San Luis Obispo City Council
May 20, 2025

City Council
AGENDA

Tuesday, May 20, 2025, 5:30 p.m.

Council Chambers, 990 Palm Street, San Luis Obispo
Council meetings may be viewed remotely on Channel 20, the City’s YouTube Channel, and on the City’s website under the Public Meeting Agendas web page. Attendees of City Council or Advisory Body meetings are eligible to receive one hour of complimentary parking; restrictions apply, visit Parking for Public Meetings for more details.

INSTRUCTIONS FOR PUBLIC COMMENT:

Public Comment prior to the meeting (must be received 3 hours in advance of the meeting):

Mail - Delivered by the U.S. Postal Service. Address letters to the City Clerk's Office at 990 Palm Street, San Luis Obispo, California, 93401.

Email - Submit Public Comments via email to [email protected]. In the body of your email, please include the date of the meeting and the item number (if applicable). Emails will not be read aloud during the meeting.

Voicemail - Call (805) 781-7164 and leave a voicemail. Please state and spell your name, the agenda item number you are calling about, and leave your comment. Verbal comments must be limited to 3 minutes. Voicemails will not be played during the meeting. *All correspondence will be archived and distributed to councilmembers, however, submissions received after the deadline may not be processed until the following day.

Public Comment during the meeting:

Meetings are held in-person. To provide public comment during the meeting, you must be present at the meeting location.

Electronic Visual Aid Presentation. To conform with the City's Network Access and Use Policy, Chapter 1.3.8 of the Council Policies & Procedures Manual, members of the public who desire to utilize electronic visual aids to supplement their oral presentation must provide display-ready material to the City Clerk by 12:00 p.m. on the day of the meeting. Contact the City Clerk's Office at [email protected] or (805) 781-7114.

Pages

1. CLOSED SESSION (4:45 PM - 5:30 PM)

1.a CALL TO ORDER
Mayor Erica A. Stewart will call the Closed Session of the San Luis Obispo City Council to order at 4:45 p.m. in the Council Hearing Room at City Hall, 990 Palm Street, San Luis Obispo.

1.b PUBLIC COMMENT FOR CLOSED SESSION ITEMS ONLY
Public Comment will only be accepted for items listed on the Closed Session agenda.

1.c CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Initiation of litigation pursuant to paragraph (4) of subdivision (d) of California Government Code Section 54956.9. No. of potential cases:

One.

2. CALL TO ORDER
Mayor Erica A. Stewart will call the Regular Meeting of the San Luis Obispo City Council to order.

3. PLEDGE OF ALLEGIANCE
Mayor Erica A. Stewart will lead the Council in the Pledge of Allegiance.

4. PRESENTATIONS

4.a ALS AWARENESS MONTH PROCLAMATION
Mayor Stewart will present a proclamation declaring May as "ALS Awareness Month".

4.b CITY MANAGER REPORT
Receive a brief report from City Manager Whitney McDonald.

5. PUBLIC COMMENT PERIOD FOR ITEMS NOT ON THE AGENDA
Not to exceed 15 minutes. The Council welcomes your input. State law does not allow the Council to discuss or take action on issues not on the agenda, except that members of the Council or staff may briefly respond to statements made or questions posed by persons exercising their public testimony rights (Gov. Code sec. 54954.2). Staff may be asked to follow up on such items.

6. CONSENT AGENDA
Not to exceed 15 minutes. Matters appearing on the Consent Calendar are expected to be non-controversial and will be acted upon at one time. A member of the public may request the Council to pull an item for discussion. Pulled items shall be heard at the close of the Consent Agenda unless a majority of the Council chooses another time. The public may comment on any and all items on the Consent Agenda within the three-minute time limit.

Recommendation:

To approve Consent Calendar Items 5a to 5j.

6.a WAIVE READING IN FULL OF ALL RESOLUTIONS AND

ORDINANCES
Recommendation:

Waive reading of all resolutions and ordinances as appropriate.

6.b MINUTES REVIEW - APRIL 29, 2025, APRIL 30, 2025, AND MAY 6, 2025 COUNCIL MINUTES
13 Recommendation:

Approve the following minutes of the City Council:
• April 29, 2025 - Special Meeting
• April 30, 2025 - Special Closed Session Meeting
• May 6, 2025 - Regular Meeting

6.c FY 2024-25 Q3 BUDGET REPORT 27
Recommendation:

Receive and file the FY 2024-25 Q3 Budget Report.

6.d APPROVE A THREE-YEAR CONTRACT RENEWAL FOR
MICROSOFT OFFICE 365 GOVERNMENT PLAN SUBSCRIPTION

LICENSES
59 Recommendation:

Approve a three-year contract renewal for Microsoft Office 365 Government Plan subscription licenses; and

1. Per Municipal Code 3.24.060E, authorize waiver of formal bids to purchase Microsoft Office 365 subscription licenses through the cooperative agreement under the Licensed Support
Provider (LSP) Agreement No IT ARC-00934 for Microsoft
products and services under Microsoft Enterprise Agreement (EA) – 8084445 between the County of Riverside and Dell Marketing, L.P.; or below the cooperative purchasing net cost within the same terms and conditions; and

2. Authorize the City Manager to approve related Purchase Order Requisitions through the duration of the agreement.

3. 6.e AUTHORIZATION TO ADVERTISE THE RIGHETTI COMMUNITY PARK PROJECT, SPECIFICATION NO. 2000054
65 Recommendation:

Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing Various Fund Reappropriations and Transfers to Support the Righetti Community Park Project, Specification Number
2000054, and approving an Addendum to the Orcutt Area
Specific Plan Environmental Impact Report for the Righetti Community Park Project.”

1. Approve the Project Plans and Special Provisions for the Righetti Community Park, Specification 2000054; and,

2. 3. Authorize staff to advertise for bids; and,
Authorize the City Manager to award the Construction Contract pursuant to Section 3.24.190 of the Municipal Code, if the lowest responsible bid is within the Engineer’s Base Bid Estimate of $9,950,000; and,

4. Authorize the City Engineer to issue Contract Change Orders, provided they remain within the approved project budget or any amended budget subsequently authorized by the City Manager; and,

5. 1. Authorize the Finance Director to:

Transfer funds to the Righetti Community Park Capital
Project (Account No. 2000054) from the Development
Related Park Improvements project (Account No.
2000057 – Orcutt Area Tasks), as follows:
a.
$304,637 in Capital Outlay Funds (LRM) from
Account No. 2000057-00
i.
ii. $3,987,138 in Capital Outlay Funds (LRM) from
Account No. 2000057-02
$1,558,970.27 in Orcutt Area Specific Plan
(OASP) Park Improvement Funds from Account
No. 2000057-03
iii.
$19,802.04 in OASP Park Improvement Funds
from Account No. 2000057-03
iv.
$14,850.80 in OASP Park Improvement Funds
from Account No. 2000057-04
v.
$783,512.85 in Capital Outlay Funds (LRM) from
Account No. 2000057-05
vi.
$500,000 in OASP Park Improvement Funds
from Account No. 2000057-05
vii.

Disappropriate $1,136,522 in Park Improvement
Impact Fee – Citywide Fund back to the fund’s
unallocated balance, as follows:
$836,522 from Account No. 2000057-02
$300,000 from Account No. 2000057-04
b.

Disappropriate $180,197.96 in OASP Park
Improvement Funds from the Development Related
Park Improvements project (Account No. 2000057-
03), which was overcommitted
c.

Approve the Addendum to the Orcutt Area Specific Plan Final Environmental Impact Report

6. 6.f 2025 WATER SUPPLY AND DEMAND ASSESSMENT 89
Recommendation:

Receive and file the City’s 2025 Water Supply and Demand Assessment

6.g AUTHORIZE EXECUTION OF OPEN-LOOP PAYMENT SYSTEM
AGREEMENTS AND AN AMENDMENT TO SB 125 COOPERATIVE

AGREEMENT WITH SLOCOG FOR REIMBURSEMENT OF COSTS
175
Recommendation:

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

1. 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

2. Authorize execution of an agreement with Kuba, Inc. for procurement, installation, and warranty of payment acceptance devices; and

3. Authorize execution of an agreement with Kuba Inc. for ongoing support services for payment acceptance devices; and

4. Authorize execution of an agreement with Littlepay, Inc. for transit processor services; and

5. Authorize execution of an agreement with Token Transit, Inc. for integration and ongoing support of digital pass and fare purchases; and

6. Authorize the Finance Director to negotiate and execute an agreement with Elavon, Inc. for merchant processing services as part of the system configuration process.

7. 6.h ACCEPTANCE OF THE FEDERAL SINGLE AUDIT FOR FISCAL YEAR 2023-24
239
Recommendation:

Review and accept the Federal Single Audit Report for Fiscal Year 2023-24.

6.i AUTHORIZE RELEASE OF RFP FOR MISSION PLAZA CAFÉ KIOSK 263 Recommendation:

Authorize the release of a Request for Proposal for a food and beverage vendor at the Mission Plaza; and

1. 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.

2. 7. PUBLIC HEARING AND BUSINESS ITEMS

7.a 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
297
Recommendation:

Adopt a Draft Resolution formalizing the City’s procedures for issuing Informal and Formal Notices to Correct for sidewalk and frontage improvement deficiencies; and

1. 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

2. 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.

3. Appropriate $178,102 from the CIP Reserves to fund the sidewalk reconstruction work.

4. 7.b CONSIDER CREATING A COMMITTEE TO REVIEW THE CITY'S

ELECTION CAMPAIGN REGULATIONS AND/OR COUNCIL AND

ADVISORY BODY COMPENSATION
543
Recommendation:

Discuss and provide direction on the following:

1. Election Campaign Regulations:

Form an Election Campaign Regulations Committee to
review whether the maximum allowable contribution should be increased to $500 to align with Senate Bill 1243 (Dodd); a.

Or direct staff to return in April 2026 with an Ordinance amending Section 2.40.040 of the Municipal Code to
increase the maximum allowable contribution from $250 to $500;
b.

Or defer the appointment of an Election Campaign
Regulations Committee and leave the maximum allowable
contribution unchanged.
c.

2. Council and Advisory Body Compensation:

Form a Council Compensation Committee to review the full Council compensation package and compensation for
Planning Commission and Architectural Review
Commission members, and make recommendations to the
City Council no later than May 1, 2026;
a.

Or direct staff to return in April 2026 with an increase to Council compensation consistent with the Council Policies and Procedures (CP&P 2.1.1) authorization to provide
Consumer Price Index (CPI) increases to Council,
Planning Commission, and Architectural Review
Commission salaries without appointing a Council
Compensation Committee.
b.

Or defer the appointment of a Council Compensation
Committee and leave the compensation package
unchanged.
c.

8. LIAISON REPORTS AND COMMUNICATIONS
Not to exceed 15 minutes. Council Members report on subcommittee assignments, listed below, and other City activities. At this time, any Council Member or the City Manager may ask a question for clarification, make an announcement, or report briefly on their activities. In addition, subject to Council Policies and Procedures, they may provide a reference to staff or other resources for factual information, request staff to report back to the Council at a subsequent meeting concerning any matter or take action to direct staff to place a matter of business on a future agenda. (Gov. Code Sec. 54954.2) Mayor
Stewart
Vice Mayor
Shoresman
Council Member
Boswell
Council Member
Francis
Council
Member Marx
SLO Council of
Governments
Zone 9 Advisory
Committee
Airport Land Use Nacimiento Water
Project
Air Pollution
Control District
Regional
Economic Action
Coalition
Downtown
Association
Board
SLO Climate
Coalition
Community
Action
Partnership
Integrated
Waste
Management
Authority
CA Men’s
Colony Advisory
Committee
Homeless
Services
Oversight
Committee
Local Agency
Formation
Commission
County Water
Resources
Advisory
Committee
Performing Arts
Center
Commission
CP Campus
Planning
Committee
SLO Regional
Transit Authority
Visit SLO
County Advisory
Committee
Central Coast
Clean Energy

9. ADJOURNMENT
The next Regular Meeting of the City Council will be held on June 3, 2025 at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.

LISTENING ASSISTIVE DEVICES for the hearing impaired - see the Clerk.

The City of San Luis Obispo wishes to make all of its public meetings accessible to the public. Upon request, this agenda will be made available in appropriate alternative formats to persons with disabilities. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should direct such request to the City Clerk’s Office at (805) 781-7114 at least 48 hours before the meeting, if possible. Telecommunications Device for the Deaf (805) 781-7410.

City Council meetings are televised live on Charter Channel 20 and the City's YouTube Channel: www.youtube.com/CityofSanLuisObispo. Agenda related writings or documents provided to the City Council are available for public inspection in the City Clerk’s Office located at 990 Palm Street, San Luis Obispo, California during normal business hours, and on the City’s website https://www.slocity.org/government/mayor-and-city-council/agendas-andminutes. Persons with questions concerning any agenda item may call the City Clerk’s Office at (805) 781-7114.

1 Council Minutes
April 29, 2025, 5:30 p.m.

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

Present:

Council Member Mike Boswell, Council Member Emily Francis, Council Member Jan Marx, Vice Mayor Michelle Shoresman, Mayor Erica A. Stewart
City Staff Present: City Manager Whitney McDonald, Christine Dietrick, City Attorney, Teresa Purrington, City Clerk
_____________________________________________________________________

1. CLOSED SESSION (5:00 - 5:30 PM)

1.a CALL TO ORDER
Mayor Erica A. Stewart called the Closed Session of the San Luis Obispo City Council to order at 5:00 p.m. in the Council Hearing Room at City Hall, 990 Palm Street, San Luis Obispo with all Council Members present.

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

None
---End of Public Comment---

1.c CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Action: City Attorney Christine Dietrick announced.that the Council met in Closed Session on one matter regarding existing litigation (San Luis Obispo Property and Business Owners Association, Leslie Halls v. City of San Luis Obispo, San Luis Obispo City Council; Smart Share Housing Solutions, a corporation, San Luis Obispo Superior Court Case No. 25CV0212.). Council on a motion by Vice Mayor Shoresman and seconded by Mayor Stewart (with a 5 - 0 vote) to authorize the defense of the action and to retain Ty Green to jointly represent Smart Share Housing Solution and the city. There was no further action taken.

1.d ADJOURNMENT

2 Closed session adjourned at 5:30 p.m. to the City Council Special Meeting of April 29, 2025 at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.

2. CALL TO ORDER
Mayor Stewart called to order a Special Meeting on April 29, 2025 at 5:35 p.m. in the Council Chambers, 990 Palm Street, San Luis Obispo, with all Council Members present.

3. PLEDGE OF ALLEGIANCE
Council Member Boswell led the Council in the Pledge of Allegiance.

4. PRESENTATION

4.a NATIONAL DAY OF PRAYER PROCLAMATION
Mayor Stewart presented a proclamation declaring May 1st as the "National Day of Prayer" to Pastor Doug Pittam.

5. PUBLIC COMMENT FOR ITEMS ON THE AGENDA ONLY

6. CONSENT AGENDA

6.a AUTHORIZE A TAX EXCHANGE AGREEMENT WITH THE COUNTY OF

SAN LUIS OBISPO TO ADDRESS TAX TRANSFERS FROM SLACK
STREET AND HATHWAY DETACHMENT NO. 04 (CAL POLY VISTA

MEADOWS)
Vice Mayor Shoresman requested that the item be pulled from the Consent Agenda.

Public Comments:

William Thoma
---End of Public Comment---
Motion By Vice Mayor Shoresman
Second By Council Member Francis
Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, accepting a negotiated exchange of Tax Revenue and annual tax increment between the County of San Luis Obispo and the City of San Luis Obispo for Detachment #04 (Slack Street and Hathway) from the City of San Luis Obispo.”

3 Ayes (5): Council Member Boswell, Council Member Francis, Council Member Marx, Vice Mayor Shoresman, and Mayor Stewart
CARRIED (5 to 0)

7. BUSINESS ITEM

7.a INTRODUCTION OF THE 2025-27 WATER AND SEWER RATES AND AUTHORIZATION TO RELEASE THE ASSOCIATED PROPOSITION 218 NOTICE (Estimated Time: 60 minutes)
Utilities Director Aaron Floyd and Utilities Business Manager Julie Ridgeway provided an in-depth staff report and responded to Council questions.

Public Comments:

None
---End of Public Comment---
Motion By Mayor Stewart
Second By Council Member Boswell

1. Direct the publication and mailing of a notice consistent with Article XIII D of the California Constitution and the Proposition 218 Omnibus Implementation Act (Prop 218) as it relates to water and sewer rates; and

2. Set two Public Hearing dates on June 17, 2025, to consider the adoption of updated water and sewer rates if there is no majority protest in accordance with Prop 218.

Ayes (5): Council Member Boswell, Council Member Francis, Council Member Marx, Vice Mayor Shoresman, and Mayor Stewart
CARRIED (5 to 0)

8. ADJOURNMENT
The meeting was adjourned at 6:59 p.m. The City Council will hold a Special Closed Session Meeting on April 30, 2025 at 10:00 a.m. in the Council Hearing Room at City Hall. The next Regular Meeting of the City Council will be held on May 6, 2025 at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.

APPROVED BY COUNCIL: XX/XX/202X

1 Council Minutes
April 30, 2025, 10:00 a.m.

Council Hearing Room, 990 Palm Street, San Luis Obispo
Council Members

Present:

Council Member Mike Boswell, Council Member Emily Francis, Council Member Jan Marx, Vice Mayor Michelle Shoresman, Mayor Erica A. Stewart
City Staff Present: City Manager Whitney McDonald, Christine Dietrick, City Attorney, Teresa Purrington, City Clerk
_____________________________________________________________________

1. CALL TO ORDER
A Special Closed Session Meeting of the San Luis Obispo City Council was called to order on April 30, 2025 at 10:00 a.m. in the Council Hearing Room at City Hall, 990 Palm Street, San Luis Obispo, by Mayor Stewart.

2. PUBLIC COMMENT FOR ITEMS ON THE AGENDA ONLY
Public Comment:

None
--End of Public Comment--

3. CLOSED SESSION ITEMS

3.a PUBLIC EMPLOYEE PERFORMANCE EVALUATION

3.a.1 CONFERENCE WITH LABOR NEGOTIATORS
ACTION: No reportable action taken.

3.b PUBLIC EMPLOYEE PERFORMANCE EVALUATION

3.b.1 CONFERENCE WITH LABOR NEGOTIATORS
ACTION: No reportable action taken.

3.c PUBLIC EMPLOYEE PERFORMANCE EVALUATION

3.c.1 CONFERENCE WITH LABOR NEGOTIATORS
ACTION: No reportable action taken.

2 4. ADJOURNMENT
The meeting was adjourned at 1:00 PM. The next Regular Meeting of the City Council will be held on May 6, 2025 at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.

APPROVED BY COUNCIL: XX/XX/202X

1 Council Minutes
May 6, 2025, 5:30 p.m.

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

Present:

Council Member Mike Boswell, Council Member Emily Francis, Council Member Jan Marx, Vice Mayor Michelle Shoresman, Mayor Erica A. Stewart
City Staff Present: City Manager Whitney McDonald, Christine Dietrick, City Attorney, Teresa Purrington, City Clerk
_____________________________________________________________________

1. LAGUNA MIDDLE SCHOOL COMMUNITY SERVICE AWARDS
PRESENTATION (5:00 - 5:30 PM)
The City Council recognized Laguna Middle School students who completed 30 hours or more of community service.

2. CALL TO ORDER (5:30 PM)
A Regular Meeting of the San Luis Obispo City Council was called to order on May 6, 2025 at 5:30 p.m. in the Council Chambers, 990 Palm Street, San Luis Obispo, by Mayor Stewart with all Council Members present.

3. PLEDGE OF ALLEGIANCE
Council Member Francis led the Council in the Pledge of Allegiance.

4. PRESENTATIONS

4.a NATIONAL FOSTER CARE MONTH PROCLAMATION
Mayor Stewart presented a proclamation declaring May as "National Foster Care Month" to Amanda Briley on behalf of San Luis Obispo County Department of Social Services.

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

5. PUBLIC COMMENT PERIOD FOR ITEMS NOT ON THE AGENDA
Public Comment:

None

2 --End of Public Comment--

6. CONSENT AGENDA
Motion By Mayor Stewart
Second By Council Member Francis
To approve Consent Calendar Items 6a to 6f.

Ayes (5): Council Member Boswell, Council Member Francis, Council Member Marx, Vice Mayor Shoresman, and Mayor Stewart
Recused(1): Council Member Marx (Item 6d only)
CARRIED (5 to 0)

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

6.b MINUTES REVIEW - APRIL 4, 2025, APRIL 8, 2025, AND APRIL 15, 2025

COUNCIL MINUTES
Approve the following minutes of the City Council:
 April 4, 2025 - Special Meeting (Council Retreat)
 April 8, 2025 - Special Closed Session Meeting
 April 15, 2025 - Regular Meeting

6.c ACCEPTANCE OF STATE COASTAL CONSERVANCY GRANT FUNDS

FOR VEGETATION MANAGEMENT PLAN

1. Adopt Resolution No. 11560 (2025 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Approving the Grant Funds from the State Coastal Conservancy for the ‘City of San Luis Obispo Vegetation Management Plan’”; and

2. Authorize the Mayor to sign the Resolution supporting the partnership between the City of San Luis Obispo and the State Coastal Conservancy (SCC) and delegating authority to the City Manager to accept the grant funds and sign the grant agreement and any other necessary instruments to carry out the terms of the grant; and

3. Create Project number 2001077 and transfer $50,000 from the Office of Sustainability and Natural Resources Contract Services

3 account to the project budget in the Capital Outlay Fund for the required City matching funds.

6.d 2025 ANNUAL MONITORING FOR THE SAN LUIS RANCH

DEVELOPMENT AGREEMENT, MITIGATION MEASURES, AND

PROJECT CONDITIONS
Council Member Marx declared a conflict on this item as she owns property in the development.)
Receive and file the 2025 annual monitoring report for the San Luis Ranch Development Agreement, mitigation measures, and required project conditions.

6.e 2025 ANNUAL MONITORING FOR THE AVILA RANCH DEVELOPMENT

AGREEMENT, MITIGATION MEASURES, AND PROJECT CONDITIONS
Receive and file the 2025 annual monitoring report for the Avila Ranch Development Agreement, mitigation measures, and required project conditions.

6.f ABANDONMENT OF A 10-FOOT-WIDE PUBLIC WAY BETWEEN 1998 AND 2006 SAN LUIS DRIVE IN THE R-1 ZONE (STAB-0759-2024) Adopt Resolution No. 11561 (2025 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, abandoning a 10- Foot-Wide Public Right-of-Way Between 1998 and 2006 San Luis Drive.”

7. PUBLIC HEARING AND BUSINESS ITEMS

7.a ANNUAL CANNABIS BUSINESS PROGRAM UPDATE AND
INTRODUCTION OF AN ORDINANCE TO AMEND SECTION 17.86.080 (CANNABIS) OF TITLE 17 (ZONING REGULATIONS) OF THE

MUNICIPAL CODE
Cannabis Business Coordinator Ivana Gomez provided an in-depth staff report and responded to Council questions.

Public Comments:

Megan Souza
Austen Connella
---End of Public Comment---
Motion By Council Member Marx
Second By Council Member Boswell

4 1. Receive an update on the City’s Cannabis Business Program; and

2. Introduce Ordinance No. 1746 (2025 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Section 17.86.080 (“Cannabis”) of Title 17 (“Zoning Regulations”) of the Municipal Code to clarify specific land use and operational requirements for commercial cannabis activity.” Ayes (5): Council Member Boswell, Council Member Francis, Council Member Marx, Vice Mayor Shoresman, and Mayor Stewart
CARRIED (5 to 0)

7.b INTRODUCE AN ORDINANCE AMENDING THE AIRPORT AREA

SPECIFIC PLAN TO ALLOW MIXED-USE RESIDENTIAL

DEVELOPMENT WITHIN THE SERVICE COMMERCIAL (C-S) AND

MANUFACTURING (M) ZONES
Community Development Director Timmi Tway and Contract Planner John Rickenbach provided an in-depth staff report and responded to Council questions.

Public Comments:

Rachel Whalen
Robert Truman
---End of Public Comment---
Motion By Council Member Francis
Second By Council Member Boswell
Introduce Ordinance No. 1747 (2025 Series) entitled “An Ordinance of the City Council of the City of San Luis Obispo, California, amending the Airport Area Specific Plan to allow mixed-use development in the Service Commercial (C-S) and Manufacturing (M) zones subject to a conditional use permit where appropriate and consistent with the Airport Area Specific Plan, including adoption of an addendum to the Final Environmental Impact Report for the Airport Area and Margarita Area specific plans and related facilities master plans.”
Ayes (5): Council Member Boswell, Council Member Francis, Council Member Marx, Vice Mayor Shoresman, and Mayor Stewart
CARRIED (5 to 0)

5 7.c DISCUSS AND PROVIDE DIRECTION ON TANK FARM ROAD

STRIPING MODIFICATIONS AND AUTHORIZE ADVERTISEMENT OF
THE 2025 PAVING PROJECT (SPEC. NO. 2000616) FOR
CONSTRUCTION (Estimated Time: 60 minutes)
Deputy Director Public Works Brian Nelson, and Transportation Manager Luke Schwartz provided an in-depth staff report and responded to Council questions.

Mayor Stewart declared a conflict due to owning property within 300 feet of Sacramento Drive. She left the room for the discussion and vote for the Sacramento Drive portion of the Paving Plan.

Public Comments for Sacramento Drive:

None
---End of Public Comment---
Motion By Council Member Marx
Second By Council Member Francis
To approved the proposed paving project for Sacramento Drive.

Ayes (4): Council Member Boswell, Council Member Francis, Council Member Marx, and Vice Mayor Shoresman
Recused (1): Mayor Stewart
CARRIED (4 to 0)
Public Comments for Tank Farm Road
Kelly Alonso
Eneko Alonso
Molly Zagrodny
Beverly Hanson
Elie Axelroth
Myron Wilson
Garrett Otto
Karen Speaker
Robert Truman
Vickie Backman
Lea Brooks
Barry Rands
Jackie Parker

6 Motion By Council Member Boswell
Second By Council Member Francis

1. Approved Alternative 1 for Tank Farm Road for implementation with the 2025 Paving Project designs; and

2. Authorize the City Engineer to approve final plans and specifications for the 2025 Paving Project, Specification No. 2000616, including incorporation of designs for Tank Farm Road pursuant to City Council direction, prior to advertising the project for construction; and

3. Authorize staff to advertise for bids for the 2025 Paving Project; and

4. Authorize the City Manager to award the construction contract for the 2025 Paving Project pursuant to Section 3.24.190 of the Municipal Code for the bid total, if the lowest responsible bid is within the publicly disclosed funding amount of $7,720,000; and

5. Adopt Resolution No. 11562 (2025 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing Appropriation of Capital Projects Reserve Funds to Support the 2025 Paving Project, Specification Number 2000616”; and

6. Authorize the Finance Director to make the following appropriations and funding transfers to the 2025 Paving Project Account (2000616):
a. Appropriate $1,404,530 of Capital Outlay LRM funds from the FY24/25 Capital Reserve of the Capital Outlay Fund; and b. Transfer $2,100,000 of Capital Outlay LRM funds from the Roadway Sealing 2024 Project Account (No. 2000615); and c. Transfer $100,000 of Capital Outlay LRM funds from the Arterials 2023 Project Account (No. 2001065); and
d. Transfer $199,200 of Water funds from the Water Valve Cover Adjustments Account (No. 2001005); and
e. Transfer $76,800 of Sewer funds from the Sewer Valve Cover Adjustments Account (No. 2000084); and

7 7. Authorize the City Engineer to issue Contract Change Orders for the 2025 Paving Project up to and in excess of $200,000 if within available project budget, and up to any amended budget
subsequently approved by the City Manager per City Purchasing Policy approval thresholds.

Ayes (5): Council Member Boswell, Council Member Francis, Council Member Marx, Vice Mayor Shoresman, and Mayor Stewart
CARRIED (5 to 0)

8. LIAISON REPORTS AND COMMUNICATIONS
Mayor Stewart
 Performing Arts Center Commission - attended the meeting on April 29th where a subcommittee was formed to look at how we are going to pay for the maintenance for such a large facility.
 SLO Regional Transit Authority (SLORTA) - will be attending a meeting tomorrow (May 7th) to talk about the SLORTA's Vision Zero report.  Attended the ribbon cutting for North Chorro public art piece "In the Shadow of the Mountain" which on the underpass.
 Attended the Bike Month kick off celebration.

Vice Mayor Shoresman
 Attended Cal Poly's Community Days where she had the opportunity to talk with many students about local government.
 Attended and provided the Opening Welcome for the SLO International Film Festival
 Attended the Angel Con event
Council Member Boswell
 Presented the Proclamation at Earthfest for Earth Day  Attended the FPAC Student matinee and luncheon
Council Member Francis
 Nacimiento Water Project - attended the April 24th meeting where they approved budget and received an update on Nacimiento pipeline repair.

