Paso Robles City Council
July 18, 2023

City Council Agenda July 18, 2023
1050 Southwood Drive, San Luis Obispo, CA 93401
T 805.544.7407 F 805.544.3863
CannonCorp.us 230207
7 best estimation of the actual construction cost. We will address the City comments following each review. Cost estimates will be prepared using Microsoft Excel and we will provide a Bluebeam PDF copy as well.

Phase 3. Bid Phase Support Services
Not included at this time.

Phase 4. Construction Phase Support Services
Not included at this time.

DELIVERABLES
• Project Management and Preliminary Design
o Meeting minutes, project updates, correspondence with City staff o Geotechnical Engineering Report
o 30% Plans at a detail level of approximately 30 percent complete (enough to illustrate major components, size, and layout)
o Preliminary Design Memorandum
• Detailed Design and Construction Documents
o Plans, Specifications, and Cost Estimates at the 75% and Final Completion Levels

ASSUMPTIONS AND EXCLUSIONS
Services, described below, that may accompany a project of this type are excluded from this scope of work at this time and may be added to our scope of work on a time-and-materials basis as deemed necessary by the City:
• City will provide timely delivery of all pertinent record information relative to the project.
• Cannon is not responsible and cannot be held accountable for the accuracy of As-Builts or Record Drawings provided by the Agencies or utility providers. • Core sampling of existing pavement along the force main alignment is not included in the scope at this time and will be submitted as a separate proposal if deemed necessary as work progresses through design.
• CEQA and environmental compliance are excluded from our scope and assumed to be prepared by the City.
• It is assumed that the City will provide all necessary title reports, permitting, and plan check fees with all permitting and plan approval agencies. • Items not specifically identified in the scope of work sections of this proposal are to be excluded and will be considered additional services. Additional work will be billed on a time-and-materials basis or as an addendum with prior written authorization from City.

Exhibit A

City Council Agenda July 18, 2023
1050 Southwood Drive, San Luis Obispo, CA 93401
T 805.544.7407 F 805.544.3863
CannonCorp.us 230207
8 SCHEDULE
The City’s goal is to complete the planning and design of the proposed lift station and force main within the next 12 months. As part of the project kick-off meeting, we will provide a baseline schedule for the work presented herein. Getting a new electrical service meter from PG&E can take upwards of 12 months from the time an application is made and will likely be a critical path issue.

FEES
Fees are based on current rates per the following work budget spreadsheet table (attached) and do not include Agency checking or recording fees, or title company fees. It is our understanding that this project qualifies for California prevailing wages.

Exhibit A

City Council Agenda July 18, 2023
1050 Southwood Drive, San Luis Obispo, CA 93401 T 805.544.7407 F 805.544.3863 CannonCorp.us 2302079
Exhibit A

City Council Agenda July 18, 2023
1050 Southwood Drive, San Luis Obispo, CA 93401 230408
T 805.544.7407 F 805.544.3863 10
CannonCorp.us

PREVAILING WAGE INFORMATION REQUEST
Please complete and return this form to allow us to comply with California’s prevailing wage requirements. Thank you!
Legal Name of Cannon
PWC Registration No.

Cannon Corporation
1000001861
Cannon Project Number
PUBLIC WORKS PROJECT REGISTRATION INFORMATION:

Client’s Project Name
DIR Project ID (PWC-100)
Applicable Bid
Advertisement Date
Client’s Representative for
DIR Project ID Information
Name:

E-mail:

Phone No.:

Labor Compliance Program (LCP)
Applicable to this Project?
Yes or No
If yes, please confirm if Cannon will be
Subject to the LCP and provide a copy of the LCP
manual to Cannon before the start of the
project. Thank you.

Exhibit A

City Council Agenda July 18, 2023
1050 Southwood Drive, San Luis Obispo, CA 93401
T 805.544.7407 F 805.544.3863
CannonCorp.us 230207
11 ACCEPTANCE OF PROPOSAL
Proposal Date: May 12, 2023
Client: City of El Paso de Robles – Wastewater Treatment Plant Attention: Mr. Casey Shepherd, Wastewater Resources Manager 3200 Sulphur Springs Road
Paso Robles, CA 93446
Project: UNION ROAD REGIONAL LIFT STATION PROJECT
Scope of Work: Survey and Engineering Design Services per letter proposal dated May 12, 2023.

T&M Not to Exceed: $230,762.00
(Time & Materials not-to-exceed without prior written authorization.) Appendix A details the terms for work. Cannon bills monthly for work in progress and payment is due within 10 calendar days of invoice date. Overdue amounts will be surcharged at 18 percent per annum or 1.5 percent monthly. Materials are charged at cost plus 25 percent.

Reimbursable Expenses are included in fee estimate. The fees are based upon current California prevailing wages; please provide us with the DIR Project ID. If the client requests, or the client’s schedule requires work to be done on an overtime basis, a multiplier of 1.5 will be applied to the above rates for weekdays for daily hours in excess of 8 as well as weekends and a multiplier of

2.0 for daily hours in excess of 12 and holidays.

Please indicate your acceptance of this proposal by signing below.

In witness whereof, the parties hereto have caused this agreement consisting of proposal letter, Appendix A and any other necessary and applicable documents to be executed of the date and year first above written. In Appendix A, Cannon Corporation hereinafter referred to as Cannon.

The Client, as noted below, hereinafter referred to as Client.

Client: City of El Paso de Robles Cannon
x
Larry P. Kraemer, PE
Director of Public Infrastructure
C 44813
Date: Date: May 12, 2023
Exhibit A

City Council Agenda July 18, 2023
Appendix A: 1 of 4 Revised November 2011
APPENDIX A: TERMS FOR CANNON SERVICES
Section 1: The Agreement

1.1 The agreement between the above noted parties consists of the following terms, the attached proposal and any exhibits or attachments noted in the proposal. Together these elements will constitute the entire agreement superseding any and all prior negotiations, correspondence, or agreements either written or oral. Any changes to this agreement must be mutually agreed to in writing.

Section 2: Standard of Care

2.1 Data, interpretations, and recommendations by Cannon will be based solely on information provided to Cannon. Cannon is responsible for those data, interpretations, and recommendations, but will not be responsible for other parties' interpretations or use of the information developed.

2.2 Services performed by Cannon under this agreement are expected by the Client to be conducted in a manner consistent with the level of care and skill ordinarily exercised by members of this profession practicing contemporaneously under similar conditions in the locality of the project. No other warranty, expressed or implied, is made.

2.3 The Client agrees that Cannon may use and publish the Client's name and a general description of Cannon’s services with respect to the project in describing Cannon’s experience and qualifications to other Clients and prospective Clients. The Client also agrees that any patentable or copyrightable concepts developed by Cannon as a consequence of service hereunder are the sole and exclusive property of Cannon.

2.4 The Client recognizes that it is neither practical nor customary for Cannon to include all construction details in plans and specifications, creating a need for interpretation by Cannon or an individual who is under Cannon’s supervision. The Client also recognizes that construction review permits Cannon to identify and correct quickly and at comparatively low-cost professional errors or omissions that are revealed through construction, or errors or omissions committed by others due to misinterpretation of design documents, or due to other causes. For the foregoing reasons construction review is generally considered an essential element of a complete design professional service. Accordingly, if the Client directs Cannon not to provide construction monitoring, Cannon shall be held harmless for any and all acts, errors or omissions, except for those consequences which it reasonably could be concluded that Cannon’s review services would not have prevented or mitigated.

2.5 Client acknowledges that Cannon is not responsible for the performance of work by third parties including, but not limited to, engineers, architects, contractors, subcontractors, or suppliers of Client.

Section 3: Billing and Payment

3.1 Client will pay Cannon on a monthly basis to be billed by Cannon. Prior to the start of the project, a retainer as specified in the proposal, is required. Invoices for the balance will be submitted to Client by Cannon and will be due and payable within 10 days of invoice date. If Client objects to all or any portion of any invoice, Client will so notify Cannon in writing within fourteen (14) days of the invoice date, identify the cause of the disagreement, and pay when due that portion of the invoice not in dispute. The parties will immediately make every effort to settle the disputed portion of the invoice. In the absence of written notification described above, the balance as stated on the invoice will be paid.

3.2 Invoices are delinquent if payment has not been received within thirty (30) days from date of invoice.

Client will pay an additional charge of 1-1/2 (1.5) percent per month or 18% per year of any delinquent amount, excepting any portion of the invoiced amount in dispute and resolved in favor of Client. All time spent and expenses incurred (including any attorney's fees) in connection with collection of any delinquent amount will be paid by Client to Cannon per Cannon’s current fee schedule. In the event Client fails to pay Cannon within sixty (60) days after invoices are rendered, Client agrees that Cannon will have the right to consider the failure to pay Cannon’s invoice as a breach of this agreement.

3.3 Client agrees that if Client requests services not specified herein, Client agrees to timely pay for all such services as extra work. Cannon will notify the Client prior to performance of services which are not specified in this agreement.

3.4 Client agrees that payment to Cannon is in no way contingent on the results of work by Cannon or on the outcome of any litigation.

3.5 Preparation for and/or travel time to client requested meetings will be charged at the hourly rate.

3.6 Billing rates are subject to change, typically on an annual basis.

Exhibit A

City Council Agenda July 18, 2023
Appendix A: 2 of 4 Revised November 2011
Section 4: Additional Services

4.1 Additional services include making revisions in drawings, specifications or other documents when such revisions are:

Inconsistent with approvals or instructions previously given by the Client, including revisions made necessary by adjustments in the Client's program or project budget; Required by the enactment or revision of codes, laws or regulations subsequent to the preparation of such documents.

4.2 Additional services includes providing services required because of significant changes in the project including, but not limited to, size, quality, complexity, the Client's schedule, or the method of bidding or negotiating and contracting for construction.

4.3 Where unexpected developments increase the scope of work as defined herein and/or prove the assumptions of this proposal invalid, Cannon will make a reasonable effort to contact the Client to discuss the effects and adjustment of cost.

Section 5: Site Access and Site Conditions

5.1 Client will grant or obtain free access to the site for all equipment and personnel necessary for Cannon to perform the work set forth in this agreement. Client will notify any and all possessors of the project site that Client has granted Cannon free access to the site. Cannon will take reasonable precautions to minimize damage to the site, but it is understood by Client that, in the normal course of work, some damage may occur and the correction of such damage is not part of this agreement unless so specified in the proposal.

Section 6: Ownership of Documents

6.1 All reports, maps, plans, field data, field notes, estimates and other documents, whether in hard copy or machine readable form, which are prepared by Cannon as instruments of professional service, shall remain the property of Cannon. The Client may retain copies, including copies stored on magnetic tape or disk, for information and for reference in connection with the occupancy and use of the project.

6.2 Because of the possibility that information and data delivered in machine readable form may be altered, whether inadvertently or otherwise, Cannon reserves the right to retain the original tapes/disks and to remove from copies provided to the Client all identification reflecting the involvement of Cannon in their preparation. Cannon also reserves the right to retain hard copy originals of all project documentation delivered to the Client in machine readable form, which originals shall be referred to and shall govern in the event of any inconsistency between the two.

6.3 The Client recognizes that changes or modifications to Cannon’s instruments of professional service introduced by anyone other than Cannon may result in adverse consequences which Cannon can neither predict nor control. Therefore, and in consideration of Cannon's agreement to deliver its instruments of professional service in machine readable form, the Client agrees, to the fullest extent permitted by law, to hold harmless and indemnify Cannon from and against all claims, liabilities, losses, damages, and costs, including but not limited to attorney's fees, arising out of or in any way connected with the modification, misinterpretation, misuse or reuse by others of the machine readable information and data provided by Cannon under this Agreement. The foregoing indemnification applies, without limitation, to any use of the project documents on other projects, for additions to this project, or for completion of this project by others, excepting only such use as may be authorized, in writing, by Cannon.

6.4 Client agrees that all reports and other work furnished to Client or his agents, which is not paid for, will be returned upon demand and will not be used by Client or others for any purpose whatsoever.

Section 7: Client Responsibilities

7.1 The Client shall provide full information including a program setting forth the Client's design objectives, constraints, and construction budget criteria.

7.2 The Client shall furnish a legal description, a certified land survey, and the services of a soil, structural, mechanical, electrical or other engineer or consultant services, and laboratory tests, inspections, or reports as required by law or as requested by Cannon to perform the functions and services required of this agreement. The information shall be furnished at the Client's expense and Cannon shall be entitled to rely upon the accuracy and completeness thereof.

7.3 The Client shall furnish all legal, accounting and insurance counseling services as may be necessary at any time for the project, including auditing services the Client may require to verify the Contractor's Applications for Payment or to ascertain how or for what purposes the Contractor uses the moneys paid by the Client. The information above shall be furnished at the Client's expense, and Cannon shall be entitled to rely upon the accuracy and completeness thereof.

7.4 If the Client observes or otherwise becomes aware of any fault or defect in the project or nonconformance with the Contract Documents, prompt written notice shall be given by the Client to Cannon.

Exhibit A

City Council Agenda July 18, 2023
Appendix A: 3 of 4 Revised November 2011

7.5 The Client shall furnish information and shall review Cannon’s work and provide decisions as expeditiously as necessary for the orderly progress of the project and of Cannon’s services.

Section 8: Insurance

8.1 Cannon represents and warrants that it and its agents, staff and consultants employed by it, is and are protected by worker's compensation insurance and that Cannon has such coverage under public liability and property damage insurance policies which Cannon deems to be adequate. Certificates for all such policies of insurance shall be provided to Client upon request in writing. Within the limits and conditions of such insurance, Cannon agrees to indemnify and save Client harmless from and against any loss, damage or liability arising from any negligent acts by Cannon, its agents, staff, and consultants employed by it. Cannon shall not be responsible for any loss, damage or liability beyond the amounts, limits, and conditions of such insurance. Cannon shall not be responsible for any loss, damage, or liability arising from any acts by Client, its agents, staff, and other consultants employed by Client.

Section 9: Termination

9.1 This agreement may be terminated by either party seven (7) days after written notice in the event of any breach of any provision of this agreement or in the event of substantial failure of performance by the other party, or if Client suspends the work for more than three (3) months. In the event of termination, Cannon will be paid for services performed prior to the date of termination plus reasonable termination expenses including the cost of completing analyses, records and reports necessary to document job status at the time of termination.

9.2 Failure of the Client to make payments to Cannon when due in accordance with this agreement shall be considered substantial nonperformance and cause for termination. If the Client fails to make payment when due to Cannon for services and expenses, Cannon may, upon seven (7) days written notice to the Client, suspend performance of services under this agreement. Unless payment in full is received by Cannon within seven (7) days of the date of the notice, the suspension shall take effect without further notice. In the event of a suspension of services, Cannon shall have no liability to the Client for delay, damage, loss of agency approvals, loss of financing, interest expenses, etc. caused to(?)the Client because of such suspension of service.

Section 10: Disputes Resolution

10.1 All claims, disputes, and other matters in controversy between Cannon and Client arising out of or related to this agreement will be submitted to "alternative dispute resolution" (adr) such as mediation and/or arbitration, before and as a condition precedent to other remedies provided by law. If and to the extent Client and Cannon have agreed on methods for resolving such disputes, then such methods will be set forth in the "alternative dispute resolution agreement" which, if attached, is incorporated and made a part of this agreement.

10.2 If a dispute at law related to the services provided under this agreement and that dispute requires litigation instead of adr as provided upon, then:
(1) The claim will be brought and tried in judicial jurisdiction of the court of the county where Cannon’s principal place of business is located and Client waives the right to remove the action to any other county or judicial jurisdiction, and
(2) The prevailing party will be entitled to recovery of all reasonable costs incurred, including staff time, court costs, attorney's fees, and other claim related expenses.

Section 11: Assigns

11.1 Cannon shall not assign this agreement in whole or in part nor shall it subcontract any portion of the work to be performed hereunder; except that Cannon may use the services of persons or(?) entities not in our employ when it is appropriate and customary to do so. Such persons and entities include, but are not necessarily limited to, specialized consultants and testing laboratories. Cannon’s use of others for additional services shall not be unreasonably restricted by the Client provided Cannon notifies the Client in advance.

Section 12: Governing Law and Survival

12.1 The law of the State of California will govern the validity of these terms, their interpretation and performance.

12.2 If any of the provisions contained in this agreement are held illegal, invalid or unenforceable, the enforceability of the remaining provisions will not be impaired. Limitations of liability and indemnities will survive termination of this agreement for any cause.

Exhibit A

City Council Agenda July 18, 2023
Appendix A: 4 of 4 Revised November 2011
Section 13: Limitation of Liability

13.1 To the fullest extent permitted by law, the total liability, in the aggregate, of Cannon and Cannon’s officers, directors, employees, agents and independent professional associates and consultants, and any of them, to Client and anyone claiming by, through or under Client, for any and all injuries, claims, losses, expenses or damages whatsoever arising out of or in any way related to Cannon’s services, the project or this agreement from any cause or causes whatsoever, including but not limited to the negligence, errors, omissions, strict liability or breach of contract of Cannon or Cannon’s officers, directors, employees, agents and independent professional associates and consultants, or any of them, shall not exceed the total compensation received by Cannon under this agreement, or the total amount of $50,000.00, whichever is greater.

Section 14: Hiring Cannon’s Employees

14.1 From time to time, Clients who have come to know and work with our employees in the course of a project wish to hire them to work as the Client’s own in-house employees. We pride ourselves on recruiting, hiring, and training the very best employees possible, and in assigning to projects our employees who best meet our Clients’ individual needs. Our goal is to have our Clients view Cannon and its individual employees as indispensable.

14.2 Client agrees to pay Cannon a finder’s fees equal to 12 months of the employee’s current salary or wage for each of our employees whom the client(?) choose to hire, either directly or indirectly. Client acknowledges and agrees that the finder’s fee is both fair and reasonable, and is equivalent to a recruiting or “headhunter’s fee” that Client would expect to pay to a third party for locating and recruiting an employee of the caliber of the hired Cannon employee.

14.3 This Section 14 shall be limited to those of Cannon’s employees with whom Client works or is introduced by Cannon during the course of this engagement, and shall be applicable to such employees both during his/her employment with Cannon and for a period of six (6) months thereafter. This Section 14 shall survive the cancellation or expiration of this Agreement.

Section 15: Prevailing Wage

15.1 Cannon acknowledges the requirements of California Labor Code Sections 1720 et seq. and 1770 et seq., as well as California Code of Regulations, Title 8, Section 16000 et seq. (“Prevailing Wage Laws”), which require the payment of prevailing wage rates and the performance of other requirements on certain “public works” and “maintenance” projects. To the extent required by the California Labor Code, Cannon shall fully comply with and require its subconsultants to fully comply with such Prevailing Wage Laws.

15.2 Pursuant to Labor Code Sections 1725.5 and 1771.1, Cannon and all its subconsultants performing work subject to prevailing wage must be registered with the Department of Industrial Relations and submit their certified payroll records directly to the DIR. In order to do so, the awarding body needs to complete the PWC-100 (Public Works Project Registration) within five days of awarding the contract; and provide Cannon with the DIR Project ID prior to the start of Cannon’s work.

Exhibit A

City Council Agenda July 18, 2023
Council Agenda Report
From: Mark Scandalis, Airport Manager
Subject: Approval of Airport Lease Agreement – Parcel 2 CEQA Determination: The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Date: July 18, 2023
Facts

1. On June 23, 2022, the Airport Commission approved an aviation specific development concept for Parcel 2 submitted by Jim and Debi Saunders.

2. Following Airport Commission approval of the concept, a lease agreement was negotiated by Airport management in accordance with the City Council adopted lease policy. Main points of the lease agreement are:
a. Lease term: 40 years total
b. Site: Parcel 2 of Parcel Map PR 97-229
c. Rent commencement: January 1, 2024
d. Base rent: Upon rent commencement the rate shall be $3,000 per month (2.77 cents/SF) continuing through the first three years of the term or until issuance of certificate of occupancy, whichever is sooner. At that time base rent will be adjusted to the predetermined rate of $.045/SF or $4,880.90 per month. e. Rent escalation: In accordance with the adopted lease policy, yearly cost of living increases will commence July 1, 2026, and every year thereafter. Every five (5) years following the commencement date, rent may be adjusted upon appraisal of real property.

Increases are capped at 8% per year and 20% over any 5-year adjustment period. f. Use: This lease site is for aeronautical development and will have airfield access. g. Default: Failure to complete proposed construction within five years is an event of default.
h. Reversionary Rights: Per FAA policy and adopted Airport lease policy, ownership of all improvements revert to the Airport at the conclusion of the lease.

3. On June 22, 2023, the Airport Commission voted unanimously to recommended to the City Council that the proposed lease be approved.

Options

1. Take no action;

2. Authorize the City Manager to execute the Lease Agreement, subject to any minor, technical, or nonsubstantive changed as approved by the City Manager and City Attorney; or

3. Provide alternative direction to staff.

City Council Agenda July 18, 2023
Analysis and Conclusions
As the Airport grows the need for hangar space will continue and this lease and the planned construction will help to serve the needs of the Airport now and into the future. The primary use of the premises permitted under this Lease shall be aircraft storage, tenant offices, restrooms and necessary repair and maintenance of stored aircraft and storage of spacecraft capable of horizontal takeoff and landing.

Additionally, this lease agreement will provide necessary revenue to the Airport fund for the continued operation and maintenance of the Airport.

Fiscal Impact
Rental income will be $3,000 per month increasing to $4,880.90 per month after the initial 3-year term or upon issuance of certificate of occupancy, whichever is sooner. The rental rate will tack fair market value over the life of the lease with yearly cost of living increases and five-year market adjustments based on appraisal of real property.

CEQA
The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378. The City’s approval of this Lease does not constitute approval by the City of any proposed development on the Premises or of other activity on the Premises that would have a direct or reasonably foreseeable indirect environmental impact pursuant to the California Environmental Quality Act, Public Resources Code Section 21000 et seq. (“CEQA”). (See 14 C.C.R. §§ 15060(c); 15378(b).) Moreover, Tenant’s future use or development of the Premises is expressly conditioned on CEQA compliance.

Recommendation (Option 2)
Approve Resolution 23-XXX, authorizing City Manager execute the Lease Agreement, subject to any minor, technical, or non-substantive changed as approved by the City Manager and City Attorney; Attachments

1. Resolution 23-XXX –Parcel 2 Lease Agreement – Saunders

2. Parcel 2 Lease Agreement - Saunders

City Council Agenda July 18, 2023
Attachment 1
RESOLUTION 23-XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL PASO DE ROBLES

APPROVING AN AIRPORT LEASE AGREEMENT WITH JIM AND DEBI SAUNDERS FOR PARCEL 2 OF PARCEL MAP PR 97-229 AND FINDING THIS ACTION EXEMPT FROM CEQA PURSUANT TO STATE GUIDELINES §§ 15060(c); 15378(b
WHEREAS, on June 23, 2022, the Airport Commission approved an aviation specific development concept for Parcel 2 submitted by Jim and Debi Saunders; and WHEREAS, following Airport Commission approval of the concept, a lease agreement was negotiated by Airport Management in accordance with the City Council adopted lease policy; and WHEREAS, main points of the lease agreement include: construction of two large executive hangars; a lease term of 40 years; a rental rate set to track fair market value over the life of the lease through yearly cost of living increases and 5-year market adjustments based on appraisal of real property; and ownership of all improvements reverting to the Airport at the conclusion of the lease.

WHEREAS, on June 22, 2023, the Airport Commission voted unanimously to recommended to the City Council that the proposed lease be approved.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EL PASO DE ROBLES DOES HEREBY RESOLVE AS FOLLOWS:

Section 1. All of the above recitals are true and correct and incorporated herein by reference.

Section 2. The City Council hereby approves the Airport Lease Agreement with Jim and Debi Saunders in substantially the form attached hereto as Exhibit A, and incorporated herein by reference, and authorizes the City Manager to execute the Agreement, subject to any minor, technical, or non-substantive changes as approved by the City Manager and City Attorney.

Section 3. The City Council finds this action is not a project under the California Environmental Quality Act pursuant to State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378. The City’s approval of this Lease does not constitute approval by the City of any proposed development on the Premises or of other activity on the Premises that would have a direct or reasonably foreseeable indirect environmental impact pursuant to the California Environmental Quality Act, Public Resources Code Section 21000 et seq. (“CEQA”). (See 14 C.C.R. §§ 15060(c); 15378(b).) Moreover, Tenant’s future use or development of the Premises is expressly conditioned on CEQA compliance.

Section 4. This Resolution shall take effect on the date it is approved by the City Council.

APPROVED this 18th day of July, 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

City Council Agenda July 18, 2023
Attachment 1
Steven W. Martin, Mayor
ATTEST:

Melissa Boyer, City Clerk

City Council Agenda July 18, 2023
82477.03000\41062594.1
Attachment 2

CITY OF PASO ROBLES

MUNICIPAL AIRPORT PROPERTY LEASE

City Council Agenda July 18, 2023
82477.03000\41062594.1
Attachment 2

NONSUBORDINATED AIRPORT

PROPERTY LEASE
This Lease ("Lease") is made as of ___________________ , 2023 between THE CITY OF EL PASO DE ROBLES ("Landlord") and Jim and Debi Saunders ("Tenant"). The parties agree as follows:

1. PREMISES

1.1. Leased Premises. Landlord leases to Tenant and Tenant leases from Landlord, Parcel 2 of Parcel Map PR 97-229, as amended, located in the City of Paso Robles, County of San Luis Obispo, California, as more particularly described in Exhibit "A", which is attached hereto and made a part hereof. This vacant lot, as defined herein, is leased to Tenant and referred to in this Lease as the "Leased Premises" or the "Premises."

1.2. Airport. The Leased Premises are a part of the municipal Airport owned and operated by Landlord and known as the Paso Robles Municipal Airport (the "Airport").

1.3. Common Areas. This is a Aeronautical lease. As such it is agreed that does have access to the aircraft operating areas of the airport is possible or intended.

1.4. Acceptance of the Premises. Tenant hereby accepts the Premises in the condition existing as of the date hereof. Tenant hereby agrees that the Premises are in a good and tenantable condition and acknowledges that it has inspected the Premises and common areas of the Airport to its satisfaction and acknowledges that Landlord is not obligated to make any repairs or alterations to the Premises or common areas.

1.5. Reservations to Landlord. Tenant further accepts the Premises subject to any and all existing easements and encumbrances. Landlord reserves the right without obligation to install, lay, construct, maintain and repair utilities and appurtenances necessary or convenient in connection therewith in, over, upon, through, across, under and along the Premises or any part thereof, and to enter the Premises for any and all such purposes.

Landlord also reserves the right to grant franchises, easements, rights of-way and permits in, over, upon, through, across, under and along any and all portions of the Premises. No right reserved by Landlord in this clause shall be so exercised as to interfere unreasonably with Tenant's operations hereunder, and the rights granted to third parties by reason of this clause shall contain provisions that the surface of the land shall be restored as nearly as practicable to its condition prior to the construction upon completion of any construction.

2. TERM

2.1. Term. The lease term shall be for a total of 40 years, commencing upon execution of this document. (“Commencement Date”), and expiring on 40 years thereafter ("Expiration Date").

2.2. Possession. The Tenant is granted full and complete access to the Leased Premises as of the Commencement Date of this lease and, so long as Tenant is not in default hereunder, the right to its possession for the duration of this Lease.

3. RENT

3.1. Monthly Rent. The monthly base rent ("Base Rent") for the (2.49 acre) Premises shall be $3000.00 per month for the initial 3 years of the lease to allow for lease up. Base rent will be adjusted on the 3rd anniversary following rent commencement or upon issuance of certificate of occupancy whichever is sooner to the predetermined market rent as described in City appraisal, this rate shall be $.045/sf or $4880.90 per month for the Premises. Tenant shall pay Landlord the Base Rent on or before the first day of each calendar month during the

City Council Agenda July 18, 2023
82477.03000\41062594.1
Attachment 2
term of this Lease, in advance. Base Rent and any other amounts that are not received by Landlord within ten (10) days of the due date shall be subject to the late charge and interest provided for in Sections 21.18 and 21.19.

A new Base Rent shall be determined at the expiration of the initial lease term and/or any Renewal Terms by appraisal. Tenant agrees that this Base Rent recalculation is a condition of exercising any of its options to extend the Term of this Agreement.

3.2. Rent Commencement. Rent payments shall commence January 1st 2024.

A. Cost-of-Living Increase. On July 1, 2026, and on July 1st of every year thereafter ("Adjustment Date") for the full term of this Lease, including any extensions, the Base Rent shall be increased by the same percentage increase as defined by the Consumer Price Index for the previous 12-month period. The standard to be used shall be the Consumer Price Index for all Urban Consumers San Francisco-Oakland Metropolitan area, Bureau of Labor Statistics, United States Department of Labor, 1982 = 100 ("Index"). The index which is published most immediately before the Adjustment Date shall be used. If the Index shall no longer be published, another Index generally recognized as authoritative for purposes of this paragraph shall be substituted. In addition to annual Consumer Price Index adjustments, in order to keep lease rates in line with fair market values throughout the life of the lease; base rent adjustments, if necessary, can be made every five years with adjustments to be determined by an appraisal of real property. The annual increase in monthly rent shall increase no more than eight percent (8%) in any given year or twenty percent (20%) in any five-year period.

