Agenda — Pacifica City Council, November 27, 2023

CITY OF PACIFICA

CITY COUNCIL AGENDA
Council Chambers
2212 Beach Blvd
Pacifica, CA 94044
Mayor Tygarjas Bigstyck
Mayor pro Tem Sue Vaterlaus
Councilmember Sue Beckmeyer
Councilmember Mary Bier
Councilmember Christine Boles
City Council Regular Meeting 1 November 27, 2023
November 27, 2023 (MONDAY)
www.cityofpacifica.org
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City Council Regular Meeting 2 November 27, 2023
7:00 PM OPEN SESSION
Call to Order
Roll Call
Reading of Land Acknowledgment
The City of Pacifica acknowledges that we occupy the unceded ancestral homeland of the Ramaytush Ohlone peoples, who are the original inhabitants of the San Francisco Peninsula. We honor the Ramaytush Ohlone peoples for their enduring commitment to Mother Earth. As the Indigenous protectors of this land and in accordance with their traditions, the Ramaytush Ohlone have never ceded, lost, nor forgotten their responsibilities as the caretakers of this place, as well as for all peoples who reside in their traditional territory. We affirm their sovereign rights as First Peoples and wish to pay our respects to the ancestors, elders, and relatives of the Ramaytush Ohlone peoples.

Salute to the Flag led by Councilmember Boles

SPECIAL PRESENTATIONS
A. HIP Housing Annual Calendar Presentation
B. San Mateo County Libraries (SMCL) Annual Report Presentation

CONSENT CALENDAR
Persons wishing to address the Council on any Consent Calendar item may do so at this time. Each speaker will be allotted three minutes. Those wishing to address the Council on any item listed on the agenda should submit a speaker card to the City Clerk.

Public meetings are a limited public forum, meaning that there are rules for commenting at these meetings. Comments on consent agenda items must relate to that specific item.

If comments do not relate to a specific agenda item, then City will provide you with an initial warning to stay on topic. If the warning is not followed, the Mayor will direct the City Clerk to cut off the microphone.

Items on the consent calendar will be adopted by one motion unless a Councilmember requests, before the vote on the motion, to have an item discussed. Time limit on comments is three minutes or less.

1. Notice of Completion of the removal of the soil nail wall at 330 Esplanade Avenue PROPOSED ACTION: Move to Adopt the Resolution of the City Council of the City of Pacifica accepting completion and directing the City Manager to file Notice of Completion for the removal of the soil nail wall at 330 Esplanade Avenue; and authorize the City Manager to release the retention funds to the contractor.

2. Approval to Purchase Replacement Portable Two-Way Communication Radios PROPOSED ACTION: Move to adopt a Resolution authorizing the purchase of replacement portable two-way communication radios from Motorola Solutions Inc in the amount of $229,744 as previously approved by Council in the Fiscal Year Budget 2023- 2024.

City Council Regular Meeting 3 November 27, 2023

3. PB&R Childcare Continued Funding Applications for Fiscal Year 2024-25 PROPOSED ACTION: Adopt a Resolution entitled "A Resolution of the City Council of the City of Pacifica Approving Agreement to This Transaction with the California Department of Education and the California Department of Social Services for the Purpose of Providing Childcare and Development Services and to authorize the Designated Personnel to Sign Contract Documents for Fiscal Years 2024-25.”

4. Manor Drive Storm Drain Repair Project
PROPOSED ACTION: Adopt Resolution Approving the Construction Services Agreement between the City of Pacifica and Gray Lake Construction for the Manor Drive Storm Drain Repair Project, in an Amount Not to Exceed $90,000 with a 30% Contingency, for a Total of $117,000.

5. Recology of the Coast’s Application for Rate Increase for 2024 PROPOSED ACTION: Move to adopt a Resolution confirming Recology of the Coast’s application for rate increase of 5.86% is accurate and consistent with the annual rate adjustment procedures specified in the Recology Agreement; and finding the confirmation of the rate increase exempt under the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines 15061(b)(3).

PUBLIC COMMENTS ON ITEMS NOT ON THE POSTED AGENDA
This portion of the Agenda is available for the public to address the City Council on any issue that is not on the Agenda. Any person wishing to address the Council shall be recognized by the Mayor during this time, provided, however, that only items not on the Agenda for that meeting may be addressed. Comments on non-agendized items must address matters within the subject matter jurisdiction of the City. If comments do not address matters within the subject matter jurisdiction of the City, the City will provide you with an initial warning to stay within the subject matter jurisdiction of the City. If the warning is not followed, the Mayor will direct the City Clerk to cut off the microphone.

Councilmembers shall not enter into debate with speakers under Public Comments on Items Not on the Posted Agenda. A maximum of three minutes will be allowed for any speaker.

COUNCIL COMMUNICATIONS
The purpose of Council Communications is for Councilmembers to inform each other of items of potential interest to other Councilmembers, such as interagency meetings.

STAFF COMMUNICATIONS
The purpose of Staff Communications is for the City Manager to offer announcements as appropriate.

PUBLIC HEARINGS

6. Introduction of an Ordinance initiated by the City of Pacifica, to (a) add a new Article 53, “Emergency Shelters” to the City of Pacifica Zoning Regulations (Chapter 4 of Title 9 of City Council Regular Meeting 4 November 27, 2023
the Pacifica Municipal Code [“PMC”]) to create zoning provisions for approval, construction, and operation of an emergency shelter consistent with the requirements of Senate Bill 2 (SB 2); (b) amend Article 11 “C-2 Community Commercial District” to make an emergency shelter with 20 or fewer occupants a permitted use and an emergency shelter with 21-30 occupants a conditional use; (c) amend Article 14, “O Professional Office District” and Article 15, “C-R Commercial Recreation District” to exclude emergency shelters; (d) update sections of the City of Pacifica’s Zoning Regulations to include updated definitions and terms for “Community Care Facility” and “Family Daycare Home” to be consistent with the requirements and definitions of State law; and (e) make other minor conforming revisions (File No. 2023-013, Text Amendment TA124-23). Recommended CEQA status: Exempt from CEQA pursuant to Section 15269 (Emergency Projects) and Section 15061(b)(3) (General Rule Exemption). The Planning Commission recommended approval of the Text Amendment by a Vote of 5-0 (with two absences) on November 6, 2023.

PROPOSED ACTION: Move to waive the first reading and introduce by title only “An Ordinance of the City Council of the City of Pacifica to enact a new Article 53 “Emergency Shelters,” to amend Article 11 “C-2 Community Commercial District,” to amend Article 14 “O Professional Office District”, to amend Article 15 “C-R Commercial Recreation District”, and to make various other minor conforming amendments of Chapter 4 Zoning, of Title 9 of the Pacifica Municipal Code (PMC), and finding the Ordinance exempt from the California Environmental Quality Act (CEQA) (File No. 2023- 013; Text Amendment TA-124-23).”

CONSIDERATION

7. Consideration and Adoption of Resolution Approving Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse as City Manager
PROPOSED ACTION: Move to adopt resolution approving the Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse.

ADJOURN
NOTICE: If you challenge a city's zoning, planning or other decision in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to, the public hearing. Judicial review of any city administrative decision may be had only if a petition is filed with the court not later than the 90th day following the date upon which the decision becomes final. Judicial review of environmental determinations may be subject to a shorter time period for litigation, in certain cases 30 days following the date of the final decision The City of Pacifica will provide assistance for disabled citizens upon at least 24 hours advance notice to the City Manager’s Office (650) 738-7301, or send request via email to:
[email protected] if you need sign language assistance or written material printed in a larger font or taped, advance notice is necessary. All meeting rooms are accessible to the disabled.

The Pacifica Municipal Code is available online at the City’s website (www.cityofpacifica.org/municode); City Council Regular Meeting 5 November 27, 2023

HOW TO OBTAIN CITY COUNCIL AGENDAS
Posted agendas:

Agendas are posted no later than Friday prior to the City Council meeting date, at the entrance to the City Hall location at the Pacifica Community Center, 540 Crespi Drive.

View on the Internet:

Follow the link to Council agenda, at www.cityofpacifica.org E-mail subscription:

Send a request to Sarah Coffey, at [email protected] City Clerk’s Office/City Manager’s Office
City Hall, 540 Crespi Drive
Council meetings:

Agendas are available at the City Council meeting

HOW TO REACH YOUR GOVERNMENT OFFICIALS
• Governor Gavin Newsom, State Capitol Building, Sacramento CA 95814 (916) 445-2841 • State Senator Josh Becker, 1528 So. El Camino Real, Suite 303, San Mateo CA 94402 (650) 212-3313 • Assembly Member Marc Berman, 721 Colorado Ave, Suite 101, Palo Alto CA 94303 (650) 324-0224 • Congresswoman Anna Eshoo, 698 Emerson Street, Palo Alto CA 94301 (650) 323-2984 • Senator Alex Padilla, B03 Russell Senate Office Building, Washington DC 20510 (202) 224-3553 • Senator Laphonza Butler, SD-G10 Dirksen Senate Office Building, Washington DC 20510 (202) 224-3841 • President Joseph R. Biden, 1600 Pennsylvania Ave. NW, Washington DC 20500

CITY COUNCIL
• Mayor Tygarjas Bigstyck, tbigstyck@ pacifica.gov
• Mayor pro Tem Sue Vaterlaus, [email protected]
• Councilmember Sue Beckmeyer, [email protected]
• Councilmember Mary Bier, [email protected]
• Councilmember Christine Boles, [email protected]

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
11/27/2023
1 SUBJECT:

Notice of Completion of the removal of the soil nail wall at 330 Esplanade Avenue RECOMMENDED ACTION:

Move to Adopt the Resolution of the City Council of the City of Pacifica accepting completion and directing the City Manager to file Notice of Completion for the removal of the soil nail wall at 330 Esplanade Avenue; and authorize the City Manager to release the retention funds to the contractor.

STAFF CONTACT:

Roland Yip, P.E., DPW Deputy Director
(650) 738-3771
[email protected]
Lisa Petersen, P.E., DPW Director
(650) 738-3770
[email protected]
BACKGROUND/DISCUSSION:

On August 28, 2023, City Council authorized the City Manager to Award and Execute a Construction Contract for removal of the soil nail wall at 330 Esplanade Avenue. The contractor’s scope of work included a base bid to cut off the tiebacks and demolish and remove 30’ of the soil nail wall that was broken and about to fall, and an alternate to remove another 80’ of soil nail wall. City staff was to evaluate the extent of the soil nail wall removal after the removal of the first 30’ of the soil nail wall and whether there were impacts to the neighboring property. The project was funded by Disaster Accounting Fund 38.

The property owner of the neighboring property of 340 Esplanade Avenue provided an opinion letter from RJR Engineering & Consulting, Inc. (RJR) stating the portion of the soil nail wall that is not broken is still providing erosion control protection from rain and wind to the existing bluff top. The letter was reviewed by the City’s geotechnical consultant, Cotton, Shires and Associates (CSA), who agreed with RJR’s opinion letter. Based on RJR’s letter and CSA’s recommendations, the contractor removed another 25’ of the soil nail wall that was determined to be damaged after the removal of first 30’ of soil nail that was broken and about to fall.

As the project is now complete and staff is satisfied with the contractor’s work on the project, it is appropriate to record the formal Notice of Completion with the San Mateo County Recorder's Office. This recorded document is the legal notice that the City considers the project complete and that we intend to pay the contractor for the full and complete contract price. This also puts all subcontractors and suppliers on notice that if they have any claims for payment from the contractor, they have 30 days to file claims for payment against the City. This provision of contract law protects subcontractors from contractors who may not pay them properly. It also protects the City from claims against us for any nonpayment on the part of the contractor. The City withheld 5% of the contract amount, $4,750.00, as retention to make sure that all subcontractors and suppliers have been paid. The City will release the retention if no claims are received.
1 Packet Pg. 6
Pacifica City Council 2
November 27, 2023
The City Manager is recommending the adoption of the attached resolution accepting completion of the project and the filing of the Notice of Completion (Attachment 1) with the San Mateo County Recorder's Office.

FISCAL IMPACT:

There is no fiscal impact associated with the filing of the Notice of Completion. The total project Source and Use of Funds table is shown below. The project balance will remain in the Disaster Accounting Fund 38 for future related projects.

Total Project Source and Use of Funds
Disaster Accounting Fund 38 $220,000.00
Total Source of Funds $220,000.00
Construction Cost ($95,000.00)
Total Use of Funds ($95,000.00)
Project End Balance $125,000.00
ALTERNATIVE ACTION:

Council may choose not to adopt the resolution accepting completion of the project, but as the work has been satisfactorily completed, the contractor may file a claim against the City for nonpayment of retention, if there are no claims.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:

Approval of the Notice of Completion for the removal of the soil nail wall at 330 Esplanade Avenue is consistent with the following Council adopted Goals:
• Improve and steward City infrastructure, streets and facilities: This project is in response to sea level rise and will eliminate public safety hazard.

ORIGINATED BY:

Public Works
ATTACHMENT LIST:

ATTACHMENT 1: SOIL NAIL WALL NOTICE OF COMPLETION (PDF) 1 Packet Pg. 7
Pacifica City Council 3
November 27, 2023
RESOLUTION NO.___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA

ACCEPTING COMPLETION AND DIRECTING THE CITY MANAGER TO FILE

NOTICE OF COMPLETION FOR THE
REMOVAL OF THE SOIL NAIL WALL AT 330 ESPLANADE AVENUE
RESOLVED by the City Council of the City of Pacifica, California, that WHEREAS, the City Engineer of the said City has filed with the City Clerk of said City, his Certificate as to the completion of all the work provided to be done under and pursuant to the contract between said City and R V Stich Construction Inc., on August 28, 2023, and WHEREAS, it appears to the satisfaction of this Council that said work under said contract has been fully completed as provided in said contract and the plans and specifications therein referred to,
NOW, THEREFORE, it is ordered as follows:

1. That acceptance of completion of said work be, and it is hereby, made and ordered.

2. That the City Manager is directed to file for record with the County Recorder of the County of San Mateo, Notice of Completion thereof, pursuant to Section 3093 of the Civil Code of the State of California. • • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 27th day of November 2023, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:

CITY OF PACIFICA
________________________
Tygarjas Twyrls Bigstyck, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ _________________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney 1 Packet Pg. 8

NOTICE OF COMPLETION

CITY OF PACIFICA
FOR THE REMOVAL OF THE SOIL NAIL WALL AT 330 ESPLANADE AVENUE NOTICE IS HEREBY GIVEN, pursuant to Section 3093 of the Civil Code of the State of California, by Roland Yip, City Engineer of the City of Pacifica, California, that the contract awarded to R V Stich Construction Inc. on August 28, 2023, has been completed in accordance with the plans and specifications for said work filed with the City Clerk, and approved by the City Council of said City.

That said work and improvements were actually completed on the 23rd day of October 2023 and that acceptance of completion of said work was ordered by the City Council of said City, adopted on the 28th day of November 2023, and that the name of the surety on the contractor's bond for labor and materials on said project is Old Republic Surety Company.

That said work consists of the removal of a soil nail wall.

Name and address of Owner: City of Pacifica
540 Crespi Drive
Pacifica, California 94044
Roland Yip, P.E.

City Engineer

VERIFICATION
The undersigned states that he is the City Engineer of the City of Pacifica and that he makes this verification on behalf of said entity; that he has read the foregoing, and knows the contents thereof, and that the facts stated therein are true.

Roland Yip, P.E.

City Engineer
Executed in Pacifica, California, on November 28th, 2023.

1.a
Packet Pg. 9
Attachment: ATTACHMENT 1: SOIL NAIL WALL NOTICE OF COMPLETION (5530 : Notice of Completion of the removal of the soil nail wall)

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
11/27/2023
1 SUBJECT:

Approval to Purchase Replacement Portable Two-Way Communication Radios RECOMMENDED ACTION:

Move to adopt a Resolution authorizing the purchase of replacement portable two-way communication radios from Motorola Solutions Inc in the amount of $229,744 as previously approved by Council in the Fiscal Year Budget 2023-2024.

STAFF CONTACT:

Bill Amable, Deputy Chief, Administrative Services Bureau (650) 991-8138
[email protected]
BACKGROUND/DISCUSSION:

There is a need to replace the portable two-way communication radios required for improved reliability and firefighter safety. Existing radios are more than 10 years old and are not compatible with the new National Fire Protection Association (NFPA) 1802 standard. The new radios will meet the NFPA 1802 Standard.

A total of 18 portable radios and accessories for line personnel and the command staff will be replaced at a total cost of 229,774.

The vendor being utilized to purchase the radios is Motorola Solutions Inc. (c/o Red Cloud Inc.).

They are a government authorized business with HGAC purchasing group, providing the lowest cost available to the fire industry. This is the vendor North County Fire Authority is utilizing to provide portable two-way communication safety equipment ALTERNATIVE ACTION:

None.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:

Supports City Council goal of maintaining safe community.

FISCAL IMPACT
The amount of $229,744 has been appropriated and exists within the fire equipment replacement fund, as well as having been approved in the Fiscal Year 2023-2024 Budget by the City Council.
2 Packet Pg. 10
Pacifica City Council 2
November 27, 2023
ORIGINATED BY:

North County Fire Authority
ATTACHMENT LIST:
2 Packet Pg. 11
Pacifica City Council 3
November 27, 2023
RESOLUTION NO. ______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA AUTHORIZING THE

PURCHASE OF PORTABLE TWO-WAY COMMUNICATION RADIOS FROM MOTOROLA SOLUTIONS INC IN THE AMOUNT OF $229,744
WHEREAS, there is a need to replace the Portable Two-Way Communication Radios required for operational needs and firefighter safety; and WHEREAS, mission-critical operations depend on reliable communications for firefighters to mitigate emergent and non-emergent incidents safely, and efficiently; and WHEREAS, the replacement radios’ design, compatibility and durability will improve North County Fire Authority’s overall operational efficiency and safely of fire personnel; and WHEREAS, the vendor being utilized is a local vendor in our region that is a member of HGAC, a cooperative purchasing program which provides the lowest cost available to North County Fire Authority.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pacifica, California, to authorize the purchase of Portable Two-Way Communication Radios in the amount of $229,744 from Motorola Solutions Inc., the provider used by North County Fire Authority.
• • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 27th day of November 2023, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:
_________________________________
Tygarjas Twyrls Bigstyck, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ _________________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney 2 Packet Pg. 12

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
11/27/2023
1 SUBJECT:

PB&R Childcare Continued Funding Applications for Fiscal Year 2024-25 RECOMMENDED ACTION:

Adopt a Resolution entitled "A Resolution of the City Council of the City of Pacifica Approving Agreement to This Transaction with the California Department of Education and the California Department of Social Services for the Purpose of Providing Childcare and Development Services and to authorize the Designated Personnel to Sign Contract Documents for Fiscal Years 2024-25.”
STAFF CONTACT:

Bob Palacio, Director, Parks, Beaches and Recreation
(650) 738-7381
[email protected]
Tracy Gilbert, Recreation Supervisor, Child Care
(650) 738-7388
[email protected]
BACKGROUND/DISCUSSION:

Childcare services is in an annual contractual agreement with the California Department of Education and the California Department of Social Services to provide subsidized Child Care.

Council action authorizing staff to have on-going responsibility and authority to work with the California Department of Education and the California Department of Social Services regarding the program’s contracts is required. Currently, Recreation Supervisor Tracy Gilbert has this authority and will continue to facilitate this process. This includes: processing the annual Continued Funding Application, submission of monthly/quarterly requests for reimbursement, attending semi-annual and annual training sessions and authorizing families to receive subsidized care.

The California Department of Education and the California Department of Social Services request a Council resolution authorizing participation in the 2024-25 contract documents, the Continued Funding Application, and all related contract documents and naming an authorized representative.

ALTERNATIVE ACTION:

Council could give direction on alternative ways to fund the program.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:

Enhance organizational and fiscal stability.
3 Packet Pg. 13
Pacifica City Council 2
November 27, 2023
FISCAL IMPACT:

Annual contracts from the California State Department of Education and Department of Social Services provide funds for subsidized childcare. The amount provided is based on enrollment of the number of subsidized children, and the amount we spend on each child in our childcare program. The expenditures and revenues related to these contracts will be included in the Fiscal Year 2024-2025 budget proposal and will determine the amount we will receive. No additional budget authority is needed.

ORIGINATED BY:

Parks, Beaches & Recreation Department
ATTACHMENT LIST:
3 Packet Pg. 14
Pacifica City Council 3
November 27, 2023
RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA APPROVING

AGREEMENT TO THIS TRANSACTION WITH THE CALIFORNIA DEPARTMENT OF

EDUCATION AND THE CALIFORNIA DEPARTMENT OF SOCIAL SERVICES FOR THE

PURPOSE OF PROVIDING CHILD CARE AND DEVELOPMENT SERVICES AND TO

AUTHORIZE THE DESIGNATED PERSONNEL TO SIGN CONTRACT DOCUMENTS FOR FISCAL YEAR 2024-25
BE IT RESOLVED that the Governing Board of the City of Pacifica authorizes entering into this agreement to this transaction and that the person/s who are listed below are authorized to sign the transaction for the Governing Board.

NAME TITLE SIGNATURE
Kevin Woodhouse City Manager __________________________ Bob Palacio Parks, Beaches and Recreation Director __________________________ Tracy Gilbert Recreation Supervisor __________________________ • • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 27
th day of November 2023, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
11/27/2023
1 SUBJECT:

Manor Drive Storm Drain Repair Project
RECOMMENDED ACTION:

Adopt Resolution Approving the Construction Services Agreement between the City of Pacifica and Gray Lake Construction (Attachment 1) for the Manor Drive Storm Drain Repair Project, in an Amount Not to Exceed $90,000 with a 30% Contingency, for a Total of $117,000.

STAFF CONTACT:

Louis Langi, Streets and Motor Pool Superintendent
(650) 738-3760
[email protected]
Lisa Petersen, P.E., Director of Public Works
(650) 738-3770
[email protected]
BACKGROUND/DISCUSSION:

On January 4, 2023, the City Manager, acting in his capacity as Director of Emergency Services, proclaimed the existence of a local emergency pursuant to PMC 4-2.05(a) and executed the "Proclamation of the Existence of a Local Emergency" ("Proclamation").

The President declared a major disaster for the State of California on January 14, 2023 as a result of the severe winter storms, flooding, landslides and mudslides that began on December 27, 2022. This declaration, FEMA-4683-DR-CA, has authorized Individual Assistance for several Counties throughout California, including San Mateo County. The Manor Drive Storm Drain Repair Project was included in the City of Pacifica list of damaged sites, inspected by FEMA and approved for Public Assistance.

The storm events that started on December 31, 2022, resulted in dangerous conditions and public safety concerns and caused damage all around the Bay Area. Like many other Bay Area Cities, Pacifica received 4.6" of rain in 24 hours, which resulted in severe flooding, road closures, fallen trees, and sanitary sewer overflow events. During the storm events, heavy rains caused high-volume runoff that damaged the City storm drainpipe on undeveloped land across from 559 Manor Drive. The pressure in the pipe caused separation at joints and other locations along the pipe. The project scope includes removing approximately 300 feet of the damaged 24- inch corrugated metal pipe (CMP) and replacing it with new 24-inch high density polyethylene pipe (HDPE). Due to the very difficult hillside terrain, access and condition of the damaged pipe, a 30% contingency for this project is needed.

Due to the emergency nature of the damage, the City Manager is requesting waiving the bidding process due to health and safety issues and entering into an agreement with Gray Lake Construction to repair the Manor Drive storm drainpipe. The City of Pacifica Municipal Code 4 Packet Pg. 16
Pacifica City Council 2
November 27, 2023
section 3-15.09 states in cases of emergency when repairs or replacements are necessary, the City, under direction of the City Manager, may proceed at once to replace or repair any public facility without adopting plans, specifications, strain sheets, or working details, or giving notice for bids to let contracts. Staff contacted several qualified contractors and only Gray Lake Construction submitted a proposal.

For these reasons, the City Manager is recommending adoption of the resolution approving the Construction Services Agreement between the City of Pacifica and Gray Lake Construction for the Manor Drive Storm Drain Repair Project, in an amount not to exceed $90,000, with a 30% contingency for a total of $117,000; and authorize the City Manager to execute all documents related to the Agreement.

ALTERNATIVE ACTION:

The Council may choose not to approve the Construction Services Agreement with Gray Lake Construction via urgent purchase. However, this important storm damage repair work is required. The City Manager does not recommend this alternate action.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:

Approval of the Agreement is consistent with the following Council adopted Goals:
• Improve and steward City Infrastructure, streets, and facilities: The repair of the Manor Drive drainage pipe will improve the storm drain system in the area and prevent further damage.

FISCAL IMPACT:

The Project Source and Use of Funds spreadsheet is shown below:

Source of Funds
Disaster Accounting Fund $ 117,000
Total Source of Fund $ 117,000
Use of Funds
Gray Lake Construction Contract $ 90,000
30% Contingency $27,000
Total Use of Funds ($117,000)
Estimated Project Source End Balance $ 0.00
City staff has applied for FEMA Public Assistance and would reimburse the City 75% of total cost. City matching funds of 25% will come from the Disaster Accounting Fund.

ORIGINATED BY:

Public Works
ATTACHMENT LIST:
4 Packet Pg. 17
Pacifica City Council 3
November 27, 2023
Attachment 1: Construction Services Agreement between the City of Pacifica and Gray Lake Construction (PDF)
4 Packet Pg. 18
Pacifica City Council 4
November 27, 2023
RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA APPROVING THE

CONSTRUCTION SERVICES AGREEMENT BETWEEN THE CITY OF PACIFICA AND GRAY

LAKE CONSTRUCTION FOR THE MANOR DRIVE STORM DRAIN REPAIR PROJECT, IN AN AMOUNT NOT TO EXCEED $90,000 WITH A 30% CONTINGENCY, FOR A TOTAL OF $117,000.

WHEREAS, On January 4, 2023, the City Manager, acting in his capacity as Director of Emergency Services, proclaimed the existence of a local emergency pursuant to PMC 4-

2.05(a); and
WHEREAS, The President declared a major disaster for the State of California on January 14, 2023 as a result of the severe winter storms, flooding, landslides and mudslides that began on December 27, 2022; and
WHEREAS, the winter storm events, resulted in dangerous conditions and public safety concerns and caused damages all around the City; and WHEREAS, the Manor Drive Storm Drain Repair Project will repair the pipe damaged during storm events; and
WHEREAS, time is of essence to construct the project before the storm season and the City Manager has requested waiving the bid process to allow for expediated construction; and
WHEREAS, City of Pacifica Municipal Code section 3-15.09, authorizes the City Manager to waive bidding requirements for urgent procurement if he/she determines sufficient justification exists; and
WHEREAS, the City will receive FEMA Public Assistance for the 2023 winter storm damages.

NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Pacifica to Adopt the Resolution Approving the Construction Services Agreement between the City of Pacifica and Gray Lake Construction for the Manor Drive Storm Drain Repair Project, in an Amount Not to Exceed $90,000 with a 30% Contingency, for a Total of $117,000; and authorize the City Manager to execute all documents related to the project. • • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 27th day of November 2023, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:
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ABSTAIN, Councilmembers:
_________________________________
Tygarjas Twyrls Bigstyck, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ _________________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney 4 Packet Pg. 20
ATTACHMENT 1

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CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
11/27/2023
1 SUBJECT:

Recology of the Coast’s Application for Rate Increase for 2024 RECOMMENDED ACTION:

Move to adopt a Resolution confirming Recology of the Coast’s application for rate increase of

5.86% is accurate and consistent with the annual rate adjustment procedures specified in the Recology Agreement; and finding the confirmation of the rate increase exempt under the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines 15061(b)(3).

STAFF CONTACT:

Lisa Petersen, P.E., Director of Public Works
(650) 738-3770
[email protected]
BACKGROUND/DISCUSSION:

In February 2010, the City of Pacifica entered into a franchise agreement with Recology of the Coast (“Recology”) for recyclable materials, organic materials, and solid waste collection services (“ Agreement”). The City and Recology executed a First Amendment t o t h e Agreement on March 11, 2013.