8  Community Action Partnership - attended the April 24th meeting  Spoke at the Take Back the Night event at Cal Poly.
 Attended Cal Poly's Community Days where she had the opportunity to talk with many students about local government.

Council Member Marx
 Integrated Waste Management Authority (IWMA) - attended the April 3rd Executive meeting where they narrowed the search for Executive Director to 3 candidates
 Attended the ribbon cutting for North Chorro public art piece "In the Shadow of the Mountain" which on the underpass.

9. ADJOURNMENT
The meeting was adjourned at 9:34 PM p.m. The next Regular City Council Meeting is scheduled for May 20, 2025 at 5:30 p.m with a Closed Session starting at 4:30 PM. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.

APPROVED BY COUNCIL: XX/XX/202X

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
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 6c – FY 2024-25 Q3 BUDGET REPORT
Staff received the following question, regarding the FY 2024-25 Third Quarter Budget Report. The question is below with staff’s response shown in italics:
1) On page 38, where the Water Fund is discussed, the following table shows “Other Revenues” have been received at 1215%. There is some description below the table, describing that this is related to permits, fees, and penalties.

However, could you further explain how they come to be so far over projections?
The “Other Revenues” category appears significantly over projections due to how budgeted and actual revenues for Development Impact Fees are structured.

Development impact fees are budgeted for and received into their own designated fund (509). However, annually funding for eligible projects is transferred to the Water Fund (601) after the annual AB 1600 review and reporting process. Because the Water Fund reflects the actual transfer amount, but does not carry the corresponding budget, it creates the appearance of a large over realization. During FY 2024-25, the Utilities Department budgeted $800,000 in Fund 509 for anticipated development impact fees. Excluding the “Transfers In” amount during FY 2024-25, YTD actuals for the remaining “Other Revenue” categories total $281,401, compared to a budget of $240,694 (117%). These revenues include those for other city licenses and permits (recycled water construction water permits), miscellaneous penalties (customer late fees), sales of surplus property, credit collections, development review fees, utilities set-up fees, and low-income subsidies (the customer assistance program).

Item 6c
Department: Finance
Cost Center: 2002
For Agenda of: 5/20/2025
Placement: Consent
Estimated Time: N/A
FROM: Emily Jackson, Finance Director
Prepared By: Riley Kuhn, Principal Budget Analyst
SUBJECT: FY 2024-25 Q3 BUDGET REPORT

RECOMMENDATION
Receive and file the FY 2024-25 Q3 Budget Report.

POLICY CONTEXT
The City’s budget policies require that the City Council review the City’s budget and financial condition at least every six months. City Charter Code Section 804 states that at any meeting after the adoption of the budget, the Council may amend or supplement the budget by motion adopted by a majority vote of the Council.

The Third Quarter (Q3) Budget Report (Attachment A) is part of the ongoing quarterly reporting process and fulfills these requirements. The review allows the Council to adjust revenue and expenditure assumptions should the need arise. The accompanying Budget Report for FY 2024-25 Q3 provides a review of the City’s financial results as compared to budget three quarters through the fiscal year.

DISCUSSION
Budget Report Organization
The budget report follows a standard format in line with recent quarterly budget updates and is intended to provide a high level overview of fiscal performance for the General Fund, the four major enterprise funds, and the special revenue funds. The report (Attachment A) includes the following sections:

General Fund Summary: Three quarters through the year, no new risks to budget attainment have emerged. As detailed in the second quarter report, sales tax and development fee revenues are expected to underperform expectations. Expenditures are trending broadly in line with expectations and at this point. Staff do not see risk to fund balance at year end.

Storm Update: Consistent with prior quarterly reports, the Q3 report includes a summary of costs incurred to date to address damage caused by the Winter 2023 storms. The

Item 6c
report also includes an update on the status of reimbursements expected from the Federal Emergency Management Agency and California Office of Emergency Services.

Water Fund Summary: Year to date results are generally in line with expectations and staff do not expect significant variances to budget at year end.

Sewer Fund Summary: Year to date results are generally in line with expectations and staff do not expect significant variances to budget at year end.

Parking Fund Summary: Parking revenue is trending below expectations. This revenue shortfall is attributed to enforcement issues at certain parking structures, which staff believe have been addressed.

Transit Fund Summary: Year to date results are generally in line with expectations and staff do not expect significant variances to budget at year end.

Special Revenue Fund Summaries: All special revenue funds are expected to finish the year in line with their budgets.

CIP Update: The report provides an update on the tasks ongoing or completed during the third quarter of the year. Notable projects completed in Q3 include the North Chorro Greenway Underbelly Painting and Lighting, the installation of gated parking equipment at the 842 Palm Parking Garage, and the 2024 Roadway Sealing Project, which included upgrades to the Damon Garcia Sports Field Complex parking lot and the Johnson Park parking lot.

Major City Goals Update: The report provides an update on the Major City Goal tasks originally scheduled to be completed during the third quarter of the year. Two tasks had original completion dates in Q3: Task 4.3a, Higuera Complete Streets, and Task 4.3b, South / King Crossing, are both Active Transportation Plan Tier 1 projects and are now expected to be completed in FY 2026-27 Q1 and FY 2025-26 Q4 respectively. The report includes additional information on the projects and their delays.

Previous Council or Advisory Body Action
Council adopted the FY 2024-25 Supplemental Budget on June 4, 2025. The first quarter budget report was presented to Council on December 10, 2024, and the second quarter budget report was presented on February 18, 2025.

Public Engagement
Public engagement on the item can be provided to the City Council through written correspondence prior to the meeting or through public testimony at the meeting. The report will also be posted on the City’s website for public review.

Item 6c

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) 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:

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 report contains valuable information to keep the Council and Community informed about the City’s financial standing and program efforts. There is no fiscal impact associated with the recommendations contained in the report.

ALTERNATIVES
Council could direct staff to amend the budget. Should Council pursue this option, staff would seek direction on specific amendments and then amend the budget as requested.

ATTACHMENTS
A - FY 2024-25 Q3 Budget Report

1 Third Quarter Financial Report
Fiscal Year 2024-25
Introduction
This financial report provides an overview of the City’s revenues and expenditures through the third quarter of the fiscal year (July 1, 2024 – March 31, 2025). It also provides an update on the status of the City’s Capital Improvement Plan (CIP) projects and progress on Major City Goal tasks.

Throughout the document, reference will be made to the data available as of the time the report was drafted. Revenues are often not available for two months after quarter-end or more and in some cases, revenues are not received evenly throughout the year. Expenditures are often recorded in advance for annual costs or for purchase orders opened at the beginning of the year.

The net impact is that actual results booked three quarters into the year should not always be expected to equal 75% of budgeted amounts. Commentary will be provided only when analysis suggests that full-year results may differ significantly from budget.

Table of Contents
General Fund Summary…………………………………………………………………2
Storm Update………………………………………………………………………. ……5
Water Fund Summary……………………………………………………………………8
Sewer Fund Summary…………………………………………………………………..10
Parking Fund Summary………………………………………………………………...12
Transit Fund Summary………………………………………………………………….15
Special Revenue Summaries……………………………………………………….… 17
CIP Update………………………………………………………………………….……22
Major City Goal Update…………………………………………………………………25

2 General Fund Summary
Three quarters through the year, two areas of risk to revenue budget attainment remain elevated.

As noted in the Second Quarter Budget Report, sales tax has not grown as expected and development review fees are in decline. Expenditures are trending broadly in line with expectations, and at this point, staff do not see risk to fund balance at year end. The tables below detail year-to-date results as compared to budget and prior year actuals. Commentary is provided where results are not in line with expectations.

Revenue:

Tax Revenue:

Sales Tax (including Local Revenue Measure & Prop 172 Safety Tax): Year-to-date results include July through January only as the California Department of Tax and Fee Administration reports on a two-month delay. The budget assumed a return to typical growth rates in sales tax revenue driven by reductions in interest rates that are no longer expected to materialize. Recent statewide forecasts from the City’s consultants have been revised downwards based on macroeconomic conditions and, as a result, staff expect risk to budget attainment.

Property Tax: The City participates in the Teeter Plan, which means that the City is not exposed to delinquent payments and can reasonably expect to collect 100% of budgeted amounts. Staff expects to exceed budget by year-end.

FY 2023-24 FY 2024-25
General Fund Actual Budget YTD Actuals % Received
Tax and Franchise Revenue $ 102,258,726 $ 104,967,371 $ 64,765,070 62% Local Revenue Measure G 30,597,288 31,855,000 17,871,298 56% Sales Tax (Bradley Burns) 22,285,972 23,962,099 13,315,699 56% Property Tax 23,723,431 23,446,385 15,457,996 66%
Transient Occupancy Tax 11,063,012 10,586,256 6,915,102 65% Utility User Tax 6,301,505 6,622,639 4,552,277 69%
Business Tax 2,941,928 3,317,338 3,161,619 95%
Cannabis Tax 1,116,495 1,100,000 713,841 65%
Franchise Fees 2,366,286 2,091,800 1,443,076 69%
Gas Tax 1,341,857 1,419,353 978,374 69%
Safety Prop 172 520,952 566,500 355,787 63%
Fees and Other Revenue 18,689,524 22,557,685 13,123,021 58% Development Review 6,168,815 6,585,331 3,811,982 58%
Parks & Recreation 2,413,314 2,060,627 1,576,521 77%
Fire 1,731,537 1,577,836 1,156,298 73%
Police 1,022,488 654,645 596,743 91%
General Government 7,353,369 2,946,959 5,981,478 203%
Storm Reimbursement - 8,732,287 - 0%
Total $ 120,948,251 $ 127,525,055 $ 77,888,092 61%

3 Business Tax: This tax is due at the beginning of the year and should be largely collected. Staff notes that collections are up more than 7% from the prior year due to a combination of improved compliance efforts and collection of past-due prior year receipts. Staff issued the first of three rounds of citations at the end of January for past due business tax and expect collections to increase before year end. The second round of citations was issued in March. Both efforts were successful in bringing delinquent operators into compliance. As of the writing of this report, staff expects to send the third and final round of citations out to approximately 330 operators who are still out of compliance.

Cannabis Tax: The legal cannabis industry has faced headwinds statewide and based on current year trends, cannabis revenue is expected to underperform budget by at least $0.1M.

While other tax revenue categories show year to date results lower than 75%, staff do not expect significant variances for the full year.

Fee & Other Revenue:

Development Review Fees: This revenue stream finished 2% below budget last fiscal year and is pacing to finish the year as much as $1.5M below budget in the current fiscal year, which would be 23% below anticipated revenues for the year. This downward trend in development and related fees aligns with nationwide trends due to external factors such as high interest rates, political uncertainty, and elevated construction, labor, land, and energy costs. This trend could also suggest a leveling out of development in the City, after several years of development occurring at a high pace due to several large-scale projects and the build-out of several subdivisions.

As a result of applications being down, Community Development is completing the vast majority of plan checks in-house. This preserves the consultant budget, which would typically be expended if there were more projects. The Director has directed program managers to pay close attention to discretionary budgets for the remainder of the fiscal year and the Department has kept a Permit Tech Position vacant. In addition, Community Development has re-forecasted the anticipated development revenue in the next financial plan, taking into consideration the trends that have emerged this year.

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

Storm Reimbursement: Staff’s original assumption was that the City would receive reimbursement for Winter 2023 Storm expenditures from the Federal Emergency Management Agency (FEMA) and the California Office of Emergency Services (CalOES) within 12 months.

That timeframe passed in October 2024 and the City has yet to receive reimbursement, despite

1 Fair Market Value adjustments are non-cash adjustments to investment income that reflect changes in the current market price of our bond holdings. Bond values are inversely correlated with interest rates, so if interest rates do not fall as expected the adjustment will reduce revenue. If rates fall more quickly than expected, the adjustment will increase revenue. Because the City generally holds investments until maturity, we do not expect any cash impact from these changes in fair value.

4 the fact that FEMA has obligated some of the City’s projects. More information is included in the ‘Storm Update’ section of this report.

Though other fee categories show year-to-date results other than 50% of budget, staff do not expect significant variances for the full year.

Operating Expenditures:

Staffing: Salaries and benefits are as expected at this point in the year. If vacancies and overtime utilization continue at this rate, this indicates year end staffing savings of at least 4%.

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

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

While 79% of budget has been obligated or expended, just 54% has been paid to vendors. Staff expect modest savings at year-end.

Other Operating Expenditures: Similar to Contract Services, actuals for this line include obligations on open purchase orders and just 59% of budget has been expended. Staff expect modest savings at year-end.

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

FY 2023-24 FY 2024-25
General Fund Expenditures Actual Budget YTD Actuals % Expended Staffing $55,754,042 $62,709,295 $44,616,329 71%
Unfunded Pension Liability 12,994,935 12,886,419 12,682,728 98% Contract Services 10,721,258 13,420,932 10,650,884 79%
Other Operating Expenditures 7,674,086 8,600,833 6,392,098 74% Total $87,144,321 $97,617,478 $74,342,039 76%
FY 2023-24 FY 2024-25
Operating Expenditures by Department Actual Budget YTD Actuals % Expended Admin/IT $ 10,767,778 $ 12,208,276 $ 9,177,290 75%
City Attorney 1,472,411 1,898,569 1,389,846 73%
Community Development Department 7,157,271 9,772,915 6,904,101 71% CSG Admin 829,900 666,056 410,128 62%
Finance 2,275,677 2,661,555 1,998,003 75%
Fire 15,960,639 18,087,494 14,683,613 81%
Human Resources 2,179,463 2,046,878 1,537,145 75%
Non-Dept/Support Services 403,735 1,083,110 220,554 20% Parks & Recreation 5,414,249 6,031,062 4,370,014 72%
Police 23,233,179 23,882,116 19,529,330 82%
Public Works 17,038,967 18,867,172 13,815,389 73%
Utilities 411,052 412,275 306,626 74%
Total $ 87,144,321 $ 97,617,478 $ 74,342,039 76%

5 Fire Department: Several vacant positions are driving higher than expected overtime expenditures. Four firefighter positions were vacant until March, when four new recruits began the department’s internal, ten-week training academy. The academy finishes in early May, followed by a three to six-week paramedic certification period, when the new hires will fill the vacant positions, and overtime will no longer be a daily necessity. The department will utilize all means to reduce impacts to the budget, including the offset of unused regular salaries from the vacancies. Staff expect this year’s increased mutual aid revenue resulting from the high fire activity around the state and other reimbursements will provide budget capacity to cover staffing costs for the remainder of the year.

Police: Total staffing expenditures are trending higher than budget and it is likely that the department will be over-expended in staffing at year end. The main contributor is a Police Officers Association labor contract increase which, as is typical for labor negotiations, is included in the non-departmental budget. Including the labor contingency amount, the department is expected to finish under budget.

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

The FEMA reimbursement process continues to move slowly due to turnover in the FEMA Program Delivery Managers assigned to assist local agencies in submitting projects for reimbursement and a lack of clarity about the information required in order to submit projects.

While the Disaster Relief Fund (which funds public assistance to impact agencies) was allocated additional funding, the newly formed Department of Government Efficiency (DOGE) is now focused on FEMA programs. As reported last quarter, the new Federal administration has previously signaled the possibility of disaster response shifting to states. Given all of the changes at the Federal level, it is expected that FEMA processes will slow even more.

The City has expended approximately $13.5 million on storm response to date, including debris removal, emergency protective measures, and projects to make permanent repairs to damaged facilities. This amount is approximately $2 million lower than what was reported in the FY 2024- 25 Second Quarter Budget Report, due to Oracle double-counting purchase orders and invoices, which has since been corrected. The $13.5 million is close to what was reported in the First Quarter Budget Report, as many projects are in the design phase and significant costs have not been incurred. Currently, the estimated total cost to repair all storm related damage is $48.4 million, consistent with what was reported in prior reports. As previously noted, all storm‐related expenditures have been submitted to FEMA for reimbursement and are in various stages of

6 FEMA’s review and evaluation process. As of the writing of this report, a total of nine projects totaling $717,125 have been obligated by FEMA, meaning that FEMA has determined that reimbursement should be provided. Once a project is obligated, notification is made to the State for payment. Agencies typically receive payment within three months of a project being obligated, but CalOES has reported that the timeline has slowed due to a significant volume of reimbursement payments to process. CalOES has provided the City with notification that payments are currently being processed for five of the City's projects.

As reported in prior quarters, staff has struggled to navigate FEMA processes due to inconsistent guidance provided by FEMA Program Delivery Managers, inaccurate FEMA site inspections and lack of clarity about what jurisdiction certain projects fall under. In early May, staff met with a representative from Congressmember Salud Carbajal’s office, and as a result of that meeting, the Congressmember’s office will be writing letters on the City’s behalf to try to move submitted projects forward, through FEMA’s process.

Based upon staff delivery capacity, FEMA reimbursement timeframes, and the upcoming 2025‐ 27 Financial Plan process, staff continues to work on the highest priority storm damage projects in order to advance them for funding consideration with the 2025‐27 Financial Plan and will continue the process to obtain FEMA reimbursement during the delivery process.

The two tables below provide an overview of the status of storm projects. The first table details all storm projects that staff believe should advance, including their respective current phases and the percentage of work completed to date. All of these projects have been included as part of the 2025-27 Financial Plan. The second table outlines work that is not deemed urgent at this time and will be assessed as part of a future financial plan. Staff continue to monitor these sites to access priorities.

7

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

Revenue:

Revenues are 87% received as of report drafting, which is in line with anticipated revenue collection at this point in the fiscal year. Staff are monitoring collections and do not expect a significant variance in budget by year end.

Investment and Property Revenue: This line includes earnings on cash and investment balances. The fund has benefited from the current interest rate environment and exceeds its revenue budget as budgets are set conservatively in case earnings on investments are low. The higher interest earnings can help offset other revenue shortfalls, should they occur, and strengthen the Water Fund’s financial position.

Other Revenue: The Other Revenue line item is primarily funded from Transfers In revenues, which come from Development Impact Fees. Actuals show as overrealized, because Impact Fees for water are budgeted for under the individual fund that they are received in to and are then transferred to the Water Fund during the annual AB 1600 review and reporting process. The Other Revenue line item also includes Other City Licenses and Permits (recycled water construction water permits), Miscellaneous Penalties (customer late fees), Credit Collections, Sales of Surplus Property, Development Review Fees, and Utilities Setup Fees. Service Charges and Base Fees: Service Charges and Base Fees are currently showing an under-collection, primarily due to a timing gap between the receipt of revenue and their allocation in the accounting system. Specifically, sales to Cal Poly and Water Sales are impacted by this timing delay, leading to a temporary misalignment in reported revenues. These discrepancies are expected to be resolved by year-end as accounting processes catch up with the actual collections.

State Grants: Funds received are attributable to a Proposition 1B Grant, which aligns with the funding levels projected. These funds were received this fiscal year as a result of modified project schedules. Staff are actively coordinating with the grant administrators to ensure compliance with reporting and administrative requirements for disbursements.

FY 2023-24 FY 2024-25
Water Revenue Actual Budget YTD Actuals % Received
Cal Poly Capacity & Resilience 233,025 263,433 270,828 103% Investment and Property Revenue 1,759,115 50,000 948,810 1898% Other Revenue 525,148 240,694 2,924,639 1215%
Service Charges and Base Fees 26,088,324 28,102,022 19,842,646 71% State Grants 613,814 - 860,876
Total $ 29,219,426 $ 28,656,148 $ 24,847,799 87%

9 Expenditures:

Staffing: As of the current reporting period, 66% of the staffing budget has been expended.

Budget savings are driven by multiple vacancies throughout the department, as unfilled positions have temporarily reduced personnel costs. Some staffing savings are being spent on approved staffing requests to address these vacancies, including the hiring of a retired annuitant who has been helping fill the Utility Billing vacancy. The Fund remains on track and within budget with these approved costs.

Unfunded Pension Liability: This annual cost is fully prepaid at the beginning of the fiscal year.

This prepayment strategy results in savings over the course of the year, as it reduces accruals and maximizes the impact of the payment.

Contract Services: The Contract Services budget line reflects a significant portion of obligations tied to open purchase orders, many of which are created at the start of the fiscal year for larger, ongoing contracts. Many contracts are structured around milestone-based payments or periodic billing cycles, meaning payments lag behind the recorded obligations. Staff anticipate no variance from the budget by year-end, as these expenditures align with the scope and timelines of contracted services.

Other Operating Expenditures: Similar to the Contract Services category, the Other Operating Expenditures line includes obligations tied to open purchase orders. This line also accounts for significant annual prepayments for key water sources of supply, including Nacimiento, Salinas, and Whale Rock. These prepayments ensure a stable and predictable supply of water, supporting operational needs and reducing the risk of funding shortfalls. By making these payments upfront, the organization safeguards against future cost increases or potential disruptions.

FY 2023-24 FY 2024-25
Water Expenditures Actual Budget YTD Actuals % Expended Staffing $ 4,594,003 $ 5,082,715 $ 3,343,941 66%
Unfunded Pension Liability 833,466 789,926 779,802 99%
Contract Services 810,950 1,212,318 929,843 77%
Other Operating Expenditures 11,882,398 15,566,981 13,975,881 90% Total $18,120,818 $22,651,940 $19,029,468 84%

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

Revenue:

Investment and Property Revenue: This line includes earnings on cash and investment balances. Budgets for investment income are set conservatively because changes in fair market value could lead the City to recognize negative investment income. The fund has benefited from the current interest rate environment and now exceeds its revenue budget for this account line.

The higher interest earnings can offset other revenue shortfalls, should they occur, and strengthen the Sewer Fund’s financial position.

Other Revenue: The Other Revenue line item is primarily funded from Transfers In revenues, which come from Development Impact Fees. Actuals show as overrealized, because Impact Fee revenues for sewer are budgeted for under the individual fund that they are received into and are then transferred to the Sewer Fund during the annual AB 1600 review and reporting process. The Other Revenue line item also includes sources contributed positively to the fund’s position.

Miscellaneous Penalties (customer late fees), and Utilities Set-up Fees, Administrative Citations, Credit Collections, Sales of Surplus Property, Development Review Fees, and Sewer Wye Abandonment and Installations. Together, these sources provide supplemental financial support to the budget, reflecting a diverse revenue base.

State Grants: Funds received are attributable to a CalOES Grant at the Water Resource Recovery Facility (WRRF) and aligns with the grant funding levels projected. These funds were received this fiscal year as a result of modified project schedules. Staff are actively coordinating with the grant administrators to ensure compliance with reporting and administrative requirements for disbursements.

Long-Term Debt Proceeds: Borrowings associated with the long-term debt proceeds are intended to fund the construction of the WRRF and were initially budgeted for FY 2023-24. The timing of these borrowings is contingent upon the progress of construction activities, which may not always align with the original budgetary projections. As a result, fluctuations in the timing of debt issuance are being carefully monitored to ensure that financing remains available.

Service Charges and Base Fees: Similar to the Water Fund, Service Charges and Base Fees show as under-collected due to a timing lag between revenue collection and revenue allocation.

Despite this temporary discrepancy, staff do not anticipate significant variances in this revenue category by the end of the fiscal year.

FY 2023-24 FY 2024-25
Sewer Revenue Actual Budget YTD Actuals % Received
Cal Poly Capacity & Resilience - 472,534 472,534 100%
Investment and Property Revenue 2,592,653 50,000 1,566,239 3132% Other Revenue 497,324 224,000 1,268,259 566%
Service Charges and Base Fees 19,893,378 20,052,366 13,892,344 69% State Grants 887,167 - 197,070
Long Term Debt Proceeds 15,353,992 - 13,405,480
Total $ 39,224,514 $ 20,798,900 $ 30,801,925 148%

11 Expenditures:

Staffing: At 66% expended, the primary driver of budget savings for the Sewer Fund is also unfilled positions. These vacancies led to reduced personnel costs during the first and second quarters of the fiscal year. Recognizing the importance of maintaining operational capacity and service delivery, some staffing savings are being spent on approved staffing increases, including outsourcing specific functions and internal promotions. Efforts to address the staffing gaps include proactive recruitment campaigns, streamlining the hiring process to reduce time-to-hire, and leveraging all available resources to attract and secure qualified candidates.

Unfunded Pension Liability: This annual cost is fully prepaid at the beginning of the fiscal year.

This prepayment strategy results in savings over the course of the year, as it reduces accruals and maximizes the impact of the payment.

Contract Services: Actuals for this budget line include obligations on open purchase orders. Staff do not expect a variance to the budget at year-end. The discrepancy is due to the timing of payments, as many of the services are invoiced and paid after work is completed or milestones are achieved.

Other Operating Expenditures: Like Contract Services, actuals for this line include obligations on open purchase orders. As of the reporting date, 63% of the budget has been paid to vendors.

This approach safeguards budget stability and ensures that key expenditures can be met as obligations are fulfilled.

FY 2023-24 FY 2024-25
Sewer Expenditures Actual Budget YTD Actuals % Expended Staffing $ 4,558,064 $ 5,113,385 $ 3,367,064 66%
Unfunded Pension Liability 851,453 782,976 772,941 99%
Contract Services 1,256,919 1,345,978 1,315,494 98%
Other Operating Expenditures 2,647,401 2,874,769 2,028,178 71% Total $ 9,313,836 $10,117,108 $ 7,483,678 74%

12 Parking Fund Summary
The Parking Fund’s year-to-date results indicate that the fund will underperform against its revenue targets for the year. The revenue budget is based on the 2024 Rate Study report projections, with reduced rates effective July 1, 2024. Overall, staff is estimating a $1.48M shortfall in FY 2024-25 Parking Fund actual revenues compared to the budgeted amount. The Parking Fund has adequate reserves to absorb the estimated one-time revenue shortfall.

Additionally, staff are reducing expenditures in accordance with the Fiscal Health Contingency Plan and intend to use fund balance to address this year’s revenue shortfall, while continuing to resolve the technology issues affecting revenue collection. There is approximately $5.9M unreserved working capital from the year end of FY 2023-24.

Additional analysis and commentary can be found below:

Revenue:

Overall, there were some unexpected failures in the technology systems which resulted in less overall revenue in the first half of the fiscal year. It is expected that the use of new technology recommended in the Technology Roadmap report will help to address some of the current revenue shortfall this year and achieve 2024 Rate Study revenue projections moving forward into future years. Recently completed projects this spring include implementation of a new citation management system and new gated system at 842 Palm garage.

Long Term Parking: Revenue from long term parking includes sales of on-street permits, residential district permits, and garage parking permits. The price of garage parking permits was reduced from $85/month to $45/month effective July 1, 2024. The reduction in permit costs was not forecasted in the Rate Study but was adopted by Council based on staff’s recommendations.

Permit sales have increased due to the price reduction, but the initial increase did not occur as quickly as anticipated due to technology issues. Permit sales have continued to increase each month since July 1, 2024, and are expected to continue to increase with the launch of a new digital permit platform in April 2025 and the installation of the new gating system at 842 Palm Street.

The initial reports from the new digital permit platform show an increase in permit sales, most likely related to the new gating system at the 842 Palm Street garage however the increase in permit sales remain unlikely to meet the revenue projections presented in the Rate Study, due the reduced price of the permit. The availability of garage permits is advertised with signs in the garages, the parking webpages, and printed promotional material. An increased communication FY 2023-24 FY 2024-25
Parking Revenue Actual Budget YTD Actuals % Received
Long Term Parking 702,797 901,906 430,435 48%
Parking Fines 1,190,030 1,252,200 789,971 63%
Parking Meters 5,927,488 4,312,367 3,441,137 80%
Parking Structures 1,757,776 2,860,504 1,121,485 39%
Other Revenue 3,733,272 664,884 690,895 104%
Total $ 13,311,364 $ 9,991,861 $ 6,473,923 65%

13 plan advertising garage permits will be rolled out when all garages have a consistent gating system. Staff expects to miss budget this year by $325,000, based on year-to-date actuals.

Parking Fines: Revenue from parking fines includes all revenue collected from paid parking citations. Citation revenue has decreased due to collection issues caused by the prior citation management vendor and staff turnover. Consistent with the Technology Roadmap recommendations, the City completed implementation of a new citation management vendor in March 2025. As of the end of March 2025 when all citation data was converted to the new citation management vendor, there were 24,616 unpaid citations with a total balance due of $1,717,310.

While all citations may not be collected, the collection of even a portion of the unpaid citations could significantly impact citation revenue.

With the vendor change and updated noticing to those with unpaid citations, revenue is expected to increase. It is highly likely that the bulk of this citation revenue will be realized in FY 2025-26.

Based on year-to-date actuals, there is an expected budget deficit of $295,000 in Parking Fines Revenue. However, based on collection reports from the initial noticing sent by the citation management vendor in April, staff expects to recover the deficit amount in Q4 and does not expect significant variances to budget by year-end.

Parking Meters: Revenue from parking meters includes hourly parking sessions from on-street and surface parking lot areas as well as mobile app payments. Even with the reduced parking rates, parking meter revenue is tracking slightly higher than budget. This provides a strong indication that on-street parking activity is increasing with the reduced parking rates now in effect.

