Paso Robles City Council
May 19, 2026

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

The SLA provides written notification to the state support function’s management that they are bound by the provisions of Publication 1075, relative to protecting all FTI within their possession or control.

The SLA shall detail the IRS’s right to inspect state support function facilities and operations receiving, processing, storing, accessing, protecting and/or transmitting FTI under this agreement to assess compliance with requirements defined in IRS Publication 1075. The SLA shall specify that IRS’s right of inspection includes the use of manual and/or automated scanning tools to perform compliance and vulnerability assessments of information technology (IT) assets that access, store, process or transmit FTI.

The SLA shall detail the state support function’s responsibilities to address corrective action recommendations to resolve findings of noncompliance identified by IRS inspections.

The agency will conduct an internal inspection of the state support function every 18 months, as described in Section 2.D.3, Internal Inspections. Multiple agencies sharing a state support function such as a consolidated data center may partner together to conduct a single, comprehensive internal inspection. However, care must be taken to ensure agency representatives do not gain unauthorized access to other agencies’ FTI during the internal inspection.

The employees from the state support function with access to or use of FTI, including system administrators and programmers, must:

1. Meet the background check requirements defined in Background Investigation Minimum Requirements and

2. Receive disclosure awareness training and sign a confidentiality statement, prior to initial access to or use of FTI, as well as annually thereafter. These provisions also extend to any contractors or sub-contractors hired by the state support function that have authorized access to or use of FTI.

The specific data breach incident reporting procedures for all state support function employees, contractors and sub-contractors must be covered. The required disclosure awareness training must include a review of these procedures.

Responsibilities must be identified for coordination of the 45-day notification of the use of contractors or sub-contractors with access to FTI.

Require a formal sanction process for individuals covered by the SLA for failing to comply with established FTI security policies and procedures. Notification of designated agency personnel is required within 72 hours when the formal sanction is a proposed disciplinary or adverse action involving an unauthorized access or disclosure of FTI and must include the date the unauthorized access or disclosure of FTI occurred.

Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

Generally, consolidated data centers are operated either by a separate state agency (e.g., Department of Information Services) or by a private contractor or sub-contractor. If an agency is considering transitioning to either a state-owned or private vendor consolidated data center, the Office of Safeguards strongly suggests the agency submit a request for discussions with Safeguards as early as possible in the decision making or implementation planning process. The purpose of these discussions is to ensure the agency remains compliant with safeguarding requirements during the transition to the consolidated data center.

Disclosure awareness training videos produced by the IRS can be found at:
https://www.irs.gov/privacy-disclosure/irs-disclosure-awareness-videos REFERENCES 26 U.S.C. §6103(n) Confidentiality and disclosure of returns and return information (n) Certain other Persons
Pursuant to regulations prescribed by the Secretary, returns and return information may be disclosed to any person, including any person described in section 7513(a), to the extent necessary in connection with the processing, storage, transmission, and reproduction of such returns and return information, the programming, maintenance, repair, testing, and procurement of equipment, and the providing of other services, for purposes of tax administration. 26 C.F.R. §301.6103(n)-1 Disclosure of returns and return information in connection with written contracts or agreements for the acquisition of property or services for tax administration purposes. (a) General rule.
(1) Pursuant to the provisions of section 6103(n) of the Internal Revenue Code and subject to the conditions of this section, officers and employees of the Treasury Department, a State tax agency, the Social Security Administration, or the Department of Justice, are authorized to disclose returns and return information (as defined in section 6103(b)) to any person (including, in the case of the Treasury Department, any person described in section 7513(a)), or to an officer or employee of the person, for purposes of tax administration (as defined in section 6103(b)(4)), to the extent necessary in connection with a written contract or agreement for the acquisition of -
(i) Equipment or other property; or
(ii) Services relating to the processing, storage, transmission, or reproduction of returns or return information, the programming, maintenance, repair, or testing of equipment or other property, or the providing of other services.
(2) Any person, or officer or employee of the person, who receives returns or return information under paragraph (a)(1) of this section, may -
(i) Further disclose the returns or return information to another officer or employee of the person whose duties or responsibilities require the returns or return information for a purpose described in this paragraph (a); or
Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

(ii) Further disclose the returns or return information, when authorized in writing by the Internal Revenue Service (IRS), to the extent necessary to carry out the purposes described in this paragraph (a). Disclosures may include disclosures to an agent or subcontractor of the person, or officer or employee of the agent or subcontractor. (3) An agent or subcontractor, or officer or employee of the agent or subcontractor, who receives returns or return information under paragraph (a)(2)(ii) of this section, may further disclose the returns or return information to another officer or employee of the agent or subcontractor whose duties or responsibilities require the returns or return information for a purpose described in this paragraph (a).
(4) Any person, or officer, employee, agent or subcontractor of the person, or officer or employee of the agent or subcontractor, who receives returns or return information under this paragraph (a), may, subject to the provisions of § 301.6103(p)(2)(B)-1 (concerning disclosures by a Federal, State, or local agency, or its agents or contractors), further disclose the returns or return information for a purpose authorized, and subject to all applicable conditions imposed, by section 6103.
(b) Limitations.
(1) Disclosure of returns or return information in connection with a written contract or agreement for the acquisition of property or services described in paragraph (a) of this section will be treated as necessary only if the performance of the contract or agreement cannot otherwise be reasonably, properly, or economically carried out without the disclosure. (2) Disclosure of returns or return information in connection with a written contract or agreement for the acquisition of property or services described in paragraph (a) of this section shall be made only to the extent necessary to reasonably, properly, or economically perform the contract. For example, disclosure of returns or return information to employees of a contractor for purposes of programming, maintaining, repairing, or testing computer equipment used by the IRS or a State tax agency shall be made only if the services cannot be reasonably, properly, or economically performed without the disclosure. If it is determined that disclosure of returns or return information is necessary, and if the services can be reasonably, properly, or economically performed by disclosure of only parts or portions of a return or if deletion of taxpayer identity information (as defined in section 6103(b)(6)) reflected on a return would not seriously impair the ability of the employees to perform the services, then only the parts or portions of the return, or only the return with taxpayer identity information deleted, may be disclosed.
(c) Penalties. Any person, or officer, employee, agent or subcontractor of the person, or officer or employee of the agent or subcontractor, who receives returns or return information under paragraph (a) of this section, is subject to the civil and criminal penalty provisions of sections 7431, 7213, and 7213A for the unauthorized inspection or disclosure of the returns or return information.
(d) Notification requirements. Any person, or agent or subcontractor of the person, who receives returns or return information under paragraph (a) of this section shall provide written notice to his, her, or its officers and employees receiving the returns or return information that - Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

(1) Returns or return information disclosed to the officer or employee may be used only for a purpose and to the extent authorized by paragraph (a) of this section and that the officer or employee is subject to the civil and criminal penalty provisions of sections 7431, 7213, and 7213A for the unauthorized inspection or disclosure of the returns or return information; (2) Further inspection of any returns or return information for a purpose or to an extent not authorized by paragraph (a) of this section constitutes a misdemeanor, punishable upon conviction by a fine of as much as $1,000, or imprisonment for as long as 1 year, or both, together with costs of prosecution;
(3) Further disclosure of any returns or return information for a purpose or to an extent not authorized by paragraph (a) of this section constitutes a felony, punishable upon conviction by a fine of as much as $5,000, or imprisonment for as long as 5 years, or both, together with the costs of prosecution;
(4) Further inspection or disclosure of returns or return information by any person who is not an officer or employee of the United States for a purpose or to an extent not authorized by paragraph (a) of this section may result also in an award of civil damages against that person in an amount not less than $1,000 for each act of unauthorized inspection or disclosure; or the sum of actual damages sustained by the plaintiff as a result of the unauthorized inspection or disclosure plus, in the case of a willful inspection or disclosure or an inspection or disclosure that is the result of gross negligence, punitive damages. In addition, costs and reasonable attorneys fees may be awarded; and (5) A conviction for an offense referenced in paragraph (d)(2) or (3) of this section shall, in addition to any other punishment, result in dismissal from office or discharge from employment if the person convicted is an officer or employee of the United States. (e) Safeguards.
(1) Any person, or agent or subcontractor of the person, who may receive returns or return information under paragraph (a) of this section, shall agree, before disclosure of any returns or return information to the person, agent, or subcontractor, to permit an inspection by the IRS of his, her, or its site or facilities.
(2) Any person, or officer, employee, agent or subcontractor of the person, or officer or employee of the agent or subcontractor, who receives returns or return information under paragraph (a) of this section, shall comply with all applicable conditions and requirements as the IRS may prescribe from time to time (prescribed requirements) for the purposes of protecting the confidentiality of returns and return information and preventing any disclosure or inspection of returns or return information in a manner not authorized by this section.
(3) The terms of any written contract or agreement for the acquisition of property or services as described in paragraph (a) of this section shall provide, or shall be amended to provide, that any person, or officer, employee, agent or subcontractor of the person, or officer or employee of the agent or subcontractor, who receives returns or return information under paragraph (a) of this section, shall comply with the prescribed requirements. Any contract or agreement shall be made available to the IRS before execution of the contract or agreement. For purposes of this paragraph (e)(3), a written contract or agreement shall include any contract or agreement Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

between a person and an agent or subcontractor of the person to provide the property or services described in paragraph (a) of this section.
(4) If the IRS determines that any person, or officer, employee, agent or subcontractor of the person, or officer or employee of the agent or subcontractor, who receives returns or return information under paragraph (a) of this section, has failed to, or does not, satisfy the prescribed requirements, the IRS, consistent with the regulations under section 6103(p)(7), may take any actions it deems necessary to ensure that the prescribed requirements are or will be satisfied, including -
(i) Suspension of further disclosures of returns or return information by the IRS to the State tax agency, the Social Security Administration, or the Department of Justice, until the IRS determines that the conditions and requirements have been or will be satisfied; (ii) Suspension of further disclosures by the Treasury Department otherwise authorized by paragraph (a) of this section; and
(iii) Suspension or termination of any duty or obligation arising under a contract or agreement with the Treasury Department.
(f) Definitions. For purposes of this section -
(1) The term Treasury Department includes the IRS, the Office of the Chief Counsel for the IRS, and the Office of the Treasury Inspector General for Tax Administration; (2) The term State tax agency means an agency, body, or commission described in section 6103(d); and
(3) The term Department of Justice includes offices of the United States Attorneys. (g) Effective date. This section is applicable on June 5, 2007. 26 U.S.C. §7213. Unauthorized disclosure of information (a) Returns and return information
(1) Federal employees and other persons
It shall be unlawful for any officer or employee of the United States or any person described in section 6103(n) (or an officer or employee of any such person), or any former officer or employee, willfully to disclose to any person, except as authorized in this title, any return or return information (as defined in section 6103(b)). Any violation of this paragraph shall be a felony punishable upon conviction by a fine in any amount not exceeding $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution, and if such offense is committed by any officer or employee of the United States, he shall, in addition to any other punishment, be dismissed from office or discharged from employment upon conviction for such offense.
(2) State and other employees
Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

It shall be unlawful for any person (not described in paragraph (1)) willfully to disclose to any person, except as authorized in this title, any return or return information (as defined in section 6103(b)) acquired by him or another person under subsection (d), (i)(1)(C), (3)(B)(i), or (7)(A)(ii), (k)(10), (13), (14), or (15), (l)(6), (7), (8), (9), (10), (12), (15), (16), (19), (20), or (21) or (m)(2), (4), (5), (6), or (7) of section 6103 or under section 6104(c). Any violation of this paragraph shall be a felony punishable by a fine in any amount not exceeding $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution. (3) Other persons
It shall be unlawful for any person to whom any return or return information (as defined in section 6103(b)) is disclosed in a manner unauthorized by this title thereafter willfully to print or publish in any manner not provided by law any such return or return information. Any violation of this paragraph shall be a felony punishable by a fine in any amount not exceeding $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution.
(4) Solicitation
It shall be unlawful for any person willfully to offer any item of material value in exchange for any return or return information (as defined in section 6103(b)) and to receive as a result of such solicitation any such return or return information. Any violation of this paragraph shall be a felony punishable by a fine in any amount not exceeding $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution. (5) Shareholders
It shall be unlawful for any person to whom a return or return information (as defined in section 6103(b)) is disclosed pursuant to the provisions of section 6103(e)(1)(D)(iii) willfully to disclose such return or return information in any manner not provided by law. Any violation of this paragraph shall be a felony punishable by a fine in any amount not to exceed $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution. (b) Disclosure of operations of manufacturer or producer Any officer or employee of the United States who divulges or makes known in any manner whatever not provided by law to any person the operations, style of work, or apparatus of any manufacturer or producer visited by him in the discharge of his official duties shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $1,000, or imprisoned not more than 1 year, or both, together with the costs of prosecution; and the offender shall be dismissed from office or discharged from employment.
(c) Disclosures by certain delegates of Secretary
All provisions of law relating to the disclosure of information, and all provisions of law relating to penalties for unauthorized disclosure of information, which are applicable in respect of any function under this title when performed by an officer or employee of the Treasury Department Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

are likewise applicable in respect of such function when performed by any person who is a “delegate” within the meaning of section 7701(a)(12)(B). (d) Disclosure of software
Any person who willfully divulges or makes known software (as defined in section 7612(d)(1)) to any person in violation of section 7612 shall be guilty of a felony and, upon conviction thereof, shall be fined not more than $5,000, or imprisoned not more than 5 years, or both, together with the costs of prosecution.
(e) Cross references
(1) Penalties for disclosure of information by preparers of returns For penalty for disclosure or use of information by preparers of returns, see section 7216. (2) Penalties for disclosure of confidential information For penalties for disclosure of confidential information by any officer or employee of the United States or any department or agency thereof, see 18 U.S.C. 1905. 26 U.S.C. §7213A. Unauthorized inspection of returns or return information (a) Prohibitions
(1) Federal employees and other persons
It shall be unlawful for—
(A) any officer or employee of the United States, or
(B) any person described in subsection (l)(18) or (n) of section 6103 or an officer or employee of any such person, willfully to inspect, except as authorized in this title, any return or return information. (2) State and other employees It shall be unlawful for any person (not described in paragraph (1)) willfully to inspect, except as authorized in this title, any return or return information acquired by such person or another person under a provision of section 6103 referred to in section 7213(a)(2) or under section 6104(c).
(b) Penalty
(1) In general
Any violation of subsection (a) shall be punishable upon conviction by a fine in any amount not exceeding $1,000, or imprisonment of not more than 1 year, or both, together with the costs of prosecution.

Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

(2) Federal officers or employees
An officer or employee of the United States who is convicted of any violation of subsection (a) shall, in addition to any other punishment, be dismissed from office or discharged from employment.
(c) Definitions
For purposes of this section, the terms “inspect”, “return”, and “return information” have the respective meanings given such terms by section 6103(b). 26 U.S.C. §7431. Civil damages for unauthorized inspection or disclosure of returns and return information
(a) In general
(1) Inspection or disclosure by employee of United States If any officer or employee of the United States knowingly, or by reason of negligence, inspects or discloses any return or return information with respect to a taxpayer in violation of any provision of section 6103, such taxpayer may bring a civil action for damages against the United States in a district court of the United States. (2) Inspection or disclosure by a person who is not an employee of United States If any person who is not an officer or employee of the United States knowingly, or by reason of negligence, inspects or discloses any return or return information with respect to a taxpayer in violation of any provision of section 6103 or in violation of section 6104(c), such taxpayer may bring a civil action for damages against such person in a district court of the United States. (b) Exceptions
No liability shall arise under this section with respect to any inspection or disclosure— (1) which results from a good faith, but erroneous, interpretation of section 6103, or (2) which is requested by the taxpayer.
(c) Damages
In any action brought under subsection (a), upon a finding of liability on the part of the defendant, the defendant shall be liable to the plaintiff in an amount equal to the sum of— (1) the greater of—
(A) $1,000 for each act of unauthorized inspection or disclosure of a return or return information with respect to which such defendant is found liable, or (B) the sum of—
(i) the actual damages sustained by the plaintiff as a result of such unauthorized inspection or disclosure, plus
Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

(ii) in the case of a willful inspection or disclosure or an inspection or disclosure which is the result of gross negligence, punitive damages, plus
(2) the costs of the action, plus
(3) in the case of a plaintiff which is described in section 7430(c)(4)(A)(ii), reasonable attorneys fees, except that if the defendant is the United States, reasonable attorneys fees may be awarded only if the plaintiff is the prevailing party (as determined under section 7430(c)(4)).
(d) Period for bringing action
Notwithstanding any other provision of law, an action to enforce any liability created under this section may be brought, without regard to the amount in controversy, at any time within 2 years after the date of discovery by the plaintiff of the unauthorized inspection or disclosure. (e) Notification of unlawful inspection and disclosure. If any person is criminally charged by indictment or information with inspection or disclosure of a taxpayer’s return or return information in violation of—
(1) paragraph (1) or (2) of section 7213(a),
(2) section 7213A(a), or
(3) subparagraph (B) of section 1030(a)(2) of title 18, United States Code, the Secretary shall notify such taxpayer as soon as practicable of such inspection or disclosure. The Secretary shall also notify such taxpayer if the Internal Revenue Service or a Federal or State agency (upon notice to the Secretary by such Federal or State agency) proposes an administrative determination as to disciplinary or adverse action against an employee arising from the employee’s unauthorized inspection or disclosure of the taxpayer’s return or return information. The notice described in this subsection shall include the date of the unauthorized inspection or disclosure and the rights of the taxpayer under such administrative determination.
(f) Definitions
For purposes of this section, the terms “inspect”, “inspection”, “return”, and “return information” have the respective meanings given such terms by section 6103(b). (g) Extension to information obtained under section 3406For purposes of this section— (1) any information obtained under section 3406 (including information with respect to any payee certification failure under subsection (d) thereof) shall be treated as return information, and
(2) any inspection or use of such information other than for purposes of meeting any requirement under section 3406 or (subject to the safeguards set forth in section 6103) for purposes permitted under section 6103 shall be treated as a violation of section 6103.

For purposes of subsection (b), the reference to section 6103 shall be treated as including a reference to section 3406.
(h) Special rule for information obtained under section 6103(k)(9) Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

For purposes of this section, any reference to section 6103 shall be treated as including a reference to section 6311(e).

Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

ATTACHMENT 1

HIPAA BUSINESS ASSOCIATE AGREEMENT
If Customer is a Covered Entity or a Business Associate and includes Protected Health Information in Customer Data or FastTrack Data, execution of a license agreement that includes the Online Services Terms (“Agreement”) will incorporate the terms of this HIPAA Business Associate Agreement (“BAA”) into that Agreement. If there is any conflict between a provision in this BAA and a provision in the Agreement, this BAA will control.

1. Definitions.

Except as otherwise defined in this BAA, capitalized terms shall have the definitions set forth in HIPAA, and if not defined by HIPAA, such terms shall have the definitions set forth in the Agreement.
“Breach Notification Rule” means the Breach Notification for Unsecured Protected Health Information Final Rule.
“Business Associate” shall have the same meaning as the term “business associate” in 45 CFR § 160.103 of HIPAA.
“Covered Entity” shall have the same meaning as the term “covered entity” in 45 CFR § 160.103 of HIPAA.
“Customer”, for this BAA only, means Customer and its Affiliates. “FastTrack Data” means all data, including all text, sound, video, or image files, and software, that are provided to Microsoft by or on behalf of Customer for Microsoft’s performance of the FastTrack Services.
“FastTrack Services” means the onboarding and migration services for Office 365 Services specified as being in scope for this BAA on the FastTrack Center BAA site at http://aka.ms/FastTrackBAA (or successor site) that are provided to Customer by Microsoft in connection with Customer’s subscription for Office 365 Services, excluding services that are performed using third-party software or software that is not hosted by Microsoft. “HIPAA” collectively means the administrative simplification provision of the Health Insurance Portability and Accountability Act enacted by the United States Congress, and its implementing regulations, including the Privacy Rule, the Breach Notification Rule, and the Security Rule, as amended from time to time, including by the Health Information Technology for Economic and Clinical Health (“HITECH”) Act and by the Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules under the Health Information Technology for Economic and Clinical Health Act and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules; Final Rule.
“Microsoft Online Services”, for this BAA only, means Office 365 Services, Microsoft Azure Core Services, Microsoft Dynamics 365 Core Services, Microsoft Intune Online Services, Microsoft Power Platform Core Services, and/or Microsoft Cloud App Security, each as defined in the “Data Protection Terms” section of the Online Services Terms incorporated into the Agreement; Microsoft Healthcare Bot; and any additional Azure online services and U.S.

Government online services listed as in scope for this BAA on the Microsoft Trust Center at https://www.microsoft.com/en-us/trustcenter/Compliance/HIPAA (or successor site); excluding Previews.
“Privacy Rule” means the Standards for Privacy of Individually Identifiable Health Information.

Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

“Protected Health Information” shall have the same meaning as the term “protected health information” in 45 CFR § 160.103 of HIPAA, provided that it is limited to such protected health information that is received by Microsoft from, or created, received, maintained, or transmitted by Microsoft on behalf of, Customer (a) through the use of the Microsoft Online Services or (b) for Microsoft’s performance of the FastTrack Services.
“Security Rule” means the Security Standards for the Protection of Electronic Protected Health Information.

2. Permitted Uses and Disclosures of Protected Health Information. a. Performance of the Agreement for Microsoft Online Services. Except as otherwise limited in this BAA, Microsoft may Use and Disclose Protected Health Information for, or on behalf of, Customer as specified in the Agreement; provided that any such Use or Disclosure would not violate HIPAA if done by Customer, unless expressly permitted under paragraph b of this Section. b. Management, Administration, and Legal Responsibilities. Except as otherwise limited in this BAA, Microsoft may Use and Disclose Protected Health Information for the proper management and administration of Microsoft and/or to carry out the legal responsibilities of Microsoft, provided that any Disclosure may occur only if: (1) Required by Law; or (2) Microsoft obtains written reasonable assurances from the person to whom the Protected Health Information is Disclosed that it will be held confidentially and Used or further Disclosed only as Required by Law or for the purpose for which it was Disclosed to the person, and the person notifies Microsoft of any instances of which it becomes aware in which the confidentiality of the Protected Health Information has been breached.

3. Responsibilities of the Parties with Respect to Protected Health Information.
a. Microsoft’s Responsibilities. To the extent Microsoft is acting as a Business Associate, Microsoft agrees to the following:
(i) Limitations on Use and Disclosure. Microsoft shall not Use and/or Disclose the Protected Health Information other than as permitted or required by the Agreement and/or this BAA or as otherwise Required by Law. Microsoft shall not disclose, capture, maintain, scan, index, transmit, share or Use Protected Health Information for any activity not authorized under the Agreement and/or this BAA. Neither Microsoft Online Services nor FastTrack Services shall use Protected Health Information for any advertising, Marketing or other commercial purpose of Microsoft or any third party. Microsoft shall not violate the HIPAA prohibition on the sale of Protected Health Information. Microsoft shall make reasonable efforts to Use, Disclose, and/or request the minimum necessary Protected Health Information to accomplish the intended purpose of such Use, Disclosure, or request.
(ii) Safeguards. Microsoft shall: (1) use reasonable and appropriate safeguards to prevent inappropriate Use and Disclosure of Protected Health Information other than as provided for in this BAA; and (2) comply with the applicable requirements of 45 CFR Part 164 Subpart C of the Security Rule.

Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

(iii) Reporting. Microsoft shall report to Customer: (1) any Use and/or Disclosure of Protected Health Information that is not permitted or required by this BAA of which Microsoft becomes aware; (2) any Security Incident of which it becomes aware, provided that notice is hereby deemed given for Unsuccessful Security Incidents and no further notice of such Unsuccessful Security Incidents shall be given; and/or (3) any Breach of Customer’s Unsecured Protected Health Information that Microsoft may discover (in accordance with 45 CFR § 164.410 of the Breach Notification Rule). Notification of a Breach will be made without unreasonable delay, but in no event more than five (5) business days after Microsoft’s determination of a Breach. Taking into account the level of risk reasonably likely to be presented by the Use, Disclosure, Security Incident, or Breach, the timing of other reporting will be made consistent with Microsoft’s and Customer’s legal obligations.

For purposes of this Section, “Unsuccessful Security Incidents” mean, without limitation, pings and other broadcast attacks on Microsoft’s firewall, port scans, unsuccessful log-on attempts, denial of service attacks, and any combination of the above, as long as no such incident results in unauthorized access, acquisition, Use, or Disclosure of Protected Health Information. Notification(s) under this Section, if any, will be delivered to contacts identified by Customer pursuant to Section 3b(ii) (Contact Information for Notices) of this BAA by any means Microsoft selects, including through e-mail. Microsoft’s obligation to report under this Section is not and will not be construed as an acknowledgement by Microsoft of any fault or liability with respect to any Use, Disclosure, Security Incident, or Breach.
(iv) Subcontractors. In accordance with 45 CFR §§ 164.502(e)(1)(ii) and 164.308(b)(2) of HIPAA, Microsoft shall require its Subcontractors who create, receive, maintain, or transmit Protected Health Information on behalf of Microsoft to agree in writing to: (1) the same or more stringent restrictions and conditions that apply to Microsoft with respect to such Protected Health Information; (2) appropriately safeguard the Protected Health Information; and (3) comply with the applicable requirements of 45 CFR Part 164 Subpart C of the Security Rule.

Microsoft remains responsible for its Subcontractors’ compliance with obligations in this BAA.
(v) Disclosure to the Secretary. Microsoft shall make available its internal practices, records, and books relating to the Use and/or Disclosure of Protected Health Information received from Customer to the Secretary of the Department of Health and Human Services for purposes of determining Customer’s compliance with HIPAA, subject to attorney-client and other applicable legal privileges. Microsoft shall respond to any such request from the Secretary in accordance with the Section titled “Disclosure of Customer Data” in the Agreement.
(vi) Access. If Microsoft maintains Protected Health Information in a Designated Record Set for Customer, then Microsoft, at the request of Customer, shall within fifteen (15) days make access to such Protected Health Information available to Customer in accordance with 45 CFR § 164.524 of the Privacy Rule. (vii) Amendment. If Microsoft maintains Protected Health Information in a Designated Record Set for Customer, then Microsoft, at the request of Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

Customer, shall within fifteen (15) days make available such Protected Health Information to Customer for amendment and incorporate any reasonably requested amendment
in the Protected Health Information in accordance with 45 CFR § 164.526 of the Privacy Rule.
(viii) Accounting of Disclosure. Microsoft, at the request of Customer, shall within fifteen (15) days make available to Customer such information relating to Disclosures made by Microsoft as required for Customer to make any requested accounting of Disclosures in accordance with 45 CFR § 164.528 of the Privacy Rule.
(viii)Performance of a Covered Entity’s Obligations. To the extent Microsoft is to carry out a Covered Entity obligation under the Privacy Rule, Microsoft shall comply with the requirements of the Privacy Rule that apply to Customer in the performance of such obligation.
b. Customer Responsibilities.
(i) No Impermissible Requests. Customer shall not request Microsoft to Use or Disclose Protected Health Information in any manner that would not be permissible under HIPAA if done by a Covered Entity (unless permitted by HIPAA for a Business Associate).
(ii) Contact Information for Notices. Customer hereby agrees that any reports, notification, or other notice by Microsoft pursuant to this BAA may be made electronically. Customer shall provide contact information as follows (or as Microsoft may specify from time to time): (1) the Azure Security Center for Microsoft Azure Core Services, (2) [email protected] for other Azure or U.S. Government online services in scope for this BAA, and (3) the Message Center in the Admin Center for other Microsoft Online Services.

