San Luis Obispo City Council
December 10, 2024

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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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.

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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
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1 Council Minutes
October 1, 2024, 5:30 p.m.

Council Chambers, 990 Palm Street, San Luis Obispo
Council Members

Present:

Council Member Jan Marx, Council Member Michelle
Shoresman, Council Member Emily Francis (for Closed Session only,) Vice Mayor Andy Pease, Mayor Erica A. Stewart
Council Members

Absent:

Council Member Emily Francis (for Regular Meeting only) City Staff Present: City Manager Whitney McDonald, Christine Dietrick, City Attorney, Teresa Purrington, City Clerk
_____________________________________________________________________

1. CLOSED SESSION (4:30 - 5:30 PM)

1.a CALL TO ORDER
Mayor Erica A. Stewart called the Closed Session to order at 4:30 p.m. in the Council Hearing Room at City Hall, 990 Palm Street, San Luis Obispo.

Council Member Francis attended the Closed Session virtually due to illness.

1.b PUBLIC COMMENT ON CLOSED SESSION ITEMS ONLY
Public Comments:

None
---End of Public Comment---

1.c PUBLIC EMPLOYEE PERFORMANCE EVALUATION - GOALS
Action: Mayor Stewart indicated that no reportable action was taken on this item.

1.d ADJOURNMENT
The Closed Session adjourned at 5:40 p.m. Council Member Francis left the meeting.

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2 2. CALL TO ORDER
A Regular Meeting of the San Luis Obispo City Council was called to order on October 1, 2024 at 5:45 p.m. in the Council Chambers, 990 Palm Street, San Luis Obispo, by Mayor Stewart. Council Member Francis was absent for the Regular meeting.

4. PRESENTATIONS

4.a DOMESTIC VIOLENCE AWARENESS MONTH PROCLAMATION
Mayor Stewart presented a proclamation declaring October as "Domestic Violence Awareness Month" to Jill LeMieux on behalf of Lumina Alliance.

4.b FIRE PREVENTION MONTH PROCLAMATION
Mayor Erica A. Stewart presented a proclamation declaring the month of October as "Fire Prevention Month" to Fire Chief Todd Tuggle on behalf of the San Luis Obispo Fire Department.

4.c NATIONAL CYBERSECURITY AWARENESS MONTH PROCLAMATION Mayor Erica A. Stewart presented a proclamation declaring the month of October as "National Cybersecurity Awareness Month" to Interim Assistant City Manager Greg Hermann on behalf of the City's Information and Technology Department.

4.d CAL POLY ENROLLMENT/HOUSING PRESENTATION
The City Council received an update on enrollment and housing from Courtney Kienow, Director of Community Relations and Economic Development, Terrance Harris, Vice President of Strategic Enrollment Management, Associate Vice President for Student Affairs Jo Campbell and Vice President of Facilities Management & Development Mike McCormick at Cal Poly.

4.e CITY MANAGER REPORT
City Manager Whitney McDonald provided a report on upcoming projects.

6. CONSENT AGENDA
Council Member Shoresman requested that Item 6e be pulled from the Consent agenda for discussion.

Motion By Vice Mayor Pease
Second By Council Member Shoresman
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3 To approve Consent Calendar Items 6a to 6d and 6g to 6h. Item 6f removed from the agenda prior to the meeting.

Ayes (4): Council Member Marx, Council Member Shoresman, Vice Mayor Pease, and Mayor Stewart
Absent (1): Council Member Francis
CARRIED (4 to 0)

6.a WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES Waive reading of all resolutions and ordinances as appropriate.

6.b MINUTES REVIEW - SEPTEMBER 17, 2024 COUNCIL MINUTES Approve the minutes of the City Council meeting held on September 17, 2024.

6.c SECOND READING AND ADOPTION OF ORDINANCE NO. 1740 (2024 SERIES) APPROVING AN AMENDMENT TO TABLE 2-1 IN TITLE 17 (ZONING REGULATIONS) OF THE MUNICIPAL CODE WITH APPROVAL

OF CONDITIONAL USE PERMIT
Adopt Ordinance No. 1740 (2024 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, approving amendments to Table 2-1 (Uses Allowed by Zone) in Title 17 (Zoning Regulations) to allow Cannabis Retail Storefronts to conduct retail sales by delivery with approval of a Conditional Use Permit or by amendment to an existing Conditional Use Permit. The project is exempt from environmental review (CEQA) (CODE-0401-2024).”

6.d APPROVE A MILLS ACT HISTORICAL PROPERTY PRESERVATION AGREEMENT FOR THE SNYDER HOUSE AT 1406 MORRO STREET
(HIST-0386-2024)
As recommended by the Cultural Heritage Committee, adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving a Historic Property Preservation Agreement between the City and the owner of the Snyder House at 1406 Morro Street (Application No. HIST-0386-2024).”

6.f AMENDMENT TO COMMUNITY WORKFORCE AGREEMENT FOR

PRADO ROAD INTERCHANGE AND PUBLIC SAFETY CENTER

PROJECTS
This item was pulled by staff and continued to a date uncertain.

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4 6.g SECOND READING AND ADOPTION OF ORDINANCE NO. 1741 (2024

SERIES) TO AMEND QUALIFICATION FOR CONSTRUCTION BOARD

OF APPEALS
Adopt Ordinance No. 1741 (2024 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Section

15.04.020, Subsection N, of the San Luis Obispo Municipal Code,” which will remove the local requirement to maintain an Accessibility Board of Appeals pursuant to Health and Safety Code 19957.5.

6.h SECOND READING AND ADOPTION OF ORDINANCE NO. 1742 (2024

SERIES) TO ESTABLISH AN IMPACT FEE DEFERRAL PROGRAM FOR

ELIGIBLE AFFORDABLE FOR-RENT RESIDENTIAL PROJECTS
Adopt Ordinance No. 1742 (2024 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending section

4.56.050 (Payment of Fees) of the Municipal Code to establish a development impact fee deferral program for eligible affordable housing projects.”

6.e AMENDMENT NO. 1 TO GRANT AGREEMENT WITH SAN LUIS

OBISPO REPERTORY THEATRE
Public Comments:

Kevin Harris
---End of Public Comment---
Motion By Council Member Shoresman
Second By Council Member Marx
Approve Amendment No. 1 to Grant Agreement between the San Luis Obispo Repertory Theatre and the City of San Luis Obispo to provide grant funding in the additional amount of $2,760,000 and authorize the Mayor to execute the agreement with the following amendment made to the Agreement:
• Section 9 of the Agreement - The quarterly reports should begin when construction begins on the building.

Ayes (4): Council Member Marx, Council Member Shoresman, Vice Mayor Pease, and Mayor Stewart
Absent (1): Council Member Francis
CARRIED (4 to 0)
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5 7. PUBLIC HEARING AND BUSINESS ITEMS

7.a 2023-24 ANNUAL REPORT OF THE TOURISM BUSINESS

IMPROVEMENT DISTRICT
Economic Development & Tourism Manager Molly Cano, Tourism & Community Promotions Manager Jacqui Clark-Charlesworth and TBID Chair Lydia Bates provided an in-depth staff report and responded to Council questions.

Public Comments:

None
---End of Public Comment---
Motion By Vice Mayor Pease
Second By Mayor Stewart

1. To receive and approve the TBID Board’s annual report for FY 2023-24; and

2. Adopt a Draft Resolution of Intention entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, declaring its intention to continue the San Luis Obispo Tourism Business Improvement District, to continue the basis for and to levy the assessment for the district, and to set a date for the Public Hearing on the district and the assessment for 2024-25.”
Ayes (4): Council Member Marx, Council Member Shoresman, Vice Mayor Pease, and Mayor Stewart
Absent (1): Council Member Francis
CARRIED (4 to 0)

7.b ANNUAL UPDATE ON IMPLEMENTATION OF THE ECONOMIC

DEVELOPMENT STRATEGIC PLAN
Deputy City Manager Greg Hermann, Economic Development & Tourism Manager Molly Cano and Economic Development Analyst McKenzie Taffe provided an in-depth staff report and responded to Council questions.

Public Comments:

Rachel Whalen
Shana Paulson
---End of Public Comment---
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6 Motion By Council Member Marx
Second By Council Member Shoresman
Receive and file the annual update on the implementation status of the Economic Development Strategic Plan (EDSP).

Ayes (4): Council Member Marx, Council Member Shoresman, Vice Mayor Pease, and Mayor Stewart
Absent (1): Council Member Francis
CARRIED (4 to 0)

7.c FISCAL YEAR 2023-24 YEAR END BUDGET REPORT
Finance Director Emily Jackson and Principal Budget Analyst Riley Kuhn provided an in-depth staff report and responded to Council questions.

Public Comments:

None
---End of Public Comment---
Action: By consensus the Council directed staff to receive and file the FY 2023-24 Year End Budget Report; and the Revised Long-Term Forecast, 2025-27 Financial Plan calendar and community outreach survey in preparation for the 2025-27 financial planning process.

10. ADJOURNMENT
The meeting was adjourned at 9:14 p.m. The next Regular City Council Meeting is scheduled for October 15, 2024 at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.

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Certificate Of Completion
Envelope Id: 21730E0CC6364AA1BD52F77E51602650 Status: Completed Subject: Complete with Docusign: Amendment No. 1 to the Grant Agreement w/SLO Repertory Theatre Department:

Supplier:

Source Envelope:

Document Pages: 23 Signatures: 4 Envelope Originator:

Certificate Pages: 5 Initials: 0 City Clerk
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990 Palm Street
San Luis Obispo, CA 93422
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10/2/2024 8:56:07 AM
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Kevin Harris
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Christine Dietrick
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City Attorney
City of San Luis Obispo
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Erica A. Stewart
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SLO City Council Member
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Teresa Purrington
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City Clerk
City of San Luis Obispo
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Greg Hermann
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Dan Clancy
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Electronic Record and Signature Disclosure created on: 5/10/2017 10:25:58 AM Parties agreed to: Kevin Harris, Erica A. Stewart, Robert Hill, Greg Hermann

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To: Robert Hill, City of SLO
From: Kevin Harris, SLO REP
RE: ENA REQUIREMENTS for lease negotiation
All of us at SLO REP are thrilled to enter lease negotiations with the City of SLO and to complete this important milestone in our partnership.

According to our updated ENA from May 22, 2024, SLO REP is required to show that our organization has raised at least 50% of all design/construction costs to complete the project before entering into lease negotiations. Our current cost estimates put the total costs of design/construction at $16,715,973. SLO REP is also required to provide a $300,000 operating reserves fund and pay for approximately $800,000 for in-lieu parking fees before beginning construction. These additional non-direct expenses bring the overall total for the City site to $17,815,973.

As of 9/30/24, SLO REP has available funds (cash and signed pledges) totaling $14,095,886, or, 79% of the overall total. Please see attached for a complete breakdown of these funds and SLO REP’s latest bank account statements.

SLO REP’s last pricing study was completed in January 2024 and accepted for the updated ENA on 5/22/24. Our construction docs are 100% complete and ready to be submitted for review. Our current timeline calls for an updated pricing study (based on completed construction documents and initial feedback from reviewers) to be completed by December 2024. Please see attached for a complete breakdown of our latest pricing study.

We are currently preparing our RFP for contractors, using a CMAR structure for the project; Construction Manager at Risk (CMAR) is a project delivery method where a construction manager (CM) is hired to oversee a project from design to construction, and is responsible for any costs that exceed a guaranteed maximum price. We expect to choose a contractor by 2
nd quarter, 2025, and have a final MAXIMUM POSSIBLE COST for the project negotiated by June, 2025. At this point, the cost of the project will be fixed.

Please let me know if you need any additional information from SLO REP at this time.

Sincerely,
Kevin Harris
Managing Artistic Director
SLO REP Page 413 of 671

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: December 10, 2024
TO: Mayor and Council
FROM: Emily Jackson, Finance Director
Riley Kuhn, Principal Budget Analyst
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 6B 2025-27 FINANCIAL PLAN - SETTING THE STAGE & FIRST

QUARTER BUDGET REPORT
Staff received the following questions, regarding the Budget Report and Financial Plan item. The questions are below with staff’s response shown in italics:
1) Why are the debt service expenditures so high for this time of year for SLR CFD?
Debt service expenditures are high early in the year because the first of two annual debt service payments includes both principal and interest. The remaining payment due in the second half of the year will include interest only and will not exceed the remaining budget.
2) The Broad Street Park construction project is listed as ongoing. Is that project complete?
The Broad Street Park construction project was listed as ongoing in the Q1 report (July 2024 to September 2024) because the project was not fully completed until Q2 2025. During Q1, we were still waiting for the park to be energized by PG&E, which delayed the final completion. The project’s completion will be reflected in the Q2 report.
3) Was the solar installation completed on Sinsheimer Pool, Fire Station 1, and the Bus yard?
The solar installation projects for Sinsheimer Pool, Fire Station 1, and the Bus Yard have not yet been completed. The City Council recently approved the agreement with Forefront for these projects as a Power Purchase Agreement (PPA). Now that the agreements are executed, Forefront has begun the design work. We are expecting completion of these projects by March 2026.

ITEM 6B 2025-27 FINANCIAL PLAN - SETTING THE STAGE & FIRST QUARTER BUDGET REPORT Page 2
4) The Setting the Stage document describes our population growth during various periods, with the most recent growth of 5% from 4/20-7/23. I believe our general plan supposes a growth rate of about 1% per year. Are we still generally falling within our growth projections?
Yes, we are still generally falling within our growth projections. The last General Plan Annual Report (page 21) discusses this and states that on average between 2015 and 2023 the City maintained an average annual growth rate of .98%. Staff will be bringing the 2024 General Plan Annual Report with updated statistics to the City Council for review in April 2025.
5) What percentage of total Major City Goal tasks have been completed and how many will require ongoing action into 2025-27? Many strategies are listed as "ongoing" with a green status indicator. Does this mean that the program is fully up and running? How should I read a strategy as "ongoing"? All Major City Goal tasks were assigned targeted completion dates with the 2023- 25 Financial Plan. As of FY 2024-25 Q1, 21% of tasks have an updated completion date of “Complete”. Many other tasks created an ongoing work effort. 106 of 146 tasks were assigned original completion dates of “Ongoing”. A status of green indicates that the task is on track or complete, yellow indicates that the task is delayed, and red indicates that the task is delayed without an identified solution. 6) What are the estimated costs of the Storm projects detailed in the Q1 Budget Report?
The estimated costs of the storm projects detailed in the Q1 Budget Report are provided in the revised table below. This table includes the estimated costs as of August 2024; however, these figures do not account for inflation, changes in market conditions, or other potential cost adjustments since that time. Because the projects are currently in the early phases—either Project Initiation or Design— construction will occur at a later stage, meaning that the final costs are likely to change. Adjustments may be necessary to account for inflation, evolving material costs, or unforeseen design complexities as the projects progress toward construction.

In the Q1 Budget Report, the percentage completion for each project is shown in a table that organizes the projects by their respective phases (e.g., Project Initiation, Design). These percentages indicate the progress within each phase.

For example, if a project in the Design phase is marked as 50% complete, this means that 50% of the design work—such as plans and specifications—has been completed. It is important to note that these percentages reflect the status of the work and not the spending or funding allocated to the project.

ITEM 6B 2025-27 FINANCIAL PLAN - SETTING THE STAGE & FIRST QUARTER BUDGET REPORT Page 3
7) What new legislation will take effect in January?
While some of this legislation was highlighted in the Setting the Stage for the 2025- 27 Financial Plan report (Item 6a – Attachment B), a complete 2024 legislative briefing will be presented to the City Council in February 2025. On December 6, 2025, the League of California Cities published its 2024 Legislative Report, offering a comprehensive overview of significant legislative developments and policies impacting municipalities. A link to the full report can be found here:
https://www.calcities.org/docs/default-source/advocacy/2024-legislative-reportfinal.pdf?sfvrsn=4d267d7d_5

Item 6b
Department: Finance
Cost Center: 2002
For Agenda of: 12/10/2024
Placement: Business
Estimated Time: 90 minutes
FROM: Emily Jackson, Finance Director
Prepared By: Riley Kuhn, Principal Budget Analyst
SUBJECT: 2025-27 FINANCIAL PLAN: SETTING THE STAGE & FIRST QUARTER

BUDGET REPORT

RECOMMENDATION
Receive and discuss the following documents in preparation for the 2025-27 Goal Setting and Financial Plan Development Process:
a) FY 2024-25 First Quarter Budget Report
b) Setting the Stage for the 2025-27 Financial Plan
c) General Plan Implementation Report
d) 2023-25 Major City Goals Status Update

POLICY CONTEXT
The City of San Luis Obispo utilizes a two-year financial planning process to create its budgets. The fundamental purpose of the City’s budget process is to link, through public engagement and strategic deliberation, the interest of the community to the available financial resources to achieve the desired outcome. The process allows the City Council to engage the community in identifying Major City Goals for the City while also providing information and education regarding the City’s core services and programs, including the day-to-day work and responsibilities carried out by City employees to support residents’ quality of life.

DISCUSSION
FY 2024-25 First Quarter Budget Report:

As of September 30, 2024 the City’s results as compared to budget are largely as expected. The first quarter report (Attachment A) provides a limited preview of results since many revenue streams and expenditures are reported several months in arrears.

Staffing is the most reliable indicator of expenditures since no reporting delay exists and results are as expected through the first quarter. One risk area has emerged based on a recent statewide forecast update released by our sales tax consultants who have advised that macroeconomic conditions have shifted unfavorably since budget adoption.

Item 6a
Setting the Stage for the 2025-27 Financial Plan:

The City of San Luis Obispo is a full-service city that provides public safety, public utilities, and a broad variety of general government services. Like most municipalities, the City is faced with balancing elevated and rising costs with limited resources while providing a high level of service to its residents.

In setting the stage for the next Financial Plan (Attachment B), staff identified three focus areas: The regulatory environment and state laws that impact how we operate, macroeconomic conditions, and our community’s growth.

The regulatory environment becomes more complex each year as the State continues to pass legislation with impacts to cities. This legislation has a pronounced impact on our Community Development department, our revenues, and our staffing costs. Many incremental changes are absorbable individually but in total lead to increased workloads and a higher cost of doing business.

Recent years have been defined by strong tailwinds from economic stimulus in response to the COVID pandemic and the inflationary period that followed. Conditions have shifted and now present headwinds as increased sales tax revenues have plateaued and while prices are increasing at more typical rates, they remain elevated.

Like many communities, ours has recently become much more accommodative of growth.

As we have welcomed new community members with new housing developments, we have also made commitments to add new infrastructure and fund the costs of operation.

We also note that demand for a broad variety of City services has increased far more quickly than the population.

General Plan Implementation
The City’s General Plan is the blueprint for growth in the City that addresses all City programs and services. The Plan contains 396 programs contained within the Land Use, Circulation, Housing, Noise, Conservation / Open Space, Safety, Parks & Recreation, and Water & Wastewater elements. Attachment C. makes reference to the last General Plan update provided last Spring for additional detail.

In addition to the General Plan, staff are also focused on implementing the Climate Action Plan, Active Transportation Plan, Economic Development Strategic Plan, DEI Strategic Plan, Homelessness Response Strategic Plan, Parks and Recreation Blueprint for the Future, Police Department Strategic Plan, Fire Department Strategic Plan, Vision Zero Action Plan, Wastewater Collections Infrastructure Renewal Strategy, Water Treatment Infrastructure Renewal Plan Strategy, and more.

Major City Goal Status Update
With adoption of the 2023-25 Financial Plan, Council set four Major City Goals: Economic Resiliency, Cultural Vitality, and Fiscal Sustainability; Diversity, Equity, and Inclusion (DEI); Housing and Homelessness; and Climate Action, Open Space & Sustainable Transportation. Under each goal is a series of tasks identified to accomplish it. Of the 146 tasks, 93% are completed or on track, 6% have been delayed or have identified setbacks, and just 1% or one task has been delayed without an identified solution. (Attachment D)

Item 6a
Previous Council or Advisory Body Action
Council reviewed and approved the 2025-27 Financial Plan calendar on October 1, 2024.

Public Engagement
Public comment on this item can be provided to the City Council through written correspondence prior to the meeting and through public testimony at the meeting.

CONCURRENCE
The City’s internal Financial Plan Steering Committee concurs with the recommendations included in this 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: N/A Budget Year: 2024-25
Funding Identified: N/A
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $0 $0 $0 $0
State
Federal
Fees
Other:

Total $0 $0 $0 $0
This report contains valuable information to keep the Council and Community informed about the City’s financial standing and program efforts and should provide valuable information to prepare for the next financial plan.

There is no fiscal impact associated with the recommendations contained in this report.

Item 6a

ALTERNATIVES
Council could choose not to discuss the report. This action is not recommended as Council’s feedback at each step of the Financial Plan process is invaluable to helping staff craft informed recommendations for resource allocation.

ATTACHMENTS
A - FY 2024-25 First Quarter Budget Report
B - Setting the Stage for the 2025-27 Financial Plan
C - General Plan Implementation
D - 2023-25 Major City Goals Status Update

1 First Quarter Financial Report
Fiscal Year 2024-25
Introduction
This financial report provides an overview of the City’s revenues and expenditures through the first quarter of the fiscal year (July 1, 2024 – September 30, 2024). It also provides an update on the status of the City’s Capital Improvement Plan (CIP) projects and progress on Major City Goal tasks.

Throughout the document, reference will be made to the data available as of the time the report was drafted. Revenues are often not available for up to two months after month-end and in some cases, revenues are not received evenly throughout the year. Expenditures are often recorded in advance for annual costs or for purchase orders opened at the beginning of the year. The net impact is that actual results booked one quarter into the year should not always be expected to equal one quarter of budgeted amounts. Commentary will be provided only when analysis suggests that full-year results may differ significantly from budget.

Table of Contents
General Fund Summary………………………………………………………………… 2
Storm Update………………………………………………………………………. …… 5
Water Fund Summary…………………………………………………………………… 7
Sewer Fund Summary…………………………………………………………………... 9
Parking Fund Summary…………………………………………………………………. 11
Transit Fund Summary…………………………………………………………………... 12
Special Revenue Summaries…………………………………………………………… 13
CIP Update………………………………………………………………………….……. 17
Major City Goal Update…………………………………………………………………. 19

2 General Fund Summary
As of the first quarter, revenue and expenditures for the General Fund are broadly in line with expectations. The tables below detail year-to-date results as compared to budget and prior year actuals. Commentary is provided where results are not in line with expectations.

Revenue:

Tax Revenue:

Local Revenue Measure G and Sales Tax: Year-to-date results include July only as the California Department of Tax and Fee Administration operates with a two-month delay. Staff note that recent statewide forecasts from our consultants have been revised downwards based on macroeconomic conditions and this may indicate risk to budget attainment.

Property Tax: The City participates in the Teeter Plan, which means we are not exposed to delinquent payments and can reasonably expect to collect 100% of budgeted amounts.

Business Tax: This tax is due at the beginning of the year and should be largely collected. Staff note that collections are up more than 10% from prior year due to a combination of improved compliance efforts and collection of past-due prior year receipts. Staff will issue citations for past due business tax and expect collections to increase before year end.

Safety 172: This revenue stream is trending higher than budget due to timing of cash receipts.

Based on the latest estimates from our consultant, we should finish the full year slightly below budget.

FY 2023-24 FY 2024-25
General Fund Actual Budget YTD Actuals % Received
Tax and Franchise Revenue 101,605,256 $ 104,967,371 $ 12,025,488 $ 11% Local Revenue Measure G 30,597,288 31,855,000 2,524,764 8% Sales Tax (Bradley Burns) 22,285,972 23,962,099 1,872,619 8% Property Tax 23,261,942 23,446,385 562,703 2%
Transient Occupancy Tax 10,995,912 10,586,256 1,778,374 17% Utility User Tax 6,301,505 6,622,639 964,170 15%
Business Tax 2,942,425 3,317,338 3,335,315 101%
Cannabis Tax 1,031,124 1,100,000 192,241 17%
Franchise Fees 2,366,286 2,091,800 240,548 11%
Gas Tax 1,341,857 1,419,353 371,662 26%
Safety Prop 172 480,944 566,500 183,092 32%
Fees and Other Revenue 18,259,629 13,644,469 3,058,265 22% Development Review 6,168,815 6,585,331 1,075,812 16%
Parks & Recreation 2,413,314 2,068,787 530,739 26%
Fire 1,762,336 1,577,836 369,419 23%
Police 1,029,274 611,917 103,036 17%
General Government 6,885,889 2,800,598 979,258 35%
Total 119,864,885 $ 118,611,840 $ 15,083,752 $ 13%

3 While other tax revenue categories show year to date results lower than 25%, we do not expect significant variances for the full year.

Fee & Other Revenue:

Development Review Fees: This revenue stream finished 2% below budget last year and the Community Development Department sees risk to budget attainment in the current year. Revenue collected in the first quarter was down 39% year over year, part of a continuing downtrend in local development activity. This is in line with trends in nationwide new housing starts which have been in decline since the Federal Reserve increased interest rates in 2022.

General Government: This line includes earnings on cash and investment balances which have benefited greatly from elevated interest rates. Staff expect cash interest payments to outperform budget once again, although to a lesser degree due to recent and expected policy actions by the Federal Reserve. Staff also caution that if interest rates do not decrease throughout the year as expected, we may experience negative fair market value adjustments1.

Though other fee categories show year to date results lower than 25%, we do not expect significant variances for the full year.

Expenditures:

Staffing: Salaries and benefits are as expected at this point in the year. Salaries were 24% expended, indicating salary savings to be expected at year-end. Benefits were 28% expended due to the pre-payment of certain annual costs.

Unfunded Pension Liability: This annual cost is prepaid upfront. Savings are realized as a result of this prepayment.

Contract Services: Actuals for this budget line include obligations on open purchase orders.

While 54% of budget has been obligated or expended, just 18% has been paid to vendors. Staff do not expect a variance to budget at year-end.

Other Operating Expenditures: Similar to Contract Services, actuals for this line include obligations on open purchase orders and just 17% of budget has been expended. We do not expect a variance to budget at year-end.
1 Fair Market Value adjustments are non-cash adjustments to investment income that reflect changes in the current market price of our bond holdings. Bond values are inversely correlated with interest rates, so if interest rates do not fall as expected the adjustment will reduce revenue. If rates fall more quickly than expected, the adjustment will increase revenue. Because the City generally holds investments until maturity, we do not expect any cash impact from these changes in fair value.

