San Luis Obispo City Council
May 21, 2024

NOTICE TO BIDDERS

NOTICE TO BIDDERS
iii
ADDITIVE ALTERNATIVE “A”: $300,000 15 working days
TOTAL PROJECT BID (BASE BID + ADD ALT. “A”): $5,400,000 The fixed liquidated damages amount is established at $1,000 per day for failure to complete the work within the contract time.

In compliance with section 1773 of the Labor Code, the State of California Department of Industrial Relations has established prevailing hourly wage rates for each type of workman. Current wage rates may be obtained from the Division of Labor at:
https://www.dir.ca.gov/oprl/DPreWageDetermination.htm
This project is subject to compliance monitoring and enforcement by the Department of Industrial Relations.

QUALIFICATIONS
You must possess a valid Class A or C-12 Contractor's License at the time of the bid opening.

You and any subcontractors required to pay prevailing wage must be registered with the Department of Industrial Relations pursuant to Section 1725.5 of the Labor Code.

You must have experience constructing projects similar to the work specified for this project. Provide three similar reference projects completed as either the prime or subcontractor. All referenced projects must have been completed within the last five years from this project’s bid opening date.

One of the three reference projects must have been completed under contract with a city, county, state or federal government agency as the prime contractor.

All of the referenced projects must be for roadway maintenance by slurry sealing.

Failure to provide reference projects as specified in this section and as required on the qualification form is cause to reject a bid as being non-responsive.

The City reserves the right to reject any bid based on non-responsiveness if a bidder fails to provide a bid that complies with all bidding instructions.

The City reserves the right to reject a responsive bid based on the non-responsibility of the bidder if the Director of Public Works or Designee finds, after providing notice and a hearing to the bidder, that the bidder lacks the

1. knowledge

NOTICE TO BIDDERS

NOTICE TO BIDDERS
iv

2. experience,

3. or is otherwise not responsible
as defined in Section 3.24 of the San Luis Obispo Municipal Code to complete the project in the best interest of the City.

Rejected bidders may appeal this determination. Appeal must comply with the requirements in this Notice to Bidders.

It is the City of San Luis Obispo’s intent to award the contract to the lowest responsive bid submitted by a responsible bidder. If in the bidder’s opinion the contract has been or may be improperly awarded, the bidder may protest the contract award.

Protests must be filed no later than five working days after either:

1. bid opening date

2. notification of rejected bid.

Protest must be in writing and received by the project manager located at:
919 Palm Street
San Luis Obispo, CA 93401.

Valid protests must contain the following information:

1. the reasons for the protest

2. any supporting documentation

3. the ruling expected by the City to remedy the protest.

Any protest not containing all required information will be deemed invalid and rejected.

The City will consider additional documentation or other supporting information regarding the protest if submitted in compliance to the specified time limits. Anything submitted after the specified time limit will be rejected and not be considered.

The Director of Public Works or Designee may request additional information to be submitted within three days of the request, unless otherwise specified, and will notify the protester of ruling within ten days of determination.

If the protester is not satisfied with ruling, the protester may appeal the ruling to the City Council in compliance with Chapter 1.20 of the City of San Luis Obispo Municipal Code.

Pursuant to the Public Records Act (Government Code, § 6250, et seq.), the City will make public records available upon request.

AWARD
The lowest bidder will be determined in compliance with Public Contract Code Section 20103.8(c) with the Publicly Disclosed Funding Amount of $5,400,000 using either:
• TOTAL PROJECT BID, if bid for the Base Bid + Add. Alt. “A” is less than $5,400,000 or

NOTICE TO BIDDERS

NOTICE TO BIDDERS
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• BASE BID, if Base Bid is less than $5,400,000 and Base Bid + Add Alt “A” is greater than $5,400,000
As a condition to executing a contract with the City, two bonds each equal to one hundred percent of the total contract price are required in compliance with Section 3-1.05 of the Standard Specifications.

You may substitute securities for moneys withheld under the contract in compliance with the provisions of the Public Contract Code, Section 10263.

ACCOMMODATION
If any accommodations are needed to participate in the bid process, please contact Ellen Boyle (805) 781-7274 or by Telecommunications Device for the Deaf at (805) 781-7107.

Requests should be made as early as possible in the bidding process to allow time for accommodation.

BID FORMS
A

BID FORMS
All bid forms must be completed and submitted with your bid. Failure to submit these forms and required bid bond is cause to reject the bid as nonresponsive. Staple all bid forms together.

THE UNDERSIGNED, agrees that they have carefully examined:

1. the location of the proposed work

2. the plans and specifications

3. read the accompanying instructions to bidders
and propose to furnish all:

1. materials

2. labor
to complete all the required work satisfactorily in compliance with

3. plans

4. specifications

5. special provisions
for the prices set forth in the bid item list:

BID ITEM LIST FOR ROADWAY SEALING 2024, SPECIFICATION NO. 2000615 Item Item Unit of Estimated Item Price Total
No. SS(1) Description Measure Quantity (in figures) (in figures) 1 37 TYPE II SLURRY SEAL SQYD 452,647
2 84 4" WHITE /BLUE/YELLOW LF 8,361
3 84 8" WHITE LF 1,564
4 84 12" YELLOW/WHITE LF 10,179
5 84 24" YELLOW/WHITE LF 2,958
6 84 DETAIL 2 LF 8,613
7 84 DETAIL 9 LF 566
8 84 DETAIL 22 LF 20,377
9 84 DETAIL 24 LF 578
10 84 DETAIL 27B LF 30,410
11 84 DETAIL 29 LF 1,069
12 84 DETAIL 32 LF 4,143
13 84 DETAIL 38 LF 1,032
14 84 DETAIL 39 LF 4,060
15 84 DETAIL 39A LF 756
16 84 DETAIL 40 LF 29
17 84 DETAIL 41 LF 200

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Item Item Unit of Estimated Item Price Total
No. SS(1) Description Measure Quantity (in figures) (in figures) 18 84 DETAIL CH9 F9C-2 LF 1,182
19 84 BOTS DOTS EA 68
20 82 ROUND FLEX POSTS EA 106
21 84 WHITE/BLUE PARKING L OR T EA 55
22 84 ADA NO PARKING EA 10
23 84 ADA ISA SYMBOL EA 20
24 84 BLUE/RED CURB PAINT LF 4,875
25 39 HMA DIKE LF 172
26 15

REMOVE AND RE-INSTALL

EXISTING WHEEL STOP PER
ENG. STD 2260
EA 42
27 15 EDGE GRIND LF 2,116
28 84 CONCRETE MEDIAN SQFT 842
29 84 GREEN BIKE LANE CASE 1 LF 793
30 84 GREEN BIKE LANE CASE 2 LF 1,433
31 84 GREEN BIKE LANE CASE 3 LF 1,255
32 84 BIKE BUFFER LF 10,359
33 86

RRFB SYSTEM - JOHNSON AVE
AND SYDNEY ST LS 1
34(S) 86

RRFB SYSTEM - MARSH ST

AND TORO ST (NORTHEAST

CORNER)
LS 1
35(S) 86

RRFB SYSTEM - MARSH ST

AND TORO ST (NORTHWEST

CORNER)
LS 1
36(S) 82

REMOVE (E) POST BY CORING
AND PATCHING EA 3
37 82 INSTALL (N) 12' PUNCH POST EA 66
38 82 INSTALL (N) 14' PUNCH POST EA 2
39 82 BIKE LANE ENDS SIGN EA 1
40 82 GREENWAY SIGN (ISLAY) EA 2
41 82 GREENWAY SIGN (MILL) EA 4
42 82 GREENWAY SIGN (TORO) EA 7
43 82 MODIFIED R61-36 SIGN EA 1
44 82 OM1-3 OBJECT MARKER EA 4
45 82 R1-1 SIGN EA 21
46 82 R1-3P SIGN EA 9
47 82 R4-7 SIGN EA 3

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Item Item Unit of Estimated Item Price Total
No. SS(1) Description Measure Quantity (in figures) (in figures) 48 82 R6-5 SIGN EA 2
49 82 R7-9 SIGN EA 2
50 82 R26 SIGN EA 3
51 82 R81(CA) SIGN EA 1
52 82 R99 & 99B SIGNS EA 2
53 82 W11-15 SIGN EA 3
54 82 W16-7P SIGN EA 3
55 82 W17-1 SIGN EA 4
56 82 W84(CA) SIGN EA 16
57 73

REMOVE (E) TRUNCATED

DOMES AND REPLACE WITH

NEW TRUNCATED DOMES
SQFT 29
58 39 SPEED HUMP EA 4
59 39 SPEED CUSHION (MILL) EA 2
60 82

RETROREFLECTIVE MARKER
TYPE D EA 10
61 84 BLUE HYDRANT MARKERS PER CITY STD 7920 EA 298
62 84 GREENBACK SHARROW EA 45
63 84

YELLOW/WHITE/BLUE

PAVEMENT

MARKING/LEGENDS (ARROWS,

WORDS, SYMBOLS, ETC)
SQFT 10,232 ---
64 13

STREET SWEEPING IN SLURRY
AREAS (1 DAY) LS 1 ---
65 13

STREET SWEEPING IN SLURRY
AREAS (30 DAYS) LS 1 ---
66 7,
12 TRAFFIC CONTROL PLAN AND
IMPLEMENTATION LS 1 ---
67 73 CONSTRUCTION SURVEY LS 1 ---
68 7

COMPLY WITH NIGHT WORK
PERMIT LS 1 ---
69 3

COMPLY WITH CALTRANS
ENCROACHMENT PERMIT LS 1 ---
70 20 TREE TRIMMING LS 1 ---
71 12

TEMPORARY STRIPING AND
PAVEMENT MARKINGS LS 1 ---
Base Bid $
72 84 TRAFFIC PAINT - 12" WHITE LF 1,325
73 84 TRAFFIC PAINT -12" YELLOW LF 354
74 84 TRAFFIC PAINT - 24" WHITE LF 1,019

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BID FORMS
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Item Item Unit of Estimated Item Price Total
No. SS(1) Description Measure Quantity (in figures) (in figures) 75 84 TRAFFIC PAINT - 24" YELLOW LF 250
76 84 TRAFFIC PAINT - DETAIL 9 LF 55
77 TRAFFIC PAINT - DETAIL 22 LF 864
78 TRAFFIC PAINT - DETAIL 24 LF 3890
79 TRAFFIC PAINT - DETAIL 27B LF 100
80 84 TRAFFIC PAINT - DETAIL 29 LF 74
81 84 TRAFFIC PAINT - DETAIL 38 LF 273
82 84 TRAFFIC PAINT - DETAIL 38A LF 17
83 84 TRAFFIC PAINT - DETAIL 39 LF 1,117
84 84 TRAFFIC PAINT - DETAIL 39A LF 44
85 84

ZICLA ZEBRA CYCLE TRACK
LANE SEPARATORS EA 160
86 84 ROUND FLEX POSTS EA 126
87 82 RED CURB PAINT LF 1072
88 84 TRAFFIC PAINT - GREEN BIKE
LANE CASE 1 LF 714
89 84

TRAFFIC PAINT - GREEN BIKE
LANE CASE 2 LF 876
90 84

TRAFFIC PAINT - GREEN BIKE
LANE CASE 3 LF 849
91 84 BIKE BUFFER LF 6,611
92 (S) 84

RRFB SYSTEM - GRAND &
MCCOLLUM NORTHBOUND LS 1
93 (S) 86

RRFB SYSTEM - GRAND &
MCCOLLUM SOUTHBOUND LS 1
94 (S)
86 RRFB SYSTEM - GRAND &

MCCOLLUM CONCRETE
MEDIAN
LS 1
95 (S) 86

REMOVE (E) POST BY CORING
AND PATCHING EA 1
96 82 INSTALL (N) 12' PUNCH POST EA 16
97 82 OM2-1V OBJECT MARKER EA 1
98 82 R1-5 SIGN EA 1
99 82 R3-5 R SIGN EA 4
100 82 R6-1 R SIGN EA 1
101 82 W11-2 SIGN EA 3
102 82 W16-9P SIGN EA 1
103 82 R1-5 SIGN EA 1
104 82 R2-1 (35) SIGN EA 2
105 82 R3-7 SIGN EA 1
106 82 R4-1 SIGN EA 2

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BID FORMS
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Item Item Unit of Estimated Item Price Total
No. SS(1) Description Measure Quantity (in figures) (in figures) 107 82 R4-4 SIGN EA 1
108 82 R6-1 R SIGN EA 1
109 82 R10-15 MOD EA 1
110 82 R26 SIGN EA 1
111 82 R61-5 SIGN EA 1
112 82 R81(CA) SIGN EA 5
113 82 R81A SIGN EA 5
114 82 SR4-1 SIGN EA 1
115 82 W4-2 SIGN EA 4
116 82 W9-1 SIGN EA 1
117 82 W11-2 SIGN EA 3
118 82 W16-9P SIGN EA 1
119 82 STREET NAME SIGNS EA 6
120 73 TRUNCATED DOMES SQFT 49
121 82

BLUE HYDRANT MARKERS PER
CITY STD 7920 EA 9
122 84

TRAFFIC PAINT - GREENBACK
SHARROW EA 3
123 84

TRAFFIC PAINT - PAVEMENT
MARKINGS/ LEGENDS SQFT 1,041
124 84

TRAFFIC CONTROL PLAN AND
IMPLEMENTATION LS 1
125
7,
12 COMPLY WITH CALTRANS
ENCROACHMENT PERMIT LS 1
Alternative Bid Total $
Total Project Bid = (base Bid + Additive Alternative A) $ Company Name:
(1) refers to section in the Standard Specifications, with modifications in the Special Provisions, that describe required work.

BID FORMS

BID FORMS
F

LIST OF SUBCONTRACTORS
Pursuant to Section 4100 of the Public Contracts Code and section 2-1.33C of the standard specifications, the Bidder is required to furnish the following information for each Subcontractor performing more than 1/2 percent (0.5%) of the total base bid. Do not list alternative subcontractors for the same work. Subcontracting must not total more than fifty percent (50%) of the submitted bid except as allowed in section 5-1.13 of the standard specifications.

For Streets & Highways projects, subcontractors performing less than ten thousand dollars ($10,000) worth of work need not be mentioned. Subcontractors required to pay prevailing wage, must be registered with the Department of Industrial Relations pursuant to Labor Code section 1725.5 to be listed.

NOTE: If there are no subcontractors, write “NONE” and submit with bid.

Name Under Which
Subcontractor is Licensed License Number
DIR Public
Works
Registration
Number
Address and Phone
Number of Office, Mill or
Shop
Specific
Description of
Subcontract
% of
Total
Base
Bid
Attach additional sheets as needed.

BID FORMS

BID FORMS
G
PUBLIC CONTRACT CODE SECTION 10285.1 STATEMENT
In compliance with Public Contract Code Section 10285.1 (Chapter 376, Stats. 1985), the bidder hereby declares under penalty of perjury under the laws of the State of California that the bidder, or any subcontractor to be engaged by the bidder, has ____, has not ____ been convicted within the preceding three years of any offenses referred to in that section, including any charge of fraud, bribery, collusion, conspiracy, or any other act in violation of any state or federal antitrust law in connection with the bidding upon, award of, or performance of, any public works contract, as defined in Public Contract Code Section 1101, with any public entity, as defined in Public Contract Code Section 1100, including the Regents of the University of California or the Trustees of the California State University. The term "bidder" is understood to include any partner, member, officer, director, responsible managing officer, or responsible managing employee thereof, as referred to in Section 10285.1.

NOTE: The bidder must place a check mark after "has" or "has not" in one of the blank spaces provided. The above Statement is part of the Bid. Signing this Bid on the signature portion constitute signature of this Statement. Bidders are cautioned that making a false certification may subject the certifier to criminal prosecution.

PUBLIC CONTRACT CODE SECTION 10162 QUESTIONNAIRE
In compliance with Public Contract Code Section 10162, the Bidder must complete, under penalty of perjury, the following questionnaire:

Has the bidder, any officer of the bidder, or any employee of the bidder who has a proprietary interest in the bidder, ever been disqualified, removed, or otherwise prevented from bidding on, or completing a federal, state, or local government project because of a violation of law or a safety regulation?
Yes No
If the answer is yes, attach a letter explaining the circumstances PUBLIC CONTRACT CODE SECTION 10232 STATEMENT
In compliance with Public Contract Code Section 10232, you hereby state under penalty of perjury, that no more than one final unappealable finding of contempt of court by a federal court has been issued against you within the immediately preceding two-year period because of your failure to comply with an order of a federal court which orders you to comply with an order of the National Labor Relations Board.

LABOR CODE SECTION 1725.5 STATEMENTS
The bidder has delinquent liability to an employee or the state for any assessment of back wages or related damages, interest, fines, or penalties pursuant to any final judgment, order, or determination by a court or any federal, state, or local administrative agency, including a confirmed arbitration award. Any judgment, order, or determination that is

BID FORMS

BID FORMS
H
under appeal is excluded, provided that the contractor has secured the payment of any amount eventually found due through a bond or other appropriate means.

Yes No
The bidder is currently debarred under Section 1777.1 or under any other federal or state law providing for the debarment of contractors from public works.

Yes No
NOTE: The above Statements and Questionnaire are part of the Bid. Signing this Bid on the signature portion constitute signature of this Statement and Questionnaire. Bidders are cautioned that making a false certification may subject the certifier to criminal prosecution.

BID FORMS

BID FORMS
I

NON-COLLUSION DECLARATION
I, , declare that
I am of ,
the party making the foregoing bid that the bid is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation; that the bid is genuine and not collusive or sham; that the bidder has not directly or indirectly induced or solicited any other bidder to put in a false or sham bid, and has not directly or indirectly colluded, conspired, connived, or agreed with any bidder or anyone else to put in a sham bid, or that anyone refrained from bidding; that the bidder has not in any manner, directly or indirectly, sought by agreement, communication, or conference with anyone to fix the bid price of the bidder or any other bidder, or to fix any overhead, profit, or cost element of the bid price, or of that of any other bidder, or to secure any advantage against the public body awarding the contract of anyone interested in the proposed contract; that all statements contained in the bid are true; and, further, that the bidder has not, directly or indirectly, submitted his or her bid price or any breakdown thereof, or the contents thereof, or divulged information or data relative thereto, or paid, and will not pay, any fee to any corporation, partnership, company association, organization, bid depository, or to any member or agent thereof to effectuate a collusive or sham bid.

Executed on , 20 , in __
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
(Signature and Title of Declarant)
(SEAL)
Subscribed and sworn to before me
this _______day of _________, 20_____
Notary Public
Company Name:____________________

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BID FORMS
J

BIDDER ACKNOWLEDGEMENTS
By signing below, the bidder acknowledges and confirms that this bid is based on the information contained in all contract documents, including the notice to bidders, plans, specifications, special provisions, and addendum number(s) . (Note: You are responsible to verify the number of addenda prior to the bid opening.)
The undersigned further agrees that in case of default in executing the required contract, with necessary bonds, within eight days, (not including Saturdays, Sundays, and legal holidays), after having received a mailed notice that the contract is ready for signature, the proceeds of the check or bond accompanying his bid will become the property of the City of San Luis Obispo.

Licensed in accordance with an act providing for the registration of contractors, License No. , Expiration Date .

The above statement is made under penalty of perjury, and any bid not containing this information "will be considered non-responsive and will be rejected” by the City.

Signature of Bidder
(Print Name and Title of Bidder)
DIR– Public Works
Registration No:

Business Name (DBA):

Owner/Legal Name:

Indicate One: Sole-proprietor  Partnership Corporation List Partners/Corporate Officers:

Name Title
Name Title
Name Title
Business Address
Street Address
Mailing Address
City, State, Zip Code
Phone Number
Fax Number
Email Address
Date

BID FORMS

BID FORMS
K

QUALIFICATIONS
Failure to furnish complete reference information ON THIS FORM, as specified in this project’s Notice to Bidders and indicated below, is cause to reject the bid. Additional information may be attached but is not a substitute for this form.

Reference Number 1
Customer Name & Contact Individual
Telephone & Email
Project Name (Site Address):

Did this project include roadway
maintenance by slurry sealing?
Yes □ No □
Describe the services provided and how this project is similar to that which is being bid:

Date project completed:

Was this contract for a public agency?
Yes □ No □
Reference Number 2
Customer Name & Contact Individual
Telephone & Email
Project Name (Site Address):

Did this project include roadway
maintenance by slurry sealing?
Yes □ No □
Describe the services provided and how this project is similar to that which is being bid:

Date project completed:

Was this contract for a public agency?
Yes □ No □
Reference Number 3
Customer Name & Contact Individual
Telephone & Email
Project Name (Site Address):

Did this project include roadway
maintenance by slurry sealing?
Yes □ No □
Describe the services provided and how this project is similar to that which is being bid:

Date project completed:

Was this contract for a public agency?
Yes □ No □

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ATTACH BIDDER'S BOND TO ACCOMPANY BID
Know all men by these presents:

That we ____________________________________________, AS PRINCIPAL, and _______________________________________________________, AS SURETY, are held and firmly bound unto the City of San Luis Obispo in the sum of:
____________________________________________________ Dollars (_____________) to be paid to said City or its certain attorney, its successors and assigns; for which payment, well and truly to be made, we bind ourselves, our heirs, executors and administrators, successors or assigns, jointly and severally, firmly by these presents:

THE CONDITION OF THIS OBLIGATION IS SUCH, that if the certain bid of the above bounden ______________________________________________________________________ to construct ___________________________________________________________________ (insert name of street and limits to be improved or project) dated _____________________ is accepted by the City of San Luis Obispo, and if the above bounden _______________________________________________________, his heirs, executors, administrators, successors, and assigns shall duly enter into and execute a contract for such construction and shall execute and deliver the two bonds described within ten (10) days (not including Saturdays, Sundays, or legal holidays) after the above bounden,
______________________________________________________, has received notice by and from the said City of San Luis Obispo that said contract is ready for execution, then this obligation shall become null and void; otherwise, it shall be and remain in full force and virtue.

IN WITNESS WHEREOF, we hereunto set our hands and seals this ___ day of ______, 20____.

Bidder Principal:

Signature Date
Title:

Surety:

Bidder's signature is not required to be notarized. Surety's signature must be notarized.

Equivalent form may be substituted
(Rev. 6-30-14)

SPECIAL PROVISIONS
1 SPECIAL PROVISIONS

ORGANIZATION
Special provisions are under headings that correspond with the main section heading of the Standard Specifications. Each special provision begins with a revision clause that describes or introduces a revision to the Standard Specifications. Any paragraph added or deleted by a revision clause does not change the paragraph number of the Standard Specifications for any other reference to a paragraph of the Standard Specifications.

DIVISION I GENERAL PROVISIONS
1 GENERAL
Add to Section 1-1.01 GENERAL:

The work must be done in compliance with the City of San Luis Obispo, Department of Public Works:

1. Roadway Sealing 2024 Special Provisions

2. City of San Luis Obispo Standard Specifications and Engineering Standards – 2020 edition

3. State of California, Department of Transportation Standard Specifications and Standard Plans – 2015 edition
In case of conflict between documents, governing ranking must comply with section 5-

1.02 of the City of San Luis Obispo’s Standard Specifications.

Failure to comply with the provisions of these sections is a material breach of contract:

1. Sections 5 through 8 of the Standard Specifications

2. Section 12 through 15 of the Standard Specifications

3. Section 77-1 of the Standard Specifications

4. Section 81 of the Standard Specifications

5. authorized working hours

6. OSHA compliance
3 CONTRACT AWARD AND EXECUTION
Replace the 1st and 2nd paragraph in Section 3-1.18 CONTRACT EXECUTION with:

Upon notification of project award, return:

1. executed contract

2. insurance

3. contract bonds
within five business days after the bidder receives the contract.

Add Section 3-1.18B CONTRACT EXECUTION, Caltrans Encroachment Permit with:

Compliance with Caltrans Encroachment permit and traffic control shall conform to the provisions of Section 12 “Temporary Traffic Control”, of the Standard Specifications and these Special Provisions.

SPECIAL PROVISIONS

SPECIAL PROVISIONS
2 Measurement and Payment
The lump sum contract price paid to comply with Caltrans Encroachment Permit shall include full compensation for furnishing all labor, materials, tools, equipment, personnel, and for doing all the work involved to comply with all Caltrans encroachment permit requirements.

Add Section 3-1.18C CONTRACT EXECUTION, Building Permit with:

The contractor must obtain a no-fee building permit from the Community Development Department. All requirements of the building permit shall be applied to the project. The contractor is responsible for coordinating inspection with the building division for the project. Request for inspection must be scheduled 72 hours in advanced of the required inspection.

Prior to project construction, the Contractor must completely fill out the Construction & Demolition Recycling Plan and Disposal Report, found on the City’s Construction & Demolition Recycling Program website to obtain a Building Permit. The Construction & Demolition Recycling Plan and Disposal Report must be turned into Utilities Department located at 879 Morro Street, San Luis Obispo, CA 93401 for review and approval.

Upon completion of the project, the Contractor must submit waste receipts and final permit, see page 2 of the Construction & Demolition Recycling Plan and Disposal Report, to 879 Morro for sign off.
4 SCOPE OF WORK
Add to Section 4-1.03 WORK DESCRIPTION:

Comply with the provisions of Sections 3, 7, 10, 12, 13, 15, 20, 37, 39, 73, 82, 84 and 96 for general, material, construction, and payment specifics. 5 CONTROL OF WORK
Add to Section 5-120B(5) COORDINATION WITH OTHER ENTITIES, Permits, Licenses, Agreements, and Certifications - Comply with Local, State and Federal Regulations:

The City applied for and received a pending encroachment permit (Permit No.) from the State of California, Department of Transportation for work within and affecting Caltrans public right of way. The Contractor is required to obtain and pull the pending permit, comply with all conditions, and pay all associated fees. A copy of the pending permit is included in Appendix B.

Parking Lots are to maintain 20% capacity at all times during the duration of work unless previously discussed and approved by the Engineer. Prior to the sealing of any parking lot, contractor must post signage informing the public about upcoming sealing work. All signage must be submitted to the Engineer for review prior to posting.

SPECIAL PROVISIONS

SPECIAL PROVISIONS
3 redirecting traffic to the available spots or area open. Parking lots must not be closed not to remain closed for longer than
6 CONTROL OF MATERIALS
Add to Section 6-2.03 DEPARTMENT ACCEPTANCE:

The Engineer will furnish Sale Tax signs mounted to moveable Barricades. Maintain Sales Tax signage in work area. Return Sales Tax signs at the end of the project or upon the Engineer’s request.

The Engineer will furnish one (1) GREEN WAY SYMBOL stencil as detailed in the project plans. Contractor can obtain additional stencil(s) at its own discretion and must be approved by the Engineer prior to use for this project. sale Tax signs are stored at the City’s corporation Yard at Prado Road. The contractor is responsible to load and transport from City Corporation Yard to job site and return them when the project is completed under direction of project inspector.

Water to be used in the slurry seal emulsion must be potable water. The City will provide a hydrant location for the slurry mix. The Contractor will be responsible to pay for the potable water.
7 LEGAL RELATIONS AND RESPONSIBILITY TO THE PUBLIC
Add to Section 7-1.03B PUBLIC CONVENIENCE, Traffic Control Plan:

Unless stated otherwise below, work hours are restricted to 7:00 a.m. to 4:00 p.m. (Monday through Friday) on all affected streets.

Unless otherwise approved by Caltrans and the Engineer, work within Caltrans Right of Way must be performed between the hours of 9:00 a.m. to 3:00 p.m. (Monday through Thursday) and 9:00 a.m. to 2:00 p.m. Friday.

SCHOOL ZONES
All work within school zones (Appendix C) must be completed as the first order of work.

The Contractor must prioritize work in school zones to finish the work before the start of the school year on August 15th, 2024.

If these streets within school zones are not completed before school is back in session on August 15th, 2024, these streets will not be allowed full closure. The Contractor will be responsible to provide flaggers and maintain traffic for student drop off and pick up at no additional cost to the City.

When school is in session, work hours within school zones are limited to 9:00 a.m. to 3:00 p.m. (Tuesday through Friday) and 9:30 a.m. to 3:00 p.m. on Mondays. Working hours

SPECIAL PROVISIONS

SPECIAL PROVISIONS
4 along Johnson Street when school is in session are 9:00 a.m. to 3:00 p.m. (Tuesday through Friday) and 10:30 a.m. to 3:00 p.m. on Mondays
Changeable Message Signs
Contractor shall provide Changeable Message Signs (CMS) for the following locations:

One CMS for any US 101 off ramp closure. See Appendix B – Caltrans Encroachment Permit for additional details and requirements.

Additionally, two (2) changeable message signs (CMS) must be installed and operational 2 weeks prior to the start of construction and be maintained throughout the duration of the project. Locations must be approved by the Engineer prior to the installation of the CMS and location must be included in the submitted Traffic Control Plan. CMS will be relocated as needed at the direction of the Engineer.

NIGHT WORK
Night work is permitted separately. Night work shall comply with the restrictions set forth in the permit by the City of San Luis Obispo Community Development. It is the contractor’s responsibility to keep track of night work expiration date. Request to extend the night work permit must be submitted to the Engineer at least three weeks prior to permit expiration date.

Night work is defined as work between the hours of 7:00 P.M. and 7:00 A.M (Sunday through Thursday). Night work will not be allowed on Friday or Saturday. Prior to commencing the project, the contractor must notify businesses and residences within 300 feet of the worksite about proposed night work.

Any portable or fixed equipment that produces noise (such as generators, concrete saws, jack hammers, etc.) must be equipped with sound blankets, temporary sound barriers, or other attenuating devices so as to limit impacts to adjoining properties.