B. Costs of Appraisal. In the event that the Base Rent will be adjusted by appraisal, the City shall, at its own cost and expense, be responsible for selecting and hiring an appraiser.

3.4 Payments. All rent to be paid by Tenant to Landlord shall be in lawful money of the United States of America and shall be paid without deduction or offset, prior notice or demand, and at such place or places as may be designated from time to time by Landlord.

4. CONDUCT OF BUSINESS BY TENANT

4.1. Use of the Premises and Conduct of Tenant's Business.

A. Tenant hereby acknowledges that the principal use of the Airport consists of the operation of a public airport and that all other operations and businesses which are now or hereafter permitted by Landlord, including the use hereunder, must be at all times be compatible with such principal use, as Landlord shall, in its sole discretion, determine.

B. The primary use of the Premises permitted under this Lease shall be an Aircraft Storage, tenant offices, restrooms and necessary repair and maintenance of stored aircraft and storage of spacecraft capable of horizontal takeoff and landing. Tenant shall, continuously and uninterruptedly during the term of this Lease, conduct its business activity, as permitted herein, upon the Premises unless prevented from so doing by strikes, fire, casualty or other causes beyond Tenant's control, except during reasonable periods for repairing, cleaning and decorating the Premises.

C. Tenant shall, at Tenant's own cost and expense, obtain and maintain all licenses, permits, certificates or other authorizations of any governmental authority having jurisdiction thereover, including, but not limited to, the FAA, which may be necessary for the conduct in the Premises of its business operations and activities. Without limiting the generality of the foregoing, Tenant shall comply with all applicable laws, resolutions, codes, rules, orders, directions, ordinances and regulations of any department, bureau or agency or any governmental authority having jurisdiction over the operations, occupancy, maintenance and use of the Premises for the purpose demised hereunder, except for those requiring major Alterations to the Premises as distinguished from those relating to furniture, fixtures or equipment of Tenant therein. Tenant shall indemnify and save Landlord harmless from and against any claims, penalties, losses, damages or expenses imposed by

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reason of Tenant's violation of any applicable law or the rules and regulations of governmental authorities having jurisdiction thereof.

D. Tenant acknowledges Landlord is entering into this Lease in its proprietary capacity and not in its regulatory or governmental capacity. Nothing in this Lease shall be construed as restraining, impairing or restricting the City of El Paso De Robles in its regulatory or governmental capacity (referred to herein when acting in such capacity as “City”), or granting any rights upon Tenant with respect to the use, occupancy, development, or operation of the Premises in a manner inconsistent with any laws or applicable requirements.

E. Nothing in the approval of this Lease by the Landlord shall be binding on the City Council, Planning Commission, or any other commission, committee, board or body of the City regarding any Approvals of the Proposed Development required by such bodies regarding Tenant’s use of the Premises. Nothing in this Lease, nor any action by Tenant with reference to this Lease or any related documents shall be deemed to constitute issuance or waiver of any required City approval regarding the Premises, or waiver or exercise of any legislative discretion of the City regarding any application, approval or other matter relating to Tenant’s intended use of the Premises.

F. The parties agree that nothing in this Lease is intended to commit the Tenant to completing a particular project or to commit the City to granting any approval for such proposed use. The City’s approval of this Lease does not constitute approval by the City of any proposed development on the Premises or of other activity on the Premises that would have a direct or reasonably foreseeable indirect environmental impact pursuant to the California Environmental Quality Act, Public Resources Code Section 21000 et seq. (“CEQA”). (See 14 C.C.R. §§ 15060(c); 15378(b).) Moreover, Tenant’s future use or development of the Premises is expressly conditioned on CEQA compliance. City shall conduct environmental review in accordance with CEQA prior to taking any discretionary action with regard to any proposed development or use of the Premises by Tenant. Nothing in this Lease shall be construed to limit the City’s discretion to consider and adopt any mitigation measure or project alternative, including the alternative of rejecting Tenant’s applications for the Entitlements or any proposed development or use of the Premises by Tenant, as provided in Public Resources Code Section 21002. Following completion of the City’s environmental review of any proposed development or use of the Premises by Tenant, the City shall file a notice of such approval as provided in Public Resources Code Section 21152.

G. Notwithstanding any other remedies of Landlord hereunder, in the event of a breach of this Section 4.1, Tenant, upon receipt of written notice from Landlord of said breach, shall cure said specified breach within five (5) business days. If cure is not performed within five (5) business days, Landlord, at its option, may terminate this Lease upon thirty (30) days' written notice. However, if Tenant has undertaken steps to cure within five (5) business days, then Landlord shall not terminate this Lease unless Tenant fails to diligently complete said cure. In such event, Landlord may terminate this Lease upon thirty (30) days written notice.

Notwithstanding the foregoing, if at any time Tenant's breach has a material adverse effect on the operations of the Airport or creates an emergency situation that, in City's reasonable estimation, presents a risk to public health or safety, Tenant shall immediately commence to cure such breach.

4.2. Restrictions on Use.

A. Tenant shall not use or permit the use of the Premises for any purpose other than that set forth in Section 4.1 above, and Tenant shall comply promptly with all applicable laws, rules and regulations regarding the use of the Premises, including, but not limited to all rules and regulations promulgated by the FAA.

B. Tenant shall not use or permit the use of the Premises in any manner that will (A) tend to create or permit any waste or nuisance, (B) tend to disturb other tenants or users of the Airport, (C) invalidate or cause cancellation or be in conflict with fire or other hazard insurance policies covering the Airport, or (D) increase the rate of fire insurance for the Airport or of property located therein, over that rate in effect on the

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Commencement Date hereof. Tenant, at its expense, shall comply with all rules, orders, regulations or requirements of the State and City Fire Code.

4.3. Airport Use. In connection with the ownership and use of the Airport by Landlord, Tenant hereby agrees as follows:

A. Landlord reserves the right to further develop or improve the landing area of the Airport as it sees fit, regardless of the desires or views of Tenant, and without interference or hindrance. If the foregoing development or improvement shall have a material adverse effect on Tenant's use of the Premises, the parties hereto shall meet and confer prior to the commencement of such development or improvement.

B. Landlord reserves the right, but shall not be obligated to Tenant, to maintain and keep in repair the landing area of the Airport and all publicly-owned facilities of the Airport to standards established by Landlord in Landlord’s sole discretion, together with the right to direct and control all activities of Tenant in this regard.

C. This Lease shall be subordinate to the provisions and requirements of any existing or future agreement between Landlord and agencies of the United States relative to the development, operation or maintenance of the Airport.

D. In the event any future structure or building is planned for the Premises or in the event of any planned modification or alteration of any present or future building or structure situated on the Premises, Tenant shall comply with the notification and review requirements covered in Part 77 of the Federal Aviation Regulations.

E. It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of any exclusive right within the meaning of Section 308(a) of the Federal Aviation Act of 1958 (49 U.S.C. Section 1349).

F. There is hereby reserved to Landlord, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Premises. This public right of flight shall include the right to cause within the said airspace any noise inherent in the operation of any aircraft used for navigation or flight through the said airspace or landing at, taking off from or operating on the Airport.

G. Tenant, by accepting this Lease, expressly agrees for itself, its successors and assigns that it will not permit any natural growth or other obstruction on the land leased hereunder above a height as determined by the application of the requirements of Part 77 of the Federal Aviation Regulations. Tenant shall also not erect or permit the erection of any structure or building on the land leased hereunder above a height of fifty (50) feet. In the event the aforesaid covenants are breached, Landlord reserves the right to remove the offending structure or object, all of which shall be at the expense of Tenant.

H. Tenant shall not make use of the Premises in any manner which might interfere with the landing and taking off of aircraft from the Airport, or which might otherwise constitute a hazard. In the event the aforesaid covenant is breached, Landlord reserves the right to enter upon the Premises and cause the abatement of such interference, at the expense of Tenant.

I. This Lease and all the provisions hereof shall be subject to whatever right the United States Government now has, or in the future may have or acquire, affecting the control, operation, regulation and taking over of said Airport, or the exclusive or nonexclusive use of the Airport, by the United States during the time of war or national emergency or otherwise.

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J. Tenant shall conform to the Airport Rules and Regulations and FAA safety and security rules and regulations regarding use of the Airport operations area including runways, taxiways, aircraft aprons by vehicles, employees, customers, visitors, etc. in order to prevent security breaches and avoid aircraft incursions and vehicle/pedestrian deviations; will complete and pass an airfield safe driving instruction program when offered or required by the Airport, and will be subject to penalties as prescribed by the Airport for violations of the Airport safety and security requirements.

4.4. Airport Security. Tenant is responsible for maintaining security in and around the Premises or any other area adjacent to or upon the Airport which Tenant has an exclusive right to use or which Tenant otherwise controls. Tenant is further responsible for maintaining security with respect to access to and entry upon Airport operations areas, or other areas of the Airport designated by Landlord from time to time as security areas, by employees, subtenants, contractors, invitees or customers of Tenant or any other person who enters the Airport operations areas at Tenant’s invitation, direction, or authority, whether through or from the Premises or otherwise.

4.5. Hazardous Materials.

A. Restrictions. Landlord acknowledges receipt and consents to Tenant's list of the current hazardous materials or toxic substances, as more particularly described on Exhibit "B", attached hereto and made a part hereof, which are necessary or useful to Tenant's business and which are used, kept and stored in a manner that complies with all laws relating to such hazardous materials or toxic substances so brought upon or used or kept in or about the Premises or the Airport. Notwithstanding the foregoing, Tenant shall not cause or permit any hazardous materials or toxic substances which are not included on the foregoing approved list to be brought upon, kept or used in or about the Premises or the Airport by Tenant, its agents, employees, contractors or invitees, without the prior written consent of Landlord. Landlord's consent shall not be unreasonably withheld so long as Tenant demonstrates to Landlord's reasonable satisfaction and covenants to Landlord that such hazardous materials or toxic substances are necessary or useful to Tenant's business and will be used, kept and stored in a manner that complies with all laws relating to any such hazardous materials or toxic substances so brought upon or used or kept in or about the Premises or the Airport. If Tenant breaches the obligations stated in the preceding sentence, or if the presence of hazardous materials or toxic substances on the Premises or the Airport caused or permitted by Tenant results in contamination of the Premises or the Airport, or if contamination of the Premises or the Airport by hazardous materials or toxic substances otherwise occurs for which Tenant is legally liable to Landlord for damage resulting therefrom, then Tenant shall indemnify, defend and hold Landlord harmless from any and all claims, judgments, damages, penalties, fines, costs, liabilities or losses (including, without limitation, diminution in value of the Premises or the Airport, damages for the loss or restriction on use of rentable or usable space or of any amenity of the Premises or the Airport, damages arising from any adverse impact on marketing of space in the Airport, and sums paid in settlement of claims, actual attorneys' fees, consultant fees and expert fees), which arise during or after the term of the Lease as a result of such contamination. This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of site conditions, including regular inspections, or any clean up, remedial, removal or restoration work required or recommended by any federal, state or local governmental agency or political subdivision because of hazardous materials or toxic substances present in the soil or ground water on or under the Premises and/or the Airport. The indemnity, defense and hold harmless obligations of Tenant hereunder shall survive any termination of this Lease. Without limiting the foregoing, if the presence of any hazardous materials or toxic substances on the Premises or the Airport caused or permitted by Tenant results in any contamination of the Premises or the Airport, Tenant shall promptly take all actions at its sole expense as are necessary to return the Premises and the Airport to the condition existing prior to the introduction of any such hazardous materials or toxic substances; provided that, Landlord's approval of such actions shall first be obtained, which approval shall not be unreasonably withheld so long as such actions, in Landlord's sole and absolute discretion, would not potentially have any material adverse long-term or short-term effect on the Premises or the Airport.

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B. Testing Wells. Landlord shall have the right, at any time, to cause testing wells to be installed on or about the Premises and/or the Airport, in a manner that will not unreasonably interfere with the Tenant's use of the Leased Premises, and may, at its option, cause the ground water, soil and air to be tested to detect the presence of hazardous materials or toxic substances at least once every twelve (12) months during the term of the Lease by the use of such tests as are then customarily used for such purposes. Landlord shall provide Tenant with thirty (30) days prior written notice if it determines such testing wells are to be installed in order to minimize disruption to Tenant's business operations. If Tenant so requests, Landlord shall supply Tenant with copies of such test results. Landlord shall bear the cost of such tests and of the maintenance, repair and replacement of such wells, unless such test indicates that the presence of hazardous materials or toxic substances are the result of Tenant's operations on the Premises. In that event, the cost of such tests and of the maintenance, repair and replacement of such wells shall be fully paid for by Tenant within ten (10) days after receiving a statement of charges from Landlord.

C. Access. Landlord and Landlord's agents shall have the right to inspect the Premises for the purposes of ascertaining Tenant's compliance with this Lease, Airport Minimum Standards, and Airport Rules and Regulations with notice at least five (5) days in advance of any inspection. The cost of such inspections shall be paid by Landlord, unless such inspection reveals the presence of hazardous materials or toxic substances are the result of Tenant's operations on the Premises. In the event of a release, spill or mishandling of hazardous materials or toxic substances, Tenant shall immediately inform Landlord verbally and in writing. Such notice shall identify the hazardous materials or toxic substances involved and the emergency procedures taken.

D. Assignment and Subletting. It shall not be unreasonable for Landlord to withhold its consent to any proposed assignment or sublease if: (A) the proposed assignee's or subtenant's anticipated use of the Premises or the Airport involves the generation, storage, use, treatment or disposal of hazardous materials or toxic substances; (B) the proposed assignee or subtenant has been required by any prior landlord, lender or governmental authority to take remedial action in connection with hazardous materials or toxic substances contaminating a property if the contamination resulted from such assignee's or subtenant's actions or use of the property in question; or (C) the proposed assignee or subtenant is subject to an enforcement order issued by any governmental authority in connection with the use, disposal or storage of any hazardous materials or toxic substances.

E. Definitions. As used herein, the terms "hazardous materials and/or toxic substances" mean (A) any hazardous or toxic substance, material or waste which is or becomes regulated by any local, state or federal government or special district, (B) designated as a "hazardous substance" pursuant to Section 1311 of the Federal Water Pollution Control Act (33 USC Section 1317), (C) defined as a "hazardous waste" pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 USC Section 6901, et seq. (42 USC Section 6903), (D) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 USC Section 9601, et seq. (42 USC Section 9601), (E) defined as a "hazardous waste" or as a "hazardous substance" pursuant to Section 25117 or 25316 of the California Health and Safety Code, (F) substances defined as “hazardous materials” in the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101 et seq., (G) any infectious wastes or substances, or (H) petroleum and any by-products thereof. References herein to specific statutes or laws shall also be references to any amendments of or applicable successor statutes or laws.

F. Delivery of Inventory and Plans. During the term of the Lease, Tenant shall immediately deliver to Landlord (A) a new list of all such hazardous materials and toxic substances, each time Tenant adds or changes the materials or substances it may use and each time a material or substance used by Tenant becomes included within the definition of hazardous materials or toxic substances under this Lease (due to new or revised laws or otherwise), and (B) copies of all reports required by any and all regulatory agencies governing the use, handling, storage and disposal of hazardous materials or toxic substances. Tenant shall obtain Landlord’s written consent prior to the use or storage of any such added or changed materials or substances.

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G. Insurance. Any increase in the premium for insurance carried by Landlord or required of Tenant under this Lease on the Premises or the Airport which arises from Tenant's use and/or storage of these materials shall be solely at Tenant's expense. Tenant shall procure and maintain at its sole expense such additional insurance as may be necessary to comply with any requirement of any federal, state or local governmental agency or special district with jurisdiction.

H. Storage. It is the intent of the parties hereto that the provisions of this Section 4.5 regarding the use and handling of hazardous materials and toxic substances shall also apply to Tenant's storage upon the Premises of any substances, including, but not limited to, gasoline and diesel fuels, in above or below-ground storage tanks.

5. OPERATING EXPENSES

5.1. Taxes and Assessments. Tenant shall pay without abatement, deduction or offset all real and personal property taxes, general and special assessments, and other charges of every description levied on or assessed against the Leased Premises, improvements located on the Leased Premises, personal property located on or in the land or improvements, the leasehold estate, or any subleasehold estate, to the full extent of installments falling due during the term, whether belonging to or chargeable against Landlord or Tenant. Tenant shall make all such payments directly to the charging authority at least fifteen (15) days before delinquency and before any fine, interest or penalty shall become due or be imposed by operation of law for nonpayment. If, however, the law permits the payment of any or all of the above items in installments (whether or not interest accrues on the unpaid balance), Tenant may, at Tenant's election, utilize the permitted installment method, but shall pay each installment with any interest before delinquency. Tenant shall pay any charge or levy only upon the rent payable by the Tenant under this Lease to Landlord, and any tax in lieu of property tax, but shall not be required to pay any franchise, state inheritance, succession, capital levy or transfer tax of the Landlord, or any income, excess profits or revenue tax, or any other tax, assessments or charge attributable to Landlord. In addition, Landlord shall be solely responsible for any income taxes assessed against Landlord arising out of its operation of the Airport or related to the rents received from Tenant.

If at any time during the term of this Lease any tax, however described, is levied or assessed against Landlord as a substitute, in whole or in part, for any real property taxes, or in addition to such real property taxes, Tenant shall pay before delinquency the substitute or additional tax or excise. Such substitutes include, but are not limited to, any possessory interest tax imposed on Tenant by California Revenue and Taxation Code Sections 103 and 107.

Tenant recognizes and understands that this Lease may create a possessory interest subject to property taxes pursuant to Revenue & Taxation Code Section 107.6 and that, if a possessory interest is created, Tenant shall, in accordance with this Section 5, be responsible for payment of property taxes levied against such possessory interest. Any documentary transfer tax assessed upon the creation of a leasehold interest in the Premises under this Lease shall be paid by Tenant. Tenant hereby expressly acknowledges that Landlord has given Tenant notice that Tenant's possessory interest in the demised premises may be taxed.

Tenant’s initials
A. Proof of Compliance. Tenant shall furnish to Landlord at least fifteen (15) days before the date when any tax, assessment or charge would become delinquent, receipts or other appropriate evidence establishing their payment. Tenant may comply with this requirement by retaining a tax service to notify Landlord when the taxes have been paid.

B. Proration. Taxes and assessments determined from the latest information available for the first and, if Tenant is not in default under this Lease, the last year of this Lease shall be prorated between the Landlord

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and Tenant on the basis of a three hundred sixty-five (365) day year for any fractional portion of a tax fiscal year commencing July 1st and ending June 30th included within the term of this Lease.

C. Payment by Landlord. In the event Tenant fails to pay such taxes or assessments, Landlord may, at its option, after giving fifteen (15) days' notice to Tenant, pay any such taxes or assessments together with all penalties and interest which may have been added thereto by reason of any such delinquency or failure to pay, and may likewise redeem the Leased Premises or any part thereof, or the buildings or improvements located thereon, from any tax sale or sales. Any such amounts so paid by Landlord shall become immediately due and payable as additional rent by Tenant to Landlord, together with interest thereon at the maximum lawful rate from the date of payment by Landlord until paid by Tenant. Any such payment shall not be deemed to be a waiver of any other rights of Landlord hereunder. Tenant may, in good faith, contest any such tax or assessment at its expense. However, Tenant shall defend itself and Landlord against the same and shall pay and satisfy any judgment including all penalties and interest that may be rendered thereon. Landlord may require Tenant to furnish Landlord a surety bond or other security reasonably satisfactory to Landlord in an amount equal to such contested tax or assessment, indemnifying Landlord against liability for such tax or assessment and holding the Leased Premises free from the effect of such tax or assessment. Landlord shall cooperate with Tenant in any such contest and shall execute any necessary legal documents incident thereto, but shall be held harmless by Tenant against all costs or expenses incident to such cooperation.

5.2. Net Lease. This shall be a triple net Lease and Base Rent shall be paid to Landlord absolutely net of all costs and expenses, except as specifically provided to the contrary in this Lease. it being understood that Landlord will receive the rent set forth in Section 3 free and clear of any and all other impositions, taxes, liens, charges or expenses of any nature whatsoever in connection with the ownership and operation of the Premises.

In addition to the rent required by Section 3, and to the other amounts payable by Tenant pursuant to this Lease, Tenant shall pay to the parties respectively entitled thereto all other impositions, operating charges, maintenance charges, construction costs and any other charges, costs and expenses which arise or may be contemplated under any provision of this Lease during the term hereof. All of such charges, costs and expenses shall constitute additional rent, and upon the failure of Tenant to pay any of such costs, charges or expenses, Landlord shall have the same rights and remedies as otherwise provided in this Lease for the failure of Tenant to pay rent. It is the intention of the parties hereto that this Lease shall not be terminable for any reason by Tenant, and that Tenant shall in no event be entitled to any abatement of or reduction in rent payable under this Lease, except as herein expressly provided. Any present or future law to the contrary shall not alter this Lease.

6. UTILITIES AND SERVICES

6.1. Utilities. During the term of this Lease, Tenant agrees to pay all charges and expenses in connection with utility services furnished to the Leased Premises and to protect Landlord and the Leased Premises from all such charges and expenses. If any utilities are not separately metered for the Leased Premises, Tenant will arrange for separate meters at Tenant's expense and Tenant shall contract directly with utility providers. If separate meters are not possible, Tenant shall reimburse Landlord for Tenant's pro rata share, as reasonably determined by Landlord, of all shared utilities within ten (10) days after billing by Landlord.

6.2. Tenant acknowledges that Landlord has no obligation to provide utilities except those already furnished as of the date of this Lease to the Premises or additional utilities. Landlord shall not be liable to Tenant under any circumstances for damages or loss to Tenant's property, injury to person or property, or consequential damages, however occurring, through, in connection with, or incidental to failure to furnish or interruption of any utilities or services.

6.3. Tenant shall comply with all rules and regulations which Landlord, any governmental agencies or authorities, or any utility company may establish for the use, proper functioning and protection of any such utility.

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7. IMPROVEMENTS, REPAIRS AND MAINTENANCE

7.1. Tenant's Obligations to Improve, Maintain and Repair. Tenant shall maintain, or cause to be maintained, the Premises and every part thereof in good order, condition and repair according to standards determined by Landlord (whether or not such part of the Premises requiring repair, or the means of repairing the same, are reasonably or readily accessible to Tenant, and whether or not the need for such repairs occurs as a result of Tenant's use, any prior use, the elements or the age of such part of the Premises), including, without limiting the generality of the foregoing, (A) all buildings, structures or fixtures, including foundations, roofs, ceilings, floors, interior and exterior walls, (B) store fronts, windows, doors, hangar doors, plate glass, showcases, skylights, entrances and vestibules located within the Premises, (C) automobile and aircraft pavement, driveways, landscaping, parking lots, fences and signs, and (D) all sprinkler systems, plumbing, sewers, drainage devices, heating, air conditioning, electrical facilities, equipment and other utilities or facilities serving the Premises.

Tenant shall commence any repair within thirty (30) days after the receipt by Tenant of written notice of the need for such repair, including any notice from Landlord. Landlord shall not be liable to Tenant by reason of any injury to or interference with Tenant's business arising from or connected with the need for or the making of any repairs, alterations or improvements. All repairs, modifications or improvements to the Premises shall be performed in accordance with the building standards of the City of Paso Robles, and it shall be the responsibility of Tenant to secure appropriate permits from the City of Paso Robles. Tenant shall keep the exterior of the improvements on the Premises in a reasonably neat and attractive condition, free from waste or debris, and replace any trees, shrubs, plants, and ground cover as may be needed. Tenant shall screen and landscape all outside storage areas and service yards of the Premises with fencing and landscaping approved by Landlord, and shall not allow any temporary structures or facilities on the Premises, without Landlord's reasonable approval.

Tenant shall assure that only essential support vehicles, aircraft and equipment are parked or stored outside and adjacent to the hangar and that all are screened or located so as to remain out of sight of the public streets.

7.2. Landlord's Remedies. In the event Tenant fails to perform its obligations under Section 7.1 Landlord may, at its option, after fifteen (15) days' written notice to Tenant to cure such failure, enter upon the Premises and put the same in good order, condition and repair, and the cost thereof shall become due and payable, upon demand, by Tenant to Landlord as additional rent.

7.3. No Landlord Obligations. Landlord shall have no obligation to make any repairs to the Premises other than as expressly and specifically set forth in this Lease. Tenant hereby waives any and all rights provided in Sections 1941 through 1942, inclusive, of the Civil Code of California and hereby waives, to the extent permissible, any rights other than statutes or laws now or hereafter in effect which are contrary to the obligations of Tenant under this Lease, or which place obligations upon Landlord in addition to those provided in this Lease.

7.4. Landlord's Reservations of Rights. During the term of this Lease, Landlord reserves the right, in its sole discretion, to reconstruct, alter or improve the aircraft pavement areas of the Premises, to such standards as it shall determine; provided, however, if such reconstruction, alteration or improvement to the aircraft pavement areas would result in a material adverse effect on Tenant's use of the Premises, the parties hereto shall meet and confer prior to the commencement of such reconstruction, alteration or improvement. Tenant hereby acknowledges that Landlord has no obligation to make such alterations or improvements.

7.5. Indemnity. Tenant shall indemnify and save harmless Landlord against all actions, claims and damages by reason of (A) Tenant's failure to perform the terms of this Section 7, or (B) Tenant's nonobservance or nonperformance of any law, ordinance or regulation applicable to the Leased Premises, and any liability or duty to repair imposed by the laws of California.

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8. PLANS AND SPECIFICATIONS; CONSTRUCTION; LIENS AND CLAIMS

8.1. Approval of Plans. No improvement shall be erected, placed, altered or maintained on the Premises unless plans and specifications have been approved in writing by Landlord, at Landlord’s sole discretion. Prior to commencing construction of any building, structure or improvement (not including the internal layout) on the Leased Premises, Tenant shall notify Landlord of the date of commencement and expected completion thereof and shall submit for approval plans and specifications in accordance with the City of El Paso de Robles Community Development Department Application Guide for Major Development, which can be found at:
http://www.prcity.com/government/departments/commdev/planning/pdf/formsapplications/MajorGuide.pdf:

8.2. Time for Approval. Tenant shall notify Landlord in writing when completed plans and specifications for improvements to be erected, placed or altered on the Premises have been submitted to Landlord ("Notice").

Such plans and specifications shall be processed in accordance with the normal procedures of the City of Paso Robles. If Landlord does not approve the plans and specifications, it shall notify Tenant of the reasons for its disapproval, and failure to so notify Tenant shall be deemed approval of the plans and specifications. By approving the plans and specifications, Landlord does not represent or warrant that such plans and specifications comply with Applicable Laws. Tenant shall be responsible, at Tenant's sole cost and expense, for securing all necessary governmental or quasi-governmental approvals of the plans and specifications and for securing all permits necessary to construct and operate any improvements or Approved Improvements.

8.25 Approval Delays. In the event the required approval process exceeds a period of one (1) year from the Commencement Date, or if Tenant is unable to obtain approvals necessary to use the Premises for the use set forth in Section 4.1.B, above, Tenant shall have the option to terminate this Lease in its entirety.

8.3. Commencement of Construction. Once Tenant has commenced construction, Tenant shall pursue the same with reasonable speed and dispatch in compliance with the approved plans and specifications. All construction shall be in accord with all applicable laws, ordinances and regulations. Tenant's construction shall not interfere with Landlord's operation of the Airport, and Tenant shall comply with all directives of Landlord related thereto. If Tenant is prevented from completing improvements on account of strikes, lockouts, failure of contractor or subcontractors, inability to procure material or labor in the free market, governmental restrictions, fire, earthquake, the elements, or other casualty or similar extraordinary conditions beyond Tenant's reasonable control (excluding financial difficulties, economic conditions or inability to obtain governmental approvals), then the Tenant shall thereafter proceed with all reasonable speed and dispatch to complete the improvements.

8.4. Liabilities. By approving plans and specifications, Landlord assumes no liability therefor, or for any defect resulting from the plans and specifications. Tenant indemnifies and shall hold Landlord harmless from any damage, loss or prejudice claimed, and from all expenses incurred arising out of approvals of plans and specifications or any improvement on the Premises. Tenant hereby assigns to Landlord all warranties and guarantees of all material suppliers, contractors and subcontractors furnishing material or labor or otherwise relating to any improvements or Approved Improvements.

