City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 28 funded and launched the SLO Water Wise Landscaping website29, which provides design and installation resources for water-wise landscaping that are specific to microclimates in San Luis Obispo County. The guide provides information on how customers can irrigate based on plant needs and discourages customers from over watering, watering too frequently, or watering during the times of the day when water loss to evaporation and wind is greatest. In addition to the SLO Water Wise Landscaping website, the City also provides information on how customers can find certified water efficient landscape contactors, designers, landscapers, or irrigation auditors on its website.
Children’s Specific Outreach
In addition to general outreach,
the City has also had a long
standing history of working to
instill water awareness in
children to help further promote
households to participate in
water conservation and set the
stage for students to make
informed and appropriate
decisions about water later in
life. The City provides education
programs on various water
related topics for San Luis
Obispo Coastal Unified School
District schools within the city.
The spotlight program, The Story
of Your Water, teaches third
through fifth graders about the
water cycle, water treatment
process, water use, water
conservation, and water
reclamation. At the end of the
program students are provided a
flow meter bag and toilet leak
detection tablets to promote
discussing water conservation
at home and identifying if their
home has a leaking toilet or
fixtures that can be updated to
low-flow. In addition to classes,
the City has hosted art contest
and offers tours of the WTP and
WRRF.
29 Waterwise Landscaping for San Luis Obispo County website is available at:
https://www.slowaterwiselandscaping.com/
5. REGULATORY
COMPLIANCE
California has enacted regulations to promote water
conservation and sustainable water management that the
City’s Water Conservation Programs and Water
Conservation and Efficiency Plan must consider.
Historically, some of the most important regulations for water conservation in California have included the Soil and Water Resources Conservation Act of 197730, which
requires urban water suppliers to develop and implement water conservation plans, and the SB X7-7
31, which
requires urban water suppliers to establish water
conservation targets and report progress toward meeting those targets. Senate Bill 606 (SB 606)32 and Assembly Bill 1668 (AB 1668)33 are the most recent water conservation regulations and establish the Long-Term Framework
legislation for making water conservation a California way 30 The Soil and Water Resources Conservation Act of 1977 can be found at:
https://www.congress.gov/95/statute/STATUTE-91/STATUTE-91-Pg1407.pdf 31 California Water Conservation Act, Water Code Section 10608.28(b) provides methods for calculating urban water use targets that identify per capita use targets that cumulatively result in a statewide 20 percent reduction: https://california.public.law/codes/ca_water_code_section_10608.20 32 California Senate Bil No. 606, Water management planning is available at:
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB606 33 California Assembly Bill No. 1668, Water management planning is available at:
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB1668&search_keywords=55+gall ons+water
Making Water
Conservation a California
Way of Life Framework
In 2018, the California State
Legislature passed Assembly Bill
1668 (Friedman, 2018) and Senate
Bill 606 (Hertzberg, 2018) which
directed the State Water Board to
adopt standards for using water
more efficiently.
As part of the proposed regulation,
Urban Retail Water Suppliers,
including the City of San Luis
Obispo, will be held to new “urban
water use objectives” comprised of
indoor residential water use, outdoor
residential water use, commercial,
industrial, and institutional (CII)
irrigation with dedicated meters,
water loss, and unique local uses.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 30 of life. This framework establishes standards for water use efficiency and requires local water agencies to set water budgets based on those standards.
Regulatory Programs
Regulatory approaches can be an effective strategy for water suppliers to reduce water use at the service level. In addition to the regulations the City must comply with at the state level, the City of San Luis Obispo has also adopted local regulations that prohibit water waste and require water-efficient plumbing. Below are the current water conservation programs the City has implemented. The City aims to adopt water-efficient codes and standards that are feasible and appropriate to the community.
Water Conservation Regulations
Chapter 13.07 of the City’s municipal code, adopted in 1987, outlines water conservation regulations for the City. Under this code, water waste due to substandard, leaky, or faulting water fixtures and water waste due to excessive application are prohibited. City staff conduct routine patrols to monitor water waste and follow set timelines and procedures to ensure community members are addressing water leaks in a timely manner. In addition to these restrictions, restaurants may not serve water to customers except upon request and potable water cannot be used for major construction activities or to wash down sidewalks, driveways or parking areas except to alleviate fire and sanitation hazards.
Plumbing Retrofit Program
In 1992 the City also adopted plumbing retrofit regulations which require all existing residential and CII structures to be retrofitted, if not already equipped with, low water use plumbing fixtures upon sale, change of use, or expansion of use of the property. New developments are required to comply with CALGreen Code34, which are more restrictive than the City’s Municipal Code.
Plumbing codes and standards are considered a “passive” water conservation measure that create permanent water-saving potential given a nominal decline in water saving performance over the useful life of a fixture or appliance.
The City’s plumbing retrofit verification program was most recently amended on December 7, 2021, to require all indoor toilets, faucets, showerheads, and urinals meet the requirements set forth in California Civil Code CIV § 1101.335. City staff will continue to manage the program and document compliance within the City. All properties that have been certified to have low-flow fixtures are shown via a user-friendly online mapping tool at slowater.org, shown below in Figure
5. This tool also provides the City with a database that can be used to help project the effectiveness of future indoor water fixture rebate, offset, and replacement programs. Water savings from plumbing retrofits is dependent on the number and current water use of existing fixtures; however, this program, along with fixture replacement through various rebate programs, has reduced the City’s long-term water demand by an estimated 1,500 AFY. 34 The California Code of Regulations, Title 24, California Green Building Standards Code (CALGreen Code) can be found at: https://codes.iccsafe.org/content/CABC2022P1/california-code-of-regulations-title-24 35 California Civil Code, Article 1.4. Installation of Water Use Efficiency Improvements can be found at:
https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=CIV&division=2.&title=4.&part=4.&cha pter=2.&article=1.4.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 31 Figure 5. Screenshot of the City of San Luis Obispo's Plumbing Retrofit Portal.
Water Efficient Landscaping Requirements
The California Department of Water Resources first established the Model Water Efficiency Landscape Ordinance (MWELO)36 in 1993 and requires local jurisdictions to adopt the state’s framework or develop alternative water-efficient landscape ordinances that are at least as effective. MWELO sets guidelines for water budgets, irrigation efficiency, plant selection, and other factors to encourage sustainable landscaping practices and reduce water consumption in outdoor spaces. The Utilities Department and Community Development Departments work together to implement these and other water efficiency standards into land-use planning to influence water demand within the community. The water efficiency standards require water efficient design, installation, and maintenance practices to maximize water applied to landscapes on new and rehabilitated landscapes in both residential and commercial settings. It has been estimated that landscapes adhering to MWELO landscape irrigation regulations use 80 percent less water than traditional landscapes.
Future Regulatory Requirements
The City will continue to comply with water conservation related regulations as they are enacted.
Currently, the most notably are the future Urban Water Use Objectives (UWUO) set by the Making Water Conservation a California Way of Life Framework. The objectives will include standards for residential outdoor water use, residential indoor water use, CII-DIM outdoor water use, real water loss, variances, and potential bonus incentives. The sum of each respective standard establishes an overall water budget, known as the UWUO, which water suppliers cannot exceed on an annual basis. The City and other water suppliers will be required to meet their overall UWUO and not standards for each specific category.
36 Information on the California Department of Water Resources, Model Water Efficient Landscape Ordinance can be found at: https://water.ca.gov/Programs/Water-Use-And-Efficiency/Urban-Water-Use-Efficiency/Model-WaterEfficient-Landscape-Ordinance
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 32 Through the City’s water conservation programs and policies, water demand over the five-year period between 2016 - 2022 ranged from a high of 97 GPCD in 2017 to a low of 88 GPCD in 2016, as shown in Figure 6, which are below the City’s SB X7-7 compliance goal of 117 GPCD.
The City’s indoor R-GPCD from 2015-2022 averages around 44. California Department of Water Resource’s recommended Indoor Residential Water Use Standards are 55 R-GPCD for the years 2020 - 2025, 47 R-GPCD for the years 2025-2030, and 42 R-GPCD beyond 2030. With the continuation of the water conservation measures listed in this plan, the City anticipates ongoing compliance with these mandates into the future.
Figure 6. City of San Luis Obispo Annual Per Capita Water Use (in gallons per capita per day, GPCD) Versus Population and the Target Per Capita Use as Determined by SB X7-7, 2000-2022.
6. EVALUATION OF
LONG-TERM
WATER
CONSERVATION
MEASURES
Water conservation measures were evaluated using the AWE Water Conservation Tracking Tool37, which evaluates the water savings and program costs of different water conservation measures for the development of long-range water conservation plans. The model estimates annual demand reduction in AF, which is divided into active and passive demand reduction for the model period. Active demand reduction is the share of estimated water savings that can be attributed solely to the implementation of the conservation program. Passive demand reduction is the estimated share of water savings that would have been generated in the absence of the conservation program by (1) plumbing and energy codes interacting with the natural replacement of toilets, showerheads, and other water-using appliances whose current or future minimum efficiency is dictated by national, state, or local code requirements plus (2) water savings from program freeriders – a participant that would have taken the same water-conserving action in the same timeframe had the program not existed.
The analysis for this plan was conducted in a staged approach to provide an understanding of benefits and costs of a large, comprehensive conservation program (Plan A); benefits and costs of a conservation program targeted at the greatest benefit-cost ratio, regardless of budget restrictions (Plan B); and benefits and costs of a conservation program that provides the greatest benefit-cost ratio within a budget that is representative of the Utilities Department’s existing budget (Plan C). The results of the Water Conservation Tracking Tool for each plan are included 37 Alliance for Water Efficiency (AWE) Water Conservation Tracking Tool can be accessed at:
https://www.allianceforwaterefficiency.org/resources/topic/water-conservation-tracking-tool
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 34 in the Appendix of this report and described in the text below. The water conservation measures included in Plan A represent water conservation measures that Utilities Department Staff have identified as practical for staff to implement and administer as stand-alone work efforts, and do not include all possible water conservation measures. The water conservation measures included in Plan B are a subset of Plan A, and the water conservation measures in Plan C are a subset of Plan B. All of the conservation program plans assume an initial 2-year period of rebate implementation for larger water conservation measures such as turf replacement and clothes washers, followed by an annual implementation of other water conservation measures such as SFR home water reports, MFR water use audits, and showerhead replacement rebates.
Plan A
Conservation program Plan A is a large, comprehensive conservation program that consists of 29 water conservation measures. Utilities Department staff selected water conservation measures that staff would be able to implement and administer as stand-alone work efforts; therefore, implementation of the Plan in its entirety would be impractical for the existing staff and under the existing budget. Plan A serves to provide an upper threshold for water savings and program costs in comparison to subsequent, more targeted conservation program plans. Plan A also serves to estimate the benefit-cost ratios for a large suite of water conservation measures.
These benefit-cost ratios were the basis for determining which water conservation measures should be included in subsequent conservation program plans.
Plan B
Conservation program Plan B consists of the water conservation measures from Plan A with the greatest benefit-cost ratios. There are 16 water conservation measures included in Plan B.
Traditional water conservation measures including turf replacement rebates, graywater rebates, rain barrel rebates, and clothes washer rebates were determined to have a low benefit-cost ratio in Plan A and were therefore excluded from Plan B. As such, a comparison of benefits and costs between Plan A and Plan B illustrates the value of implementing water conservation measures with high benefit-costs ratios. Plan B represents a conservation program plan that could be implemented and administered with a substantial increase in staff, funding, and resources.
Plan C
Conservation program Plan C utilized the information gained from Plan A and Plan B, as well as results from a community-wide survey of local businesses, to develop an informed conservation program that implements high benefit-cost ratio measures within a budget that is representative of the Utilities Department’s existing budget. There are 12 conservation measures included in Plan C.
The survey, completed by 240 San Luis Obispo business owners and managers in the fall of 2022, found that over half of those that responded (53.96%) were most interested in a rebate for WaterSense® high-efficiency toilets. This is believed to be in part because 26% of the respondents (62 individuals) identified themselves as operating a real estate or property management business and toilets were the primary water conservation measure that would apply to this type of business. The interest for all items included in the survey are summarized in Error! Reference source not found. Additional water conservation measures participants listed as being of interest included: trees for shading, rainwater retention, compressed air for removing food residue, AMI and leak detection technologies, rain barrels, pipe replacement, landscape/turf conversions, native plants, promotion of low-water use businesses such as retail, rate increases,
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 35 and high-efficiency reverse osmosis systems. Ultimately the quantity of those that expressed interested in items identified as having a high benefit-cost ratio were utilized to estimate the quantities of the water conservation measures modeled in Plan C.
Table 6. Results of the 2022 Survey of Businesses' Interests in Water Conservation Measures.
Conservation
Measure Yes No Yes, If Increased1
ConserveWell®
Dipper Well 3.23% (7) 93.09% (202) 3.69% (8)
WaterSense HighEfficiency Toilet 35.12% (72) 52.20% (107) 12.68% (26) Waterless or HighEfficiency Urinal 10.10% (20) 86.36% (171) 3.54% (7) Commercial
Clothes Washer 15.10% (29) 78.13% (150) 6.77% (13)
Commercial Dish
Waster 13.76% (26) 82.54% (156) 3.70% (7)
Waterbroom 10.99% (20) 85.16% (155) 3.85% (7)
Kitchen Spray
Rinse Valve
(complimentary)
22.10% (40) 77.90% (141) N/A
1 “Yes, If Increased” was used for the respondent to advise of the dollar amount needed for them to be interested in a rebate for the item.
Quantities and costs identified for Plan C were also determined with the goal of ensuring that the program does not favor one customer class over another, in contrast to the way in which water conservation programs that focus on turf replacement favor single-family homeowners. Therefore, the $60,000 budget for water conservation rebates was divided evenly between seven water conservation measures not currently offered by the Utilities Department for SFR, MFR, and CII categories. $10,000 was also set aside for developing water budgets for large landscapes on CII properties. The quantities included for each water conservation measure of Plan C represents a conservation program plan that could be implemented with current staffing levels, funding, resources, and expected community participation based on the results of the survey (Table 6).
Table 7 outlines the quantity and budgeted dollar amount for each water conservation measure included for Plan C during Year 1 and Year 2.
Table 7. Quantity and Budget Allocated for Water Conservation Plan C.
Conservation Measure1 Year 1 Year 2
SFR High-Efficiency Toilet (1.28 GPF) 100 ($10,000) 100 ($10,000) MFR High Efficiency Toilet (1.28 GPF) 44 ($4,400) 44 ($4,400) MFR Large Landscape Smart Irrigation Controller 8 ($5,600) 8 ($5,600) CII High-Efficiency Toilet (1.28 GPF) 70 ($7,000) 70 ($7,000) CII High-Efficiency Urinal (0.125 GPF) 20 ($2,000) 19 ($1,900) CII Restaurant Dipper Wells 7 ($1,050) 7 ($1,050)
CII Large Landscape Water Budgets 20 ($5,000) 20 ($5,000) 1Water conservation measures that were modeled but are already a part of the Utilities Department's standard water conservation operations (water reports, audits, and complimentary items) are not included.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 36 Results of Benefit-Cost Analysis
The AWE Tracker Tool provides a benefit-cost ratio for each water conservation measure in units of dollar per AF of water saved. Water conservation measures with low benefit-cost ratios provide lower water savings per dollar than the water conservation measures with high benefit-cost ratios.
As stated earlier, the development of Plan A included a large suite of water conservation measures and serves to compare the benefit-cost ratios of those measures. The list of benefitcost ratios for all water conservation measures included in Plan A is provided in the Appendix.
Conservation programs Plan B and C included measures that had a benefit-cost ratio greater than the median determined in Program A (29.7) as well as CII large landscape water budgets.
Although CII large landscape water budgets were determined to have a benefit-cost ratio lower than the median (16.9), the water conservation measure was included in Plans B and C due to the Utilities Department’s interested in determining water budgets for meeting forthcoming State regulations regarding large CII landscapes.
Measures that are utilized daily, such as toilets, urinals, and showerheads, provide the highest benefit-cost ratio. While water conservation measures that would be utilized infrequently, such as rain barrels and graywater laundry to landscape systems, are some of the lowest benefit-cost ratios. Turf replacement is also among the lowest benefit-cost ratio due to the high expense of replacing each square foot. For this simulation, $1.00 per square foot with a maximum of 5,000 square feet available for replacement was utilized. Lastly, when comparing the expected savings in gallons per day per unit to the benefit-cost ratio, MFR large landscape smart irrigation controller and CII large landscape water budgets stand out as having the potential to produce a large water savings but have a low benefit-cost ratio due to the high expense. Rebates for restaurant dipper wells and commercial kitchen dishwashers also show a high expected savings compared to other water conservation measures.
Water Savings and Cost Evaluation
The AWE Conservation Tracker Tool allows users to identify program cost parameters for each water conservation measure, including the cost to the utility, any costs covered by a program partner, and the cost to the program participant. For this analysis only the cost to the utility was utilized as official offers from program partners have not been established and the cost to the program participant is assumed to vary based on the specific device the participant choses to purchase. The cost to the utility for each water conservation measure was determined based on the recommended cost provided by AWE and the estimated maximum amount that the City would provide, which was roughly half of the average cost for each measure.
Figure 7 shows the estimated water savings, total program costs, and per acre-foot cost of the three water conservation programs that were evaluated. If all water conservation measures in Plan A were implemented and utilized, a demand reduction of 1,814 AF is estimated over the eighteen-year model period; however, it would cost the Utilities Department $341,646 with the bulk of the total program costs occurs in the first two years due to implementation of rebate programs. This equates to a cost of about $188 per AF of demand reduction. Demand reduction is predicted to initially increase following the implementation of the rebate water conservation measures and then remains relatively consistent for several years until decreasing as the plumbing fixtures age and become less efficient, and the effects of the rebates diminish.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 37 Figure 7. Estimated Water Savings and Program Costs for Water Conservation Plans A-C.
If only the water conservation measures with a high benefit-cost ratio identified in Plan B were implemented and utilized, it is estimated that the City would experience 72% of the demand reduction estimated in Program A (1,314 AF), while decreasing program costs by 56% during the first two years (a $180,200 savings). The cost per acre-foot of demand reduction for Plan B is about $123.
Lastly, with a constrained budget of $60,000 for rebate programs and $10,000 for developing large landscape water budgets on CII properties, as identified in Plan C, it is estimated that the City would experience 47% of the demand reduction estimated in Plan A (844 AF), while decreasing program costs during the first two years by 78% (a $253,700 savings)Error! Reference source not found.. The cost per acre-foot of demand reduction for Plan C is the lowest of the three plans used in this evaluation, with a value of about $83. 1535
1071 739
279
243
105
$341,616
($188/AF)
$161,446
($123/AF)
$70,000
($83/AF)
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
0 200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Plan A Plan B Plan C
Water Savings (AF)
Active Water Savings Passive Water Savings Total Program Cost
7. FINAL WATER
CONSERVATION
PROGRAM
Selection Criteria
The development of this Water Conservation Plan utilized the AWWA Manual of Water Supply Practices, M52 – Water Conservation Programs – A Planning Manual. Internally, the City identified four goals of the water conservation rebate program, which carry over to the entire water conservation program. These goals are:
• Support a community that already conserves water.
• Increase conservation among CII properties.
• Maximize water savings with available resources.
• Create a plan that is equitable across all user groups.
When a community has largely embraced water conservation as a way of life, such as San Luis Obispo, it is important to support the programming that has provided that success and to avoid demand hardening. As such, several of the water conservation measures included in the City’s final water conservation plan are continuations of previous measures, such as communication, outreach, education, and home water reports. Given that 69% of the City’s water use is attributed to residential water use, historical water conservation programs have focused heavily on providing water devices and rebates to residential customers.
Description of Program Components
Continued Programming
The City will continue the operational, external, and regulatory programs outlined in Section 4 of this plan. By leveraging the knowledge gained from the implementation of these programs over the years, these programs can become more refined, targeted, and impactful.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 39 New Measures Selected
The City has implemented (as of January 1, 2023) the water conservation measures from Plan C, described in Section 6 of this report. This includes rebates for the following:
• Single-Family Residential High-Efficiency Toilets
• Multi-Family Residential High-Efficiency Toilets
• Multi-Family Residential Large Landscape Smart Irrigation Controllers • Commercial, Industrial, and Institutional High-Efficiency Toilets • Commercial, Industrial, and Institutional High-Efficiency Urinals • Restaurant Dipper Wells
Staff are in the process of updating and developing water budgets for City parks and recycled water sites. A third party will be hired to develop additional water budgets for select CII properties that have a DIM. These budgets will allow city staff to identify customers that are over budget and offer assistance to help lower their water use by improving irrigation system performance and management. Understanding if a property is exceeding a water budget will help ensure efficient water use and that the City remain in compliance with the supplier level requirements for the State’s CII Standard and Performance Measure requirements.
Future Options
Following regularly scheduled evaluations of the water conservation program, the City may implement water conservation measures included in Plan B in addition to, or in place of, the water conservation measures included in Plan C. Existing water conservation measures will be evaluated for community participation and water savings to determine if changes to the program are necessary. Changes will be made based on the information gathered during the conservation plan development detailed in Section 6 of this report and available City resources. The City is also developing programs and processes that should result in water conservation, in addition to water conservation measures, some of which are described below.
The City of San Luis Obispo is in the process of converting its water meters from mechanical meters to ultrasonic digital meters that will be compatible with AMI. AMI enables two-way communication between water providers and consumers for monitoring and managing water usage. The benefits of AMI include real-time monitoring, leak detection, demand management, and customer engagement which can improve operational efficiency, conserve water, and enhance customer service. The movement towards AMI citywide will require a significant work effort from the City, including replacing all existing mechanical meters, installation of cellular hardware, establishing a reliable communication network and robust data management system, and educating customers regarding the transition. AMI-compatible water meters provide many benefits, even if the system is not converted to an AMI system.
City staff are also currently participating in the AWE learning cohort on cooling towers. The goal of this program is to bring together water utilities across the nation to discuss rebates or regulatory requirements that encourage efficient water use for cooling towers. The City is in the process of evaluating if an incentive or regulatory based cooling tower water conservation measure could be implemented depending on projected water savings, funding, and staff availability.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 40 The City is developing a strategy to update its method for estimating water supply and demand using land use-based demand projections instead of the current method which uses population and the SB X7-7 water use target. This method will mirror the methods used by the California Department of Water Resources in determining UWUOs.
Projected Water Savings
Table 8 shows the projected per capita water use in AF in 5-year increments for the projected demand with no plumbing code savings, projected demand with plumbing code savings, and projected demand with plumbing code savings and the recommended program implementation.
It should be noted that not all of the water conservation measures, such as public outreach, educational programs, and water waste regulations, could be quantified to be included in the model. Furthermore, these estimates assume that the quantity of the measure is fully utilized (i.e. the anticipated number of rebates are fully utilized by the community).
Table 8. Projected Water Demands.
2025 2030 2035 2040
Population 51,317 53,934 57,200 60,118
“Baseline” Demand without Plumbing Code (acrefeet)5,213 5,638 6,092 6,578 Demand with Plumbing and Landscape Standards
(acre-feet)
4,922 5,128 5,372 5,665
Demand with Plumbing and Landscape Standards
and Recommended Program Plan C (acre-feet)
4,883 5,093 5,360 5,660
Additional Benefits
Water conservation programs provide benefits ancillary to water savings and prolonging water supplies. Water conservation programs are instrumental in helping water utilities meet water use objective and leak reduction compliance goals, which are paramount in California. Reducing per capita water use alleviates the need for expanded water supplies or water treatment and distribution infrastructure, which results in deferred infrastructure upgrades. Also, reducing water use is directly related to decreased energy consumption, which reduces greenhouse gas emissions and can also reduce energy costs for the utility and the water customers.
Regulatory Compliance
Although the City is currently below the SB X7-7 required 117 GPCD, implementation of the Water Conservation and Efficiency Plan will ensure that total GPCD remains low as population continues to increase. Additionally, various measurable objectives outlined in Conclusion of this plan are requirements of SB 606 and AB 1668 regardless of whether annual water use is below the calculated Urban Water Use Objectives (UWUO)
38. Periodic reviews and updates will ensure that
38 The California Urban Water Use Objectives are calculated following California Water Code §10609.20, which can be accessed at:
https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=10609.24.&lawCode=WAT
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 41 the Water Conservation and Efficiency Plan remains current with the most up-to-date regulatory requirements and industry best practices, which will help the City to maintain its compliance with relevant water conservation regulations. Ultimately, the implementation of the Water Conservation and Efficiency plan is a proactive approach to ensure that the City meets its regulatory obligations, even as population increases and weather becomes more unpredictable.
Leak Reduction
In addition to a reduction in overall water usage, implementation of the Water Use and Efficiency Plan will also lead to water savings through a reduction in water leaks. Water leaks result in wasteful energy and financial resources. Not only does water that is lost because of a leak require additional energy to pump and treat the lost water, but water leaks can also cause costly damage to infrastructure. On an individual level, customers face high bills and potential structural damage and mold growth. For the City, small leaks will eventually turn into larger leaks, such as main line breaks in the distribution system, that require extensive financial resources such as staff time and materials. Larger breaks may also disrupt water pressure, thus affecting the efficiency and effectiveness of the overall supply. Measures that specifically focus on leak detection and repair, such as AMI, will help to ensure that any leaks in the system are promptly identified and fixed.
Moreover, by raising awareness about the importance of water conservation among the community, the plan encourages individuals to adopt water-saving behaviors, such as addressing leaks as soon as they are identified. Through these efforts, the City can significantly reduce overall water system leakage both internally and externally throughout the community.
Deferred Infrastructure Upgrades
Implementation of the Water Conservation and Efficiency Plan can also significantly contribute to deferring infrastructure upgrades related to water supply acquisition, treatment, and distribution.
By reducing water demand through water conservation measures, the need to construct additional water supply sources or expand existing treatment facilities is reduced. This can result in considerable cost savings and a reduction in carbon emissions, energy use, and environmental impacts associated with the construction of new facilities. Therefore, the implementation of the Water Conservation and Efficiency Plan can be an effective strategy for the City to manage its water resources sustainably while minimizing the need for costly and potentially disruptive infrastructure upgrades.
Greenhouse Gas Reductions
Water conservation and efficiency also often have ancillary benefits of reductions in energy use and greenhouse gas (GHG) emissions associated with water supply, treatment, and use. GHG emissions are released during water supply pumping, treatment, and distribution, the treatment of wastewater, and if there is any energy associated with the operation of appliances and equipment that require water for end-users. By reducing water demand through water conservation, the City can reduce the energy required for water pumping and treatment and the community can reduce the energy required for use, thus resulting in a decrease in GHG emissions. Additionally, by deferring infrastructure updates, GHG emissions related with construction and maintenance activities such as the use of heavy equipment can be avoided.
