Poway City Council
April 21, 2026

April 21, 2026, Item #2
1 of 6
AGENDA REPORT CityofPoway
DATE:

TO:

FROM:

April 21, 2026
Honorable Mayor and Members of the City Council
Carrie Gallagher, City Clerk ~
(858) 668-4535 or [email protected]

CITY COUNCIL
SUBJECT: Approval of the February 3, 2026 Regular City Council Meeting Minutes Summary
The City Council Meeting Minutes submitted hereto for approval are:
• February 3, 2026 Regular City Council Meeting Minutes The Poway City Council sits as the Poway Planning Commission, the Poway Housing Authority, the Public Financing Authority, and the Successor Agency to the Poway Redevelopment Agency.

Recommended Action:

It is recommended the City Council approve the February 3, 2026 Regular City Council Meeting Minutes.

Public Notification:

None.

Attachments:

A. February 3, 2026 Regular City Council Meeting Minutes Reviewed/Approved By:

Assistant City Manager
Reviewed By:

Alan Fenstermacher
City Attorney
Ap~)
Chris a Ine
City Manager
April 21, 2026, Item #2

ATTACHMENT A
2 of 6

CITY OF POWAY

CITY COUNCIL REGULAR MEETING

MINUTES
February 3, 2026
City Council Chambers
13325 Civic Center Drive, Poway, California
(Per Government Code 54953)
(Meeting Called to Order as City Council/City of Poway Planning Commission/Poway Housing Authority/Public Financing Authority and Successor Agency to the Poway Redevelopment Agency) CALL TO ORDER:

Mayor Vaus called the Regular Meeting to order at 7:00 p.m.

ROLL CALL:

Present: Peter De Hoff, Jenny Maeda, Steve Vaus

Absent: Christopher J. Pikus
STAFF MEMBERS PRESENT:

City Manager Chris Hazeltine; City Attorney Alan Fenstermacher; City Clerk Carrie Gallagher; Director of Development Services Julie Procopio; Director of Human Resources and Risk Management Jodene Dunphy; Director of Public Works Eric Heidemann; Director of Community Services Audrey Denham; Fire Chief Brian Mitchell; Captain Claudia Delgado, San Diego County Sheriff's Office.
(Note: Hereinafter the titles Mayor, Deputy Mayor, Councilmember, City Manager, City Attorney and City Clerk shall be used to indicate Mayor/Chair, Deputy MayorNice Chair, Councilmember/Director, City Manager/Executive Director, City Attorney/Counsel and City Clerk/Secretary.)
PLEDGE OF ALLEGIANCE:

Deputy Mayor Maeda led the Pledge of Allegiance.

MOMENT OF SILENCE:

Mayor Vaus led a moment of silence.

PRESENTATIONS:

None.

PUBLIC COMMENT:

Anita Edmondson announced her candidacy for the vacant District 2 City Council seat.

April 21, 2026, Item #2
3 of 6
City of Poway -Minutes -February 3, 2026
CONSENT CALENDAR:

Motioned by Mayor Vaus, seconded by Deputy Mayor Maeda to approve Consent Calendar Items 1 through 2. Motion carried 3/0/1 by the following roll-call vote:

Ayes:

Noes:

Abstained:

Absent:

De Hoff, Maeda, Vaus
None
None
Pikus
Disqualified: None

1. Approval of Reading by Title Only and Waiver of Reading in Full of Ordinances on this Agenda

2. Second Reading and Adoption of Ordinance No. 879 entitled "An Ordinance of the City Council of the City of Poway, California, Changing the Zoning Classification of Certain Properties to Open Space Resource Management (OS-RM) or Natural Open Space (OS) (ZC 25-0001 )"
ORDINANCES FOR INTRODUCTION:

None.

PUBLIC HEARINGS:

3. Conditional Use Permit 25-0001 and Development Review 25-0003, a Request to Construct a 950 Square-Foot Dutch Bros Coffee, with a Two-Lane Drive-Through, in the Automotive General Commercial Land Use District of the Poway Road Corridor Specific Plan, within the Existing Lowe's Home Improvement Parking Lot, Located at 13740 Poway Road, (APN 317- 130-69-00); and Determine the Project is Categorically Exempt from the California Environmental Quality Act
Mayor Vaus opened the Public Hearing at 7:05 p.m.

There was no presentation on this item.

Public Comment.

None.

End of Public Comment.

Mayor Vaus kept the Public Hearing open and continued it to the February 17, 2026 Regular City Council meeting, at the applicants request.

Motioned by Mayor Vaus, seconded by Councilmember De Hoff to continue the public hearing on CUP 25-0001 and DR 25-0003 to the February 17, 2026 Regular City Council meeting. Motion carried 3/0/1 by the following vote:

Ayes:

Noes:

Abstained:

De Hoff, Maeda, Vaus
None
None
April 21, 2026, Item #2
4 of 6
City of Poway -Minutes -February 3, 2026

Absent: Pikus
Disqualified: None
STAFF REPORTS:

4. Water Infrastructure Improvement Program Update
Robert Weber presented the item along with a PowerPoint presentation. He explained Poway's water supply is provided by the San Diego County Water Authority (SDCWA) as untreated water, which is treated at the Lester J. Berglund Water Treatment Plant prior to distribution throughout the City.

Mr. Weber provided an overview of the City's water-related facilities and the Water Infrastructure Improvement Program (Program), noting it to be the largest series of capital projects undertaken by the City since incorporation. He stated the Program improves the resiliency and redundancy of Poway's water infrastructure system and ensures safe and reliable water service for current and future residents.

With the use of a Power Point presentation, the three-phase Program, including the Clearwell Bypass Project, the Clearwell Replacement Project, and the Treated Water Facilities Projects were outlined. Mr. Weber noted the Clearwell Bypass Project remains operational and was completed under budget in November 2022, including temporary bypass facilities and a permanent 36-inch below-ground pipeline connecting the treatment plant to the distribution system.

Mr. Weber noted the Clearwell Replacement Project is currently under construction. He explained the project includes replacement of the existing Clearwell with two (2) new 4-million­ gallon concrete tanks, associated piping improvements, and relocation of storm drains, with removal of the temporary bypass facilities and restoration of the Lake Poway softball field to follow. He added, construction is approximately 95 percent complete, with commissioning anticipated in late Spring 2026, and shared slides highlighting construction progress.

The presentation also included updates on the Treated Water Facilities Projects, which will provide a redundant treated water supply, improve operational flexibility, and support future maintenance of the water treatment plant. Mr. Weber discussed the status of agreements, CEQA processing, design efforts, funding sources, and emergency interconnections with the City of San Diego, and concluded with a twelve-month look ahead of anticipated project milestones.

Public Comment:

None.

End of Public Comment.

Council discussion ensued. Council discussed the Water Infrastructure Improvement Program, noting it is the largest public works project in the City's history, totaling approximately $87 million, and emphasized the Program remains on schedule and under budget. Council highlighted staff's successful replacement of aging water facilities while maintaining uninterrupted service, meeting state requirements, and improving system resiliency during a highly inflationary construction period.

April 21, 2026, Item #2
5 of 6
City of Poway -Minutes -February 3, 2026
Council acknowledged the effective financial and construction management of the project, noting Phases One and Two were delivered several million dollars under budget despite complex construction conditions. Council discussed the Treated Water Facilities Project and coordination with the Ramona Municipal Water District, including future treated water sales, system capacity, bidirectional pipeline design, and proper abandonment of unused facilities.

Council also recognized federal funding support and prior City Councils for their foresight in initiating the program, emphasizing the long-term value of investing in critical infrastructure to ensure a reliable water system for future generations.

This was an informational item. No action was taken.

WORKSHOPS:

None.

COUNCIL-INITIATED ITEMS:

None.

COUNCIL COMMITTEE REPORTS and ANNOUNCEMENTS: Pursuant to AB1234 -(G.C. 53232(d))
Councilmember De Hoff expressed appreciation for City Attorney Fenstermacher, noting Poway's cost-of-service study has received recognition from other jurisdictions as among the strongest they have reviewed and added this was due in part to the City Attorney's legal analysis of Patz v.

City of San Diego, which significantly reduced the City's liability and helped avoid future litigation, thereby controlling costs.

CITY MANAGER ITEMS:

None.

CITY ATTORNEY ITEMS: (Including any public report of any action taken in closed session) No reportable action.

CLOSED SESSION:

5. Conference with Real Property Negotiators
Pursuant to Government Code§ 54956.8
Property: 1 Boulder Mountain Rd, Poway, CA 92064; APNs 275-260-28-00; 275-470-21-00; and 275-470-24-00
City Negotiators: Chris Hazeltine, Julie Procopio
Negotiating Parties: Lyle Arnold, Industrial Data Link Corporation Under Negotiation: Price and terms
ADJOURNMENT:

The meeting was recessed into closed session at 7:24 p.m.

The meeting was adjourned at 7:30 p.m.

April 21, 2026, Item #2
6 of 6
City of Poway -Minutes -February 3, 2026
Carrie Gallagher, CMC
City Clerk
City of Poway, California
April 21, 2026, Item #3
AGENDA RE PO RT City of Poway
DATE:

TO:

FROM:

CONTACT:

April 21, 2026
Honorable Mayor and Members of the City Council
Audrey Denham, Director of Community Servicess;A{)
Karen Tansey, Senior Management Analyst y,1
858-668-4584 or [email protected] '

CITY COUNCIL
SUBJECT: Acceptance of the Poway Center for the Performing Arts Sound System Replacement Project with Clair Global Integration LLC as Complete
Summary:

On December 3, 2024, the City Council awarded the contract for the Poway Center for the Performing Arts Sound System Replacement Project to Clair Global Integration LLC, Bid No. 25-004, in the amount of $765,100. This action will accept the project as complete.

Recommended Action:

It is recommended the City Council:
1) Accept the Poway Center for the Performing Arts Sound System Replacement Project as complete;
2) Authorize the City Clerk to file and record the Notice of Completion; and 3) Authorize the release of the retention in the amount of $39,280.63, if unencumbered, 45 days after City Council acceptance.

Discussion:

The PCPA is a 809-seat theater that serves as the venue for professional performances as well as school events and rentals by community groups. Because the sound system, last updated in 2009, was beginning to fail, a new system was designed and the construction contract was awarded to Clair Global Integration LLC. Clair Global Integration LLC has completed all work in accordance with the contract plans and specifications. There were two change orders totaling $20,512.65. The final contract amount is $785,612.65.

Environmental Review:

This action is not subject to review under the California Environmental Quality Act (CEQA). 1 of 2
April 21, 2026, Item #3
Fiscal
Impact:

There
are
sufficient
funds
available
in
the
project
account
(Fund
1060,
Project
MN067)
for
the
release
of
retention.

Funds
remaining
in
the
project
at
year
end
will
be
returned
to
the
Capital
Improvement
Fund
for
use
on
other
projects.

Based
on
the
agreement
between
the
City
and
the
Poway
Unified
School
District
(PUSD),
PUSD
will
reimburse
the
City
35%
of
the
final
cost
of
the
project,
which
will
be
returned
to
the
Capital
Improvement
Plan
project
budget
and
the
Capital
Improvement
Fund's
Unassigned
Fund
Balance
(1060)
on
a
proportional
basis.

Public
Notification:

None
.

Attachments: None. Reviewed/Approved
By:

Assistant
City
Manager
2 of2
Reviewed
By
:

Alan
Fenstermacher
City
Attorney
Approved
BY.'
Ch
~
City
Manager
April 21, 2026, Item #4
DATE:

TO:

FROM:

CONTACT:

SUBJECT:

Summary:

AG EN DA REPORT City of Poway
April 21, 2026
Honorable Mayor and Members of the City Council
Julie Procopio, Director of Development Services(f
Tracy Beach, City Engineer
858-668-4652 or [email protected]

CITY COUNCIL
Resolution Approving a 2% Increase in the Regional Transportation Congestion Improvement Program Traffic Mitigation Fee for Fiscal Year 2026-27, as Required by the TransNet Ordinance
On April 1, 2008, the City Council adopted the Regional Transportation Congestion Improvement Program (RTCIP) Traffic Mitigation Fee pursuant to the TransNet Ordinance. The Ordinance calls for the fee to be adjusted annually on July 1 of each year to reflect increases in construction costs. The San Diego Association of Governments (SAN DAG) has informed all cities and the County of San Diego the increase in the RTCIP fee for Fiscal Year (FY) 2026-27 is set at 2%. This will increase the City's RTCIP Traffic Mitigation Fee from $3,047.57 to $3,109.88 per new residential unit starting on July 1, 2026.

Recommended Action:

It is recommended the City Council adopt the attached Resolution (Attachment A) ordering the increase to the City's RTCIP Traffic Mitigation Fee for new residential units starting on July 1, 2026.

Discussion:

In November 2004, voters in San Diego County approved a 40-year extension to the existing TransNet program, which was first initiated in 1987. The Trans Net program was designed to fund improvements to the region's transportation system through a half-cent sales tax. In addition to the sales tax extension, the TransNet Ordinance mandates implementation of a local traffic mitigation fee to fund missing improvements on the Regional Arterial System. The local traffic mitigation fee, also known as the RTCIP Traffic Mitigation Fee, was set at $2,000 per residential dwelling unit starting on July 1, 2008.

Funds collected from this fee will be used for roadway and traffic signal improvements on Espola Road, Poway Road, Pomerado Road, Twin Peaks Road, Community Road, Ted Williams Parkway, Camino Del Norte and Scripps Poway Parkway.