Staff does not expect significant variances to budget by year-end.

Parking Structures: Parking structures revenue was negatively impacted by the operation of a gateless parking system at the 842 Palm Street garage. In November 2024, Council approved appropriation of $1.2 million from Parking Fund balance for the purchase of new garage payment and gating equipment for 842 Palm Street garage, as well as 919 Palm Street and Marsh Street garages. New gating equipment will provide better access and revenue controls that staff anticipates will increase revenue collections. The equipment at 842 Palm Street was replaced in March 2025, but will not be in operation long enough to make up for revenue losses in the current fiscal year. The first 30 days of operation of the new gated system at 842 Palm Street has shown a significant increase in revenue and revenues are expected to meet the projected budget in future years. Once the new gated system has been installed on the remaining City Parking Garages which are the 919 Palm and the Marsh Street garages, Staff expect to meet revenue projects for Parking Garages. Currently, Staff expects to miss budget by $1,160,000, based on year-to-date actuals.

Operating Expenditures:

FY 2023-24 FY 2024-25
Parking Expenditures Actual Budget YTD Actuals % Expended Staffing $ 1,735,699 $ 1,849,702 $ 1,270,668 69%
Unfunded Pension Liability 238,826 244,373 241,241 99%
Contract Services 862,591 782,601 640,606 82%
Other Operating Expenditures 967,528 965,304 672,450 70% Total $ 3,804,644 $ 3,841,980 $ 2,824,965 74%

14 Staffing: The staffing budget is 69% expended through the first three quarters of the fiscal year due to vacancies in multiple administrative and enforcement positions. These vacant positions have since been filled.

Unfunded Pension Liability: This annual cost is prepaid upfront. A slight savings is realized as a result of this prepayment.

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

While 82% of the budget has been obligated or expended, just 55% has been paid to vendors.

Staff does not expect a variance to budget at year-end.

Other Operating Expenditures: This line includes utility services, credit card merchant fees, and operational materials and supplies. So far, 70% of the budget has been expended. Due to lower than budgeted revenues, staff expect savings of $40,000 in credit card merchant fees, corresponding with revenue trends.

15 Transit Fund Summary
The Transit Fund’s year-to-date results are generally in line with expectations. Staff note that the Transit Fund is largely funded by Federal and State grants. As such, staff are monitoring the new administration’s executive orders, budget recommendations, and actions and what effects they may have on the availability of future federal funds.

Revenue:

Federal: This line includes capital and operating revenue from discretionary and formula federal grants. Discretionary grants are competitive in nature and are included in the budget to offset related capital costs, but they are not guaranteed. Formula grants are typically allocated to the region and the amount is calculated using various factors like population and transit metrics. Both discretionary and formula grants are reimbursement-based grants, meaning funds are disbursed after expenses have been incurred.

In April 2024, staff applied for $5.1 million in discretionary grant funding for the purchase of additional battery electric vehicles. The funding request was not awarded, so this revenue will not be received, and the project budget will be adjusted accordingly. The City continues to draw down on the American Rescue Plan Act (ARPA) operating funds awarded to the City in 2022.

Drawdowns occur quarterly to align with federal reporting requirements. Five total drawdowns for both operating and capital expenses are reflected in the table above.

There has been no communication from the U.S. Department of Transportation or Federal Transit Administration (FTA) that active grants like the ARPA operating assistance grant are at risk of loss of funding. Staff continues to submit draw down requests and, as of March 2025, funds continue to be disbursed. Staff expects that ARPA operating assistance funds will be available for the remainder of this fiscal year and that approximately $2.7 million (22 percent of total budgeted revenue) will be available next fiscal year to cover operating costs. Remaining operating costs will be covered through a combination of FTA Section 5307 funds and Transportation Development Act (TDA) revenue.

Local (Bus Fare): This line includes fares paid on the bus, pass sales, and revenue from Cal Poly’s Transit Service Agreement. Staff expects minimal variance at year-end.

Other / Interest Revenue: This line includes earnings on cash, investment balances, and sale of surplus property. Revenue from interest and investments are difficult to accurately estimate, so the Transit Fund budgets conservatively for this line.

State: This line includes revenue from state and regional discretionary and formula funding sources. Staff expects to receive $2.57 million in TDA revenue based on the San Luis Obispo Council of Government’s (SLOCOG) revised allocation, which is $158,000 less than originally FY 2023-24 FY 2024-25
Transit Revenue Actual Budget YTD Actuals % Received
Federal $ 3,486,773 $ 12,469,861 $ 3,157,784 25%
Local (Bus Fare) 1,000,790 976,000 748,516 77%
Other / Interest Revenue 379,651 - 250,134
State 1,607,897 3,613,325 1,932,290 53%
Total $ 6,475,111 $ 17,059,186 $ 6,088,723 36%

16 budgeted. The Transit Fund received $376,368 for two capital projects and was reimbursed $498,473 for the construction of the Transit Yard electric vehicle charging infrastructure project, both of which are reflected in the table above.

Expenditures:

Staffing: This line is tracking below budget primarily due to limited use of part-time staff. As a result, staff anticipates a slight favorable variance at year-end.

Unfunded Pension Liability: This annual cost is prepaid upfront. A slight savings is realized as a result of this prepayment.

Contract Services: This line primarily consists of costs paid via a third-party contract to Transdev for SLO Transit’s operations and maintenance services. Actuals for this budget line include obligations on open purchase orders. While 98% of budget has been obligated, just 65% has been paid to vendors. Staff expects a savings of $107,000 at the end of this fiscal year in the Contract Services line item.

Other Operating Expenditures: Actuals for this line include obligations on open purchase orders. Staff expects expenditures to be $83,000 greater than budgeted amount due to a 38% increase in average fuel costs per gallon since the beginning of the fiscal year. This variance will be covered by savings in the Contract Services line item discussed above.

FY 2023-24 FY 2024-25
Transit Expenditures Actual Budget YTD Actuals % Expended Staffing $ 328,784 $ 344,223 $ 221,537 64%
Unfunded Pension Liability 57,283 45,725 45,139 99%
Contract Services 3,592,192 4,630,217 4,514,744 98%
Other Operating Expenditures 431,255 424,715 406,837 96% Total $ 4,409,514 $ 5,444,879 $ 5,188,256 95%

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

Revenue:

While less than 75% of the budget has been recorded to date, revenue is recorded on a more than one month delay and staff expect to collect the budgeted amount for the full year.

Expenditures:

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

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

Revenue:

The Boysen Ranch Conservation Fund is an endowment fund and its budgeted revenue is provided by investment income. The fund is expected to benefit from the current interest rate FY 2023-24 FY 2024-25
TBID Revenue Actual Budget YTD Actuals % Received
Tourism Assessment $ 2,267,304 $ 2,117,251 $ 1,382,507 65% Other Revenue 56,643 - 28,359
Total $ 2,323,947 $ 2,117,251 $ 1,410,866 67%
FY 2023-24 FY 2024-25
TBID Expenditures Actual Budget YTD Actuals % Expended
Staffing $ 213,472 $ 234,328 $ 149,597 64%
Unfunded Pension Liability 43,573 32,234 31,821 99%
Contract Services 1,869,690 1,871,237 1,716,996 92%
Other Operating Expenditures 20,130 34,100 10,776 32%
Total $ 2,146,866 $ 2,171,900 $ 1,909,191 88%
FY 2023-24 FY 2024-25
Boysen Ranch Revenue Actual Budget YTD Actuals % Received Investment Income $ 18,353 $ 2,000 $ 10,603 459%
Total $ 18,353 $ 2,000 $ 10,603 530%

18 environment and meet or exceed its revenue budget, but this could change if fair market value adjustments offset interest income received.

Expenditures
The fund has made its budgeted payment for authorized conservation activities. Staff expect no further payments this fiscal year and the fund will finish on budget.

Insurance Fund
The Insurance Fund serves to pay the City’s annual premiums for liability, workers’ compensation, special events, volunteer, and property insurance needed to protect the City and to manage fluctuations in claims‐related expenses. It is also intended to maintain adequate reserves for future claims and unpredictable increases in insurance costs.

Revenue:

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

Expenditures:

While recent actions to reduce premiums for Workers’ Compensation have delivered savings, additional contributions from the General Fund may be necessary to build and maintain adequate reserves according to City policy and actuarial estimates. The City’s Fund Balance and Reserve Policy establishes that the Insurance Fund will maintain funding to cover 150% of the average claim costs for the past five years. The policy also states that actuarial information will be taken into consideration. Based on the most recent actuarial study dated November 18, 2024, the City should maintain a reserve of $3,392,000 for liability claims and $1,578,000 for workers’ compensation claims, totaling $4,970,000, if funding at a 75% probability level. The insurance fund reserve is anticipated to be $2,891,767 at the end of FY 2024-25. This is below the lowest probability level provided by the actuary, which is 55%, or a reserve of $4,553,000.

FY 2023-24 FY 2024-25
Boysen Ranch Expenditures Actual Budget YTD Actuals % Expended Contract Services 9,135 10,136 10,136 100%
Total $ 9,135 $ 10,136 $ 10,136 100%
FY 2023-24 FY 2024-25
Insurance Fund Revenue Actual Budget YTD Actuals % Received Transfers In $ 6,333,317 $ 6,000,000 $ 4,500,000 75%
Total $ 6,333,317 $ 6,000,000 $ 4,500,000 75%
FY 2023-24 FY 2024-25
Insurance Fund Expenditures Actual Budget YTD Actuals % Expended Contract Services $ 4,754,556 $ 5,725,119 $ 3,768,453 66% Total $ 4,754,556 $ 5,725,119 $ 3,768,453 66%

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

Revenue:

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

Expenditures:

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

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

Revenue:

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

FY 2023-24 FY 2024-25
Public Safety Fund Revenue Actual Budget YTD Actuals % Received Transfers In $ 171,322 $ 167,334 $ 125,501 75%
Total $ 171,322 $ 167,334 $ 125,501 75%
FY 2023-24 FY 2024-25
Public Safety Fund Expenditures Actual Budget YTD Actuals % Expended Other Operating Expenditures 601,116 404,020 384,877 95% Total $ 601,116 $ 404,020 $ 384,877 95%
FY 2023-24 FY 2024-25
San Luis Ranch CFD Revenue Actual Budget YTD Actuals % Received Property Tax $ 1,274,999 $ 1,000,250 $ 840,375 84%
Interest on Investment 592,271 - 18,912
Total $ 1,867,271 $ 1,000,250 $ 859,287 86%

20 Expenditures:

The fund budgets for authorized expenditures, largely debt service, and is expected to finish the year on budget. Transfers out exceed the budget due to transfers of amounts authorized and budgeted but not transferred in prior years. There is no expected ongoing impact as the transfers will be made annually within budgeted amounts going forward.

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

Revenue:

The fund collects property tax from residents under the Teeter Plan with the County and is expected to finish the year on budget or better. Year to date results include accruals for tax payments to be made in April and are subject to change.

Expenditures:

FY 2023-24 FY 2024-25
San Luis Ranch CFD Expenditures Actual Budget YTD Actuals % Expended Contract Services $ 9,145 $ 189,666 $ 176,858 93%
Debt Service 911,650 949,450 927,450 98%
Transfers Out 26,530 219,133 826%
Total $ 920,795 $ 1,165,646 $ 1,323,442 114%
FY 2023-24 FY 2024-25
Avila Ranch CFD Revenue Actual Budget YTD Actuals % Received Services Special Tax $ 232,761 $ 477,025 $ 492,030 103% Facilities Special Tax $ 23,738 46,623 $ 49,214 106%
Investment Income $ 12,486 - $ 7,812
Total $ 268,985 $ 523,648 $ 549,056 105%
FY 2023-24 FY 2024-25
Avila Ranch CFD Expenditures Actual Budget YTD Actuals % Expended Authorized Services 58,758 252,602 39,661 16%
Transfers Out 17,085 110,814 386,517 349%
Total $ 17,085 $ 110,814 $ 386,517 349%

21 The fund budgets for authorized service expenditures for maintenance and utilities and is expected to finish the year under budget. Transfers out exceed budget due to the inclusion of amounts authorized and budgeted but not transferred in prior years. There is no expected ongoing impact as the transfers will be made annually within budgeted amounts going forward. Prior year actuals were lower than budget because the development is new, still under construction, and therefore maintenance costs are currently lower than revenues. At full buildout it is expected that costs to serve this neighborhood will exceed revenue and the General Fund will provide services above and beyond what the CFD pays for. All unexpended funds are held in fund balance and are available for expenditure in future years.

22 CIP Update
During the third quarter of the fiscal year, the City continued to make strong progress in delivering its Capital Improvement Program (CIP) projects, with key advancements in infrastructure, public spaces, and essential facilities. Notable projects completed in Q3 include the North Chorro Greenway Underbelly Painting and Lighting, the installation of gated parking equipment at the 842 Palm Parking Garage, and the 2024 Roadway Sealing Project, which included upgrades to the Damon Garcia Sports Field Complex parking lot and the Johnson Park parking lot.

The CIP team also reached substantial completion on the Wash Water Tank #1 and Laguna Lake Dog Park projects. Final work on both is expected to be completed in the fourth quarter.

Construction remains active on several legacy projects, including the Mid-Higuera Bypass, Mission Plaza Enhancements, and the Cultural Arts District Parking Structure. These high-profile projects are on track for completion in fiscal year 2025–26.

The City also received favorable bids for several new projects that will enter the construction phase in the fourth quarter of FY 2024–25. These include tenant improvements at 1106 Walnut (Police Administration Building), improvements to the 1166 Higuera Parking Lot, the Bob Jones Trail Groundwater Well Drilling project, and the City Hall Finance/IT Remodel.

In preparation for the 2025–27 Financial Plan, staff is also gearing up to launch new CIP projects in year one of the plan. These include Righetti Community Park, the installation of improved parking infrastructure, and a sealing project on Grand Avenue.

A summary table of all completed and ongoing construction projects through the third quarter, along with updates on legacy projects, is included below.

23 Oracle Account
Number Project Total Budget Estimated Construction Completion Date Additional Comments 2000049 842 & 919 Palm Parking Structure
Repairs
$ 2,538,989.00 Completed
2000126 Water Treatment Plant Generator
Improvement Project at Facility 98 $ 3,527,523.00 Completed 2000188 Mitchell Park Revitalization $ 471,253.00 Completed 2000525A Parking Equiptment at Gate Entry
(842 Palm) $ 312,000.00 Completed
2000578 Johnson Waterline $ 5,204,444.00 Completed
2000615 2024 Sealing Project $ 3,000,000.00 Completed
2001050 Tank Farm Lift Station Discharge Pipe
Replacement Phase 2 $ 223,678.00 Completed
2001065 2023 Arterials $ 9,823,766.00 Completed
2001069 Righetti Hillside Emergency Repair $ 1,540,000.00 Completed 2091368 Reservoir 2 Cover Replacement $ 2,617,247.00 Completed 2091683 North Broad Park $ 1,533,939.00 Completed
2000031-08.01 Damon Garcia Sports Field Complex
Parking Lot Maintenance $ 130,000.00 Completed
2000031-08.05 Johnson Park Parking Lot Maintenance $ 50,000.00 Completed 2000032-04 Railroad Safety Trail from Cal Poly to
Taft Street $ 130,775.00 Completed
2000036-04 North Chorro Greenway Underbelly
Lighting $ 50,000.00 Completed
2000036-05 North Chorro Greenway Underbelly
Painting
$ 60,000.00 Completed
2000075-06 Fire Station 4 Exterior Painting $ 55,000.00 Completed 2000075-07 Parking HVAC Replacement $ 260,000.00 Completed 2000075-9.01 Corporation Yard Fuel Island and Wash
Station Rehabilitation $ 827,556.00 Completed
2001001-14 Higuera St Crack Sealing $ 109,072.00 Completed 2001010-01 Cheng Park Revitalization $ 807,786.00 Completed 2090742-10 Smith Augusta CMP Emergency Repair $ 850,000.00 Completed 2001068 Laguna Lake Dog Park $ 1,600,000.00 Q4 FY 24-25 Final Punchlist 2000034-03 Wash Water Tank #1 $ 753,807.00 Q4 FY 24-25 Final Punchlist 2001001-02 Palm Street Sidewalk Replacement $ 176,205.00 Q4 FY 24-25 2000545 California Waterline Replacement $ 1,550,505.00 Q1 FY 25-26 Construction Ongoing 2000561 Morro and Mill Sewer Replacement $ 2,800,000.00 Q1 FY 25-26 Construction Starting in Q4 FY24-25
2091219 Wastewater Resource Recovery Facility
Upgrade $ 143,376,754.12 Q1 FY 25-26 Construction Ongoing 2000075-13.01 Jack House Roof and Windows $ 499,554.00 Q1 FY 25-26 Construction Ongoing 2000539-02 Sierra Way Waterline Replacement $ 2,766,449.00 Q1 FY 25-26 Construction Ongoing 2000096 Sewer-main Replacement: Foothill and
Santa Rosa CalTrans $ 350,000.00 Q2 FY 25-26 Construction Starting in Q1 FY25-26 2001066B 1166 Higuera Parking Lot $ 428,183.00 Q2 FY 25-26 Construction Starting in Q4 FY24-25
2090649 Mid-Higuera Bypass $ 11,550,000.00 Q2 FY 25-26 Construction Ongoing 2091439 Mission Plaza Enhancements $ 3,729,574.00 Q2 FY 25-26 Construction Ongoing 2000114-02 City Hall's Finance/IT Remodel $ 1,337,705.00 Q2 FY 25-26 Construction Starting in Q4 FY24-25
2000574-01 Downtown Multi-Space Pay Station
Installation $ 1,400,000.00 Q2 FY 25-26 Construction Starting in Q1 FY25-26 2000577-04 1106 Walnut TI $ 2,000,000.00 Q2 FY 25-26 Construction Starting in Q1 FY25-26
2000615-01 Grand Ave Sealing Project $ 429,000.00 Q2 FY 25-26 Construction Starting in Q1 FY25-26
2091506-02 Bob Jones Trail Groundwater Well
Drilling (Packet 2) Q2 FY 25-26 Construction Starting in Q4 FY24-25 2000117 Cultural Arts District Parking Structure $ 47,000,000.00 Q3 FY 25-26 Construction Ongoing 2000054-01 Righetti Community Park $ 13,668,912.00 Q1 FY 26-27 Construction Starting in Q1 FY25-26
Completed & Ongoing Construction Capital Projects (January 2025-March 2025)

24 Oracle Account
Number Project

TOTAL ESTIMATED

PROJECT COST
(Construction Phase)
Estimated Construction
Start Date Additional Comments
2091252 Prado Road Bridge and Road Widening $28,210,000 Q2 FY 27-28 Working on regulatory permits
and 90% constuction
documents.
2091503 California and Taft Roundabout $4,000,000 Q2 FY 25-26 Right of way acquisition in
progress and finalizing design
documents.
2091613 Prado Road Interchange $124,000,000 Q2 FY 29-30 Value Analysis phase underway
Status of Major and Legacy Projects in Design

25 Major City Goals Update
Two Major City Goal tasks had an original completion date in the third quarter:

Climate Action, Open Space, & Sustainable Transportation | Preserve and Enhance Convenient and Equitable Alternative and Sustainable Transportation Options | Strategic Approach 4.3a | Active Transportation Plan (ATP) Tier 1 Network – Higuera Complete Streets Project
Responsible Departments: Public Works
Original Completion Date: FY 2024-25 Q3 | Updated Completion Date: FY 2026-27 Q1 Status Update: This project has been delayed to allow for further feasibility analysis and design refinement based on community input requests to explore additional improvements on the Madonna Road Overpass and to refine traffic calming strategies in the Meadow Park Neighborhood. The project is on track to advertise by Q2 FY 2025-26, with completion anticipated by Q1 FY 2026-27.

Climate Action, Open Space, & Sustainable Transportation | Preserve and Enhance Convenient and Equitable Alternative and Sustainable Transportation Options | Strategic Approach 4.3b | Active Transportation Plan (ATP) Tier 1 Network – South / King Crossing Responsible Departments: Public Works
Original Completion Date: FY 2024-25 Q3 | Updated Completion Date: FY 2025-26 Q4 Status Update: This project has been delayed due to staffing vacancies in the Transportation Planning-Engineering Division and the need to revise curb ramp designs due to changes in accessibility design standards. The project is on track to advertise for construction FY 2025-26 Q1, with completion Q4 2025-26.

Item 6d
Department: Information Technology
Cost Center: 1101
For Agenda of: 5/20/2025
Placement: Consent
Estimated Time: N/A
FROM: Greg Hermann, Deputy City Manager
Prepared By: Rebecca Cox, Business Analyst
SUBJECT: APPROVE A THREE-YEAR CONTRACT RENEWAL FOR MICROSOFT OFFICE 365 GOVERNMENT PLAN SUBSCRIPTION LICENSES

RECOMMENDATION

1. Approve a three-year contract renewal for Microsoft Office 365 Government Plan subscription licenses; and

2. Per Municipal Code 3.24.060E, authorize waiver of formal bids to purchase Microsoft Office 365 subscription licenses through the cooperative agreement under the Licensed Support Provider (LSP) Agreement No IT ARC-00934 for Microsoft products and services under Microsoft Enterprise Agreement (EA) – 8084445 between the County of Riverside and Dell Marketing, L.P.; or below the cooperative purchasing net cost within the same terms and conditions; and

3. Authorize the City Manager to approve related Purchase Order Requisitions through the duration of the agreement.

POLICY CONTEXT
Per the City’s Financial Management Manual, City Council approval is required for purchases of this type that are over $200,000 through the duration of the contract. Utilizing the County of Riverside Master Agreement allows the City to waive formal bidding as set forth in the Municipal Code, section 03.24.060 Bidding procedures – use of, not required and “when the purchase will be made cooperatively with one, or more, other units of government or from a local dealer within the city limits that can provide the same brand, model and configuration of the item(s) identified in the cooperative purchase agreement(s) at or below the cooperative purchasing net cost within the same terms and conditions,” and compliant with the purchasing policy, Section 204, No-Bid Purchasing – Cooperative Agreement Purchasing.

DISCUSSION
Background
Microsoft Office 365 productivity software is one of the City’s most critical systems and includes Microsoft Access, Excel, Exchange, OneDrive, OneNote, Outlook, PowerPoint,

Item 6d
Publisher, SharePoint, Teams and Word. The City migrated to the Office 365 cloud-based platform subscription in 2016. The subscription-based service continues to allow the City to leverage new products as they are released without incurring additional costs.

Subscription based licensing ensures the City’s business use of the Office Suite will evolve in real time with enhancements and maintenance to the software.

The city uses the County of Riverside Agreement for Microsoft licensing because it offers a proven, cooperative purchasing framework widely adopted by public agencies across California to access Microsoft products and services. This agreement combines flexibility with cost savings, allowing each participating agency to create individual enrollments tailored to their specific needs while benefitting from discounted, volume-based pricing negotiated through statewide demand aggregation. Valid through October 31, 2027, the contract ensures long-term price stability and uninterrupted service. Additionally, it includes a comprehensive suite of benefits such as reduced paperwork through consolidated documentation, standardized government-level pricing, free onboarding via Microsoft FastTrack, and no-cost security incident support. Agencies also gain flexibility in adjusting hosted service commitments annually and Software Assurance like automatic version upgrades, roaming use rights, spread payments, and step-up licensing. These additional benefits are not available to agencies procuring through other contract vehicles and add tremendous value to the City, particularly to adjust service commitments for hosted services within the term of the agreement.

The proposed renewal includes a total of 585 licenses for a three-year term with annualized payments of $214,639.32. (Attachment A)
Previous Council or Advisory Body Action
The current license subscription expiring June 30, 2025, was approved for purchase as part of the consent agenda at the June 21, 2022, City Council Meeting.

Public Engagement
This is an administrative item, so no outside engagement was completed. Public comment can be provided to the City Council through written correspondence prior to the meeting and through public testimony at the meeting.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended actions 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:

Item 6d
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $184,919.30 $ $ $184,919.30
Water Fund $ 14,860.01 $ $ $ 14,860.01
Sewer Fund $ 14,860.01 $ $ $ 14,860.01
State
Federal
Fees
Other:

Total $214.639.32 $ $ $214,639.32
Funding for the current fiscal year was approved through the 23-25 Financial Plan, and 2024-25 budget appropriation. Water and Sewer Enterprise Funds contribute directly to their license fees as budgeted in the Financial Plan. The previous Microsoft subscription licensing agreement included 570 licenses at an annual rate of $331.80 per license. The current renewal reflects an increase of 15 licenses, bringing the total to 585, with the perlicense cost raising to $355.32. Additionally, this renewal includes 14 G5 licenses and expanded cloud storage. As a result, the total annual cost is increasing from $189,126 to $214,639.32. This cost was budgeted for in the proposed 25-27 Financial Plan.

ALTERNATIVES
Do not renew subscription. Migrating infrastructure back on-premises and returning to Microsoft Office Suite (non-cloud-based) would require a significant amount of staff time and effort and may not be technically feasible. If the City were able to migrate services back to on-premises infrastructure, CIP upgrades on a three-year replacement cycle would need to be added back to the IT CIP forecast. Additionally, the organization would not receive big feature updates made available to subscription holders, limiting benefits and creating a steeper learning curve upon upgrading.

Direct staff to issue an RFP. Authorize the release of an RFP to solicit Microsoft subscription licensing and authorize the City Manger to enter a multi-year contract and approve related purchase orders. The current licensing agreement will expire on June 26, 2025, providing a four-week period to advertise and award the contract. If staff is unable to issue and award an RFP and get a signed contract in place before the expiration of the City’s current licensing agreement, access to Microsoft products would likely be disrupted.

This would make it difficult for the city to conduct day-to-day business.

ATTACHMENTS
A – Quote from Dell for Microsoft Enterprise Agreement Renewal

Sam Andrews
[email protected]
512.720.4469
Customer: City of San Luis Obispo
Contract: Riverside County Master Agreement - PSA-0001524 (8084445) Date of Issue: 5/2/2025 Microsoft Enterprise Agreement (EA) #: renewal of 5615969 (exp 6/25) Quote Expires: 6/15/2025 Product Description Mfg# Quantity Months Unit Price Ext. Price Enterprise Online Services Products
O365 G3 GCC Sub Per User AAA-11894 585 12 $20.88 $146,577.60 EntMobandSecE3Full GCC ShrdSvr ALNG SubsVL MVL PerUsr AAD-32907 585 12 $8.73 $61,284.60 $0.00
Additional Online Services Products
Audio Conferencing Select Dial Out GCC Sub Add-on NYH-00001 585 12 $0.00 $0.00 M365 G5 eDiscovery & Audit GCC Sub Add-on 8RI-00005 14 12 $4.63 $777.84 O365 Extra File Storage GCC Sub Add-on Extra Storage 1 GB M9T-00002 2048 12 $0.18 $4,423.68 Planner & Project P3 GCC Sub Per User 7MS-00001 1 12 $23.22 $278.64 Project P1 GCC Sub Per User PF1-00002 14 12 $7.72 $1,296.96 $0.00
Annual Payment $214,639.32
Notes: Total Annual Payment Yr 1 $214,639.32
Total Annual Payment Yr 2 $214,639.32
Total Annual Payment Yr 3 $214,639.32
Total of 3 years of Payments $643,917.96
Notes:

Quote prepared by: Chris A Johnson
Monthly Subscriptions

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 6e - AUTHORIZATION TO ADVERTISE THE RIGHETTI COMMUNITY PARK PROJECT, SPECIFICATION NO. 2000054
Staff received the following questions, regarding the Authorization to Advertise the Righetti Community Park. The questions are listed below in bold with staff’s response shown in italics:
1) Is a vehicle assigned specifically to each of our parks? Each Parks Maintenance Specialist is assigned a City vehicle, and each Specialist maintains between one and four parks, depending on size of the facilities.
2) How is maintenance staffing (or hours of staff time) determined to maintain each park? Is there a square footage calculation or formula we use based on the types of amenities provided at the park?
Staff uses nationally recognized productivity standards developed by the National Recreation and Park Society and the Professional Grounds Management Society. These standards provide the average time it should take a skilled person to perform a task, based on units of measure (e.g. acres, square footage, linear footage, etc) and method of work being performed (e.g. by hand, by equipment, etc), also factoring in the level of attention the park will require on a scale of 1-5, with level 1 being the highest (e.g. Mission Plaza) and level 5 being the lowest (e.g. open space). This data is then incorporated into the Maintenance Management Plan as part of the formula to determine total labor hours and FTE values.

For the base phase of the Righetti Community Park, one full-time Parks Maintenance Specialist will be required, with an annual maintenance cost of approximately $140,000 (this cost includes the staffing, utilities, and materials and supplies). Once all phases of the park are complete, the total annual maintenance cost is projected at approximately $225,000, which would support two full-time positions, utilities, custodial services, and ongoing materials and supplies.