The City of San Luis Obispo established a community-wide goal to reduce community greenhouse gas emissions to reach carbon neutrality by 2035. The City has established a culture of using resources mor effectively and strive to improve community equity and well-being.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 42 For the estimated amount of water saved through the implementation of this plan, there is an estimated embedded energy intensity savings of 2,177 kilowatt-hours per acre-foot (kWh/AF). By multiplying the water savings times the energy intensity and a GHG emission factor estimated by PG&E this converts to an estimated 2,106 pounds of carbon dioxide (CO2) equivalent per AF. It should be noted that emission factors are estimated based on the California Public Utilities Commission calculator and that additional GHG savings from hot water savings at the end user level and from reduced wastewater collection, treatment, and disposal energy are not quantified.
Total projected annual CO2 equivalent savings for each year are estimate in Table 9.
Table 9. Estimated CO2 Savings from Implementation of the Selected Water Conservation Program.
Year Cumulative Tons of CO2 Equivalent Savings
2025 2,581
2030 8,582
2035 17,004
2040 27,515
Next Steps
Annual monitoring and reporting of the City’s water supply status will continue, and updates to the City’s UWMP and WSCP will continue on a five-year cycle. The City understands that water use is dynamic and responds to changes in population, economy, weather, regulations, and technology. Therefore, the City may adjust water conservation targets and schedules as needed.
This may include expanding or scaling back various water conservation measures to meet budget and staffing restrictions, increase efficiency, or adopt new technologies or better methods. With the calculated water savings identified for various water conservation measures in this plan, the City will be able to adjust program components to strive to meet the measurable objectives discussed below.
Implementation Schedule
The Water Conservation and Efficiency Plan will act as a road map, outlining anticipated new water conservation measures until 2040. Table A6 in the Appendix of this report shows the implementation schedule for the planned conservation measures. However, the implementation schedule will remain adaptable over time, as it is subject to modifications based on changes in budget and staffing resources. The determination of specific measures will be guided by key questions, including but not limited to:
• What level of support will be required from conservation staff to implement and maintain the selected water conservation measures?
• What other support is needed (e.g. outsourced support or other sources of funding) or wanted to implement and maintain these programs?
• Does the conservation measure meet other Departmental objectives? • How quickly can the conservation measure be implemented? It should be noted that although new water conservation measures may be implemented on schedule, high participation rates will be crucial to achieving the estimated demand reduction and measurable objectives outlined below. Therefore, the following benchmarks will be used to help gauge progress and determine the effectiveness of the individual measures that are implemented.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 43 Measurable Objectives
Baseline Water Usage and Water Use Efficiency Standards Baseline water use will serve as a reference point for measuring future reductions and efficiency improvements. Water use efficiency standards set by the State, or locally, will define the upper limit of water use targeted by the City’s water conservation program. A water conservation program that results in water use below these standards will be considered a success.
Participation Rates
Staff will track the number of items offered and level of participation from individuals, households, community groups, and businesses for water conservation measures that are implemented. This will include the number of:
• Rebates approved
• Tours provided
• Youth education classes offered
• Plans reviewed for conformance with MWELO requirements • Complimentary water conservation items provided
• Technical assistance visits conducted
• Water waste violations investigated
• Plumbing retrofit certifications approved
Cost Per AF Saved
Staff will monitor water use for program participants that can be tracked, such as rebate programs, to determine the cost to the Utilities Department per acre-foot of water saved.
These benchmarking metrics will then be used during the performance tracking and review process to modify the overall program and improve future processes and procedures.
Budget and Staffing
In recent years, water agencies have recognized the value of water conservation as an essential component of their water supply portfolio. Conserving water not only reduces the need for additional water extraction, treatment, and distribution, but also mitigates the necessity for securing extra water sources to meet future demands and buffer supplies. The estimated cost of water saved per unit volume ($/AF) for the Final Water Conservation measures outlined in this plan is $83/AF. This cost is lower than the average expense of obtaining, treating, and distributing water from the City’s three surface water reservoirs, which is currently estimated to be about $276/AF.
39 Consequently, water conservation serves as a cost-effective solution when considering the expenses of future water supplies.
The budget for the City’s Water Conservation Program may vary, particularly during drought periods. For instance, additional funds were allocated in the City’s 2022-23 Budget Supplement to support increased public outreach, hire additional support staff, and launch a new water conservation rebate program, all in response to the drought. Therefore, staff will use the Water Conservation and Efficiency Plan as a roadmap to implement water conservation measures that 39 This is the variable production cost estimated in the City’s 2021 Water Loss Audit. This is the cost to produce and supply the next unit of water and can include both short-run and long-run marginal costs.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 44 have the potential to create the largest water savings while aligning with the City’s current financial or mid-year financial plan. Staff will also aim to actively seek partnerships and apply for grants that maximize support for water conservation measures as staffing and resources allow.
Performance Tracking and Review
The use of measurable objectives will help clearly identify the overall progress and performance of the City’s Water Conservation and Efficiency Plan. Staff will track the participation and effectiveness of individual water conservation measures through the benchmarks identified above and the overall performance of the plan through the following measurable objectives listed below.
Measurable objectives were chosen based on historical tracking and current and anticipated future regulatory compliance metrics.
• Meet the City’s UWMP GPCD target and current state GPCD regulations annually. • Meet the state’s requirements for outdoor residential landscape standards annually. • Meet the state’s water loss standards in gallons per connection per day annually. • Document increased water use efficiency for CII DIMs. • Document increased water use efficiency for the highest 20% water-users for each classification of CII properties (excluding process water use). • Document increased water use efficiency for the top 5% of individual CII accounts (excluding process water use).
After compiling the measurable objectives, staff will conduct a comprehensive review and analysis to determine the extent to which these objectives were met or fell short. This evaluation will enable the staff to identify programs or customer groups that may require additional resources, staff allocation, or funding to ensure the ongoing fulfillment of the community's Water Conservation and Efficiency Plans goals. Furthermore, these reviews will serve as an opportunity to incorporate new ideas and regulatory requirements, thereby ensuring that the City not only complies with but also surpasses water conservation regulations. The findings of these reviews and potential updates will be provided in the City’s annual Water Supply and Demand Assessment and fiveyear UWMP in accordance with the policies and procedures identified in the City’s General Plan WWME. The Water Conservation and Efficiency Plan will be reviewed and updated at least once every five years.
8. CONCLUSION
The City’s Water Conservation and Efficiency Plan uses the latest tools and information to develop a conservation plan that builds on the City’s history of building a strong water conservation ethic. This plan aims to proactively meet State mandated water use efficiency standards using an equitable, budget-conscious approach. Development of the latest water conservation program has provided information that will be used to modify future water conservation programs as needed, to maximize community participation and water savings.
The following is a summary of the key findings of this plan. These key findings demonstrate the City’s commitment to strategic and sustainable water management practices that will help ensure the City of San Luis Obispo continues to have a resilient water future.
Water Savings and Ancillary Benefits
The water conservation program developed as part of this Water Conservation and Efficiency Plan is estimated to save as much as 844 AF/Year. This water remains in the City’s available water supplies to provide for future demand, or as Reliability Reserve or Secondary Water Supply.
Additional benefits to implementing this water conservation program include regulatory compliance, leak reduction, deferred infrastructure upgrades, and reducing greenhouse gasses and energy costs.
Enhanced Understanding
The utilization of emerging tools for the development of this plan has provided the City with a deeper understanding of water demand and the potential impact of water conservation measures on future water conservation efforts. Implementation of the Water Conservation and Efficiency Plan will allow the City to continue to integrate innovative techniques and tools into the community’s water conservation practices moving forward.
Integral Role of Conservation
Water conservation has played a crucial role in the City’s water supply planning and has allowed the City to ensure the fulfillment of foreseen and unforeseen water demands and regulatory obligations. Water conservation preserves available water supplies for unforeseen short-term demands and preserves stored water resources to be used during future droughts. The
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 46 measurable objectives in this plan will align the City with that State’s “Making Water Conservation a California Way of Life” legislation (SB 606 and AB 1668). Therefore, the City will be able to utilize the Water Conservation and Efficiency Plan to fulfill its compliance obligations to meet regulatory requirements as these and other new water conservation regulations are put in place by the state and federal governments.
Cost-Effectiveness
Conservation is recognized as one of the most cost-effective strategies for meeting current and future water needs. The implementation of the water conservation measures identified in this plan has the potential to reduce the necessity for further infrastructure upgrades and expansion.
Additionally, the ability of the Conservation Tracker Tool to provide estimates of benefit-cost ratios of conservation measures allows the City to implement a cost-effective water conservation program.
Proactive Management
The Water Conservation and Efficiency Plan aligns with the City’s approach to actively managing water supply to meet both current and future demands under various climate scenarios, helping to ensure long-term water sustainability. The plan provides metrics that can be used to estimate future water savings and to measure the effectiveness of the water conservation program. Should the program not meet the City’s goals, the plan provides alternative pathways that can be utilized to help improve program effectiveness. Coupled with the tools the City has historically used to proactively manage its water resources, the Water Conservation and Efficiency Plan adds another layer to the City’s informed decision making.
9. APPENDIX
Table A 1. Commercial, Industrial, and Institutional (CII) Water Account Classifications Class Code Class Code Definition
Airport This includes all meters that service the San Luis Obispo County Regional Airport.
Auto Services This includes all meters that service commercial automobile services, including mechanics, detailing services, gas stations, motor vehicle sales, towing services, and vehicle rentals. Please note that this does not include meters that service car wash facilities.
Car Wash This includes all meters that service the various types of car washes:
self-service, automated, hand wash, etc. Gas stations that include car washes should be categorized as "Auto Services".
Cemetery This includes all meters that service areas with graves, tombs, and funeral urns.
City Facility This includes all meters that service City of SLO buildings and facilities that are not associated with City of SLO parks (i.e. City Hall, 879 Morro, etc.)
City Park Facility This includes all meters that service City of SLO park facilities (i.e. park restrooms, park water fountains, etc.).
Convenience
Store
This includes all meters that service convenience stores, including liquor stores.
Entertainment with
Food
This includes all meters that service entertainment facilities that provide customers food services (i.e. theaters and bowling allies).
Entertainment
without Food
This includes all meters that service entertainment facilities that do not offer customers food services (i.e. museums).
Food and
Beverage
This includes all meters that service full-service restaurants, bars, fast food eateries, catering services, service bakeries, cafes, and coffee shops.
Grocery Store This includes all meters that service grocery stores and supermarkets.
Group Live-in This includes all meters that service facilities providing rehabilitation services, such as housing and drug and alcohol rehabilitation.
Health Care This includes all meters that service public and private hospital facilities, private medical centers, doctors’ offices, labs, and long-term nursing homes: institutions equipped to care for people unable to look after themselves, as the aged or chronically ill. Please note that there is a separate category for retirement homes.
Hotel/Motel This includes all meters that service properties identified by the downtown association to be a hotel or motel.
Industrial This includes all meters that service industrial facilities, including manufacturing and warehousing facilities.
Laundry Facility This includes all meters that service commercial laundry services and dry-cleaning facilities. Please note that there is a separate category for residential laundry facilities.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 48 Misc Commercial This includes all meters that service commercial facilities that do not fall into any of the commercial categories identified above.
Office This includes all meters that service office buildings.
Other Public
Facility
This includes all meters that service public institutional facilities not owned by the City of SLO (i.e. County/State/Federal administrative offices, post offices, public use buildings, etc.)
Pool This includes all meters that service community pools.
Preschool/Daycare This includes all meters that service commercial and non-profit childcare services. Religious institutions that include child services should still be listed as religious buildings if there is only one meter.
School This includes all meters that service public and private primary and secondary educational institutions. Please note that there is a separate category for Cal Poly meters under the Other category.
Religious Building This includes all meters that service religious facilities.
Residential
Laundry
This includes all meters that service only laundry facilities on residential properties (i.e. non-commercial).
Retirement Home This includes all meters that service retirement facilities: institutions equipped to care for people who are independent but want to be able to access care and support if they need it. Please note nursing homes fall under the Health Care class code.
Sales/Services This includes all meters that service retail and service stores, commercial shopping centers, commercial personal service facilities (such as beauty salons, massage facilities, and fitness/recreational facilities), or business centers that include a variety of commercial businesses.
Utility This includes all meters that service non-City run utility facilities (i.e. gas, electric, etc.)
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 49 Table A 2. Plan A Water Conservation Measure Parameters.
Water Conservation Measure
Cost to
Utility
($/Unit)
Quantity
Year 1
Quantity
Year 2
Quantity
(Annual
Thereafter)
SFR Home Water Report $0.00* 250 250 250
SFR ULFT Replacement (1.6 GPF) $100.00 100 100 -
SFR HET Replacement (1.28 GPF) $100.00 100 100 -
SFR Washer Rebate (WF <=4) $150.00 40 40 -
SFR Showerhead Replacement (<= 1.8 GPM) $6.00** 50 50 50 SFR Smart Irrigation Controller Rebate $130.00 20 20 -
SFR Turf Replacement $1.00/sq ft 5000 5000 -
SFR Graywater Laundry to Landscape
Rebate $200.00 10 10 -
SFR Rain Barrel (< 200 gal) Rebate $50.00 20 20 -
MFR Water Use Audit $0.00* 250 250 250
MFR ULFT Replacement (1.6 GPF) $100.00 100 100 -
MFR HET Replacement (1.28 GPF) $100.00 100 100 -
MFR In-Unit Washer Rebate (WF <=4) $150.00 100 100 -
MFR Shared Washer Rebate (WF <=4) $350.00 20 20 -
MFR Showerhead Replacement (<= 1.8
GPM) $6.00** 10 10 10
MFR Large Landscape Smart Irrigation
Controller Rebate $700.00 12 12 -
MFR Turf Replacement $1.00/sq ft 5000 5000 -
CII ULFT Replacement (1.6 GPF) $100.00 100 100 -
CII HET Replacement (1.28 GPF) $100.00 100 100 -
CII Urinal (Waterless) Replacement $100.00 12 12 -
CII Urinal (1/8 GPF) Replacement $100.00 12 12 -
CII Washer Rebate (WF <=4) $350.00 14 14 -
CII Commercial Kitchen Dishwasher Rebate $700.00 7 7 -
CII Commercial Kitchen Spray Rinse Valve
Rebate $31.85** 20 20 20
CII Commercial Kitchen Food Streamer
Rebate $1,400.00 7 7 -
CII Restaurant Dipper Well Rebate $150.00 7 7 -
CII Large Landscape Irrigation Controller $1400.00 12 12 - CII Large Landscape Turf Replacement $1.00/sq ft 5000 5000 - CII Large Landscape Water Budget $250.00 20 20 -
*SFR Home Water Report and MFR Water Use Audits set to $0.00 because this is a standard service that Water Resources staff provides the community.
**SFR/MFR showerheads and CII Kitchen Spray Rinse Valves are kept at their true cost in Program 1 to compare to other measures.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 50 Table A 3. Benefit-Cost Ratio for Conservation Measures Included in Plan A.
Water Conservation Measure BenefitCost Ratio
SFR Rain Barrel (< 200 gal) Rebate 0.6
SFR Graywater Laundry to Landscape Rebate 2.1
MFR Turf Replacement 3.7
CII Large Landscape Turf Replacement 3.7
SFR Turf Replacement 3.7
SFR Smart Irrigation Controller Rebate 7.6
MFR In-Unit Washer Rebate (WF <=4) 8.3
CII Commercial Kitchen Food Steamer Rebate 10.0
SFR Washer Rebate (WF <=4) 12.4
MFR Shared Washer Rebate (WF <=4) 16.5
CII Washer Rebate (WF <=4) 16.5
CII Large Landscape Water Budget 16.9
CII Large Landscape Irrigation Controller 19.7
SFR ULFT Replacement (1.6 GPF) 29.5
CII Commercial Kitchen Dishwasher Rebate 29.7
CII Commercial Kitchen Spray Rinse Valve Rebate 39.6
CII ULFT Replacement (1.6 GPF) 41.1
MFR ULFT Replacement (1.6 GPF) 42.6
MFR Large Landscape Smart Irrigation Controller Rebate 62.8 SFR Home Water Report 100.0
MFR Water Use Audit 100.0
SFR HET Replacement (1.28 GPF) 105.3
CII Restaurant Dipper Well Rebate 109.2
CII Urinal (1/8 gpf) Replacement 116.6
MFR HET Replacement (1.28 GPF) 117.0
CII Urinal (Waterless) Replacement 126.2
CII HET Replacement (1.28 GPF) 146.5
MFR Showerhead Replacement (<= 1.8 GPM) 175.9
SFR Showerhead Replacement (<= 1.8 GPM) 175.9
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 51 Figure A 1. Plan A Annual Program Water Savings.
Table A 4. Plan B Water Conservation Measure Parameters.
Water Conservation Measure Utility
($/Unit)
Quantity
Year 1
Quantity
Year 2
Quantity
(Annual
Thereafter)
SFR Home Water Report $0.00* 250 250 250
SFR HET Replacement (1.28 GPF) $100.00 100 100 -
SFR Showerhead Replacement (<= 1.8 GPM) $6.00** 50 50 50 MFR Water Use Audit $0.00* 250 250 250
MFR HET Replacement (1.28 GPF) $100.00 100 100 -
MFR ULFT Replacement (1.6 GPF) $100.00 100 100 -
MFR Showerhead Replacement (<= 1.8 GPM) $6.00** 10 10 10 MFR Large Landscape Smart Irrigation
Controller Rebate
$700.00 12 12 -
CII HET Replacement (1.28 GPF) $100.00 100 100 -
CII ULFT Replacement (1.6 GPF) $100.00 100 100 -
CII Urinal (1/8 GPF) Replacement $100.00 12 12 -
CII Urinal (Waterless) Replacement $100.00 12 12 -
CII Commercial Kitchen Dishwasher Rebate $700.00 7 7 -
CII Commercial Kitchen Spray Rinse Valve
Rebate
$31.85** 20 20 20
CII Restaurant Dipper Well Rebate $150.00 7 7 -
CII Large Landscape Water Budget $250.00 20 20 -
*SFR Home Water Report and MFR Water Use Audits set to $0.00 because this is a standard service that Water Resources staff provides the community.
**SFR/MFR showerheads and CII Kitchen Spray Rinse Valves are kept at their true cost in Program 2 to compare to other measures. However, these measures would fall under the standard $5,000 annual complimentary water conservation item budget.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 52 Figure A 2. Plan B Annual Program Water Savings.
Figure A 3. Benefit Cost Ratio Versus Expected Water Savings CII Large Landscape
Water Budgets
CII Commercial Kitchen
Dishwasher Rebate
MFR Large Landscape Smart
Irrigation Controller Rebate
CII Restaurant Dipper
Well Rebate
0 200
400
600
800
1000
1200
1400
0 5 10 15 20
Expected Water Savings (GPD/Unit)
Benefit-Cost Ratio
CII Large Landscape Water Budgets CII ULFT Replacement (1.6 GPF) MFR ULFT Replacement (1.6 GPF) CII Commercial Kitchen Dishwasher Rebate CII Commercial Kitchen Spray Rinse Valve Rebate MFR Large Landscape Smart Irrigation Controller Rebate SFR Home Water Report MFR Water Use Audit
SFR HET Replacement (1.28 GPF) CII Restaurant Dipper Well Rebate CII Urinal (1/8 gpf) Replacement MFR HET Replacement (1.28 GPF) CII Urinal (Waterless) Replacement CII HET Replacement (1.28 GPF) MFR Showerhead Replacement (<= 1.8 gpm) SFR Showerhead Replacement (<= 1.8 gpm)
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 53 Table A 5. Plan C Water Conservation Measure Parameters.
Water Conservation Measure Utility
($/Unit)
Quantity
Year 1
Quantity
Year 2
Quantity
(Annual
Thereafter)
SFR Home Water Report $0.00* 250 250 250
SFR HET Replacement (1.28 GPF) $100.00 100 100 -
SFR Showerhead Replacement (<= 1.8 GPM) $0.00** 50 50 50 MFR Water Use Audit $0.00* 250 250 250
MFR HET Replacement (1.28 GPF) $100.00 44 44 -
MFR Showerhead Replacement (<= 1.8 GPM) $0.00** 10 10 10 MFR Large Landscape Smart Irrigation
Controller Rebate
$700.00 8 8 -
CII HET Replacement (1.28 GPF) $100.00 70 70 -
CII Urinal (1/8 GPF) Replacement $100.00 20 19 -
CII Commercial Kitchen Spray Rinse Valve
Rebate
$0.00** 20 20 20
CII Restaurant Dipper Well Rebate $150.00 7 7 -
CII Large Landscape Water Budget $250.00 20 20 -
*SFR Home Water Report and MFR Water Use Audits set to $0.00 because this is a standard service that Water Resources staff provides the community.
**Price set at $0.00 because the measure is included in the standard $5,000 annual complimentary water conservation item budget.
Figure A 4. Plan C Annual Program Water Savings.
City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 54 Table A 6. Implementation Schedule.
Mea
sure
Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9
Year 10Year 11Year 12Year 13Year 14Year 15Year 16Year 17Year 18 Pu
blic
Inf
or
mat
ion
and
Out
rea
ch
Ho
me
Wa
ter
Us
e
Re
por
ts
Lea
k
As
sist
anc
e
Plu
mbi
ng
Ret
rofi
t
Pro
gra
m
Co
mpl
ime
nta
ry
Co
nse
rva
tio
n
Ite
ms
Wa
ter
Effi
cie
nt
Lan
dsc
ape
Ord
ina
nce
Hig
h
Effi
cie
ncy
Toil
et
Re
bat
e
(1.2
8 GP
F)
Uri
nal
Re
pla
ce
me
nt
Re
bat
e
(1/8
GP
F)
Larg
e
Lan
dsc
ape
Sma
rt
Irrig
atio
n
Con
troll
er
Reb
ate
CII
Re
sta
ura
nt
Dip
per
Wel
l
Re
bat
e
CII
Lar
ge
Lan
dsc
ape
Wa
ter
Bu
dge
ts
Ex
pan
ded
Wa
ter
Us
e
Au
dits
Ad
van
ced
Met
eri
ng
Infr
ast
ruc
tur
e
(A
MI)
On
goi
ng
Sys
tem
Wat
er
Los
s
Red
ucti
on
Pro
ject
s
Co
mm
erci
al
Kit
che
n
Dis
hw
ash
er
Re
bat
e
City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: May 20, 2025
TO: Mayor and Council
FROM: Matt Horn, Public Works Director
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 6g - AUTHORIZE EXECUTION OF OPEN-LOOP PAYMENT SYSTEM AGREEMENTS AND AN AMENDMENT TO SB 125
COOPERATIVE AGREEMENT WITH SLOCOG FOR REIMBURSEMENT
OF COSTS
Staff received the following question regarding the recommendation to authorize the execution of agreements to implement an open-loop payment system that will deploy fare capping technologies. The question is below with staff’s response shown in italics:
1) Can you please provide more explanation of what “fare capping” is and why the proposed upgrades help provide this service/feature? Fare capping is a pricing strategy used by transit agencies to ensure that riders never pay more than a certain amount for rides over a specific period - usually daily or monthly. It provides the benefits of unlimited rides allowed with a pass without requiring riders to pay the full upfront cost. Instead of buying a pass in advance, riders pay per ride. As they continue to ride, the system tracks how much they've spent using a single bank card. Once they reach a pre-determined cap (e.g., the cost of a day or month pass), any additional rides during that time period are free. The cap then resets at the beginning of each new period.
Fare capping provides several important benefits for both public transit riders and transit agencies. For riders, it ensures fairness and affordability by placing a limit on how much they can be charged over a day, week, or month—regardless of how many individual fares they pay. This is especially helpful for low-income riders who may not be able to afford the upfront cost of a monthly pass but still use transit frequently. Fare capping encourages greater use of public transportation, as it removes the pressure to decide in advance whether a pass is worth purchasing.
This approach promotes equity by benefiting both occasional and regular users and making transit more accessible to everyone.
For transit agencies, fare capping can lead to increased ridership and improved public perception, as riders view the system as fair, simple, and easy to understand. It also streamlines operations by reducing the need for physical pass infrastructure and minimizing cash handling, which can lower administrative costs.
Overall, fare capping supports a more equitable and efficient transit system that benefits the community as a whole.
Item 6g
Department: Public Works
Cost Center: 5201
For Agenda of: 5/20/2025
Placement: Consent
Estimated Time: N/A
FROM: Matt Horn, Public Works Director
Prepared By: Alex Fuchs, Mobility Services Business Manager SUBJECT: AUTHORIZE EXECUTION OF OPEN-LOOP PAYMENT SYSTEM AGREEMENTS AND AN AMENDMENT TO SB 125 COOPERATIVE
AGREEMENT WITH SLOCOG FOR REIMBURSEMENT OF COSTS
RECOMMENDATIONS
1. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving agreements for San Luis Obispo (SLO) Transit’s open-loop payment system project”; and
2. Authorize execution of Amendment No. 1 to the Senate Bill (SB) 125 Cooperative Agreement with SLOCOG for reimbursement of open-loop payment system project costs; and
3. Authorize execution of an agreement with Kuba, Inc. for procurement, installation, and warranty of payment acceptance devices; and
4. Authorize execution of an agreement with Kuba Inc. for ongoing support services for payment acceptance devices; and
5. Authorize execution of an agreement with Littlepay, Inc. for transit processor services; and
6. Authorize execution of an agreement with Token Transit, Inc. for integration and ongoing support of digital pass and fare purchases; and
7. Authorize the Finance Director to negotiate and execute an agreement with Elavon, Inc. for merchant processing services as part of the system configuration process.
POLICY CONTEXT
On January 23, 2024, Council held a Study Session to review the draft Transit Innovation Study1. The Study Session included a review of 17 recommendations intended to enhance mobility, restore ridership, and improve technology. The second highest ranked recommendation was to purse open loop payments through California’s Integrated Travel Project. An open-loop payment system allows riders to pay with contactless payment
1 Item 7a. Study Session: Transit Innovation Study Review
Item 6g
options like chip-enabled bank cards as well as with Google Pay and Apple Pay through on-board payment acceptance devices. Council directed staff to finalize the report and to begin implementation. The recommendations in this report are consistent with Council’s direction and the implementation of the Transit Innovation Study recommendations.
Under the City’s Municipal Code 3.24.060(E), bid procedures may be waived and procurement obtained from a single sole-source when the purchase will be made cooperatively with one, or more, other units of government. The recommendations in this report are consistent with this section as the open-loop payment system agreements reflect pre-negotiated prices based on statewide contracts.
REPORT-IN-BRIEF
SLO Transit’s Transit Innovation Study (Section 4.2) recommends pursuing open-loop payments in coordination with San Luis Obispo Council of Governments (SLOCOG) and San Luis Obispo Regional Transit Authority (RTA) through California’s Integrated Travel Project. SLOCOG applied for and was approved to allocate funding for the implementation of a region-wide open-loop payment system project. In August 2024, a working group was formed to develop and release a scope of work, review vendor proposals, and discuss integrations with existing systems needed for project implementation.