When not in use, equipment must be kept in its lowest (quietest) idling state or switched off to limit noise impacts.

Any portable lighting must be shielded and/or directed away from adjacent properties.

Loudspeakers or other similar forms of communication is prohibited.

Contractor will provide lighting for all operations, no exceptions are to be made. Any Contractor personnel working outside the lights will be directed to return to a lighted area or the operation must be stopped.

All contractor work vehicles, including heavy equipment, backhoes, trenching machines must have two working headlights and taillights. Vehicles without appropriate lighting will be kept from working until they are brought to compliance.

SPECIAL PROVISIONS

SPECIAL PROVISIONS
5 Illumination level of 10-foot candles is required for all nighttime operations, which will normally be achieved with light plants or balloon lights. All lighting fixtures must be mounted and directed in manner precluding glare to approaching traffic.

Provide traffic control plan and traffic control application at or before the preconstruction meeting. Traffic control plan must be drawn to scale. Traffic control application may be obtained on the City’s website:
www.slocity.org/government/department-directory/public-works/documentsonline/construction-documents Upon approval of the traffic control plan, the City will issue a no-fee Encroachment Permit.

Permittee is responsible to comply with all conditions of the traffic control plan. Complete work using due diligence to restore free flowing of traffic. 8 PROSECUTION AND PROGRESS
Replace the 1st paragraph in Section 8-1.02A SCHEDULE, General with:

Provide a Level 1 schedule for this work. A one week look ahead schedule shall be provided to the Engineer before commencing the following week’s work. This requirement shall be completed in order to continue construction work.

Add to Section 8-1.04B START OF JOB SITE ACTIVITIES, Standard Start:

Contract time will start on the second Monday after preconstruction meeting.

DIVISION II GENERAL CONSTRUCTION
12 TEMPORARY TRAFFIC ONTROL
Replace Section 12-6.03D(1) TEMPORARY TRAFFIC STRIPE, PAVEMENT MARKING AND PAVEMENT MAKRERS, General with:

After existing traffic stripes and pavement markings have been removed, temporary stripping and pavement markings must be installed to match proposed lane configuration and remain in place until slurry operations have begun. Temporary striping tabs may be used in low traffic areas with the approval of the Engineer.

Temporary striping and pavement markings must be installed to match proposed lane configuration after the application of slurry sealing and must remain in place until final striping can be completed. Temporary striping tabs may be used in low traffic areas with the approval of the Engineer.

Replace Section 12-6.04 PAYMENT with:

The lump sum price paid for “Temporary Striping and Pavement Markings” include payment for the following:
• Temporary stripping and pavement markings to match proposed lane configuration after existing traffic stripes and pavement markings have been removed.

SPECIAL PROVISIONS

SPECIAL PROVISIONS
6 • Temporary striping and pavement markings to match proposed lane configuration after the application of slurry sealing.
• Removal of traffic stripes and pavement markings
13 WATER POLLUTION CONTROL
Add to Section 13-7.02C STREET SWEEPING, Construction with:

Street sweeping shall be performed 24 hours and 30 days after application of Type II slurry seal. The Contractor must post streets for no parking in advance and during the 24 hour and 30-day street sweeping. The Contractor must submit a street sweeping schedule for approval by the Engineer. Street sweeping must be done in a manner that street parking is available within 600 ft from affected addresses, unless approved by the Engineer.

Add to Section 13-7.02D STREET SWEEPING, Payment with:

The lump sum item price for Street Sweeping shall include full compensation for furnishing all labor, materials, tools, equipment, personnel, “No Parking” notices, door hangers, and incidentals, and for doing all the work involved with Street Sweeping and no additional compensation therefor.
15 EXISTING FACILITIES
Add Section 15-2.02 Obliterate Roads, Detours, and Surfacing Micro-milling must be utilized for bike lane and at existing curb ramps edge grinds located in slurry pavement treatment.

Micro-milling machines shall:

Be equipped with a micro-milling drum with tungsten-carbide-tipped cutting teeth spaced no greater than ¼ inch apart on center. The configuration of the teeth shall be such that the deviation in elevation between any 2 teeth does not exceed 1/16 inch. Be capable of removing asphalt concrete pavement to a tolerance of +/- 1/8 inch. Be equipped with an automatic grade control system operating in “profile” mode.

Micro-milling shall result in a grid-patterned textured pavement surface with longitudinal ridges approximately the same distance apart as the cutting teeth. The ridges shall be consistent in depth, width, and profile. The distance between the top of the ridge and the adjacent valleys shall not exceed 1/8 inch.

Add Section 15-2.02B Payment
The linear feet price for Edge Grind shall include full compensation for furnishing all labor, materials, tools, equipment, personnel, and incidentals, and for doing all the work involved with edge grinds and no additional compensation therefor.

DIVISION V SURFACINGS AND PAVEMENTS
37 BITUMINOUS SEALS
Add to Section 37-3.02A MATERIALS, General with:

SPECIAL PROVISIONS

SPECIAL PROVISIONS
7 Slurry seal must be Type II. Use Polymer Modified Asphaltic Emulsion with 2% latex additive.

Add to Section 37-3.03A CONSTRUCTION, General with:

Not all frames, covers, grates, or manholes are shown on the Plans. The Contractor is responsible for examining the site of work. A submission of a bid is conclusive evidence that the bidder has investigated the local conditions to be encountered.

Add to Section 37-3.03(D)(2)(A) PLACING, Surface Preparation, General with:

Roll all seal material with a pneumatic tire roller, a minimum of four (4) coverages, prior to allowing traffic on the surfaced roads. After placement of seal material surfaced roads must be opened to traffic no later than 3 hours after the seal material has been placed and no later than 4:00 p.m. in the evening. Quantities of seal placed daily must be adjusted to accommodate road-opening schedule.

A coverage must consist of the number of passes a roller needs to cover the width. A pass must be 1 roller movement parallel to the slurry seal application in either direction.

Overlapping passes are part of the coverage being made and are not part of a subsequent coverage. Do not start a coverage until completing the previous coverage.

Roll all seal material with a pneumatic tire roller, a minimum of four (4) coverages, prior to allowing foot traffic on the surfaced pathways. After placement of seal material, surfaced pathway must be opened to traffic no later than 3 hours after the seal material has been placed and no later than 4:00 p.m. in the evening. Quantities of seal placed daily must be adjusted to accommodate road-opening schedule.

A coverage must consist of the number of passes a roller needs to cover the width. A pass must be 1 roller movement parallel to the slurry seal application in either direction.

Overlapping passes are part of the coverage being made and are not part of a subsequent coverage. Do not start a coverage until completing the previous coverage.

Failure to roll any of the streets sealed for a given day, will result in a $1,000 Liquidated Damage penalty for that day and will not be prorated.

Add to Section 37-3.03(D)(4)(b) CONSTUCTION, Placing, Placement, Slurry Seal with:

Thru-traffic lanes must be spread in full lane widths only. Slurry seal must be spread at a rate within the ranges shown in the following table for pounds of dry aggregate per square yard:

Slurry Seal Type Location Spread Rate
Type II Full Lane Width 14+/-1
Notes:

1. For slurry over asphalt concrete pavement
During slurry sealing operations, You are responsible for:

SPECIAL PROVISIONS

SPECIAL PROVISIONS
8 1. Verifying that the slurry seal emulsion being used will allow for rolling within the specified time frame.

2. Adjusting the mixture for changes in weather conditions, as appropriate.

3. Sweeping the surface approximately 24 hours and 30 days after placement and as directed by the Engineer. See section 13-7.02 Street Sweeping.

4. Sweeping in such a manner as to remove loosened or shed aggregate particles without damaging the new surface.

DIVISION VIII MISCELLANEOUS CONSTRUCTION
77 LOCAL INFRASTRUCTURE
Add to Section 77-1.01 EXCAVATIONS AND RESTORATION, General:

Protection and restoration of survey monuments and benchmarks must comply with section 5-1.26 and 5-1.36

DIVISION IX TRAFFIC CONTROL DEVICES
84 MARKINGS
Add to Section 84-2.01A Summary with:

Traffic striping to be applied shall be per Caltrans Standard Plans 2015. See section 84-

2.04 of the City Standard Specifications for payment of traffic striping. Contractor shall install temporary reflective tape to crosswalks near schools and for marking in speed bumps prior to opening traffic.

New crosswalk markings shall not be installed until all crosswalk warning signage are installed. Otherwise, temporary signage must be installed to convey “CROSSWALK CLOSED” to the satisfaction of the engineer.

Add to Section 84-2.03C Application of Stripes and Markings:

Preformed thermoplastic will not be allowed.

All striping requiring pavement markers (i.e. Detail 9, Detail 37B, etc.) on one-way streets shall be Type RED-CLEAR RETROREFLECTIVE per Caltrans Standard Plans 2015 Add to Section 84-2.04 Payment with:

Bike lane buffer is measured along the linear foot and accounts for all striping and cross hatching regardless of width of buffer.

Green bike lane coating is measured by the square foot for the area applied.

Details containing white pavement markings and green pavement paint (left turn bike box, greenback sharrow, greenback chevron, etc.) will be paid per detail and no additional compensations will be allowed.

SPECIAL PROVISIONS

SPECIAL PROVISIONS
9 Green bike lane markings (Case 1, 2, & 3) paid by the linear foot include bike lane symbol, green paint, white markings and striping and no additional compensation will be allowed.

Add Section 84-6 BIKE LANE MARKINGS
Add Section 84-6.01 Bike Lane Coatings:

Bike lane coating must be SealMaster Color safe (Appendix D) or approved equal at all locations except for Grand Street ( Sheets S61 – S69) where green traffic-rated paint shall be used. Prior to installation of green bike lane coating, the contractor shall submit a color sample and manufacturer specifications to the City for approval.

Prior to installation of green bike lane coating, contractor is responsible for noticing adjacent properties to provide advance warning of planned work and potential odors during installation and while the coating cures.

Add Section 84-6.04 Payment:

Payment must comply with Section 84-2.04
Replace Section 84-9.04 Payment with:

Full compensation for work specified in Section 84 and applicable Engineering Standards is included in the payment of other bid items unless a bid item of work is shown on the Bid item list.

DIVISION X ELECTRICAL WORK
86 ELECTRICAL SYSTEMS
As shown on the bid item list, installation of the Rapid Rectangular Flashing Beacon system will be paid per the limits shown on the plans at each intersection. The lump sum unit price includes furnishing and installation of all equipment needed for intended operation of beacon system. Unit costs include all work shown on the plans, as specified in the Standard Specifications and these Special Provisions. Unless otherwise indicated on plans, each beacon system includes, but is not limited to:

1. Solar engine kit

2. Beacon light bars

3. Battery system

4. Pushbuttons

5. Pushbutton frame and sign placards

6. Mounting hardware

7. Electrical conductors/wiring
Punch posts and signage to be installed at each beacon location are included as individual bid items.

DIVISION XIII APPENDICES
ADD SECTION 100 APPENDICES
Add SECTION 100-1.01 GENERAL

SPECIAL PROVISIONS

SPECIAL PROVISIONS
10 Refer to APPENDIX A: Form of Agreement
Refer to APPENDIX B: Caltrans Encroachment Permit
Refer to APPENDIX C: School Zones
Refer to APPENDIX D: Bike Lane Coating

APPENDIX

APPENDIX
0 APPENDIX A - FORM OF AGREEMENT
THIS AGREEMENT, made on _____________, by and between the City of San Luis Obispo, a municipal corporation and charter city, San Luis Obispo County, California (hereinafter called the Owner) and COMPANY NAME (hereinafter called the Contractor).

WITNESSETH:

That the Owner and the Contractor for the consideration stated herein agree as follows:

ARTICLE 1, SCOPE OF WORK: The Contractor shall perform everything required to be performed, shall provide and furnish all of the labor, materials, necessary tools, expendable equipment, and all utility and transportation services required to complete all the work of construction of
NAME OF PROJECT, SPEC NO.
in strict compliance with the plans and specifications therefor, including any and all Addenda, adopted by the Owner, in strict compliance with the Contract Documents hereinafter enumerated.

It is agreed that said labor, materials, tools, equipment, and services shall be furnished and said work performed and completed under the direction and supervision and subject to the approval of the Owner or its authorized representatives.

ARTICLE II, CONTRACT PRICE: The Owner shall pay the Contractor as full consideration for the faithful performance of this Contract, subject to any additions or deductions as provided in the Contract Documents, the contract prices as follows:

Item
No.

Item Unit of
Measure
Estimated
Quantity
Item Price
(in figures)
Total
(in figures)

1. 2.

3. BID TOTAL: $ .00
Payments are to be made to the Contractor in compliance with and subject to the provisions embodied in the documents made a part of this Contract.

Should any dispute arise respecting the true value of any work omitted, or of any extra work which the Contractor may be required to do, or respecting the size of any payment to the Contractor, during the performance of this Contract, said dispute shall be decided by the Owner and its decision shall be final, and conclusive.

APPENDIX

APPENDIX
1 ARTICLE III, COMPONENT PARTS OF THIS CONTRACT: The Contract consists of the following documents, all of which are as fully a part thereof as if herein set out in full, and if not attached, as if hereto attached:

1. Notice to Bidders and Information for Bidders

2. Standard Specifications and Engineering Standards

3. Special Provisions, any Addenda, Plans and Contract Change Orders

4. Caltrans Standard Specifications and Standard Plans 2015

5. Accepted Bid and Bid Bond

6. List of Subcontractors

7. Public Contract Code Sections 10285.1 Statement

8. Public Contract Code Section 10162 Questionnaire

9. Public Contract Code Section 10232 Statement

10.Labor Code Section 1725.5 Statements

11.Bidder Acknowledgements

12.Qualifications

13.Non-collusion Declaration

14.Agreement and Bonds

15.Insurance Requirements and Forms
ARTICLE IV INDEMNIFICATION: The Contractor shall indemnify, defend with legal counsel approved by City, and hold harmless City, its officers, officials, employees and volunteers from and against all liability, loss, damage, expense, cost (including without limitation reasonable legal counsel fees, expert fees and all other costs and fees of litigation) of every nature arising out of or in connection with the Contractor’s negligence, recklessness or willful misconduct in the performance of work hereunder or its failure to comply with any of its obligations contained in this Agreement, except such loss or damage which is caused by the sole or active negligence or willful misconduct of the City. Should conflict of interest principles preclude a single legal counsel from representing both the City and the Contractor, or should the City otherwise find the Contractor’s legal counsel unacceptable, then the Contractor shall reimburse the City its costs of defense, including without limitation reasonable legal counsel fees, expert fees and all other costs and fees of litigation. The Contractor shall promptly pay any final judgment rendered against the City (and its officers, officials, employees and volunteers) with respect to claims determined by a trier of fact to have been the result of the Contractor’s negligent, reckless or wrongful performance. It is expressly understood and agreed that the foregoing provisions are intended to be as broad and inclusive as is permitted by the law of the State of California and will survive termination of this Agreement.

The Contractor obligations under this section apply regardless of whether such claim, charge, damage, demand, action, proceeding, loss, stop notice, cost, expense, judgment, civil fine or penalty, or liability was caused in part or contributed to by an Indemnitee.

However, without affecting the rights of the City under any provision of this agreement, the Contractor shall not be required to indemnify and hold harmless the City for liability attributable to the active negligence of City, provided such active negligence is determined by agreement between the parties or by the findings of a court of competent jurisdiction. In

APPENDIX

APPENDIX
2 instances where the City is shown to have been actively negligent and where the City’s active negligence accounts for only a percentage of the liability involved, the obligation of the Contractor will be for that entire portion or percentage of liability not attributable to the active negligence of the City.

ARTICLE V. It is further expressly agreed by and between the parties hereto that should there be any conflict between the terms of this instrument and the bid of said Contractor, then this instrument shall control and nothing herein shall be considered as an acceptance of the said terms of said bid conflicting herewith.

IN WITNESS WHEREOF, the parties to these presents have hereunto set their hands this year and date first above written.

CITY OF SAN LUIS OBISPO
A Municipal Corporation
__________________________________
Derek Johnson, City Manager
APPROVED AS TO FORM CONTRACTOR:

Name of Company
________________________________ By:________________________________ J. Christine Dietrick
City Attorney
Name of CAO/President
Its: CAO/PRESIDENT
(2nd signature required if Corporation):

By:________________________________
Name of Corporate Officer
Its: ____________________

APPENDIX

APPENDIX C - LOCATION MAP

APPENDIX
4

PUBLIC WORKS DEPARTMENT
919 Palm Street, San Luis Obispo, CA 93401
Roadway Sealing 2024
Location Map
N

APPENDIX

APPENDIX
4 APPENDIX C - SCHOOL ZONES

APPENDIX

APPENDIX
5 APPENDIX D - SEALMASTER COLOR

Item 6j
Department: Administration
Cost Center: 1005
For Agenda of: 5/21/2024
Placement: Consent
Estimated Time: N/A
FROM: Greg Hermann, Deputy City Manager
Prepared By: Robert Hill, Sustainability & Natural Resources Official SUBJECT: AMENDMENT NO. 1 TO EXCLUSIVE NEGOTIATING AGREEMENT

WITH THE SAN LUIS OBISPO REPERTORY THEATRE

RECOMMENDATION
Approve Amendment No. 1 to the Exclusive Negotiating Agreement between the City of San Luis Obispo and the San Luis Obispo Repertory Theatre.

POLICY CONTEXT
The City of San Luis Obispo’s policies and procedures for real property acquisition and disposal are found at Section 475 of the Financial Management Manual, which further incorporates City Charter Article IX, Section 906 and City Council Resolution No. 10052 (2009 Series).

San Luis Obispo Repertory Theatre’s long-standing plan to construct a new theatre adjacent to the forthcoming Cultural Arts District Parking Structure is consistent with the Downtown Concept Plan (2017) and to vacate the City’s old library property is consistent with the Facilities Master Plan (2018).

DISCUSSION
Background
The San Luis Obispo Repertory Theatre (“SLO REP”), previously known as the San Luis Obispo Little Theatre, has been a long-standing tenant of the City’s old library property at 888 Morro Street located next door to City Hall. In March 2000, the City Council identified several options for a new theatre location within what would become known as the Cultural Arts District Parking Structure site, located at the corner of Palm and Nipomo Streets, and committed to working with SLO REP.

SLO REP is a valued community partner and local non-profit, has a strong Board and governance structure, has an established professional staff, and has increased theatre offerings. SLO REP has set forth a vision for a new 300-seat community theatre and has been implementing a significant capital campaign in anticipation of the design, construction, and operating costs associated with the long-planned move to a new location.

Item 6j
Previous Council Action
On May 22, 2019, the City and SLO REP entered into an Exclusive Negotiating Agreement (“ENA”) (Attachment B) to set forth the parameters and conditions for SLO REP’s long-term use of a portion of City property adjacent to the Cultural Arts District Parking Structure, which is now under construction. Among the key deal points of the ENA are that SLO REP complete a fundraising plan and proof of financial ability prior to entering into lease negotiations with the City for the site. The ENA has a five-year term and is therefore set to expire on May 22, 2024.

On April 19, 2022, the City and SLO REP entered into a Grant Agreement to provide funding in the amount of $3,940,000 towards future construction of the new theatre. This action followed SLO REP’s submittal of a “Challenge Grant” proposal that detailed the anticipated local economic impact of the new theatre, which concluded that the new theatre would generate more than $3 million annually while drawing 50,000 patrons to downtown San Luis Obispo each year.

On September 5, 2023, the City Council adopted Resolution No. 11445 (2023 Series) and made findings that the portion of City-owned land that is the subject of the ENA is Exempt Surplus Land under the California Surplus Land Act (Cal. Gov. Code § 54221).

Exclusive Negotiating Agreements entered into prior to September 30, 2019, are not subject to the Surplus Land Act’s noticing and availability requirements so long as the land is disposed of prior to 2027. Without a timely extension of the ENA, as recommended herein, the City would be required to complete noticing and availability requirements pursuant to the Surplus Land Act.

Amendment No. 1 to Exclusive Negotiating Agreement
Staff recommends extending the term of the ENA, and the draft amendment includes the following key points:

1. Provides for an additional 6-month term, with an option to extend for an additional 6-month term, to maintain timely forward progress in reasonable anticipation that the ENA could be replaced by a prospective lease agreement within that timeframe. The extension requires SLO REP to disclose other sites or options, if any, that it may be considering for the theatre. The additional 6-month term is then predicated on SLO REP issuing a written notice of intent to proceed with final lease negotiations with the City.

2. Amends and clarifies the expected standard for a construction contingency of 15%, operating reserve for the first year of 20%, and the required approval of a threeyear operating plan including the establishment of a fund for building and facilities maintenance and repair. City staff worked with SLO REP to identify an appropriate plan for reserve funding that is consistent with industry standards and practices and Council direction.

3. Forecasts the potential for a longer, 99-year lease term.

4. Acknowledges progress and milestones that have been met and addresses minor inconsistencies.

Item 6j
Public Engagement
Any member of the public may comment on this item either in writing in advance of the City Council meeting or by providing public comment during the hearing of this item.

CONCURRENCE
The City’s Community Development and Public Works Departments concur with the recommendations contained herein.

ENVIRONMENTAL REVIEW
Entering into Amendment No. 1 to the Exclusive Negotiating Agreement is not considered a project, in and of itself, under applicable CEQA guidelines. However, it should be noted that the City completed environmental review as lead agency for both the Parking Structure and the Theatre and certified a Final Environmental Impact Report by Resolution No. 10923 (2018 Series).

FISCAL IMPACT
Budgeted: Yes Budget Year: 2023-24
Funding Identified: Yes
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund
State
Federal
Fees
Other:

Total N/A N/A N/A N/A
The recommended action does not have a direct fiscal impact. Modest staff time from the City Administration Department will be used to oversee the terms of the ENA and Amendment No. 1, if approved.

ALTERNATIVES
Council may request additional information, make changes, or decide not to approve the draft Amendment No. 1 to the Exclusive Negotiating Agreement. A decision not to approve is not recommended by staff because the City and SLO REP have been working diligently together to move the new theatre project forward pursuant to prior Council direction and because, if the extension of the term included in the amendment is not completed timely, the City will be required to undertake the current noticing and availability requirements of the California Surplus Land Act.

Item 6j

ATTACHMENTS
A - Draft Amendment No. 1 to Exclusive Negotiating Agreement B - Exclusive Negotiating Agreement between City of San Luis Obispo and San Luis Obispo Repertory Theatre, May 22, 2019

AMENDMENT NO. 1 TO EXCLUSIVE NEGOTIATING AGREEMENT
THIS AMENDMENT NO. 1 TO EXCLUSIVE NEGOTIATING AGREEMENT is made and entered in the City of San Luis Obispo on _________________________________, by and between the City of San Luis Obispo, a charter municipal corporation (“the City”) and San Luis Obispo Repertory Theatre, a California non-profit organization (“SLO REP”). The City and SLO REP are jointly referred to as the “Parties”.

WITNESSETH:

WHEREAS, on May 22, 2019, the City and SLO REP entered into an Exclusive Negotiating Agreement (“ENA”) that set forth certain parameters, conditions, milestones, and conditions precedent to entering into a long-term lease for SLO REP to use of a portion of City property to construct and operate a new theatre building adjacent to the City’s Cultural Arts District Parking Structure, and WHEREAS, the ENA has a five-year term that may be extended by mutual agreement of the Parties and both the City and SLO REP have a desire to continue working together towards the construction and long-term operation of a new theatre building; and
WHEREAS, both the City and SLO REP have completed and will continue to maintain their respective obligations specified in the ENA, as well as satisfy the necessary conditions precedent to lease negotiations and execution (paragraphs 5, 6, and 8), and the Parties are presently working together to move towards the preparation of a mutually agreeable lease agreement.

NOW THEREFORE, in consideration of their mutual promises, obligations, and covenants hereinafter contained, the parties hereto agree as follows:

1. The Exclusive Negotiating Agreement is hereby amended as follows:
i. The term shall be extended for a period of six (6) months from the date of this Amendment No. 1, provided that SLO REP shall disclose to City other sites or options, if any, that it may be considering for the theatre. The ENA may be extended for an additional six (6) month period thereafter with approval by the City Manager. The additional six (6) month extension may only be considered upon SLO REP delivering a written notice of intent to proceed with final lease negotiations with the City.

ii. Paragraph 8a., General Lease Terms, shall be amended as follows: “SLO REP shall commence construction of the Theatre no later than one (1) year after the completion of the Palm Nipomo Cultural Arts District Parking Structure and shall complete construction of the Theatre within three (3) years after that.

SLO REP shall not commence construction of the Theatre unless SLO REP demonstrates, to the City’s Finance Manager Director’sreasonable satisfaction prior to expiration of the year within which SLO REP is to commencement of construction, that SLO REP has all of the funds necessary to design and construct, as well as operate for at least one (1) years after completion of construction, the Theatre, plus a 15% construction contingency, available in cash or approved financing (the “Required Funds”), and SLO REP shall also submit to the City Manager (or their delegate) a written document that demonstrates an operating reserve of 20% for the first year of operating the new theatre and three year operating plan including the establishment of a fund for building and facilities maintenance and repair.”
iii. Paragraph 8b., General Lease Terms, shall be replaced as follows: “A lease term not-to-exceed ninety-nine (99) years.”

2. All other terms and conditions of the Exclusive Negotiating Agreement remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first written above.

CITY OF SAN LUIS OBISPO SLO REPERTORY THEATRE
_________________________________ ________________________________ Erica A. Stewart, Mayor Kevin Harris, Managing Artistic Director ATTEST
_________________________________
Teresa Purrington, City Clerk

APPROVED AS TO FORM
_________________________________
J. Christine Dietrick, City Attorney

EXCLUSIVE NEGOTIATING AGREEMENT
This Exclusive Negotiating Agreement (“Agreement”) is entered into this ___day of ______, 2019 (the “Effective Date”), by and between the City of San Luis Obispo, a California charter municipal corporation ("the City'') and San Luis Obispo Repertory Theatre, a California non-profit corporation (“SLO REP”). The City and SLO REP are jointly referred to as the “parties”.

RECITALS
WHEREAS, the City is the legal owner of the property located at 888 Morro Street in San Luis Obispo, California (the “Property”); and
WHEREAS, the City identified a portion of the Property as the site of a proposed public parking structure (“Palm Nipomo Parking Structure”) and anticipates that an estimated 18,000 square foot portion of the Property will not be needed for the Palm Nipomo Parking Structure (“Remainder Property”); and WHEREAS, SLO REP desires to construct a not-for-profit live performance theatre facility and related onsite and off-site (if any) improvements (“Theatre”) on the Remainder Property; and WHEREAS, the parties recognize that the exact location, size and availability of the Remainder Property for the Theatre cannot be determined at this time, and understand that the Remainder Property has development restrictions including maintenance of trees, street setbacks and provision of pedestrian connections/plazas from the Palm Nipomo Parking Structure to Monterey Street that affect the net buildable land; and
WHEREAS, the City wishes to support community-based performing arts groups by encouraging development of a live performance theatre facility in the downtown; and WHEREAS, the City and SLO REP recognize that identifying a location for the Theatre, as well as some of the terms of a future lease, may help SLO REP’s capital fundraising efforts; and WHEREAS, construction of the Palm Nipomo Parking Structure and the Theatre and related rezoning and general plan amendments will require environmental review, and SLO REP must provide certain information about the Theatre before City can conduct the environmental review; and WHEREAS, the City’s Financial Management Manual allows exclusive negotiations for long term lease of City property when the there is a clear link between the proposal and accomplishment of significant City goals, plans or policies; and
WHEREAS, the City considers the development of a not-for-profit live performance theatre on the Remainder Property to be in the public interest and in accordance with the City's goals and the existing and proposed Downtown Concept Plan.

NOW, THEREFORE, in consideration of the mutual covenants, conditions, promises and agreements herein set forth, the parties agree as follows:

DocuSign Envelope ID: 0D5F9552-0A12-4481-A99B-695D14987222 5/22/2019

AGREEMENT

1. RECITALS. The above Recitals are true.

2. TERM. This Agreement shall commence upon the Effective Date and shall continue in effect for a period of five (5) years (the “Term”), unless sooner terminated as provided herein. The Parties may extend the Term of this Agreement in writing upon mutual consent.

3. PURPOSE. The purpose of this Agreement is to enable the City to proceed with the Palm Nipomo Parking Structure, and to allow SLO REP to explore the feasibility of SLO REP financing, designing, constructing and operating the Theatre, at its sole cost and expense, on the Remainder Property.

4. CITY’S OBLIGATIONS. The City shall, during the Term of this Agreement:
a. Exclusivity. Negotiate exclusively with SLO REP as the future tenant of the Remainder Property.
b. Initiate Rezoning, General Plan amendments, and Lot Line Adjustment.

Upon City Council authorization, initiate all rezoning, General Plan amendments, and a lot line adjustment necessary to allow the construction of the Palm Nipomo Parking Structure on a portion of the Property and the Theatre on the Remainder Property. The intent of this Agreement is for the Remainder Property to be created as a “finished lot,” although the City legally cannot, and therefore does not, contractually agree as to how it will exercise its legislative authority to rezone or amend the General Plan and its land use authority to complete a lot line adjustment. c. Environmental Review. The City has completed environmental review of the Palm Nipomo Parking Structure and the Theatre and has certified a Final Environmental Impact Report (“FEIR”) by Resolution No. 10923 (2018 Series). If SLO REP makes any changes to the Theatre design or if any of the conditions set forth in CEQA Guidelines § 15162 are triggered, then SLO REP may negotiate the portion of costs it will bear in the event substantial new environmental issues are discovered during construction, or if any project-specific environmental review related to the Theatre is deemed necessary.