Contact information (a) for Microsoft Azure Core Services must include the security contact information required on the Azure Security Center, (b) for other Azure or U.S. Government online services in scope for this BAA must include name of individual(s) to be contacted, title of individual(s) to be contacted, e-mail address of individual(s) to be contacted, name of Customer organization, and, if available, Customer’s contract number, subscriber identification number, and Microsoft Online Direct Routing Domain (MODRD) (e.g. “contoso.onmicrosoft.com”), and (c) for other Microsoft Online Services must include information required for the Message Center Privacy reader role in the Admin Center. Customer shall ensure that such contact information remains up to date during the term of this BAA. Failure to submit and maintain as current the aforementioned contact information may delay Microsoft’s ability to provide Breach notification under this BAA.
(iii) Safeguards and Appropriate Use of Protected Health Information.

Customer is responsible for implementing appropriate privacy and security safeguards to protect its Protected Health Information in compliance with HIPAA. Without limitation, it is Customer’s obligation to:
1) Not include Protected Health Information in: (1) information Customer submits to technical support personnel through a technical support request or to community support forums; and (2) Customer’s address book or Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

directory information. In addition, Microsoft does not act as, or have the obligations of, a Business Associate under HIPAA with respect to Customer Data or FastTrack Data once it is sent to or from Customer outside Microsoft Online Services or FastTrack Services over the public Internet, or if Customer fails to follow applicable instructions regarding physical media transported by a common carrier.
2) Implement privacy and security safeguards in the systems, applications, and software Customer controls, configures, and uploads into the Microsoft Online Services or uses in connection with the FastTrack Services.

4. Applicability of BAA.

This BAA is applicable to Microsoft Online Services and FastTrack Services. Microsoft may, from time to time, (a) include additional Microsoft online services on the Microsoft Trust Center and/or in the “Data Protection Terms” section of the Online Services Terms incorporated into the Agreement or additional FastTrack Services on the FastTrack Center BAA site, and (b) update the definition of Microsoft Online Services and FastTrack Services in this BAA accordingly, and such updated definitions will apply to Customer without additional action by Customer. It is Customer’s obligation to not store or process in an online service, or provide to Microsoft for performance of a professional service, protected health information (as that term is defined in 45 CFR § 160.103 of HIPAA) until this BAA is effective as to the applicable service.

5. Term and Termination.
a. Term. This BAA shall continue in effect until the earlier of (1) termination by a Party for breach as set forth in Section 5b, below, or (2) expiration of Customer’s Agreement.
b. Termination for Breach. Upon written notice, either Party immediately may terminate the Agreement and this BAA if the other Party is in material breach or default of any obligation in this BAA. Either party may provide the other a thirty (30) calendar day period to cure a material breach or default within such written notice.
c. Return, Destruction, or Retention of Protected Health Information Upon Termination. Upon expiration or termination of this BAA, Microsoft shall return or destroy all Protected Health Information in its possession, if it is feasible to do so, and as set forth in the applicable termination provisions of the Agreement. If it is not feasible to return or destroy any portions of the Protected Health Information upon termination of this BAA, then Microsoft shall extend the protections of this BAA, without limitation, to such Protected Health Information and limit any further Use or Disclosure of the Protected Health Information to those purposes that make the return or destruction infeasible for the duration of the retention of the Protected Health Information.

6. Miscellaneous.
a. Interpretation. The Parties intend that this BAA be interpreted consistently with their intent to comply with HIPAA and other applicable federal and state law. Except where this BAA conflicts with the Agreement, all other terms and conditions of the Attachment 1

STATE OF CALIFORNIA SHI INTERNATIONAL CORP.

DEPARTMENT OF TECHNOLOGY PO 25-0198737/ SC 25-0198737

Agreement remain unchanged. Any captions or headings in this BAA are for the convenience of the Parties and shall not affect the interpretation of this BAA. b. BAAs; Waiver. This BAA may not be modified or amended except in a writing duly signed by authorized representatives of the Parties. A waiver with respect to one event shall not be construed as continuing, as a bar to, or as a waiver of any right or remedy as to subsequent events.
c. No Third-Party Beneficiaries. Nothing express or implied in this BAA is intended to confer, nor shall anything in this BAA confer, upon any person other than the Parties, and the respective successors or assigns of the Parties, any rights, remedies, obligations, or liabilities whatsoever.
d. Severability. In the event that any provision of this BAA is found to be invalid or unenforceable, the remainder of this BAA shall not be affected thereby, but rather the remainder of this BAA shall be enforced to the greatest extent permitted by law. e. No Agency Relationship. It is not intended that an agency relationship (as defined under the Federal common law of agency) be established hereby expressly or by implication between Customer and Microsoft under HIPAA or the Privacy Rule, Security Rule, or Breach Notification Rule. No terms or conditions contained in this BAA shall be construed to make or render Microsoft an agent of Customer.

Attachment 1

Attachment 1

Service
Code
Customer ID Account
Code
Service Description Product Details Subscription
Count
Units Charges SR Number SKU Number Notes
K450 6UX 6UX MS Statewide M365 GCC E5 -5YR M365 G5 FSA Renewal GCC Sub Per User Term:
04/01/2026 - 03/31/2027
247 Subscription $126,407.40 CS0109476 AAL-48033
See SHI quote
K450 6UX 6UX MS Statewide M365 GCC E5 -5YR O365 G1 GCC Sub Per User Term: 04/01/2026 - 03/31/2027
41 Subscription $4,500.97 CS0109476 U4S-00002
See SHI quote
K450 6UX 6UX MS Statewide M365 GCC E5 -5YR Microsoft 365 GCC G5Term: 04/01/2026 - 03/31/2027 77 Subscription $43,423.92 CS0109476 AAL-45735 See SHI quote
$174,332.29
$6,101.63
$180,433.92
Service
Code
Customer ID Account
Code
Service Description Product Details Subscription
Count
Units Charges SR Number SKU Number Notes
K450 6UX 6UX MS Statewide M365 GCC E5 -5YR O365 G1 GCC Sub Per User Term: 06/05/2025 - 03/31/2026 (License Reservation)
5 Subscription $297.89 CS0107469 U4S-00002
See Crayon quote
K450 6UX 6UX MS Statewide M365 GCC E5 -5YR M365 G5 GCC Sub Per User Term: 06/23/2025 - 03/31/2026 (License Reservation)
5 Subscription $2,112.49 CS0107469 AAL-45735
See Crayon quote
K450 6UX 6UX MS Statewide M365 GCC E5 -5YR M365 G5 GCC Sub Per User Term: 10/09/2025 - 03/31/2026 (License Reservation)
5 Subscription $1,173.60 CS0107469 AAL-45735
See Crayon quote
K450 6UX 6UX MS Statewide M365 GCC E5 -5YR M365 G5 GCC Sub Per User Term: 11/04/2025 - 03/31/2026 (License Reservation)
5 Subscription $938.88 CS0107469 AAL-45735
See Crayon quote
K450 6UX 6UX MS Statewide M365 GCC E5 -5YR M365 G5 GCC Sub Per User Term: 12/15/2025 - 03/31/2026 (License Reservation)
5 Subscription $704.16 CS0107469 AAL-45735
See Crayon quote
$5,227.03
$182.95
$5,409.97
Total Invoice: $185,843.89
Total for true-up for the last year of the previous contract Total for Year 1 of new contract
Vendor Cost for Year 1 + CDT 2.79% Admin fee
CDT Cost Dist = (vendor cost + CDT admin fee) x cost dist 3.5% Vendor Cost for Year 1 + CDT 2.79% Admin fee
CDT Cost Dist = (vendor cost + CDT admin fee) x cost dist 3.5% Attachment 2

27125703
Budgetary
Feb-03-2026
Feb-28-2026
Phone: Phone:

Fax: Fax:

Email: Email:

All Prices are in US Dollar (USD) Years 1 located on sheet 2 Years 2-5 located on sheet 3
Additional Comments
(805) 227-7276 732-584-4484
[email protected] [email protected]
CA-City of Paso Robles Microsoft Inside Account Manager Kevin Tran Brian Smith
1000 Spring Street
Paso Robles, 93446
United States
290 Davidson Ave
Somerset, NJ, 08873
Pricing Proposal
Quotation #:

Reference #:

Created On:

Valid Until:

Attachment 2

Payment Schedule:

Year 1 (4/1/26 - 3/31/27): $169,600.44
Year 2 (4/1/27 - 3/31/28): $169,600.44
Year 3 (4/1/28 - 3/31/29): $174,849.60
Year 4 (4/1/29 - 3/31/30): $174,849.60
Year 5 (4/1/30 - 3/31/31): $174,849.60
Total: $863,749.68
*Budgetary Pricing does not include CDT Fees*
*Disclaimer: The pricing provided in this quote is based on estimated statewide license volumes. CDT will confirm the final statewide pricing tier once all customer commitments have been received.

This quote has been marked as budgetary, as certain pricing may require approval from Microsoft. Please note, SHI is unable to process Purchase Orders against budgetary quotes. Kindly reach out to your SHI sales team for a Final Quote once you have determined your required counts and licenses.

Thank you for choosing SHI International Corp! The pricing offered on this quote proposal is valid through the expiration date listed above. To ensure the best level of service, please provide End User Name, Phone Number, Email Address and applicable Contract Number when submitting a Purchase Order. For any additional information including Hardware, Software and Services Contracts, please contact an SHI Inside Sales Representative at (888) 744-4084. SHI International Corp. is 100% Minority Owned, Woman Owned Business. TAX ID# 22-3009648; DUNS# 61- 1429481; CCR# 61-243957G; CAGE 1HTF0
The products offered under this proposal are resold in accordance with the terms and conditions of the Contract referenced under that applicable line item.

Attachment 2

Item # Manufacturer Part # Product Contract Name Contract # Subcontract # Coverage Start Coverage End Quantity Your Price Total Note 1 Microsoft AAL-48033 M365 G5 FSA Renewal GCC Sub Per User Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2026 Mar-31-2027 247 $497.88 $122,976.36 Year 1 of 5 2 Microsoft U4S-00002 O365 G1 GCC Sub Per User Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2026 Mar-31-2027 41 $106.80 $4,378.80 Year 1 of 5 3 Microsoft AAL-45735 Microsoft 365 GCC G5 Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2026 Mar-31-2027 77 $548.64 $42,245.28 Year 1 of 5 Total $169,600.44
Attachment 2

Manufacturer Part # Product Contract Name Contract # Subcontract # Coverage Start Coverage End Quantity Your Price Total Note Microsoft AAL-48033 M365 G5 FSA Renewal GCC Sub Per User Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2027 Mar-31-2028 247 $497.88 $122,976.36 Year 2 of 5 Microsoft U4S-00002 O365 G1 GCC Sub Per User Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2027 Mar-31-2028 41 $106.80 $4,378.80 Year 2 of 5 Microsoft AAL-45735 Microsoft 365 GCC G5 Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2027 Mar-31-2028 77 $548.64 $42,245.28 Year 2 of 5 Microsoft AAL-48033 M365 G5 FSA Renewal GCC Sub Per User Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2028 Mar-31-2029 247 $514.68 $127,125.96 Year 3 of 5 Microsoft U4S-00002 O365 G1 GCC Sub Per User Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2028 Mar-31-2029 41 $106.80 $4,378.80 Year 3 of 5 Microsoft AAL-45735 Microsoft 365 GCC G5 Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2028 Mar-31-2029 77 $562.92 $43,344.84 Year 3 of 5 Microsoft AAL-48033 M365 G5 FSA Renewal GCC Sub Per User Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2029 Mar-31-2030 247 $514.68 $127,125.96 Year 4 of 5 Microsoft U4S-00002 O365 G1 GCC Sub Per User Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2029 Mar-31-2030 41 $106.80 $4,378.80 Year 4 of 5 Microsoft AAL-45735 Microsoft 365 GCC G5 Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2029 Mar-31-2030 77 $562.92 $43,344.84 Year 4 of 5 Microsoft AAL-48033 M365 G5 FSA Renewal GCC Sub Per User Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2030 Mar-31-2031 247 $514.68 $127,125.96 Year 5 of 5 Microsoft U4S-00002 O365 G1 GCC Sub Per User Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2030 Mar-31-2031 41 $106.80 $4,378.80 Year 5 of 5 Microsoft AAL-45735 Microsoft 365 GCC G5 Microsoft Statewide Enterprise Licensing Agreement
SC 25-0198737 Local Government Apr-01-2030 Mar-31-2031 77 $562.92 $43,344.84 Year 5 of 5 Attachment 2

Quote Date: 12.18.2025 Customer Quoted by:

City of Paso Robles, CDT on behalf of - 91281058 Crayon Software Experts LLC Attn: Kevin Tran 12221 Merit Drive, Suite 1400
[email protected] Dallas, TX 75251
Susan McDowell
[email protected]
**Budgetary Pricing does not include CDT Fees**
EA Enrollment 5822006 - License Reservations
Part Number Description Qty Annual Unit Price Extended Amount Pricing and Usage Year 5 - Reservation 25156895804896 (06/05/2025 - 03/31/2026) - 9 months U4S-00002 O365 G1 GCC Sub Per User 5 $ 57.96 $ 289.80
Pricing and Usage Year 5 - Reservation 25174224276138 (06/23/2025 - 03/31/2026) - 9 months AAL-45735 M365 G5 GCC Sub Per User 5 $ 411.03 $ 2,055.15 Pricing and Usage Year 5 - Reservation 25282483309631 (10/09/2025 - 03/31/2026) - 5 months AAL-45735 M365 G5 GCC Sub Per User 5 $ 228.35 $ 1,141.75 Pricing and Usage Year 5 - Reservation 25308675370842 (11/04/2025 - 03/31/2026) - 4 months AAL-45735 M365 G5 GCC Sub Per User 5 $ 182.68 $ 913.40
Pricing and Usage Year 5 - Reservation 25349330389936 (12/15/2025 - 03/31/2026) - 3 months AAL-45735 M365 G5 GCC Sub Per User 5 $ 137.01 $ 685.05
Total Year 5 $ 5,085.15
** Pricing Expires in 45 days from date of quote**
**All items included in this RFQ are new, unused, not refurbished, with original manufacturer warranty.** Remit to Address:

CDT will remit payment
# Crayon - Internal Only
Attachment 2

Council Agenda Report
From: Paul Sloan, Economic Development Manager
Subject: Approval of Lease Termination Agreements with G3 Enterprises, Inc., and Greater California Financial Services, Inc., and Lease Agreement with Zone 5 Technologies LLC for 4309 and 4301 Second Wind Way
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: May 19, 2026
Facts

1. On November 3, 2020, City Council approved Resolution 20-169, authorizing the purchase and sale agreement for 4301 Second Wind Way (SWW) leasehold and improvements in the amount of $6,110,000.

2. At that time, staff identified this campus, which includes 4301, 4305, 4309, 4317, and 4325 SWW, as a suitable site for City Hall Annex and Corporation Yard.

3. Greater California Financial Services, Inc., (GCFS) has leased 4301 SWW since the City took ownership; their lease agreement terminates on May 31, 2027 (see Attachment 2).

4. On July 20, 2021, City Council approved Resolution 21-094, approving the lease agreement with G3 Enterprises, Inc., (G3) for 4309 SWW; their agreement terminates July 31, 2026 (see Attachment 3).

5. GCFS and G3 have submitted proposals for early lease termination agreements with the City with a proposed lease termination date of May 31, 2026 (see Exhibits A and B of Attachment 1).

6. Zone 5 Technologies, LLC has submitted a proposal to lease both 4301 and 4309 SWW with a proposed lease agreement commencing June 01, 2026 (see Exhibit C of Attachment 1).

Options

1. Take no action;

2. Approve the Lease Termination Agreements with Greater California Financial Services and G3 Enterprises, and approve the Lease Agreement with Zone 5 Technologies;

3. Provide alternative direction to staff.

Analysis and Conclusions
The City of Paso Robles owns and manages the properties located at 4301 and 4309 Second Wind Way (SWW), both of which are currently under lease agreements with existing tenants. The lease with Greater California Financial Services, Inc. (GCFS) for 4301 SWW runs through May 31, 2027, while the lease with G3 Enterprises, Inc. (G3) for 4309 SWW runs through July 31, 2026. Both tenants have independently submitted proposals requesting early termination of their respective lease agreements, each proposing a revised termination date of May 31, 2026.

The requested early terminations would align both properties to become simultaneously available, creating an opportunity for coordinated re-lease of the buildings. Zone 5 Technologies LLC has submitted a proposal to lease both 4301 and 4309 SWW under a new agreement commencing June 1, 2026. This proposal presents a potential transition from two separate tenants to a single user occupying both facilities, which may offer operational efficiencies and a more cohesive use of the City-owned properties.

Zone 5 Technologies LLC is an aerospace engineering firm specializing in advanced unmanned aerial systems and defense-related technologies. The company’s proposed tenancy represents a targeted economic development opportunity, consistent with the City’s efforts to attract high-value industries, including aerospace and advanced manufacturing. Establishment of operations at these sites is anticipated to generate a significant number of high-quality, well-paying jobs, including engineering, technical, and support positions. This aligns with City Council goals to diversify the local economy and increase the availability of head-of-household wage employment opportunities, while further positioning Paso Robles within the broader regional aerospace and technology ecosystem.

From an economic development perspective, consolidating tenancy under a single entity may provide strategic advantages, including streamlined property management, potential for increased investment in the facilities, and alignment with the City’s broader goals of supporting business retention, expansion, and targeted industry growth.

Approval of the proposed early lease termination agreements with GCFS and G3, coupled with authorization to negotiate and execute a new lease agreement with Zone 5 Technologies LLC, would position the City to facilitate a seamless transition in tenancy at 4301 and 4309 Second Wind Way. This approach supports continued productive use of City-owned assets, minimizes potential revenue disruption, minimizes vacancy risk, and aligns with the City’s economic development goals of attracting and retaining businesses that contribute to job creation and long-term economic vitality.

Fiscal Impact
Both 4301 and 4309 Second Wind Way are currently under active lease agreements; however, both properties are presently vacant as the existing tenants—G3 and GCFS—have vacated the premises and have been unable to secure subtenants. As a result, while lease payments are being received in the near term, the City faces the likelihood of lost revenue once the agreements expire.

G3 currently pays $50,619 per month for 4309 SWW, with the lease scheduled to terminate on July 31, 2026. This represents approximately two remaining months of rental revenue, after which the property is anticipated to generate no income absent a new tenant. Similarly, GCFS currently pays $16,373 per month for 4301 SWW, with the lease terminating on May 31, 2027, representing approximately 12 remaining months of rental revenue before the property would likewise become vacant and non-revenue generating.

It is important to note that market lease rates have declined since the execution of the existing agreements. As such, securing replacement tenants at or above current lease rates is unlikely under prevailing market conditions. If the proposed lease agreements with Zone 5 Technologies LLC are approved, the City would secure a combined monthly rental payment of $51,349, consisting of $40,156 for 4309 SWW and $11,193 for 4301 SWW, consistent with current market rates. In addition to base rent, Zone 5 would also contribute to Common Area Maintenance (CAM) charges on a proportionate basis, consistent with other tenants on the Second Wind Way campus, providing additional cost recovery to the City for shared site maintenance and operations.

Under the proposed agreements with Zone 5, the office and warehouse portions of the premises would be leased as separate and independent components, each with its own lease term, rental obligations, and renewal provisions. The office premises would have an initial one-year term with up to four automatic one-year extensions, while the warehouse premises would have an initial two-year term with up to three automatic one-year extensions. In each case, renewals would occur automatically unless either party provides at least 60 days’ written notice of non-renewal prior to expiration of the then-current term. The agreements further provide that expiration or termination of one component would not affect the continuation of the other unless otherwise expressly stated.

While the proposed rental rates reflect a reduction compared to existing lease revenues, the agreements would provide immediate occupancy of both properties, eliminate the risk of prolonged vacancy, and ensure continuity of revenue beyond the current lease terms. In contrast, allowing the existing leases to run their course without replacement tenants would likely result in a near-term loss of revenue for 4309 SWW and a longer-term loss for 4301 SWW, with additional uncertainty regarding the timing and terms of future leases.

Overall, the proposed agreements represent a fiscally prudent approach that balances current market realities with the City’s objective to maintain occupancy, stabilize revenue streams, and avoid extended periods of vacancy in City-owned facilities.

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. In the alternative, the execution of the Lease Termination Proposals and the Lease Agreement are exempt from CEQA because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment (State CEQA Guidelines, section 15061, subd. (b)(3).) Recommendation (Option 2)
Approve Resolution 26-XXX, accepting the Lease Termination Proposals from Greater California Financial Services and G3 Enterprises, and accepting the Lease Agreement Proposal from Zone 5 Technologies, attached hereto as Exhibits A, B, and C, and authorizing the City Manager to execute leasing agreements, subject to any minor, technical, or non-substantive changes approved by the City Attorney and consistent with Council’s intent.

Attachments

1. Resolution 26-XXX – Lease Termination Agreements with G3 Enterprises, Inc., and Greater California Financial Services, Inc., and Lease Agreement with Zone 5 Technologies LLC for 4309 and 4301 Second Wind Way.
a. Exhibit A – Greater California Financial Services Lease Termination Proposal b. Exhibit B – G3 Enterprises Lease Termination Proposal c. Exhibit C – Zone 5 Technologies Lease Agreement Proposal

2. Greater California Financial Services Lease Agreement and Addenda – Executed

3. G3 Enterprises Lease Agreement – Executed

Attachment 1
RESOLUTION 26-XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL PASO DE ROBLES APPROVING THE LEASE TERMINATION AGREEMENTS WITH G3 ENTERPRISES, INC, AND GREATER CALIFORNIA FINANCIAL SERVICES, INC., AND THE LEASE AGREEMENT WITH ZONE 5 TECHNOLOGIES LLC FOR 4301 AND 4309 SECOND WIND WAY.

WHEREAS, on November 3, 2020, City Council approved Resolution 20-169, authorizing the purchase and sale agreement for 4301 Second Wind Way leasehold and improvements in the amount of $6,110,000; and
WHEREAS, at that time, staff identified 4301 SWW (which also includes 4305, 4309, 4317 and 4325 SWW) as a suitable site for City Hall Annex and the Corporation Yard; and WHEREAS, Greater California Financial Services, Inc. has leased 4301 SWW since the City took ownership with their lease term expiring on May 31, 2027;
WHEREAS, on July 20, 2021, City Council approved Resolution 21-094, approved the lease agreement with G3 Enterprises, Inc., (G3) for 4309 SWW, with their term ending on July 31, 2026; and WHEREAS, both GCFS and G3 have submitted proposals for early lease termination agreements with the City with a proposed lease termination date of May 31, 2026; and WHEREAS, Zone 5 Technologies LLC has submitted a proposal to lease both 4301 and 4309 SWW with a proposed lease agreement commencing June 01, 2026.

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 Lease Termination Proposals from Greater California Financial Services and G3 Enterprises, and the Lease Agreement Proposal from Zone 5 Technologies, for the properties located at 4301 and 4309 Second Wind Way in substantially the form attached hereto as Exhibits A, B, and C, authorizes the City Manager to execute the terminations and leasing agreements, subject to any minor, technical, or non-substantive changes to the lease proposals, approved by the City Attorney, and consistent with Council’s intent.

Section 3. The City finds that the execution of the Lease Termination Proposals from Greater California Financial Services and G3 Enterprises, and the Lease Agreement Proposal from Zone 5 Technologies, for the properties located at 4301 and 4309 Second Wind Way are not a project subject to CEQA. In the alternative, the execution of the Lease Termination Proposals and the Lease Agreement are exempt from CEQA because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment (State CEQA Guidelines, section 15061, subd. (b)(3).)

Attachment 1
APPROVED this 19th day of May 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

John Hamon, Mayor
ATTEST:

Melissa Martin, City Clerk
Exhibit A – Greater California Financial Services Lease Termination Proposal Exhibit B – G3 Enterprises Lease Termination Proposal
Exhibit C – Zone 5 Technologies Lease Agreement Proposal

- 1 -

TERMINATION OF LEASE AGREEMENT
THIS TERMINATION OF LEASE AGREEMENT (this “Termination Agreement”) is made and entered into as of this ____ day of May 2026 (“Effective Date”), by and between the CITY OF EL PASO DE ROBLES, a municipal corporation (“Lessor” or “City”), and GCFS, INC. (“Lessee”). As used throughout this Termination Agreement, “Party” and “Parties” shall refer to Lessor and City and/or Lessee.

RECITALS
A. City owns and operates the Paso Robles Municipal Airport (“Airport”).

B. Lessor and Lessee entered into a Standard Industrial/Commercial Multi-Tenant Lease – Net, as amended on February 15, 2019 and on February 2, 2024 (as amended, the “Lease”), dated June 16, 2017, wherein Lessee leased from the City, an approximately 6,396 square foot of office space in a building located on the Airport at 4301 Second Wind Way, Paso Robles, California (the “Premises”) for business office purposes.

C. The Lease is set to expire on May 31, 2027.

D. Lessor and Lessee have mutually agreed to terminate the Lease. The purpose of this Termination Agreement to provide for the early termination of the Lease.

NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE

RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS:

AGREEMENT

1. Incorporation of Recitals. The recitals above are true and correct and are hereby incorporated herein by this reference.