On October 24, 2016, the City Council adopted Resolution No. 67-2016, extending the term of the Agreement for an additional five years until December 31, 2022.

The Agreement generally grants Recology the exclusive right and franchise to collect waste materials in Pacifica. This includes solid waste, targeted recyclable material and organic materials on residential, commercial and City premises as well as construction and demolition debris.

On October 10, 2022, the City Council adopted a Resolution approving the Second Amendment to the Agreement, which among other things, extended the term an additional 10 years, with an option to extend an additional five years. The Second Amendment also revised the Annual Rate Application Process identified in the Agreement to clarify that Recology ultimately sets the rate charged to the ratepayers. For future rate adjustments, the City’s role would be to undertake an administrative review of the application for a rate increase to confirm accuracy and consistency with the Rate Adjustment procedures specified in the Agreement (See Second Amendment to Agreement Section 11.02 and Attachment K-Attachment 1).

Given that the City does not set, establish, or impose the rates charged to the ratepayers, the City is not obligated to follow the procedures for establishing or increasing a proposed assessment under Proposition 218 (Article XIII D of the California Constitution).

The City received Recology’s application for annual rate increase on September 1, 2023. In the fall of 2023, the City entered into an agreement with HF&H Consultants for financial review of the proposed 2024 Recology rate increase. The City engaged HF&H to perform a review of the application in accordance with Section 11.03(B) of the Agreement. HF&H engaged with 5 Packet Pg. 50
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November 27, 2023
Recology and worked with them to verify the index-based cost increases applicable for 2024.

This information was provided in a November 10, 2023 report (Attachment 2) by HF&H.

HF&H confirmed the 5.86% rate increase for their services to the City of Pacifica in 2024 and that this is below the allowable maximum rate increase of 6% that is part of the Agreement and in line with the rate adjustment procedures in the Agreement. The largest components of the increase are for inflationary increases in labor and fuel costs. Fuel costs increased by 36% and labor costs increase 5.47%.

Based on the HF&H review, the City Manager recommends the City Council Approve a Resolution confirming that Recology of the Coast’s application for annual rate increase of

5.86% does not exceed the allowable maximum rate of 6% and that the City has reviewed the annual rate increase to confirm accuracy and consistency with the Rate Adjustment procedures specified in the Agreement.

ALTERNATIVES:

Council may choose not to adopt the resolution confirming the Recology rate increase, however, this would not be in accordance with the Agreement the City signed with Recology of the Coast and is not recommended.

FISCAL IMPACT:

The Recology of the Coast rates would increase by 5.86% starting in 2024.

CEQA:

The confirmation of the rate increase would be exempt under CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility approval would cause a significant effect on the environment as it is an administrative item and will not change the services provided by Recology.

ORIGINATED BY:

Public Works
ATTACHMENT LIST:

Attachment 1: Second Amendment to Recology Agreement (PDF) Attachment 2: HFH Review of Recology 2024 Rate Application (PDF) 5 Packet Pg. 51
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November 27, 2023
RESOLUTION NO. ______
APPROVE A RESOLUTION CONFIRMING RECOLOGY OF THE COAST’S APPLICATION FOR RATE INCREASE OF 5.86% IS ACCURATE AND CONSISTENT WITH THE ANNUAL RATE ADJUSTMENT PROCEDURES SPECIFIED IN RECOLOGY AGREEMENT; AND

FINDING CONFIRMATION OF RATE INCREASE EXEMPT UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”) PURSUANT TO CEQA GUIDELINES SECTION 15061(b)(3)
WHEREAS, in February 2010, the City of Pacifica entered into a franchise agreement with Recology of the Coast (“Recology”) for Recyclable Materials, Organic Materials, and Solid Waste Collection Services (“Agreement”); and WHEREAS, the City and Recology executed a First Amendment to the Franchise Agreement on March 11, 2013; and
WHEREAS, on October 24, 2016, the City Council adopted Resolution No. 67-2016, extending the term of the Agreement for an additional five years until December 31, 2022; and WHEREAS, the Agreement generally grants Recology the exclusive right and franchise to collect waste materials in Pacifica. This includes solid waste, targeted recyclable material and organic materials on residential, commercial and City premises as well as construction and demolition; and
WHEREAS, on October 10, 2022, the City Council adopted a Resolution approving a Second Amendment to the Franchise Agreement, which among other things, extended the term an additional 10 years, with an option to extend an additional five years; and WHEREAS, the Second Amendment also revised the Annual Rate Application Process identified in the Agreement to clarify that Recology ultimately sets the rate charged to the ratepayers; and
WHEREAS, for future rate adjustments, the City’s role would be to undertake an administrative review of the application for a rate increase to confirm accuracy and consistency with the rate adjustment procedures specified in the Agreement; and WHEREAS, the City hired HF&H financial consultants in fall of 2023 who have confirmed the accuracy and consistency of the requested Recology rate increase of 5.86% with the rate adjustment procedures specified in the Agreement.

NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Pacifica does hereby resolve as follows:

1. The confirmation of the rate increase would be exempt under CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility approval would cause a significant effect on the environment as it is an administrative item and will not change the services provided by Recology.
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2. Recology of the Coast’s application for rate increase of 5.86% is accurate and consistent with the annual rate adjustment procedures specified in the Agreement and does not exceed the allowable maximum rate of 6%.
• • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 27th day of November 2023, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA APPROVING A

SECOND AMENDMENT TO THE FRANCHISE AGREEMENT WITH RECOLOGY OF THE

COAST TO EXTEND THE TERM AN ADDITIONAL TEN YEARS, WITH AN OPTION TO

EXTEND AN ADDITIONAL FIVE YEARS, APPROVE THE RATE SCHEDULE SET BY RECOLOGY FOR SINGLE FAMILY RESIDENTIAL AND COMMERCIAL RATES FOR 2023,

REVISE CITY FEES TO COMPLY WITH APPLICABLE LAW AND OTHER VARIOUS AMENDMENTS; FINDING APPROVAL OF THE SECOND AMENDMENT EXEMPT FROM

THE CALIFORNIA ENVIRONMENTAL QUALITY ACT AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE SECOND AMENDMENT ________________________________________________________________________ WHEREAS, the City is responsible for the protection of the public health and safety of the residents and businesses of the City and solid waste handling services must be provided in a manner consistent with the exercise of City's duty to protect the public health and safety; and WHEREAS, in February 2010, the City of Pacifica entered into a franchise agreement with Recology of the Coast (“Recology”) for Recyclable Materials, Organic Materials, and Solid Waste Collection Services; and
WHEREAS, the City and Recology executed a First Amended Franchise Agreement on March 11, 2013 (“Agreement”); and
WHEREAS, on October 24, 2016, the City Council adopted Resolution No. 67-2016 extending the term of the Agreement for an additional five years until December 31, 2022; and WHEREAS, the City requires additional services related to Senate Bill 1383 and mandatory organic waste disposal; and
WHEREAS, Recology has the demonstrated experience, responsibility and qualifications to provide consistent recyclable, organic and solid waste collection services throughout the City in a safe and responsible manner and has been satisfactorily meeting the City’s requirements since 2010; and
WHEREAS, Recology has extensive knowledge of the City’s needs and has formed important relationships within the community in order to perform their waste hauling services and has the correct equipment to provide the City collection services; and WHEREAS, to the extent that this amendment results in the imposition of any fees, rates, or charges for services or facilities in connection with the City’s solid waste system, those charges are adopted pursuant to California Health and Safety Code section 5471; and WHEREAS, the City Council of the City of Pacifica considered the City Manager’s recommendation to approve the Second Amendment to the Agreement between the City of Pacifica and Recology on October 10, 2022 and determined it is in the best interest of the public health, safety and well-being to enter into a Second Amendment to the Agreement with Recology, without competitive bidding, to extend the Agreement so that Recology can continue to be responsible for the collection, transportation and recycling or disposal of solid waste.

ATTACHMENT 1

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming RESOLUTION NO. 69-2022
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NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Pacifica as follows:

1. The above recitals are true and correct and material to this Resolution.

2. In making its determination, the City Council relied upon and hereby incorporates by reference all correspondence, staff reports, and other related materials submitted to the Council for consideration of the Second Amendment.

3. The approval of the Second Amendment to the Agreement would be exempt under the California Environmental Quality Act ("CEQA") Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility approval and execution of the Second Amendment would cause a significant effect on the environment. The Second Amendment to the Agreement will not change the operation of solid waste collection services provided to the City.

4. The City Council hereby approves the Second Amendment to the Agreement with Recology, in the form attached hereto as Exhibit A and all Attachments attached thereto.

5. The City Manager is hereby authorized to execute the Second Amendment, in the form attached hereto as Exhibit A, with minor revisions that may be approved by the City Manager and the City Attorney, and to execute any other necessary documents to effectuate the terms of the Second Amendment to the Agreement.
• • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on held on the 10th day of October 2022, by the following vote:

AYES, Councilmembers: Beckmeyer, Bier, Bigstyck, O’Neill, Vaterlaus.

NOES, Councilmembers: n/a.

ABSENT, Councilmembers: n/a.

ABSTAIN, Councilmembers: n/a
____________________________ Mary Bier, Mayor
ATTEST: APPROVED AS TO FORM: ___________________________ __________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney

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EXHIBIT A

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10/6/22

SECOND AMENDMENT TO FRANCHISE AGREEMENT
This SECOND AMENDMENT to the Franchise Agreement (“Second Amendment”) hereinafter referenced is entered into and effective as of October 10, 2022 between the City of Pacifica, a California municipal corporation (“City”), and Recology of the Coast, a California corporation (“Contractor”). City and Contractor may be referred to individually or collectively referred to as “parties.”
WHEREAS, in February, 2010, the City and Contractor entered into a Franchise Agreement Between the City of Pacifica and Recology of the Coast for Recyclable Materials, Organic Materials and Solid Waste Collection Services; and WHEREAS, on March 11, 2013, the City and Contractor entered into a First Amended Franchise Agreement for Recyclable Materials, Organic Materials, and Solid Waste Collection Services (the “Agreement”) effective March 12, 2013; and WHEREAS, on October 24, 2016 the City Council adopted Resolution No. XXX, extending the term of the Agreement for an additional five years until December 31, 2022; and
WHEREAS, the parties wish to amend the Agreement as set forth herein, to extend the term of the Agreement and make other revisions pursuant to the terms and exhibits provided herein.

NOW, THEREFORE, in consideration of the mutual promises contained in this Second Amendment and for other good and valuable consideration, City and Contractor agree as follows:

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

2. The Agreement is hereby amended to delete all references to “Plant Materials” and replace all references within the Agreement to “Organic Materials or Plant Materials” with “Organic Materials”.

3. Section 3.03 (Extension of Term) of the Agreement is hereby amended to delete and replace that section in its entirety to read as follows:
“3.03 Extension of Term
City has the sole option to extend the Term of this Agreement for an additional period of five (5) years (“Extension Term”). If the City wishes to extend this Agreement it shall provide written notice to Contractor no less than one (1) year prior to the end of the Term.

The City has exercised its right to extend the Term of the Agreement as follows:

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On October 24, 2016, for an additional five years until December 31, 2022; and On October 10, 2022, for an additional ten years until December 31, 2032. The City and Contractor may mutually agree in writing to extend the Term for an additional five years no less than one (1) year prior to December 31, 2032.

During the Extension Term all provisions of the Agreement, as amended, shall apply.”

4. The third sentence of Section 5.02.D.4 (Solid Waste Collection; City Facilities; Public Litter Receptacles), which reads “These Collections will be made between one (1) and six (6) Days per week, as determined by the City” of the Agreement is hereby amended to delete and replace that sentence in its entirety to read as follows:
“These Collections will be made between one (1) and seven (7) Days per week.” 5. Section 5.03.A.2 (Targeted Recyclable Materials Collection; Single-Family Dwelling; Used Motor Oil and Used Motor Oil Filters) of the Agreement is hereby deleted in its entirety. Contractor and City mutually agreed prior to the Effective Date of this Second Amendment to eliminate Curbside Collection of Used Motor Oil and Used Motor Oil Filters based on environmental concerns. These items are accepted by Contractor at the drop-off facility pursuant to the terms of Section 5.14 of the Agreement.

6. The second sentence of Section 5.03.D.1 (Targeted Recyclable Materials Collection; City Facilities; General) of the Agreement, which reads “Such service shall be either Single-Stream or Source Separated Collection, as selected by City” shall be deleted in its entirety. Contractor and City mutually agreed prior to the Effective Date of this Second Amendment that all Targeted Recyclable Materials Collection Services shall be on a Single-Stream basis.

7. Section 5.05 (Residential On-Call Curbside Bulky Item Collection Service) of the Agreement is hereby amended as follows:
(a) Section 5.05.A (General) is hereby amended to delete Section 5.05.A and replace it in its entirety to read amended to read as follows:
“A. General. Contractor shall provide three (3) separate On-Call Curbside Collection Service pick-ups to each Single-Family Dwelling Residential Premises annually upon Owner or Occupant’s request.

Contractor will schedule the On-call Bulky Item Collection Service pick-up on the regularly scheduled Solid Waste Collection Day for Single-Family Dwellings, no more than ten (10) Business Days after the Owner or Occupant’s request. Notwithstanding the foregoing, On-Call Curbside Bulky Item Collection Service shall only be provided to Customers that are not delinquent on their service payments.

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Contractor will allow the scheduling of On-Call Bulky Item Collection Service from January 1 through December 10 of each Rate Year. Contractor may provide additional On-Call Bulky Item Collection Service for a Customer beyond three (3) pick-ups per Rate Year, and shall be entitled to bill Customer as specified in Attachment N. Customer allotted On-Call Curbside Collection Service pick-ups do not carry over from year to year and Contractor shall allow Customers to schedule up to three (3) pick-ups for the same date if requested by Customer. Contractor is required to notify Customer if they have already received the annually allocated three (3) Collection events within one (1) Business Day of Customer request. If Contractor fails to notify Customer that they have received the annually allocated three (3) Collection events, Contractor shall provide the service and is not entitled to additional Contractor’s Compensation from Customer or City for the third or subsequent On-Call Bulky Item Collection Service event.”
(b) Section 5.05.B (Accepted Materials) is hereby amended to delete Section

5.05.B and replace it in its entirety to read as follows:
“B. Accepted materials. Collection of any of the following shall constitute one (1) pick-up and Contractor shall accept only the following materials as part of its On-Call Bulky Item Collection Service:

1. Major Appliances – One (1) Major Appliance (e.g. washing machine or clothes dryer).

2. Bulky Items – One (1) large Bulky Item (e.g. reusable furniture, mattresses, four tires).

3. E-Scrap – One (1) item (e.g., a computer, computer monitor or television.

4. Miscellaneous. Up to five (5) thirty-two (32) gallon bags of Solid Waste.

Contractor shall reject: refrigerators or freezers; Construction and Demolition Debris; Hazardous Waste; Infections Waste; ashes; dirt; Organic Materials; or Targeted Recyclable Materials. Contractor may reject any individual item that weights more than one-hundred (100) pounds unless Customer has paid, or has agreed in advance to pay an additional fee for service.”
(c) Section 5.05.E (Collection and Processing Methods) is to hereby amended to delete Section 5.05.E and replace it in its entirety to read as follows:
“E. Collection and Processing Methods. All materials collected under this Section 5.05 will be collected by a flatbed truck and the items will be

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segregated in the recycling yard for (1) reuse or Recycling or (2) Disposal, prior to their transport for processing.”

8. Section 5.10 (Coats for Kids Program) of the Agreement is hereby deleted in its entirety and replaced with “5.10 RESERVED”. 9. Section 5.14 (Drop-Off Facility) of the Agreement is hereby amended as follows:
(a) Section 5.14.A is hereby amended to delete Section 5.14.A and replace it in its entirety to read as follows:
“A. General. Contractor shall operate a facility in City accepting the dropoff of the materials listed in subsection B below from residents of City, provided that such materials were generated at Residential Premises and not as a result of Commercial activity. If such materials are Recyclable Materials, Contractor shall handle them as such; otherwise, Contractor shall dispose of them as Solid Waste or handle them as Hazardous Waste, as the case may be. The facility’s hours of operation will be 8:00 a.m. to 4:00 p.m. Tuesday and Thursday. Contractor may establish limits on the volume and weight of materials that a resident may deliver to the drop-off facility that are consistent with the amount of waste normally generated at Residential Premises, provided that any limit on volume of material not be less than one (1) cubic yard per resident.”
(b) Section 5.14.B. is hereby amended to delete Section 5.14.B and replace it in its entirety to read as follows:
“B. Acceptable Materials. Residents of the City may deliver and Contractor shall accept at the drop-off facility the following types of materials: used motor oil, used motor oil filters, automotive batteries, mattresses, box springs furniture, Major Appliances, non-commercial size refrigerators and freezers (for an additional fee) unpainted and untreated wood only (not including plant materials), miscellaneous metals (white metal goods, etc.), Targeted Recyclable Materials, tires for an additional fee (i.e., four (4) per Customer removed from rims, no commercial tires), Universal Waste, and E-Scrap. Contractor shall be allowed to reject: liquids or sludge (not otherwise listed as acceptable materials); Construction and Demolition Debris; cement; dirt; asphalt; concrete; Plant Materials; Hazardous Waste; Infections Waste; Contaminated Targeted Recyclable Materials; and Organic Materials.”

10. The first paragraph of Section 7.02.A (Customer Service; Local Office) of the Agreement is hereby amended to delete Section 7.02.A and replace it in its entirety to read as follows:

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“Contractor shall operate a local office at 2305 Palmetto Avenue, Pacifica.

Contractor shall be responsible for ensuring that a qualified representative is available at the local office on Tuesdays and Thursdays, from 7:30am to 4:30pm, exclusive of Holidays to communicate with the public and accept non-cash Bill payments from Customers. The local office and customer service telephone number(s) shall be a local or toll free call.”

11. The third and fourth sentences of Section 7.02.B (Customer Service; Customer Service Call Center and Staffing) of the Agreement which reads “In addition, the Customer service call center will offer contracting with a service to provide bilingual capacity for other languages including Spanish, Cantonese, Mandarin, and Vietnamese.

Contractor shall provide immediate access to interpreters for over one-hundred and seventy-five (175) languages through the use of Language Line service, or a similar service” are hereby deleted in their entirety from Section 7.02.B.”

12. The phrase “or Source Separated” is hereby deleted from Section 7.05.A.1 (MultiFamily Recycling Promotion; Multi-Family Dwelling Promotion; Site Assessments) of the Agreement. Contractor and City mutually agreed prior to the Effective Date of this Second Amendment that all Collection Services of Targeted Recyclable Materials shall be done on a Single-Stream basis.

13. Section 8.01.A. (Collection Hours and Schedules) of the Agreement shall be amended to read as follows:
(a) Section 8.01.A.1 shall be deleted and replaced it in its entirety to read as follows:
“1. Residential. Residential Solid Waste, Targeted Recyclable Materials, and Organic Materials (including all such services provided to SFD and Multi-Family Dwelling Premises) shall be collected on weekdays (i.e., Monday through Friday) between 5:00 a.m. and 6:00 p.m. exclusive of Holidays.”
(b) Section 8.01.A.2 shall be deleted and replaced it in its entirety to read as follows:
“2. Commercial. Commercial and City Facilities Solid Waste, Targeted Recyclable Materials, and Organic Materials shall be Collected on weekdays (i.e., Monday through Friday) between 4:30 a.m. and 7:00 p.m. and weekends (i.e., Saturday and Sunday) between 6:00 a.m. and 5:00 p.m., exclusive of Holidays. The City may restrict or require modifications to hours for Collection from Commercial Premises and City Facilities to resolve noise Complaints, and, in such case, the City Manager may restrict the allowable operating hours.”

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(c) Section 8.01.A.3 shall be deleted and replaced in its entirety to read as follows:
“3. Commercial Exception. Collection from Commercial Premises that are one hundred (100) feet or less from Residential Premises shall only occur between the hours of 5:00 a.m. and 7:00 p.m., Monday through Saturday and all such operations shall be in accordance with permissions provided to Contractor by City. The City may restrict or require modifications to hours for Collection from Commercial Premises and City Facilities to resolve noise Complaints, and, in such case, the City Manager may restrict the allowable operating hours.”

14. In line 8 of Section 8.05.B (Containers; New SFD Carts) and line 4 of Section

8.05.C (Containers; Commercial and Multi-Family Containers) of the Agreement, “20” is hereby deleted. Contractor no longer provides twenty (20) gallon Solid Waste Carts as part of its offerings for Solid Waste Carts.

15. Section 10.01 (Franchise and Regulatory Fees) of the Agreement is hereby deleted and replaced in its entirety to read as follows:
“10.01 Franchise and Service Fees
City and Contractor acknowledge that an exclusive franchise is a special agreement that has been negotiated between City and Contractor. The exclusive franchise that has been granted through this Agreement is intended to allow Contractor to use City property to provide Collection services. City has previously imposed or may impose other fees, which are intended to recover the City’s costs associated with providing services and administering regulatory programs related to solid waste management and recycling and organic materials collection. In consideration of the exclusive franchise granted to Contractor by this Agreement, Contractor shall pay to City the following fees, irrespective of the amount of Contractor’s Gross Receipts:

A. Franchise Fee. Contractor shall pay to City a Franchise Fee in the amount of $200,000 annually. This fee was negotiated between the Contractor and City in good faith and at arms-length. The fee does not exceed the fair market value of City property used by Contractor pursuant to this Agreement and the property rights granted to Contractor by this Agreement, including, but not limited to, access for ingress and egress of the north eastern portion of the City yard at 2212 Beach Boulevard with access off of Palmetto Avenue for a total area of 40,000 square feet and the right to place Containers in public streets, sidewalks, and right-of-ways.

B. Franchise Administrative Services Fee. This fee is equal to the City’s costs of providing services related to this Agreement and Contractor’s Collection services for a total of $183,790 annually.

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C. Frontierland Park Remediation Fee. The City has an ongoing obligation to remediate Frontierland Park for matters related to the closed landfill site at that location. Remediation efforts focus on minimizing or resolving health, safety and public nuisance problems that may adversely affect the quality of life for citizens of the City. The remediation fee also provides funding for improvements to Frontierland Park facilities. The Frontierland Park remediation fee monies are used by the City to fund the remediation efforts. Contractor shall pay to City a Frontierland Park remediation fee in the amount of $6,250 per month, which totals $75,000 annually. The Frontierland Park remediation fee does not exceed the City’s annual costs to remediate Frontierland Park.

D. AB 939 Fee. The Act (AB 939) requires the City to plan, implement and monitor programs that will reduce the amount of Solid Waste Disposed by residents and businesses and report annually to the State. Programs include recycling and organics programs, public education and outreach efforts, franchise monitoring, etc. The AB 939 fee is used to fund these mandated efforts. Contractor shall pay to City an AB 939 fee in the amount of $2,500 per month, which totals $30,000 annually. The AB 939 fee does not exceed the City’s costs to comply with AB 939.

E. City Vehicle Impact Fee. Contractor shall pay City a refuse vehicle impact fee of $421,210 annually to compensate the City for the additional expenses it incurs to repair and address the impact to the City's public streets caused by Contractor's Collection vehicles while performing Collection services.”

16. Sections 10.02 (Time and Method of Payment) and section 10.03 (Adjustments to Fees; Additional Fees) of the Agreement are hereby amended to delete the phrase “Regulatory Fee(s)” and replace it with “Service Fee(s)”.

17. Section 11.02. (Rate-Setting Process) is hereby deleted and replaced in its entirety to read as follows: “A. New Rates. The City shall approve the maximum allowable Rates that reflect the Rate adjustments provided for in this Article 11 and Attachment K. If at any time during the Term of this Agreement, Contractor determines the need for a Rate that does not appear on the City-approved Rate schedule in Attachment N, Contractor shall immediately notify the City and request establishment of such a Rate. For example, if Contractor wishes to introduce Collection of a fifteen (15) cubic yard Compactor five (5) times per week, and the City-approved Rate schedule does not include a Rate for this service, Contractor must request that the City approve such a Rate.

B. Initial Rates. The maximum allowable Rates for Rate Year Fourteen, January 1, 2023 through December 31, 2023, shall be the Rates set forth in Attachment N.

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C. [Reserved].

D. Subsequent Rate Adjustments. The Rates for subsequent Rate Years shall be determined based on annual adjustments in accordance with this Article 11 and Attachment K as follows: (i) seventeen, twenty, and twenty-three shall be CostBased Adjustment Years and (ii) Rate Years fifteen, sixteen, eighteen, nineteen, twenty-one, and twenty-two shall be Index-Based Adjustment Years.

E. Rate Structure. The Contractor may change the relationship of individual Rates in comparison with other Rates. Any such changes would occur in conjunction with the annual Rate adjustment process described in Section 11.02.D or in conjunction with a Rate adjustment resulting from a Special Rate Review in accordance with Section 11.04.”

18. Section 11.03 (A) (Annual Rate Application Process; Application Date and Content) of the Agreement is hereby amended to add a new subsection (3) to read as follows:
“(3) Maximum Rate Adjustment Factor.

The Rate Adjustment Factor calculated pursuant to Sections 11.03.A.1(iii) and

11.03.A.2.(v) of this Agreement, may not exceed six percent (6.0%). In the event that the Rate Adjustment Factor calculation exceeds six percent (6.0%), the percentage exceeding six percent (6.0%) shall be carried forward to the following year, and so on until all excess amounts are applied or the Agreement terminates. Notwithstanding the foregoing, the City shall not be required to compensate Contractor for any cumulative “roll-over” amounts remaining at the end of the Agreement Term, including extensions.

In the event that the calculated Rate Adjustment factor results in a negative Rate Adjustment Factor, the City reserves the right to “roll-under” the Rate reduction, such that there is no Rate adjustment in the Rate Period for which the negative Rate Adjustment Factor was calculated, but the calculated Rate reduction may be deferred to the following Rate Period, as a credit against future Rate increases.”

19. Section 11.03 (B) (Annual Rate Application Process; City Review and Approval) of the Agreement is hereby deleted and replaced in its entirety to read as follows:
“B. City Review and Approval
City shall review Contractor’s Application for accuracy and consistency with the applicable Rate adjustment procedures specified in this Article 11 and Attachment K. Within thirty (30) days after Contractor’s submission of the Application, City shall notify Contractor of any factual or calculation errors that City has identified in the Application, and Contractor shall have the opportunity to revise the Application.

In connection with City’s review of Contractor’s Application, Contractor shall provide all information reasonably requested by City to evaluate the Application (it being understood that information regarding Permitted Related Party Transactions need not be provided). Upon request, Contractor shall

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provide information from Related Party Entities regarding any financial transactions between Contractor and such Related Party Entities (other than Permitted Related Party Transactions) relating to this Agreement, to the extent reasonably necessary to evaluate Contractor’s Application.

The City Council shall review and approve Maximum Rates to reflect the adjustments required by Section 3 of Attachment K or Section 4 of Attachment K, as the case may be, and Section 11.03, if applicable subject to potential Rate constraints described in Section 11.07. City and the City Council shall use their reasonable best efforts and act in good faith to approve annual Rate adjustments to be effective on or before January 1 of the Rate Year following the year in which the Application was submitted.”

20. Section 11.04 (G) (Special Rate Review; Expenses of Review) of the Agreement is hereby deleted and replaced in its entirety to read as follows:
“G. Expenses of Review. Contractor shall reimburse City for City’s reasonable costs incurred in participating in any special Rate review, up to a maximum of $35,000. For special Rate reviews initiated by City pursuant to Section 15.12, or special Rate reviews initiated by Contractor arising from events described in Sections 11.04.B.1,

11.04.B.2 or (if the Change in Law is initiated by City) 11.04.B.4., Contractor shall be entitled to recover the cost of such reimbursement through the Rate adjustment mechanism (as an Eligible Cost or otherwise); otherwise, such reimbursement shall be a Non-Allowable Cost.”

21. Section 2.04 (No Conflict with Applicable Law or Other Documents) of the Agreement is hereby amended to add the following paragraph:
“The Parties agree that if there is any Change in Law that affects a Parties rights, obligations or liabilities under this Agreement the Parties shall meet and confer in good faith regarding the Change in Law and shall re-negotiate the terms of this Agreement to the extent necessary to address the Change in Law.”