On April 1, 2008, the City Council adopted the RTCIP Traffic Mitigation Fee pursuant to the TransNet Ordinance. The TransNet Ordinance mandates the adopted RTCIP Traffic Mitigation Fee for new residential dwelling units be adjusted annually for construction cost inflation, based on the 1 of 9
April 21, 2026, Item #4
construction cost index, but requires a minimum 2% annual increase. The fee increased by 2% on July 1 of each year from 2009 through 2014, 2.5% in 2015, 2% in 2016 and 2017, 3.3% in 2018, 2% each year from 2019 through 2023, 4.9% in 2024 and 6% in 2025. It is currently set at $3,047.57 per residential dwelling unit. SAN DAG has informed all the cities and the County of San Diego (Attachment B) the percentage increase for FY 2026-27 is set at 2%. The proposed increase is a return to the 2% minimum allowed by the Ordinance. Per SANDAG, this increase accounts for recent years' inflation and the Construction Cost Index. The recommended increase allows the RTCIP fee to continue to close the gap between rising construction costs and the purchasing power of the RTCIP fee. This will increase the City's RTCIP Traffic Mitigation Fee from $3,047.57 to $3,109.88 per residential unit starting July 1, 2026, FY 2026-27. The estimated annual revenue fluctuates based on the number of new residential building permits issued.

Environmental Review:

Based on the California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(4), the proposed request is a fiscal activity that is not considered a project. There is no activity that would result in a potentially significant physical impact on the environment, therefore this update to an existing City fee is exempt from CEQA.

Fiscal Impact:

Using the new fee of $3,109.88 per new residential dwelling unit and the anticipated development for next fiscal year, estimated revenue of $74,637.12 is projected for FY 2026-27. The anticipated development is a reduction in the number of dwelling units compared to the previous year.

Public Notification:

None.

Attachments:

A. Resolution
B. SAN DAG Agenda Item No. 3.8 dated February 27, 2026
Reviewed/Approved By:

Assistant City Manager
2 of 9
Reviewed By:

Alan Fenstermacher
City Attorney
Approved By:

Ch~ ns aze tine
City Manager
April 21, 2026, Item #4
RESOLUTION NO. 26-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
POWAY, CALIFORNIA, APPROVING A 2% INCREASE IN THE

REGIONAL TRANSPORTATION CONGESTION IMPROVEMENT

PROGRAM TRAFFIC MITIGATION FEE FOR THE FISCAL YEAR
2026-27, AS REQUIRED BY THE TRANSNET ORDINANCE
WHEREAS, in November 2004, voters in San Diego County approved a 40-year extension to the existing TransNet program to fund improvements to the region's transportation system; WHEREAS, the extension Ordinance requires local agencies to collect traffic mitigation fees, starting July 1, 2008, from residential dwelling units to fund the Regional Transportation Congestion Improvement Program (RTCIP) to ensure that new development directly invests in the region's transportation system to offset the negative impact of growth on congestion and mobility;
WHEREAS, on April 1, 2008, the City Council adopted the RTCIP Traffic Mitigation Fee of $2,000 per residential dwelling unit pursuant to Section 9A of the TransNet Ordinance; WHEREAS, Section 9A of the TransNet Ordinance also mandates that the RTCIP Traffic Mitigation Fee shall be increased annually, in an amount not to exceed the percentage increase set forth in the Engineering Construction Cost Index published by the Engineering News Record or similar cost of construction index with a minimum increase of 2%; WHEREAS, the City Council has adopted annual increases to the RTCIP Traffic Mitigation Fee and the current fee is $3,047.57 per residential dwelling unit, pursuant to Section 9A of the TransNet Ordinance;
WHEREAS, the San Diego Association of Governments (SAN DAG) has informed the City that the percentage increase in the RTCIP Traffic Mitigation Fee for Fiscal Year (FY) 2026-27 is set at 2%; and
WHEREAS, the City Council intends by this Resolution to increase the City's RTCIP Traffic Mitigation Fee from $3,047.57 to $3,109.88 per residential dwelling unit to meet the requirement of Section 9A of the TransNet Ordinance.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows:

SECTION 1: The City Council finds that the adoption of this Resolution is a fiscal activity that is not considered a project based on California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(4). There is no activity that would result in a potentially significant physical impact on the environment, therefore this update to an existing City fee is exempt from CEQA.

SECTION 2: The City Council, starting July 1, 2026, hereby increases the RTCIP Traffic Mitigation Fee from $3,047.57 to $3,109.88 per residential dwelling unit, regardless of type, to fund roadway and traffic signal improvements on Espola Road, Poway Road, Pomerado Road, Twin Peaks Road, Community Road, Ted Williams Parkway, Camino Del Norte and Scripps Poway Parkway considered part of the Regional Arterial System. 3 of 9 ATTACHMENT A
April 21, 2026, Item #4
Resolution
No
. 26-
Page
2 PASSED,

APPROVED
AND

ADOPTED
at
a
Regular
Meeting
of
the
City
Council
of
the
City
of
Poway,
California
on
the
21st
day
of
April,
2026
by
the
following
vote,
to
wit:

AYES: NOES: ABSTAINED: ABSENT: DISQUALIFIED:

Steve
Vaus,
Mayor
ATTEST: Carrie
Gallagher,
CMC,
City
Clerk
4 of
9 April 21, 2026, Item #4
SA Item: 3.8
Board of Directors February 27, 2026
TransNet Regional Transportation Congestion Improvement Program Proposed Fee Adjustment
Overview
The TransNet Extension Ordinance requires the
18 cities and the County of San Diego to collect a
Regional Transportation Congestion Improvement
Program (RTCIP) fee from developers for each new
housing unit constructed in their jurisdiction, with
certain exceptions, including low-income residential
units and accessory dwelling units. The fee's purpose
is to help ensure that future development contributes
its proportional share of the funding needed to pay for the impact of new growth on the Regional Arterial
System and related regional transportation facility
improvements as defined in the most recent Regional
Transportation Plan adopted by SANDAG.

Key Considerations
The Ordinance requires SANDAG to adjust the
minimum RTCIP fee amount on July 1 of each year,
Action: Approve
The Board of Directors is asked to approve a
2% adjustment to the Regional
Transportation Congestion Improvement
Program, raising the fee from $3,047.57 to
$3,109.88 beginning July 1, 2026.

Fiscal Impact:

The Regional Transportation Congestion
Improvement Program (RTCIP) fee would
increase from $3,047.57 to $3,109.88
beginning July 1, 2026.

Schedule/Scope Impact:

Pending SANDAG Board of Directors
approval, the adjusted RTCIP fee would
become effective July 1, 2026.
based on an analysis of construction cost indices. This annual adjustment is intended to preserve the program's purchasing power and ensure sufficient funding to address future inflation and continue improvements on the Regional Arterial System. The minimum annual adjustment required by the Ordinance is 2%.

Based on an analysis of construction cost trends and relevant indices, staff recommended a 2% fee adjustment to the RTCIP, raising the minimum RTCIP fee from $3,047.57 to $3,109.88 beginning July 1, 2026 (Attachment 1 ). This increase accounts for recent years' inflation and the Construction Cost Index, which has accelerated from its previous low pace. The Independent Taxpayer Oversight Committee was presented with the item at its February 11, 2026, meeting (Item 3.3).

Next Steps
In accordance with Ordinance provisions, each jurisdiction's RTCIP funding program must be submitted for review by the ITOC by April 1 of each year to remain eligible for TransNet Local Street and Road funding. The annual submittal of RTCIP funding programs by local jurisdictions is scheduled for review at the April 8, 2026, ITOC meeting.

Susan Huntington, Director of Financial Planning, Budgets, and Grants Attachment: 1. Discussion Memo
5 of 9 ATTACHMENT B Agenda Packet 93 of 186
April 21, 2026, Item #4
Attachment 1
Discussion Memo
Background
The RTCIP has been implemented in the San Diego region since July 1, 2008. Annual RTCIP fee adjustments, funding program reports, and related audits can be found on the RTCIP page of the SANDAG website. Relevant policy excerpts can be referenced in the TransNet Ordinance and SANDAG Board Policy No. 031: TransNet Ordinance and Expenditure Plan Rules.

Construction Cost Increases
SANDAG staff evaluated changes recorded in the ENR Construction Cost Index for Los Angeles (ENR CCI-LA}. 1 The index is based on monthly price changes in four areas: lumber, cement, structural steel, and labor. It helps track construction cost fluctuations over time.

Chart 1 shows annual increases in the ENR CCI-LA since FY 2009. For over a decade (from FY 201 0 through FY 2021 ), construction costs rose by less than 4% per year. FY 2022 marked the first sharp rise in costs (7.9%) and was followed by two more years of strong cost increase (4.9% in FY 2023 and 10% in FY 2024 ). The data available for FY 2025 and FY 2026 show an abrupt drop in cost growth. Construction costs averaged 2.62% in FY 2025. Data for the first four months of FY 2026 (July to October 2025) shows a 3.9% increase over the same four months in the preceding fiscal year. The slower growth is a welcome change. It suggests that construction costs continue to feel upward pressure but are rising at a slower rate than general inflation.
10%
8%
Q)
Ol
C 6.1% cu
.J:: 6% (.)
cii
::i
C
4% C
<t:
2%
0%
Chart 1. Engineering New-Record Construction Cost Index - Los Angeles: Average Fiscal Year Change
*FY 2026 reflect a partial year from July-October

10.0%

7.9%

4.9%

3.8% 3.9%

2.6%2.9%

2. 2% 1.8%

2.6%

3.9%
1 ENR produces construction cost indices for 20 US cities. SANDAG uses the Los Angeles index as the closest approximation of construction cost trends for the San Diego region. 6 of 9 Agenda Packet 94 of 186
April 21, 2026, Item #4
RTCIP Fee Increase Recommendation
Each year, SAN DAG recommends an increase in the RTCIP fee as required by the Ordinance. Staff typically bring this recommendation to the Independent Taxpayer Oversight Committee (ITOC) in February. The approved fee increase takes effect at the start of the new fiscal year (July 1 ).

Fee increases are intended to preserve purchasing power. Chart 2 compares the annual increases for the RTCIP fee to CCI. Between FY 2009 and FY 2025, construction costs rose by more than 2% in nine years and by less than 2% in seven years. However, the RTCIP fee itself has exceeded the 2%-minimum only four times since FY 2009:
• 2.5% in FY 2016,
• 3.3% in FY 2019,
• 4.9% in FY 2025, and
• 6% in FY 2026.

Note, CCI data for FY 2026 is not complete. However, the first four months are tracking around 3.9% higher than in the same four months of the previous year. 10%
8%
6%
4%
2%
0%
Chart 2. Annual Increases: RTCIP Fee and CCI
*CCI for FY26 reflects a partial year from July-October

3.3%

2.5%
■ RTCIP Fee Increase -■ CCI

6.0%

4.9%
Chart 3 shows RTCIP fees and annual increases since FY 2009. FY 2025 and FY 2026 represent the largest annual adjustments to date, responding to several consecutive years of sizable construction cost increases. Between FY 2021 and FY 2024, construction costs rose by 25%, while the RTCIP fee grew by only 6%, creating a noticeable gap. The FY 2025 and FY 2026 fee increases helped to close this gap. 7 of 9 Agenda Packet 95 of 186
April 21, 2026, Item #4
Chart 3. RTCIP Fee and Annual Increases
RTCIP Incremental RTCIP¾ CCI
Fee Increase ($) increase Increase
FY 2009 $2,000.00 $-0.0% 6.1%
FY 2010 $2,040.00 $ 40.00 2.0% 1.0%
FY 2011 $2,081.00 $ 41.00 2.0% 2.2%
FY 2012 $2,123.00 $ 42.00 2.0% 1.4%
FY 2013 $2,165.00 $ 42.00 2.0% 1.3%
FY 2014 $2,209.00 $ 44.00 2.0% 3.8%
FY 2015 $2,254.00 $ 45.00 2.0% 1.8%
FY 2016 $2,310.00 $ 56.00 2.5% 2.6%
FY 2017 $2,357.00 • $ 47.00 2.0% 2.9%
FY 2018 $2,404.14 $47.14 2.0% 3.9%
FY 2019 $2,483.48 $ 79.34 3.3% 1.0%
FY 2020 $2,533.15 $ 49.67 2.0% 0.2%
FY 2021 $2,583.82 $ 50.67 2.0% 1.5%
FY 2022 $2,635.50 $ 51.68 2.0% 7.9%
FY 2023 $2,688.21 $ 52.71 2.0% 4.9%
FY 2024 $2,741.97 $ 53.76 2.0% 10.0%
FY 2025 $2,875.06 $ 133.09 4.9% 2.6%
FY 2026 $3,047.57 $ 230.01 6.0% 3.9%*
FY 2027 (recommended) $3109.88 $60.98 2.0%
*CCI increase for FY26 reflects only July through October data.

Staff Recommendation
In light of the economic uncertainty -particularly given the rapidly evolving trade policy that is impacting the supply chain for construction materials -staff recommend a 2% increase (equivalent to $60.98) to the RTCIP fee for FY 2027. This proposed increase is a return to the 2% minimum allowed by the Ordinance.

Chart 4 illustrates that the recommended increase allows the RTCIP fee to continue to close the gap between rising construction costs and the purchasing power of the RTCIP fee. At the same time, it is striking a balance between two objectives -reducing the risk of further erosion in the RTCIP's purchasing power and ensuring continued investment in critical transportation infrastructure, while simultaneously recognizing the challenges of housing affordability in the region. 8 of 9 Agenda Packet 96 of 186
April 21, 2026, Item #4
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II
Cl)
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~
.c
3 0 I...

