, graphic design, interior design, investment, insurance, and legal offices, excluding banks and savings and loan associations with retail banking services (see banks and financial institutions). This classification also includes offices where medical and dental services are provided by physicians, dentists, chiropractors, acupuncturists, optometrists,

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County of San Luis Obispo Operations and Maintenance Waterfront Infrastructure and Site Readiness Plan Study: City of Morro Bay
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and similar medical professionals, including medical/dental laboratories within medical office buildings, but excludes clinics or independent research laboratory facilities (see research and development) and hospitals
Table 4 describes the permitting requirements for development of OSW O&M facilities within the land use designations and use categories listed above, as well as the applicable sections of the MBMC that determine the use standards. However, it should be noted that OSW O&M facilities may not fit neatly into any of the City’s existing use classifications. Pursuant to MBMC Section 17.06.020, in cases where a specific land use or activity is not defined, the Director shall assign the land use or activity to a classification that is substantially similar in character or may determine that the use is not allowable, in which case a zoning code amendment would be required to add the appropriate use classification.

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Table 4 Allowable Land Uses and Permit Requirements
Land Use Designation Permit Requirement
Specific Development
Standards Permit Requirements
Coastal Dependent
Industrial1
Harbor, Port, and Marina Facilities: Permitted (P)
Construction and Material Yards: Not permitted
Indoor Warehousing and Storage: Permitted (P1)
Outdoor Storage: Conditionally Permitted (C1)
Light Industrial: Permitted (P1)
General Industrial: Permitted (M1)
Offices: Permitted (P1)
MBMC Section 17.09.030 Harbor, Port, and Marina Facilities: Zoning clearance, Coastal Development Permit
Indoor Warehousing and Storage: Zoning
clearance, Coastal Development Permit
Outdoor Storage: Conditional Use Permit,
Coastal Development Permit
Light Industrial: Zoning clearance, Coastal
Development Permit
General Industrial: Minor Use Permit, Coastal
Development Permit
Offices: Zoning clearance, Coastal Development
Permit
Public/Institutional
(Public Facilities)
Harbor, Port, and Marina Facilities: Conditionally Permitted (C) Construction and Material Yards: Not permitted
Indoor Warehousing and Storage: Not permitted
Outdoor Storage: Not permitted
Light Industrial: Not permitted
General Industrial: Not permitted
Offices: Not permitted
MBMC Section 17.09.030 Harbor, Port, and Marina Facilities: Conditional Use Permit, Coastal Development Permit
For all other uses, a General Plan land use
designation and zoning amendment would be
required.

General (Light)
Industrial
Harbor, Port, and Marina Facilities: Not permitted
Construction and Material Yards: Permitted (P)
Indoor Warehousing and Storage: Permitted (P)
Outdoor Storage: Conditionally Permitted (C)
Light Industrial: Permitted (P)
General Industrial: Permitted (M)
Offices: Permitted (P)
MBMC Section 17.09.030 Construction and Material Yards: Zoning clearance, Coastal Development Permit
Indoor Warehousing and Storage: Zoning
clearance, Coastal Development Permit
Outdoor Storage: Conditional Use Permit,
Coastal Development Permit
Light Industrial: Zoning clearance, Coastal
Development Permit
General Industrial: Minor Use Permit, Coastal
Development Permit
Offices: Zoning clearance, Coastal Development
Permit

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Land Use Designation Permit Requirement
Specific Development
Standards Permit Requirements
District Commercial Harbor, Port, and Marina Facilities: Not permitted Construction and Material Yards: Not permitted
Indoor Warehousing and Storage: Not permitted
Outdoor Storage: Not permitted
Light Industrial: Not permitted
General Industrial: Not permitted
Offices: Permitted (P)
MBMC Sections 17.08.030
and 17.08.040
Offices: Zoning clearance, Coastal Development
Permit
For all other uses, a General Plan land use
designation and zoning amendment would be
required.

Visitor Serving
Commercial
Harbor, Port, and Marina Facilities: Conditionally Permitted (C) Construction and Material Yards: Not permitted
Indoor Warehousing and Storage: Not permitted
Outdoor Storage: Not permitted
Light Industrial: Not permitted
General Industrial: Not permitted
Offices: Not permitted
MBMC Sections 17.08.030
and 17.08.040
Harbor, Port, and Marina Facilities: Conditional
Use Permit, Coastal Development Permit
For all other uses, a General Plan land use
designation and zoning amendment would be
required.

Visitor Serving
Commercial with
Mixed-use Residential
Overlay
Harbor, Port, and Marina Facilities: Conditionally Permitted (C) Construction and Material Yards: Not permitted
Indoor Warehousing and Storage: Not permitted
Outdoor Storage: Not permitted
Light Industrial: Not permitted
General Industrial: Not permitted
Offices: Not permitted
MBMC Sections 17.08.030,

17.08.040, and 17.16
Harbor, Port, and Marina Facilities: Conditional
Use Permit, Coastal Development Permit
For all other uses, a General Plan land use
designation and zoning amendment would be
required.

Visitor Serving
Commercial within
Measure A-24 area
Harbor, Port, and Marina Facilities: Conditionally Permitted (C) Construction and Material Yards: Not permitted
Indoor Warehousing and Storage: Not permitted
Outdoor Storage: Not permitted
Light Industrial: Not permitted
General Industrial: Not permitted
Offices: Not permitted
MBMC Sections 17.08.030
and 17.08.040
Harbor, Port, and Marina Facilities: Conditional
Use Permit, Coastal Development Permit
For all other uses, a General Plan land use
designation and zoning amendment would be
required. Approval by a voter ballot initiative
would be required to make these alterations.

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Land Use Designation Permit Requirement
Specific Development
Standards Permit Requirements
Commercial/
Recreational Fishing
within Measure D area
Harbor, Port, and Marina Facilities: Conditionally Permitted (C) Construction and Material Yards: Not permitted
Indoor Warehousing and Storage: Not permitted
Outdoor Storage: Not permitted
Light Industrial: Not permitted
General Industrial: Not permitted
Offices: Not permitted
MBMC Sections 17.11.040
and 17.11.050
Harbor, Port, and Marina Facilities: Conditional
Use Permit, Coastal Development Permit. Use
must be found to be supportive of fishing
activities.

For all other uses, a General Plan land use
designation and zoning amendment would be
required. Approval by a voter ballot initiative
would be required to make these alterations.

High Density
Residential
Harbor, Port, and Marina Facilities: Not permitted
Construction and Material Yards: Not permitted
Indoor Warehousing and Storage: Not permitted
Outdoor Storage: Not permitted
Light Industrial: Not permitted
General Industrial: Not permitted
Offices: Conditionally permitted (C)
MBMC Sections 17.07.030
and 17.07.040
Offices: Conditional Use Permit, Coastal
Development Permit
For all other uses, a General Plan land use
designation and zoning amendment would be
required.

Low Density
Residential
Harbor, Port, and Marina Facilities: Not permitted
Construction and Material Yards: Not permitted
Indoor Warehousing and Storage: Not permitted
Outdoor Storage: Not permitted
Light Industrial: Not permitted
General Industrial: Not permitted
Offices: Not permitted
MBMC Sections 17.07.030
and 17.07.040
A General Plan land use designation and zoning
amendment would be required.
sf = square feet, MBMC = Morro Bay Municipal Code
1 Limited to coastal-dependent and coastal-related uses. Development priority shall be given to coastal-dependent uses.

Source: City of Morro Bay Municipal Code

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As described in Section 3, Land Use and Zoning Setting, the least constrained concept designs include development at the North T-Pier, which is within the boundaries of Measures A-24 and D. The City would need to find that OSW O&M facilities at the North T-Pier are supportive of fishing activities, pursuant to Measure D and MBMC Chapter 17.11, in order for the facilities to be permitted. If the City finds that OSW O&M facilities at the North T-Pier do not meet the requirements of the Commercial Fishing zone, a General Plan land use designation would need to be approved via majority vote on a voter initiative ballot.

Additionally, the following land use considerations apply to the Intermediate Staging Zones identified in the least constrained concept designs:
 Option 4A: The Intermediate Staging Zone is located on a parcel with a land use designation of Commercial/Recreational Fishing and zoning designation of Commercial Fishing. Measures A-24 and D apply to this site. The concept design would need to create an Intermediate Staging Zone facility that integrates significant components that are supportive of fishing activities, pursuant to Measure D and MBMC Chapter 17.11, in order for the facility to be permitted. If the City finds the Intermediate Staging Zone facility does not meet the requirements of the Commercial Fishing zone, a General Plan land use designation and zoning change would need to be approved. The land use designation change would be subject to voter approval, in addition to Planning Commission, City Council, and Coastal Commission approval, in accordance with Measure A-24.
 Option 4B: Based on the City’s land use and zoning GIS maps and concept design figures, the Intermediate Staging Zone appears to be located within City property (a parking area) within the public right-of-way (no zoning or land use designation is established for this location). Measure A-24 and Measure D do not apply to this site. Provided the maps and concept design figures are accurate, there would not be major land use and zoning constraints to developing an Intermediate Staging Zone facility in this location, but City encroachment permits and other requirements would be anticipated to apply.
 Split Location Variant A: The Intermediate Staging Zone is located on a parcel with a land use designation of Public/Institutional and zoning designation of Public Facility. Measures A-24 and D do not apply to this site. An Intermediate Staging Zone facility could be conditionally permitted in this location if it was considered to be part of the Harbor, Port, and Marina Facilities use classification. For all other use categories, a General Plan land use amendment and zone change would be required, but a voter ballot initiative would not be necessary as part of the approvals process.
 Split Location Variant B: The Intermediate Staging Zone is located on a parcel with a land use designation of Commercial/Recreational Fishing and zoning designation of Commercial Fishing.

Measures A-24 and D apply to this site. The concept design would need to create an the Intermediate Staging Zone facility that integrates significant components that are supportive of fishing activities, pursuant to Measures A-24 and D and MBMC Chapter 17.11, in order for the facility to be permitted. If the City finds the Intermediate Staging Zone facility does not meet the requirements the Commercial Fishing zone, a General Plan land use designation and zoning change would need to be approved. The land use designation change would be subject to voter approval, in addition to Planning Commission, City Council, and Coastal Commission approval, in accordance with Measure A-24.
 Split Location Variant C: The Intermediate Staging Zone is located on a parcel with land use and zoning designations of Visitor Serving Commercial. Measure A-24 applies to this site, but Measure D does not apply. An Intermediate Staging Zone facility could be conditionally

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permitted in this location if it was considered to be part of the Harbor, Port, and Marina Facilities use classification. If the City finds the Intermediate Staging Zone facility is not a permitted use in the Visitor Serving Commercial zone, a General Plan land use designation and zoning change would need to be approved. The land use designation change would be subject to voter approval, in addition to Planning Commission, City Council, and Coastal Commission approval, in accordance with Measure A-24.

The areas where OSW O&M facilities can be developed under City authority would be dependent upon the land use classification that the City considers the facilities to fall under. Pursuant to MBMC Section 17.06.020, if the City determines that OSW O&M facilities do not fit into the City’s existing land use classifications, a zoning code amendment would be required to add the appropriate use classification. Nonetheless, as illustrated in Table 4, the Coastal Dependent Industrial and General (Light) Industrial land use districts appear to present the greatest flexibility for development of OSW O&M facilities. OSW O&M facilities would require a CDP issued by the CCC, with City of Morro Bay CUP requirements depending on the land use classification for the OSW O&M facility and the land use designation of the parcel. For sites where OSW O&M facilities would not fall within one of the permitted uses (including conditionally permitted), an amendment to the General Plan land use and/or zoning designations would be required.

As described above, OSW O&M facilities utilizing the North T-Pier and Intermediate Staging Zone locations within the boundaries of Measures A-24 and D would face major hurdles if the uses were not found to support commercial fishing and visitor serving uses. In these locations, any land use changes would require a majority vote of city residents through a ballot measure. This would present a major constraint to the feasibility of developing OSW O&M infrastructure given community opposition to new, industrial-type development in the waterfront area. City approval of a General Plan land use and zoning amendment, including the accompanying CEQA documentation, would be required prior to the CCC processing a CDP.

5.4 CEQA and NEPA Requirements

5.4.1 California Environmental Quality Act
OSW O&M facilities would require discretionary approvals by the CCC, CSLC, and/or City depending on the locations of proposed facilities and details of the project description. Preparation of an Environmental Impact Report (EIR) would likely be required. The CSLC or the City would serve as the lead agency for CEQA, pursuant to SB 286. CSLC and the City would coordinate to determine which agency would take the CEQA lead agency role for any OSW O&M facilities occurring within City jurisdiction. Based on initial conversations with the CSLC, CCC, San Luis Obispo County, and City, the City would likely take the lead agency role for CEQA.

CEQA Appendix G topics of particular concern for these facilities would include the following:

Aesthetics, Air Quality, Biological Resources, Cultural Resources, Hydrology and Water Quality, Hazards and Hazardous Materials, Noise, Public Services and Recreation, Transportation, and Tribal Cultural Resources.