22. Attachment A of the Agreement is hereby amended to delete and replace the following definitions: “’Bulky Items’ means large items including, but not limited to, Major Appliances, furniture, carpets, mattresses, and other oversize materials whose large size precludes or complicates their handling by normal collection. Bulky items do not include abandoned automobiles, large auto parts, trees, refrigerators, or freezers.” “’Business Days’ means days (i.e. Monday through Friday) during which Contractor’s Customer Service hotline is staffed to do business with the public.” “’Designated Processing Facility’ means the Green Waste Recovery recycling plant located at 625 Charles Street, San Jose , which is

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owned and operated by Green Waste Recovery, and which will process Targeted Recyclable Materials.”
“’Holiday Schedule’ means the modified service schedule for the days following a Holiday. Customer will receive advance written notification of which weekend day their pick up will be scheduled following a holiday.” “’On-Call Service’ means Collection service provided by Contractor that is not regularly scheduled or is scheduled more than twenty-four (24) hours in advance. On-Call service is initiated by Customer by calling or emailing Contractor to request the service.”
“’Organic Materials’ means those materials that will decompose and/or putrefy and that the City permits, directs, or requires Generators to separate from Solid Waste and Targeted Materials for Collection in specially designated Containers for Organic materials Collection. Organic Materials include Plant Materials, Food Scraps, and uncoated paper contaminated with Food Scraps in accordance with Pacifica Municipal Code section 6-5.701 et seq. No Discarded Material shall be considered Organic Materials, unless such material is separated from Solid Waste and Targeted Recyclable Material.”
All other definitions not identified in Attachment A shall remain unchanged.

23. Attachment E of the Agreement is hereby deleted and replaced in its entirety with Attachment E (SB 1383 Matters) attached hereto and hereinafter incorporated by reference.

24. Attachment K of the Agreement is hereby deleted and replaced in its entirety with Attachment K (Rate Setting Methodology) attached hereto and hereinafter incorporated by reference.

25. Attachment N of the Agreement is hereby deleted and replaced in its entirety with Attachment N (Rate Schedule).

26. Attachment Q of the Agreement is hereby deleted in its entirety.

27. Except as expressly modified by this Second Amendment, all terms and conditions of the Agreement shall remain unchanged and in full force and effect. Capitalized terms used but not defined herein shall have the meanings given to them in the Agreement. All references in this Second Amendment to Articles, Sections and Exhibits refer to articles, sections and exhibits of the Agreement.
[Signatures on Next Page]

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IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Second Amendment to Franchise Agreement as of the date first written above.

City of Pacifica
By:

Kevin Woodhouse, City Manager
Recology of the Coast
By:

Salvatore M. Coniglio
Chief Executive Officer
ATTEST: ________________________________ Sarah Coffey, City Clerk APPROVED AS TO FORM _______________________________ Michelle Marchetta Kenyon, City Attorney

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ATTACHMENT K

RATE-SETTING METHODOLOGY
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 1 of 16

1. DEFINITIONS
In addition to the terms defined in Attachment A of this Agreement, the following terms are defined as follows:

1.1 CPI-U
Items, Not Seasonally Adjusted, San Francisco-Oakland-San Jose Metropolitan Area (Series Id: cuura422sa0), compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics.

1.2 CPI-W
Clerical Workers, All Items, Not Seasonally Adjusted, San Francisco-Oakland-San Jose Metropolitan Area (Series Id: cwura422sa0), compiled and published by the U.S.

Department of Labor, Bureau of Labor Statistics.

1.3 PPI - Fuel Pricing Index
Not Seasonally Adjusted, No. 2 Diesel Fuel (Series Id: wpu057303), compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics.

1.4 Motor Vehicle Maintenance and Repair Index
Price Index, All Urban Consumers, Motor Vehicle Maintenance and Repair, Not Seasonally Adjusted, U.S. City Average (Series Id: cuur0000setd), compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics.

1.5 Annual Percentage Change
any of the indices calculated as described below in this paragraph, or (2) six percent (6% or 0.06), whichever is less, with the exception that the six percent (6% or 0.06) cap shall not apply in the case of the PPI Fuel Pricing Index. The Annual Percentage Change in an index is calculated as the Average Index Value for the 12-month period ending April 30 of the then-current Rate Year, minus the Average Index Value for the 12-month period ending April 30 of the prior year, and dividing the result by the Average Index Value for the 12-month period ending April 30 of such prior year. The Annual Percentage Change shall be rounded to the nearest hundredth of one percent (e.g., a calculated value of 0.02636 (2.636%) would be rounded to 0.0264 (2.64%)).

1.6 Average Index Value period means the sum of
the published monthly index values for such period divided by 12 (in the case of indices published monthly) or the sum of the bi-monthly index values for such period divided by 6 (in the case of indices published bi-monthly).

1.7 Organics Processing Fee -ton
fee payable by Contractor during such period for the processing of Organic Materials at the Designated Composting Facility net of any revenues from Compost Product. So long as the Designated Composting Facility is owned by an Affiliate of Contractor, the Organics Processing Fee shall equal $48.77 per ton for Rate Year Fourteen, and shall thereafter increase by the Annual Percentage Change in the CPI-U and changes in regulatory fees pursuant to Sections 3.3.9 and 4.3.9.

1.8 Disposal Fee or City has
entered into an agreement with the operator of the Designated Disposal Facility applicable

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ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 2 of 16
to such period, the per-ton fee payable by Contractor pursuant to such agreement (including the Regulatory Fee Component) for Disposal of Solid Waste at the Designated Disposal Facility; and (ii) otherwise, a fee of $63.11 per Ton, for Rate Year Fourteen, which fee shall thereafter increase by the Annual Percentage Change in the CPI-U (except that the Regulatory Fee Component of such fee shall increase based on actual changes in regulatory fees at the Designated Disposal Facility).

1.9 Transfer Station (Load-Out) Fee Transfer Station Fee for a given period means the highest per-ton fee payable by Contractor during such period for the transfer of Recyclable Materials and Organic Materials at the Designated Transfer Facility to cover costs related to receipt of materials in Collection vehicles and loading such materials into long-haul transfer vehicles. So long as the Designated Transfer Facility is owned by an Affiliate of Contractor, the Transfer Station Fee shall equal $8.41 per ton for Recyclable Materials for Rate Year Fourteen and , and shall thereafter increase by the Annual Percentage Change in the CPI-U and changes in regulatory fees pursuant to Sections 3.3.7, 3.6.1, 4.3.7, and 4.6.1.

1.10 Organics Transport Fee od means the per-ton cost for such period for the transportation of Organic Materials from the Designated Transfer Facility to the Designated Composting Facility. The Contractor does not currently transfer Organic Materials at the Designated Transfer Facility owned by an Affiliate of Contractor.

Contractor and City shall negotiate a reasonable Organic Transport Fee in the event that Contractor is to begin transferring Organic Materials at the Designated Transfer Facility at any point during the term of this Agreement.

1.11 Recyclables Transport Fee -ton cost for
such period for the transportation of Recyclable Materials from the Designated Transfer Facility to the Designated Processing Facility. So long as the Designated Transfer Facility is owned by an Affiliate of Contractor, the Recyclables Transport Fee shall equal $32.02 per ton for Rate Year Fourteen, and shall thereafter increase by the Annual Percentage Change in the CPI-U and changes in regulatory fees pursuant to Sections 3.6.2 and 4.6.2.

1.12 Base Component of such
composting, or disposal and in
Regulatory Fee Component.

1.13 Regulatory Fee Component n fee, that
portion of such fee that represents amounts payable by Contractor for all federal, State, and local fees applied to transfer, transport, processing, composting, or disposal.

If an index is discontinued, the successor index with which it is replaced will be used for subsequent calculations. If no successor index is identified by the Bureau of Labor Statistics, the index published by the Bureau which, in the reasonable opinion of City after conferring with Contractor, is most comparable will be used.

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ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 3 of 16

2. COST COMPONENTS
Both index-based and cost-based Rate adjustments are effected by applying various adjustment factors as described herein to the following categories of costs and other amounts, Cost Components Components

2.1 CBA Labor Costs
incurred by Contractor during such period
by a collective bargaining agreement, including without limitation: (1) wage costs including costs for regular, overtime, holiday, vacation, and sick wages; (2) health and welfare costs; and (3) pension/retirement benefit costs, but excluding Workers Compensation and Payroll Taxes.

2.2 Non-CBA Labor Costs d indirect
supervisory personnel, who are not governed by a collective bargaining agreement, including without limitation: (1) wage and salary costs including costs for regular, overtime, holiday, vacation, and sick wages; (2) health and welfare costs; and (3) pension/retirement benefit costs, but excluding Workers Compensation and Payroll Taxes.

2.3 Workers Compensation
Contractor during such period for workers compensation insurance premiums.

2.4 Payroll Taxes urred by Contractor
during such period for payroll taxes.

2.5 Vehicle-Related Costs
incurred by Contractor during such period associated with maintenance, repair, licensing ehicles and equipment, but excluding Fuel Costs and
Lease Costs.

2.6 Fuel Costs or
during such period for fuel.

2.7 Organics Transfer Station (Load-Out) Costs Organics Transfer Station Costs ven period means the total dollar amount (e.g., number of Tons multiplied by the per-Ton Organics Transfer Station Fee) of costs incurred by Contractor during such period for the transfer of Organic Materials at the Designated Transfer Facility.

2.8 Organics Transport Costs
amount (e.g., number of Tons multiplied by the per-Ton Organics Transport Fee) of costs incurred by Contractor during such period for the transport of Organic Materials from the Designated Transfer Station to the Designated Composting Facility.

2.9 Organics Processing Costs
amount (e.g., number of Tons multiplied by the per-Ton Organics Processing Fee) of fees incurred by Contractor during such period for the processing of Organic Materials at the Designated Composting Facility.

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ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 4 of 16

2.10 Lease Costs Contractor
during such period for leases of facilities, vehicles and equipment (including Containers) leased from Affiliat lease costs of
$153,614 per year for all Rate Years for lease of the vehicle parking and maintenance facility located at 2305 Palmetto Avenue, Pacifica, from Recology Properties Inc.; and, (2) lease costs of $597,611 for new and used vehicles and containers for Rate Year Fourteen (adjusted in subsequent rate years as set forth below).

Lease costs for new and used vehicles and containers described in 2.10(2) above shall be adjusted based on a reconciliation of the actual lease costs and the projected lease costs Application for the most recently completed Rate Year, and shall be adjusted further by any other written, mutually agreed-upon adjustments between City and Contractor. The difference between those amounts, which may be positive or negative, shall be added to or subtra projected lease costs for the forthcoming Rate Year for which is being calculated.

Leases for new vehicles and equipment (including Containers) shall fully amortize Contractor's acquisition cost over a 7-year period, and leases for used vehicles and equipment (including Containers) shall fully amortize Contractor's acquisition cost over a 5-year period, in each case based on the date the vehicles or equipment are put into service, and assuming equal monthly payments over the life of the lease. After the 5- or 7-year amortization period, the lease costs shall not be included in subsequent Rate Years. Lease rates shall be calculated at a rate equal to 1.9% plus the rate (as of the date the asset is put into service by Contractor) for Treasury bonds of constant maturity having the same term as the lease term (e.g., 7-year bonds for a 7-year lease term), as such rate appears on the web site of the Federal Reserve Board (http://www.federalreserve.gov/releases/H15/data.htm).

The specific Lease Costs set forth above (other than the 2305 Palmetto lease) reflect the Capital Requirements
Schedule In connection with the Rate adjustment process for each Cost-Based Adjustment Year the Capital Requirements Schedule shall be adjusted by (1) deleting from the schedule vehicles and equipment no longer in use, and (2) adding to the schedule new and replacement Application for such Cost-Based Adjustment Year. Lease terms and rates for new and replacement vehicles and equipments shall be as set forth in the preceding paragraph unless otherwise agreed by City.

2.11 Start-Up Costs e fixed at $0.00 per Rate Year for Rate Years Two through Eight and shall not be annually adjusted, and shall be zero in any subsequent Rate Year unless the Parties mutually agree to a different amount.

2.12 Other Costs onably incurred by
Contractor during such period in connection with or aris of its obligations under this Agreement, other than (i) costs attributable to the Cost Components set forth in Sections 2.1 through 2.11 above, (ii) Pass-Through Costs, (iv) Calculated Profit, and (v) Non-Allowable Costs.

2.13 Total Annual Cost of Operations
Components set forth in Sections 2.1 through 2.12 above. Total Annual Cost of Operations is used as a basis for determining Calculated Profit.

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ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 5 of 16

2.14 Calculated Profit
amount (e.g.,
the Total Annual Cost of Operations) is calculated by dividing the given amount by the Operating Ratio, and subtracting from the result the given amount.

2.15 Other City Fees
than the Franchise Fee payable by Contractor to City pursuant to Section 10.03 of this Agreement, used for purposes of determining Total Calculated Costs. To the extent that Other City Fees are determined as a percentage of Gross Receipts or other variables (as opposed to being fixed dollar amounts), the Other City Fees Component does not in any way guarantee the actual fees that will be paid by Contractor to City. Other City Fees shall be Pass-Through Costs.

2.16 Calculated Franchise Fee he
Franchise Fee payable by Contractor to City pursuant to Section 10.02 of this Agreement, used for purposes of determining Total Calculated Costs. The Calculated Franchise Fee does not in any way guarantee the actual fee that will be paid by Contractor to City, which is based on Gross Receipts. The Franchise Fee shall be a Pass-Through Cost.

2.17 Recyclables Transfer Station (Load-Out) Costs Recyclables Transfer Station Costs
multiplied by the per-Ton Recyclables Transfer Station Fee) of costs incurred by Contractor during such period for the transfer of Recyclable Materials at the Designated Processing Facility. Recyclables Transfer Station Costs shall be Pass-Through Costs.

2.18 Recyclables Transport Costs
amount (e.g., number of Tons multiplied by the per-Ton Recyclables Transport Fee) of costs incurred by Contractor during such period for the transport of Recyclable Materials from the Designated Transfer Station to the Designated Processing Facility. Recyclables Transport Costs shall be Pass-Through Costs.

2.19 Recyclables Commodities Sales Offset 69,300 for
Rate Years Two through Eight, and any subsequent Rate Years if the Term is extended.

The Recyclables Commodities Sales Offset reflects net revenues from the sale of Recyclables; therefore, the costs of processing Recyclable Materials are not included in the Rate adjustment process.

2.20 Disposal Costs means the total dollar amount (e.g., number of Tons multiplied by the per-Ton Disposal Fee) of fees incurred by Contractor during such period for the disposal of Solid Waste at the Designated Disposal Facility.

Disposal Costs shall be Pass-Through Costs.

2.21 Total Calculated Costs
forth in Sections 2.13 through 2.20 above. Total Calculated Costs is used as a basis for determining the Rate Adjustment Factor under the index-based and cost-based Rate adjustment methodologies. Total Calculated Costs does not reflect or in any way guarantee the Gross Receipts that are to be generated by Rates or retained by Contractor.

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ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 6 of 16

2.22 Pass-Through Costs
Disposal Costs, Recyclables Transfer Station Costs, Recyclables Transport Costs and Other Pass-Through Adjustments.

3. INDEX-BASED RATE ADJUSTMENT METHODOLOGY

3.1 Summary. The index-based Rate adjustment methodology involves the application of the Annual Percentage Change in various price indices to certain categories nt Rate Year; the calculation
of profit; and the calculation of Other City Fees and Franchise Fees. The difference (measured as a percentage) between Total Calculated Costs for the coming Rate Year and Total Calculated Costs for the current Rate Year is the Rate Adjustment Factor. The Rate Adjustment Factor is applied to the current Rates to determine the Rates for the coming Rate Year.

3.2 . With respect to the Cost
Components that comprise Total Annual Cost of Operations, the starting point for the adjustment calculations referred to in Section 3.1 is the value of each Cost Component for tted (i.e., the current year), as
determined in the previous Rate adjustment pro
Application submitted in Rate Year Two to determine the Rates that will take effect on January 1 of Rate Year Three, the Cost Components that make up Total Annual Cost of Operations will be based on a pro forma financial statement prepared by Contractor that served as the basis for adjusting Rates for Rate Year Two, the form of which shall be in accordance with that presented in Attachment P.

3.3 Calculation of Adjustments to Cost Components. Each of the Cost Components will be adjusted as follows:

3.3.1 CBA Labor Costs. CBA Labor Costs for the coming Rate Year shall be determined by adjusting CBA Labor Costs for the current Rate Year in accordance with the procedures described in the then-current collective bargaining agreement.

3.3.2 Non-CBA Labor Costs. Non-CBA Labor Costs for the
coming Rate Year shall equal Non-CBA Labor Costs for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-W.

3.3.3 Workers Compensation. Workers Compensation for the coming Rate Year shall equal Workers Compensation for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-U.

3.3.4 Payroll Taxes. Payroll Taxes for the coming Rate Year shall equal (i) Payroll Taxes for the current Rate Year multiplied by (ii) the sum of CBA Labor Costs and Non-CBA Labor Costs for the coming Rate Year, determined in accordance with Sections 3.3.1 and 3.3.2, respectively, and divided by (iii) the sum of CBA Labor Costs and Non-CBA Labor Costs for the current Rate Year.

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ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 7 of 16

3.3.5 Vehicle-Related Costs. Vehicle-Related Costs for the coming Rate Year shall equal Vehicle-Related Costs for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index.

3.3.6 Fuel Costs. Fuel Costs for the coming Rate Year shall equal the approved Fuel Costs for the current Rate
Year multiplied by one (1) plus the Annual Percentage Change in the PPI - Fuel Pricing Index, plus the difference between the most-recently comple costs and including any other written
mutually agreed-upon adjustments between City and Contractor, with the most-recently completed Rate ctual fuel costs.

3.3.7 Organics Transfer Station (Load-Out) Costs. Organics Transfer Station Costs for the coming Rate Year shall equal (i) the Base Component of the Organics Transfer Station Fee for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-U plus the sum of the then-current (or known future) Regulatory Fees of the Regulatory Fee Component of the Organics Transfer Station Fee, multiplied by (ii) the total Tons of Organic Materials Collected by Contractor for the most-recently completed 12-month period ending April 30.

3.3.8 Organics Transport Costs. Organics Transport Costs for the coming Rate Year shall equal (i) the Base Component of the Organics Transport Fee for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-U plus the sum of the then-current (or known future) Regulatory Fees in the Regulatory Fee Component of the Organics Transport Fee, multiplied by (ii) the total Tons of Organic Materials Collected by Contractor for the most-recently completed 12-month period ending April 30.

3.3.9 Organics Processing Costs. Organics Processing Costs for the coming Rate Year shall equal (i) the Base Component of the Organics Processing Fee for the current Rate Year multiplied, which shall be $48.77 for 2023,by one (1) plus the Annual Percentage Change in the CPI-U plus the sum of the then-current (or known future) Regulatory Fees, multiplied by (ii) the total Tons of Organic Materials Collected by Contractor for the most-recently completed 12-month period ending April 30.

3.3.10 Lease Costs. Lease Costs for the coming Rate Year shall be determined in accordance with Section 2.10 above.

3.3.11 Start-Up Costs. Start-Up Costs for the coming Rate Year shall equal the applicable amount set forth in Section 2.11 above.

3.3.12 Other Costs. Other Costs for the coming Rate Year shall equal Other Costs for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-U.

3.3.13 Total Annual Cost of Operations. Total Annual Cost of Operations for the coming Rate Year shall equal the sum of the amounts calculated in Sections 3.3.1 through 3.3.12 above.

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ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 8 of 16

3.4 Calculated Profit. Calculated Profit for the coming Rate Year will be calculated by dividing the Total Annual Cost of Operations for the coming Rate Year (the value calculated in Section 3.3.13 above) by an operating ratio (0.90) and subtracting from the result the Total Annual Cost of Operations for the coming year.

3.5 City Fees (For Which No Profit Shall be Added)

3.5.1 Franchise Fee. Contractor shall pay to City a Franchise Fee in the amount of $200,000 annually.

3.5.2 Frontierland Park Remediation Fee. The annual
remediation fee for Frontierland Park for the coming Rate Year shall be the fee for the then-current Rate Year multiplied by one plus the Annual Percentage Change for the CPIU or an amount specified by City in accordance with Article 10.

3.5.3 AB 939 Fee. The annual AB 939 fee for the coming Rate Year shall be the fee for the then-current Rate Year multiplied by one plus the Annual Percentage Change for the CPI-U or an amount specified by City in accordance with Article 10.

3.5.4 Franchise Administrative Services Fee. The annual franchise administrative services fee for the coming Rate Year shall be the fee for the then-current Rate Year multiplied by one plus the Annual Percentage Change for the CPIU or an amount specified by City in accordance with Article 10.

3.5.5 City Vehicle Impact Fee. The annual City vehicle impact fee for the coming Rate Year shall be the fee for the then-current Rate Year multiplied by one plus the Annual Percentage Change for the CPI-U or an amount specified by City in accordance with Article 10.

3.5.6 Total City Fees. The Total City Fees for the coming Rate Year shall equal the sum of the costs calculated in items 3.5.1 through 3.5.5 above; provided, however, that any adjustment in any such fee will be a Pass-Through Cost and reflected in the Total City Fees.

3.6 Other Pass-Through Adjustments. Other Pass-Through Adjustments for the coming Rate Year shall equal (i) the sum of the costs calculated in items 3.6.1 through

3.6.5 below, plus (ii) any amounts (actual or reasonably estimated) not included in Total Annual Cost of Operations for which Contractor is entitled to reimbursement through the Rate adjustment mechanism, plus (iii) any other amounts mutually agreed by City and - 3.6.1 Green Waste Adjustment. Rates for Rate Year Two shall include a negative adjustment in the amount of $56,250 to provide for the recapture by City and its residents of the certai
green waste and allocation of costs to its Affiliate, Sea Coast Disposal Company. Such adjustment shall not continue beyond Rate Year Two; and accordingly, for purposes of n submitted in Rate Year Two to determine the Rates that will take effect on January 1 of Rate Year Three, the Green Waste Adjustment shall equal zero.

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming

ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 9 of 16
As a result, the green waste adjustment shall be zero for Rate Years Three through Eight and any extension of the Term.

3.6.2 Recyclables Transfer Station (Load-Out) Costs. Recyclables Transfer Station Costs for the coming Rate Year shall equal (i) the Base Component of the Recyclables Transfer Station Fee for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-U plus the sum of the thencurrent (or known future) Regulatory Fees of the Regulatory Fee Component of the Recyclables Transfer Station Fee, multiplied by (ii) the total Tons of Recyclable Materials Collected by Contractor for the most-recently completed 12-month period ending April 30 determine the Rates that will take effect on March 1 of Rate Year Two, the Recyclables Transfer Station Fee for the current Rate Year shall equal $6.20 per Ton, and the total tons of Recyclable Materials Collected shall be calculated as the Tonnage Collected over the period from September 1, 2010 through October 15, 2010 divided by 1.5 months and multiplied by 12 months).

3.6.3 Recyclables Transport Costs. Recyclables Transport Costs for the coming Rate Year shall equal (i) the Base Component of the Recyclables Transport Fee for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-U plus the sum of the then-current (or known future) Regulatory Fees of the Regulatory Fee Component of the Recyclables Transport Fee, multiplied by (ii) the total Tons of Recyclable Materials Collected by Contractor for the most-recently completed 12-month period ending April 30.

3.6.4 Recyclables Commodities Sales Offset. The Recyclables Commodities Sales Offset for the coming Rate Year shall equal the amount set forth in Section 2.19 above.

3.6.5 Disposal Costs. Disposal Costs for the coming Rate Year shall equal the per-Ton Disposal Fee at the Designated Disposal Facility for the coming Rate Year multiplied by the total Tons of Solid Waste Collected by Contractor for the most-recently completed 12-month period ending April 30.

3.7 Total Calculated Costs. The Total Calculated Costs for the coming Rate Year shall equal the sum of the Total Annual Cost of Operations for the coming Rate Year (as calculated in Section 3.3.13 above), Calculated Profit for the coming Rate Year (as calculated in Section 3.4 above), Total City Fees for the coming Rate Year (as calculated in Section 3.5.6 above), and Other Pass-Through Adjustments for the coming Rate Year (as calculated in Section 3.6 above).

3.8 Adjustment of Rates. The Rate Adjustment Factor for the coming Rate Year shall equal Total Calculated Costs for the coming Rate Year (as calculated in Section 3.7 above) divided by Total Calculated Costs for the current Rate Year, which shall be rounded to the nearest thousandth. Each then-effective Rate, as set forth on Attachment N, shall be multiplied by the Rate Adjustment Factor to calculate the effective Rate for the coming Rate Year. The adjustment to each Rate shall be rounded to the nearest cent.

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming

ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 10 of 16

3.9 Example. The estimated costs for Rate Year Two, which are included in Attachment P (but which are subject to adjustment as provided in Section 11.02.C), present an example of the index-based adjustment method.

4. COST-BASED RATE ADJUSTMENT METHODOLOGY

4.1 Summary. The cost-based Rate adjustment methodology involves:
actual, allowable and allocated Total Calculated Costs from Components that comprise Total Annual Cost of Operations; the application of the Annual Percentage Change in various price indices to those Cost Components to reflect a 2-year increase (i.e., the period from the most recently completed Fiscal Year to the coming Rate Year); the calculation of Calculated Profit for the coming Rate Year based on Total Annual Cost of Operations; the calculation of the Calculated Franchise Fee for the coming Rate Year based on Total Annual Cost of Operations plus Calculated Profit plus Other City Fees and Other Pass-Through Adjustments; and the pass-through of Other City Fees and other actual or reasonably expected changes in costs, if any, to determine Total Calculated Costs for the coming Rate Year. The difference (measured as a percentage) between Total Calculated Costs for the coming Rate Year and Total Billings for the mostrecently completed twelve (12) month period ending April 30 (adjusted to reflect the most recent Rate adjustment) is the Rate Adjustment Factor. The Rate Adjustment Factor is applied to the current Rates to determine the Rates for the coming Rate Year. If the Rate Adjustment Factor is nine percent (9%) or more, then City may divide the Rate adjustment over two Rate Years, with nine percent (9%) of the Rate adjustment occurring in the coming Rate Year, and the remainder of the Rate adjustment being carried over to the following Rate Year and added to the Rate adjustment that would otherwise take effect in such Rate Year and, if necessary, carried over an additional Rate Year so that no adjustment in a given Rate Year exceeds nine percent (9%).

4.2 Determination of
Year shall be der such Fiscal Year,
in accordance with the following steps:

4.2.1 Allocation Across Franchises. First, Contractor shall allocate its costs as set forth in such financial statements among the different jurisdictions to which Contractor provided services during the Fiscal Year. The amount of costs allocated to this Agreement shall be determined for each cost component described in Section 2 using one of the following allocation factors:
(a) Route allocation factor - Percentage of routes attributable to the City compared to total routes operated by Contractor, which shall be calculated as the number of routes Contractor operates to serve the City divided by the total routes Contractor operates to serve all jurisdictions, multiplied by 100. (b) Single-Family Customer allocation factor - Percentage of Single-Family Customers in the City compared to the total Single-Family Customers served by the Contractor, which shall be calculated as the total number of Single-Family

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming

ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 11 of 16
Customers served by Contractor under this Agreement, divided by the total number of Single-Family Customers served by Contractor in all jurisdictions, multiplied by 100. If Contractor expands its services to other areas in addition to Pacifica, Montara, and Granada, the City reserves the right to request that the Single-Family Customer allocation factor be modified to an allocation factor based on the total Customers including residential and commercial Customers.
(c) Tonnage allocation factor Percentage of Tonnage of
Solid Waste, Recyclable Materials and Organic Materials Collected by Contractor from City, compared to total Tonnage of Solid Waste, Recyclable Materials and Organic Materials, respectively, Collected by Contractor, which shall be calculated as the total number of Tons of the applicable materials type Collected by Contractor from City, divided by the total number of Tons of such materials type collected by Contractor from all jurisdictions, multiplied by 100.
(d) Drop box hauls allocation factor Percentage of drop box hauls from City, compared to total hauls, which shall be calculated as the total number of hauls by Contractor from City, divided by the total number of hauls by Contractor from all jurisdictions, multiplied by 100.