8.5. Approved Buildings and Improvements. All of the improvements shown in the approved plans and specifications constitute the "Approved Improvements." Substantial modifications to Approved Improvements shall be made only with prior written approval of Landlord, except that Landlord's prior written approval shall not be required for changes to the interior of any building on the Premises. Notwithstanding the foregoing, nothing in this Section 8.5 shall limit, alter, or waive the building and permit requirements of the City of Paso Robles.

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8.6. Notice of Work. Before commencement of any construction, alteration, addition, replacement or restoration of any building, structure or other improvement, Tenant shall (A) give to Landlord written notice of the work to be performed, specifying the nature and location of the intended work and the expected date of commencement and completion thereof; and (B) provide Landlord with written plans and specifications therefor, and shall have obtained the written approval thereof from the Landlord as required above. Landlord reserves the right at any time and from time to time to post and maintain on the Leased Premises such notices as may be necessary to protect Landlord against liability for all such liens and claims.

8.7. Covenant Against Liens and Claims. Tenant shall not allow or permit to be enforced against the Leased Premises or any part thereof, any mechanic's, materialmen's, contractor's or subcontractor's liens arising from any claim growing out of work of any construction, repair, restoration, replacement or improvement, or any other claim or demand no matter how the same may arise. Tenant shall pay or cause to be paid all of said liens, claims or demands before any lawsuit is brought to enforce them against the Leased Premises. Tenant agrees to indemnify and hold the Landlord and the Leased Premises free and harmless from all liability for any and all such liens, claims and demands, together with reasonable attorneys' fees and all costs and expenses incurred by Landlord in connection therewith.

8.8. Tenant's Right to Contest Liens. Notwithstanding anything to the contrary set forth above, if Tenant shall in good faith contest the validity of any such lien, claim or demand, then Tenant shall, at its expense, defend itself and Landlord against the same and shall pay and satisfy any adverse judgment that may be rendered thereon before the enforcement thereof against Landlord or the Leased Premises. A condition to Tenant's right to contest the validity of any lien, claim or demand shall be that if Landlord shall require, Tenant shall furnish to Landlord evidence of a surety bond satisfactory to Landlord in an amount at least equal to the contested lien, claim or demand, the effect of which is to indemnify Landlord against liability for the same, and to hold the Leased Premises free from the effect of such lien or claim.

8.9. Landlord Paying Claims. In the event Tenant shall fail to pay and discharge or cause to be paid and discharged, when due and payable, any tax, assessment or other charge upon or in connection with the Leased Premises, or any lien or claim for labor or material employed or used or any claim for damages arising out of the construction, repair, restoration, replacement, maintenance and use of the Leased Premises and any improvements thereon, or any judgment on any contested lien or claim, or any insurance premium or expense in connection with the Leased Premises and improvements, or any other claim, charge or demand which Tenant has agreed to pay or cause to be paid under the terms of this Lease, and if Tenant, after fifteen (15) days' written notice from Landlord to do so shall fail to pay and discharge the same, or in the event Tenant contests such tax, assessment, claim or charge and fails to post security as provided elsewhere in this Lease, then Landlord may, at his option, pay any such tax, assessment, insurance expense, lien, claim, charge or demand, or settle or discharge any action therefor, or judgment thereon, and all costs, expenses and other sums incurred or paid by Landlord in connection with any of the foregoing shall be paid by Tenant to Landlord upon demand, together with interest thereon at Bank of America's prime rate from the date incurred or paid. Any default in such repayment by Tenant shall constitute a breach of the covenants and conditions of this Lease.

8.10. Prevailing Wage. Tenant acknowledges that any improvements, alterations or repairs on the Premises, may be subject to the payment of prevailing wage under the provisions of the California Labor Code. To the extent any such improvements, alterations, or repairs are subject to prevailing wage requirements, the following shall apply:

A. Tenant shall and shall cause its contractors and subcontractors to: pay prevailing wages in the construction of any improvements, or alterations on the Premises, or any other work as those wages are determined pursuant to Labor Code Sections 1720 et seq.; to employ apprentices as required by Labor Code Sections 1777.5 et seq.; and comply with the other applicable provisions of Labor Code Sections 1720 et seq., 1725.5, 1771, 1771.1, 1771.4, 1776, 1777.5 et seq., 1810-1815 and the implementing regulations of the Department of Industrial Relations (the “DIR”) for all such Labor Code sections.

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B. Tenant shall indemnify, hold harmless and defend (with counsel selected by the Landlord), to the extent permitted by applicable law, Landlord, its councilmembers, commissioners, officials, employees and agents, against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including Tenant, or its contractors or subcontractors) to pay prevailing wages as determined pursuant to Labor Code Sections 1720 et seq., to hire apprentices in accordance with Labor Code Sections 1777.5 et seq., or to comply with the other applicable provisions of Labor Code Sections 1720 et seq., 1725.5, 1771, 1771.1, 1771.4, 1776, 1777.5 et seq., 1810-1815 and the implementing regulations of the DIR in connection with the work performed pursuant to this Lease. The provisions of this Section shall survive expiration or earlier termination of this Lease.

9. INSURANCE AND INDEMNITY

9.1. Landlord's Non-liability. Landlord shall not be liable for any loss, damage or injury of any kind to any person or property arising from any use of the Leased Premises, or any part thereof, or caused by any defect in any building, structure or other improvement thereon or in any equipment or other facility therein, or caused by or arising from any act or omission of Tenant or any of its agents, employees, licensees or invitees, or by or from any accident on the Leased Premises or any fire or other casualty thereon, or occasioned by the failure of Tenant to maintain the Leased Premises and all improvements thereto in a safe condition, or arising from any other cause except where caused by the sole negligence of Landlord, its agents or employees.

9.2. Indemnification of Landlord.

A. To the fullest extent permitted by law, Tenant shall, at Tenant's sole expense and with counsel reasonably acceptable to Landlord, defend, indemnify, and hold harmless Landlord and Landlord's officers, officials, employees and agents from and against all claims, (including demands, losses, actions, causes of action, damages, liabilities, expenses, charges, assessments, fines or penalties of any kind, and costs including consultant and expert fees, costs of investigation, court costs and attorney’s fees) from any cause, arising out of or relating (directly or indirectly) to this Lease, the tenancy created under this Lease, or the Premises, including without limitation:
i. The use or occupancy, or manner of use or occupancy, of the Premises or buildings by Tenant;
ii. Any act, error or omission, or negligence of Tenant or of any subtenant, invitee, guest, contractor or licensee or Tenant or any subtenant in, on, or about the Premises; iii. Tenant’s conducting or managing of its business;
iv. Any alterations, activities, work, or things done, omitted, permitted, allowed, or suffered by Tenant in, at, or about the Premises or buildings, including the violation of or failure to comply with any insurance requirements or any applicable laws, statues, ordinances, standards, rules, regulations, orders, decrees, or judgments in existence on the Commencement Date or enacted, promulgated, or issued after the date of this Lease, and;
v. Any breach or default in performance of any obligation on Tenant’s part to be performed under this Lease, whether before or during the term of this Lease or after its expiration or earliest termination.

B. This indemnification extends to and includes, without limitation, claims for:
i. Injury to any persons (including death at any time resulting from that injury);

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ii. Loss of, injury or damage to, or destruction of property (including loss of use at any time resulting from that loss, injury, damage, or destruction); and iii. All economic losses and consequential or resulting damage of any kind.

C. Tenant’s indemnification obligation hereunder shall survive the expiration or earlier termination of this Lease until all claims against Landlord involving any of the indemnified matters are fully, finally, and absolutely barred by the applicable statutes of limitations.

9.3. Liability Insurance. Tenant shall procure and maintain at all times during the term of this Lease, at its sole cost and expense, a policy or policies of comprehensive public liability insurance by the terms of which Landlord and Tenant are named as insured and are indemnified against liability for damage or injury to property or person, including death, of any person entering upon or using the Leased Premises or any improvements thereon or any part thereof, with a combined single limit coverage in an amount of not less than Two Million Dollars ($2,000,000.00) and annual aggregate coverage in an amount of not less than Two Million Dollars ($2,000,000.00) applying to injury to or death of any one or more persons arising from the same occurrence and for damage or injury to property. If Landlord's reasonably exercised judgment determines that the liability insurance amounts set forth herein become inadequate, then Landlord may, by written notice, require an increase in coverage commencing with the next policy anniversary date. Such public liability insurance policy or policies shall be stated to be primary and noncontributing with any insurance which may be carried by Landlord and shall contain a provision (provided such provisions are available without increased premium) that the Landlord, although named as an insured shall nevertheless be entitled to recover under that policy for any loss, injury or damage to the Landlord, its agents and employees or the property of such persons by reason of the negligence of Tenant. Worker's compensation insurance shall be in the amounts required by law.

9.4. Endorsements. The following endorsements shall be attached to the liability insurance policy:

A. If the insurance policy insures on an "accident" basis, it shall be changed to an "occurrence" basis.

B. The policy must cover personal injury, as well as bodily injury.

C. The coverage shall be at least as broad as comprehensive liability and broad form comprehensive general liability or "commercial" general liability.

D. The Landlord, its officers, agents, employees, and volunteers shall be named as insured under the coverage afforded with respect to liability arising out of activities performed by or on behalf of Tenant under this contract. The coverage shall contain no special limitations on the scope of protection afforded to Landlord, its officers, agents, employees and volunteers.

E. An endorsement shall be attached which states that the coverage is primary insurance and that any insurance or self-insurance fund maintained by or available to Landlord or any of its officers, agents, employees or volunteers shall be in excess of Tenant's insurance and shall not be called upon to contribute to a loss covered by the policy.

F. The policy must provide that it shall not be canceled or changed or made the "retroactive date" of the policy or any renewal or replacement policy be changed without thirty (30) days' prior written notice to Landlord.

G. A cross-liability endorsement must be included to the effect that each insured is covered as if separate policies had been issued to each insured.

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H. The liability coverage may be either on a blanket basis or a policy which specifically identifies this Lease with a contractual liability endorsement.

I. Any deductibles or self-insured retention must be declared to and approved by Landlord. At the option of Landlord, the insurer shall reduce or eliminate such deductibles or self-insured retention as respects the Landlord, its officers, agents, employees and volunteers or the Tenant shall procure a bond guaranteeing payment of losses and related investigation, claims administration and defense expenses.

J. If the policy or policies are written on a "claims made" basis, the retroactive date of such policies shall be maintained as the date this Lease was executed or earlier in time notwithstanding any renewals of such policies or changes in insurance carriers. Further, the reporting period for claims made under such policy or policies shall, at a minimum, continue through sixty (60) days after termination of this Lease.

9.5. Additional Requirements - Claims Made Policies.

A. Statement of Coverage. If the policy or policies are written on a "claims made" basis, the insurer shall provide Landlord with a statement specifically describing (A) the date coverage began under the policy and the retroactive date for claims received, (B) the reporting period(s) applicable to the policy, and (C) the incident, event and claims notice procedures applicable to the policy and the name and address of the person to whom notice of incidents, events and claims may be given.

B. Notice of Events and Claims. If the policy or policies are written on a "claims made" basis, Tenant shall give its insurance carrier and Landlord written notice of each and every event or incident occurring during the term of this Lease that may ripen into a claim. Notice shall be given no later than ten (10) days after such event or incident.

9.6. Fire Insurance. Tenant shall at all times during the term of this Lease and at its sole expense, procure and maintain in full force a policy or policies of standard fire and extended coverage insurance insuring all improvements on the Leased Premises in an amount equal to not less than the full replacement costs. Tenant agrees to reevaluate insurance coverage at three (3)-year intervals and to increase said coverage if it shall be less than the then full replacement cost of the improvements on the Leased Premises. The amount of the full replacement cost shall be determined in writing by the carrier of insurance then in force and shall be binding on the parties for the purpose of this paragraph. The insurance policies insuring against fire or other casualty shall include a "Loss Payee" endorsement issued in favor of Landlord and the interest of the holder of any "mortgage" executed by Tenant in connection with obtaining of any interim or permanent financing with respect to the Leased Premises, and said policies shall provide that any loss is payable jointly to Landlord, Tenant and the holder, if any, of a "mortgage" in the Tenant's interest under this Lease. Proceeds from any insurance policy shall be used in accordance with the provisions of this Lease dealing with use of insurance funds for repair and restoration.

9.7. Certificates or Policies of Insurance. All policies of insurance procured and maintained by Tenant hereunder shall be issued by companies authorized to do business in California having not less than Best's A rating and shall be issued in the name of the Landlord and Tenant for the mutual and joint benefit and protection of the parties. Executed copies of all insurance policies or a certificate thereof shall be delivered to Landlord on the Commencement Date and shall contain a provision that not less than thirty (30) days' written notice shall be given to Landlord prior to the cancellation, reduction of coverage, expiration or any material change in any such policy.

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9.8. Use of Insurance Funds for Repair and Restoration. In the event any buildings, structures or improvements located on the Leased Premises are damaged by fire or other casualty, any such sums as are received from or on account of any policy of insurance covering the same shall, except as provided in Section 10 below, be expended for the restoration, repair or replacement of said buildings, structures or improvements.

9.9. Failure to Provide Insurance. If Tenant fails or refuses to procure or to maintain insurance as required by this Lease or fails or refuses to furnish Landlord with required proof that the insurance has been procured and is in force and paid for, Landlord shall have the right at Landlord's election, without notice, to procure and maintain such insurance. The premiums paid by Landlord shall be treated as added rent due from Tenant with interest at the Bank of America prime rate, to be paid within thirty (30) days of demand. Landlord shall give prompt notice of the payment of such premiums, stating the amounts paid and the names of the insurer or insurers.

9.10. Waiver of Subrogation. The parties hereby release each other, and their respective representatives, from any claims for damage to any person or to the Premises and the improvements which may be located upon the Premises and to the fixtures, personal property, Tenant's improvements and alterations of Tenant in or on the Premises and the improvements which may be located upon the Premises that are caused by or result from risks insured against under any insurance policies carried by the parties hereto and in force at the time of any such damage. Each party hereto shall cause each insurance policy obtained by it to provide that the insurance company waives all right of recovery by way of subrogation against either party in connection with any damage covered by any policy, provided obtaining such a waiver in each such policy is then available at a reasonable charge.

10. REPAIR AND RESTORATION
If during the term of this Lease any building or improvement on the Leased Premises or any part thereof shall be damaged or destroyed by fire or other casualty, Tenant shall, at its sole cost and expense, repair or restore the same according to the original plans thereof or to such modified plans as shall be previously approved in writing by Landlord pursuant to Section 8. If such damage or destruction occurs during the last eighteen (18) months of the Lease term Tenant shall have no duty to repair or restore, and if Tenant elects not to repair or restore, this Lease shall terminate and Landlord shall receive all insurance proceeds that are attributable to those improvements that would become the property of the Landlord pursuant to Section 17. Such work of repair or restoration shall be commenced within one hundred twenty (120) days after the damage or loss occurs and shall be completed with diligence but not longer than one (1) year after such work is commenced, provided, however, that the time for completion of such repair and restoration shall be extended as appropriate in accordance with the provisions of Section 21.15 below. If insurance proceeds provided for above shall be insufficient for the purpose of such restoration and repair, or if the casualty is one not required to be insured against, then Tenant shall make up the deficiency out of its own funds. Tenant waives the provisions of Civil Code Sections 1932(2) and 1933(4) with respect to any destruction of the Premises.

11. ASSIGNMENT AND SUBLETTING

11.1. Restriction of Assignment. Except as provided in Section 19 of this Lease entitled "Hypothecation of Leasehold Interest," Tenant shall not encumber, assign or otherwise transfer this Lease, or any right or interest hereunder, or in or to any of the improvements constructed or installed on the Leased Premises, in whole or in part, without the prior written consent of Landlord. Landlord's consent will not be unreasonably withheld. If Tenant is a corporation or a partnership, any change in Tenant which would be a "change in ownership" pursuant to California Revenue and Taxation Code Sections 60 et seq. shall be deemed an assignment subject to Landlord's consent. It shall not be unreasonable for Landlord to withhold or condition its consent based on the prospective assignee's financial strength, credit history or any other factor which Landlord reasonably believes germane to a tenant's ability and willingness to perform the obligations of this Lease. No such assignment shall release Tenant of further liability under this Lease unless express written approval is signed by Landlord.

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11.2. Restriction on Subleasing. Tenant may not sublease all or any portion of the Leased Premises or the improvements constructed or installed on the Leased Premises without the prior written consent of Landlord.

Landlord's consent shall not be unreasonably withheld.

Any such sublease shall provide: (A) such subleasing shall be subject to the terms of this Lease; (B) such subleasing shall comply with all applicable statutes and regulations, including, without limitation, the California Subdivision Map Act and the provisions of Section 20 hereof; (C) all building improvements and alterations constructed on the Leased Premises shall have been approved by Landlord pursuant to Section 8 of this Lease; (D) Tenant shall remain liable under this Lease; (E) subtenant shall not be permitted to further assign or sublet the Leased Premises to any person or entity, including the affiliated entities stated above; and (F) each sublease shall contain a provision satisfactory to Landlord requiring the subtenant, if Landlord shall so demand as provided below, to attorn to Landlord if Tenant defaults under this Lease, and if the subtenant is notified of Tenant's default and instructed to make subtenant's rental payments to Landlord, but Landlord shall have no obligation to recognize the subtenant or to allow any subtenant to remain in possession upon the default of Tenant. Tenant's failure to comply with any of the foregoing requirements shall render any such sublease void.

11.3. Effect of Failure to Comply. Except as provided above, no encumbrance, assignment or other transfer, whether voluntary, involuntary, by operation of law, under legal process, through a receivership, bankruptcy or otherwise, shall be valid or effective without the prior written consent and approval of Landlord. Except as provided in Section 11.1 and 11.2, if Tenant attempts to make or allow to be made any subleasing, encumbrance, assignment or other transfer except in accordance with the provisions of this Section 11, then any of the foregoing events shall be deemed a breach of the conditions and restrictions of this Lease, and upon such breach, Landlord may, at its option, terminate this Lease at once by written notice, and upon such termination this Lease shall end and be of no further force.

12. CONDEMNATION
If, during the term of this Lease there is a taking, or transfer of, or damage to all or any part of the Leased Premises (Leased Premises as used herein shall include all appurtenant interests such as access rights) for a public use by any individual or entity, public or private, possessing the power of eminent domain, whether by condemnation proceedings or otherwise (hereinafter referred to as "appropriation"), the rights and obligations of Landlord and Tenant with regard to such appropriation shall be governed by the provisions of this Section.

12.1. Date of Taking. The date of taking, as used in this Section, is defined as the earliest of the following dates: (A) the date legal possession is taken, which is defined as the date, if any is established, after which the condemnor may take possession of the property as stated in an order authorizing the condemnor to take possession; (B) the date a final order of condemnation or final judgment is filed or recorded or the date a deed is recorded in the event of a voluntary sale; and (C) the date physical possession of the property is taken.

12.2. Total Taking. Total taking means an appropriation of the entire Leased Premises or so much thereof as to prevent or substantially impair the conduct of Tenant's business unless Tenant elects to continue the Lease in effect. If during the term of this Lease there is an appropriation of the Leased Premises which amounts to a total taking as herein defined, then the leasehold estate of Tenant in and to the Leased Premises shall cease and terminate as of the date of such taking, and all rentals and other charges payable by Tenant to Landlord hereunder and attributable to the Leased Premises shall be paid up to the date of such taking.

12.3. Partial Taking. The term "partial taking" shall mean the taking of a portion only of the Leased Premises which does not constitute a total taking as defined above. If during the term of this Lease there shall be a partial taking of the Leased Premises, this Lease shall terminate as to the portion of the Leased Premises so taken at the date of taking as herein defined, but said Lease shall continue in force and effect as to the remainder of the Leased Premises. The rental payable hereunder by Tenant shall, as of the date of taking, be adjusted so that Tenant shall be required to pay for the remainder of the term only such portion of such rent as the value of

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the part of the Leased Premises remaining after the taking bears to the value of the entire Leased Premises at the date of taking.

12.4. Abandonment of Proceedings. In the event the condemning agency shall abandon an eminent domain proceeding, either party hereto shall have the right to contest the condemnor's abandonment and a right to its respective costs and disbursements as defined and provided for in California law. If after the condemnor takes possession or the Tenant moves from the property sought to be condemned in compliance with an order of possession, the condemnor abandons the proceeding as to such property or a portion thereof, or if it is determined that the condemnor does not have authority to take such property or portion thereof by eminent domain and the condemnor is required by law to deliver possession of such property or such portion thereof to the party entitled to the possession thereof and pay damages as provided for in California law, then Tenant shall receive the award for costs and damages incurred by reason of Tenant being removed from possession of the Premises, but Tenant shall be entitled to retake possession of the Premises and, in the event of such repossession by Tenant, all of the terms of this Lease shall remain in operation and effect.

12.5. Allocation of Award. All compensation and damages awarded for the taking of the Leased Premises or any portion thereof shall, except as otherwise herein provided, belong to and be the sole property of Landlord.

However, any award that may be made for the taking of or injury to the Approved Improvements, and all other improvements constructed by Tenant on the Leased Premises shall belong to Tenant. Tenant shall be entitled to any award for damage to Tenant's business or on account of any cost or loss Tenant may sustain in the removal of Tenant's fixtures, equipment and furnishings, or as a result of any alterations, modifications or repairs which may be reasonably required by Tenant in order to place the remaining portion of the Leased Premises not so condemned in a suitable condition for the continuance of Tenant's tenancy. Tenant shall also be entitled to that portion of any award that may be attributable to any severance damages to the remaining leasehold interest, to any improvements constructed by Tenant, and to good will.

12.6. Cost. Each party shall bear his own costs, attorneys' fees, appraiser's fees and all other costs in connection with any matter contained in this Section, except as may be otherwise provided.

12.7. Right of Entry. Neither party hereto shall grant a right of entry to any condemnor without the written consent of the other party hereto.

13. DEFAULT
The occurrence of any one or more of the following events shall constitute a default under this Lease by Tenant:

13.1. Events of Default. The occurrence of any of the following shall constitute an event of default on the part of the Tenant:

A. Tenant fails to make the payment of any installment of rent or other sum when due hereunder (“Monetary Default”) within ten (10) days from when due.

B. Failure to perform any obligation, agreement or covenant under this Lease (“Non-Monetary Default”) and such failure continues for fifteen (15) days after written notice of such failure, or if such Non-Monetary Default cannot be cured within fifteen (15) days, Tenant has not commenced corrective action and prosecuted the same to completion with due diligence, or the Non-Monetary Default is of such a nature that it cannot be cured by any action of Tenant.

C. Failure to pay any insurance premium, lien, claim, demand, judgment or other charge provided for in this Lease to be paid or caused to be paid by Tenant at the time and in the manner as provided for in this Lease.

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D. Failure to maintain the Premises or cause the same to be maintained as provided for in this Lease.

E. Abandonment or vacation of the Premises for a continuous period in excess of thirty (30) days without payment of rent. Tenant waives any right to notice Tenant may have under Section 1951.3 of the Civil Code of the State of California, the terms of this Section 13.1 being deemed such notice to Tenant as required by said Section 1951.3.

F. Default by Tenant under the terms of any mortgage on the estate of Tenant.

G. The filing of any voluntary petition in bankruptcy by Tenant, or the filing of an involuntary petition by Tenant's creditors, which involuntary petition remains undischarged for a period of thirty (30) days. If under applicable law, the trustee in bankruptcy or Tenant has the right to affirm this Lease and continue to perform the obligations of Tenant hereunder, such trustee or Tenant shall, in such time period as may be permitted by the bankruptcy court having jurisdiction, cure all defaults of Tenant hereunder outstanding as of the date of the affirmance of this Lease and provide to Landlord such adequate assurances as may be necessary to ensure Landlord of the continued performance of Tenant's obligations under this Lease.

H. The attachment, execution or other judicial seizure of all or substantially all of Tenant's assets or Tenant's leasehold of the Premises, if such attachment or other seizure remains undismissed or undischarged for a period of fifteen (15) days after the levy thereof.

I. The admission by Tenant in writing of its inability to pay its debts as they become due; J. A general assignment by Tenant for the benefit of creditors.

K. Failure to maintain compliance with Economic Development Administration Civil Rights Provisions and Certificate on Non-relocation.

L. Failure to complete construction of proposed development outlined in Exhibit C, which is attached hereto and made a part hereof, within 5 years.

14. REMEDIES IN EVENT OF DEFAULT

14.1. Termination. In the event of the occurrence of any event of default, Landlord shall have the right to give a written termination notice to Tenant, and on the date specified in such notice, Tenant's right to possession shall terminate, and this Lease shall terminate unless on or before such date all Rent in arrears and all costs and expenses incurred by or on behalf of Landlord hereunder shall have been paid by Tenant and all other events of default of this Lease by Tenant at the time existing shall have been fully remedied to the satisfaction of Landlord.

At any time after such termination, Landlord may recover possession of the Premises or any part thereof and expel and remove therefrom Tenant and any other person occupying the same, including any subtenant or subtenants notwithstanding Landlord's consent to any sublease, by any lawful means, and again repossess and enjoy the Premises without prejudice to any of the remedies that Landlord may have under this Lease, or at law or equity by any reason of Tenant's default or of such termination. Landlord hereby reserves the right, but shall not have the obligation, to recognize the continued possession of any subtenant. The delivery or surrender to Landlord by or on behalf of Tenant of keys, entry codes, or other means to bypass security at the Premises shall not terminate this Lease.

14.2. Continuation after Default. Even though an event of default may have occurred, this Lease shall continue in effect for so long as Landlord does not terminate Tenant's right to possession under Section 14.1 hereof. Landlord shall have the remedy described in California Civil Code Section 1951.4 ("Landlord may continue this Lease in effect after Tenant's breach and abandonment and recover Rent as it becomes due, if

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Tenant has the right to sublet or assign, subject only to reasonable limitations"), or any successor code section.

Accordingly, if Landlord does not elect to terminate this Lease on account of any event of default by Tenant, Landlord may enforce all of Landlord's rights and remedies under this Lease, including the right to recover Rent as it becomes due. Acts of maintenance, preservation or efforts to lease the Premises or the appointment of a receiver under application of Landlord to protect Landlord's interest under this Lease or other entry by Landlord upon the Premises shall not constitute an election to terminate Tenant's right to possession.

14.3. Damages After Default. Should Landlord terminate this Lease pursuant to the provisions of Section 14.1 hereof, Landlord shall have the rights and remedies of a Landlord provided by Section 1951.2 of the Civil Code of the State of California, or any successor code sections. Upon such termination, in addition to any other rights and remedies to which Landlord may be entitled under applicable law or at equity, Landlord shall be entitled to recover from Tenant: (1) the worth at the time of award of the unpaid Rent and other amounts which had been earned at the time of termination, (2) the worth at the time of award of the amount by which the unpaid Rent and other amounts that would have been earned after the date of termination until the time of award exceeds the amount of such Rent loss that Tenant proves could have been reasonably avoided; (3) the worth at the time of award of the amount by which the unpaid Rent and other amounts for the balance of the Term after the time of award exceeds the amount of such Rent loss that the Tenant proves could be reasonably avoided; and (4) any other amount and court costs necessary to compensate Landlord for all detriment proximately caused by Tenant's failure to perform Tenant's obligations under this Lease or which, in the ordinary course of things, would be likely to result therefrom. The "worth at the time of award" as used in (1) and (2) above shall be computed at the Applicable Interest Rate (defined below). The "worth at the time of award" as used in (3) above shall be computed by discounting such amount at the Federal Discount Rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). If this Lease provides for any periods during the Term during which Tenant is not required to pay Base Rent or if Tenant otherwise receives a Rent concession, then upon the occurrence of an event of default, Tenant shall owe to Landlord the full amount of such Base Rent or value of such Rent concession, plus interest at the Applicable Interest Rate, calculated from the date that such Base Rent or Rent concession would have been payable.

14.4. Landlord’s Option to Cure. Notwithstanding the foregoing, if Tenant fails to provide necessary repair and maintenance of the Premises and all improvements thereon, Landlord shall have the right but not the obligation, after notice provided for above, and failure of Tenant to cure or commence and diligently pursue a cure to such default, to enter the Premises and take all corrective action necessary in the sole judgment of Landlord. Any such entry shall be at the sole risk and expense of Tenant. Tenant shall immediately, upon presentation of a statement therefor, reimburse Landlord for all costs incurred by Landlord in taking such corrective action with interest on said sums from the date of payment by Landlord at the lower of: (A) the highest rate allowed by law; or (B) two points over the prime rate charged from time to time by the Bank of America, or if the Bank of America no longer exists, an equivalent institution. Nothing in this Section shall: (i) require Landlord to take any corrective action on the Premises; (ii) diminish the rights and remedies of Landlord under this Lease, whether or not Landlord elects to take such corrective action; and (iii) cause a waiver by Landlord of any of its rights and remedies under this Lease. Any such reentry shall be allowed by Tenant without hindrance, and Landlord shall not be liable in damages for any such reentry, or be guilty of trespass or forcible entry.