Technical studies that may be required to support the CEQA analysis include the following:
 Visual simulations/viewshed analysis
 Air Quality/Greenhouse Gas Emissions Study
 Noise Study

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 Cultural Resources Analysis (CRA)
 Biological Resources Analysis (BRA)
 Marine Biological Resources Assessment (MBRA)
 Protocol Surveys for special status species (if determined or required by the BRA/MBRA)  Traffic Study
 Phase I/II Environmental Site Assessment
 Geotechnical Study
 Hydrology Study
The typical timeframe for completion of each technical study is two to three months. The typical timeframe for completion of an EIR (inclusive of technical study preparation) is a minimum of one year, with more time required for complex or controversial projects. For a potential OSW O&M Facilities project, a timeframe of approximately 1.5-2 years is anticipated.

5.4.2 National Environmental Policy Act
If an OSW O&M facility includes federal funding sources or requires permit approvals by a federal agency such as the USACE (as would likely be required for any facilities occurring within Morro Bay Harbor), NEPA may be triggered depending on the specific permits required and funding received. If NEPA compliance is required, the responsible entity is anticipated to be USACE. Pursuant to SB 286, coordination between the CCC, CSLC, City of Morro Bay, and USACE would occur to avoid duplication of efforts under CEQA and NEPA. As such, there is the potential to prepare a Joint EIR/Environmental Impact Statement (EIS) or EIR/Environmental Assessment (EA) document.

Another potential route would be to prepare a CEQA Plus document, which would take the form of the EIR discussed above, with additional federal checklist items added. Per discussions with the CCC and CSLC, a memorandum of understanding with USACE may be an additional option for fulfilling NEPA requirements. Finally, there is the potential for a standalone NEPA document to be developed by the project proponent to address multiple NEPA drivers (including USACE Section 404 permits and USFWS and NMFS authorization for incidental take of protected species). This document could be utilized by multiple federal agencies, if needed, to support their individual NEPA requirements.

Technical studies and analysis completed to support CEQA compliance would be utilized in the preparation of NEPA documentation. Timeframes for the NEPA process can vary substantially. If a Joint EIR/EIS is required, a timeframe of approximately 2.5-3 years is anticipated. If a CEQA Plus document is required, a timeframe of approximately 2 years is anticipated. The NEPA pathway would be determined by the permit requirements and funding source details, and in consultation with the responsible entity. Figure 17 provides a simplified flowchart illustrating the potential environmental review and permitting pathways for OSW O&M Facilities in Morro Bay.

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Figure 16 Environmental Review and Land Use Permitting Flowchart

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6 Environmental Planning and Regulatory
Permitting – Timelines and Costs
The least constrained concept design concepts for Morro Bay create multiple environmental planning and permitting scenarios dependent on the location of the primary facility and land ownership. For each of the concept designs the developments are within the Morro Bay CSLC grant deeded lands and within the coastal zone and CCC retained jurisdiction. The individual concept designs ultimately determine the complexity of the environmental planning and permitting processes. The development of a related but separate land-based OSW O&M facility (office space, maintenance yards, etc.) in or outside of the coastal zone may justify a separate environmental analysis and approval process depending on timing and its association with the proposed concept design. Each of the concept designs incorporates significant changs to the Morro Bay Harbor Federal Navigation Channel that would require early coordination with the USACE and support from the USCG prior to the development of preliminary design plans or start of any concept-specific planning or permitting efforts. Proposed changes to the Federal Navigation Channel could be led and funded by the USACE or the project proponent that would precipitate drastically different regulatory processes, timelines and cost considerations.

6.1 Environmental Planning
Environmental planning for concept designs that involve a consolidated and comprehensive inwater and landside coastal development design within Morro Bay’s jurisdiction would be anticipated to be led by the City in coordination with the project proponent. As described above in Section 5.4, CEQA and NEPA Review, environmental review under CEQA and NEPA would be required. It is anticipated that the City would be the CEQA lead agency and USACE would be the NEPA responsible entity. Pursuant to SB 286, CEQA and NEPA review would be undertaken concurrently, utilizing the same technical studies. There is the potential for preparation of some form of a joint document (to be determined through consultation between the City and USACE). It is anticipated that a Joint EIR/EIS or EIR/EA would be prepared for OSW O&M facilities. Preparation of a Joint EIR/EIS or EIR/EA is expected to take two to three years, with an estimated cost of around $1.5-2 million for preparation of the EIR/EIS or EIR/EA and associated technical studies.

6.2 Regulatory Permitting
Section 5.2, Environmental Permitting Requirements, provides an overview of the federal, State and local permitting agencies, statutes and authorizations under which biological, cultural, and water resources are managed at the federal, state, and local levels. The permitting process and approvals for each of the concept designs for Morro Bay would follow similar pathways and would need to be supported by various technical studies that would, in most cases, support both the environmental planning and permitting processes. The permitting timelines and estimates costs for federal, State, and local permits is provided in the following subsections.

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6.2.1 Federal Permitting
Prior to the start of any permitting or planning actions, the proposed concept design and changes to the Federal Navigation Channel should be discussed informally with the USACE and USCG. Changes to the Federal Navigation Channel depth, extent, or alignment can be led by the project proponent, or be investigated through a local and federal cost shared study between a non-federal sponsor and the USACE, but follow very different processes, timelines, and cost considerations. In order for USACE to cost share on an investigation or eventual implementation, federal interest would need to be demonstrated. If the project proponent intends for USACE to support the project or to cost share on modifications to the Federal Navigation Channel, for either initial deepening or future channel maintenance to an increased depth, the USACE must first conduct a Federal Interest Determination (FID), and validate the feasibility and justification of the project through the civil works feasibility process. For small navigation projects that are not complex, the Continuing Authorities Program, Section 107 is a program that can support a cost shared (50/50) feasibility study looking at changes to the small boat harbor and navigation in Morro Bay. The Continuing Authorities Program is subject to available funding nationally and new starts compete with requests enterprise wide. Section 107 projects must not exceed $15 million in federal costs, including both the feasibility study, and design and implementation of the project (including maintenance costs over 50 years). For navigation projects exceeding this cost or complexity, a General Investigation feasibility study would need to be authorized by Congress and funded in order to proceed with a cost shared study. Should the study recommend an alternative for authorization, Congress would then need to authorize the design and construction, which would also be cost shared.

The FID involves verifying that the proposed project meets the requirements of federal interest and USACE responsibilities under the Continuing Authorities Program. The proposed action would need to align with federal interests as outlined in various legislative authorities and feasibility studies would need to be conducted to evaluate alternatives and recommend a plan for implementation.

Partnering with non-federal sponsors could be formed to improve environmental quality and ensure alignment with federal processes but would require specific agreements and cost-sharing arrangements. If the USACE leads the effort, it would need to obtain funds from the federal government to perform the design study and prepare a memorandum of approval based on the study results and existing data. Once the design study is completed, the USACE would then have to request funding from U.S. Congress for the project; it could take years to obtain the funding and then more years to contract and execute the proposed project (3-7 years is an approximate estimate).

If the USACE completed a FID that was favorable for the concept design, the design study could be developed by the project proponent in collaboration with USACE to expedite the process and timeline to obtain an approved concept design for altering the Federal Navigational Channel. At this stage, the project proponent could continue to work with the USACE to pursue federal funding or choose an alternative pathway by funding the deepening and realignment of the Federal Navigation Channel themselves to expedite the timeline for initial dredging and construction. This would need to be coordinated formally with USACE. This would still require that the USACE and USCG support the proposed changes to the Federal Navigation Channel and that the concept design aligns with federal interests. To modify the proscribed depths of the Federal Navigation Channel and thus for the USACE to assume maintenance dredging responsibility of the deepened Federal Navigation Channel, an approved, detailed project report or feasibility report would be required to document feasibility, environmental acceptability, and economic justification, including NEPA compliance. If

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the study was conducted under General Investigations, Congressional approval of the modifications to the Federal Navigation Channel would also be required. Construction would need to be approved by and formalized through agreements with the USACE.

Should the local proponent decide to undertake the work independently, federal permits would be required. In the case of a joint effort with USACE, federal permitting process would start with an informal initial engagement with the USACE engineering and regulatory entities to discuss the proposed action and scope of construction to confirm the scope and content of the design study, technical studies, consultations, and environmental analysis the USACE would require for both the 408 and 404/401 permitting processes. The USCG should be briefed and included as part of the initial outreach and engagement with the USACE. This assumes that the project proponent and concept design align with City land use policies and that the concept design contributes significant benefits to the community. Following informal engagement with the USACE and USCG that establishes mutually agreeable responsibilities, the project proponent would develop the necessary documents and studies to inform an acceptable design of the new Federal Navigation Channel.

Once the USACE has determined the necessary studies and information are in place, the formal permitting process can proceed through a pre-application meeting. The USACE would determine whether the 408 or 404 permit would serve as the NEPA responsible entity and a pre-application meeting would be scheduled that would include both divisions of the USACE. The pre-application meeting would also identify any of the other federal agencies that have not been previously informally engaged but warrant involvement. The complexity and siting of the individual concept design would influence the number of consultations and duration of the CWA 404/401 permitting process with streamlined permitting taking about nine to twelve months and protracted timelines between 16 to 24 months for concept designs that require comprehensive mitigation planning for dredging or extensive pile driving. The cost of the permitting process would be dependent on the concept design and the level of detail the engineering design drawings and alternatives analysis requires. Costs assume that the 408 permit and CWA Section 404/401 permitting processes would require a comprehensive BA and NHPA Section 106 compliance. Costs do not include technical studies (biological and cultural) outside of those developed as part of the CEQA/NEPA process nor do they include costs for mitigation for dredging impacts to submerged habitats, studies needed to permit take of marine mammals (IHA or LOA), or specific dredge characterization studies or approvals. The estimated cost is between $350,000 and $500,000. The cost to develop an IHA or LOA ranges from $80,000 to $150,000 and the development of a sediment sampling analysis plan, sediment characterization, and approvals would range from approximately $150,000 to $300,000 depending on the complexity of the field sediment characterization methods and sediment testing regime. Mitigation for impacts to habitats from dredging are likely to be significant but dredge material from the deepening of the Federal Navigation Channel is likely to be primarily sand and suitable for beneficial reuse in the form of beach nourishment. The use of the dredge material on the beach could partially offset impacts and reduce compensatory mitigation costs through the creation of out-of-kind habitat that supports coastal resiliency. Additional permit compliance monitoring costs ranging from $200,000 to several hundred thousand dollars should be anticipated to address mitigation monitoring requirements associated with both landside and in-water construction.

6.2.2 State Permitting
The state permitting process would start with an informal initial engagement similar to the federal permitting process and the two could be combined for efficiency and consistency if scheduling

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constraints can be overcome. The timeline for review and approval of CCC CDP’s is approximately 6-12 months and would include a CCC hearing to ratify approval. The RWQCB WQC Individual Permit (IP) application requires a pre-application meeting a minimum of 30 days before application submittal and will require a certified CEQA document. The RWQCB WQC application and approval process timeline is similar to the CCC CDP of approximately 6-12 months. For potential take of California protected species under CESA, the project proponent would need to engage the CDFW and submit an ITP application. If all the species are also protected under FESA, then the determinations and mitigation measures provided by USFWS and NMFS through the CWA Section 404/401 Section 7 consultations can be presented for consideration and approval. The CDFW ITP approval process requires a 12- to 18-month timeframe. The cost of obtaining CDP, WQC and ITP approvals would be dependent on the concept design and would be anticipated to range from $100,000 to $250,000, assuming the CEQA document, technical studies, engineering design drawings, and alternatives analysis have already been prepared and are sufficient to support each of the state permits. The cost of preparing the CEQA document, technical studies, engineering design drawings, and alternative analysis are not included here.

6.2.3 Local Permitting
The vetting of a proposed concept design should first be reviewed by the City and Harbor District, to ensure that the design and extent of the proposed development aligns with City codes, approval criteria and existing waterfront masterplan visioning. In all cases, the preliminary concept design plans should be sufficient to show the spatial extent and details of the submerged, shoreline and land side development areas. Review timelines of the various City departments vary based on the complexity of the concept design and workload for the responsible departments. The City and Harbor District reviews are generally less than 60 days. As of the FY 25-26 fee schedule, the City’s Conditional Use Permit fee is $17,572. However, the City would likely require a reimbursement agreement from an OSW developer to recover the City’s actual time and material costs to process a CUP application. The building permit fees would be determined based on the project valuation.

References
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7 References
California Coastal Commission. 2017. Introduction to the Coastal Act. https://www.coastal.ca.gov/coastalvoices/IntroductionToCoastalAct.pdf. Accessed April 2025.

Calflora. 2025. Information on Wild California Plants for Conservation, Education, and Appreciation.

Available at: www.calflora.org. Accessed July 2025.

California Department of Fish and Wildlife (CDFW). 2025a. California Natural Diversity Database, Rarefind V. Accessed February 2025.
______. 2025b. Biogeographic Information and Observation System (BIOS). Retrieved February 2025 from www.wildlife.ca.gov/data/BIOS
California Governor’s Office of Land Use and Climate Innovation. 2025. CEQA: The California Environmental Quality Act.
https://lci.ca.gov/ceqa/#:~:text=CEQA%20is%20intended%20to%20inform,visit%20our%20 Getting%20Started%20page. Accessed April 2025.