2. Early Termination Date. Effective as of 11:59 p.m. on May 31, 2026, (“Early Termination Date”), the Lease shall be deemed to be terminated and the Term of the Lease shall expire with the same force and effect as if the Term was, by the provisions of the Lease, fixed to expire on the Early Termination Date. Except as explicitly stated in the Lease, no provisions, terms or conditions of the Lease shall survive this termination, and neither Lessor nor Lessee has any obligations to or rights against the other thereunder.

3. Surrender of Premises. Lessee on or before the Early Termination Date shall vacate and surrender possession of the Premises to Lessor and all of Lessee’s rights in and to the Premises.

Pursuant to Section 7.4(c) of Lease, Lessee shall surrender the Premises to Lessor, return all keys to Lessor, and return all elements of the Premises “broom clean” and in the same condition as existed at the commencement of the Lease, ordinary wear and tear, casualty, and acts of God excepted. In the event Lessee fails to so vacate and deliver the Premises in such condition on or before the Early Termination Date, Lessee shall be subject to provisions of Section 26 of the Lease.

Exhibit A

- 2 -

4. Payment of Rent. On or before May 31, 2026, Lessee shall pay to Lessor the sum of Sixteen Thousand Three Hundred Seventy-Three Dollars ($16,373.00), representing all rent due and owing under the Lease through the Termination Date..

5. Security Deposit. Pursuant to Section 1.7(c) of the Lease, Lessee was not required to and did not post a Security Deposit. Accordingly, no Security Deposit is being held by Lessor, and Lessor has no obligation to return any Security Deposit to Lessee. Lessee acknowledges and agrees that it has no claim against Lessor for any Security Deposit or interest thereon.

6. Release of Liability. Except for the parties’ respective obligations set forth in this Agreement, and conditioned on the performance by the parties of the provisions of this Agreement:
a. Release. Conditioned on the full performance of the parties’ obligations under this Agreement, and effective as of the Early Termination Date, Lessor and Lessee each hereby release and discharge the other from any and all claims, demands, liabilities, and obligations arising out of or relating to the Lease, whether known or unknown, except for:
b. No Release of Pre-Termination Obligations. Notwithstanding the foregoing, nothing in this Section shall release or limit either party’s liability for any breach, obligation, or claim arising prior to the Early Termination Date that is not otherwise resolved by this Agreement.
c. Full Settlement. This Agreement constitutes a full and final settlement of all matters between the parties arising out of the Lease, except as expressly provided herein. d. Termination of Guaranty. Effective as of the Early Termination Date, that certain Guaranty of Lease dated February 2, 2024 executed by Absolute Resolutions Corporation in favor of City (the “Guaranty”) is hereby terminated, and City hereby releases Guarantor from any and all obligations under the Guaranty, except for obligations, if any, expressly stated in this Termination Agreement to survive the Early Termination Date.

7. Authority to Execute Termination Agreement. Lessor and Lessee warrant that the individuals who have signed this Termination Agreement have the legal power, right and authority to enter into this Termination Agreement so as to bind each party for whom they sign.

8. Attorneys’ Fees. In the event of any action at law or in equity between the parties to enforce any provision of this Termination Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees to be fixed by the court, together with costs of suit therein incurred.

9. Severability. The invalidity of any provision of this Termination Agreement shall not affect the validity or enforceability of any other provision of this Termination Agreement.

10. Entire Agreement. This Termination Agreement contains the entire agreement between the Parties hereto pertaining to the subject matter hereof and fully supersedes all prior written or oral agreements and understandings between the parties pertaining to such subject matter.

Exhibit A

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11. Construction. The parties acknowledge that they have reviewed and revised this Termination Agreement and have had the opportunity to have the same reviewed by their legal counsel. The Parties agree that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Termination Agreement.

12. Governing Law. This Termination Agreement and the rights and obligations of the parties hereunder shall be construed, enforced, and interpreted according to the laws of the State of California applicable to contracts made in and performed in the State of California. Venue shall be in the County of San Luis Obispo.

13. Further Assurances. City and Lessee agree to perform, execute and deliver or cause to be performed, executed and delivered any and all such further acts, deeds and assurances as may be reasonably necessary to consummate the actions contemplated in this Termination Agreement.

14. Counterparts. This Termination Agreement may be executed in a number of identical counterparts (including, without limitation, facsimile counterparts or “.pdf” counterparts delivered by e-mail) which, taken together, shall collectively constitute one and the same agreement.
[SIGNATURES ON FOLLOWING PAGE]
Exhibit A

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SIGNATURE PAGE TO TERMINATION OF LEASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have caused this Termination Agreement to be duly executed on the date first stated above.

LESSOR

CITY OF EL PASO DE ROBLES
By: ______________________________
Chris Huot, City Manager
LESSEE
GCFS, INC.

By: ______________________________
Chad Lemke, Chief Operations Officer
ATTEST: ______________________________ Melissa Martin, City Clerk APPROVED AS TO FORM: ______________________________ Elizabeth Hull, City Attorney

- 1 -

TERMINATION OF LEASE AGREEMENT
THIS TERMINATION OF LEASE AGREEMENT Termination Agreement made and entered into as of this 7th day of May 2026 Effective Date the CITY OF EL PASO DE ROBLES, a municipal corporation Lessor City ), and G3 ENTERPRISES, INC. Lessee Party
Parties Lessor and City and/or Lessee.

RECITALS
A. City owns and operates the Paso Ro
B. Lessor and Lessee entered into a Standard Industrial/Commercial Single-Tenant Lease Net Lease August 24, 2021, wherein Lessee leased from the City, an approximately 40,156 square foot single-tenant freestanding industrial building located on the Airport at 4309 Second Wind Way, Paso Robles, California Premises for the purposes of warehousing and distribution of alcoholic beverages and related products and general office purposes. C. The Lease is set to expire on July 31, 2026.

D. Lessor and Lessee have mutually agreed to terminate the Lease. The purpose of this Termination Agreement to provide for the early termination of the Lease.

NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE

RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS:

AGREEMENT

1. Incorporation of Recitals. The recitals above are true and correct and are hereby incorporated herein by this reference.

2. Early Termination Date. Effective as of 11:59 p.m. on May 31, 2026, Early Termination Date , the Lease shall be deemed to be terminated and the Term of the Lease shall expire with the same force and effect as if the Term was, by the provisions of the Lease, fixed to expire on the Early Termination Date. Except as explicitly stated in the Lease, no provisions, terms or conditions of the Lease shall survive this termination, and neither Lessor nor Lessee has any obligations to or rights against the other thereunder.

3. Surrender of Premises. Lessee on or before the Early Termination Date shall vacate and surrender possession of the Premises to Lessor . Pursuant to Section 7.4(c) of Lease, Lessee shall surrender the Premises to Lessor, return all keys to Lessor, and return all elements of the Premises and in the same condition as existed at the commencement of the Lease, ordinary wear and tear, casualty, and acts of God excepted. In the event Lessee fails to so vacate and deliver the Premises in such condition on or before the Early Termination Date, Lessee shall be subject to provisions of Section 26 of the Lease.

Exhibit B

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4. Payment of Rent. As of the Effective Date, Lessee represents and warrants that all Rent due and payable to Lessor through the Early Termination Date has been paid in full, and Lessor acknowledges the receipt thereof. Accordingly, Lessee shall have no further Rent obligations under the Lease.

5. Security Deposit. Lessee has previously posted a Security Deposit in the amount of $50,619.44 pursuant to Section 5 of the Lease. Lessor shall apply or return the Security Deposit in accordance with the terms and conditions of the Lease.

6. Release of Liability. Except for the P
Termination Agreement, and conditioned on the performance by the Parties of the provisions of this Termination Agreement:
a. Release. Conditioned on the full performance of the P under this Termination Agreement, and effective as of the Early Termination Date, Lessor and Lessee each hereby release and discharge the other and all of their respective affiliates and agents, successors and assigns, from any and all claims, demands, liabilities, and obligations arising out of or relating to the Lease, whether known or unknown, except for (i) the P Termination Agreement, (ii) obligations that
expressly survive the termination or expiration of the Lease, and (iii) environmental liabilities or damage to the Premises solely to the extent caused by the acts or omissions of Lessee, its employees or agents during the Term, and not attributable to conditions existing prior to the Commencement Date, provided that, with respect to latent or undiscovered conditions, Lessee shall only be responsible to the extent such conditions were caused by Lessee, its employees or agents during the Term. The Parties waive the provisions of California Civil Code, Section 1542, and any statute, rule, or principle of common law or equity, of any jurisdiction that is similar to Section 1542, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO

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

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

MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE

DEBTOR OR RELEASED PARTY
b. Full Settlement. This Termination Agreement constitutes a full and final settlement of all matters between the Parties arising out of the Lease, except as expressly provided herein.

7. Authority to Execute Termination Agreement. Lessor and Lessee warrant that the individuals who have signed this Termination Agreement have the legal power, right and authority to enter into this Termination Agreement so as to bind each Party for whom they sign.

8. . In the event of any action at law or in equity between the Parties to enforce any provision of this Termination Agreement, the prevailing Party shall be entitled to incurred.

Exhibit B

- 3 -

9. Severability. The invalidity of any provision of this Termination Agreement shall not affect the validity or enforceability of any other provision of this Termination Agreement.

10. Entire Agreement. This Termination Agreement contains the entire agreement between the Parties hereto pertaining to the subject matter hereof and fully supersedes all prior written or oral agreements and understandings between the Parties pertaining to such subject matter.

11. Construction. The Parties acknowledge that they have reviewed and revised this Termination Agreement and have had the opportunity to have the same reviewed by their legal counsel. The Parties agree that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Termination Agreement.

12. Governing Law. This Termination Agreement and the rights and obligations of the Parties hereunder shall be construed, enforced, and interpreted according to the laws of the State of California applicable to contracts made in and performed in the State of California. Venue shall be in the County of San Luis Obispo.

13. Further Assurances. City and Lessee agree to perform, execute and deliver or cause to be performed, executed and delivered any and all such further acts, deeds and assurances as may be reasonably necessary to consummate the actions contemplated in this Termination Agreement.

14. Counterparts. This Termination Agreement may be executed in a number of identical counterparts (including, without
delivered by e-mail) which, taken together, shall collectively constitute one and the same agreement.
[SIGNATURES ON FOLLOWING PAGE]
Exhibit B

- 4 -

SIGNATURE PAGE TO TERMINATION OF LEASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have caused this Termination Agreement to be duly executed on the date first stated above.

LESSOR

CITY OF EL PASO DE ROBLES
By: ______________________________
Chris Huot, City Manager
LESSEE
G3 ENTERPRISES, INC.

By: ______________________________
Michael Ash, VP-Real Estate
ATTEST: ______________________________ Melissa Martin, City Clerk APPROVED AS TO FORM: ______________________________ Elizabeth Hull, City Attorney Exhibit B

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CITY OF PASO DE ROBLES

RENTAL AGREEMENT FOR AIRPORT PROPERTY
This RENTAL AGREEMENT (“Agreement”) is made and entered into on this ___ day of May 2026 by and between the CITY OF EL PASO DE ROBLES, a California municipal corporation (“City or Landlord”), and ZONE 5 TECHNOLOGIES LLC, a California limited liability company (“Tenant”). City and Tenant may be referred to in this agreement individually as “Party” or collectively as “Parties.”

RECITALS
A. City is the owner of certain real property located at 4309 Second Wind Way (APN #025-471-023) consisting of approximately 40,156 square feet of warehouse space and commercial office space (the “Warehouse Premises”), and 4301 Second Wind Way (APN #025-471-023) consisting of approximately 6,396 square feet of commercial office space (the “Office Premises”), in the City of El Paso de Robles, County of San Luis Obispo, State of California (collectively “the Property”), more particularly described in Exhibit “A”, attached hereto and incorporated herein by reference.

B. The Property is part of the municipal Airport owned and operated by the City and known as the Paso Robles Municipal Airport (the “Airport”).

C. Upon the terms and conditions set forth herein, City hereby leases to Tenant, and Tenant hereby leases from City, the existing buildings and improvements of the Warehouse Premises and Office Premises (collectively the “Premises”) located on the Property, for use as office and business operations, manufacturing, assembly, and storage. The Premises do not include any underlying land except as necessary for access and use as expressly provided in this Agreement.

AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, City and Tenant agree as follows:

1. Term. The term of this agreement shall commence on June 1, 2026 (“Commencement Date”).

1.1 Office Premises and Warehouse Premises Terms. The Office Premises and the Warehouse Premises are leased under this Agreement as separate and independent components of the Premises, each with its own term, rent, and obligations as expressly set forth herein. Except as otherwise expressly provided, the expiration or termination of one component shall not affect the validity or continuation of the other.

A. Office Premises Term. The Office Premises portion of the Premises shall have an initial term of one (1) year commencing on the Commencement Date. The Office Premises term shall automatically renew for up to four (4) additional one (1)-year periods (each, an “Office Extension Exhibit C

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Term”) on the same terms and conditions set forth in this Agreement, including, without limitation, the annual rent increase provided in Sections

2.2 and 2.4 unless either Party provides written notice of its election not to renew at least sixty (60) days prior to the expiration of the then-current term.

B. Warehouse Premises Term. The Warehouse Premises
portion of the Premises shall have an initial term of two (2) years commencing on the Commencement Date. The Warehouse Premises term shall automatically renew for up to three (3) additional one (1)-year periods (each, a “Warehouse Extension Term”) on the same terms and conditions set forth in this Agreement, including, without limitation, the annual rent increase provided in Sections 2.2 and 2.4 unless either Party provides written notice of its election not to renew at least sixty (60) days prior to the expiration of the then-current term.

C. Independent Terms. The expiration or termination of the Office Premises shall not affect the term of the Warehouse Premises, and vice versa.

1.2 Notwithstanding the foregoing, either Party may terminate this Agreement as more particularly described in Sections 18, 19 and 20 of this Agreement at any time by giving written notice of such termination to the other party not less than ninety (90) days prior to the date of such termination stated in said notice. Upon termination of either the Office Premises or the Warehouse Premises, Tenant shall surrender only the applicable portion of the Premises in accordance with this Agreement. Upon or prior to the date of termination of this Agreement, Tenant shall vacate the Premises and return the Premises to its original appearance and condition, as more fully described in Section 9 hereof. Upon failure by Tenant to vacate the Premises by the termination date, Landlord may remove all of Tenant’s personal property and effects other than any Tenant aircraft, and Tenant shall, within ten (10) days of receipt of notice from Landlord, reimburse to Landlord any costs and expenses incurred by Landlord for such removal of Tenant’s personal property and effects, plus an administrative charge in the amount of ten percent (10%) of the cost thereof.

2. Payments.

2.1 Base Rental Payment. Tenant shall pay to City, as rent, the following monthly amounts (collectively the “Base Rental Payment”):
(a) Office Premises Rent. For the Office Premises, an amount equal to $1.75 per square foot per month, based on 6,396 square feet, for a monthly rent of $11,193.00. (b) Warehouse Premises Rent. For the Warehouse Premises, an amount equal to $1.00 per square foot per month, based on 40,156 square feet, for a monthly rent of $40,156.00.

The first rental payment shall be due on June 1, 2026. Subsequent rental payments shall be due and payable on the first day of each calendar month thereafter.

Exhibit C

- 3 -

2.2 Annual Increase in Base Rental Payment. Commencing on the first anniversary of the date Tenant is obligated to pay rent under this Agreement, and continuing on each subsequent anniversary during the term of this Agreement, the Base Rental Payments for each of the Office Premises and the Warehouse Premises shall be increased by three (3) percent (3%).

2.3 Security Deposit. No later than the Commencement Date, Tenant shall deposit with City the sum of $49,500 (the “Security Deposit”), payable by a cashier’s check or certified check to secure Tenant’s faithful performance of all terms, covenants and conditions of this Agreement.

2.4 Base Rental Payment for Extended Term. The Base Rental Payment for each of the Office Premises and the Warehouse Premises for the first year of the Extended Term shall be equal to a three percent (3%) increase over the amount of the Base Rental Payment in the preceding year. Each year thereafter throughout the Extended Term, the Base Rental Payment for each of the Office Premises and the Warehouse Premises shall increase by three (3) percent (3%) over the Base Rental Payment amount in the preceding year.

2.5. Net Lease; Operating Expenses; Common Area Maintenance. In addition to the rent required by Section 2.1, Tenant shall pay all operating expenses, costs, and charges relating to the ownership, operation, and maintenance of the Premises and the Common Areas (collectively, “Operating Expenses”), all of which shall constitute additional rent. Upon Tenant’s failure to pay any such amounts, Landlord shall have the same rights and remedies as provided in this Agreement for failure to pay rent.

2.5.1. Allocation of Operating Expenses. To the extent Operating Expenses are attributable solely to the Premises, Tenant shall pay one hundred percent (100%) of such costs. To the extent Operating Expenses are attributable to the Property generally, including the Common Areas, Tenant shall pay Tenant’s Proportionate Share (as defined below).

2.5.2. Common Area Maintenance. Common Area Maintenance charges (“CAM Charges”) are included within Operating Expenses and consist of costs and expenses incurred by Landlord in operating, maintaining, repairing, and replacing the Common Areas of the Property.

2.5.3. Tenant’s Proportionate Share. Tenant’s “Proportionate Share” shall be eighty-eight percent (88%), based on Tenant’s occupancy of 46,552 rentable square feet out of a total of 52,991 rentable square feet on the Property (4301 Second Wind Way – 6,396 square feet; 4309 Second Wind Way – 40,156 square feet). Tenant’s Proportionate Share shall be adjusted to reflect the rentable square footage of the Premises remaining subject to this Agreement following the expiration or termination of the Office Premises or the Warehouse Premises.

2.5.4. Included Costs. Operating Expenses (including CAM Charges) may include, without limitation: (i) maintenance and repair of parking areas, driveways, Exhibit C

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sidewalks, landscaping, and common facilities; (ii) lighting, utilities (including without limitation, water and sewer charges), and irrigation serving the Property and/or Common Areas; (iii) janitorial services and trash removal for Common Areas; (iv) property management fees; (v) maintenance and repair of building systems including without limitation HVAC systems serving the Premises to the extent provided in Section 8.2 of this Agreement; and (vi) such other costs customarily included as operating expenses for similar properties.

2.5.5. Exclusions. Notwithstanding the foregoing, Operating Expenses (including CAM Charges) shall not include: (i) capital improvements, except those that reduce operating costs, which may be amortized over their useful life and HVAC replacement costs to the extent permitted under Section 8.2; (ii) costs attributable solely to other tenants’ exclusive use; (iii) leasing commissions, tenant improvement costs, and marketing expenses; or (iv) Landlord’s general overhead not directly related to the Property.

2.5.6. Allocation and Notice of Increases. Controllable Expenses (defined as Operating Expenses other than real property taxes, assessments, insurance premiums, utilities, and costs arising from compliance with laws or governmental requirements) shall be allocated in accordance with Tenant’s Proportionate Share as set forth in Section 2.5.1. Landlord shall use commercially reasonable efforts to notify Tenant if the aggregate amount of Controllable Expenses for any calendar year is reasonably expected to increase by more than five percent (5%) over the actual Controllable Expenses for the immediately preceding calendar year. Failure to provide such notice shall not limit Tenant’s obligation to pay Operating Expenses as otherwise provided in this Agreement.

2.5.7. Payment and Reconciliation. Landlord shall provide Tenant with an annual estimate of Operating Expenses (including CAM Charges), payable in monthly installments as additional rent. Following each calendar year, Landlord shall furnish a statement of the actual Operating Expenses incurred for such year.

If the actual Operating Expenses exceed the estimated amounts paid by Tenant, Tenant shall pay the deficiency within thirty (30) days after receipt of such statement. If the estimated amounts paid by Tenant exceed the actual Operating Expenses, Landlord shall credit such excess against the next installments of Operating Expenses due from Tenant. The estimate and reconciliation of Operating Expenses are intended to reflect actual costs incurred and shall not be limited by any prior estimate or notice provided under Section 2.5.6.

2.5.8. Initial Estimate. For the period of June 2026 through December 2026, Tenant’s estimated monthly CAM Charge shall be $2,450.

2.5.9. Absolute Net. It is the intention of the parties that this Agreement shall be a net lease, and that Tenant shall pay all Operating Expenses as provided herein without abatement, offset, or deduction, except as expressly set forth in this Agreement. Any present or future law to the contrary shall not alter this Agreement.

Exhibit C

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2.5.10. Possessory Interest Taxes. Tenant acknowledges that this Agreement may create a possessory interest in the Premises that is subject to ad valorem property taxation under applicable law, including, without limitation, California Revenue and Taxation Code Section 107.6. Tenant hereby acknowledges that Landlord has provided notice that Tenant’s leasehold interest in the Premises may be separately assessed and taxed by the applicable county taxing authority. Tenant shall be solely responsible for, and shall pay prior to delinquency, any and all taxes, assessments, and charges levied upon or attributable to Tenant’s possessory interest in the Premises, including any such taxes arising from this Agreement, any extension or renewal hereof, or any improvements, fixtures, or equipment installed by or on behalf of Tenant (collectively, “Possessory Interest Taxes”). Any documentary transfer taxes or similar taxes arising from the creation of Tenant’s leasehold interest shall also be paid by Tenant. Landlord makes no representation or warranty regarding the existence, applicability, or amount of any Possessory Interest Taxes. Tenant is advised to consult with the applicable county assessor regarding the assessment and amount of such taxes. If any Possessory Interest Taxes are assessed against Landlord or the Property as a result of Tenant’s leasehold interest, Tenant shall reimburse Landlord for the full amount thereof within ten (10) days after written demand, and such amounts shall constitute additional rent. Failure of Tenant to pay Possessory Interest Taxes when due shall constitute a material default under this Agreement. Tenant shall not be entitled to offset or deduct any Possessory Interest Taxes from rent. Upon reasonable request, Tenant shall provide Landlord with evidence of payment of Possessory Interest Taxes. Tenant shall indemnify, defend, and hold harmless Landlord and its officers, agents, and employees from and against any claims, liabilities, penalties, or costs arising from Tenant’s failure to pay Possessory Interest Taxes. Tenant shall reasonably cooperate with Landlord and the applicable taxing authorities in providing information necessary to assess such taxes.

3. Use. City hereby rents to Tenant, and Tenant rents from City, the Premises for the purpose operating the Tenant’s office and business operations, manufacturing assembly and storage operations at the Airport and for no other purposes without the prior written consent of City. In addition, any conduct of business on the Premises shall be subject to the current Airport Rules & Regulations, Minimum Standards for Aeronautical Activities and adopted City Ordinances applicable to the conduct of said business within the City. The Tenant agrees it will not use or permit the Premises to be used for permanent living quarters.

3.1. Operations. Tenant may operate and use the Premises twenty-four (24) hours per day, seven (7) days per week, three hundred sixty-five (365) days per year throughout the Term. Tenant’s operations may be conducted in multiple shifts within any twenty-four (24) hour period, as determined by Tenant in its sole discretion. Tenant’s use of the Premises shall at all times comply with all applicable laws, regulations, and applicable airport or governmental requirements.

Exhibit C

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4. Vehicle Parking. Customers, employees, guests and invitees of Tenant may park in the parking spaces on the Property subject to the following:

4.1. Initial Parking Rights. City grants to Tenant and its customers, employees, guests, and invitees the non-exclusive right to use up to seventy-five (75) parking spaces within the parking areas serving the Property (the “Parking Areas”) on a reciprocal, shared basis with other permitted users of the Premises.

At no time shall Tenant’s use exceed seventy-five (75) parking spaces in the aggregate.

4.2 Additional Parking. City shall use commercially reasonable efforts to make available to Tenant, on or before July 31, 2026, additional parking spaces within the vicinity of the Premises so that Tenant may have access to up to one hundred twenty-five (125) parking spaces in the aggregate for use by Tenant and its customers, employees, guests, and invitees. Notwithstanding the foregoing, City does not guarantee the availability of such additional parking spaces, and Tenant’s permitted use shall increase above the initial allocation only to the extent such additional parking is actually made available by City.

4.3 Nature of Use. All parking rights granted herein are non-exclusive and subject to reasonable rules and regulations established by City from time to time. Tenant shall not reserve or designate specific spaces without City’s prior written consent.

4.4 Vehicle Restrictions. The Parking Areas shall be used solely for the parking of operable vehicles no larger than full-size passenger automobiles, pickup trucks, or sport utility vehicles, and not for storage, repair, or overnight parking (unless otherwise approved by City in writing).

5. Maintenance. Tenant shall, at Tenant’s sole cost and expense, maintain the Premises in a neat and clean condition, and shall be responsible for daily and continuous custodial care of the Premises. Landlord shall be responsible for performing maintenance of the exterior of the Premises (including roof, paint, walls, and foundation), the mainline utilities that serve the Premises, and the common areas of the Property; provided, however, that the costs of such maintenance may constitute Operating Expenses chargeable to the Tenant to the extent provided in Section 2.5. Said maintenance shall include routine weed abatement, removal of foreign objects and debris associated with access to and retrieval of equipment, and general cleanliness of the Premises. If Tenant fails to maintain the Premises in good order and repair, after thirty (30) days' prior written notice, Landlord may, at its option, make such repairs, and Tenant shall pay the reasonable cost thereof as additional rent hereunder within ten (10) days after receipt of a written statement therefor. In the event the giving of thirty (30) days' prior notice may result in additional damage to the Premises, Landlord may make such repairs, at Tenant's expense, without thirty days' prior written notice.

Exhibit C

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6. Improvements, Alterations. Tenant shall not cause or make any physical changes, site improvements or alterations to the Premises without the prior written consent of Landlord.

7. Access. This Agreement does not grant to Tenant any right, authority or access to any part of the airport, including but not limited to aircraft operating areas, for Tenant, its employees, customers or the general public, except the Premises and appropriate access thereto through designated routes to the premises. Notwithstanding the foregoing, Tenant shall have non-exclusive rights, in common with others, to use such portions of the Property as are reasonably necessary for access to and use of the Premises, including driveways, parking areas, and utility connections, subject to Landlord’s rules and regulations.

8. As-Is Condition. Except as expressly set forth in Section 8.1, Tenant acknowledges and agrees that Tenant has had the opportunity to inspect the Premises and accepts the Premises in their existing “as-is, where-is” condition with all faults.

Landlord hereby disclaims, and Tenant accepts the disclaimer of, any warranty, either express or implied, of the condition of the Premises. Tenant assumes full responsibility for the condition of the Premises and agrees to maintain and operate the Premises in a clean and efficient manner, acceptable to Landlord, subject to Landlord’s inspection rights under this Agreement. Landlord makes no representations regarding the condition, status, compliance with laws or suitability for a particular purpose for Tenant's use.