14.5. Remedies Cumulative. All of Landlord’s rights, privileges and elections or remedies are cumulative and not alternative, to the extent permitted by law and except as otherwise provided herein.

14.6. Replacement of Statutory Notice Requirements. When this Lease requires service of a notice, that notice shall replace rather than supplement any equivalent or similar statutory notice, including any notice required by California Code of Civil Procedure Section 1161 or any similar or successor statute. When a statute requires service of a notice in a particular manner, service of that notice (or a similar notice required by this Lease) in the manner required by this Section 14.6 shall replace and satisfy the statutory service-of-notice procedures, including those required by California Code of Civil Procedure Section 1162 or any similar or successor statute.

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15. LANDLORD'S RIGHT TO SELL ITS INTEREST

15.1. Landlord's Right to Sell. Landlord shall have the right to sell all of its interest in the Leased Premises and any lease with respect thereto. If Landlord chooses to exercise such right to sell, and whether such sale is to a public entity or non-public entity, Landlord shall conduct the sale in accordance with the legal requirements imposed upon a municipality by law.

15.2. Landlord's Release from Liability Upon Sale. In the event of any such sale by Landlord, Landlord shall be and is hereby entirely freed and relieved of all liability under all of its covenants and unaccrued obligations contained in or derived from this Lease arising out of any act, occurrence or omission occurring after the consummation of such sale.

16. ESTOPPEL CERTIFICATES
Landlord and Tenant shall, respectively, at any time and from time to time upon not less than ten (10) days' prior written request by the other, deliver to the requesting party an executed and acknowledged statement in writing certifying:

16.1. That this Lease is unmodified and in full force and effect (or if there has been any modification(s) thereof that the same is in full force and effect as modified, and stating the nature of the modification or modifications);

16.2. That to its knowledge the requesting party is not in default under this Lease (or if any such default exists, the specific nature and extent thereof),

16.3. The date to which rent and other charges have been paid in advance, if any; and

16.4. Such other statements as Landlord or Tenant reasonably requests.

Each certificate delivered pursuant to this Section may be relied on by any prospective purchaser or transferee of the Leased Premises or of Landlord's or Tenant's interest hereunder or by any fee mortgagee of the Leased Premises or of Landlord's or Tenant's interest hereunder or by any assignee of any such mortgagee. Tenant shall be liable to Landlord for all damages suffered by Landlord attributable to Tenant's failure to timely deliver an accurate estoppel, including loss or renegotiation of a sale, financing or bond financing.

17. OWNERSHIP OF IMPROVEMENTS
At the expiration or sooner termination of the term of this Lease, all improvements pertaining to the real property shall become the property of Landlord.

18. SUBORDINATION FOR BENEFIT OF LANDLORD
If Landlord desires this Lease to be subordinated to any mortgage, deed of trust or other encumbrance ("Fee Mortgage") now or hereafter placed upon the Leased Premises by Landlord, and all advances, whether obligatory or optional made on the security thereof, and to all renewals, modifications, consolidations, replacements and extensions thereof, this Lease, at Landlord's election, shall be subordinate to any such Fee Mortgage provided Landlord first obtains from the lender a written agreement that provides substantially as follows: As long as Tenant performs its obligations under this Lease, no foreclosure of, deed given in lieu of foreclosure of, or sale under the encumbrance, and no steps or procedures taken under the encumbrance, shall affect Tenant's rights under this Lease.

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Subject to the foregoing, Tenant agrees to execute any documents required to effectuate such subordination, and failing to do so within ten (10) days after Landlord's written request to Tenant therefore, does hereby irrevocably appoint Landlord as Tenant's attorney-in-fact in Tenant's name to do so.

19. HYPOTHECATION OF LEASEHOLD INTEREST
Tenant is hereby given the right by Landlord, in addition to any other rights herein granted, without Landlord's prior written consent, to mortgage its interest in this Lease, under one or more leasehold Mortgage(s) and assign its interest in this Lease, as collateral security for such Mortgage(s) to secure any bona fide loan upon the condition that all rights acquired under such leasehold Mortgage(s) shall be subject to each and all of the covenants, conditions and restrictions set forth in this Lease, and to all rights and interest of Landlord herein, none of which covenants, conditions or restrictions is or shall be deemed waived by Landlord by reason of the right given so to mortgage such interest in this Lease, except as expressly provided herein. If Tenant shall mortgage this leasehold, and if the holder(s) of such Mortgage(s) shall, within thirty (30) days of execution, send to Landlord a true copy thereof, together with written notice specifying the name and address of the Mortgagee(s) and the pertinent recording data with respect to such Mortgage(s), Landlord agrees that (effective upon receipt of such notice) so long as any such leasehold Mortgage(s) shall remain unsatisfied of record or until written notice of satisfaction is given by the holder(s) to Landlord, the following provisions shall apply:

19.1. Except for the natural expiration of the term of this Lease, there shall be no cancellation, surrender or material modification of this Lease by joint action of Landlord and Tenant without the prior consent in writing of the leasehold Mortgagee(s);

19.2. Landlord shall, upon serving Tenant with any notice of default, simultaneously serve a copy of such notice upon the holder(s) of record of such leasehold Mortgage(s). The leasehold Mortgagee(s) shall thereupon have sixty (60) days, after service on it of such a notice, either to cure such default or breach, if the same can be cured by the payment of money, or if such default or breach is not so curable or cannot be remedied within said sixty (60) day period, if such holder, within said period, shall (A) commence in good faith to cure such default or breach if curable and thereafter diligently prosecute the same to completion, or (B) institute proceedings for the foreclosure of such mortgage and thereafter diligently prosecute the same to completion; provided such holder keeps and performs all of the covenants and conditions of this Lease herein provided to be kept and performed by Tenant, and capable of being performed by such holder, until such time as Tenant or such holder shall cure any defaults hereunder (if curable) or until the leasehold hereunder shall be either sold upon foreclosure pursuant to any such mortgage or shall be released from said mortgage or reconveyed thereunder.

The time periods set forth immediately above shall be extended for delays occasioned by the application of any law, rule, court order or court decree restraining or prohibiting such leasehold Mortgagee(s) from taking any such action. If such leasehold Mortgagee(s) undertakes to so cure any such default by Tenant in accordance with the terms and conditions set forth in this subsection 19.2, Landlord shall not terminate this Lease. If the leasehold Mortgagee(s) has fully complied with the foregoing provisions of this subsection 19.2 but all such defaults of Tenant have not been cured by the time that Tenant's interest under this Lease is sold by a judicial or nonjudicial foreclosure sale or by deed in lieu of foreclosure, the party who acquires such leasehold estate and interest through such foreclosure sale or deed in lieu of foreclosure shall not be in default hereunder by reason of such uncured defaults, provided such party diligently prosecutes to completion the curing of all such defaults which are curable by such party.

19.3. Notwithstanding anything contained herein to the contrary, if Landlord shall elect to terminate this Lease by reason of any default of Tenant, the leasehold Mortgagee(s) shall have the right to postpone and extend the specified date for termination of this Lease as fixed by Landlord in its notice of termination, for a period of six (6) months, provided that such leasehold Mortgagee(s) shall cure or cause to be cured any then existing money defaults and meanwhile pay the rent and comply with and perform all of the other terms, conditions and provisions of this Lease on Tenant's part to be complied with and performed, and capable of being performed by such holder, other than past nonmonetary defaults, and provided further that the leasehold Mortgagee(s) shall

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forthwith take steps to acquire or sell Tenant's interest in this Lease by foreclosure of the Mortgage(s) or otherwise and shall prosecute the same to completion with all due diligence. If at the end of said six (6) month period the leasehold Mortgagee(s) shall be actively engaged in steps to acquire or sell Tenant's interest herein, the time of said Mortgagee(s) to comply with the provisions of this Section 19.3 shall be extended for such period as shall be reasonably necessary to complete such steps with reasonable diligence, but in no event shall such extension exceed an additional twelve (12) months.

19.4. Landlord agrees that the name of the leasehold Mortgagee(s) may be added to the "Loss Payable Endorsement" of any and all insurance policies required to be carried by Tenant hereunder on condition that the insurance proceeds are to be applied in the manner specified in this Lease and that the leasehold Mortgagee(s) or collateral document shall so provide.

19.5. Nothing contained herein shall require the leasehold Mortgagee(s) to cure any default of Tenant hereunder, but such failure to cure and proceed in accordance with this Section 19 shall leave Landlord free to terminate this Lease and to pursue all of its rights against Tenant.

19.6. Any act required to be performed by Tenant pursuant to the terms of this Lease may be performed by any leasehold mortgagee on Tenant's behalf and the performance of such act shall be deemed to be performance by Tenant and shall be acceptable as Tenant's act by Landlord.

20. COMPLIANCE WITH FEDERAL REQUIREMENTS

20.1. Tenant, for itself, its heirs, personal representatives, successors in interest, sub-lessees and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant running with the land that in the event facilities are constructed, maintained or otherwise operated on the said property described in this Lease for a purpose for which a Department of Transportation program or activity is extended or for another purpose involving the provision of similar services or benefits, Tenant shall maintain and operate such facilities and services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally-Assisted Programs of the Department of Transportation- Effectuation of Title VI of the Civil Rights Act of 1964, or as said Regulations may be amended.

20.2. Tenant, for itself, its personal representatives, successors in interest and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant running with the land:
(A) that no person on the grounds of race, color or national origin shall be excluded from participation in, denied the benefits of or be otherwise subjected to discrimination in the use of said facilities; (B) that in the construction of any improvements on, over or under such land and the furnishing of services thereon, no person on the grounds of race, color or national origin shall be excluded from participation in, denied the benefits of or otherwise be subject to discrimination; and (C) that Tenant shall use the Premises in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in FederallyAssisted Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and assaid Regulations may be amended.

20.3. Tenant agrees that it shall insert Sections 20.1 and 20.2 in any lease agreement by which said Tenant grants a right or privilege to any person, firm or corporation to render accommodations and/or services to the public on the Premises herein leased.

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21. MISCELLANEOUS

21.1. Attorneys' Fees. In the event any action is brought by Landlord to recover any rent due and unpaid hereunder or to recover possession of the Leased Premises, or in the event any action is brought by Landlord or Tenant against the other to enforce or for the breach of any of the terms, covenants or conditions contained in this Lease, the prevailing party shall be entitled to recover reasonable attorneys' fees to be fixed by the Court, together with costs of suit therein incurred.

21.2. Waiver. No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this Lease shall be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions and conditions hereof. No delay or omission of Landlord to exercise any right or remedy shall be construed as a waiver of any such right or remedy or of any default by Tenant under this Lease. The various rights and remedies reserved to Landlord herein including those not specifically described in this Lease shall be cumulative and, except as otherwise provided by California statutory law in force at the time of execution of this Lease, Landlord may pursue any or all of such rights and remedies whether at the same time or otherwise.

21.3. Holding Over. If Tenant shall hold over the Leased Premises after the expiration of the term hereof with the consent of Landlord, either express or implied, such holding over shall be construed to be only a tenancy from month to month, subject to all the covenants, conditions and obligations hereof, except that Tenant shall pay to Landlord 200% of Base Rent due as of the expiration of the term; terminable on thirty (30) days written notice given at any time by either party; provided, however, that nothing herein contained shall be construed to give Tenant any rights to so hold over and to continue in possession of the Leased Premises after the expiration of the term hereof.

21.4. Surrender at End of Term. Upon the end of the term of this Lease, as provided herein, or any extension thereof, or sooner termination of this Lease, Tenant shall surrender to Landlord all and singular the Leased Premises, together with all improvements, except as hereinabove provided, and all fixtures appurtenant to the real estate in broom-clean, good condition, reasonable wear and tear excepted.

21.5. Lease Binding Upon Successors and Assigns. Subject to the limitations on assignment and subleasing, each of the terms, covenants and conditions of this Lease shall extend to and be binding on and inure to the benefit of not only Landlord and Tenant, but each of their successors and assigns. Whenever in this Lease reference is made to either Landlord or Tenant, the reference shall be deemed to include, wherever applicable, the successors and assigns and such parties the same as if in every case expressed.

21.6. Inspection. Landlord reserves the right for Landlord and Landlord's agents and representatives to enter upon the Leased Premises at any reasonable time upon five (5) days prior written notification for the purpose of attending to Landlord's interest hereunder, and to inspect the Leased Premises.

21.7. Relationship of Parties. The relationship of the parties hereto is that of Landlord and Tenant, and it is expressly understood and agreed that Landlord does not in any way nor for any purpose become a partner of Tenant or a joint venturer with Tenant in the conduct of Tenant's business or otherwise.

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

21.9. Memorandum of Lease. This Lease shall not be recorded, but the parties agree to execute and deliver a Memorandum of this Lease in recordable form.

21.10. Quitclaim. At the expiration or earlier termination of this Lease, Tenant shall execute, acknowledge and deliver to Landlord within five (5) days after written demand from Landlord to Tenant any quitclaim deed or

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other document required by any reputable title company to remove the cloud of this Lease from the real property subject to this Lease.

21.11. Number and Gender. Whenever the singular number is used in this Lease and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders, and the word "person" shall include corporation, firm or association. If there is more than one Tenant, the obligations imposed under this Lease upon Tenant shall be joint and several.

21.12. Headings and Titles. The marginal headings or titles to the Sections of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part of this Lease.

21.13. Compliance with Governmental Regulations. Tenant shall, at its own cost and expense, promptly and properly, comply with and execute, including the making of any alteration to the Leased Premises, all orders, regulations, laws and requirements of all governmental authorities arising from the use or occupancy of, or applicable to, the Leased Premises ("Applicable Laws").

21.14. Entire Agreement; Amendments. This Lease, including the exhibits attached hereto and all documents referenced herein, all of which are incorporated herein by reference, contain the entire agreement of the parties hereto with respect to the matters covered hereby, and no other previous agreement, statement or promise made by any party hereto which is not contained herein shall be binding or valid. No amendment or modification to this Lease shall be effective unless in writing and signed by both Landlord and Tenant.

21.15. Force Majeure. Except as to the payment of rent, neither of the parties hereto shall be chargeable with, liable for, or responsible to, the other for anything or in any amount for any delay caused by fire, earthquake, explosion, flood, hurricane, the elements, acts of God, or the public enemy, action or interference of governmental authorities or agents, war, invasion, insurrection, rebellion, riots, strikes, or lockouts or any other cause whether similar or dissimilar to the foregoing, which is beyond the control of such parties and any delay due to said causes or any of them shall not be deemed a breach of or default in the performances of this Lease.

21.16. Disclaimer of Representation. Except as otherwise specifically provided herein, Landlord has made no representations or warranties to the Tenant concerning the Leased Premises, the present use thereof or the suitability for Tenant's intended use of the property. The foregoing disclaimer includes, without limitation, topography, climate, air, water, water rights, utilities, present and future zoning, soil, subsoil, drainage, access to public roads, proposed routes of roads, or extension thereof, or effect of any state or federal environmental protection laws or regulations. Tenant represents and warrants to Landlord that he and his representatives have made or will make their own independent inspection and investigation of the Leased Premises and Tenant, in entering into this Lease, is relying solely on such inspection and investigation. No patent or latent physical condition of Leased Premises, whether or not known or discovered, shall affect the rights of either party hereto.

Any agreement, warranties or representations not expressly contained herein shall in no way bind either Tenant or Landlord. Landlord and Tenant waive any right of rescission and all claims for damages by reason of any statement, representations, warranty, promise and agreement, if any, not contained in this Lease.

21.17. Priority of Lease. This Lease is subject and junior to all existing easements, covenants, conditions and restrictions and other matters and encumbrances of record.

21.18. Late Charge. Both Landlord and Tenant acknowledge and agree that Landlord is dependent on the revenue from Tenant for Airport operations and that it would be extremely difficult to estimate the damages to Landlord from late payment by Tenant. If any installment of Base Rent or other payment due from Tenant is not received by Landlord within ten (10) days of the date upon which it is due, Tenant shall pay to Landlord an additional charge of ten percent (10%) of the overdue payment as a late charge.

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21.19. Interest on Past Due Obligations. Any amount due from Tenant to Landlord which is not paid when due shall bear interest at an annual rate equal to the higher of (A) ten percent (10%) per annum, or (B) five percent (5%) per annum in excess of the prevailing rate established by the Federal Reserve Bank at San Francisco on advances to member banks on the twenty-fifth (25th) day of the month preceding the Commencement Date (but not more than the maximum rate permissible by law), from the due date until paid, but the payment of such interest shall not excuse or cure any default by Tenant. Said interest is in addition to the late charge due pursuant to Section 21.18.

21.20. Rules and Regulations. Tenant shall comply, and shall ensure that its employees, visitors and guests comply, with the Rules and Regulations established by Landlord for use of the Airport or the Premises, as the same may be amended from time to time by Landlord (“Airport Rules and Regulations”). Landlord has provided Tenant with a copy of the Airport Rules and Regulations in effect as of the Commencement Date, and shall provide Tenant with a copy of any and all rules and regulations and any amendments thereto that may be established by Landlord during the term hereof. As required by the Airport Rules and Regulations, Tenant shall maintain on the Premises a copy of the Airport Rules and Regulations and make it available to all persons upon request. Landlord shall not be responsible to Tenant for the nonperformance of any other tenant or occupant of the Airport of any of said Airport Rules and Regulations.

21.21. Airport Operation. It is understood and agreed that general control over said Airport and all flying activities in connection therewith are vested by law in the City acting by and through its City Council, Committees and Officers appointed by such City Council. In the general operation of any activities conducted under the terms of this Lease, Tenant agrees to comply with the Airport Rules and Regulations and all other reasonable rules and regulations adopted by the City for the use and operation of the Airport which are not in conflict with the terms of this Lease.

21.22. Continued Operation. Save and except as to acts beyond its control, the City does hereby obligate itself during the Term hereof to continue the operation of said Airport as a public airport, consistent with public regulations.

21.23. Payments and Notices. Any notice to be given or other document to be delivered by either party to the other party may be given by personal delivery, generally recognized overnight courier, prepaid, or may be deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed to the party for whom intended as follows:

To Landlord: City of Paso Robles
Municipal Airport
1000 Spring Street
Paso Robles, CA 93446
To Tenant: Jim and Debi Saunders
7310 North River Road
Paso Robles, CA 93446
Either party hereto may from time to time by written notice to the other party designate a different address which shall be substituted for the one specified above. Notices and documents shall be served upon receipt or, if any notice or other document is sent by registered or certified mail, as provided above, the same shall be deemed served or delivered seventy-two (72) hours after the mailing thereof.

This Municipal Airport Property Lease / Nonsubordinated Airport Property Lease has been executed on this ______________ day of _________________, 2023
Landlord: Tenant:

CITY OF PASO ROBLES Jim and Debi Saunders

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____________________________________ _____________________________________ Ty Lewis, City Manager Jim Saunders
_____________________________________
Debi Saunders
Attest:
_____________________________________
Melissa Boyer, City Clerk
Approved as to Form:
______________________________________
Elizabeth Hull, City Attorney

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EXHIBIT ‘A’
Legal Description of Leased Premises
Lot 2 of Parcel Map PR 97-229

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EXHIBIT B

HAZARDOUS MATERIALS LIST
None Submitted.

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EXHIBIT C
Building/Development Plans

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City Council Agenda July 18, 2023
Council Agenda Report
From: Ricky Lehr, Police Sergeant
Subject: Acceptance of Annual Report on Military Equipment Use Pursuant to AB 481 and Renewal of Ordinance No. 1119.CEQA Determination: The City find that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.

Date: July 18, 2023
Facts

1. Governor Gavin Newsom signed Assembly Bill 481 into law in 2021; the bill requires law enforcement agencies to obtain approval of an ordinance adopting a military equipment policy through that agency’s governing body (i.e. City Council).

2. On June 21, 2022, City Council adopted Ordinance 1119 N.S, adopting the City’s Military Equipment Use Policy.

3. Upon approval of a military equipment policy, the Chief of police, or the designee, must annually submit to the City Council a military equipment report which details information about how and when the military equipment was used in the preceding calendar year (Government Code 7072).

4. The Paso Robles Police Department possesses and uses equipment regulated by this ordinance (Attachment 1).

5. The Paso Robles Police Department has implemented a military use policy in accordance with Assembly Bill 481 (Attachment 2). Per the policy, section 706.1, the Paso Robles Police Department must submit an annual report for military equipment use.

6. The term “military equipment” is defined in California Government Code 7070(c) and includes many items which are considered industry standard, are commercially produced, not obtained from the military.

7. Assembly Bill 481 also requires the City Council to review and vote on whether to renew the military equipment use ordinance at a regular meeting (Government Code 7071).

Options

1. Take no action;

2. Approve the annual military equipment report pursuant to California Government Code 7072 and vote to renew Ordinance 1119 N.S.;

3. Provide alternative direction to staff.

Analysis and Conclusions
AB 481 was enacted to increase transparency, accountability, and oversight surrounding the use and acquisition of military equipment by state and local law enforcement. It requires law enforcement agencies to obtain approval from the legislative bodies that oversee them before purchasing, raising funds for, or acquiring military equipment, by any means. Law enforcement agencies are also required to obtain approval by their legislative bodies before collaborating with another law enforcement agency in

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the deployment or use of military equipment within the law enforcement agencies jurisdiction, or before using any new or existing military equipment not previously approved.

Under AB 481, a governing body approval must take the form of an ordinance adopting a publicly released, written military equipment use policy, which must address a number of specific topics, including the type, quantity, capabilities, purposes, and authorized uses of each type of military equipment,the fiscal impact of their acquisition and use, the legal and procedural rules that govern their use, the training required by any officer allowed to use them, the mechanisms in place to ensure policy compliance, and the procedures by which the public may register complaints. This ordinance must be renewed by a vote of the governing body each year.

AB 481 also requires any law enforcement agency that receives approval for the use of military equipment to submit annual reports to the governing body regarding the use of the equipment, any complaintsreceived, any internal audits or other information about violations of the military equipment use policy, the cost of such use, and other similar information. Law enforcement incidents can be unpredictable and complex. In order to de-escalate violent and tense situations at times special equipment, tools or resources may be necessary to reduce the possibility of harm to community members, individuals directly involved in the incident and officers and increase the likelihood of a positive outcome. Items identified as “military equipment” include, but are not limited to, unmanned aerial (Drones) or ground vehicles, bulletproof vehicles, pepper balls, less lethal 40mm projectile launchers and distraction devices. These tools have been tested in the field and are used to help enhance citizen safety, officer safety and reduce the need for escalation of force. They are commonly utilized by law enforcement and their use is considered best practices. The Department has not discovered other reasonable alternatives for these tools that can achieve the same objectives of community member safety and officersafety asthese tools can do.

The Department is committed to utilizing equipment that helps to safeguard the community and reduce the risk of escalating volatile situations that might rise to the level of a lethal encounter.

The ordinance and Policy #706 provide for safeguards to the public’s safety, welfare, and civil rights and ensures transparency, oversight and accountability measures are in place. The Department will be required to conduct annual audits of the equipment to ensure compliance with the policy, annually report to City Council the use of this equipment, seek approval prior to purchasing tools deemed to be “military equipment.”
Since adopting this policy, the Paso Robles Police Department has purchased two DJI MAVIC MINI UAS drones (Attachment 1). The Paso Robles Police Department has not retired any approved military equipment over the past year.

Fiscal Impact
None
CEQA Determination
The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.

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Recommendation
(Option 2)
Approve the annual military equipment report pursuant to AB 481.

Attachments

1. Military Equipment Annual Report

2. PRPD Military Equipment Policy 706

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MILITARY EQUIPMENT

1. Unmanned Aircraft System (UAS): An unmanned aircraft along with the associated equipment necessary to control it remotely.
a. Description, quantity, and capabilities.
i. DJI MAVIC ENTERPRISE DUAL ADVANCED, cost: approx. $7,000 with accessories. Purchased 1 no cost for the second, was received on County Homeland Security Grant, quantity: 2, UAS that has a color and inferred camera as well as audible speaker and light. Capable of video recording and weighs approximately 899 grams, approx. 30 minutes of flight time. ii. DJI MAVIC MINI, cost: $500 each, quantity: 2. Miniature UAS that weighs approximately 249 grams and is able to record video and audio with approximately 30 minutes of flight time.
b. Purpose
To be deployed when its view would assist officers or incident commanders with the following situations, which include but are not limited to:
i. Major collision investigations.
ii. Search for missing persons.
iii. Natural disaster management.
iv. Crime scene photography.
v. SWAT, tactical or other public safety and life preservation missions. vi. In response to specific requests from local, state or federal fire authorities for fire response and/or prevention.
c. Authorized Use
Only assigned operators who have completed the required training and received a Part 107 Remote Pilot Certificate, shall be permitted to operate any UAS during approved missions. The Department currently has 7 certified UAS pilots. d. Expected Life Span
All UAS equipment, 3-4 years.
e. Fiscal Impact
Annual maintenance and battery replacement cost is approximately $ 2,000 f. Training
Attachment 1

City Council Agenda July 18, 2023
All Department UAS operators are licensed by the Federal Aviation Administration for UAS operation. In addition, each operator must attend training updates throughout the year. The department conducted 4 hours of UAS training. g. Legal and Procedural Rules
Use is established under FAA Regulation 14 CFR Part 107, and Department policy. It is the policy of the Department to utilize UAS only for official law enforcement purposes, and in a manner that respects the privacy of our community, pursuant to State and Federal law.
h. Complaints
The Department has not received any any complaints concerning the use of UAS.

2. 40 MM Launchers and Rounds: 40MM Launchers are utilized by Department personnel as a less lethal tool to launch impact rounds. a. Description, quantity, and capabilities.
i. DEFENSE TECHNOLOGY, 40MM SINGLE SHOT LAUNCHER, cost
$1100, quantity: 12. The 40MM Single Launcher is a tactical single shot launcher that features a rifle type stock and a Front Grip (FG) with light rail. It will fire standard 40mm less lethal ammunition, up to 4.8 inches in cartridge length. It will launch a 40MM less lethal round up to 131 feet and is only authorized to be used by officers who have received training from a Peace Officer Standards and Training “POST” certified instructor. ii. DEFENSE TECHNOLOGY, 40MM CS FERRET, cost $ 30 per round, quantity: 30. The ferret round is deployed from a 40mm launcher and contains CS (2-chlorobenzylidene malononitrile) gas. The ferret is used to deploy CS gas from a safe distance.
iii. DEFENSE TECHNOLOGY, 40MM EXTENDED RANGE DIRECT
IMPACT, cost $30 per round, quantity: 40. A less lethal light weight expanding foam projectile used for longer distances.
iv. DEFENSE TECHNOLOGY, 40MM STANDARD RANGE DIRECT
IMPACT, cost $30 per round; quantity: 120. A less lethal light weight expanding foam projectile used for close range applications. b. Purpose
To limit the escalation of conflict.
c. Authorized Use
Situations for use of the less lethal weapon systems may include, but are not limited to:
i. Self-destructive, dangerous and/or combative individuals. ii. Riot/crowd control and civil unrest incidents.
iii. Circumstances where a tactical advantage can be obtained. iv. Potentially vicious animals.

Attachment 1

City Council Agenda July 18, 2023
v. Training exercises or approved demonstrations.
d. Lifespan
DEFENSE TECHNOLOGY, 40MM SINGLE SHOT LAUNCHER, – 15 years.

DEFENSE TECHNOLOGY, 40MM CS FERRET – 5 years.

DEFENSE TECHNOLOGY, 40MM EXTENDED RANGE DIRECT – 5 years. e. Fiscal Impact
Annual maintenance is approximately $10 for each launcher. f. Training
Sworn members utilizing 40MM less lethal chemical agents or impact rounds are trained in there use by POST certified less lethal and chemical agent’s instructors. g. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize the 40mm only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
h. Complaints
The Department has not received any any complaints concerning the use of 40MM Launchers.

3. Distraction Devices: A device used to distract dangerous persons. a. Description, quantity, and capabilities.
i. DEFENSE TECHNOLOGY, model 8902 Distraction Device, quantity: 3. A low roll distraction device that produces a loud bang with a bright light.