5. SLO REP’s OBLIGATIONS. SLO REP shall, during the term of this Agreement:
a. Non-Profit Status. Be a California non-profit corporation in good standing and be exempt from state and federal income taxes under section 501 (c) (3) of the Internal Revenue Code.
b. Proof of Financial Ability. Provide to City’s reasonable satisfaction that it has the financial ability to design, construct and operate the Theatre on the Remainder Property. At a minimum SLO REP shall:

Fundraising Plan. Provide the City with a fundraising plan by December 31, 2019 that is acceptable to, and approved by, the City Manager, whose approval shall not be unreasonably withheld, delayed or conditioned. The fundraising plan shall include a timeline with milestones that shall be met no later than 1 year from the estimated completion of the Palm Nipomo Parking Structure. These DocuSign Envelope ID: 0D5F9552-0A12-4481-A99B-695D14987222

milestones shall include, at a minimum, prior to commencement of lease negotiations, but no later than one (1) year after City’s award and execution of a contract to construct the Palm Nipomo parking Structure, that SLO REP shall demonstrate, to the City Finance Director’s reasonable satisfaction, that SLO REP has available at least 50% of all the funds necessary to design and construct the Theatre.
i. Preliminary Cost Estimates. Provide the City with preliminary costs estimates by December 31, 2020 to design, construct and operate the Theatre for at least the first two (2) years after completion of construction. Update those estimates as design progresses, but at least every 6 months. SLO REP will include the payment of prevailing wages in its estimates.
ii. Annual Financials. Annually, on or before December 31st of each year, provide the City with a current financial statement, copy of most recent filed state and federal tax returns, and copies of current bank statements, to demonstrate fundraising results for the Theatre.
iii. Formal Development Application. Finalize and submit a formal development application for the Theatre to the City.
iv. Compensation for City Review Costs. Discuss and finalize how City processing and review costs will be funded.
c. Environmental Review Information. Provide the City promptly with all information necessary to conduct any subsequent environmental review of the Theatre that may be necessary. This information includes, but is not limited to, square footage of structure; square footage of various uses such as office, storage, classroom, and theatre; number of seats; maximum number of performances per week, and any other information deemed necessary by City.

6. TERMINATION. Either party may terminate this Agreement without liability to the other party at any time by written notice to the other. This Agreement shall automatically terminate in the event SLO REP fails to secure building permits for the Theatre one year after the completion of the Palm Nipomo parking structure.

7. CONDITIONS PRECEDENT TO LEASE NEGOTIATION AND EXECUTION. All of the following conditions must be met as conditions precedent prior to lease execution for the Remainder Property:
a. Lease negotiation:
i. Rezoning and Lot Line Adjustment. City has rezoned and/or amended the City’s general plan and has perfected a lot line adjustment that will create the Remainder Property as a “finished lot” allowing for construction and its use as the Theatre.
ii. Obligations Met. Both City and SLO REP have met all of their respective obligations under the Agreement.

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b. Availability of Funds for Design, Construction, and Operation of the Theatre Prior to execution of the lease, SLO REP demonstrates to the City Manager’s reasonable satisfaction that SLO REP has met all applicable fundraising milestones in the fundraising plan approved by the City Manager.
c. Non-Profit Status. SLO REP has maintained its non-profit and tax-exempt status under applicable state and federal law.
d. Design and Construction Schedule. Prior to lease execution, provide to the City’s Community Development Director’s reasonable satisfaction, a design and construction schedule, demonstrating, at a minimum, the Theatre will be constructed and completed within 3 years of the completion of the Palm Nipomo Parking Structure. e. Design Coordination. Coordinate design of the Theatre with the City to ensure it is compatible with the Palm Nipomo Parking Structure.

8. GENERAL LEASE TERMS. If the parties enter into the exclusive negotiations, the parties desire that the lease include the following general provisions; provided, the actual language of each provision is subject to further negotiation, and most material terms and provisions of the lease have not yet been discussed. The City shall not lease the land for minimal rent unless the lease is completely acceptable to the City and approved by the City Attorney. Nothing in this paragraph shall be interpreted as an agreement or offer to lease upon the terms, provisions or language set forth below.
a. SLO REP shall commence construction of the Theatre no later than one (1) year after the completion of the Palm Nipomo Parking Structure and shall complete construction of the Theatre within three (3) years after that. SLO REP shall not commence construction of the Theatre unless SLO REP demonstrates, to the City’s Finance Manager’s reasonable satisfaction prior to expiration of the year within which SLO REP is to commence construction, that SLO REP has all of the funds necessary to design and construct, as well as operate for at least one (1) years after completion of construction, the Theatre, plus a 15% contingency, available in cash or approved financing (the “Required Funds”).

If SLO REP does not timely demonstrate that SLO REP has the Required Funds, or if SLO REP fails to timely begin or timely complete construction, SLO REP shall be in substantial default, and the lease shall automatically terminate unless City agrees otherwise in writing. The Theatre shall be deemed complete only upon issuance of a Certificate of Occupancy.
b. Minimum 40-year term with the right of first refusal for additional lease years provided that Theatre is in good standing at the time of the renewal window, which shall open after 35 years and conclude after 37 years unless the window is extended. c. Rent of $1.00 per year provided SLO REP:
i. Is a California non-profit corporation in good standing; and ii. Is a federal and state income tax exempt 501 (c)(3) entity; and uses the Remainder Property solely as a live performance theatre and related City approved community uses.

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iii. SLO REP’s failure to maintain its non-profit corporate status in good standing or its tax-exempt status under applicable state and federal law or to use the Remainder Property for any purpose other than as a live performance theatre and related City approved community uses during the term or any extended term of the lease, shall be a material breach of the lease. In the event any such breach occurs, City may, at its option, either terminate the lease or raise the rent to fair market rates for neighboring commercial uses.
d. SLO REP shall design, construct, operate and maintain the Theatre and all street frontage and landscaping, utility extensions and connections, and other improvements, based on agreed upon and approved plans and specifications, at its sole cost and expense without any assistance from the City.
e. SLO REP shall be responsible for meeting or mitigating all conditions, impacts, mitigations and requirements identified in the environmental review and entitlement processes for issues associated with the SLO REP’s operation of a theatre on the Property, at SLO REP’s sole cost and expense.
f. The design of the Theatre must be compatible with the design of the Palm Nipomo Parking Structure, including the parking structure’s entrance and exiting needs, as determined by the sole discretion of the Public Works Director. g. SLO REP shall take all reasonable efforts to preserve, protect, and maintain the large oak tree on 614 Monterey, along with the tree on the corner of Monterey and Nipomo. h. If the SLO REP is not in material compliance with the Lease or ceases to be financially solvent and to maintain the Property in a commercially reasonable manner, the lease shall contain provisions for the City to declare a default of the Lease, for SLO REP to effect a reasonable cure of the default(s), and for the City to terminate the Lease if the default(s) are not cured pursuant to the terms and conditions of the Lease, and for the Remainder Property to revert to the City.
i. Prevailing wages shall be paid by SLO REP for construction of the Theatre and related improvements, mitigations etc.
j. SLO REP shall pay all applicable parking in lieu fees for a Community Partner, as determined by the sole discretion of the City’s Public Works Director. k. Payment of possessory interest and other taxes by SLO REP. l. Other long-term landlord protection ground lease provisions, such as City standard insurance requirements, indemnity provisions, attorneys’ fees, prohibitions against nuisance, waste, requiring maintenance at SLO REP expense, etc. m. If the City Council does not move ahead with the construction of the Palm/Nipomo structure, a new agreement will need to be negotiated between the parties for a mutually acceptable alternate site or an alternate set of requirements for a portion of the Property. n. The City will not subordinate its interest in the Remainder Property to any financing.

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10. AMENDMENT. This Agreement may be extended or modified with the mutual consent of the parties. Any such extension, amendment, modification or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the City Council.

11. COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties.

No oral agreement, understanding or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding or representation be binding upon the parties.

12. NOTICE. All notices to the parties shall be in writing and shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows:

City: Derek Johnson
City Manager
990 Palm Street
San Luis Obispo, CA 93401
SLO REP: Kevin Harris
Managing Artistic Director
888 Morro Street
San Luis Obispo, CA 93401

13. AUTHORITY TO EXECUTE AGREEMENT. Both City and SLO REP warrant and represent that each individual executing the Agreement on behalf of each party is a person duly authorized and empowered to execute agreements for such party.

IN WITNESS WHEREOF, the parties execute this Agreement on the day and year first above written.

ATTEST CITY OF SAN LUIS OBISPO
Teresa Purrington
City Clerk
Date Heidi Harmon
Mayor
Date
APPROVED AS TO FORM: SLO REPERTORY THEATRE
J. Christine Dietrick
City Attorney
Date Kevin Harris
Managing Artistic Director
Date
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Council Minutes
City Hall, 990 Palm Street, San Luis Obispo
Tuesday, December 4, 2018
Regular Meeting of the City Council

CALL TO ORDER
A Regular Meeting of the San Luis Obispo City Council was called to order on Tuesday, December 4, 2018 at 6: 00 p.m. in the Council Hearing Room, located at 990 Palm Street, San Luis Obispo, California, by Mayor Harmon.

ROLL CALL
Council Members

Present: Council Members Carlyn Christianson Aaron Gomez, Erica A Stewart, Vice Mayor Andy Pease, and Mayor Heidi Harmon.

Council Members

Absent: None
City Staff

Present: Derek Johnson, City Manager; Christine Dietrick, City Attorney; and Teresa Purrington, City Clerk; were present at Roll Call. Other staff members presented reports or responded to questions as indicated in the minutes.

PLEDGE OF ALLEGIANCE
Vice Chair Pease led the Pledge of Allegiance.

APPOINTMENTS

1. APPOINTMENTS TO THE ZONE 9 ADVISORY COMMITTEE
City Clerk Purrington presented the contents of the report.

Public Comments:

None
End of Public Comments ---
ACTION: MOTION BY VICE CHAIR PEASE, SECOND BY COUNCIL MEMBER CHRISTIANSON, CARRIED 5- 0 to:

San Luis Obispo Page I
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San Luis Obispo City Council Minutes of December 4, 20] 8 Page 2 Make appointments to the Zone 9 Advisory Committee, effective December 31, 2018, and recommend the County Board of Supervisors confirm, as follows:

1. Appoint Christine Mulholland to serve as public member to represent the City of San Luis Obispo on the Zone 9 Advisory Committee for a term to expire on December 31, 2022; and

2. Appoint Dave Romero to serve as the alternate member to represent the City of San Luis Obispo on the Zone 9 Advisory Committee for a term to expire on December 31, 2022; and

3. Appoint Matt Horn, City Engineer, to serve as the staff representative on the Zone 9 Advisory Committee; and

4. Appoint Brian Nelson, Supervising Civil Engineer, to serve as the alternate staff representative on the Zone 9 Advisory Committee for a term to expire on December 31, 2022.

2. APPOINTMENTS TO THE CITIZENS' REVENUE ENHANCEMENT OVERSIGHT COMMISSION, JACK HOUSE COMMITTEE, AND MASS_ TRANSPORTATION

COMMITTEE
City Clerk Purrington presented the contents of the report.

Public Comments:

Tom Tyran Kincaid
End ofPublic Comments ---
ACTION: MOTION BY COUNCIL MEMBER CHRISTIANSON, SECOND BY COUNCIL MEMBER GOMEZ, CARRIED 5- 0 to:

1. Confirm the appointment of Winston Newland to the Citizens' Revenue Enhancement Oversight Commission, to complete an unexpired term through June 30, 2019.

2. Confirm the appointment of Julie Moore, as the representative of the San Luis Obispo County History Center, to the Jack House Committee effective December 4, 2018; and

3. Confirm the appointment of Ryan Hund, as the ASI student representative, to the Mass Transportation Committee, to complete an unexpired term through March 31, 2019.

INTRODUCTION

3. INTRODUCTION OF ERIC HAGEN CHIEF BUILDING OFFICIAL
Community Development Director Michael Codron introduced Eric Hagen as the new Chief Building Official.

PRESENTATIONS

4. PROCLAMATION - RECOGNITION OF SERVICE - CARRIE MATTINGLY City Manager Derek Johnson presented a proclamation to retiring Utilities Director Carrie Mattingly, in recognition of her service.

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San Luis Obispo City Council Minutes of December 4- 2018 Pabe 3

PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA
None
End of Public Comment ---

CONSENT AGENDA
ACTION: MOTION BY COUNCIL MEMBER CHRISTIANSON, SECOND BY VICE CHAIR PEASE, CARRIED 5- 0 to approve Consent Calendar Items 5 thru 12.

Public Comment
Lea Brooks — 8
Myron Amerine — 8
Kevin Harris — 10
Myron Amerine — 12
End ofPublic Comment ---

5. WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES CARRIED 5- 0, to waive reading of all resolutions and ordinances as appropriate.

6. SCHEDULE OF CITY COUNCIL MEETINGS FOR 2019
CARRIED 5- 0, to adopt the proposed 2019 regular City Council meeting schedule with meetings normally held the first and third Tuesday of every month, with the following exceptions:

1. Reschedule the Regular City Council meeting of January 1 to January 8, 2019, and

2. Cancel the Regular City Council meetings ofAugust 6 and December 17, 2019.

7. APPROVAL OF THE FINAL MAP FOR TRACT 3089 PHASE 1, AVILA RANCH, 175 VENTURE DRIVE (SBDV2042- 2015)
CARRIED 5- 0, to adopt a Resolution entitled, " A Resolution of the City Council of the City of San Luis Obispo, California, approving the final map for Tract 3089 Phase 1 Avila Ranch ( 175 Venture Drive, SBDV-2042-2015)," and authorizing the Mayor to execute the easements, agreements, and associated fee offers, including the recommended changes in the staffagenda correspondence.

8. PLANS AND SPECIFICATIONS FOR BUCHON TRAFFIC CALMING
CARRIED 5- 0, to

1. Approve Plans and Specifications for Buchon Traffic Calming Measures; and

2. Authorize staff to advertise for bids and the City Manager to award the contract if the lowest responsible bid is within the Engineer' s Estimate of $160,000; and

3. Authorize the use and transfer of $ 142,000 from the City' s Neighborhood Traffic Calming budget and $ 18, 000 from the City' s Traffic Safety & Operations Budget to the project account.

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San Luis Obispo City Council Minutes ofDeceniber 4. 2018 Page 4

9. ADJUSTMENTS TO SUPPLEMENTAL SALARY SCHEDULE AND POLICY AS A

RESULT OF MINIMUM WAGE INCREASES
CARRIED 5- 0, to

1. Adopt a Resolution entitled, " A Resolution of the City Council of the City of San Luis Obispo, California, establishing and adopting a supplemental employee salary schedule and superseding previous resolutions in conflict," as necessary to comply with California Fair Wage Act of 2016 requiring a minimum wage of $ 12. 00 per hour effective January 1, 2019; and

2. Adopt the revised Supplemental Employee Policy.

10. SAN LUIS OBISPO REPERTORY THEATRE EXCLUSIVE NEGOTIATING

AGREEMENT
CARRIED 5- 0, to
Authorize the Mayor to sign an Exclusive Negotiating Agreement with the San Luis Obispo Repertory Theatre, SLO REP, for long-term use of a portion of the Palm/ Nipomo Parking Structure site to construct and operate a new theatre, based on parameters previously set forth by the City Council.

11. REPEALING AND REPLACING RESOLUTION NO. 10894 TO REFLECT

UPDATED ZONING REGULATION SECTION FOR PROPERTY MAINTENANCE

STANDARDS
CARRIED 5- 0, to Adopt a Resolution entitled, " A Resolution of the City Council of the City of San Luis Obispo, California, repealing and replacing Resolution No. 10894 ( 2018) to reflect updated zoning regulation sections."

12. ACQUISITION OF EASEMENTS FOR THE RAMONA DRIVE TO FOOTHILL BOULEVARD CLASS 1 PATH
CARRIED 5- 0, to Authorize the Mayor to execute easement and deed agreements in a total amount not to exceed $ 423, 700 including title and escrow charges in a form subject to the approval of the City Attorney.

PUBLIC HEARING ITEMS AND BUSINESS ITEMS

13. WATER RESOURCE RECOVERY FACILITY PROJECT - AUTHORIZATION TO BID
Utilities Director Carrie Mattingly and Deputy Director Dave Hix provided an in-depth staff report and responded to Council questions.

Public Comments:

Autumn Brown
Rosemary Wrenn
Scott Zimmerman
Daniel Mora
Richard Van Humbeck
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San Luis Obispo City Council_ Minutes of December 4, 2018 Pie 5, Jesse Brooks
Quinn Brady
Tony Skinner
Sean Perry
Dave Baldwin
David Gilliland
Nick Andre
End of Public Comment ---
ACTION: MOTION BY MAYOR HARMON SECOND BY COUNCIL MEMBER CHRISTIANSON, CARRIED 5- 0 to:

1. Approve plans and specifications for the Water Resource Recovery Facility ( WRRF) Project, Specification No. 91620; and

2. Authorize staff to advertise for construction bids pending City Engineer' s approval of the bid set; and

3. Authorize the City Manager to award the contract if the lowest responsible bid is within the project construction budget of $111, 600,000; and

4. Approve amended WRRF Project -specific Construction Contract Change Order policy and authorize the Utilities Director to be responsible for construction contract change orders ( CCOs) for the WRRF Project in any amount with the limitation that the sum total of all CCOs not exceed the contingency budget amount of $13, 390,000; and

5. Incorporate the Community Workforce Agreement into WRRF Project Spec. No 91620 as approved by signatory Craft Councils and Unions affiliates and the Tri -Counties Building and Construction Trades Council, AFL- CIO as included in the Council agenda packetfor the November 13, 2018 Meeting.

STUDY SESSION ITEMS

14. BOB JONES TRAIL ( CALLE JOAQUIN TO OCEANAIRE) PREI+ERREI)

ALTERNATIVE SELECTION
Public Works Director Daryl Grigsby, Transportation Manager Jake Hudson and Active Transportation Manager Adam Fukushima provided an in-depth staff report and responded to Council questions.

Public Comments:

Myron Amerine
Lea Brooks
Ken Kienow
End of Public Comment ---
ACTION: By consensus, Council directed staff to evaluate other route alternatives which are not consistent with the Bicycle Transportation Plan as part of the planning of the forthcoming Active Transportation Plan.

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San Luis Obis o City Council Minutes of December 4 2018 Parc 6 RECESS
Council recessed at 8: 35 p.m. and reconvened at 8: 50 p.m., with all Council Members present.

PUBLIC HEARING ITEMS AND BUSINESS ITEMS

15. 2019- 21 FINANCIAL PLAN PROCESS: ECONOMIC OUTLOOK BUDGET

POLICIES AND CAPITAL IMPROVEMENT PLAN REVIEW
Finance Director Brigitte Elke and Budget Manager Alex Ferreira provided an in-depth staff report and responded to Council questions.

Public Comments:

None
End of Public Comment ---
ACTION: By consensus, the Council reviewed and approved the 2019- 21 Financial Plan Goal Setting Process.

COUNCIL COMMUNICATIONS AND LIAISON REPORTS
Vice Mayor Pease invited the public to the Police Department Community Meeting and Station tour on Thursday, December 6, 2018 and also indicated that the City Council would be participating in the annual holiday parade on Friday, December 7, 2018.

ADJOURNMENT
The meeting was adjourned at 10: 02 p.m. The next Rescheduled Regular City Council Meeting is scheduled for Tuesday, January 8, 2019 at 6: 00 p.m., in the Council Chamber, 990 Palm Street, San Luis Obispo, California.
l
Teresa Purrington
City Clerk
APPROVED BY COUNCIL: 01/ 08/ 2019
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Item 7a
Department: Administration
Cost Center: 1005
For Agenda of: 5/21/2024
Placement: Business
Estimated Time: 30 Minutes
FROM: Greg Hermann, Deputy City Manager
Prepared By: Chris Read, Sustainability Manager
SUBJECT: LEAD BY EXAMPLE – 2024 PROGRESS REPORT

RECOMMENDATION
Receive, file, and provide feedback on the Lead by Example 2024 Progress Report.

POLICY CONTEXT
 Conservation and Open Space Element of the General Plan:
o Policy 2.2.1 (Atmospheric Change) - City actions shall seek to minimize undesirable climate changes and deterioration of the atmosphere’s protective functions that result from the release of carbon dioxide and other substances.
o Policy 2.2.5 (Model City) – the City will be a model of pollution control efforts.

It will manage its own operations to be as pollution free as possible. The City will work with other agencies and organizations to help educate citizens in ways to prevent air pollution
 Land Use Element of the General Plan:
o Policy 9.4 (Climate Action Plan) - The City shall maintain and implement its Climate Action Plan to reduce community and municipal GHG emissions consistent with State laws and objectives.
 2023-25 Financial Plan Climate Action Major City Goal o Action 4.5.e - Initiate an update to the Lead by Example plan to inform the 2025-27 Financial Plan as called for CAP Lead by Example task 1.1.A and Lead by Example Plan Administrative Action 1
o Action 4.5.f - Conduct GHG Emissions Inventory and Biennial CAP and Lead by Example Progress Reports as called for in CAP Administrative Action 2 and Lead by Example Plan Administrative Action 2.  Resolution 11159 (2020 Series) adopted the Climate Action Plan for Community Recovery with the goal of community carbon neutrality by 2035 and a sub-goal of carbon neutral municipal operations by 2030.

Item 7a
 Resolution 11263 (2021 Series) adopted the Lead by Example Plan with a goal of carbon neutral municipal operations by 2030 and Administrative Action 2, which directs action to, “monitor and report implementation to City Council on a regular basis.”
 Resolution No. 11381 (2022 Series) reaffirmed the City’s climate action goals and created a work program for fiscal years 2023-27, including Leadership 1.1.A, which directs staff to, “Implement the 2023-25 actions in the Lead by Example municipal carbon neutrality plan and complete a focused plan update for 2025-30.”

DISCUSSION
Background
The City has a long history of managing its operations to reduce the environmental impact and costs associated with City energy use, fleet fuel consumption, solid waste generation, and employee commute. Since adoption of the 2006 Conservation and Open Space Element General Plan, the City has been working to be a “Model City” and to “manage its own operations to be as pollution free as possible.”
In 2020, City Council adopted the goal of communitywide carbon neutrality by 2035 and as part of that goal, Council also adopted a goal of carbon neutral municipal operations by 2030. In 2021, Council adopted Lead by Example: A Plan for Carbon Neutral Municipal Operations (referred to as “Lead by Example” or “Plan”), which identifies goals, objectives, and actions for achieving the City’s municipal operations climate goal. The Lead by Example 2024 Progress Report (Attachment A) provides a snapshot of the City’s municipal operations climate action and sustainability work completed since the plan’s July 2021 adoption. This Report is intended to act as a “check-in” in advance of the first Lead by Example plan update, scheduled for late 2024.

The Lead by Example Plan addresses greenhouse gas emissions from four sectors (building and facility energy, fleet, employee commute, and solid waste) and includes the sequestration benefits from a fifth sector (natural solutions). The Plan also includes information about sectors whose emissions were not quantified (procurement, budgeting, and finance, as well as wastewater). The Lead by Example Plan focuses its carbon neutrality goal on General Fund, Parking Fund, and Transit Fund activities. It is important to note that the Lead by Example Plan’s carbon neutrality goal does not include assets managed by Utilities Enterprise funds (water and wastewater).1 Key Findings
Based on the work completed for the 2024 Progress Report, staff have identified three key takeaways:

1 At the time of Lead by Example’s drafting, staff were not able to inventory direct or indirect emissions from these sources.

Item 7a

1. The City is on the right path to achieving its goals. Through initial implementation of the Lead by Example Plan, staff have learned many lessons and have confirmed the efficacy of the plan’s approach. The general approach of efficiency, conservation, and transitioning equipment from fossil fuel energy to electric energy is working and continues to be the way forward. As staff transitions to updating the plan, the recommended focus is on refining and optimizing the approach to achieving existing objectives rather than developing entirely new ideas.

2. Ambitious goals provided access to resources that have allowed for rapid progress. Council’s ambitious goals have made the City highly competitive in grant programs. The City has received approximately $15.4 million in outside funding to implement Lead by Example actions since 2019. This funding has made initial progress possible and has kept the City on track to achieving its goals.

3. Increasingly complicated work ahead requires sustained commitment. Carbon neutral municipal operations by 2030 is an achievable, but highly ambitious goal that requires policy and financial decisions to be aligned and oriented towards the goal. The next phase of work involves more complicated projects; future success depends on maintaining City focus and funding for these more challenging projects.

Sector Progress
In addition to the key findings mentioned above, the 2024 Progress Report includes an update on key progress indicators, a summary of implementation trends by plan sector, and a detailed review of every action’s implementation status as of April 2024. Summary findings from the four emissions generating sectors are listed below:
 Building Facility and Energy Use - Consumption of electricity and natural gas at City buildings and facilities is the largest source of City Greenhouse Gas emissions, accounting for approximately 43% of inventoried emissions. Between 2019 and 2022 the City’s saw a 3.2% decrease in electricity use and a 27.8% decrease in in gas use. A short list of example projects includes decommissioning the natural gas co-generation facility at the SLO Swim Center, installing LED lighting at City Hall, Fire Station 1, and all three parking garages, and replacing seven natural gas water heaters with high efficiency heat pump hot water heaters.  Fleet - Consumption of gasoline and diesel in the City’s vehicle fleet is the second largest source of City greenhouse gas emissions, accounting for approximately 42% of inventoried emissions. Between 2019 and 2022, fleet gas use decreased by 11.8% and diesel use decreased by 26.5%. Through implementation of Lead by Example, the City currently has 15 electric vehicles, 9 plug-in hybrid vehicles, and 12 regular hybrid vehicles, with additional electric and hybrid vehicles proposed as part of the 2024-25 Supplemental Budget. The City has also installed 11 level 2 charging ports for fleet use at the Corp Yard (6), City Hall (2), and the Marsh Street Parking Garage (3). Although current buildout of chargers is behind schedule due to staff turnover, numerous projects are in the works and more chargers are on the way.

Item 7a
 Commute - City employees commuting to and from work generate the third largest source of inventoried emissions (15% of total). Between 2019 and 2022, staff estimate that employee vehicle miles traveled rose substantially (65.4%). This is primarily due to a growing work force with employees commuting from towns such as Atascadero, Arroyo Grande, Los Osos, and Paso Robles. The impacts from this increase are partially mitigated by an increase in efficient and electric commute vehicles. Key commute programs include promotion of irideshare.org, increasing the amount of secure bike parking available to staff, and continuing to offer the TRIP program with incentives for sustainable employee commutes.  Solid Waste - Solid waste from municipal operations is the fourth largest source of inventoried emissions. Between 2019 and 2022, it is estimated that landfilled waste from municipal operations increased slightly (2.5%) as the result of increasing staff levels. As waste reduction initiatives are implemented, the volume of landfilled waste is expected to decrease from increased recycling diversion rates. Notable completed tasks include the rolling out of organic waste bins at City facilities, providing waste reduction outreach and training to City employees, and adopting a waste reducing purchasing policy. Staff have also made progress transitioning to a paper-free workplace, including switches to digital plan sets and permit applications in the Community Development Department.

Next Steps
The 2024 Progress Report represents the first steps in the Lead by Example plan update process. The Green Team will convene in the Summer to identify 2025-2030 work tasks required to keep the City on track to achieve its 2030 goals and will bring a plan update to Council for review and approval in late 2024 or early 2025.2 Previous Council or Advisory Body Action
 August 2020 – Council adopted Resolution 11159 (2020 Series), which approved the Climate Action Plan for Community Recovery with the goal of community carbon neutrality by 2035 and a sub-goal of carbon neutral municipal operations by 2030.
 July 2021 – Council adopted Resolution 11263 (2021 Series), which approved the Lead by Example Plan with a goal of carbon neutral municipal operations by 2030 and Administrative Action 2, which directs staff to, “monitor and report implementation to City Council on a regular basis.”
 December 2022 – Council adopted Resolution No. 11381 (2022 Series), which reaffirmed the City’s climate action goals and created a work program for fiscal years 2023-27, including Leadership 1.1.A, which directs staff to, “Implement the 2023-25 actions in the Lead by Example municipal carbon neutrality plan and complete a focused plan update for 2025-30.”

2 The Green Team is a cross-departmental collaborative body of staff convened to help guide the City’s approach to achieving carbon neutral municipal operations. The Green Team allows staff from each department to participate in the planning and implementation of emissions reduction measures to achieve an “all-City” approach to municipal carbon neutrality.

Item 7a
 June 2023 – Council adopted the 2023-25 Financial Plan Climate Action Major City Goal 4.1.i, which directs staff to initiate an update to the Lead by Example plan to inform the 2025‐27 Financial Plan as called for by CAP Lead by Example task

1.1.A and Lead by Example Plan Administrative Action 1.

Public Engagement
Since January of 2024, the City has been conducting an outreach program explaining the Lead by Example Work and its relationship to the “Sustainable SLO” graphic mark that was recently added to fleet vehicles, buses, waste and recycling bins, and hydration stations, among other things. Internal engagement has primarily occurred via Green Team working groups. The community is encouraged to provide feedback as part of the City Council meeting.

CONCURRENCE
The Progress Report was co-developed by the Green Team, which includes staff from every department in the City. The Green Team provided final review of the Progress Report.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378

FISCAL IMPACT
Budgeted: No Budget Year: 2023-24
Funding Identified: No
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund
State
Federal
Fees
Other:

Total N/A N/A N/A N/A
Development of the 2024 Progress Report itself has no fiscal impact and was completed with budgeted staff time. Similarly, the Lead by Example Plan will also be completed internally and will not require additional budget. Ongoing implementation of Lead by Example will require substantial sustained funding from the City and dedication of existing staff resources. The Lead by Example plan update will include updated project cost estimates.