Staff is recommending amending an existing cooperative agreement with SLOCOG to include the open-loop payment project so the City can be reimbursed for associated costs. Staff is also recommending approving agreements with multiple vendors for hardware and software needed to fully implement the project. The recommended actions listed above will authorize these requested agreements.
DISCUSSION
Background
The California Integrated Travel Project (Cal-ITP) was launched in 2019 by the California State Transportation Agency (CalSTA) and the California Department of Transportation (Caltrans). Cal-ITP is a statewide initiative designed to make public transportation more accessible, efficient, and user-friendly by integrating payment systems, data standards, and real-time travel information across agencies.
The primary element of the initiative is assisting transit agencies with the procurement of an “open-loop” payment system. An open-loop payment system allows riders to pay with contactless payment options like Google Pay and Apple Pay through on-board payment acceptance devices. The payment devices integrate with a transit processing software to calculate fares and allows contactless payment users to benefit from “fare capping” technology. Fare capping ensures riders never pay more than a set maximum amount for fares over a given period (daily and monthly in this case).
Cal-ITP partnered with the Department of General Services to offer multiple statewide
Item 6g
Master Service Agreements for the hardware and software needed to implement an openloop payment system. The Master Service Agreements include standard terms and conditions and pre-negotiated rates that agencies can use to purchase hardware and software necessary to implement an open-loop payment system. Cal-ITP also offers free procurement and technical assistance for interested agencies.
Senate Bill 125 Funding
On December 6, 2023, San Luis Obispo Council of Government’s (SLOCOG) board approved submittal of the Senate Bill (SB) 125 allocation package to the CalSTA. The allocation package included $2.6 million in funding for the implementation of a regionwide Cal-ITP contactless fare payment system. The funds are meant to cover initial procurement and installation costs as well as operational costs for a five-year period. As a project participant, the City is eligible for reimbursement of associated costs.
On January 14, 2025, City Council adopted Resolution No. 11538 (2025 Series)2 authorizing the Mayor to execute a cooperative agreement with SLOCOG for SB 125 funds and the appropriation of funds to associated capital projects. The cooperative agreement (Attachment A) needs to be amended to include the open-loop payment system project for reimbursement of project related costs incurred by the City.
Staff is recommending Council authorize execution of Amendment No. 1 to the SB 125 cooperative agreement with SLOCOG to include the open-loop payment system project (Attachment B).
Open-Loop Payment Vendor Selection
In August 2024, SLOCOG held a kick-off meeting with a working group consisting of representatives from the City, RTA, Morro Bay Transit, and Cal-ITP. This working group met regularly between September 2024 and April 2025 to develop and release a scope of work, review vendor proposals, and discuss integrations with existing systems. The scope of work solicited for proposals that included payment acceptance devices, transit processing services software, and merchant processing services.
Based on the proposals received, responses to follow-up questions, and discussions with peer agencies; the working group selected Kuba, Inc. as the preferred vendor for the payment acceptance devices, Littlepay, Inc. as the preferred vendor for the transit processing software, and Elavon, Inc. as the preferred vendor for merchant processing services. The working group believes that the selected vendors will be most appropriate to meet both agency-specific and regional fare structure needs.
Merchant processing services will be set up between thirty to sixty days before launch of the new payment system. A negotiated agreement is not available at the time this report was published; however, the Master Service Agreement3is available using the hyperlink at the bottom of this page. The Master Service Agreement includes standard terms and conditions as well as pre-negotiated rates for merchant processing services. Staff is,
2 Resolution No. 11538 (2025 Series)
3 Elavon, Inc. Master Service Agreement
Item 6g
therefore, recommending Council authorize the Finance Director to negotiate and execute an agreement with Elavon, Inc. for merchant processing services as part of the open-loop payment system configuration process.
Digital Pass and Fare Purchases Integration
SLO Transit offers digital passes and fares through the Token Transit, Inc. mobile application. Digital pass and fare sales make up a 60 percent of SLO Transit’s total pass sales revenue. The digital passes and fares are verified on the bus using a module provided by Token Transit that is mounted to the existing fare boxes. These modules are failing and are no longer supported by the manufacturer.
Kuba’s payment acceptance devices can integrate with Token Transit’s mobile application via QR code to allow for continued use of digital passes and fares. SLOCOG has agreed to cover the initial setup and on-going costs of the integration for a five-year period. The City would continue to be responsible for the per transaction fee charged by Token Transit. The City has the option to purchase new fare box mounted modules instead of integrating through the payment acceptance devices, but the cost would be higher. SLO Transit will continue to support cash payment and continue to accept prepurchased physical bus passes.
Execution of Agreements
Staff is recommending Council adopt a draft Resolution (Attachment C) approving execution of agreements with Kuba Inc. (Attachments D and E) for payment acceptance devices, with Littlepay, Inc. (Attachment F) for transit processing software, with Token Transit, Inc. (Attachment G) for digital pass and fare purchase integration, and to authorize the Finance Director to negotiate and execute an agreement with Elavon, Inc. for merchant processing services.
Next Steps
Once agreements are executed, it will take approximately 60 days to receive the hardware then begin installation and configuration. Staff anticipates the system will be ready for launch by the end of calendar year 2025.
Previous Council and Advisory Body Actions
1. January 14, 2025 – Council adopted Resolution No. 11538 (2025 Series) authorizing the Mayor to execute a cooperative agreement with SLOCOG for Senate Bill 125 funds and the appropriation of funds to associated capital projects.
2. December 11, 2024 – the Mass Transportation Committee voted in favor of recommending that, for the 2025-27 budget cycle, Council focus on all the “High Impact to Ridership” recommendations of the Transit Innovation Study which includes pursuing an open loop payment system.
3. January 23, 2024 – Council held a Study Session on the draft Transit Innovation Study report and directed staff to finalize the report and begin implementation.
Item 6g
Public Engagement
Throughout the development of the Transit Innovation Study, staff and the consultant solicited feedback from internal and external stakeholders. External stakeholders consisted of representatives from Cal Poly, Downtown SLO, San Luis Obispo Chamber of Commerce, RTA, SLOCOG, Mass Transportation Committee members, and Active Transportation Committee members.
Inclusion of an additional payment option will not negatively impact riders and the fare capping technology will benefit those riders that are unable to afford a 1-Day or monthly pass.
CONCURRENCE
The City Attorney’s Office has reviewed and provided suggested changes to the draft agreements and to the amendment to the cooperative agreement with SLOCOG except for the draft agreement with Elavon, Inc. which was not available for review at the time this report was drafted. The Attorney’s Office will review and provide suggested changes, if any, as part of the negotiation process.
The Finance Department concurs with the use of Elavon, Inc. for merchant processing services. The Information Technology (IT) Department concurs that the payment acceptance devices will function with the City’s overall IT infrastructure.
SLOCOG, RTA, and Morro Bay Transit are partner agencies in this regionwide effort and concur with the recommended actions in this report. On March 5, 2025, RTA’s board approved execution of an amendment to their cooperative agreement with SLOCOG and execution of agreements for implementation of their open-loop payment system.
ENVIRONMENTAL REVIEW
The recommended actions are not considered a “Project” under California Environmental Quality Act (CEQA) Guidelines Section 15378.
FISCAL IMPACT
Budgeted: No Budget Year: 2024-25
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
Transit Fund $ 0 $ 0 $ 0 $ 0
SB 125 Grant $ 271,000 $ 271,000 $ 0 $ 0
Federal
Item 6g
Fees
Other:
Total $ 271,000 $ 271,000 $ $
On December 6, 2023, SLOCOG’s board approved submittal of the SB 125 allocation package to CalSTA. The allocation package included $2.6 million in funding for the implementation of a regionwide Cal-ITP contactless fare payment system.
As a participant in this regionwide effort, the City’s cost to implement and operate the system for a five-year period is $271,000 based on Cal-ITP’s cost estimation tool (Attachment H). After the initial five-year period, the cost of operations, maintenance, and upgrade of the hardware and software would be the responsibility of the City.
The current cooperative agreement with SLOCOG for SB 125 grant funds must be amended to add this project and estimated costs for the City to be eligible for reimbursement using SB 125 funds.
ALTERNATIVES
1. Council could choose not to amendment the cooperative agreement with SLOCOG for SB 125 Grant Funds. Without amending the agreement, the City would be responsible for the full costs of implementing and operating the open-loop payment system.
2. Council could choose not to approve agreements necessary to implement an open-loop payment system project. SLOCOG will only reimburse the City for hardware and software procured through the state’s Master Service Agreements since the funding is directly tied to the Cal-ITP program.
ATTACHMENTS
A - SB 125 Cooperative Agreement with SLOCOG
B - Amendment No. 1 to SB 125 Cooperative Agreement
C - Draft Resolution approving open-loop payment system agreements D - Kuba, Inc. Draft Agreement for capital costs
E - Kuba, Inc. Draft Agreement for ongoing support services F - Littlepay, Inc. Draft Agreement
G -Token Transit, Inc. Draft Agreement
H - Open-Loop Payment System Cost Estimation
SLOCOG SB 125 Subrecipient Cooperative Agreement page 1 San Luis Obispo Council of Governments
Agreement No. SLO-SB 125-01
TRANSIT AND INTERCITY RAIL CAPITAL PROGRAM (TIRCP) AND
ZERO-EMISSION TRANSIT CAPITAL PROGRAM (ZETCP)
SUBRECIPIENT COOPERATIVE AGREEMENT
THIS AGREEMENT, ENTERED INTO ON THE DATE BELOW STATED is between the San Luis Obispo Council of Governments, referred to herein as "SLOCOG", and the CITY OF SAN LUIS OBISPO a municipal corporation, referred to herein as the “CITY”.
RECITALS
WHEREAS, Senate Bill (SB) 862 (2014) created the TIRCP to provide grants from the Greenhouse Gas Reduction Fund (GGRF) and authorized the California State Transportation Agency (CalSTA) to administer the program; and,
WHEREAS, SB 1 (2017) directs funds to the TIRCP from the Public Transportation Account (PTA); and, WHEREAS, Assembly Bill 102 (2023) and SB 125 (2023) amended the Budget Act of 2023 to appropriate funding from the state’s General Fund, GGRF, and PTA to the TIRCP and ZETCP, which shall be distributed to pursuant to a population based formula to regional transportation planning agencies (RTPA) as defined in Section 13987 (j) of the Government Code; and,
WHEREAS, SB 125 authorizes RTPA to request use of TIRCP and ZETCP funding for high-priority transit capital projects consistent with the uses allowed in Cycle 6 of the TIRCP, zero-emission transit vehicles and supporting infrastructure, transit operating expenses that prevent service cuts, and other projects subject to compliance and requirements set forth in the SB 125 program guidelines; and, WHEREAS, as a condition of ongoing disbursements of requested SB 125 funds, RTPA must submit to CalSTA reports documenting activities and progress toward project implementation, expenditures, completion, benefits in accordance with the California Air Resources Board’s Funding Guidelines, data, interest earned, and other project outcomes; and,
WHEREAS, on December 5, 2023, the SLOCOG Board approved programming for the CITY for the PROJECTs and the amounts shown in Table 1 and authorized the Executive Director to submit the program of projects to CalSTA and adjust programming as needed and to return them to the Board for endorsement; and,
WHEREAS, CalSTA has reviewed SLOCOG’s program of projects and determined that the minimum program requirements have been met and has approved funding allocation for the PROJECTs in Table 1.
NOW, THEREFORE, the parties mutually agree as follows:
1. The CITY agrees to administer each PROJECT and conduct the applicable environmental processes required under the California Environmental Quality Act (CEQA) and the National Environmental Policy Act, as applicable, for each PROJECT.
2. The CITY agrees to assume responsibility and accountability for the use and expenditure of funds allocated to the PROJECTS in accordance with the SB 125 guidelines and applicable statutes and must also comply with all relevant federal and state laws, regulations, policies, and procedures, and ensure that GGRF funding is utilized consistent with and required by SB 1018 (2012).
3. The CITY agrees that if a project may impact a street, road or highway owned or controlled by a jurisdiction other than CITY (including without limitation the County, another city, or the State of California), SLOCOG may require the CITY to establish a project development team (PDT) composed of representatives of such jurisdictions and SLOCOG.
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SLOCOG SB 125 Subrecipient Cooperative Agreement page 2
4. The CITY agrees to utilize, for each PROJECT, an amount of TIRCP or ZETCP funds equal to or less than that adopted by SLOCOG, and that SLOCOG's total obligation shall not exceed the amounts shown in Table 1 unless a greater amount has been authorized in advance in writing by SLOCOG.
5. The CITY agrees to account for all costs for the PROJECTS to be paid by SLOCOG pursuant to this Agreement and agrees to perform all the reimbursable work for each project according to the fiscal years identified in Table 1.
6. The CITY agrees to provide SLOCOG with the final cost estimates for each phase of the PROJECTS prior to reimbursement. The following will be assumed and reflected in SLOCOG's SB 125 accounting spreadsheets:
a. If less funding than what was programmed is required for a PROJECT, cost savings will be made available for reprogramming as approved by SLOCOG. b. If more funding than what was programmed is required for a PROJECT, the CITY will be solely responsible for securing the additional funding, which can be comprised of various local, regional, state, or federal funding sources.
7. The CITY may submit an invoice for reimbursement of funds expended for each PROJECT no more than once a month, using the attached Reimbursement Request Form (Exhibit A). All invoices must contain the following:
a. PROJECT number and name
b. A detailed description of work accomplished during the billing period which will be used to provide project status updates to the SLOCOG Board on an annual basis, at minimum. c. A copy of the consultant’s bill to the CITY (if applicable). d. Amount expended by the CITY during the billing period, with evidence of funds expended (e.g. a copy of a CITY check to consultant or accounting documentation, etc.) e. Amount requested for reimbursement by source (TIRCP or ZETCP) for the billing period
8. SLOCOG agrees to reimburse the CITY within 30 days of receipt of a completed reimbursement request form (Exhibit A) with all applicable attachments and signatures an amount expended by the CITY during the invoices' billing period. SLOCOG's total obligation for each PROJECT cost shall not exceed the amount shown in Table 1, unless SLOCOG has in writing authorized a greater amount.
9. Within two months of either the execution of this agreement or each PROJECT’s completion and all work incidental thereto, whichever comes later, the CITY must provide SLOCOG certification in the form provided in Exhibit B hereto, of completion in accordance with the provisions in this Agreement, and a final invoice containing those items listed in section 7a-e. In the event that final project costs are less than those listed on Table 1, hereto, the funds shall be reallocated as approved by SLOCOG.
10. The CITY agrees to document and publicize the TIRCP and ZETCP in proper context when developing press releases and City Council documents, or in hosting public events such as project groundbreakings. References should be made to TIRCP, ZETCP, the California State Transportation Agency as the program sponsor, and the state programs as fund sources, as applicable, in order to ensure transparency regarding the funding of the projects.
11. The CITY agrees to provide SLOCOG with data needed to document and share publicly the program benefits and outcomes of the PROJECTS.
12. The CITY grants to the State of California and/or SLOCOG access to the CITY's books and records for the purpose of verifying that SB 125 funds paid are properly accounted for and the proceeds are expended in accordance with the terms of this Agreement. All documents shall be available for inspection by authorized CalSTA, Caltrans and/or SLOCOG agents at any time during the PROJECT development and for a four-year period from the date of completion, or for one year after the audit is completed or waived by CalSTA, Caltrans and/or SLOCOG, whichever is later.
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SLOCOG SB 125 Subrecipient Cooperative Agreement page 3
13. Upon completion of all work under this Agreement, ownership and title to all materials will automatically be vested in the CITY and no further agreement will be necessary to transfer ownership to the CITY.
14. If existing public and/or private utilities conflict with the PROJECT construction or violate the CITY’s encroachment policy (as applicable), the CITY shall make all necessary arrangements with the owners of such utilities for their protection, relocation or removal. The CITY shall review the plans for protection, relocation or removal. If there are costs of such protection, relocation, or removal which the CITY must legally pay, the CITY shall pay the cost of said protection, relocation or removal, plus cost of engineering, overhead and inspection. If any protection, relocation or removal of utilities is required, such work shall be performed in accordance with CITY policies and procedures.
15. The CITY shall defend, indemnify and save harmless SLOCOG, its officers and employees from all and any claims, demands, damages, costs, expenses, judgments, attorneys’ fees or any liability arising out of this Cooperative Agreement to the performance or attempted performance of the provisions hereof, or any project referred to in the Exhibits hereto. Nothing contained in the foregoing indemnity provision shall be construed to require CITY to indemnify SLOCOG against any responsibility of liability in contravention of Civil Code section 2782.
16. Both the CITY and SLOCOG shall designate a Project Coordinator who shall represent the respective agencies and through whom all communications between the parties to this agreement shall occur.
17. Both parties agree that if, in the course of carrying out the PROJECT, there is a disagreement among the Project Coordinators over the direction of the project, the matter will be forwarded through a three-step conflict resolution process. First, resolution will be attempted between the CITY Manager and SLOCOG Executive Director. If a dispute continues, a determination shall be made by the SLOCOG Executive Committee, and, if required, final determination by the full SLOCOG Board.
18. Nothing in the provisions of this Agreement is intended to create duties, obligations, or rights for third parties not signatories to this Agreement or affect the legal liability of either party of the Agreement by imposing any standard of care with respect to the maintenance of local roads different from the standard of care imposed by law.
19. No alteration or variation of the terms of this Agreement shall be valid unless made in writing and signed by the parties thereto, and no oral understanding or agreement not incorporated herein or in the attached Table 1 shall be binding on any of the parties thereto.
20. This Agreement may be terminated or provisions contained therein may be altered, changed, or amended by mutual consent, in writing, of the parties hereto.
21. Prior to awarding a contract for any PROJECT, SLOCOG may terminate the applicable PROJECT in the Cooperative Agreement by written notice, provided SLOCOG pays the CITY for all PROJECT-related costs reasonably incurred by the CITY prior to termination. Also, prior to awarding a contract for any PROJECT, the CITY may terminate the applicable PROJECT in the Cooperative Agreement by written notice, provided the CITY pays SLOCOG for all costs reasonably incurred by SLOCOG prior to termination.
Docusign Envelope ID: 01B39301-D268-420F-B3A7-A6E1009B4651
SLOCOG SB 125 Subrecipient Cooperative Agreement page 4 SIGNATURES:
CITY OF SAN LUIS OBISPO SAN LUIS OBISPO
COUNCIL OF GOVERNMENTS
By: ________________________________ By: ___________________________________ Erica A. Stewart, Mayor Peter Rodgers, Executive Director Date: _______________ Date: _______________
ATTEST:
By: ____________________________________
Teresa Purrington, City Clerk
APPROVED AS TO FORM AND LEGAL EFFECT:
By: ____________________________________ By: _________________________________ Christine Dietrick, City Attorney Jon Ansolabehere, SLOCOG Counsel Date: _______________ Date: _______________
Docusign Envelope ID: 01B39301-D268-420F-B3A7-A6E1009B4651 1/15/2025 | 3:18 PM PST
1/15/2025 | 4:10 PM PST
1/15/2025 | 4:49 PM PST
1/17/2025 | 2:49 PM PST
SLOCOG SB 125 Subrecipient Cooperative Agreement page 5 TABLE 1
CITY PROJECTS
for
Agreement No. SLO-SB 125-01
SLOCOG# Project Name TIRCP ZETCP FY
City of SLO-1
Six (6) Battery electric
bus procurement $280,000 - 2023/24
City of SLO-2
Battery electric bus
charging
infrastructure
$395,000 - 2023/24
City of SLO-3
Auto Vehicle Locator
system replacement $130,000 - 2024/25
City of SLO-4
On-bus security
camera system
replacement
$750,000 - 2024/25
Total $1,550,000 -
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SLOCOG SB 125 Subrecipient Cooperative Agreement page 6
EXHIBIT A
San Luis Obispo Council of Governments
TIRCP and ZETCP
REIMBURSEMENT REQUEST FORM
Agency Name: Date:
Contact Person:
Project Number(s):
Project Title:
This Invoice Covers Work Completed from: / / to: / /
Project Budget Information: (complete box below - refer to cooperative agreement “Table 1” for budget information)
Total Spent this
Invoice
$
TIRCP ZETCP Other Non-Regional
Spending Total
Reimbursement
by Fund Source
Please send a check for $
Total TIRCP & ZETCP share due this invoice
Attachments: 1) A brief description of work completed; and 2) Consultant invoices
3) Proof of payment (e.g. copy of CITY check to consultant).
Signed:
(Agency Rep.)
Shaded boxes below for SLOCOG Use
Regional Planner Approval Accounting Initials
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SLOCOG SB 125 Subrecipient Cooperative Agreement page 7
EXHIBIT B
PROJECT COMPLETION FORM
for
SB 125 Projects
This form notifies SLOCOG of project completion in accordance with the provisions in the Cooperative Agreement noted below. Our records indicate that the project listed below, funded all or in part with RSTP Exchange funds, has been completed:
Project Name:
Project Number(s):
Cooperative Agreement Date (Recipient Agency):
Approved TIRCP or ZETCP amount(s):
I certify, on behalf of the CITY
name of authorized official
of , that the project named above was completed
name of jurisdiction
on_____________________ in accordance with the provisions set forth in the cooperative approximate date of completion
agreement dated ___________________________. It is my understanding that all savings date jurisdiction representative signed
from a cost underrun will be returned to SLOCOG for reprogramming in accordance with the cooperative agreement.
Signed: Date:
signature of authorized official date signed
Return completed and signed Project Completion Forms within 2 months of the completion of each project to:
SLOCOG
1114 Marsh Street
San Luis Obispo, CA 93401
Attn: (Project Coordinator)
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SLOCOG SB 125 Subrecipient Cooperative Agreement page 8
EXHIBIT C
General Programming Policies
SLOCOG’s 2023 Regional Transportation Plan / Sustainable Communities Strategy identifies an overall goal to develop a multi-modal transportation system which is balanced, coordinated, safe, cost effective, environmentally sound, economically supportive, meeting all the financially reasonable transportation needs of all citizens in San Luis Obispo County. General programming policies affecting the decision making and project selection of the surface transportation system are summarized as follows:
1. SLOCOG will strive to be fair and equitable in the allocation of funding between the various subregions in the county and among member jurisdictions.
2. SLOCOG will adhere to the federal and state statutes, policies, regulations and guidelines applicable to each fund being allocated, and require recipients of grants to do the same.
3. SLOCOG will recommend projects for funding that are:
• Deliverable
• Consistent with the goals, policies, action strategies, and programs of the 2023 Regional Transportation Plan
• Responsive to immediate funding and project needs
• Consistent with specific criteria of a particular funding program • High likelihood of leveraging other funding (state, federal and/or local) • Approved or supported by the applicable governing body
4. SLOCOG will seek to implement all programs in a timely and efficient manner.
5. SLOCOG will seek to maximize the use of the funds for general public benefit, and will marshal other funds, when possible, to complete funded projects by prioritizing joint-funded projects.
6. SLOCOG will integrate social equity factors into the decision-making process by applying the findings generated from the Disadvantaged Communities Assessment.
7. SLOCOG will, to the extent feasible, assure the integration of all projects with jurisdiction, region and statewide transportation plans, providing a comprehensive, systematic approach to resolving transportation problems in the region.
8. SLOCOG will retain maximum flexibility of federal programs under the Infrastructure Investment and Jobs Act (IIJA), where feasible.
9. SLOCOG will retain a continuing commitment to emphasize quality and promote excellence in the development of competitive proposals, seeking to fund the best possible projects in terms of cost effectiveness, public benefit and regional and local significance.
10. SLOCOG may reserve discretionary funds for advance development work to ensure regionally significant projects are well scoped, alternatives assessed, accurate estimates prepared, and a finance plan for implementation is developed.
11. SLOCOG will maintain funding commitments for existing programmed projects if those projects have achieved the project delivery milestones set out at the time of programming.
Unavoidable delays to the project delivery milestones will be considered on a case-by-case basis.
12. SLOCOG may commit a portion of discretionary funding to match and leverage other competitive state-wide or federal grant programs for projects of regional significance.
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SLOCOG SB 125 Subrecipient Cooperative Agreement page 1 San Luis Obispo Council of Governments
Agreement No. SLO-SB 125-01
TRANSIT AND INTERCITY RAIL CAPITAL PROGRAM (TIRCP) AND
ZERO-EMISSION TRANSIT CAPITAL PROGRAM (ZETCP)
SUBRECIPIENT COOPERATIVE AGREEMENT
Amendment No. 1 to Agreement No. SLO-SB 125-01
THIS AGREEMENT, ENTERED INTO ON THE DATE BELOW STATED is between the San Luis Obispo Council of Governments, referred to herein as "SLOCOG", and the CITY OF SAN LUIS OBISPO, a municipal corporation and political subdivision of the State of California, referred to herein as the “CITY”.
RECITALS
WHEREAS, on December 5, 2023, the SLOCOG Board approved programming for the CITY for transit capital projects and authorized the Executive Director to submit the program of projects to CalSTA and adjust programming as needed and to return them to the Board for endorsement; and, WHEREAS, SLOCOG and the CITY are authorized, pursuant to requirements of Assembly Bill 102 (2023) and SB 125 (2023), to enter into a Cooperative Agreement for high-priority transit capital projects consistent with the uses allowed in Cycle 6 of the TIRCP, zero-emission transit vehicles and supporting infrastructure, transit operating expenses that prevent service cuts, and other projects subject to compliance and requirements set forth in the SB 125 program guidelines; and, WHEREAS, SLOCOG and the CITY entered into Agreement No. SLO-SB 125-01 (“Agreement”) on January 17, 2025; and,
WHEREAS, SLOCOG was designated as the project sponsor for use of Transit and Intercity Rail Capital Program (“TIRCP”) funds to implement and support the San Luis Obispo Region Cal-ITP Implementation Project (“Project”); and,
NOW THEREFORE, the parties mutually agree as follows:
1) Table 1 of that Agreement No. SLO-SB 125-01 is hereby amended by adding project “City of SLO5” (Cal-ITP Implementation Project – SLO Transit), with programming amounts of $271,000 for the Project as identified in Exhibit 1 (attached hereto and incorporated herein by this reference). 2) That SLOCOG, as grantor of these funds, be recognized in all promotions of the Project in the Amendment. CITY shall include the recognition of SLOCOG in all project branding, signage, press releases, and other marketing materials related to the Project. 3) That all other terms and conditions of the original Agreement No. SLO-SB 125-01 shall remain in full force and effect unless otherwise amended per agreement.