Ideal for distracting dangerous suspects during a hostage rescue, room entry or other high-risk arrest situations.
ii. LIBERTY DYNAMIC, Reloadable Noise Flash Diversion Device, cost $130 each, quantity: 16. A low roll distraction device that produces a loud bang with a bright light. Ideal for distracting dangerous suspects during a hostage rescue, room entry or other high-risk arrest situations. iii. LIBERTY DYNAMIC, Reload for Noise Flash Diversion Device, cost $45 each, quantity: 24. This is the reload for the distraction device once it has been used.
b. Purpose
A distraction device is ideal for distracting dangerous suspects during assaults, hostage rescue, room entry or other high-risk arrest situations. To produce atmospheric overpressure and brilliant white light and, as a result, can cause short-term (6 - 8 seconds) physiological/psychological sensory deprivation to give officers a tactical advantage. c. Authorized Use
Diversionary Devices shall only be used:

Attachment 1

City Council Agenda July 18, 2023
i. By officers who have been trained in their proper use. ii. In hostage and barricaded subject situations.
iii. In high-risk warrant (search/arrest) services where there may be extreme hazards to officers.
iv. During other high-risk situations where their use would enhance officer safety.
iv. During training exercises.
d. Lifespan
DEFENSE TECHNOLOGY, model 8902 Distraction Device - 5 years.

LIBERTY DYNAMIC, Noise Flash Diversion Device – 5 years. e. Fiscal Impact
No annual maintenance.
f. Training
Prior to use, officers must attend diversionary device training that is conducted by POST certified instructors.
g. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize diversion devices only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force.
h. Complaints
The Department has not received any any complaints concerning the use of Distraction Devices. .

8. Rifles: Guns that are fired from shoulder level, having a long spirally grooved barrel intended to make bullets spin and thereby have greater accuracy over a long distance. a. Description, quantity, and capabilities.
i. Barrett .50 Caliber rifle, Model 82A1M, no cost, rifle was donated covering the entire estimated cost of $8500 each, quantity: 1. A semi-automatic rifle used by officers assigned to the special weapons and tactics “SWAT” team as snipers. The use of the rifle is reserved for disabling a vehicle in incidents where lethal force is justified, and no other reasonable means exist to stop the vehicle to protect innocent life.
ii. Barret .50 Caliber Ammunition, M33 661GR rifle round, cost $10 per round, quantity 60. A FMJ bullet designed to penetrate barriers. iii. Accuracy International.308 caliber rifle, Model R11894, cost $4,500, quantity: 2. A highly accurate and durable bolt action rifle used by officers assigned to the SWAT team as snipers.

Attachment 1

City Council Agenda July 18, 2023
iv. Hornady .308 Caliber Ammunition, 168GR ELD TAP, cost $1.25 per round. quantity:1000. A highly accurate round designed to penetrate common barriers but prevent overpenetration.
b. Purpose
To be used as precision weapons to address a threat with more precision and/or greater distances than a handgun, if present and feasible.
c. Authorized Use
Only members that are POST certified are authorized to use a rifle. d. Lifespan
Barrett .50 Caliber rifle, Model 82A1M - 15 years.

Barret .50 Caliber Ammunition, M33 661gr rifle round – 5 years.

Accuracy International .308 caliber rifle, Model R11894 – 15 years.

Hornady .308 Caliber Ammunition, 168gr ELD TAP – 5 years. e. Fiscal Impact
Annual maintenance is approximately $50 for each firearm. f. Training
Prior to using a rifle, officers must be certified by POST instructors in the operation of the rifle. Additionally, all members that operate any rifle are required to pass a range qualification two times a year.
g. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize rifles only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force. h. Complaints
The Department has not received any any complaints concerning the use of Rifles.

9. Chemical Agent and Smoke Canisters: Canisters that contain chemical agents that are released when deployed.
a. Description, quantity, and capabilities.
i. COMBINED TACTICAL SYSTEMS, SMOKE CANISTER (5210 B), cost $38, quantity: 6. When deployed, the canister emits a cloud of smoke used to cover or conceal movement. The canister is baffled to reduce the risk of fire and is indoor safe.
ii. COMBINED TACTICAL SYSTEMS, Triple-PHASER CS CANISTER (5231), cost $44 each, quantity: 8. The canister consists of three separate canisters pressed together with separating charges between each. When deployed, the canisters separate and land approximately 20 feet apart allowing for an increased dispersal area of CS gas. The canister is designed for outdoor use in crowd control situations.

Attachment 1

City Council Agenda July 18, 2023
b. Purpose
To limit the escalation of conflict where employment of lethal force is prohibited or undesirable. Situations for use of the less lethal weapon systems may include, but are not limited to:
i. Self-destructive, dangerous and/or combative individuals. ii. Riot/crowd control and civil unrest incidents.
iii. Circumstances where a tactical advantage can be obtained. iv. Potentially vicious animals.
v. Training exercises or approved demonstrations.
c. Authorized Use
Only officers who have received POST certification in the use chemical agents are authorized to use chemical agents.
d. Lifespan
COMBINED TACTICAL SYSTEMS, SMOKE CANISTER (5210 B) - 5 years.

COMBINED TACTICAL SYSTEMS, Triple-PHASER CS CANISTER (5231) – 5 years. e. Fiscal Impact
No annual maintenance
f. Training
Sworn members utilizing chemical agent canisters are certified by POST less lethal and chemical agents instructors.
g. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize chemical agents only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
h. Complaints
The Department has not received any any complaints concerning the use of Chemical Agent and Smoke Canisters:.

10. PepperBall Launcher: A device that discharges irritant projectiles. a. Description, quantity, and capabilities.
i. TIPPMANN PEPPERBALL LAUNCHER, cost $800, quantity: 2. The TIPPMANN is a compressed-air powered launcher designed to fire nonlethal PepperBall projectiles. ii. PEPPERBALL LIVE PROJECTILE, cost $2.38, quantity: 480. The LIVE projectile contains 2% PAVA pepper powder, and is designed for direct impact and area saturation, especially in confined, interior spaces.

Discharged from a PepperBall Launcher, the projectile has a velocity of Attachment 1

City Council Agenda July 18, 2023
280-350 FPS. The projectile has a direct impact of 60ft and an area of saturation of 150+ft. The projectile contains 0.5% PAVA Powder. iii. PEPPERBALL GLASS BREAKER PROJECTILE, cost $2.90, quantity:

40. The GLASS BREAKER is designed to break glass in tactical situations. Discharged from a PepperBall Launcher it is loaded one at a time.
b. Purpose
To limit the escalation of conflict. Situations for use of the less lethal weapon systems may include but are not limited to:
i. Self-destructive, dangerous and/or combative individuals. ii. Riot/crowd control and civil unrest incidents.
iii. Circumstances where a tactical advantage can be obtained. iv. Potentially vicious animals.
v. Training exercises or approved demonstrations.
c. Authorized Use
Only those officers who have been trained in the use of PepperBall launchers are authorized to use the PepperBall launchers.
d. Lifespan
PEPPERBALL SX LAUNCHER - 15 years.

PEPPERBALL LIVE PROJECTILE – 5 years.

PEPPERBALL GLASS BREAKER PROJECTLE – 5 years.
e. Fiscal Impact
Annual maintenance is approximately $25 for each launcher.

No annual maintenance for munitions.
f. Training
Sworn members utilizing PepperBall launchers and projectiles are trained in there use by POST certified less lethal and chemical agents instructors. g. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize PepperBall only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
h. Complaints
The Department has not received any any complaints concerning the use of PepperBall Launchers.

11. Shotgun Breaching Tools: Tools that are used to conduct an explosive breach.
a. Description, quantity, and capabilities.

Attachment 1

City Council Agenda July 18, 2023
i. BENELLI M4 BREACHING SHOTGUN, cost $1,900 each, quantity: 1.

This weapon allows for breachers to safely utilize shotgun breaching rounds in order to destroy deadbolts, locks, and hinges. The stand-off that is attached to the end of the barrel allows for positive placement of the gun into the correct position and vents gases to prevent overpressure. ii. ROYAL ARMS TESAR-2 BACK CAP 425 GRAIN COPPER FRANGILBE BREACHING ROUND, cost $4.50 per round, quantity: 20. The round is fired from a breaching shotgun and is used to destroy deadbolts, locks and hinges.
b. Purpose
To safely gain entry into a structure.
c. Authorized Use
Shotgun breaching may only occur after authorization by the Incident Commander or SWAT Commander in the field, and during training exercises. d. Lifespan
BENELLI M4 BREACHING SHOTGUN – 15 years.

ROYAL ARMS TESAR-2 FRANGILBE BREACHING ROUND – 5 years. e. Fiscal Impact
Annual maintenance is approximately $10 for shotgun.

No annual maintenance for munitions.
f. Training
All officers who use shotgun breaching tools shall be certified by POST instructors in the operation and use of shotgun breaching.
g. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize breaching tools only for official law enforcement purposes, and pursuant to State and Federal law. h. Complaints
The Department has not received any any complaints concerning the use of Shotgun Breaching Tools.

Attachment 1

12. Additional Information:

The Department has not retired any approved military equipment over the past year and currently does not intend to acquire amy additional military equipment at this time.

City Council Agenda July 18, 2023
Policy
706
Paso Robles Police Department
Paso Robles PD Policy Manual
Copyright Lexipol, LLC 2023/04/11, All Rights Reserved.

Published with permission by Paso Robles Police Department Military Equipment - 1
Military Equipment
706.1 PURPOSE AND SCOPE
The purpose of this policy is to provide guidelines for the approval, acquisition, and reporting requirements of military equipment (Government Code § 7070; Government Code § 7071; Government Code § 7072).
706.1.1 DEFINITIONS
Definitions related to this policy include (Government Code § 7070):

Governing body – The City of Paso Robles City Council ("City Council").

Military equipment – Includes but is not limited to the following:
• Unmanned, remotely piloted, powered aerial or ground vehicles. • Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. • High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. • Tracked armored vehicles that provide ballistic protection to their occupants. • Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units. • Weaponized aircraft, vessels, or vehicles of any kind. • Battering rams, slugs, and breaching apparatuses that are explosive in nature. This does not include a handheld, one-person ram.
• Firearms and ammunition of_.50 caliber or greater, excluding standard-issue shotguns and standard-issue shotgun ammunition.
• Specialized firearms and ammunition of less than_.50 caliber, including firearms and accessories identified as assault weapons in Penal Code § 30510 and Penal Code § 30515, with the exception of standard-issue firearms.
• Any firearm or firearm accessory that is designed to launch explosive projectiles. • Noise-flash diversionary devices and explosive breaching tools. • Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray.
• TASER® Shockwave, microwave weapons, water cannons, and long-range acoustic devices (LRADs).
• Kinetic energy weapons and munitions.
• Any other equipment as determined by the City Council or a state agency to require additional oversight.

Pursuant to Government Code § 7070(c), the following are not military equipment:

Attachment 2

City Council Agenda July 18, 2023
Paso Robles Police Department
Paso Robles PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2023/04/11, All Rights Reserved.

Published with permission by Paso Robles Police Department Military Equipment - 2
• Police versions of standard consumer vehicles
• Unarmored all-terrain vehicles (ATVs) and motorized dirt bikes • Items designed to remove a lock, such as bolt cutters, or a handheld ram designed to be operated by one person
• Standard issue shotguns
• Standard issue shotgun ammunition
• Standard issue service weapons and ammunition of less than.50 caliber • Standard service-issued handheld pepper spray
• General equipment not designated as prohibited or controlled by the federal Defense Logistics Agency
706.2 POLICY
It is the policy of the Paso Robles Police Department that members of this department comply with the provisions of Government Code § 7070 through 7075 with respect to the approval for, acquisition, funding, and use of, and reporting regarding military equipment. 706.3 MILITARY EQUIPMENT COORDINATOR
The Administrative Commander shall designate a member of this department to act as the military equipment coordinator. The responsibilities of the military equipment coordinator include but are not limited to:
(a) Acting as liaison to City Council for matters related to the requirements of this policy. (b) Identifying department equipment that qualifies as military equipment in the current possession of the Department, or the equipment the Department intends to acquire that requires approval by City Council.
(c) Conducting an inventory of all military equipment at least annually. (d) Collaborating with any allied agency that may use military equipment within the jurisdiction of Paso Robles Police Department (Government Code § 7071). (e) Preparing for, scheduling, and coordinating the annual community engagement meeting to include:

1. Publicizing the details of the meeting.

2. Preparing for public questions regarding the department's funding, acquisition, and use of equipment.
(f) Preparing the annual military equipment report for submission to the Chief of Police and ensuring that the report is made available on the department website (Government Code § 7072).

Attachment 2

City Council Agenda July 18, 2023
Paso Robles Police Department
Paso Robles PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2023/04/11, All Rights Reserved.

Published with permission by Paso Robles Police Department Military Equipment - 3
(g) Establishing the procedure for a person to register a complaint or concern, or how that person may submit a question about the use of a type of military equipment, and how the Department will respond in a timely manner.
706.4 MILITARY EQUIPMENT INVENTORY
The following constitutes a list of qualifying equipment for the Department:

See attachment: MILITARY EQUIPMENT LIST PRPD.pdf
706.5 APPROVAL
The Chief of Police or the authorized designee shall obtain approval from City Council by way of an ordinance adopting the military equipment policy. As part of the approval process, the Chief of Police or the authorized designee shall ensure the proposed military equipment policy is submitted to City Council and is available on the department website at least 30 days prior to any public hearing concerning the military equipment at issue (Government Code § 7071). The military equipment policy must be approved by City Council prior to engaging in any of the following (Government Code § 7071):
(a) Requesting military equipment made available pursuant to 10 USC § 2576a. (b) Seeking funds for military equipment, including but not limited to applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers.
(c) Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.
(d) Collaborating with another law enforcement agency in the deployment or other use of military equipment within the jurisdiction of this department. (e) Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved City Council.
(f) Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of military equipment.
(g) Acquiring military equipment through any means not provided above. 706.6 COORDINATION WITH OTHER JURISDICTIONS
This policy recognizes the need for agencies to provide assistance to each other, whether in ongoing combined or regional operations, occasional planned operations, or in exigent circumstances. Military equipment used by other agencies that are providing mutual aid to the City of Paso Robles, or otherwise engaged in law enforcement operations, shall comply with their respective military equipment use policies in rendering mutual aid or carrying out a law enforcement function to related to a criminal matter under their investigation.

Attachment 2

City Council Agenda July 18, 2023
Paso Robles Police Department
Paso Robles PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2023/04/11, All Rights Reserved.

Published with permission by Paso Robles Police Department Military Equipment - 4
706.7 ANNUAL REPORT
Upon approval of a military equipment policy, the Chief of Police or the authorized designee should submit a military equipment report to the governing body for each type of military equipment approved within one year of approval, and annually thereafter for as long as the military equipment is available for use (Government Code § 7072).

The Chief of Police or the authorized designee should also make each annual military equipment report publicly available on the department website for as long as the military equipment is available for use. The report shall include all information required by Government Code § 7072 for the preceding calendar year for each type of military equipment in department inventory.

The annual military equipment report shall, at a minimum, include the following information for the immediately preceding calendar year for each type of military equipment:
(a) A summary of how the military equipment was used and the purpose of its use. (b) A summary of any complaints or concerns received concerning the military equipment. (c) The quantity possessed for each type of military equipment. (d) If the department intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.
706.8 COMMUNITY ENGAGEMENT
Within 30 days of submitting and publicly releasing the annual report, the Department shall hold at least one well-publicized and conveniently located community engagement meeting, at which the Department should discuss the report and respond to public questions regarding the funding, acquisition, or use of military equipment (Government Code §7072). 706.9 EXTRAORDINARY CIRCUMSTANCES
This policy also recognizes that there may be very limited or extreme instances where incidents of extraordinary nature could demand the need for incident commanders to authorize Department personnel to use equipment not specified in this policy. This decision must be influenced by the totality of the circumstances, including the due regard for the public's safety, officer safety, respecting civil rights, seriousness of the situation, and other information available at that time.

Should such extreme instances occur that call for members of this Department to use equipment not specified in this policy, the incident commander shall, if practical, notify the Chief of Police via the chain of command prior to deploying such equipment. Should such circumstances occur, the Chief of Police or his/her designee, shall notify the City Council as soon as practical, and indicate any such uses in the required annual report.

Attachment 2

City Council Agenda July 18, 2023
Paso Robles Police Department
Paso Robles PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2023/04/11, All Rights Reserved.

Published with permission by Paso Robles Police Department Military Equipment - 5
706.10 COMPLAINT PROCESS
Members of the public may register complaints or concerns or submit questions about the use of each specific type of military equipment in this policy by following the Department complaint process.

Attachment 2

City Council Agenda July 18, 2023
Paso Robles PD Policy Manual
Copyright Lexipol, LLC 2023/04/11, All Rights Reserved.

Published with permission by Paso Robles Police Department Attachments - 6
Attachments
Attachment 2

City Council Agenda July 18, 2023
Attachment
Paso Robles PD Policy Manual
Copyright Lexipol, LLC 2023/04/11, All Rights Reserved.

Published with permission by Paso Robles Police Department MILITARY EQUIPMENT LIST PRPD.pdf - 7
MILITARY EQUIPMENT LIST PRPD.pdf
MILITARY EQUIPMENT LIST PRPD.pdf
Attachment 2

City Council Agenda July 18, 2023
Policy 706: Military Equipment
Attachment A
Attachment A----Page | 1

MILITARY EQUIPMENT

1. Unmanned Aircraft System (UAS): An unmanned aircraft along with the associated equipment necessary to control it remotely.
a. Description, quantity, and capabilities.
i. DJI MAVIC ENTERPRISE DUAL ADVANCED, cost: approx. $7,000 with accessories. Purchased 1 no cost for the second, was received on County Homeland Security Grant, quantity: 2, UAS that has a color and inferred camera as well as audible speaker and light. Capable of video recording and weighs approximately 899 grams, approx. 30 minutes of flight time. ii. DJI MAVIC MINI, cost: $500 each, quantity: 7. Miniature UAS that weighs approximately 249 grams and is able to record video and audio with approximately 30 minutes of flight time.
b. Purpose
To be deployed when its view would assist officers or incident commanders with the following situations, which include but are not limited to:
i. Major collision investigations.
ii. Search for missing persons.
iii. Natural disaster management.
iv. Crime scene photography.
v. SWAT, tactical or other public safety and life preservation missions. vi. In response to specific requests from local, state or federal fire authorities for fire response and/or prevention.
c. Authorized Use
Only assigned operators who have completed the required training and received a Part 107 Remote Pilot Certificate, shall be permitted to operate any UAS during approved missions.
d. Expected Life Span
All UAS equipment, 3-4 years.
e. Fiscal Impact
Annual maintenance and battery replacement cost is approximately $ 2,000 f. Training
Attachment 2

City Council Agenda July 18, 2023
Policy 706: Military Equipment
Attachment A
Attachment A----Page | 2
All Department UAS operators are licensed by the Federal Aviation Administration for UAS operation. In addition, each operator must attend training updates throughout the year.
g. Legal and Procedural Rules
Use is established under FAA Regulation 14 CFR Part 107, and Department policy. It is the policy of the Department to utilize UAS only for official law enforcement purposes, and in a manner that respects the privacy of our community, pursuant to State and Federal law.

2. 40 MM Launchers and Rounds: 40MM Launchers are utilized by Department personnel as a less lethal tool to launch impact rounds. a. Description, quantity, and capabilities.
i. DEFENSE TECHNOLOGY, 40MM SINGLE SHOT LAUNCHER, cost
$1100, quantity: 12. The 40MM Single Launcher is a tactical single shot launcher that features a rifle type stock and a Front Grip (FG) with light rail. It will fire standard 40mm less lethal ammunition, up to 4.8 inches in cartridge length. It will launch a 40MM less lethal round up to 131 feet and is only authorized to be used by officers who have received training from a Peace Officer Standards and Training “POST” certified instructor. ii. DEFENSE TECHNOLOGY, 40MM CS FERRET, cost $ 30 per round, quantity: 30. The ferret round is deployed from a 40mm launcher and contains CS (2-chlorobenzylidene malononitrile) gas. The ferret is used to deploy CS gas from a safe distance.
iii. DEFENSE TECHNOLOGY, 40MM EXTENDED RANGE DIRECT
IMPACT, cost $30 per round, quantity: 40. A less lethal light weight expanding foam projectile used for longer distances.
iv. DEFENSE TECHNOLOGY, 40MM STANDARD RANGE DIRECT
IMPACT, cost $30 per round; quantity: 120. A less lethal light weight expanding foam projectile used for close range applications. b. Purpose
To limit the escalation of conflict.
c. Authorized Use
Situations for use of the less lethal weapon systems may include, but are not limited to:
i. Self-destructive, dangerous and/or combative individuals. ii. Riot/crowd control and civil unrest incidents.
iii. Circumstances where a tactical advantage can be obtained. iv. Potentially vicious animals.

Attachment 2

City Council Agenda July 18, 2023
Policy 706: Military Equipment
Attachment A
Attachment A----Page | 3
v. Training exercises or approved demonstrations.
d. Lifespan
DEFENSE TECHNOLOGY, 40MM SINGLE SHOT LAUNCHER, – 15 years.

DEFENSE TECHNOLOGY, 40MM CS FERRET – 5 years.

DEFENSE TECHNOLOGY, 40MM EXTENDED RANGE DIRECT – 5 years. e. Fiscal Impact
Annual maintenance is approximately $10 for each launcher. f. Training
Sworn members utilizing 40MM less lethal chemical agents or impact rounds are trained in there use by POST certified less lethal and chemical agent’s instructors. e. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize the 40mm only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.

3. Distraction Devices: A device used to distract dangerous persons. a. Description, quantity, and capabilities.
i. DEFENSE TECHNOLOGY, model 8902 Distraction Device, quantity: 3. A low roll distraction device that produces a loud bang with a bright light.

Ideal for distracting dangerous suspects during a hostage rescue, room entry or other high-risk arrest situations.
ii. LIBERTY DYNAMIC, Reloadable Noise Flash Diversion Device, cost $130 each, quantity: 16. A low roll distraction device that produces a loud bang with a bright light. Ideal for distracting dangerous suspects during a hostage rescue, room entry or other high-risk arrest situations. iii. LIBERTY DYNAMIC, Reload for Noise Flash Diversion Device, cost $45 each, quantity: 24. This is the reload for the distraction device once it has been used.
b. Purpose
A distraction device is ideal for distracting dangerous suspects during assaults, hostage rescue, room entry or other high-risk arrest situations. To produce atmospheric overpressure and brilliant white light and, as a result, can cause short-term (6 - 8 seconds) physiological/psychological sensory deprivation to give officers a tactical advantage. c. Authorized Use
Diversionary Devices shall only be used:

Attachment 2

City Council Agenda July 18, 2023
Policy 706: Military Equipment
Attachment A
Attachment A----Page | 4
i. By officers who have been trained in their proper use. ii. In hostage and barricaded subject situations.
iii. In high-risk warrant (search/arrest) services where there may be extreme hazards to officers.
iv. During other high-risk situations where their use would enhance officer safety.
iv. During training exercises.
d. Lifespan
DEFENSE TECHNOLOGY, model 8902 Distraction Device - 5 years.

LIBERTY DYNAMIC, Noise Flash Diversion Device – 5 years. e. Fiscal Impact
No annual maintenance.
f. Training
Prior to use, officers must attend divisionary device training that is conducted by POST certified instructors.
g. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize diversion devices only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force.

8. Rifles: Guns that are fired from shoulder level, having a long spirally grooved barrel intended to make bullets spin and thereby have greater accuracy over a long distance. a. Description, quantity, and capabilities.
i. Barrett .50 Caliber rifle, Model 82A1M, no cost, rifle was donated covering the entire estimated cost of $8500 each, quantity: 1. A semi-automatic rifle used by officers assigned to the special weapons and tactics “SWAT” team as snipers. The use of the rifle is reserved for disabling a vehicle in incidents where lethal force is justified, and no other reasonable means exist to stop the vehicle to protect innocent life.
ii. Barret .50 Caliber Ammunition, M33 661GR rifle round, cost $10 per round, quantity 60. A FMJ bullet designed to penetrate barriers. iii. Accuracy International.308 caliber rifle, Model R11894, cost $4,500, quantity: 2. A highly accurate and durable bolt action rifle used by officers assigned to the SWAT team as snipers.

Attachment 2

City Council Agenda July 18, 2023
Policy 706: Military Equipment
Attachment A
Attachment A----Page | 5
iv. Hornady .308 Caliber Ammunition, 168GR ELD TAP, cost $1.25 per round. quantity:1000. A highly accurate round designed to penetrate common barriers but prevent overpenetration.
b. Purpose
To be used as precision weapons to address a threat with more precision and/or greater distances than a handgun, if present and feasible.
c. Authorized Use
Only members that are POST certified are authorized to use a rifle. d. Lifespan
Barrett .50 Caliber rifle, Model 82A1M - 15 years.

Barret .50 Caliber Ammunition, M33 661gr rifle round – 5 years.

Accuracy International .308 caliber rifle, Model R11894 – 15 years.

Hornady .308 Caliber Ammunition, 168gr ELD TAP – 5 years. e. Fiscal Impact
Annual maintenance is approximately $50 for each firearm. f. Training
Prior to using a rifle, officers must be certified by POST instructors in the operation of the rifle. Additionally, all members that operate any rifle are required to pass a range qualification two times a year.
g. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize rifles only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force.

9. Chemical Agent and Smoke Canisters: Canisters that contain chemical agents that are released when deployed.
a. Description, quantity, and capabilities.
i. COMBINED TACTICAL SYSTEMS, SMOKE CANISTER (5210 B), cost $38, quantity: 6. When deployed, the canister emits a cloud of smoke used to cover or conceal movement. The canister is baffled to reduce the risk of fire and is indoor safe.
ii. COMBINED TACTICAL SYSTEMS, Triple-PHASER CS CANISTER (5231), cost $44 each, quantity: 8. The canister consists of three separate canisters pressed together with separating charges between each. When deployed, the canisters separate and land approximately 20 feet apart allowing for an increased dispersal area of CS gas. The canister is designed for outdoor use in crowd control situations.

Attachment 2

City Council Agenda July 18, 2023
Policy 706: Military Equipment
Attachment A
Attachment A----Page | 6
b. Purpose
To limit the escalation of conflict where employment of lethal force is prohibited or undesirable. Situations for use of the less lethal weapon systems may include, but are not limited to:
i. Self-destructive, dangerous and/or combative individuals. ii. Riot/crowd control and civil unrest incidents.
iii. Circumstances where a tactical advantage can be obtained. iv. Potentially vicious animals.
v. Training exercises or approved demonstrations.
c. Authorized Use
Only officers who have received POST certification in the use chemical agents are authorized to use chemical agents.
d. Lifespan
COMBINED TACTICAL SYSTEMS, SMOKE CANISTER (5210 B) - 5 years.

COMBINED TACTICAL SYSTEMS, Triple-PHASER CS CANISTER (5231) – 5 years. e. Fiscal Impact
No annual maintenance
f. Training
Sworn members utilizing chemical agent canisters are certified by POST less lethal and chemical agents instructors.
g. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize chemical agents only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.

10. PepperBall Launcher: A device that discharges irritant projectiles. a. Description, quantity, and capabilities.
i. TIPPMANN PEPPERBALL LAUNCHER, cost $800, quantity: 2. The TIPPMANN is a compressed-air powered launcher designed to fire nonlethal PepperBall projectiles. ii. PEPPERBALL LIVE PROJECTILE, cost $2.38, quantity: 480. The LIVE projectile contains 2% PAVA pepper powder, and is designed for direct impact and area saturation, especially in confined, interior spaces.

Discharged from a PepperBall Launcher, the projectile has a velocity of Attachment 2

City Council Agenda July 18, 2023
Policy 706: Military Equipment
Attachment A
Attachment A----Page | 7
280-350 FPS. The projectile has a direct impact of 60ft and an area of saturation of 150+ft. The projectile contains 0.5% PAVA Powder. iii. PEPPERBALL GLASS BREAKER PROJECTILE, cost $2.90, quantity:

40. The GLASS BREAKER is designed to break glass in tactical situations. Discharged from a PepperBall Launcher it is loaded one at a time.
b. Purpose
To limit the escalation of conflict. Situations for use of the less lethal weapon systems may include but are not limited to:
i. Self-destructive, dangerous and/or combative individuals. ii. Riot/crowd control and civil unrest incidents.
iii. Circumstances where a tactical advantage can be obtained. iv. Potentially vicious animals.
v. Training exercises or approved demonstrations.
c. Authorized Use
Only those officers who have been trained in the use of PepperBall launchers are authorized to use the PepperBall launchers.
d. Lifespan
PEPPERBALL SX LAUNCHER - 15 years.

PEPPERBALL LIVE PROJECTILE – 5 years.

PEPPERBALL GLASS BREAKER PROJECTLE – 5 years.
e. Fiscal Impact
Annual maintenance is approximately $25 for each launcher.

No annual maintenance for munitions.
f. Training
Sworn members utilizing PepperBall launchers and projectiles are trained in there use by POST certified less lethal and chemical agents instructors. g. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize PepperBall only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.

11. Shotgun Breaching Tools: Tools that are used to conduct an explosive breach. a. Description, quantity, and capabilities.

Attachment 2

City Council Agenda July 18, 2023
Policy 706: Military Equipment
Attachment A
Attachment A----Page | 8
i. BENELLI M4 BREACHING SHOTGUN, cost $1,900 each, quantity: 1.