The route allocation factor will be applied to all costs with the exception of (i) Other Costs, which shall be allocated using the Single-Family Customer allocation factor, (ii) Disposal Costs, which shall be allocated using the Solid Waste Tonnage allocation factor, (iii) Recyclables Transfer Costs and Recyclables Transport Costs, which shall be allocated using the Recyclables Tonnage allocation factor, and (iv) Organics Transfer Costs, Organics Transport Costs and Organics Processing Costs, which shall be allocated using the Organics Tonnage allocation factor.

The allocation factors shall be calculated using the then-current route information, Customer account data and tonnage information. Based on such allocations, Contractor shall prepare a pro forma financial statement gations
under this Agreement for such Fiscal Year.

4.2.2 Removal of Non-Allowable Costs. Second, Contractor shall adjust such pro forma financial statement by excluding therefrom all Non-Allowable Costs. Non-Allowable Costs
(a) Labor costs e
governed by a collective bargaining agreement resulting from adjustments to wages, health and welfare, and pension/retirement costs that are in excess of the adjustment made in accordance with the procedures described in the then-current collective bargaining agreement.
(b) Payments to directors and/or owners of Contractor, unless paid as reasonable compensation for services actually rendered. (c) Travel expenses and entertainment expenses (above
$5,000 annually in total), unless authorized in advance by City.

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming

ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 12 of 16
(d) Payments, not covered by insurance, to repair damage to property of third parties or City for which Contractor is legally liable. (e) Fines for penalties of any nature.
(f) Liquidated Damages assessed under this Agreement.
(g) Federal or State income taxes.
(h) Charitable or political donations.
(i) Lease costs in excess of those determined in accordance with the preapproved methods described in Section 2.10. (j) Attorney's fees and other expenses incurred by Contractor in any court proceeding in which City and Contractor are adverse Parties, unless Contractor is the prevailing Party in such proceeding.
(k) Attorney's fees and other expenses incurred by Contractor arising from any act or omission of Contractor in violation of this Agreement. (l) Attorneys' fees and other expenses incurred by Contractor in any court proceeding in which Contractor's own negligence, violation of law or regulation, or willful misconduct are in issue and occasion, in whole or in part, the attorneys' fees and expenses claimed.
(m) Attorneys' fees and other expenses incurred by Contractor in any court proceeding in which the legal theory or statute providing a basis of liability against Contractor also provides for separate potential liability for City derived from the action of its citizens or ratepayers (such as in a CERCLA lawsuit) unless Contractor is found not liable in such claims.
(n) Payments to Related Party Entities for products or services in excess of (1) in the case of transactions other than Permitted Related Party Transactions, the cost to the Related Party Entity for those products or services, or (2) in the case of Permitted Related Party Transactions, the applicable amounts set forth in this Agreement for such transactions (such as the Transfer Station Fee, the Organics Transport Fee, the Recyclables Transport Fee, the Organics Processing Fee, and Lease Costs.
(o) Goodwill.
(p)
(q) Depreciation and interest expenses because Contractor plans to lease equipment rather than purchase.
(r) Corporate and regional overhead costs greater than five and seven tenths percent (5.7%) of Total Annual Cost of Operations for the most-recently completed twelve (12) month period ending April 30. This cap on costs applies to the sum

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming

ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 13 of 16
total of the following line item expenses in the pro forma provided in Attachment P:
regional accounting fees, regional management fees, corporate accounting, IT fee, environmental compliance, human resources fee, corporate management, and public relations.
(s) Bad debt write-offs in excess of three percent (3.0%) of Gross Receipts for the most-recently completed twelve (12) month period ending April 30 with the exception that bad debt write-offs in excess of two percent (2.0%) of Gross Receipts shall not be allowable for Rate Year Two.

4.2.3 Allocation to Cost Components. Third, Contractor shall allocate the costs set forth in the adjusted pro forma financial statement prepared pursuant to Section 4.2.2 to each of t
Total Annual Costs of Operations (taking into account the fact that Lease Costs are determined as set forth in Section 2.10).

4.3 Calculation of Adjustments to Cost Components. Calculated Total Cost for the coming Rate Year shall be derived from the Cost Components that make up Operations for the Fiscal Year as determined in Section

4.2.3, in the manner set forth below:

4.3.1 CBA Labor Costs. CBA Labor Costs for the coming Rate Year shall be determined by adjusting Allowable CBA Labor Costs for the previous Fiscal Year determined in accordance with Section 4.2 above adjusted in accordance with the procedures described in the then-current collective bargaining agreement, for the two (2) year period from the previous Fiscal Year to the coming Rate Year. All CBA Labor Costs shall be as determined in accordance with the procedures of this Section 4.3.1 or increased six percent (6%), which ever is less except health and welfare costs shall not be subject to the six percent (6%) cap.

4.3.2 Non-CBA Labor Costs. Non-CBA Labor Costs for the
coming Rate Year shall equal Allowable Non-CBA Labor Costs for the previous Fiscal Year determined in accordance with Section 4.2 above multiplied by (i) one (1) plus the Annual Percentage Change in the CPI-W, and multiplying the result by (ii) the same number used in clause (i).

4.3.3 Workers Compensation. Workers Compensation for the coming Rate Year shall equal Allowable Workers Compensation for previous Fiscal Year determined in accordance with Section 4.2 above multiplied by (i) one (1) plus the Annual Percentage Change in the CPI-U, and multiplying the result by (ii) the same number used in clause (i).

4.3.4 Payroll Taxes. Payroll Taxes for the coming Rate Year shall equal (i) Allowable Payroll Taxes for the previous Fiscal Year determined in accordance with Section 4.2 above, multiplied by (ii) the sum of CBA Labor Costs and Non-CBA Labor Costs for the coming Rate Year, determined in accordance with Sections 4.3.1 and 4.3.2, respectively, and divided by (iii) the sum of CBA Labor Costs and Non-CBA Labor Costs for the previous Fiscal Year.

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming

ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 14 of 16

4.3.5 Vehicle-Related Costs. Vehicle-Related Costs for the coming Rate Year shall equal Allowable Vehicle-Related Costs for the previous Fiscal Year determined in accordance with Section 4.2 above multiplied by (i) one (1) plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index, and multiplying the result by (ii) the same number used in clause (i).

4.3.6 Fuel Costs. Fuel Costs for the coming Rate Year shall equal Allowable Fuel Costs for the previous Fiscal Year determined in accordance with Section

4.2 above multiplied by (i) one (1) plus the Annual Percentage Change in the PPI - Fuel Pricing Index, and multiplying the result by (ii) the same number used in clause (i), adjusted further as set forth below.

The Fuel Costs calculated above shall be adjusted further based on a reconciliation of the actual fuel costs for the most recently completed Rate Year with the projected fuel costs included in Application and including any other written mutually agreed-upon adjustments between City and Contractor, for such Rate year. The difference, which may be positive or negative
is being
calculated.

4.3.7 Organics Transfer Station (Load-Out) Costs. Organics Transfer Station Costs for the coming Rate Year shall equal (i) the Base Component of the Organics Transfer Station Fee for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-U plus the sum of the then-current (or known future) Regulatory Fees of the Regulatory Fee Component of the Organics Transfer Station Fee, multiplied by (ii) the total Tons of Organic Materials Collected by Contractor for the most-recently completed 12-month period ending April 30.

4.3.8 Organics Transport Costs. Organics Transport Costs for the coming Rate Year shall equal (i) the Base Component of the Organics Transport Fee for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-U plus the sum of the then-current (or known future) Regulatory Fees of the Regulatory Fee Component of the Organics Transport Fee, multiplied by (ii) the total Tons of Organic Materials Collected by Contractor for the most-recently completed 12-month period ending April 30.

4.3.9 Organics Processing Costs. Organics Processing Costs for the coming Rate Year shall equal (i) the Base Component of the Organics Processing Fee for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-U plus the sum of the then-current (or known future) Regulatory Fees, multiplied by (ii) the total Tons of Organic Materials Collected by Contractor for the most-recently completed 12-month period ending April 30.

4.3.10 Lease Costs. Lease Costs for the coming Rate Year shall be determined in accordance with Section 2.10 above.

4.3.11 Start-Up Costs. Start-Up Costs for the coming Rate Year shall equal the applicable amount set forth in Section 2.11 above.

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming

ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 15 of 16

4.3.12 Other Costs. Other Costs for the coming Rate Year shall equal Allowable Other Costs for the previous Fiscal Year determined in accordance with Section 4.2 above multiplied by (i) one (1) plus the Annual Percentage Change in the CPIU, and multiplying the result by (ii) the same number used in clause (i).

4.3.13 Total Annual Cost of Operations. Total Annual Cost of Operations for the coming Rate Year shall equal the sum of the amounts calculated in Sections 4.3.1 through 4.3.12 above.

4.4 Calculated Profit. Calculated Profit for the coming Rate Year shall equal Total Annual Cost of Operations for the coming Rate Year (as calculated in Section 4.3.13 above) divided by the Operating Ratio, and subtracting from the result Total Annual Cost of Operations for the coming Rate Year.

4.5 City Fees

4.5.1 Franchise Fee. Contractor shall pay to City a Franchise Fee in the amount of $200,000 annually.

4.5.2 Frontierland Park Remediation Fee. The annual
remediation fee for Frontierland Park for the coming Rate Year shall be the fee for the then-current Rate Year multiplied by one plus the Annual Percentage Change for the CPIU or an amount specified by City in accordance with Article 10.

4.5.3 AB 939 Fee. The annual AB 939 fee for the coming Rate Year shall be the fee for the then-current Rate Year multiplied by one plus the Annual Percentage Change for the CPI-U or an amount specified by City in accordance with Article 10.

4.5.4 Franchise Administrative Services Fee. The annual franchise administrative services fee for the coming Rate Year shall be the fee for the then-current Rate Year multiplied by one plus the Annual Percentage Change for the CPIU or an amount specified by City in accordance with Article 10.

4.5.5 City Vehicle Impact Fee. The annual City vehicle impact fee for the coming Rate Year shall be the fee for the then-current Rate Year multiplied by one plus the Annual Percentage Change for the CPI-U or an amount specified by City in accordance with Article 10.

4.5.6 Total City Fees. The Total City Fees for the coming Rate Year shall equal the sum of the costs calculated in items 4.4.1 through 4.4.5 above; provided, however, that any adjustment in any such fee will be a Pass-Through Cost and reflected in the Total City Fees.

4.6 Other Pass-Through Adjustments. Other Pass-Through Adjustments for the coming Rate Year shall equal (i) the sum of the costs calculated in items 4.6.1 through

4.6.5 below, plus (ii) any amounts (actual or reasonably estimated) not included in Total Annual Cost of Operations for which Contractor is entitled to reimbursement through the

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming

ATTACHMENT K
RATE-SETTING METHODOLOGY (cont.)
Franchise Agreement with Recology of the Coast Attachment K, Rate-Setting Methodology and City of Pacifica Page 16 of 16
Rate adjustment mechanism, plus (iii) any other amounts mutually agreed by City and Other Pass-Through Adjustments

4.6.1 Green Waste Adjustment. The green waste adjustment shall be the amount described in Section 3.6.1.

4.6.2 Recyclables Transfer Station (Load-Out) Costs. Recyclables Transfer Station Costs for the coming Rate Year shall equal (i) the Base Component of the Recyclables Transfer Station Fee for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-U plus the sum of the thencurrent (or known future) Regulatory Fees of the Regulatory Fee Component of the Recyclables Transfer Station Fee, multiplied by (ii) the total Tons of Recyclable Materials Collected by Contractor for the most-recently completed 12-month period ending April 30.

4.6.3 Recyclables Transport Costs. Recyclables Transport Costs for the coming Rate Year shall equal (i) the Base Component of the Recyclables Transport Fee for the current Rate Year multiplied by one (1) plus the Annual Percentage Change in the CPI-U plus the sum of the then-current (or known future) Regulatory Fees of the Regulatory Fee Component of the Recyclables Transport Fee, multiplied by (ii) the total Tons of Recyclable Materials Collected by Contractor for the most-recently completed 12-month period ending April 30.

4.6.4 Recyclables Commodities Sales Offset. The Recyclables Commodities Sales Offset for the coming Rate Year shall equal the amount set forth in Section 2.19 above.

4.6.5 Disposal Costs. Disposal Costs for the coming Rate Year shall equal the per-Ton Disposal Fee at the Designated Disposal Facility for the coming Rate Year multiplied by the total Tons of Solid Waste Collected by Contractor for the most-recently completed 12-month period ending April 30.

4.7 Total Calculated Costs. Total Calculated Costs for the coming Rate Year shall equal the sum of Total Annual Cost of Operations for the coming Rate Year (as calculated in Section 4.3.13 above), Calculated Profit for the coming Rate Year (as calculated in Section 4.4 above), Total City Fees for the coming Rate Year (as calculated in Section 4.5.6 above), and Other Pass-Through Adjustments for the coming Rate Year (as calculated in Section 4.6 above).

4.8 Adjustment of Rates. The Rate Adjustment Factor for the coming Rate Year shall equal Total Calculated Costs for the coming Rate Year (as calculated in Section 4.7 above) divided by Total Billings for the most-recently completed twelve (12) month period ending April 30, which shall be rounded to the nearest thousandth. Each then-effective Rate, as set forth on Attachment N, shall be multiplied by the Rate Adjustment Factor to calculate the effective Rate for the coming Rate Year. The adjustment to each Rate shall be rounded to the nearest cent.

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming Recology of the Coast
City of Pacifica
Rate Application Yr 14 (2023)
Rate Schedule and Commercial Rate Matrices
Attachment N
2023
2022 Adjustment 2023
Rates Factor Rates
Single-Family Residential Service
One time additional 32 gallon bag 9.61 5.80% 10.17 Each additional gallon over 32 per pick up 1.68 5.80% 1.78 Mini can 20 gallons or less (20 gallon can) 27.58 5.80% 29.18 32 gallon Cart 42.57 5.80% 45.04 48 gallon Cart 63.30 5.80% 66.97
64 gallon Cart 84.07 5.80% 88.95
96 gallon Cart (acknowledged by City) 125.56 5.80% 132.84 Extra Recycling Cart 3.92 5.80% 4.15 Extra Organic Materials Cart 3.92 5.80% 4.15
Residential service rates are for solid waste container sizes and include costs for recyclables and organics materials collection service.

Commmercial Solid Waste Bin Collection Service
Commercial container rentals
1 cubic yard 72.15 5.80% 76.33 2 cubic yards 84.13 5.80% 89.01 Commercial container pick up for Solid Waste
1 cubic yard 66.14 5.80% 69.98
2 cubic yards 96.20 5.80% 101.78 Compacted commercial container pick up for Solid Waste 1 cubic yard 97.36 5.80% 103.01
2 cubic yards 167.40 5.80% 177.11
Commercial container pick up for Organics
1 cubic yard 108.19 5.80% 114.47
2 cubic yards 185.97 5.80% 196.76
Commmercial Can/Cart Solid Waste Pick Up
Each additional gallon over 32 2.45 5.80% 2.59
32 gallon Cart 48.08 5.80% 50.87 48 gallon Cart 72.09 5.80% 76.27 64 gallon Cart 91.04 5.80% 96.32
96 gallon Cart 144.20 5.80% 152.56 Commmercial Can/Cart Organics Pick Up 32 gallon Cart 43.27 5.80% 45.78 48 gallon Cart 64.90 5.80% 68.66 64 gallon Cart 86.53 5.80% 91.55
96 gallon Cart 129.79 5.80% 137.32

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming 2023
2022 Adjustment 2023
Rates Factor Rates
Debris Box Solid Waste and Construction and Demolition
Debris Collection
14 yard container (7 days) 610.66 5.80% 646.08 Each additional day 50.15 5.80% 53.06 20 yard container (7 days) 786.74 5.80% 832.37 Each additional day 70.42 5.80% 74.50 Miscellaneous Single-Family Services Service from side or rear of house 7.01 5.80% 7.42 Return pick up charge 12.13 5.80% 12.83 Special call for large items charge by volume charge by volume Extra charge for collection private driveways:
1 to 30 feet no charge no charge
Over 30 feet (for every 10 feet or part thereof) 7.01 5.80% 7.42 Life line rates (available only for 20 gallon Cart Customers) 25.89 5.80% 27.39 Single Family return trip charge (i.e. provision 19.62 5.80% 20.76 of collection service after the regularly scheduled collection day) per event
Miscellaneous Commercial and Multi-Family Services
Recycling services provided to commercial and no charge no charge multi-family customers
Distance charge for MFD and commercial
accounts for container size of 3 cubic yards or less:

Within fifty (50) feet of access by Contractor's collection no charge no charge vehicle
51 feet or more from access by Contractor's no charge no charge collection vehicle
Distance charge for MFD and commercial
accounts for container size larger than 3 cubic yards
or less:
0 to fifty (50) feet of access by Contractor's collection no charge no charge vehicle
51 feet or more from access by Contractor's no charge no charge collection vehicle
Extra pick up charge for MFD and commercial charge by volume charge by volume customers (charge per collection event)
Lock purchase fee (one time charge; replacement at 22.25 5.80% 23.54 no additional charge) Key service (unlock and relock bin). Monthly charge 12.43 5.80% 13.15 based on once per week service
Container steam cleaning (or clean container exchange) 111.23 5.80% 117.68 Bin or debris box Fee to collect contaminated Targeted Recyclable 27.97 5.80% 29.59 Materials or Organic Materials (per container)

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming 1 ATTACHMENT E
SB 1383 RELATED MATTERS

1. Definitions. All terms used herein shall be defined as set forth in Pacifica Municipal Code section 6-5.702
in Pacifica Municipal Code section 6-5.702.JJ shall mean regularly scheduled route to be performed by one collection vehicle providing regularly scheduled Solid Waste, Recyclable material or Mixed Organics collection services (not on-call or Bulky Item), excluding compactor collection services, within the Service Area.

2. Container Colors.

2.1. General Requirement. Contractor shall ensure that each Container that it newly purchases after January 1, 2022 and provides to a Customer for regularly scheduled collection under this Agreement conforms to the following color scheme: Gray Containers for collection of Solid Waste, Blue Containers for collection of Recyclable Materials, and Green Containers for collection of Organic Materials. In addition, Contractor shall ensure that all Containers it uses to provide such services to Customers serviced under the Agreement conform to such color scheme by January 1, 2036.

2.2. Specific Material Types. Paper products and printing and writing paper, each as defined in the SB 1383 Regulations, may be placed in either the Blue Container or the Green Container.

3. Container Labels.

3.1. General Requirement. Contractor shall ensure that each Container (or Container lid) that it newly purchases after January 1, 2022 and provides to a Customer for regularly scheduled collection under this Agreement shall be labeled or imprinted with language and/or graphics that clearly indicates the primary items accepted and the primary items that are Prohibited Container Contaminants for that Container type. Contractor may comply with this section by using model labeling provided by CalRecycle.

4. Route Reviews.

4.1. General Requirement. At least once annually, beginning in 2022, Contractor shall conduct a Route Review for each Hauler Route. For each Route Review of a Hauler Route, Contractor shall inspect a number of Containers equal to 2% of the number of Customers on the Hauler Route (rounded down to the nearest whole number), or 25 Containers, whichever is less. Only one (1) Container per Customer shall be counted towards the above threshold. For example, if an Organic Materials Hauler Route has 2,000 Customers, Contractor would inspect one (1) Organic Materials Container each for 25 Organic Materials Customers on that Hauler Route. Contractor may, but shall not be required to, inspect more than the above number of Containers. Each inspection shall involve observing the contents of the Container (whether by lifting the lid, using a camera, or other method deemed appropriate by Contractor), but shall not require Contractor to

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming 2 disturb the contents or open any bags. Contractor may select the Containers to be inspected at random, or (if mutually agreed with City) by any other method not prohibited under the SB 1383 Regulations. For the avoidance of doubt, Contractor shall not be required to annually inspect every Container on a Hauler Route. Contractor shall include the results of each Route Review in its reports to City, as required by Section 7.

4.2. Notice of Contamination. If Contractor finds Prohibited Container Contaminants in a Container during a Route Review, Contractor shall notify the Customer of the violation in writing. The written notice shall include information regarding the Containers. The notice may be
the time the violation is discovered, and/or be mailed, e-mailed, electronically messaged or delivered personally to the Customer. Contractor may dispose of the contents of any Container found to contain Prohibited Container Contaminants. The notice shall be provided in English and Spanish.

5. Compliance Reviews.

5.1. General Requirement. At least once annually, beginning in 2022, Contractor shall review the records of its Commercial and Multi-Family Customers in City that are subscribed for at least two (2) cubic yards per week of combined Solid Waste, Organic Materials and Recyclable Materials service, to determine whether such Customers are subscribed for Organic Materials collection service or have an applicable waiver. Contractor shall include the results of each compliance review in its reports to City, as required by Section 7.

6. Education & Outreach.

6.1. Prior to February 1, 2022, and annually thereafter, Contractor shall provide the following to all its Organic Materials Customers under the Agreement:

6.1.1. Information on the Organic Materials
separate materials in appropriate containers.

6.1.2. Information on methods for: the prevention of Organic Materials generation, recycling Organic Materials on-site, sending Organic Materials to community composting, and any other local requirements regarding Organic Materials.

6.1.3. Information regarding the methane reduction benefits of reducing the landfill disposal of Organic Materials, and the methods of Organic Materials recovery contemplated by the Agreement.

6.1.4. Information regarding how to recover Organic Materials.

6.1.5. Information related to the public health and safety and environmental impacts associated with the landfill disposal of Organic Materials.

6.2. The above information will be provided, at a minimum, through print and/or electronic media, and may also be provided through workshops, meetings and/or on-site visits.

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming 3 6.3. Educational materials provided pursuant to the above shall be translated into Spanish.

7. Reporting.

7.1. Beginning January 1, 2022, Contractor shall provide the following information to City on at least a quarterly basis:

7.1.1. For information provided by Contractor pursuant to Section 6 above:
(a) Copies of all such information (including flyers, brochures, newsletters, invoice messaging, website and social media postings, mass emails, and other mass electronic messages).
(b) The date the information was disseminated or the direct contact made.

For website and social media postings, this shall be the date posted. (c) To whom the information was disseminated or the direct contact made.

For mass distributions such as mailings or bill inserts, Contractor may provide the type and number of accounts receiving the information, rather than listing each recipient individually.
(d) Notwithstanding any other provision, Contractor shall not be required to track or provide copies of emails, texts, or other electronic communications with individual Customers (e.g. if a CSR answers a customer question).

7.1.2. For Route Reviews and Compliance Reviews:
(a) The date the review was conducted.
(b) The name and title of each person conducting the review. (c) For Route Reviews, (i) a description of each Hauler Route reviewed, Route area, (ii) a list of the account names and addresses where Container inspections were performed, and (iii) the results of such review (i.e. the addresses where any Prohibited Container Contaminants were found).
(d) For Compliance Reviews, the results o
findings as to whether the Customers reviewed are subscribed for Organic Material collection service, have an applicable waiver, or neither), and any relevant evidence supporting such findings (e.g. a spreadsheet based on C
(e) Copies of any educational materials issued pursuant to such reviews (other than notices of Prohibited Container Contaminants, which are covered below).

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming 4 7.1.3. Documentation relating to observed Prohibited Container Contaminants, whether observed during Route Reviews or otherwise:
(a) Copies of the form of each notice issued by Contractor to Customers for Prohibited Container Contaminants, as well as, for each such form, a list of the Customers to which such notice was issued, the date of s, and the reason
for issuance (if the form is used for multiple reasons). (b) The number of times notices were issued to Customers for Prohibited Container Contaminants.
(c) The number of Containers where the contents were disposed due to observation of Prohibited Container Contaminants.
(d) For the avoidance of doubt, the notices of Prohibited Container Contaminants referred to in this subsection include both the notices issued during Route Reviews under Section 4 above, as well as the notices issued by drivers for excessive contamination issued under Section 6.07 of the Agreement.

7.1.4. contamination under the Agreement.

8. Contractor shall assist City in preparation of the Implementation Record described in Section 18995.2 of the SB 1383 regulations by providing non-confidential information and documents that are in the possession of Contractor and as requested by the City.

9. In addition to the foregoing, Contractor shall comply with the requirements for Haulers as set forth in Pacifica Municipal Code section 6-5.708.

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Attachment: Attachment 1: Second Amendment to Recology Agreement [Revision 1] (5531 : Resolution - Adopt Resolution Confirming Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105
Walnut Creek, California 94596
Telephone: 925/977-6950
www.hfh-consultants.com
November 10, 2023
Ms. Lisa Petersen
Director of Public Works
City of Pacifica
170 Santa Maria Avenue
Pacifica, CA 94044-2506
Subject: Review of Recology of the Coast’s 2024 Rate Application Reference Number: S6069
Dear Ms. Petersen:

HF&H Consultants, LLC (HF&H) was retained by the City of Pacifica (City) to assist with a review of Recology of the Coast’s (Recology) request for a 6.00% increase to customer rates, effective January 1, 2024 (Application), submitted to the City. Recology’s Application also includes a roll-over of 3.74% to be applied to rates effective January 1, 2025, as their calculated costs for 2024 have increased a total of 9.74%; however, the franchise agreement with the City caps annual rate increases at 6.00%.

This report presents our findings and recommendations and is organized into four sections:
• Executive Summary;
• Background;
• Summary and Recommendations; and,
• Rate Adjustment Calculation.

EXECUTIVE SUMMARY
Based on our review of the Application performed in accordance with procedures in Section 11.03.A.2 of the agreement between the City and Recology dated February 8, 2010 (Agreement)1 and subsequent amendments, HF&H determined that a total increase of 5.86% to Recology’s total compensation is necessary to compensate Recology for its allowable expenses, effective January 1, 2024. Since the recommended rate increase is less than the 6.00% cap on annual rate adjustments, there will be no rollover to future rate years. Attachment 1 to this report summarizes the recommended 2024 rates, which reflects a 5.86% increase to 2023 rates and will become effective January 1, 2024.

We believe this 5.86% increase is reasonable based on the following:
1 The Agreement was subsequently amended by Resolution No. 67-2016 to extend the term through December 31, 2022 and amended by Resolution No. 69-2022 to include new services required to be provided by SB 1383 and extend the term through December 31, 2032
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• It is arrived at through an independent analysis conducted in accordance with the procedures in the Agreement and all amendments; and,
• Projected costs for 2024 based on the change in various Bay Area consumer price indices (CPI), which have been applied to Recology’s allowable 2023 compensation, in accordance with the Agreement.

The following table summarizes the components of the recommended 5.86% rate adjustment:

Table 1:

Rate Adjustment Components
Operating Expenses:

Labor Costs 1.66%
Vehicle-Related Costs 0.22%
Fuel 2.05%
Organics Processing 0.35%
Lease Costs 0.00%
Other Costs 0.68%
Total Operating Expenses 4.96% a
Profit 0.55% b
Pass-through Costs:

City Fees 0.35%
Recyclable Processing 0.08%
Disposal -0.07%
Total Pass-through Costs 0.36% c
Total Recology Compensation 5.86% =a+b+c

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BACKGROUND
In accordance with Section 11.02 of the Agreement, Recology’s compensation was set for 2023 based on the maximum allowable rates agreed to by the City and Recology. In accordance with Section 11.02.D of the Agreement, subsequent rate adjustments shall be adjusted annually commencing in 2024, through the remaining term of the Agreement, including any extension periods, and shall be determined using one of two methodologies: (1) an index-based adjustment; or, (2) a cost-based adjustment (detailed rate review).

Index-based methodology adjustments are intended to adjust the revenue requirement by increasing or decreasing specific line-item costs by related indices to ensure the total compensation to Recology is reflective of the actual costs to provide services, without completing a full review or audit of Recology’s financials on an annual basis. The cost-based methodology involves a review of Recology’s actual cost of operations and operational statistics (e.g., staffing levels, routes, route hours, customers and their service levels) to determine the actual allowable total annual cost of operations for the most-recently completed rate year to forecast Recology’s allowable costs. The intent of performing the cost-based adjustment is to examine the actual costs to serve the City’s rate payers, instead of relying on Recology’s original proposed costs and takes into consideration the impacts of changes in inflation, deflation, number of customers, and the service levels of each customer.