C)
"O
Q)
X
Q)
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9 of 9

1.7 1.6

1.5 1.4

1.3 1.2

1.1 1
Chart 4. CCI and RTCIP Growth Since FY 2009
*Based on four six months of FY 2026
**Based on recommendation for FY 2027
FY27
Recommended
Fee Increase:
2%
~ ~ ~ ~ 0 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ {
~0000000000000000~~
-RTCIP -CCI
Agenda Packet 97 of 186
April 21, 2026, Item #5
DATE:

TO:

FROM:

CONTACT:

SUBJECT:

Summary:

AGENDA REPORT CityofPoway
April 21, 2026
Honorable Mayor and Members of the City Council
Eric Heidemann, Director of Public Works f.-,)((
Carlos Cortes, Utilities Administrator (ft;.£
(858) 668-4703 or [email protected]

CITY COUNCIL
Resolution Approving an Amended Water Rights Agreement with the City of San Diego and Authorizing an Appropriation for Retroactive Replacement Water Charges for Calendar Years 2017-2025
In 1968, the Poway Municipal Water District (PMWD) entered into a Water Rights Agreement (1968 Agreement) with the City of San Diego (San Diego) to resolve a protest related to San Diego's prior downstream water rights at Hodges Dam and to secure the permits necessary to construct Poway Dam. The 1968 Agreement requires the City of Poway (as successor to PMWD in 1980) to measure surface water diversions and provide replacement water to offset downstream impacts as surface water flows are diverted away from San Diego by the Poway Dam and stored in the Lake Poway reservoir.

Following completion of Poway Dam in 1971, the parties informally shifted from the 1968 Agreement's original measurement method to hydrology-based calculations and a compensatory replacement approach. Between 1972 and 1998, these methods resulted in ongoing disputes, technical studies, and unsuccessful attempts to formalize revisions. Although Poway continued reporting flows, San Diego ceased invoicing after 1992.

In Fall 2018, Poway staff discovered the lapse and notified San Diego of this apparent oversight to resume water rights administration and revise the outdated provisions. Since 2019, both agencies have negotiated terms, methodology, retroactive compensation, and resolution of past obligations.

In January 2026, staff reached consensus on an Amended Water Rights Agreement (2026 Agreement), which establishes updated procedures, includes a negotiated lump sum payment for 2017-2025, and provides a mutual waiver of prior claims.

Recommended Action:

It is recommended the City Council approve the Resolution adopting the Amended Water Rights Agreement with the City of San Diego and authorizing an appropriation for retroactive replacement 1 of31
April 21, 2026, Item #5
water charges for calendar years 2017 to 2025 from the Water Fund Balance in the amount of $441,866 to the Water, Supply, & Storage, Replacement Water Agreement account (402060-28070) shown in the Fiscal Impact section of this report.

Discussion:

During the 1960s, PMWD determined that a large raw water reservoir was needed to equalize seasonal water demand and provide year-round emergency storage for approximately 30,000 municipal and industrial (M&I) customers including over 970 agricultural acres. PMWD developed plans for Poway Dam, designed to store imported water supplies from the San Diego County Water Authority (SDCWA) within the existing Warren Canyon Valley (Warren Canyon) and create Lake Poway.

To construct Poway Dam and the Lake Poway reservoir, PMWD was required to obtain an appropriative water rights permit from the State Water Resources Control Board (SWRCB) Division of Water Rights. The SWRCB is the regulatory body responsible for authorizing water rights diversions and ensuring their beneficial use.

In May 1965, following PMWD's application, San Diego filed a formal protest, citing its prior appropriative rights associated with Lake Hodges, located downstream within the same watershed.

San Diego held senior water rights within the San Dieguito River watershed, including rights to flows originating upstream of the proposed Poway Dam. San Diego asserted that flows from the unnamed intermittent stream in Warren Canyon were subject to its existing rights and objected to PMWD's proposed diversion into Lake Poway.

Following these discussions, PMWD and San Diego entered into the 1968 Agreement to address impacts to San Diego's senior water rights and establish PMWD's obligation to offset diversions through "replacement water."
In 1969, subject to the 1968 Agreement, the SWRCB issued Permit No. 15840 for the Diversion and Use of Water to PMWD, authorizing the construction of Poway Dam and an initial appropriation of water use set at 1,700 acre-feet (AF). Following incorporation of the City of Poway in 1980, the permit and 1968 Agreement transferred to the City as successor in interest.

Following more than a decade of review by the SWRCB and PMWD water resource engineers, the diversion permit was superseded by the 1986 License No. 12155 for Diversion and Use of Water establishing the following key conditions for Poway:
• Reduced annual diversions to 858 AF based on wet-year flows (582 AF during 1978 water year) • Limited diversion to the storage season (November 1 through May 31) • Required release of water collected outside the storage season Uune-October) Under the 1968 Agreement, following completion of Poway Dam in 1971, PMWD was required to annually provide San Diego with replacement water equal to 50% of total inflows to Lake Poway. This obligation was to be satisfied each October through a water transfer to San Diego at San Vicente Reservoir via the SDCWA aqueduct.

Runoff was to be measured using an overflow weir installed in the stream bed and defined to exclude subsurface flows. The 1968 Agreement also established a credit mechanism under which releases from Lake Hodges would offset PMWD's replacement water obligation at a 50% rate, as release volumes are not considered a beneficial use by the right holder. 2 of31
April 21, 2026, Item #5
In the decades following execution of the 1968 Agreement, the agencies engaged in periodic discussions regarding implementation, resulting in extensive correspondence, informal and unexecuted addenda, and a draft amendment prepared in 1982. Key recurring topics included:
• Payment in lieu of physical water delivery
• Alternative methods for estimating inflows
• Eligibility of seepage losses and downstream releases for credit Correspondence from approximately 1977 through 1998 indicates that both agencies generally accepted:
• Payment in lieu based on the prevailing SDCWA M&I rate • Hydrologic estimation methods in lieu of physical measurement Implementation of transfer and billing provisions remained a significant source of discrepancy between the parties. Billing and payments were frequently delayed, disputed, and protracted. In 1981, nearly a decade of retroactive replacement water obligations was consolidated for City Council authorization, reconciling obligations dating back to 1971. San Diego continued issuing invoices intermittently through 1992, when a final invoice of $33,503.61 was issued and paid. No further invoices were received thereafter.

In September 2018, after approximately 20 years without formal correspondence and 26 years without invoicing, Poway staff identified the lapse and reinitiated coordination with San Diego. Despite the absence of invoices, Poway had continued providing hydrologic data, including lake levels and inflow estimates.

In May 2019, both parties began discussions to reconcile past obligations, limited to the applicable four-year statute of limitations and mutually agreed to establish 2017 as the baseline year for Poway's retroactive obligations, and initiated a multi-year effort to update the 1968 Agreement to reflect current operational practices. In a good faith effort to prioritize sound negotiations, Poway agreed that the baseline period would remain the same even as years of negotiations progressed. Multiple draft iterations resulted in the proposed 2026 Amended Water Rights Agreement whose key elements include:
• Updated methodology for alternative measurements based on 1 % of Lake Hodges inflows • Requirement to install an upstream metering device within five years • Waiver of prior financial obligations
• Formalization of Payment in lieu of water delivery based on the prevailing SDCWA M&I rate • Lump-sum payment for retroactive replacement obligations within the statute of limitations • Credit to Poway for Hodges Dam releases for 10 years or until completion of required repairs While the 2026 Agreement requires installation of an upstream metering device within five years, it also establishes a proportional watershed approach for estimating inflows when direct measurement is unavailable. Because Lake Poway's catchment area (2.44 square miles) is approximately 1 % of the Lake Hodges watershed, Poway's diversions are estimated as 1 % of Lake Hodges inflows. Consistent with the 1968 Agreement, Poway's replacement water obligation remains 50% of that volume (i.e.,

0.5% of Lake Hodges inflows).

In advance of the 2026 Agreement and to improve internal tracking of local runoff, Poway Initiated the design and permitting efforts for the permanent upstream measuring device and associated 3 of31
April 21, 2026, Item #5
culvert
in
2024,
with
construction
anticipated
in
a future
fiscal
year.

The
2026
Agreement
also
formalizes
the
longstanding
practice
of
financial
compensation
in
lieu
of
physical
water
transfers
based
on
the
current
SDCWA
M&I
rate.

The
2026
Agreement
includes
a
waiver
of
prior
claims
and
establishes
a
lump-sum
payment
of
$534,266
for
531
acre-feet
of
replacement
water
for
the
period
2017
through
2025,
as
detailed
in
Exhibit
B
of
Attachment
A.

Approval
of
the
2026
Agreement
resolves
long-standing
administrative
uncertainty,
limits
financial
exposure
of
prior
obligations,
and
establishes
a
clear
and
enforceable
framework
for
future
compliance
within
the
intended
purpose
of
the
1968
Agreement.

Following
approval
of
the
attached
resolution
by
Poway's
City
Council,
San
Diego
staff
will
present
the
2026
Agreement
to
San
Diego's
City
CoLJncil
for
consideration
and
approval.

Upon
adoption
by
both
parties,
the
Agreement
will
serve
as
the
interagency
framework
governing
water
rights
within
the
watershed
until
amended
by
mutual
consent.

San
Diego
will
invoice
Poway
retroactively
upon
adoption
of
the
2026
Agreement
and
will
resume
standard
calendar-year
billing
cycles,
with payments
due
March
15 of
each
year
beginning
in
2026.

Environmental
Review:

This
action
is
not
subject
to
review
under
the
California
Environmental
Quality
Act
{CEQA).

Fiscal
Impact:

Each
year,
City
staff
proactively
budget
for
annual
replacement
water
costs
as
outlined
in
the
existing
1968
Agreement.

Based
on
the
timing
of
the
2026
Agreement
and
the
anticipated
lump-sum
invoice,
a
one-time
payment
for
retroactive
replacement
water
for
calendar
years
2017
through
2025
will
be
made
with
funds
from
the
Water
Fund
(5100)
and
from
the
division's
operating
budget.

The
total
cost
of
this
one-time
payment
is
$534,266.

A
portion
of
the
cost
in
the
amount
of
$92,400
will
come
from
Fiscal
Year
2025-26
Water
Supply,
Treatment
&
Storage,
Replacement
Water
Agreement
account
(402060-28070)
. An
additional
appropriation
of
$441,866
to
the
Water
Supply,
Treatment,
&
Storage
account
(402060-28070)
from
the
Water
Fund
(5100)
is
requested
as
part
of
the
recommended
action.

The
2026
Agreement
also
re-establishes
the
City
of
Poway's
ongoing
annual
obligation
to
provide
replacement
water
calculated
using
an
updated
methodology
and
requires
Poway
to
install
a
permanent
upstream
measuring
device
and
associated
culvert
during
a future
fiscal
year.

This
project
is
anticipated
to
cost
under
$200,000
and
will
be
budgeted
in
the
capital
improvement
program
during
a future
fiscal
year.

Public
Notification:

A
copy
of
this
report
was
provided
to
the
City
of
San
Diego
Public
Utilities
Department.

Attachments: A.

Resolution
for
the
2026
Water
Rights
Agreement
B.
2026
Water
Rights
Agreement
C.
1968
Water
Rights
Agreement
4 of31
April 21, 2026, Item #5
Reviewed/
Approved
By:

Assistant
City
Manager
5 of
31 Reviewed
By
:

Alan
Fenstermacher
City
Attorney
Approved
By
:
c~ City
Manager
April 21, 2026, Item #5
RESOLUTION NO. 26-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

POWAY, CALIFORNIA, APPROVING THE AMENDED WATER

RIGHTS AGREEMENT WITH THE CITY OF SAN DIEGO AND

AUTHORIZING AN APPROPRIATION FOR RETROACTIVE

REPLACEMENT WATER CHARGES FOR CALENDAR YEARS
2017 TO 2025
WHEREAS, during the 1960s, the Poway Municipal Water District (PMWD) determined that a raw water reservoir was necessary to equalize seasonal demand and provide emergency storage, resulting in the development of Poway Dam and Lake Poway; WHEREAS, construction of Poway Dam required PMWD to obtain an appropriative water rights permit from the State Water Resources Control Board (SWRCB); WHEREAS, in 1965, the City of San Diego filed a protest to PMWD's application citing its senior appropriative water rights within the San Dieguito River watershed, including downstream rights associated with Lake Hodges;
WHEREAS, in 1968, PMWD and the City of San Diego entered into a Water Rights Agreement (1968 Agreement) to address impacts to San Diego's senior water rights and establish PMWD's obligation to provide replacement water;
WHEREAS, in 1969, the SWRCB issued Permit No. 15840 to PMWD, and in 1986 issued License No. 12155, establishing conditions for diversion and use of water at Lake Poway; WHEREAS, the 1968 Agreement required PMWD, and subsequently the City of Poway as successor in interest in 1980, to provide replacement water to the City of San Diego equal to fifty percent (50%) of total inflows to Lake Poway;
WHEREAS, over time, the parties developed informal practices regarding payment in lieu of physical water delivery, alternative methods of inflow estimation, and billing procedures, resulting in inconsistencies and administrative uncertainty; WHEREAS, after a prolonged period without invoicing, the City of Poway reinitiated coordination with the City of San Diego in 2018 to reconcile replacement water obligations and update the 1968 Agreement;
WHEREAS, the City of Poway and the City of San Diego have negotiated an Amended Water Rights Agreement (2026 Agreement) to reflect current operational practices, establish a clear methodology for calculating replacement water obligations, and resolve outstanding issues; WHEREAS, the 2026 Agreement includes provisions for updated inflow estimation based on a proportional watershed methodology, installation of an upstream metering device within five years, formalization of payment in lieu of water delivery based on the prevailing San Diego County Water Authority municipal and industrial rate, a waiver of prior claims, and a lump-sum payment for replacement water obligations for the agreed-upon period of 2017 through 2025; WHEREAS, the total retroactive replacement water obligation under the 2026 Agreement is $534,266, of which $92,400 is budgeted in Fiscal Year 2026-27, and an additional appropriation 6 of31 ATTACHMENT A
April 21, 2026, Item #5
of
$441,866
from
the
Water
Fund
Balance
is
required;
Resolution
No.
26-
Page
2 WHEREAS,
approval
of
the
2026
Agreement
will
resolve
long-standing
administrative
uncertainty,
limit
financial
exposure,
and
establish
a
clear
and
enforceable
framework
for
future
compliance;
and
NOW,

THEREFORE,
BE
IT

RESOLVED
by
the
City
Council
of
the
City
of
Poway
as
follows:

1. The
City
Council
approves
the
Amended
Water
Rights
Agreement
between
the
City
of
Poway
and
the
City
of
San
Diego
in
a form
substantially
similar
to
the
Agreement
attached
to
the
staff
report,
subject
to
non-substantive
revisions
approved
by
the
City
Manager.