8.1 Building Systems; HVAC Warranty. Landlord represents and warrants that, as of the Commencement Date, the mechanical, electrical, and plumbing systems serving the Premises are in good working order and condition.

Landlord shall, at its sole cost, repair or replace the HVAC system as necessary to maintain it in good working order for a period of six (6) months following the Commencement Date (the “HVAC Warranty Period”), ordinary wear and tear excepted.

8.2 HVAC Maintenance, Repair, and Replacement. Following the HVAC Warranty Period, Landlord shall be solely responsible for the maintenance and repairs to the HVAC system serving the Premises; provided however, that the costs of such maintenance and repairs shall constitute Operating Expenses to the extent permitted under Section 2.5 of this Agreement. In the event the HVAC system requires replacement, Tenant shall be responsible for the cost of such replacement; provided, however, that if such replacement constitutes a capital expenditure that is not required as a result of Tenant’s specific manner of use of the Premises, or Tenant’s particular improvements, fixtures, or equipment therein, then Landlord shall initially pay the cost of such replacement and Tenant shall reimburse Landlord, as additional rent therefor, in equal monthly installments commencing upon completion of such replacement and continuing thereafter during the remainder of the Term and any exercised extension thereof, in an amount equal to one hundred forty-fourth (1/144th) per month of the portion of such costs reasonably attributable to the Premises. Notwithstanding the foregoing, Tenant shall be solely responsible for the full cost of any HVAC maintenance, Exhibit C

- 8 -
repair, or replacement required as a result of Tenant’s particular use of the Premises or the installation or operation of Tenant’s equipment, fixtures, or improvements.

9. Surrender of Premises. Upon termination of occupancy of the Premises or expiration of this Agreement, Tenant agrees to surrender the Premises to Landlord in accordance with Section 17 of this Agreement.

10. Utilities. Except as otherwise expressly provided in this Agreement, Landlord shall not be obligated to furnish or pay for any utility services to the Premises, and Tenant shall be solely responsible for arranging and paying all utility charges attributable to Tenant’s use and occupancy of the Premises. Notwithstanding the foregoing, the cost of utilities serving the Common Areas or otherwise included in Operating Expenses may be allocated to Tenant in accordance with Section 2.5.

11. Insurance and Indemnity.

11.1 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 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 Premises or any fire or other casualty thereon, or occasioned by the failure of Tenant to maintain the Premises and all improvements thereto in a safe condition, or arising from any other cause except where caused by the negligence of Landlord, its agents or employees.

11.2 Indemnification of Landlord.

A. To the fullest extent permitted by law, Tenant shall, at Tenant's sole expense, 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 Agreement, the tenancy created under this Agreement 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;
Exhibit C

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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 Agreement, and; v. Any breach or default in performance of any
obligation on Tenant’s part to be performed under this Agreement, whether before or during the term of this Agreement 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);
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 Agreement until all claims against Landlord involving any of the indemnified matters are fully, finally, and absolutely barred by the applicable statutes of limitations.

11.3 Liability Insurance. Tenant shall procure and maintain at all times during the term of this Agreement, 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 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 Four Million Dollars ($4,000,000.00) 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 one hundred and twenty (120) days’ prior 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 Exhibit C

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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.

11.4 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 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.

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

I. Reserved
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 Agreement 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 Agreement.

11.5. Additional Requirements - Claims Made Policies.

Exhibit C

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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 endeavor to give its insurance carrier and Landlord written notice of each and every event or incident occurring during the term of this Agreement that may ripen into a claim. Notice shall be given no later than ten (10) days after such event or incident.

11.6. Fire Insurance. Tenant shall at all times during the term of this Agreement 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 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 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 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 Agreement. Proceeds from any insurance policy shall be used in accordance with the provisions of this Agreement dealing with use of insurance funds for repair and restoration.

11.7. 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. Copies of 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, expiration in any such policy.

11.8. Use of Insurance Funds for Repair and Restoration. In the event any buildings, structures or improvements located on the 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 be expended for the restoration, repair or replacement of said buildings, structures or improvements.

Exhibit C

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11.9. Failure to Provide Insurance. If Tenant fails or refuses to procure or to maintain insurance as required by this Agreement 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, to terminate this Agreement pursuant to Sections 18 and 19.

11.10. 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.

12. Rules and Regulations. Tenant agrees to abide by all rules and regulations, as amended from time to time, of the Federal Aviation Administration, the State of California, and the City of El Paso de Robles, and other duly constituted public authorities having jurisdiction over the Airport.

13. Hazardous Materials. Tenant shall not cause or permit any Hazardous Materials, as defined below, to be brought upon, kept, used, or stored within the Premises except to the extent such Hazardous Materials are (i) limited to reasonably necessary hazardous materials and for a limited duration for Tenant's permitted use, including for cleaning purposes, and (ii) used and stored in compliance with all applicable local, state, and federal laws, regulations, and ordinances, including without limitation OSHA, EPA, and any applicable state environmental agency requirements.

Tenant shall maintain all required permits, manifests, and disposal records and shall make such records available to Landlord upon reasonable request. If Tenant breaches the foregoing, or if the presence of any Hazardous Material within the Premises caused or permitted by Tenant results in contamination of the Premises or damage to the building, and such breach or contamination is the direct and proximate cause of a claim, damages, costs, liabilities, or expenses (including diminution in value or use of the Property, reasonable attorneys’ fees, consultant fees, and remediation costs) arising during or after the Term, Tenant shall indemnify, defend, and hold Landlord harmless from such claims. Tenant shall not cause or permit any Hazardous Materials to be discharged, deposited, leaked, spilled, or released from the Premises onto or into the soil, groundwater, surface water, storm drainage systems, or any exterior areas of the Property. Any release, discharge, or migration of Hazardous Materials from the Premises to the exterior of the building or beyond the building envelope, caused or permitted by Tenant shall trigger Tenant's indemnification obligations hereunder.

Exhibit C

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"Hazardous Material" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local, state or federal governmental authority or by common law decisions, including without limitation (i) all chlorinated solvents, (ii) petroleum products or by-products, (iii) asbestos and (iv) polychlorinated biphenyls.

Notwithstanding anything to the contrary herein, Tenant shall only be responsible for the liability set forth in this Section 13 to the extent that the damage or harm was directly and proximately caused by Tenant and shall not extend to pre-existing conditions or contamination caused by Landlord, other tenants, or third parties.

14. Access by City. City reserves for itself and any of its designated agents the right to enter the Premises as follows:

14.1 On an occasional basis, at all reasonable times after giving Tenant 24 hours’ advance written or oral notice, to post notice of non-responsibility, to conduct any environmental audit of Tenant’s use of the Premises, to repair, alter or improve any part of the Property, building systems or Premises, and/or any other lawful purpose; and

14.2 In an emergency basis without notice whenever City believes that emergency access is required. City shall have the right to use any means that it deems proper to open doors in an emergency in order to obtain access to any part of the Premises, and any such entry shall not be construed or deemed to be a forcible or unlawful entry into or a detainer of, the Premises, or an eviction, actual or constructive, of Tenant from the Premises or any portion thereof.

15. Inspection by Certified Access Specialist. Landlord discloses that the Premises have not undergone inspection by a Certified Access Specialist as referenced in California Civil Code Section 1938 subsection (e) which provides: "A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or Landlord may not prohibit the Tenant or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the Tenant or tenant, if requested by the Tenant or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises." Pursuant to the foregoing Section 1938(e), Tenant acknowledges and agrees that, if Tenant wishes to have the Premises inspected by a CASp: (i) Tenant must notify Landlord on or before the date when Tenant executes this Agreement pursuant to the election below; (ii) the inspection will be at Tenant's sole cost and expense; (iii) the inspection must be scheduled through Landlord and in coordination with the Building’s property manager; (iv) any repairs or modifications necessary to correct any violation of construction-related accessibility standards that is noted in the CASp report shall be Tenant’s responsibility; and (v) Tenant must provide a copy of the CASp report to Landlord on completion. By initialing below, Tenant represents that:

Tenant wishes to have a CASp inspection of the Premises. Initials: ______________ Exhibit C

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Tenant waives its right to have a CASp inspection of the Premises. Initials: ____________

16. Compliance with Federal Requirements

16.1 Tenant, for itself, its heirs, personal representatives, successors in interest, sub-Tenants 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 Agreement 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.

16.2 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 Federally­ Assisted Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended.

16.3. Tenant agrees that it shall insert Sections 16.1 and 16.2 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 rented.

17. Surrender. Upon the expiration or any earlier termination of this Agreement pursuant hereto, Tenant shall surrender to City the Premises in good condition, order and repair, free from debris and hazards, and free and clear of all liens, easements and other encumbrances created or suffered by, through or under Tenant, reasonable wear and tear excepted. On or before the Expiration Date or any earlier termination hereof, or later upon City’s request, Tenant shall, at its sole cost, remove any and all of Tenant’s personal property from the Premises and demolish and remove any and all improvements and alterations installed or made on the Premises by or at the expense of Tenant requested by City to be removed. In addition, Tenant shall, at its sole expense, repair any damage to the Premises resulting from the removal of any such items and restore the Premises Exhibit C

- 15 -
to their condition immediately prior to the presence of such improvements or alterations.

In connection therewith, Tenant shall obtain any and all necessary permits and approvals, including, without limitation, any environmental permits, and execute any manifests or other documents necessary to complete the demolition, removal or restoration work required hereunder. Tenant’s obligations under this Section shall survive the expiration or other termination of this Agreement. Any items of Tenant’s personal property remaining on or about the Premises after the expiration of this Agreement may, at City’s option, be deemed abandoned and in such case City may dispose of such property in any manner allowed by law.

18. Termination. Without limiting its ability to seek other remedies, either at law or in equity, either Party may terminate this Agreement and all of the obligations herein, at its option, upon the other Party’s breach of any of its obligations under this Agreement and failure to cure such breach within thirty (30) days after receipt of written notice from the non-breaching Party or, if such cure cannot be completed within thirty (30) days, the breaching Party’s failure to commence such cure within thirty (30) days after its receipt of written notice and thereafter failing to diligently prosecute such cure to completion.

In addition to the foregoing, upon expiration of the Agreement term provided in Section 1 of this Agreement either Party may terminate this Agreement by providing the other party with sixty (60) days’ prior written notice of said wish to terminate. Said notice shall be sent via certified mail, return receipt requested, to the location specified in Section 38 of this Agreement, and shall be deemed accepted upon delivery.

19. Default. Any of the following events or occurrences shall constitute a material breach of this Agreement by Tenant, and shall constitute an Event of Default.

19.1 With respect to any failure to pay any rent or other sums as and when due, provided Tenant shall have a period of five (5) days from the date of written notice of such failure from City within which to cure any default in the payment of rent or other sums. City shall not be required to provide such notice regarding Tenant’s failure to make such payments when due more than twice during any calendar year, and any such failure by Tenant after Tenant has received two (2) such notices in any calendar year shall constitute a default by Tenant hereunder without any requirement on the part of the City to give Tenant notice of such failure or an opportunity to cure.

19.2 With respect to any failure to perform or comply with any condition, term, provision, promise, covenant, agreement, representation, warranty, guaranty, indemnity, duty or obligation made under this Agreement, if not cured within fifteen (15) days after written notice from the City; provided, however, that if the breach is not reasonably capable of being cured within such fifteen (15) day period, Tenant shall not be in default if Tenant commences to cure within such period, gives City written notice of such commencement, and therefafter diligently pursues the cure to completion and completes such cure within sixty (60) days after receipt of City’s notice. However upon the occurrence during the Term of two (2) defaults for the same obligation during any consecutive twenty four (24) month period, City shall not be required to provide any notice Exhibit C

- 16 -
regarding Tenant’s failure to perform such obligation, and any subsequent failure by Tenant after it has received two (2) such notices shall constitute a default without any requirement on the part of City to give notice of such failure or an opportunity to cure.

19.3 Vacation and Abandonment. Tenant shall not vacate or abandon the Premises in a manner that results in a failure to maintain the Premises or creates a safety, security, or code compliance issue. Any such failure continuing for more than fourteen (14) consecutive days after written notice from City shall constitute a default.

Notwithstanding the foregoing, Tenant shall not be required to continuously occupy the Premises, and non-use of the Premises shall not, in and of itself, constitute a default, provided that Tenant timely pays all Rent, maintains the Premises in accordance with this Agreement, and otherwise complies with its obligations hereunder.

19.4 The appointment of a receiver to take possession of all or substantially all of the assets of Tenant, or an assignment by Tenant for the benefit of creditors, or any action taken or suffered by Tenant under any insolvency, bankruptcy, reorganization, moratorium or other debtor relief act or statute, whether now existing or hereafter amended or enacted, if any such receiver, assignment or action is not released, discharged, dismissed or vacated within sixty (60) days.

20. Remedies. Upon the occurrence of an Event of Default by Tenant, City shall have the following rights and remedies in addition to all other rights and remedies available to City at law or in equity:

20.1 City may terminate this Agreement and Tenant shall immediately surrender possession of the Premises to City. In such event, City shall be entitled to recover from Tenant all damages incurred by City by reason of Tenant’s default.

20.2. City’s rights and remedies pursuant to California Civil Code Section 1951.2, including, but not limited to, the right to terminate Tenant’s right to possession of the Premises and to recover the worth at the time of award of the amount by which the unpaid rent and any additional charges for the balance of the Term after the time of award exceeds the amount of rental loss for the same period that Tenant proves could be reasonably avoided. City’s efforts to mitigate the damages caused by Tenant’s breach of this Agreement shall not waive City’s rights to recover damages upon termination.

20.3. City may, at its sole discretion, allow the Agreement to continue in effect and enforce all rights and remedies under this Agreement, including the right to recover rent as it becomes due, for so long as City does not terminate Tenant’s right to possession. No action taken by City pursuant to this Section shall be deemed a waiver of any default by Tenant and, notwithstanding any subletting without termination; City may at any time thereafter elect to terminate this Agreement for such previous default.

21. Compliance with Laws. Tenant shall comply with all applicable Federal, State and local laws, regulations and standards that are or may become applicable to Tenant’s occupancy and/or activities on the Premises. The judgment of any court of competent jurisdiction, or the admission of Tenant in a proceeding brought against it by Exhibit C

- 17 -
any governmental entity, that Tenant has violated any such statute, ordinance, regulation, or requirement shall be conclusive as between the City and the Tenant and shall constitute grounds for declaration of default, material breach, forfeiture, and termination of this Agreement by City.

22. No Assignment. Tenant shall not assign or sublet all or any portion of the Premises, and shall not assign, encumber or otherwise transfer any of its rights under this Agreement without the prior written consent of Landlord, which may be withheld in Landlord’s sole discretion. Tenant represents that it is in the process of being acquired by Kongsberg Defense & Aerospace AS (“KDA”). Notwithstanding anything to the contrary in this Agreement, Tenant shall have the right, without Landlord’s consent, to assign this Agreement to KDA or any entity controlling, controlled by, or under common control with KDA (an “Affiliate”), and Landlord hereby acknowledges and pre-approves any such assignment; provided, however, that such assignee shall have a net worth and financial capacity at least equal to or greater than that of Tenant as of the date of this Agreement. No assignment shall release Tenant from its obligations under this Agreement, and Tenant shall remain jointly and severally liable with any assignee for the performance of all terms and conditions of this Agreement.

23. Signs. All signs and graphics of every kind visible from public view corridors, or the exterior of the Property will be subject to City’s prior written approval, and will be subject to any applicable governmental laws, and ordinances and in conformance with City’s design standards.

24. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.

25. Captions. Any captions to, or headings of, the sections or subsections of this Agreement are solely for the convenience of the parties hereto, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agreement or any provision hereof.

26. No Obligations to Third Parties. Except as otherwise expressly provided herein, the execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate any of the parties thereto, to any person or entity other than the parties hereto.

27. Amendment of Agreement. The terms of this Agreement may not be modified or amended except by an instrument in writing executed by each of the parties hereto.

28. Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof.

29. Applicable Law. This Agreement shall be governed by and construed in Exhibit C

- 18 -
accordance with the laws of the State of California. The venue of any disputes arising out of this Agreement shall be the state and federal courts located in the County of San Luis Obispo.

30. Fees and Other Expenses. Except as otherwise provided herein, each of the Parties shall pay its own fees and expenses in connection with this Agreement, including any permit or license fees which Tenant may be required to obtain pursuant to its occupancy.

31. Attorneys' Fees. If any party commences an action against the other party arising out of or in connection with this Agreement, the prevailing party or parties shall be entitled to recover from the losing party or parties reasonable attorneys' fees and costs of suit.

32. Authority to Execute Agreement. Tenant and City warrant that the individuals who have signed this Agreement have the legal power, right and authority to enter into this Agreement so as to bind each party for whom they sign to perform as provided herein.

33. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties hereto.

34. Incorporation of Recitals. Each and all of the Recitals to this Agreement are incorporated by reference as though fully set forth herein.

35. Entire Agreement. This Agreement supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between City and Tenant as to the subject matter hereof. No subsequent agreement, representation, or promise made by either party hereto, or by or to any employees, officer, agent or representative of either party shall be of any effect unless it is in writing and executed by both parties to this Agreement.

36. Severability. If any portion of this Agreement is declared by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions of this Agreement shall continue in full force and effect.

37. Electronic Signature. Each Party acknowledges and agrees that this Agreement may be executed by electronic or digital signature, which shall be considered as an original signature for all purposes and shall have the same force and effect as an original signature.

38. Notices. Tenant agrees to notify Landlord in writing within ten (10) days of change of any personal information furnished to Landlord in connection with this Agreement. All notices required by this Agreement shall be deemed delivered upon personal delivery or deposit in the United States Mail, first class postage prepaid, addressed as follows:

Exhibit C

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If to Landlord: If to Tenant:

City of El Paso de Robles Zone 5 Technologies
1000 Spring Street Address
Paso Robles, CA 93446

39. Broker Commission. Tenant represents that it has been represented in this transaction by McCarty Davis, Inc. (“Broker”). City agrees to pay Broker a commission equal to three percent (3%) of the total Base Rental Payment payable for the first two (2) years of the initial Term, which shall be payable upon full execution of this Agreement. In addition, City agrees to pay Broker a commission equal to three percent (3%) of the total Base Rental Payment payable during each extension or renewal term, which commission shall be payable at the commencement of each such extension or renewal term, but only if such term is exercised by Tenant. City shall have no obligation to pay any commission except as expressly provided herein. Tenant shall indemnify, defend, and hold harmless City from any claims for brokerage commissions arising from any other broker or agent claiming through Tenant.

Exhibit C

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SIGNATURE PAGE TO RENTAL AGREEMENT BETWEEN CITY OF EL PASO DE ROBLES AND ZONE 5 TECHNOLOGIES
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

LANDLORD

CITY OF EL PASO DE ROBLES
APPROVED BY:

Chris Huot
City Manager
ATTESTED BY:

Melissa Boyer
City Clerk
APPROVED AS TO FORM:

Best Best & Krieger LLP
City Attorney
TENANT
ZONE 5 TECHNOLOGIES LLC
APPROVED BY:

[***INSERT NAME***]
[***INSERT POSITION***]
Exhibit C

- 21 -

EXHIBIT A

DESCRIPTION OF PROPERTY
The Premises consist solely of the existing buildings and improvements located at 4301 Second Wind Way and 4309 Second Wind Way, within the Paso Robles Municipal Airport, in the City of El Paso de Robles, County of San Luis Obispo, State of California (collectively, the “Buildings”), and do not include any underlying land except as may be necessary for access and use as expressly provided in the Agreement.

The Buildings are located on real property more particularly described as follows:

Parcel 1 of Parcel Map 51-63, in the City of El Paso de Robles, County of San Luis Obispo, State of California, as recorded in Book 25, Page 47 of Parcel Maps in the Office of the County Recorder of said County.

Assessor’s Parcel Number (APN): 025-471-023.

The Buildings consist of approximately 40,156 square feet located at 4309 Second Wind Way and approximately 6,396 square feet located at 4301 Second Wind Way.

For informational purposes only, the leasehold interest (buildings) is identified by Possessory Interest Number (PIN) 940-001-578.

Exhibit C

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Attachment 2

Council Agenda Report
From: Wyatt Lund, Recreation Program Coordinator
Subject: Approval of an Extension of Dale Evers Public Art Installations at Intersection of Park and 12th Streets
CEQA Determination: The City finds that this action is not a project under the California Environmental Quality Act pursuant to State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Date: May 19, 2026
Facts

1. In December of 2023, local artist Dale Evers submitted a proposal to the City to place two sculptures downtown near City Park at the intersection of Park and 12th Streets, across from the main entrance to Downtown City Park.

2. The concept was approved by the Parks and Recreation Advisory Committee (PRAC) and subsequently by City Council with an installation period of October 2024 to May 2026 at no cost to the city.

3. The installation includes two sculptures, titled “Michael,” and “Wings of Legend,” which are large, decorative guitars constructed of metal and glass.

4. Prior to installation, an encroachment permit was issued to Mr. Evers by the City Engineer, and a License Agreement for Temporary Public Exhibition of Art Exhibit Agreement was executed.

6. The new Art and Culture Board is currently in the recruitment phase, and the member terms will begin June 17, 2026. Once established, this group will make recommendations regarding future exhibits at this location. Any new exhibits or extensions will be subject to review by the Art and Culture Board in accordance with Chapter 3.21 of the Municipal Code (Visual Art in Public Places).

Options

1. Take no action;

2. Approve the six-month extension of the installations “Michael” and “Wings of Legend” by Dale Evers, and authorize staff to execute a First Amendment extending the exhibit period through December 1, 2026;

3. Provide alternative direction to staff.

Analysis and Conclusions
Dale Evers has agreed to extend the installation period for an additional six months, to expire December 1, 2026. If the installation extension is approved, city staff will execute the attached First Amendment to the License Agreement for Temporary Public Exhibition of Art Exhibit Agreement, defining the updated installation period.

The newly formed Art and Culture Board is currently recruiting members, with terms set to begin on June 17, 2026. Once in place, the Board will provide recommendations on future exhibits at this

location. Any proposed new exhibits or extensions will be reviewed by the Board in accordance with Chapter 3.21 of the Municipal Code (Visual Art in Public Places).

Fiscal Impact
There is no fiscal impact associated with approving the First Amendment of the described art installations over a six-month period. Ongoing maintenance and eventual removal of the sculptures will be the responsibility of the artist.

CEQA
The City finds that this action is not a project under the California Environmental Quality Act pursuant to State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378 as it can be seen with certainty that the proposed extension will not result in a direct or reasonably foreseeably indirect physical change in the environment.

Recommendation (Option 2)
Approve the six-month extension of the installations “Michael” and “Wings of Legend” by Dale Evers and authorize staff to execute the First Amendment extending the exhibit period through December 1, 2026.

Attachments

1. Dale Evers’ existing “Michael” and “Wings of Legend” sculptures

2. License Agreement for Temporary Public Exhibition of Art Exhibit

3. Amendment No. 1 to the License Agreement for Temporary Public Exhibition of Art Exhibit

4. Ordinance No. 1166 – Re-Instating and Amending Chapter 3.21 of the Municipal Code

“Michael” by Dale Evers “Wings of Legend” by Dale Evers Attachment 1

Attachment 2

Attachment 2

Attachment 2

Attachment 2

Attachment 2

Attachment 2

Attachment 2

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82471.01000\44955914.1
AMENDMENT NO. 1 TO

LICENSE AGREEMENT FOR TEMPORARY PUBLIC EXHIBITION OF ART EXHIBIT This “Amendment No. 1” to the License Agreement for Temporary Public Exhibition of Art Exhibit (“Agreement”) is made and entered into as of May ___, 2026 by and between the City of El Paso De Robles, a general law city and municipal corporation (“City”), and Dale Evers, a private citizen and artist (“Permittee”). City and Permittee are sometimes referred to herein individually as a “Party” and collectively as “Parties.”

RECITALS
A. WHEREAS, the City and the Permittee entered into the Agreement, dated August 23, 2024, for the transportation, installation, display, removal, and maintenance of certain artwork (“Art Exhibit”) on public property (“Property”), as depicted by Exhibit “A” to the Agreement.

B. WHEREAS, the Exhibition Period specified in the Agreement for the Art Exhibit is from October 2024 through May 2026.

C. WHEREAS, the Parties now wish to amend the Agreement to extend the Exhibition Period six (6) months, through November 30, 2026.

NOW, THEREFORE, in consideration of the above recitals and the mutual covenants, conditions, and promises contained in the this Amendment No. 1 and the Agreement, the Parties mutually agree as follows:

AGREEMENT

1. Incorporation of Recitals. The recitals listed above are true and correct and are hereby incorporated herein by this reference.

2. Amendment to Section 1 of the Agreement. Section 1 “License” is hereby deleted and amended as follows:

Subject to the terms and conditions of this Agreement, the City hereby grants to Permittee a non-exclusive license to use the Exhibit Site from October 1, 2024 to November 30, 2026 (“Exhibit Period”) for the purposes of installing and displaying the Art Exhibit.

3. Full Force. Except as amended by this Amendment No. 1, all provisions of the Agreement shall remain in full force and effect and shall govern the actions of the Parties under this Amendment No. 1.

4. Electronic Transmission. A manually signed copy of this Amendment No. 1 which is transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Attachment 3

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82471.01000\44955914.1
Amendment No. 1 for all purposes. This Amendment No. 1 may be signed using an electronic signature.

5. Counterparts. This Amendment No. 1 may be signed in counterparts, each of which shall constitute an original.
[SIGNATURES ON FOLLOWING PAGE]
Attachment 3

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82471.01000\44955914.1

SIGNATURE PAGE FOR
AMENDMENT NO. 1 TO

LICENSE AGREEMENT FOR TEMPORARY PUBLIC EXHIBITION OF ART EXHIBIT IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 1 on the Effective Date first herein above written.