FY 2023-24 FY 2024-25
General Fund Expenditures Actual Budget YTD Actuals % Expended Staffing 55,754,263 $ 61,611,177 $ 15,265,541 $ 25%
Unfunded Pension Liability 12,994,935 12,886,419 12,682,728 98% Contract Services 10,721,258 13,243,317 7,091,018 54%
Other Operating Expenditures 7,671,938 8,601,412 3,149,731 37% Total 87,142,394 $ 96,342,323 $ 38,189,018 $ 40%

4 While the year to date results for the General Fund as a whole are largely as expected, two areas of risk to staffing budgets stand out:

Fire Department: Several vacant positions are driving higher than expected overtime expenditures. Four firefighter positions are currently vacant, meaning at least one shift will be filled at overtime rates daily. The department will utilize all means to reduce impacts to the budget and expects that mutual aid and other reimbursements will provide budget capacity to cover staffing costs for the remainder of the year.

Minimum Wage: Based on currently enacted laws, minimum wage will increase from $16.00 to $16.50 effective January 1, 2025. The City employs a number of temporary or seasonal employees at or near minimum wage, primarily in our Parks & Recreation Department. The Human Resources Department will present Council with a recommendation to adjust supplemental salary schedules to comply with the legislation and address compaction.

California voters narrowly rejected Proposition 32 to raise the minimum wage to $17.00 immediately and $18.00 effective January 1, 2025. A wage increase effective immediately would have created significant operational impacts on the Human Resources and Finance Departments.

If the measure had passed, complying with the new rules and addressing compaction in other positions near the minimum wage would cost the City roughly $250,000 annually.

FY 2023-24 FY 2024-25
Operating Expenditures by Department Actual Budget YTD Actuals % Expended Admin/IT 10,767,778 $ 12,196,246 $ 4,539,312 $ 37%
City Attorney 1,472,411 1,737,569 721,512 42%
Community Development 7,157,271 9,772,915 3,941,200 40% CSG Admin 829,900 669,322 241,130 36%
Finance 2,275,677 2,661,555 1,007,851 38%
Fire 15,960,639 16,983,344 7,562,775 45%
Human Resources 2,177,463 2,096,614 808,961 39%
Non-Dept/Support Services 403,850 1,226,143 108,218 9%
Parks & Recreation 5,414,249 6,003,370 1,973,922 33%
Police 23,233,179 23,845,986 10,081,924 42%
Public Works 17,038,925 18,736,984 7,040,526 38%
Utilities 411,052 412,275 161,687 39%
Total 87,142,394 $ 96,342,323 $ 38,189,018 $ 40%

5 Storm Update
As noted in prior budget reports, the winter storms in January and March 2023 caused significant damage to City infrastructure and resulted in emergency declarations at the Federal and State level, in addition to the Emergency Services Director’s local emergency proclamation. The City Council authorized use of up to $9 million from the City’s operating reserve in FY 2022-23 and FY 2023-24 to address unbudgeted storm costs, and with adoption of the 2023-25 Financial Plan, the City Council also allocated $2.75 million in the CIP to fund projects to repair storm damages and mitigate against future damage. An additional $2.1 million was allocated to storm damage repair with adoption of the FY 2024-25 Supplemental Budget. The Federal and State declarations enable the City to seek reimbursement for certain storm related costs. The maximum reimbursement for eligible costs is 93.75% (75% from the Federal Emergency Management Agency (FEMA) and 18.75% from the California Office of Emergency Services (CalOES)), meaning that the City will pay a minimum of 6.25% for certain storm related costs.

The FEMA reimbursement process continues to move slowly due to turnover in the FEMA Program Delivery Managers assigned to assist local agencies in submitting projects for reimbursement and a lack of clarity about the information required in order to submit projects. As reported in the FY 2024-25 Year-End Budget Report, FEMA is currently in a holding pattern for new obligations as the federal Disaster Relief Fund, which funds public assistance to impacted agencies, is nearly expended due to a record number of costly disasters. As of the writing of this report, Congress has not taken action to replenish the fund, but this lack of funding is not expected to put the City’s projects in danger. As previously reported, the current lack of Federal funding is causing delays in projects being obligated for funding, which is expected to impact the timing of reimbursement. In the last several weeks, the City’s FEMA liaisons have indicated a general slow down in project review, due to intense focus by FEMA on the recent hurricanes in the Gulf Coast region. Staff continues to closely monitor actions at the Federal level, as the ability to pay back the operating reserve and fund future storm-related projects is dependent on receiving reimbursement for incurred storm costs.

The City has expended approximately $13 million on storm response to date, including debris removal, emergency protective measures, and projects to make permanent repairs to damaged facilities. As noted in the prior quarter, total expenditures have not changed significantly from the prior quarter because many projects are in the design phase. Storm related cost estimates continue to shift as projects are scoped, designed and completed. Currently, the estimated total cost to repair all storm related damage is $48.4 million, consistent with what was reported in the FY 2024-25 Year-End Budget Report. Up to this point, in order to expedite project delivery to mitigate storm damage, staff has used a streamlined procurement process, including the authorization of construction contracts and change orders by the City Manager where necessary and allowable to expedite work in order to protect community health and safety. As previously noted, all storm-related expenditures have been submitted to FEMA for reimbursement and are in various stages of FEMA’s review and evaluation process. As Based upon staff delivery capacity, FEMA reimbursement timeframes, and the upcoming 2025- 27 Financial Plan process, staff continues to work on the highest priority storm damage projects in order to advance them for funding consideration with the 2025-27 Financial Plan and will continue the process to obtain FEMA reimbursement during the delivery process. The projects that are shown in Table 6 below represent the highest priority projects for delivery at this time

6 based upon the need to mitigate previously completed projects, protect existing infrastructure, and/or identify projects that must be completed.

The two tables below provide an overview of the current status of storm projects. The first table details all storm projects that staff believes should advance, including their respective current phases and the percentage of work completed to date. The second table outlines work that is not deemed urgent at this time and will be assessed as part of the 2025-2027 Financial Plan to determine priority and appropriate funding sources.

Row # Projects by Phase - Storm Funding and Staff Resources Advancing Project Development Percentage Complete Project Initiation 0% 1 Mitigation Planting 0%
Replant and vegetate emergency project areas
Design 24%
2 Prefumo Creek Grade Structure 25%
3 Phase I - Remove damaged grade control structure and install RSP roughened ramp. 25% 4 Phase II - Install new sewer siphon. 25%
5 Prefumo through Golf Course 50%
6 Phase 1 - Install City Owned Ped bridge 50%
7 SLO Creek at Elks Lodge 18%
8 Phase 1 - Install RSP on East Side (Elks Side) - armor embankment due to Caltrans revetment 25% 9 Phase 2 - Install creek bank revetment on Elks Lodge side downstream of Elks Lodge 25% 10 Phase 3 - Install soil nail wall on Hwy 101 side of SL Creek near Elks Lodge 5% 11 SLO Creek at Mission Plaza 10%
12 Remove and install structural sidewalk 10%
Grand Total 21%

7 Water Fund Summary
The Water Fund’s year-to-date results are generally in line with expectations. The Water Fund’s year-to-date results align closely with projections, showing expected trends across revenue and expenditure categories.

Revenue:

Revenues are only 13% received as of report drafting due to only one month of Service Charges and Base Fees having been collected and recorded. Staff do not expect a significant variance in budget for the full year.

Investment and Property Revenue: This line includes earnings on cash and investment balances. The fund is expected to benefit from the current interest rate environment and meet or exceed its revenue budget. The higher interest earnings may help offset other revenue shortfalls, should they occur, and strengthen the Water Fund’s financial position. Staff anticipates that cash interest payments will again exceed the budget, though to a lesser extent than previous years due to recent and anticipated Federal Reserve Policy actions.

Other Revenue: The Other Revenue line item is primarily funded through revenues in the Other City Licenses and Permits (recycled water construction water permits), Miscellaneous Penalties (customer late fees), Sales of Surplus Property, Development Review Fees, and Utilities Setup Fees. This line reflects an over-collection partially due to the timing of Journal Entries allocating a portion of Setup Fees and Miscellaneous Penalties (customer late fees) to the Sewer Fund, as well as unbudgeted revenue from Sales of Surplus Property and Construction Water Permits.

Service Charges and Base Fees: Only one month of Service Charges and Base Fees have been collected and recorded at the time of reporting. Staff do not anticipate a significant variance from the annual budget.

State Grants: State grant allocations, attributable to a Prop 1B Grant, are projected to align with expected funding levels and are anticipated to be received on schedule within the fiscal year’s budget framework.

FY 2023-24 FY 2024-25
Water Revenue Actual Budget YTD Actuals % Received
Cal Poly Capacity & Resilience 233,025 $ 263,433 $ 271,026 $ 103% Investment and Property Revenue 1,759,115 50,000 - 0%
Other Revenue 525,148 139,000 174,676 126%
Service Charges and Base Fees 26,088,324 28,102,022 3,204,408 11% State Grants 613,814 - 22,946 Total 29,219,426 $ 28,554,454 $ 3,673,056 $ 13%

8 Expenditures:

Staffing: At 21% expended, vacancies are driving significant budget savings. Current savings are likely to persist if the positions remain vacant, reducing pressure on staffing budgets for the remainder of the year.

Unfunded Pension Liability: This annual cost is prepaid upfront. Savings are realized as a result of this prepayment.

Contract Services: Actuals for this budget line include obligations on open purchase orders, which are often opened at the beginning of the fiscal year for larger year-long contracts. While 46% of budget has been obligated or expended, just 13% has been paid to vendors. Staff do not expect a variance to budget at year-end. This discrepancy is typical due to the timing of service delivery and invoicing, as well as the completion of work on open purchase orders.

Other Operating Expenditures: Similar to Contract Services, actuals for this line include obligations on open purchase orders and this line also includes annual prepayments for Nacimiento, Salinas, and Whale Rock water sources of supply. Although 67% of the budget has been obligated or spent, the fund has over $2 million in encumbrances.

FY 2023-24 FY 2024-25
Water Expenditures Actual Budget YTD Actuals % Expended Staffing 4,595,744 $ 5,167,733 $ 1,095,990 $ 21%
Unfunded Pension Liability 833,466 789,926 779,802 99%
Contract Services 810,950 1,212,318 553,952 46%
Other Operating Expenditures 11,880,657 15,527,544 10,480,909 67% Total 18,120,818 $ 22,697,521 $ 12,910,653 $ 57%

9 Sewer Fund Summary
The Sewer Fund’s year-to-date results are generally in line with expectations.

Revenue:

Investment and Property Revenue: This line includes earnings on cash and investment balances. The fund is expected to benefit from the current interest rate environment and meet or exceed its revenue budget. The higher interest earnings may help offset other revenue shortfalls, should they occur, and strengthen the Sewer Fund’s financial position. Staff anticipates that cash interest payments will again exceed the budget, though to a lesser extent than previous years due to recent and anticipated Federal Reserve Policy actions.

State Grants: The State Grant allocations are projected to align with anticipated funding levels and are expected to be received as scheduled within the fiscal year’s budget framework. 100% of the revenue collected is attributable to the CalOES grant.

Other Revenue: Other Revenue during Q1 is primarily attributed to Industrial User Permits, where revenues are received as user permits expire, and Prop 1B IRWM Grant Funding for the WRRF project. A small amount was also made up by Administrative Citations, Sales of Surplus Property, Development Review Fees, and Sewer Wye Abandonment and Installations.

Long Term Debt Proceeds: These borrowings are used to fund construction of the Water Resource Recovery Facility (WRRF) and were originally budgeted in FY 2023-24. The timing of borrowings is based on construction progress and may not align with projections.

Service Charges and Base Fees: Like the Water Fund, only one month of Service Charges and Base Fees have been collected and recorded at the time of reporting. Staff do not expect a significant variance to budget for the full year.

10 Expenditures:

Staffing: At 22% expended, vacancies are driving the budget savings. The majority of current vacancies are expected to be filled by the end of calendar year 2024.

Unfunded Pension Liability: This annual cost is prepaid upfront. Savings are realized as a result of this prepayment.

Contract Services: Actuals for this budget line include obligations on open purchase orders.

While 72% of budget has been obligated or expended, just 18% has been paid to vendors. Staff do not expect a variance to budget at year-end.

Other Operating Expenditures: Similar to Contract Services, actuals for this line include obligations on open purchase orders. 14% of budget has been paid to vendors. This approach safeguards budget stability and ensures that key expenditures can be met as obligations are fulfilled.

FY 2023-24 FY 2024-25
Sewer Expenditures Actual Budget YTD Actuals % Expended Staffing 4,616,421 $ 5,127,912 $ 1,125,870 $ 22%
Unfunded Pension Liability 851,453 782,976 772,941 99%
Contract Services 1,256,919 1,303,478 937,167 72%
Other Operating Expenditures 2,647,401 2,874,769 1,020,248 35% Total 9,372,194 $ 10,089,135 $ 3,856,226 $ 38%

11 Parking Fund Summary
The Parking Fund’s year-to-date results are generally in line with expectations.

Revenue:

Lower parking rates were in full effect for the quarter and these results present an opportunity to test the fiscal impact of the new rate structure. While 22% of budget has been collected through the first quarter, there is no indication that parking activity has decreased. Staff is closely monitoring parking revenue and will provide a comprehensive update after two quarters of results.

Expenditures:

Unfunded Pension Liability: This annual cost is prepaid upfront. Savings are realized as a result of this prepayment.

Contract Services: Actuals for this budget line include obligations on open purchase orders.

While 63% of budget has been obligated or expended, just 14% has been paid to vendors. Staff do not expect a variance to budget at year-end.

FY 2023-24 FY 2024-25
Parking Revenue Actual Budget YTD Actuals % Received
Long Term Parking 702,797 695,300 137,108 20%
Other Revenue 3,733,272 664,884 304,679 46%
Parking Fines 1,190,030 1,288,000 261,581 20%
Parking Meters 5,927,488 5,805,900 1,189,441 20%
Parking Structures 1,757,776 1,843,700 414,473 22%
Total 13,311,364 $ 10,297,784 $ 2,307,281 $ 22%
FY 2023-24 FY 2024-25
Parking Expenditures Actual Budget YTD Actuals % Expended Staffing 1,752,249 $ 1,866,748 $ 447,853 $ 24%
Unfunded Pension Liability 238,826 244,373 241,241 99%
Contract Services 862,591 782,601 490,487 63%
Other Operating Expenditures 967,528 965,304 225,224 23% Total 3,821,194 $ 3,859,026 $ 1,404,804 $ 36%

12 Transit Fund Summary
The Transit Fund’s year-to-date results are generally in line with expectations.

Revenue:

Federal and State Grants: This revenue is dependent on timing of capital expenditures and drawdowns needed to fund operations. As a result, variances to budget are to be expected and will be offset by expenditure variances, resulting in no impact to fund balance.

Expenditures
Unfunded Pension Liability: This annual cost is prepaid upfront. Savings are realized as a result of this prepayment.

Contract Services: Actuals for this budget line include obligations on open purchase orders.

While 92% of budget has been obligated or expended, just 13% has been paid to vendors. Staff do not expect a variance to budget at year-end.

Other Operating Expenditures: Similar to Contract Services, actuals for this line include obligations on open purchase orders. 13% of budget has been paid to vendors.

FY 2023-24 FY 2024-25
Transit Revenue Actual Budget YTD Actuals % Received
Federal 3,486,773 $ 12,469,861 $ 482,677 $ 4%
Local (Bus Fare) 1,000,790 976,000 243,837 25%
Other / Interest Revenue 379,651 - - State 1,501,111 3,613,325 644,107 18% Total 6,368,325 $ 17,059,186 $ 1,370,621 $ 8%
FY 2023-24 FY 2024-25
Transit Expenditures Actual Budget YTD Actuals % Expended Staffing 332,611 $ 348,165 $ 67,870 $ 19%
Unfunded Pension Liability 57,283 45,725 45,139 99%
Contract Services 3,592,192 4,630,217 4,279,735 92%
Other Operating Expenditures 431,255 424,715 376,523 89% Total 4,413,341 $ 5,448,821 $ 4,769,268 $ 88%

13 Special Revenue Fund Summaries
Tourism Business Improvement District
The Tourism Business Improvement District (TBID) assessment is set at 2% of the lodging industry’s gross receipts. The program annually aligns its operating budget with its anticipated revenues.

Revenue:

The TBID receives revenue in the form of a transfer from the general fund of 20% of Transient Occupancy Tax (TOT) collections. Staff expect TOT revenue to finish on budget or better.

Expenditures:

The TBID procures many of its services in advance, leading to a high percent of budget expended early in the year. The fund is expected to finish on budget for the full year.

Boysen Ranch Conservation Fund
Boysen Ranch consists of approximately 116 acres bounded by Los Osos Valley Road, Foothill Boulevard, and O’Connor Way. The City holds a series of conservation easements that protect approximately 25 acres of the Ranch to mitigate impacts to wetlands and waters caused by the nearby commercial development projects on Los Osos Valley Road. As part of the original easement agreement, Boysen Ranch’s owners provided the City with an endowment to fund required monitoring activities.

Revenue:

FY 2023-24 FY 2024-25
TBID Revenue Actual Budget YTD Actuals % Received
Tourism Assessment 2,210,661 $ 2,117,251 $ 341,692 $ 16% Other / Interest Revenue 56,643 - - Total 2,267,304 $ 2,117,251 $ 341,692 $ 16% FY 2023-24 FY 2024-25
TBID Expenditures Actual Budget YTD Actuals % Expended
Staffing 216,518 $ 237,466 $ 49,682 $ 21%
Unfunded Pension Liability 43,573 32,234 31,821 99%
Contract Services 1,869,690 1,863,737 1,568,618 84%
Other Operating Expenditures 20,130 34,100 1,689 5%
Total 2,149,911 $ 2,167,537 $ 1,651,810 $ 76%
FY 2023-24 FY 2024-25
Boysen Ranch Revenue Actual Budget YTD Actuals % Received Investment Income 18,353 $ 2,000 $ - $ 0%
Total 18,353 $ 2,000 $ - $ 0%

14 The Boysen Ranch Conservation Fund is an endowment fund and its budgeted revenue is provided by investment income. The fund is expected to benefit from the current interest rate environment and meet or exceed its revenue budget.

Expenditures
The fund budgets for authorized conservation activities and significant variances are not expected at year-end.

Insurance Fund
The Insurance Fund serves to pay the City’s annual premiums for liability, workers’ compensation, special events, volunteer, and property insurance needed to protect the City and to manage fluctuations in claims-related expenses. The budget for the insurance fund has been supplemented over time with expenditures from the Office of the City Attorney and the Human Resources Department, which continue to incur costs which could fall under the intended use of the Insurance Fund. Staff intend to revisit where these costs are incurred in future planning cycles.

Revenue:

Insurance Fund revenues are transfers in from the General Fund and will finish on budget.

Expenditures:

The Insurance Fund budgets for insurance premiums and claims and is intended to maintain adequate reserves for future claims. While recent actions to reduce premiums for Workers’ Compensation insurance have delivered savings, additional contributions from the General Fund may be necessary to build and maintain adequate reserves according to City policy and actuarial estimates. . The City’s Fund Balance and Reserve Policy establishes that the Insurance Fund will maintain a minimum reserve (undesignated fund balance) to cover 150% of the average claim costs for the past five years, which totals $993,498 for the five-year period FY20 to FY24. The policy also states that actuarial information will be taken into consideration. Based on the most recent actuarial study dated November 18, 2024, the City should maintain a reserve of $3,392,000 for liability claims and $1,578,000 for workers’ compensation claims, totaling $4,970,000, to FY 2023-24 FY 2024-25
Boysen Ranch Expenditures Actual Budget YTD Actuals % Expended Contract Services 9,135 10,136 2,636 26%
Total 9,135 $ 10,136 $ 2,636 $ 26%
FY 2023-24 FY 2024-25
Insurance Fund Revenue Actual Budget YTD Actuals % Received Transfers In 6,175,000 $ 6,000,000 $ 3,000,000 $ 50%
Total 6,175,000 $ 6,000,000 $ 3,000,000 $ 50%
FY 2023-24 FY 2024-25
Insurance Fund Expenditures Actual Budget YTD Actuals % Expended Contract Services 1,605,230 $ 2,610,281 $ 785,744 $ 30% Other Operating Expenditures 3,149,326 3,114,838 2,211,679 71% Total 4,754,556 $ 5,725,119 $ 2,997,423 $ 52%

15 achieve a 75% confidence level. The insurance fund reserve is anticipated to be $2,891,767 at the end of FY25.

Public Safety Equipment Replacement Fund
The Public Safety Equipment Fund (PSEF) was created with the 2019-21 Financial Plan to help budget and forecast the replacement of Public Safety equipment that has expired or become damaged. The Fund had received an original seed amount with the 2019-20 budget and, going forward, an annual allocation is made from the Local Revenue Measure.

Revenue:

The fund receives revenue in the form of transfers in from the General Fund and will finish on budget.

Expenditures:

The fund budgets for replacement of public safety equipment currently in service and is expected to finish the year on budget.

San Luis Ranch CFD
A Mello-Roos Community Facilities District (CFD) was established and approved by City Council on April 16, 2019 (Ordinance No 1661) pursuant to section 5.02 of the San Luis Ranch Development Agreement. The boundaries of the CFD are identical to the San Luis Ranch Specific Plan and includes 131.4 acres approved for up to 580 dwelling units and commercial development, a 200-room hotel, 100,000 square feet of office space, 150,000 square feet of retail space, 7.8 acres of parks/ open space, and 52.3 acres of farmed agriculture land. The purpose of the CFD is to fund major road improvements, potable and non-potable water system improvements, drainage system improvements, wastewater system improvements, solid waste improvements, park and paseo improvements, open space improvements, and utilities.

FY 2023-24 FY 2024-25
Public Safety Fund Revenue Actual Budget YTD Actuals % Received Transfers In 171,322 $ 167,334 $ 83,667 $ 50%
Total 171,322 $ 167,334 $ 83,667 $ 50%
FY 2023-24 FY 2024-25
Public Safety Fund Expenditures Actual Budget YTD Actuals % Expended Other Operating Expenditures 601,116 404,020 168,546 42% Total 601,116 $ 404,020 $ 168,546 $ 42%

16 Revenue:

The fund collects property tax from residents under the Teeter Plan with the County and is expected to finish the year on budget or better.

Expenditures:

The fund budgets for authorized expenditures, largely debt service, and is expected to finish the year on budget.

Avila Ranch CFD
A Mello-Roos Community Facilities District was established and approved by City Council on October 24, 2017 (Resolution No 10844) pursuant to section 5.02.1 of the Avila Ranch Development Agreement. The CFD boundaries are identical to that of the Avila Ranch Development project and located at the northeast corner of Buckley Road and Vachell Lane. The Avila Ranch Project will include up to 720 dwelling units, 15,000 square feet of office and retail, 18 acres of parks, 53 acres of open space, riparian corridors and farmed agricultural land. The CFD was formed with purpose of funding services as well as facilities of the CFD. Services to be funded can include the maintenance and lighting of parks, parkways, streets, roads, and open space; flood and storm protection services; police & fire protection services; maintenance and operation of real property. Facilities to be funded can include park, recreation, parkway, and open space facilities; construction and undergrounding of utilities (water, natural gas, telephone lines, electric, cable television); for the acquisition, improvement, or rehabilitation of real property.

Revenue:

The fund collects property tax from residents under the Teeter Plan with the County and is expected to finish the year on budget or better.

FY 2023-24 FY 2024-25
San Luis Ranch CFD Revenue Actual Budget YTD Actuals % Received Property Tax 1,274,999 $ 1,000,250 $ 10,879 $ 1%
Interest on Investment 592,271 - - Total 1,867,271 $ 1,000,250 $ 10,879 $ 1% FY 2023-24 FY 2024-25
San Luis Ranch CFD Expenditures Actual Budget YTD Actuals % Expended Contract Services 9,145 $ 22,043 $ 13,081 $ 59%
Debt Service 911,650 949,450 539,850 57%
Staffing - 26,530 - 0%
Total 920,795 $ 998,023 $ 552,931 $ 55%
FY 2023-24 FY 2024-25
Avila Ranch CFD Revenue Actual Budget YTD Actuals % Received Services Special Tax 232,761 $ 477,025 $ 0 $ 0%
Facilities Special Tax 23,738 46,623 0 0%
Total 256,499 $ 523,648 $ 0 $ 0%

17 Expenditures:

The fund budgets for authorized services expenditures including maintenance, utilities, and supplies, and is expected to finish the year on budget. Prior year actuals were lower than budget due to the timing of services performed. All unexpended funds fall to fund balance and are available for expenditure in future years.

FY 2023-24 FY 2024-25
Avila Ranch CFD Expenditures Actual Budget YTD Actuals % Expended Authorized Services 58,758 363,416 129,054 36%
Total 58,758 $ 363,416 $ 129,054 $ 36%

18 CIP Update
In the first quarter, CIP Engineering Project Managers made progress across various project phases. Four projects reached completion, including the revitalization and opening of Cheng Park and the completion of the parking structure maintenance projects on Palm Street, which encompassed work on two structures. In addition, 14 projects are actively under construction, and 7 projects are under contract and are anticipated to enter the construction phase soon. The City has 3 projects which are currently in the advertising phase, seeking competitive bids.

In addition, staff has made significant efforts on several legacy and major projects, which are currently in the design phase or are expected to go to bid shortly. These projects represent critical investments in the City's future infrastructure and are detailed in a separate table below.

19

20

21 Major City Goals Update
One Major City Goal task had an original completion date in the current quarter:

Climate Action, Open Space, & Sustainable Transportation | Preserve and Enhance Convenient and Equitable Alternative and Sustainable Transportation Options | Strategic Approach 4.3c
Responsible Department: Public Works
Original Completion Date: FY25 Q1 | Updated Completion Date: FY25 Q4 Active Transportation Plan (ATP) Tier 1 Network - Foothill Complete Street Project: Continue design of active transportation and safety improvements along the Foothill Blvd. corridor between the western city limits and California Blvd., with goal to have shovel-ready project for construction in FY2025-27.