Table 3 summarizes the methodologies to be used during each year as prescribed in the Agreement. For 2024, Recology submitted a rate application using the index-based methodology. HF&H reviewed Recology’s application and proposed changes resulting in a 5.86% rate increase, effective January 1, 2024.

For 2024, Recology submitted its rate application using the index-based method. This report documents our review of Recology’s rate application, including our findings and recommended rate increase.

Table 3:

Rate Setting Methodology Schedule

SUMMARY AND RECOMMENDATION
Recology’s compensation calculations for 2024 was submitted on October 2, 2023. Recology calculated its compensation requirement for 2024 to be $12,033,223, a 9.74% increase from 2023. Based on our Calendar Year Effective Date Adjustment Method
2023 January 1, 2023 Not Applicable
2024 January 1, 2024 Index-Based
2025 January 1, 2025 Index-Based
2026 January 1, 2026 Cost-Based
2027 January 1, 2027 Index-Based
2028 January 1, 2028 Index-Based
2029 January 1, 2029 Cost-Based
2030 January 1, 2030 Index-Based
2031 January 1, 2031 Index-Based
2032 January 1, 2032 Cost-Based

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review and adjustments (agreed upon by Recology management and the City) to Recology’s Application, HF&H determined a 5.86% increase is necessary to compensate Recology for its allowable expenses for 2024. Table 3 summarizes Recology’s and HF&H’s rate adjustment calculations, a detailed discussion of our review and recommended adjustments follows the limitations sections below.

Table 3:

Summary of Rate Increase
Limitations
Our review was substantially different in scope than an examination in accordance with Generally Accepted Auditing Standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Our conclusions are based on the review of Recology’s projections of its financial results of operations.

Actual results of operations will usually differ from projections because events and circumstances frequently do not occur as expected and the difference may be significant.

Recology HF&H
Rate Proposed Revised
Application Adjustments Application
Total 2024 Expenses a $12,033,223 ($425,295) $11,607,928 2023 Compensation b $10,965,167 $10,965,167
2024 Increase in Expenses c=a-b $1,068,055 $642,760
Rate Adjustment d=c÷b 9.74% 5.86%

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RATE ADJUSTMENT CALCULATION
The following table summarizes HF&H’s proposed adjustments to Recology’s requested 2024 rate adjustment.

Table 4
Adjusted 2024 Rate Application
Recology’s Compensation for Rate Year Ten
HF&H Scope of Work
The City engaged HF&H to perform a review of the Application in accordance with Section 11.03(B) of the Agreement. HF&H staff performed this review based upon procedures agreed upon by the City and HF&H, as documented in our proposal dated September 20, 2023, and upon the Agreement between the City and Recology. These procedures included the following tasks:

Recology HF&H
Rate Proposed Revised
Application Adjustments Application
Operating Expenses:

Labor Costs $4,936,209 $4,936,209
Vehicle-Related Costs $417,276 $417,276
Fuel $846,740 $846,740
Organics Processing $660,137 ($382,766) $277,372
Lease Costs $751,225 $751,225
Other Costs $1,428,604 $1,428,604
Total Operating Expenses $9,040,192 ($382,766) $8,657,426 Profit $1,004,466 ($42,530) $961,936
Pass-through Costs:

City Fees $948,837 $948,837
Recyclable Processing $99,980 $99,980
Disposal $939,748 $939,748
Total Pass-through Costs $1,988,565 $1,988,565
Total 2024 Expenses a $12,033,223 ($425,295) $11,607,928 2023 Compensation b $10,965,167 $10,965,167
2024 Increase in Expenses c=a-b $1,068,055 $642,760
Rate Adjustment d=c÷b 9.74% 5.86%

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Task 1: Preliminary Application Review
1a. Reviewed Recology’s Application for completeness and compliance with the procedures contained in Article 11 and Attachment K of the Agreement.
1b. Reviewed Recology’s Application for mathematical accuracy and logical consistency to determine that the Application was mathematically correct, that the rows and columns of numbers add down and across as intended, and that the stated assumptions were in fact used in the 2024 compensation calculation. Determined that the Application was internally consistent and that any summary schedules agreed to the supporting schedules and worksheets. 1c. Determined what information still needed to be acquired and sent a request for additional information to Recology.

Task 2: Expense Review
2a. Reviewed the calculation of indexed expenses to determine if the proper index was used for each cost-type. For example, determined whether the proper fuel index was used to adjust fuel costs and that the percentage change in the fuel index was properly calculated; determined whether the percentage change in the union wage rates were properly calculated and applied to the proper labor costs, etc.
2b. Reviewed projected organic material processing costs, recyclable material processing costs, and disposal cost, including tonnage assumptions and rate per the Agreement. We determined whether Recology’s application properly used the actual tons processed for the twelve-months ending April 2023 to project processing costs for the forthcoming rate year (in accordance with the Agreement). 2c. Reviewed Recology’s calculation fees owed to the City. 2d. Reviewed Recology’s calculation of allowable profit.

Task 3: Rate Adjustment Factor Calculation
3a. Recalculated the Rate Adjustment Factor in accordance with Section 4.6 of Attachment K.

Findings
Recology’s calculated contractor’s compensation for 2024 was $12,033,223. In accordance with the City’s request, HF&H reviewed Recology’s calculations. We revised the compensation calculations to conform to procedures specified by the Agreement as described below. The final recommended 2024 contractor’s compensation is $11,607,928, a 5.86% increase from 2023. Our findings are based on our review as described below:

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Step 1: Verification of the Mathematical Accuracy
HF&H reviewed Recology’s Application to determine completeness, mathematical accuracy, reasonableness, and logical consistency of the assumptions supporting the projected revenues and expenses. This included:
• Verification that all cost indices used to project expenses conformed to Attachment K of the Agreement.
• Verification of the mathematical accuracy of Recology’s compensation adjustment calculations. • Verification of the consistency and integrity of the spreadsheets housing calculations.

Findings
In an index-based rate adjustment year, Attachment K of the Agreement requires the calculation of the annual percentage change in the Consumer Price Indices (CPI). In the Application, Recology correctly calculated the annual change in CPIs to estimate projected RP3 costs, except the pension costs and the fuel costs. The impact of these calculations is further described in Step 3 below.

Step 2: Determine Current Cost Components
As required by Attachment K of the Agreement, we found that Recology correctly used the City-approved 2023 cost components (e.g., labor-related costs, vehicle-related costs, fuel) as the starting point for calculating their 2024 allowable compensation.

Step 3: Adjust Each Cost Component
Labor-Related Costs
In accordance with Sections 3.3.1, 3.3.2, 3.3.3, and 3.3.4 of Attachment K, labor-related costs shall be calculated by adjusting costs in accordance with the procedures described in the then-current collective bargaining agreement (CBA). Recology properly applied to appropriate percent changesto their allowable labor expenses. No adjustment recommended.

Vehicle-Related Costs (Excluding Fuel)
Section 3.3.5 of Attachment K states that projected vehicle-related costs for 2024 shall equal the allowable vehicle-related costs approved for 2023, multiplied by one plus the percentage change in the Motor Vehicle Related Index, All Urban Consumers, and U.S. City Average. In the Application, Recology projected vehicle-related costs using the correct methodology. No adjustment recommended.

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Fuel Costs
Section 3.3.6 of Attachment K states that projected fuel costs for 2024 shall equal the allowable fuel costs approved for 2023, multiplied by one plus the percentage change in the PPI – Fuel Pricing Index. In the Application, Recology projected fuel costs using the correct methodology. No adjustment recommended.

Organics Processing Costs
Attachment K of the Agreement states that Organics Processing Costs for 2024 shall equal (i) the Base Component of the Organics Processing Fee for the current Rate Year multiplied, which shall be $48.77 for 2023, by one (1) plus the Annual Percentage Change in the CPI-U plus the sum of the then-current (or known future) Regulatory Fees, multiplied by (ii) the total Tons of Organic Materials Collected by Contractor for the most-recently completed 12-month period ending April 30. Recology properly projected Organic Material tons collected but multiplied by a tipping fee of $122.42 instead of the proper $51.44 per ton ($48.77 x 1.0547). The higher tipping fee overstated the allowable 2024 Organic Processing costs by $70.98 per ton ($122.42 - $51.44). Therefore, we recommend a decrease to Recology’s allowable 2024 Organic Materials Processing costs of $382,766.

Lease Costs
Attachment K of the Agreement states that Lease Costs shall be fixed for all years during the Agreement.

Recology properly included $751,225 in Lease Costs, no adjustment recommended.

Other Costs
Attachment K of the Agreement states that projected other costs for the coming rate year shall equal the allowable other costs approved in 20023 multiplied by one plus the percentage change in the CPI-U. In the Application, Recology projected other costs using the correct methodology. No adjustment recommended.

Profit
HF&H found that Recology correctly calculated its allowable profit by applying a 90% operating ratio to its allowable operating costs; however, due to the recommended adjustment to Organic Material Processing costs described above, we recommend a $42,530 decrease to Recology’s allowable 2024 profit.

Pass-through Costs
Attachment K of the Agreement states City fees and other pass-through costs (e.g., disposal and recyclable material processing costs) shall be adjusted by various indices. Recology properly calculated the pass-through costs in accordance with Attachment K; therefore, no adjustment is recommended.

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Step 4: Calculate the Rate Adjustment Factor
Table 4 summarizes Recology’s requested revenue requirement of $12,033,223 to provide current franchised services for 2024 and HF&H’s adjusted revenue requirement, based on our recommended adjustments to the Application described above. We have determined that a total revenue requirement of $11,607,928 (a decrease of $425,295 from Recology’s Application) is appropriate and a recommended

5.86% increase to current rates is consistent with the rate-setting methodology described in Attachment K of the Agreement. Section 11.03(A)(3) of the Agreement states that the rate adjustment factor calculated pursuant to Attachment K may not exceed 6.00%. In the event the calculation results in a calculated increase exceeding 6.00%, the Contractor will accept an increase of no more than 5.00% and the amount exceeding the 6.00% shall be reflected as an “Other Adjustment” in the next scheduled rate adjustment (“roll-over”). Because the 5.86% HF&H adjusted Rate Adjustment Factor is less than 6.00%, there is no roll-over to the next rate year (i.e., 2025). As such, Attachment 1 in this report summarizes the recommended 2024 rates, which reflects a 5.86% increase to 2023 rates and will become effective January 1, 2024.
* * * * *
We would like to express our appreciation to Recology’s management and staff for their assistance. In addition, we express our appreciation to you for your assistance and guidance during the course of the review. Should you have any questions, please contact me directly at 925/977-6957 or rsimonson@hfhconsultants.com.

Sincerely,

HF&H CONSULTANTS, LLC
Rick Simonson
Senior Vice President

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2023 Adjustment 2024
Rates Factor Rates
Single-Family Residential Service
One time additional 32 gallon bag $10.17 5.86% $10.77
Each additional gallon over 32 per pick up $1.78 5.86% $1.88 Mini can 20 gallons or less (20 gallon can) $29.18 5.86% $30.89 32 gallon Cart $45.04 5.86% $47.68
48 gallon Cart $66.97 5.86% $70.89
64 gallon Cart $88.95 5.86% $94.16
96 gallon Cart (acknowledged by City) $132.84 5.86% $140.62 Extra Recycling Cart $4.15 5.86% $4.39
Extra Organic Materials Cart $4.15 5.86% $4.39
Residential service rates are for solid waste container sizes and include costs for recyclables and organics materials collection service.

Commmercial Solid Waste Bin Collection Service
Commercial container rentals
1 cubic yard $76.33 5.86% $80.80
2 cubic yards $89.01 5.86% $94.23
Commercial container pick up for Solid Waste
1 cubic yard $69.98 5.86% $74.08
2 cubic yards $101.78 5.86% $107.74
Compacted commercial container pick up for Solid Waste
1 cubic yard $103.01 5.86% $109.05
2 cubic yards $177.11 5.86% $187.49
Commercial container pick up for Organics
1 cubic yard $114.47 5.86% $121.18
2 cubic yards $196.76 5.86% $208.29
Commmercial Can/Cart Solid Waste Pick Up
Each additional gallon over 32 $2.59 5.86% $2.74
32 gallon Cart $50.87 5.86% $53.85
48 gallon Cart $76.27 5.86% $80.74
64 gallon Cart $96.32 5.86% $101.96
96 gallon Cart $152.56 5.86% $161.50
Commmercial Can/Cart Organics Pick Up
32 gallon Cart $45.78 5.86% $48.46
48 gallon Cart $68.66 5.86% $72.68
64 gallon Cart $91.55 5.86% $96.91
96 gallon Cart $137.32 5.86% $145.37
ATTACHMENT A - 2024 RATES

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2023 Adjustment 2024
Rates Factor Rates
Debris Box Solid Waste and Construction and
Demolition Debris Collection
14 yard container (7 days) $646.08 5.86% $683.94
Each additional day $53.06 5.86% $56.17
20 yard container (7 days) $832.37 5.86% $881.15
Each additional day $74.50 5.86% $78.87
Miscellaneous Single-Family Services
Service from side or rear of house $7.42 5.86% $7.85
Return pick up charge $12.83 5.86% $13.58
Special call for large items charge by charge by
volume volume
Extra charge for collection private driveways:
1 to 30 feet no charge no charge
Over 30 feet (for every 10 feet or part thereof) $7.42 5.86% $7.85 Life line rates (available only for 20 gallon Cart Customers $27.39 5.86% $29.00 Single Family return trip charge (i.e. provision $20.76 5.86% $21.98 of collection service after the regularly
scheduled collection day) per event
Miscellaneous Commercial and Multi-Family
Recycling services provided to commercial and no charge no charge multi-family customers
Distance charge for MFD and commercial
accounts for container size of 3 cubic yards or less:

Within fifty (50) feet of access by Contractor's collection no charge no charge vehicle
51 feet or more from access by Contractor's no charge no charge collection vehicle
Distance charge for MFD and commercial
accounts for container size larger than 3 cubic yards
or less:
0 to fifty (50) feet of access by Contractor's collection no charge no charge vehicle
51 feet or more from access by Contractor's no charge no charge collection vehicle
Extra pick up charge for MFD and commercial charge by charge by customers (charge per collection event) volume volume
Lock purchase fee (one time charge; replacement at $23.54 5.86% $24.92 no additional charge)
Key service (unlock and relock bin). Monthly charge $13.15 5.86% $13.92 based on once per week service
Container steam cleaning (or clean container exchange) $117.68 5.86% $124.58 Bin or debris box
Fee to collect contaminated Targeted Recyclable $29.59 5.86% $31.32 Materials or Organic Materials (per container)
ATTACHMENT A - 2024 RATES

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CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
11/27/2023
1 SUBJECT:

Introduction of an Ordinance initiated by the City of Pacifica, to (a) add a new Article 53, “Emergency Shelters” to the City of Pacifica Zoning Regulations (Chapter 4 of Title 9 of the Pacifica Municipal Code [“PMC”]) to create zoning provisions for approval, construction, and operation of an emergency shelter consistent with the requirements of Senate Bill 2 (SB 2); (b) amend Article 11 “C-2 Community Commercial District” to make an emergency shelter with 20 or fewer occupants a permitted use and an emergency shelter with 21-30 occupants a conditional use; (c) amend Article 14, “O Professional Office District” and Article 15, “C-R Commercial Recreation District” to exclude emergency shelters; (d) update sections of the City of Pacifica’s Zoning Regulations to include updated definitions and terms for “Community Care Facility” and “Family Daycare Home” to be consistent with the requirements and definitions of State law; and (e) make other minor conforming revisions (File No. 2023-013, Text Amendment TA-124-23). Recommended CEQA status: Exempt from CEQA pursuant to Section 15269 (Emergency Projects) and Section 15061(b)(3) (General Rule Exemption). The Planning Commission recommended approval of the Text Amendment by a Vote of 5-0 (with two absences) on November 6, 2023.

RECOMMENDED ACTION:

Move to waive the first reading and introduce by title only “An Ordinance of the City Council of the City of Pacifica to enact a new Article 53 “Emergency Shelters,” to amend Article 11 “C-2 Community Commercial District,” to amend Article 14 “O Professional Office District”, to amend Article 15 “C-R Commercial Recreation District”, and to make various other minor conforming amendments of Chapter 4 Zoning, of Title 9 of the Pacifica Municipal Code (PMC), and finding the Ordinance exempt from the California Environmental Quality Act (CEQA) (File No. 2023- 013; Text Amendment TA-124-23).”
STAFF CONTACT:

Brianne Harkousha, AICP - Senior Planner
(650) 738-7341
[email protected]
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BACKGROUND
Emergency Shelters – SB 2 & Housing Element
California Government Code section 65583 requires the housing element of the City’s general plan to identify one or more zoning districts that allow emergency shelters as a permitted use without a conditional use or other discretionary permit and that are suitable for residential uses.

The California Department of Housing and Community Development (HCD) staff reviewing the City’s 6th Cycle Draft Housing Element, have indicated it cannot find the City’s 6th Cycle Draft Housing Element (2023-2031) in substantial compliance with state law until the appropriate zoning to permit emergency shelters without discretionary approval is demonstrated to be in place (Attachment C). Staff has prepared Text Amendment TA-124-23 to implement the required zoning to permit emergency shelters in compliance with state law. Completion of this effort is a prerequisite to obtain Housing Element certification by HCD.

State law, including Senate Bill (SB) 2 and Assembly Bill (AB) 2339 (adopted in 2022), as codified in Government Code Section 65583(a)(4), requires a thorough analysis of sites when zoning for emergency shelters and requires jurisdictions to provide the following:
• At least one zone suitable for residential uses shall be identified to permit emergency shelters without a conditional use permit or other discretionary action. • Sufficient capacity must be identified to accommodate the need for emergency shelters and at least one year-round emergency shelter. Analysis is required to demonstrate sufficient capacity including calculation methodology based on homeless population and land area and vacant vs nonvacant sites.
• Existing or proposed permit procedures, development and management standards must be objective, and encourage and facilitate the development of or conversion to emergency shelters. Written and objective standards may be applied as specified in the State law, including maximum number of beds, provision of onsite management, length of stay, and security.
• “Emergency shelters” shall include other interim interventions, including but not limited to, navigation centers, bridge housing, and respite or recuperative care. • Emergency shelters shall not be considered “projects” under the California Environmental Quality Act (CEQA). As set forth in Government Code section 65583(a)(4)(D), “[t]he permit processing, development, and management standards [of emergency shelters] shall not be deemed to be discretionary acts within the meaning of the California Environmental Quality Act ….”
Other Text Amendments to Pacifica Municipal Code
Additionally, this proposal includes other text amendments to various sections of the PMC to perform clean-up so they are consistent with the requirements of State law, which include an updated definition for the term “Community Care Facilities” (currently identified in the PMC as “Special Care Facilities”) and “Family Daycare Home” (currently identified in the PMC as “Child Day Care Home”) and updating the maximum number of children permitted to be cared for in a family daycare home. These modifications are further explained in detail in the proposed amendments and analysis section below. These proposed text amendments are necessary for cleanup of the PMC to ensure the City is implementing the current requirements of State law and are relevant to the premise of providing nonmedical or medical residential care, similar to the proposed text amendments for emergency shelters.

Planning Commission Review & Recommendations
On November 6, 2023, the Planning Commission held a duly noticed public hearing and adopted Resolution No. 2023-013 recommending that the City Council approve Text Amendment TA-124-23 with the following amendments (approved 5-0 with two absences):
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• Amend the resolution and all references to the limited term of stay from 180 days to six months to be consistent with State law.
• Amend Section 9-4.5304(H) to include a clarifying sentence to ensure proposed emergency shelters would comply with any State or Federal agency requirements, in particular to ensure compliance with laws intended to protect cultural, paleontological, hazardous materials, and biological resources in light of the fact that construction of emergency shelters may not be subject to CEQA analysis because the City must permit them without further discretionary review.
• Exclude Emergency Shelters from the C-R (Commercial Recreation) and O (Professional Office) zoning districts, which otherwise allow the same uses as the C-2 (Community Commercial) zoning district.
• Under the discretion of the Planning Director, review the potential for adding bicycle parking if consistent with State law.

Staff considered the amendments directed by the Planning Commission and each amendment has been incorporated into the Ordinance and further explained in the staff report (Attachment B), with the exception of the request to add bicycle parking. Staff reviewed State law and determined that bicycle parking is not included in the list of standards that can be imposed on Emergency Shelters and there is no language that would allow us to include bicycle parking. In addition, bicycle parking is not a standard that is imposed on other residential uses per Section 9-4.2822 of the Pacifica Municipal Code. Therefore, staff did not include bicycle parking as a proposed standard for an emergency shelter. However, staff has analyzed that it may be possible to utilize the minimum required interior storage space required in an Emergency Shelter for bicycle parking. In addition, consistent with provisions in the Sharp Park Specific Plan, staff anticipates the comprehensive zoning update that will occur within the near future will add a bicycle parking requirement for residential uses, and staff will revisit the Emergency Shelter ordinance at that time to determine whether a bicycle parking requirement may be applied in the future.

DISCUSSION
Emergency Shelter Ordinance
The proposed amendments would enact a new Article 53 to Chapter 4 (Zoning) of Title 9 (Planning and Zoning) of the PMC concerning emergency shelters in order to comply with requirements of State law in California Government Code section 65583. As described above, the proposed regulations were prepared based on the requirements of State law and HCD guidelines, and adoption of Article 53 is essential for the City to achieve HCD certification of Pacifica’s 6th Cycle Housing Element.

Objective Standards
Definitions
Emergency shelters would provide housing with minimal supportive services that is limited to occupancy of up to six months by persons who are homeless, victims of domestic violence, individuals and households made temporarily homeless due to natural disasters or other persons requiring temporary housing. The text amendment defines emergency shelters to be consistent with subdivision (e) of Section 50801 of the California Health and Safety Code and per AB 2339 expands the definition to include other interim interventions, such as a navigation center, bridge housing, and respite or recuperative care.

Location of emergency shelters
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The City is required to determine a district that allows residential development in which to permit emergency shelters by right. The Planning Commission thoroughly considered and vetted staff’s identification of the C-2 (Community Commercial) District as the most appropriate zoning district for emergency shelter facilities. Supporting analysis of suitable sites to be consistent with State law is included in the Site Suitability Criteria that follows this section. At the direction of the Planning Commission, emergency shelter proposals are excluded from the C-R (Commercial Recreation) and O (Professional Office) Districts.

Development regulations
The text amendment requires emergency shelters to be consistent with the development regulations of the C-2 Zoning District and design standards of off-street parking areas consistent with PMC section 9-4.2817. Modifications to the development regulations may be permitted subject to approval of a use permit to be reviewed and approved by the Planning Commission.

Additionally, the amendment would include updating section 9-4.2818 of Article 28 (Off-Street Parking and Loading) to designate parking for employees or volunteers on duty when the shelter is open to individuals utilizing the emergency shelter. One parking space per employee or volunteer would be required for each emergency shelter facility.

Performance standards
The text amendment includes performance standards as allowed by state law that include emergency shelter management, size of waiting and client intake areas, number of beds or persons per facility, limits on terms of stay, security, storage, lighting, coordination, and compliance with applicable State and local uniform housing and building code requirements.

These standards are considered written objective standards identified as acceptable standards that jurisdictions may impose for emergency shelters under State law. Emergency shelters will be required to provide on-site personnel during hours of operation, have on-site security at all hours when the shelter is operational, designate a liaison staff to coordinate with applicable agencies, and have a written management plan that includes procedures for screening residents to ensure compatibility with services provided at the facility. The facility must have a minimum of 10 square feet of interior waiting and client intake space per bed to allow sufficient space to accommodate the expected number of clients, without overflowing to the exterior of the facility. The facility is required to have sufficient exterior lighting on pedestrian pathways and parking lot areas on the property and storage areas to provide secure areas for personal property adequate for the number of individuals served on a daily basis.

The number of beds or persons per facility is proposed as 20 beds or persons as HCD considered this number to be a generally acceptable amount that was also proposed by other jurisdictions and would be less likely to be considered a constraint on development of emergency shelters. A use permit would be required for 21 and up to a maximum of 30 beds or persons. Lastly, the maximum length of stay by an individual experiencing homelessness is up to six (6) months and the length of time to house an individual experiencing homelessness is consistent with the State’s sample ordinance.

At the direction of the Planning Commission, staff amended Section 9-4.5304(H) Performance Standards of the Emergency Shelter Ordinance to clarify that emergency shelters will be required to comply with applicable State and Federal Agency laws such as biological resources, paleontological resources, wetlands, hazards materials storage and disposal, and other resources.

Compliance review procedures
The text amendment includes required items to be submitted for review of a proposed emergency shelter. The applicant would be required to submit a set of plans and project description explaining the details of the proposal to verify consistency with the development regulations and performance standards sections referenced above. Compliance with these 6 Packet Pg. 106
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regulations and standards would be reviewed and approved by the Planning Director or their designee.

Enforcement
The text amendment includes a section to ensure that the City may take enforcement action consistent with Chapter 2 of Title 1 of the PMC if a violation of Article 53 occurs.

Site Suitability Criteria for Emergency Shelters
Government Code section 65583 as amended (AB 2339) identifies specific criteria that local governments are required to analyze to demonstrate sites with sufficient capacity when identifying zoning designations to accommodate emergency shelters. This requirement is different from the analysis prepared for the Sites Inventory in the Housing Element. The Housing Element Sites Inventory includes specific sites that will be rezoned to allow for a specific density of housing. For emergency shelters, the intent is not to zone specifically for emergency shelters, but rather to allow them by-right as required by law throughout a land use district. The sites analysis below is to demonstrate to the State that there are sufficient sites available for emergency shelter development generally. Individual property owners will make the ultimate determination as to what is developed on the sites. Staff provides a summary of the key criteria below.

1. Designate at least one zoning district that allows emergency shelters by right.

Identification of one or more zoning designations that allow residential uses, including mixed uses, where emergency shelters are allowed as a permitted use without a conditional use or other discretionary permit and that are suitable for residential uses.

The local government may identify additional zoning designations where emergency shelters are permitted with a conditional use permit.

2. Site analysis to document that there is enough land to accommodate the need for emergency shelters. The documentation that there is enough land to accommodate the needs for emergency shelters may be demonstrated by multiplying the number of people experiencing homelessness by 200 square feet, then comparing the required space with the total buildable area of the identified site(s) to demonstrate that the designated sites can accommodate the need for shelters.

3. Sites analysis to ensure designated zoning districts include adequate sites that meet at least one of the following:
a. Vacant sites zoned for residential use.
b. Vacant sites with nonresidential zoning that allows residential development - zoning must allow housing development and the zone must be located near amenities and services, such as transportation, health care, retail, employment, and social services, that serve homeless people. If the zone is not located near amenities and services, the local government must provide free transportation services or offer the services onsite.
c. Nonvacant sites that are suitable for use as a shelter or that can be redeveloped for a shelter in the current Housing Element period. An analysis must demonstrate that the existing use is likely to be discontinued during the planning period, considering the current uses, market conditions, and incentives for shelter development. This is similar to the analysis that many jurisdictions have done for their nonvacant sites inventory in the housing element process. d. Sites owned by the local government – To use this category, jurisdictions must provide substantial evidence that the sites will be made available during the planning period, are suitable for residential use, and are either located near amenities and services, or the local government will provide free transportation or on-site services.
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4. Site analysis for capacity of at least one year-round emergency shelter. Zoning designation or designations that can accommodate at least one year-round emergency shelter.

The discussion that follows provides an analysis of the above-mentioned criteria to support the proposed zoning designation permitting emergency shelters and is based on a suitable sites analysis consistent with State requirements. Site by site data for sites is included as Attachment D and maps prepared to visually reflect each site are included as Attachment E for reference as part of the general analysis of the overall sites that follows. A more detailed analysis demonstrating availability of sites for emergency shelters will be included in the Housing Element as part of the Housing Element update.