2. The
City
Manager,
or
in
the
absence
of
the
City
Manager,
the
Assistant
City
Manager,
is
hereby
authorized
to
execute
the
Amended
Water
Rights
Agreement
on
behalf
of
the
City
of
Poway.

3. The
City
Council
authorizes
an
appropriation
in
the
amount
of
$441,866
from
the
Water
Fund
for
retroactive
replacement
water
charges.

PASSED,

APPROVED
AND

ADOPTED
at
a
Regular
Meeting
of
the
City
Council
of
the
City
of
Poway,
California
on
the
21st
day
of
April,
2026
by
the
following
vote,
to
wit:

AYES: NOES: ABSTAINED
:

ABSENT
:

DISQUALIFIED:

Steve
Vaus,
Mayor
ATTEST
:

Carrie
Gallagher,
CMC,
City
Clerk
7 of31
April 21, 2026, Item #5
WATER
RIGHTS

AGREEMENT

BETWEEN
THE
CITY
OF
SAN
DIEGO
AND
THE
CITY
OF
POWAY

AGREEMENT
This
Agreement
is
entered
into
by
and
between
the
City
of
San
Diego,
a
municipal
corporation
(City),
and
the
City
of
Poway,
a municipal
corporation
and
the
successor
in
interest
to
the
Poway
Municipal
Water
District,
a district
organized
under
the
Municipal
Water
District
Act
of
1911
(Poway),
(collectively,
the
Parties).

DEFINITIONS
In
this
Agreement,
unless
the
context
clearly
indicates
otherwise,
the
following
words
and
expressions
shall
have
the
meaning
ascribed:
8 of31
A.

CITY:

The
City
of
San
Diego,
a municipal
corporation
organized
and
existing
under
the
laws
of
the
State
of
California.

B.

POWAY:

The
City
of
Poway,
a municipal
corporation
organized
and
existing
under
the
laws
of
the
State
of
California,
and
the
successor
in
interest
to
the
Poway
Municipal
Water
District.

C.

POWAY
DAM:

Lake
Poway
Reservoir
and
Poway
Dam,
Division
of
Safety
of
Dams,
Dam
No.
1078
(referenced
in
the
1968
Agreement
as
"Warren
Canyon
Dam")
owned
and
operated
by
the
City
of
Poway,
located
at
North
57°45'
East
1,672
feet
from
Southwest
corner
of
Section
Township
13 South,
Range
1 West SBM,
being
within
SW¼
of
SW¼
of
said
Section
29,
in
the
County
of
San
Diego,
State
of
California.

D.

LAKE
HODGES
DAM:

Lake
Hodges
Dam
owned
and
operated
by
the
City
of
San
Diego,
located
at
the
Southeast
¼
of
the
Northeast
¼
of
Section
18 , Township
13 South,
Range
2 West SBM,
in
the
County
of
San
Diego,
State
of
California.

E.

APPLICATION
NO.
22093:

Application
filed
by
the
City
of
Poway
with
the
Division
of
Water
Rights,
State
Water
Resources
Control Board (SWRCB)
on
April
1,
1965,
for
a permit
to
appropriate
water
from
the
unnamed
stream
in
Warren
Canyon
and
arising
from
the
watershed
of
that
stream
which
is
a tributary
to
the
San
Dieguito
River.

F.

PROTEST:

Protests
to
Application
No.
22093,
filed
on
December
24,
1965
and
December
24,
1965
by
the
City
of
San
Diego,
based
on
prior
appropriation
and
beneficial
use
of
the
waters
of
the
San
Dieguito
River.

Page
1 of
15 ATTACHMENT
B
April 21, 2026, Item #5
G. 1968 AGREEEMENT: The Water Rights Agreement dated October 23, 1968, entered into by Poway and the City of San Diego to resolve the City's protest and recognize and make provisions for the protection of the City's prior rights to runoff which may be impounded by the unnamed stream tributary to San Dieguito River.

H. REPLACEMENT WATER: One-half of the annual measured runoff from the unnamed stream into Lake Poway, which Poway so undertakes to provide compensation to City.

I. METERED RUNOFF MEASUREMENT: The volume of surface flows into Lake Poway through the unnamed stream as measured by a suitable flow measurement device in the streambed, such as a meter Poway will complete installation of mentioned meter within 5 years of execution of this agreement.

J. CALCULATED (ALTERNATIVE) RUNOFF MEASUREMENT: The agreed upon method for estimating surface flows is by calculating the Poway catchment area at 1 % of Hodges catchment area. This method is detailed in Exhibit "B" as the calculated, or alternative, runoff measurement methodology. Parties may use this runoff measurement methodology to calculate surface flows in lieu of a meter, until the meter is installed or when the meter in not operable.

K. SPILL EVENT: When Lake Hodges water is spilling over Lake Hodges Dam.

L. ANNUAL PAYMENT: Poway' s annual per-acre foot payment to the City for one-half the annual measured runoff from the unnamed stream into Lake Poway, referred to as Replacement Water. The rate per acre foot cost of the Replacement Water will be based on the San Diego County Water Authority's (SDCWA) Melded Untreated M&I Supply Rate for the respective calendar year until such time as the City's costs per-acre foot for Repurified Water are less than the SDCW A's supply rate. ..

M. ANNUAL MEASURED RUNOFF: The volume of water that flows into Lake Poway between January 1 to December 31 from the unnamed stream in Warren Canyon ("Unnamed Stream"), as measured by a flow measurement device, or as calculated by the alternative runoff measurement. It shall not include any subsurface water which may seep into the Lake without recordation by the meter, or rainfall which may occur directly on the reservoir surface.

RECITALS
A. City is the owner of a water system including reservoirs and other works for the impounding, diversion and distribution of water to its residents, and in the operation of such system diverts and impounds water from the stream system known as San Dieguito River and its tributaries. City's point of diversion (in so far as this Agreement is concerned) is located at Hodges Dam in the Southeast Quarter of the Northwest Quarter of Section 18, Township 13 South, Range 2 West SBM, in the County of San Diego, State of California.

9 of31
April 21, 2026, Item #5
B. Poway is the owner of a water system, including reservoirs and other works for impounding, diversion and distribution to its residents and in the operation of such system diverts and impounds water from an unnamed stream in Warren Canyon, which is part of the system known as San Dieguito River watershed and its tributaries. Poway's point of diversion (in so far as this Agreement is concerned) is located at Lake Poway Reservoir and Poway Dam (referenced in the 1968 Agreement as "Warren Canyon Dam") at North 57°45' East 1,672 feet from Southwest corner of Section Township 13 South, Range 1 West SBM, being within SW¼ of SW¼ of said Section 29, in the County of San Diego, State of California.

C. Poway filed an application (Application No. 22093) with the Division of Water Rights, State Water Resources Control Board (SWRCB) for a permit to appropriate water from the unnamed stream and arising from the watershed of that stream which is a tributary to the San Dieguito River in order to build Poway Dam. When the request for a permit to appropriate water came before the SWRCB, the City filed a formal protest (Protest).

D. Poway and City previously entered into a Water Rights Agreement, dated October 23, 1968 (1968 Agreement), to resolve the City's Protest and recognize and make provisions for the protection of the City's prior rights to runoff which may be impounded by the unnamed stream tributary to San Dieguito River.

E. The 1968 Agreement provided the method for measuring runoff and replacement water at the Warren Canyon Dam along with Parties rights to the water. The 1968 Agreement was last enforced in 1993.

F. The Parties agree that the amount owed to the City under the 1968 Agreement from 2017 to 2025 is $534,266.00.

G. City and Poway wish to enter into an agreement to replace the 1968 Agreement and provide a method of measurement or calculation of local water to exchange between the Parties.

H. Poway agrees to provide to City compensation equal to one-half (1/2) of the Annual Measured Runoff of tributaries of Warren Canyon, as that term is defined in this Agreement. City agrees to accept such delivery in full satisfaction and recognition of all rights it may have in and to the natural runoff from the watershed tributary to Poway Dam. The water which Poway so undertakes to provide compensation to City is referred to in this Agreement as "Replacement Water."
I. Poway is a municipal corporation organized and existing under the laws of the State of California, and the successor in interest to the Poway Municipal Water District, a district organized under the Municipal Water District Act of 1911. Poway is an Agency as defined in San Diego Municipal Code (SDMC) section 22.3003.

J. Pursuant to SDMC section 22.3210, the Purchasing Agent has certified that this Agreement is exempt from competitive bidding requirements because this Agreement furthers a specific public policy, is in the public interest, and does not exceed the threshold set forth in the SDMC.

10 of 31
April 21, 2026, Item #5
NOW,

THEREFORE,
for
good
and
valuable
consideration, the
sufficiency
of
which
is
acknowledged,
City
and
Poway
agree
as
follows:

I.

Waiver
of
Prior
Claims
Each
Party
hereby
waives,
releases
and
forever
discharges
all
prior
claims
against
the
other
Party
with
respect
to
replacement
water,
any
other
payments
due,
and
all
other
obligations
set
forth
in
the
1968
Agreement.

In
consideration
for
this
waiver
and
the
City's
covenants
set
forth
in
this
agreement,
Poway
agrees
to
pay
the
City
for
Replacement
Water,
pursuant
to
Section
9 of
this
Agreement,
for
the
years
2017
through
2025
in
the
amount
of
$534,266.00.

This
amount represents
the
total
amount
due
for
years
2017
through
2025
as
provided
under
the
1968
Agreement
and
accounts
for
half
of
the
I%
of
Hodges
catchment
area,
which
is
representative
of
Poway's
catchment
area,
according
to
the
"Alternative"
method.

The
calculation
of
this
amount
is
shown
in
Exhibit
"B".

Poway
agrees
to
make
a payment
equivalent
to
the
value,
as
calculated
pursuant
to
Section
9 of
this
Agreement,
of
one-half
( 1/2)
of
the
Annual
Measured
Runoff
as
that
term
is
defined
in
this
Agreement,
to
be
delivered
to
City
annually.

City
agrees
to
accept
such delivery
in
full
satisfaction
and
recognition
of
whatever
rights
it
might
have
in
and
to
the
natural
runoff
from
the
watershed
tributary
to
Poway
Dam.

The
water
which
Poway
undertakes
to
provide
compensation
to
City
is
referred
to
as
"Replacement
Water."

2. Runoff
Measurement
and
Delivery
Poway
will
install
a
flow
measurement
device
(Meter)
in
the
stream
bed
of
the
Unnamed
Stream.

Poway
will
design,
construct,
permit
and
maintain
the
Meter
at
its
sole
expense
. In
general,
the
Meter
should
be
equipped
with
an
automatic
recording
device
and
be
designed
so
that
all
surface
flow
occurring
in
the
Unnamed
Stream
will
pass
through
it before
reaching
the
waters
impounded
by
Poway
Dam.

The
design
and
size
of
the
Meter
shall
be
approved
by
the
City
prior
to
installation.

The
City
shall
not
unreasonably
withhold
approval
of
any
plans.

The
Alternative
Runoff
Calculation
may be
used
when
the
Meter
is
inoperable.

Thereafter,
Poway
will,
on
or
before
the
I 5
th
day
of
each
calendar
month,
furnish
City
with
a statement
setting
forth
the
total
volume
of
flow
measured
by
the
Meter and
impounded
by
Poway
Dam,
for
the
previous
month.

3. Spill
Event
The
Parties
agree
that
in
the
event
Lake
Hodges
Dam
water
spills
over
the
spillway
during
the
rainy
season,
City
will
reduce
the
amount
of
Annual
Measured
Runoff
by
the spill
total
volume,
due
to
the
City's
inability
to
collect
the
runoff
and
put
to
beneficial
use
the
volume
of
water
spilled.

4. Replacement,
Repair
or
Construction
of
Hodges
Dam
The
Parties
recognize
that
Lake
Hodges
Dam
is
currently
under
consideration
by
the
City
for
multiple
administrative
options
including,
but
not
limited
to,
new
construction
associated
with
either
replacement
or
repair
of
the
current
Dam.

As
the
City
evaluates
various
options
Page
4 of
15 11
of
31 April 21, 2026, Item #5
for
its
continued
interests
in
the
Hodges
reservoir
and any
existing
rights
to
inflow
into
the
watershed,
it
is
understood
that
the
maximum
elevation
levels
at
Hodges
Dam
for
this
period
will
likely
be
reduced,
preventing
a spill
event
from
occurring.