California Native Plant Society. 2025. Inventory of Rare and Endangered Plants. Updated online and accessed via: www.rareplants.cnps.org.

Cornell Lab of Ornithology. 2025a. All About Birds. Available at: https://www.allaboutbirds.org/.

Accessed February 2025.
______. 2025b. eBird: An online database of bird distribution and abundance [web application]. eBird, Ithaca, New York. Available at: http://www.ebird.org. Accessed February 2025.

California State Lands Commission (CSLC). 2025. City of Morro Bay. https://www.slc.ca.gov/grantedpublic-trust-lands/grantees/morro-bay/. Accessed November 2025.

Google Earth Pro. 2025. Version 7.3.6.10201.

Historical Society of Morro Bay. N.d. Measure D and Its Impact on Commercial Fishing in Morro Bay. https://historicalmorrobay.org/wp-content/uploads/2019/06/Measure-D-and-Its-Impacton-Commercial-Fishing-in-Morro-Bay.pdf. Accessed July 2025.

Morro Bay. 1996a. Waterfront Master Plan.
https://www.morrobayca.gov/DocumentCenter/View/1061/Waterfront-MasterPlan?bidId=. Accessed July 2025. ______. 2018. Downtown Waterfront Strategic Plan.
https://www.morrobayca.gov/DocumentCenter/View/11592/City-Council-Adopted-DWSP2018. Accessed July 2025. ______. 2021. Plan Morro Bay. https://www.morrobayca.gov/DocumentCenter/View/15424/PlanMorro-Bay-GP-LCP-Final. Accessed July 2025. ______. 2024. Resolution No. 61-23. https://www.slocounty.ca.gov/departments/clerkrecorder/forms-documents/elections-and-voting/current-elections/2024-11-05- presidential-general/documents/city-of-morro-bay-resolution-61-23. Accessed July 2025.

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______. 2025. Morro Bay Municipal Code Title 17- Zoning. https://library.municode.com/ca/morro_bay/codes/code_of_ordinances?nodeId=TIT17ZO.

Accessed July 2025.

Morro Bay National Estuary Program. 2025. Eelgrass Monitoring and Restoration. Available at:
https://www.mbnep.org/eelgrass/. Accessed January 2026.

National Marine Fisheries Service (NMFS). 2025. Critical Habitat Mapper. Available at:
https://www.fisheries.noaa.gov/resource/map/national-esa-critical-habitat-mapper.

Accessed February 2025.

San Luis Obispo County. 1988. Coastal Plan Policies. Available at:
https://www.slocounty.ca.gov/departments/planning-building/forms-documents/plansand-elements/elements/coastal-plan-policy. Accessed March 2025. ______. 2007. Coastal Plan Policies. https://www.slocounty.ca.gov/departments/planningbuilding/forms-documents/plans-and-elements/elements/coastal-plan-policy. Accessed April 2025.
______. 2010. General Plan Conservation and Open Space Element. https://www.slocounty.ca.gov/departments/planning-building/forms-documents/plansand-elements/elements/conservation-and-open-space-element/conservation-and-openspace-element. Accessed April 2025. ______. 2014. Land Use and Circulation Elements (Part II): The Area Plans. https://www.slocounty.ca.gov/departments/planning-building/forms-documents/plansand-elements/area-plans/inland-area-plans. Accessed July 2025. ______. 2015. Land Use and Circulation Element, Framework for Planning (Inland). https://www.slocounty.ca.gov/departments/planning-building/forms-documents/plansand-elements/elements/framework-for-planning-inland. Accessed April 2025. ______. 2018. Land Use and Circulation Element, Framework for Planning (Coastal Zone). https://www.slocounty.ca.gov/departments/planning-building/forms-documents/plansand-elements/elements/framework-for-planning-inland. Accessed April 2025. ______. 2024. Estero Area Plan. https://www.slocounty.ca.gov/departments/planningbuilding/forms-documents/plans-and-elements/area-plans/estero-area-plan932f746405ada2b0660ab72d88a6afc7. Accessed July 2025. ______. 2025a. County Code Title 22.
https://library.municode.com/ca/san_luis_obispo_county/codes/county_code?nodeId=TIT2 2LAUSOR. Accessed April 2025.
______. 2025b. County Code Title 23.
https://library.municode.com/ca/san_luis_obispo_county/codes/county_code?nodeId=TIT2 3COZOLAUS. Accessed April 2025.

Pacific Veg Map. 2025. Available at: https://pacificvegmap.org/. Accessed July 2025.

United States Department of Agriculture, Natural Resources Conservation Service. 2025a. Web Soil Survey. Available at: https://websoilsurvey.sc.egov.usda.gov/App/HomePage.htm. Accessed July 2025.

References
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______. 2025b. Lists of Hydric Soils. National Cooperative Soil Survey, U.S. Department of Agriculture. Available at:
https://www.nrcs.usda.gov/wps/portal/nrcs/main/soils/use/hydric/. Accessed July 2025.

United States Environmental Protection Agency (USEPA). 2025a. What is the National Environmental Policy Act? https://www.epa.gov/nepa/what-national-environmental-policyact#:~:text=The%20National%20Environmental%20Policy%20Act%20(NEPA)%20was%20sig ned%20into%20law,actions%20prior%20to%20making%20decisions. Accessed April 2025. ______. 2025b. How’s My Waterway?. Available at: https://mywaterway.epa.gov/. Accessed March 2025.

United States Fish and Wildlife Service (USFWS). 1973. The Endangered Species Act of 1973, as amended (16 U.S.C 1531 et seq.).
______. 2025a. Information for Planning and Consultation online project planning tool. Available at:
https://ecos.fws.gov/ipac/
______. 2025b. Critical Habitat Portal. Available at: https://ecos.fws.gov/ecp/report/table/criticalhabitat.html ______. 2025c. National Wetlands Inventory. Available at: https://www.fws.gov/program/nationalwetlands-inventory United States Geological Survey (USGS). 2025. National Hydrography Dataset. Accessed via the national map. Accessed July 2025.

Western Regional Climate Center. 2025. Climate of California. Available at: https://wrcc.dri.edu/cgibin/cliMAIN.pl?ca6569. Accessed July 2025.

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C. Preliminary geotechnical desk study

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Project: CA Central Coast OSW – Phase II
Our reference: 504101628-002 Your reference:

Prepared by: M Yazdi Date: November 21, 2024
Approved by: O Pengilly Checked by: T Sheridan
Subject: Morro Bay OSW O&M Geotechnical Desk Study
1 Introduction 2
2 Morro Bay 2

2.1 Site Location 2

2.2 Geological Hazards 2

2.2.1 Preliminary Subsurface Conditions 2

2.2.2 Indicative Engineering Soil Properties 3

2.2.3 Indicative Seismic and Liquefaction Considerations 4

2.2.4 Faults and Historical Earthquakes 4

2.2.5 Lateral Spreading and Landslide Susceptibility 5
3 Summary 6
4 References 7
CA Central Coast OSW - Phase II
Preliminary Geotechnical Desk Study - Morro Bay

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1 Introduction
Morro Bay has been identified as one of two potential sites for developing an offshore wind operations and maintenance (O&M) port, together with a second potential site at San Luis Obispo, which is reported separately. The O&M facility would support offshore wind farms by serving as a base of operations for offshore wind farm and for support vessels to travel to offshore wind farms and provide the needed maintenance and repairs.

Building on efforts in 2022 to assess port infrastructure opportunities to support offshore wind in Central California, the County of San Luis Obispo is seeking to further assess this area for feasibility to host an O&M facility. This report provides the geotechnical desk study of the Morro Bay site, using currently available data.

The scope of this desk study includes:

1. Review of available geological maps, reports and other relevant data sources to identify potential geotechnical constraints such as groundwater, loose/soft surface soil, existing fill, compressible soil, expansive soil, liquefiable soil and lateral spreading.

2. Desktop review mapped of geological and seismic hazards in the general project area including the potential for liquefaction, lateral spreading, and qualitative estimated seismically induced settlement.

3. Develop initial conceptual model of geotechnical constraints geological hazards and approximate depth to groundwater.
2 Morro Bay

2.1 Site Location
The project is located at Morro Bay in San Luis Obispo County, CA. The approximate coordinates of the site are presented below, and these coordinates were used for the desk study in this report. ● Latitude: 35.37134°
● Longitude: -120.85802°

2.2 Geological Hazards

2.2.1 Preliminary Subsurface Conditions
The Morro Bay site has Quaternary deposits Qs as shown in Figure 2.1. The geological unit Qs indicates extensive marine and nonmarine sand deposits generally near the coast or desert playas. This is consistent with the coastal and marine environment. Quaternary deposits are anticipated to be underlain by tertiary aged intrusive igneous rocks that outcrop near to the site.

According to Geo Hazard and Resources report by City of Morro Bay, depth to bedrock (geologic unit Kf – interbedded sandstone and shale) is approximately 70 ft below ground surface which was observed from multiple boreholes in the vicinity of the site. Although the placement of dredge material in the nearshore of Morro Bay can create local turbidity impacts during discharge operations, the material placed would consist of

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beach-compatible sand, which is expected to be free of contaminants and settle out of the water quickly (USACE, 2013). According to USACE (2013) no sources with high-level of contaminants were found around the site.

Figure 2.1: Geologic Map of Morro Bay Site
Source: California Department of Conservation Online Tool (https://maps.conservation.ca.gov/cgs/gmc/)

2.2.2 Indicative Engineering Soil Properties
To obtain preliminary indications of the potential engineering soil properties at the desk study phase, an online tool (Web Soil Survey, United States Department of Agriculture, Natural Resources Conservation Service) was utilized. Table 2.1 summarizes soil properties and classifications indicated by this tool. This suggests the majority of site comprises sandy material which is likely to be saturated due to the proximity of the site to the coast. Properties such as liquid limit and plasticity index are not available for this area. However, the surrounding area in the vicinity of the site generally has non-plastic soil due to the coastal marine environment.

These values should be taken as indicative only, and field investigations would be required to confirm site conditions, materials and properties, and support future assessment.

Table 2.1: Indicative Engineering Soil Properties
Parameter Percent Clay Percent Silt Percent Sand Water Content (%)
Unified Soil
Classification
Estimated value 2.5 1.5 96 2.2 SM

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2.2.3 Indicative Seismic and Liquefaction Considerations Assuming Site Class D and Risk Category III, the ASCE Hazard Tool was used to estimate preliminary seismic design parameters for the site (Table 2.2). Site Class D is usually considered as default site class when no geotechnical data is available at the site. Risk Category III is referring to the buildings and other structures, the failure of which could pose a substantial risk to human life. Site class and risk category should be revisited and reevaluated if this site progresses for further consideration.

Table 2.2: Indicative Seismic Design Parameters (Morro Bay) Parameter Ss
(g)
S1
(g)
SMS
(g)
SM1
(g)
SDS
(g)
SD1
(g)
TL
(s)
PGAM
(g)
VS30
(m/s)
Seismic Design
Category
Estimated
value

1.09 0.36 1.36 0.91 0.9 0.6 8 0.52 260 D
Note: Where values of the multi-period 5%-damped MCER response spectrum are not available from the USGS Seismic Design Geodatabase, the design response spectrum shall be permitted to be determined in accordance with Section 11.4.5.2 of ASCE 7-22 per the ASCE Hazard Tool.

Considering the high seismicity level and the sandy nature of the site, it is important to conduct a liquefaction assessment for the site. Liquefaction can potentially cause foundation settlement and lateral spreading which affects the performance of the structures and port facility. Additional site-specific geotechnical data such as obtaining shear wave velocity of top 100 ft or 30 m (VS30) and standard penetration testing can provide more information about the liquefaction potential and the potential associated risks.

2.2.4 Faults and Historical Earthquakes
According to US Geological Survey Quaternary Faults online tool, the site is in a seismically active region with multiple faults present in the region (Figure 2.2). As a result, many earthquakes have been recorded in the region (Figure 2.3). It is therefore important that for future design stages the seismic hazard is considered and probabilistic and deterministic seismic hazard analyses are undertaken to quantify the risk.

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Figure 2.2: Fault Map (Morro Bay)
Source: California Department of Conservation Online Tool (https://maps.conservation.ca.gov/cgs/fam/app/) Figure 2.3: Historical Earthquakes Around Central Coast, CA Source: California Department of Conservation Online Tool (https://maps.conservation.ca.gov/cgs/historicearthquakes/)

2.2.5 Lateral Spreading and Landslide Susceptibility
Based on the available LiDAR mapping (Figure 2.4) of the site, the ground surface is relatively flat indicating low probability of lanslide risks at the proposed site location. However, considering the findings of Sections

2.2.2 and 2.2.3, there is a potential for liquefaction-induced lateral spreading which can potentially result in damage to any future port facilities.