Insert Report Title Page 2
3) Why is the dog park area not included in the Righetti Community Park? And would the City be interested in partnership with local service groups to help fund the dog park in order to speed up the timeline? This response is to a question posed from the non-profit community group, “Friends of SLO City Dog Parks”, regarding their potential to be involved and initiating the work on the dog park area at the Linear Park parcel in the Righetti Ranch development. The City has determined that the Righetti Community Park is the main priority for the available funding to initiate the park projects within the Orcutt Area developments. The overall planned park system consists of the Community Park, “Linear Park”, and “Pocket Park”, as well as the newly opened Righetti Hill Open Space.

The Community Park located at the intersection of Tiburon and Ranch House Road has been prioritized into multiple phases based on available funding and community priorities established through public outreach. Phase 1 of the project consists of a comprehensive all-ages and inclusive playground, supporting restrooms, large picnic and shaded area, turf recreational fields, walking and biking paths, and lower parking lot. The Linear Park located on Righetti Ranch Road and Tiburon, has been designed to support a community garden, dog park, and supporting parking area. The Linear Park is not part of the City’s initial Phase 1 and has been designed as a separate project from the Community Park.

Staff are interested in the proposal from “Friends of SLO City Dog Parks” and will review in more detail the proposal received on May 19, 2025. The City has had previous success working with local community service groups such as Rotary and Kiwanis clubs to benefit our community through these types of partnerships resulting in upgrades and enhancements in a variety of areas with San Luis Obispo, such as Eto Park, Meadow Park Gardens, Community Garden at Laguna Lake Golf Course, as well as the Mitchell Park gazebo, Laguna Lake Park picnic gazebo, and Mission Plaza Amphitheater.

Staff are planning to schedule to meet with the representatives of “Friends of SLO City Dog Parks” in the coming weeks to review and discuss this partnership opportunity.

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Department: Public Works
Cost Center: 5009
For Agenda of: 5/20/2025
Placement: Consent
Estimated Time: N/A
FROM: Matt Horn, Public Works Director
Prepared By: Wyatt Banker-Hix, Supervising Civil Engineer SUBJECT: AUTHORIZATION TO ADVERTISE THE RIGHETTI COMMUNITY PARK PROJECT, SPECIFICATION NO. 2000054

RECOMMENDATION

1. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing Various Fund Reappropriations and Transfers to Support the Righetti Community Park Project, Specification Number 2000054, and approving an Addendum to the Orcutt Area Specific Plan Environmental Impact Report for the Righetti Community Park Project.”

2. Approve the Project Plans and Special Provisions for the Righetti Community Park, Specification 2000054; and,

3. Authorize staff to advertise for bids; and,

4. Authorize the City Manager to award the Construction Contract pursuant to Section

3.24.190 of the Municipal Code, if the lowest responsible bid is within the Engineer’s Base Bid Estimate of $9,950,000; and,

5. Authorize the City Engineer to issue Contract Change Orders, provided they remain within the approved project budget or any amended budget subsequently authorized by the City Manager; and,

5. Authorize the Finance Director to:
a. Transfer funds to the Righetti Community Park Capital Project (Account No. 2000054) from the Development Related Park Improvements project (Account No. 2000057 – Orcutt Area Tasks), as follows:
i. $304,637 in Capital Outlay Funds (LRM) from Account No. 2000057-00 ii. $3,987,138 in Capital Outlay Funds (LRM) from Account No. 2000057-02 iii. $1,558,970.27 in Orcutt Area Specific Plan (OASP) Park Improvement Funds from Account No. 2000057-03
iv. $19,802.04 in OASP Park Improvement Funds from Account No. 2000057-03
v. $14,850.80 in OASP Park Improvement Funds from Account No. 2000057-04
vi. $783,512.85 in Capital Outlay Funds (LRM) from Account No. 2000057-05 vii. $500,000 in OASP Park Improvement Funds from Account No. 2000057- 05

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b. Disappropriate $1,136,522 in Park Improvement Impact Fee – Citywide Fund back to the fund’s unallocated balance, as follows:
i. $836,522 from Account No. 2000057-02
ii. $300,000 from Account No. 2000057-04
c. Disappropriate $180,197.96 in OASP Park Improvement Funds from the Development Related Park Improvements project (Account No. 2000057-03), which was overcommitted.

6. Approve the Addendum to the Orcutt Area Specific Plan Final Environmental Impact Report; and,

POLICY CONTEXT
On May 17, 2022, City Council approved a Purchasing Policy Update to the Financial Management Manual that required Council approval for Public Projects that cost over $200,000.

The Righetti Community Park Project supports two of the City Council’s adopted Major City Goals: Infrastructure and Sustainable Transportation by delivering public park infrastructure to serve new housing areas within the Orcutt Area Specific Plan (OASP1).

The park supports key recreational amenities and aligns with the goals outlined in the Parks & Recreation Blueprint2, which aims to provide park facilities within a 0.5-mile, or 10-minute walk, of every neighborhood to enhance connectivity and accessibility. Access to high-quality parks and open space is a key component of complete neighborhoods and contributes to long-term community well-being.

The OASP Parks Impact Fee was established in March 2010 by City Council Resolution No. 102223to fund improvements to the OASP park system.

REPORT-IN-BRIEF
The Righetti Community Park is a major new recreational facility identified in the OASP and is the largest of the three planned park sites intended to serve both the Orcutt Area and the broader San Luis Obispo community. The project includes a broad range of active and passive recreation amenities and has been shaped by extensive community engagement, consultant-led design development, and input from the Parks and Recreation Commission (PRC).

This report seeks Council authorization to advertise the project for construction bids. The project is organized into a Base Bid and four Additive Alternates to provide flexibility to award the base bid and additive alternates if favorable bids are received within available budget, and to streamline the construction of later phases of the project as funding is identified and as shown in the draft 10-year Capital Improvement Plan4. The Base Bid

1 See page 8-4 for a conceptual description of the Park Facilities 2 See page 82 for the Access Standards to Community Parks like the proposed facility 3 See Page 13 – multiple resolutions bundled in this link 4 See Page 50, Appendix A

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includes core infrastructure such as restrooms, parking, a multi-use playing field, and multi-age group playground. The Additive Alternates include a pickleball complex, bocce ball courts, a bike pump track, tennis courts, and additional landscaping, bridges, and shaded gathering areas. If the Additive Alternates cannot be funded, receiving bids for those areas provides the City additional accuracy in budgeting for those components of the parks as future phased construction improvements, aligned with community priorities.

As discussed in the Fiscal Impact Section of this report, a portion of the funding needed to construct the Base Bid of the Righetti Community Park is included in the 2025-27 Financial Plan in Fiscal Year (FY) 2025-26 and therefore construction of this project is contingent on approval of the 2025-27 Financial Plan. Approval of the recommended actions will allow the project to proceed to construction in Fall 2025 and deliver longanticipated park improvements to the Orcutt Area and surrounding neighborhoods.

This report requests that funds be disappropriated from the project account to be used in another Parks project (Emerson Park) which has a grant deadline and a local matching fund requirement. Further, staff recommends that Council authorize staff to advertise plans for construction and approve an Addendum to the EIR. The disappropriation and Addendum have both been memorialized via proposed Resolution.

DISCUSSION
Background
The Righetti Community Park is one of several public parks and open space improvements identified in the OASP, a long-range planning effort guiding development in one of the City’s primary residential expansion areas. The Orcutt Area has been recognized as a potential growth area since the 1970s. In 1998, property owners submitted a draft specific plan to the City, initiating a formal planning process that culminated in the City Council’s adoption of the OASP and certification of the Final Environmental Impact Report (FEIR) in March 2010 (Resolution No. 101545, 2010 Series; SCH #2004011059). The OASP envisioned approximately 1,000 new residences across 230 acres, with nearly 45% of the area preserved as open space and parkland. The plan outlines6 a connected system of parks, trails, and open spaces to support a livable, walkable community.

Righetti Community Park, referred to as the “Neighborhood Park” in the OASP, was identified early as a key public amenity intended to serve both the Orcutt Area and the broader San Luis Obispo community. The residential development of the surrounding area, now known as Righetti Ranch, began in 2018 and is approximately 95% complete.

The Orcutt Area Specific Plan (OASP) identifies the following park and recreation areas:

1. Righetti Community Park (Neighborhood Park) – A 12.39-acre developed park providing amenities such as playing fields, courts, playgrounds, and restrooms.

5 See Page 3 – multiple resolutions bundled in this link 6 See Page 1-5 “Specific Plan Features”

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This fulfills the City's Parks and Recreation Element requirement for developed parkland in annexation areas.

2. Trail Junction Park / Pocket Parks – Smaller parks totaling 4.3 acres, designed to serve as trail connections and community gathering spaces.

3. Righetti Hill Open Space – A 48-acre open space dedication for permanent protection, including trail access.

4. Creek Corridors and Floodable Terrace – Natural open space areas totaling approximately 11.5 acres, which include riparian corridors and drainage features.

5. Private Recreation Areas – Approximately 1.55 acres of playgrounds located within multi-family developments, which may be counted toward parkland requirements with Council approval.

In total, the plan accounts for 20.72 acres of parkland (excluding some additional open space areas), meeting or exceeding the City's standards for parkland dedication based on projected population growth.

Initial conceptual designs for the parks were prepared by the developer, Ambient Communities, and their design team. These concepts were presented to the Parks and Recreation Commission (PRC) in a series of public meetings on April 6, May 4, and June 1, 2016. These hearings provided the opportunity for both the Commission and community members to review park layouts, amenities, and funding considerations. At the June 1 meeting, the PRC formally recommended that the City Council approve the proposed improvements, prioritizing the Neighborhood Park. The Commission also directed staff to update the 2010 Orcutt Area Public Facilities Financing Plan (PFFP7) to reflect revised construction cost estimates.

Many of the development fees had not been updated since 2007, so in 2016, Staff provided an update to Council on the increasing costs of the OASP infrastructure, including the parks. According to the 2016 PFFP project update, the total projected cost to build the Righetti park facilities including the Neighborhood Park, Trail Junction Park, Pocket Park, and Linear Park was $6,054,070. In contrast, the OASP PFFP originally allocated $3,948,000 for park development. This results in a shortfall of $2,106,070 as of 2016. This gap was attributed to updated cost estimates, project scope expansions, and the provision of credits to developers who build their own park amenities, reducing the available pooled funding for shared park infrastructure.

The OASP park projects were first programmed for funding in the 2019–21 Financial Plan and has continued to receive financial support through the 2025-27 Financial Plan. The Righetti Community Park (Neighborhood Park) is the most advanced or developed of the four OASP parks in terms of design and readiness for construction. The Linear Park and Pocket Park remain in earlier plan development phases, with future construction planned in subsequent Financial Plans. The Draft 10 Year Capital Improvement Plan shows the Pocket Park is currently funded in FY 2027, and the Linear Park in FY 2035.

7 See page 8-1

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The current cost estimate for all park facilities (Community, Linear and Pocket) is now estimated at $31.5 million spread over several Financial Plans. The increase in cost is the result of the unprecedented inflation witnessed since 2016 as well as the significant refinements to the project scope as design efforts began.

Together, these projects reflect the City’s commitment to realizing the vision of the OASP:
a complete, connected, and recreation-rich neighborhood that meets the needs of current and future residents.

Righetti Community Park Project Design
The Righetti Community Park is a major new recreational asset identified in the OASP to support the Orcutt Area and the broader community. The project will deliver high-priority amenities envisioned in the OASP that have been shaped by public input and PRC feedback. This park is one of several planned in the OASP and is intended to provide active recreation space for nearby neighborhoods and residents citywide.

The current scope of the Community Park project includes a wide range of amenities, such as:
 Multi-use playing field(s)
 Multi-age playground (0-5 and 5-12 years of age)
 Eight pickleball courts and two tennis courts
 Two basketball courts, bocce courts, and a bike pump track  Picnic areas, shade pavilion, and seating
 Walking and bike paths
 Three pedestrian bridges connecting various park zones  Two parking lots and two restroom buildings
The current design of the Righetti Community Park aligns with the OASP, while incorporating refinements into the design. The OASP outlines that the park facilities “may” include features such as a playground for young children, soccer and baseball fields, tennis courts, basketball courts, sand volleyball courts, picnic tables, and restrooms. The updated design remains consistent with this flexible vision, adapting certain amenities to better reflect evolving recreational preferences. For example, the current design of the Righetti Community Park replaces originally proposed baseball fields with a bike pump track, replaces some tennis courts into pickleball courts, and substitutes the sand volleyball court with bocce ball courts. To help visualize these refinements, below is a side-by-side comparisons of the current plan and the original neighborhood park plan.

The changes reflect the evolution of the park through the design and public outreach process.

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OASP vs Current Plan
Figure 1 – OASP vs Current Community Park Layout
To align with available funding and provide flexibility to award additional additive alternates if sufficient funding exists, the project has been structured with a Base Bid and four Additive Alternates. If insufficient funding exists to award any of the additive alternates, those alternatives would become future phases of the Community Park and funding for those future phases is currently programmed in the Draft 10 Year CIP. Due to current funding available, staff anticipates awarding only the Base Bid, and for that reason has programmed each Bid Alternative into future Financial Plans. Staff hopes to secure better prices on these Bid Alterantives to better program funds for future construction.

With input by the PRC and staff review of the priorities from the Community Survey and Community Forum, the Base Bid focuses on essential infrastructure and amenities including multi-age playground, shaded seating areas, playing field, two pedestrian bridges, multi-use paths, the lower parking lot, and finally the main restroom.

Additive Alternates include additional high-demand recreational features such as:
 A dedicated pickleball court complex (Alternate #1 – Phase 2),  A dual-purpose basketball/futsal court area, bocce courts, a second restroom, and the upper parking lot (Alternate #2 – Phase 3),
 A bike pump and skill track (Alternate #3 – Phase 4), and  Tennis courts, a shaded picnic lawn area, a third pedestrian bridge, and additional parking (Alternate #4 – Phase 5).

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Figure 2 – Community Park Alternates Diagram
These phased options provide flexibility to deliver the most critical elements of the park now while allowing enhancements to be added as resources become available. This approach also reflects priorities identified from community feedback gathered over the course of the project. Each bid alternate would become its own standalone Capital Project, following City processes for bid, award, and construction.

The PRC has been closely involved throughout the process—from the initial conceptual design review in 2016 through ongoing updates and phasing discussions. The PRC’s input helped guide the refinement of amenities, layout, and prioritization of elements for construction and will continue to be updated as the project progresses.

Previous Council or Advisory Body Action
 October 1, 2002 – City Council approved the project description for the Orcutt Area and authorized preparation of a Specific Plan and Environmental Impact Report (EIR).
 February 4, 2003 – City Council approved the EIR scope and shared funding plan and endorsed a refined planning process to incorporate community and stakeholder input.

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 February 12, 2008 – City Council received the Public Hearing Draft of the OASP and Draft Environmental Impact Report (DEIR), initiating formal public review. The Council authorized the plan to be reviewed by multiple advisory bodies including the Parks and Recreation Commission, Bicycle Advisory Committee, Cultural Heritage Committee, Architectural Review Commission, and Planning Commission.
 2008–2009 – Advisory body hearings were held, and significant community engagement occurred. The Planning Commission held ten public hearings over two years and forwarded a recommendation of approval to the City Council.  March 2, 2010 – City Council adopted the OASP and certified the Final Environmental Impact Report (Resolution No. 10154, 2010 Series). This action included General Plan amendments and direction to initiate implementation steps, such as annexation and fee program development.
 August 17, 2010 – City Council reviewed the proposed annexation of the OASP area and directed staff to proceed with pre-zoning, fee program development, and annexation processing.
 May 19, 2015 – City Council approved multiple amendments to the General Plan and OASP. The Council also approved a Vesting Tentative Tract Map for the Righetti project (VTM #3063), which established park, open space, and residential parcel boundaries. The action also adopted a Mitigated Negative Declaration that tiered from the 2010 OASP FEIR and included site-specific mitigation measures related to parks.
 April 2016 – The PRC reviewed the initial conceptual designs for the Righetti park system submitted by the developer of the Righetti subdivision and provided feedback on park layout, phasing, and amenity ideas.
 November 15, 2016 – City Council received a report on updates to the OASP PFFP, which reflected revised park cost estimates and confirmed that collected OASP fees would be insufficient to fully fund planned improvements. The report noted that park development would require additional funding sources and Cityled implementation to address the identified funding gap and deliver the parks as envisioned in the Specific Plan.
 December 12, 2017 – City Council approved corrections to the OASP park fees, including the separation of the Park Improvement Fee from the Parkland Acquisition In-Lieu Fee to improve financial tracking and ensure equitable reimbursement to the Righetti Ranch developer. The update corrected a formula error in the in-lieu fee calculation and clarified that the City would be responsible for constructing the OASP parks, using collected impact fees to fund the improvements and reimburse the General Fund as needed. The update reaffirmed the City’s intent to deliver 16.5 acres of public parkland consistent with the adopted Specific Plan.
 October 16, 2018 – City Council approved an update to the OASP PFFP. While the estimated cost for park improvements remained unchanged, the update acknowledged funding risks associated with inflation and design complexity.

Council approved use of Fee Credit Agreements to mitigate these risks, preserve financial flexibility, and support the City’s ability to deliver OASP infrastructure including public parks.

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 May 3, 2023 – The PRC reviewed the conceptual layouts developed by the City’s design consultant for the Righetti Community, Linear, and Pocket Parks that were provided during the April 2023 Community Forum specifically held to review these designs. Feedback was provided regarding updated design elements, including additional parking, playground size, and accessibility considerations for all parks.

A preferred design for each park was identified.
 June 14, 2023 – The PRC received an updated status report based on public feedback and staff input on the Righetti Ranch Park System, including final conceptual layouts for the Community Park, Linear Park, and Pocket Park.

Recommendations were made for design adjustments, including adding more parking, modifying the dog park layout, and incorporating specific features such as water stations, larger playground areas, and accessible seating.  September 6, 2023 – The PRC reviewed two conceptual playground designs for the Community Park and selected the “Unity” themed layout. This selection guided final playground construction document preparation. The commission also confirmed the final preferences for park amenities, including preferred options for parking, seating, and play structures. Staff was directed to move forward with the design process based on the updated feedback.

Public Engagement
The design of the Righetti Community Park has been developed through an extensive multi-year public engagement process, including community forums, online surveys, outreach to nearby residents and neighborhood groups, and regular PRC updates from 2021 through 2025.

In 2023, the City launched a focused outreach effort to inform the design of the Community Park, Linear Park, and Pocket Park. This included:
 A Community meeting on April 11, 2023, held at the Ludwick Community Center (LCC), where conceptual designs were presented and discussed with residents.  An Online Survey (open April 10–May 10, 2023) that gathered public input on park priorities, layout preferences, and desired amenities for the three park sites, including the open space trail system.
 A series of PRC meetings (May 3, June 14, and September 6, 2023), including associated public correspondence and public comment opportunities.

As detailed design work was completed, construction cost updates completed, and funding plans were updated, it became apparent that the Righetti Community Park had experienced significant cost inflation and would likely need to be phased in order to be able to deliver the amenities the community desires within the fiscal constraints of the City’s Capital Improvement Plan. Since the 2016 Park update, the City has seen significant inflation as well as further refinement in project scope, resulting in significant cost increases.

This phasing plan became a priority for the design team in late 2023, as staff worked to align the construction approach with available funding. Community engagement related

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to phasing included:
 December 6, 2023 – PRC received a Director’s Report introducing the need for project phasing.
 June 5, August 7, and September 4, 2024 – PRC received updates on revised phasing options and potential design adjustments.
 November 6, 2024, and February 5, 2025 – PRC received updates on refined phasing diagrams and construction cost estimates.
 January 23, 2025 – A visual phasing layout was presented at the City’s Community Forum for the 2025–27 Financial Plan, allowing the public to see the updated construction strategy and timeline.
 January 29, 2025 – Parks and Recreation staff sent a project update email with the phasing diagram to the Homeowners Association (HOA) representing residents in the surrounding Orcutt Area.
 February 5, 2025 – PRC received updates within the Directors Report confirming the phased elements and plan for Community Park phase 1 and Add Alts to be included in the City’s 2025-27 Financial Plan for Council review.  March 20, 2025 – A follow-up email with a narrative explanation of the phasing approach was sent to the HOA to address questions and clarify next steps.

The intent of this engagement process was to ensure the phasing strategy reflects community expectations within the fiscal constraints of the City. It also provided multiple channels for input from stakeholders, including residents, the PRC, and neighborhood groups. Public outreach will continue as the project moves into construction and additional park phases are implemented.

Construction is anticipated to begin in fall of 2025. The Base Bid portion of the project is expected to take approximately 18 months to complete.

CONCURRENCE
The PRC has been actively engaged in the development of the Righetti Community Park project since the initial conceptual designs were presented in 2016. The Commission provided guidance on layout, amenity selection, and accessibility throughout the design process and formally selected the playground concept in September 2023.

City staff from the Public Works, Community Development, Fire, Utilities, and Parks and Recreation departments have worked collaboratively throughout the design and planning phases to ensure the project complies with the OASP, meets City design standards, and the planned improvements can be maintained for the long term use and benefit of the community. Additional coordination with the Utilities Department has focused on establishing recycled water connections for irrigation, while the Finance Department has been engaged to align available funding with the proposed construction phasing.

Item 6e

ENVIRONMENTAL REVIEW
Environmental impacts associated with the Righetti Community Park project were previously programmatically evaluated in the Final Environmental Impact Report for the OASP (Final EIR; SCH #2004011059), which was certified by the City Council on March 2, 2010 (Resolution No. 10154). The EIR evaluated a variety of park and recreation facilities as part of the Specific Plan, including the proposed community park site and adjacent creek corridor. The Final EIR and adopted Mitigation, Monitoring, and Reporting Program defined mitigation measures for resources including biological habitats, air quality, and cultural resources. Subsequently, the planned parks were considered within the context of a residential development evaluated in the Initial Study – Mitigated Negative Declaration (IS-MND) adopted in May 2015 for the Righetti Ranch and Jones Ranch residential developments (Tract Maps 3063/3066), which anticipated the park site in a similar location with a slightly larger footprint.

The park improvements planned for construction substantially align with planned improvements envisioned for the original neighborhood park in these previous environmental documents. Therefore, an Addendum to the 2010 OASP Final EIR (Attachment E) has been prepared that summarizes the programmatic environmental review of the neighborhood park completed in the 2010 OASP Final EIR, describes the project-level details now available in the design documents for the community park, identifies the minor differences between the proposed community park and neighborhood park described in the OASP Final EIR, confirms the applicability of previously adopted mitigation measures, and documents that none of the conditions requiring preparation of a Subsequent EIR or Negative Declaration described in CEQA Guidelines Section 15162 are met by based on the design and components of the proposed community OASP park project.

The Addendum concludes that:

1. The Righetti Community Park project is consistent with the OASP and the assumptions evaluated in the 2010 Final EIR;

2. No new or more severe environmental impacts would result from the proposed design;

3. No new significant information or changed circumstances exist that would require further review; and

4. All applicable mitigation measures continue to apply and remain effective.

The Addendum documents the design-level details now available since the conceptual park layouts were previously evaluated, and these details consist of minor changes. As documented in the Addendum, there are no substantial changes proposed in the project which would require major revisions of the 2010 OASP Final EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. Implementation of applicable mitigation measures required in the 2010 OASP Final EIR continue to be required as part of the proposed community park project.

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Therefore, the project and proposed Addendum are consistent with the requirements of Sections 15162 and 15164 of the CEQA Guidelines, and subsequent or supplemental environmental review is not required. Mitigation measures identified in the Mitigation Monitoring and Reporting Program (MMRP) for the OASP Final EIR continue to be tracked, enforced, and verified by City staff. Approval of the OASP EIR Addendum and an acknowledgement that no further environmental review is required, in accordance with CEQA Guidelines Sections 15162 and 15164, is included in the proposed Resolution.

FISCAL IMPACT
Budgeted: Yes Budget Year: 2025-26
Funding Identified: Yes
The Orcutt Area Parks project is included in the 2025–27 Financial Plan, which is anticipated to be adopted by Council at the June 17, 2025, Council meeting and go into effect on July 1, 2025. The Financial Plan identifies funding for the Righetti Community Park phased implementation with funding in the first fiscal year (FY 2025-26).

Originally intended to be funded through development fees, the Orcutt Area Parks project faced a significant funding shortfall as the revenue from fees collected proved insufficient to fully finance the Righetti Ranch Park development as anticipated in the OASP. With more than 95% of the fees collected, $8.5 million has been appropriated to the project, including $3.4 million from the OASP Park Improvement Funds and $5.1 million from Local Revenue Measure Capital Outlay Funds. A portion of this funding has already been used to support the design phase, leaving a remaining project balance of approximately $7.35 million.

Staff recommends bidding the complete Righetti Community Park project—including the base bid and Alternates 1 through 4—to maximize potential awardable work and gather accurate cost data for future financial planning. Once bids are received, staff will better understand the costs associated with each component and can return to Council during the 2027–29 Financial Plan process with refined estimates and funding strategies. This approach supports responsible progress while aligning with long-term capital planning goals. Total Costs for the Bid and each Alternate are summarized below:

Base Bid: $13.7 million
Add Alt 1: $2 million
Add Alt 2: $6.1 million
Add Alt 3: $1.3 million
Add Alt 4: $4.2 million
Grand Total: $27.4 million
Table 1 below presents the estimated construction cost for the full project, excluding cost escalation. Actual costs will be higher due to inflation, labor and material price increases, and other market factors over time.

Item 6e
Table 1: Righetti Community Park, Base Bid + 4 Additive Alternatives While staff recommends bidding the complete Righetti Community Park project, including the base bid and Alternates 1 through 4, it is highly likely that the project base bid is the only phase of work that will be awarded due to funding constraints. Table 2 below shows a more granular look at the cost shown in Table 1 above for the base bid.

OASP Park Fund Capital Outlay Fund - LRM
Righetti Community
Park (2000054-01)
Righetti Community Park
(2000054-01)
Base Engineer Estimate $ 2,093,623 $ 7,856,377 $ 9,950,000 Contingencies (20%) $ - $ 1,990,000 $ 1,990,000
Construction Management $ 1,300,000 $ 1,300,000
Testing, Cons. Support, Env, Comms, Printing $ 428,912 $ 428,912 BASE TOTAL $ 2,093,623 $ 9,846,377 $ 13,668,912
Additive Alternative 1 $ 1,480,000 $ 1,480,000
Contingencies (20%) $ - $ 296,000 $ 296,000
Construction Management $ 204,000 $ 204,000
Testing, Cons. Support, Env, Comms, Printing $ 96,000 $ 96,000 Additive Alternative 1 TOTAL $ - $ 2,076,000 $ 2,076,000 Additive Alternative 2 $ 4,560,000 $ 4,560,000
Contingencies (20%) $ - $ 912,000 $ 912,000
Construction Management $ 415,000 $ 415,000
Testing, Cons. Support, Env, Comms, Printing $ 194,000 $ 194,000 Additive Alternative 2 TOTAL $ - $ 6,081,000 $ 6,081,000 Additive Alternative 3 $ 835,000 $ 835,000
Contingencies (20%) $ - $ 167,000 $ 167,000
Construction Management $ 202,000 $ 202,000
Testing, Cons. Support, Env, Comms, Printing $ 94,000 $ 94,000 Additive Alternative 3 TOTAL $ - $ 1,298,000 $ 1,298,000 Additive Alternative 4 $ 3,180,000 $ 3,180,000
Contingencies (20%) $ - $ 636,000 $ 636,000
Construction Management $ 289,000 $ 289,000
Testing, Cons. Support, Env, Comms, Printing $ 135,000 $ 135,000 Additive Alternative 4 TOTAL $ - $ 4,240,000 $ 4,240,000 TOTAL PROJECT (BASE + 4 Bid Alts) $ 2,093,623 $ 23,541,377 $ 27,363,912 Righetti Community Park, Specification No. 2000054-01
Total

Item 6e
Table 2: Righetti Community Park, Base Bid Only
As part of the 2025-27 Financial Plan reconciliation of park related development impact fees, staff has identified two park related development impact fee adjustments that are necessary.

1. An over-commitment of $180,197 in OASP impact fees. This means that the City has appropriated more funding than has been collected in revenue to date. Staff is recommending that $180,197 in OASP impact fees be disappropriated.

2. Adjustment of the use of Citywide Park Improvement Impact Fees. These funds are necessary in order to match the Grant Funding received for the Emerson Park project, slated for construction in 2026. Staff is recommending that $1,136,522 in Citywide Park Improvement Impact Fee be disappropriated to ensure timely delivery of that project.

Table 3 below shows these adjustments to impact fees and the funding sources that are planned to be used to fund the base bid.