During
the
period
of
replacement
or
repair
of
Hodges
Dam
or
ten
years
from
the
execution
of
this
Agreement,
whichever
occurs
first,
the
amount
calculated
under
section
2 of
this
Agreement
shall
be
reduced
by
the
amount
of
any
water
release
initiated
by
the
City that
otherwise
would
not
be
considered
a Spill
Event
under
section

3. This
section
is
only
intended
to
apply
for
the
duration
of
any
replacement
of
Hodges
Dam
or
repair
or
any
retrofit
to
the
current
dam
structure
or
a period
not
to
extend
beyond
ten
years
from
the
date
of
execution
of
this
Agreement,
whichever
occurs
first.

After
this
period,
the
Parties
will
calculate
the
amount
owed
to
the
City
for
any
diversion
of
inflow
to
the
Hodges
watershed
per
section

2. The
City
shall
retain
its
rights
to
inflow
regardless
of
the
option
the
City
chooses
to
exercise
in
concern
to
Hodges.

Any
future
releases,
elevation
reductions
for
normal
repair
and
maintenance,
other
administrative
or
operational
decisions
concerning
the
City's
right
to
inflow,
are
not
considered
Spill
Events
under
section
3 and
would
be
calculated
as
part
of
the
normal
replacement
water
method
under
this
Agreement.

5. Maintenance
of
Meter

5.1 Calibration
of
Equipment.

Poway
shall
be
responsible
for
maintaining
the
Meter
in
good
order
and
condition.

Poway
shall
repair
or
replace,
at
its
sole
expense,
any
or
all
components
of
the
Meter
should
they
interfere
with accurate
readings.

Poway
shall
conduct
tests,
as
necessary
or
when
requested
by
City,
to
determine
the
accuracy
of
the
Meter.

Poway
shall
notify
City
at
least
forty-eight
hours
in
advance
of
the
time
and
location
of
such
test.

5.2 Access
to
Measuring Equipment.

During
normal
business
hours,
City
shall
have
access
to
the
Meter
and
records
pertinent
to
the
Meter.

Poway
will
provide
the
data
and
records
with
respect
to
matters
covered
by
this
Agreement.
5 .3
Verification
of
Calibration.

At
its
sole
cost
and
expense,
City
shall
have
the
right
to
independently
test
the
Meter
at
any
time
during
normal
business
hours
upon
forty­
eight
hours
prior
notice
to
Poway.

Poway
shall
have
the
right
to
monitor
such
tests.

5.4 Measuring Equipment
Disputes.

In
the
event
of
a dispute
between
City
and
Poway
regarding the
accuracy
of
the
Meter
used
by
Poway,
City
and
Poway
may
mutually
agree
to
have
an
independent
accuracy
test
conducted.

Such
test
shall
be
conducted
by
an
independent
measuring
equipment
company
or
other
third
Party
suitable
to
both
City
and
Poway.

The
cost
of
the
test
shall
be
paid
equally
by
City
and
Poway.

6. Period
of
Agreement
This
Agreement
shall
be
effective
on
the
date
it
is
executed
by
the
last
Party
to
sign
the
Agreement
and
approved
by
the
City
Attorney
in
accordance
with
San
Diego
Charter
Section

40. Page
5 of
15 12
of
31 April 21, 2026, Item #5

7. Annual
Payment
Date
Poway
will
make
an
Annual
Payment,
as
provided
in
section
9,
to
the
City
on
or
before
March
15 of
each
calendar
year.

If
the
Effective
Date
of
this
Agreement
does
not
fall
on
January
1 of
the
first
calendar
year,
then
the
Annual
Payment
Amount shall
be
prorated
based
on
the
number
of
days
of
the
calendar
year
remaining
in
that
calendar
year,
and
Poway
shall
make
a payment
in
that
amount
within
thirty
(30)
days
of
the
Effective
Date
of
the
Agreement. The
Parties
agree
to
use
the
San
Diego
County
Water
Authority
(SDCWA)
Melded
Untreated
M&I
Supply
Rate
for
the
respective
calendar
year
for
the
per
acre
foot
cost
for
Replacement
Water
as
measured
by
the
terms
of
this
Agreement.

The
Parties
agree
that
in
the
event
that
City's
annual
costs
per-acre
foot
for
Repurified
Water
are
less
than
the
purchase
costs
per-acre
foot
for
comparable
water
from
the
San
Diego
County
Water
Authority,
the
Parties
agree
to
use
the
Repurified
Water
per
acre
foot
cost
for
Replacement
Water.

8. Time
and
Place
of
Payment
All
payments
to
be
paid
by
Poway
under
this
Agreement
shall
be
made
payable
to
"City
Treasurer"
and
be
mailed
to:

The
Office
of
the
City
Treasurer
City
of
San
Diego
P.O.

Box
129030
San
Diego,
California
92112-9030
or
hand-delivered
to:

The
Office
of
the
City
Treasurer
Civic
Center
Plaza
1200
Third
Avenue,
First
Floor
San
Diego,
California
92101
City
may
change
the
place
of
payment
at
any
time
upon
thirty
(30)
days
written
notice
to
Poway.

Mailed
payments
shall
be
deemed
paid
upon
the
date
the
payment
is
postmarked
by
the
postal
authorities.

If
postmarks
are
illegible,
the
payment
shall
be
deemed
received
only
upon
actual
receipt.

9. Indemnification
and
Hold
Harmless
Each
Party
agrees
to
indemnify
and
defend
at
its
own
expense,
including
attorneys'
fees,
and
hold
harmless
the
other
Party,
its
elected
officials,
officers,
employees,
and
agents,
from
and
against
all
claims,
costs,
penalties,
causes
of
action,
demands,
losses
and
liability
of
any
nature
whatsoever,
including,
but
not
limited
to
liability
for
bodily
injury,
sickness,
disease
or
death,
property damage
(including
loss
of
use)
or
violation
oflaws
caused
by,
arising
out
of
that
Party's
actions
or
omissions
in
the
course
of
its
performance
of
this
Agreement.

Each
Party's
duty
to
defend,
indemnify
and
hold
harmless
shall
not
include
any
claims
or
liabilities
Page
6 oflS
13 of
31 April 21, 2026, Item #5
arising from the established sole negligence or sole willful misconduct of the other Party, its employees, agents. and officers.

10. Insurance
Poway shall maintain its own insurance so as to protect any constructed assets and Meter.

11. Defaults and Remedies

11.1 Default. A Party shall be in default under this Agreement in any of the following circumstances ( each a "Default"):

11.2 Monetary Default. A Party fails to timely pay or deposit any amount of money, bond, surety, or evidence of any insurance coverage required under this Agreement, and this circumstance continues for ten (10) Business Days after the Party in breach of its contractual obligation receives written notice from the other Party identifying the nature of the breach.

If Poway fails to make payment within ten (10) days past due, Poway shall pay, in addition to the unpaid amount, five percent (5%) of the delinquent amount. If the amount due is still unpaid after fifteen ( 15) days past due, Poway shall pay an additional five percent (5%) (being a total often percent (10%]), which is agreed by the parties to be appropriate to compensate City for the cost of servicing the delinquent account.

Acceptance of late charges and any portion of the late payment by City shall neither constitute a waiver of Poway default with respect to late payment nor prevent City from exercising any other rights and remedies available at law or in equity.

11.3 Non-Monetary Default. Subject to any time extensions that may apply due to Unavoidable Delay, a Party fails to comply with any covenant or perform any obligation required hereunder and such failure is not cured within thirty (30) days after the delivery of written notice describing such failure by the other Party, provided that if such Default cannot reasonably be cured within such thirty (30) day period and the defaulting Party commences to cure such Default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, the defaulting Party will be afforded an additional sixty (60) days to cure a Default.

11.4 Remedies. Subject to the express notice and opportunity to cure provisions of this Agreement regarding a specific Default, and subject to utilizing the dispute resolution procedure in Section 16 of this Agreement, upon the occurrence of any Default by a Party under this Agreement, the non-defaulting Party may seek a court order that provides declaratory or injunctive relief to address the Default or pursue any other available legal or equitable remedy. Notwithstanding anything to the contrary set forth herein, neither Party will be entitled under any circumstances to recover any speculative, consequential or punitive damages from the other Party.

11.5 No Waiver of Other Remedies. The rights and remedies enumerated in this Agreement are cumulative and shall not limit a Party's rights under any other provision

14 of 31
April 21, 2026, Item #5
of
this
Agreement,
or
otherwise
waive
or
deny
any
right
or
remedy,
at
law
or
in
equity,
existing
as
of
the
date
of
this
Agreement
or
hereinafter
enacted
or
established,
that
may
be
available
to
one Party
against
the
other.

12. Unavoidable
Delay;
Force
Majeure,
and
Extended
Time for
Performance
Except
as
otherwise
expressly
set
forth
in
this
Agreement,
performance
by
either
Party
under
this
Agreement
shall
not
be
deemed
or
considered
to
be
in
Default
or
breach,
where
such
Default
or
breach
is
due
to
or
on
account
of
any
cause
beyond
the
Party's
reasonable
control,
including
acts
of
God,
fire,
earthquake,
flood,
casualty,
war,
acts
of
terrorism,
riots,
regional
natural
disasters,
pandemic,
current
or
future
COVID-19
orders
and/or
mandates
from
federal,
state
or
local
governments,
inability
to
obtain
required
materials
or
supplies,
a labor
dispute
which
results
in
a strike,
work
stoppage
or
other
inability
to
obtain
labor,
environmental
contamination,
governmental
delays
(excluding
delays
directly
caused
by
the
Party
asserting
the
delay)
("Unavoidable
Delay").

Unavoidable
Delay
shall
not,
under
any
circumstances,
include
delay
caused
by
or
relating
to
the
financial
condition,
insolvency,
or
inability to
obtain
financing
on
the
part
of
the
Party
asserting that
Unavoidable
Delay
exists.

Any
Party
claiming
Unavoidable
Delay
shall
provide
written
notice
to
the
other
Party:
(a)
within
thirty
(30)
days
after
such
Party
knows
of
such
Unavoidable
Delay;
and
(b)
within
thirty
(30)
days
after
such
Unavoidable
Delay
ceases
to
exist.

To
be
effective,
any
written
notice
of
an
Unavoidable
Delay
must
describe
the
Unavoidable
Delay
in
reasonable
detail.

The
extension
of
time
for
an
Unavoidable
Delay
shall
commence
on
the
date
of
occurrence
of
the
Unavoidable
Delay
and
shall
continue
until
the
end
of
the
condition
causing
the
Unavoidable
Delay.

The
Party
seeking
an
extension
of
time
for
performance
shall
exercise
reasonable,
diligent
efforts
to
cure
the
condition
causing
the
Unavoidable
Delay,
within
a
reasonable
time.

Unavoidable
Delay
shall
not
extend
the
time
of
performance
for
any
monetary
obligations
under
this
Agreement,
nor
shall
it permanently
excuse
the
performance
of
any
obligation
unless
the
Parties agree
in
writing
that
such
performance
has
become
impossible
or
illegal
based
on
the
Unavoidable
Delay
event
(for
example,
a regulatory
agency
determines
that
performance
of
an
obligation
is
not
permitted).

13. Amendment This
Agreement
may
be
modified
or
amended
by
the
parties
hereto
at
any
time.

Such
modification
or
amendment
must
be
mutually
agreed
upon
and
executed
in
writing.

Verbal
modifications
or
amendments
shall
be
of
no
force
or
effect.

Page
8 of
15 15
of
31 April 21, 2026, Item #5

14. Notice Any
demands
or
notice
required
or
permitted
under
this
Agreement
may be
personally
served
on
the
other
party
by
the
party
giving
notice
or
may
be
served
by
certified
mail,
return
receipt
requested,
to
the
following
addresses
(with
a copy
via
email
that
shall
not
constitute
notice):

Ifto
CITY,
to:

Juan
Guerreiro,
Director
Public
Utilities
Department
City
of
San
Diego
9192
Topaz
Way
San
Diego,
CA
92123
Ifto
POWAY,
to:

Via
Mail: City
of
Poway
Attn:

Director
of
Public
Works
P.O.

Box
789
Poway,
CA
92074-0789
[email protected]
With
a copy
to:

City
of
Poway
City
Attorney
Alan
Fenstermacher
Rutan
&
Tucker,
LLP
18575
Jamboree
Road,
9th
Floor
Irvine,
CA
92612
[email protected]
Via
Personal
Delivery:

City
of
Poway
Attn:

Director
of
Public
Works
13325
Civic
Center
Drive
Poway,
CA
92064

15. Audit
and
Inspection
of
Records
At
any
time
during
normal
business
hours
and
as
often
as
the
City
deems
necessary,
Poway
shall
make
available
to
the
City for
examination
at
reasonable
locations
within
the
City/County
of
San
Diego
all
of
the
data
and
records
with
respect
to
all
matters
covered
by
this
Agreement.

Poway
shall
maintain
such
data
and
records
for
a
period
of
not
less
than
three
(3)
years
following
receipt
of
final
payment
under
this
Agreement.

Page
9 oflS
16 of
31 April 21, 2026, Item #5

16. Mandatory
Non-Binding
Mediation
If
a dispute
arises
out
of,
or
relates
to
this
Agreement,
or
the
breach
thereof,
which
cannot
be
resolved
by
the
parties,
the
parties
agree
to
mandatory
mediation
under
the
Mediation
Rules
of
the
American
Arbitration Association
or
any
other
neutral
organization
agreed
upon
before
having
recourse
in
a court
of
law.