CITY OF El PASO DE ROBLES
APPROVED BY:

Chris Huot
City Manager
APPROVED AS TO FORM:

Elizabeth Hull
City Attorney

PERMITTEE
Dale Evers
Artist
Attachment 3

ORDINANCE NO. 1166

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF EL PASO DE ROBLES, CALIFORNIA, REINSTATING AND AMENDING CHAPTER 3.21 OF THE MUNICIPAL CODE OF THE CITY OF EL PASO DE

ROBLESREGARDING VISUAL ART IN PUBLIC PLACES
WHEREAS, public art was first identified as a City priority in the 2003 General Plan as an essential component of placemaking. With the adoption of Municipal Code Chapter 3.21 in 2005, the City created the Public Art Fund, requiring eligible capital projects to set aside 1% for public art, and assigned review authority to the Parks and Recreation Advisory Committee (PRAC); and WHEREAS, the last Art in Public Places expenditure occurred in 2009, when $4,000 was used to purchase art display panels. Public Art Fund contributions were suspended during the Great Recession, and 2018 amendments formally placed the ordinance on hold, rendering the program inactive; and WHEREAS, since 2012, limited projects have moved forward, and the Public Art Fund balance remains small, $700 as of FY 2025. Several recent artist funded installations, including the Norma’s Way archway (2019) and two temporary sculptures (2024), required unique processing due to the absence of a formalized program; and
WHEREAS, public art is a major contributor to Paso Robles’ cultural, social, and economic vitality.

According to the 2025 San Luis Obispo County Economic Impact of the Arts & Culture Sector Report, the Arts & Culture sector draws approximately 630,000 visitors to Paso Robles annually, supporting $70.2 million in visitor spending and enriching overall quality of life. Public art enhances community identity, supports local artists, increases tourism, reduces blight, and helps activate public spaces; and WHEREAS, the City’s 5-Year Economic Development Strategic Plan (EDSP 2024–2029) identifies placemaking, downtown revitalization, gateway enhancement, branding, and infrastructure improvements as core economic development priorities. The EDSP specifically calls for a Downtown Placemaking Pilot Project, activation of public spaces, and strategic investments that improve “livability,” visitor experience, and business attraction. Public art is one of the most cost-effective and visible tools for achieving these objectives, strengthening both tourism and long-term economic competitiveness; and WHEREAS, to effectively administer the reinstated program, the City Council finds it necessary to establish an Arts and Culture Board to provide expert guidance, ensure community input, and align public art initiatives with City goals; and
WHEREAS, reinstating and amending Chapter 3.21 will provide a structured, sustainable framework for funding, acquiring, and maintaining public art, funded through tourism-related revenues to maximize economic benefits without burdening general funds.

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

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

SECTION 2. Reinstatement and Amendment to Municipal Code. Chapter 3.21 (Visual Art in Public Places) of Title 3 (Revenue and Finance) of the El Paso de Robles Municipal Code is reinstated and amended to read as follows:
“Chapter 3.21 VISUAL ART IN PUBLIC PLACES

3.21.010 Intent and purpose.

This chapter shall be known as the "Visual Art in Public Places Program of the City of El Paso de Robles." The City Council declares that visually pleasing and highquality public art enhances community identity, promotes cultural tourism, and improves public welfare. In furtherance of these goals, the City shall fund, acquire, and maintain public art through revenues derived from the City’s Transient Occupancy Tax (“TOT”), as provided in this chapter.3.21.020 Definitions.

For purposes of this chapter, the following terms shall have the meanings ascribed to them as follows:

CC Ordinance 1166 N.S. Page 1 of 5 Attachment 4

“Acquire” or “acquisition” means to purchase, commission, accept as a donation, or otherwise obtain ownership or custodial rights to works of art. “Artist” means a professional practitioner in the visual, media, or performing arts who is recognized by peers, critics, or relevant organizations and who has demonstrated experience creating public art.
“Arts and Culture Board” or “Board” means the City of El Paso de Robles Arts and Cultural Board.
“Commission” means a contract with an artist for the design, fabrication, and installation of a site-specific work of art.
“Director” means the Community Services Director or their designee in the El Paso de Robles Community Services Department.
“Donation” means a work of art that is gifted to the City with no conditions restricting City ownership, display, or disposition.
“High-profile work of art” or “high-profile” means a work of art (i) valued at $50,000 or more; (ii) proposed for placement in a highly visible or prominent public location such as a City gateway, major park, or downtown area; (iii) anticipated to generate substantial public interest; (iv) otherwise deemed by the Director to warrant City Council review due to its scale, impact, or cost. “Maintenance” means all actions required to preserve, clean, repair, and protect works of art to ensure their continued public display and safety. “Public Art Collection” means the aggregate of all City-owned and maintained works of art.
“Public Art Fund” or “Fund” means the special revenue fund established by Section

3.21.050 of this Chapter.
“Public Art Plan” means an annual planning document prepared by the Board and Director setting forth proposed public art projects, priorities, funding allocations, and program objectives for the upcoming fiscal year consistent with the City’s budget process.
“Transient Occupancy Tax” or “TOT” means the tax imposed by the City on transient occupancy pursuant to Chapter 3.26 of this Code. "Visual art in public places" or "public art" means any visual work of art displayed in a publicly visible location in a City-owned or City-controlled leased area. "Works of art" include, but are not limited to, ornamental landscaping, sculpture, monument, mural, fresco, bas-relief, mobiles, photography, drawing, handcrafts, painting, decorative fountain, landscape composition, banners, mosaic, ceramic, weaving, carving, stained glass, and digital or lighted immersive installations. "Works of art" are the creative result of individual or group effort, and are either unique or of limited-issue nature, and are normally not mass-produced or intended primarily for a commercial market. "Works of art" do not normally include landscaping, paving, architectural ornamentation or signs.

3.21.030 Arts and Culture Board and bylaws.

There is hereby established the Arts and Culture Board. The City Council shall adopt bylaws by resolution to regulate and govern the Board’s composition, terms of office, officers, meetings in compliance with the Brown Act, quorum, voting, conflict-of-interest rules, functions, and authority. The City Council may update bylaws from time to time by resolution.

3.21.040 Public art policies and guidelines.

A. The City Council shall approve policies and guidelines for the administration of this Chapter, including artist selection criteria, procurement procedures, maintenance standards, and placement protocols, with opportunities for public review and comment.

B. The Board shall exercise its decision-making authority pursuant to such City Council-approved policies and guidelines.

CC Ordinance 1166 N.S. Page 2 of 5 Attachment 4

3.21.050 Funding authorization.

An amount equal to one-half of one percent (0.5%) of the City’s annual Transient Occupancy Tax (TOT) revenues from unrestricted sources shall be annually appropriated to the Public Art Fund. The appropriation amount will be reviewed and adjusted through the City’s annual budget adoption process based on available funds and program needs. Funds shall be deposited into the Public Arts Fund.

Allocated funds shall not constitute an entitlement to any particular project or vendor and shall be expended solely for purposes consistent with this Chapter.

3.21.060 Public Art Fund.

A. There is established a special fund designated as the "Public Art Fund," which is to be maintained by the Director in coordination with the Administrative Services Department. All monies appropriated or received for public art shall be deposited in this Fund and used solely for the following purposes:

1. 1. Creation, acquisition, design, fabrication, and installation of public art on City-owned or City-controlled property;

2. 2. Maintenance, conservation, and restoration of works of art in the Public Art Collection;

3. 3. Temporary, rotating, or community-based art projects approved pursuant to this Chapter;

4. 4. Public education and programming related to the Visual Art in Public Places Program;

5. 5. Artist fees, materials, transportation, insurance, and documentation.

6. 6. Administrative costs, professional services, and necessary program support.

B. Interest earned on the Public Art Fund shall accrue to the Fund.

3.21.070 Guidelines for acquisition and installation of public art.

B. In addition to any guidelines promulgated by the Director regarding approval and maintenance, works of art shall be:

1. Clearly visible and easily accessible to the public.

2. Constructed of durable, permanent-type materials to withstand weather, vandalism, theft, and environmental exposure.

3. Related in terms of scale, material, form, and content to immediate and adjacent buildings and landscaping so that they complement the site and surrounding environment.

4. Compatible with the unified design character or historical character of the site.

5. Designed and constructed by persons experienced in the production of such artwork and recognized by critics and by their peers as one who produces works of art.

6. Maintained by the City to an acceptable professional standard.

C. The following items are not to be considered works of art for the purposes of this chapter:

1. Art objects which are mass produced from a standard design;

2. Reproductions of original art works;

3. Decorative, ornamental, or functional elements which are designed by the building architect as opposed to an artist commissioned for the purpose of creating the works of art;

4. Services or utilities necessary to operate or maintain the works of art.

3.21.080 Authority and administration.

A. The Director shall have the authority to:

CC Ordinance 1166 N.S. Page 3 of 5 Attachment 4

1. Develop and administer guidelines, rules, policies, regulations, forms, and procedures deemed necessary to administer this Chapter and implement the Visual Art in Public Places Program, subject to City Council approval pursuant to Section 3.21.040.

2. Review proposed works of art, artists, and donations for qualification under this Chapter and present qualifying items to the Board for consideration and decision.

3. Coordinate with the Board and City departments.

4. Determine whether a proposed work of art, placement, or donation is “high-profile,” as defined in Section 3.21.020, requiring City Council approval.

B. The Board shall have the authority to:

1. Annually prepare and recommend a Public Art Plan in collaboration with the Director specifying proposed projects, sites, budgets, and program goals.

2. Make final decisions on the selection of artists and works of art for commission, acquisition, or approval of donations, and on placements, pursuant to City Council-approved policies and guidelines under Section

3.21.040.

3. Advise on maintenance priorities and funding needs for the Public Art Collection.

4. Recommend to City Council the acceptance of high-profile public art donations and deaccessioning of works no longer suitable for display.

5. Recommend the placement of works of art consistent with the provisions of Section 3.21.080.

6. Promote public awareness, education, and engagement concerning the City’s Visual Art in Public Places Program.

3.21.090 Placement of works of art.

Works of art may be placed in, on or about City-owned, leased, or controlled properties, including municipal buildings, parks, streetscapes, and open spaces. The location and installation of all works of art shall conform to the adopted Public Art Plan and City Council-approved policies and guidelines and shall be approved by the Board pursuant to Section 3.21.080. The Director may approve placements valued at less than $50,000 that are not high-profile works of art. High-profile placements and all placements valued at $50,000 or more, shall require City Council approval upon recommendation of the Board and Director pursuant to Section 3.21.080. All placements shall comply with Section 3.21.060 and all applicable safety, accessibility, and building regulations.

3.21.100 Donations.

A. All proposed donations shall be reviewed by the Director for initial qualification and presented to the Board.

B. The Board shall approve routine donations. High-profile donations shall be recommended by the Board to the City Council for final approval.

C. Approved donations shall be added to the Public Art Collection and subject to all provisions of this Chapter.

3.21.110 Deaccessioning and relocation.

The City may remove, relocate, or deaccession any work of art that becomes damaged, obsolete, hazardous, or inconsistent with program objectives based on criteria including artistic merit, physical condition, maintenance costs, public safety, and alignment with City goals. Deaccessioning and relocation of high-profile works of art shall occur only after review by the Board and approval by the City Council consistent with City Council-approved policies and guidelines. Any proceeds from deaccession sales shall be deposited into the Public Art Fund.

CC Ordinance 1166 N.S. Page 4 of 5 Attachment 4

Attachment 4

Council Agenda Report
From: Ditas Esperanza, Capital Projects Engineer
Subject: Approval of a Contract Change Order to Souza Construction for the Downtown Parking Lot Rehabilitation Projects
CEQA Determination: The City finds that this action is categorically exempt from the California Environmental Quality Act (“CEQA”) under the Class 1 exemption, which applies to the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing structures, facilities, mechanical equipment, or topographical features where the project involves negligible or no expansion of existing or former use (State CEQA Guidelines, § 15301).

Date: May 19, 2026
Facts

1. The City’s Capital Improvement Program includes refurbishing two downtown parking lots; one adjacent to Marv’s Pizza and the other at Railroad and 12th Street.

2. On April 19, 2022, City Council approved Resolution 22-043 awarding a design contract to Cannon Corp. in the amount of $93,000.

3. On April 15, 2025, City Council approved Resolution 25-036 awarding a construction contract to Souza Construction in the amount of $1,029,955.

4. Several unforeseen circumstances were encountered during the awarded construction phase, including:
a. The work was required to be completed in phases to minimize disruption to ongoing operations and maintain access to surrounding businesses; b. PG&E changed its procedures and required separate systems to be installed for providing power for the irrigation and the electrical charging stations; c. The surface of the 12th Street parking lot was determined to be more uneven than initially designed, creating the need for additional asphalt to achieve both a smooth finish and compliance with Americans with Disabilities Act (ADA) slope and gradient standards; d. Additional work and associated appurtenances were required for the charging station equipment to meet eligibility criteria for reimbursement, as directed by the Air Pollution Control District;
e. During excavation, previously buried concrete debris and miscellaneous materials were encountered and removed to achieve required compaction standards.

5. These conditions resulted in a needed change order in the amount of $360,000 to Souza’s construction contract.

6. The City’s Purchasing Policy gives staff change order pre-authorization up to $125,000 or 10% of the contract, whichever is greater, for contracts of this type. Amounts in excess of this limit requires City Council approval as a regular agenda item.

Options

1. Take no action;

2. Authorize the City Manager to approve a contract change order of $360,000 to Souza Construction for the repairs to the Downtown Parking Lots for a total not-to-exceed contract of $1,389,955; or

3. Provide an alternative direction to the staff.

Analysis and Conclusions
The City Council identified the refurbishment of the downtown parking lots at Railroad and 12th Street, along with those adjacent to Marv’s Pizza, as a priority during the February 2022 Goal Setting Workshop.

The scope of work includes improving circulation within the lots, maximizing parking spaces, improving lighting, improving ADA parking space availability, improving driveway access to the lots, improving alley access at 12th, 13th, and Park Streets, improving drainage, and installing EVC charging stations. The project addresses all the stated scope items as part of its bid package.

The project presented several unforeseen construction challenges associated with aging underground infrastructure and the complexity of rehabilitating facilities that had not undergone significant improvements in decades. As construction progressed, staff and the contractor encountered deteriorated infrastructure conditions, the need for additional construction phasing, field design modifications, and additional improvements necessary to provide adequate power capacity and comply with Air Pollution Control District requirements. These conditions required timely coordination and decision-making in order to avoid extended delays, additional mobilization costs, and potential impacts to surrounding infrastructure and businesses. Given the operational importance of the project and the need to maintain construction momentum, staff authorized the contractor to proceed with certain additional work prior to formal City Council approval in order to minimize schedule disruptions and overall project impacts.

The additional work performed was necessary to successfully complete the project and address conditions discovered during construction. The challenges encountered underscore the realities associated with rehabilitating older infrastructure systems where existing conditions can differ substantially from available records and initial assumptions. Despite these challenges, the project ultimately improves the long-term reliability, safety, and overall functionality of the downtown parking infrastructure.

Fiscal Impact
The City’s Capital Improvement Program (CIP) currently includes funding for this project from the General Fund in the amount of $1,693,000 and an Electric Vehicle Charging (EVC) Grant in the amount of $217,000, for a total authorized project budget of approximately $1,910,000. With the inclusion of the proposed $360,000 change order, total estimated project costs are now projected at approximately $2,168,857. As a result, the project is anticipated to exceed the currently authorized budget by approximately $258,857, which will require an additional appropriations from General Fund reserves to complete the project. Fund reserves are kept for these unforeseen situations. Including this amendment, it is projected that General Fund reserves will be $16.3 million on June 30, 2026, maintaining its minimum required reserve amount.

CEQA
The City finds that this action is categorically exempt from the California Environmental Quality Act (“CEQA”) under the Class 1 exemption, which applies to the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing structures, facilities, mechanical equipment, or topographical features where the project involves negligible or no expansion of existing or former use (State CEQA Guidelines, § 15301).

Recommendation (Option 2)
Approve Resolution 26-XXX authorizing the City Manager to execute a contract change order in the amount of $360,000 with Souza Construction for repairs to the Downtown Parking Lots, for a revised total not-to-exceed contract amount of $1,389,955.

Attachments

1. Resolution 26-XXX Change Order for Downtown Parking Lot Repairs

Attachment 1
CC Resolution 26-XXX Page 1 of 2
RESOLUTION NO. 26-XXX

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

APPROVING A CONTRACT CHANGE ORDER TO SOUZA CONSTRUCTION FOR THE DOWNTOWN

PARKING LOT REHABILITATION PROJECTS
WHEREAS, the City Council adopted goals and priorities for Fiscal Year (FY) 2022-23 and 2023-24 which included refurbishing two downtown parking lots, one adjacent to Marv’s Pizza and the other at Railroad and 12th Street; and
WHEREAS, construction documents were prepared and bids were solicited for construction, then on April 15, 2025, the construction contract was awarded to Souza Construction; and WHEREAS, several unforeseen circumstances resulted in the need for a change order, and were encountered during construction, including that: work needing to be completed in stages, so as not to disrupt operations and access to the surrounding businesses; PG&E changed their procedures and required separate systems to be installed for providing power to irrigation and the electrical charging stations; the surface of the parking lot at 12th Street was uneven to provide a smooth surface to meet minimum American’s with Disability Act (ADA) slopes and gradient standards, and additional asphalt materials were required; charging station equipment required additional work and appurtenances, so that the work would qualify for reimbursement, as directed by the Air Pollution District; and during excavation numerous old concrete chunks and debris were discovered and removed to meet compaction requirements; and
WHEREAS, given the operational importance of the project and the need to maintain construction momentum, City staff authorized the contractor to proceed with certain additional work prior to formal City Council approval to minimize schedule disruptions and overall project impacts; and WHEREAS, these conditions resulted in the need for a change order in the amount of $360,000 to Souza Construction’s contract.

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. Authorize the City Manager to approve a contract change order of $360,000 to Souza Construction for the repairs to the Downtown Parking Lots for a total not-to-exceed contract amount of $1,389,955.

Section 3. Authorize the additional appropriations from General Fund reserves in the amount of $258,857.

Section 4. The City Council finds that this action is categorically exempt from the California Environmental Quality Act (“CEQA”) under the Class 1 exemption, which applies to the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing structures, facilities, mechanical equipment, or topographical features where the project involves negligible or no expansion of existing or former use (State CEQA Guidelines, § 15301).

Attachment 1
CC Resolution 26-XXX Page 2 of 2
APPROVED this 19th day of May, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

John R. Hamon, Jr., Mayor
ATTEST:

Melissa Martin, City Clerk

Council Agenda Report
From: Piper Smith, Assistant Planner
Subject: Second Reading by Title Only and Adoption of Ordinance 1171 N.S. to Amend Paso Robles Municipal Code Section 21.69.120, Food Trucks and Food Truck Courts; Chapter 21.20, Temporary Use Permits; Table 21.32-1, Zoning District Use Regulations; Section 21.91.

CEQA Determination: The proposed ordinance is not subject to the California Environmental Quality Act (CEQA) because it does not qualify as a “project” under CEQA.

State CEQA Guidelines §15060(c) provides that “[a]n activity is not subject to CEQA if … the activity is not a project as defined in Section 15378” and, alternatively, is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) as it can be seen with certainty that there is no possibility that the proposed ordinance may have a significant effect on the environment.

Date: May 19, 2026
Facts

1. On October 1, 2024, City Council approved a variety of updates to the Paso Robles Zoning Code, Title 21 of the Paso Robles Municipal Code (PRMC), including updates to PRMC Section 21.69.120, “Food Trucks and Food Truck Courts.” This section of the municipal code establishes the permit requirements and operational standards for food trucks operating within the City limits. The rules codified staff policy on food trucks that had existed since 2019.

2. All food trucks are required to comply with the operational requirements of Section 21.69.120, have a valid City business license, and have an active County of San Luis Obispo Environmental Heath Permit.

3. In addition to the above requirements, food trucks operating at one location for more than seven days in a calendar year are required to obtain a Temporary Use Permit (TUP) and must meet the findings provided in PRMC Section 21.20.070, “Findings for Approval and Revocation” of Temporary Use Permits.

4. On August 5, 2025, City Council discussed a ‘Legislative Update and Review Regarding Food Truck Regulations.’ Staff presented the current permitting process as well as some of the challenges in enforcing the food truck standards and permitting requirements due to ambiguity in the municipal code. Members of the public were invited to participate in the discussion and provided feedback.

5. The City Council voted to establish an Ad Hoc Committee of the City Council to be comprised of Councilmember Gregory and Councilmember Bausch to address food truck regulations and report back to City Council within six months with recommendations for future action based on the discussion.

6. The first Food Truck Regulation Review City Council Ad Hoc Committee meeting was held on September 22, 2025. The second Food Truck Regulation Review City Council Ad Hoc Committee meeting was held on November 12, 2025.

7. On December 16, 2025, Staff reported the findings and recommendations made at the second Food Truck Regulation Review City Council Ad Hoc Committee back to City Council for review and formal

recommendations. City Council provided specific direction to staff regarding operational requirements effective immediately:
a. Food trucks will utilize generator acoustic panels to protect adjacent land uses and the public right-of-way from excessive noise and to comply with the Noise Ordinance. b. Accessory furniture is not permitted:
i. In the public right of way (e.g., sidewalk or parkways), or ii. Where it will obstruct circulation, ingress, or egress c. The following accessory furniture is permitted:
i. 1 shade structure, no more than 120 square feet in size; and ii. Table(s) totaling no more than 24 square feet in size; and iii. 8 chairs
d. Require a minimum setback of 9 feet (half the length of an uncovered parking space) for food trucks with service windows facing the public right-of-way. No setback is required for food truck service window facing internally into the commercial lot. Shade canopies, tables, and chairs are allowed within the food truck setback. Allow the Zoning Administrator to increase or decrease setback requirements for individual Temporary Use Permits to account for unique site configurations.
e. Temporary Use Permits will not be granted on private property within 100 feet of City Park.

8. The City Council also recommended an amendment to PRMC Section 21.69.120 to:
a. Require a Temporary Use Permit (TUP) for ALL food trucks operating in the City and vending to the public. Exception - food trucks operating as a caterer for a special event are not required to have a TUP, and;
b. Require on-site commercial businesses hosting more than 7 special events that include a food truck in a year to obtain a Temporary Use Permit.

9. On April 14, 2026, on a vote of 5-0, the Planning Commission adopted Resolution PC 26-022 to recommend the City Council adopt an Ordinance approving Rezone 25-08 to amend Paso Robles Municipal Code Section 21.69.120 (Food Trucks and Food Truck Courts), Chapter 21.20 (Temporary Use Permits), Table 21.32-1 (Zoning District Use Regulations), and Section 21.91.070 (“F” Definitions); and Specific Plan Amendment 26-02 to amend Uptown/Town Centre Specific Plan (UTCSP) Table 5.3- 1 (Allowed Land Uses and Permitting Requirements), based on findings.

10. On May 5, 2026, on a vote of 5-0, the City Council introduced for first reading, by Title Only an Ordinance to amend Paso Robles Municipal Code Section 21.69.120, Food Trucks and Food Truck Courts; Chapter 21.20, Temporary Use Permits; Table 21.32-1, Zoning District Use Regulations; Section

21.91.070, “F” Definitions; and Uptown/Town Centre Specific Plan Table 5.3-1, Allowed Land Uses and Permitting Requirements, and held a public hearing on the Ordinance.

Community Outreach
The following list details the outreach efforts that were made to notify the public of changes to food truck regulations:
 August 5, 2025, City Council discussion of Legislative Update and Review Regarding Food Truck Regulations
 Bilingual updates to the City website at www.prcity.com/foodtrucks  Food-truck specific messaging on the public information kiosk in the lobby of City Hall  Creation of bilingual informational flyers regarding food truck regulations and policies  Creation of a “Notify Me” list for email updates about Food Trucks  September 11, 2025 staff presentation to the Paso Robles Hispanic Business Association

 Establishment of the Food Truck Ad Hoc Committee, which held public meetings on September 22, 2025 and November 12, 2025.
 City Council discussion of the Food Truck Ad Hoc Committee recommendations on December 16, 2025.
 April 14, 2026 Planning Commission public hearing regarding this Zoning Ordinance Amendment and Specific Plan Amendment.

Options

1. Take no action, which will leave the existing Zoning Ordinance and Uptown/Town Centre Specific Plan unchanged;

2. Adopt Ordinance 1171 N.S to Amend Paso Robles Municipal Code Section 21.69.120, Food Trucks and Food Truck Courts; Chapter 21.20, Temporary Use Permits; Table 21.32-1, Zoning District Use Regulations; Section 21.91.070, “F” Definitions; and Uptown/Town Centre Specific Plan Table 5.3-1, Allowed Land Uses and Permitting Requirements;

3. Make modifications to Ordinance 1171 N.S and direct staff to bring back to City Council for first reading;

4. Provide alternative direction for Staff
Analysis and Conclusions
The proposed ordinance amendments are intended to clarify, modernize, and improve the administration and enforcement of the City’s food truck regulations while continuing to support small business activity and protect surrounding neighborhoods and commercial areas. Over the past year, the City Council, Food Truck Regulation Ad Hoc Committee, Planning Commission, staff, food truck operators, business owners, and members of the public have participated in an extensive public review process to evaluate the City’s existing regulations and identify areas requiring additional clarity or consistency. Through that process, the City identified operational concerns related to permitting thresholds, noise, seating and accessory structures, setbacks, and overall enforceability of the current regulations.

The proposed amendments establish a more streamlined and enforceable permitting framework by requiring Temporary Use Permits for food trucks vending to the public on private property, while continuing to allow reasonable flexibility for catering operations and City-sponsored events. The amendments also align permit durations with the City’s business license cycle, clarify operational standards, update fire inspection procedures, and remove outdated or duplicative code provisions.

Collectively, these changes are intended to provide clearer expectations for operators, improve coordination between City departments, and create a more consistent regulatory structure moving forward.

In addition, the ordinance amendments maintain the City’s existing policy approach of allowing food trucks in appropriate commercial and mixed-use zoning districts while ensuring that operations remain compatible with surrounding land uses. The proposed operational standards regarding generator noise, furniture placement, setbacks, and proximity to City parks are intended to balance economic activity with pedestrian safety, circulation, noise mitigation, and neighborhood compatibility.

Following introduction and first reading of the ordinance on May 5, 2026, staff is returning the item for second reading and adoption. There have been no changes to the proposed amendments since first reading and provides a reasonable and balanced regulatory framework that improves clarity, consistency, and enforceability of the City’s food truck regulations while continuing to support food truck operations throughout the community.

Fiscal Impact
The zoning code and specific plan amendment would not directly impact the City’s fiscal resources.

CEQA
The proposed ordinance is not subject to the California Environmental Quality Act (CEQA) because it does not qualify as a “project” under CEQA. State CEQA Guidelines §15060(c) provides that “[a]n activity is not subject to CEQA if … the activity is not a project as defined in Section 15378” and, alternatively, is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) as it can be seen with certainty that there is no possibility that the proposed ordinance may have a significant effect on the environment.