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Figure 2.4: LiDAR Map (Morro Bay)
Source: USGS Lidar Explorer Map (https://apps.nationalmap.gov/lidar-explorer/#/) 3 Summary
This report presents a preliminary geotechnical desk study of the Morro Bay site as one of two potential locations for developing an offshore wind operations and maintenance (O&M) facility. This initial review of publicly available data includes preliminary subsurface condition and geological setting, indicative engineering soil properties, and seismic and liquefaction considerations, along with records of faults and historical earthquakes and lateral spreading and landslide susceptibility.

Based on the available data reviewed in the preceding sections, no significant/unusual geotechnical risk has been identified beyond those typical of any coastal zone in the region. It is anticipated that any port/pier/jetty would require piled foundations into underlying competent material below the seabed. Supporting facilities on the coast are likely to comprise a combination of piled and shallow foundations, pending the outcome of investigations and seismic studies, and confirmation of anticipated structural loadings.

Should the Morro Bay site be selected for further study, further geotechnical investigations will be required to assess the site condition and the potential geotechnical risks.

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4 References
● California Department of Conservation online tools (Geology Division) [Accessed: November 13, 2024] (https://www.conservation.ca.gov/cgs)
● Geo Hazard and Resources report by City of Morro Bay
(https://www.morrobayca.gov/DocumentCenter/View/15266/Geo-Hazards-and-Resources) ● US Army Corps of Engineers (USACE). 2013. Draft Environmental Assessment Morro Bay Six Year Federal Maintenance Dredging Program San Luis Obispo County, California. (https://www.spl.usace.army.mil/Portals/17/docs/publicnotices/morro_bay_draft_ea.pdf) ● U.S. Geological Survey Lidar Explorer Map [Accessed: November 13, 2024] (https://apps.nationalmap.gov/lidar-explorer/#/)
● U.S. Geological Survey Online Hazard Tool, US Quaternary Faults [Accessed: November 13, 2024] (https://usgs.maps.arcgis.com/apps/webappviewer/)
● Web soil survey; Natural Resources Conservation Service. U.S. Department of Agriculture [Accessed:

November 13, 2024] (https://websoilsurvey.nrcs.usda.gov/app/WebSoilSurvey.aspx).

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mottmac.com

Prepared By: ME/NS Dept Review: GK
City Manager Review: JC City Attorney Review: BS
Staff Report
TO: Honorable Mayor and City Council DATE: April 22, 2026 FROM: Greg Kwolek, Public Works Director
SUBJECT: Approve a Professional Services Agreement with Cannon Corporation for Design of Phase 1 and Environmental Permitting for all Phases of the North Morro Bay Water Improvements Project

RECOMMENDED ACTION
Approve and authorize the City Manager to execute a professional services agreement with Cannon Corporation to provide design and engineering services during construction for Phase 1 of the North Morro Bay Water Improvements Project (Project), and environmental review and permitting for all phases of the Project, in an amount not-to-exceed $525,492.00, and authorize the City Manager to execute amendments if necessary not to exceed $52,549.00 for contingencies.

ALTERNATIVES
The City Council may:

1. Choose not to approve the professional services agreement with Cannon Corporation; or

2. Provide other direction to staff.

PROJECT SUMMARY
In 2017, the City initiated the OneWater Morro Bay Plan to comprehensively evaluate water, wastewater, and stormwater systems and identify long-term infrastructure needs. Hydraulic modeling and fire flow analysis identified the following water system concerns related to the Nutmeg and Upper Kings Pressure Zones:
 Deficient water pressures and fire flow capacity
 A concentration of underperforming hydrants in North Morro Bay  System-wide deficiencies related to storage, conveyance, and pressure management To address these concerns, the OneWater Plan recommended a series of improvements including:
 Replacement of the Nutmeg tank with a new larger pre-stressed concrete tank  Removal of the Elena tanks
 Booster pump upgrades
 Pipeline improvements to eliminate reliance on the Vashon Booster Pump Station By 2022, City staff prepared a high-level estimate indicating that the Nutmeg project, inclusive of the abovementioned improvements, could cost over $19 million. Additionally, a tank replacement project presented constructability constraints. Access to the project site is constrained by steep terrain. Also, the site is in close proximity to residential development, and construction would involve challenges with staging and traffic. Further, the City does not have property control of the site because it is privately owned and leased to the City.

AGENDA NO: 8.b
MEETING DATE: April 28, 2026

In light of this, City staff engaged Cannon to develop project alternatives that would address water system deficiencies while saving costs and avoiding a tank replacement at the Nutmeg Tank site. In response to the cost and constructability challenges associated with replacing the Nutmeg tank, the City completed an alternatives analysis in 2024 to identify more cost-effective and implementable solutions. The analysis determined that the original project objectives of improving water pressure and fire flow could be achieved through a combination of several discreet individual system-wide improvements, including:
 Strategic pipeline upsizing and interconnections
 Pressure zone modifications and PRV installations
 Optimization of existing storage within the Kings tank system  Several urgent system improvements and upgrades
These improvements are being implemented as a phased program now called the North Morro Bay Water Improvements Project (Project), since the project no longer involves replacement of the Nutmeg tank. This approach achieves the same functional goals as a new storage tank (adequate fire flow, system reliability, and pressure stability) but avoids the significant challenges associated with constructing a tank at the Nutmeg site.

This first phase of the Project, estimated to begin construction in 2027, addresses immediate concerns with existing infrastructure and lays the foundation for future phases of improvements. Due to the broad scope of these improvements across north Morro Bay, a phased construction approach is suggested as listed below:

1.1 Close off and demo Elena Tanks

1.2 Design and install skid mounted booster to Nutmeg Zone, including future fire pump

1.3 Replace pump at Vashon Booster Station

1.4 Increase hydraulic grade line (HGL) at Errol pressure reducing valve (PRV), Sunset PRV, and Desal PRV to 220’ HGL

1.5 Increase the Errol PRV to 8”

1.6 Replace the Errol Street pipeline with 8” pipe, upstream of PRV

1.7 Connect Elena and Blanca zones at Sequoia and Main Streets for fire flow

1.8 Install check valve (PRV) from Blanca to Elena (set higher)

1.9 Install check valve (PRV) from Elena to Blanca (set lower)

1.10 Provide SCADA controls/signal for all improvements

1.11 Install 25’ of new 12” pipe at Elena and Alder Streets

1.12 Investigate rehabilitation of existing Nutmeg Tank in service

1.13 Install new 6” water main on Laurel Ave from Cuesta Ave to Laurel northern dead end Subsequent phases 2-4 consist of pipeline, pump and tank upgrades to improve system flow and pressure. Staff plans to bring later phases of the project to the Public Works Advisory Board for review and input.

DISCUSSION
On December 16, 2025, City staff published a Request for Proposals for design and engineering services during construction specific to the first phase of improvements, and environmental review for all phases of the Project. Two responsive proposals were received and were evaluated by a Staff panel, following which oral interviews were conducted. Cannon Corporation was found to be the most qualified and was selected by staff. The cost proposal was then opened and reviewed by staff, and subsequently negotiated the terms, scope of fee of the proposed agreement to meet the project goals, within the available budget and meeting project timelines.

FISCAL IMPACT
No new funding is requested for this agreement. Funding for design of Phase 1 of the North Morro

Bay Water Improvements Project is already included in the City’s adopted capital improvement budget, with the specific account for the Project currently holding a fund balance of $5,043,000.

The Project was incorporated into the City’s water rate structure and capital planning efforts over two rate cycles, including the 2015 rate increases and subsequent rate adjustments, which anticipated funding for major water system improvements, including the Nutmeg Tank replacement and related infrastructure improvements.

ATTACHMENT

1. Professional Services Agreement with Cannon Corporation

1 AGREEMENT FOR SERVICES

BETWEEN CITY OF MORRO BAY AND

CANNON CORPORATION
THIS AGREEMENT FOR SERVICES (“Agreement”) is made and entered into this 29th day of April, 2026 by and between CITY OF MORRO BAY, a California municipal corporation (“City”) and CANNON CORPORATION, a California Corporation (“Consultant”). City and Consultant may be referred to individually as “Party” or collectively as “Parties.” In consideration of the mutual promises and covenants made by the Parties and contained herein and other consideration, the value and adequacy of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1. SERVICES OF CONSULTANT

1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant shall provide those services specified in the “Scope of Services” attached hereto as Exhibit A and incorporated herein by this reference, which may be referred to herein as the “services” or “work” hereunder. As a material inducement to City entering into this Agreement, Consultant represents and warrants: a) all services set forth in the Scope of Services will be performed in a competent and satisfactory manner; b) all materials used for services will be both of good quality as well as fit for the purpose intended; and, c) Consultant shall follow the highest professional standards and practices in performing the services required hereunder.

1.2 Consultant’s Proposal. The Scope of Services shall include the scope of services or work included in Consultant’s proposal or bid, which shall be incorporated herein by this reference as though fully set forth herein. In the event of any inconsistency between the terms of such proposal or bid, and this Agreement, the terms of this Agreement shall govern. No other terms and conditions from Consultant’s proposal or bid, other than description of scope of services or work, shall apply to this Agreement, unless specifically agreed to by City in writing.

1.3 Compliance with Law. All services rendered hereunder shall be provided in accordance with all ordinances, resolutions, statutes, rules and regulations of City and any federal, State or local governmental agency having jurisdiction in effect at the time services are rendered.

City, and its officers, employees and agents, shall not be liable at law or in equity for failure of Consultant to comply with this Section.

1.4 Licenses, Permits, Fees and Assessments. Consultant shall obtain at its sole cost and expense such licenses, permits and approvals as may be required by law for the performance of the services required by this Agreement. Consultant shall have the sole obligation to pay for any fees, assessments and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for Consultant’s performance of the services required by this Agreement, and shall indemnify, defend and hold harmless City against any such fees, assessments, taxes, penalties or interest levied, assessed or imposed against City hereunder.

1.5 Additional Services and Compensation. City shall have the right at any time during the performance of the services, without invalidating this Agreement, to order extra work beyond that specified in the Scope of Services or make changes to the work by altering, adding to

2 or deducting from said work. No such extra work may be undertaken unless a written order, consistent with both Section 9.4 as well as Morro Bay Municipal Code (“MBMC”) section

3.08.060 (and as amended), is first given by City to Consultant, incorporating therein any adjustment in the Contract Sum for the actual costs of the extra work and/or the time to perform this Agreement, which said adjustments are subject to the written approval of Consultant. It is expressly understood by Consultant that the provisions of this Section shall not apply to services specifically set forth in the Scope of Services or reasonably contemplated therein. Consultant hereby acknowledges that it accepts the risk that the services to be provided pursuant to the Scope of Services may be more costly or time consuming than Consultant anticipates and that Consultant shall not be entitled to additional compensation therefor. City may in its sole and absolute discretion have similar work done by other consultants.

1.6 Familiarity with Work. By executing this Agreement, Consultant represents and warrants Consultant: a) has thoroughly investigated and considered services to be performed, b) has carefully considered how services should be performed, and c) fully understands the facilities, difficulties and restrictions attending performance of services under this Agreement.

1.7 Software and Computer Services. If the Scope of Services includes the provision and/or installation of any software, computer system, or other computer technology, Consultant represents and warrants that it is familiar with and/or has inspected City’s current infrastructure, equipment, computer system and software and that the software, computer system, or other computer technology provided and/or installed by Consultant under this Agreement is compatible, and shall be fully functional, with such infrastructure, equipment, computer system and software of City. Consultant acknowledges that City is relying on this representation by Consultant as a material consideration in entering into this Agreement.

1.8 Prevailing Wages. If services include any “public work” or “maintenance work,” as those terms are defined in California Labor Code section 1720 et seq. and California Code of Regulations, Title 8, section 16000 et seq., and if the total compensation is $1,000 or more, Consultant shall pay prevailing wages for such work and comply with the requirements in California Labor Code section 1770 et seq. and 1810 et seq., and all other applicable laws.

1.9 Special Requirements. Additional terms and conditions of this Agreement, if any, which are made a part hereof are set forth in the “Special Requirements” attached hereto as Exhibit B and incorporated herein by this reference. In the event of a conflict between the provisions of Exhibit B and any other provisions of this Agreement, the provisions of Exhibit B shall govern.

ARTICLE 2. COMPENSATION AND METHOD OF PAYMENT

2.1 Contract Sum. Subject to any limitations set forth in this Agreement, City agrees to pay Consultant the amounts specified in the “Schedule of Compensation” attached hereto as Exhibit C and incorporated herein by this reference. The total compensation, including reimbursement for actual expenses, shall not exceed Five Hundred Twenty-Five Thousand Four Hundred and Ninety-Two Dollars ($525,492.00) (“Contract Sum”), unless additional compensation is approved pursuant to Section 1.5. Compensation may include reimbursement, for actual and necessary expenditures, if both specified in the Schedule of Compensation, as well as approved by City in advance. The Contract Sum shall include the attendance of Consultant at all

3 project meetings reasonably deemed necessary by City. Consultant agrees that if Consultant becomes aware of any facts, circumstances, techniques, or events that may or will materially increase or decrease the cost of the work or services, Consultant shall promptly notify the Contract Officer of said fact, circumstance, technique or event and the estimated increased or decreased cost related thereto.