Item 7a

ALTERNATIVES
Council could provide additional strategic direction to staff regarding Lead by Example implementation and the forthcoming plan update.

ATTACHMENTS
A - Lead by Example 2024 Progress Report

PAGE i

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE
2024 PROGRESS REPORT MAY 2024

ACKNOWLEDGMENTS
City Council
Erica A. Stewart, Mayor
Andy Pease, Vice Mayor
Emily Francis, Council Member
Michelle Shoresman, Council Member
Jan Marx, Council Member
City Management
Whitney McDonald, Interim City Manager
Derek Johnson, City Manager (former)
Greg Hermann, Deputy City Manager
City Staff Contributors
Alex Fuchs, Mobility Services Business Manager;
Amy Fletcher, Human Resources Analyst;
Anthony Whipple, Urban Forester;
Bob Hill, Sustainability & Natural Resources Official;
Brian Nelson, Deputy Director of Public Works/City
Engineer;
Chris Lehman, Utilities Deputy Director – Wastewater
Chris Read, Sustainability Manager;
Dan Clancy, Financial Analyst;
Greg Cruce, Deputy Director – Maintenance
Operations;
Jacqui Clark-Charlesworth, Tourism & Community
Promotions Manager;
Joey Tran, Climate Fellow;
Josh Erquiaga, Information Technology Manager;
Kylie Preciado, Climate Fellow;
Lucia Pohlman, Sustainability & Natural Resources
Analyst;
Luke Schwartz, Transportation Manager;
Meg Buckingham, Solid Waste & Recycling Program
Manager;
Michael Loew, Deputy Building Official;
Natalie Harnett, Policy & Project Manager;
Patrick McGrath, WRRF Supervisor;
Rachelle Paris, Solid Waste & Recycling Coordinator;
Tina Clark, Solid Waste & Recycling Coordinator;
and many others.

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE
2024 PROGRESS REPORT MAY 2024

1. INTRODUCTION ................................................................................................................... 1 Background ............................................................................................................................ 1 Key Takeaways ...................................................................................................................... 1 Lead by Example Plan and Progress Report Development Process....................................... 2 Green Team ........................................................................................................................... 2 Implementation Resources..................................................................................................... 2 Looking Ahead to a Carbon Neutral 2030............................................................................... 3

2. KEY PERFORMANCE INDICATORS.................................................................................... 5 Building and Facility Energy ................................................................................................... 5 Fleet ....................................................................................................................................... 5 Employee Commute............................................................................................................... 6 Solid Waste ............................................................................................................................ 6

3. IMPLEMENTATION HIGHLIGHTS........................................................................................ 7 Sustainable SLO .................................................................................................................... 7 Building and Facility Energy ................................................................................................... 8 Fleet Vehicles......................................................................................................................... 9 Employee Commute .............................................................................................................10 Solid Waste ...........................................................................................................................11 Wastewater ...........................................................................................................................12 Natural Solutions ...................................................................................................................12 Procurement, Budget, and Finance .......................................................................................13 APPENDIX A. LEAD BY EXAMPLE PLAN IMPLEMENTATION PROGRESS................ - 14 -

MAY 2021

PAGE 1

1. INTRODUCTION
Background
The City has a long history of managing its operations to minimize the environmental impact and costs associated with City energy use, fleet fuel consumption, solid waste generation, and employee commute. Since adoption of the 2006 Conservation and Open Space Element of the General Plan, the City has had Council policy direction to be a “Model City” and to “manage its own operations to be as pollution free as possible.”
In 2020, City Council adopted a goal of communitywide carbon neutrality by 2035 and as part of that goal, Council also adopted a goal of carbon neutral municipal operations by 2030. In 2021, Council adopted Lead by Example: A Plan for Carbon Neutral Municipal Operations (referred to in this document as “Lead by Example” or “Plan”), which identifies goals, objectives, and actions for achieving the City’s municipal operations climate goal.

This Lead by Example 2024 Progress Report (Report) provides a snapshot of the City’s climate action and sustainability work completed since the July 2021 adoption of Lead by Example. The Report includes an update on key progress indicators (Chapter 2), a summary of implementation trends by plan sector (Chapter 3), and a detailed review of every action’s implementation status as of April 2024 (Appendix A). This Report is intended to act as a “check-in” in advance of the first Lead by Example plan update, scheduled for late 2024.

Key Takeaways
Based on the work completed for the Report, staff have identified three key takeaways:

1. The City is on the right path to achieving its goals. Through initial implementation of the Lead by Example Plan, staff have learned many lessons and have confirmed the efficacy of the plan’s approach. The general approach of efficiency, conservation, and transitioning equipment from fossil fuel energy to electric energy is working and continues to be the way forward. As staff transitions to updating the plan, the recommended focus is on refining and optimizing the approach to achieving existing objectives rather than developing entirely new ideas.

2. Ambitious goals provided access to resources that have allowed for rapid progress.

Council’s ambitious goals have made the City highly competitive in grant programs. The City has obtained approximately $15.4 million in outside funding to implement Lead by Example actions since 2019. This funding has made initial progress possible and has kept the City on track to achieving its goals.

3. Increasingly complicated work ahead requires sustained commitment. Carbon neutral municipal operations by 2030 is an achievable but highly ambitious goal that requires policy and financial decisions to be aligned and oriented towards the goal. The next phase of work involves more complicated projects; future success depends on maintaining City focus and funding for these more challenging projects.

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Lead by Example Plan and Progress Report Development Process The Lead by Example Plan addresses
greenhouse gas emissions from four
sectors (building and facility energy, fleet,
employee commute, and solid waste) and
includes the sequestration benefits from a
fifth sector (natural solutions). The Plan
also includes sectors whose emissions
were not quantified (procurement,
budgeting, and finance, as well as
wastewater). The Lead by Example Plan
focuses its carbon neutrality goal on
General Fund, Parking Fund, and Transit
Fund activities. Figure 1 provides the
sectors and associated goals.

The planning and implementation of Lead
by Example occurs over four repeating
steps including evaluating existing
conditions via a greenhouse gas
emissions inventory, identifying key
actions to eliminate greenhouse gas
emissions, implementing those actions,
and monitoring progress via this progress
report. This cycle is intended to be
completed every four years until the agency achieves its goal of carbon neutral municipal operations.

Green Team
Given the City’s long commitment to operational efficiency, it was important that the Lead by Example Plan and this Progress Report be developed and completed with the support of a group of staff members known as the “Green Team”. The Green Team is a cross-departmental collaborative body of staff convened to help guide the City’s approach to achieving carbon neutral municipal operations. The Green Team allows staff from each department to participate in the planning and implementation of emissions reduction measures to achieve an “all-City” approach to municipal carbon neutrality.

Implementation Resources
The City has long invested in energy efficiency and conservation. Since 2019, climate action has been a Major City Goal with City funds directed towards achieving the more ambitious contemporary goals. A central tenet of the 2020 Climate Action Plan is that leadership brings resources and since 2019 the City has also brought in substantial funding from outside resources Figure 1. Emission Sectors and 2030 Goals

PAGE 3
totaling approximately $15.4 million.
1 Table 1 provides a list of grants, fundings programs, and incentives received to date, with the totals expected to grow substantially as the City begins to access Inflation Reduction Act tax rebates and additional grant programs come online.

Table 1. External Funding for Lead by Example Implementation Project Sector Resources Amount
LED Lighting Retrofits
Building & Facility
Energy PG&E On-Bill Financing $576,857
Heat Pump Hot Water
Heater Installation
Building & Facility
Energy
PG&E Government and
K12 Program $60,681
Battery Energy Storage
System at WTP
Building & Facility
Energy
Self-Generating Incentive
Program $3,202,536
City Building
Electrification
Roadmap
Building and
Facility Energy 3CE Rebate $70,000
Electric Fleet Vehicles Fleet 3CE Rebate $68,000
Electric Vehicle
Charger Installation Fleet 3CE Rebate $24,048
Electric Fleet Transition
Roadmap Fleet 3CE Rebate $119,985
Electric Buses Fleet Federal Grants $8,893,350
Electric Buses Fleet State Grants $533,000
Electric Bus Charger
Installation Fleet Federal Grants $898,093
Electric Bus Charger
Installation Fleet State Grants $729,000
Open Space Climate
Restoration Natural Solutions
Wildlife Conservation
Board Program $251,996
Open Space Climate
Restoration Natural Solutions
US Fish and Wildlife
Services $25,000
Total $15,452,546
Looking Ahead to a Carbon Neutral 2030
To achieve one of the most ambitious climate neutrality goals in the nation, the City will need to continue serving as a leader and innovator though the end of the decade. While challenging, the years ahead offer opportunity to provide excellent community services while operating a clean, fiscally responsible, and carbon-free organization.

Over the last three years, staff have learned a tremendous amount while implementing key projects. When Council adopted the Lead by Example Plan in 2021, much was still unknown about the viability or cost effectiveness of certain technologies that would be required to achieve municipal carbon neutrality. As described in Appendix A, some actions ended up being infeasible and some have ended up taking longer than expected, however the City is still making rapid

1 The City has a much longer record of receiving grant funds to increase its operational efficiency; 2019 is selected as the cutoff date here to reflect the year greenhouse gas emissions were inventoried in the Lead by Example Plan.

PAGE 4
progress on its Lead by Example work. Where actions were infeasible, staff will continue to identify alternative ways to support progress.

The next step will be to update the Lead by Example plan. Staff will make adjustments to the actions in the current pan to reflect all of the learning described in this report and return to Council in late 2024 or early 2025 to confirm that path for the next four years of action. This plan update will inform the 2025-27 and 2027-29 Financial Plans, the last two complete financial plans before the 2030 goal. To make progress on the next phase of projects, the City must continue to leverage external funds while also allocating the necessary internal staff and financial resources to implement Lead by Example projects.

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2. KEY PERFORMANCE

INDICATORS
A greenhouse gas (GHG) inventory is an accounting of the GHG emissions that have occurred as the result of activity in a calendar year. The greenhouse gas emissions inventory and related emissions forecasts provide the foundational technical analysis for staff to understand baseline conditions and monitor progress over time.

For the 2021 Lead by Example Plan, the City updated its 2005 municipal operations baseline inventory, completed a 2019 municipal operations inventory, and forecasted emissions for 2025 and 2030.

The City is drafting a 2022 inventory for the Lead by Example plan update. For this report, the City conducted a 2022 activity data “check-in”.2 Table 1 provides activity data for each inventoried sector and includes the 2022 update. Note that Wastewater and Procurement sectors do not have emissions estimates associated with them and are included in this Report for reference only. A more robust inventory including greenhouse gas emission and updated 2025 and 2030 projections will be provided as part of the Lead by Example plan update. Key performance indicator updates by sector are provided below.

Building and Facility Energy
The Building & Facility Energy sector focuses on emissions from energy (electricity and natural gas) used to power buildings, facilities, and equipment owned and operated by the City. Between 2019 and 2022, electricity use decreased by 3.2% and natural gas use decreased by 27%. The electricity reduction represents the continuation of a long-term reduction trend enabled by energy efficiency projects, but is expected to begin growing starting in the 2023 inventory as the result of transitioning more building systems and fleet vehicles to electricity. The primary driver of the natural gas reduction was the 2019 decommissioning of an electricity cogeneration system at the SLO Swim Center. Despite these reductions in use, emissions from this sector likely increased between 2019 and 2022. This blip was expected and is due to Central Coast Community Energy’s transition from renewable energy credits to direct investments in renewable energy projects. As those projects come online, the emissions intensity of Central Coast Community Energy’s electricity will drop rapidly and result in large emissions reductions in this sector.

Fleet
The Fleet sector focuses on emissions from fossil fuel use (gasoline and diesel) used in fleet vehicles owned and operated by the City, including light duty vehicles, maintenance vehicles, buses, fire trucks, and police vehicles. Between 2019 and 2022, gas use decreased by 11.8% and diesel use decreased by 26.5%, and total emissions in this sector have likey decreased.

The reduction in fuel consumption is the result of an increasingly efficient fleet and from a

2 2022 is the most recent year for which all necessary data is available.

PAGE 6
reduced transit schedule. These downward trends in fuel consumption are expected to continue as the City electrifies its gasoline and diesel fleet vehicles.

Employee Commute
The Employee Commute sector estimates emissions from vehicle miles traveled (VMT) by employees traveling to and from work. Between 2019 and 2022, employee commute vehicle miles travelled (VMT) is estimated to have increased by over 65%. The increase is largely a function of increased staffing levels, and the impact may be mitigated by the overall increase in vehicle efficiency and private uptake of electric vehicles.

Solid Waste
The Solid Waste sector focuses on emissions from landfilled solid waste and implementing initiatives to increase recycling and landfill diversion. In the 2021 Lead by Example Plan, emissions from solid waste were modeled using a standard factor that estimated the amount of waste generated per employee. In this Report, landfilled tons are calculated by converting the 2019 and 2022 trash service level volume from City facilities into tons by using the Municipal Solid Waste weight conversion factor provided by the U.S. Environmental Protection Agency. In 2023, a consultant was hired to perform a detailed waste characterization and generation study to determine waste disposal tonnage resulting from municipal operations. The updated inventory figures using this data will be substantially more accurate and are expected to be ready for inclusion in the Lead by Example Plan update.

Table 1. Municipal Operations Activity Data, 2005-2022
Sector Activity Data 2005 2019 2022 % Change
2019-22
Building &
Facility
Energy
Electricity (kWh) 12,615,161 9,775,193 9,461,617 -3.2%
Natural Gas (Therm) 133,607 154,125 111,297 -27.8%
Fleet
Gasoline (Gallons) 83,440 75,570 66,660 -11.8%
Diesel (Gallons) 149,040 141,590 104,020 -26.5%
Employee
Commute
Vehicle Miles
Travelled (VMT) 1,920,620 1,947,180 3,220,555 65.4%
Solid
Waste
Landfilled Waste
(Tons) 156 161 165 2.5%

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE
2024 PROGRESS REPORT MAY 2024
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3. IMPLEMENTATION

HIGHLIGHTS
The City has been busy implementing the Lead by Example Plan since it was adopted in July 2021. This section highlights some of the key successes and challenges experienced in each of the plan’s sectors. It also provides an overview of the Sustainable SLO initiative. Appendix A provides a comprehensive description of progress for every action in the Lead by Example plan.

Sustainable SLO
In the spirit of leading by example and telling the story of progress to date, the City added a new “Sustainable SLO” mark and illustrated graphic to a variety of public facilities and equipment. City assets with the Sustainable SLO mark includes electric and hybrid fleet vehicles, Big Belly trash and recycling receptacles, trailhead kiosks, public electric vehicle chargers, electric buses, active transportation greenway signs, and water fountains and bottle filling stations. In tandem with physical branding on City assets, the City ran a community education series in the winter and spring of 2024 that culminated in an Earth Month Event Series in April 2024. The mark and illustrated graphic are integrated into the City’s brand standards and will be included on all Lead by Example assets moving forward.

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE
2024 PROGRESS REPORT MAY 2024
PAGE 8
Building and Facility Energy
The foundation of Lead by Example is that the electricity grid will continue to get cleaner over time, and through efficiency and transitioning from fossil fuel appliances to electric appliances, the City will reduce and eventually eliminate emissions.

Consumption of electricity and natural gas at City
buildings and facilities is the largest source of City
greenhouse gas emissions, accounting for
approximately 43% of inventoried emissions. Between
2019 and 2022 the City’s saw a 3.2% decrease in
electricity use and a 28% decrease in natural gas use.

The City has a long history of completing energy
efficiency projects as part of routine maintenance. In addition to buying more efficient equipment and opportunistically changing out incandescent lighting with LED, the City
completed substantial lighting retrofit projects in 2021, changing out old lighting with LEDs at City Hall, Fire Station 1, and all three parking garages.

In 2022, the City completed a comprehensive plan to transition its buildings and facilities away from fossil fuels. The Carbon neutral City Facilities Plan identifies several large projects, including electrification of part of the City Swim Center and City Hall and numerous smaller projects to complete as
opportunities arise.

In 2023, the City completed a no-cost project to replace seven gas water heaters with heat pump hot water heaters and is currently looking to expand to additional water heater retrofits.

Similarly, the City is working to deploy solar projects at five City sites.

Large projects are expected to be designed in 2024 and 2025 and funding for the projects will be requested as part of the 2025-27 Financial Plan. Gas use is expected to rapidly decline through 2030, especially as planned projects replacing large furnaces and boilers are implemented. Electricity use is expected to continue to increase as gas appliances are
transitioned to electric appliances. Additionally, the fleet and building sectors will become more intertwined as new electric vehicles start being charged at City facilities, increasing electrical load at those sites but eliminating gas and diesel consumption.

GOAL: Eliminate fossil fuels use in
buildings and facilities by 2030.

OBJECTIVES:

Construct only all-electric new
buildings.

Eliminate fossil fuel use to the
maximum extent possible in
existing buildings.

STATUS: On-track.

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE
2024 PROGRESS REPORT MAY 2024
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Fleet Vehicles
The increasingly clean electricity grid also serves as
the foundation for the City’s fleet decarbonization goal, which focuses on transitioning from fossil fuel to
electric vehicles. Consumption of gasoline and diesel
by the City’s vehicle fleet is the second largest source of municipal greenhouse gas emissions, accounting for
approximately 42% of inventoried emissions. Between
2019 and 2022, fleet gas use decreased by 11.8% and
diesel use decreased by 26.5%.

The City is making progress in its goal of 100% light
duty electric vehicles. As of April 2024, the City has 15 electric vehicles, 9 plug-in hybrid vehicles, and 12
regular hybrid vehicles. The City has also installed 11 level 2 charging ports at the Corp Yard (6), City Hall
(2), and the Marsh Street Parking Garage (3). The
transition to electric fleet vehicles has been both harder and easier than expected. Soaring demand for the
products has made finding and procuring vehicles
difficult. However, the cost of the vehicles has been lower than expected, with a potential 30% tax credit through the Inflation Reduction Act and direct incentives from Central Coast Community Energy.

The City, with support from Central Coast Community Energy, completed a fleet transition plan and a charging infrastructure plan and is working to build out sufficient charging infrastructure through the end of the decade. Building out fleet charging infrastructure remains challenging; however, staff have found ways to provide sufficient charging for existing electric vehicles. To meet rising demand for fleet charging, staff are planning for the installation of additional chargers at the Utilities Administration Building, the Parks and Recreation Office, and on the ground floor of the 919 Palm Street Parking Garage.

The regulatory environment has shifted since 2021. Governor’s Order N-79-20 requiring the phase out of fossil fuel public fleet vehicles was codified as regulation in the California Air Resources Board’s Advanced Clean Fleet rules
requiring electric fleet procurement by local
governments. Fortunately, because of early
leadership, the City is poised to comply with these
state regulations and are well positioned to secure
funding to do so.

The City has been behind schedule completing electric
vehicle charging infrastructure, however staff have
identified a project delivery approach to get it back on schedule and anticipates being generally on-track to
achieve the Lead by Example Fleet goals. Specific
challenges facing the Fleet sector include finding charging and vehicle solutions for Police Department cruisers, as well as the City’s medium and heavy-duty fleets.

GOAL: Eliminate fossil fuels use in
vehicle and equipment fleet by 2030.

OBJECTIVES:

Achieve 100% all-electric light duty
vehicles (excluding long-range and
certain public safety vehicles;
Achieve 50% zero emissions medium
and heavy-duty vehicles; Achieve
100% all-electric transit fleet.;
Achieve 100% all-electric equipment,
excluding certain heavy-duty
equipment, pumps, and backup
generators.

STATUS: On track.

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE
2024 PROGRESS REPORT MAY 2024
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Employee Commute
City employees commuting to and from work generate
the third largest source of inventoried emissions (15%
of total). Between 2019 and 2022, it is estimated that
employee vehicle miles traveled rose substantially
(65%). This is in large part due to a growing work force with employees commuting from regional towns such
as Atascadero, Arroyo Grande, Los Osos, and Paso
Robles. The impact from this rapid increase is partially mitigated by an increase in efficient and electric private commute vehicles.

During the 2021-2023 Financial Plan the City
implemented ongoing trip reduction programs to reduce
vehicle miles travelled from employee and staff
commutes. These efforts mostly occurred through
partnership with the San Luis Obispo Council of
Governments (SLOCOG), such as promotion of
irideshare.org. During this period the City also increased the amount of secure bike parking available to staff, continued offering the TRIP program with incentives for sustainable employee computes and emergency ride-home services, and continued to provide access to showers at the workplace. In 2022, 69 employees qualified for TRIP program incentives, a 25% increase from 2019 numbers.

Due to staffing constraints and transitions, the planned update to the TRIP Program was put on hold. Initial drafts have been prepared and are currently awaiting completion of the meet and confer process with represented bargaining groups. Once finalized, the TRIP Program will be presented to the City Council for consideration and adoption.

GOAL: Employee commute is
aligned with and substantially
exceeds General Plan Mode Split
Objectives by 2030.

OBJECTIVES:

Reduce single-occupancy commute
miles 25% by 2025 and 50% by 2030;
Of the remaining single-occupancy
commute miles, achieve 25% via
electric vehicle by 2025 and 50% via
electric vehicle by 2030.

STATUS: Behind schedule.

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE
2024 PROGRESS REPORT MAY 2024
PAGE 11
Solid Waste
Since 2021, the Solid Waste and Recycling Program in
the Utilities Department increased their staff capacity and made significant progress on municipal waste
reduction efforts.

In 2023, staff hired a consultant to perform a waste
characterization and generation study for municipal
operations to develop a benchmark diversion
percentage. The results were combined with initial data collected by a CivicSpark fellow to develop a Municipal Waste Reduction Plan (MWRP). The MWRP outlines
current waste reduction practices and includes
initiatives to increase diversion and reduce waste
categorized into short-, medium-, and long-term goals.

The short-term goals in the MWRP, slated for
completion in the current 23-25 Financial Plan, have
either been started or completed. These include the
rolling out of organic containers across indoor and
outdoor City facilities, providing waste reduction
outreach and strategies to City employees, and
adopting a Sustainable Purchasing Policy. Staff have
also made progress transitioning to a paper-free
workplace, including switches to digital plan sets and
permit applications in the Community Development
Department.

Additionally, the City has begun utilizing compost
created from regional green waste at the HZI Anerobic
Digester for beneficial use across City parks, Laguna
Lake Golf Course, community gardens, and other
landscaped areas. Compost applications have reduced
the City’s dependence on nitrogen fertilizer, improved
the health of plants, and is expected to lead to increases in soil-based carbon sequestration.

GOAL: Buildings, facilities, and
operations are zero waste as defined
by the Zero Waste International
Alliance (ZWIA).

OBJECTIVES:

Achieve 90% reduction waste
generated from municipal operations.

STATUS: On track.

Uniform 3-stream bins at the Ludwick
Community Center
Uniform 3-stream bins at the
Meadow Park Neighborhood Center

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE
2024 PROGRESS REPORT MAY 2024
PAGE 12
Wastewater
Over the 2021-2023 Financial plan, the City’s Water
Resource Recovery Facility (WRRF) was under
construction. As part of these planned upgrades, the City continued to invest in innovative sustainability equipment and processes that can reduce the facility’s energy
demand. One such example is the repurposing of on-site
tanks to produce and capture methane that will in turn
produce more than 150 kW of power to reduce energy use. Additionally, over 100 private sewer laterals were replaced in the past year, reducing the amount of water the Water Resource Recovery Facility must process.

Natural Solutions
The Natural Solutions category of the Lead by Example
plan contains actions the City can take to increase
carbon sequestration on City-owned property.

In April 2023, City Council adopted the City’s first
Community Forest Master Plan, which sets forth an
implementation plan to achieve the City’s goal of planting 10,000 new trees by 2035. In support of reaching this
goal, the City has initiated an interdepartmental "Keys for Trees" program in partnership with ECOSLO. Through
Keys for Trees the Tourism Business Improvement
District (TBID) allocates 1% of their assessment of all hotel revenue in the city towards planting trees. The
official 10Tall website, created in partnership with Cal Poly, tracks progress on tree plantings and as of April 2024 reports that nearly 3,000 new trees have been
planted in both private and public spaces.

In November 2022, the City completed its first carbon
sequestration pilot project on City Open Space. The
project, completed in partnership with the Coastal San
Luis Resource Conservation District, spread a thin layer of compost on over 1 acre of grassland to sequester
carbon, improve water retention, and improve forage quality. The City also completed a native tree and shrub planting project at City Farm SLO to sequester carbon, improve soil quality, conserve resources, and increase productivity and biodiversity. The City continues to evaluate opportunities to sequester carbon on City property and has been awarded funds to advance multibenefit restoration projects such as Beaver Dam Analogs that can increase soil-based carbon storage.

As the City has made progress on the initial set of actions, it has become clear that the first priority is to continue to conserve open space properties in the SLO Greenbelt to protect existing carbon stocks. The second priority is to manage the City’s new and existing properties to make them more resilient to extreme heat and wildfires, so their carbon stocks remain durable over time. As GOAL: Minimize direct emissions
from the provision of wastewater to
the maximum extent feasible.

STATUS: N/A.

GOAL: Optimize carbon
sequestration in the City’s Greenbelt
and Urban Forest system.

OBJECTIVES:

Maintain a healthy multi-benefit
Urban Forest system that increases
local carbon sequestration;
City open space and Greenbelt
support regenerative agricultural
practices and are managed to
sequester carbon (where
appropriate);
Landscape management practices
are climate-friendly and utilize
compost from the regional anerobic
digester.

STATUS: On track.

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE
2024 PROGRESS REPORT MAY 2024
PAGE 13
the City advances adaptation-focused restoration projects, the third priority is to integrate carbon sequestration practices including tree planting into City open space management.

Procurement, Budget, and Finance
A budget is the truest reflection of an organization’s values.

The way that the City purchases goods and services,
budgets resources, and finances projects and programs
indicate its commitment to a carbon neutral organization.

In the last several years, the City has taken several actions to align its budgeting process with its carbon neutrality goals including:
 Adopting Budget Policy A.6, which states that the
City will link resources with results by integrating
climate risk and climate action considerations
throughout all financial decisions.
 Integrating procedures for all Capital Improvement
Projects to disclose how they contribute to achieving
the Lead by Example goals as part of the biennial
financial planning process.
 Adopting a fleet procurement policy that requires
most new vehicles to be all-electric.

Due to staffing constraints and competing priorities, an updated Environmentally Preferred section of Procurement Policy has been initiated but has not been fully drafted or included in official Procurement Policy. However, the City has conducted several pilots and initiatives to see how it can reduce waste and emissions through environmentally preferred approaches to purchasing goods and services.

GOAL: Support and accelerate
achieving the carbon neutrality
goal through procurement,
budget, investment, and finance
processes.

OBJECTIVES:

Establish sustainability criteria to
guide vendor selection and other
procurement activities;
Establish criteria to guide budget
development and selection of
CIPs; Achieve 100% ESG
investments across the City's
portfolio;
Establish approach to enhancing
circularity in City procurement
and operations.

STATUS: Behind schedule.

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PAGE - 14 -
APPENDIX A. LEAD BY EXAMPLE PLAN IMPLEMENTATION PROGRESS The below table provides an overview of actions committed to in the Lead by Example plan. Provided details for each action include a description, the department responsible for leading initiation and implementation, the status of the action, and general progress. For the “Current Status” column, actions are categorized as follows:
 Completed – This action has been initiated and implemented.  Ongoing – This action has been initiated and implementation is ongoing.  Initiated – This action is currently being initiated and is in the planning stages. Implementation has not yet begun.  On Hold – This action has encountered uncertainties or barriers resulting in the need for a new or altered strategic approach. Additional support is being sought to re-assess feasibility.

Of the 59 Actions described below, 29 are completed, 20 are ongoing, 7 are initiated, and 3 are on hold.

Action Action Description Responsible
Department
Current
Status Action Progress
Administrative
Action 1: Lead
by Example
Update
The City will update Lead by Example every
four years (concurrent with every other
Financial Plan). The City will synch the
update with the Community Plan so that
each plan is updated in an alternating
fashion concurrent with every Financial
Plan.

Office of
Sustainability
Ongoing As part of task 1.5E in the Major City Goal Work Program, the City will update the Lead by Example plan ahead of the 25-27 Financial Plan.

Staff will initiate the subsequent update to the Lead by Example Plan in June 2024, which will result in a plan that will guide municipal climate efforts for FY25-29.

Administrative
Action 2: Lead
by Example
Update
The City will monitor and report
implementation to City Council on a regular
basis.

Office of
Sustainability
Ongoing Lead by Example Progress Reports are the City’s primary mechanism for monitoring and reporting on the Lead by Example Plan. Reports will continue to be produced every other financial plan, staggered with full Lead by Example plan updates. In addition to this report, the first to go to City Council, staff across departments have featured Lead by Example implementation progress in social media updates, community engagement efforts, and other communications.

Energy
Immediate
Action 1
Initiate conversations with PG&E and The
Energy Network to explore on-bill financing
opportunities for City buildings and facilities.

Office of
Sustainability,
Public Works
Completed The City installed LED lights at City Hall, Fire Station 1, and three Cityowned parking garages. There are currently no more on-bill financing opportunities for LED lighting retrofits. There are only a small number of facilities with non-LED lights remaining and those are being transitioned via routine maintenance as those lights reach the end of their useful life.

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE PROGRESS REPORT MAY 2024
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Action Action Description Responsible
Department
Current
Status Action Progress
Energy
Immediate
Action 2
Review and propose edits for lawn and
garden Request for Proposals
Office of
Sustainability
Completed Staff have completed reviewing and updating edits for lawn and garden Request for Proposals. A vendor has been procured with their contract running until 2026. At that time, staff plans to evaluate the use of battery powered lawn equipment as current, commercial markets are not fully equipped for this change.