This weapon allows for breachers to safely utilize shotgun breaching rounds in order to destroy deadbolts, locks, and hinges. The stand-off that is attached to the end of the barrel allows for positive placement of the gun into the correct position and vents gases to prevent overpressure. ii. ROYAL ARMS TESAR-2 BACK CAP 425 GRAIN COPPER FRANGILBE BREACHING ROUND, cost $4.50 per round, quantity: 20. The round is fired from a breaching shotgun and is used to destroy deadbolts, locks and hinges.
b. Purpose
To safely gain entry into a structure.
c. Authorized Use
Shotgun breaching may only occur after authorization by the Incident Commander or SWAT Commander in the field, and during training exercises. d. Lifespan
BENELLI M4 BREACHING SHOTGUN – 15 years.

ROYAL ARMS TESAR-2 FRANGILBE BREACHING ROUND – 5 years. e. Fiscal Impact
Annual maintenance is approximately $10 for shotgun.

No annual maintenance for munitions.
f. Training
All officers who use shotgun breaching tools shall be certified by POST instructors in the operation and use of shotgun breaching.
g. Legal and Procedural Rules
It is the policy of the DEPARTMENT to utilize breaching tools only for official law enforcement purposes, and pursuant to State and Federal law.

Attachment 2

City Council Agenda July 18, 2023
Council Agenda Report
From: Paul Patti, Battalion Chief/Fire Marshal
Subject: Approval of the Cost Report for Costs Incurred Abating Public Nuisance Parcels CEQA Determination: The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Date: July 18, 2023
Facts

1. On June 20, 2023, the City Council approved Resolution 23-082, confirming weeds or noxious growth on specific properties within the City to be a nuisance.

2. “Notice to Abate” letters were mailed to the property owner address on file with the county assessor on two separate occasions; additional notice was mailed to each occupant of the physical address; and letters returned had the properties staked with a copy of the need to abate.

3. The City entered into a Maintenance Services Agreement with KD Jani to abate unaddressed properties. As of June 21, 2023, 15 of the initial 1,070 properties remained in violation and abatement work commenced.

4. Costs for each abated parcel were tracked and are attached as Exhibit A.

Options

1. Take no action.

2. Confirm the cost report including the associated administrative fees for submission to the County Auditor-Controller.

3. Amend or modify the resolution as submitted.

4. Provide alternative direction to staff.

Analysis and Conclusions
Through its delegated authority, Paso Robles Fire and Emergency Services (PRFES) works to eliminate community fire hazards created by dry vegetation (weeds), consistent with Government Code sections 39561-39588 and Paso Robles Municipal Code Chapter 16.10. This work includes a public information campaign, letters to property owners, and occupants of parcels found in violation, and individual property assessments.

PRFES made reasonable attempts to achieve safety regulation compliance for those properties found in Exhibit A. These fifteen (15) properties nonetheless remained in violation and were abated to abatement ordinance standards, through an approved contractor.

Fiscal Impact
None for this action. Cost associated with the City ordered work will be recouped via direct invoice or through a special assessment lien on the negligent properties, if necessary. The charges for each of the

City Council Agenda July 18, 2023
unabated properties covers the full cost of the abatement, including administrative oversight. The administrative costs incurred by the City for properties that did abate after receiving notice, are not recouped.

CEQA
The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Recommendation
Approve Resolution 23-XXX, confirming the cost report of abated parcels described in Exhibit A including the associated administrative fees and submit to the County Auditor-Controller.

Attachments

1. Resolution 23-XXX
a. Exhibit A – Assessor’s Parcel Number, address, owner, invoice amount, and administrative fees.

City Council Agenda July 18, 2023
Attachment 1
RESOLUTION 23-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL PASO DE ROBLES

CONFIRMING THE ATTACHED COST REPORT FOR WEED ABATED PARCELS

AND AUTHORIZES THE COSTS BE FORWARDED TO THE COUNTY FOR INCLUSION ON THE NEXT TAX BILLS
WHEREAS, the City Council of El Paso de Robles(“City”) on June 20, 2023 adopted Resolution 23-082 “A resolution of the City Council of El Paso de Robles confirming existence of a public nuisance, therefore creating a potential fire hazard on various properties throughout the City and ordering the Fire Chief to abate the nuisance”; and
WHEREAS, the Confirmation of Nuisance, among other things:
 Confirmed that weeds or noxious growth growing on certain properties within the City were a nuisance.
 Directed the Fire Chief to “Abate” the nuisance parcels as outlined in section 16.10 of the Paso Robles Municipal Code.
 Invited Property owners to show cause why such condition should not be condemned as a public nuisance; and
WHEREAS, the Fire Chief had the parcels identified in Exhibit A abated to the adopted standards In Ordinance 16.10; and
WHEREAS, the associated costs for abatement, including a one-hundred percent administrative fee, must be considered, and confirmed by Council prior to submission to the county auditor-controller for inclusion on the next regular tax bill; and
WHEREAS, the City has provided all requisite notice and hearing procedures for imposition of the attached abatement costs consistent with Government Code sections 39561—39588 and Paso Robles Municipal Code Chapter 16.10.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EL PASO DE ROBLES DOES HEREBY RESOLVE AS FOLLOWS:

Section 1. The City Council hereby confirms the cost report attached as Exhibit A and approves and directs the Fire Chief (or his designee) to forward the costs to the county auditorcontroller for inclusion as a levy against the parcels on the next regular tax bill.

Section 2. This Resolution is not subject to the provisions of the California Environmental Quality Act (CEQA) because it can be seen with certainty that there is no possibility the project will have a significant effect on the environment, and because, by following weed abatement procedures, the City is protecting persons and property from emergencies caused by the risk of fire, explosion, and earthquake. (CEQA Guidelines § 15061(b)(3); Pub. Res. Code § 21080(b)(4).) APPROVED this 18th day of July, 2023, by the following vote:

City Council Agenda July 18, 2023
Attachment 1
AYES:

NOES:

ABSENT:

ABSTAIN:

Steven W. Martin, Mayor
ATTEST:

Melissa Boyer, City Clerk

City Council Agenda July 18, 2023
Paso Robles Fire and Emergency Services 2023
Weed Abatement Charges Exhibit A 1

City Council Agenda July 18, 2023
Council Agenda Report
From: Angelica Fortin, Community Services Director
Subject: Third Quarter Report: El Camino Homeless Organization (ECHO) Memorandum of Understanding
CEQA Determination: The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Date: July 18, 2023
Facts

1. On February 16, 2022, the City received a request from ECHO, 1134 Black Oak Drive, for a one-time grant of $444,000 “to cover the staffing costs that are not paid for by other funders for FY 2022-23.”

2. On March 15, 2022, City Council considered ECHO’s funding request and directed the formation of an ad hoc committee to review the request and to make recommendations to modify ECHO’s existing MOU with the City.

3. Throughout the month of April 2022, Mayor Pro Temp John Hamon and Councilmember Steve Gregory participated in three public ad hoc committee meetings to review ECHO’s funding request.

4. On May 17, 2022, the ECHO Ad Hoc Committee reported its findings to City Council; Council directed staff to incorporate the findings into a revised MOU that would fund ECHO a total of $444,000 over the City’s two-year budget cycle for Fiscal Year (FY) 2022-2023 and FY 2023-2024.

5. On August 16, 2022, City Council approved the revised MOU with ECHO which required ECHO to form a Community Stakeholder Committee (CSC) and to provide quarterly accounting and statistical reports to the City prior to the funds being issued. Payments will be made on a quarterly basis, not to exceed $222,000 per fiscal year or $444,000 in total in FY 2022-23 and FY 2023-24.

6. The City Council has received two quarterly reports and approved the disbursement of two quarterly payments to date.

7. In May 2023, ECHO completed its third quarter under the revised MOU.

Options

1. Take no action;

2. Receive and file ECHO’s third quarter report and direct staff to disburse the third payment in the amount of $55,500;

3. Receive and file ECHO’s third quarter report, direct staff to disburse the third payment in the amount of $55,500, and reconvene the ad hoc committee to reconsider ECHO’s funding request in light of the change in service model;

4. Provide alternative direction to staff.

City Council Agenda July 18, 2023
Analysis and Conclusions
In accordance with the August 16, 2022 MOU between ECHO and the City, ECHO has completed its third quarter of services and has provided the City with the updates, data and financial reports as required in the agreement. This has been provided in the form of presentation slides, a profit and loss statement and submission of a phone log that details activity taking place between March and May 2023.

Using the information provided by ECHO, the statuses of the requirements outlined in item 3 of the MOU are summarized in the following table:

Obligation as Outlined in MOU Third Quarter Progress
Provide not less than 50 temporary shelter beds
for the homeless population, as well as case
management services and life-skill classes.

ECHO is transitioning into a 90-day program and
is planning to discontinue the nightly emergency
shelter program. At the end of the reporting
period, 45 of the 50 beds available were
dedicated to the 90-day program. Life skills
classes are incorporated into case management.

Attachment 1, Page 4-6
Establish a pilot program, to run for the duration
of this MOU, to mitigate the departure impacts
and potential negative activities of guests from
the ECHO Paso Robles facility so as not to
overwhelm neighboring businesses.

Good Neighbor Program with weekly
neighborhood trash pickups. Incorporated
messaging into case management, dinner service
and nightly guest visits.

Attachment 1, Page 8-9
Offer programs at the Paso Robles facility at least
4-hours per day Monday through Friday, during
daytime hours, to engage clients in productive
activities that support the facility and encourage
positive client behavior and neighbor
interactions.

Weekly, bi-weekly, and monthly activities
offered. Raising a Reader story times established.

Weekly neighborhood trash pickups. Daytime
programs available 8-5 pm.

Attachment 1, Page 6, 8-9
Provide detailed quarterly financial and expense
reports to the City for the Paso Robles facility.

Received.

Attachment 2
Provide quarterly operations reports, including
but not limited to the number of clients receiving
meals, nightly shelter, laundry and shower
services, direct aid expenses, all professional
services such as mental health referrals, case
management services, permanent housing
placement, and number of unsheltered
homeless.

Laundry service available Monday and Tuesday: 9
am to 5 pm
Attachment 1, Page 4-5, 7
Attachment 2
Form a Community Stakeholder Committee (CSC)
to include local business owners, Paso Robles
Police Department staff, Paso Robles Emergency
Services staff, ECHO staff, and City Council
liaisons. Meet quarterly.

City Council Liaisons: Steve Gregory and John
Hamon.

Meeting 1: September 27, 2022
Meeting 2: January 26, 2023
Meeting 3: April 27, 2023
Attachment 1, Page 9
Make available to stakeholders a 24-hour
telephone line for reporting of urgent issues that
may arise between quarterly meetings. Calls to
said line shall be responded to within sixty (60)
Phone Line Established: Call log reflected no calls
received during the third quarter.

Attachment 3

City Council Agenda July 18, 2023
minutes. All calls are to be logged as to issue and
resolution and logs shall be included in quarterly
reports.

Communicate with clients daily about proper
community behavior; specifically addressing
potential negative behaviors impacting
neighboring businesses.

Incorporated into case management, dinner
service and nightly guest visits.

Attachment 1, Page 9
Document continued efforts to increase the
frequency of visits and number of onsite mental
health counselors. Progress in this area shall be
included in quarterly reports to the City.

In progress. Actively working with partner
agencies to offer additional opportunities.

Maintain its agreement with HASLO for
ownership and operation of temporary housing.

Agreement in place and in good standing.

Subject to all applicable laws and consistent with
the requirements for funding sources used for
development and operations of the Project,
ECHO shall give a preference in the occupancy of
the temporary units in the Project to eligible
households who live or work in the City of Paso
Robles, to the extent allowed by law.

Approximately 85% of occupants live or work in
Paso Robles.

ECHO shall seek all relevant grants and funding
opportunities in support of ECHO Paso Robles,
documenting these efforts and all funding
streams in quarterly reports to the City.

Grant information included in financial report.

Attachment 2
ECHO’s financial report provides expenditures and revenue streams for the ECHO Paso Robles location.

Program expenses include direct aid which consists of costs for items that are provided directly to clients such as clothing in preparation for interviews, shoes or sleeping bags. Expenses for client gas and bus tickets are detailed in a separate line item. Revenue streams include funds received through fundraising events, community donations, and grants, specifically; State and Federal Emergency Solutions Grants (ESG) and the Permanent and Local Housing Allocation (PLHA).

During this reporting period, ECHO began transitioning the Paso Robles facility to a 90-day shelter program, similar to the service model at the ECHO Atascadero location. In May 2023, ECHO reported that 45 of the 50 shelter beds available at the Paso Robles location were assigned to the 90-day program. In the same month, 168 individuals were reported as not having been able to secure a bed at the facility.

ECHO has indicated they will continue to phase out the nightly emergency shelter program, which will leave Paso Robles and the North County without any nightly emergency options for homeless individuals.

ECHO staff has indicated that the transition away from providing a nightly emergency shelter program is based on participant housing success rates of its 90-day program. The 90-day program provides a guaranteed bed and comprehensive case management services to assist residents in securing a job and finding permanent and sustainable housing within three months of entering the shelter program.

According to ECHO, 50 percent of individuals enrolled in the 90-day program successfully get back into permanent housing compared to 10 percent of those using the nightly shelter model.

When the City Council initially approved the current MOU and funding allocations with ECHO, it was under the assumption that nightly emergency shelter type beds would be readily available at the facility. At the

City Council Agenda July 18, 2023
time the MOU was approved, ECHO offered 12 nightly emergency shelter beds. This number has fluctuated since that time based on the needs of clients at the shelter. However, at no time has there not been nightly emergency shelter beds available.

The transition to exclusively a 90-day program considerably changes the shelter options within the North County. This change has the potential to impact how the City’s Community Action Team can engage with and compel homeless individuals to seek nightly shelter services. To further evaluate how the change in service models aligns with the City’s existing MOU with ECHO, staff are recommending the City Council reestablish the Homeless Ad Hoc Committee to discuss this matter. This recommendation is not intended to impact payment for services rendered in the third quarter, however it is proposed to ensure transparency moving forward with the services being rendered that are subject to the MOU.

Fiscal Impact
City Council approved funding for this disbursement on August 16, 2022 contingent upon ECHO meeting the requirements of the revised MOU. There are no additional impacts associated with directing staff to disburse the third quarterly payment.

CEQA
The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Recommendation (Option 3)
Receive and file ECHO’s third quarter report, direct staff to disburse the third payment in the amount of $55,500 and reconvene the ad hoc committee to reconsider ECHO’s funding request in light of the change in service model.

Attachments

1. ECHO Third Quarter Report Presentation

2. ECHO Third Quarter Financial Report

3. ECHO Third Quarter Phone Log

City Council Agenda July 18, 2023

EL CAMINO HOMELESS ORGANIZATION
Paso Robles Campus, Quarterly Report
Quarter 3, March - May 2023
Presented By:

Kate Swarthout, Operations
and Client Services Manager
Empowering people in San Luis Obispo County to make
positive change by providing food, shelter, and supportive services.

Attachment 1

City Council Agenda July 18, 2023
City of Paso Robles Funding
100% of the funding that
ECHO receives from the City
of Paso Robles goes directly
towards supporting staffing
of our Paso Robles Campus.

The funding is instrumental
in providing the services
that help those facing
homelessness transform
their lives and get back into
housing.
25%
75%
City of Paso Funds
Allocated for Staffing
The Funding Provided by the City of Paso Robles
Covers 25% of the staffing costs associated directly
with the ECHO Paso Robles Campus
Attachment 1

City Council Agenda July 18, 2023
ECHO Operating Breakdown
Of the total
funding that
ECHO receives,
71% goes to
Direct Clients
Services that
impact and
change lives.

ECHO is able to maintain this breakdown because
of the incredible support of our volunteers. Over
1,500 community members donate their time and
skill for over 30,840 hours per year.

Attachment 1

City Council Agenda July 18, 2023
March April May Quarterly Totals
Total Shelter Stays 1501 1600 1618 4719
Individuals That Did Not
Receive a Room 202 174 168 544
Unduplicated Nightly
Shelter Stays 107 99 107 313
Quarterly Shelter Program Data
0 500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Total Shelter Stays Individuals That Did Not Receive
Room
Unduplicated Nightly Shelter
Stays
Attachment 1

City Council Agenda July 18, 2023
March April May Quarterly Totals
# People Housed 4 8 8 20
# People Found
Employment 4 10 7 21
March April May
Individuals Enrolled in 90
Day Program 26 40 45
Quarterly Documented
Success
Attachment 1

City Council Agenda July 18, 2023
Additional
Programs and
Services
Attachment 1

City Council Agenda July 18, 2023
March April May Quarterly Totals
Dinners Served 2333 2401 2219 6953
Showers Provided 122 176 188 486
Food Bags Given 250 250 250 750
Referrals to Mental
Health 5 7 3 15
Referrals to Drug/Alcohol 3 5 2 10
Referrals to Other
Resources 4 5 8 17
Laundry Service On-site 140 140 140 420
Additional ECHO Program and Referral Data
Attachment 1

City Council Agenda July 18, 2023
Additional Services
Programs and Services Provided
ECHO Paso Robles was excited to add new programs this
quarter.

Clean Slate, Children's story and craft time with Raising a Reader, a floral arranging class taught by a client with flowers donated by Trader Joes and sound healing sessions were just some of the favorites.

We love to provide a mix of programs that are both
educational and enjoyable.

W e e kly/ Bi W e e kly Mo n t h ly/ As Ne e d e d
• Cal FRESH
assistanceDepartment of
Social Services
• Covid 19, Influenza
vaccine clinics
• Clean Slate
Program
• Free Cell Phone Service
• Onsite mental health
evaluations- TMHA
• Haircuts
• Substance Abuse
Education- SLO Bangers
• Doctor
Evaluation &
Referrals
• Arts and Crafts
• Story and
Game times
Attachment 1

City Council Agenda July 18, 2023
ECHO’s Good Neighbor program has been in full effect, with Residents of the 90-Day Program, working with staff, to clean up trash in the Black Oak neighborhood.

We held our third Neighborhood Stakeholder's Meeting on April 27th.

We had a great turn out and enjoyed the collaboration and support we receive from our neighboring businesses.

We have not received any calls on our 24 hour line but our team has gone out and engaged with local business owners to assist in outreach efforts and address their concerns.

Neighborhood Collaborations
Attachment 1

City Council Agenda July 18, 2023
Success Stories
Before coming to ECHO’s Paso Robles
Campus, Danny had gone through a very
hard time in his life. He had been
hospitalized for a severe lung problem, and
also went through a separation with his
partner. He had been working full time at a
gas station to pay his bills, but due to his
health he could no longer lift heavy object
and complete his duties. Eventually this led
Danny to facing homelessness in our
community. But then, Danny found his way
to ECHO and joined the 90-Day Residential
Emergency Shelter Program. He got right to
work with his ECHO Case Manager applying
for jobs that could help him get on his feet.

At the start of May, Danny interviewed and
was hired as a sales rep for a local solar
company. After just a couple weeks of
successful sales and commissions, Danny was
able to get his driver’s license and purchase a
car! We are so excited for Danny and look
forward to seeing what he does next!
Danny
Attachment 1

City Council Agenda July 18, 2023
Success Stories
In the summer of 2022, Kim found herself facing homelessness in our community. She had recently left her own home and moved in with family, but things took a turn for the worst. Kim was not able to stay with family for long and soon found herself without a home and searching for resources. In July, Kim started accessing resources at the ECHO Paso Robles Campus and utilizing the Nightly Shelter Bed Program. After watching others facing homelessness get back into housing and building trust with the case management team and staff on site, Kim decided to apply and join ECHO's 90 Day Residential Emergency Shelter Program.

She immediately got to work on her individualized housing plan and started to set goals for herself, and one of those goals was her sobriety. After a month of trying to do it on her own, Kim admitted to her case manager that she had relapsed and needed help. The two got to work on a plan, and collaboratively created a new activity at ECHO, where staff transports any willing residents of our program to Alcoholics and Narcotics Anonymous. Not only did this lead to Kim maintaining and accomplishing her goal, but encouraged other residents to seek services and support from the community. Kim continued to work and connect with community resources, and after many applications and hours of searching, she finally found a place to call a home of her own and she lights up when describing it. Kim made an everlasting impression on all of ECHO and although we will miss her and her contagious positivity, we are so excited for this next chapter of her life.

Attachment 1

City Council Agenda July 18, 2023
Attachment 1

City Council Agenda July 18, 2023

ADMINISTRA
TION ARPA CA-ESG-CV-2
ECHOPaso
Robles
FED-ESGCV-2 Fundraising Home Key PLHA Program TOTAL
Income
40000 Operating Income 0.00
4000 Grants 0.00

0.00 4016 General Fund 11,862.67 11,862.67
4025 PLHA Grant 38,452.51 38,452.51
4030 CARES ACT GRANTS 9,840.51 25,313.60 35,154.11
Total 4010 GOVERNMENT GRANTS $ 0.00 $ 0.00 $ 9,840.51 $ 0.00 $ 25,313.60 $ 0.00 $ 0.00 $ 38,452.51 $ 11,862.67 $ 85,469.29 4050 Non Government Grants 0.00
4057 Other Grants 55,500.00 23,263.00 78,763.00
Total 4050 Non Government Grants $ 0.00 $ 0.00 $ 0.00 $ 55,500.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 23,263.00 $ 78,763.00 Total 4000 Grants $ 0.00 $ 0.00 $ 9,840.51 $ 55,500.00 $ 25,313.60 $ 0.00 $ 0.00 $ 38,452.51 $ 35,125.67 $ 164,232.29 4100 FUND RAISING INCOME 0.00
4101 Long Walk Home 1,125.00 1,125.00
4103 Empty Bowl 55,100.00 55,100.00
4107 Turkey Trot 625.00 625.00
4120 Newsletter Income 650.00 650.00
Total 4100 FUND RAISING INCOME $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 57,500.00 $ 0.00 $ 0.00 $ 0.00 $ 57,500.00 4200 CONTRIBUTIONS 0.00
4207 Direct Mail/Envelopes 8,786.00 8,786.00
4210 Ecumenical Donations 1,016.50 1,016.50
4220 Business Donations 5,802.53 5,802.53
4230 Individual Donations 11,333.80 11,333.80
4240 Civic/Non Profit Organizations 6.24 6.24
Total 4200 CONTRIBUTIONS $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 26,945.07 $ 26,945.07 Total 40000 Operating Income $ 0.00 $ 0.00 $ 9,840.51 $ 55,500.00 $ 25,313.60 $ 57,500.00 $ 0.00 $ 38,452.51 $ 62,070.74 $ 248,677.36 4500 DONATED GOODS & SERVICES 0.00
4505 Donated Professional Services 537.75 225.00 762.75 Total 4500 DONATED GOODS & SERVICES $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 537.75 $ 0.00 $ 0.00 $ 225.00 $ 762.75 4900 OTHER INCOME 0.00
4905 Interest 50.44 50.44
Total 4900 OTHER INCOME $ 50.44 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 50.44 Total Income $ 50.44 $ 0.00 $ 9,840.51 $ 55,500.00 $ 25,313.60 $ 58,037.75 $ 0.00 $ 38,452.51 $ 62,295.74 $ 249,490.55 Gross Profit $ 50.44 $ 0.00 $ 9,840.51 $ 55,500.00 $ 25,313.60 $ 58,037.75 $ 0.00 $ 38,452.51 $ 62,295.74 $ 249,490.55 Expenses
5000 ADMINISTRATIVE EXPENSES 0.00
5010 Conferences & Training 81.00 81.00
5011 Admin Meals/Appreciation/Outreach 678.75 52.86 731.61 5020 Dues, Fees, Memberships 1,914.51 852.50 2,767.01
5025 Government Fees 0.00 0.00
5030 Insurance 0.00
5031 Employee Health 846.04 722.82 646.62 1,246.68 3,462.16 5035 D & O Insurance 695.15 695.15
5036 Liability/Prop/Umbrella Insurance 624.27 2,289.21 813.05 1,872.85 5,599.38 Total 5030 Insurance $ 1,470.31 $ 2,289.21 $ 722.82 $ 0.00 $ 646.62 $ 0.00 $ 813.05 $ 0.00 $ 3,814.68 $ 9,756.69 5050 Office Supplies & Services 1,031.47 431.44 504.31 410.55 906.80 281.18 3,565.75 5070 Professional Charges 4,819.62 78.91 341.64 215.00 479.89 352.34 299.07 6,586.47 5075 Bank Charges 760.13 760.13
5080 Payroll 0.00
5085 Wages 23,839.35 49,137.70 17,382.08 47,160.93 38,297.30 175,817.36 5090 Payroll Tax Expense 1,350.69 3,590.07 1,807.09 3,949.85 2,932.91 13,630.61 5095 Workers Comp Exp 5,736.61 5,736.61
5096 401K 942.07 942.07
Total 5080 Payroll $ 31,868.72 $ 0.00 $ 0.00 $ 52,727.77 $ 19,189.17 $ 0.00 $ 51,110.78 $ 41,230.21 $ 0.00 $ 196,126.65 Total 5000 ADMINISTRATIVE EXPENSES $ 42,624.51 $ 2,720.65 $ 1,306.04 $ 53,069.41 $ 20,050.79 $ 0.00 $ 52,814.27 $ 42,489.35 $ 5,300.29 $ 220,375.31 5100 FUNDRAISING EXPENSES 0.00
5113 Empty Bowl 1,244.61 1,244.61
5160 Publicity/Promotion 964.75 964.75
Total 5100 FUNDRAISING EXPENSES $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 2,209.36 $ 0.00 $ 0.00 $ 0.00 $ 2,209.36 5200 PROGRAM EXPENSES 0.00
5300 FOOD SERVICE 0.00
5310 Food 269.99 269.99 1,511.52 805.70 2,857.20
Total 5300 FOOD SERVICE $ 0.00 $ 0.00 $ 269.99 $ 0.00 $ 269.99 $ 0.00 $ 1,511.52 $ 0.00 $ 805.70 $ 2,857.20 5400 SHELTER SERVICES 0.00
5442 General Supplies & Materials 1,045.95 4,911.93 158.59 2,251.71 8,368.18 Total 5400 SHELTER SERVICES $ 0.00 $ 1,045.95 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 4,911.93 $ 158.59 $ 2,251.71 $ 8,368.18 5500 CLIENT SERVICES 0.00
El Camino Homeless Organization
ECHO, Paso Robles
March 2023 - May 2023
Attachment 2

City Council Agenda July 18, 2023
5560 Miscellaneous Assistance 0.00
5572 Direct Aid 3,038.29 40.19 702.60 1,078.49 4,859.57 Total 5560 Miscellaneous Assistance $ 0.00 $ 0.00 $ 3,038.29 $ 0.00 $ 40.19 $ 0.00 $ 702.60 $ 0.00 $ 1,078.49 $ 4,859.57 5562 Children's/Client Enrichment 50.75 87.76 138.51
5725 TRANSPORTATION & Communication 0.00
5730 Local Bus Tickets 1,412.50 4,679.00 6,091.50
5740 Client Gas 337.50 337.50
5745 Staff Vehicle Expense 659.59 327.67 374.00 35.63 88.69 1,485.58 Total 5725 TRANSPORTATION &
Communication $ 659.59 $ 0.00 $ 1,740.17 $ 0.00 $ 374.00 $ 0.00 $ 35.63 $ 4,679.00 $ 426.19 $ 7,914.58 Total 5500 CLIENT SERVICES $ 659.59 $ 0.00 $ 4,778.46 $ 0.00 $ 414.19 $ 0.00 $ 788.98 $ 4,679.00 $ 1,592.44 $ 12,912.66 Total 5200 PROGRAM EXPENSES $ 659.59 $ 1,045.95 $ 5,048.45 $ 0.00 $ 684.18 $ 0.00 $ 7,212.43 $ 4,837.59 $ 4,649.85 $ 24,138.04 7000 Physical Plant 0.00
7010 Building/Grounds Maintenance & Repair 8,053.00 5,118.02 13,171.02 7011 Furniture/Fixtures 4,282.85 1,778.39 6,061.24
7015 Property Taxes 1,176.30 1,176.30
7030 Utilities 0.00
7031 Gas 1,607.29 1,607.29
7032 Electricity 5,001.02 5,001.02
7033 Water/Sewer 4,530.17 4,530.17
7034 Telephone & Internet Service 173.80 275.38 441.75 890.93 7036 Waste Management 804.53 1,609.06 2,413.59
7037 Security System Maintenance 76.46 76.46
Total 7030 Utilities $ 0.00 $ 12,193.27 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 1,884.44 $ 441.75 $ 0.00 $ 14,519.46 Total 7000 Physical Plant $ 0.00 $ 21,422.57 $ 4,282.85 $ 0.00 $ 0.00 $ 0.00 $ 8,780.85 $ 441.75 $ 0.00 $ 34,928.02 Suspense 0.00 0.00
Total Expenses $ 43,284.10 $ 25,189.17 $ 10,637.34 $ 53,069.41 $ 20,734.97 $ 2,209.36 $ 68,807.55 $ 47,768.69 $ 9,950.14 $ 281,650.72 Net Operating Income -$ 43,233.66 -$ 25,189.17 -$ 796.83 $ 2,430.59 $ 4,578.64 $ 55,828.39 -$ 68,807.55 -$ 9,316.18 $ 52,345.60 -$ 32,160.17 Other Income
4065 In Kind Donations 1,250.00 500.00 1,750.00
Total Other Income $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 1,250.00 $ 0.00 $ 0.00 $ 500.00 $ 1,750.00 Net Other Income $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 1,250.00 $ 0.00 $ 0.00 $ 500.00 $ 1,750.00 Net Income -$ 43,233.66 -$ 25,189.17 -$ 796.83 $ 2,430.59 $ 4,578.64 $ 57,078.39 -$ 68,807.55 -$ 9,316.18 $ 52,845.60 -$ 30,410.17 Blue Cells = Total expeneses & income for ECHO, Paso Robles Emegrency Shelter Gray Cells =  Other expenses & income for the ECHO, Paso Robles Emergency Shelter I hearby certifiy that I have examined this report and that the statements made and the figures shown herin and in any accompanying schedules are, to the best of my knowledge and belief, a true and complete financial statements, made in good faith for the period stated.                                                                                                                             . .                     rr`|Å| eÉwÜ|zâxérrr IAJAECEF A A
.                                                                                signature                                                                                                                    date Budget Narrative
The budget above shows all expenses and income received for the ECHO, Paso Robles Emergency Shelter during the third quarter of the City of Paso Robles grant award (March ‐ May 2023). During this quarter, ECHO fundraised $249,490.55 for the Paso Robles Shelter though grants, events, and community donations. The total expenses for the ECHO, Paso Robles Shelter was $281,650.72. This leaves us with a current deficit of $32,160.17. Many of ECHO's grants are similar to the City of Paso Robles Grant award in that the funds are awarded as a reimbrusement after expenses occur. Because of these grant processes, ECHO's budget will fluxuate between either having a surplus or deficit of funds throughout the year. Once ECHO is able to submit a full year of financial reporting for the ECHO, Paso Robles Emergncy Shelter it will show a clear picture of how we responsibly manage our funds.