2.2 Invoices. Unless some other method of payment is specified in Exhibit C, Schedule of Compensation, in any month in which Consultant wishes to receive payment, no later than the first business day of such month, Consultant shall submit to City, in a form approved by City’s Finance Director, an invoice for services rendered prior to the date of the invoice. By submitting an invoice for payment under this Agreement, Consultant is certifying compliance with all provisions of this Agreement. Except as provided in Sections 7.3, 7.4 and 7.5, City shall pay Consultant for all expenses stated thereon which are approved by City pursuant to this Agreement generally within thirty (30) days, and City will use its best efforts to make payment no later than forty-five (45) days, from the submission of an invoice in an approved form. In the event any charges or expenses are disputed by City, the original invoice shall be returned by City to Consultant for correction and resubmission. Review and payment by City for any invoice provided by Consultant shall not constitute a waiver of any rights or remedies provided herein or any applicable law. Each invoice is to include (unless otherwise specified by City): 1) line items for all personnel describing the work performed, the number of hours worked, and the hourly rate; 2) line items for all materials and equipment properly charged to the Services; 3) line items for all other approved reimbursable expenses claimed, with supporting documentation; and 4) line items for all approved subcontractor labor, supplies, equipment, materials, and travel properly charged to the Services.

ARTICLE 3. PERFORMANCE SCHEDULE

3.1 Time of Essence. Time is of the essence in the performance of this Agreement.

3.2 Term. Unless earlier terminated in accordance with Article 7 of this Agreement, this Agreement shall continue in full force and effect until completion of the services, which shall be no later than December 31, 2027.

3.3 Schedule of Performance. Consultant shall commence the services pursuant to this Agreement upon receipt of a written notice to proceed and shall perform all services within the time period(s) established in the “Schedule of Performance” attached hereto as Exhibit D and incorporated herein by this reference.

3.4 Force Majeure. The time period(s) specified in the Schedule of Performance for performance of the services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of Consultant, including, but not restricted to, acts of God or of the public enemy, unusually severe weather, fires, earthquakes, floods, epidemics, quarantine restrictions, riots, strikes, freight embargoes, wars, litigation, and/or acts of any governmental agency, including City, if Consultant shall within ten (10) days of the commencement of such delay notify City in writing of the causes of the delay. City shall ascertain the facts and the extent of delay, and extend the time for performing the services for the period of the enforced delay when and if in the judgment of City

4 such delay is justified. City’s determination shall be final and conclusive upon the Parties to this Agreement. In no event shall Consultant be entitled to recover damages against City for any delay in the performance of this Agreement, however caused, Consultant’s sole remedy being extension of this Agreement pursuant to this Section.

ARTICLE 4. COORDINATION OF WORK

4.1 Representative of Consultant. The representative of Consultant is Larry Kraemer, who is authorized to act on Consultant’s behalf with respect to the work or services specified herein and to make all decisions in connection therewith. It is expressly understood that the experience, knowledge, capability and reputation of the representative was a substantial inducement for City to enter into this Agreement. Therefore, the representative shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the services hereunder. For purposes of this Agreement, the representative may not be replaced nor may their responsibilities be substantially reduced by Consultant without the express written approval of City.

4.2 Contract Officer for City. The Contract Officer for City is Nate Stong (or such person as may be designated by the City Manager). The Contract Officer shall be the primary person on behalf of City responsible for the administration of the Agreement. It shall be Consultant’s responsibility to assure that the Contract Officer is kept informed of both the progress of the performance of the services as well as any decisions which must be made by City.

4.3 Approvals from City. City approvals or actions, pursuant to the authority of this Agreement, are to be made (unless otherwise specified) either by the City Manager or by their delegate as provided for in writing.

4.4 Independent Contractor. Neither City, nor any of its officers, employees or agents, shall have any control over the manner or means by which Consultant, or its officers, employees, agents or subcontractors, perform the services required herein, except as otherwise set forth herein. Consultant shall perform all services required herein as an independent contractor of City and shall remain under only such obligations as are consistent with that role. Consultant shall not at any time or in any manner represent that it, or any of its officers, employees, agents or subcontractors, are officers, employees or agents of City. City shall not in any way or for any purpose become or be deemed to be a partner of Consultant in its business or otherwise or a joint venturer or a member of any joint enterprise with Consultant. Consultant shall not incur or have the power to incur any debt, obligation or liability whatever against City, or bind City in any manner. Consultant represents and warrants that the personnel used to provide services to City pursuant to this Agreement shall at all times be under Consultant’s exclusive control and direction.

No City employee benefits shall be available to Consultant, its officers, employees, agents or subcontractors, in connection with the performance of this Agreement. City shall not be liable for compensation or indemnification to Consultant, its officers, employees, agents or subcontractors, for injury or sickness arising out of performing services hereunder. In the event that Consultant or any officer, employee, agent, or subcontractor of Consultant providing services under this Agreement claims or is determined by a federal or state agency, a court of competent jurisdiction, or the California Public Employees’ Retirement System, to be classified as other than an independent contractor for City, then Consultant shall indemnify, defend, and hold harmless City

5 for the payment of any and all assessed fines, penalties, judgments, employee and/or employer contributions, and any other damages and costs assessed to City as a consequence of, or in any way attributable to, the assertion that Consultant, or any officer, employee, agent, or subcontractor Consultant used to provide services under this Agreement, is/are employees of City.

4.5 Subcontracting or Assignment. The experience, knowledge, capability and reputation of Consultant, its principals and employees were a substantial inducement for City to enter into this Agreement. Therefore, without express written approval of City, Consultant shall not contract with any other entity to perform in whole or in part services required hereunder without express written approval of City, and neither this Agreement nor any interest herein may be transferred or assigned. No approved transfer shall release Consultant, or any surety or insured of Consultant, of any liability hereunder without express written consent of City.

ARTICLE 5. INSURANCE AND INDEMNIFICATION

5.1 Insurance Coverages. Prior to commencement of any services under this Agreement, and without limiting Consultant’s indemnification obligation to City, Consultant shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to City, for the duration of the Agreement, primary policies of insurance of the type and amounts below, issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by City, which shall cover all elected and appointed officers, employees and agents of City. City reserves the right at any time during the term of the Agreement to change the amounts and types of insurance required by giving Consultant ninety (90) days advance written notice of such change.

If such change results in substantial additional cost to Consultant, City and Consultant may renegotiate Consultant’s compensation.
(a) Commercial General Liability Insurance. A policy of commercial general liability insurance, with coverage at least as broad as Insurance Services Office (“ISO”) form CG 00 01, written on a per occurrence basis for bodily injury, personal injury and property damage. Defense costs must be paid in addition to limits. Coverage for an additional insured shall not be limited to its vicarious liability. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted. Limits shall be no less than $1,000,000 per occurrence for all covered losses and no less than $2,000,000 general aggregate.
(b) Worker’s Compensation Insurance. A policy of worker’s compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for Consultant against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Consultant in the course of carrying out the work or services contemplated in this Agreement.
(c) Automobile Liability. A policy of comprehensive automobile liability insurance, at least as broad as ISO form CA 00 01, written on a per occurrence basis covering

6 bodily injury and property damage in an amount not less than $1,000,000 combined single limit for each accident. Said policy shall include coverage for owned, non-owned, leased, hired cars and any automobile.
(d) Professional Liability. Professional liability insurance appropriate to Consultant’s profession. This coverage may be written on a “claims made” basis and must include coverage for contractual liability. Any policy inception date, continuity date, or retroactive date must be before the effective date of this Agreement. The professional liability insurance required by this Agreement must be endorsed to be applicable to claims based upon, arising out of, or related to services performed under this Agreement. The insurance must be maintained for at least five (5) consecutive years following the completion of Consultant’s services or the termination of this Agreement. During this additional 5-year period, Consultant shall annually and upon request of City submit written evidence of this continuous coverage. Limits shall be no less than $1,000,000 per claim and no less than $1,000,000 general aggregate. (e) Cyber Liability. Cyber liability insurance appropriate to Consultant’s profession and the services hereunder, written on a per occurrence basis, with limits not less than $1,000,000 per occurrence/loss, and $2,000,000 in the aggregate. Coverage shall be sufficiently broad to respond to the duties and obligations undertaken by Consultant pursuant to this Agreement and shall include, but not be limited to, claims involving: infringement of intellectual property; copyright; trademark; invasion of privacy violations; data breach; electronic information theft, loss, damage, destruction, alteration or misuse; release of private information; extortion; and, network security. The policy shall provide coverage for breach response costs, regulatory fines and penalties, and credit monitoring expenses, with limits sufficient to respond to these obligations.
(f) Excess Liability Insurance. Excess liability insurance may be used to satisfy the obligations herein. If excess liability insurance is used then the policy shall meet all the requirements herein and be at least as broad as the primary coverages set forth herein. Such policy shall: 1) include a drop down feature requiring the policy to respond if primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; 2) be payable on behalf of wording as opposed to reimbursement; 3) have concurrency of effective dates with primary policies; 4) “follow form” to the underlying primary policies; and, 5) provide insureds, under primary policies required herein, shall be insureds under the excess liability policy. (g) Subcontractors. In the event Consultant subcontracts any portion of the work in compliance with Section 4.5 of this Agreement, Consultant shall either: 1) include each subcontractor as insureds under its policies of insurance required herein; or, 2) Consultant shall furnish to City all documentation, required in Article 5 for Consultant, for each subcontractor. All coverages for subcontractors shall include all of the requirements stated herein.

5.2 General Insurance Requirements.
(a) Proof of Insurance, Enforcement and Notice. No work or services under this Agreement shall commence until both Consultant has provided City with insurance certificates, endorsement forms and appropriate insurance binders evidencing the above insurance coverages, as well as said documentation is approved by City. City reserves the right to inspect

7 complete, certified copies of, and endorsements to, all required insurance policies, at any time.

Any failure to comply with the reporting or other provisions of the policies including breaches or warranties shall not affect coverage provided to City. In the event any insurance policy required under this Agreement is cancelled or amended (and the insurance policy is not replaced pursuant to subsection (b) below), or does not comply with Article 5, then: 1) City has the right but not the duty to obtain insurance required herein and any premium paid by City will be promptly reimbursed by Consultant or City will withhold amounts sufficient to pay premium from Consultant payments; or, 2) City, notwithstanding any other provisions of this Agreement, may immediately terminate this Agreement. Consultant shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Consultant’s performance under this Agreement, and that involve or may involve coverage under any of the required insurance policies. (b) Cancellation/Amendment. All of herein required policies of insurance shall provide the insurance may not be amended or cancelled by insurer or any Party hereto without providing thirty (30) calendar days prior written notice (with exception of ten (10) calendar days prior written notice for nonpayment) to City. In the event any of said policies of insurance are amended or cancelled, Consultant shall, five (5) business days prior to the cancellation date, submit new evidence of insurance in conformance with this Agreement to City. (c) Additional Insureds. The commercial general liability policy provided for in Section 5.1(a) and the automobile liability policy provided for in Section 5.1(c) both shall name City and its elected and appointed officers, employees and agents (“City Parties”) as additional insureds and such coverage shall contain no special limitations on the scope of protection afforded to City and City Parties. A severability of interests provision must apply for all additional insureds ensuring that Consultant’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability, and policies of insurance shall not contain any cross-liability exclusions. (d) Primary, Subrogation, Contribution and Coverage. All of the above policies of insurance shall be primary insurance. The insurers for above policies, Consultant and any subcontractors are all deemed hereof to waive all rights of subrogation and contribution they may have against City or City Parties, and their respective insurers, and all insurance policies required herein shall be endorsed to waive such rights. Any insurance maintained by City or City Parties will apply in excess of, and not contribute with, Consultant’s insurance. If Consultant maintains broader coverage and/or higher limits than the minimum amounts provided herein, City requires and shall be entitled to the broader coverage and/or higher limits maintained by Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to City and City Parties. None of the coverages required herein will be in compliance with this Agreement if they include any limiting endorsement of any kind that has not been first submitted to City and approved of in writing. Requirements of specific coverage features or limits contained herein are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any Party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type.
(e) Limitations, Self- Insured Retention and Deductibles. Consultant agrees

8 that requirements of Article 5 shall not be construed as limiting in any way the extent to which Consultant may be held responsible for the payment of damages to any persons or property resulting from Consultant’s activities or the activities of any person or persons for which Consultant is otherwise responsible nor shall it limit Consultant’s indemnification liabilities as provided in Section 5.3. All insurance policies must specify that where the primary insured does not satisfy any self-insured retention, any additional insured may satisfy the self-insured retention.

Any deductibles or self-insured retentions must be declared to and approved by City. At City’s option, either the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects City and City Parties, or Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration, attorney’s fees, defense expenses and claims.