Recommendation (Option 2)
Approve the second reading by title only and adopt Ordinance 1171 N.S to Amend Paso Robles Municipal Code Section 21.69.120, Food Trucks and Food Truck Courts; Chapter 21.20, Temporary Use Permits; Table

21.32-1, Zoning District Use Regulations; Section 21.91.070, “F” Definitions; and Uptown/Town Centre Specific Plan Table 5.3-1, Allowed Land Uses and Permitting Requirements.

Attachments

1. Ordinance 1171 N.S - Amendment to Paso Robles Municipal Code and Uptown/Town Centre Specific Plan – Redlined

2. Ordinance 1171 N.S. - Amendment to Paso Robles Municipal Code and Uptown/Town Centre Specific Plan - Final

Attachment 1
ORDINANCE NO. 1171 N.S.

AN ORDINANCE OF THE CITY OF EL PASO DE ROBLES
AMENDING PASO ROBLES MUNICIPAL CODE SECTION 21.69.120 (FOOD TRUCKS AND FOOD TRUCK COURTS), CHAPTER 21.20 (TEMPORARY USE PERMITS), TABLE 21.32-1 (ZONING DISTRICT USE REGULATIONS), SECTION 21.91.070 (“F” DEFINITIONS); AND UPTOWN/TOWN CENTRE SPECIFIC PLAN TABLE 5.3-1 (ALLOWED LAND USES AND PERMITTING REQUIREMENTS),

AND FINDING THE ACTION NOT A PROJECT SUBJECT TO CEQA
WHEREAS, on October 1, 2024, City Council approved a variety of updates to the Paso Robles Zoning Code, Title 21 of the Paso Robles Municipal Code (PRMC), including updates to PRMC Section 21.69.120, “Food Trucks and Food Truck Courts”. This section of the municipal code establishes the permit requirements and operational standards for food trucks operating within the City limits. The rules codified staff policy on food trucks that had existed since 2019; and WHEREAS, all food trucks are required to comply with the operational requirements of Section

21.69.120, have a valid City business license, and have an active County of San Luis Obispo Environmental Heath Permit; and
WHEREAS, food trucks operating at one location for more than seven days in a calendar year are required to obtain a Temporary Use Permit (TUP) and must meet the findings provided in PRMC Section 21.20.070, “Findings for Approval and Revocation” of Temporary Use Permits; and WHEREAS, on August 5, 2025, City Council discussed a ‘Legislative Update and Review Regarding Food Truck Regulations’. Staff presented the current permitting process as well as some of the challenges in enforcing the food truck standards and permitting requirements due to ambiguity in the municipal code. Members of the public were invited to participate in the discussion and provided feedback. The City Council voted to establish an Ad Hoc Committee of the City Council to be comprised of Councilmember Gregory and Councilmember Bausch to address food truck regulations and report back to City Council within 6 months with recommendations for future action based on the discussion; and
WHEREAS, the first Food Truck Regulation Review City Council Ad Hoc Committee meeting was held on September 22, 2025. The priority of the meeting was to gather more in-depth feedback from the public. The meeting had a high level of participation from the public. Ad hoc committee members directed staff to collect additional information on the following topics:
a. Generators that can meet Noise Ordinance requirements, b. Comparison of the current food truck policies listed on the City’s website and the standards in the Zoning Ordinance,
c. Clarification on Fire inspection requirements,
d. Additional information on complaints received by the City regarding food trucks, e. Policies and options for food trucks utilizing tables, chairs, and shade structures, and
f. Clarification of how the 7-day rule applies to food trucks hired to serve food at special events (not operated by the City); and
WHEREAS, the second Food Truck Regulation Review City Council Ad Hoc Committee meeting was held on November 12, 2025. The priority of the meeting was to report back on topics brought to

Attachment 1
light at the first ad hoc meeting. This included details of previous food truck complaints, providing clear and concise rules that align with other departments’ requirements, and additional information on fire department inspections. Staff also provided draft recommendations to gather feedback from the Ad Hoc Committee members and from the public. Ad hoc committee members made recommendations for the following topics:
a. Generator Noise,
b. Accessory Furniture,
c. Temporary Use Permit permitting requirements,
d. Setbacks, and
e. Proximity to Downtown; and
WHEREAS, on December 16, 2025, Staff reported the findings and recommendations made at the second Food Truck Regulation Review City Council Ad Hoc Committee back to City Council for review and formal recommendations. City Council provided specific direction to staff regarding operational requirements effective immediately:
a. Food trucks will utilize generator acoustic panels to protect adjacent land uses and the public right-of-way from excessive noise and to comply with the Noise Ordinance. b. Accessory furniture is not permitted:
i. In the public right of way (e.g., sidewalk or parkways), or ii. Where it will obstruct circulation, ingress, or egress c. The following accessory furniture is permitted:
i. 1 shade structure, no more than 120 square feet in size; and ii. Table(s) totaling no more than 24 square feet in size; and iii. 8 chairs
d. Require a minimum setback of 9 feet (half the length of an uncovered parking space) for food trucks with service windows facing the public right-of-way. No setback is required for food truck service window facing internally into the commercial lot.

Shade canopies, tables, and chairs are allowed within the food truck setback. Allow the Zoning Administrator to increase or decrease setback requirements for individual Temporary Use Permits to account for unique site configurations. e. Temporary Use Permits will not be granted on private property within 100 feet of City Park; and
WHEREAS, the City Council also recommended an amendment to PRMC Section 21.69.120 to:
a. Require a Temporary Use Permit (TUP) for ALL food trucks operating in the City and vending to the public. Exception - food trucks operating as a caterer for a special event are not required to have a TUP, and
b. Require on-site commercial businesses hosting more than 7 special events that include a food truck in a year to obtain a Temporary Use Permit; and WHEREAS, on April 14, 2026, on a vote of 5-0, the Planning Commission adopted Resolution PC 26-022 to recommend the City Council adopt Ordinance XXXX to approve Rezone 25-08 to amend Paso Robles Municipal Code Section 21.69.120 (Food Trucks and Food Truck Courts), Chapter

21.20 (Temporary Use Permits), Table 21.32-1 (Zoning District Use Regulations), and Section

21.91.070 (“F” Definitions); and Specific Plan Amendment 26-02 to amend Uptown/Town Centre Specific Plan (UTCSP) Table 5.3-1 (Allowed Land Uses and Permitting Requirements), based on findings (P25-0070); and

Attachment 1
WHEREAS, the City Council held a duly noticed public hearing May 5, 2026 to consider the facts as presented in the staff report prepared for this purpose, and to accept public testimony regarding this proposed text amendment to the Paso Robles Municipal Code and Specific Plan Amendment to the Uptown/Town Centre Specific Plan; and
WHEREAS, on May 5th , 2026, on a vote of 5-0, City Council introduced by title only and waived further reading of Ordinance 1171 N.S to approve Rezone 25-08 to amend Paso Robles Municipal Code Section 21.69.120 (Food Trucks and Food Truck Courts), Chapter 21.20 (Temporary Use Permits), Table 21.32-1 (Zoning District Use Regulations), and Section 21.91.070 (“F” Definitions); and Specific Plan Amendment 26-02 to amend Uptown/Town Centre Specific Plan (UTCSP) Table

5.3-1 (Allowed Land Uses and Permitting Requirements), based on findings (P25-0070); and WHEREAS, the proposed ordinance is not subject to the California Environmental Quality Act (CEQA) because it does not qualify as a “project” under CEQA. State CEQA Guidelines §15060(c) provides that “[a]n activity is not subject to CEQA if … the activity is not a project as defined in Section 15378” and, alternatively, is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) as it can be seen with certainty that there is no possibility that the proposed ordinance may have a significant effect on the environment.

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

Section 1. The recitals set forth above are hereby adopted as the findings of the City Council in connection with the adoption of this ordinance. In support of the recitals stated above, the City Council hereby finds and determines that it is necessary to adopt an ordinance to establish permitting guidelines and operational requirements to be consistent with the General Plan, Municipal Code, and Uptown/Town Centre Specific Plan and to protect the public interest health, safety, and welfare.

Section 2. The City Council hereby makes the following findings with respect to the proposed amendment of Title 21 of the Municipal Code and the Uptown/Town Centre Specific Plan:

1. The proposed amendment is consistent with the General Plan and any applicable specific plan;
a. The proposed amendment is consistent with the goals, objectives, and policies of the General Plan Land Use as this amendment accommodates for food trucks as a permitted commercial use on commercially zoned properties. This amendment maintains the ability to provide the public access to a commercial good while maintaining aesthetic appeal of City viewsheds and gateways.

2. The proposed amendment will not be detrimental to the public interest, health, safety, convenience, or welfare;
a. The proposed amendment requires food trucks vending to the public to obtain a temporary use permit issued through the Community Development Department.

This provision allows staff to review food trucks in a site-specific context. In addition, food truck temporary use permits are reviewed by the Fire Department, Industrial Wastewater Division, and is required to have a County of San Luis Obispo Health permit. All food trucks operating within City limits are required to abide by the operational requirements listed in Paso Robles Municipal Code

Attachment 1
Section 21.69.120 (Food Trucks and Food Truck Courts) to ensure the food trucks are not detrimental to public health and safety.

3. The proposed amendment is internally consistent with other applicable provisions of the zoning code.
a. In addition to the City Council’s recommendation to amend Paso Robles Municipal Code Section 21.69.120 (Food Truck and Food Truck Courts). Staff has proposed amendments to Chapter 21.20 (Temporary Use Permits), Table 21.32- 1 (Zoning District Use Regulations), and Section 21.91.070 (“F” Definitions); and Uptown/Town Centre Specific Plan (UTCSP) Table 5.3-1 (Allowed Land Uses and Permitting Requirements) to ensure consistent language and regulation of food trucks and food truck courts throughout the Zoning Code and Uptown/Town Centre Specific Plan.

4. The adoption of the proposed Ordinance is not subject to the California Environmental Quality Act (CEQA) because it does not qualify as a “project” under CEQA. State CEQA Guidelines §15060(c) provides that “[a]n activity is not subject to CEQA if … the activity is not a project as defined in Section 15378” and, alternatively, is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) as it can be seen with certainty that there is no possibility that the proposed ordinance may have a significant effect on the environment.

Section 3. Section 21.69.120 of the Paso Robles Municipal Code is hereby amended in its entirety to read in full as follows:

21.69.120 Food trucks and food truck courts.

A. Purpose and Applicability. The purpose of this section is to ensure that food trucks are compatible with surrounding and adjacent uses and do not create an adverse impact on adjacent properties by reason of noise, parking, and litter.

B. Special Events that Include Food Trucks. The provisions of this section shall not apply to persons operating a food truck as part of a certified farmer's market, an authorized street fair or other event occurring under a special permit issued by the City of Paso Robles, or as allowed by the City in city parks provided that the food truck is part of the event and is complying with all terms of the permit or permits issued for the event.

C. Caterer. The provisions of Paragraph 21.69.120.D.1 (Temporary Use Permit Required) shall not apply to a food truck operating as a caterer (invited by a commercial business to provide food and/or beverages at a commercial business site) at a special event or events for up to 7 days in a fiscal year (July 1 – June 30), if only one food truck is operating at the special event or events at a time. Catering food trucks shall comply with Subsection 21.69.120.F (Operational Requirements for All Food Trucks).

D. Permit Requirements Food Trucks. All food trucks shall comply with the operational requirements of Subsection 21.69.120.F (Operational Requirements for All Food Trucks). In addition, the following Zoning Approvals are required.

1. Food Truck (single vehicle operating in one location seven days or less). Temporary food trucks lasting less than seven days in a single location are subject to the requirements of Subsection 21.69.120(D) (Operational Requirements for Food Trucks).

Attachment 1

2. Food Truck (single vehicle operating in one location more than seven days but less than one year). Temporary food trucks lasting seven or more days (not to exceed one year) in a single location require approval of a temporary use permit (Chapter 21.20). No temporary use permit shall be issued for a food truck unless it conforms to the requirements of Subsections 21.69.120(D) (Operational Requirements for Food Trucks).

3. Food Truck (single vehicle operating in one location one year or more). Temporary food trucks operating for more than one year in a single location shall not operate without the approval of a site plan (Chapter 21.17). Applications for a food truck shall conform to the requirements of Subsections 21.69.120(D) (Operational Requirements for Food Trucks).

4. Food Truck Court (two or more). Two or more food trucks located on the same property require approval of a conditional use permit (Chapter 21.19). Applications for a food truck court shall conform to the requirements of this Subsection 21.69.120(D) (Operational Requirements for Food Trucks).

1. Temporary Use Permit Required.
a. Food Trucks. Food trucks shall not operate without approval of a Temporary Use Permit (Chapter 21.20). No Temporary Use Permit shall be issued for a food truck unless it conforms to the requirements of Subsection 21.69.120.E (Temporary Use Permits for Food Trucks) and Subsection 21.69.120.F (Operational Requirements for Food Trucks).
b. Commercial Business Sites. A commercial business site shall require approval of a Temporary Use Permit (Chapter 21.20) if the site hosts catering food trucks, as defined and regulated in Subsection 21.69.120.C, at a special event or events for more than 7 days in a fiscal year.

2. Conditional Use Permit Required. Food Truck Courts require approval of a Conditional Use Permit (Chapter 21.19). Applications for a Conditional Use Permit shall demonstrate permanent improvements to accommodate the Food Truck Court and shall conform to the requirements of Subsection 21.69.120.F (Operational Requirements for Food Trucks) to the satisfaction of the Review Authority.

E. Temporary Use Permits for Food Trucks. In addition to the standards in Chapter 21.20 (Temporary Use Permits), Temporary Use Permits for Food Trucks shall be subject to the following:

1. Duration. Food Truck Temporary Use Permits shall last no more than 365 days and shall expire at the end of the fiscal year (as defined by Section 3.28.200 (Business license tax— How and when payable)) in which it is issued.

2. Payment. Food Truck Temporary Use Permits are subject to the adopted fee for a Temporary Use Permit and are not prorated for portions of a fiscal year.

3. Sites. Up to two (2) specific locations included in a single submittal for a Food Truck Temporary Use Permit application are eligible to be reviewed and included in the issuance of the permit.

F. Operational Requirements for Food Trucks. All food trucks shall comply with the following requirements:

1. Private Property. Food trucks shall operate only on private property with an existing commercial use and only as an accessory use to an existing business.

2. Written Approval of Owner. The written approval of the owner of the location shall be obtained. A copy of this approval shall be provided to the zoning administrator with the permit application, prior to operating at the location. The vendor shall maintain

Attachment 1
proof of the owner's approval in the vehicle. The person operating the food truck shall present this proof upon the demand of a peace officer or city employee authorized to enforce.

3. Permanent Surface Parking. The food truck shall only be stopped, standing, or parked on a permanent surface paved with concrete, asphalt, or similar as determined by the review authority.

4. Litter Removal. Each vendor shall provide adequate garbage receptacles accessible to customers for disposal of garbage. The food truck and surrounding property shall be maintained in a safe and clean manner at all times. The mobile vendor shall remove litter caused by its products from any public and private property within a twenty-fivefoot radius of the food truck's location.

5. No Discharge of Liquid. The vendor shall not discharge any liquid (e.g., water, grease, oil, etc.) onto or into city streets, storm drains, catch basins, or sewer facilities. All discharges shall be contained and properly disposed of by the vendor.

6. Temporary Shade Structures. Temporary shade structures shall be removed whenever the food truck is not in operation.

6. Noise. The vendor shall be subject to the noise provisions set forth in Chapter

21.82 (Noise). The operation shall at all times be conducted in a manner not detrimental to surrounding properties or residents by reason of lights, noise, activities, parking, or other actions. The vendor shall prohibit loitering at the site and shall control noisy patrons on-site and those leaving the premises. No amplified music or loudspeakers shall be permitted.

7. Hours of Operation. Food truck vending hours shall be established by the review authority with the required permit.

8. Business License Required. The vendor shall have a valid business license issued by the city pursuant to Municipal Code Title 5 (Permits and Regulations)Title 3, Chapter

3.28 (Business License Tax). As part of its application for a business license, the vendor shall furnish to the city evidence of insurance, as deemed acceptable in the reasonable discretion of the city, against liability for death or injury to any person as a result of ownership, operation, or use of its food truck.

9. Health Permit Required for Food Sales. Vendors operating a food trucks shall have a valid permit issued by the San Luis Obispo County Health Agency. All required county health permits shall be in the possession of the mobile food vendor at all times during which it operates within the city.

10. Fire Department Inspection. All food trucks shall be inspected and approved by the Paso Robles Fire and Emergency Services Department a jurisdiction within the Central Coast Fire Prevention Association (CCFPA) prior to issuance of its initial business license and from time to time thereafter in the discretion of the Paso Robles Fire and Emergency Services Department a jurisdiction within the CCFPA. At a minimum, all cooking equipment producing grease-laden vapors shall be protected by a UL 300 listed automatic fire extinguishing system. A Class K fire extinguisher shall be provided within each vending vehicle at an accessible location. All fire protection equipment shall be properly maintained and serviced at intervals required by the California Fire Code.

11. Circulation. Food trucks and trailers and associated equipment (such as tables, chairs, garbage receptacles, etc.) shall not alter the circulation pattern of parking lots nor shall they be parked in restricted areas marked for "no parking", "fire lane", etc.

12. Egress. Food trucks shall not block egress from a building.

Attachment 1

13. Equipment Storage. Food trucks and associated equipment shall not be stored overnight at the location of vending.

14. Conditions of Approval. Food trucks shall comply with all conditions of approval required by the review authority approving a temporary use permit, site plan, or conditional use permit.

Section 4. Chapter 21.20.020 of the Paso Robles Municipal Code is hereby amended in its entirety to read in full as follows:

21.20.020 Exempt temporary uses. The following uses do not require a temporary use Permit:

A. Seasonal stands (such as pumpkin and Christmas tree sales) without a caretaker unit lasting up to ninety days.

B. Construction offices in conjunction with construction of a building or other approved development project.

C. Parking lot sales and other promotional events where only on-site businesses are participating and lasting no more than seven days.

D. Garage and rummage sales (subject to Section 21.20.040).

E. Single food truck operating in one location less than seven days (subject to Section 21.69.120).

F. Temporary food service (such as barbecues) when located at the business's permanent location or in conjunction with a non-profit fundraising event lasting less than seven days.

G. Sidewalk vending (subject to Subsection 21.20.040.B).

Section 5. Chapter 21.20.030 of the Paso Robles Municipal Code is hereby amended in its entirety to read in full as follows:

21.20.030 Allowed temporary uses.

A. The following activities may be approved by a temporary use permit:

1. Real estate sales offices (within approved development projects).

2. Parking lot sales and other promotional events where only on-site businesses are participating and lasting seven or more days (if less than seven days, no temporary use permit is required).

3. Trailers/temporary buildings in conjunction with an existing on-site business and remaining no more than one year twelve months.

4. Single food truck operating in one location seven or more days but not no more than one year (subject to Section 21.69.120).

5. Temporary food service (such barbecues) when located at the business' permanent location or in conjunction with a non-profit fundraising event lasting seven or more days.

6. Seasonal stands (such as pumpkin and Christmas tree sales) with a caretaker unit lasting up to ninety days.

7. Circuses, carnivals, fairs, festivals, and concerts lasting up to thirty days.

8. Off-site construction yards with a valid building permit (no temporary use permit is required if on an immediately adjacent property).

9. Similar temporary uses as determined by the zoning administrator.

B. Temporary Uses Requiring an Administrative Use Permit. Other temporary events and special events, outdoor sales, and displays may be allowed with the approval of an administrative use permit pursuant to Chapter 21.19 (Conditional Use Permits and

Attachment 1
Administrative Use Permits) so long as they are determined to not impact neighboring uses or otherwise create significant impacts.

Section 6. Section 21.91.070 of the Paso Robles Municipal Code is hereby amended in its entirety to read in full as follows:
“21.91.070 "F" definitions.

Family Day Care Home. A day-care facility for children under the age of eighteen for periods of fewer than twenty-four hours a day licensed by the state, which is located in a dwelling unit, where a resident of the dwelling provides care and supervision for fourteen or fewer children (or capacity limits as set forth by the state, including children who reside at the home and are under the age of ten. See Health and Safety Code Section 1596.78. For larger and commercial facilities see "Day Care Center".

Farmers' Market. See "certified farmers market and year-round roadside produce stands".

Financial Institutions. A bank, savings and loan, credit union, or other financial institution that provides retail banking services to individuals and businesses. These uses include only those institutions engaged in the on-site circulation of cash money. Does not include check cashing stores.

Food and Beverage Sales. Retail sales of food and beverages for off-site preparation and consumption including groceries, supermarkets, mini-marts, delis, liquor stores, specialty food stores.

Food and Kindred Products Processing. Facilities that cook, manufacture, package, label, or store food and related products including animal processing for consumption off site but do not provide products directly to a consumer. Uses do not include any retail components unless such retail sales are permitted in the applicable zoning district. This use classification excludes "wineries, breweries and distilleries", which is defined separately. see also "industrial - artisan" for small scale facilities that include onsite sales.

Food Truck. A vending vehicle or mobile food facility selling food and/or beverages in an operable motorized coach or trailer with current department of motor vehicles registration and a current food safety permit acceptable to the San Luis Obispo County Environmental Health Services Division.

Food Truck Court. An area designated for two or more food trucks to park for the purpose of selling food and beverages.

Fuel Sales. See "vehicle fuel sales" and "vehicle charging station".

Funeral Services. An establishment primarily engaged in the provision of services involving the care, preparation, or disposition of human remains and conducting memorial services. Typical uses may include crematories, columbaria, mausoleums, mortuaries, funeral chapels, and funeral homes.

Section 7. “Food Truck” line item within Table 21.16.200 of Title 21, Chapter 21.32 of the Paso Robles Municipal Code is amended by modifying the permit requirements on the chart to accurately reflect the amended permit requirements of Chapter 21.69.120 (Food Trucks and Food Truck Courts) to read as follows:

Table 21.32-1: Zoning District Use Regulations (portion) Land Uses R-A R-1 R-2 R-3 R-4 R-5 OP CP C-1 C-2 C-3 RC RL M PM AP AG POS OS PF Specific Use Regulations

Attachment 1
Food truck
— — — — — — —
P/
T*
T
P/
T*
T
P/
T*
T
P/
T*
T
P/
T*
T
P/
T*
T
P/
T
T
P/
T*
T
P/
T*
T
— — — —
See
Section 21.69.120 (Food
Trucks and Food Truck
Courts)
*Permits for one year or
more require a site plan
review (Chapter 21.17)
Section 8. A portion of Table 5.3-1 of the Uptown/Town Centre Specific Plan is amended by adding “Food Truck” and “Food Truck Court” line items to accurately reflect the amended permit requirements of Chapter 21.69.120 (Food Trucks and Food Truck Courts) to read as follows:

Table 5.3-1: Allowed Land Uses and Permit Requirements (Uptown Town Centre Specific Plan) (portion)
Land Use Type PERMIT REQUIREMENTS BY ZONE Specific Use
Regulations
T3-N T3-F T4-N T4-F T4-NC TC-1 TC-2 RSC OS
Family day care
center for
more than 14
children or
non-family day
care center

CUP CUP CUP CUP CUP - - CUP -
Food Truck - TUP - TUP TUP TUP TUP TUP - See Paso Robles Municipal Code
Section 21.69.120
(Food Trucks and
Food Truck Courts)
Food Truck
Court
- CUP - CUP CUP CUP CUP CUP - See Paso Robles
Municipal Code
Section 21.69.120
(Food Trucks and
Food Truck Courts)
Meeting
Facilities,
public or
private

CUP CUP CUP CUP CUP CUP CUP CUP CUP
Section 9. This Ordinance shall be effective thirty days from the date of its adoption.

Section 10. The City Clerk shall certify to the adoption of this Ordinance and shall post or publish this Ordinance as required by law.

Section 11. The adoption of the proposed Ordinance is not subject to the California Environmental Quality Act (CEQA) because it does not qualify as a “project” under CEQA. State CEQA Guidelines §15060(c) provides that “[a]n activity is not subject to CEQA if … the activity is

Attachment 1
not a project as defined in Section 15378” and, alternatively, is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) as it can be seen with certainty that there is no possibility that the proposed ordinance may have a significant effect on the environment.

Section 12. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance, or the application thereof to any person or place, is for any reason held to be unconstitutional or invalid by the decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or its application to other persons or places.

Introduced at a regular meeting of the City Council held on the 5th day of May 2026, and passed and adopted by the City Council of the City of El Paso de Robles on the 19th day of May, 2026 by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
__________________________________
John R. Hamon, Jr., Mayor
ATTEST:
_________________________________
Melissa Martin, City Clerk

Attachment 2
ORDINANCE NO. 1171 N.S.