Status Update: This task will be delayed due to staffing vacancies in the Transportation Division.

There is currently one vacant full-time Transportation Planner-Engineer position and one vacant contract Transportation Planner-Engineer position that have yet to be filled. Applicant interviews for the vacant full-time position are scheduled for mid-November, 2024. The contract position was previously advertised for recruitment during summer of 2024, but no applications were received from candidates who met minimum qualifications and/or with relevant experience. Staff will discuss interest in contract position with unselected candidates from the full-time recruitment. It should be noted that there have been ongoing challenges with attracting qualified applicants with any relevant work experience with recent recruitments for open Transportation Planner-Engineer positions. The current timeline for Foothill Complete Street is as follows:
 Draft Corridor Plan Released for Public Review – Complete  Public Outreach & Input on Draft Corridor Plan – June 2024 through March 2025  Final Corridor Plan Release – June 2025
 PS&E for Phase 1 Improvements – FY2025-26 (if funded)  Construction Initiation for Phase 1 Improvements – FY2026-27 (if funded) One Major City Goal task had an original completion date in FY24 Q4 and an updated completion date in the most recent quarter:

Housing & Homelessness | Housing Element Implementation | Strategic Approach 3.1f Responsible Department: CDD; City Attorney
Original Completion Date: FY 24 Q4 | Status: Complete
Implement Below Market Rate Housing best practices including leveraging affordable housing fund revenues, down payment assistance programs, streamlined processing of loan documents, and updated policies and procedures.

Status Update: This task was completed on September 17, 2024 with the adoption of the an ordinance to update the City's Development Impact Fee Deferral Program for Eligible Affordable Housing Projects. Previous implementation components of this task included leveraging affordable housing revenues from the State’s Homekey and Pro-Housing Incentive programs,

22 developing the Avila Ranch Downpayment Assistance Program Guidelines, and updating Below Market Rate Housing Purchase Guidelines in October 2023.

Setting the Stage
2025-27 Financial Plan
The Strategic Scan is meant to inform the financial planning process by providing an overview of important statistical information that provides trends and patterns pertaining to social, economic, and environmental factors. This will help set the stage for an overview of the City’s services and how the budget is allocated.

In making resource allocation decisions, the City must balance numerous considerations to provide the highest possible level of service to our community. These considerations are visualized below:

At this time, there are three major factors influencing development of the 2025-27 Financial Plan.

These include: 1. Changes to state laws and mandates that impact delivery of services; 2. macroeconomic conditions that influence our revenues and continue to drive up the cost of doing business; and 3. the cost to serve the community as it grows.

Regulatory Environment: State legislation and mandates
The State of California signs into law hundreds of bills each year, many of which have a direct impact on cities. Staff presents a summary of these bills in the annual State Legislative Briefing.

This report will focus on those legislative items with the greatest impact on City budgets.

While this report focuses on the budgetary implications of implementation, these investments often provide meaningful community benefit and in the case of ballot initiatives are enacted based on approval from a majority of voters.

The costs to comply with new legislation are not always readily apparent, but all new requirements impose some cost. Even simple changes require time to implement, taking scarce resources away from other priorities. Significant changes may necessitate adding or repurposing existing resources.

Planning and Building related legislative changes
The State of California continues to pass legislation that directly impacts planning and project permitting, especially housing projects. While the legislation is meant to streamline the approval process for projects and remove barriers to housing production, a number of regulations require a significant amount of up-front work from Community Development to ensure compliance. This work includes ongoing updates to processes and procedures, creation of new programs, and amendments to the municipal code. In some cases, the City will be required to address the mandated changes through technological updates that include Community Development, Finance and IT staff as well as consultants. For example, some of the recent legislation that was passed will require:
 Strict adherence to review timelines for housing projects, with potential legal and fiscal consequences for non-adherence, this could result in the need for additional reviewers, or updated practices, if the case levels remain as high as they have been in the past (AB 1893).
 Increased transparency and requirements surrounding fees. This will require the City to develop new tools for the public to estimate fees, and provide additional information online about the fee program, and change our fee processes. In addition, improvements are necessary to the fee program and technology used to facilitate the fee program in order to ensure compliance with these new state laws (SB 937, AB 2663, AB 3012 and AB 1820).  Changes to ADU law, SB 9 laws regarding lot splits and duplexes, as well as SB 628, which will allow subdivision of single-family lots to accommodate up to 10 units. In addition to the increased penalties for non-compliance with review timelines, the state has made changes to ADU law, SB 9, and SB 628 regulations that will likely require updates to the city codes and standards as well as additional education and process improvements to facilitate projects. (SB 1211, AB 2533, SB 450)

 Development of a pre-approved ADU process, which will require staff to develop and implement this new program (AB 1332).

Depending on the impact of these changes, it may be necessary to consider additional or supplemental staff to facilitate these changes and/or review projects within required timelines set by the State.

It can be challenging to plan ahead for the fiscal and time impacts that implementing these changes can present, as the legislation is usually unknown at the time of budget development, and new laws are signed every year. For this reason, it is important to ensure that some staff capacity is reserved to address the needs that arise from the annual changes in state law. For the purposes of this discussion, staff anticipates that the new planning and development related laws will take a significant amount of staff time to address in the beginning of the budget cycle, with the most significant impacts to Planning, Building and Safety, IT, and the City Attorney’s Office. Staff also recommends retaining staff capacity throughout the budget cycle to ensure the City is able to address ongoing changes required by state law and changes in interpretation of state law.

In addition, the Building and Safety Division will facilitate the adoption of the 2025 Building Code, which will primarily begin in July 2025 when the state publishes the updated standards. This update requires a significant amount of effort from the Building and Safety Division, with assistance from the Fire Department and City Attorney’s Office. The time involved in this effort should be considered when determining staff capacity for work program items.

Limitations on Property Tax Increases – Propositions 13 & 19 Proposition 13 was approved by voters in 1978 and, among other things, capped the property tax rate at 1% of assessed value and limited increases in assessed value to 2% per year, regardless of market value appreciation. Prop 13 allows reassessments only when properties are sold or otherwise change ownership. The official name of the ballot initiative was the “People’s Initiative to Limit Property Taxation” and part of the intent was to prevent displacement of retired homeowners living on fixed incomes.

According to the All-Transactions House Price Index for California published by the Federal Reserve, California housing prices have increased at a compound annual growth rate of 8.1% since 1978 and are now 13 times higher than when Prop 13 was passed.

The City of San Luis Obispo has historically seen growth in property tax revenues well in excess of the 2% limitation. This has generally been attributed to changes in ownership of properties that have benefited from years or decades of below market assessment increases. When homes are sold in San Luis Obispo, new homeowners on average pay substantially higher property taxes based on the new assessed value at the transaction price.

Proposition 19, also known as “The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act,” was approved by California voters on November 3, 2020, and places additional limitations on reassessments. Specifically, Prop 19 created new reassessment exclusions for inherited properties and allows residents aged 55+, the severely disabled, and victims of natural disasters to transfer their lower assessed values to new properties

when they move. The intent of this bill was to prevent the displacement of those inheriting valuable properties and to allow greater mobility within the state.

While precise data on the demographics of home buyers is not readily available, based on the 2023 County Assessor’s report, the county as a whole realized a net assessed value loss of $106.8 million as a result of Prop 19 value transfers. The 2024 countywide loss was $74.7 million, which, based on a reasonable allocation, would result in a roughly $13,000 revenue impact to the City. Going forward, the assessed values of properties within the City and County are expected to be impacted by Prop 19, though overall decreases to assessed value and property tax receipts are not expected due to continued growth of assessed value in line with Prop 13.

The Taxpayer Protection and Government Accountability Act This California Business Roundtable (CBRT) sponsored initiative qualified for the November 5, 2024 ballot, but after strong opposition from Cal Cities and a broad coalition of local governments and advocates including the Governor, it was removed from the ballot by the California Supreme Court.

The Act would have severely limited local control and specifically would have placed significant limitations on Cities’ ability to assess fees for services provided. Staff caution that while the Act was struck down from the most recent ballot, the CBRT may pursue other avenues to pass legislation with the same goal and the same detrimental impact to cities.

Diablo Canyon Power Plant Relicensing
The Diablo Canyon Power Plant (DCPP) is the last active nuclear power plant in California and provides roughly 9% of the state’s energy. The plant was originally planned for closure beginning in 2024. Based on increasing demand for clean energy and the closure of other plants, the California Public Utilities Commission (CPUC) granted a five-year license extension that allows PG&E to operate the Unit 1 reactor until October 31, 2029, and the Unit 2 reactor until October 31, 2030. During this time, the Nuclear Regulatory Commission (NRC) will consider a 20-year license extension for DCPP. If the NRC approves the license renewal, Diablo Canyon could continue operating until the 2040s.

The closure or continued operation of the plant would have significant economic implications for both San Luis Obispo County and the state as a whole. If the plant closes, the local economy would face job losses (1,500+ high-paying positions), reduced tax revenues, and broader negative effects that would ripple through the regional economy. However, if the plant remains open, the community also faces risks and liabilities, including the potential for costly accidents or safety concerns, ongoing challenges with long-term waste storage, and limited future uses for the site. Additionally, under California Senate Bill 1090, PG&E's unitary tax for DCPP will gradually decrease to zero by August 2025. For context, in 2023, the County received $14 million in property tax revenue from the plant. Without a new property tax agreement after 2025, the County could face budget shortfalls that impact its ability to fund vital services for the community. The City will need to stay engaged and work closely with other local governments and PG&E to help mitigate the impacts.

State Debt Capacity:

In the last 12 months voters approved $26.4 billion in new state bonds:
 Prop 1 from March 5, 2024 ballot added $6.4B to be repaid over 30 years for affordable housing and behavioral health treatment facilities
 Prop 2 from November 5, 2024 ballot added $10B to be repaid over 35 years to repair and modernize K-12 and community college facilities
 Prop 4 from November 5, 2024 ballot added $10B to be repaid over 40 years for safe drinking water, wildfire prevention, and protection from climate change According to the State Legislative Analyst’s Office, the state had $70.9B outstanding and another $23.6B authorized but unissued general obligation bonds as of January 1, 2024. The newly authorized debt is equal to 37% of the current outstanding amount, a considerable increase for a single year.
https://lao.ca.gov/LAOEconTax/Article/Detail/798
While there is no direct impact to the City from these bond issuances, staff note two possible takeaways. First, California voters are certainly willing to invest in improving their communities and address the needs of the day with debt financing. A less optimistic conclusion is that the state will have limited capacity to address the challenges of tomorrow by the same means.

Minimum Wage:

For much of the 20th century, California’s minimum wage increases did not keep up with inflation.

In 2016, Governor Jerry Brown signed a bill to correct that with phased increases from $10.00 per hour up to $15.00 by 2022. The minimum wage has since been further increased to $16.00 and will increase again to $16.50 on January 1, 2025.

The chart below compares increases in California’s minimum wage (in red) and the Consumer Price Index (in blue) going back to 1968, the earliest date that the Federal Reserve publishes California minimum wage data. By 2023, minimum wage finally caught up to cumulative cost of living increases.

https://fred.stlouisfed.org/graph/?g=1zFQt
While this change was necessary to address historical inequities, the increase over the last ten years has been dramatic. Since 2014, the minimum wage has increased by 78% while the consumer price index increased 32%.

https://fred.stlouisfed.org/graph/?g=1zG2Z
On November 5, 2024, voters narrowly rejected Proposition 32, a ballot measure to increase the minimum wage to $17.00 immediately and $18.00 on January 1, 2025. Many supplemental and intern positions at the City are paid the minimum wage or at an hourly rate indexed to the minimum. The annualized cost to increase wages for these employees without creating compaction issues was estimated at roughly $250,000. Implementation of the immediate increase would have created significant operational challenges for the Human Resources and Finance departments and especially payroll staff.

Macroeconomic Conditions: Increased cost of doing business Inflation
Inflation generally refers to the annual increases in the Consumer Price Index (CPI), Personal Consumption Expenditures Price Index (PCE), and other measures of household spending.

These indices are based on the cost to purchase a basket of goods consumed by the typical US urban household.

These and other, similar metrics are useful to measure increases in the cost of living over time and, in line with the City’s labor philosophy, pay a competitive wage to attract and retain high quality employees. They do not, however, accurately measure price increases in the City’s nonstaffing expenditures.

According to data from the Federal Reserve, the Consumer Price Index has risen 33% in the last ten years at a compound annual growth rate of roughly 3%. Most of that increase is attributable to the post-COVID inflationary period, when year over year CPI increases peaked at 9% in June 2022.
https://fred.stlouisfed.org/graph/?g=1AnDA
The California Construction Cost Index (CCCI) is published by the California Department of General Services and reports cost trends for specific construction trade labor and materials in the California market. This index is more representative of the costs to complete our Capital Improvements Program than the CPI.

https://www.dgs.ca.gov/RESD/Resources/Page-Content/Real-Estate-Services-Division-Resources-List-Folder/DGSCalifornia-Construction-Cost-Index-CCCI While the CCCI has followed the CPI’s trend of sharp increases post-pandemic, the overall increase has been much more drastic. In the last ten years the CCCI increased 64% in total at a compound annual growth rate of over 5%. This difference in price increases for different goods and services helps illustrate the challenges the City is experiencing in delivering its Capital Improvement Program within engineer’s estimates and budgets.

Actual costs
Indexes are useful tools for estimating price changes for a broad variety of purchases, but they rely on numerous assumptions. They assume consumption of a basket of goods in ratios intended to align with the purchasing patterns of the most typical consumer. The City may purchase a drastically different selection of goods and services from the index. Some examples of specific goods and services purchased by the City and the price increases observed in the last ten years are included in the table below.
100
125
150
175
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
CCCI
Item Unit 2014 Price 2024 Price % Change
Maintenance access cover Each $11,499.00 $13,500.00 17% Slurry Seal Sq Yd $1.70 $2.20 29%
Electricity $/kWh $0.16 $0.28 78%
Roadway Signs Each $85.00 $225.00 165%
OSHA Compliance (low cost) Per Project $1,100.00 $2,990.00 172% OSHA Compliance (high cost) Per Project $15,127.00 $30,300.00 100% CalTrans Compliance Per Project $1,000.00 $3,500.00 250%

These costs impact the level of service the City is able to provide, and for fee funded programs, the cost that is charged to the community.

Sales Tax Revenue
Sales tax is the City’s largest source of revenue and benefited greatly from post-pandemic consumer trends. With limited options to travel and direct stimulus, consumers increased spending on taxable goods. As inflation took hold, this spending plateaued.

While current revenue levels are high as community members and visitors continue to spend while prices are elevated, near zero growth rates present a challenge for the next financial plan.

Source: HdL Companies
Interest rates
To combat record inflation, the Federal Reserve increased its policy rates in an effort to reduce aggregate demand and cool the economy. Higher interest rates have since reverberated throughout the markets. The City invests its cash balances in low risk, short duration securities which benefited greatly from these market conditions.

Since the end of the last fiscal year, the Federal Reserve has reduced its benchmark interest rate by 75 basis points and has signaled further reductions. The future course of interest rates is highly uncertain. Still, rates are high compared to recent years and should market rates follow the Fed’s projections, the City will continue to benefit from higher investment income.

While the City benefits from higher investment income, we also see negative impacts from higher interest rates. Development activity is highly sensitive to borrowing costs and we have observed a slowdown in development and fee revenues since interest rates began to increase. There is also some evidence that higher interest rates are weighing on sales tax earned on rate sensitive -5%
0%
5%
10%
15%
20%
25%
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 Sales Tax Growth Rates
State City

purchases like new cars and building materials. The City may also see higher borrowing costs if debt financing is needed for future infrastructure projects and rates remain elevated. https://fred.stlouisfed.org/graph/?g=1AADx

Costs Associated with a Growing Community
The City offers a high level of service to its residents. This is possible at least in part because of the tax revenue generated from out of town visitors who come to San Luis Obispo to vacation, enjoy the downtown, shop in big box stores, or purchase cars.

As a result, our City sees per capita taxable sales of nearly double the statewide average:

Source: HdL Companies
According to Census data, the City’s population grew 4% in the ten years from April 1, 2010, to April 1, 2020, and grew another 5% from April 1, 2020, to July 1, 2023. Many of the new community members welcomed in recent years moved into our specific plan areas bordered in purple in this map, which can also be accessed in high resolution at the link below:

https://www.slocity.org/home/showpublisheddocument/5857/637371427716100000 Much of this development activity has occurred at the perimeter of the city. This can increase the need for additional infrastructure construction and maintenance. For instance, development on the City’s Southern border will necessitate construction of a fifth fire station, and development in the Western portion of the City, when combined with regional trips, contribute to the planned construction of an interchange over Highway 101 at Prado Road. These two projects are projected to cost several times our annual capital expenditures budget.

Community growth also contributes to demand for basic services provided by the City like public safety, recreation opportunities, and more. Data suggest that residents are in fact engaging with the City more often and using more of the services we provide. Over the last ten years, demand for a broad variety of services has grown more quickly than the population:

The community has also shown its willingness to pay for these services, as evidenced by the passage of Measure G-20 in November 2020. Since passage, the City’s Capital Improvements Program budget has tripled and the City has hired a number of Full Time Employees (FTE) to provide increased service levels and add new programs.

These investments in the capital budget and staff have enabled the City to keep up with increased demand for its services over the last few years. As the City develops the next Financial Plan, it will be necessary to moderate expenditure growth in order to hold space in the budget for the significant infrastructure investments that the City has committed to. Staff expects that reprioritization of existing resources will be needed in order to fund any new programs or services. 2014 2024 % Change
Public Safety Calls for Service 34,659 41,683 20%
Fire Service Responses 5,192 7,119 37%
Building Inspections 8,996 9,948 11%
Youth Athletics Participants 1,200 1,368 14%
Open Space Acres 3,510 4,040 15%
Trail Mileage 49 67 37%
City Attorney
Human Resources
Finance
Utilities
Police
Public Works
CDD
CSG Admin
Fire
Admin/IT
Parks &
Recreation
11 11
53 71
81 89.75
0 25
50 75
100
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Cumulative FTEs Added Since July 1, 2019

Setting the Stage – General Plan Implementation
2025-27 Financial Plan
The City’s General Plan is the blueprint for growth in the City that addresses all City programs and services. The General Plan has 396 programs that are contained within the eight elements, or chapters, of the General Plan. Summaries of each element are provided below. Each year, the City of San Luis Obispo reports progress on General Plan (including Housing Element) implementation to the State of California, as required. The General Plan annual report that was presented to City Council last spring, can be found here. The full General Plan can be found here.

It should be noted that the implementation of the General Plan, including carrying out the programs in the General Plan require a significant amount of staff time each year, as the programs in the General Plan represent both ongoing core activities as well as one-time programs and projects that help move the City toward its goals. The only element that is required to be periodically updated is the Housing Element, which must be updated every eight years, per state law. In addition, the State closely monitors the City’s progress toward successful completion of the programs in the Housing Element. Information on the status of these programs can be found in the annual report noted above. Staff anticipates that planning for the update of this element will begin toward the end of the 2025-27 financial plan. In addition to the programs included in each of the general plan elements, City staff will also be working on implementing a number of other plans throughout the 2025-2027 budget cycle. These plans include, but are not limited to:
 Climate Action Plan
 Active Transportation Plan
 Economic Development Strategic Plan
 DEI Strategic Plan
 Homelessness Response Strategic Plan
 Parks and Recreation Blueprint for the Future
 Police Department Strategic Plan
 Fire Department Strategic Plan
 Vision Zero Action Plan
 Wastewater Collections Infrastructure Renewal Strategy  Water Treatment Infrastructure Renewal Plan Strategy
General Plan Elements
Land Use Element: There are 73 programs in the Land Use Element. These programs set forth a pattern for the orderly development of land within the City's planning area. This pattern should be based on residents' preference and on protection of natural assets unique to the planning area. The Element also describes the expected level of population growth resulting from construction of the kinds of housing units included in the plan, as well as the kinds of new commercial and industrial development that are responsive to the City's economic needs.

Circulation Element: There are 69 programs in the Circulation Element. These programs recognize implications of land use policy on all modes of movement and sets up policies, standards, and implementation measures that work with the Land Use Element update and address both existing and potential circulation opportunities and deficiencies.

Housing Element: There are 65 programs in the Housing Element. The City updated the Housing Element in December 2020. The changes to housing policies and programs reflect the changing needs, resources, and conditions in the community, and respond to changes in state and federal housing law.

Noise Element: There are 8 programs in the Noise Element. These policies supply the proper protections needed to allow development and mixture of compatible uses while protecting residents and land uses from noise impacts.

Conservation / Open Space: There are 68 programs in the Conservation/Open Space Element. These programs address protection of open space amenities and resources in detail. The Land Use Element works with this element and incorporates concepts such as clustering and buffering open space areas to enhance their protection.

Safety Element: There are 34 programs in the Safety Element. These programs find hazards that influence the locations and types of land uses proposed. The Land Use and Safety Elements share several safety topics. The Land Use Element update adds to the Safety Element through the inclusion of safety through environmental design concepts and to airport safety policies and programs.

Parks & Recreation Element: There are 41 programs in the Parks & Recreation Element. This program supplies active recreation areas and facilities that are essential to neighborhoods. The Land Use Element works to incorporate parks and recreation into the larger land use alternative sites and enhance integration of these resources into neighborhoods.

Water & Wastewater Element: There are 38 programs in the Water & Wastewater Element. These programs supply policies and programs to support adequate services to the community. The Land Use Element includes alternatives that are in keeping with the services available and ensures that infrastructure is sized appropriately to serve future service needs and planning.

Setting The Stage – Major City Goals Update
2025-27 Financial Plan
As Council develops its Major City Goals for the next financial plan, staff presents progress against the current financial plan’s goals for consideration. Much of the information included in this report has been reported to Council in prior quarterly budget reports.

Economic Resiliency, Cultural Vitality, and Fiscal Sustainability

“In collaboration with local partners, implement initiatives that reinforce a thriving and sustainable local economy, support a diverse, inclusive, and vibrant community, preserve arts and culture, and ensure fiscally responsible and sustainable city operations.” Through September 30, 2024, 39 of 40 of tasks were completed or are on track and one task was delayed.

Diversity, Equity, and Inclusion (DEI)

“Further our commitment to making San Luis Obispo a welcoming and inclusive city for all by continuing to incorporate diversity, equity, and inclusion into all programs and policies and advancing the recommendations of the DEI Task Force.”
Through September 30, 2024, 32 of 32 tasks were completed or are on track.

ER,CV & FS
98%
3%
0%
DEI
100%
0%
0%

Housing and Homelessness

“Support the expansion of housing options for all, and continue to facilitate the production of housing, including the necessary supporting infrastructure, with an emphasis on affordable and workforce housing as well as accessibly connected development. Collaborate with local non-profit partners, non-governmental agencies, the county, the state, and federal governments to advocate for increased funding and implementation of comprehensive and effective strategies to prevent and reduce homelessness.”
Through September 30, 2024, 16 of 17 tasks were completed or are on track and one was delayed.

Climate Action, Open Space & Sustainable Transportation

“Proactively address the climate crisis and increase resiliency through the implementation of the Climate Action Plan. Use resources to reduce greenhouse gas emissions and reach carbon neutrality by 2035, with a focus on the preservation and enhancement of convenient and equitable alternative and sustainable transportation, the preservation of open space, and equitable access to parks and open space.”
Through September 30, 2024, 49 of 57 tasks were completed or are on track. Seven tasks were delayed and one additional task was delayed without an identified solution, 4.3f “Active Transportation Plan (ATP) Tier 1 Network – Railroad Safety Trail (Orcutt to Tiburon) Connection:

Initiate design and environmental review for a project that will complete the gap in the Railroad Safety Trail in the Orcutt Area between Tiburon Dr. And Orcutt Rd., including replacement of the narrow culvert on Bullock Lane and pedestrian/bicycle safety improvements at the Orcutt Road / Union Pacific Railroad Crossing”.

Task 4.3f was delayed due to ongoing negotiations with the railroad operator and developers of adjacent properties. While negotiations continue, funding was reallocated with the FY 2024-25 Supplemental Budget to projects ready to move forward immediately. For further discussion, please see the August 20th, 2024 Council Agenda Report to approve the Final Map for the adjacent property here:
https://opengov.slocity.org/WebLink/DocView.aspx?id=198657&dbid=0&repo=CityClerk HH
94%
6%
0%

CA, OS, ST
86%
12%
2%

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status

1.1 1.1 For All Members of the Community
ER,CV & FS Sustainable, Diverse, and Inclusive Economic Development 1.1 a. Implement the relevant actions in the updated
Economic Development Strategic Plan (EDSP) focusing on
those relevant to Economic Resiliency, Cultural Vitality and Fiscal Sustainability.

ADM (ED&T) Ongoing Ongoing
ER,CV & FS Sustainable, Diverse, and Inclusive Economic Development 1.1 b. Continue to partner with the Office of Sustainability to implement the economic development related actions in
the Climate Action Plan (CAP) as well as the sustainability related actions in the updated Economic Development
Strategic Plan (EDSP)
ADM
(ED&T/Sustainability) Ongoing Ongoing
ER,CV & FS Sustainable, Diverse, and Inclusive Economic Development 1.1 c. Continue to partner with the Office of Diversity, Equity and Inclusion (DEI) to implement the economic
development related actions in the DEI major City goal
and planned DEI strategic framework as well as the DEI
related actions in the updated Economic Development
Strategic Plan (EDSP)
ADM (ED&T/DEI) Ongoing Ongoing
ER,CV & FS Sustainable, Diverse, and Inclusive Economic Development 1.1 d. Continue to monitor local labor participation in major City projects and adjust the City's efforts as needed to ensure local labor participation through the use of
Community Workforce Agreements and other similar
tools. Work to finalize CWA for Prado Overpass and Public Safety Center.

PW/Util Ongoing Ongoing
ER,CV & FS Sustainable, Diverse, and Inclusive Economic Development 1.1 e. Continue to update the employment scorecard and the economic activity scorecard. ADM (ED&T)/CDD/PW/FIN Ongoing Ongoing

1.2 1.2 Business Support
ER,CV & FS Business Support 1.2
a. Continue activations, promotions and programs like"Buy Local Bonus", "Eat Local Bonus" and "Shop local" to build economic resiliency through out the City and
including downtown.