Energy 1.1
(21-23 FP)
Initiate and complete Energy Master Plan to
develop the approach to decarbonization,
comprehensive energy management, and
efficiency across buildings and facilities.

Office of
Sustainability,
Public Works
Completed The City completed the Energy Master Plan in March 2022 with support from the consulting group, Glumac. The plan, officially named the “Carbon Neutral City Facilities Plan” identified three priority projects located at the Swim Center, Fire Station 1 and City Hall. The plan has already been used to formulate Capital Improvement Project (CIP) requests and inform a potential ESCO decarbonization project across the three priority sites, which is currently under consideration. Staff will continue using this plan to inform future funding requests and facility decarbonization projects.

Energy 1.3
(21-23 FP)
Complete solar projects at SLO Swim
Center, Transit Yard, and Fire Station 1 to
offset energy use at key facilities.

Public Works Ongoing Solar project construction has been delayed and is expected to initiate in 2024. In addition to the sites mentioned in the action title, the City is also considering two additional sites at the Cultural Arts District Parking Structure and the Water Resource Recovery Facility (WRRF).

Energy 1.4
(21-23 FP)
Complete battery storage project at the
Water Treatment Plant to promote resilience
against power failure.

Utilities Ongoing Through the statewide Self-Generation Incentive Program (SGIP), staff have successfully installed a 644 kWh Tesla battery pack at the Water Treatment Plant at no cost to the city. This project has been operating since October 2023 and provides low-carbon backup power for up to seven hours, reduces emissions, and has lowered the facility’s energy costs.

Energy 1.5
(21-23 FP)
Continue ongoing and strategic efficiency
improvements to advance the goal and
objectives for the Energy sector.

Public Works,
Utilities
Ongoing Staff are evaluating several funding opportunities resulting from the Inflation Reduction Act to improve the efficiency of energy production.

Staff are investigating funding for biogas energy production at the City's Water Resource Recovery Facility (WRRF). Staff at the Water Treatment Plant and WRRF are participating in Energy Load Reduction Plans (ELRPs) designed to incentivize reducing grid load during extreme peak usage and grid maintenance periods.

Energy 1.6
(21-23 FP)
Develop and pilot an energy monitoring and
management dashboard for Utilities
Department to identify additional areas for
efficiency improvements and quantify the
impact of existing and future actions and
consider scaling after pilot phase.

Utilities Completed In 2020, a pilot program was developed at the Water Resource Recovery Facility (WRRF) in coordination with PG&E's Green Button Alliance's interface that gets energy usage data into the hands of the consumer. Staff have developed a dashboard to monitor power consumption at every City-owned meter and have found that this dashboard is both scalable and applicable in providing a significant benefit to staff operations. The Utilities Department is actively seeking financial resources to hire a software developer, and staff capacity to scale this program to the larger City organization.

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Action Action Description Responsible
Department
Current
Status Action Progress
Energy 1.7
(21-23 FP)
Identify low or no cost energy efficiency
improvements at the Wastewater Resource
Recovery Facility (WRRF) through ongoing
participation in energy efficiency studies
with PG&E to reduce energy demand and
emissions for one of the City’s largest
energy-consuming facilities.

Utilities Ongoing Staff is exploring opportunities to install solar panels at the south end of the Water Resource Recovery Facility (WRRF) with the help of a Power Purchase Agreement (PPA). These solar panels will provide enough clean energy to power the recycled water pumping station facility.

Energy 2.1
(23-25 FP)
Initiate implementation of Energy Master
Plan, continue priority retrofits, and initiate
hard-to-reach retrofits to advance
decarbonization and energy management
across buildings and facilities.

Public Works,
Office of
Sustainability
Initiated Staff have begun implementation of the Energy Master Plan by retrofitting seven domestic water heaters with electric options and are in the initial planning stages for larger projects.

Energy 2.2
(23-25 FP)
Continue funding building retrofits and
identifying and pursuing innovative funding
and financing mechanisms such as on-bill
financing.

Public Works Initiated Staff are continuing to identify and pursue funding options for building retrofits including heat pump installations at SLO Swim Center and City Hall and building electrifications at Fire Station 1. The 2023-25 Financial Plan also identifies the installation of solar panels at the City’s Bus Yard, Fire Station 1, and Sinsheimer Pool as on-bill financing items are to be completed by 2025.

Fleet
Immediate
Action 1
Support Fleet Replacement Policy update to
include requirements for all-electric light
duty fleet vehicles on replacement.

Office of
Sustainability
Completed The City amended and adopted the Fleet Replacement Policy in September 2022 which prioritizes electric vehicles in the City’s fleet.

The policy enforces the replacement of fleet vehicles with either an electric car or an e-bike unless specifically approved by the City Manager.

Fleet
Immediate
Action 2
Research and assess green fleet
procurement case studies.

Office of
Sustainability
Completed Staff completed initial research and received grant funding from 3CE to complete a Fleet Electrification Study Vehicle Report and a Charging Infrastructure Report.

Fleet
Immediate
Action 3
Create GIS layer with locations of fleet
parking and existing and planned EV
chargers.

Office of
Sustainability
Completed A GIS layer with information on locations for fleet parking and current and on-bill EV chargers has been completed and was included on the Fleet Electrification Study Vehicle Report and Charging Infrastructure Report.

Fleet 1.1
(21-23 FP)
Expand EV charging infrastructure at
strategic locations to accommodate a
growing EV fleet.

Office of
Sustainability
Ongoing The City has installed six level 2 chargers at the City Corps yard, three level 2 chargers for Parking Services at the Marsh Street Parking Structure, and anticipate installing fleet charging at two more sites this fiscal year. Staff are actively working to expand electric vehicle infrastructure to accommodate a growing electric fleet.

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Action Action Description Responsible
Department
Current
Status Action Progress
Fleet 1.2
(21-23 FP)
Begin priority fleet electrification of light-duty
vehicles to initiate the transition to a zeroemissions fleet.

Public Works Ongoing Since November 2021, the City has purchased twelve electric vehicles, four Chevrolet Bolts and eight Ford F150 Lightnings. The city has plans to obtain seven more electric vehicles in FY 2024-25.

Fleet 1.3
(21-23 FP)
Continue to research funding sources for
charging infrastructure and monitor best
practices for zero emissions medium and
heavy-duty vehicles to build the foundation
for a future "hard to reach" fleet transition.

Office of
Sustainability,
Public Works
Ongoing Staff continues to research funding sources for fleet electric charging infrastructure and is readily exploring ways to install and operate fast chargers capable of supporting medium and heavy-duty vehicles.

Fleet 1.4
(21-23 FP)
Advocate to Central Coast Community
Energy (3CE) to fund a fleet electrification
plan to advance the goal and objectives of
the Fleet sector.

Office of
Sustainability
Completed Staff were successful in advocating to 3CE and received the necessary funds to complete a Fleet Electrification Study Vehicle Report. The report calls for SLO to electrify 47% of its light-duty vehicles by 2025 and 99% by 2030 and 10% of medium-duty vehicles by 2025 and 48% by 2030. A majority of the 161 vehicles deemed “Best-Fit” for full electrification are light duty pick-ups, and 64 of the total are either Police or Fire fleet vehicles and would require incremental implementation to maintain department operations. As of April 2024, the City has 15 electric vehicles, 9 plug-in hybrid vehicles, and 12 regular hybrid vehicles.

Fleet 2.6
(23-25 FP)
Develop plan for charging ‘hard to electrify”
light duty vehicles (e.g., police cruisers),
medium duty vehicles, and heavy-duty
vehicles and install infrastructure as
feasible.

Public Works,
Office of
Sustainability
Initiated Staff are assessing the procurement of two electric police cruisers and are facilitating initial conversations around electric medium-duty vehicles and the infrastructure required to support them.

Commute
Immediate
Action 1
Integrate “Lead by Example” into the Active
Transportation Plan.

Office
Sustainability
Completed Lead By Example Plan action items and principles, including exploring options to get more city employees using active transportation and transit, have been integrated into the Active Transportation Plan. This plan, adopted in February 2021, includes Policy 3.1 which ensures bicycle parking is available at government offices throughout the city and Policy 6.7 which encourages the city and local business to keep incentivizing commute via walking and biking to their employees.

Commute 1.1
(21-23 FP)
Leverage updated work from home policies
to provide VMT and provide additional
incentives for alternative transportation for
field workers and shift workers.

Human
Resources,
Office of
Sustainability
Ongoing Through the FY22-23 Green Team, staff organized a Green Team Subcommittee focused on employee commute with representation from Human Resources and Public Works. The City continues to support its employees in using low-carbon mobility options including walking, biking, taking the bus, and carpooling through the TRIP program.

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE PROGRESS REPORT MAY 2024
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Action Action Description Responsible
Department
Current
Status Action Progress
Commute 1.2
(21-23 FP)
Update TRIP program to reflect current
Council priorities and contemporary issues
such as work from home, DEI, and electric
vehicles.

Human
Resources,
Office of
Sustainability,
Public Works
Ongoing Due to staffing constraints and transitions, the formalization of the TRIP Program and Telework Policy has been put on hold. Initial drafts have been prepared and are currently awaiting internal review, as well as completion of the meet and confer process with represented bargaining groups. Once finalized, the TRIP Program will be presented to the City Council for adoption, while the Telework Policy will be formalized upon approval by the City Manager.

Commute 1.3
(21-23 FP)
Develop trip reduction program to show that
the City holds itself to the same standards
as current development and to reduce
vehicle miles travelled.

Public Works,
Office of
Sustainability
Ongoing The City has implemented ongoing trip reduction programs to reduce vehicle miles travelled from employee and staff commutes. These include providing secure bike parking, access to showers at the workplace, and incentives for employees to choose sustainable modes of transportation which include extra vacation time, emergency ride home, and prizes.

Commute 1.4
(21-23 FP)
Launch programs to increase employee
access to bicycles (e.g., employee bike loan
program).

Office of
Sustainability,
Public Works,
Finance
On Hold The City has not launched a program to increase employee access to bicycles.

Commute 1.5
(21-23 FP)
Enhance/expand bus pass access to
encourage alternate, low-carbon
transportation for commute purposes.

Public Works Ongoing At Council’s review the Transit Innovation Study, staff presented and was approved to implement a pilot program expanding discounted bus and fare options for K-12 students. The Transit Innovation Study recommends expanding discounted or free fare options to seniors and low-income individuals. Additionally, the Transit Innovation Study recommends exploring more institutional partnerships with large employers in the area to promote more transit use for employees’ commuting needs. Future collaborative efforts with the county are being considered ways to simplify the existing Downtown Access Program are under review.

Commute 1.6
(21-23 FP)
Explore mobility-as-a-service to connect
employees with alternate, low-carbon
transportation for commute purposes.

Office of
Sustainability,
Public Works
On Hold After thorough research, staff found that a mobility-as-a-service platform is not feasible for a city of San Luis Obispo's size for the sole purpose of employee commute. However, as the City develops options to increase transit ridership, it may become more feasible and be implemented at that time.

Commute 1.7
(21-23 FP)
Establish electric vehicle charging policy for
personal vehicles at City parking spaces to
encourage use of EV’s for commute
purposes.

Public Works,
Office of
Sustainability,
Finance
On Hold The City has not yet developed an electric vehicle charger policy for personal vehicles at City parking spaces.

Waste
Immediate
Action 1
Research and assess solution case studies
for recycling contamination in public spaces.

Office of
Sustainability
Completed Staff completed case study research, which, in part, informed the selection of the new Big Belly waste receptacles.

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Action Action Description Responsible
Department
Current
Status Action Progress
Waste 1.1
(21-23 FP)
Hire a CivicSpark Fellow to support a
municipal zero waste goal.

Utilities Completed A Civic Spark Fellow was hired from September 2021 until August 2022 and assisted the Utilities Department with drafting a preliminary Municipal Waste Reduction Plan. The Fellow collected data on municipal waste generation and diversion activities.

Waste 1.2
(21-23 FP)
Develop a Municipal Waste Reduction Plan
and conduct municipal waste
characterization study to frame an approach
to operations-wide solid waste reduction.

Utilities Initiated A consultant was hired in July 2023 to perform a waste characterization and generation study for City operations. The results include Citywide diversion data and serves as a benchmark for the Municipal Waste Reduction Plan. In addition to diversion, the completed plan identifies programmatic recommendations for staff to incorporate to increase diversion and reduce waste.

Waste 1.3
(21-23 FP)
Adopt waste reduction and diversion
ordinances to ensure consistency with
ordinance directives from the Integrated
Waste Management Authority.

Utilities Ongoing The City adopted a comprehensive waste reduction and diversion ordinance in 2021 that incorporated the regulatory requirements of SB 1383 into the City’s Municipal Code. The City continues to amend and adopt waste diversion ordinances to remain in compliance with state laws such as AB1276 – Single Use Foodware Accessories and Standard Condiments, which was approved by City Council on May 7, 2024.

Waste 1.4
(21-23 FP)
Survey office space throughout the City and
assess opportunities to optimize waste
reduction through the TRUE certification
program.

Utilities Completed Staff successfully completed surveyance of City office spaces to ensure that deskside bins and outside dumpsters are accurately labeled, all facilities have 2-3 bin systems, and that trash, recycling, and food waste materials are properly source separated. Staff are updating bin infrastructure with adequate signage and have prioritized educating City employees to reduce waste in City offices through inperson outreach, newsletters, and video messaging.

Waste 1.5
(21-23 FP)
Develop & implement paper-free workplace
policy to reduce paper waste in office-based
operations.

Utilities Initiated Staff started implementing the Statewide procurement vision outlined in SB 1383 through incorporating paper-free workplace practices. All City printers are adjusted to default to duplex printing and a recycled content paper procurement policy has been adopted. Finance and Utilities provide education to staff on the importance of procuring recycled content paper and are increasing education on SB 1383 to influence positive interdepartmental purchasing behavior.

Waste 1.6
(21-23 FP)
Begin pilot implementation of compost
application and monitoring to implement the
Carbon Farm Plans described in 1.5, above,
beginning in 2022 to advance carbon
sequestration efforts.

Utilities Completed Staff have successfully completed a compost application and monitoring pilot project at Johnson Ranch Open Space and Laguna Lake Golf Course. Please see Natural Solutions 1.6 for additional detail.

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Action Action Description Responsible
Department
Current
Status Action Progress
Waste 2.1
(23-25 FP)
Initiate project to right-size existing waste
bins to encourage appropriate waste
disposal across offices.

Utilities Initiated Staff conducted a City-wide building audit and hired an independent consultant to perform building walk-throughs to recommend additional diversion methods. Staff have right-sized 3 bin systems and outdoor bins at various City facilities to encourage proper source-separation.

Approximately $10,000 has been allocated to purchase indoor containers and grants are being pursued to acquire additional funding.

Waste 3.1
(27-29 FP)
Continue implementing the Municipal Waste
Reduction Plan to support the goal and
objectives of the Solid Waste sector.

Utilities Ongoing Staff have initiated an on-going effort to continue implementing a waste reduction plan outlined in Waste 1.2.

Wastewater
Immediate
Action 1
Develop community engagement materials
and outreach program for sewer lateral
replacement policy.

Utilities, Office
of
Sustainability
Completed Staff regularly hold community engagement workshops on the City’s sewer lateral replacement policy. The City’s Sewer Lateral Program website features resources including financial support, to help the community more easily access information about sewer lateral replacement. Additionally, the utilities department is revising the Municipal Code to streamline the Sewer Use Ordinance. They anticipate this revision will result in additional reduction of stormwater infiltration into the sewer which consumes energy through the treatment processes at the Water Resource Recovery Facility (WRRF.) Wastewater 1.1
(21-23 FP)
Optimize onsite energy generation to reduce
external energy demand and subsequent
electricity purchases.

Utilities Completed The Water Resource Recovery Facility (WRRF) has recently gone through an upgrade that allows it to utilize tanks on site to produce methane gas to run an engine that powers a generator that is expected to produce more than 150 kW of power. These tanks will be used to provide power and reduce the need for offsite electricity generation.

Staff will be able to fully quantify increased onsite energy production when the WRRF upgrade project is completed in the latter half of 2024.

Wastewater 1.2
(21-23 FP)
Continue to reduce inflow and infiltration into
the wastewater collection system through
capital replacement of gravity sewer mains
and private sewer lateral programs,
resulting in less wastewater to treat.

Utilities Completed Staff have replaced over 100 private sewer laterals in the last year which has successfully prevented stormwater from infiltrating the sewer system, and thereby reduced the amount of water the Water Resource Recovery Facility (WRRF) must process. To quantify the impacts of repairs completed after 2014, a Flow Study of gravity sewer mains is being conducted and is expected to be completed by summer 2024.

Wastewater 1.3
(21-23 FP)
Evaluate the potential for expanded onsite
energy capture and production through an
ongoing partnership with the U.S.

Department of Energy.

Utilities Ongoing The City is currently involved in the Sustainable Wastewater Infrastructure of the Future (SWIFt) Accelerator administered by the U.S. Department of Energy. The invitation-only-program provides a nation network designed to provide education and funding opportunities to participants seeking to increase the energy efficiency of wastewater infrastructure operations. The City was invited to participate after being awarded the Water Environment Foundation’s “Utility of the Future” award in 2020.

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Action Action Description Responsible
Department
Current
Status Action Progress
Natural
Solutions 1.1
(21-23 FP)
Prepare the City’s first Urban Forest Master
Plan, to be brought before City Council in
2022, including a comprehensive update of
tree inventory, assessment of tree canopy
coverage, and implementation of an
ongoing tracking system.

Public Works
and Office of
Sustainability
Completed City Council adopted the City’s first Community Forest Master Plan in April 2023. This plan establishes goals to maintain and expand the urban forest, manage the urban forest for sustainability and climate resilience, foster a spirit of collaboration with other agencies and community groups, and educate and involve City residents and visitors to sustain a thriving urban forest. The plan also sets forth an implementation plan to achieve these goals. Key tasks are to improve data about the urban forest, ensure the “right tree, right place” approach to plantings, strengthen maintenance practices, and reach the City’s goal of planting 10,000 new trees by 2035.

Natural
Solutions 1.2
(21-23 FP)
Partner with ECOSLO and others in the
community to support the 10,000 Trees by
2035 goal through a tree planting and
maintenance program.

Office of
Sustainability
Completed In support of reaching the City’s goal of planting 10,000 trees by 2035, the City has initiated an interdepartmental "Keys for Trees" program in partnership with ECOSLO. Through Keys for Trees the Tourism Business Improvement District (TBID) allocates 1% of their assessment of all hotel revenue in the city towards planting trees in SLO. Through this partnership, the City and ECOSLO have planted over 40 trees per year in a variety of locations including city parks and open spaces. The official 10Tall website, created in partnership with Cal Poly, tracks progress on tree planting and as of March 2024 reports that nearly 3,000 new trees have been planted in both private and public spaces.

Natural
Solutions 1.3
(21-23 FP)
Convene an interdepartmental staff team to
assess and provide recommendations for
the Urban Forest Program's future role in
advancing sustainability goals and
objectives.

Public Works
and Office of
Sustainability
Ongoing The City conducted an Urban Forestry Organizational Assessment which provided recommendations to maximize organizational efficacy.

Priority recommendations include establishing a pruning cycle performed by external contractors and reestablishing an in-house team that can answer service requests or workorders. The assessment also recommends developing a comprehensive schedule and work plan that organizes routine maintenance needs, rotation schedules, and expected staff time to complete maintenance activities.

Natural
Solutions 1.4
(21-23 FP)
Identify a strategy for a prioritized
replacement schedule for downtown Ficus
trees and begin implementation to ensure
the long-term preservation of the Downtown
street tree canopy.

Public Works
and Office of
Sustainability
Completed The Community Forest Plan, adopted by Council in April 2023, identifies a strategy to systematically remove and replace Ficus trees in downtown. The plan outlines a specific goal to have more diverse, mixed-age, and mixed-species tree canopy that is more appropriate for its surroundings to preserve the downtown tree street canopy over time. The most likely plan is for a regular 20- to 30-year replacement cycle to be established. Some trees of the same species, including Ficus microcarpa, may be replanted but they will not again be allowed to attain such enormous size in cramped sidewalk spaces.

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE PROGRESS REPORT MAY 2024
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Action Action Description Responsible
Department
Current
Status Action Progress
Natural
Solutions 1.5
(21-23 FP)
Develop a “Carbon Farm Plan” for the City’s
Johnson Ranch Open Space and Calle
Joaquin Agricultural Reserve (“City Farm”)
in 2021 to strategically implement compost
application.

Office of
Sustainability
Completed With support from the Coastal San Luis Resource Conservation District, the City completed the "Carbon Farm Plan" in December 2022.

The Carbon Farm Plan analyzes two properties – Johnson Ranch Open Space and City Farm SLO. At Johnson Ranch the plan explores carbon farming practices such as prescribed grazing, silvopasture, planting a riparian forest buffer, and compost application. At City Farm SLO, reduced/no-till farming, cover cropping, mulching, riparian restoration, and hedgerow planting were analyzed (among other practices). Since completion of the plan the City has successfully implemented compost application at Johnson Ranch.

Natural
Solutions 1.6
(21-23 FP)
Begin pilot implementation of compost
application and monitoring to implement the
Carbon Farm Plans described in 1.5, above,
beginning in 2022 to advance carbon
sequestration efforts.

Office of
Sustainability,
Parks and
Recreation
Completed The City completed a compost application pilot project at Johnson Ranch Open Space that spread a thin layer of compost on over 1 acre of grassland to sequester carbon, improve water retention, and improve forage quality. At the Calle Joaquin Agricultural Reserve (“City Farm”) the City completed a native tree and shrub planting project to improve soil quality, conserve resources, and increase productivity and biodiversity. The City continues to evaluate opportunities to sequester carbon on City Open Space Properties and has been awarded funds to advance multi-benefit restoration projects such as Beaver Dam Analogs that can increase terrestrial carbon storage.

Natural
Solutions 1.7
(21-23 FP)
Actively pursue opportunities to purchase
open space lands and permanent land
conservation agreements in furtherance of
the City's Greenbelt Protection Program.

Office of
Sustainability
Ongoing Staff have completed a suite of open space easements within the Froom Ranch Specific Plan area, which includes an area of wetlands, the “Upper Terrace” containing natural springs, wildlife habitat, and numerous rare plants, as well as the future alignment of Froom Creek itself. Natural Resources Program staff have continued pursuing additional conservation projects within the Greenbelt.

Natural
Solutions 1.8
(21-23 FP)
Explore opportunities to utilize regional
green waste digester compost for beneficial
use across properties and operations.

Office of
Sustainability,
Public Works,
Parks and
Recreation
Completed The City has applied HZI Anerobic Digester compost to parks, landscaping areas, and other City facilities. Specific applications include the Laguna Lake Golf Course, several community gardens, Emerson Park, as well as organized giveaways for the public. At locations like the golf course, compost application has reduced the City’s dependence on nitrogen fertilizers. This procurement supports the City’s compliance with SB 1383.

Natural
Solutions 2.1
(23-25 FP)
Begin long-term implementation of “Carbon
Farming” practices to advance carbon
sequestration efforts.

Office of
Sustainability
Ongoing The City has implemented several carbon sequestration projects and activities in the FY21-23 financial plan. Staff have organized tree plantings in the urban core and on City open space, spread compost on rangeland, and restored riparian corridors throughout the watershed. Going forward, 2 grant-funded restoration projects at Johnson Ranch Open Space and Bishop Peak will enable the City to continue researching innovative restoration techniques. These efforts on City Open Space will draw down carbon and help the SLO Greenbelt adapt to more frequent droughts, floods, and fires.

CITY OF SAN LUIS OBISPO LEAD BY EXAMPLE PROGRESS REPORT MAY 2024
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Action Action Description Responsible
Department
Current
Status Action Progress
Natural
Solutions 2.2
(23-25 FP)
Continue planting trees on an annual basis
towards the objective of 10,000 new trees
by 2035 pending direction in the Urban
Forest Master Plan to advance carbon
sequestration efforts.

Office of
Sustainability
Ongoing Planting new trees and increasing canopy cover increases local carbon sequestration in the urban core and City open space. Thus far, the City and its partners have planted 3,000 of its 2035 goal of planting 10,000 new trees. The City also continues to maintain a healthy urban forest so that existing carbon stocks stored in trees’ living tissues are resilient to present and future climate hazards.

Natural
Solutions 2.3
(23-25 FP)
Launch pilot project to strategically phase-in
regional green waste digester compost for
landscape management operations to
promote circularity and advance carbon
sequestration efforts.

Office of
Sustainability,
Public Works,
Parks and
Recreation
Completed Staff have successfully used compost produced by regional green waste digesters at City facilities. Please see Natural Solutions 1.8 for additional detail.

Procurement
Immediate
Action 1
Research and assess case studies on
green/sustainable budgeting at municipal
level.

Office of
Sustainability
Completed City staff reviewed green and sustainable budgeting approaches in place at several peer-Cities and jurisdictions and found that the City’s current approach and policies related to budgeting are already supportive of achieving goals in the Lead by Example plan.

Procurement
Immediate
Action 3
Adopt new policy focusing budget decisions
on sustainability, resilience, and diversity,
equity, and inclusion.

Office of
Sustainability
Completed On June 06, 2023, Council adopted the City’s 2023-25 Financial Plan.

The plan’s sixth objective “Integrate climate risk and climate action considerations throughout all financial decisions” and item C of the Long-term Financial Planning section (see below), provide budgeting guidance related to sustainability, resilience, and diversity, equity, and inclusion. Item C. Consideration of Climate Risk and Climate Action:
“The City is aware of the increasingly severe and frequent natural, economic, and social disruptions presented by a rapidly changing climate. The City is also aware of the financial benefits (e.g., reduced operational costs, prudent asset management, access to green bonds, etc.) of managing climate risk and orienting towards a carbon neutral municipal operations and community. The City will include climate risk and climate action considerations in its long-term financial planning.” Procurement

1.1 (21-23 FP)
Develop and implement Capital
Improvement Project (CIP) climate and
resilience quantification tool for 2023-25 FP
to promote consistency with Counciladopted climate goals for capital projects.

Office of
Sustainability,
Finance, Public
Works
Completed The City initiated an effort to quantify climate emissions, resilience impacts, and benefits of Capital Improvement Projects (CIP). Given the wide variety of CIP projects, an effective quantification system was deemed infeasible and instead, staff created a qualitative section in the CIP proposal template, requiring that internal project sponsors include information about how the project is aligned with the Lead by Example Plan.

Procurement

1.2 (21-23 FP)
Update and advance climate and equity
budget approach for 2023-25 FP to promote
consistency with Council-adopted climate
goals for budget processes.

Office of
Sustainability,
Finance
Completed Sustainability staff participated on the Capital Improvements Project (CIP) committee and successfully integrated sustainability and equity criteria into the CIP evaluative criteria to ensure that all decisions are made with climate and equity in mind.

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Action Action Description Responsible
Department
Current
Status Action Progress
Procurement

1.3 (21-23 FP)
Update Environmentally Preferred section of
Procurement Policy and codify in the
Municipal Code to reflect broader climate
and sustainability considerations.

Finance, Office
of
Sustainability
Completed Staff have drafted an update to the Environmentally Preferred section of the Procurement Policy and are continuing to work on it, ahead of inclusion in the official Procurement Policy.

Procurement

1.4 (21-23 FP)
Conduct pilot program with IT and consider
updating IT strategic plan regarding
environmentally preferred equipment to
identify/assess challenges and opportunities
with sustainable purchasing that can be
scaled to other operations and equipment.

Finance,
Information
Technology,
Office of
Sustainability
Completed The City’s pilot program evaluated several options for sustainability and found that current practices were the most sustainable alternative.

The City typically purchases computers through a single provider which had made its own commitments to sustainability through electronics recycling, using recycled materials in bulk packaging, using recycled materials in new components, and use of sustainable materials like bioplastics.

Procurement

2.1 (23-25 FP)
Develop and begin implementing Counciladopted sustainability criteria for procurement contracts.

Finance Initiated Staff have updated the purchasing policy manual to include the Climate Action Plan in all City issued Request for Proposals (RFPs). The City’s RFP process evaluates efforts bidders have taken towards reducing emissions within their operations and asks how sustainability is considered during project implementation.

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: May 21, 2024
TO: Mayor and Council
FROM: Greg Hermann, Interim Assistance City Manager
Prepared by: Chris Read, Sustainability Manager
Michael Loew, Chief Building Official
VIA: Whitney McDonald, Interim City Manager
SUBJECT: ITEM 7B – ENERGY EFFICIENCY RENOVATIONS POLICY FOR MAJOR

RESIDENTIAL ADDITIONS AND ALTERATIONS
Staff received a series of questions about the proposed Energy Efficient Renovations Policy from a Council member. The questions are below with staff’s response shown in italics:

1. How was the requirement for an addition or alteration of 500 square feet arrived at? Is it based on data about efficiency, cost, or other factors? To develop the applicability threshold, staff reviewed energy efficiency retrofit thresholds in other jurisdictions, thresholds for different types of retrofit policies in the City’s current code, and construction cost estimates. In the December 2023 study session, additions and alterations were presented as an optimal trigger for the initial policy development since retrofits could be incorporated with minimal impact to the project. As such, the cost to comply with the measure compared to typical cost of applicable projects was a primary evaluative criterion. Staff looked at what other jurisdictions have done, what other standards for existing buildings require, and considered different sizes based on costs of compliance in relation to the overall project. Staff is proposing the 500 square feet for the City of SLO based on the minimum cost of construction for renovations being 200 dollars a square foot. This means that the ordinance should not impact projects with a construction cost of less than $100,000, which is proportionate to the overall cost of compliance.