5.3 Indemnification.
(a) General Obligations. Consultant agrees, to the full extent permitted by law, to indemnify, defend and hold harmless City and its elected and appointed officers, employees and agents (each an “Indemnitee” and collectively, “Indemnitees”) against, and will hold and save them and each of them harmless from, whether actual or threatened, any and all actions, either judicial, administrative, arbitration or regulatory claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities (herein “Claims or Liabilities”) that may be asserted or claimed by any person, firm or entity arising out of or in connection with the negligent performance of the work, operations or activities provided herein of Consultant, its officers, employees, agents, subcontractors, or invitees, or any individual or entity for which Consultant is legally liable (each an “Indemnitor” and collectively, “Indemnitors”), or arising from Indemnitors’ reckless or willful misconduct, or arising from Indemnitors’ negligent performance of or failure to perform any term, provision, covenant or condition of this Agreement, and in connection therewith: 1) Consultant will defend any action or actions filed or threatened in connection with any such Claims or Liabilities, or at option of Indemnitee(s) will reimburse and pay for all costs and expenses, including legal costs and attorneys’ fees, incurred by Indemnitee(s) in connection therewith; and, 2) Consultant will promptly pay any judgment rendered against Indemnitee(s) for any such Claims or Liabilities, and will save and hold Indemnitee(s) harmless therefrom.
(b) Further Provisions. The indemnity obligation herein shall be binding on successors, assigns and heirs of Consultant and shall survive termination of this Agreement.

Consultant shall incorporate similar indemnity agreements as provided herein with its subcontractors, and if Consultant fails to do so Consultant shall be fully responsible to indemnify City hereunder therefor. Failure of City and/or City Parties (collectively “City” for solely this Section 5.3(b)) to monitor compliance with any of the indemnification provisions herein shall not be a waiver hereof. The indemnification provisions herein do not apply to claims or liabilities occurring as a result of City’s sole negligence or willful misconduct, but, to the fullest extent permitted by law, shall apply to claims and liabilities resulting in part from City’s negligence, except that design professionals’ indemnity hereunder shall be limited to claims and liabilities arising out of the negligence, recklessness or willful misconduct of the design professional. The indemnification provided herein includes Claims or Liabilities arising from any negligent or wrongful act, error or omission, or reckless or willful misconduct of Indemnitors in the performance of professional services hereunder. Payment of invoices by City is not a condition precedent to enforcement of the indemnity obligation herein. In the event of any dispute between

9 Consultant and City, as to whether liability arises from the sole negligence or willful misconduct of City, Consultant will be obligated to pay for City’s defense until such time as a final judgment has been entered adjudicating City as solely negligent or responsible for willful misconduct.

Consultant will not be entitled in the absence of such a determination to any reimbursement of defense costs including but not limited to attorney’s fees, expert fees and costs of litigation. (c) Professional Liability. When the law establishes a professional standard of care for Consultant’s services, to the fullest extent permitted by law, Consultant shall indemnify, defend and hold harmless Indemnitees against, and will hold and save them and each of them harmless from, whether actual or threatened, any and all Claims and Liabilities, consistent with all obligations provided for in this Section 5.3, to the extent same are caused in whole or in part by any negligent or wrongful act, error or omission, or reckless or willful misconduct of Indemnitors in the performance of professional services under this Agreement.

ARTICLE 6. RECORDS, REPORTS AND RELEASE OF INFORMATION

6.1 Records. Consultant shall keep, and require subcontractors to keep, such ledgers, books of accounts, invoices, vouchers, canceled checks, reports, studies or other documents relating to the disbursements charged to City and services performed hereunder (“books and records”) as shall be necessary to perform the services required by this Agreement and enable City to evaluate the performance of such services. Any and all such books and records shall be maintained in accordance with generally accepted accounting principles, shall be complete and detailed, and shall be readily accessible. City shall have full and free access to such books and records at all times during normal business hours of City, including the right to inspect, copy, audit and make records and transcripts. Such books and records shall be maintained for a period of three (3) years following completion of the services hereunder. City shall have access to such books and records in the event any audit is required. Consultant shall fully cooperate with City in providing access to any and all Consultant records and documents if a public records request is made and disclosure is required by law including but not limited to the California Public Records Act.

6.2 Ownership of Documents. All drawings, specifications, maps, designs, photographs, studies, surveys, data, notes, computer files, reports, records, documents and other materials (“documents and materials”) prepared by Consultant, its officers, employees, agents and subcontractors in the performance of this Agreement shall be the property of City and shall be delivered to City upon request of City and/or upon the termination of this Agreement, and Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights of ownership, use, reuse, or assignment of the documents and materials hereunder. Consultant may retain copies of such documents and materials for its own use. Consultant shall have the right to use the concepts embodied therein. All subcontractors shall provide for assignment to City of any documents and materials prepared by them, and in the event Consultant fails to secure such assignment, Consultant shall indemnify City for all damages resulting therefrom. Moreover, with respect to any Consultant documents and materials that may qualify as “works made for hire” as defined in 17 U.S.C. § 101, such documents and materials are hereby deemed “works made for hire” for City.

6.3 Confidentiality and Release of Information. All information gained or work product produced by Consultant in its performance of this Agreement shall be considered

10 confidential, unless such information is in the public domain or already known to Consultant.

Consultant shall not release or disclose any such information or work product to persons or entities other than City without prior written authorization from City. Consultant, its officers, employees, agents or subcontractors, shall not, without prior written authorization from City or unless requested by the City Attorney, voluntarily provide documents, declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the work performed under this Agreement. Response to a subpoena or court order shall not be considered “voluntary” provided Consultant immediately gives City notice of such court order or subpoena.

If Consultant, or any officer, employee, agent or subcontractor of Consultant, provides any information or work product in violation of this Agreement, then City shall have the right to reimbursement and indemnity from Consultant for any damages, costs and fees, including attorney’s fees, caused by or incurred as a result of Consultant’s conduct. As concerning, regarding or related to, in any way, this Agreement and the work performed thereunder: a) Consultant shall immediately notify City should Consultant, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party; b) City retains the right, but has no obligation, to represent Consultant or be present at any deposition, hearing or similar proceeding; and, c) Consultant agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Consultant, however, this right to review any such response does not imply or mean the right by City to control, direct, or rewrite said response.

ARTICLE 7. ENFORCEMENT OF AGREEMENT AND TERMINATION

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

District Court, venue shall lie exclusively in the Central District of California, in the County of San Luis Obispo, State of California.

7.2 Suspension, or Termination, Prior to Expiration of Term. This Section shall govern any termination of this Agreement except as specifically provided in Section 7.4 for termination for cause. City reserves the right to terminate or suspend this Agreement, or any portion hereof, at any time, for any reason, with or without cause, upon ten (10) days’ notice to Consultant, except that where termination or suspension is due to the fault of Consultant, the period of notice may be such shorter time as determined by City. Upon receipt of any notice of termination or suspension, Consultant shall immediately cease all services hereunder, unless the notice provides otherwise, or except such as specifically approved by City. Upon submittal of an invoice consistent with Section 2.2, Consultant shall be entitled to compensation for all services rendered prior to the effective date of the notice of termination or suspension and for any services authorized by City thereafter in accordance with the Schedule of Compensation, or such as may be approved

11 by City, except as provided in Section 7.5. In event of termination, or suspension, without cause pursuant to this Section, there is no need to provide opportunity to cure pursuant to Section 7.3.

7.3 Default of Consultant and Opportunity to Cure. In the event that Consultant is in default under the terms of this Agreement, City shall not have any obligation or duty to continue compensating Consultant for any work performed after the date of default. Instead, City may give notice to Consultant of the default and the reasons for the default. The notice shall include the timeframe in which Consultant may cure the default. This timeframe is presumptively ten (10) days, but may be extended, or reduced, if circumstances warrant, as determined by City. During the period of time that Consultant is in default, City shall hold all invoices and shall, when the default is cured, proceed with payment on the invoices, without liability for interest. In the alternative, City may, in its sole discretion, elect to pay some or all of the outstanding invoices during the period of default. If Consultant does not cure the default by conclusion of noticed timeframe, City may immediately both terminate this Agreement with notice to Consultant as well as pursue the remedy in Section 7.4, without prejudice to any other remedy to which City may be entitled at law, in equity or under this Agreement. Any failure on the part of City to give notice of Consultant’s default shall not be deemed to result in a waiver of City’s legal rights or any rights arising out of any provision of this Agreement.

7.4 Termination for Default of Consultant. If termination is due to the failure of Consultant to fulfill its obligations under this Agreement, City may, after compliance with the provisions of Section 7.3, take over the work and prosecute the same to completion by contract or otherwise, and Consultant shall be liable to the extent that the total cost for completion of the services required hereunder exceeds the compensation herein stipulated (provided that City shall use reasonable efforts to mitigate such damages), and City may withhold any payments to Consultant for the purpose of set-off or partial payment of the amounts owed City therefor.

7.5 Retention of Funds. Consultant hereby authorizes City to deduct from any amount payable to Consultant (whether or not arising out of this Agreement) (i) any amounts the payment of which may be in dispute hereunder or which are necessary to compensate City for any losses, costs, liabilities, or damages suffered by City, and (ii) all amounts for which City may be liable to third parties, by reason of Consultant’s acts or omissions in performing or failing to perform Consultant’s obligation under this Agreement. In the event that any claim is made by a third party, the amount or validity of which is disputed by Consultant, or any indebtedness shall exist which shall appear to be the basis for a claim of lien, City may withhold from any payment due, without liability for interest because of such withholding, an amount sufficient to cover such claim. The failure of City to exercise such right to deduct or to withhold shall not, however, affect the obligations of Consultant to insure, indemnify, and protect City as elsewhere provided herein.

7.6 Waiver. Waiver by any Party to this Agreement of any term, condition, or covenant of this Agreement shall not constitute a waiver of any other term, condition, or covenant. Waiver by any Party of any breach of the provisions of this Agreement shall not constitute a waiver of any other provision or a waiver of any subsequent breach or violation of any provision of this Agreement. Acceptance by City of any work or services by Consultant shall not constitute a waiver of any of the provisions of this Agreement. No delay or omission in the exercise of any right or remedy by a non-defaulting Party on any default shall impair such right or remedy or be construed as a waiver. Any waiver by either Party of any default must be in writing and shall not be a waiver

12 of any other default concerning the same or any other provision of this Agreement. Consultant acknowledges and agrees that any actual or alleged failure on the part of City to inform Consultant of non-compliance with any requirement of this Agreement imposes no additional obligations on City nor does it waive any rights hereunder. Payment to Consultant for work performed pursuant to this Agreement shall not be deemed to waive any defects in work performed by Consultant.

7.7 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this 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.

7.8 Legal Action. In addition to any other rights or remedies, either Party may take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement.

Notwithstanding any contrary provision herein, Consultant shall file a statutory claim pursuant to Government Code sections 905 et seq. and 910 et seq., in order to pursue a legal action under this Agreement.

7.9 Attorneys’ Fees. If either Party to this Agreement is required to initiate or defend or made a party to any action or proceeding in any way connected with this Agreement, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorneys’ fees. Attorneys’ fees shall include attorneys’ fees on any appeal, and a Party entitled to attorneys’ fees shall be entitled to all other reasonable costs for investigating such action, consultants’ fees, taking depositions and discovery and all other necessary costs the court allows which are incurred in such litigation. Such fees and costs shall be enforceable whether or not such action is prosecuted to judgment.

ARTICLE 8. INDIVIDUAL LIABILITY, CONFLICTS AND NON-DISCRIMINATION

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

8.2 Conflict of Interest. Consultant covenants that neither it, nor any officer or principal of its firm, has or shall acquire any interest, directly or indirectly, which would conflict in any manner with the interests of City or which would in any way hinder Consultant’s performance of services under this Agreement. Consultant further covenants that in the performance of this Agreement, no person having any such interest shall be employed by it as an officer, employee, agent or subcontractor without the express written consent of City. Consultant agrees to at all times avoid conflicts of interest or the appearance of any conflicts of interest with the interests of City in the performance of this Agreement. City, in its sole discretion, shall determine the existence of a conflict of interest and may terminate this Agreement in the event such a conflict of interest exists upon sending Consultant written notice describing the conflict.

No officer or employee of City shall have any financial interest, direct or indirect, in this

13 Agreement nor shall any such officer or employee participate in any decision relating to this Agreement which affects their financial interest or the financial interest of any corporation, partnership or association in which they are, directly or indirectly, interested, in violation of any State statute or regulation. Consultant warrants that it has not paid or given and will not pay or give any third party any money or other consideration for obtaining this Agreement.

8.3 Covenant Against Discrimination. Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, gender, sexual orientation, marital status, national origin, ancestry or other protected class in the performance of this Agreement. Consultant shall take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, gender, sexual orientation, marital status, national origin, ancestry or other protected class.

ARTICLE 9. MISCELLANEOUS PROVISIONS

9.1 Notices. Any notice or other communication either Party desires or is required to give to the other Party or any other person in regards to this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable document delivery service, such as but not limited to, Federal Express, which provides a receipt showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, in the case of City addressed to City Clerk at City of Morro Bay, 595 Harbor Street, Morro Bay, CA 93442, and in the case of Consultant, to the person(s) at the address designated on the execution page of this Agreement. Either Party may change its address by notifying the other Party of the change of address in writing. Notice shall be deemed communicated at the time personally delivered or in seventy-two (72) hours from the time of mailing if mailed as provided in this Section.