Budget Key:

Green Cells =  Expenses and income for the City of Paso Robles Grant Award Attachment 2

City Council Agenda July 18, 2023
Date Time Received Time Returned Handled By What Call Was Regarding Attachment 3

City Council Agenda July 18, 2023
Attachment 3

City Council Agenda July 18, 2023
Council Agenda Report
From: Ty Lewis, City Manager
Warren Frace, Community Development Director
Subject: Request for Support for San Luis Obispo County’s Regional Housing & Infrastructure Plan (HIP) consistent with the 2020 San Luis Obispo Countywide Regional Compact CEQA Determination: The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.

Date: July 18, 2023
Facts

1. Meeting the housing needs of the San Luis Obispo region is a challenge shared by all eight local land use jurisdictions (the seven Cities and County of San Luis Obispo (County)), San Luis Obispo Council of Governments (SLOCOG), organizations that plan, zone, entitle, develop and build housing. This challenge is larger than any one jurisdiction can solve alone and will require the collective actions of all local agencies. With this great challenge also comes an opportunity for regional collaboration. In 2019 the San Luis Obispo County regional jurisdictions recognized the need to work collaboratively to solve the critical shortage of infrastructure resources and housing attainability in the County. And so, in 2019, the County allocated resources to launch a new regional collaborative initiative. Since its inception, the Regional Housing & Infrastructure Plan (HIP) has been part of a phased approach intended to address three major goals:
 Goal 1. Foster regional collaboration (action taken in 2020)  Goal 2. Align land use planning documents (action taken in 2020)  Goal 3. Create the HIP (draft under review via today’s item)

2. The HIP is the next necessary collaborative action between the seven Cities (Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach and San Luis Obispo), County and SLOCOG along the region’s path to addressing the region’s growing housing and infrastructure needs.

The HIP is intended to help accelerate housing development where it makes the most sense given regional conditions and community readiness. The HIP inventories infrastructure barriers to housing, identifies funding opportunities to implement infrastructure priorities, studies housing affordability in the region, and develops foundational information for the future 2027 Regional Housing Needs Assessment (RHNA) and other future regional programs.

3. The seven Cities, County and SLOCOG adopted the San Luis Obispo Countywide Regional Compact in early 2020 (see Attachment 5, Appendix D). The Regional Compact is an aspirational document that sets goals for future recommended plans and actions among the local agencies. It “establishes a united regional framework to unlock the potential to develop an adequate supply of housing and resilient infrastructure that support our economic prosperity.” By adopting the Regional Compact, the seven Cities, County and SLOCOG embraced six shared regional goals listed below and supported aligning resources and policies to make progress towards acting on them. These goals include the following:

City Council Agenda July 18, 2023
 Goal 1. Strengthen Community Quality of Life – We believe that our Region’s quality of life depends on four cornerstones to foster a stable and healthy economy for all: resilient infrastructure and resources, adequate housing supply, business opportunities, and educational pathways.
 Goal 2. Share Regional Prosperity – We believe that our Region should share the impacts and benefits of achieving enduring quality of life among all people, sectors and interests.  Goal 3. Create Balanced Communities – We believe that our Region should encourage new development that helps to improve the balance of jobs and housing throughout the Region, providing more opportunities to residents to live and work in the same community.  Goal 4. Value Agriculture & Natural Resources – We believe that our Region’s unique agricultural resources, open space, and natural environments play a vital role in sustaining healthy local communities and a healthy economy, and therefore should be purposefully protected.
 Goal 5. Support Equitable Opportunities – We believe that our Region should support policies, actions, and incentives that increase housing development of all types, available to people at all income levels.
 Goal 6. Foster Accelerated Housing Production – We believe that our Region must achieve efficient planning and production of housing and focus on strategies that produce the greatest impact.

These six regional goals created a path for compatibility among the eight local land use planning agencies’ Housing Elements, built a basis for the HIP, and drove future recommendations for collaborative actions. Signatories to the Regional Compact committed to acting as partners in aligning actions with these regional goals and agreed to develop the first HIP. By taking collaborative actions to further these goals, this region can solve critical issues and become a statewide leader in sustaining vibrant communities.

4. The eight local land use planning agencies (the seven Cities and County) were each required to update their jurisdiction's Housing Elements to reflect how local communities are planning for the State’s 6th Cycle Regional Housing Needs Allocations (2020 - 2028). The Housing Elements were submitted to the Housing and Community Development (HCD) by December 2020. As a step towards the regional goal of aligning land use planning documents, each agency’s Housing Element included a regional chapter that included an initial list of aspirational regional policies that, if implemented, could further the Regional Compact goals (see Attachment 5, Appendix D). The regional chapter also recognized the importance of ongoing collaboration moving forward and pointed to future collaborative efforts to be identified in the HIP. It was the first time all eight land use planning agencies included a regional chapter in the Housing Elements–an important step for aligning land use planning documents.

5. The final goal of the regional collaborative initiative was developing the HIP. Due to emergency response needs, the County put the HIP on hold during the COVID-19 Pandemic. In June 2022, the HIP was revived with the establishment of a Memorandum of Understanding between the County and SLOCOG, under which SLOCOG took over as the project manager of the effort and sub-recipient of the County’s Senate Bill 2 Planning Grant Program funding award for HIP development. With Senate Bill 2 grant funding sunsetting in September 2023, the HIP needed to move at an accelerated pace.

City Council Agenda July 18, 2023

6. On May 19, 2023, SLOCOG published the attached Draft HIP, including Appendices A-D and a mapping tool (Attachments 1-7). There are seven major components of the HIP (further described in the Analysis section):

Component 1. Housing Highlights
Component 2. Data and Project Inventory
Component 3. HIP Mapping Tool
Component 4. Housing Efficiency Analysis
Component 5. Infrastructure Prioritization
Component 6. Funding Strategies Assessment
Component 7. Affordable-by-Design Study

7. On June 7, 2023, the SLOCOG Board of Directors directed SLOCOG staff (via the HIP engagement consultant team, REACH and Koble Collaborative, Inc.) to present this item to member jurisdictions for comment and seek general support of regional collaboration moving forward. The seven City Councils and County Board of Supervisors will receive a presentation on the HIP and provided an opportunity to support the HIP between June 27 - August 8, 2023. SLOCOG Board of Directors will consider adoption of the HIP on August 2, 2023.

8. The City of Paso Robles City Council is being asked to consider supporting the creation of the HIP at the July 18, 2023 meeting.

Community Outreach
The City previously adopted the San Luis Obispo Countywide Regional Compact in early 2020. Public input was taken on the matter at the City Council meeting held on March 3, 2019.

With progress of the Regional Housing and Infrastructure Plan (HIP), SLOCOG has contracted with REACH and Koble Collaborative, Inc. to conduct the HIP’s communications and stakeholder engagement. The primary outreach goals were:

Goal 1. Foster ongoing collaboration and buy-in among private and public stakeholders.

Goal 2. Remind government of the Regional Compact, laying the groundwork for HIP effort.

Goal 3. Build public sentiment in support of solutions and regional planning efforts.

The stakeholder groups and meetings were designed to convene diverse perspectives and have honest conversations about what each organization can and needs to do to realize those goals, across sectors and industries. Key stakeholder groups included:

City Council Agenda July 18, 2023
Regional
Managers / Key
Staff
Housing Action Team Builders &
Developers
Housing
Advocacy Group
City & County
Elected Officials
30 attendees,
3 meetings
15-20 attendees,
monthly meetings
20-35 attendees,
3 meetings
15-20
attendees,
2 meetings
40 elected officials
1 meeting per
agency
County of SLO,
7 Cities (+ Santa
Maria), SLOCOG
Leadership
County of SLO,
7 Cities, SLOCOG
Planning/Comm
Dvpmt. Staff
Builders, Engineers,
Developers, Econ.

Dvpmt., Architects,
Real Estate, etc.

Nonprofit
builders, Home
Builders Assoc,
Chambers, etc.

Seven City Councils
County of SLO
Board
SLOCOG Board
HIP Steering Committee
10 attendees, 3 meetings
City Manager, Elected Officials, County Regional Planner, Developer, Low Income Lender, Architect, Engineer, Advocate, Water Resources and Cal Poly met collaboratively to consider ways to integrate feedback from all stakeholder perspectives
Options

1. Take no action;

2. Consider support for the Regional Housing and Infrastructure Plan, as a recommitment to the 2020 San Luis Obispo Countywide Regional Compact;

3. Provide alternative direction;

4. Refer back to staff for additional analysis.

Analysis and Conclusions
Support for the Regional Housing and Infrastructure Plan (HIP), as a recommitment to the 2020 San Luis Obispo Countywide Regional Compact, is a voluntary act by the City to promote the aspirational vision to help accelerate housing development where it makes the most sense given regional conditions and community readiness. By supporting the HIP, the City will continue to retain local authority on its decisions affecting housing and infrastructure. The HIP is not obligatory. It serves to offer the City a variety of opportunities that could be implemented, such as pursuing funding opportunities, improving processing timelines, prioritizing infrastructure projects, and being more competitive in State and Federal funding programs, among others. The HIP would support the goals and implementation of the Paso Robles Housing Element
The following sections provide a more in-depth snapshot of the seven components of the plan.

HIP Component 1. Housing Highlights
A communication tool designed to unify the region’s focus on the challenges and successes that local agencies, the building and development community and other stakeholders face related to the housing supply needs. This document will serve to reinforce the commitment to the Regional Compact and expand on opportunities each stakeholder has to address housing needs within their area of control and span of influence. The draft Housing Highlight document will be available by June 28, 2023. The final document will be included with the final HIP in July 2023.

City Council Agenda July 18, 2023
HIP Component 2. Data and Project Inventory
The HIP analyzes the transportation, water and wastewater infrastructure barriers to housing development. This HIP element included compiling infrastructure and housing data from across individual agencies as briefly described in Table below:

Major HIP Inputs
Housing Data Proposed residential developments of all income categories were collected from Planning and Community Development staff of the seven Cities and the County in 2021. This data includes specific plans, proposed residential and mixed-use projects projected to be built between now and 2045. Residential development that has been completed or is near completion was removed from the HIP analysis.

Transportation
Data
The 2023 Regional Transportation Plan included a list of 350+ transportation investments submitted by Public Works staff of the seven Cities and County and transit providers. Transportation infrastructure was studied using the Transportation Efficiency Analysis (TEA). The TEA identified transportation barriers to housing production and was used in the HIP analysis.

Water/
Wastewater
Data
The HIP inventory is based on responses from 44 water and wastewater agencies, local capital improvement project lists, 2021 Regional Water Infrastructure Resiliency Plan findings, and information from the County’s Water Resources team.

Available, detailed GIS based data was limited. However, to the extent needs are known, key infrastructure projects, estimated costs and timing were included in the HIP analysis.

Additional
Contextual
Data
The HIP analysis provides the data that connects infrastructure and housing on a regional scale for the first-time. When planning for housing, land conditions are carefully considered. To provide a fuller picture, flood risk, sensitive habitat, open space, prime farmland, and fire risk were all included as additional reference information. However, these additional datasets were not used to remove or prioritize infrastructure projects from the HIP list, but simply to provide additional context.

The HIP is a living tool and can adapt as new information becomes available. Future updates to the HIP may incorporate two key datasets:
● Water data update: The County’s Master Water Report update is underway, which may be leveraged to provide updated water capacity information for a future HIP update. ● Economic data: It is anticipated that a future HIP update will incorporate economic data. A concurrent effort, led by REACH, is underway which may be leveraged to provide economic/jobs information for a future HIP update.

HIP Component 3. HIP Mapping Tool
The HIP Mapping Tool was created to display the GIS analysis and foster future collaboration. It is an interactive tool, compiling the complex data and inventoried projects from across the region. The mapping tool makes it easier to visualize connections between infrastructure and housing, see project priorities,

City Council Agenda July 18, 2023
and quickly access more information about each community’s priority projects and housing efficient areas, within a regional context. This component is completed and included in the draft HIP.

HIP Component 4. Housing Efficiency Analysis
The Housing Efficiency Analysis looks at three efficiency factors: (1) transportation access, (2) water capacity and (3) wastewater capacity. By analyzing these efficiency factors, housing efficient areas were identified as efficient, potential or limited. Any infrastructure projects located in an area deemed “efficient” or “potential” moved on to the Infrastructure Prioritization element. All projects located in areas deemed “limited” housing efficiency were removed from further analysis. There were 440 infrastructure projects collected as part of the data inventory. Of those, 18% (80 projects) were located within Housing Efficient Areas (i.e. areas deemed “efficient” or “potential”). This component is completed and included in the draft HIP.

HIP Component 5. Infrastructure Prioritization
The premise of the HIP is to help accelerate new housing development, so the current prioritization factors relate solely to the amount of proposed housing that benefits from a community’s infrastructure project.

The 80 infrastructure projects identified through the processes described in HIP Components 2-4 were ranked as high, medium or low priority based on three factors: (1) if the project is needed for new housing, (2) benefit/cost (i.e. investment cost per additional potential housing units served), and (3) whether there are significant barriers to development. The total estimated cost for all 80 HIP projects is over $1 billion, as shown in following Table.

Draft HIP Priority Projects Summary
Estimate
($ Millions) Projects
Estimate for all HIP Projects $ 1,015 80
High $ 348 54
Medium $ 385 10
Low $ 281 16
This component is completed and included in the draft HIP. Details of each community’s infrastructure priorities can be found in the HIP’s Appendix A (Attachment 2). The next Table below includes a summary of infrastructure priority projects summarized by sub-region.

Draft HIP Priority Projects Summary

City Council Agenda July 18, 2023
HIP Component 6. Funding Strategies Assessment
SLOCOG contracted with BKF Engineers to conduct a Funding Strategies Assessment. The Funding Strategies Assessment is currently underway and seeks to identify funding sources that can reasonably implement water, wastewater and transportation infrastructure priorities included in the HIP (for all high, medium and low priorities). This component is underway, but not completed yet. The HIP’s Appendix C (Attachment 4) includes preliminary information; however, the draft assessment is expected in July 2023 will include a project-by-project detailed breakdown covering funding requirements, potential funding sources, projected grant funding, and residual funding gap.

Local agencies will be encouraged to review the assessment and pursue funding opportunities for priority infrastructure projects in order to voluntarily contribute to the regional housing effort in a manner that best fits within their agency’s goals.

HIP Component 7. Affordable-by-Design Study
SLOCOG contracted with ECONorthwest to conduct the Affordable-by-Design (ABD) Study. The ABD Study is currently underway and will evaluate housing affordability characteristics for the seven Cities as well as unincorporated areas. The intent is to identify whether housing units in this region can be built to meet low to moderate income RHNA categories (as rentals or for-purchase) without being income- or rentrestricted. Initial findings include:
● Design helps, but does not guarantee affordability.
● Market rate rental housing is close to affordability targets in some areas, but regulatory changes are necessary for most areas of the county.
● Only manufactured housing met target price points for new for-sale housing. ● Factors that make for-sale housing more affordable in other areas may not translate to this region’s current market.

The ABD Study notes that there are generally four factors that come together in the housing market to produce lower-cost housing, including: (1) simple design with lower-cost materials, (2) lower cost locations, (3) efficient production, and (4) smaller units with higher density. Due to the limited findings of housing affordability, the ABD Study includes development of a simple menu of policy options that could help to incentivize ABD units in the region. This component is underway, but not completed. The HIP’s Appendix B (Attachment 3) includes preliminary information; however, the draft study is expected in July 2023.

Recognizing that there is no single solution to the challenge of affordability, the forthcoming menu of policy options will be provided for each local agency to consider. Local agencies will be encouraged to adopt what fits their community’s needs in order to voluntarily contribute to the regional housing effort in a manner that best fits within their agency’s goals.

Next Steps
It is worth emphasizing that the recommended action recognizes that there is no “one size fits all” when it comes to this region’s planning and that while local agencies plan for housing, they do not build or develop housing. Therefore, nothing in the HIP mandates action by any of the Cities or the County, it simply offers voluntary opportunities for action that could accelerate the development of needed housing in the region. Implementation relies on each agency’s voluntary actions moving forward, such as:

City Council Agenda July 18, 2023
● Agency(ies) may consider pursuing funding opportunities identified for a priority infrastructure project to cover funding gaps.
● Agency(ies) may consider implementation of affordable-by-design policies appropriate to each unique community and its needs.
● Agency may consider programmatic changes to improve approval process timelines such as directing staff to identify ways to improve response time for housing project approval or coordinating with other agencies to align and streamline processes. ● Agency may consider updating its analysis approach to prioritizing the community’s needed infrastructure projects in order to most impactfully increase housing supply. ● Agency may consider using the HIP to help justify the benefit of a community’s priority infrastructure project towards increasing the region’s future housing supply, making it more competitive in a number of State and Federal funding programs. ● SLOCOG and agencies may consider using the HIP as a foundation for negotiating where the region’s housing needs are best met (e.g future RHNA cycle allocations).

Today’s action signifies another milestone on this path to regional collaboration and fulfilling the Regional Compact adopted by the City of Paso Robles City Council on March 3, 2020. In addition, support of the HIP is consistent with the City’s Housing Element which set to implement the Compact’s initial list of aspirational regional policies to further accelerate housing production.

Fiscal Impact
There is no fiscal impact from this action.

CEQA
The City find that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.

Recommendation
(Option 2)
Provide support and receive and file the Regional Housing and Infrastructure Plan, consistent with the 2020 San Luis Obispo Countywide Regional Compact.

Attachments

1. Draft Regional Housing & Infrastructure Plan

2. Appendix A: Draft List of HIP Infrastructure Priorities

3. Appendix B: Affordable-by-Design Study Preliminary Information

4. Appendix C: Funding Strategies Assessment Preliminary Information

5. Appendix D: Regional Compact & Housing Element Regional Chapter

6. Draft HIP Mapping Tool (click to view hyperlink)

7. Stakeholder Process

City Council Agenda July 18, 2023
Attachment 1

City Council Agenda July 18, 2023
1 | H I P

ACKNOWLEDGEMENTS PAGE
Attachment 1

City Council Agenda July 18, 2023
2 | H I P

CONTENTS
HIP Summary.................................................................................................................................................... 4 Data and Project Inventory ........................................................................................................................... 6 Housing ..................................................................................................................................................... 7 Water & Wastewater .............................................................................................................................. 7 Transportation ......................................................................................................................................... 7 Bonus Layers............................................................................................................................................ 8 Housing Efficiency Analysis............................................................................................................................ 8 Infrastructure Prioritization........................................................................................................................... 8 Findings........................................................................................................................................................ 10 Future Data Considerations................................................................................................................ 12 HIP Mapping Tool .......................................................................................................................................... 14 Affordable-By-Design Study ........................................................................................................................ 15 Rental Preliminary Findings ................................................................................................................ 16 For-Sale Preliminary Findings ............................................................................................................. 18 Market Conditions................................................................................................................................. 19 Funding Strategies Assessment................................................................................................................. 20 Housing Highlights ........................................................................................................................................ 21 Stakeholder Engagement Strategy........................................................................................................ 21 Regional Housing Success Stories......................................................................................................... 23 Next Steps ....................................................................................................................................................... 23 Appendix.......................................................................................................................................................... 23 Appendix A: Draft List of HIP Infrastructure Priorities........................................................................ 23 Appendix B: Affordable-by-Design Study Preliminary Information................................................ 23 Appendix C: Funding Strategies Assessment Preliminary Information ........................................ 23 Appendix D: Regional Compact & Housing Element Regional Chapter ....................................... 23 Appendix E: Additional Housing Data July 2023 ................................................................................. 23 Attachment 1

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3 | H I P

FIGURES
Figure 1: HIP Elements ................................................................................................................................... 5 Figure 2: Draft HIP Priority Projects Summary.......................................................................................... 5 Figure 3: Data Inventory Sources................................................................................................................. 6 Figure 4: HIP Mapping Process .................................................................................................................... 8 Figure 5: HIP Analysis Process ...................................................................................................................... 9 Figure 6: Draft HIP List Summary............................................................................................................... 10 Figure 7: Priority Projects by Community................................................................................................. 11 Figure 8: Multijurisdictional Projects by Priority ..................................................................................... 11 Figure 9: Priority Projects by Subregion................................................................................................... 12 Figure 10: Future Data Considerations by Community ........................................................................ 13 Figure 11: Future Data Considerations by Subregion........................................................................... 13 Figure 12: San Luis Obispo County’s Rent and Sale Price Limits (May 2022).................................. 15 Figure 13: Feasibility of Rental Prototypes by Subregion..................................................................... 17 Figure 14: Key Takeaways from Financial Feasibility Analysis (Rental) .............................................. 17 Figure 15: Market Conditions for Lower-Cost Housing ........................................................................ 19 Figure 16: Public Sector and ABD Market Conditions ............................................................................ 20 Figure 17: HIP Stakeholder Process........................................................................................................... 22 Attachment 1

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HIP SUMMARY
The Regional Housing & Infrastructure Plan (HIP) is a collaborative action plan between nine local jurisdictions in response to the San Luis Obispo region’s growing housing and infrastructure shortage. The HIP is intended to help accelerate housing development where it makes the most sense given regional conditions and readiness. The HIP inventories infrastructure barriers to housing, identifies funding to implement infrastructure needs, and develops foundational information for the future 2027 Regional Housing Needs Assessment (RHNA).

In 2018, the County of San Luis Obispo recognized the need to work regionally in solving the critical shortage of infrastructure resources and housing attainability in San Luis Obispo County. This challenge is larger than any one jurisdiction can solve alone. In January 2019 the County Board of Supervisors approved the kick off of this effort. Since inception, the HIP has always been a phased approach with the goals of regional collaboration, strategic action planning, and aligning land use planning documents.

The Regional Compact (April 2020)
The County, seven Cities, and San Luis Obispo Council of Governments (SLOCOG) approved the first major milestone of the HIP - the San Luis Obispo Countywide Regional Compact. The Regional Compact is an aspirational document that sets the tone and goals for future recommended plans and actions among the local agencies. It establishes a united regional framework to unlock the potential to develop an adequate supply of housing and resilient infrastructure that support our economic prosperity. It recognizes that people, water, transportation, connectivity, and housing form the foundation of the San Luis Obispo region’s healthy, livable communities and thriving economic opportunity.

Housing Element Alignment (June 2020)
The County and the seven Cities were each required to update their jurisdiction's Housing Elements to reflect how local communities are planning for the State’s 6 th Cycle Regional
Housing Needs Allocations through 2028. The Housing Elements were submitted to the Housing and Community Development (HCD) in December 2020. As part of the Housing Element update process, the regional approach section was developed to showcase the ongoing commitment of each agency to the HIP collaboration. This section presents a regional vision and policies focused specifically on fostering regional collaboration to plan and develop housing and supportive infrastructure. It was the first time all seven jurisdictions included a regional approach chapter in their required housing elements.

Regional Housing and Infrastructure Plan (2022-2023)
Put on hold during the Pandemic, the HIP was revived in June 2022 with the establishment of a Memorandum of Understanding between the County of San Luis Obispo and SLOCOG.

SLOCOG became the project manager of the effort. With Senate Bill 2 funding sunsetting in September 2023, the HIP began moving at an accelerated pace. There are seven elements of Attachment 1

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the HIP and they are listed in Figure 1: HIP Elements. These elements intertwine and build upon one another.

Figure 1: HIP Elements
HIP Element Informs
Data and Project Inventory Infrastructure barriers to housing Housing Efficiency Analysis Housing Efficient Areas in HIP Infrastructure Prioritization Region’s highest priority projects to unlock housing HIP Mapping Tool Living strategic analysis tool used to show the interrelation between housing and infrastructure
Affordable-by-Design Study Menu of possible policies to increase housing attainability Funding Strategies Assessment Funding the region could pursue for priority infrastructure Housing Highlights Communication tool: Understanding the need for housing, affordability, and opportunities
There were 430 infrastructure projects collected as part of the data inventory. Of those, 18% (78 projects) were located within Housing Efficient Areas. The 78 projects were ranked using a three-tiered prioritization process based on potential new housing units served. The estimated cost for all 78 HIP projects is a little under one billion dollars. About one third of the projects are water related with the remaining being transportation improvements. The estimates for each prioritized category are relatively similar around $300 million.

Figure 2: Draft HIP Priority Projects Summary
Estimate
($ Millions) Projects
Estimate for all HIP Projects $ 919 78
High $ 323 53
Medium $ 315 9
Low $ 281 16
HIP 2023+
The HIP is the first of its kind, and it is intended to be a living document. For the last five years, collaboration has continued to build, and these incremental steps have allowed the region to make progress in addressing the monumental challenges of the housing and infrastructure shortage. Next steps to follow stakeholder guidance during Summer 2023 Outreach.

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DATA AND PROJECT INVENTORY
The HIP analyzes the transportation, water, and wastewater infrastructure barriers to housing development. Figure 3: Data Inventory Sources, provides the source details on the data used in the HIP analysis.

Figure 3: Data Inventory Sources
Data Inputs
Transportation
Housing
Water &
Wastewater
Flood Risk
Sensitive Habitat
Open Space
Prime Farmland
Fire Risk
7 Cities & County Planning Staff (Land Use
Model, 2022 Transportation Efficiency Analysis
(TEA), 2020 Housing Elements, Developer
Updates
Data Sources
44 water & wastewater entities surveyed,
Community Improvement Plans reviewed
7 Cities & County Public Works Staff, 2023 RTP
Projects List, 2022 TEA
Federal Emergency Management Agency’s
“Flood Insurance Rate” map
California Department of Fish and Wildlife
“Biogeographic Information Observation
System (BIOS)”
California Protected Areas Database and the
California Conservation Easement Database,
2023
Farmland Mapping and Monitoring Program
(FMMP) 2018
CALFIRE High Fire Hazard Severity Zones
(2023), Local Jurisdictions GIS teams
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Housing
Proposed residential developments within the seven cities and unincorporated county were collected from planning staff in 2021. This data includes specific plans, proposed residential and mixed-use projects projected for to be built between now and 2045. Residential development that has been completed or near completion was removed from the HIP analysis.