OASP Park Fund Capital Outlay Fund - LRM
Righetti Community
Park (2000054-01)
Righetti Community Park
(2000054-01)
Base Engineer Estimate $ 2,093,623 $ 7,856,377 $ 9,950,000 Contingencies (20%) $ - $ 1,990,000 $ 1,990,000
Total Construction Estimate
(Base Only) $ 2,093,623 $ 9,846,377 $ 11,940,000
Construction Management $ - $ 1,300,000 $ 1,300,000
Special Materials & Testing: $ - $ 100,000 $ 100,000
Construction Support $ - $ 196,412 $ 196,412
Communications Consultant $ - $ 75,000 $ 75,000
Environmental $ - $ 50,000 $ 50,000
Printing: $ - $ 7,500 $ 7,500
$ 13,668,912
Current Available Balance: $ 2,093,624 $ 5,075,288 $ 7,168,912 2025-27 Financial Plan: $ - $ 6,500,000 $ 6,500,000
TOTAL Project Funding $ 2,093,624 $ 11,575,288 $ 13,668,912 Righetti Community Park, Specification No. 2000054-01
Total
Total Project Estimate (Base Only)

Item 6e
Table 3: Righetti Community Park Base Bid Funding Sources *Construction of the project contingent on approval of the 2025-27 Financial Plan In addition to the one-time capital cost of constructing the Righetti Community Park, funding will be needed for its ongoing maintenance, as well as future replacement and rehabilitation of park assets. Maintenance of the City’s park system is performed by the Parks Maintenance Program within the Public Works Department. The program is currently staffed with 10 Parks Maintenance Specialists who maintain 28 park facilities across more than 110 acres of improved parkland. With the exception of Damon Garcia Sports Complex, each specialist is responsible for 3 to 4 park sites.

Staff estimate that Righetti Community Park will require both an initial capital investment and ongoing annual maintenance funding. The one-time cost is approximately $90,000 for a vehicle, tools, and equipment, which will also require periodic replacement over time.

Once fully constructed, the park is expected to cost $225,000 annually to maintain. Due to the size and varied assets within the park (restrooms, multiple turf and court areas as well as parking lots), this includes funding for two full-time Parks Maintenance Specialists, utilities, materials, and custodial services for public restrooms. For the initial phase of the project—corresponding to the base bid—the annual maintenance cost is projected at $140,000 and includes one full-time Parks Maintenance Specialist. This level of service would cover routine landscaping, daily inspections, waste removal, vandalism and graffiti abatement, and irrigation system upkeep. A detailed maintenance cost and work breakdown is included in Maintenance Management Plan.

Staff recommend that the future maintenance needs and associated costs for Righetti Community Park be addressed as part of the 2027–29 Financial Plan. With construction scheduled to begin in fall 2025 and anticipated to take 18 months, plus a one-year landscape maintenance period included in the project, the City will have time to evaluate the best mechanisms to address the maintenance needs for the new park. This would include the feasibility of sharing assets like vehicles, mowers and other tools as well as materials like court nets and turf seed.

Staff believe these recommendations are necessary in order to maintain the current service level experienced at other City parks. Reduced staff, materials or other operating

Item 6e
costs may reduce service level at this and other parks.

ALTERNATIVES

1. Do not authorize advertisement at this time: This alternative would delay construction of the Righetti Community Park. Further delays are likely to increase project costs due to inflation and market conditions.

2. Direct staff to revise the project scope or phasing prior to advertisement: Staff could return with an adjusted scope—such as removing or rebundling Additive Alternates—but this would extend the project schedule, delay delivery, and likely lead to higher costs.

3. Defer the project until full funding is secured for all elements of the Park: Council could direct staff to incorporate all alternatives into the base bid and allocate additional funding in a future budget cycle. This approach would delay construction for several years and could impact the delivery of other priority capital projects.

ATTACHMENTS
A - Draft Resolution Authorizing Various Fund Reappropriations and Transfers to Support the Righetti Community Park Project, Specification Number 2000054, and approving an Addendum to the Orcutt Area Specific Plan Environmental Impact Report for the Righetti Community Park Project.

B - Figure 1 Righetti Community Park Phase Diagram

R ______
RESOLUTION NO. _____ (2025 SERIES)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS

OBISPO, CALIFORNIA, AUTHORIZING VARIOUS FUND

REAPPROPRIATIONS AND TRANSFERS TO SUPPORT THE RIGHETTI
COMMUNITY PARK PROJECT, SPECIFICATION NUMBER 2000054,

AND APPROVING AN ADDENDUM TO THE ORCUTT AREA SPECIFIC

PLAN (OASP) ENVIRONMENTAL IMPACT REPORT FOR THE

RIGHETTI COMMUNITY PARK PROJECT
WHEREAS, Righetti Community Park was identified in the OASP as a key public amenity, planned to serve both the Orcutt Area and the broader San Luis Obispo community; and
WHEREAS, the decision to lead construction of the OASP Parks was identified in 2016 as an update to the OASP Public Facilities Financing Plan; and WHEREAS, the OASP Parks, originally estimated at $6.04 million in 2016, are now estimated at $24.23 million due to construction inflation and the progression of detailed design plans; and
WHEREAS, the current design of the Righetti Community Park aligns with the general intent of the OASP, while incorporating refinements into the design rather than major modifications that would significantly affect the scope of the project; and WHEREAS, the original assumption that developers would fund 100% of the community park through impact fees is no longer viable due to rising construction costs, delays in park development and limited remaining development to generate additional fees; and
WHEREAS, the City has supported the parks’ advancement through successive Financial Plans, beginning in 2019–21 and continuing through the 2023–25 cycle, and WHEREAS, funding to support the OASP Parks was previously allocated into the Development Related Park Improvement Project Account (2000057) in various sub-task, and
WHEREAS, to fund construction for the project, staff is recommending the City Council approve the transfer of $304,637 in Capital Outlay Funds (LRM) from the Development Related Park Improvements account (2000057-00); and

Resolution No. _____ (2025 Series) Page 2
R ______
WHEREAS, to fund construction for the project, staff is recommending the City Council approve the transfer of $3,987,138 in Capital Outlay Funds (LRM) from the Development Related Park Improvements account (2000057-02); and WHEREAS, to fund construction for the project, staff is recommending the City Council approve the transfer of $19,802.04 in OASP Park Improvement Funds from the Development Related Park Improvements account (2000057-03); and WHEREAS, to fund construction for the project, staff is recommending the City Council approve the transfer of $1,558,970.27 in OASP Park Improvement Funds from the Development Related Park Improvements account (2000057-03); and WHEREAS, to fund construction for the project, staff is recommending the City Council approve the transfer of $14,850.80 in OASP Park Improvement Funds from the Development Related Park Improvements account (2000057-04); and WHEREAS, to fund construction for the project, staff is recommending the City Council approve the transfer of $783,512.85 in Capital Outlay Funds (LRM) from the Development Related Park Improvements account (2000057-05); and WHEREAS, to fund construction for the project, staff is recommending the City Council approve the transfer of $500,000 in OASP Park Improvement Funds from the Development Related Park Improvements account (2000057-05); and WHEREAS, to represent available and collected funds, staff is recommending the City Council disappropriate $180,197.96 in OASP Park Improvement Funds from the Development Related Park Improvements account (2000057) due to the overcommitment of the fund; and
WHEREAS, to remove funding that will be used for other projects, staff is recommending the City Council reappropriate $1,136,522 in Park Improvement Impact FeeCitywide Fund back to the unallocated fund’s balance from the Development Related Park Improvements account (2000057); and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows:

Resolution No. _____ (2025 Series) Page 3
R ______
SECTION 1. Environmental Review. The transfer of funds is not subject to environmental review under the California Environmental Quality Act (CEQA) because it is not a “project” as defined by CEQA Guidelines Section 15378.

An addendum to the Orcutt Area Specific Plan Final Environmental Impact Report (Final EIR) has been prepared for the Righetti Community Park Project in accordance with the requirements of CEQA Guidelines Section 15162 and 15164. The Addendum concluded that:

1. The Righetti Community Park project is consistent with the OASP and the assumptions evaluated in the 2010 Final EIR;

2. No new or more severe environmental impacts would result from the proposed design;

3. No new significant information or changed circumstances exist that would require further review; and

4. All applicable mitigation measures continue to apply and remain effective.

Subsequent or supplemental environmental review is not required.

SECTION 2: Action. The City Council authorizes disappropriating $180,197.96 overcommitted OASP Park Improvement Funds from the Development Related Park Improvements project; reappropriate $1,136,522 in Park Improvement Impact Fee – Citywide Fund back to the fund’s unallocated balance; approve the transfer of $5,075,278.85 in Capital Outlay (LRM) Fund, $2,093,623.11 OASP Park Improvement Funds from the Development Related Park Improvements account (2000057) to the Righetti Community Park account (2000054). The City Council additionally approves the Addendum to the OASP Final EIR.

Upon motion of _______________________, seconded by
_______________________, and on the following roll call vote:

AYES:

NOES:

ABSENT:

The foregoing resolution was adopted this _____ day of _____________________ 2022. ___________________________
Mayor Erica A. Stewart
ATTEST:

Resolution No. _____ (2025 Series) Page 4
R ______
__________________________
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

Attachment G
Figure 1: Righetti Community Park Alternates Diagram
Alt #2
Alt #1
Alt #3
Alt #4
Base Bid

Item 6f
Department: Utilities
Cost Center: 6001
For Agenda of: 5/20/2025
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Utilities Director
Prepared By: Nick Teague, Water Resources Program Manager SUBJECT: 2025 WATER SUPPLY AND DEMAND ASSESSMENT

RECOMMENDATION
Receive and file the City’s 2025 Water Supply and Demand Assessment

POLICY CONTEXT
The 2025 Water Supply and Demand Assessment was prepared in accordance with the General Plan, Water and Wastewater Management Element, Policy A5.3.1 and Water Code §10632.1.

On July 3, 2024, the State Water Resources Control Board (SWRCB) adopted the Making Conservation a California Way of Life regulation, establishing unique water conservation goals for each urban water supplier in California.
1 Water conservation is important to the
resilience of the City’s water resources; therefore, the City will continue to work to meet or exceed the State’s water conservation targets.

The City also remains committed to the sustainable use of groundwater from the San Luis Obispo Valley Groundwater Basin. In collaboration with the County, the City submitted the San Luis Obispo Valley Groundwater Basin Water Year 2024 Annual Report to the State in March 2025. The City is also completing the Groundwater Contamination Characterization Project Implementation Phase, which will drill and construct two new groundwater production wells – serving to remove and treat contaminated groundwater from the groundwater basin, but to also provide a new source of drinking water to the community.

REPORT-IN-BRIEF
Results of the state-mandated 2025 Water Supply and Demand Assessment (Attachment A, Reading File) and the City’s Water Projection Model show that the City has more than

1 The Making Conservation a California Way of Life regulation can be accessed at:
https://www.waterboards.ca.gov/conservation/regs/docs/2024/final-text-conservation-way-of-life.pdf

Item 6f
ten years of water available under a drought scenario2 with current water supply and demand conditions and future predictions concerning build-out population and associated water demand. Monthly water supply surpluses signify that the City would not need to enter a water shortage emergency in any month during the Current Year3(Fiscal Year 2025) or during a following hypothetical Dry Year (Fiscal Year 2026)4,5.

DISCUSSION
Background
The City’s 2025 Water Supply and Demand Assessment (Attachment A) was prepared in accordance with the General Plan, Water and Wastewater Management Element (WWME), Policy A5.3.1. and meets the State’s reporting requirements (Water Code §10632.1). The 2025 Water Supply and Demand Assessment provides an update on the City’s current water supply and water demands and assesses the potential of a water supply shortage for a hypothetical dry year.

Current Water Supply Status
The City’s water supply reservoirs (Nacimiento, Salinas, and Whale Rock) are located in different local watersheds in northern San Luis Obispo County and along the north coast (Figure 1). Having geographically diverse reservoirs allows the City to maximize the capture of rainfall at various locations within San Luis Obispo County (Figure 1 and Table 1), providing benefits to the City’s water supplies beyond just rainfall received within the City. As shown in Table 1, all watersheds that provide water to City reservoirs received rainfall that was comparable to the 2013-2024 median.

2 A “drought scenario” is a period when rainfall is less than normal for several weeks, months, or years, the flow of streams and rivers declines, water levels in lakes and reservoirs fall, and the depth to water in wells increases.
3 The Current Year for this Water Supply Assessment covers the twelve months from July 2024 through June 2025.
4 A “Dry Year” is one in which precipitation is as low as the driest year on record. 5 The Current Year and Dry Year periods for this Water Supply Assessment are concurrent with the City’s 2025 and 2026 Fiscal Year periods, respectively.

Item 6f
Figure 1: Map of reservoirs and rain gauge locations.

Table 1: Rainfall during the 2024 and 2025 Water Years (in inches)1 Rainfall Measurement
Location Watershed MedianRainfall
2 WY 2024 Total
Rainfall
WY 2025 Total
Rainfall3
Rocky Butte Nacimiento
Reservoir 28.93 71.31 34.74
Hwy 46 W 7 Mile Whale Rock
Reservoir 15.54 23.66 12.48
SLO Reservoir San Luis
Obispo Creek 15.17 24.24 14.09
Salinas Dam Salinas
Reservoir 14.33 28.52 14.24
Notes:

1. Water Year is October 1 to September 29.

2. Calculated using data from water years 2013 through 2024.

3. For the dates October 1, 2024, to April 1, 2025.

Item 6f
Reservoir storage volumes as of April 1, 2025, are shown below in Table 2. The consecutively wet winters have resulted in Nacimiento Reservoir being above 65-percent storage capacity, and Salinas and Whale Rock Reservoirs being near capacity.

Table 2: Current Reservoir Storage and Change in Volume from Fiscal Year 2024 Reservoir
Reservoir Storage
City
Allocation
(acre-feet)1
Change from FY 2024
Current
Volume1
(acre-feet)
Total
Percent
Capacity
Storage
(acre-feet) % Capacity
Nacimiento 259,033 68% 5,482 (93,433) (25%)
Whale Rock 36,116 93% 21,451 (2,851) (7%)
Salinas 22,034 99% 19,386 (2,456.6) (11%)
Notes:

1. As of April 1, 2025.

As shown in Table 3, the City’s FY 2024 demand was 4,969 acre-feet. The total per-capita demand during this period was 91 gallons per capita per day (GPCD). Ninety-four percent (94%) of this demand was supplied by Whale Rock and Salinas Reservoirs, and 6% was supplied by recycled water; water deliveries from Nacimiento Reservoir were unavailable due to pipeline repairs.

Table 3: City Water Supply Used by Source during Fiscal Year 2024 (in acre-feet1) Nacimiento
Reservoir
Whale Rock
Reservoir 2
Salinas
Reservoir
Recycled
Water Groundwater 3 Total City Water Demand
- 3,409 1,251 309 0 4,969
0% 69% 25% 6% 0% 100%
Notes:

1. Values are rounded.

2. Water delivered to Cal Poly State University is excluded from the City’s water demand, as Cal Poly has its own water storage and water diversion rights in Whale Rock Reservoir.

3. Groundwater was not used for potable purposes during Fiscal Year 2024.

Available Supply
Water Resource Availability is calculated based on WWME, Section 3. Using this method, the Water Resource Availability for FY 2025 is 10,246 acre-feet (Table 4), which includes 5,482 acre-feet of dependable yield from Nacimiento Reservoir, 4,910 acre-feet of safe annual yield from Salinas and Whale Rock Reservoirs, 354 acre-feet of Recycled Water (2024 calendar-year usage) and subtracts 500 acre-feet due to estimated reservoir capacity losses from siltation (WWME Policy A 4.2.2).

Item 6f
Table 4: Estimated Fiscal Year 2024-2025 Available Water Resources Water Resource Acre-Feet Description
Nacimiento Reservoir 5,482 Dependable Yield 1
Salinas & Whale Rock Reservoirs 4,910 Safe Annual Yield 2 Recycled Water 354 2024 Annual Usage 3
Siltation from 2010 to 2060 (500) WWME Policy A 4.2.2 4 10,246 Total Availability5
NOTES:

1.Dependable Yield is the contractual amount of water the City has rights to from Nacimiento Reservoir.

2.The City’s Safe Annual Yield model was updated in 2018.

3.The quantity of recycled water included (354 AF) is the actual prior year’s usage (calendar year 2024) per General Plan Water and Wastewater Management Element Policy A 7.2.2.

4.Reservoir siltation is a natural occurrence that reduces storage capacity over long periods, resulting in the reduction of safe annual yield.

5.Preliminary estimate that can change with regulatory variability, climate conditions, and other factors that may affect the City’s water supplies and customer water uses.

Per WWME, Section 5, the City divides the total Water Resource Availability (Table 4) to account for water supplies necessary to meet three specific community needs (Table 5):
 Primary water supply – is the amount needed to meet the General Plan build-out of the City, which is the amount of water needed to serve the City’s current and future residential and non-residential water demand.
 Reliability reserve – the buffer for future unforeseen or unpredictable long-term water supply impacts.
 Secondary water supply – the amount of water needed to meet peak water demand periods or short-term loss of City water supply sources.

Table 5: Fiscal Year 2024 Annual Water Supply Availability (in acre-feet)1 Total Water
Availability
Primary Water
Supply
Reliability Reserve Secondary Water
Supply
10,246 7,496 1,276 1,474
NOTES:

1. Total Water Availability = Primary Water Supply + Reliability Reserve + Secondary Water Supply Because our policies determine the supplies described above using the maximum per capita water use allowed by State regulations (117 GPCD), the supply volumes can be considered conservative estimations of actual demand. Using conservative estimates allows the flexibility to respond to unforeseen impacts to water supply, or greater than anticipated increases in demand.

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Water Supply Disruptions
High streamflow in the Salinas River corresponding to a large precipitation event on January 9, 2023, exposed and damaged the pipeline that delivers water from Nacimiento Reservoir to the City, disrupting delivery of water to the City. At the date that this report was published, deliveries of water from Nacimiento Reservoir to the City were expected to resume in July 2025. This disruption in delivery of water from Nacimiento Reservoir has required greater than anticipated utilization of water from Whale Rock and Salinas Reservoirs to meet water demands. As both Whale Rock and Salinas Reservoirs remain near capacity, the actual impacts of this are currently minimal. The Water Supply and Demand Assessment provides details on how the City will meet estimated demands while ensuring that the reservoirs remain a reliable long-term water supply.

Water Demand
During FY 2024, the City registered 4,548 acre-feet of water use at metered locations (Table 6). The largest demand for water in FY 2024 was for residential use (64%) and the second largest demand for water was for commercial, industrial, and institutional uses (24%). Demand for potable irrigation, non-potable (recycled water) irrigation, and recycled water for construction purposes were each less than 10% of the total demand. About 372 acre-feet of potable water (8% of the City’s Water Potable Supply) were lost to distribution system leaks and other distribution system processes. The City’s water loss is less than the national average of about 15%.

Staff have begun migrating water meter reading from contract operations to an Advanced Metering Infrastructure (AMI) system. AMI systems allow water consumption data to be collected by digital water meters and transmitted to an online portal through a lowfrequency cellular transmission device, which will allow staff and community members more visibility and accuracy of water meter reads via smart devices and will be available on smaller timescales (by the minute instead of monthly). This will result in improved leak detection and water budgeting.

Year-to-date (July-February) metered data for FY2025 show similar demand patterns as FY 2024. The breakdown of metered water uses in the City by sector is as follows:

Table 6: City Water Demand by Sector During the 2024 and 2025 Fiscal Years (in acre-feet) Fiscal
Year
Residential Commercial,
Industrial,
Institutional
Landscape
Irrigation
(Potable)
Landscape
Irrigation
(Recycled)
Construction
(Recycled)
Total
Metered
Use
FY 2024 64% 24% 7% 5% < 1% 4,548
FY 2025
(year-todate)1
64% 23% 8% 6% <1% 3,146
Notes:

1. July 2024 through February 2025.

Item 6f
Water Shortage Assessment
The City utilizes a Water Projection Model to test both hypothetical and actual water demand scenarios and to forecast how long water supplies will sustain the community under specific conditions. The Water Projection Model accounts for the storage in the City’s surface water reservoirs, other available resources, current and projected demands, and climate data. The model uses historical hydrologic information (rainfall, evaporation, inflow) based on the average for the worst drought period (2012 to 2014).

Per the City’s 2020 Water Shortage Contingency Plan (WSCP), the 2025 Water Supply and Demand Assessment will utilize the Water Projection Model to determine current demand, future demand, and any associated water shortages. Results of the Water Projection Model show that the City has more than ten years of water available under a drought scenario with current water supply and demand conditions.

Additionally, Water Code Section 10632.1 requires the City to evaluate water supply and demand on a monthly time-step for the current fiscal year (FY 2024) and a hypothetical dry year so that potential seasonal water shortages are highlighted and accounted for.

The City does not expect to enter a water shortage emergency in any month during the Current Year or following hypothetical Dry Year.

Water Conservation
The City’s Utilities Department has improved water conservation by increasing public outreach and communication, providing personalized assistance to community members in detecting and resolving leaks, providing rebates for water-efficient plumbing fixtures and appliances, promoting water-efficient landscaping and irrigation, and proactively identifying and repairing leaks in the water distribution system. Water conservation efforts undertaken by the community have reduced long-term water use by over 15% community wide since the late 1980s. A comprehensive review of the City’s past, present, and future water conservation efforts is detailed in the 2023 Water Conservation and Efficiency Plan (Attachment B).

The City’s efforts to develop a robust and effective water conservation program have positioned the City to meet or exceed the State’s water conservation goals. On July 3, 2024, the State Water Resources Control Board (SWRCB) adopted the Making Conservation a California Way of Life regulation, establishing unique water conservation goals for each urban water supplier in California. These goals reflect efficient use of water for residential indoor demands; residential outdoor demands; outdoor irrigation at commercial, institutional, and industrial properties; and water loss. Projection of City water demands indicate that the City will continue to meet the State’s water conservation goals as they become increasingly more stringent through the year 2040.

In addition to meeting State water conservation regulations, the City is also working to prepare for regulations aimed at eliminating irrigation of non-functional turf. Assembly Bill 1572 was approved by the Governor on October 13, 2023. This bill prohibits the use of potable water for the irrigation of nonfunctional turf located on commercial, industrial, and

Item 6f
institutional properties, with some exceptions. Nonfunctional turf includes grass areas that are not used for human recreation or other practical purposes. Functional turf areas that will still be permitted to use potable water for irrigation include playing fields, recreational areas, and areas used for community events or pet relief. The timeline for the implementation of these regulations is as follows:

1. All properties owned by the Department of General Services, beginning January 1, 2027.

2. All properties owned by local governments, local or regional public agencies, and public water systems, except those specified in paragraph (5) below, beginning January 1, 2027.

3. All other institutional properties and all commercial and industrial properties, beginning January 1, 2028.

4. All common areas of properties of homeowners’ associations, common interest developments, and community service organizations or similar entities, beginning January 1, 2029.

5. All properties owned by local governments, local public agencies, and public water systems in a disadvantaged community, beginning January 1, 2031, or the date upon which a state funding source is made available to fund conversion of nonfunctional turf on these properties to climate-appropriate landscapes, whichever is later.

The City will develop rules and guidance to facilitate compliance with these regulations.

This information will be shared with the community through workshops, community events, handouts, social media, and other communication platforms beginning in January 2026.

Continued Communication Related to Weather Extremes and Local Conditions The Utilities Department continues to revise its communication related to weather whiplash (drought and flooding) and water supply topics to be able to provide succinct information that is easily accessible to the community. While the wet winters have provided the City with full reservoirs, it is important to ensure that the community is aware of local water-supply conditions and that water conservation is equally important in wet or dry years to ensure that water supplies are available to meet current and future demands.

Groundwater Management
The City and County, working together as separate Groundwater Sustainability Agencies (GSAs) for the San Luis Obispo Valley Groundwater Basin, published the San Luis Obispo Valley Groundwater Basin Water Year 2024 Annual Report and submitted it to the California Department of Water Resources (DWR) in March 2025. Pursuant to the SGMA regulations, an annual report must be submitted to DWR by April 1 of each year following the adoption of the Basin’s Groundwater Sustainability Plan (GSP). This is the fourth Annual Report and documents data for Water Year 2024 (October 1, 2023, through September 30, 2024). The annual report conveys monitoring and water use data to DWR

Item 6f
and basin stakeholders on an annual basis to gauge performance of the Basin relative to the sustainability goals set forth in the GSP.

Water Year 2024 was a wet year with slightly above-average rainfall and groundwater levels throughout the basin generally remained steady from the previous year.

Groundwater measurements in the representative monitoring sites, as defined by the GSP, ranged from about 38 feet higher to 20 feet lower than fall 2023. Overall, there was an increase in total groundwater storage in the basin.

Use of available groundwater resources would improve resiliency in the City’s water supply portfolio. Based on estimates published in the San Luis Obispo Valley Basin GSP, the City anticipates about 700 acre-feet of groundwater is available for use each year.

The City does not currently use groundwater as a drinking water source but considers groundwater as a valuable water resource that will help the City meet its future water supply resiliency goals. To utilize this groundwater resource, the City is completing the Implementation Phase of the Groundwater Contamination Characterization Project, a larger project which in its entirety aims to design, drill, and equip groundwater wells with treatment systems capable of removing tetrachloroethylene (PCE) contamination, and to put the City’s available groundwater to beneficial use as a drinking water source. The project is funded through a mix of grant funding from the State of California Proposition 1 Groundwater Grant Program and City funding. Completion of the Implementation Phase is expected in Spring 2026, at which time the City will begin using groundwater as an additional source of supply.

Previous Council or Advisory Body Action
City Council adopted the 2024 Water Supply and Demand Assessment on June 4, 2024.

Public Engagement
The City will provide communications regarding current water supply conditions and the results of the Water Supply and Demand Assessment by posting information and documents on the Utilities Department website. Additionally, this information will be incorporated into future public communications material (social media posts, radio ads, and Farmers Market handouts) and into future water supply planning. A copy of this report and the Water Supply and Demand Assessment will be sent to the City Planning Commission upon receival by City Council.

ENVIRONMENTAL REVIEW
The 2025 Water Supply and Demand Assessment is not a "project" under the California Environmental Quality Act (CEQA), because the action does not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment, as defined by State CEQA Guidelines, Section 15378.

Item 6f

FISCAL IMPACT
The action to receive and file the 2025 Water Supply and Demand Assessment does not create a fiscal impact.

Budgeted: N/A Budget Year: N/A
Funding Identified: N/A
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
Total $0 $0 $0 $0

ALTERNATIVES
Council could decide not to receive and file the 2025 Water Supply and Demand Assessment and provide direction to staff on desired modifications. Should Council select this alternative, delays beyond the July 1, 2025, due date caused by revisions may result in noncompliance with California Water Code §10632.1.

ATTACHMENTS
A - 2025 Water Supply and Demand Assessment
B - 2023 Water Conservation and Efficiency Plan

2025 Water Supply and Demand Assessment
For the Time Period July 1, 2024, through June 30, 2026 Whale Rock Reservoir.

City of San Luis Obispo
2025 Water Supply and Demand Assessment

I. INTRODUCTION
California Water Code (CWC §10632.1.)
1 directs urban water suppliers (Suppliers) to conduct an Annual Water Supply and Demand Assessment (Water Supply Assessment) for the purpose of (i) evaluating its water supply reliability for the current year and one subsequent dry year and (ii) generating and submitting an Annual Shortage Report by July 1 every year. The procedures for conducting a Water Supply Assessment shall include the following:
(A) The written decision-making process that an urban water supplier will use each year to determine its water supply reliability.
(B) The key data inputs and assessment methodology used to evaluate the urban water supplier’s water supply reliability for the current year and one dry year, including all of the following:
(i) Current year unconstrained demand, considering weather, growth, and other influencing factors, such as policies to manage current supplies to meet demand objectives in future years, as applicable.
(ii) Current year available supply, considering hydrological and regulatory conditions in the current year and one dry year. The annual supply and demand assessment may consider more than one dry year solely at the discretion of the urban water supplier. (iii) Existing infrastructure capabilities and plausible constraints. (iv) A defined set of locally applicable evaluation criteria that are consistently relied upon for each annual water supply and demand assessment.
(v) A description and quantification of each source of water supply.

The City’s 2025 Water Supply Assessment was prepared in accordance with the General Plan, Water and Wastewater Management Element, Policy A5.3.1.2 The methods for calculating water supply and water demand have been modified to match the reporting requirements of the Water Supply and Demand Assessment and are described below.

II. DECISION MAKING PROCESS
The CWC does not specify the type of year the Suppliers should use to do the Water Supply Assessment (Calendar or Fiscal). However, the California Department of Water Resources (DWR) recommends that the one Dry Year begins in July.3For this Water Supply Assessment, which will be submitted by July 1, 2025, the Dry Year will therefore cover the twelve months from July 2025 to June 2026. Each subsequent Water Supply Assessment will define the Dry Year period as July 1 st of the Water Supply Assessment year

1 Cal. Water Code §10632.1. can be accessed at:
https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=WAT&sectionNum=10632 2 The City’s General Plan, Water and Wastewater Element is available at:
https://www.slocity.org/home/showdocument?id=6649
3 The State of California’s Water Supply and Demand Assessment Draft Guidance states “Characteristic of a dry year is at the discretion of the Supplier, but it should be adequately defined and ideally align with one of the WSCP water shortage levels. The assumed Dry Year conditions are often based on a previous historic dry year, such as the driest year on record. Suppliers presented their defined historic Dry Year in their UWMP Table 7-1. For the purpose of this Guidance, the Dry Year data will be applied over the twelve-month period beginning July 1st (the due date of the current Annual Shortage Report).”