9.2 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either Party by reason of the authorship of this Agreement, headings used, or any other rule of construction which might otherwise apply.

9.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and such counterparts shall constitute one and the same instrument.

9.4 Integration; Amendment. This Agreement including the attachments hereto is the entire, complete and exclusive expression of the understanding of the Parties as to the Agreement.

It is understood that there are no oral agreements between the Parties hereto affecting this Agreement, and this Agreement supersedes and cancels any and all prior and contemporaneous negotiations, arrangements, agreements and understandings, if any, between the Parties, concerning this Agreement, and none shall be used to interpret this Agreement. No amendment to or modification of this Agreement shall be valid unless made in writing and approved by Consultant and (consistent with, as amended, Chapter 3.08 of the MBMC) by City.

14 9.5 Severability. Should a portion of this Agreement be declared invalid or unenforceable by a judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining portions of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the Parties unless the invalid provision is so material that its invalidity deprives either Party of the basic benefit of their bargain or renders this Agreement meaningless.

9.6 No Undue Influence. Consultant declares and warrants that no undue influence or pressure was used against or in concert with any officer or employee of City in connection with the award, terms or implementation of this Agreement, including any method of coercion, confidential financial arrangement, or financial inducement. No officer or employee of City has or will receive compensation, directly or indirectly, from Consultant, or from any officer, employee or agent of Consultant, in connection with the award of this Agreement or any work to be conducted as a result of this Agreement. Violation of this Section shall be a material breach of this Agreement entitling City to remedies in Section 7.4 and any and all remedies at law or equity.

9.7 Corporate Authority. The persons executing this Agreement on behalf of the Parties hereto warrant that (i) such Party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said Party, (iii) by so executing this Agreement, such Party is formally bound to the provisions of this Agreement, and (iv) entering into this Agreement does not violate any provision of any other agreement to which said Party is bound. This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the Parties.
[SIGNATURES ON FOLLOWING PAGE]

15 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date and year first-above written.

CITY:

CITY OF MORRO BAY, a California municipal
corporation
John Craig
City Manager
ATTEST:

Dana Swanson, City Clerk
APPROVED AS TO FORM:

Brian J. Stack, City Attorney
CONSULTANT:

Cannon Corporation, a California Corporation
By:

Michael Francis Cannon
President, Chief Executive Officer
By:

Lawrence P. Kraemer
Vice President and Secretary
1050 Southwood Dr.

San Luis Obispo, CA 93401
Two corporate officer signatures required when Consultant is a corporation, with one signature required from each of the following groups: 1) Chairperson of the Board, President or any Vice President; and 2) Secretary, any Assistant Secretary, Chief Financial Officer or any Assistant Treasurer. (Cal. Corp. Code § 313.)

APPROPRIATE ATTESTATIONS SHALL BE INCLUDED AS MAY BE REQUIRED BY THE BYLAWS,

ARTICLES OF INCORPORATION, OR OTHER RULES OR REGULATIONS APPLICABLE TO CONSULTANT’S BUSINESS ENTITY.

01181.0001/813182.1 A-1

EXHIBIT A

SCOPE OF SERVICES
I. Consultant will perform services described in Consultant’s Proposal attached hereto.

II. All work product is subject to review and acceptance by City, and must be revised by Consultant without additional charge to City until found satisfactory and accepted by City.

Elena-Blanca Pressure Zone Consolidation Design and Engineering Services Cannon 33 Scope of Work F
Scope of Services
The following scope of work is based on our understanding of the City’s Phase 1 Northern Pressure Zone Conversion Project, as documented in the 2025 consolidation analysis and supporting hydraulic evaluations. This understanding reflects the identified deficiencies within the Elena, Blanca, and Nutmeg Zones; the use of approximately 1.03 MG
of surplus storage in the Kings Tanks to meet emergency and fire flow demands; the determination that full
consolidation of the Elena and Blanca Zones is not feasible due to water quality considerations; the planned increase of the Elena Zone HGL to approximately 220 feet; required PRV modifications; booster station upgrades; targeted
pipeline improvements; and removal of the deteriorated
Elena Tanks from service.

Our approach is informed by direct involvement in the
preliminary investigations and hydraulic modeling that
established the foundation for this strategy, including evaluation of storage deficits, fire flow limitations, booster station constraints, and the feasibility of relying on surplus Kings Tank storage in lieu of constructing the previously proposed upsized Nutmeg. The professional services
described below are sequenced to establish the hydraulic and operational framework necessary to implement Phase
1 improvements while maintaining system stability and fire flow reliability.

TASK 1: PROJECT MANAGEMENT
Task 1.1 Kickoff Meeting
We will prepare for and participate in a Project Kickoff Meeting with City staff and supporting consultants. This meeting will establish communication protocols, confirm goals, and align the project approach and technical tasks with the City’s expectations for Phase 1 implementation.

Task 1.2 Project Team Meetings
Throughout the project, we will participate in up to twelve Project Team meetings to maintain alignment with the
City. These meetings will include schedule coordination, preparation of agendas and materials, facilitation of
discussions, and documentation of action items and
follow-up needs
Task 1.3 External Agency/Stakeholder Meetings
We will also support up to five external meetings
with agencies, utilities, or other stakeholders as
needed. These meetings will focus on securing design
coordination information, confirming permitting or review requirements, and addressing constraints that affect Phase 1 improvements.

Task 1.4 Project Schedule
A comprehensive project schedule will be developed
to reflect all Phase 1 components, including major
deliverables, review periods, permitting timelines, and critical path tasks. The schedule will be maintained and updated throughout the design process.

Task 1.5 Quality Assurance
A quality assurance plan—or documentation of our
internal QA/QC policies—will be submitted with the
proposal. Throughout the project, all deliverables will undergo thorough internal review by key senior staff to confirm they are accurate, complete, and consistent with City standards before submittal.

Task 1.6 Project Management
Project management for Phase 1 will include coordinating all project activities, maintaining the overall schedule, and serving as the primary point of contact for the
City throughout the duration of the work. We will lead
regular project team meetings as necessary, manage
communication among all project disciplines and
subconsultants, and confirm that critical decisions,
sequencing needs, and design milestones remain aligned
with the City’s objectives. The project schedule will be actively maintained and updated as needed to reflect
design progress, permitting requirements, and review
periods. All deliverables will be subject to internal QA/ QC review to confirm technical accuracy, consistency, and constructability. Throughout the project, we will provide proactive guidance to keep the work on track, resolve
issues quickly, and confirm smooth coordination from
kickoff through final bid-ready documents.

TASK 2: DATA COLLECTION AND

BASIS OF DESIGN
Task 2.1 Data Collection
We will compile available design records, as-built drawings, previous reports, easements, and mapping information
relevant to Phase 1 facilities. Field reviews will be
conducted to observe existing conditions, confirm utility locations, identify surface features, and evaluate potential constructability challenges. Physical, access, alignment, or infrastructure constraints will be documented and
incorporated into the design.

Elena-Blanca Pressure Zone Consolidation Design and Engineering Services Cannon 34 Task 2.2 Tank Dive Inspection
During the preliminary design, our team will commission an updated condition assessment of the Nutmeg Tank
by retaining MCS Inspection to perform an in service
dive inspection. Because the most recent available
inspection report is from 2020, the purpose of this
work is to document current interior and exterior tank
conditions and identify any coating deterioration,
corrosion, structural concerns, or safety issues that may have developed since the previous assessment. MCS
Inspection will complete a full dive inspection and provide supporting documentation, including photographs, video, and field notes describing all observed conditions. The information gathered during this inspection will then be used to prepare a summary outlining the recommended
rehabilitation actions, recoating needs, and any priority repairs required to maintain the tank’s long term
serviceability.

Task 2.3 Basis of Design
All applicable plans, reports, industry standards, and
regulatory requirements will be reviewed and summarized in a Basis of Design Memorandum. This document will
define key design criteria, hydraulic requirements,
operational needs, equipment sizing assumptions, PRV
settings, and construction constraints. It will serve as the foundational reference for all subsequent design tasks.

TASK 3: SURVEYING AND BASE

MAPPING
Task 3.1 Topographic and Boundary Survey
A detailed topographic survey will be completed
sufficiently to support 100% design for Phase 1 projects.

Survey work will establish control points and benchmarks for use throughout design and construction. Existing
easements will be confirmed and incorporated into the
base mapping, and all relevant above- and below-ground
utilities, crossings, structures, and encroachments will be identified and mapped. Survey data will be provided
in AutoCAD and PDF formats for use in design. Our team
will utilize the previously completed aerial and ground topography survey for areas where data has been
collected and gather field data to fill in the remaining areas needed.

TASK 4: ENVIRONMENTAL AND

GEOTECHNICAL REVIEW
Task 4.1 Environmental Review
We will prepare the environmental technical
documentation needed to support the City’s CEQA
determination, including literature review, biological
survey and assessments, cultural resource evaluations,
and an environmental commitments matrix summarizing
mitigation measures and regulatory requirements. We will coordinate closely with City staff and any environmental consultants to confirm that required environmental
findings are completed and that all mitigation measures, permit conditions, and environmental constraints are
incorporated into the final plans and specifications.

SWCA is prepared to support City staff and other
environmental consultants to complete the required CEQA determination which is expected to be an Initial Study/ Mitigated Negative Declaration (IS/MND), as needed to
inform decision makers and facilitate the public review process. An IS/MND was drafted in 2022 based on the
previous version of the project focused on the proposed “OneWater” Morro Bay Phase 1 Implementation – Water
Distribution System: Nutmeg Pressure Projects. The
draft version of the IS/MND will be revised and updated to address the additional project components in the
Project Description and throughout the impact analysis
sections. In addition to the updated IS/MND, this scope of work includes preparation of responses to comments
received for the IS/MND and assumes up to five substantial comments or comment topics would be received. SWCA
will incorporate any necessary clarifications and edits and prepare a final IS/MND, Mitigation Monitoring and
Reporting Program (MMRP), and Notice of Determination
(NOD) on behalf of the City.

Task 4.2 Geotechnical Review
Our team will review all available geotechnical
data, including previously completed borings, soils
investigations, grading records, and foundation reports relevant to the Phase 1 project locations. Using this
information, we will prepare an updated geotechnical
summary memo that identifies applicable soil
characteristics, excavation considerations, foundation
parameters, and construction recommendations. If
additional borings or laboratory testing are determined to be necessary after evaluating the available information, these can be added at a later date as additional scope of work items.

Elena-Blanca Pressure Zone Consolidation Design and Engineering Services Cannon 35 TASK 5: DESIGN PHASE: PHASE 1

IMPROVEMENTS
Task 5.1 Project Constraints and Design
Requirements
We will identify key design constraints and requirements based on the findings of Tasks 1–4 and review them
with the City and Project Team. These constraints will
include site access and layout limitations, easements,
phasing requirements, environmental and archaeological
considerations, permitting needs, utility conflicts,
continuity of service requirements, and logistical
considerations needed to keep the existing Elena Booster Station operational until the new station is online.

Task 5.2 30% Plans, Specifications, and
Estimate
We will prepare the 30% PS&E package, including
preliminary civil, mechanical, electrical, instrumentation, and control drawings. Specifications at this stage will focus on construction sequencing concepts, installation criteria, testing requirements, and a preliminary breakdown of
bid items. An initial opinion of probable construction cost will be prepared consistent with a Class 4 AACE estimate.

A 30% design review meeting will be held with City
engineering and utility staff to discuss the documents and gather direction for the next design phase.

Task 5.3 60% Plans, Specifications, and
Estimate
The 60% design package will refine all drawings and
specifications, including profiles, sections, details, and construction requirements. At this stage, mitigation
measures and regulatory agency requirements will be
incorporated into the plans. Specifications will include technical content and front end documents. An updated
Class 2 cost estimate will be provided, and a review
meeting will be conducted with City staff to confirm design direction.

Task 5.4 90% Plans, Specifications, and
Estimate
The 90% package will represent a substantially complete bid package with fully developed plans, technical
specifications, front end documents, construction
requirements, mitigation measures, and coordination
details. A Class 1 cost estimate will be prepared at this stage. A formal 90% review meeting will be held to capture final comments prior to preparing bid-ready documents.

Task 5.5 100% PS&E Bid Documents
We will prepare the final construction bid documents
incorporating all City comments from the 90% review
and all required QA/QC revisions. A final cross-check of drawings, specifications, and cost items will be performed to confirm the package is coordinated, complete, and
compliant with all permitting and funding requirements.

The completed bid documents will be ready for
advertisement.

TASK 6: PERMITTING AND

APPROVALS
Task 6.1 Permitting Support
We will assist the City with identifying all permits and approvals required for construction, including those
from Caltrans, SLO County, RWQCB, Division of Drinking
Water, biological and environmental agencies, and
other regulatory entities as needed. Support will include preparation of application materials, technical exhibits, attendance at meetings, and responses to agency
questions throughout the permitting process.

TASK 7: BID AND AWARD PHASE
Task 7.1 Pre-Bid Conference
We will facilitate the pre-bid conference, present the
project overview to potential bidders, and assist the
City in answering questions regarding project scope and requirements.