SLOCOG SB 125 Subrecipient Cooperative Agreement page 2 SIGNATURES:
CITY OF SAN LUIS OBISPO SAN LUIS OBISPO
COUNCIL OF GOVERNMENTS
By: ________________________________ By: ___________________________________ Erica A. Stewart, Mayor Peter Rodgers, Executive Director Date: _______________ Date: _______________
ATTEST:
By: ____________________________________
Teresa Purrington, City Clerk
APPROVED AS TO FORM AND LEGAL EFFECT:
By: ____________________________________ By: _________________________________ Christine Dietrick, City Attorney Jenna Morton, SLOCOG Counsel Date: _______________ Date: _______________
SLOCOG SB 125 Subrecipient Cooperative Agreement page 3 EXHIBIT 1
CITY PROJECTS
for
Amendment No. 1 Agreement No. SLO-SB 125-01
SLOCOG# Project Name TIRCP ZETCP FY
City of SLO-5
Cal-ITP
Implementation
Project – SLO Transit
$271,000 - 2024/25
R ______
RESOLUTION NO. _____ (2025 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING AGREEMENTS FOR SAN LUIS
OBISPO (SLO) TRANSIT’S OPEN-LOOP PAYMENT SYSTEM PROJECT WHEREAS, in 2019, the California Integrated Travel Project (Cal-ITP) was launched by the California State Transportation Agency (CalSTA) and the California Department of Transportation (Caltrans); and
WHEREAS, Cal-ITP is a statewide initiative designed to make public transportation more accessible, efficient, and user-friendly by integrating payment systems, data standards, and real-time travel information across agencies; and WHEREAS, Cal-ITP offers multiple statewide contracts for the hardware and software needed to implement an open-loop payment system at pre-negotiated rates; and WHEREAS, on December 6, 2023, San Luis Obispo Council of Government’s (SLOCOG) board approved submittal of the Senate Bill (SB) 125 allocation package to the CalSTA which included funding for the implementation of a regionwide Cal-ITP openloop payment system project; and WHEREAS, under San Luis Obispo Municipal Code §3.24.060, bid procedures may be waived and procurement obtained from a single vendor when the purchase will be made cooperatively with one or more other units of government; and WHEREAS, on January 14, 2025, the City Council adopted Resolution No. 11538 (2025 Series) authorizing the execution of a cooperative agreement with SLOCOG for SB 125 funds and the appropriation of funds to associated capital projects; and WHEREAS, the SB 125 cooperative agreement with SLOCOG must be amended to include the open-loop payment system project for the City to seek reimbursement from SLOCOG for project related costs incurred by the City; and WHEREAS, in August 2024, SLOCOG held a kick-off meeting with a working group consisting of representatives from the City, RTA, Morro Bay Transit, and Cal-ITP to develop and release a scope of work, review vendor proposals, and discuss integrations with existing systems; and
WHEREAS, based on the information provided in the vendors’ proposals, responses to follow-up questions, and discussions with peer agencies; the working group selected Kuba, Inc. as the preferred vendor for the payment acceptance devices, Littlepay, Inc. as the preferred vendor for the transit processing software, and Elavon, Inc. as the preferred vendor for merchant processing services; and
Resolution No. _____ (2025 Series) Page 2
R ______
WHEREAS, the City contracts with Token Transit, Inc. for digital pass and fare services via mobile application whereby SLO Transit riders can pay for digital pass and fare and then verify them on the bus; and
WHEREAS, the City wishes to integrate digital pass and fare verification between Token Transit, Inc. and the payment acceptance devices offered by Kuba, Inc. to allow for continued use of digital passes and fares by SLO Transit riders; and WHEREAS, at a regularly scheduled meeting on May 20, 2025, the City Council considered recommendations by staff to approve execution of agreements necessary to implement the open-loop payment system project.
NOW, THEREFORE, BE IT RESOLVED that the Council of the City of San Luis Obispo does hereby approve sole source agreements for the implementation of an openloop payment system project as follows:
SECTION 1. Environmental Review. The California Environmental Quality Act (CEQA) does not apply to the recommended actions in this report, because the action does not constitute a “Project” under CEQA Guidelines Section 15378.
SECTION 2. Approval. The City Council of the City of San Luis Obispo does hereby approve the following:
1. Execution of an agreement with Kuba, Inc. for procurement, installation, and warranty of payment acceptance devices; and
2. Execution of an agreement with Kuba, Inc. for ongoing support services for payment acceptance devices; and
3. Execution of an agreement with Littlepay, Inc. for transit processor services; and
4. Execution of an agreement with Token Transit, Inc. for integration and ongoing support of digital pass and fare purchases; and
5. Authorize the Finance Director to negotiate and execute an agreement with Elavon, Inc. for merchant processing services as part of the system configuration process.
Upon motion of Council Member ___________, seconded by Council Member ___________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this 20th day of May 2025.
Resolution No. _____ (2025 Series) Page 3
R ______
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington
City Clerk
USER AGREEMENT
1. This User Agreement is entered into between The City of San Luis Obispo “Contracting Agency” and Kuba Inc. “Contractor”. This User Agreement expressly incorporates the California Master Service Agreement (MSA) No. 5‐21‐70‐28-02 which is incorporated herein. This User Agreement contract form serves as an appropriate equivalent to the STD 213 as required by the MSA.
Contracting Agency: The City of San Luis Obispo
Contractor Name: Kuba Inc.
2. The Term of this Agreement is:
Start Date: [ENTER DATE EXPECTED TO SIGN]
Through End Date: 02/28/2027 with the ability to extend at the discretion of the State of California’s Department of General Services
3. The maximum amount of this Agreement is:
See Exhibit B for pricing on capital costs only, operating expenses are documented in a separate agreement.
4. Exhibits. The parties agree to comply with the terms and conditions of the following exhibits, which are by this reference made a part of this agreement.
Exhibits Title Pages
Exhibit A San Luis Obispo (SLO) Transit’s Scope of Work 6 Exhibit B Payment Provisions 2
MSA 5-21-70-
28-02
MSA 5-21-70-28-02 is hereby incorporated by reference. The MSA is available at:
https://caleprocure.ca.gov/PSRelay/ZZ_PO.ZZ_CTR_SUP_CMP.GBL? Page=ZZ_CTR_SUP_PG&Action=U&SETID=STATE&CNTRCT_ID=5-
21-70-28-02
In Witness Whereof, This Agreement has been executed by the parties hereto.
Contractor:
___________________________________________ Date:________________________ Kuba Inc.
PO Box 31804
Las Vegas, NV 89173-31804
Brian Frank, General Manager: Kuba North America Transit Contracting Agency Name:
___________________________________________ Date:________________________ City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Whitney McDonald, City Manager
EXHIBIT A
Scope of Work
1. Incorporate MSA by Reference
MSA 5-21-70-28-02 and its amendments is hereby incorporated by reference as if attached hereto.
2. Description
Three transit operators in the region will lead the project with support from the San Luis Obispo Council of Governments (SLOCOG). In 2024, the region was awarded SB125 funds to collaboratively deploy contactless payment technology across the region’s operators. The goal is to select matching vendors across each transit provider.
The three transit operators that serve the SLOCOG region, and are part of this award, include San Luis Obispo Regional Transit Authority (RTA), Morro Bay Transit (MBT), and San Luis Obispo (SLO) Transit. A brief description of each transit provider follows:
RTA
The RTA was created in 1989 as a Joint Powers Authority to provide management of regional fixed-route public transportation services, as well as regional paratransit services. In 2001, the paratransit service, called RTA Runabout, began providing complementary ADA service for all five fixed-route providers operating in the region. The mission of the RTA is to provide safe, reliable and efficient transportation services that improve and enhance the quality of life for the citizens and visitors of San Luis Obispo County. The County is located on the beautiful Central Coast of California, halfway between Los Angeles and San Francisco. The current population of the county is 284,010, including that of three small, urbanized areas (UZAs): San Luis Obispo designated in 1990; El Paso de Robles-Atascadero in 2000; and Arroyo Grande-Grover Beach in 2010. The RTA coordinates regional services with local fixed-route providers in each UZA in the County, as well as within the Santa Maria UZA (population 130,000) in nearby northern Santa Barbara County.
The RTA directly operates hourly service on four regional fixed-routes and ADA paratransit services primarily along the US-101 and SR-1 corridors, as well as express commuter services during peak travel periods.
Three out of the four regional fixed routes converge on downtown San Luis Obispo, 7 days a week. The RTA regional fixed-route service has a peak pull-out of 15 buses, and provides almost 500,000 passenger-trips annually, while weekday productivity ranges from 4 to 23 boardings/hour. The RTA also operates communitybased services funded by SLO County in small rural areas and is funded by the City of Paso Robles to operate its local fixed-route and a local Dial-A-Ride programs. Finally, as of January 2021, the RTA also directly operates SoCo Transit – the eight-bus local fixed-route service operated in the Beach Communities of the Five Cities Area. These services provided over 300,000 additional fixed route trips with productivity in line with what is seen on the RTA regional fixed routes. Fixed route fare revenue is approximately $1 million per year and is expected to increase as ridership increases.
MBT
The City of Morro Bay is located on the central coast of California approximately halfway between San Francisco and Los Angeles. The City has a population of 10,531. In 1977, the City began operating a year round general public Dial-A-Ride service. The Dial-a-Ride service was replaced in October 2010 with a deviated fixed route system after recession-related reductions in State funding necessitated adaptations in how the service was provided. The deviated fixed route service operates within the City limits from 6:10 a.m. to 6:45 p.m., Monday through Friday. Service provided is on one fixed route loop throughout the City limits and deviates off route, using one bus, to pick up/drop off riders who have previously scheduled curb-to-curb trips (Call-A-Ride trips). These deviated trips are arranged the day prior to the needed curb-to-curb service; however, same day trips are also accommodated if they do not cause the fixed route to become behind schedule. Morro Bay Transit is closed on weekends and all City observed holidays.
Additionally, in 1994, the City began operating a seasonal trolley fixed route service. Over time, trolley service expanded first to two, then to three routes that came from recommendations from a parking management
plan study and Short-Range Transit Plan update. Service provided is on two fixed route loops throughout the City limits. Trolley service operates weekends only from the first weekend in June to the first weekend in October. Service begins at 10:00 a.m. each operating day and ends at 5:00 p.m. on Saturdays and Sundays.
Both the deviated fixed route and Trolley services are currently contracted out to a third party provider, however, in September 2024, the City Council approved the consolidation of MBT into the RTA system. RTA will start operating MBT June 1, 2025.
During the pandemic, service levels changed for the Trolley with cuts in the number of service routes and days operated, and for the deviated fixed route, Saturday service was stopped. Currently, the trolley routes see an average daily ridership of 110 riders per day and the deviated fixed route service sees an average daily ridership of 47 riders per day.
Ridership is split between cash fares (39%), punch passes (12%), Regional Passes (35%), Runabout rides paid through a reimbursement agreement with the RTA (4%), and free Gold pass rides (10%). MBT and Trolley fare collection is processed 100% manually by the drivers. Ridership demographics span all types of the population from child, adult, senior, those with disabilities, students K-12, college students, visitor service workers, working professionals, and visitors. Revenue from cash fares totaled $9,882.75 and revenues from the Regional Pass and Runabout fare reimbursement program totaled $5,579.17 for FY 23/24.
MBT service provides a connection to the RTA system at City Park as well as connections to the City’s seasonal Trolley service at Centennial Stairway and along north Main Street. MBT’s Trolley service links the Downtown Business District, Waterfront, State Parks in the north and south ends of the community, and the Museum of Natural History. In addition, the service provides a connection to the RTA system at City Park upon request. The connection provided by both services is an important link with the RTA system to the other communities in San Luis Obispo County, and connections to a major community college (Cuesta College), state university (California Polytechnic State University - SLO), the County seat in San Luis Obispo, as well as many links to coastal recreational venues and access to service jobs at destinations around the coast such as Hearst Castle.
MBT services may be consolidated to RTA in mid-2025. Vendors, please assume that any information in this Scope specific to MBT will remain unchanged regardless of said decision. The operators shall inform vendors if a consolidation is confirmed.
SLO Transit
San Luis Obispo (SLO) Transit was established in 1974 by the City of San Luis Obispo (City) and provides the local fixed-route public transit system for the City. The City is located along the Central Coast region of California, halfway between San Francisco and Los Angeles. The City has a population of 47,063 with an estimated additional population of 21,600 students when California Polytechnic State University (Cal Poly) is in session.
SLO Transit contracts for the operation of eight fixed routes, in a hub-and-spoke model, within the 23 square miles of the City limits and on Cal Poly’s campus. SLO Transit also operates three tripper services, an express service between the university and downtown, and a trolley on Thursday nights in support of a local farmer’s market. Fixed-route services operate Monday through Friday approximately from 6 am to 11 pm and Saturday and Sunday from 8 am to 8 pm during the academic year.
SLO Transit ridership demographics reflect a broad cross section of the population. While the majority of trips are campus-related (roughly 60%), SLO Transit also serves seniors, persons with disabilities, K-12 students, working professionals, visitors, and other choice riders. College students, staff, and faculty’s fares are paid for by a transit service agreement between the City and the university. Revenue from cash fares exceeded $250,000 last fiscal year. Over 575,000 passenger‐trips were provided in 2024 including riders covered by transit service agreements. The number of passenger-trips and fare revenue continues to increase each year as services are expanded.
3. Regional Expectations
Although each agency shall retain autonomy, work, and contract directly with vendors, there are region-level needs to note:
RTA shall contract on behalf of MBT and their services The Category A vendor shall provide a single integration to Token Transit, who currently provides regional passes
The Category B vendor shall enable regional capping – a regional day-pass ($5.50) and a regional 31-day pass ($68) across all fixed-route services
While the scope of work submitted to vendors aims for a regional collaboration, sections of this scope of work hereafter pertain to SLO Transit only.
4. Determining internal responsibilities for the project Vendors should coordinate directly with the following contact during the course of the project.
Alex Fuchs
Mobility Services Business Manager
[email protected]
5. Fare Structure and Business Rules
SLO Transit’s base fare structure shall at a minimum include the following:
SLO Transit
Fixed-Route
One-way $1.50
Transfers Free across SLO Transit, up to an hour
Daily Cap $3.25
Weekly Cap
Monthly Cap $40
Regional Daily Cap $5.50
Regional Monthly Cap $68
Existing discounts (seniors, persons with disabilities, etc.) will continue to be offered on the legacy systems.
When such capability is available to offer those discounts on the contactless payment system, the SLO Transit may request that the Category B provider integrate with the resulting Eligibility Verification system to do so.
6. On-board Technologies
SLO Transit’s fleet consists of 18 fixed route vehicles ranging from a 28-foot cutaway bus to a 40-foot double decker bus:
● 14 Gillig vehicles that are 30, 35, and 40 feet
● 1 electric 35-foot New Flyer vehicle
● 1 electric 35-foot Proterra vehicle
● 1 28-foot El Dorado cutaway vehicle
● 1 40-foot Alexander Dennis double-decker bus
Six new battery electric buses are expected to arrive in fall 2025 and another two in summer 2026 which will replace older diesel-powered buses.
Vehicles are currently leveraging Peak Transit for CAD-AVL services and are connected to the Verizon network via SIM cards.
The City of San Luis Obispo uses Chase Bank’s Paymentech for merchant processing but shall leverage California’s EPAY agreements to contract with an acquirer for this project.
7. Items Specific to Category A (PADs)
SLO Transit shall have PADs installed near the front door of each vehicle and will be wired to the bus battery, barring vendor inspection of vehicles. The following hardware quantities are to be installed, the Category A vendor shall provide a delivery timeframe.
PADs to be installed 18
Spare PADs 5
Total 23
Value-add Requests
The Category A vendor shall complete the installation of PADs and will provide an extended warranty on all PADs purchased. All devices shall be equipped with hardware to read barcode/QR codes.
7.1 Determining whether any changes are needed to default Category A service level agreements (SLAs) in the User Agreement
SLO Transit accepts the default SLAs.
8. Items Specific to Category B (Transit Processor Services) SLO Transit shall select a single Category B vendor to process transactions made on the PADs. Please refer to sections 1-6 above for applicable business rules and technologies. The transit operators accept the vendor’s customer support channels for both riders and agency personnel.
SLO Transit requires access to a data dashboard to view transaction data. Raw (CSV) format is acceptable.
At a minimum, reports shall include but not be limited to:
● Revenue report (including the number of transactions and total transaction amounts) ● Operations report (including the total revenue per route per day, the number of boardings per route per stop per hour per day, and any other metrics as agreed between the Transit Agency and Transit Processor)
● KPI report (documenting all service levels in relation to the KPIs) ● Number of new customers and returning customers
● Bad debt and debt recovery reports
● Dispute and chargeback reports
● Ridership by pass per route (for example, for a pass how many trips during the month on MBT, RTA (by each route operated by RTA), and SLO Transit Value-add Requests
SLO Transit does not request any value-add services at this time.
8.1 Determining whether any changes are needed to default Category B service level agreements (SLAs) in the User Agreement
Not offered.
EXHIBIT B
PAYMENT PROVISIONS
1. RATES
The not-to-exceed pricing for MSA products and services to be provided to Transit Agencies are listed in Exhibit B.1 - Rate Sheet. All prices and fees shall be fixed for the entire MSA term including any optional extension periods unless the State approves a price adjustment in accordance with Section 6, Rate Adjustments.
A. Payment Acceptance Devices - Category A
For Category A Products and Services (related to capital expenses only), rates are determined for San Luis Obispo Transit are as follows:
Description Unit of
measure
Rate Qty Months Total
Stand Alone Devices -
ABT 3000 Unit $994.87 23 $22,882.01
Stand Alone Devices -
ABT 3000 (spares) Unit $994.87 5 $4,974.35
Mounting Poles Unit $105.33 23 $2,422.59
Installation of PAD Unit $562.50 23 $12,937.50
Implementation Service Once-off $7,500 1 $7,500.00
Integration with Transit
Processor Once-off $9,440.00 0 $0.00
EMV Level 3 Certification Once-off $3,146.67 0 $0.00
Integration with 2D Bar
Code Processor Once-off $9,440.00 0 $0.00
Custom development:
Barcode reader ($195 per
device)
Hourly $137.50 39.71 $5,460.00
Custom development:
Token Transit integration
implementation
Hourly $137.50 21.82 $3,000.00
2. TRANSIT PROCESSING SERVICES RATE DETERMINATION AND PUBLICATION (Category B Only) (Not Applicable)
3. TRAVEL
Transit Agencies may allow additional travel reimbursement as permitted, which must be itemized separately on the invoice. The Contractor must have prior approval by the Transit Agency for any additional travel reimbursement.
4. INVOICES
A. Submission of Invoices
1) The Contractor shall submit itemized invoices to the Transit Agency contact person at the address contained in the Transit Agency’s User Agreement. The information is mandatory information to be provided for all invoices:
a) DGS MSA Number
b) Transit Agency Contract Number
c) Transit Agency Order Number
d) Transit Agency Billing Code
e) Transit Agency Name
f) Transit Agency Address
g) Description of services ordered
h) Pricing information, specified by Tier or Breakpoint where applicable 2) The Transit Agency contact person will verify and approve, or disapprove, the invoiced items. If the Transit Agency does not approve the invoiced items, the invoice will be disputed and returned to the Contractor for correction.
5. PAYMENT
Payment for services performed under this Contract will be made upon satisfactory completion of services rendered. The Contractor shall invoice Transit Agencies in arrears upon successful completion of services. Invoices for services are not due and payable, and do not constitute an obligation of the Transit Agency, until the month following the month for which charges are accrued.
The payment terms for the Capital Expenditures portion of the products and services delivered under this Contract will be paid in the percentage amounts noted below:
● 40% on Notice to proceed
● 40% on delivery
● 20% on acceptance.
The costs for the required T-clamps, plates and onsite survey are not included in the pricing table in Section 1 of this Exhibit B. Contractor shall invoice the Transit Agency for any costs related to these items separately.
Payment shall be made within 45 days in accordance with, and within the time specified in Government Code Chapter 4.5, commencing with Section 927 unless agreed otherwise in the User Agreement.
6. RATE ADJUSTMENTS
Contractor may request Consumer Price Index (CPI) rate increases for services should the State decide to execute the options to extend. Rate increases may be requested no more than once annually and may only be requested following the initial five (5) year term of the Agreement. Rate increases shall be capped at three percent (3%) for a given year and may only be requested when the CPI for the "Public Transportation" goods and services category, as published by the U.S. Department of Labor, Bureau of Labor Statistics has increased one percent (1%) or greater for the previous calendar year. The website, subject to change without amendment to this Agreement, can be found at the CPI Index (https://www.bts.gov/components-consumer-price-index-transportation).
The Contractor shall submit a written request to the DGS Contract Administrator, provide a copy of the index and other supporting documentation necessary to support the adjustment. Rates will be fixed for twelve (12) months following an approved price adjustment. Adjustments shall not be retroactive.
USER AGREEMENT
1. This User Agreement is entered into between The City of San Luis Obispo “Contracting Agency” and Kuba Inc. “Contractor”. This User Agreement expressly incorporates the California Master Service Agreement (MSA) No. 5‐21‐70‐28-02 which is incorporated herein. This User Agreement contract form serves as an appropriate equivalent to the STD 213 as required by the MSA.
Contracting Agency: The City of San Luis Obispo
Contractor Name: Kuba Inc.
2. The Term of this Agreement is:
Start Date: [ENTER DATE EXPECTED TO SIGN]
Through End Date: 02/28/2027 with the ability to extend at the discretion of the State of California’s Department of General Services
3. The maximum amount of this Agreement is:
See Exhibit B for pricing on operating costs only, capital expenses are documented in a separate agreement.
4. Exhibits. The parties agree to comply with the terms and conditions of the following exhibits, which are by this reference made a part of this agreement.
Exhibits Title Pages
Exhibit A San Luis Obispo (SLO) Transit’s Scope of Work 6 Exhibit B Payment Provisions 2
MSA 5-21-70-
28-02
MSA 5-21-70-28-02 is hereby incorporated by reference. The MSA is available at:
https://caleprocure.ca.gov/PSRelay/ZZ_PO.ZZ_CTR_SUP_CMP.GBL? Page=ZZ_CTR_SUP_PG&Action=U&SETID=STATE&CNTRCT_ID=5-
21-70-28-02
In Witness Whereof, This Agreement has been executed by the parties hereto.
Contractor:
___________________________________________ Date:________________________ Kuba Inc.
PO Box 31804
Las Vegas, NV 89173-31804
Brian Frank, General Manager: Kuba North America Transit Contracting Agency Name:
___________________________________________ Date:________________________ City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Whitney McDonald, City Manager
EXHIBIT A
Scope of Work
1. Incorporate MSA by Reference
MSA 5-21-70-28-02 and its amendments is hereby incorporated by reference as if attached hereto.
2. Description
Three transit operators in the region will lead the project with support from the San Luis Obispo Council of Governments (SLOCOG). In 2024, the region was awarded SB125 funds to collaboratively deploy contactless payment technology across the region’s operators. The goal is to select matching vendors across each transit provider.
The three transit operators that serve the SLOCOG region, and are part of this award, include San Luis Obispo Regional Transit Authority (RTA), Morro Bay Transit (MBT), and San Luis Obispo (SLO) Transit. A brief description of each transit provider follows:
RTA
The RTA was created in 1989 as a Joint Powers Authority to provide management of regional fixed-route public transportation services, as well as regional paratransit services. In 2001, the paratransit service, called RTA Runabout, began providing complementary ADA service for all five fixed-route providers operating in the region. The mission of the RTA is to provide safe, reliable and efficient transportation services that improve and enhance the quality of life for the citizens and visitors of San Luis Obispo County. The County is located on the beautiful Central Coast of California, halfway between Los Angeles and San Francisco. The current population of the county is 284,010, including that of three small, urbanized areas (UZAs): San Luis Obispo designated in 1990; El Paso de Robles-Atascadero in 2000; and Arroyo Grande-Grover Beach in 2010. The RTA coordinates regional services with local fixed-route providers in each UZA in the County, as well as within the Santa Maria UZA (population 130,000) in nearby northern Santa Barbara County.
The RTA directly operates hourly service on four regional fixed-routes and ADA paratransit services primarily along the US-101 and SR-1 corridors, as well as express commuter services during peak travel periods.
Three out of the four regional fixed routes converge on downtown San Luis Obispo, 7 days a week. The RTA regional fixed-route service has a peak pull-out of 15 buses, and provides almost 500,000 passenger-trips annually, while weekday productivity ranges from 4 to 23 boardings/hour. The RTA also operates communitybased services funded by SLO County in small rural areas and is funded by the City of Paso Robles to operate its local fixed-route and a local Dial-A-Ride programs. Finally, as of January 2021, the RTA also directly operates SoCo Transit – the eight-bus local fixed-route service operated in the Beach Communities of the Five Cities Area. These services provided over 300,000 additional fixed route trips with productivity in line with what is seen on the RTA regional fixed routes. Fixed route fare revenue is approximately $1 million per year and is expected to increase as ridership increases.
MBT
The City of Morro Bay is located on the central coast of California approximately halfway between San Francisco and Los Angeles. The City has a population of 10,531. In 1977, the City began operating a year round general public Dial-A-Ride service. The Dial-a-Ride service was replaced in October 2010 with a deviated fixed route system after recession-related reductions in State funding necessitated adaptations in how the service was provided. The deviated fixed route service operates within the City limits from 6:10 a.m. to 6:45 p.m., Monday through Friday. Service provided is on one fixed route loop throughout the City limits and deviates off route, using one bus, to pick up/drop off riders who have previously scheduled curb-to-curb trips (Call-A-Ride trips). These deviated trips are arranged the day prior to the needed curb-to-curb service; however, same day trips are also accommodated if they do not cause the fixed route to become behind schedule. Morro Bay Transit is closed on weekends and all City observed holidays.
Additionally, in 1994, the City began operating a seasonal trolley fixed route service. Over time, trolley service expanded first to two, then to three routes that came from recommendations from a parking management
plan study and Short-Range Transit Plan update. Service provided is on two fixed route loops throughout the City limits. Trolley service operates weekends only from the first weekend in June to the first weekend in October. Service begins at 10:00 a.m. each operating day and ends at 5:00 p.m. on Saturdays and Sundays.
Both the deviated fixed route and Trolley services are currently contracted out to a third party provider, however, in September 2024, the City Council approved the consolidation of MBT into the RTA system. RTA will start operating MBT June 1, 2025.
During the pandemic, service levels changed for the Trolley with cuts in the number of service routes and days operated, and for the deviated fixed route, Saturday service was stopped. Currently, the trolley routes see an average daily ridership of 110 riders per day and the deviated fixed route service sees an average daily ridership of 47 riders per day.