Any
agreements
resulting
from
mediation
shall
be
documented
in
writing
by
all
parties.

All
mediation
results
shall
be
"non-binding"
and
inadmissible
for
any
purpose
in
any
legal
proceeding,
unless
such
admission
is
otherwise
agreed
upon,
in
writing,
by
all
parties.

17. Subletting
and
Assignment
Poway
shall
not
sublet
any
obligations
under
this
Agreement
without
the
City's
prior
written
consent.

Additionally,
Poway
shall
not
assign
this
Agreement
or
any
right
or
obligation
under
this
Agreement
without
the
City's
prior
written
consent.

18. Successors-in-Interest This
Agreement
and
all
rights
and
obligations
contained
herein
shall
be
in
effect
whether
or
not
any
or
all
Parties
to
this
Agreement
have
been
succeeded
by
another
entity,
and
all
rights
and
obligations
of
the
Parties
signatory
to
this
Agreement
shall
be
vested
and
binding
on
their
successors-in-interest.

19. Laws
and
Venue
This
Agreement
is
entered
into
and
shall
be
construed
and
interpreted
in
accordance
with
the
laws
of
the
State
of
California.

Venue
for
actions
arising
out
of
the
Agreement
shall
be
in
the
City/County
of
San
Diego,
California.

20. Nondiscrimination Neither
Party
shall
discriminate
on
the
basis
of
race,
gender,
gender
identity,
gender
expression,
religion,
national
origin,
ethnicity,
sexual
orientation,
age,
or
disability
in
the
performance
of
its
obligations
under
this
Agreement,
including
but
not
limited
to
permitting,
solicitation,
selection,
hiring,
or
treatment
of
consultants,
contractors,
subcontractors,
vendors,
suppliers,
permittees,
licensees,
invitees,
or
guests.

21. Drafting
Ambiguities
The
Parties
acknowledge
that
they
have
the
right
to
be
advised
by
legal
counsel
with
respect
to
the
negotiations,
terms,
and
conditions
of
this
Agreement,
and
the
decision
of
whether
to
seek
advice
of
legal
counsel
with
respect
to
this
Agreement
is
the
sole
responsibility
of
each
Party.

This
Agreement
shall
not
be
construed
in
favor
of
or
against
either
Party
by
reason
of
the
extent
to
which
each
Party
participated
in
the
drafting
of
the
Agreement.

22. Conflicts
Between
Terms
Page
10 of
15 17
of
31 April 21, 2026, Item #5
If this Agreement conflicts with an applicable local, state, or federal law, regulation, or court order, then applicable local, state, or federal law, regulation, or court order shall control.

Varying degrees of stringency among the main body of this Agreement, the exhibits or attachments, and laws, regulations, or orders, are not deemed conflicts, and the most stringent requirement shall control. Each Party shall notify the other immediately upon the identification of any apparent conflict or inconsistency concerning this Agreement.

23. Survival of Obligations
All representations, indemnifications, warranties, and guarantees made in, required by, or given in accordance with this Agreement, as well as all continuing obligations indicated in this Agreement, shall survive completion and acceptance of performance and termination, expiration or completion of the Agreement.

24. Media Inquiries
Neither Party is authorized to provide a response on behalf of the other Party to a media inquiry related to this Agreement. If a response to a media inquiry received by one Party requires a response from the other party, the Party receiving such inquiry shall forward the inquiry to the other Party to allow that Party to provide a response on behalf of itself if it desires to do so.

25. No-Third Party Beneficiaries
Except as may be specifically set forth in this Agreement, none of the provisions of this Agreement are intended to benefit any third party not specifically referenced in this Agreement. No party other than City and Poway shall have the right to enforce any of the provisions of this Agreement.

26. Compliance with Law
The Parties shall fulfill their obligations under this Agreement in compliance with, and shall require their contractors, subcontractors, agents, and employees to comply with all applicable Laws with respect to this Agreement. The Parties may satisfy this requirement in relation to contractors, subcontractors, and agents by including a term in its contracts requiring compliance with applicable law.

27. Integration
This Agreement contains the entire Agreement, between the Parties and supersedes all prior negotiations, discussions, obligations, and rights of the Parties in respect of each other regarding the subject matter of this Agreement. There is no other written or oral understanding between the Parties. No modification, amendment or alteration of this Agreement shall be valid unless it is in writing and signed by the Parties hereto.

28. Severability
The unenforceability, invalidity, or illegality of any provision of this Agreement shall not render any other provision unenforceable, invalid, or illegal.

18 of 31
April 21, 2026, Item #5

29. Waiver The
failure
of
either
Party
to
insist
upon the
strict
performance
of
any
covenant,
term,
or
condition
of
this
Agreement,
or to
exercise
any
right
or
remedy
consequent
upon
a breach
of
any
covenant,
term,
or
condition
of
this
Agreement,
shall
not
constitute
a waiver
of
any
such
breach
of
such
covenant,
term
or
condition.

No
waiver
of
any
breach
shall
affect
or
alter
this
Agreement,
and
each
and
every
covenant,
condition,
and
term
of
this
Agreement
shall
continue
in
full
force
and
effect
without
respect
to
any
existing
or
subsequent
breach.

30. Headings All
headings
in
this
Agreement
are
for
convenience
only
and
shall
not
affect
the
interpretation
of
this
Agreement.

31. Counterparts This
Agreement
may
be
executed
in
counterparts,
which
when
taken
together
shall
constitute
a single signed
original
as
though
both
Parties
had
executed
the same
page.

32. Signing
Authority
The representatives
signing
on
behalf
of
the
City
and
Poway
declare
that
the
representative
has
the
authority
to
sign
on
behalf
of
the
Party
for
which
they
are
signing
and
agrees
to
hold
the
other
Party
harmless
if
it
is
later
determined
that
such
authority
does
not
exist.

Page
12 of
15 19
of
31 April 21, 2026, Item #5
IN WITNESS WHEREOF, the parties have executed this as of the date first above written.

Poway
By: __________ _
Name: ___________ _
Title: ------------
Date: ___________ _
Approved as to form this ___ day of
-------' 20_,
ALAN FENSTERMACHER, Poway
City Attorney
By: __________ _
City Attorney
Print Name
20 of 31
City
By: _____________ _
Name: ____________ _
Title: _____________ _
Date: _____________ _
Approved as to form this __ day of
_____ ,20_.

HEATHER FERBERT, City Attorney
By:--------------­
Deputy City Attorney
Print Name

April 21, 2026, Item #5

EXHIBIT
A
CITY

REQUIRED
FORMS
Insurance
Certificates
with
all
endorsements
Taxpayer
Identification
Form
W-9
(if
not
currently
on
file)
EXIDBITB Page
14 of
15 21
of
31 April 21, 2026, Item #5

CALCULATED
(ALTERNATIVE)
RUNOFF

MEASUREMENT
Hodges
Cost
of
Poway
calendar
Hodges
Hodges1%
Runoff,
1/2
of
CWARate
Runoff
Due
to
Year
Runoff
(AF)
Run
off
(AF)
1%(AF)
(Per/AF}
City
I
20 17
19,355
194
97 $855
$82,7
43 I
20 18
1,
621
16 8
$89
4 $7,2
46 I
20 19
11 ,453
11 5
57 $909
$52,053
I
2020
16,197
162
81 $925
$7
4,909
·
I
202
1 4,08
4 41
20 $9
40 $19,
197
I
2022
2,392
24 12
$1,
009
$12,069
I
2023
39 ,73
4 397
199
$1,085
$2
15,555
I
202
4 8,943
89 45
$1,200
$53
,658
I
2025
2,4
85 25
12 $1,355
$16,836
I
Total
106,264
1,063
531
$534,266
Page
15 of
15 22
of
31 April 21, 2026, Item #5
23 of
31 \
72G1
.:5:t
OQ(Ui·ll:i'IT
Nt)
____
_
f
DEC
1 S 1958
I lED
-----
----
·-·-----·-·-·--·--·----
OfflCf.

Of
T:-lt
CITY
ClfQK
SA.ii
DIEGQ.

CAUFOQ!W,
\
WATER
RIGHTS
AGREEM
.li;NT \
. THIS

AGREEMENT
is
made
October
23,
},968,
betwee.1
/,,-;;;~y
MUNICIP-f\
L
WA
~ER

DISTRICT,
a
district
a:ganized
~nder
t~e
i.~un{cipal
·Water
District
. A.ct
of
1911
("POWAY")
and
THE
CITY
OF
SAN
DIEGO,
a
muni.~ipal
corporation,
("CITY")
in
view
of
the
following
facts;
(a)
CITY
is
_the
owner
of
a
water
system
including
reservoirs
a.:1.d
other
works
far
the
impcundlng,
diver~ion
and
dist::-i-­
b~tion
of
water
.to
its
inhabitants,
and
in
the
·operation
of
such
system
diverts
and
impounds
water
from
the
stream
system
known
as
San
Dieguilo
River
and
its
tributaries.

CITY's
point
of
diversion
(in
so
far
as
this
Agreement
is
concerned)
is
loc2.ted
at
Hodges
Dam
in
the
Southeast
~uartcr
oi
the
Northwest
Quarter
_of
Section
1B,
T~wnship
13 South,
·Range
2 West
SBM,
in
the
County
of
San
Diego,
State
of
California
.

Under
existing
contracts
CITY
is
obligated
in
perpatuity
to
furnish
a
portion
of
the
waters
impounded
by
Hodges
Dam
to
San
Dieguito
I~rigation
District
and
Santa
Fe
Irrigation
District.
(b)
POWAY
furnishes
and
supplies
· water
tc
consumers
located
within
its
bou:-,d:..ries
a;:d
p:r;:oposes
lo
cor.struct
a
dam
and
reservoir
fo't'
the
primary
purjloSe
_oi
provi~irig
regulato:,,y
sto::-age
for
water
which
_ it
is
entitled
to·
obtain
as
a
:.;;ember
.agency
of
San
Diego
County
Water
Autho~1~:,,
("Water
Authority").

POVfA-Y's
proposed
reservo:r
,
co:::::.nonly
known
•or
referred
to
as
"Warren
C~nyon
·Dam",
wodd
he
loca!r.c:
in
Sections
29 z.n:i
32 Tcwnship
13 South,
Range
1 West
SBM
UjJOn
an
un.:.a!r..ed
strea~
which
is
tributary
to
San
Dieguito
River.

Although
Warren
Canyon
Dam
would
be
primarily
de.;;igned
and
constructed
to
serve
as
a
storage
reservoir
for
water
imported
by
POWAY
a:1d
which
would
be
fo::eign
to
tha
S2n·Dieguito
River
and
its
tri:;;.:taries,
.CITY
contends
and
POWAY
recognizes
that
runoff
from
the
wate:-
shed
tributary
to
War::-en
Canyon
Dar.i
would
be
impounded
by
the
dar.,.,
. and
that
some
of
Attachment
"A
"

ATTACHMENT
C
April 21, 2026, Item #5
24 of
31 such
runoff
might
otherwise,
but
for
the
construction
of
that
Dam
reach
Hodges
Darn
and
Reservoir
owned
and
operated
by
CITY.
.
.
(c)
Both
POWAY
and
CITY
are
member
agencies
of
Water
Authority,
and
the
respective
.corporate
territory
of
each
is
included.
within
The
Metropolitan
Water
District
of
Southern
California,
CITY
ow:1s
and
operates
San
Vice:ate
Reservoir
which
serves
as
the
terminus
for
a
portion
of
Water
Authority's
acqueduct
system.

POWAY,
as
a
member
agency
of
Watar
Authority,
has
the
right
to
store
water
it
obtains
from
water
l,uthol:'ity
in
San
Vicente
Reservoir
under
existing
agree-
ments
betwa!!r.

Water
Authority
a~d
CITY.
(d)
POWAY
has,
in
connection
with
i~s
projec
t for
the
~
construction
of
Wa~:..-,m
Canyon
Darn
and
appurtenant
facilit
ies,
filed
an
.
'
applic::.tion:
with
tl-.a
Division
of
Water
Rights,
Sta
_te
Water
"Rasources
Control
Board
oi
the
State
of
C::.liforni:..
fo.:
a
permit
to
appropriate
water
from
the
un
_na::-.-1ed
streal!l
and
a:dsing
frcm
the
water
shed
of
that
stream
·wJ-!ic::
is
tributary
to
the
San
Dieguito
River
a~oye
the
location
of
POWA
Y's
proposed
t!am
and
reservoir
.

CITY
has
filed
a
protest
.
against
.POWAY
1s
applicati<:>n

2.:.d
the
application
and
protest
are
now
pending
ha.fore
the
Division
of
Water
Rights,
State
Water
Resources
Control
Board
and
identified
as
Application
No.
22093
.
(el
POV/A
Y
a,'ld
GITY
have
agreed
as
to
the
manner
in
which
CITY's
r_ights
in
the
San
Dieguito
River
and
its
tributaries
a~·.z
to
be
recognized
and
pro~sion
made
for
the
protecticin
oi
CITY's
prior
rights
• in
any
runof_f
which
. may
be
ir.npO\.::i.ded
by
POWA
Y's
Warren
Canyon
Dam
after
that
facility
is
construc
';ed
and
completed
.
. NOW
,

THEREFORE,
in
consideration
of
the
mutual
covenants
and
agreenien
_ts
as
herein
contained,
the
parties
agree
as
follows
:

1. Construction
of
Warren
Canyon
Dam.

CITY
consents
and
agrees­
to
the
construction
and
maintenance
by
POV/A
Y
cf
its
proposed
War-ren
Canyon
Dam
across
the
unnamed
stream
tributary
to
San
Dieguito
River
to
be_
:located
~n
Sections
29 and
32,
Township
13 South,
Range
1 West
SBM
- 2
"-
April 21, 2026, Item #5
•,I
25 of
31 .
. .
in
the
,C.ounty
:of
Sap
Diego,'
State
. of
California.