Identifying Zoning and Sites Analysis
Staff identified the C-2 (Community Commercial) zoning district1 as the zoning designation to permit emergency shelters by right to satisfy the requirements of State law. The C-2 zoning district allows residential uses subject to approval of a conditional use permit and allows various visitor-serving and commercial uses such as retail stores, offices, personal and business service establishments, and restaurant uses that serve the community. The C-2 zoning district is the most suitable zone to accommodate emergency shelters as the district is located within proximity of transit, amenities and services that could contribute to individuals utilizing an emergency shelter facility. In addition, the sites analysis for sites in the C-2 district indicate sufficient capacity and suitability to accommodate emergency shelters for the existing nonvacant and vacant sites (Attachment D).

The permitted and conditional uses and development regulations of the C-2 District also apply to the Professional Office (O) and Commercial Recreation (C-R) Districts, therefore, emergency shelters would be permitted in these zoning districts as well. At the direction of the Planning Commission, staff revised the Ordinance to amend Article 14, O Professional Office District and Article 15, C-R Commercial Recreation District to exclude emergency shelters from the permitted uses in these zoning districts. Based on staff’s analysis, most sites in the C-R district would not be considered viable sites for purposes of an emergency shelter facility because the sites are located in areas of the coastal zone that may be more vulnerable to erosion, flooding, and sea level rise. The C-R district contains multiple sites within the coastal zone that are either vacant land used to access the beach or hiking trails, developed properties close to the shoreline, or vacant sites that are not located near amenities. Therefore, development of emergency shelters would not likely be viable within most or all properties zoned C-R and further analysis of sites zoned C-R was not performed. Sites in the O district have not been evaluated for the purposes of shelter development.

A brief summary of the nonvacant and vacant sites for the C-2 District are referenced in the discussion below and are summarized in Table 1.
1 Permitted and conditional uses and development regulations for O and C-R refer to the C-2 District and Planning Commission recommended an amendment to exclude emergency shelters from these zoning districts.
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TABLE 1: SUMMARY OF SITES FOR C-2 DISTRICT
C-2

STATE REQUIREMENT FOR LAND

AREA (ACRES)

0.74 NUMBER OF NONVACANT SITES2 15
NUMBER OF VACANT2 3
ACRES OF NONVACANT 2 45
ACRES OF VACANT2 1.85
Sites Analysis – Land area to demonstrate capacity
Every two years, the County of San Mateo Human Services Agency conducts a One Day Homeless Count and Survey with community and county partners. The 2022 count was conducted in the early morning hours of February 24, 2022, and in-depth surveys were collected over the course of the following week. The 2022 count indicated that approximately 161 individuals were experiencing unsheltered homelessness in the City of Pacifica. Based on this data, the City should demonstrate that there is enough land (adequate sites) to accommodate the need for emergency shelters by multiplying 161 people experiencing homelessness by 200 square feet. This would result in approximately 0.74 acres of land area that would be needed to accommodate potential emergency shelters. Staff has identified a combination of vacant and nonvacant sites in the C-2 zoning district that would comply with this land area. Additionally, staff will be proposing a program in the Housing Element to evaluate the capacity for one yearround shelter to ensure the C-2 district can meet the need for one year-round shelter, which shall be implemented within one year of Housing Element adoption.

Sites Analysis – Nonvacant sites
The C-2 zoning district includes approximately 45 acres on 15 parcels, ranging in size from 0.11 acres to 30.32 acres (Attachment D). These sites are developed, many with community commercial uses identified as permitted and conditionally permitted uses in the C-2 zoning district. There is property along Oceana Blvd with a vacant tenant space. There are also multiple developed properties that contain office and commercial uses that have an improvement to land value (ILV) ratio of less than 0.5. ILV was identified as one indicator to be used to determine redevelopment potential. The ILV consists of the value of any improvements on a parcel divided by the value of the land within the parcel boundaries. The ILV ratio indicates which parcels are underutilized from a development perspective, with a lower ILV ratio indicating greater potential for redevelopment because the value of existing improvements (i.e., buildings) is less than the value of the underlying land. Therefore, based on the analysis performed, nonvacant sites identified in the C-2 zoning district are suitable sites for potential development or conversion to accommodate an emergency shelter facility. 2 There are 12 sites excluded from total sites and acreage count because these sites are the core HE sites identified in the City’s sites inventory list of the draft 6th Cycle Housing Element and are not evaluated to accommodate shelter development.
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Sites Analysis – Vacant sites with nonresidential zoning that allows residential development The C-2 zoning district has three vacant parcels ranging in size from 0.13 acres to 1.56 acres.

Of the three, staff has identified one vacant parcel (APN 018-140-040) in the C-2 zoning district that can accommodate an emergency shelter as this parcel is vacant, habitable, and in proximity to public transit, amenities, and services. The parcel is a total of 1.56 acres and can provide capacity for up to 20 beds or persons, by assumptions of the permitted number of beds or persons to be housed per the proposed development standards for an emergency shelter.

Additionally, using the assumption of 200 sq. ft. per person, the City has at least 32,200 sq. ft. (0.74 acres) available for an emergency shelter facility at this single vacant parcel.

Therefore, the City has demonstrated there is enough capacity in the C-2 District to accommodate emergency shelter facilities either on vacant or nonvacant sites.

Small and Large Family Daycare Homes
State law3 provides for the operation of certain family daycare facilities within residential zoning districts and requires that local agencies consider them to residential uses. The maximum number of children to be cared for in a small family daycare home is eight (8) children and a large family daycare home is fourteen (14) children. State law generally requires that a small family daycare be permitted by right (without discretionary approval) and allows a local agency to require a discretionary approval such as a use permit for a large family daycare with more than fourteen (14) children. PMC section 9-4.401 already allows “child day care homes” for up to 12 children as permitted by-right. The proposed text amendment would update the maximum number of children to be cared for in such a home from twelve (12) to fourteen (14) children to be consistent with the numerical limits in state law, which changed to increase the allowable number of children in the respective small and large facility types since the last update to the PMC (Attachment A). The amendment would also change the terminology used to refer to these uses as “family daycare homes” instead of “child day care homes” and update the definition to align with State law.

Community Care Facilities
The proposed amendments would replace “Special care facility” with “Community care facility” in the permitted and conditional uses section, definitions section, and general provisions section of Chapter 4 (Zoning), of Title 9 (Planning of Zoning) to be consistent with current definitions in Section 1502 of the California Health and Safety Code. Community care facility is defined as any facility place, or building that is maintained and operated to provide nonmedical residential care, day treatment, adult daycare, or foster family agency services for children, adults, or children and adults, including, but not limited to, the physically handicapped, mentally impaired, incompetent persons, and abused or neglected children, and includes a variety of facility’s as listed in Attachment F. The amendment would change the term to ensure clarity that the uses covered are those described in state law.
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CONSISTENCY WITH GENERAL PLAN AND LOCAL COASTAL LAND USE PLAN The proposed amendments are consistent with the 2040 General Plan and the 1980 Local Coastal Land Use Plan. The proposed amendments are most relevant to the following overall goals and policies of the General Plan and Local Coastal Land Use Plan:

General Plan
• SA-I-27 Critical Facilities Location. Site critical public facilities including hospital and healthcare facilities, emergency shelters, police and fire stations, and emergency communications facilities outside of the tsunami evacuation zone and 100-year flood plains.
• SA-G-9 Emergency Response. Foster an efficient and coordinated response to emergencies and natural disasters.

Local Coastal Land Use Plan
• (Page C-108) Land use regulations and housing programs shall be established which conserve the character and existing patterns of low- and moderate-income residential development existing in Pacifica’s coastal neighborhoods.

CEQA RECOMMENDATION
Exempt from the California Environmental Quality Act (Act), pursuant to Section 15269 (Emergency Projects) as the specific action to enact Article 53 “Emergency Shelters” and amend Article 11 “C-2 Community Commercial District” is necessary to prevent or mitigate an emergency, and Section 15061(b)(3) (General Rule Exemption) because the amendments to various sections and articles of Chapter 4, “Zoning” of Title 9, “Planning and Zoning” would include changes to definitions to reflect state law that is already in effect and it can be seen with certainty that these definition changes have no possibility to cause a significant effect on the environment.

The specific action to enact a new Article 53, “Emergency Shelters” and amend Article 11 “C-2 Community Commercial District” is necessary to prevent or mitigate an emergency and would be consistent with the requirements of state law. The proposal is for a text amendment of the PMC to allow the temporary housing of individuals experiencing homelessness and may consist of the minor alteration of existing public or private developed areas or development of emergency shelter facilities to provide facilities to shelter individual’s experiencing homelessness. Additionally, minor text amendments of the Pacifica Municipal Code include updates to the definitions and permitted uses sections to be consistent with the State of California’s definitions for “Community care facilities” and “Family Daycare homes”. Other text amendments include updating the definitions, permitted uses, and off-street parking sections of the Pacifica Municipal Code to integrate the development regulations of “Emergency Shelters” and amending Article 14, “O Professional Office District” and Article 15, “C-R Commercial Recreation District” to exclude emergency shelters.

ALTERNATIVE ACTION
The Council may choose to amend the Ordinance or refer the Ordinance to the Planning Commission for further study, however, this latter alternative action may delay the City’s ability to adopt a substantially compliant Housing Element because adoption of the Ordinance should occur before the scheduled January 2024 adoption hearings.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN
The adoption of the Emergency Shelter Ordinance and various other text amendments to be consistent with State law is consistent with the following item(s) in the Council-adopted Strategic Plan and Priority Work Plan for FY 2023-2030:
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• Goal 3: Prioritize protection and development of affordable housing. o Strategy A: Complete the Housing Element Update.
o Strategy C: Prioritize Housing Element program implementation.

FISCAL IMPACT
Proposed emergency shelter applications would be subject to applicable project review fees consistent with Administrative Policy No. 2 to cover staff review of the proposed shelter. Staff does not anticipate additional fiscal impact for proposed emergency shelters.

ORIGINATED BY:

Planning Department
ATTACHMENT LIST:

Attachment A - Draft Ordinance (DOCX)
Attachment B - Planning Commission Staff Report (PDF)
Attachment C - Excerpt of HCD Comment Letter on Draft Housing Element (PDF) Attachment D - Site Analysis identifying sufficient capacity (PDF) Attachment E - Maps identifying sites in proximity to services and amenities (PDF) Attachment F - Section 1502 of Health & Safety Code (PDF) 6 Packet Pg. 112
1 ORDINANCE NO. ___________
AN ORDINANCE TO ENACT A NEW ARTICLE 53 “EMERGENCY SHELTERS,” TO AMEND ARTICLE 11 “C-2 COMMUNITY COMMERCIAL DISTRICT,” TO AMEND ARTICLE 14 “O PROFESSIONAL OFFICE DISTRICT,” TO AMEND ARTICLE 15 “C-R COMMERCIAL RECREATION DISTRICT”, AND TO MAKE VARIOUS OTHER MINOR CONFORMING AMENDMENTS, OF CHAPTER 4 OF TITLE 9 OF THE PACIFICA MUNICIPAL CODE (PMC),

AND FINDING THE TEXT AMENDMENT EXEMPT FROM THE CALIFORNIA

ENVIRONMENTAL QUALITY ACT (CEQA)
(FILE NO. 2023-013; TEXT AMENDMENT TA-124-23)
WHEREAS, California State law requires that all local governments adopt a Housing Element as one of the seven mandated elements of the General Plan; and WHEREAS in 2008, the State legislature passed Senate Bill 2 (California Government Code Section 65583(a)(4)), which requires jurisdictions to identify at least one zone where emergency homeless shelters may be permitted by right with sufficient capacity to accommodate the local need for emergency shelters; and
WHEREAS in 2022, the State legislature passed Assembly Bill 2339 (amended California Code Section 65583 and 65863), which adds additional specificity on how jurisdictions plan for emergency shelters and ensure sufficient capacity for low-income in their housing elements; and WHEREAS, the Planning Commission of the City of Pacifica held a duly noticed public hearing on the proposed amendments contained in Text Amendment TA-124-23 on November 6, 2023, and adopted Resolution No. 2023-012 by a vote of 5-0 (with two absences) to recommend City Council approval; and
WHEREAS, the City Council of the City of Pacifica held a duly noticed public hearing on the proposed ordinance on November 27, 2023, and introduced Ordinance No. ### including modifications to Section 9-4.2315-Special Care Facilities of Article 23 of Chapter 4, “Zoning”, Article 2, “Definitions”, of Chapter 4, “Zoning”, Section 9-4.2818 of Article 28, “Off-street Parking and Loading”, of Chapter 4, “Zoning”, and amend the “Permitted and Conditional Uses” for Sections 9-4.1001, 9-4.601, 9-4.401, 9-4.501, and 9-4.651 of Chapter 4, “Zoning” of Title 9, “Planning and Zoning” of the Pacifica Municipal Code.

NOW, THEREFORE, the City Council of the City of Pacifica does ordain as follows:

Section 1. Recitals. The City Council of the City of Pacifica does hereby find that the above referenced recitals are true and correct and material to the adoption of this Ordinance.

Section 2. Compliance with CEQA. This action is exempt from the California Environmental Quality Act (“CEQA”), pursuant to Section 15269 Emergency Projects and Section 15301 Existing Facilities. The specific action is necessary to prevent or mitigate an emergency. The proposal is for a text amendment of the Pacifica Municipal Code to allow the temporary housing of individuals experiencing homelessness and may consist of the minor alteration of existing public or private developed areas or development of emergency shelter facilities to provide facilities to shelter individual’s experiencing homelessness. Additionally, minor text amendments of the Pacifica Municipal Code include updates to the definitions and permitted uses sections to be consistent with the State of California’s definitions for “Community care facilities” and “Family Daycare homes”. Other text amendments include updating the definitions, permitted uses, and off-street parking sections of the Pacifica Municipal Code to integrate the development regulations of

6.a
Packet Pg. 113 Attachment: Attachment A - Draft Ordinance [Revision 3] (5532 : Introduction of Emergency Shelter Ordinance and other Text Amendments TA- 2 “Emergency Shelters”. These amendments incorporate existing law and do not create any new environmental impacts.

Section 3. Enactment. Article 53, “Emergency Shelters” is hereby added to Chapter 4, “Zoning” of Title 9, “Planning and Zoning” of the Pacifica Municipal Code as follows:
“Article 53. Emergency Shelters
Sec. 9-4.5300 Purpose and intent
The purpose of this article is to provide for the development of emergency shelters in compliance with the requirements of State law including but not limited to California Government Code section 65583.

Sec. 9-4.5301: Definitions
The following definition shall apply to this article:
(a) “Emergency Shelter” shall mean housing with minimal supportive services that is limited to occupancy of up to six (6) months by persons who are homeless, victims of domestic violence, individuals and households made temporarily homeless due to natural disasters (e.g., fires, earthquakes, etc.), or other persons requiring temporary housing. Emergency shelter shall include other interim interventions, including, but not limited to, a navigation center, bridge housing, and respite or recuperative care.

Sec. 9-4.5302: Location of emergency shelters
An emergency shelter shall be a permitted or conditional use allowable in the C-2 (Community Commercial) zoning district, as set forth in Section 9-4.5304 below, subject to the standards identified in this article.

Sec. 9-4.5303: Development regulations
An emergency shelter shall conform to all development regulations of the zoning district in which it is located, except for the off-street parking requirement, which is set forth in Section 9-4.2818.

A modification to a development regulation of the underlying zoning district may be permitted subject to approval of a use permit by the Planning Commission. Design standards for parking areas shall be consistent with Section 9-4.2817.

Sec. 9-4.5304: Performance standards
In addition to the development standards set forth in Section 9-4.5303 above, an emergency shelter shall comply with the standards set forth in this section. In the event of conflict between these standards and the underlying zoning district regulations, the provisions of this section shall apply.

A. Facility Requirements and Operation. Each operator of an emergency shelter shall have a written management plan that uses best practices to address the housing needs of those using the shelter. The written management plan shall address the performance standards in this section.

B. Emergency Shelter Management. Emergency shelters shall provide on-site personnel during hours of operation when individuals who are utilizing the emergency shelter are present. The plan shall include procedures for screening residents to ensure compatibility with services provided at the facility.

C. Waiting and client intake areas. The size of indoor waiting areas shall be sufficient to accommodate the expected number of clients without infringing upon the public right-ofway. Emergency shelters shall provide 10 square feet of interior waiting and client intake space per bed. Waiting and client intake areas may be used for other purposes as needed when client intake is not in progress.

6.a
Packet Pg. 114 Attachment: Attachment A - Draft Ordinance [Revision 3] (5532 : Introduction of Emergency Shelter Ordinance and other Text Amendments TA- 3 D. Number of Beds or Persons per Facility. An emergency shelter with up to 20 persons or beds shall be a permitted use in the zoning district(s) identified in Section 9-4.5302. An emergency shelter with 21 to 30 persons or beds shall be a conditional use requiring approval of a use permit in the zoning district(s) identified in Section 9-4.5302.

E. Limited Terms of Stay. The maximum term of stay for any individual at an emergency shelter is up to six (6) months.

F. Security. The emergency shelter shall have at least one on-site security personnel during all hours when it is in operation.

G. Storage. Each emergency shelter shall provide secure areas for personal property adequate for the number of individuals served on a daily basis. No personal property of facility occupants may be stored outside of an enclosed structure.

H. Compliance. The emergency shelter shall comply with applicable State and local uniform housing and building code requirements, and State and Federal laws (e.g. biological resources, paleontological resources, wetlands, hazardous materials storage and disposal, and other resources) as required.

I. Lighting. The emergency shelter shall provide exterior lighting on pedestrian pathways and parking lot areas on the property. Lighting shall reflect away from residential areas and public streets.

J. Coordination. The operator shall establish a liaison staff to coordinate with City staff and police, school district officials, local businesses, and residents on issues related to the operation of the facility.

K. Other Amenities. The emergency shelter shall include other amenities as may be required that are consistent with the state’s provisions for emergency shelter, as determined by the Planning Director or designee prior to or concurrent with compliance plan review.

Sec. 9-4.5305: Compliance plan review procedures.

Every operator of an emergency shelter shall prepare and submit for review and approval a compliance plan demonstrating how the facility will comply with the requirements of this Article prior to occupancy of the facility.

1. Application. A request for compliance plan review shall be made in writing by the operator of the emergency shelter on a form prescribed by the Planning Director. The application shall be accompanied by a set of plans, a letter of explanation describing the details of the proposed emergency shelter, and an explanation of how the facility would comply with all requirements of this Article. The application for compliance review shall be accompanied by a fee as established by Administrative Policy No. 2.

2. Compliance Determination. The Planning Director or designee shall make a written determination whether the submitted compliance plan sufficiently demonstrates compliance with the requirements of this Article. The determination of the Planning Director is subject to appeal pursuant the provisions of Article 36 of this Chapter.

Sec. 9-4.5306. Enforcement
The City may enforce this article by any means permitted by law, including, but not limited to, those penalty provisions set forth in Chapter 2 of Title 1 of this Code. The City Council may establish fines for violating this article by resolution.” Section 4. Amendment. The Pacifica Municipal Code is hereby amended as follows:

A. Section 9-4.1401 “Permitted and conditional uses and development regulations” of Article 14, “O Professional Office District” of Chapter 4, “Zoning” of Title 9, “Planning and Zoning” of the Pacifica Municipal Code is hereby amended (deletions shown in strikethrough and additions shown in underline) as follows:

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Packet Pg. 115 Attachment: Attachment A - Draft Ordinance [Revision 3] (5532 : Introduction of Emergency Shelter Ordinance and other Text Amendments TA- 4 Sec.9-4.1401. Permitted and conditional uses and development regulations.

The permitted uses in the O District and the development regulations therefor shall be as set forth in Article 11 of this chapter for the C-2 District, except that Emergency Shelters are not a permitted use in the O District.

B. Section 9-4.1501 “ Permitted and conditional uses and development regulations” of Article 15, “C-R Commercial Recreation District” of Chapter 4, “Zoning” of Title 9 “Planning and Zoning” of the Pacifica Municipal Code is hereby amended (deletions shown in strikethrough and additions shown in underline) as follows:

Sec. 9-4.1501. Permitted and conditional uses and development regulations.

The permitted uses in the C-R District and the development regulations therefor shall be as set forth in Article 11 of this chapter for the C-2 District, except that Emergency Shelters are not a permitted use in the C-R District.

C. Article 2, “Definitions” of Chapter 4, “Zoning” of Title 9, “Planning and Zoning” of the Pacifica Municipal Code is hereby amended (deletions shown in strikethrough and additions shown in underline) as follows:

Sec. 9-4.273.1. - Special care facility.
"Special care facility" shall mean a State-authorized certified or licensed family care home, foster home, or group home serving mentally disordered or otherwise handicapped persons, dependent and neglected children, or elderly persons on a twentyfour (24) hour-per-day basis. "Special care facility" shall also include twenty four (24) hour shelters for victims of family violence, homeless persons, or other need categories.

Sec. 9-4.229.1 – Community care facilities.
“Community care facility” shall mean any facility, place, or building that is maintained and operated to provide non-medical residential care, treatment, adult daycare, or foster family agency services, including, but not limited to, the physically handicapped, mentally impaired, incompetent persons, and abused or neglected children, and includes uses listed in Section 1502(a) of the California Health and Safety Code, as may be amended from time to time. A “community care facility” shall not include a “family daycare home.” Sec. 9-4.225. - Child Family daycare homes.
"Child daycare home" shall mean private single-family residence licensed by appropriate State or County agencies for the daycare or instruction of children.

Family Daycare Homes, as defined by the State, are facilities that regularly provide care, protection, and supervision for 14 or fewer children, in the provider’s own home, for periods of less than 24 hours per day and are licensed by the State of California.

D. Section 9-4.401 “Permitted and conditional uses” of Article 4, “R-1 Single-Family Residential District” of Chapter 4, “Zoning” of Title 9, “Planning and Zoning” of the Pacifica Municipal Code is hereby amended (deletions shown in strikethrough and additions shown in underline) as follows:

Sec. 9-4.401. Permitted and conditional uses.
(a) Permitted uses. The following uses shall be permitted in the R-1 District:
(1) One single-family dwelling per lot;
(2) Accessory buildings and uses;

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Packet Pg. 116 Attachment: Attachment A - Draft Ordinance [Revision 3] (5532 : Introduction of Emergency Shelter Ordinance and other Text Amendments TA- 5 (3) Child Family daycare homes for twelve (12) fourteen (14) children or less; (4) Special Community care facilities for six (6) or fewer persons; (5) Manufactured homes consistent with Chapter 14 of Title 8 of this Code; (6) Indoor or outdoor cultivation of cannabis for personal use as an accessory use to a primary dwelling unit, subject to the standards contained in Article 48 of this chapter; and
(7) Accessory dwelling units and junior accessory dwelling units, subject to the standards of Article 4.5.
(b) Conditional uses. Conditional uses allowed in the R-1 District, subject to obtaining a use permit, shall be as follows:
(1) Churches and schools;
(2) Parks and playgrounds;
(3) Landscaped public or private parking lots when adjacent to any C District; (4) Crop and tree farming;
(5) Mobile home parks;
(6) (Repealed by Ord. 825-C.S., eff. November 8, 2017); (7) Bed and breakfast inns with no more than three (3) guest rooms; (8) Clustered housing pursuant to Article 24 of this chapter; and (9) Special Community care facilities for more than six (6) persons consistent with the use criteria described in Section 9-4.2315.

E. Section 9-4.501 “Permitted and conditional uses” of Article 5, “R-2 Two Family Residential District” of Chapter 4, “Zoning” of Title 9, “Planning and Zoning” of the Pacifica Municipal Code is hereby amended (deletions shown in strikethrough and additions shown in underline) as follows:

Sec. 9-4.501. Permitted and conditional uses.
(a) Permitted uses. The following uses shall be permitted in the R-2 District:
(1) Single-family dwellings on parcels less than 5,800 square feet in area; (2) Two-family dwellings;
(3) Accessory buildings and uses;
(4) Child Family daycare homes for twelve (12) fourteen (14) children or less; (5) Special Community care facilities for six (6) or fewer persons; (6) Indoor or outdoor cultivation of cannabis for personal use as an accessory use to a primary dwelling unit, subject to the standards contained in Article 48 of this chapter; and
(7) Accessory dwelling units and junior accessory dwelling units, subject to the standards of Article 4.5.

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Packet Pg. 117 Attachment: Attachment A - Draft Ordinance [Revision 3] (5532 : Introduction of Emergency Shelter Ordinance and other Text Amendments TA- 6 (b) Conditional uses. Conditional uses allowed in the R-2 District, subject to obtaining a use permit, shall be as follows:
(1) Two-family dwelling groups (more than one main building); (2) Child Family daycare homes for more than twelve (12) fourteen (14) children and special community care facilities for more than six (6) persons; (3) Conditional uses allowed in the R-1 District; and
(4) Single-family dwellings on parcels larger than 5,800 square feet in area.

F. Section 9-4.601 “Permitted and conditional uses” of Article 6, “R-3 Multiple-Family Residential District” of Chapter 4, “Zoning” of Title 9, “Planning and Zoning” of the Pacifica Municipal Code is hereby amended (deletions shown in strikethrough and additions shown in underline) as follows:

Sec. 9-4.601. Permitted and conditional uses.
(a) Permitted uses. The following uses shall be permitted in the R-3 District:
(1) Duplexes and multiple-family dwellings;
(2) Accessory buildings and uses;
(3) Child Family daycare homes for twelve (12) fourteen (14) children or less; (4) Special Community care facilities for six (6) or fewer persons; (5) Indoor or outdoor cultivation of cannabis for personal use as an accessory use to a primary dwelling unit, subject to the standards contained in Article 48 of this chapter; and
(6) Accessory dwelling units and junior accessory dwelling units, subject to the standards of Article 4.5.
(b) Conditional uses. Conditional uses allowed in the R-3 District, subject to obtaining a use permit, shall be as follows:
(1) Single-family dwellings;
(2) Rooming houses and boardinghouses;
(3) Lodges, clubs, clubrooms, and dormitories;
(4) (Repealed by § V (B), Ord. 491-C.S., eff. October 28, 1987) (5) Conditional uses as allowed in the R-1 and R-2 Districts; and (6) Coastal access.
(7) Family daycare homes for more than fourteen (14) children and community care facilities for more than six (6) persons;
G. Section 9-4.651 “Permitted and conditional uses” of Article 6.5, “R-3/L.D. Multiple-Family Density Residential District” of Chapter 4, “Zoning” of Title 9, “Planning and Zoning” of the Pacifica Municipal Code is hereby amended (deletions shown in strikethrough and additions shown in underline) as follows:

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Packet Pg. 118 Attachment: Attachment A - Draft Ordinance [Revision 3] (5532 : Introduction of Emergency Shelter Ordinance and other Text Amendments TA- 7 Sec. 9-4.651. Permitted and conditional uses.
(a) Permitted uses. The following uses shall be permitted in the R-3/L.D. District:
(1) All uses permitted in the R-3 District.
(b) Conditional uses. Conditional uses allowed in the R-3/L.D. District, subject to obtaining a use permit, shall be as follows:
(1) Single-family dwellings;
(2) Clustered housing pursuant to Article 24 of this chapter; (3) Child Family daycare homes for more than twelve (12) fourteen (14) children and special community care facilities homes, for more than six (6) persons; (4) Parks and playgrounds.