2. We received some correspondence questioning the value of R19/R30/R49 insulation for our area. Are these levels of insulation commonplace/necessary in our area?
The Statewide Codes and Standards Team developed the cost effectiveness report provided as Attachment B. The study is based on building simulations run in the City’s climate zone and found that the proposed compliance measures reduce energy use. The points in the compliance measure table correlate to the relative energy savings expected by each measure. Staff also conducted a local builder who affirmed that these insulation measures are effective and valuable in the City’s climate zone.

Item 7. Energy Efficiency Renovations Policy Page 2

3. Can you please explain exemption #7?
Exemption 7 exempts attached accessory dwelling units (ADUs) from triggering the policy. As drafted, this exemption would be most applicable in the instance where a project was adding an attached ADU and an addition/alteration to the main unit. In this instance, if there was a 400 square foot attached accessory dwelling unit and a 200 square foot addition, the project would only count for 200 square feet in the context of this policy and would not be considered a “major” addition or alteration.

4. Why are we excluding attached ADUs?
During community outreach, staff heard concern about slowing housing production due to requiring improvements to the main building when only an ADU is being created. Staff also heard concern from developers that if an ADU was being built, and it required modifications to the existing associated residence, that it will cause delays in construction if the existing residence is occupied. In addition, staff recommends further consideration in the context of existing State law supporting the production of ADU’s.

5. Some of our email expressed concerns that while there are incentives now, it is uncertain how long and how many of these incentives will be available in the future. Is there a possible mechanism for providing some sort of incentive in the future, in addition to the ordinance? (Examples mentioned include discounts on permitting fees, or other financial incentives.) Incentive and rebate granting agencies and organizations are subject to changing economic conditions and staff cannot guarantee resources will be available beyond 2026, which is why they are not included in the cost effectiveness study findings. However, based on discussion with staff in both 3CE and 3CREN, regional resources are expected to be available through the foreseeable future.

The federal tax credits that would apply to compliance measures are available through 2032.

6. Could this be considered a pilot project, with review and potential improvements made before 2026?
The proposed policy is a “de facto” pilot in the sense that it will be in operation for one year before being required to be re-adopted as part of the next three-year building code update cycle. Early implementation learnings will immediately be put into place as part of the first update. The policy will need to be re-adopted every three years thereafter, which ensures regular check-in and update opportunities.

Item 7. Energy Efficiency Renovations Policy Page 3

7. How do we know the local workforce is knowledgeable enough and that there are enough professionals in the marketplace now to accommodate an increase in demand for this work?
These relatively minor upgrades would occur as part of large construction projects.

Hot water heater installation, HVAC installation, electrical work, and energy efficiency improvements are standard processes and there is not expected to be contractor shortages relative to the likely small number of applicable projects. Most projects this size would already be complying with parts of the California Energy Code and would have someone on the team able to complete the energy efficiency portion and some projects already have water heaters or HVAC systems in their scope.

8. For requirement #2, it seems expensive to get to a point value of 8 in table

1. It’s also very expensive to install solar, and to install heat pump HVAC. Is it possible that most projects could qualify for the “hardship” exemption? The hardship exemption would only be granted if the applicant can demonstrate that 1) there are no feasible compliance paths, or 2) there are no compliance paths that would cost less than 10% of total project cost.

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Department: Administration
Cost Center: 1005
For Agenda of: 5/21/2024
Placement: Public Hearing
Estimated Time: 90 minutes
FROM: Greg Hermann, Deputy City Manager
Timmi Tway, Community Development Director
Prepared By: Chris Read, Sustainability Manager
Michael Loew, Chief Building Official
SUBJECT: ENERGY EFFICIENT RENOVATIONS POLICY FOR MAJOR

RESIDENTIAL ADDITIONS AND ALTERATIONS

RECOMMENDATION
Introduce a Draft Ordinance, entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, adopting Local Amendments to Part 6 of the Building Construction and Fire Prevention Code, 2023” approving the Energy Efficient Renovations Policy for major residential additions and alterations.

POLICY CONTEXT
A suite of adopted City Council policies support the staff recommendation to adopt the Energy Efficient Renovations Policy for existing single-family residential buildings. A select summary of this policy context is below:
 Land Use Element of the General Plan:
o Policy 9.4 (Climate Action Plan) - The City shall maintain and implement its Climate Action Plan to reduce community and municipal greenhouse gas (“GHG”) emissions consistent with State laws and objectives. o Policy 9.7 (Sustainable Design) - The City shall promote and, where appropriate, require sustainable building practices that consume less energy, water and other resources, facilitate natural ventilation, use daylight effectively, and are healthy, safe, comfortable, and durable.  Conservation and Open Space Element of the General Plan:
o Policy 2.2.1 (Atmospheric Change) - City actions shall seek to minimize undesirable climate changes and deterioration of the atmosphere’s protective functions that result from the release of carbon dioxide and other substances.
o Goal 4.2 (Sustainable energy use) - Increase use of sustainable energy sources such as solar, wind and thermal energy, and reduce reliance on non-sustainable energy sources to the extent possible with available technology and resources.

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 Climate Adaptation and Safety Element of the General Plan:
o Policy HE-4.3 (Green and Healthy Buildings) - The City shall support fuel switching retrofits (from fossil fuel to high-efficiency electric appliances), energy efficiency retrofits, and distributed energy resources as low-carbon solutions to create safe, cool, and healthy buildings and consider programs and projects that support these retrofits as critical to maintaining community safety and to supporting disaster preparedness.
 Resolution 11159 (2020 Series) adopted the Climate Action Plan for Community Recovery with the goal of community carbon neutrality by 2035 and a sub-goal of 50 percent reduction in emissions from existing buildings by 2030.  Resolution No. 11381 (2022 Series) reaffirmed these goals and created a work program for fiscal years 2023-27, including Green Buildings Action 2.1.E, which directs staff to, “Develop an equitable framework for requiring electrification retrofits and develop cost effective building electrification policies for additions and alterations.”
 2023-25 Financial Plan Climate Action Major City Goal action 4.1.i directs staff to conduct a study session, and pending Council direction, develop an equitable framework for cost-effective building electrification retrofit policies, with an initial focus on additions and alterations, as called for by CAP Green Buildings Task

2.1.E. Staff conducted the study session on December 4, 2023 and received strategic direction to return with an additions and alterations policy in 2024.

REPORT-IN-BRIEF
On August 19, 2020, Council approved the City’s Climate Action Plan for Community Recovery (“CAP”), and adopted Resolution 11159 (2020 Series), which includes the goal of carbon neutrality by 2035 and building sector goals of 1) zero emissions from new buildings, and 2) a 50 percent reduction in emissions from existing buildings by 2030. On December 6, 2022, the Climate Action Plan was updated, and the building sector goals were reaffirmed.

On December 5, 2023, staff conducted a Study Session with City Council to discuss the various policy options available to increase the rate of existing buildings emissions reductions. Council directed staff to return in 2024 with draft energy efficiency requirements for major additions and alterations. This report and the attached proposed ordinance provide these draft requirements, referred to as the Energy Efficient Renovations Policy, for Council’s consideration.

Focusing on the biggest energy users in residential buildings, water heating and space heating, as well as whole building efficiency, the Energy Efficient Renovations Policy would require that major additions and alterations (as further defined herein) will need to include certain energy efficiency measures as part of their project. The Policy would be implemented via local amendments to the California Energy Code and would not apply to cooking equipment (e.g., stoves), laundry dryers, or other unregulated energy uses.

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To be consistent with federal and state law, the City must make findings that the proposed building code amendments related to building energy performance are cost effective and use less energy than the standard State Code. The California Energy Commission (CEC) must agree with the City's analysis before the local amendments to the California Energy Code can go into effect. This report provides findings that the proposed amendments that affect building energy use are cost effective (as further defined herein). The study that illustrates cost effectiveness is provided as Attachment B.

Should Council move forward with staff’s recommendation, the second reading of the Ordinance would occur on June 4, 2024. Pending California Energy Commission approval of the local amendments to the California Energy Code, staff would develop project intake forms and work with 3C-REN to develop an Energy Code Coach support service ahead of the reach code going into effect on January 1, 2025.

DISCUSSION
Background
On August 19, 2020, Council approved the City’s Climate Action Plan for Community Recovery (“CAP”), and adopted Resolution 11159 (2020 Series), which includes the goal of carbon neutrality by 2035 and building sector goals of 1) zero emissions from new buildings, and 2) a 50 percent reduction in emissions from existing buildings by 2030.

On December 6, 2022, the Climate Action Plan was updated, and the building sector goals were reaffirmed. In addition to a suite of solutions to support voluntary retrofits, the updated Climate Action Plan includes work task “Green Buildings 4.1.A”, which directs staff to “Develop an equitable framework for requiring electrification retrofits and develop cost-effective building electrification policies for additions and alterations.” This action is included in the 2023-25 Financial Plan as Climate Action Major City Goal Task 4.1.i.

As the City’s electricity provided by Central Coast Community Energy (3CE) is on track to be 100% renewable by 2030, efforts to reduce climate emissions from buildings in SLO focus on reducing natural gas consumption and increasing overall building energy efficiency. Between 80 and 90 percent of gas used in residential buildings is consumed by a building’s water heater and furnace. Due to current regulatory limitations, the City is excluding stoves and laundry dryers from existing building policy discussion. For these reasons, the existing building policy discussion, including the Energy Efficient Renovations Policy discussed in this report, will focus on water heating, space conditioning, and whole home energy efficiency.

On December 5, 2023, staff conducted a Study Session with City Council to discuss the various policy options available to increase the rate of building decarbonization. Council provided strategic direction to staff to return in 2024 with draft energy efficiency requirements for major additions and alterations. This report provides these draft requirements, now referred to as the Energy Efficient Renovations Policy, for Council’s consideration.

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Proposed Approach
As discussed in the September 19, 2023 Council Agenda Report regarding local energy code amendments for new buildings, the California Restaurant Association v. City of Berkeley ruling prevents the City from requiring all-electric buildings. Staff identified increased building energy performance requirements via local amendments to the California Energy Code (also known as a “reach code”) as an allowable and viable alternative way to achieve lower emissions in new buildings. Just as with new buildings, Section 10-106 of the California Energy Code also allows for local amendments for efficiency standards for existing buildings in projects that include additions and alterations.1 Similar to new buildings, Section 10-106 also notes that local amendments must be cost effective and result in buildings that consume less energy than permitted by the state Energy Code.

The California Energy Code establishes whole-building efficiency requirements, which account for a building’s water heater, HVAC (heating, ventilation, and air conditioning) system, solar generating system, and insulation, among other things. However, it does not account for cooking equipment, laundry dryers, or other unregulated energy uses.

Proposed Energy Efficiency Renovations Policy
Staff proposes that single-family residential major additions and alterations be required to include certain energy efficiency measures, and in some cases include zero emission readiness provisions (i.e., pre-wiring for future electric appliances). This section provides proposed definitions for a “major addition” and “major alteration”, the energy efficiency measures required for compliance, and proposed exemptions.

Proposed Policy Applicability
Staff reviewed construction and compliance measure cost estimates, previously submitted building permits, and examples from the nearly 20 statewide existing building energy reach codes to identify the appropriate applicability for buildings in San Luis Obispo. Based on cost of construction and compliance and in seeking to adopt a policy that effectively fits into major construction projects, staff propose that the policy apply to single-family homes under the following definitions and thresholds for applicability:
 Major Addition - Any change to an existing building that increases conditioned floor area by 500 or more square feet.
 Major Alteration - Any construction or renovation to an existing structure other than a repair whose work area covers 500 or more square feet of the total floor area of the existing building.
 Major Addition and Alteration – Any project whose combined addition and alteration has a work area equal to or greater than 500 square feet.  Compliance Period - Per the draft ordinance, work that is completed within a oneyear period would count toward the thresholds noted above.

1 Building Energy Efficiency Standards: https://www.energy.ca.gov/sites/default/files/2022-12/CEC-400-2022- 010_CMF.pdf

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Proposed Policy Compliance Requirements
As proposed, projects that are identified as a Major Addition, Major Alteration, or Major Addition and Alteration, would have to complete the first two requirements listed below, and in some cases would also be required to complete the third requirement.  Requirement 1 - Upgrade all internal and external lighting to LED lighting and upgrade external fixtures to include photocells or timers so that they are not operated during the daytime.
 Requirement 2 - Select from one of the following:
a. A combination of energy efficient measures from Table 1 (below) totaling 8 or more points, or
b. A heat pump hot water heater, or
c. A heat pump HVAC system, or
d. A rooftop solar energy system.
 Requirement 3 - Projects that are subject to the policy and that are electively upgrading their electrical service to 200 amps and their electrical panel must install breakers in the panel, run conduit and wiring to the location of a future heat pump hot water heater and heat pump HVAC system, and install outlets for those future systems.

Table 1. Energy Efficiency Measures2
Measure Measure Points
Water Heating Package 1
Air Sealing 1
R-49 Attic Insulation 2
Duct Sealing 2
New Ducts and Duct Sealing 4
Windows 3
R-19 Floor Insulation 8
R-30 Floor Insulation 10
Proposed Exemptions
To accommodate the wide variability in existing buildings, staff proposes the following exemptions(the list below provides a brief overview of exemptions which are described in greater detail in Attachment A):

1. Repairs. Repairs are expressly exempt from the Policy.

2. Hardship. Projects with compliance costs that are more than 10% of total project cost, or that have building specific conditions that make compliance technically infeasible, may request a hardship exemption. Hardship exemptions will also cover

2 Attachment A provides additional information about each energy efficiency measure.

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unexpected circumstances. Approval of an infeasibility claim will be at the discretion of the Chief Building Official. As with all building code determinations and interpretations, decisions are appealable to the Construction Board of Appeals.

3. Pre-Compliance. Projects that can demonstrate that they have previously installed compliance measures will be given credit for those measures.

4. Historic Buildings. Historic buildings that could not comply without affecting their listing or registry status would be exempt.

5. Hazard Mitigation. Alterations completed solely for seismic safety upgrades would be exempt.

6. Roof and Windows: Alterations that consist solely of roof and/or window projects would be exempt.

7. New Units: When an addition or alteration results in the creation of a new residential unit, the square footage of that unit shall not be counted towards the 500 square threshold.

Examples of Applicable Projects and Compliance
The types of projects that would be applicable to the Energy Efficient Renovation Policy under the definitions proposed above would be elective major construction projects that are closer to new construction than a typical smaller addition or alteration might be. These types of projects require a building permit and are required to comply with state and local codes and requirements. As such, depending on the project scope, applicants of these types of projects typically already have an architect, engineer, and energy code compliance expert on their design team. In many cases, the construction teams of such projects include a general contractor and both plumbing and electrical sub-contractors.

Staff reviewed recent permits and standard construction cost estimates to develop an example major addition and major alteration, described in Figure 1, below. Since it is unlikely that most people in the community have considered adding 500 square feet to their home or altering 500 square feet of their home, it is helpful to provide examples of both types of projects. Note that costs are estimates and may be higher or lower depending on specific situations.

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Figure 1. Additions and Alterations
The major addition example can be used to illustrate how compliance works. In this project, it is likely that the project would include replacing a hot water heater, so the builder/owner would likely choose to comply with the heat pump hot water heater measure. Since they are electively upgrading their electric service and panel, they would also add a breaker, conduit and wire, and an outlet for a future HVAC system. Taken together, the LED lighting upgrades, zero emission building readiness requirements, and heat pump hot water heater installation is estimated to cost $5,000-$15,000. Compliance would result in an approximately 2-6% increase in project costs. However, much of these costs could be offsets by available rebates and incentives as described below.

Cost Effectiveness
The California Energy Commission (CEC) requires any local energy standards that exceed the California Energy Code to be cost effective and to use less energy than the state requirements. The CEC requires the local agency to adopt a determination, at a public meeting, that the energy standards are cost effective. Staff has provided recommended findings that meet these standards below and in the draft Ordinance provided as Attachment A. The determination must subsequently be filed with the CEC, which would be completed by staff upon adoption of the draft Ordinance.

The CEC provides two different cost effectiveness metrics. “On-bill” cost effectiveness refers to the direct cost experienced by the homeowner. For something to be cost effective “on-bill”, the energy bill savings of a measure must at least pay for the cost of that measure over a 20-year period. The other approach is “Long-Term Systemwide Cost” (LSC). LSC considers the cost to install energy efficiency measures, the on-bill savings from those measures, and larger system costs that everyone pays for like energy infrastructure costs and the impacts of climate change. For CEC approval, a local MAJOR ADDITION EXAMPLE
- 1,000 sq ft single family home adds 550 square
feet in a second story with two new bedrooms and
a full bathroom
- Electively upgrades electrical service and installs
new panel
MAJOR ALTERATION EXAMPLE
- 1,500 sq ft single family home alters 800 square
feet, including converting 2 bedrooms, a hallway,
and open space into 3 bedrooms and adding a new
bathroom

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amendment to the California Energy Code must show a compliance pathway that is either “on-bill” or “LSC” cost effective. As described below, staff’s proposed policy has “on-bill” and “LSC” cost effective compliance pathways.

In support of reach code development, the California Energy Codes and Standards Statewide Utility Program, which includes the State's Investor-Owned Utilities (Pacific Gas, and Electric (PG&E), San Diego Gas and Electric (SDG&E), and Southern California Edison (SCE), under the auspices of the California Public Utilities Commission) developed and published the 2024 Single Family Cost Effectiveness Report, provided as Attachment B.3
This study and the associated cost-effectiveness data are highly detailed and are included in the record to support Council’s findings and policy decisions. The study and the associated cost-effectiveness data include a calculated benefit-to-cost ratio for a wide variety of measures and climate zones. A benefit-cost value of “1” or greater illustrates that the measures save more than they cost and are therefore “cost effective.”4 The study and the associated cost-effectiveness data are the basis for staff’s recommended cost effectiveness findings and are sufficient to illustrate compliance with the requirements set forth under California Administrative Code Chapter 10-106.

Based on the study, staff recommends finding that the proposed local additions and alterations amendments to the 2022 California Energy Code to be cost-effective and consume less energy than otherwise permitted by Title 24, Part 6. The following additional detail is included for transparency and to facilitate the California Energy Commission’s review of the City’s cost effectiveness findings:
 The City’s requirement that major additions or alterations install energy efficiency measures includes at least five cost effective measure packages:
o Package 1, installing the efficiency measure of R-30 Floor Insulation would save energy relative to the base code and would achieve a benefit to cost ratio of 1.4 on an on-bill basis.
o Package 2, installing the efficiency measure of R-19 Floor Insulation would save energy relative to the base code and would achieve a benefit to cost ratio of 1.4 on an on-bill basis.
o Package 3 to installing a Heat Pump Water Heater (HPWH), would save energy relative to the base code and would achieve a benefit to cost ratio of 1.6 on an LSC basis.
o Package 4, Heat Pump Space Heater, would also save energy relative to the base code and would achieve a benefit to cost ratio of 4.2 on an LSC basis.

3 The California Energy Codes and Standards Statewide Utility Program publishes cost effectiveness reports and accompanying study data at: https://localenergycodes.com/content/resources 4 For more detail, see section 2.1.3 of
https://localenergycodes.com/download/1266/file_path/fieldList/2022%20Nonres%20New%20Construction%20C ost-eff%20Report.pdf

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o Package 5 to install PV + Electric Ready Pre-Wiring would also save energy relative to the base code and would achieve a benefit to cost ratio of 1.4 on an on-bill basis.

Available Resources for Lower Cost Renovations
Many of the compliance measures have rebates, incentives, and tax credits associated with them which could substantially reduce the cost of compliance. Financial resources and technical assistance include:
 Central Coast Community Energy provides the Electrify Your Home program, which provides rebates and incentives to contractors completing heat pump hot water heater ($4,600 to $6,385), heat pump HVAC ($1,500 to $5,000), and associated electrical work (lesser of $2,000 or 50% of total project cost).  3C-REN provides single family incentives for energy savings associated with energy efficiency projects. Incentives are available for heat pump hot water heaters ($1,500 to $6,000) and heat pump HVAC ($2,000 to $9,000).  The Inflation Reduction Act added new provisions to the federal tax code that allows for tax credits for certain energy efficiency measures (30% off of total project cost, up to $1,200), heat pump hot water heaters (30% up to $2,000), heat pump HVAC systems (30% off of total project cost up to $2,000) and rooftop solar generation systems (30% off of total project cost with no maximum). 5  The Energy Code Coach program offered by 3C-REN provides no-cost personalized support to help building professionals and local government staff navigate the Energy Code, including local amendments adopted by the City. The City will work with 3C-REN staff to develop a help desk support service to answer applicant questions about compliance with the Energy Efficient Renovations Policy. This service will be hosted by 3C-REN at no-cost to the City.

Previous Council or Advisory Body Action
 August 2020 – Council adopted Resolution 11159 (2020 Series) which approved the Climate Action Plan for Community Recovery with the goal of community carbon neutrality by 2035 and a sub-goal of 50 percent reduction in emissions from existing buildings by 2030.
 December 2022 – Council adopted Resolution No. 11381 (2022 Series) reaffirming these goals and created a work program for fiscal years 2023-27, including Green Buildings Action 2.1.E, which directs staff to, “Develop an equitable framework for requiring electrification retrofits and develop cost effective building electrification policies for additions and alterations.”
 June 2023 – Council adopted the 2023-25 Financial Plan Climate Action Major City Goal 4.1.i, which directs staff to conduct a study session, and pending Council direction, develop an equitable framework for cost effective building electrification retrofit policies, with an initial focus on additions and alterations, as called for by CAP Green Buildings Task 2.1.E.

5 The 3CE, 3CREN, and tax credit incentives may be “stacked” and used together to cover 100% of project costs.

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 December 2023 – Council receives a report and presentation from staff regarding existing building energy retrofit policy options and provides direction to staff to return in Spring of 2024 with a draft policy related to energy efficiency requirements in major residential additions and alterations.

Public Engagement
Ahead of the December study session on existing buildings, staff conducted numerous public engagement activities. Since receiving Council strategic direction to develop an additions and alterations retrofit policy at that study session, staff have conducted the additional following outreach:
 Community Workshops and Survey. At the December 2023 study session, staff received direction to reach out directly to neighborhood groups. Following this direction, staff held two workshops in March of 2024 – one at Laguna Middle School and one at the downtown library. Staff reached out directly to community members associated with neighborhood groups including Residents for Quality Neighborhoods, Alta Vista, and Save Our Downtown. Staff requested that these community members forward meeting invites directly to their membership and worked with them to facilitate ease of access. Approximately 15 community members attended across the two meetings and provided substantial feedback that led to direct changes in the policy, including the addition of solar as a compliance measure, the replacement of a percentage metric for the definition of major alteration with a square foot metric, removing accessory dwelling units as triggers for existing building retrofits, and introducing flexibility for an applicant to identify where a future water heater or HVAC system might be placed as they work to comply with the proposed electric readiness requirements.

To support broader access to the workshop, staff also developed an Open City Hall exercise that included a narrated version of the workshop presentation; 284 community members visited, leaving 112 comments.6 Critical feedback included concerns about administrative complexity and potential impacts on other Building Department related activities, the potential for negatively impacting housing costs and affordability, disagreements about the importance of local climate action, and concerns about unintended consequences. Other feedback included general support for the policy with recommendations to make compliance as streamlined as possible, facilitate access to rebates and incentives, and ensure that the exemptions are as clear as possible.
 Chamber of Commerce. Staff presented to the Legislative Action Committee on April 11 to provide detail about the proposed energy efficient renovations policy described in this Council Agenda Report.

6 Comments from the exercise are archived and available for viewing at:
https://communityfeedback.opengov.com/portals/sanluisobispoca/Issue_13269

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 Climate Coalition. City Staff presented to the Climate Coalition Executive Director on April 22 and multiple representatives from the Climate Coalition attended the community workshops as described above.
 Central Coast Community Energy. City staff met with 3CE staff to discuss the ongoing availability of relevant rebates and incentives. As part of this outreach, Building Department staff also met with 3CE Program Staff to identify ways to streamline rebate applications and as a result, are currently working on integrating 3CE’s rebate process into relevant online permit applications.  One-on-One Discussions with Contractors. Staff met with several contractors, ranging from large corporate-owned to small family-owned companies. Staff found that the regional workforce generally has the capacity and capability to install the compliance measures included in staff’s proposed policy.  Construction Board of Appeals: Staff presented the proposed policy with a special focus on exemptions at an informational presentation to the Construction Board of Appeals on April 25. Board member questions focused on issues related to electrical panel capacity for proposed improvements, future statewide electric appliance regulations, and the applicability of Accessory Dwelling Units.  Developer’s Roundtable: Staff presented the proposed policy and received feedback from the Developer’s Roundtable on May 2. Participants primarily asked clarifying questions and one participant asked for the City to share more information about available rebates and incentives.

Policy Implementation Considerations
The policy would be implemented via an additional intake form required at time of building permit submittal. Building staff would review the application for consistency with the policy and field verification would happen as part of the typical inspection process. To limit the impact on Building Department staff, the Office of Sustainability proposes teaming with 3C-REN’s “Energy Code Coach” Program to spend June through December of 2024 developing project intake forms, developing staff guidance curriculum and training, convening Code Coach staff and Building Department staff for internal training, and developing applicant communications and public facing guidance documents. In addition, 3C-REN’s Energy Code Coach will provide a technical assistance hotline starting on January 1, 2025, to answer basic applicant questions about the policy, provide applicants information about common compliance pathways, connect applicants to rebates and incentives, and answer City staff questions about compliance during field verification. City staff have worked with 3C-REN staff to confirm the availability of and support for this scope of work.

Staff recommends that the City Council consider the following during discussion of the draft ordinance:

1. Based on direction provided by Council at the study session, the ordinance addresses single family additions and remodels over a certain size. According to past permit records there are approximately 15 projects of this size and scope per year – most of which already complied with the provisions of the policy. It is

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therefore expected that approximately 5-10 projects would be required to add energy efficiency measures due to this ordinance per year, but the total would increase over time and contribute to the City’s goal of carbon neutrality by 2035.

Staff estimate that compliance would reduce covered buildings greenhouse gas emissions by up to 40%. Due to the fact that this ordinance addresses additions and alterations to single-family homes it is not likely that it will impact developers.

Building and Safety staff have reported that the types of projects generally completed in the City that would be subject to this ordinance are homeowners and those that purchase houses to flip (although this has become a less common practice lately).

2. As this policy change is occurring outside the regular building code update cycle, it will require re-adoption during the building code update ahead of January 2026 as is also the case with energy reach code provisions for new buildings and other local amendments made in other parts of the building code.

3. As with any change to regulations or codes, this policy will require some additional training for staff and assistance/education for the public as they learn the new requirements. This may marginally increase the amount of time required to review projects that are subject to the regulations, especially early in the implementation of the new ordinance when staff and the public are adjusting to the new requirements.

4. Energy efficiency retrofits for multi-family projects and for the main properties of attached Accessory Dwelling Units (ADUs) were initially considered as part of the policy development process. Multi-family projects were removed from staff’s recommendation due to an extended delay in the statewide cost effectiveness study for this property type. Accessory Dwelling Units were removed due to extensive community concern about potential impacts to housing production. In both cases, staff believes there are cost effective ways to include electric readiness and energy efficiency measures in these projects and recommends reevaluating the feasibility of including these types of projects as part of the 2026 Energy Code update.

SCHEDULE AND NEXT STEPS
Should Council approve staff’s recommendations, work would proceed on the timeline provided in Table 2 below.

Table 2. Schedule and Next Steps
Task Timeframe
Second reading of the draft Ordinance (Attachment A)
and submittal to the California Energy Commission. June 2024 Receive approval from the California Energy
Commission September-October 2024
Develop implementation forms, training, and help desk
services. July – December 2024
Policy goes into effect January 1, 2025

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CONCURRENCE
The Community Development Department and City Attorney’s Office concurs with this report.

ENVIRONMENTAL REVIEW
Staff’s recommendations are found to be exempt from CEQA under the general rule, 15061(b)(3), because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Further, this ordinance is also exempt from CEQA under the categorical exemptions in Section 15308 of the CEQA Guidelines in that the proposed ordinance would institute regulatory requirements intended to protect the environment and natural resources.

FISCAL IMPACT
Budgeted: Yes Budget Year: 2023-24
Funding Identified: Yes
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fees
Other:

Total $ $ $ $
The reach code requirements will be implemented through the building permit review process as described in the Policy Implementation section above. There may be costs associated with training staff and providing additional support to the community during the implementation of this program. If implementation of this program impacts time required to review permit plans, then fees for review of building permit plans may increase to absorb the cost, but any impacts are expected to be marginal. Some of this additional work can be directly supported by the 3C-REN Energy Code Coach Program, which provides technical support for code interpretation. Funded under the auspices of the California Public Utilities Commission, Energy Code Coach is free to the user and can be accessed at no cost by project applicants and City staff.

Item 7b

ALTERNATIVES

1. Council could decide not to adopt the ordinance. Staff does not recommend this alternative as the Policy is supportive of achieving the goal of reducing emissions from existing buildings in half by 2030.

2. Council could provide direction to staff to continue to work on the ordinance to explore the inclusion of new ADUs and multifamily units. Upon receiving this direction, staff would continue to work on the policy and return at a later date with options to address multi-family units and ADUs.

3. Council could provide direction on program specifics including definitions, compliance measures, exemptions, and effective date. Staff requests that Council provide specific direction on proposed changes.