ADM (ED&T) Ongoing Ongoing
ER,CV & FS Business Support 1.2
b. Continue to work with partners at the Chamber, REACH, Cal Poly, Downtown SLO, SCORE and others to support the business community through retention, creation,
attraction, education and communication efforts.

ADM (ED&T) Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
ER,CV & FS Business Support 1.2 c. Continue to promote the City to tourists, visitors and locals through the efforts of the TBID and the PCC. ADM (ED&T) Ongoing Ongoing ER,CV & FS Business Support 1.2
d. Continue to focus on efficiency and transparency in the permitting process through implementation of new tools, performance management reporting, and enhanced
customer transparency tools. Report recurring
performance measures or permit processing times during
General Plan Annual Report.

CDD Ongoing Ongoing
ER,CV & FS Business Support 1.2
e. Ensure broad and inclusive engagement in area and
specific plans updated by the Community Development
Department to represent the needs of local businesses.

ADM (ED&T)/CDD Ongoing Ongoing
ER,CV & FS Business Support 1.2
f. Conduct outreach and engagement with property
owners and businesses in the Upper Monterey Special
Focus Area to confirm scope in pursuing an area plan
consistent with Land Use Element Policy 8.2.2.

CDD FY25 Q4 FY25 Q4
ER,CV & FS Business Support 1.2
g. Continue to support new and expanded private
childcare options through the use of grant funding and
other programs.

ADM (ED&T) Ongoing Ongoing
ER,CV & FS Business Support 1.2
h. Continue to support the childcare options for school age children through the City's own programs and
programs in conjunction with other partners.

P&R Ongoing Ongoing
ER,CV & FS Business Support 1.2
I. Proactively evaluate and implement after briefing
council on opportunities to partner with Cal Poly, San Luis Coastal Unified School District and other major employers for employer supported childcare programs.

P&R Ongoing Ongoing
ER,CV & FS Business Support 1.2
j. Represent the interests of the business community
during the implementation of the broadband strategic
plan.

ADM (ED&T) Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status

1.3 1.3 Arts & Culture Support
ER,CV & FS Downtown Vitality 1.3
a. Continue to partner with Downtown SLO to ensure the
promotion, resiliency, growth, and vitality of the
Downtown.

ADM (ED&T) Ongoing Ongoing
ER,CV & FS Downtown Vitality 1.3
b. Continue to financially and operationally support
Downtown SLO during the winter holidays including
incentivizing private participation through the matching program.

ADM (ED&T) Ongoing Complete
ER,CV & FS Downtown Vitality 1.3
c. Continue to support the Downtown SLO programs like
Clean & Safe, the Ambassadors and homelessness
support.

ADM (ED&T) Ongoing Ongoing
ER,CV & FS Downtown Vitality 1.3
d. Develop a Council report and Study Session on
downtown vacancies, the status and possible options to
address any issues identified.

ADM (ED&T) FY24 Q2 Complete
ER,CV & FS Downtown Vitality 1.3
Develop an implementation plan for the recently adopted Access and Parking Management Plan and begin
execution of the plan.

PW Ongoing Ongoing
ER,CV & FS Downtown Vitality 1.3 f. Begin construction of the Cultural Arts District Parking Structure. PW FY24 Q2 Complete ER,CV & FS Downtown Vitality 1.3
g. Replace the existing Mission Plaza Restrooms in
compliance with Mission Plaza Concept Plan and Council
Direction.

PW Ongoing Ongoing

1.4 1.4 Downtown Vitality
ER,CV & FS Support Arts and Culture 1.4 a. Continue to work with our community partners to ensure the Cultural Vitality of the City.

P&R/ADM (NR&S)/ADM
(ED&T) Ongoing Ongoing
ER,CV & FS Support Arts and Culture 1.4 b. Continue to execute the City's public art master plan. P&R Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
ER,CV & FS Support Arts and Culture 1.4
c. Ensure that the City promotes the various City and
privately owned art installations through programs like the public art promotional plan developed by the PCC.

ADM (ED&T) Ongoing Ongoing
ER,CV & FS Support Arts and Culture 1.4
d. Continue to financially support the Arts and Cultural Activities of the City through the PCC's GIA program and the additional grant funding via the PCC.

ADM (ED&T) Ongoing Ongoing
ER,CV & FS Support Arts and Culture 1.4 e. Continue the citywide banner program. ADM (ED&T) Ongoing Ongoing ER,CV & FS Support Arts and Culture 1.4
f. Continue to support the preservation of the City's
adobes, including work on the La Loma Adobe through a
phased approached intended to ensure that the structure is ready for active stabilization efforts by 2025.

ADM (NR&S) FY25 Q4 FY25 Q4
ER,CV & FS Support Arts and Culture 1.4
g. Initiate implementation of the consultant
recommended phased approach to update the City's
historic resources inventory.

CDD FY24 Q2 Complete
ER,CV & FS Support Arts and Culture 1.4
h. Develop a Council Memorandum on the current base
level of economic support for Arts and Cultural activities across the various departments in the City.

ADM (ED&T) FY24 Q2 Complete

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status

1.5 1.5 Practicing Fiscal Responsibility
ER,CV & FS Ensuring Fiscal Responsibility and Sustainable City Operations 1.5 b. Conduct a Study Session on alternative capital project delivery options and determine whether Council wishes to proceed with a Charter Amendment. PW/Util Ongoing Ongoing ER,CV & FS Ensuring Fiscal Responsibility and Sustainable City Operations 1.5 c. Implement a City fee program update. CSG FY24 Q4 Complete ER,CV & FS Ensuring Fiscal Responsibility and Sustainable City Operations 1.5 Continue to implement and enhance the City's sound financial management practices to support stability of the organization and services provided to the community. Fin Ongoing Ongoing ER,CV & FS Ensuring Fiscal Responsibility and Sustainable City Operations 1.5 d. Implement a Development impact fee (AB1600) study and update. CSG FY24 Q3 FY26 Q2 ER,CV & FS Ensuring Fiscal Responsibility and Sustainable City Operations 1.5 e. Monitor Public Banking advances and alert the City Council to major changes. Fin Ongoing Ongoing ER,CV & FS Ensuring Fiscal Responsibility and Sustainable City Operations 1.5 f. Continue to support and prioritize employee
development and growth through investing in resources
to train, develop, and onboard new and transitioningemployees.

HR/All Ongoing Ongoing
ER,CV & FS Ensuring Fiscal Responsibility and Sustainable City Operations 1.5 g. Continue to support employees in managing their workloads by reviewing and prioritizing work efforts, goals, and balancing trade‐offs for a new workload. HR/All Ongoing Ongoing ER,CV & FS Ensuring Fiscal Responsibility and Sustainable City Operations 1.5 h. Continue to evaluate and adjust internal meetings to create more effective meeting practices. HR/All Ongoing Ongoing ER,CV & FS Ensuring Fiscal Responsibility and Sustainable City Operations 1.5 i. Continue promoting cross‐department communication and collaboration amongst employees. HR/All Ongoing Ongoing ER,CV & FS Ensuring Fiscal Responsibility and Sustainable City Operations 1.5 j. Continue to evaluate and enhance the training and usability of Oracle Cloud, the City's Enterprise Resource Planning/Human Capital Management software. IT/Fin/HR Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status

2.1 2.1 Establish Office of DEI
DEI Operationalize Office of DEI 2.1
a. Based on the completion of the DEI Strategic Plan,
determine the ongoing support structure needed in the
Office of DEI to optimally deliver organizational and
community programs and services.

Admin‐DEI Ongoing Ongoing
DEI Operationalize Office of DEI 2.1 b. Work with Cal Poly and Cuesta to host interns. Admin‐DEI Ongoing Ongoing DEI Operationalize Office of DEI 2.1
c. Further develop purpose, role, activities, and enhance impact of DEI Employee Committee, including equal
standing and priority to tasks and responsibilities assigned to the members (e.g. ERGs, newsletters, cultural
celebrations, trainings, internal communication, public web pages, etc.).

Admin‐DEI Ongoing Complete
DEI Operationalize Office of DEI 2.1 d. Continue to support and act as the staff liaison to the Human Relations Commission (HRC). Admin/DEI Ongoing Complete DEI Operationalize Office of DEI 2.1
e. Continue to provide grant support to the HRC for DEI High Impact Grants, Community Development Block
Grants and Human Services Grants and complete
necessary follow up and reporting with grant recipients.

Admin‐DEI Ongoing Complete

2.2 2.2 Develop & Implement DEI Strategic Plan
DEI Develop & Implement DEI Strategic Plan 2.2
a. Complete a DEI Strategic Plan for comprehensive DEI
initiatives and programming for the organization and
community based on needs, priorities, and resource
assessments.

Admin‐DEI FY24 Q3 Complete
DEI Develop & Implement DEI Strategic Plan 2.2 b. Implementation of prioritized programs as outlined in the DEI Strategic Plan within available resources. Admin‐DEI Ongoing Ongoing

2.3 2.3 Workforce Recruitment & Retention
DEI
Foster and Promote Equitable
Recruiting, Hiring, Retention, and
Promotion Practices

2.3 a. Continue to enhance job descriptions and recruiting materials such as materials in Spanish or in different
formats to easy access.

HR Ongoing Ongoing
DEI
Foster and Promote Equitable
Recruiting, Hiring, Retention, and
Promotion Practices

2.3 b. Assess and develop enhancements processes such as implementing DEI‐focused screening and interviewing
trainings to personnel and interview panels.

HR Ongoing FY25 Q4

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
DEI
Foster and Promote Equitable
Recruiting, Hiring, Retention, and
Promotion Practices

2.3 c. Create and rollout DEI‐focused trainings for employees. HR Ongoing FY25 Q4 DEI
Foster and Promote Equitable
Recruiting, Hiring, Retention, and
Promotion Practices

2.3 d. Examine policies and programs to support primary caretakers. HR Ongoing Ongoing
DEI
Foster and Promote Equitable
Recruiting, Hiring, Retention, and
Promotion Practices

2.3 e. Continue communicating childcare options and
resources for City employees; additional to First 5
findings. Explore flex schedules, job share, remote
options, etc.

HR Ongoing FY25 Q4

2.4 2.4 Inclusive & Equitable Workplace
DEI
Enhance Inclusive & Equitable
Workplace Environment 2.4
a. Develop and adopt a DEI statement for the
organization. Admin‐DEI FY24 Q1 Complete
DEI
Enhance Inclusive & Equitable
Workplace Environment 2.4
b. Develop and implement a DEI module in new hire
onboarding process. HR Ongoing FY25 Q4
DEI
Enhance Inclusive & Equitable
Workplace Environment 2.4
c. Provide DEI‐related training for all staff of all levels (Council, Commission, Advisory Board, Directors,
Managers, Staff, etc.).

Admin‐DEI/HR Ongoing Ongoing
DEI
Enhance Inclusive & Equitable
Workplace Environment 2.4
d. Complete a planning study for gender‐inclusive
restroom and sleeping facilities for Fire Stations 3 & 4.

Process with design work pending results of study.

Public Works/Fire Ongoing Ongoing

2.5 2.5 Community‐based Policing & Restorative Practices DEI Community‐based Policing &
Restorative Practices 2.5
a. Promote DEI best practices in Police Department (PD) recruiting and hiring efforts. Admin‐DEI/PD/HR Ongoing Ongoing DEI Community‐based Policing &
Restorative Practices 2.5
b. Work in partnership with Facilities and PD to ensure new public safety building design is equitable and
inclusive for the community and all department
employees.

Admin/PD/Public Works Ongoing Ongoing
DEI Community‐based Policing &
Restorative Practices 2.5
c. Continue to work with community partners (PAC and
Roundtable) to give the community a voice in policing and that 21st Century Policing Recommendations are
implemented where possible.

PD Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
DEI Community‐based Policing &
Restorative Practices 2.5
d. Use Community partnerships to help build a 5‐year
strategic plan to create transparency and legitimacy. PD Ongoing Complete

2.6 2.6 Cal Poly & Cuesta Partnerships
DEI
Enhance and Expand Cal Poly & Cuesta
College Partnerships and Educational
Opportunities

2.6 a. Establish bimonthly collaborative and informative meetings with Cal Poly Office of University Diversity & Inclusion and Cuesta College Office of Student Equity & Special Programs to further explore partnerships around education and training.

Admin‐DEI Ongoing Ongoing
DEI
Enhance and Expand Cal Poly & Cuesta
College Partnerships and Educational
Opportunities

2.6 b. Utilize the Assistant VP for Strategic Planning and Network at Cal Poly OUDI to research best practices,
grants for internships, programs, outreach, innovative
practices, etc.

Admin‐DEI Ongoing Ongoing
DEI
Enhance and Expand Cal Poly & Cuesta
College Partnerships and Educational
Opportunities

2.6 c. Host City/Cal Poly quarterly roundtable (City & Cal Poly leadership, DEI Employee Committee, HRC, Cal Poly
students, DEI Leaders, Cuesta College, etc.) regarding
community/student experience, relationship‐building and partnership programs.

Admin‐DEI Ongoing Ongoing
DEI
Enhance and Expand Cal Poly & Cuesta
College Partnerships and Educational
Opportunities

2.6 d. Explore and develop shared multicultural programming, activities, and events with Cal Poly, Cuesta College, and Non‐profit partners through a pilot and/or pop up
multicultural center experience.

Admin‐DEI Ongoing Complete
DEI
Enhance and Expand Cal Poly & Cuesta
College Partnerships and Educational
Opportunities

2.6 e. Contract to develop a feasibility study for a
multicultural center. Admin‐DEI Ongoing Complete

2.7 2.7 Access, Inclusion, Support for Underrepresented Communities
DEI
Strengthen Public Access and
Engagement through Transformational
Strategies

2.7 a. Support the development and implementation of the Broadband Strategic Plan to ensure access is equitable
and pursue funding to fill gaps.

Admin‐DEI/IT Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
DEI
Strengthen Public Access and
Engagement through Transformational
Strategies

2.7 b. Continue to provide Community Academy program in even numbered years including application outreach tounderserved/underrepresented communities.

Admin‐DEI Ongoing Complete
DEI
Strengthen Public Access and
Engagement through Transformational
Strategies

2.7 c. Complete training for applicable staff on the City's updated Public Engagement & Noticing (PEN) to ensure
diverse participation.

Admin‐DEI Ongoing Ongoing

2.8 2.8 Community Education & Programming
DEI Equity & Inclusion in Budgeting, Planning, Programming & Policymaking 2.8 a. Review and embed DEI language into existing policies and procedures, codes of conduct within facilities, parks, programs, events, and rentals for services provided to the community.

Admin‐DEI Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
DEI Equity & Inclusion in Budgeting, Planning, Programming & Policymaking 2.8 b. Include DEI Manager Financial Planning Steering Committee meetings. Admin‐DEI Ongoing Ongoing DEI Equity & Inclusion in Budgeting, Planning, Programming & Policymaking 2.8 c. Edit existing and create new policies and procedures that reflect a DEI lens for internal processes to ensure all City Departments support the DEI MCG. Admin‐DEI Ongoing Ongoing DEI Equity & Inclusion in Budgeting, Planning, Programming & Policymaking 2.8 d. Provide financial assistance to qualified families
through City funded scholarships for youth related
programs such as: before/after‐school childcare, spring break & summer camps, swim lessons, and after‐school
sport programs.

Parks & Rec Ongoing Ongoing

3.1 3.1 Implement Housing Element
HH Housing Element Implementation 3.1
a. Initiate a missing middle housing program that enables "house‐scale" multi‐family housing opportunities (duplex, tri‐plex, bungalow court, etc.) in neighborhoods where
existing infrastructure (e.g. arterial and collector streets) can support additional infill and intensification and
promote complete neighborhoods.

CDD; Attorney FY25 Q4 FY25 Q4

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
HH Housing Element Implementation 3.1
b. Initiate an update to the Margarita Area Specific Plan to include more housing options of all types (affordable,
multi‐family, mixed‐use) on undeveloped land, and work
with property owners on a plan for the completion of the Prado Road extension to Broad Street.

CDD; PW Transportation FY25 Q4 Complete
HH Housing Element Implementation 3.1
c. Initiate an update to the Airport Area Specific Plan to allow mixed‐use residential development, where
appropriate and consistent with the County Airport Land Use Plan
CDD; Attorney FY25 Q4 Complete
HH Housing Element Implementation 3.1
d. Conduct a Study Session with the City Council to
identify needs and opportunities across the housing
spectrum, including various types of transitional and
supportive housing options.

CDD FY24 Q3 Complete
HH Housing Element Implementation 3.1
e. Develop a scope of work for possible funding as part of the 2023‐25 Financial Plan Supplement to update the
City's parking requirements in consideration of best
practices that support housing production. Strategies may include lowering parking minimums, establishing parking maximums, reducing parking requirements in areas close
to services and transit facilities, and other proven
strategies.

CDD; PW Transportation;
PW Parking Services FY24 Q3 Complete
HH Housing Element Implementation 3.1
f. Implement Below Market Rate Housing best practices
including leveraging affordable housing fund revenues,
down payment assistance programs, streamlined
processing of loan documents, and updated policies and
procedures.

CDD; Attorney FY24 Q4 FY25 Q1

3.2 3.2 Implement Inclusionary Housing Ordinance
HH
Homelessness Response Strategic Plan
Implementation 3.2
a. Work collaboratively with County and key stakeholders to coordinate regional encampment and street outreach,
including an expanded hotel voucher program to ensure a bridge for temporary emergency shelter
CDD; Attorney FY24 Q4 Complete and ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
HH
Homelessness Response Strategic Plan
Implementation 3.2
b. Increase homelessness response communications,
resource sharing, and education, including increased
public use of Ask SLO app
CDD; Admin FY24 Q4 Complete and ongoing
HH
Homelessness Response Strategic Plan
Implementation 3.2
c. Expand implementation of digital encampment
management tool internally and for potential countywide use or explore using other countywide systems shared
with other regional partners.

CDD; PW; P&R; PD; Fire FY24 Q4 Complete and ongoing
HH
Homelessness Response Strategic Plan
Implementation 3.2
d. Leverage additional funding from other partner
agencies for Mobile Crisis Unit (MCU) program, and
Community Action Team (CAT) and service expansion;
develop sustainable safe parking programs; and pilot
additional transitional shelter programs with regional
partners
CDD; PD; Fire FY24 Q4 Complete

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
HH
Homelessness Response Strategic Plan
Implementation 3.2
e. Support County and regional partners in pursuing and implementing funding resources as appropriate given the City's role for services, and transitional and permanent supportive housing, including Encampment ResolutionFunding and Project Homekey grants CDD; Admin FY24 Q4 Complete and ongoing
HH
Homelessness Response Strategic Plan
Implementation 3.2
f. Continue to develop the City's Safe Housing Outreach and Education Program, including preparation of a Council Memo on options for protecting renters, including
homelessness prevention strategies.

Attorney; CDD FY24 Q4 Complete and ongoing
HH
Homelessness Response Strategic Plan
Implementation 3.2
g. Monitor and update the two‐year Homelessness
Response Strategic Plan to align with Countywide Plan to Reduce Homelessness, other regional and state
opportunities, and in advance of next City financial plan CDD FY25 Q2 Complete

3.3 3.3 Below Market Rate Portfolio Management
HH
Environmental Clean‐up in Creeks and
Open Space

3.3 a. Environmental clean‐ups in creek and open space areas associated with abandoned personal property and trash.
(Funding approved on March 7, 2023)
P&R FY25 Q4 FY25 Q4
HH
Environmental Clean‐up in Creeks and
Open Space

3.3 b. Environmental clean‐ups in City Parks and public spaces associated with abandoned personal property and trash.
(Funding approved on March 7, 2023)
PW FY25 Q4 Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status

3.4 3.4 Financial Management
HH Public Safety 3.4 a. Maintain SLOPD bike patrol program as staffing allows PD FY25 Q4 Ongoing HH Public Safety 3.4
b. Implement the new Community Service Officer
program over the next fiscal year to ensure effectiveness and improvements in quality of life surrounding
homelessness issues in the downtown (funding approved
on March 7, 2023)
PD FY24 Q1 Complete

4.1 4.1 Implement the Climate Action Plan and Lead by
Example 2023‐25 Work Plans
CA, OS, ST Implement the Climate Action Plan and Lead by Example 2023‐25 Work Plans 4.1 a. Continue to install electric vehicle chargers and replace fleet vehicles as needed with all‐electric alternatives as called for by CAP Lead by Example task 1.1.A . Public Works Ongoing Ongoing CA, OS, ST Implement the Climate Action Plan and Lead by Example 2023‐25 Work Plans 4.1 b. Continue to electrify the bus fleet as called for by CAP Lead by Example task 1.1.A. Public Works Ongoing Ongoing CA, OS, ST Implement the Climate Action Plan and Lead by Example 2023‐25 Work Plans 4.1 c. Complete installation of solar panels at the City's Bus Yard, Fire Station 1, and Sinsheimer Pool as called for by CAP Lead by Example task 1.1.A. Public Works / Administration FY25 Q2 FY25 Q2 CA, OS, ST Implement the Climate Action Plan and Lead by Example 2023‐25 Work Plans 4.1 e. Apply the "Sustainable SLO" mark to City infrastructure and assets and conduct a general awareness outreach
program as funding and staff resources allow, as called for by CAP Lead by Example task 1.1.B.

Administration Ongoing Ongoing
CA, OS, ST Implement the Climate Action Plan and Lead by Example 2023‐25 Work Plans 4.1 f. Provide ongoing support for Central Coast Community
Energy Policy and Operations Board Members, and
engage in staff level policy and program development, as called for by CAP Clean Energy task 1.1.A
Administration Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
CA, OS, ST Implement the Climate Action Plan and Lead by Example 2023‐25 Work Plans 4.1 g. Pursue funding, and if feasible, create the "Green and Healthy Buildings” service to educate the community and connect building owners with resources, federal funding, incentives, financing, contractors, and streamlined
permitting as called for by CAP Green Buildings Task 2.1.B,

2.1.C, and 2.1.D, and CASE Program HE‐4.7.

Administration / CDD Ongoing Ongoing
CA, OS, ST Implement the Climate Action Plan and Lead by Example 2023‐25 Work Plans 4.1 h. Continue to monitor impacts to Municipal Code 8.11
(All‐Electric New Buildings), and if necessary return to Council with an alternative approach to achieving the
City's climate action goals as they relate to new buildings.

Administration / CDD FY24 Q4 Complete
CA, OS, ST Implement the Climate Action Plan and Lead by Example 2023‐25 Work Plans 4.1 i. 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.

Administration / CDD Ongoing Ongoing
CA, OS, ST Implement the Climate Action Plan and Lead by Example 2023‐25 Work Plans 4.1 j. Continue SB 1383 implementation by developing an
inspection and enforcement program and complying with
procurement requirements for organic waste and paper
as called for in CAP Circular Economy task 1.1.A and 1.1.B.

Utilities Ongoing Ongoing
CA, OS, ST Implement the Climate Action Plan and Lead by Example 2023‐25 Work Plans 4.1 k. Continue to support the IWMA on facilitating the City's edible food recovery programs as called for in CAP Circular Economy task 1.1.C, 1.2.A, and 1.3.A. Utilities Ongoing Ongoing CA, OS, ST Implement the Climate Action Plan and Lead by Example 2023‐25 Work Plans 4.1 Sustain, Manage, and Enhance the City's Greenbelt and Make Progress on Planting 10,000 trees by 2035 Public Works / Administration Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status

4.2 4.2 Sustain, Manage, and Enhance the City's Greenbelt and Make Progress on Planting 10,000 trees by 2035

CA, OS, ST
Sustain, Manage, and Enhance the
City's Greenbelt and Make Progress on
Planting 10,000 trees by 2035

4.2 a. Actively implement opportunities to purchase open space lands and permanent land conservation agreements
in furtherance of the City's Greenbelt Protection Program as called for by CAP Natural Solutions task 1.1.A.

Administration Ongoing Ongoing

CA, OS, ST
Sustain, Manage, and Enhance the
City's Greenbelt and Make Progress on
Planting 10,000 trees by 2036

4.2 b. Complete installation of adopted trail systems at the Irish Hills Natural Reserve and at Miossi Open Space. Parks and Recreation Ongoing Ongoing

CA, OS, ST
Sustain, Manage, and Enhance the
City's Greenbelt and Make Progress on
Planting 10,000 trees by 2037

4.2 c. Identify and implement trail alignment revisions, iffeasible, and other solutions to reduce erosion and wet weather closures and address trail user safety and
enjoyment at Reservoir Canyon Natural Reserve.

Parks and Recreation Ongoing Ongoing

CA, OS, ST
Sustain, Manage, and Enhance the
City's Greenbelt and Make Progress on
Planting 10,000 trees by 2038

4.2 d. Continue Open Space education activities including the "hikes with experts" series, Junior Ranger Camp, and
ongoing public information and programming, with
emphasis on equity and equitable access.

Parks and Recreation /
Administration Ongoing Ongoing

CA, OS, ST
Sustain, Manage, and Enhance the
City's Greenbelt and Make Progress on
Planting 10,000 trees by 2039

4.2 e. Continue implementation by Ranger Service staff of all Open Space maintenance activities including establishing a replacement schedule for Open Space trailhead
improvements, as well as replacement or repair of Open
Space fencing currently in disrepair, all as set forth in the adopted Open Space Maintenance Plan
Parks and Recreation Ongoing Ongoing

CA, OS, ST
Sustain, Manage, and Enhance the
City's Greenbelt and Make Progress on
Planting 10,000 trees by 2040

4.2 f. Continue ongoing Ranger Service patrol of Open Space areas ensuring compliance with the City Open Space
regulations, the safety of users, and protection of natural resources values and functions.

Parks and Recreation Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status

CA, OS, ST
Sustain, Manage, and Enhance the
City's Greenbelt and Make Progress on
Planting 10,000 trees by 2041

4.2 g. Implement priority projects at Righetti Hill Open Space consistent with the Conservation Plan (if adopted in May 2023).

Parks and Recreation Ongoing Ongoing

CA, OS, ST
Sustain, Manage, and Enhance the
City's Greenbelt and Make Progress on
Planting 10,000 trees by 2042

4.2 h. Continue to work with community groups on tree
planting in creeks and open space areas toward the goal of 10,000 trees by the year 2035 as called for in CAP
Natural Solutions task 2.1.A.