Water & Wastewater
In early January 2023, SLOCOG staff contacted the 44 water and wastewater agencies found in the 2021 Regional Water Infrastructure Resiliency Plan. Five initial questions were asked to the agencies:

1. Is your agency fulfilling its water/wastewater service demand?

2. Do you have capacity to serve additional housing units?

3. Is your agency experiencing any infrastructure limitations or does it have any infrastructure needs?

4. Have they been planned for?

5. Is there a cost estimate for these improvements?
The data collected includes the findings of the 2021 Regional Water Infrastructure Resiliency Plan, agency responses, local capital improvement project lists, and information from the County of San Luis Obispo’s Water Team. Water and wastewater service districts were used as water boundaries. Detailed GIS based data from these agencies is limited and water capacity data will be informed by the County’s Master Water Report Update. However, infrastructure projects, estimated costs, and timing were all collected. In 2023, forty-five water and wastewater projects were collected from the agencies.

Transportation
Transportation infrastructure was studied in the Transportation Efficiency Analysis (TEA) which the SLOCOG Board approved in April 2022. The TEA identified transportation barriers to housing production which resulted in a list of transportation projects that were prioritized as either land use necessitated or land use beneficial. Land use necessitated projects were transportation projects required for new housing development. These projects are considered TEA priority projects because they are needed to accelerate housing development. Land use beneficial projects are transportation projects that are not required for housing development but improve the transportation efficiency of an area. Of the 350+ transportation investments contained within in the 2023 Regional Transportation Plan (RTP), 64 transportation investments were identified as TEA projects. The San Luis Obispo Regional Transit Authority (RTA) provided details on transit projects and additional improvements needed to best serve additional housing development. The transportation infrastructure list was further refined in the HIP analysis and prioritized differently.

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Bonus Layers
The HIP analysis provides the data that connects infrastructure and housing on a regional scale for the first-time. The 2023 effort is also the first phase of the analysis. When planning for housing, land conditions carefully considered. To provide a fuller picture, flood risk, sensitive habitat, open space, prime farmland, and fire risk were all included as additional reference information. These were not used to remove infrastructure projects from the HIP list but are there to provide additional context.

HOUSING EFFICIENCY ANALYSIS
The HIP Infrastructure Analysis looks at three efficiency factors: transportation access, water capacity, and wastewater capacity. By combining the three efficiency factors, housing efficient areas were identified. This is graphically represented in Figure 4: HIP Mapping Process. Any infrastructure projects located in the “efficient” or “potential” mapped areas moved on to the prioritization phase. All areas and projects that were considered “limited” were removed from further analysis. The Communities of Shandon, Avila Beach, and Cambria were removed from HIP analysis since they did not meet the efficiency criteria.

Figure 4: HIP Mapping Process
There were 430 infrastructure projects collected as part of the data inventory. Of those, 18% (78 projects) were located within a Housing Efficient Area. The 78 projects moved on to the prioritization phase. The flow of the analysis can be seen in Figure 5: HIP Analysis Process

INFRASTRUCTURE PRIORITIZATION
After stakeholder outreach in February and March 2023, a three-tiered approach was selected to prioritize projects. Projects were labeled as high, medium, or low depending on three factors: if the project supports new housing, the benefit/cost (project cost per total potential Attachment 1

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housing units within community), and barriers to development. Barriers to development include instances such as a building moratorium. These barriers are outside the controls of the HIP and slow housing development. The entire analysis and prioritization process can be seen in Figure 5.

Figure 5: HIP Analysis Process

LIMITED
Missing 2 of the 3
efficiency factors –
limited capacity for
housing acceleration
Located in Job Cluster
Include any Infrastructure
Needs in HIP
Future Add-ins:
• Job clusters data
• Master Water Report data
• Transportation
Access Factors:
• 1 mile from
interchange
• ½ mile from a bike way
• ½ mile from bus stop
• Has water capacity
• Has wastewater
capacity

EFFICIENT POTENTIAL
Future Add-ins:
• Job clusters data
• Master Water Report
data
Missing 1 of the 3
efficiency factors
High Medium
Needed to support
new housing
Limited barriers to
development
Low
Outside barriers to
development that
would likely delay or
prohibit
development
Low Benefit/Cost
Needed to support
new housing
Limited barriers to
development
Located in Jobs Cluster
Housing Efficient Areas (HEA) Analysis
Considers 3 efficiency factors: (1) transportation access, (2) water capacity, (3) wastewater capacity High Benefit/Cost Moderate Benefit/Cost
Needed to support
new housing
Combine HIP Projects from Efficient & Potential HEA
into one list and prioritize
HIP Project Prioritization
Considers: (1) if project is needed for new housing, (2) Benefit/Cost (investment cost per additional potential housing units served), (3) barriers to development Include any
infrastructure needs
that would help make
area efficient
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WATER
$296M

TRANSPORTATION
$618M
Infrastructure projects were divided into two lists, water and transportation, and then prioritized. It was concluded that transportation projects, in general, could be built at various stages of housing development. Whereas, housing cannot be built without adequate water distribution and collection infrastructure. Each list was sorted by highest benefit/cost. The total funding need for the list was divided by three to categorize projects as high, medium, or low.

The premise of the HIP is to help accelerate housing development, so the current prioritization factors relate solely to the total amount of proposed housing. In the future, other factors like jobs-housing balance factors and proposed housing unit type could be considered.

Findings
The draft HIP list contains 78 infrastructure projects with an estimated cost of nearly one billion dollars in need. As seen in Figure 6: Draft HIP List Summary, about one third of the needed infrastructure investments are water-related (supply & wastewater) and two-thirds are transportation-related. Interestingly, each priority category (high, medium, low) are relatively similar at around $300 million. However, the cost of nine medium ranked projects is equivalent to 53 high priority projects.

Figure 6: Draft HIP List Summary
Figure 7: Priority Projects by Community breaks down the total number of HIP priority projects, the total investment needed for each proposed housing unit, and the total estimate investment needed by community. Within the 78 total projects, three are listed as multijurisdictional projects including Central Coast Blue, the Regional Transit Authority Cashless Fare System Conversion, and the North County Transit Charging Facility. In Figure 7, these are listed as a separate row and are not included individually in the "HIP Projects" column for each community. However, multijurisdictional project costs are included in the community's total investment needed. The number of multijurisdictional projects by priority can be seen in Figure 8.

Estimate
($ millions) Projects
Total Estimate $ 919 78
High $ 323 53
Medium $ 315 9
Low $ 281 16
WATER $ 301 19
TRANSPORTATION $ 618 59
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Figure 7: Priority Projects by Community
Community
Total
Proposed
Dwelling
Units
HIP
Projects High Medium Low
Total Investment
needed per
proposed unit
Total Estimated
Investment
Needed ($
millions)
Multijurisdictional* 3 2 1 $ 95
Arroyo Grande 600 1 1 $ 227,254 $ 136
Atascadero 722 2 1 1 $ 23,734 $ 17
Grover Beach 624 4 3 1 $ 85,920 $ 54
Morro Bay 120 1 1 $ 183,368 $ 22
Paso Robles 4,959 17 16 1 $ 37,055 $ 184
Pismo Beach 297 $ 61,179 $ 18
San Luis Obispo 6,171 26 23 3 $ 43,197 $ 267
County 2,221 22 6 3 13 $ 77,286 $ 172
Cayucos 7 2 1 1 $ 1,185,714 $ 8
Los Osos - 3 3 $ - $ 15
Nipomo 1,351 6 4 1 1 $ 25,171 $ 34
Oceano 4 1 1 $ 950,000 $ 4
San Miguel 152 1 1 $ 269,737 $ 41
Santa
Margarita 514 1 1 $ 2,918 $ 2
Templeton 193 7 1 1 5 $ 341,647 $ 66
Cal Poly 2,780 2 2 $ 17,986 $ 50
Total Projects 15,714 78 53 9 16 $ 58,547 $ 920
Priority Category Total Cost Estimate ($
millions) $ 323 $ 315 $ 281
Figure 8: Multijurisdictional Projects by Priority
Community Multijurisdictional HIP
Projects High Medium Low
Arroyo Grande1,2 2 1 1
Atascadero2,3 2 2
Grover Beach1,2 2 1 1
Morro Bay2 1 1
Paso Robles2,3 2 2
Pismo Beach1,2 2 1 2
San Luis Obispo2 1 1
County2,3 2 2
The 3 multijurisdictional projects include the following: Central Coast Blue1, Cashless Fare System Conversion2, North County Charging Facility3
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Ninety-nine percent of the region’s population lives in four out of five subregions: North County, Central County, North Coast, and South County. Both North and Central County have 29 HIP projects. Even though projects in these two regions make up the majority of the HIP list, North County and Central County combined make up 81% of the proposed new housing units in the region.

Figure 9: Priority Projects by Subregion
Subregion Total Proposed
Dwelling Units
HIP
Projects High Medium Low
Total Investment
needed per
proposed unit
Total
Estimated
Investment
Needed
($ millions)
North County 6,540 29 20 3 6 $ 47,401 $ 310
Central County 6,171 29 25 3 1 $ 51,693 $ 319
North Coast 127 6 0 1 5 $ 354,331 $ 45
South County 2,876 13 7 2 4 $ 85,535 $ 246
The draft list can be viewed in Appendix A: HIP Project List.

Future Data Considerations
Creating balanced communities is one of the six 2020 Regional Housing Compact goals. The 2023 Sustainable Communities Strategy defines a jobs-housing balanced community as A community where residents can both live and work. With jobs and housing in close proximity, vehicle trips and commute times reduce and active transportation and transit use increase. These balanced communities also provide a broad mix of housing options to accommodate households with a range of incomes.

As a proactive measure, the jobs-housing balance of communities was analyzed using live/work percentages. A live/work percentage is the total number of employees living and working in the city or community boundaries divided by the total workers living in that boundary. In future iterations of the HIP, jobs-housing balance could be integrated through the live/work percentage and additional job cluster data as mentioned in Figure 5: HIP Analysis Process. The data displayed in
Figure 10 and Figure 11 was not used to prioritize projects in the 2023 HIP. The information is for reference purposes only. This information is included since it relates to goals found in the 2020 Regional Housing Compact, HIP stakeholder interest, and or relates to the 2023 Affordable-by-Design Study. The 2023 Affordable-By-Design Study has shown that units within the multi-family category are more aligned units in the low- and moderately-priced income Attachment 1

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categories. Understanding the proposed multi-family percentage of each community provides better insight on how the region will fulfill the needs of working households.

Figure 10: Future Data Considerations by Community
Community
Number of Total
Proposed
Dwelling Units
% of Multifamily units
proposed
Live Work
Percentage
Arroyo Grande 600 18% 14%
Atascadero 722 75% 21%
Grover Beach 624 81% 9%
Morro Bay 120 47% 21%
Paso Robles 4,959 42% 28%
Pismo Beach 297 30% 12%
San Luis Obispo 6,171 58% 41%
County 2,221 25%
Cayucos 7 0% 13%
Los Osos - 0% 11%
Nipomo 1,351 34% 9%
Oceano 4 100% 4%
San Miguel 152 0% 3%
Santa Margarita 514 10% 2%
Templeton 193 19% 12%
Total 15,714
Source: Longitudinal Employer-Household Dynamics (LEHD) 2019, SLOCOG GIS Figure 11: Future Data Considerations by Subregion
Subregion
Number of Total
Proposed
Dwelling Units
% of Multi-family
units proposed
Live Work
Percentage
North County 6,540 42% 40%
Central County 6,171 58% 44%
North Coast 127 44% 27%
South County 2,876 41% 27%
Source: Longitudinal Employer-Household Dynamics (LEHD) 2019, SLOCOG GIS Attachment 1

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HIP MAPPING TOOL
The HIP Mapping Tool was created to display GIS analysis and foster future collaboration. The tool was created using ArcGIS Experience Builder, ArcGIS Online, and ArcGIS Storymaps. Users have the ability to pan around the map in the "Explore" tab and turn map layers on and off.

The "Project List" tab allows the user to browse through HIP projects categorized by transportation or water projects and is color coded by priority category. When a project is selected on the list, the map will zoom to the project. The user may also click on projects from the map to view a pop-up showing the name, description, and estimated cost. The "Story" tab of the tool gives a summary of the HIP and provides the four-step process of how the analysis was carried out in GIS. Individual layers are shown along with project tables.

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AFFORDABLE-BY-DESIGN STUDY
The Affordable-by-Design (ABD) Study evaluates housing affordability characteristics for the seven incorporated Cities and unincorporated San Luis Obispo County. The intention of the ABD study is to show certain units (built without financial assistance or deed restrictions) as either low- or moderate-income units in annual Housing and Community Development RHNA reports. For purposes of the ABD Study, “affordable by design” (ABD) is defined as new housing that is not income- or rent-restricted, but where typical market rents or sales prices would be affordable to low or moderate-income households (earning 50-120% of Area Median Income).

The San Luis Obispo County’s published rent and sale price limits by income level define the rent and price range affordable at this income level as seen in Figure 12.

Figure 12: San Luis Obispo County’s Rent and Sale Price Limits (May 2022) Attachment 1

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The ABD Study includes the following approach:

1. Identify common physical characteristics for ABD housing

2. Interviews with local housing developers

3. Consider whether ABD housing examples from other regions could meet ABD criteria in SLO County’s market

4. Financial feasibility analysis of illustrative “prototypical” development examples

5. Identify regulatory barriers to development to ABD housing

6. Highlight potential policy measures to support ABD housing EcoNorthwest used development “prototypes” to highlight characteristics of housing that could potentially meet the Study’s ABD definition. These are prototypical developments informed by (or extrapolated from) actual development. Each development prototype is a specific combination of key characteristics, such as number of units and configuration (e.g., detached, attached side-byside, stacked), Lot size / density, height, unit size and parking. In May 2023, preliminary findings were presented to five stakeholder groups. The following information provides a brief summary and more preliminary information can be viewed in Appendix B: Affordable-by-Design Study Preliminary Information. The final report will be completed in July for SLOCOG Board consideration in August.

Rental Preliminary Findings
On the rental side of new development (within the last 5 years), some new apartments are affordable at a moderate-income level. This may include some mixed-income buildings but 1- bedroom units are most likely to be affordable whereas no 3-bedroom units are categorized as affordable. Design helps but does not guarantee affordability. Most of the buildings that fit within the ABD definition are 3-story, they have a smaller average unit sizes, but not all small units are affordable to moderate-income households.

EcoNorthwest looked at examples from other housing markets within California, Washington, and Oregon to add a few possibilities to a financial feasibility analysis. These protypes included:

A. 3-story walk-up apartments—standard
• Larger units (~880 sf average)
• Typical density, parking ratio, and landscaping
B. 3-story walk-up apartments—compact
• Smaller units (~620 sf average)
• Higher density, lower parking ratio, less landscaping C. 4-story micro-unit apartments
• Very small units (~300 sf, shared kitchens, individual kitchenettes) • Very high density, no parking, no landscaping
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Figure 13: Feasibility of Rental Prototypes by Subregion The financial feasibility analysis uses a metric called “return on cost” (ROC), which reflects the income potential of the completed development0F
1 divided by the total cost of development.

This ratio is often used as an initial indicator of development feasibility for rental developments, as it provides a preliminary indication of whether the completed property will provide competitive financial returns that could attract investors and meet loan underwriting requirements. More data on the Market Assumptions can be found in Appendix B: Affordableby-Design Study Preliminary Information.

Figure 14: Key Takeaways from Financial Feasibility Analysis (Rental)

1 Net Operating Income (NOI), the revenue after accounting for vacancy and operating expenses.

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For-Sale Preliminary Findings
In the last five years, only manufactured housing in manufactured home parks met target price points for new for-sale housing using County calculations. This does not factor in the lot cost associated with manufactured home parks. There are few small detached homes that came close and could potentially meet the City of San Luis Obispo’s affordability standards since they calculate income limits differently. Looking at examples from other housing markets:

A. Small detached units
• ~350-800 square feet units
• Shared yards with clustered parking
• Smallest units may be affordable at close to 120% of AMI in that market • Affordability: Comparable Units in SLO region exceed target price B. Small condo units
• ~325-600 square feet units
• Little or no on-site parking
• Can be affordable to Moderate Income households in portions of some highcost regions • Feasibility: May not be viable in SLO region’s market C. Simple condo development
• ~600-1000 square feet units
• Little or no on-site parking with few shared amenities • Can be affordable to Moderate Income households in portions of some highcost regions. • Feasibility: May not be viable in SLO region’s market D. Smaller townhouse units
• ~1,000-1,600 square feet units
• Can be affordable to Moderate Income households in portions of some highcost regions • Affordability: Comparable units in SLO region exceed target price E. Smaller single-detached homes
• 3BR, ~1200-1500 square feet units
• Can be affordable to moderate-income households in moderate-cost areas (e.g., Central Valley)
• Affordability: Comparable units in SLO region exceed target price San Luis Obispo’s regional market conditions do not support new for-sale housing at prices affordable to moderate-income households, with the possible exception of manufactured homes in housing parks. A few developments have attempted to produce ABD for-sale housing, but even with very small homes, prices are still too high for the moderate-income target price range. Factors that make for-sale housing more affordable in other areas may not translate to the SLO County market (lower land cost, no parking, few amenities, micro units).

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Market Conditions
In summary, the rental market is close and regulatory change could help with smaller units in cost-effective developments. The market is not close in the for-sale side and a longer-term approach is needed. Increasing the housing production overall can help bring supply and demand into balance and make ABD achievable over the longer term. These preliminary findings are not surprising but sobering. Looking at a wide-angle view, ECONorthwest looked at what conditions make for lower-cost housing.

Figure 15: Market Conditions for Lower-Cost Housing
As seen in Figure 15: Market Conditions for Lower-Cost Housing, there are four factors that have to come together in the housing market to product lower-cost housing including simple design with lower-cost materials, lower cost locations, efficient production, and smaller units with a higher density.

A primary deliverable for the ABD Study is to create a menu of policy change options that will incentivize ABD units in the region. Figure 16 depicts how the public sector impacts the conditions for ABD. ECONorthwest interviewed six developers that work within the San Luis Obispo Region. Those interviews provided four market barrier themes to ABD Development including land cost, demand for high-end housing, construction costs, and demand for parking.

They also identified six regulatory barrier themes to ABD development including: discretionary review, density caps, minimum unit sizes, parking requirements that exceed market demand, impact fees and inclusionary zoning, and required infrastructure improvements. More of these details will be made available in July.

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Figure 16: Public Sector and ABD Market Conditions
In coordination with HIP stakeholders, ECONorthwest identified potential policies and incentives that local governments in the region could implement to support ABD housing development. In the next few months, the consultant will identify relevant case studies from jurisdictions that have implemented programs or policies similar to the relevant incentives, and, where possible, the impact they have had on housing production for ABD housing.

FUNDING STRATEGIES ASSESSMENT
The Funding Strategies Assessment seeks to identify funding and financing sources that can reasonably implement the water, wastewater, and transportation infrastructure needs of the HIP. BKF Engineering has drafted a grant inventory that connects each specific HIP project to various public sources of funding. They also include a grant glossary with factors such as eligibility requirements, deadlines, funding amounts available. These draft pieces can be reviewed in Appendix C: Funding Strategies Assessment Preliminary Information.

A Gap Analysis is currently being conducted which aims to determine the difference between the required funding for the projects and the potential funding that can be secured through grants and other funding sources. The Gap Analysis approach includes:

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1. Assessing the Projects & Determining Funding Requirements:

2. Identifying Potential Funding Sources

3. Estimating Potential Grant Funding

4. Calculating the Funding Gap

5. Proposing Strategies to Bridge the Funding Gap
The Funding Strategies Assessment will include a detailed breakdown on a project-by-project basis, covering funding requirements, corresponding funding sources, projected grant funding, and the residual funding gap, including shortfalls and match requirements. An actionable timeline and a roadmap, along with recommendations for implementing the proposed strategies aimed to maximize the probability of securing the requisite funds for HIP projects.

The complete Funding Strategies Assessment will be available in July/August.

HOUSING HIGHLIGHTS
Stakeholder Engagement Strategy
The HIP engagement strategy established four outreach objectives:
• Foster ongoing collaboration and buy-in among private and public stakeholders. • Remind government/elected officials of the Regional Compact and the motives behind it to lay groundwork for their commitment to the 2023 regional HIP. • Build public sentiment in support of solutions and regional planning efforts related to HIP.
• Support effective coordination with and communication among SLOCOG, HIP consultants and the Comprehensive Economic Development Strategy (CEDS) teams.

The San Luis Obispo region has strategic goals for the future of housing and infrastructure, but they can only be achieved through the decisions and actions of organizations and stakeholders.

The stakeholder meetings are designed to have honest conversations about what each organization can and needs to do to realize those goals. The December 2022 Regional Managers Retreat guided the stakeholder engagement process which is depicted in Figure 17: HIP Stakeholder Process.

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Figure 17: HIP Stakeholder Process
The following list are the key stakeholder groups engaged – totaling approximately 100 individuals that participated during the HIP development process in January - June 2023:

Regional Managers/ Key Staff: A key driving force behind developing this plan has been regional leadership, including eight City Managers, County Administrative Officer, SLOCOG Executive Director (and key directors from their organizations).

Elected Officials: Two City Council Members with knowledge of regional differences bring the various perspectives and concerns voiced by their respective constituents for this Steering Committee. The full 40 elected officials within the region will have an opportunity to hear about the plan through public updates to SLOCOG Board as well as through presentations of the recommended HIP to their Councils and Boards in Summer 2023.

Building & Development Cluster: Leaders in the building and development industry that convene quarterly with the goal of regional coordination focused on aligning housing and infrastructure needs to create a strong local economy.

Housing Advocacy Group: Organizations and individuals that have significant influence in the community, with representation from the non-profit builders, local chambers of commerce and various advocate organizations.

Housing Action Team: Existing work group made up of planning/ community development staff from Cities, County, and SLOCOG.

Community Stakeholders: The broader community will be engaged in partnership with the SLO Chamber of Commerce Housing Summit in Spring 2023. Feedback from this event will be brought to the HIP Steering Committee to discuss and adjust the communications plan accordingly.

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HIP Steering Committee: Formed to oversee the vision for the HIP Outreach Strategy and to bring leaders in each of these areas together, aligning and integrating the various interests that will lead to action on the region’s priorities.

A HIP Steering Committee was selected to represent broader interests and to allow for crosssector collaboration and cohesion. It is a small group of representatives with a balance of public and private backgrounds and a variety of expertise in issues related to development around the region. The HIP Steering Committee guided the development of a balanced plan, and helped to identify paths for the plan’s successful adoption and implementation. The HIP Steering Committee includes Matthew Bronson (Grover Beach), Mayor Heather Moreno (Atascadero), Councilmember Andy Pease (SLO City), Trevor Keith (County of SLO), Aaryn Abbott (Abbott | Reed), Lenny Grant (RRM), Jeff Eckles (SLOCHTF), Courtney Howard (SLO Flood Control & Water Conservation District), Anthony Palazzo (Cal Poly), and Jorge Aguilar (Wallace Group).

Regional Housing Success Stories
Available following Summer 2023 Outreach

NEXT STEPS
Available following Summer 2023 Outreach

APPENDIX
Appendix A: Draft List of HIP Infrastructure Priorities Appendix B: Affordable-by-Design Study Preliminary Information Appendix C: Funding Strategies Assessment Preliminary
Information
Appendix D: Regional Compact & Housing Element Regional Chapter
Appendix E: Additional Housing Data July 2023
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City Council Agenda July 18, 2023
Priority
Support
s new
housing
Benefit/C
ost
Propose
d Units
within
Commu
nity
Outside
Barriers
Live
Work
Percent
age
Project
Type
Commu
nity

OBJECTI
D
RTP ID # Project Name Project Description Project
Type
2019 RTP
Unescalated
Cost
2019
RTP
Time
Horizon
2021 Cost
Estimate
2023 Cost
Estimate
2023
Time
Horizon
Jurisdict
ion
Notes
Commu
nity
Buffer
Name
Jurisdict
ion
TOTAL
High Y $ 1 4,959 28% Transit AX Paso Express provide service to Beechwood development Paso Robles High Y $ 1 4,959 28% Transit AZ Paso Express provide service to Olsen/South Chandler development Paso Robles High Y $ 343 4,959 28% Transit AY Paso Robles New Route Paso Express provide service to North Chandler Ranch* $700,000 yearly operating $ 1,700,000 Paso Robles High Y $ 501 4,959 28% J
South River Rd. /
Charolais Rd.
roundabout
Construct roundabout $ 1,960,000 $ 2,486,000 By 2035
Not sure
if this a
real
project
or not
Paso
Robles
Paso
Robles
Paso
Robles
High Y $ 618 4,959 28% K Airport Road extension
North Chandler Ranch
Extend Airport Road as 2-lane arterial from Linne Rd.
to Union Rd. $ 2,000,000 $ 3,066,000 by 2045
Cost can
be
updated
TIF
Paso
Robles
Paso
Robles
Paso
Robles
High Y $ 648 4,959 28% AS N. River Rd. Class I $ 3,214,500 By 2028 Paso Robles High Y $ 726 4,959 28% AQ Construct path: Nicklaus to Old S. River Rd. Class I $ 595,000 U $1,000,000 $ 3,600,000 Paso Robles High Y $ 870 4,959 28% I
Creston Rd.: Niblick Rd.
to Meadowlark Dr.
(Phase 3)
Install traffic-calming and intersection improvementsroadway diet and signals $ 3,470,000 $ 4,313,210 By 2035 project
descripti
on
update
by city
Paso
Robles
Paso
Robles
Paso
Robles
High Y $ 1,577 4,959 28% AU Huer Huero Creek Trail Construct Class II bike lanes Class II $ 5,100,000 U $ 7,818,300 by 2045 Paso Robles High Y $ 2,017 4,959 28% F Creston Rd.: South
River Rd. to Niblick Rd.

Streetscape enhancements and pedestrian crossing
improvements Livability $ 8,300,000 By 2030 $ 10,000,000 By 2028 PasoRobles Paso
Robles
Paso
Robles
High Y $ 2,256 4,959 28% AT Class I $ 11,187,000 By 2035 Paso Robles High Y $ 3,091 4,959 28% Highway AV Construct Phase 2 improvements: new interchange $ 10,000,000 U $ 15,330,000 by 2045 Paso Robles High Y $ 3,480 4,959 28% G
Niblick Rd. Corridor
enhancements,
operational
improvements,
Complete Streets
Transportation demand management improvements Livability $ 4,000,000 By 2030 $ 17,257,000 By 2035 Paso Robles
Paso
Robles
Paso
Robles
High Y $ 2,884 4,959 28% Paso Robles
There are some areas of the City’s wastewater
collection (sewer) system that must be upsized in
conjunction with new development
$ 14,300,000 next 10 years Paso
Robles
Medium Y $ 4,386 4,959 28% Highway AW
US 101 / SR 46W I/C
construct two
roundabouts
Operational improvements: modify interchange, EB
and WB roundabouts (Phase 3) $ 17,500,000 By 2045 $ 21,752,500 By 2035 PasoRobles Paso
Robles
Paso
Robles
High Y $ 10,587 4,959 28% Highway L
SR 46E / Union Rd.
improvements (Phase
1)
Construct overcrossing; realignment, vertical sight
distance improvements, channelization & bike
lanes/sidewalks on Union Road from Ardmore Road
to Barney Schwartz Park
$ 25,000,000 By 2030 $ 52,500,000 by 2028 Paso
Robles
Paso
Robles
Paso
Robles
High Y $ 2,884 4,959 28% Water Paso Robles Paso Robles City water some portions of water system experiencing
infrastructure constraints $ 14,300,000 next 10 years PasoRobles Total Investment
needed per proposed
unit
$ 37,055.21
Community Specific
Projects
17 Paso Robl Paso Robles Service Add *When working with development ear Paso Robl Paso Robles Service Add *When working with development ear Paso Robl
Non-HighwPaso Robl NTH-MSE2
Non-HighwPaso Robl NTH-RORS
Active Tra Paso Robl NTH-ATP- Class I trail multi-use paved trail from 13th St. to SR46 a City of PasPaso Robl Paso Robl Active Tra Paso Robl NTH-AT1- Creekside Bike Path: Pha Unconstra$2 M ComPaso Robl Paso Robl Non-HighwPaso Robl NTH-MSE2
Active Tra Paso Robl NTH-AT2- new proje Paso Robl Paso Robl Non-HighwPaso Robl NTH-MSE2
Active Tra Paso Robl NTH-ATP- Paso Robles Eastside GraComplete gaps in the Grand Loop Bikeway Route on the new proje Paso Robl Paso Robl Paso Robl NTH-MHWSR 46E / Union Rd. impro Refine cosPaso Robl Paso Robl Active Tra Paso Robl NTH-AT3-
Wastewat
Paso Robles City wastew
Paso Robl NTH-MHW
Paso Robl NTH-HWY
High Y $ 153 4,959 40% Transit North County Charging facility at 1735 Paso Robles St., Paso Robles $ 758,727 High Y $ 35 4,959 100% Transit Countywide Cashless Fare System Conversion (further study is required) $ 173,565 North County Charging F
$ 183,756,802
* Multijurisdictional Project Cost Estimate = Total Benefit/Cost per unit * number of proposed units within community Attachment 2