City of San Luis Obispo
2025 Water Supply and Demand Assessment

through June of the next calendar year. The Current Year for this Water Supply Assessment will cover the twelve months from July 2024 through June 2025. The Current Year and Dry Year periods for this Water Supply Assessment are concurrent with the City’s 2025 and 2026 Fiscal Year periods, respectively.

The City utilizes a Water Projection Model to test both hypothetical and actual water demand scenarios and to forecast how long water supplies will sustain the community under specific conditions. The Water Projection Model accounts for the storage in the City’s surface water reservoirs, in conjunction with other available resources (i.e., groundwater and recycled water), needed to meet the City’s water demand.

The model uses historical hydrologic information (rainfall, evaporation, inflow) based on the average for the worst drought period (2012 to 2014). Other data included in the model are:
a. Water entitlement
b. Current reservoir levels/storage
c. Average gallons per capita per day community water demand d. Rainfall
e. Temperature
f. Evaporation
g. Existing population
h. Estimated population growth
Utilizing the Water Projection Model as part of its water supply management strategy, the City can foresee whether a water supply shortage is anticipated in any given year and the severity of a shortage based on the availability of the City’s different sources of supply and water demand trends. The City uses the Water Projection Model to study the potential impacts of various intensities of drought conditions, including increased air temperature and evaporation rates, along with decreased precipitation. Per the City’s 2020 Water Shortage Contingency Plan, the Water Supply Assessment will utilize the Water Projection Model to determine current demand, future demand, and any associated water shortages.4 Water supply and demand are presented in the units of acre-feet (AF). Annual available supply is determined using existing methods (General Plan Water and Wastewater Management Element (WWME), Section 3).
5 Annual demand for the purposes of estimating Current Year and Dry Year demand is determined using a modification of the methods described in the City’s method for determining Primary Water Supply (WWME, Section 5) as described below. Current Year monthly demand is determined using actual metered data when available; however, for the months when metered data have not been collected, demand is calculated using the methods described in this report.

III. WATER SUPPLY REALIABILITY EVALUATION
This section describes the City’s various water supply sources. The City primarily utilizes water from three surface-water reservoirs for drinking water and irrigation, and recycled water for irrigation and construction. The effect ofrecent precipitation on reservoir volumesis described herein, as is the method by which the City accounts for loss of storage capacity due to siltation.

4 The City’s Water Shortage Contingency Plan is available at:
https://www.slocity.org/home/showpublisheddocument/30334/637575513697770000 5 The City’s General Plan, Water and Wastewater Element is available at:
https://www.slocity.org/home/showdocument?id=6649

City of San Luis Obispo
2025 Water Supply and Demand Assessment

Description and Quantification of Each Water Supply Source Per the General Plan Water and Wastewater Management Element, Policy A2.2.1, the City uses multiple water sources to meet its water supply needs.6 The City has four primary water supply sources:

Nacimiento Reservoir, Whale Rock Reservoir, Salinas Reservoir, and recycled water. The City prioritizes using contractual water supply from Nacimiento Reservoir first, with Whale Rock Reservoir and Salinas Reservoir used as needed to meet the City’s overall potable water demand, while recycled water is used as a non-potable source for irrigation and construction purposes within City limits. A comprehensive upgrade to the City’s Water Resource Recovery Facility (WRRF) is currently underway and will increase the volume of recycled water available for use in the future. Additionally, groundwater serves as the City’s fifth supplemental water source. Substantial work efforts are being made to better understand the City’s groundwater supplies and how they may be fully utilized in the future.

Nacimiento Reservoir
In 1959, the San Luis Obispo Flood Control and Watershed Protection District (San Luis Obispo District) entered into an agreement with Monterey County Flood Control and Water Conservation District (now Monterey County Water Resources Agency) to secure rights to 17,500 AF of water per year (AFY) from Nacimiento Reservoir. Nacimiento Reservoir is located entirely within San Luis Obispo County, California (County), and was built by Monterey County Flood Control and Water Conservation District who continues to control reservoir ownership and operations. Nacimiento Reservoir has a storage capacity of 377,900 AF and serves the purpose of abating seawater intrusion in the groundwater aquifers of the Salinas River Valley, while also providing flood protection and groundwater recharge for the Salinas Valley. Of the San Luis Obispo District’s entitlement, 1,750 AFY have been designated for uses around the lake, leaving 15,750 AFY for allocation to other areas within the County of San Luis Obispo. Water is delivered via a 45-mile pipeline from Nacimiento Reservoir to participating agencies and cities.

The “dependable yield” from Nacimiento Reservoir is the contractual amount of water that the City has rights to from Nacimiento Reservoir. The City’s original amount contracted for was 3,380 AFY.

Engineering studies, environmental impact reports, dependable yield analyses, and preliminary design reports were completed to ensure water needs within the County were met. In 2004, the County requested interested agencies to approve the contractual agreements for participation in the Nacimiento Project. The four initial project participants included the cities of San Luis Obispo and Paso Robles, the Atascadero Mutual Water Company, and the Templeton Community Services District. These agencies executed participation agreements with San Luis Obispo County for entitlements of water which totaled 9,630 AF. In 2004, the County Service Area 10A in Cayucos became a project participant securing 25 AFY.

On June 29, 2004, the San Luis Obispo City Council authorized participation in the Nacimiento Water Project for the delivery of the original 3,380 AF of water. In 2004, the County Service Area 10A in Cayucos became a project participant (25 AFY).

In March 2016, the City Council approved the addition of 2,102 AFY from Nacimiento Reservoir to the City’s water supply. This addition brought the City’s total Nacimiento Reservoir allocation to 5,482 AFY.

With uncertainty of future climatic conditions, regulation, and aging infrastructure, the additional supply of Nacimiento water to the City’s portfolio reduces pressure on the use of water supplies in the Whale Rock and Salinas reservoirs, extending these stored supplies during future critical water shortages.

6 General Plan, Water and Wastewater Management Element, Program A 2.2.1, states “The City shall utilize multiple water resources to meet its water supply needs.”

City of San Luis Obispo
2025 Water Supply and Demand Assessment

During the worst-case drought on record in the region (2012 to 2014), Nacimiento Reservoir remained a resilient water supply capable of providing a consistent and reliable source of water for San Luis Obispo County. To confirm the prior analysis with more recent data, the City reviewed rainfall and inflow data from 2013 which was the driest year on record. Over that year, Nacimiento Reservoir received 35,000 acre-feet of inflow. Though this is significantly below the average inflow into the reservoir, the San Luis Obispo District’s entitlement could still be met if inflow remained at this level due to the District’s primary rights.

High streamflow in the Salinas River corresponding to a large precipitation event on January 9, 2023, exposed and damaged the pipeline that delivers water from Nacimiento Reservoir to the City, disrupting delivery of water to the City. At the date that this report was published, deliveries of water from Nacimiento Reservoir to the City were expected to resume in July 2025 through a temporary bypass. This disruption in delivery of water from Nacimiento Reservoir is accounted for later in this report and points to the importance of the City having a multi-source supply portfolio.

Whale Rock Reservoir
Whale Rock Reservoir is located on Old Creek Road approximately one-half mile east of the community of Cayucos, California. The project was planned, designed, and constructed under the supervision of the California State Department of Water Resources (DWR). Construction took place between October 1958 and April 1961. The reservoir is jointly owned by the City of San Luis Obispo, the California Men's Colony, and the California Polytechnic State University at San Luis Obispo (Cal Poly). These three agencies form the Whale Rock Commission which is responsible for operation and administration of the reservoir and associated water deliveries. Day-to-day operation is provided by the City.

Whale Rock Reservoir is formed by an earthen dam and had capacity to store an estimated 40,662 AF of water at the time of construction. The dam is 266 feet tall with a crest length of 850 feet and crest width of 30 feet. The top of dam elevation is 232.2 feet. The Reservoir covers an area close to 600 acres. In 2022, the maximum storage capacity is 38,967 AF. The City owns 55.05 percent of the water storage rights at the reservoir (22,364 AF). The remaining water storage rights are apportioned between the two State agencies with Cal Poly owning 33.71 percent and the California Men’s Colony owning 11.24 percent.

Over the life of the Whale Rock Reservoir and dam, the lake has filled to capacity and the spillway has been used 14 times, most recently spilling in February 2024.

The Whale Rock pipeline is approximately 17 miles long, connecting the reservoir to the member agencies, and terminating at the City's Water Treatment Plant. The design capacity of the pipeline is

18.94 cubic feet per second (approximately 8,500 gallons per minute). The line consists of modified prestressed concrete cylinder pipe at most locations. Cement mortar lined steel pipe is used at creek crossings and junctions.

Salinas Reservoir
The Salinas Reservoir (also known as Santa Margarita Lake) is located on the upper Salinas River, approximately nine miles southeast of the community of Santa Margarita. The project was originally built by the War Department to ensure an adequate water supply for Camp San Luis Obispo, as well as the City of San Luis Obispo. The dam and appurtenances were declared surplus by the War Department on April 14, 1947, and the U.S. Army Corps of Engineers assumed responsibility for the facilities. On July 11, 1947, the Corps entered into an agreement with the San Luis Obispo District for the operation and maintenance of the dam and related facilities. The City has an agreement with the Corps for use of the reservoir, as well as a water right permit to divert water from the Salinas River for storage within the reservoir. Salinas Reservoir is formed by a concrete arched dam. Immediately following construction, the

City of San Luis Obispo
2025 Water Supply and Demand Assessment

reservoir had an estimated storage capacity of 24,000 AF with a surface area of 793 acres, and a drainage area of 112 square miles. A model of the reservoir was updated in 1991 using computer calculations and aerial photogrammetry. The San Luis Obispo County Flood Control and Water Conservation District (District) have used the 1991 model to calculate capacity and surface area using measurements of reservoir elevation until recently. In 2023 the District updated the model of the reservoir using a bathymetric survey and LiDAR data to create a full coverage model of the reservoir. The 2023 updated model resulted in a total capacity at the spillway elevation of 22,507.75 AF, a reduction of 1,522.56 AF.

The decrease in capacity can be attributed to improved data, and to siltation of the reservoir, which is estimated at 46.14 AF/yr (mean siltation rate over 33 years).

Water is conveyed from Salinas Reservoir through 48,700 feet (9.2 miles) of 24-inch diameter reinforced concrete pipe to a three million gallon regulating reservoir at the Santa Margarita booster pump station near the northerly base of Cuesta Grade adjacent to Highway 101. The pipeline is designed to flow by gravity from the Reservoir to the regulating reservoir when the lake level is above the elevation of 1,267 feet. A booster pump station at the base of the dam, consisting of two horizontal centrifugal pumps, is capable of maintaining the rated flow of 12.4 cubic feet per second (approximately 5,565 gallons per minute) when the water surface elevation falls below 1,267 feet.

Safe Annual Yield
Safe Annual Yield, or the maximum amount that could be withdrawn each year without drawing the reservoir below its minimum pool constraint, for Whale Rock and Salinas reservoirs is 4,910 AFY. This value was updated in 2018 following the addition of data from the most recent drought that ended in 2016 and analysis of three independent climate change models by the U.S. Environmental Protection Agency (EPA), San Luis Obispo Council of Governments (SLOCOG) as part of the 2014 Regional Transportation Plan, and Nature Communications. As a result of siltation since the original construction, the reservoir capacity has been reduced and accounted for in the Safe Annual Yield for Whale Rock and Salinas reservoirs.

Accounting for Siltation
Siltation at reservoirs is a natural occurrence that can reduce the storage capacity over long periods. The reduction of available storage reduces the safe annual yield of the reservoirs. Siltation at reservoirs varies depending on factors such as rainfall intensity and watershed management practices. Climate change could have an impact on future water availability in the form of increased siltation in reservoirs resulting from wildland fires which could affect the safe annual yield of the City’s reservoirs. Numerous studies and reports addressing siltation at Salinas Reservoir have been completed. As mentioned previously, the latest study conducted by the District in 2023, indicated that the siltation rate in Salinas Reservoir is about 46.14 AF/yr, resulting in a decrease in reservoir capacity of 1,522.56 AF since 1991.

The Whale Rock Reservoir Bathymetric Survey and Volumetric Study was completed in May 2013. The study concluded that sedimentation has reduced reservoir capacity by 4.2% in 52 years, but this impact, considering 52 years of sedimentation is relatively minimal. The City has policies and programs in the WWME to anticipate the loss of storage at Whale Rock and Salinas Reservoirs. WWME Policy A 4.2.2 relates to Accounting for Future Siltation.
7 The policy states “The City will account for estimated safe annual yield losses at Salinas and Whale Rock Reservoirs through 2060 by deducting 500 acre-feet of available water supplies to account for these future losses.” The siltation rate will be updated as information becomes available from subsequent siltation analyses. The siltation rate calculated by the

7 The City’s General Plan, Water and Wastewater Element is available at:
https://www.slocity.org/home/showdocument?id=6649

City of San Luis Obispo
2025 Water Supply and Demand Assessment

District as part of the 2023 study is similar to previous estimates; therefore, the City’s policy for accounting for safe annual yield losses remains unchanged. Accounting for siltation of reservoirs contributes to the overall reliability of the City’s water supply portfolio as it ensures that the City is planning for this occurrence. Siltation at Nacimiento Reservoir does not need to be accounted for in The City’s water supply portfolio calculations because the contractual right for San Luis Obispo County agencies is not dependent on reservoir capacity.

Recycled Water
The City’s Water Resource Recovery Facility (WRRF) produces over 3,200 AF of disinfected tertiarytreated effluent per year. A minimum of 1,810 AF is discharged to San Luis Obispo Creek annually to provide satisfactory habitat and flow volume for fish species (steelhead trout) within the Creek environment. The balance makes up the City’s available recycled water resource which is available for approved uses. A consistent flow of wastewater to the WRRF enables the City to produce a volume of recycled water that exceeds current seasonal demand for landscape irrigation. The distribution and delivery of recycled water is via a pump station located within the WRRF. The pump station does not have backup power during a power outage. However, because power outage events have been infrequent, the City’s recycled water supply is considered a reliable, non-potable water supply.

The primary use of recycled water in the City is for landscape irrigation with about 75 percent of the City’s recycled water demand occurring from May through October. The City began issuing annual construction water permits in July 2009. Permit holders have access to recycled water for dust control and compaction on construction sites in the City. The City has four metered wharf head hydrant filling stations located throughout city limits. During calendar year 2024, 354 AF of recycled water was used for landscape irrigation and construction water. The City has identified a “seasonal surplus” of recycled water available in excess of required discharge to San Luis Obispo Creek (4.96 AF per day as required by the National Oceanic and Atmospheric Association, National Marine Fisheries Service in 2005). As only a limited amount of landscape irrigation takes place from November to April (seasonal off-peak period), more than 4 AF per day of recycled water is available during the seasonal off-peak period. An upgrade of the WRRF is underway, which will accommodate the City’s buildout and maximize recycled water production. These upgrades will enable the City to maximize beneficial use of recycled water, including consideration of either direct or indirect potable reuse in the future. Until potable reuse is implemented, the City is focused on expanding the use of recycled water within City limits to help offset potable water use. Per the City’s 2017 Recycled Water Master Plan, recycled water use is projected to increase by 10 AF per year.

Groundwater
Although the City suspended using groundwater for potable purposes in April 2015, the City is completing a project to build two new groundwater supply wells, with hopes of utilizing groundwater as a supplementary drinking water source by late 2026. In July of 2020, the City received a nearly $2 million planning-phase grant, funded through Proposition 1, to study Tetrachloroethylene (PCE) contamination of the groundwater basin. This study was completed in April 2023 and provided a more detailed understanding of the extent of PCE contamination and identified potential remediation options for the City to fully utilize its groundwater pumping opportunities. An additional implementation-phase grant was awarded in March 2023; current grant funding through Proposition 1 for the implementation-phase is $7,782,800. The implementation phase will result in the construction or outfitting of two new production wells with treatment systems to provide the City with an additional source of potable water, while simultaneously removing contaminated groundwater from the groundwater basin. Several new monitoring wells planned for installation in the implementation phase

City of San Luis Obispo
2025 Water Supply and Demand Assessment

will provide an understanding of changing groundwater conditions resulting from renewed groundwater pumping.

In January 2022, the City and the County of San Luis Obispo, acting as Groundwater Sustainability Agencies, submitted a draft of the Groundwater Sustainability Plan (GSP) for the San Luis Obispo Valley Groundwater Basin to the California Department of Water Resources (DWR).8 The GSP was approved by DWR in April 2023. The GSP was a result of several years of work conducted to better understand the hydrology of the basin and will be instrumental in guiding sustainable use of groundwater in the basin, including the City’s utilization of groundwater as a source of supply. The GSP estimates a groundwater surplus (recharge minus withdraws) of approximately 700 AFY for the portion of the groundwater basin underlying the City.

Current Year Precipitation and Reservoir Storage
Current Year precipitation in the City is slightly below the median for Water Years 2012-2024 (Table 2); however, reservoir levels have held steady from last year, at or near capacity. Precipitation is generally greatest in the winter months, November through April, and can be absent in the summer months, MaySeptember. As of February 28, 2025, the Current Year precipitation is 10.91 inches, with 6.80 inches falling in the month of February alone, resulting in increases in reservoir storage volumes of 54,945 AF in Nacimiento Reservoir, 3,033 AF in Salinas Reservoir, and 513 AF in Whale Rock Reservoir9.

Table 2: Precipitation Measured at the SLO Reservoir Station1 (in inches)
Water Year Accumulation
(in inches)
2012 12.36
2013 8.50
2014 10.51
2015 11.70
2016 17.76
2017 35.34
2018 12.88
2019 27.10
2020 15.60
2021 11.62
2022 14.82
2023 51.99
2024 24.21
2012-2024 Median 16.68
2025 (October-February) 10.91
Notes:

1. Precipitation data measured at the SLO Reservoir – P (749) station can be found at:
https://wr.slocountywater.org/site/?site_id=27&view=51a30d03-3991-46af-9d23-7bc0f56a118f.

8 The San Luis Obispo Valley Basin Groundwater Sustainability Plan is available at:
https://opengov.slocity.org/WebLink/DocView.aspx?id=151703&dbid=0&repo=CityClerk&searchid=bd6f22bbd951-472c-848d-2d187628a2d2&cr=1

IV. SUPPLY AND DEMAND ANALYSIS
Using the Water Projection Model described above, the City has more than ten years of water available under a drought scenario with current water supply and demand conditions. Analysis of supply and demand data at a monthly timescale shows that the City has the supply needed to meet monthly demands for the Current Year and a subsequent Dry Year. This is why the City does not expect to enter a water shortage emergency in any month during the Current Year and following hypothetical Dry Year.

This analysis provides valuable insight on the primary uses of water in the City and also highlights periods when disruptions in delivery of water from one or more of the City’s reservoirs would be most impactful to the City’s ability to meet demand. Monthly demands show that water supply is used primarily to meet residential demands. Additionally, monthly demands show the seasonal variation associated with the need for more water in the hot, dry summer months and the need for less water during the cool, wet winter months. Ultimately, the data show that water use within the City is driven by residential use during the dry, summer months, likely in response to outdoor irrigation needs. Because of this, water conservation programs that target reduction in outdoor irrigation may provide the greatest water savings.

The supply and demand analysis assumes reliable delivery of available water supplies during drought conditions similar to those experienced in recent history. More extreme drought conditions may present issues that decrease the volume of available water in storage or degrade the quality of water in storage.

Available water supply may also be less than estimated because of disruptions in the delivery of available water supplies, whether temporarily caused by minor issues or prolonged disruptions caused by catastrophic events.

Assessment Methodology: Locally Applicable Evaluation Criteria Water supply reliability is the City’s ability to meet the water needs of its customers under varying conditions. The City estimates annual Water Supply based on Water and Wastewater Management Element, Section 3. The City’s fiscal year 2023-2024 water supply that was estimated using this method is shown in Table 1. This method incorporates Safe Annual Yield from Salinas and Whale Rock Reservoirs as determined through the City’s Safe Annual Yield Model, the City’s contractual amount of water from Nacimiento Reservoir (Dependable Yield), the prior Calendar Year volume of Recycled Water utilized by the City, and reduction in reservoir storage caused by siltation as directed in WWME Policy A 4.2.2. The values shown in Table 1 are preliminary estimates that can change with regulatory variability, climate conditions, and other factors that may affect the City’s water supplies and customer water uses. As described in Chapter 6 of the City’s 2020 Urban Water Management Plan (UWMP)10, the City assesses long-term water supply reliability by analyzing the hydrological variability of the City surface water reservoirs (Salinas, Whale Rock, and Nacimiento). This analysis is done using the City’s Water Projection model and applies worst-case drought conditions according to guidelines set forth in the UWMP plan documentation.

10 The City’s 2020 Urban Water Management Plan can be accessed from the California Department of Water Resources, WUEdata Portal at: https://wuedata.water.ca.gov/uwmp_plans.asp?cmd=2020

Table 1: Estimated Fiscal Year 2024-2025 Annual Water Supply Water Resource Acre-Feet Description
Nacimiento Reservoir 5,482 Dependable Yield 1
Salinas & Whale Rock Reservoirs 4,910 Safe Annual Yield 2 Recycled Water 354 2024 Annual Usage 3
Siltation from 2010 to 2060 (500) WWME Policy A 4.2.2 4 10,246 Total Availability5
NOTES:

1. Dependable Yield is the contractual amount of water the City has rights to from Nacimiento Reservoir.

2. The City’s Safe Annual Yield model was updated in 2018.

3. The quantity of recycled water included (354 AF) is the actual prior year’s usage (calendar year 2024) per General Plan Water and Wastewater Management Element Policy A 7.2.2.

4. Reservoir siltation is a natural occurrence that reduces storage capacity over long periods, resulting in the reduction of safe annual yield.

5. Preliminary estimate that can change with regulatory variability, climate conditions, and other factors that may affect the City’s water supplies and customer water uses.

Generally, the City accounts for annual demand, or the water supplies necessary to meet community needs, using the methods detailed in the General Plan Water and Wastewater Management Element (WWME), Section 5.
11 The amount of water needed to serve the City’s future residential and nonresidential water demand is termed the primary water supply. The primary water supply is calculated using the build-out population identified in the General Plan, Land Use Element (2014) and the maximum allowed per capita water use under Senate Bill X7-7, which is 117 gallons per capita per day (GPCD).12 Previous Water Supply and Demand Assessments utilized this method to estimate future demand; however, this resulted in large overestimations when compared to actual demand. These overestimations of water demand did not reflect the recent historical demand, presenting difficulties in assessing the City’s short-term water supply and demand scenario.

For this Water Supply and Demand Assessment, Current Year and Dry Year water supplies were calculated using the estimated supply available from Nacimiento Reservoir (see proceeding text regarding supply disruptions), the full safe annual yield from Salinas and Whale Rock reservoirs, recycled water use from the previous calendar year plus 10 AFY, and a reduction in 500 AFY to account for siltation. To accurately assess the City’s short-term potable water demand, Current Year and Dry Year demands were calculated by multiplying the previous fiscal year’s potable water GPCD by the estimated population for fiscal years 2025 and 2026, respectively.13 The annual water supply and demand volumes calculated using the methods described above are converted to monthly volumes for the purposes of this Water Supply Assessment so that potential seasonal water shortages are highlighted.

11 The City’s General Plan, Water and Wastewater Element is available at:
https://www.slocity.org/home/showdocument?id=6649
12 Senate Bill No. 7 – Water conservation, is available at:
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=200920107SB7 13 The potable water demand for fiscal year 2024 was 79. Per the City’s General Plan, population growth is estimated to be 1% per year.

City of San Luis Obispo
2025 Water Supply and Demand Assessment

When utilizing the Water Projection Model to estimate long-term water supply and demand, GPCD decreases in accordance with the 2020 Water Shortage Contingency Plan (WSCP). For example, water demand is calculated using an initial value of 117 GPCD and decreases by ten percent (corresponding to a ten-percent decrease in water use) to 105 GPCD when available supply is less than 5-years of estimated annual demand. This ten percent reduction is in alignment with the demand reduction that the City projects it would achieve from conservation measures outlined in the WSCP.

Existing Infrastructure Capabilities and Plausible Constraints The utilization of water from three separate reservoirs provides the City with operational flexibility to meet water demands while maintaining optimal storage volumes in each reservoir; however environmental factors can inhibit reservoir storage or prevent utilization of stored water by degrading water quality. While inflow to Nacimiento has proven to be sufficient during the worst drought in recent history, it is conceivable that in the most extreme drought, when precipitation is near zero, that inflow is less than the City’s contractual amount. The City has not typically experienced significant water quality issues with water stored in its reservoirs, but extreme heat and low reservoir levels associated with drought conditions are ideal conditions for biological processes that can impair water quality, including growth of algae, which can lead to secondary water quality complaints related to taste and odor. The City’s water treatment plant is capable of producing water that meets all state and federal standards, even as water quality is deteriorated by ongoing drought.

Generally,the City satisfies demand without utilizing the full dependable yield from Nacimiento Reservoir because pipeline capacity constraints and treatment operation only allow for the delivery and treatment of approximately 4,500 AFY. Projects are being developed to allow for the full utilization of dependable yield from Nacimiento Reservoir in preparation for future periods when demands require the full available water supply. Should the City need to utilize its full entitlement to Nacimiento for any reason, it could modify plant operation to accommodate this need. Because the City relies primarily on water supplied by its reservoirs, disruptions in delivery of water from a reservoir could be caused by damage to existing infrastructure. While temporary disruptions in water supply availability can be mitigated through utilization of water from the other available reservoirs, prolonged disruptions could result in water shortages.

The City is expanding its groundwater program and considering potable reuse of recycled water to provide water supply redundancy and increased operational flexibility in extreme drought scenarios and during disruptions in delivery of water from reservoirs. Additionally, the City produces recycled water that can be used to offset potable demand and during disruptions of water supply. Ultimately the City proactively pursues projects that help gain a better understanding of potential issues that may threaten its water supply and how to mitigate them.

Current Year Water Supply and Demand Assessment
Analysis of the supply and demand data from the previous year allows for a better understanding of how annual demand is met with the available water supplies. As shown in Table 3, the City’s 2023-2024 Fiscal Year demand was 4,713 AF. The per-capita demand, including recycled water, during this period was 86 GPCD. Ninety-three percent (93%) of this demand was supplied by Whale Rock and Salinas Reservoirs, and 7% was supplied by recycled water; water deliveries from Nacimiento Reservoir were unavailable due to pipeline repairs.

Table 3: City Water Supply by Source during the 2023-2024 Fiscal Year1 (in acre-feet)
Nacimiento
Reservoir
Whale Rock
Reservoir 2
Salinas
Reservoir
Recycled
Water Groundwater 3
Total City Water
Demand
- 4,027 377 309 0 4,713
0% 85% 8% 7% 0% 100%
Notes:

1. Values are rounded.

2. Water delivered to Cal Poly State University at San Luis Obispo (Cal Poly) is excluded from the City’s water demand, as Cal Poly has its own water storage and water diversion rights in Whale Rock Reservoir.

3. Groundwater was not used for potable purposes during Fiscal Year 2023-2024.

Current Year available water supply is 6,875 AF; 4,742 AF potable water and 2,133 AF non-potable water (Table 4). In the Current Year the City planned to utilize its water sources similarly to Fiscal Year 2021- 2022 by prioritizing water from Nacimiento Reservoir to preserve or increase storage volumes in Whale Rock and Salinas Reservoirs. However, the damage to the Nacimiento pipeline, previously detailed in this report, is estimated to prevent the City from using water from Nacimiento for the remainder of the fiscal year. The City’s Current Year water supply (Table 4) summarizes actual supply volumes delivered to the City’s distribution system for the period July 2024 through February 2025 and estimated supply volumes for March through June 2025. The water supply volumes reflect the absence of Nacimiento Reservoir and the increased utilization of water from Whale Rock and Salinas Reservoirs and the associated safe annual yield. Utilizing a volume less than or equal to the safe annual yield helps to ensure that the reservoirs remain a reliable long-term water supply; however, short-term exceedance of the safe annual yield should not negatively impact long-term water supply – especially at times when the reservoirs are at storage capacity. The subtraction of 42 AF for March through June 2025 represents the City’s methods to account for siltation in the reservoirs (500 AFY divided among twelve months) and ensures that the volume of water used from Whale Rock and Salinas Reservoirs is in alignment with the General Plan Water and Wastewater Management Element (WWME), Section 5.