Ridership is split between cash fares (39%), punch passes (12%), Regional Passes (35%), Runabout rides paid through a reimbursement agreement with the RTA (4%), and free Gold pass rides (10%). MBT and Trolley fare collection is processed 100% manually by the drivers. Ridership demographics span all types of the population from child, adult, senior, those with disabilities, students K-12, college students, visitor service workers, working professionals, and visitors. Revenue from cash fares totaled $9,882.75 and revenues from the Regional Pass and Runabout fare reimbursement program totaled $5,579.17 for FY 23/24.
MBT service provides a connection to the RTA system at City Park as well as connections to the City’s seasonal Trolley service at Centennial Stairway and along north Main Street. MBT’s Trolley service links the Downtown Business District, Waterfront, State Parks in the north and south ends of the community, and the Museum of Natural History. In addition, the service provides a connection to the RTA system at City Park upon request. The connection provided by both services is an important link with the RTA system to the other communities in San Luis Obispo County, and connections to a major community college (Cuesta College), state university (California Polytechnic State University - SLO), the County seat in San Luis Obispo, as well as many links to coastal recreational venues and access to service jobs at destinations around the coast such as Hearst Castle.
MBT services may be consolidated to RTA in mid-2025. Vendors, please assume that any information in this Scope specific to MBT will remain unchanged regardless of said decision. The operators shall inform vendors if a consolidation is confirmed.
SLO Transit
San Luis Obispo (SLO) Transit was established in 1974 by the City of San Luis Obispo (City) and provides the local fixed-route public transit system for the City. The City is located along the Central Coast region of California, halfway between San Francisco and Los Angeles. The City has a population of 47,063 with an estimated additional population of 21,600 students when California Polytechnic State University (Cal Poly) is in session.
SLO Transit contracts for the operation of eight fixed routes, in a hub-and-spoke model, within the 23 square miles of the City limits and on Cal Poly’s campus. SLO Transit also operates three tripper services, an express service between the university and downtown, and a trolley on Thursday nights in support of a local farmer’s market. Fixed-route services operate Monday through Friday approximately from 6 am to 11 pm and Saturday and Sunday from 8 am to 8 pm during the academic year.
SLO Transit ridership demographics reflect a broad cross section of the population. While the majority of trips are campus-related (roughly 60%), SLO Transit also serves seniors, persons with disabilities, K-12 students, working professionals, visitors, and other choice riders. College students, staff, and faculty’s fares are paid for by a transit service agreement between the City and the university. Revenue from cash fares exceeded $250,000 last fiscal year. Over 575,000 passenger‐trips were provided in 2024 including riders covered by transit service agreements. The number of passenger-trips and fare revenue continues to increase each year as services are expanded.
3. Regional Expectations
Although each agency shall retain autonomy, work, and contract directly with vendors, there are region-level needs to note:
RTA shall contract on behalf of MBT and their services The Category A vendor shall provide a single integration to Token Transit, who currently provides regional passes
The Category B vendor shall enable regional capping – a regional day-pass ($5.50) and a regional 31-day pass ($68) across all fixed-route services
While the scope of work submitted to vendors aims for a regional collaboration, sections of this scope of work hereafter pertain to SLO Transit only.
4. Determining internal responsibilities for the project Vendors should coordinate directly with the following contact during the course of the project.
Alex Fuchs
Mobility Services Business Manager
[email protected]
5. Fare Structure and Business Rules
SLO Transit’s base fare structure shall at a minimum include the following:
SLO Transit
Fixed-Route
One-way $1.50
Transfers Free across SLO Transit, up to an hour
Daily Cap $3.25
Weekly Cap
Monthly Cap $40
Regional Daily Cap $5.50
Regional Monthly Cap $68
Existing discounts (seniors, persons with disabilities, etc.) will continue to be offered on the legacy systems.
When such capability is available to offer those discounts on the contactless payment system, the SLO Transit may request that the Category B provider integrate with the resulting Eligibility Verification system to do so.
6. On-board Technologies
SLO Transit’s fleet consists of 18 fixed route vehicles ranging from a 28-foot cutaway bus to a 40-foot double decker bus:
● 14 Gillig vehicles that are 30, 35, and 40 feet
● 1 electric 35-foot New Flyer vehicle
● 1 electric 35-foot Proterra vehicle
● 1 28-foot El Dorado cutaway vehicle
● 1 40-foot Alexander Dennis double-decker bus
Six new battery electric buses are expected to arrive in fall 2025 and another two in summer 2026 which will replace older diesel-powered buses.
Vehicles are currently leveraging Peak Transit for CAD-AVL services and are connected to the Verizon network via SIM cards.
The City of San Luis Obispo uses Chase Bank’s Paymentech for merchant processing but shall leverage California’s EPAY agreements to contract with an acquirer for this project.
7. Items Specific to Category A (PADs)
SLO Transit shall have PADs installed near the front door of each vehicle and will be wired to the bus battery, barring vendor inspection of vehicles. The following hardware quantities are to be installed, the Category A vendor shall provide a delivery timeframe.
PADs to be installed 18
Spare PADs 5
Total 23
Value-add Requests
The Category A vendor shall complete the installation of PADs and will provide an extended warranty on all PADs purchased. All devices shall be equipped with hardware to read barcode/QR codes.
7.1 Determining whether any changes are needed to default Category A service level agreements (SLAs) in the User Agreement
SLO Transit accepts the default SLAs.
8. Items Specific to Category B (Transit Processor Services) SLO Transit shall select a single Category B vendor to process transactions made on the PADs. Please refer to sections 1-6 above for applicable business rules and technologies. The transit operators accept the vendor’s customer support channels for both riders and agency personnel.
SLO Transit requires access to a data dashboard to view transaction data. Raw (CSV) format is acceptable.
At a minimum, reports shall include but not be limited to:
● Revenue report (including the number of transactions and total transaction amounts) ● Operations report (including the total revenue per route per day, the number of boardings per route per stop per hour per day, and any other metrics as agreed between the Transit Agency and Transit Processor)
● KPI report (documenting all service levels in relation to the KPIs) ● Number of new customers and returning customers
● Bad debt and debt recovery reports
● Dispute and chargeback reports
● Ridership by pass per route (for example, for a pass how many trips during the month on MBT, RTA (by each route operated by RTA), and SLO Transit Value-add Requests
SLO Transit does not request any value-add services at this time.
8.1 Determining whether any changes are needed to default Category B service level agreements (SLAs) in the User Agreement
Not offered.
EXHIBIT B
PAYMENT PROVISIONS
1. RATES
The not-to-exceed pricing for MSA products and services to be provided to Transit Agencies are listed in Exhibit B.1 - Rate Sheet. All prices and fees shall be fixed for the entire MSA term including any optional extension periods unless the State approves a price adjustment in accordance with Section 6, Rate Adjustments.
A. Payment Acceptance Devices - Category A
For Category A Products and Services (related to operating expenses only), rates are determined for San Luis Obispo Transit are as follows:
Description Unit of
measure
Rate Qty Months Total
Operations Expenses Per device
per month $39.50 23 60 $54,510.00
Extended Warranty
(beginning in year 2)
Per device
per month $7.38 28 48 $9,918.72
Custom development:
Token Transit integration
annual support ($2,000
per year for 5 years)
Hourly $137.5 72.73 $10,000.00
2. TRANSIT PROCESSING SERVICES RATE DETERMINATION AND PUBLICATION (Category B Only) (Not Applicable)
3. TRAVEL
Transit Agencies may allow additional travel reimbursement as permitted, which must be itemized separately on the invoice. The Contractor must have prior approval by the Transit Agency for any additional travel reimbursement.
4. INVOICES
A. Submission of Invoices
1) The Contractor shall submit itemized invoices to the Transit Agency contact person at the address contained in the Transit Agency’s User Agreement. The information is mandatory information to be provided for all invoices:
a) DGS MSA Number
b) Transit Agency Contract Number
c) Transit Agency Order Number
d) Transit Agency Billing Code
e) Transit Agency Name
f) Transit Agency Address
g) Description of services ordered
h) Pricing information, specified by Tier or Breakpoint where applicable 2) The Transit Agency contact person will verify and approve, or disapprove, the invoiced items. If the Transit Agency does not approve the invoiced items, the invoice will be disputed and returned to the Contractor for correction.
5. PAYMENT
Payment for services performed under this Contract will be made upon satisfactory completion of services rendered. The Contractor shall invoice Transit Agencies in arrears upon successful completion of services. Invoices for services are not due and payable, and do not constitute an obligation of the Transit Agency, until the month following the month for which charges are accrued.
The payment terms for the Capital Expenditures portion of the products and services delivered under this Contract will be paid in the percentage amounts noted below:
● 40% on Notice to proceed
● 40% on delivery
● 20% on acceptance.
The costs for the required T-clamps, plates and onsite survey are not included in the pricing table in Section 1 of this Exhibit B. Contractor shall invoice the Transit Agency for any costs related to these items separately.
Payment shall be made within 45 days in accordance with, and within the time specified in Government Code Chapter 4.5, commencing with Section 927 unless agreed otherwise in the User Agreement.
6. RATE ADJUSTMENTS
Contractor may request Consumer Price Index (CPI) rate increases for services should the State decide to execute the options to extend. Rate increases may be requested no more than once annually and may only be requested following the initial five (5) year term of the Agreement. Rate increases shall be capped at three percent (3%) for a given year and may only be requested when the CPI for the "Public Transportation" goods and services category, as published by the U.S. Department of Labor, Bureau of Labor Statistics has increased one percent (1%) or greater for the previous calendar year. The website, subject to change without amendment to this Agreement, can be found at the CPI Index (https://www.bts.gov/components-consumer-price-index-transportation).
The Contractor shall submit a written request to the DGS Contract Administrator, provide a copy of the index and other supporting documentation necessary to support the adjustment. Rates will be fixed for twelve (12) months following an approved price adjustment. Adjustments shall not be retroactive.
1 USER AGREEMENT
1. This User Agreement is entered into between The City of San Luis Obispo (“Contracting Agency”) and LITTLEPAY, INC. (“Contractor”). This User Agreement expressly incorporates the California Master Service Agreement (MSA) No. 5‐21‐70‐28‐06 which is incorporated herein. This User Agreement contract form serves as an appropriate equivalent to the STD 213 as required by the MSA.
Contracting Agency: The City of San Luis Obispo
Contractor Name: Littlepay, Inc.
2. The Term of this Agreement is:
Start Date: [ENTER DATE EXPECTED TO SIGN]
Through End Date: 02/27/2027 with the ability to extend at the discretion of the State of California’s Department of General Services
3. The maximum amount of this Agreement is:
See Exhibit B for pricing
4. Exhibits. The parties agree to comply with the terms and conditions of the following exhibits, which are by this reference made a part of this agreement.
Exhibits Title Pages
Exhibit A Statement of Work 6
Exhibit B Scope of Work 5
Exhibit C Payment Provisions 1
MSA 5-21-
70-28-06
MSA 5-21-70-28-06 is hereby incorporated by reference. The MSA is available at:
https://caleprocure.ca.gov/PSRelay/ZZ_PO.ZZ_CTR_SUP_CMP.GBL?Page=ZZ_CTR _SUP_PG&Action=U&SETID=STATE&CNTRCT_ID=5-21-70-28-06
In Witness Whereof, This Agreement has been executed by the parties hereto.
Contractor:
___________________________________________ Date:________________________ Littlepay, Inc.
915 L. Street, Suite C #441
Sacramento, CA 95814
By: Amin Shayan, CEO
Contracting Agency Name:
___________________________________________ Date:________________________ City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Whitney McDonald, City Manager
2 EXHIBIT A
Scope of Work
1. Incorporate MSA by Reference
MSA 5-21-70-28-06 and its amendments is hereby incorporated by reference as if attached hereto.
2. Description
Three transit operators in the region will lead the project with support from the San Luis Obispo Council of Governments (SLOCOG). In 2024, the region was awarded SB125 funds to collaboratively deploy contactless payment technology across the region’s operators. The goal is to select matching vendors across each transit provider.
The three transit operators that serve the SLOCOG region, and are part of this award, include San Luis Obispo Regional Transit Authority (RTA), Morro Bay Transit (MBT), and San Luis Obispo (SLO) Transit. A brief description of each transit provider follows:
RTA
The RTA was created in 1989 as a Joint Powers Authority to provide management of regional fixed-route public transportation services, as well as regional paratransit services. In 2001, the paratransit service, called RTA Runabout, began providing complementary ADA service for all five fixed-route providers operating in the region. The mission of the RTA is to provide safe, reliable and efficient transportation services that improve and enhance the quality of life for the citizens and visitors of San Luis Obispo County. The County is located on the beautiful Central Coast of California, halfway between Los Angeles and San Francisco. The current population of the county is 284,010, including that of three small urbanized areas (UZAs): San Luis Obispo designated in 1990; El Paso de Robles-Atascadero in 2000; and Arroyo Grande-Grover Beach in 2010. The RTA coordinates regional services with local fixed-route providers in each UZA in the County, as well as within the Santa Maria UZA (population 130,000) in nearby northern Santa Barbara County.
The RTA directly operates hourly service on four regional fixed-routes and ADA paratransit services primarily along the US-101 and SR-1 corridors, as well as express commuter services during peak travel periods.
Three out of the four regional fixed-routes converge on downtown San Luis Obispo, 7 days a week. The RTA regional fixed-route service has a peak pull-out of 15 buses, and provides almost 500,000 passenger-trips annually, while weekday productivity ranges from 4 to 23 boardings/hour. The RTA also operates communitybased services funded by SLO County in small rural areas, and is funded by the City of Paso Robles to operate its local fixed-route and a local Dial-A-Ride programs. Finally, as of January 2021, the RTA also directly operates SoCo Transit – the eight-bus local fixed-route service operated in the Beach Communities of the Five Cities Area. These services provided over 300,000 additional fixed route trips with productivity in line with what is seen on the RTA regional fixed routes. Fixed route fare revenue is approximately $1 million per year and is expected to increase as ridership increases.
MBT
The City of Morro Bay is located on the central coast of California approximately halfway between San Francisco and Los Angeles. The City has a population of 10,531. In 1977, the City began operating a year round general public Dial-A-Ride service. The Dial-a-Ride service was replaced in October 2010 with a deviated fixed route system after recession-related reductions in State funding necessitated adaptations in how the service was provided. The deviated fixed route service operates within the City limits from 6:10 a.m. to 6:45 p.m., Monday through Friday. Service provided is on one fixed route loop throughout the City limits and deviates off route, using one bus, to pick up/drop off riders who have previously scheduled curb-to-curb trips (Call-A-Ride trips). These deviated trips are arranged the day prior to the needed curb-to-curb service; however, same day trips are also accommodated if they do not cause the fixed route to become behind schedule. Morro Bay Transit is closed on weekends and all City observed holidays.
Additionally, in 1994, the City began operating a seasonal trolley fixed route service. Over time, trolley service expanded first to two, then to three routes that came from recommendations from a parking management
3 plan study and Short-Range Transit Plan update. Service provided is on two fixed route loops throughout the City limits. Trolley service operates weekends only from the first weekend in June to the first weekend in October. Service begins at 10:00 a.m. each operating day and ends at 5:00 p.m. on Saturdays and Sundays.
Both the deviated fixed route and Trolley services are currently contracted out to a third party provider, however, in September 2024, the City Council approved the consolidation of MBT into the RTA system. RTA will start operating MBT June 1, 2025.
During the pandemic, service levels changed for the Trolley with cuts in the number of service routes and days operated, and for the deviated fixed route, Saturday service was stopped. Currently, the trolley routes see an average daily ridership of 110 riders per day and the deviated fixed route service sees an average daily ridership of 47 riders per day.
Ridership is split between cash fares (39%), punch passes (12%), Regional Passes (35%), Runabout rides paid through a reimbursement agreement with the RTA (4%), and free Gold pass rides (10%). MBT and Trolley fare collection is processed 100% manually by the drivers. Ridership demographics span all types of the population from child, adult, senior, those with disabilities, students K-12, college students, visitor service workers, working professionals, and visitors. Revenue from cash fares totaled $9,882.75 and revenues from the Regional Pass and Runabout fare reimbursement program totaled $5,579.17 for FY 23/24.
MBT service provides a connection to the RTA system at City Park as well as connections to the City’s seasonal Trolley service at Centennial Stairway and along north Main Street. MBT’s Trolley service links the Downtown Business District, Waterfront, State Parks in the north and south ends of the community, and the Museum of Natural History. In addition, the service provides a connection to the RTA system at City Park upon request. The connection provided by both services is an important link with the RTA system to the other communities in San Luis Obispo County, and connections to a major community college (Cuesta College), state university (California Polytechnic State University - SLO), the County seat in San Luis Obispo, as well as many links to coastal recreational venues and access to service jobs at destinations around the coast such as Hearst Castle.
MBT services may be consolidated to RTA in mid-2025. Vendors please assume that any information in this Scope specific to MBT will remain unchanged regardless of said decision. The operators shall inform vendors if a consolidation is confirmed.
SLO Transit
San Luis Obispo (SLO) Transit was established in 1974 by the City of San Luis Obispo (City) and provides the local fixed-route public transit system for the City. The City is located along the Central Coast region of California, halfway between San Francisco and Los Angeles. The City has a population of 47,063 with an estimated additional population of 21,600 students when California Polytechnic State University (Cal Poly) is in session.
SLO Transit contracts for the operation of eight fixed routes, in a hub-and-spoke model, within the 23 square miles of the City limits and on Cal Poly’s campus. SLO Transit also operates three tripper services, an express service between the university and downtown, and a trolley on Thursday nights in support of a local farmer’s market. Fixed-route services operate Monday through Friday approximately from 6 am to 11 pm and Saturday and Sunday from 8 am to 8 pm during the academic year.
SLO Transit ridership demographics reflect a broad cross section of the population. While the majority of trips are campus-related (roughly 60%), SLO Transit also serves seniors, persons with disabilities, K-12 students, working professionals, visitors, and other choice riders. College students, staff, and faculty’s fares are paid for by a transit service agreement between the City and the university. Revenue from cash fares exceeded $250,000 last fiscal year. Over 575,000 passenger‐trips were provided in 2024 including riders covered by transit service agreements. The number of passenger-trips and fare revenue continues to increase each year as services are expanded.
3. Regional Expectations
4 Although each agency shall retain autonomy, work, and contract directly with vendors, there are region-level needs to note:
RTA shall contract on behalf of MBT and their services The Category A vendor shall provide a single integration to Token Transit, who currently provides regional passes
The Category B vendor shall enable regional capping – a regional day-pass ($5.50) and a regional 31-day pass ($68) across all fixed-route services
While the scope of work submitted to vendors aims for a regional collaboration, sections of this scope of work hereafter pertain to SLO Transit only.
5 4. Determining internal responsibilities for the project Vendors should coordinate directly with the following contact during the course of the project.
Alex Fuchs
Mobility Services Business Manager
[email protected]
5. Fare Structure and Business Rules
SLO Transit’s base fare structure shall at a minimum include the following:
SLO Transit
Fixed-Route
One-way $1.50
Transfers Free across SLO Transit, up to an hour
Daily Cap $3.25
Weekly Cap
Monthly Cap $40
Regional Daily Cap $5.50
Regional Monthly Cap $68
Existing discounts (seniors, persons with disabilities, etc.) will continue to be offered on the legacy systems.
When such capability is available to offer those discounts on the contactless payment system, the SLO Transit may request that the Category B provider integrate with the resulting Eligibility Verification system to do so.
6 6. On-board Technologies
SLO Transit’s fleet consists of 18 fixed route vehicles ranging from a 28-foot cutaway bus to a 40-foot double decker bus:
● 14 Gillig vehicles that are 30, 35, and 40 feet
● 1 electric 35-foot New Flyer vehicle
● 1 electric 35-foot Proterra vehicle
● 1 28-foot El Dorado cutaway vehicle
● 1 40-foot Alexander Dennis double-decker bus
Six new battery electric buses are expected to arrive in fall 2025 and another two in summer 2026 which will replace older diesel-powered buses.
Vehicles are currently leveraging Peak Transit for CAD-AVL services and are connected to the Verizon network via SIM cards.
The City of San Luis Obispo uses Chase Bank’s Paymentech for merchant processing, but shall leverage California’s EPAY agreements to contract with Elavon Inc for this project.
7. Items Specific to Category A (PADs)
SLO Transit shall have PADs installed near the front door of each vehicle and will be wired to the bus battery, barring vendor inspection of vehicles. The following hardware quantities are to be installed, the Category A vendor shall provide a delivery timeframe.
PADs to be installed 18
Spare PADs 5
Total 23
Value-add Requests
The Category A vendor shall complete the installation of PADs and will provide an extended warranty on all PADs purchased. All devices shall be equipped with hardware to read barcode/QR codes.
7.1 Determining whether any changes are needed to default Category A service level agreements (SLAs) in the User Agreement
Not offered.
7 8. Items Specific to Category B (Transit Processor Services) SLO Transit shall select a single Category B vendor to process transactions made on the PADs. Please refer to sections 1-6 above for applicable business rules and technologies. The transit operators accept the vendor’s customer support channels for both riders and agency personnel.
SLO Transit requires access to a data dashboard to view transaction data. Raw (CSV) format is acceptable.
At a minimum, reports shall include but not be limited to:
Revenue report (including the number of transactions and total transaction amounts) Operations report (including the total revenue per route per day, the number of boardings per route per stop per hour per day, and any other metrics as agreed between the Transit Agency and Transit Processor)
KPI report (documenting all service levels in relation to the KPIs) Number of new customers and returning customers
Bad debt and debt recovery reports
Dispute and chargeback reports
Ridership by pass per route (for example, for a pass how many trips during the month on MBT, RTA (by each route operated by RTA), and SLO Transit) Value-add Requests
SLO Transit does not request any value-add services at this time.
8.1 Determining whether any changes are needed to default Category B service level agreements (SLAs) in the User Agreement
SLO Transit accepts the default SLAs.
8 EXHIBIT B
This EXHIBIT B Scope of Work (“UASOW”) forms part of the User Agreement between:
(a) The City of San Luis Obispo a public transportation authority operating under the laws of California with a registered address of 990 Palm Street, San Luis Obispo, CA 93401 contactable for notice at the following email address: [email protected] (“Transit Authority”); and (b) Littlepay, Inc., a Delaware corporation with a Branch in California (File number: C4769096) with an address of 915 L. Street, Suite C #441, Sacramento, CA 95814, USA, contactable for notice at the following email address: [email protected] (“Littlepay”), each a “party” and together the “parties”.
BACKGROUND
(A) The Transit Authority is a public transportation operator, providing public transit to Transit Customers.
The Transit Authority wishes to offer Transit Customers the option to pay by way of contactless EMV Cards.
(B) Littlepay sells payment processing and ancillary services and has been awarded a Master Services Agreement number 5-21-70-28-06 as the same may be amended in accordance with its terms from time to time (“DGS MSA”) by the Department of General Services (“DGS”), State of California in Category B “Transit Processor Services”. The Transit Authority wishes to procure these services in compliance with the terms and conditions agreed under the DGS MSA. (C) The Agreement entered into by the parties (which comprises the STD 213 Form and the Exhibits referred to therein, including this Exhibit B ) constitutes the “User Agreement” between the parties as contemplated in the DGS MSA framework.
(D) The Transit Authority has separate arrangements with third parties under which it receives merchant acquiring and payment gateway services. The User Agreement manages the relationship of the Transit Authority and Littlepay, being the terms upon which Littlepay offers payment processing and any ancillary services to the Transit Authority.
(E) Littlepay may subcontract certain aspects of its processing and other system management obligations herein to Littlepay Pty Ltd, a company incorporated under the laws of Australia and under common control with Littlepay.
(F) Pursuant to Section 10 of Exhibit B to the DGS MSA, the DGS MSA is incorporated into the User Agreement, such that applicable general provisions in the DGS MSA that refer to “the State” shall be understood to refer to the Transit Authority.
(G) In the event of any inconsistency between the User Agreement and the Card Scheme Rules, the Card Scheme Rules will prevail.
AGREED TERMS
1. INTERPRETATION
1.1 The following definitions apply in this UASOW:
Acquirer: a bank or financial institution that allows the Transit Authority to accept Card payments from an Issuer which, for the purposes of this Agreement, is deemed to be Elavon, Inc.
Authorization: means an affirmative response, by or on behalf of an Issuer, to a request to effect a Transaction on a Card and that the Card has sufficient funds available for the Transaction and has not been blocked for any reason or reported by the Cardholder as lost or stolen.
9 Authorization Request: means a message sent to the card scheme to validate a Card. Authorization Requests are performed in compliance with the Card Scheme Rules and in agreement with Financial Processors.
Business Day: a day other than a Saturday, Sunday or public holiday in California when banks in California are open for business.
Card: means a valid and current credit, debit, prepaid, commercial or any other payment Card issued by the Issuer.
Card Scheme: means Mastercard, Visa or any other Card Scheme otherwise agreed in writing between the parties from time to time.
Card Scheme Rules: means the rules and operating instructions issued by particular Card Schemes from time to time.
Cardholder: means an individual, company, firm or other body to whom a valid Card has been issued by a financial institution which is a member of one or more of the Card Schemes. For the purposes of this Agreement, all Cardholders who use a Card to purchase services from the Transit Authority will also be a Transit Customer.
Charges: the standard charges for the Services (both General Services and Value Added Services, collectively) as set forth in Exhibit C to the User Agreement and any applicable Statement of Work attached hereto and any other monies that may fall due under this Agreement.
EMV: means, in relation to this Agreement, the Europay, MasterCard and Visa standard, a secure technology used worldwide for all payments done with credit, debit and prepaid Europay, Mastercard and Visa smart Cards.
General Services: those services described in Section 3.A.
Issuer: means an organization that issues Cards and whose name appears on the Card as the issuer of such Card and who is a member of a Card Scheme, that enters into a contractual relationship with a Cardholder for the issuance and use of one or more Cards.
Mobile Inspection Device: Equipment validating the right to travel associated with a contactless EMV payment credential.
MVP Phase: An initial discovery period during which only registered riders can use the service.
Settlement: means the payment made to the Acquirer to the value of a Transaction.
Terminal: means an electronic device used at the point of Transaction that has the capability to capture Card details, process electronic data, obtain an Authorization and provide Transaction receipt data.
Transaction: means the acceptance of a Card or information embossed on the Card, for payment for services provided to Cardholders by the Transit Authority. For the avoidance of doubt, the term Transaction also includes credits (refunds), errors, returns and adjustments.
Transit Customer: The end user that is purchasing a fare for transport service provided by the Transit Authority.
Trip: a single Transit Customer journey. If that Transit Customer journey involves making two contactless EMV Card “taps” on on-board readers, with one tap recording the boarding stage and the other recording the alighting stage for the purposes of accurate fare calculation, those taps shall constitute one Trip.
User Documentation: refers to a manual maintained and published by Littlepay, and is available via Littlepay’s login credentials.
