PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #12.A
Meeting Date: November 18, 2025
TITLE:
Encroachment Permits Overview
RECOMMENDATION:
No action recommended; for information only.
DISCUSSION:
On October 7, 2025, the City Council requested that staff return with a report on Encroachment Permits. An Encroachment Permit authorizes individuals or contractors to perform work within, or make use of, the City’s right-of-way or easements. A permit is required for any activity occurring within these areas to ensure the appropriate and proper use of public property, protect the integrity of City infrastructure, and maintain public safety.
The Public Works Department Engineering Division manages the issuance and inspection of encroachment permits. Individuals performing work permitted through an Encroachment Permit must be licensed contractors from the State of California specific to the type and scope of work. Contractors must also possess a current annual or one- time business license prior to the permit issuance.
There are three levels of encroachment permits based on the type of work being performed. All permits follow the same application process, with fees determined by permit level. Some projects also require the posting of a security bond, the amount of which depends on the nature of the work. A security bond, in the form of check, money order, letter of credit, or certificate of deposit is a way to protect public property and ensures contractors complete work in accordance with permit conditions. It acts as a guarantee that the contractor will construct the project following City standards, repair any damage to public property, and cover associated costs. Bonds are eligible for release following a final inspection at least 30 days after work completion. The contractor performing the work under an encroachment permit is also required to provide proof of liability insurance in the amount of $1,000,000 and a policy endorsement naming the City of Pismo Beach as additional insured.
The three types of Encroachment Permits are outlined below.
Minor Encroachment
A minor encroachment permit will be issued for work that requires only a final inspection and is typically issued “over the counter” without a formal plan review process. The fee for a minor encroachment permit is $95. Examples of work that falls under the minor encroachment category are:
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POD or dumpster storage
“No Parking” or traffic control operations for adjacent private work Tree trimming or landscaping within the right-of-way
Use of a street crane
In some cases, a minor permit may also require a security bond. For example, installation of a backyard hot tub requiring a street crane would necessitate a bond to ensure pavement protection. After the 30-day holding period, staff will inspect the staging area and release the bond if no damage is found. Traffic and pedestrian control plans may also be required depending on the location and type of work.
Surface Encroachment
A surface encroachment permit is issued for work that does not involve deep excavation.
These permits are reviewed prior to issuance and field inspections are required during construction. The fee for this type of permit is $1,440. Examples of work that falls under the surface encroachment category are:
Curb, gutter, and drive approach replacement
Tree removal and replacement under the City’s Tree Policy Sidewalk panel replacement
Paving of a drainage swale
Applicants must contact Underground Service Alert (USA) to identify utilities before issuance of the permit. A security bond is collected upon permit approval and released following satisfactory inspection after the 30-day post-completion period. Traffic and pedestrian control plans may also be required.
Subsurface Encroachment
A subsurface encroachment permit is issued for work involving excavation. These types of permits are reviewed prior to issuance and inspections are required during construction. The fee for this type of permit is $2,122. Examples of work that falls under the surface encroachment category are:
Sewer main or lateral replacement
Water main or lateral replacement
Other underground utility work such as natural gas, electric, cable, or telephone
Applicants must contact USA to identify utilities before issuance of the permit. A security bond is collected upon permit approval and released following satisfactory inspection after the 30-day post-completion period. Traffic and pedestrian control plans are also typically required. Trench shoring protection plans may also be required.
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Encroachment Permit Fees
The fees for encroachment permits are identified in the City’s adopted User Fee Schedule. User fees are charges that are imposed on individuals or groups for the use of City facilities or services, such as facility rental fees, parking fees, and permit fees. As part of the City’s cost recovery strategy, user fees help fund programs and services that provide a private benefit rather than a direct, citywide benefit. Without appropriate cost recovery, general tax revenues would subsidize private benefits, limiting funds available for essential community-wide services such as public safety and community programs.
Willdan Financial Services (Willdan) was contracted to conduct the most recent User Fee Study. Working with City staff, Willdan evaluated the cost of providing each service, including:
Direct staff salaries and benefits
Departmental operating costs
Indirect costs from central support services
The study established the full cost recovery amounts for each service and provided corresponding fee recommendations. The study recommended:
Increasing the minor encroachment permit fee to $95, reflecting a 66% City subsidy; and
Setting the surface and subsurface encroachment permit fees at $1,440 and $2,122, respectively, to achieve full cost recovery.
The User Fee Study was presented to Council on February 24, 2025, and on March 18, 2025 the Council adopted Resolution R-2025-013 adopting the User Fee Update Study and approving the updated User Fee Schedule, effective July 1, 2025.
Conclusion and Recommendation
Receive the presentation on encroachment permits and ask staff questions regarding the permit process.
FISCAL IMPACT:
There is no fiscal impact associated with this report.
ATTACHMENTS:
None
Prepared by:
Erin Olsen, Senior Management Analyst
Submitted by: Rosemarie Gaglione, PE, Director of Public Works City Manager Approval:
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