Administration / Parks
and Recreation Ongoing Ongoing

CA, OS, ST
Sustain, Manage, and Enhance the
City's Greenbelt and Make Progress on
Planting 10,000 trees by 2043

4.2 i. Continue to expand climate‐informed maintenance
practices in the Greenbelt through external funding and partnerships, and conduct ongoing monitoring on carbon
sequestration results and other co‐benefits for existing and potential future projects, as called for in CAP Natural Solutions task 2.1.B.

Administration Ongoing Ongoing

CA, OS, ST
Sustain, Manage, and Enhance the
City's Greenbelt and Make Progress on
Planting 10,000 trees by 2044

4.2 j. Continue to implement rehabilitation efforts throughout the City's open space network where storm damage has
occurred to trails, access roads, and other open space
infrastructure.

Parks and Recreation /
Administration Ongoing Ongoing

CA, OS, ST
Sustain, Manage, and Enhance the
City's Greenbelt and Make Progress on
Planting 10,000 trees by 2045

4.2 k. Continue partnership with City Farm SLO to install site security and access measures and to implement California Farmland Conservancy Program grant scope of work.

Administration / Parks
and Recreation Ongoing Ongoing

4.3 4.3 Preserve and Enhance Convenient and Equitable Alternative and Sustainable Transportation Options

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 a. Active Transportation Plan (ATP) Tier 1 Network ‐ Higuera Complete Street Project: Complete final design
and construction of active transportation and safety
improvements along Higuera Street corridor from Marsh
St. to Los Osos Valley Rd.

Public Works FY25 Q3 FY26 Q4

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 b. Active Transportation Plan (ATP) Tier 1 Network ‐ South/King Crossing: Complete design and construction of a new protected bicycle/pedestrian crossing at the
intersection of South St. & King St., improving access to Meadow Park, Hawthorne Elementary, and existing active
transportation routes.

Public Works FY25 Q3 FY26 Q2

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 c. Active Transportation Plan (ATP) Tier 1 Network ‐ Foothill Complete Street Project: Continue design of active transportation and safety improvements along the
Foothill Blvd. corridor between the western city limits and California Blvd., with goal to have shovel‐ready project for construction in FY2025‐27.

Public Works FY25 Q1 FY25 Q4

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 d. Active Transportation Plan (ATP) Tier 1 Network ‐ California/Taft Roundabout: Complete final design and
right‐of‐way acquisition for new roundabout at the
California Blvd. & Taft St. intersection, with goal to have shovel‐ready project for construction in FY2025‐27.

Public Works FY25 Q4 FY25 Q4

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 e. Active Transportation Plan (ATP) Tier 1 Network ‐ Paving Project Complete Street Elements: Implement
complete street and safety improvements as part of 2023 and 2024 summer paving projects as guided by the Active Transportation Plan and Traffic Safety/Vision Zero reports.

Public Works Ongoing Ongoing

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 f. Active Transportation Plan (ATP) Tier 1 Network ‐ Railroad Safety Trail (Orcutt to Tiburon) Connection:

Initiate design and environmental review for a project that will complete the gap in the Railroad Safety Trail in the Orcutt Area between Tiburon Dr. and Orcutt Rd., including replacement of the narrow culvert on Bullock Lane and
pedestrian/bicycle safety improvements at the Orcutt
Road/Union Pacific Railroad Crossing.

Public Works FY25 Q4 Deferred

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 g. Active Transportation Plan (ATP) Tier 1 Network ‐ Foothill/California Railroad Crossing Improvements:Complete design and initiate construction of federally‐ funded pedestrian safety improvements at railroad
crossing.

Public Works FY25 Q4 FY25 Q4

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 h. Active Transportation Plan (ATP) Tier 1 Network ‐ Prado Creek Bridge Replacement: Complete design of new
bridge, including sidewalks, protected bike lanes, and
additional vehicular lanes to accommodate existing and
future traffic demand. Includes reconstruction of S.

Higuera/Prado intersection with additional capacity and protected intersection features to improve safety for
pedestrians and cyclists.

Public Works Ongoing Ongoing

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 i. Active Transportation Plan (ATP) Tier 1 Network ‐ Prado/US 101 Interchange: Complete project approval
and environmental document phase of project, and
initiate design phase for new interchange, which includes extension of Prado Road over US 101 to Froom Ranch
Way, with new northbound on/off‐ramps, four auto lanes, center median/left turn lanes, sidewalks and protected
bike lanes. Includes realignment of Elks Lane and
signalization of the Prado/Elks intersection.

Public Works Ongoing Ongoing

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 j. Vision Zero Implementation ‐ Update annual Traffic Safety Report to evolve into a 5‐Year Vision Zero Action Plan and continue ongoing implementation of traffic
safety projects and programs, focusing efforts on the
City's high crash/injury network.

Public Works Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 k. Transit Innovation Study Implementation: Begin
planning implementation of strategies recommended in
Final Transit Innovation Study, including incorporation of near‐term strategies as part of planned SLO Transit/RTA Short Range Transit Plan update, as called for in CAP
Connected Community Task 4.2.A and in the APMP
Strategies 1.C.

Public Works /
Administration Ongoing Ongoing

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 l. Reassess the viability of launching a citywide bikeshare system, with ongoing coordination with Cal Poly as called for in CAP Connected Communities Task 2.2.A and the
APMP strategy 1.B.1. Solicit potential bikeshare system operators if staffing resources allow and this can be done without diverting resources from delivering priority active transportation infrastructure projects.

Administration FY25 Q4 FY25 Q4

CA, OS, ST
Preserve and Enhance Convenient and
Equitable Alternative and Sustainable
Transportation Options

4.3 m. Public EV Chargers ‐ Enable public EV charger
deployment on City property, support EV charger
installation on private property, and deploy EV chargers in low‐income areas of the City as called for in CAP
Connected Community Tasks 6.1.A, 6.1.B, and 6.1.D.

Administration Ongoing Ongoing

4.4 4.4 Increase Community Resilience
CA, OS, ST Increase Community Resilience 4.4
a. In coordination with Zone 9, convene a working group to assess the current creek flow monitoring system and
provide recommendations for enhancements, as called for in CASE program FL‐3.13.

CDD / Utilities / Admin /
PW / Fire Ongoing Ongoing
CA, OS, ST Increase Community Resilience 4.4
b. Conduct a study session to consider options for funding stormwater and / or creek maintenance and flood
preparedness in support of CASE programs 3.9, 3.10, 3.11,

3.12, 3.13, and 3.14.

Utilities / Public Works /
Administration FY25 Q4 FY25 Q4

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
CA, OS, ST Increase Community Resilience 4.4
d. Evaluate opportunities to integrate climate
considerations in the City's Engineering Standards and
Specifications as called for in CASE program MH‐1.6.

Public Works Ongoing Ongoing
CA, OS, ST Increase Community Resilience 4.4
e. Provide post‐disaster recovery resources and
emergency preparedness education to vulnerablecommunity members as called for in CASE program MH‐

1.10. Fire / Community
Development Ongoing Ongoing
CA, OS, ST Increase Community Resilience 4.4
f. Initiate the development of Wildland‐Urban‐Interface Defensible Space and Home Hardening Program as called
for in CASE program FI‐5.15.

Fire FY24 Q4 FY26 Q4
CA, OS, ST Increase Community Resilience 4.4
g. Monitor funding sources and if feasible pursue a
Climate Resilience Hub planning grant with community
partners, as called for in CASE program MH‐1.8.

Administration Ongoing Ongoing
CA, OS, ST Increase Community Resilience 4.4
h. In partnership with Zone 9, seek funding to initiate the Waterway Management Plan update to incorporate
climate‐informed flood risk as called for in CASE program FL‐3.7. Initial work in this Financial Plan period is
envisioned to include identifying and securing funding, developing a project scope, and drafting a request for
proposals.

Administration FY25 Q4 FY25 Q4
CA, OS, ST Increase Community Resilience 4.4 i. Develop an Urban Creeks Vegetation Management Plan as called for in CASE program FL‐3.10. Fire / Administration Ongoing Ongoing CA, OS, ST Increase Community Resilience 4.4
j. Incorporate Traditional Ecological Knowledge into open space management decisions as called for in CASE
program OP‐7.2.

Administration Ongoing Ongoing
CA, OS, ST Increase Community Resilience 4.4 k. Implement the Mid‐Higuera Bypass Project. Public Works / Administration Ongoing FY25 Q3 CA, OS, ST Increase Community Resilience 4.4 l. Implement the Laguna Lake Dredging and Sediment Management Project. Public Works / Administration Ongoing Deferred CA, OS, ST Increase Community Resilience 4.4 m. Implement Silt Removal Projects from Priority Creek Locations. Administration / Public Works Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status
CA, OS, ST Increase Community Resilience 4.4 n Implement existing Community Wildfire Protection Plan and initiate focused update in 2024. Fire Ongoing FY25 Q4

4.5 4.5 Continue to Build City and Community Capacity for Transformational Climate Action

CA, OS, ST
Continue to Build City and Community
Capacity for Transformational Climate
Action

4.5 a. Participate in the Cal Poly Climate Corps Fellowship program to build staff capacity as called for in the CAP.

Administration / CDD /
Public Works / Utilities Ongoing Ongoing

CA, OS, ST
Continue to Build City and Community
Capacity for Transformational Climate
Action

4.5 b. Manage the Green Team to Support Lead by Example, Climate Adaptation and Safety Element of General Plan,
and Climate Action Plan implementation, as called for in CASE program MH‐1.11 and OP‐7.9.

Administration Ongoing Ongoing

CA, OS, ST
Continue to Build City and Community
Capacity for Transformational Climate
Action

4.5 c. Continue to support and empower community
collaboration for climate action, including support for the Climate Coalition and the San Luis Obispo Climate Justice Collaborative, as called for in CAP task 3.1.A.

Administration Ongoing Ongoing

CA, OS, ST
Continue to Build City and Community
Capacity for Transformational Climate
Action

4.5 d. Support regional efforts to develop the workforce required to implement the Climate Action Plan as called for in CAP task 2.2.A.

Administration Ongoing Ongoing

CA, OS, ST
Continue to Build City and Community
Capacity for Transformational Climate
Action

4.5 e. Initiate 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
Administration Ongoing Ongoing

CA, OS, ST
Continue to Build City and Community
Capacity for Transformational Climate
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.

Administration FY24 Q3 Complete

CA, OS, ST
Continue to Build City and Community
Capacity for Transformational Climate
Action

4.5 g. Continue to integrate climate action and resilience into the 2025‐27 Financial Plan development process
consistent with Budget Policy A.6 and as called for by CAP Lead by Example task 1.1. and CASE Program MH‐1.5.

Administration Ongoing Ongoing

MCG Strategy Strategic Approach # Task/ Action Responsible Department(s) Original Completion Date Updated Completion Date Status

CA, OS, ST
Continue to Build City and Community
Capacity for Transformational Climate
Action

4.5 h. As authorized by City Council (December 13, 2022) and as called for in CAP Administrative Action 6, pursue grant and other external funding sources opportunistically and strategically.

Administration Ongoing Ongoing

CA, OS, ST
Continue to Build City and Community
Capacity for Transformational Climate
Action

4.5 i. Complete steps and present recommendations and
options to maximize the reuse of wastewater per the
"Road Map" presented to the City Council.

Utilities Ongoing Complete

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: December 10, 2024
TO: Mayor and Council
FROM: Timmi Tway, Community Development Director
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 6C – PUBLIC HEARING TO CONSIDER INITIATION OF A

GENERAL PLAN AMENDMENT, SPECIFIC PLAN AMENDMENT, AND A

MODIFICATION TO AN EXISTING DEVELOPMENT AGREEMENT TO
ACCOMMODATE AN ADDITIONAL 276 RESIDENTIAL UNITS IN PLACE

OF A PREVIOUSLY APPROVED COMMERCIAL DEVELOPMENT
This correspondence provides City staff responses, shown in italics, to questions received regarding the possible initiation of a General Plan Amendment, Specific Plan Amendment and modification to an existing Development Agreement to accommodate 276 residential units in place of a previously approved commercial development within the San Luis Ranch Specific Plan (Item 6c).

1. Would the new proposed housing units count toward the City’s Regional Housing Needs Assessment (RHNA) or City growth cap?
The new market rate units would count toward the City’s 1% growth policy once developed and occupied, however they would not contribute to meeting the current State RHNA requirements applicable during the current housing element cycle because the City has already met its RHNA allocation for the “above moderate rate” category. Any deed restricted units would help the City make more progress on the allocations for lower income RHNA categories. Deed restricted affordable units are not counted toward the 1% growth policy.

2. What is the retail vacancy in the City?
As of October 2024, the functional retail vacancy rate in the City of SLO is 3%, which is low when compared to the 4.61% Los Angeles metro area retail vacancy and the 4.08% national retail vacancy rate (Brookings). This is the lowest retail vacancy rate in the City since 2015. Between 2019 and 2023, the vacancy rate has been around 5%. This data is compiled by McCarty Davis Commercial Real Estate and published each year on the City’s website.

San Luis Ranch Lot 7 Page 2

3. What is the current jobs to housing balance in the City? The jobs-housing ratio is a ratio between a measure of employment and a measure of housing in a given area of analysis. The most basic measure is the ratio of the number of jobs to the number of housing units in an area. The recommended target ranges for jobs-housing unit ratios is 1.3-1.7, and is based on the assumption that the average number of workers per household is approximately 1.5 (Ewing, 1996).

The most recent SLOCOG data on Jobs/Housing Balance is from 2019, indicating that San Luis Obispo has a Jobs/ Housing Ratio of 1.88. The 2014 LUCE was a housing focused update to specifically address the City’s jobs-housing ratio and included several housing expansion areas (Avila Ranch, San Luis Ranch, Froom Ranch). Since then, major housing projects have been approved and the housing is being constructed. Based on recent housing construction activity, which includes hundreds of new units since SLOCOG data was last published in 2019, it is likely that the City has lowered the ratio of jobs to housing to be closer to the recommended target of 1.3-1.7, however, updated numbers are not available at this time.

4. Why do the “additional” affordable housing units have a range and not a set number? Did PSHH establish that “bonus” range in 2020, or did the developer come up with this number?
Consistent with what was described in the November 2020 Council Agenda Report for the previously approved project on Lot 7, the reason for the range is that People’s Self-Help Housing (PSHH) has a number of different funding sources that use different matrices to determine award amounts. At the time the change was processed in 2020, the applicant proposed a range of additional housing units, as opposed to defining a specific number, in order to allow PSHH flexibility to present unit numbers that best qualify for each funding source in the future.

5. The Specific Plan included up to 77 affordable units on Lot 7 under the 2020 amendment. The current proposal doesn’t seem to add more deed restricted housing for the City. Can the City request additional affordable units? The additional market rate homes on Lot 7 result in a requirement for approximately 9 more deed restricted units than the previously entitled commercial project. The applicant is proposing to utilize the additional “bonus” units approved in 2020 to fulfill the increased requirement. Further details are provided on page 10 of the staff report (page 476 of the Council agenda packet), which addresses the deed restricted unit requirements. As part of this initiation process, the City Council may provide direction to staff and the applicant about the desired number of deed restricted housing units and may direct staff to negotiate with the developer for more affordable units as a benefit for the approval of this requested change and, for instance, preserving the 4 to 17 “bonus” affordable units approved in 2020.

San Luis Ranch Lot 7 Page 3

6. When it was approved, was there a requirement that the Ag Heritage Center project provide inclusionary affordable housing units? If not, why not? The Development Agreement defines the amount of inclusionary housing required for the San Luis Ranch project. The Ag Heritage Center, as approved in 2021 with a variety of ag-related buildings, historical and interpretive displays, and retail uses, does not require inclusionary housing units per the Development Agreement. At the time of approval and per initial Development Agreement negotiations, this “Ag Center” use was exempt from inclusionary housing requirements because it is not considered the same as “commercial” uses.

7. Please clarify the amount of park acreage required. Have in-lieu payments been paid instead of construction of parks in the San Luis Ranch development? Is staff satisfied that there will be sufficient park land as proposed? The General Plan calls for 5.8 acres of parks in San Luis Ranch, but that assumed a buildout of 580 dwelling units, or 1 acre per 100 homes (which translates to about 5 acres per 1,000 population). The existing 2.8-acre central park in San Luis Ranch along with in-lieu fees has satisfied that initial requirement, as recommended by the Parks and Recreation Commission (PRC) and approved by City Council with the original SLR Specific Plan. With the current proposal, there would be 350 units (276 market rate units and 69-77 affordable units) more than anticipated by the General Plan and the originally approved San Luis Ranch Specific Plan in 2018.

This would require an additional 3.5 acres of parkland within the Specific Plan area.

The proposed development concept provides substantially less than that amount within Lot 7. If the Council provides direction to move forward with the processing of this project, the PRC would be asked to evaluate whether such a proposal, in combination with in-lieu fees, would be sufficient, or whether additional parkland would be required. In its initial evaluation of the 2.8-acre central park in 2018, PRC recommended a combination of parkland and in-lieu fees to improve existing community-serving parks such as Laguna Lake Park.

In addition, Staff would like to provide a related clarification. The Agenda Report indicates that the proposed park on Lot 7 would be nearly 2 acres, as originally described by the applicant in the materials provided to the City. The applicant team has since clarified that the park site is actually 0.82 acres.

8. The project should include recreational amenities that are available for the benefit of the entire San Luis Ranch community in part to alleviate parking problems near the existing central park, which is currently the only community park. How will the project address this?
Please refer to the response to Question 7. The City Council could provide highlevel direction regarding additional amenities that they would like to see incorporated into the project should it move forward. It is unclear from the

San Luis Ranch Lot 7 Page 4
applicant’s project description if the parks on Lot 7 would be for private use by the apartments or provided for use by the general public.

9. How does the commercial property on the freeway side of Froom Ranch Way (Lot 9) play into the amount of commercial space proposed or required under the Specific Plan?
The lot in question is shown in the accompanying graphic, which shows it (“Lot 9”) in relation to the proposed project site.

While the parcel in question (4.2-acre Lot 9) is designated as NC (Commercial), it is intended for up to 100,000 SF of office uses under the Specific Plan (Table 2-3 of the Specific Plan). General Plan Policy 8.1.4 includes a performance standard of 50,000 to 150,000 SF of Office, which forms the basis of the Specific Plan requirement. While other commercial uses could be allowed on this site, it is currently intended as office use to comply with the General Plan policy. Therefore, it is not included in the applicant’s proposal for total commercial square footage, but rather remains as intended for office in accordance with the original project entitlements.

San Luis Ranch Lot 7 Page 5

10.Correspondence received by the City raised concerns about the lack of detailed plans and studies related to the development at this time. Comments addressed a variety of issues, including noise, traffic, parking, housing design and number, airport safety, and fiscal issues, among others.

At this time, the City Council is providing direction as to whether work should be initiated on the applicant’s proposed project. General Plan and Specific Plan amendments are proposed, which require City Council authorization prior to processing. If the project is initiated, and applications submitted, the development review and environmental review processes would commence. This would include detailed staff review of a formal project application, various technical studies to address key issues, and review under the California Environmental Quality Act (CEQA), which provides opportunity for public input. This would be followed by review from various City advisory bodies and the County Airport Land Use Commission before the project could ultimately be considered by the Planning Commission and City Council. At this time, it is premature for Council to provide detailed input on project design, but it is appropriate to provide “big picture” direction.

11.The roundabouts as currently designed in San Luis Ranch create pedestrian safety concerns. How will this be addressed in the context of the proposed project? Would replacing the roundabouts with traffic lights improve safety at these intersections?
Staff appreciates the concerns raised in the comment regarding public safety related to pedestrians and roadway design. These issues will be studied in detail and reviewed by City staff if an application is initiated and ultimately submitted for review.

12.There is a note on page 479 of the packet that references the ability of the hotel in the development to provide hotel room via “points.” When this happens, it implies that there is no TOT collected. Is that the case? Can you provide an explanation?
Per Municipal Code section 3.04.030, a transient occupancy tax (TOT) of 10% is charged by hotel operators to transient guests based on the “rent” charged for hotel stays. For most loyalty programs, customers do not pay taxes on points redeemed.

If guests book hotel rooms using points or other loyalty program benefits, the amount of “rent” charged to the guest decreases or may be eliminated in addition to any associated taxes that would have been collected.

San Luis Ranch Lot 7 Page 6

13.There is already a CFD in the San Luis Ranch area. Will the properties on Lot 7 become part of that CFD, or is that possible?
A CFD for the San Luis Ranch area was adopted in April 2019. Its provisions apply within the boundaries of the Specific Plan, including Lot 7. In the Council Agenda Report of April 2, 2019, staff recommended that commercial development be exempted from the special tax associated with the CFD, “unless a change of use is subsequently approved.” The City Council adopted this recommendation. Upon initial review, it appears that the new market rate units proposed in Lot 7 would be eligible for assessment under the existing CFD. There is a cap on the annual assessment amount per residential unit, however, there is not a cap on the total amount collected annually within the overall assessment area. It should be noted that the purpose of this CFD is for the financing of public improvements, not ongoing City services to serve the development. Funds from the annual assessments are used to make bond payments and cover costs related to public infrastructure. Staff could explore the creation of a new CFD that would be created for the purpose of providing public services to the units in Lot 7 should the project move forward.

14.Does the City Council have discretion to request that the developer include a higher minimum square foot of commercial space above what is currently proposed? Is it possible to raise that minimum while still maintaining the currently proposed number of residential units? Does the Specific Plan have requirements related to the size of commercial developments within the NC designation, or does it just present a maximum square footage without specifying the design or number of buildings/retailers? Yes, one of the fundamental items staff is seeking direction from Council relates to the amount of commercial development that is appropriate within Lot 7 and the overall Specific Plan, should the project move forward. As part of the Amendments that are required to be processed for this project (or a version of this project) the City could establish General Plan and zoning regulations to allow a certain number of units and specific minimum amount of commercial space. Accommodating more commercial with the same amount of residential can be accomplished through modification to the site design. If the Council chooses not to initiate the proposed amendment, existing commercial development requirements would remain in place.

The Specific Plan does not include any requirements related to how large individual commercial tenant spaces must be, but only specifies a target maximum square footage, as well as the General Plan performance standards for maximum and minimum square footage.

San Luis Ranch Lot 7 Page 7

15. What designs would be more viable for the commercial structures? What is the minimum size that is workable? If Council would like to see childcare/healthcare, etc. does that need to be called out as a specific desire? In the staff report, staff raises a concern that the commercial development, as currently designed in the proposal, may not be viable. To elaborate, in general, successful retail is on the ground-floor, and is a building of a size that provides flexibility for various types of tenants that can be subdivided or combined as tenants change over time. It is more difficult to find commercial uses that desire non-ground-floor space, especially if they are outside a downtown core or other dense area. If the Council has specific comments about other uses or specific types of commercial uses that are of interest, those comments would be helpful if the project moves forward.

16.Does the proposed new cap of 930 residential units for San Luis Ranch include the greatest number of affordable units proposed? (including the 26 original, 15 for commercial, 28 from the 276 new market rate units AND the highest number of “bonus” units – 17 – for a total of 86)
No, the 930 units includes the applicant’s current proposal: the 577 already built in San Luis Ranch, the 276 market rate units proposed in Lot 7, and up to 77 affordable units proposed in Lot 7. Any additional units in Lot 7, such as the entirety of the bonus units previously approved, would increase the maximum unit count accordingly, and the project would be processed and evaluated based on the actual number of units described in the application.

17.In the Development Agreement, has the developer been given any reduction to the standard development impact fees?
The 2018 Development Agreement included provisions to lock in development impact fees for construction of the units approved at the time of original entitlement.

These fees were based on the impact fees in place in 2018, and are substantially lower than impact fees identified in the 2024/2025 fee schedule for projects entitled today.

San Luis Ranch Lot 7 Page 8

18. What if there were a requirement for the new development to provide a transit hub? How would that be defined, do we have base requirements for what is outlined somewhere?
Bus shelters are currently provided along Froom Ranch Way and Dalidio Drive on the project frontage. A transit hub typically includes multiple bus stops and shelters, and would serve as a transfer location for multiple bus routes, such as the transit hub located downtown adjacent to City Hall. A transit hub at SLR would need to be evaluated by the City’s Transportation division to ensure routes can be adequately served and ongoing funding provided for increased bus service and infrastructure. If the City Council is interested in exploring a transit hub in this area, Council could direct staff to research an appropriate location and identify City costs that would be associated with the increased service.

19.What is the “early residential development fee” referred to in the Agenda Report?
This is a mechanism in the existing San Luis Ranch Development Agreement (DA) to address potential revenue shortfalls if the commercial development does not occur. The fee is paid per residential unit built until commercial development occurs, and this fee has been assessed by the City. The fee was negotiated in 2018 based on the estimated cost of City services to serve the residential units, given that, as an annexation area, only one-third of the property tax increment is provided to the City and property taxes alone do not cover the cost of City services for residential projects. A version of this fee, or something similar, could be renegotiated in the Development Agreement should this project amendment move forward.

20.Is the proposed Lot 7 development “connected” to the existing single-family development in SLR?
Detailed site plans have not yet been submitted for processing, however, review of initial site plans submitted for the initiation process indicates that the Lot 7 development would not be integrated with the existing single-family neighborhood.

The existing single-family development backs up to Lot 7 with solid walls along the entire rear property line, preventing through connection for most of the Lot 7 development. At the initiation meeting, City Council may provide high level direction regarding interconnectivity and increased active transportation routes through the development if the project moves forward.

San Luis Ranch Lot 7 Page 9

21.What were the original affordability requirements at the time of the previous approval? Were there variances from the requirements provided to the applicant at that time?
The staff report includes several tables that describe the affordable housing requirements. Attachment P (memo from CDD Director) includes the following table outlining the 2020 affordability requirements:

When the previous project on Lot 7 was approved in November 2020, the affordability requirement identified for Lot 7 was between 30 to 43 very-low-income units and approximately 34 commercial inclusionary units or payment of in-lieu fees (based on the total amount of commercial ultimately constructed) for a total of 64-77 units planned for construction on Lot 7. These calculations were based on the Inclusionary Ordinance in place in 2020 and did not include any variances from those requirements. The 2020 amendment did include a provision for 4 to 17 additional “bonus” units beyond code requirements, which were offered as a project benefit by the developer in exchange for relocating the 26 originally required very-low-income units from throughout the multifamily portion of the San Luis Ranch project to a 1.88 site on Lot 7.