The Current Year estimated potable demand is 4,742 AF (Table 5). Using actual data for the period July 2024 through February 2025, the potable water GPCD is 92. Thanks to a history of collaboration between the City and its community members, community-wide water conservation has resulted in more efficient water use over the last 15 years. This water conservation ethic is supported by City programs such as the water conservation rebate program, school education program, community outreach program, customer water audits, and the retrofit upon sale program. Additionally, the City is improving the water efficiency of its operations by identifying and repairing leaking infrastructure, annually testing and upgrading water meters, and supplying parks with non-potable recycled water for irrigation. The City will conduct regular assessments of the water conservation program to ensure the most effective use of City resources to provide the greatest water savings.

Current Year water supply and demand data are shown on a monthly time-step in Table 5. The values demonstrate the seasonal differences in demand and the supplies needed to meet those demands. The City is not anticipating entering into a water shortage emergency at any point in the Current Year. The Current Year non-potable demand is 304 AF. This represents recycled water used for irrigation and construction purposes and acts to offset potable water use. The Current Year non-potable supply and demand assessment shows large surpluses for every month and a total annual surplus of about 1,829 AF.

The total non-potable supply includes the total volume of water treated at the City’s WRRF minus 4.9 AF per day creek discharge requirement. The non-potable supply and demand assessment provides insight on seasonal fluctuations in non-potable water supply and will assist the City in determining the ability to

City of San Luis Obispo
2025 Water Supply and Demand Assessment

meet increases in future demands for irrigation and the volume of water available for potable reuse projects.

Dry Year Water Supply
The City’s estimated Dry Year water supply is 9,034 AF (potable supply plus recycled water for nonpotable reuse in Table 6). The Dry Year water supply is equivalent to the Fiscal Year 2025-2026 supply and reflects a restricted supply from Nacimiento Reservoir once temporary repairs are completed in July 2025. The City’s potable and non-potable water supplies are shown on a monthly time-step in Table 6.

Dry Year Unconstrained Demand
The Dry Year estimated potable demand is 4,737 AF (Table 7). Actual Dry Year demand be lower or greater than the estimated demand because of more efficient water use and variations in water needs caused by annual climate variations. Most of the City’s potable demand is for single-family residential use (42%), followed by muti-family residential (19%), and commercial (19%). Demands for industrial, institutional, and dedicated landscape meters are each below ten percent of the total annual demand.

Single-family and multi-family residential demands are greatest during the period May through October when precipitation is generally low. This suggests that residential demand is driven by outdoor irrigation and the increased demand for irrigation during dry periods. Non-potable water is estimated to offset about 329 AF of potable demand during the Dry Year (Table 7).

Table 4: Current Year 2024-25 Water Supply, in acre-feet Potable Water Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total Nacimiento Reservoir 0 0 0 0 0 0 0 0 0 0 0 0 0
Salinas and Whale Rock Reservoirs3 484 471 461 476 388 351 384 340 328* 349* 430* 448* 4,910* Groundwater 0 0 0 0 0 0 0 0 0 0 0 0 0
Siltation from 2010 to 2060 - - - - - - - - (42) (42) (42) (42) (168) Total by Month (Potable) 484 471 461 476 388 351 384 340 286* 307* 388* 406* 4,742* Non-Potable Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total Recycled Water for non-potable use4 41 42 33 30 17 8 10 8 11* 24* 33* 37* 294* Recycled Water available for use 68 58 86 85 149 154 185 260 289* 204* 168* 133* 1,839* Total by Month (non-potable) 109 100 119 115 166 162 195 268 300* 228* 201* 170* 2,133* Notes:

1. Values are rounded to the nearest whole number.

2. * Denotes estimated values.

City of San Luis Obispo
2025 Water Supply and Demand Assessment

Table 5: Current Year 2024-25 Water Supply and Demand, in acre-feet Potable Water Jul Aug Sep Oct Nov Dec Jan Feb Mar* Apr* May* Jun* Total* Unconstrained
Demand 484 471 461 476 388 351 384 340 286 307 388 406 4,742 Total Water Supply2 484 471 461 476 388 351 384 340 286 307 388 406 4,742 Surplus/Shortage 0 0 0 0 0 0 0 0 0 0 0 0 0
% Surplus/Shortage 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% State Standard
Shortage Level 0 0 0 0 0 0 0 0 0 0 0 0 0
Non-Potable Jul Aug Sep Oct Nov Dec Jan Feb Mar* Apr* May* Jun* Total* Unconstrained Demand 41 42 33 30 17 8 10 8 11 24 37 43 304 Total Water Supply3 109 100 119 115 166 162 195 268 300 228 201 170 2,133 Surplus/Shortage 68 58 86 85 149 154 185 260 289 204 164 127 1,829 % Surplus/Shortage 62% 58% 72% 74% 90% 95% 95% 97% 96% 89% 82% 75% 86% Notes:

1. * Denotes estimated values.

2. Values are rounded to the nearest whole number.

Table 6: Estimated Dry Year 2024-25 Water Supply, in acre-feet Water Supply
Source
Additional
Detail on Water
Supply
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total
Annual
Water
Supply
Nacimiento
Reservoir
From dependable
yield1
249 234 218 234 207 184 161 164 179 190 235 245 2,500
Salinas and
Whale Rock
Reservoirs
From safe annual
yield
488 459 428 459 406 361 318 322 352 374 462 481 4,910
Groundwater Supplier-produced - - - - - - - - - - - - - Other Decrease in
available supply
from siltation in
reservoirs
(41) (41) (41) (41) (42) (42) (42) (42) (42) (42) (42) (42) (500) Total Potable 696 652 605 652 571 503 437 444 489 522 655 684 6,910 Recycled Water
for non-potable
reuse
For irrigation and
construction uses
41 42 36 42 34 17 5 5 11 24 34 38 329
Recycled Water
available for use
Produced by the
WRRF that is not
allocated for nonpotable reuse or
creek discharge
requirements
65 60 89 115 91 117 240 224 289 204 168 133 1,795
Total Non-Potable 106 102 125 157 125 134 245 229 300 228 202 171 2,124

1. Restricted supply from Nacimiento due to service through temporary connection.

I. PLANNED SHORTAGE RESPONSE ACTIONS
The City does not plan to implement a water shortage response in the Current Year or following Dry Year; however, the City’s Water Shortage Contingency Plan (WSCP) provides a framework for responding to water shortages when necessary.14 The City’s water shortage response is dependent on the ability to temporarily augment supply and/or reduce water demand. The goals of the WSCP are to extend the City’s available water resources long enough to gain another winter rainfall period which could serve to add to reservoir storage. Extending available water resources through water demand reductions provides time for the City to bring on supplemental water supplies to meet demand. The City’s water shortage response would combine a variety of strategies including outreach, indoor water efficiency regulations, and outdoor irrigation restrictions, each increasing in intensity as the shortage persists and the City’s water supplies are further restricted. If necessary, implementation of these restrictions is critical to conserve the City’s water supply for the greatest public benefit regarding domestic use, sanitation, and fire protection.

The City reads water meters monthly to ensure water consumption data is collected for tracking and analysis, as well as meeting state reporting requirements. Monitoring and reporting water use metrics are fundamental to water supply planning and management. Monitoring is essential in evaluating the effectiveness of expected response actions and identifying the need for new actions. While compliance tracking helps to ensure the effectiveness of enforcement programs. To monitor the functionality of the WSCP and ensure effectiveness, staff will track community response to water demand reduction measures, public outreach, enforcement, and other administrative actions at each water shortage response stage. This will include a review of monthly water consumption data for each customer class and evaluation of associated revenue and expenditure impacts. Based on these analyses, staff will recommend program refinements to the City Council as water shortage stages progress.

14 The City’s Water Shortage Contingency Plan is available at:
https://www.slocity.org/home/showpublisheddocument/30334/637575513697770000

Table 7: Dry Year 2024-25 Unconstrained Demand, in acre-feet Water Use
Projected Monthly Water Demand1 Total
Annual
Demand
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Demands Served by Potable Supplies
Single Family 175 183 177 176 154 126 121 129 131 153 168 174 1,867 Multi-Family 85 89 96 98 90 82 81 83 82 91 89 86 1,052
Commercial 80 82 77 79 73 68 59 65 66 68 70 77 864
Industrial 15 15 14 13 9 7 6 7 7 10 12 13 128
Institutional/Government 3 3 3 4 3 3 3 2 3 3 3 3 36
Landscape 47 48 44 38 25 11 9 14 15 26 38 44 359
Water Loss 41 42 41 41 35 30 28 30 30 35 38 40 431
Total by Month (Potable) 446 462 452 449 389 327 307 330 334 386 418 437 4,737 Demands Served by Non-Potable Supplies2
Landscape 36 37 30 26 16 6 6 9 10 19 32 36 263
Golf Course Irrigation 5 5 3 3 2 0 1 1 1 3 4 5 33
Construction 4 5 4 4 2 0 1 2 1 2 3 4 32
Utilities 0 0 0 0 1 0 0 0 0 0 0 0 1
Total by Month (Non-Potable) 45 47 37 33 21 6 8 12 12 24 39 45 329 Notes:

1. Estimated values.

2. Non-potable water treated to tertiary level.

Table 8: Dry Year 2023-24 Water Supply and Demand, in acre-feet Potable Water Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total Anticipated Unconstrained
Demand 446 462 452 449 389 327 307 330 334 386 418 437 4,737 Anticipated Total Water Supply 696 652 605 652 571 503 437 444 489 522 655 684 6,910 Surplus/Shortage 250 190 153 203 182 176 130 114 155 136 237 247 2,173 % Surplus/Shortage 36% 29% 25% 31% 32% 35% 30% 26% 32% 26% 36% 36% 31% State Standard Shortage Level 0 0 0 0 0 0 0 0 0 0 0 0 0 Non-Potable Water Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total Anticipated Unconstrained
Demand 45 47 37 33 21 6 8 12 12 24 39 45 329
Anticipated Total Water Supply 106 102 125 157 125 134 245 229 300 228 202 171 2,124 Surplus/Shortage 61 55 88 124 104 128 237 217 288 204 163 126 1,795 % Surplus/Shortage 58% 54% 70% 79% 83% 96% 97% 95% 96% 89% 81% 74% 85%

II. SUMMARY
Based on the findings from this Water Supply Assessment, the City does not expect to enter a water shortage emergency and will not need to implement water shortage response actions. In fact, the Water Supply Assessment shows that the Dry Year the City will have a water supply surplus on an annual and monthly timestep. The City will continue to monitor its supply and demand using its Water Projection Model to ensure that any water shortage emergencies may be identified well in advance so that programmatic and operational changes can be made to mitigate their effects. Finally, this Water Supply Assessment assumes reliable delivery of available water supplies during drought conditions similar to those experienced in recent history. Decreases in water availability caused by extreme drought conditions or disruptions in the delivery of available water supplies may create unexpected water shortage emergencies. If such water shortage emergencies arise, the City is prepared to implement its WSCP to extend the City’s available water resources long enough to gain additional winter rainfall periods which could serve to add to reservoir storage or to bring on supplemental water supplies to meet demand.

In summary, the City maintains a robust water supply portfolio that can meet current and future demands, including during dry periods. To plan for potential future dry years, the City has secured a multi-source supply that provides reliability and operational flexibility. The City’s estimates of water supply and demand account for both current and future build-out demands to ensure adequate water supply, and the use of conservative estimates provides a buffer that reduces the potential for water shortages even during unexpected disruptions in water supply or greater than expected increases in demand. This buffer is in part to the long-standing history of water conservation by the City and its community members, making water conservation a reliable component of the City’s water shortage mitigation strategy. Additionally, the City is working to expand the use of recycled water within its limits to offset additional potable water use and to develop groundwater and potable reuse programs to provide supplementary sources of potable water supply that provide further operational flexibility during disruptions in water deliveries from reservoirs.

Table of Contents

1. Introduction......................................................................................................................... 6

2. Service Area and Water System Characteristics................................................................. 8

3. Water Supply and Demand ................................................................................................13

4. Historical and Current Water Conservation Program..........................................................22

5. Regulatory Compliance......................................................................................................29

6. Evaluation of Long-Term Water Conservation Measures ...................................................33

7. Final Water Conservation Program ....................................................................................38

8. Conclusion.........................................................................................................................45

9. Appendix............................................................................................................................47 List of Tables
Table 1. Projected and Actual City Population...........................................................................10 Table 2. Annual Water Supply for Fiscal Year 2022-23.............................................................14 Table 3. Water Supply Use by Source for Fiscal Year 2023......................................................15 Table 4. Water Demand by Customer Category for Fiscal Year 2022-23. .................................16 Table 5. Key Water Loss Audit Metrics. ....................................................................................24 Table 6. Results of the 2022 Survey of Businesses' Interests in Water Conservation Measures. .................................................................................................................................................35 Table 7. Quantity and Budget Allocated for Water Conservation Plan C. ..................................35 Table 8. Projected Water Demands. .........................................................................................40 Table 9. Estimated CO2 Savings from Implementation of the Selected Water Conservation Program....................................................................................................................................42 Table A 1. Commercial, Industrial, and Institutional (CII) Water Account Classifications ...........47 Table A 2. Plan A Water Conservation Measure Parameters....................................................49 Table A 3. Benefit-Cost Ratio for Conservation Measures Included in Plan A. ..........................50 Table A 4. Plan B Water Conservation Measure Parameters....................................................51 Table A 5. Plan C Water Conservation Measure Parameters....................................................53 Table A 6. Implementation Schedule.........................................................................................54 List of Figures
Figure 1. Map of Key Water Infrastructure.................................................................................. 9 Figure 2. Water Demand by Source (FY2000-2022). ................................................................15

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 3 Figure 3. Actual City Water Demand Versus SB X7-7 Estimated Water Demand (FY 2000 - FY 2023). .......................................................................................................................................18 Figure 4. Historical Storage Volume, in Acre-Feet, in Salinas and Whale Rock Reservoirs, and Projected Storage Volume Through an Extended Drought Period.............................................20 Figure 5. Screenshot of the City of San Luis Obispo's Plumbing Retrofit Portal. .......................31 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..........................................................................................................................................32 Figure 7. Estimated Water Savings and Program Costs for Water Conservation Plans A-C......37 Figure A 1. Plan A Annual Program Water Savings. .................................................................51 Figure A 2. Plan B Annual Program Water Savings. .................................................................52 Figure A 3. Benefit Cost Ratio Versus Expected Water Savings ...............................................52 Figure A 4. Plan C Annual Program Water Savings. .................................................................53

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 4 List of Abbreviations and Acronyms
AB Assembly bill
AF Acre-feet
AFY Acre-feet per year
AMI Advanced metering infrastructure
AWE Alliance for Water Efficiency
AWWA American Water Works Association
CALGreen California Code of Regulations, Title 24, California Green Building Standards Code
Cal Poly California Polytechnic State University
CII Commercial, industrial, and institutional
CO2 Carbon dioxide
CWC California Water Code
DIM Dedicated irrigation meter
FY Fiscal year
GHG Greenhouse gas
GPCD Gallons per capita per day
HCF Hundred cubic feet
kWh Kilowatt hour
Mgd Million gallons per day
MFR Multi-Family Residential
MWELO Model Water Efficient Landscape Ordinance
PG&E Pacific Gas and Electric
psi Pounds per square inch
R-GPCD Residential gallons per capita per day
SB Senate Bill
SCADA Supervisory Control and Data Acquisition
SFR Single-Family Residential
UWMP Urban Water Management Plan
UWUO Urban Water Use Objective
WRRF Water Resource Reclamation Facility
WSCP Water Shortage Contingency Plan
WTP Water Treatment Plant
WWME Water and Wastewater Management Element

1. INTRODUCTION
Purpose and Scope
The City of San Luis Obispo (City) has developed the Water Conservation and Efficiency Plan to ensure the sustainable management of its water resources while meeting the needs of a growing community and the demands of evolving water-use regulations. The purpose of this plan is to guide the implementation of water conservation measures that maximize water savings using available financial and staffing resources. Water conservation includes activities designed to (1) reduce the demand for, and improve use efficiency of, water use (demand management), (2) reduce losses and waste of water, and (3) improve land management practices, such as soil improvement and low-impact development stormwater retention.

The City is committed to maintaining its long history of water conservation and water supply reliability. As a continuation of this commitment, the Water Conservation and Efficiency Plan includes a detailed assessment of historical and current water conservation efforts, a comprehensive evaluation of long-term water conservation measures, and thoughtful selection of water conservation measures to be incorporated into the City’s future water conservation programing. The Water Conservation and Efficiency Plan also aims to estimate water supply and demand changes in response to water use efficiency regulations, implementation of water conservation measures, and population growth. This plan differs from the City’s Water shortage Contingency Plan (WSCP)1in that it defines actions the City will take to proactively conserve water, while the WSCP defines water conservation actions that will be taken in response to various degrees of drought.
1 The City’s 2020 Water Shortage Contingency Plan can be accessed at:
https://www.slocity.org/home/showpublisheddocument/31039/637673766931570000

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 7 Objectives
The five primary objectives of this plan are to:

1. Develop cost-effective water conservation measures that maximize opportunities to meet the future water needs of the community.

2. Offset and/or delay the need to construct additional water supplies or upsize treatment and distribution infrastructure.

3. Offset and/or reduce ratepayer costs for the treatment and delivery of safe water and the treatment of wastewater.

4. Meet state and federal water conservation mandates.

5. Foster environmental stewardship through the implementation of responsible and innovative water use practices.

To achieve these objectives, the City will continue to strive to be more water-efficient within its own operations and maintenance practices and encourage customers to be more water efficient through the implementation of various water conservation measures. The Water Conservation and Efficiency Plan will act as a roadmap for the City to meet its water conservation goals, while also ensuring that its water resources are sustainable for future generations.

Plan Development and Public Participation
The City’s Water Conservation and Efficiency Plan was developed with valuable input and recommendations to ensure that it reflects the needs of the community. Stakeholders included City staff and members of the community-at-large. The plan will be regularly reviewed and revised to reflect new technology and industry practices, and staff will seek public input during these updates to ensure continued community involvement. Revisions will be made with careful consideration of the benefits and costs associated with the most current water conservation and efficiency industry standards. By continuing to engage with a wide range of stakeholders, the Water Conservation and Efficiency plan will continue to promote the responsible use of the City’s water resources for all community members.

Plan Elements
The City’s approach to water conservation is tailored to the unique needs and characteristics of the San Luis Obispo community. The Water Conservation and Efficiency Plan includes a comprehensive analysis of the City’s water service area, current and historical water supply and demand patterns, and relevant conservation regulations. Next, an evaluation of potential longterm water conservation measures is conducted using the Alliance for Water Efficiency (AWE) Conservation Tracker Tool. With this information, the plan identifies a final water conservation program and sets specific targets for reducing usage in residential and commercial sectors. This section also outlines the measurable objectives the City aims to achieve to meet those targets.

Lastly, the Water Conservation and Efficiency Plan describes an implementation plan that the City will use to regularly monitor and evaluate the effectiveness of the water conservation measures that have been implemented. Overall, the Water Conservation and Efficiency Plan acts as an important tool in evaluating the City’s approach to water conservation and establishing a more sustainable and resilient water supply for the community.

2. SERVICE AREA

AND WATER
SYSTEM

CHARACTERISTICS
Service Area
The City of San Luis Obispo is located about half-way between Los Angeles and San Francisco, California (Figure 1) and has a total area of 13.2 square miles. Situated in a coastal valley approximately ten miles inland from the Pacific Ocean, the City’s Mediterranean climate provides for mild and dry summers and cool winters, with an annual average of about 20 inches of precipitation. Summers are generally warm and sunny, often with morning fog from the Pacific coast. Winters are generally mild, though below freezing lows may be expected during the winter.

Temperatures vary widely, with 80° F readings in January and February not uncommon. Because the City receives water from surface water reservoirs located in different watersheds, climate data specific to the areas surrounding the reservoirs are utilized in water management models.

Demographic Forecasts
The City’s January 2023 population was 47,788.
2 From 2012 to 2022, the City grew by 235 people
which was below the City’s General Plan one percent growth maximum3. The City’s future growth is projected to be in specific plan areas, as well as infill and intensification of existing developed areas, such as the City’s’ downtown.
2 The State of California Department of Finance, Population and Housing Estimates for Cities, Counties, and the State – January 1, 2022 and 2023 can be accessed at: https://dof.ca.gov/forecasting/demographics/estimates-e1/ 3 The City of San Luis Obispo General Plan can be found at: https://www.slocity.org/government/departmentdirectory/community-development/planning-zoning/general-plan

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 9 Figure 1. Map of Key Water Infrastructure.

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 10 The City uses the growth rate and population projections from the City’s General Plan Land Use Element (1% annual growth rate and 57,200 persons in 2035). To comply with State requirements, the City’s 2020 Urban Water Management Plan (UWMP) 4 projected population
through 2040. The City assumed an annual population growth of one percent for the five years from 2035 to 2040, yielding a future population of 60,118 in 2040. Table 1 provides the City’s actual 2020 population and population projections to 2040.

Table 1. Projected and Actual City Population.
2020 2025 2030 2035 2040
Land Use Element (2014),
Projected Population1
48,826 51,317 53,934 57,200 60,118
Actual City Population2 45,920 --- --- --- ---
1City of San Luis Obispo, General Plan, Land Use Element, Table 3, 2014. 2Population estimate for the City of San Luis Obispo is from the California Department of Finance website at:
www.dof.ca.gov/forecasting/Demographics/Estimates/e-1/
The City is a civic, economic, and cultural hub on the Central Coast. With an influx of employees to major regional employers, the City has an estimated daytime population of up to 90,000 persons. Public sector jobs account for a sizeable portion of the job market, including California Polytechnic State University (Cal Poly) and the County of San Luis Obispo. Per the June 2019 Cal Poly Campus Master Plan5, student enrollment, faculty, and staff is anticipated to grow from just over 24,000 at the 2015 baseline mark, to nearly 29,000 people by the 2035-36 academic year (an average increase of 200 students per year). Although Cal Poly plans to increase on campus housing and the university has its own water supply source, large portions of the student, faculty, and staff populations reside within City limits and visitors frequently visit or stay in the City for university related events. In addition to local events, the City is also a popular tourist destination due to its proximity to beaches and open space areas, historic downtown, and its overall vitality. The City’s tourism is at its peak during the summer; however, Cal Poly is also out of session at this time, thus reducing the overall daily population served by the City during the summer months.

Water System
The City utilizes water from three surface-water sources for potable (drinking-water) purposes and recycled water from its Water Resource Recovery Facility (WRRF) for non-potable uses.

Several upgrades of the City’s Water Treatment Plant (WTP) have improved treatment plant resiliency and capacity to meet the City’s evolving demands. Treated water is delivered from the WTP to water customers through a system of water mains, storage tanks, and pump stations. The City performs regular system maintenance to ensure reliable water delivery and to reduce water loss. Water demand is measured at customer meters monthly using a contract meter reading service, which allows prompt, accurate, and efficient meter reading. Monthly meter reads also allow the City’s Water Resources section to respond to potential concerns of water loss in a timely manner. To increase water efficiency in the community’s water distribution and treatment 4 The City of San Luis Obispo 2020 Urban Water Management Plan can be found at:
https://www.slocity.org/home/showpublisheddocument/31041/637673768464130000 5 The 2019 Cal Poly Campus Master Plan can be found at: https://masterplan.calpoly.edu/docs/cal-poly-campusmaster-plan-2019-06-27.pdf

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 11 systems, the City has developed a Water Distribution System Operations Master Plan6, and conducts annual Water Loss Audits.

Water Sources
The City utilizes three surface water reservoirs to meet its potable water demand. Salinas Reservoir, located nine miles southeast of the community of Santa Margarita, has provided water to the City since 1944. Whale Rock Reservoir, located one-half mile east of the town of Cayucos, has been a water source for the City since 1961. Water deliveries from Nacimiento Reservoir, located 14 miles northwest of the City of Paso Robles, to the City began in January 2011. Three distinct raw water transmission facilities deliver water to the City’s WTP from the Salinas, Whale Rock, and Nacimiento Reservoirs. The City does not currently rely on local groundwater to serve the community’s long-term water supply needs. However, the City has relied heavily on groundwater during past droughts and is planning to resume the use of groundwater pumping in 2026. The City is supplied recycled water from its WRRF, which is utilized for landscape irrigation and for construction water (dust suppression, compaction, etc.). The City will be maximizing the production of recycled water with the upgrade of the WRRF, currently under construction. Figure 1 shows the location of the City’s reservoirs and raw water conveyance pipelines.

Water Treatment System
The City’s WTP is located on Stenner Creek Road, northwest of the Cal Poly campus. The facility was constructed in 1964 to provide treatment of surface water from Salinas and Whale Rock Reservoirs. The WTP is a conventional plant that includes ozone disinfection, coagulation, flocculation, sedimentation, and filtration. The WTP was originally designed to treat up to eight million gallons per day (mgd). In 1977, the plant was upgraded to provide 11.5 mgd of treatment capacity but has been able to treat up to 12.0 mgd for limited periods during peak summertime water demands. In 1994, the WTP was upgraded to comply with new regulations and to increase the treatment capacity to 16.0 mgd. In 2020, the City entered into a public/private partnership with Pacific Gas and Electric (PG&E) for the Water Energy Efficiency Project at the WTP. Project components included upgrading the ozone generation system, Supervisory Control and Data Acquisition (SCADA) system, plant service water, and improvements to the Transfer Pump Station. The implementation of the Water Energy Efficiency Project is estimated to result in a reduction of energy usage of over 33 percent annually from 2019 WTP operations.

Water Distribution System
The City’s potable water distribution system delivers water from the WTP to approximately 16,500 metered customers and over 2,000 fire hydrants via 190 miles of water mains, ten treated water storage tanks, and seven pump stations. The water delivered from the WTP is split into two main distribution networks, the high-pressure side of town and the low-pressure side. The WTP has a large pump station (the Transfer Pump Station) that pumps water to the high-pressure zones which provide service to the higher elevation areas in the City. The transfer pumps take approximately half of the produced water, increase the pressure, and then provide water to Reservoir #2, Cal Poly, and other portions of the City, generally north and east of the Union Pacific Railroad tracks. Water flows by gravity directly into the lower pressure zones from the WTP's 6 The City of San Luis Obispo Final Potable Water Distribution System Operations Master Plan, December 2015, can be found at: https://www.slocity.org/home/showpublisheddocument/6439/636009798150130000

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 12 onsite clear well treated water storage tanks. The City has ten water storage facilities, seven of which are steel storage tanks ranging in size from 0.04 to 4.0 million gallons and three concrete facilities with a capacity of 0.35 to 7.5 million gallons. In 2023, the combined storage capacity is

23.705 million gallons. The goal of the distribution system is to provide uninterrupted water flow at adequate pressures (between 40 pounds per square inch (psi) and 80 psi) to meet all fire and domestic flow requirements and to minimize system water loss due to breaks and leakage. This pressure range will meet the needs of most irrigation sprinklers and other uses and provide adequate pressure for fire sprinkler systems. Preventative maintenance is performed to minimize water service disruption, prolong system service life, and reduce water loss.

The water distribution team is currently in the process of updating mechanical meters to digital meters that will allow the City to utilize Advanced Metering Infrastructure (AMI) to read water meters through a cellular network. This system will provide customers a portal to track their water use and be alerted of potential water leaks. Automatic reads will also allow the City to eliminate the need for contract meter reading, identify instances of potential water waste or leaks more quickly, and improve customer service operations.

Contract Meter Reading
In January 2015, the City executed its first water meter reading contract to address irregular billing period
lengths and billing dates during the City’s Average
Winter Water Use billing cycle. Meters are read at the
beginning of each month utilizing a contract meter
reading service provider. The use of this service
makes it feasible to have all of the City’s water meters read in one week and for billing dates to be
standardized for all ratepayers. Contract meter
readers also take pictures of water meter reads that
are outside a normal range of water consumption. Prior
to contract meter reading, Water Resources staff had
to visit a property to re-read a meter if the meter read appeared outside of a normal range. Staff are now able
to utilize the picture taken by the contract meter reader to inform customers of the potential for a water leak or another cause of high consumption. The pictures have
also reduced the number of billing errors related to
misread meters. The City continues to utilize a contract meter reading service provider in 2023 and looks to
expand the efficiencies gained through use of these
services, and associated technology, in the future.

3. WATER SUPPLY

AND DEMAND
Water Supply
Water supply reliability is the City’s ability to meet the water needs of its customers under varying conditions. The City estimates annual Water Supply based on Water and Wastewater Management Element (WWME), Section 37. This method incorporates Safe Annual Yield from Salinas and Whale Rock Reservoirs as determined through the City’s 2018 Safe Annual Yield Model, the City’s contractual amount of water from Nacimiento Reservoir (Dependable Yield), the prior Calendar Year volume of Recycled Water utilized by the City, and reduction in reservoir storage caused by siltation as directed in WWME Policy A 4.2.2. As described in Chapter 6 of the City’s 2020 UWMP8, the City assesses water supply reliability by analyzing the hydrological variability of the City surface water reservoirs (Salinas, Whale Rock, and Nacimiento), regulatory variability, climate conditions, and other factors that may affect the City’s water supplies and customer water uses. This analysis is done using the City’s Water Projection model and applies worst-case drought conditions according to guidelines set forth in the UWMP plan documentation.