AN ORDINANCE OF THE CITY OF EL PASO DE ROBLES
AMENDING PASO ROBLES MUNICIPAL CODE SECTION 21.69.120 (FOOD TRUCKS AND FOOD TRUCK COURTS), CHAPTER 21.20 (TEMPORARY USE PERMITS), TABLE 21.32-1 (ZONING DISTRICT USE REGULATIONS), SECTION 21.91.070 (“F” DEFINITIONS); AND UPTOWN/TOWN CENTRE SPECIFIC PLAN TABLE 5.3-1 (ALLOWED LAND USES AND PERMITTING REQUIREMENTS),

AND FINDING THE ACTION NOT A PROJECT SUBJECT TO CEQA
WHEREAS, on October 1, 2024, City Council approved a variety of updates to the Paso Robles Zoning Code, Title 21 of the Paso Robles Municipal Code (PRMC), including updates to PRMC Section 21.69.120, “Food Trucks and Food Truck Courts”. This section of the municipal code establishes the permit requirements and operational standards for food trucks operating within the City limits. The rules codified staff policy on food trucks that had existed since 2019; and WHEREAS, all food trucks are required to comply with the operational requirements of Section

21.69.120, have a valid City business license, and have an active County of San Luis Obispo Environmental Heath Permit; and
WHEREAS, food trucks operating at one location for more than seven days in a calendar year are required to obtain a Temporary Use Permit (TUP) and must meet the findings provided in PRMC Section 21.20.070, “Findings for Approval and Revocation” of Temporary Use Permits; and WHEREAS, on August 5, 2025, City Council discussed a ‘Legislative Update and Review Regarding Food Truck Regulations’. Staff presented the current permitting process as well as some of the challenges in enforcing the food truck standards and permitting requirements due to ambiguity in the municipal code. Members of the public were invited to participate in the discussion and provided feedback. The City Council voted to establish an Ad Hoc Committee of the City Council to be comprised of Councilmember Gregory and Councilmember Bausch to address food truck regulations and report back to City Council within 6 months with recommendations for future action based on the discussion; and
WHEREAS, the first Food Truck Regulation Review City Council Ad Hoc Committee meeting was held on September 22, 2025. The priority of the meeting was to gather more in-depth feedback from the public. The meeting had a high level of participation from the public. Ad hoc committee members directed staff to collect additional information on the following topics:
a. Generators that can meet Noise Ordinance requirements, b. Comparison of the current food truck policies listed on the City’s website and the standards in the Zoning Ordinance,
c. Clarification on Fire inspection requirements,
d. Additional information on complaints received by the City regarding food trucks, e. Policies and options for food trucks utilizing tables, chairs, and shade structures, and
f. Clarification of how the 7-day rule applies to food trucks hired to serve food at special events (not operated by the City); and
WHEREAS, the second Food Truck Regulation Review City Council Ad Hoc Committee meeting was held on November 12, 2025. The priority of the meeting was to report back on topics brought to

Attachment 2
light at the first ad hoc meeting. This included details of previous food truck complaints, providing clear and concise rules that align with other departments’ requirements, and additional information on fire department inspections. Staff also provided draft recommendations to gather feedback from the Ad Hoc Committee members and from the public. Ad hoc committee members made recommendations for the following topics:
a. Generator Noise,
b. Accessory Furniture,
c. Temporary Use Permit permitting requirements,
d. Setbacks, and
e. Proximity to Downtown; and
WHEREAS, on December 16, 2025, Staff reported the findings and recommendations made at the second Food Truck Regulation Review City Council Ad Hoc Committee back to City Council for review and formal recommendations. City Council provided specific direction to staff regarding operational requirements effective immediately:
a. Food trucks will utilize generator acoustic panels to protect adjacent land uses and the public right-of-way from excessive noise and to comply with the Noise Ordinance. b. Accessory furniture is not permitted:
i. In the public right of way (e.g., sidewalk or parkways), or ii. Where it will obstruct circulation, ingress, or egress c. The following accessory furniture is permitted:
i. 1 shade structure, no more than 120 square feet in size; and ii. Table(s) totaling no more than 24 square feet in size; and iii. 8 chairs
d. Require a minimum setback of 9 feet (half the length of an uncovered parking space) for food trucks with service windows facing the public right-of-way. No setback is required for food truck service window facing internally into the commercial lot.

Shade canopies, tables, and chairs are allowed within the food truck setback. Allow the Zoning Administrator to increase or decrease setback requirements for individual Temporary Use Permits to account for unique site configurations. e. Temporary Use Permits will not be granted on private property within 100 feet of City Park; and
WHEREAS, the City Council also recommended an amendment to PRMC Section 21.69.120 to:
a. Require a Temporary Use Permit (TUP) for ALL food trucks operating in the City and vending to the public. Exception - food trucks operating as a caterer for a special event are not required to have a TUP, and
b. Require on-site commercial businesses hosting more than 7 special events that include a food truck in a year to obtain a Temporary Use Permit; and WHEREAS, on April 14, 2026, on a vote of 5-0, the Planning Commission adopted Resolution PC 26-022 to recommend the City Council adopt Ordinance XXXX to approve Rezone 25-08 to amend Paso Robles Municipal Code Section 21.69.120 (Food Trucks and Food Truck Courts), Chapter

21.20 (Temporary Use Permits), Table 21.32-1 (Zoning District Use Regulations), and Section

21.91.070 (“F” Definitions); and Specific Plan Amendment 26-02 to amend Uptown/Town Centre Specific Plan (UTCSP) Table 5.3-1 (Allowed Land Uses and Permitting Requirements), based on findings (P25-0070); and

Attachment 2
WHEREAS, the City Council held a duly noticed public hearing May 5, 2026 to consider the facts as presented in the staff report prepared for this purpose, and to accept public testimony regarding this proposed text amendment to the Paso Robles Municipal Code and Specific Plan Amendment to the Uptown/Town Centre Specific Plan; and
WHEREAS, on May 5th , 2026, on a vote of 5-0, City Council introduced by title only and waived further reading of Ordinance 1171 N.S to approve Rezone 25-08 to amend Paso Robles Municipal Code Section 21.69.120 (Food Trucks and Food Truck Courts), Chapter 21.20 (Temporary Use Permits), Table 21.32-1 (Zoning District Use Regulations), and Section 21.91.070 (“F” Definitions); and Specific Plan Amendment 26-02 to amend Uptown/Town Centre Specific Plan (UTCSP) Table

5.3-1 (Allowed Land Uses and Permitting Requirements), based on findings (P25-0070); and WHEREAS, the proposed ordinance is not subject to the California Environmental Quality Act (CEQA) because it does not qualify as a “project” under CEQA. State CEQA Guidelines §15060(c) provides that “[a]n activity is not subject to CEQA if … the activity is not a project as defined in Section 15378” and, alternatively, is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) as it can be seen with certainty that there is no possibility that the proposed ordinance may have a significant effect on the environment.

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

Section 1. The recitals set forth above are hereby adopted as the findings of the City Council in connection with the adoption of this ordinance. In support of the recitals stated above, the City Council hereby finds and determines that it is necessary to adopt an ordinance to establish permitting guidelines and operational requirements to be consistent with the General Plan, Municipal Code, and Uptown/Town Centre Specific Plan and to protect the public interest health, safety, and welfare.

Section 2. The City Council hereby makes the following findings with respect to the proposed amendment of Title 21 of the Municipal Code and the Uptown/Town Centre Specific Plan:

1. The proposed amendment is consistent with the General Plan and any applicable specific plan;
a. The proposed amendment is consistent with the goals, objectives, and policies of the General Plan Land Use as this amendment accommodates for food trucks as a permitted commercial use on commercially zoned properties. This amendment maintains the ability to provide the public access to a commercial good while maintaining aesthetic appeal of City viewsheds and gateways.

2. The proposed amendment will not be detrimental to the public interest, health, safety, convenience, or welfare;
a. The proposed amendment requires food trucks vending to the public to obtain a temporary use permit issued through the Community Development Department.

This provision allows staff to review food trucks in a site-specific context. In addition, food truck temporary use permits are reviewed by the Fire Department, Industrial Wastewater Division, and is required to have a County of San Luis Obispo Health permit. All food trucks operating within City limits are required to abide by the operational requirements listed in Paso Robles Municipal Code

Attachment 2
Section 21.69.120 (Food Trucks and Food Truck Courts) to ensure the food trucks are not detrimental to public health and safety.

3. The proposed amendment is internally consistent with other applicable provisions of the zoning code.
a. In addition to the City Council’s recommendation to amend Paso Robles Municipal Code Section 21.69.120 (Food Truck and Food Truck Courts). Staff has proposed amendments to Chapter 21.20 (Temporary Use Permits), Table 21.32- 1 (Zoning District Use Regulations), and Section 21.91.070 (“F” Definitions); and Uptown/Town Centre Specific Plan (UTCSP) Table 5.3-1 (Allowed Land Uses and Permitting Requirements) to ensure consistent language and regulation of food trucks and food truck courts throughout the Zoning Code and Uptown/Town Centre Specific Plan.

4. The adoption of the proposed Ordinance is not subject to the California Environmental Quality Act (CEQA) because it does not qualify as a “project” under CEQA. State CEQA Guidelines §15060(c) provides that “[a]n activity is not subject to CEQA if … the activity is not a project as defined in Section 15378” and, alternatively, is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) as it can be seen with certainty that there is no possibility that the proposed ordinance may have a significant effect on the environment.

Section 3. Section 21.69.120 of the Paso Robles Municipal Code is hereby amended in its entirety to read in full as follows:

21.69.120 Food trucks and food truck courts.

A. Purpose and Applicability. The purpose of this section is to ensure that food trucks are compatible with surrounding and adjacent uses and do not create an adverse impact on adjacent properties by reason of noise, parking, and litter.

B. Special Events that Include Food Trucks. The provisions of this section shall not apply to persons operating a food truck as part of a certified farmer's market, an authorized street fair or other event occurring under a special permit issued by the City of Paso Robles, or as allowed by the City in city parks provided that the food truck is part of the event and is complying with all terms of the permit or permits issued for the event.

C. Caterer. The provisions of Paragraph 21.69.120.D.1 (Temporary Use Permit Required) shall not apply to a food truck operating as a caterer (invited by a commercial business to provide food and/or beverages at a commercial business site) at a special event or events for up to 7 days in a fiscal year (July 1 – June 30), if only one food truck is operating at the special event or events at a time. Catering food trucks shall comply with Subsection 21.69.120.F (Operational Requirements for All Food Trucks).

D. Permit Requirements Food Trucks. All food trucks shall comply with the operational requirements of Subsection 21.69.120.F (Operational Requirements for All Food Trucks). In addition, the following Zoning Approvals are required.

1. Temporary Use Permit Required.
a. Food Trucks. Food trucks shall not operate without approval of a Temporary Use Permit (Chapter 21.20). No Temporary Use Permit shall be issued for a food truck unless it conforms to the requirements of Subsection 21.69.120.E (Temporary

Attachment 2
Use Permits for Food Trucks) and Subsection 21.69.120.F (Operational Requirements for Food Trucks).
b. Commercial Business Sites. A commercial business site shall require approval of a Temporary Use Permit (Chapter 21.20) if the site hosts catering food trucks, as defined and regulated in Subsection 21.69.120.C, at a special event or events for more than 7 days in a fiscal year.

2. Conditional Use Permit Required. Food Truck Courts require approval of a Conditional Use Permit (Chapter 21.19). Applications for a Conditional Use Permit shall demonstrate permanent improvements to accommodate the Food Truck Court and shall conform to the requirements of Subsection 21.69.120.F (Operational Requirements for Food Trucks) to the satisfaction of the Review Authority.

E. Temporary Use Permits for Food Trucks. In addition to the standards in Chapter 21.20 (Temporary Use Permits), Temporary Use Permits for Food Trucks shall be subject to the following:

1. Duration. Food Truck Temporary Use Permits shall last no more than 365 days and shall expire at the end of the fiscal year (as defined by Section 3.28.200 (Business license tax— How and when payable)) in which it is issued.

2. Payment. Food Truck Temporary Use Permits are subject to the adopted fee for a Temporary Use Permit and are not prorated for portions of a fiscal year.

3. Sites. Up to two (2) specific locations included in a single submittal for a Food Truck Temporary Use Permit application are eligible to be reviewed and included in the issuance of the permit.

F. Operational Requirements for Food Trucks. All food trucks shall comply with the following requirements:

1. Private Property. Food trucks shall operate only on private property with an existing commercial use and only as an accessory use to an existing business.

2. Written Approval of Owner. The written approval of the owner of the location shall be obtained. A copy of this approval shall be provided to the zoning administrator with the permit application, prior to operating at the location. The vendor shall maintain proof of the owner's approval in the vehicle. The person operating the food truck shall present this proof upon the demand of a peace officer or city employee authorized to enforce.

3. Permanent Surface Parking. The food truck shall only be stopped, standing, or parked on a permanent surface paved with concrete, asphalt, or similar as determined by the review authority.

4. Litter Removal. Each vendor shall provide adequate garbage receptacles accessible to customers for disposal of garbage. The food truck and surrounding property shall be maintained in a safe and clean manner at all times. The mobile vendor shall remove litter caused by its products from any public and private property within a twenty-fivefoot radius of the food truck's location.

5. No Discharge of Liquid. The vendor shall not discharge any liquid (e.g., water, grease, oil, etc.) onto or into city streets, storm drains, catch basins, or sewer facilities. All discharges shall be contained and properly disposed of by the vendor.

6. Noise. The vendor shall be subject to the noise provisions set forth in Chapter

21.82 (Noise). The operation shall at all times be conducted in a manner not detrimental to surrounding properties or residents by reason of lights, noise, activities, parking, or other actions. The vendor shall prohibit loitering at the site and shall control

Attachment 2
noisy patrons on-site and those leaving the premises. No amplified music or loudspeakers shall be permitted.

7. Hours of Operation. Food truck vending hours shall be established by the review authority with the required permit.

8. Business License Required. The vendor shall have a valid business license issued by the city pursuant to Municipal Code Title 3, Chapter 3.28 (Business License Tax).

9. Health Permit Required for Food Sales. Vendors operating a food trucks shall have a valid permit issued by the San Luis Obispo County Health Agency. All required county health permits shall be in the possession of the mobile food vendor at all times during which it operates within the city.

10. Fire Department Inspection. All food trucks shall be inspected and approved by a jurisdiction within the Central Coast Fire Prevention Association (CCFPA) prior to issuance of its initial business license and from time to time thereafter in the discretion of a jurisdiction within the CCFPA. At a minimum, all cooking equipment producing grease-laden vapors shall be protected by a UL 300 listed automatic fire extinguishing system. A Class K fire extinguisher shall be provided within each vending vehicle at an accessible location. All fire protection equipment shall be properly maintained and serviced at intervals required by the California Fire Code.

11. Circulation. Food trucks and trailers and associated equipment shall not alter the circulation pattern of parking lots nor shall they be parked in restricted areas marked for "no parking", "fire lane", etc.

12. Egress. Food trucks shall not block egress from a building.

13. Equipment Storage. Food trucks and associated equipment shall not be stored overnight at the location of vending.

14. Conditions of Approval. Food trucks shall comply with all conditions of approval required by the review authority approving a temporary use permit or conditional use permit.

Section 4. Chapter 21.20.020 of the Paso Robles Municipal Code is hereby amended in its entirety to read in full as follows:

21.20.020 Exempt temporary uses. The following uses do not require a temporary use Permit:

A. Seasonal stands (such as pumpkin and Christmas tree sales) without a caretaker unit lasting up to ninety days.

B. Construction offices in conjunction with construction of a building or other approved development project.

C. Parking lot sales and other promotional events where only on-site businesses are participating and lasting no more than seven days.

D. Garage and rummage sales (subject to Section 21.20.040).

E. Temporary food service (such as barbecues) when located at the business's permanent location or in conjunction with a non-profit fundraising event lasting less than seven days.

F. Sidewalk vending (subject to Subsection 21.20.040.B).

Section 5. Chapter 21.20.030 of the Paso Robles Municipal Code is hereby amended in its entirety to read in full as follows:

21.20.030 Allowed temporary uses.

A. The following activities may be approved by a temporary use permit:

Attachment 2

1. Real estate sales offices (within approved development projects).

2. Parking lot sales and other promotional events where only on-site businesses are participating and lasting seven or more days (if less than seven days, no temporary use permit is required).

3. Trailers/temporary buildings in conjunction with an existing on-site business and remaining no more than one year.

4. Single food truck operating in one location no more than one year (subject to Section 21.69.120).

5. Temporary food service (such barbecues) when located at the business' permanent location or in conjunction with a non-profit fundraising event lasting seven or more days.

6. Seasonal stands (such as pumpkin and Christmas tree sales) with a caretaker unit lasting up to ninety days.

7. Circuses, carnivals, fairs, festivals, and concerts lasting up to thirty days.

8. Off-site construction yards with a valid building permit (no temporary use permit is required if on an immediately adjacent property).

9. Similar temporary uses as determined by the zoning administrator.

B. Temporary Uses Requiring an Administrative Use Permit. Other temporary events and special events, outdoor sales, and displays may be allowed with the approval of an administrative use permit pursuant to Chapter 21.19 (Conditional Use Permits and Administrative Use Permits) so long as they are determined to not impact neighboring uses or otherwise create significant impacts.

Section 6. Section 21.91.070 of the Paso Robles Municipal Code is hereby amended in its entirety to read in full as follows:
“21.91.070 "F" definitions.

Family Day Care Home. A day-care facility for children under the age of eighteen for periods of fewer than twenty-four hours a day licensed by the state, which is located in a dwelling unit, where a resident of the dwelling provides care and supervision for fourteen or fewer children (or capacity limits as set forth by the state, including children who reside at the home and are under the age of ten. See Health and Safety Code Section 1596.78. For larger and commercial facilities see "Day Care Center".

Farmers' Market. See "certified farmers market and year-round roadside produce stands".

Financial Institutions. A bank, savings and loan, credit union, or other financial institution that provides retail banking services to individuals and businesses. These uses include only those institutions engaged in the on-site circulation of cash money. Does not include check cashing stores.

Food and Beverage Sales. Retail sales of food and beverages for off-site preparation and consumption including groceries, supermarkets, mini-marts, delis, liquor stores, specialty food stores.

Food and Kindred Products Processing. Facilities that cook, manufacture, package, label, or store food and related products including animal processing for consumption off site but do not provide products directly to a consumer. Uses do not include any retail components unless such retail sales are permitted in the applicable zoning district. This use classification excludes "wineries, breweries and distilleries", which is defined separately. see also "industrial - artisan" for small scale facilities that include onsite sales.

Attachment 2
Food Truck. A vending vehicle or mobile food facility selling food and/or beverages in an operable motorized coach or trailer with current department of motor vehicles registration and a current food safety permit acceptable to the San Luis Obispo County Environmental Health Services Division.

Food Truck Court. An area designated for two or more food trucks to park for the purpose of selling food and beverages.

Fuel Sales. See "vehicle fuel sales" and "vehicle charging station".

Funeral Services. An establishment primarily engaged in the provision of services involving the care, preparation, or disposition of human remains and conducting memorial services. Typical uses may include crematories, columbaria, mausoleums, mortuaries, funeral chapels, and funeral homes.

Section 7. “Food Truck” line item within Table 21.16.200 of Title 21, Chapter 21.32 of the Paso Robles Municipal Code is amended by modifying the permit requirements on the chart to accurately reflect the amended permit requirements of Chapter 21.69.120 (Food Trucks and Food Truck Courts) to read as follows:

Table 21.32-1: Zoning District Use Regulations (portion) Land Uses R-A R-1 R-2 R-3 R-4 R-5 OP CP C-1 C-2 C-3 RC RL M PM AP AG POS OS PF Specific Use Regulations Food truck
— — — — — — — T T T T T T T T T — — — —
See
Section 21.69.120 (Food
Trucks and Food Truck
Courts)
Section 8. A portion of Table 5.3-1 of the Uptown/Town Centre Specific Plan is amended by adding “Food Truck” and “Food Truck Court” line items to accurately reflect the amended permit requirements of Chapter 21.69.120 (Food Trucks and Food Truck Courts) to read as follows:

Table 5.3-1: Allowed Land Uses and Permit Requirements (Uptown Town Centre Specific Plan) (portion)
Land Use Type PERMIT REQUIREMENTS BY ZONE Specific Use
Regulations
T3-N T3-F T4-N T4-F T4-NC TC-1 TC-2 RSC OS
Family day care
center for
more than 14
children or
non-family day
care center

CUP CUP CUP CUP CUP - - CUP -
Food Truck - TUP - TUP TUP TUP TUP TUP - See Paso Robles Municipal Code
Section 21.69.120
(Food Trucks and
Food Truck Courts)

Attachment 2
Food Truck
Court
- CUP - CUP CUP CUP CUP CUP - See Paso Robles
Municipal Code
Section 21.69.120
(Food Trucks and
Food Truck Courts)
Meeting
Facilities,
public or
private

CUP CUP CUP CUP CUP CUP CUP CUP CUP
Section 9. This Ordinance shall be effective thirty days from the date of its adoption.

Section 10. The City Clerk shall certify to the adoption of this Ordinance and shall post or publish this Ordinance as required by law.

Section 11. The adoption of the proposed Ordinance is not subject to the California Environmental Quality Act (CEQA) because it does not qualify as a “project” under CEQA. State CEQA Guidelines §15060(c) provides that “[a]n activity is not subject to CEQA if … the activity is not a project as defined in Section 15378” and, alternatively, is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) as it can be seen with certainty that there is no possibility that the proposed ordinance may have a significant effect on the environment.

Section 12. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance, or the application thereof to any person or place, is for any reason held to be unconstitutional or invalid by the decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or its application to other persons or places.

Introduced at a regular meeting of the City Council held on the 5th day of May 2026, and passed and adopted by the City Council of the City of El Paso de Robles on the 19th day of May, 2026 by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
__________________________________
John R. Hamon, Jr., Mayor
ATTEST:
_________________________________
Melissa Martin, City Clerk

Council Agenda Report
From: Sam Ricklefs, Assistant Planner
Subject: Approval of Oak Tree Removal Permit 26-04 – A Request to Remove a 36-inch Diameter Blue Oak Tree Located at 1835 Vine Street (APN 008-211-006) CEQA Determination: The City finds that this action is exempt from the provisions of the California Environmental Quality Act (CEQA) in accordance with the CEQA Guidelines Section 15304 – Class 4, Minor Alterations to Land.

Date: May 19, 2026
Facts

1. In April 2026, Helidoro Garcia (“Applicant”) applied for Oak Tree Removal 26-04 requesting the removal of one 36-inch diameter Blue Oak tree (Quercus douglasii) from the property located at 1835 Vine Street, currently containing a single-family residence and detached garage building.

2. The Applicant plans to demolish the existing garage and replace the current foundation with an expanded footprint, in preparation for construction of a new detached structure containing both a garage and pool house. This construction will occur within the critical root zone of the existing tree.

3. The application included an arborist report dated February 2026 from Certified Arborist Hattie Koker, Koker’s Demo & Tree Service. As part of the Report, the Arborist found that the tree is in very poor condition with low vigor due to the decay and loss of major limbs. The poor condition of the tree was found by the Arborist to have significant potential consequences, with a limb failure or full collapse likely to strike occupied buildings on two adjacent properties. Based on this assessment, the Arborist recommends full removal of the proposed tree.

4. Planning Staff inspected the site and reviewed the tree proposed for removal, and were unable to make the determination that the tree is “clearly dead or diseased beyond correction.”

5. Therefore, under Paso Robles Municipal Code section 10.01.050.C of the Oak Tree Ordinance, the tree is considered to be “healthy”, and the City Council must determine whether the tree should be removed based on the factors listed in Section 10.01.050.D.

6. The condition of the oak tree with respect to its general health, danger of limbs failure, and proximity to existing structures justifies removal.

7. The City’s Oak Tree Preservation Ordinance requires replacement of 25% of the diameter of the oak being removed. In this case, removal of the 38-inch Blue Oak tree would require the replanting of as many as four (4) 1.5-inch diameter native oak mitigation trees.

Options

1. Take no action

2. Approve a Resolution authorizing the removal of one 36-inch Blue Oak tree based on the Arborist report concluding that the tree is in very poor condition and in severe decline with evidence of massive past failures due to the loss of major limbs and decay due to lack of

pruning, and requiring mitigation oak trees to be planted on-site or the payment of in lieu fees into the City’s Oak Replacement fund;

3. Deny the Oak tree removal permit with findings and require the oak tree to remain and be protected;

4. Provide alternative direction to staff.

Analysis and Conclusions
Certified Arborist Hattie Koker, Koker’s Demo & Tree Service, performed an evaluation on the Blue Oak tree in February 2026 and provided an evaluation on the overall health of the tree (see Exhibit B to Attachment No. 1 for more detail). The Arborist found that the health of the tree was in very poor condition, being in “severe decline” with “evidence of massive past failures” due to the loss of major limbs and decay due to lack of pruning. Trimming or pruning at this instance was found to not be a viable longterm solution, with high potential for further deterioration of the health of the tree. Based on these findings, the Project Arborist recommended removal of the tree for consideration.

The Oak Tree Preservation Ordinance requires staff to consider five factors when making a recommendation to City Council for oak tree removal permits. The factors are listed below with an explanation for how each was considered in staff’s recommendation in italics:

1. The condition of the oak tree with respect to its general health, status as a public nuisance, danger of falling, proximity to existing or proposed structures, interference with utility services, and its status as host for a plant, pest or disease endangering other species of trees or plants with infection or infestation;
The Project Arborist has provided an arborist report that finds that the oak tree in question is in very poor health and low in vigor. The tree has lost major limbs and has been improperly pruned over a significant period, which has led to major decay. The crown of the tree is unbalanced and has overextended branches, with large numbers of epicormic shoots being present. These overextended branches are causing areas of wounding on the tree, leaving the tree open to potential disease and further decay. The tree contains a slight lean toward the north, which creates a significant risk to existing structures on neighboring properties in the event of a major limb failure or collapse.

Trimming of the tree was not proposed by the Project Arborist as a viable alternative. The number of overextended branches and shoots would require more than the recommended amount of live canopy removal to complete, which may further damage the existing health of the tree. This damage would be further exacerbated by the tree’s advanced age and current condition.

2. The necessity of the requested action to allow construction of improvements or otherwise allow reasonable use of the property for the purpose for which it has been zoned. In this context, it shall be the burden of the person seeking the permit to demonstrate to the satisfaction of the director that there are no reasonable alternatives to the proposed design and use of the property. Every reasonable effort shall be made to avoid impacting oak trees, including but not limited to use of custom-building design and incurring extraordinary costs to save oak trees; Removal of the 36-inch Blue Oak is proposed as part of construction to occur on the property. The Applicant proposes to demolish the existing detached garage and replace the current concrete foundation with an expanded and slightly relocated footprint. This new foundation would support the further construction of a 498 sq ft detached pool house with an attached 408 sq ft garage.

The scope of this proposed construction will take place within the Critical Root Zone of the Blue Oak and would have significant impact on the health of the tree. The Project Arborist found an estimated 35% drip line impact to the root system, far exceeding the 20% ideal impact goal. Due both to this estimated level of impact and the already diminishing health of the tree, it was recommended that removal be considered as the most reasonable option.

3. The topography of land, and the potential effect of the requested tree removal on soil retention, water retention, and diversion or increased flow of surface waters. The director shall consider how either the preservation or removal of the oak tree(s) would relate to grading and drainage. Except as specifically authorized by the planning commission and city council, ravines, stream beds and other natural water-courses that provide a habitat for oak trees shall not be disturbed; The subject oak tree does not contribute to an intact habitat and is not in close proximity to any significant flow of surface waters.

4. The number, species, size and location of existing trees in the area and the effect of the requested action on shade areas, air pollution, historic values, scenic beauty and the general welfare of the city as a whole;
The oak tree provides both shade and scenic beauty to the site, and is the only mature oak tree located on the given property. The applicant will need to replace the tree with mitigation trees.