Item 6c
Department: Community Development
Cost Center: 4008
For Agenda of: 12/10/2024
Placement: Public Hearing
Estimated Time: 60 minutes
FROM: Timmi Tway, Community Development Director
Prepared By: John Rickenbach, Contract Planner and Callie Taylor, Senior Planner SUBJECT: CONSIDERATION OF INITIATION OF A GENERAL PLAN AMENDMENT,

SPECIFIC PLAN AMENDMENT, AND A MODIFICATION TO AN

EXISTING DEVELOPMENT AGREEMENT TO ACCOMMODATE AN
ADDITIONAL 276 RESIDENTIAL UNITS IN PLACE OF A PREVIOUSLY

APPROVED COMMERCIAL DEVELOPMENT

RECOMMENDATION
Direct the initiation of processing the request for a General Plan Amendment (GPA) and Specific Plan Amendment (SPA) to accommodate an additional 276 residential units in place of a previously-approved commercial development on Lot 7 of the San Luis Ranch Specific Plan, and provide direction regarding the following issue areas to be addressed in the project design and by amendment to the existing Development Agreement (DA): 1) the number of deed-restricted affordable housing units; 2) the timing of construction of the previously-required affordable housing component; 3) potential measures to address ongoing fiscal impacts to the City; 4) the amount and design of tax-generating commercial development; and 5) confirmation of the application of development fees associated with the proposed development.

REPORT-IN-BRIEF
MI San Luis Ranch has submitted a request to amend the City’s General Plan and the San Luis Ranch Specific Plan (SLRSP) to facilitate development of an additional 276 market rate residential units in-lieu of commercial development on Lot 7 adjacent to Dalidio Drive. The proposed amendments would modify Lot 7 development to be primarily residential, with an additional 276 market rate rental apartments and up to 15,000 square feet of neighborhood commercial uses. The existing entitlements include 114,300 square feet of commercial development on Lot 7. The original 2017 SLRSP included 150,000 square feet of commercial on Lot 7, which was decreased through an amendment in 2020.

Item 6c
A Specific Plan Amendment for the SLRSP was previously approved in November 2020 to allow between 64-77 units of affordable housing to be consolidated on a 1.85-acre portion of Lot 7. This affordable housing is required to fulfill the existing inclusionary housing requirements of the San Luis Ranch Specific Plan and Development Agreement and is expected to be constructed by People’s Self-Help Housing (PSHH). The affordable housing portion of the Lot 7 site is proposed to remain with the current 2024 amendment.

When the existing affordable housing component on Lot 7 is combined with the proposed additional 276 market rate units, the total development potential proposed by the applicant on the 11.44-acre Lot 7 site is between 345 to 353 residential units and up to 15,000 square feet of commercial. This proposal would increase the overall residential development within the SLRSP from the currently approved 654 units to a proposed 930 units. The applicant’s proposal would decrease the overall commercial development within the Specific Plan from the currently approved 145,536 square feet to a proposed 38,236 square feet. These totals include the existing 31,236 square feet of commercial and agricultural processing structures at the Agricultural Heritage Center. The proposed Lot 7 site plan is depicted in Figure 2 below and included as Attachment B.

Portion of
SLRSP
Current Lot 7 Entitlement:

Approved 2020
Proposed Lot 7
2024 Applicant Proposal

1.85-acre portion
of Lot 7
 64-77 affordable units  69-77 affordable units

9.59-acre portion
of Lot 7
 114,300 sq. ft. of commercial
development
 276 market rate residential units; and,
 Up to 15,000 sq. ft. of commercial
Total Lot 7

11.44-acres
 64-77 residential units; and,
 114,300 sq. ft. of commercial
development
 345-353 residential units; and,
 Up to 15,000 sq. ft. of commercial
Applicant
Representative
General Plan
Specific Plan,
Zoning
Site Area
Environmental
Status
MI San Luis Ranch, LLC
Rachel Kovesdi
Neighborhood Commercial
(NC); allows mixed
commercial, office, and
residential uses under the
SLRSP

11.44-acres
(Lot 7 of VTTM 3096)
To be determined;
document to tier from the
SLRSP Final EIR
Figure 1. San Luis Ranch Specific Plan Area
Lot 7 is NC parcel
at corner of Dalidio and Froom Ranch Way
Subject
Site

Item 6c
The proposed amendments would have a substantial impact on the City’s fiscal revenues as compared to full build-out of the previously approved project. The Lot 7 commercial site was a key project component in the original 2017 SLR Specific Plan and was intended to be a major tax generating revenue source for the City. The site was originally approved for up to 150,000 square feet of commercial uses, as called for in the City’s General Plan Special Focus Area (SP-2) and this commercial space and associated revenue was taken into account when the City initially negotiated the Development Agreement. The site is located across from the Madonna Plaza, adjacent to the future Prado Road/Highway 101 interchange. Fiscal impact calculations provided by the City’s consultant show that the Lot 7 land use change from 114,300 square feet of commercial to 276 residential units would create a net fiscal loss to the City of approximately $1 million annually. While the proposed additional housing units would help fulfill the City’s goals for housing production, fiscal impact to the City’s revenues and preservation of prime commercial sites should be considered in conjunction with amendments to the City’s General Plan and SLR Specific Plan.

If authorized by Council to proceed, the project would require a General Plan Amendment (GPA), Specific Plan Amendment (SPA), modifications to the approved Development Agreement and Affordable Housing Agreement, as well as a new Tentative Tract Map and Development Plan. Environmental review under the California Environmental Quality Act (CEQA) will be required, however, the appropriate approach to CEQA has not yet Figure 2. Applicant’s 2024 Proposed Site Plan

1.85-acre
Affordable
Housing Site

Item 6c
been determined. Because there would be General Plan and Specific Plan Amendments, the project would be referred to the San Luis Obispo County Airport Land Use Commission (ALUC) for its review to determine conformity with the adopted Airport Land Use Plan (ALUP). If Council provides direction to move forward, staff will process the applications through the standard steps required as described in this report. At the December 10, 2024 initiation meeting, City staff is requesting input from Council regarding issues areas identified in the recommendation, which may impact the proposed project design and terms of a future modification to the Development Agreement.

POLICY CONTEXT
The proposed project is within the San Luis Ranch Specific Plan (SLRSP) and is therefore subject to the requirements of that plan. The Specific Plan also functions as the zoning code for the area in terms of land use, circulation, development standards, and residential density. The Specific Plan itself derives its authority and direction from Section 8.1.4 of the General Plan Land Use Element, which establishes the basic development and policy parameters of the SLRSP.

The City Council approved the SLRSP and Vesting Tentative Tract Map (VTTM) 3096 in July 2017, which formed the basis for various subsequent applications within the Specific Plan area, including the one currently proposed. Council also subsequently approved a Development Agreement, which is a contract between the developer and City, adopted by ordinance, in which the City provides the developer with vested development rights in exchange for the developer providing “extraordinary” public or “community” benefits that exceed what would otherwise be required through CEQA mitigation or as conditions of approval. That Development Agreement was in part based on fiscal and development assumptions inherent in the originally approved Specific Plan.

Several entitlements for individual development projects have already been processed under the existing policy framework of the SLRSP, and many of these projects are either completed or under construction, including various housing developments, an Agricultural Heritage Center, and a hotel. Backbone roadway and other infrastructure to support those developments are already in place within the Specific Plan area.

Amendments to the General Plan and Specific Plans require orderly processing consistent with the overall goals of the City’s planning program and requirements of California State law. Municipal Code Section 17.130.020 specifies that if an application to amend the General Plan is submitted, the Community Development Director shall have the authority, prior to processing the application, to forward any such application to the City Council for early policy consideration to allow Council to determine whether the proposed amendment is consistent with overall policy direction in the General Plan.

Council may direct the Director to either process the application or reject the application as inconsistent with overall General Plan policy direction. The current request for City Council initiation of the application does not constitute approval of the request and would only begin the required process for the proposed project amendments. The project will also need to be referred to the San Luis Obispo County Airport Land Use Commission (ALUC) for its review to determine conformity with the Airport Land Use Plan (ALUP).

Item 6c
If Council authorizes the current application, City staff will formally evaluate the project’s consistency with the existing policy framework in order to determine the nature and extent of amendments to the General Plan, Specific Plan, and Development Agreement that may be required. At the initiation meeting, Council may provide direction to staff and the applicant regarding any project design or land use modifications that Council would like to see incorporated into the project application and during project processing and design development. Council direction regarding specific issue areas identified in the recommendation is also requested by staff, including: 1) the number of deed-restricted affordable housing units; 2) the timing of construction of the previously-required affordable housing component; 3) potential measures to address ongoing fiscal impacts to the City; 4) the amount and design of tax-generating commercial development; and 5) confirmation of the application of development fees associated with the proposed development.

PREVIOUS ACTION
Specific Plan Amendment - November 2020
In November 2020, the City Council approved a Specific Plan amendment and density bonus for a different mixed-use project on Lot 7. The 2020 amendment increased the density of the overall SLRSP through a density bonus and transferred the majority of the inclusionary housing requirements of the SLRSP to a 1.85-acre portion of Lot 7. The remaining 9.59 acres of the 11.44-acre Lot 7 site was reserved for commercial development in November 2020, consistent with the original project approvals and the General Plan requirements.

Key aspects of the November 2020 Specific Plan amendment and project approval included:
 Increased the number of allowed residential units in the SLRSP from 580 to 654.

The increase was identified as a density bonus in order exceed the number of residential units that were identified in the General Plan Special Focus Area standards.
 Decreased the commercial development on Lot 7 from 150,000 SF (originally approved in 2017) to 114,300 SF.
 Approval of VTTM 3142, which entitled 11 lots within Lot 7 of VTTM 3096 to facilitate the subdivision of the site to accommodate mixed-use development, including up to 77 affordable housing units and 114,300 SF of commercial buildings.
 Lot 11 within VTTM 3142 included a 1.85-acre affordable housing project to be constructed by PSHH, a non-profit developer of affordable housing projects. This allowed for 64 to 77 affordable units within the NC area as part of the approved mixed-use development.

Item 6c
 Updated location of affordable housing. The original SLR Development Agreement and Affordable Housing Agreement required the majority of the project’s affordable deed-restricted housing units to be constructed within the NG-30 zoned multifamily section of the project adjacent to Madonna Road. The 2020 SPA transferred the project’s existing affordability requirement for 26 very-low-income units to the

1.85 PSHH site on Lot 7.
 The amendment acknowledged that the commercial development in the SLRSP must provide approximately 34 units of affordable housing to satisfy the inclusionary housing requirements of the project, depending on the square footage of commercial ultimately constructed. Those units were authorized to be located on the PSHH site as part of the 64-77 affordable housing units identified.  City policy requires inclusionary units to be dispersed throughout market rate development. This requirement was eliminated with the 2020 SLR Specific Plan amendment in exchange for additional affordable units and deeper affordability beyond the Inclusionary Ordinance minimum requirements. At least four (4) and up to 17 additional very-low-income housing units were added to the project for construction on Lot 7.

Figure 3 below shows the site plan approved by City Council in November 2020 for the mixed-use development on Lot 7.

An EIR Addendum was prepared to address potential changes associated with the application, and a finding was made that the SPA and VTTM were consistent with the certified Final EIR and Supplemental Final EIR for the San Luis Ranch Specific Plan. The Airport Land Use Commission (ALUC) reviewed the project on October 21, 2020. The ALUC found that the project revisions would not change the previous determination that the San Luis Ranch Specific Plan is consistent with the ALUP. The complete Council Agenda Report outlining the 2020 amendment is available here.

VTTM 3142 (approved in 2020 to facilitate the mixed-use development) has not been recorded by MI San Luis Ranch, and therefore PSHH does not have site control yet to begin development plans or apply for grants or construction funding.

Item 6c

DISCUSSION
Current Proposal
The currently proposed project for Lot 7 in the San Luis Ranch Specific Plan (SLRSP) is a primarily residential mixed-use development which would include 276 market rate rental apartments and up to 15,000 square feet of neighborhood commercial uses. A 1.85-acre affordable housing site on Lot 7 is proposed in the location approved by City Council in 2020, with a proposal for 69 to 77 affordable units to be constructed by PSHH to fulfill the San Luis Ranch project’s existing and additional required inclusionary housing obligations. The proposed 276 market rate units and up to 15,000 square feet of commercial uses would be constructed on a 9.59-acre portion of the 11.44-acre Lot 7 in place of the previously approved 114,300 square feet of commercial. Combined, a total of 353 market rate and affordable units are proposed on Lot 7. With the existing 577 residential units already constructed at San Luis Ranch, the proposed amendment would increase the total residential units within the SLRSP area to 930 units.

The 276-unit market rate rental apartment component of the project is proposed to include a mix of studios, one-bedroom, two-bedroom and three-bedroom units, designed in two different three-story building types. There would be eight 30-unit buildings and three 12- unit buildings in the development. Housing units would range in size from 650 to 1,150 Figure 3. Lot 7 Mixed-use Site Plan Approved by Council November 2020

Item 6c
square feet and the buildings would be constructed in the farmhouse architectural style, one of the styles allowed under the approved SLRSP. The development proposes to include 345 residential use parking spaces and 15 commercial parking spaces, as well as bike racks for guests and residents. The project would also include a community center, privately maintained 2-acre public park1, and walking paths that connect the central park with adjacent residential uses and offsite locations.

The proposed 0.52-acre commercial area on Lot 7 would be located in the southeastern corner of the project site at the corner of Dalidio Drive and Froom Ranch Way. The project plans show a two-story commercial building, with 3,500 square feet on each floor. A minimum of 7,000 square feet of commercial is proposed by the applicant. However, the applicant has requested flexibility to allow up to 15,000 square feet of commercial in order to respond to market conditions at the time of building permit submittal. The applicant has suggested that the site could be developed with a coffee shop, bicycle repair shop, or similar neighborhood commercial use.

Issues areas for Council Direction:

1. Affordable Housing Requirements
The originally approved 2017 Specific Plan and Development Agreement required SLR to construct either a total of 68 affordable units, or 34 affordable units and payment of inlieu fees for the commercial development, as required by the City’s Inclusionary Housing Ordinance in place in 2017. To date, eight (8) of the affordable units have been constructed.

The Specific Plan amendment approved in November 2020 transferred the 26 required very-low-income affordable units from the multi-family portion of SLR to a mixed-use project on Lot 7. As a project benefit proposed in exchange for the City allowing the transfer of the affordable units to Lot 7, the developer offered to deliver at least four (4) and up to 17 additional very-low-income housing units, thereby bringing the total affordable housing units in the PSHH project on Lot 7 to between 64-77 units. With the 4 low-income and 4 moderate-income units that were constructed in the single-family residential area, the total number of required affordable units with the SLRSP is currently 72-85. SLR has, to date, constructed 8 of these units, leaving a remaining requirement of 64-77 units unfulfilled. See Attachment P (October 31, 2024 Memo from CDD to Mayor and City Council) for tables and full analysis of previously approved 2017 and 2020 required inclusionary housing calculations.

The current project description from SLR (Attachments A, C, D, and E) proposes that PSHH will provide at least 69 and up to 77 inclusionary units for low and very-low income households on Lot 7. Specific unit counts at each level of affordability (very-low, low, or moderate income) have not yet been identified. SLR’s current proposal includes:

1 The Applicant has indicated that this park would be maintained by the management company of the apartments and open to the general public.

Item 6c
2024 SLR
Proposal
Number of
Affordable units
Location & Requirement Status
4 low-income units Required in single-family
Zoning NG-23
completed
4 moderate income
units
Required in single-family
Zoning NG-10
completed
26 very-low-income
units
Previously required within multifamily development - Transferred in 2020 from multi-family to Lot 7
Not constructed
* Planned to be developed
by PSHH
15 inclusionary
housing units
(income level not
defined)
Proposed for commercial
inclusionary, based on 2017
Inclusionary Ordinance:
 0.5 acre Lot 7 Commercial: 1 unit
 3.5 acre Hotel: 7 units
 3.7 acre Office use: 7 units
Not constructed
* Planned to be developed
by PSHH
28 affordable units
(income level not
defined)
10% of the additional 276 market
rate units proposed on Lot 7
required to be affordable, based on
current Inclusionary Ordinance
requirement (ownership units)
Not constructed
* Planned to be developed
by PSHH
Potentially between
0 to 8 additional
affordable units if
PSHH can secure
funding
Additional units beyond required
minimums no longer guaranteed in
current proposal (4-17 bonus units
were required in 2020)
Not constructed
* Planned to be developed
by PSHH
2024 SLR’s
Proposed
Total:
77-85 affordable units (total units proposed within
SLRSP)
Of this total, 69-77 are proposed to be constructed on
Lot 7 by PSHH
 8 constructed
 69-77 remaining units
unfulfilled
Exhibit F of the DA is the project’s Affordable and Workforce Housing Plan (Attachment K). Additional workforce and affordable housing beyond that required by the City’s ordinances was a key project benefit of the original SLRSP and DA.

SLR’s current proposal utilizes the bonus affordable housing units approved in 2020 to fulfill the inclusionary requirements of the 276 market rate residential units proposed on Lot 7. Based on the current Inclusionary Housing Ordinance, 10% of the 276 market rate units (28 affordable units) must be provided to meet inclusionary housing standards for ownership dwelling units. The 2020 approval included at least four (4) and potentially up to 17 additional very-low-income housing units in exchange for transferring the 26 required very-low-income units from the multi-family site to Lot 7. This allowed SLR to develop the NG-30 site without concurrent construction and intermixing of the project’s required 26 very-low-income affordable units. Staff recommends that the City Council provide direction to the applicant and staff regarding whether the additional 4 to 17 bonus units should be preserved and provided in addition to the increased requirement that would result based on the inclusionary calculations for the currently proposed project.

Item 6c
Staff’s calculations for the affordable and inclusionary housing required with the proposed project amendment are included in the table below:
2024 Staff
Calculation
Number of
Affordable units
Location & Requirement Status
4 low-income units Required in single-family
Zoning NG-23
completed
4 moderate income
units
Required in single-family
Zoning NG-10
completed
26 very-low-income
units
Previously required within multifamily development - Transferred in 2020 from multi-family to Lot 7
Not constructed
* Planned to be developed
by PSHH
15 inclusionary
housing units
or payment of in-lieu
fees
(income level not
yet defined)
Required for commercial
inclusionary, based on 2017
Inclusionary Ordinance:
 0.5 acre Lot 7 Commercial: 1 unit
 3.5 acre Hotel: 7 units
 3.7 acre Office use: 7 units
Not constructed
* Planned to be developed
by PSHH
28 affordable units
(income level not
yet defined)
10% of the additional 276 market
rate units proposed on Lot 7
required to be affordable, based on
current Inclusionary Ordinance
requirement
Not constructed
* Planned to be developed
by PSHH
Between 4 to 17
additional verylow-income units
Project benefit in exchange for
transfer of 26 very-low-income
units from multi-family site to Lot
7 in 2020
Not constructed
* Planned to be developed
by PSHH
2024 Staff
Calculation
Total:
81-94 affordable units (total units within SLR)
Of this total, 73-86 to be constructed on Lot 7
Alternatively, 58-71 affordable units could be
constructed on Lot 7 and payment of in-lieu fees made
to fulfill commercial inclusionary requirement
 8 constructed
 73-86 remaining units
unfulfilled

2. Affordable Housing Project Implementation
With respect to ensuring that the previously approved affordable housing component move forward in a timely manner, the applicant proposes that the market rate project would be willing to post a letter of credit in the amount equal to the cost of improvements necessary to provide PSHH with a buildable lot (access and utilities). (See Attachment F - Term Sheet proposed by Williams Homes)
The City is agreeable to this proposal and has been recommending that SLR record the final map (or a portion of the map as a phased map) to facilitate a shovel ready project for PSHH. Tract 3142 can be recorded by SLR at any time (in whole or as a phased final map) to facilitate this transfer of ownership. An amendment to Lot 7 is not needed to

Item 6c
complete this map recordation or post a letter of credit. Staff recommends that this approach be memorialized in the DA and included as a condition of approval, with additional specificity as to the timing of construction of the affordable housing units.

City staff is concerned that the SLRSP project has continued to build out without fulfilling its existing required affordable housing. By transferring the originally required 26 verylow-income units from the multi-family project component to Lot 7 in 2020, the requirement for concurrent construction and intermixing of affordable units was eliminated. As of today, the SLRSP area has constructed only 8 affordable units, while the market rate project components of 577 total residential units are nearly complete. City staff recommends additional timing triggers to ensure that the project’s inclusionary requirements for affordable units are constructed concurrently with any additional market rate units within the specific plan area. One such trigger that could be explored includes a provision requiring that the affordable units be provided in the market rate portion of the project if the PSHH project is not completed by a certain date, until the PSHH project is completed, at which time the units could revert to market rate. Without a requirement for concurrent construction or other timing trigger, there is no guarantee that the affordable units will ever be constructed.

3. Fiscal Impact Analysis
The SLR Specific Plan requires that the project provide economic benefits in terms of jobs, mix of uses, and long-term fiscal sustainability for the City. Extraordinary community benefits are obligated under the SLR Development Agreement, and the project is intended to create net-positive fiscal flows and economic development benefits.

Property taxes are one of the main revenue sources the City uses to fund its municipal services; however, as annexation area, the 2018 County Tax Exchange Agreement distributes only one-third (1/3) of the property tax increment to the City. Property taxes alone are not sufficient to fund the cost of City services such as fire, police, parks, and other services provided to residents. Therefore, the SLR DA requires that the City shall be kept and/or made “whole” by the developer with respect to all aspects, including without limitation, fiscal impacts of the planning, development, maintenance and operation of the SLRSP area including the costs to the City of providing public services and facilities to the project. Article 5 of the DA includes many provisions “to prevent the Project from resulting in negative fiscal impacts on City.” The mix of uses within the Specific Plan area, including tax generating commercial uses and minimum commercial square footage, were intended as a key factor in maintaining a fiscally positive project.

Applicant’s Fiscal Impact Analysis
In order to provide an idea of the fiscal impact of the proposed land use change being requested on Lot 7, the project applicant has provided a 2024 Fiscal Impact Analysis (FIA) (Attachment L) to show the overall fiscal impact to the City of the entire combined SLR Specific Plan area. The October 31, 2024 updated analysis (completed by ADE, the applicant’s consultant) compared the 2017 estimated fiscal impact of the original project (2017 FIA also completed by ADE, the applicant’s consultant), to the 2024 fiscal impact

Item 6c
of the revised project proposal. In comparison to the 2017 FIA fiscal projections, SLR’s 2024 FIA shows that the revised project results in $302,836 less to City revenues each year, in comparison to the original 2017 FIA projections.

For comparison, in 2017, the San Luis Ranch project was estimated to generate $985,976 in fiscal gain for the City annually. SLR’s 2024 Fiscal Impact Analysis states that at full buildout, the overall SLR Specific Plan area, including the proposed Lot 7 residential project, is estimated to generate about $3.43 million per year in General Fund revenues and $2.67 million per year in municipal service costs. According to the applicant, an additional $75,300 shortfall will result from the recent sale of 120 multi-family units to Cal Poly Partners (Harvest Lofts), as Cal Poly Partners is not required to pay property taxes2. This totals an annual cost/revenue surplus of $683,140 for the City from the overall SLRSP area, which is $302,836 less annually than the 2017 FIA projected.

The 2024 Applicant FIA applies outside market changes (such as increased property values, inflation, and the City’s adoption of Measure G) that make the overall SLR project appear to be more fiscally positive, despite the increased service costs and loss of commercial revenues that would result from the proposed amendment. The applicant’s FIA compares the revised project in 2024 dollars (taking into account increased property values, inflation, and Measure G) to the original project in 2017 dollars, and concludes that the SLR Specific Plan area would not be fiscally negative as a project overall, but it would generate less revenue than originally projected in 2017.

City’s Peer Review of the Applicant’s Fiscal Impact Analysis A peer review of the applicant’s FIA was conducted by the City’s fiscal consultant, EPS (Attachments M and Q). In order to gain an accurate picture of the fiscal impact of the proposed amendments, the City asked EPS to isolate the proposed land use changes and identify the fiscal impact that would result from the land use changes in 2024 dollars. EPS used ADE’s fiscal model to calculate the fiscal impact of the currently approved commercial project in 2024 dollars. EPS found that the proposed land use changes on Lot 7 will create approximately $1 million loss of revenues annually, resulting from the increased cost of City services for the addition of 276 market rate multi-family units and the loss of 114,300 to 99,300 square feet of commercial tax generating uses on Lot 7.

The City’s fiscal consultant has confirmed that the applicant is correct in its statement that the overall SLR Specific Plan area has potential to remain fiscally positive for the City, even with the proposed changes to Lot 7. However, this positive fiscal projection is a result of other variables, mainly external variables, including Measure G, inflation, and increased home values that have occurred in the past few years. While the overall SLR project may still be fiscally positive as a whole, it is not as fiscally positive as initially conceived in 2017, even with the recent market changes and Measure G considered.

There are several factors that contribute to this $1 million annual loss in revenues as well as differences in the results of the two fiscal impact studies:

2 As a point of clarification, while the analysis provided by ADE describes that Cal Poly does not pay property taxes as a State tax exempt institution, it is the City’s understanding that Cal Poly Partners is exempt from paying property taxes because of its status as a non-profit entity.

Item 6c
 Measure G, a 2020 voter approved initiative to increase local tax revenues, would substantially increase expected sales tax revenues to the City for a commercial development. The EPS peer review identified an additional $457,569 annually from Measure G revenues that would result from a 114,300 square foot commercial center.