H. Section 9-4.1101 “Permitted and conditional uses” of Article 11, “C-2 Community Commercial District” of Chapter 4, “Zoning” of Title 9, “Planning and Zoning” of the Pacifica Municipal Code is hereby amended (deletions shown in strikethrough and additions shown in underline) as follows:

Sec. 9-4.1101. Permitted and conditional uses.
(a) Permitted uses. The following uses shall be permitted in the C-2 District:
(1) Retail stores and shops;
(2) Personal and business service establishments, including financial institutions; (3) Offices;
(4) Newspaper, printing, and lithography plants not exceeding five thousand (5,000) square feet in net usable area;
(5) Retail restaurants, fast food restaurants, restaurants and bars; (6) Household appliance and furniture sales and service in conjunction with sales; (7) Veterinary hospitals and clinics;
(8) In the Coastal Zone, visitor-serving commercial uses, as defined in Section 9-

4.4302(av) of Article 43 of this chapter; and
(9) Accessory dwelling units and junior accessory dwelling units, subject to the standards of Article 4.5.
(10) Emergency Shelters for twenty (20) or less persons or beds, subject to the standards of Article 53.
(b) Conditional uses. Conditional uses allowed in the C-2 District, subject to obtaining a use permit, shall be as follows:
(1) Social halls, clubs, theaters, and nightclubs;
(2) Pet care and sales establishments, including boarding and grooming; (3) Vehicle and boat sales and service in conjunction with sales; (4) Plumbing, heating, electrical, and appliance repair, service, and supply shops;

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Packet Pg. 119 Attachment: Attachment A - Draft Ordinance [Revision 3] (5532 : Introduction of Emergency Shelter Ordinance and other Text Amendments TA- 8 (5) Specialty auto service, such as oil changing facilities, not in conjunction with service stations;
(6) Car washes;
(7) Health/fitness clubs;
(8) All uses allowed as either a permitted or conditional use in the C-1 District and which are not listed as permitted uses in the C-2 District; and (9) Firearms sales, subject to the provisions of Section 9-4.2316. (10) Marijuana testing operation, subject to the provisions of Article 48 of this chapter, including without limitation any restriction on the establishment of such use in certain locations.
(11) Emergency Shelters for more than twenty (20) persons or beds but not more than 30, subject to the standards of Article 53.

I. Section 9-4.2315 “Special care facilities” of Article 23, “General Provision and Exceptions” of Chapter 4, “Zoning” of Title 9, “Planning and Zoning” of the Pacifica Municipal Code is hereby amended (deletions shown in strikethrough and additions shown in underline) as follows:

Sec. 9-4.2315. - Special Community care facilities.
(a) Purpose. This section is intended to regulate special community care facilities, as defined in Section 9-4.229.1, with more than six residents not including staff. Special Community care facilities serving six or fewer residents not including staff are permitted in all zoning districts that permit single-family residences and shall not be required to meet any requirement of this section. Any lot developed or used pursuant to this section shall not thereafter be used for any purpose other than a special community care facility unless and until the Planning Director City Planner has certified in writing that the alternate use satisfies all applicable and then existing land use regulations pertaining to the classification of the lot.
(b) Special Community care facilities criteria. When the proposed use meets the requirements of this chapter including the conditions set forth in Section 9-4.3303 and all the following criteria, residential community care facilities serving more than six persons in addition to caregivers may be permitted by approval of a use permit in all residential and commercial zoning districts, as identified in this chapter. (1) There are no other special community care facilities serving more than six persons not including staff within 500 radial feet of the perimeter of the subject property. If proposed facilities are located within the 500-foot minimum horizontal distance, the Planning Commission may determine facility overconcentration if impacts in the area are considered significant.
(2) The proposed use shall be conducted in a manner and with facilities that comply with Federal, State and local law and such compliance will be a condition of all use permits issued pursuant to this section. The operator of the facility shall give written notice of any suspension or revocation of its State license to the City Manager within seven (7) days of said suspension or revocation.
(3) Special Community care facilities shall include a common dining area as well as common living areas and amenities to facilitate program activities. (4) There shall be a minimum of 100 square feet of usable open space area per resident, not including staff. Indoor common living areas and amenities to facilitate program activities may be counted towards this requirement up to a maximum of seventy-five (75%) percent of the total open space area required.

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Packet Pg. 120 Attachment: Attachment A - Draft Ordinance [Revision 3] (5532 : Introduction of Emergency Shelter Ordinance and other Text Amendments TA- 9 (5) Outdoor areas shall be designed to provide amenities and recreational areas compatible with the needs of the residents, such as pathways and sitting areas, gardens, putting greens and similar recreation areas.
(6) Where additional stories prohibit easy access to open space areas on the ground floor, open roof decks, balconies or lanais shall be provided in an amount, dimension, area and location as determined to be adequate by the Planning Commission. (c) Hearings and notices required. Special Community care facilities serving more than six residents not including staff, may be permitted in those zoning districts enumerated in this chapter upon securing a use permit and complying with all hearing and notice requirements as set forth in Article 33 of this chapter, except as otherwise provided in this section.

J. Subsection (a) of Sec. 9-4.2818 “Number of parking spaces required” of Article 28, “OffStreet Parking and Loading”, of Chapter 4 “Zoning”, of Title 9 “Planning and Zoning” of the Pacifica Municipal Code is hereby amended (deletions shown in strikethrough and additions shown in underline) as follows:

Sec. 9-4.2818. Number of parking spaces required.

The number of off-street parking spaces required for the uses set forth in this section shall be as follows:

Use Requirements
(a) Residential.
(1) Single-family and two-family Two (2) garage spaces per unit.

In addition, where adequate
driveway length to
accommodate a parked car
does not exist or on-street
parking is unavailable, a
minimum of one guest parking
space per unit shall be
provided.
(2) Multi-family, including studio,
townhouses and condominiums
One space for each studio, one
and one-half (1 ½) spaces for
each one-bedroom unit, and
two (2) spaces for each unit of
two (2) or more bedrooms. In
addition, one space to
accommodate guest parking
shall be provided for each four
(4) units. When the
determination of the number of
guest parking spaces results in
the requirement of a fractional
space, the fraction shall be
disregarded. At least one of the
required off-street parking
spaces per unit shall be in a
garage or carport.
(3) Residential projects within the Hillside
Preservation District
Spaces shall be provided as
required by Section 9-4.2258 of
Article 22.5 of this chapter.
(4) Mobile home parks Two (2) spaces for each site
(parking may be tandem). For

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Packet Pg. 121 Attachment: Attachment A - Draft Ordinance [Revision 3] (5532 : Introduction of Emergency Shelter Ordinance and other Text Amendments TA- 10 associated guest parking and
recreation facilities, one space
for each five (5) sites.
(5) Dwelling units especially designed for,
and to be occupied by, persons sixty-two (62)
years of age or more
One space for every two (2)
units. In addition, one space to
accommodate guest parking
shall be provided for each five
(5) units.
(6) Lodging houses and boardinghouses One garage space for each two (2) lodging rooms, plus garage
space for the owner or
manager.
(7) Private clubs and lodges with sleeping
facilities
One parking space for each two
(2) lodging rooms, plus parking
spaces equal in number to
twenty (20) percent of the
capacity, in persons, for the
remainder of the building.
(8) Residential projects with affordable
units
Projects which provide
affordable units in accordance
with the density bonus program
as set forth in Article 41 of this
chapter, which projects have
ten (10) or more required
spaces, may provide up to onethird (⅓) of the total required parking spaces for compact
cars.
(9) Accessory dwelling units

(10) Emergency Shelter
Spaces shall be provided as
required by Article 4.5 of this
chapter.

One (1) space per employee or
volunteer on duty when the
shelter is open to individuals
utilizing the emergency shelter.

Section 5. Severability. If any section, subsection, sentence, clause or phase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentence, clauses or phrases be declared unconstitutional.

Section 6. Publication. The City Clerk is hereby ordered and directed to certify to the passage of this Ordinance by the City Council of the City of Pacifica, California, and cause the same to be published in accordance with State law.

Section 7. Coastal Act Compliance. The City Council hereby certifies that the zoning text amendment described herein is intended to be carried out in a manner fully in conformity with the California Coastal Act (Public Resources Code 30000 et seq.). The zoning text amendment

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Packet Pg. 122 Attachment: Attachment A - Draft Ordinance [Revision 3] (5532 : Introduction of Emergency Shelter Ordinance and other Text Amendments TA- 11 described herein shall take effect for areas within the Coastal Zone immediately upon certification by the California Coastal Commission (“CCC”) if approved by the CCC as submitted. If the CCC certifies the zoning text amendment subject to modifications, final approval by the City Council shall be required prior to the zoning text amendment taking effect. The Planning Commission shall provide a recommendation to the City Council regarding any modifications proposed by the CCC prior to final City Council consideration and approval.

Section 8. Effective Date. This Ordinance shall be in full force and effective thirty (30) days after its adoption and shall be published and posted as required by law. For areas within the Coastal Zone, this Ordinance shall take effect as provided in Section 7. * * * * *

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Packet Pg. 123 Attachment: Attachment A - Draft Ordinance [Revision 3] (5532 : Introduction of Emergency Shelter Ordinance and other Text Amendments TA- 12 PASSED AND ADOPTED this 11th day of December, 2023 by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
____________________________
Tygarjas Bigstyck, Mayor
ATTEST: APPROVED AS TO FORM:
____________________________ ____________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney

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PLANNING COMMISSION
Staff Report
Scenic Pacifica
Incorporated Nov. 22, 1957
DATE: November 6, 2023 FILE: TA-124-23
ITEM: 1
SUBJECT: File No. 2023-013 – Text Amendment TA-124-23, initiated by the City of Pacifica, to add a new Article 53, “Emergency Shelters” to the City of Pacifica Zoning Regulations (Chapter 4 of Title 9 of the Pacifica Municipal Code [“PMC”]) to create zoning provisions for approval, construction, and operation of an emergency shelter consistent with the requirements of State law, to amend Article 11, “C-2 Community Commercial District” to make an emergency shelter with 20 or fewer occupants a permitted use and an emergency shelter with 21-30 occupants a conditional use, to update sections of the City of Pacifica’s Zoning Regulations to include updated definitions for “Community Care Facility” and “Family Daycare Home” to be consistent with the requirements and definitions of State law, and make other minor conforming revisions.

PUBLIC NOTICE: Notice of Public Hearing was published in the San Mateo Daily Journal on October 27, 2023
PROJECT LOCATION: Citywide
RECOMMENDED CEQA STATUS: Exempt from the California Environmental Quality Act (CEQA), pursuant to Section 15269 (Emergency Projects) of the CEQA Guidelines as the adoption of Article 53 “Emergency Shelters” and amendments to Article 11 “C-2 Community Commercial District” are necessary to prevent or mitigate an emergency, and Section 15061(b)(3) (General Rule Exemption) because the amendments to various sections and articles of Chapter 4, “Zoning” of Title 9, “Planning and Zoning,” including changes to definitions and other minor conforming revisions, reflect state law that is already in effect, and it can be seen with certainty that these changes have no possibility to cause a significant effect on the environment.

REQUIRED APPROVALS: Government Code section 65853 et seq. requires the Planning Commission to conduct a public hearing and provide a written recommendation to the City Council on any new zoning ordinance, amendment to a zoning ordinance, or change in a property’s zoning designation. Pacifica Municipal Code Section (PMC) section 9-4.3501 et seq. similarly requires the Planning Commission to conduct a public hearing and to provide a recommendation by resolution to the City Council on any zoning text amendment or change in a property’s zoning designation.

The City Council, as the legislative body of the City, must conduct a public hearing and enact by ordinance any zoning text amendment or change in a property’s zoning designation before it may take effect, with few exceptions. Public Resources Code Section 30514 additionally 1 Packet Pg. 4

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provides that any ordinance enacted by the City Council which amends the City’s zoning standards or zoning map shall not take effect within the Coastal Zone until the California Coastal Commission certifies an amendment to the City’s Local Coastal Program.

RECOMMENDED ACTION: Adopt the attached Resolution initiating the Text Amendment and recommending approval to City Council (Attachment A).

PREPARED BY: Brianne Harkousha, AICP, Senior Planner
1 Packet Pg. 5

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Background
Emergency Shelters – SB 2 & Housing Element
California Government Code section 65583 requires the housing element of the general plan to identify one or more zoning districts that allow emergency shelters as a permitted use without a conditional use or other discretionary permit and that are suitable for residential uses. The California Department of Housing and Community Development (HCD) staff reviewing the City’s 6 th Cycle Draft Housing Element, have indicated it cannot find the City’s 6th Cycle Draft Housing Element (2023-2031) in substantial compliance with state law until the appropriate zoning to permit emergency shelters without discretionary approval is demonstrated to be in place (Attachment B). Staff has prepared this text amendment (TA-124-23) to implement the required zoning to permit emergency shelters in compliance with state law. Completion of this effort is a prerequisite to obtain Housing Element certification by HCD.

Adopted in 2022, Assembly Bill (AB) 2339 amends Government Code Section 65583(a)(4) and requires a thorough analysis of sites when zoning for emergency shelters. Generally, SB 2 and AB 2339 amend housing element law regarding planning and approval for emergency shelters and require jurisdictions to provide the following:
• At least one zone suitable for residential uses shall be identified to permit emergency shelters without a conditional use permit or other discretionary action. • Sufficient capacity must be identified to accommodate the need for emergency shelters and at least one year-round emergency shelter. Analysis is required to demonstrate sufficient capacity including calculation methodology based on homeless population and land area and vacant vs nonvacant sites.
• Existing or proposed permit procedures, development and management standards must be objective, and encourage and facilitate the development of or conversion to emergency shelters. Written and objective standards may be applied as specified in the State law, including maximum number of beds, provision of onsite management, length of stay, and security.
• “Emergency shelters” shall include other interim interventions, including but not limited to, navigation centers, bridge housing, and respite or recuperative care.

Other Text Amendments to Pacifica Municipal Code
Additionally, this proposal includes other text amendments to various sections of the PMC to perform clean-up so they are consistent with the requirements of State law, which include an updated definition for the term “Community Care Facilities” (currently identified in the PMC as “Special Care Facilities”) and “Family Daycare Home” (currently identified in the PMC as “Child Day Care Home”) and updating the maximum number of children permitted to be cared for in a family daycare home. These modifications are further explained in detail in the proposed amendments and analysis section below. These proposed text amendments are necessary for clean up of the PMC to ensure the City is implementing the current requirements of State law and are relevant to the premise of providing nonmedical or medical residential care, similar to the proposed text amendments for emergency shelters.
1 Packet Pg. 6

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Proposed Amendments and Analysis
Emergency Shelters
The proposed amendments would enact a new Article 53 to Chapter 4 (Zoning) of Title 9 (Planning and Zoning) of the PMC concerning emergency shelters in order to comply with requirements of State law under California Government Code section 65583. As described above, the proposed regulations were prepared based on the requirements of State law and adoption of Article 53 is essential for the City to achieve HCD certification of Pacifica’s 6 th Cycle
Housing Element.

Location of emergency shelters
Staff has identified the C-2 (Community Commercial) District as the most appropriate zoning district for emergency shelter facilities. Supporting analysis of suitable sites to be consistent with State law are included in the Site Suitability Criteria that follows this section.

Development regulations
The text amendment requires emergency shelters to be consistent with the development regulations of the C-2 Zoning District and design standards of existing parking areas consistent with PMC Section 9-4.2817. Any modifications to the development regulations shall be permitted subject to approval of a use permit to be reviewed and approved by the Planning Commission. Additionally, the amendment would include updating Section 9-4.2818 of Article 28 (Off-Street Parking and Loading) to designate parking for employees or volunteers on duty when the shelter is open to individuals utilizing the emergency shelter. One parking space per employee or volunteer would be required for each emergency shelter facility.

Performance standards
The text amendment includes performance standards that include emergency shelter management, size of waiting and client intake areas, number of beds or persons per facility, limits on terms of stay, security, storage, lighting, coordination, and compliance with applicable State and local uniform housing and building code requirements. These standards are considered written objective standards identified as acceptable standards that jurisdictions may impose for emergency shelters. Emergency shelters will be required to provide on-site personnel during hours of operation, have on-site security at all hours when the shelter is operational, designate a liaison staff to coordinate with applicable agencies, and have a written management plan that includes procedures for screening residents to ensure compatibility with services provided at the facility. The facility must have a minimum of 10 square feet of interior waiting and client intake space per bed to allow sufficient space to accommodate the expected number of clients, without overflowing to the exterior of the facility. The facility is required to 1 Packet Pg. 7

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have sufficient exterior lighting on pedestrian pathways and parking lot areas on the property and storage areas to provide secure areas for personal property adequate for the number of individuals served on a daily basis. The number of beds or persons per facility is proposed as 20 beds or persons as HCD considered this number to be a generally acceptable amount that was also proposed by other jurisdictions and would be less likely to be considered a constraint on development of emergency shelters. A use permit would be required for 21 and up to a maximum of 30 beds or persons. Lastly, the maximum length of stay by an individual experiencing homelessness is up to 180 days within any 365-day period and the length of time to house an individual experiencing homelessness is considered acceptable as it was identified in the State’s sample ordinance.

Compliance review procedures
The text amendment includes required items to be submitted for review of a proposed emergency shelter. The applicant would be required to submit a set of plans and project description explaining the details of the proposal to verify consistency with the development regulations and performance standards sections referenced above. Compliance with these regulations and standards would be reviewed and approved by the Planning Director or their designee.

Enforcement
The text amendment includes a section to ensure that the City may take enforcement action consistent with Chapter 2 of Title 1 of the PMC if a violation of Article 53 occurs.

Site Suitability Criteria
Government Code section 65583 as amended (AB 2339) identifies specific criteria that local governments are required to analyze to demonstrate sites with sufficient capacity when identifying zoning designations to accommodate emergency shelters. Staff provides a summary of the key criteria below.

1. Designate at least one zoning district that allows emergency shelters by right.

The local government may identify additional zoning designations where emergency shelters are permitted with a conditional use permit.

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amenities and services, the local government must provide free transportation services or offer the services onsite.
c. Nonvacant sites that are suitable for use as a shelter or that can be redeveloped for a shelter in the current Housing Element period. An analysis must demonstrate that the existing use is likely to be discontinued during the planning period, considering the current uses, market conditions, and incentives for shelter development. This is similar to the analysis that many jurisdictions have done for their nonvacant sites inventory in the housing element process. d. Sites owned by the local government – To use this category, jurisdictions must provide substantial evidence that the sites will be made available during the planning period, are suitable for residential use, and are either located near amenities and services, or the local government will provide free transportation or on-site services.

4. Site analysis for capacity of at least one year-round emergency shelter. Zoning designation or designations that can accommodate at least one year-round emergency shelter.

The discussion that follows provides an analysis of the above-mentioned criteria to support the proposed zoning designation permitting emergency shelters and is based on a suitable sites analysis consistent with State requirements. Site by site data for sites is included as Attachment C and maps prepared to visually reflect each site are included as Attachment D for reference as part of the general analysis of the overall sites that follows. A more detailed analysis of site specific review will be included in the Housing Element as part of the Housing Element update.

The permitted and conditional uses and development regulations of the C-2 District also apply to the Professional Office (O) and Commercial Recreation (C-R) Districts, therefore, emergency shelters would be permitted in these zoning districts as well. However, most sites in the C-R district would not be considered viable sites for purposes of an emergency shelter facility because the sites are located in areas of the coastal zone that may be more vulnerable to erosion, flooding, and sea level rise. The C-R district contains multiple sites within the coastal zone that are either vacant land used to access the beach or hiking trails, developed properties close to the shoreline, or vacant sites that are not located near amenities. Therefore, development of emergency shelters would not likely be viable within most or all properties zoned C-R and further analysis of sites zoned C-R was not performed. Sites in the O district have not been evaluated for the purposes of shelter development because the sites analysis for 1 Permitted and conditional uses and development regulations for O and C-R refer to the C-2 District, therefore, emergency shelters will be permitted in these districts as well. 1 Packet Pg. 9

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sites in the C-2 district indicate sufficient capacity and suitability to accommodate emergency shelters for the existing nonvacant and vacant sites (Attachment C). A brief summary of the nonvacant and vacant sites for each zoning district are referenced in the discussion below and are summarized in Table 1.

TABLE 1: SUMMARY OF SITES FOR EACH ZONE
C-2 O C-R

STATE REQUIREMENT FOR LAND

AREA (ACRES)

0.74 0.74 0.74
NUMBER OF NONVACANT SITES2 15 5 12
NUMBER OF VACANT2 3 0 15
ACRES OF NONVACANT 2 45 2.49 85.41
ACRES OF VACANT2 1.85 0 108.78
Sites Analysis – Land area to demonstrate capacity
Every two years, the County of San Mateo Human Services Agency conducts a One Day Homeless Count and Survey with community and county partners. The 2022 count was conducted in the early morning hours of February 24, 2022, and in depth surveys were collected over the course of the following week. The 2022 count indicated that approximately 161 individuals were experiencing unsheltered homelessness in the City of Pacifica. Based on this data, the City should demonstrate that there is enough land (adequate sites) to accommodate the need for emergency shelters by multiplying 161 people experiencing homelessness by 200 square feet. This would result in approximately 0.74 acres of land area that would be needed to accommodate potential emergency shelters. Staff has identified a combination of vacant and nonvacant sites in the C-2 zoning district that would comply with this land area. Additionally, staff will be proposing a program in the Housing Element to evaluate the capacity for one yearround shelter to ensure the C-2 district can meet the need for a year-round, which shall be implemented within one year of Housing Element adoption.

Sites Analysis – Nonvacant sites
The C-2 zoning district includes approximately 45 acres on 15 parcels, ranging in size from 0.11 acres to 30.32 acres (Attachment C). These sites are developed, many with community commercial uses identified as permitted and conditionally permitted uses in the C-2 zoning district. There is property along Oceana Blvd with a vacant tenant space. There are also multiple developed properties that contain office and commercial uses that have an improvement to land value (ILV) ratio of less than 0.5. ILV was identified as one indicator to be used to determine redevelopment potential. The ILV consists of the value of any improvements on a parcel divided by the value of the land within the parcel boundaries. The ILV ratio indicates which parcels are under utilized from a development perspective, with a lower ILV ratio 2 There are 12 sites excluded from total sites and acreage count because these sites are the core HE sites identified in the City’s sites inventory list of the draft 6th Cycle Housing Element and are not evaluated to accommodate shelter development.
1 Packet Pg. 10

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indicating greater potential for redevelopment because the value of existing improvements (i.e., buildings) is less than the value of the underlying land. Therefore, based on the analysis performed, nonvacant sites identified in the C-2 zoning district are suitable sites for potential development or conversion to accommodate an emergency shelter facility.

Sites Analysis – Vacant sites with nonresidential zoning that allows residential development The C-2 zoning district has three vacant parcels ranging in size from 0.13 acres to 1.56 acres.

Additionally, using the assumption of 200 sq. ft. per person, the City has at least 32,200 sq. ft. (0.74 acres) available for an emergency shelter facility at this single vacant parcel.

Therefore, the City has enough capacity in this zone to accommodate emergency shelter facilities either on vacant or nonvacant sites.

Small and Large Family Daycare Homes
State law3 provides for the operation of certain family daycare facilities within residential zoning districts and requires that local agencies consider them to residential uses. The maximum number of children to be cared for in a small family daycare home is eight (8) children and a large family daycare home is fourteen (14) children. State law generally requires that a small family daycare be permitted by right (without discretionary approval) and allows a local agency to require a discretionary approval such as a use permit for a large family daycare with more than fourteen (14) children. PMC section 9-4.401 already allows “child day care homes” for up to 12 children as permitted by-right. The proposed text amendment would update the maximum number of children to be cared for in such a home from twelve (12) to fourteen (14) children to be consistent with the numerical limits in state law (Attachment A). The amendment would also change the terminology used to refer to these uses as “family daycare homes” instead of “child day care homes” and update the definition to align with State law.

Community Care Facilities
The proposed amendments would replace “Special care facility” with “Community care facility” in the permitted and conditional uses section, definitions section, and general provisions section of Chapter 4 (Zoning), of Title 9 (Planning of Zoning) to be consistent with current definitions in Section 1502 of the California Health and Safety Code. Community care facility is defined as any facility place, or building that is maintained and operated to provide nonmedical residential care, day treatment, adult daycare, or foster family agency services for children, adults, or children and adults, including, but not limited to, the physically handicapped, mentally impaired, incompetent persons, and abused or neglected children, and includes a variety of facility’s as listed in Attachment E. The amendment would change the term to ensure clarity that the uses covered are those described in state law.

Consistency with General Plan and Local Coastal Land Use Plan 3Section 1597.45 of the California Health & Safety Code 1 Packet Pg. 11

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The proposed amendments are consistent with the 2040 General Plan and the 1980 Local Coastal Land Use Plan. The proposed amendments are most relevant to the following overall goals and policies of the General Plan and Local Coastal Land Use Plan:

CEQA Recommendation
Exempt from the California Environmental Quality Act (Act), pursuant to Section 15269 (Emergency Projects) as the specific action to enact Article 53 “Emergency Shelters” and amend Article 11 “C-2 Community Commercial District” is necessary to prevent or mitigate an emergency, and Section 15061(b)(3) (General Rule Exemption) because the amendments to various sections and articles of Chapter 4, “Zoning” of Title 9, “Planning and Zoning” would include changes to definitions to reflect state law that is already in effect and it can be seen with certainty that these definition changes have no possibility to cause a significant effect on the environment.

COMMISSION ACTION
MOTION FOR APPROVAL: Move that the Planning Commission finds the proposed ordinance is exempt from the California Environmental Quality Act; Adopts the resolution included as Attachment A to the staff report to recommend approval of the proposed ordinance to the City Council; and incorporates all maps and testimony into the record by reference.

ATTACHMENT LIST:
1 Packet Pg. 12

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Attachment A - Draft Resolution (DOCX)
Attachment B - Excerpt of HCD Comment from Draft Housing Element Comment Letter (PDF) Attachment C - Site analysis identifying sufficient capacity (PDF) Attachment D - Maps identifying sites in proximity to services and amenities (PDF) Attachment E - Section 1502 of Health & Safety Code (PDF) 1 Packet Pg. 13
Attachments referenced below are removed from PC Staff Report.

6.b
Packet Pg. 134 Attachment: Attachment B - Planning Commission Staff Report (5532 : Introduction of Emergency Shelter Ordinance and other Text City of Pacifica’s 6th Cycle (2023-2031) Draft Housing Element Page 5 August 8, 2023
allow at least four units of housing (e.g., four plex or greater) (Gov. Code, § 65583.2, subd. (c)(4)).

Availability of Infrastructure: The element states that “nearly” all housing sites have the most efficient infrastructure except two areas that will need additional analysis and that may impact the design and timing of the development (p. G-30). Additionally, the element indicates that potential infrastructure constraints related to water pump stations, among other things, may impact a projects ability to reach maximum capacity. First, the element must specifically indicate if total infrastructure capacity (existing and planned) is available to accommodate the RHNA. Second, the element must include a program committing to actions and a timeline to make sufficient infrastructure available to accommodate the RHNA.

Zoning for a Variety of Housing Types:
• Emergency Shelters: Zoning to permit emergency shelters without discretionary action was required as part of the 4th cycle housing element and prior to the 5th cycle housing element. The element states that the City’s zoning regulations does not address emergency shelters (p. G-16) and the City will include a program committing to comply with Government Code section 65583, subdivision (a)(4).). Further, the City provided additional documentation indicating that the City’s definition of special care facilities includes people experiencing homelessness and is permitted by-right for six or fewer persons. However, the City does not explicitly address emergency shelters and only allows by-right approvals for similar uses in limited circumstances (e.g., six of fewer persons).

Additionally, because zoning for emergency shelters was supposed to be completed two planning periods ago and the time to identify appropriate zoning has lapsed, HCD cannot find the element in compliance until the appropriate zoning to permit emergency shelters without discretionary action is demonstrated or completed. For additional information, please see
https://www.hcd.ca.gov/planning-and-community-development/housingelements/building-blocks/zoning-variety-of-housing-types.