Task 7.2 Addenda and Questions
During the bidding period, we will prepare technical
responses to bidder questions and assist in drafting
addenda, including revisions to plans or specifications when needed to confirm clarity and fairness in bidding.

Task 7.3 Bid Review
We will assist the City with evaluating submitted bids for accuracy, responsiveness, and qualification. A bid summary sheet and recommendation for award will be prepared for City consideration.

TASK 8: CONSTRUCTION PHASE
Task 8.1 Engineering Services During
Construction (ESDC)
During construction, we will provide engineering support that includes attending the pre-construction job walk,
reviewing contractor submittals, responding to RFIs,
participating in up to ten construction progress meetings and site visits, and preparing record drawings in PDF and DWG formats at project completion. These services will
help ensure that the contractor’s work aligns with the
approved plans and specifications and that field issues are addressed promptly and effectively.

01181.0001/813182.1 B-1

EXHIBIT B

SPECIAL REQUIREMENTS
(Superseding Agreement Boilerplate)

NOT APPLICABLE

01181.0001/813182.1 C-1

EXHIBIT C

SCHEDULE OF COMPENSATION
I. Consultant will be compensated for Services provided under this Agreement in accordance with description in Consultant’s Proposal attached hereto.

II. City will compensate Consultant for the Services performed upon submission of a valid invoice, as described in Section 2.2.

III. The total compensation for the Services shall not exceed the Contract Sum, as provided in Section 2.1 of this Agreement.

FEE SCHEDULE FOR

ENGINEERING CONSULTING SERVICES

CITY OF MORRO BAY

NORTH MORRO BAY WATER SYSTEM IMPROVEMENTS PROJECT
Environmental
SWCA
Geotech,
Inspection, Aerial
Hrly
Rate: $288 Hrly Rate: $307 Hrly Rate: $276 Hrly Rate: $260 Hrly Rate: $244 Hrly Rate: $220 Hrly Rate: $163 Hrly Rate: $185 Hrly Rate: $162 Hrly Rate: $170 Hrly Rate: $247 Hrly Rate: $138 Hrly Rate: $247 Hrly Rate: $415 LS LS Hrs Amount Hrs Amount Hrs Amount Hrs Amount Hrs Amount Hrs Amount Hrs Amount Hrs Amount Hrs Amount Hrs Amount Hrs Amount Hrs Amount Hrs Amount Hrs Amount Amount Amount Amount Hrs Amount

1.1 Project Kick-off Meeting 4 $1,152 4 $1,228 4 $1,104 4 $880 $250 16 $4,614

1.2 Project Team Meetings 24 $6,912 24 $7,368 24 $5,280 $1,000 72 $20,560

1.3 External Agency/Stakeholder Meetings 10 $2,880 10 $3,070 10 $2,200 $750 30 $8,900

1.4 Project Schedule 2 $576 8 $1,760 10 $2,336

1.5 Quality Assurance 8 $2,304 20 $6,140 8 $2,208 8 $2,080 8 $1,952 8 $1,976 60 $16,660

1.6 24 $6,912 8 $2,208 8 $2,080 8 $1,952 8 $1,104 56 $14,256 72 $20,736 58 $17,806 20 $5,520 16 $4,160 16 $3,904 46 $10,120 8 $1,976 8 $1,104 $2,000 244 $67,326

2.1 4 $1,152 4 $880 4 $652 4 $740 4 $648 4 $680 4 $552 28 $5,304

2.2 $7,150 $7,150

2.3 4 $1,152 8 $1,760 8 $1,304 8 $1,480 8 $1,296 8 $1,360 8 $1,104 52 $9,456 8 $2,304 12 $2,640 12 $1,956 12 $2,220 12 $1,944 12 $2,040 12 $1,656 $7,150 80 $21,910

3.1 36 $8,892 40 $16,600 $4,500 $500 76 $30,492
36 $8,892 40 $16,600 $4,500 $500 76 $30,492

4.1 $42,900 $42,900.00

4.2 $21,494 $21,494
$42,900 $21,494 $64,394.00

5.1 8 $2,304 4 $1,228 4 $1,104 4 $1,040 4 $976 20 $4,400 16 $2,608 8 $1,480 16 $2,592 8 $1,360 16 $2,208 108 $21,3005.2 8 $2,304 8 $2,456 24 $6,624 12 $3,120 12 $2,928 75 $16,500 30 $4,890 24 $4,440 30 $4,860 100 $17,000 20 $2,760 343 $67,8825.3 8 $2,304 8 $2,456 12 $3,312 12 $3,120 18 $4,392 55 $12,100 60 $9,780 24 $4,440 60 $9,720 120 $20,400 20 $2,760 397 $74,7845.4 8 $2,304 8 $2,456 8 $2,208 8 $2,080 8 $1,952 40 $8,800 24 $3,912 16 $2,960 24 $3,888 80 $13,600 20 $2,760 244 $46,9205.5 4 $1,152 8 $2,456 6 $1,656 6 $1,560 6 $1,464 20 $4,400 20 $3,260 8 $1,480 20 $3,240 40 $6,800 20 $2,760 158 $30,228 36 $10,368 36 $11,052 54 $14,904 42 $10,920 48 $11,712 210 $46,200 150 $24,450 80 $14,800 150 $24,300 348 $59,160 96 $13,248 1250 $241,114

6.1 2 $576 24 $5,280 24 $4,080 16 $2,208 66 $12,144
2 $576 24 $5,280 24 $4,080 16 $2,208 66 $12,144

7.1 8 $2,304 8 $2,456 8 $1,760 8 $1,976 32 $8,496

7.2 2 $576 2 $552 2 $520 2 $488 8 $1,760 2 $326 2 $370 2 $324 4 $680 26 $5,596

7.3 4 $1,152 2 $614 2 $552 2 $520 2 $488 2 $440 2 $494 16 $4,260 14 $4,032 10 $3,070 4 $1,104 4 $1,040 4 $976 18 $3,960 2 $326 2 $370 2 $324 4 $680 10 $2,470 74 $18,352

8.1 40 $11,520 10 $3,070 8 $2,208 8 $2,080 8 $1,952 40 $8,800 20 $3,260 20 $3,700 20 $3,240 20 $3,400 80 $19,760 40 $5,520 $1,250 314 $69,760 40 $11,520 10 $3,070 8 $2,208 8 $2,080 8 $1,952 40 $8,800 20 $3,260 20 $3,700 20 $3,240 20 $3,400 80 $19,760 40 $5,520 $1,250 314 $69,760 172 $49,536 114 $34,998 86 $23,736 70 $18,200 76 $18,544 350 $77,000 184 $29,992 114 $21,090 184 $29,808 408 $69,360 98 $24,206 172 $23,736 36 $8,892 40 $16,600 $42,900 $33,144 $3,750 2104 $525,492

1. PRELIMINARY ENGINEERING AND PROJECT COORDINATION
Electrical
Associate
Structural
Associate
Controls
Associate Project Engineer Construction Manager
Description
Project Manager Quality Control Sr. Electrical Engineer Sr. Structural Engineer Sr. Controls Engineer Civil Associate Engineer Reimbursables Engineering Assistant IV Sr Land Surveyor 2-Man Survey Field Crew Cannon Subconsultants
Total

3. Surveying and Base Mapping
Project Management
TASK 2 SUBOTALTASK 1 SUBOTAL
Data CollectionBasis of Design

2. DATA COLLECTION AND BASIS OF DESIGN
Tank Dive InspectionEnvironmental SupportGeotechnical SupportTopographic and Boundary Survey TASK 3 SUBOTAL
60% PS&E

4. ENVIRONMENTAL AND GEOTECHNICAL REVIEW
TASK 4 SUBOTAL
Project Constraints/ Design Requirements90% PS&E100% PS&E Bid Documents

5. DESIGN PHASE- PHASE 1 IMPROVEMENTS
30% Plans, Specifications & EstimateBid Review

8. Construction Phase
TASK 5 SUBOTAL
Engineering Services during Construction (ESDC)

6. Permitting and Approvals
TASK 6 SUBTOTAL

7. Bid and Award Phase
Pre-Bid ConferenceAddenda and Questions
TASK 7 SUBTOTAL
Permitting Support
TASK 8 SUBTOTAL
GRAND TOTAL (ALL Tasks)
4/22/2026

01181.0001/813182.1 D-1

EXHIBIT D

SCHEDULE OF PERFORMANCE
I. Consultant shall perform all services and deliver all work products timely in accordance with the schedule described in Consultant’s Proposal attached hereto.

Elena-Blanca Pressure Zone Consolidation Design and Engineering Services Cannon 36 Project Schedule / Work Plan G ID Task Name Duration Start Finish 1 Elena Blanca Pressure Zone Consolidation Project 381 days Mon 3/16/26 Mon 8/30/27 2 Task 1. Project Management 248 days Mon 3/16/26 Wed 2/24/27 3 Notice To Proceed and Contracting 2 wks Tue 3/17/26 Mon 3/30/26 4 Project Kick-off Meeting 1 day Tue 3/31/26 Tue 3/31/26 5 Site Visit 1 day Tue 3/31/26 Tue 3/31/26
6 Task 2. Data Collection and Basis of Design 15 days Wed 4/1/26 Tue 4/21/26 7 Data Collection 2 wks Wed 4/1/26 Tue 4/14/26
8 Tank Dive Inspection 2 wks Wed 4/1/26 Tue 4/14/26
9 Basis of Design 3 wks Wed 4/1/26 Tue 4/21/26
10 Task 3. Surveying 3 wks Wed 4/1/26 Tue 4/21/26
11 Task 4. Environmental and Geotechnical Review 130 days Wed 4/1/26 Tue 9/29/26 12 Biological Rsources Assessment 6 wks Wed 4/1/26 Tue 5/12/26 13 Cultrual Resources Study 4 wks Wed 4/1/26 Tue 4/28/26 14 CEQA Determination 5 mons Wed 5/13/26 Tue 9/29/26
15 Geotechnical Investigation 6 wks Wed 4/15/26 Tue 5/26/26 16 Task 5. Design Phase 120 days Wed 4/22/26 Tue 10/6/26 17 Design Requirements (Preliminary Design Report) 3 wks Wed 4/22/26 Tue 5/12/26 18 30% Plans and Specifications Preparation 4 wks Wed 5/13/26 Tue 6/9/26 19 City Review of 30% Submittal Documents 2 wks Wed 6/10/26 Tue 6/23/26 20 60% Plans and Specifications Preparation 4 wks Wed 6/24/26 Tue 7/21/26 21 City Review of 60% Submittal Documents 2 wks Wed 7/22/26 Tue 8/4/26 22 90% Plans and Specifications Preparation 3 wks Wed 8/5/26 Tue 8/25/26 23 City Review of 90% Submittal Documents 2 wks Wed 8/26/26 Tue 9/8/26 24 100% Plans and Specifications Preparation 2 wks Wed 9/9/26 Tue 9/22/26 25 City Review of 100% Submittal Documents 2 wks Wed 9/23/26 Tue 10/6/26 26 City Approval of Bid Documents 1 wk Wed 9/23/26 Tue 9/29/26 27 Task 6. Permitting and Approvals 80 days Wed 6/10/26 Tue 9/29/26 28 Task 7. Bid and Award Phase 43 days Wed 9/30/26 Fri 11/27/26 29 City Advertise for Bidding 4 wks Wed 9/30/26 Tue 10/27/26 30 Pre-Bid Meeting 1 day Wed 10/14/26 Wed 10/14/26
31 Bidding Support Services (RFIs, Addenda, etc.) 4 wks Wed 9/30/26 Tue 10/27/26 32 Bids Due 1 day Wed 10/28/26 Wed 10/28/26
33 Bid Review 2 days Thu 10/29/26 Fri 10/30/26
34 City Selection of Contractor and Contract Approval 20 days Mon 11/2/26 Fri 11/27/26 35 Task 8. Engineering Support During Construction 196 days Mon 11/30/26 Mon 8/30/27 36 Preconstruction Meeting 1 day Mon 11/30/26 Mon 11/30/26 37 Submittal and RFI Reviews 3 mons Tue 12/1/26 Mon 2/22/27 38 Construction Progress Meetings and Site Visits 9 mons Tue 12/1/26 Mon 8/9/27 39 Record Drawings 3 wks Tue 8/10/27 Mon 8/30/27

B M E B M E B M E B M E B M E B M E B M E B M E B M E B M E B M E B M E B M E B M E B M E B M E B M E B M E B M March April May June July AugustSeptemberOctoberNovemberDecemberJanuaryFebruary March April May June July AugustSeptember Qtr 2, 2026 Qtr 3, 2026 Qtr 4, 2026 Qtr 1, 2027 Qtr 2, 2027 Qtr 3, 2027 Task
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PROJECT SCHEDULE

CITY OF MORRO BAY

ELENA BLANCA PRESSURE ZONE CONSOLIDATION PROJECT
CANNON
1050 SOUTHWOOD DRIVE
SLO, CA 93401
805.544.7407
Elena Blanca Design Schedule.mpp