This revenue was not taken into account in the 2017 FIA for the original project.  When the changes to Lot 7 are isolated from the rest of the Specific Plan area, fiscal impacts on Lot 7 are estimated to shift from $819,979 in net annual revenues to the City’s general fund that would be provided by commercial development, to between $163,000 and $238,000 in net annual costs to the City’s general fund to serve the residential units proposed on Lot 7. Therefore, rather than being a fiscal benefit to the City, Lot 7 creates an ongoing annual cost to City.
 TOT expected from the hotel has substantially increased in the past 7 years, with a net increase of $436,540 annually identified in the applicant’s 2024 FIA in comparison to 2017 estimates; however, it is likely that this amount of TOT may not be realized due to the fact that this hotel will allow visitors to use points to book rooms.  Assumed increases to property values create higher property tax revenues than were originally anticipated in 2017. The 2024 FIA shows a net increase of $234,403 in property taxes resulting from this market change alone.  Cost of public service expenditures for the City have increased. An increase in the number of residential units will increase the City’s costs for services, and those service costs are higher than they were per unit in 2017. Property taxes alone do not provide sufficient funding necessary for the City to serve residential development. On the cost side, the proposed additional residential development substantially adds to the level of public service costs to support the development.
 The City’s consultant, EPS, has identified potential errors in the applicant’s 2024 fiscal model. The applicant’s project description does not match the data used in the fiscal model calculations. The applicant’s fiscal model included only 853 residential units rather than the 930 units currently proposed within the SLR Specific Plan area.

The Lot 7 commercial development has been a major project component since the project’s initial conception. A requirement for 50,000 to 200,000 square feet of commercial, tax generating uses within the SLRSP area was included in the 2014 General Plan Land Use update, and was a major consideration during the tax negotiations with the County prior to annexation of the SLR site. The tax revenue expected from the 2017 originally approved 150,000 square foot commercial development on Lot 7 was a factor in the Development Agreement negotiations. The loss of expected tax revenue changes the outcome of these previously negotiated agreements.

With the currently proposed project resulting in a Specific Plan buildout with more residential and less commercial development, the fiscal benefits to the City will be substantially less than originally anticipated in the DA. The unanticipated reduction in the City’s revenue stream would likely require a modification to the financing plan included as Exhibit C in the approved

Item 6c
DA. To make up for the loss in revenues resulting from the land use changes on Lot 7, the City Council could direct the applicant and City staff to negotiate additional strategies to increase revenues for City services. Strategies such as a CFD or “early residential fee” have been used in DA’s previously to make up any shortfall to the City. Other options can be researched and negotiated by City staff and the applicant to look at ways that the proposed residential project can pay for itself.

4. Preservation of Prime Commercial Sites
While additional housing production would be beneficial to meeting the City’s housing goals, the location of that residential and the preservation of prime commercial sites should be considered when initiating a General Plan amendment. The current application proposes housing along one of the City’s key commercial corridors, directly adjacent to the Madonna Plaza commercial center. The 11.44-acre Lot 7 site is uniquely located adjacent to the future Prado Road/Highway 101 interchange. The subject site’s location on a major interchange with on and off-ramps has potential to draw regional shoppers and tourists to the site. Future tax dollars would be impacted by reducing the tax generating uses within the Specific Plan area, and the City will not be able to replace the loss of prime commercial land.

The applicant has stated that the current commercial market does not demand the amount of new commercial square footage currently required with the San Luis Ranch Specific Plan, and the site would be better utilized by allowing residential development (see Attachment N, SLR response to Fiscal Peer Review). However, City staff has concerns regarding the viability of the commercial on Lot 7 as currently designed and proposed by the applicant.

A minimum of 7,000 and up to 15,000 square feet of commercial on Lot 7 is proposed by the applicant. The proposed project plans show a two-story commercial building, with 3,500 square feet on each floor. The applicant has suggested that the site could be developed with a coffee shop, bicycle repair shop, or similar neighborhood commercial use.

Given the very small size of the commercial parcel (proposed at 0.52 acres) and limited uses that would be feasible in a two-story commercial structure, staff has concerns that the site will not accommodate meaningful tax-generating uses or become the neighborhood serving center that is suggested by the applicant. Staff requests that City Council provide input regarding the design and minimum commercial square footage that should be preserved on this commercially zoned parcel. The Council may direct the General Plan and Specific Plan amendments to proceed, subject to providing a larger minimum amount of tax generating commercial, or other desired land uses, or an alternative site design in order to preserve the viability of portions of Lot 7 as a prime commercial site.

5. Development Fees

The 2018 SLR Development Agreement included provisions to lock in development impact fees for construction of the units approved at the time of original entitlement. These fees are substantially lower than impacts fees charged on permits today. It is the City

Item 6c
Attorney’s position that the provision for lower fees does not extend to the additional 276 market rate units currently proposed for entitlement on Lot 7, as these units were not contemplated during the development and approval of the DA. Based on the 2018 DA, SLR has paid permit and impact fees of approximately $21,000 per multi-family unit.

Current development fees for multi-family units are approximately $41,000 per unit. The difference in fees between what the DA locked in for the original 580 units and current fees today equates to a total of about $5.5 million in permit and impact fees for the additional 276 housing units proposed.

The applicant is proposing to amend the DA to lock in current (2024) impact fees, amounting to approximately $5.5 million in additional development impact fee revenues to the City in comparison to the fees locked in by the 2018 DA. The additional $5.5 million identified in the applicant’s proposed term sheet (Attachment F) reflects the standard development fee required for any residential project submitted under the 2024 fee schedule. Development impact fees are adopted by City Council to cover the cost of development, including impacts to citywide transportation, fire and police, parks, and other City facilities. The City is currently working on an impact fee update, which is expected to go to Council for adoption in 2025. Payment of current fees is a standard project requirement.

City staff agrees that “then-current” fees should be applied to the additional 276 proposed residential units. The date of “current” fees shall depend on the timely submittal of the application materials and terms negotiated in the DA amendment. As required by law, development impact fees are based on the date that a vesting tentative map for the project is deemed complete, or as determined through DA negotiations. It is recommended that the fees applied to the project depend on the “then-current” fees in effect on the date that those project components are completed, rather than today’s date (December 2024) at initiation of the project.

REQUIRED ENTITLEMENTS TO IMPLEMENT THE PROPOSED PROJECT The currently proposed San Luis Ranch Lot 7 development will require the following applications if Council authorizes the project to proceed:
 General Plan Amendment –
 General Plan Land Use Element Section 8.1.4 “Special Focus Area #2” provides direction for development within the San Luis Ranch area, including 14 goals, objectives, and requirements for development. The General Plan currently identifies a maximum of 500 residential units and requires between 50,000 to 200,000 SF of commercial to be constructed in the SLR Specific Plan area. The applicant is proposing to amend Section 8.1.4 to allow a maximum of 930 dwelling units and reduce the minimum commercial requirement to allow a combination of 38,000 SF (minimum) of either agricultural (Ag Heritage Center) or commercial uses. The proposed commercial/agricultural minimum reflects the commercial and agricultural processing uses in the Agricultural Heritage Center (about 31,000 SF) as well as a minimum of 7,000 SF commercial on Lot

7. (See Applicant’s project description, Attachment C.)

Item 6c
 Under the General Plan, Lot 7 is currently designated as Neighborhood Commercial (NC). The General Plan limits residential development in this designation to a maximum of 12 dwelling units per acre. The proposed project would exceed this allowed residential density, therefore a General Plan Amendment to change the underlying land use designation is required.  Specific Plan Amendment – SLR Specific Plan would be updated to reflect proposed Lot 7 changes, proposed land use plan, and updated development standards.  Increase the overall residential development potential within the Specific Plan from 654 to 930 dwelling units;
 Decrease the minimum commercial development required under the Specific Plan to identify a minimum 38,000 SF of either commercial or Ag Heritage Center uses;
 No zone change is required because the Specific Plan designation also functions as zoning within the Specific Plan area.
 Development Agreement Amendment – The approved 2018 San Luis Ranch Development Agreement (DA) established a framework for future development of up to 580 units within the Specific Plan area, as well as the responsibilities of the developer to provide public and community benefits to the City beyond those otherwise required through mitigation measures and project conditions. Several aspects of the current development proposal, including addition of the additional residential units, would require an amendment to the existing DA.
 Affordable Housing Agreement Amendment – The SLR Affordable Housing Agreement was recorded in September 2020. It currently requires that the project’s 26 very-lowincome inclusionary housing units shall be constructed in proportion to the construction of the other units in the NG-30 Zone, which has not been done. Timing of affordable housing construction and revised number of required affordable housing units will need to be updated.
 Tentative Tract Map – Tract 3142 was approved in 2020 for an 11-lot primarily commercial development, and would not allow development of the site as the applicant now proposes. A new tentative map is required to correspond to proposed residential development, including lot configuration, grading and drainage, and site improvements.  Development Plan – ARC and PC review of proposed site development plan and architectural review will be required.
 Environmental Review – Environmental review under the California Environmental Quality Act (CEQA) will be required, but the appropriate approach to CEQA has not yet been determined.
 ALUC Review – Because there would be General Plan and Specific Plan Amendments, the project would be referred to the San Luis Obispo County Airport Land Use Commission (ALUC) to determine conformity with the adopted Airport Land Use Plan (ALUP).

Item 6c
Next Steps
Staff is seeking City Council direction on whether to proceed with the applicant’s proposed amendments. This early consideration referral to Council by the Community Development Director is an opportunity for Council to provide input on the proposed project. The current request for City Council initiation of the application does not constitute approval of the request and only begins the required process for the proposed project amendments.

If the Council provides direction to process the project applications, staff is also seeking Council direction on the specific issue areas discussed in the staff report that should be considered during the project review process and for DA term negotiations. Council may provide direction regarding any other design, land use, fiscal, or related project elements at the time of initiation in order for staff and the applicant to address these items during the entitlement processing.

Such topics could include, but not be limited to:
1) The number of deed-restricted affordable housing units  Council may identify a minimum amount of affordable housing that would be expected with a revised project and amended Development Agreement.  Staff’s recommendation is for the Council to consider whether SLR should provide 86 affordable housing units on Lot 7 to fulfill the inclusionary requirements of both the existing project (including the additional affordable units approved in 2020) and the proposed amendments. This would fulfill the inclusionary requirements of the overall commercial (15 affordable units required), the additional 276 unit market rate residential project (28 affordable units required), the project’s originally required 26 very-lowincome units, and the 17 bonus affordable units required with the 2020 amendment.
 An alternative would be to provide 71 affordable units on Lot 7 and allow SLR to pay in-lieu fees to substitute for the 15 units required for the commercial inclusionary.
2) Timing of construction of the previously-required affordable housing component
 City staff recommends additional timing triggers to ensure that the project’s inclusionary requirements for affordable units are constructed concurrently with any additional market rate units within the Specific Plan area.  As described in the report, the applicant stated that they are willing to post a letter of credit in the amount equal to the cost of improvements necessary to provide PSHH with a buildable lot, which staff is agreeable to. Staff recommends that the Council provide direction to staff regarding requiring a letter of credit for such purposes.

Item 6c
 In addition, the City Council could provide direction to explore a timing threshold that would require the provision of the required affordable housing in the Lot 7 market rate project if the PSHH units are not completed by a certain date, until the PSHH units were completed at which time the units could revert back to market rate.
3) Ongoing fiscal impacts to the City
 To make up for the loss in revenues resulting from the land use changes on Lot 7, the City Council could direct the applicant and City staff to modify the financing plan included as Exhibit C in the approved DA and to negotiate additional strategies to increase revenues for City services. Strategies such as a CFD, increased commercial square footage, or other Council direction could be added to make up revenue impacts to the City.
4) The amount and design of tax-generating commercial development, or other land uses, within the project
 Staff requests that City Council provide input regarding the design and minimum commercial square footage, or other land uses, that should be preserved or created on Lot 7.
5) Development fees associated with the proposed development.  City staff agrees that “then-current” fees should be applied to the additional 276 proposed residential units. The date of “current” fees shall depend on the timely submittal of the application materials and terms negotiated in the DA amendment and, thus, may not be the 2024 fee amounts.

If Council authorizes the proposed project and related amendments to proceed, staff will process the project through the following standard steps, including:

1. Development review of all applications by City staff

2. Environmental review under the California Environmental Quality Act (CEQA)

3. Referral to the Airport Land Use Commission for conformity with the ALUP

4. Architectural Review Commission public hearing

5. Parks and Recreation Commission public hearing

6. Planning Commission public hearing for recommendation

7. City Council public hearing for consideration of project approval Public Engagement
The item is on the December 10, 2024 Council Agenda for consideration of the initiation of this application. The public has an opportunity to comment on this item at or before the meeting. If the Council authorizes staff to proceed with processing, additional public hearings and legal notices would be provided for the ALUC, Architectural Review Commission, Parks and Recreation Commission, Planning Commission, and City Council meetings as part of the process for consideration of the application.

Item 6c

CONCURRENCE
The Council Agenda Report was reviewed by the Community Development Department, Utilities Department, Finance Department, City Attorney, and City Administration for concurrence. If the Council directs staff to proceed with the application, relevant departments and divisions would evaluate the project in detail as part of the application review.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended action in this report because Council’s action does not constitute a “Project” under Section 15378 (Project) of the CEQA Guidelines nor does the action commit the agency to a definite course of action in regard to a project as described in Section 15352 (Approval) of the CEQA Guidelines. If the General Plan, Specific Plan, and Development Agreement amendment applications and other necessary decisions move forward, the project would be subject to the appropriate environmental review as required per CEQA, which will be presented at the public hearings.

FISCAL IMPACT
Budgeted: No Budget Year: 2023-25
Funding Identified: Applicant funded
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $0 $0 $0 $0
State
Federal
Fees
Other:

Total $0 $0 $0 $0
There will be no net fiscal impact related to considering the initiation of the proposed annexation. If Council directs staff to proceed, the applicant will be required to fund the review and processing of the applications and associated analysis according to the City’s fee schedule. The applicant has already paid a Specific Plan Amendment fee deposit for this initiation process and has paid for the fiscal impact analysis and peer review that have been completed to facilitate this process. Additional fees will be required to be paid by the developer including fees related to the General Plan Amendment, Development Agreement Amendment, Development Review, Subdivision Map, and ALUC. In addition, the applicant would pay for the cost of the environmental review of the project as well as a contract planner to process the applications required for the project.

Item 6c
If the proposed project revisions are ultimately approved by the City Council upon completion of application processing, there would be fiscal impacts related to the provision of municipal services to the subject property that would be evaluated in detail as part of the application. Fiscal impact of residential verses commercial development is discussed in detail above. Development impact fees associated with the existing Development Agreement are also a major consideration for the proposed project, and should be fully evaluated as part of any DA or project amendment.

ALTERNATIVES

1. Continue review of initiation to later date and request additional information in order to evaluate the application, such as:
a. A feasibility study to evaluate the amount of vacant commercial buildings currently in the City, and evaluate the future commercial need based on buildout of the General Plan.
b. Any other studies or information deemed necessary by the City Council in order to evaluate the application for processing.

2. Direct staff to not move forward with processing the application for General Plan and Specific Plan amendments. Per San Luis Obispo Municipal Code Section

17.130.020 “The Council, upon making specific findings in reference to specific general plan provisions, may direct the director to reject the application as inconsistent with overall general plan policy direction.”

ATTACHMENTS
A - San Luis Ranch Lot 7 Project Application and Project Description (April 29,2024) B - SLR Proposed Plan Set for Lot 7 (Site Plan and Elevations) C - Applicant’s Response to Questions and Updated Project Description (July 18, 2024) D - Letter from SLR to Mayor and City Council (October 9, 2024) E - Updated Project Description from Kovesdi Consulting (October 24, 2024) F - Term Sheet proposed by Williams Homes (Sent on November 13, 2024) G - SLR Letter with attachments (November 13, 2024)
H - DA Operating Memorandum #1 (May 8, 2019)
I - DA Operating Memorandum #2 (August 20, 2020)
J - DA 1st Administrative Amendment (February 23, 2021) K - DA Exhibit F - Affordable and Workforce Housing Plan (March 6, 2018) L - San Luis Ranch Fiscal Impact Analysis (October 31, 2024 by ADE) M - Fiscal Impact Analysis Peer Review #1 (August 14, 2024 by EPS) N - SLR Response to Fiscal Peer Review (September 6, 2024) O - Memo from CDD to Mayor and City Council (September 24, 2024) P - Memo from CDD to Mayor and City Council (October 31, 2024) Q - Fiscal Impact Analysis Peer Review #2 (October 30, 2024 by EPS)

3940-7 Broad Street, #139
San Luis Obispo, CA 93401
(805) 471-2948

A CALIFORNIA CORPORATION
“Building Legacies”
April 29, 2024
Callie Taylor, Community Development Department
City of San Luis Obispo County
919 Palm Street
San Luis Obispo, CA 93401
Via email
Re: San Luis Ranch Lot 7 Residential Mixed-Use Application Submittal Dear Callie,
I hope you’re doing well.

Per our discussions over the past year, attached please find an application submittal package for a multifamily residential mixed-use project on Lot 7 of recorded Tract 3096.

Background
Since it’s conception more than a decade ago, San Luis Ranch Specific Plan has had four overarching goals:
o Diverse Range of Housing Types
o Multimodal Connectivity
o Agricultural Preservation
o Outdoor Recreation Opportunities
To date, the Specific Plan has been implemented to meet its original objectives, along with the developing needs of our dynamic community.

As we’ve discussed, the demands of City residents and workers have changed significantly since the adoption of the Specific Plan in 2018, particularly since the Covid-19 pandemic.

Prior to the pandemic, consumers were already turning to online retail vendors. The pandemic and associated lockdowns solidified and supercharged the trend toward online

3940-7 Broad Street, #139
San Luis Obispo, CA 93401
(805) 471-2948
[email protected]
2 shopping, resulting in increasing commercial vacancy rates, even in our beloved downtown. Higher commercial vacancies in turn have led to decreases in sales tax revenue to the City, as well as direct costs, in the form of lower downtown rents, which affect everything from the City’s parking fund to its tourism budget.

At the same time, housing, particularly multifamily rental product, has become increasingly difficult to come by. Much of the SLO workforce still has to commute from outside of the City, contributing to traffic congestion, noise and air pollution, and greenhouse gases.

Having monitored these developments over the past few years and experienced the undesirability of additional commercial space through the unsuccessful marketing of Lot 7 as entitled, the San Luis Ranch team has partnered with Williams Homes and People’s Self-Help Housing to bring the City a project that will address the prevailing conditions in the City and help the City prosper well into the future.

Project Description
Containing 276 market rate rental apartments, 70 affordable units, and 7,000 square feet of neighborhood commercial, Lot 7 will give City residents another opportunity to live where they work and love where they live. Across Froom Ranch Way from the Agricultural Heritage Center’s local eateries and markets, Lot 7 will be one of the most walkable neighborhoods in San Luis Obispo. The plan also contains a community gathering center, privately maintained public park, and the multimodal connectivity envisioned in the Specific Plan.

The proposed mixed-use project on San Luis Ranch Lot 7 (SLR7) will offer a dynamic and engaging new neighborhood of 276 apartment residences with a mix of studios, onebedroom and two-bedroom homes on roughly 9-acres. These homes are designed in two different three-story building types, a 12-plex building and a 30-plex, with units ranging in size from 594 SF- 896 SF. This mix of home types will be attractive to a variety of interested renters including singles, couples and small families who want to live close to all of the amenities that San Luis Ranch provides. The buildings are creatively situated on the site to respect the surrounding context and maximize the livability and pedestrian connectivity of the community. Attractive, modern farmhouse elevations in great color palettes will make the neighborhood a well sought after place to live.

Located in the middle of the new neighborhood and over existing drainage improvements is the nearly 2-acre Central Park, envisioned as an open area for programmed activities such as sand volleyball, picnic area, outdoor gym, bocci ball courts and open areas.

Adjacent to the multi-modal path, Central Park will be interconnected with extensive

3940-7 Broad Street, #139
San Luis Obispo, CA 93401
(805) 471-2948
[email protected]
3 walking paths and will be open to the public. Given its proximity to the locally produced food at the Agricultural Heritage Center across Froom Ranch Way, this central park will offer lots of seating to enjoy offerings of the day.

The residents of the neighborhood will also enjoy a private recreation amenity (Central Amenity) which will include a pool and spa area, sunbathing areas, BBQs and gathering space and restroom buildings. Together, the Central Amenity (private) and the Central Park (public) will provide the community with active and welcoming open spaces within the higher density neighborhood. With a focus on bike trails throughout the neighborhood and the community, 55 open bike racks for guests and 3 bike barns for residents, along with in-home bike racks will further support and encourage the use of bikes of all sizes and styles.

Perhaps the most exciting feature of this bicycle centric neighborhood will be the vibrant small-scale commercial building, sensibly located at the corner of Froom Ranch Way and Dalidio Drive. Designed to reinforce the agricultural setting of the area, this space will feature an attractive habitable silo structure, recognizable as a landmark for the community.

This structure is envisioned to contain a bike shop for service, repair, and rentals, a small, locally sourced coffee/sweets shop for locals and visitors alike, and a mailroom/leasing office for the residents. A grand second floor multi-purpose space will offer flexibility in programming of events, social gatherings or simply relaxing and enjoying the views and delightful weather of San Luis Ranch.

Entitlements to Implement the Project
Entitlement processing is expected to include Development Plan with ARC review, General and Specific Plan Amendments with ALUC referral, Vesting Tentative Tract Map conformance evaluation, and environmental review.

General and Specific Plan Conformance and Requested Modifications General Plan:

The San Luis Ranch Specific Plan Area is governed in the City’s 2014 Land Use Element Section 8.1.4. That section identifies 14 goals, objectives, and requirements for the entire San Luis Ranch planning area. These include:
a. Provide land and appropriate financial support for development of a Prado Road connection. Appropriate land to support road infrastructure identified in the Final Project EIR (overpass or interchange) at this location shall be dedicated as part of any proposal and any area in excess of the project’s fair share of this facility shall not be included as part of the project site area used to calculate the required 50% open space.

3940-7 Broad Street, #139
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4 b. Circulation connections to integrate property with surrounding circulation network for all modes of travel.
c. Connection to Froom Ranch and Calle Joaquin, if proposed, shall not bifurcate onsite or neighboring agricultural lands. Any connection to Calle Joaquin shall be principally a secondary / emergency access by design.
d. Development shall include a transit hub. Developer shall work with transit officials to provide express connections to Downtown area.
e. Maintain agricultural views along Highway 101 by maintaining active agricultural uses on the site and maintain viewshed of Bishop Peak and Cerro San Luis. f. Maintain significant agricultural and open space resources on site (see Policy

1.13.8.B). Land dedicated to Agriculture shall be of size, location, and configuration appropriate to maintain a viable, working agricultural operation. g. Where buffering or transitions to agricultural uses are needed to support viability of the agricultural use, these shall be provided on lands not counted towards the minimum size for the agriculture / open space component. Provide appropriate transition to agricultural uses on-site.
h. Integrate agricultural open space with adjacent SLO City Farm and development on property.
i. Site should include walkable retail and pedestrian and bicycle connections to surrounding commercial and residential areas.
j. Commercial and office uses shall have parking placed behind and to side of buildings so as to not be a prominent feature.
k. Neighborhood Commercial uses for proposed residential development shall be provided.
l. Potential flooding issues along Perfumo Creek need to be studied and addressed without impacting off-site uses.
m. All land uses proposed shall be in keeping with safety parameters described in this General Plan or other applicable regulations relative to the San Luis Obispo Regional Airport.
n. Historic evaluation of the existing farm house and associated structures shall be included.

All of these goals, objectives, and requirements continue to be met with the proposed Lot 7 mixed-use project.

Additionally, the Land Use Element specifies the following performance standards for the San Luis Ranch Specific Plan Area:

3940-7 Broad Street, #139
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5 (Please note that Specific Plan Table 2-1 replicates this General Plan Table.) While the proposed Lot 7 mixed-use project meets all other Land Use Element performance standards, it will require two modifications:
1) Increasing the maximum number of residential units from 500 to 941.

The new maximum residential reflects:
• 654 residential units approved as part of a Specific Plan Amendment by City Council in November 2020,
• The 30 units per acre density allowed by the Specific Plan in the Neighborhood Commercial (NC) zone, and
• A minimum of 70 and up to 77 low-income affordable units to be provided by Peoples Self-Help Housing on a parcel donated by San Luis Ranch.

This residential density will generate projected traffic counts and VTM below the levels contemplated with the originally proposed retail development in the San Luis Ranch certified Final Environmental Impact Report (July 2017) and the Final Supplemental Environmental Impact Report (July 2018) as well as the Addendum to the certified Final Environmental Impact Report (August 2020).
* Inclusionary housing - the change in use from 114,300 square feet of commercial to an additional 296 market rate multifamily residential units changes the calculation in required affordable units. The 2020 Specific Plan Amendment allowed 26-low-income affordable units to be transferred from the existing multi-family site to the proposed Lot 7. The proposed Lot 7 mixed use development, along with the remaining affordable units to be

3940-7 Broad Street, #139
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6 constructed for other uses in the Specific Plan Area will result in a requirement for 70 affordable units on the Lot 7 site:

Lot 7 Retail 2 units (2/acre)
Hotel 7 units (2/acre)
Office 7.4 units (2/acre)
Lot 7 MFR 27.6 units (10%)
Transferred 26 units
Total 70 units
2) Decreasing the minimum square footage of Commercial from 50,000 square feet to 38,000 square feet.

The new minimum reflects the commercial uses available to San Luis Ranch and City residents, as well as visitors, in the Agricultural Heritage Center, as well as the neighborhood serving commercial uses proposed on Lot 7. See discussion pertaining to the challenges of retail development above, under “Background”.

Below is an approximate timeline of changes to the SLRSP’s total commercial square footage:
• The City’s 2014 General Plan Land Use Element establishes a performance standard/commercial minimum of 50,000 square feet for the SLRSP. This aligns with SLRSP Table 2-1 (General Plan San Luis Ranch Performance Standards). • Council Resolution No. 11192 (November 2020) approved up to 114,300 square feet of commercial.
• As reported in the 2024 Annual Monitoring staff report (April 2024), the 53-acre AG-zoned portion of the Specific Plan includes 31,236 square feet of commercial buildings, including retail, restaurant, a market, and agricultural processing uses.

The Project proposes 7,000 square feet of commercial space, bringing the total commercial square footage within the SLRSP area to 38,236 square feet, which is below the performance standard minimum of the 2014 adopted General Plan.