As part of implementing zoning changes to permit emergency shelters without discretion, the City should address compliance with parking standards pursuant to Government Code section 65583, subdivision (a)(4)(A) and additional requirements regarding zoning, capacity and habitability pursuant to Chapter 654, Statutes of 2022 (AB 2339). For additional information and timing requirements, please see HCD’s memo at
https://www.hcd.ca.gov/sites/default/files/docs/planning-and-community/ab2339- notice.pdf.
• Transitional and Supportive Housing: Transitional housing and supportive housing must be permitted as a residential use in all zones allowing residential uses and only subject to those restrictions that apply to other residential dwellings of the same type in the same zone. (Gov. Code, § 65583, subd. (a)(5).). The element notes that the City does not currently address supportive and transitional housing and includes Program HE 1-14 (State and Federal Law Attachment B - Excerpt of HCD Comment from Draft HE Comment Letter 6.c Packet Pg. 135 Attachment: Attachment C - Excerpt of HCD Comment Letter on Draft Housing Element (5532 : Introduction of Emergency Shelter Ordinance Site # Map # Address APN Acres Use Vacant Coastal Zone
Amenities within 0.5 mile or less
for Vacant sites
Improvement to
Land Value Ratio
(ILV) <0.5
1 1 699 Oceana Blvd 009253280 0.662 Nonvacant site ‐ Vacant Structure Spanky's restaurant N/A 0.05 2 1 616 Edgemar Ave 009252060 0.27
Nonvacant site ‐ Only west half of parcel is C‐2, Pacifica Fire Department N/A 0
3 2 1704 Palmetto Ave 016031280 0.11 Nonvacant site ‐ Dial Glass & Window Co N/A 0.384 2 2305 Palmetto Ave 016301140 0.25 Nonvacant site ‐ Recology Coastside N/A 0.32 5 2 N/A 016421140 30.32 Nonvacant site ‐ Residential (in HPD) N/A 06 2 901 Oceana Blvd 009293100 4.86 Nonvacant site ‐ Only west half of parcel is C‐2, Good Sheppard Elementary School N/A 0.96
7 4 2095 Cabrillo Hwy 018051200 0.379 Nonvacant site ‐ Service Station N/A 0.1 8 4 4320 Coast Hwy 018140060 0.23 Nonvacant site ‐ Professional Bldg Kibblewhite Precision Machine N/A 0.24 9 4 4300 Coast Hwy 018140070 0.23 Nonvacant site ‐ Professional Blvd, Pet Hospital N/A 0.69 10 4 N/A 018140040 1.56 Vacant
< 0.5 mile to SamTrans stop and < 0.5
mile from commerical uses of
Rockaway Beach N/A
11 5 5550 Coast Hwy 023072070 1.5 Nonvacant site ‐ Commercial Pedro Point Shopping Center N/A 0.39 12 5 5400 Coast Hwy 023072060 2.63 Nonvacant site ‐ Commercial Pedro Point Shopping Center N/A 0.07 13 5 N/A 023072090 0.13 Vacant ‐ Parking Lot
< 0.5 mile to SamTrans stop and
commercial uses in Pedro Point
Shopping Center N/A
14 5 535 San Pedro Ave 023072110 0.29 Nonvacant site ‐ Commercial N/A 0.75 15 5 N/A 023072100 0.16 Vacant ‐ Parking Lot
< 0.5 mile to SamTrans stop and
commercial uses in Pedro Point
Shopping Center N/A
16 5 500 San Pedro Ave 023073220 0.33 Nonvacant site ‐ Anchor Inn Pacifica N/A 0.59 17 4 427 Harvey Way 022031340 0.2 Nonvacant site ‐ Residential N/A 0.41 18 5 694 Roberts Rd 022142190 2.701 Nonvacant site ‐ Residential N/A 0.34 1 104 Avalon Drive 009166010 0.13 Nonvacant site ‐ PW Corp Yard (HE Site 20) 1 151 Milagra Drive 009252050 0.52 Nonvacant site ‐ PW Corp Yard (HE Site 20) 1 155 Milagra Drive 009252040 0.16 Nonvacant site ‐ PW Corp Yard (HE Site 20) 1 555 Oceana Blvd 009164210 2.59 Nonvacant site ‐ Brentwood Shopping Center (HE Site 32) 1 549 Oceana Blvd 009164220 0.4 Nonvacant site ‐ Brentwood Shopping Center (HE Site 32) 4 N/A 018140700 3.48 Vacant (HPD) (HE Site 12)
4 N/A 018140470 0.31 Vacant (HE Site 11)
4 N/A 018140460 1.12 Vacant (HE Site 11)
4 4275 Coast Hwy 018140050 1.95 Nonvacant site ‐ Lumberyard, Building Materials (HE Site 10) 5 520 San Pedro Ave 023073090 0.965 Nonvacant site ‐ Builders Exchange (HE Site 30) 5 560 San Pedro Ave 023073100 0.525
Nonvacant site ‐ Commercial Ace Hardware/Surface Parking(HE Site 31)
5 560 San Pedro Ave 023073110 0.697 Nonvacant site ‐ Ace Hardware/Surface Parking(HE Site 31) Total acres w/o He
core sites 46.77
Total acres
Nonvacant
sites w/o HE
core sites

44.962
HE Core Sites
Total acres
Vacant sites
w/o HE core
sites

1.85 Attachment C - Site Analysis identifying sufficient capacity Community Commercial (C-2) Zoning District Sites

6.d
Packet Pg. 136
Attachment: Attachment D - Site Analysis identifying sufficient capacity (5532 : Introduction of Map # Address APN Acres Use Vacant Coastal Zone
Amenities within 0.5 mile or
less for Vacant sites
1 N/A 009131010 3.3 Vacant ‐ Beach Close to amenities but not viable site6 105 Rockaway
Beach Ave 022026280 1.82 Nonvacant ‐ Hotel N/A
6 N/A 022011050 5.22 Vacant ‐ Beach Close to amenities but not viable site 6 145 Rockaway
Beach Ave 022026110 0.05 Nonvacant ‐ Commercial N/A
6 145 Rockaway
Beach Ave 022026120 0.05 Nonvacant ‐ Commercial N/A
6 104 Rockaway
Beach Ave 022023130 0.42 Nonvacant ‐ Commercial N/A
6 100 Rockaway
Beach Ave 022023140 1.24 Nonvacant ‐ Commercial N/A
4 776 Bradford Way 018028180 0.72
Nonvacant ‐ The Moose
Lodge N/A
6 N/A 022011070 1.43 Vacant ‐ Aramai Point Close to amenities but not viable site 6 N/A 022011060 5.042 Vacant ‐ Aramai Point Close to amenities but not viable site 6 N/A 022110070 4.742 Vacant ‐ Aramai Point Close to amenities but not viable site 7 650 Cape Breton Dr 018170060 18.806
Nonvacant ‐ St Francis Riding
Club N/A
5 291 Shoreside Dr 023730200 3.5 Nonvacant ‐ Residential N/A5 315 Shoreside Dr 023730150 0.77 Nonvacant ‐ Residential N/A5 N/A 023730180 0.15 Vacant ‐ Beach Close to amenities but not viable site5 N/A 023071020 0.095 Vacant ‐ Beach Close to amenities but not viable site 5 N/A 023071010 0.09 Vacant ‐ Beach Close to amenities but not viable site 5 N/A 023730250 0.772 Vacant ‐ Beach Close to amenities but not viable site5 N/A 023730240 0.057 Vacant ‐ Beach Close to amenities but not viable site5 315 San Pedro Ave 023011010 1.4 Vacant <0.5 mile to SamTrams stop, retail,
employment, and other services.
5 N/A 023012010 1.19 Vacant
<0.5 mile to SamTrams stop, retail,
employment, and other services.
5 312 Kent Rd 023014070 0.057 Nonvacant ‐ Residential N/A 5 N/A 023014010 2.22 Vacant
<0.5 mile to SamTrams stop, retail,
employment, and other services.
6 5000 Coast Hwy 022191010 0.39 Vacant ‐ Parking lot N/A 6 N/A 022191280 0.66 Vacant ‐ Beach N/A6 5200 Coast Hwy 022191190 0.7 Nonvacant ‐ Taco Bell N/A 7 900 Yosemite Dr 022320999 61.6
Nonvacant ‐ Frontierland
Park (HPD) N/A
7 N/A 022320240 88 Vacant
Far from amentities and services, not a
viable site
Total acres 204.491
Total acres
nonvacant sites 85.406
Total acres vacant
sites 108.784
Attachment C - Site Analysis identifying sufficient capacity Commercial Recreation (C-R) Zoning District Sites

6.d
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Attachment: Attachment D - Site Analysis identifying sufficient capacity (5532 : Introduction of Map # Address APN Acres Use
6 667 Crespi Drive 022242050 0.42 Nonvacant ‐ Office (outside of Coastal Zone)5 904 Linda Mar Blvd 023124340 0.12 Nonvacant ‐ Office (outside of Coastal Zone)5 985 Linda Mar Blvd 023223010 0.42 Nonvacant ‐ Vetinary Hospital (outside of Coastal Zone) 5 1320 Adobe Drive 023221110 0.48 Nonvacant ‐ Office (outside of Coastal Zone) 6 N/A 023591090 1.05 Nonvacant ‐ Utility equipment (outside of Coastal Zone) Total acres
nonvacant site 2.49
Attachment C - Site Analysis identifying sufficient capacity Professional Office (O) Zoning District Sites

6.d
Packet Pg. 138
Attachment: Attachment D - Site Analysis identifying sufficient capacity (5532 : Introduction of Map 1 - North Sharp Park
Brentwood
Shopping Center
Pacific Manor
Shopping Center
Attachment D - Maps identifying sites in proximity to services and amenities *
*Parcels in dark and bright red are C-2 Zoning

6.e
Packet Pg. 139 Attachment: Attachment E - Maps identifying sites in proximity to services and amenities (5532 : Introduction of Emergency Shelter Ordinance and other Map 2 - Sharp Park
Sharp Park
Library
Eureka
Square
Attachment D - Maps identifying sites in proximity to services and amenities *
*Parcels in dark and bright red are C-2 Zoning

6.e
Packet Pg. 140 Attachment: Attachment E - Maps identifying sites in proximity to services and amenities (5532 :

Map 3 - North Pacifica
Attachment D - Maps identifying sites in proximity to services and amenities *Parcels in dark and bright red are C-2 Zoning
*

6.e
Packet Pg. 141 Attachment: Attachment E - Maps identifying sites in proximity to services and amenities (5532 : Introduction of Emergency Shelter Ordinance and other -------- -�
,-
0 100 200 m
• C-2 Zoning
DO Zoning - CR Zoning
6, SamTrans Stops -SamTrans Routes
D City of Pacifica Parcels
Rockaway Beach
Plaza
Map 4 - Rockaway Beach
Vallemar
Center
Attachment D - Maps identifying sites in proximity to services and amenities *
*Parcels in dark and bright red are C-2 Zoning

6.e
Packet Pg. 142 Attachment: Attachment E - Maps identifying sites in proximity to services and amenities (5532 :

Map 5 - Shelter Cove & San Pedro Beach
Pacifica Community
Center
San Pedro
Shopping Center
Attachment D - Maps identifying sites in proximity to services and amenities *
*Parcels in dark and bright red are C-2 Zoning

6.e
Packet Pg. 143 Attachment: Attachment E - Maps identifying sites in proximity to services and amenities (5532 :

Map 6 - Southern Pacifica
Linda Mar
Shopping Center
Pacifica
Community Center
Attachment D - Maps identifying sites in proximity to services and amenities *
*Parcels in dark and bright red are C-2 Zoning

6.e
Packet Pg. 144 Attachment: Attachment E - Maps identifying sites in proximity to services and amenities (5532 :

Map 7 - Park Pacifica
Terra Nova High School
Oddstad Elementary
School
Attachment D - Maps identifying sites in proximity to services and amenities 6.e Packet Pg. 145 Attachment: Attachment E - Maps identifying sites in proximity to services and amenities (5532 :

6.f
Packet Pg. 146 Attachment: Attachment F - Section 1502 of Health & Safety Code (5532 : Introduction of Emergency Shelter Ordinance and other Text

6.f
Packet Pg. 147 Attachment: Attachment F - Section 1502 of Health & Safety Code (5532 : Introduction of Emergency Shelter Ordinance and other Text

6.f
Packet Pg. 148 Attachment: Attachment F - Section 1502 of Health & Safety Code (5532 : Introduction of Emergency Shelter Ordinance and other Text

6.f
Packet Pg. 149 Attachment: Attachment F - Section 1502 of Health & Safety Code (5532 : Introduction of Emergency Shelter Ordinance and other Text

6.f
Packet Pg. 150 Attachment: Attachment F - Section 1502 of Health & Safety Code (5532 : Introduction of Emergency Shelter Ordinance and other Text

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
11/27/2023
1 SUBJECT:

Consideration and Adoption of Resolution Approving Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse as City Manager RECOMMENDED ACTION:

Move to adopt resolution approving the Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse.

AD HOC COUNCIL SUBCOMMITTEE:

Tygarjas Bigstyck, Mayor
Sue Beckmeyer, Councilmember
BACKGROUND/DISCUSSION:

The City and City Manager, Kevin Woodhouse, entered into an Employment Agreement in September 2017. The City and City Manager Woodhouse then entered into a Restated Employment Agreement on December 13, 2021 providing for the terms and conditions of employment of Kevin Woodhouse. The Council and City Manager then entered into a First Amendment to the Restated Employment Agreement on November 28, 2022. In October and November of this year, the Council held an annual performance review which was facilitated by Dan Keen of Daniel Keen Consulting. Following the completion of the performance review, the City Council authorized an ad-hoc subcommittee consisting of Mayor Bigstyck and Councilmember Beckmeyer to work with the City Manager and City Attorney to negotiate amendments to the City Manager’s compensation and benefits.

In the course of those discussions, the subcommittee reviewed a salary survey based on the comparator cities used in the City’s most recent labor negotiations. This salary survey and a review of the City Manager’s significant accomplishments were used to evaluate the City Manager’s salary adjustment. This salary adjustment forms the basis of the Second Amendment to Restated Employment Agreement (“Second Amendment”).

The Second Amendment provides for the following modifications to salary and benefits for the City Manager: 1) effective the first pay period after October 9, 2023, a 14% increase in salary which equates to an annual base salary of $304,939.00; and 2) a modification to the City Manager’s employment health benefits to reflect the same health benefits provided to other Department Heads in the City.

There are several factors contributing to the recommended salary increase. Since beginning his tenure as City Manager in Pacifica in 2017, Kevin Woodhouse’s compensation has been significantly behind the local market median. And as the City Manager compensation market in San Mateo County has changed, especially in recent years, Mr. Woodhouse’s annual increases have not kept pace, and he has fallen further and further behind. Currently, as shown in Attachment A, Kevin Woodhouse is 19% below the median of comparator cities for total compensation (salary+benefits). He is also the lowest paid City Manager in both salary and 7 Packet Pg. 151
Pacifica City Council 2
November 27, 2023
total compensation among these comparator cities (the same comparator cities used during labor negotiations for all employees) despite being one of the most experienced and longesttenured City Managers in the County.

Given this stark discrepancy, we recommend bringing Mr. Woodhouse’s salary closer to median, which is also in line with the City’s comprehensive salary plan negotiated with the City’s represented employees with the goal of bringing employee compensation closer to median.

This salary increase is also warranted due to the substantial accomplishments that the City Manager has achieved in his tenure. Some highlights include:

1. Stabilizing the City’s finances (e.g., Measure Y, AA+ Credit Rating, Budget Transparency and GFOA Awards).

2. Receiving millions in successful grant receipts.

3. Infrastructure improvements such as annual streets improvements, Civic Center financing and renovation, EQ Basin, storm and wastewater infrastructure planning and improvements.

4. Coastal infrastructure planning.

5. Planning improvements to prepare Pacifica for its future, such as completion of the comprehensive General Plan Update and Sharp Park Specific Plan, and progress on the Local Coastal Plan Update.

6. Organizational Culture and Process Improvements, including:
a. Departmental assessments and improvements - Public Works, HR, IT, CMO, Police;
b. Building an exceptional Executive Team of Department Directors; c. Modernizing operations through technology and policy updates; d. Leading the City through the COVID Pandemic; and
e. Other operational and program improvements in the Police and Parks, Recreation, and Beaches Departments.

7. Enhanced Community Engagement, Inter-Agency Collaboration, and Legislative advocacy consisting of:
a. Council review and approval of community engagement plans for major projects; b. Support of Councilmember efforts for state/fed legislator relationships; c. Work with state legislator staff re: funding and legislation proposals; and d. Inter-agency relationship building - Other cities, school districts, special districts, partner organizations, RCD, CCC, One Shoreline, etc.

In making a compensation recommendation, the subcommittee sought to balance labor market competitiveness considerations, Pacifica’s financial challenges, and consideration of the organization’s stability and productivity under Kevin’s leadership. It should be noted that the recommended increase still leaves Mr. Woodhouse approximately 9% behind median.

In light of these considerations, it is recommended that the Council approve the attached Resolution which approves the Second Amendment to Restated Employment Agreement and authorizes the Mayor to execute the Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
“A Strong Workforce Infrastructure” includes strategies to address employee retention and attraction challenges, engaging staff in decision-making, and recognizing staff..

FISCAL IMPACT:
7 Packet Pg. 152
Pacifica City Council 3
November 27, 2023
Approval of this Second Amendment to the Restated Employment Agreement will result in a total fiscal impact of $37,500 per year, with approximately $28,000 of that total expended during FY2022-23. This amount can be covered by the current FY2023-24 City Manager’s Office budget.

ORIGINATED BY:

City Attorney's Office
ATTACHMENT LIST:

Attachment A - City Comparisons of Total Compensation (PDF) Attachment B - Resolution No. ____-2023 Approving the Second Amendment to Restated Employment Agreement between City of Pacifica and Kevin Woodhouse (DOCX) Attachment C - Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse (PDF)
7 Packet Pg. 153
Agency Top Step Def Comp Retiree
Health3
Social
Security1
Medical
(EE+1) Dental Vision Life LTD Phone Auto
Special
Mgmt
Benefit
Sub-Total EE paid ER
PERS2
Total
Monthly
Salary
Effective
Date
San Carlos $31,667 $1,150 $9,932 $1,722 EE+ Covered EE Covered Covered - $400,000 Covered $665 $45,136 $45,136 3/14/2023 South San Francisco $29,167 $438 $9,932 $2,546 EE+ Covered EE+ Covered Covered - $50,000 Covered $450 $83 $42,616 -$583 $42,033 3/8/2023 San Mateo $28,167 $1,500 $70 $9,932 $1,645 EE+ Covered EE+ Covered Covered - $50,000 Covered $375 $41,689 -$1,376 $40,313 8/21/2023 Daly City $31,406 $500 EE Covered $1,736 EE Covered EE Covered Covered - $150,000 Covered Provided $33,642 -$236 $33,406 1/23/2023 Foster City $26,338 $2,634 $2,114 Included Included Covered - $150,000 Covered Provided $500 $31,586 -$132 $31,454 7/1/2023 Redwood City $29,837 $597 EE Covered $1,645 EE+ Covered EE+ Covered Covered - $3,000 Covered $75 $400 $797 $33,350 -$2,089 $31,262 6/30/2023 Belmont $25,718 $1,286 EE Covered $2,376 EE Covered $19 Covered - $350,000 Covered $50 $550 $29,999 $29,999 9/1/2023 San Bruno $26,667 $2,461 EE+ Covered EE+ Covered Covered - $300,000 Covered Provided $450 $167 $29,744 $29,744 6/27/2023 Brisbane $24,638 $1,232 EE+2 Covered $2,189 $145 $31 Covered - $150,000 Covered $35 $300 $28,569 $28,569 1/2/2023 Burlingame $22,872 $457 $686 $2,173 EE Covered EE Covered Covered - $250000 Covered $350 $208 $26,746 -$343 $26,403 6/12/2022 Menlo Park $23,375 $935 $2,421 EE+ Covered EE+ Covered Covered - $350,000 Covered $226 $208 $27,166 -$1,412 $25,754 7/1/2023 Millbrae $22,928 $833 $2,339 EE+ Covered EE+ Covered Covered - $400,000 Covered $26,101 -$1,261 $24,840 2/22/2022 MEDIAN $26,502 MEDIAN $30,630
Pacifica (current $22,291 $913 $446 $1,770 EE+ Covered EE+ Covered Covered - $400,000 Covered Provided $25,419 -$669 $24,751 10/9/2022

Salary only - Pacifica + -15.9% Total compensation -19.2% dif. from median (current) dif. from median (current)
1 City Contribution to Social Security (employer and employee each contribute 6.25% of first $160,200 of salary) 2 Employee's contribution to City's "employer share" of CalPERS payment 3 All Cities in PEMHCA pay CalPERS minimum contribution to retirees; this number (which changes annually) is excluded from chart

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t A - City Comparisons of Total Compensation (5533 : Second Amendment to Restated Employment Agreement - City RESOLUTION NO. _____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA

APPROVING THE SECOND AMENDMENT TO RESTATED EMPLOYMENT AGREEMENT

BETWEEN CITY OF PACIFICA AND KEVIN WOODHOUSE
WHEREAS, the City of Pacifica (“City”) and Kevin Woodhouse have previously entered into an Employment Agreement to employ Kevin Woodhouse as City Manager; WHEREAS, the City and Kevin Woodhouse have previously entered into a Restated Employment Agreement effective December 13, 2021;
WHEREAS, the City and Kevin Woodhouse have previously entered into a First Amendment to Restated Employment Agreement effective November 28, 2022; WHEREAS, the City and Kevin Woodhouse now desire to enter into a Second Amendment to Restated Employment Agreement to modify the terms and conditions of Manager’s employment as City Manager;
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Pacifica hereby approves the Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse in substantially the same form attached hereto as Exhibit "A" and authorizes and directs the Mayor to execute same for and on behalf of the City of Pacifica. • • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 27th day of November, 2023, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

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Packet Pg. 155 Attachment: Attachment B - Resolution No. ____-2023 Approving the Second Amendment to Restated Employment Agreement between City of EXHIBIT “A”
Second Amendment to Restated Employment Agreement
Between City of Pacifica and Kevin Woodhouse

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Packet Pg. 156 Attachment: Attachment B - Resolution No. ____-2023 Approving the Second Amendment to Restated Employment Agreement between City of 4863-7434-9373 v4 1

SECOND AMENDMENT TO

RESTATED EMPLOYMENT AGREEMENT
between

CITY OF PACIFICA AND KEVIN WOODHOUSE

1. PARTIES AND EFFECTIVE DATE
The parties to this Second Amendment to Restated Employment Agreement (“Second Amendment”) are the City of Pacifica (“City”) and Kevin S. Woodhouse (“Manager”). The effective date of this Second Amendment shall be November 27, 2023.

2. PURPOSE
The parties have previously entered into a Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse effective as of December 13, 2021 and a First Amendment To Restated Employment Agreement on November 28, 2022 (collectively referred to as “Employment Agreement”) . The City and Manager hereby desire to amend the Employment Agreement as set forth below.

3. AMENDMENT
A. Section 6.a. is hereby modified to read in its entirety as follows:

6. COMPENSATION AND BENEFITS.
a. Salary. Effective the first pay period following October 9, 2023, City Manager shall be entitled to a fourteen percent (14%) increase in salary and City agrees to pay Manager for his services rendered pursuant hereto as City Manager the sum of $304,939.00 annually payable in installments at the same time as other employees of the City are paid.

B. Section 6.d.iii. is hereby amended to read in its entirety as follows:
d. Holidays and Other Employee Benefits. Manager shall
receive the following additional benefits:
iii. Health Insurance: City contracts with CalPERS for the provision of health care services which include both Preferred Provider Organization Plans and Health Maintenance

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Packet Pg. 157 Attachment: Attachment C - Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse (5533 4863-7434-9373 v4 2
Organization Plans and Manager may choose from any
CalPERS provided plans for provision of health care services.

City’s contribution to Manager’s health insurance plan shall be as set forth in the rate schedule attached hereto and
hereinafter incorporated by reference as Exhibit “A.”

4. FULL FORCE AND EFFECT
Except as specifically modified herein, all remaining terms and obligations set forth in the Employment Agreement between the City and Manager shall remain in full force and effect.

CITY OF PACIFICA
By:

Tygarjas Bigstyck, Mayor
Dated:

MANAGER:

By:

Kevin Woodhouse, City Manager
Dated:

APPROVED AS TO FORM:

Michelle Marchetta Kenyon, City Attorney

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Packet Pg. 158 Attachment: Attachment C - Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse (5533 4863-7434-9373 v4 3
EXHIBIT “A”
Health Insurance Plan Rate Schedule

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Packet Pg. 159 Attachment: Attachment C - Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse (5533 2024 – Benefit Rates

Page 1 of 4 ends

The following document includes details regarding plan rates for health related benefits (medical, dental, and vision)
CalPERS Medical Plans – HMO
Plan and Coverage Level Region 1 Monthly
Premium
City Monthly
Contribution
Monthly Expense
to Employee
Anthem HMO Traditional
Employee Only $1,339.70 $967.95 $371.75
Employee + 1 Dependent $2,679.40 $1,875.87 $803.53
Employee + Family $3,483.22 $2,438.65 $1,044.57
Blue Shield Access+
Employee Only $1,076.84 $967.95 $108.89
Employee + 1 Dependent $2,153.68 $1,875.87 $277.81
Employee + Family $2,799.78 $2,438.65 $361.13
UnitedHealthcare
SignatureValue Alliance
Employee Only $1,091.13 $967.95 $123.18
Employee + 1 Dependent $2,182.26 $1,875.87 $306.39
Employee + Family $2,836.94 $2,438.65 $398.29
Kaiser Permanente
Employee Only $1,021.41 $967.95 $53.46
Employee + 1 Dependent $2,042.82 $1,875.87 $166.95
Employee + Family $2,655.67 $2,438.65 $217.02

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Packet Pg. 160 Attachment: Attachment C - Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse (5533 2024 – Benefit Rates

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CalPERS Medical Plans – PPO
Plan and Coverage Level Region 1 Monthly
Premium
City Monthly
Contribution
Monthly Expense
to Employee
PERS Platinum
Employee Only $1,314.27 $967.95 $346.32
Employee + 1 Dependent $2,628.54 $1,875.87 $752.67
Employee + Family $3,417.10 $2,438.65 $978.45
PERS Gold
Employee Only $914.82 $967.95 $0
Employee + 1 Dependent $1,829.64 $1,875.87 $0
Employee + Family $2,378.53 $2,438.65 $0
PORAC – PPO (Open to
PORAC members only)
Employee Only $931.00 $967.95 $0
Employee + 1 Dependent $2,117.00 $1,875.87 $241.13
Employee + Family $2,651.00 $2,438.65 $212.35

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Packet Pg. 161 Attachment: Attachment C - Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse (5533 2024 – Benefit Rates

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Delta Dental Plan
Class/Unit City Contribution Employee Cost
Class 1: Police Officers, WWTP, & City Council
$119.00 $0
Class 2: Battalion Chiefs $119.00 $0
Class 2: Firefighters $119.00 $0
Class 3: PPSA, PPMA $119.00 $0
Class 4: Directors, Managers, & Confidential / Unrep $119.00 $0 Class 5: Misc. 856 $119.00 $0
VSP Vision Plan
Vision Coverage Level City Contribution Employee Cost
Unrep, Mgmt 350, Battalion Chiefs, Misc 856, Police, PPMA, PPSA, & WWTP Employee Only $17.32 $0
Employee + 1 Dependent $25.11 $0
Employee + Family $45.02 $0
Firefighters
Employee Only Cafeteria Plan $17.32
Employee + 1 Dependent Cafeteria Plan $25.11
Employee + Family Cafeteria Plan $45.02

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Packet Pg. 162 Attachment: Attachment C - Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse (5533 2024 – Benefit Rates

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Firefighters Cafeteria Plan
The City will place $1,200.00 per month in a cafeteria plan for health insurance coverage for employees, or employees with dependents. Any unused health insurance portion of the cafeteria plan contribution will be returned to the cafeteria plan for other health related expenses. This plan is pending contract ratification and may change.

Teamsters Plan (Local 856)
Plan and Coverage
Level
Teamsters
Monthly Premium
City Monthly
Contribution -
Medical
City Monthly
Contribution –
Dental & Vision
Monthly
Expense to
Employee
Employee Only $1,438.00 $1012.76 $163.00 $262.24
Employee + 1
Dependent
$2,238.00 $1,964.96 $163.00 $110.04
Employee + Family $2,903.00 $2,555.92 $163.00 $184.08
*The City has made every attempt to ensure the accuracy and reliability of the information provided in this document. However, the information is provided "as is" without warranty of any kind. The City does not accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information contained in this document. Questions or concerns regarding this document should be directed to [email protected].

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Packet Pg. 163 Attachment: Attachment C - Second Amendment to Restated Employment Agreement between the City of Pacifica and Kevin Woodhouse (5533

Pacifica City CouncilNovember 27, 2023

Pacifica City Council
November 27, 2023