4. Council could provide direction to delay reach code adoption to coincide with the 2025 California Building Code update. The 2025 code would be adopted in late 2025 and would go into effect in 2026, which would delay implementation by one year.

ATTACHMENTS
A - Draft Ordinance Adopting the Energy Efficient Renovations Policy B - 2024 Single Family Cost-Effectiveness Study

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ORDINANCE NO. _____ (2024 SERIES)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, ADOPTING LOCAL AMENDMENTS TO PART 6

OF THE BUILDING CONSTRUCTION AND FIRE PREVENTION CODE,
2023
WHEREAS, greenhouse gas accumulation in the atmosphere as the result of human activity is the primary cause of the global climate crisis; and WHEREAS, in California alone, the initial impacts of climate change have resulted in unprecedented disasters with tremendous human, economic, and environmental costs and;
WHEREAS, the Intergovernmental Panel on Climate Change estimates that global emissions need to be reduced by 45 percent from 2010 levels by 2030, and 100 percent by 2050 to prevent global catastrophe; and
WHEREAS, the State of California enacted Assembly Bill (AB) 1279 to require statewide carbon neutrality "as soon as possible," but no later than 2045; and WHEREAS, City of San Luis Obispo residents and businesses have repeatedly identified climate action as a top community priority; and WHEREAS, Resolution 11159 (2020 Series) adopts the City of San Luis Obispo Climate Action Plan for Community Recovery, which includes a communitywide goal of carbon neutrality by 2035 and sector specific goal of reducing emissions from existing buildings by half by 2030; and
WHEREAS, Resolution 11381 (2022 Series) reaffirmed these communitywide and sector specific goals; and
WHEREAS, the inventoried greenhouse gas emissions in the City of San Luis Obispo come from a variety of sources, primarily transportation and energy use in buildings and facilities; and
WHEREAS, in order to achieve carbon neutrality, existing sources of greenhouse gas emissions need to be substantially reduced or eliminated; and WHEREAS, Public Resources Code Section 25402.1 (h)(2) allows local agencies to adopt local amendments that are cost-effective and that result in buildings that use less energy than would otherwise be required by the California Energy Code; and

Ordinance No. _____ (2024 Series) Page 2
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WHEREAS, the California Energy Codes and Standards Statewide Utility Program, has determined specific modifications to the 2022 State Energy Code for each climate zone that are cost-effective; and that such modifications will result in designs that consume less energy than they would under the 2022 State Energy Code; and WHEREAS, staff has reviewed the “2022 Code Cycle: Custom Cost Effectiveness Analysis - City of San Luis Obispo” existing building cost-effectiveness study, and finds it sufficient to illustrate compliance with the requirements set forth under California Administrative Code Chapter 10-106; and
WHEREAS, based on these studies, the City finds the proposed local amendments to the 2022 California Energy Code to be cost-effective and consume less energy than permitted by Title 24, Part 6; and
WHEREAS, the 2022 California Energy Code offers compliance options that were established through the public rulemaking process of the code update; and WHEREAS, the Council expressly declares that the proposed amendments to the Energy Code are reasonably necessary because of local climatic, topological, and geological conditions; and
WHEREAS, the requirements specified in this Ordinance were reviewed via public comment and through a publicly noticed public hearing process.

NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo as follows:

SECTION 1. Purpose. It is the purpose and intent of this Ordinance to establish standards for single-family residential retrofits including major additions and alterations that exceed minimum 2022 Title 24 Part 6 requirements.

SECTION 2. Adoption. The local amendments to Part 6 of the City of San Luis Obispo Building Construction and Fire Prevention Code, 2023 (SLOMC Section

15.02.060) as specified in Exhibit A, are hereby adopted by the City of San Luis Obispo to be codified under Chapter 15.02.060 and Chapter 15.04.065. The Council hereby adopts the recitals herein as separate and additional findings of fact in support of adoption of the ordinance.

SECTION 3. Severability. If any word, phrase sentence part, section, subsection or other portion of this amendment or any application thereof to any person or circumstance is declared void, unconstitutional, or invalid for any reason, then such word, phrase, sentence, part, section, subsection, or other portion, or the prescribed application thereof, shall be severable, and the remaining provisions of this amendment, and all applications thereof, not having been declared void, unconstitutional or invalid, shall remain in full force and effect.

Ordinance No. _____ (2024 Series) Page 3
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SECTION 5. Findings. The City Council finds that each of the changes or modifications to measures referred to therein are reasonably necessary because of local climatic, geological, or topographical conditions in the area encompassed by the boundaries of the City of San Luis Obispo, and the City Council adopts the following findings in support of local necessity for the changes or modifications:

1. San Luis Obispo is situated along a wildland-urban interface and has been identified as a Community at Risk from wildfire and is extremely vulnerable to wildfires and firestorms, and human activities releasing greenhouse gases into the atmosphere cause increases in worldwide average temperature, drought conditions, vegetative fuel, and length of fire seasons- contributing to the likelihood and consequences of fire.

2. The City of San Luis Obispo is situated at the base of a watershed of the Santa Lucia Mountains and flooding of San Luis, Chorro, Stenner, Old Garden, and Brizzolara Creeks results in conditions rendering fire department vehicular traffic unduly burdensome or impossible, as witnessed in major floods that occurred in 1952, 1961, 1969, 1973, 1978, 1982, 1995, and 2023. Furthermore, flood conditions described above create the potential for overcoming the ability of the fire department to aid or assist in fire control, evacuations, rescues and other emergency task demands inherent in such situations. The resulting overburdening of fire department personnel may cause a substantial or total lack of protection against fire for the buildings and structures located in the City of San Luis Obispo. The afore-described conditions support the imposition of fire protection requirements greater than those set forth in the California State Building Standards Code and support the imposition of more restrictive requirements than set forth in the California Energy Code for the purpose of reducing the City's contributions to Greenhouse Gas Emissions resulting in a warming climate and related severe weather events.

3. The aforementioned flood and rain events result in conditions wherein stormwater can inundate the wastewater treatment system as witnessed in major floods that occurred in 1952, 1961, 1969, 1973, 1978, 1982, and 1995.

Furthermore, rain events and flood conditions described above create a condition referred to as Inflow and Infiltration (I/I) that allow rain and flood waters to flow and/or seep into the wastewater system and overcome the ability of the wastewater collection system and Water Reclamation Facility (WRF) to convey and treat sewage. The resulting overburdening of the wastewater system can result in threats to public health, public and private property and water quality and violations and fines from the State of California, the Environmental Protection Agency (EPA) or others. To the extent that climate change has the potential to make these conditions worse, more restrictive Energy Code requirements to achieve reduced greenhouse gas emissions are necessary.

Ordinance No. _____ (2024 Series) Page 4
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4. Seasonal climatic conditions during the late summer and fall create numerous serious difficulties in the control and protection against fire situations in the City of San Luis Obispo. The hot, dry weather in combination with Santa Lucia (offshore) winds frequently results in wildland fires in the brush-covered slopes on the Santa Lucia Mountains, San Luis Mountain, and the Irish Hills areas of the City of San Luis Obispo. The aforementioned areas surround the City.

When a fire occurs in said areas, such as occurred in 1985 when the Los Pilitas fire burned six days and entered the City and damaged many structures, the entirety of local fire department personnel is required to control, monitor, fight and protect against such fire situations in an effort to protect life and preserve property and watershed land. The same climatic conditions may result in the concurrent occurrence of one or more fires in the more populated areas of the City without adequate fire department personnel to protect against and control such a situation. Therefore, the above-described findings support the imposition of measures to increase the efficiency of existing buildings in the City to reduce greenhouse gas emissions.

5. Failure to address and substantially reduce greenhouse gas emissions creates an increased risk to the health, safety, and welfare of City residents.

6. The standards imposed by this Ordinance are necessary because of local climatic, geological, or topographical conditions evidenced above and are costeffective, as supported by the “2022 Code Cycle: Custom Cost Effectiveness Analysis - City of San Luis Obispo” cost effectiveness study prepared by the California Energy Codes and Standards Statewide Utility Program. Specifically, the City finds that there are at least five cost effective measure packages:
 Package 1, installing the efficiency measure of R-30 Floor Insulation would save energy relative to the base code and would achieve a benefit to cost ratio of 1.4 on an on-bill basis.
 Package 2, installing the efficiency measure of R-19 Floor Insulation would save energy relative to the base code and would achieve a benefit to cost ratio of 1.4 on an on-bill basis.
 Package 3 to installing a Heat Pump Water Heater (HPWH), would save energy relative to the base code and would achieve a benefit to cost ratio of 1.6 on a “Long-term System Cost” (LSC basis).
 Package 4, Heat Pump Space Heater, would save energy relative to the base code and would achieve a benefit to cost ratio of 4.2 on an LSC basis.  Package 5 to install PV + Electric Ready Pre-Wiring would save energy relative to the base code and would achieve a benefit to cost ratio of 1.4 on an on-bill basis.

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SECTION 6. CEQA. This ordinance is categorically exempt from CEQA because it is an action taken by a regulatory agency for the purpose of protecting the environment (CEQA Guidelines Section 15308). In addition, this ordinance is exempt from CEQA under the general rule, 15061(b)(3), on the grounds that these standards are more stringent than the State energy standards, there are no reasonably foreseeable adverse impacts, and there is no possibility that the activity in question may have a significant effect on the environment. The following findings are made in support of these determinations:

1. The purpose of the implementation of a Reach Code is to reduce the amount of greenhouse gas emissions in the City of San Luis Obispo that are produced from buildings.

2. The Reach Code approval process requires that the City determines that the local standards will require buildings to use no more energy than current statewide requirements. Furthermore, the California Energy Commission approval process requires that the City make the findings as part of its approval process. Therefore, the Reach Code standards can only go into effect if they protect the environment by making buildings more efficient.

SECTION 7. Violations. Violation of the requirements of this Ordinance shall be considered, at the City’s election, an infraction of the City of San Luis Obispo Municipal Code punishable by all sanctions prescribed in Chapter 1.12, or an administrative violation punishable as provided under Chapter 1.24.

SECTION 8. Effective Date. Pending approval by the California Energy Commission, this Ordinance shall be effective on January 1, 2025.

Ordinance No. _____ (2024 Series) Page 6
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SECTION 9. Ordinance Summary. A summary of this ordinance, together with the names of Council members voting for and against, shall be published at least five (5) days prior to its final passage, in The New Times, a newspaper published and circulated in this City. This ordinance shall go into effect at the expiration of thirty (30) days after its final passage.

INTRODUCED on the ____ day of _____ 2024, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the ____ day of ____, 2024, on the following vote:

AYES:

NOES:

ABSENT:
___________________________
Mayor Erica A. Stewart
ATTEST:
_______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington, City Clerk

Ordinance No. _____ (2024 Series) Page 7
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Exhibit A
Section 15.02.060
Amend Section 15.020.060 to read as follows:

The City of San Luis Obispo hereby adopts the 2022 California Energy Code as Part 6 of the San Luis Obispo Building Construction and Fire Prevention Code, 2023. Except as otherwise provided herein, or as later amended in Section

15.04.060 and 15.04.065, or affected by San Luis Obispo Health and Safety Code Chapter 8.11, Part 6 of the San Luis Obispo Building Construction and Fire Prevention Code, 2023, shall be as published in the California Energy Code, 2022 Edition, and as copyrighted by the California Building Standards Commission, California Code of Regulations, Title 24, Part 6, including all of its tables, indices, appendices, addenda and footnotes. Said California Energy Code is hereby referred to and by such reference is incorporated herein as if fully set forth.

Section 15.04.065
AMENDMENTS – ENERGY STANDARDS – ADDITIONS AND ALTERATIONS A. Adoption of Codes and Applicability
The effective date of this ordinance shall be January 1, 2025 and is applicable to existing single family residential buildings. The amendments contained in

15.04.065 do not apply to repairs to buildings.

B. Add the following definitions to Subchapter 1, Section 100.1(b):

MAJOR ADDITION is any change to an existing building that increases conditioned floor area by 500 or more square feet in a one-year period.

MAJOR ALTERATION is any construction or renovation to an existing structure other than a repair or alteration whose work area covers 500 or more square feet in a one-year period. A project that consists only of roof and/or window replacement is not considered a Major Alteration.

WORK AREA That portion or portions of a building consisting of all reconfigured spaces as indicated on the construction documents. Work area excludes other portions of the building where incidental work entailed by the intended work must be performed and portions of the building where work not initially intended by the owner is specifically required by this code.

C. Amend Section 150.0 SINGLE-FAMILY RESIDENTIAL BUILDINGS – MANDATORY FEATURES AND DEVICES to read as follows:

Single-family residential buildings shall comply with the applicable requirements of Sections 150.0(a) through 150.0(w).

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D. Add new Section 150(w) to read as follows:
(w) Mandatory Requirements for Existing Building Additions and Alterations.

Existing Building Additions and Alterations shall meet the requirements of Items 1 through 4 below, as applicable:

1. Major addition. Any Major Addition shall install a set of measures from the Measure Menu Table, Table 150.0-I to achieve a total score that is equal to or greater than 8. In addition, all mandatory measures listed in Table 150.0-I shall be installed. Measure verification shall be explicitly included as an addendum to the Certificate of Compliance to be filed pursuant to 2022 Title 24 Section 10-103. Installed measures shall meet the specifications in Table 150.0-J.

2. Major alteration. Any major alteration shall install a set of measures from the Measure Menu Table, Table 150.0-I to achieve a total score that is equal to or greater than 8. In addition, all mandatory measures listed in Table 150.0-I shall be installed. Measure verification shall be explicitly included as an addendum to the Certificate of Compliance to be filed pursuant to 2022 Title 24 Section 10-103. Installed measures shall meet the specifications in Table 150.0-J.

3. Combination major addition and alteration. Any project that includes an addition and alteration that has a work area equal to or greater than 500 square feet shall install a set of measures from the Measure Menu Table, Table 150.0-I to achieve a total score that is equal to or greater than 8. In addition, all mandatory measures listed in Table 150.0-I shall be installed. Measure verification shall be explicitly included as an addendum to the Certificate of Compliance to be filed pursuant to 2022 Title 24 Section 10-103. Installed measures shall meet the specifications in Table 150.0-J.

4. Electric Readiness. Any major addition, major alteration, or combination major addition and alteration that includes a new electrical panel and electrical service upgrade to 200A or more shall include electric readiness components per 150.0(n)1(A)-(B) and 150.0(t) Exception 1 to Section 150.0(w): The project is the result of a repair as defined by Title 24 Part 2 Section 202.

Exception 2 to Section 150.0(w): If compliance costs exceed 10% of total project valuation, or due to conditions specific to the project, it is technically infeasible to achieve compliance through any available set of measures, the applicant may request an exemption as set forth below. In applying for an exemption, the burden is on the applicant to show hardship or infeasibility.

Ordinance No. _____ (2024 Series) Page 9
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(1) Application. Based on the following, the applicant shall identify in writing the specific requirements of the standards for compliance that the project is unable to achieve and the circumstances that make it a hardship or infeasible for the project to comply with this chapter. The applicant may not petition for relief from any requirement of the 2022 California Energy Code (Title 24, Part 6) and referenced standards, or the 2022 California Green Building Standards (Title 24, Part 11) of the California Building Standards Code. Circumstances that constitute hardship or infeasibility shall include one of the following:
i. That the cost of achieving compliance is disproportionate to the overall cost of the project (i.e., compliance exceeds 10% of total project cost);
ii. That it is technically infeasible to achieve compliance through any available set of measures.
iii. That strict compliance with these standards would create or maintain a hazardous condition(s) and present a life safety risk to the occupants.
(2) Granting of exemption. If the chief building official determines that it is a hardship or infeasible for the applicant to fully meet the requirements of this chapter and that granting the requested exemption will not cause the building to fail to comply with the 2022 California Energy Code (Title 24, Part 6) and referenced standards, or the 2022 California Green Building Standards (Title 24, Part 11) of the California Building Standards Code, the chief building official shall determine the minimum feasible threshold of compliance reasonably achievable for the project. If an exemption is granted, the applicant shall be required to comply with this chapter in all other respects and shall be required to achieve the threshold of compliance determined to be achievable by the chief building official. (3) Denial of exemption. If the chief building official determines that it is reasonably possible for the applicant to fully meet the requirements of this chapter, the request shall be denied, and the applicant shall be notified of the decision in writing. The project and compliance documentation shall be modified to comply with the standards for compliance.
(4) Appeal. Any aggrieved applicant or person may appeal the determination of the chief building official regarding the granting or denial of an exemption or compliance with any other provision of this chapter. An appeal of a determination of the chief building official shall be filed in writing.

Exception 3 to Section 150.0(w): If the dwelling unit has previously installed measures from the Measure Menu, Table 150.0-I, and compliance can be demonstrated to the building official, then these measures shall not be required to be newly installed.

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Exception 4 to Section 150.0(w): The applicant may request an exemption to any requirements of this chapter which would impair the historic integrity of any building listed on a local, state, or federal register of historic structures, as determined by the chief building official and as regulated by the California Historic Building Code (Title 24, Part 8). In making a determination of exemption, the chief building official may require the submittal of an evaluation by an architectural historian or similar expert.

Exception 5 to Section 150.0(w): An alteration that consists solely of seismic safety improvements.

Exception 6 to Section 150.0(w): An alteration that consists solely of roof and/or window projects.

Exception 7 to Section 150.0(w): When an addition or alteration results in the creation of a new residential unit, the square footage of that unit shall not be counted towards the 500 square foot “Major” addition, alteration, or addition and alteration threshold.

D. Add new Table 150.0-I to read as follows:

Table 150.0-I: Measure Menu
Measures
Target Score
8 E1 - LED lamps and Exterior Photocells Mandatory
E2 - Water Heating Package 1
E3 - Air Sealing 1
E4 - R-49 Attic Insulation 2
E5 - Duct Sealing 2
E6 - New Ducts + Duct Sealing 4
E7 - Windows 3
E8 - R-19 Floor Insulation 8
E9 - R-30 Floor Insulation 10
E10 - Heat Pump Water Heater (HPWH) 12
E11 - Heat Pump Space Heater 11
ER1 - Solar PV + Electric Ready Pre-Wire 13
Note: the measures in the Measure Menu table shall conform to the specifications in Table 150.0-J

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E. Add new Table 150.0-J to read as follows:

Table 150.0-J: Measure Specifications
ID Measure Specification
Energy Efficiency Measures
E1 Lighting Measures – Replace all interior and exterior screw-in incandescent, halogen, and compact fluorescent lamps with LED lamps.

Install photocell controls on all exterior lighting luminaires consistent with current Title 24 requirements for new single family residential buildings. Alternative means of exterior lighting timing controls, including smart home devices, may be approved.

E2 Water Heating Package: Add exterior insulation meeting a minimum of R-6 to existing storage water heaters. Insulate all accessible hot water pipes with pipe insulation a minimum of ¾ inch thick. This includes insulating the supply pipe leaving the water heater, piping to faucets underneath sinks, and accessible pipes in attic spaces or crawlspaces. Upgrade fittings in sinks and showers to meet current California Green Building Standards Code (Title 24, Part 11) Section 4.303 water efficiency requirements. Water heaters 20 gallons or less, or water heaters that are not able to add exterior insulation may not take credit for this measure.

E3 Air Sealing: Seal all accessible cracks, holes, and gaps in the building envelope at walls, floors, and ceilings. Pay special attention to penetrations including plumbing, electrical, and mechanical vents, recessed can light luminaires, and windows. Weather-strip doors if not already present. Compliance shall be demonstrated with blower door testing conducted by a certified HERS Rater no more than three years prior to the permit application date that either: a) shows at least a 30 percent reduction from pre-retrofit conditions; or b) shows that the number of air changes per hour at 50 Pascals pressure difference (ACH50) does not exceed ten for Pre-1978 vintage buildings, seven for 1978 to 1991 vintage buildings and five for 1992-2010 vintage buildings. If combustion appliances are located within the pressure boundary of the building, conduct a combustion safety test by a professional certified by the Building Performance Institute in accordance with the ANSI/BPI-1200-S-2017 Standard Practice for Basic Analysis of Buildings, the Whole House Combustion Appliance Safety Test Procedure for the Comfortable Home Rebates Program 2020 or the California Community Services and Development Combustion Appliance Safety Testing Protocol.

E4 R-49 Attic Insulation: Attic insulation shall be installed to achieve a weighted assembly U-factor of 0.020 or insulation installed at the ceiling level shall have a thermal resistance of R-49 or greater for the insulation alone. Recessed downlight luminaires in the ceiling shall be covered with insulation to the same depth as the rest of the ceiling. Luminaires not rated for insulation contact must be replaced or fitted with a fire-proof cover that allows for insulation to be installed directly over the cover. In buildings where existing R30 is present and existing recessed downlight luminaires are not rated for insulation contact, insulation is not required to be installed over the luminaires.

E5 Duct Sealing: Air seal all space conditioning ductwork to meet the requirements of the 2022 Title 24 Section 150.2(b)1E. The duct system must be tested by a HERS Rater no more than three years prior to the alteration or addition permit application date to verify the duct sealing and confirm that the requirements have been met. This measure may not be combined with the New Ducts and Duct Sealing measure in this Table. Buildings without ductwork or where the ducts are in conditioned space may not take credit for this measure.

E6 New Ducts and Duct Sealing: Replace existing space conditioning ductwork with new R-8 ducts that meet the requirements of 2022 Title 24 Section 150.0(m)11. This measure may not be combined with the Duct Sealing measure in this Table. To qualify, a preexisting measure must have been installed no more than three years before the alteration or addition permit application date.

E7 Windows: Replace at least 50% of existing windows with high performance windows with an area-weighted average U-factor no greater than 0.30.

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E8 R-19 Floor Insulation: Raised-floors shall be insulated such that the floor assembly has an assembly U-factor equal to or less than U0.037, or shall be insulated between wood framing with insulation having an R-value equal to or greater than R-19.

E9 R-30 Floor Insulation: Raised-floors shall be insulated such that the floor assembly has an assembly U-factor equal to or less than U0.028, or shall be insulated between wood framing with insulation having an R-value equal to or greater than R-30.

E10 Heat Pump Water Heater (HPWH): Replace existing electric resistance or natural gas storage water heater with a heat pump water heater.

E11 Heat Pump Space Heater: Replace all existing gas and electric resistance space heating systems with an electric-only heat pump system.

Solar PV and Electric-Readiness Measures
ER1 PV and Electric Ready Pre-Wire: Install a solar PV system that meets the requirements of 2022 Title 24 Section 150.1(c)14.

In addition to the solar PV system, Include electric readiness components per 150.0(n)1(A)-(B) and 150.0(t) and one of:

A. Energy Storage Systems (ESS) Ready, as specified in Section 150.0(s), or B. EV Charger Ready as specified in the California Green Building Code, Title 24, Part 11, Section A4.106.8.1,which otherwise applies to new construction.

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F. Modify Section 150.2(a) ENERGY EFFICIENCY STANDARDS FOR ADDITIONS AND ALTERATIONS TO EXISTING SINGLE FAMILY RESIDENTIAL BUILDINGS to read as follows:

Additions. Additions to existing single-family residential buildings shall meet the requirements of Sections 110.0 through 110.9, Sections 150.0(a) through (n), (p), (q), (w) and either Section 150.2(a)1 or 2.

G. Modify Section 150.2(b) ENERGY EFFICIENCY STANDARDS FOR ADDITIONS AND ALTERATIONS TO EXISTING SINGLE FAMILY RESIDENTIAL BUILDINGS to read as follows:

Alterations. Alterations to existing single-family residential buildings or alterations in conjunction with a change in building occupancy to a single-family residential occupancy shall meet either Item 1 or 2 below.

1. Prescriptive approach. The altered component and any newly installed equipment serving the alteration shall meet the applicable requirements of Sections 110.0 through 110.9 and all applicable requirements of Sections 150.0(a) through (l), 150.0(m)1 through 150.0 (m)10, 150.0(p) through (q), and 150.0(w); and

2. Performance approach. The altered component(s) and any newly installed equipment serving the alteration shall meet the applicable requirements of Subsections A, B, and C below.
a. The altered components shall meet the applicable requirements of Sections 110.0 through 110.9, Sections 150.0(a) through (l), Sections 150.0(m)1 through 150.0 (m)10, Sections 150.0(p) through (q), and Section 150.0(w). Entirely new or complete replacement mechanical ventilation systems as these terms are used in Section 150.2(b)1L, shall comply with the requirements in Section 150.2(b)1L. Altered mechanical ventilation systems shall comply with the requirements of Section 150.2(b)1M. Entirely new or complete replacement space-conditioning systems, and entirely new or complete replacement duct systems, as these terms are used in Sections 150.2(b)1C and 150.2(b)1Diia, shall comply with the requirements of Sections 150.0(m)12 and 150.0(m)13.

Prepared by:

Frontier Energy, Inc
Misti Bruceri & Associates, LLC
Prepared for:

Kelly Cunningham, Codes and Standards Program, Pacific Gas and Electric Last modified: 2024/3/15
Revision: 1.0

Cost-Effectiveness Analysis: Central Coast Community Energy Legal Notice
This report was prepared by Pacific Gas and Electric Company and funded by the California utility customers under the auspices of the California Public Utilities Commission.

Copyright 2024, Pacific Gas and Electric Company. All rights reserved, except that this document may be used, copied, and distributed without modification.

Neither PG&E nor any of its employees makes any warranty, express or implied; or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any data, information, method, product, policy or process disclosed in this document; or represents that its use will not infringe any privately-owned rights including, but not limited to, patents, trademarks or copyrights.

Acronym List
3CE – Central Coast Community Energy
B/C – Benefit-to-Cost Ratio
CBECC - California Building Energy Code Compliance
CBSC - California Building Standards Commission
CEC - California Energy Commission
CZ – Climate Zone
GHG - Greenhouse Gas
IOU – Investor-Owned Utility
POU – Publicly Owned Utility
PG&E – Pacific Gas & Electric (utility)
SCE – Southern California Edison (utility)
SCG – Southern California Gas (utility)
SDG&E – San Diego Gas & Electric (utility)
SLO – San Luis Obispo
kWh – Kilowatt Hour
NPV – Net Present Value
PV - Solar Photovoltaic
TDV - Time Dependent Valuation
Title 24 – California Code of Regulations Title 24, Part 6 2022 CODE CYCLE:

Custom Cost Effectiveness Analysis:

Central Coast Community Energy
Last modified: 2022/11/03
Revision: 1.0

Cost-Effectiveness Analysis: Central Coast Community Energy

TABLE OF CONTENTS
1 Introduction................................................................................................................................................................5 2 Methodology and Assumptions...............................................................................................................................6

2.1 Reach Codes ........................................................................................................................................................................ 6

2.1.1 Benefits......................................................................................................................................................................... 6

2.1.2 Costs............................................................................................................................................................................. 6

2.1.3 Metrics .......................................................................................................................................................................... 6

2.1.4 Utility Rates................................................................................................................................................................... 7

2.2 Greenhouse Gas Emissions ................................................................................................................................................. 7 3 Prototype Designs and Measure Packages............................................................................................................8

3.1 Prototype Characteristics...................................................................................................................................................... 8 4 Results......................................................................................................................................................................10

4.1 Pre-1978 Vintage................................................................................................................................................................ 11

4.2 1978-1991 Vintage.............................................................................................................................................................. 14

4.3 1992-2010 Vintage.............................................................................................................................................................. 17

4.4 Sensitivities......................................................................................................................................................................... 20 5 Summary ..................................................................................................................................................................21 6 References ...............................................................................................................................................................23 7 Appendices ..............................................................................................................................................................24

7.1 Map of California Climate Zones......................................................................................................................................... 24

7.2 Utility Rate Schedules......................................................................................................................................................... 25

7.2.1 Central Coast Community Energy – Electricity ........................................................................................................... 25

7.2.2 SoCalGas – Gas ......................................................................................................................................................... 31

7.2.3 Fuel Escalation Rates ................................................................................................................................................. 32

LIST OF TABLES
Table 1. Utility Tariffs for San Luis Obispo............................................................................................................................................ 7 Table 2: Residential Prototype Characteristics ..................................................................................................................................... 8 Table 3. Efficiency Characteristics for Three Vintage Cases ................................................................................................................ 9 Table 4: E-TOU-C Rate HPSH Single Family Cost-Effectiveness Summary Pre-1978 ...................................................................... 11 Table 5: E-TOU-C Rate HPWH Single Family Cost-Effectiveness Summary Pre-1978 ..................................................................... 11 Table 6: E-TOU-C Rate Envelope and Duct Measures Single Family Cost-Effectiveness Summary Pre-1978 ................................. 12 Table 7: E-Elec Rate Solar PV Single Family Cost-Effectiveness Summary Pre-1978 ...................................................................... 12 Table 8: E-Elec Rate HPSH Single Family Cost-Effectiveness Summary Pre-1978........................................................................... 13 Table 9: E-Elec Rate HPWH Single Family Cost-Effectiveness Summary Pre-1978.......................................................................... 13 Table 10: E-TOU-C Rate HPSH Single Family Cost-Effectiveness Summary 1978-1991.................................................................. 14 Table 11: E-TOU-C Rate HPWH Single Family Cost-Effectiveness Summary 1978-1991................................................................. 14

Cost-Effectiveness Analysis: Central Coast Community Energy Table 12: E-TOU-C Rate Envelope and Duct Measures Single Family Cost-Effectiveness Summary 1978-1991............................. 15 Table 13: E-Elec Rate Solar PV Single Family Cost-Effectiveness Summary 1978-1991.................................................................. 15 Table 14: E-Elec Rate HPSH Single Family Cost-Effectiveness Summary 1978-1991 ...................................................................... 16 Table 15: E-Elec Rate HPWH Single Family Cost-Effectiveness Summary 1978-1991 ..................................................................... 16 Table 16: E-TOU-C Rate HPSH Single Family Cost-Effectiveness Summary 1992-2010.................................................................. 17 Table 17: E-TOU-C Rate HPWH Single Family Cost-Effectiveness Summary 1992-2010................................................................. 17 Table 18: E-TOU-C Rate Envelope and Duct Measures Single Family Cost-Effectiveness Summary 1992-2010............................. 18 Table 19: E-Elec Rate Solar PV Single Family Cost-Effectiveness Summary 1992-2010.................................................................. 18 Table 20: E-Elec Rate HPSH Single Family Cost-Effectiveness Summary 1992-2010 ...................................................................... 19 Table 21: E-Elec Rate HPWH Single Family Cost-Effectiveness Summary 1992-2010 ..................................................................... 19 Table 22. Sensitivity Analysis Results for On-Bill NPV ....................................................................................................................... 20 Table 23. Electric Panel Upgrade Sensitivity [Pre-1978] .................................................................................................................... 20 Table 24: Comparison of 3CE and PG&E’s E-TOU-C Rates.............................................................................................................. 25 Table 25: Comparison of 3CE and PG&E’s E-Elec Rates .................................................................................................................. 25 Table 26: SoCalGas Monthly Gas Rate ($/therm) .............................................................................................................................. 31 Table 27: Real Utility Rate Escalation Rate Assumptions, CPUC En Banc and 2022 TDV Basis ...................................................... 32 Table 28: Real Utility Rate Escalation Rate Assumptions, 2025 LSC Basis ....................................................................................... 33

LIST OF FIGURES
Figure 1. Map of California climate zones........................................................................................................................................... 24

Cost-Effectiveness Analysis: Central Coast Community Energy 5 California Energy Codes & Standards | A statewide utility program 2024-03-15 1 Introduction
The California Codes and Standards (C&S) Reach Codes program provides technical support to local governments considering adopting a local ordinance (reach code) intended to support meeting local and/or statewide energy efficiency and greenhouse gas reduction goals. The program facilitates adoption and implementation of the code when requested by local jurisdictions by providing resources such as cost-effectiveness studies, model language, sample findings, and other supporting documentation.