Specific Plan:

The San Luis Ranch Specific Plan allows for a wide range of potential land uses, including multifamily residential. That document also establishes a variety of standards and requirements for development within the Neighborhood Commercial (NC) zone.

3940-7 Broad Street, #139
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7 Specific Plan Table 2-3 identifies the maximum land area and number of units or square footage allowed within the Specific Plan area, and will be adjusted to comport with the General Plan table:

Table 3-3 identifies multifamily dwellings as uses allowed by right, citing the City of San Luis Obispo Zoning Code Section 17.22.010, which states the goal of allowing “dense housing close to concentrations of employment and college enrollment, in the Downtown core, along transit corridors and nodes, and in areas largely committed to high-density residential development”. Table 3-7 establishes the development standards for development within the NC zone.

Section 3.7.1 (Residential Design Guidelines) apply to residential projects regardless of zone designation. Residential development standards are found in Table 3-3. Section 3.7.2 guidelines apply only to commercial development.

The proposed mixed-use Lot 7 project conforms to Specific Plan requirements and standards, including lot coverage, building height and design features, setbacks, landscaping, automobile and bicycle parking, and public improvements (Transit Center).

VTTM 3142 Conformance and Development Agreement Status
With this application, San Luis Ranch is submitting an application for review and approval of a proposed final map for Lot 7 of Tract Map 3142. As approved initially, the Lot 7 was proposed to be subdivided into 11 lots, including the affordable housing lot to be granted to People’s Self-Help Housing (PSHH), which is identified as Lot 11 on the

3940-7 Broad Street, #139
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8 Map. Recordation of this final phase of Tract 3142 is necessary to be able to convey Lot 11 to PSHH.

We are requesting that the City find the current proposed final map to be in substantial compliance with the previous approved tentative map. Per Section 66474.1 of the Subdivision Map Act, the City shall not deny the recordation of a final map where it finds that “the final … map is in substantial compliance with the previously approved tentative map.” Here, the proposed final map is in substantial compliance with the approved tentative map. Both maps result in the same number of lots and identical locations of ingress and egress to adjacent public streets. The internal configuration of several lots has changed in order to provide more logical lot lines to run through the middle of drive aisles, as opposed to the original parcel lines that now cross yards, drainage features, and areas occupied by structures.

We also note that the City has requested confirmation as to whether San Luis Ranch is amenable to discussing changes to certain portions of the previously approved Development Agreement. San Luis Ranch is willing to discuss changes to the Development Agreement in the event that legislative amendments, such as approval of an amendment to the Specific Plan, is required in conjunction with the approved project.

Please let me know if you have any preliminary questions regarding this application package. Thanks so much for your time and consideration. We look forward to working with you on this exciting project.

Very best regards,
Rachel Kovesdi
Attachments:

1. Planning Application

2. WHA Lot 7 Mixed-Use Residential Plan Set

3. Wallace Group VTTM 3142 Proposed Final Map Exhibit

4. Wallace Group Existing Drainage Facilities Exhibit

3940-7 Broad Street, #139
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9 Cc: Whitney McDonald, City of SLO Interim City Manager Timmi Tway, City of SLO Community Development Director
John Rickenbach, City of SLO Contract Planner
Josh Bivin, San Luis Ranch COO
Lance Williams, Williams Homes CEO

PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org Date: July 18, 2024
To: City of San Luis Obispo Community Development Department Attn: Callie Taylor
From: Josh Bivin
Subject: San Luis Ranch Lot 7 GPA/SPA Authorization - Response to Info Hold Dear Callie,
Thank you for your Initiation Review letter of May 30,2024. We appreciate your preliminary comments and expect that our responses below will contain all information required to allow staff to schedule a City Council hearing to authorize the proposed General Plan and Specific Plan amendments.

Planning Division - Community Development Department
Please update the project description and submit additional information to address the follow items which are needed for City Council review and initiation:

1. Project Description: Sheet SP1 of the plans indicates the project would include 276 dwelling units and 7,000 SF of commercial. This is potentially inconsistent with the project description in the Kovesdi Consulting letter of 4-29-24 that indicates up to 346 dwelling units (276 apartments and 70 affordable units) proposed on Lot 7. Does the Kovesdi letter include the portion of Lot 7 that had been previously approved for up to 77 affordable units, and indicated as “NAP” on Sheet SP1? Please clarify what is actually being proposed.

Response:
276 market rate rental units are proposed to be constructed on Lot 7 of San Luis Ranch by Williams Homes (WHA). This number of market rate units is reflected in the WHA site plan, as well as the project description. Additionally, San Luis Ranch is partnering with People’s Self-Help Housing (PSHH) to bring the City deed-restricted inclusionary rental housing units. PSHH competes for a variety of grant funding sources, which have different eligibility requirements. The California State budget fluctuates each year, and the amount of funding available from nonprofit housing grant programs changes each budget cycle. PSHH has guaranteed SLR that they will construct, at a minimum, the 64 units required by prior approvals, as well as additional units required with the approval of the WHA project proposed by this application. Here are the calculations for inclusionary housing:

PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org 2 Current Approvals Proposed WHA/PSHH Lot 7 Project Proposal Acreage Multiplier Required Acreage Multiplier Required Retail 9.45 2 18.9 Retail 0.5 2 1
Hotel 3.5 2 7 Hotel 3.5 2 7
Office 3.7 2 7.4 Office 3.7 2 7.4

33.3 Residential 276 10% 27.6
Rounded 34 43
Transferred from MFR 26 Rounded 43
Total Required 60 Transferred from MFR 26
Approved with 3142 VTTM 64-77 Total Required 69
Approved with 3142 VTTM 64-77
In order to maximize PSHH funding opportunities, San Luis Ranch is proposing a total Lot 7 residential density of between 345 units: 276 WHA units + 69 inclusionary PSHH units (26 transferred from the multifamily site by VTTM 3142, and 10% of WHA units, rounded up) and 358 (276 WHA units + 82 inclusionary PSHH units, depending on funding source). The site plan will be updated to show the PSHH site as part of the Lot 7 development project. We understand that the project will be reviewed based on the maximum potential number of PSHH inclusionary units (82) in order to appropriately evaluate potential impacts.

2. Project Description, Specific Plan Amendments: Clarify all statistics and make consistent, indicating on the plans how these relate to the overall buildout of the SLRSP. The original EIR and SEIR examined a project with up to 580 dwelling units, 150,000 SF of retail, 100,000 SF of office, and 200 hotels rooms. The subsequent approved Lot 3142 application increased development potential to 654 dwelling units but a reduction in retail development in the NC zone to 114,300 SF. The current application would include up to 276 dwelling units (or is it 346 units?) and 7,000 SF of commercial (or is it 15,000 SF?). Overall, it appears the SLR Specific Plan buildout would be 930 units (Kovesdi letter indicates 941 units), but only 7,000 SF of commercial, while office and hotel buildout would remain unchanged.

Response:

Existing Uses
The current/near-term buildout of San Luis Ranch to date (approved with building permits) consists of the following components already approved with the original Specific Plan, 2020 Amended Specific Plan, and VTTM 3142:
• 577 single and multifamily residential units
• 200-room hotel
• Allowed uses of the Agricultural Heritage Center per Specific Plan Table 3-10:
o 3,000 sf Learning Center
o 3,000 sf Market

PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org 3 o 10,000 sf Agricultural Processing
o 5,000 sf Food Services,
o 15,000 sf General Retail
Proposed Project
The proposed project would construct 276 market rate rental units, 64 units of inclusionary housing required by VTTM 3142, along with additional PSHH inclusionary units (see discussion above), and up to 15,000 square feet of commercial/retail development. Williams Homes will refine their plan for the retail component of Lot 7 prior to architectural review and has requested flexibility to respond to market conditions at time of building permit submittal. As with the PSHH component of the project, we request that the maximum potential retail square footage (15,000 sf.) be included in the staff’s review. No development of the office site is proposed with this application.

General Plan Amendment Request for Modified Buildout
The City’s Land Use Element Section 8.1.4 establishes performance standards for the Specific Plan according to land use type. The General Plan Amendment request would facilitate the proposed project with the following two modifications to the performance standards table on

Project Amendments to General Plan’s San Luis Ranch Performance Standards Designations Allowed % of Site Minimum Maximum
LDR
MDR
MHDR
HDR
NC
350 units 654 units
941 units
NC
CC
AG
50,000 SF
38,000 SF
200,000 SF
O 50,000 SF 150,000 SF
200 rooms
PARK

5.8 ac
+/- 8.8 ac TBD
OS
AG
Minimum 50%
No maximum
n/a
n/a
Source: San Luis Obispo General Plan, Land Use Element, Section 8.1.4 (2014)

PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org 4

3. Project Description, Transportation Analysis: The CCTC transportation analysis examined up to 358 units and 15,000 SF of commercial, which is inconsistent with the site plan and Kovesdi letter, and appears to account for the 77 units previously approved in VTTM 3142.

Again, please clarify and revise documents as needed to be consistent, and put this in context with the previously approved portions of Lot 7 that are “not a part” of the current application.

Response:

As noted above, the PSHH component is now included in the project. The CCTC transportation analysis includes evaluation of 276 WHA units and 82 PSHH maximum potential units, capturing the maximum number of residential units, depending on funding source. The CCTC analysis also evaluated 15,000 sf. of retail in order to capture potential transportation impacts under the maximum retail scenario.

4. Density: When all proposed development in Lot 7 (276 units in this proposal and up to 77 units in the approved PSHH development) is considered in the aggregate, it appears to propose up to 353 units on 11.44-acre Lot 7, or an average density of 30.85 du/ac, which exceeds that allowed in even the highest density zone (NG-30) of the SLRSP. Please revise project description, which could require a General Plan Amendment and rezoning, to ensure consistency with density requirements.

Response:

Per both the originally adopted and Amended Specific Plan, residential density throughout the project is calculated based on gross site area:

The gross site area of the WHA portion of Lot 7 is 9.59 acres. At 30 du/acre, the WHA portion of the project can accommodate 287 residential units (9.59 X 30). (All dwelling units have been rounded down to the nearest whole number.) The project proposed 276 units, well under the maximum density.

The gross site area of the PSHH lot is 1.88 acres. At 30 du/acre, the PSHH portion of the project can accommodate 56 inclusionary residential units (1.88 X 30). The PSHH portion of the project is 100% affordable to low and very-low-income households and is therefore eligible for an 80%

PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org 5 State Density bonus of 45 units, bringing the total allowed units on the PSHH site to 101 inclusionary units. PSHH is proposing up to 82 units, well under the maximum density.

5. Zoning: The subject site at Lot 7 is currently zoned Neighborhood Commercial with a Specific Plan overlay, and has a General Plan designation of Neighborhood Commercial.

The San Luis Obispo Municipal Code Section 17.26.020 allows a maximum density of 12 units per acre in the C-N zone. General Plan Land Use Element Table 1 identifies a maximum density of 12 du/ac in the NC designation. Please revise project description, which could require a General Plan Amendment and rezoning, to ensure consistency with density requirements.

Response:

Density provisions in the adopted San Luis Ranch Specific Plan and Amended Specific Plan takes precedence over the City’s Zoning Regulations, as stated in Section 17.02.080 of that document:

17.02.080 – _Relationship to Specific Plans
Specific Plans are designed to meet the requirements of the State Government Code and the City of San Luis Obispo General Plan. All uses, buildings, or structures located within a specific plan area shall comply with the provisions of the applicable Specific Plan. If such provisions conflict with the Zoning Regulations, the requirements of the adopted Specific Plan shall take precedence over the Zoning Regulations. In instances where the Specific Plan is silent, the Zoning Regulations shall prevail.

Residential density is capped in the Specific Plan at 30 units per acre. Please see above discussion of density under #4.

6. Inclusionary housing. Page 6 of the project description identifies inclusionary calculations. • Inclusionary units for the 31,000 sq. ft. of commercial at the Ag Heritage Center are not identified.
• Provide a complete inclusionary housing plan, including proposed levels of affordability. Show compliance with the City’s Inclusionary Ordinance, Municipal Code Chapter 17.138, including standards for inclusionary units (Section

17.138.050) and application requirements (Section 17.138.070). • One of the community benefits identified in the Development Agreement is the additional affordable housing beyond code requirements. To date, the required affordable housing has not been completed, and therefore, this community benefit and project requirement has not been fulfilled. Please provide additional information to explain this existing deficiency. Explain how additional affordable housing will be provided for consistency with DA provisions to provide the identified community benefit. How will San Luis Ranch ensure that the inclusionary housing requirements of both the existing and the proposed project are fulfilled?

PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org 6 Response:
• The SLR Lot 7 application is a part of the San Luis Ranch Specific Plan area. All inclusionary housing requirements for the San Luis Ranch Specific Plan area are governed by the adopted Amended Specific Plan, Development Agreement and subsequent Administrative Amendments to the Development Agreement. While all allowed uses at the Agricultural Heritage Center are included in both the original and Amended Specific Plan, the inclusionary requirements identified in the Development Agreement and Administrative Amendments to the Development Agreement do not require any inclusionary units for the Agricultural Heritage Center. • As discussed above (response to #5), the San Luis Ranch Amended Specific Plan, Development Agreement and Administrative Amendments to the Development Agreement serve as the governing documents for all projects within the Specific Plan area. Therefore, projects proposed as part of the SLR Specific Plan are not subject to the City’s Inclusionary Ordinance Municipal Code. The Lot 7 inclusionary housing plan will be consistent with the requirements of the Development Agreement and the First Administrative Amendment to the Development Agreement. Based on the recalculation of Lot 7 (see response to #1), the project will be required to deliver a total of sixty-nine (69) inclusionary units. Per the First Administrative Amendment to the Development Agreement, a minimum of twentysix (26) of these units will be very-low-income deed restricted. The remaining units will be a combination of low and very-low-income based on the funding sources available to the inclusionary builder, People’s Self-Help Housing.
• The Development Agreement identifies a community benefit of the San Luis Ranch Specific Plan area as having additional inclusionary units beyond the agreed upon minimum requirements in the Development Agreement. To fulfill this requirement, the Feasibility Memorandum Exhibit D of the recorded the Development Agreement agreed to the inclusion of fourteen (14) workforce deed restricted units. To date ten (10) workforce units have been completed. Three (3) additional workforce deed restricted units will be completed by the end of August 2024. The final workforce deed restrict unit will be completed at the completion of the buildout of the low-density product, per the terms of the San Luis Ranch Affordable Housing Agreement recorded with Tract Map 3096.

Informational Notes:

7. Zoning & mixed use proposal: The project appears to propose 276 units (or is it 346 units?) (185,340 sq. ft. residential), plus the 77 units previously approval, and 7,000 sq. ft. of commercial. While CN zoning allows mixed use projects, the proposal is almost entirely residential, and the commercial uses proposed are mostly residential amenities such as a rental office, mail room, and second floor gathering space. The mix of uses will be reviewed by City Council at the initiation hearing for input on the proposal and zoning/land use designation.

PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org 7 Response:

Per City of San Luis Obispo Zoning Regulations Section 17.02.080 (cited above) land use provisions in the San Luis Ranch Specific Plan and Amended Specific Plan take precedence over the City’s Zoning Regulations. Therefore, the Lot 7 site is not zoned CN, but SLR NC, in which multifamily residential is allowed by right. (See Table 3-6, as well as density discussion, above.) The proposed General and Specific Plan Amendments would revise the total number of residential units, square footage of commercial uses, and minimum acreage of parks in the San Luis Ranch Specific Plan Area. (Please note that the Specific Plan Amendment would remove the reference in Table 3-6 to Zoning Code 17.22.010(G), prohibiting vacation rentals (2012 Zoning Regs), since that language no longer exists in that section of the current City Zoning Regulations. However, a note will be added to Table 3-6 prohibiting vacation rentals, thus preserving the original intent of the Specific Plan.)

8. Parks. The GP calls for 5.8 acres of parks in SLR, but that assumed a buildout of 580 dwelling units, or 1 acre per 100 homes (which translates to about 5 acres per 1,000 population). That standard is similar to the overall Citywide standard in the GP for annexation areas, which is 5 acres per 1,000 population. (Buildout population of all of SLR with the current proposal is estimated to be about 2,000.) With the current proposal, there would be up to 930 dwelling units within SLR, which suggests the need for 9.3 acres of parkland within the Specific Plan area. With the proposed central park and central amenity (collectively about 2 acres), the total parkland within SLR would be roughly 5 acres. (Trails and drainage features do not count as parks.) This does not meet the existing SLRSP requirement, particularly if the requirement is interpreted as 1 acre per 100 units rather than

5.8 acres total, which had assumed a buildout of 580 dwelling units. It also falls short of the Citywide General Plan standard. If Council authorizes initiation of the project, the parks proposal will be considered by the Parks and Recreation Committee before being considered by the Planning Commission and ultimately City Council. Any parkland acreage shortfall, even if the proposal were to be approved by PRC, would require payment of in lieu fees to make up the acreage shortfall.

Response:

San Luis Ranch Specific Plan area Tract Maps 3096 and 3150 already provide a total of 5.8-acres of park land, based on the 2.8-acre Central Park and $1,696,805 in-lieu fees paid in conjunction with the recordation of Tract Map 3096. In addition, per the terms of the Development Agreement, an additional Park In-Lieu fee in the amount of $1,478,221 was paid through building permits for Tract Map 3150.

As you note, the San Luis Ranch Specific Plan area is required by both the General Plan and the Specific Plan to provide a minimum of 5.8 acres of parkland. The General Plan and Specific Plan do not require one acre of parkland for every 100 residential units. Therefore, the General Plan requirement for five acres per 1,000 residents in annexation areas governs. The parkland requirement for the proposed residential units on Lot 7 (not including the inclusionary units already

PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org 8 approved with VTTM 3142) are as follows (based on the maximum number of PSHH inclusionary units – 82):

SLR Lot 7 Required Parkland
WHA Portion* PSHH Portion*
Unit Type # of Units Population Unit Type # of Units Population Studio 72 72 Studio 1 1
1BR 90 180 1BR 2 4
2BR 114 342 2BR 2 6
Total Units
Total Residents 594 11
Total Residents - WHA + PSHH 605
*1 resident per studio, 2 per 1BR unit, 3 per 2BR unit, per City of SLO 2024 Below Market Rate Housing Standards
General Plan Requirement for Annexation Areas = 5 acres per 1,000 residents Based on 605 new residents, 3.025 additional acres of parkland is required.

If PSHH receives funding for the maximum number of potential units proposed (82), an additional

3.025 acres of parkland or in-lieu equivalent will be required. The current WHA/PSHH proposal includes a central park and central amenity which collectively account for just over one acre.

Coupled with the 5.8-acres already dedicated or satisfied through the payment of fees, that would leave a maximum projected shortfall of 2.025 acres (8.825 – 5.8 – 1 = 2.025). Final park calculations will be completed as part of the authorized GPA/SPA/Development Plan application and will be subject to the approval of a final map and related entitlements.

Thanks for your time and consideration. We look forward to working with you to maximizing community benefits at San Luis Ranch.

Best regards,
Josh Bivin
Josh Bivin
MI San Luis Ranch

PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org 9 CC: Whitney McDonald, City of SLO City Manager
Timmi Tway, City of SLO Community Development Director
John Rickenbach, City of SLO Contract Planner
Rachel Kovesdi, Kovesdi Consulting
Don Faye, San Luis Ranch
Lance Williams, Williams Homes CEO

PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org Dear Mayor Stewart, Councilmembers,
Thank you very much for meeting with us last week to discuss residential uses on the San Luis Ranch Lot 7 parcel. We truly appreciate your time and thoughtful input, as well as the opportunity to summarize our conversations.

To recap, Williams Homes (WH) and People’s Self-Help Housing (PSHH) propose a partnership that will provide the City with 276 market rate rental apartments and a minimum of 70 inclusionary units for low and very low-income tenants. Both organizations have a long track record of successfully completing projects in the City and County. The SLR Lot 7 location provides outstanding access to schools, parks, public transportation and services, and will score well on PSHH funding applications.

Funding Dilemma
Importantly, neither WH nor PSHH can obtain funding for their project if encumbered by the other component. WH cannot secure bank loans for their development if their ability to obtain certificates of occupancy is dependent on PSHH performance. And PSHH cannot secure State or Federal grant funding for their development if they are dependent on WH construction progress for critical infrastructure. All of you indicated that you understand that this “chicken and egg” problem is a critical barrier to developing Lot 7.

SLR proposes the following solution to this impasse:
• SLR is willing to amend the DA to lock in current (2024) impact fees, amounting to approximately $5.5MM in addition fee income to the City. In exchange for our agreement to pay 2024 fees, the City will agree that upon dedication of the recorded legal parcel to PSHH and payment to PSHH of $500,000, WH will be free of any construction start or occupancy restrictions related to the affordable component of the project. • To ensure PSHH has a “shovel ready” project, which is necessary for them to apply for financing, the project would be willing to post a bond in the amount equal to the cost of improvements necessary to provide PSHH with a buildable lot (access and utilities).

We believe that this resolution will allow both components of the Lot 7 project to move forward expeditiously to deliver much needed affordable and workforce housing to the City. If this resolution is deemed unacceptable, we respectfully request that City staff present to us a financial and/or timing arrangement that would compel staff to support and City Council to approve Lot 7 as proposed.

PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org Fiscal Analysis
A number of you expressed concern regarding a perceived loss of sales tax revenue as reported in the EPS memo directed by City staff. However, as we discussed, local retail vacancy and absorption rates, as well as our two- and half-year experience attempting to market Lot 7 to retail developers, confirm that the site will not support additional retail. We understand that you feel the need to take this potential loss into consideration when making decisions about reentitlement. However, we hope that you will consider both the Fiscal Impact Analysis completed by Applied Development Economics as well as the memo completed by San Luis Ranch. It should be noted, that since the inception of the San Luis Ranch Specific Plan and associated Development Agreement, the fiscal impact analyses of the project have been completed by Applied Development Economics at the direction of the City.

We also registered your alarm regarding the sale of Harvest Loft units to Cal Poly, and the associated loss of property tax revenue. Upon detailed review of the Fiscal Impact Analysis, the total projected loss of property tax revenue from the Harvest Lofts is estimated at approximately $77,000 per annum. Additionally, the City’s concern over the loss of property tax revenue seems to directly conflict with the Lot 7 economic study commissioned by City staff and completed by EPS where a single variable, Lot 7, was isolated. It should also be noted that when taking a holistic approach to fiscal evaluation, which is to say including all revenue and expenses for the master planned community, even after the loss of property taxes from the sale of the Harvest Lofts and the proposed re-entitlement of Lot 7, the entire Specific Plan area returns an annual surplus to the City in excess of $500,000. This figure is supported by the calculations completed in the supporting documents for the latest EPS memo.

To continue processing the Lot 7 proposal in good faith, we request that the GPA/SPA amendment authorization be brought to hearing prior to year-end. Mayor Stewart indicated potential availability on November 12th and December 10th. We will be pleased to work with staff to prepare a cohesive and comprehensive presentation for Council on either of these dates.

We look forward to working collaboratively with you to further Major City Goals and further burnish the City’s Prohousing designation. Thanks again for your time and consideration.

Sincerely,
Josh Bivin
Cc. Whitney McDonald, City Manager
Timmi Tway, Community Development Director

3940-7 Broad Street, #139
San Luis Obispo, CA 93401
(805) 471-2948

A CALIFORNIA CORPORATION
“Building Legacies”
October 24, 2024
Callie Taylor, Community Development Department
City of San Luis Obispo County
919 Palm Street
San Luis Obispo, CA 93401
Via email
Re: SPEC–0020-2024 San Luis Ranch Lot 7 Residential Mixed-Use Project Clarifications
Dear Callie,
I hope you’re doing well.

Thank you for your October 11th email confirming the December 10, 2024 City Council hearing date for the multifamily residential mixed-use project on Lot 7 of recorded Tract 3096 (site of approved VTTM 3142).

Per your direction, the applicant team has added a request for a Zoning Amendment to the revised project description below (all additional/modified language underlined). Please note that a General Plan Amendment request was included in the original application of April 29, 2024, in order to modify total residential units and commercial square footage identified by the performance standards in General Plan Section 8.1.4.

We look forward to working with Council and staff on this component of the San Luis Ranch Specific Plan area.

3940-7 Broad Street, #139
San Luis Obispo, CA 93401
(805) 471-2948
[email protected]
2 Revised Project Background and Description – 10/21/2024 Background
Since it’s conception more than a decade ago, San Luis Ranch Specific Plan has had four overarching goals:
o Diverse Range of Housing Types
o Multimodal Connectivity
o Agricultural Preservation
o Outdoor Recreation Opportunities
To date, the Specific Plan has been implemented to meet its original objectives, along with the developing needs of our dynamic community.

As we’ve discussed, the demands of City residents and workers have changed significantly since the adoption of the Specific Plan in 2018, particularly since the Covid-19 pandemic.

Prior to the pandemic, consumers were already turning to online retail vendors. The pandemic and associated lockdowns solidified and supercharged the trend toward online shopping, resulting in increasing commercial vacancy rates, even in our beloved downtown. Higher commercial vacancies in turn have led to decreases in sales tax revenue to the City, as well as direct costs, in the form of lower downtown rents, which affect everything from the City’s parking fund to its tourism budget.

At the same time, housing, particularly multifamily rental product, has become increasingly difficult to come by. Much of the SLO workforce still has to commute from outside of the City, contributing to traffic congestion, noise and air pollution, and greenhouse gases.

Having monitored these developments over the past few years and experienced the undesirability of additional commercial space through the unsuccessful marketing of Lot 7 as entitled, the San Luis Ranch team has partnered with Williams Homes and People’s Self-Help Housing to bring the City a project that will address the prevailing conditions in the City and help the City prosper well into the future.

Project Description
In partnership with Williams Homes and People’s Self-Help Housing, San Luis Ranch is proud to put forward a new concept for Lot 7 that will respond directly to current and future needs of the San Luis Obispo community. Containing 276 market rate rental apartments, at least 69, and up to 77 affordable units, and 7,000 up to 15,000 square feet of neighborhood commercial, Lot 7 will give City residents another opportunity to live where they work and love where they live. People’s Self-Help Housing competes for grant funding from a number of private and public programs, all of which have different scoring