10 2. SERVICES
A. LITTLEPAY’S CATEGORY B TRANSIT PROCESSOR SERVICES
1. In consideration of the Charges payable under the User Agreement Littlepay shall provide to the Transit Authority during the Term the Transit Processor Services as described in Section 2A.2 below (such services being the “General Services”). Littlepay shall provide the General Services subject to the terms of the User Agreement and in a manner consistent with the Customer Specific Considerations described in Appendix 1 to this UASOW.
2. Littlepay General Services
Littlepay shall implement the technology, infrastructure and systems agreed between the parties from time to time as being required to facilitate the processing of contactless EMV Card payments of Transit Customers in respect of the Transit Authority’s ticketing operations. Littlepay’s obligations shall include, without limitation, the provision of systems and services to enable:
(i) Transaction capture: Littlepay shall receive taps from Terminals where Terminals conform to the "Littlepay Device API” and have been previously integrated by Littlepay and duly certified; (ii) Aggregation: Littlepay shall, according to Card Scheme Rules and Transit Authority configurations, define a time period where multiple Transactions are aggregated together into a single Transaction that is submitted for Authorization; (iii) Fare Capping: Littlepay shall apply a maximum capped amount to the amount charged to the Cardholder for a defined period. Refer to User Documentation for the types of fare capping available;
(iv) Authorization Processing: Littlepay shall, according to automated strategies, configurable settings and in compliance with Card Scheme Rules, generate the necessary Authorization Requests and exchange these with “Financial Processor(s)” (e.g. Acquirer, Gateway, Card Schemes) for approval by the Issuer;
(v) Settlement Processing: Littlepay shall, according to configurable settings, generate and submit the necessary Settlement records to the Financial Processor(s); (vi) Deny List Processing: Littlepay shall manage a “Deny List” of Cards that have been declined and make the Deny List available to all Terminals on the Transit Authority’s network connected to Littlepay. Once a debt is cleared, a Card is removed from the Deny List; (vii) Debt Recovery: Littlepay shall, via an automated strategy in compliance with Card Scheme Rules, re-present Authorization Requests that were initially declined at the time of Authorization;
(viii) Transit Authority Portal: Littlepay shall make available to the Transit Authority an online portal to enable the required administrative functions including Transit Authority configuration, Transaction viewing, exception processing and data analytics. Refer to User Documentation for the features available;
(ix) Passenger Portal: On request, Littlepay shall make available to Cardholders an online portal (Littlepay branded) for Cardholders to enter their Card details in a PCI-DSS secured manner and retrieve data related to their Card usage and associated Trips.
Littlepay operates a single cloud-based processing platform. New features will be introduced over time, and existing functions may be updated. Littlepay manages these changes entirely at its own discretion. Where new features are introduced to the standard platform, these will be made available to the Transit Authority without incurring additional Charges. Littlepay may also introduce premium
11 features that require additional Charges to access. Relevant updates to functionality shall be communicated to the Transit Authority on a timely basis. User Documentation is updated upon significant change and made available to the Transit Authority via an online repository.
3. The General Service Charges
(a) In order for Littlepay to provide the Services to the Transit Authority, the necessary Transit Authority Equipment and or Transit Authority Materials must be integrated by Littlepay. The Transit Authority shall bear responsibility for verifying with Littlepay whether the Transit Authority Equipment and or Transit Authority Materials has been, or needs to be, integrated beyond the Customer Specific Considerations described in Appendix 1 to this UASOW. Charges for integration, such as devices or third party components (software, portals, applications) are available on application by the Transit Authority (the “Integration” and, once integrated, become “Integrated”) and will be charged as Custom Development Work in accordance with the User Agreement terms, as follows:
i. The parties will work together to agree the requirements of any project(s) required to update and/or improve the procedures and specifications needed for the Transit Authority to be able to interact with Littlepay’s systems. This will include relevant Card Scheme specifications and Transit Authority operating instructions from the Acquirer where practicably possible;
ii. Littlepay shall work with a relationship manager representing the Transit Authority to provide an SOW for any such new projects or integrations, outlining the type of advice and technical support to be provided to the Transit Authority during the project within a reasonable timeframe of identifying a new project or integration to be undertaken; iii. Custom Development Work will be charged by Littlepay as “one-off” charges in accordance with the Category B Hourly Rate Card in Exhibit B.1 of the MSA. When a device or third party component has completed Integration, it will be considered by the parties to be included as an Integrated Device and will not incur any further Charges.
(b) All amounts invoiced by Littlepay under this section will become due 45 calendar days after the issuing of a valid invoice by Littlepay to the Transit Authority. Invoices for Transit processing services (under section A of Exhibit C ) shall be in US$ and shall not be issued until the end of the month in which such charges are incurred.
(c) If Littlepay’s performance of its obligations under this Agreement is prevented or delayed by any act or omission of the Transit Authority, its agents, subcontractors, consultants or employees then, without prejudice to any other right or remedy it may have, Littlepay shall be allowed an extension of time to perform its obligations equal to the delay caused by the Transit Authority.
3. TERMINATION
3.1 Without affecting any other right or remedy available to it, either party may terminate the User Agreement with immediate effect by giving written notice to the other party if:
(a) the other party commits a material breach of any term of the User Agreement and such breach is irremediable or (if such breach is remediable) fails to remedy that breach within a period of ten Business Days after being notified in writing to do so; (b) the other party enters into or becomes the subject of any insolvency related procedure.
3.2 Without affecting any other right or remedy available to it, Littlepay may terminate this Agreement with immediate effect by giving written notice to the Transit Authority if the Transit Authority fails to pay any amount due under this Agreement on the due date for payment (45 days) as described in MSA Exhibit B (Payment and Budget Provisions) and remains in default not less than 10 Business Days after being notified in writing to make such payment.
12 3.3 Termination or expiration of this Agreement shall not affect any rights, remedies, obligations or liabilities of the parties that have accrued up to the date of termination or expiration, including the right to claim damages in respect of any breach of the Agreement which existed at or before the date of termination or expiration.
13 Exhibit C
Pricing for mandatory & optional items
● All pricing is in US$.
● Pricing excludes acquirer fee. The acquirer fee will include the gateway fee. Card association and interchange fees will be passed through by the acquirer at cost. ● Fees for Transit Processing Services (A.1 and A.2 below) will be invoiced monthly. Implementation Services (if any) will be invoiced on signature, unless otherwise stated below. See section 3(b) of Exhibit B for more details.
CAL-ITP Standard
Pricing (under
DGS MSA)
Transit Authority
Pricing (US$)
A.1 Transit processing services
Transit processor services fee as % of total revenue
processed 2.8% 2.25%
A.2 Transit processing services: free fare transactions Transit processor services fee as fixed fee ($ per
transaction processed) $ 0.04 $0.02
B. Transit processor implementation services
Implementation services (Mandatory) $ 5,000.00 $5,000
C. Value added implementation services
Supporting EMV Level 3 certification (Mandatory) $20.000.00 Not required when using SC Soft or Kuba devices
Custom Development Work (Optional) Category B Hourly
Rate Card Not anticipated
D. Transit processor interface and integration services Integration with PAD contractor (Mandatory) $20,000.00 Not required when using SC Soft or Kuba devices
Integration with a payment processor (Mandatory) $100,000.00 Not required when using Cybersource & Elavon
Integration with eligibility verification system (Mandatory) $20,000.00 Not required when using Cal-ITP portal
E. Value added operations services
Premium final charge management services (Optional)
[fare calculation provided by littlepay]
1.50% Not applicable
Premium customer support (Optional) 0.25% Not applicable
Stand Alone Devices - ABT 3000 Unit $994.87 23 $22,882.01 Stand Alone Devices - ABT 3000 (spares) Unit $994.87 5 $4,974.35 Mounting Poles Unit $105.33 23 $2,422.59
Installation of PAD Unit $562.50 23 $12,937.50
Implementation Service Once-off $7,500.00 1 $7,500.00
Integration with Transit Processor Once-off $3,146.67 0 $0.00 EMV Level 3 Certification Once-off $9,440.00 0 $0.00
Custom development: Barcode reader
($195 per device) Hourly $137.50 39.71 $5,460
CAPEX Total $56,176.45
Operations costs - ongoing support
Per device per
month
$39.50 23 60 $54,510.00
Extended Warranty
Per device per
month
$7.38 28 48 $9,918.72
Implementation Service Once-off $5,000.00 1 $5,000.00
Project Life Total (5yrs) minus ongoing fees $125,605.17 Integration with 2D Bar Code Processor (to
be charged once, cost shared between
SLO Transit and SLO RTA)
Once-off
$ -
Set-up fee (each agency) Once-off $ 3,000.00
Kuba Annual Support for Token Annually $ 2,000.00 5 $ 10,000.00 Kuba Integration with Token Transit Totals: $ 13,000.00 Token Transit One-Time Fee Once-off $ -
Token Transit Annual Fee - Year 1 Annually $600.00 18 12 $ 10,800.00 Token Transit Annual Fee - Year 2 Annually $650.00 18 12 $ 11,700.00 Token Transit Annual Fee - Year 3, 4, 5 Annually $700.00 18 36 $ 37,800.00 Token Transit Annual Fee (Includes service
expansions after Year 2)
Annually $700.00
5 36 $ 10,500.00
Token Transit Sales Fee
Per device per
month $ -
Token Transit Estimated Fee Totals: $ 70,800.00
Total plus Token Transit/Kuba integration $209,405.17
Variable fees for Elavon transactions $ 0.03 $1,175,838.30 $ 35,275.15 Variable fees for revenue processed 2.25% $1,145,274.72 $ 25,768.68 Total plus estimated ongoing variable fees
$270,449.00
Kuba Extra Fees
Token Transit Fees
SLO Transit
Category A Kuba
Category B LittlePay
Ongoing fees variable, see Exhibit B of contracts (2.25% on transit processor services, $0.02 per free fare transaction) Description Rate Qty Months Total
Unit of
measure
1 Token Transit, Inc.
v. 20240403 US
Agency Order Terms 2025-03-09
These Agency Order Terms 2025-03-09 are for the purchase by Agency of a subscription to the Services specified below. Provision of the Services is subject to the Master Platform Terms and any additional terms referenced below and incorporated herein (these Agency Order Terms together with the Master Platform Terms, may be referred to as the “Agreement”) between the customer specified below (“Agency”) and Token Transit, Inc. (“TT”). These Agency Order Terms are effective, upon signature of both Agency and TT (the “Agency Order Terms Effective Date”).
These Agency Order Terms 2025-03-09 supplement (e.g., by adding Additional Services) any prior Agency Order Terms documents and such prior Agency Order Terms documents remain in full force and effect except as supplemented by these Agency Order Terms 2025-03-09, unless otherwise indicated below.
Agency Name:
City of San Luis Obispo
Agency Physical Address:
990 Palm Street, San Luis Obispo, CA 93401
Agency Billing Address (if different than physical address):
Primary Agency Contact:
Name: Alex Fuchs
Email: [email protected]
Phone: 805-783-7877
Invoice Contact:
Name: Jesse Stanley
Email: [email protected]
Phone: 805-781-7012
Services (descriptions in Section 1 of the Master Platform Terms):
Agency’s Target Service Launch Date (as the parties may amend in writing, email to suffice): Sep 1, 2025 Territory: United States
Core: included (required)
Fees:
Fees for services are below and as detailed in Exhibit A to this agreement.
QR Scanning Integration with Kuba: $600/vehicle annual recurring fee with initial annual fee due within thirty (30) days of the Service Launch Date.
Passes: Fees are calculated as follows:
For each transaction for use on Agency’s transit system during the Term, TT will retain a Passes Fee of (i) 8% of the gross total proceeds of the transaction processed by the Services for each transaction that is greater than or equal to $2.00 and (ii) $.06 + 7% of the gross total proceeds of the transaction processed by the Services for each transaction that is less than $2.00.
Technical Services (if applicable):
All fees indicated do not include any taxes, if applicable, which are the sole responsibility of Agency.
Master Platform Terms:
https://agency.tokentransit.com/legal/agency-master-platform-terms-20240403.pdf The Master Platform Terms govern Agency’s use of TT’s platform services, and include reference to the terms of service between Agency and the third-party payment processor responsible for processing and settling payments to Agency. By entering into this Agreement, Agency is agreeing to those terms of service. The Master Platform Terms version referenced above supersedes and replaces any prior agreement (including any prior version of the Master Platform Terms) between Agency and TT, if any.
Additional Terms (if applicable):
Agency has a contract with Kuba to provide QR Code Readers. Agency has installed or will install QR Code Readers on all required vehicles.
Agency will provide Kuba with the complete Token Transit QR Code Specification and Kuba will implement the specification.
Kuba will be responsible for implementation and maintenance of the QR code scanning functionality including approving or denying the QR code according to the Token Transit specification and any validation data reporting.
Section 5.1 (Confidential Information) of the Master Platform Terms is amended by adding the following sentence at the end of Section 5.1:
“For the avoidance of doubt, 'Confidential Information' does not include this Agreement or any attachments, exhibits, or addenda.” Section 8.2 (Agency Indemnification) of the Master Platform Terms is amended by deleting provisions (b) through (e) and replacing them in their entirety with the following: “(b) any unauthorized use or disclosure of TT Rider Data by Agency; (c) Agency’s obligations pursuant to or claims arising out of the Payment Processor terms of service; or (d) breach of Agency’s obligation with respect to Additional Services.”
2 Token Transit, Inc.
v. 20240403 US
Section 9.1 (Disclaimer of Damages) of the Master Platform Terms is amended by adding the following at the end of the section: “The foregoing limitations on liability shall not apply to either Party’s willful misconduct, fraud, or gross negligence.” Section 10.1 (Term) part (a) of the Master Platform Terms is amended by replacing “twelve (12)” months with “five (5) years”.
Section 11.1 (Notice of Modification) is amended by adding the following at the end of Section 11.1: “Upon receiving notice of modifications, Agency may elect to terminate the Agreement immediately for convenience if such modifications are materially adverse to Agency, notwithstanding Section 10.2 (Termination).”
Section 12.1 (Applicable Law and Jurisdiction) is amended by replacing San Francisco with “San Luis Obispo County”.
No terms included in any purchase order, acknowledgment or other non-TT ordering document shall apply to the Services. The pricing and Services presented in these Agency Order Terms are TT confidential information (to the maximum extent permitted under applicable law). All fees indicated above do not include any taxes, if applicable, which are the sole responsibility of Agency. [SIGNATURES ON NEXT PAGE]
3 Token Transit, Inc.
v. 20240403 US
By signing below, the parties through their duly authorized representatives agree to the terms as documented in these Agency Order Terms.
Token Transit, Inc. (TT) City of San Luis Obispo (Agency) By:
[sig|req|signer1|Signature|sigTT]
Name: [text|req|signer1|FullName|nameTT]
Zachary Browne
Title: [text|req|signer1|Title|titleTT]
Founder
Date:
[date|req|signer1|Date|dateTT]
By:
[sig|req|signer2|Signature|sigAgency]
Name:
Whitney McDonald[text|req|signer2|FullName|nameAgency]
Title: [text|req|signer2|Title|titleAgency]
City Manager
Date: [date|req|signer2|Date|dateAgency]
Token Transit
2261 Market Street STE 5999
San Francisco, CA 94114
415-918-6770
Quote
Submitted on 4/23/25
Token Transit Contact Project Name Quote for
Zack Browne
[email protected]
608-770-5514
Token Transit Fare Collection -
Early Customer Pricing
QR Scanning
Integration with Kuba
& Mobile Ticketing
To: Project Term Length Start Date
SLO Transit 5 Years September 1, 2025
Quote Valid Until Payment Term
July 1, 2025 Upfront net 30 days for annual recurring costs Description
Unit Price
(USD) Qty Years Total price
Mobile Ticketing Software Maintenance and Support (Annual recurring cost) $2,500 1 5 $12,500.00 Maintenance & Support of Token Transit app Included - - - Data & reporting (Token Transit Portal) Included - - -
Unlimited fare modifications Included - - -
Send-a-pass and Community Pass Program functionality Included - - - Fare capping Included - - -
Mobile & Physical Ticketing Payment Processing & Customer Support 10% of transaction for transactions greater or equal to $2.00; $.06 + 7% for transactions less than $2.00
Early Customer Pricing* 8% of transaction for transactions greater or equal to $2.00; $.06 + 7% for transactions less than $2.00
Fare payment processing of mobile and physical fares Included - - - Send-a-pass and Community Pass Program functionality Included - - - Rider Support: front line for rider support Included - - - Customer Success: ongoing support Included - - -
* Special discounted pricing is offered for SLO Transit due to their legacy status as a Token Transit customer.
QR Scanning Integration with Kuba Validators (Annual recurring cost) Year 1 $600.00 18 1 $10,800.00
Year 2 $650.00 18 1 $11,700.00
Year 3, Year 4, and Year 5 $700.00 18 3 $37,800.00
Validation Software: Software that supports scanning on Kuba fareboxes with secure, dynamic QR code Included - - -
Customer Success: Project management of validation integration, onboarding, and other agency-focused support Included - - -
Customer Support: front line rider support for integration Included - - - ** Kuba may charge additional fees for integrating with Token Transit. $72,800.00
early customer discount* -$12,500.00
Total Cost - 5 Years $60,300.00
Note: Summary of total costs include annual reocurring costs; no transaction fees.
EXHIBIT A
City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: May 20, 2025
TO: Mayor and Council
FROM: Emily Jackson, Finance Director
Prepared By:Debbie Malicoat, Deputy Finance Director/City Controller VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 6h – FY 2023-24 SINGLE AUDIT
Staff received the following question, regarding the FY 2023-24 Single Audit. The question is below with staff’s response shown in italics:
1) It seems that the one remaining issue related to journal entry approval is about “approval for system-generated adjusting entries, which are currently posted automatically.” All manual entries now have a workflow that allows for oversight/approval per the recommendations of the Auditor. Is that correct? If so, can you give an estimate of the size of the issue still remaining? In other words, are these system-generated adjusted entries a majority of all entries, or a smaller percentage compared to manual entries? It is correct that the City has approval controls for manual entries to allow for oversight and approval.
The remaining issue is that the system generates adjusting entries when certain corrections are made to payables transactions. These entries are not uncommon, and it is estimated that they represent a very small percentage of total transactions (probably less than 1% of transactions). Unfortunately, there is not a way for the system to automatically route those journal entries through an approval process. To compensate for this, staff has created a report that will identify the transactions after the fact and automatically route the report to a supervisor for review. This will satisfy the Auditor’s concern that there previously had not been any review of these types of transactions. Use of the report creates an internal control that provides assurance that when these corrections are made to payables transactions, there is oversight and review and this audit finding should be resolved in next year’s report.
Item 6h
Department: 4
Cost Center: 2005
For Agenda of: 5/20/2025
Placement: Consent
Estimated Time: N/A
FROM: Emily Jackson, Finance Director
Prepared By: Debbie Malicoat, Deputy Finance Director
Tavy Garcia, Senior Accountant
SUBJECT: ACCEPTANCE OF THE FEDERAL SINGLE AUDIT FOR FISCAL YEAR 2023-24
RECOMMENDATION
Review and accept the Federal Single Audit Report for Fiscal Year 2023-24.
POLICY CONTEXT
The City’s Charter under Section 810 requires the employment of an independent, certified public accountant to examine the City’s financial statements.
DISCUSSION
Background
The City’s independent auditing firm, Badawi and Associates, have prepared the Single Audit Report which provides several items. First, it provides a report on the City’s internal controls related to financial reporting. Second, it provides a schedule of expenditures that were funded by Federal Grants and the City’s compliance with applicable Federal regulators. Third, it provides a schedule of findings and questioned costs, if any. Findings are areas of improvement when it comes to the internal controls that are designed to manage the risk of how the City’s assets are safeguarded, and its finances are accurately reported, which then translates into the proper administration of Federal funding.
For the 2023-24 fiscal year, there are two findings and no questioned costs. The City’s responses to the auditor’s findings are incorporated into the Single Audit Report (Attachment A). The auditor’s comments generally reflect the difficulties encountered when implementing the Enterprise Resource Planning/Human Capital Management (ERP/HCM) cloud-based Oracle system and both are continuations from the prior year.
The City is currently working to resolve these issues, utilizing an Oracle consultant for the necessary reconfigurations. The lack of any new findings reflects the significant time and effort that has been dedicated to ongoing configuration work.
Item 6h
Public Engagement
The City’s Single Audit Report fulfills a legal requirement and does not have a public engagement component outside the presentation before the Council during a public session.
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: Yes Budget Year: 2024-25
Funding Identified: Yes
Fiscal Analysis:
The City budgets the cost for the auditing firm annually. The cost is appropriated with the annual budget adoption and encompasses the Annual Comprehensive Financial Report (ACFR), Transportation Development Act (TDA), Single Audit, and the Whale Rock Reservoir audit. The current fiscal year contains a budget of $75,000 for the previous fiscal year audit. Actual costs were $67,491 in accordance with the City’s contract with the auditing firm, no additional funding is requested at this time.
ALTERNATIVES
There are no viable alternatives to accepting the Single Audit Report for the fiscal year 2023-24; it is prepared in conformance with a variety of accounting, Federal, and State reporting requirements and represents the professional evaluation and analysis by the City’s independent auditors.
ATTACHMENTS
A - Single Audit Report, Fiscal Year Ended June 30, 2024
City of San Luis
Obispo
San Luis Obispo, California
Single Audit Reports
For the year ended June 30, 2024
City of San Luis Obispo
Single Audit Reports
For the year ended June 30, 2024
Table of Contents
Page
Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards................................................................. 1 Report on Compliance for Each Major Federal Program and on Internal Control over Compliance in Accordance with the Uniform Guidance And on the Schedule of Expenditures of Federal Awards................................................................................ 3 Schedule of Expenditures of Federal Awards ........................................................................................................... 7 Notes to the Schedule of Expenditures of Federal Awards..................................................................................... 9 Schedule of Findings and Questioned Costs ........................................................................................................... 10
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of San Luis Obispo, California (City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated December 24 , 2024.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. However, as described in the accompanying schedule of findings and responses, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies described in the accompanying schedule of findings and questioned costs as item 2024-001 to be material weaknesses.
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompany schedule of findings and questioned costs as item 2024-002 to be significant deficiencies.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
City of San Luis Obispo’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our engagement and described in the accompanying schedule of findings and questioned costs. City’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Badawi & Associates, CPAs
Berkeley, California
December 24, 2024
2
REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL
OVER COMPLIANCE IN ACCORDANCE WITH THE UNIFORM GUIDANCE AND ON THE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of San Luis Obispo, California’s (City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2024. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.
In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2024.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS) ; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States(Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
3
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. 4
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated December 24, 2024, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used 5
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.
Badawi & Associates, CPAs
Berkeley, California
March 31, 2025 except for the schedule of expenditures
of federal awards on pages 7, which are as of December 24, 2024 6
City of San Luis Obispo
Schedule of Expenditures of Federal Awards
For the year ended June 30, 2024
Assistance
Listing Pass-through Program
Grantor Agency and Grant Title Number Number Expenditures CDBG - Entitlement Grants-Cluster
Department of Housing and Urban Development
Passed Through the county of San Luis Obispo
Community Development Block Grants/Entitlement Grants 14.218 $ 417,368 Total CDBG - Entitlement Grants-Cluster 417,368
U.S. Department of Justice
Direct award:
Bulletproof Vest Partnership Program 16.607 8,766
Edward Byrne Memorial Justice Assistance Grant Program 16.738 16,271 Total U.S. Department of Justice 25,037
U.S. Department of Transportation
Direct award:
Federal Transit Formula Grants 20.507 3,486,773
Total Federal Transit Cluster-Cluster 3,486,773
Passed Through the California department of transportation Highway Planning and Construction 20.205 103,654
Total U.S. Department of Transportation 3,590,427
Department of the Treasury
Direct award:
Coronavirus State and Local Fiscal Recovery Funds 21.027 10,396,711 Coronavirus State and Local Fiscal Recovery Funds
Total Department of the Treasury 10,396,711
U.S. Department of Health and Human Services
Passed Through the California department of Community Services and Development Low Income Household Water Assistance Program 93.499 17,487 Total U.S. Department of Health and Human Services 17,487 U.S. Department of Homeland Security
Direct award:
Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 358,157 Passed Through the California 's Office of Emergency Management Hazard Mitigation Grant - California Office of Emergency Management 97.039 974,845 Direct award:
Assistance to Firefighters Grant 97.044 123,790
Total U.S. Department of Homeland Security 1,456,792
Total Expenditures of Federal Awards $ 15,903,822
See accompanying Notes to Schedule of Expenditures of Federal Awards. Page 253 of 565 This page intentionally left blank
8
City of San Luis Obispo
Notes to the Schedule of Expenditures of Federal Awards For the year ended June 30, 2024
A. Reporting Entity
The City is a California charter city. It was incorporated on February 19, 1856 and chartered on May 1, 1876. It is organized in accordance with the Council-Mayor-City Manager form of government. With a population of approximately 47,788, the City provides a broad range of municipal services, including police and fire protection, parks and recreation, water and sewer utilities, street maintenance, public transportation, parking, planning, and building and safety.
B. Basis of Accounting
Funds received under the various grant programs have been recorded within the special revenue funds of the City. The City utilizes the modified accrual method of accounting for the special revenue funds.
Modified accrual accounting recognizes revenues when they become available and measurable and, with a few exceptions, recognizes expenditures when liabilities are incurred. The accompanying Schedule of Expenditures of Federal Awards (Schedule) has been prepared on the modified accrual basis of accounting.
C. Relationship of Schedule of Expenditures of Federal Awards to Financial Statements The accompanying Schedule presents the activity of all federal financial assistance programs of the City.
Federal financial assistance received directly from federal agencies as well as federal financial assistance passed through the State of California is included in the Schedule.
The Schedule was prepared only from the accounts of various grant programs and, therefore, does not present the financial position or results of operations of the City.
D. Pass-Through Entities’ Identifying Number
When federal awards were received from a pass-through entity, the Schedule shows, if available, the identifying number assigned by the pass-through entity. When no identifying number is shown, the City determined that no identifying number is assigned for the program or the City was unable to obtain an identifying number from the pass-through entity.
E. Indirect Costs
The City did not elect to use the 10% de minimis indirect cost rate. 9
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section I - Summary of Auditor’s Results
Financial Statements
Types of auditor’s report issued: Unmodified
Internal control over financial reporting:
Material weakness(es) identified? Yes
Significant deficiency(ies) identified? Yes
Any noncompliance material to the financial statements noted? No Federal Awards
Internal control over major programs:
Material weakness(es) identified? No
Significant deficiency(ies) identified? None noted
Type of auditor’s report issued on compliance for major programs Unmodified Any audit findings disclosed that are required to be reported in Accordance with section 200.516(a) No
Identification of major programs:
Assistance Listing Number(s) Name of Federal Program or Cluster Expenditures
21.027 Coronavirus State & Local Fiscal Recovery Funds $ 10,396,711
97.039 Hazard Mitigation Grant 974,845
Total Expenditures of All Major Federal Programs $ 11,371,556 Total Expenditures of Federal Awards $ 15,903,822
Percentage of Total Expenditures of Federal Awards 71.5% Dollar threshold used to distinguish between type A and type B program $750,000 Auditee qualified as low-risk auditee under
section 200.520? No
10
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section II – Current Year Findings
A. Financial Statement Audit Finding
2024-001 Journal Entries Posting (Material Weakness)
Criteria: The access to post journal entries in the general ledger should be restricted. Journal entries should be independently prepared, reviewed before being posted to the general ledger.