The California Building Energy Efficiency Standards Title 24, Part 6 (Title 24) (CEC, 2019) is maintained and updated every three years by two state agencies: the California Energy Commission (the Energy Commission) and the Building Standards Commission (BSC). In addition to enforcing the code, local jurisdictions have the authority to adopt local energy efficiency ordinances—or reach codes—that exceed the minimum standards defined by Title 24 (as established by Public Resources Code Section 25402.1(h)2 and Section 10-106 of the Building Energy Efficiency Standards). Local jurisdictions must demonstrate that the requirements of the proposed ordinance are cost-effective and do not result in buildings consuming more energy than is permitted by Title 24. In addition, the jurisdiction must obtain approval from the Energy Commission and file the ordinance with the BSC for the ordinance to be legally enforceable.

This report is an addendum to the 2022 Single Family Retrofit Cost-effectiveness Study (Statewide Reach Codes Team, 2024) modified to accurately represent local conditions for San Luis Obispo (SLO) in California Climate Zone 5 and Central Coast Community Energy’s (3CE’s) service territory. The study analyzes cost-effective measure upgrades in existing single family buildings that exceed the minimum state requirements, the 2022 Building Energy Efficiency Standards, effective January 1, 2023. Local jurisdictions in California may consider adopting local energy ordinances to achieve energy savings beyond what will be accomplished by enforcing building efficiency requirements that apply statewide. This report was developed in coordination with the California Statewide Investor-Owned Utilities (IOUs) Codes and Standards Program, key consultants, and engaged cities—collectively known as the Statewide Reach Codes Team.

The methodology, prototype characteristics, and measure packages are retained from the main study referenced above except for the energy costs are calculated using local 3CE utility rates. Measure packages include upgrades in existing single family buildings that exceed the minimum state requirements. It evaluates efficiency measures such as adding insulation, replacing windows, and duct upgrades, fuel substitution measures that upgrade space heating and water heating to heat pumps, and solar photovoltaics (PV). A 1,665 square foot single family home prototype with an attached garage was evaluated in this study.

Local jurisdictions may also adopt ordinances that amend different Parts of the California Building Standards Code or may elect to amend other state or municipal codes. The decision regarding which code to amend will determine the specific requirements that must be followed for an ordinance to be legally enforceable. Although a cost-effectiveness study is only required to amend Part 6 of the CA Building Code, it is important to understand the economic impacts of any policy decision. This study documents the estimated costs, benefits, energy impacts and greenhouse gas emission reductions that may result from implementing an ordinance based on the results to help residents, local leadership, and other stakeholders make informed policy decisions.

Model ordinance language and other resources are posted on the C&S Reach Codes Program website at LocalEnergyCodes.com. Local jurisdictions that are considering adopting an ordinance may contact the program for further technical support at [email protected].

Cost-Effectiveness Analysis: Central Coast Community Energy 6 California Energy Codes & Standards | A statewide utility program 2024-03-15 2 Methodology and Assumptions

2.1 Reach Codes
This section describes the approach to calculating cost-effectiveness including benefits, costs, metrics, and utility rate selection.

2.1.1 Benefits
This analysis used two different metrics to assess the cost-effectiveness of the proposed upgrades. Both methodologies require estimating and quantifying the incremental costs and energy savings associated with each energy efficiency measure. The main difference between the methodologies is the way they value energy impacts:
• On-Bill: Customer-based lifecycle cost approach that values energy based upon estimated site energy usage and customer on-bill savings using electricity and natural gas utility rate schedules over a 30-year duration, accounting for a three percent discount rate and energy cost inflation per Appendix 7.2.3. • Long-term Systemwide Cost (LSC): Formerly known as Time Dependent Valuation (TDV) energy cost savings, LSC reflects the Energy Commission’s current LCC methodology, which is intended to capture the total value or cost of energy use over 30 years. This method accounts for the hourly cost of marginal generation, transmission and distribution, fuel, capacity, losses, and cap-and-trade-based CO2 emissions (California Energy Commission, 2023). This is the methodology used by the Energy Commission in evaluating costeffectiveness for efficiency measures in the 2025 Energy Code.

The Reach Codes Team performed energy simulations using the 2025 research version of the Residential California Building Energy Code Compliance software (CBECC).

2.1.2 Costs
The Reach Codes Team assessed the incremental costs and savings of the energy packages over the lifecycle of 30 years. Incremental costs represent the equipment, installation, replacement, and maintenance costs of the proposed measure relative to the 2022 Title 24 Standards minimum requirements or standard industry practices. The Reach Codes Team obtained measure costs from a contractor survey conducted in the summer of 2023.

2.1.3 Metrics
Cost-effectiveness is presented using net present value (NPV) and benefit-to-cost (B/C) ratio metrics. • NPV: The Reach Codes Team uses net savings (NPV benefits minus NPV costs) as the cost-effectiveness metric. If the net savings of a measure or package is positive, it is considered cost effective. Negative net savings represent net costs to the consumer. A measure that has negative energy cost benefits (energy cost increase) can still be cost effective if the costs to implement the measure are even more negative (i.e., construction and maintenance cost savings).
• B/C Ratio: Ratio of the present value of all benefits to the present value of all costs over 30 years (NPV benefits divided by NPV costs). The criteria for cost-effectiveness is a B/C greater than 1.0. A value of one indicates the savings over the life of the measure are equivalent to the incremental cost of that measure. A value greater than one represents a positive return on investment.

Improving the energy performance of a building often requires an initial investment. In most cases the benefit is represented by annual on-bill utility or LSC savings, and the cost by incremental first cost and replacement costs.

However, some packages result in initial construction cost savings (negative incremental cost), and either energy cost savings (positive benefits), or increased energy costs (negative benefits). In cases where both construction costs and energy-related savings are negative, the construction cost savings are treated as the benefit while the increased energy costs are the cost. In cases where a measure or package is cost-effective immediately (i.e., upfront

Cost-Effectiveness Analysis: Central Coast Community Energy 7 California Energy Codes & Standards | A statewide utility program 2024-03-15 construction cost savings and lifetime energy cost savings), B/C ratio cost-effectiveness is represented by “>1”.

Because of these situations, NPV savings are also reported, which, in these cases, are positive values.

2.1.4 Utility Rates
Table 1 summarizes the utility tariffs applied in this analysis. The standard tariff was applied in most cases. Homes with a heat pump service space or water heating in IOU territory are eligible for either the electrification or the standard tariff. In these cases, results are provided using both tariff options. The Net Billing Tariff (NBT) tariff was applied to homes with onsite generation (PV systems).

For a more detailed breakdown of the rates selected refer to Appendix 7.2 Utility Rate Schedules.

Table 1. Utility Tariffs for San Luis Obispo
Electric / Gas
Utility
Standard
Electric Tariff
Electrification
Tariffs
Tariffs
Required
Under NBT
Natural
Gas
Tariff
3CE / SoCalGas E-TOU Option C E-ELEC E-ELEC GR
The Reach Code Team applied the recently approved net billing tariff (NBT) rules for PV systems. NBT, also known as NEM-3, is the successor tariff to NEM 2.0. The rate paid for electricity exported to the grid is much lower under NBT than under NEM 2.0. The hourly export rates applied in this study were obtained from analysis conducted by Energy and Environmental Economics (E3) for the California Public Utilities Commission as part of the NEM revisit. 1 These
hourly export rates vary for each major IOU and by year, the 2024 export rate projections were used for this analysis.

Utility rates are assumed to escalate over time according to the assumptions from the CPUC 2021 En Banc hearings on utility costs through 2030 (California Public Utilities Commission, 2021a). Escalation rates through the remainder of the 30-year evaluation period are based on the escalation rate assumptions within the 2022 TDV factors. A second set of escalation rates were also evaluated to demonstrate the impact that utility cost changes have on costeffectiveness over time. This utility rate escalation sensitivity analysis, presented in Section 4.4 Sensitivities, was based on those used within the 2025 LSC factors (LSC replaces TDV in the 2025 code cycle) which assumed steep increases in gas rates in the latter half of the analysis period. Appendix 7.2.3 and the main 2022 Single Family Retrofit Cost-effectiveness Study (Statewide Reach Codes Team, 2024) for details.

2.2 Greenhouse Gas Emissions
The analysis uses the greenhouse gas (GHG) emissions estimates built-in to CBECC-Res. There are 8760 hourly multipliers accounting for time dependent energy use and carbon emissions based on source emissions, including renewable portfolio standard projections. Natural gas fugitive emissions, which are shown to be substantial, are not included. There are two strings of multipliers—one for Northern California climate zones, and another for Southern California climate zones.2
1 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/demand-side-management/customer-generation/nem-revisit/net-billingtariff 2 CBECC-Res multipliers are the same for CZs 1-5 and 11-13 (presumed to be Northern California), while there is another set of multipliers for CZs 6-10 and 14-16 (assumed to be Southern California).

Cost-Effectiveness Analysis: Central Coast Community Energy 8 California Energy Codes & Standards | A statewide utility program 2024-03-15 3 Prototype Designs and Measure Packages

3.1 Prototype Characteristics
The Energy Commission defines building prototypes which it uses to evaluate the cost-effectiveness of proposed changes to Title 24 requirements. Average home size has steadily increased over time, 3 and the Energy Commission single family new construction prototypes are larger than many existing single family homes across California. For this analysis, a 1,665 square foot prototype was evaluated. Table 2 describes the basic characteristics of the single family prototype. Additions are not evaluated in this analysis as they are already addressed in Section 150.2 of Title 24, Part

6. The CEC has proposed significant changes to the 2025 Energy Code that would remove the allowance of gas space heating and water heating equipment for additions and instead require additions to follow the same space heating and water heating equipment requirements as new construction (California Energy Commission, 2023).

Table 2: Residential Prototype Characteristics
Specification
Existing Conditioned Floor Area 1,665 ft2
Num. of Stories 1
Num. of Bedrooms 3
Window-to-Floor Area Ratio 13%
Attached Garage 2-car garage
Three building vintages were evaluated to determine sensitivity of existing building performance on costeffectiveness of upgrades. For example, it is widely recognized that adding attic insulation in an older home with no insulation is cost-effective, however, newer homes will likely have existing attic insulation reducing the costeffectiveness of an incremental addition of insulation. The building characteristics for each vintage were determined based on either prescriptive requirements from Title 24 that were in effect or standard construction practice during that time period. Homes built under 2001 Title 24 are subject to prescriptive envelope code requirements very similar to homes built under the 2005 code cycle, which was in effect until January 1, 2010.

Table 3 summarizes the assumptions for each of the three vintages. Additionally, the analysis assumed the following features when modeling the prototype buildings. Efficiencies were defined by year of the most recent equipment replacement based on standard equipment lifetimes.
• Individual space conditioning and water heating systems, one per single family building. • Split-system air conditioner with natural gas furnace. • Scenarios with an existing natural gas wall furnace without AC were also evaluated. • Small storage natural gas water heater.
• Scenarios with an existing electric resistance storage water heater were also evaluated. • Gas cooktop, oven, and clothes dryer.

The methodology applied in the analyses begins with a design that matches the specifications as described in Table 3 for each of the three vintages. Prospective energy efficiency measures were modeled to determine the projected energy performance and utility cost impacts relative to the baseline vintage. In some cases, where logical, measures were packaged together.
3 https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf

Cost-Effectiveness Analysis: Central Coast Community Energy 9 California Energy Codes & Standards | A statewide utility program 2024-03-15 Table 3. Efficiency Characteristics for Three Vintage Cases Building Component Efficiency
Feature
Vintage Case
Pre-1978 1978-1991 1992-2010
Envelope
Exterior Walls 2x4, 16-inch on center wood frame,
R-0a
2x4 16 inch on center wood frame,
R-11
2x4 16 inch on center wood frame,
R-13
Foundation Type & Insulation Uninsulated slab (CZ 2-15) Raised floor, R-0 (CZ 1 & 16)
Uninsulated slab (CZ 2-15)
Raised floor, R-0 (CZ 1 & 16)
Uninsulated slab (CZ 2-15)
Raised floor, R-19 (CZ 1 & 16)
Ceiling Insulation & Attic Type
Vented attic, R-5 @ ceiling level for CZ
6 & 7,
Vented attic, R-11 @ ceiling level
(all other CZs)
Vented attic, R-19 @ ceiling level Vented attic, R-30 @ ceiling level Roofing Material & Color Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Radiant Barrier No No No
Window Type: U-factor/SHGCb Metal, single pane: 1.16/0.76 Metal, dual pane: 0.79/0.70 Vinyl, dual pane Low-E: 0.55/0.40 House Infiltration at 50 Pascals 15 ACH50 10 ACH50 7 ACH50 HVAC Equipment
Heating Efficiency 78 AFUE (assumes 2 replacements) 78 AFUE (assumes 1 replacement) 78 AFUE Cooling Efficiency 10 SEER (assumes 2 replacements) 10 SEER (assumes 1 replacement) 13 SEER, 11 EER Duct Location & Details Attic, R-2.1, 30% leakage at 25 Pa Attic, R-2.1, 25% leakage at 25 Pa Attic, R-4.2, 15% leakage at 25 Pa Whole Building Mechanical
Ventilation None None None
Water Heating Equipment
Water Heater Efficiency 0.575 Energy Factor (assumes 2
replacements)

0.575 Energy Factor (assumes 1
replacement) 0.575 Energy Factor
Water Heater Type 40-gallon gas storage 40-gallon gas storage 40-gallon gas storage Pipe Insulation None None None
Hot Water Fixtures Standard, non-low flow Standard, non-low flow Standard, non-low flow a Pre-1978 wall modeled with R-5 cavity insulation to better align wall system performance with monitored field data and not overestimate energy use. b Window type selections were made based on conversations with window industry expert, Ken Nittler. If a technology was entering the market during the time period (e.g., Low-E during 1992-2010 or dual-pane during 1978-1991) that technology was included in the analysis. This provides a conservative assumption for overall building performance and additional measures may be cost-effective for buildings with lower performing windows, for example buildings with metal single pane windows in the 1978-1991 vintage.

Cost-Effectiveness Analysis: Central Coast Community Energy 10 California Energy Codes & Standards | A statewide utility program 2024-03-15 4 Results
The primary objective of the evaluation is to identify cost-effective energy upgrade measures and packages for existing single family buildings, to support the design of local ordinances requiring upgrades, which may be triggered by different events, such as at the time of a significant remodel or at burnout of mechanical equipment. In this report, the 1992-2010 vintage is shown for the equipment measures because it is the most conservative case (lowest loads), while the pre-1978 vintage is shown for the envelope and duct measures because some of those measures only apply to the pre-1978 vintage. A full dataset of all results can be downloaded at https://localenergycodes.com/content/resources. Results alongside policy options can also be explored using the Cost-effectiveness Explorer at https://explorer.localenergycodes.com/.

The following describes which results are presented in the tables in this section. See the main 2022 Single Family Retrofit Cost-Effectiveness Study (Statewide Reach Codes Team, 2024) for details of the measures. • Table 4 through Table 6 show the cost-effective results for the pre-1978 vintage for heat pump space heaters (HPSHs) including dual fuel heat pumps (DFHPs), heat pump water heaters (HPWHs) and envelope and duct measures, respectively, for E-TOU-C rate.
• Table 7 through Table 9 show the cost-effective results for the pre-1978 vintage for PV, HPSH, and HPWH, upgrade measures, respectively, for E-Elec rate.
• Table 10 through Table 12 show the cost-effective results for the 1978-1991 vintage for heat pump space heaters, heat pump water heaters and envelope and duct measures, respectively, for E-TOU-C rate. • Table 13 through Table 15 show the cost-effective results for the 1978-1991 vintage for PV, HPSH, and HPWH upgrade measures, respectively, for E-Elec rate.
• Table 16 through Table 18 show the cost-effective results for the 1992-2010 vintage for heat pump space heaters, heat pump water heaters and envelope and duct measures, respectively, for E-TOU-C rate. • Table 19 through Table 21 show the cost-effective results for the 1992-2010 vintage for PV, HPSH, and HPWH upgrade measures, respectively, for E-Elec rate.

Cost-Effectiveness Analysis: Central Coast Community Energy 11 California Energy Codes & Standards | A statewide utility program 2024-03-15

4.1 Pre-1978 Vintage
Table 4: E-TOU-C Rate HPSH Single Family Cost-Effectiveness Summary Pre-1978 Table 5: E-TOU-C Rate HPWH Single Family Cost-Effectiveness Summary Pre-1978 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
DFHP Existing Furnace (1,774) 209 0.93 14,840 8.07 ($255) ($2,963) $2,349 $1,008 0.00 ($3,971) 8.25 $7,306 DFHP New Furnace (1,783) 204 0.90 14,281 7.78 ($270) ($3,392) $7,200 $8,708 0.00 ($12,101) 1.11 $993 HPSH (Std Efficiency) (2,265) 233 0.98 15,584 8.38 ($430) ($6,680) $1,020 $1,618 0.00 ($8,298) 5.88 $7,900 HPSH (High Efficiency) (1,855) 233 1.05 16,982 9.13 ($252) ($2,619) $3,951 $6,430 0.00 ($9,049) 1.98 $6,319 Ducted MSHP (1,847) 233 1.05 17,011 9.15 ($249) ($2,536) $1,442 $2,951 0.00 ($5,487) 4.35 $9,880 Ductless MSHP (Std Efficiency) (1,667) 208 0.94 15,070 8.18 ($227) ($2,436) $8,826 $14,274 0.00 ($16,709) 0.89 ($1,536) Ductless MSHP (High Efficiency) (589) 208 1.12 18,747 10.19 $233 $8,061 $12,410 $20,158 0.40 ($12,097) 1.06 $1,171 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
240V Fed. Min. HPWH (1,391) 171 0.87 12,314 7.80 ($330) ($5,167) $4,332 $6,554 0.00 ($11,721) 1.65 $4,252 240V Market Std. NEEA HPWH (1,076) 171 0.90 13,414 8.21 ($179) ($1,725) $5,193 $7,967 0.00 ($9,692) 1.64 $5,136 240V Market Std. NEEA HPWH + DR (967) 171 0.92 13,789 8.43 ($124) ($461) $5,193 $7,967 0.00 ($8,428) 1.80 $6,335 120V Market Std. NEEA HPWH (935) 172 0.93 13,960 8.47 ($107) ($75) $2,893 $4,273 0.00 ($4,348) 3.41 $10,296 240V Fed. Min. HPWH (Exterior Closet) (1,424) 169 0.85 12,036 7.66 ($349) ($5,628) $4,751 $6,973 0.00 ($12,601) 1.49 $3,384 240V Fed. Min. HPWH (Interior Closet) (1,158) 128 0.65 8,836 5.87 ($307) ($5,248) $4,413 $6,634 0.00 ($11,883) 1.12 $792 240V Fed. Min. HPWH (Interior Closet,
ducted) (1,354) 180 0.93 13,396 8.39 ($296) ($4,254) $5,492 $7,714 0.00 ($11,967) 1.60 $4,591

Cost-Effectiveness Analysis: Central Coast Community Energy 12 California Energy Codes & Standards | A statewide utility program 2024-03-15 Table 6: E-TOU-C Rate Envelope and Duct Measures Single Family Cost-Effectiveness Summary Pre-1978 Table 7: E-Elec Rate Solar PV Single Family Cost-Effectiveness Summary Pre-1978 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
30% Air Sealing 15 15 0.09 1,575 0.86 $53 $1,533 $4,684 $4,684 0.33 ($3,151) 0.43 ($2,686) New Ducts: R-6 133 49 0.30 5,328 2.86 $162 $4,430 $4,808 $4,808 0.92 ($379) 1.48 $2,301 New Ducts: R-8 137 51 0.32 5,601 3.02 $169 $4,634 $6,311 $6,311 0.73 ($1,677) 1.18 $1,148 Duct Sealing: 10% 50 32 0.19 3,355 1.83 $89 $2,515 $2,590 $2,590 0.97 ($75) 1.69 $1,789 Wall Insulation: R-13 56 49 0.29 5,054 2.74 $126 $3,603 $2,950 $2,950 1.22 $653 2.19 $3,510 Attic Insulation: R-38 67 36 0.22 3,802 2.05 $106 $2,969 $6,762 $6,762 0.44 ($3,793) 0.74 ($1,784) Attic Insulation: R-49 75 39 0.24 4,154 2.23 $116 $3,252 $7,446 $7,446 0.44 ($4,194) 0.73 ($2,001) R-19 Raised Floor Insulation 4 87 0.52 8,759 4.83 $178 $5,370 $3,633 $3,633 1.48 $1,737 3.02 $7,356 R-30 Raised Floor Insulation (3) 100 0.59 9,945 5.49 $198 $6,011 $4,113 $4,113 1.46 $1,898 3.03 $8,342 Cool Roof (0.20 Ref) (at roof
replacement) 11 (13) (0.07) (1,242) (0.67) ($20) ($657) $893 $1,203 0.00 ($1,860) 0.00 ($2,685) Cool Roof (0.25 Ref) (at roof
replacement) 14 (19) (0.11) (1,898) (1.03) ($32) ($1,031) $1,786 $2,407 0.00 ($3,438) 0.00 ($4,688) Window Upgrade: 0.28 vs 0.30 U-factor 89 28 0.17 3,068 1.64 $101 $2,718 $11,871 $11,871 0.23 ($9,154) 0.35 ($7,742) Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
3kW PV 3,854 0 0.11 13,150 1.22 $510 $11,627 $9,608 $11,574 1.00 $52 0.72 ($3,283)

Cost-Effectiveness Analysis: Central Coast Community Energy 13 California Energy Codes & Standards | A statewide utility program 2024-03-15 Table 8: E-Elec Rate HPSH Single Family Cost-Effectiveness Summary Pre-1978 Table 9: E-Elec Rate HPWH Single Family Cost-Effectiveness Summary Pre-1978 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
DFHP Existing Furnace (1,774) 209 0.93 14,840 8.07 ($393) ($6,112) $2,349 $1,008 0.00 ($7,120) 8.25 $7,306 DFHP New Furnace (1,783) 204 0.90 14,281 7.78 ($408) ($6,528) $7,200 $8,708 0.00 ($15,236) 1.11 $993 HPSH (Std Efficiency) (2,265) 233 0.98 15,584 8.38 ($531) ($8,970) $1,020 $1,618 0.00 ($10,588) 5.88 $7,900 HPSH (High Efficiency) (1,855) 233 1.05 16,982 9.13 ($382) ($5,584) $3,951 $6,430 0.00 ($12,014) 1.98 $6,319 Ducted MSHP (1,847) 233 1.05 17,011 9.15 ($380) ($5,518) $1,442 $2,951 0.00 ($8,470) 4.35 $9,880 Ductless MSHP (Std Efficiency) (1,667) 208 0.94 15,070 8.18 ($388) ($6,096) $8,826 $14,274 0.00 ($20,369) 0.89 ($1,536) Ductless MSHP (High Efficiency) (589) 208 1.12 18,747 10.19 $3 $2,804 $12,410 $20,158 0.14 ($17,354) 1.06 $1,171 HPSH + 3kW PV 2,688 233 1.12 32,485 9.94 $207 $7,845 $10,628 $13,192 0.59 ($5,347) 1.43 $5,633 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
240V Fed. Min. HPWH (1,391) 171 0.87 12,314 7.80 ($349) ($5,604) $4,332 $6,554 0.00 ($12,158) 1.65 $4,252 240V Market Std. NEEA HPWH (1,076) 171 0.90 13,414 8.21 ($224) ($2,739) $5,193 $7,967 0.00 ($10,706) 1.64 $5,136 240V Market Std. NEEA HPWH + DR (967) 171 0.92 13,789 8.43 ($173) ($1,591) $5,193 $7,967 0.00 ($9,558) 1.80 $6,335 120V Market Std. NEEA HPWH (935) 172 0.93 13,960 8.47 ($160) ($1,290) $2,893 $4,273 0.00 ($5,562) 3.41 $10,296 240V Fed. Min. HPWH (Exterior Closet) (1,424) 169 0.85 12,036 7.66 ($366) ($6,007) $4,751 $6,973 0.00 ($12,980) 1.49 $3,384 240V Fed. Min. HPWH (Interior Closet) (1,158) 128 0.65 8,836 5.87 ($345) ($6,111) $4,413 $6,634 0.00 ($12,745) 1.12 $792 240V Fed. Min. HPWH (Interior Closet,
ducted) (1,354) 180 0.93 13,396 8.39 ($318) ($4,763) $5,492 $7,714 0.00 ($12,477) 1.60 $4,591 240V Fed. Min. HPWH + 3kW PV 3,562 171 1.00 29,215 9.36 $518 $14,166 $13,940 $18,128 0.78 ($3,962) 1.22 $3,933

Cost-Effectiveness Analysis: Central Coast Community Energy 14 California Energy Codes & Standards | A statewide utility program 2024-03-15

4.2 1978-1991 Vintage
Table 10: E-TOU-C Rate HPSH Single Family Cost-Effectiveness Summary 1978-1991 Table 11: E-TOU-C Rate HPWH Single Family Cost-Effectiveness Summary 1978-1991 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
DFHP Existing Furnace (1,277) 150 0.67 10,672 5.76 ($165) ($1,818) $2,349 $1,008 0.00 ($2,826) 5.88 $4,914 DFHP New Furnace (1,283) 147 0.64 10,271 5.54 ($175) ($2,099) $7,200 $8,708 0.00 ($10,807) 0.80 ($1,776) HPSH (Std Efficiency) (1,644) 169 0.71 11,279 6.01 ($294) ($4,530) $1,020 $1,618 0.00 ($6,148) 4.21 $5,192 HPSH (High Efficiency) (1,348) 169 0.76 12,291 6.57 ($167) ($1,626) $3,951 $6,430 0.00 ($8,056) 1.43 $2,761 Ducted MSHP (1,341) 169 0.76 12,314 6.58 ($164) ($1,561) $1,442 $2,951 0.00 ($4,512) 3.13 $6,289 Ductless MSHP (Std Efficiency) (1,152) 143 0.65 10,417 5.61 ($133) ($1,208) $8,826 $14,274 0.00 ($15,481) 0.61 ($5,499) Ductless MSHP (High Efficiency) (407) 143 0.77 12,957 7.06 $179 $5,910 $12,410 $20,158 0.29 ($14,248) 0.73 ($5,390) Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
240V Fed. Min. HPWH (1,391) 170 0.86 12,273 7.77 ($352) ($5,840) $4,332 $6,554 0.00 ($12,394) 1.64 $4,202 240V Market Std. NEEA HPWH (1,077) 170 0.90 13,361 8.17 ($202) ($2,421) $5,193 $7,967 0.00 ($10,388) 1.64 $5,087 240V Market Std. NEEA HPWH + DR (967) 170 0.92 13,738 8.39 ($147) ($1,149) $5,193 $7,967 0.00 ($9,116) 1.79 $6,285 120V Market Std. NEEA HPWH (935) 171 0.92 13,893 8.43 ($130) ($774) $2,893 $4,273 0.00 ($5,047) 3.39 $10,213 240V Fed. Min. HPWH (Exterior Closet) (1,424) 169 0.85 12,036 7.66 ($371) ($6,272) $4,751 $6,973 0.00 ($13,245) 1.49 $3,384 240V Fed. Min. HPWH (Interior Closet) (1,162) 130 0.67 9,069 6.00 ($316) ($5,511) $4,413 $6,634 0.00 ($12,145) 1.16 $1,058 240V Fed. Min. HPWH (Interior Closet,
ducted) (1,355) 180 0.93 13,367 8.37 ($320) ($4,987) $5,492 $7,714 0.00 ($12,701) 1.59 $4,541