CITY
consents
to
the
• impounding
and
colliectlrig
in
and
by
Warren
Canyon
Dam
of
the
waters
o~
said
unnamed
stream
-~nd
·the
surface"
and
other
waters
arising
from
• t1ie
wate:i:-'~
·hed
tribut~ry
ther~to'.

CITY
relinquishes
to
POWAY
all
such
. _' -wate.r
.as
may
so
be
impoun~ed
·anu
:·,;,hres
all
and
ev.:ry
right
to
object
:.
.
.
..
~
. .
.
'to
· the
consfr
.ucliun
.arid
mai~tenance
of
said
Warren
Canyon
Darn
for
the
.
.
.
.
.
imp<Junding
a_nd
collecting_
of
s,aid
waters
by
it
and
their
diversion
and
.
.
.
•'
•
.
.
use
in_c~nn~ction
with
the
.water
supply
functions
of
POWAY.

CITY
• further
,vaives
<!nd
re~.i~g_u.ishe~
sli
claims
for
damages
and
all
rights
of
·.action
.. ~f
ev~ry
kind
•or
na(ur
·~
wh1ch
'miglit
a~ise
or
grow
out
of
POWAY's
. .
·.
.
.
.
.
.
.
constru
,ction,
maintenanc.e
and
?per.at;on
of
said
warren
Canyon
Dam
. ;and
th~
iinpound
_ing
and
col_~e~ting
.thFeln
of
such
waters
as
. might
nafui;ally
now
into
it
·fro~
the
wat~~
shed
tributary
to
it.

CITY
ag.rees
.to
withdra,y
the
protest
filed
by
it
against
,
.

POWAY•s
application
(~roceeding
No.
22093)
and
c_onsents
that
such
. application
' ~or
a
permit
to
apj::lropriak
surplus
waters
of
the
unnamed
.
:
~tr~am
may
li~
granted
in
accordance
with
the
request
contained
in'
!he
'•
.
ap~Jication
.
.r2;.
;;G
•ity
-'s
Replacement
Water.

In
consideration
of
the
under-
• ...
;
ta~i-ngs
.cif
CITY
.·as
set
forth.i~
this
Agreem(mt,
POWAY
agrees
to
cause
one-half
(1/2)'
of
tp.e
a_nnu
·al
me
_asured
runoff
(as
that
term
is
defined
in
i:nis
Agreement)
to
be
delivered
to
CITY
a~
San
Vicente
Reservoir
by
Water-
Authority
out
of
the
water
!3Upply
_and
entitlement
which
POWAY,
ha~
obtained
or
!s
entitled
to·oblain
from
Water·Authority.·
CITY
agrees
to
ac·cept
such
delivery
in
full
satisfaction
and
recognition
of
whatever
rigllts
it
might
have
in
and
to
the
nal\lral
runoff
from
the
water
shed
.
•
.
~
'tributary
to
POWAY
1s
Warren
Canyon
.Dam.

The
water
which
PO\VAY
so
d
'
und~rta.kea
to' deli'!"e~
to
·c~TY
is
referred
t_o
in
this
.Agreement
as
·"replacement
water".
3 ..

Runoff
Measurement
and
Commencement
of
Delivery.

POWAY
April 21, 2026, Item #5
.
.
agrees
that
it
will
construct
and
maintain
1 a,t
its
expense,
a
suitable
. ~easuriag
wc1r
of
a
design
~nq
size
satisfactory.
to
CITY
in
the
stream
lied
of
lh
_e
unnamed
st1:eam
abo~e
r~ferred
to
at
an
elevation
higher
than
..
.
. .
.
the
·spillway
level
of
.the
proposed.Warren
·Canyon
Dam
.

The
measuring
weir,
s9
to
' be
c_om,t~ucteiby
POWi,
Y
u:-.all
ue
e4uipped
with
automatic
'record
_ing
dev:i~es
and
so
designed
that
all
surfac~
now
occurring
in
said
unnamed
stream
will
pass
through
it
before
reaching
the
waters
• _impounded
_by
Warren
Canyon
Dam
.

If
the
spillway
elevation
of
POWAY's
Warreh
·Canyon
i:Yam
is
later
raised
~o
th~t
the:.weir
wi.11
no
longer
have
.
.
.
.
.
utUHy
a_t-in~xlmum
lake
lev_el,
POWAY
\';m
:at
its
expense
reconstruct
." the
wei
_r· and
its
appurtenant
· facililies
at
a
location
satisfactory
to
CITY
.I
"The
weir
and
record
1ng
devices
w:ill
be
constructed
and
placed
in
operation
when
sa~d
-dam
and
impounding
reservoir
are
completed
and
• '
.
the
flood
gates
plosed.

T!:tei::eafter,
POWAY
will,
on
or
before
the
15th
•
-=---·-·-·--·
.... , -·
...
..
. day
o~
_each
c_alendar
month,
furnish
CITY
with
a
statement
setting
forth
~-.
.·
-.
.
.
. ..
.
. :,
.
.. .....
...
______ ,, ____
.,_
_
.. ---
-
-····
the
amount
· of
water
passing
over
said
weir
and
impounded
by
Warren
:~-~~;~~
~:a::::·
After
the
fi~st
•• ciay
of
the.

Ocl;ber
-f~llo~i;~
--t-h~~~pl~tion
of
Warren
Canyon
Dam,
P_OWAY
shall
by
appropriate
direction
given
Wate
·r
,Auth
.orlty
cause
the
tr~nsfer
to
CITY
from
POWAY
1s
water
stored
'·
'in
San
Vicente
"Reservoir
"an
amount
equal
to
one
-h~lf
{1/2)
of
the
total
local
runoff
above
Warren
Canyon
Dam
so
measured
and
occurring
over
-the
preceding
tw~lve
month
per
iod,
Such
accounting
and
.transfer
of
replacement
water
for
CITY's
benefit
shall
be
made
annually
thereafter,
26 of31
Ii
POWAY's
water
stored
in
San
Vicente
: is
insufficient
to
enable
POWAY
~o
make
delivery
to
CITY
of
the
full
amount
to
which
CITY
is
then
entitled
,
or,
should
P_OWAY
so
elect,
it
shall
caqse
{by
appropriate
• directicin
to
Water
Authority)
such
replacemen
c wate"r
to
be
delivered
into
S~n
Vicente
Reservoi:r
for
CITY
out
of
POWAY's
current
flow
_ entitlement
in
the
acqueduct
system
~f
Water
Authority
0·in
such
manner
as
to
deliver
.
.
.
..
.
.
. ·- 4
-
April 21, 2026, Item #5
.,
27 of
31 t~
·Cl'l'Y
the
full'
amount
of
r,iplace
.~ent
water
ave;
a
period
not
to
exceed
. •
.
-
. .
.
.
th!t"ty
(30)
days.

CITY
shall
be
a,t
no
expense
in
connection
with
the
delivery
·to
it
of
ariy
replacement
water,
and
all
costs
(including
water
cost,
s_torage
an9
evapora
_tion
charges
on
water
stored
in
San
Vicente
Reservoiri
prior
to
.·.
.
.
.
.
.
.
.
•.
'its
tr_anster
to
CITY
·shall
be
borne
by
POWAY.
• 1,
Annual
Measured
Runoff,
The
annual
measured
runofi
which
. is
• ~mpounded
?Y
?OWAY'
.~
:Warren
·canyo
.n
Dam
shall,
for
the
purposes
of
this
'Agr1:ement,
mean
tl~at
amount
9£
water
which
actually
passes
over
fh~
. meas
_urcm
.ent
weir
to
be
_cons'tructed
;
op~rated
and
maintained
by
POWAY
in
_ac
·cordance
with
the
te;ms
of
this
Agreement
.

It
shall
not
.
. .
:
.
..
. .
m~lud
_e
a_ny
sub~urface
_water
'which
~ny
seep
into
the
r~servoir,
with~
out
passing
· over
the
measurement
weir,
or
rain
fall
~hich
may
occur
.
. : -
•
.
.
.
.
. .
direc,tly'
on
the
reservoir
surface
.

Should
POWAY!s
warren
Canyon
Dam
become
full
so
that
,irater
pass·es
?ver
its
spillway
and
into
the
stream
bed
downstream
from
Warr~'?-
.Cany
.on
Dam,
th~
amimnt
of
such
water
so
passing
over
the
spill-
. \Vay
.shall
·be
rea
_sona
_bly
_:st!mated.by
the
agreement
of
.the
parties
and
one-ha
·l!·.(l
/2)
of
the
·amount
of
spilled
water
so
estimated
deducted
from
the
.
. .
.
.
amoU:nf
cif
replac.em~nt
w~ter
whic~
·POWAY
would
otherwise
be
oblig~ted
t_o.lransfer
-to
CITY
under
the
t_erm_s
of
this
.Agreement,
• Both
CITY
and
POWAY
recognize
that
the
unnamed
stream
across
which
POWAY
proposes
to
construct
warren
·Canyon
Dam
passes
.
'
.
.. through.
lan~s
.. owned
by
others
before
reaching
CITY's
Lake
_Hodges
and
the
properties
surrounding
Lake
Hodges
which
are
owned
by
CITY
.

Should
any
owner
of
land
downstream
from
Warren
Canyon
D·am
herea,fter
establish
a·right
to
any
portion
of
the
n~
_tural
runoff
from
the
water
shed
·'·
o(
the
stream
tributary
to
·warren
Canyon
Dam
and
· should
POWAY
be
-required
to
·m~ke
release13
fr~~
·warren
Canyon
Dam
in
satisfaction
of
thos
·e
ri~h
.ts,
one-half
(1/2)
9£
_the
-total
annual
amount
of
such
releases
April 21, 2026, Item #5
.-·1·
I
sh·au
b~
charged
agaiu~t
(2ITY's
·repl~cement
water
which
POWAY
would
·:·.otherw
.i;~
.. be
r~qulred
to
:~a~se
to
be
_ delivered
into
S~n
Vicente
··Reservoir
by
Water
.i\"u
.thority
ur.i~er
:thii
: t.er;ms
of
this
.Agreement,
The
balance
of
.
'
• such
.releases
shall
be
borne
by
POw_AY.
5~.

Completion
of
Warren
C_~nyon
Dam.
_
The
parties
understand
.' and
ag~ee
that
POWAY
dqes
not
undertake
: to
deliver
to
CITY
by
any
..
;
.
.
. -means
any
replaceme~t
water
except
upon
completion
of
Warren
Canyon
.
-
. .
.···
.
.
.
ri~m
.

P_o\v.A
Y
does
not
·unde
.~take,
nor
shall
it
to
any
extent
be
obligated
. .
. .
.
.
~
. .
'
";
••
t9,
··<;:omplete
Warren
Canyon_
D_am
; provided,
however,
that
if
it
fails
28 of
31 ·. to
commence
.fl~e
_co~~tru'ction
of
said
Dai;n
~ithin
ten
(10)
yea.rs
from
the
date
of this
Agreement
or
should
it
fail
to
complet~
said
Dam
within
threp
(3)
;e:i-rs
after
.~onstruction
has
commenced,
then
and
in
that
event,
thi:s
Agr
ee·mE:nt
·shall
be
o~
no
furthe1·
force
and
affect
and
each
party
_ .. shall
·b~
relieved
from.
ari?
_commit~ents
which
it
may
have
made
to
the
··.
other
.
. 1~

WITNESS
\VHEREOF,
this
Agreement
is
executed
byTHE
.CIT
.Y
OF
SAN
DIEGO,
acti~g
l:iy
and
through
its
City
Manager,
pursuant
to
• .• • ·R·e;oiui~bn
~o!9S''3
.;:i~~t~~;~zing
-sJJch
execution,and
by
POWAY
MUNI~iPAL
WATER
IlISTRi(!T
by
its
General
Manager,
pursuant
to
Resolution
No
' ... ,z
I 9 .•
autho~izing
_such
execution
.
.
.
· ..
·---
.•
• • '
•• .. THE
CITY
OF
SAN
DIEGO
POWAY

MUNJCIPAL
WATER.DISTRICT
By
¥.~-Pl$a,=£/
.
/
en
al
Manager
. ·1
approve
the
fo~m
a_nd
legality
of
the
foregoing
con~r~ct
lhis
:2oZ1~
day
of
_ ,k'c-i:v
,
1968.
;EDWARD
T.

BUTLER,
City
Attorney
-G -
April 21, 2026, Item #5
• • • 1
~-pprovc,
the
!onh
~~ci
legality
. of
the
for~g~ing
contract
:this·23rd
d~y
_ o~
~
!'.it i> b_e_r~,
· .19

68. '·
•
•
• • ;·.
•
•
GLENN
&

WRIGHT,
Attorneys
for
.. ·.
• POWAY

MUNICIPAL
WATER

DISTRICT
•.·
•.
··• ..
/
.
.
;_
...
. •
.. ··.
-7
-
29 of
31 April 21, 2026, Item #5
30 of
31 RESOWTIOH
NO.
1029
• • RESOLUTION
CONSElfTING
TO

AGREEMENT

BETWEEN
CITY
OF
SAN
DIEGO
MID'
POf/AY
)nJNICIPAL
WATER

DISTRICT

RESPECTING

OPERATION
OF
PROPOSED.