Condition: During the review of the City’s journal entry approval matrix and JE testing, we noted the posting from the subledger to GL do not require approvals at the general ledger level nor at the subledger level. Considering the number of employees who can post entries through subledger without review and the fact that corrections to payroll, payable, revenue/receivables, cash management, capital assets all can be posted through subledger and do not require approval, it increased the risk of unauthorized or incorrect journals getting posted into general ledger.
Cause: The City didn’t have control in place to ensure all journal entries are properly reviewed before posting.
Effect: Journal entries recorded in the City’s accounting system may be inaccurate, unapproved, or unsupported.
Recommendation: We recommend that the City limit the number of employees who can post journal entries in the subledger and general ledger and implement system control to ensure all journal entries are reviewed before posting.
Management’s response:
City management agrees with the recommendation and continues working with the internal IT team and consultants to modify the Oracle ERP system’s workflow to include approval for system-generated adjusting entries, which are currently posted automatically.
Approval for manually generated journal entries was implemented in FY 2021-22 and remains in place.
While the City has approval controls for manual entries, a solution for system-generated adjustments is still in progress. This goal is considered partially implemented by the City. 11
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section II – Current Year Findings, continued
A. Financial Statement Audit Finding, continued
2024-002 Payroll Module Implementation (Significant Deficiency) Criteria: An effectively implemented payroll system should process the payroll accurately, and an effective internal control system over payroll requires timely and accurate payroll processing.
Condition: During the performance of the audit, we noted that – • The Oracle payroll module has overtime configuration implemented incorrectly, and the City has to manually track the payroll in a spreadsheet and correct the error as it occurs since the implementation.
• The configuration of payroll journal entries posting was implemented incorrectly which caused the variance between the bank record and the City’s general ledger.
Cause: The Oracle payroll module has not been implemented correctly.
Effect: Errors and fraud can go undetected in payroll processing with a large volume of manual corrections needed.
Recommendation: We recommend the City to work with the third-party vendor to correct the implementation of payroll module.
Management’s Response:
City Management agrees with the finding and has engaged a consultant to reconfigure the payroll module to correct overtime calculations. Significant progress has been made in identifying and testing solutions, with full implementation expected during the 2024-25 fiscal year.
In the interim, the City continues to monitor payroll, manually correcting overtime issues each pay period.
To enhance accuracy, staff has developed comprehensive training on time card entry and created Oracle Guided Learnings (OGLs) for real-time payroll module training. Additionally, the City has implemented the mandatory "Redwood" Oracle user interface upgrade, improving usability and time-tracking accuracy.
Configuration of the payroll journal entries was a one-time occurrence that has since been corrected. 12
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section II – Current Year Findings, continued
B. Federal Award Program Audit Finding
No findings or questioned costs were noted in the current year.
Section III – Prior Year Findings
A. Financial Statement Audit Finding
2023-001 Journal Entries Posting (Material Weakness)
Criteria: The access to post journal entries in the general ledger should be restricted. Journal entries should be independently prepared, reviewed before being posted to the general ledger.
Condition: During the review of the City’s journal entry approval matrix and JE testing, we noted the posting from the subledger to GL do not require approvals at the general ledger level nor at the subledger level. Considering the number of employees who can post entries through subledger without review and the fact that corrections to payroll, payable, revenue/receivables, cash management, capital assets all can be posted through subledger and do not require approval, it increased the risk of unauthorized or incorrect journals getting posted into general ledger.
Cause: The City didn’t have control in place to ensure all journal entries are properly reviewed before posting.
Effect:. Journal entries recorded in the City’s accounting system may be inaccurate, unapproved, or unsupported.
Recommendation: We recommend that the City limit the number of employees who can post journal entries in the subledger and general ledger and implement system control to ensure all journal entries are reviewed before posting.
Status: Not implemented. See current year finding 2024-001. 13
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section III – Prior Year Findings, continued
A. Financial Statement Audit Finding, continued
2023-002 Payroll Module Implementation (Significant Deficiency) Criteria: An effectively implemented payroll system should process the payroll accurately, and an effective internal control system over payroll requires timely and accurate payroll processing.
Condition: During the performance of the audit, we noted that – • The Oracle payroll module has overtime configuration implemented incorrectly, and the City has to manually track the payroll in a spreadsheet and correct the error as it occurs since the implementation.
• The configuration of payroll journal entries posting was implemented incorrectly which caused the variance between the bank record and the City’s general ledger.
Cause: The Oracle payroll module has not been implemented correctly.
Effect: Errors and fraud can go undetected in payroll processing with a large volume of manual corrections needed.
Recommendation: We recommend the City to work with the third-party vendor to correct the implementation of payroll module.
Status: Not Implemented. See current year finding 2024-002 14
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section III - Prior Year Findings, continued
B. Federal Award Audit Finding
No findings or questioned costs were noted in the prior year. 15
Item 6i
Department: Parks and Recreation
Cost Center: 7001
For Agenda of: 5/20/2025
Placement: Consent
Estimated Time: N/A
FROM: Greg Avakian, Parks & Recreation Director
Prepared By: Devin Hyfield, Recreation Manager
SUBJECT: AUTHORIZE RELEASE OF RFP FOR MISSION PLAZA CAFÉ KIOSK
RECOMMENDATION
1. Authorize the release of a Request for Proposal for a food and beverage vendor at the Mission Plaza; and
2. Authorize the City Manager to award the contract and execute a vendor lease agreement with the selected vendor in a form approved by the City Attorney.
POLICY CONTEXT
With the adoption of the 2021-23 Financial Plan, Council established a Major City Goal of Economic Recovery, Resiliency, and Fiscal Sustainability. Within that Major City Goal is the strategic approach to Downtown Vitality with efforts to focus on supporting infrastructure investments. The Mission Plaza improvements are included in the infrastructure investments the City is pursuing to meet the Major City Goal by activating a public space, providing services to the public, and increasing safety of the plaza. The Café Kiosk is part of an approved capital improvement plan project in the adopted 2023- 25 Financial Plan that continues to support the Major City Goal of Economic Resiliency, Cultural Vitality, and Fiscal Sustainability.
DISCUSSION
Background
In 2017, the City Council reviewed and adopted the Mission Plaza Concept Plan. A major component of the Concept Plan is to replace the existing restroom and install a new café kiosk to provide concessionaire services and support more activation in the plaza. RRM Design Group was selected in 2018 to lead the entitlements process and prepare design documents for the improvements. After several advisory body meetings which included Parks and Recreation Commission and the Planning Commission, a Council Study Session was conducted in February 2020 to provide direction for the final scope of the Mission Plaza project. At that meeting, Council provided direction on conceptual designs for the project site and confirmed their support for continuing the project. The inclusion of the Café Kiosk was identified by Council as a significant component of the current Mission Plaza Improvement project, and permanent structure was preferred over mobile food operations. Furthermore, a café kiosk provided the opportunity to lease the space to
Item 6i
a food and beverage business and achieve a more permanent presence in the plaza, which was beneficial for activating the space.
Project
The project includes the replacement of the existing restroom within the Mission Plaza with a new restroom, construction of a café kiosk, creation of an outdoor seating area (including tables and chairs), an informational art and events stand, and associated site improvements surrounding these buildings. The project also includes improving accessibility (ADA) and enhancing safety through site lighting and security cameras.
Staff is requesting authorization to advertise a Request for Proposal (RFP) for a food and beverage vendor to lease the Café Kiosk, which includes the outdoor dining space. Staff would like to secure a vendor for the space prior to completion of construction for the vendor to include functional operational improvements to the kiosk prior to opening and providing services.
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Support Special Events and Potential for Alcohol Sales within Mission Plaza On an annual basis, the City approves between sixty (60) and ninety (90) special events within Mission Plaza and the “Dogleg” - section of Broad and Monterey streets adjacent to Mission Plaza. Most special events have vendors that pay a “vendor booth fee” to the event organizers or the event organizers sell food or beverages as a revenue generator.
Staff conducted outreach with representatives of SLO Chamber and Downtown SLO to obtain input on key areas for consideration of an appropriate concessionaire vendor and methods to support the variety of events held within Mission Plaza. The potential of the permanent concessionaire of the Café Kiosk may create some unforeseen circumstances where both the kiosk vendor and the event organizer may sell similar items or products.
Staff are including within the RFP the option for the vendor of the Café Kiosk to provide a business operation plan for consideration during scheduled events, such as hours of operation, allowance of alcohol sales, including the option to support the events or close operations during a scheduled event.
The City is allowing for the option for sale of alcohol within the concessionaire zone in adherence to all San Luis Obispo County Alcohol Beverage Control (ABC) licensing and regulation requirements. Contained in the RFP is a requirement for the applicant to include an operational plan for the sale of alcohol, including appropriate timeframes to allow the sale of alcohol, vendor oversight, and all regulatory requirements to adhere to the ABC regulations. The vendor will be solely responsible for all fees and permit requirements, including any modifications to the outdoor dining area to meet ABC regulations.
Previous Council or Advisory Body Action
On September 5, 2017, the Mission Plaza Concept Plan was adopted by City Council and staff proceeded with the Mission Plaza Restroom and Kiosk project design. The project designs were presented to key advisory bodies and then presented to City Council for a study session on February 18, 2020. The conceptual design was presented to the Cultural Heritage Committee on April 25, 2022. The project was reviewed by the Community Development Director through the Architectural Review application and the conceptual project plans were approved on June 1, 2022, based on findings and subject to project conditions that have been incorporated into the final construction documents. On June 20, 2023, the City Council authorized inviting bids for the Mission Plaza Enhancements, Specification Number 91439-01, which broke ground in January 2025.
Public Engagement
This project received public input throughout the process through the variety of advisory body meetings, Council Study Sessions, and project bid award listed above. The project has received funding in each financial plan since the 2015-17 Financial plan. The City engages the public during each financial plan process. Additionally, Staff have provided opportunity for input and concurrence by members of the SLO Chamber of Commerce and Downtown SLO specific to the vendor operations of a café kiosk.
Item 6i
RFP PROCESS
Upon authorization to advertise the RFP for a food and beverage business and lease of the Mission Plaza Café Kiosk, staff will advertise for the standard 5-week time frame. An opportunity for applicant questions with staff from both Public Works and Parks and Recreation Department is included within the advertising timeframe. Applications will be reviewed for qualifications and identified for an interview and selection meeting. This meeting will be comprised of appropriate City Staff and key City partners such as SLO Chamber of Commerce and Downtown SLO. Lease negotiations will involve staff from Parks and Recreation, City Attorney’s Office, and the Finance Department. The award of the successful vendor and approved lease agreement will be authorized by City Manager and City Attorney. Upon successful award, the selected vendor will submit final interior and operational construction documents to Public Works. The vendor is responsible for obtaining associated permits and construction costs for completion of the interior and provide anticipated timeline for opening operations.
CONCURRENCE
There is concurrence from the Community Development Department through the architecture review process and during review and approval of the project for building permit issuance. This project and the opportunity to lease the Café Kiosk to food and beverage vendor also has concurrence from the Administration and IT Department as they have reviewed the project throughout the design process, Economic Development team, and from the Finance Department through the review of the concessionaire RFP process and facility leasing. Concurrence by community partners from the Downtown SLO and the SLO Chamber of Commerce has been obtained through staff involvement and identified inclusion of both agencies for the review and evaluation of the submitted vendors during the RFP selection process.
ENVIRONMENTAL REVIEW
Environmental review for construction of the kiosk was considered by the Council during the June 20, 2023 City Council meeting. The recommended action to release an RFP and execute a contract and lease with the selected vendor is not subject to the provisions of the California Environmental Quality Act (CEQA) because it is not a “project” as defined in CEQA Guidelines 15378.
FISCAL IMPACT
Budgeted: No Budget Year: 2025-26
Funding Identified: No
Item 6i
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fees
Other:
Total $0 $0 $0 $0
The City is currently constructing the café kiosk as part of the Mission Plaza Enhancement Project, Specification 91439-01. The cafe kiosk interior will include coiling windows, steel frame walls, concrete sub floor, sinks, connections for water, gas, electricity, and data. It will be the responsibility of the selected vendor to fund and provide interior walls, flooring, counters, appliances, interior paint, and any other tenant improvement to create the operation space at their expense. The initial café kiosk lease rate is proposed to be at $2.50/sf per month for the 138-sf kiosk space and a flat fee of $500 per month for the 885-sf outdoor dining zone. The City will provide the outdoor tables and chairs, any additions will be the responsibility of the vendor. The lease amount is comparable to local rates based on a survey conducted by Economic Development in April 2025 which provided square foot ranges between $2.50 - $3.90 for similar rents/leases.
ALTERNATIVES
1. Council could decide not to approve the Request For Proposal to lease the Cafe Kiosk to a food and beverage service vendor. Should Council peruse this option, Staff request direction for alternate activation of the kiosk.
2. Council could direct modifications to the proposed vendor agreement. Council could modify lease term and/or other components of the RFP or proposed contract, such as not allow sales of alcohol.
ATTACHMENTS
A - DRAFT Request of Proposal for Food and Beverage Vendor of the Mission Café Kiosk
The City of San Luis Obispo is committed to including disabled persons in all of our services, programs and activities.
Telecommunications Device for the Deaf (805) 781-7410.
Notice Requesting Proposals for Food/Beverage Vendor Company The City of San Luis Obispo is requesting sealed proposals for a food and beverage vendor company for the Mission Plaza Café Kiosk.
All firms interested in receiving further correspondence regarding this Request for Proposals (RFP) will be required to complete a free registration using BidNet Direct (www.bidnetdirect.com/).
All proposals must be received by the City in a sealed envelope or via BidNet Direct by [DATE] at 3 p.m., when they will then be opened electronically via BidNet Direct on the proposal end date and time.
The preferred method for bid submission is electronic via BidNet Direct. However, if you wish to submit a paper copy, please submit it in a sealed envelope plainly marked “Proposal for Food and Beverage Vendor Company,” to the Department of Finance, at 990 Palm Street, San Luis Obispo, CA, 93401, at or before 3pm on [DATE]
Project packages and additional information may be obtained at the City’s BidNet Direct website at www.BidNetDirect.com.
For technical help with BidNet Direct please contact BidNet Direct tech support at 800-835-4603.
TABLE OF CONTENTS
A. INTRODUCTION......................................................................................................................................... 2 B. SCOPE OF WORK ....................................................................................................................................... 3 C. PROJECT SCHEDULE .................................................................................................................................. 4 D. PROJECT BUDGET ...................................................................................... Error! Bookmark not defined.
E. GENERAL TERMS AND CONDITIONS ......................................................................................................... 5 F. SPECIAL TERMS AND CONDITIONS....................................................ERROR! BOOKMARK NOT DEFINED.
G. FORM OF AGREEMENT.....................................................................ERROR! BOOKMARK NOT DEFINED.
H. INSURANCE REQUIREMENTS............................................................ERROR! BOOKMARK NOT DEFINED.
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A. INTRODUCTION
Background:
The City of San Luis Obispo is pleased to offer an opportunity for a well-qualified business entity to operate and maintain a café kiosk that will serve as a vibrant community hub in Mission Plaza. Mission Plaza, owned and operated by the City of San Luis Obispo, is located in the heart of downtown San Luis Obispo and serves as a dynamic center for arts, culture, history and community engagement. The Mission Plaza Enhancement Project is currently under construction and isscheduled to be completed in Fall 2025. The project will feature a new 138 sq ft interior café kiosk and an approximately 885 sq ft outdoor dining area. Mission Plaza hosts between 60 and 90 events per year, attracting attendances between 100 and 3000 per event including:
- Concerts in the Plaza (summer season)
- Holiday in the Plaza
- Children’s Day in the Plaza
- Pride in the Plaza
- Marketplace Events
- Awareness Events
- Cultural Events
- Graduations
- Weddings
Proposers must demonstrate the ability to operate a high-quality food and beverage business, clearly articulate achievable plans for an innovative and profitable operation and be in full compliance with applicable laws and regulations.
Criteria for Proposal:
In responding to this request for proposal, the proposer should provide the following:
1. The café kiosk will be constructed by the City to a degree for the selected vendor to then establish additional upgrades for the interior to be fully operational. Please provide details on what types of internal site improvements your establishment will plan for the interior of the café kiosk based on the attached plans. Provide information on the types of improvements needed and an approximate cost for the improvements to operate the service. Include the timeline for design, permits, and construction, as well as the anticipated opening for services.
2. Ability to obtain a business license from the City of San Luis Obispo.
3. Indicate the proposed hours of operation for the food/beverage service to provide community opportunities for food and beverage and activation of the plaza area.
4. Proposer must comply with California Health and Safety Code’s regulations for food vendors and San Luis County Health code requirements.
5. There is potential for the operator to be approved for the sale of alcohol. Please provide a description of
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alcohol service management in accordance with San Luis Obispo County and Alcohol Beverage Control (ABC) license requirements and regulations.
6. Ability to obtain necessary insurance certificates to cover general liability and alcohol liability, if a license to serve alcohol is planned by the proposer.
7. Ability to meet the qualifications to obtain the appropriate alcohol license (e.g., Type 41) to serve alcohol through Alcohol Beverage Control (ABC).
8. Describe the background and experience of the vendor in providing food and beverage services.
Indicate the amount of experience in alcohol sales, if applicable.
9. Provide a sample menu of the types of food that will be served and a price range. Menu may include items for breakfast, lunch, afternoon snacks and dinner which feature options to meet the wide variety of downtown clientele from locals to tourists to special events. Vendor has the ability to determine hours of operation or support during scheduled special events.
10. Describe how the food service areas will be maintained and cleaned and a high degree of customer service attained.
11. Describe how your business will operate sustainably through a commitment to proper waste separation, reusable materials, and potential operations that include less reliance on fossil fuels.
12. Provide three references with direct knowledge of the proposer’s ability to provide the service being proposed.
13. The City will consider a long-term lease agreement with the proposer, subject to negotiation of terms agreeable to both parties. Financial compensation for improvements made on site to comply with health and safety regulations may be negotiated as a part of the agreement. Proposals should indicate preliminary terms for the agreement to be given to the City, and length of the agreement.
B. SCOPE OF WORK
Lessee will be responsible for maintaining daily cleaning of the concession kiosk, surrounding area of the kiosk, and outdoor seating area. This includes proper trash disposal and securing outdoor seating area (tables and chairs) on a daily basis. Lessee is responsible for obtaining all relevant City and County health permits and licenses. Lessee will not be responsible for the maintenance of the on-site restrooms but will be required to notify the relevant City staff of any issues related to vandalism, cleanness or maintenance of the on-site restrooms and outdoor dining area as needed.
Included in the RFP is the opportunity for the proposed Lessee to design and build the interior finishing work of the Kiosk to ensure appropriate operations suitable to the submitted business plan.
City will provide water, 100-amp 120/240v single phase 3-wire panel, no circuits provided, park trash containers and dumpster (see Exhibit A for location), maintain pedestrian access areas around the concession area, and service the adjacent restrooms.
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City improvements for the café kiosk will include: (refer to Appendix A for detailed construction plan set) 138 square feet interior
Walls to be open steel stud on 6-inch concrete curb, no drywall or insulation Floor to be densified sealed concrete, slope to center floor drain Open ceiling to roof. Height at top of wall 11’-4”
Door hardware
All fixed windows with coiling counter door at each
Up to three water connection points
Floor drain with trap primer at center of floor
2 floor sinks
35 gallons per minute (GPM) floor mounted grease interceptor 1” water service with 3-each ¾” connections at walls. Exterior sheet metal serving countertops
Exterior lighting
Exterior trash enclosure for sole use by tenant
No fire sprinklers or fire protection
No hood ventilation
Electrical Service: 100 amp 120/240v single phase 3 wire panel o ¾” conduit from 4 junction boxes under slab to electric panel. No circuits provided o ¾” conduit from 3 junction boxes over head to AT&T panel. No data provided o No security or fire alarm
City improvements for the outdoor seating area (885 sf) will include:
36” x 36” Dining Height Outdoor Tables
o initial order of 6 tables and 24 chairs
Decorative picket fence enclosure: 42” in height
Trash receptacles
Lessee improvements of interior of concession kiosk will include:
Vision for workspace layout
Walls
Flooring
Service Windows
Interior counters
Storage/ Cabinets
Appliances
Gas heaters (portable, non-fixed) are allowed in outdoor seating area C. PROJECT SCHEDULE
Preliminary Schedule Tasks
Advertise RFP May 22, 2025
Questions Deadline June 23, 2025
Bid Closed June 26, 2025
Proposal Evaluation Week of July 15, 2025
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Interview Finalists July 21-31, 2025
Award Contract August 2025
TI Schedule TBD by Vendor and Public Works
D. GENERAL TERMS AND CONDITIONS
PROPOSAL REQUIREMENTS
1. Requirement to Meet All Provisions. Each individual or firm submitting a proposal (bidder) shall meet all the terms, and conditions of the Request for Proposals (RFP) project package. By virtue of its proposal submittal, the bidder acknowledges agreement with and acceptance of all provisions of the RFP specifications.
2. Proposal Submittal. Each proposal must be submitted on the form(s) provided in the specifications and accompanied by any other required submittals or supplemental materials. Proposal documents shall be submitted electronically via BidNet. However, if you can’t submit electronically, please send your bid copy in a sealed envelope to the Department of Finance, City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA, 93401. To guard against premature opening, the proposal should be clearly labeled with the proposal title, project number, name of bidder, and date and time of proposal opening. No FAX submittals will be accepted.
3. Insurance Certificate. Each proposal must include a certificate of insurance showing:
a. The insurance carrier and its A.M. Best rating.
b. Scope of coverage and limits.
c. Deductibles and self-insured retention.
The purpose of this submittal is to generally assess the adequacy of the bidder’s insurance coverage during proposal evaluation; as discussed under paragraph 12 below, endorsements are not required until contract award. The City’s insurance requirements are detailed in Section E.
4. 5. Proposal Withdrawal and Opening. A bidder may withdraw its proposal, without prejudice prior to the time specified for the proposal opening, by submitting a written request to the Director of Finance for its withdrawal, in which event the proposal will be returned to the bidder unopened. No proposal received after the time specified or at any place other than that stated in the “Notice Inviting Bids/Requesting Proposals” will be considered. All proposals will be opened and declared publicly. Bidders or their representatives are invited to be present at the opening of the proposals.
6. Submittal of One Proposal Only. No individual or business entity of any kind shall be allowed to make or file, or to be interested as the primary submitter in more than one proposal, except an alternative proposal when specifically requested; however, an individual or business entity that has submitted a subproposal to a bidder submitting a proposal, or who has quoted prices on materials to such bidder, is not thereby disqualified from submitting a sub-proposal or from quoting prices to other bidders submitting proposals.
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7. Communications. All timely requests for information submitted in writing will receive a written response from the City. Telephone communications with City staff are not encouraged but will be permitted.
However, any such oral communication shall not be binding on the City.
CONTRACT AWARD AND EXECUTION
8. Proposal Retention and Award. The City reserves the right to retain all proposals for a period of 60 days for examination and comparison. The City also reserves the right to waive non-substantial irregularities in any proposal, to reject any or all proposals, to reject or delete one part of a proposal and accept the other, except to the extent that proposals are qualified by specific limitations. See the “special terms and conditions” in Section C of these specifications for proposal evaluation and contract award criteria.
9. Competency and Responsibility of Bidder. The City reserves full discretion to determine the competence and responsibility, professionally and/or financially, of bidders. Bidders will provide, in a timely manner, all information that the City deems necessary to make such a decision.
10. Contract Requirement. The bidder to whom award is made (Lessee) shall execute a written contract/vendor lease agreement with the City within ten (10) calendar days after notice of the award.
The contract shall be made in substantially the same form adopted by the City and incorporated in these specifications.
CONTRACT PERFORMANCE
1. The City’s contract terms and conditions that Lessee will be expected to execute and be bound by are attached hereto as Exhibit B.
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E. SPECIAL TERMS AND CONDITIONS
1. Contract Award. Subject to the reservations set forth in Paragraph 9 of Section D (General Terms and Conditions) of these specifications, the contract will be awarded to the most qualified and appropriate business entity to fulfil the needs of service.
2. Sales Tax Reimbursement. For sales occurring within the City of San Luis Obispo, the City receives sales tax revenues. Therefore, for bids from retail firms located in the City at the time of proposal closing for which sales tax is allocated to the City, 1% of the taxable amount of the bid will be deducted from the proposal by the City in calculating and determining the lowest responsible, responsive proposer.
3. Labor Actions. In the event that the successful proposer is experiencing a labor action at the time of contract award (or if its suppliers or subLessees are experiencing such a labor action), the City reserves the right to declare said proposer is no longer the lowest responsible, responsive proposer and to accept the next acceptable low proposal from a proposer that is not experiencing a labor action, and to declare it to be the lowest responsible, responsive proposer.
4. Failure to Accept Contract. The following will occur if the proposer to whom the award is made (Lessee) fails to enter into the contract: the award will be annulled; any bid security will be forfeited in accordance with the special terms and conditions if a proposer's bond or security is required; and an award may be made to the next lowest responsible, responsive proposer who shall fulfill every stipulation as if it were the party to whom the first award was made.
5. Contract Extension. The term of the contract may be extended by mutual consent for an additional twoyears, and annually thereafter, for a total of four years.
6. Non-Exclusive Contract. The City reserves the right to purchase the items listed in the Detail Proposal Submittal Form, as well as any supplemental items, from other vendors during the contract term.
7. Delivery. Prices quoted for all supplies or equipment to be provided under the terms and conditions of this RFP package shall include delivery charges, to be delivered F.O.B. San Luis Obispo by the successful proposer and received by the City within 90 days after authorization to proceed by the City.
8. Start and Completion of Work. Work on this project shall begin immediately after contract execution and shall be completed within 90 calendar days thereafter, unless otherwise negotiated with City by mutual agreement.
9. Change in Work. The City reserves the right to change quantities of any item after contract award. If the total quantity of any changed item varies by 25% or less, there shall be no change in the agreed upon unit price for that item. Unit pricing for any quantity changes per item in excess of 25% shall be subject to negotiation with the Lessee.
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10. Submittal of References. Each proposer shall submit a statement of qualifications and references on the form provided in the RFP package.