5. Good forestry practices such as, but not limited to, the number of healthy trees the subject parcel of land will support.

Removal of the tree would require replacement by four (4) native oaks at the minimum 1.5-inc caliper. The number of trees required are unlikely to fit within the given yard space of 1835 Vine Street. The Project Arborist noted that the Applicant had discussions regarding the possibility of planning at least one (1) replacement oak on-site, with all others to be either planted on public property or replaced by an in-lieu payment to the City, as per Section 10.010.050.E of the Oak Tree Ordinance.

Fiscal Impact
There is no direct fiscal impact on the City from this action.

CEQA
Staff recommends that pursuant to the California Environmental Quality Act (CEQA), the City Council determine that this proposal to remove the 36-inch diameter Blue Oak tree is exempt from the provisions of the California Environmental Quality Act (CEQA) in accordance with the CEQA Guidelines Section 15304 – Class 4, Minor Alterations to Land, which “consist of minor private alterations in the condition of land and/or vegetation which do not involve the removal of a healthy, mature, scenic trees, except for forestry and agricultural purposes.” Here, the proposed project involves the removal of one oak tree that is structurally compromised and poses a hazard due to its condition and proximity to nearby occupied buildings. The tree removal process is limited to the removal of one oak tree in poor health and is thus a minor private alteration. There is no evidence of any unusual or special conditions that would result in a significant effect on the environment.

Recommendation (Option 2)
Approve Resolution 26-XXX, authorizing the removal of one 36-inch Blue Oak tree and requiring mitigation oak trees by planting four (4) mitigation trees on site and/or any combination of plantings and payment for each tree to the City Oak Replacement Fund at a cost of $200 each.

Attachments

1. Resolution 26-XXX – OTR 26-04 – 1835 Vine Street
a. Exhibit A – Site Plan
b. Exhibit B - Koker’s Demo & Tree Service Arborist Report

Attachment 1
RESOLUTION 26-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PASO ROBLES APPROVING THE REMOVAL OF ONE (1) BLUE OAK TREE LOCATED AT 1835 VINE STREET (APN 008-211-006)
WHEREAS, in April 2026, Helidoro Garcia (“Applicant”) applied for Oak Tree Removal 26-04 requesting the removal of one 36-inch diameter Blue Oak tree (Quercus douglasii) from the property located at 1835 Vine Street, currently containing a single-family residence and detached garage building; and WHEREAS, the Applicant plans to demolish the existing garage and replace the current foundation with an expanded footprint, in preparation for construction of a new detached structure containing both a garage and pool house. This construction will occur within the critical root zone of the existing tree; and
WHEREAS, the application included an arborist report dated February 2026 from Certified Arborist Hattie Koker, Koker’s Demo & Tree Service; and
WHEREAS, the report found that the tree is in very poor condition with low vigor due to the decay and loss of major limbs. The poor condition of the tree was found by the Arborist to have significant potential consequences, with a limb failure or full collapse likely to strike occupied buildings on two adjacent properties. Based on this assessment, the Arborist recommends full removal of the proposed tree; and
WHEREAS, Planning Staff inspected the site and reviewed the tree proposed for removal were unable to make the determination that the tree is “clearly dead or diseased beyond correction”; and WHEREAS, the Community Development Director could not make the determination that the tree is “clearly dead or diseased beyond correction,” and therefore, the tree is “healthy” as defined by Section 10.01.050.C of the Oak Tree Preservation Ordinance; the City Council must make the determination of whether the tree should be removed or not, after consideration of the factors listed in Section 10.01.050.D; and
WHEREAS, the City’s Oak Tree Preservation Ordinance requires replacement of 25% of the diameter of the oak being removed. In this case, removal of the 38-inch Blue Oak tree would require the replanting of as many as four (4) 1.5-inch diameter native oak mitigation trees; and WHEREAS, the City Council met to discuss the request for an oak tree removal on May 19, 2026, considered the facts as presented in the staff report prepared for this project, and accepted public testimony; and
WHEREAS, the City Council determined that this proposal to remove the 36-inch Blue Oak tree is exempt from the provisions of the California Environmental Quality Act (CEQA) in accordance with the CEQA Guidelines Section 15304 – Class 4, Minor Alterations to Land, which consist of minor private alterations in the condition of land and/or vegetation which do not involve the removal of a healthy, mature, scenic trees. Here, the proposed project involves the removal of one oak tree that is structurally compromised and poses a hazard due to its condition and proximity to nearby occupied

Attachment 1
buildings. The tree removal process is limited to the removal of one oak tree in poor health and is thus a minor private alteration. There is no evidence of any unusual or special conditions that would result in a significant effect on the environment.

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. Pursuant to Paso Robles Municipal Code section 10.01.050.D. and based on the information and findings contained in the accompanying staff report, incorporated herein, testimony presented during the public hearing, and responses thereto, the City Council hereby finds and determines that the 36-inch Blue Oak tree located at 1835 Vine Street is at a high risk of failure and a potential hazard to people and structures on-site.

Section 3. The City Council of the City of El Paso de Robles does hereby:

1. Approve the request to remove one (1) 36-inch diameter Blue Oak tree, shown in Exhibit A, based on the Arborist concluding that the health of the tree is in very poor condition, being in severe decline with evidence of massive past failures due to the loss of major limbs and decay due to lack of pruning;

2. Require a combination of the following:
a. The on-site planting of four(4) 1.5-inch diameter native oak trees, at the direction of a certified arborist;
b. The provision of payment for each tree to the City Oak Replacement Fund at a cost of $200 each, totaling $800 in whole;

3. Require, if option 2a. above is undertaken, the provision of irrigation and protection for the replanted oak trees until they are established, with tree preservation security posted per Section 10.01.050 if applicable.

APPROVED this 19th Day of May, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

John R Hamon, Jr., Mayor
ATTEST:

Melissa Martin, City Clerk
Exhibit A - Site Plan
Exhibit B – Koker’s Demo & Tree Service Arborist Report (2026)

Exhibit A

City of Paso Robles February 20, 2026
Address : 1835 Vine St. Paso Robles, CA 93446
Arborist Report for Tree Removal
This arborist report is for one Blue Oak ( Quercus douglasii ) tree being requested for removal. The tree is located at 1835 Vine Street in Paso Robles in the back yard. The tree is marked with an orange flagging ribbon for easy identification.

Reason For Removal Request :

The tree is being requested for removal due to the upcoming construction currently in the approval and planning stages. According to the clients, the plan is to completely demolish the existing garage which is in very poor condition, and rebuild along with expanding the foundation on the garage. Removal of the current foundation will be removed and a new one will be created along with shifting and expanding of the footprint. The slab for the garage will be placed on grade.

Terms you may see in this report :

CRZ - Critical Root Zone - This is where the sensitive roots of the tree exist. The “ Critical Root Zone “ (CRZ) means an area that is within a circle circumscribed around the trunk of a tree using a radius of 1 foot per inch DBH.

Example of CRZ - a 20 inch diameter at breast height tree will have a CRZ with a radius of 20 feet.

Dripline - The dripline is the area directly located under the outer circumference of the tree branches / canopy.

DBH - Diameter at breast height, normally about 4 ft 6 inches from ground.

Vigor - Overall health of tree
Branch Collar - area where the branch joins another branch or trunk.

Canopy - collective branches and foliage of a tree or group of trees’ crowns.

Crown - upper part of a tree, consisting of the branches and foliage.

Cavity - Open or closed hollow area within the tree, this is usually associated with decay.

Foliage - leaves of a plant
Root Collar - area where the main roots join the trunk or main stem of the plant. Usually at or near ground level.
1 Exhibit B

Codominant Stems - forked stems nearly the same size in diameter, arising from a common junction that lacks a normal branch union.

Included Bark - bark that becomes embedded in a crotch between branch and trunk or between codominant stems . Causes a weak structure.

Absorbing Roots - A tree's absorbing roots are within the top 12 inches of soil. These are fine fibrous roots that take up water and minerals.

Scarification - to break up the surface of topsoil or pavement.

Tree Protection Zone - described as the area within the orange tree protection fencing.

Shall - Word that designates a mandatory requirement.

Should - Word that designates an advisory recommendation.

Brown Rot - Wood-decay fungus, fungi that digest moist wood, causing rot, includes various species that infect living trees and cured wood.

Porous - material that allows water from precipitation to pass through, yet are strong and durable enough to support vehicular or pedestrian traffic.

Epicormic shoot - shoot arising from a dormant bud or newly formed adventitious tissue.

Evergreen - a tree has its leaves all year round
Deciduous - tree loses its leaves annually
Tree Information:

Blue Oak ( Quercus douglasii ) - Deciduous - Native
● Size - 82 ft tall , 30 ft wide
● Construction tolerance - Moderate
● Growth Rate - slow
● Sun - Full sun and partial shade
● Moisture - Low
● Soil pH - 6.0 to 8.0
● Bark Color: Pale Grey and textured
● Form - Upright, Rounded, Upright Columnar
● Dormancy - Summer Semi-deciduous, Winter Deciduous
● Leaf color : Bluish Green
Tree #319 -
Tree tag # : 319
Tree Species : Blue Oak ( Quercus douglasii )
Truck Circumference : 9 ft 5 in
Diameter at Breast Height ( DBH) : 35.98 in
Critical Root Zone Circumference : 36 Feet
Height : 36 ft
Crown Spread : 46 ft N - S Direction
57 ft W - E Direction
Tree Health Rating : 1 - very poor ( see below for
description of rating system )
2 Exhibit B

This tree is rated very poor based on a visual inspection on February 19, 2026. The vigor of the tree is low. The tree is located on flat topography. This tree's location is in the back yard. The soil around the critical root zone is currently saturated due to recent storms. The crown is large in size and sparse. The crown is unbalanced by about 40%. The tree has lost major limbs along with improper pruning leading to decay. Epicormic shoots are present which means the tree is stressed. Epicormic shoots are also called stress shoots or water sprouts and happen when the tree is stressed and trying to produce more foliage to help survive. This often leads to heavy limbs and shoots in areas that are ideal for proper growth. The crown has over extended branches throughout. Some of these over extended branches are growing into the neighboring Tree of Heaven (Ailanthus altissima) trees. The branches are over-crowded and causing areas of open wounds which leaves the tree open to infections. There were no leaves present at time of inspection due to seasonal traits, however there were not many leaves on the ground for inspection either. About 35% of the crown was dead and dying. The main central leader has been removed.

There is a large burl on the main trunk along with moss. Some of the limbs within the canopy have cracks and cavities visible. There is a broken spar that is dying back. The tree has a slight lean into the North direction. The root collar was visible and has a small amount of rotten bark.

Previous Pruning and Failure History : The owners do not know the extended history of the tree, however upon inspection ,there appears to be multiple limb failures. The central leader has failed along with other limbs. There is a large limb that was removed over the neighboring property. This tree appears to have poor pruning methods or hasn't been pruned promptly in the past.

Hazards : If a tree should fail, it would fall onto the neighboring house. The tree has a slight lean into the North direction which would place the direction of hazard onto two neighboring properties that have occupied buildings.

Preservation : While preservation is always our goal, trimming would be the recommended preservation technique to reduce weight on the limbs and to reduce the overcrowding within the canopy. Trimming the over-extended limbs, removing weight on heavy limbs and removing the over crowded limbs along with the limbs extended into the neighboring trees would need to be removed. Trimming is not recommended because pruning a tree that is as old as this one, the stress and slow decline it is already in, would not be advisable. Trimming would require close to or more than the recommended amount of live canopy removal which could cause more harm than good.

Tree Rating :
1 2 3 4
Tree No. Tree Species Trunk DBH Tree Condition
319 Blue Oak 35.98 in 1
1 = Tree Number - ( only one tree in this report ) 3 = Trunk Diameter at breast height - approx. 4 ft 6 inches 2 = Tree species - Abbreviation of common name of tree 4 = Tree Condition - 1 = poor / 10 = excellent 3 Exhibit B

Tree Rating System -
A rating System of 1 - 10 was used for visually establishing the overall condition of the trees.

The trees are rated based on certain factors, including but not limited to the tree's vigor, pests , growth, conks, cavities, splits, bark appearance, past failures, pruning scars, etc. The rating system is defined as follows:

Rating Condition
0 Deceased
1 Very Poor - Evidence of massive past failures, extreme disease and or is in severe decline.
2 Poor - May be saved with attention to any of the following - Pruning, insect/pest eradication and future monitoring
3 Fair - Some past failures, some pests or structural defects that may be mitigated with pruning.
4 Fair - May have had minor past failures, deadwood, minor Structural defects, some pests
5 Good - Relatively healthy tree with little structural and or pest defects
6 Good - Healthy tree that probably can be left in it natural state
7 - 9 Very Good - Ratings reserved for trees that have had proper arboricultural pruning and attention or have no
apparent structural defects
10 Excellent - Healthy tree with excellent structure and foliage. No signs of problems and has had proper care.

Possible Mitigation for Removed Trees :
*The following is from the City of Paso Robles Municipal Code ; Chapter 10.1 Oak Tree preservation , Section E
In conjunction with the intended decision made on an application for a permit, the director shall attach or recommend for city council consideration reasonable conditions to ensure compliance with the stated purposes of this chapter, and a condition requiring replacement oaks being equivalent to twenty five percent of the diameter of the removed tree(s). (For example, the replacement requirement for removal of two trees of fifteen-inch DBH (thirty total diameter inches), would be seven and one-half inches (thirty inches removed multiplied by twenty-five hundredths replacement factor). This requirement could be satisfied by planting five, one and one-half inch caliper trees, or three, two and one-half inch caliper trees, or any other combination totaling seven and one-half inches). A minimum of two, twenty four inch box, one and one-half inch minimum trunk caliper measurement trees shall be required for each oak tree removed. Replacement trees shall be located on the same property as where the tree is approved for removal or, subject to approval of the director, arrangements can be made to locate the replacement trees on public property.

Removal Application Fee - $600 ( subject to change without notice ) 4 Exhibit B

Replanting Plan :

Clients may ask that if replanting mitigation be required, that these plantings take place off-site or an in-lieu of fee be set due to the property layout and size. A discussion was made about possibly implementing at least one oak be planted on site.

OAK TREE REPLACEMENT
The Client shall plant replacement Oak trees of the same species as those removed at the replacement ratio of 25% of the combined diameter of the removed trees. Each replacement tree shall be a minimum 24-inch box specimen with a 1½ inch minimum trunk diameter per Section 10.01.050 F of Ordinance No 835 N.S.

Total Diameter of Oak Trees Authorized for Removal: 35.98 inches *25% of 35.98 = 8.995 inches to be replaced ( rounding up to 9 inches) Oak Trees to be Planted:

Option 1 1 (number) Blue Oak species 9 in DBH size(s)
Option 2 3 (number) Blue Oak species 3 in DBH size(s)
If you have any questions or concerns, please feel free to contact me.

Hattie Koker
ISA Certified Arborist®
WE - 13496A
[email protected]
P : 805-423-4933
1835 Vine St Paso Robles, CA 93446
Tree Protection Plan Spreadsheet
1 2 3 4 5 6 7 8 9 10 11 12
Tree #
Tree
Species
Trunk
DBH Height
Crown
Spread
Crown
Spread
Direction
Tree
Condition
Const.

Status
Drip
Line
Impact
Constr.

Impact
Mitigation
Proposed
Mont.

Required Field Notes
319 Blue Oak

35.98 in 36 ft 46 ft N - S 1 I 35% G , C R N See Report above 57 ft W - E
1 - Tree #
NOTES :

Impacts may change , if any changes to site plans are made, 5 Exhibit B

review must be done to reevaluate potential impacts.

Ideal impact goal is 20%
Trees impacted 40% will be considered as removals.

Construction Impacts Abbreviations:

G - grading , W - Water utility , T - Trenching , E - Easement , C - Compaction , RW - Retaining Wall , LL - Leach Lines
S - Structure , SW - Sidewalk, F - Temporary site fencing TP - Trunk Protection - ONLY needed when fencing can’t be placed or if fencing needs to be removed for certain
construction phases.
2 - Tree Type - Common Name
3 - Trunk DBH - 4ft 6 in
4 - Height
5 - Crown Spread
6 - Direction measuring crown spread
7 - Tree Condition - 1-10
8 - Construction Status - Avoided , Impacted , Removal
9 - Dripline % of impact
10- Construction Impact Type - grading, compaction, trenching, easement
11 - Mitigation Requirements - Fencing(F), Monitoring(M), Root Pruning(RP), Trunk Protection(TP), Chips(C)
12 - Arborist Monitoring - Yes or No
Location of property where the tree is located : 1835 Vine St. Paso Robles, CA 93446 (picture courtesy of Google Earth )
6 Exhibit B

Tree Location
7 Exhibit B

Green shows the critical root zone of a 36 foot radius. The blue shows the impacted areas. 8 Exhibit B

Neighboring tree locations and species.

Existing Site Plan
9 Exhibit B

Tree #319 is marked with a red dot and red X
Green lines show the approximate CRZ which
would extend out 36 feet from the trunk of the
tree. The green line is approximately 35 ft
which shows the footprint of the building will
impact the tree severely.
10 Exhibit B

Highlighted shows what portion of project will have greatest impact on tree proposed for removal
11 Exhibit B

12 Exhibit B

13 Exhibit B

14 Exhibit B

15 Exhibit B

Pictures of Tree #319 - Blue Oak 35.98 in DBH
16 Exhibit B

↑ Epicormic Shoots
17 Exhibit B

↑ wire grown into bark ↑ tree on fence line
↑ Trunk facing East ↑ Trunk face West
18 Exhibit B

Dying and rotten spar
19 Exhibit B

Canopy facing East
Removed spar and over extended
branches
Removed spar
20 Exhibit B

Dead and rotten limb
Rubbing branch
Removed central leader
21 Exhibit B

Cavity
Wound on limb
22 Exhibit B

Rotten and decayed area on limb
Root collar , small area of rot
23 Exhibit B

Root collar and rot
Small area on trunk of bark rot and
discoloration
24 Exhibit B

Burl with moss
Burl with moss, bark discoloration
25 Exhibit B

Overcrowding of branches
26 Exhibit B

Cavities and rotten wounds
27 Exhibit B

Removed Spar
Dead branches
28 Exhibit B

Encroaching branches rubbing onto eachother
Cable end in limb - not braced to anything
29 Exhibit B

Crack in limb
Utility pruning
Tree facing East , picture taken from back
alley way
30 Exhibit B

Tree from 19th Street facing South/
Overcrowded branches and branches
growing into neighboring trees
31 Exhibit B

Limb resting onto neighboring tree
limb
32 Exhibit B

33 Exhibit B

END OF REPORT
34 Exhibit B

Council Agenda Report
From: Sam Ricklefs, Assistant Planner
Subject: Approval of Oak Tree Removal Permit 26-07 – A request to Remove a 41-inch Diameter Valley Oak Tree Located at 70 Nutwood Circle (APN 009-851-016) CEQA Determination: The City finds that this action is exempt from the provisions of the California Environmental Quality Act (CEQA) in accordance with the CEQA Guidelines Section 15304 – Class 4, Minor Alterations to Land.

Date: May 19, 2026
Facts

1. In April 2026, Andrew Brown (“Applicant”) applied for Oak Tree Removal Permit 26-07 requesting the removal of one 41-inch diameter Valley Oak tree (Quercus lobata) from the property located at 70 Nutwood Circle, currently containing the offices and equipment yard for ABI Engineering Inc.

2. The application included an arborist report dated April 13, 2026, from Certified Arborist Daniel Ponti, Timber Worx LLC. The Arborist found that the Valley Oak “exhibits signs of poor health/decline,” including poor vigor, signs of multiple limb failures, and the presences of weak attachment points for large extending limbs. The condition of the tree was found to present a moderate risk of potential injury to workers and damage to equipment stored on-site. Based on this determination, the Arborist recommended full removal of the tree as the best course of action.

3. Planning Staff inspected the site and reviewed the tree proposed for removal and were unable to make the determination that the tree is “clearly dead or diseased beyond correction.”

4. Therefore, under Paso Robles Municipal Code section 10.01.050.C of the Oak Tree Ordinance, the tree is considered to be “healthy”, and the City Council must determine whether the tree should be removed based on the factors listed in Section 10.01.050.D.

5. The condition of the oak tree with respect to its general health, danger of limbs failure, and proximity to existing structures justifies removal.

6. The City’s Oak Tree Preservation Ordinance requires replacement of 25% of the diameter of the oak being removed. In this case, removal of the 41-inch Valley Oak tree would require the replanting of as many as seven (7) 1.5-inch diameter native oak mitigation trees.

Options

1. Take no action;

2. Approve a Resolution authorizing the removal of one 41-inch Valley Oak tree and requiring mitigation oak trees to be planted on-site and/or the payment of in lieu fees into the City’s Oak Replacement fund;

3. Deny the Oak tree removal permit with findings and require the oak tree to remain and be protected;

4. Provide alternative direction to staff.

Analysis and Conclusions
The Oak Tree Preservation Ordinance requires staff to consider five factors when making a recommendation to City Council for oak tree removal permits. The factors are listed below with an explanation for how each was considered in staff’s recommendation in italics:

1. The condition of the oak tree with respect to its general health, status as a public nuisance, danger of falling, proximity to existing or proposed structures, interference with utility services, and its status as host for a plant, pest or disease endangering other species of trees or plants with infection or infestation;
The Project Arborist has provided an arborist report that finds that the oak tree in question “exhibits signs of poor health/decline”, including sparse canopy and leaf densities, low vigor, tip dieback, and epicormic sprouting. The tree includes co-dominant stems that have weak attachment points for large extending limbs, increasing the risk of failure or collapse for said limbs.

The Arborist finds that the tree contains signs of multiple limb failures having already occurred, with a moderate risk of potential injury to workers and damage to equipment stored on-site for any future failures.

The Arborist additionally notes that the critical root zone (CRZ) of the tree was impacted approximately 15% from grading work for construction of the offices and equipment yard. The project encroachment permit approved by the City in 2020, as well as subsequent grading and building plans approved by the City in 2022, do not show any grading work as planned to occur within the CRZ of the tree proposed for removal.

The report rules out the possibility of mitigation through pruning. The Arborist finds that the amount of pruning work needed would surpass the acceptable risk level and likely add further stress to the declining health of the tree. This, in turn, “would exacerbate subject tree health decline”. The report additionally does not recommend mitigation through the moving of equipment or denial of access to areas of the site within the tree’s “fall zone”. The Arborist states that this would significantly alter the current operations of the site.

2. The necessity of the requested action to allow construction of improvements or otherwise allow reasonable use of the property for the purpose for which it has been zoned. In this context, it shall be the burden of the person seeking the permit to demonstrate to the satisfaction of the director that there are no reasonable alternatives to the proposed design and use of the property. Every reasonable effort shall be made to avoid impacting oak trees, including but not limited to use of custom-building design and incurring extraordinary costs to save oak trees; There is no further construction proposed for this property. The request for removal is due to the tree’s declining health and potential risks posed to nearby pedestrians and equipment stored on the site. Initial construction at the property appears to have included unauthorized grading works within the critical root zone of the Valley Oak.

3. The topography of land, and the potential effect of the requested tree removal on soil retention, water retention, and diversion or increased flow of surface waters. The director shall consider how either the preservation or removal of the oak tree(s) would relate to grading and drainage. Except as specifically authorized by the planning commission and city council, ravines, stream beds and other natural water-courses that provide a habitat for oak trees shall not be disturbed; The subject oak tree does not contribute to an intact habitat and is not in close proximity to any significant flow of surface waters.

4. The number, species, size and location of existing trees in the area and the effect of the requested action on shade areas, air pollution, historic values, scenic beauty and the general welfare of the city as a whole;
The property currently holds three additional trees of the same species which provide shade and beauty to other areas of the site, all of which remain in relatively healthy condition. The tree proposed for removal provides additional shade and scenic beauty, while its placement on site also allows it to act as a natural barrier between the construction-type uses of the site and single-family residences located in close proximity on Nutwood Circle. The applicant will be required to replace the given tree with mitigation trees.

5. Good forestry practices such as, but not limited to, the number of healthy trees the subject parcel of land will support.

Removal of the tree would require replacement by seven (7) native oaks at the minimum 1.5-inch caliper. The current area of the property appears likely to be able to support the number of required mitigation trees in a healthy manner.

The Project Arborist has noted that, in his professional opinion, the decline of the health of the tree is not due to any actions taken by the Applicant and has requested that no mitigation or fee be proposed, as per Section 10.01.050.A.1 of the Oak Tree Preservation Ordinance. Following review, Staff does not find there to be sufficient evidence provided to support this claim, with evidence instead suggesting that unauthorized grading works that occurred as part of initial construction may have negatively impacted the tree’s overall health. Staff recommends Council to require normal mitigation measures as per Section 10.01.050.E of said Ordinance.

Additionally, the Project Arborist has noted that, should replacement mitigation be required, that the Applicant would prefer to pursue a replacement agreement to plant the replacement oaks on public property (pay in-lieu payment to City), as per Section 10.010.050.E of the Oak Tree Ordinance. Staff’s recommendation is that the proposed mitigation trees be planted on Nutwood Circle properties owned by the applicant.

Fiscal Impact
There is no direct fiscal impact on the City from this action.

CEQA
Staff recommends that pursuant to the California Environmental Quality Act (CEQA), the City Council determine that this proposal to remove the 41-inch diameter Valley Oak tree is exempt from the provisions of the California Environmental Quality Act (CEQA) in accordance with the CEQA Guidelines Section 15304 – Class 4, Minor Alterations to Land, which “consist of minor private alterations in the condition of land and/or vegetation which do not involve the removal of a healthy, mature, scenic trees, except for forestry and agricultural purposes.” Here, the proposed project involves the removal of one oak tree that is structurally compromised and poses a hazard due to its condition and proximity to both pedestrian areas and equipment storage. The tree removal process is limited to the removal of one oak tree in poor health and is thus a minor private alteration. There is no evidence of any unusual or special conditions that would result in a significant effect on the environment.

Recommendation (Option 2)
Approve Resolution 26-XXX, authorizing the removal of one 41-inch Valley Oak tree and requiring mitigation oak trees to be planted on-site and/or the payment of in lieu fees into the City’s Oak Replacement fund.

Attachments

1. Resolution 26-XXX – OTR 26-07 – 70 Nutwood Circle
a. Exhibit A – Site Plan
b. Exhibit B – Timber Worx LLC Arborist Report