WARREN
CANYON
DAM.

WHE~AS,
the
City
of
San
!Jir.g
c
~,:d
PoHa.y
Mut,li!i!i,·d
\fa.ter
District
'
propose
to
en~~r
i~t:o
an
agreement'
respecting
·the
oonstl'Uction
and
;_':·-
:
•
opc~ation
of
the
Warren
Canyon
Dam
by
Poway;
and
hliER~s.
the
agreement
requi~es
some
cooperation
from
the
San
Diego
County
Water
Authority
·:to
)>ecome
effective
but
such
cooperation
places
no
burden
or
responsib11Hy
upon
the
Auth~rity;
and
R.ECEl','.1; OCT
14 19(
. Ulllities
Dirttto,
WHEREAS;
the
Authority
has
been.requested
to
consent
to
such
Agreemenf.
-tWjf,

THEREFORE,
BE
IT

RESOLVED
that
the
San
_Diego
County
lfater
Authori~y
does
he~eby
consent
tp
~uch_
agreement
and
agrees
to
cooper~te
• with
the
parhes
thereto
~
the
manner
proposed
therein.

Tne
General
Manager
"ahd"Chief
Engineer
is
directed
to
execute
the
consent
thereto
--------·-
·--------
-:
..i
. -·
:.
·----
·

PASSED,

APPROVED
and

ADOPTED
this
:12th'day
of
September,
i968.

ATT.E5T: H:ms
II.
boe,
Se
_cretary
, ..

Board
of
Directors
San
Diego
County
Water
Au
.thority
...
·•
·:•
f
•
.. ... ~.:

Fred
A.

Heilbron,
Chairman
· Board
of
Directors
'·.·
.San
Diego
County
Water·
Authority
. ·,
April 21, 2026, Item #5
31 of
31 I,
LIIIDA
K.

DE
GROOT,
Executive
Secretary
of
the
Board
of
Directors
of
the
San
Diego
County
Water
Authority,
do
hereby
certify
that
the
above
and
forego~g
is
a
full,
_true
and
correc~
.copy
of
Reso1ut1on_No.
1029
of
sa1d
Board,
and
that
the
same
has
not
been
amended
or
repealed
..

Dated:

October.
11,
1968.

Linda
k:;
De
Groo~,
Executive
Secretary
Board
of
Directors
San
.Diego
·county.

Water
Authority
April 21, 2026, Item #6
AGENDA RE PQ RT City of Poway
DATE:

TO:

FROM:

CONTACT:

SUBJECT:

Summary:

April 21, 2026
Honorable Mayor and Members of the City Council
Julie Procopio, Director of Development Services~
Alan Fenstermacher, City Attorney
Julie Procopio, Director of Development Services
[email protected]
Alan Fenstermacher, City Attorney
[email protected]
Density Bonus Law Overview and Summary

CITY COUNCIL
The City Council has requested an overview and summary of the scope of the California State Density Bonus Law (Gov. Code,§§ 65915 et seq.) as applied to development projects in the City of Poway. This report and accompanying presentation provide a general overview of Density Bonus Law requirements and applications.

Recommended Action:

It is recommended the City Council receive the report and summary. No formal action is proposed.

Discussion:

Density Bonus Law Generally
The Density Bonus Law provides developers with certain advantages for producing specified percentages of housing in a development that is affordable to extremely low, very-low, low, and moderate income households. There are four main categories of advantage. Developers are entitled to one or multiple of the following based on criteria defined in the law:
(1) Density Bonuses. The first type of advantage is referred to as a "density bonus." This is additional density or units over the otherwise allowable general plan and zoning densities.

Density bonuses generally are based on the percentage of affordable units in a development, ranging from a 20% density bonus (that is, 20% more units than would otherwise be allowed), to increasing numbers up to 100% for developments with higher percentages of affordable 1 of 5
April 21, 2026, Item #6
units and meeting other criteria.

Density bonus applicants are required to restrict units to the established affordability levels for at least fifty-five (55) years.
(2) Waivers and Reductions in Development Standards
Local agencies are required to grant an unlimited number of waivers or reductions (herein referred to as "waivers") to development standards that physically preclude the construction of the development project at the density allowed by state law. Unlike incentives/concessions (discussed herein), these are relief from physical standards, and only where necessary to accommodate the development allowed by the law.

Waivers are to physical development standards such as setbacks, height requirements, open­ space requirements, and similar standards which generally reduce the developable space on a parcel. Notably, a local agency cannot require fundamental changes to a project to avoid the need for a waiver, even if it can show the change would avoid the need. (See e.g. Bankers Hill 150 v. City of San Diego (2022) 7 4 Ca I.App.5th 755.)
The Density Bonus Law only allows local agencies to deny a requested waiver based on substantial evidence of any of the following:

1. The development standard at issue does not have the effect of physically precluding the construction of the development at the density allowed by state law.

2. The waiver would have a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Government Code section 65589.5, upon public health and safety or on any real property that is listed in the California Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact without rendering the development unaffordable to low-income and moderate-income households. "Specific, adverse impact" means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application for the development project was deemed complete. Inconsistency with the zoning ordinance or land use designation cannot qualify as a specific adverse impact.

3. The waiver would be contrary to State or Federal law. (3) Incentives and Concessions
2 of 5
The third type of advantage are incentives or concessions. The two terms are used interchangeably for the purposes of the Density Bonus Law. The number of incentives/concessions ranges based on the number of affordable units provided. In general, a project will typically qualify for one to two incentives/concessions, but particular affordable projects can qualify for five or more depending on project contents.

An incentive or concession is defined as any of the following:

April 21, 2026, Item #6

1. A
reduction
in
site
development
standards
or
a
modification
of
zoning
code
or
architectural
design
requirements
that
exceed
the
minimum
standards
approved
by
the
California
Building
Standards
Commission
located
in
Health
and
Safety
Code
section
18901
et
seq.
that
would
result
in
"identifiable
and
actual
cost
reductions"
to
provide
for
affordable
housing
costs
as
defined
in
Section
50052.5
of
the
Health
and
Safety
Code,
or
for
rents
for
the
targeted
units.

2. Approval
of
mixed-use
zoning
if
the
mixed
use
would
reduce
the
cost
of
the
housing
development
and
is
compatible
with
the
housing
project
and
the
existing
or
planned
development
in
the
area.

3. Other
regulatory
incentives
or
concessions
proposed
by
the
developer
or
local
agency
that
result
in
identifiable
and
actual
cost
reductions
to
provide
for
affordable
housing
costs
as
defined
in
section
50052
.5
of
the
Health
and
Safety
Code,
or
for
rents
for
the
targeted
units
.

In
mixed
use
developments,
the
incentive/concession
applies
to
both
the
residential,
and
nonresidential
portions
of
the
development.

Importantly,
California
Department
of
Housing
and
Community
Development
(HCD)
has
taken
the
position
the
concessions
can
be
applied
to
reduce
or
even
potentially
eliminate
mixed
use/ground
floor
retail
requirements.

The
Density
Bonus
Law
only
allows
local
agencies
to
deny
a
requested
incentive/concession
based
on
substantial
evidence
of
any
of
the
following:

1. The
incentive/concession
does
not
result
in
identifiable
and
actual
cost
reductions
to
provide
for
affordable
housing
costs
or
for
rents
for
the
targeted
units.

2. The
incentive/concession
would
have
a
specific,
adverse
impact,
as
defined
in
paragraph
(2)
of
subdivision
(d)
of
Government
Code
section
65589.5,
upon
public
health
and
safety
or
on
any
real
property
that
is
listed
in
the
California
Register
of
Historical
Resources
and
for
which
there
is
no
feasible
method
to
satisfactorily
mitigate
or
avoid
the
specific,
adverse
impact
without
rendering
the
development
unaffordable
to
low-income
and
moderate-income
households.
"Specific,
adverse
impact"
means
a
significant
, quantifiable,
direct,
and
unavoidable
impact,
based
on
objective,
identified
written
public
health
or
safety
standards,
policies,
or
conditions
as
they
existed
on
the
date
the
application
for
the
development
project
was
deemed
complete.

Inconsistency
with
the
zoning
ordinance
or
land
use
designation
cannot
qualify
as
a
specific
adverse
impact.

3. The
incentive/concession
would
be
contrary
to
State
or
Federal
law.
(4)
Parking
Ratios
3 of
5 Finally,
the
Density
Bonus
Law
provides
reduced
parking
ratios
for
projects
which
qualify
for
a
density
bonus
upon
request
of
the
developer.

The
local
agency
is
prohibited
from
requiring
parking,
including
accessible
parking
that
exceeds
one
space
for
zero
to
one
bedrooms,
one
April 21, 2026, Item #6
and
a
half
spaces
for
two
to
three
bedrooms,
and
two
and
a
half
spaces
for
four
or
more
bedrooms.

Some
lower
income
developments
are
allowed
even
lower
parking
ratios,
with
certain
developments
being
located
one-half
mile
from
a
major
transit
stop
allowed
to
be
constructed
without
any
parking.

Local
Agency
Discretion
The
Density
Bonus
Law
is
heavily
developer
friendly.

Any
local
agencies
desiring to
deny
or
fight
against
a density
bonus
advantage
a developer
has
earned
under
the
law
will
likely
face
challenges
from
both
developers
and
HCD.

As
indicated
above,
the
law
does
not
provide
any
avenue
to
deny
density
bonuses
and
parking
ratios.

Once
a
developer
qualifies
for
them,
there
is
no
legally
supportable
mechanism
to
deny
them.

Incentives,
concessions,
and
waivers
may
only
be
denied
if
the
local
agency
can
make
a
denial
finding
with
substantial
evidence.

The
burden
is
on
the
agency,
not
the
developer,
to
show
the
development
either
does
not
qualify
for
the
requested
incentive,
concession,
or
waiver,
or
the
local
agency
has
identified
a
specific
adverse
impact
to
public
health
or
safety
based
on
the
request.

The
specific
adverse
impact
must
be
further
tied
to
objective,
written,
public
health
or
safety
standards.

There
is
currently
no
support
in
the
Density
Bonus
Law,
case
law,
or
HCD
opinions
to
deny
a
requested
advantage
under
any
other
circumstance,
including
limitations
to
the
scope
of
"allowable"
incentives,
concessions,
or
waivers,
or
denial
for
"common
sense"
reasons.

Any
denial
not
clearly
supported
by
the
law
risks
litigation
and
enforcement
by
HCD.

Risks
of
Denial
There
is
limited
case
law
on
the
Density
Bonus
Law,
and
no
case
has
limited
the
applicable
scope
or
interpreted
the
law
narrowly.

Most
importantly,
no
case
has
addressed
the
breadths
of
the
currently
broad
incentive/concession
definition
and
interpreted
any
limits
into
it.

HCD,
charged
with
implementing
the
Density
Bonus
Law,
has
issued
several
opinion
and
advisory
letters
on
the
topic,
and
interprets
the
Density
Bonus
Law
to
mirror
the
text
of
the
statute.

HCD
does
not
have
any
opinions
where
it
supported
a
local
agency's
denial
of
a requested
advantage.

The
law
grants
both
developers
and
HCD
the
right
to
litigate
to
enforce
the
Density
Bonus
Law,
and,
if a party
prevails
on
enforcement,
they
are
entitled
to
recover
their
attorney's
fees
and
costs
from
the
local
agency
.

Noncompliance
with
the
Density
Bonus
Law
may
also
provoke
HCD
enforcement
of
other
housing
laws
integrated
into
a local
agency's
Housing
Element,
up
to
and
including
potential
decertification
of
the
Housing
Element.

Local
Examples
Three
recent
projects
within
the
City
have
used
state
law
to
increase
density,
including
McKee
Orchard,
Apollo
and
Poway
Paseo
. In
exchange
for
building
one
home
affordable
to
very
low-
4of
5 April 21, 2026, Item #6
income households, the Mc Kee Orchard project received the State-allowed 20% density increase, or five bonus units, increasing the number of homes allowed to be developed from 15-units to 20- units. In addition, the project was entitled to receive three waivers to 1) reduce the lot size from 10,000 square foot minimum to 7,012 square foot minimum, 2) reduce the minimum lot width and 3) reduce side yard setbacks from 10 feet to five feet as these waivers were required to accommodate the 20-units.

The Apollo project was processed as a part of a larger development, the Poway Commons. While the density for the overall project fell within allowable densities, the Apollo project installed 44 senior apartments on 0.82-acres for a density of 53.65 dwelling units per acre. This project provided 43 units affordable to low-income seniors and one manager's unit. Some of the concessions the project was entitled to receive include 1) the parking was reduced to 44 spaces, 2) side yard setbacks were reduced from 15 feet to 1 O feet, 3) street setbacks were reduced from 10 feet to five feet, and 4) the requirement for ground-floor commercial was waived.

The Poway Paseo project included nine units affordable to low-income households in exchange for a 29% density bonus, increasing the number of units from 55 units to 72 units. The project height remains in compliance with the Poway Road Specific Plan (38-feet). The street setback was reduced to zero along a portion of the property line.

Environmental Review:

The agenda item is exempt from environmental review. Pursuant to Section 15061 (b)(3) of the California Environmental Quality Act (CEQA) Guidelines the activity is covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

Fiscal Impact:

None.

Public Notification:

None.

Attachments:

None
Reviewed/Approved By:

Assistant City Manager
5 of 5
Reviewed By:

Alan Fenstermacher
City Attorney
Approved By:

Chr~
2 City Manager