11. Statement of Contract Disqualifications. Each proposer shall submit a statement regarding any past governmental agency bidding or contract disqualifications on the form provided in the RFP package.
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PROPOSAL CONTENT
1. Proposal Content. Your proposal must include the following information:
Submittal Forms
a. Proposal submittal summary.
b. Certificate of insurance.
c. References from at least three landlords, property owners, etc. for whom you have provided similar services.
Qualifications
d. Experience of your business and those of employees in offering the relevant services to the Scope of Services outlined and described in the request.
e. Experience and qualifications of the individuals who would be assigned to this concession, including any sub-Lessees, with their corollary experience highlighted and specific roles in this concessionaire clearly described.
f. Statement and explanation of any instances where your business has been removed from a previous restaurant location.
Work Program
g. Detailed business plan for operating a kiosk/concessionaire and providing services at the Mission Plaza kiosk. Describe how your business will work with Special Events held in Mission Plaza, including, for example, whether your business will support the events or close operations during the events
h. If alcohol sale is proposed, provide alcohol service management plan. i. Detailed operation plan and service schedule.
j. Estimated daily and weekly hours of operation.
k. Detailed budget by service including Lessee Improvements and lease payments. l. Timeline for implementation.
m. Services or data to be provided by the City.
n. Services and deliverables provided by the Lessee.
o. Description of assumptions critical to development of the response which may impact cost or scope
Requested Changes to Terms and Conditions
p. The City desires to begin work soon after selecting the preferred Lessee and expects the Lessee to execute the City’s lease and lease and all of the terms therein, as set forth in Exhibit B. To expedite the contracting process, each submittal shall include requested redlined changes to terms and conditions, if necessary. Please be advised that Lessee’srequested changes to the City’s terms and conditions will be considered by City staff when scoring and determining the competency and responsibility of the proposer.
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Proposal Length
q. Proposal length should only be as long as required to be responsive to the RFP, including attachments and supplemental materials.
2. Proposal Evaluation and Selection. Proposals will be evaluated by a review committee and evaluated on the following criteria:
a. Understanding of the work required by the City.
b. Quality, clarity and responsiveness of the proposal. c. Demonstrated competence and professional qualifications necessary for successfully performing the work required by the City.
d. Recent team experience in successfully performing similar services. e. Creativity of the proposed approach in completing the work. f. Value
g. References.
h. Background and experience of the specific individuals managing and assigned to this project.
Information about how your company mitigates the environmental impact of its services, such as greenhouse gas emissions, amount of waste generated, water and energy use, or other areas related to your products and services.
As reflected above, contract award will not be based solely on price, but on a combination of factors as determined to be in the best interest of the City. After evaluating the proposals and discussing them further with the finalists or the tentatively selected Lessee, the City reserves the right to further negotiate the proposed work and/or method and amount of compensation.
3. Ownership of Materials. All original drawings, plan documents and other materials prepared by or in possession of the Lessee as part of the work or services under these specifications shall become the permanent property of the City and shall be delivered to the City upon demand.
4. Release of Reports and Information. Any reports, information, data, or other material given to, prepared by or assembled by the Lessee as part of the work or services under these specifications shall be the property of the City and shall not be made available to any individual or organization by the Lessee without the prior written approval of the City.
5. Copies of Reports and Information. If the City requests additional copies of reports, drawings, specifications, or any other material in addition to what the Lessee is required to furnish in limited quantities as part of the work or services under these specifications, the Lessee shall provide such additional copies as are requested, and City shall compensate the Lessee for the costs of duplicating of such copies at the Lessee's direct expense.
6. Required Deliverable Products. The Lessee will be required to provide:
a. One electronic submission - digital-ready original .pdf of all final documents. If you wish to file a paper copy, please submit in sealed envelope to the address provided in the RFP.
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b. Corresponding computer files compatible with the following programs whenever possible unless otherwise directed by the project manager:
Word Processing: MS Word
Spreadsheets: MS Excel
Desktop Publishing: InDesign
Virtual Models: Sketch Up
Digital Maps: Geodatabase shape files in
State Plan Coordinate System as
specified by City GIS staff
c. City staff will review any documents or materials provided by the Lessee and, where necessary, the Lessee will be required to respond to staff comments and make such changes as deemed appropriate.
ALTERNATIVE PROPOSALS
7. Alternative Proposals. The proposer may submit an alternative proposal (or proposals) that it believes will also meet the City's project objectives but in a different way. In this case, the proposer must provide an analysis of the advantages and disadvantages of each of the alternative and discuss under what circumstances the City would prefer one alternative to the other(s).
8. Attendance at Meetings and Hearings. As part of the work scope and included in the contract price is attendance by the Lessee at up to [number] public meetings to present and discuss its findings and recommendations. Lessee shall attend as many "working" meetings with staff as necessary in performing work-scope tasks.
9. Accuracy of Specifications. The specifications for this project are believed by the City to be accurate and to contain no affirmative misrepresentation or any concealment of fact. Bidders are cautioned to undertake an independent analysis of any test results in the specifications, as City does not guaranty the accuracy of its interpretation of test results contained in the specifications package. In preparing its proposal, the bidder and all subLessees named in its proposal shall bear sole responsibility for proposal preparation errors resulting from any misstatements or omissions in the plans and specifications that could easily have been ascertained by examining either the project site or accurate test data in the City's possession. Although the effect of ambiguities or defects in the plans and specifications will be as determined by law, any patent ambiguity or defect shall give rise to a duty of bidder to inquire prior to proposal submittal. Failure to so inquire shall cause any such ambiguity or defect to be construed against the bidder. An ambiguity or defect shall be considered patent if it is of such a nature that the bidder, assuming reasonable skill, ability and diligence on its part, knew or should have known of the existence of the ambiguity or defect. Furthermore, failure of the bidder or subLessees to notify City in writing of specification or plan defects or ambiguities prior to proposal submittal shall waive any right to assert said defects or ambiguities subsequent to submittal of the proposal.
To the extent that these specifications constitute performance specifications, the City shall not be liable for costs incurred by the successful bidder to achieve the project’s objective or standard beyond the amounts provided there for in the proposal.
In the event that, after awarding the contract, any dispute arises as a result of any actual or alleged
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ambiguity or defect in the plans and/or specifications, or any other matter whatsoever, Lessee shall immediately notify the City in writing, and the Lessee and all subLessees shall continue to perform, irrespective of whether or not the ambiguity or defect is major, material, minor or trivial, and irrespective of whether or not a change order, time extension, or additional compensation has been granted by City.
Failure to provide the hereinbefore described written notice within one (1) working day of Lessee's becoming aware of the facts giving rise to the dispute shall constitute a waiver of the right to assert the causative role of the defect or ambiguity in the plans or specifications concerning the dispute.
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I: PROPOSAL SUBMITTAL FORM - SAMPLE
The undersigned declares that she or he:
Has carefully examined the RFP which is hereby made a part of this proposal. Is thoroughly familiar with its contents.
Is authorized to represent the proposing firm.
Agrees to perform the work as set forth in this proposal. q Certificate of insurance attached; insurance company’s A.M. Best rating: .
Firm Name and Address
Contact Phone
Signature of Authorized Representative
Date
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City of San Luis
Obispo
Specification No.
9xxxx
REFERENCES
Number of years engaged in providing the services included within the scope of the specifications under the present business name: .
Describe fully the last three contracts performed by your firm that demonstrate your ability to provide the services included with the scope of the specifications. Attach additional pages if required. The City reserves the right to contact each of the references listed for additional information regarding your firm's qualifications.
Reference No. 1:
Agency Name
Contact Name
Telephone & Email
Street Address
City, State, Zip Code
Description of services provided
including contract amount, when
provided and project outcome
Reference No. 2:
Agency Name
Contact Name
Telephone & Email
Street Address
City, State, Zip Code
Description of services provided
including contract amount, when
provided and project outcome
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City of San Luis
Obispo
Specification No.
9xxxx
Reference No. 3
Agency Name
Contact Name
Telephone & Email
Street Address
City, State, Zip Code
Description of services provided
including contract amount, when
provided and project outcome
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City of San Luis
Obispo
Specification No.
9xxxx
STATEMENT OF PAST CONTRACT DISQUALIFICATIONS
The proposer shall state whether it or any of its officers or employees who have a proprietary interest in it, has ever been disqualified, removed, or otherwise prevented from bidding on, or completing a federal, state, or local government project because of the violation of law, a safety regulation, or for any other reason, including but not limited to financial difficulties, project delays, or disputes regarding work or product quality, and if so to explain the circumstances. Do you have any disqualification as described in the above paragraph to declare? Yes q No q
If yes, explain the circumstances.
Executed on at under penalty of perjury of the laws of the State of California, that the foregoing is true and correct.
Signature of Authorized Proposer Representative
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CITY OF SAN LUIS OBISPO
AGREEMENT FOR PURCHASES OF SERVICES
This Agreement is made and entered into in the City of San Luis Obispo on ___________ , by and between the City of San Luis Obispo, a municipal corporation, hereinafter referred to as City, and ___________ , hereinafter referred to as Lessee.
W I T N E S S E T H:
WHEREAS, on [date], City requested proposals for [__________], [Remove if no RFP and use 2nd sentence below.]
WHEREAS, the City wishes to [____]; and
WHEREAS, [_____] is qualified to perform this type of service and has submitted a proposal to do so which has been accepted by City.
NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows:
NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows:
1. TERM. The term of this Agreement shall be from the date this Agreement is made and entered, as first written above, for two (2) years.
2. INCORPORATION BY REFERENCE. City Request for Proposals / Qualifications for Food and Beverage Services and Lessee's proposal are hereby incorporated in and made a part of this Agreement, attached as Exhibit A. The City’s standard terms and conditions are attached as Exhibit B. The City’s insurance requirements are hereby incorporated in and made part of this Agreement, attached as Exhibit C. To the extent that there are any conflicts between the Lessee’s fees and scope of work and the City’s terms and conditions as stated herein, the City’s terms and conditions shall prevail unless specifically agreed otherwise in writing signed by both Parties.
3. CITY'S OBLIGATIONS. City will make available the kiosk space specific to the improvements stated in Section B, where noted, “City improvements for the café kiosk will include: (refer to Appendix A for detailed construction plan set)” and “City improvements for the outdoor seating area will include:”.
4. LESSEE’S/LESSEE’S OBLIGATIONS. For and in consideration of the agreements hereinbefore mentioned to be made and performed by City, Lessee agrees with City to do everything required by sections 1 – 3 of Lessee proposal set forth in Exhibit B.
5. AMENDMENTS. Any amendment, modification or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the City Manager.
6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement, understanding or representation not reduced to writing and specifically incorporated
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herein shall be of any force or effect, nor shall any such oral agreement, understanding or representation be binding upon the parties hereto.
7. GOVERNING LAW. Any action arising out of this Agreement shall be brought in the Superior Court of San Luis Obispo County, California, regardless of where else venue may lie. The validity, interpretation, construction and performance of this Agreement, and all acts and transactions pursuant hereto and the rights and obligations of the Parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.
8. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows:
City City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Attn:
Lessee
9. AUTHORITY TO EXECUTE AGREEMENT. Both City and Lessee do covenant that everyone executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written.
CITY OF SAN LUIS OBISPO:
By:_____________________________________
City Manager
APPROVED AS TO FORM: LESSEE:
________________________________ By: _____________________________________ City Attorney Name of CAO / President
Its: CAO / President
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EXHIBIT A
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EXHIBIT B
GENERAL TERMS AND CONDITIONS
1. Business License & Tax. The Contractor must have a valid City of San Luis Obispo business license & tax certificate before execution of the contract. Additional information regarding the City’s business tax program may be obtained by calling (805) 781-7134.
2. Ability to Perform. The Contractor warrants that it possesses, or has arranged through subcontracts, all capital and other equipment, labor, materials, and licenses necessary to carry out and complete the work hereunder in compliance with all federal, state, county, city, and special district laws, ordinances, and regulations.
3. Laws to be Observed. The Contractor shall keep itself fully informed of and shall observe and comply with all applicable state and federal laws and county and City of San Luis Obispo ordinances, regulations and adopted codes during its performance of the work.
4. Payment of Taxes. The contract prices shall include full compensation for all taxes that the Contractor is required to pay.
5. Permits and Licenses. The Contractor shall procure all permits and licenses, pay all charges and fees, and give all notices necessary.
6. Safety Provisions. The Contractor shall conform to the rules and regulations pertaining to safety established by OSHA and the California Division of Industrial Safety.
7. Public and Employee Safety. Whenever the Contractor’s operations create a condition hazardous to the public or City employees, it shall, at its expense and without cost to the City, furnish, erect and maintain such fences, temporary railings, barricades, lights, signs and other devices and take such other protective measures as are necessary to prevent accidents or damage or injury to the public and employees.
8. Preservation of City Property. The Contractor shall provide and install suitable safeguards, approved by the City, to protect City property from injury or damage. If City property is injured or damaged resulting from the Contractor’s operations, it shall be replaced or restored at the Contractor’s expense. The facilities shall be replaced or restored to a condition as good as when the Contractor began work.
9. Immigration Act of 1986. The Contractor warrants on behalf of itself and all
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subcontractors engaged for the performance of this work that only persons authorized to work in the United State pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of the work hereunder.
10. Non-Discrimination. In the performance of this work, the Contractor agrees that it will not engage in, nor permit such subcontractors as it may employ, to engage in discrimination in employment of persons because of age, race, color, sex, national origin or ancestry, sexual orientation, or religion of such persons.
11. Work Delays. Should the Contractor be obstructed or delayed in the work required to be done hereunder by changes in the work or by any default, act, or omission of the City, or by strikes, fire, earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or labor due to federal government restrictions arising out of defense or war programs, then the time of completion may, at the City’s sole option, be extended for such periods as may be agreed upon by the City and the Contractor. In the event that there is insufficient time to grant such extensions prior to the completion date of the contract, the City may, at the time of acceptance of the work, waive liquidated damages that may have accrued for failure to complete on time, due to any of the above, after hearing evidence as to the reasonsfor such delay, and making a finding as to the causes of same.
12. Inspection. The Contractor shall furnish City with every reasonable opportunity for City to ascertain that the services of the Contractor are being performed in accordance with the requirements and intentions of this contract. All work done, and all materials furnished, if any, shall be subject to the City’s inspection and approval. The inspection of such work shall not relieve Contractor of any of its obligations to fulfill its contract requirements.
13. Interests of Contractor. The Contractor covenants that it presently has no interest, and shall not acquire any interest—direct, indirect or otherwise—that would conflict in any manner or degree with the performance of the work hereunder. The Contractor further covenants that, in the performance of this work, no subcontractor or person having such an interest shall be employed. The Contractor certifies that no one who has or will have any financial interest in performing this work is an officer or employee of the City. It is hereby expressly agreed that, in the performance of the work hereunder, the Contractor shall at all times be deemed an independent Contractor and not an agent or employee of the City.
14. Hold Harmless and Indemnification.
(a) Non-design, non-construction Professional Services: To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), Consultant shall indemnify, defend, and hold harmless the City, and its elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Consultant’s performance or Consultant’s failure to perform its obligations under this Agreement or out of the operations conducted by Consultant, including the City’s active or passive negligence, except for such loss or damage arising from the sole negligence or willful misconduct of the City. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims.
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(b) Non-design, construction Professional Services: To the extent the Scope of Services involve a “construction contract” as that phrase is used in Civil Code Section 2783, this paragraph shall apply in place of paragraph A. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), Consultant shall indemnify, defend, and hold harmless the City, and its elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Consultant’s performance or Consultant’s failure to perform its obligations under this Agreement or out of the operations conducted by Consultant, except for such loss or damage arising from the active negligence, sole negligence or willful misconduct of the City. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. (c) Design Professional Services: In the event Consultant is a “design professional”, and the Scope of Services require Consultant to provide “design professional services” as those phrases are used in Civil Code Section 2782.8, this paragraph shall apply in place of paragraphs A or B. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8) Consultant shall indemnify, defend and hold harmless the City and its elected officials, officers, employees, volunteers and agents (“City Indemnitees”), from and against all claims, damages, injuries, losses, and expenses including costs, attorney fees, expert consultant and expert witness fees arising out of, pertaining to or relating to, the negligence, recklessness or willful misconduct of Consultant, except to the extent caused by the sole negligence, active negligence or willful misconduct of the City.
Negligence, recklessness or willful misconduct of any subcontractor employed by Consultant shall be conclusively deemed to be the negligence, recklessness or willful misconduct of Consultant unless adequately corrected by Consultant. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. In no event shall the cost to defend charged to Consultant
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under this paragraph exceed Consultant’s proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, Consultant shall meet and confer with other parties regarding unpaid defense costs.
(d) The review, acceptance or approval of the Consultant’s work or work product by any indemnified party shall not affect, relieve or reduce the Consultant’s indemnification or defense obligations. This Section survives completion of the services or the termination of this contract. The provisions of this Section are not limited by and do not affect the provisions of this contract relating to insurance. Contractor’s indemnification obligations under this section extend to any claims arising out of or related to the negligence, recklessness, or willful misconduct of any sub-consultants/ subcontractors.
15. Contract Assignment. The Contractor shall not assign, transfer, convey or otherwise dispose of the contract, or its right, title or interest, or its power to execute such a contract to any individual or business entity of any kind without the previous written consent of the City.
16. Safe Harbor. Contractor/Consultant’s duties and services under this agreement shall not include preparing or assisting the public entity with any portion of the public entity’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with the public entity. The public entity entering this agreement shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. Contractor/consultant’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications.
Contractor/consultant shall cooperate with the public entity to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by Contractor pursuant to this agreement.”
17. Termination for Convenience. The City may terminate all or part of this Agreement for any or no reason at any time by giving 30 days written notice to Contractor. Should the City terminate this Agreement for convenience, the City shall be liable as follows: (a) for standard or off-the-shelf products, a reasonable restocking charge not to exceed ten (10) percent of the total purchase price; (b) for custom products, the less of a reasonable price for the raw materials, components work in progress and any finished units on hand or the price per unit reflected on this Agreement. For termination of any services pursuant to this Agreement, the City’s liability will be the lesser of a reasonable price for the services rendered prior to termination, or the price for the services reflected on this Agreement. Upon termination notice from the City, Contractor must, unless otherwise directed, cease work and follow the City’s directions as to work in progress and finished goods.
18. Termination. If, during the term of the contract, the City determines that the Contractor is not faithfully abiding by any term or condition contained herein, the City may notify the Contractor in writing of such defect or failure to perform. This notice must give the Contractor a 10 (ten) calendar day notice of time thereafter in which to perform said work or cure the deficiency.
If the Contractor has not performed the work or cured the deficiency within the ten days specified in the notice, such shall constitute a breach of the contract and the City may terminate the contract immediately by written notice to the Contractor to said effect. Thereafter, neither party shall have any further duties, obligations, responsibilities, or rights under the contract except, however, any and all
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obligations of the Contractor’s surety shall remain in full force and effect, and shall not be extinguished, reduced, or in any manner waived by the terminations thereof.
In said event, the Contractor shall be entitled to the reasonable value of its services performed from the beginning date in which the breach occurs up to the day it received the City’s Notice of Termination, minus any offset from such payment representing the City’s damages from such breach. “Reasonable value” includes fees or charges for goods or services as of the last milestone or task satisfactorily delivered or completed by the Contractor as may be set forth in the Agreement payment schedule; compensation for any other work, services or goods performed or provided by the Contractor shall be based solely on the City’s assessment of the value of the work-in-progress in completing the overall work scope.
The City reserves the right to delay any such payment until completion or confirmed abandonment of the project, as may be determined in the City’s sole discretion, so as to permit a full and complete accounting of costs. In no event, however, shall the Contractor be entitled to receive in excess of the compensation quoted in its proposal
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EXHIBIT C - INSURANCE REQUIREMENTS
Facility Use – Concessions
The Lessee shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Lessee, its agents, representatives, employees or subLessees.
Minimum Scope of Insurance. Coverage shall be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001).
2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto).
3. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance.
Minimum Limits of Insurance. Lessee shall maintain limits no less than:
1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. If alcohol is sold, coverage must include full liquor liability.
2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage.
3. Employer's Liability: $1,000,000 per accident for bodily injury or disease.
Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Lessee shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.
Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions:
1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Lessee; products and completed operations of the Lessee; premises owned, occupied or used by the Lessee; or automobiles owned leased, hired or borrowed by the Lessee. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers.
2. For any claims related to this project, the Lessee's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Lessee's insurance and shall not contribute with it.
3. The Lessee's insurance shall apply separately to each insured against whom claim is made or
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suit is brought, except with respect to the limits of the insurer's liability.
4. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty
(30) days' prior written notice by certified mail, return receipt requested, has been given to the City.
Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII.
Verification of Coverage. Lessee shall furnish the City with a certificate of insurance showing required coverage. Original endorsements effecting general liability and automobile liability coverage are also required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences.
SubLessees. Lessee shall include all subLessees as insured under its policies or shall furnish separate certificates and endorsements for each subLessee. All coverages for subLessees shall be subject to all of the requirements stated herein.
City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: May 20, 2025
TO: Mayor and Council
FROM: Matt Horn, Public Works Director
PREPARED BY: Greg Cruce, Deputy Director – Maintenance Operations VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 7a – REVIEW THE PROCESS FOR ISSUING NOTICE TO
CORRECT TO PRIVATE PROPERTY OWNERS FOR UNSAFE
SIDEWALK OR FRONTAGE CONDITIONS, AND AUTHORIZE STAFF TO
ISSUE NOTICES TO CORRECT
Staff received the following question regarding Notices to Correct for unsafe sidewalk or frontage conditions. The questions are below with staff’s response shown in italics:
1) Have any properties completed the required repairs since the City Council Agenda packet was routed?
At the time of report routing for the 5/20/2025 City Council Meeting agenda packet, eight properties had unresolved Notices to Correct for unsafe sidewalk or frontage improvements. Since the report was routed, the properties at 360 Chorro, 368 Chorro, and 3195 South Higuera have corrected the conditions by replacing the damaged sections of sidewalk. The frontage improvement conditions for the following five properties remain unchanged:
878 Islay Street
Notice to Correct Agenda Correspondence Page 2
859 Mission St. 867 Mission St.
875 Mission Street 1543 Morro Street
Item 7a
Department: Public Works
Cost Center: 5006
For Agenda of: 5/20/2024
Placement: Business
Estimated Time: 45
FROM: Matt Horn, Public Works Director
Prepared By: Greg Cruce, Deputy Director – Maintenance Operations SUBJECT: REVIEW THE PROCESS AND PROCEDURE FOR ISSUING NOTICES
TO CORRECT TO PRIVATE PROPERTY OWNERS FOR UNSAFE
SIDEWALK OR FRONTAGE CONDITIONS, AND AUTHORIZE STAFF TO
ISSUE NOTICES TO CORRECT TO SPECIFIC PRIVATE PROPERTY
OWNERS FOR THE DETERIORATED CONDITIONS OF FRONTAGES
RECOMMENDATION
1. Adopt a Draft Resolution formalizing the City’s procedures for issuing Informal and Formal Notices to Correct for sidewalk and frontage improvement deficiencies; and
2. Adopt a Draft Resolution approving the issuance of Formal Notices to Correct to the property owners of 360 Chorro Street, 368 Chorro Street, 878 Islay Street, 859 Mission Street, 867 Mission Street, 875 Mission Street, and 1543 Morro Street, and authorizing the City to execute the required work if the property owner fails to commence the work within 14 days after the first Formal Notice to Correct is sent; and
3. Authorize the Public Works Director to waive issuance of a Formal Notice to Correct if the property owner takes corrective action before the notice is formally issued.
4. Appropriate $178,102 from the CIP Reserves to fund the sidewalk reconstruction work.
POLICY CONTEXT
Section 12.16.020 of the City of San Luis Obispo Municipal Code incorporates Division 7, Part 3, Chapter 22 of the California Streets and Highways Code. Pursuant to this Code, property owners whose lots front any portion of a public street or place — or abut an area maintained as a park or parking strip between the property line and the street — are responsible for maintaining the adjacent sidewalks. Property owners must ensure that sidewalks are kept in a condition that does not endanger persons or property and does not interfere with the public's convenient use of these areas. This obligation applies except where a condition has been created or maintained by another party acting under a legal right, permit, or authorization granted by the City, in which case that party assumes the responsibility for maintenance.
Item 7a
In 2013, the City Council adopted a formal Sidewalk Inspection Program that established a practice of inspecting the City’s sidewalks on a regular basis, thresholds for damaged sidewalks that require repair or replacement, and prescriptive measures for correction of identified conditions. Council authorization is not required for issuance of a formal Notice of Correction. However, once the formal Notice is issued, the Streets & Highways Code § 5614 removes much of the City’s discretion regarding the subsequent timeline and procedural requirements – for both the property owner and the City – so staff is seeking authorization from the Council to proceed. The timeline, required procedures, and voluntary procedures are discussed in more detail in the background section of this report.
The City maintains a Capital Projects Reserve Fund in the amount of 20% of capital improvement plan budget from the Local Revenue Measure for the purposes of offsetting unanticipated cost increases, unforeseen conditions, and urgent unanticipated projects to provide continued investment in infrastructure maintenance and enhancement. Use and allocations of funds from the Capital Projects Reserve Fund will be made to Capital Projects including Major Facility Replacement upon Council approval as necessary during any fiscal year.
REPORT-IN-BRIEF
This report provides a summary of the City’s efforts to address sidewalk deficiencies on private property, in accordance with San Luis Obispo Municipal Code Section 12.16.020 and the California Streets & Highways Code. City staff are requesting Council authorization to issue Formal Notices to Correct for eight properties with unresolved sidewalk hazards. These locations have been the subject of repeated community complaints and were found to contain substantial damage that presents risks to public safety and legal liability to the City.
Staff have made extensive efforts to achieve voluntary compliance, issuing at least two Informal Notices to each property owner and offering flexible timelines to complete the work. In some cases, outreach began as early as 2021. Despite these efforts, the required repairs or replacements have not been completed. The eight sidewalk segments are located throughout the City and represent a total estimated repair cost of $178,102. If the work is not completed by the property owners following issuance of a Formal Notice, in compliance with the Streets & Highway Code the City needs to complete the repairs and consider cost recovery through a future public hearing.
This report also outlines the City’s informal and formal sidewalk correction procedures, consistent with the Streets & Highways Code §§ 5610–5618 and §§ 5625–5629. If authorized, staff will initiate formal noticing, and, if necessary, complete the work and return to Council to affirm the costs and place liens on affected parcels. Funding for this work is proposed from the City’s CIP Reserve account. All recovered costs will be returned to the reserve fund upon collection.
The City prioritizes voluntary compliance as the first step in addressing sidewalk deficiencies. Because the California Streets and Highways Code establishes specific procedures and timelines once a Formal Notice to Correct (NOC) is issued, the City