The City accounts for the water supplies necessary to meet community needs using the methods detailed in WWME Section 5. The amount of water needed to serve the City’s future residential and non-residential water demand is termed the primary water supply. The primary water supply is calculated using the build-out population identified in the General Plan, Land Use Element (2014) and 117 gallons per capita per day (GPCD), which is the maximum allowed per capita water use under the Water Conservation Act of 2009 (SB X7-7) 9 .
7 The City of San Luis Obispo General Plan, Water and Wastewater Element is available at:
https://www.slocity.org/home/showdocument?id=6649
8 The City’s 2020 Urban Water Management Plan can be accessed from the California Department of Water Resources, WUEdata Portal at: https://wuedata.water.ca.gov/uwmp_plans.asp?cmd=2020 9 Senate Bill No. 7 – Water conservation, is available at:
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=200920107SB7

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 14 Fiscal Year (FY) 2022-2023 (July-June) available water supply was 10,183 acre-feet (AF; Table 2). Results from the City’s Water Projection Model demonstrate that this is a reliable estimate of supply availability for the Current Year as well as extended drought periods (greater than 10 years).

Table 2. Annual Water Supply for Fiscal Year 2022-23.

Water Source Annual Water
Supply (AF) Description
Nacimiento Reservoir 5,482 Dependable Yield1
Salinas & Whale Rock Reservoirs 4,910 Safe Annual Yield2 Recycled Water 291 2022 Annual Usage3
Siltation from 2010 to 2060 (500) WWME Policy A 4.2.24
Total Availability 10,183 ---
1Dependable Yield is the contractual amount of water the City has rights to from Nacimiento Reservoir. 2The City’s Safe Annual Yield model was updated in 2018. 3The quantity of recycled water included (291 AF) is the actual prior year’s usage (calendar year 2022) per General Plan Water and Wastewater Management Element Policy A 7.2.2. 4Reservoir siltation is a natural occurrence that reduces storage capacity over long periods, resulting in the reduction of safe annual yield.

Water Demand
The FY 2023 calculated potable demand was 6,262 AF based on the 2023 population of 47,788 and per-capita daily demand of 117 GPCD. The actual FY 2023 demand shown in Table 3 (4,935 AF) is lower than the estimated demand because of more efficient water use (92 GPCD) and variations in water needs caused by annual climate variations. The City’s total water demand has not increased at a rate that follows the rate of population growth (Figure 2). In fact, communitywide water use has decreased since 1987 when it was at a high of 182 GPCD. The residential GPCD (R-GPCD) for the City during FY 2023 was 53 R-GPCD, which is considerably lower than the San Luis Obispo County average of 70 R-GPCD for 2022, according to the California Water Board’s Water Conservation Reporting10. The FY 2023 non-potable demand was 231 AF. This represents recycled water used for irrigation which acts to offset potable water use. 10 The California Water Board Water Conservation and Production Reports can be found at:
https://www.waterboards.ca.gov/water_issues/programs/conservation_portal/conservation_reporting.html

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 15 Table 3. Water Supply Use by Source for Fiscal Year 2023. 2023 Fiscal Year Water
Supply Use (AF)1 Percentage of Annual Use
Nacimiento Reservoir 2,096 42%
Whale Rock Reservoir2
1,660 34%
Salinas Reservoir 948 19%
Recycled Water 231 5%
Groundwater 0 0%
Total City Water Demand 4,935 100%
1Values are rounded.
2Water delivered to Cal Poly State University is excluded from the City’s water demand, as Cal Poly has its own water storage and water diversion rights in Whale Rock Reservoir. 3Groundwater was not used for potable purposes during FY 2022.

Figure 2. Water Demand by Source (FY2000-2022).

Analysis of Water Use by Customer Group
The City has several different customer types, which can primarily be categorized as residential, commercial industrial and institutional (CII), landscape, and recycled water users. These categories are then further broken down into classifications based on facility. These classifications allow the City to better understand specific customer water needs, develop more effective water conservation programs, and establish fair and equitable water rates.

Residential Water Use
Residential water use is comprised of single-family residences (SFR), multi-family residences (MFR), mobile home parks, and homestays. As displayed in Table 4, in FY 2023 most of the City’s potable demand was for SFR use (50%), followed by MFR (17%). During FY 2023, 2,849 AF of water was utilized by all residential water customers in the City. Residential demands are

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 16 generally greatest during the period May through October when precipitation is generally low, and temperatures are highest. This suggests that residential demand is driven by outdoor irrigation during hot, dry periods. During the cooler, winter months when landscape irrigation is minimal, the R-GPCD can be used as a rough estimate of indoor residential water use; for the City this value averages about 44 R-GPCD for the period 2015-2022.

Table 4. Water Demand by Customer Category for Fiscal Year 2022-23.

Customer Category Water Demand (AF) Percent of Total
Demand
Single Family Residential 2,072 50%
Multi-Family Residential 704 17%
Commercial 882 21%
Institutional 109 3%
Industrial 34 1%
Dedicated Residential Irrigation Meters 73 2%
Dedicated CII Irrigation Meters 235 6%
Total Potable Water Demand 4,108 100%
Commercial, Industrial, and Institutional (CII) Water Use CII water use varies based on the type and size of operations, the facility’s water demands (landscaping and plumbing fixtures), and the water practices in place. The City’s CII customers are categorized into 28 classifications, which are detailed in the Appendix A1 of this plan. These classifications allow the City to identify potentially abnormally high-water users within each classification and to estimate water use of new businesses proposed for development within the City. CII water demand, not including landscape irrigation demand, accounted for approximately 25% (1,025 AF) of potable water demand during the FY 2023.

Landscape Water Use
Landscape water use is comprised of City Park landscaping, City landscaping (i.e. medians, parkway, and facility landscaping), residential landscaping, and CII landscaping. The City’s municipal code requires that nonresidential, multifamily, or mixed-use properties with one thousand square feet of landscaping or greater use a dedicated irrigation meter (DIM) to measure landscape irrigation demand11. DIMs allow customers to more precisely understand water used for landscaping and identify leaks or other issues associated solely with the irrigation system. This allows property owners to make more informed decision about their overall water consumption and can assist in efficient water use. Additionally, forthcoming regulations from the State of California will require the use of DIMs on certain CII properties, and the City’s policy requiring DIMs positions it well to meet those regulations. About 235 AF of water was measured by DIMs at CII properties in the City in FY 2023. This is approximately 6% of the City’s potable water use for that year.

Recycled Water Use
The primary use of recycled water in the City is for landscape irrigation with the majority of that use occurring from May through October. About 231 AF of recycled water was used for landscape 11 City municipal code 13.04.130, Water Meters is available at:
https://sanluisobispo.municipal.codes/Code/13.04.130

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 17 irrigation in FY 2023. Of this amount 45% was utilized to maintain City landscape areas, including parks, 23% for MFR landscaping, and 32% for CII landscaping and private parks. About 26 AF of recycled water was used for construction water in FY 2023. The City has identified a “seasonal surplus” of recycled water available in excess of the required discharge to San Luis Obispo Creek (5 AF per day as required by the National Oceanic and Atmospheric Association, National Marine Fisheries Service in 2005) and recycled water for landscape irrigation and construction needs. As only a limited amount of landscape irrigation takes place from November to April (seasonal offpeak period), more than 6 AF per day of recycled water is available during the seasonal off-peak period. An upgrade of the WRRF is underway, which will accommodate the City’s buildout and maximize recycled water production. The upgrade will enable the City to maximize beneficial use of recycled water, including consideration of either direct or indirect potable reuse in the future.

Until potable reuse is implemented, the City is focused on expanding the use of recycled water within City limits to help offset potable water use. Per the City’s Recycled Water Master Plan, recycled water use is projected to increase by 10 AF per year.

Conservation as a Source of Supply
Water conservation above and beyond the state’s regulations can be considered a source of water supply because the City retains that volume of water in its reservoirs and groundwater aquifers for future use. Per SB X7-7, the City is required to meet a per-capita target of 117 GPCD.

Prior to FY 2010 the City exceeded the water conservation target; per capita water use for the City was 129 GPCD in FY 2007 and FY 2008 (Figure 3). Since FY 2010 the City is consistently below the SB X7-7 target and the water conservation mandates enacted by the State during the 2015-2017 drought reduced the City’s annual demand to its current levels of around 100 GPCD, while current water conservation efforts are aimed at maintaining or reducing per-capita water use. Average annual water supply resulting from water conservation for FY 2010-2023 is 813 AFY, or about 20 percent of the City’s FY 2023 potable demand.

The City accounts for the increase in available water supply resulting from water conservation by including it in its water supply accounting. In addition to the Primary Water Supply described above, the City estimates a Reliability Reserve and a Secondary Water Supply. The Reliability Reserve acts as a buffer for unforeseen or unpredictable long-term impacts and the water supply that exceeds the City’s Primary Water and Reliability Reserve is referred to as the City’s Secondary Supply.

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 18 Figure 3. Actual City Water Demand Versus SB X7-7 Estimated Water Demand (FY 2000 - FY 2023).

Impact of Plumbing Code or Building Code on Water Use
Plumbing and building codes serve as instrumental tools for water conservation efforts. These type of conservation efforts are considered “passive” and result in long-term, reliable water savings as old inefficient fixtures are replaced over time. Federal and state policies such as the Federal Energy Policy Act of 199212, the California Code of Regulations Title 2013, and the California Code of Regulations, Title 24, California Green Building Standards Code (CALGreen Code)
14 mandate fixtures being sold or installed meet specific water efficiency standards. These include low-flow toilets, urinals, showerheads, faucets, and pre-rinse spray valves, which are designed to limit water usage without compromising performance. City of San Luis Obispo plumbing codes also mandate the use of water-efficient fixtures and designs, aligning with statewide plumbing codes and water conservation initiatives.

The City adopted Chapter 17.70.220 Water-efficient landscape standards15 as a part of its municipal code that promotes the use of native and drought tolerant materials and sets water efficient landscape standards consistent with State law. Systems must be designed for efficient, 12 The Federal Energy Policy Act of 1992 can be accessed at: https://afdc.energy.gov/files/pdfs/2527.pdf 13 The California Code of Regulations, Title 20. Public Utilities and Energy can be accessed at:
https://www.energy.ca.gov/sites/default/files/2021-07/Title%2020%20Updated%20July%2023%2C%202021.pdf 14 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 15 City of San Luis Obispo municipal code 17.70.220, Water-efficient landscape standards is available at:
https://sanluisobispo.municipal.codes/Code/17.70.220

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 19 conservative use of water that are in accordance with the City’s Engineering Standards16.

Community Design Guidelines17 also required proposed landscaping to set goals to reflect the local climate and conserve water, including considering water shortages, effects of drought, plant loss, and increased water cost. Proposed developments must also incorporate features such as permeable surfaces that facilitate the absorption of water into the ground as a part of the City’s Community Design Guidelines. Mandating water-efficient fixtures and optimizing outdoor water use create a foundation for sustainable water practices that create long-term water savings.

Overall Supply and Demand Balance
Per California Water Code (CWC §10632.1.)18 the City conducts an Annual Water Supply and Demand Assessment (Water Supply Assessment) for the purpose of (i) evaluating its water supply reliability for the current year and one subsequent dry year and (ii) generating and submitting an Annual Shortage Report to the California Department of Water Resources. The City converts annual supply and demand values to monthly volumes for the purposes of this Water Supply Assessment so that potential seasonal water shortages are highlighted. Monthly supply and demand volumes are calculated using average monthly demand as a percent of average annual historical demand for the period following the previous drought (2015-2017) and including the most recent drought. These monthly average demand percentages are then applied to the annual supply and demand to provide monthly volumes. The City’s FY 2022 Water Supply and Demand Assessment showed that the City consistently has a water surplus (supply is greater than demand) month to month for a typical year and also a subsequent, hypothetical dry year.

For longer-range estimations of supply and demand balance the City utilizes a Water Projection Model to test both hypothetical and actual water demand scenarios and to forecast how long water supplies will sustain the community under specific conditions. The Water Projection Model accounts for the storage in the City’s surface water reservoirs, in conjunction with other available resources (i.e., groundwater and recycled water), needed to meet the City’s water demand. The model uses historical hydrologic information (rainfall, evaporation, inflow) based on the average for the worst drought period (2012 to 2014). Other data included in the model are:
• Water entitlement
• Current reservoir levels/storage
• Average GPCD community water demand
• Rainfall
• Temperature
• Evaporation
• Existing population
• Estimated population growth
16 Standard Specifications & Engineering Standards August 2020:
https://www.slocity.org/home/showpublisheddocument/27919/637341402080900000 17 San Luis Obispo Community Design Guidelines:
https://www.slocity.org/home/showpublisheddocument/2104/635491488007630000 18 Cal. Water Code §10632.1. can be accessed at:
https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=WAT&sectionNum=10632

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 20 The City uses the Water Projection Model to study the potential impacts of various intensities of drought conditions, including increased air temperature and evaporation rates, along with decreased precipitation. Utilizing the Water Projection Model as part of its water supply management strategy, the City can foresee whether a water supply shortage is anticipated in any given year and the severity of a shortage based on the availability of the City’s different sources of supply and water demand trends. When utilizing the Water Projection Model to estimate future water supply and demand, GPCD decreases in accordance with the 2020 WSCP. For example, water demand is calculated using an initial value of 117 GPCD and decreases by ten percent (corresponding to a ten-percent decrease in water use) to 105 GPCD when available supply is less than 5-years of estimated annual demand. This ten percent reduction is in alignment with the demand reduction that the City projects it would achieve from water conservation measures outlined in the WSCP. Model results using FY 2022 data showed that the City would have adequate supply to meet City demands without implementing the WSCP for ten years of continuous drought conditions (Figure 4).

Figure 4. Historical Storage Volume, in Acre-Feet, in Salinas and Whale Rock Reservoirs, and Projected Storage Volume Through an Extended Drought Period.

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 21 Water Shortage Contingency Plan
The City adopted the 2020 WSCP on June 15, 202119. The City’s WSCP provides the foundation for a staged response to worsening water shortage conditions. A water shortage could occur due to drought, earthquake, infrastructure failure, or another emergency. Drought may occur with unpredictable frequency, intensity, and duration. An update to the City’s Water Conservation Ordinance (Chapter 13.07 of the Municipal Code), established the regulations and procedures for implementing this Plan and updated the ordinance to comply with newer requirements under Water Code Chapter 3.3: Excessive Residential Water Use During Drought.

The City’s water shortage response is dependent on the ability to temporarily augment supply and/or reduce water demand. The City’s water shortage response would combine a variety of strategies including outreach, indoor water efficiency regulations, and outdoor irrigation restrictions, each increasing in intensity as the shortage persists and the City’s water supplies are further restricted. Implementation of these restrictions is necessary to conserve the City’s water supply for the greatest public benefit regarding domestic use, sanitation, and fire protection. It is the City’s goal to implement water demand reduction programs that will achieve measurable water savings without requiring customers to make significant lifestyle changes. In the more advanced water shortage stages lifestyle and water-use habit changes will be necessary.

The City’s WSCP consists of seven stages. The multi‐stage approach provides different levels of response for a water shortage event ranging from a ten percent supply deficiency up to a 50 percent or greater deficiency. The purpose of establishing water shortage stages is to clearly define the severity of the shortage and establish appropriate targets for demand reductions.

Defining these stages allows the City to respond to worsening conditions, with each stage “triggering” different actions. City Council may adopt variations of these Water Shortage Response Actions, independent from the stage resulting from the use of the Water Projection Model, to strategically address the current water shortage situation. 19 The City’s 2020 Water Shortage Contingency Plan can be accessed at:
https://www.slocity.org/home/showpublisheddocument/31039/637673766931570000

4. HISTORICAL AND

CURRENT WATER

CONSERVATION

PROGRAM
Water conservation is an integral part of the City’s overall water management strategy and was first referenced as a part of the City’s water management policies in 1973. In 1985, the City adopted the Annual Water Operational Plan policy that established water conservation as a means of extending water supplies during projected water shortages. Many technological and philosophical changes have occurred since that time, proving that water conservation can be used for both a short-term corrective measure to address immediate water supply shortages, and as a long-term solution to water supply reliability.

The City’s water conservation program aims to implement water conservation measures that optimize water supply, treatment, and delivery requirements to assist with the long-term sustainability of water resources. Water conservation measures are those programs and incentives that prevent the waste of water and promote the reasonable and efficient use and reuse of available supplies. These water conservation measures also allow the City to continue to achieve compliance with all state water reduction and efficiency regulations. The following provides a summary of the City’s current and historical water conservation efforts broken down into operational (internal facing) and external (customer oriented) water conservation programs.

Water conservation programs the City has implemented due to State or Federal requirements are outlined in the Regulatory Compliance section of this plan (Section 5).

Operational Programs
Operational programs encompass the programs and policies in place that prevent water waste, reduce water loss, and address water efficiency within the City’s water service operations internally. By implementing and adhering to these programs, the City aims to establish a sustainable water service system that not only conserves water but also decreases operational costs and fosters long-term environmental stewardship.

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 23 Metering and Billing
In accordance with the 2020 UWMP guidebook20 and CWC § 527 (2022)21, the City has implemented universal metering of all service (public and private) connections. Metering service connections encourages water conservation by effectively billing customers for the quantity of water consumed, forming a relationship between water consumed and the total cost of the water bill. The City also meters all water supply sources, including the City’s three primary water sources, groundwater, and recycled water sources. Having a fully metered system allows the City to effectively monitor and analyze where water losses are occurring and where additional water savings may be possible. The City continues to implement effective metering requirements for new developments by requiring separate water meters for residential, non-residential, and landscape use and is in the process of upgrading all water meters to digital water meters to deploy AMI in the future.

In addition to metering water consumption, the City’s water and wastewater rates are set to promote water conservation practices. All meters within the City are read and billed monthly and the City’s Utility Billing team performs routine billing audits to reduce data handling errors.

Although meters are read and customers are billed in hundred cubic feet (HCF), customers are provided conversion factors on both paper and online bills to convert consumption into gallons.

The City also provides sanitary sewer collection and treatment service for the community. Sewer rates for residential customers are based on the volume of metered water used each month and are set using wintertime water use. If in the event a meter cannot be read, for example due to repairs, or is not registering the City may estimate usage based on historical customer usage.

However, the City makes every effort to avoid estimating reading and attempts to limit estimated readings to no more than twice per year per customer. Details on how estimations are computed are outlined in Section 13.04.13022 of the City’s Municipal Code.

Water Loss Control Program
The City has been conducting annual American Water Works Association (AWWA) water loss audits since 2009 to identify and work towards reducing real and apparent losses within the distribution system. Water loss performance indicators identified from the 2016 – 2021 AWWA water loss audits are shown in Table 5 below. These water loss audits are prepared using the AWWA/IWA Water Audit Method, as described in the AWWA Manual of Water Supply Practices – M36, Water Audits and Loss Control Programs, and is validated by a certified Level 1 Water Audit Validator each year. To provide transparency and accountability, these audits are made available to the public on the City’s website23.
20 The Urban Water Management Plan Guidebook 2020 is available at: https://water.ca.gov/-/media/DWRWebsite/Web-Pages/Programs/Water-Use-And-Efficiency/Urban-Water-Use-Efficiency/Urban-WaterManagement-Plans/Final-2020-UWMP-Guidebook/UWMP-Guidebook-2020---Final-032921.pdf 21 2022 California Water Code, Section 527 is available at: https://law.justia.com/codes/california/2022/codewat/division-1/chapter-8/article-3-5/section-527/ 22 The City of San Luis Obispo municipal code 13.04.130, Water meters is available at:
https://sanluisobispo.municipal.codes/Code/13.04.130
23 The city’s Water Loss Audits from 2016 through 2021 can be accessed at:
https://www.slocity.org/government/department-directory/utilities-department/documents-and-files

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 24 Table 5. Key Water Loss Audit Metrics.
2016 2017 2018 2019 2020 2021
Apparent Losses (gal/conn/day) 8.34 12.62 8.99 6.25 6.33 6.28 Real Losses (gal/conn/day) 33.51 32.65 16.00 13.54 15.47 23.57 Non-Revenue Water as a Percent
of Cost of Operating System 2.8% 3.3% 2.3% 2.2% 2.8% 3.5% Infrastructure Leakage Index (ILI)1

2.02 1.96 0.97 0.93 1.06 1.60

1. The Infrastructure Leakage Index (ILI) is a ratio of the Real Losses to the Unavoidable Real Losses. This performance indicator is dimensionless. In California, the median ILI is 1.4.24 To further reduce water loss, the City conducts water service line replacement projects based on service line age and condition, along with extensive programs to replace defective polybutylene service lines that have been identified to have a high likelihood of failure. Water meter replacement programs exist to replace meters based on age, consequence of failure, and likelihood of failure. Along with these maintenance programs, the City also implements a valve exercising program that ensures water mains can be isolated during repairs to minimize the amount of water lost during water main breaks and repairs.

In 2015, the City completed its Potable Water Distribution System Operations Master Plan25 which identifies and prioritizes best practices, actions, and goals regarding future maintenance and capital improvement projects to help reduce future water loss due to infrastructure failure. That work effort included development of a comprehensive hydraulic model of the City’s water distribution system. The hydraulic model is used to determine available service pressure and is maintained annually to remain current with the waterline replacement project, new water main installations, zone consolidations, and other projects. In 2019, the City began using acoustic correlation equipment where acoustic sensors are attached to water valves to measure the speed at which sounds waves travel along the pipe. These sensors effectively listen to water flowing through the pipe and can detect when water is escaping through a leak. The location can then be pinpointed within about two feet, which helps reduce excavation costs. Using this tool regularly, the City can more accurately locate small leaks, resulting in less damage to surrounding infrastructure, further optimize its capital spending, minimize water main breaks, water loss, and damage from leaks, and better manage aging water infrastructure. Moving forward, the City plans to continue to work to reduce real and apparent water losses by replacing aging infrastructure to prevent pipe breaks and leaks, implementing a comprehensive meter testing and calibration program to ensure water meters are functioning per manufacturers’ specifications, and continuing with its comprehensive meter replacement strategy to ensure water used at homes and businesses is correctly recorded.

Recycled Water Program
The City of San Luis Obispo has been utilizing recycled water as a component of its multi-source water supply since 2006. Recycled water acts as a means of water conservation by offsetting usage that would have otherwise utilized the City’s potable (drinking water) supply. Additionally, because recycled water is reliant on wastewater flows, and therefore less dependent on weather 24 The California Department of Water Resources Water Loss Audit Reports and associated data for calendar years 2016 to present can be found at: https://wuedata.water.ca.gov/ 25 The City of San Luis Obispo Final Potable Water Distribution System Operations Master Plan, December 2015, can be found at: https://www.slocity.org/home/showpublisheddocument/6439/636009798150130000

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 25 than the City’s surface water reservoirs, recycled water helps to diversify the City’s water supply portfolio and acts as an alternative, reliable water supply during times of drought.

Currently there are 54 recycled water sites
throughout the City. Each site is required to
have a site supervisor, which must undergo a
site supervisor training and complete quarterly
reports including identifying water waste runoff
and system deficiencies. Site supervisors are
either property owners, property managers, or
landscape maintenance professionals.

Although recycled water is often not subject to
water efficiency ordinances and statemandated reduction requirements, droughts across the State, and specifically in the Central
Coast region, have contribute to a heightened
interest in the City’s recycled water supply over
the years. Improvements in water conservation
or changes in use, such as potable reuse,
would impact how recycled water is used
throughout the City. Additional information regarding the City’s recycled water program can be found in the City’s 2017 Recycled Water Master Plan26.

External Programs
External, customer-facing programs are instrumental in engaging the community and promoting water conservation practices beyond the City's water service operations. These programs are designed to educate and encourage customers to play an active role in preserving water resources and adopting sustainable water use practices. By implementing these programs, the City aims to empower its residents and businesses to make informed choices that contribute to a more water-conscious community and cultivate a culture of responsible water consumption.

Water Use Reports and Audits
The City’s Water Resources section offers no-cost assistance to both residential and nonresidential customers who have high water use or would like to reduce their water consumption.

Water resource technicians examine historical water use and the property with the customer to identify potential water saving opportunities and provide information about irrigation reduction methods, proper property maintenance, confirm meter functionality, water leak determination, low flow fixtures installation, and general information on methods for reducing water use. This service is often offered proactively to customers who have unexplained high use, water waste violations, or other instances where a review could provide potential water savings. However, customers may also request assistance at any time. To maximize staff time and resources, staff first attempt to work with customers over the phone or via email. If staff are not able to contact a customer, they will conduct a site visit and either make contact in person or leave a door hanger. Customers 26 The City of San Luis Obispo 2017 Recycled Water Master Plan is available at:
https://www.slocity.org/home/showpublisheddocument/14955/636269147657570000

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 26 are also provided a copy of the City’s Water Audit Worksheet27 to conduct a more in-depth analysis of indoor and outdoor daily water use. In the future, the program may be expanded to include more in-depth leak detection methods (i.e. acoustic listening devices) and irrigation audits.

Complimentary Devices and Financial Incentives
The City provides various water conservation devices as a complimentary service to the community. Currently, the program provides low-flow showerheads, faucet aerators, flow meter bags, five-minute shower timers, dish squeegees, leak detection dye tablets, hose nozzles, soil moisture meters, save water posters, and lawn signs. Customers are encouraged to notify the City if there are items they are interested in that are not currently made available as part of the program. Staff will continue to stock and promote the use of these and other complimentary items as funding allows.

The City has also provided various rebates for water conservation devices and actions over the years. A rebate is a partial refund after a customer has purchased a water-efficient device to incentivize customers to purchase a water-efficient device over a less efficient device. During the drought in 2015, the City Council authorized $100,000 in support of effective rebate programs.

Rebate of $100 dollar were provided for qualified toilet and washing machine replacements. City Council authorized $30,000 in 2022 to launch an updated rebate program. Beginning in 2023, the City now offers rebates for high-efficiency toilets and urinals, large landscape smart irrigation controllers, and water-efficient restaurant dipper wells. Current rebate funding is equitably allocated between SFR, MFR, and CII account holders, ensuring the program does not favor one customer class. Should funding not be exhausted by one customer class type, staff will reevaluate allocating funds to other customer class types, should those classes have fully exhausted their own allocated funds. Lastly, the City has also entered into a partnership with Rachio through the California Water Efficiency Partnership to offer discounted smart irrigation controllers to single family residences. Offering rebates and discounted smart irrigation controllers assist customers to modify their irrigation systems to be more efficient and apply water in a more efficient manner. 27 The City of San Luis Obispo Water Audit Worksheet is available at:
https://www.slocity.org/home/showpublisheddocument/30756/637883714862000000

City of San Luis Obispo Water Conservation and Efficiency Plan P a g e | 27 Public Information and Outreach Programs
The City has used public education and outreach as a mechanism for decreasing water use in the City and for promoting water conservation since the 1970s. Public education is often a component of water conservation programs aimed at encouraging customers to proactively decrease water usage and participate in conservation rebates and programs. Staff routinely update and maintain the City’s water conservation website, release city news articles and enotifications, participate in local events such as farmers markets, community events, and local career fairs, host community tours at Whale Rock Reservoir, the WTP, and the WRRF, provide informational brochures and printed newsletters, and create social media campaigns (Facebook, Instagram, YouTube, and LinkedIn), and paid radio advertising. Additional public outreach and education programs have
included informational
welcome emails, “We’ve Let it
Go, California Gold” landscape
signs deployed during the
drought on turf areas the City
maintains, billing inserts, “how
to” videos, direct mail
campaigns, and meetings with
local business groups and
homeowners associations. The
City is committed to reviewing
and modifying the public
education and outreach
program to ensure that
messaging stays effective and
relevant. For example, in 2021,
the City launched an interactive
street sticker campaign, where
residents and visitors could
scan QR codes on various infrastructure locations in order to access an interactive, virtual ArcGIS Storymap28 of the City’s water and wastewater resources and infrastructure. In 2022, staff launched a Water-Wise Landscape of the Month competition where residents could submit their yard or nominate neighbors’ yards that embrace water-wise landscaping techniques; helping to encourage residents to conduct landscape transformations that adopt climate-appropriate native plants that require little to no supplemental irrigation. Moving forward staff are working to create virtual reality (VR) tours and educational games to educate a wider audience and utilize new, interactive outreach methods.

The City has also been a long time member of the San Luis Obispo Partners in Water Conservation, a joint regional effort between local water purveyors in San Luis Obispo County, to promote and collaborate on water conservation and efficiency measures. Participation helps facilitate regional knowledge sharing and educational programs. Most notably, the partnership co28 The City of San Luis Obispo ArcGIS storymap Get to know YOUR water can be accessed at:
www.slocity.org/yourwater